Contemporary Brand Management of Beer - Essay Example

Contemporary Brand Management Table of Content Content Page No. Introduction 02 IndustryBackground 03 Stella Artois 05 Brand Essence and Corporate Branding 06 Positioning 09 Celebrity Endorsement 10 References 11 Appendices 11 1.0 Introduction Beer is a common alcoholic beverage that is made from barley, yeast, hops, water, and grains. Its alcoholic content comes from the process of fermentation, which converts the simple sugars (carbohydrates) in the grains and barley into alcohol. It is widely consumed all over the world. The most primitive beers were brewed in Ancient Egypt, Greece, and China. In the United States, the most common beers are lager, which are characterised by their balanced flavors and bubbly texture. Budweiser, Coors, and Corona are common brands available in America, while other countries that consume a great deal of beer usually consume large quantities of beers made in their native country. "Americans have the largest per capita consumption of beer in the world. Europe is the home to most of the world-renowned breweries. These include, Carlsberg, Grolsch, Heineken, Fosters, and Stella Artois to name a few. Belgium is Beer country, but for other reasons. Belgians drink less beer. That's right! Beer consumption in Belgium has more than halved during the last 75 years. The figures, which were published recently the Flemish daily 'Het Laatste Nieuws' (March, 2006), showed that per capita consumption of beer in Belgium stood at just 95 litres per annum. The reason The Belgian Beer Association's Theo Vervloet told the paper that despite this fall, the breweries didn't want to encourage youngsters to start drinking early. Despite the disappointing figures, the Association of Belgian Breweries were against aggressive advertising campaign to force up the beer consumption within Belgium. It is estimated that the world consumes over 100billion liters of beer. Reports show that this value is on the rise due to an increased amount of under-aged drinkers and an increasing variety of beers. When it comes to beer, America is the greatest consumer, for people there ingest around 23billion liters annually. 23billion liters is equal to the quantity (in SI units) of 23gigaliters"(Johnny Alicea, Volume of World Beer Consumption, hypertextbook.com). Stella Artois, a Belgian brewery produces Pilsner beer that has a strong following not only in Belgium, but the whole of Europe and North America as well. 2.0 Industry Background Belgium is Beer country. Despite its size and population, Belgium is among the top beer producing countries in Europe. The Netherlands, France, Poland, and the United Kingdom are the others in Europe who can boast of more or equal production. (Refer EPISTILE Analysis, Appendices 1.0). The major players in Belgium who contribute to their beverage output for local consumption and exports are: Brasserie d'Achouffe, Affligem Brouwerij, NV Brouwerijen Alken-Maes, Brouweri Het Anker, Artois, Brasserie Du Bocq s.a., Brouwerij Bosteels, Chimay, Brouwerij De, Keersmaeker Brouwerij De Koninck, Brouwerij De Gouden Boom, Brouwerij De Ryck, Duvel Moortgat, Brouwerij Haacht, Brouwerij Hoegaarden, Van Honsebrouck, Brasserie Jupiler, Brouwerij Palm NV, Brouwerij Riva nv., Brouwerij Rodenbach, Brouwerij St.Bernard, Brasserie Union, Brouwerij Van Steenberge, 't Pakhuis, and Brouwerij Der Trappisten van Westmalle. (Pattinson, www.xs4all.nl). Abbey, Non-/low-alcohol, Amber, British type, Gueze/fruit, Luxe pils, Pils, Regional, Table Beer, Trappist, Wetbier, Sour, Strong golden were the different beer sold in and by Belgium. From the analysis of the report published in the "Het Brouwersblad" June 2004, p.12, and "Het Brouwersblad" June 2005, p.8, publications, the maximum production was of Pilsner, at a staggering figure of 7,044,252 out of 9,935,211hectolitres in 2003, and 6,930,525b out of a total of 9,702,619b Hectolitres in 2004 (Pattinson, www.xs4all.nl) (Refer EPISTILE Analysis in appendices 1.0). Stella Artois is considered to be one of the Europe's most premium lager beer producers. Stella Artois dates back to 1366, when it was first brewed in the Leuven Brewery, in Belgium. It has a distinct taste that borders on uniqueness, and boasts of a strong character which appeals to its millions of die-hard customers. The brew consists of 80 percent Pilsner malt, and 20 percent adjuncts. The beer is different from contemporary beers in the market in that, it is mild and lacks the traditional sourness. Stella Artois, with an alcohol content of 5.2% is considered to be among the better quality beers in Europe. The other brands under the Artois flagship are: Vieux Temps, Leffe Brune-Dubbel, Leffe Blonde, Leffe Vieille Cuve, and Leffe Radieuse (Pattinson, www.xs4all.nl). Stella Artois is brewed in four different hop varieties, Tettnanger, Styrian Goldings, German Northern Brewer, and Czech Saaz hops. Stella Artois is brewed in the Bohemian Pilsner style and is processed for about two months at the brewery. Stella Artois is Belgium's answer to the Bohemian pilsner category (www.epinions.com) 3.0 Stella Artois The Artois brewery dates back to 1366 and was acquired by Sebastien Artois in 1717. Stella Artois was first brewed as a Christmas beer in 1926 and was very popular. The patriotism shown by her die-hard faithful kept Stella going to become a part of the Belgian multinational conglomerate, Interbrew. They have expanded their operations through acquisitions in neighbouring Netherlands and Germany, and co-production in Australia. Stella Artois is the biggest selling Belgian beer and is available in over 80 countries (andaryl, review summary, epinions.com). Stella Artois is Belgium's answer to the Bohemian pilsner category. With its many complex and characteristic strong ales coming out of Belgium, and lack of lighter lagers as well as the big company ownership, Stella Artois is open to fire from the outset. "Stella Artois is Interbrew's global lager brand. This classic European lager is a bottom fermented blond Pils with an alcohol content of 5.2% volume. Only the very best barley and the finest hops are selected for this beer. Stella Artois is full-bodied but none the less exceptionally thirst quenching, and should be served cold at 3 C."(A Quick Background, www.super-import.com). 4.0 Brand Essence and Corporate Branding What is the concept of brand personality No product or company can survive competition or sustain its identity without asserting itself on two basic components in marketing: Image, and people. If not managed properly, these components can break a brand. Brands and people have to be owned, nurtured and developed by an organization. They are the ultimate differentiators and value creators. Companies such as Pepsi, Coca cola, Levis, and Cadburys are a few examples of well managed brand companies, whereas Enron and Anderson are the adversaries. So powerful is this medium, that unless harnessed properly, sustainability, popularity, and growth are at risk. Thus, the elements that affect an individual's relationship with a brand are: The relationship between the product and the customer, and The type of person the brand represents. The consumer obviously would like the personality traits to be that of his own. One important relationship for many brands is a friendship link characterized by trust, dependability, understanding, and caring. A friend is there for you, treats you with respect, is comfortable, is someone you like, and is an enjoyable person with whom to spend time (Brand Personality-The relationship Basis Model, groups.haas.berkeley.edu). In the beginning it was thought that it was the companies that were responsible, and then it was thought that brand managers and planners who made the brands that we come to associate products with. This is not true. It is the people, yes! Ordinary people like us, who builds brands. It is the extent to which it makes sense and the role it plays in the consumer's life that builds a brand. There are two questions which should be asked: How different is your brand And how relevant is it to the consumer The result is out there in the market. You become a brand when you don't talk about a brand but when more people talk about you. Every single thing that you do builds a brand. "Reassuringly Expensive" Stella Artois is a mild beer with an alcohol content of 5.2% that comes in a refreshing green bottle. An absolutely ingenious ad campaign that describes Stella Artois as "Reassuringly Expensive" is the hindsight to its success. This is however far from true. Stella is among the average priced beers that one might find in Europe. It has a distinctive taste that pleases the palate. Stella Artois' Belgian maker pursues young drinkers with taste, and an unusual serving method. It is also not as expensive as made out to be. Stella Artois is rated to be as good if not better than the world classic: Pilsner Urquell. (Refer SWOT analysis in Appendices 2.0). Brand Pyramid Brand Resonance The Coolest Beer. Brand judgement/Feelings Innovative service methods to go with good taste. Brand Performance/Imagery A Quality product. Reassuringly Expensive Brand Salience Best beer for a moderate price. To achieve a Brand Resonance is the prime objective of an organisation. Stella Artois has been successful in achieving this: For the second year running (2004-2005), Stella Artois was voted for the best CoolBrand Crown. This is no mean achievement, as more than a thousand competitors are short-listed for this event. The verdict is a reflection of a panel of prestigious judges who know their job. This reflects the consumer's choice. The world classic Pilsner Urquell from the Czech Republic is perhaps the only Pilsner that is more popular among the Pilsners in Europe. Pilsner Urquell is undoubtedly the most popular competitor for Stella Artois. A well renowned beer from the house of the international cartel SAB-Miller, Urquell is the original pilsner from Pilzen in the Czech Republic. Pilsner Urquell is a bottom-fermenting beer produced since 1842 in Plze, Bohemia (now in the Czech Republic). It is made at the Czech brewery Plzesk Prazdroj, a. s.(Refer SWOT analysis in Appendices 2.0). In order to make its presence felt in the Czech Republic, Stella Artois has made a beginning. The Czechs are almost religiously devoted to their local beer, that it will take some effort to break the jinx. Stella has made its entry into the Czech Republic and from reliable sources, it is gathered that there are signs of recognition on (Refer SWOT analysis in Appendices 2.1). 5.0 Positioning Brand positioning, as discussed earlier in "The concept of Brand Personality" has a lot to do with the creation of an image in the minds of the consumer so that it occupies a distinct and valued place in his mind. Stella Artois has been successful in its goal to achieve this. The following statistics speak for it: For the second year running (2004-2005), Stella Artois was voted for the best CoolBrand Crown. This is no mean achievement, as more than a thousand competitors are short-listed for this event. The verdict is a reflection of a panel of prestigious judges who know their job. This reflects the consumer's choice. The tag of being a "Cool thing"" is symbolic of its stature in being recognised by beer lovers all over Europe. In the words of Stephen Cheliotis, Chairman of the CoolBrands, "Stella Artois has built a loyal group of followers who trust that it will not only continue to provide them with a consistently great tasting beer but with creative inspiration and entertainment through its innovative marketing,". He continues, "Tangible and intangible, product and buzz, Stella Artois is a deserved recipient of the prestigious CoolBrand 2005 accolade." (Stella Artois Retains CoolBrands Crown, The Publican.com). This unanimous verdict is the true reflection of the consumer's choice. Stella is associated with major film productions for promotional launches. It is also associated with other entertainment productions to woo the 18-25 year old segment of society, the major lager target audience of opinion-forming. Special incentives, offers, and activities are unveiled periodically to bring these age groups around to Stella. Stella Artois is moving in the right direction. 6.0 Celebrity Endorsement Getting well known personalities to endorse products or brands to attract publicity is called celebrity endorsement. A celebrity endorser should have a high level of visibility, is a good judge, have feelings, and must be credible in terms of expertise, trustworthiness, and attractiveness. People like David Beckham would suit the bill. "It takes a cool Stella to cool the over-heated Beckham". Stella is known to be associated with films. Stella Artois can make much headway by sponsoring celebrity events and even have a leading film personality be its Brand Ambassador. This association will give it the required mileage in terms of popularity. 7.0 References Ron Pattinson, Belgian Breweries, www.xs4all.nl www.epinions.com A Quick Background, www.super-import.com Brand Personality-The relationship Basis Model, http://groups.haas.berkeley.edu Building, Measuring, and Managing Brand Equity, Page 72, Figure 2-4, Second Edition, 2003 8.0 Appendices 1.0 EPISTILE Analysis Belgium is among the top beer producing countries in Europe. The Netherlands, France, Poland, and the United Kingdom are the others in Europe who can boast of more or equal production. The following Tables 1, 2 reflect this. Table 3 reflects the volume of export of beer from Belgium in the context of European exports. Table 4 reflects the volume of sales of beer within Belgium. Table 1 Beer Production (1000 hl)2004 Country Beer production Comments Austria 8670 Belgium 17409 Denmark 8.550 Finland 4617 France 16801 Germany 106190 (1.000 hl) Greece Ireland 5206 Italy 13170 Lithuania 2714 Luxembourg Malta Netherlands 23.828 Norway 2230 Poland 29 200 GUS data (including import, excluding export) Portugal 7436 Spain Sweden 3788 Switzerland 3 470 Turkey United Kingdom 57459 Government data (revised Jul05)-likely to be overstated Table 2 Beer sales by container2004 Draught Beer Returnable bottle Non-returnable bottle Can Country 1000 hl % 1000 hl % 1000 hl % 1000 hl % Comments Austria 2637 30,4 4175 48,2 241 2,8 1617 18,6 Belgium 3520 36,28 4347 44,80 166 1,71 1670 17,21 Denmark 632 13 3938 81 na na Non-returnable bottles and cans together account 6% of sales Finland 760 16,5 3077 66,6 0 0 780 16,9 Production France 4008 24 788 4,7 8960 53 2050 12 Germany Greece Ireland 3731 71.7 263 5.1 245 4.7 967 18.6 Italy 1880 14,3 1264 9,6 8799 66,8 1227 9,3 Lithuania 380 14 1352 49 922 33 137 4,9 Luxembourg Malta Netherlands 3.076 29,3 7.777* 71,7 NA NA * Including one way packaging Norway 529 22,8 1028 44,2 NA NA 767 33 Data relates to 96% of the beer market, which cover the production from Norwegian breweries, and the beer the breweries imports and distributes. Poland 2 709,37 10,55 % 13 869,97 53,99 % NA NA 9 109,34 35,46 % data relates to 95% of the beer market Portugal 1511 20,3 3123 42 2097 28,2 570 7,7 Spain Sweden 500 13.2 765 20.2 61 1.6 2462 65 Switzerland 1338 31,4 1219 28,6 1011 23,7 694 16,3 Turkey United Kingdom 32100 55.6 321 0.6 8128 14.0 17176 29.8 Based on BBPA Annual Beer Market Survey (excludes small micro-brewers who account for 1-1.5% of market) Table 3 Exports of beer (1000 hl) and % of production2004 Country 1000 hl % Comments Austria 577 6,7 provisional Belgium 8699 89.65 Denmark Finland 251 2,6 France 1973 12 Germany 13 718 12,9 Greece Ireland Italy 849 6,4 Lithuania 102 3,8 Luxembourg Malta Netherlands 12.976 54,5 Norway 30 1,25% Poland 349 NA Portugal 1261 17 Spain Sweden Switzerland 24 0,7 Turkey United Kingdom 4379 7.4 Table 4 Belgian beer sales by beer type (hectolitres) 2002 2003 2004 Shops Bar Total Shops Bar Total Shops Bar Total Abbey 281,310 606591 868262 307,270b 319,195b 626,465b Amber 100,886 317,119 418,005 90,382b 272,433 362,815b British Type 53,471 77, 573 131,044 51,845b 73,372b 1325,217b Gueze/fruit 74,123 133,774 207,897 83,821 158,366 242,187 Luxe pils 58,324 112,380 170,704 69,519b 109,642 179,161b Pils 3,146,604 3,867,574 7,014,178 3,252,649 3,791,603 7,044,252 3,255,430b 3,675,430b 6,930,525b Regional 33,575 45,875 79,450 33,903 47,743 81,646 Table Beer 134,457 93,152 227,609 119,172b 88,039 207,211b Trappist 102,855 121,367 224,222 101,362 124,752 226,114 Witbier 85,852 375,893 461,745 91,058b 358,658 449,716b Sour 18,072 47,470 65,542 20,724b 47,831b 68,555b Stong Golden 103,766 125,229 228,995 113,848b 131,719b 245,567b Non/low Alcohol 47,447 32,691 80,138 44,536b 31,769 76,305 Total 4,240,694 5,660,703 9,901,397 4,380,089 5,555,122 9,935,211 4,362,627b 5,399,992b 9,702,619b Sources: "Het Brouwersblad" June 2004, p.12 b "Het Brouwersblad" June 2005, p.8 2.0 SWOT Analysis Stella Artois:: Price per six-pack ($US): 7.99 Pilsener Urquell: Price per six-pack ($US): 6.99-7.00 Pilsener Urquell: This is the original pilsner from Pilzen in the Czech Republic. The main thrust of this style is the use of Czech-grown hops, which accentuates the floral aromatics. The light golden hue might mislead you, as this beer is rather full-bodied and rich in flavor. Czech hops are used liberally to enhance the bitterness and flavor, as well as the aforementioned aroma. Carbonation is considerably high with solid head retention. The nose is slightly flowery with just a hint of malt. Appearance: Beautiful golden yellow color Aroma: Assertive hops with a blend of grassy and piquant peppery scents. Flavor: For a beer that's known for its hop character, Urquell might surprise with its remarkable balance and its firm, sweet malt body. (www.epinions.com) Appendices 2.1 Foreign beer enters local market Stella Artois' Belgian maker pursues young drinkers with taste, unusual serving method By Jennifer Hamm Staff Writer, The Prague Post (December 18, 2002) In cafes and bars from Zizkov to Mala Strana, a new beer's on tap: Belgium's Stella Artois. But in a country with an almost religious devotion to Czech brews and the highest beer consumption per capita in the world, can Czechs be persuaded to drink a foreign beer They can, according to Karel Hrbek, Stella's brand manager in the Czech Republic. "The so-called heavy drinkers are dying like dinosaurs," Hrbek said while sipping a Stella Artois. "We have an upcoming generation. They don't want to be like their fathers, in the pub all day, drinking 20 beers." Stella's marketing strategy calls for targeting upwardly mobile, educated and well-traveled young people. "It's not bitter like Czech beer," Hrbek said. "We know young people don't like bitter beer. They prefer drinkable beers." With less than two years on the Czech market, Hrbek said the campaign is still in its first stage. But there are indications that business is growing and brand recognition is improving. Hrbek declined to offer specific sales figures. Belgium's Interbrew bought Staropramen in August 2000, opening the door to the local market. Stella Artois tops the company's premium beer selections. After a six-month market study, the company decided to push the brand here. A different pour Stella Artois, which costs an average of 29 Kc (94 cents) for half a liter, is attempting to distinguish itself from high-end Czech beers such as Pilsner Urquell by its so-called serving ritual. Pub owners and bartenders with Stella Artois on tap are trained to pour the beer at a 45-degree angle, letting the head spill over the side, scraping the remaining foam with a knife and finally cleaning the outside of the glass with water. The beer is also served in a shapely oval glass with a thin stem. This differs from the traditional Czech beer glass and beer-pulling style, which involves a two-pour process of filling the glass half way, letting the foam settle and then topping it off. Hrbek calls the Stella serving ritual "the point which makes the difference" in marketing the beer. But despite training and regular monitoring, some bartenders serving Stella Artois are sticking to the Czech ways. At the Mezcal restaurant near the I.P. Pavlova metro station, owner Maxim Chudoba said his staff gets too busy to follow the Stella ritual. "For me, it's no problem," he said. "For my people, it's a problem." At the Cafe Kino Lucerna, bartenders also pour Stella Artois in the same way they would pull a Czech beer. Some Czechs don't like the more elaborate Belgian pouring style. "They get angry because it takes so long," said Erika Smekalova, manager at Les Moules, which serves eight different Belgian beers. "You can pour 20 [Czech] beers in a few minutes but one [Belgian] beer takes three minutes." Smekalova said she believes Czech beer drinkers have something to learn from their Belgian counterparts. "Belgian people have 300 kinds of beer," she said. "It's a different culture." While Czech beer drinkers are a tough sell, Stella Artois is having success in other foreign markets. With its "Reassuringly Expensive" campaign in the United Kingdom, Stella Artois is among the top brands. And in the United States, sales are skyrocketing. Experts predict that a few international brands such as Stella Artois and Heineken will dominate the world's beer market in the coming years. The Czech Republic will be the only exception," Hrbek said. "On the one hand, I'm proud. On the other, it's a pity. People here are blind. They see only Czech beer. They are missing other occasions." Lenka Ponikelska contributed to this report. The Prague Post, www.toonale.co.ukThe Prague Post Online. Read More