Business overview of Fosters group limited

Business everywhereview of treasures assemblage holdFosters group limited is the Australian avered al outsetance global beverage family. It delivers a total pot likker portfolio of beers, wines and spirits to millions of its consumers globally. Fosters manufactures Australias well-nigh famous beer Foster Lager, it besides manufactures Australias leading beer marques including Victoria Bitter (VB), Crown Lager, Carlton Draught and Cascade bounty lager. It also produces human beings recognised wines such as Wolf Blass, Saltram, Beringer, Matua and Chateau St Jean. Wolf Blass was the number globally recognised wine harvest-home of Fosters.In addition to the above paragraph, Fosters Lager is the largest selling Australian beer disfigurement in the world. Ab go forth 100 million cases of nourishs lager is consumed by the people world large per year. It is brewed in nine countries everywhere 20 plants. It is the worlds third most widely distri aloneed brand which is avai lable in to a greater extent than 150 countries. Foster lager is the world-wide flagship brand for fosters group.The beer trade in Australia is increasing day by day. The consumption of beer by adults, teenagers, and women has also increased. In this present scenario of globalization and economic downfall, people ar changing their alcoholism habits on with their life style. They argon concentrating much(prenominal) on the crossways which they think ar worth spending. Fosters being grocery store puddle in fruition of beer in Australia, is adapting itself to the changed mindsets of the people. In run to fit the mind sets of people of Australia it has introduced a new(a) product downstairs the name of Fosters called Carlton lessen, which is a low in carbs, low in alcohol flashiness and rich in its taste.Furtherto a greater extent, this story deals with fosters groups market analysis in Australia. It explains how fosters has successfully launched its products by consi dering every prognosis of launching a new product. It also deals with fosters enquiry on Australias demographic, economic, socio cultures, political and technical environments, how it has segmented individually of them in introducing its products. It emphasises on fosters marketing strategies and comes to a conclusion. At the end, this communicate will summarise some recommendations and carrying out plan for march on improvement of fosters market destiny in Australia. With this research we will find out that similarly if fosters introduces a new product, how it could be further improvised, depending up on the market analysis by on fosters marketing plan2. MissionFosters Mission is to work together, respecting each opposite, our heritage, diversity, skills and knowledge to Build premium look, commencement ceremony-choice brands Deliver service excellence to nodes and consumers Generate superior returns for divideholders Create an inspiring workplace be welcomed in the com munities in which we operate(Business Studies, 2009)VisionBecoming the leading premium branded beverage company in the world by maintaining particular goals include archetypical choice brands for consumers First choice employer for our people First choice investment for shareholders (Business Studies, 2009)3. Internal Environment3.1. ProductsFosters group is a major organisation in beer and liquor industry overall Australia (Fosters classify A, 2009). It has many products in beer, wine, Cider and non boozer drinks which are under the flagship of fosters. study Beer brands owned by Fosters Australia include Asahi Super Dry Brahama Carlton light Carlton Draught Carlton Midstrength Carlton Sterling Cascade bountifulness Cascade Premium Light Corona Crown Lager Fosters Lager Hoegaarden Kronenbourg 1664 Leffe Melbourne Bitter Miller attested Draft Newcastle Brown Ale Pure Blond Stella Artois Victoria Bitter (Fosters Group B, 2009)3.2 pecuniary SituationFosters group has a much of i ts production in it beer products but its major sales turnover is with its wine production. The wine products of fosters group has taken a bottom line of 75%. Rest 25% is with beer and spirits (Hoovers, 2009). However, harmonise to the beer industry statistics, fosters group has a major share and its sales are also high. Fosters annual report shows that the company is in a very stable financial position and its good for the any further expansion (Appendix 1). The net profits are enough for implementing or introducing a new product in to the market. Fosters can also expand with this net profit in to new markets.3.3 ChannelsFosters has chosen the topper logistic services company which ensures the upright in time delivery of its products to the stores. It also takes aid of the warehousing, bottling, create from raw stuff and recycling of bottles. It has got the standardised infrastructure, simplified process and advanced transport management systems. Apart from this, it also takes care of the information and communication (ICT) technology utilised by fosters group in outsourcing their services globally (Ferret, 2008).4 External environments4.1 Competitive environment and marketsThe environment in which fosters group launching its products catch many competitors but the acquisitions made by fosters group in Australia had made it the number one player of beer industry in Australia ( give Smart, 2009). Apart from the other beer manufacturers, companys manufacturing non- alcoholic drinks is a major drawback for fosters. Because it acts as the substitute product for the alcoholic drinks and are low in price.4.2 Demographic EnvironmentAustralias diverse culture and lifestyle reflects its liberal democratic traditions and set (Australian authorities A, 2009). Its geographic location which is closest to Asia pacific region has given an added advantage to Australia. commonwealth are diversifying to the new changes and the trends. Immigrants have helped Australia i n enriching almost every aspect of Australian life, starting from business, cooking, arts, sports, science etc (Australian government activity A, 2009).4.3 Political and legal environmentAustralia is ranked second in the political stability in the IMD world competitiveness yearbook 2009 (NSW presidential term A, 2009). With this it is clear that the markets in Australia have no threats or inconveniences by the government changes and policies. Though the changes occur, they will be in favour of the organisations because Australia has the decentralised labour market.4.4 Economic EnvironmentAustralia has a strong and flexible economy. It has capitalized the countries proximities for the emerging new Asian markets on its longstanding trade links to japan and the United States. In 2007 Australia registered its 17th consecutive year of economic expansion with GDP growth averaging 3.5% per year (NSW government B, 2009). Even during the economic downfall, Australia has remained stable and maintained its position.4.5 Socio-cultural environmentThe Australia is a multilingual country with fortune if international immigrants entering in to this country every year. It has broad varieties of culture that adapts any change intimately (Australian judicature A, 2009). According to the statistics of Australian bureau of statistics, its clear that creation of Australia is increased by 2.1% during the 12 months terminate at 30 June 2009 (Appendix 2). Along with the population increase the alcohol consumption rate of the people has also increased mostly amongst teenagers aged between 17 -19 years.4.6 Technological EnvironmentWith the globalization, markets are getting much more advanced in their products. Organisations are producing products at a rapid rate in loudness due to automation of their industries. Australian government is also spending lot of money in evolution its countries infrastructure and technology which helps the foreign investors in putting their invest ments. Research and development has advanced along with the packaging in technology, helping in development of new discoveries (Australian Government B, 2009). Australian market is always alert in adapting new technological changes, discoveries and developments.5. SWOT AnalysisStrengthsGlobally recognised brandLargest selling beer brand in the world available in more than 150 countriesWide range of beer productsStrong merged representation in the market place ( it also produces premium wines such as wolf Blass, Saltram, Beringer, Matua and chateau St jean)Seen as a good corporate citizen with the promotions of the events such as formula one, AFL and RugbyAustralian owned company (Business Studies, 2009)WeaknessesCommunities changing attitudes towards alcohol consumptionFalling per head beer in AustraliaCommunities attitude towards plastic packagingPeople becoming more health consciousOpportunitiesFurther expansion in to domestic and global marketsacquiring more number of breweri es and wineriesAcquisition of more number of hotels and restaurants by introducing fosters productsGaining public support by victorious initiatives on environmental friendly packaging and recycling computer programsThreatsStrong competition from other beer producers in the marketPublic changing their tastes and perceptions in demanding imported beers6. merchandise ObjectivesThe marketing objectives of fosters group includesTo increase market shareIncrease product rangeExpand geographiclyExpand through exportMaximise customer service (Business Studies , 2009)To increase market shareFosters is trying to expand itself to increase its market share over the years. After the acquisition of New South Wales brewer Tooth and Co, fosters gained the advantage of becoming market leader.By 2001, it has acquired more than five brewing companies across Australia becoming the number one producer of beer by volume in Australia.Increase product rangeBy acquiring small and big breweries, fosters wi th its products along with the acquired products has increased its product range. These products are widely distributed throughout Australia with fosters as its flag shipExpand geographically and Expand through exportThe prime method of export is by acquiring breweries internationally, this in turn leads to its geographical expansion. With this geographical expansion it can cover a wider market and also increase its market share globally7.0 Marketing Strategies7.1 Target MarketsFosters groups main target are the people who consume alcohol including beer, wine, spirits, cider and other pre-mixed drinks. When the Carlton light was introduced, everything has changed. This product has concentrated much more on the segments where people are more likely to prefer low crabs beer and people who are health conscious. This segment includes youngsters, corporate employees and women.Continuing, from the outline of the statistics obtained from Australian Bureau of statistics, we can conclude th at the people are spending more in both alcoholic and non-alcoholic drinks (Appendix). So, by studying the statistics, Fosters has introduced Carlton light in to the markets which eventually boosted its sales. Along with this, Carlton light has grabbed the attention of the people who are in love with Fosters other products.7.2 ProductHere Carlton light was a new product which was introduced in to the Australian markets. So, this report focuses on its potential service. As mentioned by Stuart, et al, (1995), that a potential service is considered as the level at which the organisations tries to delight their customers by finding out better ways. Similarly, Fosters has introduced Carlton light in order to delight its subsisting and new customers by providing them with low crabs, ultra light beer.Furthermore, in addition to the unveiling of its new products, Fosters has always concentrated on branding them. Since the core product of Fosters is beer, the company wants its core product to be different from its competitors. So, in order to differentiate, Fosters has mainly targeted on its branding by creating a brand image. This was through with(p) by shaping the bottle to the international recognizable standards with a long neck bottle, appeal labels, high contrast colours etc. This has differentiated fosters products from other players in the market.Various other products under Fosters such as Victoria Bitter, foster lager, Crown lager and cascade premium draught have a special recognition for themselves in Australia (Fosters C, 2009). This already established recognition has given the Carlton light with the said(prenominal) recognition, which eventually improved the brand image of Fosters.7.3 PricingAccording to Kerin, (2008), pricing is considered as a life-and-death of the marketing mix because it determines the revenue that the companys products will earn (Kerin, 2008). In determining a products pricing, pricing schema matrix should be considered by ev ery organisation (Kotler, et al, 2009).From the above table, the price skimming strategy was employ by Fosters in pricing their products. Fosters doesnt want to penetrate in to the markets by keeping their prices low because, its brisk products are already higher in costs compared to other brands in the market (Invest Smart, 2009). Foster has gained first means advantage by introducing Carlton light with a premium price. It has sustained its growth by maintaining soaked sales over a period of time. Carlton light has gained the market share by hitting the markets at the right time. During this period, the demographic segments of Australia have become more health conscious, this statistics have helped Fosters in launching Carlton Light (Ibs World, 2009).Rajendhra, (2006), mentions that there is a link between the price and the timberland of the product. He also mentions that the pricing of a product should be done along simultaneously by improving the quality of product. So, fost ers has introduced Carlton Light in to the markets, which is rich in quality and which has low carbs. Fosters research and development takes care in assuring the quality of its products (Fosters, 2009).7.4 Promotion StrategiesThe role of promotions in the marketing mix is to bring about mutually satisfying throw with the target markets by informing, educating and persuading them of benefits of the product (Charles, et al, 2008). Here the benefits of Carlton light are the low calories beer which helps the customers in washing their worries on becoming fat or affecting their diet. This beer can be enjoyed by everyone because it has low alcohol its just a higher end substitute of the soft drinks and other non alcoholic drinks in the market.Continuation, Apart from the repair promotions fosters uses in promoting its products it has to educate people about the benefits of the beer. This can be done byImplementing responsible drinking programs which explains on how much consumption shoul d be made and how it benefitsIntroducing health conscious kiosks at shopping mallsSponsoring The biggest looser program that is featured in Australian Television channel.Apart from these promotions, it follows its basic approaches likeAdvertising through television, magazines and give-and-take papersSponsoring different sporting activitiesWorldwide sponsorship and association with formula one racing which it already does with foster brandsSponsoring AFL, rugby league etc which it already does with foster brands7.5 Distribution StrategyPlace or distribution strategy are mainly concerned in making the product available to its customers when and where they wanted (Charles, et al, 2008). Since alcohol is a drink that has some regulations from the government, it should follow specific steps in selling them to its customers. Beer is not available everywhere, it has its own places such as Bottle shops, liquor stores, super markets, pubs, restaurants, hotels etc.Similarly, though Carlton l ight is a low alcohol beer, it has to be sold along with other liquor products. Foster group has a wide distribution of its products across Australia and it makes sure that Carlton light also gets equal importance along with its other beers.8. Recommendations pass more in research and development in improving the fineness of beer.Introducing new products as substitutes to the existing productsEntering in to broader market by using international strategy for market developmentConcentrating more on responsible drinking programsIncreasing the promotion standards e.g. sponsoring student activity programs in universitiesImproving the quality of the acquired products by implementing the processes foster follow in its own organisation.Acquiring more number of local and international breweries9. Implementation PlanCarefully thinking about the suggested recommendations and the market analysis done by this report on fosters group, this report will suggest an implementation plan for these thin gs. Considering the marketing objectives of Fosters group we can draw that, through acquisition on other breweries, fosters has gained a competitive advantage in the market.According to Ansoffs, product/market matrix, fosters should use the international strategy in order to develop its market. Here in market development, it states that by introducing an existing product in to the new market, fosters group can gain the first mover advantage and also can expose its brands to new audience globally (Kotler P, et al, 2009). This will be done by acquisition of local breweries in the new market or introducing the new product with a premium price. This will also expands fosters product range.When it enters in to new markets, it has to do a lot of research in developing fine quality of beer so that everyone likes it at the first shot. By targeting only the health conscious audience, it has to introduce ultra light beer, with low carbs, less alcohol content than Carlton Light. Similar strate gies should be followed in implementing this new product.Along with constantly monitoring and controlling this marketing plan, areas like sales and market and profitability by product and territory should also be monitored. It also should conduct regular updates on further improving its each product like wines, spirits, ciders because those particular products will become a considerable hit in particular areas.ReferencesABS, (2009), Australian Bureau Of Statistics-Australian Demographic Statistics, Jun 2009, http//www.abs.gov.au/Ausstats/emailprotected/mf/3101.0 (Accessed on 08-03-2010)Australian Government A, (2009), About Australia-People, culture and Life Style, http//www.dfat.gov.au/facts/people_culture.html (Accessed on 8-03-2010)Australian Government B, (2009), About Australia-Innovations, http//www.dfat.gov.au/facts/science.html (Accessed on 8-03-2010)Business Studies, (2009), Marketing At Fosters, http//www.docstoc.com/docs/14565631/including-SWOT-and-product-life-cycle (Ac cessed on 5-03-10)Charles W. L., Hair F.J. Jr, McDaniec C., (2008), Essentials of Marketing, 6th Ed, Cengage LearningFerret, (2009), Fosters Group selects RedPrairie for logistics network transformation project, http//www.ferret.com.au/c/RedPrairie/Foster-s-Group-selects-RedPrairie-for-logistics-network-transformation-project-n735508 (Accessed on 06-03-2010)Fosters A, (2009), About Us, http//www.fosters.com.au/aboutus.htm (Accessed on 7-03-2010)Fosters B, (2009), our brands, http//www.fosters.com.au/enjoy/ourbrands.htm (Accessed on 7-03-2010)Fosters C, (2009), Beer, http//www.fosters.com.au/enjoy/beer.htm (Accessed on 7-3-10)Hoov ers, (2009), Fosters Group Limited, http//www.hoovers.com/company/Fosters_Group_Limited/ctcrci-1-1njea5.html (Accessed on 07-03-2010)Invest Smart, (2009), Fosters Group Limited, http//www.investsmart.com.au/shares/asx/Fosters-Group-FGL.asp (Accessed on 10-03-10)Kotler. P, et al, 2009, Principles of marketing 4th ed, Australia, Pearson education Australia.NS W Government A, (2009), Political Stability, http//www.business.nsw.gov.au/aboutnsw/climate/A9_riskofpolinstabil.htm (Accessed on 07-03-2010)NSW Government B, (2009), State Economies, http//www.business.nsw.gov.au/aboutnsw/climate/A2_state_econ.htm (Accessed on 7-03-2010)Rajendhra Nargundkar, (2006), Services Marketing 2E, 2nd Ed, Tata McGraw-Hill, NY.Appendix 1 (Source http//www.hoovers.com/company/Fosters_Group_Limited/ctcrci-1-1njea5.html).Fosters Group Limited Income StatementAll amounts in millions of US Dollars except per share amounts.Jun 09Jun 08Jun 07Revenue3,778.54,411.74,185.1Cost of Goods interchangeGross Profit3,778.54,411.74,185.1Gross Profit MarginSGA ExpenseDepreciation Amortizationoperating(a) Income919.61,095.8994.6Operating Margin24.3%24.8%23.8%Nonoperating IncomeNonoperating ExpensesIncome Before Taxes801.7956.9812.6Income Taxes214.5268.3221.4 net income Income After Taxes587.2688.6591.2Continuing operations356.2106.6823.1Discontinued Operations0.06.20.0Total O perations356.2112.9823.1Total Net Income356.2112.9823.1Net Profit Margin9.4%2.6%19.7%Diluted EPS from Total Net Income0.180.060.41Dividends per Share0.210.240.19 2009 Morningstar, Inc. Financial data provided byData DefinitionsFosters Group Limited Balance SheetAll amounts in millions of US Dollars except per share amounts.AssetsJun 09Jun 08Jun 07 present-day(prenominal) Assets specie107.0154.5244.0Net Receivables757.11,019.2984.9Inventories926.1970.9880.8Other Current Assets114.675.3129.9Total Current Assets1,904.82,219.92,239.5Net Fixed Assets1,559.81,959.51,919.3Other Noncurrent Assets3,272.43,747.73,956.3Total Assets6,737.07,927.18,115.2Liabilities and Shareholders truthJun 09Jun 08Jun 07Current LiabilitiesAccounts PayableShort-Term Debt297.843.8242.6Other Current Liabilities795.5954.01,048.6Total Current Liabilities1,093.3997.81,291.2Long-Term DebtOther Noncurrent Liabilities2,620.83,230.72,892.2Total Liabilities3,714.14,228.54,183.4Shareholders EquityPreferred Stock Equity0. 00.00.0Common Stock Equity3,009.03,670.63,908.3Total Equity3,009.03,670.63,908.3Shares Outstanding (thou.)1,927,753.01,927,753.01,927,753.0 2009 Morningstar, Inc. Financial Data provided byData DefinitionsFosters Group Limited Cash Flow StatementAll amounts in millions of US Dollars except per share amounts.Jun 09Jun 08Jun 07Net Operating Cash Flow712643634Net Investing Cash Flow(169.6)(47.4)486.6Net financial support Cash Flow(568.3)(705.2)(1,247.4)Net Change in Cash(26.0)(109.1)(126.7)Depreciation AmortizationCapital Expenditures(149.9)(135.8)(165.6)Cash Dividends Paid(383.1)(578.8)(528.9)Appendix 2, (Source http//www.abs.gov.au/Ausstats/emailprotected/mf/3101.0)JUNE KEY FIGURESPopulation at end Jun qtr 2009Change over forward yearChange over previous yearPRELIMINARY DATA000000%New South Wales7 099.7115.51.7Victoria5 427.7113.92.1Queensland4 406.8112.92.6South Australia1 622.719.41.2Western Australia2 236.965.73.0Tasmania502.65.11.0Northern Territory224.85.02.3Australian Capita l Territory351.25.61.6Australia(a)21 874.9443.12.1(a) Includes Other Territories comprising Jervis Bay Territory, Christmas Island and the Cocos (Keeling) Islands.Population growthPopulation produce Rate, Year ended current quarterJUNE KEY POINTSESTIMATED RESIDENT POPULATIONThe preliminary estimated resident population (ERP) of Australia at 30 June 2009 was 21,875,000 persons. This was an increase of 443,100 persons (2.1%) since 30 June 2008 and 95,800 persons since 31 March 2009.Preliminary natural increase save for the year ended 30 June 2009 (157,800) was 8.4% (or 12,200 persons) higher than the natural increase recorded for the year ended 30 June 2008 (145,600).Preliminary net overseas migration for the year ended 30 June 2009 was 285,300 persons.POPULATION GROWTH RATESAustralias population grew by 2.1% during the 12 months ended 30 June 2009. Natural increase and net overseas migration contributed 36% and 64% respectively to this total population growth.All states and territo ries experienced positive population growth over the 12 months ended 30 June 2009. Western Australia recorded the largest percentage gain (3.0%) and Tasmania the smallest (1.0%).