Market entry strategies
...ng expertise which could well be utilised overseas. Although a large company in the UK, Starbrew is a minnow compared to the big brewery groups which operate in the global market (it is assumed that Starbrew does not have the financial capabilities to take high risks) and an unwelcome take-over is always likely. They realise that they have to expand to survive, and that means overseas. General Marketing Opportunities: the Malaysian market As outlined in the PEST-analysis one prominent property of the Malaysian market is its diversity in ethnic groups as well as in religions. There will be a variety of tastes and preferences stemming from diverse cultures. Moreover are there groups with larger differences in purchasing power and willingness to spend money on leisure products and services, Starbrew’s predominant sphere. Groups range from poorer rural population to expatriates of larger companies doing business in the cities. One can identify at least three major segments that should be examined individually. The first segment consists of the poorer rural population which has less access to education and will be less inclined to spend money on leisure products and services. The second segment is the wealthier middle and upper middle class. Large parts of ethnic groups that are not native but who have become resident in Malaysia, e.g. the Chinese, belong to this segment. Lastly, one can consider expatriates, travelling business men and women as well as tourists who are most likely to spend money on leisure products and services as a third segment. Targeting segments two and three is most likely to be successful. The image of Starbrew is strongly linked to the UK as a country because of its roots in British culture, its marketing expertise and family tradition and because it is well known in the whole of the UK. Furthermore, Starbrew’s presence in other markets is very limited. Its products therefore have a ‘homely’ image to people from the UK, particularly in a foreign environment. The link of the Starbrew’s products to the UK can be an asset if promotion successfully links products to British qualities or traits, particularly as perceived by Malaysians. This could, for example, be the eccentric or the traditional traits of British culture. The fact that the Malaysian beer market is dominated by foreign brands such as Carlsberg, Heineken and Guinness shows that renowned western products are not only accepted but also perceived having a positive image and possibly being of higher value. Starbrew’s strong image of UK tradition can cater towards this perception although it is not as renowned as Guinness, for example. Yet, as Guinness is Irish, Starbrew has the chance of establishing itself as a genuine British brand. Concerning Starbrew’s product and service range one can say that the traditional products such as ales, bitters and stouts will be less profitable in Malaysia since these beer types are currently among the cheapest, because of the strong competition. Lagers, one of Starbrew’s recently introduced product types, are more expensive and have a higher market share not only with regards to value but also volume. Because of high import duties for alcoholic products, all brands with significant market shares are produced locally: all stouts and bitters stem from Guinness Anchor BHD – Malaysia, which also produces the lager Heineken. The other lager producers, that do not have stouts and bitters, are Carlsberg and Tsing Tao. Beer and other alcoholic drinks are still relatively expensive, because of high excise duty and sales tax. Starbrew cannot price its products higher than comparable ones because the competitor’s brands are too strong and the market is too small. Rather a similar or even a lower price range needs to be targeted. This represents a problem, in as far as the less expensive and less profitable drinks are Starbrew’s traditional ones and carry most of the British image of Starbrew. Alcopops are premium priced life-style drinks, which are preferred by younger customers. They are traditional mixed drinks and cocktails in a new, younger package. They are ideal for club consumption, i.e. standing up as opposed to while sitting at a table. Their high price and emphasis on product attributes limits the target to tourists and upper class nationals of the above age group, i.e. to parts of segments two and three. The market is therefore very small. To reach a positive conclusion regarding the opportunity of selling Alcopops in the target market, a more accurate market research is indispensable. Soft drinks represent an opportunity inasmuch as their potential market does not exclude Muslims, the largest religious groups in Malaysia, because the drinks do not contain alcohol. Moreover, the warm climate potentially encourages the consumption of refreshing drinks. The drawback is that Starbrew’s soft drinks are not as established as products from Coca Cola, Pepsi or Schweppes, yet. Furthermore, due to the fact that the functi...