BA (Hons) Management, Business & Administration

(Full Time Degree)

Assignment in International Marketing

INTERNATIONAL MARKETING STRATEGY FOR

BLACK SHEEP BREWERY PLC

By Stefanie Aulenbach

Submission Date: 04/06/2007

Words: 2993

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Table of Content

1. Introduction 3

1.1 Company Profile 3

1.2 The Beer Industry 4

1.3 Goals and Objectives 4

2. Environmental Analysis 5

2.1Analysis of the Internal Environment 5

2.1.1 Swot-Analysis 5

2.2. Analysis of the External Environment 6

3. Market Choice- Recommendation 6

3.1 Market Entry Strategy 8

3.2 Market Entry Methods 8

3.3 Implementation 10

3.3.1 The Marketing Mix 10

3.3.1.1 Product 11

3.3.1.2 Place 12

3.3.1.3 Price 12

3.3.1.4 Promotion 12

3.3.1.5 People 13

3.3.1.6 Process 13

3.3.1.7 Physical Evidence 13

4. Conclusion 14

5. Bibliography 15

6. Appendices 17

Appendix I:

SLEPT-Analysis South Africa * 18

Appendix II: SLEPT-Analysis Spain * 19

Appendix V: Beer Consumption by Country * 22

Appendix VI: Differentiation Strategy * 23

Appendix VII: Market Development Strategy * 24

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1. Introduction

"International marketing is the multinational process of planning and executing the

conception, pricing, promotion and distribution of ideas, goods and services to create

exchanges that satisfy individual and organisational objectives."

(Onkvisit and Shaw, 1997)

This report analyses the Black Sheep Brewery and gives recommendations on

international expansion. It will analyse four pre-selected possible new markets,

(Canada, Japan, South Africa and Spain) recommend one of them for future

expansion and outline a market entry strategy and a marketing mix for this new

market. The author is a consultant employed by New Paradigms Research

Organisation.

According to McCarthy and Perreault (1994) a 5 step approach has to be

implemented to find a new potential market:

1. Defining the problem

2. Analysing the situation

3. getting problem-specific data

4. Interpreting the data

5. Solving the problem

In order to find the best potential market for the brewery the author has to examine

the different potential countries in consideration of their accessibility, market size and

profitability. Furthermore recommendations due to the market choice, the market

entry strategy and the marketing mix will be given.

1.1 Company Profile

The Black Sheep Brewery was founded in 1922 by Paul Theakston in Massham, his

family has been brewing beer since 160 years.

Its product portfolio consists of four different types of beer: Black Sheep bitter, Black

Sheep special, Black Sheep Emmerdale and Black Sheep Riggwelter. With these

products, the company generates an annual turnover of £10m, mainly through

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wholesalers and large pub chains. The company is already active in several countries

which include the USA, Finland, Singapore and Hong Kong (Black Sheep Brewery,

2006)

For its ongoing expansion it is now considering to enter a new market in either Japan,

Spain, Canada or South Africa. In the next chapter, these markets will be analysed

and one of them will be selected as a recommendation for the brewery.

1.2 The Beer Industry

The global beer market showed a stable growth during the last years and is expected

to further increase. (www.datamonitor.com) This is due to the globalisation. The

national beer markets approach saturation, therefore many beer brewers, Black

Sheep Brewery is among them, are expanding internationally.

Furthermore, the key developing markets in Asia-Pacific are likely to maintain

economy driven and especially microbreweries will develop niche and speciality

beers to meet the consumers demand and needs in different beer varieties. (Nugent,

2005)

1.3 Goals and Objectives

- increasing world-wide presence in beer market

- increase sales, profit, competitiveness and market share

- keep good reputation and quality

- minimise costs and risks

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2. Environmental Analysis

The environmental analysis is "the systematic and ongoing collection and

interpretation of data about internal and external factors that may affect marketing

and performance" (Wood, 2004, pg. 361)

2.1Analysis of the Internal Environment

To identify the company′s strengths, weaknesses and opportunities that need to be

considered and facilitate following recommendations which market Black Sheep

should enter, the consultant has applied the Swot Analysis.( Wood, 2004, pg. 366)

2.1.1 Swot-Analysis

The SWOT ­ analysis (Strength Weaknesses Opportunities Threats) "summarises the

key issues from the business environment and the strategic capability of an

organization that are most likely to impact on strategic development." (Johnson &

Scholes, 2005, p. 102)

The SWOT- Analysis is a helpful tool to develop the most appropriate market entry

strategy for the Black Sheep Brewery:

Strengths:

Weaknesses:

- good reputation and

- small

brewery

quality

- traditional therefore

- unique and traditional

- image doesn′t allow to

range of beers

produce in foreign

- strong corporate culture

countries therefore they

- six generations of

cannot reduce costs by

brewing experience

exploiting low labour

- gained several awards

costs limited financial

Visitor′s Centre is a year-

possibilities

round attraction in the

Yorkshire

Opportunities:

Threats:

- high market growth

- high

competition

- further

expansion,

- health & life-style trends

internationalisation of

- speciality and new beers

business

vs. traditional

- increasing

competitiveness and

market share

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2.2. Analysis of the External Environment

To analyse the critical micro environmental issues and influences within the external

environment which affect an organisation, several approaches can be used.

(Drummond & Ensor, 1999, pg.13)

In this section the consultant analyses the potential markets and gives

recommendations which of them is the most appropriate for the Black Sheep Brewery

to penetrate. Therefore the SLEPT- Analysis and the 12C-Framework were used. As

some of the C-factors were already covered with the SLEPT-Analysis only 4C-factors

were used to as supplement. (for detailed version see Appendix I-IV)

The markets attractiveness is determined by the market size, market growth rate,

competition, the profit potential the market accessibility and sustainability. Moreover,

the capabilities of Black Sheep to cope with the challenges of the foreign market

have to be taken into consideration.

3. Market Choice- Recommendation

As mentioned above, the consultant investigated all countries leaving out the fact that

Black Sheep already markets its beer in all of the considered countries except South

Africa.

After careful analysis and evaluation of all relevant information of the countries the

consultant has come to the following results:

South Africa

is a middle income country with an emerging economy and good GDP

growth rates. Although an increase of the value of the South African beer market is

predicted (www.datamonitor.com) and South Africa is hosting the FIFA World Cup

2010, which would be a great opportunity to promote a new product, the consultant

would not recommend it as she has the opinion that Black Sheep would not benefit

long-term. Moreover, there exist to many risks: As the major competitor is SAB Miller

with a market share of 97.5% it is almost impossible for a small company like Black

Sheep to be able to compete due to the missing resources. Additionally, the fact of its

inadequate infrastructure and technology and the instable political situation are

bearing further risks for the Black Sheep Brewery.

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