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Heineken N.V. Global Branding and Advertising Case Solution
The case study looks at the Heineken brand empirically with respect to its globalization in numerous countries. More focus has been laid on the strategic entry in terms of minority shareholding, majority shareholding, and wholly owned subsidiaries. Heineken is facing a scenario whereby, it requires revamping its marketing strategy and becoming the leading brand worldwide. For this purpose, Heineken initiated two projects with different purposes. Project Comet was focused towards enhancing the competitive advantage by projecting the brand as “the world’s leading premium brand”. On the other hand, project Mosa concentrated on knowing more from their customers in terms of appealing to the head and appealing to the heart, and incorporating the findings into its marketing communication channel.
Following questions are answered in this case study solution:
What are Heineken’s strengths and weaknesses? Is Heineken a global brand?
Evaluate the research. What has been learned? How can Heineken brand be developed through marketing communications?
What should be the role of Heineken’s headquarters in shaping the marketing of the brand worldwide?
“Managing in a Borderless World” and “Do You Really Have a Global Strategy?”
Heineken N V Global Branding and Advertising Case Analysis
1. What are Heineken’s strengths and weaknesses? Is Heineken a global brand?
Heineken is a global brand, with an intense market penetration in Europe, America, Asia, and Africa. The strategy utilized to enter new markets is mostly through acquisitions, but also includes, wholly owned subsidiaries, majority equity stake, minority equity stake, and licensees. It remains the number one imported beer in the US.
Heineken is a strong brand with a variety of products including, BirBintang in Indonesia, Amsel, Buckler, and Murphy’s Stout. It is pertinent to note that Heineken remains one of the leading market players in beer breweries. It has the world’s second highest volume of beer production at 5.6 billion liters.
Additionally, being the market leader, Heineken was viewed as a premium brand. However, it was acknowledged for being a light beer of distinguished quality served in an attractive packaging. This depicts strong brand equity.
Heineken was essentially the most heavily advertised brand in Europe and worldwide. This depicts the emphasis of globalization with the corporate strategy. Furthermore, Heineken was able to stay focused on its specialty, beer, whereby, almost 82% of sales accounted to Beer, whilst the remaining was derived from wine, spirits, and soft drinks.
There were certain weaknesses as well, primarily, the consumer viewpoint of Heineken as a premium brand eliminated certain segments of what could have been its target market. This can be seen in Europe, whereby, the over capacity of beer brands, local and imported, have indulged in aggressive price competition. While the population level is relatively low, the profit margins are placed under excessive pressure.
2. Evaluate the research. What has been learned? How can Heineken brand be developed through marketing communications?
The pertinent aspect to understand is with respect to market evolution. North and Central Europe, Australia, Italy, Japan, Eastern Europe, South Asia, South America, Greece, and Portugal are yet in the growth and take-off stage. This implies that the consumer tastes are shifting, and there is a trend of development with respect to quality relative to a standard beer. Additionally, there is a trend of premium segment introduction, whereby Heineken can make a lot of profit. These attributes depict a fertile market segment that can be tapped. More and more emphasis must be laid of Germany, due to its high density of beer consumption.
The aspect of building on these suggestions is the critical decision. It was identified that nearly 90 % of the advertisement was done through television. This is an over burden on the consumer mind because it would lead to frustration and eventually elimination of product usage. Therefore, it should be varied across the marketing mediums such as news, online media, billboards, and mobile communication mediums.
Furthermore, a pertinent aspect that Heineken should concentrate on is the flank attack in most countries of Europe. Flank attack pertains to marketing strategy that allows the marketing of almost the same product, with changed packaging and name, to be targeted towards the lower segment. This would raise the profitability of Heineken on the basis of marketing communication.
3. What should be the role of Heineken’s headquarters in shaping the marketing of the brand worldwide?
Heineken headquarters must ensure the quality of their product across the globe. If this segment of quality assurance is decentralized, the premium brand equity may be compromised. Additionally, with respect to marketing, it was observed that only two television advertisements were utilized in multiple countries. This may lead to discrepancy pertaining to the relation between the consumer and producer. Each country has a different culture and taste. Bintang in Indonesia is the market leader because of marketing in lines with the cultural language and significance. Advertisements should be considered as a source of sending a message to its consumers, and thus the company must come to the level of understanding pertaining to the consumer.
Moreover, Packaging is another pertinent aspect that the headquarters must consider depicting a global unification and strengthen the brand equity. This can be done through the creation of a logo that retains a message of friendliness as composed by the project Mosa.
Lastly, pricing must also considered a pertinent role of the headquarters. Pricing holds strategic importance because it entails the demarcation of target market. This would also make it easier for the headquarters to calculate the profitability.
The summary of focus groups depicts that a premium brand is considered a treat with the function of sending signals. On the other hand, a standard beer depicts the essence of thirst-quencher. This defines the magnitude of utility between the two marketing aspects.
4. “Managing in a Borderless World” and “Do You Have a Global Strategy?”
Managing in a borderless world is an intriguing statement that inquiries about, how is the benefit from trade taking place? Managing in a borderless world requires a dynamic thought process that entails the various countries as mere symptoms. These symptoms can be invalid or beneficial, depending on the Global Strategy. Therefore, it would be fair to state that both the above statements are linked together.
Project Comet and Project Mosa were a depiction of these statements. Project Comet emphasized the concept of global strategy, whereby it aimed at creating the world’s leading premium beer. The brand image was to be that of good taste, which was built on taste, premium-ness, tradition, friendship, and winning spirit. Taste and premium-ness were considered as the price of entry; therefore, emphasis on the other factors was considered paramount.
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