The Design Cycle That Heineken International Has Implemented - Essay Example

Heineken and Heineken Lager beer is among the top selling beers in the world. The brand has dominated the craft beer industry for a long period, which has enabled it to gain expertise in effective production and marketing of the brand. Heineken has been able to confront and challenge the ever-changing market structure, which has eliminated other beer industries from the competitive market. This paper will provide comprehensive details of the conception, history, development, and current state of the brand. The report will also analyze the design cycle that Heineken International has implemented from the growth to the establishment of the brand. In addition, the paper will also focus on the challenges that the brand has faced from its conception to the establishment Heineken in the competitive beer industry. Table of Contents Table of Contents 3 1.0 Introduction 4 2.0 Heineken 4 2.1 History 4 3.0 Production 5 3.1 Brewing Process 5 3.2 Marketing 8 3.3 Evaluation 9 3.3.1 Strengths 9 3.3.2 Weaknesses 10 4.0 Recommendations 10 5.0 Conclusion 11 References 13 1.0 Introduction The brewing process is an essential aspect in the production of beer in the craft brewery industry. It determines the quality of beer produced and how it affects consumer taste. For a long time, many brewery companies have enforced effective strategies in the beer industry in order to dominate the market. According to Orchestrated Beer, more than 250 new breweries have opened in United States in the year ending 2011, while they project that the number of operating breweries is likely to increase. However, a few brewery companies have dominated in the industry despite the influential market changes and inflation scenarios experienced worldwide. Heineken, a huge multinational brewery, is famously known for being among the largest beer producers worldwide; the brewery holds the third position in beer sales in the world (Flapper, Nunen and Wassenhove, 2005, p.43). Daalen (2014) asserts that, in 2012, the brewer company had amassed €2.91 billion in net profit. Its famous brand, Heineken is among the top beer brands on a global scale, which is sold in over 170 countries. In Europe, it is the most preferred premium beer brand among beer consumers. The key factor that has enabled the brewer company to establish and dominate the beer industry can be attributed to its innovative strategies in processing and marketing of the beer brand. As such, this report will provide an in-depth analysis of the conception, design, implementation, and operation of the Heineken. 2.0 Heineken 2.1 History Heineken international traces its origin to Amsterdam, Netherlands (Hubpages, 2014). Its founder, a twenty two year old Gerard Adriaan Heineken, purchased De Hooiberg brewery (the haystack) in Amsterdam. In 1873, Heineken decided to change the name of the brewery to Heinken’s Bierbrouwerji Maatschpp before opening a second brewery in Rotterdam. Interestingly, Heineken was among the first pioneers in the brewing industry to construct a laboratory that focused in brewing, where he prioritized the quality of beers that his brewery produced. Heineken was keen enough to identify the importance of the quality production of beer. In 1886, Dr H Elion was successful in isolating the A-yeast strain, which is a key ingredient of Heineken Lager beer to date. The production of Heineken expanded to a new brewery in Stadhouderskade, which replaced the established Den Hoybergh. The new brewery implemented the refrigeration of Heineken Lager beer in 1888 (Oliver, 2012). The exportation of the beer began in the early twentieth century when Heineken Company imported its first brand to Africa in 1900. In 1929, Heineken Company started packaging the brand in bottles at the brewery. In 1933, after the abolishment of prohibition in America, the first legal carriage of the beer was shipped into the country. At the end of the First World War, the Heineken Company focused on the exportation of Heineken Lager beer to other countries; the beer has remained the leading brand of imported beer in United States since then. The Heineken Company expanded the production of Heineken Lager beer, after the end of the Second World War through purchasing competing breweries and consequently closing them down. The domination of the brand was extended in Netherlands when the company acquired Amstel, its major competitor. 3.0 Production 3.1 Brewing Process Diagram 1.0 Brewing process Source: Botany, 2000 The main ingredient in the Heineken Lager beer is the A-strain yeast, which was produced by Elion in 1886. The additional components of the pale lager beer include water, hops, barley, and hops. The process begins in the brew house where water that is stored in water tanks is purified; the process is followed by malting of the barley in the barley tanks. After mixing malt with brewing liquor, the mixture is heated in order for starch and enzymes contained in the malt to be released (Jamaica-gleaner.com, 2014). The barley is moistened in a period of one and a half days to allow for germination. After barley has malted in a period of 7 to 8 days, the process of drying the malted barley follows, which involves removal of the seed roots. The next procedure that follows involves mixing of the malt and water, which occurs before boiling of the mixture in the mash copper where the mixture becomes wort. The hops, which give the beer the bitter taste, are added to the wort in the copper. The boiling procedure is repeated; this process is vital since solid particles in the wort are separated from the mixture in the whirlpool. The next procedure takes place in the fermentation tank where wort that has been cooled, is mixed with yeast. Yeast also plays an important role since it is responsible for converting sugar into alcohol and carbon dioxide. The wort, which has turned green after a period of seven days, contains an alcohol level of 4.5%. The green beer is then stored in larger tanks known as lagering tanks for a period of 4 to 6 weeks where it matures. After the beer maturity period is attained, the beer is force carbonated while yeast is removed from the beer in the filtration tank using the natural silicon kieselguhr to clear off particles or contamination (Wilson and Gourvish, 1998). The final step in brewing involves pasteurizing and filling the beer into packaging units such as bottles or cans, which takes place in the packaging plant. The whole brewing process, which is effectively planned and organized ensures that a beer with a unique sense of taste is produced. The Heineken Company ensures that the beer is packaged in artistic cans and bottle designs with the objective of attracting customer attention. The Heineken beer is usually bottled in different cans or bottles of different volumes with a red star as the main symbol, which identifies this unique brand. According to Smith (2013), packaging plays a crucial role in determining how consumers interact with a product or how the consumers feel about the product. Therefore, it is critical for any brewery, which seeks to maximize on beer sales, to delight its consumers’ satisfaction through effective packaging. As such, the packaging of Heineken Lager beer has been consequently improved in recent years to appeal to a wider consumer market. For instance, in 2013, the Heineken Lager beer was bottled in a new relievo Heineken bottle in the Heineken’s Vietnam Brewery Limited (Vbl.com.vn, 2014). The higher bottleneck, artistically engraved curves, and a transparent label provide a feeling of higher grade to Heineken beer bottle. The New Heineken design is a breakthrough in packaging creativity, which has ensured that Heineken Lager beer maintains dominancy in the competitive market as the most preferred brand in various continents, especially Europe where it tops the list in sales. According to Ferret (2013), the brand’s iconic red star, which is easily visible on every carton, symbolizes quality and style, while maintaining the brand’s status as a premium international beverage. 3.2 Marketing According to Montana (1994), Heineken has dominated the consumer market in Netherlands by gaining 53% of the market in1991 compared to its competitors Grolsch (15%). Additionally, the brand has been successful in being the world’s leading consumer for more than 130 years, which can be attributed to the company’s effective strategies in marketing the brand. In addition, the company has been able to confront directly the challenges that the brewing industry faces, while also focusing on long-term plans of the brand. As per now, Heineken is marketed in 175 countries worldwide. However, the marketing of Heineken Lager beer has experienced tremendous changes since its foundation. In continents like Africa and Eastern Europe, the brand has not fully established in the market and it is still in its embryonic stage. Heineken’s primary objective is to establish a stable market and build primary demand for the premium brand. However, Heineken has gained momentum in developed countries such as Italy, Spain, United States, and Japan. Thus, the company has focused on gaining customer preference and increase sales of the brand. Heineken International has initiated major focus in increasing the advertising of Heineken Lager as well as gaining brand image and preference. For instance, in Holland, Heineken is regarded as the mainstream brand, due to toppling in beer sales and revenues in the entire country. The marketing of the Heineken brand has been successful because of a number of reasons. Among the key factors for its successful marketing is the superior quality of the brand. Heineken is regarded as one of the highest quality brands of beer world; its mild bitter taste has received positive reception in the consumer market. The brand is made special and unique by the fact that it is a natural beer and it does not contain gluten or GMO (Genetically Modified Organisms) as part of its ingredients. In addition to Heineken’s influential marketing strategies, the company has involved the public in enhancing the innovation in marketing the beer through a strategy called creative crowdsourcing. According to Steeman (2013), crowdsourcing is the process of introducing a problem on the internet platform with a great number of users who can solve the problem. The individual with the best idea is awarded with some form of bounty, then using the idea for innovation and marketing; a practical example is the Heineken’s bottle glass. 3.3 Evaluation 3.3.1 Strengths In order to determine the effectiveness of the production and marketing process of Heineken, evaluation is important. The evaluation results will help to determine whether the final product meets the primary objectives of the brand. To achieve this, Heineken review is essential in terms of its strengths and weaknesses. Heineken has achieved to dominate the market by leveraging on its 150 years of brewing expertise through enhancing flavor of the Heineken brand. In 2014, the light beer won the “Best Tasting Light Beer” award (HEINEKEN USA, 2014). Among the brand’s key strengths include the special taste that has enabled the brand to be awarded the “Best Tasting Light Beer” award. The brewing process involves the use of yeast that was developed in 1886. Heineken Lager beer does not contain gluten or GMO, which has made the brand traditional and unique thus a large proportion of its consumers cite this as a reason for their loyalty to the brand. The brand is also available worldwide, establishing its sales in more than 170 countries (Koller, Goedhart, Wessels and Copeland, 2005). Heineken is considered a premium brand in markets such as United States and Hong Kong, which has made the brand reliable, leading to new consumer preference. The packaging of the brand has also been attractive attribute, where recent changes have been made to the bottling design, which has attracted new consumers. 3.3.2 Weaknesses Although Heineken has been marketed as a premium brand, the superior quality and taste of the brand has received differing perspectives in various countries (Van Gelder, 2005). In addition, the brand image of Heineken has not made a strong impact in some countries. For instance, most of the beer drinkers in Latin America perceive the brand as just any other imported European beer. The brand has also failed to establish to Asian countries such India due to Heineken International’s strategy of narrowing its limit to European and Western countries. Additionally, the brand has been related to a conservative business culture hence it has faced the “drinking age” issue. This implies that the target audience of this brand is more likely to be older adults, leaving out the larger group of between 18 and 30 years. 4.0 Recommendations In order to appeal to a larger consumer group, Heineken International needs to convince its consumers that the brand is of superior quality regardless of its strong band tradition. This can be achieved through intensive advertising campaigns that target the younger generation in order to make a strong appeal on the brand’s superiority. Heineken can achieve this through evaluating its home replication, global and transitional strategies in order to establish its scope of operations. Since Heineken’s premium quality and taste is based on taste, tradition, winning spirit and friendship, the brand’s image advertising can be assessed in terms of desirability, exclusiveness, and believability. The attributes can be measured in terms of the changing market design thus creating a platform that lays down the brand’s objectives. Heineken International should also implement a centralized and decentralized marketing organizational structure in order to advance the success of the Heineken Lager beer as a global brand. To ensure that the strategy is functional, Heineken should strengthen sponsorship strategy in order to create a brand equity using high-impact profiles of celebrities in film, music, or sports field. 5.0 Conclusion Heineken Lager beer has remained one of the most consumed beers in the world for more than 130 years, producing over 2.7 billion liters since its establishment. Currently, the brand, which is Heineken’s main brand, has contributed greatly to influence Heineken to be ranked as the third largest selling brewery in the United States. Heineken is exported to over 170 countries worldwide, while taking the top spot in Europe as the top selling beer. The brand has been able to confront the market challenges over the years to emerge as one of the most selling beer brand worldwide. The evolution of the brand traces its origin to 1873 when Gerard Adriian Heineken bought De Hooiberg brewery. The brand established in Amsterdam due to its unique brewing process, which did not contain additives such as gluten. In the years that followed, Heineken stretched its consumer market to outside countries such as United States and African countries such as Nigeria. The beer undergoes a high-quality brewing procedure, which has made the brand to have a unique sense of taste. To date, Heineken breweries use yeast produced in 1886, which has made the brand to be considered a great traditional business brand. This has made the brand to be a favorite beer among older adults and conservatives. In addition, the brand has dominated the craft beer industry due to its attractive packaging design and marketing strategies. The success in the brand’s dominancy in sales has been attributed to the company’s well-organized marketing strategies, which at times incorporate ideas from its consumers in order to deliver a high-quality brand. However, the brand has failed to establish in some countries due to minimal advertising campaigns. The brand has also failed to appeal to the younger generation of consumers due to its conservative nature. The brand can increase its impact on a global scale if Heineken designs strategic advertising campaigns on its target audience. Currently, the state of the beer seems to be stable in the market due to increasing sales each year. The future of Heineken Lager beer is progressive and promising as long as Heineken International continues to incorporate modern strategies to ensure that its prosperity is maintained. References Daalen, R., 2014. Heineken forecasts growth for 2014, sees continuing soft demand in Europe. [online] Online.wsj.com. Available at: [Accessed 30 Jul. 2014]. Ferret.com.au, 2014. Heineken launches new packaging design. [online] Available at: [Accessed 30 Jul. 2014]. Flapper, S., Nunen, J. and Wassenhove, L., 2005. Managing closed-loop supply chains. 1st ed. Berlin: Springer. HEINEKEN USA, 2014. Introducing The Best Tasting Low Calorie Beer in the World: Heineken Light - HEINEKEN USA. [online] Available at: [Accessed 30 Jul. 2014]. HubPages, 2014. History of Heineken International. [online] Available at: [Accessed 30 Jul. 2014]. Jamaica-gleaner.com, 2014. How Heineken beer is made - News - Jamaica Gleaner - Monday | July 28, 2014. [online] Available at: [Accessed 30 Jul. 2014]. Montaña, J., 1994. Marketing in Europe. 1st ed. London: Sage Publications.Top of Form Orchestratedbeer.com, 2014. Brewery Software Blog | 4 Ways to Remain Competitive in the Beer Industry. [online] Available at: [Accessed 30 Jul. 2014]. Smith, Z., 2014. How Secondary Packaging Will Help a Brand’s First Impression | MWV Newsroom. [online] Newsroom.mwv.com. Available at: [Accessed 30 Jul. 2014]. Steeman, A., 2013. Heineken’s Ideas Brewery. [online] Best In Packaging. Available at: [Accessed 30 Jul. 2014]. Van Gelder, S., 2005. Global brand strategy. 1st ed. Sterling, Va.: Kogan Page Ltd.  Wilson, R. and Gourvish, T., 1998. The dynamics of the modern brewing industry since 1800. 1st ed. London: Routledge. Bottom of Form Read More