Positioning of Heineken via sport sponsoring in the German beer market


Scientific Study, 2004
33 Pages, Grade: High Distinction

Excerpt

Table of contents

1. Objectives of the project

2. Heineken quality – the key to success
2.1 Heineken worldwide
2.2 Heineken in Germany

3. Overview of the German beer market

4. Heineken´s characteristics
4.1 Heineken´s core strategy
4.2 Defined target group
4.3 Differentiating the market position
4.4 Positioning strategy

5. Market approach through sports
5.3 Finding THE complementing partner
5.3.1 Borussia Dortmund
5.3.2 Synergies – advantages for Heineken and Borussia
5.3.3 Possible caveats
5.4 The way of sport sponsorship
5.5 Advertising
5.5 Budget and Timetable

6. Resumé

7. References

8. Research project

Table of figures

Figure 1: A.H. "Freddy" Heineken

Figure 2: Worldwide Beer Consumption

Figure 3: Western Europe's leading breweries

Figure 4: diagram created by author based on research project

Figure 5: diagram created by author based on research project

Figure 6: Communication process designed by author

Figure 7: Sponsorship activities and aims – diagram designed by author

Figure 8: Characteristics of THE partner / *= stadion naming rights already sold

1. Objectives of the project

Determining a possible market entry strategy for one of the world’s leading breweries in the internationally neglected German beer market is a challenging task. Being a potential member of Heineken’s main target group and having experienced the world-wide availability of the “green bottles with the red star” myself, I was immediately attracted to this challenge. Also linking sport and beer and the unique way of positioning, connecting and advertising the brand through sponsorship agreements seems to be an interesting and promising form of addressing the market.

In the first part of this project the peculiarities of the German beer market and the Dutch company Heineken are presented. Secondly, the main characteristics of Heineken’s market approach, its core strategy, the main target group and positioning are analysed. The central part of this paper discusses a market entry via sport sponsoring as well as potential ‘Bundesliga-partners’. Apart from advantages and disadvantages of sport sponsoring, possible synergy effects and ways of how to effectively run a sponsorship campaign are highlighted.

To gain a better understanding of young Germans´ perception about beer in general and Heineken in particular, an online survey was run on the internet for five weeks. This marketing project is to some extent based on the outcomes of the survey and evaluates possible ways of how to best address the German beer market.

2. Heineken quality – the key to success

In 1864, the largest brewery on the Dutch market „The Haystack“ was purchased by Gerard Adriaan Heineken, who dedicated his life to provide the best beer quality on the market. Nine years later Heineken’s Bierbrouwerij Maatschappij N.V. was founded, which today is known as Heineken[1]. The brewery always was and still is a family owned business. Heineken’s grandson, Alfred Henry Heineken, became a major incluence within the company and was known as the pioneer of marketing[2]. It was his design of the logo with

illustration not visible in this excerpt

Figure 1: A.H. "Freddy" Heineken[3]

the smiling “e” along with the red star, for which Heineken is famous for all over the world. Alfred Heineken created a new market for high quality premium beer, which may be expensive but also to relied on and - most importantly - internationally distributed in more than 170 countries worldwide[4]. Quality therefore is the key to Heineken’s success:

´Brewing Heineken takes the genuine recipe, the very best ingredients, craftsmanship and patience. Likewise, building the Heineken company takes a consistent strategy, quality in everything you do, the right people and patience.` [5]

2.1 Heineken worldwide

International distribution has been one of Heineken’s main issues right from the beginning. Since the 1870s, Heineken beer was exported to neighbour countries like the UK and France. By now the two main international brands – Heineken, a leader in the premium segment, and Amstel, positioned in the mainstream segment – are to be found in more than 170 countries worldwide[6].

Heineken is the most international and third biggest brewery in the world behind Anheuser-Buch (USA) and Interbrew/Bass (Belgium). The company is currently planning to expand further into existing, challenging markets like South-American, Asian and especially Russian[7]. As for entering the difficult German market, Heineken will take its time, because currently the Asian market seems a lot more attractive than the stagnating German one[8].

2.2 Heineken in Germany

So far Heineken has not been able to establish its brands in Germany, but through the recent Joint Venture with the Bavarian Schörghuber brewing group the company expects to place Premium Heineken beer in the Southern parts of Germany and continuing to expand further on[9]. Additionally, taking up the chance to export the Schörghuber’s well-known Paulaner beer through the Heineken sales- and distribution network seems to be promising and makes this deal worthwhile[10]. Last month, in October 2004, Heineken acquired the Fürstlich Fürstenbergische brewery, which is located in the South-West of Germany[11]. This is another clear indication for an active market approach. Currently the company is thinking about the best way to place Premium Heineken beer in the German market[12].

3. Overview of the German beer market

Considered the biggest, most regionally fragmented market in the world, the German beer market consists of over 1,200 breweries, producing more than 5,000 different brands of beer. In contrast to the US, Germany does not have big national brewing groups but is dominated by mainly small, family-owned businesses[13]. On average Germans drink about 125 litres of beer each year. Together with the Irish, who have only 7 main breweries in their home market, Germany is the leader in beer consumption[14].

illustration not visible in this excerpt

Figure 2: Worldwide Beer Consumption[15]

Beer drinkers in Germany are extremely loyal to their favourite brand and often it is consumed only within the region it is brewed, which makes it difficult for foreign companies to enter the market[16]. In addition to this the beer purity law (Reinheitsgebot) specifies exactly which ingredients can be used for brewing beer in Germany – beer has to contain nothing else but water, barley, hops and yeast[17]. Although imports of foreign brands with additives have been allowed for a couple of years, it is rather difficult for them to compete in the German market.

Three quarters of the breweries in the EU are German but domestic consumption has been constantly declining throughout the last decade[18]. This means that due to overcapacity many breweries are thought to operate at a loss[19]. As a result of this phenomenon companies will either merge in the future or they will eventually see the effects of globalisation. More concentration is needed to get international companies to invest in the German market. International giants like Interbrew, who have invested in Becks and Diebels for instance, try to acquire the best German brands to promote internationally[20].

illustration not visible in this excerpt

Figure 3: Western Europe's leading breweries

4. Heineken´s characteristics

4.1 Heineken´s core strategy

The marketing communication activities for Heineken are based on the fixed core values of the company, which are passion for quality, green, worldly wise and respect[21]. Being known as the imported beer in the US and due to its availability in nearly all parts of the world Heineken has positioned its products in a market segment which can be described as highly qualitative, international, reliable, dynamic and somehow special – all this for a fairly high price[22].

In order to be successful in Germany as well, these attributes have to be placed into peoples’ minds by promoting the international flair and speciality factor to differ from all the competitors[23].

4.2 Defined target group

Heineken products are mainly addressed towards young, innovative, sporty people between 18 and 35 years of age, who are supposed to introduce Heineken in or combine it with their favourite activities, mainly sport-events, music festivals, parties and clubbing[24]. Through speciality beers like white beer Wieckse Witte, the traditional Belgian abbey beer Affligem, the well known Murphy´s brand and to the most the party-beer Desperados, Heineken placed its products into certain “scene areas”.

4.3 Differentiating the market position

Heineken offers an almost unique feature to all its consumers: wherever they are, whenever they like to enjoy their favourite brand, they will have no difficulties obtaining it. Reliability and innovation are of significant importance, because Heineken products are usually more expensive than local beers. But through various events and a positive “fun-image”, customers are attracted and get the feeling of being important, enjoying life and belonging together as a group – and for all this they are willing to pay extra[25].

This special image of Heineken was created by Alfred Heineken himself, who invented the green bottle with the red star and the smiling “e” to achieve instant recognition of the brand all over the world. Those symbols are by now an indication of success, quality, great performance and style[26]. The “offering more for more” strategy has been working out for a long time and seems to be promising for the future, too.

4.4 Positioning strategy

Positioning is not what you do to a product. It is mainly important what you do to the mind of the customers. This means, you position the brand Heineken in the mind of the prospect[27]. “The basic approach of positioning is not to create something new and different. But to manipulate what´s already up there in the mind. To retie the connections that already exist.”[28]

Currently Heineken is competing against Interbrew (Beglium) for the second position behind Anheuser-Busch (USA) in the rankings of the biggest breweries in the world[29]. Therefore it does a lot to strengthen its current position; the company is constantly growing and especially trendy brands and leading regional breweries are to be taken over or invested in whenever possible[30]. That’s how Heineken came to Desperados for instance.

A lot of Heineken sponsoring is done in sports. Tennis and Golf in Europe as well as Rugby in Australia represent their favourite national sports. Additionally, these kinds of sport stand for a powerful, young, active and clever attitude – just like Heineken wants to have itself characterised[31]. One prime objective of all sponsoring is to heighten consumers´ expectations. By creating the illusion that the product will perform the miracles expected, people get attracted and can identify with the product. And then those promises come true…[32].

In Germany there would be various opportunities for achieving high brand recognition: Sponsoring a German soccer team out of the Bundesliga, which is performing in an attractive style and expressing great future expectations (Heineken’s philosophy), will surely make Heineken enter huge stadiums packed with young people[33]. This is the way the Dutch brewery entered the tennis line of business, sponsoring great events like the Davis Cup, the US and Australian Open[34]. Another example of how Heineken succeeded in addressing young people was during the Olympics 2000 in Sydney. The Holland Heineken House (HHH) at Darling Harbour was originally created as a meeting place for Dutch athletes and their visitors – but from the first day on it developed into a highly popular, multifunctional centre with over 10,000 visitors daily[35]. Considered the “hottest place in town” the HHH became the biggest party place outside Olympic Park and Heineken achieved remarkable attention. In 2006 the next international highlight is coming up in Germany, the Soccer World Cup, where the HHH will probably show up in similar style again…

But of course sports is just one example of a possible future market for Heineken in Germany. A different one could be the Internet, as well a young, modern and promising area. Heineken was the first brewery designing a virtual 24 hours club on the internet, where free tickets are given out, music is playing and people can seek information about the best parties in town[36]. Continuous changes of the site from a café-lounge to a nightclub for example make it possible to feel comfortable whenever visiting the club[37]. Amusing TV commercials could also have a big impact on German teenagers. With provocative contents like “sex and humour” Heineken’s message sticks in peoples’ minds[38]. In the future advertisement in English could be broadcasted, supporting the internationality of the brand and the effect of making the main target group feel special, smart and exclusively addressed[39].

[...]


[1] Heineken Online. Internet http://www.heinekencorp.com - History

[2] Clausen, S.: Tod des Brauerei-Gründers begründet bei Heineken neue Ära. Financial Times Deutschland. Munich. 07.01.2002. http://www.ftd.de/ub/in/8295948.html

[3] cf. Heineken Online. Internet http://www.heinekencorp.com - History

[4] cf. Clausen, S.: loc. cit.

[5] Heineken, Alfred: Motto

[6] cf. Heineken Online.: loc. cit.

[7] Mergers & Acquisitions. http://www.mergers-and-acquisitions.de/fakten2180.htm

[8] cf. Clausen, S.: Heineken bremst Expansion in Deutschland. Financial Times Deutschland. Amsterdam. 28.02.2002. http://www.ftd.de/ub/in/1014398836438.html

[9] Baulig C. & Clausen, S.: Heineken – Grüne Invasion. Financial Times Deutschland. Hamburg & Munich. 27.02.2001. http://www.ftd.de/ub/in/1066958.html

[10] cf. Real Beer Page. Beer News: Heineken moves into German market. 22.02.2001. http://www.realbeer.com/news/articles/news-001466.html

[11] cf. Heineken Online. www.heinekeninternational.com

[13] Retrieved on 5th October 2004 online in the Internet http://www.tastings.com/beer/germany.html

[14] Deutscher Brauerbund. http://www.brauer-bund.de/brauereien/statistik/einwohn.htm

[15] Retrieved on 5th October 2004 online in the Internet http://www.biersekte.de

[16] Retrieved on 5th October 2004 online in the Internet http://www.edge.org/3rd_culture/diamond_rich/rich_p9.html

[17] ibid.

[18] Deutscher Brauerbund. http://www.brauer-bund.de/brauereien/statistik/zahl.htm

[19] Retrieved on 5th October 2004 online in the Internet http://www.germanyspellsbusiness.com/webs/mittelstand3/mittelstand3854.shtml

[20] ibid.

[21] cf. Heineken Online. loc. cit.

[22] Kotler, Ph. et al.: Principles of Marketing. 2nd European Edition. Prentice Hall Europe. London et al. 1999. p.370

[23] Porter, Michael E.: Wettbewerbsvorteile. Sonderausgabe. Frankfurt & New York. 1989. p.19

[24] cf. Heineken Online. loc. cit.

[25] cf. Porter, Michael E.: loc. cit. p.165

[26] cf. Heineken Online. loc. cit.

[27] cf. Ries, A. & Trout, J.: Positioning: The Battle for Your Mind. McGraw-Hill Book Company. New York. 1981. p.3

[28] ibid. p.5

[29] cf. Mergers and Acquisitions. loc. cit.

[30] cf. Kotler, Ph. et al.: Principles of marketing. loc. cit. pp.369 et seq.

[31] cf. Heineken Online. loc.cit.

[32] cf. Ries, A. & Trout, J. pp. 33

[33] Borussia Mönchengladbach. http://www.borussia.de/aktuelles/detail.php

[34] cf. Heineken Online. loc. cit.

[35] ibid.

[36] cf. Büchin, A.: Right Beer, right now. Die Welt. Berlin. 2001

[37] ibid.

[38] cf. Heineken Online. loc. cit.

[39] Advertisement in English is rarely found on German television. Only some slogans of international companies are kept in English, the main part of the ads is nearly always translated into German.

Excerpt out of 33 pages

Details

Title
Positioning of Heineken via sport sponsoring in the German beer market
College
University of Technology, Sydney  (School of Leisure, Sport and Tourism)
Course
Sports Marketing
Grade
High Distinction
Author
Year
2004
Pages
33
Catalog Number
V88714
ISBN (eBook)
9783638040778
ISBN (Book)
9783638937702
File size
801 KB
Language
English
Tags
Positioning, Heineken, German, Sports, Marketing, Sponsorship, Sponsoring, Sport Sponsoring, Sport, Bier
Quote paper
Master of Sports Management (MM Sportmgt) Nico Schulenkorf (Author), 2004, Positioning of Heineken via sport sponsoring in the German beer market, Munich, GRIN Verlag, https://www.grin.com/document/88714

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