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Overview of Heineken and its operation regions

Question:

Discuss about the Market Research of Heineken.

The Heineken Company was founded in the year of 1864 by Gerad Adriaan Heineken in Amsterdam. Currently its operations divided into five regions that are Western Europe, Central and Eastern Europe, The Americas, Africa and the Middle East, and Asia Pacific. Within these areas the company has nearly 120 brewing plants in more than 70 countries (Colen and Swinnen 2016). However, it is the first time that Heineken is planning to make their presence in the Australian market. Currently in Australia, top beer companies are Cascade Brewery, Castlemaine Perkins, Coopers Brewery and Hahn Brewery (Johnston et al. 2016).  However, from the current beer consumption trends, it can be said that if Heineken joins the Australian beer market, then they will have to bear heavy losses. According to Australian Bureau of Statistics, beer accounted for about three quarters of the alcohol consumed by the Australian people in the previous years. However, it now makes up only about 40% of the total consumption (Livingston and Dietze 2016). This clearly states that slowly but steadily beer consumption rate is falling down in Australia. In this scenario it can be said that Heineken management’s decision to expand their business in Australia is not an efficient one.

According to Chikritzhs et al. (2010), consumption of alcohol in Australia was at its peak since 1991-1992. It was expected that consumption rate of any alcohol will increase among the people of Australia in the upcoming years. However, it was mentioned that excise tax on ready-to-drink spirit-based products will increase from April 2008 which will affect the rate of beer consumption in Australia. On the other hand, as mentioned by Janssens et al. (2001), obesity and BMI (body mass index) is another problem among the Australians that is forcing them to consume less amount of alcohol. However, in the research, it is also mentioned that increased amount of alcohol consumption can only affect the male as it slightly increased their BMI. On the other hand, for the female consumers, consumption of beer does not increase their body mass. From this research, it can be stated that consumption beer seems not to confer an increased risk for obesity and overweight among the women. From this analysis it can be stated that Heineken has a moderate amount of the chance to become successful in the Australian market as their beer products will have lesser amount of calories and will target only the female customers of the country. However, as per mentioned by Johnston et al. (2016), in Australia the most advertised alcohol product was Wine with a 44% advertisement rate. Advertisement rate of Beer in the country is 24% that clearly exhibits that currently Wine is the most popular product in the Australian market.  From this data it can be stated that Heineken will not only compete with existing beer companies, but will also compete with the wine manufacturing organizations in order to gain a stable position in the alcohol market of Australia.      

Trends of alcohol consumption across Australia

Levy and Shapnel (2014) has stated that the sales of non-alcoholic water based beverage in Australia have increased at the rate of 1.7% p.a. The breakup of the sales regarding this sale can be categorized into non-sugar varieties non-alcoholic drinks and sugar varieties of energy drinks and soft drinks. In the period of 15 years, it is seen that the volume of share of sales has increased from 30% to 42%. On the contrary, the sales of beer and other carbonated drinks have been drastically fallen to 0.7%. The middle-income group people as well as the higher income group people consumed carbonated drinks and beer compared to lower income group people.

The drinking culture in Australia as well as in global perspectives has been changed. The decline in drinking culture of beer is the problem for the alcohol and spirited beverages manufacturers across the world. The companies are facing difficulties while determining the issues in drinking cultures among different categories of people. The culture of drinking is related with many influences such as structural and demographic changes, health and advertising promotion, purchasing power of consumers, taste preferences of consumers, buying attitude of consumers towards carbonated drinks, etc. It can be said that the consumers are more health conscious nowadays while purchasing high calorie oriented drinks including beer (Pennay and Room 2016).

Jiang and Livingston (2015) stated that alcohol consumption of the Australian consumers is positively associated with the consumer’s affordability and is negatively associated with the price of alcohol. Author points out the fact that the increasing taxes and prices of alcohol will help in reducing the consumption of alcohol in Australia. Pricing policies of alcohol will cautiously focus on beverage types of individuals. If the price of any alcoholic drink increases then the sales of the substitute alcoholic drinks will be increased substantially.

The associations between the fatal injuries and the population level of alcohol are considered as the factors that are responsible for creation of external impacts in the perspective of major policy interventions. The study regarding the alcohol and beer consumption is conducted while quantifying the associations between non traffic and traffic mortality rates and the per capita alcohol consumption among Australian consumers. The major traffic safety initiatives are related to the effects of alcohol consumption to the consumers of Australia (Callinan and Livingston 2014).


The level of consumption of beer across the world is unstable after the World War II. It is seen that the per capita consumption of beer has been declined in the countries where beer production is occurring. The technological innovations with the increase of income of people are not responsible for the falling consumption of beer in different countries. In developed countries like Australia, United States, the trends of drinking alcoholic drinks are reducing due to changing preferences (Piron and Poelmans 2016).

Drinking culture and beer consumption

The effect of consumption of alcohol is related to the cause of many diseases in the consumer of the drinks. The increased risk of disease in esophagus is due to excess alcohol consumption. The risk also increases due to the impact of smoking in the risk of diseases apart from esophageal diseases like cancer. Research has been conducted among the drinkers that most of the consumers of alcohol consume beer (Thrift et al. 2014).

It is seen that the trends of consumption of alcohol is falling drastically. Among the other wine and spirited drinks, the consumption of Beer has fallen at a higher rate. The volume of consumption has been shrunk up to 10% considering the past six years. It is the reason of worrying the Australian brewers. The trends of reducing beer consumption among the Australians have forced the brewers to formulate and discover new products that will satisfy the needs of the consumers in Australia along with the profitability of the country (de Gaetano et al. 2016).

Heineken 3 is seeking to launch its new brand of its low calorie drinks in Australian market. However, on initial consumer trials it is seen that the company has obtained a great responses from the respondent consumers. The statement of the problem focuses on the marketing and identification of the opportunities in leveraging the easy drinking and spontaneous consumptions. It is seen that the company is targeting female consumers as they have portrayed the Heineken 3 as a low calorie drink with lower carbohydrate content (Bartram et al. 2017).


The case study illustrates that the company is facing issues while conducting marketing research in determining the actual beer consumption occasions among the consumers of Australia. The initial research has pointed out that the consumers want a product that would match their lifestyle without compromise in quality and taste.

MDP- In Australia, it is seen that the beer consumption has fallen drastically. It is the reason of targeting the female consumers by spreading awareness of the low calorie oriented beer in the market. By taking this consent, Heineken will be launching its new brand Heineken 3 in Australia where the consumption rate is falling day by day. The management of the company is in dilemma whether the Australian consumers will accept the brand like that of other Heineken products or not.

The research objectives of the study is

  • To find out the beer consumption trend in Australia
  • To identify the issues related to falling beer consumption rate in Australia
  • To identify the opportunities for Heineken in launching its new brand in Australian market

The research questions of the study is

Pricing policies and alcohol consumption trends

MRP 1: What is the trend of beer consumption rate in Australia?

H1- The rate of beer consumption in Australia is decreasing as the consumers are becoming more health conscious.

MRP 2: What are the issues that are occurring related to the decreased beer consumption rate in Australia?

H2- The issues are related to health and safety i.e. chance of getting obsessed.

MRP 3: What are the opportunities that Heineken will be using while launching its brand extension in Australian market?

H3- Heineken is targeting female consumers with the low calorie oriented drink.      

Role of Qualitative research

Qualitative research is known as a method of inquiry used in many dissimilar academic disciplines that includes social sciences and natural sciences but also includes non-academic contexts such as market research, business and service demonstrations by non-profits (Smith et al. 2015. In this particular research it is important to conduct a qualitative research method to understand current beer drinking occasions in Australia. It is known as a more focuses and appropriate method than quantitative method. In quantitative method a research problem is quantified by generating numerical data or data that can be transformed into useable statistics (Silverman 2016). However, to find out the latest beer drinking trends among the Australian consumers, it is necessary to conduct an exploratory research method which will be able to gain opinions and motivations of the consumers. Qualitative research method will help to collect thoughts and opinions and will uncover latest trends. That is why; qualitative research would be appropriate for this research.

Qualitative research technique

Qualitative research methods can be conducted by using several different methods such as interview, focus group, observation, self study, ethnography and action research (Ritchie et al. 2013. For this particular research the methods of focus group and interview will be used.      

Conducting focus groups with the female consumers of Australia will help to pinpoint the problems of Heineken. On the other hand, it will also help to understand what the consumers are thinking currently about the beer products. 

For this proposal, an estimated cost analysis structure is hereby mentioned below.

Activities

Cost Hours

Cost per hour (£)

Total (£)

Questionnaire Design

24

22

528

Questionnaire Printing

60

Questionnaire Handling

36

14

360

Data Entry

12

15

180

Data Analysis

25

22

550

Report Writing

40

15

600

Total

138

88

2278

Main activities/ stages

Month

March

Month

April

Month

May

Month

June

Month

July

Month

August

Topic Selection

ü     

Data collection from secondary sources

ü     

ü     

Framing layout of the research

ü     

Literature review

ü     

ü     

ü     

Formation of the research Plan

ü     

ü     

Selection of the Appropriate Research Techniques

ü     

ü     

Primary data collection

ü     

ü     

Analysis & Interpretation of Data Collection

ü     

ü     

Conclusion of the Study

ü     

Formation of Rough Draft

ü     

Submission of Final Work

ü     

 

References

Bartram, A., Eliott, J., Hanson-Easey, S. and Crabb, S., 2017. How have people who have stopped or reduced their alcohol consumption incorporated this into their social rituals?. Psychology & Health, pp.1-17.

Callinan, S., Room, R. and Livingston, M., 2014. Changes in Australian attitudes to alcohol policy: 1995–2010. Drug and alcohol review, 33(3), pp.227-234.

Chikritzhs, T.N., Allsop, S.J., Moodie, A.R. and Hall, W.D., 2010. Per capita alcohol consumption in Australia: will the real trend please step forward. Med J Aust, 193(10), pp.594-597.

Colen, L. and Swinnen, J., 2016. Economic Growth, Globalisation and Beer Consumption. Journal of agricultural economics, 67(1), pp.186-207.

de Gaetano, G., Costanzo, S., Di Castelnuovo, A., Badimon, L., Bejko, D., Alkerwi, A.A., Chiva-Blanch, G., Estruch, R., La Vecchia, C., Panico, S. and Pounis, G., 2016. Effects of moderate beer consumption on health and disease: A consensus document. Nutrition, Metabolism and Cardiovascular Diseases, 26(6), pp.443-467.

Janssens, J., BRUCKERS, L., Joossens, J.V., MOLENBERGHS, G., VINCK, J., RENARD, D. and Tafforeau, J., 2001. Overweight, obesity and beer consumption. Alcohol drinking habits in Belgium and body mass index.

Jiang, H. and Livingston, M., 2015. The dynamic effects of changes in prices and affordability on alcohol consumption: an impulse response analysis. Alcohol and Alcoholism, 50(6), pp.631-638.

Johnston, R., Stafford, J., Pierce, H. and Daube, M., 2016. Alcohol promotions in Australian supermarket catalogues. Drug and Alcohol Review.

Levy, G.S. and Shrapnel, W.S., 2014. Quenching Australia's thirst: A trend analysis of water?based beverage sales from 1997 to 2011. Nutrition & Dietetics, 71(3), pp.193-200.

Livingston, M. and Dietze, P., 2016. National survey data can be used to measure trends in population alcohol consumption in Australia. Australian and New Zealand journal of public health, 40(3), pp.233-235.

Pennay, A. and Room, R., 2016. Drinking cultures and change: Local, national and global. Drugs: Education, Prevention and Policy, 23(1), pp. 267-269.

Piron, E. and Poelmans, E., 2016. Beer, the Preferred Alcoholic Drink of All? Changes in the Global and National Beer Consumption Since 1960 and Convergence and Trends Since the 1990s. In Brewing, Beer and Pubs (pp. 205-227). Palgrave Macmillan UK.

Ritchie, J., Lewis, J., Nicholls, C.M. and Ormston, R. eds., 2013. Qualitative research practice: A guide for social science students and researchers. Sage.

Silverman, D. ed., 2016. Qualitative research. Sage.

Smith, J.A. ed., 2015. Qualitative psychology: A practical guide to research methods. Sage.

Thrift, A.P., Kramer, J.R., Richardson, P.A. and El-Serag, H.B., 2014. No significant effects of smoking or alcohol consumption on risk of Barrett’s esophagus. Digestive diseases and sciences, 59(1), pp.108-116.

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