Pricing

Price-related promotions

Amstel can be bought in different cans and bottles. You can buy Amstel in a crate with 24 bottles, in a six-pack with six bottles or cans and some in some other forms. All supermarkets and retailers use discounts to get more clients and to sell more products. There is very often a discount on beer, which is very attractive for customers. An example of a discount on beer is the second crate for halve of the price, or just a 5 euros discount on a crate. These discounts are promoted in different ways. There are many advertisements on the television, and also in magazines you can find the discounts of the supermarkets.

   

Pricing tactics

The supermarkets use different pricing tactics for the product Amstel. They use discounting, and as I explained above they use it to lure customers to buy more of their products. Another pricing tactic they use is odd value pricing. This means that it looks like the product costs 4.99 euros, but you pay 5 euros. They use this tactic because then the product looks cheaper, and so customers will buy it sooner.

Influence of the marketing mix on the price

Some P’s from the 4 P’s of the marketing mix have influence on the price of a product. Product has influence on the price because it depends on what kind of product it is. The second P, Place, also has influence on the price of the product because supermarkets in the centre of a large city can be more expensive than the supermarkets in smaller towns. The third P, Price, obviously has influence on the price of the products. The fourth P, Promotion, also has influence on the price, because the more promotion is needed for the selling of the product the more expensive the product will be.

Price differentiation

The company that produces Amstel, which is Heineken, does not use price differentiation. Price differentiation means that they have different prices for different segments of customers. Heineken does not use price differentiation, because for every customer the beer has the same price.

Price elasticity

Beer is in general an inelastic product. That means that the demand of beer will not really change if the price of the beer gets higher. In 2010 the price inelasticity was -0.35, which means that the price decreased with 3.5% and the demand increased with 10%. The price elasticity of beer nowadays will be a little different, because the price of beer became higher the last few years. (Geniet-met-Heineken, 2012)

Manufacturer influence on consumer price

The manufacturer is the one that produces the beer. He could for example replace people for machines, which is cheaper and can be calculated in the price. Another way could be to find a way to decrease the price of the ingredients of the beer. This could again be calculated in the selling price of the beer.

Bibliography

Geniet-met-Heineken. (2012). Antwoorden Deelvragen. Retrieved January 10, 2017, from Geniet-met-Heineken: http://geniet-met-heineken.webnode.nl/schrijf-ons/

Services Marketing

Services

Heineken, which is the manufacturer of Amstel, offers pre-sales services. There are a lot of advertisements about Heineken and Amstel. Heineken had a commercial with James Bond 007 in it, and they adapted their logo to this commercial. Heineken is a well-known beer around the world, and they promote their product very good. You can see Heineken on the television, in videos, in movies, on the internet and also at sport events like for example the UEFA Champions League. Pre-sales services also provide quality control, and Heineken is a good quality product because there are a lot of positive feedbacks about this product. Heineken also has Heineken Experience, which is a tour where you get information about the history of Heineken, the way it is produced and you can taste the beer.

Heineken promotes their best-known beer the most, which is Heineken, but they also promote Amstel in several ways. Amstel also has commercials on the television, and they are the sponsor of a very popular event in the Netherlands, Vrienden van Amstel Live.

Extended marketing mix

The extended marketing mix consists of 7 P’s (Product, Promotion, Price, Place, Process, Physical evidence, People). Heineken provides a lot of products, which is the first P. They manufacture and sell a lot of different brands like Amstel, Brand, Affligem, Desperados, Wieckse, Sol and of course Heineken. Also these brands have different kinds of beer, like for example non-alcoholic beer, wheat beer and radler which means that Heineken has a very wide range of products. The second P is promotion, and that is what I already explained. Heineken uses movies, internet, television and events to promote its products. The third P is price, which varies because of the places where it is sold. For example beer in the supermarkets is cheaper than beer you can buy at a restaurant, because the restaurant also needs to make profit. The fourth P is place, which is hard to tell because Heineken has a lot of breweries all over the world, but most popular brewery in the Netherlands is the Heineken brewery in Zoeterwoude. The fifth P is process, which is the way the product is presented to the end consumers. Heineken is manufactured by the producers, then sold to wholesalers who then sell it to retailers and they present it to the end consumers. In supermarkets Heineken and Amstel is presented in bottles or cans, and in restaurants Amstel and Heineken is presented in glasses. Physical evidence is the next P, which is the ambience of the place the product is sold. In supermarkets and restaurants, they try to increase the ambience by putting on some music, with some nice lights and other aspects that influence the ambience. The last P is people and focusses on the main target audience of the product. For Amstel this is men between the 18 and 34.

New services

Heineken has a lot of promotion already, but most of it is for the best-known beer brand Heineken. In this way Heineken stays very popular and can even get more customers. Amstel also has some promotion, but not as much as Heineken. I think they can change their advertisements and try to make Amstel more popular. They can do this by making more advertisements for Amstel worldwide, and less advertisement for Heineken. Heineken will remain the best known product of Heineken, but Amstel’s popularity will grow.

Intangibility, variability, inseparability and perishability

Intangible products are products that can’t be touched, smelled, seen or tasted. Amstel is of course tangible, because you can do all those things with Amstel. Variability is the quality of the services, because services are provided by people and everybody makes mistakes. These mistakes can have consequences on the marketing of Amstel, because the advertisements need to be clear and true. If this is not the case, customers might not understand the advertisements and Amstel might lose customers. Service inseparability is an important property which basically states that services are produced and consumed at the same time and can’t be isolated from their providers. So without the advertisements Amstel would be consumed a lot less than it is now. Perishability means that the product can be saved for the later use, it is beer so it will not perish really quickly.

Quality of the service

The Heineken Experience is a tour through the brewery. This is a good quality service, because customers learn more about the history of Heineken and Amstel and the way it is produced. Also they can taste the beers, which has a good influence on the consumer’s quality perception of Amstel.

Also the amount of promotion for the company Heineken has a positive influence on the consumer’s perception. Heineken is a well-known beer brand worldwide, and this means that a lot of consumer’s like Heineken. Because Heineken is so popular around the world, also a lot of people are familiar with Amstel, as it is produced by Heineken.

Promotional strategies

When exporting Amstel to a country it has never been exported before, I think that I could follow the adapt promotion. Heineken provides beer and this product cannot be changed. Promotion can be changed for every country. The main problem could be the language barrier. So to export to a country where Heineken has never exported to before they need to promote their product in the language that is spoken in that country.

Personnel

The personnel that is linked to Amstel are the personnel of the supermarkets and the personnel of the restaurants/bars/cafes. The personnel should have a little understanding of the product, because in this way they can convince the consumers about buying the products. The ability to provide good information about the product is good for the marketing of the product.

Channel players and physical distribution

Atmosphere in the supermarkets

The two supermarkets I visited are the Jumbo in Gorssel and the Albert Heijn XL in Zutphen. In these supermarkets, the atmosphere is calm and relaxed but because the Albert Heijn XL is a very large supermarket, the atmosphere there is not as nice as the atmosphere in a smaller supermarket like the Jumbo in Gorssel. In both supermarkets they play some soft music from the radio. The color that appears the most in the Jumbo is yellow and in the Albert Heijn it is blue, because these colors are in their logos. The Jumbo in Gorssel is a medium sized supermarket, and the Albert Heijn XL in Zutphen is a very large supermarket. In the Jumbo the personnel wears black polo’s, with the Jumbo logo on the back and front. Some personnel also have striped blouses with the colors white and yellow. In the Albert Heijn, the personnel wears blue blouses with their logo on it.

In the Jumbo in Gorssel, Amstel can be found in the fourth path of the supermarket. It is in the same path as crisps, toilet paper and food for pets. It is in the back of the supermarket, and I think this location has been chosen because beer is not a product that is necessary. It is important that the most necessary products are in the front of the shop because then it is easier for the customers. Also there is a age barrier on alcohol, so by placing it in the back of the supermarket, not many children will walk passed it.

In the Albert Heijn XL in Zutphen, Amstel can also be found in the back of the supermarket. The reason for this position is the same as for the Jumbo. Beer is not a necessary product, so it is not important to put it in the front of the supermarket and there is a age barrier on alcohol, so by putting it in the back of the supermarket there is a bigger chance that children avoid it.

Position of Amstel

Pictures of the shelves next to the Amstel shelve in the Jumbo in Gorssel:

As you can see on the pictures are the best known brands located at the left of Amstel, namely Heineken, Grolsch and Alfa. The own-label brand that can be found near Amstel is Dors, which is a beer brand from the Jumbo and can be found at the right of Amstel.

Pictures of the shelves next to the Amstel shelve in the Albert Heijn XL in Zutphen:

At the Albert Heijn XL in Zutphen the best known beer brands can be found at both sides of Amstel. At the left there is Heineken, which is a well-known beer brand all over the world, and at the right you have Grolsch, which is very popular in the eastern part of the Netherlands. Also there is Brand and Hertog Jan at the right of Amstel, which are also well-known beer brands in the Netherlands. Between Grolsch and Brand, Albert Heijn has its own beer brand, which is called Brouwers. 

Facings

In the Jumbo in Gorssel there fit 10 crates of Amstel in the shelves. This is less than its best known competitor, Grolsch. In the Jumbo Gorssel they’re able to place 36 crates of Grolsch in the shelves, which is 3 times more than Amstel. Heineken is not really a competitor for Amstel, as Amstel is produced by Heineken, but there are able to place 20 crates of Heineken in the shelves.

In the Albert Heijn XL in Zutphen there fit 18 crates of Amstel in the shelves. This is more than its best known competitor Grolsch, because there are able to place 16 crates of Grolsch in the shelves. It is also more as its competitor Hertog Jan, because there fit 12 crates of Hertog Jan in the shelves. The brand Heineken, which is not really a competitor as they also produce Amstel, has more place for their crates, because they are able to place about 40 crates in the shelves.

Transport, packaging and communication

Amstel is being transported to the supermarkets by trucks. The supermarkets buy the Amstel from different wholesalers all around the Netherlands. Almost all the crates of beer have the same measurements, because this is easier for the transportation. The supermarkets have standard orders, but they can change it when a product is running hard. For example there is a discount on Amstel, they will order more Amstel crates because more customers will buy it.

Marketing Channels

Distribution channels

There are several distribution channels that are being used, but the channel that is used for Amstel is channel C.

In terms of complexity, the channels get more complex if the amount of wholesalers and retailers is high. With a lot of wholesalers and retailers the channels get very complex, because it will be hard to keep track of all these clients. Also if a producer wants to export its products to a wholesaler in a different country, they have think about the potential import duties.

In terms of distance, the more distance there is between the channels, the higher the costs will be. If there is a very big distance between the producers and the wholesalers, or the wholesalers and the retailers the transportation costs will be very high. Amstel is produced by Heineken, which is a company that sells its products worldwide. So it would be wise to have a lot of producers that are close to the wholesalers, so the transportation costs will remain as low as possible.

Functions of the distribution channels

All the channels have different distribution functions, from the production of goods to the consumption of the goods. Producers buy the raw materials and create the finished product, which is in this case Amstel beer. After that they will sell the finished products to the wholesalers. A wholesaler is a firm that buys the finished products from the producers in large quantities, which they then sell to the retailers. A retailer is someone that sells the products that he buys from the wholesalers directly to the consumers. So they will buy the Amstel from the wholesalers and then give the consumers the ability to buy the beer in their stores. The consumers are the people that buy the products from the retailers and use it.

Product image

Every product has its own image, which is the way consumers look at the product. The image of Amstel can be influenced by the retail concept in which it is sold in a negative and positive way. If Amstel is being sold to retailers like Jumbo or Albert Heijn, it will have a positive effect on the image of Amstel. This is because these stores are well known and overall have a good reputation, so if they sell Amstel the consumers will be more eager to buy it. Also they have quite a lot of advertisements and often discounts on their products, which also creates a good reputation for the store and therefore a better image for products like Amstel. But there are also small retailers that buy Amstel from the wholesalers. Most consumers don’t know anything about these retailers or perhaps these small retailers have a bad reputation, which has a negative effect on the image of Amstel. Also they won’t be able to afford many advertising for their stores, so they will not improve their reputation. The price of the beer will also have an influence on the image of Amstel, because if small stores ask higher prices because they need it to make profit, it will be negative for the image of Amstel.

Distribution strategy

All companies have a distribution strategy and there are a lot of different strategies that can be used. I think Amstel uses the intensive distribution. This means they use all available outlets that are willing to sell beer. This also means that they have a lot of retailers, so they need their products to a lot of different places, but this way they will gain a lot of profit and their brand will be known by many consumers. To consumers, availability means that they can buy it in a store that is located nearby and that it won’t take long to search the product and to buy it. Almost all people have access to a store that is nearby, so they will all have the opportunity to buy Amstel.

Bibliography

Dibb, S., Simkin, L., Pride, W. M., & Ferrell, O. (2016). Marketing Concepts and Strategies (7th ed.). China: RR Donnelley. Retrieved December 7, 2016

Targeting and positioning

For this assignment I created a short brand positioning questionnaire, which you can find with this link: https://www.survio.com/survey/d/V4W4L9E3J8J6M3E9E. It will only take a few minutes to make this short questionnaire. 

For the second part I created a positioning map for my product. In this positioning map you can see four beer brands, Amstel, Grolsch, Hertog Jan and Heineken. I asked several people their opinions on these brands concerning the price and quality. As you can see, Hertog Jan is the most expensive beer of the four, and Amstel is the cheapest. Grolsch has the best quality, followed by Hertog Jan and then Amstel and Heineken with the same quality. 

Bibliography

Sample Questionnaire. (2016). Brand Positioning Questionnaire. Retrieved November 30, 2016, from Sample Questionnaire: http://www.samplequestionnaire.com/brand-positioning-questionnaire.html

Segmenting Markets

A market segment is a group of individuals, groups or organizations sharing one or more similar characteristics that cause them to have relatively similar product needs and buying characteristics (Renssen, 2016). Amstel aims for several market segments. The first market segment is age. Heineken, which is the manufacturer of Amstel, aims for people from the age of 18 to 34 (Balbi, 2013). When people turn 18 it becomes legal to drink alcohol, so it is logical that this is the minimum age where Amstel focusses on. The most beer is consumed between 18 and 34, because people are young and most people don’t have children yet or the children are still very young, so they can still drink alcohol. Once the children get older, the parents want to be a good role model and will drink less beer. So the family life cycle is also a market segment.

Another segment is gender. As you can see on television and in advertisements, beer focusses on men because they are the main beer consumers. There will be no beer advertisements in a women magazine, because they are not focusing on women. Also in beer commercials, no matter which brand, you will always see men drinking beer and not women.

Religion is another market segment. Some religions do not allow people to drink alcohol. Islam and some Christian sectors do not allow alcohol, so it would be useless to try and sell them Amstel. Amstel does not specifically focus on non-religious people, but they do focus on the people that are non-religious and religious people that are allowed to consume alcohol.

The region and loyalty are other market segments, which are linked to each other. As you can see on the figure, Amstel is most popular in the northern part of the Netherlands. The 3 provinces that consume the most Amstel are North Holland, Friesland and Drenthe. It is important that these customers stay loyal to the brand Amstel, because they are their main source of income. They will focus on their loyal customers to make sure they won’t switch to other brands.                                                                                                                        

The product positioning refers to the communication from your business to the customers. The 5 P’s are used to make this clear. The first P is product, which is what you are going to sell to your customers. For Amstel the products are the regular Amstel, Amstel Radler, Amstel Bock etc. The second P is price, which focusses on the price of the Product and that of the competitors. Amstel wants to keep their prices low so it is attractive for customers to buy. The third P is Place which focusses on where you sell your products, for example in restaurants and supermarkets. The fourth P is promotion and focusses on the advertisement of the product. The last P is people and focusses on the main target audience of the product. For Amstel this is men between the 18 and 34.

Effective segmentation has several criteria. The first criteria is the homogeneity of segments. This means that the people in the target segment should have similar product and service needs. The second criteria is the heterogeneity between segments, which means that people in different segment should have different wants and needs. Accessibility is the third criteria, so the market segment should be easy to reach, especially with promotion and distribution. Another criteria is  stability, so the segments are around long enough to take action (Renssen, 2016). Measurable is another criteria, and it means that the size of the market segment should be measurable. Substantial is also a criteria, and it means that the market segment should be large enough to get attention from the business. 

The market segments where Amstel aims for are age, life cycle, gender, religion, region and loyalty. The criteria of effective segmentation are met for these segments. The market segment age, life cycle and gender are homogeneous, because the men from the age of 18 to 34 consume the most beer, so they are similar in their needs. Heterogeneous is also met, because the needs of people in for example the market segment age have different wants and needs than people in the market segment religion. Also the segments are accessible through social media and television.

Bibliography

Balbi, F. (2013, January 21). Heineken. Retrieved November 23, 2016, from Slideshare: http://www.slideshare.net/fbalbi/heineken-16104483

Biernet. (2016, February 16). Aandeel biermerken per provincie. Retrieved November 23, 2016, from Biernet: https://www.biernet.nl/algemeen/weetjes/aandeel-biermerken-per-provincie

Renssen, D. S. (2016). Marketing Env2 Wk2 Ch7 Market Segmentation. Retrieved November 23, 2016, from Blackboard: https://leren.saxion.nl/webapps/blackboard/execute/content/file?cmd=view&content_id=_1477773_1&course_id=_30261_1&framesetWrapped=true

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Marketing Research

For the first question I had to research the Nielsen retail panel and then decide which data would be interesting for my brand Amstel. I found out that they measure what consumers buy. They monitor shopper behavior for more than 250000 households in 25 countries. Nielsen also examines key business trends by product, category, channel or market (Nielsen, 2016). The manufacturer of Amstel could use the information of the shopper behavior. With this data they can see what consumers buy and they can adjust their products on the buying behavior of their consumers. By this they can expand their target group and eventually get more consumers and more profit.

Then I had to do the same but for a different company, GfK. It is a company that gives information about the relevant market and the consumers. This information enables clients to make smarter decisions. More than 13,000 market research experts deliver global insights matched with local market intelligence from more than 100 countries (GfK, 2016). The GfK could give information about the market and the competitors of Amstel. With this information, Amstel could improve their products and become a bigger threat to their competitors. They can improve their market position and get more consumers.

Finally I made a short questionnaire to research the consumer attitude towards the brand Amstel. 

Gender:

Male	Female

Age:

Amstel	Strongly disagree	Disagree	Neutral	Agree	Strongly agree
Amstel has a nice taste
Amstel is too expensive
The design of the Amstel bottle is original
The design of the Amstel bottle looks nicer than the design of other beer bottles like for example a Heineken bottle
I drink Amstel because it tastes better than other beer brands
I drink Amstel because I’m influenced by my surroundings
The size of a Amstel bottle is perfect the way it is
Amstel pairs well with the food I eat
Amstel advertises its products in a good way
Amstel has a wide range of choices, like for example Amstel Radler
When I go out, the only beer I want to drink is Amstel
I drink Amstel at least once a week

Bibliography

GfK. (2016). About GfK. Retrieved November 16, 2016, from GfK: http://www.gfk.com/about-gfk/about-gfk/

Nielsen. (2016). Solutions. Retrieved November 16, 2016, from Nielsen: http://www.nielsen.com/ssa/en/solutions/measurement/retail-measurement.html