Strategic Marketing 

Introduction

Carabao Group Public Company Limited (CBG) is Thai company that operates by holding shares in subsidiary companies (Holding Company). At present, the company invests in shares of subsidiaries that are the 3 main business companies, namely:

Carabao Tawandang Co., Ltd. (CBD), a manufacturer, marketing and selling energy drink products under the Carabao Dang trademark and other beverages. At present, CBD produces 2 types of beverages; Energy drink, namely "Carabao Dang", and Electrolyte drink under "Start

Plus' trademark

Tawandang DCM Co., Ltd. (DCM), a company that manages the distribution of products of the group to the domestic trade channels through traditional trades and modern trades

Asia Pacific Glass Co.

, Ltd. (APG), a manufacturer and supplier of glass bottles and machine packaging for drinking products of the group

The company aims to expand the sales to both local and international markets in the high potential  target countries.

This assignment will use the terms "Carabao" or "CBD" to call the company and drink products for the consistency throughout the paper.

Review Porter's five forces model relevant to the organization

Porter's Five Forces Model is a popular and effective technique for analyzing industry competition. The model is a commonly used as analytical tool for examining the competitive environment in an industry.

Hence, the Five's Forces Model is selected to analyze the competitiveness of CBD in the market environment as follows:

Threat from New Firms Likely to Enter the Market:

By entering into the market as a new firm each time requires the relatively high investment; starting from the product research, developmen, production, marketing, including advertising and sales promotion.

To make the product well known, receive good feedback from consumer, and can generate revenue from sales at a satisfactory level for that new entry in the energy drink market will be considered difficult.

Competition from existing manufacturers in the market:

Energy drink and electrolyte drink are highly competitive products from both existing operators and new entrepreneurs who wish to enter the competitive beverage market. To maintain or increase market share for drink products, each entrepreneur, including CBD, must do marketing activities and use the budget to advertise and promote products steadily and nonstop to attain the sales target. The competition is extremely intense.

Pressure from substitute products:

At present, CBD has the patents of product formula, technology and trademarks that owned by company. The key proprieties are the formula of energy drink and electrolyte drink. All of which are considered important trade secrets of CBD in maintaining business competitiveness.

Hence, the cliched product will not be able to simply copy the taste and benefits of CBD drinks.

However, substitution from alternative beverages e.g. coffee, tea, juice, and functional drinks, etc. could be a threat for CBD.

The bargaining power of buyers:

Since the past, the bargaining power of the buyer has a high impact to these business operators. They cannot significantly adjust the price of energy drinks till now. At present, the bottled drinks of CBD, which are 150 ml in size, have retail prices in Thailand, generally at 10 THB per bottle, which considered acceptable choice for customers.

Authority to negotiate with Supplier

The main raw materials used in the manufacturing of products are glass bottles and sugar. The raw materials are about 30.0% ? 40.0% and 10.0% ? 15.0% of the cost of production of energy drink and electrolyte drink, respectively. CBD procures such raw materials from local vendors. At present, CBD has the annual supply contracts with firm local suppliers to specify the amount of raw material supplies and trading prices annually, in advance. It can be concluded that suppliers have less bargaining power to CBD due to the security of long?term contract with suppliers.

SWOT analysis of CBD in Thailand market environment

Strengths

• Strong management expertise with active business expansion plans both in local and overseas markets
• Having owned packaging facility and distribution network
• Robust balance sheet and cash flow, which is ready for future investments. (Note that: CBD is already listed in SET (Stock Exchange of Thailand Market) on 21/11/14 under name "CBG"? Carabao Group PLC)
• Strong brand image with recognized product theme of "Fighting Spirit" and "Aed Carabao" (The local super star life?country Thai singer)

Weaknesses

• Solely and highly dependent on the legendary Carabao band, as a local marketing gimmick
• Difficulty in penetrating the upper market segment, as its brand image is associated with mid to low?income group
• Product diversification is still minimal

Opportunities

• Vast room for market export and penetration abroad. Target on neighbor countries (CLMV: Cambodia, Laos, Myanmar & Vietnam), and highly active for energy drink markets such as UK, USA, China, Brazil, etc.
• New product development to meet demand from rising health consciousness

Threats

• Strong oppositional big brands e.g. M?150, Red Bull, etc. in local energy drink market
• Slow expansion of domestic energy drink market with mild annualized growth about 3?5%
• Intense competition limits ability to raise retailed selling prices
• Substitution from alternative beverages e.g. coffee, tea, juice, and functional drinks
• Government's regulatory controls of energy drink formula in Thailand

Stakeholder analysis of CBD

GBD places importance on the production and development of quality products, as well as, friendly to environment and stakeholders. To meet the needs and satisfaction of consumers, starting from selecting the quality raw materials through the production process with modern technology and standardized clean. While the hygienic safety is through certification of food production standards GMP, certification of hazardous analysis systems, and critical control points in the production of HACCP food. CBD has been approved by the Food and Drug Administration on an International Level, and company has received ISO 22000 standard finally.

Analysis of the stakeholders would provide the basis for the identification and importance of the  stakeholders. It is the interest and influence of stakeholders that are communicated through the policies  of CSR (Corporate social responsibility). These policies of CBD are based upon the considerations that  CBD makes for both consumers and communities.

The company recognizes the importance of participation in social responsibility. Therefore, CBD has numbers of project to help and develop society continuously by focusing on music activities, supporting education, creating careers, and promoting people to be self?reliant. In the past, the company arranged  activities for the benefits of the community and society as follows:

(A) Music projects create value for life

The company has held a band contest. The project aims to create life country music through a band contest to broadcast the music of "Carabao". The contest is for students between the ages of 15 ? 22 years. The winning band at the region level would attend the workshop closely with Carabao music band to convey the knowledge of music that has been accumulated and experienced to Thai people for more than 30 years. The provincial winning group would receive a prize of 10,000 THB. The regional winning group would receive a prize of 20,000 THB with a recognition pledge from company.

(B) My Own Subdistrict Project

The company has organized the project of "My Own Subdistrict" by allowing elementary school students to write essays of good nature and environment that create life values in their subdistricts.

Also, telling good stories about nature and valuable environment in their subdistricts, including the pride of local goodness. Ideas for hometown, that cultivate awareness among youths, would create the true love to the heart, nature and environment of their hometowns.

Every month, the student who owns the outstanding essay would receive a scholarship of 5,000 THB with a certificate. In addition, the subdistrict written to would receive 10,000 THB per subsidy for nature and environment conservation activity.

SMART marketing strategic objectives 2019 goals for CBD:

• ? Increase domestic sales +35% YoY (or +3,500 M THB YoY) in Year 2019
• ? Increase export sales +30% YoY (or +3,000 M THB YoY) in Year 2019
• ? Growth domestic sales through "Cash Van Caravan" (CV) +10% YoY (or +1,000 M THB YoY) in Year 2019
• ? Increase domestic market share of energy drink by 5% in Year 2019
• ? Growth sales from international +10% YoY (or +1,000 M THB YoY) in Year 2019
• ? Expand export sales in New markets (further of CLMV and UK) by 3% in Year 2019
• ? Target to maintain sales expenses spending, and limited at +/?3% YoY in Year 2019 (with previous year spending)

 CBD market segment, justification, and brand positioning

" Carabao Dang" (CBD) is a new model that has never happened before in the Thai business community.

CBD is an energy drink that is tied with the legendary music artist Mr. Yuenyong Opakul (Aed Carabao), the head and lead vocal of life?country music band "Carabao", the most hottest singer in Thailand in the past 16 years ago.

The startup will require sales from "fans" or "followers" of the artist that are enormous all over the country because this type of product is less profitable and requires a large amount of sales per year.

Therefore, the music marketing strategy is used for segmenting the local market. Aed Carabao becomes the brand ambassador himself, while playing the concert and selling CBD throughout the country, including neighbors (CLMV countries).