STRATEGIC MANAGEMENT – HEINEKEN CASE STUDY

I. Issue 1

Marketing management has always played an important role of the successful business
establishments. Whether the value of a firm is durable or not, marketing management, can
say, a key to the success of an enterprise. Everyone must have tried at least one of “the most
widely consumed alcoholic beverage in the world” (“All about the beer industry,”n.d.), that is
beer. Nowadays, the beer industry has a large contribution to global revenue and plays an
important role in the development of the world business. Since we are talking about marketing
management, let’s take the example of Heineken to figure out how this company has built its
empire in beer industry for such a long time.

Heineken was established in1864 by the Heineken Family (“Company & Strategy,”n.d.).
During the time, Heineken has developed its operations at more than 178 countries globally
with over 250 international, regional, local and specialty beers and ciders which make them
one of the well-known international brands of brewer. The vision and mission of Heineken is to
win all markets with their diverse portfolio and thanks to this they can make their customers
surprise and excite anywhere and anytime. At Heineken, there are 4 top priorities that they
always focus on. They are: deliver top line growth, drive end2end performance, brew a better
world and engage and develop their people. (“Company & Strategy,”n.d). Heineken’s
orientation is clear and it is reflected in their mission, vision and priorities. They produce
premium beer and ciders. Especially, basing the social feature of each country that Heineken
present, it will have a local product. For example, one of the Heineken’s products is Tecate,
it’s a brand for the men originally born in Mexico and was acquired by Heineken in 2010 and
now it is available in 16 markets across the globe. (“Tecate History,” n.d). The brand of
Heineken has been a useful factor in the marketing strategy which used to leverage its
products widely.

Issue 2:

The 5C’s analysis is important to help Heineken optimize the use of the marketing
resources in order to build as well as maintain a sustainable competitive advantage.

 Firstly, company factor.

The Heineken has equipped it with many characteristics belonging to the company. About
strengths, Heineken has a very strong and truly global brand. This allows Heineken to go for
brand extension as well as creating and launching new types of beers and ciders. Besides,
long history as an independent global brewer has helped Heineken to gain not only the fame
but also trust among customers. Additionally, operating in more than 178 countries around the
world with nearly 18 brands allows Heineken to be easily recognized and be the popular
brand as well as being chosen by thousands of customers from all over the world. Besides,
Heineken has distributors and warehouses all over the world, this helps minimize shipping
costs to stores.

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STRATEGIC MANAGEMENT – HEINEKEN CASE STUDY

Heineken is facing with certain opportunities as well as threats. Its opportunities are about
the new trends of producing low calorie beer as nowadays people are looking for a so-called
“healthy” beer that matches with the healthy life trend.

 Secondly, customer factor.

At the moment, Heineken is not drunk by young people. Consumption age of Heineken
falls into the age of 30. Besides, the restrictions on drinking ages as well as the campaigns of
anti-alcohol and the development of drunk-driving laws will limit the number of people drinking
beers. Therefore, it will have effect on the sale revenue of Heineken.

 Thirdly, collaborator factor.

As we all know, beer is made from water, barley, hops and yeast. These ingredients are
from nature and supplied by farmers. Therefore, the bargaining power of the suppliers is
considered low in this situation. (“Business Essays – Heineken Beer Market,” 2018).

About the bottle supplier, Heineken has kept 100% stake of Heye Glas Nederland since
2002. This allows Heineken from being affected by the power of bottle supplier as well as
minimizes its costs. (“Business Essays – Heineken Beer Market,” 2018).

Heineken uses licensed as its way to expand its business globally. (“Heineken Company
Case Study”, 2018). Therefore, they can save cost to build new brewery in the area that they
would enter.

 Fourthly, competitor factor

The main competitors of Heineken at this moment are Carlsberg and AB InBev whose brands
are Corona and Budweiser.

 Fifthly, context factor

Heineken has to face with heavy Regulations on importing alcohol beverage in each
country as well as the taxation on foreign trade. Besides, foreign exchange exposure, inflation
and the increase market share of competitors in US are also context factors that could impact
on Heineken’s strategies.

II. Issue 3

Currently, Heineken uses different tools in their marketing strategy. One of the useful ones
is social media such as Facebook, Twitter and Instagram. Through social media, Heineken
can attract and interact with their customers. This is also a sucessful strategy of Heineken, it
helps to strengthen its relationship with fan and giving them “amazing experience they are
more than keen to share on social media”. (“How Heineken Uses Social Media – Case Study”,
n.d).

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STRATEGIC MANAGEMENT – HEINEKEN CASE STUDY

At the moment, AB InBev is the biggest competitor of Heineken. Then let’s take a look at
its merge and acquisition strategy. AB InBev recently acquired with SABMiller then helps AB
InBev to have a massive network with over 600 independent distributors, wholesale and
diverse their product prodcportfolio of 500 beer brands.

III. Issue 4

As a global company, Heineken has to base on similar charecteristics to provide suitable

products. The segmentation of Heineken focuses mainly on all adult customers with the main
domain is successful middle class man. However, with the development in the women and
men’s rights, Heineken should have campaign to boost the segment of businesswomen.
Heineken totally can make a new format, lighter taste for businesswomen. Besides,
women have high awareness in using alcohol beverage therefore they could limit the quantity
of beer using.

IV. Issue 5

Detailed marketing mix of Heineken to support the marketing strategy.

- Product: Heineken has wide range of products. Therefore, Heineken product strategy is
about understanding every product as well as studying on diversified packaging and
sizes.
- Price: As Heineken is a high – quality beer so it conducted a premium pricing policy for
its products. Because the main domain of Heineken’s customers is successful, middle
age men then it seems reasonable and affordable.
- Place: Heineken has several companies across the world. Besides, its licensed
strategy helps them to have strong distribution network including both retailers and
wholesale dealers to customers.
- Promotion: sponsoring. This is a great way to advertise Heineken to customers.
Heineken has been sponsored for events like The UEFA Champions League, Lagos
Fashion Week and many more.

V. References:

All about the beer industry. (n.d). Retrieved from:

https://www.worldatlas.com/articles/all-about-the-beer-industry.html

Company & Strategy. (n.d). Retrieved from:

https://www.theheinekencompany.com/About-Us/Company-Strategy

Tecate History. (n.d). Retrieved from:

https://www.theheinekencompany.com/Brands/Tecate

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STRATEGIC MANAGEMENT – HEINEKEN CASE STUDY

Essays, UK. (November 2018). Business Essays – Heineken Beer Market. Retrieved from
https://www.ukessays.com/essays/business/heineken-beer-market.php?vref=1

Brand 24Blog. How Heineken Uses Social Media – Case Study. (n.d). Retrieved from

https://brand24.com/blog/how-heineken-uses-social-media-case-study/

Essays, UK. (November 2018). Heineken Company Case Study. Retrieved from
https://www.ukessays.com/essays/commerce/case-analysis-for-the-heineken-business-
commerce-essay.php?vref=1