Tsingtao will adopt a two-pronged approach to further grow its brand which consists of line extension strategy and internationalization.

LINE EXTENSION STRATEGY

• The distribution of the Tsingtao brand of beer will leverage on the manufacturing plant currently under construction in Thailand. Thailand’s strategic location in the Southeast Asia region will give Tsingtao easy access to markets such as Myanmar, Cambodia, Laos and Vietnam which are viewed as exotic locations. This will allow the Tsingtao brand to build on its unique brand identity as a premier Asian brand with a projected brand image which is distinguished form European and American brands. Furthermore, setting up a factory in Thailand helps Tsingtao to better compete with other low-cost competitors as Tsingtao will be spared of tariffs when she penetrates into the ASEAN region.

• The Tsingtao Gold brand will focus on popular tourist areas namely Bangkok, Phuket, Phnom Penh, etc. This allows for maximization of profit by charging premium for a quality product instead of the regular Tsingtao lager. The distribution will be targeted towards the hospitality industry (Hotels & Resorts) and tourist’s Food & Beverage joints

• The spending power of the locals is low. Tsingtao lager is competitively priced against local and Asian brands available. The competing brands are priced cheaply.
• The large consumer base translates into potentially large sales albeit at a lower profit margin.
• The Beer Culture is prevalent in these segments across the various Southeast Asian countries. The locals in these countries consumes beer every evening regularly.

• The initial step will consist of revocation of distributing and marketing licenses in US and Europe and the transfer of responsibilities to the company’s wholly owned subsidiaries. Currently, due to mishandling of Tsingtao brand by the licensees in US and Europe, the brand image of Tsingtao in these regions differ significantly from China's. Therefore, it is necessary to revoke as this will enable Tsingtao to maintain a consistent brand image internationally.
• Acquisition of selected local beer companies that serve domestic markets in secondary cities and countries where beer brewing industry is not at saturation point. This will allow Tsingtao to manufacture and distribute its brand of products in a cost-efficient manner while allowing for localization and establishment of sub-Brands under Tsingtao.
• As covered in the Brand line extension strategy, Tsingtao Kaiser and Tsingtao Orient will be main product that will stretch Tsingtao brand image downwards to European and North American regions respectively.

• A global advertising campaign will be initiated with Tsingtao Gold being the main driver of the brand image. Subsequent localized editions catered to various domestic markets as well as for the various brand extensions.
• Asian ‘Oktoberfest’ promotional campaign will be organized as a yearly festival to position Tsing Tao as a premium Oriental brand.

Quote of the day - “24 hours in a day, 24 beers in a case. Coincidence?” - -Stephen Wright-

 BRAND VALUATION -The Highlights

(Click here to view the full calculations)

Tsingtao’s Segment Market description

As a brand with global presence, we have decided to segment Tsingtao’s market based on geographical location.

1. Shandong Region – 48%
2. Other Parts of China – 50%
3. Overseas – 2% 

With that, we also made the following reasoning in determining the RBI and Brand Strength factors:

RBI

In evaluating the Brand Valuation, we compared Tsingtao’s RBI with a competitor in the same market segment. In this case, we chose to compare with Coca Cola, which has a RBI of 79%.

Brand Strength factors

In determining the Brand Strength of Tsingtao, we rated (on a scale of 10) the following factors based on its main market – China.

1. Leadership (9/10) - Market leader in China (home market)
2. Stability (6/10) - It has high ability in retaining image but may not fare as well in terms of consumer loyalty due to the nature of beer being a substitutable  product.
3. Market (7.5/10) - China is a development market with high growth. Being a stable industry also made it more valuable. However, beer industry has low entry barriers.
4. International Image (1/10) - The brand strength is largely localized in the home market and does not extend overseas (as seen from the low brand awareness).
5. Trend (8/10) – Sponsorship of NBA and Olympics kept them relevant to the youth market in China.
6. Support (7.5/10) – Tsingtao invested substantial amount on communications.
7. Protection (10/10) - Tsingtao Beer is a registered trademark. Protection against reproduction of images and copyrighted materials and unauthorized use of website content.

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Result:

Tsingtao’s Brand Strength : 62

Tsingtao’s Discount Rate: 8.6080%

BRAND VALUATION =  476,685,064.91

From our calculation, Tsingtao Beer has a high brand valuation of USD 476 million (comparable Coca-cola is USD 55 billion), which will be a valuable asset for Tsingtao in formulating its future growth strategies.

Tsingtao Gold Beer Bottle with a brand new look

TSINGTAO – SAVOUR THE GOLDEN MOMENT VIDEO AND COMMERCIALS

OUT-OF-HOME (OOH) ADVERTISING

CORPORATE WEBSITE

PUBLIC RELATIONS EVENT

B2B Promotions at International Restaurants

Event Sponsorship at Nightlife places

Licensed Pubs

Tsingtao Gold Exclusive Party

Tsingtao Legacy of Taste Singapore

 

Tsingtao’s brand image of being low quality due to its Chinese origin severely impacts perceptions about Tsingtao’s taste.

Tsingtao’s light taste being intended to mean “smooth taste”.

Tsingtao’s “light” taste, which is perceived to indicate low alcohol content and lead to the perception of Tsingtao of being a “Light Beer”.

The Brand Challenge: to create a perfect balance which preserves the Chinese Heritage association, a point of difference, while being a prestigious international beer.

1. To discover the level of knowledge possessed by the local market of the brand
2. To discover the brand image as perceived by the local beer market
3. To uncover consumer insights that can give rise to important hypotheses on how to correct gaps or build brand equity
4. To put forward hypotheses from the detailed research techniques such as laddering; this could then be later tested with a qualitative research

BRAND ASSOCIATIONS

(click here to see individual respondents’ transcripts)

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08:21

1) To test the influence of beer brand identification on taste perception
2) To test the influence of beer brand identification on quality perception
3) Comparing brand equity’s importance to preferred brand as compared to taste

(Click here to view Methodology) | (Click here to view Results)

   
Taste Test Results Analysis
1. BRAND LABEL IDENTIFICATION AFFECTS BOTH TASTE AND QUALITY PERCEPTIONS
The brand label identification creates a 17.3% difference in both taste and quality perceptions as compared to when the beers were not labelled.
However, it must be noted that whether brand labels had a positive effect on taste and quality perceptions are unfounded as negligible difference was found. Only Carlsberg saw a 4% improvement in taste perception when the Carlsberg brand was provided, and a 3% increase in quality perception just by changing the brand name alone.

Perception towards Tiger Beer’s taste increased by 4%, but the participants’ perceptions towards it’s quality dropped by 2%. Tsingtao beer saw negligible difference in perceptions towards both taste and quality.
While the percentages appear small, a 4% change in taste perception despite the taste of the beer being identical is a big effect for a brand, which does not directly change the taste of the beer.
 

2. BRAND LABEL IDENTIFICATION CAUSES CHANGE IN PREFERENCE IN BEER
Tsing Tao’s competitive taste is evident when 35% of participants rated Tsingtao beer as their top choice during the blind taste test. However, only 15% rated Tsingtaobeer as their top choice when it was labelled. This would definitely point to weak brand equity, or rather one that is relatively weaker as compared to its competitors.

By contrast, Carlsberg had only 15% of participants rate its beer as their top choice during the blind taste test. This suggests that Carlsberg’s taste might be inferior to most of the customers. However, on being labelled with Carlsberg brand, 50% of participants put Carlsberg as their brand of choice.
Hence, this demonstrates that brand label identification could significantly affect preferences of beer. The huge swing of ratings suggests that brand values and image of a particular brand might be even more significant than the taste of the beer when it comes to selection of beers.
Another example of this is with one of the participants who indicated Tiger Beer as his favourite beer. However, without the brand, he rated Tiger Beer as the worst performing beer and Tsingtaoas the best. He promptly changed the ratings around to put Tiger on top and Tsingtao last during the labelled taste.
 

3. STRONG BRAND EQUITY COULD IMPROVE PERCEPTIONS TOWARDS TASTE AND QUALITY
While Tsingtao and Tiger Beer saw negligible differences in perception, Carlsberg saw a 6% increase in perceptions towards taste and quality. This suggests that brand image and brand experience are important in shaping perceptions towards even taste, despite taste being technically independent of brand equity.
 

4. STRONG BRAND EQUITY AFFECTS PREFERENCE OF BEER BRAND TO A LARGER EXTENT THAN TASTE AND QUALITY
Between the blind taste test and labeled taste test, only 25% of participants kept their first choice of beer. As the only difference was the labeling of the beer, this suggests the brand label affected 75% of participants to change their decisions.
 

5. Hypothesis that Tsingtao’s weak brand equity could be a factor causing it to lose beer preference despite its superior taste
During the labeled test, 40% of the participants had Tsingtao as the best performing beer in terms of quality and taste. However, this only 15% of these participants chose that Tsingtao as the beer of choice.

This suggests that its weak brand equity compared to its competitors have led participants to choose other beers to be their choice despite Tsingtao’s strong product performance. This suggests that there must be either other product attributes that Tsingtao is lacking in, or a weak brand equity that makes consumers prefer other brands.
 

6. TSINGTAO’S TASTE AND QUALITY IS COMPETITIVE WITH MARKET LEADERS LIKE TIGER BEER AND CARLSBERG
On a purely taste and quality perspective, ratings from participants suggest that difference in these key product attributes as compared to Tiger Beer and Carlsberg were negligible. In fact, 45% of participants felt Tsingtao was the best in terms of taste and quality by their ratings during the blind taste test.
 

7. OTHER FACTORS BEYOND TASTE AND QUALITY MIGHT BE AFFECTING BEER PREFERENCE; IMPORTANCE OF BRAND PREFERENCE IN BEER CATEGORY
It must be noted that during the blind taste test, 80% of participants had scores and rankings that corresponded. The other 20% had a highest score for one brand but did not rank it first. This suggests that there might be other finer product attributes such as aroma, colour and bitterness which might have affected ratings beyond our attributes of taste and quality.
Nevertheless, this 80% accuracy is higher than the 55% accuracy for the labeled taste test where there were clearly other factors that affect beer preference. In the case of the labeled test, we suggest that a 25% difference in the accuracies might be attributed to brand preference.
 

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Limitations
1.              Narrowing of relevant product attributes into taste and quality
This was done as frequent and casual drinkers would have different intricacies on various product attributes. For example, a casual drinker might not be aware of the importance of aftertaste and bitterness, unlike the frequent drinker. Hence we generalized the attributes into two big points: taste and quality to ensure the test could be done on any member of the public. However, it must be noted that this could create a few instances where even in the blind taste test, high scores in both might not lead to that beer being rated as top due to other more minor factors.

2.             Beer guessing and matching
As one or two participants were trying to guess the beers in the blind test to match the brands labelled, a result where they rated the taste and quality to be equal with what they indicated with the blind taste despite tasting otherwise. This is especially clear when one or two participants guess wrongly, but put scores for taste and quality as the same for brands they thought they had drank earlier. This would lead to a conclusion of brand having no effect on taste and quality, albeit a faulty one.

08:21

Survey on Tsingtao Brand and Consumer Beer Market

(Click here to view survey)

An online Survey was conducted for us to measure Tsingtao’s brand equity and to generate specific findings based on the insights obtained from the quantitative research and taste test. The research has an aim to evaluate Tsingtao’s brand image, perceptions towards Tsingtao brand and important attributes affecting the brand which will enable us to explore and make branding decisions.

Objectives:

1. To determine Tsingtao’s brand image and the brand position in consumers’ minds
2. To test the brand associations found during quantitative research--Cheap, Chinese Origin, Light beer, Poor unavailability and Unappealing Packaging
3. To determine the effect of these associations on brand image
4. To test the perceived attributes of Tsingtao Beer - its quality, taste , price and availability
5. To identify which of these attributes are important in choice of beer brand

Analysis of Survey Results

(Click here to view full analysis of findings)

A Summary: Analysis of Findings

1. Tsingtao is perceived as inferior in Beer Quality when compared to leading brands
2. There is evidence to suggest that Brand Image is positively affected by Advertising Salience. This may suggest that consumers perceive a stronger brand image when advertising awareness is of a desired or salient level.
3. Relatively weak brand equity of Tsingtao may be attributed to lack of advertising activity in the Singapore market.
4. It is inferred that Tiger beer and Tsingtao are perceived to be brands in same price category.
5. Taste and Quality is shown in the table above as the two most important attributes in choosing beer.
6. Taste and Quality and perception of Tsingtao is relatively weak.
7. Made in China and Oriental Origin are descriptive of Tsingtao beer.
8. The Made in China characteristic is perceived negatively.
9. Oriental Origin characteristic is perceived more positively.
10. Light taste is rated positively and is an attribute that Tsingtao is perceived to possess. However, it is also perceived as a “Light beer” which refers to low alcohol content. Low alcohol content was also perceived as related to its poor quality.

· Tsingtao Beer The flagship brew, it is a standard pilsener of 4.7% alcohol, and it accounts for most of the brewery’s production.
· Tsingtao Pure Draft   A variation of the Tsingtao Beer, Tsingtao Pure Draft was introduced to target China’s high-end, premium beer market, and it has been sold to many coastal cities in China, as well as Japan and South Korea. Thereafter, it was introduced in metropolitan areas of the United States. Now, the Pure Draft is available internationally.
· Tsingtao Dark Beer This is produced primarily for the local market but can sometimes be found outside China. It contains 5.2% of alcohol.
· Tsingtao Spirulina Green Beer (also sold as Tsingtao Green Beer) This is a pale lager containing spirulina, a blue-green edible algae, as an additive. Spirulina is said to contain nutritional properties and is claimed to promote good health.
· Tsingtao Stout Tsingtao Stout has a distinctive thick flavor of burnt malt and a slightly sweet taste. It contains abundant vitamins and amid acid, giving it its distinct dark color. Within the beer family, stout beer holds a top position due to its unique flavor and high nutritional value.

(Click on image to enlarge)

Tsingtao Beer – The Official Beer Sponsor for NBA in 2008

(Click on image to enlarge) 

	Tiger Beer	Heineken	Carlsberg
Nature of Competition	Tiger Beer is a massive brand challenger to Tsingtao in Singapore, by virtue of it being the market leader in the alcoholic beverages category.  Tiger Beer is a leading brand that drives Asia-Pacific Brewery (APB),, commanding 40.9% market share in the alcoholic drinks category here. APB is one of Heineken N.V.’s subsidiaries that produces a range of beers for sale in the region with Tiger being the primary local and regional brand distributed across the region APB has a the largest market share at 68.7 % of the Singapore beer market. Tiger Beer’s brand presence is huge in Singapore, with its sponsorship of the popular Barclay’s Premier League on Mio TV and its corporate social responsibility (CSR) programme “Get Your Sexy Back”. The Tiger Beer brewery that is open to public in Singapore as an attraction also increases brand awareness and perception.  All brand images produced by their marketing activities suggest a brand that is occupying Tsingtao’s desired brand image of being sporty, young and passionately striving for success. This is possible considering Tsingtao’s weak presence in Singapore on all fronts, in contrast to its strong market position in China. Furthermore, Tiger Beer’s strong distribution network of retailers and pubs make Tiger Beer highly visible and a dominant market leader in Singapore.	The Heineken brand of pilsener beer is renowned internationally and is one of the few major international beer brands with an established presence in Singapore. This is evidenced by its strong market share, sales volume and strong distribution across retail, food & beverage, and entertainment outlets in Singapore. Heineken is the flagship product of the company, Heineken N.V., one of the top leading brewing companies in the world. With APB as its regional subsidiary based in Singapore, on top of other regional brands in Asia Pacific and specialty brands in its portfolio, they produce two leading brands for the Singapore market which are clearly differentiated, with Heineken as the international brand with a strong brand presence in the category of international/imported beer segment. The strong global and regional marketing campaign for the Heineken brand bolsters the awareness across consumer markets. A series of advertising campaigns, sponsorship of several global events such as the Rugby World Cup and the iconic “Heineken Experience” created the brand image of global beer that induces preference in purchase decisions. This represents limited opportunities for the Tsingtao brand to compete in the category of international premium brand segment of the beer market. This is unless Tsingtao can clearly identify or create a differentiation point in that segment, identify a niche in that segment or position the brand strongly in the imported beer or specialty segment. The key points of competition against the Heineken brand are: the strong distribution across retail, beverage & dining and entertainment outlets and a greater awareness and positive brand image of Heineken as an international premium lager (as an alternative to the local lager beer, Tiger).	The Carlsberg Green Label Lager Beer, distributed in Singapore by Carlsberg Singapore Pte Ltd, is the flagship brand of Carlsberg A/S, which is the 4th largest brewery group in the world. It is founded in 1847 in Denmark and as such, is an internationally recognized European Beer. Carlsberg Singapore Pte Ltd’s brands include Carlsberg Green Label, Connor’s Stout, Carlsberg Special Brew, Tetley’s, SKOL, Kronenbourg 1664, Jolly Shandy, Corona Extra, Danish Royal Stout, Carlsberg Gold and Negra Mondelo. Carlsberg group has an established international network of distributors and breweries through the its subsidiaries which boost its distribution regionally and locally. The international standing of the Carlsberg is attained through stellar marketing campaigns such as a consistent global advertising effort over a period of two decades with the tagline “Probably the best beer in the world”. This created a distinct brand image and a position as a leading international brand. Together with its strong distribution and production networks that enhances brand visibility by bringing the beer to the retail, F&B and entertainment markets, the brand image and awareness has made Carlsberg one of the leading and most prominent brands of premium lager globally. In Singapore, Carlsberg Green Label beer is the No. 1 International Premium Lager Beer. The global recognition of the Carlsberg brand and its established presence in Singapore over the years made it a dominant brand in the Singapore market, and Carlsberg A/S second only to APB( which produces and markets Tiger and Heineken) in market share.. Most recently, it is positioned as an international premium brand with associations to Celebrations, Youth, International Football, Music and Nightlife with the tagline “This calls for a Carlsberg”.

	Tiger Beer	Heineken	Carlsberg
Point-of-parity	1. Taste 2. Alcohol content of approximately 4-6% (standard lager alcohol content) 3. Distributed island-wide in retailers such as convenience stores 4. Available in standard quantity packaging sizes- 330ml and 500ml cans, 330ml bottles and 640ml bottles	1. Alcohol content of approximately 4-6% (standard lager alcohol content) 2. Distributed island-wide in retailers such as convenience stores 3. Both Heineken and Tsingtao are perceived as imported beer brands compared to Tiger beer, the local brand. 4. Available in standard quantity packaging sizes- 330ml and 500ml cans, 330ml bottles and 640ml bottles 5. Both brands are in the general category of standard /premium lager.	1. Alcohol content of approximately 4-6% (standard lager alcohol content) 2. Carlsberg, as well as Tsingtao, are well-recognized brands internationally. 3. Both brands are available in standard packaging Sizes 330ml, 500ml and 644ml bottles.
Point-of-difference	1. Brand Presence: Tiger Beer’s superior brand presence and image in Singapore compared to Tsingtao, especially with brand associations created with its Barclay’s Premier League sponsorship in Singapore. 2. Distribution: Tiger Beer’s superior distribution network that sees it widely available in convenience stores, discounters, supermarkets and pubs. 3. Country of origin: Tiger Beer, being the local brand that is expanding globally, creates a positive perception towards it. This is in contrast to Tsingtao being from China, a country that is not viewed too favourably in terms of hygiene and quality here.	1. Brand Presence: Heineken’s superior brand presence, positive brand image and awareness among consumers in Singapore as a global brand compared to Tsingtao. 2. Distribution: With APB as a local brewing operations subsidiary company, Heineken has a vastly superior distribution network that sees it as widely available as the local brand, Tiger Beer, and allows it to market the two brands, among others, under a strong distribution system. 3. International vs. Country of origin: Heineken is regarded as an “international” brand despite its strong Dutch origins and the parent company’s location and listing. Tsingtao is strongly associated with China that the brand image is associated with factors (based on the country of origin) such as who consumes it and where, the taste of the beer and quality perceptions, which are all linked to its Chinese origins. 4. Taste difference between the two brands of pilsener beer: It exists while there are also strong perceived differences.	1. Brand Perception & Country of Origin: Carlsberg’s image of “European Brand” is in strong contrast to Tsingtao’s image of “Chinese Brand”. This creates a more positive perception towards Carlsberg in relation to Tsingtao as Chinese Products are not perceived as high quality products. 2. Distribution: Carlsberg Green Label is available island-wide at convenience stores as well as in Pubs and Clubs, whereas Tsingtao is mostly available in Chinese Restaurants with minimum shelf space in convenience stores. 3. Brand Presence: Carlsberg enjoys a vastly superior brand presence in Singapore compared to Tsingtao.