Heineken N.V. Case Study: Branding and Advertising Challenges

This case study examines Heineken N.V.'s global branding and advertising strategies, focusing on the challenges faced in a competitive international market. It analyzes the company's background, including its founding and commitment to quality, and explores two research projects, Project Comet and Project Mosa, aimed at clarifying brand identity and advertising implications. The study identifies key issues such as market competition, product differentiation, and the need to adapt to evolving consumer preferences. It delves into the company's organizational and discipline-related challenges, including the need for effective partnerships and maintaining brand consistency across different markets. The analysis evaluates alternative solutions, including targeting diverse demographics and adapting product offerings to different income tiers, and offers recommendations for future strategies. The study emphasizes the importance of inclusive advertising, product segmentation, and adapting to changing market dynamics, providing valuable insights into the complexities of global branding and marketing in the beer industry.

Running Head: DECISIONS AND ISSUES IN MARKET COMMUNICATION
DECISIONS AND ISSUES IN MARKET COMMUNICATION
Name of the Student
Name of the University
Author Note

1DECISIONS AND ISSUES IN MARKET COMMUNICATION
Overview of the Case
Structure of the Case Analysis: Problem type
a) Heineken is one of the oldest breweries founded in Amsterdam in the year 1863, by a
person named Gerard Adriaan Heineken (Quelch & Laidler-Kylander, 1995). The aim
of the Company was to sell the highest quality of beer by using best strains of yeast. It
is globally available in the form of import if not bottled across the globe.
b) The two research projects, namely, Project Comet and Project Mosa, commissioned
by the Company, Heineken, aimed to clarify the image of the Company and create a
brand identity with its implications on television advertising.
c) This project looks into the beer brand, Heineken, the company’s background, its
profile and advertising challenges faced by the Company. It aims to look into the
situation of the managers and communications of the brand around the world.
Statement of the main problem:
The rising issue for Heineken lies in the image, brand identity and availability of the
product in the local market. It aims to look into the factors of distribution, sales and
advertising of the product:
Industry Issues:
 Extreme competitions in the areas of Europe that led to reducing the content of
alcohol in beers with the introduction of flavored beers or dry beers. This was borne
out of minimal population growth and stagnant growth in per-capita income.
 Product differentiation with quality improvement and segmentation in taste and
consumer sophistication was another guiding factor that added to the necessities for
development of the brand image to target population across the globe (Christian &
Sunday, 2013).

2DECISIONS AND ISSUES IN MARKET COMMUNICATION
Organization Issues:
 Heineken aimed to look for partners who were prospective enough to ensure a tight
control in the production as well as marketing, encouraging partnership with only
those breweries that did not have any international ambition.
Discipline Issues:
 Heineken remained as the first brand to make an international presence. However, it
failed to make an influence on the market as a licensee could market its own brand.
 Lack of popularity in Netherlands for the domestic breweries. Besides this, there is a
decline in the market value, sales and brand image of Heineken in Netherlands against
the rising competitor Grolsch required some revitalization (Quelch & Laidler-
Kylander, 1995).
Critical Factors
Factor Importance
Message of Competition: International and
Domestic
The competition needed the Company to produce
a diverse range of products and cater to the
rapidly growing developing nations.
Local Market Competition like in
Netherlands
People in Netherlands preferred local beers than
international brands like Heineken where the
Company required bottling partners.
Target Population It targets the youth and majorly the males of the
population when it comes to consumption of
beer.
Pricing Competition It faces severe challenges in the pricing and
volume of beer, manufactured by the Company in
the regions of Italy and Spain.

3DECISIONS AND ISSUES IN MARKET COMMUNICATION
Improving quality Improvement of quality and introduction of
premium segments, based on the income of the
people, across Southeast Asia, South America
and Greece or Portugal were other major
challenges that the Company faced as the market
underwent evolution in the international front
(Quelch & Laidler-Kylander, 1995).
Growth in the developing regions While the developing countries were growing
rapidly, with a rise in their per - capita income,
the developed countries were now in a stagnant
stage with less scope for a rise in per – capita
income or consumption.
Challenges in developing diverse line of
products
The Company requires developing a diverse
range of products to cater to the various
income tiers in the global population.
Alternate Solutions
The study reveals the various other sources of alternative aspects that require
solutions to the critical issues faced by Heineken. To counter these, the company needed to
abide by the following changes in its production line:
Solution Advantages Disadvantages
Target Population The Company is focused on
targeting male consumers
through persuasive
advertisements.
The Company needs to target across
races, religions and genders to make
the advertisements more inclusive.

4DECISIONS AND ISSUES IN MARKET COMMUNICATION
Market Penetration The Company focuses on
promoting sales in the
developed nations.
The Company requires focusing on
the developing nations, which were at
their take – off stage and were
expanding at an increased rate
(Akinyoade, Ekumankama & Uche,
2016).
Quality The Company adapted to
produce low alcohol beer that
promoted, which were flavored
to enhance the taste, known as
‘dry beer’ (Quelch & Laidler-
Kylander, 1995).
The Company, Heineken, aimed at
producing clear, golden, high quality
beer but had to compromise the
product value, in order to fight the
barriers of pricing in the international
market.
Pricing The economies of the
developed nations were
saturated with a static per –
capita income; thereby not
increasing consumption. Local
markets sold at a lower price
and emerged as competitors for
the international brand.
The developing countries grew with
their economies boosted by the rise in
consumption, leading to a situation of
economic and Gross Domestic Value
(G. D. P.) growth (Quelch & Laidler-
Kylander, 1995). This also increased
the opportunity to cater to more
consumers, marking a shift from the
developed to a developing region.
Analysis
The Projects considered and commissioned by the Company, places the data that
enhances the quality of the product, making sure of its availability across the globe as a
leader in the international market of beer. The projects shows how the Company is trying to

5DECISIONS AND ISSUES IN MARKET COMMUNICATION
collaborate with domestic companies or bottlers who are ensuring a market of success for
Heineken, which can be readily and cheaply available. It also fails to cater to the developing
nations and that emerges as a major challenge (Van Cranenburgh & Arenas, 2014)
Recommendation
The Company shall emphasize on all, across genders to erase the bias and target a
major half of the population. As it boasts of being a global marketer for beer, it requires
adapting and motivating customers through persuasive advertisements that hold social as well
as familial values (Cabras & Higgins, 2016). The Company needs to aim and dig firm roots
into the domestic markets with the production of specific, unique products like the flavored
drinks to cater to all the tiers of income groups with a specific premium product in each tier.
Rationale
Heineken being a large producer of beer requires having a chain of managers and
operations that look into specific changes in quality and taste that attracts particular sections.
Targeting a larger chunk of population and segmenting them during the production, supply
and pricing points is essential. Enhancing the Company’s image before its customers and
shareholders through the product’s quality improvements. The rising change in the Climatic
conditions shall also be looked at in these situations (Maria Gonzalez-Gonzalez, & Zamora-
Ramirez, 2013).

6DECISIONS AND ISSUES IN MARKET COMMUNICATION
References
Akinyoade, A., Ekumankama, O., & Uche, C. (2016). The use of local raw materials in beer
brewing: Heineken in Nigeria. Journal of the Institute of Brewing, 122(4), 682-692.
Cabras, I., & Higgins, D. M. (2016). Beer, brewing, and business history. Business
History, 58(5), 609-624.
Cala-Riquelme, F., Gutierrez-Estrada, M. A., & Daza, E. F. (2015). The genus Loxosceles
Heineken & Lowe 1832 (Araneae: Sicariidae) in Colombia, with description of new
cave-dwelling species. Zootaxa, 4012(2), 396-400.
Christian, A., & Sunday, E. M. (2013). Factors Influencing Brand Preference of Beer
Consumption In Port-Harcourt Metropolis, Rivers State, Nigeria. Analyst, 5(7).
Maria Gonzalez-Gonzalez, J., & Zamora-Ramirez, C. (2013). Towards the consolidation of
climate change strategies in organizations: the case of Heineken Spain. International
Journal of Climate Change Strategies and Management, 5(1), 6-20.
Quelch, J. A., & Laidler-Kylander, N. (1995). Heineken NV: Global Branding and
Advertising. Harvard Business School.
Ruiz, A. S., & Brescovit, A. D. (2013). The genus Loxosceles Heineken & Lowe (Araneae:
Sicariidae) in Cuba and Hispaniola, West Indies. Zootaxa, 3731(2), 212-222.
Van Cranenburgh, K. C., & Arenas, D. (2014). Strategic and moral dilemmas of corporate
philanthropy in developing countries: Heineken in Sub-Saharan Africa. Journal of
business ethics, 122(3), 523-536.

7DECISIONS AND ISSUES IN MARKET COMMUNICATION
Van Cranenburgh, K. C., & Arenas, D. (2014). Strategic and moral dilemmas of corporate
philanthropy in developing countries: Heineken in Sub-Saharan Africa. Journal of
business ethics, 122(3), 523-536.