Introduction
The hard seltzer trend surged in early 2018, led by White Claw, and quickly attracted major brands like Anheuser Busch's Bud Light Seltzer, Boston Beer’s Truly, and Corona Hard Seltzer With hard seltzers achieving over $100 million in sales for ten consecutive weeks, breweries are increasingly adapting their strategies to cater to a growing demographic seeking variety Many brewers initially hesitated to enter the hard seltzer market, but the positive sales outcomes indicate a beneficial shift for both consumers and local breweries, particularly as they strive to regain consumer interest in the post-COVID landscape.
Situation analysis
Company analysis
Mark Anthony Brands International, part of the Mark Anthony Group of Companies, is one of North America's largest privately-owned alcohol beverage businesses Established in Dublin in 2014 and led by Davin Nugent, the company is recognized for its distinguished portfolio of category-defining brands in ready-to-drink and premium craft spirits Located in Dublin, Ireland, Mark Anthony Brands International continues to innovate in the alcohol beverage industry.
Internal environment
Mark Anthony Group, led by Vancouverite Anthony von Mandl and known for Mike's Hard Lemonade, operates Mark Anthony Brands Inc in Chicago, IL, within the Advertising, Public Relations, and Related Services industry The company employs 210 individuals and generates $101.03 million in sales White Claw, a prominent player in the hard seltzer market, consistently ranks among the top brands in the U.S With effective marketing strategies, White Claw has successfully penetrated international markets, now available in countries such as Austria, Belgium, Finland, Germany, Switzerland, and Sweden.
External environment
Chinese culture emphasizes group connections, particularly in drinking traditions where the company matters more than the beverage itself, reflecting a collectivistic mindset In contrast, Westerners prioritize the taste of drinks, valuing individual preferences and experiences, with wine-tasting often considered a cherished activity in their lives.
Chinese culture emphasizes deep friendships, viewing friends as individuals to whom one feels a strong sense of obligation, often leading to mutual favors In contrast, Americans may appear sociable but are perceived as harder to connect with on a deeper level This cultural distinction extends into the business realm, where the concept of guanxi underscores the importance of building trust and relationships before engaging in business transactions Socializing among colleagues is common in China, often involving extravagant entertainment, whereas Americans typically maintain a clear separation between their professional and personal lives.
The "Market Prospects and Status Quo Analysis of Low-alcohol Drink Industry 2020" by Academia Sinica reveals that China's fruit wine industry reached a market size of around 231.5 billion yuan (approximately US$36.28 billion) in 2019 While this figure represents a modest portion of the overall beverage sector, the industry has experienced impressive growth, increasing by over 50% year-over-year.
The low alcohol beverage market, including Hard Soda and Hard Seltzer, is a niche compared to traditional wine and beer, yet it shows significant growth potential to meet consumer demands According to a 2020 analysis by the China Research Institute, the domestic fruit wine industry reached a market size of approximately 231.5 billion yuan in 2019 Over the past two years, China's low alcohol market has expanded by more than 50%, with low alcohol beverages experiencing a remarkable growth rate exceeding 80%.
The market potential for Hard Seltzer products
According to Grand View Research, China presents significant growth potential in the hard seltzer market, which is still in its early stages As a sub-category of low-alcohol beverages, hard seltzer appeals to the younger generation seeking a "lighter" lifestyle due to its low-sugar, fat-free, and low-alcohol content This aligns with the rising consumer trend towards healthier drinking options, leading to increased popularity and consumption among individuals in China.
The bilateral economic relationship between the U.S and China, despite expanding commercial ties, has become increasingly complex and tense U.S trade tensions are largely attributed to China's incomplete transition to a free-market economy Although China has liberalized its economic and trade policies over the past thirty years, it still enforces several state-directed policies that distort trade and investment flows.
The Trump Administration aims to aggressively reduce U.S trade deficits and enforce trade laws, promoting "free and fair trade," particularly with China These escalating actions may severely impact U.S.-China commercial relations, disrupt global supply chains, increase import prices for American consumers and businesses relying on Chinese goods, and ultimately hinder economic growth both in the U.S and globally.
Customer environment
Current customer: Young people in China, many of them are women and have high and have high disposable income
Potential customer: In the future, we hope that among young to middle-aged
(21 to 44) from affluent areas and it appeals to both genders equally
Young people in China, particularly women, are increasingly focused on health and wellness while staying trendy They seek healthier alternatives to traditional alcoholic beverages like beer, favoring options such as hard seltzers that allow them to enjoy social gatherings without compromising their lifestyle choices.
The expanding healthcare market indicates a significant shift, as consumers increasingly prioritize their lifestyles and take charge of their health Regardless of age or gender, individuals are more engaged than ever in maintaining a healthy lifestyle.
These products are anticipated to become popular among individuals who enjoy alcoholic beverages but wish to limit their carbohydrate and calorie consumption For young consumers, opting for lower alcohol intake is a significant decision.
- Hard Seltzer is a lower-calorie alternative to many other sweet-flavored drinks This makes them a great beverage option for those who prefer low- carb
- Customers may be like the taste of high alcohol wines
- They are not aware of health issues but how many calories or how much sugar is ingested can be when enjoying heavy beers or alcohol
- Customers enjoy Hard seltzer at parties and even meals at home
Pre-mixed and canned drinks offer unparalleled convenience, making them ideal for parties, festivals, and beach outings They eliminate the need to carry heavy bottles of vodka and bulky glass mixers, allowing you to enjoy your favorite spirits straight from the can without the hassle of bringing glasses.
- During this COVID-crisis, the demand for drinks ‘on the go’ has rapidly increased Consumers are looking for drinks that are easy to get, prepare and consume
5 Where - In restaurants, shops near your home, supermarkets, etc
6 When - When they need a low alcohol drink for parties or festivals
Entry mode
White Claw can utilize a market-development strategy based on Ansoff’s product-market expansion matrix as it seeks to introduce its existing product in the Chinese market By entering China’s hard seltzer market through a joint venture (JV) with a local partner, White Claw can leverage the partner's insights into local culture and consumer preferences, facilitating a smoother market entry This collaboration allows for shared profits and losses, but effective communication and management are essential to prevent potential conflicts in the future.
Analysis of the Internal Environment
White Claw Business model
White Claw generates revenue by selling its products through distributors to retail stores, employing a neutral branding strategy with its name and wave logo that appeals to a broad audience This unique positioning has encouraged social media content creators to produce memes and videos, resulting in organic marketing that effectively targets potential customers.
Assessment of a firm’s resources
China Resources Beer, a state-owned major beverage producer and a key subsidiary of China Resources (Holdings), is set to introduce White Claw to the Chinese market Renowned for its "Snow" beer, which captures approximately 20% of the Chinese beer market, the company boasts a robust distribution network across all channels in China Additionally, Drinks and More has already demonstrated success with various other brands, further enhancing the potential for White Claw's success in the region.
Review of a firm’s current international marketing mix
3.3.1 Appealing to its fans’ tastes
Listening to customer preferences is crucial for success White Claw leveraged feedback from its online community, selecting new flavors based on 70,000 social media requests Engaging with fans and acknowledging their input can significantly impact brand loyalty This approach has fueled positive word of mouth, which serves as a powerful marketing tool for White Claw.
White Claw’s remarkable success is largely due to the viral social media marketing it garnered in the summer of 2019, following a comedic skit by Trevor Wallace This led to an explosion of memes that boosted the drink's popularity, particularly among the college "bro" demographic Phrases like “Claw is the Law” further solidified its appeal, ultimately resulting in a nationwide shortage of the beverage.
White Claw receives 171,000,000 search volumes in Google, 12 times the search volume of
SpikedSeltzer and hard seltzer are highly searched terms, with 307,000 and 13,400,000 results respectively The brand excels in market insight and demonstrates a strong commitment to investing resources into their core strengths.
3.3.4 Assessment of the image of the White Claw
Although the product has not been available in China until now, it has firmly established itself as a global market leader in its category, becoming a significant part of popular culture Its alignment with the company's beverage lineup makes it a "natural fit," catering to the growing demand for low-calorie and low-sugar options.
Analysis of the External Environment
Macro-environment
The PESTLE technique is essential for evaluating the external environment of an organization By analyzing political, economic, social, technological, legal, and environmental factors, businesses can gain a comprehensive understanding of their market landscape, identifying potential risks and opportunities for growth.
The political landscape in China remains stable, with the Chinese Communist Party (CCP) maintaining its stronghold on power In 2020, the government intensified its political rhetoric and control, both domestically and in foreign affairs As weak global demand and strained international relations persist, there are growing calls for economic self-sufficiency, highlighting the significance of the domestic market (Zhang, 2020) In response to the economic impact of the COVID-19 pandemic, both central and local governments in China have implemented various supportive measures aimed at boosting business confidence, reducing compliance burdens, and ensuring the availability of medical supplies and daily essentials.
China has established an administrative licensing system for imported low-alcohol products, enhancing regulatory oversight Additionally, China actively engages in international trade collaborations with prominent organizations like the WTO, EFTA, and the EU Currently, China ranks as the EU's second-largest trading partner, following the United States, while the EU holds the position of China's largest trading partner This dynamic has fostered a robust and positive momentum in the Sino-EU economic and trade relationship.
China is the world's second-largest economy in terms of nominal GDP, with rising consumer buying power According to FocusEconomics (2021), the panel foresees GDP expanding 5.2% in
Between 2016 and 2021, China's Gross National Income (GNI) rose significantly from $12,930 to $17,200, as reported by The World Bank Additionally, consumer price inflation is projected to average 1.6% in 2021 and increase to 2.3% in 2022, according to Focus Economics.
Figure 1: GNI per capita - China
China has surpassed the USA as the leading destination for new foreign direct investment (FDI) globally The country's rapid urbanization is contributing to a more consumer-friendly economy, which is attracting an increasing number of global companies to invest in China.
China, with a population exceeding 1.4 billion, is the most populated country in the world (World Meters, 2021) The nation's societal trends are significantly shaped by its rich social and cultural values As noted by the Global Religious Future (2021), China exhibits a diverse religious landscape, with 21.9% adhering to Folk Religion, 18.3% practicing Buddhism, and 5.2% identifying as Christians, among others This blend of tradition and modernity suggests that social factors in China are highly conducive to the introduction of products like White Claw hard seltzer.
The swift rise of online shopping has significantly transformed the lives of Chinese consumers Increasingly, individuals prefer the convenience of online purchases, leading to a record high in 2019 where over 20 percent of total retail sales were conducted online With the rapid expansion of internet access throughout China, the penetration rate of online shopping has soared to nearly 80 percent.
China ranks among the top ten most polluted countries globally, prompting many companies to invest significantly in compliance with environmental regulations Consequently, prioritizing the elimination of harmful environmental systems is crucial for China’s sustainable future.
Micro Environment
Porter’s five forces model provides valuable insights into the attractiveness of the hard seltzer industry in China According to Table 1, the competitive dynamics within this sector are characterized by rapid growth, indicating a vibrant market landscape As a result, the hard seltzer industry is deemed appealing, with expectations of sustained expansion in the coming years.
Table 1: Porter’s five forces model
The threat of new entrants
- The Chinese Government's regulations on product brand approval are still complicated, value-added tax and consumption are still very high (accounting for about 50% of total import costs)
- Finding a reliable manufacturer partner and building a distribution channel is very expensive
The threat of substitute products
- Alcoholic beverages are all interchangeable, especially in the Chinese market
- The cost of switching between different products is very low
- The bargaining power of suppliers is very high due to the competitiveness of the industry
- High switching costs because of the difference in the quality of the supply for the product
- The influence of buyers is high due to fierce competition between distributors and brands, forcing them to reduce costs
- The level of competition among competitors is very high, increasing volatility and fierce competition
- Consumers are not easily loyal to the brand
Table 2: White Claw's direct competitors
Brand RIO BLUE HOUR TOPO CHICO ZEYA
Formed in 2003 by Shanghai Bacchus Limited Company which is an arm of the Australian - based Bacchus Distillery
BlueHour is a hard seltzer brand founded in 2020
Aiming to create a casual, burden-free drinking life for young people
The Coca-Cola Company launched Topo Chico Hard Seltzer in China in June 2021
The brand was introduced in Latin America and Europe before entering the Chinese market
2020, the Shanghai company first introduced six hard seltzer products in China Then ZEYA re- launched with four flavors following the customers
Volume 5%vol, 330mL, 3%vol, 330mL, 4.7%vol, 330ml 4.5%vol, 84 calories,
Flavor green apple flavor, green orange flavor, strawberry flavor
Lemon Flavor, Grape Flavor, Hearts, Peach Flavor lemon and lime, strawberry and guava, and colorful pineapple grapefruit, cucumber, white peach, passion fruit
Price 79 Yuan/ 9 cans 78 Yuan/6 cans 77 Yuan/6 cans 121 Yuan/ 6 can
White Claw faces direct competition from brands like Topo Chico, Blue Hour, Rio, and Zeya, while in China, smaller independent companies are entering the hard seltzer market, with Anheuser-Busch InBev as a notable exception Many of these companies are still in the testing phase, as consumer preferences for hard seltzer in China remain uncertain Additionally, White Claw contends with indirect competition from popular beverages such as Coca-Cola, Kang Shifu, Wahaha, Gong Cha, Royaltea, Qingling of Tsingtao Beer, Weipao of Jianlibao, and Yiran Milk Mineral from Yili, a major Chinese dairy company.
SWOT Analysis
- Have experience in penetrating the right market at the right time
- Was born very early and was the first Hard
Seltzer brand to become a household name when integrating into the lives of consumers
White Claw is well known in the hard seltzer market
The company actively engages with its audience on social media, adapting to their changing preferences and habits By connecting with consumers on a personal level, including their literal taste buds, the brand successfully launched three new flavors last year, inspired by insights gathered from its online followers.
- Will face many obstacles when attacking the Asia market - a completely new market
- Not have as much experience in the next contact with the multiform text as in China
- Zoning and site selection processes are more cumbersome and time-consuming than those used by domestic competitors
- It may be difficult to compete with local Hard Seltzer brands like ZEYA, RIO
- China is the world's second-largest economy in terms of nominal GDP, with consumer purchasing power growing
China's low labor costs and improved infrastructure make it an attractive destination for foreign direct investment (FDI), significantly reducing staffing expenses for companies.
- China has the largest online population in the world (Statista, 2021) Baidu, Alibaba, and
Tencent are just a few of the country's tech giants The largest and fastest-growing e- commerce market in the world
China's intricate political, legal, and socio-cultural landscape necessitates tailored advertising and marketing strategies for effective engagement in its market.
- Chinese consumers generally prefer buying local brands over foreign competitors in most sectors including food and beverages
- Hard seltzer is not yet popular in China, so it will cost the company to educate consumers in this market
Target Market Description
Segment Strategy
Market segmentation is a natural progression in the evolution of mature markets, focusing on consumer perspectives This process involves dividing the overall market for a specific product into distinct groups of consumers, with each group representing a unique market segment.
Tsingtao beer effectively utilizes regional segmentation to cater to diverse consumer preferences across China, where the average annual income is $17,200 and the price of fast-moving consumer goods is relatively low, ranging from 2–10 yuan (0.30–1.50 USD) Despite similar purchasing power nationwide, distinct regional tastes emerge due to varying eating habits For instance, consumers in northern China prefer robust, full-bodied beers, while those in Jiangsu, Shanghai, and southern regions favor milder flavors Additionally, coastal areas like Guangdong and Fujian lean towards beers with strong alcohol content and a bitter, acidic taste By tailoring its products to these regional preferences, Tsingtao beer successfully meets the diverse needs of its consumers.
The company utilizes vertical segmentation based on age, recognizing that different age groups have distinct preferences and demands Young consumers tend to favor light beers for social gatherings, allowing them to enjoy themselves without the concern of intoxication In contrast, middle-aged individuals often prefer stronger beers for business negotiations or family gatherings Furthermore, age correlates with income levels, indicating that consumption ability typically increases with age Consequently, the market can be effectively divided into high-end and mid-low segments, catering to the varying needs of these demographics.
Targeting Strategy
White Claw targets young consumers aged 18-24, particularly from the Z-generation, who are eager to explore new experiences and prioritize health and body management This demographic predominantly resides in major cities, where the demand for imported hard seltzers is highest In Shanghai, for instance, residents exhibit a strong appreciation for alcoholic beverages and are open to trying new beer brands, supported by their higher disposable income for nightlife Additionally, the logistics of importing White Claw are more efficient in large urban areas, facilitating regular shipments.
Positioning Strategy
The rise of Hard Seltzer has led to increased popularity among brands, particularly in the promising Chinese market Notable names in this trend include Topo Chico, RIO, ZEYA, and Blue Hour, showcasing the growing appeal of Hard Seltzer beverages.
To attract our target customer segment, we will strategically price our products lower than competing brands White Claw's strengths lie in its international quality and diverse designs, setting us apart from higher-priced brands that offer inferior quality.
White Claw Hard Seltzer is well-positioned to compete with established brands in the Chinese market by leveraging its strong brand image, messaging, and values that resonate with young consumers' growing emphasis on holistic health and lifestyle trends.
Figure 2: Conceptual map for hard seltzer markets
"We create a zero-pressure world by empowering people to unwind and have fun their way
With a sugar-free blend of soda water, gluten-free alcohol, and unique flavors, White Claw Hard
Seltzer is a great tasting, zero pressure drink you'll feel good about drinking!"
International Marketing Goals and Objectives
Our marketing objective is to increase brand awareness, sales volume, and market share of White Claw hard seltzer in China
In the first year, our marketing goal is to sell 50,000 cans of White Claw and reach 30 percent brand awareness Despite the brand's popularity in Europe and among young consumers, many Chinese customers remain unfamiliar with hard seltzers, which may hinder initial sales performance.
In the next six months, our marketing goal is to sell 600,000 cans of White Claw, targeting profit margins of 5 to 8 percent As we establish a foundational brand image, we anticipate growing recognition among young consumers in Shanghai, leading to an increase in regular customers over the following year Furthermore, our strategic marketing efforts will play a crucial role in boosting sales volume.
Over the next five years, our marketing goal is to sell 4,000,000 cans and capture 10 percent of China's hard seltzer market To achieve this, we will leverage increased sales volume in the first two years to expand our distribution channels For instance, the Chinese agent for White Claw will work to secure more retailers in Shanghai to stock our hard seltzers, thereby supporting our long-term objectives.
Marketing Program
Product Strategy
White Claw offers a diverse range of beverages, including White Claw Hard Seltzer Surge, White Claw Hard Seltzer Iced Tea, the White Claw Variety Flavor Collection, and the classic White Claw Hard Seltzer Each product line showcases unique flavors and options for consumers seeking refreshing alcoholic beverages.
Figure 3: Product line and mix of White Claw
The White Claw Variety Flavor Collection stands out as the only packaged line, while all other offerings are designed for bulk purchases to meet customer needs Each product features unique packaging that highlights its characteristics, with a shared commitment to environmental sustainability through the use of paper materials This eco-friendly approach allows customers to easily select their preferred products from the same or different lines Additionally, the trendy packaging includes portable, recyclable cans adorned with Instagram-friendly designs set against a clean white background, enhancing the overall appeal for White Claw consumers.
Figure 4: Packaging of White Claw in China
Exporting to the Chinese market requires compliance with strict labeling regulations As outlined in the Food Labeling Standards of China (GB7718-2011), imported products such as White Claw must feature clear labels that specify the country of origin, along with the name and address of the registered general distributor within China.
To obtain the CCC mark for White Claw, an application must be submitted to authorized Chinese certification bodies Currently, six foreign testing organizations are approved to assess specific product categories against CCC mark GB standards This application process can take several months and may incur fees exceeding $4,500, along with additional travel costs for inspectors.
A useful tool for conceptualizing the various strategies is the market/product matrix As shown, the matrix is divided into four possibilities: Market Penetration, Product Development, Market Development, and Diversification
Table 4: Ansoff’s product market expansion matrix
Existing Market Penetration Market Development
White Claw Hard Seltzer is currently best positioned for a market development strategy, leveraging its successful track record in markets like the US to explore new opportunities for growth, particularly in emerging markets such as China.
The hard seltzer market, particularly with brands like White Claw, is still relatively unknown to consumers in emerging markets such as China As the hard seltzer industry continues to grow, it faces challenges in gaining recognition among alcoholic beverage options.
White Claw must prioritize promoting its brand identity among Gen Z and millennials in the Chinese market To effectively connect with young consumers, the brand should stay updated on their trends and lifestyles Leveraging China's advanced technology and social media landscape, White Claw can enhance its image, mission, and competitive values, ensuring they resonate with customers over time It's essential for the brand to address any weaknesses or misconceptions that may arise during the identity-building process Since White Claw's brand identity is globally consistent and rarely changes, establishing strong brand awareness through simple recognition is crucial for achieving marketing success in international markets.
Brand image significantly influences sales, and White Claw aims to resonate with potential customers by embodying values of freedom, rebellion, self-expression, and creativity.
Establishing White Claw as a trusted brand among Chinese consumers poses a significant challenge, particularly as brand loyalty declines among Gen Z and a substantial portion of millennials, influenced by trends and online shopping driven by celebrities and key opinion leaders (KOLs) To combat this, White Claw is not only enhancing product quality but also fostering customer sympathy, trust, and interest through targeted loyalty programs Given the saturated market across various industries in China, it is essential for White Claw to differentiate itself by emphasizing its unique values and services to capture consumer attention.
To meet the growing demand for foreign products among Chinese consumers, product standardization presents significant advantages, including reduced production costs, time savings, increased sales volume, and improved inventory management However, for White Claw to remain competitive in the alcoholic beverage market and avoid losing its foothold, it is crucial to adapt its strategies effectively.
To successfully penetrate the Chinese market, White Claw should adopt a contingency approach that combines standardization and adaptation Chinese consumers are drawn to products that showcase a unique style while aligning with their cultural values Given that Hard Seltzer is a nondurable commodity, an adaptive strategy will be more effective in catering to the diverse tastes of customers in China.
To cater to the distinct preferences of Chinese consumers, White Claw must prioritize product innovation, which is essential for capturing customer interest By expanding its flavor offerings, White Claw can not only differentiate itself from competitors but also address specific taste gaps within its product line It is common for multinational companies to tailor their product lines to suit the unique demands of each market.
Pricing Strategy
Pricing is a crucial factor in how an organization positions its products in the market An effective pricing strategy is essential for reaching various customer segments and maximizing market impact.
Customer value plays a significant role in shaping pricing strategies in China, where perceived value can greatly influence consumer behavior In this market, prices often carry deeper meanings; for instance, the number 8 (bā) is particularly favored due to its phonetic similarity to the word for 'fortune' or 'wealth' (fā), highlighting the cultural importance of numerology in pricing decisions.
- Generate interest around new products
Penetration pricing is a strategic approach employed to enter the Hard Seltzer markets in China, aiming to attract customers and increase market share This pricing strategy focuses on initially setting lower prices to build a customer base, with the intention of raising prices once the desired market presence is achieved Although penetration pricing may not yield immediate profits, its careful implementation is essential for long-term success in a competitive landscape.
Brand RIO BLUE HOUR TOPO CHICO ZEYA
Price 79 Yuan/ 9 cans 78 Yuan/6 cans 77 Yuan/6 cans 121 Yuan/ 6 cans
Our market research indicates that the price range for competitors' mustards is CNY 77 to CNY
White Claw is entering the competitive hard seltzer market by implementing a penetration pricing strategy To attract customers, we are offering a pack of six for an introductory price of CNY 76 during the first year This approach aims to encourage initial purchases and establish a foothold in a market already saturated with options.
We are pricing our six-pack at $78, which not only covers our production costs but also positions our White Claw as a competitively priced option compared to higher-priced hard seltzers This strategic pricing aims to attract customers and encourage purchases To ensure long-term success, it is crucial to quickly foster customer loyalty and build strong relationships before considering any price increases.
In the sales cycle of beer, various prices and markups are applied at each stage The Price to Wholesaler (PTW) refers to the cost set by the brewery for the wholesaler, while the Price to Retailer (PTR) is the amount the wholesaler charges the retailer Finally, the Price to Consumer (PTC) is the retail price displayed on store shelves, representing what consumers pay for the beer.
PTC = 76 CNY for a six-pack
Prices work in the China market
The price of the White Claw hard seltzer on the shelf at the retail account is 67 CNY for a six- pack
White Claw sells a case of beer (24 cans) to wholesalers for 149 CNY To achieve a 30% profit margin, wholesalers sell the beer to retailers at a price of 213 CNY.
The math: 213 CNY minus 149 CNY = 64 CNY Margin for the wholesaler 64 CNY divided by 213 CYN = 30.05% Margin percentage
To achieve a 30% profit margin on beer sold in six packs, the retailer sets the price at 76 CNY per six-pack.
The math: 4 six-packs times 76 CNY = 304 CNY total sales to consumers for the case of beer
304 CNY minus 213 CNY cost of hard seltzers = 91 CNY margin 91 CNY margin divided by 304 CNY sales price = 29.9% margin percentage
White Claw is implementing price discounts and bonus pack promotions across official stores, retail outlets, and e-commerce platforms to accelerate customer reach and enhance brand awareness as it enters the Chinese market.
Quantity discount: The price per unit declines as the volume of purchase rises
Channel discount: Promotion for flash sale program and freeship for each cart during the Tet holiday.
Place: Distribution Strategy
Strategic distribution intensity is influenced by price, quality, and competition, and these factors remain relevant in international markets, where local infrastructure and legal restrictions on imports also play a role In China, White Claw employs an intensive distribution strategy, prioritizing widespread availability of its low-priced products, which retailers can sell in high volumes.
White Claw primarily utilizes an indirect distribution channel, where beer moves from the producer to distribution intermediaries before reaching consumers Collaborating with distributors is considered a straightforward approach to entering the Chinese market However, White Claw faces challenges in evaluating the actual capabilities of potential distributors and determining their fit as partners in China.
Wholesalers play a crucial role in the marketing landscape by offering essential services such as dispute resolution and financial support for retailers facing cash flow challenges In China, they are an integral part of a company's sales channels and must be effectively integrated into overall marketing strategies to enhance business success.
Gen Z consumers in China prefer omnichannel shopping experiences, prompting White Claw to distribute hard seltzers through both on-trade and off-trade channels Clubs and bars are effective venues for reaching younger audiences, with approximately 50% of 18-24-year-olds and nearly 20% of 25-34-year-olds favoring these locations for trying new alcoholic beverages To enhance brand awareness, we will launch hard seltzers at popular establishments such as The Camel, The Rooster, Zapfler, and Grand Yard in China.
In the coming years, White Claw plans to shift to a direct-to-consumer (D2C) model, primarily utilizing its WeChat official store, which currently generates around 70% of its sales The remaining 30% comes from on-trade channels In its initial year of this transition, White Claw aims to enhance its e-commerce footprint and penetrate off-trade markets, particularly targeting supermarkets and grocery stores.
White Claw employs a combination of push and pull marketing strategies to enhance its market presence Push strategies, such as discounts and training programs, encourage wholesalers and retailers to increase their orders, effectively moving the product through the distribution channel In contrast, pull strategies focus on boosting consumer demand through extensive advertising and promotions, prompting retailers to stock more White Claw hard seltzers in response to customer requests This dual approach ensures that White Claw remains a sought-after product in the market.
The second strategic choice is whether to use traditional intermediaries or create an in-house distribution channel White Claw uses vertical marketing systems and international strategic alliances
A vertical marketing system integrates producers, wholesalers, and retailers into a cohesive distribution framework, enhancing marketing efficiency White Claw leverages international strategic alliances to optimize product delivery, particularly as companies seek lasting partnerships with global channel members Notably, White Claw is joining forces with China Resources Beer (Holdings) Company Limited to strengthen its presence in China's competitive hard seltzer market.
White Claw has established an exclusive distribution agreement with COFCO, a leading food and beverage giant in China, to distribute its hard seltzer in the Chinese market COFCO relies on C & D logistics for the majority of its imports into China, ensuring efficient supply chain management for the brand's offerings.
Promotion: Integrated Marketing Communications Strategy
- Create brand and product awareness, 30% increase in brand awareness, and 25% product awareness
- Build or improve a brand’s image
- Increase sales/market share achieved 3,900,000 sales, and 10% market share of low alcoholic beverages in China.
Hard Seltzer drinks are relatively unknown in the Chinese market, prompting us to educate our customers about this unique beverage By offering detailed information, we help consumers differentiate Hard Seltzer from other low-alcohol options, enhancing their understanding and appreciation of this refreshing drink.
Our target customers are individuals over the legal purchasing age (LPA) for alcohol, which is 18 years and older in China Our products cater to all adults, regardless of gender, as we emphasize health benefits for everyone We prioritize responsible marketing, which is essential for our company's reputation and brand integrity Through our Responsible Alcohol Marketing Policy, we strive to uphold these values and ensure ethical practices in our marketing efforts.
23 our marketing does not target or appeal to people under the LPA (ii) Tend to responsible consumption
White Claw embraces inclusivity, promoting a wellness culture that encourages holistic health and lifestyles among young consumers of all genders It fosters enjoyable experiences with family and friends, ensuring that everyone can partake in the fun.
Our promotional strategy will leverage an optimized Integrated Marketing Communication (IMC) model to identify the most effective communication activities for each promotional objective An IMC program can simultaneously achieve multiple objectives, provided it maintains clarity for the target audience.
To enhance communication strategies, we will prioritize social media over traditional advertising, as relying heavily on paid media poses significant risks for White Claw The brand's "White Claw is for everyone, not just anyone" approach focuses on preserving its unique qualities, which will be most effectively promoted through word-of-mouth on social platforms, leveraging buzz marketing By creating engaging content, White Claw aims to disrupt conventional beer advertising and connect with consumers in both digital and real-world environments.
8.4.3 Promotional Mix and IMC Tools
As traditional advertising channels like print and broadcasting decline, outdoor and online advertising are rapidly expanding, driven by increased mobile access and higher internet penetration across the country.
Figure 5: Change in advertising expenditure in China from 2012 to 2019 with forecasts until 2021
We will refrain from advertising in any media, including programming and print, when over 20% of the audience falls below the Legal Purchasing Age (LPA) Additionally, we will avoid placing billboards, mail signs, kiosks, and other outdoor permanent advertisements within 200 meters of primary or secondary schools.
We opted for an external advertising agency to navigate the complexities of the Asian market, particularly in China, where diverse cultures present unique challenges By selecting a local agency, we aim to enhance communication effectiveness and reduce risks associated with our advertising strategy This approach allows us to either execute a comprehensive advertising program or collaborate with specialized boutique agencies for specific tasks.
To optimize e-commerce strategies, conducting thorough market research is essential, particularly focusing on the effectiveness of social media channels Target customers show a preference for platforms like Weibo and WeChat, which significantly influence their behavior on e-commerce sites such as TMall and Baidu Key metrics to analyze include website visits, search patterns, and product purchases, all of which provide valuable insights into consumer preferences and trends.
- Writing copy: Write content on the official website such as introducing information about the company and products In addition, promotional posts are running on social media, and minigame contests
- Printing the commercial or advertisement: Design billboards, kiosks, mall signs, or posters on the street to increase awareness
We have chosen to partner exclusively with Topkee Media for White Claw's advertising efforts due to their expertise in digital technology and effective social media monitoring Their comprehensive network marketing services align perfectly with White Claw's advertising strategy in the Chinese market, facilitating our successful market entry.
This guide outlines the essential components of the advertising process, including objectives, budget, key messaging, target audience, relevant legislation, and media requirements for ad campaigns The brief serves as a crucial link between White Claw and Topkee Media, facilitating the progression of White Claw's advertising initiatives.
International advertisements utilize a pulsating format, with a focus on running ads consistently throughout the year, particularly during major holidays This approach will be assessed based on two key areas: attitudinal effects and behavioral effects.
Developing the desired perception of position, brand loyalty, and brand equity normally takes more time, especially when a company enters China
We emphasize a Buzz marketing strategy on social media by utilizing viral hashtags, incorporating testimonials from past attendees, and adding social media buttons for easy registration sharing Positive word of mouth has significantly benefited brands like White Claw In 2019, social media ad revenue in China surged to 65 billion yuan, up from 51 billion yuan the previous year The leading social media platforms in China include WeChat, Qzone, and Sina Weibo, alongside emerging networks such as RED, Douyin (the Chinese version of TikTok), and QQ by Tencent.
In the summer of 2019, Trevor Wallace's viral video popularized the phrase “ain’t no laws when you’re drinking Claws,” effectively challenging traditional gender stereotypes associated with alcoholic beverages This catchy slogan propelled the brand to become the unofficial party drink of Americans, generating significant online buzz and establishing a new cultural phenomenon around its consumption.
Create a Quality Chinese Website for the China Market
We are redesigning our official website to align with Chinese culture, enhancing the user experience To comply with local regulations, users must be at least 18 years old to access White Claw's website in China We will implement advanced technologies, including an age confirmation mechanism, to ensure users meet the legal age requirement Those under the legal purchasing age will be restricted from access and redirected to a site promoting responsible consumption.
With the Push strategy, the company will promote a product to intermediaries, giving them many incentives to store goods and efforts to promote and sell products to consumers
Legal issues in consumer promotions
EVALUATION, MEASUREMENT, AND CONTROL
Action plan
White Claw intends to start running ads in early January and officially launch in mid-January (scheduled for January 15, 2022)
From January 1 to January 15, implement high-intensity advertising campaigns on WeChat and Weibo, while leveraging media platforms like Chinadaily, nbd.com.cn, and sohu.com to enhance brand visibility for White Claw This strategy aims to generate a significant buzz in the imported beverage market by educating Chinese consumers about hard seltzers and highlighting their differences from traditional alcoholic beverages.
On January 15, 2022, White Claw launched its first official store in Shanghai, featuring enticing promotions like "10% off when purchasing 1 carton of 24 cans" and "buy six packs, get 1 can free." To effectively engage its target audience, the brand is concentrating its advertising efforts on popular platforms such as WeChat, Sina, and Weibo.
In early February, during the New Year period, we are running promotions on major e-commerce platforms such as Tmall, Pinduoduo, Alibaba, and Taobao to boost sales of White Claw hard seltzer Customers can enjoy competitive prices and free home delivery when purchasing products from the Package line To further attract customers, we are offering hourly flash sales, a 5% discount on purchases, and complimentary shipping on all carts.
Leverage prominent fitness and nutrition influencers on Weibo and WeChat to effectively promote your brand, highlighting its features, mission, and vision Notable figures on Weibo include the Global Fitness Center, Body Master, and Nutritionist Gu Zhongyi, while WeChat showcases Practicing Yoga and Global Fitness Engaging these key opinion leaders can enhance brand visibility and credibility within the health and wellness community.
指南 (roughly translated: Global Fitness Guide), 爱健身 (roughly translated: Love Fitness) Continue to run ads on e-commerce platforms
White Claw is hosting an exciting sweepstakes on its official Weibo account, offering a chance to win a box of the Variety Flavor Collection, which includes 24 packs To participate, players must use the hashtags #hardseltzer, #whiteclaw, and #WhiteClaw 适合所有人 on their personal accounts, take a screenshot, and comment with their lucky number on White Claw's post Don't miss this opportunity to enjoy refreshing flavors with White Claw!
The Strawberry Music Festival, held annually in May in China, draws thousands of young attendees To maximize visibility, strategic advertising will include billboards at bus stops and subway stations for three months leading up to the event, alongside ongoing promotions on e-commerce platforms.
Leverage the KOC effect to enhance the perceived authenticity of your product's effectiveness, as consumers often make self-determined purchases that foster trust among their followers Drive engagement on Baidu Tieba by incentivizing users to comment and rate White Claw products with appealing coupons, creating a buzz around the brand.
We implement a quota system for intermediary stores and exclusive White Claw suppliers to enhance sales and accelerate inventory turnover Intermediaries that achieve their targets swiftly will benefit from increased discounts, and White Claw will offer competitive pricing to support these suppliers in gaining a market advantage.
White Claw participates in several tradeshows held in Shanghai and Beijing areas Trade shows that White Claw will participate in:
- In Shanghai, including 3 programs: ILTM CHINA, FBIE - Food and Beverage, China Licensing Expo
- In Beijing, including 1 program: AIFE - Asia International import food exposition, FMA - China
Celebrate Christmas with our exciting "Lucky Wheel" sweepstakes at the official store, featuring fantastic prizes including cash rewards, White Claw products, and exclusive coupons To participate, simply present your purchase receipt from xxx Additionally, look out for White Claw posters displayed in pubs and beer shops that partner with us.
Table 6: Timeline summarizing marketing activities 2022
Time activities Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Run ads on social media
Flash sale on an e- commerce
Target sales at each retail store
Control for Implementation of Recommendations
To evaluate the effectiveness of our marketing strategies, we will implement rigorous performance controls, conducting monthly profit analyses If these analyses reveal low profits for specific products, territories, or markets, we will explore more efficient management approaches for our sales force, advertising, sales promotions, and distribution channels involving high-performing entities.
Salesforce metrics encompass the number of new and lost customers over specific periods, along with sales force costs as a percentage of total sales Delivery efficiency focuses on managing product coverage and addressing shortages while considering distribution costs, including shipping and promotional activities, relative to revenue from each channel Advertising efficiency measures the cost of advertising across different media, the percentage of the audience that notices and engages with the ads, and consumer feedback on the advertising's content and effectiveness Lastly, effective sales promotion requires monitoring the impact of each campaign on sales, specifically the percentage of sales generated through promotional offers.
To effectively manage our market strategy, we will conduct monthly customer surveys and gather consumer feedback An internal system will be established to monitor sales fluctuations and analyze the correlation between price, distribution, promotion, and sales Our company will collect and report relevant data weekly to corporate headquarters, comparing results before and after implementing various strategies This analysis will help identify the most efficient distribution channels, assess profit margins and market share, and determine the optimal investment needed for maximum results.
Conclusion 32 References a Appendix b Appendix 1: Administrative licensing system b Appendix 2: Financial paper c Break-even analysis c Expected profit c Appendix 3: Expense budget d Appendix 4: Member’s group work assessment e
White Claw's marketing strategy is to penetrate and expand market share in China's Hard
Seltzer market We opted to target people of both genders, with a focus on young people aged 18 to
The Z-generation, a key demographic for marketers, is targeted through various Integrated Marketing Communication (IMC) tools in our promotional mix to achieve specific marketing objectives For instance, White Claw collaborates with Topkee Media, an advertising agency that follows a detailed brief outlining the campaign goals.
White Claw aims to connect with consumers through targeted marketing on social networking and e-commerce platforms, especially during major Chinese holidays The brand is also set to open its first store in Shanghai, with a focus on implementing specific strategies that are closely monitored for quality control In the event of any issues, White Claw is prepared to respond quickly to resolve them The overarching goal of White Claw's marketing plan is not only to enhance profit margins in Shanghai but also to facilitate expansion throughout China.
Caroline, G (2021, August 13) Most polluted countries in the world: 2021 ranking Selectra https://climate.selectra.com/en/carbon-footprint/most-polluting-countries/
ChinTell Limited (2021, June 11) A new fizz Week In China https://www.weekinchina.com
FocusEconomics (n.d.) China Economic Outlook FocusEconomics | Economic Forecasts from the
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Greg, A (2020, August 8) Hard Seltzers, are they here to stay? [Blog] Untappd https://untappd.com/blog/hard-seltzers-are-they-here-to-stay/1133
International Trade Administration (n.d.) China - Labeling/Marking Requirements International
Trade Administration | Trade.Gov Retrieved August 22, 2021, from https://www.trade.gov/knowledge-product/china-labelingmarking-requirements
Mark Anthony Group (2020, June 20) Mark Anthony Group [Post] Linkedin https://www.linkedin.com/company/mark-anthony-group/
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Center’s Religion & Public Life Project Retrieved August 22, 2021, from http://www.globalreligiousfutures.org/countries/china/
Statista (2021, August 13) Change in ad revenue in China 2012–2021, by medium https://www.statista.com/statistics/
World Development Indicators database (n.d.) GNI per capita, PPP (current international $) -
China | Data The World Bank Retrieved August 22, 2021, from https://data.worldbank.org/indicator/
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To China Briefing News https://www.china-briefing.com/news/china-covid-19-policy- tracker-benefiting-business-enterprises-comprehensive-updated-list/ b
APPENDIX Appendix 1: Administrative licensing system
To import alcohol into China, exporters must partner with a local entity that possesses a valid import business license, along with personal and company customs and CIQ certificates After reaching an agreement on the terms, a contract should be signed with the Chinese import agent and subsequently registered with the General Administration of Quality Supervision (AQSIQ).
Imported beverages must adhere to China's food labeling standards, specifically for pre-packaged food and alcoholic beverages This includes the requirement for both original and translated labels in Chinese Additionally, a digital version of the Chinese label must be registered with the China Inspection and Quarantine (CIQ) during the initial import process, and only after receiving approval can the labels be printed.
When clearing customs, it is essential to present a country of origin certificate, health certificate, product ingredients list, sales approval registration document, packing list, invoice, contract, and bills of lading Providing accurate information is crucial, as any delays in customs processing can adversely impact perishable goods.
Upon receiving the necessary documents, customs will release the imported goods to the designated agent These goods must adhere to applicable standards, and after successful inspection, the CIQ will issue a commodity inspection document to customs, which is then forwarded to the agent Once this document is received, the importer can proceed to apply the required labels to the products.
Customs will impose duties and taxes before issuing a customs clearance document, allowing the importer to collect the goods and deliver them to the distributor.
The break-even analysis indicates that 9,360,000 yuan will be required in sales revenue to reach the break-even point:
Average per-unit variable cost 45,000
Fixed Costs = plan rent, cost of machinery, interest on debt
Variable Cost = plastic and ingredients to make hard seltzers, the shipping cost per unit, increased advertising costs per unit (ads in China)
Per-unit variable cost 45,000 CNY
Figure 6 Budget for promotion activities of the first year
Run ads on social media
Flash sale on an e- commerce
Target sales at each retail store