Strategic assessment: the importance of branding in
the European beer market
Seeks to emphasise the
importance of branding in the
European beer market. Atten-
tion is consigned to assessing
the implications of effective
branding within the context of
the overall marketing strate-
gies of brewers. To facilitate a
comprehension of this, stud-
ies of three key players in the
European beer market – Bass
plc, Carlsberg A/S, Heineken
NV – are utilised to exemplify
the issues outlined. Practical
applications of the product
life cycle (PLC), and Boston
Consulting Group Matrix
(BCG) are then employed to
illustrate the role of branding
in product management
within the competitive beer
market. Reference to the
European beer market is
given at the beginning, as it
facilitates a better under-
standing of the industry as a
whole.
British Food Journal
100/2 [1998] 76–84
© MCB University Press
[ISSN 0007-070X]
[ 76 ]
Demetris Vrontis
Doctoral Programme Researcher and Lecturer, The Graduate Business School,
Manchester Metropolitan University, Manchester, UK
The European beer market:
environmental audit
Beer is the predominant alcoholic drink in
most of the European countries and has a
large share of alcoholic drinks in all markets,
reflecting the growing influence of British
and American drinks companies. However,
Market Research Europe (1996), highlights
that competition from non-alcoholic drinks,
together with consumer concern over health
issues, and drink-driving, have hampered
beer demand in general. Moreover, consumer
interest is now stimulated by new product
developments, such as ice beers, as well as on
premium and luxury products. Furthermore,
Market Research Europe (1996) underlines
that the market is becoming increasingly
concentrated with bigger operators consoli-
dating their shares through acquisitions and
licensing agreements.
Daft (1992), has proposed a number of differ-
ent characteristics of the environmental
domain that can help identify how stable/
unstable, complex/simple the organisational
environment is. This model gives as a better
overview of how the European beer market
really is.
The European beer market is complex with
many diverse external elements influencing
it. These could be factors such as competitors,
suppliers, government regulations, associa-
tions and legislation. Moreover, it is unstable
since environment changes over time, with
competitors reacting aggressively. (Refer to
arrow← in Figure 1 to see European beer
market’s environmental domain.)
Identify the European beer market’s
competitive forces through a structural
analysis
Analysing an industry’s attractiveness is
crucial and vital, as according to Porter (1985)
it is the first fundamental determinant of a
firm’s profitability. Competitive strategy
must grow out of a sophisticated understand-
ing of the rules of competition that determine
an industry’s attractiveness. The use of the
five forces (Figure 2) is to give a better under-
standing of the competitive forces within the
European beer market.
The European beer market is approaching
saturation. As brewers fight for market
share, how can they confront this
challenge?
The world beer market was characterised in
1995 by continuing internationalisation and
increasing competition, with the saturation
of domestic markets posing an ever-augment-
ing threat to key industry participants. The
past two decades have seen an increased com-
mitment on behalf of beer producers to
exporting, reflecting the belief that this is an
appropriate means of mitigating the stagna-
tion of output on the home front.
Today a few large breweries, the majority of
which are European, principally control the
global beer market. However, from country to
country there remain significant differences
with regards to the number and size of brew-
eries; the effect of this on the structure of the
overall industry being considerable.
Figure 3 illustrates the consumption of beer
in Europe per capita, per annum. This allows
an insight into the size and displacement of
the European beer market.
Industry structure
“The world beer market is hardly growing, so
opportunities for growth have to be found in
non-traditional beer markets, wine drinking
countries and countries where beer is less
established” (Carr, 1996/7).
Looking at the importance of market devel-
opment within the brewing industry, Euro-
pean markets will be very briefly examined,
so as to identify existing available market
opportunities.
The level of industry concentration varies
significantly from country to country. Table I
illustrates the competitive structure in each
of the main European countries.
Market trends
From the mid-1980s to the mid-1990s there
have been some trends developing in the
different markets around Europe.
Northern countries such as UK, Germany,
Belgium and Ireland have experienced
stagnating or falling beer sales due to
Demetris Vrontis
Strategic assessment: the
importance of branding in the
European beer market
British Food Journal
100/2 [1998] 76–84
Figure 1
Contingence framework for organisational environment and organisational responses
Low Uncertainty
Mechanistic structure
Formal, centralised
Stable Few departments
No integrating roles
Little imitation
Current operations
Orientation
Environmental
Change High-Moderate Uncertainty
Low-Moderate Uncertainty
Mechanistic structure
Formal, centralised
Many departments, some
boundary spanning
Few integrating roles
Some imitation
Some planning
High Uncertainty

Organic structure Organic structure

Participative, decentralised
Few departments, boundary
Unstable spanning
Few integrating roles
Quick to imitate
Planning orientation
Participative
Decentralised
Many departments
Differentiated, extensive
boundary spanning
Many integrating roles
Extensive imitation
Extensive Planning

Simple Complex
Environmental Complexity

Source: Daft (1992)

Figure 2
The five power forces (the brewing industry)

Potential Entrants
International Competition
High Entry Barriers
- Operation scale and scope
- Marketing Expenditure
- Tied houses
Increased legislation

Supplier Power Buyer Power

Importance of Volume 1) Public Houses
Competitors Low buyer
Increasing industry concentration concentration
Static growth Low buyer volume
Branded products Low price sensitivity
Increased diversification 2) Customers
High exit barriers Increasing brand
Increased cost efficiency identity
Low switching costs
Changing drinking
habits
Price sensitivity

Substitutes
Changing social habits
Greater off license trade
Wine, Soft drinks
Increasing lager consumption vs
ale
Changing drinking environment

switching by the consumer to drinking low
alcohol beers, wine and in particular soft
drinks, while on the other hand, southern
countries (traditionally wine drinking) are
experiencing a trend towards beer. The
trend to beer in southern Europe can be
seen in Table II. This shows beer consump-
tion per capita for individual European
[ 77 ]
Demetris Vrontis Figure 3
Strategic assessment: the Consumption of beer in Europe (litres per capita p.a.) in 1993
importance of branding in the
European beer market
Litres
British Food Journal
100/2 [1998] 76–84 160
140
120
100
80
60
40
20
0
Republic of

The Netherlands
Germany

Denmark

Ireland

Austria

Belgium

Luxembourg

U.K.

Finland

Spain

Portugal

Sweden

Norway

France
Source: Het Brouwersblad (1995); Produktschap voor bier (1994)

countries, which will conclude our short

Table I reference at identifying market opportuni-
Industry concentration in European beer markets ties for entering the European market.
Number of major Market share of The analysis of the brewing industry, seen
Country Industry situation competitors major competitors (%) in the environmental audit, enables several
characteristics to be emphasised and high-
Denmark Monopoly 1 80
Holland Monopoly 1 70 lighted. According to De Jong (1988) this
Italy Monopoly 2 70 could be concentration, economies of scale,
Belgium Monopoly 2 85 unique distribution channels, product differ-
France Monopoly 2 75 entiation, and product segmentation. While
UK Concentrated 6 80 each of these characteristics is of great
Spain Concentrated 6 88 importance for global players within the
West Germany Fragmented 5 12 brewing industry, the latter two lie more
Greece Concentrated 5 70 within the boundaries of the breweries’ influ-
Portugal Concentrated 7 80 ential relationships.
Consequently, how can breweries fortify
their position and compete for incremental
market share in a fiercely competitive and
Table II aggressive environment?
Consumption per capita (litres) for major European countries Brewers essentially consider beer to
be a homogeneous product, and thus rely
Country 1980 1985 1988 1993 largely on differentiation to create consumer
Germany 142.5 144 143 138 preferences.
Denmark 122 121 120 128 In an industry whereby product differentia-
Belgium 131 121 119 118 tion, especially that relating to image and
Austria 102 119 118 119 segmentation, is of paramount importance,
UK 117 108 110 99 the creation and maintenance of a strong
Ireland 122 105 94 125 portfolio of brands is critical in terms of suc-
Holland 86 85 84 cessfully sustaining competitive advantage.
Spain 53 61 67 70 This could be enhanced by a clear positioning
Portugal 38 38 47 68 strategy, something that will distinguish
Greece 26 34 36
companies ahead of its competitors.
France 44 40 39 41
To gain a clear comprehension of the strat-
Italy 17 22 26
egy of brewers in a European context, it is
Source: Het Brouwersblad (1995); and Produktschap voor bier, (1994)
beneficial to conduct an analysis in terms of
[ 78 ]
Demetris Vrontis
Strategic assessment: the
importance of branding in the
European beer market
British Food Journal
100/2 [1998] 76–84
the four basic elements of the marketing mix
– namely product, price, place and promotion.
An initial understanding of the companies
will be gained through the following sum-
maries aim at highlighting any principle
factor of importance.
Major competitors within the
European beer market: an overview
of their strategic and tactical
activities
Generally speaking the brewing industry is a
very complex one, with many brewers having
involvement and being integrated, both hori-
zontally and vertically, in other business
activities. However, for the purpose of rele-
vance, this article will exclude any informa-
tion concerning breweries unless directly
related to the European beer market.
In order to exemplify certain marketing
oriented issues relevant to the brewing indus-
try, the associated activities of three key com-
panies enjoying significant standing in the
world beer market will be examined. The
three brewing companies examined are the
British Bass Plc, the Danish Carlsberg, and
the Dutch brewer Heineken.
Bass plc
A huge brewer on a European basis, the
British company, Bass Brewers, according to
Bass interim results, (1997) had in 1996 a
turnover of £1,777 million.
Strategic assessment for Bass, March 1993,
underlines that Bass beers world-wide is the
UK’s greatest exporter of beer. Over 80 over-
seas markets are now served by Bass includ-
ing the USA, where Bass ale is the fastest
growing of the top ten imported beers.
Key Note (1997), outlines that brewing cur-
rently accounts for 32 per cent of Bass
turnover, with the company being integrated
worldwide in other activities such as hotels,
leisure retailing and branded drinks.
Product
Recent information in Key Note (1997) high-
lights that the company’s 23 per cent share in
the UK market makes it well ahead of other
competitors.
Bass plc has a line of successful brands.
Carling Black Label lager is the UK’s single
biggest beer brand, in both on- and off-trade
draught. Carling Black Label is Britain’s
“number one” beer brand with 50 per cent
more sales than its nearest rival.
Bass, like the other brewers, attempts to
compete in the European beer market at
every level.
Among its premium beers is Carling
Premier. This premium extension of Carling
was launched in the early 1990s. Carling
Premier is of special interest on two counts
other than being a stablemate of the standard
larger market leader. First, its name is syn-
onymous with sponsorship of the FA Premier
League in England. Second, in its canned
form, Carling Premier is one of the first
widget, or canned draught, lagers.
Another super premium lager owned by
Bass is Tennent’s, which in some places is
also sold as ale. Other premium products
include Staropramen (new in the UK) and
Grolsch.
In ale and bitter, Bass produces a strong
draught (4 per cent ABV) under the Bass
name, which was also made into one of the
earliest widget beers. According to Key Notes
(1997) Bass’ Caffrey’s Irish Ale has broken
through as the most outstanding brand, not
just in the Bass ales range, but in the beer
market as a whole.
Price
As with other European brewers, Bass
manipulates pricing as a tool to differentiate
between its premium and its standard
brands. As competition in the European
brewing industry is so fierce, Bass attempts
to keep its prices close to those of its nearest
competitors.
Place
Bass has a huge UK advantage in this regard,
owing to the fact that it controls 4,171 pubs
(Bass Taverns) as part of its activities in the
leisure industry. Bass has also established
joint venture with Exel Logistics, specialists
in distribution. Recognising the off-trade as a
growing distribution channel, Bass has
always placed importance on off-trade out-
lets, which represent some 20 per cent of their
sales.
Promotion
The company’s leading brands are generally
supported by humorous television commer-
cials in the UK, such as the Carling Black
Label and Tennent’s Pilsner adverts. How-
ever, it is Bass’ high level of sports sponsor-
ship which distinguishes it from many of its
European competitors; for example, The
Carling Premier League and Stones Bitter
Rugby League Championship. Bass has also,
very recently, sponsored the 1996/1997 foot-
ball season on 13 local radio stations with the
Carling Black Label brand. Considering the
emphasis placed on promotion of a limited
number of brands within the portfolio, it
becomes obvious that Bass does not prioritise
promotional campaigns relating to its origi-
nal “corporate brand”, Bass Ale. Further-
more, despite high profile promotion in the
[ 79 ]
Demetris Vrontis
Strategic assessment: the
importance of branding in the
European beer market
British Food Journal
100/2 [1998] 76–84
[ 80 ]
UK, Bass does not concentrate many of its
promotional efforts on a European scale.
Carlsberg
Carlsberg, the Danish brewer, is the fourth
largest producer of beer in Europe. According
to Carlsberg Report and Accounts, 1994/95,
Carlsberg’s group turnover for 1994/1995 was
£1,771 million. With a domestic market share
of 76 per cent, Carlsberg’s main strength lies
in its home market.
Carlsberg’s product portfolio is immense,
and the company enjoys a very high level of
brand recognition. Carlsberg’s brands
include the following:
• Carlsberg Lager;
• Carlsberg Export;
• Elephant Beer;
• Carlsberg Special Brew;
• Carlsberg Ice Beer.
Carlsberg’s strategy has, for many years,
been very globally orientated. Particular
importance is attached to the development
and promotion of strong brands.
Product
Among Carlsberg’s premium beers are
Carlsberg Export (a strong lager) and
Elephant Beer. Its principle brand is
Carlsberg Lager, which is the UK’s most dis-
tributed lager.
Price
Carlsberg aims to keep prices at a minimum,
while obviously monitoring all costs, and
raises consumer prices only when forced to
do so. Liberty to apply the necessary margin
of profit is granted to individual retailers, no
matter which country they may be located in.
Place
Carlsberg continues to produce a huge pro-
portion of its beer in Denmark, 29 per cent of
which is exported. The company nevertheless
aims to produce locally in its respective
markets. Popular methods of ensuring this
are mergers and acquisitions, such as the
formation of Carlsberg Tetley in the UK.
According to Confederation des Brasseurs
du Marche Commun (1994), owing to the
increasing share in the off-trade beer market
commanded by supermarkets, a trend seen
throughout Europe, Carlsberg is dedicated to
the continual adaptation of production and
distribution systems.
Carlsberg aims to distribute its products
through as many outlets as possible. Proof of
its success in this areas is illustrated by the
fact that Carlsberg Lager is available in more
than one in five on-trade establishments, and
in 83 per cent of off-trade outlets. Carlsberg’s
television adverts, based on the idea that
Carlsberg is available anywhere in the world,
and its billboard advertising, always featur-
ing a Carlsberg lorry, further emphasise the
importance attached to distribution.
Promotion
Carlsberg’s promotional strategy aims to
establish one brand image throughout the
world. This approach towards globalisation is
seen in the following quote found in
“Carlsberg, the story”, a document released
by the company’s public relations depart-
ment: “It is crucial to us that the Carlsberg
identity and character is projected uniformly
and powerfully in its respective markets”.
Consistent with this idea is the unfailing
appearance of a Carlsberg lorry in magazine
advertisements.
The logo “Probably the best lager in the
world” is featured throughout its
promotional activities including television,
radio, posters, editorial and promotions. It is
an ongoing advertisement that attempts to
establish this image in a worldwide basis. It is
an advertisement that started years ago and
continues until today. This could be seen in
Carlsberg’s most recent “aliens” cinema
advertisement promoted in 1997.
Sponsorship forms an integral part of their
promotional strategy. Examples include:
Liverpool Football Club, Euro ’96, athletics,
rugby club events and music festivals.
Carlsberg’s promotional activities, seems to
target younger people and particularly those
interested in sports.
Heineken
According to Heineken Annual Report (1995),
Heineken, the Dutch brewer, had a turnover
in 1995 of £3.7 billion. Heineken expanded
overseas more than 20 years ago, and now
only 21 per cent of its sales are within The
Netherlands. Encyclopaedia of Consumer
Brands (1994), states that in the early 1990s,
Heineken achieved a 9 per cent market share
in Western Europe, increasing its status to
the largest of any European beer company.
The Heineken brand is sold in 170 different
countries and brewed in 19 of them. Despite
the company possessing a total in excess of 70
different brands, the principal strategy of the
company is to market four corporate brands
on a worldwide scale. These brands are:
• Heineken;
• Amstel;
• Buckler (alcohol-free);
• Murphy’s Irish Stout.
These global brands are supported by the
remaining brands in the product line,
which tend to be national and regional in
identity.
Demetris Vrontis
Strategic assessment: the
importance of branding in the
European beer market
British Food Journal
100/2 [1998] 76–84
Product
In the UK, Heineken’s premium beer is
Heineken Export. However, in the remainder
of Europe, the simplified brand Heineken
occupies this position. This is, in fact, the
standard beer available to consumers in the
UK, whereas the Amstel brand is marketed
for this purpose elsewhere in Europe. The
above outlines differences in product image
and perception within Europe.
Price
Throughout continental Europe, the
Heineken brand is sold at a relatively high
price. This facilitates the maintenance of its
image as a premium beer. A similar strategy
is adopted in Britain, but instead for the
Heineken Export brand. The standard
Heineken beer in the UK is of a lower alcohol
content, and therefore has a lower price to
enable competition with the other main-
stream lagers available in this market.
Place
As a method of distribution to foreign
markets, Heineken favours exporting and the
acquisition of foreign breweries. The com-
pany controls 90 breweries outside The
Netherlands, which collectively cover 55 dif-
ferent countries. Included in this number are
breweries owned by the group; affiliated
breweries; and breweries producing
Heineken beer under licence.
Following acquisition of a local brewery,
Heineken exploits any available advantages –
including the original brewery’s existing
distribution network. This strategy is largely
responsible for Heineken’s impressively high
level of market penetration throughout
Europe. Licensing, however, is only adopted
in nine countries, owing to the diminished
control and difficulty in enforcing high qual-
ity associated with this. The most important
of these nine is the UK.
Promotion
Heineken strives to develop a promotional
strategy common to its international busi-
ness activities. This includes considerable
sponsorship and television advertising. Cur-
rently, Heineken is setting its sights on top-
class tennis events such as the Davis Cup.
Heineken is also focusing on the younger
consumer, through sponsorship of television
programmes, such as Hotel Babylon and Club
MTV.
Branding
The preceding information with regard to
Bass, Carlsberg and Heineken indicates that,
to a considerable degree, the three companies
employ very similar marketing strategies. So
why do these three companies, and indeed
their respective brands, not enjoy equal suc-
cess? This question cannot be answered on
the sole basis of taste, given that beer is con-
sidered to be a homogeneous product in the
eyes of the consumer. While a number of both
external and internal factors obviously influ-
ence the performance of these – and other –
breweries, it is the contention of the author
that one factor in particular can greatly affect
the standing of a brewery when competing in
the European stadium. Branding.
What is branding?
What exactly is branding? In the words of a
very well respected author in this field:
“Brand names convey the image of a product
or service. The good brand refers to a name,
term, symbol, sign, or design used by a firm
to differentiate its offering from those of its
competitors” (Czinkota et al., 1995).
According to Levitt (1986), the successful
seller must surround his generic product
with a cluster of value satisfactions. He must
provide a total proposition, the content of
which exceeds what comes out of the produc-
tion line. It is particularly important as “peo-
ple choose brands in the same way as they
choose friends”.
Kotler et al. (1996) add to this, explaining
how companies must see a brand as more
than just a name. He describes the challenge
of branding as developing a deep set of mean-
ing for the brand; those which relate to what
the consumer associates the product with.
These associations are known as brand asso-
ciations. This principle is illustrated exten-
sively in the European beer market.
Therefore, it is now clear that a brand is
more than a product. It adds meaning, value
and personality. Branding is:
Product + brand name, packaging, symbols,
themes = image.
By assessing the three different brewers, as
above, it becomes clear that their respective
product ranges are very similar. Each brew-
ery produces and markets a standard lager, a
standard ale, a premium lager, and so on.
However, despite similar prices and being
positioned at the same level, the specific
brands of these competing products often
possess a different set of meanings, or brand
associations.
Of all the popular beer brands in the UK,
Carling Black Label has the most clearly
defined assemblage of brand associations.
Essentially, the brand is targeted at young,
male football spectators. Drinking Carling
Black Label seems to imply a strong link
with having a passion for football. In this
way, Carling Black Label is associated with
[ 81 ]
Demetris Vrontis
Strategic assessment: the
importance of branding in the
European beer market
British Food Journal
100/2 [1998] 76–84
[ 82 ]
liveliness, youthfulness, vitality, sport and,
arguably, patriotism. By looking at Bass’
promotional priorities, outlined earlier, it
becomes clear how a company links its
brands with certain qualities through
advertising.
Carlsberg tries to portray a more serious,
quality image. There is more emphasis on the
taste and the quality of the beer itself, rather
than the identification of consumer stereo-
types. The form of consumer associated with
Carlsberg lager is not as blatantly specific as
relating to Carling Black Label. This perhaps
helps to explain why Carling is the best-sell-
ing lager beer in the UK.
Brands must be developed and maintained
constantly in order to secure a set of loyal
consumers. Kotler et al. (1996) state that the
loyalty of consumers lies with brands, rather
than producers. This assertion can be best
illustrated by considering Bass and its brand
portfolio. Consumers readily choose to drink
brands from this portfolio, such as Carling
Black Label, without being aware that Bass
owns them.
This point is disputed in the case of con-
sumers who do not distinguish between dif-
ferent brands but are greatly influenced by
corporate brands. These consumers simply
purchase on the merit of the reputation of the
producer. This exemplifies what Branson
(1996) has termed “attribute brands”; brands
which are built around reputation and not
actual products. Such brands imply quality,
price and innovation rather than specific
items. However, the issue of where consumer
loyalty lies is difficult to illustrate with refer-
ence to the beer market, owing to the limited
distinction in the mind of the consumer
between corporate brands and product
brands.
The potential credibility of a brand is so
high that companies can launch brand exten-
sions onto existing markets; a strategic
option that is readily accepted. Bass exempli-
fied this with the launch of Carling Premier,
soon after the Premier League was created,
based on the success of its strong brand,
Carling Black Label. Heineken Cold-filtered
and Carlsberg Ice are other examples of
brand extensions that penetrated the compet-
itive beer market without any difficulty.
De Wit and Meyer (1995) state that a strong
brand can be effectively and successfully
used to sell other products. The positive
attributes of the corporate brand are auto-
matically transferred to the new product.
With reference to the point made earlier
concerning the aim of Heineken and
Carlsberg to maintain a range of global
brands, the issue of segmentation here seems
appropriate. Effective branding reduces the
need to distinguish in terms of product form,
as a successful brand having positive associa-
tions appeals to all consumer segments
within the market.
Nevertheless, if a company decides to pur-
sue a segmentation policy, branding may be
used as a potent tool. In order to appeal to
different segments, a company can alter the
perceived image of the product, as opposed to
adapting the actual product specifications.
These contrasting applications of branding
highlight its versatility as a marketing tool.
The role of branding in the marketing mix of
any company involved in brewing cannot be
underestimated.
Once a brand is established, consumers
expect to find it in the shops. The implication
of this for brewers is greater leverage in bar-
gaining with retailers. The effect of branding
can be so strong that a consumer will specifi-
cally seek out the shops or bars that supply
the desired product. An example of this is
Carlsberg Christmas Beer, which is available
in Denmark throughout the festive period.
The associations coupled with this brand are
so powerful that Danish consumers will often
go to quite extraordinary lengths to purchase
the beer.
The effectiveness and importance of brand-
ing can be appreciated if one considers how
few beers exist without a brand name. In the
beer market in particular, there is practically
no market for non-brand beers; even super-
markets have initiated objectives to brand
their own beers and have thus increased their
profile and popularity. Sainsbury’s Green
Label and Blue Label lager beers were
launched in 1995 to combat flagging sales of
their existing non-brand lager.
Branding is an excellent defence against
price competition. A strong brand can with-
stand severe price competition. If branding
has been extensive enough to create a set of
loyal consumers, these consumers will not be
persuaded to buy a replacement product,
however cheap it is. This explains why there
is no market for unbranded beers. Branding
has been so extensive in this market that it is
very difficult to coax consumers away from
their brand preferences.
So it could be argued that successful brand-
ing can have considerable influence over
price-elasticity of demand. If a consumer
believes his brand preference to be superior
in comparison to other brands on the market
he will be willing to sacrifice the opportunity
cost associated with buying a cheaper beer.
This is an indication of the price-inelasticity
of demand for branded beer.
Despite possessing greater economies of
scale, Heineken prices its beers at a level
above that of supermarket beers. This is
Demetris Vrontis
Strategic assessment: the
importance of branding in the
European beer market
British Food Journal
100/2 [1998] 76–84
evidence of the incremental value perceived
to be held by branded goods as opposed to
non-branded goods, and the strategy
employed by brewers to maintain the quality
image of the product through deliberately
keeping prices at a higher level.
As stated previously, consumers consider
their own particular brand preference to be
exceptional in comparison to other brands on
the market. The preferred brand is seen as a
guarantee of the desired performance. In
other words, the consumer can be assured of
consistency every time. In this way, the
brewer can benefit from repeat purchases and
word of mouth that will increase their sales
in the longer term even more.
Effective branding can be implemented
simply by selecting a brand name that con-
veys a certain characteristic and meaning.
This technique is used in the European beer
market and it is appropriate to use an exam-
ple from the UK. Although Carling Premier is
only marginally different from standard lager
brands, and is not particularly strong com-
pared to certain other beers on the market, it
is seen as a premium, high quality, high taste,
strong beer. To a great extent these brand
associations have developed simply because
the name of the product suggests them.
To illustrate further the importance of
branding, it is advantageous to apply some
marketing tools. It should be noted that this
usage of the product life cycle, the Boston
Consulting Group matrix and the simplified
mix-mapping process is not intended to pro-
vide a comprehensive marketing plan or
marketing analysis. It is simply an illustra-
tion of how branding appears in the context
of the overall marketing process.
It can be seen from the product life cycle
(see Figure 4) (Meldrum and McDonald, 1995)
that the premium beer is in the growth phase
Figure 4
The product life cycle of premium beer in
Germany
SALES
CE H
CP
Intro. Growth Maturity Decline
TIME
Key:
CP = Carling Premier
CE = Carlsberg Export
H = Heineken
of the German market. Germany is Europe’s
largest producer of beer and consumption per
capita in the world, which justifies being the
subject of the example here. Despite standard
beer having gained maturity, premium beer
has retained its rather novel image and thus
continues to command an increasing propor-
tion of sales within the German market.
Feldwick and McDonald (1991) outline that
typical marketing mix strategies for this
particular phase of the plc dictate that compa-
nies should attempt to expand their product
range; seek wide market coverage; employ
competitive promotional strategies in order
to build brand effectively; and adopt competi-
tive pricing to gain market share.
In fact, the former three recommendations
are indeed adopted by Carlsberg, Heineken
and Bass. However, the latter piece of advice
is not deemed to be appropriate considering
that the brands in question (Heineken,
Carlsberg Export and Carling Premier) fall
within the category of premium beers which
are distinguished by elevated prices.
With reference to the Boston Consulting
Group (BCG) matrix, (see Figure 5) the same
three brands have been positioned in the
“star” quadrant. This, according to Kotler et
al. (1996), is consistent with the plc growth
phase. Presence within this particular quad-
rant of the matrix implies that dominance
within a high growth market has been
attained. However, given that the three
brands are all placed in the lower portion of
the quadrant, the inference is made towards a
decline in the real market growth rate, which
is in fact the case in Germany.
No matter which quadrant of the matrix a
brewer’s product(s) appears in, the role of
branding is crucial. If the product is in its
growth phase and appears in the “star” quad-
rant, branding is a vital tool for creating a
strong image with popular brand associa-
tions to capture further market share. Simi-
larly, if the product has reached the maturity
phase, as in the case of standard beers
throughout Europe, and is thus positioned in
the “cash cow” quadrant, branding is of par-
ticular importance in retaining the market
share. This could be done by strengthening
the perceptions of the product held by con-
sumers and further encouraging brand loy-
alty. Thus, the product will be prevented from
reaching the declining stage and becoming a
“dog”.
The importance of branding in the
European beer market
When fighting for market share in the brew-
ing industry, strategies centred around
[ 83 ]
Demetris Vrontis
Strategic assessment: the
importance of branding in the
European beer market
British Food Journal
100/2 [1998] 76–84
Figure 5
Boston Consulting Group matrix
High
MARKET GROWTH
Low
Key:
CP = Carling Premier
CE = Carlsberg Export
H = Heineken
[ 84 ]
branding are of paramount importance. Com-
panies attempt to establish huge brand port-
folios enabling them to cater for as many
consumer forms as possible. As previously
mentioned, beer is homogeneous. The oppor-
tunity and scope to differentiate products on
physical terms is therefore very limited.
However, common methods employed for this
purpose include the product of beers of differ-
ent strengths and, of course, subtle changes to
the taste of the beer.
STAR QUESTION MARK
H CP CE
CASH COW DOG
High Low
RELATIVE MARKET SHARE
Brewing companies are therefore forced to
rely on branding and image differentiation as
a means of enlarging their brand portfolios.
Brand extensions are numerous. New beers
are introduced regularly which do not differ
greatly in taste but differ vastly in image and
brand associations. Carlsberg is especially
renowned for this; six new brands are
launched every two months, although only
the most successful launches are continued.
This examination of the uses of branding in
the European Beer Market reinforces the idea
that the principle importance of branding is
its ability to add value. As Feldwick and
McDonald (1991) suggest, branding alters the
consumers’ perception of a product.
It is the brand associations that influence
the consumer’s perceptions. Value is added
by the images connected to the product. The
consumer feels that the values and associa-
tions linked to the brand are similar to
his/her own values and preferences. The
consumer can also be influenced by how
he/she believes others perceive the brand.
“A brand’s success results from being able
to sustain these added values against
competitors over time” (Meldrum and
McDonald, 1995))
It must be emphasised that the value that is
added is completely intangible. However, its
presence is undeniable and its significance is
immense. Throughout this paper, it has been
stressed that, owing to the homogeneous
nature of beer, branding is the ideal market-
ing tool for brewers, allowing positioning and
differentiation between products and thus
incremental value.
Branding is crucial and of prime impor-
tance. Thus, European brewing competitors
should use it intensively if they wish to com-
pete successfully within the aggressive and
saturated beer industry.
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