Business Plan – Atom Beers

TABLE OF CONTENT(s)

Executive Summary.........................................................................................................................3

Market background..........................................................................................................................4

Segmentation...................................................................................................................................4

Targeting..........................................................................................................................................6

Positioning.......................................................................................................................................6

Marketing Mix Model......................................................................................................................7

Product.............................................................................................................................................7

Price.................................................................................................................................................8

Place.................................................................................................................................................9

Promotion........................................................................................................................................9

Implementation and control.............................................................................................................9

References......................................................................................................................................11
 Executive Summary:

The purpose of this report is to conduct a market analysis of the UK-based beer industry and the
changes that it underwent after the onset of the COVID-19 pandemic. The lockdowns resulting
from the pandemic led to significant shifts within the market for beer, in terms of consumer
buying behaviour, market saturation, and current competitive forces. With this information in
mind, this report presents a plan to initiate the launch of a new brand of ale, Galactic Ale. The
plan for this product showcases an STP analysis to choose the right target audience, and then
goes on to create a product mix that would suit this target market and help consumers change
their perception of traditional ale.

Market Analysis:

Traditionally the UK beer industry was known dominated by lager sales, which accounted for
about 69% of market share with 80% of total volume sales up until 2020 (Mintel, 2020). The
onset of the pandemic, however, has brought about significant changes within this market that
have directly impacted the economy in terms of both leisure and hospitality services (BBC,
2021). As the lockdown restricted the functionality of bars and pubs around the country, the
industry experienced a significant drop in sales (International, 2020). Numbers taken from
research conducted in 2020 have showcased that sales of beer have dropped 9% by volume and
26% by value since the rise of the pandemic in 2020 (Statista, 2020).

Keeping this downhill trend in mind, Atom Beers is looking for options on how to keep their
market reputation stagnant.

STP Analysis:
Segmentation:
The first step that Atom Beers has to take is to take a closer look at the UK beer consumer
market and segment it into groups based on the similarities and differences they have. This can
be done in terms of their geographical location, psychographic traits, or smaller factors such as
age and gender. To find a suitable segment for the beer consumer market, the following
categories have been chosen and defined:

1. Demographic:
Within demographic factors, the most significant characteristics to consider are the age, income
range, and occupation of the average beer drinker within the UK (Zeithaml, 1985). Within these
demographic segments, a simple division would be to separate consumers by which generational
group they identify with. Research conducted in the UK states that the most frequent purchasers
of beer are adults within the age range of 45-55, which comes as a cross between Generation X
and Millennials (Statista, 2020) . Further research conducted on different generations has shown
that Generation X is most likely to stay loyal to a particular brand of beer, with about 22% of UK
based Gen-Xers stating that they would not change preferences unless a new product of higher
quality comes along (Vojtěch Spáčila, 2016). Millennials, on the other hand, have been found to
be more willing to switch beer brands on the basis of a higher quality alternative, or better
advertising (Vojtěch Spáčila, 2016). This shows that the target market to focus on is older
millennials, with a slight focus on late Gen-Xers. When looking at other characteristics such as
the effects of gender, research on the UK market has found that gender plays a role in beer
preferences. Females are more likely to prefer lighter, flavoured drinks as compared to men,
particularly if they fall below the age of 40 (Mintel, 2020).

2. Geographic:

In order to ascertain what role geography places in testing the preferences of the average beer
consumer, it is first important to look at which areas were hit harder by the COVID-19 pandemic
and its resulting lockdowns, as research has largely shown that many pubs have had to restrict
their services and breweries have had to adjust their business according to the restrictions of the
pandemic (BBC, 2021). Research has shown that, out of all the cities in the UK, London is the
city that has one of the highest spending statistics on beer (Robinson, 2018). London was also
one of the largest hit cities within the UK by the onset of the COVID-19 pandemic (Statista,
2021). Similarly, other big cities, such as Manchester and Leeds, with higher populations, were
also put under several restrictions by the UK government during lockdown, which put a
significant strain on leisure-based economic activity, particularly within areas with pubs, bars
and clubs (Economic Times, 2020). These lockdowns have restricted social activity among
consumers and have thus led to them not relying on the traditional pub culture for their nightly
pint.

3. Psychographic:

Demographic research showed us that different age groups have different behavioural
preferences when it comes to consumption of beer. In terms of consumption of beer, consumers
have shifted away from pub-based products. 60% of UK based consumers prefer products that
are canned or bottled recreations of their traditional pub refill (Mintel, 2020). This behavioural
change is largely consistent with above mentioned data which has shown that residents of the
UK that are restricted by governmental lockdowns are less likely to be in social situations and
more likely to look for home-based alternatives (Walsh, 2020). 65% of UK based consumers
also showed a preference toward new brands of higher quality beer as opposed to showing
loyalty to old brands, when surveyed in 2020 (Mintel, 2020).
Targeting:
Research shows that the most optimal targeting strategy to follow is one that has the strongest
potential to grow further and helps bring out the strengths of the brand itself (Dibbs, 1999). Thus,
when looking at the targeting strategy for this particular brand of beer, it is important to look at
the most attractive elements of the segmenting, targeting, and positioning model, and base a
target market that has those elements (Dibbs, 1999). In this particular case, the elements to be
taken for our target market will be:
1. Market: UK-based residents in the London area and other larger cities.
2. Age group: individuals between the ages of 25-50.
3. Income range: upper-middle class citizens interested in high quality beer.
4. Market strategies: divided based on two elements, age and gender.
5. Distribution: local takeaway restaurants and pubs, premium stores.

Positioning:
To position a brand means to consider its place in the market relative to its competitors, and this
strategy allows a business to be more self-aware in terms of how it wants to market itself and its
product to the world (Mita Sujan, 1989). In light of this, research shows that the top beer brands
within the UK beer market are Carling and Fosters for lager, and Camden’s Pale Ale and King
Greene Abbot Ale for ales and stouts (Robinson, 2020).
With respect to the competitive landscape above, a prospective new brand for premium ale
would enter into the market as an entrant with little competitive threat, as ale is not as highly
demanded or as prone to loyalty as lager. This product will exist as a high-quality alternative to
current ale products available in the market, in line with data that shows consumers will switch a
brand for better quality. It will also cater differently to millennials and Gen-Xers in terms of its
marketing techniques and have a lighter version available in the market to cater to varying tastes.

Marketing Mix Model:

Product:
Our product, Galactic Ale, will be a new, higher quality take on premium ale. Research has
shown that while ale is a product that isn’t as competitive as lager, sales have remained more
consistent than that of other beers, meaning that ale is a less risky product to introduce (Passport,
2020). Research has also shown that ale is usually not preferred due to poor perception of its
quality and taste, which is why a premium quality ale would be able to easily integrate the
market in an effort to change perception and gain loyalty (Passport, 2020). Galactic Ale will be
sold in coloured glass bottles that will be marketed as reusable, environmentally friendly
packaging. These bottles will primarily be coloured to showcase the two different ranges of ale
offered. The first range will be classic dark ale, served in dark brown bottles for traditional ale
drinkers, while the second range will be mixed ale, which will have light colored bottles, and
have flavours ranging from light spice to cream (Ruecian, 2007). The colour palette associated
with the packaging will help consumers connect rich colours to a richer, higher quality taste. The
packaging will also appeal to environmentally friendly audiences as the bottles will come with a
refill option.

Price:
The market statistics for the past few years have shown that ale has had a small but steady
market that has a current value growth that remains more steady than that of mid-priced lager
and economy lager (Passport, 2020). Sales of ale, while they may have fallen in 2020, have also
shown to have a steady increase in future years (Passport, 2020). Based on these factors, the
price range for premium quality Galactic Ale will be similar to premium lager to match the
image of quality, and will be roughly 3.5GBP per bottle. This price matches market range so as
not to discourage consumers from consumption but also provides a better quality image for the
product which, coupled with the high quality packaging, will be beneficial for the overall
reputation for the brand as a high quality ale.
Place:
Due to the lockdown, it is integral to place the product away from counter or bar based
establishments, and bring it to supermarkets and posh grocery stores, which has so far been the
most frequented location for beer purchase in 2020 (Mintel, 2020). As was mentioned above, UK
residents in areas with strict lockdowns have been less likely to gather in public areas and are
more likely to look for long term solutions to their favourite drinks in other forms (Walsh,
2020). Thus, this product will be placed in major stores like Marks and Spencer, and Waitrose.
To enhance the market more, pubs and bars offering takeaway services during the lockdown and
generally will also be contacted to provide offers for serving Galactic Ale as the exclusive ale
with their deliveries.
Promotion:
It has been established earlier in the report that different segments of our main consumer base
have different reactions to mainstream marketing tactics (Mita Sujan, 1989). Due to this,
Galactic Ale will be marketed in two main ways. The first promotional strategy will be modern
advertisement to appeal to modern-day millennials who are more likely to make shifts in
preferences due to advertisement. This will include Facebook boosting, sponsored Instagram
posts, an Instagram introductory reel announcing the product, and reviews from social media
influencers. This method will also focus more on the second range of the product, emphasising
upon the flavours and the economically friendly packaging to appeal to modern-day trends and
preferences.
The second promotional method will be more traditional to the older market, which leans more
toward late onset generation X. This strategy will focus primarily on in-store marketing,
promotional offers, and below-the-line measures that emphasise more on the high quality of the
ale than any other element.

Implementation and control:

To look after the implementation and control of a newly launched product means to ensure that
the marketing mix defined above is successfully applied to a practical setting and does not
encounter any blockages (Marketing). Galactic Ale will thus be launched through separate
measures. The first measure will be through supermarkets which will have a brand management
team introduce the product to customers and provide samples. Separate refrigerators will be
placed in each store and pub, labelled with the name of the brand in order to differentiate it from
standard ales.
To ensure control of the implementation process, two marketing teams will be set up, of which
one will oversee on-site marketing in stores and pubs, while the other will oversee digital
promotional strategies and make sure that each launch campaign is being effectively streamed
online.
A quarterly analysis of promotion-to-sales ratios will showcase how well the brand is doing in
terms of fostering an image as a high quality ale within the market. Since the primary aim of this
plan will be to change the consumer mindset about ale and take over a market with little threat to
entry, the main end-goal will be to see how successful Galactic Ale is in changing the mind of
the average UK consumer and becoming their preferred brand of ale.

References
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