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The global branding of stella artois case study

Excerpt from Case Study: Global Branding of Stella Artois Interbrew's centuries of experience in brewing, beer distribution and sales are all exemplified throughout their global dominance of worldwide beer consumption as presented in the case The Global Branding of Stella Artois Beamish, Goerzen, 2012. Interbrew faces the challenge of profitably growing over time however, and must decide whether to invest heavily in Eastern Europe Hanon, 1996which is projected to be a fast-growing market despite the political upheaval and uncertainty there Beamish, Goerzen, 2012.

The troubling performance of the company in Belgium and the difficulty in making their Canadian beers successful also has the potential to derail their long-term growth as well Negrusa, Cosma, Dumbrava, 2007.

Global Branding of Stella Artois Case Study

Balancing these threats is the potentially high growth markets of Asia and throughout the Asia-Pacific region, combined with the potential of moving into wine and low calorie and health-conscious beers as well Beamish, Goerzen, 2012. The potential high growth markets of Central and Eastern Europe along with South America have the greatest potential for growth according to the case Beamish, Goerzen, 2012 yet are difficult to successfully create and run operations in according to investor analysis of the beer industry during this time period Marinov, Marinova, 1998.

The global branding of stella artois case study a global brand through unique regional and national strategies continues to be profitable for Interbrew, in large part supported by an excpeit9onal supply chain that over time has proven to be a valuable differentiator for the company across all divisions and regions Beamish, Goerzen, 2012. Case Analysis Interbrew's continued success across a fragmented beer industry and its successful management of over a dozen brands during the time period of the case are held together by the company's core value proposition of delivering excellent beer and supporting its distribution network better than competitors Marinov, Marinova, 1998.

As the industry continues to consolidate and the competition becomes fiercer not just for customers, but for channel partners as well, Interbrew must choose a pre-emptive strategy to retain its global market share strategy. It is evident from the case analysis that global competition will only increase as the top three beer providers rely on their brands to further force a fragmented market Beamish, Goerzen, 2012.

With the industry dynamics being more attuned to consolidation, the strategy of creating a global brand is one that will unify the company's many other competitive strengths, galvanizing them all around a single value chain for the new brand. Compounding these the global branding of stella artois case study of the industry dynamics are the changing nature of customers as well, with the focus being more on healthy beverages over the traditional high-calorie ones of the past Beamish, Goerzen, 2012.

Given these many constraints of the market it makes sense for Interbrew to create a global brand. Continuing to rely on a balkanized strategy of selling across many different regions and nations will eventually dissipate the company's marketing and selling budgets and time, and could lead to the global brand itself dropping in value.

By choosing to create a single, unified global brand of beer, Interbrew also creates the opportunity to further support is regional and national branding strategies as well. Using a global brand to unify a disparate series of smaller product lines or brands creates the cumulative effect of strengthening the corporate brand overall Hede, Watne, 2013.

For Interbrew, this translates into a more recognized, globally powerful brand at the corporate level by choosing a global beer brand to promote. Given competitive pressures, a consolidating beer market globally and the potential for growth in Asia and throughout Eastern Europe, the decision to create and fully support a global brand is clear.

Interbrew really has no choice form a global growth and continued competitive positioning standpoint but create a globalized brand. Of the many brands mentioned in the case analysis, Stella Artois has the greatest potential to be positioned as a premium beer that exemplifies the company's value proposition of quality while preserving its unique heritage as one of the most accomplished beer producers in the world. Stella Artois had been a holiday or Christmas beer in the past, often associated with social events and opportunities to get together with friends and family Beamish, Goerzen, 2012.

As Interbrew has been experimenting with cafes and other experiential-based marketing and selling strategies the Stella Artois brand also fits with that direction as it is associated with social events.

The shift is nuanced in the case showing how Interbrew is slowly moving tis marketing away from celebrating the beer itself to celebrating the events and social connections that beer makes happen Beamish, Goerzen, 2012. The emotions and experiences that people feel and have when drinking beer are the future of beer marketing, and that point is only obliquely made in the case yet it is clearly happening more and more during the time period of Interbrew's history shown in the case. Additional reasons why Stella Artois makes sense as the global flagship brand is the need for the company to counter price competition in a price-inelastic market that is rapidly consolidating Beamish, Goerzen, 2012.

When managing products that are competing in price-inelastic markets, the best possible strategy is to seek positioning that can substantiate and protect higher prices over time.

The hard reality of price wars in the beer market is that when a market is inelastic, the best strategy of all is to raise prices and go for the higher end of the market as customers will quickly equate price and quality as correlated Ruhm, Jones, McGeary, et. Choosing a premium band that can be used to raise prices over time, averting participating in unprofitable price wars, makes the most sense for the company given its diverse global operations Beamish, Goerzen, 2012.

Interbrew has also specifically focused on cities over countries as their primary geographic segmentation strategy. There are several examples in the case, with the New York City launch being the one most discussed and analyzed Beamish, Goerzen, 2012.

The pros of this approach are amplified media coverage, more return on marketing and advertising investment, greater the global branding of stella artois case study to increase distribution in major metro areas that outlying areas emulate, and more control over marketing and messaging execution. It can also lead to a great level of long-term brand recognition if national chains headquarters in the given city choose to standardize on the beer. The cons or disadvantages are the limited national and global exposure given the limited selection of media outlets, the lack of overall beer industry coverage as many media companies tracking the beverage industry are geographically dispersed globally, lack of insight into how different demographic and psychographic customer segments will react to the beer and its branding over time, and lack of overall insight into varying performance by region.

If Stella Artois was being introduced in the metro area I live in, they would first need to stress the Spanish connections the city I live in has a large percentage of Mexican and Spanish customers for the beer. It would also need to stress the craftsmanship of the beer and its legacy of being a centuries-old favorite of families.

In this metro region given the Spanish-speaking customers would also require a more family-0driven messaging as well, as those values are critically important to that demographic group. In addition, the beach communities would need to be sold on the value of the beer for social gatherings and as a catalyst for social get-togethers. These requirements would vary significantly across other metro areas and would need to be fine-tuned to the demographic and psychographic needs of given markets to be successful.

  • For example; it is difficult to put the whole Spanish and French population into one segment, but it is a lot easier and more effective to put Barcelona and Niece premium beer consumer into one segment;
  • Stella Artois Global Markets Attractiveness Business and Brand Strategy Interbrew only pushes its premium brands when local managers smell an opportunity that the local market is ready for premium beer;
  • Meanwhile, the influence of its brand would also be spread much faster and wilder internationally;
  • Table 2 below illustrates Stella Artois product lifecycle in different target countries.

In addition, the messaging would also need to include more of an emphasis on achievement in other regions compared to the one I live in, as the cities to the north and east are more focused on visible evidence of social status and prestige. While the family branding would work in the city I live in, selling the prestigious aspects of the Stella Artois brand is going to be more effective as a selling strategy in the northern cities of the state I live in.

  • Therefore, as a capital intensive business, to archive the economies of scale, Interbrew have to invest large capital to rationalizing the distribution, advertising and operation to more modern facilities;
  • Analyzed a effective budgeting plan for long term investment Discover and apply the new technology such as Internet into its operation Every day is a new challenge to a company;
  • Compounding these aspect of the industry dynamics are the changing nature of customers as well, with the focus being more on healthy beverages over the traditional high-calorie ones of the past Beamish, Goerzen, 2012;
  • Therefore, acquisition has become more effective for the entry method in beer industry initially for establishing the foundation in a new country, then following with own brand introduction afterward to reduce the risk;
  • Such area is the restricted area for Interbrew to consider.

Interbrew's future is going to be increasingly dictated by its ability to attract and keep younger, more affluent and health-conscious customers. Instead of relying on the traditional offline channels to capture theseā€¦.