Impact of demographics and cultural influence on beer consumer choice in Thailand

Singha/Heineken-Thailand

Exploring the Impact of Demographics and the Cultural Influence on Consumers' Choice of Beer in Thailand: Heineken & Singha

The Kingdom of Thailand is well situated to become an increasingly competitive member of the international community in the years to come, and the Thai people will likely experience the same type of burgeoning middle class that is taking place in China today. In this environment, identifying new opportunities for marketing are particularly relevant and important, and this is certainly the case with world-class beer manufacturers seeking to establish a significant market share in Thailand. To this end, this paper provides review of the peer-reviewed, scholarly and organizational relevant literature concerning the beer market in Thailand in general with a specific focus on the two world-class brands, Heineken and Singha. An analysis of the kingdom's current demographic composition and a discussion of ongoing marketing approaches to the Thai market by Singha and Heineken are provided to identify any potential significant relationships concerning Thai consumers' choice of beer. A summary and the research findings and strategic recommendations for both brands are provided in the conclusion.

Review and Discussion

Current Demographic Composition of Thailand.

The current demographic make-up of Thailand is provided in Table 1 below.

Table 1.

Key current demographic metrics for Thailand.

Metric

Statistics

Population:

65,068,149 (July 2007 est.)

Age structure:

0-14 years:

21.6% (male 7,195,750/female 6,870,858)

15-64 years:

70.1% (male 22,547,238/female 23,092,881)

65 years and over: 8.2% (male 2,437,640/female 2,923,782) (2007 est.)

Median age:

32.4 years male:

31.6 years female: 33.2 years (2007 est.)

Population growth rate:

0.663% (2007 est.)

Birth rate:

13.73 births/1,000 population (2007 est.)

Death rate:

7.1 deaths/1,000 population (2007 est.)

Net migration rate:

migrant(s)/1,000 population (2007 est.)

Sex ratio:

at birth: 1.05 male(s)/female under 15 years: 1.047 male(s)/female

15-64 years: 0.976 male(s)/female

65 years and over: 0.834 male(s)/female total population: 0.979 male(s)/female (2007 est.)

GDP - per capita (PPP):

8,000 (2007 est.)

Unemployment rate

1.7% (2007 est.)

Source: Thailand, U.S. Government, CIA World Factbook, 2008.

As can be seen from the age distribution in Table 1 above, the median age of the Thai people is just over 32 years old, with roughly equal distributions between men and women across all age groups. This demographic distribution, together with its steamy, tropical year-round climate, makes the Kingdom of Thailand a beer-marketer's dream come true if they are careful to take some important cultural considerations into account, and these issues are discussed further below.

Marketing Initiatives by Singha.

The progressive emergence of hybrid brand positioning strategies in the beer market in recent years in Thailand has reflected the same forces fueling globalization throughout the Southeast Asian marketplace (Andrews, Chompusri & Obe, 2003). These have been facilitated by the explosion of Internet-based global pricing capability among the larger multinational corporations; improvements in computer-based applications have allowed beer manufacturers such as Heineken to improve their information bases with regard to currency changes, international tax adjustments, and transparent cross-cultural differences in price elasticity, thereby increasing the ease with which regional markets can be segmented (Andrews et al., 2003).

The Asian monetary crisis that was largely precipitated by the plummet of the Thai baht during the late 1990s had some interesting effects on the marketers at Singha as well as the Thai beer-consuming public. Despite the increasingly cosmopolitan nature of Bangkok, for example, Indigenous marketing managers reemphasized the need to have their own materials tailored by the domestic subsidiary for the domestic consumer. They were encouraged by the partial retreat into nationalism following the regional crisis of 1997, which in many cases found expression in anti-Western sentiment via a whole host of local actions. We may note here the push to repaint English-language billboards with only locally scripted messages in the various regional domestic markets. At the same juncture, Thailand's Boonrawd brewery developed the slogan,'My country, my beer' to advertise its locally produced number one seller, Singha" (emphasis added) (Andrews et al., 2003, p. 268).

In his recent article, "Vijay Hopes He Can Still Throw it Away," Sale (2006) reports that international golf legend Vijay Singh has entered into a long-term contract with Singha beer to promote the brand by throwing a Singha branded, gold-colored golf ball into the crowd located in stands around the 18th green at Hoylake golf course; the lucky fan who catches Singh's golf ball wins a week's all expenses paid holiday in Thailand (Sale, 2006). According to this author, "The free holiday prize, based around Bangkok and Phuket, is part of a sponsorship arrangement that the golfer has with Thailand's Singha beer, which is being promoted around the globe and is also being supported by Singh's clubmakers Cleveland" (Sale, 2006, p. 91). These marketing activities have provided Singha with some very high profile media exposure. In this regard, Sale adds that, "Singh has already completed the golf ball stunt at the U.S. Open and the Western Open in America, and the contract requires him to repeat it at every big golf event he plays in" (2006, p. 91).

Marketing Initiatives by Heineken.

In its distinctive green glass bottle, Dutch-made Heineken represents a stark contrast to the brown-glass Singha, and Thai consumers will undoubtedly recognize the difference in taste immediately between these two beers. Given its distinctive flavor, Heineken may or may not appeal to Thai consumers who are accustomed to the more mellow flavor of their national favorite, Singha, but both are high-quality products that appeal to a wide range of consumers around the world. Nevertheless, the Heineken brand has gained popularity by being promoted as a status symbol of sorts, being a high-quality import that is appealing to the country's growing middle class. According to the company's Web site, "Heineken has wide international presence through a global network of distributors and breweries. Heineken owns and manages one of the world's leading portfolios of beer brands and is one of the world's leading brewers in terms of sales volume and profitability. Our principal international brands are Heineken and Amstel, but the group brews and sells more than 170 international premium, regional, local and specialty beers" (the world's most international brewer, 2008, p. 1).

Given its extensive global experience and expertise, Heineken's presence in Thailand today represents a continuation of its global strategy and it would appear reasonable to conclude that local managers for the company would appreciate the need for careful consideration of cultural issues that might adversely impact their marketing initiatives. As Andrews and his colleagues point out, "Where multinational corporations have sought to produce standardized advertising campaigns for the entire region, they are having to tread extremely carefully... depending on culture and the state of each country's development" (p. 269). The company's Web site reports that its key focus is "on driving the growth of our brands and improving our financial performance on ensuring that acquisitions, partnerships and distribution strategies create value" (Company & strategy, 2008, p. 1). Heineken, though, has been linked with a recent political scandal in Thailand involving their country's prime minister (PM). According to Ramos (2006), "The latest threat to PM Thaksin is the projected boycott of nearly 100 products linked to the Shinawatra family, which include top international brands such as Toyota, Heineken, Nescafe, and 711 convenience stores. This new tactic to force out PM Thaksin came even as protesters announced they would maintain their massive rallies around the Government House without let-up" (p. 3).

Conclusion