HEINEKEN N.
V: Global Branding and adverting
Clarify and standardize Heineken brand image worldwide
Executive summary
Heineken N.V is a global brand symbol of premiumness, taste, and tradition
worldwide. It started soon granting license across the world.
As its creator, Gerad Adriaan Heineken said: “ I will leave no stone unturned in
attempting to continuously supply beer of the highest quality”. And he succeeded,
across all markets, the Heineken N.V brand was acknowledged “as a lighter beer of
superior quality”
Despite this worldwide recognition, Heineken could become a “global premium brand”
with a strategic brand management.
Heineken was sorely lacking of a standardized brand image worldwide; it has been
perceived differently from market to market.
However, through project comet and Mosa, Heineken find common perceived values of
its brand across all markets. So it should build a global branding strategy.
As there remained substantial differences in the evolutionary cycles on markets
development and in consumers’ consumption, preferences and behaviour, Heineken
must also build a local approach.
It need to think” Glocal”, and to meet customer perceived value at least in each
country. It must convey a brand identity through every available of marketing mix
variable; in everything the company does in order to build brand equity. To do so
Heineken should build a flexible strategy to handle the image brand management for
local marketers. It should have both centralization and decentralization marketing
organizational structure to promote successfully the global brand and support local
marketing managers in setting and implementing the strategies tailored to each local
market.
Introduction
Heineken N.V is a well know, renowned brewery with all the essential strengths to be
a global brand.
It was founded in Amsterdam in 1863, and a hundred years later it was present outside
the Netherlands, in Europe, America, Asia, Australasia and Africa.
Heineken expand its brand by acquiring some competitors as Amstel in 1968(horizontal
development), and by granting licences. Despite, it had a significant impact on the
brand expansion, it damaged its own image and identity. Consequently it needed to
gain majority equity stakes and presence in its existing and prospective partners to
ensure stringent control over production and marketing. It also need to be more than
an imported beer in USA and Germany.
In the early 1990s, the globalisation of the brewing industry was increasing with the
emergence of national brands. The competition was hard in two market places:
In the emergent’s markets where the population was in expansion and the increased
per capita consumption promised fast growth; and, in Europe, where overcapacity and
minimal population growth resulted in price competition and margin pressures. The
markets were segmented to no or low- alcohol beers, specialty flavoured beers and
dry beers.
In spite of the globalisation, strong local differences remained: per capita
consumption, consumer preferences and behaviour and the mix of competitor from
one market to another.
The main issue, Heineken was facing was: how to position Heineken as a strong global
brand Worldwide, with a standardized image while being respectful to local
differences? At this moment, though it has a global presence, the brand perception
was different across countries. In the Netherlands, it was viewed as a “mainstream
brand” and a market leader, while in the United States and Hong Kong, it succeeded
in establishing a distinct image for the brand (for special occasions rather than daily
consumption), and in Latin America, it was viewed as just one among many European
imported beers.
Besides, opportunities of market development remained huge. Even if Heineken was
the second brewer in the world in 1993, Heineken brewed “only” 4,6% of the
worldwide production with 5,6 billions litres and the sales of the Heineken brand were
1,52 billion litres.
To standardize the brand image worldwide in order to sustain it as a premium brand in
the global market, Heineken conducted two marketing projects, project comet and
project Mosa.
We will review the strengths and weaknesses of Heineken (SWOT analysis), the intake
of project comet and Mosa, What should be the role of Heineken's headquarters in
shaping the marketing of the brand worldwide and we will end with a marketing
strategy permitting currently Heineken to become number 2 in the world.
The internal and external factors « strategic factors » most important to Heineken’s
future will be summarized within the SWOT analysis.
SWOT Analysis:
STRENGHTS WEAKNESSES
Light beer of superior quality No influence on the licensees for
Premium brand the brand
Lighter beer No production base in USA and
Presented in attractive Germany
packaging Inconsistent brand image, no
Special taste brand identity
Tradition Declining brand image in
Number of sales Netherlands`
Market leader in Netherlands Declining of the sales volume
Diversification with acquisitions Necessity to revitalize the brand
(Amstel, Buckler, image and communication
License Lack of worldwide marketing and
Premium brand advertising campaign
Heavily advertised premium Lack of global branding: image of
brand in Europe and Worldwide the brand was different in
(TV commercials) different countries
OPPORTUNITIES THREATS
Larges market share to take Brewing industry becoming
Huge consumption per capita in increasingly global
some countries ( Ireland, Equity stakes and join ventures
Germany) with local breweries
Global expansion Growing price competition in
Growth in emerging markets Europe, due to overcapacity and
Africa still embryonic in the beer minimal population growth
market, Eastern Europe… Offering diversification: no or
low- alcohol beers, speciality
flavoured beers and dry beers
Variation in market on the basis
of per capita consumption,
consumer preferences and
behaviours and competition mix
High local consumer loyalty in
Africa
The intake of project Comet and Mosa:”strategic brand management”
To be perceived as a strong brand worldwide and increase corporate success, brand
vision must be clear and deliver a consistent message about the value of the brand.
This is the aim of “strategic brand management” and of project Comet and Mosa:s
1. Insure identification brand customers
2. Firmly establish the brand meaning with tangible and intangible brand
associations
3. Elicit the proper responses to this brand identity and meaning
4. Convert brand responses to create an intense and active loyalty between the
customers and the brand
In 1991, project Comet defined five components of Heineken ‘s global brand identity
and explored how they should be expressed in Heineken brand communications.
The goal of this project was to find how to enhance Heineken’s competitive advantage
by more consistently projecting the brand as “the world’s leading premium beer”.
Project comet decides that the brand taste image will be built on five core values:
taste, premiumness, tradition, winning spirit, friendship and took the challenge on
communicating those all five values in each advertisement with local adaptations.
In the late 1993, project Mosa was established to find out what male beer drinkers
meant by taste and friendship in relation to premium beer drinking and which
expressions of taste and friendship could be used by the brand ‘s advertising.
Project Mosa, which involved a different team of executives, identified the
expressions of taste and friendship that had the most appeal and explored how they
should be expressed in Heineken television advertising worldwide.
Heineken’s international advertising manager commissioned focus groups in height
countries in Europe, America and Asia to understand:
What male beer drinkers meant by taste and friendship in relation to premium
beer drinking?
Which expressions of taste and friendship could be used by the Heineken brand
in advertising?
The project team identified in advance the following expressions of
Taste which appealed to the head
Members were asked to identify which of several factors they perceived as
strong or weak indicators of beer taste
Strong indicator of beer taste:
Scale of plant, product: taste experience, balanced taste, foam, advertising
and packaging.
Friendship, which appealed to the heart
Members dealing with friendship discussed the different social occasions, when
a standard beer versus a premium beer would be appropriate.
A premium beer is a beer you drink in small groups, for social events, fancy
meal, not at home, at intimate moment and place…..
The role of a premium beer is to enhance self-esteem, treat; it’s helpful in
communication and has a signal function.
The second test objective was to elicit consumers’ reaction to both a visual and a
message claims, and then, to establish each claims relevance to and overall suitability
for promoting the Heineken brand.
Taste expression relevant for promoting Heineken brand were:
Quality:(2 years Amsterdam training, 24 quality checks, bottles returned to
Amsterdam)
Tradition :(origin recipe and where the beer was born)
Friendship expression relevant for promoting Heineken brand:” True friend and
always count on Heineken”
To be useful, these results must be adapted carefully and locally. Heineken should
forge a deep, lasting, intimate and emotional connexion to the brand that transcends
material satisfaction with each customer worldwide.
Building a strong “glocal “brand:
Heineken executives believed that the beer market in each country followed an
evolutionary cycle, and that at any time different countries were at different stages
of market development. Regarding to the market beer development, Heineken
developed different marketing objectives summarized as follows.
(Based on exhibit 1 and 2)
Beer Market Evolution HEINEKEN Marketing
Continent
Objectives: Building,
enrichment, confirmation and
restoration of the brand image
Embryonic Market Not mentioned, WHY?
High local consumer loyalty
Africa to local brands
Fragmented market
Embryonic: Not mentioned, WHY?
Eastern Europe Shifts in consumer taste
Development of standard
beer (in opposition to
Heineken premium beer)
Take off Market: Argentina, Brazil: building
Southeast Asia, South Quality improvement
America Introduction of premium
Greece Portugal segment
Italy, Spain, Japan Growing Market: Japan: Enrichment
High volume focus Italy: Restoration
Price competition
North/ Central Growing Market: Germany: Building
Europe, Segmentation
Australia Consumer sophistication Netherlands: restoration
Mature, declining Market: Confirmation
USA Brand/Segment proliferation
Product differentiation
Analysis and recommendations
Since stage of beer market development in each country was different, different
strategies should be used.
In embryonic markets such as Africa, Eastern Europe knowledge of the end customer is
crucial. Heineken has to develop awareness of the brand in these countries, the
consumers have to be introduced and accustomed to the brand. To do so, and to
attract customers’ interest, Heineken needs to be aware of the cultural, social,
political differences in each country to meet costumer perceived value. Then it could
create a brand that conveys meaning to the end local customer. So, Heineken should
work with its licensees and stockholder to co-create a brand image and promise within
customers can identify. It could also benchmark its local competitors in order to
improve their competitive performance.
Then, Heineken can use a “push strategy”; to do so, Heineken needs to use it sales
force and trade promotion to induce local retailers to carry, promote and sell the
produce to local end-users. Reach and frequency of advertising will have to be higher
as the aim is to get the people familiarized with the company and to create brand
awareness.
In “take off” markets, such as Southeast Asia, South America Greece and Portugal,
most of the people already know the brand exists but not all so the company can
create awareness through advertising.
As Heineken is recognized as a premium brand worldwide, it should be the pioneer on
the premium segment and view as the best of this segment. It should make a strong
advertisement investment in” product awareness advertising”, communicate to the
consumers that Heineken beer has superior taste and high quality.
Yet in Greece Heineken has a great market share position. (Exhibit 3).
In growing markets such as Italy, Spain, Japan, Heineken should increase its
distribution coverage and enter new distribution channels or it can enter new market
segments and it can offer beer at different sizes and flavours.
Be Everywhere! The advertising should be product preference advertising.
In mature markets such as North and Central Europe and Australia, the rate of sales
growth slows, sales flatten on per capita basis because of market saturation, the
absolute levels of sales starts to decline, (i.e. Europe and Netherlands where the sales
were declining for -1,6% in 1993 versus 1992), and the costumers begin switching to
others market offerings. At this stage, Heineken needs to increase its investment to
dominate the market and strengthen its competitive advantage.
In such intensive competition, the issue is to struggle to become and sustain “a big
tree” position and achieve profits through high volume and low costs, or to pursue a
niching strategy.
Heineken has three potentially useful ways to offer new value to customers; it could
modify the market (size, number of users), the product (quality, feature, style) or the
marketing programme strategy.
To make up sales volume, Heineken can the expand number of brand users or the
usage rate per user.
To expand the number of brand users, Heineken should try to convert non-users or
“little” users (women), enter new market segment: no or low -alcohol beers, special
flavours. Or attract competitors’ customers.
To expand the usage rate per user, make Heineken consumer drink the product in
more occasion. For instance, as Heineken is viewed worldwide as a premium beer
drunk in enjoyable, joyful, personal, luxury social conditions such as meeting people,
fancy meals, savouring, elegant parties, intimate moments and places (Exhibit 7).
If Heineken is yet seen all around the world as a premium beer you drink with friends
in small groups on social events the advertising must add moments to drink the beer
and shows a premium beer could be drunk at home with your wife, after work
watching TV /… When people think you should drink a standard beer. To make it
clear, “ you deserve to drink a premium beer anywhere, in understanding, because
you worth it! You are a premium person who deserves a premium beer anywhere, at
any time, with anybody!
In Declining Market such as in USA, the decline stage is revealing brand segment
proliferation and product differentiation. Heineken must reposition the brand by
innovation.
Actually, to become number 2 worldwide, Heineken’s headquarters should engage in
a mixture of marketing mix activities, each of which playing a specific role in building
or maintaining brand equity.
Global positioning target can be achieved through creative marketing communication.
Heineken should develop a number of high- profiles, quality television campaigns
endorsed by worldwide celebrities. However, within the marketing mix, there will
always be a requirement for locally driven campaigns and support. By connecting to
‘local situations’, consumer will develop a greater emotional tie to the company.
To implement that, Heineken must increase the brand touch point locally and
globally. They should manage that by sponsorship of true and virtual events.
Sponsorship strategy for the Heineken should be strengthened to build brand equity
through relevant associations with high-impact, high profile sports and music events,
films. The company should sponsor numerous sports events at local and regional level
to help support international, premium positioning and awareness, enforce brand
equity, drive volume and recruit new consumers to the brand.
They should be also sponsor of Internet games and be present in virtual world.
Heineken should also create a global brand community with an Internet website to
create a brand culture, emotional attachment to the brand and to implement co-
creation with customers. It should probably ask customers how they perceive the
brand, which new concepts Heineken should implement... Make advertisement in You
tube, in order to revitalize its image.
Heineken should enhance its brand portfolio while strengthening its presence in niche
segments with diversification and special features, flavoured beer, different sizes…
To end, Heineken could innovate with brand extensions: why not creating a light
flavoured Women beer? In order not to damage the existing image of Heineken brand,
(a male beer), Brad Pitt and Angelina Jolie could endorse the advertisement in a
“mister and miss Smith “ scenario. The woman beer should be seen as the opposite of
the man one. As women drink wine or Champaign, they could also drink beer. This
new beer could fit to young women (20 -30 years) in premium events, as bubbles less
expensive and in a different packaging than Champaign: a little pink bottle. Heineken
should cover “red carpet events” to promote this new product and try it first in Bars
and nightclub. Before launching this new product, Heineken must be sure it will meet
or create a need.
To succeed, Heineken needs to put marketing at the beginning of the process and
keep always in mind it must enhance customer perceived value while creating
“dreams” that exceed customer’s expectations. It must create emotions, experience
with the brand for each customers.
