ByNancy Markmann (32137)

Christoph v. Ruediger (34037)Oezguer Guevenc (35105)

Emrah Simsek (35281)Ebru Nurcan (35268)

Ruben Schultz (33530)

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“The Beck’s Experience”

handed in to M.C PedleyWintersemester 2009/10

Marketing to Europe17th November 2009

Contents

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1 Introduction 4

2 Company’s History 5

3 Segmentation 6

4 SWOT 7

5 Marketing Mix 85.1 Product…………………………………………… 85.2 Place……………………………………………… 105.3 Price………………………………………………. 115.4 Promotion…………………………………………. 12

6 AIDA 16

7 Matrixes 177.1 Boston Consulting Group……………………….. 177.2 Ansoff Matrix……………………………………… 29

8 Product Life Circle 20

9 Commercial Comparison 21

10 Conclusion 23

11 References 23

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1. Introduction:

For our marketing project we chose Brauerei Beck GmbH & Co KG from Bremen, Northwest Germany which first brew in 1873. Within its first three years of launch Beck’s already won two prizes, one being international [2]. Today Beck’s beer is the best-known beer in Germany, and represented in over 120 countries worldwide and thus became an optimal product for our marketing project[6]. We decided to choose Beck’s for several other reasons. The Beck’s GmbH comes up with an interesting history starting as little brewery becoming an international company. As we are simply regularly consumers of Beck’s, it makes it an attractive product for us to look behind the scenes. The continuous advertisement in familiar areas, such as concerts and bars, made us wonder about the versatile marketing strategy of Beck’s.

Our marketing analysis has the entitlement to give the reader an outright picture of Beck’s’ marketing strategy in Germany plus a comparison and outlook to their strategies in the UK.

2. Beck’s’ History:

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3. The Segmentation Process

3.1 Segmentation

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1873, Beck’s is founded by Thomas May, Lueder Rutenberg and Heinrich Beck in Bremen

1875, Beck’s receives its first gold medal for “best beer”

1876, Beck’s is given an award for “best continental beer”, at a World Exposition in Philadelphia

1921, Beck’s produces for export only, and makes a contract, stating that Haake-Beck Brauerei AG would be responsible for the brewing of all domestic products

1948, Beck’s facilities are restored after being completely destroyed 2 years earlier.1949, Beck’s gets back on the German market after 26 years.1964, first year that domestic sales are higher than export sales 1973, sells

over a million hectoliters for the first time.

2002, Beck’s is bought by the Belgian brewery InBev.

1850

2009

Currently Beck’s is selling over 7 million hectoliters a year in more than 120 countries worldwide

The beer market is segmented on a broad scale. There are various types of beer, each represented by several companies and their products.

3.2 Targeting

Every segment of the beer market can be highly profitable, depending on the beer, because there are just as many different types of beer drinkers as there are segments in the market.

3.3 Positioning

As Heinrich Beck in 1873 created a very good and successful pilsner beer, the company for over 120 years strictly concentrated on the pilsner segment of the market. In 1993 Beck’s non alcoholic was introduced, with the intend to taste the like their original pilsner.

After the company was taken over by the InBev brewery company, the marketing strategy was thought over and changed. With Beck’s Gold the company brought its first lager on the market and two years later started integrating into the mixed-beer market (Beck’s Green Lemon 2005, Beck’s Level 7 and Beck’s Chilled Orange 2006, Beck’s Ice 2008). All these introductions and moves into new market segments proved to be successful and profitable.

Sources:http://www.inbev-deutschland.de/B2C7C4894C8C42F591E110EFDF57F530.htmhttp://www.becks.de/http://www.suchtmittel.de/info/bier/001536.phphttp://www.marketing-boerse.de/tools/download/?type=article&id=3530

4. SWOT-Analysis:

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• Quality > holds true to the Reinheitsgebot (beer purity law)

• Value of brand recognition > green bottle & key on label ('Key Beer')

• Technological skills> second brewery using stainless steel barrels (1928)

> using UV resistant bottles

• Under-resourced services > website not user-friendly> long waiting lines when calling

Even though the Beck’s company had to struggle with several heavy economic setbacks and challenges they managed to handle these difficult situations and stayed in business. The company obviously had a lot of trust in its Pilsner and that it could reach the profit they were hoping for. Today they are one of the biggest and most popular beer breweries in the world.

5.The Marketing Mix:

5.1 Product:

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• Locational advantage > located by the Weser simplifies export by ship world wide

• Changes in trading laws > e.g. no more trade barriers within EU, more convenient to spread product within EU

• Alcohol advertising allowed in UK

• World Wars

• Competition> other international breweries such

as Heinicken, Corona etc.

• World depressions (1929, 2008 - present)

Internal

External

harm

fu

l

help

ful

Beck’s beer has wide international presence through a global network of distributors and breweries. Beck’s owns and manages one of the world’s top portfolios of beer brands and is among the leading brewers in terms of sales volume and profitability[2]. Brewed in Germany, Beck’s holds true to the “Beer Purity Law”, which states that beer should only consist out of three natural ingredients.[2] This rare way of brewing has given Beck’s a unique flavor.

With a 260% growth in the last 26 years, Beck's has seized the opportunity to expand to even more countries throughout the world, and to bring new flavors to the market. This growth of the enterprise lead to further developments, not only in the logistic and distribution area, but also in the product itself. It now has 13 different flavors, eight of which are to be found on the market in Germany and the UK.[1] Furthermore, the product is now being exported to more than 120 countries.[2] The product Beck’s is marked by being a drinking experience, and is recognized by its pure, crisp, and fresh pilsner taste.[7] For those who don’t belong to the classic “beer-drinker”, Beck’s has developed different flavors. This combination undoubtedly reaches a broad consumer demographic. By having a “Always drink Beck’s responsibly”[7] link on the bottom of their website, Beck’s gives a hint to the “Corporate Social Responsibility (CSR)” strategy, increasing their market value.[7]

Figure 1: Beck’s’ Sales Figures[3]

Beck’s is mainly sold in green glass bottles (275-660ml)[10], which they were the first to do, and now use as one of their recognition tools. It is also to be found in cans (440ml), and Keg’s (5L). The cans usually come in packs of 4 or 15, and the bottles either in six-packs, or in boxes of 24 or 18[10]. By having Beck’s available in different container, it is not only more convenient for the costumer, it also creates more market space, since they now have different flavors and different sizes.

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The labeling of the bottles hasn’t changed much since they first appeared on the market, although the color of the label changes with different flavors. The logo, which is a red emblem with a white key and is similar to the Bremer city emblem, has been on the product since it was first released to the market. It stands for the key to heaven, and standardizes the product, and makes it easy for the costumer to recognize the beer worldwide.

5.2 Place:

Beck’s beer products are almost available in any grocery store, bar, kiosk, concession stand, and nightclubs, in the UK and Germany. With retail stores like Tesco, Sainsbury’s, and Waitrose in the UK and Edeka, REWE, Kaisers, and Kaufland in Germany providing these products, Beck’s is an easy accessible good. It is also possible to buy Beck’s on an airplane, such as British Airways [8], and also at the BordBistro in trains in Germany. Beck’s makes use of many ways

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of distribution, and is being provided to the mass market using as many ways as possible.

Figure 3: Price of Beck’s at different locations[10] [11]

At all of the named, and more, retailers Beck’s is selling 2.1 billion bottles a year[5], and experiencing a supply exceeding demand for certain flavors, and special editions.

5.3 Price:

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Depending on the location, Beck’s pricing differentiates (as seen in Figure 3). But in comparison to other leading beer brands, Beck’s is somewhere in middle, tending towards the expensive side. The choosing of the pricing goes hand-in-hand with their marketing strategy, making Beck’s a product that is accessible for almost any costumer, regardless of their salary. Not being the cheapest product on the market, not only raises the profit, it also gives the beer a better reputation, and indicates better quality.

Figure 4: Beck’s in comparison to its competition[10]

5.4 Promotion:

Ken Valledy, Director of Marketing, Becks at InBev UK[13], and the Beck’s

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marketing Team in the UK have started different marketing projects, and used various marketing strategies, in the UK to increase their sales, their market value, their costumer loyalty and their distribution channels. channels.

Figure 4: Place-Distribution Beck’s

One promotion they were having in 2008, was giving away and authentic Beck’s beer glass, which is identical to the ones that were first used in pubs and bars in the UK. The promotion ran 300 wholesalers and 3000 independent retailers in the UK and Wales. When buying two six-packs of Beck’s Vier, a clean, crisp and refreshing beer which also holds true to the “Beer Purity Law”, a buyer would receive an authentic glass. Distinctive themed counter top display stands and “empty belly” posters, were helping the communication of the offer to the costumers. Furthermore, there was a national TV advertising campaign,

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which stated that Beck’s Vier is “Different by Choice”, running for about a month. This also helped raise awareness of the promotion. The target-audience for this promotion were 18-34 year olds, who are into authentic and progressive brands.[12]

“We are raising the retail profile of the brand with an appealing promotion which will make more people aware of Beck’s Vier and encourage them to sample it for the first time. This distinctive glass will allow independent shoppers to enjoy a truly premium drinking experience in their own home. Added-value offers are very popular with shoppers because they receive an immediate reward rather than having to send off vouchers or coupons, which is the case with many promotions. They are also popular with retailers as they are proven to stimulate impulse purchase among customers because of the strength of the on-shelf offer.” says Simon Harrison, Commercial Director, Off-Trade at InBev UK.[12]

This promotion not only made it attractive for the costumer to purchase the beer, it also tempted him to return to a retailer, since each costumer was given a 50p money-off voucher with the purchase.[15]

With help of this promotion Beck’s Vier increased take home volume sales by 82.5% within a year. The product is also recognized as the most successful draught lager launch of the decade, and is now available in 18.000 on-trade outlets, and is still expanding.[12]

Another promotion in the UK, was the overtaking of three hangouts in London, and redecorating these places. This act was part of the Beck’s Music Inspired Art, and these three locations were chosen, because of their live music, and the crowd they were attracting.

Ken Valledy, UK brand director for Beck's, said: "Beck's has been involved with music and art for more than 20 years, and we are proud to extend our

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collaboration to these three pubs, which are some of the most iconic in London.”[14]

“Genau mein Geschmack”, was a promotion Beck’s used in Germany to attract costumers. In this sweepstake, the grand-prize winner would receive a sailing trip with three of his friends. There were other prices, such as amazon or maxchoice gift cards. This sweepstake was promoted in the POS (point of sale), and was held by over 10.000 retailers. The communication to the costumer was done through posters, stands, boxes where you could drop your ticket to the sweepstakes, and online through www.becks.de. [16]

Beck’s also has standardized promotion, which are the same worldwide, such as their famous green sailing boat “Alexander von Humboldt [17[, which was and is still used in many TV advertisements. Beck’s’ international motto “The Beck’s Experience”, indicates that drinking a Beck’s beer is rather an experience than just a drink, giving the product an unique characteristic. Furthermore, Beck’s is well-known for sponsoring bars, night clubs, and hosting and sponsoring music events, such as concerts and events at bars or night clubs, worldwide. This form of promotion helps Beck’s connect directly to their consumers, and has the costumer associate Beck’s with emotional satisfying moments. This kind of promotion, including Beck’s being environmentally active, helped build up an emotional connection between the costumer and the product, which increases the brand value (CSR). Another advantage of the sponsoring and hosting of concerts is word of mouth marketing. It is said to be the most efficient and effective way of marketing, and since it can be assumed that consumer is amusing him or herself at the concert, he/her will most likely have a positive recommendation about the product. The dangerous element of word of mouth marketing is that a negative opinion about a product is spread much faster than a recommendation is.

Viral marketing, is modern kind of marketing, which is a method of product promotion that relies on getting customers to market an idea, product, or service on their own by telling their friends about it, usually through the internet, by email, Twitter, Facebook, and other communication methods.

The Beck’s website is an example of viral marketing, with the problem being that it more negative feedbacks, due to its non user-friendly platform, and its lack of information on basic information of Beck’s.

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Beck’s.

6. AIDA (for Beck’s Pilsner)

Awareness- Green bottle- Advertising

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- Promotion- “top-of-the-line” beer

Interest- Tradition- Natural Ingredients (Reinheitsgebot) - Good reputation

Desire

Awareness and Interest, such as theirpromotion and advertising, create adesire to try Beck’s

Action

- Customer will buy a Beck’s- In case the customer likes it, he/she

will buy it again

Source: http://www.muellerman.com/Becks_Flasche.jpg

7. Matrixes

7.1. BCG- Matrix

Founded in 1873, Beck’s can be classified as a ‘Question Mark’ because at that time the Beck’s beer was a product with low market share and a high potential of market growth. By developing a new Pilsner, which was perfect to ship all over the world the company had found a niche in the international

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beverage market. Since the beer had won the first prize ‘for the best of all continental beers’ on the world exhibition in Philadelphia in 1876 the degree of popularity explosively increased in a very short period of time. From then on Beck’s can be classified as a ‘Rising Star’ and the company invested heavily to reach maximum market growth. The constantly growing market share brought the company to a total of 30,000 sold boxes in Australia in 1906 and an allover breakthrough of 200,000 hl for inland and export sales in 1911.

The ‘Rising Star’ broke down in 1914 where World War I had started, leading the company to stop the export and focus on delivery to the German troops. After World War I was over, Beck’s recovered until 1934, after the domination of National Socialists over Germany became intensive. The export market was instable and sensitive which showed results in 1939 after World War II had started. The export was cut down and the sales ended up being as low as they had never been before. Finally in 1945 the production had to be completely stopped.

The company re-entered the market as a ‘Rising Star’ in 1948 by selling its first 200 boxes to Bangkok. After several actions on the international market, Beck’s market share was on its peak in 1993. Only by selling the classical Beck’s beer over the years the company became a “Cash Cow” and invested their profits into new products such as Beck’s alcohol free in 1993, Beck’s Gold in 2003, Beck’s Green Lemon in 2005, Chilled Orange and Level 7 in 2006 and Beck’s Ice and Green Lemon alcohol free in 2008 to keep up cash flow.

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7.2 Ansoff Matrix

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Existing Product New Product

N

ew M

arke

t

E

xist

ing

Mar

ket

Figure 7: PLC for Beck’s[3]

9 Commercial comparison:

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United Kingdom vs. Germany Germanyhttp://www.youtube.com/watch?v=7j7EDL1jeEw

http://www.youtube.com/watch?gl=DE&hl=de&v=V_1rMWl6Tik

What is shown?One puppet, one comic figure, one wax figure, one human actor (all male, actor around 30 years old)

About 30 year old men and women

Dancing a choreography Actors drinking beer and sailing In a city OceanBackstreet in poor neighborhood Sailboat (Alexander von Humboldt) with

green sails It is night It is dayWeather: wet and cold Weather: sunny, warm and windy

Interpretation – Differences

The actors are all male and three of the four are none-human. They are dancing a choreography in a city’s backstreet at night. The weather seems to be quite wet and cold (but not raining). This setting represents the all known British art scene and its coolness. This coolness, together with the naturalness (Reinheitsgebot) of the beer is the main focus of the advert.

This is what the Beck’s company wants its image to be in the United Kingdom.

Both male and female seem to be target customers. The whole setting implies a strong feeling of freedom and independence which is created by the wideness of the ocean, the bright day, the extremely good weather and the theme song ‘Sail Away’ (“Sail away! Dream your dreams! ...”). The sailboat ‘Alexander von Humboldt’ also stands for the open-mindedness and spirit of exploration of the ship’s name giver. The whole advert is meant to be close to the nature. This is what the Beck’s company wants its image to be in Germany.

Interpretation –Similarities

They both give the audience a feeling of togetherness because all of the persons shown are needed to make a whole. Furthermore both adverts are reflecting the way of lifestyle the company wants to stand for in the different countries.

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10 Conclusion:

After investigating and analyzing the market strategy of Beck’s, through the use of marketing models, and comparing this strategy to one in another country, it can be seen that Beck’s has been successful. To understand this strategy, Beck’s’ goals have to be analyzed. Higher profitability, a greater market share, and making Beck’s an easy accessible good, are the main goals of Beck’s. Through their marketing strategy, the have been able to reach these goals, starting with higher profitability. This has been mainly achieved, by making

Beck’s available in a variety of retailers, such as Grocery stores, bars, nightclubs and airplanes, worldwide (>120 countries), by releasing new flavors of the beer, e.g. Beck’s Gold, Beck’s Green Lemon. Through the establishing of new tastes of the beer, Beck’s has gotten a greater market share, and since they are located by the Weser, exporting is extremely convenient helping Beck’s’ international success, and making it an very easy accessible good.

But they need improvement on their services department, and their homepage. They’re service line is a Belgian number, meaning any costumer outside of Belgium has to pay long-distance fees, which is inconvenient and unacceptable for a product as widely known and spread as Beck’s. Their homepage was an attempt of an innovation. It does provide the visitor with a lot of information about the beer, like their compepitors do, and states that the visitor should “check out their Wikipedia page”[2]. The homepage is blog, led by a comedian, but is not user-friendly and a person wanting to read blogs wouldn’t visit the Beck’s homepage.

In short, Beck’s has established itself as a premium beer brand in the market and has created a top-notch reputation for itself.

11 References:

1. http://en.wikipedia.org/wiki/Beck%27s 2. http://www.becksbeer.com/Default.aspx 3. http://www.suchtmittel.de/info/bier/001536.php 4. http://www.becks.com/who-we-are/ 5. http://www.becks.com/qa-about-becks/ 6. http://www.absatzwirtschaft.de/Content/Print-Archiv/_pv/_p/1004040/an/

080001012/default.aspx/document.html7. http://www.becks.co.uk/about_becks.aspx 8. http://www.airlinemeals.net/meals/Lufthansa221240.html 9. http://archive.ite.journal.informs.org/Vol4No1/KoksalanSalman/images/

data.gif10.http://www.sainsburys.co.uk/groceries/index.jsp

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11.http://www.bahn.de/p/view/mdb/bahnintern/services/bordgaastronomie/ november09/MDB68063-bordrestaurant_1109.pdf

12.http://www.inbev.co.uk/ 6EA4308701634708A2C0F573FB911D2E_507F4316B2E04558AE40992BCCA074E7.htm

13.http://www.linkedin.com/pub/ken-valledy/7/664/369 14.http://www.promotionsandincentives.co.uk/news/936418/Becks-takes-

London-hipster-hangouts/15.http://www.talkingretail.com/products/drinks-news/13634-becks-glass-as-

promotion-proves-a-winner.html16.http://www.automobilsport.com/lifestyle-beer-becks-geschmack-pos-

promotion-outlets-leh-gam-convenience-bereich-inbev---19868.html17.http://de.wikipedia.org/wiki/Beck’s 18.http://www.perfectbeers.com/prodimages/becks.jpg 19.http://www.inbev.co.uk/Becks_Vier_10x440ml_FreeGlass_2_main.jpg 20.http://erpics.de/data/media/13/1821091_400.jpg

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