FACTORS INFLUENCING MARKETING OF ALCOHOLIC BEVERAGES IN KENYA (A CASE OF EAST AFRICAN BREWERIES)

Abstract

This study explains the factors influencing marketing of alcoholic beverages in Kenya majoring on East African Breweries Ltd, a leading company playing a major role in economic performance of the East African countries. It plays a pivotal role in employment creation and contribution to the exchequer. East African Breweries provides more than 1000 jobs directly in East Africa while indirect jobs created are well over 18,000. The barley farmers owe their existence to East African Breweries Limited which not only assures them of ready market but also soft loans and well researched exotic seeds. Central Glass Industries, a subsidiary of East African Breweries Limited provides employment and glass bottle requirements to various local companies such as Coca-Cola among other companies. The external environment has been turbulent in the recent past hence having a significant effect on this industry. This study is carried out to examine the impact of this fast changing business environment in which East African Breweries Ltd has developed strategies to cope up with these. Browne (1997) observed that learning is the heart of a company’s ability to adapt to rapidly changing environment. Theoretical framework is based on ; Neoclassical theory by Robert Solow(1956), Dunning(1980) OLI Framework, The Porters 5 forces, Micknsey 7’s Model, and the Porters Value Chain. To further evaluate the strategy, Henry Mintzberg (1987) 5 PS was used. The target population is based onfour departments targeting 50 employees. Census method was used in the study.Data collected using qualitative and quantitative technique and presented by tablesand charts. It was found out that East African Breweries Limited must continue to predict itsfuture through continuous scanning of the environment. This scanning should involvestudying and interpreting social, political, economic, ecological, legal, cultural and technological events. Environmental scanning raises a managers awareness ofpotential developments that could have an impact on industry posing opportunities and threats. The study further noted that marketing plays a strategic role in planning process. Marketing has roles in defining business mission analyzing the environment competition and business situations. Management according to this study is about setting the right climate (the will to respond) competitiveness (the ability to respond) and capacity (the volume of response) This study recounts that East African Breweries Limited has to continuously scan the environment, and must continuously utilize the management information system to build long term customer value. EABL must monitor competitors and the impact of substitute products. Because of its capacity East African Breweries Limited must fully exploit potential opportunities such as the use of sorghum as a cheaper alternative to barley. This will enable it to develop affordable and hygienic products targeting the lower end consumers. Finally it is hoped that the findings of this study will be of theoretical and practical significance to marketing professionals, future researchers and policy marketers in this country.