The presented article focuses on the issue of communication mix in small businesses in the brewing industry in Czech Republic, this group is represented by microbreweries. The aim of the research was to analyze marketing mix in this group of companies. They have a very similar parameters and serve a similar market, but there are differences in their communication mixes. Based on a literary research, selected factors were determined, which were investigated as to whether or not they have an influence on the composition of the communication mix. Quantitative research method was used. The data obtained through an electronic questionnaire survey, where the return of questionnaires was 28%.
Based on the cluster analysis of the obtained data, it was found that microbreweries can be divided into two groups according to the marketing communication tools used, thus two different communication mixes were identified. Furthermore, factors that influence the composition of the communication mix of microbreweries were identified, namely the year of establishment of the microbrewery and the existence of the microbreweries pub/restaurant.
1 Introduction and literature review
Pickton (2010) defined Marketing Communication as a concept of strategic coordination of all messages, Duncan and Everett (1993) use the same definition. Cooper (1999) says that marketing communication includes all visual, written, audible and sensory aspects of interaction between a company and its targeted market. This communication is mostly commercial, and its goal is to, based on transferred information, influence the cognitive, motivational and decision-making processes of those who we want to affect in agreement with our intentions (Vysekalová and Komárková 2002; Meha and Zegiri 2022).
For a systematic division of a wide range of marketing communication techniques and tools, it is possible to use many theoretical supports like a section of 4P taken over by Kottler (1998), a communication mix where classifies: advertisement, direct sale, personal sale, PR and sales support. Peslmackers (2003) classify the communication mix like: advertisement, sales support, sponsorship, PR, communication at the point of sale or purchase, exhibitions and fairs, direct marketing communication, personal sale and interactive marketing. Currently, new communication tools are defined, for example Beránek (2023) mentions configurators.
Within the brewing industry in Czech Republic (production in 2020 was 20.32 million hectolitres, microbreweries share was 2%, number of microbreweries 504), all the aforementioned techniques and tools are used. One of the most significant factors that influence the composition of a communication mix is the size of the company, that is, its financial strength and further the specifics of the consumer segment that the company manages (Castilione 2011; Lee and Shin 2015). From this point of view, it is possible to divide marketing communication of companies in a chosen industry into two categories. A mass marketing communication uses mass communication resources and targets as many potential customers as possible, it is mostly used by industrial breweries (production over 500 thousand hl per year). And targeted, which is used by microbreweries (production up to 10 thousand hl per year) and uses private communication channels and targets a specific group of consumers.
Microbreweries mostly communicate with their customers through their product – beer. Their main asset is uniqueness and locality (Toro 2014; Stocker at all. 2021). Their promotion is therefore secured mainly by word of mouth technique, that is, by verbal information which is spread by content customers and fans of non-traditional beers (Stoklásek 2013). This phenomenon has an even larger overlap in Czech microbreweries and that is within the framework of beer tourism which is, right after wine tourism, the most widespread type of special tourism in the Czech Republic (Duda 2013; Kraftchick 2014; Cortese 2017; Wong 2019).
The most fundamental factor that influences the selection of marketing communication tools in microbreweries are, as already mentioned above, finances (George 2013). For this reason there is no use of mass communication resources and channels (these means would prove more than ineffective in relation to the target group of microbreweries), however the use of personal, targeted marketing channels such as social media and more is more suitable and cheaper for reaching regional or even local markets, in brewery slang we talk about sale „around the chimney“ (Březinová 2019). The paper focuses on the issue of communication mixes of microbreweries and tries to find other factors that influence their composition.
2 Methodology
26 tools of marketing communication used in the brewing industry has been identified (labels, coasters, glasses, table-cloths, signboards, paid and free tastings, discount events and excursions, as well as social media, a good name of the brewery, organizing cultural events, sponsorship of local associations, own website, recommendations of regular customers, competitions, billboards, posters, advertising banners on the internet, advertising in nationwide radio stations, advertising in regional radio stations, advertising in the national press and advertising in regional press, advertising on national TV stations and advertising on regional TV stations), on which then a data collection that took place in 2020 on the entire research sample was focused (504 microbreweries in the Czech Republic). The data obtained through an electronic questionnaire survey, where the return of questionnaires was 28% and thus it was possible to obtain data from 145 microbreweries, was converted into a data matrix and, due to their nominal character, their transformation to binary character was subsequently carried out (0/1). The binary variables created in this way became a foundation for creating a data matrix together with identification variables (monitored marketing communication tools). To calculate the decomposition – solution, the binary matrix which had a dimension of 145 x 26 (145 examined microbreweries and 26 monitored tools of marketing communication) was used.
Based on a literary research, selected factors were determined, which were investigated as to whether or not they have an influence on the composition of the communication mix. These variables were: year of foundation; the number of employees; the region in which the subject operates; whether or not the business subject has its own establishment/establishments (a restaurant, boarding house or a hotel); information of the companies whereabouts (in the centre of the city/town, on the outskirts of the city/town, in the countryside).
With the aim of finding out whether there are different groups among Czech microbreweries that differ in their communication mix, and if so, what factors (from those monitored) have an influence on the differences in the mixes found. For this finding, the cluster analysis method was used according to Dolnicar and Leisch (2014) and Aggarwal and Reddy (2014).
To identify the potential segments a „traditional“ procedure was used, which uses:
1) the calculation of the dissimilarity matrix according to Řezaková and Húsek (2009)
2) the subsequent application of the hierarchical agglomerative cluster algorithm, according to the above mentioned authors Dolnicar and Leisch (2014) and Aggarwal and Reddy (2014).
Ad 1) Due to the binary nature (Gower and Legendre 1986) of the analyzed data matrix, in the first case, before the actual use of the cluster analysis, it was necessary to determine the dissimilarities between the individual subjects/microbreweries, considering marketing tools used. For this purpose, a short script in R language was created, allowing to determine the value of the so-called Hammings distance (Deza and Deza 2013) between individual rows, i.e. subjects/microbreweries of the analyzed binary data matrix. With the help of such defined distances between individual subjects, a square matrix of distances was constructed, which served as input information for the hierarchical cluster algorithm.
Ad 2) In order to find out whether individual microbreweries, or individual rows – objects in the binary matrix – break up into various, relatively homogeneous groups according to the nature of the marketing communication tools used, an agglomerative hierarchical cluster analysis was subsequently performed on the data matrix. During which, the Ward‘s hierarchical agglomerative approach was used (Murtagh and Legendre 2014). The number of clusters was determined based on the inherent structure of the data through differences in clustering levels. All numerical calculations were performed using a programming environment R version 3.3.3 (R Core Team 2019). For editing the data and their preliminary adjustment, MS Excel was used.
3 Results and discussion
3.1 Research approach and design
The first result is graph number 1 from which it is clear that most microbreweries in the monitored sample use the following marketing tools: their own website, labels, social media, beer glasses and more. It can therefore be said that the monitored group of small enterprises includes in its communication mix, mainly tools that are not demanding on financial resources and fall into the Advertising, Sales promotion and direct marketing group. Todorova and Zhelyazkov (2021) also research marketing communication tools for the small enterprises segment, with a similar result to the present study. On the contrary, none of the monitored microbreweries uses advertising on a national TV station and other nationwide media are used only sporadically.
Figure 1: The use of individual marketing communication tools (in %)
Source: Author
The following graph number 2 captures the distribution of values, that is Hammings distances determined on the basis of binary data matrix. It is clear that values of Hammings distances vary in a set of values {0,1, …, 18} and the majority of pairs differ roughly in 3 – 11 variables. This fraction (the number of pairs of microbreweries that differ in 3 to 11 variables) makes up 88.17547% of the total number of individual pairs of distances.
Figure 2: The distribution of individual values of Hammings distances of pairs of objects determined on the basis of analysis of the binary data matrix
Source: Author
Dendrogram (Figure 3) captures the process of clustering which was performed on the analyzed binary matrix while simultaneously using Ward’s method. The process of clustering the individual investigated subjects – microbreweries – is visible when looking at the shape, or the course, of the mentioned dendrogram, from which it is obvious that the data can be divided into two to three clearly separated clusters. Identified clusters are highlighted by means of individual rectangles, defining the boundaries of individual clusters.
Figure 3: The resulting dendrogram obtained by applying Ward’s hierarchical clustering algorithm using the Hamming metric with highlighting the obtained clusters – decomposition into two clusters.
Source: Author
If we focus on the decomposition of the binary data matrix of microbreweries into two clusters, it is clear that the resulting clusters are not balanced in terms of their size/number of included objects. The first cluster consists of approximately 39% (57 subjects), the second cluster then 61% (88 subjects) of total 145 monitored microbreweries. According to these results it is possible to split the microbreweries in the researched sample according to the structure of their communication mix into two different sized groups.
The differences in the usage of tools of marketing communication are evident when looking at the bar graphs that are plotted for the monitored tools (the graph therefore shows the values of the shares „using“ the given marketing communication tool in the given cluster), see Figure 4.
Figure 4: The differences in using individual tools of marketing communication in the case of decomposition of the data matrix into two clusters – highlighting those that significantly differentiate these two clusters.
Source: Author
While dividing the tools of marketing communication into two groups we can see that the tools which divide microbreweries in these different groups according to the communication mix used are tablecloths, signboards, paid tastings, discount events, competitions, organized events, advertising in regional press, advertising in local radio stations, advertising in national press, banners, posters and websites of different subjects. Meanwhile organizing events (cultural, sport) is a factor with the largest difference between both groups as Table 1 shows which determines other tools of marketing communication as well, according to decreasing differentiation.
Marketing tools | Cluster 1 | Cluster 2 | Difference |
---|---|---|---|
events | 0.71 | 0.09 | 0.62 |
ad in regional news | 0.70 | 0.11 | 0.59 |
signboard | 0.89 | 0.46 | 0.43 |
posters | 0.44 | 0.02 | 0.42 |
consumers competitions | 0.41 | 0.00 | 0.41 |
ad in regional radio | 0.37 | 0.00 | 0.37 |
brewery´s renown | 0.98 | 0.65 | 0.33 |
recommendation | 0.95 | 0.66 | 0.29 |
paid testing | 0.33 | 0.06 | 0.27 |
sponsorship | 0.70 | 0.43 | 0.27 |
excursions | 0.87 | 0.61 | 0.26 |
website of other subjects | 0.30 | 0.04 | 0.26 |
banners | 0.24 | 0.00 | 0.24 |
discounts | 0.29 | 0.06 | 0.23 |
own web | 1.00 | 0.78 | 0.22 |
free testing | 0.44 | 0.27 | 0.17 |
tablechloths | 0.22 | 0.09 | 0.13 |
social networks | 0.92 | 0.81 | 0.11 |
ad in state news | 0.08 | 0.00 | 0.08 |
billboards | 0.16 | 0.10 | 0.06 |
labels | 0.89 | 0.85 | 0.04 |
ad in regional TV | 0.06 | 0.03 | 0.03 |
glasses | 0.84 | 0.82 | 0.02 |
ad in state radio | 0.02 | 0.02 | 0.00 |
ad in state TV | 0.00 | 0.00 | 0.00 |
beermats | 0.79 | 0.83 | -0.04 |
Table 1: The usage of individual tools of marketing communication in individual clusters sorted according to decreasing differentiation between clusters 1 and 2
Source: Author
Individual clusters were evaluated in accordance to other monitored factors such as the age of the microbrewery, the existence of an establishment, the number of employees or location of the microbrewery.
The most prominent feature of the first cluster is the representation of 92% of microbreweries with and establishment and 8% without an establishment, this is the most prominent observed variable, and 80% of the microbreweries in cluster number one were founded between the years 2011 and 2016. The division according to individual regions is not essential, it is only worth mentioning that 23% of all surveyed breweries are from Moravian- Silesian region which is the highest representation. Distribution according to the location of the microbrewery is also not too significant, 46% on the outskirts of a town, 40% in the centre of a town and 14% outside of it.
We can therefore say that the composition of a communication mix of microbreweries is influenced by the existence of an establishment. Microbreweries with an establishment use a different communication mix than the ones without an establishment, nevertheless the essential (border) communication tools are primarily not only tools tied to the establishment, but also other tools, such as the organization of cultural events, competitions, the use of posters, advertising banners on the internet, advertising in regional press or websites of third parties.
In the second cluster the most prominent feature is the year the microbrewery was founded, 97% of microbreweries in this cluster were founded between the years 2011 and 2016. Another difference found in the monitored variables is the existence of an establishment. In the second cluster only 45% of microbreweries have an establishment, the differences in other monitored factors are not significant. We can therefore say that the year of establishment of the microbrewery is decisive for belonging to the second cluster and to the communication mix used by the microbreweries in this cluster.
The most prominent differences in both clusters are the existence of an establishment and the year of foundation. We can therefore say that these two factors play the most significant role in selecting the tools of marketing communication and assembling the communication mix of microbreweries in the monitored sample.
4 Conclusion
Two groups of microbreweries that differ in their communication mix were identified. The marketing communication tools, that are borderline when dividing into two cluster (39% and 61% of the examined sample), are tablecloths, signboards, paid tastings, discount events, competitions, cultural events, advertising in regional and national press, advertising in regional radio stations, banners, posters and websites of third parties. Next, factors which influence the composition of communication mixes of monitored microbreweries were identified, it is the year of foundation and the existence of an establishment, other monitored factors (belonging to a region, the number of employees and the location of the brewery) do not affect the communication mixes of the companies in the monitored group.
The presented results are limited with regard to the data set, the statistical methods used and with regard to the business sector. In further research, it would be appropriate to focus on all size groups of enterprises implementing their activities in the brewing industry.
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Kľúčové slová/Key words
communication mix, microbreweries, cluster method, tools of marketing communications, groups of communication mix
komunikační mix, minipivovary, cluster metoda, nástroje marketingové komunikace, skupiny komunikačních mixů
JEL klasifikácia/JEL Classification
M31, M37
Résumé
Faktory ovlivňující komunikační mix malých podniků ve vybraném odvětví
Předkládaný článek se zaměřuje na problematiku komunikačního mixu v malých podnicích v pivovarnictví, tuto skupinu představují minipivovary. Cílem výzkumu bylo prokázat nebo vyvrátit, že v této skupině firem, které mají velmi podobné parametry a obsluhují podobný trh, existují rozdíly v jejich komunikačních mixech. Na základě shlukové analýzy získaných dat bylo zjištěno, že minipivovary lze rozdělit do dvou skupin podle použitých nástrojů marketingové komunikace, byly tak identifikovány dva různé komunikační mixy. Dále byly identifikovány faktory, které ovlivňují složení komunikačního mixu minipivovarů, a to rok založení minipivovaru a existence restaurace v minipivovaru. Výsledky výzkumu jsou omezeny jak vybraným odvětvím, tak velikostní skupinou sledovaných podniků.
Recenzované/Reviewed
3. October 2023 / 4. October 2023