Heinnekin 3 Step Approach

330 Words2 Pages
Heineken’s 3 step approach When Heineken enters a new market, it follows a basic set of steps designed to maximise its potential profits in that market: It often begins to export its beer into that market as a way to boost brand familiarity and image. If sales look promising, it then licenses its brands to a local brewer. Doing this allows Heineken to build its sales further while simultaneously becoming more familiar with local distribution networks If this relationship also yields promising results, Heineken then either buys partial ownership of the local brewer or forms a new joint venture with that brewer. The end result is a two-tier arrangement with the more expensive Heineken label at the top of the market and the lower priced local brands at the bottom, all sharing a common brewery, sales force and distribution network. Consider Heineken’s approach, by answering the following questions: What are the specific factors that enable Heineken to use this 3 step approach, and make it difficult for other firms to copy it. Heineken has a well established and well known brand. This is vital in order for them to take advantage of their three step plan when expanding. The brand is also well marketed so almost everyone has heard of it. Identify a product or brand that you believe could use the same three step approach for entering foreign markets. Develop a clear rationale to support this example. Other well established beer companies can take advantage of this approach because the it will almost have the same resources and capabilities in order for them to succeed. Identify a product that probably could not use this strategy. Develop a rationale to support this example Growing any type of fruit would not be able to use this strategy because it is has it particular conditions in order for it to grow. It’s not grown in factories and

More about Heinnekin 3 Step Approach

Open Document