Marketing Mix of Heineken - Report Example

International Marketing Contents Introduction 3 Marketing Mix of the Company 3 Suggestions about the Strategies of Heineken 5 Internationalisation Process Theory (IPT) and its Implementation in Business 7 Conclusion 8 References 10 Introduction International marketing refers to certain business activities which direct a company for exchanging their products or services across the national border. Any company can take global market advantages if they will participate in the international market because business owners can get huge range of profitable opportunities. Here the selected company is Heineken and marketing consultant of Global Marketing Solutions plc will prepare a report on behalf of this company. Heineken is a Netherland based company which is mainly involved in producing beer. The company has expanded the business in global market in an aggressive way and also applying innovative marketing strategies. The company has faced double digit growth especially in the fast developing markets. Marketing Mix of the Company Heineken is now world’s number one premium beer brand which offers high quality beer to its customers. Currently they are offering four kinds of beer which are Heineken Pilsener, Heineken Oud Bruin, Heineken Premium Light and Heineken Tarwebok. Oud Bruin and Heineken Tarwebok are two types especially available only in the countries of USA and Holland. The company has limited number of products as it has a large variety of other brands in the market (Aswathappa, 2008). Heineken Pilsener is regular beer product of this company and this was launched first by Heineken. 5 % volume of alcohol is included in this product and it has bright colour, exceptional clarity, mildly bitter taste. Heineken Tarwebok has spicy taste and it is the strongest beer produced by this company (Hutt and Speh, 2012). Heineken Oud Bruin provides caramel and mildly sweet taste and it has dark rich colour. Apart from beer, the company is also offering beer tapping system which is called beer tender to its customers. DraughtKeg is another type of beer tapping system which was also launched by Heineken. Heineken has expanded its business operation in more than one countries and it has occupied a stable position in the global market. Currently the company is running its business in Africa and Middle East countries, Asia, Europe and America (Hoffmann, 2008). In Europe the company has expanded its marketing and selling activities at Belgium, Austria, England, Ireland, Portugal, Romania, Spain, Scotland, Switzerland and many other countries. In Asia, New Zealand, Japan, India, China, Vietnam, Sri Lanka, and Thailand etc and in America, Brazil, Argentina, Jamaica, Chile etc are their market place for conducting their marketing activities (Feinberg, Kinnear and Taylor, 2012). Again in case of distribution system this can be said that as this company has partnership with Budweiser which is based in Italy, so Heineken uses Budweiser’s distribution network for doing business in Europe. The company reduced its order cycle time from three months to one month and also implemented simple planning for its distributors. Currently the company has more than 125 distribution channels and more than 900 SKU’s in more than 70 countries in the world (Newlands and Saee, 2012). The marketing and advertising ability of this company is very strong than the other competitor brands in the international market. They generally selected sponsorship options for conducting a world spread marketing activities. The company sponsors major sports events in every year such as Champion’s League in Europe. They invest a large amount of capital in their marketing activities to create brand image in the market (Malhotra, 2010). The company has followed premium pricing strategy. They want to establish high value brand image in the international market and the company is offering high quality products to the customers so price of the products are quite high than the other existing brands in the market. They focus on the experience and enjoyment factors for premium price of their products. This also can be said that Heineken is such a good brand which is always thinking about the health of customers. For this reason they are offering high quality products at premium prices (Duhaime, Stimpert, Chesley, and Chesley, 2012). Suggestions about the Strategies of Heineken A marketing consultant of Global Marketing Solutions plc can suggest few more strategies which will be helpful for this company to achieve more market share in the global market. In case of pricing strategy this can be said that apart from premium pricing strategy the company also can adopt price skimming strategy which will help to enter a new market. If the company ignores to take initiatives to expand their business operation in new market place then it will not be able to achieve more percentage of international market share and competitors will achieve this place. For taking competitive advantages from the market and to gain maximum revenue price skimming strategy is required (Ferrell and Hartline, 2012). Again along with the premium pricing strategy the marketers of this company also can implement psychological pricing strategy which is closely related to the existing pricing strategy of this company. Usually psychological pricing strategy develops certain views of customers. From these points of view customers can analyze that if they pay more to buy the products of Heineken then they will get not only the better quality and good tasted products but also healthy and hygienic advantages. This simple psychological concept can make huge differences in terms of revenue and profit in business (Kapferer, 2012). In case of promotion this can be said that the company only concentrates on their promotional activities through sponsorship of different game tournaments. But from the marketing perspective it should take more initiatives on the procedure of its promotional and marketing activities and the selected procedures should be diversified in nature. Already the company has spent a lot of money for the purpose of promotional and marketing activities. But if they will invest the same amount of money in different promotional tools then they will get more effective feedback than the present situation (Lindstrom, 2012). So in this case proper allocation in marketing budget is required and this work can be done by the management of the company. Apart from the Champions League in Europe the company also can sponsor other big game tournaments like FIFA World Cup Football, Olympic Games etc. The company can start more advertisement of its product on the electronic and print media throughout the large countries in the world (Kapferer, 2012). This also has to be highlighted that the company should develop more variety of products. Currently they are offering four types of beer to its customers and among these four varieties only two types of beer the company is offering to the global customers and other two types are only for USA and Netherlands based customers. So this can be observed that in the international market, customers are getting only two options from this brand. Other brands which are remaining in the same industry are developing and launching new variety of beer which have different taste from the existing products and that will attract more number of customers (Cullen and Parboteeah, 2009). People in the world who are consuming beer also seek new tasted item and if any company can fulfil their criteria then obviously they will be attracted by those new products. So this is hereby suggested that if the company will develop more variety of products then it can earn more revenue not only from domestic market but also from international market (Kotler, 2011). Heineken has already expanded its business activities in the major and large countries in the world. In Europe, Asia, America and Africa it has occupied a stable position at those regions where economic condition is more or less stable. But to face some challenges which may be arrived from financial crisis in different countries, the company should take precaution otherwise business will face huge loss. This is a significant drawback for doing business in the international markets. Again another major point is that the company should try to develop their own distribution channels without depending on the other entities especially in the major countries from where more amount of revenue is generated within the business (Thompson and Martin, 2010). Internationalisation Process Theory (IPT) and its Implementation in Business Internationalisation Process Theory (IPT) provides certain guidelines to the business entity who are engaged in the global market. These theories focus on many important areas of business such as marketing activities, availability of finance, entry barriers, technological advancement etc. In case of above mentioned situation the company Heineken can apply many internationalisation process theory such as Uppsala model theory (Margardt, 2009). This theory explains how a company can gradually intensify their business activities in the international market. Though Heineken has already occupied significant place in the global market but it can expand its market area and also can achieve more percentage of market shares if it applies the above mentioned theory in their business strategies (Ebner, 2011). This theory also suggests that a company should gain experience at first in its domestic market and after that it can expand its business operation in those countries which are culturally close to the domestic country of that company. Here this can be said that the company already adopted this theory in the past because after achieving success in the domestic country (Netherlands) Heineken expanded its business operation in other countries (France, Switzerland, Spain etc) which are based in Europe. So automatically those countries are culturally similar with Netherlands as those belong within the same continent (Wetherly and Otter, 2014). This model also highlights that foreign sales start with occasional export orders. Again this model states that market knowledge will direct the companies to take constructive decisions which will fulfil the expectations of customers and company’s current activities will increase the market commitment towards its products or services. So these are the few advantages of this model and when a company will use this model then that will also get such competitive advantages in the international market (European International Business Academy, 2009). But this theory has some limitations also. This model does not consider management incentive issue but this will affect in case of effective decision making process. Another famous theory can be applied in this context and that is Keller brand Model theory. This theory provides certain guidelines to develop strong brand image in the international market. If any company can follow four specific steps which are discussed in this theory then the company can be able to build a strong brand image to its customers. These four steps are – 1) Creating brand identity, 2) Understanding brand meaning, 3) Analyzing brand response and 4) building brand relationship (Sachse, 2011). This model indicates two major points which are depth and breadth and are essential elements to create brand awareness and brand awareness is the major criteria for brand identity. Brand meaning indicates product quality, durability, price, style and design, service effectiveness, product reliability etc. Brand relationship will depend on behavioural loyalty, sense of community etc and a company can get brand response for the quality and superiority of their products. Again describing about the disadvantages this can be said that the model is unable to focus on the individual product brands and this model avoids all the risk related factors which may be involved in the brand factor of a company (Marquardt, 2013). Conclusion At the part of conclusion this can be said that premium pricing strategy is an excellent strategy adopted by Heineken and this strategy enhances the brand value of the products which are offered by the company to its customers. But they have to improve their distributional channel strategy in the context of international market. For example this can be said that in Europe the company is depended on the other entity though it has partnership in that organization. If in future those distribution networks fail then company will face huge trouble to run its business activities in Europe. Apart from that, Heineken has strong global distribution network to operate its business. The company is offering high quality products but variety of products needs to be developed. Few international process theories such as Uppsala model theory, Keller brand Model theory etc can also be applied by this company to get more competitive advantages in the global market. 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