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Anheuser Busch Executive Summary

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Anheuser-Busch Companies, Inc. Executive Summary


Sector: Consumer Staples
Industry: Brewers
Ownership: Public
Parent: Anheuser Busch-Inbev

A wholly-owned subsidiary of Belgium-based Anheuser–Busch InBev, is the largest brewing company in the United States. The company operates 12 breweries in the United States and nearly 20 in other countries. It was, until December 2009, also one of America's largest theme park operators; operating ten theme parks across the United States through the company's family entertainment division, Busch Entertainment Corporation. It is headquartered in St. Louis, Missouri. AB’s objectives as a corporation are: * To increase domestic beer segment volume and per barrel profitability which, when combined with market share growth will provide the source for earnings per share growth and improvement in return on capital employed. * To provide a great tasting fresh beer to our consumers by limiting self life to 110 days, and providing a “born on date” on all our products. * To build a high-performing, diverse workforce, while providing a safe, productive and rewarding work environment, in which all our employees can benefit. * To be a good corporate citizen and good neighbor in every community where we do business and promote the responsible consumption of our products. * To preserve and protect the environment and support communities where we do business, by complying with all applicable environmental laws, regulations, and permits.
Products and Services
Anheuser-Busch's best known beers include brands such as Budweiser, Busch, Michelob, Bud Light, and Natural Light. The company also produces more than 100 beers, import beers, specialty beers, nonalcoholic brews, malt liquors ( such as King Cobra and Hurricane), and flavored malt beverages (e.g. the Bacardi Silver family and Tequiza). Currently, the number 1 ranked beer in America is Bud Light. The company introduced a flavored 12% abv malt liquor under the name Spykes in 2007. It was sold in colorful, 2-ounce bottles. Available flavors included mango, lime, melon and chocolate.
Free public tours of the brewery are given. The tour takes visitors through the complex, and those of the legal age can enjoy two free glasses of any Anheuser-Busch product in the Hospitality Room after the tour. Tourists can see beer being made in a working part of the brewery (from behind plexiglas shields).
The company keeps a rotation of its famous Budweiser Clydesdales at its headquarters, and visitors to the brewery can observe the Clydesdales in their exercise field and see their places in the carriage house. Some of the herd is kept at the company farm in St. Louis County. The farm, known as Grant's Farm (having been owned by former President Ulysses S. Grant at one time), is home to a menagerie of animals. Since 2008, approximately half of the Budweiser Clydesdales are kept at the Warmsprings Ranch.

Anheuser-Busch Companies, Inc. traces its roots to 1852 and the Bavarian Brewery in St. Louis. The struggling brewery was acquired by Eberhard Anheuser, a successful soap manufacturer, in 1860 Anheuser had no experience in the brewing business, but his son-in-law did. Adolphus Busch, a successful German businessman, joined his father-in-law in the business in the 1860s and took on increasing responsibility. Through new technologies and modern marketing practices, he transformed the local brewery into an industry leader. In the early 1870s, Adolphus Busch became the first American brewer to use pasteurization, which allowed beer to be shipped long distances without spoiling. By the mid 1870s and early 1880s, he introduced artificial refrigeration, refrigerated railcars and rail-side icehouses. These technological innovations allowed the company to grow and distribute beer across the country. Budweiser was the first national beer brand, introduced in 1876. Twenty years later, Busch introduced Michelob, America’s first specialty beer. To market his beers, Busch used traditional, proven selling methods but in a far more organized and deliberate manner than his competitors. He pioneered the use of giveaways and premiums, and used his brewery as a show place for the public to visit.
When Eberhard Anheuser died in 1880, Adolphus became president of the brewery. In 1901, the company broke the 1 million barrels of beer sales mark for the first time, making it one of the nation’s leading breweries. Adolphus Busch died in 1913 and was succeeded by his son; August A. Busch, Sr. The brewery’s bleakest period began at midnight on Jan. 16, 1920, when national Prohibition became law. Rather than close its doors, as more than half of the nation’s breweries did, Anheuser-Busch diversified and remained in business. Under the leadership of August Sr., the company marketed more than 25 different non-alcoholic products such as soft drinks, truck bodies and ice cream. In preparation for Prohibition, Anheuser-Busch released Bevo, a non-alcoholic cereal beverage, in 1916. On April 7, 1933, beer was re-legalized. Recovery from Prohibition was slow but steady under Adolphus Busch III, who became president of the company in 1934, upon the death of his father, August Sr.
Economic conditions caused by the Great Depression also restrained growth, but, thanks in part to the introduction of the metal can in 1936, sales began to climb. By 1938, Anheuser-Busch hit the 2 million barrel mark. During World War II, the company diverted many of its operations in support of the war effort, voluntarily relinquishing its West Coast markets to conserve railcar space for war materials shipments. Following the war, America and Anheuser-Busch experienced an era of growth and prosperity throughout the 1950s and 1960s. In 1946, August A. Busch, Jr. became president of the company following the death of his brother, Adolphus III. Beginning with the opening of the Newark, N.J. facility in 1951, August Jr. created a national network of nine breweries.
Under his leadership, beer sales increased from 3 million barrels to more than 34 million barrels, and corporate diversification was extended to include family entertainment, industrial products, real- estate and can manufacturing. In 1957, Anheuser-Busch became the leading U.S. brewer, a position it retains today. August A. Busch III was elected president of Anheuser-Busch, Inc. in 1974, and the next year succeeded his father, August Jr., as chief executive officer, becoming the fourth generation of the family to lead Anheuser-Busch. August III led the company to build four additional breweries, expand the family entertainment business, and significantly strengthen the company’s horizontal and vertical integration. In 2008, Anheuser-Busch and InBev combined to become Anheuser-Busch InBev. The new company is the world’s largest brewer and one of the top 5 consumer goods companies in the world.
It is AB’s mission to be the United States beer company. The company is working hard to elevate and enhance the image and relevance of beer, plus making their brands the preferred beer of choice. It is also AB’s mission to deliver superior returns to their shareholders, which in return will provide more benefits and resources for the company.

Product/Bud Light In 1982, the company introduced Bud Light nationally, which grew quickly in popularity and today is one of the world’s best selling beer brands. Bud Light is an American style lager made from rice, hops and barley malt. It is less alcoholic than regular Budweiser beer. It is marketed in the "premium-light" category, and Anheuser-Busch banks on the "drinkability" of Bud Light being its defining characteristic

Bud Light Marketing Strategy
Bud Light beer has long directed their marketing strategy through sports. For years their ads have dominated the Super Bowl advertising bonanza. Bud Light also has used various sports themes in their commercials and has a strong presence in many sporting events (in the venue and through television). Bud Light’s advertising campaign has been extremely effective. They have targeted the young male demographic and have done a phenomenal job of it. Relying on humor and sports has been the staple of their strategy, and it has worked very well with their target audience. Advertisements for Bud Light almost always are a comedy, and as they close they briefly plug the actual product. This has been their recipe for success. Bud Light has well graded commercials and a very high percentage of the beer market.
Who can forget the “secret fridge,” “real men of genius,” “hidden Bud Lights,” or countless other commercial lines that Bud Light has created. The ads are remembered, and in marketing that is half the battle. But, that is the issue.
Why is beer being marketed solely through the use of comedy? Because comedy is much more successful than a realistic commercial. How successfully would Bud Light market themselves if they were forced to use the reality of their product? Would they show how drunken men get home after football games? Would they show people drinking too much? Would they show the average user of their product? No, of course not. They would never be able to market their product successfully if they used its real circumstances.
While Bud Light solely relies on comedy, many other beer manufacturers have taken other approaches. Some show where their beer is made. Samuel Adams commercials currently focus on the early years of their organization and the development of their company. Additionally, most beer ads, other than Bud Light, heavily stress using responsibility while drinking. Guinness beer is a good example. Although Guinness mostly uses comedy to sell their product they stress responsibility in every ad, and even have comedic ads focused on responsibility. Bud Light should consider using a similar formula if they continue to stick to comedy. Bud Light has an amazingly successful marketing strategy through the use of comedy and sports.

Target Market Segment: Gender | Family Life – Cycle | Age | Class | Ethnicity | Male | Married | Seniors | Capitalist | White | Female | Single | Baby Boomers | Upper Middle | African American | | Divorced | Generation X | Working | Asian American | | Widowed | 6 years of Gen. Y | Working Poor | Hispanic American | | Parent | | Underclass | Native American |

* Geographic
Anheuser Busch sells its beer products domestically and globally. It operates 14 breweries in the U.S., brewing approximately 30 kinds of beer. They offer a wide variety of premium and sub-premium beverages, each of which has a unique taste and price. Another area of interest for A-B is the international marketing of their beer. This segment is regulated by Anheuser-Busch International, which operates 15 breweries – 14 in China and one in the United Kingdom. The product of Budweiser is brewed in seven other countries outside the United States under the direct supervision of Anheuser Busch brew masters. They include Argentina, Canada, Ireland, Italy, Japan, South Korea and Spain. * Psychographics
Anheuser - Busch reaches out to diverse groups of people with various psychographics. They deal with people that have a social lifestyle and enjoy going out to bars and clubs. They also deal with consumers that are interested in sports. Anheuser- Busch is a major sponsor of every sporting event possible, taking profits in the NFL, NBA, MLB, and NASCA. Lastly, Anheuser – Busch maintains a strong social affiliation with consumers who drink beer just for relaxation and comfort. A major market consists of social drinkers who drink one or two beers a night after work.
Consumer Markets Anheuser Busch’s primary consumer market consists of males and females over the age of 21. The age groups range from seniors, Baby Boomers, Generation X, and a part of Generation Y. They also target every category involving family life cycle, including married, single, divorced, widowed, and parents. AB products are not sold to a particular social class, however depending on whether the consumer’s are Capitalists or underclass, might play a major role in deciding which AB beer they purchase. Finally, ethnicity is a major focus for AB, they believe in promoting diversity in all of their relationships. They actively support numerous community programs sponsored by a wide variety of ethnic groups; they encourage the development of minority and women-owned companies by purchasing more than $400 million in annual goods and services from those companies. Anheuser-Busch is also a close friend and partner with America's ethnic communities. Their programs are designed to preserve the unique traditions within diverse communities and to provide immediate and long-term benefits through joint efforts with national, regional and local organizations.

Business Markets
AB has a variety of business markets that it is involved with. The most important are grocery stores, super centers (Wal-Mart), convenience stores / gas stations, warehouse membership clubs (Costco), restaurant / bars, and sporting event venues. Restaurants/Bars are the most important business markets for A-B, because they buy and distribute the most amount of beer. Also, restaurants and bars are two of the easiest places that adults can access beer. Finally, in a bar, most beer is distributed from a tap off of keg, and more beer can be distributed with a keg, than selling bottles or cans individually.

Size and Growth
A-B owns nearly 50 percent of the United States domestic market share in the beer industry. The company produced close to 11 billion barrels of beer in 2009, which is 7.5 times its closest domestic competitor. The company has four trademark brand families; Budweiser, Michelob, Busch and Natural, each of which play a key strategic role as the volume drivers of the company. A-B’s size is definitely strength, because the company has the resources in place to increase beer industry volume, while continuing to meet the needs of today’s consumer.
A-B currently offers over 40 brands of beer. Of this wide variety of premium and sub-premium beverages, each beer offers its own unique taste and blend. Yet, A-B is not standing still; the company is committed to creating new beverages that appeal to today’s adult consumers. To meet these changing tastes, A-B introduced more than 30 new in the past five years and encouraged consumers to experiment with their new flavors. Of these, Budweiser Select, the newest addition to the Budweiser family was introduced, and has become one of the company’s most successful new product launches, with more than 2 million barrels sold. Other new offering included malt beverages, flavored beers, and beers such as BE, which combines fruit flavors with caffeine and guarana. A-B’s relentless commitment to constantly improving and innovating new products is keeping them ahead of the competition.

Over the years, Bud light has been distributed in many sizes and containers. Bud light is primarily distributed in just three packages cans, 12-ounce glass and aluminum bottles. Along with this expansion came advances in bottling automation, new bottling materials and more efficient distribution methods. These advances have brought to market many new containers and package designs.

Eagle Packaging
Eagle Packaging, Inc. satisfies all of Anheuser Busch’s packaging needs. It supplies 100 percent of Anheuser-Busch's domestic crown and closure liner material. This means Anheuser Busch spends less time dealing with numerous suppliers, and more time spent on producing beer. Eagle Packaging, Inc. also stands behind every product they sell, and they continuously work with their manufacturers to provide Anheuser Busch with the highest quality products and services possible. With Eagle Packaging, Inc. as Anheuser Busch’s partner, they improve their business position by offering innovative solutions and proactive ideas. They also work with Anheuser Busch to coordinate a “Just in Time “delivery schedule. This saves Anheuser Busch inventory space and costs, while keeping them properly supplied.

Longhorn Glass Corp.
Longhorn Glass Corp. supplies Anheuser Busch, the nation’s largest buyer of glass bottles, with about 8% of its glass bottles. This Anheuser - Busch subsidiary was established in Houston, Texas in 2001. Longhorn Glass Company provides 60% of Anheuser’s, Houston brewery, with its longneck bottle needs. The company primarily produces one product, Amber Longneck bottles.
Anheuser-Busch Recycling Company
Anheuser – Busch Recycling Company recycles used beverage cans, which are converted into sheet aluminum for manufacturing new cans. The company was formed in 1978 to provide a positive alternative to mandatory deposits and to help reduce container costs. They recycle over 90% of the cans sold domestically by the Anheuser Busch beer company. For over a decade, it has been the world’s largest recycler of aluminum beverage containers.

Metal Container Corporation
The purpose of the Metal Container Corporation, the largest partner of Anheuser Busch, is to provide cans, lids and services that exceed the expectations of our customers and consumers. Metal Container Corporation was formed in 1973 and operates eight can and three lid manufacturing facilities that are strategically located across the United States. It supplies 60% of Anheuser-Busch’s domestic beer cans and 75% of Anheuser-Busch’s domestic lids. Their main customers are Anheuser-Busch, Pepsi, Coca-Cola and Grupo Modelo. In total, the company makes more than 26 billion cans and 29 billion lids annually.
Precision Printing & Packaging, Inc.
Precision Printing and Packaging, Inc produces more than 25 billion metalized labels annually for Anheuser-Busch and other customers including Bush Beans, Wrigley, and Pepsi. The company supplies 80 percent of Anheuser-Busch's labels.

Pricing Methodology
A-B is best described as market oriented because the sales of their products do not depend on an aggressive sales force, but rather on the customer’s decision to purchase their product. The company focuses on customer wants and needs by offering a diverse selection of products while giving a relentless commitment toward quality and by doing so is able to distinguish its products from competitors’ offerings. The company is also able to adhere to customers wants and needs by offering different prices for their beer, while still offering the same relentless commitment to quality. A wide variety of premium and sub-premium brands, offer a broad range of prices. However, price does not excuse A-B’s commitment to quality on all its products. Budweiser is on the upper echelon, where as Natural is on the lower end.

The emergence of the Bud Light brand was illustrated to develop a competition-based position. In the mid-1970s, Miller Brewing Company introduced a brand that was called Lite beer from Miller. In contrast, Lite beer from Miller was positioned as the beer that tasted great, but had fewer calories than regular beer. The advantage of this product was that users could drink more without getting filled up. The campaign, which was developed by Backer Spielvogel, targeted 18-34 year old males with blue-collar occupations, who were the heavy users of the beer category. The campaign was supported by the endorsement of ex-athletes and other beer-drinking personalities and aired on television during sports programming. The result was impressive sales of Late. Consumption of the brand was substantial in-home as well as in bars and restaurants, where 30% of all beer is sold. Unexpectedly, however, the majority of users were not the 18-34 year-old heavy drinkers of beer. Rather, more moderate drinking 25-44 year old professionals were the dominant Lite users.
Anheuser-Busch viewed Lite's introductory campaign as a potential threat to their Budweiser brand, which at the time commanded 43% of the beer market. A-B responded by entering the light market in 1977 with the premium Natural Light brand and in 1978 with a super premium Michelob Light brand. The logic behind these introductions was that A-B dominated Miller and other brewers in distribution, and this domination would enable A-B's new light brands to emerge as strong players in the light category.
A-B introduced Budweiser Light (currently known as Bud Light) in 1982. The goal was to market a brand that, unlike Natural Light and Michelob Light, would have a strong point of advantage in relation to Lite. The advantage was the heritage of Budweiser, the king of beers. The introductory campaign was targeted at the 25-44 year old professionals, which by this time all light beers were targeting. The position was the light beer with superior quality because it is made by A-B. The introductory campaign featured a clydesdale horse, which was an icon that A-B had associated with their Budweiser brand, running free on the beach and the slogan "bring out your best." The voice-over explained that the brand had been developed slowly over time with the same care, quality, and commitment that went into Budweiser to ensure that it lived up to the heritage of Budweiser. Subsequent executions showed season-appropriate sports including football, hockey, skiing and baseball. Each was aired during sports programming.
Indeed, Miller Lite had over 50% of the light beer market and Coors light entry was the second leading beer in the light category. Business results were impressive. In 1982, Budweiser Light sold more product than Lite had in its first three years, and by the end of 1983, Budweiser Light achieved a 20% share of the light beer market. At the same time, Budweiser Light had failed to make significant inroads in the out-of-home market. Apparently, when people asked for a Budweiser Light in bars and restaurants, they were more often than not being served either Miller Lite, or a regular Budweiser. As a result Lite beer from Miller maintained a market share of over 50% in the light category. A-B also found that a substantial percentage of Budweiser Light sales were at the expense of the flagship Budweiser brand.
To address these concerns, A-B made several changes in their marketing program for 1984. One change was the brand name from Budweiser Light to Bud Light. The other was to introduce a new campaign called Make it a "Bud Light". It focused on the fact that Bud Light was a light beer and that if they just asked for a light they might get any number of different objects that were not Bud Light beer. It was anticipated that this campaign would be run for several months and then Bud Light advertising would return to the heritage focus that had been used to launch the brand. However, when it was found Bud Light's sales increased in response to bar call, the campaign was run for five years.
In 1987, Miller Lite was still the leading brand in the light category and had actually maintained its advantage over Bud Light. Sales of both brands had grown substantially as light was now almost 30% of the beer market. A-B was particularly concerned about these developments because the growth of the light category was largely at the expense of their Budweiser brand. Indeed, many of the heavy-drinking blue-collar males under 25 were abandoning regular beer for light beer. In addition, the growing consumption of white wine and soft drinks were limiting growth of the beer category. In an effort to capture the under-25 heavy user, A-B segmented the market and developed two campaigns. One was focused at the 25-44 year old professionals, who were the traditional users of the light category. The other campaign was targeted at the under-25, heavy user of beer. It featured a dog named Spuds MacKenzie, a party animal who attracted the attention of beautiful women.
As their share and sales began to decline in the nineties, Miller Lite sought a campaign that would deliver news. In 1997, Miller's CEO Jack MacDonough decided that a dramatic change was needed if Miller Lite was to reestablish its position as the number one light brand. He hired Fallon McElligott, the hot Minneapolis agency. Their charge was to attract 21-24 year olds with the proposition that "Miller invites you to Miller Time, where it's always fun, entertaining and unexpected -- anything can happen." Two Swedes, copywriter Linus Karlsson and art director Paul Malmstrom, developed the Miller Time campaign. These creatives were under 30 and were best known for work on Diesel Jeans in Europe, which included humorous references to American culture.
These drastic marketing measures by Miller still weren’t enough to top A-B. Today, the light category has 40% share of the beer category sales and Bud Light is the best selling beer in the U.S and the number one beer in the world. Bud-Light is brewed at all 12 Anheuser Busch based breweries.
Environmental Impact * Ethics/Social responsibilities
A-B is making many extensive efforts to get involved in the community, by teaming up with charitable foundations and reaching out to those in need. Over the past decade, the company has donated more than $320 million to charitable organizations, including those that support education, health care, the arts, cultural enrichment, social services and environmental conservation. A-B released a “making friends” campaign which involves local communities, disaster relief and “true music” in which they sponsor music artists and related programs. The company also created a one million dollar “fallen heroes’ fund” which is a scholarship fund for spouses and children of those killed in Iraq. A-B has worked hard to establish a history of giving back to build on lasting friendships. By investing in and adding communities, the company is enhancing its image and reputation, increasing awareness for its brands, and creating loyalty among its customers.
A-B has earned a reputation as the industry leader in the fight against alcohol abuse. The company has promoted responsibility efforts for nearly 100 years, and over the past two decades, have invested more than a half billion dollars in a comprehensive portfolio of more than two dozen community-based programs and national advertising campaigns to promote responsible drinking and help prevent underage drinking and drunk driving. A-B has also created effective community based programs that train bartenders, waiter, store clerks, etc. on ID checking, and also have distributors bringing speakers into schools about issues such as drunk driving and underage drinking. In their effort to promote responsible drinking, A-B is strengthening the community, which in return is strengthening the company’s image and reputation.
A-B’s commitment to quality extends beyond packaging development. The company operates with care and concern for the world’s environment. A-B Recycling Corporation (ABRC) is one of the world’s largest aluminum recyclers. In 2009, ABRC recycled more than 1200 million pounds of aluminum and was introduced into the Waste Wise Hall of Fame by the U.S. Environmental Protection Agency. ABRC also develops educational programs that promote voluntary recycling. A-B’s longstanding commitment to waste reduction and recycling programs has not only made up for their consumption of natural resources, but has also built a reputation for about the environment. * Legal/Regulatory/Political
A-B experiences many threats do to new laws and regulations regarding the distribution of alcohol, such as: The Bureau of Alcohol, Tobacco and Firearms. In dealing with alcohol, the ATF regulates the qualification and operations of distilleries, wineries, and breweries, as well as importers and wholesalers in the alcohol industry. ATF has established mutually beneficial working relationships to minimize the regulatory burdens on businesses while still providing necessary government oversight and protecting consumer interests.
The ATF National Laboratory Center is the premier tester of new products coming onto the market, as well as the facility that determines whether any products currently on the market pose a health risk to consumers. To ensure alcohol beverage labels do not contain misleading information and adhere to regulatory mandates, ATF examines all label applications for approval. The goals of the ATF are to ensure the collection of alcohol beverage excise taxes; to provide accurate deposit and accounting for the taxes; to prevent entry into the alcohol industry whose business experience or associations are a risk of tax fraud; and to suppress label fraud, commercial bribery, diversion and smuggling, and other unlawful practices in the alcohol marketplace.
Many states have started to use “Dram shop” laws. Under dram shop liability laws, a person injured by an intoxicated person can sue the business or establishment that contributed to that person’s intoxication. Regulation of the sale of liquor to minors or individuals who are intoxicated; requiring most states require an alcohol license. These limit the time and place where sales take place. The government also regulates the production of alcohol by taxing businesses that take part in the selling and production of alcohol. This provides a source of revenue for the government. The Alcohol Beverage Act of 1988 which, requires all alcoholic beverages to bear a clear and conspicuous label warning of the dangers of alcohol consumption. Laws limiting alcohol distribution, and advertising such as college sporting events * Technology
AB continues to implement several cost saving initiatives. Brewery modernizations, such as improvements to packaging line flexibility and increased bottle line speed, reductions in brewery material costs and transportation initiatives, including several consolidation and improved scheduling of shipping carriers, contributed nearly $100 million in incremental productivity improvement savings.
Analysis of Marketing Strengths and Weaknesses
Through my analysis, I have identified that A-B has many current strengths in all aspects of their domestic operations. They offer a unique product, which is distributed and promoted to precision. A-B has very few if any current weaknesses. Strengths

A-B owns nearly 50 percent of the United States domestic market share in the beer industry. The company has four trademark brand families; Budweiser, Michelob, Busch and Natural, each of which play a key strategic role as the volume drivers of the company. A-B’s size is definitely strength, because the company has the resources in place to increase beer industry volume, while continuing to meet the needs of today’s consumer.
A-B currently offers over 40 brands of beer. Of this wide variety of premium and sub-premium beverages, each beer offers its own unique taste and blend. Yet, A-B is not standing still; the company is committed to creating new beverages that appeal to today’s adult consumers. To meet these changing tastes, A-B introduced more than 30 new products in the past 5 years and encouraged consumers to experiment with their new flavors. Of these, Budweiser Select, the newest addition to the Budweiser family was introduced, and has become one of the company’s most successful new product launches, with more than 2 million barrels sold. Other new offering included malt beverages, flavored beers, and beers such as BE, which combines fruit flavors with caffeine and guarana. A-B’s relentless commitment to constantly improving and innovating new products is keeping them ahead of the competition.
Along with variety in beer, A-B is offering a variety in new packaging styles and shapes to elevate the image of beer. A-B launched aluminum bottles for those consumers who want to look stylish when out at a club, bar or upscale restaurant. The company also released a new clear plastic label to its Bud Light and Budweiser Select packages, which enhances the premium image and appeal of the brands. By offering new product lines in packaging, A-B is strengthening its image as the leader in the market.


A-B owns and operates 12 strategically located breweries in the United States. These breweries give A-B a competitive advantage of its competitors by reducing freight costs associated with shipping out supplies, but also by offering the freshest beer of any major brewer. On average, A-B beers are 14 days fresher than the nearest competitor.


A-B encounters significant advertising and promotional expenses; however these costs are necessary because advertising and promotion are key elements of their marketing strategy. Each year the company advertises through numerous sponsorships, programs and campaigns to focus on their unique imagery and product difference. A-B also does a fair amount of advertising through sporting events, they have been the exclusive beer advertiser during the Super Bowl for the past 18 years, and are also associated with the National Basketball Association, the National Hockey League, and the majority of National Football League teams. They also are currently in contract to sponsor Dale Earnhardt Jr. A-B is also known for its creative, catchy commercials. The Clydesdale horses are recognizable by most, and Budweiser Select’s national advertising campaign featured U.S. beer company President August Busch IV which highlighted the company’s sophistication and its “Expect Everything” brand identity.


A wide variety of premium and sub-premium brands, offer a broad range of prices. However, price does not excuse A-B’s commitment to quality on all its products. Budweiser is on the upper echelon, where as Natural is on the lower end.

Employee A-B has worked hard to develop and build a diverse workplace, in which teamwork and open, honest communication is valued. They are committed to promoting diversity in ethnic background. At the centerpiece of their effort is “Partners In Economic Progress,” a structured initiative designed to ensure that minority and women-owned firms have an opportunity to do business with A-B and its subsidiaries. In their efforts to building a diverse work force A-B has strengthened its brand name, as well as developed a strong relationship with many ethnicities. A-B has also worked hard to create a safe, productive and rewarding work environment, where each employee is responsible for contributing to the company’s success. The company emphasizes preparing employees for challenging and rewarding careers through extensive training and education provided by the A-B Training and Development Group (ABTDG). ABTDG’s main focus has been developing skills for employees of all business units within A-B, giving special consideration to technical, leadership and professional development. Technical training focuses on brewing, packaging, sales, maintenance, engineering and information technology, where as leadership and development courses center more general skills needed to prepare the future leaders of A-B.
A-B has also offer highly competitive salaries and one of the most generous benefit packages in the industry. Benefits include health, dental, vision, and prescription plans; vacation; holidays; 401 (k); pension.


One potential threat to A-B is that they are getting to broad with their product base. It is important for A-B to keep on top of the changing tastes of consumers, but there comes a point when you need to focus on the products that have really driven the industry. A-B may also experience some spillover costs if they develop two beers with the same taste.

A-B’s domestic beer shipments to wholesalers declined 1.8 percent as wholesaler inventories were reduced significantly. This is a possible threat to the company because if beer shipments continue to decline A-B will loose a large portion of their market.
It is also important for A-B to market specifically to those individuals that are over 21, because government intervention on the sale of alcohol could pose a risk. A-B as well as other alcohol companies could be subject to advertising and promotion limitations similar to those created against the tobacco companies in the future. If law were created limiting the advertising of alcohol A-B would have to find alternative methods.

Life Style Trends (Ethnic/Family/Social)
Health issues are a growing concern in the beer industry. As consumers continue to cut calories from their diet and watch carbohydrates, they are continuously cutting beer. Although, A-B is offering a new low carb beer, Michelob Ultra, healthier life styles are a growing threat.

A-B experiences many threats due to new laws and regulations regarding the distribution of alcohol. such as, The Bureau of Alcohol, Tobacco and Firearms.
Not included
AB has been extremely successful throughout the years and continues to develop innovative marketing strategies that have allowed them to stand out from their competitors. I don’t have any recommendations for them at this time.


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