This essay has a total of 1900 words and 9 pages.
Anheuser-Busch Companies, Inc. continually seeks opportunities to maximize shareholder value and increase efficiency. Through their extremely effective marketing strategies Anheuser-Busch has gained control of over 47% of the global market share. In the process of doing this, Anheuser-Busch has become one of the most recognizable trademarks. This is not without faults though. Anheuser-Busch’s aggressive advertising campaign has targeted more than who they bargained for. Through Anheuser-Busch’s catchy advertisements, they have attracted customers other than the 21 age group, and recreational drinkers.
The company has made significant marketing investments to build Budweiser brand recognition outside the United States and operates overseas breweries in China and the United Kingdom. The company also has a significant influence on Mexico’s largest brewer and producer of the Corona brand. With an estimated 47.5% of the total market share for 1999, Anheuser-Busch continues to widen the gap separating them from their nearest competitors. Budweiser and Bud Light are the No.1 and No. 2 best-selling beers in the world. Miller, their closest rival maintains 22.1% of the market share. In 1999, they achieved record sales and earnings, selling over 100 million barrels of beer worldwide for the first time in history.
August A. Busch III, Chairman of the Board and President, says his company owes its success to, “The combination of outstanding domestic beer industry fundamentals, the highest quality and freshest beer in the industry and exceptional marketing and sales execution.” According to Fortune Magazine, the company applies venerable marketing techniques more vigorously and imaginatively than the competition. The company’s most important technique is target marketing.
Anheuser-Busch sponsors’ events and runs advertising specifically aimed at all sorts of consumers: blacks, whites, blue-collar workers, computer-buffs, and sports fans. Sports fans make up a large, diverse population. The company has strategically positioned themselves to promote to this target audience, with 70% of their advertising dollars going towards sports programming. They have exclusive deals with 21 of 24 major league baseball teams, 21 of 28 National Football League franchises, 300 college sports teams, and most professional basketball, hockey, and soccer teams. Anheuser-Busch has been very effective in maintaining a competitive advantage over its fellow rivals.
The primary economic issue affecting this company’s environment is taxation. The company is significantly impacted by federal, state and local taxes, including beer excise taxes. Beer excise taxes are a sin tax, which raise revenue for the government. The national median is 18 cents per gallon of beer (St Louis Post, 98). An increase in taxes effects costs to the company, hence, costs to the wholesalers and consumers. The economic constraints beer excise taxes make a huge affect the company’s overall performance.
The social environment plays a key role in how Anheuser-Busch effectively markets their product to its consumers. For apparent reasons, such as, alcohol abuse, underage drinking, and drunk driving, not everyone is in favor of promoting alcoholic beverages. Many individuals and organizations lobby against the brewing industry and have a strong voice in the political arena. MADD, (Mothers Against Drunk Driving) is well known for its prominent position in the fight to end alcohol abuse. There has been much talk on how Anheuser-Busch chooses to advertise its beer products.
Over the years, some of their most successful advertising campaigns have been targeted for promoting underage drinking. Anheuser-Busch Super Bowl Ad encourages parents to talk to teens to prevent illegal drinking. It is evident; alcohol advertising is subject to serious debate. These issues may place constraints on marketing activities and must be taken into consideration.
In contrast, this company owes its success to its product’s popularity. A large majority of the adult population enjoys alcoholic beverages, drinks responsibly and is strongly in favor of promoting alcoholic beverages. Anheuser-Busch must be prepared to effectively handle the social controversy, which arises with the sale of their product.
The political environment is very influential on the brewing industry. Often, social issues affect the political realm, consequently, placing more restrictions on the sales or consumption of alcohol. For instance, MADD seeks support from politicians during election time. Political leaders may then fight to increase alcohol taxes, as well as, place more restrictions on the marketing and consumption of alcohol. In 1993, Senator Paul Simon, of Illinois, introduced legislation that would require all liquor advertising to carry a Surgeon General’s warning. Also, due to the serious problems of drunk driving, efforts were made by state and federal officials to lower the blood-alcohol limit to .08 for offenders. With community programs across the United States, they lead the industry in the promotion of alcohol awareness and education.
The legal environment in the brewing industry is often affected by social and political attitudes. There has been much controversy over the advertising of alcohol products through various forms of media. For instance, Anheuser-Busch and Miller Brewing Co., ceased advertising on the MTV network after the FTC launched an investigation into the airing of beer commercials to an audience consisting of mostly underage viewers. The White House has requested the FCC investigate possible restrictions on liquor advertising on TV. Although, there are no federal regulations that apply to alcohol advertising, local governments have placed restrictions on alcohol advertising. Alcohol ads were recently banned from billboards in Baltimore, and other cities are planning similar actions (Journal of Advertising, 1998). These legal restrictions impact on Anheuser-Busch markets its product.
Anheuser-Busch prides themselves on using the most modern equipment in the industry to ensure the highest
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