The Issue That Carlsberg Malaysia Facing Marketing Essay

The company that author going to use on this report is Carlsberg Malaysia. Carlsberg Malaysia was incorporated in December 1969; Carlsberg Brewery Malaysia Berhad began brewing Carlsberg Green Label Beer locally in 1972. Carlsberg Malaysia has a beer for every drinker with different palates and lifestyles for every occasion. Its expanded brand portfolio includes Carlsberg Green Label, Carlsberg Gold, Carlsberg Special Brew, Kronenbourg 1664, Kronenbourg 1664 Blanc, Asahi Super Dry, Somersby Apple Cider, SKOL beer, SKOL Super beer, Danish Royal Stout, Corona Extra, Jolly Shandy Lemon and as well as non-alcoholic Nutrimalt drink. In addition, Carlsberg Malaysia through its subsidiaries has also a wide range of imported international beer brands such as Hoegaarden, Stella Artois, Budweiser, Grimbergen and Beck’s. The Company now has 7 of 9 world’s top international beer brands. Besides the business, Carlsberg Malaysia also having a lot of charity campaign on market which is Top Ten Charity, Back to school campaign and other sponsorship on education sector. Sponsorship not only on education side, others area also been covering a lot, such as Maybank Malaysia Open golf tournament, WTA tennis tournament, Fashion show, and others. Carlsberg stock at Bursa Malaysia also very active and potential. On the year 2012 Carlsberg Brewery Berhad has risen 49% and they has been list in the yearly share on 2012.

2.0 The Issue that Carlsberg Malaysia Facing

On this area, the writer choice 5 issues that Carlsberg Malaysia facing before.

2.1 Company strategy not suitable on current market

The strategy they using is to pushing their main product that is Carlsberg Green Label is very powerful and strong at last time and they are using the same strategy in very long period never change. The salesperson not really know what issue that customer facing on supply and delivery of goods problem, and they only concern about finding new customer, that makes company losing a lot of big account. That why Carlsberg facing the problem and drop from leader on beer industry to second place.

2.2 Ethics and Social Issues create by Company

The ethics and social issues been create by the company is people driving car and accident on road. Some of the people addict on drinking beer until their health goes down. Besides that, home violence case keep happen on the same period when people get drunk.

2.3 Project Failures: Tuborg beer and Tetley’s English Ale

Those two beer facing the same problem that is low demand on market. When there are no demand on market then the stock keeping in warehouse goes to expire all the time, and then the beer at outlet also expire but outlet didn’t realize and serve to customer, it make the customer give the bad command to the company.

2.4 New Technology implemented on Draught beer system call Back Pyhton

Previously the Draught beer machine which is installed at outlet need to be service by weekly and it very costly for company, every month also need to spend around 50k for the servicing charges. The new technology implemented from Carlsberg Copenhagen is back pyhton to reduce the cost of servicing.

2.5 Global MIS and Risks

Company management realize that, single brand is can’t make the company back to the market leader. At the meantime, they bring in the imported beer to Malaysia market for the customer satisfaction. Malaysia’s market not really big compare with other country, to achieve the outstanding profit is quite impossible. So that, Carlsberg Malaysia plan to make the investment on other country.

3.0 The solution that Carlsberg Malaysia has been done

The right decision made and right direction is very important for the company. So Carlsberg Malaysia made the good decision to overcome the issues happening around the company.

3.1 The new strategy implemented by new Managing Director

The company history show that the previous managing director not doing well to make Carlsberg Malaysia keep on the top of market and make the company lose the market leader position. So Carlsberg Copenhagen, Denmark assigned the new managing director to restructure the company and establish need strategy on Carlsberg Malaysia. The restructure on the company, they try to reduce the level of communication in between operation and management level and putting the salesperson get close with the distributor so that the salesperson understand and can be the front line facing the problem on the supply and delivery stock. To get back the market leader, company put hard on advertisement and sponsorship to build up the image also. To gain back those big customer, management team been assigned work together with the salesperson to negotiate with the customer and make both party become win-win situation.

3.2 Company CSR work harder to overcome the social issues

Carlsberg CSR launching the program that call Drink Responsibility, to educate customer drink with the own limit, and do not drive after drink over limit. On the internal, company allow staff claim back the cab fee when they was drink over. Besides that, they have been running for 20 years or more. We have our top Ten Charity programme where we have raised RM 360 million for schools. We have our OCM (Olympic Council of Malaysia) programme where we support Malaysia’s top athletes (OCM – Carlsberg Athletes Retirement Scheme) as well as our support in the Carlsberg Golf Classic charity. “A very important element of our CSR programme is to give something back, and when you give something back it has to be unconditionally. So it has to be real CSR and not a marketing campaign.” said by Soren Rovn Carlsberg Managing Director. (Susun 2012)

3.3 Two beer withdraw form market due to project failures

The reason that company decide to withdraw this two beer from market which is Tuborg and Tetley’s is because both also can’t achieve the sales volume that company set. To brew the Tuborg beer is take time and the cost of the material is higher than other, and the market demand on this beer also not really high. So company choice to brew other potential beer were make company earn more that Tuborg earn. On Tetly’s, every year company also waste and throw more than 10,000,000 litter because of the beer expire.

3.4 The new technology to reduce the cost

This new system back pyhton it helps to reduce the servicing frequency from one week once to become two week once. The function is cover whole draught beer system beer tubing with black colour insulation to reduce the speed that fungus and bacterial growth on the beer tubing that expose to light. With this system also make the beer freshness inside the keg keep until 5 days.

3.5 Company business expend to globalize

Carlsberg Malaysia imported a lot of famous beer into Malaysia to fulfil customer need, the reason they imported the beer because they know single brand no enough the compare with competitor. The beer that company imported such as, Asahi from Japan, Kronenbourg 1664 from France, Somersby apple cider from Sweden and other. To expend the company business and increase the profit, Carlsberg Malaysia made the investment on other company and country also, which is Luen Heng F&B, Sri Lanka’s Lion Brewery (Ceylon) PLC and Taiwan’s Carlsberg Cottingham Ltd. In end 2009, the Company has bolstered its market position through the acquisition of the entire equity stake in Carlsberg Singapore Pte Ltd (Carlsberg Singapore).

4.0 The Alternative solution

There might be other good solution for the issues that Carlsberg Malaysia facing.

4.1 Strategy

The other way to solve the issues is stop using outsource strategy and take back the supply and transport responsibility from distributor. When the responsibility come to the company own, the staff will more concern on the issues even it need take time to setup the department, but it is worth enough for the future plan. On the other side, marketing team support is quite important on this. Marketing team create the promotion and set the target market but if the marketer never work together with the salesperson and communicate, how the marketing team giving fully support and how the understand the marketing. So on the reason, marketing team should need go visit outlet with the sales team.

4.2 Ethics and Social Issue

The company already did very well on the Company CSR, but if they possible to giving sponsor on school or college that will be a good way to show that company want to help society and low profile student. Carlsberg Malaysia also can think about investment to some college, university, or school to giving more good facility for the student. And then the scholarship and internship can be practice in company, so that makes more people understand and know well on this company or industry.

4.3 Project Failure

Project failure at Tuborg and Tetley’s has been take action by the company and explain on the top. But think about it, is it really need to withdraw the brand for market? Carlsberg can try to put hard on advertisement or make the promotion on the Tuborg beer and, company can decide to reduce the quantity of production to match with the market demand. Because the sales result show that still got customer choosing this beer and that a premium beer on the market. Tetley’s is ale beer, on Carlsberg Malaysia portfolio, this is the only one ale beer for them to target the ale market. If the company withdraw from market, which means the competitor ale beer which is Kilkenny will dominate the whole ale beer market. So Carlsberg can choose to putting the beer on certain high demand marketplace or stop using draught beer and only use can beer on market. Because draught beer once open it cannot last long, if the outlet cannot finish the whole keg 30 litter in 1 week then the beer will spoil. Compare with draught beer, can beer can last 9 month or more than.

4.4 New technology

New technology Back Pyhton make the company reduce the servicing cost. But on UK and American, the servicing is done by the outlet themselves. Carlsberg Malaysia can come a campaign regarding the servicing procedure to educate the outlet bartender how to service and checking the draught beer machine. It is the long journey but it can totally stop company pay 50k every month for the servicing cost.

4.5 Global MIS and risks

On this issues Carlsberg Malaysia did very well the create their own portfolio on Malaysia’s market to increase their competitive advantage. If possible they can get the recipe for few target brand and make it locally brewing. That will be a big advantage for them to remove the import cost and they still can export to other country, because Carlsberg Malaysia supplying Carlsberg Green Label to other country also, such as Singapore, Taiwan, Maldives and others.

5.0 Conclusion

So far Carlsberg Malaysia did very well on 2012 and the report show that company announce on the year end about the company 3rd quarter net profit is outstanding growth up 26.1 % which is RM 61.8m (The Star Online 2012). It means company going in the right ways, but still need monitor the market and looking on the new segment.

The future problem on forecasting which is the licence renew problem. Malaysia as a majority Muslim country, it quite hard to get the renew licence on alcohol industry. And other global issues is shortage of Malt supply. Malt as a main raw material to brewing the beer, but pass few year the harvest of Malt is low and price goes up. At Malaysia, pricing of beer already very expensive compare with other local brew country. When the raw material cost going up, company have no choice and increase the market price.