Asia Pacific Breweries (APB) is the leading beer brewery in the Asia Pacific region. The company’s most iconic product, Tiger Beer, is notably one of Singapore’s most successful brands in the world and is valued at S$820 million. The lucrative beer industry has attracted numerous foreign beers to vie for the market share in Singapore which is valued at S$562. 7 million. As the beer industry in Singapore is reaching maturity, beer companies have to find innovative means to remain competitive to have a profitable share of the market.
Recently, there have been increasing trends of younger customers consuming alcoholic beverages. With improvements in economies, education and technology, younger consumers have acquired a stronger purchasing power and frequent purchasing patterns. Beer companies are aware of the recent change in trends and have turned their attention to market and invest in this segment. Akin to the changing market conditions, our target market for Tiger Beer is those aged between 18-30 years old.
Tiger Beer has a strong brand equity in Singapore and abroad, however it may appear ‘old-fashioned’ to the younger consumers. To assist the consumers to change their perception of our product, we have derived a market plan. This report aims to apprise the management of our market plan in terms of our strategies comprising the 4Ps of Tiger beer (Product, Price, Placement & Promotion). The plan also includes an action plan along with control measures to indicate the various processes in which our strategies will be executed and supervised effectively.
Asia Pacific Breweries (APB) corporate vision is to be one of the leading brewers in the Asia Pacific region, and its strong portfolio of brands is synonymous with quality and innovation.
Asia Pacific Breweries Limited upholds the values of integrity, competence and commitment to excellence and a high standard of corporate governance. Its aim is transparency and accountability, while creating and enhancing long-term shareholder value through enterprise and strategic growth, in its continual quest for new markets for its beers. (Tiger Beer Annual Report, 2004, Pg. 73)
Keeping focus in our vision, staying sharp in our execution, strengthening the company’s competitive advantage. (Tiger Beer Annual Report, 2008, Pg. 21)
Malayan Breweries Limited, was established in 1931, and was renamed Asia Pacific Breweries, APB in 1990. It is a collective business enterprise between Heineken International and Fraser & Neave (F&N). APB’s primary activities comprise the production and distribution of beer and stout products locally. Since their establishment, APB has seen their business expand globally, providing numerous opportunities to diversify and develop new brews to bolster their portfolio.
Presently, APB possesses an illustrious portfolio of more than 40 beer brands, such as Tiger Beer, Heineken, Barons Strong Brew and ABC Extra Stout (Asia Pacific Breweries Limited, Corporate Profile). In 2010, Singapore’s beer industry acquired a total revenue of $769. 2 million with a compound annual growth rate (CAGR) of 4% within 2006-2010. Lager sales which constituted 73. 1% of the market’s overall value generated total revenue of $562. 7 million, making it the most lucrative beer variant in the beer market. Asia Pacific Breweries (APB) is the market leader in the Singapore beer industry with a market share of 64%.
Tiger Beer is Singapore’s mainstream beer, which boasts an impressive portfolio brand value of S$820 million. (Marketline 2012, Beer in Singapore Summary) Brewed from the finest of ingredients, under the most stringent of quality controls and meticulous brewing methods, Tiger Beer has been rated as one of the finest beer in the world for its distinct taste. It has claimed numerous recognized accolades around the world for several characteristics but most notably for its taste. (Asia Pacific Breweries Limited, Corporate Profile) 2. 5Market Trends.
2011 proved to be a good year for beer, with a 7% total growth volume, amounting to 108 million litres. The demand for beer products continue to grow steadily with the escalating trend of social drinking in Singapore. Previously restricted to venues such as clubs and bars, beer products are increasingly being consumed at local coffee shops or hawker centres or being purchased off the shelf. (EuroMonitor International 2011, Beer in Singapore)
Prospect Beer is expected to post a total volume CAGR of 4% to reach 130 million litres in 2016.
As the social drinking scene in Singapore consistently expands, beer will be able to expect a steady growth. However, in years to come, Singapore’s domestic beer industry will experience a slowdown as beer in Singapore is reaching maturity. (EuroMonitor International 2011, Beer in Singapore) 2. 7Competitors In 2011, local company Asia Pacific Breweries dominated the competition with a 64% volume share. This was due to the overwhelming popularity of its brand, Tiger, which had a 35% volume share. Tiger Beer faces strong competition, but can vie for higher market share through product differentiation.
Other rivalry brands were Heineken and Carlsberg. The intensity of rivalry helps decide the extent of the value of brands and products in which will create head-to-head competition. It also determines the attractiveness of the industry. Heineken, is the third largest brewer in the world and appreciated beer in Singapore. Based on volume, it has an annual beer production of 139. 2 million hectoliters. It has 125 brewers in more than 70 countries. Heineken has the widest international presence of any international brand and is distinctive by its green bottle.
The Carlsberg Group is among one of the leading brewery in the world, with a large portfolio of beer and other beverage brands. In Singapore, Carlsberg has been marketed for more than 30 years and is acknowledged as the number one imported premium beer in Singapore and number two in the total market. It holds a 19. 9% market share in Singapore currently. (Calsberg financial statement 2011, Solid performance in NW Europe and Asia; changes implemented in Russia) The beer market is also fiercely challenged by other alcoholic beverages such as the spirits (Vodka, Whiksy & Gin), and wine.
Over the last 12 years, there has been a marked increase of Singaporeans consuming alcohol. The increment was particularly large between 1998 and 2004, in younger age groups and in women. The prevalence of alcohol consumption amongst the Singapore population is rising and approaching Western levels. The change in the drinking culture of Singaporeans can be evidently observed. This could be due to recent improvement in the economy, as well as the increased popularity towards leisure activities. Positive consumer sentiments have also influenced consumers to spend more on social drinking activities. (Lim et al 2007, Discussion section)
Economic Current economic situation affects the purchasing powers and spending patterns of consumers. The Monetary Authority of Singapore (MAS) expects inflation to average between 2. 5- 3. 5% in 2012, remaining elevated over the next few months before easing in next year’s second half. High inflation rates may increase the price of the product, which in turn cause demand of beer to fall and also reducing consumer’s confidence in purchasing our product (Heng, 2011). Consumers who just met the legal age to drink would primarily be young adults with minimal purchasing power, followed by white-collar adults who have higher purchasing powers.
The purchasing pattern of our consumers would increase along with their age due to their income, which ultimately decides their budget constraint. Nonetheless, the Singapore economy for Tiger Beer remained vibrant as tourists arrivals rose despite an increasingly competitive marketplace. 3. 3Technology As technology advances, Beer producers are using various forms of technology to increase productivity levels. Tiger beer also uses advance technology like “Twin-ice” technology for Tiger ice freeze and the “Cold-suspension” technique for Tiger Crystal, for consumers to enjoy ice cold beer while maintaining the quality and taste of the product.
Cyber activities are channelled via various mediums like Facebook, Twitter, YouTube and its own website. Such channel allows Tiger beer to build a stronger relationship with both Tiger sponsored activity and consumers, to build credibility and positive association with the brand within the creative community. Since the launch of the new site almost all key metrics has seen a great improvement. On Facebook, Tiger’s fans have increase 60% each month. Tiger’s database has also increase by 63% between September and November 2011.
If Tiger Beer does not keep up, it will soon find their products outdated and miss new markets and opportunities. (Kentico, Pg1) 3. 4Socio-cultural Being a multi-racial society, Tiger beer is more closely associated with the Chinese community in Singapore, as 13% of the population are Malay-Muslim, and are forbidden to consume alcohol by Islamic law. (Heineken Financial Markets Conference Singapore 2011, Introduction section) Therefore, to gain more market share, Tiger beer has to market campaigns to cater to specific audience to capture the customer value.
For example, marketing campaigns during Chinese New Year can tap into the auspicious meaning of Tiger, which symbolises loyalty. On the contrary, alcohol consumption is associated with socially ill characteristics such as addiction, road accidents, domestic abuse, unemployment and medical problems. Although moderate alcohol intake has been found to be beneficial in recent years, the harmful effects of alcohol still outweighs the benefits. Newer generations are leading more busy and hectic lifestyle. Even though it may affect the time for leisure, consumption of beers at bars and pubs have not declined.
This may be due to the fact that more working adults are drinking alcohol as way of distressing themselves after work (Lim et al 2007, Discussion section). Also, as consumers are more conscious about the corporate responsibilities, the APB foundation has also been established to give back to the host country where they operate in (Asia Pacific Breweries Limited, Community Development). Furthermore in 2012, APB achieved the Singapore Environmental Achievement Award (Manufacturing category for its achievements in minimizing energy, water and waste impacts) (Marusiak 2012, Singapore Environment Awards).
Political Beer is a product that the government exercises strict control upon as it is an addictive product. On the other hand, the government’s implementation on Free Trade Agreement serves as a double-edge sword as it increases Tiger Beer’s opportunity to export their products more readily to expand their business. However, Singapore beer industry also experiences an influx of imported beer brands which will affect Tiger’s domestic business. (Heineken Financial Markets Conference Singapore 2011, Singapore beer market section) 3. 6Natural.
Major environmental factors such as uncontrollable weather conditions have an impact on Tiger Beer. As the ingredients used (such as malted wheat and barley) are being imported, unforeseeable adverse weather conditions (floods, drought, winter) could delay the harvesting and manufacturing process, thus affecting APB sales performance for the year as consumption of Tiger Beer would have slight marginal decrease in figures. (Tiger Beer Annual Report, 2011, Adding Production Capacity and Capabilities In Vietnam, Pg. 6)
Strengths Tiger Beer has strong brand equity in Asia, especially in Singapore as it is a locally-brewed beer that is specially catered for the locals. The distinct taste and flavor makes it the perfect remedy in the hot and humid tropical weather, also making it perfect companion to go along with delectable Asian dishes. (Drinkworks, Tiger Beer) Tiger also has a cost advantage as being a local brew; the price is lower than other imported brands. Although being highly affordable, Tiger Beer does not reduce on the quality by using cheap supplies.
It further assures the consumers that good quality ingredients are being use and stringent quality checks are done to obtain the best that Tiger Beer can offer. Furthermore, their accolades for their quality brew justifies their claims.
In the beer beverage market, brand-switching occurs frequently and affects brand loyalty. A strong competition from global brands means limited market shares in the Singapore market. It faces difficulties in competing with foreign brands as they seem to be superior in taste which local beers are not comparable to.
Young local consumers depict Tiger Beer as ‘old-fashion’, and seek for other foreign brands they perceive Western products with a “classy and quality” impression. Furthermore, hard liquor is often preferred over beer among youngsters today as there is more satisfaction from the high alcohol intake. Consumers have a wide range of alternatives to choose from since all are readily available at supermarkets as well as common drinking venues Opportunities Winning, which is the heart and soul of Tiger have not changed as we move into a new age. It also resonate the uniqueness of the ‘striving to win’ aspect of the Asian culture.
Tiger beer connects with football fans through its close association with the sport. By being the broadcast sponsor of the Barclays Premier League, it gives fans a new and unique experience centred on football, friends and the Tiger Beer. With many other brands in the market, consumers have a large variety of brands to choose from. Many bars and restaurants usually carry several brands of beers. However, through effective marketing and promotion, Tiger Beer can create the demand for its products and with that value instilled in the name, many bars and club will still continue to carry the brand.
The ability to charge customers different prices with differences in the value created for those buyers usually indicates that the market is characterized by high supplier power (Porter, 1998). Tiger Beer minimizes the power of suppliers through close cooperation with the raw materials suppliers and thus minimizing the cost impact. Furthermore, as Tiger beer have recently been purchased by Dutch brewer Heineken, which also have strong international acclamation. It is able to expand Tiger Beer further with its expertise. 4. 4Threats.
Although Tiger Beer is one of the most highly-consumed beers in Singapore, more varieties of beer have entered the Singapore market due to its free-trade policy. The beer industries have become more competitive as consumers have more substitutes to choose from. Constant advances in technology and innovation of other beer brands cause threat to Tiger. In addition, other brands (e. g. Heineken) had experienced increased volume growth as it was embraced as the preferred international beer. This factor could lead to reduced market share and profits for Tiger Beer as there may be brand switching.
Many health-related illnesses, such as liver and coronary diseases, have been linked to alcohol consumption. Drinking in moderation is advisable and can be beneficial, but drinkers often consume above the recommended amount. Numerous journals and news articles documenting the risks of alcohol consumption continue to emerge, which aims at discouraging alcohol consumption. As Singaporeans have become well-educated and health conscious, some consumer may eventually stay away or decrease their alcohol consumption for the sake of their well being.
(Livestrong, Owen pearson, Feb 2011, beer drinking related health problems) Other threats may involve drink-driving laws that are being tightened due to increasing rates of drink driving fatalities. Despite increased surveillance on drink driving related cases, these cases increased by 8. 2% in the year 2010, reflecting that many drivers are not obeying the law. This may evoke the government to impose stricter laws against disobedience. This may eventually lead to a decrease in sales and drinkers in pubs and clubs.
(Channelnewsasia, Vimita Mohandas, 10 Dec 2010, Accidents involving drink drivers up to 8. 2%) 5. STP (segmentation targeting positioning) 5. 1Statement of Market Objectives (SMART) Our marketing objective for Tiger beer is to increase its market share by 5% so as to maintain a CAGR of 4% over 12 month period. This can be achieved by building profitable customer relationships which requires continuous interaction with our consumers, via several touch points. Through detailed construction of an effective marketing mix, the marketing objective will be achievable.
This can be accomplished by creating extensive brand awareness through methods of aggressive promotional efforts. Market research will analyze the success of its promotional efforts. Market research may include collection of primary data from its distributors and internal database to validate its sales figures as a gauge of how effective our promotion is. Secondary data from external sources may provide information of how extensively our brand has been advertised and recognised. While holding on to existing customers, Tiger Beer would want to increase its market share by extending to a younger contemporary age group.
Through innovative concepts, Tiger Beer may produce variants of its actual product and repackage its containment vessels to appeal to the younger target market. Tiger Beer may want to position its product on its differentiated imagery and unique selling proposition, “World Acclaimed” brew. With that said, providing a good quality while marketing at a low selling price would pose challenges to Tiger Beer competitors.
We have categorised Singapore’s beer market into the various age groups, to better assist us in making the appropriate choice of market segment. We have identified 3 age groups: 18-30, 31-45 and 46-60.
These categories are based on a demographic segmentation approach with an assumption of their consumption behaviour and effects on Tiger beer market share. The segmentation table will further illustrate the categorisation of our market plan. Demographic Age 18-30 30-45 45-60 Segmentation Income Reasonable source of income Stable income ($2,000-$4,500)Stable income ($1,500-$3,000) ($2,000-$4,500) Occupation Students/Unemployed High proportion has a stable High proportion has a full time white and blue stable full time white.
White and blue collar jobs (under collar jobs and blue collar jobs, probation, early starter) some are retirees Psychographic Lifestyle Active night-life culture, while Busy lifestyle, due to Relaxed lifestyle pace Segmentation working hard to secure job stressed working conditions due to stability orretirees.
Purchasing habits and Perceives beer with a cool trendy Appreciates taste of beverageAppreciates taste of preferences image beverage Cheaper alternative of beer Behavioral Segmentation Benefits Image, cheap Quality beverage, image Quality beverage,image Loyalty Status Tend to do beer switching to try new Loyal customers, little brandMostly are loyal brands switching consumers regardlessof beer prices,established image Consumption.
Moderated consumption rates due to Consumption rates increased, Consumption rates are characteristics budget constraints consumed during socializing highest, as consumers events, or after work are loyal drinkers Increased consumption due to peerpressure for binge drinkingsocialization & image 5. 3Target Market Our target market is the 18-30 age group. Research indicates an escalating trend of younger consumers who patronise outlets for nightlife activities, which presents a profitable market share for Tiger Beer.
The 31-45 age group would prefer spirits and wine as their choice of beverage while a substantial amount of consumers from that age group may have already consisted our existing market share. However, extending interest to this market segment may present its benefits as well. The last group of age between 46-60 will not be marketed to as a great amount would constitute our existing market share. Furthermore, some may not be interested in our product as some perceive our product as detrimental to their health. 5. 4Positioning A product’s position is the way the product is defined by consumers on important attributes – the place the product occupies in the mind of the consumer relative to competing products.
Tiger Beer has identified the factor that makes a difference in marketing efforts is perception, and perception is believed to be reality. What customers choose to perceive is true is the truth to them. Thus, Tiger Beer tracks customers perception relentlessly using more than one independent brand research agencies, so that they can immediately rectify perceptions that deteriorates the brand’s positioning.
According to consumers, brands that excel are those who were the first movers in the market. Unfortunately, this was not the case for Tiger. Nevertheless, Tiger beer invests heavily on its value proposition which is its unique selling proposition as the “World Acclaimed” brew. Being known as such, it greatly differentiates Tiger beer from its competitors.
Perceptual positioning maps depicts consumers perception of their brands versus competing products on important buying dimensions. The use of the perceptual positioning map coupled with extensive research can be used to effectively monitor Tiger beer and its competitor’s brand-positioning strategy. [pic] The perceptual map illustrates the various common beers available in Singapore. Comparisons are drawn between the tastes of the beverage versus the prices. The extent of area of the circle would indicate the current market share the beer company occupies in the Singapore beer industry. Tiger beer is the leading beer brand, followed by Carlsberg in 2nd and Heineken, 3rd.
Because of the brewery set up in Singapore, Tiger beer is able to price its beer products at a lowest price possible against their competitors and gaining an advantage. MARKETING MIX (4Ps) Product The Singapore beer market is crowded with a variety of beer brands brewed locally or imported from overseas, vying for attention and its profitable market share. It is important for Tiger Beer to remain competitive amongst its competition, especially relevant to its younger target audience of 18-30 age group. It is necessary for Tiger Beer to strengthen its brand position, to increase loyalty and eventually improving its market share. In brand building, perception is valued more important compared to quality.
Originating from Fraser & Neave and Heineken, Tiger beer would produce a brew of high quality in relation to Heineken’s recognized history of meticulous brewing methods and quality control. Furthermore, branding is a powerful strategic asset which greatly influences the consumers buying decision. Brand positioning is important as it would determine how successful the brand would be. To be successful in brand positioning, it is essential for Tiger to acquire a category and be the first to own it. Unfortunately for Tiger, its category is lager beer which has existed for centuries.
To improvise, Tiger will promote itself as the world-acclaimed beer in Asia. Tiger Beer would position its brand based on 2 factors, its attribute and the belief & value (Tai, 2008).
According to Kotler, a product is defined as anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. Kotler has also classified three levels of products: Core customer value, the actual product, and additional product. (Kotler et al, 2011) The core customer value of a product is intangible in nature. However, defining it clearly would fix the product for market excellence. Tiger Beer’s core benefit to its customer is its identity. People drink a specific brand of beer because it says something about them. Tiger Beer strongly positions itself on this belief of identity to strategically attract consumers.
The actual product of Tiger Beer is an alcoholic beverage, which is categorised into a consumer shopping product. Shopping products are often differentiated. Customers will tend to draw comparisons between such products based on its suitability, quality, price and style. Tiger Beer’s attribute is its quality product which harnesses its distinctive taste that can be attributed to the finest natural ingredients such as imported malted barley from Australia and Europe and bitter hops from Germany. Another factor that contributes to their palatable beverage is their modified fermenting methodology which allows the brew to maintain its superior quality despite the unfavourable environmental conditions in Asia.
To maintain its competitive edge and quality image, Tiger Beer actively participates in beer competitions held around the world annually, achieving success in majority of the competitions. Tiger Beer owns an astonishing collection of awards and accolades from around the globe in recognition for its distinctive brew, to date. (Asia Pacific Breweries Limited, Tiger Beer) Renowned for its world acclaimed brew over the years since its establishment, Tiger beer is able to capitalize on its existing strong brand equity to develop newer products to attract new customers and maintain their existing market pool. Tiger Beer adopts the line extension strategy to develop their new products such as Tiger Crystal.
This strategy also serves to deepen Tiger’s product mix in terms of its product depth. While retaining its authentic brew, Tiger Crystal is subjected to various technological advances to acquire distinguished characteristics so as to carry out its aim to attract younger drinkers who would appreciate a lighter tasting beer. For example, Tiger Crystal brew process include the “Cold Suspension” technique so as only to provide the same robust flavour of a full-bodied brew, yet a smooth and velvety palate, followed by a clean aftertaste when consumed. (Asia Pacific Breweries, Chill with Tiger) The packaging of Tiger Beer plays a vital role in building its brand.
Packaging is important as consumers are in direct contact with the packaging, and it assists in the differentiation of the brand from its competitors. Unlike its competitors such as Heineken & Carlsberg green bottles, Tiger beer serves its beer in amber glass bottles. However, Tiger beer has to remain competitive by producing beer cans to suit the different requirements of its consumers. As amber would appear to deter its consumers on beer cans, Tiger beer used vibrant colours such as electric blue for its cans. This adoption makes Tiger beer stand out from its competitors on the shelves of alcoholic beverages. Other innovations to entice younger consumers include shrink wrapped packaging on its bottles. (Tai, 2008)
It is important to strategize the prices of Tiger products to maintain a competitive edge over its competitors. As Singapore’s iconic beer beverage, Tiger Beer still remains as the affordable option of beer available and is moderately cheaper than its competitors. When setting the price, there are several involved. Firstly it is important to monitor the selling price as high prices may bring no demand while low prices may bring no profits. Therefore, Tiger beer should monitor its fixed cost, variable costs and total costs for producing tiger beer. This process of setting price based on costs for producing tiger beer is called cost based pricing (Rawes, 2011).
The beer beverage industry proves to be a monopolistic niche market, in which prices between Tiger and its competitors’ products will greatly influence consumers’ decision. It is therefore critical for Tiger Beer to consider its price placement to prevent loss of their current and potential market. The second consideration is the price elasticity of Tiger Beer. Price elasticity affects the quantity demanded for products as it determines how responsive the product is to price. Tiger Beer industry is considered to be elastic, as higher price may lead to brand switching (Kotler, 2011). By implementing product line pricing whereby price is set between product line items, different product within the line will have different prices.
In this case, the original Tiger Beer is the primary product, while Tiger Crystal and Tiger freeze are additional benefits modified from the original Tiger Beer, and are priced differetly. Segmented pricing is used for Tiger Beer and it takes several forms. Firstly in, product-form pricing, different products of Tiger Beer like Tiger Crystal and Tiger Freeze are priced slightly differently. Next, for location pricing, Tiger Beer sold at different locations like supermarkets, pubs, restaurants and hawker centres will be at different prices. Nevertheless, segmented prices should reflect real differences in customers’ perceived value.
Otherwise, in the long run, the practice will lead to customer resentment and ill will (Kotler, 2011). When Tiger Beer comes out with a new product, the company must study the market and competition before setting a price for new products. A company will usually study demand for industry products before setting a new product price. As Tiger Beer is elastic, market penetration strategy is recommended.
The company will deliberately price the product lower than competitive products to achieve a high business volume. In this way, it can quickly increase market share, proven according to Net MBA website (Suttle, 2009). Price is always the main problem faced by many companies, and most companies do not handle pricing well. Therefore, pricing strategies are very important to help set the right for the product (Kotler, 2011). 6. 3Placement (Distribution).
The most common distribution method consisting majority of Singaporeans drinking Tiger would be through club, pubs, and coffee shops. Depending on the place and convenience of consumers, young working adults tend to visit clubs or pubs while the more senior drinkers would choose to patronise pubs or coffee shops. Football matches are closely affiliated with Tiger Beer in Singapore.
Coffee shops, pubs and clubs provide access for consumers to watch live matches, thus increasing the influx of consumers ordering a Tiger Beer to suit the lively atmosphere of both drinking and socialising through football matches. Such “chain reaction” is common whenever events like this are held. Increasingly we tend to see promoters clad in Tiger Beer uniforms, promoting Tiger beverages.
This increases the connection between the promoter and consumer via interaction followed by the decision process of the consumer to make a purchase (Melvin Kee, August 27, Marketing with Melvin: Tiger Beer Social Network Makes Me Thirsty, Viewed on 18 September 2012).
To maintain its competitive edge against its competitors, Tiger Beer interacts with young and IT-savvy consumers via online means. Orders can now be done online. Home parties or corporate events which are common among younger generation drinkers will have an additional option to choose whether to have alcoholic beverages made available to their guests. Instead of waiting for consumers to visit places where the product is served, we bring the product to their doorstep. Convenience is the key distribution strategy for consumers to easily have access to our products.
With a catering hotline made available for consumers to place their order, prior to a minimum of 3 days’ notice, and information regarding online delivery prices easily accessible through the homepage, there is no better way to serve right to the consumer’s doorstep (Tiger Beer, Tiger Home Delivery, Viewed 18 September 2012).
For Tiger Beer to be successful in their distribution strategies, a strong supply chain is important with use of effective management and control that can help realize significant cost savings for manufacturers. A typical supply chain would include the upstream and downstream concepts. Upstream concept requires effective management and control of supplies and so as to minimise production delays leading to losses.