heineken group

EINEKEN GROUPmarkets and sells its beer products under various regional, local, and specialtybrands such as Amstel, Desperados, Sol, Tiger, Tecate, Red Stripe, and BirraMoretti.. A forei

Heineken Group

I n t e r n a t i o n a l M a r k e t i n g

Lecturer: Ms Mai Quynh Anh

Tran Chi NhanNguyen Ngoc VienDang Thi Bich HuyenTran Nguyen TriPham Minh QuangHuynh Thi Linh Thoai

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EINEKEN GROUP

markets and sells its beer products under various regional, local, and specialty

brands such as Amstel, Desperados, Sol, Tiger, Tecate, Red Stripe, and Birra

Moretti The company merchandises and sells cider under Strongbow Apple

Ciders, Orchard Thieves, Stassen, Bulmers, Old Mout, and Follow the Fox brand

names It distributes and sells these products through its own wholesalers,

pubs, and third parties The company has business operations across the

Americas, Africa, the Middle East and Eastern Europe, Europe, and Asia Pacific.

Heineken is headquartered in Amsterdam, Noord-Holland, the Netherlands

A foreign market is always where Heineken can reach out to the world.

Including Vietnam, one of the countries that make up the success of Heineken

company today HEINEKEN Vietnam is a successful joint venture between

HEINEKEKEN and SATRA (Saigon Trading Group) The company has a history of over 30 years - growing from the first brewery in Ho Chi Minh City in 1991 to 6

nationwide with over 3,000 employees today Heineken is creating 152,000 jobs

across the value chain, contributing an equivalence of 0.7% of Vietnam’s total

GDP to the local economy, and is among the country’s top taxpayers Heineken

combines international expertise with local know-how and talent as a

relentlessly innovative company It has been delighting Vietnamese consumers

with a comprehensive product portfolio for local tastes and drinking occasions,

including Heineken®, Tiger, Larue, BIVINA, Bia Viet, Strongbow, and Edelweiss.

Many beers are innovations made exclusively for Vietnam and by Vietnamese

brewmasters.

Literature

Review Heineken NV (Heineken) is a brewingcompany that develops, markets, and sells

alcoholic beverages The company’s product portfolio comprises beer, cider, soft drinks, and other beverages Heineken

The International Marketing TaskControllable • Uncontrollable • The self-reference Criterion

Firm Characteristics

EINEKEN GROUP

Amstel, Desperados, Sol, Tiger and Birra Moretti.

Brand name and mark: Heineken

Trademark symbol

Package size and contents

Product claims: Heineken claims to have laun

virtual beer which boasts "no calories, no hidden ingredients, and no

beer"

Directions

Safety precautions

Ingredients

Name and address of manufacturer

Universal Product Code (UPC) symbol for automated checkout and

inventory control

a) Classification of product

- Consumer product: Shopping product

- Business product: Supermarket, Minimart, Restaurant, Bar, Club

Television:

Social media:

Advertising

+ MEN vs WOMEN AND THEIR MATERIAL THINGS – 2009

+ Dutch TV commercial for Heineken Beer first aired in 1958

Promotion

Controllable

Domestic Environment

Controllable • Uncontrollable

EINEKEN GROUP

n 2019, approximately 12.3 million hectoliters of beer were consumed

n the Netherlands In 2020, this number had decreased to

pproximately 10.6 million hectoliters, mostly due to the coronavirus

andemic The Dutch are particularly fond of their local beer A 2016

urvey on the preferred country of origin of beers in the Netherlands,

pproximately 40 percent of the Dutch beer drinkers participating in

his survey answered they prefer to drink Dutch beer Belgian beer

ame second, with approximately 25 percent of the respondents saying

hey prefer to drink beer from Belgium Another survey also included a

uestion on the kind of beers the Dutch like to drink This statistic shows

hat the majority of the Dutch respondent’s drink lager at least once a

month

Pilsner Urquell Beer 3,39$

Hertog Jan Dubbel Beer 7,9$Amstel Lager Beer 2.26$

Heineken price: 3.39$

– Method:

+ Demand based-pricing Competitor price:

he Dutch Heineken brewery is located in Zoeterwoude,

‘s-Hertogenbosch and Wijlre

Controllable

Domestic Environment

Controllable • Uncontrollable

Domestic Environment

2 Uncontrollable

a Politics/legal forces b Economics forces

The political stability of the nation's

political and judicial institutions is a

major concern for international

business Additionally, the taxation

and regulations of the country have a

significant impact on the objectives of

firms, particularly Heineken, which

seeks profitability and profit growth

(Hill, Hult, 2017).

The Netherlands has a representative

parliamentary democracy with a

constitution that promotes individual

liberties Heineken is, however, being

negatively impacted by a few things,

the first of which are the penalties for

violating the law against underage

alcohol possession Retailers of beer

must also get liquor permits Beer

sales may be impacted by some laws

in the future, including prohibitions on

alcohol advertising, fines for drunk

driving, and campaigns for awareness

and prevention ("Dutch Alcohol

Policy," n.d.) Last but not least, the

high alcohol taxes in The Netherlands

have a significant negative impact on

the business' profitability As a result,

it appears like the Dutch government

is attempting to stop the beer sector

from growing, which will inevitably

result in saturation across all market

2020, placing it 13th in the world (index Mundi, 2022) As a result, these Dutch economic considerations may

be advantageous for Heineken, a beer firm that focuses on premium segmentation, to take advantage of the current prospects.

c Economics forces

The world's largest brewery, Anheuser Busch InBev (AB InBev), produce extremely well-liked brands lik Budweiser and Bud Light Othe significant breweries, such as th Danish brewery Carlsberg and CR Bee

—the biggest beer firm in China— compete against Heineken for marke dominance in addition to AB InBev.

Controllable • Uncontrollable

Vietnam's economy manages to grow by 2,4% in 2020 as a result of thecountry's quick fiscal and monetary responses to the economic effects

of the coronavirus outbreak (Nurluqman Suratman 2020) Moreover, "In

2021, a significant rebound is anticipated As domestic and internationaleconomic activity continues to normalize, growth is anticipated toimprove further to 6.5 dollars "Era Dabla-Norris added(NurluqmanSuratman 2020) Vietnam is anticipated to be the second-best performer of the economic recovery in Asia-Pacific, which revised

up GDP growths of regional countries this year in light of reviving tradeand consumption, according to research recently released by S&PGlobal Rating Each household's income rises when the economy starts

to recover As a result, people's living standards rise, making it possiblefor them to purchase goods like Heineken beer However, the absence

of international visitors and deteriorating consumer sentiment have led

to a 12.3% organic fall in beer volume But Heineken Co continues tooutperform the market and effectively implement their expansionstrategy Heineken Silver, Heineken 0.0, and the regional beer brand BiaViet have all been introduced to the Vietnamese market thanks to thestrong momentum of their innovations

Foreign

Environment

Scope and Challenges of International Marketing

Economic force • Competitive force • Level of technology • Political • Cultural force • Geography, structure of distribution

1 Economic force

dvdsvith its constantly expanding scale, Heineken Vietnam iscontinuously in the top of enterprises paying the most corporateincome tax to the state budget The representative of Heineken Vietnamestimated that the annual contribution of businesses to the Vietnameseeconomy accounts for about 0.9% of the total national GDP

W

EINEKEN GROUP

Foreign Environment

Economic force • Competitive force • Level of technology • Political • Cultural

force • Geography, structure of distribution

3 Level of technology

In 2019, according to Statista, Heineken made up 25% of the beer

market value, ranking second after Sabeco Brewery Sabeco became

popular with the Vietnamese because of their affordable beer Since

Vietnam has been a country with average to low income, citizens refer

to spend on cheap segments of alcoholic drinks like Safeco's 333 and

Saigon Beer Furthermore, Heineken has different, indirect competitors

from the drinking industry like non-alcoholic beverages soft drinks, and

sodas such as Pepsi, Coca-Cola, …, and the rise of boba tea and coffee

offers an alternative for every age range and doesn't make the drinkers

losing consciousness

2 Competitive force

Technologies are advancing at an ever-increasing rate as civilization

develops more quickly than before Companies must therefore be

inventive, nimble, and adaptable to these dynamic changes if they wish to

stay ahead of the competition Businesses must integrate the most recent

technology into their operations to increase output and deliver better,

higher-quality goods With Sidel's assistance (an experienced line design

team), the Heineken brewery in Tien Giang, Vietnam, was able to increase

its production output by constructing a fully new can line that could double

the capacity of the existing ones (Packaging Strategies, 2019) In addition,

Heineken entered into a contract with ABB in 2018; ABB is a multinational

technology business that specializes in electrification, robotics,

automation, and motion portfolio goods (ABB 2020) The business was

chosen to supply the power distribution systems for the new Heineken

brewery in Vung Tau, Vietnam Heineken's expansion plan calls for "one

main power station and five sub-stations, for which ABB will provide 22kV

medium voltage and 0.4kV low voltage switchboards, compact sub-station,

electric meters with digital communication that allow users to store

real-time operational data, dry-type transformers with high efficiency and low

losses, cables and cables trays, earthing, and other installation materials''

(ABB 2018) The collaboration with ABB provided dependable and effective

technology that enhanced Heineken's facility

EINEKEN GROUP

The use of packaging and labeling is governed by strict laws in

Vietnam Beer manufactured in the country or imported into

Vietnam must have a stamp on the product packaging

According to current legislation, imported beer must be properly

registered, announced, and issued with a "Notice of Results of

Meeting Import Requirements" for each cargo at a competent

Vietnamese agency before being imported Only through

international border crossings are beer and beer permitted to be

imported into Vietnam

Although beer is a healthful beverage, over consumption can

have a severe impact on society's self-safety and public health In

order to limit the consumption of this product, the State levies an

excise tax

The Government has issued Decree 98/2020/ND-CP (effective

from October 15, 2020): a fine ranging from VND 500,000 to VND

1,000,000 for acts of selling or supplying alcohol or beer to people

under the age of 18 This is done to ensure the effective

implementation of the law prohibiting the sale of alcohol and

beer to people under the age of 18

Our country has no institutional or ethnic conflicts, and the political

climate is stable Therefore, this situation's investment in production

and business in the Vietnamese market is especially favorable for

foreign enterprises

Regarding beer products generally, and imported beer specifically:

Assignment Report 08

Foreign Environment

Economic force • Competitive force • Level of technology • Political • Cultural

force • Geography, structure of distribution

4 Political

The average age of the population in Vietnam, which is 32.9 years old,

is youthful (in 2021) The age group where beer consumption is highest,

comprising about 35 million individuals, is between 20 and 40 For

interested domestic and foreign beer companies, Vietnam is a lucrative

market

The practice of celebrating, mingling, and getting together with family

and friends is common among Vietnamese people The main beverage

served during those gatherings is beer Beer's excellent flavor draws a

lot of drinkers, but it also makes people friendlier and more

approachable Because beer contains alcohol, it is appropriate for some

occasions because it stimulates the release of hormones that heighten

excitement Heineken has been a popular choice for beer drinkers in

Vietnam for a while now because of its ability to capture this flavor

During the Covid-19 epidemic, Vietnamese people reduced spending

on utensils but increased alcohol consumption For example, 30 young

people held a party in a room of a quarantine area for Covid-19

prevention in Minh Hoa district, Quang Binh Notably, KSMS 2020 shows

that alcohol consumption shows a slight increase in 2020, from 0.9

liters/person/month in 2010 to 1.3 liters/person/month 2020 This

product of the richest group of households is also higher than that of

the poorest group (2.2 liters compared to 1 liter/person/month)

Foreign Environment

Economic force • Competitive force • Level of technology • Political • Cultural

force • Geography, structure of distribution

5 Cultural force

EINEKEN GROUP

Foreign Environment

c force • Competitive force • Level of technology • Political • Cultural

eography, structure of distribution

eography, structure of distribution

Assignment Report 10

Distribution system

In terms of suppliers, Heineken uses the majority of locally sourced raw materials for

instant packaging, such as glass, cans, and cartons, as well as rice husks as fuel for

biomass boilers

Infrastructure:

Our company takes Vietnamese people on our growth journey in the country We are

currently bringing job opportunities to people up to 152,000 jobs across the value chain.

According to research results, since 1991, Heineken in Vietnam has operated 6 factories

with 3500 employees Large factories such as: Hanoi, Vung Tau, Da Nang, and so on This

beer brand has been creating 183,000 jobs throughout the value chain, contributing

nearly 1% to the total national GDP Heineken used 56% renewable energy at its factories;

and reuse or recycle up to 99% of waste and by-products Heineken is also a pioneer in

responsible drinking communication and solving the problem of driving after drinking in

Vietnam.

The brand's product distribution channel is one of the most important things that has

made Heineken famous today Heineken is a global brand with a presence in over 70

countries From Quang Binh to Ca Mau, Heineken products are distributed to customers

through a network of hundreds of distributors and thousands of agents, restaurants,

hotels, bars, and other establishments.

Furthermore, this brand promotes local raw material sources and makes use of human

resources from the host country These have enabled not only cost savings but also the

creation of a large number of jobs for local residents.

+ In Vietnam, up to 60-70% of raw materials for beer production must be imported,

including malt According to statistics of the Vietnam Alcohol-Beverage-Beverage

Association, each year the Vietnamese beer industry has to import about 120,000 to

130,000 tons of malt at a price of 400 USD/ton.

+ In Vietnam, up to 60-70% of raw materials for beer production must be imported,

including malt According to statistics of the Vietnam Alcohol-Beverage-Beverage

Association, each year the Vietnamese beer industry has to import about 120,000 to

130,000 tons of malt at a price of 400 USD/ton.

+ Thus, the amount of foreign currency used to import raw materials is about 50 million

USD/year With the growth rate of the beer industry about 10-12%/year, the demand for

malt in 2005 will be 185,000 tons and in 2010 will be 235,000 tons If we keep the current

import status, we will have to spend about 60 million USD/year in 2005 and over 100

million USD/year in 2010 for brewing beer.

+ The Government has directed the development of Vietnam's Wine-Beer-Beverage

industry into a strong economic sector Therefore, the maximum use of domestic raw

materials to develop and produce high-quality products is an important and right policy.

According to Decision 28/2002/QD-TTg, the Government has also directed the Vietnam

Alcohol-Beer-Beverage Corporation to coordinate with localities to study and grow barley

in the country to replace a part of imported raw materials.

The self-reference

Criterion

Heineken beer mistakenly gives a high price to show the position of

the buyer, but in the Vietnamese market, the price is too high like

Heineken beer will make buyers hesitate a lot in choosing it, because

people Beer drinkers mostly come from working people, who have

medium income And instead, they will choose to buy tiger beer instead

of Heineken Therefore, the sales of Heineken beer differ greatly from

that of tiger beer, despite being within the same company

eineken commercial in

March featured a bartender

pushing a cool bottle of

Heineken past three

African-Americans to a white girl with

the clip's prominent tagline,

"Sometimes Lighter is better"

Sometimes brighter is better)

On Twitter, Chancelor singer

Jonathan Bennett criticized

Heineken's ad as "horribly

racist" and thousands of

people agreed with his views

about a minute on social media, showingelderly people dancing in a nightclub andrunning together to a nearby beach toplay The ad ends with the message:

“Tonight belongs to those vaccinated.Now is the time to enjoy it.” However, this

ad has angered consumers By yesterday(July 9), a wave of threats to boycott thebeer company appeared with the hashtag

#BoycottHeineken flooding on Twitter

EINEKEN GROUP

The Cultural Environment EINEKEN GROUP

1 The Individualism/Collective Index (IDV)

This dimensions key concern is the degree of interconnectedness that a society's members maintain It all comes down to whether individuals identify themselves in terms of "I" or "We." Individualist civilizations expect people to look for just themselves and their direct family People in collectivist cultures are members of "in groups" that look after them in exchange for their loyalty.

Figure: Comparison Hofstede Six Cultural Dimensions between

Netherlands and Vietnam

As shown in Figure 1 In Vietnam, a score of 20 on the individual index indicates that Vietnam is a collectivist society As a result, residents tend to focus on group interests, extended family, extended relationships, or society.

Vietnam's Individualism Index is low (~20), so Heineken also targets Vietnamese people who have the habit of eating and drinking together to discuss problems After tiring working days or during major national holidays The fact that they always participate in the party steps and the way they always go together has highlighted the culture of Vietnam and the collectivism that the whole people follow Because of this, Heineken has successfully reached customers and the Vietnamese market, so Heineken always gives advertisements showing people sitting together

at the table and enjoying beer very close, happy.