'Consider, analyse, and evidence the relationship between factors that are part of a business organisation's external environment and it's non price decisions.'

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'The marketing mix consists of everything the firm can do to influence the demand for the product.' This is broken down into 4 components, ( of which I am to consider in this study) known as the 4 ps;

Product

Place

Promotion

And Price. In this assignment we will be looking at how the external environment effects the non-price decisions.

My chosen product is experienced in most of our day today lives. Whether it be ourselves consuming it or we watch an advert, pass a pub, or even go to a football game, it's everywhere, we are even aware of it at a very young age, when we are unable to consume it even!! It appears at almost every social activity, and is even used within religious ceremonies. We are told it is good for us in moderation, but bad when abused. The product I shall be looking at is alcohol;

Alcohol is consumed daily, in fact more than 10 billion units of alcohol are consumed in the UK each year. The retail market for alcohol is valued at £6.4 bn.

The consumption of different types vary throughout the year, however beer and lager consumption is relatively consistent throughout the year.

Lagers have overtook the domestic dark beers during the 0s, and now take more than 50% of the UK market. (keynote report; Breweries and the Beer Market 001)

For drinking levels of the adult population in the UK see fig appendix.

Product

The UKs largest brewers were Bass and Whitbread. However 'they recently put their brewing interests up for sale to concentrate on leisure activities and hotels.' (see fig 1. in appendix)

Bass and Whitbread were brought by brewing giant Interbrew, who are based in Brussels and are one of the oldest beer companies in the world.

They like to be known as 'the worlds local brewer', and their strength is their brand portfolio. Stella Artois is the largest and most premium brand in the portfolio of Interbrew. And is the brand I will primarily be looking at in this report.

Interbrew aim to use their 'local marketing expertise as a vehicle to accelerate growth of their international flagship brand, Stella Artois, in selected markets around the world.' Stella is a classic European lager, which is bottom fermented blond pils. Alcohol content is 5.% ABV.

Stella Artois is currently marketed in 16 countries, and is 'continuing to roll out into additional markets.'

Sales volumes of Stella have grown 'at a compound annual growth rate of 8% from 10 to 18 and at a rate of 16% in 1 and % in the first half of 000.' (www.interbrew.com)

Stella has become a favourite worldwide and has been one of the most popular brands by sales both over the Christmas and summer periods in the Uk. (see fig 6. appendix)

Promotion

Recently public opinion regarding the portrayal of larger drinkers has forced a change in the way lager is promoted.

Interbrew a brewing giant 'has lambasted UK brewers for pursuing advertising that reinforces stereotypes of beer drinkers as session-drinking lager louts.' they also warned that if advertisers persist the nations favourite tipple will be taken over by wine in the nest ten years.

Latest market reports show that wine sales in the past 5 years have grown 5%, and are set to rise by a further 0% in 007.

In pubs the volume of beer sold has plummeted by about 00 million pints a year since 180, this is thought to be caused by the poor image it has in the UK, as it advertising causes it to become associated with 'session drinkers, larger louts and beer bellies.' See fig 7. in appendix)

Stella Artois is not the largest media-advertising spenders in the lager market, these figures (see fig 4. appendix) however might be affected by their most recent sponsorships mentioned below.

According to Mintel; 'exclusive research shows that drinkers claim not to be strongly influenced by advertising or sponsorship..' however..;

On 15th May, 00 - Interbrew, announced that Stella Artois would be an official partner of the Film Festival of Cannes 00.

'Interbrew has opted for film as the overall sponsoring theme for Stella Artois, one of its international brands. Selective and focused sponsoring is a part of Interbrews marketing mix for Stella Artois.' (www.stella-artois.co.uk) This has gained Stella Artois recognition and association which a completely different audience, as appose to football which lagers usually take up sponsorship with. Sport is not ignored however the Stella Artois tennis Championships have been being held at the Queen's Club, West London since 17 making it one of the longest running sports sponsorships in the UK. 1 of the last Wimbledon champions have played in The Stella Artois Championships.

Recent violence and trouble at football matches is perhaps on of the external reasons why Stella Artois promotion has preferably been linked to other activities, such as mentioned above the tennis championships and the film festival. A better image is being aimed for here.

Place

'Recent changes in the brewing industry have been more significant on the supply side than on the demand side.' (keynote) It is apparent that local breweries are far becoming phased out to create international 'giant breweries' such as Interbrew. International lagers are also widely dominating as the beer market, such as Stella.

There are diversions in the marketplace, which Stella Artois have taken full advantage of;

Packaging and presentation to the consumer; Stella Artois is available in many different formats to suit every occasion, all of which can be purchased off trade (take home trade) be it from a supermarket or the off licence; they are;

5cl cl 440m

500ml 568ml 660ml

The 568ml La Grande Biere is the latest addition to the range and is the equivalent to one full UK pint. (Source www.stellaartois.co.uk)

By providing the consumer with such a choice of formats it shows Stella Artois are fulfilling their customers changing needs.

Strength in alcohol and taste variations; Alongside the original Stella Artois full bodied 5.%vol, Also in the Stella Artois family we find;

'Stella Artois Dry - a luxury dry pils beer, blond in colour with a powerful yet light taste and a refreshing character without bitterness. It h as an alcohol content of 5.5% vol (Belgium), and should be served at ° C.

Stella Artois Light (.4% vol), a light beer in the Stella Artois tradition with a natural light taste and a thirst quenching character. It should be served at ° C.

And the Stella Artois beer for drivers is Stella Artois N.A - a highly refreshing alcohol free beer with a natural, tender flavour and an alcohol content of 0.5% vol. This is at its best when served cold at ° C.' (www.interbrew.com)

Decisions on where to sell the product are at the moment being affected as the 'take home' market is continually growing , as disposable incomes decline and people opt for fewer nights out on the town.

'According to Mintel, between 17 and 000 supermarkets saw a percentage rise in their share of the off-trade lager market of 8%, while off licences saw their market share drop by more than %.' (see fig. 8 in appendix)

A trend has recently been noted also that the clearly a preferred home consumption is actually that of lager.

The external environment of a market can also be described as PLEST, which stand for the following;;

Political

Legal

Economic

Social

Tecnological

These are all uncontrollable variables and are below I have concerned them with both lager and alcohol.

Political

· The British brewery market recently has been under great reconstruction. It was actually regulatory measures that were introduced by the government during the 10s that forced two of the UKs national brewers (Bass and Whitbread) to sell their brewing divisions. Many of the UKs regional brewers too have now given up brewing. , or have merged into larger units.

· Alcohol limits have been put into place by the government which can affect alcohol consumption levels; 'In December 15, following a review of the issue by the Department of Health, the then Conservative Government announced that it had increased the sensible limits, and it was widely interpreted as meaning that it had increased them to 8 units a week for men and 1 units a week for women. However, the Government denied that this interpretation was correct and insisted that it wished to get away from a weekly limit in favour of a daily limit. The daily limit proposed was - 4 units a day for men and - units a day for women,'

Legal

· It is illegal in the UK for under 18s to purchase alcohol. However 'Young people drink more alcohol than older people. In the late teens and early twenties alcohol consumption is 40-50% higher. Despite the licensing laws about 60 per cent of 1 -17 year olds have bought alcohol in a pub or off-licence. In the 1 -16 year old age group about a third drink at least once a week.' (www.drugscope.com)

· It is an offence to be drunk and disorderly in a public place, including within licensed premises. It is also an offence to drive whilst unfit to do so because of drink. Anything more than 80mg of alcohol in every 100ml of blood is over the legal limit.

Economic

· 'If the continuing economic stagnation continues throughout 00, retail sales of alcohol may paradoxically grow .'

· Alcohol has significant impacts on the NHS. In 1 it was reported by Dr J Chick that in urban hospitals in Britain '15-0% of male medical and surgical patients, and 8-15% of women patients have alcohol problems.'

(British medical journal 7 November 1)

· 'Key note forecasts that the UK market for beer will increase in value by 8.8% between 001 and 005'.' (keynote report; Breweries and the Beer market 001)

Social

· Alcohol is known to be associated with a wide range of social problems, from crime to absenteeism and inefficiency at work

· Regular heavy alcohol consumption, is linked with a wide range of diseases and causes of premature death. One of the main medical complications linked with lager is obesity due to the high levels of calories lager contains.

· The proportions of men exceeding the limits has remained stable over recent years however, the proportions of women exceeding the limits have increased steadily. Proportions of over the limit drinkers are higher in the younger age groups. (see fig .appendix)

Technological

· Throughout the 0s an acceptance has grown for drinking(or swigging) beer/lager straight from the bottle, this has changed the format in which lager is produced with new sized bottles and cans being introduced. Stella Artois and Budweiser are the leading brands here.

· Distribution of lager has changed 'with the grocery multipliers. (E.g. Tesco, Sainsburys, Asda, Safeway and Morrisons.) now claiming over three quarters of all take home lager sales. Major brewers are now working hard to build partnerships with the supermarkets in order to improve business by developing

Strengths

-'Economies of scale are already well developed nationally, and are moving up to a multi national platform.' (keynote)

-'Brewers have been able to diversify and spread their risk across other industry sectors.' (keynote)

-'It is becoming standard that lager is a standard consumer product brought and taken home during the weekly shop.' (keynote)

Weaknesses

-Traditional British ales and lagers are being overtaken by more powerful, dominant international lagers (this is a strength for Stella Artois).

-Pressures from heath worries about alcohol and drink driving scares.

Opportunities

-The growth of the 'take home market' gives opportunity to expand product range.

-Licensing laws are forever changing, of late we have seen 4hour opening passed by the government. Alcohol is being sold more frequently, both on and off trade.

-'New types of outlet for leisure, eating and drinking out have created opportunities for brewing innovations.' (keynote)

Threats

-Manufacturers are concerned that with the increasing sales in wine, aisle space (which is currently used by beer and lager) will be threatened.

-Suppliers are now trying to link directly to supermarkets as oppose to linking brewers and pubs.

-'Government intervention is a constant threat.' (keynote)

As we can see from the extensive research and analysis above we can see that there is a clear relationship between the external environment of alcohol and lager, and Stella Artois non pricing decisions. All of its decisions are clearly determined by the external marketing environment. In fact there is very little decisions I myself can gather into price, as Stella Artois is such an established brand.

The next few years are going to be vital to the future of Stella Artois. As the popularity of wine and other alcoholic beverages grows, Stella will be fighting to keep the lager market out on top. And also fighting to keep the top spot in the popularity stakes within the lager market.

As it is a classic brand which has been around since 166 (in Belgium) I am sure it will have no difficulty, but in this ever changing world and environment who knows where the global flagship brand will end up.

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