Craft Oasis Marketing Plan

Craft Oasis Presents: Emirates Choice

Marketing Plan & Presentation Produced By: Joanna Komvopoulos & Regan Sweeney

CRAFT OASIS Presents: Emirates Choice

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EXECUTIVE SUMMARY ..................................................................................................................... 3 COMPANY DESCRIPTION .................................................................................................................. 3

BACKGROUND .................................................................................................................................... 3 MISSION STATEMENT .................................................................................................................... 4 COMPANY LOGO ............................................................................................................................... 4 PRODUCT TAGLINE ......................................................................................................................... 4 PRODUCT DESCRIPTION ............................................................................................................... 4 PRODUCT SLOGAN ........................................................................................................................... 5 PRODUCT LABLE ............................................................................................................................... 5

SITUATION ANALYSIS ........................................................................................................................ 5 COUNTRY ANALYSIS ..................................................................................................................... 6 CULTURAL ANALYSIS ................................................................................................................... 7 DEMOGRAPHIC PROFILE .............................................................................................................. 8

SWOT ANALYSIS .......................................................................................................................... 8 Porters 5 Forces ..................................................................................................................................... 10

Threat of New Competition ......................................................................................................... 10 Threat of Substitute Products ...................................................................................................... 10 Bargaining Power of Buyers ........................................................................................................ 10 Bargaining Power of Suppliers ................................................................................................... 11 Intensity of Competitive Rivalry ................................................................................................ 11

OBJECTIVES ............................................................................................................................................. 11 MARKET PENETRATION STRATEGY .................................................................................. 12 PRICING MODEL .............................................................................................................................. 12

STRATEGY ................................................................................................................................................ 12 BRAND POSITIONING ................................................................................................................... 12 VALUE POSITIONING .................................................................................................................... 13

TACTICS ..................................................................................................................................................... 13 SOCIAL MEDIA .................................................................................................................................. 13 ADVERTISING/DIGITAL MEDIA ............................................................................................. 14

Company Advertisements ............................................................................................................. 14 Commercial Concepts .................................................................................................................... 14

PROMOTIONS ..................................................................................................................................... 15 Complimentary Tastings & Informative Brochures ............................................................. 15 Emirates Choice Promotional Gifts ........................................................................................... 15 Dedicated Promotional Representatives .................................................................................. 16

Total Budget ........................................................................................................................................... 16 BUSINESS CHALLENGES ...................................................................................................................... 16 CONCLUSION .......................................................................................................................................... 17 REFERENCES ........................................................................................................................................... 18


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EXECUTIVE SUMMARY Craft Oasis would like to expand its local brand internationally, by exporting its premier product, Emirates Choice, to Dubai. After careful consideration of emerging economies, Craft Oasis has chosen to export Emirates Choice to Dubai because the company feels that the particular make and flavor of its craft beer will appeal to the local consumers. Craft Oasis has taken the country’s socioeconomic, political, and cultural demographics into account in deciding how to market its product. Research indicates that there are currently no American craft beer companies distributing in Dubai; there are only few European craft beer options. Clearly, this is an opportunity for Craft Oasis to penetrate a currently unsaturated market. The ultimate goal is to thus infiltrate the market and create a new craft beer drinking culture by taking advantage of strategic partnerships with local authorities and distributers, as well as, the large tourist and expatriate population of Dubai. Craft Oasis has however anticipated some business challenges that it may face. These include gaining brand recognition in the face of strong European competitors such as Heineken and Amstel, cultivating a beer culture in a market that is culturally conservative, and facing the stringent alcohol laws of Dubai. In response to these foreseeable challenges, Craft Oasis will work to differentiate itself from its competitors through strategic marketing that will indicate the luxury, essence, and quality of American craft beer vs. mass-produced generic beer. Furthermore, the ultimate goal for Craft Oasis is to promote the Emirates Choice product so successfully that it becomes associated with luxury and stands out from the masses. This will be achieved primarily through marketing campaigns, local promotions, and social media in which the high quality of Emirates Choice will be stressed and juxtaposed against the rest of its competitors, operating under the vision that Emirates Choice is the difference between generic and luxury. This is further indicated by the product’s tagline: Emirates Choice….the difference between everyday and today.

Ultimately, Craft Oasis feels that it is ready to expand internationally and that entering the market in Dubai is a crucial first step in that process, which they anticipate, will increase sales and revenue.

COMPANY DESCRIPTION Craft Oasis, a local San Francisco brewery, has been in business since 1996. The company produces and exports specialty craft beer. Its most popular product is Emirates Choice, which has led the company’s sales.

BACKGROUND Craft Oasis has seen a relatively steading increase in sales up until 2008 when there was a sudden spike in sales, which generated $6,000,000 in revenue and $660,000 in net profits.


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Craft Oasis representatives indicate that this spike in revenue was due to successful promotion and high quality products such as Emirates Choice. Craft Oasis mainly competes for market share against international mass consumer competitors such as Amstel and Heineken but focuses on product differentiation, through quality and unique taste profiles, as it penetrates the market.

MISSION STATEMENT Craft Oasis is a deluxe brewery, which is redefining the beer market through its exportation of American luxury craft beer at a premium price. Craft Oasis focuses on creating superior products for the everyday consumer by emphasizing taste, quality, and style.

COMPANY LOGO

PRODUCT TAGLINE Craft Oasis will market Emirates Choice with the following product tagline:

Emirates Choice, the difference between every day and today!

PRODUCT DESCRIPTION Emirates Choice is a micro brewed American style lager classified as a California Common. Emirates Choice is brewed using special strains of yeast that thrive at warmer temperatures and traditional Northern Brewer hops resulting in an amber color lager with medium body and a firm grainy maltiness with toasty and caramel notes.1

1 (Beer-‐FAQ, 2007)


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PRODUCT SLOGAN Craft Oasis will market Emirates Choice with the following product slogan:

Emirates Choice…taller than the rest!

PRODUCT LABLE Craft Oasis’ premier product, Emirates Choice, scheduled to launch in Dubai in 2013 will have the following label image:

SITUATION ANALYSIS Craft Oasis has carefully taken into account the cultural, political, social, and economic differences between the United States and Dubai. Therefore, through critical country,


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cultural, and demographic analysis, Craft Oasis has identified its strengths, weaknesses, opportunities, and potential threats in launching Emirates Choice in Dubai.

COUNTRY ANALYSIS After careful country analysis it has become clear that promoting Emirates Choice in Dubai could be a profitable investment. Originally, Dubai’s economy was based on oil production, but it has diversified to include tourism, real estate, and financial services. Dubai has excellent modern infrastructure including ports and road transportation. According to the World Bank, the UAE ranked #5 on the list of countries with easy trading across borders.2 This is ideal, because it makes it much easier to conduct business with UAE domestic companies and export our product directly to them with little bureaucratic hassle and red tape. Our research indicates that on average it takes seven days to import a shipping container and only costs $635/container.3

Furthermore, United States exporting costs are approximately $1,050 per 20ft. container.4

2 (The World Bank, 2012) 3 (The World Bank, 2012) 4 (The World Bank, 2012)


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Compared to the twenty-five day average of the rest of the region, the United States only averages seven days5, which proves to be a substantial benefit and cost cut for exports, in comparison to assessments for exporting to other countries or locations.

CULTURAL ANALYSIS Cultural analysis of Dubai indicates that the country is much more conservative than the United States. This is particularly true in regards to how the country regulates alcohol consumption and public pastime. While Dubai is heavily regulated in this regard, and its Muslim population is practicing, the country also has a large percentage of expatriates and tourists who do not follow the same cultural standards. The city of Dubai is a bustling cosmopolitan city representing many different cultures. Hence, there is room to

5 (The World Bank, 2012)


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expand this market and create a drinking culture for craft beer. Craft Oasis is looking to penetrate that market and cultivate a beer drinking culture by targeting expatriates and tourists. Dubai is considered to be the #8 tourist city in the world, which further indicates the ability of Craft Oasis to cultivate this culture and promote sales of Emirates Choice.6

DEMOGRAPHIC PROFILE The country’s high GDP ($48, 500 US) indicates that there is a large amount of very disposable income and thus room for profit growth.7 Craft Oasis’ specific target market is Dubai. Dubai has a 1.7 million population and composed of an 85% expatriate population. This expatriate population is composed of people form countries all over the world. Recent statistics indicate that the population in Dubai is composed of 85% Asian, chiefly Indian at 51%, and Pakistani at 16%.8 These are all countries in which drinking is heavily regulated or simply not allowed. Hence, in Dubai, this population is more likely to consume alcohol now that they are free from stringent regulations.9

SWOT ANALYSIS Through careful SWOT Analysis, Craft Oasis has identified the strengths, weaknesses, opportunities, and threats of its marketing plan to export the company’s premier craft beer, Emirates Choice, in Dubai.

6 (Weiner, 2012) 7 (Central Intelligence Agency, 2012) 8 (MPI Data Hub, 2005) 9 (Central Intelligence Agency, 2012)


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Strengths According to the SWOT Analysis, Craft Oasis’ strengths in marketing Emirates Choice include that the company is exporting a quality beer product which is focused on taste and luxury, Craft Oasis is cultivating a partnership with MMI, a prominent distributer in Dubai, there is a full time commitment of company resource which is backing this promotion, and the Oasis Craft brand is established and recognized throughout the United States.

Weaknesses According to the SWOT Analysis, Craft Oasis’ weakness in marketing Emirates Choice include the lack of brand recognition in the United Arab Emirates, there is a moderate marketing budget, especially in comparison with international competitor giants. Furthermore, Craft Oasis’ strong reliance on local partnerships and the company’s small production facility are identified weaknesses.

Opportunities According to the SWOT Analysis, Craft Oasis’ opportunities in marketing Emirates Choice include the fact that Emirates Choice will have immediate recognition because it will be the only American craft beer in the UAE. Further opportunities include: Dubai


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consumers’ high personal income and thirst for luxury goods, the large number of expatriates with competitive salaries, the country’s low barriers on importation, and Dubai’s pro-western culture which will welcome Oasis Craft and its products.

Threats According to the SWOT Analysis, Craft Oasis identifies potential threats as the following: country regulation on personal acquisition of alcohol for later use, venue regulation which dictates which locations can sell alcohol, increases in market saturation by established competitors, and possible US hostilities with Iran which would have a direct negative impact on shipping lane closures and thus Craft Oasis’ ability to export Emirates Choice to Dubai.

Porters 5 Forces Threat of New Competition The threat of new competition in the Dubai import industry is moderate (5 out of 10), due to moderate barriers to market entry and moderately low barriers to market exit. Barriers to entry are considered moderate due to four factors: Brewing and bottling technology is common and well know and the completive scale threshold is low, both of which drive down barriers to entry, while restricted access to well established distribution channels and high brand franchise both contribute to increase barriers to entry. Barriers to exit are considered moderately low due to three factors: all assets imported are sellable and there is a very low cost to exit the marketing, both of which drive down barriers to exit, while business are moderately interrelated keeping barriers at standard level.

Threat of Substitute Products Threat of substitute products in the Dubai import industry is moderately low (3 out of 10). This is due to low internal substitution from a mostly inelastic beer market, due to the fact that there are relatively few different brands of beer in Dubai, and moderate external substitution from wine and liquor, which customers have an equal propensity to buy compared to beer.

Bargaining Power of Buyers The bargaining power of customers in the Dubai beer industry is very strong (9 out of 10) due to two major factors that revolve on the tight grip that a few distributors have on the product market. Alcohol distributors are highly concentrated, Maritime & Mercantile International (MMI) and African & Eastern (A&E) represent the only major distribution networks that serve clubs, hotels, effectively increasing buyer bargaining power. Furthermore, besides duty free airport stores that have purchasing limits, MMI and A&E


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are the only retail alcohol stores. This gives them extensive power over producers, as they control a large portion of the supply chain. 10

Bargaining Power of Suppliers The bargaining power of suppliers in the Dubai beer industry is very weak (1 out of 10). This is due to the geographic dispersion of the importing businesses, the low cost switching suppliers, and the many standardized suppliers of brewing ingredients and bottling components.

Intensity of Competitive Rivalry The intensity of competitive rivalry in the Dubai beer industry is moderately high (6 out of 10) due to a combination of factors. First, there are a large number of equal size competitors vying for market share with a few large multinational players, which increases the intensity. Second, the beer industry is immature providing opportunity for aggregate growth decreeing intensity. Finally, the moderate level of product differentiation results in zero net effect on intensity. Overall, the Dubai beer industry has a moderate level of competition (4.8 out of 10), resulting in a marketplace that will support normal prices and not require substantial marketing expenses resulting in a reasonable profit margin.

OBJECTIVES The company aims to penetrate the market through strategic partnerships with local distributers that will allow Emirates Choice to expand internationally. The company has a capitalization of $40,000,000. Through this expansion, estimated to begin in 2013, the company projects an 8% growth rate. The main objective is to take Craft Oasis international, by exporting the company’s premier beer, Emirates Choice, to Dubai. This expansion of Emirates Choice will occur in two main phases. In Phase One, Craft Oasis will launch its premier product in Dubai in the spring of 2013. The company’s product will first be available in Dubai bars, nightclubs, and pubs. Phase Two will occur in the fall of 2013, when Emirates Choice plans to target retail establishments. The ultimate goal is market penetration and widespread availability of Emirates Choice throughout Dubai. Craft Oasis hopes to increase its sales of Emirates Choice by 15% through 2013 and 2014 with growth tamper off to 10 over the next 2 years. Craft Oasis projects sales to hit $9,600,000 in 2016, increasing revenue and profit margins exponentially.

10 (Global Village Encyclopedia, 2012)


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MARKET PENETRATION STRATEGY After careful analysis of the market and strategic planning, we have decided that conducting business with a local firm would be a useful geopolitical tactic that could help Craft Oasis break into the market more effectively. As such, Craft Oasis will export directly to The Maritime Mercantile International LLC. (MMI), a local distributer in Dubai. This company is an appointed license shipping agent and owns nine stores throughout the country, in which it distributes liquor and sells drinking licenses, which are necessary when purchasing alcohol from a store, according to Dubai law. Furthermore, MMI sells thirty-one different types of beer throughout its stores, but only sells one American beer, Budweiser. Since the Emirates Choice brand is unique and different, we believe that Craft Oasis can partner with MMI strategically to promote its small batch brewing, which is focused on quality and international reach.11 There are also several geopolitical advantages when working with a local entity, including: Craft Oasis’ ability to avoid the use of foreign direct investment (FDI), as well as the ability to utilize the local entity’s established network. Craft Oasis’ goal is to sell and export its major craft beer, Emirates Choice, not to cultivate and build a network. This will become important after the full implementation of all phases and more critical to long-term standing in Dubai, particularly if Craft Oasis chooses to switch its business model.

PRICING MODEL The Dubai beer market generally supports prices varying from 15-30 Dirhams per beer (the current conversion rate is 3.67 Dirham to 1 US dollar)12, or approximately $4 to $8 US per beer. Emirates Choice, as a respected craft beer, has a reputation for increased quality and will therefore be able to garner a premium price of 29 Dirhams (approximately $8 US) in the retail and service markets. Considering the high buyer power of our distributing partner MMI, it is in the best interest to offer Emirates Choice at a price point of 10.0 Dirhams (approximately $2.75 US), which will allow for a healthy profit.

STRATEGY How Craft Oasis plans to position its product in the Dubai market in order to accomplish the aforementioned objectives.

BRAND POSITIONING Emirates Choice is a deluxe brewery, which is redefining the beer market through its exportation of luxury craft beer at a premium price. Emirates Choice focuses on creating superior products for the everyday consumer by emphasizing, taste, quality, and style. 11 (Maritime and Mercantile International, 2012) 12 (The Money Coverter, 2012)


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Emirates Choice will differentiate itself amongst other beer by being the only high-quality beer on the market in Dubai. Emirates Choice will be available in most hotels, bars, restaurants and pubs.

VALUE POSITIONING Emirates Choice is an American beer with premium European style. Most locations throughout Dubai offer premium European beers but do not have listings for American beers.13 This is where Craft Oasis hopes to penetrate the market with its high quality craft beer, Emirates Choice, ultimately hoping to infiltrate the market in Dubai completely before expanding further.

TACTICS Craft Oasis’ anticipated promotion and advertising actions.

SOCIAL MEDIA Craft Oasis will take advantage of the expanding presence of social media and its international impact in order to market Emirates Choice. Craft Oasis already has group sites on Facebook, Twitter , and Google+ where it promotes its product s, announces new products, and advertises upcoming promotions and events. Craft Oasis makes a conscious effort to stay connected with its consumers while constantly trying to attract more by staying current and relevant in the social media scene. This way Craft Oasis can interact with its consumers on a regular basis. Craft Oasis hopes to use these same techniques in marketing and promoting Emirates Choice in Dubai. The company is currently working on making sub-accounts on Twitter, Facebook, and Google+ that are specifically for Emirates Choice and will announce the company’s exportation to Dubai as well as indicate promotional events, local distributers, and abilities to obtain promotional Emirates Choice gifts. This way the company hopes to create an electric buzz in the country as it prepares to launch and export Emirates Choice in 2013.

13 (Maritime and Mercantile International, 2012)

Wage per hour HoursMarketing Manager 30.00$ 2000

Marketing Team 20.00$ 3000

120,000.00$ Total

Social Media + You Tube


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ADVERTISING/DIGITAL MEDIA Company Advertisements Craft Oasis is in the process of creating several company advertisements that will help expose the launch of Emirates Choice in Dubai and increase awareness of the brand. These advertisements will run in sequence throughout Dubai. Some advertising concepts are illustrated below:

Emirates Choice…. The difference between everyday and TODAY.

Craft Oasis, Dubai 2013.

Emirates Choice…the jewel of the oasis

Craft Oasis, Dubai 2013.

Commercial Concepts Craft Oasis is also pursuing other avenues of digital media such as commercial videos on Youtube and television commercials. The Youtube videos will be beneficial and very cost-effective. Anticipated video concepts will include clever branding, but will also


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supply consumers with relevant information and a better understanding of American craft beer. This way, Craft Oasis hopes to begin to generate a new market and cultivate a new beer luxury culture.

PROMOTIONS Craft Oasis has created a promotional team, which is currently conducting market research to optimize the company’s promotion of Emirates Choice in Dubai. Promotion methods will include the following:

Complimentary Tastings & Informative Brochures Craft Oasis will sponsor complimentary tasting for the first three months at local distributers of Emirates Choice such as restaurants, nightclubs, and bars. The complimentary tastings will allow potential consumers to try an original American craft beer and compare it to other mass produced choices. This way, Craft Oasis will begin to cultivate a strong relationship with consumers and, through its complimentary tastings and informative brochures, teach Dubai residents and tourists about American craft beer, ultimately making Emirates Choice synonymous with high quality luxury for the everyday consumer. Craft Oasis anticipates to use 300 kegs of Emirates Choice and 10,000 brochures through this promotion, costing the company approximately $13,000.

Emirates Choice Promotional Gifts Craft Oasis plans to distribute promotional gifts to Emirates Choice consumers. Gifts will include, but are not limited to, Craft Oasis coasters (illustrated below), Emirates Choice key chains, Emirates Choice beer taps, Emirates Choice mouse pads(illustrated below), Craft Oasis lights, and Emirates Choice pens. These promotional gifts will help bring attention to the brand and make it a social presence in Dubai, further generating

a buzz around the Craft Oasis product. These Promotional gifts have an anticipated total cost of $14,500.

Cost per item NumberLighters 0.37$ 5000Mouse Pad 1.00$ 2000Coasters 0.10$ 20000Keys Chains 0.63$ 5000Pens 0.10$ 5000Tap Handles 100.00$ 50

14,500.00$ Total

Promotional Gifts

Cost per item NumberKegs 41.25$ 300Brochures 0.07$ 10000

13,075.00$ Total

Complementary Kegs and Brochures


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Dedicated Promotional Representatives Craft Oasis will hire a local promotional team in Dubai that will promote Emirates Choice from within the country. This way Craft Oasis hopes to employ both local people and take advantage of word-of-mouth marketing as it stirs a trend and cultivates a new craft beer culture with the premier quality of Emirates Choice. This will cost Craft Oasis approximately $72,000.

Total Budget

BUSINESS CHALLENGES As in any product development plan, we anticipate several business challenges, including:

• Initially, competing with well-established European beer companies, such as Heineken, will be a big challenge in gaining market recognition.

• Creating a beer culture, in which the Emirates Choice product is highly visible and intuitively associated with individual luxury. Craft Oasis will make Emirates Choice synonymous with quality and a beer drinking culture through product promotion, product teaching, and the large presence of the product throughout the country.

• Due to the conservative laws regarding alcohol there is going to be a decrease in consumer demand compared to a market in a open society. The law requiring residents to obtain a drinking license before they can buy alcohol form

Wage per hour HoursPromotion lead 18.00$ 2000Street Team 9.00$ 4000

72,000.00$ Total

Promotion Team

Promotional GitsPromotional TeamSocial Media + You TubeComplementary Kegs and Brochures

219,575.00$ Total

14,500.00$ 72,000.00$

120,000.00$

13,075.00$

Total BudgetCost


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any store location for future consumption will also be another business hurdle. This law excludes Muslims. While residents are free to purchase alcohol in nightclubs and bars, Dubai law requires a license to purchase alcohol in any store location for later intended use. Craft Oasis will aggressively purse a partnership with MMI, which sells both alcoholic beverages and alcohol licenses, as a means of mitigating this business challenge. Furthermore, Craft Oasis will predominantly target nightclubs, restaurants, and bars to distribute the Emirates Choice product.

CONCLUSION In closing, Craft Oasis has illustrated its ability to be successful through its expanding brand throughout the United States. As a result, the company feels that it will be able to successfully promote and export its premier product, Emirates Choice, to Dubai. The company anticipates success in Dubai due to the high quality of its product, the detailed promotion and careful partnership of Craft Oasis and MMI, and the company’s plan for market penetration. In short, Craft Oasis feels that the company is ready to expand internationally and that entering the market in Dubai is a crucial first step in that process, which they anticipate, will increase sales and revenue.


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REFERENCES

Beer-‐FAQ. (2007, October 15). What is a Steam Beer (or California Common)?

Retrieved from Beer-‐FAQ.com: http://www.beer-‐faq.com/steam-‐beer/ Central Intelligence Agency. (2012, February 8). The World Factbook: United Arab

Emirates. Retrieved February 29, 2012, from https://www.cia.gov/library/publications/the-‐world-‐factbook/geos/ae.html

Global Village Encyclopedia. (2012, March 5). Dubai. Retrieved from Global Village Encyclopedia: http://www.gvpedia.com/Territories/Dubai/Facts-‐Figures.aspx

Maritime and Mercantile International. (2012, March 5). Maritime and Mercantile International. Retrieved from Welcome: http://www.mmidubai.com/homepage.aspx

MPI Data Hub. (2005). Country and Metropolitan Stats in Brief (2005). The Money Coverter. (2012, March 5). Convert US Dollar to United Arab Emirates

Dirham. Retrieved 3 5, 2012, from The Money Coverter: http://themoneyconverter.com/USD/AED.aspx

The World Bank. (2012). Economy Profile: United States. Washington: The International Bank for Reconstruction and Development / The World Bank.

The World Bank. (2012). Economy Profile: Unitred Arab Emirates. Washington: The International Bank for Reconstruction and Development / The World Bank.

Weiner, M. (2012). Worlds Most Visited Cities. U.S. News Travel.

Craft Oasis Marketing Plan

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