Key Drivers of Customer Equity in the South African Beer Industry
Date
2012-11-21
Authors
Naidoo, Threveshen
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Abstract
The South African Fast Moving Consumable Goods market is under pressure from
a variety of global and local pressures that include social pressures, economic
pressures and legislative pressures. The South African beer market was valued at
USD 3638.1 million in 2009 (Datamonitor 2010b) which translates to a volume of
2674.3 million litres. The South African Breweries Limited (SAB Ltd), the South
African arm of SABMiller plc. accounts for 87.8% of the market volume, down from
97,5% five years ago (Datamonitor 2010b). The decline in market share over the
period between 2005 and 2009 can be attributed directly to the loss of Amstel from
the SAB stable of brands and the slow encroachment of international premium
brands (IPB‟s) such as Heineken. Changes in brand preference and shifting of
value paradigms may also have played a role in SAB‟s declining market share.
Hence, an understanding of the key drivers of customer equity could provide
insights to arrest this decline in market share.
The purpose of this research was to determine the key drivers and sub-drivers of
Customer Equity (CE) in the beer market, a sub-sector of the fast moving consumer
goods (FMCG) sector, and their relative performance and importance, amongst
selected beer brands. This study also allowed comparisons to be drawn between
non-alcoholic ready to drink beverages (NARTD) and beer.
Data was collected from 272 respondents in four metropolitan hubs that were
familiar with the beer brands in a telephonic survey administered through an
independent research company and was analysed using descriptive statistics and a
principal components analysis. In the South African beer market, it was found that
brand equity was secondary to value equity but ahead of retention equity. The sub
drivers of value equity were identified as “Price and product offering”,
“Convenience” and “Brand perception”. The sub drivers of brand equity were
identified as “Brand attractiveness / uniqueness” and “Advertising”. The sub driver
of retention equity was identified as “Care and community building”. In order of
importance the drivers are : “convenience”, “pricing and product offering”, “brand
attractiveness and uniqueness”, “brand perception”, “advertising” and “ care and
community building”. The Drivers model of customer equity (Rust et al., 2000) was found to hold true in the South African beer market and the results obtained in the study can be used to refine SAB‟s marketing strategy.
Description
MBA thesis - WBS
Keywords
Customer equity, Beer industry, Consumable goods