Question.968 - Case Study: Marketing in Action Case Real Choices at Anheuser-Busch Questions: 1. What is the decision facing Anheuser-Busch? 2. What factors are important in understanding this decision situation? 3. What are the alternatives? 4. What decision(s) do you recommend? 5. What are some ways to implement your recommendation?
Answer Below:
Case Study: Marketing in Action Case Real Choices at Anheuser-Busch Zahra AlkhaliliBaker College BUS4210-A1 Dr. Nora Martin June 12th, 2023 Case Study: Marketing in Action Case Real Choices at Anheuser-Busch 1) What is the decision facing Anheuser-Busch? Before assessing the decision facing Anheuser-Busch it is important to evaluate some of the key points from the case study that could help the company make better decisions: a) Hard seltzer - shift in the beer behavior - new trend since the market reached a saturation point (Solomon et al., 2022). b) Anheuser-Busch InBev - to incline the trend to their spiked seltzer drinks (Solomon et al., 2022). c) Anheuser-Busch InBev is the parent company of Budweiser; there was a new trend in the surgery, wherein the target market was driven towards less filing and lower calorie brews (Solomon et al., 2022). d) Drop in sales from 22.3% to 17.7% of in-store purchases according to the 2019 U.S. study on alcohol - the primary shift was towards craft and distinct brews, and several others moved to malt beverages (popular one was hard seltzers); even the Nielsen study supported the claim from the target market for the need of variety in craft beer and that the target market is driven by millennials and Gen Zers; along with the onset of health and wellness trends making the target market aware (Solomon et al., 2022). e) Adding to that, a study conducted in 2020 resulted in implying 59% drop in beer drinking; some of the reasons were weight gain for 62%, and the rest 29% reported that they count calories (Solomon et al., 2022). f) The primary objective is to target the seltzer market with diverse demography with the notion to capture around 20% of the market with three seltzer brands; one such factor is age - wherein natural light beer targets college-goers, while the premium segment Bon & Viv tend to focus on millennial women (Solomon et al., 2022). Combining these two strategies - the firm intends to leverage its top brands towards Bud Light Seltzer - in order to attract average drinkers while sustaining the calories at a minimal; the investment is targeted at $100 million into the category (Solomon et al., 2022). g) Considering the seltzers market, in 2019, experienced a 212 percent growth, while the sub-categories tend to represent around 2.6% of the entire beer market, the study also claims that 50% of the alcohol drinkers have not tried seltzer. The hard seltzer tends to contribute to a total of $1.75 billion in 2019 and was estimated to experience a growth of $4.7 billion in 2022 (Solomon et al., 2022). h) In terms of decision-making for Anheuser-Busch: Firstly, they need to consider the market trends dynamic shift, wherein considering the case study years, that is, from 2018 to 2022, there is a surge of instability in the market demand trends. According to the economist Bart Watson (2018), assessing the gender contribution to the beer demography, craft drinkers are 31.5% female and 68.5% male; the economist also analyzes the Harris Poll that was conducted during the 2018 and estimated in the next five years there will be a surge of female craft drinkers around 29% from those 2018 numbers, while a steady 2 to 8% growth of male drinkers. This is one of the factors that Anheuser-Busch need to take into account since it provides them with a broader spectrum of operational market (Watson, 2018). Secondly, considering the research by McSweeney (2022) that shows the Race/Ethnicity factors of craft drinker demography - whereby 85.5% of craft drinkers were whites, among them, a significant 15 to 19% were belong to minorities. The non-white was around 14% of the total drinkers of craft beer. This shows that there seems to be a bleak possibility of the diversity of the target population being impacted, while the gender trends of the demography tend to be on the positive front for the firm to tap into. 2) What factors are important in understanding this decision situation? In terms of important factors that contribute to the decision situation are: Firstly, the company needs to evaluate the customer preferences in accordance with their behavior, as the case study explores the possibility of demand trends shifting towards varied preferences and their behavior towards perceiving different flavor or evaluating the calories count; the case study shows the trend shift from conventional alcohol towards seltzers due to the health and nutrition influencing the customer choice (McSweeney, 2022). Secondly, the surge in competition in terms of developing more comprehensive healthier drinkers by providing low-calorie beer, while other drinks like malt beverages and hard seltzers have gained more attention from the target audiences; considering the craft beers and the market demand for hard seltzers wherein, White Claw tends to hold a dominant position in the market (Alworth, 2021). The emphasis needs to be given to brand recognition and the potential for differentiation in accordance with the reevaluation of target audiences and, lastly, pricing and affordability of their product lineup (Wilson & Stone, 2022). Since pricing is one of the crucial factors that mitigate the performance of a product in the marketplace, a decision needs to be made based on the current and future trends, some discussed in the case study was the Natural Light Seltzer which is being offered to the customer segment at lower pricing, along with how the brand tends to position and leverage their product in terms of marketing to engage the customer through trendy buzz. 3) What are the alternatives? In terms of alternatives in accordance with the case study, the first thing is to continue with the current product portfolio since a complete revamp or remodeling of the product lineup could come as a backlash to the company; however, there the changes need to be made with market testing to understand how the newer products are being perceived in the marketplace among the target audience. Secondly, AB InBev can work on building a more comprehensive and novel hard seltzer lineup through investments in alternative categories, such as ready-to-drink cocktails that are hard to mimic in terms of flavor, pricing, accessibility of the product in terms of having a wider network and marketing (Schlegelmilch, 2022; Swinnen, 2011). Thirdly work with partners to promote their products; since A.B. InBev has already done that with the Superbowl, they need to work on more comprehensive marketing strategies, such as celebrities that have a good visibility base. 4) What decision(s) do you recommend? In terms of recommendations, A.B. InBev should work on expanding the target audiences because they tend to focus on gender and age as two primary demographic factors; although there is no taste to the beer, it is driven preferences that revolve around health factors, as the case shows there is more demand for the hard seltzer A.B. InBev should work on developing hard seltzer in their product lineup (Kingsnorth, 2022). The second recommendation is product differentiation; since the brand has a strong reputation, it can drive the market trends in terms of newer differentiation in its hard seltzer line with higher quality ingredients and flavors along with lower sugar and calories. Third, invest in R&D to learn more about the market trends and mitigate the flow of demand in order to stay ahead of the competition. The fourth recommendation is to establish a new face for their hard seltzer to simultaneously develop a repeat customer segment and attract newer consumers; one such approach could build a strong association between Bud Light and Bud Light Seltzer that could help in establishing a sense of brand loyalty among the target audiences. 5) What are some ways to implement your recommendation? Some of the implementation strategies are: Product development and innovation by investing in R&D; A.B. InBev set a new benchmark for hard seltzer in terms of taste, quality, and product distinction wherein they can communicate the brewing technique to the consumer segment through marketing by showcasing how unique they tend to operate apart from their competition (Kingsnorth, 2022). Secondly, marketing operations wherein A.B. InBev needs to work on a comprehensive and broader target demography and utilize the trending social media platform to communicate their objective and promotional message in a trendy and catchy approach (Alworth, 2021). Thirdly, establish a robust accessibility network; positioning their products in a reachable manner, it increases product visibility and also works on partnering strategies with influential brands to expand the reach and tap into competitors' knowledge. References Alworth, J. (2021). The beer bible. Workman publishing. Edition. Pearson Education. Kingsnorth, S. (2022). Digital marketing strategy: an integrated approach to online marketing. Kogan Page Publishers. McSweeney, M. B. (2022). Beer and Racism: How Beer Became White, Why It Matters, and the Movements to Change It. Schlegelmilch, B. B. (2022). Global marketing strategy. Springer International Publishing. Solomon, M. R., Marshall, G. W., & Stuart, E. W. (2022). Marketing Real People Real Choices 11th Swinnen, J. F. (Ed.). (2011). The economics of beer. OUP Oxford. Watson, B. (2020, August 3). Shifting demographics among craft drinkers. Brewers Association. https://www.brewersassociation.org/insights/shifting-demographics-among-craft-drinkers/ Wilson, E. R. Y., & Stone, A. B. (2022). Beer and Society: How We Make Beer and Beer Makes Us. Rowman & Littlefield.More Articles From Marketing
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