bp_kotler_mm_11|Setting the Product and Branding Strateg|Marketing Spotlight-Anheuser-Busch

Setting the Product and Branding...
Marketing Spotlight-Anheuser-Busch

Budweiser Lager was first brewed in 1876 by E. Anheuser & Co., St. Louis. Today, Anheuser-Busch is the largest brewer in the world in terms of volume, and it competes across a diverse range of markets. The company oversees more than 30 different beer brands, including the domestic market leader Budweiser, a number of other beverages, a group of theme parks, and a real estate enterprise. A broad brand portfolio has been a boon to Anheuser-Busch in the past. During the Prohibition era (1920-1933), the company maintained revenue flow by selling products as diverse as yeast, refrigeration units, truck bodies, soft drinks, and chocolate syrup. After Prohibition, Anheuser-Busch continued to grow with its core malt beverages. In 1957, Budweiser surpassed Schlitz to become the leading beer in the U.S. In 1980, the company had a 28 percent share of the domestic beer market, a figure that would rise steadily over the next two decades to 47 percent in 1995. Anheuser’s market share climbed to 50 percent by 2000, leaving competitors Coors and Miller far behind with 21 percent and 12 percent, respectively.

The table displays Anheuser-Busch’s brand portfolio:

Beers

Budweiser – the company’s original beer

Bud – Dry, Ice, Ice Light, Light

Busch – introduced 1955: Ice, Light, and regular

Michelob – first introduced in 1896: Light, Amber Bock, Honey Lager, Black & Tan, Hefe-Weizen

Natural – a discount beer, available in Ice and Light
The company also brews several specialty and microbrews, including Pacific Ridge Ale, Red Wolf Lager, and Safari Amber Lager. Anheuser-Busch also brews two non-alcoholic beers, Busch NA and O’Doul’s.

Other Alcoholic Beverages:

Doc Otis Hard Lemon – a lemon-flavored malt beverage

Devon’s Shandy – a beer-lemonade mix

King Cobra – malt liquor

Hurricane – malt liquor

Tequiza – beer with the flavor of tequila

Non-Alcoholic Non-Beer Drinks

180 – a caffeinated, carbonated energy drink

Theme Parks

Busch Gardens –amusement park opened in Tampa, Florida, in 1959.

Adventure Island – a water park in Tampa

Discovery Cove – animal park in Orlando

Sea World – "marine adventure parks"
located in Orlando, San Antonio and San Diego
Sesame Place – a Sesame Street theme park in Langhorne, Pennsylvania

Marketing the Flagship Beer

Anheuser-Busch has earned a reputation as an expert marketer, due in large part to its success with the flagship Budweiser brand. Budweiser receives much of the marketing support and attention of the company. Of the $396 million Anheuser-Busch spent on measured media in 2000, $146 million was spent on Budweiser, compared with $107 million for Bud Light. Advertising for Budweiser takes a three-pronged approach: ads emphasizing product quality, ads focusing on values and social responsibility, and ads with contemporary appeal designed to humor and entertain the audience. With this multi-pronged approach, Budweiser is able to create a rich brand image that resonates with a broad audience base. One marketing analyst recently proclaimed Budweiser, originally the beer of choice for blue-collar workers, is now beer for all demographics."

Anheuser-Busch conducts extensive and sophisticated market research in order to develop engaging ad campaigns. It is no surprise, then, that advertising for Budweiser routinely garners both critical and audience acclaim, and is credited for much of the brand’s success. One of Budweiser’s most popular campaigns in recent years – the "Whassup?!" series – earned the company top honors during the Super Bowl ad frenzy, and spawned a host of Internet parodies and television spoofs.

Anheuser-Busch moved to the Internet and launched Budweiser.com in 1996. The site offers information about the brand, company history, information about sporting events sponsored by Budweiser, downloads such as screensavers and television ads, and free e-mail addresses ending in Budweiser.com. During the first two months of 2001, Budweiser.com received almost 2 million more average monthly page visits than similar sites from Miller, Heineken, and Coors. In addition to these effective pull strategies, Anheuser-Busch uses various push strategies in retail outlets to help sell beer, from price cuts to instant-win packaging to in-store promotions. Since summer is the peak season for Budweiser, Anheuser Busch steps up its in store push strategies with its annual Bud Summer promotions.

Anheuser-Busch Looks Ahead

As Anheuser-Busch continues to expand, it will need new products to attract new drinkers. The company is planning to introduce a new super-premium beer using its flagship Budweiser brand as a launch pad. The company will test the new product, called Budweiser Red Label, in certain markets before launching it nationally. The company hopes the extension will attract import drinkers without alienating Budweiser purists. Other recent new products, including 180 energy drink and Tequiza beer, have not been successful. Still, Anheuser-Busch continued to set earnings records in fiscal 2001, and the strength of its brand portfolio continued to prove itself as the company gained market share at the expense of its competitors.

(Sources: Al Stamborski. "A-B Looks to Expand Its Horizons." St. Louis Post-Dispatch, February 19, 2001; David A. Aaker. Managing Brand Equity. The Free Press. New York: 1991, pp. 78-84; Hillary Chura. "Bud Set to Test Upscale Brew." Advertising Age, May 7, 2001; www.budweiser.com; Gerry Khermouch and Theresa Howard. "Core Brands Receive Primary Marketing Focus." Brandweek, June 21, 1999; Thomas Lee. "A-B Tries New Ad Approach on Internet." St. Louis Post-Dispatch, March 20, 2001; David Armstrong. "E-Commerce (A Special Report): Here’s to the Net." Wall Street Journal, April 23, 2001.

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