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SALE PLAN – MKT 440

Sale Plan for July 2014 – June 2015

11BSM3 – GROUP 6

Nguyễn Thị Như Thảo 1158130

Trương Phương Quyên 1158114

Quách Tiểu Yến 1158164

Nguyễn Như Ý 1158162

Nguyễn Lê Huỳnh Uyên Thư 1158136

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Table of Content

I/ EXECUTIVE BACKGROUND……………………………………………………………..3

1. Company overview…………………………………………………………………3 2. Heineken’s Goal………………………………………………………………….....3 3. Heineken’s Core Competency………………………………………………………4

4. Objectives…………………………………………………………………………...4

II/ COMPANY SITUATION…………………………………………………………………...4

1. Financial report……………………………………………………………………...4

2. Issues………………………………………………………………………………...5

III/ MARKET SUMMARY……………………………………………………………………..6

1. Current Situation…………………………………………………………………….7 2. Target Audience……………………………………………………………………..7

3. Needs………………………………………………………………………………...8 4. SWOT Analysis……………………………………………………………………...9 5. Competitors & Buying Patterns……………………………………………………...9

6. Trends……………………………………………………………………………….10

IV/ MARKET STRATEGY……………………………………………………………………..11

1. Marketing Mix……………………………………………………………………….12

2. Sales Forecasting…………………………………………………………………….13 3. Strategies & Implementation………………………………………………………...13

V/ APPENDICES………………………………………………………………………………..14

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I/ EXECUTIVE BACKGROUND

1. Company overview

a. Global Heineken

Heineken is one of the famous brand in worldwide originating from the Netherlands. First made

in 1870 in Amsterdam, Heineken brand was officially born in 1873, when Gerard Adrian Heineken founded Heineken & Co. after took over the brewing facility De Hooiberg.

At the first time, the factories only produce beer for the domestic market. Early in twentieth century (1912), Heineken seeks to bring beer beyond borders, exported to Belgium, England,

West Africa and India…And became famous not only in taste but also in the charming characteristics of the product.

In 1933, Heineken became the first foreign beers are imported into the United States and quickly build high-end beer image in this market. To continue that success, Heineken boldly penetrate into the Asian market in 1936.

After more than a century with the advent of the great success achieved, Heineken has confirmed

its position as the famous beer all over the world. Appeared in 170 countries around the world with more than 120 factories in 60 countries, the volume of beer production up to 109 million hectolit annually. Until now when hearing about Heineken, no one is not thinking about a beer

line with advanced green features with a red star logo prominent and the well-known slogan: “It could be only Heineken”.

b. Heineken in Vietnam

In 1992, the world-famous beer – Heineken - is imported directly from Netherlands to Vietnam. In 1994, the Heineken beer was first produced by Vietnam Brewery Limited (VBL) Company in Vietnam formed as a joint venture with Vietnam beer company. Until now, Heineken has built a

very successful high-end beer image in Vietnamese people's mind and has a strong foothold in Vietnam beer market.

2. Heineken’s Goal

Heineken aim is to be a leading brewer in each of the markets in which they operate and to have the world’s most valuable brand portfolio. Heineken principal international brand is HEINEKEN®, but the Group brews and sells more than 200 international premium, regional,

local and specialty beers and ciders, including: Amstel, Primus, Birra Moretti, Sagres, Cruzcampo, Star, Foster’s, Strongbow, Kingfisher, Tiger, Newcastle Brown Ale, Zywiec,

Ochota.

3. Heineken’s Core Competency

On any market, the brand has always been the core factor determining the success of the

business. If have a strong brand, the ads will not of course necessary, customers will automatically know the brand of the business. But to build a strong brand is a difficult problem, not so easy.

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According to well-known business magazine Business Week and U.S. firm specializing in building international brands Interbrand, Heineken is the only beer brand be classified in heading

famous brand on a global scale. And Kevin Baker, senior expert on beer, wine of Canadean Company (UK), specializing in the investigation, survey the world markets says, whether

Budweiser (U.S.) self-proclaimed is "king of beers”, but out of the U.S. border, no many people knew this brand, while in many countries around the world, everyone knows Heineken brand savvy. Although the Manufacturer of Dutch beer has annual revenues approximately $11 billion,

ranking 3rd in the world, after the company Anheuser-Busch (USA) and SAB Miller (South African-American), but own review of trade eat off the Heineken brand and this far exceeds the

competition. But in term of brand, Heineken is far ahead of these rivals.

4. Objectives

Heineken tries to set a wide distribution system, seeks more customers, expand the target market, increase the revenue, push-up the reputation and still friendly with environment.1

II/ COMPANY SITUATION

1. Financial report

Key financials[2]

(in mhl or € million unless otherwise stated)

FY13 FY12 Total

growth

%

Organic

growth

%

Group revenue 21,255 20,984 1.3 0.1

Group revenue/ hl (in €) 92 90 2.3 2.7

Group operating profit (beia) 3,192 3,106 2.8 0.6

Group operating profit (beia) margin 15.0% 14.8% +20bps

Consolidated revenue 19,203 18,383 4.5 -0.9

Consolidated operating profit (beia) 2,941 2,666 10 -0.7

Net profit (beia) 1,585 1,661 -4.6 -2.0

Net profit 1,364 2,914 -53

Diluted EPS (beia) (in €) 2.75 2.89 -4.8

Free operating cash flow 1,518 1,484 2.3

Net debt/ EBITDA (beia)[3] 2.6x 2.8x

[1] Asia Pacific Breweries and Asia Pacific Investment Pte Ltd

[2] Refer to the Definitions and Glossary sections for an explanation of non-IFRS measures and

1 Source: http://www.theheinekencompany.com/

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other terms used throughout this report; 2012 financials restated for the impact of revised IAS19

[3] Includes acquisitions and excludes disposals on a 12 month pro-forma basis 2

The last 12 months have been facing with our business. Oure financial results were below

expectations having been affected by tough market conditions, and weaker trading than

we had expected in some of our important developing markets. Group revenure grew

1.3%, while group operating profit increased 2.8%

2. Issues

a. Economic issues – directly connected to the profit (sales)

Population: The population of potential customers target market is quite dependent on the

type of product or service. For B2B firm, for instance, the number of people in the

country is not a good indicator of market size. In addition, B2C companies often consider

the target population rather than the entire amount of the population. Age and gender are

often seen as the main variable to assess foreign markets. Consider to the households as

the average family size in the country can also be a good indicator. However, it is hard to

see the future and compare with other market factors such as age and gender. It might be

a good way to foreign markets pay attention to population distribution using tools such as

the population pyramid.

Income: A critical economic factor to look into the target market is income level of the

nation. Companies trying to go into foreign markets can measure the market potential

through GNI or GDP. Also, they can decide which indicator to use according to the

market or product type; for example GNI per capita can be a clear index to grasp the

population’s standard of living. Nevertheless, average values about income such as GNI,

GDP are insufficient to figure out income level of the whole population. In most nations,

income isn’t fairly distributed among the entire population of each country; also there is

no certain correlation between income level per capita and degree of income inequality.

In short, using income indictors without information of income distribution can distort

the result of market research.

b. Non-economic issues

Cultural issues: Cultural factors such as language, race, religion, historical background,

which reflect attitudes, values, and beliefs, vary among countries. Going to the global

market without understanding of the target market’s culture will bring to the failure. It is

quite important for firm leaders to figure out how managers manage the firm, how

employees behave and how consumers response according to each country’s cultural

background.

2 Source: http://finance.yahoo.com/news/heineken-n-v-reports-full-060201924.html

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Government regulations: Each nation has its regulation and taxation on foreign trade. For

alcoholic beverage firms, government regulations might be stricter in some countries that

are especially sensitive about alcohol consumption of their people. Additionally, taxation

on alcoholic beverages varies among different countries. For example, Islamic countries

such as Egypt may give a harsh control to their alcoholic beverage import.

III/ MARKET SUMMARY

1. Current Situation

Up to now, Heineken goal has been unchanged. The company always guarantee the good

quality in order to protect customer health and safety. Moreover, they have never ceased

progressive and improved their product to be a pioneer in new markets.

Firstly, brand name is unchanged3. Because it is the most valuable asset of Heineken

Company, they try to build the name with premium brand. In addition, brand name is also

very important key to develop a strong presence globally in the beer market so that they have

a lot of marketing activities. Moreover, branding is also a highly defensible competitive

advantage for company, this will take strength to company expansion. Therefore, Heineken

Company stretch their production internationally and add more money for company.

Secondly, consumer engagement activity. Brewing giant activates sponsorship by bringing

consumers closer to their favorite activities. In 2014, the brewer activated the majority of its

sponsorships with the Heineken House and was organized features musical performances and

artist cooperation spanning food, art and design4.

In addition, sports international football is the famous sport that all the world take care.

Understood and apply to promotion strategy, Heineken sponsors football UEFA Champions

League and Rugby World Cup5.

3 Source: http://prezi.com/tdgvbpqjt_oz/heineken/

4 http://www.sponsorship.com/iegsr/2014/05/05/Heineken-USA-Builds-Equity-In-Heineken-

House.aspx?utm_source=twitter&utm_medium=referral&utm_content=tweet&utm_campaign=

iegsrTweet

5 http://prezi.com/tdgvbpqjt_oz/heineken/

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Moreover, the company acquired rights over others strong beverages competitors such as

Pepsi, Amstel and Tiger6.

The last special one is the net profit of 1.560 billion euro in 2011 and measures a growth for

2014 of 30.9%. That is a remarkable number for Heineken.

2. Target Audience

In the international market includes Vietnam, the target audience Heineken tends to is

between mid to high income people. At the beginning, Heineken’s advertisement tended to

successful group. They are businessman, rich people, college educated people (at least a

bachelor degree) and most of them live in large urban cities. Moreover, bar, pub or club are

also the Heineken’s potential customer. In addition, 63% of Heineken current consumers are

men at the age from 21 to 34. Sport fan like ESPN or NFL Network are also7.

The characteristics of the Heineken’s target audience are exclusivity firstly. They want

access to exclusive, premium brands and tend to be attracted to high quality products.

Secondly, they want to feel unique and special so they will be willing to pay a higher price

for a premium product. Because they love products and services that are best quality and

exclusiveness. Moreover, they also want to be distinguished from others and will use this

brand association to do so.

3. Needs

In any business, to understand and adapt the customer’s needs are very important. That is

also determines the success or fail of company. Quality is always the first require for all

products. To protect customer health and safety, Heineken Company has followed all

standard rules and processes strictly. The next is the cost. Customers will be afraid of high

price. However, if we know the way to create trust and focus much on the quality of

products, they will be willing to pay for that without thinking. The last is the design. The

Heineken’s bottle design is also the way to impress and attract customers. Design how to

look eye-catching and interesting to make drinkers feel satisfied with their expectation.

6 http://prezi.com/tdgvbpqjt_oz/heineken/

7 (http://www.slideshare.net/mermaid19/bia-heineken-v-vic-p-dng-thnh-cng-cc-chin- lc-

marketing-ti-th-trng-vit-nam)

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As consumer needs and tastes vary, Heineken must decide how much to adapt marketing

strategy to local needs using a variance of standardized marketing mix & adapted marketing

mix, owing to the strong brand preferences & loyalties that exist among the beer drinkers.

Also, Heineken need to prioritize between global integration versus national responsiveness

evident from decreasing sales in Holland, Rest of Europe, and Africa. Besides that the beer

market is also attractive in terms of size and future growth, this approach would help the

company differentiate Heineken beer with premium price compared with other beer brewer.

In addition, the way we do business is also the factor that customers care. That is professional

or not, or whether the company cheats or not. Because how famous the company is, if they

cheat or do not take care customers, they will be lost the customer’s trust seriously. Hence,

the way we do business should be cared.

4. SWOT Analysis

Strengths Weakness

1. Product reliability and high quality

worldwide.

2. Heineken has a large network of

breweries. It owns over 125 breweries

in more than 70 countries.

3. A geographically widespread plant

network reduces transportation costs

as well.

4. Strong network of breweries helps the

company boost customer satisfaction

and reduce costs

1. The brewer has grown so large that

difficult to manage.

2. Maintaining corporate values, image and

quality standards in various countries are

a challenge.

3. There's no place to expand the market.

Opportunities Threats

1. Asian is the greatest potential for

growth, and where its greatest

opportunities lay.

2. Falling trade and ownership

1. Anheuser-Busch InBev invests in

market.

2. Tax regulations on the beer industry.

50% (from1/1/2013)

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regulations in foreign countries.

3. Heineken’s acquisition of other

breweries and brands.

3. An increasingly negative perception in

society towards alcohol.

4. Changing buyer taste and preference.

5. Competitors & Buying patterns

Heineken has more than 30 international brands in Vietnam beer market, such as Sabeco (Saigon

beer, beer 333), Habeco (Hanoi beer), and Carlsberg. In addition, Anheuser-Busch Inbev (AB

Inbev) AB Inbev (Budweiser, Corona) - the world's largest brewer has just contributed in

Vietnam, and it is expected to go into production in 2015. Additionally, due habits and local

cultures, Heineken came under pressure with alternative products such as wine, fruit juice,

energy drinks and mineral water. Indeed when export markets soft drinks, especially fruit juices

and drinks nutritious rapid growth in recent years.

Despite the fierce market competition, Heineken has the potential to thrive with massive beer

consumption in Vietnam. The drinking habits and culture makes the attractiveness of this market

is still long in Asia in general and Vietnam in particular markets. For instance, a man going out

after work with his colleagues into the bar, and they are drinking a few bottles before going

home. Especially in the sports competition season, as the World Cup, they can watch soccer and

drinking beer with their friends. Even as he met business partner, he will also speak on the table

together to increase mutual body, it helps build customer confidence after drinking beer, they

would be happy, it helps to contracts will be more favorable conclusion. In conclusion, beer

drinking culture of Eastern countries is a prerequisite for the development of Heineken.

6. Trends

Figure 1: The frequency people drink beer in Vietnam in 2012

+ 1030 people make the survey.

5.1

%

Day of the Week

10.4

%

4-5 times /week

40.5% 44.5%

2-3 times /week 3-4 times /month

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More than 38.3% of the survey participants of different age groups within a beer per months and

the average level of drinking is 2.27 times / week. In particular, the highest percentage belongs to

the group level from "3-4 times / month" (44.1%), followed by the word "2-3 times / week"

(40.5%) and in 3rd place is from "4-5 days / week" (10.4%).

Overall, the frequency of the Vietnam beer quite high, although Vietnam ranked number third in

countries consume the most alcohol in Asia, but the average level of beer or the equivalent

ability to overcome national ranking in first place is Japan, with 2 times / week.

Figure 2: Frequency of drinking by age in 2012.

Survey results showed those age groups have the lowest frequency of drinking beer from the 18-

19 year old age group, and the remaining three age groups from 20-24 years of age, from 25-34

years old and 35 years and older from the frequency productivity is high and drinking beer

equivalent. Of the 138 people surveyed 20-34 age group, nearly half a beer from 3-4 times /

month and about 40% drink beer from 2-3 times / week. This rate is similar to the age group 25-

34 and 35 and older.

From the chart shows besides age is age 18 or older are allowed to use alcohol, so that the

particular job requires employees to communicate density higher age groups under 20.

Additionally, because there was a steady source of income in frequency of eating at restaurants,

cafes and the use of alcohol is higher than other age groups.

IV/ MARKETING STRATEGY

1. Marketing Mix

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

18 - 19 yrs 20 - 24 yrs 25 - 34 yrs over 35 yrs

3 - 4 per/month

2 - 3 per/week

4 - 5 per/week

Day during the week

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4P:

- Product:

In Vietnam, there are 3 types of designs: cans, short neck bottles, long neck bottles. Cans

and long neck bottles are familiar to Vietnamese than short neck bottles. Segmented

targeting: the 25-64 age groups are approximately 68% population of Vietnam. Heineken

still retains the characteristic flavor of the beer and its quality and will be produce and

release new flavor to Vietnamese but still be familiar.

- Price: Competitive price: (price per can)

Brand Volume (ml) Price (VND)

Budweiser 355 17.000

Heineken 330 14.000

Carlsberg 330 13.000

Tiger 330 11.000

Hà Nội 330 8.500

Bia 333 330 8.500

Overall, compare to other beers, Heineken’s price is quite high. However, Heineken is a luxury

brand beer; its quality is good, characteristic flavor of Heineken is tasty; customer will be willing

to accept that price.

- Place:

Manufacturing: in 1992, Heineken entered Vietnam beer market. In 1994,

Heineken has joint venture company Vietnam Brewery Limited (VBL) to produce

beer in VN. VBL is the brewer, have international standards. It is the first brewer

in the world that received ISO 9001: 2000 degree, and it was officially recognized

by the Quality Management System HACCP. Besides that, it also received a lot

certification in Vietnam and in the World. Heineken’s quality is good and it

already has a strong position in Vietnam beer market. So, VBL is still a partner of

Heineken in VN.

Distributors: restaurants, pubs, bar, club or supermarket and retail shop. There are

a lot of competitors in beer industry, so, Heineken must maintain and improve its

distribution channels.

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- Promotion:

Direct mail to loyal customers.

Advertising: outdoors advertisements such as brand ads pillar. There is a new ads

on television involve Tet holiday in Vietnam.

Sponsor: Heineken Countdown event, a number of sporting events: tennis

championships and especially charity.

2. Sales Forecasting

The 25-64 age group is approximately 68% population of Vietnam. Heineken beer is owner

segment of luxury beer. Vietnam is one of the highest customer markets of Heineken. So,

Heineken must have promotions to increase quantity beer and revenue for company. Through

strategies and promotions, Heineken’s profit will be better.

3. Strategies & Implementation

- From July to November 2014, Heineken have promotions, include: when opening the

cap, you will have a chance to get prize such as car, television, Iphone 5S. And when

joining in any beer club, buy 5 Heineken bottled get 1 bottled for free.

- From December 2014 to March 2015, this is the time of Christmas, New Year and Tet

holiday in Vietnam. Heineken’s price will increase about 5% (320.000-335.000VND).

There is a new advertisement on television (ads involve to Tet holiday in Vietnam) and

sponsor Heineken Countdown event on December 31st.

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- From April to June 2015, there is promotion. When buying one cask, each cask will have

code numbers. If customer send this code numbers to our switchboard, customer will

have chance to get prize, such as: ticket for couple travel to Netherland 7 days.

V/ APPENDICES

* IMPROVE - GREEN BREWER

To ensure a viable environment for future generations, businesses and communities

are embracing more sustainable ways of producing and consuming. Heineken is

committed to playing its part and is working hard to increase the energy and water

efficiency of its breweries, warehouses and offices.3

Several of our 140 breweries already meet our 2020 targets and we are sharing these best practices with those

breweries that are not yet there. Ultimately, we want our operations to have the smallest possible emissions footprint.

To this end, we are exploring ways to build breweries that are C0 2neutral and breweries that use zero fossil fuels. We

are also investigating how to replace fossil fuels with energy from renewable sources like sun, wind, biomass and

biogas. Currently, measures are being taken at our Göss brewery in Austria and our El Gouna brewery in Egypt to

establish and test a model for a ‘C02 neutral’ brewery.

Water is crucial to both our brewing process and to the communities in which we operate. Our commitment is to

decrease the amount of water we use in the brewing process, ensure the water we return to the eco -system is clean

and that we do not prevent local users from gaining access to clean, fresh water for their own use. That’s why we

have committed to doing everything we can in the coming decade to apply the principle of water neutrality in those

regions designated as water scarce.

Finally, we are taking a critical look at our warehouses and offices. In 2011 we plan to map their energy consumption,

so that we can start working towards specific reductions and reducing further the negative impact on the enviro nment.

3 Scope of the numbers in this report: breweries, sof t drink plants, cider plants and water plants are taken into account.

Energy and water efficient production

In 2010, we surveyed our breweries for best practices, and shared these through our knowledge management

system for use in future designs and renovations. A dedicated team continued the task of designing an energy and

water efficient brewery and a zero fossil fuel brewery. We also appointed energy and water efficiency co -ordinators at

all Operating Companies.

Actual 2008 Reduction 2020

Greenhouse gas emissions [kg CO2-eq/hl] 10.4 40%

Water [hl/hl] 5.1 25%

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Source:

(http://www.sustainabilityreport.heineken.com/2010/brewing-a-better-future/index.html)

Bibliography (n.d.). Retrieved from http://www.sustainabilityreport.heineken.com/2010/brewing-a-better-

future/index.html.

-The End-

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