Brand and Heineken

I. INTRODUCTION The Heineken Brewery was founded in Amsterdam in 1863 by Gerard Adriaan Heineken. The strain of yeast which continued through the 1990s to give Heineken beer its special taste was developed in 1886. Heineken beer won a gold medal at the 1889 Paris World’s Fair, and, by 1893, was one of the largest selling beers in the Netherlands. In 1937, Heineken granted its first license to a foreign brewer to produce Heineken beer according to the original formula. While licensing agreements also aimed to specify how the Heineken brand should be marketed, Heineken could not influence how a licensee marketed its own brands. At the end of 1993, Heineken, being the market leader in Netherlands, was viewed as a mainstream brand. Outside the Netherlands, however, Heineken had consistently been marketed as a premium brand. Sales volume was declining and the brand image needed some revitalization. In January 1994, senior managers at Heineken headquarters in Amsterdam were reviewing two research projects --- Project Comet and Project Mosa --- commissioned to clarify Heineken’s brand identity and the implications for television advertising. Heineken’s senior managers were interested in assessing whether or not the conclusions of the two studies were mutually consistent. They also wished to determine how far they should or could standardize Heineken’s brand image and advertising worldwide. II. VISION To be the world’s leading premium beer III. MISSION Heineken is a symbol of premiumness, taste, and tradition around the world. Unlike the other beer brands, Heineken’s roots, flavor, and commitment to and pride in brewing a high quality lager, makes up for its good taste that brings together friends with a winning spirit. No other brand in the world could claim superior good taste with as much credibility as Heineken. IV. MARKETING PLAN A. DEMAND / SUPPLY ANALYSIS By the 1980s, Heineken was seeking majority equity stakes in its existing and prospective partners to ensure tighter control over production and marketing. In 1993, it recorded net sales of 9,049 million guilders and a trading profit of 798 million guilders. Beer accounted for 82% of sales, the remainder being derived from soft drinks, spirits, and wine. In the same year, sales of the Heineken brand were 1. 2 billion liters. The company’s other brands with some international distribution were Amstel which sold 630 million liters; Buckler, a non-alcoholic beer, which sold 90 million liters; and Murphy’s Stout, recently acquired and sold principally in Ireland and the United Kingdom. As a result of acquisitions, Heineken also oversaw the brewing of many local and regional beer brands marketed by its subsidiaries, such as Bir Bintang, the leading Indonesian brand. The Heineken brand had long been available in markets outside the Netherlands. In Europe for example, Heineken owned outright its operations in the Netherlands, France, and Ireland. It held majority interests in breweries in Greece, Hungary, Italy, Spain, and Switzerland and licensed production to breweries in Norway and the United Kingdom. Heineken was not bottled in the large United States market, but was the number one imported beer. In Germany, the heaviest beer-consuming country in Europe, national brands still dominated the market and Heineken was available only through imports. B. INDUSTRY UPDATE (S. T. E. P ) In the early 1990s, the brewing industry was becoming increasingly global as the leading brewers scrambled to acquire equity stakes and sign joint ventures with national breweries. This trend was especially evident in the emerging markets where population expansion and increased promised faster growth than in the developed world. In Europe, in particular, overcapacity and minimal population growth resulted in price competition, margin pressures, and efforts to segment further the market with no or low-alcohol beers, specialty flavored beers, and “dry” beers. Despite the increasing globalization of the industry, there remained substantial differences in per-capita beer consumption, consumer preferences and behaviors, and the mix of competitors from one market to another. C. COMPETITOR’S PROFILE / COMPETITIVE ANALYSIS At the end of 1993, the Heineken brand held a 24% volume share in the Netherlands; several share points ahead of its main competitor, Grolsch. In the same year, sales of beer brewed under Heineken’s supervision reached 5. 6 billion liters, second in the world only to Anheuser-Busch with 10 billion liters. D. MARKET ANALYSIS ( SWOT ) Strengths: •Established name •Good Taste •Premium Beer •Largest selling beer brand in the Netherlands, second in the world Weaknesses: •Heineken’s brand image was not being consistently projected in the brand’s communications around the world. •Some licensees did not maintain a sufficient price premium for the Heineken brand over their own national brands. Opportunities: •Brewing industry’s increasing global trend •Heineken’s acquiring of majority equity stakes around the world •Innovative approaches to brand image that uses leading edge and state of the art advertising Threats: Substantial differences in per-capita beer consumption •Changing consumer preferences and behaviors •Mix of competitors from one market to another E. TARGET MARKET AND POSITIONING MAP The target market for Heineken is global. To have an international presence and to project the brand as “the world’s leading premium beer” with a good taste built on 5 core brand values: taste, premiumness, tradition, winning spirit and friendship. F. MARKETING OBJECTIVES Key Heineken Marketing Objectives in 8 countries: BUILDING: •Germany •Argentina •Brazil ENRICHMENT •Japan •Hong Kong CONFIRMATION •USA RESTORATION •Italy •Netherlands G. PRODUCT STRATEGY Commissioned research projects (project Comet and project Mosa) to clarify Heineken’s brand identity and the implications for television advertising. Also to determine how far Heineken should or could standardize its brand image and advertising worldwide. H. PRICING STRATEGY Seek majority equity stakes in existing and prospective partners to ensure tighter control over production and marketing including the pricing. I. PLACE / DISTRIBUTION STRATEGY J. PROMOTION STRATEGY K. TIMETABLE OF MARKETING ACTIVITIES ( GANTT CHART ) L. MARKETING BUDGET

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