Budweiser Marketing Plan

Skylar Reid, Nicola Battaglia, Kevin Brosso

MARK101 - 102Laura Kittner

November 28th, 2015

The King Of Beers Budweiser, also known as “The Great American Lager”, was founded in 1876 by Adolphus Busch and was deemed America’s first national beer brand. It is slowly on its way to becoming the first beer enjoyed worldwide, with distribution in 80 countries. Forbes has placed it at number 25 on The World’s Most Valuable Brands list, above every other beverage brand on the planet. Their vision is to be the best beer company bringing people together for a better world, which they strive to achieve through promoting responsible driving, environmental stewardship, and community involvement.

The Budweiser brand has been a leader in the beer market for decades, but recently sales have begun to decline along with a decrease in market share. The purpose for this analysis is to determine what factors are leading to a sales decline for the brand and to propose new marketing strategies in order to improve sales performance and to revitalize the brand's overall image.

Market Share AnalysisProductBudweiser is a full-calorie, premium lager that contains 5.0% alcohol. It is brewed from Canadian and American barley malt, filtered water, and aromatic hops that are aged over Beechwood chips to create a smooth and crisp taste. It is available in cans, bottles, and aluminum bottles.

Budweiser has many sister brands including: Bud Light Bud Light Lime Budweiser Select Black Crown Chelada

This keeps diversity in place within their product line that attracts many different consumers who prefer different flavours of beer. PriceThe price of beer varies all over the world, but at The Beer Store, an Ontario retailer, prices of Budweiser range from $2.45 to about $60.00.

1 x Can(473 ml) = $2.45, 6 x Can = $13.75, 12 x Can = $37.95, 24 x Can = $50.95

4 x Aluminum Bottle(473 ml) = $10.25 6 x Bottle(341 ml) = $11.95 1 x Keg(58,600 ml) = $315.95

DistributionBudweiser is owned and operated under Anheuser-Busch Companies Incorporated. It was originally manufactured in St. Louis, Missouri, but since then has expanded its distribution channel and currently has 12 breweries across the United States. The beer is a global brand and is available in 80 countries in North America, Mexico, Latin North America, Latin South America, parts of Europe, and China. Budweiser is sold at any beer or liquor store as well as in restaurants, bars, and clubs.

Market Share

While expanding globally, Budweiser is still losing market share to other light beers and flavoured beers within Anheuser-Busch InBev, as well as other manufacturers, in North America.

In Canada, Budweiser is the most popular brand by sales volume. In 2011, the beer held the highest percentage of market share at 12.6%, 1.2% ahead of Coors Light and 5.8% ahead of Molson Canadian.

In the United States Budweiser stands at the number three spot behind Bud Light and Coors Light, respectively, when looking at sales volume. Sales have been declining over the past 25 years and Budweiser now holds a 7.6% share of the U.S beer market, dropping from 14.4% just a decade ago.

Seasonal AnalysisBudweiser is known for is aggressive marketing communication strategies during various sporting seasons. The brand has a strong connections with the NHL, NBA, NFL and is the official sponsor of the MLB. During these seasons, an opportunity to increase sales arises as fans are intrigued to buy Budweiser over other beers due their large involvement.

Current and Potential Problems

Budweiser has many external forces that affect sales performance; both social and environmental. First of all, Budweiser depends on the price of wheat, which is the primary ingredient to brew beer.  Depending on weather and growing season conditions, wheat prices can fluctuate significantly, severely impacting manufacturing costs and profit made by the company. Secondly, consumers have “shifted away from traditional light and premium brands” due to taste preferences and concerns for health. Overall alcohol consumption has been declining and is impacting total sales volume for Budweiser. Lastly, the world price of aluminum is an external driver that poses a threat to the brand. Profitability is affected when manufacturing and shipping costs rise due to aluminum becoming more expensive.

In relation to reaching beer consumers, Budweiser’s marketing communications are mostly directed at older males. This create a large problem as the brand is not reaching other parts of the consumer market, like young adults and women.  

Budweiser is dominant in North America and most marketing efforts are being taken place in Canada and the United States. While the product is available globally, possible revenue is limited due to less marketing focus in other sectors of the globe.

Current and Potential Opportunities Budweiser has many current and potential opportunities for growth. Being the most valued beverage brand on the planet, it has great credibility and that should be reflected to all consumers.

Currently, Budweiser has begun to move away from their traditional techniques that only appeal to an older demographic. By sponsoring music festivals and interacting with consumers online, the brand is beginning to reach young adults who drink beer. As craft beers are becoming a growing fad among this demographic, Budweiser might also consider acquiring a small craft brewery to boost sales.

Budweiser also has the opportunity to focus more of their advertisements towards the female demographic. Although men drink more on average than women, there is still a large amount of female beer drinkers that are being overlooked.

If Budweiser increased their campaigns on an international scope profit would most likely grow. This is because market share would increase and there would be a possibility for reaching a greater range of demographics, geographics and psychographics.

Super Bowl commercials are a large factor when it comes to brand awareness for Budweiser. Budweiser generates a lot of revenue from male sports fans during this time of year. The company could reach out and interact with consumers during the Super Bowl, like Doritos does, and reproduce a similar campaign by hosting a user generated content contest.

Competitive Analysis There is a multitude of beer companies across the world; each offering their own unique taste and value. Budweiser is forced to make their brand unique from all other brands and stands out from their competition.Budweiser faces aggressive indirect competition from other lagers as well as direct competition from alternatives; like wine, spirits, and hard liquor. Within North America, other mature beer brands, both domestic and imported, are seen as the main competition to Budweiser. Monopolistic competition from both niche and challenger brands pose a threat and serve as different options within a consumer's radar.

Budweiser’s three main competitors are:

Product Coors Light, also known as “The Silver Bullet”, is an American light beer that provides a beer drinker with a “clean, crisp taste and ice-cold finish”. It is lagered, packaged, and stored at close to freezing temperatures to turn the Cold Activated Labels an ice blue, indicating a ready beer. The company was founded in The Rockies of Colorado in 1978 and since then the brand has climbed to the number one spot in Canada and the number 2 spot in the U.S, when looking at sales volume. Coors Light has 4.0% alcohol content and is slightly weaker than Budweiser.PriceCoors Light is a mid-priced product and is available in four different forms: can, bottle, aluminum bottle, and keg. Prices vary at The Beer Store, an Ontario retailer.

1 x Can(473 ml) = $2.45 6 x Bottle(341 ml) = $11.95 1 x Keg(58, 600 ml) = $315.95

Distribution Coors Light is owned and distributed by the Molson Coors Brewing company. It is available everywhere in North America, plus parts of Europe, Asia, South America, and the Caribbean. The beer can be purchased at beer and liquor retailers as well as at liquor licensed establishments. Marketing Communications The brand is known worldwide and is a challenger to Budweiser. Promotion of the brand is done via traditional and new media outlets including: TV commercials, radio ads, and print ads. Coors Light targets young adults, mainly male sports fans, and reaches them through several different social media platforms (Twitter,Youtube, Facebook and Instagram) and by sponsoring events like “The Coors Light Games”.

ProductMolson Canadian is a pale lager brewed from Canadian water, prairie barley, and no preservatives. It was first introduced in 1954 and since then has become one of North America’s most impactful and best-selling brands. PricePriced in mid range, the beer is packaged in a can, bottle, wide mouth bottle, or keg and is sold at the following prices in Ontario:

1 x Can(473 ml) = $2.45 6 x Bottle(341 ml) = $11.95 1 x Keg(58,600 ml) = $315.95

Distribution

Molson Canadian is also a brand manufactured by the Molson Coors Brewing company. It is available in Canada, the United States, and Europe  through licensed retailers. Marketing CommunicationsMolson Canadian focuses their marketing efforts towards young adults who are hockey fans. The brand has a partnership with the NHL and sponsors the league in return for advertising rights. To target the younger demographic, Molson Canadian is currently running a social media contest for a chance to win skate time on their rooftop rink, which asks consumers to post a photo including the hashtag #AnythingForHockey. The brand is also the official sponsor of many music festivals in Canada such as Osheaga and RBC Bluesfest.

ProductLabatt Blue is a pilsner-style lager with deep Canadian roots and 5.0% ABV. The beer is a  “well-balanced, fully matured, full-flavoured beer with a fruity character and a slightly sweet aftertaste”. The best-selling Canadian brand was founded in 1847 by John Kinder, of London,ON. Recently, PriceThe price of Labatt Blue is slightly cheaper than that of its competitors. At The Beer Store in Ontario, prices are as follows:

1 x Can(473 ml) = $2.05 6 x Bottle(341 ml) = $9.95 1 x Keg(58,600 ml) = $315.95

DistributionLabatt Blue is manufactured by the Labatt Brewing Company and is distributed from several factories in Canada and the United States throughout North America. Marketing Communications “The Blue”, as named by its loyal consumers, uses heritage focused marketing techniques to drive sales and is known for its strong connection to Canadian sports teams, like the Winnipeg Blue Bombers of the CFL. The brand sponsors the World Hockey Pond Championships and has hosted free ticket contests to NHL playoff games. Labatt Blue also owns an 18-wheel trailer that parks at events around the country and turns into an instant club; a perfect example of experiential marketing.

Target Market AnalysisDemographicsThe Budweiser brands target market is beer consumers aged 30-70, with a large portion being male. They typically have working to middle class careers such as manual labour jobs, managerial or supervisorial positions, or are farmers. Their education levels range from a high school or college diploma to an undergraduate degree and they can make

anywhere from $32,500 to $60,000 a year. Generally these consumers are married, empty nesters with a great deal of  disposable income.

PsychographicsConsumers of the brand are rugged, tough, and hard working. Typically, they are sports fans who watch and play hockey, football, and baseball. They treasure their family and see their friends as brothers and sisters. Proudly American, these traditionalists value patriotism and history and like their beer “brewed the hard way”.  They do not mind paying for a mid range priced beer, as opposed to cheap brands, because they do not want to compromise the quality taste that Budweiser provides.

GeographicsWhile available all over the world, Budweiser is heavily dominant in the United States and Canada. Many consumers of the beer are from rural and suburban areas, coast to coast.

Behaviour Response Occasion For Use - Budweiser would be the consumers beer of choice at social

gatherings, especially while watching sports events. Pairing the brand with food items such as burgers and wings at restaurants is also common for these customers.

Benefits Sought - They turn to Budweiser for a way to relax and to forget about responsibilities and reality for a while. Alcohol helps them be more social, relieve stress, and unwind after a long week.  

Usage Rate - Most drinkers are moderate to heavy users, having multiple beers per week or even daily.

Loyalty Response - With heavy usage of alcohol comes  dependant, loyal consumers who tend to pick a favourite beer brand that they always purchase.

There is a high degree of brand insistence and little compromise is made.

Meet TomAge: 40Gender: MaleIncome: Working Class, $47,000 per year Occupation: ConstructionEducation: Trade School Location: Peterborough, ONLifestyle: Tom is a hard worker, spending 50 hours a week on the job site. His favourite activities are spending time with his wife and two daughters and watching the Jays game with his friends. He likes to unwind with a cold Budweiser on a Friday afternoon after a long hard week. In his spare time, Tom watches documentaries on American history, reads the politics section in the daily newspaper, or caters to his vegetable garden.

SWOT Analysis

Strengths Classic Lager taste Culturally linked to sports

Weaknesses Considered high in calories Marketing efforts overlooking

Global distribution network Events and experiential marketing Emotional and lifestyle advertisements Top of the line manufacturing plants Been in existence since 1876, strong heritage

and many traditions Involved in sponsorships Branded merchandise

women Brand not relevant to young

adults

Opportunities Food pairing Packaging modifications Loyalty programs Responsible Drinking Campaigns Targeting women Expanding international availability Acquisitions and partnerships

Threats Cheaper brands Flavoured beers Craft breweries Too reliant on heritage, no

innovation Rising prices of wheat and

aluminum Anti-alcohol campaigns AB inBev product line

cannibalization

StrengthsBudweiser prides itself on its Classic taste, created by Anheuser-Busch, who introduced this lager in 1876. This distinct taste is very recognizable with consumers and helps create the idea of brand loyalty to the taste. Budweiser is a Canadian and American beer brand, their main focus on these two countries helps the way they market themselves. It helps target their consumers in a more niche way, it helps brand the company as if it was specially targeted to those countries making their consumer have a personal connection. Budweiser prides itself with its connection to sports and entertainment. Their main connection is Bud Light and baseball, Budweiser also offers a multitude of merchandise like the Bud-E Fridge and the hockey light to connect with hockey and football fans. Budweiser hosts many beer events including Bud Light Sensation, this brings in younger consumers to these events and create an emotional connection with the brand. Many of the commercials that Budweiser offers include an feelings that pull at many heart strings, they usually incorporate the small dog and the brewer/farmer and their main mascot “the Clydesdale.” Using these commercials represents what the company stands for and allows the viewer to remember the advertisements due to the connection they have with them.

WeaknessesAside from multiple strengths Budweiser has limitations. The high calorie intake can push consumers away from the brand if health conscious or prefer a light beer, many women look for flavoured and low calorie drinks which Budweiser does not offer. Budweiser has created a male dominated target audience, this is a weakness due to the amount of people advertised to. Without the intent of advertising to women or making any women based products it lowers the opportunity for increased sales and reach exposure.

OpportunitiesBudweiser as many opportunities to increase brand awareness and profit; like Pepsi who has paired up with lays, Budweiser could pair up with various food companies. Along with most beer companies, Budweiser consumers are loyal to drinking their brand. If Budweiser created a points program or any other loyalty program this would increase brand loyalty. Having multiple Bud Light events, Budweiser has a great opportunity to host events and parties similar to Bud Light. This will intrigue consumers to get more involved with the brand. Budweiser's main target audience is males. This is a limiting target audience when attempting to gain profit. With the addition of females to Budweiser's target audience this will allow the company to expand who their buyers are. This will increase profit and sales margins. With Budweiser known as the “King of beers” this suggests that they are the top of beers. This could be useful in the sense of making their company world renowned. The king is dominant of many countries just like Budweiser could be.  

Threats Along with opportunities comes threats, Budweiser's biggest threat is the cost of beer to be manufactured. With the possibility of rising prices of barley and wheat, Budweiser’s profits will go down. This may result in fluctuation of the selling price and also the loss of customers. Another threat may be the reliance on their heritage. Budweiser is known mainly as an American and Canadian beer this limits the expansion process because they are too reliant on their heritage in promotions and advertisements. Anti alcohol campaigns are posed as a threat to Budweiser because it shows the negative sides of alcohol. This can cause limitations when it comes to purchasing beer because of the negative aspect it holds.

Marketing Communications AnalysisBudweiser uses many different strategies to communicate their message to their consumers. The brand attempts to represent the American Dream and focuses heavily on enthusiasm, togetherness, and heritage. Many of their advertisements are emotionally based and use lifestyle techniques to stimulate desire.

Advertising Budweiser spends a significant amount on paid messages in media outlets. Print, out-of-home, and commercial advertisements are all used to maximize impact on consumers of the brand. One of Budweiser’s most successful campaigns is their annual Super Bowl commercial.  These ads use an emotional appeal and showcase a loving bond between man, dog, and horse that pulls at the heartstrings of viewers. The 2014 Super Bowl commercial, called puppy love, is the most shared ad of all time on Facebook. The brand’s mascot, the clydesdale, is featured in many of their advertisements and is a symbol of dominance and power, similar to that of the target market that Budweiser attempts to reach. Lifestyle appeal commercials that mock craft beer and stimulate a desired way of life, spread the message to consumers that Budweiser is the best and only choice.

Direct Marketing Budweiser’s online website allows fans of the brand to receive the latest news and event information by signing up for King Club. King Club is a subscription that will send emails and text messages to consumers in exchange for some personal information, such as their name and address. Members of the club will score points towards earning special rewards in return for their loyalty.

Interactive/OnlineBudweiser has a massive presence online that allows them to connect and interact with their fans.  Along with running multiple websites for different countries, the brand is active on many social media platforms including Facebook, Twitter, Youtube, Instagram, and Pinterest. The brand showcases pictures and videos of the product on these sites and includes captions that include hashtags, like #ThisBudsForYou, so that consumers can engage with the company.

Sales PromotionThe brand offers many special promotions to stimulate immediate reactions from customers. Budweiser often will place free merchandise within specially marked cases of beer, such as Bluetooth speakers and branded apparel. Budweiser currently runs a promotion called the Goal Lab, that offers products focused entirely on sports. Consumers can purchase the goal-synced Red Lights and Christmas lights that sound every time a prefered team scores, as long as there is a wireless internet connection. Also available to customers are BUD-e fridges that connect to a mobile phone, through voice compatibility software, and keep track of how many beers are put in and taken out.

Public Relations In order to gain widespread acceptance, Budweiser relies on positive publicity. The brand runs the sports world’s most successful designated driver program that encourages fans to serve as designated drivers from major league stadiums in the United States. Budweiser also is partnered with the Folds of Honor fund that supports those families of soldiers who have fallen. The company also released several commercials that have only aired once, in tribute to those who have lost their lives serving their country.

Events and Sponsorships The Budweiser brand hosts many events that create a rich experience for the customer. Events such as sampling parties, watch parties, and band parties let customers celebrate the beer and enjoy the company of others in a branded environment. Budweiser does an exceptional job at creating an entertaining experience by sponsoring the New Music Fest, held in locations in Canada, as well as the Made in America festival,  that has big headliners like Beyonce and The Weeknd. During the holiday season, Budweiser hosts Clydesdale parades in several cities across the United States, which has been a tradition for decades. Budweiser is the official sponsor of the MLB and also sponsors the FIFA World Cup, ultimately attracting a specific market that is composed of sports fans.

Personal Selling Budweiser promotion girls, also known as “Bud Girls”, serve as brand evangelists who market the beer through word-of-mouth and experiential marketing. The girls personally

sell and interact one-on-one with consumers at sampling parties, sporting and charity events, and concerts and increase brand awareness and loyalty.

The Plan In order to increase sales for the Budweiser brand and to appeal to a female demographic we propose a new product strategy which will be followed by a marketing penetration strategy to increase awareness. We plan to launch a new beer targeted at women, with fewer calories and a citrus, limeade flavour.Product - Budweiser Limeade will be an alternative to traditional Budweiser and will provide the drinker with a fruity, citrus aftertaste. The beer will be less calories(100 compared to 145) in order to cater to health conscious consumers. A green label will represent the new flavour and the beer will be available in can and bottle form. To follow tradition, it will be aged over Beechwood chips

Price - Budweiser Limeade will be the same price as traditional Budweiser. Although, during the

1 x Can(473 ml) = $2.45 6 x Bottle(341 ml) = $11.95

Distribution - The product will be available alongside Budweiser in North America and will be manufactured by Anheuser Busch. Retailers and licensed establishments will carry the new flavour.

Marketing Communications- Budweiser Limeade will be an attempt at re-creating the brand image to appeal more to women. First off, a slogan contest is going to be held through online platforms. The incentive for participating is that the best submission will be displayed on the packaging and 1% of all final sales will be awarded to the individual. Just before the product becomes available on the market, a launch party will be thrown to target young adults, especially women. The party will be advertised online through social media websites as well as on radio stations in chosen cities. A print advertisement for the finished brand, with the new slogan, will be featured in women’s magazines and food and drink magazines such as: Cosmopolitan, Glamour, and Food & Drink, a short while after the launch of the product.

Six Month Launch Plan:

June 1 2016- create proposal for new product July 1 2016 - get approved LCBO & Beer Store AGCOAugust 1 2016- distribution and slogan contestSeptember 1 2016-  approved by CEO of budweiserOctober 15 2016 - launch product advertisementsNovember 1 2016- launch productDecember 1 2016 - follow up strategies, and plan to increase brand loyalty, VIP Launch Party

Creative Samples

The first creative sample is a social media contest. Budweiser needs to create a new flavour that will create a larger reach audience and involve more than just a male target audience. Our social media contest will be making a Facebook page for our new creative flavour “Limeade.” Users will be able to post their own creative slogan that represents our new flavour. The winner of our contest will win their slogan on new advertisements,

1% of all final sales and VIP tickets to our launch party for Budweiser Limeade.

Our second creative sample is an advertisement for our slogan contest that will be featured online through social media platforms