Indian Institute of Management

Kozhikode

Marketing Management

Case Analysis: Heineken N.V.: Global Branding and Advertising

Submitted to: Prof. Rahul Kumar Sett

Submitted By:

PGP/14/258 Alok Kumar PGP/14/279 Lokesh Singh

PGP/14/280 Mahtaab Kajla PGP/14/283 Naveen Vyas
PGP/14/303 Shruti Kabdal PGP/14/304 Sneha Ramteke
 Situation Analysis :

 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 Identification:

 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 – Strengths and Weakness of Heineken

Strengths
World‟s leading premier Beer.
Known for its good taste, rich tradition and History.
Acknowledge as lighter beer of superior quality.
Packaging is attractive and one of the best in business.
Leader in Netherland market.
Marketing Management | 29/07/2010
Weakness
Lack of global presence in bottling business. In the major
beer-consuming market, Germany and US it‟s imported
and not bottled.
Lack of presence in Latin America. Viewed as just one of
many imported European beers in Latin America.
Perceived premium brand image in some markets, which
resulted in decline of sales volume across all the market.
Heinekens brand image is not being consistently
projected in Brands communication.

Number One imported beer in US Market. Brand loyalty needs to be build on, in Eastern Europe
people keep on switching brands.
Successful premium brand image globally (US, Hong
Kong 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 also
has the ability to come up with advertisements that are
state of the art.

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Project Comet

 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 Taste
o Premiumness
o Tradition
o Winning Spirit
o 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 Mosa

 Focus groups were commissioned in eight countries to

o Understand what male beer drinkers meant by taste and friendship in relation to premium beer drinking
o 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 evolution

Africa Embryonic High local consumer loyalty
Fragmented local brewers
Eastern Europe Take-off Development of standard beer
Shifts in consumer taste
SE Asia,S. America, Greece Started growing Quality improvements
Marketing Management | 12/8/2010
Introducing premium beer
Italy,Spain,Japan Growing High volume focus
Price Competition
N & C Europe,Australia Full growth Consumer Sophistication
Market segmentation
USA Fully matured Brand/segment proliferation
Product Differentiation
Beer Market had different development stages and Heineken at that time was in different phases of development at
same time. In USA the market was fully matured where as in Africa it was in Embryonic Stage.

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 Quantitative Analysis

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

Recommendations

 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
Marketing Management | 29/07/2010

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Appendix- A

Reference Year - 1993

World Beer Production 120 bn Ltr

Heineken Beer Production 5.6 bn Ltr
Total Sales 7420.18 mn guilder
1 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 33487.47
America 0.73 964.62
Asia/Australasia 0.45 593.61
Africa 0.34 445.21

Inference:

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

Marketing Management | 12/8/2010