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Battle of the Beers Essay

Introduction

This case is about the intense battle between beer rivals in the United States, particularly between Anheuser-Busch (A-B), the world’s largest brewer, and SABMiller, the world’s second largest brewer. It discusses about how the companies used advertising in their brand positioning in order to compete with each other and increase the sales.

This case starts by describing the strategies used by the both company when the battle began since the South African Breweries (SAB) purchased Miller Brewing Company in 2002. The 2 leading beer brewing companies uses different strategies to fight with each other in order to communicate how its beer differ from competition to draw in more consumers. First, Miller emphasized on the light beer, taking advantage of the health conscious trend where consumers were looking for low-carb beer by using comparative advertising campaign claiming that the Miller Lite has half the carbs than Bud Light.

This prompted counteroffensives from A-B that mock Miller Lite’s low-carbs claims and challenge beer drinkers to choose on taste. To counter that, Miller then attack back by emphasizing also on the taste of the light beer. Things become worse when Miller also launched a new offensive campaign which lampooned Budweiser for its self-proclaimed title as “King of Beers” and Budweiser lashed back by labelled Miller Lite as “Queen of Carbs”. Miller filed a lawsuit against Budweiser asserting the false and misleading claims by Budweiser to Miller Light which will definitely affect the image of SABMiller.

Then, Miller used blind taste tests and shifted to emphasizing taste and flavour instead of stuck with a carb positioning. In 2004, the companies used comparative advertising, where Miller launched new advertising campaign attacking Budweiser, and A-B also launched direct counterattack, and this made the battle become even more intense that others are being pulled into the fray. Television networks were refusing commercials on both sides because their unduly disparaging or appear to contain taste claims that are unsubstantiated and misleading.

While Miller continue to press on the taste issue, A-B introduced a new product promoting as having no lingering aftertaste and also emphasizing the freshness of its beer. The battle between the 2 companies goes back and forth.

Questions:

1. What attributes are most important in determining beer purchasing decisions? How does this vary by market segments?

There are many important attributes that need to be considered in determining beer purchasing decisions. As described in the case, these includes taste, aroma, and appearance.

(i) Taste/Flavour/Aroma

Taste is the most important attribute in determining beer purchasing decisions as consumers buy beer for the taste. As evident in the case, Miller spent huge amounts on advertising the taste advantage they hold over Budweiser. They held blind taste tests where consumers were seen to choose Miller over Budweiser in the tests. Their success in providing good taste led to Miller recording a 2.6 % increase in sales volume in 2003 as consumers felt that Miller beers were better in taste. Aroma is extremely important to beer’s overall taste and it determines the purchase decision of a beer. The market segments that emphasize on aroma in their beer purchasing decision are mostly experienced beer drinkers. The repeat beer purchase will takes place when the taste of the beer suit the customers.

Health-conscious consumers who are looking to reduce their carbohydrate intake might opt for beer which are less sugar. Consumers who give more preference to the aroma of beer might look for strong aroma beer or beer which suit his or her taste. Some market segments might prefer beer with no lingering aftertaste.

(ii) Appearance

The process of purchasing a beer begins with its visual appearance. Many people make hasty judgments of taste (food or beverage) based entirely on sight alone. In terms of beer appearance, what consumers looking for are colour, clarity, and head retention. Although one colour is not necessarily better than the others, and none indicates directly how the beer will taste, but many beer drinkers will just have their own preference and perception of beer colour. Also, if a beer can’t form a head, either it’s improperly carbonated or the vessel into which it’s poured is dirty.

Many beer drinkers will most probably emphasize on the appearance of the beer and are obsessed with beer clarity; if the beer is not crystal clear, they would not drink it. Some markets segments might prefer darker beers like stouts whereas others might prefer lighter beers such as wheat beers.

(iii) Price

Many people judge or determine a product quality based on the price. This is also true for beer purchases, and is especially true for those non-experienced beer drinkers. Higher price could have one of two effects on consumer preference: it could cause the product to seem higher in quality, or it could make the product less desirable because of the extra expense. Although most of the time price may reflect the quality of the beer (higher quality, higher price, and vice versa), but this is not all the time.

For those who are emphasize on the quality of the beer, they might probably prefer to buy the higher-priced beer. Higher-income beer drinkers also might choose the higher-priced beer which they perceived that the beer has higher quality. For those market segments who just drink beers for enjoyment for example peers gathering, they might just buy the cheaper beers.

(iv) Brand name

Brand is the most important non-sensory factors affecting consumers’ choice decisions of products. It seen as a promise, a guarantee or contract with the manufacturer and a symbolic mean and sign of quality. Beer drinkers will choose their beers based on their own beer brand preferences too. Researchers had found that ultrapremium beer was rated higher than inexpensive beer when brand names were unknown, hence shows that brand name do affect beer purchasing decision.

In the market segments which earned a higher-income might prefer branded (usually higher-priced) beers. Younger generation might also choose those cheaper but well-known brand due to the exposure of the advertisements and they tend to follow the trend.

2. How would you construct a valid taste to determine beer buyers’ preferences?

The methods used to construct a valid taste to determine beer buyer preferences based on different attributes would be as follows:

Based on taste/flavour/aroma:
Conduct blind-taste tests by providing the participants the cups of different beers to be tested which labelled A through E. Participants will be asked to taste each of the beers, and then spit out the beer into an empty glass. Between each beer taste, participants will rinse out their mouths with water to avoid cross-contamination among trials. After tasting all the beers, participants will rank order the five beers on the basis of the quality of their taste.

Based on appearance:
Conduct tests by providing the participants different beers with differences colour and level of clarity. For example by providing the participants different cups of beers with different colour and clarity labelled with A, B, C, D, and so forth without the acknowledge the participants what type or brand of the beers are. Differences in preferences across the samples will demonstrate whether consumers prefer one colour (eg. darker colour) than the others. The preference of beer based on the label colour, design, logo, or the shape of the packaging can be tested as well.

Based on price:
Conduct tests by providing the participants different selections of beer with different prices to assess whether consumers use price to disambiguate taste. For example, the beers selected varied in price, from $7.99 per six-pack to $2.69 per six-pack. The prices per six-pack were as follows: Brand A: $7.99; Brand B: $5.99; Brand C: $3.99; Brand D: $3.49; and Brand E: $2.69. Participants will rank the different beers according to their own preferences and on the basis of their prior knowledge about these beers.

Based on brand name:
Conduct tests by providing the participants different selections of beer with different brand names. For example, different beer brands such as Anchor Steam, Samuel Adams, Budweiser, Miller Genuine Draft, and Schlitz will be provided to participants. Participants will be asked to rank the different beers according to their own preferences and on the basis of their prior knowledge about these beers.

Conclusion:

Consumers’ attitudes, beliefs, and feelings play important role in deciding if they are going to purchase the Anheuser-Busch or SABMiller beer brand such as Budweiser or Miller respectively. The beer marketers need to be able to identify the target markets’ shopping, purchase, spending, and consumption patterns in order to predict what consumers want from such product. Consumer intention acts as a helpful indicator to the types of marketing activities to carry so that they are able to attract the right market segment, thus leading to high profits. In conclusion, understanding consumer behaviour is significant because marketers want to attract the right consumers to purchase their brand.


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