Developing a competitive marketing strategy and model for the premium beer brands in South Africa.

Abstract

The Research Problem South African Breweries has been losing market share as a result of competition from international brands such as Heineken, Amstel, Windhoek and many more entering the local market. South African beer brands are finding it very difficult to compete for consumers’ attention and secure a recognizable competitive market position. Given this background, this study attempted to develop a competitive marketing strategy and model aimed at assisting South African beer brands to re-gain their competitive position in the market and compete with international beer brands. Key Research Question Most South African firms and organizations are struggling to keep their market share because of the presence in the market of multi-national corporations. This scenario begs the question: How can South African industries such as South African Breweries (SAB) best respond to the aggressive competition resulting from the continual entrance of international beer brands. Research Methodology The study employed a mixed research approach whereby both qualitative and quantitative research methods were used. A total of 300 beer consumers and four liquor distributors participated in this study. Convenience sampling was used in the selection of consumers around Durban and Pietermaritzburg. Quantitative data was collected from consumers and qualitative data was collected from liquor distributors. The Statistical Package for Social Sciences (SPSS) and Principal Component Analysis (PCA) were used to create consumers’ perception indices which were used to determine the main attributes of premium beer brands, the factors that attract

consumers to premium beer brands and the life style elements of premium beer brands consumers, which were then used to develop the competitive model and marketing strategies which addressed the main objective of this study. Findings It was ascertained that there are attributes other than the alcohol content of the beer that attracts consumers to purchase and consume premium beer brands. Consumers are attracted to premium beer brands by the crispiness of the beer, and the superior quality of the beer. The life style of consumers has a major bearing on the beer brand choices. South African Breweries would outperform its competitors by developing its distribution network and by providing more customised services to its retailers such as financial packages in the form of sales discounts. Recommendations: From the findings the study proposes the following recommendations: every effort must be made in the whole value creation chain of SAB to differentiate its activities from those of its competitors, as such differentiation becomes central to sustainable competitive advantage of the organisation; the SAB should make every effort to establish a good rapport with its customers and distribution members and offer them services that will strengthen their partnership; SAB should find a sustainable way of reducing the cost of doing business so that it can compete meaningfully in the market as the beer market has become more price competitive.