Tsingtao Beer Case Study

Consumer buying behavior Consumer behavior of purchasing beer is definitely emotional and of low involvement. The recreation and gratification getting from drinking beer prat be sensual notwithstanding fleeting. When making purchase decisions, consumers hardly spend whatever succession to recognize problems or to search information because when they feel like drinking, they testament just buy some. Gener ally speaking, customers keep loyal to their favorite beer brand. In fact, many of my friends have told me that Yanjing Beer tastes the pound among all they have tried and even though its relatively cheap, they are not apt(predicate) to buy it after first try.As you can see, among all the brand attributes of beer, the charge is not a material concern while taste, which can lead to brand value, matters much more. Once customers have recognized the comme il faut taste of a certain beer brand, probably they are neer going to switch brand and all the beer decisions they make later will be regular purchases. Beer market segmentation The bases I choose for segmenting the Chinese beer market include age, gender, income train, life style, user rate and geographic area. All these factors matter in that they square the different consumer behavior of drinking beer, as concluded in Table 1.AgeFrom 18 to 60 offspring customers at 20-35 have strong potential GenderMen and women Women might drink beer less often than men or choose light flavor, out of concern of weight control Income levelFrom low to high- bosom Income does not matter a lot due to beers relatively low footing compared with other alcohol LifestyleWith leisure time and maybe some pressure User rateLight drinker, medium drinker, heavy drinker Geographic areaNortheast, southeast, northwest, southwest and middle Some areas have notable drinking habits such as northeast China. Besides, there is a disposal for citizenry to choose their local beer brand.Table 1. Competitive landscape and Tsingtaos status China is the largest beer producer end-to-end the world. Many local Chinese brands as well as foreign competitors are engaged in the competition. There are three main characteristics virtually the competitive landscape of Chinese beer market. First of all, outlay war is the main competitive tactic used by most local brewery brands. Not entirely small regional brands, but also large brands like Yanjing are entangled in price war. In general, price war does not lead to a favorable market position for any company because their profit margins will definitely be influenced.And most importantly, as I have mentioned before, price is not a significant factor that people will consider when buying beer. If companies put overly much emphasis on lowering price through lowering cost rather than astir(p) taste and quality, it will not work to their advantage in the long run. Secondly, there is a mode of foreign companies buying local brewers stock, meaning that foreign competitors are flooding into Chinese market in a more strategic way. Tsingtaos collaboration with Anheuser-Busch is a case in point. It facilitates mutual education and internationalization.The third characteristic might be a future trend that the consolidation and centralization level of Chinese beer market will become higher. With regard to Tsingtao Beer, it is one of the gigantic tiers of China beer brewers. Its competitive advantage is the superior quality due to unparalleled brewery techniques. According to the consumer reexamine results posted on its website, customers perceive Tsingtao beer as high quality and high price. In general, the fierce competitive marketplace has influenced Tsingtao a little but I cypher its established brand image is still far from being hurt.Positioning alternatives for Tsingtao Tsingtaos situation alternatives are whether to get more low-price market or to adhere to the current high quality, high price strategy, especially when it penetrates into Beijin g market and compete with the local giant Yanjing. In my opinion, Tsingtao can adopt a multibrand strategy to fulfill needs of different target markets. For people who have great concern about price, Tsingtao can lower the price as a response to the local price war. For other people, however, Tsingtao should never pursue more sales at the expense of quality.To implement this strategy, Tsingtao has to do a complete consumer survey and then better segment the market. In the segmentation process, income level and geographic area might be the two most important bases. Besides, Tsingtao has to improve its advertising and packaging because beer is low- involvement and emotional product. As is mentioned in the case, nowadays the main reason for consumers to buy a certain brand of beer is brand image and the burnish attached to the brand. I think Reeb beer, based in Shanghai, has done a great job in this part, although Reeb is just a small regional brand compared with Tsingtao.I remember w hen I was a primary nurture student, Reebs TV commercial was an interesting song. The lyrics were mainly saying that Reeb has witnessed the quick development of Shanghai and peoples great change after the opening policy of Pudong District (See the appendix). And at the end of the commercial, it give tongue to Reeb beer is the reason why you love Shanghai. Almost everyone from Shanghai of my age or older than me can sing this song and the attachment with this city definitely has enhanced Reebs brand image. I think Tsingtao might learn from Reeb to improve its advertising.