Institute of Technology Carlow, Ireland

The Comparison of the Domestic and Overseas Marketing Strategy 
of the Holsten-Pilsener, Holsten-Brewery AG Hamburg, Germany

by

 Dirk Geest 
 Michael Johnen

Table of Contents

Table of Contents 2
List of Tables 4

Section 1 - Background Information on the company 5

1.1 Size 5
1.2 Number of years in existence 5
1.3 Product range / portfolio 5
1.4 Number of markets served; overseas countries 7
1.5 Sales breakdown between domestic market and overseas markets 8
1.6 Reasons why the company internationalized 9

Section 2 - The domestic market in brief 10

2.1 Target Market 10
2.2 Positioning 11
2.3 The 4 P`s 11
2.3.1 P1 - The product 12
2.3.1.1 Product and product classification 12
2.3.1.2 Branding 12
2.3.1.3 Packaging 12
2.3.1.4 Stage of product life cycle 13
2.3.2 P2 - The Price 13
2.3.3 P3 - The place 13
2.3.3.1 Market intermediaries 13
2.3.3.2 Distribution 13
2.3.3.3 Getting products into distribution 14
2.3.4 P4 - Promotion 14
2.3.4.1 Advertising 14
2.3.4.2 Sponsoring 14
2.3.4.3 Sales promotion 15
2.3.4.4 Public relations 15
2.3.4.5 Personal selling 15
2.3.4.6 Corporate Design 15
2.3.4.7 Fairs 15
2.3.4.8 Product Placement 16

Section 3 - The Company`s International Marketing Strategy 16

3.1 The overseas international business environment (UK) 16
3.1.1 Demographic Factors 16
3.1.2 Legal Factors 17
3.1.3 Political Factors 18
3.1.4 Economic Factors 18
3.1.5 Technological Factors 19
3.1.6 Cultural Factors 19
3.1.7 Competition Factors 20
3.1.8 Social Factors 20
3.1.9 Physical Factors 21
3.2 Entry modes 21
3.3 The marketing mix in the overseas market 22
3.3.1 The Target Market 22
3.3.2 Positioning 23
3.3.3 Product 23
3.3.4 Pricing 24
3.3.5 Promotions 24
3.3.6 Place 27
3.4 Organizational structure 27

Section 4 - Conclusion 28

List of References 30

Bibliography 34

List of Tables
Table 1.1 Portfolio Holsten-Group 6
Table 1.2 Sales-overview 1998/99 8
Table 1.3 Sales of beer in segments 9
Table 2.1 Number of Breweries in Germany 11
Table 2.2 Individual beer consume Germany 11
Table 2.3 Packaging of Holsten-Pilsener 12

Section 1 - Background Information on the Company

1.1 Size

In 1999 the Holsten-Group increased its turnover by 20.1% to DEM 1907 million. This total was made up of the following sales breakdowns - 63% beer sales and 37% of non-alcoholic beverages sales (Annual Report 1999, p.21). The number of employees of Holsten worldwide amounted to 3170 at the end of 1999. This has gone up by 11% compared to the previous year. 2408 people are employed in the beer segment and 762 people are employed in the production of non-alcoholics beverages. The Holsten-Brauerei AG employes 1165 personnel and Holsten (UK) employes 56 people (Annual Report 1999, p.37).

1.2. Number of Years in Existence

The Holsten-Brauerei AG was founded in Hamburg-Altona in 1879 (www.focus.de, 23.10.2000).

1.3. Product Range/ Portfolio

The portfolio of the Holsten-Brauerei AG consists of two different elements, which involves beer-manufacturing and non-alcoholic beverages production (Annual Report 1999, p.6 introduction). It is necessary to stress in the beginning, that the trade name "Holsten Pilsener" in Germany and "Holsten Pils" in United Kingdom are one and the same product.

In 1998 the Holsten-Brauerei AG decided to change from a cut-price-seller beer to a seller of high-quality (Premium)-beer (www.welt.de, 16.10.2000). In the domestic market the top-management at Holsten continued their strategy of holding on to profitable and well-established brands ("stars") which include:"Holsten-Pilsener" and "Lübzer-Pils" and new brands were added to the companies portifolio like "Licher-Pilsener" and "König-Pilsener" . In total Holsten-Brauerei AG has a 10% market-share of the beer-market in Germany and therefore are one of the main market leaders in Germany (www.holsten.de, A. Rost, CEO, General Meeting, Hamburg, 15.06.2000).

1.4. Numbers of Markets Served: Overseas Countries

The foreign-business of Holsten-Brauerei AG consists of exporting, international partnerships and licensing agreements (Annual Report 1999, p.20). The trademark "Holsten-Pilsener" is exported in more than 80 countries (www.focus.de, 23.10.2000).

1.5. Sales Breakdown between Domestic Market and Overseas Markets

The following overview shows the world-wide sales-market of the Holsten-Brauerei AG in 1998, 1999 and its change (in percentage):

Table 1.2: Sales-overview 1998/99 (http://www.holsten.de, 17.10.2000)

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The worldwide sales of beer reached a new maximum of 9.5 million-hl (+18.3%) in 1999. The volume of non-alcoholic drinks was up by 13.1% to 10.4 million hl in 1999 also. The Holsten-Group volume of production was 26.3 million hl in total. This was an increase of 21.4% (www.holsten.de, 17.10.200).

Dividing the sales of beer into regional segments you get the following overview:

The Holsten Group foreign business rose by 7.8% to 2.1 million hl of beer in total (Annual Report 1999, p.20). In Germany Holsten sold 7.4 million hl of beer (+21.8%) in 1999. In the UK and Ireland only 0.483 million hl was sold (analyst-conference, Frankfurt 17.04.2000 & www.holsten.de, 17.10.2000). In 1999 the trademark “Holsten- Pilsener” recorded its increase of total volume by 14.5% to 1.6 million hl (Annual Report 1999, p.6).

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