ICDM CW - Carlsberg Malaysia

ABMC 3073 INFORMATION FOR CONTROL AND DECISION MAKING COURSEWORK 2 GROUP WRITTEN ASSIGNMENT

NAME

STUDENT ID.

GAN KEAN HOE

11WBD01689

GAN SIOW FERN

11WBD00842

HO WENHUI

11WBD04595

HUAN CHAN YANG

11WBD04991

SIEW CHUNG JIAN

11WBD05070

WONG VINNIE

11WBD05080

COURSE

: 3 DAC G27

TUTOR

: MR. YEAP SAY WOI

DATE OF SUBMISSION

: 3 JULY 2013

SIGNATURE

1. PLAGIARISM STATEMENT Form A Plagiarism Statement We, the undersigned, confirm that the submitted work are all our own and are in our own words.

Name (Alphabetical Order and Capital Letters)

Registration number

1. GAN KEAN HOE

11WBD01689

2. GAN SIOW FERN

11WBD00842

3. HO WENHUI

11WBD04595

4. HUAN CHAN YANG

11WBD04991

5. SIEW CHUNG JIAN

11WBD05070

6. WONG VINNIE

11WBD05080

Tutorial Group: _3 DAC G27__________ Date: _____3 JULY 2013____________

I

Signature

TABLE OF CONTENT NO.

TITLE

PAGE

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Plagiarism Statement (Form A)

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Assignment Questions

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Content 3.1 Company Background

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3.2 External Factors Affecting Pricing Decisions 3.2.1 Market Nature and Demand 3.2.2 Competitors’ Costs, Prices and Offers 3.2.3 Economic Condition and Government Restriction

4-5 5 5-6

3.3 Marketing Mix Strategy by Carlsberg 3.3.1 Pricing Strategy

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3.3.2 Product Strategy

9-10

3.3.3 Promotion Strategy

10-12

3.3.4 Place Strategy

12-13

3.4 Pricing Decision Approaches 3.4.1 Three General Pricing Decision Approaches

14-15

3.4.2 Pricing Decision Approach used by Carlsberg

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3.5 Carlsberg Pilsner’s Product Life Cycle

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3.5.1 Development Stage

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3.5.2 Introduction Stage

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3.5.3 Growth Stage

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3.5.4 Maturity Stage

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3.5.5 Decline Stage

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Bibliography

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2. ASSIGNMENT QUESTIONS INSTRUCTIONS AND EXPECTATIONS OF ASSIGNMENT: You are required to select one manufacturing company in Malaysia by using this link http://edirectory.com.my/in-ope.asp and do further research on the company selected by its own webpage and other relevant information. The answers provided for all the questions listed below should be fully related to the company chosen in part (a). Attention will be paid to systematic approach to analyse and evaluate the case study, evidence of reading and some understanding of models and concepts and clearly state any assumptions you make, and support statements and theories by referencing to appropriate sources. Harvard referencing is a must. A proper comb binding of assignment is expected together with softcopy. The assignment is to be submitted as a single written report of between 3,000 and 3,500 words.

ASSIGNMENT QUESTIONS: (a)

Introduce an overview of the company background including the core business activities. (8 marks)

(b)

Illustrate any three (3) external factors which will affect the pricing decisions on the case study you chosen in part (a). (12 marks)

(c)

Demonstrate how marketing mix strategy could affect the pricing decision for the case study. Provide examples related to your case study. (40 marks)

(d)

Contrast the pricing decision approaches. Based on your opinion and observation, explain the possible pricing decision approach used by the case study and justify your answers. (20 marks)

(e)

Discuss what product life cycle is and select one of the products from your case study to illustrate your answers. (20 marks) [Total: 100 marks]

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3. CONTENT 3.1 COMPANY BACKGROUND

The Carlsberg Group is a Danish brewing company founded in 1847 by J. C. Jacobsen. In 1875, he set up the Carlsberg Laboratory and invented the ground-breaking method to extract pure yeast. Subsequently, the pH-scale was developed and advances in protein chemistry help in development of brewing industry. Over 130 years of business expansion and development, Carlsberg Group becomes the fourth largest brewery group in the world. Nowadays, Carlsberg Group produces more than 500 beer brands including Asahi Super Dry, SKOL Super beer and their main brand Carlsberg beers as shown in Illustration 1.

Illustration 1: Carlsberg Brands Carlsberg’s business is mainly focused in three market regions, which are Western Europe, Eastern Europe and Asia. In Western Europe, Carlsberg has a market share of 14.4% in Poland and owned brewery brands in countries such as Sweden and Norway. In Eastern Europe and Russian Federation, Carlsberg owns Baltic Beverages Holding which is the largest brewery in that region. In Asia region, Carlsberg business is mainly focused on China and India. By using systematic management philosophy and

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strong beer reputation, Carlsberg Group acquires over 70% of market share in India under its subsidiary company, Carlsberg India Pvt Ltd. In late 1960s, Carlsberg Group started to venture into Malaysian market, where Carlsberg and the East Asiatic Company formed “Carlsberg Brewery Malaysia Berhad” in 1969. Carlsberg Malaysia is an established brewery that manufactures and distributes beers, stout and other beverages. It began brewing Carlsberg Green Label beer locally in 1972. By using tagline of “Probably the Best Beer in the World”, Carlsberg became the leading brand in Malaysia within the first 10 years with more than 50% share of the Malaysian Beer Market. Carlsberg Malaysia offers beer with different palates that is suitable for any occasion. Up to date, Carlsberg Green Label still maintained as the most preferred beer brand in Malaysia.

Illustration 2: Carlsberg Malaysia Managing Director, Soren Ravn

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3.2 EXTERNAL FACTORS AFFECTING PRICING DECISIONS The pricing decisions made by Carlsberg Brewery Malaysia Berhad (Carlsberg Malaysia) on their beer and alcoholic products are influenced by several external factors. These factors are illustrated as below: 3.2.1 MARKET NATURE AND DEMAND There are four types of market structure recognized by economists such as perfect competitive market, monopolistic competitive market, oligopolistic market, and monopoly market. The types of market will influence and limit the scope of pricing decisions made by a company. Based on our observation on beer industry in Malaysia, Carlsberg Malaysia is involved in oligopolistic market which there is only few sellers. As shown in Illustration 3, there are only two members of Confederation of Malaysian Brewers Berhad. Hence, the major competitors of Carlsberg Malaysia are Guinness Anchor Berhad and several beer importers. In this oligopolistic beer market, Carlsberg Malaysia is highly sensitive to its competitor on setting its product price. For example, if Guinness Anchor Berhad lowers its beer price by RM 1, Carlsberg Malaysia will have to respond promptly by lowering its beer price by similar range or introducing new promotions. Therefore, each company is alert to competitors’ moves and decisions.

Illustration 3: Members of Confederation of Malaysian Brewers Berhad Besides, any changes in price will lead to different demand level, resulting in different sales and profit earned. Thus, the price elasticity of demand would also influence its pricing decision. It indicates the consumer responsiveness to the product price.

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In beer manufacturing industry, beer or alcoholic product has elastic demand as it is not a necessity and there are many substitutes for beer. (Wiki, 2013) Therefore, if Carlsberg Malaysia lowers its beer product price by small percentage, the demand on its product will increase by higher percentage. Therefore, Carlsberg Malaysia should be very cautious of price elasticity of demand when making any pricing decision. 3.2.2 COMPETITORS’ COSTS, PRICES AND OFFERS A company’s pricing decision may not be successful if its competitors take a similar action or have cost advantage over the company. In order to identify whether there is any cost advantage against its competitors, Carlsberg Malaysia has to benchmark its beer production cost against the production cost of its competitors such as Guinness Anchor Berhad (Illustration 4). Besides, Carlsberg Malaysia has to be always aware of any offer and price changes made by its competitors. Hence, it can be used as a guideline to set its pricing strategy. In short, Carlsberg Malaysia has to position its offer in relative to competition it faces in beer manufacturing industry.

Illustration 4: Carlsberg Malaysia major competitor, Guinness Anchor Berhad The pricing decision made by company will also influence the market nature. In beer manufacturing industry, if Carlsberg Malaysia decides to adopt high-price, highmargin strategy, it may also attract other foreign beer manufacturers to enter the industry and compete with Carlsberg Malaysia. 3.2.3 ECONOMIC CONDITION AND GOVERNMENT RESTRICTION Economic changes such as economic boom or recessions, inflation and changes in interest rate will also affect the production cost and other marketing expenses of the company. For example, unexpected increase in barley and wheat (material used in beer production) price will increase the production cost of beer, and Carlsberg Malaysia will need to revise its pricing strategy to avoid losses. 5

Besides, government restriction on pricing and sales of beer or alcoholic product will also affect the pricing decision. As a Muslim-majority country, Malaysia government imposes high excise duty and import duty on beer and alcoholic products as shown in Illustration 5. Besides, there are some restrictions on sales of beer in premises and alcohol content in each beer produced. Hence, Carlsberg Malaysia has to take these issues into consideration when setting their pricing strategy.

Illustration 5: Excise Duty Rate charged by Royal Malaysian Customs Department

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3.3 MARKETING MIX STRATEGY BY CARLSBERG According to E.Joreme McCarthy, an effective marketing strategy is classified into four categories: Pricing strategy, Product strategy, Place strategy and Promotion strategy. Each of the strategies implemented may influence the pricing decision made. 3.3.1 PRICING STRATEGY In order to meet differing demand of different customer groups, Carlsberg Malaysia implements different pricing strategies such as Product Line Pricing, Psychological Pricing, Competition Pricing and Segmented Pricing. Firstly, Carlsberg Malaysia implements product line pricing strategy. Under this pricing strategy, Carlsberg Malaysia offers its beer products with different features at different prices. Although they are classified in same beer range, but consumers need to pay more for beer product with better flavours. The difference is illustrated in Table 1. Type of Beer

Alcohol Content

Packing

Price per pack

Carlsberg Premium Beer

5.0%

320ml x 6 (can)

RM 35.79

Carlsberg Gold

5.5%

320ml x 6 (can)

RM 37.89

Carlsberg Special Brew

8.8%

320ml x 6 (can)

RM 42.49

Table 1: Pricing of Carlsberg Products in Giant Hypermarket Bandar Baru Ampang Besides, Carlsberg Malaysia implements psychological pricing strategy in order to capture consumer judgement in comparing the prices. Carlsberg Malaysia considers the consumer behaviour, philosophy, and the psychological impact on their judgement due to price charged. Hence, most of the beer prices are charged at “odd price” or little less than a round number. As shown in Table 1, Carlsberg Gold price is charged at RM 37.89 which is only 11 cents difference from RM 38. However, customers may still prefer to buy at the price as they may think that the product is purchased for less than RM 38. As there is strong competition between Carlsberg Malaysia and Guinness Anchor Berhad in beer market, Carlsberg Malaysia implements competition pricing strategy 7

in order to keep its price competitive. Under this pricing strategy, Carlsberg Malaysia will adjust its product price by making comparison with their competitors, mainly Guinness Anchor Berhad. As a result of comparison, Carlsberg Malaysia has three options to amend its price: set lower price, higher price or same price. As shown in Table 2, Carlsberg Malaysia prices its product lower than its competitor’s product in order to keep in competition. Type of Beer

Packing

Price per pack

Carlsberg Premium Beer

320ml x 6 (can)

RM 35.79

Tiger Beer

320ml x 6 (can)

RM 37.89

Guinness Foreign Extra Stout

320ml x 6 (can)

RM 43.29

Table 2: Pricing of Carlsberg Products compared to its Competitors’ Product in Giant Hypermarket Bandar Baru Ampang Besides, Carlsberg Malaysia adopts segmented pricing strategy to cope with different demand by customers in different situations. Under seasonal pricing strategy, Carlsberg Malaysia takes into consideration the seasonal factors which may affect the demand for beer products such as festive seasons, holidays, sports events and national celebrations. Hence, beer product price changes and other promotional events should be carried out to meet those unusual demands and maximize current profits. As shown in Illustration 6, number eight is often used in pricing of Carlsberg beer products to symbolise luck and prosperity during Chinese New Year.

Illustration 6: Seasonal Pricing Strategy used by Carlsberg Malaysia

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3.3.2 PRODUCT STRATEGY As segmented pricing strategy is implemented, Carlsberg Malaysia adopts multimarket approach. In an Islamic country like Malaysia, Carlsberg Malaysia marketing strategy is mainly focused on non-Muslim consumer groups such as Indian or Chinese community and entertainment groups especially in bar restaurants, discos and pubs. In order to provide a variety of choices to those consumer groups, Carlsberg Malaysia manufactures and distributes different brands of beer such as Carlsberg Gold, Carlsberg Special Brew, SKOL, Jolly Shandy and Danish Royal Stout. For instance, compared to SKOL (lager), Carlsberg Gold is pilsner which incurs higher material cost as it contains additional materials for stronger tastes. Hence, the Carlsberg Gold should be charged at a higher price compared to SKOL. In short, the differences of material cost in each beer production will also affect their pricing decisions. Besides, Carlsberg Malaysia produces different beers with different alcohol contents. For example, Carlsberg Malaysia produces Jolly Shandy which has only 1% alcohol content and it is very suitable for teenagers and persons who don’t drink beers. For consumer groups who prefer strong flavours and bitterness, Carlsberg Malaysia also produces Carlsberg Special Brew which contains 8.8% alcohol content. Therefore, differences of alcohol content in each beer will result in different prices. As shown in Illustration 7, Carlsberg Malaysia comes up with beer products of different size (volume) for customers’ convenience such as can, pint bottle (medium) or quart bottle (large). For example, a Carlsberg Beer can with 320ml volume is suitable for those consumers who prefer minimal alcohol consumption while a medium Carlsberg Beer bottle with 640ml volume is suitable for beer lovers during entertainments. Hence, volume differences due to different bottle size results in different price charged on each beer products.

Illustration 7: Carlsberg Beer Products with different size (volume) 9

Besides, all Carlsberg Malaysia products are of different designs. As shown in Illustration 8, Carlsberg Beer lager comes out in green colour appearance which symbolises Carlsberg Malaysia main brand while Danish Royal Stout comes out with the mixture of black and gold colour appearance which represent classy and elegance. Hence, different design and branding of beer products will affect Carlsberg’s pricing decision.

Illustration 8: The appearances (design) of Carlsberg Beer Lager and Danish Royal Stout 3.3.3 PROMOTION STRATEGY In order to promote brand popularity among the publics, Carlsberg Group provides sponsorships in various social activities and campaigns around the world. In sports arena, Carlsberg sponsors many famous football clubs including Liverpool FC, FC Copenhagen and English National Football Team. Besides, in order to further promote Carlsberg popularity among football fans, Carlsberg sponsors several famous football leagues and tournaments in the world including FA Cup in United Kingdom, UEFA Champions League and EURO 2008.

Illustration 9: Carlsberg Group Sponsorship in Popular Sports Events 10

In Malaysia, due to restrictions on active advertising of alcoholic drinks and liquors in local media, Carlsberg Malaysia is currently practising average product positioning strategy through indirect promotion form. This includes Carlsberg Green Label logo placement on sponsorship, sponsored events, banners and wallpapers. Carlsberg Malaysia also sponsors various local sports tournaments such as Maybank Golf Malaysian Open 2012 and Carlsberg Golf Classic (Illustration 10) in order to promote brand popularity among athletes and their friends. However, high sponsorship cost on sports tournament may influence the total cost incurred in selling Carlsberg beer products.

Illustration 10: Carlsberg Golf Classic Besides, Carlsberg Malaysia spends a lot on advertising of its brand or logo through sponsoring of neon-light banners for business outlets throughout Malaysia. For example, neon-light banners with Carlsberg Green Label logo can be seen in many Chinese restaurants, pubs and coffee shops. Hence, it helps to increase Carlsberg popularity against its competitors, but may result in high advertising cost. In order to exercise corporate social responsibility among community and enhance its brand position, Carlsberg Malaysia provides sponsorship to many charity campaigns and organisations such as Top Ten Charity Campaign, Carlsberg Hua Zong Education Fund (Illustration 11) and many other donation campaigns. Hence, it helps to enhance Carlsberg brand reputation and position among local beer market.

Illustration 11: Carlsberg Sponsorship in Charity Campaigns

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Although Carlsberg Malaysia has been successful in its promotion strategy over the years, but high advertising and promotion costs may cause a heavy burden on the performance and sales of Carlsberg products. Hence, Carlsberg Malaysia might increase the product price to cover its advertising cost. 3.3.4 PLACE STRATEGY As a major beer manufacturer in Malaysia, Carlsberg Malaysia adopts multi-market approach which focuses on wider consumer groups rather than single market segment. Hence, Carlsberg Malaysia products are intensively distributed to different places and outlets in Malaysia including convenient stores, hypermarkets, bars, night entertainment outlets and restaurants. However, Carlsberg Malaysia currently is exercising price discrimination strategy which it charges same beer products at different price in different places although the production cost is the same. For example, the price of a Carlsberg Beer bottle is only RM 7.50 at convenient stores but it may be priced at RM 10 in bars or discos. In order to distribute Carlsberg products to more outlets, Carlsberg Malaysia also expands its distribution network by delegating parts of its distribution duties to intermediaries as selected brand distributors including Luen Heng F&B Sdn Bhd and Lion Brewery (Ceylon) Plc. Since Carlsberg Malaysia outsources parts or majority of products to other distributors, there will be some sales or distribution commission paid to those distributors. Hence, it affects the initial beer price charged by Carlsberg Malaysia. The company will need to revise its pricing decision from time to time due to outsource of distribution works.

Illustration 12: Carlsberg Malaysia Contract Distributor, Luen Heng F&B Sdn Bhd

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Carlsberg Malaysia has a wide range of distribution network to distribute their products effectively to customers in entertainment outlets (pubs, clubs and bars), convenient store outlet (supermarket) or others outlet (in rural area). However, the differences in distribution expenses may affect the pricing decision made by Carlsberg Malaysia such as duties, freight charges and shipping expenses. For instance, the price of Carlsberg beer in duty free trade zones such as airports and Pulau Langkawi is slightly cheaper than other places in Malaysia due to exemption of duties. Therefore, Carlsberg Malaysia and its contract distributors (intermediaries) need to take this factor into consideration before any pricing decision is made.

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3.4 PRICING DECISION APPROACHES 3.4.1 THREE GENERAL PRICING DECISION APPROACHES There are three major categories of pricing decision approach: Cost-based pricing approach, Buyer-based pricing approach, and Competition-based pricing approach. Cost-based approach is a pricing approach which certain percentage of profits is added to the production cost in arriving specific price. Hence, it is the simplest pricing method among those three approaches. The pricing methods used in this approach include cost plus pricing, breakeven analysis and target costing. They are normally used when producers face difficulties in predicting future production cost, when the manufacturer has only one major supplier and when there are changes required on product specifications after production contract is signed. If a manufacturer is not capable of predicting its production cost, the uncertainty may cause the company to suffer from significant loss if higher cost is incurred. The main purpose of using this approach is to reduce the risk faced by sellers by transferring part of the risk to buyers. Hence, it creates a win-win situation between sellers and buyers. However, this approach ignores current demand and competition faced by the company, so the profits earned is not maximized. Buyer-based approach is a pricing approach which the price is set based on the producer’s prediction on how much buyer is willing to pay on its products. Hence, detailed investigation and analysis should be carried in order to be an effective approach. There are two main pricing methods used in this approach: penetration pricing and skimming pricing. Penetration pricing strategy is a pricing method which low price is set for a new product in order to capture larger market shares quickly. Once the initial objective is achieved, it provides opportunity for the seller to increase prices in order to maximize profits. Hence, it works best in a market which there is minimal product differentiation and elastic demand such as monopolistic competitive market. Skimming pricing strategy is a pricing method which high price is set for a new product in order to “skim” maximum revenue from market segments which are priceinsensitive. Once the market becomes saturated, firm will reduce its price to attract the market segments which are price-sensitive. Hence, it works best in a market where

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a new product can be launched without facing any competition at initial stage due to technological advances. Competition-based approach is a pricing approach which price is set based on competitors’ actions. It is normally used when there is strong competition in a market. In this competitive market, most of the firms have no necessary power to set a price above their competitors. Therefore, going-rate pricing method is used in this approach. Under this pricing method, the price is set in line with the prices charged by many other competitors. In short, those firms are considered as “price takers” which select the current market price determined by forces of demand and supply. The application of this pricing strategy can be seen in perfectly competitive market. By using competitive pricing approach, there is no price competitive advantage among those firms as the selling price is set at same level of others. Hence, sellers need to adopt non-price method to attract other customers such as promotion events, branding, and better quality services. 3.4.2 PRICING DECISION APPROACH USED BY CARLSBERG MALAYSIA Based on observation, Carlsberg Malaysia is expected to be using Competitionbased pricing approach. In local liquor market, there are few licensed liquor importers and only two major brewery companies, Carlsberg Malaysia and Guinness Anchor Berhad which occupy over 80% of market shares. Each of them manufactures and distributes similar beer products differentiated by branding. As the market is considered as oligopolistic market, there is a strong competition between Carlsberg Malaysia and Guinness Anchor Berhad. Both companies have no sufficient power alone to set their prices above each other.

Illustration 13: Oligopoly’s Kinked Demand Curve 15

As there is kinked demand curve in oligopolistic market (Illustration 13), any increase in beer price will affect the consumption for Carlsberg Malaysia products. Besides, it is not recommended to make significant changes to its product price as there are high excise duties charged and frequent happenings of beer smugglings. Due to those reasons, it is appropriate for Carlsberg Malaysia to set its beer price according to ongoing market price (price charged by many other sellers). However, Carlsberg Malaysia also implements different pricing strategies accordingly (3.3.1) in order to capture larger market shares and it is proved successful. As only minor changes can be made on beer product price, Carlsberg Malaysia focuses on using non-price methods to promote its beer brands such as sponsorship, organized events, beer parties and promotional events. Hence, their products can be differentiated from other competitors’ products.

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3.5 CARLSBERG PILSNER PRODUCT LIFE CYCLE The product life-cycle of Carlsberg Pilsner (Carlsberg Premium Beer) is illustrated as below:

Illustration 14: Product Life Cycle Stages 3.5.1 DEVELOPMENT STAGE During development stage, a firm has not received any sales revenue but high level of cost is incurred on product innovation and development. It usually begins with a product concept, product design, feasibility test on the product in potential target market and other external factors which may affect the product development. In the early 19th century, Carlsberg Pilsner was initially designed and developed in Carlsberg Laboratory in Denmark. The technique to separate yeasts that is suitable for brewing is discovered here. The product concept is developed, which provides a flavor of hops, grains, pine needles, sorrel and Danish summer apples with alcohol content of 5%. The beer label was designed by a Danish architect, Thorvald Bindesbøll with a pay of EUR 40 for the job. Hence, high research and development cost was incurred in this stage.

Illustration 15: Carlsberg Label Designer, Thorvald Bindesbøll and His Design 17

3.5.2 INTRODUCTION STAGE This stage covers the time period when a product’s concept is initiated until the time when it is being introduced to the market. It involves establishing the product’s brand name in the market and building product awareness among potential customers. There are two strategies that can be implied, which are the penetration strategy or the skimming strategy. From 1969 to 1972, Carlsberg Pilsner was introduced into Malaysia market after incorporation of Carlsberg Brewery Malaysia Berhad and completion of Carlsberg brewery construction in Shah Alam. As a new comer in Malaysia, Carlsberg Malaysia implemented market penetration strategy where low price is set for Carlsberg pilsner in order to gain market shares quickly. Besides, Carlsberg Malaysia created Carlsberg Pilsner awareness among the beer consumers through various advertising and promotion campaigns. The main vehicles for the company are press advertising, cinema and in-store advertising. Hence, high advertising cost was incurred during this stage.

Illustration 16: Carlsberg Factory in Shah Alam 3.5.3 GROWTH STAGE This stage indicates where the product starts to grow. In term of sales, the market share increases, customers are more willing to accept and purchase the product thus profit starts to flow in the business. Hence, the business will concentrate on advertising their product to establish a strong, defensible market position. In 10 years time, Carlsberg Green has become the No.1 beer brand with more than a 50% share of the Malaysia Beer Market. The sales of Carlsberg Pilsner have been 18

growing rapidly from 1980s, where we can observe at least an 8 percent growth from year to year. In order to further promoting Carlsberg Pilsner popularity among consumer groups in Malaysia, Carlsberg Malaysia spent approximately 10% of its annual revenue on advertising and promotion campaigns every year. The company widens its distribution channels and utilizes various advertising channels in order to achieve its marketing objective (market share leadership).

Illustration 17: Carlsberg Advertising Activities 3.5.4 MATURITY STAGE Under this stage, the sales growth is slowing down or stabilizes as the product has already achieved acceptance. The key to survive in the market is to differentiate the product by adding or enhances the features and quality. From late 90s till now (2013), sales of Carlsberg Pilsner has began to stabilize and reached maturity period. Under this stage, the beer awareness among the consumers in Malaysia is strong. Hence, Carlsberg Pilsner price will fall and more promotional strategies are carried out in order to retain market share in Malaysia beer market. Besides, Carlsberg Malaysia may launch new Carlsberg product with different feature such as Carlsberg Gold in order to reach new customers or gain more market shares.

Illustration 17: Carlsberg Pilsner/Lager (OLD) and Carlsberg Gold (NEW) 19

3.5.5 DECLINE STAGE During this stage, most of the products had to stop producing due to the low sales. Hence, the firms have to choose either they want to postpone the decline or just discontinue the production if necessary. Carlsberg Pilsner has over 100 years of history and high popularity among beer drinkers and there are still high demands from various consumer groups. However, a decline in sales might occur due to strong competition in the market. In order to postpone the decline, Carlsberg Malaysia re-launched and Carlsberg brand by changing its logo and introduces a new slogan “That Calls for a Carlsberg!” in the year 2011. By exercising the global campaign, they aimed to maintain their mature markets and explore the newer markets. The launch of new positioning will continue to support Carlsberg Malaysia in the beer industry.

Illustration 18: Re-launch of Carlsberg Flagship Brand

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4. BIBLIOGRAPHY 1. Wiki, 2013. Is the demand for beer elastic or inelastic?. Viewed on 9 June 2013. Available from: < http://wiki.answers.com/Q/Is_the_demand_for_beer_elastic_or_inelastic > 2. Kotler, P., Wong, V., Saunders, J., and Amstrong, G. 2005. Principles of Marketing 4th Edition. London: Pearson Prentice Hall. 3. Wiki, 2013. Carlsberg Group. Viewed on 11 June 2013. Available from: < http://en.wikipedia.org/wiki/Carlsberg_Group > 4. Tutor2u, 2013. Pricing- Pricing Strategies. Viewed on 14 June 2013. Available from: < http://www.tutor2u.net/business/gcse/marketing_pricing_strategies.htm> 5. Wiki, 2013. Pricing Strategies. Viewed on 15 June 2013. Available from: < http://en.wikipedia.org/wiki/Pricing_strategies > 6. FindAssignment, 2013. Carlsberg Brewery Malaysia Berhad. Viewed on 15 June 2013. Available from: <

http://findassignment.blogspot.com/2008/05/carlsberg-brewery-malaysia-

berhad.html > 7. Carlsberg Malaysia, 2013. CSR Report 2012. Viewed on 15 June 2013. Available from: 8. Wiki, 2013. Carlsberg Group. Viewed on 18 June 2013. Available from: < http://en.wikipedia.org/wiki/Carlsberg_Group > 9. Finding Universe, 2013. Carlsberg A/S History. Viewed on 18 June 2013. Available

from:

<

http://www.fundinguniverse.com/company-

histories/carlsberg-a-s-history/ > 10. Wiki, 2013. Product Lifecycle. Viewed on 22 June 2013. Available from: < http://en.wikipedia.org/wiki/Product_lifecycle >

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