Heineken is a brewing company within the global beer industry. The company operates all over the world with the main brewery operating from Europe and other networks distributed all over the world including in the US. The latest brand they produced is known as Heineken Premium light which is sold on an off and on-premise basis within the global market.
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The beer brand provides the need for most domestic light drinkers since it also has most preferred taste of their life. The manufacture of Heineken Premium light brought a new dimension within the beer industry in the United States market.
This was accompanied by re-positioning of other beer brands such as Amstel Light which also provided consumers with some level of comfort making the brand popular within the world market. The new brands introduced in the market brought competition to another level reinforcing on the fame of the brand within the market.
Heineken has operated Subsidiary Company within the US for the last two decades, which is since early 1990s. The company is located in New York City and manufactures some of the best beer brands such as; Heineken Lager, Heineken Light, Newcastle Brown Ale, Tecate, Amstel Light, Dos Equis, and Tecate Light.
Heineken decided to introduce most of its products within the US market owing to various reasons one of them being the fact that consumers in the U.S. became so much attracted to special beer brands like those offered by Heineken.
In the current world, consumers would wish to get value for every money they spend, hence the need for quality products. Such a desire has created a wide market segment for Heineken products. The quality of the products has earned Heineken favour with the US market (Heineken USA, 2010).
Background of Heineken Company
The demand for quality beer has made Heineken USA one of the most popular bear brands within the global market. Their wide range of products and high demand for their products led to adjustment of prices of which helped in maintaining the company’s image.
Various brands such as Mexican brands got promoted within the US market by making efforts to raise their profile specific brands invested in being Dos Equis Larger and Tecate. Through these investment, Heineken became a renown distributor from FEMSA for less than ten years. Hence, granting Heineken USA an opportunity towards sustainable growth and development of the various brand (Katz, 1991).
Heineken Brand Portfolio within the market include products such as; Heineken Larger, Heineken Premium Light, Amstel Light, Tecate Light amongst others. There is enough evidence from secondary sources showing that in America beer makes the first choice drink for many.
Recent surveys reveals that the percentage of Americans who drink beer reaches approximately 64%, the rate of drinking population within the United States is on the rise for the last ten years. Statistics from secondary sources reveal that there is an average of 4.5 beer drinks per week owing to health related matters. A good percentage of the population prefer drinking beer than wine (Tremblay and Carol, 2005; Harney, 1995).
Targeted consumer segment
Highest percentage of beer consumers are the young to middle-age group (Weinberg, 1999). This is since the aging population are known to shift their taste so quickly to wine. Heineken strategizes to utilize entertainment quotas for the purposes of reaching the middle-age population.
Young ladies as well as women are however linked to taking mixed drinks. The company strategizes on rebranding so as to reach every population segment, including off-premise consumption and at the same time appear appealing to the population (Elzinga, 2005).
Reasons for the target segment within the US
Heineken targets urban dwelling youths since they are considered heavy consumers. The target population are considered spend thrift. Entertainment was chosen as means of reaching the middle-age since they take such moments for luxurious purposes.
Thorough management of customer requirements within the rich beverage market environment requires modification to be done on product life cycles mainly through virtual operation of identified supply chains (Cachon and Fisher, 2000). Heineken’s distribution channel should have the ability to seamlessly respond to changing demand as well as consumer requirements with minimal losses.
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Theory and practice supports the use of truly integrated supply chain since it’s capable of assisting firms in achieving significant value at minimal cost. At the same time it’s also capable of creating value for those within the supply chain. Reaching ultimate point of an integrated supply chain is difficult, owing to the presence of multiple lines of definitions describing the concept.
Secondary sources will be used for the purposes of refining the objectives and at the same time providing base for other stages within the research domain. The desk research will gather required information on the world and US trends on the usage of beer over the past years.
The statistics will be useful source of information indicating the status within the marketplace. There will be need to identify the various brand names and at the same time reveal any important information on the various competing brands.
Some Heineken beer brands in the US market include; Bud Light, Budweiser, Coors Light, Miller Lite, Natural light, Busch Light, Miller Genuine Draft, Miller High Life, and Michelob Light. Heineken being of European origin is held in high esteem in the US beer market despite its high prices.
The news gazetted in Forbes magazine led to growing interest in the US market. The magazine indications gave important data on annual beer consumption in the whole world (Elzinga, 2005).
The main objective is to examine the overall attitude towards the use of Heineken within the Global market environment.
- To examine how Heineken beer is used within domestic settings
- To identify consumer attitude towards Heineken and other competing brands
- To identify the various promotional platforms which could be used for the purposes of launching the beer in new markets
The objectives will in detail follow the distribution of the beer from arrival in the market until consumption or disposal in some other ways. There research through the objective will seek to establish the number of people using beer and the kind of brands they currently like using and the reasons behind every use and the constituent of every target audience.
The other objective will seek to introduce the product in new markets and identify the groups that majorly use beer hence giving idea on the quantities consumers are likely to purchase and whether the market is ready for any price increment.
There will be establishment on the other kinds of beer consumers are aware about. Finally there will be concern in identifying the brand that looks appealing to most promising segments within the market.
The research proposal will cover three stages which include inspection of the available sources to obtain statistics and information on usage figures. Then there will be qualitative research providing in-depth information on the use of beer in the domestic market, various consumer reactions towards the brand and the possibility for the use of Heineken brand.
The objectives will be answered through the application of detailed qualitative information. The research will focus on exploring and establishing the nature of consumer reactions towards Heineken brand and at the same time quantitative research used in establishing the nature of impact of consumer attitude towards the brand.
Qualitative research will seek to answer questions such as whether beer is majorly used in public joints or at home, the kind of brand accepted in the market, consumer awareness on the new and old beer brands, the groups of people most likely to purchase the brand and quantities they consume on a daily basis.
The impact of the brand name on consumers and preparedness to pay higher prices will also be established (Strauss and Corbin, 1990).
Qualitative research provides ways through which the researcher presents his/her point of view on research issues including experiences. Qualitative research is always suitable for answering questions examining general human behaviour, motives as well as hindrances.
Qualitative research seeks to critically analyze very important issues used in identification of research problem, development of the tentative answers to the formed theories and development of good and applicable concepts. Researchers in every field are expected to have diverse theoretical experiences that mainly govern their specific areas of research. Hence leading to diverse results owing to different qualitative approaches used (Black, 1994).
Qualitative research always aims at producing vivid description of the phenomenon in question, and at the same time gives conclusive interpretation of the meaning of phenomenon in question.
Qualitative research method also aims at developing concepts from the analyzed data and ultimately link them to appropriate theories. The interview guide used in this process is normally semi-structured and focus on the areas bearing much controversies within the market segments (Black, 1994).
Qualitative research involves inquiry processes that help in understanding social and human aspects within a defined environment. It assists in building an understanding on the manner in which people see and build their lives as important processes, the relationships involved and finally interpret the existing relationships within the context of social environment (Black, 1994).
This research will seek to establish the relationship between the research objectives and findings from the interview. However Grounded theory has been used for the purposes of interpreting data collected.
Collecting, interpreting and understanding of data is done best in grounded theory, where the collection of data, its analysis and theory stand in reciprocal relationship whereby the area of study is proved relevant by the research undertaken (Strauss and Corbin, 1990).
Rationale for using in-depth interviews
In-depth interviews will be utilized as a way of assisting in gaining an understanding from respondents and interpreting their interactions based on the entire beer market. Usually, in-depth interviews are flexible and easy to understand since they are generally open-ended, neutral, sensitive and very clear to the respondent.
The structure provided by the method allows for open conversations which provide detailed information about the interviewees’ general experiences. In-depth interviews will be utilized to assist in deep understanding of the social and physical settings of the market environment, the traditions within the US market, values, effects and roles practised by participants.
Using in-depth interviews will enable collection of sufficient and crucial data information. This is one of the ethical concerns which also reinforces trust between the interviewer and the interviewee and make the respondents to be willing to contribute more and more (Strauss and Corbin, 1990).
For the case of this study empirical research design will developed in order to help in exploring theoretical views discussed. Individual calculations will be measured based on the interviews conducted and previous data collected and statistically analyzed.
Database from previous company records having track details on the nature of the effect of policies market trends and environment will also be analyzed. Meta analysis will be conducted so as to incorporate all the effects of public policies on inequalities within the industry from previous decades (Strauss and Corbin, 1990).
There is a proposal of utilizing telephone study through the use of questionnaire on CATI. This is since the method proves to be very cost-effective considering the procedure of contacting relevant respondents. Use of telephone would also ensure accurate selection of participants.
Qualitative research will quantify the percentage of beer consumers and at the same time establish the kind of brands people like. Percentages for both spontaneous and prompted awareness will also be established. Classification of data will provide detail information on the group of people who buy and use beer and the prices they are ready to pay per brand.
Units of analysis
Various supply chain logistics problems facing multi-site companies like Heineken can be complex. This is since it involves multiple stakeholders as well as various constraints across the entire enterprise. The complex nature of the supply chain sometimes complicates production lines making definition of products difficult.
Complications run from definitions, means of transport, nature of goods to be purchased, facilities to be involved in processing and the kind of business components to be incorporated.
In many cases, different departments or divisions within company’s trade, marketing and operation planning have a hand in these decisions, but communication among these entities is not always clear or consistent, and each may optimize to their own objectives without regard for others. Hence the results drastically affect the level of profitability within companies like Heineken (Fisher, 1997).
Heineken could gain flexibility by quickly realigning the demand mix within the market for the purposes of fulfilling US market demand for beer. Switching and at the same time coordinating costs may present potential barriers towards flexible operations. Switching costs can be reduced if all supply chain partners standardizes their products and processes globally which presents some degree of challenges.
Coordination costs can be significant for global integration of cross-functional supply processes. A well-structured global demand forecasting and planning process is an important mechanism for global coordination across functions. Regional representation ensures that all relevant sectors are considered with same level of importance.
Heineken Company is a globally integrated company having regional representation hence requires costly resources, information and infrastructure. Globally integrated information systems are critical in reducing communication costs within the market hence making relevant information readily accessible and at the same time reducing coordination costs (Fisher, 1997).
Forces of globalization and commoditization in business within beer industry are not easily controlled. Globalization and commoditization have created challenges for companies appearing competitive within the beer industry. During the industrial revolution, companies looked for new markets, diverse sources of raw materials and new sources of labour.
The ascertained revolution was engineered by globalization making the market wide open only for companies to develop by utilizing advantage of economies of scale. Management authorities understood the reasons as to why they could not just focus on supply chain operations in the process of creating efficiencies.
The challenge comes in integrating beer supply chain by the use of overall corporate business strategy, and to use the supply chain as a catalyst for business transformation.
However, information integration is used to refer to the sharing of information amongst members of the supply chain. The ability to relate closely with customers, partners, and co-workers is crucial for the success. The ability to develop strategies between different formats is critical in the pursuit of the Heineken’s mission.
This involves all kinds of data capable of influencing the actions and performances of other members of the supply chain. Representation of all data items should be understood and the same data item should have the same definition across multiple applications both within and outside the firm. To make the integration process worth the effort, the data should be of high quality, timely, accurate and relevant.
Random sampling method will be applied in this research involving non-systematic collection of samples from population within the US market. Advantage of this method is that it gives opportunity for participation of significant section of population. The approach provides avenues necessary for obtaining candid outcome. Beer taking community will be given equal opportunity to participate in the study.
However, the sampling size used within this method will be indefinite despite assisting in building conclusive results from data collected. Coding and analysis will enable researcher decide where to collect data and the type of data to be collected. The sampling will be based on purposive and on judgemental basis which will ensure involvement of participants relevant to the field of study.
Three hundred interviews will be conducted in various consumer segments. The aim will be to give spread of responses where differences can easily be established.
The consumers will be drawn from different population segments. Proportional sampling technique will be applied in the process of selecting the sample size from each segment. The population of this study will be 300 beer consumers, drawn from different segments within the US population.
Table 6: The sample quotas will be set as follows
|Size of population segment||Male||Female||Total sample|
Questionnaire to be used will be developed and sent to Heineken Company head quarters for approval purposes. The questionnaire will touch various points and include questions such as; what kinds of beer brands do the company have?
What other competitive brands are in the market? Which group of people mostly use the beer brand? What is the projected rate of consumption and buying habit within the market? Are the consumers ready to pay highly for the brand?
The questions will be pre-coded where possible, open-ended questions will be utilized for the purposes of obtaining detailed information. Code frames will be used based on the responses within the range of first 10%. Computer analysis will be utilized, where frequency distribution tables will be applied.
Data will be summarized and presented in form of tables and charts within which mean, standard deviation, frequencies and percentages will be shown. Evaluation of the collected data will be followed by statistical analysis; the data will be weighted for the purposes of harmonizing the data with current national figures.
Analysis will be preceded by complete check for completeness and consistency. Descriptive statistics will be utilized in the process for thorough questionnaire analysis.
Data will be verified through undertaking supplementary interviews, checking company records and channels of distributions. At the same time estimates from fellow competitors within the beer industry will be useful while at the same time reviewing historical data on performance trends. Client-approved kind of interview questionnaires will be used to cover broad spectrum of topics.
There will be need to submit and interim report detailing qualitative process undertaken. Then there will necessity to call brief meeting with the company management team. After which the presentation will be prepared in power-point detailing all findings. The analysis will entail the use of charts and tables summarizing all the sections of the research.
Interview was conducted amongst the same individuals to establish on the validity of their responses. Before the start of the interview, each interviewee will be requested to sign consent form after carefully reading and accepting with the written conditions.
The interview process will be audio-taped and transcribed for confidentiality purposes. Each respondent was given a code name which was used instead of their real names; this ensured that there was no possibility of linking individuals to any information given.
The table presented shows the suggested amount of time the research study is expected to take. The time factor shown is directly correlated with the deadlines set within the briefs. However, weekly reports will be sent for verification making it easier writing the weekly summary and at the same time making necessary adjustments,
Table 7: Proposed Timetable
|1-5 weeks||Desk research|
|8||Availing both qualitative and desk research reports|
|9||Development of questionnaire|
|12-13||Quantitative stage (n=200)|
|13-14||Coding and data preparation|
|16||Compiling of the report|
|17-19||Presentation of final report|
The budget proposed for the whole research work excludes any VAT. The cost per section provided is inclusive of any assumptions contained within the proposal. However, the budget is open to any adjustments that may arise in the process of the study.
Table 8: Proposed Budget
|Desk Research||20 hours senior executive|
|30 hours junior executive|
|Cost of accessing relevant reports|
|Qualitative research||Five focus groups|
|Quantitative research||300 CATI interviews|
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