英美煙草澳大利亞公司的5個營銷問題

問題一 - 組織描述

英美煙草澳大利亞公司（BATA）是澳大利亞主要的煙草生產商，主導約46%的市場份額。它是英美煙草公司的子公司，坐落于倫敦。它在澳大利亞市場有兩個主要的競爭對手：菲利普莫里斯公司（PMI）占據36%的市場份額及帝國煙草公司（ITA）占據17%的市場份額。BATA擁有幾個較強的品牌，包括溫菲爾德、金邊臣以及登喜路。BATA于2005年向組織推出其戰略，宗旨是“處處快人一步”，比競爭對手快一步、比競爭威脅快一步、比監管變動快一步以及比科技發展快一步。

 

BATA有其市場取向，旨在確定其客戶的需求以及發展其產品以滿足這些需求(Marketing Management, 2009, Unit 1, p16)。由于與客戶溝通中存在法律上的限制，BATA聘請專門的調查機構來確定客戶需求并提供滿足其需求的產品。計劃和研究小組，專門分析研究并決定、確定及量化不同客戶需求的重要性。九類客戶目標分割已確定。此外，四類價格分割應用于消費者洞察，溢價、主流、傳統價值以及新價值。而且，BATA的許多活動都專注于客戶 – 包括營銷、貿易關系、供應鏈以及信息科技項目。

 

問題一 - 組織描述---Issue One - Organisation Description

 

British American Tobacco Australia (BATA) is Australia's leading tobacco manufacturer, commanding approximately 46% market share. It is a wholly owned subsidiary of British Company BAT Plc, located in London. There are two major competitors in the Australian market; Phillip Morris (PMI) with about 36% market share and Imperial Tobacco (ITA) with about 17% market share. BATA has several strong brands including Winfield, Benson and Hedges and Dunhill. BATA's mission statement is to stay “always one step ahead”, a strategy launched to the organisation in 2005. This includes staying one step ahead of its competitors, new competitive threats, regulatory changes and technological changes.

 

BATA has a marketing orientation, aiming to determine the needs and wants of its customers and to develop products to meet these needs and wants (Marketing Management, 2009, Unit 1, p16). With legal limitations around communicating to consumers, BATA uses independent research agencies to identify customer needs and deliver products to meet these needs. A Planning and Insights team, exists focus on analysing research to determine, identify and quantify the importance of various customer needs. Nine customer target segments have been identified. Also, four price segments are used with this customer insight; premium, mainstream, traditional value and new value. In addition, many of BATA's activities focus on the customer - including marketing, trade relationships, supply chain activities and information technology projects.#p#分頁標題#e#

 

Organisations with a marketing orientation, also typically aim to meet the needs and wants of customers more effectively and efficiently than its competitors (Marketing Management, 2009, Unit 1, page 16). However, BATA's target market is existing adult smokers, not non- smokers, hence its marketing activities are focused on influencing consumers to switch to BATA products competitor products.

 

問題二 - 5Cs分析---Issue Two- Analyse the 5Cs

 

Company

 

A key strength for BATA is its size and scale. It is the market leader in Australia and commands a portfolio skewed towards the higher valued Premium and Mainstream segments, delivering BATA approximately 60% of the industry profit pool. Its five trademarks have been independently valued at approximately $3bn and bi- annual customer research has indicated positive results for brand equity measures, strengthen in over the last 18 months. BATA's staff turnover rates are well below Australian averages, at around 8%, with robust internal training programs across all levels of leadership. This indicates a satisfied and experienced workforce.

 

However, with BATA's size and scale comes a key weakness - lack of flexibility and agility in a rapidly changing market. Speed to market is relatively slow due to internal bureaucracy and a complicated supply chain. The restrictive regulatory environment and negative social attitudes towards BATA and the tobacco industry in general may also be considered a weakness, although BATA has little direct control over these factors, aside from maintaining its integrity and social responsibility.

 

Customers

 

BATA's customers are adult smokers typically making ‘routine purchases' (Marketing Management, 2009, Unit 3, page 17). Customers usually move through each of the purchasing decision processes automatically, as tobacco products are purchased on a regular basis, unless they are first- time smokers. Traditional marketing strategies to address routine purchases include loyalty programs, or coupons (Marketing Management, 2009, Unit 3, page 17). Regulatory restrictions limit BATA's ability to employ traditional marketing tools such as loyalty programs or coupons, and therefore BATA focuses on product quality and innovative packaging to create loyalty.

 

Competitors

 

Traditionally, three tobacco companies have existed in Australia - BATA, PMI and ITA. Recently, new low- priced entrants have entered the tobacco market, imported products from overseas. The new entrants are growing rapidly (off a low base) and are a key competitive threat to BATA, who have a premium- skewed portfolio. Risk of substitute products must also be considered in evaluating the competitive environment. (Porter, 1980). The relevant risk of substitutes for BATA are illicit tobacco products and cheaper counterfeit products.#p#分頁標題#e#

 

Collaborators

 

There are three main collaborator groups for BATA- suppliers, retailers and logistics providers. Suppliers include suppliers of raw materials as well as non manufacturing suppliers such as security and consultants. Retailers tend to be fragmented, ranging from small corner stores and milk bars to large grocery chains such as Woolworths. The purchasing decision process for each of these retailers varies, and therefore BATA tailors its relationship with these collaborators according to purchasing complexity and roles. A third collaborator for BATA is its logistics provider. As targeted marketing is becoming a more important consideration, BATA is currently working on initiatives to improve this relationship, and build the necessary processes and infrastructure to enable this.

 

Context

 

BATA's operating context plays a significant impact on operational activities and longer term strategic plans. The highly regulated tobacco industry imposes many restrictions around the sale and the consumption of tobacco products including customer communication, public place smoking, retail display bans and potential generic packaging. The political environment also has a large part to play - as attitudes of current Governments affect both the pace and impact of regulatory change.

 

問題三 - 關于5Cs的信息收集---Issue Three- Collecting information about the 5Cs

 

Company

 

BATA continually collects and tracks the change in a range of financial and operational measures to identify the strengths and weaknesses of the company, from daily sales to weekly share and annual performance reviews. Some market intelligence is also used to benchmark BATA's performance against other organisations. For example, financial performance is benchmarked against other high performing Australian FMCGs as well as international tobacco organisations to help identify opportunities or weaknesses.

 

Customers

 

Market research is a widely used tool in BATA, with qualitative research being the primary form of customer research. Focus groups are widely used to address specific research problems or to track the strength of each of the key brands. General customer surveys are also undertaken bi- annually through AC Nielsen, tracking customer segments and helping to identify needs.

 

Competitors

 

Market intelligence is primarily used to track competitor information, through the review of financial statements, news articles, AC Nielsen data, and industry reports. Trademark journals are also reviewed by the Legal Department to identify new brand launches. Also, the BATA sales representatives monitor the market and report observations into a centralised database, reviewed by Head Office monthly.#p#分頁標題#e#

 

Collaborators

 

BATA uses internal data to collect information on retailers. Both financial and operational data are tracked at a retailer level, to understand retailer performance, and measure the effectiveness of any collaborative initiatives. Information on collaborators such as suppliers and transport and logistics provided is predominantly collected and tracked through a set of prearranged service level agreements.

 

Context

 

Market intelligence is the primary form of information collection for context. BATA has a dedicated team focusing on the regulatory environment, who track media publications and government committee reports. In addition, the team has developed a relationships with key government stakeholders, to open the possibility of having internal views communicated to the Government.

 

Economic, social and technological trends are also monitored for changes. Sources include government reports such as economic reports and RBA publications, ABS data, news articles, industry reports on social trends and attitudes in Australia, technology journals, and external speakers on a range of contextual topics.

 

Issue Four - Segmentation, Targeting and Positioning

 

BATA's target market is current adult smokers under 30, as this is the fastest growing demographic. A differentiated strategy has been adopted, with nine psychographic customer segments across four price segments identified, based on customer needs and preferences. These have been mapped in the table below, with a brief description of each segment following:

 

Macho Rebel

 

Designer Demand

 

Creative Innovative

 

Pleasant Refreshing

 

Active Established

 

Everyday Aussie

 

Price Compromise

 

Premium

 

B&H

 

Dunhill

 

Kent

 

Mainstream

 

Winfield

 

Winfield

 

Winfield

 

Value

 

Holiday

 

New Value

 

Pall Mall

 

Pall Mall

 

Pall Mall

 

Segment

 

Description

 

Macho Rebel

 

The pack is a ‘badge of honour', very loyal and typically male smokers under 30.#p#分頁標題#e#

 

Designer Demand

 

The pack demonstrates a knowledge for the finer things in life. Typically female smokers under 30, who would watch Sex and the City and consider themselves coffee connoisseurs.

 

Creative Innovative

 

Continually upgrade technology, risk takers, seeking new ideas and innovations. Detest mainstream and value niche.

 

Pleasant refreshing

 

View smoking as an overall pleasant experience and may smoke to take a moment away from life's stress

 

Active Established

 

Experienced smokers seeking good quality at a reasonable price. Typically over 30 and married.

 

Everyday Aussie

 

Traditional Australians who love football, laconic humour and honour tradition.

 

Price Compromiser
 

Mums and dads who value the cheapest offer at the Supermarket. Will search to find the lowest price and purchase the larger, value sized packs.

 

Understanding the customer values behind these segments is key to positioning the brands correctly. Taking Winfield as an example, it plays across multiple segments, due to its size, however its core position statement is “Australia's number one original since 1072” (BATA Portfolio Strategy, 2009). The brand has traditionally played a significant role in the tobacco market, and as Richard Branson said, brands are built not around products, but around reputation (Marketing Management, 2009, Unit 2, p32). Australia's leading brand, Winfield, has a distinctive Australian reputation, with many still remembering the advertisements using Paul Hogan at a BBQ and sponsorship of the ‘Winfield Cup' Rugby League. It holds a 40 year tradition in Australia and the text font and style of pack has not been modified significantly during the period, in line with the values held by the Everyday Aussie segment. Qualitative research has indicated that the segment values the badge on the front of the pack, similar to the way a car lover would recognise a car badge. As such, the badge has been enlarged over time, with a new Winfield line recently launched, to strengthen the brand's positioning in this growing segment.

 

The segmentation used by BATA has proven to be successful, meeting the criteria of heterogeneity between segments and homogeneity within the segments. However, some of the segments have been changing, since the time they were first introduced, two years ago. Immigration and tourism is one influence leading this change, as well as changing social patterns. For example, the Everyday Aussie segment looks to be splitting, with younger Winfield smokers unaware of the tradition behind the brand relating to beach and skating culture, as opposed to the loyal smokers, relating to the Aussie larrikin connotations of historic Paul Hogan advertisements.#p#分頁標題#e#

 

The category is also categorised by BATA based on price segments. In the value and new value segments, cigarettes are treated by customers like homogeneous shopping products, whilst premium and mainstream products are viewed as heterogeneous, carrying greater brand values and offering a differentiated product (Marketing Management, 2009, Unit 2, p6). This is an important consideration when deciding how to allocate marketing investment funds.

 

Nine target segments is arguably exposing BATA to the risk of high marketing costs, in terms of promotional expenses and distribution costs (Marketing Management, 2009, Unit 5, p8). Although BATA focuses its investment on its 4 key brands, using resources on less profitable and smaller share products offers little benefit to BATA and crowds the category with unnecessary messages and risks proliferation.

 

問題五 - 市場策略評估---Issue Five - Evaluation of marketing strategy

 

BATA's marketing orientation is the most effective orientation to adopt in the current market. Given that market volume in Australia is declining at a rate of approximately 1.5% per annum, and that the target market for BATA is existing (not potential) adult smokers, BATA is required to increase its volume by taking share from competitors. As such, BATA must focus on meeting the needs and wants of its customers “more effectively and efficiently than competitors or alternatives” (Marketing Management, 2009, Unit 1, page 16). The success of this orientation is evident in BATA's performance, with a compound annual profit growth rate of about 6% over the last 5 years, and continued increased share, despite declining volumes and an increasingly stringent regulatory environment.

 

A marketing orientation may not always make sense for BATA going forward. Retail display bans and the release of a Government discussion paper on generic packaging may make it increasingly difficult to offer differentiation. In addition, new entrants are placing pressure on BATA in the new value segment, by offering lower priced cigarettes in the market. A product orientation could be more suitable for Premium and Mainstream segments to maintain brand equity and differentiation via continuous but often incremental product improvements (Marketing Management, 2009, Unit 1, p15). This becomes increasingly important with new low- priced product offers risking driving the category towards commoditisation and increasing brand switching in the market.

 

For Value and new Value segments, a production orientation could be a more suitable approach. Production efficiency techniques could include cheaper packaging and product materials, simplified packaging and product designs and fewer SKUs, as customers in this segment value price over product attributes.

 

Evaluating BATA's use of market information, overall BATA is effective. A dedicated planning and insights team evaluate a wealth of information which is collected from a variety of internal and external sources. A limitation faced by the organisation is the inability to record customer information due to legislative constraints. This makes it difficult to obtain insights about buyer behaviour and routine purchases at a detailed level. Many companies with routine products use loyalty programs to collect individual customer details and sales information, but loyalty programs are prohibited by tobacco regulation.#p#分頁標題#e#

 

BATA is reasonably effective in the way that it analyses and uses market information. Customer information is well collected, analysed and communicated on a bi- annual basis through AC Nielsen's General Customer Survey. Also, sophisticated data models have been developed to determine causal using the pricing and volume information from scan, reviewed regularly at pricing meetings. There are some shortfalls in BATA's analysis and interpretation of market information. Although a large quantity of data is collected, it is often analysed only when the need arises. This can lead to reactive rather than proactive marketing activities. Another weakness is that due to the long tenure of most employees in the company, marketing decisions can be experienced based, rather than fact based.

 

BATA could greatly benefit from a formalised Marketing Information System (MIS). A Marketing information system would allow BATA to collect, sort, analyse and distribute market information in a timely and accurate manner (Marketing Management, 2009, Unit 4, page 6). An MIS would alleviate the issue of analysing information in functional silos and could encourage a more proactive activity management approach, by identifying trends or threats. It could also assist in transitioning to a fact based decision making process, using robust information for analysis, as opposed to relying on experience. BATA should also consider introducing new marketing techniques for decision making, such as marketing mix models. With a challenging economic environment and declining industry a focus on sustainable cost reduction and product differentiation is essential. Marketing mix models could be used to evaluate which marketing techniques provide the “biggest bang for the buck” (Marketing Management, 2009, Unit 4, pg 45).

 

BATA's marketing strategy demonstrates a high reliance on brand, which is justified, given the business's operating context. Many marketing techniques available to other FMCGs are not available to BATA and the importance of brand as a marketing mechanism becomes amplified. Brand equity is set to become even more important after retail display bans are introduced in 2010, as customer product choice could be highly influenced by brands that they see others smoking, as opposed to having the option of comparing brands on a shelf. This could benefit BATA by default, as they own the strongest brands in the market and will therefore be visible to smokers.

 

The consistent performance of BATA alludes to an effective marketing strategy. It has successfully adopted a marketing orientation, drawing on insights from market information and analysis, to adopt a suitable marketing strategy given the challenges faced by the contextual environment. The biggest challenge BATA will face is increasing agility and speed to market in an increasingly competitive and complex environment. The foundation of strong brands and dedicated employees will help towards maintaining leadership. However additional marketing techniques such as a management information system and new marketing trends could help BATA face the challenges that lie ahead.#p#分頁標題#e#

 

REFERENCES

 

Marketing Management, 2009, AGSM MBA executive program

 

Porter, M.E. 1980, Competitive Strategy, New York, Free Press

 

BATA Marketing Management, Brand Portfolio Strategy, 2009