Heineken Is One Of The Worlds Pale Lager Marketing Essay

Heineken Is One Of The Worlds Pale Lager merchandising EssayHeineken is one of the worlds gigantic pale lager beer and is dedicated to put forward and remain self-sufficing, nominate by Heineken International since 1873. The trade call d admit that stands for the founders name Heineken is presented in almost all countries on the take a shitulateet earth and is one of the worlds most worth(predicate) international bounteousness beer scratch. It is very favorite in the United States, europium and even Middle eastern countries much(prenominal) as Egypt, Syria, Iraq and Sudan. Their international labels be Heineken and Amstel, but the group brews and sells much than 170 international premium, regional, topical anesthetic and specialty beers and ciders, including Cruz campo, Birra Moretti, Fosters, Maes, Murphys, Newcastle Brown Ale, Ochota,Tiger, Sagres, Star, Strong bowandZywiec. It is available in a 4.3% alcohol by wad, in countries such as Ireland. Heineken has been able to remain one of the worlds leading consumer and corporate grunges for much than 130 years. famed marks include Amstel, atomic number 63s third-largest selling beer, Cruzcampo, Tiger, Zywiec, Birra Moretti, Ochota, Murphys and Star. They are to a greater extent than 119 breweries in more than 65 countries do from raw material a stem beer volume of 139.2 million hectolitres. In this report we going to Disc everyplace more about company, strategy, as closely as their operations in EUROPIAN region.1.1 HistoryThe Heineken story began more than 140 years ago in 1864 when Gerard Adriaan Heineken bringd a small brewery in Amsterdam. Since then(prenominal), quartet generations of the Heineken family have expanded the Heineken brand and the Company byout Europe and the rest of the world.Values and principalsHeineken morals and ethics are non a lavish they are native to every level of railway line. Heineken is committed in sustainable break upment, in optimiseing the ir financial results with nominal impact to business atmosphere. To do this, they abide with get along of governing business principles and three separate core values such as- respect, enjoyment and quality that reflect their passion for beer and respect for their employees, business severalizeners, habiters, shareholders and all others who are connected to company.2.0 Marketing audit for HeinekenThe selling audit is a fundamental part of the tradeing planning process. It is conducted with writ of execution of the plan. The trade audit considers both internal and external marketing planning, as head as review of the plan itself. gadfly analysis is an audit of an organizations environmental influences with the purpose of using this information to guide strategic decision-making. The PEST technique involves assessing four sets of factors Political/legal, Economic, Socio-cultural, and Technological. The assumption is that if the organization is able to audit its current envi ronment and assess potential changes, it will be better placed than its competitors to respond to changes.PEST analysis is concerned with the environmental influences on a business.The acronym stands for the Political, Economic, loving and Technological issues that could affect the strategic development of a business. Identifying PEST influences is a rehearseful way of summarising the external environment in which a business operates. However, it moldiness be followed up by consideration of how a business should respond to these influences. The table below lists some possible factors that could exhibit entailmentant environmentalInfluences for a business under the PEST headingsPolitical / LegalEconomicSocialTechnological Environmental regulation and protection Economic exploitation (overall by industry sector) Income statistical scattering (change in distribution of disposable income Government spending on research-Taxation (corporate consumer) Monetary policy (interest rates) Demographics (age structure of the commonwealth gender family size and com plaza changing nature of occupations) Government and industry focus on expert effort-International trade regulation Government spending (overall level specific spending priorities) Labour / companionable mobility New discoveries and development-Consumer protection Policy towards unemployment (minimum wage, unemployment benefits, grants) Lifestyle changes (e.g. Home controling, single households) Speed of technology take-Employment law Taxation (impact on consumer disposable income, incentives to invest in capital equipment, corporation tax rates) Attitudes to work and leisure-Rates of technological obsolescence-Government organisation / attitude Exchange rates (effects on demand by foreign customers effect on cost of imported components) Education Energy use and costs-Competition regulation flash (effect on costs and selling prices) Fashions and fads Changes in material sciences Stage of the business cycle (effect on short-run business performance) Health welfare Impact of changes in Information technology Economic mood consumer trustfulness Living conditions (housing, amenities, pollution) Internet2.1.1 PoliticalEfforts to reduce levels of alcohol consumption Governments conduct promotion to change populace consumption, e.g. anti-drink and drive behaviour. Associated with this is increased regulation on the nature and style of alcohol advertising. For example, it is prohibited in Austria, Denmark, Finland, Norway and Sweden. alcoholic drink promotion has been banned on TV in France and, in the UK to reduce its influence on younger TV and radio audiences.2.1.2 EconomicalImplementation of the Single European Market (SEM) enabling freedom of feces of goods and dishs, people and capital crossways national borders brought opportunities and threats to the brewing industry. It has allowed firms to invest equity to acquire full-ownership of contributeed breweries crosswise E urope, rather than minority retentions. At a production level, it has encouraged the location of breweries and associated logistics distribution centres to be made on cost-efficient criteria rather than regional or national obligations, enabling an international, and even global, approach to beer production. At the same time, the European logistics industry has been liberalized in the lead up to 1992 with the removal of national licenses, quotas and control indoors the road-transport sector, although there remains a dominantly national flavor to its provision.As yet, the unification of taxation, especially excise duties crossways Europe which could ease administration, is only under discussion. The difficulties of implementing the proposals are considerable. However, with the current variations in excise duties encouraging a black market, especially among the UK and France, reason is afoot to reduce the extreme variations. The publicity associated with the substantial cross-Ch annel movement (or bootlegging) of alcohol and tobacco products between France and the UK, with adverse repercussions for UK suppliers and tax collection for the Exchequer, has concentrated minds on finding a solution to the taxation disparities.The brewing industry relies on economies of scale in both production and distribution to be successful. The removal of trade barriers, with the chance to capitalize on economies of scale, is helping companies, especially those operating inwardly small domestic markets. Both Heineken in the Netherlands and Carlsberg in Denmark have been obliged to internationalize as their own domestic markets are too small to provide sufficient scope for economies of scale for desirable growth. working out through enunciate venture, acquisitions and mergers, together with licensing and strategic alliance, has enabled an extension of brand franchising and complementary brands.2.1.3 SocialProvision of environmentally friendly packaging In Ger some and Denm ark drinks require returnable bottles for re-cycling and, since 1995, at least 65% of packaging has had to be re-usable. In Denmark cans are banned for in- expanse production, although, due to European Union (EU) competition rules, import exemptions allow juicy imports of canned beer, from Germany in particular. These regulations incur short-term increases in the costs of packaging and distribution as late technology is introduced to meet the requirements.2.1.4 TechnologicalHeineken use their technology to keep detailed documents of shipping, in their warehouses to make the beer more efficiently and for shipping purposes.2.2 SEGMENTATION TARGETING POSITIONINGproceeds to segment the market, select the appropriate market stain, and develop the offers value placeing. The formula segmentation, targeting, positioning (STP) is the essence of strategic marketing. (Kotler, 1994, p. 93) .The process of market segmentation can in addition consist of the selection of those segments fo r which a firm might be particularly well suited to dish by having competitive advantages relative to competitors in the segment, reducing the cost of adaptation in order to gather in a niche. This application of market segmentation serves the purpose of developing competitive scope, which can have a powerful effect on competitive advantage because it shapes the configuration of the value chain. (Porter, 1985, p. 53).cleavage is the process of identifying sets of consumers. These sets must be homogeneous, distinct, attractive and reachable. It use demographic (i.e. age), geographic (i.e. ZIP codes), and psychographic (i.e. attitudes) information to describe and separate groups. Segmentation requires the marketer to look at pools of potential customers from multiple angles to consider their areas of focus. Heineken focuses on youth in assorted locations.Targeting a specific segment or segments requires the evaluation of multiple segments. Choices can be hard to make and sometimes seem arbitrary. To aid the marketer, metrics for the most important criteria should be associated with each potential segment. In the end, the segment(s) with the greatest potential should be selected.Europes largest brewer, Heineken NV, is to embark on an acquisition spree and attempt to make its flagship lager brand more appealing to young consumers as increased competition and sluggish sales pass to blight its more mature beer markets.PositioningGunter and Furnham (1992) prescribe that after selecting target markets the trategist should develop positioning objectives to then develop them into a detailed marketing mix. However, Aaker (1996) recommends developing the positioning objective only after the brand identity and value proposition have been developed. In exploring the latter, it is useful to understand Aakers definition of positioning is the part of the brand identity and value proposition that is to be actively communicated to the target audience and that demonstrates a n advantage over competing brands. Kotler (1994) refers to it as the unique selling proposition.Heineken is the worlds most valuable International premium beer brand Heineken hopes to consolidate its position within the high growth Romanian beer and mineral water market by acquiring Transylvania found brewer bere mures for an as yet undisclosed fee.As of 2009, Heineken owns over 119 breweries in more than 65 countries and employs around 54,004 people3.0 world(a) Brand Development Since stage of beer market development in each country is different strategy should be used. In embryonic markets (Africa, Eastern Europe) pushing strategy is suitable. In suppuration markets (Italy, Spain, Japan) both pushing and pulling strategies are agreeable. In mature markets (North and Central Europe, Australia,USA) pulling strategy is the best. Global positioning target can be achieved through creative marketing colloquy. Heineken should develop a number of high- pen, quality television campaign s with universal appeal, featuring high profile, contemporary celebrities. However, within the marketing mix, there will forever be a requirement for local anestheticly driven campaigns and support. By connecting to local situations, consumer will develop a greater emotional tie to the company.The term marketing mix refers to the primary elements that must be accompanied to in order to properly market a product or service. Also known as The 4 Ps of Marketing, the marketing mix is a very useful, if a bit general, guideline for judgement the fundamentals of what makes a good marketing campaign.Product product refers to products or service. The product or service that offer the requirements to meet a specific, embodying market demand. Or, product should be able to arise a market niche through building a strong brand. Heineken maintains it beer quality and special experimentPrice The price that set for Heineken product or service plays a large role in its marketability. Though He ineken has many competitors Heineken maintains its quality and price. It changes it price according to the situation and location.Place Heineken has huge marketing in Ireland and Netherlands. Compare to other brands Heineken is not available in all retails stores frequently.Promotion Heineken has quickly recognised that consumers are change magnitude seeking value and positivity in the current recessionary environment.3.1 Market entryHeineken has a pragmatic view taking a cautious approach to entering new markets. charm it encourages organic growth, it has expanded by using a combination of direct export, licensing, joint venture, strategic alliance and acquisition. While it exports its premium Heineken brand from its establish in Amsterdam in the Netherlands, it is also involved in local regional production. A typical entry strategy has been to begin by exporting using intermediaries such as local distributors, and then to develop licensing production agreements through joint ve ntures with local brewers. Ultimately, the conclusion is to acquire full ownership and control of the local production wherever possible.The NetherlandsHeineken has been the dominant market leader in its home base in the Netherlands having 53% of the market in 1991, well higher up its competitors Grolsch (15%) and the 15% interpreted by Interbrews subsidiary Verenigde Brouwerijen. Unfortunately, the Heineken brand market share, 45% in 1980, itself dropped to only 30% in 1991. In response Heineken introduced the Amstel and Buckler brands, the latter being the first non-alcoholic beer available on draft.UkIn the 1960s, when Heineken entered the UK, the beer-drinking public was not familiar with the strong beer being drunk in other European countries. Consequently, it made a licensing agreement with Whitbread to brew a weaker version of standard Heineken brand (3.6% alcohol by volume (abv) ) that proved popular with lager drinkers. By 1990, about 10% of all lager drunk in the UK car ried the Heineken brand. As beer drinkers became more and more familiar with the continental brands, the Heineken Export Strength (5.0% abv) was introduced which Whitbread also brewed under licence.In 1993, the UK was the second largest market for beer in Europe, consuming 224 pints per head of population, although that level dropped to 218 pints per head in 2002 (Tighe, 2003). The pattern of consumption is different from the rest of Europe with more than 80% being drunk in pubs, many of which are linked, or tied, to breweries. Heinekens route was through access to Whitbreads distribution network through a licensing agreement. Interestingly, these ties were broken in the early 1990s when the traditionalist government introduced legislation to increase competition. This obliged Bass to dispose of its 7,500 pubs most of which were expected to fetch independent small businesses. In practice, most were acquired by Pubmaster which currently owns 8,500 pubs, reflecting the go along co ncentration of ownership within the brewing distribution network.IrelandIn 1993, Guinness and Heineken dominated in Ireland with a combined market share of about 85%. From the 1970s the Heineken brand was produced under licence until Heineken acquired its own production site in 1983. Murphys stout was a particular success story, fair the number two brand of stout (behind Guinness) in both Ireland and the UK by 1993 it was also being sold in the US and France.ItalyHeineken entered the Italian market in 1960 when it acquired a minority stake in a small brewer. This was extended in 1974 when Heineken and Whitbread each bought a 42% holding in the company, renamed Birra Dreher. By 1980, Heineken was the sole owner of Dreher having acquired Whitbreads 42% share. fusions with two former Henniger breweries strengthened Dreher so that, by 1993, it had a 25% share of the Italian market behind the market leader Peroni with about 40%. Despite the decline in the Italian beer market being more severe than in other European markets, Dreher maintained its margins although its market share fell. The Heineken brand retained its position, while its Buckler brand benefited from the increasing growth of the non-alcoholic segment. As in other countries, Heineken, in this case through Dreher, increased its control of the distribution network by purchasing a number of drinks wholesalers. In 1991, Heineken began importing its other Heineken brands into Italy to provide more effectively for the premium beer segment.GreeceIn 1965, Heineken entered a joint venture agreement for Athenian Brewery to produce the Amstel brand. By 2002, it had 98.8% ownership and a dominant 70% or so of the Greek market. This enabled it to strengthen its own Heineken and Amstel brands, and to import its associated Dreher and Coors beers. Heineken still dominates the Greek market.FranceIn 1982, Heineken acquired Albra, which had an 8% market share and owned two breweries in France. In 1984, Albra was merged with Brasseries et Glacieres International to form the Sogebra group which in 1993 had 25% of the beer market, challenging the market leader, BSN Kronenbourg (50%). With the successful re-organisation of the Sogebra group, Heinekens fortunes continued to improve. However, the poor economic climate of the early 1990s, together with the increased competition for extra shelf put among retailers, has been challenging.SpainIn 1984, as Spain was preparing to join the EU, Heineken purchased 37% of the local El Aguila brewer and increased its holding to a 51% controlling interest by 1993. El Aguila suffered from outdated production techniques and poor branding which necessitated coronation in production and some re-structuring with resulting labour redundancies and short-term losses. The Aguila Pilsner brand was positioned for the standard market segment and a new Adlerbrau brand was introduced targeted towards the premium segment Adlerbrau was then itself replaced by Aguila Master. Spa in was a challenging market where many small family breweries operated within a federal infrastructure so hindering the implementation of economies of scale. Nevertheless, the Spanish market was attractive, with beer consumption the third highest in the EU, and increasing from 51 litres per capita in 1978 to 71 litres in 1989. Not surprisingly, by 1991 other companies were intent on acquiring a slice of the market through similar joint venture arrangements. They included Guinness/Carlsberg (Cruzcampo), the French group BSN (Mahou) and San Miguel Philippines (San Miguel).4.0 Heineken SWOT AnalysisHeineken SWOT Analysis company profile is the essential source for top-level company data and information. Heineken SWOT Analysis examines the companys key business structure and operations, accounting and products, and provides summary analysis of its key revenue lines and strategy.4.1 StrengthsThe taste of Heineken beer is unique. The yeast that is used to make Heineken beer till like a shot is developed in 1886.so the taste uniqueness of it has been there for a hundred yearsHeineken is the worlds second largest beer manufacturer.They produce 5.6 billionl liters of beer each year. second only to anheuser busch who produce 10 billion ltrs . This gives economics of scale and a weapons platform for futher expansion of their market capitalization.In some markets like U.S.A and Hong Kong the Heineken brand is perceived as a premium brand and has successfully established a brand image.Heineken has owned subsidiaries in Netherland, France and Ireland whereas they held majority stake in 15 other breweries all over the world.Which gives Heineken a global presence.4.2 WeaknessesInsome countries the brand image of Heineken was too settle such that the brand was seen appropriate for special occasions only, While in other countries like Latin America the brand is viewed just another imported European beer .In Netherlands It was viewed as a mainstream brand.The company has limited its reach to the European and the Western countries and there still lies a scope for scaling up in countries like India where the beer is just imported and thus making it impossible to penetrate deep downNo production base in some area and TV commercials are just aired in bigger marketsLack of integrated marketing campaignLack of worldwide advertising campaign4.3 Threats add in drunk driving lawsCompetitors increasing market shareMergers and acquisitions of other breweriesOther Breweries are becoming much larger than Heinekens Brewery5.0 Recommendation to achieve the global brandIntroduce a number of establishments crossways liquid, packaging and format that will serve to further endorse international leadership credentials because innovation is the lifeblood of brand domain.Heineken has a strong brand tradition. In order to flourish itsbrand reputationacross the world, convince the consumers that the brand is some way superior.Develop a relationship with customers, builda ffinitybetween brand and customers bysponsoring international rugby tournaments, and world soccer tournament such as -( the Champions Leagues, the UEFA Champions League,worlds premier club) where target audience of men from all over the world gather in one place.Building the brandrecognitionfor long-termto differentiate the brand Heineken and be sure to add value to the product in order to get the brand loyalty. (For example, Heineken can maintain its good quality or create benefits for gild and culture, and provide an emotion to its consumers.6.0 StrategiesMacro analysisHeineken has been able to remain one of the worlds leading consumer and corporate brands for more than 130 years. It confronts directly the challenges in many of our markets to deliver organic profit growth, but also focuses on building the long-term future of our brands and business.6.1.1 Current strategiesKey focus is on driving the growth of our brands and change our financial performance on ensuring that acqui sitions, partnerships and distribution strategies create value. The focus is also on enabling our employees to use their potential and building a true performance based culture.Heineken aims for sustainable growth as a broad market leader andwe aim for segment leadership. In both cases, the Heineken brand plays an important part. We establish broad leadership usually by acquiring strong brands, which are combined into a new, larger company. Offering training to the employees, improving the organization, and introducing new technology then reinforces the positions of the local beers. This results in economies of scale that create a distribution network for both the local beers and Heineken beer. If a market is already in the workforce of other brewers, we devote all our energy to developing a premium segment with Heineken beer, and if feasible, specialty beers.The goal of Heineken is to grow the business in a sustainable and consistent manner, while constantly improving profitabilit y. Thefour priorities for action includeTo accelerate sustainable top-line growth.To accelerate efficiency and cost reduction.To speed up implementation we commit to faster decision making and execution.To focus on those markets where we believe we can win.6.1.2 Failures in strategiesHeineken Declining sales volumes now should explore new Strategies.An expected drop in revenues for Heineken has been more than cancelled out through cost-cutting measures and a shrewd pricing strategy.While beer volumes have suffered during the recession, this can be seen as the continuation of a more established trend. Plant closures have helped Heineken to reduce costs, but future profitswill need to be driven by alternative methods.Heineken has revised its profit forecast for 2009 and now expects low double-digit growth for the year overall. The third largest brewer in the world reported a 4.7% decline in volume sales, but strong cost-cutting measures and a sound pricing strategy have allowed the co mpany to further grow its profits.Beer v olumes have been badly hit by the recession, but this is largely a continuation of a longer and more established trend in established markets. The category has lost significant custom to the wine and spirits segments in recent years, as beer has garnered a particularly unhealthy reputation.Consumers beer preferences were once widely predicted to enjoyResistance to the recession, but this has not proved to be the case and many consumers have switched to cheaper brands, with remarkable gains seen in the private-label beer market.Heineken has been able to drive profits through an array of cost-cutting measures. A number of plants were closed after Heinekens purchase of Scottish Newcastle. This acquisition gave the company the largest share of the European beer market, which allowed the undertaking of consolidation through the plant closures. Heineken has also increased prices, which has helped to offset some of the volume declines. Price rise s in the beer category have become commonplace, but the company has ensured that its prices remain competitive without compromising the integrity of the brand.The expected results from Heineken demonstrate the possibilities that still exist during a recession. Cost-cutting measures have improved profits and will leave the company in a stronger position during a recovery. However, reducing costs can only fuel profit growth for a exhaustible length of time, and the company must ensure that it continues to grow its business in developing markets while consolidating in the established markets of Europe and the US.6.1.3 ImplementationsThe basic strategies of Heineken is to capture the local market. By merging with local firms Heineken has started capturing local market. Merger and acquisitions seems very good at for the present situation but according to servey (Dg internal market and services , 2005).7.0 RecommendationsHeineken is one of the strongest products in the market and is dedi cated to grow and remain independent, made by Heineken International since 1873. From the above repost accomplished that from macro analysis, there are positive conditions in Europe to increase profitability of Heineken. there are number of other steps in marketing plans can improve sale of Heineken.The Heineken brand can be developed through the distinctive characteristics of the marketing communication mixmultiple form of marketing communications are needed to communicated the value benefits of a product or market go to larger and larger numbers of actual and potential consumersThe value benefits of a product or marketing offering is communicated to the target market through three modes marketing communication mix, mass marketing forms of communication , personal marketing forms of communicationCreating strong associations and responses in the consumers mind creating awareness of the brand, establishing the brand image brand judgments and feeling , and creating strong consumer-b rand connectBy designing a marketing communication strategy that delivers a consistent message that aims at informing, persuading, and reminding consumers- directly or indirectly about the products and brand for sale in the market segmentIt should focus on the markets that are in the embryonic stage and also on the developing markets and one of the being India, Heineken still has not penetrated India and the beer that is available in through imports. Company does not have fixed group that looks into marketing communication mixThey should go like When in Rome, do as the Romans do that signifies that the communication mix should be different from country to country, and it should be significantly referring to the personalization of the deal representing the target population of a particular. It should keep learning from what happened to other brands that entered into foreign markets and did not do well and they should learn from their failures