Implementation of the Desperados beer on the Spanish market

Résumé du document

Desperados is a famous brand in countries such as France and Germany; the brand is now trying to grow internationally by entering the Spanish market. The beer Spanish market is a very favorable market for a product like the Desperados beer. The total beer market represents 19 billion Euros in 2008, growing at 3% per year. The beer market in Spain despite of its large total is still in the growth phase of the product lifecycle representing big opportunities for companies willing to enter it.

Moreover the size of the market is increased by the number of tourists visiting the country each year as Spain is the second most visited country in the world. With this arrival of tourist during the summer period the beer market is suffering a deep seasonality.

There are several types of beers sold in the Spanish market: classic beers, special beers, dark beers and extra beers. These types of products are aiming at all the segments of the Spanish population, but the special beers segment which includes the Desperados products is the most growing one. Desperado must target the 25 to 35 years old segment as it is the segment of the population who spends the most on socializing with a reasonable income.

In terms of environment analysis, Spain is a good country to penetrate as the political system is stable; the country is also a member of the European Union, the Euro zone and the Schengen agreement which eases commercial relations within member states.

For the legal environment, the legal age to drink alcohol beverage is 18 years old, which is quite low compared to other countries (ex: USA), and enlarges the target market. Spain also has a good technological environment with all the required infrastructure to run a business and easy connections with on the Spanish European states.

In terms of environment, the negative sides are the actual economical situation of Spain, as the country entered recession, but the purchasing power is still high with a minimum wage of 800€ per month. The other negative side is the fact that Spain is in a full demographic crisis with a dramatic decrease of the birth rate, for the moment balanced by the immigration rate.

The Spanish beer market is controlled by three main actors who are: Heineken, Mahou San Miguel and Damn. These competitors for Desperados have several competitive advantages, the strongest being: their brand image, awareness and recognition. So, Desperados has to create its own brand image who will match its target consumer's interests.

Extraits

[...] Desperado must so have an image matching with socialization activities and places (example: parties, bars, night clubs ) Competitor analysis: As 80% of the market is concentrated between 3 companies (Heineken, Mahou San Miguel, Damn), it is interesting to study only the three of them as they will be the three main competitors. Heineken is one of the main actors on the Spanish market and is Desperado's parent company but it can be considered as a competitor as its range of products will compete with Desperado. Competitor Heineken: Heineken is differentiating from the two other main actors thanks to its brand image of a quality beer importer whereas the other competitors are Spanish brewers. Heineken also has a strong brand awareness and recognition all over the world. [...]

[...] The promotion campaign will shape the brand image toward the target segment. The brand image having to be entertaining, trendy and young, the company can use a slogan as a bit of vacation in your parties”. The communication campaign must be seen on television, on billboards and on magazines as the product is a mass consumption product, and is targeting a wide part of the Spanish population. On another hand the company must also employ other marketing tools like events and sponsoring. [...]

[...] VIII/Financial documents: Communication budget: CONCLUSION: The Spanish market represents high opportunities for the Desperados Company that will also take profit from the strong presence of its parent company the Heineken group in Spain. Thanks to its competitive advantages, its “know in brewing, marketing beers and its international experience, Desperados should be able to have high profit on this market as the environment is favorable to this product. Nevertheless the marketing plan has to be well implemented in order to balance the risks that are present on the Spanish market. [...]

[...] VII/Contingency plans: The key risk of the plan is the acceptance of the Desperados taste by the Spanish population and especially by the target market. Nevertheless, the presence of the Tequila in the Latin culture and the successful acceptance of the Desperado in Western Europe market such as France and Germany decrease this risk. The competition risk is also important as three companies are controlling the whole market. These companies have high market shares (more than 80% for the three of them), high brand awareness and recognition. [...]

[...] Spain represents the largest beer market in southern Europe. (Source: http://www.scribd.com/doc/7203340/Beer-Market-Report) Beer in Spain represents a large part of the alcoholic beverage consumption; it is mainly competed by wines as in other countries. On this market the demand and sales of special beers have considerably increased, the most important growths are now represented by the special beers and the alcohol free beers. The market generated total revenues of 19 billion Euros in 2008, and three companies are dominating 80% of the market, generating total revenues of 15.2 billion Euros in 2008. [...]