Topic: Beer Specific Offer: Heineken Zero Non-Alcoholic LagerIntroduction This business report aims to use segmentation, targeting and positioning, to identify the target market for Heineken Zero and how it should be positioned within the Australian market.Heineken N.V. is a Dutch brewery in Amsterdam, founded by Gerard Heineken in 1864 (Heineken, 2018). It is the leading brewer in Europe and second in the world, operating in over 70 markets worldwide, with a team of 80,000 employees. Heineken has an annual beer production of 188.3 million hectolitres and revenue of EUR 20,511 million (Heineken, 2018).Heineken launched its newest beer, Heineken 0.0, in Australia on 9 October 2018, making the product available in 38 countries. Heineken 0.0 is an alcohol-free lager, twice brewed from scratch, with a balance of soft malty body and fruity notes. It contains only 69 calories per 330ml bottle and is sold in BWS and Dan Murphy (B&T Magazine, 2018; House, 2018; Hogan, 2018).Targeting StrategyHeineken adopts a differentiated targeting strategy. A multi-segmented marketing strategy refers to a company targeting different market segments and designing various offers for each segment (Kotler, Burton, Deans, Brown, Armstrong, 2012; Forsyth, 2009). Heineken Australia designs beers with unique attributes that are valued by customers. For instance, Heineken distributes the Iconic Lager, Heineken 3 (for drinkers who want mid-strength alcohol and lower carbohydrate and calories), Heineken 0.0 (for health-conscious drinkers who abstain from alcohol), Heineken Draught (thicker foam head for a more aromatic experience), Extra Cold (for party drinkers who want longer lasting refreshment) and Heineken Club Bottle (smart, sophisticated bottle designs for clubs) (Heineken, 2018). From selecting various types of natural ingredients, to re-designing the bottle for specific occasions, Heineken creates separate offers to appeal to the distinctive needs of each customer segment for various occasions. Thus, this strengthens customer’s overall identification of Heineken and builds brand loyalty resulting in more repeat purchase. Three Customer Profiles Profiling of beer is segmented into four segmentation variables; demographic, geographic, psychographic and behavioural. Market segmentation is the process of companies dividing the market into smaller groups to effectively and efficiently innovate products to meet the needs, wants and demands of its customers (Kotler et al, 2012; Wu, 2001). Companies engage in market segmentation to search for new product opportunities and areas which may be receptive to current product repositioning (Beane & Ennis, 1987).The first profile of potential customers are the health-conscious drinkers. IBIS World (2018) reported that health-consciousness in Australia has grown over the last 5 years and is anticipated to increase in the next 5 years.The second profile will be social drinkers, who drink moderately during social occasions. Drinking is an enormous part of the Australian culture (Gerrans, 2018) and alcohol is often used as a social lubricant for people to relax and unwind with their friends and relatives (Reid, 2013).The third profile are heavy drinkers, who drink more than 9 bottles of beer per week (The Foundation for Alcohol Research and Education, n.d.). 5.7 million Australians drink alcohol wanting to be drunk (The Foundation for Alcohol Research and Education, n.d.).When you pick each profile, briefly explain why you pick each group, if you use economical, you can compare in terms of price, therefore they target economical buyer. Product-what the product is to support benefit sought, price- use indicate income or benefit in terms of price or price sensitivity, place and promotion-promotion from  website such as why the product is unique to support the benefit sought.Profile 1 Health conscious drinkersProfile 2 Social drinkers   Profile 3 Heavy drinkers   DemographicAge22-37(DrinkWise, 2017)(find one from ABS!)18-65(ABS) 35-55(ABS) Gender60% Male40% Female (CEO of Roy Morgan Levine, 2018)Male and femaleMale and female Disposable Income per year80,000-100,000The full-time adult average weekly total earning=$1653.00 (Australian Bureau of Statistics, 2018)80,000-100,000110,000-130,000 Education10%High-school 30% Tertiary50% Bachelor’s degree10% Master’s degree 30% Tertiary70% Bachelor’s degree15% Tertiary 70% Bachelor degree15% Master’s degree OccupationStudents, professionals, white-collar workers, parents of younger families, retires.Students, professionals, white-collar workers, and parents of younger families, retiresProfessionals, white-collar workers, unemployedGeographicCityMajor cities in Australia and suburbs Major cities in Australia and suburbsMajor cities in Australia and suburbsPsychographic LifestyleHealthy lifestyleSociable lifestyleStressful and hectic lifestyles. Customers tend to use alcohol to unwind and relax from their high-pressure lifestyles that come from work stress and young children (DrinkWise, 2017) Social-classMedium to highMedium to high Medium to High ValueIndividuals who want to enjoy in a responsible mannerValue connection with othersEmotional satisfactionBehaviouralBenefit soughtTo have a be able to enjoy drinking at any time of the day and be a responsible drinker.To have a good social life.To satisfy emotional needs User Rate (number of times consumed in a week)High. Consumers have a wider window of moments to drink, including during working hours and after sports.Low to medium. In 2017, 37% of Australians drink weekly, dropping from 47% in 2007 (Drink Wise, 2017).High. Loyalty StatusHigh (health-conscious consumers have fewer alternatives of healthy beers)Low-medium (social drinkers can switch brand easily)High (consumers would want to stick to the brand that they prefer) Attitude towards productPositive and enthusiasticPositivePositiveExample: For Garmin Approach S60 Golf WatchCustomer Profile 1: Retired GolfersDemographics: Look at factors such as age, income levels, family sizes, relationship status – Discuss these factors using supporting academic references i.e. textbook, journalsPsychographics: Look at factors such as personality, values or lifestyle (i.e. golfing on the weekends for a hobby with friends, or someone who plays competitively).Usage rates: moderate users i.e. once a week or heavy users 2+ times per week. Purchase occasions, purchasing the product for a tournament or as a gift or for your hobby.Geographics: Living in the suburbs, close to a Golf Course or in a city/town where there is a golf course?Target Market Decision and Justification Specifically state the (one) chosen target market based on your analysis of the customer profiles in the previous section.Fully justify your selected target market based on your research, by linking the discussion to your specific offer. i.e. describe how the characteristics or benefits associated with the specific offer satisfies the needs or characteristics of the target market.You must include in-text citations to support your argumentsBased on the customer profiles, Heineken should target customers of profile 1. Sales of non-alcoholic beverages have increased 57% in the past 5 years (Carlton & United breweries, 2018) and 20% of Australians have refrained from alcohol in 2017, up from 11% in 2011 (DrinkWise, 2017). In addition, the percentage of Australians drinking weekly has dropped from 47% in 2007 to 37% in 2017 (DrinkWise, 2017). The drinking culture is maturing and there is an increasing preference for lower-alcohol alternative (Jackson, 2017) by health and weight conscious consumers who seek to enjoy the taste, but prefer to not get drunk. According to Heineken’s brewmaster Willem van Waesberghe, Heineken 0.0, is a mix of 2 brews of various qualities, to retain the original taste (B&T Magazine, 2017). Containing half the calories of a full-strength beer, Heineken 0.0 successfully taps on and satisfies the dual-yet-opposite needs of consumers, who are looking to balance psychological and social desires to consume alcohol and simultaneously keep healthy, and provides a wider window of moments for them to indulge responsibly. Competitor Analysis (100 words):Identify 3 major competing brands (companies) and major offers that compete with your selected offer.Use evidence to justify why these are considered as major competing brands and offers.You must include in-text citations to support your argumentsCompetitor analysis is crucial to Heineken’s success as it prepares Heineken with the ability to identify industry trends and adapt to competitor’s strategies. Prior to the launch of Heineken 0.0, 3 major competing brands, Carlton, Coopers and Hanh have entered the no and low alcohol market, which is expected to exceed US$25 billion by 2024 (Global Market Insights, 2018).In August 2018, Carlton launched its first non-alcoholic beer, Carlton Zero, after consolidating feedbacks from its customers who want to enjoy alcohol responsibly and at the same time still be able to have the taste of Carlton (Carlton & United Brewery, 2018). Being the only other zero alcohol beer in Australia, Carlton is a major competitor of Heineken as customers can choose to purchase from either company.Coopers Birell Ultra-Light has an alcohol content of 0.5% and is made using finest Australian malted barley, hops and yeast, with no added sugar (Coopers, 2018). Containing only 74 calories (Coopers, 2018) it is a strong competitor of Heineken in terms of offering customers low calorie beer.Lastly, Hanh premium light contains 2.4% alcohol and is 99.9% sugar-free and preservative free (Hanh, 2018). It is a major competitor as it contains only 9.6g of carbohydrates (Hanh, 2018), which is favourable to Australians who are preferring lower carbs beer in recent years.  Perceptual (Positioning) Map (300 words):State the two evaluative criteria chosen to draw the perceptual map, (the use of the price and quality combination is not permitted.)Justify why you selected the two criteria.Draw the perceptual map. (Plot your product and the 3 competing products identified in the competitor analysis section.Justify why you placed the products in their respective locations.You must include in-text citations to support your argumentsFirms use perceptual maps to develop a market positioning strategy. As the maps show where existing products are positioned in the market, firms can decide on where they would like to position their products so that it fills a gap in the market (Sinclair & Stalling, 1990).The two evaluative criteria are the strength of the beer and the level of carbohydrates. The strength of beer is chosen as various customers want different alcohol content for different occasions. In this case, Heineken 0.0 is the perfect choice for customers who want to avoid becoming drunk, and allows certain individuals who do not consume alcohol previously to be able to experience the taste of alcohol now. The level of carbohydrates is a determining factor for many Australian drinkers who are looking to consume low carb beers.High CarbsMid strength alcoholNo alcoholLow Carbss Carlton Zero is positioned at the top left corner of the map as it contains 0% alcohol, but has a high level of carb, containing 26g per 375 ml (MyFitnessPal, n.d.). Coopers Birell Ultra-Light is placed on the bottom right of the intersection as it contains 0.5% alcohol and 14 g carb per 375 ml (Coopers, 2018.). Lastly, Hanh Premium Light is located on the further bottom right of the map as it contains 2.4 % alcohol and only 9.6g carb (Hanh, 2018).According to the map, Heineken’s direct competitor will be Carlton Zero. As both products offer zero alcohol beer, potential Australian customers of Heineken might choose Carlton due to patriotism. 9 out of 10 (6,035,000 individuals) drink Aussie beer in an average four weeks, 17 % of the beer drinkers choosing Carlton Draught as the most well-liked Aussie beer (Roy Morgan, 2015). However, as Carlton Zero contains 26g of carbs, health-conscious and weight-conscious customers, will choose Heineken 0.0 which contains 16g of carbs (Heineken, 2018).A good marketing opportunity is to create a non-alcoholic beer with low carb level similar to Hanh Premium light. As there are no strong competitors in the same location and the demand for zero alcohol and low carb beer is sufficiently large, therefore Heineken should explore this opportunity to become the world’s best brewer. Reference List B&T Magazine. (2018, October 9). Heineken latest to launch alcohol free beer to the Australian market. Retrieved from http://www.bandt.com.au/marketing/heineken-latest-launch-alcohol-free-beer-australian-market?         B&T Magazine. (2017, May 16). Heineken’s New “0.0” No-Booze Beer Set To Target Coke Drinkers. Retrieved from http://www.bandt.com.au/marketing/heinekens-new-0-0-no-alcohol-beer-marketed-healthier-alternative-cokeBeane, T.P. & Ennis, D.M. (1987) “Market Segmentation: A Review“, European Journal of Marketing, Vol. 21 Issue: 5, pp.20-42. Retrieved from https://doi.org/10.1108/EUM0000000004695Carlton & United Breweries. (2018, August 28) CUB to re-write the rules and launch its first non-alcoholic beer: Carlton zero. Retrieved 23 August, 2018 from https://cub.com.au/cub-to-re-write-the-rules-and-launch-its-first-non-alcoholic-beer-carlton-zero/Coopers. (n.d.). Coopers Birell Ultra-Light Nutritional Information. Retrieved from  https://coopers.com.au/our-beer/lower-alcohol/birellDrinkWise (2017). Australian Drinking Habits 2007 vs 2017. Retrieved from https://drinkwise.org.au/wp-content/uploads/DrinkWise-Australian-Drinking-Habits-2007-vs-2017-web.pdfLin, C. F. (2002) “Segmenting customer brand preference: demographic or psychographic”, Journal of Product & Brand Management, Vol. 11 Issue: 4, pp.249-268. Retrieved from https://doi.org/10.1108/10610420210435443Gerrans, M. (2018, April 6). Drinking culture in Australia. Retrieved April 6, 2018 from http://insiderguides.com.au/alcohol-in-australia/Heineken. (n.d.). Company & Strategy. Retrieved from https://www.theheinekencompany.com/About-Us/Company-StrategyHeineken. (n.d.). The Heineken Story. 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