I.

BUSINESS DESCRIPTION

a) ABOUT THE COMPANY

HISTORY:

H e i n e k e n i s a
barley, and hops (together with the yeast) [ CITATION Hei18 \l 13321 ].

Founded by Gerard Adriaan Heineken when he was 22 years of age which started in
Amsterdam, Netherlands in 1864. Gerard had purchased a brewery which was known as De
Hooiberg (the haystack ) that became Heineken’s Bierbrouwerij Maatschppij. Gerard’s son
Henry Pierre Heineken who led the company from 1917 to 1940 developed techniques to keep
high quality of their product. They started to export product after the World War I. In 1933,
Heineken was introduced in America and became one of the best-selling beer brands. From
1940 until his death in 2002, Alfred Henry “Freddy” Heineken worked for the company and was
appointed Chairman of the Executive Board in 1989. During his time, Heineken’s strategy was
to purchase their competitors’ companies and close them which helped the Heineken to
increase their stock price. In 1975 they merged with their biggest competitor, Amstel, which was
closed in 1980 [ CITATION Tom19 \l 13321 ]
Heineken , as an independent global brewer is number one brewer in Europe and
number two in the world. Operating globally in more than seventy countries with 250
international, regional, local and specialty beers and ciders; and produces 170 brands. This has
made efforts to increase their exposure to emerging countries which they see will be the catalyst
for growth.[CITATION Hei20 \l 13321 ]

1
 SUBSIDIARIES:
Heineken has its subsidiaries’ brands which are in: Europe, Russia, France, North and
South Africa, and Oceania
1. Heineken Italy that began in 1974 with the Acquisition of the Dreher Brewery.
Heineken Italy has six brewing plants which can be found in Pollein (AO),
Masssafra (TA), Messina, Comun Nuovo (BG), Assemini (CA), Mondo Birra
which was bought back in September 24, 2012.
2. Birra Dreher founded in Trieste in 1896 and was bought by Heineken in 1974
3. Birra Ichnusa found in 1912 in Assemini, also bought by Heineken
4. Birra Moretti found in 1859 in Udine by Luigi Moretti, but bought by Heineken in
1996, however Heineken sold this to new Castello beer company thereafter, and
bought again in august 11, 2010.
5. Affligem Brewery which was originally licensed to brew beers under the Affligem
Abbey brand,but was taken over by Heineken and renamed it with Afligem
Brewery.
6. Athenian Brewery found in 1963. One of the most important beer producers and
traders in Greece and is member of Heineken Group N.V
7. Amstel Brewery found in Amsterdam, Netherlands in 1870 and in 1968 was
taken over by Heineken.
8. Beamish & Crawford in Cork which is brewing Irish stout and Red ale. Bought by
Heineken in 2009
9. Bochkarev Brewery a Russian Brewery that started as Bravo a soft drinks
company which was sold to Pepsi and in 2002 Bravo was bought by Heineken
and brewing beers that are not under Heineken’s brand name.
10. Brand Brewery found in 1871 as a Dutch brewery and was bought by Heineken
but remained the management thereafter.
11. Caledonian Brewery a Scottish brewery found in Edinburgh in 1869 and is
expert in makinf Scottish Ale
12. Central de Cervejas Brewery- since in April 2008 Heineken has taken over this
Portuguese brewery that is found in 1934
13. Cruzcampo Brewery which is the biggest beer producer in Spain founded in
1904. Heineken then bought this from Guinness. This has sponsored the
Spanish national football team.

2
14. De Ridder Brewery in Maastricht – taken over in 2002 by Heineken
15. Furstenberg Brewery founded in1283 in Donaueschingen, Germany and was
bought by Heineken in October of 2004 through their Brau Holding International
(AG company which is co-owned by Schorghuber).
16. Karlovačko Brewery a Croatian Brewer fpunded in 1854 and in 2003, a major
stake was acquired by Heineken International.
17. Krusovice brewery is a Czech Brew founded in 1581 and in 2007 Heineken
bought it.
18. Murphy’s Brewery known as Lady’s Well until was bought by Heineken in 1983
and changed it to Murphy Heineken Brewery Ireland Ltd. Found in 1856 in Cork,
Irelend
19. In France: Brasserie Pelforth bought in 1988 by Heineken International
20. Skopje Brewery is a joint venture of Coca-Cola HBC AG and Heineken
International.
21. Starobrno Brewery founded in Brno, Czech Republic in 1325 now is owned by
Heineken.
22. Zagorka Brewery founded in Slovakia in 1969 acquired in 1995 by Heineken.
23. Zywiec Brewery in Poland founded in 1852 and in mid-1990’s was bought by
Heineken.
24. Al Ahram Brewery an Egyptian brewery founded in 1897 nad bought by
Heineken in 2002 and is producing Stella

3
 PARTNERSHIP WITH FRASER & NEAVE
Heineken Asia Pacific (Formerly Asia Pacific Breweries, APB) is an Asia Brewery
company founded in 1913 as Malayan Breweries Limited (MBL). In a joint venture in
1989 between Faster and Neave this was renamed as Asia Pacific Breweries. In 2003 it
gained its present name after merging with Heineken Asia Pacific.
In Oceania, DB Breweries is owned by the Heineken Asia Pacific. A New
Zealand-based brewing company founded in 1930.[ CITATION Pau17 \l 13321 ]
Asia Pacific Breweries this is producing Tiger beer originated in Singapore and
Reeb of China. Tui Brewery that was taken by the DB breweries in 1969 aws established
in 1889 in Wairarapa region of New Zealand. And lastly, the Monteith’s Brewery
Company was bought by DB brewery and closed its Greymouth brewery in 2001.
[ CITATION wik \l 13321 ]

BRANDS UNDER HEIENEKEN

 Brewing company
 Lasko brewery  Scrumpy Jack
 Maes pils  John Smith’s Brewery
 Mutzig  Stolichno
 Newcastle Brown Ale  Strongbow
 Parbo Bier  Tiger Beer
 Piton  Woodpecker Cider
 Prestige  Zagorka
 Royal Club  Zlaty Bazant
 Sagres

JOINT VENTURE

Sedibeng Brewery – Heineken and Diago (a British multinational alcoholic beverages

company) in 2010 agreed on a joint venture. This was how Heineken entered South afica.

4
5
In 2016, Heineken signed a joint venture with ABI (Asia Brewer Inc.). The ABI upgraded
their plant in Cabuyao, Laguna and El Salvador, Misamis Oriental so to brew Heineken
brands. [ CITATION Iri16 \l 13321 ]

Photo by Chris Schnabel/Rappler

Became: AB Heineken Philippines, Inc. (ABHP)

6
THE HEINEKEN REGION HISTORY:

From the earliest joint venture with F&N to build a brewery in Singapore in 1931
up to last year’s strategic partnership with China Resources.

It was in 2016, that Heineken expanded their operations to the Philippines

together with the other operations in Myanmar and East Timor.

7
8
 b) PRODUCT OFFERINGS
 There are other beers that are
produced under Heineken which
are:
Heineke
n Dark - a

brewed by Heineken to target the United

States in 2005 but started the development
in 2004.
Heineken Tarwebok – which means
European Dark Lager beer brewed by
Heineken Wheat bock in English. This is a
Heineken in Netherland.
bock beer that is a strong lager from
Germany. Produced by Dutch brewing
company Heineken and made in
Netherlands.

Heineken Oud Bruin – called in English as

(Heineken Old Brown), a beer distributed by
Heineken International from Netherlands.
This beer is brewed from water, barley malt,
and hops using-fermentation
and has 2.5% alcohol by volume .
Heineken Premium Light – It is labeled as
( Heineken 3) in Australia. This light beer is

9
Heineken Lager Beer – is the flagship
product of the company. Which means that
this product is the company’s 9core product.
Also beers like: Anchor, Larue, Tiger,
Bintang are now acquired by Heineken.

These are the Heineken and Asia Brewery Inc. products that can be found in the
Philippines.

10
  Non-alcoholic Beverages that Heineken Offers

1. Amstel Zero
2. Birell
3. Fayrouz
4. Heineken 0.0

11
  There are also products that does not directly carry the name of
Heineken which are:
 Affligem Blonde, Pale ale, Affligem Kaiser, Edelweiss Snowfresh,
Dubbel, Affligem Triple, Tripel and Desperados
Ffligem Paterdvat and a Belgian Ale.
 Amstel Lager, Amstel Ligth, Amstel,  Krušovické černé, Krušovické černé
Amstel Free 3.5%, Krušovické Imperial 12°,
 Bochkarev Lager (Bochkarev svetloye), Krušovické Jubilejní ležák, Krušovické
Bochkarev Classic (Bochkarev ležák 12°, Krušovické Ale MoC
klassicheskoye), Bochkarev extra Dovolená 5,3%, Krušovické Mušketýr,
(Bochkarev krepkoye), Bochkarev Krušovické Radler, Krušovické světlé
without alcohol (Bochkarev 10°
bezalkogolnoye)  Murphy’s Irish stout and Mrphy’s Irish
 Brand Pils (sold in the US as Royal Red
Brand Beer), Brand Urtyp, Brand Oud  Pelforth Ale, Blonde Brune, Pelforth
Bruin, Brand Cuvee, Brand Imperator, Amber, George Killian’s
Brand Dubbelbock, and Brand  Skopsko,
Sylverter.  Starobrno
 The Cruzcampo beers: Cruzcampo  Zagorka, Stolichno, Ariana
Pilsen, Cruzcampo “Gran Reserva”  Żywiec Full a pale lager, Żywiec
,Shandy Cruzcampo, Cruzcampo Porter a Baltic porter, Żywiec Full
Export, Cruzcampo Sin, Cruzcampo Light a pale lager, Królewskie (English
Navidad, Cruzcampo Light, Cruzcampo translation: Royal)
Pilsner, Big Cruzcampo, El Leon,  Stella Local, Stella Artois, Sakara Gold
Krone Lager, Spieler Pils. 50cl, 33cl - 4.0%Alc/vol, Sakara
 Wieckse Wiite – a White Beer Weizen 50cl - 5.0%Alc/vol (German
 Furstenberg Gold, Qowaz (a drink mix Weißbier Style Brew), Sakara King 50cl
of lemongrass, cola, and wheat beer) - 10.0%Alc/vol, Meister Max -
 Karlovačko pivo (lager), Karlovačko 8.0%Alc/vol, Sakara El King (Double
Radler lemon (radler), Karlovačko Imperial Lager) - 15.0%Alc/vol,
Radler grapefruit (radler), Karlovačko Desperados 33cl - 5.9%Alc/vol -
crno (dark lager), Karlovačko Rally Tequila Flavored Lager
(non-alcoholic beer), Gösser Dark,

12
  Rex Strong Beer, Meister Export, ID  Almaza Pilsener, Almaza Pure Malt, Al
Edge, ID Double Edge, Cubana Rum Rayees beer, Almaza Radler, Almaza
mix, Butler’s Gin Mix Light
 Amstel Lager, Windhoek Lager,
Smirnoff Spin, Smirnoff Storm
II. ORGANIZATIONS’ CHANNEL ENVIRONMENT

a) GOVERNMENT
There are some rules and regulations that Heineken should follow upon entering the
country. Which are : excise tax on distilled spirits. Republic Act No. 6956 Sec 1. Sections 138(a)
and (b), 139, 140 and 142(c) and (d) or the National Internal Revenue Code. There is and
increase of P5 imposed at the beginning of the year from the P40 last year that is for the
fermented liquor (e.g. Beer)[ CITATION Dep19 \l 13321 ]

The Philippines’ logistics industry must pass through twenty-two regulating agencies in
the whole business cycle. These regulations can be classified as Economic regulations which
can help the economic aspect such as pricing, market access. This regulation increases the
competitiveness of the economy’s industries which makes the products accessible and
affordable to consumers, also increase the country’s level of competitiveness and productivity,
and generates more employment. Social regulations which ensure the public that the products
are safety – promoting better health and human conditions and provide healthy and safety
environment. Administrative regulation which helps the government to enhance their services
through getting more information for the better decision making.

13
These are the government agencies and regulations:

14
 The following will be the factors that influences and the consequences if Heineken won’t
be able to comply the following regulations:

[ CITATION DAP17 \l 13321 ]

Not only Heineken is subjected to promote responsible drinking but all the brands of
liquors there are. There is guidance that they should follow such as: the recommended level for
safe alcohol consumption, underage drinking in the country, and even the liquor ban and curfew
in the country.

15
 b) COMPETITORS

Being part of the AB Heineken Philippines, Inc., the distribution channel revolves around
the capabilities of Asia Brewery who they choose to brew and distribute their product –
Heineken and Tiger beer.
VERTICAL COMPETITION:

The main competitor of the Asia Brewery in their

industry is the San Miguel Brewery, Inc. However,
even if Heineken has is in joint venture with the AB
Inc. their products still compete, but typically they aim
the marketing at different segments of the market. AB
Inc has beers that compete in an overall attempt to
win more of a share of the market.

Boozy Liquor Delivery carries many local and

international brands to deliver within the Metro Manila.

T h e s e a r e t h e
Heineken’s competitors. Sam Miguel Inc
has their own brewery in the Philippines
and is the biggest and first in the
Philippine industry, they also have
brewery in Darong, Sta. Cruz, Davao del
sur which is advantage for them to cater
Davao Region.
c) MARKET

16
 B e i n g t h e m
surely knows and studied
well the standards,
strengths and weaknesses
of the market, as well as its
threats and opportunities.

T h e r i s e o f t h
performance of Heineken
who continues to increase
their distribution
Nationwide, hence, came
to Davao in June 2018 to
better serve and reach
easily other set of
consumers.

[ CITATION Chr181 \l 13321 ]

17
 d) TECHNOLOGIES

The level of technology has is not in great shape, but not the worst in the world.
According to Ian Nicolas Cigaral in his Philstar article, “Philippines climbed to the 55 th spot out of
82 economies tracked in the attest Technological Readiness Ranking published by the
Economist Intelligence Unit”.[ CITATION IAn18 \l 13321 ] Even with this, there are still ways that
Heineken uses to serve better their consumers such as using all the social media means
available like Facebook. Drinkies offers a door to door delivery that is available to places
like: Makati, Taguig, Pasig, Mandaluyong, QC, Paranaque, Las Pinas, Muntinlupa, San Juan,
Pasay, Manila. In Davao they also use social Media to reach consumers and make them aware
of their sponsorships and partnerships with certain places like in Aposento.[ CITATION Chr181 \l
13321 ]

There is also the use of Emails and Mobile Phones for communications between the
channel members of Heineken. Scanners, Computerized inventory Management (for big
establishments like malls) and even cloud computing.

https://www.google.com/search?
rlz=1C1EKKP_enPH797PH797&biw=799&bih=944&tbm=isch&sxsrf=ALeKk0165xP2NXQAHvNkAwvEbTBjU_1Zig
%3A1582963311796&sa=1&ei=bxpaXoOeMKKUr7wP1sWwmAU&q=technologies+ifor+marketing&oq=technologies+ifor+marketing&gs_l=img.3...2873.8634..8814...4.0..0.393.
4048.0j7j9j2......0....1..gws-wiz-img.......35i39j0i8i30.lhECH88tVI4&ved=0ahUKEwjDkZHvpfbnAhUiyosBHdYiDFMQ4dUDCAc&uact=5#imgrc=EN5gIy4aApxdeM:

18
https://en.yelp.com.ph/biz/sm-supermarket-makati

19
 e) SOCIO-CULTURAL

The diversity in the Philippines is a challenge for Heineken in terms of their dealings,
marketing, and distribution strategies. However, the being welcoming of the Filipinos help
Heineken to shape their strategies.

The social networking is not new for the Dabawenyos, therefore, it is an advantage that
can help the Heineken more in their dealings throughout their distribution process.

All over the world we can find Filipinos, like this, Heineken is highlighting the
“being everywhere” of the Filipinos when they entered Davao Region using the Fil-Am NBA
Star, Jordan Clarkson as an ambassador of their campaigns. Filipinos having pure natural
talents, qualities, and strong heritage make them qualifies to step on the Global stage.

[ CITATION Chr181 \l 13321 ]

20
 III. PROFILE OF THE COMPANY’S CHANNEL FLOW

a) BUSINESS MODEL FRAMEWORK

Manufacturing Model:
They are producing beverages specifically Heineken and Tiger beer in the Philippines.
Heieneken helps the members of their distribution channel through their customer relationship
management (they are the most liked page in Facebook). Even if they are producing products
for mass market, through their chosen partner (ABI) and its warehouses which are acceptable,
they can easily deliver their products.[ CITATION Mer20 \l 13321 ]

With the joint venture of ABHP, the Heineken products are traveled from its
manufacturing in El Salvador, Misamis Oriental down to Region XI.

http://careers4mktgco.asia-brewery.com/distributors.html

21
Heineken Distribution Channel:

Sales Office

Manufacturer

Logistics Center

22
 Either Local Delivery Team

Retailer

Consumers

23
 *The source does not want to mention specific pricing due to the confidentiality of the
matter, however he said that before delivering the products there has been a specific prices to
each of the products produce and the SRP’s.

 Manufacturing – although the manufacturing intended for Visayas and

Mindanao is the El Salvador, Misamis Oriental ABHP Manufacturing, these
regions asks for the help of Cubayao, Laguna manufacturing to supply them
extra stocks during seasonal circumstances. Like: Christmas or Araw ng Davao.
 Logistics Center – this part of the Heineken’s Logistic Channel distribution is the
responsible for the assigning of where the products should be distributed.
 Sales Office – this distribution channel is the responsible to organize and to
make the local delivery team to understand the processes and other
empowerment they are entitled of.
 Local Delivery Team - are responsible to mediate through the negotiation of the
clients and the company with the help of Trade Marketing which is the
responsible for the brand imaging and of the product.

Wholesalers = Retailers – there are instances that they are practically the same in the
processes of ordering and negotiations. Like 7/11s are classified as retailers, but in terms of the
promotions and discounts they mostly are treated as wholesalers.

 Malls – Malls are considered as the Modern Trade Sector. The

negotiations are basically based on the percentages that both of the
parties are going to get with a win-win situations. In terms of their
promotional offers, Heineken always considers the image of their clients
in their percentages and marketing assistance negotiations.

Percentages offer: It can be in form of 70 – 30 or even 80 – 20

Marketing assistance: Dicers, Promo girls, Materials (refrigerators, draughts), other
promos like winning the raffles

*All their transactions should be reflected with low of cost of sales. Even the negotiations
that their clients raise should be with the limitation of cost of sales and subject to the approval of
the Trade Marketing.

24
 IV. INVENTORY MANAGEMENT

a) LEAD TIME

Sales Record of a Territory Executive:

Record in Cases x 8 Agents (within Davao)

+ Number of deals made for the Off-Premises Accounts
3 weeks to 1 month

In calculating the Leadtime, Heineken considers the outflow of stocks (from their clients’
orders) and then calculating the inflow from their Manufacturing.

I n c a s e o f R e g i
acquired through the retailers about
the supply delay and other factor that
might occur, the calculation of ABI
supply from Misamis Oriental takes at
least a week.
https://www.google.com/search?

q=misamis+oriental+to+davao+city+Cargo&rlz=1C1EKKP_enPH797PH797&oq=misamis+oriental+to+davao+city+Cargo+&aqs=chr
ome..69i57.10764j0j7&sourceid=chrome&ie=UTF-8

25
 b) MANUFACTURING FACILITY

A f t e r t h e j o i n t
the manufacturing plants so it will be able to
produce the product of Heineken. [ CITATION
Iri16 \l 13321 ]
T h e E l S a l v a d o
market in Visayas and Mindanao. It is the first
brewery int the Philippines to be set up in
Mindanao.
It has annual production of 2
million hectoliters of beer.
[ CITATION CDO18 \l 13321 ]

The manufacturing facilities for

the ABHP to produce the Heineken
Beer have their Raw material Storage.
This is to provide them enough raw
materials available in fermenting the
beer. The brew house/or place where
the first step of creating the beer
happens. Next is the wort cooling to
cool it down after brewing and the yeast
for fermentation can be added. They
also have filter equipment and bright
beer tanks where the filtering happens
until the filling and packaging happens
in the other section of the plant.
[ CITATION Hei \l 13321 ]

c) INVENTORY TECHNIQUES

26
 Setting par Level
The members of the distribution channel of Heineken under the joint venture with ABI
ensure to have enough stocks of the Heineken products in their storage. They have certain
number of boxes (if bottles and cans ) and kegs left in their storage which indicates the time to
create another purchase order.

First-In First-Out
Every retailers of AB Heineken Inc. knows the effect of FIFO to their stores. This part of
their employee trainings when being hired. This is a very important principle in inventory
managements especially to AB Heineken given that their products have certain shelf life to be
kept. Therefore, before arriving near the expiration date, with the shelf life allowance of at least
a year, the products must be distributed until reaching the consumers by following the FIFO
method.

Accurate Forecasting
To have an accurate forecasting, any firms would be able to predict the estimated the
next year’s product demands. Heineken use the R&D to find and opportunity in the market
where they could serve their expertise using all the all the possible assets they have. Given that
the expectations of external and internal sources, Heineken can tell how the market will
go[ CITATION Sta19 \l 13321 ]. Using the previous years’ sells in the same seasons, months,
circumstances, and other factors that shows the forecasting of the future sell, AB Heineken will
know how many hectoliters of beer they are going to produce in a specific time of the year.

27
 V. CHANNEL MEMBER BEHAVIOR AND COORDINATING MECHANISM

a) CHANNEL CONFLICT

This is the only problem that has been found in channel conflict of the Heineken in
Davao can be labeled as:

Vertical conflict. Although the local delivery team ensure the fair trade
happens between their company up to their clients (wholesaler/ retailer)
there are still aspects that are out of their control like the bars, and other
convenience stores in terms of promotion and prices.

[ CITATION Hit17 \l 13321 ]

28
 b) CHANNEL COOPERATION

The channel cooperation of Heineken is perceived in the relationships of all the

members of their distribution channel. Without the good strategy of the logistics center,
Heineken might not be able to distribute their products equally with accurate proportion of each
region’s needs. Furthermore, the usage of Local delivery’s power is being maximized during the
negotiations between clients and the trade marketing. And the understanding of the clients
about the offerings that Heineken can offer due to their standing in the market.

These all would not happen without the main source of the distribution channel – the
manufacturing. Because of the maintained facility of manufacturing and its processes to
produce the products, there has been good product flow.

This makes them more efficient in delivering their products to their clients with the given
Leadtime and other circumstances.

https://www.google.com/search?
q=cooperation+channel&rlz=1C1EKKP_enPH797PH797&sxsrf=ALeKk03W9OixgLIxXFMZAULdy_E1ACVETg:1582959251069&source=lnms&tbm=isc
h&sa=X&ved=2ahUKEwjD_enelvbnAhW0LqYKHVkQCeYQ_AUoAXoECBAQAw&biw=800&bih=882#imgrc=rJlP8ekCs0m4IM:

29
 c) CHANNEL CONTROL

Although there are some aspects of this topic which cannot be known due to
confidentiality of the source, but in knowing the company’s Leadtime, the channel has been
smoothly running from the manufacturing down to the consumers. The cordial relationship of the
channel members helps the distribution of the product.

These are some support functions that would help in order to control the channel
member of Heineken other than the finances, transportation and even some insurances:

 The delivery of the product is based on the purchase order of the clients, therefore if the
clients have ordered the products not within the Leadtime there will be a shortage in the store of
that client.
 In manufacturing aspect, if there has been a delayed of the supply purchase, the
manufacturing process would not be able to deliver on time the products that are supposed to
be produced.
 The empowerment of the Agents, this includes handing of negotiation to the Trade
Marketing. If the agents handed the wrong information to the in charge of this matter, there will
be delayed of transactions.

https://www.google.com/search?rlz=1C1EKKP_enPH797PH797&tbm=isch&sxsrf=ALeKk01PqbECm-
UZVObhIIEIJubnUePpLA:1582959303126&q=channel+control&chips=q:channel+control,g_1:distribution&usg=AI4_-
kTRSWi7aU91lw1UgKrfpHY65sc6vg&sa=X&ved=0ahUKEwiLn9P3lvbnAhUpyYsBHSRGCMcQ4lYIKygB&biw=800&bih=882&dpr=1.35#imgdii=TqN6fPkjCkbGuM:&imgrc
=4Hw1Qyhz5zgbdM:

30
 VI. ASSESSMENT OF CHANNEL PERFORMANCE

The channel performance of the Heineken as labeled as beginner in Davao Region is

so far in good running. According to the source who previously worked with Heineken, there has
been good monitoring in terms of their clients’ promotions and pricing strategies. Although there
are some of the retailers who carries their products like bars would differ prices and promotions,
but it is still within the scope of proper selling their products.
Their Leadtime has been accurate although there are times like seasonal circumstances
that product shortage happens in some of the clients’ stores. But it is aided immediately with the
help of the back-up supply from Cabuyao, Laguna.
Making their distribution channel as their own is an advantage. From manufacturing
up to their product carriers where they are being helped in marketing aspects makes them see
easily the possible threats and opportunities in the field. Their strategy of empowering their
agents with negotiation makes the process faster and easier.
In terms of their inventories, there has been no problem except miscalculations of
orders during peak seasons, where shortage happens.
Conflict in the Channel. Mostly this happens between the agents and Heineken.
Although the source had not confirmed any of agents’ misconduct, but this could possibly
happen due to the personal imperfection of some agents with the involvement of moral conduct
during negotiations with the clients. In overall performance, the Heineken has proven its
expertise in distributing their products.

VII. COMPANY’S CURRENT DISTRIBUTION STRATEGY

They are using Indirect Distribution Strategy to bring their products to the consumers,
but they have their own distribution personnel that are being primarily involve in the
promotional strategy of their clients. This make them able to obtain their objectives because
most firms that do not pay more attention of their members do not reap much of the tangible
rewards[ CITATION Ros16 \l 13321 ]. From their manufacturing to their wholesalers, retailers and
to their target consumers they aim to secure the cooperation of their channel members.

Being a manufacturer that prides itself in providing prestigious and good quality of beer,
Heineken is very careful in choosing their channel members. Depending on the image of their
wholesalers/retailers, their promotions varies.

31
VIII. ROLE OF THEIR SUPPLIERS

Raw Material Suppliers:

The role of their suppliers can make a major contribution to their performance in the
whole supply chain demand and to their product as well.

The level of their product quality, if the suppliers are not careful enough with its quality
management to supply the materials for Heineken, this will affect the overall taste of Heineken’s
products. This will lead to a bigger problem of losing consumers and even the business itself.

The delivery of their products can be delayed if the suppliers are not on time in delivering
the needed materials for the productions. Both Heineken and the suppliers should also consider
circumstances that might happen along the shipment of the materials.

Heineken’s revenues will greatly be affected. In the delay of material arrivals, there will
be great waste of time and sales. But also, can affect the Heineken positively in terms of the
credit limits that their suppliers offer.

In other words, the suppliers can either pause or prosper their business. Heineken
should have optimal flow of high-quality and cost-efficient materials so to make their products.

https://www.flaticon.com/free-
icon/supplier_2103848

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 IX. ROLE OF THEIR MANUFACTURERS

Heineken’s Manufacturing is responsible for the

perfection from its first step down to the process of
packaging the finish goods. The Manufacturing division
should keep risks under control; not just product matters
but even of the numbers of products produce to maintain
the level of surplus and shortage.

https://www.flaticon.com/free-icon/manufacturing-plant_416212

The risks of hiring unqualified employees: this can be the beginning of every disaster.
Even if Heineken would have great numbers of suppliers but the manufacturing staffs do not
know when, what, and how much raw material inventories are needed to be ordered, there still
be a problem. The engineering employees must be able to address some technical problems
immediately or prevent it in the first place. For the production process, the timing and the exact
formulae of the products.

They are also responsible for the estimation of the raw materials and when they need to
be purchased according to the input of the other members of the distribution channel.

X. ROLE OF THEIR RETAILERS

They are responsible for negotiation with
the company in order to perform more promotional
strategies connected to selling the products to the
consumers. They are also part of the inventory
management by keeping in touch with Heineken as
to when and how much products they need to be
delivered. They can also create traffic to gain new
https://www.marketing91.com/functions-channel-members/

loyalties and retain old consumers.

Having retailers give more connections to Heineken. Retailers can give them forecasts
because of the information the retailers are giving Heineken, other possible retailers, and of
course wide reached of consumers.

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XI. ROLE OF THE CONSUMERS

Being the reason of the existence of Heineken, the consumers keep Heineken alive.
Consumers can be influencers, they can influence the people they know, their families and
friends. Initiator, their preferences can be an opportunity for Heineken to improve their products
or their ways of serving them.
Consumers also create demands from Heineken, in this aspect consumers can
encourage Heineken to produce what they are demanding, may not be more about the products
but maybe it be indirectly affecting the product, such as prices, and or the availability of the
products.

https://www.facebook.com/heineken/photos/a.218011977354/10159731073002355/?type=3&theater

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XII. PRIMARY AND SECONDARY RESEARCH

Primary Research:
 In getting which stores and bars that carry Heineken the
researcher has visited stores like: Gmall Bajada, Abreeza, SM
Ecoland and SM Lanang, SNR, NCCC, 7/11, Central
Convenience. Kopi 82, Aposento, Alcatraz

 Interview with Mr. Ludwig James Landero, a former AB Heineken

Sales Marketer.

Here are some of the conversations:

35
Secondary Research:

 The secondary data that are in this research came from the
websites and books which references are at the end part of
the paper and in between the paragraphs and pictures.

36
XIII. RECOMMENDATION AND IMPROVEMENT ON ITS CHANNEL STRATEGY

In times that I visit bars and buy booze whether it may be mall, hotels, 7/11, or
bars, I do not see myself buying Heineken and neither my other people that are in the same
place with me – at least not yet. So, as I remembered this, I asked myself the question why.
Why is it that I do not see much Heineken on the tables being served? But instead of those from
the competing brands. Maybe because its expensive? Or maybe because the preferences of
those bars I am in are just different? Or maybe, maybe they do not sell Heineken?

With this, I can recommend that Heineken should work more on their marketing sides of
the distribution channel. They might be helping their retails in terms of promotions and maybe
some sale promotions, but it surely isn’t enough for the retailers to push more their products
even to those that are not their main target market.

Acquire more retailers to prioritize their products, more of Aposento style, so to give
image to the consumers about being the “peoples’ choice everywhere”. Also they can have a
program to assess all the members of their distribution channel in the area of their capabilities in
selling their products or the number of sales the acquire every year, so Heineken will be able to
jump higher with in its performances.

They can also form an alliance with their primary members in promoting Heineken, even
if it is through social media and in return of some trade promotions. Hold some special events
where they could offer discounts to their channel members who take them as the primary
sponsor of the events which can happen in bars or even in malls. This can be a joint force for
both the member and Heineken for the good of both.

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XIV. REFERENCES

https://www.wikiwand.com/en/Heineken_brands
https://www.theheinekencompany.com/our-company/our-strategy
http://www.abhp.ph/brands/heineken/
https://www.theheinekencompany.com/our-global-presence/asia-pacific
https://taxreform.dof.gov.ph/tax-reform-packages/package-2plus-sin-taxes/?
fbclid=IwAR2nj0eVVFpnsO6XwwoDV4DM9XiD4IS70eQuBDednLelX99TRbPtbP98V9U
https://www.dap.edu.ph/mgr/wp-content/uploads/2019/06/Report-Layout_Logistics-
Industry_050919.pdf
https://prezi.com/csfgkdarxvx6/technology-advancement-in-the-philippines/
https://en.wikipedia.org/wiki/San_Miguel_Corporation
https://www.philstar.com/headlines/2018/06/06/1822109/philippines-climbs-
technological-readiness-ranking
http://spectrum.ph/press/heineken-opendavao/
https://www.fundera.com/blog/what-is-a-business-model
https://www.statista.com/outlook/10010000/123/beer/philippines#market-globalRevenue
https://www.google.com/search?
q=misamis+oriental+to+davao+city+Cargo&rlz=1C1EKKP_enPH797PH797&oq=misami
s+oriental+to+davao+city+Cargo+&aqs=chrome..69i57.10764j0j7&sourceid=chrome&ie
=UTF-8
https://online.maryville.edu/business-degrees/traditional-types-business-models/
https://www.rappler.com/business/173495-asia-brewery-tiger-heineken-beer
https://cdodir.com/asia-brewery-inc-el-salvador-misamis-oriental-99-bp/
https://www.heinekenhungaria.hu/en/brands/brewing-process
https://www.marketing91.com/functions-channel-members/
https://www.researchgate.net/publication/228613097_Manufacturer-
supplier_relationships_An_empirical_study_of_German_manufacturing_companies

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