How AB InBev Succeed in Chinese Market

Introduction

Europe was the major centre of brewing industry in the world. However, it showed a big falls of the beers sales after the mature period of the market (Johnson G, 2005). On the other hand, Chinese market is expected to have a continuous growth with long-term profit prospect , and becomes the world’s largest alcoholic beverage market in both volume and outputs terms so far (SAB Miller, 2013). As the leader of world brewing industry, AB InBev noticed this giant potential market and decided to enter into this market campaign. In order to survive in Chinese market, this research will help AB InBev to analyze their local competitors, new strategy and design a market campaign.

Aim and Objectives

This research is aim to discuss how AB InBev can succeed in the Chinese market campaign. The three main objectives are: A·Evaluating Chinese local brands from customers’ perspective. A·Creating a new market strategy can be used in the Chinese market. A·Designing of a market campaign for AB InBev in China.

Literature Review

 Local Competitors

The Chinese local brewing companies have escalated steadily in production as well as consumption since 1980s (Accenture, 2012). Majority of the Chinese brewing factories are running locally, including some of them was owned by the local government before (China Daily, 2013). There are several big local brands, such as Tsingtao Beer, Yanjing Beer, which are all named after the city names. Because of the strong support from government and the customers’ intended local brand choice based on their culture, these big Chinese local brewing companies have already been monopoly locally in some areas(Bernard A, 2012). However, there is still not a national brand which can be operated all over the world (Accenture, 2012). Several local brewing companies do not perform well in network social media. Tsingtao Beer still uses the old method, TV advertisements, to do their promotions. The research shows that Tsingtao Beer spent 83,200,000RMB on the TV advertisement during CCTV News in one year (Yichao S, 2013).

New Market Strategy

Most local brewing factories are relying on the low cost and concentrating in China’s eastern and middle south provinces (IBIS World, 2013). In these provinces, there is a big difference in people’s consumption behavior between urban and rural areas (Ke Q, 2009). AB InBev must look to a new market strategy based on this market structure, which will be tailored to the unique characteristics of China’s diverse markets (Accenture, 2012). In the research, it shows that urban customers are used to be served through supermarkets, restaurants and bars, which are all well-established sales channels for selling high quality products. Compared with people in urban areas, rural beer drinkers are preferred to keg and draught beer in small stores (Accenture, 2012). In another words, the new market strategy for AB InBev is to serve high-end products for urban customers and low-cost but high-quality products for rural customers.

 Market Campaign

In order to execute successfully the new market strategy described above, AB InBev is required to design a market campaign. There are 6 steps for planning a successful market campaign, including setting objectives, defining targets, evaluating competition, setting a budget, considering communication channels, monitoring and measuring (World Press, 2013). In addition to the 6 steps, it is necessary for AB InBev to focus on their brand position and distribution.

AB InBev operates a board brand portfolio which includes more than 200 highly popular beer and soft drinks brands all over the world (Anheuser-Busch InBev, 2012). In order to target the market in different segmentations, the company classifies its brands in three levels, which are global brands, international Brands, and local champion brands.

The Chinese beer companies are highly relying on the two channels provided by regional distributors to access the market, including ready-to-drink channels and non-ready-to-drink channels (Accenture, 2012). However, the direct online distribution is demanded according to the new customers’ behavior (Lorin M, 2001). In this way AB InBev can also gather and analysis the customer’s data.

Methodology

Research Design

This research will be done by using mixed methods research, which combines quantitative and qualitative research (Norman K, 2011). It includes both a questionnaire for customers and an interview for alcoholic beverage sales managers. In order to increase the validity of the research, the questionnaire will be tested cautiously to minimize any misunderstandings (Brain W, 2000).

Sampling Type

The samples of the research study are selected randomly outside of supermarket and clubs, which will increase the data validity (Brain W, 2000). In addition, it will be combined with the snowball sampling to complete the rest of questionnaire. The samples have been divided by regions, ages, genders and different backgrounds. The samples for the interviews are alcoholic beverage sales managers from different supermarkets and bars in Shandong Province, which is the biggest province in east China.

Data collection

4.3.1. Primary Data The primary data will be collected through questionnaires and interviews. The questionnaires will use multiple choice questions. Each of the interviews will be expected in 20 minutes. All the questions in the interviews are using open answer questions. 4.3.2 Secondary Data Besides the primary data, this research will also use secondary data, which includes textbooks, scholarly articles and electronic database (Ashley B, 2013). The secondary data is used to build the literature review.

Research Ethics

Permissions have been given in writing about the interview details. All the managers and company names will not appear anywhere in the dissertation.

Limitation

Since snowball sampling does not select units for inclusion in the sample based on random selection. In this method, it cannot control the possible sampling errors.

Potential Solution and Recommendations

AB InBev is expected to succeed in Chinese market through a new market strategy, which will diverse into urban areas and rural areas in China. In addition, the market campaign is required to focus on the brand position and distribution.

 Timetable

 Conceptual Map

Risk Register

Risk Explanation	Likelihood	Impact	Risk Score	Risk Level
Reduction of output caused by nature disaster which affect the accuracy of data	4	3	12	Low
A new competitor enters into the market campaign, and affects the market balance	7	8	56	High
Chinese government launches new policy to limit the sales of alcoholic beverage	8	6	48	High
Any scandals of AB InBev is exposed to public	3	7	21	Low
Insufficient test of questionnaire	5	7	35	Middle
Misunderstandings caused by translation errors during the surveys	5	7	35	Middle
The scope of research designed cannot represent the whole Chinese market	8	8	64	High
Insufficient resource	4	6	24	Low
Computer Break Down	6	6	36	Middle

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