Anheuser-Busch Global Marketing Strategy
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Since its foundation in the mid-1800s, Anheuser-Busch Company (AB InBev) established as one of their goals to, “[Created] new ways of connecting beer drinkers with its products” (“Marketing and Advertising”, n.d.). Anheuser-Busch philosophy has been maintained up to this date; by finding the need to implement a wide diversity of marketing strategies with the clear objective to maintain and gain market share worldwide.
According to Forbes in 2012, Anheuser-Busch ranked globally #53 on innovation, #93 Globally, #221 in Sales ($39.05B), #87 in Profit, #220 in Assets, and #42 in Market value (“InBev Forbes List”, n.d.). AB InBev is one of the most important companies in the world to work with and to analyze from a marketing perspective not only because how they rank, also because they have been showing consistency and growth since their foundation.
This paper analyses the three main marketing strategies utilized by AB InBev: integrated marketing communication, price and portfolio analysis. Marketing strategies used by AB InBev had lead the company to be profitable, a strong competitor and to establish control over buyers and suppliers. (Boeing, Casey, & Colson, 2008).
Integrated marketing communication has been used by Anheuser-Busch Company as the main strategy to deliver a message to beer drinkers, by utilizing a group of communication disciplines such as promotion, advertising, direct marketing, sales, sales promotion, public relations, and inter-customer communications.
Price Strategy has been a key factor to obtain high revenues for AB InBev, their high market share has been allowing AB InBev to control and set prices according to their target market. A marketing strategy has been used trying to offer a wide range of prices that not only can be affordable for everybody, but to give Anheuser-Busch customers the perception of the value, quality and benefit that they are acquiring while buying AB InBev products.
Portfolio Analysis it is currently used by AB InBev management, not only to offer a variety of products, but most importantly to define how much time and money they should spend on current products seeking continuous success, how much time and money they should invest on new products and lastly when it is time to remove a product from the shelves. Analysis
Integrated Marketing Communication
According to Moorradian, Matzler and Ring (2011), integrated marketing communication can be define as, “How the firm tells its target customers about its offerings and value propositions and moves customers to purchase” (p. 299). AB InBev is the type of company that pursues good communication with it customers and constantly sends messages to achieve sales.
Anheuser-Busch uses a diverse channel of communication with their customers, such as, promotion and advertising campaigns. Promotion and advertising campaigns are currently applied on commercial TV ads, sponsoring sports events like the Super bowl, NASCAR, NHRA, major league soccer and baseball games (“Marketing and Advertising”, n.d.). According to Anheuser-Busch CEO Carlos Brito mentioned that one of the reasons its brands are really attractive is because they utilized sports as a resource to reach out to customers and that they are willing to keep investing more on marketing sports (ABC News, 2008).
Promotion and advertising campaigns thru sports helps AB InBev to reach out to their primarily target market, which is males around the age of 21-34 years old (News trend, n.d.). AB InBev has not revealed how much revenue they get directly from promotion and advertising but it is speculated that is a high number due to their willingness to invest even more on promotion and advertising.
According to the Chicago Tribune, Anheuser-Busch went back to basics in 1992 by reusing direct marketing trying to target customers at a ground floor level through the product implementation in stores. (“Direct Marketing”, n.d.). Anheuser-Busch started by promoting their products in supermarkets with huge displays at the front of the aisles, offering discounts and pursuing to capture customers and to increase sales thru sales promotion and to have employees promoting their products on the store.
AB InBev has been utilizing public relations (PR) by helping the community and generating free publicity, for example on supporting victims of the hurricane Sandy (“Anheuser-Busch affected by Hurricane Sandy”, n.d.). According to Haute PR, “public relations have the ability to offer the credibility and sense of trust that makes it the most effective means of marketing and branding” (“Why PR”, n.d.). Anheuser-Busch public relations department has been the ability to return to the society by helping them and at the same time increasing customer loyalty and trust.
Taking advantage of the faster communication that is available in the actuality like email, internet and mobile apps, AB InBev had retake “word of mouth” as their primarily electronic inter-customer communications strategy. According to ABC, AB InBev recently announced a strategic alliance with the publicity agency named Ajaz Khowaj Quoram Ahmed (AKQA). By having this alliance, AB InBev seeks the creation of digital extension for each of their brand marketing campaign. (“Anheuser-Busch and AKQA”, n.d.). AB InBev demonstrates that marketing tools used in the past, such as direct marketing and word of mouth, can be used with great results just like a century ago, but taking advantage and utilizing electronic tools available now.
According to an online database, “Seeking Alpha”, Anheuser-Busch currently holds 46.9% of the market share in the United States (“Who Benefits”, n.d.). AB InBev’s position on the market allows the company to utilize price strategy as a competitive advantage. AB InBev has been offering a wide variety of products and prices to their customers depending on the quality of the product and the brand awareness that they had created with their customers.
According to Moorradian, Matzler and Ring (2011), “Pricing strategies are linked to the product life cycle” (p. 50). AB InBev it’s a company that has been assuring to offer products located in different stages of the life cycle. Products on a mature stage and that all ready have brand customer loyalty such as Budweiser and Michelob are offered at a premium price compared to similar beers offered by their competitors. New import products such as Victoria beer has been utilizing a skimming price strategy in order to recover from the initial cost of producing and importing the beer from Mexico (Creuder, 2006). Products on a mature or declining stage, such as Natural is currently offered at a lower price compared to their competitor’s brands.
Anheuser-Busch, with a current existing product list of 200 plus brands and lines, is a company where customers can find Budweiser, Michelob, Busch, energy drinks, non-alcohol beers, malt liquors and imports (“Company Profile”, n.d.). Over the years, Anheuser-Busch has been offering product diversity with a really clear objective of where to invest their money, seeking greater returns. According to Moorradian, Matzler and Ring (2011), they define portfolio analysis as, “The organization of strategic business units (SBU) according to the attractiveness of the market they serve and their strength in that market; the resulting categorization prioritizes the products SBU and direct investments” (p. 101). Breaking down AB InBev into its strategic business units, we can notice how they always target for their star (High grow rate, example is Bud light beer and imports) and cash cow products (High returns-slow growth, example Budweiser beer).
Since in the mid-1800s, Anheuser-Busch founders saw that intercommunication marketing communication was a key factor to established communication with their customers and to gain customer brand loyalty. Giving away inexpensive items, such as, pocket knives or by sponsoring TV shows in the present era had been creating good effects and revenues for the brewing American giant, but they also realized something “that different brands suited different tastes” (“Marketing and Advertising”, n.d.). However, different prices and the need of identify their best brands were necessary; Anheuser-Busch realized that price strategy and portfolio analysis needed to be part of their marketing mix seeking to gain customer loyalty, market share and to become a worldwide leader. Anheuser-Busch it is already preparing themselves for future outcomes trying to stay as the number one beer leader company in the United States (US) and one of the largest worldwide (“Marketing and Advertising”, n.d.).
Effective strategic alliances with the Mexican Brewer Grupo Modelo and Chinese Brewer Company Tsingtao brewery are also indicators on how Anheuser-Busch has been considering new ways of communicating with their customers and increasing their sales worldwide. AB InBev has been making business with innovative corporations such as Pepin Co, beer distributor for Anheuser-Busch that just started to integrate mobile marketing into their marketing mix (“mobile database”, n.d.). Mobile marketing gives the opportunity to deliver marketing messages in real time, increase brand loyalty and increase in sales in a fun manner. Pepin Co. engages customers with promotions via text messages and in exchanges gives gifts such as free beer or sports equipment. According to Michael Becker, member of the mobile marketing association said, “The leading marketers in the country aren’t simply looking at it as an advertising or promotional channel but as a key element of consumer engagement and their overall marketing strategies” (“mobile database”, n.d.). AB InBev marketing department is currently not only are really searching for new ways of marketing strategies either with ideas developed in house or by partnerships with other organizations such as Pepin Co. AB InBev also partner with AKQA seeking increased “word of mouth” as their primarily electronic inter-customer communications strategy. Results
Anheuser-Busch marketing mix has been successful throughout the years for several reasons; been the most significant to become the number one brewing company leader in the United States and one of the most important ones worldwide.
AB InBev marketing strategies had been letting them gain and sustain their US market share on 47.7% in recent years letting them hold a better position compared to their competitors. AB InBev position has also leaded the company to gain power over suppliers and buyers (Boeing, Casey, & Colson, 2008). AB InBev avoids competitors to offer the availability of Substitutes, instead they offer them to the market as well, in recent years they had been acquiring other important brewing companies worldwide not only to bring certain lines of products to the US, but also to penetrate with their original brands thru other countries such as China and Mexico, strategy that took place when they bought Tsingtao brewery and Grupo Modelo respectively. Anheuser-Busch has been investing on research and development of new products alcohol and non-alcoholic beverages not only to provide customers with new products, but also to invest on the products that offered them the highest returns, such as, import beers like Victoria or Stella Artois beer.
Anheuser-Busch makes sure that their Public Relations create a healthy relationship with the society. Scholarships, donations and helping others while in disgrace are just a few examples on how AB InBev helps the community, but also creates brand loyalty and maintains their selves in good stands with their customers. Anheuser-Busch marketing mix has been creating a good financially results. Comparing their 2010 and 2011 year end results we can see how they are increasing the amount of dollars invested in sales and marketing expenses worldwide and in the US by 4.1% and 3.8% respectively (“Financial Report InBev”, n.d.). AB InBEV is increasing the amount of dollars invested on maintaining their actual market share, but also thinking further and with the clear objective of increase their gross profits; AB InBEV shows a slightly increase on their gross profits of 7% worldwide and 1.8% in the local US market (“Financial Report InBev”, n.d.) which it confirms that growth its slow, but AB InBev is moving in the right direction with a clear and successful marketing strategy.
ABC News (2008, July). Bud to keep sports marketing strong – Business – Sports Biz | NBC News. Breaking News & Top Stories – World News, US & Local | NBC News. Retrieved from http://www.msnbc.msn.com/id/25726601/ns/business-sports_biz/t/bud-keep-sports-marketing-strong/ Anheuser-Busch InBev SA/NV Company Profile. (n.d.). Hoovers Company Information. Retrieved from http://www.hoovers.com/company-information/cs/company-profile.Anheuser-Busch_InBev_SA-NV.71b44227aac9f85d.html Anheuser-Busch Producing More Than One Million Cans of Emergency Drinking Water for Areas Affected by Hurricane