Two Dogs Beer (Market Entry Analysis)

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Global Marketing Management @ Emerson College …

Global Marketing Management @ Emerson College
Situation Analysis For Launching Australias Two Dogs Beer In Israel

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  • Small market : Population is 7.1 million Young market: Median age is 28.9 years, 53% of alcohol consumers are aged 18 to 29 Educated: Compulsory and free education until age 16, 97% literacy rate Jews: 76% of population, alcohol is allowed (kosher), must serve in military at age 18 for 21-36 months, most people have similar standard of living Muslims: 16% of population, alcohol is forbidden (haraam), military service is voluntary, tend to be amongst the country’s poorest (22% is below poverty line)
  • Small market : Population is 7.1 million Young market: Median age is 28.9 years, 53% of alcohol consumers are aged 18 to 29 Educated: Compulsory and free education until age 16, 97% literacy rate Jews: 76% of population, alcohol is allowed (kosher), must serve in military at age 18 for 21-36 months, most people have similar standard of living Muslims: 16% of population, alcohol is forbidden (haraam), military service is voluntary, tend to be amongst the country’s poorest (22% is below poverty line)

Transcript

  • 1. Two Dogs Enters Israel Zeenat Rasheed October 9th, 2008
  • 2.
    • Demographic Composition
    • Economic Conditions
    • Cultural Attitudes
    • Beer Industry Conditions
    • A-B-C-D Model
    • (where applicable)
    • Recommendation
    Market Considerations
  • 3. Demographic Composition
    • Population: 7.1 million
    • Young nation
      • Median age: 28.9 years
      • 53% of alcohol consumers are 18 - 29
    • Educated
      • Literacy rate: 97%
    • Jews & Muslims
      • 76% vs. 16%
      • GDP per capita: $28,500
      • Disparate incomes, high poverty among ethnic minorities and immigrants
      • Different attitudes towards alcohol
  • 4. Demographic Analysis
    • Market size
      • Small, but lucrative
      • Young drinkers offer a large potential consumer base
    • Access
      • Significant poverty, but mostly among Muslims who do not drink alcohol
      • Among Jewish community, relatively similar incomes and standard of living
      • Reasonably priced product would be economically accessible to majority of population
  • 5. Economic Conditions
    • Strengthening economy
      • GDP (PPP): $185.9 billion
      • GDP Real Growth (2007): 5.3%
    • Industrialized economy
      • 67% Services, 30% Industry (% of GDP)
      • Very entrepreneurial IT sector
    • Strong infrastructure
      • World-class telecommunications systems
      • 100% paved roadways
      • 1.18 cell-phones per capita
      • 53 airports, 30 with paved runways
  • 6. Economic Analysis
    • Market Strength
      • As political situation stabilizes, performance of economy expected to improve
      • Experts predict increase in alcohol sales as stable economy encourages Israelis to spend more on entertainment goods
    • Access
      • Strong infrastructure offers physical accessibility and advanced communications system
  • 7. Cultural Attitudes
    • Moderate Consumers of Alcohol
      • Moderated by religion
      • Cultural preference for Turkish coffee
    • Wine Heritage
      • Ritualized usage
      • Locally produced, globally recognized
    • Undiscriminating Beer Drinkers
      • Loyal to cheap local brands, not affected by taste or health benefits
      • Brand image counts, foreign beers are considered sophisticated
    • Premiumization
      • Willing to spend more on imported, premium products
    • Room for Product Innovation
      • Microbreweries slowly taking root
      • Local flavor experimentation, e.g. date syrup, rose water, pomegranate
      • Kosher beer, Halaal (non-alcoholic) beer
    • Beer, Festivals & Food = Fun
      • Many annual beer and music festivals
      • Beer and meat have a “special relationship”
  • 8. Cultural Analysis
    • Buying Behavior
      • Positive attitude towards imported, premium beer
      • Existing palate for flavored beer suggests opportunity for innovation in line with Two Dogs product strategy
    • Cultural Orientation
      • Wine associated with older generation, beer is for the youth
      • Young and irreverent image would resonate with young beer drinkers at festivals
      • Must be careful to not offend conservative Jews or Muslims
  • 9. Beer Industry Conditions
    • Distribution
      • 75% off-site, but on-site expected to grow as economy stabilizes
    • Competition
      • Popular local brands (Goldstar, Maccabee)
      • Major foreign beers are also available
        • IBBL imports Guinness, locally produces Carlsberg
    • Bureaucracy and red tape
    • Ease of conducting importing trade vs. local production
  • 10. Beer Industry Analysis
    • Buying Behavior
      • Loyalty and fondness for local brands but trend towards premiumization
    • Modes of Entry
      • Local production could be challenging
      • Strong distribution strategy needed to ensure off-site penetration
  • 11. Final Recommendation
    • Yes
      • Two Dogs should enter Israel
    • How?
      • Exporting
        • Better to move cautiously due to political and economic conditions
        • Local production through licensing, joint venture or FDI could get caught up in red tape
        • Should have a strong distribution partner to help penetrate market
      • However, other international beer brands have licensing agreements
        • Could additionally explore licensing procedures and standards
        • Investigate exclusivity contracts
  • 12. Questions?