Sunday, April 6, 2008

Heineken N.V: Global Branding and Advertising

This is my favorate case about global branding and advertising.

Executive Summary

Heineken N.V, a long with tradition, superior quality and taste, has been perceived differently from market to market. With the finding of common perceived values of Heineken brand across all markets through Project Comet and Mosa, the company should pursue a global branding strategy. To do so, Heineken should build compelling ICM strategies and provide a 'platform' that is flexible enough to handle the branding for local marketers. It should have both centralization and decentralization marketing organizational structure to promote successfully a global brand and to support local marketing managers in setting and implementing ICM strategies tailored to each local market.

Situation Analysis: Heineken N.V is a well-know, renowned brewery with essential strengths (Appendix-1) to be a global brand. However, at this moment, brand perception is different across the countries. Though Heineken had consistently been marketed as a premium brand, in the US and Hong Kong market, a distinct image was established for special occasion rather than for daily consumption while in Latin America, Heineken is viewed as a European imported beer among others. While project Comet and Mosa strive to establish, gauge Heineken's global brand identity and communication, the real test lies for Heineken to sustain its market lead & reputation in its neighboring European Union which by far is the largest contributor to its sales. Project Comet proves that the brand’s good taste image is built on 5 core brand values: taste, premiumness, tradition, winning spirit and friendship. Project Mosa finds that premium beer tightly relates friendships and important relations which are built based on enjoyable, joyful, personal, luxury social conditions such as meeting people, fancy meals, savoring, elegant parties, intimate moments and places etc (Exhibit 7). The friendship value would be presented in several social conditions through “true friends” and “consumers can count on Heineken as a friend” expressions. The taste would be built on 5 brand values: taste experience, balanced taste, foam, advertising and packaging (Exhibit 6). The taste expressions can be presented in quality and tradition values but should not be presented in brand vision because the research result shows the negative perception in brand vision.

Important Issues: A global brand is needed to provide relevant meaning and experience to people across multiple societies. To do so, the brand strategy needs to be devised that takes accounts of brand's own capabilities and competencies, the strategies of competing brands, and the outlook of consumers experience in their respective societies. The challenge for an international brand is to inspire but at the same time remain personally relevant, attached to the target group’s personal cultures and origins. As consumer needs and tastes vary, Heineken must decide how much to adapt marketing strategy to local needs using a variance of standardized marketing mix & adapted marketing mix, owing to the strong brand preferences & loyalties that exist among the beer drinkers. Also, Heineken need to prioritize between global integration vs. national responsiveness evident from decreasing sales in Holland, Rest of Europe, and Africa (data in page 1).

Global Brand Development: Since stage of beer market development in each country is different, different IMC strategy should be used. In embryonic markets (Africa, Eastern Europe) pushing strategy is suitable. In growing markets (Italy, Spain, Japan) both pushing and pulling strategies are agreeable. In mature markets (North and Central Europe, Australia, USA) pulling strategy is the best. Global positioning target can be achieved through creative marketing communication. Heineken should develop a number of high-profile, quality television campaigns with universal appeal, featuring high profile, contemporary 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 can invite a group of local people between 20 and 30 years of age to think with the company about new concepts and commercials. We suggest that the company should develop universal tagline for each Heineken advertising campaign. The company website will be designed at www.heineken.com and should have a link/separate section to each country market with content in local language. The product label to be used internationally. National advertising should play a prominent role in promoting Heineken brand. 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. Heineken brand should seek association with hot movies targeting to relevant demographic profile to establish the brand position in crowded marketplaces. 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. An important marketing and recruitment platform for the brand is music. Heineken can build presence and credibility; draw crowds in venues around the world and get recognition through music show, international awards in contemporary music. On top of all that, Heineken should coordinate its marketing strategy and advertisement campaign with local in order to use unified brand positioning worldwide.

Role and structure: Heineken’s headquarters should take the combination approach of centralization and decentralization to leveraging global marketing. The headquarters should develop specific guidelines that determine the face of the brand worldwide with fundamental values (positioning, name and logo) and have the most control over advertising policy, guidelines, and operations in all markets. Instead of trying to push a fixed global promotion campaign across the globe, the headquarters marketing truly added value for local marketers by providing a 'platform' that is flexible enough to travel. Local marketers will be challenged to develop locally relevant translations of the program recognizing the importance of inspiring marketing at a local level. The key is to find the right balance between central guidelines that the entire organization follows and the content of the brand at a local level. Headquarters should work closely with local and sets advertising and promotional objectives, assesses all creative themes and executions and approves media selection decisions. On the other hand, local advertising managers submit advertising plans and budgets for their markets, which are viewed by the headquarters. This will allow for consistency in Heineken’s international advertising yet permits local input and adaptation of the promotion program. Heineken should also set up best practices system and transfer knowledge from one country to another so that the wheel doesn't need to be reinvented; and headquarters marketing forces can play an important advisory role for local colleagues.

Appendix-1: Strength and Weakness of Heineken

Strengths

Weaknesses

  • Beer of highest quality (superior quality)
  • Special Taste
  • Original formula
  • Traditions
  • Brands availability
  • Premium brand
  • Lighter Beer
  • Attractive packaging
  • Most heavily advertised Premium beer in Europe and Worldwide and use TV commercials heavily
  • No production base in some area
  • Inconsistent brand image with brand communication
  • TV commercials are just aired in larger markets
  • Efforts necessary for brand revitalization
  • Lack of integrated marketing campaign
  • Lack of worldwide advertising campaign

Appendix-2: Detailed recommendation to achieve the global brand
  • Introduce a number of innovations across liquid, packaging and format that will serve to further endorse international leadership credentials because innovation is the lifeblood of brand domain.
  • Heineken has a strong brand tradition. In order to flourish its brand reputation across the world, convince the consumers that the brand is some way superior.
  • Develop a relationship with customers, build affinity between brand and customers by sponsoring international rugby tournaments, and world soccer tournament such as -( the Champions Leagues, the UEFA Champions League, world's premier club) where target audience of men from all over the world gather in one place.
  • Building the brand recognition for long-term to differentiate the brand Heineken and be sure to add value to the product in order to get the brand loyalty. (For example, Heineken can maintain its good quality or create benefits for society and culture, and provide an emotion to its consumers.

Figure- Brand Environment

Fig- Global Brand Proposition

4 comments:

AJay Sandhir said...

I Like your thoughts, even i have this case in my MBA class from U21 Singapore..!!
Will keep coming back to your blog

tam said...

Cam on chi nhieu, bai viet rat huu dung voi bai assignment cua em:D.

charles said...

Affiliate Marketing is a performance based sales technique used by companies to expand their reach into the internet at low costs. This commission based program allows affiliate marketers to place ads on their websites or other advertising efforts such as email distribution in exchange for payment of a small commission when a sale results.

www.onlineuniversalwork.com

nick said...

thanks for sharing your thoughts on marketing mix. i am doing an assignment on heineken beer for women for my MBA class in south africa and I got great inputs, thanks again, Nicholas