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    Heineken Session 3

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    jangloecknerfs

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    Heineken Session 3

    Uploaded by

    jangloecknerfs
    13 views8 pages

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    13 views8 pages

    Heineken Session 3

    Uploaded by

    jangloecknerfs

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 8

    Heineken: Positioning in Changing Times

    Managing Customer Heterogeneity II (Targeting and Positioning)

    Tue, Apr 25 (morning)

     Describe and analyze the characteristics of a specific market using (primary and
    secondary) data on environment, customers, competitors and the company
    (Marketing Intelligence).
     Develop and formulate a marketing strategy based on a consideration of firm
    resources and market opportunities using the STP approach.
     Focus for both above points is on firm resources, company situation, and brand
    positioning.

     Read Positioning TutorialLinks to an external site. (PDF Positioning


    tutorial here)Download (PDF Positioning tutorial here)
     Watch video tutorial on Performing Perceptual Mapping in Enginius.

    Regional President heineken Western Eurppe


    Adrien Tremblay pitchest he board strategies for company growth in Spain

    Spain beer market is over-competitive landscape, deeply entrenched wine culture

    Beer was a cultural anomaly in Spain

    Now:
    1) Target existing beer consumers
    2) Attract new consumers
    Are the companies positioned effectively to reach the most important target markets of HNV.

    Teaching the Spanish how to drink beer


    Should we reposition the brand? And if yes how?

    Peak Selling Season: May – August


    Recent decreased profitability resulting from increased production costs, increased health
    consciousness among Spanish Consumers + tight recessionary environment

    Powerful message to engage Spanish customers to buy more Heineken beer


    Global brand image and position Heineken as the world’s #1 choice in premium lager

    Price point to set and margins to be achieved would be crucial.

    Western Europe and Spain


    Heineken entered Spain in 1984 through the acquisition of El Aguila, a prominent Spanish
    brewer.
    Position: Speciality and Premium Beer Markets
    Exhibit A: List of Top Beer brands in Spain

    By 2008 Spanish Beer Market grew to $19bn; 3.7% growth per year from 2004 to 2008
    Build the Jumbo brewery

    Currents in the Spanish and Global Beer Market


    Product-Market Segment

    Exhibit B: decrease in market share for nearly all segments in the Spanish Market for 2007
    and 2008

    Exhibit D: shows Heinekens Market Share compared to other top beers.

    Before Heineken held a low share among the top brands, hence the only growing product line
    was Premium Lager; Expansion plans for this market were evident

    Standard (or pale) lager 4% or 6% alcohol by volume ABV; mostly offered by mass brewers.
    Mildness and relative uniform taste, lager is a safe choice

    Premium lagers sell for 10-50% more per unit per lager. Spain 2008 was the Sixth largest
    premium beer market in the world, while Premium Lager was the only subsegment in this
    market experiencing growth.
    2008 saw a sharp increase in the market share of smaller brewers who sold unbranded,
    generic beer, which coexisted with a sharp decrease in share for three largest players in the
    premium market (Heinkeen NV, Grupo Mahou – San Miguel and Damm S) Exhibit C
     can experience setbacks due to cost concious consumer behavior in recessionary
    environment

    Ale’s stouts & bitters 4%-11% alcohol (represented less than 5% of the beer market), heavy
    and bitter taste

    Speciality beers (3%-15%) came speciality beers, seasonal products less than 5% of the total
    beer market, cultural experience to complement a meal with a drink bc of its distinctive
    flavors

    Low/no alcohol in 2008 L/NA smallest segment in the Spanish beer market
    Total market share of only 2.3%; but on the rise for

    Customer Profile:
    Major factor:
    Age in alcohol buying patterns
    Target profile is build around age. ; over 35 and had a refined drinking taste

    Quality was a key element of Heineken reputation. Younger consumers though were less
    concerned with a beers quality rather young consumers were longing for health reasons.

    Heineken thus made attemps to move away from its sophisticated quality appreciated
    values to other values of greater relevance to a younger audience.
    The Food + Beer Equation
    Bring people together at public outings and private paries.
    Home sized draught keg to serve Heineken irectly
    BeerTender Exhibit E, holding the DraughtKeg in a chic, understated dispenser

    Changing Consumer Preferences


    Health consciousness or preference for non- or low-alcohol beer L/NA

    Ambiguity between low alcohol and low-calorie beer

    Between 2001 and 2006 soft drink consumption increased by 24%

    Core Customer
    Market leadership in spain relied on tourists who drank Heineken

    Exhbiit F summarizises the overall awasreness level of each brand.


    Exhibit G shows the average perception ratings of respondents.
    Exhibit H summarizes the average consiumer preferences in each geographical segment and
    in each preference segment.

    High price as a barrier, Heineken as a beer for special occasions, brand is too exclusive and
    too individualistic.
    Exhibit 1 showcases the three Heineken brands

    Exhibit J showcases consumers reality in form of a survey which was completed on 32


    mangers to check if the Mental Model of the Spanish Market by Heineken aligns with the
    real world average perceptions
    Approaches to Managing Customer Dynamics

    - Fast pace of technology turbulence, increases in the speed and breadth of


    communication and erosion of many traditional cultural barreirs have increased the
    speed with which customers change

    Entry barriers of emerging customer segments or needs have decreased, customers change
    more quickly

    Lifecycle Approahc
    To predict shopping behavior and customer decision making

    Product lifecycle:
    Introduction, growth, maturity and decline
    Intro: help accelerate diffusion process
    Decline: pullback on marketing and reduce associated cost

    Industry lifecycle:
    1. Early establishment of its range and boundaries
    2. An innovation stage to set a dominant design
    3. The shakeout stage, marked by economies of scale, such that smaller players get
    forced out
    4. Maturity when firms focus on market share and cash flows
    5. The decline stage, when sales deay for the industry as a whole
    Acquisition, expansion and retention AER
    1 In many ways, this approach represents a natural second-order approximation of the
    lifecycle perspective, in that it applies the segmentation solution for managing differences in
    customers (MP#1) to the problem of customer dynamics (MP#2).
    2 Managing customer dynamics by dividing customers into the three stages in Figure 3.3
    matches the way that firms often think about and execute marketing actions in each area. For
    example, some firms assign a separate group to customer retention, dedicating people,
    budgets, and metrics to keeping existing customers.
    3 Relative to other segmentation criteria for identifying groups with homogeneous migration
    patterns, customers’ temporal position in the firm’s customer portfolio is often relatively
    effective.

    Hidden Markov Model Analysis


    Different types of behavior, large spending, frequent spending

    - Attitudes
    - Lifestyle
    - Benefits

     Descriptor Variables
    Run discriminant analysis for segmentation
    Classification Model
    Discriminant Model (out of sampled to people is observed on the web e.g.)
    Arrive at the same descriptor variables for them but different mindset data. We are able to
    predict the segment membership

    Discrimination Analysis to Model Coefficieny

    1. Segmentation variables (bases) define the segments. This information is only available
    from the survey
    2. Discriminant variables (descriptors) describe the segments. This information is in the
    survey, but also often readily available from secondary sources

    Segments:

    Needs of each segment & other segment characteristics

    Externally: an attractive segment in its external/objective strength is equalling appealing to all


    firms in the market
    Internally: subjective strength is specific to each firm’s competitive situation

    Properties of your product


    Advantages
    Strength of your brand

    The GE/McKinsey matrix in 6 steps:


    1. List segments, and estimate size of that segment
    2. List dimensions that drive segment attractiveness
    • Size, volume, growth, margins, current competition...
    3. List dimensions that underlie competitive advantage of the firm
    • Product fit, access, brand reputation, current penetration...
    4. Rate each segment on each dimension (1=worst, 5=best)
    • Forces group discussion, builds consensus
    5. Weigh each dimension (1=least important, 5=most important)
    • Again, forces group discussion, builds consensus
    6. Compute simple summed multiplications (å ratings ́weights), and plot
    Managing Customer Heterogenity

    All customer change


    Differ
    All Competitors React
    All resources are limited

    Positioning is a management process that establishes a distinct position that a brand should
    have in the minds of customers.

    Frame of reference: Against which competitors should we be prepared


    Points of difference: Which differences should customers perceive for your brand
    Points of parity: Which attributes of competitors should your brand match?

    Points of difference:
    - Hard to imitate
    - Relevant to customers
    - Credible
    - Deliverable
    Tangibility points of parity over time
    Tangibility points of differentiation

    1. Product and performance related


    2. Lifestyle and performance related, thus non product

    Points of parity
    Associations that are not necessarily unique to a brand but may be shared with other brands.

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