Modern Liquor Distributors Pty Ltd
1. Executive Summary
Modern Liquor Distributors Pty Ltd is an alternative distribution company for a wide range of alcohol. Unlike the traditional alcohol distributor, our company provides a unique service for alcohol distribution service through the medium of mobile phones.
This marketing plan is designed to give us a blueprint for marketing alcohol distribution service, SMS. We have included a complete market analysis, target market summaries, a SWOT analysis, a detailed milestones table, and other relevant discussions.
Market research indicates a specific and growing need in the area for the products and services Modern Liquor Distributors Pty Ltd offered in the market it serves. The market strategy will be based on a cost effective approach to reach this clearly defined target market. The three-phase approach will utilize resources to create awareness of the store and encourage customers to benefit from the convenience and services it offers. Modern Liquor Distributors Pty Ltd will focus on its selection, accessibility of product, customer services, and competitive pricing.
We hope this marketing plan creates a long-term growth model for our alcohol distribution success. Our company will leverage its competitive advantage of a customer-centric business model to rapidly gain market share in the alcohol distribution niche.
Modern Liquor Distributors Pty Ltd is a company established by five enthusiastic, motivated and determined postgraduate students. The primary focus of Modern Liquor Distributors Pty Ltd is to provide utmost customer service to our target market: customers wishing to purchase alcohol.
Our main operation is to provide alcohol to customers through the process of text messaging from mobile phones. This process involves the customer providing information on what type of alcohol they require and when. Modern Liquor Distributors Pty Ltd then delivers the alcoholic beverages to the customer. This service allows the customer to conveniently obtain alcoholic beverages stress free for any occasion such as birthday parties, weddings and barbeques.
Our mission is to be the market leader in the distribution of alcoholic beverages. We are committed to offering our customers a service that is both efficient and hassle free. We have a set of values that we adhere to. They are listed as follows:
* Being the absolute best in everything we do
* Exceeding compliance and responsibility expectations set forth by any and all responsible organisations involved in the guidelines for responsible alcohol consumption
* Respect, responsibility, loyalty and integrity in all of our relationships
* Continually setting guidelines above and beyond what is expected by our customers
* Working with groups who promote prevention of non-responsible alcohol consumption
* Making each employee feel as if they are part of a team
* Promoting the responsible consumption of ALL our products
* Supporting communities throughout AUSTRALIA
3. External & Internal Analysis
This is the most important part of the marketing plan. “Plans are nothing, planning is everything”. Without conducting a comprehensive and rigorous analysis of the market, our company will fail.
To evaluate whether there is a market for our product, we conducted primary and secondary research to define the market and the broad segment.
3.1 External: Market Definition & Broad Segmentation
Broadly speaking, the market for Modern Liquor Distributors Pty Ltd. can be defined as an amalgamation of the following sub-groups:
* Young Adults (between 18-25 years) – These are the party buffs who need no reason to get together and drink. This segment ranges from the university going students to the young people who have just started their career.
* Mature Adults (Above 25 years)- These individuals spend more than 8-10 hours at work. The last thing that they would like to do after the long and tiring day is to travel that extra mile to get a bottle of wine.
* Techno-savvy people- These individuals are up to date with all the new technologies in the market. They like to try the new products that are launched in the market and qualify as early-adopters.
Looking at the above segmentation, Modern Liquor Distributors Pty Ltd. will first target the techno-savvy people as they are the early adopters of services based on technological developments.
The next target will be the mature group as they are not only brand conscious but also are willing to spend some extra dollars for the convenience of delivery at their door-step. This group has developed a taste for the kind of alcohol that they consume and are always willing to try out ‘something better’.
Finally, Modern Distributors Pty Ltd. will focus on the people between the age group of 18-25 years. These people prefer to drink first and then go out clubbing. They belong to the enthusiastic category who like to keep up with the current trend and try out the “in-thing”. Ordering alcohol through SMS is a totally new idea and thus will be very popular amongst them as it is using technology to the maximum benefit.
3.2 External: Market Analysis
After having analysed primary and secondary research information to segment our market, we must now analyse the determinants of market attractiveness in the competitive environment:
3.2.1 Porter’s Five Forces
Barriers to Entry
* There may be restrictions to entering this market because of government legislations. The process of obtaining a license to sell alcoholic beverages may be more difficult.
* The NSW Liquor Laws deny or limit access to alcohol beverages by minors through ‘remote’ liquor sales – that is liquor sales made via the Internet, telephone, facsimile or mail order. This also includes sales made via text messaging.
* Brand preference and customer loyalty – Since Woolworths and Coles have been the market leaders they pose a major barrier for a small company like Modern Distributors Pty Ltd. in entering the alcohol beverages market.
Barriers to Exit
Relativity low exit barriers in this market as:
* Assets can easily be sold or transferred.
* The inventories and fridges can be easily sold to other suppliers and/or retailers.
Customer Buying Power
* Customers have strong buying power in this market because they can easily purchase alcohol straight from the retailer or via the Internet.
* The availability of substitutes strengthens the position of the buyer. Moreover, consumers can easily obtain more information on the different types of alcoholic beverages.
* Customers can also easily switch from one competitor to another.
Supplier Selling Power
* Relatively low supplier power as there are many suppliers of alcoholic beverages in the market. Competitors include retailers such as Woolworths and Coles Myer, Internet Websites such as www.winelife.com.au/index.asp
* Switching costs are low; hence supplier selling power is low making this market attractive and the potential for profitability high.
* The product substitution will be fairly intense in this market, if we broaden our market to include all suppliers of alcoholic beverages such as retailers, hotels, Internet Websites and bars and pubs.
* There are two big players fighting for market share in the alcoholic beverages industry: Coles Myer and Woolworths.
* There is an opportunity for Modern Liquor Distributors Pty Ltd to gain a large market share in this segment as none of the competitors deliver alcohol through SMS.
* However, customers would not have physical access to our products before they order, which restricts their impulsive buying.
3.2.2 PEST Analysis
* Political factors such as rules and regulations can greatly affect Modern Liquor Distributors Pty Ltd. Obtaining a license can a difficult process with all the red tape and costs involved.
* Modern Liquor Distributors Pty Ltd must also comply with the various liquor laws.
* The Australian economy has been relatively stable and has been growing at a steady rate. However, its not fully recovered from the events of the last couple of years such as September 11, Sars etc.
* The healthy economic environment has provided Modern Liquor Distributors Pty Ltd with opportunities to further expand its Australian market.
* Australia is one of the largest per capita beer consumption countries in the world. Beer has become part of its cultural reflections.
* However, there are some social groups that oppose the consumption of alcohol. Modern Liquor Distributors Pty Ltd will have to actively promote the responsible consumption of all of its alcoholic beverages.
* Modern Liquor Distributors Pty Ltd is influenced strongly by technological factors because of the way it receives its orders from its customers.
* Modern Liquor Distributors Pty Ltd must continually monitor technological changes taking places if it is to maintain its competitive advantage and market share.
3.3 External: Competitor Analysis
Even though our service of selling alcohol through SMS is a brand new concept in the market, there are similar services being offered via internet and telemarketing. The following sell alcohol through internet and telemarketing:
* Dan Murphy’s (www.danmurphys.com.au )
* Liquorland (www.liquorland.com.au)
* Wine Australia www.winelife.com.au/index.asp
These companies have employed e-salesmen who are in charge for the actual sales and keep a record of stock, arrange for delivery and so on. Customer relationship management, a tool for building and retaining customers is also employed by such websites as they are not in direct contact with the consumers.
In Australia, the two grocery giants Coles and Woolworths dominate retail sales of alcoholic beverages. These companies often attach specialist liquor retail outlets to their supermarkets although they are also increasing their number of stand-alone stores. Coles operates these liquor sales through a variety of outlets, including Liquorland, Vintage Cellars (fine wine) and Quaffers (superstores).
> Liquorland has over 500 stores nation-wide and is Australia’s leading liquor retailer. Woolworths is another major player, owning 11 Dan Murphy stores, 105 Beer Wine Spirits stores, 20 First estate wines stores and over 300 liquor stores attached to a number of supermarkets.
> Coles and Woolworths have a combined share of about 46% of liquor retailing.
> Woolworths has continued its push towards the A$2 billion mark for its liquor operations, with sales during 2002/03 estimated at around A$1.7 billion.
This involves identifying and analysing Modern Liquor Distributors Pty Ltd’s competitors. Modern Liquor Distributors Pty Ltd must continually monitor its competitive position relative to its competitors in attracting and satisfying customers in its broad segment. There are no direct competitors in Modern Liquor Distributors Pty Ltd’s market. However, with the relatively low entry barriers and start up costs, big players such as Coles Myer and Woolworths can easily enter this niche market. Hence, for this analysis Modern Liquor Distributors Pty Ltd will consider them as its direct competitors and with whom to benchmark.
The alcoholic products range in the market:
In 2002 volume sales of alcoholic drinks in Australia continued to grow, but performance varied greatly between different types of drinks. Flavoured alcoholic beverage (FAB) sales in Australia have increased rapidly during the past two years, spurred by changing consumer demands towards convenience and ready mixed drinks. These products have become increasingly popular, at the expense of beer and bottled spirits, with most of the FABs being spirit based.
Beer accounts for a dominant share of the total volume of Australian alcoholic drink sales. Foster’s Group Ltd and Lion Nathan Ltd, the two biggest brewers in Australia, have both expanded their operations to include wine and include facilities to promote the development of FAB products. It is expected that wine will contribute a larger share of future profits for Foster’s with the purchase of Beringer Blass.
Evaluation of Primary Research:
According to our primary research data, the information gathered reveals that:
> A service whereby the idea of ordering alcohol through SMS was found strange by 25% of the people surveyed, 40% of the people found it convenient, 12.5% thought it would be speedy and only 22.5% found it as reliable!
> Also gathered from the primary research was that 72% of the consumers would rather pay a higher delivery charge (up to $5) if they are guaranteed a reasonable delivery time for their alcohol, usually up to 2 hours.
> Considering the convenience factor associated with ordering alcohol through SMS, people are not really bothered about the extra SMS charge for their purchase.
> A majority of people were very brand conscious about their alcohol as they have developed a certain taste over the last years and they would not change their preferred brands irrespective of no special deals being offered on them.
> However, the one drawback this service may face could be that most people are unwilling to give their credit card numbers via SMS for making payments.
> Telephonic interviews conducted revealed that most people would like to have a price list of their favourite brands of alcohol before they make their purchase decision rather than going through all the brands available.
> In order to find out the reliability factor consumers would associate with ordering through SMS, we sent SMS’s to people who buy alcohol from the internet offering them our service. About 70% of them gave a positive response and were keen to try our service over the internet.