Budweiser: The Great American Lager
Budweiser is a globally brewed beer that is owned by the Anheuser-Busch Company. In this analysis I will analyze the marketing mix, pricing strategies, and brand positioning for Budweiser. Both Anheuser-Busch and Budweiser have a storied past. In 1859, Adolphus Busch opened a wholesale commission house in St. LouisMissouri selling brewing supplies. The next year, Eberhard Anheuser acquired the Bavarian Brewery, established in 1852 by George Schneider. E. Anheuser & Co. becomes one of Adolphus Busch’s best customers, and he begins working at E. Anheuser & Co. in 1864 as a salesman. The historic A & Eagle trademark is used for the first time in 1872, and in 1876, E. Anheuser & Co. Brewery Association introduces a now classic name, Budweiser Lager Beer). To recognize Adolphus Busch’s contributions to the company, the company is renamed the Anheuser-Busch Brewing Association in 1879- Just one year before Eberhard Anheuser dies.Adolphus Busch is named president and Anheuser-Busch acquires the right to sell Budweiser in 1883.
Since Budweiser’s inception it has become the leading brand for Anheuser-Busch, becoming of the top three selling beer brands in the world. Budweiser in this time has developed a deep and wide product mix. Budweiser now has eight different beers within the Budweiser family name, as well as, hats, shirts, jackets and many other products with the Budweiser name. Budweiser has two major competitors in the beer market. These consist of Coors Brewing Company ad the Miller Brewing Company. Coors and Miller offer four different types of beer brands that are major competition to Budweiser. Budweiser has a wide target market. Budweiser’s target market is adults 21 years old and older that are fun loving, care-free people that drink beer on occasion or on a daily basis. This is evident on Budweiser’s web page, with promotion ads and columns geared towards this market.
Budweiser has a vast amount of the market share because of their marketing. Anheuser-Busch’s main product is their American style Budweiser Lager Beer. Budweiser is the second best selling beer in the world behind only Bud Light, and holds 48 percent of the market share of beer sold in the United States.
Anheuser-Busch has positioned Budweiser at the top of the market with the slogan “King of Beers”. Anheuser-Busch markets Budweiser as the best tasting and most satisfying beer on the market. Anheuser-Busch also makes it well known that Budweiser is beech wood aged, a process that sets Budweiser apart from the competition.
Budweiser is well known for humorous advertising campaigns. This advertising is a form of integrated marketing communications because it allows Budweiser to have maximum informational and persuasive impacts on consumers.
Budweiser’s marketing group has done an outstanding job of getting their point across. Budweiser advertisements do not just make noise, but are put through the coding process to rise above the noise of their competition. Budweiser uses the right medium of transmission, or means by which consumers receive Budweiser’s promotional message. Budweiser is distributed and so is their promotional effort. Through television commercials (remember the Budweiser frogs), radio broadcasts (Real Men of Genius), web site promotions, and sporting events around the world. Anheuser-Busch has an adequate performance with consumer feedback as well. Budweiser has a link on their web sites home page were consumers can ultimately contact Anheuser-Busch about their products. This in turn keeps communication from consumers to producer open, which builds consumer loyalty by building relationships. Budweiser is the industry leader in stimulating selective demand. As a result of efforts already underway, Budweiser experienced positive or improving trends in 2006 and 2007. Budweiser had a very strong year with volume gains of 4.2 percent due to innovative marketing and the brands strong appeal with a wide range of consumers. Anheuser-Busch has an advantage in the area of place or distribution. Budweiser has 14 breweries in the United States, 14 more in China (soon to be 15), and one in the United Kingdom that are owned by Anheuser-Busch. Budweiser is also brewed through partnerships with Grupo Modelo in Mexico and Labatt Brewing Company in Canada.
Budweiser is sold from producer to wholesaler, then to retailers, and finally consumers. This is the most practical option for Budweiser, because of their mass consumer base. There are literally thousands of retailers marketing Budweiser, which makes dealing with each retailer directly impossible. Anheuser-Busch has a distinct distribution channel for Budweiser. Anheuser-Busch has used a vertical marketing system by combining all of their distribution in the United States, China, and United Kingdom under their own management. Anheuser-Busch has numerous subsidiaries, which they own themselves. These subsidiaries produce bottles, cans, can liners, can lids, they move product by train, and even deliver to wholesalers and retailers in which Budweiser is sold. Anheuser-Busch has taken a non-price marketing competition approach with Budweiser. The major advantage of non-price competition is that Budweiser can build customer loyalty. Consumers that prefer Budweiser even with non-price factors, may not be easily lured away by Budweiser’s competition. This works because Budweiser has promoted and distinguished their brand of beer apart from thither brands in the marketplace.
Just because Budweiser is marketed in an environment that calls for non-price, competition does not mean Anheuser-Busch does not have to look at competitions prices. Price remains a crucial marketing mix component even in this environment. Budweiser uses the value, or price, of their product to differentiate themselves from competing brands. Being priced just above the competition gives the consumer a perception of higher quality in the brand. Budweiser’s family brands use a cost-based pricing strategy, this is evident in their Letter to Shareholders given out by Anheuser-Busch in 2006. Anheuser-Busch has taken an approach that takes into account calculations of desired profit margins. Budweiser does not take into account aspects of supply and demand, as stated before promotion stimulates demand. Anheuser-Busch also uses cost plus pricing because it is difficult for a company of this size to predict production costs. Anheuser-Busch also uses product line pricing for the many different products that are produced under the Budweiser name.Anheuser-Busch uses multiple-unit pricing for Budweiser products. This results in lower per-unit price than the one regularly charged, and is commonly used for six- and twelve-packs of soft drinks and beers. Budweiser, like most companies today use odd-even pricing strategies for their products. Budweiser sells a six-pack of their product for $5.95 instead of $6.00 because it assumes that more of the product will be sold at this price.This gives the consumer a perception of value, and that the product is a bargain.
After reviewing the marketing mix of Budweiser, it is evident that each section of the marketing mix works together to support the brands positioning. The product, place, promotion, and price all set Budweiser apart from the competition. In turn, setting perception of quality to the consumer, keeping interest of potential consumers, and reaching the target market with increased accuracy makes Budweiser truly the “King of Beers”. My recommendations for Budweiser would have to start with promotion. Keep promotions humorous, and witty. Do not pull money from the advertising accounts. This would be a huge oversight for Anheuser-Busch, and would let the competition in this market become equal in sales. Keep distribution avenues the same. The product is on time, and delivered at the best quality available. This will continue as long as Anheuser-Busch puts emphasis on quality at the brewing level, as well as throughout the process.
The price of the product is perfect. The Budweiser name is known all around the world for quality. Therefore, the price of the product needs to reflect that perception by the consumer. Anheuser-Busch has done this using all four parts of the marketing mix.
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