The Global Branding of Stella Artois Brewing Company
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The Global Branding of Stella ArtoisAssignment 11)The international beer market is a large and growing one with consumption levels at 1.3 billion hectoliters (hls) annually. Surprisingly, the top 4 breweries account for only 22 percent of the total beer market. This means that the profit margin for these breweries is significantly smaller than that of top companies in the tobacco, soft drink, and spirits industry which are far less fragmented. With this in mind there is great potential if Interbrew were to establish a global brand that could reach outside its borders to a larger consumer base. Interbrew has already expanded into 23 countries on four continents with its various products and this could be used as a platform to expand one global brand as an ambassador for Interbrew. Although the international beer markets are fragmented there have been many analysts that have suggested that this is due to change so that beer companies could achieve economies of scale like tobacco, soft drink, and spirits companies have done.
With today’s world shrinking by advancements in technology, many markets are no longer as isolated as they were in the past. This means that a single beer brand has the potential to be successful globally like that of Coca-Cola or Marlboro. By shifting attention to a single brand across the world it would cut down on advertising and manufacturing costs and increase profits. In addition, the premium beer market is expanding tremendously which is where Interbrew’s products are placed. Having a globally recognized beer that is produced in this growing field would be very profitable.
2)When it was decided by Interbrew Brewing Company to develop a global beer it was no surprise that they chose their best selling local beer, Stella Artois. Stella Artois is their oldest beer and was a local leader in Interbrew’s home market in Belgium.
The most conclusive way to establish Stella Artois as Interbrew’s global brand is to simply compare the numbers to their other top brand, Labatt. For starters, the three Labatt brands have 85 percent of their sales in Canada and the United States. Labatt was introduced to France, Belgium and Italy but sales were very minimal which suggests that Labatt was not being accepted by markets outside its home market in North America. In 1998 Labatt’s total volume of sales worldwide was 450,000 hls which was trumped by Stella Artois with 2.8 million hls in the United Kingdom alone. One year later Stella Artois increased its UK volume by 25 percent which proved its growth potential but it was not just the UK that was taking to Stella.
In other markets around the world Stella was also experiencing an increase in sales volume. This was in part due to its placement as a premium beer when the demand for premium beers was on the rise. Interbrew began a campaign to start a “chain” of international pubs to help promote its premium beers in several key market areas such as New York and Auckland. After only two years Stella sales in Auckland were growing 70 percent annually and in New York Stella was being sold at over 200 “high end” pubs. From 1992 to 1999 Stella increased its sales volume from 3.4 million hls to 6.7 million hls. It is clear that Stella was the right choice as Interbrew’s “global brand” with increases in almost all markets except its home market in Belgium, which can be attributed to its advertising focusing less on its home base.
3)Interbrew’s decision to favor global marketing as apposed to international marketing has several advantages such as reducing costs from inefficiencies and duplication of efforts. Using an international marketing strategy means the company has to adapt its marketing strategy to fit each individual market which increases prices dramatically. Stella Artois demonstrated a cost effective advertising campaign by producing advertisements that could be used globally. This not only saved money but gave Stella Artois a recognizable face that one would be familiar with in all markets. It is true that some markets would not appreciate certain advertising campaigns but finding the ones that do is the nature of global marketing. Another advantage of global marketing is being able to benefit from positive outcomes. For example, a plant in Mexico could benefit from a mistake made in Belgium and thus not make the mistake twice. On the flip side, global marketing leaves out potential markets that would support the product only if it was altered or marketed differently. This strategy is used by many companies such as Marlboro where they market a variety of different cigarettes to different markets. For instance, menthol cigarettes while popular to some are frowned upon by others.
4)Having success in different markets requires a variety of different strategies. In a market such as Atlanta it would be important to recognize the various demographics and trends in the area. Since Stella Artois is a premium beer it would be beneficial to realize that the majority of premium beer drinkers are located primarily in the northern part of the city. Focusing advertisings and beer sales here would produce far more financial benefits. This is due to the fact that the majority of higher paid workers live here. Another key to success would be to perhaps open a pub like Stella did in Manhattan in Buckhead which is a high end drinking area. Since this area already serves customers who are in Stella’s target market it would be a great place to start its expansion in Atlanta. Finally it would be wise to use advertisements that focus on younger customers since Atlanta’s population is slightly younger than many markets outside the city.