Analysis of the Marketing Communications Campaign of FMCG Brand of Heineken - Case Study Example

Analysis of the Marketing Communications Campaign of FMCG Brand of Heineken Fast moving consumer goods (FMCG), also known as consumer packaged goods are generally those goods that are frequently required by the consumers and include both packaged and non packaged goods. Heineken Beer Brand is one of the leading FMCG brands. It is essentially a European beer brand diversified internationally. It has in its assortment more than 250 brands in around 70 different countries. As it is diversified worldwide, it faces many problems and hurdles. Despite all the problems, the strong strategy of Heineken Beer has made it to achieve its set goals. In spite of certain difficulties, it has been able to place itself as an international premium beer brand. The uncertain or certain risks faced by Heineken beer could be tackled by the market communication models like advertising and relationship communication among others. It has been identified that Heineken can make use of advertising and relationship communication models to overcome obstacles and sustain their position in the market. Table of Contents Abstract 2 Overview 4 Literature Review 5 Model Conceptualisation 7 Strategies, Marketing Position and Performance of Heineken Beer Brand 11 Evaluation of Brands Marketing Communication Campaign 13 Advice and Recommendations 14 References 16 19 Bibliography 20 Overview Fast moving consumer goods (FMCG) can be defined as the sector that includes foods as well as dairy products, wine, conventional foods, pharmaceuticals, packaged and non–packaged goods among others. FMCG is alternately also known as Consumer Packaged Goods (CPG). FMCG plays a very vital role in a country’s economy. FMCG stands as one of the largest industries in terms of the role, the market size, the tax paid to the government and the number of employees. FMCG goods are essentially consumed at usual intervals. Purchasing, selling, financing and marketing are a few of the important roles played by the FMCG industries (Economy Watch, 2010). Heineken is one of the leading fast moving consumer goods companies. To be precise, Heineken is one of the world’s leading or premium beer brands. It is a Dutch Brewing Company founded in 1864 by Alfred Heineken. It can be identified that Heineken’s story started 140 years ago in 1864 when Adrian Heineken occupied a small brewery in Amsterdam. Since then, Heineken’s four generation families expanded the brand throughout Europe and the world. Heineken’s principal brands are Heineken and Amsteel. Heineken continues to reinforce its brand through innovation in the field of marketing, packaging and production (Heineken Romania, 2007). It holds the world’s most important brand portfolios and is one of the greatest, strongest and also independent brewers. It is world’s one of the most esteemed international premium beer brands. It is available throughout the world. Heineken has over 250 brands available in 70 countries. The brand covers a strong market position for its high quality. Organizational structure of Heineken Company is very strong and decentralized. It works mainly on two brand logos i.e. Authenticity logo and Star Heineken logo. Authenticity logo signifies the brewing quality, accuracy and genuineness. Star Heineken Logo signifies about the brand’s modernity and vitality. Heineken brand is the first beer brand to hold the position of a premium lager. It has become one of the most successful export beers because of its brand image like green colour and red star (Heineken International, 2005). Literature Review Marketing communication is a medium to connect itself to the market. It can also be defined as the ways by which a supplier represents itself to the targeted market for stimulating better relationship. The market communication and its models are defined by various authors in their respective ways. According to Duncan & Moriarty (1997), marketing communications do not only depend on traditional media but also depend on the factors like product features and service encountered among others. A strong market communication gets established itself but the organisation has to work a lot for sustaining market communication aspects among the consumers. As observed by Buttle (1995), consumer activity acts as an important factor of market communication. The activities of the consumers work a lot in integration of market communication. According to him, consumers’ activities clarify their needs, tastes and requirements which can act as a base for the transparency in market communication. According to Mick & Buhl (1992), marketing communication gets effected by external factors like environmental, political, social and economical issues. According to the authors, personal interests of the consumers, their goals and ambitions and the desires of the consumer influences the marketing communication. Lindberg-Repo (2001) defined relationship communication as an important tool of marketing communication. According to the author, relationship communication refers to all the actions that convert the meaning and the message of the organisation to the customers in a very convenient way. The author further identifies that both the parties involved should have a clear communication. According to Domzal & Kernan (1992), marketing communication involves the factors like expectations and experiences of the consumers. The authors clearly mentioned that consumers’ expectations should be never neglected as the experiences and the expectations of the consumers hold an important role in market communication. As mentioned by Vakratsas & Ambler (1999), in the earlier times, marketing communication was based on transformation of message or conveying market information. This signified that marketing communication previously relied on traditional approach of the sender and the receiver. Misner (1999) utilised ‘Word-of-Mouth’ as a tool of marketing communication. Word-of-Mouth is essentially a traditional approach. People previously preferred more clarity in product knowledge, in that case, Word-of-Mouth used to be very effective and also it gradually helped in increasing the performance of the firms. Brooks (1957) recognised the benefits of Word-of-Mouth as an important factor for marketing communication. According to the author, Word-of-Mouth has a positive effect on the purchasing decision of a consumer which eventually affects the operation of the business. Kozinets (2001) regarded consumers as active co-producers of meaning and value of the goods. The author emphasized more on word-of-mouth (WOM) approach. According to him, this approach can conveniently convince the consumers. He stated that WOM also helps in building consumer networks which is again an important factor of effective marketing communication. Thus, the marketing communication and its models are described by different authors in different ways. Effective strategies and models of marketing communication assist a company to develop the products according to the consumers’ requirements which enhances the growth of the organisation. Model Conceptualisation It has been recognised from the review of various literatures that marketing communication is the way an organization represents itself and its brands to the audience. It is one of the important factors of gaining competitive advantage. Integrated marketing communication facilitates the companies or businesses to make the consumers or clients understand about them and their products. Integrated marketing communication generally helps a company to develop the products according to the consumers’ requirements. It helps in setting the product price depending on the product quality that means if the customer compares the price with the quality of the product, he/she finds it reasonable and also affordable. Marketing communication is a base of marketing that involves merchandising, marketing, advertising, selling, public relations and packaging changes. The main motive of marking communication is to increase the sales and achieve the targeted goal. It is generally the path an organization sets to deliver the message to the customers. Marketing communication has become a dynamic and important part of marketing. Organizations have to ensure effective strategy of marketing communication for efficient and effective communication with customers. Market communication also helps in designing the distribution list that builds a convenient path for the customers. Market communication enhances to understand sales management, channel management and financing which benefits a company to avoid the risks often faced by the company (Schultz, 1993). Marketing communication models essentially help to understand the assistance of communication in marketing the products. It works to develop communication strategy that further helps in creating a perception for a particular brand in the customers’ mind. Marketing communication models ensure strong and efficient communication with the organizational stakeholders. Advertisement and relationship communication models would work as the best models for market communication. Advertisement would be one of the best models of conveying information of benefits, features of a product, creating awareness and building brand image. It generates an attitude towards brand that further ensures purchasing action. Advertising campaigns ensure the creation of the consumer awareness about the products and the companies. The advertising campaigns can be divided into two stages. First one is referred as creative concept stage which is generally carried out by a company’s creative team and the second one is the brand positioning stage, the stage that is generally carried out by planning department. Advertisement is essentially a mass communication tool, important in every organisation. The main purpose of it is to provide information to the customers and persuade them to buy the products. The advertising has become an integral part for marketing communication. Advertising acts as an important tool in creating a communication link between the potential buyers and the producers. It can be observed as the efficient path of reaching people. The main objectives of advertising as a marketing model would be to ensure frequent sale, introducing product price, creating demand, enhancing brand recognition, and also increasing the market share. The company should prepare its advertising strategy in such a way that it easily distinguishes the products of company from the competitors’ products and enhances the preference of the particular brands (Buttle, 1995) Relationship communication is also an effective model of market communication. Relationship communication model is employed to essentially maintain the relation with the consumers for the smooth operation of the business. Relationship communication model includes factors like consumer research and market research (Ottum & Moore, 2003). Consumer research is used to identify the consumers’ perceptions for the product, the brand and the company, the future needs and the wants of the customers and the chances for present customers to become repeat customers. It generally helps in identification, evaluation and development of the data that helps in strengthening the relation with the current and the future customers which will ultimately ensure retention of the customers and increase the sales volume. It can also be defined as a model of market communication in which the buying behaviours, preferences, and motivations of the targeted customers are identified through telephone, direct observations, mail surveys, published surveys or face to face interviews. Generally, consumer and market research is a type of applied psychology that focuses on understanding the attitudes, preferences, and behaviour of the targeted consumers. Consumer research helps in gathering information regarding consumer wants, requirements and desires. A firm’s efficiency and effectiveness in gathering and collecting information signifies the success and the failure of a particular product (Ottum & Moore, 2003). The marketing communication models help in identifying and changing the negative impacts that the consumers have regarding a particular product. Marketing communication models ensure the modification of the products, the perceptions, the attribute priorities, and brand associations among others. Market research helps in analyzing the market scenarios and the macro-economic environment in depth. Here, analyzing market scenarios signifies analysing distribution strategies, market dynamics and supply–demand scenarios. A company undertakes market research for the evaluation of business strategies, and a product’s future potential. Moreover, the vital role played by consumer and market research in market communication is to study client’s requirements. It helps in studying business trends like pricing, long-term as well as short-term forecasting and acquisition studies (Schultz, 1993). Strategies, Marketing Position and Performance of Heineken Beer Brand FMCG brands like Heineken emphasizes more on marketing strategies, marketing communications and target audiences. Heineken utilizes the market to affect, attract, and convince the consumers to buy the products. It follows a strong strategy about the mix of product, place, promotion and price to ensure that the products are always available to the customers. The strategy prepared by Heineken for the marketing of its product is different from normal marketing design. Marketing department of a FMCG company faces a lot of problem like concentration and allocation on availability of resources and the position the department holds in comparison to other departments and functional areas. The marketing department gets adversely effected by the external factors. Heineken builds its strategy considering all the above factors (Heineken International, 2005). Heineken brand prepares and evaluates its strategies properly to identify the hurdles and the risks that can be met by it in future. Heineken works a lot in creating and developing unique features for its beer and breweries and creating consumer preferences. To adjust itself among competitors or win over them, it comes up with new theories and techniques, such as it launched beer bars at Hong Kong’s international airport in March, 2007. It goes through multiple brand strategies and produces premier brands. Heineken Beer’s expansion is mainly because of its strong multi-brand strategies. It has always used modernized marketing media and tools for strengthening the brand (Heineken International, 2005). Heineken is a beer brand that always puts efforts in brand activation and communication. It believes in continious innovation. It was the first brewer that introduced bottles and ‘can beer’. Heineken beer is finding itself convenient to come up internationally because of open markets and market potential. Heineken brand believes in involving the stakeholders effectively and frequently to carry the brand’s operations smoothly. It also maintains good relation with its employees like for their encouragement it involves them in new activities. Heineken does heavy investment in brand bonding. The brand focuses more on products’ performances, consumer insights, and making itself sustainable in a competitive environment. Heineken mitigates its increased input costs by increasing the prices of its products. Heineken brand includes many brands and it is known as the main driving force of the company (Heineken International, 2005). Heineken has achieved the rank of the largest brewer in Europe. It occupies a position among the world’s top five best selling beers. Heineken beer brands are established in mature and profitable markets and its popularity is growing regularly in upcoming beer markets of China, Russia and Latin America. Its global coverage adversely affects on license agreements, strategic partnerships, and owned companies. The key components of the strategies of Heineken Beer in areas of marketing, distribution, production, and packaging are growth and embraced innovation. The brand’s main working motto is sustainability and social responsibility. It has a wide network of breweries and distribution channels globally. In terms of profitability and sales volume, it is one of the world’s leading brewers. It has the availability of all international brewers, 125 breweries in more than 70 countries. The brand is established in profitable and mature markets. Heineken brand has proved itself to be innovative and explorative FMCG brand. Perfectly and properly controlled processes of brewing and qualitative ingredients are the key factors of the success of the Heineken Beer (Heineken International, 2005). Evaluation of Brands Marketing Communication Campaign The marketing landscape is facing constant challenges for FMCG industry all over the world. Heineken beer works on the policy of thinking globally but working locally. It is well known that the brand operates worldwide so it believes in implementing strong strategies, marketing as well as product and service strategies. Despite such strategies, Heineken brand faces frequent problems like the lack of transparent insight in its performance, a shortage of a universal equity measurement system, requirement of a benchmark of the performance of Heineken between markets. It gets affected by internal and external factors, government policies, business continuity, brand perception and decline in alcoholic demand and tax. But Heineken can overcome these by strengthening its strategy more in terms of advertisement, strengthening relation with the consumers, through consumer research and market research. Advertisement is the promotion of the brands through various media. It is considered to be highly regulated system of marketing. Heineken should do the advertising of its brand in all countries depending on the particular country’s law. Heineken brand can generate high consumption from proper advertisement. Brand campaigns can also increase market share and brand loyalty. Generally, beer or brewer companies target the teenagers in advertisements which create controversies. So, the brand should keep it in mind while advertising. It is well known that advertisement on television has become quite monotonous in style. In such cases, advertisement can be through electronic mails. It would not be wrong to say that the growth of a brand especially FMCG brands heavily rely on advertisement (Heineken International, 2005). Heineken beer can also apply relationship communication model as a model of marketing communication to enhance its growth. The brand should conduct researches to find and analyze data regarding the supply, the manufacturing, the production, and the marketing distribution methods preferred in markets and also by consumers. The brand has to notice the competitors’ coming up brands, their innovations, and the hurdles the competitors can create in the brand’s path as well as at the same time it should also very importantly value the consumers’ demands, requirements and needs. It should always focus on identifying the consumers’ wants. The brand can grow only when it satisfies the consumers properly. Relation with consumers plays a vital and very important role in marketing communication. Market and consumer research can help Heineken beer to analyze the market dynamics, distribution strategies, supply–demand scenarios. Heineken beer can utilize this model to study the business trends, forecast the long-term and short term strategies among others. Heineken beer brand believes in spreading the business worldwide. But, the government policies of different countries vary and in that case, market research can help the brand in analyzing at macro level the government policies of a country and also set the strategies of the business (IBS Case Development Centre, n.d.). Advice and Recommendations It can be well stated that Heineken beer believes more in spreading the business worldwide. In such a scenario, it needs to emphasize more on branding. The branding, brand promotions and brand extensions can assist it more on creating and maintaining strong positions in all types of market. It should imply the effective and efficient branding in the overall strategies of marketing of brewers. It should effectively utilise the models of marketing communication in order to spread the brand awareness among the global consumer segment and also to create a trusted place among their target consumer segment that can enhance its operations more smoothly. Heineken beer can rely on other factors as well to increase its sales such as price equalisation, incentive programs, forecasting, promotions, and price re-orientation among others. References Buttle, F., 1995. “Market Communication Theory”, International Journal of Advertising, Vol: 14, pp: 297-313. Brooks, R. C., 1957. “Word Of Mouth“Advertising in Selling New Products. Journal of Marketing. pp: 154-161. Duncan, T. & Moriarty, S., 1997. Driving Brand Value. McGraw-Hill. Domzal, T. & Kernan, J., 1992. Reading Advertising: The What and How of Product Meaning. Journal of Consumer Marketing Vol. 9, Iss: 3, pp: 48-64. 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