Homework: International Marketing
Part I
RÉMY MARTIN INTRODUCES CENTAURE TO CHINA Rémy Cointreau is a French spirits company, probably best known for its Rémy Martin cognac brand. Global net sales were €808 million in 2010. Cognac accounts for over 60 percent of the firm's sales. By 2010, China had become the third-largest market for cognac, after the United States and Singapore. Market research showed that cognac drinking in China is often for business entertainment. In an interview with Campaign Asia, Kitty Lun, CEO of ad agency Lowe China, said that: "People often wear a ‘fake mask,' but business acquaintances can in fact turn into genuine friendship, sharing wine with friends, and bring out ‘true emotions.'" To answer the Chinese consumers' thirst for fancy cognacs, Rémy Cointreau launched Rémy Martin Centaure, an extra-old cognac. Pierette Trichet, the company's cellar master, selected honey and fruit flavors to develop the new brand. Drinking expensive cognacs is popular among older businessmen as a way to show off their social status. However, Centaure targeted China's new generation of young businessmen who were looking for a ‘smoother' cognac to drink at social gathering and karaoke bars. Younger professionals were more concerned about authenticity and less inclined to formality than their older counterparts. The Centaure bottle came in a fancy red copper box and was adorned with the seal of the centaur, a Greek mythological figure that is part human, part horse. One bottle would retail for around RMB1,000 (around $155). The launch of Centaure was supported by a TV, print, and digital campaign featuring Hong Kong film celebrity Anthony Wong as brand ambassador. In the TV spot, Wong says: "If I'm Anthony Wong the actor. I'll say, I like the script. If I'm simply Anthony Wong. I'll say, I like the paycheck." Then the ad shows Wong drinking Centaure with his friends. The narration continues: "Right now. Anthony Wong is simply Anthony Wong, you are simply you. Without complications. Centaure Seal of Sincerity." While Centaure was scheduled to become a global brand, the company had not yet finalized its global launch plan.
Task
1) Centaure is yet another example of products being designed and marketed-at least initially-specifically for the China market. Some people describe this phenomenon as a shift from made in China to made for China products. What are the drivers behind this trend?
2) Rémy's latest brand addition targets young Chinese businessmen. In the United States, Rémy has become the drink of choice among gangsta rappers. Cognac used to be the preserve of old white men. Are these shifts in target market beneficial for Rémy ? What could be some possible risks?
3) Rémy planned to introduce Centaure in other Asian countries. What criteria would you use to decide on best possible candidate markets for further rollout?
4) How would you market the brand in these other countries (you could pick India as an example). Would you take a similar approach (e.g., target market and famous movie celebrity), or would you tweak the campaign and if so how?
Part II
BUDWEISER: "THE KING OF BEERS" EYES BRAZIL At the end of August 2011, AB InBev introduced Budweiser in Brazil, the world's third-largest beer market. The brewer's Brazilian roots stretch back to 1885. Its forerunner, AmBev was created in 1999 through the merger of two of Brazil's leading brewers-Brahma and Antarctica. In 2004, AmBev merged with Belgian Interbrew to create InBev. This Belgo-Brazilian company acquired the iconic American Budweiser brand in 2008 when it acquired Anheuser-Busch for $52 billion. Budweiser held a 16-percent share of the U.S. beer market, making it the best-selling beer in that market and second in the world, behind Snow Beer, a brand sold only in China. Apart from Budweiser, other global brands in AB Inbev's portfolio include Stella Artois, Beck's, and Hoegaarden. Its local brands in Brazil include three of Brazil's leading brands, namely, Skol (31.3% market share in 2010), Brahma (16.2%), and Antarctica (10.6%). Brazil's per capita beer consumption was about 47.6 liters per capita in 2010, higher than China's but lower than for most developed countries (see Table A). According to Euromonitor, AB InBev held a 63.6-percent market share in Brazil in 2011. TABLE A PER CAPITA BEER CONSUMPTION BY COUNTRY (2010) Country Per Capita Beer Consumption (Liters) Germany 110 The United Kingdom 99 The United States 81.6 Russia 58.9 Brazil 47.6 China 30.
The plan was to sell "the American Dream in a bottle" said Chris Burggraeve, AB InBev's chief marketing officer. The Belgo-Brazilian brewer decided to position Bud as a premium brand with a price that matches Heineken and other high-end brews. The Brazilian launch included Bud-branded concerts featuring stars such as Rihanna, Britney Spears, Red Hot Chili Peppers, and Pearl Jam. To raise local awareness, the brewer hired influential Brazilians like Anderson Silva, the UFC middleweight champion, to be brand ambassadors. The latter appeared in a short documentary aired on Budweiser's Facebook page and YouTube channel. Budweiser would also be an official sponsor at the 2014 World Cup Soccer in Brazil. Budweiser accounted for 7-8 percent of AB InBev's beer production; the U.S. market still represented three-quarters of Bud's sales. AB InBev aspired to make Bud one of its key premium brands in its global brands portfolio. Bud debuted in Russia in 2010, where it held a 1-percent market share. In China, Bud sold for $1.75 per bottle (compared to $1 for most local brands). The premium market in China was just 3 percent of China's total beer sales, with Bud having a third of the segment. In Brazil, AB-InBev planned to sell Budweiser at a 15-percent premium over its local brands Skol and Brahma. The premium segment in Brazil represented just 5 percent, compared with around 20 percent in the United States and 40 percent in the United Kingdom. One other major player is Heineken, which formally established a presence in spring 2010 after it acquired FEMSA Cerveza. AB-InBev had high hopes for Bud. AB InBev decided to spend $3.1 billion in 2011 to build capacity to tap into demand in growth markets such as China and Brazil. Bud's marketing slogan for Brazil: "Great times are waiting."
Task
1) Beer brewers such as AB InBev and Heineken hope to turn their signature brands into powerhouse global brands. SABMiller, on the other hand, aims to build up a stable of strong local beer brands. Which strategy would be most effective and why?
2) Whom should Budweiser target, and how would you position it in Brazil?
3) What strategic marketing recommendations would you make for Budweiser in order to build up the brand in Brazil?
Part II
THE CASTING OF DOVE SOAP IN "UGLY WUDI" The Dove "Campaign for Real Beauty" was a global marketing campaign that Unilever started in 2004. The campaign featured women of different shapes and sizes. The theme of the campaign was to inspire women to feel comfortable with their looks. For instance, one ad would ask viewers to vote whether the woman featured in the ad was "gray" or "gorgeous"; another ad would ask them to judge whether a 44-year-old woman was "hot" or "not." The campaign built buzz for Unilever and won praise from feminists and the advertising community alike. However, the "Real Beauty" campaign struggled to gain traction in China. For years, the idea behind the campaign was lost on Chinese consumers. For instance, when asked the question whether the women in the ad were "fat or fabulous," most respondents in China would cast a "fat" vote. For good measure, some would add "and ugly." In China, "a model on billboards is something that women do aspire to, and feel is attainable," noted Mike Bryce, Unilever's Asia regional brand development manager for Dove skincare. With a market share of less than 2 percent in a $1.7 billion market for bath-and-shower products, Unilever went back to the drawing board. In 2007, Unilever conducted a market research study on Chinese ideas of beauty. One key insight is that many Chinese women believe they can match the level of beauty seen in advertisements, as long as they work on it. Based on this finding, the company decided to axe the "real women" campaign in China and try out something entirely new: branded entertainment. Along with its media agency, WPP's Mindshare, it decided to join forces with the creators behind Ugly Wudi, the Chinese version of the American Ugly Betty TV series. The deal gave Unilever the right to exclusive ads and product placements during the show. Unilever's marketing staff worked with the show's writers to embed some 3,300 seconds of the Dove brand into the script for the show's first season. The show premiered in September 2008. For the Chinese version, the writers dropped the Chinese Betty's siblings to conform to China's one-child policy and had her work at an ad agency instead of a fashion magazine. The deal allowed Unilever to plug Dove and to weave the brand's "Real Beauty" message into the show. For instance, in one plot element, the ad agency that Wudi worked for was pitching for the Dove account. When a problem arose during the pitch, Wudi stepped in and triggered a discussion about real beauty. The show also became a vehicle to pitch other Unilever brands. Characters would drink Lipton during office breaks. Fernando, the agency's boss, would wash his hair with Clear shampoo. The show did not claim that it was fine for the character to be ugly. In fact, many Chinese bloggers initially complained that the actress cast for Wudi was not ugly enough. In Dove commercials that featured Wudi, she had flawless skin but wore braces and ugly glasses to fit her less-attractive persona. Mindshare's Matteo Eaton said, "The challenge of this and all content campaigns is getting the stars aligned so that a project can go ahead. You need a program with a good fit, a broadcast with good reach and the right audience and good ratings potential, a price that proves value, and a client with budget and campaigns that have the right timing . . . . Ugly Betty is a show about true beauty, which is exactly what Dove's communication is all about". The show ranked No. 1 in its time-slot across China each time it aired during its first season. Unilever signed up for more, and the second season was scheduled to start in January 2009.
Task
1) Why did Dove's global "Real Beauty" ad campaign fail in China?
2) What could be the benefits of an Ugly Wudi-like brand integration campaign over traditional advertising campaigns? What could be some possible risks?
3) How would you measure the effectiveness of this campaign?
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