Heineken Premium Lager Beer Evaluation from a Marketing Mix

Perspective

Product Evaluation

This is Heineken’s regular beer which is the same as the original Heineken

started with. Its mildly bitter taste, fresh, fruity aroma, bright colour and

exceptional clarity are obtained using only the purest water, hops and barley

malt. Alcohol: 5% vol.

Under the product evaluation in Malaysia, Heineken Beer is the No.1 selling

product in its segment (premium) compared to other brands available in

Malaysia. To maintain the quality standards, GAB as brewer always emphasis on

good quality raw material. Since the product falls under high premium brands,

GAB always maintain the consistency of the quality it’s brewed in

Malaysia.Heineken Beer always tastes fresh due to good quality and well

developed distribution network by GAB. The hangover due to heavy consumption

is very mild makes the product among favourites for working professionals and

youngsters who enjoy drinking sensation.

Heineken Premium Beer (Figure 4) can be evaluated based on attributes,

packaging and branding. Heineken Premium Beer is the only product available in

the beer segments for Heineken family in Malaysia. This product has no line

extension or variants for consumers to select.

Heineken Lager Beer taste has remained the same till to date despite indications

of stagnant market share and brand switching. This is referred as a maturity

stage in a product life cycle (figure 5). Heineken Malaysia should introduce

another line extension in light segment with differentiated taste and drinking

sensation to capture new markets from its competitors.

Figure 5: Product Life Cycle

Figure 4: Current Heineken Premium Beer packaging

(Source: - Kotler, 2009, p.324)

Heineken Premium Beer packaging has also remained the same for the past 5 to

6 years. It is deemed not appealing to the young and stylish crowd. It is important

that Heineken Malaysia introduce or rebrand their packaging concept to attract

the new generation. This is in tandem with the style and fad trend for any product

offered which would diminish over a period of time. (Figure 6)

(Source: - Kotler, 2007, p.458)

Heineken Premium Beer needs to increase its brand equity activities (Figure 7)

especially on awareness, preference, image & personality.

Pricing Evaluation

Figure 6: Fashion & Fads

Figure 7: Brand Equities Dimensions

Figure 8: Pricing decision factors

(Source: - Kotler, 2007, p.480)

Product pricing decision for Heineken Premium Beer can be evaluated by

internal and external factors as illustrated above (figure 8). Heineken Premium

Beer is positioned under product quality leadership as a premium product within

Premium category with Budweiser, Foster & Hoegaarden (figure 9).

Quality

Low High

Low

Price

High

Internal FactorsMarketing ObjectivesMarketing mix strategyCostsOrganizations considerations

External FactorsThe Market & demandCompetitors price and offersOther external factors

Pricing decision

s

Economy

Skimming Premium

HeinekenBudweiserFoster

Hoegaarden

Penetration

Figure 9: Pricing Strategy Matrix

The beer industry in Malaysia falls under oligopolistic competition market.

The pricing approach is based on “Competition Based Pricing” which will be

agreed collectively by the 2 key market leaders (figure 10 below).

Manufacturer Product *RRP (RM) for

320 ml can * based on average

pricing found at 7

Eleven stores.

Carlsberg

Carlsberg

Budweiser

Foster

8.50

8.50

Guinness Anchor Berhad Heineken 8.50

In Marketing Mix Pricing strategies, Heineken uses

Product Line Pricing i.e. 325 ml can (RM8.50)

Product Bundle Pricing; a carton of beer (24 cans of 325 ml) are

being sold cheaper i.e. RM 155.75 at major hypermarkets

Price Adjustment Strategies via

o Discounted pricing of 3-5% via Functional/Trade Discount for

retailers & whole sellers

o Discounted pricing for staff which is similar to retailers pricing

o Geographical pricing of 50% less for Duty Free Zone ( i.e.

Langkawi and Labuan )

Heineken had only initiated two Functional/Trade Discount activities compared to

competitors who had at least five or more activities. Therefore it is vital to

increase pricing adjustment strategies to penetrate premium segment.

Figure 10: Competitors Pricing

Promotions Evaluation

One of the most important components for beer promotion used to be through

advertisement and sponsorship. Heineken sponsorship is for the Chelsea Malay-

sia Tour football competition, 007 James Bond movie sponsor for local screen-

ing, Astromasters Golf competition, Rainforest World Music Festival Sarawak,

TGI Fridays Fathers Day promotion and other local pubs and club joint promotion

as shown in Figure 11 & 12.

Heineken Malaysia is deeply committed to promoting responsible consumption.

While Heineken’s does not provide medical advice, nor attempt to advise individ-

uals on important and complex medical issues, the Company is committed to en-

suring that consumers access the best available information regarding alcohol

and their health.Steeping into Men’s Fashion apparels collections for better brand

visibility. Aggressive advertising at Outlets & Pubs. Recently it also started mer-

chandizing sports goods and trendy clothing and accessories under Heineken

brand name.

Figure 11: Among the advertisement and sponsorship by Heineken Malaysia.

Figure 12: Heineken is a major sponsor of the Rainforest World Music Festival

Sarawak

Since beer drinking is a major religion, public and social health issue in Malaysia,

the Government has imposed many restrictions on Promotions mainly

advertisement & sponsorship control.

Heineken beer promotions only focuses on Personal selling, Sales promotion

and Public relations. Personal selling activities are commonly carried out in

entertainment outlets in metropolitan areas, using young and attractive ladies

(Figure 13).

Figure 13: Personal Selling Promoters

Sales promotions are via Trade Promotions (for retailers) and the payment terms

are rigid and conducted via Cash on Delivery (COD) only which does not allow

traders to stock up.

GAB projects an image of corporate leader by sponsoring Chinese children’s

education (Dragon Mission Project) and providing financial aid for natural

disaster victims such Tsunami victim at Banda Aceh as part of their Public

Relations Activities (Figure 14). This shows that it does not only focus on profit

reaping but more of a corporate social responsibility champion who does more by

giving back to the society.

GUINNESS Anchor Berhad (GAB) raised a whopping RM2.788 million in just

seven weeks with the participation of coffee shops, restaurants, entertainment

outlets and hypermarkets nationwide for it Dragon Mission project. The project

involves the community to raise funds for the development of Chinese education.

In Malaysia, Guinness Anchor Berhad donated RM200, 000 to The Star Fund to

provide aid for the tsunami victims.

(Source: GAB Malaysia, 2009)

Placement Evaluation

Figure 14: Public Relation Activities for GAB

GAB which brewed and market Heineken locally made it available throughout

Malaysia, and is dominant particularly in urban and metropolitan area. Apart from

that Heineken as a brand also has a presence in 60 countries. It also has some

one hundred shops apart from pubs and bars. Better retailing outlets are also to

be opened under the Heineken brand. Heineken also has tie-ups with large

department stores like ‘Foodworld’ for retailing its Beers. Heineken also has

association with number of Very Classy, Up-market & Stylish bars & lounges

which goes hand in hand with its brand image.

In Malaysia, GAB is using channel management, logistic management and

demand management. In channel management, our analysis shows that

Heineken Lager Beer is marketed in urban areas. The Mini Fridge as display unit

at the retailers is perceived as “outdated” and focuses more on the single product

only. (Figure 15).

Figure 15: Heineken Mini Fridge Display unit

Based on Channel design decision model (Figure 16), intensive distribution

method is being used. Currently GAB has captured 7-eleven outlets nationwide,

hypermarkets i.e. GIANT and Cold Storage.

This shows that the distribution market for GAB is wide and comprehensive but

they do not leverage on this by distributing Heineken Lager Beer throughout the

channel. It is also noted that Heineken Lager Beer is not focus in the Hotel,

Restaurant and Café (HORECA) segment. Currently the HORECA patrons are

youth where it is monopolised mostly by Carlsberg (65 %).

(Sourced: SMI Magazine Report report 2009)

(Source: - Kotler, 2007, p.555)

In logistic management, hybrid marketing channel networks (Figure 17) with few

Centre of Excellence (COE) distribution points through out the country being

adopted. The distribution centres are located at the designated market segments

namely north, central, south and east.

Figure 16 : Channel Design Decision

M

DistNorth

DistCentral

DistEast

Dist South

RR

R

RR

R

RR

R

RR

R

M – Manufacturer

Dist – Distributer

R - Retailer

Intensive Distribution

Selective Distribution

ExclusiveDistribution

Figure 17: Hybrid marketing Channel Networks Model

(Source: - Kotler, 2007, p.554)

Demand management currently is based on monitoring done by sales

representative. This is extremely crucial as GAB would need to avoid Out Of

Stock (OOS) situation where consumer switches to another brand due to

unavailability of Heineken Lager Beer in places where the product is well

established.