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Beer industry tapping into niche marketing

With a saturated market of more than a dozen companies producing well over 50 different products, local brewers find themselves in the midst of one of the fiercest competitions in all of Slovak business. Increasingly, the winners and losers are being determined by the success of the marketing strategies they employ.
While some local beer producers rely on traditional lures for Slovak consumers such as lower price or regional identification, international brewers active in Slovakia have been trying to create national brand loyalties through such concepts as image and quality - an old-school versus new-school battle whose outcome is yet to be decided.
The Slovak presence of brewing empire South African Breweries is secured by the labels Šariš and Smädný Mních. Robert Priday, the director of Šariš brewery, said that his main strategy was to increase the Šariš customer base through brand loyalty rather than competing in realms such as price.

With a saturated market of more than a dozen companies producing well over 50 different products, local brewers find themselves in the midst of one of the fiercest competitions in all of Slovak business. Increasingly, the winners and losers are being determined by the success of the marketing strategies they employ.

While some local beer producers rely on traditional lures for Slovak consumers such as lower price or regional identification, international brewers active in Slovakia have been trying to create national brand loyalties through such concepts as image and quality - an old-school versus new-school battle whose outcome is yet to be decided.

The Slovak presence of brewing empire South African Breweries is secured by the labels Šariš and Smädný Mních. Robert Priday, the director of Šariš brewery, said that his main strategy was to increase the Šariš customer base through brand loyalty rather than competing in realms such as price.

"It really is about marketing a brand rather than selling a commodity," Priday said. "If you look at both Heineken and ourselves, both of us are taking our brands nationally and using marketing to do it rather that using price dumping tactics or other such methods."

In one television ad promoting Šariš, the company touts the brew as 'just as good' as beer made in the Czech Republic. While some marketing experts feel that comparative advertising has had its day in Slovakia (see related story, this page), Priday cited a study showing that 98% of Slovaks felt the best beer in world came from the Czech Republic. Comparing Šariš to Czech beer, he said, helped the brand to overcome the image of eastern Slovak beers as somehow inferior.

"The advertisment tries to re-awaken the idea that this is actually a good beer and you should try it." Priday said. "We are trying to position this brand as being as good as any Czech brand. We are proud of this [that Šariš is just as good as Czech beer], and we want the consumer to know this."

Presently, according to Priday, Šariš brewery holds a 14-15% share of the market in Slovakia with its Šariš and Smadný Mnich labels.

Dutch brewery Heineken, on the other hand, has tried to create a specific national audience for each of its labels. The firm pioneered the idea of selling beer nationally when it purchased Zlatý Bažant in 1995 and Corgoň in 1997. Before this, said Heineken Slovakia managing director Jean-Paul van Hollebeke, beer consumption patterns had been defined by region, with brewers marketing and selling in the areas surrounding their production facilities. Heineken, according to Hollebeke, was the first brewer in Slovakia to distribute its product in cans and promote itself through beer commercials.

Van Hollebeke said Heineken (which also owns the Martiner and Gemer labels), looked to address a wide variety of beer drinkers by offering different beers for different occasions, consumer styles and budgets. "Our target is to be able to offer the consumer different types of beers at different prices," van Hollebeke said.

Heineken's Corgoň label, for example, was formerly seen as a working man's beer, but was repackaged by the new Dutch owner to appeal young athletic types. A statue of an Atlas-figure in Nitra, where Corgoň is made, has become identified with the beer brand itself.

"Corgoň used to be the brand of Nitra, drunk by the workforce," van Hollebeke explained. "Now Corgoň is seen as the brand for young, energetic people. It is very successful. The change in image was a gamble, but a gamble that was well researched. It is necessary to have a vision - you don't look to how it will be tomorrow, but how it will be two or three or five years down the road."

Heineken's strategy seems to be paying off. When the company purchased Corgoň in 1997, the brand had a 7% market share, a number that has since jumped to around 10%. In total, Heineken's share of the Slovak beer market between its four brands hovers around 40%.

One company not joining in on the niche marketing strategies of its western counterparts is the Slovak-owned Topvar Brewery, which produces Topvar beer. Brewery director Peter Vendelín said that his company's traditional marketing strategy of presenting the product as 'the beer from Topoľčany', and offering it to a wide audience, was not about to change any time soon.

"We had a marketing strategy in the beer market long before Heineken's arrival. The image of our product has not been changed, only the marketing effort has intensified," Vendelín said, refusing to answer questions about the beer's image.

The largest brewery owned and operated by Slovaks, Topvar sold a record 588,000 hectolitres of beer in 1999 and boasted a 13.4% market share for the first four months of 2000.

"The Slovak (market) is not strongly differentiated," said Vendelín. "Our product is designed to be acceptable to a wide range of customers."

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