Branding

In: Business and Management

Submitted By jenkins
Words 653
Pages 3
The branding management of Tsingtao brewery

Tsingtao Brewery Co., Ltd
In 2004, China with the output of 27 million tons of beer became the world largest beer producer in the world. At the same time, Tsingtao Brewery Co., Ltd – the Hong Kong and Shanghai listed company had became China’s largest beer producer and exporter, with annual sales of 3.71 million tons of beer. By using four years of time, the company expanded its market share in China from 3% to 13% (1999-2002) and turn out to be the market leader.

China’s beer market and segmentation
According to the report, the top 10 brewers accounted 55% of the China’s beer market and Tsingtao, Yanjing and China Resources sold 8.1 million tons of beers in 2004. It summed up 30% of the sales. At the meantime foreign brands like Budweiser and Heineken started to enter the market and making profit. Since they occupied the high-end market and that’s the most promising and profitable market in China. They targeted the middle and upper class of the consumers and pricing at 7–9 yuan a can. In contrast Tsingtao was sold around 3.3 yuan. Furthermore in many tier two and three markets local brand beers were sold at 1 yuan. At this point we could segment the beer market into two. The first segment is ‘high price with strong branding’; the other segment is ‘low price with weak branding’. The major players in the first segment were those foreign brands as they did a better job in the marketing and promotion areas. As for the second segment, mostly were the local brands since they were suffering from lack of funds and skills to compete with foreign brands.

Tsingtao’s competition Tsingtao used ‘high quality, high price’ as the company’s prime strategy. Which was proven that the strategy was working well. Its brand loyalty in the 20 surveyed cities was 12% slightly lower than Yanjing 0.1%, but beware that Tsingtao’s…...

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