MURPHY BREWERY IRELAND SYNOPSIS This case examines the marketing of Murphy’s Irish Stout at the time of the merger between Guinness and Grand Metropolitan - Murphys Brewery introduction. Murphy Brewery is owned by Heineken International and has expanded its scope beyond Ireland in recent years. However, the brand is a distant second internationally to Guinness in the stout category. Furthermore, the company has launched a new brand—Murphy’s Irish Amber. This case discusses the Murphy’s situation in Ireland, the UK, and Europe, as well as the United States.
One of the issues to be examined is whether the company should have similar positioning worldwide. Key Issues Marketing Strategy Questions—This case is intended to address the marketing strategy questions facing Murphy’s. For example, what target market should the company focus on? Is its product line broad enough? Is the pricing strategy accurate? How can the channels of distribution be deepened for the brand? How should the brand be positioned and promoted? Divisional versus Corporate Objectives—How extensively is Heineken willing to promote Murphy’s brand worldwide?
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Should Heineken concentrate its efforts only on the more “affluent” segments throughout the world, given the high status and price of the brand? How should Heineken address the impending production shortage at Murphy Brewery located in Cork? Ethical Issues—Can Murphy’s promote these brands as “authentically” Irish if they are not manufactured in Ireland? What responsibilities do Heineken and other breweries have for promoting responsible consumption, especially if they are targeting young adults? ANALYSIS The case concludes with a number of questions that the Murphy’s executives are considering. . Should Murphy’s employ a global rather than a local marketing strategy worldwide? In your opinion, what is the best positioning? What theme(s) and message(s) should Murphy’s communicate? Will Guinness’s (then) current ad campaign (Exhibit 7) help or hurt Murphy’s or is Guinness just too formidable an entrenched competitor? 2. Should the company continue to make the two brands only at the Cork brewery for the lucrative U. S. market, or should they consider making the product in that country? It worked for automobiles, why not beer? Is this an ethical issue or not?
Furthermore, the larger ethical question for all beer marketers is targeting underage consumers – how should this issue be approached? 3. What market segments should serve as a target for Murphy’s Irish Stout and Irish Amber? Although the case does not explicitly examine segmentation and targeting, what age groups should Murphy’s pursue for the two products: Stout and Amber? Why did you choose these two groups and what longer term results would you expect? How does your own experience bear on your recommendation? How would you target your own age group [i. e. which product(s)]? 4. What product and brand issues should Murphy’s alter? Are the quality and taste appropriate for the US targeted segment(s)? What other product/packaging issues could arise? Does Murphy’s need to add more types of beer to be competitive? Can it capitalize on its brand equity or is it not strong enough? THE EXAM WILL BE OPEN BOOK; HOWEVER, REFERENCES SHOULD BE LIMITED TO THE CASE ITSELF. The exhibits contain valuable information that should facilitate analysis of the case. Exhibit 1 shows Murphy’s growth since its takeover by Heineken.
The recent growth is particularly impressive and likely signals a more aggressive posture by Heineken toward the brands. MIS consumption in Ireland is relatively flat, and even the recent ad campaign has not led to significant sales improvement. The export market for Murphy’s products has “exploded” in the mid-1990s. Exhibit 2 is intended to convey useful information about the stout product. For students who are unfamiliar with the product category, this should prove helpful. The exhibit contains useful data that “proves” that Murphy’s is less bitter than Guinness.
Exhibit 3 should be studied closely to understand the branding and labelling strategy for the two brands. The date that Murphy’s was established—1856—is included on the front panel as well as the Murphy’s family crest below the date. The back panel contains the historical perspective on the MIS product and the product quality emphasis. The U. S. government mandated warning is shown on both labels from the U. S. Furthermore, the warning to not drink directly from the bottle is an example of the company taking an ethical posture. Exhibit 4 shows that Heineken is a major worldwide player in the beer market.
Its percentage of 89% export is the highest of all brewers. Its size is only 60% of AB. Exhibit 5 depicts the GMG brands. The size of Guinness compared to Murphy’s is much larger. The fact that with the merger GMG has Bailey’s Irish Creme in its stable of brands is significant. Exhibit 6 shows the most popular imported brands in the U. S. The Murphy’s size of the market can be calculated from the two sets of numbers by multiplying the gallons from Ireland in 94, 95 and 96 by 2. 25 and subtracting the Guinness numbers from them.
Exhibit 7 – The Wall Street Journal article captures the current strategy of Guinness and its recent success in the U. S. Students can be encouraged to search out similar business press articles from their country. Exhibit 8 shows the size of the world beer market. It should be noted that the specialty category is growing faster than the others, which is good news for Murphy’s. Exhibit 9 depicts information about the country and Irish people. Do you agree with these characterizations and to come up with other descriptors that might be used by Murphy’s to capture its Irishness? 10 April 2010