POSITIONING IMPORTED BRANDS

Heineken in Tanzania
Heineken N.V is one of the world largest breweries not only in Netherlands but
globally. Heineken N.V has been able to remain one of the leading consumer and
corporate brands for more than 130 years. (Heineken N.V 2008). As the leader I its
industry the company faces directly however, the challenges in many of its
customers to deliver steady profit growth, but also focusing on building long-term
future on brand image and business growth. (Heineken 2009). More specifically, the
company is focusing its resources and efforts on driving the growth of its brand
image and improving the financial results both with in and overseas markets. The
employees of the company world wide are enabled by the company to use their
potentials to build performance based culture. At Heineken N.V. performance is the
yard stick and every employee is faded to this notion as guiding principle on day to
day operations. ( Heineken International 2009)
With operations in more than 170 countries world wide the company aspires to
improving financial performance as its chief corporate objective through acquisition.
Partnership and distribution strategies to create value to shareholders and
customers. In a nutshell, the main objectives of the company could be summarized
as follows;
1. To accelerate sustainable top-line growth
2. To accelerate efficient and cost reduction
3. To speed up implementation of corporate strategies
4. To focus on those markets which the company believes it can win

Beer industry-Tanzania
The beer industry in Tanzania can be traced back to 1912 When the first beer
was introduced by colonial administration. After achieving its independence in
1961 and after arusha declaration of 1967 the government proclaimed its political
and economic ideology which saw the country opting to build a socialist and self
reliant country. All major means of economic production were nationalized by the
state and the government was the sole producer and distributor of both products
and services in the country. For more than 25 years the beer industry like any
other manufacturing and service industries was fully owned and controlled by the
state. During this period we experienced an acute shortage of the beverage in
many areas. In fact, the demand for product over shot the ability of the then
Tanzania breweries limited to supply the same.
Trade liberalisation in the mid of 1990s over saw the privatization of non
performing manufacturing plants and TBL had no excuse on this government
decision. The international beverage giant SABMiller is owning majority of the
company shares and production and distribution is no longer an issue of the
moment. Apart from TBL who is the largest brewer in the country, competition is
mounting in the industry as Serengeti Breweries ltd serious competitors of TBL is
improving its operations and distribution to pose challenges to the current market
leader. The brewing market is predominantly dominated inevitably by two brewing
companies mentioned above; however, some imported brands such as Heineken
and wind hock are posing challenges to marketers of the dominating brewers
TBL& SBL.
In effect, Beer industry is one of the competitive industries in the country despite
having few players. The country is multicultural society with more than 120 local
tribes and two big religions Islam and Christianity. To the ardent Christians and
stanch Muslims the product is forbidden and marketers find themselves in a deep

trouble marketing the product to the people of this nature while their number is
growing tremendously. Another challenge to marketers is concerning income
distribution. Analysts suggest that, as the national income grew at an average of
7% per annum in the last ten years the same should have been reflected in the
peoples standard of living and particularly the income distribution of the citizens.
Instead, there is an inverse relationship between economic growth of the country
and peoples standard of living.
This is the serious challenge to marketers and business owners operating in the
country as purchasing power of the people remain un impressive making demand
for non basic products to grow slowly. Beers like any luxurious products are
bought after someone has fulfilled his/her basic needs like foods, shelter and
clothing. Demand for the product is fairly elastic as majority of the customers are
price sensitive and their incomes are growing at decreasing rate. Furthermore,
the demand for the product is seasonal with high demand in weekend and end of
month. In rural areas where majority of he people are making their lives from
agriculture and animal keeping, the situation is even worse as people are earning
once in a year. In view of this, some innovative marketers have developed some
label names to cuter for the seasonal demand in these areas.
Beers are viewed by some analysts as more of habitual products than luxurious
products. This is evidenced by number of bars and restaurants in major cities;
Dar es salaam, Arusha and Mwanza to mention but few. Kinondoni district in Dar
es salaam is believed to be having a lot of bars and restaurants than any district
in Tanzania. It is not uncommon to see all these bars full of people everyday in
the evening from Monday to Sunday. It is astonishing when you compare
peoples per capita income and the amount of money spent everyday in these
outlets.

POSITIONING HEINEKEN IN TANZANIA

As an international brand imported from a country which has a good track
records and stereo type of its brewing industry, Heineken beer is positioned to the
target consumers as a world class beer that suit the requirements of the
customers who are quality mania. In addition to that, the beer is positioned as
brand for the modern people regardless of where they are in the universe
(People who can choose the best product among the competing brands of the

same nature.
The product is positioned as highly differentiated from other brands imported and
locally produced and distributed in the country. More specifically, the beer is
targeted to the young and middle population between 18-35 years of age who
account for 45% of the total population.
The targeted customers, however, should not be price sensitive in nature as the
price of the beer is a little bit higher compared to other brands. One of my friends
who is a regular drinker observed that Heineken beer is preferred my majority of
drinkers both regular and occasional; however, the limiting factor is price of the
beer. If you want to testify my words you better go to any high profiled occasion
where there are several label names and every one is free to order any drink of
his/her desire for free, within no time you will be told Heineken is sold out and
you can choose from other label names available. From his words I came to
realize that, to an ordinary Tanzanian to whom drinking beer is the way of life
Heineken is expensive as you need to dig deep into your pocket to enjoy your
day. Heineken is for the elite ones one of my friends joked to me secretly that I
always drink Heineken on special occasions as I can not afford to buy the beer

day in day out, I can only afford to take few of them if I have to pay from my own
pocket or if I am having a new friend and I want to impress.
Below is the comparison of average prices for different beer label names in Dar es
salaam as collected most recently.

Label name
Safari Lager
Kilimanjaro Lager
Ndovu Lager
Serengeti Lager
Heineken Lager
Tusker Lager

Alcoholic Cont.
5.5%
5.0%
4.5%
5.0%
4.5%
5.0%

Volume
500ml
500ml
500ml
500ml
330ml
500ml

price
2000/=
2000/=
2000/=
2000/=
4000/=
2000/=

In Tanzania the beer is solely distributed by Mabibo beers, wines and Spirits
Company based in Dar e s salaam. According to the managing director of the
company ms Benedicta Rugemalira who quoted by all African.com as saying the
company is the sole importer and distributor of the product in the country. Others
who are importing Heineken are importing illegally. We have noticed imported
Heineken illegally from neubouring countries this thing poses unfair competition and
government is losing money in term of imported duties and other charges.
The CEO is confident that, the beer is widely distributed in many areas and the
company is doing everything it can do protect the brand image by educating users
on the fake Heineken beers entering Tanzania market. As the franchisee we have a
code number of an Imported Heineken which is 11330 and that of Wind hock is
MB36.
Business analysts believe that being a sole distributor of the Heineken the company
could be the victim of its own success as more and more companies are pressing
the regulatory bodies responsible like the competition commission to allow
competition in importing the beer. Probably, competition in importing the beer could
open doors and rooms for price reduction and makes the brand affordable to the

majority. Also competition could enhance distribution as in some areas the beer is
always sold out. It is not known explicitly as to why the product is scarce in some
bars and restaurants. The survey conducted most recently in Dar es salaam
revealed that, the beer is always available in high street bars and restaurants, big
hotels and big cities. This reality could be partly as a result of companys pricing,
distribution or brand image and strategies.
Advertising is mainly through billboards, big posters, and brochures, on national and
international channels. Heineken is communicated as an official sponsor/drink of
UEFA champions league a tournament which is so popular in Tanzania.
Sales promotions events are organized by the local distributors with the view of
stimulating sales of the beer to its target market. FM ACADEMIA BAND popularly
known as wazee wa ngwasuma, wazee wa mjini, wazee wa pamba, wazee wa bling
bling is regarded as an official band for the product. The band is organizing its music
shows with the view of not only entertaining the public but also promoting Heineken
beer among the occasional as well as regular drinkers. It is not uncommon to find in
many of the shows organized by FM ACADEMIA BAND only Heineken beer as the
sole label name available and sold at relatively low prices as in other bars and
restaurants. The idea of promoting the beers using music bands is very common in
todays Tanzania business environment as more and more label names/brands are
sponsoring the shows organized by local established music bands with the view of
winning the hearts of customers. This could be as a result of the fact that, the two
(music shows and drinking are going together if not in the same direction)

And so to the future

Plans are underway to build a manufacturing plant in the country by Mabibo Wine
and Spirits Company. This is according to the CEO a step forward in making sure
that the beer is widely distributed and create more jobs to the people of Tanzania
apart from contributing much more to the economy of this country through taxes. The
challenge, however, is on maintaining the quality standard of the beer and matters
relating to intellectual properties and piracy.
Questions.
1. In your own view what are the major challenges facing Heineken beer in the
Tanzania beer market?
2. Analyse the positioning of Heineken and that of local label names. What are
similarities and differences in their positioning?
3. What are the implications for Mabibo wines and spirits company marketing
strategy in positioning Heineken in Tanzania?
4. What could be the advantages and disadvantages of manufacturing and
distributing the product within the country?
This case was prepared by Omary Swallehe, lecturer of marketing and strategic management-Mzumbe University