Ans 1 Situational analysis of the beer industry: 1. In 1990, market for beer was growing at an annual rate of 1-2%.

2. The mature markets (where everyone is buying as much as they can) were considered to be Western Europe(79 lpc) , North America(83 lpc), Newzealand(84 lpc) and Australia(93 lpc). 3. These consumptions levels were forecasted to decline in the near future. 4. The market where there was growth expected were Russia, Latin America , Eastern and central Europe. 5. The untapped potential in African market was not considered by many because of the low per capita beer consumption as well as the unstable political and economic condition of the country. 6. Asian consumption of beer was growing at a rate of 30%. 7. Demand in some key markets, like Indonesia was reduced because of the asian crisis in 1997, which was expected to recover in the medium term. 8. There was unutilized growth potential in asian markets with china at 16 lpc Honkong at 20-25 lpc. A great opportunity of consolidation was underlying in the beer industry with the top four players commanding only the 22% of global volume. The drivers behind this consolidation rationalization were 1. Need to achieve the economies of scale in production 2. Advertising 3. Distribution

Still the process was slow, Factors responsible for the slow process of consolidation were: 1. The ratio of fixed v/s variable cost was relatively high for beer industry, i.e its a capital intensive one.

2. The local tastes in the beer industry differed.

3. Consumers were attached to their old heritage brands which has become an integral part of their everyday life Interbrews current position: The decline in its mature and dominant Belgium market made the company focus more on consolidating and developing key markets and thus it reduced its dependence from 44% market share to 10% from 1992-1998. In 1999, growth markets accounted for 50% of total volume produced. It shifted volumes that America accounted for 61%, Europe 35% and Asia Pacific 4%. From the exhibit 1, we can infer that in 1998, the biggest consumer was America with 35.1%, while the growth index was highest in Asia Pacific which had a share of 27.2% . From exhibit 2 , it is clear that the top market share of Interbrew in 1998 was in Mexico while the share for USA was only 1.6 % Interbrew followed Laissezfaire till 1997, in 1998, the exec. Management decided to develop a global brand from its wide portfolio .The management perceived some global trends in the beer industry and concluded that 1. The number of affluent as well as poor consumers would increase at the expense of the middle income segments and this socio economic trend would evolve in a manner that the demand for premium as well as low cost beer is going to increase

2. Internationalization of the beer business brought together global consumers who can be brought into an advanced state of readiness to buy the well known international brands of beer. 3. Needs in many markets were expected to converge.

Therefore Interbrew believed that there would be an increase in awareness, and thus adoption in the authentic and international brands in a growing number of countries. Therefore a global strategy to formulate the development of a new brand was required. Brand Strategy: The goal of the brand strategy was to have the number one or two brand in every market segment in which Interbrew operated. The key facets were 1. The central piece of the strategy was adding of brands to its portfolio through acquisition of existing brewers. 2. Identify certain brands, typically speciality products and then develop them regionally across market.eg Abbaye de Leffe and Hoegaarden. New type of caf like Belgian caf were established to support the brand development efforts in all imp markets. 3. Identify a corporate brand and develop it as its global product.

Ans 2 The two potential candidates for the global brand were Labatt blue and Stell Artois. Stella was selected for its value proposition as perceived that time as the following 1. Accounted for 49% of total brand volume in U.K in 1998 ,increase of 25% in next yr to 3.5 million hls in consumption. 2. Other key markets wer france and belgium which accounted for 31% of total brand volume.Thus three markets accounted for 81%. 3. In Crotia its share was increased to 4% even after considered as a premium brand. 4. In 1999, the volume as increased to 6.7 million hls which was a rise of 97% 5. Only market where it was declining steady was Belgium. Tangible attributes Product- high end Packaging Labelling Attributes Functional benefits Intangible attributesQuality- premium. Emotional benefits- oldest brand Values Culture- heritage brand Image- sophisticated , rich.

While for Labatt Blue, most of this attributes were missing 1. It was mainly into Canadian market with 85% derived from US and Canada.

2. Its exposure outside was extremely limited and was not considered as a budding global brand. 3. Though it was introduced in France and Belgium but the consumption was minimal. Only export growth market was US where it has shown a growth of 23% from 1995 to 1998. On account of a large number of local brands total volumes of Stella accounted only to 10% of Interbrew volumes in 1999. But it being a premium product was perceived as profitable. However the P/E leverage had to be revised because of the low operating profits later on. The brand was a dubious choice with the centralised coordination and control of brand marketing became difficult for the organisation, and the higher funding requirement . Interbrand seems was not prepared for the consolidated launch of a global brand. Ans 3 This approach helped Interbrew in learning from the experience and formulating its produt mix: Product,Place, Price, Promotion. The targeted premium market was in an early stage of development and was easy to mould and captured. Pros: 1.Help in recognising target segments properly Presence of Belgian caf accelerated market development plans It was inferred to derive the success by targeting young adults living in urban area 2.Market development plan was formulated accordingly: Selective distribution with targeted POS support. Selective media campaign. Sponsering strategy focused on high end celebrity events. 3.Built brand and corporate credibility. Cons: 1. The P/E leverage had to be revised because of the low operating profits later on. 2. Funding levels were difficult to manage 3. It was not a properly balanced brand development program. 4. Improper allocation of resources, in capacity utilization as well as budget. Ans 4 Internet can play a very vita role in developing the Stella Artois as a global brand.With the Facebook, You tube, Myspace and other social medias on internet , can help reach a large target customer base. Its ubiquitous interconnectivity creates communities while the rich media nurtures relationships Community members become carriers of viral messages. Interbrew should look in to creating webspaces for its consumers as well as advertise through them to reach a similar niche marget segment. The word of mouth is also very important here. Generating awareness through online medias by promotional offers online or coupons and new events can increase the probability of conversion rates. Collaboration and puttind advertisements on these websites will thus increase awareness and get the consumers into an advanced satge of readiness to buy. Cost involved is lesser as compared to other medias while the effect is more.