ANHEUSER-BUSCH MARKETING.   Term Paper ID:18432 Click to get this paper

Essay Subject: Promotion plan for 'Natural Light' beer. Objectives, recommendations, background, pricing, etc. Tables.... More...

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Paper Abstract: Promotion plan for 'Natural Light' beer. Objectives, recommendations, background, pricing, etc. Tables. Paper Introduction: In 1861, Adolphus Busch married the daughter of Eberhard Anheuser, a St. Louis beer brewer and soap maker. By 1874, Adolphus was a full partner in his father-in-law's business, and in 1876, he created the Budweiser brand. Budweiser (named for a town in Bohemia) became America's first nationally marketed beer and Adolphus' progeny became masters of the company which sells more beer than any other in the world. This research examines the beverage industry in general and the beer industry in particular. Focus is directed to the demographics of beer drinkers and the marketing techniques employed by the beer industry. Finally, a promotional plan is presented for one of Anheuser Busch's products, Natural Light. Per capita consumption of beverages gives an indication of the attraction to companies such as Anheuser-Busch and Miller Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. ofcourse, it also provides an outlet for selling the company's product, aswell. By 1874, Adolphus was a full partnerin his father-in-law's business, and in 1876, he created the Budweiserbrand. Each year, each wholesaler isrequired to suggest a special local promotion for each brand. It's initial slogan, "Whysettle for just a light?" has become too closely associated with BudLight's "Anything else is just a light," for consumers to differentiate thetwo effectively (Ries 42). Americans between the ages of 18 and 29 drinkbeer at a greater rate than they will at any other time during their lives. The top 1 beers, by brand, within theUnited States for 1986 are presented in the following chart (Jabbonsky 43): Brand 1986 Market Share 1985 Market Share Budweiser 26. By the early 198 s, Miller andAnheuser-Busch had developed exclusivity clauses with promoters of largesporting events. Stroh'sfiled a complaint in 1985 with the Justice Department, claiming that suchcontracts represented restraint of trade, but the contracts were upheld. The product contributes to overall sales, but not at thestaggering volume of Budweiser and Bud Light, or even the respectable levelof Michelob ("Tallying" 23). It should be noted that of these top ten beers, four (Budweiser,Bud Light, Busch and Michelob) are Anheuser-Busch products, representing36.4 percent of the total market. No otherbeer company had more than a 12 percent share (Johnson 75). Were Anheuser-Busch ceaseproduction of Natural Light, those consumers would go to other brands.While Anheuser-Busch would pick up new consumers for its Bud Light brand,Miller would be sure to gain additional consumers for Miller Lite. Under these contracts, Busch and Miller have the right torenew their advertising before the spots can be offered to other companies. By 1987, the light share had increased to24.58 percent (Johnson 74). Both are stronglyassociated with sports and readily available at sporting events. "A-B Switches off Michelob Light Ads." Advertising Age (9 May 1988): 24."Why the Beer Market Went Flat." U.S. Budweiser (named for a town in Bohemia) became America's firstnationally marketed beer and Adolphus' progeny became masters of thecompany which sells more beer than any other in the world. It lacks the name tie-in of Michelob orBudweiser, and so suffers an identity problem. Anheuser-Busch products are the only beers available in theballpark. For example, a distributor on Long Island and the Michelob Lightproduct manager used a "Michelob Light Concentration Day" to boost flatsales. Of course, distribution is also key. This researchexamines the beverage industry in general and the beer industry inparticular. Despite this, AnheuserBusch remains confident that it willsuccessfully maintain its share, and even increase it. Thesedemographics help explain the close relationship that has developed betweenbeer manufacturers and the sports community. At a time whenoverall beer sales are declining, Anheuser-Busch continues to capture aneven greater share of the beer market, and has as its goal a full 5 percent market share (Sellers 1 ). The campaign haschanged somewhat in the intervening years, with single players or pairsbeing used rather than entire groups, but the general approach remains thesame, making it one of the longest-running themes in beer marketing. 1988): 38- 42.Sellers, Patricia. In 1953, August A. The two brewing giants share Monday Night Football on ABC; Miller has anexclusive arrangements with the National Basketball Association and CBS.Anheuser-Busch is the exclusive beer advertiser for ESPN and has been sincethe network's beginnings in 1979. Anheuser-Busch supplied the brand team from corporate headquartersin tuxedos and rode on the distributor's trucks. Old Milwaukee and Stroh's areboth made by the Stroh Brewing Company and accounted for less than sevenpercent of the market. Beer sales are typically measured in barrels, and include sales ofbottles, cans and draught beer. While theConcentration Day is too grand scale to effectively promote the NaturalLight brand, distributors can be encouraged through the use of premiums anda more aggressive discount structure. One day, all of the distributors trucks carried only Michelob Lightbeer. The top ten beers of 1986 are now manufactured byonly three brewers: AnheuserBusch, Miller Brewing Company and Coors-Stroh. Anheuser-Busch believes in a strong distribution channel. Some stadiums have established"no-beer" sections, and others have banned the sale of beer in the stands.If the fans want a beer, they must go to a concession stand. When Miller introduced its Miller Lite brand in 1974, it targetedsports participants with a campaign that featured retired sports figures.The product fit was natural: a beer with less calories for those who areactive (and therefore are concerned about their health and weight). There was no tie-in to other Busch products, exceptthe relatively weak Busch brand. There are marketing difficulties facing the giant brewer, however.Violent and unruly incidents attributed to drinking at sporting events haveled to greater control of alcohol sales. At the time it was purchased,Miller Brewing Company ranked seventh among American brewers (Sellers 1 ). A foray into a reduced alcohol content beer, "L.A."was disastrous for the company, which ceased production of the product lessthan two years after introducing it. For example, in 1987, the Cincinnati Reds sold 12,61 half-barrels and 35,365 cases of beer at Riverfront Stadium. In addition to a heavy concentration of beer advertising in sports,beer manufacturers also sponsor sporting events, teams and individualcompetitors. % 7.1% Coors 4.3% 4.7% Old Milwaukee 3.9% 3.9% Coors Light 3.8% 3.2% Bud Light 3.6% 2.8% Busch 3.6% 3.1% Michelob 3.2% 3.6% Stroh's 2.9% 3.1% Other brands accounted for the remaining 32.3 percent of the marketin 1986. Miller has been so firmly committed to that philosophy that itdominated advertising on television sports programs in the late 197 s.Anheuser-Busch began advertising on television in the late 197 s, butquickly regained the advantage over Miller. 1988): 68-82.Ries, Al. Such market dominance is made possibleby selling numerous brands which actively compete with each other, butwhich all contribute to Anheuser-Busch's overall success. To understand the beer market, it is necessary to understand whotypically purchases beer. August Busch III,who is responsible for California, the biggest-volume state, visitsdistributors at least twice each year. It is unlikely that Natural Light will become astrong brand given Bud Light and Miller Lite. 1989): 16-17.----------------------- 12 As strong a drawas the AnheuserBusch name is, it is also associated with a particular kindof beer appealing to an average and unsophisticated beer palate ("Why theBeer Market Went Flat" 16). When Budweiser Light was introduced, itquickly surpassed Natural Light as the Anheuser-Busch light cornerstone. 1987): 42-44.Johnson, William Oscar. Positioning the product is key, as well. Sports and sports related promotions are a key area of emphasiswithin the marketing of beer. Globally, Budweiser outsells every otherbrand of beer in the world. Beer analysts have divided the market intopackaged beer (cans, bottles) and unpackaged beer (served from taps in barsand at sporting events). The name itself proved a problemfrom the beginning. It is harder to obtainin bars, and does not have the same distribution stronghold of Budweiserand Bud Light (Ries 4 ). Anheuser-Busch has grownin its marketing sophistication from the days when "Under the AnheuserBush," "The Budweiser Rag" and "Bud Weiser's a Friend of Mine" were playedon the ever-present piano in taverns. There is a strong tie-in between Bud Light andits companion, Budweiser, with nearly identical labels. By aggressively marketing brands suchas Natural Light, Anheuser-Busch may well obtain its 5 percent marketshare within the 199 s. The result: more than 21, cases sold in one day; typicallythat is the amount sold in 2 days. Sponsorship of smaller, regionalevents such as marathons or cycling races could help to promote the"hometown" feel of Natural Light, and give a tie-in to the name that itcurrently lacks. Today that link most oftentakes the form of sporting events, although beer is also available not onlyin bars, but in pizza houses and sandwich shops. Unless an event is sponsored or producedby another beer company, only Anheuser-Busch beers are advertised. Louis Cardinals has greatly enhancedthe success of the company, and provided a dominant market position. In fact, it is estimated that a core group of 2 percent of the beerdrinking population, males between the ages of 18 and 34, consume more than7 percent of all beer. Campaigns such as "It's Miller Time," helped boost sales of Miller'sflagship brand, High Life, previously positioned as the champagne of beers. Total sales aftertaxes amounted to $4,635,514. The sophisticated and aggressive marketing tact pursued by Millertook the rest of the beer industry, and AnheuserBusch in particular, bysurprise. Busch, Jr., president of the AnheuserBuschbrewery, bought the St. "Tastes great," "lessfilling" took the theme of competition established with the use of sportsfigures and continued it throughout the advertisement. Per capita consumption of beverages gives an indication of theattraction to companies such as Anheuser-Busch and Miller Brewing Company.The following table illustrates per capita consumption of beverages acrossthe United States in 1987 ("Tallying Liquid Assets" 22): Beverage Per Capita Consumption (gallons) Soft Drinks 44.8 Beer 24.1 Fruit Juices/Drinks 11.2 Drink Mixes 4.9 Bottled Water 4.4 Wine 2.4 Spirits 1.7 The beverage industry in the United States is dominated by softdrinks such as Coca-Cola and 7-Up, as illustrated in the following table("Tallying" 23): Beverage Type 1987 Market Share Soft Drinks 47.9% Beer 25.8% Fruit Juices/Drinks 12. % 25.1% Miller Lite 1 .4% 1 .2% Miller High Life 6. "Sports and Suds." Sports Illustrated 69 (8 Aug. With the increased awareness of the link between drinking and autoaccidents, companies such as Anheuser-Busch and Miller are producingresponsible drinking ad campaigns, hoping to stave off increasedregulation. Philip Morris brought a considerable amount ofmarketing savvy to the beer industry--knowledge gained through the highlycompetitive world of cigarettes and tobacco. Miller Lite played directly off thesuccess of Miller High Life. Advertising is expensive,both its production and its placement, and the return would likely be low.However, investment in sports, already established as having a high return,could prove valuable for Natural Light. News & World Report 1 7 (6 Nov. Beermakers discovered early that by linking their product to socialactivities, they were able to generate sales. Beer at sporting events brings in a substantial amount ofrevenue. Inaddition, the ads were humorous and memorable. "How Busch Wins in a Doggy Market." Fortune 115 (22 Jun. Anheuser-Buschhas been the top American brewer each year since 1987, and is ranked amongFortune's top 5 firms (Ries 39). Finally, a promotionalplan is presented for one of Anheuser Busch's products, Natural Light. The Reds received one-third of total sales;ten percent is taken by the city (Johnson 7 ). Louis beer brewer and soap maker. In 1861, Adolphus Busch married the daughter of Eberhard Anheuser, aSt. Michelob Light also picked up anadditional 4 accounts (Sellers 1 2). Alan Easton, vice-president for corporate affairs at Miller BrewingCompany says, Once you're into the demographics of sports, you are also into the total demographics of beer drinking. To accomplish this,Anheuser-Busch will have to continue its current brands and research newentrants carefully. Even at a very high price, it is an extremely cost-efficient buy. Sincebeer consumption is in decline, market share is particularly important. One of the reasons that beer consumption is thought to have droppedis that the baby boomers, who have comprised the bulk of the beer drinkersfor the last decade, are aging and outgrowing their taste for beer .However, it should also be noted that the greatest involvement in sportsalso occurs in Americans, both men and women as spectators andparticipants, between the ages of 18 and 29 (Sellers 1 1). Bothenjoy prominent placement in retail outlets and Bud Light benefittedimmediately from the strong distribution channel that Anheuser-Buschemploys. "Premium Brands Carry the Weight." Beverage World 1 6 (Mar. Until Philip Morris purchased Miller BrewingCompany in 197 , however, sophisticated advertising had not been employedin the beer industry. Miller Brewing Company products (MillerLite and Miller High Life) while Coor's products and Miller High Life)accounted for 16.4 percent of the market while Coor's products (Coors andCoors Light) comprised less than 1 percent. Despite this, Natural Light is able to help AnheuserBusch achieve itsoverall goal of 5 percent market share. Works Cited"Bud Goes Lite on Advertising." Broadcasting (26 Feb. Such promotions provide publicity for the brewers, reinforce thelink between sports and beer, and support a responsible public image. Coors and Stroh's have since merged, although thebrands remain unchanged. The close association with sportsand sporting events such as the St. These factors and the general aging of the beer consumer suggest thatbeer manufacturers will have to be aggressive in their bid to maintainmarket share. Also along as passengerswere two Playboy Playmates who handed out signed photographs to theretailers. There is alsoincreased awareness among stadium workers of how to handle drunk fans,including knowing when a fan should no longer be served beer. When determining what promotional plan is appropriate for NaturalLight, it is important to determine what role the product plays in Anheuser-Busch's strategy. Caught off-guard by the overwhelming success of Miller Lite,Anheuser-Busch introduced Natural Light. Intensive advertising is probably not the best investment Anheuser-Busch can make with regard to Natural Light. Miller Lite beer was introduced in 1974 at a time when light beers heldonly 1. For example, Anheuser-Busch sponsors the Bud Light IronmanTriathlon World Championship in Hawaii, the Michelob Night Riders cyclingcircuit and the Carlsberg single-handed, round-the-world sailing race.Miller provided one million dollars each year from 1981 through 1988 tohelp underwrite the United States Olympic Committee's training facilities.In addition, Miller sponsors at least one team in every major auto racingcircuit. Similar arrangements existat baseball and football stadiums throughout the country. Natural Light became the stepchild of the Anheuser-Busch family.While available in most retail outlets, Natural Light does not enjoy thesame visual prominence of the more popular brands. TV sports and beer commercials are a perfect marriage (Sellers 1 1). Budweiser's closest worldwide competitor,Japan's Kirin, sells less than half the beer (Johnson 76). % Drink Mixes 5.2% Bottled Water 4.7% Wine 2.6% Spirits 1.8% Within the beer market, Anheuser-Busch boasts a commanding 4 percentmarket share, compared to Miller Brewing Company's 2 .7 percent. 199 ): 38.Jabbonsky, Larry. Anheuser-Busch then covers half the cost, and the results generally outperformpromotions of other brands (Sellers 1 2). "Marketing as Warfare." Chief Executive (Mar.-Apr. 1987): 99-1 5"Tallying Liquid Assets." Beverage World 1 6 (May 1987): 22-32.Teinowitz, Ira. Louis Cardinals baseball team, which now plays inBusch Stadium. Focus is directed to the demographics of beer drinkers and themarketing techniques employed by the beer industry. Topexecutives are responsible for the key target states. 8% of the beer market. Distributors should beencouraged and incented to promote the Natural Light brand. Anheuser-Busch learned quickly from Miller's marketing techniques.The label on Budweiser Light read, "Bud Light," a reference to the commonlyused name for Budweiser. There is pressure to establish a national drinking age of 21,a move that would directly cut into the target market of beer producers. Instead of positioningNatural Light as a direct competitor to brands such as Miller Lite and BudLight, Anheuser-Busch can target the smaller light beers. From that standpoint, distancing the brandfrom Anheuser-Busch could prove a wise strategy. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.