With
regard to beer segments, the light category continues to
experience the most growth for domestic beer, while microbrews
and craft beers stabilize, and imports gain ground. Data
from Information Resources Inc. show that in 2001 four of
the top five brands of beer in supermarkets are light. Budweiser
was the number one brand, with$762.2 million in sales, up
1.2 percent, for a 13.6 percent share of the market. Bud
Light was number two, with $621.4 million in sales, up 15.2
percent, for an 11 percent share. Miller Lite was number
three, with $419 million in sales, up 4.9 percent, for a
7.4 percent share.
Market
Segments Served
The segment analysis focuses on the premium and light
categories.
It
is well known that the strongest demographic for beer
is males, aged 21 to 24. In fact, in 2001 48 percent of
supermarket beer shoppers were between the ages of 21
and 34. This was an increase of 15 percent over 2000.
Customers purchase microbrew and craft beers because they
are looking for good quality. If they sample a few different
brands and don't feel as through they are getting their
money's worth, they are going to turn to another brand
that they know will provide them with the quality they
are seeking. It would appear the import category provides
that comfort for them.
Strengths
and Weaknesses of Anheuser-Busch
Strengths
1. Brand-name recognition. A strong brand is the key
to staking a competitive advantage. Strong brand fosters
consumer loyalty. Loyalty creates the opportunity for
market share growth and above-average pricing flexibility
and profitability. A strong brand also opens the possibility
of extending product lines.
2. Market leader. Anheuser-Busch has the number
one position by a wide margin, selling 70 percent more
beer than its nearest rival in 2000. Their success is
due to their raw materials procurement, manufacturing
efficiency, and marketing.
3. Solid management team. They were slow to react
(to the Miller price initiatives), but they certainly
know the business. A noteworthy factor contributing to
the success of Anheuser-Busch has been competent management.
Since the time of Adolphus Busch the company has had good
fortune to retain capable men of enterprise.
4. The industry's strongest wholesaler system.
Approximately 900 independently owned beer wholesalers
and 13 company-owned wholesale operations provide Anheuser-Busch
with the most extensive beer distribution system in the
brewing industry.
5. Effective marketing campaigns. Anheuser-Busch
has the most effective marketing programs in the industry.
In 2001, the company will increase its marketing spending,
especially for the media. Its intent is to continue to
build brand equity and generate renewed market share gains.
Weaknesses
1. Market share was down. The Miller-created discount
environment forced Anheuser-Busch to respond. Anheuser-Busch
volumes were affected and, most significantly, in the
third quarter of 2001 its market share was down.
2. Net revenue per barrel in negative. Beer industry
analysts predict that the year 1998 would be a very complicated
year, and that major brewer Anheuser-Busch would start
off with net revenue per barrel in the negative.
3. Losing volume. Budweiser has spent the past
decade losing about a quarter of its volume. More alarming
for Anheuer-Busch is that the combination of Bud and Bud
Light barrelage was less in 2001 than it was in 2000.
Most demographic growth in the beer industry in the next
few years will come from brands stealing share from brands.
Given
the data provided, address the following issues:
1.
Design a questionnaire that would assess the current level
of beer consumption in the United States, Construct this
questionnaire as if you were preparing it for Anheuser-Busch.
2. In your questionnaire, be sure to provide questions
about the level of competition that may exist for beer
products, as well as questions that could assess the true
state of strengths and weaknesses facing Anheuser-Busch.
