Heineken Premium Lager Beer Evaluation from a Marketing Mix

Perspective

Product Evaluation

This is Heineken’s regular beer which is the same as the original Heineken
started with. Its mildly bitter taste, fresh, fruity aroma, bright colour and
exceptional clarity are obtained using only the purest water, hops and barley
malt. Alcohol: 5% vol.

Under the product evaluation in Malaysia, Heineken Beer is the No.1 selling
product in its segment (premium) compared to other brands available in
Malaysia. To maintain the quality standards, GAB as brewer always emphasis on
good quality raw material. Since the product falls under high premium brands,
GAB always maintain the consistency of the quality it’s brewed in
Malaysia.Heineken Beer always tastes fresh due to good quality and well
developed distribution network by GAB. The hangover due to heavy consumption
is very mild makes the product among favourites for working professionals and
youngsters who enjoy drinking sensation.

Heineken Premium Beer (Figure 4) can be evaluated based on attributes,

packaging and branding. Heineken Premium Beer is the only product available in
the beer segments for Heineken family in Malaysia. This product has no line
extension or variants for consumers to select.
 Figure 4: Current Heineken Premium Beer packaging

Heineken Lager Beer taste has remained the same till to date despite indications
of stagnant market share and brand switching. This is referred as a maturity
stage in a product life cycle (figure 5). Heineken Malaysia should introduce
another line extension in light segment with differentiated taste and drinking
sensation to capture new markets from its competitors.

Figure 5: Product Life Cycle

(Source: - Kotler, 2009, p.324)

Heineken Premium Beer packaging has also remained the same for the past 5 to
6 years. It is deemed not appealing to the young and stylish crowd. It is important
that Heineken Malaysia introduce or rebrand their packaging concept to attract
the new generation. This is in tandem with the style and fad trend for any product
offered which would diminish over a period of time. (Figure 6)

Figure 6: Fashion & Fads

(Source: - Kotler, 2007, p.458)

Heineken Premium Beer needs to increase its brand equity activities (Figure 7)
especially on awareness, preference, image & personality.

Pricing Evaluation
Figure 7: Brand Equities Dimensions
 Internal Factors External Factors
Marketing Objectives The Market & demand
Pricing Competitors price and
Marketing mix strategy
decision offers
Costs
s Other external factors
Organizations
considerations

Figure 8: Pricing decision factors

(Source: - Kotler, 2007, p.480)

Product pricing decision for Heineken Premium Beer can be evaluated by

internal and external factors as illustrated above (figure 8). Heineken Premium
Beer is positioned under product quality leadership as a premium product within
Premium category with Budweiser, Foster & Hoegaarden (figure 9).

Quality

Low High

Low Economy Penetration

Price
Premium
High Skimming Heineken
Budweiser
Foster
Hoegaarden

Figure 9: Pricing Strategy Matrix

The beer industry in Malaysia falls under oligopolistic competition market.
The pricing approach is based on “Competition Based Pricing” which will be
agreed collectively by the 2 key market leaders (figure 10 below).

Manufacturer Product *RRP (RM) for

320 ml can *
based on average
pricing found at 7
Eleven stores.

Carlsberg Budweiser 8.50

Carlsberg Foster 8.50
Guinness Anchor Berhad Heineken 8.50

Figure 10: Competitors Pricing

In Marketing Mix Pricing strategies, Heineken uses

• Product Line Pricing i.e. 325 ml can (RM8.50)

• Product Bundle Pricing; a carton of beer (24 cans of 325 ml) are
being sold cheaper i.e. RM 155.75 at major hypermarkets
• Price Adjustment Strategies via

o Discounted pricing of 3-5% via Functional/Trade Discount for

retailers & whole sellers
o Discounted pricing for staff which is similar to retailers pricing
o Geographical pricing of 50% less for Duty Free Zone ( i.e.
Langkawi and Labuan )

Heineken had only initiated two Functional/Trade Discount activities compared to

competitors who had at least five or more activities. Therefore it is vital to
increase pricing adjustment strategies to penetrate premium segment.
Promotions Evaluation

One of the most important components for beer promotion used to be through
advertisement and sponsorship. Heineken sponsorship is for the Chelsea
Malaysia Tour football competition, 007 James Bond movie sponsor for local
screening, Astromasters Golf competition, Rainforest World Music Festival
Sarawak, TGI Fridays Fathers Day promotion and other local pubs and club joint
promotion as shown in Figure 11 & 12.

Heineken Malaysia is deeply committed to promoting responsible consumption.

While Heineken’s does not provide medical advice, nor attempt to advise
individuals on important and complex medical issues, the Company is committed
to ensuring that consumers access the best available information regarding
alcohol and their health.Steeping into Men’s Fashion apparels collections for
better brand visibility. Aggressive advertising at Outlets & Pubs. Recently it also
started merchandizing sports goods and trendy clothing and accessories under
Heineken brand name.
Figure 11: Among the advertisement and sponsorship by Heineken Malaysia.
Figure 12: Heineken is a major sponsor of the Rainforest World Music Festival
Sarawak

Since beer drinking is a major religion, public and social health issue in Malaysia,
the Government has imposed many restrictions on Promotions mainly
advertisement & sponsorship control.

Heineken beer promotions only focuses on Personal selling, Sales promotion

and Public relations. Personal selling activities are commonly carried out in
entertainment outlets in metropolitan areas, using young and attractive ladies
(Figure 13).
 Figure 13: Personal Selling Promoters

Sales promotions are via Trade Promotions (for retailers) and the payment terms
are rigid and conducted via Cash on Delivery (COD) only which does not allow
traders to stock up.

GAB projects an image of corporate leader by sponsoring Chinese children’s

education (Dragon Mission Project) and providing financial aid for natural
disaster victims such Tsunami victim at Banda Aceh as part of their Public
Relations Activities (Figure 14). This shows that it does not only focus on profit
reaping but more of a corporate social responsibility champion who does more by
giving back to the society.
 GUINNESS Anchor Berhad (GAB) raised a whopping RM2.788 million in just
seven weeks with the participation of coffee shops, restaurants, entertainment
outlets and hypermarkets nationwide for it Dragon Mission project. The project
involves the community to raise funds for the development of Chinese education.

In Malaysia, Guinness Anchor Berhad donated RM200, 000 to The Star Fund to
provide aid for the tsunami victims.

Figure 14: Public Relation Activities for GAB

(Source: GAB Malaysia, 2009)

Placement Evaluation
GAB which brewed and market Heineken locally made it available throughout
Malaysia, and is dominant particularly in urban and metropolitan area. Apart from
that Heineken as a brand also has a presence in 60 countries. It also has some
one hundred shops apart from pubs and bars. Better retailing outlets are also to
be opened under the Heineken brand. Heineken also has tie-ups with large
department stores like ‘Foodworld’ for retailing its Beers. Heineken also has
association with number of Very Classy, Up-market & Stylish bars & lounges
which goes hand in hand with its brand image.

In Malaysia, GAB is using channel management, logistic management and

demand management. In channel management, our analysis shows that
Heineken Lager Beer is marketed in urban areas. The Mini Fridge as display unit
at the retailers is perceived as “outdated” and focuses more on the single product
only. (Figure 15).

Figure 15: Heineken Mini Fridge Display unit

Based on Channel design decision model (Figure 16), intensive distribution

method is being used. Currently GAB has captured 7-eleven outlets nationwide,
hypermarkets i.e. GIANT and Cold Storage.
This shows that the distribution market for GAB is wide and comprehensive but
they do not leverage on this by distributing Heineken Lager Beer throughout the
channel. It is also noted that Heineken Lager Beer is not focus in the Hotel,
Restaurant and Café (HORECA) segment. Currently the HORECA patrons are
youth where it is monopolised mostly by Carlsberg (65 %).
(Sourced: SMI Magazine Report report 2009)

Intensive Selective Exclusive

Distribution Distribution Distribution

Figure 16 : Channel Design Decision

Model (Figure 7.2)
(Source: - Kotler, 2007, p.555)

In logistic management, hybrid marketing channel networks (Figure 17) with few
Centre of Excellence (COE) distribution points through out the country being
R
adopted. The distribution centres are located
Dist at the designated
R marketM –segments
Manufacturer
R
namely north, central, south and east.North Dist – Distributer

R - Retailer
R
Dist R
M R
Central

R
Dist R
R
East

R
Dist R
R
South
Figure 17: Hybrid marketing Channel Networks Model

(Source: - Kotler, 2007, p.554)

Demand management currently is based on monitoring done by sales

representative. This is extremely crucial as GAB would need to avoid Out Of
Stock (OOS) situation where consumer switches to another brand due to
unavailability of Heineken Lager Beer in places where the product is well
established.