1.

Case Studies
Marketing Strategy of Global Player
Heineken

Overview

Who is the largest beer brewer in Austria? It is not so easy to answer this question.
But Heineken is the owner of the Brau Union AG. This company owns almost all of
the well known brands in Austria. Therefore one could argue that Heineken is the
largest one. This has been the case since 2003 when Heineken bought the former
Brau Beteiligungs AG.

Who is Heineken? “Heineken has wide international presence through a global

network of distributors and breweries. Heineken owns and manages one of the
world’s leading portfolios of beer brands and is one of the world’s leading brewers in
terms of sales volume and profitability. The principal international brands are
Heineken and Amstel, but the group brews and sells more than 170 international
premium, regional, local and specialty beers, including Cruzcampo, Tiger, Zywiec,
Birra Moretti, Ochota, Murphy’s and Star.” (www.heineken.com)

from a Heineken presentation

As one can see it above, the beer market has changed dramatically during the last
10 years. Heineken has been an important part of this radical change. The company
is number four within the world beer market. The market share of the leading four
companies has grown from 19 to 40% within the last ten years. This growth has been
possible because Heineken has put strong efforts in developing the two house
brands Heineken and Amstel on the one hand and acquiring a lot of different brands
in many different countries. The other large companies did the same.

One part of this strategy was an investment in the Austrian beer market. But what is
the reason for such a huge company to invest in a little country like Austria. Maybe
one reason is that the Austrians like beer. Their consumption per head was 108.6
litres in 2006. That is the third position in the world behind the Czech Republic and
Germany. Another reason is the interesting beer market in the CEE (Central and
Eastern European Countries). As you can see in different industries like the bank,
energy or in the food market, there are good and traditional relationships between
Austria and other countries in Central and Eastern Europe. Heineken wants to profit
from these relationships. So there are a lot of reasons to analyse a global player.
Questions

1. How is the beer market organised in the world? Who are the big players in the
market? Which trends can be observed in this market?

2. The Heineken company owns world wide known brands (Heineken and Amstel)
and o lot of regional and local brands. What are the advantages and
disadvantages for a company to have a broad brand portfolio?

3. One objective of the company is that Heineken is identified as a premium beer by

the customer. Which supporting activities are needed to develop a premium
brand?

4. Sponsoring is one of the mail tools applied by Heineken. Why is sponsoring

becoming more and more popular as a marketing tool?

5. What is product placement? What are the advantages? Where are the problems?
Introduction

There has been huge development in global marketing activities. Since 1969, the
number of multinational corporations in the world’s 14 richest countries has more
than tripled, from 7,000 to 24,000. In fact, today these companies control one-third of
all private sector assets and enjoy worldwide sales of $6 trillion. Austria is part of
these developments. It is evident Germany is the most important market for Austrian
companies. But there are others. Particularly the CEE (Central and Eastern
European) countries have become more and more important for Austrian companies
as markets but also for investments. E.g. Austria is number one investor of the world
in the CEE countries like Bulgaria, Croatia, Bosnia-Herzegovina and Slovenia. Sales
to the 10 new members of the EU have increased ten times during the last 10 years.

Are these developments good for our economy and above all for the society? There
is a lot of criticism against international trade. The so called anti globalisation
movement argues that unbridled international trade and investments:

Ø Cut jobs in countries with a good social standard

Ø Drive companies to produce in countries with low environmental and social
standards
Ø Induce an exploitation of developing countries
Ø Destroy local culture (farming, companies, landscape etc.)

We should give attention to this criticism. But there is no other way and we should
think how to deal with this trend. E.g. as consumers we have a lot of power. The
recent marketing campaign of McDonald’s shows how companies react on buyer’s
behaviour. We are well informed that all the ingredients of a Big Mac are from
Austria.

But all in all there are a lot of advantages especially for a little country like Austria
concerning international trade.

Ø There is a larger market for the products of a company

Ø Therefore international trade can save jobs
Ø The consumer profits from the economies of scale
Ø They profit from a higher competition too
Ø International trade brings us a variety of different offers
Ø Companies profit from higher profit opportunities in another country
Ø They don’t depend from on one market
Ø Countries produce what they do best – all countries profit from the
comparative advantage

There are a lot of Austrian companies like OMV, Raiffeisen, Erste Bank, Bank
Austria, Billa who are really successful within the CEE countries. Whether someone
is for or against globalization is a fact. Therefore it is interesting to analyse the
marketing strategy of an international company.
 The Case Heineken
Company and Philosophy

Heineken is not just a brand name. No, there are persons called Heineken. Gerard
Adriaan Heineken bought a brewery in Amsterdam in 1864. There is still a majority of
the shares owned by a member of the family namely Charlene de Carvalho-
Heineken. To see the exact ownership look at:
http://www.heinekeninternational.com/ownership.aspx. The expansion strategy of
Heineken started early: After World War I, the company more and more aimed for
export. Three days after prohibition ended in the United States, the first Heineken
shipment landed as the first legal shipment of beer. From that day on, Heineken has
remained one of the most successful important beer brands in the United States. In
1968 Heineken took over its competitor Amstel. In these times Heineken was not
really a European beer. Because of this Heineken began to produce beer in different
countries. Since then Heineken have been acquiring a lot of other breweries in
different countries too.

Nowadays Heineken owns 115 breweries all around the world. 65,000 employees
work for the company. 118, 6 million hectoliters beer are produced by different
production plants. Heineken is number 4 in the world, number one in Europe and the
largest beer and other beverage producer in Western Europe. You can buy Heineken
in almost every country in the world and Amstel, the other house brand, in more than
90 countries. The headquarter is in Zoeterwoude near Amsterdam in the
Netherlands.

The Beer Market and the Objectives of Heineken

Not only for international working companies but also for regional companies it is
very important to have measurable objectives. Heineken also has chosen ambitions
(taken from a company presentation):

Ø They want to lead the markets in which they have chosen to compete

Ø They want to create sustainable, long term value

Ø They want to rank with the highest quality of earnings among international
brewers

Ø And they want to have the most valuable beer brands portfolio: focus on
Heineken

But in which market does Heineken want to achieve these goals? Let’s have a look
on the international beer market.
One can see it in this chart. Heineken is number four in the world concerning the
production of beer. The one producing the largest amount of beer is InBeV.
Headquartered in Leuven, Belgium, InBev employs more than 86,000 people
worldwide. With sales in over 130 countries, the company works through six
operational zones: North America, Western Europe, Central and Eastern Europe,
Asia Pacific, Latin America North, and Latin America South. A well known brand is
Beck’s. SABMiller (South African - Bavaria - Miller) is the second largest brewery
company in the world by volume, after InBev. The company was formed in 2002 by
the merger of South African Breweries and Miller Brewing. Lately SABMiller merged
with Bavaria Brewery. Anheuser-Busch Companies, Inc. is the world's third largest
brewing company in volume after InBev and SABMiller. In the USA, Anheuser-Busch
is the largest brewing company in volume with a 48.8 percent share of beer sales.
These and other companies are represented by different local and international
brands all around the world. But what are interesting and growing markets?

The most growing market for beer is Asia. But other regions are interesting too.
Looking at the chart above one can see that the most difficult market is Western
Europe because there is already market saturation and heavy competition too.
Heineken have chosen different markets like Austria and aims to become market
leader in these specific markets. Heavy communication but also the acquisitions of
companies make this possible. We will discuss the communication strategy of
Heineken later on.

The following chart compares the produced volumes of beer with the corresponding
revenues. We can see that Heineken gets more money for less beer in comparison
to other companies. This is easy to explain. If you sell for example 0.3 litre bottle in a
restaurant for € 2.30 or 0.5 litre bottle for € 2.90 you get actually more money. For
this reason producers, restaurants and retailer are interested in selling little package.
And Heineken is doing well.

Marketing Strategy – Brands

As mentioned above there are a lot of brands under the flagship of Heineken.
Heineken and Amstel are the major brands. But Heineken acquired a lot of regional
brands like Cruzcampo, Tiger, Zywiec, Gösser, Birra Moretti, Murphy's and Star. One
example is the acquisition of the majority of shares of the Brau Union AG. All these
brands are nowadays part of the Heineken brand family: Gösser, Zipfer. Kaiser,
Puntigamer, Reininghaus. Edelweiss, Schwechater, Schlossgold. In other words
there are not a lot of beer brands in Austria owned by others than Heineken.

The following chart shows that the Heineken brand itself excluding subbrands has
the greatest sales volume outside home market in the world. One reason for this is
that Heineken is concentrating on the major brand.

Here are the goals of the brand Heineken:

• Heineken wants to position itself as the biggest international premium beer

brand. This makes Heineken different from all their competitors
• A true global brand, available in more countries that any other brand
 • Heineken wants to be where action is: Connecting people, places, music
styles and cultures better than any other beer brand
• Building a winning and well balanced portfolio of brands in each relevant
market
• To continue strengthen Heineken’s position as THE international premium
brand

This chart shows the shares of the Heineken brands by sales.

Here are four policies to achieve these goals:

• Innovation at the heart of the products, beer systems and packages

• Heavy advertising to create “brand pull”
• Broad reach sponsorships to create worldwide awareness and
connectivity
• Product placement as an additional policy the build the appropriate image

Now we want to discuss these three policies.

Innovation

Innovation is very important for the success of every company. Normally we

associate this term with developing a really new product. But innovation within the
beverage industry very often means innovation in packaging. One example is the
beer tender. This tender gives the consumer the feeling of a draught beer and
therefore she or he is willing to pay more for the same amount of beer. DraughtKeg is
another example.
Beertender DraughtKeg

These packages but also the red star, the green colour and the label are very
important differentiation tools. The target audience should associate these
communication tools with the slogan: “Enjoyed together around the world”.
Strong advertising supports this differentiation. In Austria Heineken introduced
the 0.5 litres bottle because this quantity is very common in Austria.

From the company presentation:

• Innovation is at the heart of our company and strategy

• We work to continually anticipate and meet the changing needs of
consumers
• For instance by developing new kinds of draught experiences.

Advertising

TV commercials are a good possibility to reach the target group for mass products.
Beer is a mass product and therefore mass media are a reasonable way to bring the
message of the company to the customer. Other advantages of television: combines
sight, sound and motion; appealing to the senses; high attention, high reach;
Limitations are: high absolute cost; high clutter; fleeting exposure, less audience
selectivity

In the TV commercial below one can see a person in different historic situations. The
viewer may be interested in the commercial because of the changing environments.
We call this type of stimulus a cognitive one because viewers are tricked to reflect on
the TV spot.
See commercial on: http://www.myvideo.de/watch/163084

Sponsorship

Sponsorship is a very good possibility to transfer the image of a well known person or
sports club to a brand.

What are the activities of Heineken?

• Heineken sponsors the UEFA Champions League

• 4 billion viewers per season in 227 nations around the world
• Heineken is also sponsor of the Rugby World Cup 2007

Very often Heineken combines activities to build a coherent campaign. Here is a

press release to this issue:

Amsterdam, 7 March 2007 - Heineken International today announced the launch of a

new advertising campaign for the Heineken brand and the UEFA Champions League
partnership, which establishes the new theme “Enjoyed together around the world.”
This new campaign builds on the truly international premium status of both Heineken
and the Champions League.

The new campaign created by The Red Brick Road, contains fourteen 10-second
break-bumpers featuring football fans enjoying Heineken and the Champions league
together in a range of locations around the world. Eight of these exotic locations
include the beautiful Cook Islands, an igloo in Nuuk, Greenland, the Calgary tower,
Canada, and a boat floating in Shanghai busy harbour. The other six break bumpers
show a group of people enjoying Heineken DraughtKeg and the UEFA Champions
League in Manhattan, Moscow, New Zealand, Jamaica, at sea and even in space.

”This new Champions League advertising campaign connects Heineken as ‘the

world’s quality beer’ with the internationalness of the UEFA Champions League, by
showing that Heineken and UEFA Champions League are enjoyed together in unique
places around the world”, said Walter Drenth, Global Advertising Manager Heineken.
“For the break bumpers the team identified and shot far flung locations in different
continents to emphasize the worldliness”. The break bumpers will be aired during live
matches and high lights programmes worldwide.

In addition to the new series of break-bumpers, Heineken has also produced a new
thematic commercial ‘Space’, which depicts astronauts enjoying Heineken and the
UEFA Champions League from the MIR space station. In line with the break bumpers
the commercial has been produced with two versions, Heineken bottle and
DraughtKeg, and are available in 25-second, 30-second and 45-second edits.

The new advertising will air tonight during the return matches of the first knockout
stage of the UEFA Champions League.

See commercial on:

http://www.heinekeninternational.com/breakbumpers_uefacl_2007.aspx

Product Placement

Today, advances in digital and video technology are making it possible for viewers to
remove commercials from television programming, a development that threats
revenues for both commercial television companies and advertisers. However
companies have found ways to bring the message to the customer where he or she
cannot elude. One possibility is a banner in a football stadium, another one is a
product placement in a movie especially in a blockbuster. In the James Bond movie
“Casino Royal!” one can see a bottle of Heineken carried by a waiter. James Bond
movies are coherent with the message mentioned above. That means there is the
same target group for Heineken as well as for James Bond movies.
See video: http://www.myvideo.de/watch/412007
Questions

1. How is the beer market organised in the world? Who are the big players in the
market? Which trends can be observed in this market?

2. The Heineken company owns world wide known brands (Heineken and
Amstel) and o lot of regional and local brands. What are the advantages and
disadvantages for a company to have a broad brand portfolio?

3. One objective of the company is that Heineken is identified as a premium beer

by the customer. Which supporting activities are needed to develop a premium
brand?
 4. Sponsoring is one of the main tool used by Heineken. Why is sponsoring
becoming more and more popular as a marketing tool?

5. What is product placement? What are the advantages? Where are the
problems?

Exercise for discussions

Discuss the following statements of Heineken about the consumption of alcohol

taken from a company presentation:

• We believe that beer forms part of a positive lifestyle, when consumed

responsibly

• We do, however, recognise that some people consume our products at the
wrong time, for the wrong reasons or in the wrong quantities

• Heineken is therefore committed to raising awareness about responsible

consumption and what this means exactly
• We encourage the responsible enjoyment of alcohol in many ways for
instance via commercials and by working together with partners.
• Cool @ Work: worldwide programme within Heineken to inform and educate
our own employees on the use and risks of alcohol

Discuss the following statements of Heineken to the environmental agenda taken

from a company presentation:

• Efficient use of raw materials, water, energy and packaging.

• We continuously research new and improved ways of reducing natural
resources: “Aware of Water” and “Aware of Energy” programmes.
 Lösungsbuch

Marketing Strategy of Global Player

Heineken
Manfred Hämmerle

Learning targets:

• Students should understand the main features of the marketing strategy of a

global player
• Students should reflect on the advantages and disadvantages of globalisation
discussed on the basis of the strategy of Heineken
• Students should be able to define premium brand strategy and tools to create
premium brands
• Students should be able to define sponsorship including the advantages and
disadvantages of this policy.
• Students should be able to define product placement and the different
methods of this policy.

Lösungshinweise zu den Arbeitsfragen auf Seite 00 im Arbeitsbuch

Frage 1

How is the beer market organised in the world? Who are the big players in the
market? Which trends can be observed in this market?

Lösungshinweis

There is some information given in the case about the beer market. In the article you
can read more.

These trends can be observed:

• More brands have international ambitions

• Prices are declining
• Sales and marketing excellence, as well as managing strong brand
portfolios are key components to competitive success
• The alcohol agenda is gathering pace
Am 16. Januar 2006 veröffentlichte der
Verband der europäischen Brauereien
„The Brewers of Europe“ folgende im
„Bier-Report“ der Tageszeitung „Die
Welt“ abgedruckte Statistik über den
europäischen Pro-Kopf-Verbrauch in
Litern (Wikipedia):

1. Tschechien 160,0
2. Deutschland 115,8
3. Österreich 108,6
4. Irland 108,0
5. Großbritannien 100,8
6. Belgien 93,0
7. Finnland 84,0
8. Niederlande 77,9
9. Polen 75,0
10. Portugal 61,7
11. Norwegen 55,0
12. Schweden 51,5
13. Frankreich 33,4
14. Dänemark 30,1
15. Italien 29,6
This is an article issued in the Austrian newspaper Standard (29. März 2007)

Wiener Heineken-Ostzentrale bald fünftgrößter Brauer der Welt

Nusmeier: Heineken CEE wird in Kürze Carlsberg überholen - Akquisitionen im

Osten im Visier - An Budweiser grundsätzlich interessiert

Wien - Mit 52 Brauereien und zehn Mälzereien in 13 Ländern hat die Osteuropa-
Division von Heineken - also das Brauereigeschäft in Zentral- und Osteuropa unter
Management der Brau Union mit Sitz in Wien - 2006 rund 53,4 Millionen Hektoliter
Bier verkauft. Rund ein Fünftel mehr als 2005. Zugekauftes Wachstum kam primär
von Russland, wo weitere Brauereien gekauft wurden. Insgesamt hat "Heineken
CEE" letztes Jahr über 60 Mio. Hektoliter Getränke verkauft. Damit reichte man jetzt
schon fast an die Nummer fünf am Weltmarkt heran, an Carlsberg. "Wenn es so
weiter geht, ist bald der Sitz der fünftgrößten Brauereigruppe der Welt in Wien",
formuliert Nico Nusmeier, der von Heineken kommende Präsident von "Heineken
Central & Eastern Europa", der sein Büro in Wien hat, einen konzerninternen
Running Gag. Der gesamte Amsterdamer Heineken-Konzern mit 132 Millionen
Hektolitern Bier und weltweit mehr als 57.500 Mitarbeitern rangiert auf der Liste der
größten Bierkonzerne derzeit insgesamt auf Platz vier. Die Weltmarktränge eins bis
drei besetzen InBev, SABMiller und Anheuser.

Interesse an Ukraine

Nusmeier kündigte weitere Akquisitionen in CEE an, sagte aber nicht wann und wo.
In manchen Jahren gibt es in CEE drei bis vier Zukäufe, in anderen Jahren keinen.
Bis auf Griechenland, wo Heineken schon heute 80 Prozent des Marktes stellt, sähe
er überall in der CEE-Region noch ganz gute Möglichkeiten, weiter zu kommen.
Interessant wäre für den Konzern auch eine Expansion in der Ukraine (dafür ist Wien
auch ohne Operation vor Ort schon zuständig), aber auch andere bisherige "weiße
Flecken" auf der Landkarte im Osten könnte man einmal besetzen. Überall wo es
interessante Zielobjekte gäbe, gäbe es meist auch mehrere Bewerber darum.
Deshalb werden keine Zielobjekte benannt.

Im Februar kamen in tschechischen Medien wieder Spekulationen über eine

Privatisierung der berühmten Budweiser-Brauerei hoch. Ob Heineken daran
interessiert wäre? "Ja, selbstverständlich wären wir interessiert", sagte Nusmeier.
Die Frage allerdings, wie chancenreich es wäre, dass Budweiser - deren Verkauf in
Tschechien bisher kategorisch abgelehnt worden war - überhaupt einmal zu haben
ist und ob damit dann auch Profit gemacht werden könnte, ließ er offen. In
Tschechien hat Heineken/Brau Union bisher nur 5 Prozent Marktanteil.

Deutliches Plus bei Gewinn

Die Osteuropa-Division von Heineken hat 2006 deutlich besser verdient. Sie ist zwar
die volumensmäßig größte Heineken-Region, aber noch nicht die Nummer eins beim
Ergebnis. Auch das ist Nusmeiers Ziel.
In der Region Zentral- und Osteuropa (zu der in der Heineken-Welt neben Österreich
und den benachbarten Ländern im Osten auch große Bierländer wie Polen, Russland
und Rumänien sowie organisatorisch Deutschland und Griechenland gehören und
die von Wien aus gesteuert wird) betrug das Plus beim Bierausstoß im abgelaufenen
Jahr 19,4 Prozent, um Zukäufe bereinigt (also organisch) lag das Absatzwachstum
bei 8,1 Prozent. Beim Umsatz gab es einen Zuwachs von 20,1 Prozent auf 3,4 Mrd.
Euro. Das EBIT (Betriebsergebnis) legte um 19,5 Prozent auf 364 Mio. Euro zu. Für
2007 werden keine Ergebnisziele der Region genannt, man wolle aber "zumindest"
das Gesamtziel der Konzernmutter (10 bis 13 Prozent mehr Nettogewinn) erreichen.

Liebl: "Keine Standortgarantien"

Einen Gang zulegen will der niederländische Bierkonzern Heineken in nächster Zeit
international auch bei seinem laufenden Sparprogramm: Bis 2008 sollten die
Fixkosten ursprünglich um 360 Mio. Euro gesenkt werden, jetzt lautet das Ziel 450
Mio. Euro. Nico Nusmeier, Präsident Heineken Central & Eastern Europe mit Sitz in
Wien, zu Spareffekten in seiner Region befragt, schloss am Donnerstag weitere
Brauereischließungen in Osteuropa nicht aus. Einsparungen gäbe es aber mit einer
Fülle von Einzelmaßnahmen. 2006 waren im Osten wieder Brauereien geschlossen
worden.

Im vergangenen Jahr machten in der Region zwei Brauereien (Slowakei, Polen) zu.
In Österreich - wo der Heineken-Subkonzern Brau Union 8 Brauereien unterhält, sind
nach Vorstandsangaben weiterhin keine Schließungen zu befürchten: "Auf die
Standort-Frage gebe ich meine Standard-Antwort: Derzeit haben wir keine Absicht,
Brauereien zu schließen", sagte Brau Union-Österreich-Chef Markus Liebl.
Allerdings: "Es gibt keine Standortgarantien". Die könne es nie geben. Es müsse
jeder in seinem Umfeld kostengünstig arbeiten. Der Mitarbeiterstand in Österreich
wird heuer so wie im Vorjahr um rund 2 Prozent weiter abnehmen.

In Kroatien hat sich in der dortigen Brauerei in Karlovac vor wenigen Wochen ein
tragischer Betriebsunfall ereignet. Nach einem technischen Zwischenfall bei einer
neuen Anlage erlitt ein Anwohner eine CO2-Vergiftung und starb daran. Mehrere
Tage lang war der Betrieb still gestanden, nun hofft der Konzern - nach dem zur Zeit
unter Kooperation mit den örtlichen Behörden eingeleiteten Testbetrieb - auf die
Aufnahme des Vollbetriebs in absehbarer Zeit. Dass damit das Aus für den Standort
Karlovac droht, wird von Nusmeier entschieden dementiert. Nusmeier nannte den
tödlichen Unfall als "sehr bedauerlich", er sei sehr betroffen. (APA)

Frage 2

The Heineken company owns world wide known brands (Heineken and Amstel) and
a lot of regional and local brands. What are the advantages and disadvantages for a
company to have a broad brand portfolio?

Lösungshinweis

Advantages
 Ø An international company can react on different cultures and their buying
behaviour
Ø If there is a problem with one brand, the other brands are not affected
Ø So called flanker brands help to protect the main brand (price policy)
Ø A company can make different offers. Because of this a market skimming
policy is possible
Ø Competition within the company can create new ideas
Ø There is a higher barrier for competitors

Disadvantages

Ø It is very complex to handle a lot of brands

Ø There are higher costs (communication et al)
Ø A company cannot profit from the brand transfer

Because Heineken acquired a lot of companies and brands a multi brand strategy is
reasonable. All in all they take a lot of effort to support the brand Heineken.

From a company presentation

• Our business is about building great brands

• We brew and sell more than 170 international premium, regional,
local and specialty beers
• Our aim is to build – in each market – a strong and well balanced portfolio of
national and regional brands, with the Heineken brand
as an important cornerstone

Frage 3

One objective of the company is that Heineken is identified as a premium beer by the
customer. Which supporting activities are needed to develop a premium brand?

Lösungshinweis

There are different price strategies. Heineken is defined as a premium brand. As one
can see in the chart, premium means high product quality and a high price.
 Quality
Heineken

Price

But who defines the quality of a product. At the end of the day it is the costumer. Is
he ore she willing to pay a higher price? As mentioned before Heineken supports the
image of premium quality with heavy advertising, sponsoring and product placement.
Distribution channels are very important too. One can very often buy Heineken in
discotheques where young people have fun.

Frage 4

Sponsorship is one of the main tools applied by Heineken. Why is sponsorship

becoming more and more popular as a marketing tool?

Lösungshinweis

Companies don’t like viewer zapping when their TV commercial are shown. But
zapping happens. Because of this sponsorship is becoming more and more popular
One cannot avoid to see the Heineken banner during a champions league match.
This is a huge advantage of sponsorship.

The chart shows a reciprocal business deal. The company offers money, know-how
or tangibles to a person, a club or an institution and gets awareness, image or
knowledge. The media transports the message because a target group is interested
in the event. Each partner profits from this deal. Football is a good sport for Heineken
because it is a very popular sport with a huge degree of awareness.

But there is a risk. If the person or club is not successful or suddenly becomes
unpopular money may be wasted.

Frage 5

What is product placement? What are the advantages? Where are the problems?

Lösungshinweis

Product placement means placing products as props on TV shows or films as a form

of advertising.

There are different methods:

• Plot placement: the product becomes part of the plot of a programme

• Hero placement: the main character in a story touches an advertiser’s
product
• Title placement: the name of the product is used in the title of the programme
• Pester power: children pester their parents to buy products they have seen
on TV

Advantages

• It is a powerful possibility to bring the message to the customer

• A film is partly financed by the sponsors
• Product placement shows reality. There are BMW’s on the road and there are
people who like to drink a Heineken when they watch a football match

Disadvantages

Although product placement has many advantages for companies there are also
problems. Many people don’t realize ads as ads, while watching a movie. Another
problem with product placement is that it promotes dangerous or unhealthy products
to children, like tobacco or alcohol or junk food. Although product placement has
been strictly controlled in Europe, the large number of films and television
programmes coming over from the USA makes it difficult to monitor the practice.