4.3 Price
4.3.1 Pricing objective of Heineken – using maximize current profit that below:
Heineken brew beer with natural ingredients. They use the predominantly barley, highest cereals, for brewing, and hops for flavor and bitterness. They need to access to high quality, adequate raw materials at an acceptable price. Their partners, maltsters that malt the barley and the farmers that grow the crops need to be convinced that Heineken disburse them at a fair price and support them over the long term. Making a dedication towards superior local sourcing and providing agricultural training and support, authorizes local farmers economically (greater guaranteed sales and better crop yield) and diminish both the cost and environmental impact for Heineken.
4.3.2 Pricing setting approaches of Heineken – Value base has positioned most of its beers in the middle priced segment. They want their beverages to be common place among the average consumer. However, they do view their beer as slightly above average or premium; this is reflected in their prices. They have a quality product and price it as such.
4.3.3 Price strategy
The premium beer of Heineken is placed internationally in the medium to higher price classes compared to the competitors. Heineken has different price strategies in different countries, so the medium or higher price depends on the country. In the Netherlands and Poland for example Heineken is a more mainstream brand and is medium priced. In the US, however, Heineken is higher priced and has a more exclusive status. Heineken follows a market pricing strategy and compares the price and quality of its beer with competitors. As the Heineken International website states, they deliver competitively priced, quality products. The price strategy also depends on the phase of beer in the product life cycle. In countries where Heineken is just introduced and is still innovative a higher price can be chosen than in the more mature markets as Europe. Also prices differ all over the world due to importing cost and government regulations. All in all Heineken presents its beer as premium beer and position itself in the premium price class, but the prices may differ locally in specific cases, due to a specific price strategy or due to different costs.
4.3.4 Consumer perception toward the price of Heineken
Consumer perception with respect to price is different and has a positive and a negative influence on the buying behavior.
According to economic recession have impact on buying behavior when income decreases consumers become price consciousness and shift their preferences to private label brands rather than choosing national brands .Consumers who prefer to buy more PLBs than national brand are price conscious. Also mentioned buyers are price seekers-those who look for low price, as a result, for some consumers having inexpensive product means achieving high value. Some consumers might associate low price with low quality. Those consumers who think price is an indicator of quality and companies might reduce the quality of the product to minimize the cost. Thus, to them the higher price is a signal of a better quality.
Moreover consumers relate price and quality with self-esteems. The increase in quality content and the higher price has a positive relation with our self-esteems. If the economic situation is good for all, majority want to eat high quality food.