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Company profile

Anchor Brewing Company is an American alcoholic beverage producer, operating a brewery and distillery on Potrero Hill in San Francisco, California. The brewery was founded in 1896, and was purchased by its current owner, Frederick Louis Maytag III, in 1966, saving it from closure. It moved to its current location in 1979. It is one of the last remaining breweries to produce California Common beer, also known as Steam Beer, a trademark owned by the company.

Key Dates
1896: Anchor Brewing was established. 1966: Fritz Maytag bought Anchor. 1975: Anchor turns a profit and begins producing other beers.

SWOT analysis
Internal environment Strength
Modern equipment Research capability Capable personnel Distinctive packaging Positioning strategy Distinctive product features

Weakness
Not utilizing maximum production capacity. Inadequate advertisement. Not setting expansion strategy

External environment Opportunity


New markets due to word of mouth effect Unexplored opportunity for its Socially responsible image due other beer brands to sponsorship 1

Trait
Competition from imported beers Substitute products effect Fierce competition Price problem

1. Anchor steams marketing mix


According to Philip Kotler (2000:9), marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. The elements of the marketing mix are consists of Product, Price, Promotion and Place in case of product marketing companies. When it comes to service rendering firms, additional 3Ps will be added and they are people, process and physical evidence. Product: - Product can be a tangible object or an intangible service. In this specific case, there is a product Anchor steam beer which is produced in a higher quality, filled in bottles and six beers packed in a case, a brand name Anchor steam beer and on a distinctive packaging. The Company prefers to produce only by 60% of its capacity, only by one shift, focused on quality rather than quantity which finally can enable the company to charge premium. Pricing: - The price is the amount a customer pays for the product. In our case, we can observe that the price of Anchor steam beer is twice as much domestic premium beers right up there with the most expensive imported beers. We can also learn that there is a price problem due to the high price set by the company. From those points stated above, we can assume that the company is setting its price based on the consumers value they have for the product which is perceived as a high quality. Furthermore, we can say that the company is using Value Based Pricing which is basically based on the perceived value and not on any other factor. Promotion: - It represents all of the communications that a marketer may use in the market place. Promotion has four distinct elements: advertising, public relations, personal selling, sales promotion and an informal promotion method called word of mouth . Even if the company uses a couple of local print ads per year to promote the Christmas beer , its main promotional to market Anchor beer product is Word of Mouth advertising method which is an unpaid form of promotion in which satisfied customers tell other people how much they like anchor steam beer. The Company prefers words of mouth promotion which is less costly and one of the most credible form of advertising. 2

Place: - Place represents the location where the product can be purchased including distribution channel including physical store and virtual stores. Anchor steam sold its beer in 30 states by 1975 through its distributors, liquor store and also distributes through its the cleanest delivery trucks in the U.S which also serves as brand positioning strategy. People: - Can be described as all people involved with consumption of the product or the service. It also defines the market segmentation. On Anchor steam case, we can further clarify as those on the segment (upscale young adults, college educated and value conscious) for whom the product is made available. 2.

Has the company adopted the marketing concept?


To enable them to evaluate whether Anchor brew has applied the marketing concept or not, we would like to describe the five competing concepts under which organizations conduct marketing activities The production concept holds that consumers prefer products that are widely available and inexpensive. The product concept holds that consumers favor those products that offer the most quality, performance or innovative features. The selling concept believes that consumers, if left alone, will ordinarily not buy enough of companys products and focuses on aggressive selling. The marketing concept rests on four pillars according to Kotler (2000:12): target market, customer needs, integrated marketing and profitability. The company has specific market segments and after learning its beer didnt taste very good anymore, brewing facilities were inadequate and brew was available on draft (learned customer needs) the company invested a lot to fulfill customers needs for quality beer. Therefore we can say that, the company has adopted a marketing concept.

3. Anchor brewing companys organizational mission.


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The companys mission is to brew best quality beer and serve its status conscious consumers by building a distinctive image on its consumers mind as a quality brand. 4. Marketing strategies used to market anchor steam beer A strategy is consists of a well thought out series of tactics to make a marketing plan more effective. Marketing strategies serve as the fundamental underpinning by marketing plans designed to fill market needs and reach marketing objectives. It also focuses on improving the competitive position of a companys or business units products or services within the specific industry or market segment that the company or business unit serves. Marketing strategies may differ depending on the unique situation of the individual business and different scholars use different ways to categorize some generic strategies. To enable us determine what strategy Anchors steam beer used to market its product, we have tried to list down some of the categories as:a) Strategies based on Market dominance: - Firms will be classified based on their market share or dominance in the industry and four types of market dominance strategies are leader, challenger, follower and nitcher. b) Innovation strategies: - his deals with the firm's rate of the new product development and business model innovation. There are three types which are pioneers, close followers and late followers. c) Porter Generic strategies: - strategy on the dimensions of strategic scope and strategic strength. Strategic scope refers to the market penetration while strategic strength refers to the firms sustainable competitive advantage.

Generic Strategy

Commonly resources

Required

skills

and Common requirements

organizational

- Sustained capital investment and access - Tight cost control Overall-Cost Leadership to capital - Process engineering skills - Intense supervision of labor Products designed for ease manufacture - Low-cost distribution system - Strong marketing abilities Differentiation - Product engineering - Creative flair - Strong capability in basic research technological leadership Frequent, detailed control reports - Structured organization and of responsibilities - Incentive based on meeting strict quantitative targets - Strong coordination among

functions in R & D, product development, and marketing - Subjective measurement and measures

- Corporate reputation for quality or incentives instead of quantitative - Long tradition in the industry or unique - Amenities to attract highly combination of skills drawn from other skilled labor, scientists, or creative business Focus/ Segmentation strategy people. - Strong cooperation from channels - Combination of the above policies - Combination of the above directed at the particular strategic target policies directed at the particular strategic target

In the case of Anchor Steam Beer, we believe that the company was implementing FOCUS/ SEGMENTATION strategy in which we can prove that the company has segmented value concerned or class conscious customers to meet there special need of quality beer with dark and foamy attributes. The firm also wants to make the above points its competitive advantage. We can also clearly see that the company has a narrow size and puts its efforts on its on its narrow segments which can enable them to use there limited resources better and maximize its gain. The company also targeted a market segment (value concerned & status conscious consumers) who are less vulnerable to substitutes. In considering the above points, we can say that the company is offering a quality beer with premium price to its specific market segments and which best describes the company is implementing Focus/ Segmentation strategy and to be more specific Narrow Focus strategy.

5. Identify some of the tactics used to market anchor steam beer When we define Marketing tactic, its a specific operating plan detailing how a marketing strategy is to be implemented in terms of when and where it is to be put into action and further according to Kotler and Keller (2006:43) further explained as it includes product features, promotion, merchandising, pricing, sales channels and services. Tactics, therefore, may be viewed as a link between the formulation and implementation of strategy. Some scholars categorize tactics into two as timing tactics (when to compete) which highlights first movers who launch a product first and late comers who enter into the

sector later into and also market location tactics (where to compete) which includes in which market should the company use offensive tactics and defensive tactics. When we come to the case of tactics to market Anchor steam beer we are saying those tactics derived to achieve the marketing strategy and which are part and parcel of the marketing mix. To market the beer: First the company targets those who value quality and rates them as a special people. Used words of mouth as a promotional tactic which is more reliable and fastest tool than others. Distinct its packaging to create a distinctive image on customers mind which recalls quality when they think of Anchor beer. Charges premium price which enables them to stage them selves with the most expensive imported beers which also can put a classy beer perception on customers mind. The company also gives its customers other limited verity of beers to give them a choice and more specifically produces Christmas beer once in a year for a specific period. In return, it might create a feeling on customer mind as a Christmas present and might create a tendency to prefer Anchor beer than competitors. The company sponsors a woodwind ensemble to show societal responsibility.