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What Are Heineken's Strengths and Weaknesses?

Essay by   •  April 13, 2012  •  Case Study  •  1,377 Words (6 Pages)  •  5,246 Views

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1. What are Heineken's Strengths and Weaknesses?

Strengths: Weaknesses:

* Branding: branded as the worlds premium priced beer of superior quality

* Traditional roots: established in 1863 as a high quality beer

* Global market share: 2nd highest sales of beer in the world (5.6 billion liters) behind only Anheuser-Busch (10 billion liters)

* Domestic market share: They are volume share leaders in the Netherlands with 24% of the market

* Marketing/Advertising centric: 90% of their advertising is television commercial based * Lack or control over production & marketing activities of its licensee's

* Lack of influence over how licensee's market their domestic brands

* Heineken's image is perceived differently in foreign markets

* Inconsistency of marketing practices in foreign markets

* Low market share in Germany, the heaviest beer-consuming country in Europe

* Declining sales volume

2. Is Heineken a Global Brand?

Heineken has been a dominant global brand throughout the developed world for some time. Through acquisitions, licensing and strategic alliances; Heineken has established an intricate international distribution network. As a result, their products are marketed and sold all over Europe, North/South/Central America, Asia, Australasia and Africa. Heineken also oversees brewing operations of many local and regional brands outside of the Netherlands through their foreign subsidiaries. As of 1993, they had the 2nd highest sales of any brewery in the global beer market (5.6 billion liters), behind only Anheuser-Busch (10 billion liters). Of the 5.6 billion liters, the Heineken brand accounted for 1.52 billion liters itself.

From a strategic prospective, Heineken management clearly views their beer as a global brand. Their commitment to global branding is witnessed through the company's strategic focus on marketing and advertising activities. Heineken specifically invested heavily in advertising their beer as a premium priced and superior product throughout the various global beer markets. As of 1993, Heineken was the most heavily advertised premium brand in the world.

3. Evaluate the research and summarize what has been learned.

Heineken international marketing executives- in their attempt to plan the global brand development of the Heineken name- had to identify the most receptive countries in the world toward their beer, why those countries were consuming it, and how they could get them to consume more. Research was conducted through a variety of focus groups to determine how the brand would be perceived against pre-established criteria in target countries. The results would be used in the advertising planned in those same countries.

In addition to learning about how to guide the company's advertising efforts, the managers also wanted to ensure that the brand's image would be marketed consistently across borders. After Heineken's management identified the core values that will guide the firm's advertising, they used some of those components as the backdrop of focus group sessions held in eight different countries.

The goal of the research was to hone in on how certain brand values (taste and friendship) are perceived in a variety of countries so they could tailor the advertising accordingly. It was determined that beer drinking as a culture actually follows a product life cycle similar to that of any other product. The countries that consume Heineken the most were plotted against a graph showing their progress in terms of the life cycle.

Distinctions were made by management beforehand between the expressions of taste that appealed "to the head" and those that appealed "to the heart." These distinctions were defined according to those traits relating directly to the product (head: brand vision, quality, brewing skills, etc) and those indirectly related to the product (heart: trust, sports, true friends, etc). It was determined that those factors relating to taste and quality were the most important as an average across countries, and that price was a non-factor. These findings were sufficient to reinforce Heineken's plan to market the beer on the basis of superiority.

4. How can the Heineken brand be further developed through marketing communications?

Advertising plays an important



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