Strategic Marketing Plan Angostura LTD Related Company

¶ … strategic marketing plan ANGOSTURA LTD related company ( alcohol related). identifing incorporating marketing objective. Use format: SITUATIONAL ANALYSIS -Introduction -Company background -Vision -Mission (analyse) -Corporate objectives (financial & financial) -Portfolio analysis BCG show SBU -For SBU selected state critical success factors, unique resources & core competences give a competitive advantage INDUSTRY & ENVIRONMENT ANALYSIS -pestle implications -SPICC a table -7S's a table -7P's a table -Key drivers change -sector trends COMPETITOR ANALYSIS -Porters forces -Identify major competitors, analyse including strategies -Customer analysis competitor -Portfolio analysis competitor -Company's SWOT -Two major competitor's SWOT PRODUCT / MARKET FOCUS -Marketing & Product Objectives, SMART objectives -Target Market -Segmentation -differentiation -positioning MARKETING PROGRAMME -Include marketing mix, financial data projections (past current sales revenue 3-year forcast (budget) showing sales, gross operating profit) -Option Ansoff growth strategy (choice & ) 2 strategies needed, market penetration objective -Promotional Gantt chart -Assumptions & Contengencies -Control.

Strategic marketing plan for Heineken International

1. Situational analysis

1.1. Introduction

In the context of the internationalized economic crisis, the investors often come to place more emphasis on alcohol beverages manufacturers, since these tend to remain consistent in sales and demand registered by the public. Still, the downside to investing in this industry sector is represented by the fact that the industry is rather mature, with limited opportunities for growth and development (Dukcevich, 2001).

In the case of Heineken International however, the company still has the ability to further expand within other markets, namely the emergent economies in Asia, Latin America or India (Clark, 2011). The organization's presence in these regions is currently decreased, yet an increase can be supported by the raising consumer power in these regions. In such a setting, it is now useful to assess this new opportunity for development within the emergent markets.

1.2. Company background

Heineken International was established in 1864 in Amsterdam, the initial brewery having since then been transformed into a museum. Heineken today employs over 60,000 individuals worldwide and is the third largest brewing company after Anheuser-Busch InBev and SABMiller.

Currently, Heineken International remains headquartered in the Netherlands, and conducts most of its brewing in the Zoeterwoude, 's-Hertogenbosch and Wijlre breweries. Throughout the past recent years, despite the economic downturn, Heineken International has been registering increasing revenues (ascendant path from 11,245 million euros in 2007 to 17,123 million euros in 2011); its net profitability however slightly decreased in 2011 relative to 2010, from 1,447 million euros to 1,430 million euros (Website of Heineken International, 2011).

1.3. Mission and vision

The mission and vision at Heineken International revolve around transparency and communication and they refer to the attainment of the business objectives through the satisfaction of the needs and wants of the various stakeholder categories.

"Heineken's core values -- respect, enjoyment and a passion for quality -- help define our corporate culture and working methods. They are fundamental to the way in which we do business today; they support our drive towards economic, environmental and social sustainability. These three dimensions are strategically important for the long-term success of Heineken" (Website of the Heineken International Website, 2012).

1.4. Corporate objectives

The overall objective of Heineken International is that of "winning in all markets with Heineken® and with a full brand portfolio in markets where we choose" (Website of Heineken International, 2012). In order to attain this great objective, the company emphasizes on accomplishing the following five smaller goals:

Increasing the Heineken brand

The creation of leadership through customer inspired decisions, orientation on the customers and brand leadership

The capturing of the opportunities within the emerging markets

Leveraging the benefits of Heineken at the global scale, and last

Driving personal leadership (Website of Heineken International, 2012).

1.5. Portfolio analysis

Heineken International currently produces and sells over 170 beer products, making a portfolio analysis rather difficult to conduct. In such a setting then, the BCG matrix would best be comprised of the portfolio investments, rather than the actual product categories.

Stars

Asia Pacific

Question marks

Africa

Cows

Europe

Dogs

United States

The Asia Pacific region is an emergent economy, where people are beginning to sense an increase in their purchase power and their demand levels also increase. In such a setting, Heineken could register increases if it focused on the SBU of development in Asia. Within Europe, the revenues of Heineken are rather stable as the market place is stable and mature; there are limited opportunities for growth in this area, but it does reveal the main advantage of requiring little new investments and generating stable and sustainable revenues.

The question mark investments are represented by African endeavors, which could either succeed or fail. The African market place could, at this point, respond to the organizational efforts either in a positive, or in a negative manner. Last, the dog portfolio investments are present within the United States of America, where the market is also stable and secure, and the prospects for further development are limited. Normally, the dog investments would be considered for divestiture (Net MBA, 2010).

1.6. Analysis of the strategic business unit

Heineken International has first launched operations in Asia Pacific over seven decades ago, and since then, it has strived to further expand and consolidate its position within the region. The strategies within this business unit have included gradual acquisitions of local breweries, as well as marketing efforts to promote the company's brand and products. The organization has entered joint ventures with Fraser and Neave within the Asia Pacific and the Pacific Islands, and has also entered a joint venture with United Breweries Limited in India. Additionally, increased emphasis has also fallen on the export and licensing of items in Asia Pacific (Website of Heineken International, 2012).

At a financial level, the operations in the Asia Pacific region have been following an ascendant trend, despite the decrease in the corporation's overall profitability. In 2011 relative to 2010 for instance, the beer volume increased by 8.9 per cent and the regional operating profit margin increased from 22.1 per cent to 29.9 per cent (Website of Heineken International, 2012).

2. Industry and environment analysis

2.1. PESTLE implications

Given that it operates within the global market place, Heineken International is directly impacted by the general state of the economy. More specifically, the internationalized economic crisis has shown its impacts on the company by generating a decrease it is 2011 profitability. Still, at the economic level, it must also be noted that the company is influenced by the different stages of economic development in the regions in which it operates. In the United States and Europe for instance, where the economies are developed and mature, the growth opportunities are decreased; in Asia however, where the economies are emergent, Heineken International is presented with more opportunities for growth and development.

Still, Heineken International is severely impacted by other features in the external environment. At the political level for instance, the Dutch brewery is impacted by the vast taxation implemented by governments on the alcoholic beverages (Oliver and Colicchio, 2011). Then, at the social level, it is impacted by changes in the beer consumption patters, such as the preference for beer over wine (and vice versa), as well as the increasing rate of beer consumption among women (Moore, 2009).

At the technological level, the implications include the rapidly evolving technology, which allows the company opportunities to improve productivity and efficiency, but also further increases competition and resource consumption. At the legal level, implications arise from the international feature of the business, forcing Heineken International to comply with the laws and regulations issued by multiple parties. Finally, at the ecologic level, implications are observed in the increasing pressure towards environmental responsibility, such as demands for lower pollution levels.

2.2. SPICC

1. Suppliers

Various and the supplier strategy is that of cooperation and mutually beneficial development; the company has devised a Heineken Supplier Code (Website of Heineken International, 2012)

2. Publics

Globe wide and is interested in not just the products, but also the strategic endeavors

3. Intermediaries

The company brews its own beverages, yet it uses intermediaries for retail in the various markets and also for marketing operations (Lamb, Hair and McDaniel, 2008)

4. Customers and markets

Belonging to various demographic groups

European market is the most powerful, while the Asian market is the most promising in the future

5. Competition

Mostly from industry leaders Anheuser-Busch InBev and SABMiller; local breweries pose little competition

2.3. The 7 S's

1. Strategy

Going green, meaning the operation in a more environmentally responsible manner, through three strategic commitments

Continuously improving the Heineken brand and business impact on the environment

Empowering the Heineken employees and the communities in which the firm operates, and last

- Increasing the positive role of beer within the society (Website of Heineken International, 2012)

2. Structure

Complex and multileveled, organized around a vertical integration of the command chains (See chart below the table)

3. Staff

64,252 employees worldwide (Website of Heineken International, 2012)

The company strives to integrate the employees in the attainment of the business objectives and the emphasis falls on employee safety, health, development, human right and general well-being (Website of Heineken International, 2012)

4. Systems

Multiple and focused primarily on management and control, including risk management (Heineken 2011 Annual Report), but also on automation and innovation

5. Style

Has evolved from an old style, of vertical integration and top-down decision making into one of communications, integration and cooperation

6. Skills

Vast experience within the brewing industry; increased presence within the global market place and strong brand

7. Shared values

Three sets of values, as follows:

Commitment to high quality

Enjoyment in life and in operations

Respect for the individuals and the society (Website of Heineken International, 2012)

Chart 1: The organizational structure of Heineken

Source: Identity Hi, 2010

2.4. The 7 P's

1. Product

Over 170 types of beer products, out of which the most popular in the Heineken beer; the items are diverse in terms of flavor, strengths and accessibility

2. Place

The Heineken beers are usually distributed through intermediaries and can be found in locations such as grocery stores or restaurants

3. Price

The pricing strategy is normally the variable pricing strategy, through which the price is established based on the costs incurred

4. Promotions

Advertising and promotional sales; the company usually uses firms specialized in marketing to help with the campaigns and they strive to create advertisements which capture the interest of the audience in an intriguing manner

5. People

The focus fall son the positive treatment of the staffs, in order to align their individual goals with the overall goal of the company

6. Process

The organizational processes at Heineken International revolve around the insurance of high quality standards

7. Physical evidence

Finally, at this level, Heineken strives to promote a positive image that attracts the customers, and this is present at the level of product quality, marketing or organizational image within the community.

2.5. Key drivers of change

The beer industry is impacted by a wide array of forces, which generate change within the industry, and which, in turn, force the brewers to also develop in order to remain competitive. One important example in this sense is represented by the changing consumption of beer as linked to the state of the economy; specifically, in poorer and emergent economies, people drink more beer than in the wealthier countries, where consumers prefer more refined beverages (The Economist, 2011).

The competition in the industry is also a notable key driver of change, especially in the context of more mergers and acquisitions being developed. Then, another driver of change is represented by the marketing efforts developed and implemented by the organizations, which change perceptions of beer and also the strength of the brewers. Finally, another driver of change, however less significant at the global scale, is represented by changes in the preferences of the customers towards beer, in the meaning that some come to prefer more novel flavors, rather than the traditionally bitter taste.

2.6. Sector trends

At the level of the trends in the beer sector, it is notable that more breweries in the western hemisphere turn to emergent economies as a source of additional sales. Within these regions, the growth rates in beer consumption are significantly higher than those in the more developed regions, where beer consumption is at best stagnant, and sometimes even decreasing. But even so, within the emergent economies, the overall consumption of beer per individual is lower than the beer consumption in the more developed countries; additionally, it is expected for the growth rate in beer consumption in the emergent states to decrease in the period to come (The Economist, 2011).

3. Competitor analysis

3.1. Porter's five forces

The threat of new entrants within the brewing industry is relatively decreased, despite the large number of smaller size breweries opened throughout the past recent years. The power of these breweries is decreased and only observed at local level, these entities not being able to compete with the established global leaders.

The bargaining power of suppliers is relatively increased, especially since the numbers of suppliers is decreased and the competition between them is also decreased. Heineken's main threat comes from the farmers, who provide the company with the necessary hop.

At the level of the buyers, their bargaining power is relatively increased, due to their ability to select the products they wish to purchase from a wide category. The bargaining power of the buyers is further supported by the competition in the industry.

The threat of substitute products is increased in the meaning that the Heineken beers -- and al beers in general -- are beverages created for recreational purposes, and containing low degrees of alcohol. Still, such conditions can also be met by products such as wines or cocktails. Finally, within the described context, the rivalry between breweries is intense and the competition is cutthroat.

3.2. Competitors

As it has already been mentioned, Heineken International faces competition from two categories of breweries. On the one hand, there are the local and small size breweries, which have insignificant local impact. On the other hand, there are the global corporations, which pose threats to the company's position within the international market place.

Heineken is mostly threatened by two leaders of the industry, namely Anheuser-Busch InBev and SABMiller. Anheuser-Busch InBev is headquartered in Leuven, Belgium, and it is the largest brewery on the globe. It employs over 110,000 individuals worldwide and, in 2010, it generated revenues of $36.297 billion. At the strategic level, Anheuser-Busch InBev's focus falls on global growth, similar to that of Heineken International's. The means to attaining this overall strategic objective is similar with that of the Dutch brewery in the meaning that they seek growth through consumer satisfaction and brand strength, but the difference with Anheuser-Busch InBev is that it emphasizes distinctively on operational efficiency (Website of Anheuser-Busch InBev, 2012).

Similar to Heineken International and Anheuser-Busch InBev, SABMiller is also a European brewery, headquartered in the United Kingdom (London) and the second largest brewery in the globe. The company employs an estimated 70,000 individuals worldwide and in its last fiscal year, it has generated revenues in the total amount of 19.408 billion. At the strategic level, the company is focused on growth objectives, which would be attained through a market focus; an intriguing endeavor of the SABMiller brewery is represented by the company's commitment to expanding in Africa (Website of SABMiller, 2012), which is an uncertain area.

3.3. Customer analysis of competitors

The Anheuser-Busch InBev and SABMiller customers are similar to those buying the Heineken beers in the meaning that they are mainly male, but also females in increasing numbers; they are usually white and young (Website of SABMiller, 2012). Still, despite these similarities, the companies do have loyal customers and this loyalty is due to the experience between the firm and the customer, the product selection or the personal preferences of the customers.

3.4. Portfolio analysis of competitors

The portfolio of Anheuser-Busch InBev is formed from over 200 brands of beverages, the most popular of them being Budweiser, Stella Artois or Becks. The investments in this portfolio revolve around the construction and consolidation of strong relationships with the customers. Additionally, the company also owns 50 per cent equity interest in Mexican leading brewer Grupo Modelo (Website of Anheuser-Busch InBev, 2012). In terms of the SABMiller portfolio, their portfolio is also based on the brands manufactured and sold within Europe and the United States, yet more and more emphasis is put on the expansion of their African portfolio and the adjacent investments.

3.5. Heineken International SWOT analysis

Internal strengths

Internal weaknesses

Strong brand

Increased global presence

Strong distribution network

Vast expertise in brewing

Large size and complex organizational structure

Decreasing revenues throughout the past fiscal year

External opportunities

External threats

Expansion into emergent markets

Diversification of product palette to meet changing customer demands (such as new flavors) or the raising interest of women in beer

Increasing competition

Changing customer demands

Sensitivity to global economy, such as changing oil prices

The need to operate in a more environmentally responsible manner

3.6. SWOT analysis of Anheuser-Busch InBev and SABMiller

Anheuser-Busch InBev

Internal strengths

Internal weaknesses

The undisputable leader in the brewing industry

Wide product palette and strong brand

Advantages of the scale economy

Decreased global presence in the less traditional regions

Weaker distribution network, manifested at the level of a high dependence on wholesalers

External opportunities

External threats

Expansion into emergent markets

Diversification of product palette to meet changing customer demands (such as new flavors) or the raising interest of women in beer

Increasing competition

Changing customer demands

Sensitivity to global economy, such as changing oil prices

The need to operate in a more environmentally responsible manner

SABMiller

Internal strengths

Internal weaknesses

Large size and powerful brand

Developed distribution network and highly powerful managerial team

Capitalization on the investments in South Africa, coupled with the African origins

Risky portfolio investment in South Africa

Financial risks due to trades in foreign currencies

Weakening financial results as a result of large debt intake; the company's liabilities increased from $16,355 million in 2011 to $29,638 million in 2012 (Website of SABMiller, 2012)

External opportunities

External threats

Expansion into emergent markets

Diversification of product palette to meet changing customer demands (such as new flavors) or the raising interest of women in beer

Increasing competition

Changing customer demands

Sensitivity to global economy, such as changing oil prices

The need to operate in a more environmentally responsible manner

4. Product / market focus

4.1. Marketing and product objectives

Based on the analysis so far conducted, it becomes obvious that the marketing alternative to invest more in Asia Pacific is sustainable. In the course of this marketing programme, the product objective would focus around the promotion of the already existent beer types within Asia Pacific. At an initial stage, the company would not engage in the creation of a new product, but this would become an alternative once the company has established its position in the new region and has identified new needs from the local community. At the marketing level, the scope is that of raising awareness of the Heineken presence in Asia Pacific and generating demand for its beverages.