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Sit uat ion Analys is :

At the end of 1993, Heineken had a 24% volume share in the Netherlands, far ahead of its main competitor

“Grolsch”, but the sales volume was declining and brand image needed revitalization.

In foreign markets, such as the United States and Hong Kong, Heineken had always been marketed as a premium brand, and had managed to create a distinct image for itself

The image was sometimes, however, narrowly drawn, leading to a general perception that Heineken was appropriate only for special occasions

Across European countries, Heineken had very strong brand awareness In Latin America, Heineken was viewed as just one amongst the many European Beer imports However, across all markets Heineken was perceived as a lighter beer of superior quality, in attractive packaging Heineken was the most heavily advertised premium brand in Europe and

worldwide, with more than 90% of the advertising taking place in the form of TV Commercials

Problem Ident ification :

Heineken needed to work out its global brand image and advertising efforts too, needed to be integrated on a global scale

Regional managers often developed their own commercials citing unique competitive conditions. Standardization was thus non-existent, and required.

Table A – S t r eng t hs a n d W e a k n e s s of Heinek e n

Strengths WeaknessWorld‟s leading premier Beer. Lack of global presence in bottling

business. In the major beer-consuming market, Germany and US it‟s imported and not bottled.

Known for its good taste, rich tradition and History.

Lack of presence in Latin America. Viewed as just one of many imported European beers in Latin America.Acknowledge as lighter beer of superior

quality.Perceived premium brand image in some markets, whichresulted in decline of sales volume across Packaging is attractive and one of the

best in business.Leader in Netherland market. Heinekens brand image is not being consistentlyprojected in Brands communication.Number One imported beer in US Market. Brand loyalty needs to be build on, in Eastern Europe people keep on switching

Successful premium brand image globally (US, HongKong etc).Have majority stakes in its existing and prospective partners to ensure tighter control in production and marketing.Significant advertising expenditure at its disposal. It alsohas the ability to come up with

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Project C omet

Was initiated in 1991 to enhance Heineken‟s competitive advantage through advertisement projections as the world‟s leading premium beer

The project team had identified “good taste” as the desired brand image of Heineken

The project identified the following five factors as core brand values:o Tasteo Premiumnesso Traditiono Winning Spirito Friendship

The first two were recognized merely as points of parity, and hence were necessary, but didn‟t provide any

significant advantage

Differentiation was to be achieved through the communication of the remaining three values Impactful advertisements, incorporating leading edge technology and calculated risks, were recommended

Project Mos a

Focus groups were commissioned in eight countries too Understand what male beer drinkers meant by taste and friendship in relation to premium beer drinkingo Which expressions of taste and friendship could be used in advertising

The qualities of beer that appealed to the mind and ones that appealed to emotion were identified by running focus groups among 21-27 year olds and 28-35 year olds. The cues employed for the focus groups were based upon „taste‟ and „friendship‟

Customer reactions to Heineken advertisement claims along both these cues were elicited and suitability ratings were calculated

Regions Stage of development Market evolutionAfrica Embryonic High local consumer

loyaltyEastern Europe Take-off Development of standard

beerSE Asia,S. America, Greece

Started growing Quality improvementsIntroducing premium beerItaly,Spain,Japan Growing High volume focusPrice Competition

N & C Europe,Australia

Full growth Consumer SophisticationMarket segmentation

USA Fully matured Brand/segment proliferation

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Beer Market had different development stages and Heineken at that time was in different phases of development atsame time. In USA the market was fully matured where as in Africa it was in Embryonic Stage.

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Quantit ative Analysis

Quantitative Analysis of Heineken‟s Growth is Shown in Appendix-A

Recom mend ations

As Heineken follows a global strategy of expansion, standardization of marketing communications is a necessary step

The Beer industry was in a globalizing phase through the 1990‟s. Emerging markets carried a lot of promise due

to population expansion and increasing per-capita beer consumption Each country was in a separate stage of market evolution: Embryonic, Take Off, Growing, Mature or Declining Heineken‟s strategy was to build market share in the emerging (embryonic) markets, to

enrich and increase market share in the Take-off and growing markets. At the same time, Heineken sought to maintain or restore market share in markets that were in the Mature or Declining phase

Despite differing strategies across markets, a unifying marketing communications theme is necessary A global branding strategy will lower marketing costs, realize economies of scale in production and clarify the

brand‟s positioning in the minds of customers

Appendix- A

Reference Year - 1993

World Beer Production 120 bn LtrHeineken Beer Production 5.6 bn LtrTotal Sales 7420.18 mn guilder1 bn Ltr of Heineken 1325.03 mn guilder

Regions Sales(bn ltr) Sales revenue(mn guilder)Netherlands 1.34 1780.84

Rest of Europe 2.63 33487.47America 0.73 964.62Asia/Australasia 0.45 593.61Africa 0.34 445.21

I nf erence:

Growth in regions like Netherlands and Europe is reduced and in Asia/Australasia has increased.