1. Beijing Red Star. by Nils Boesel and Sebastian Hornschild
21st of November 2011

2. Advertising Message Objectives Advertising Appropriation
Agenda
Situation Analysis
Advertising Message Objectives
Advertising Appropriation
Creative Strategy
Evaluation Strategy
Conclusion

3. Advertising Message Objectives Advertising Appropriation
Agenda
Situation Analysis
Advertising Message Objectives
Advertising Appropriation
Creative Strategy
Evaluation Strategy
Conclusion

4. Situation Analysis: Company
Beijing Red Star Company founded in 1979
On of thelargest Liquor Producer in China ( 537 tons of liquor in 2010)
Most commonly Baijiu among Blue-Collar workers across norther and north-eastern China
Broad range of different products
On the German Market for almost five years

5. Situation Analysis: Market Research
Overall Revenue: > 2 Billion US-$ (ranked 11th in Europe and 45th in the world)
Average German drinks approx. 8 bottles/year
German Liquor Market dominated by „Jägermeister“ and „Smirnoff“ Vodka
Herb Liquor with 22% market share first, followed by clear liquor, rum and vodka
 HongXing Erguotou categorized as clear liquor

6. Situation Analysis: Market Research
Liquor
Clear liquor
Vodka
Rum

7. Situation Analysis: Market Characteristic
Predominantely small family owned liquor producers
Berentzen, Turnover: 170 Million US-$
Rum 80 (Jagertee), Turnover: 48 Million US-$
CONTRARY: Diageo, Turnover: 10 Billion US-$
Comparatively high liquor tax: 0,7l Rum with 40% alcohol percentage = 3,65 Euro tax (excl. VAT)
Law restrictions: advertisements addressed to minors are not allowed

8. Situation Analysis: Customer Insight Search
Most revenue generating customers
China
Germany
Conservative
Liberal
Traditional Values
Liquor for Socializing and Fun
Liquor drinking as a habit of the older aged
Male person: age between 40-65
Male and Female : age between 20-35
Sources: McKinsey Study on the Liquor Market 2010

9. Situation Analysis: Customer Insight Search
In 2007 more than 712 Million Bottles á 0.7 liters have been sold
Market penetration of 68%
Between choose liquor by price („The cheaper the better“)
Starting from 2008 a new consumer trend can be identified
Quality and Brand name is becoming more important
Sources: McKinsey Study on the Liquor Market 2010

10. Situation Analysis: Customer Insight Search
Conduction of an online survey via and Social Networks in Germany
Participants: 213; Valid surveys: 198
Persons that consume liquor on a regular basis(minimum once a week): 112
Share of people between years who consume liquor on a regular basis: 73%
Most important attributes during purchasing decision: quality(58%), brand name (19%), price(15%), taste(8%)
Information sources: TV(45%), magazines(29%), radio(20%), online(6%)

11. Situation Analysis: Customer Insight Search

12. Situation Analysis: Customer Insight Search

13. Situation Analysis: Customer Insight Search

14. Situation Analysis: Key Advertisement Problem
HongXing Erguotou barely known in the Western Hemisphere, no exception Germany (only 2 respondents out of 198 knew the brand)
Beijing Redstar tried to enter the European market
Missing Communication and Advertisement Strategy for German Market
No consistency and motivation
NO brand awareness and recognition
Code of Conducts for Advertisement of the Liquor Industry!

15. Situation Analysis: Opportunities
Most valuable liquor customers: young and middle-aged adults (drink alcohol for socializing and fun)
More attracted to brands than the older aged
In the industry for clear liquor no distinct or dominant producer can be found (in contrast to herbal liquor and Vodka)
entrance barriers are comparatively low in this market
HongXing should communicate its distinct values and cultural background (contrast to competition)

16. Situation Analysis: SWOT
German Liquor Market value of 2 bn US-$
Quality 1# in the purchasing decision of German liquor consumers
Liberal market
Consolidation of the Market  Large producers(e.g. Diageo) with high market power
Advertising restrictions are becoming stronger
Unique and exotic product
Successful in China
Good advertising strategy
Low advertising budget
Very unknown in Germany W O T

17. Advertising Message Objectives Advertising Appropriation
Agenda
Situation Analysis
Advertising Message Objectives
Advertising Appropriation
Creative Strategy
Evaluation Strategy
Conclusion

18. Advertising Message Objectives
Communication Goal:
HongXing Erguotou to be the new popular drink among the young target group on
Focus on building brand awareness
Goal: 10-20% brand awareness after the first year  large media campaigns
Long-term Advertising penetration to achieve 60% brand awareness after the third year
Response Goal:
20-30% market share in the segment of „clear liquor“

19. Advertising Message Objectives Advertising Appropriation
Agenda
Situation Analysis
Advertising Message Objectives
Advertising Appropriation
Creative Strategy
Evaluation Strategy
Conclusion

20. Advertising Appropriation
Hongxing major player on the Chinese market
Still government-owned
First real involvement on an international stage
Tendency for Low-risk involvement
Period:
Liquor consumer market not cyclical  campaign can be started at any given time of a year
Higher spendings at the beginning to get awareness

21. Advertising Appropriation: Media Channels and Media Strategy
Self-prescripted code of conduct of the German liquor industry
Assumption: Comparatively small advertisement budget (1.3 mn €)
TV campaigns too expensive
Focus on print ads and billboard-ads
Brand Awareness
Recognition
1st Year
20%
10%
2nd Year
35%
3rd Year
50%
30%
4th Year
60%
40%

22. Advertising Message Objectives Advertising Appropriation
Agenda
Situation Analysis
Advertising Message Objectives
Advertising Appropriation
Creative Strategy
Evaluation Strategy
Conclusion

23. High Quality, Unique Taste, Exotic Origin
Creative Strategy
Focus on the distinct, unique and outstanding attributes
High Quality, Unique Taste, Exotic Origin
China
Double Distilled
Sorghum
Fit with the young and middle aged target consumers!!!

24. Creative Strategy: Message
HongXing liquor wants to exceed the consumer expectation
Stronger, Greater, Taller, Better are often terms to describe the Chinese emerging market (link to the liquor‘s origin)
Both elements as part of the messages

25. Creative Strategy: Message

26. Creative Strategy: Message

27. Advertising Message Objectives Advertising Appropriation
Agenda
Situation Analysis
Advertising Message Objectives
Advertising Appropriation
Creative Strategy
Evaluation Strategy
Conclusion

28. Evaluation Strategy
Pretest: Qualitative and Quantitative interviews of people that belong to our target group
Research on the German Test Market Hassloh
Surveillance Tests: Different households in different regions will be tested on their brand awareness
Post-test: evaluating the effectiveness of the campaign  results for the product launch in other European countries

29. Advertising Message Objectives Advertising Appropriation
Agenda
Situation Analysis
Advertising Message Objectives
Advertising Appropriation
Creative Strategy
Media Strategy
Conclusion

30. Exceeds your expectations!
Conclusion
High Quality
Unique Taste
Exotic Origin =
Beijing Redstar.
Exceeds your expectations!

31. Thank you!