abinbev project on sales promotion
TRANSCRIPT
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1.1 GENERAL INTRODUCTION ABOUT THE SECTOR
FOOD PROCESSING BEVERAGE SECTOR
The food processing sector is highly fragmented industry, it widely comprises of the following sub-segments: fruits and vegetables, milk and milk products, beer and alcoholic beverages, meat and poultry, marine products, grain processing, packaged or convenience food and packaged drinks. A huge number of entrepreneurs in this industry are small in terms of their production and operations, and are largely concentrated in the unorganized segment. This segment accounts for more than 70% of the output in terms of volume and 50% in terms of value. Though the organized sector seems comparatively small, it is growing at a much faster pace.
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Structure of the Indian Food Processing Industry
INDUSTRY SUB-SEGMENTS
FRUITS & VEGETABLES The installed capacity of fruits and vegetables processing industry has doubled from 1.1 mn tonnes in January 1993 to 2.1 mn tonnes in 2006. Presently, the processing of fruits and vegetables is estimated to be around 2.2% of the total production in the country. The major processed items in this segment are fruit pulps and juices, fruit based ready-to-serve beverages, canned fruits and vegetables, jams, squashes, pickles, chutneys and dehydrated vegetables. The new arrivals in this segment are vegetable curries in reportable pouches, canned mushroom and mushroom products, dried fruits and vegetables and fruit juice concentrates. The fruits and vegetable processing industry is rather fragmented. A large
Numbers of units are in household and small-scale sector, having low
Capacities of up to 250 tones per annum. From the year 2000 onwards the
Industry has seen a significant growth in ready-to-serve beverages, pulps and
Fruit juices, dehydrated and frozen fruits and vegetable products, pickles,
Processed mushrooms and curried vegetables, and units engaged in these
Segments are export oriented.
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MILK AND MILK PRODUCTS India is with highest livestock populations in the world, it accounts 50% of the Buffaloes and 20% of the world’s cattle population, most of which are milch Cows and milch buffaloes. India’s dairy industry is considered as one of the Most successful development industry in the post-Independence era. In 2005-06 total milk productions in the country was over 90 million tonnes With a per capital availability of 229 Gms per day. During 1993-2005, the dairy Industry recorded an annual growth of 4%, which is almost 3 times the Average growth rate of the dairy industry in the world. The total milk Processing in India is around 35%, of which the organized dairy industry Accounts for 13% while remaining is either consumed at farm level, or sold as Fresh, non-pasteurized milk through unorganized channels. In an organized dairy industry, dairy cooperatives account for the major share of processed liquid milk marketed in India. Milk is processed and marketed by 170 Milk Producers’ Cooperative Unions, which federate into 15 State Cooperative Milk Marketing Federations. Over the years, several brands have been created by cooperatives like Amul (GCMMF), Vijaya (AP), Verka (Punjab), Saras (Rajasthan). Nandini (Karnataka), Milma (Kerala) and Gokul (Kolhapur).
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The milk surplus states in India are Uttar Pradesh, Punjab, Haryana, Rajasthan, Gujarat, Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu. The manufacturing of milk products is very much concentrated in these States due to the availability of milk in huge quantity. According to the Ministry of Food Processing Industries, exports of dairy Products have been growing at the rate of 25% per annum in terms of Quantity and 28% in terms of value since 2001. Significant investment Opportunities exist for the manufacturing of value-added milk products like Milk powder, packaged milk, butter, ghee, cheese and ready-to-drink milk Products. Meat & Poultry Since 1995, production of meat and its products has been significantly Growing at a rate of 4% per annum. Presently the processing level of buffalo Meat is estimated at 21%, poultry is estimated at 6% while marine products Are estimated at 8%. But only about 1% of the total meat is converted into Value added products like sausages, ham, bacon, kababs, meatballs, etc. Processing of meat is licensed under the Meat Food Products Order, 1973. Presently the country has 3,600 slaughterhouses, 9 modern abattoirs and 171 Meat-processing units licensed under the meat products order.
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Poultry industry is also among the faster growing sectors rising at a rate of 8%
Per year. It is observed that the vertical integration of poultry production and
Marketing has lowered costs of production, consumer prices of poultry meat
And marketing margins. There are eight integrated poultry processing units in
The country, which of course hold a significant share in the industry.
Meat export is largely driven by poultry, buffalo, sheep and goat meat, which Is growing at close to 30% per annum in terms of quantity. It is considered That the growing number of fast food outlets in the country has and will have A notable impact on the meat processing industry. Marine Products India is the largest fish producing country in the world it is the third largest fish Producer in the world while ranks second in inland fish production. Categorically India’s potential for fishes, from both inland and marine Resources, is supplemented by the 8,000 km coastline, 3 mn hectares of Reservoirs, 50,600 sq km of continental shelf area, 1.4 mn hectares of Brackish water and 2.2 mn sq km of exclusive economic zone. Processing of marine produce into canned and frozen forms is carried out fully For the export market. With regards to infrastructure facilities for processing of Marine products there are 372 freezing units with a daily processing capacity Of 10,320 tonnes and 504 frozen storage facilities for safe storage with a
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Capacity of 138,229.10 tonnes, besides there is 11 surimi units, 473 pre- Processing centers and 236 other storages. Processed fish products for export include conventional block frozen products, Individual quick frozen products (IQF), minced fish products like fish sausage, Cakes, cutlets, pastes, surimi, texturised products and dry fish etc.
Exports of marine products have been inconsistent and on a declining trend
Which can be owed to the adverse market conditions prevailing in the
European and American markets. The anti-dumping procedure initiated by the
US Government has affected India’s shrimp exports to the US.
Grain Processing Processing of grain includes milling of wheat, rice and pulses. In 1999-00, There were more than 91,000 rice hullers and 2,60,000 small flourmills which Were engaged in primary milling. There are 43,000 modernized rice mills and Huller-cum-Sheller’s. Around 820 large flourmills in the country convert about 10.5 mn tonnes of wheat into wheat products. Also there are 10,000 pulse Mills milling about 75% of pulse production of 14 mn tonnes in the country. Primary milling of grains is the considered to be the important activity in the Grain-processing segment of the industry. However, primary milling adds little To shelf life, wastage control and value addition. Around 65% of rice Production is milled in modern rice mills. However, the seller-cum-huller mills Operating give low recovery. Wheat is processed for flour, refined wheat flour, Semolina and grits. Apart from the 820 large flourmills, there are over 3 lakh
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Small units operating in this segment in the unorganized sector. Dal milling is The third largest in the grain processing industry, and have about 11,000 Mechanized mills in the organized segment. Oilseed processing is another Major segment, an activity largely concentrated in the cottage industry. According to estimates, there are approximately 2.5 lakh ghanis and kolus Which are animal operated oil expellers, 50,000 mechanical oil expellers, 15,500 oil mills, 725 solvent extraction plants, 300 oil refineries and over 175 Hydrogenated vegetable oil plants. Indian Basmati rice has gained international recognition, and is a premium Export product. Branded grains as well as grain processing is now gaining Popularity due to hygienic packaging. Beer & Alcoholic Beverages When discussed on alcoholic beverages, India is considered to be the third Largest market for alcoholic beverages in the world. The domestic beer and Alcoholic beverage market is largely dominated by United Breweries, SAB Miller and Radico Khaitan. The demand for beer and spirits is estimated to be Around 373 million cases per year. There are 12 joint venture companies Having a licensed capacity of 33,919 kilolitres per annum for production of Grain based alcoholic beverages. Around 56 units are manufacturing beer Under license from the Government of India. Country liquor and Indian Made Foreign Liquor are the two segments in liquor; Both cater to different sections of society. The former is very much consumed In rural areas and by low-income groups, while the middle and high-income
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Groups consume the latter. Liquor license outlets in India figures approximately 23,000 with another 10,000 outlets in the form of bars and restaurants. Regulations in this sector Differ state-wise in terms of excise and custom duty. In Tamil Nadu, Kerala And Andhra Pradesh, the state government controls the distribution, and any Change XVIII in the ruling party has a direct impact on the availability of Alcohol.
The wine industry in India has come into prominence lately and has been Receiving support from the Government as well, to promote the industry,. The Market for this industry has been estimated to be growing at around 25% Annually. Maharashtra has emerged as an important state for the manufacture Of wines. Consumer Foods This segment comprises of packaged foods, aerated soft drinks, packaged drinking water and alcoholic beverages. Packaged / Convenience Foods Consumer food industry mainly consists of ready-to-eat and ready-to-cook Products, salted snacks, chips, pasta products, cocoa based products, bakery Products, biscuits, soft drinks, etc. There are around 60,000 bakeries, several pasta food units and 20,000 Traditional food units and in India. The bakery industry is among the few Processed food segments whose production has been increasing consistently In the country in the last few years. Products of bakery include bread, biscuits, Pastries, cakes, buns, Rusk etc. This activity is mostly concentrated in the
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Unorganized sector. Bread and biscuits constitute the largest segment of Consumer foods with an annual production of around 4.00 million tonnes. Bread manufacturing is reserved for the small-scale sector. Out of the total Production of bread, 40% is produced in the organized sector and remaining 60% in the unorganized sector, in the production of biscuits the share of Unorganized sector is about 80%. Cocoa Products Cocoa products like chocolates, drinking chocolate, cocoa butter substitutes, Cocoa based malted milk foods are highly in demand these days, 20 Production units are engaged in their manufacture with an annual production Of about 34,000 tonnes. Soft drinks After packed tea and packed biscuits the soft drink segment is considered to Be the 3rd largest in the packaged foods industry. Over 100 plants are Engaged in aerated soft drinks industry and provide huge employment. It has Obviously attracted one of the highest FDI in the country. Strong forward and Backward linkages with glass, plastic, refrigeration, sugar and the Transportation industries further strengthen the position of the industry. Soft Drink segment has a huge potential in the Indian market, as a vast portion of The market is still to cover.
Constraints & Drivers of Growth Changing lifestyles, food habits, organized food retail and urbanization are the Key factors for processed foods in India, these are post-liberalization trends And they give boost to the sector.
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There has been a notable change in consumption pattern in India. Unlike Earlier, now the share and growth rates for fruits, vegetables, meats and dairy Have gone higher compared to cereals and pulses. Such a shift implies a Need to diversify the food production base to match the changing Consumption preferences.
Also in developed countries it has been observed that there has been a shift From carbohydrate staple to animal sources and sugar. Going by this pattern, In future, there will be demand for prepared meals, snack foods and Convenience foods and further on the demand would shift towards functional, Organic and diet foods.
Some of the key constraints identified by the food processing industry Include: Poor infrastructure in terms of cold storage, warehousing, etc Inadequate quality control and testing infrastructure Inefficient supply chain and involvement of middlemen High transportation and inventory carrying cost . Affordability, cultural and regional preference of fresh food . High taxation . High packaging cost
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1.2 INDUSTRY PROFILE
(A) ORIGIN AND DEVELOPMENT OF BEER INDUSTRY
Beer is one of the world's oldest beverages, with the history of beer dating back to the 6th millennium BC, and being recorded in the written history of Iraq.The earliest Sumerian writings contain references to beer. A prayer to the goddess Ninkasi known as "The Hymn to Ninkasi" serves as both a prayer as well as a method of remembering the recipe for beer in a culture with few literate people.
As almost any substance containing carbohydrates, mainly sugar or starch, can naturally undergo fermentation, it is likely that beer-like beverages were independently invented among various cultures throughout the world. The invention of bread and beer has been argued to be responsible for humanity's ability to develop technology and build civilization. The earliest known chemical evidence of beer dates to circa 3500–3100 BC from the site of Godin Tepe in the Zagros Mountains of western Iran.
Beer may have been known in Neolithic Europe as far back as 3000 BC,though was mainly brewed on a domestic scale.
Beer produced before the Industrial Revolution continued to be made and sold on a domestic scale, although by the 7th century AD beer was also being produced and sold by European monasteries. During the Industrial Revolution, the production of beer moved from artisanal manufacture to industrial manufacture, and domestic manufacture ceased to be significant by the end of the 19th century. The development of hydrometers and thermometers changed brewing by allowing the brewer more control of the process, and greater knowledge of the results.
Historical documentation shows that around 5,000 years ago, ancient Chinese civilizations were brewing a beer-like substance known as “Kui”. In fact, a clay tablet found in what was ancient Mesopotamia, indicated that brewing was a fairly well respected occupation during the time, and that the majority of brewers were women.
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Early traces of beer and the brewing process have been found in ancient Babylonia as well. At the time, brewers were women as well, but also Priestesses. Some types of beers were used especially in religious ceremonies. In 2,100 BC, the Babylonian king Hammurabi included regulations governing tavern keepers in his law code for the kingdom.
Beer drinking accessories, such as mugs, have also been found in Israel, and date back to nearly 2,000 BC.
Beer was part of the daily diet of Egyptian Pharaohs over 5,000 years ago. Then, it was made from baked barley bread, and was also used as a sacrament in religious practices.
The role of beer in Egyptian society was far greater than just a drink. Often, beer was prescribed to treat various illnesses. Beer was considered to be the most proper gift to give to Egyptian Pharaohs, and it was also offered as a sacrifice to the gods.
Based on historical evidence, it appears that the Egyptians taught the Greeks the beer brewing process. The Greek writer Sophocles (450 BC) discussed the concept of moderation when it came to consuming beer in Greek culture, and believed that the best diet for Greeks consisted of bread, meats, various types of vegetables, and beer or zythos as they called it.
The Greeks later taught the Roman civilization the process of brewing, who in turn later taught the early British/Anglo-Saxonstribes.
The process of brewing beer grew tremendously during the rise of Christianity. This was primarily because of the roles that monks had in the production of beer. Monasteries were some of the first organizations to brew beer as a trade. Monks built breweries as part of their efforts to provide food, shelter and drink to various travelers and pilgrims.
A large amount of Christian saints have relationships to brewing. Saint Augustine of Hippo, Saint Luke the Evangelist, and Saint Nicholas all are considered to be patrons of brewing.
Emperor Charlemagne, the ruler of the Christian kingdom around 770 AD considered beer to be an important part of living, and is often thought to have trained Christian brewers himself.
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(B) Growth and present status of beer industry The Indian Beer Industry The Indian beer industry has been witnessing steady growth of 10 - 17% per Year over the last ten years. The rate of growth has increased in recent Years, with volumes passing 170m cases during the 2008-2009 financial year. With the average age of the population on the decrease and income levels on The increase, the popularity of beer in the country continues to rise. The Indian beer industry has witnessed a big change during the last five Years. The industry was previously dominated by competition between the Vijay Mallya-controlled United Breweries Group and the Manu Chabbria- Controlled Shaw Wallace. The scenario changed, however, with the entry of [SABMiller in India The international beer giant started by acquiring small breweries in the south But then completely changed the landscape with the acquisition of Shaw Wallace’s beer portfolio for a reported US$264m in 2003. This gave SABMiller Ownership of strong brands like Hayward’s 5000, along with its existing Brands. After the acquisition, SABMiller focused on spreading its footprint across India, including opening new breweries in states where Shaw Wallace Did not have a presence. The rate of growth has remained steady in recent years, with volumes passing 155 million cases during the 2008 from a mare 70 million cases in 2002. The Indian beer market is dominated by strong beers (>5% alcohol by volume), Which account for 70% of the total beer industry. The premium beer market is
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A mere 5% of the total but this segment is rapidly expanding, touching a Growth rate of between 35-40%%. With the global market experiencing Low/stagnating growth in recent years, the focus is now on the Asia-Pacific Region specially. For instance, the Chinese beer market has grown at an Astounding pace in recent years, spurred on by the massive levels of foreign Investment in the market, along with the rise in the average levels of Consumer spending and thanks to the economic reform policies of the Government. Total consumption of beer in China grew by 33.56% between 2000 and 2006 to reach a total market volume of 30.47 billion liters. With the Per capital consumption of 22 liters, China has now overtaken the US to Become the largest national beer market in the world. The brewing industry in China has been one of those quickest to modernize And Indian beer Industry should look to model themselves on their neighbors. India is predominantly a hard spirits market and beer is a minority preference For those who consume Beverage Alcohol. Beer makes only 4% by revenue Of the total alcoholic market. It would be pertinent to mention that while per Capital consumption of spirits in India is 65% of global average, in the case of Beer it is a mere 3% of global average. Moreover, the Indian beer industry is plagued with myriad taxes & levies that Vary from state to state. In fact no two states or UP have a same or even a Similar policy. The inconsistency in the state policies leads to fostering an environment of
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Mismanagement & lack of focused strategy to manage state finances. States Usually do not adopt policies based on scientific management or by Considering the social aspects of managing this trade. The policies Is generally short term in their outlook, with little or no thought to long-term Interests of all stakeholders, including the general public. World over it has been identified that policy focus should not as much be on Controlling consumption but more importantly on reducing harm. Therefore, beer and wine dominate the alcohol market in most countries. It is Considered to be common man’s drink and in many countries is even priced in parity with soft drinks. But in India things are different in India. The per capita consumption of beer in India is just 1 liter per person per year As compared to the world average of 22 liters. This is one of the lowest in the World.
(C) Future of the beer industry This is the first time just-drinks have taken a look at the beer market in a Specific country. Just-drinks estimate that beer sales in India are forecast to grow at a Compound annual growth rate of 17.2% to 2011. So, with the Indian beer Industry seeing steady growth during the last decade, due to strong economic Growth resulting in high disposable incomes, an increase in beer sales in the Next two or three years is expected. In addition to the increase in sales, the number of brands is expected to Increase in the near future, with existing players like United Breweries and SABMiller expanding their ranges, and new players like Anheuser-Busch,
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Carlsberg and InBev setting up production facilities. This is the first time just- Drinks have taken a look at the beer market in a specific country.
The Indian beer market has been growing rapidly over the last 10 years, due to the positive impact of demographic trends and expected changes, like:
•Rising Income Levels
•Changing Age Profile
•Changing Lifestyle
•Reduction in Beer Prices
•India has predominantly a warm/hot climate
•The beer-drinkers in the country are much younger than the average beer-drinker
Elsewhere in the world. This makes them more likely to carry the brand with them
For a lifetime.
Increasing exposure to beer and wine drinking, mainly due to media and
Consumer mobility.
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CHAPTER 2
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2.1 Origin of the origination
Anheuser-Busch InBev (AB InBev) is a publicly traded company, based in
Leuven, Belgium. It is the largest global brewer with nearly 25% global market
Share and one of the worlds top five consumer products companies by
EBITA.
Anheuser-Busch InBev grew from the Den Hoorn brewery in Leuven, dating back to 1366, the Anheuser & Co brewery, established in 1860 in St. Louis, Missouri, USA and AmBev, created in 1999 with the merger of the two biggest Brazilian brewers, Antarctica (founded in 1882) and Brahma (founded in 1888). In 1987 the two largest breweries in Belgium merged: Artois, located in Leuven, and Piedboeuf, located in Jupille, forming Interbrew. In 2004 Interbrew and AmBev merged, creating the world's largest brewer.
In 2006, InBev acquired the Fujian Sedrin brewery in China, making InBev the No. 3 brewers in China - the world's largest beer market. In 2007, Labatt acquired Lakeport in Canada, and InBev increased its shareholding in Quinsa, strengthening the company’s foothold in Argentina, Bolivia, Chile, Paraguay and Uruguay. On 18 November 2008, the combination of InBev and Anheuser-Busch
Closed, creating Anheuser-Busch InBev, the leading global brewer and one of
The top five consumer products companies in the world. Under the terms of
The merger agreement, all shares of Anheuser-Busch will be acquired for 70
USD per share in cash, for an aggregate of 52 billion USD.
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2.2 Growth and development of organization.
Anheuser-Busch is the largest brewing company in the United States in volume with a 49.2% share of beer sales. It was the world's largest brewing company based on revenue, but third in brewing volume, before the proposed merger with InBev announced 13 July 2008. The division operates 12 breweries in the United States and 17 others overseas.
Anheuser-Busch's best known beers included brands such as Budweiser, the Busch (originally known as Busch Bavarian Beer) and Michelob families, and Natural Light and Ice. The company also produced a number of smaller-volume and specialty beers, nonalcoholic brews, malt liquors (King Cobra and the Hurricane family), and flavored malt beverages (e.g. the Bacardi Silver family and Tequiza). Anheuser-Busch was also one of the largest theme park operators in the
United States with ten parks throughout the United States. In October 2009,
Anheuser-Busch InBev announced the sale of its Busch Entertainment theme
Park division to The Blackstone Group for $2.7 billion. The company had been
Investigating a sale of Busch Entertainment since the merger with Inbev.
InBev was the second largest brewery company in the world. While its core business is beer, the company also had a strong presence in the soft drink market in Latin America. It employed about 86,000 people and was headquartered in Leuven, Belgium, where Anheuser-Busch InBev will now be based.
Before the merger with AmBev, Interbrew was the third largest brewing company in the world by volume, Anheuser-Busch was the largest, followed by SABMiller in second place. Heineken International was in fourth place and AmBev was the world's fifth largest brewer.
InBev employed close to 89 000 people, running operations in over 30 countries across the Americas, Europe and Asia Pacific. In 2007, InBev realized 14.4 billion euro of revenue.
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2.3 Present status of the organization In 2008 we grew EBITDA* 4.6% in what was a tough year for us and for the
Industry as a whole, with overall volumes failing to meet forecasts in many
Markets and rising commodity costs and inflation for much of the year.
Our EBITDA margin decreased 15 bps, closing the year at 33.1%.
Consolidated volumes were flat with our own beer volumes decreasing 0.3%
And soft drinks volume growing 4.9%.
Our top line grew 5.2% compared to the previous year driven to a great extent
By price and revenue management initiatives combined with high quality
Marketing and sales execution in the marketplace.
Our decision to focus on and invest in a smaller number of higher value, or
Focus brands has produced encouraging results this year with these brands
Delivering volume growth of 2.6%.
In November 2008 we closed the combination with Anheuser-Busch, creating
Anheuser-Busch InBev, a world-class consumer goods company with a pro-
Forma EBITDA of approximately 8.2 billion euro in 2008. The combined
Business has four of the top ten selling beers in the world, and a number one
Or number two positions in over 20 markets.
Since closing the transaction on 18 November 2008 the integration process
Has progressed quickly delivering 250 million USD of synergies in 2008. We
Now feel confident enough to increase our synergy projection from the original
1.5 billion USD to 2.25 billion USD, with approximately 1 billion USD of which
Can be captured in 2009 and the balance in the following two years. Our
Teams are highly motivated and in full delivery mode.
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Anheuser-Busch InBev is a publicly traded company based in Leuven, Belgium. It is the leading global brewer and one of the world’s top five Consumer products companies. A true consumer-centric, sales driven Company, Anheuser-Busch InBev manages a portfolio of nearly 300 brands That includes global flagship brands Budweiser, Stella Artoisand Beck’s, fast Growing multi-country brands like Leffe and Hoegaarden, and strong ‘local Jewels’ such as Bud Light, Skol, Brahma, Quilmes, Michelob, Harbin, Sedrin, Cass, Klinskoye, Sibirskaya, Korona, Chernigivske, and Jupiler, among Others. In addition, the company owns a 50 percent share in Grupo Modelo, Mexico’s leading brewer and owner of the global Corona brand. Anheuser- Busch InBev’s dedication to heritage and quality is rooted in brewing traditions That originate from the Den Hoorn brewery in Leuven, Belgium, dating back to 1366 and the pioneering spirit of the Anheuser & Co brewery, Established in 1860 in St. Louis, USA. Geographically diversified with a Balanced exposure to developed and developing markets, Anheuser-Busch InBev leverages the collective strengths of its 120 000 Employees based in operations in over 30 countries across the world. The Company strives to be the Best Beer Company in a Better World. On Pro-forma basis for 2008, the combined company would have Generated revenue of 26.5 billion euro. The following management report should be read in conjunction with Anheuser-Busch InBev’s audited consolidated financial statements. A number of acquisitions, divestitures and joint ventures influenced Anheuser- Busch InBev’s profit and financial profile over the past two years.
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On 18 November 2008, InBev announced the completion of its acquisition of Anheuser-Busch, following approval from shareholders of both Companies. Anheuser-Busch’s results are included in Anheuser-Busch InBev’s result as from this date. The combination creates the global Leader in beer and one of the worlds top five consumer products companies. InBev changed its name to Anheuser-Busch InBev to reflect the Heritage and traditions of Anheuser-Busch. Starting 20 November 2008, the Company trades under the new ticker symbol ABI on the Euro next Brussels stock exchange. Anheuser-Busch became a wholly owned Subsidiary of Anheuser-Busch InBev and retained its headquarters in St. Louis, MO. St. Louis also became the North American headquarters for The combined company. Further details on the acquisition of Anheuser-Busch and on the acquisitions And disposals of other subsidiaries and on the purchase of minority Interests are disclosed respectively in note 6 Acquisitions and disposals of Subsidiaries and in note 14 Goodwill. In the rest of this document we refer to Anheuser-Busch InBev as ‘AB InBev’
Or ‘the company’.
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2.4 Functional Departments of the Organization STORE DEPARTMENT:
Functions:
1. Purchase of all items indented by user functions like spares
Consumables etc., other than plant and equipment.
2. Registration of suppliers and evaluation.
3. Maintenance of Stores.
4. Inventory control of stock items.
5. Co-ordination with finance department for timely payment to the
Suppliers.
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FINANCE DEPARTMENT
Functions:
• To comply with legal and other requirement.
• To provide information for stakeholders about financial
performance and viability
• To provide managers with information for decision-making
• To provide a structure to business activity based on the careful
processing of numerical data.
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MARKETING
DEPARTMENT
Functions:
The smooth functioning of the marketing, sales and delivery operation
Corrective actions on customer complaints
New initiatives taken for sales maximization of the company
Handling relationship with personal, communicating and reporting to the
management.
Developing sales programs and formulating and designing sales polices.
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PRODUCTION DEPARTMENT
Functions:
Production and planning
Purchasing
Stores
Design and technical supports
Works
Production cycle:
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MARKETING AND DISTRIBUTION:
Here, innovative, creative and aggressive marketing is complemented by a
strong distribution network. A management focused on building brand equity
on one hand and exploiting it to the hilt on the other. A concerted emphasis
on quality.
The company markets its products through qualified and trained field force. The
field force consists of sales representatives who are supervised by Sales Deputy
General Manager (DGM) MARKETING. DGM Marketing are qualified professionals
who guide the field force to promote, meet business targets and follow up for
collection.
HR Practices:
The company follows a competency-based approach. Career advancement is
planned using psychometric tests, gap analysis and the same is used for
leadership change and succession planning. The company also follows a KPI
based performance management system that leads to alignment of company’s
objectives and the individual objectives. There is also a monthly feedback system
that helps in job enrichment. The company also follows
standard safety and environment friendly policies.
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Following functional modules has been adapted in the organization: a. Accounting. b. Sales & Distribution. c. Materials Management. d. Human Resource Management. e. Production Planning. f. Quality Control. g. Plant Maintenance. h. Marketing Department
i. Finance Department
j. Production Department
k. Engineering Department
l. R & D Department
m. Brew House
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2.5 ORGANIZATION CHART OF ABINBEV
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2.6 Products and service profile of the organizations competitors
Brand Strategy
At Anheuser-Busch InBev, our brands are the foundation of the company, the
Cornerstone of our relationships with consumers, and the key to our long-term
Success.
Focus Brands
We know focus works. This is why we have rigorously reinforced our focus
Brands strategy. Focus brands are those in which we invest most of our
Marketing money, and to which we dedicate the greatest proportion of our
Share of mind. Out of nearly 300 brands, we are prioritizing a small group with
Greater growth potential within each relevant consumer segment. These
Focus brands, include our three global brands, key multi-country brands, and
‘Local jewels’.
Values Based Brands
All of our brands must have clearly defined and consistently communicated
Values, making them ‘Values Based Brands’. The process of defining these
Values is a key discipline for all marketing activities in our business and is
Proving particularly powerful in renovating and innovating our premium brands
Around the real and changing habits and preferences of consumers.
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STELLA ARTOIS
STELLA ARTOIS was first brewed as a Christmas beer in Leuven. It was
named “stella”, Latin for “star”, from the star of Christmas, and artois.
It is brewed to perfection using the original Stella Artois yeast and only the
best ingredients including the celebrated Saaz hops. It's the optimum
premium lager, with its full flavor and clean, crisp taste.
Stella Artois is still brewed using natural ingredients in the same
Processes of mixing and fermentation used in the old days. This
Guarantees that the beer is something we've been proud of and will
Always be proud of.
No matter where in the world, consumers can count on a great experience
When they drink Stella Artois. A brand of supreme worth and quality, it is
The number 1 Belgian beer in the world and is distributed in over 80
Countries worldwide.
The beautiful chalice is the perfect glass, particularly when combined with
The Stella Artois pouring ritual that allows the beer to flow, breathe and
Develop a pristine head. Not only does the beer taste great, it also looks
Wonderful.
Originating in 1997, the Stella Artois World Draught master Championship
Assembles the best bartenders from around the world to rate their
Tapping, bottle-pouring skills, and table-serving protocol.
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BECKS
Beck’s is renowned for its uncompromising quality.
True to its original recipe, it has been brewed in the same way using four key
Natural ingredients for more than 125 years.
The hops used to brew Beck's today, still come from the Hallertau region
In Germany, and every bottle of Beck's is brewed according to the
Uncompromising German Reinheitsgebot (Purity law). With a strong and
Committed heritage, Beck's has had only 6 brew masters throughout a
125-year history.
Just as the brand has remained true to its heritage, The Beck's spirit
Inspires consumers to stay true to themselves, to make their own choices,
And to embrace the freedom to live life according to their own ambitions.
Today, Beck's is Germany's number one export beer, present in more than
100 countries worldwide. In 2008, Beck’s was revitalized with powerful new
Global packaging to add to its successful brand innovations such as Beck's
Ice in Germany and Beck’s Green Lemon. The innovations support the
Vibrancy of the brand, while retaining the superior quality standards for which
Beck's is renowned.
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BUDWEISER
The “Great American lager “. Each batch of Budweiser follows the same
Family recipe used by five generations of Busch family brew masters.
Budweiser was introduced in 1876 when Adolphus Busch set out to create
The United States’ first truly national beer brand - brewed to be universally
Popular and transcend regional tastes. Each batch of Budweiser stays
True to the original family recipe used by five generations of Busch family
Brew masters. Budweiser, the ‘Great American Lager’ is a medium-
Bodied, flavorful, crisp and pure beer with blended layers of premium
American and European hop aromas, brewed for the perfect balance of
Flavor and refreshment.
Budweiser is brewed with time-honored methods including “kraeusening”
For natural carbonation and Beachwood aging, which results in
Unparalleled balance and character.
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TENNENTS
Wellpark Breweryis a brewery at Duke Street in the East End of Glasgow, Scotland. It was founded in 1740 on the bank of the molendiar. Burn by Hugh and Robert Tennent.It is currently owned by C&C Group plc, that purchased it in late August 2009from Tennent Caledonian Breweries, which is a wholly owned subsidiary of Belgian brewing company Anheuser-Busch InBev (formerly known as InBev). The company is most noted for the production of Tennent's Lager, Scotland's
Market leading brand of pale lager since it was first produced at the Wellpark
Brewery in 1885.
Tennent's Lager is Scotland's best-selling pale lager, with approximately 60%
Of the Scottish lager market.The lager was first brewed in 1885 by Hugh Tennent, the first brewer in the UK to do so, and in 1893 it won the highest
Award at the Chicago World's Fair. It is described as a distinctive, well-
Balanced lager whose sweet, malty flavors combine with a tangy hoppiness to
Create its crisp, refreshing character. Other Tennent Caledonian brands
Include; Tennent's Stout, a 6% ABV strong stout, Tennent's 1885, a stronger
Export lager, and Tennent's Super, which is a 9% ABV strong lager
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LEFFE
Leffe is a Belgian brand of Abbey beer. Leffe beers are marketed as premium
Ales. They are now brewed in large quantities and are widely available.
The abbey Notre Dame de Leffe was founded in 1152 on the Meuse River in the province of Namur in southern Belgium. Like many monasteries across Europe, the Premonstratensian (Norbertine) canons of the abbey brewed ale. Using knowledge passed from generation to generation and ingredients found in the wild near the abbey, the canons developed unique ale, brewed only at the abbey.
COMPETITORS
Today’s world is the competition. In every filed there is competition and the
success of any company or product largely depends upon competition.
Competition provides a good quality of product to the customer. If a company has
to survive in the market, then it has to face throughout competition. In liquor
industry too the competition is there. The increasing awareness and exposure to
beer among consumers and the removal of quantitative restrictions gives big boost
to the beer industry. It saw the emergence of new companies like future wine and
spirit brand (P) Ltd (FWSB), set up recently by two Non-Resident Indians (NRI’s)
from USA. ‘BEER’ consumption in the country increased 7-9 % per year.
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1 SAB miller
• Haywards 5000
• Haywards 2000
• Haywards Black
• Royal Challenge
• Knock out
• Castle lager • Foster
• Indus Pride
2 UB group
• Kingfisher
• Kingfisher (Premium)
• San Mighen
• London Lilsnex
• UB Export
• Kingfisher (Strong)
• Kingfisher Ultra
3 COBRA
• Kind cobra
• Cobra bite
• Cobra 5% premium
• Cobra light
• Cobra 0%
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4 CARLSBERG
• CARLSBERG PILSNER • TUBORG CLASSIC
5 Mount Shivalik
• Thunderbolt
• Strohs
• Bar Finder
- 38 –
1. SABMiller India
SABMiller India is a wholly owned subsidiary of SABMiller plc, the second largest
beer Company in the world over a hundred years of heritage.
SABMiller India sojourn began in 2000 and in just a few years, its has cornered
nearly on third of the India beer market with brands such as Haywards 5000.
Haywards 2000, Haywards Black, Knock Out, Royal Challenge. Castle Lager and
Fosters.
Based on consumer insights, SABMiller India has taken innovative measures to fill
up the packaging, pricing, occasion and product gaps. Expertise on a global level
has come in use to create many firsts in India including the use of one-way bottles,
flash pasteurization, establishing draught standard, and now Haywards Black-a
genuine stout beer.
With ten world-class breweries strategically located across India. SABMiller is well
positioned to easily access and efficiently service the beer markets. The
Company’s to India and ethos of quality is reflected in the fact that it invested over
Rs. 125 crore in the last two years to upgrade breweries in line with global
standards.
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SABMiller is a market facing and brand led organization that continuously
refreshes itself in pursuit of its mission of owning and nurturing local and
international beer brands which are the first choice of the consumer.
The company invests in bottles, which are returnable in nature are accounted for
as fixed assets in its books. The company pays to its customers/agents for
returning the empty bottles at the prevailing market prices. The company urges its
customer/agents to return the empty bottles to the company for which the company
will reimburse them at prevailing market prices.
2. UNITED BREWERIES LTD.
The UB group commenced its brewing operations as early as the 19th century
(1857) with fire small breweries in South India. In 1951, a Scotsman named
Thomas Leishman combined the five breweries to form United Breweries . The
company was taken over by Vijay Malaya in 1947. In 1952 the company shifted its
registered office Madras to Bangalore. In 1958 the name of the company was
changed from United Breweries Ltd. To UB Ltd. In 1989 as a measure of
diversification the company stated manufacturer of bulk drug, the pharmaceuticals
on a priority basis.
In 1992, 11 different breweries were and amalgamated with the parent company. In
1994 the company launched its ‘Kalyani Premier Strong’ and started exporting
‘Kalyani Export Special’ to U.K The Company presently has 21 breweries under its
direct or indirect control. Recently the company has started implementing
restructuring excise unless which it has dedicated to split its business into two-the
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core beer business and the group investment business. The company has
dedicated to focus on core business and to hive off non-core business.
United Breweries launched the countries premium ice beer to be introduced in
Mumbai and selected cities of Maharashtra.
The United Breweries Ltd. And its subsidiary Millennium Alcoveb Ltd. Have entered
into a contract agreement with Mohan Meakins to brew beer at the later’s facilities
in Maharashtra, Uttar Pradesh, Andhra Pradesh and Daman.
Mr. Ravi Jians millennium alcoveb Ltd A subsidiary of united breweries is in
negotiations with an international beer company for an equity joint venture to
making a Super Premium Beer in India.
UB Ltd. Has carried out a reorganization of its business by hiring off fours
subsidiaries and making seven companies its fully owned aims apart from
acquiring the sorghums business in South Africa breweries ltd.
Relawant of San Michel and London Lilsnex, the new beer brands in it portfolio
United Breweries (Holiday), a wholly owned subsidiary of united Breweries has
entered into an agreement to acquire up to 75% of the paid of equity capital of
Mangalore Breweries and Distilleries Ltd.
UB group has signed reseller and license agreement to market steel first faster
steaming media solutions Asia.
UB Ltd. The largest beer manufacturer and marketing company, has launched two
more premium brands-London pilsner Premium beer and London No. 1 Strong
beer in Hyderabad
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3. CARLSBERG
At the end of 2006, Carlsberg entered into a joint venture - called Carlsberg
India Private Limited - to build a green field brewery in the state of Rajasthan,
India.
There is significant potential for growth in the Indian beer market. The annual
beer consumption per person is among the lowest in Asia, at only 0.7 liters
per year, and the annual GDP growth rate is more than 9%. The total beer
market in India is currently 8 million hl, however it is among the top three
Asian markets in terms of expected growth rates.
4. Mount Shivalik
1972-1978 mount shivalik breweries ltd. (MSBL)was formally incorporated,
headed by Mr.B.D. Bali as the managing director.
1987-1993 In the year 1987, pub culture in north India invoked, by opening of pubs
in Chandigarh by the company. Group’s flagship brand “THUNDERBOLT Super
Strong” won the prestigious “monde selection gold medal ” at Barcelona (1991) for
its international quality.
THUNDERBOLT Super strong beer reached a landmark in the country by
achieving sales of 1.5 million doz. The brand become benchmark for other super
strong beer in the country by setting higher standards of quality and excellent
packaging throughout the country.
1996-1998 Two new brands were launched mild and strong segments by the name
of: -GOLDEN PEACOCK
TORPEDO SUPER STORNG.
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2.7 MARKET PROFILE OF THE ORGANIZATION Anheuser-Busch InBev is the leading global brewer and one of the world’s top
five consumer products companies. For 2008, the combined company would
have generated revenues of 39 billion USD. With a dream to become The
Best Beer Company in a Better World, the company has a strong, balanced
portfolio. With four of the top ten selling beers in the world, Anheuser-Busch
InBev holds the number one or number two positions in over 20 key markets.
It has a key presence in both developed and developing markets.
Headquartered in Leuven, Belgium, Anheuser-Busch InBev leverages the
collective strength of approximately 120 000 people in 25 countries worldwide.
The company works through six operational Zones; North America, Latin
America North, Latin America South, Western Europe, Central & Eastern
Europe, and Asia Pacific, allowing our consumers around the world to enjoy
our beers.
With operations and license agreements around the globe, Anheuser-Busch
InBev is a truly global brewer.
- 43 –
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CHAPTER 3
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DISCUSSIONS ON TRAINING
3.1 Student’s Work Profile (roles and responsibilities)
1. Maintain the stores indent and GRN register on computer.
2. Help to the financial manager in internal auditing.
3. Make the purchase order.
4. Make the purchase order register for purchase department.
5. Check the labeling and packaging of beer.
6. Help to purchase executive and go to market and meet to vendors.
7.Visit the different location and know the status of brand in the market.
8. Visit our outlets and collect the sales data.
9. Make a sales report on excel sheet.
10. Survey to find out the reason of less sales of products.
11. Marketing of the products in the market.
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3.2 Description of Live Experiences
I had a good experience in the company, the culture and communication in
The organization was very fair. The manager in the company had a nice
Interaction with the employees and they give a feedback, which can leads
Employees to improve and perform their fullest potentials.
I was involved with various departments. I know about the functions of each
Department. I get a good exposure there. There were no restrictionsto enter in
The department.I learn many activities there that I cannot learn anywhere.
Our GM sir is very good. He has friendly nature; he gave me a full freedom to
Learn the works in various departments.
I have a good interactions and relationships with our managers. I know about
Beer making and packing of beer. Some times I was involved with marketing
Team so I learned that how we can advertise the beer.
Overall my experience in the company was very good. I get a good exposure
There. It was pleasure for me to work in a largest beer company.
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CHAPTER 4
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4.1 Statements of research problems
Sales Promotion in ABInBev
Definition:
It covers marketing activities other then advertising, publicity and personal selling
that stimulate consumer purchasing and dealer effectiveness. Such activities are
displays, shows, exhibitions, demonstrations and many other non-routine selling
efforts like spot selling. Sales promotion tries to complement the other means of
promotion given above.
Allkindsofpromotionplaytheroleofcommunicationchannelsbetween
themarketerandtheconsumer.Promotionasonelementofmarketingmixhasthree
broadobjectives:
(a)Information,(b)persuasion,(c)reminding.
The overall objective of promotion is, of course, influencing the
buyer behavior and his predispositions (needs, attitudes, goals, beliefs, values
and preferences).
According to the American Marketing Association, the sales
promotion can be defined as “Those marketing activities other then personnel
selling advertising and publicity, that stimulate consumer purchasing and dealer
effectiveness, such as displays, show and exhibition, demonstration and
various non-current efforts not in the ordinary routine”.
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The Marketing MIX: Ingredients for Success The marketing mix, earlier known as the 4 P’s,(but now has a few more),is a vital
part of any marketing strategy. This is a tool whereby the marketer takes decisions
on what and how a product should be, where it can be sold, how it should be
priced, how it will be promoted, how to equip the people who are responsible for
selling the product…and so on. Getting the marketing mix right is equally important
for the large corporation and the small business owner. One of the most critical
marketing management decisions is that decision of setting the marketing mix
values, and select in and employing strategy that periodically change that
marketing mixes in response to changing business environment.
Product
1. No.1 globally brand but not performing well in Indian market.
2. Good quality raw material is used to maintain the quality standards.
3. Consistency of product quality is very low. Initially Products perform very well after some time drastically it’s decreased.
4. Always tastes fresh due to good quality and very poor distribution network.
Place-
1. It is available in some states Karnataka, AP, Maharashtra, Goa, and New Delhi and in other states.
2. Company location plant Karnataka, AP, Haryana, Maharashtra.
3. Availability of products is very low in market.
4. Target only some area.
5. Poor distribution channel or network.
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Distribution Network
Price-
In both mild and strong beer Segments Company uses competitive price strategy
Tennents
650ml .RS 80.
330ml Rs 40
500ml (Can) Rs 35
Budweiser
650ml Rs 80
330ml Rs 45
Becks
650ml Rs 110
330ml Rs 60
Distributors
On / Off Premise
Locations
End Consumer
ABInBev
Breweries
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.
Price of the product is reasonable but retailer charges the extra money to the customer.
Some retailer is charging extra 5 to 8 Rs per bottle.
Promotion
Promotion includes advertising and other forms of sales presentations,
designed to encourage fast consumer or trade up-take of a product or service. The
form of any promotion depends on the product, the marketing plan and its
objectives, and on the imagination of the product management team. It can vary
from a simple in-store demonstration, or sampling, or a tie-in with on premises. A
range of promotional tools, techniques and activities are mixed and matched to
meet the needs of individual marketing campaigns.
Major Tools in Marketing Beer
Publications: Companies really extensively on published materials to reach and
influence target markets, including annual reports, brochures, articles, but they are
not using the source properly.
Events: Companies can draw attention to new products or other company
activities by arranging special events like news conferences, on-line chats,
contests and competitions, and sport and cultural sponsorships that will reach the
target publics. Company is not organizing any events and there is no proper
planning of launching new products in markets.
News: One of the major tasks of PR professionals is to find or create favorable
news about the company, its products, and its people. The next step is getting the
media to accept press releases and attend press conferences. Company launched
new products in markets, first they are exporting the products and price was very
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high. Now they are producing in Bangalore and price of the products is low but
there is no news about the products and prices .
Marketing Activities at AB InBev
• Brand Advertising
• Promotional Activities in on & off trade
• Experiential marketing
• Consumer planning
• Relationship marketing
• Consumer PR
• Packaging
• Packaging, as defined by Kotler and Keller, refers to ‘all the activities of
designing and producing the container for a product.’ Though the primary
purpose of packaging is to serve against damage during the movement of
the product, it is no longer the only purpose that it serves. Packaging, and
not the product, is the first touch-point that the customer comes into contact
with. A substandard product within a unique packaging might be easier to
sell as against a superior product packaged in a substandard pack. Superior
packaging would not ensure repeat sales though. Packaging is an effective
tool to make the product distinguishable in the clutter.
• Packaging, the fifth and final stage of the brewing process, prepares the
beer for distribution and consumption. During packaging, beer is put into the
vessel from which it will be served: a keg, cask, can or bottle. Beer is
carbonated in its package, either by forcing carbon dioxide into the beer or
by "natural carbonation".
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• Most products have multiple levels of packaging. For example, the Tennents
Beer is packed in a glass bottle (primary package). These individual bottles
are then packed in cartoon case (secondary package). Each of these
packages serves a different purpose. Tennents beer is also available in tin
can.
Beer Advertising
Advertising of beer is a topic that has frequently attracted the attention of industrial
organization economists. For beer advertising several interrelated issues should be
analyzed, including:
1. The importance of advertising and product differentiation for structural
change in the brewing industry
2. The manner and extent to which brewers can strategically alter market
shares using advertising
3. The social costs of alcohol advertising and marketing.
Analyses of both issues include attempts to determine the net welfare
effects of beer advertising. On the third issue, economists have analyzed
advertising’s possible influence on alcohol consumption and underage drinking,
and as a contributor to social costs such as drunken driving fatalities. Several
regulatory concerns are related to this issue, including use of advertising bans;
advertising placements that might target underage youth; legal rights of states
under the three-tier system of alcohol distribution; and other advertising or
marketing restrictions that affect competition in the industry (e.g., price advertising
bans, price-posting and price affirmation laws)
- 54 –
SWOT Analysis of AB InBev
Strength . Globally leader no. 1
. More than 240 brands
• Premium Quality Product
• Experience Management team
• Available in key markets
Weakness
• Low Advertising & Promotion Spends
• Less Manpower
• Products not available in markets
• Low Market Share
• Inefficient Distributors
• Less Market Visibility
• Not a aggressive marketing
•
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Opportunities
• Regional Expansions
• Production Volumes
• Higher Profits
• Increased Market share
Threats
• Competitors High Spends
• International Players
• Government Laws
• Taxes & Tariffs
• UB & Heineken deals
Whereas advertising gives a reason to buy, Sales Promotion gives an incentive to buy. It is part of the Marketing spend of all companies and these days SP spends in
many companies exceed that of the ad spend
- 56 –
Why?
• Internal
• External
Internal reasons • Top management is more conducive to spending on promotions
• Line managers under greater pressure to achieve targets
• Justification of expenditure is easy
External reasons
• Increase in number of brands
• Consumer is more price savvy
• Greater pressure from trade to liquidate stocks
Add effectiveness declining owing to rising costs, media clutter and legal constraints
Sales Promotion is a push strategy
• Since it is at the last point where the consumer is often at the point of buying, the additional incentive makes a last ditch effort to convert the customer on to the incentives brand
SP is of two types
• Trade
• Consumer
Trade promotion
• Liquidating heavy inventories
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• Persuade retailers to carry stock, carry more than usual stock, promote brand franchise
Consumer promotion
• Stimulate purchase
• Induce trial
• Create new users
• Increase repurchase from occasional customers
• Reward loyal customers
Forms of trade promotion
• Bulk discounts
• Free materials
• Display windows
• Shelf hiring
• Lucky draws
• ‘Mystery’ customer
• Redistribution incentives
Forms of consumer promotion
• Free samples
• Free gifts
• Coupons
• In-packs
• Price packs
• Price-offs
• Sweepstakes
• Bundling offers
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Sales Promotion
Product sampling, demonstration
Coupons, refunds
Rebates, cents-off-
Contests, games & sweepstakes
Premiums
Multiple purchase offers,
Frequent-user incentives
P-O-P material
Product placements/tie-ins
52
Classifying Types of Sales Promotion
Promotional Non-price sampling
Pricing Promotions
• Price reductions. Contents. Imported the
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•
• Free goods. Freegift. Food products
• Tied offers. Self-supporting. very expensive
• Money off next purchase
Market Segmentation I
Sales of standard lager form the most lucrative sector of the Indian beer
market, with an 87% share of the market's value. In addition, sales of premium
lager generate a further 6.2% of the market's revenues.
Category % Share
Standard lager 87.00%
Premium lager 6.20%
Ales, stouts & bitters 3.20%
Low/no alcohol 2.90%
Specialty beer 0.70%
Total 100.0%
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Market Segmentation II
India accounts for 1.3% of the Asia-Pacific market by value. In comparison,
Japan generates 45.5% of the market's revenues
Geography % Share
Japan 45.50%
China 36.40%
South Korea 9.50%
Rest of Asia-Pacific 7.30%
India 1.30%
Total 100.0%
Advertising:
“Any paid form of non-personal personal presentation and
Promotion of ideas, goods or services by an identified sponsor.”
It is paid communication because the advertising appears.
Advertising appears in magazines, radio, TV, film and transit (car
Cards).
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According to Russel and Veril “Advertising is a message
Paid for by an identified sponsor and delivered through some medium
Of mass communication”.
In India there is restriction on the alcoholic advertisement. Companies
Are not giving any advertisement on print & Electronic media.
Classifications of Advertising:
They can be classified as:
(1) Audiences, (2) Types of Advertisers and (3) Media
Marketing Activities:
Sales:
a) Making personal calls to concerned agents.
b) Generating orders for products.
c) Reporting on product movements or problems.
d) Obtained special displays, features etc.
e) Gaining new accounts.
f) Checking of pricing, material and product availability in stores.
Publicity:
Publicity can be defined as the activity of “Securing editorial
Space, as divorced from paid space, in all media which are read or heard by
The company’s customers or prospects, for the specific purpose of assisting
In the meeting of sales goals.
In other words, publicity refers to an appeal made to a mass of
People publicity in making goods, “Publicity known”. It constitutes a mass
Approach.
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Publicity can also defined as the first communication
About the product and its detailed history through the media, radio and so on
Before the actual manufacture and launching of the product to get the
Response of the users or consumers.
.
Marketing Activities of Public Relation:
a) Generation news, features about the business, its people and its products.
b) Handing press inquiries and interviews.
c) Preparing statement and releases.
d) Helping counter in-favorable publicity.
e) Preparing and distributing communications to special interested groups such as stockholders suppliers.
f) Handling product and regularly public
Personal selling:
Personal selling is a broader concepts and invoices oral presentation in
conversation with one or more prospective buyers for making sales. The main
purpose of personal selling is to bring the product and the company in the
knowledge of the prospective buyers and to convince them about the quantity of
product of products and make certain that ownership transfer will take place.
According to Richard Bushik, personal selling consists of contacting
Prospective buyers personally.
According to American marketing association, personal
selling is an oral presentation in conversation with one or more prospective
purchasers for the purpose of making sales. Personal selling is the most important
ingredient in the promoting mix. It renders valuable services to consumers,
producers and the society. It is an effective of sales promotion. Unlike advertising
personal selling is present in all the three phases of buying.
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Personal selling in an effective media of selling. It is the largest single cost
accounting say for 20% of net sales in several business enterprises. Besides this,
there are many other advantages of personal selling also.
Distribution Channels:
Distributional channels those systems of economic institutions through which a
producer of goods delivers them into the hands of their users. As society shifted
from producing things in the home to buying goods manufactured in centralized
locations, there arose a need for some means to distribute the products from the
central points of production to the dispersed populace. Channels of distribution
furnish this bridge between the producer and the consumer.
Tremendous amount of time and money would be expended in just acquiring the
minimum amount of goods one would need for survival. Marketing channels
funnels the goods demanded by the consumer to the place where he wishes to
purchase them, and create three basic utilities, viz.
1. Place
2. Ownership, and
3. Time
Marketing institutions must move the goods from point of production to the
Point of purchase i.e. consumption. This creates place utility, because goods
Will have no value to the buyer If they are still in hands of manufacturer
Marketing channels arrange for the transfer of title of the goods from the
Manufacturer to the buyer. This creates ownership utility.
Marketing channels must have arranged goods available to the user when
He wants them, this creates time utility. In great part of US bathing suits
Gave little value to the consumer in the month of January, in fact, the
Manufacturer of swimming apparel must make them during the winter
- 64 –
Because a substantial amount of lead time is necessary to ensure that
Ample merchandise is on hand at that time is demanded. Channels of
Distribution frequently absorb much of this difference in time between
Production and consumption. This statement does not imply that all
Marketing activities do not have a bearing on the creation of these utilities.
Although advertising may stimulate ownership utility by making a person
Want something; the actual ownership utility is created on the transfer of
Title from the retailer to the individual the title does not always automatically
follow the actual trail of merchandise.
Channel Originated Behavior:
It should not be assumed that marketing channels are passive
institutions moving only at the order of manufactures. Most aggressive
middleman will institute the economic behavior of their own when they see a
need for it market place. Many retailers and wholesalers have originated their
own brands with which they compete in the market place side by side.
Often in conflict with the promotional programmes of the manufacturers with whom
middleman deal they originate promotions of their own. A food manufacturer have
a certain promotion under way which requires a man floor display in super market,
but the super market owner may have promotional plan of this own that do not
provide for such display. In fact middlemen have learned through their bitter
experiences of business that the interests of the manufacturer are not always
identical with theirs. Often middlemen modify a manufacturer product in an attempt
to make it more appealing to the consumer. Ready-to-wear stores will frequently
change the labels and alter some of accessories of the apparel they sell.
Intact, middlemen are influential in determining the actual
location at which the merchandise will be delivered to the customers. Although
manufacturers have some degree of control over location through their
- 65 –
selection of outlets but in fact, it is the dealer who will make the final decision
concerning where the merchandise should be sold to customer.
Channel Arrangement:
Four major alternative channel arrangement have been
Described below which differ significantly in their capability for creating
Sales, in their costs of operation and their susceptibility to control. Once
They are choose, the firm must adhere to them for a substantial period of
Time.
1. The first channel consist of direct sales of goods by producer to ultimate.
2. The seconds marketing channel shows one selling intermediates between the producer and the ultimate consumer. If the middlemen is retailer, his function is to purchase the producer’s goods and resale them at a profit.
They deal with many producers. P-R-C
3. The third marketing channel shows two different selling intermediaries. The most common example consists of wholesaler and retailer. This is known as the linkage. P-W-R-C
The last channel consists of three selling intermediaries where a jobber
Usually intervenes between the wholesalers and the retailers. The linkage is
P-W-J-R-C. The jobber buys from wholesalers and sells to small retailers,
Who generally are not serviced by the large wholesalers.
P = PRODUCER, W=WHOLESALER, J=JOBBER, R=RETAILER,
C=CUSTOMER
Sales promotion is a tool used to achieve most of the five major promotional
Objectives discussed in the Promotion Decisions tutorial:
- 66 –
Building Product Awareness –
Several sales promotion techniques are highly
Effective in exposing customers to products for the first time and can serve as
Key promotional components in the early stages of new product introduction.
Additionally, as part of the effort to build product awareness, several sales
Promotion techniques possess the added advantage of capturing customer
Information at the time of exposure to the promotion.
In this way sales promotion can act as an effective customer information
Gathering tool (i.e., sales lead generation), which can then be used as part of
Follow-up marketing effort Creating Interest – Marketers find that sales
Promotions are very effective in creating interest in a product. In fact, creating
Interest is often considered the most important use of sales promotion. In the
Retail industry appealing sales promotions can significantly increase
Customer traffic to retail outlets. Internet marketers can use similar
Approaches to bolster the number of website visitors. Another important way
To create interest is to move customers to experience a product. Several
Sales promotion techniques offer the opportunity for customers to try products
For free or at low cost.
Providing Information – Generally sales promotion techniques are designed to
move customers to some action and are rarely simply informational in nature.
However, some sales promotions do offer customers access to product
information. For instance, a promotion may allow customers to try a fee-based
online service for free for several days. This free access may include receiving
product information via email.
Stimulating Demand – Next to building initial product awareness, the most
important use of sales promotion is to build demand by convincing customers to
make a purchase. Special promotions, especially those that lower the cost of
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ownership to the customer (e.g., price reduction), can be employed to stimulate
sales.
Reinforcing the Brand – Once customers have made a purchase sales promotion
can be used to both encourage additional purchasing and also as a reward for
purchase loyalty (see loyalty programs below).
Promotional Strategy
1. Deciding Promotional Mix
Personal selling, advertisement and sales promotion are some of the promotional
methods. During most of the situations two or more promotional methods are to be
used for each campaign. Generally with the help of a single method it is not
possible to succeed. Advertising needs the support of personal selling or display to
increase the sales. Sometimes even the personal selling alone cannot be
successful without the support of advertisement.
An ideal promotion mix is that situation where the total expenditure incurred
For various promotion methods is minimum and sales by such mix is
Maximum. Promotion mix means finding out the proper ratio of usage of
Different methods of promotion. The management must find out, how much
Amount should be spent on each promotional activity. Promotional mix is
Influenced by
(a) Nature of the product
Nature of the product will be deciding the promotional mix. For consumer goods
advertisement and dealer display will have more effect. Industrial goods with high
technology will need much of personal selling and cosmetics, blades etc, will
require more of advertisement than personal selling and display
(b) Nature of the Customer
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If the communications are mostly to middlemen, then personal selling will be more
effective and very little spending on advertisement will do. If information is to be
passed to consumers and when the number of consumers is large, it is better to
advertise. Especially if customers are scattered, then advertisement alone can be
successful.
(c) Nature of the Market
If market for a product is only local then personal selling alone will be sufficient.
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4.2 Statement of research objectives. Objectives of the Sales Promotion:
There are many ways by which sales can be increased and more orders can
Be obtained. Increasing advertising publicity and market research can do this.
The major objective of sales promotion is: -
‐ To increase the sales.
‐ To make the customer aware of the product.
‐ To persuade non-users to try it once.
‐ To sell the new product.
4.3 Research design and methodology Research Methodology
Research methodology is considered as the nerve of the project. Without a proper
well-organized research plan, it is impossible to complete the project and reach to
any conclusion. The project was based on the survey plan. The main objective of
survey was to collect appropriate data, which work as a base for drawing
conclusion and getting result.
Therefore, research methodology is the way to systematically solve the research
problem. Research methodology not only talks of the methods but also logic
behind the methods used in the context of a research study and it explains why a
particular method has been used in the preference of the other.
Research design:
Research design is important primarily because of the increased complexity in the
market as well as marketing approaches available to the researchers. In fact, it is
the key to the evolution of successful marketing strategies and programmers. It is
an important tool to study buyer’s behavior, consumption pattern, brand loyalty,
and focus market changes. A research design specifies the methods and
procedures for conducting a particular study. According to Kerlinger, “Research
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Design is a plan, conceptual structure, and strategy of investigation conceived as
to obtain answers to research questions and to control variance.
The General study was converged as a specific study for AB InBev. The study was
initiated to find out the consumer profile, brand perception and cross preference
between AB InBev and Competitor brands.
Our approach to the research design tasks went through the following tasks.
Information needed
?
Measurement and scaling Procedures
?
Appropriate Data collection
?
Sampling Process and sample size
?
Data Analysis plan
These issues are addressed as the following
◊ Research Type Descriptive Research
◊ Data TypePrimary and Secondary data
◊ Research Tools Questionnaire
Observation
Enquiry
◊ Sampling Units customer/Dealers/ Retailers
◊ Sample Size Customer (100)/Dealers/ Retailers (50)
◊ Sampling Method Random Sampling Method
◊ Sample drawn from Bangalore
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Type
The data collection was done through
1. Secondary Data Analysis
2. Survey
Secondary data is obtained by contacting the retailer and dealers.
Scaling Techniques
We asked the customers to rank the various attributes on a scale of very important,
Important and not very important. To find-out the brand perception of various
brands, paired comparison between them is used.
Questionnaire Design
Questionnaire design was the critical issue as the questionnaire reflects the
survey purpose .The questionnaire was meticulously prepared by identifying the
various variables. The same scale of yes/no and very important, important and not
so important was used through out so as to make the respondent comfortable.
Firstly a questionnaire was prepared and few people were surveyed. After this
survey we realized the flaws in the questionnaire and then a modified
questionnaire was prepared and people were surveyed on this modified
questionnaire.
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Sampling Techniques
In the survey conducted, the sample was random in nature comprising of people
from different age groups and income stratus.
Data Collection
Data collection is the important step after the sample is selected on which the
survey is being conducted. With data that is available in the hard form we
converted that to electronic form, to analyze the data using the MS Excel
software’s. In the data collection customers were approached during the working
hours at retailer point, at home, at college campus point. . Purpose of the survey
was explained and was asked whether they are interested to take part in the
survey Later Questionnaire was handed over to them, and necessary instructions
were given to complete the questionnaire .The questionnaires were returned back
after filing up on their convince, While receiving the filled in questionnaire care was
taken to check whether there are any unfilled items in the questionnaire.
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4.4 Analysis of data
The data of score of features and score of brand perception was fed into the excel
sheet. Separate Excel sheets were employed for analysis of each brand and also
to keep it concise and unambiguous. For data analysis I use many types of charts:
• Pie chart:
This is very useful diagram to represent data, which are divided into a number of
categories. This diagram consists of a circle of divided into a number of sectors,
which are proportional to the values they represent. The total value is represented
by the full create. The diagram bar chart can make comparison among the various
components or between a part and a whole of data.
• Bar chart:
This is another way of representing data graphically. As the name implies, it
consist of a number of whispered bar, which originate from a common base line
and are equal widths. The lengths of the bards are proportional to the value they
represent.
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Figure-1
1- Once in a Week 2- Ocassionally
3- Every Day 4- 3-4 Times in a Week
Interpretation:
In India climate condition is hot /warmly, so that time consumers drink daily. India
has a large number of youth generations so they are following western culture and
drink beer most of the times.
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Figure-2
1. Strong
2. Mild
3. Both
Interpretation:
In India most of the customer drinks beer in summer season, so they prefer strong
beer. Most of Indian beer market is dominated by strong beer.
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Figure-3
1. Tastes
2. Brand
3. Price
4. Status
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Figure-4
1. Poor
2. Satisfactory
3. Good
4. Equalient
Interpretation:
Brand awareness of the company products is very low in market. Brand name of
company product is difficult. In India there is some restriction on liquor marketing.
Company is newly entered in Indian market.
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Figure-5
1. Brand loyal
2. Switcher
Interpretation:
Most of the customer is loyal towards brands. Our company has also brand loyal
customer. Product is not available in market then they switch to another products.
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Figure-6
1. Not available
2. Available
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Figure-7
1. Satisfy
2. Dissatisfy
Interpretation:
Company is very new in Indian market but they are trying to establish a strong
distribution networks. Due to some financial problem, now they don’t have strong
distribution networks.
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Figure-8
Interpretation:
A Budweiser product has more market share, because it is well known and
establishes products in all over world. Tennents is a regional product of Scott land
and now we are trying to make it globally brands. Other products of company are
imported in Indian market so price is high due to price factor other brands has low
market share.
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Figure-9
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LIMITATION
During the process of a research a person comes across certain restrictions certain
limitations. Some of these limitations are overcome while come have to be
overlooked for the smooth conducting of the research. Some of these restrictions
are:
Liquor is such a product that the wholesaler, retailers and consumer fear to
come out with information.
Due to the wide area of the markets, it was impossible to cover each and
every retail shop, hence only few shops were covered.
The such had to be completed in short of time, which is not enough time to
cover the market. So time was the major constraints in conducting the study.
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4.5 Summary of findings . According to the survey I find that tastes and quality of products is very good.
. The customer of the products belongs to a high-class society. Mostly they are
students or working people.
. Marketing of products is not aggressive.
. Company is not giving any advertisement on electronics & print media.
. Brand awareness is very low.
. Products have a repeated customer.
. Availability of the products in market is very low. Due to this reason customer
are shifting to another products.
. Name of products is tough, so common people cannot drink.
. Company has very poor distribution networks so products are not available in the
markets.
. Due to financial problem they are not paying the rent on the time to retailers.
. Manpower problems in marketing departments.
. They are not able to compete the existing UB & SAB Miller brands.
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Chapter 5
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SUMMARY AND CONCLUSIONS
5.1 Summary of learning experience The following are some of the learning tasks that are experienced in the company as a management trainee. 1. Good grip on the ms excel, due to making reports for stores and Purchase departments. 2. Known the job profiles of different departments in the organization. 3. Experienced how to interact with the executives and managers in the Company. 4. Experienced the problems of balancing of work life and study life. 5. Learn to take responsibility. 6. Learn the functions of stores. 7. Help the finance manager in auditing. 8. Makes the purchase order for purchase departments. 9. Know the procedure of bottle washing. 10. Know the whole procedure of fill up the beer in bottle and can. 11. Get some knowledge about brew house. How we can make the beer. 12. Interact with some vendors. 13. Visit the on and off premises and collect the sales data of various beer. 14. Make the sales report of our brands. 15. Distribute the advertising items to the retailers.
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5.2 Conclusions and Recommendations CONCLUSION During our research we found out that the brands of AB InBev India brewery in the
Beer Segment especially Budweiser and tennents (super strong) beer is
performing well. The demand of Budweiser and tennents (super strong) beer in
the market is good but not easily available every where. Company has not got
good image among the general public.
Tennents beer is the undisputed leader in the strong beer segment but not in India.
Company is trying to start production of some other global brands in India. So they
can reduce the costs. Company is planning to release huge funds for India in Jan
2010. In Bangalore plants they are facing financial problem so they are changing
the management team.
Recommendations
1. Aggressive marketing
Company should use the aggressive marketing which forces the retailers to display
the products in their outlets.
2. Advertisement in print media & electronic media
Use the electronic and print media in an effective manner so as to increase brand
value so as to obtain goodwill to the company.
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3. Surrogate marketing
Company should do the surrogate marketing. Company makes the other products
that have similar name and help of these products advertise of beer brands.
Products like drinking water, soda
4. Sponsorship to cricket
In India a cricket is very popular game. Most of the world watches cricket game. In
India Company should sponsor to cricket events.
5. Distribute free sample of products
Before launching a product in market, Company should distribute free bottle of
beer in market and spread brand awareness.
6. Create websites for Indian breweries
Company should create a website for Indian breweries and give a full information
about the products that are available in market. Products indigents and price is
also show on website.
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7. Road show
Companies organize a road show for upcoming brands in public places. Company
should follow rule and regulation and not target to people those don’t have legal
drinking age.
8. Marketing office in most of places
Company should know the importance of marketing department and have a
marketing office in most of places. Company should increase the manpower in
marketing departments.
9. Discount for retailer and customer
Company should give a attractive discount like (Mobile, Watches, price discount,
refrigerator etc…) to retailer. Company also provides free coupon, snacks, free
small bottle and price discount for the customers.
10. Improve distribution channel
Company should improve the distribution channel and make a good relationship
with retailer and give an extra margin to salesmen because Sales of beer is
depend on sales person. Pay the rent on time to retailer.
12. Increases the number of outlets
Company should increase the number of outlets and tie up with hotels, restaurants,
bars and pubs.
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13. Target to youth customer
India has a large number of youth populations. So target to youth and give the
some reason that drink of beer is good for health.
Top 10 Reasons Beer is Good for your Health
Everyone is looking for a reason to drink beer. Right? It turns out that a
lot of people are. So here are 10 great reasons to drink more beer. Not only
that, but they're all true. Beer really is good for your health, so drink up!
Beer Reduces Stress
Alcohol in general has been shown to reduce stress. This one is obvious,
and may be the best reason beer is good for your health.
Beer is Good for the Heart
A study was conducted from 1982 - 1996 on the elderly. It was found
that those who drank at least 1.5 per day had a 20-50 percent less chance of
having heart failure.
Beer Improves Blood Circulation
Beer increases your "good" cholesterol, or HDL (high-density
lipoprotein) cholesterol. It’s basically a kind of blood fat, so it reduces blood's
tendency to clot.
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Beer is Chock Full o' Fiber
The fiber comes from the cell walls of the malted barley. A liter of beer
can have as much as 60% of your daily-recommended fiber. The extra fiber
will keep you regular and can also lower the risk of heart disease.
Beer as a Multi-vitamin
Beer is a significant source of magnesium, selenium, potassium,
phosphorus, biotin, folate, vitamin B6 and vitamin B12
Beer cans Prevent Strokes
A study published in Stroke magazine in 2001 showed that alcohol
drinkers have fewer strokes. Because it thins the blood, it increases the
circulation in the brain, thereby protecting from silent strokes, which are cause
by tiny blood clots.
Beer keeps your Brain Young
A large study, published in the December 2001 issue of Alcoholism:
Clinical & Experimental Research, was conducted on elderly Italian men and
women. It showed that moderate drinkers had a 40% lower risk of mental
impairment.
Beer is good for your Liver
Alcohol expands the small blood vessels in the liver. This speeds up
metabolism so it can help clean all the toxins out of the liver. This is from
Beer Net Publication, April 2001 Biological Institute.
Beer Cures Insomnia
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Lactoflavin and nicotinic acid, both present in beer, can promote sleep. Also
hops are a natural sedative.
Beer Fends off Gallstones
According to Professor Oliver James at the University of Newcastle, beer protects
against gallstones and kidney stones.
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QUESTIONNAIRE
(APPENDIX)
• My name is RAJNESH KUMAR. I am pursuing my MBA in Ramaiah
institute of management studies Bangalore, as a part of my curriculum I am doing
my project in AB InBev India International pvt. Ltd.These are some of the survey
questionnaires on SALES PROMOTION; please take a few minutes to complete
this study.
QUESTIONNAIRE FOR CONSUMER
Ques.1- Do you drink liquor?
a) Yes b) No
Ques. 2- you take liquor in form of...
a) Beer b) Whisky c) Rum
Ques. 3- your age is………
a) 15-25 yrs. b) 25-35yrs.
c) 35-45yrs. d) 45 & above
Ques. 4- Who introduced you to drink Beer?
a) Friends b) Advertising
Ques. 5- You consume Beer
a) Once a week b) 3-4 times in a week
c) Every day d) occasionally
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Ques. 6- How often do you drink beer?
a) Occasionally b) Regularly
Ques. 7- which types of Beer do you prefers?
a) Mild b) Strong c) Both
Mild………………. Strong…………….
Ques. 8- How much quantity of Beer is consumed by you at one time?
a) 1 Bottle b) 2 Bottles c) > 2 Bottles
Ques. 9- You drink Beer usually at?
a) Home b) Restaurant c) Bar d) Open space
Ques. 10- What are the key factors that affect your purchasing decision?
a) Price b) Brand c) Taste d) Status
Ques. 11- How was it, as compared to other existing brands?
a) Good b) Poor c) Satisfactory d) Equivalent
Ques. 12- you feel after drink………
a) Relaxed b) Happy c) Tensed d) Angry
Ques. 13- Your preference for packaging?
a) Bottle b) Cane
Ques. 14- Are you brand loyal?
a) Loyal b) Switcher
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Ques. 15- Any suggestions for AB InBev beer company?
………………………………………………………………………
………………………………………………………………………
Personal information
Name-…………………………….
Address-...…………………………………………………………..
………………………………………………………………………
………………………………………………………………………
Gender-………………………………
Age-…………………………………..
Occupation-…………………………………………………………
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QUESTIONNAIRE FOR RETAILER
Ques.1- What different types of liquor are sold by you?
a) Beer b) Whisky c) Rum d) Other
Ques.2- Which type of beer is mostly demanded?
a) Mild b) Strong c) Both
Ques.3- In beer, what are the different brands available with you?
a) Tennents b) Budweiser c) Haywards 5000
d) Kingfisher e) Any other………………
Ques.4- Which brand of AB InBev beer in mostly demanded?
a) Tennents b) Budweiser c) others
Ques.5- How much quantity of Tennents and Budweiser beer is sold daily?
a) 10 Cases b) 10-20 Cases c) > 20 Cases
Ques.6- Do you agree with advertising program of Beer?
a) Yes b) No
Ques.7-Are you satisfied with the distribution system of AB InBev?
a) Yes b) No
Ques.8- Do you think that sale can be increased by providing scheme to retailer
and consumers?
a) Yes b) No
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Ques.9- Who is the biggest competitor of AB InBev in the market?
…………………………………………………………
Ques.10- Would you like to give some suggestions to company forimprovement?
………………………………………………………………………
………………………………………………………………………
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BIBLIOGRAPHY
Reference Books:
Marketing Concept: Philip Kotler
Data From: Internet
News Papers: The Economic Times & The Times of India
Magazine: Business Week
Research Methodology: C.R. Kothari
Marketing Research: G.C. Beri
Websites:
www.google.com
www.ab-inbev.com
www.wikipedia.com