When people are talking about those football matches, Heineken’s image will come up coincidentally, undoubtedly. The potential impact of the marketing outcome of Heineken is to some extent, very huge and continuous. The way how Heineken sponsors the Champion League and how those marketing campaigns are taken place, as a result, are worthy dealing with. In the meanwhile, the Super League in China has witnessed its boom. Since Heineken does not sell very “well” in Chinese market, lacking of feasible marketing strategies is one of the key matters why its business doesn’t run smoothly.
As a result, this report mainly focuses on Heineken’s marketing approach in UEFA Champion League by analyzing its “Sports Marketing” patterns, and to figure out possible solutions for Super League plus the Chinese Heineken market. The following parts will in succession describe Heineken Global Market and Chinese Heineken Market, discuss the approach in details and give suggestions that how it can also be applied to help expand and strengthen Heineken’s business in Chinese market. Introduction It was in 1863, the year which Heineken was founded by Gerard Adrian Heineken in Amsterdam (Kriscenski, A. 012).
Today, Heineken has already enjoyed its top position in market, being as one of the most popular beer brands in the world. Great success has been witnessed in Heineken historically, especially in European countries, according to Griffin & Weber (2006).
However, Heineken is not only successful in Europe, but also made it in other parts of the world. (See figure 1 in Appendix).
The Essay on International Market Products Chinese Companies
1. INTRODUCTION There is no doubt that England acts an important role in the world! s market system, especially in Europe. But it seems that English products have little effects on Chinese market. To research the influence of English companies and products in China, I make a hypothesis that is! ^0 there is just a few Chinese consumers realize that English companies and products are famous in ...
Its great success in Europe which is described as the base of beer industry, is partly counting on that European people like drinking.
And the sports marketing strategies of Heineken in Champion League are mainly classified as two strategic domains, stated by Fullerton and Merz (2008), theme-based and alignment-based. Apart from that, Heineken launched its app related to Champion League to promote the sales as well as to manage their relationship with the target audiences. But, expanding outside of the Europe, Heineken seems not to share a profitable market in Eastern Asia, to name the typical one, China. According to Zhou(2012), one major problem has been found lying in the promotion patterns of Heineken in Chinese market, along with three other key findings.
This report mainly aims at analyzing Heineken’s marketing patterns in Europe with UEFA Champion League, by creating better understanding of the campaigns, a possible solution to the underperformed China Heineken market will be proposed. The following report is classified into five parts, including part 1, an overview of the Heineken market globally and in Europe, part 2, an analysis of Heineken Chinese market with major problems found out, after that, in part 3 Heineken’s marketing cooperation with UEFA Champion league will be described in details, followed by professional analysis in part 4.
Finally, recommendations will be addressed to provide feasible approach for China Heineken marketers. After these five parts mentioned before, a comprehensive conclusion will be summarizing the whole report. The elaborate analyses of Heineken’s sports marketing strategies weigh a most, while the suggestions and recommendations are written less detailed. 1. Global overview of Heineken 1. 1 Brief introduction Heineken is one of the most popular beer brands in the world. It was founded by Gerard Adrian Heineken in Amsterdam in 1863. And it merged its biggest competitor—Amstel in 1968.
Nowadays, according to Li Bing (2011), the beer of Heineken was sold like hot cakes in 170 countries all over the world. 1. 2 Heineken’s success in Europe Heineken’s product and operating business model is quite successful in the world, especially in Europe. The major base of beer industry is in Europe, which takes 40% of the global beer production. As the greatest brewery group in Europe, Heineken’s European production quota summed up to 73%, its production amount increased by 39% in the past decade. There are some countries make great contributions to Heineken’s success in European market: . 2. 1 Netherlands Heineken owns 52% of the market quota in Netherlands, and it makes Heineken became the most powerful market leader since the percentage is much higher than its competitors: Grolsch (15% market quota) and Verenigde (15% market quota).
The Essay on The Stock Market is a Example of Perfect Competition
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Although Heineken’s market share had decreased from 45% in 1980 to 30% in 1991, the downturn was stopped by launching its innovative product packaging. Meanwhile, the client service strategy improved its market share in restaurant and cafe. Heineken successfully protected its dominant market position. 1. 2. 2 Spain
Heineken enter in Spanish (the third largest beer consumption country in the European Union) market in 1960s, which is later than its entering of other European countries. In order to make succeed in Spanish operating activities, Heineken purchased 37% shares of El Aguilia (a local beer company) at that time. Now, Heineken already holds 71% shares of El Aguilia. Heineken decided to reorganize the production model of El Aguilia, which was always marred by its outdated technology and poor brand image. Heineken adjusted the market positioning of Aguilia beer to standard position and promoted Heineken beer in top market.
Finally, Heineken takes a great proportion of Spain high-class beer market. 1. 2. 3 Britain In UK, the production of Amstel beer was started in 1997. Although the British market congested, Heineken held an outstanding growing speed. The sales volume of Heineken Export processed beer exceeded the total sales volume of top beer market in Britain. At the same time, Heineken Filtered draft beer maintained a stable market quota though facing competitors’ large-scale sales promotion. Since Britain is the second largest beer consumption country in Europe, Heineken made great efforts on it.
The consumption model in UK is different from other European countries, more than 80% beer are consumed in bars, which always have direct connection with brewery. So Heineken built up connection with Whitbread brewer and let them brew low-alcohol beer to cater for British’s preference. This kind of Heineken low-alcohol is well-received in Britain and also improved Heineken’s brand awareness in UK. 1. 2. 4 Germany From the perspective of consumption, Germany is the largest beer market in the world. However, Heineken just entered in Germany in 1993.
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... Rawd Brewery CO. ,LTD. Asahi was and still is the leader brand in Japan by having the most market shares in the beer market in ... the hypermarket and position itself in the same level as Heineken. Apart from that, in March, Thai Beverage Marketing CO. ,LTD. ... the their main company in the foreign country; by starting from having the San Miguel’s breweries factory in Pathumthani as their production ...
It is because Germany has a Purity Law, which strictly pointed out that the beer only can be made by using malt, oats, water and yeast. In addition, Heineken’s development potential was limited by customers’ loyalty towards German local brewery. Therefore, Heineken decided to sale the beer through distribution channels, such as high-class restaurant and cafe. At present, there are more than 2,000 bars and restaurants provide Heineken beer in Germany. 1. 2. 5 Other countries in Europe Heineken has merged many local beer companies in Europe to maintain the eading position in brewery market. For instance, Heineken merged Calanda and Halddengut beer companies in Switzerland. These two local brands have highly improved customer loyalty and profit for Heineken in Switzerland. The brand awareness is also improved by sponsoring big sports events, such as UEFA Champions League. Due to the acceptance and recognition of beer in Eastern European customers, Heineken still has huge potential development in Eastern Europe. It always takes the Top 3 sales volume in most of the European countries. 1. Heineken’s success in the world Heineken is not only successful in Europe, but also made success in other parts of the world. Its total profit is increasing steadily year by year. (See Appendix Figure 1: Bar chart of Heineken’s income and profit from 2009 to 2012) Heineken has good performance in North America, although there is the hometown of its competitors—Miller and Budweiser. Heineken owns many sub-brands, such as Amstel, and cooperative companies around the world. Heineken is moving forward to improve the sales performance in Central and South America.
Its operation is still expanding in African countries, such as Angola and Nigeria. Besides, the sales volume in the Asian-Pacific region is growing by 10% per year, of which China takes half of the consumption volume. 1. 3 Marketing strategy of Heineken in the world The main reason that Heineken succeeded in the world market, particularly in European market, is that they use STP (Segmenting, Targeting and Positioning) strategy to strengthen and expand the market. It caters to each target country’s customers by combining its core brand (Heineken, Amstel, Murphy’s and Buckler’s) with those local companies.
The Term Paper on Bringing a Brazilian Cosmetics Brand to China
Introduction “Natura’s mission is to promote ‘bem estar bem ‘, the well-being and being-well. In Natura’s philosophy, everything is connected. The Natura experience is all about building the relationship of yourself with others and the nature,” our Natura host Jimena Berlanga opened the introduction of the company passionately by talking about the meaning behind the brand. I immediately sensed the ...
That is, building up strategic brand or regional brand to win customers’ loyalty and preference of the brand. The general methods that Heineken adopts are: * Adopt a domestic “standardized brand” which aims to the main primary consumption market, For instance, using the “Dreher” brand in Italy and using “Tiger” brand in Singapore. * Apply a classic brand to occupy the middle-class market. It might be a local brand, such as “Aguila” in Spain or “Amstel” brand. * Use Heineken in the top high-class market. The beer could be made locally or exported to the target countries.
The brand image and quality are carefully controlled by the headquarters in Amsterdam. (See Appendix Figure2: Branding for different market level) The Heineken Company also realized that the expectation and taste are clearly different in diverse area. Therefore, the head office gives high autonomous rights to the subsidiaries. This strategy easily makes Heineken’s products well-received and popular in each different local market. With the goal-oriented operation and the guidance of clever marketing strategy, Heineken is moving forward to make great development in the future. . Overview of Heineken in China 2. 1 Brief introduction (See Appendix Figure 3: Beer volume share by market: 2010) As the biggest beer market, China accounts for 25 percent of the world’s beer volume. In the meantime, the beer market has continuously growing in China since 1995. According to Tan (2011), the regional director of Heineken-Asian Pacific Brewery, international premium beer become more and more attractive of Chinese consumers, the segment of premium beer consumption has increased by almost 25 times since 1995.
The tremendous commercial opportunity attracts lots of breweries overseas who want to dominate in China’s beer market, including Heineken. Furong(2009) introduced that Shanghai Asia Pacific Brewery Co. , Ltd controlling the share of Shanghai MILA brewery was the symbol of Heineken entered in Chinese market in 1998. MILA brewery produces and sells both Tiger and Heineken. Heineken focus on the high-end market while Tiger focus on the middle market. In 1997, Heineken took control on Hainan brewery. So far, Heineken’s strategy in China formed basically as centered on Hainan and Shanghai.
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Heineken promote their product largely in western restaurant and night entertainment place. In the same time, the company set a premium portfolio targeting varying price points and consumer tastes. According to Tan (2011), Heineken is treated as super premium, Tiger is affordable premium. The Anchor is their mainstream, and HAINAN beer as well as AOKE is viewed as discount product. They also provide dark beer—the MURPHYS, and cider—the STRONGBOW. Those different kinds of beers increase the variety of tastes available to Chinese consumer, also target different groups based on their income level and different consumption habit. . 2 Sales strategy Under the tense competition in Chinese beer marketing, Heineken has developed a series of strategies specific to Chinese consumer: Firstly, all the beers are imported with original packaging. According to Tan (2011), the company thought consumers in China have sense of original packaging product identity, especially on premium product. Secondly, Qiang (2006) claimed in the book that the package of Heineken is different from other beer in Chinese market. The unique package is good for consumer to recognize the brand.
Thirdly, Heineken has segmented China’s market. It focuses on the market in southern China, because people in Pearl River delta have relatively higher income level, lots of rich people here can afford premium beer, so they became target consumers of Heineken. 2. 3 Promotion Heineken is always spending a large sum of money on marketing. In 1999, according to Qiang (2006), it spent around 14 percent of their gross income on marketing. Heineken is well known as the sponsor of UDFA Champions League, but it also hosted tennis competition in Shanghai.
Tennis is always seen as noble sport in China, targeting on high income level people makes Heineken always focus on this kind of “rich people” activities. The competition has attracted lots of attention. People who follow these activities started to get involved in it. Besides, Heineken see young adult as huge potential customer group, so they also hosted some music festivals to draw attention from young people. They invited band and singers from both China and other countries like America, Australia. Some newspaper and website reported that the music festival has held successfully.
The Essay on Knowledge Is Sports Bliss
Knowledge is Sports Bliss When I hear the statement, the more you know the happier you are, it makes me think of my future and it what it holds in store for myself. Is knowledge the key to success and happiness? I believe knowledge is not only the key to happiness but also the key to a better life. Many examples of this may be found in sports. The more an athlete or coach knows the better his life ...
Those fans that came to the concert all had great time according to the report, not only because of the music, but also the atmosphere that Heineken created. After the festival, the brand deeply rooted in the hearts of those young fans. 2. 4 The frustration Despite of the well performance in European and American market, Heineken is not always doing well in China. It lost around 160 million dollars every year before 2006. According to Furong(2009), a huge competitor of Heineken, the American brand– Budweiser, exceeded Heineken, took up over 50 percent of premium beer market share in China.
There is several reasons lead to this consequence: First of all, all the beers are imported directly from Holland. This strategy works at the beginning. But the cost of importing beer with original packaging directly from Europe is excessive for the company. At the same time, Chinese consumer became more mature since the economy globalization, and they started to feel less novelty about foreign beer brand. Heineken’s competitor — Budweiser has the indigenization strategy to reduce cost. Unlike Budweiser, Heineken had no plan for indigenization, so the cost is still too high, which directly cause negative profit.
Secondly, even though Chinese beer market is huge, the consumption of premium beer segment is no more than 10 percent of the total market (see table 2).
Most large beer brand are centered in coastal cities besides Heineken, result in even larger competition. Meanwhile, not all Chinese people can afford the relatively high beer price. Most of Chinese think the price of local beer are lower and more acceptable than Heineken. And the high cost of importing original package make the price even higher than other premium beer in China. Thirdly, regardless the brand image Heineken created, people are focus more on the taste of the beer now.
They feel bitter is not what they want in their fizzy light-alcohol drinks. Chinese people prefer those beers which cater their taste, like the local brand—Tsingtao. Fourthly, Heineken has only few advertisements in mainland China. In selling season, all other beer companies like Tsingtao and Budweiser are doing lots of sales promotion. On contrast, Heineken stay the same strategy as before, without doing large amount of mass media advertisement or continually sales event. This condition result in brand name awareness of Heineken became lower than other beer brand.
These reasons make Heineken hard to compete with Chinese local beer company or even other foreign one, furthermore, leads to its bad performance in China’s market. (See appendix Figure 4: China by segment: 2010(mhl)) 3. Heineken, the Sponsor of Champions League in last 19 years Every Year the biggest task for those staffs from Heineken is the sponsorship agreement for the UEFA Champions League. Successfully, they obtain the extension of sponsorship for the UEFA Super Cup in 2012 to 2015. What prompted Heineken to focus on about the Sponsorship? 3. 1 Introduction of UEFA
First of all, here is the introduction of the UEFA Champions League. As the world’s most prestigious football tournament, Club’s cup is an annual continental blub football competition organized by the Union of European Football Associations (UEFA) since 1955 for those top football clubs in Europe. The most- watched UEFA Final to date, as well as the most watched sporting event worldwide in 2011, appealed 178. 7 million television viewers. And this is also the feast of sponsors. Like the FIFA World Cup and Olympic games, a group of corporations and famous brands sponsor the UEFA Champions League.
The tournament’s current main sponsors are: Ford Gazprom Heineken (excluding Spain, Turkey, France, Switzerland and Russia, where alcohol sponsorship is restricted. In Spain, France, and Switzerland the Heineken adboard is replaced by an “Enjoy responsibly” or “open your world” adboard and in Russia the Heineken adboard is replaced by a “No To Racism” adboard).
MasterCard, Sony Computer Entertainment Europe, UniCredit, HTC These main sponsors were guaranteed to have the priority on television advertisements during games with the maximum exposure. What should the Heineken focused on is the real effect of this ads and exposure. . 2 The cooperation of Heineken and UEFA Heineken has successfully been a sponsor of the UEFA Champions League since 1994 with and continues their long-term association with this prestigious tournament. Actually, the sponsorship of Heineken has become a cornerstone of its marketing communication, tremendously promoting the brand image on a worldwide scale. Moreover, the partnership with Champions league will continue to improve the perceived value of Heineken brand and expect to extend the leadership with the premium beer segment in the world. 3. 3 How Heineken works with this sponsorship
With an increasing number of TV viewers watching live coverage of the UEFA Champions League year by year, which more than 140 million in 2011, this global sporting event has become synonymous with the Heineken brand because of the exposure promotion. When football fans drinks watch the game, they would like to fancy they have some cold Heineken in their fridge. When they do not have, they tend to buy a dozen for next game next week. On the other hand, they would like to get in a bar which is with the big logos of UEFA champions League and Heineken and then buy some Heineken directly.
This association of beer and football is simple but proved to be effective. Also, Heineken emphasizes its strategy of bringing the UEFA Champions League closer to the soccer fans. Outside the Europe market, last 3 years, Heineken has taken its promotion team and ads of UEFA Champions League into Latin American and Asia. They gave fans a unique opportunity to see this famous sporting icon first-hand. In 2008, more than 350 fans participated the competition of “Heineken Star Final” and finally attended the UEFA Champions League Final in Moscow.
And over 150 consumers watched the final match at a Grand Safari Location in South Africa, as part of the Heineken Star Final competition. Moreover, a few lucky fans got an opportunity to watch the warm-up from the pitch-side before the game started, offered by the Heineken Back Stadium Pass. This activity seems to be simple and small scale. However, it makes an instant effect of their consumers. Everyone knows Heineken is the choices in the month of the UEFA Champions League in subconscious and all fans would like to try his or her luck.
Especially the fans form Asia and Latin American market, it is expensive to buy both the match ticket and plane ticket to see a live game. But Heineken make this event to the fans closer. 3. 4 Brief Analysis about Success in Sport Marketing 3. 4. 1 Target Market “The UEFA Champions League is one of the world’s premier sporting competitions with unrivalled international reach and professional standards. This makes it a perfect match for Heineken, the world’s most international premium beer brand” said by Alexis Nasard, chief commercial officer at Heineken.
The Coke companies can make promotion toward to those teenagers who play basketball. However, considering the limit of age, the Heineken surely had better to choose its target market as football fans. 3. 4. 2 Long term Beer Culture An exciting game with beer is kind of like a wonderful movie with popcorn. Maximizing the intrinsic value of beer and football is the key work of all beer companies. When people get out of work, what they need is a relax activity but also stimulate their vitality. Football match should be a good choice. And a football match with a cup of superior beer would be perfect!
Football game is the most popular sport in the world, and Heineken catch this market as a first mover, since they know only a long term consumption culture can make Heineken sustainable. 3. 4. 3 Not only get in, but also get in well and sustainable The culture of beer can be formed by a strong promotion. However, beer is like cigarette, excessive consumption can cause enormous social problem. In this case, Heineken expertly makes its beer culture healthier and more positive. Embracing quality over quantity, Heineken, as a premium beer brand, seeks to build a responsible drinking culture when consumers enjoy football game.
As known, the overuse of the alcohol often became the blasting fuse of those brawl fights of football fans. Therefore, according strategy was launched in 2008 and Enjoy Heineken Responsibly’ was developed. This initiative launch aims to raise awareness around responsible alcohol consumption among those football fans who are also the beer drinkers. The example of commitment to addressing this issue was the decision to promote the ‘responsible drinking’ tagline on promotional boards at UEFA Champions League matches. It can sell a positive image of Heineken brand in a global scale, especially for those teenager fans. . 5 The Interaction of Heineken with Champions League The other factor makes the case of Heineken successful is the interaction of Heineken. Comparing to the other Beer brands, Heineken is activating its sponsorship of the UEFA Champions League soccer tournament through a brand new mobile application that enables the users to have a grand event without buying the live ticket. And our group is consciously focused on this new mode of market promotion, which may be crucial for the secondary rise in China market. In modern society, people cannot enjoy the football game simply because their job.
The upsurge of the app in the cellphone makes people enjoy the game more convenient. And Heineken seize this marketing chance. (See Appendix Picture 1) All these apps are available on Facebook page of Heineken, also through Apple’s App store. The latest app lets users play live with every UEFA Champions League match when they are watching TV. Users can predict the outcome of the coming game in real – time to score points and create their league. Consumers are happy to see their names on the Heineken’s national leaderboards because they have a chance to win a prize on the global scale.
This is a dramatically successful case of Heineken is embracing mobile world. At the base level, it’s another way for Heineken to reach customers who are passionate about soccer and the UEFA tournament, simple but efficient. 4. Professional Analysis about Heineken Case 4. 1 Sports Marketing Over the past decades, “Sports marketing” has expanded to a crowded, billion-dollar global industry. (DeVous, S. 1994) According to Gray & McEvoy (2005), “Sport Marketing” is the noun described as the activities of industrial and consumer product and service marketers who gradually increase the use of sport as a vehicle of promotion.
Dating back to 1978, the genesis of this term has been attributed in the Advertising Age. “Marketing through sport; that is using sport as a promotional vehicle or sponsorship platform for companies that market consumer, and to a lesser extent, industrial products. ” best characterized the series of events and activities, noted by Gray and McEvoy (2005), who have been working on a compilation recently for a literature of sports marketing.. However, though people started to be aware the use of sports events as a marketing promotion tool, the way they activities are carried out diversified dramatically. . 2 Strategic Domains In a written report published in 2008, it clarified that there exist four strategic domains in sports marketing campaigns, including the theme-based, product-based, alignment-based, and sports-based strategic domains. (Fullerton, S. & Merz, G. R. , 2008) By creating better understanding of those strategic domains, Heineken’s marketing activities in UEFA can be summarized into theme-based and alignment-based strategies. * Theme-Based * Alignment-Based 4. 3 Theme – Based Strategies
According to Fullerton and Merz (2008), theme-based strategies are described as incorporating a sports theme with traditional marketing strategy into the marketing procedure for non-sport products. The use of copy platform related to sports or the advertisement of products in sports-connected media can both be chosen by the marketers. Either of these options should effectively come near the customers. A most important point of theme-based strategies is that, “the marketer’s efforts are not predicated upon an official elationship with any specific sports property in its effort to create the sports overlay for its marketing efforts”, they stated. ( The four domains of sports marketing: A conceptual framework, 2008) 4. 4 Alignment – Based Strategies Use the Olympic Games as an example. McDonald’s packaging and advertising officially feature its relationship with the Games, in order to increase its sales in fast food. Volvo uses its sponsorship of a high profile sailing event to strengthen the public’s perception of the carmaker as one that exudes prestige while concurrently emphasizing safety and technology.
While the strategic initiatives that augment the sponsorship are important, the foundation for the resultant strategy is the fact that the marketer, by virtue of its official sponsorship, is highly integrated within the sports environment. Thus, the task for these marketers of nonsports products is one of implementing strategic initiatives that allow them to capitalize upon their position within this realm of the sports marketing environment. Such initiatives are alternatively characterized as leveraging or activation.
Examples abound, traditional sponsorship patterns are adopted frequently, to name a few, the Olympics’ and the World Cup of Soccer’s relationships with Coca-Cola are the most eye-catching cases. What’s more, other sponsors in Olympic, including Lenovo Computers, McDonalds, as well as John Hancock Life Insurance are also noteworthy. 4. 5 Applications in Recent Decades Firmly believing that they have scratched the sweet spot with UEFA sponsorship, Heineken not only stretches its business into football fields. Other than this, another big sports event – U.
S. Open Tennis Championships is with no exception, being sponsored continuously by Heineken. (Heineken plans largest marketing campaign in booming imported beer category. 1999) Furthermore, Heineken involves in other key marketing initiatives, including an expanded Hispanic market promotional program, new packaging, major musical events, figured out by Editors, B. (1999).
5. 1 China’s Prospective Can Heineken duplicate its success into Chinese market? As known, Chinese football seems to be a weakness when talking about this new world power.
Corruption and unhealthy system make Chinese football ugly and lose the support in whole country. Chinese football, over the years, has rarely received much coverage on a global scale. However, that is changing quickly. It’s gaining more and more attention of late, as teams such as Shanghai Shenhua and Guangzhou Evergrande have stretched their financial muscle to the very limit – with some very big names from Europe and beyond deciding to join the CSL (Chinese Super League).
In Season 2012 CSL, many clubs fighting for their AFC qualification and defending title.
This is the most competitive season in the CSL history. Among these teams, Guangzhou Evergrande heavily invested in their “Arms race”, and this lead Super League into an unprecedented 100 million age. And a lot of clubs would like to imitate this success mode and invest hundred million for recruitment and buying those super stars. With more money, this upgraded Super League will develop more opportunity of its potential market. The operation of Guangzhou Evergrande with a big integrated marketing model is actually a useful exploration for CSL becoming the world-class professional league.
Observing the operation of the Super League last season, the multiple operating points is a huge breakthrough of China’s sports industry. This is especially noteworthy for those companies would like to exploit the Chinese market. China is bidding to be the new face of Asian football. The money is there, the quality of players are increasing and you know it’s got promise when a World Cup winning coach, in Marcelo Lippi, moves into Guangzhou Evergrande. However, what is the most appealing point for those marketing departments of famous brands?
It is the strong return of CCTV which greatly stimulated the investor to burn their money. Especially the real estate business acts as the main force for this round of CSL investors. All this signals make the Super League in China quite a potential target for Heineken. A market with 1. 3 billion people and urbanization has become a catalyst of the beer culture among young generation. It’s still expanding at a rapid rate. And it’s not going to stop, for anyone. 5. 2 Recommendation Can Heineken duplicate its success into Chinese market and have a second rise?
Before answering this question, we need to analyze the problem Heineken mentioned in the second part. First, the original package is still not appealing to Chinese consumers; besides, the shipping cost is too high for Heineken to maintain high profit. However, the reason of high cost is actually lack of the economics of scale which can be solved by gain the approval of the brand value. Second, the high price limits Heineken to target the rich people. Facing the huge competition in premium beer market, it is still a problem for Heineken to stand out.
However, our group considers that, with a bloomy football league in the new market, using the theme based and alignment based strategies, Heineken is going to offset the previous inefficient promotion problems in China. What Heineken should do is make a full use of the China’s Super league and draft the correct strategies. Here are our recommended strategies. First, we would like to focus talking about the right time of Theme – Based strategies. When we mentioned about the failure, the incomprehension of the brand value is the main problem Heineken face in China.
And it is the very problem let us remind of the successful case of UEFA champions League. The sport theme with beer product is the direct way for this historic brand to build up its culture of quality life and theme of enjoying the game to the market. Facing a bloomy market of China’s football league, both the advertisement of products and the sports connected media can be the best solution for the market promotion. The better brand penetration of Heineken into this football event, the higher will be the acceptability. What should Heineken do if it requires this effect?
On the one hand, the market department should design a typical circumjacent product, such as fashion Green Logo T shirt, which can link the football game with beer consumption. On the other hand, bring the best live coverage techniques from European into those sports channel. And above all, the adequate advertisement is of necessity in this part. With an acceptation of brand value, consumer would accept the high price of this brand more easily. After these theme – work, when talking about Heineken, what those football fans will recall are a green powerful logo, a fashion brand and a vigorous lifestyle, but not only a beer brand.
Second, the Alignment – based strategy is also an instantly effective solution for Heineken to get into China’s Super League. When seeing the UEFA champions League, we can recall the green logo of Heineken. Same effect will be seen in CSL. When fans talks about the Guangzhou Evergrande, the first association of the football club is not the super star but its powerful sponsor Evergrande, a famous real estate company. The CSL will rise abruptly and the exposure rate of this league will come back to this super nation in the near future.
If Heineken and CSL can make an agreement in the next five years, it will become the milestone of Heineken brand. Just imagine the market of the most popular sport in the country with the largest population, it worth trying. Third, the cellphone application mode can be successful in China as well. According to Shan Phillips (2010), the number of Chinese mobile phone users has reached 755 million, which is more than the American. The increasing mobile users means the beer & football culture can be established via a brand new media.
Unlike those European, Chinese elites are busy with their jobs, they would not spend much of time at football live coverage. Accordingly, the application of cellphone can act an important role among those football fans without a completed time for games. With an application developed by Heineken Group, fans will spend their time to interact with Heineken event holders and also other fans on this app. This will be the great culture building in China’s market. With these strategies, can this beer brand have a second rise in China market with its successful experience of UEFA Champions League?
With the tool of an emergent CSL, can Heineken handle the unique features in Chinese market as mention in the second part? With the preparation above, definitely, our answer is YES! Conclusion From the case analysis and strategy model in our report, we can draw a conclusion that it is good for Heineken to apply its successful European marketing strategy to China. In this way, Heineken should make efforts in branding and mainly focus on the 4 aspects (indigenization, price, taste and advertisement), also were the things that made them performed not so well in Chinese beer market.
