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Budweiser Lager Key Successes and Recommendations

Budweiser Lager was first brewed in 1876 by E. Anheuser & CO., St. Louis. Today, Anheuser -Busch is the larges brewer in the world in terms of volume, and it competes across a diverse range of markets. The company oversees more than 30 different beer brands, including the domestic market leader Budweiser, a number of other alcoholic and nonalcoholic beverages, a group of theme parks, and a real estate enterprise.

While retaining its brew2ing traditions, the company has adopted new technological traditions that improve its business and marketing effectiveness. In 1997, chairman August Busch III vowed to make his company a leader in mining its customers' buying patterns. The key to Anheuser- Busch's real -time analysis of marketing effectiveness is timely data: getting information back from wholesalers and retailers on what is selling where and when.

"Wholesaler and store-level data has become the lifeblood of out organization," said Joe Patti, Anheuser's vice president for retail planning and category management. Therefore, Anheuser- Busch created Bud NET to connect to wholesalers, retailers, and other Anheuser-Busch business partners. The system handles sales reporting, customer development, retail promotion notices, and weekly sales forecasting, as well as a wide array of logistics-related functions. Bud Net is the information channel for an Anheuser-Busch system called WEARS (wholesaler equity agreement reporting system). Through Bud NET, the delivery people of the 700 U.S. distributors of Budweiser can become the eyes and ears of the brewer.

Wears and Bud NET do much more than keep tabs on the flow of icy cold Bud off retailers' refrigerated shelves. Using portable transaction computers, the delivery people also log data on competing products, identifying what else is on the retailers' shelves. At the end of the day, Anheuser-Busch get the data and looks for trends, "if Anheuser-Busch loses shelf space at a store in Clarksville, Tennessee, they know it right away," said Joe Thompson, president of Independent Beverage Group, a research and consulting firm. "They're better at this game than anyone, even Coca-Cola.

Understanding consumers means more than just gathering data on your own product or on your competitor's product. Anheuser-Busch also analyzes syndicated bar-code scan data gathered by information Resource Inc. (IRI), to track consumer purchasing behavior across a fill range of products. Anheuser -Busch successfully launched low-carb Michelob Ultra after seeing data on consumer shifts in dietary habits in other food groups.

Timely, fine-grain data also help sharpen Anheuser-Busch's marketing and product assortment. With store-level data, the company can create targeted marketing materials. For example, gay models appear on posters in San Francisco's Castro district, but not on those in the Mission district. Better data also help predict local sales dunning holidays, such as knowing that Atlantans celebrate Fourth of July more than St. Patrick's Day. Demographic data help Anheuser-Busch know where can sell well than bottles (blue collar neighborhoods), and helped the company launch a range of Latin inspired beverages such as Tequiza and Sauza Diablo for the growing Hispanic market.

Anheuser-Busch uses a variety of internal and external data sources- including consumer's demographics, POS, and market data- to guide product assortment decisions. Anheuser-Busch uses the six-step, industry-standard, best practice called Efficient Item Assortment (EIA) that is published by the Food Marketing Institute. Software, co-developed with an outside software vendor, creates a top-line master assortment product list for individual stores and store clusters. This tool won a Technology Leadership Award from Consumer Goods Technology (CGT) magazine.

Anheuser-Busch's uses of IT are international. Budexchange.co.uk, hosted on Bud NET, tracks key data and sales of 5,000 British outlets. The systems reward the loyalty of trade customers with Budweiser- branded support materials. Anheuser- Busch uses the data provided but the outlets in it proactive segmented marketing communications program. In a market in which overall sales are down 5.7 percent, Budweiser sales are up 7 percent.

Anheuser-Busch continues to expand its use of data links, using its market clout to improve data gathering and data sharing. August Busch IV, president for domestic operations, promised that "brewers and wholesalers with a clear, data-driven focus will have a distinct competitive advantage." Markets share data confirm the success of the company's strategy-- Anheuser-Busch now commands 50.1 percent of the market in 2003, up from 48.9 percent in 2002.

1. What have been the key success factors for Anheuser-Busch?

2. Where is Anheuser-Busch vulnerable? What should it watch out for?

3. What recommendations would you make to senior marketing executives going forward? What should the company be sure to do with it marketing?

Solution Preview

The key success factor for Anheuser Busch is focus on total quality management and total customer satisfaction. The company has been able to reap the benefits of modern data mining tools and other technologies to correctly identfy trends in the beverages market and used the data and information collected to put forth a successful marketing program with focus on improving customer satisfaction in all aspects of marketing mix: Price, Product, Promotion and Place.

In today's dymanic and competitive business environment, companies are making increasing use of advanced market research technologies in order to provide total customer satisfactin and enhance their market share. The company has ensured that the value proposition to the ...

Solution Summary

Budweiser Lager