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Building a successful global beer brand: part 7
You’ve identified the benefits of building a global brand, ensured what you have is unique and repositioned your portfolio to implement a new strategy. Now, in this last installment, Kos Apostolatos, David Atkinson and Joseph Poore from management consultancy firm Marakon, outline the final stage in the process.
Step 4: Build sustained success through long-term management and unambiguous centralised governance
Building global brands requires a long-term commitment with unwavering support across the organisation. We believe the good governance of successful brands shares seven common approaches:
1. Global brands take a long time to build, so organisations need to take a long-term perspective, which requires vision, belief and commitment.
The rise of Blue Moon is often described as a “15-year overnight success story.” Despite Blue Moon’s deep consumer insight, disciplined management and commitment to a long-term vision, it still took more than a decade to gain a stable foothold as a niche player in the US beer market.
2. Global brands need momentum as they build, so organisations need to choose the right markets to grow in, based on grounded facts rather than internal politics.
Stella Artois, for example, only focuses on six key markets outside Western Europe and then seeds growth in key global cities.
3. Global brands need consistency, so organisations need to be firm and clear that packaging, advertising, positioning and image are aligned across consumer maps and geographies at the same time as being open to valid input from the local teams and adjusting strategy accordingly.
For instance, Carlsberg is re-igniting their brand using the “That calls for a Carlsberg” campaign in 140 markets although they are retaining their former positioning where it currently works best.
4. Global brands require sustained investment but not at the expense of smart business decisions, so there should be a balance between finance, brand, strategy and local accountability to ensure the right resource allocation decisions are made.
For example, Modelo has managed to invest heavily in building the Corona brand globally while at the same time expanding the Modelo brand in Mexico and the United States.
5. Global brands must be governed globally with local execution and require a strong central team with singular overall accountability deciding on all matters such as the overall strategic plan and priorities, brand identity and key investment priorities.
Clear accountabilities and responsibilities between central control and local execution is a tightrope, and good communication is essential. AB InBev has clearly accountable functions at both the centre and within business units.
Individuals are solely responsible for the P&Ls of their country, which promotes local initiatives, but they are bound by the controls at the centre.
6. Global brands also require the right incentive structures to ensure that local management makes it their top priority to push the global brand even when short-term, profitability can suffer.
Again, AB InBev leads the way in this regard, clearly aligning brand-building performance with transparent incentives that pave the way for the recent successes of Stella and Budweiser.
| Exercise 4: Build sustained success through long-term management and unambiguous centralised governance.
Assess your current practices and governance model: Are you managing your global brands for long-term success or with a short-term lens? Across the other six dimensions above, rate yourself on what are you currently doing well and what you could do better. Build a new governance plan and implement it. |
In summary: the four steps of how to build a global beer brand are:
Define the benefits of global brands to your organisation.
- Identify the unique proposition and build a business model to support it.
- Make space for your brand by repositioning your portfolio and build a detailed strategic plan.
- Build sustained success through long-term management and unambiguous centralised governance.
Freddy Heineken was a unique entrepreneur and, despite his limited formal marketing training, created the foundations for a top global brand, which was skilfully expanded by his successors. What is remarkable is that his success in the ‘60s and ‘70s has been successfully replicated only a few times since.
Today, most international brewers have identified global brands as a key growth platform for the future.
Stella is reclaiming ground in the UK following substantial investment, gaining traction fast in Argentina and making a strong global push through key cities. Carlsberg is investing in a global repositioning in 140 markets and looking to double profits by 2015. Heineken is committed to further accelerate Heineken’s international premium leadership and to pushing Desperados to global status.
There will be successes and failures. We believe that the companieswho follow these four steps will set the stage for building brands that will be jewels in their crowns for years to come.
For further information, contact Kos Apostolatos +44 (0)7825 040 036, kapostolatos@marakon.com or David Atkinson +44(0)7809 779 829, datkinson@marakon.com
This is a great series. Would the same hold for a smaller brewer though?
Hi Sian,
Yes, the same would hold true, but with a slight change of focus across the four steps:
– Step 1: Consider whether your local market has really reached its growth and profitability potential for your brand – taking a brand global is stretching for small companies and the costs can outweigh the benefits in some instances;
– Step 2: Uniqueness should be structured by focusing more on your competitors portfolios and asking how your proposition is different. Further, consider whether your brand can access a profit pool on the global (cross-cultural) consumer map – some brands may only have local appeal that is difficult to leverage globally;
– Step 3: Information advantage is key to building a meaningful strategic brand plan (including beer market and consumer data), which is often lacking in smaller organisations. Getting the facts right before launching is critical;
– Step 4: Larger brewers are usually better at generating cost synergies with large brands – ensure your organisation is set up to do this to be able to compete.
Glad you enjoyed reading it.