Promoting beer from a magical land
Heineken is a household name. A beer from a distant land; Holland, known for its culture, chocolate, and beer. Here’s how they entered the U.S. market and how the company can take steps into the future.
I have always been fascinated by advertisements, deals on products, and so forth. When I turned 21, of course, we were in college, so we’d walk along the beer aisles looking for the best deals. Most of the time, we’d be in a hurry and grab what seemed to be the best deal, but as we were checking out, I’d think about why we picked what we did. I’d think about the team that made this happen. A curiosity in me that especially manifests itself during sporting events, where we play a game during the advertisements. Before an ad plays, you guess if the ad will make you inclined to buy the product or not, and if your guess is the majority consensus, you sit back and watch everyone else drink and vice versa.
Maybe it was Mad Men, but at some point, as a computer scientist by trade, I fell in love with the process of selling.
There is an episode in Mad Men where they land the Heineken account. Everyone is arguing about who the right demographic is. Eventually, they all land on the “men drink beer, so let’s target them”, except Don. Don wants to run a test, in collaboration with Heineken, and put the promotion campaign smack dab in the front of the grocery store, in the form of a big green stack of beer. An imported, classy ‘Dutch’ beer targeted at women. After all, no one had ever seen beer in a green bottle before, and Holland was a distant and magical place.
Back then, women did most of, if not, all the shopping, and the thinking was that a wife would be shopping as usual when she walks in and is struck by the Heineken display, upon which she would grab a 12 pack for her husband for him when he gets home.
Don throws a dinner party and invites his colleagues, and it just so happens that his wife is the one that buys the Heineken, to his surprise and the surprise of all the men. It worked. His promotion worked, and everyone starts patting him on the back except his wife who yells at him for feeling like she was a part of his little experiment.
I often wondered if that actually happened. Heineken has always been a brilliantly marketed beer, and you can never go wrong with ordering one at a bar or bringing a case to a party. It is around the same price compared to Budweiser or Coors Light, but if you order one of those at a bar, or bring a case of Bud Light to a party, the assumption may very well be that you are short on cash, or why are you bringing a college-level beer to a classy function?
Heineken, like any imported beer, has to have brilliant marketing. You need to feel that you’re drinking a piece of Holland.
Since the ’60s, Heineken has made considerable improvements to marketing and is now a household name. An awesome accomplishment considering there are hundreds of imported brands of beer that are not. From Sapporo (Japan) to Gold Star (Israel), some may know, but I would not consider them household names, nor would I consider them to be beers that you just order without thinking at a bar.
At the end of the day, it is all a promotion, and for anything so specific, it is also a science.
Working in a company as big as Heineken means a lot of collaboration. You are likely working closely with your Sales Manager who in turn works with the distributor and retailers to ensure you are aligned on products, pricing, and margins that Safeway and Heineken will make with their partnership. This eventually results in thousands of price points and dates being managed by a distributed team.
In an increasingly large and connected world, that is fueled by digital systems, it seems like it would be prudent to look around for some solutions to eliminate pain points that will inevitably come from working on numerous promotions for different products across various regions.
At Boardwalktech, we’ve put together a special task force and it just so happens we spent quite a lot of time understanding the nuances that Heineken promotions and advertising face on a day to day basis, and we’ve put a lot of thought into how we can make the day to day process better. Leaning on experience from understanding the plight of other companies such as Coke, and General Motors, and carefully noting down feedback for ourselves, we’re excited to see just how the software we have developed can get to work together for the greater good of the company.
Now from my understanding, as of now, in order for customers to see the deals on shelves, the process used at Heineken can be explained like this: by maintaining team’s list of promotion types stored in various formats to determine what promotion to run in each store for each week, for example. The team navigates local taxation laws to ensure the distributors and retailers meet their margin and revenue targets while maintaining reasonable price parity.
Then someone would email this to the category planner who is getting a lot of these, so in an effort to balance productivity and work, he or she glances down to see if things are moving along. Still, he or she had to manually understand each promotion planners’ format separately, (because there are likely differences in that format) to see if one plan is cannibalizing other products by allowing one promotion to inadvertently negatively affect another.
Another item he or she will be looking at is if the lifts are reasonable, whether or not the margins goals are being met.
This would lead to emails back and forth, many of which are potentially redundant, all the while having to then manually merge data from Neilson rankings on the impact of our promotion.
The process will presumably take a long time. Colleagues will have to flesh out errors, guesswork, and before you know it, more effort was spent on data management than on analytics and impact evaluation!
If one can limit unmitigated manual entry then one will limit manual error, and ultimately do a better job.
Now there is a method to everything, but after reading that, doesn’t it make you wonder if there is a better way?
From my point of view, this is exciting, simply because of the beer I drink, and I drink Heineken, and it is interesting to see why people order what they do, from a large beer selection, so it will be incredibly interesting to see how teams within Heineken creatively use our new framework to create new, innovative solutions that will eventually see the light of day. I will then be there on the other side and smile every time someone orders a Heineken.
You see, with the Heineken Price Promotion Planner deployed for North America, Heineken has untangled the manual processes I described above and started digitally collaborating, managing and standardizing regular operations while assembling new solutions, and assembling unique and creative promotion scenarios each week, month, or as needed, as opposed to other companies and teams that often just use the same promotion and roll it into the next year.
We want to make your work easier by providing functionality that allows you and your team to seamlessly communicate intentions and lines of thinking between colleagues so that you can finally have the ability to evaluate the good, the bad, and the ugly to improve the promotional process and make better decisions, faster!
If you have any questions at all, feel free to ping us at linda.ferrara@boardwalktech.com.
Our communication lines are wide open, and not even social distancing will prevent that.
Till next time,
Proost (Cheers in Dutch)!
Roh Krishnan | Product Strategy and Avid Beer lover @ Boardwalktech
