Czech Republic: SABMiller owned Plzensky Prazdroj sets focus on marketing

Czechs are the biggest consumers of the beverage (160l/person per year) in the world but historically little attention was paid to marketing until SABMiller bought Plzensky Prazdroj breweries in 1999, the Thomson Dialog NewsEdge reported May 26.

Derek Jones is a 42-year- old South African who has been given the intriguing job of marketing beer to Czechs.

Marketing is now a primary focus, as rival Belgian giant Ambev with brands like Stella Artois and Beck's is actively targeting central and eastern Europe as well as Russia, and is a threat to SAB's flagship Czech brand Pilsner Urquell. Jones cut his teeth in the increasingly fierce Russian beer market.

Plzensky Prazdroj has the highest beer sales in the Czech Republic and is the biggest local exporter of beer, to almost 50 countries.

Jones's portfolio includes seven house brands, but his main focus is on Pilsner Urquell, as well as mass seller Gambrinus, and popular regional brands Radegast and Velkopopovicky Kozel.

Jones acknowledges he's facing an uphill battle. In spite of its vast annual consumption 40l/person more than Germany and 100l more than SA the Czech beer market is flat and there has been a slow decline in the rest of Western Europe. The market has been eroded by increasingly popular alcohol-cordial drinks and a perception in the important 18-35-year-old consumer category that beer is an old person's drink. The SA beer market has faced similar problems.

Jones says his job is made more difficult because marketing beer particularly during the era of communism has never been seen as a business imperative in the Czech Republic, so few skills are available. His first priority has been to reinforce the notion of market segmentation among the different brands, both internally and externally.

A second local challenge has been to improve bottling and labelling. Many of the used bottles were being returned in a scuffed or damaged state especially unacceptable in premium brands. Better and more prominent labelling has also been introduced.

Jones says media options for brand enhancement are not as varied as in the SA market, with television, outdoor and print being the traditional options. Sponsorship is also a new focus. In the case of Velkopopovicky Kozel, a test opportunity was developed where a local games event for firemen was sponsored for the first time, along with a music festival. Response was positive and was reflected in sales.

The company is also focusing on experiential marketing, where a brand is taken to selected social and cultural events. Tasting opportunities are offered and branded gear is then given away. Castle Lager, through its popular gig-rig, has been using this concept in SA for some time and Jones says the idea has been well exported.

The Pilsner Urquell brewery developed a concept-driven brewery experience (which was used in the 1990s as a template for the popular World of Beer experience in Johannesburg's Newtown). At present, most of the visitors are German. The challenge is to find more Czech visitors and get them to buy the product all year round.

In all of its marketing activities, the SABMiller connection is not evident at all. In line with SABMiller policy globally, no parent company branding appears on the European bottles. Plzensky Prazdroj executives say the Czech brewing operation is seen as a source of national pride.

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