BRAND HEALTH CHECK: Kloster - Priming Kloster for a return Thailand bout

Kloster was the first foreign beer brand to hit the Thai market 20 years ago. Let down by poor distribution and marketing, however, it quickly lost ground to newer arrivals.

Now, Boon Rawd Brewery is attempting to breathe new life into the Interbrew brand, having snared production, distribution and marketing rights from Thai Amarit Brewery.

Boon Rawd has set ambitious goals: to boost Kloster's share of the 50 billion baht (US$1.2 billion) beer market to three to four per cent by 2004 and to challenge Heineken's grip on the premium beer market.

Heineken currently has an eight per cent share of the domestic beer market, but enjoys an 80 per cent share of the premium segment.

Boon Rawd brings to Kloster a well-established and efficient distribution network, including 1,000 exclusive outlets, redressing part of Kloster's problems under Thai Amarit. It has also invested 50 million baht into a marketing campaign, which will rely heavily on below-the-line activities.

The brewer has also conducted an internal consumer survey that showed Kloster as "too traditional and not yuppie enough". As a result, it plans to repackage the brand in different colours and give it a cleaner look.

In relaunching Kloster, Boon Rawd can draw on its failed attempt to enter the premium beer segment with Mittweider. Marketed as a foreign beer, Mittweider lasted three years and is currently being phased out.

"The only real foreign component of Mittweider was the ownership of a small European brewery and the recipe. The image was confused however, due to Boon Rawd's strong Thai corporate image," noted a recent Asian Market Research News report.

Kloster will have to battle Klassic K, a new Thai Amarit beer that uses the tagline 'The Happiness Beer', and is perceived by the market as the "new" Kloster. It has also been observed that legal issues will prevent Boon Rawd from taking over the 'Happiness You Can Drink' tagline, which has worked well for Kloster.

Meanwhile, Heineken is unlikely to sit back and do nothing to protect its turf in its biggest Asian market.

VITAL SIGNS
Thailand's beer market consumption
                                   2002            2001            2000
                            Sales value     Sales value     Sales value
                                 (baht)          (baht)          (baht)
Total beer market           37.4 billion    32.9 billion    31.4 billion
Total premium beer           2.1 billion     1.8 billion     1.9 billion
Total Klassik K & Kloster   58.9 million    79.2 million     129 million
Source: ACNielsen Thailand Retail Index

DIAGNOSIS

Andy Wheatley, Managing director, Enterprise IG Bangkok

Much of Kloster's success depends on what goal Boon Rawd sets out to achieve with the brand. Is it really launching a full frontal assault on Heineken's grip on the premium beer market?

Heineken is one of the most successful beer brands on the planet. It sells because it has established itself as a de facto standard in the market. Has Boon Rawd got the patience or the budget to finance such a challenge?

Granted, Kloster's revival will not have the distribution problems that contributed to its previous downfall, and it will have over 1,000 exclusive outlets throughout the country. These two facts alone will guarantee a modicum of success, but to achieve the kind of popularity Boon Rawd appears to have targeted, Kloster needs a compelling reason for purchase beyond availability, a reason that can only be identified through rigourous analysis of appropriate research. It's no longer good enough to have a sexy media blitz. Today's consumer just isn't fickle enough. He/she needs emotional and rational hooks to buy a particular beer.

And don't underestimate the importance of visual equity. Heineken green, Budweiser red, Guinness black - how many of the world's leading beers also own a clear visual style and just how important is it? The answer is simple. It's crucial.

Rod Davies, Principal, Orient Pacific Century Market & Brand Research

It will take a genuine effort to re-brand Kloster to compete directly with Heineken for the young upwardly mobile market, if that is what Boon Rawd has in mind.

Kloster has always performed well in taste tests and as a "sleeper" brand; the Boon Rawd acquisition made a lot of sense when the Mittweider launch failed. Yet unlike a new brand, Kloster comes with a brand equity that is at once both positive and negative for brand strategy.

Kloster is positioned closer to Heineken than any other leading brand in the Thai market. It is seen as premium and classy, with a smoother taste and strong packaging. On the other hand there is considerable brand equity built up in the Kloster brand personality that differentiates it from Heineken, and perhaps the very market that Boon Rawd wishes to target with any rebranding effort.

Heineken is seen as a more youthful beer, while Kloster is seen as a more mature, drink for older and more senior professionals.

Significant numbers of Kloster drinkers switched to Heineken simply because the latter was more available. The highest brand-switching factor was availability - a weakness that Boon Rawd is out to remedy by acquiring the brand into its solid distribution network.

TREATMENT

Wheatley's prescription

- Ensure that the competitive set is correctly identified. Perhaps Kloster could attack a more niche market than Heineken based on exclusivity rather than availability.

- Don't skimp on research. Commission it and rigourously analyse it for critical insights into why consumers select specific beers and use it to drive the brand's communications.

- Use semiotics to establish a visual language that the brand can own, encompassing all packaging, communications and POS material.

Davies' remedy

- Don't compete directly with Heineken, but position it as an alternative to the "herd" instinct. The market leader may already be suffering from populism.

- Don't repeat past mistakes. Build on the existing "exclusive small group" brand as well as the sophisticated and classy brand image. Be proudly Thai - an example of a Thai brand that can compete internationally.

- Price high. Focus on tangible existing benefits such as taste.