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... ing only one product group. This approach had helped boost domestic sales over the competition. Anheuser's manufacturing plants are the most technologically advanced in the industry.
This is due to a modernization program that involved updating and replacing old equipment. This has reduced cost by around $ 300 million per year. It has also increased the output of each facility. Anheuser has an advantage because of their name. Budweiser is one of the most valuable trademarks in the world today. This is due to the large number of promotions they have each year.
Every company regardless of the size has certain weaknesses. When dealing with a company of Anheuser's size it is hard to pinpoint exactly what the problems are. Typically there are a few common problems that plague any organization. They range from management to distribution. Even though they offer great incentive programs for their wholesalers they may not have the proper direction to sell the product efficiently. If the wholesaler is not promoting, sales in the area will be hurt.
Poor marketing can reduce the market share of a company by losing it to others in the industry. Management within the company can also be a problem that could effect future projects. If the management is not focused and on track the projects will not receive the results they expect. It is also important that they have people with the necessary skills to do the job. With out the proper input projects could be slowed down substantially. Research and development is also a key to an organizations success.
If the proper research is not done for a project they may go in with higher expectations and fail. There is also the possibility that equipment failure may come into play. If a project depends on a certain number of item and they cant produce it could cause the whole project to fail. A new project means new opportunities.
With the right approach and proper preparation a company could have a big opportunity to enter the market and maybe even dominate. Anheuser has an advantage when it considers new projects. They have the resources that it takes to succeed. They just have to use them in the proper situations. Right now Anheuser has a big opportunity to increase globally. The international market is four times the size of the U.
S. market. This allows them many chances to expand their market. With a bigger market it will also give Anheuser a chance to experiment with different product lines that may appeal to different market segments. The size of the international market may also be more likely to produce higher growth rates. With less restriction on trade barriers it gives a company a better chance to import products into a country.
It is a lot easier for a company who has the resources to enter new markets. Even with Anheuser's size they still will have threats when they enter new markets. They will have to compete against the existing companies that have already established themselves in the market. They could drive Anheuser out before they even get a chance to fight.
Competing in another country can be very expensive. Keeping costs down will be a problem that arises. They will have extra costs involved with oversees distribution or production. The costs will be absorbed in the price of the product. Lower priced alternatives would be able to compete and slow down their market growth. Foreign exchange rates will also have a big impact on operations in the international market.
They could cause a big loss in profits due to a shift in the rates. Increased barriers or government regulations could also prevent market penetration. Another possible source of threats could be the regulation of their ability to advertise and market their products the way they currently do. Problems Found in Situational Analysis Advertising is part of the complex process that shapes people's ideas about what is normal and right to think and do.
Alcohol advertising's most powerful role is in helping to sustain an environment in which drinking and heavy drinking are seen as normal activities. As many researchers have shown (Gerbner 1990), most alcohol advertising seeks to associate drinking with possessing desirable qualities or experiencing pleasurable sensations. Advertising attempts to make alcohol a pursuit of the good life, the American dream, proper masculinity, and other compelling themes in American culture. Recent literature reviews (Atkin 1993) state that a large body of research indicates that exposure to or awareness of advertising contributes to an increase in drinking. For example, Atkin et al. 1993 found that greater exposure to advertising stimulates drinking, excessive drinking, and drinking and driving (or riding with a driver who has been drinking). A recent study conducted by the Association for Consumer Research revealed a startling link between exposure to alcohol advertising and youth drinking, drinking by adults, and heavy drinking.
Using surveys from a national sample, the researchers found that: &# 61623; 31 % of respondents between the ages of 12 and 18 who had "high exposure" to liquor advertising reported having tried each of 11 brands of liquor listed in the survey questionnaire, compared to 15 % of those who had "low exposure" ("high" and "low exposure" are not defined in the article) &# 61623; 52 % of these respondents reported having tried each of six beer brands listed on the questionnaire, compared to 37 % of "low exposure" respondents &# 61623; 78 % of those with "high exposure" to alcohol advertising reported typically drinking at least one mixed drink per week, and 50 % report having at least one straight drink per week, compared with 51 % and 19 %, respectively, for those in the "low exposure" group &# 61623; 32 % of the "high exposure" group drink five or more beers per week, compared with 19 % of the "low exposure" group &# 61623; 11 % of college student respondents said that they had decided to have a beer and 1 % decided to have a drink of liquor after seeing an alcohol ad that day. Exposure to advertising is also associated with frequency of drinking: &# 61623; Respondents who have high exposure to ads report having an average of 4. 5 drinks when they go to a party or bar, compared to 2. 9 for those with low exposure. Asserting that "there is little doubt that alcohol advertising exerts an influence on the frequency and quantity of adult alcohol consumption, " the researchers estimate that people consume between 10 % and 30 % more alcohol after seeing alcohol ads than if they saw none. The report also presents data on brand awareness and preference, attitudes toward drinking, and responses to selected advertisements (Atkin 93). The findings are based on survey and experimental research with a sample of 1, 227 people of "diverse backgrounds from different regions of the country" conducted in 1992 - 93. Strategic Alternatives for Solving Problem Description of Strategic Alternative One It is clear that alcohol advertising has very serious detrimental effects on its target audience.
While advertising is an integral part in every organizations ability to market its products, we need to be more conscious of the message that is being sent out to potential consumers of alcohol. While the current ads are very effective in marketing alcohol, they need to focus more on the product and less on the lifestyle. There also needs to be defined limits on how much advertising can be done, where it can be done, as well as what time the ads can be run, ultimately avoiding the underage and underprivileged audience. Also, there needs to be a clear message of drinking responsibly in every single ad that markets alcohol. For this to be done fairly and effectively, it should be the responsibility of a government body to impose these new regulations.
That way the same rule would be applied to all alcohol brewing companies. In addition to regulating the advertising of alcohol, tax deductions allowed to businesses for advertising need to be taken away from producers of products that have the potential to harm its consumers. In a study based on data from the 75 top television markets in the U. S. from 1986 to 1989, Safe argues that increased advertising leads to increased consumption which, in turn, results in increased motor vehicle deaths.
He estimates that eliminating the tax deduction for alcohol advertising would reduce alcohol advertising by 15 %, resulting in 1, 300 fewer motor vehicle deaths per year. The obvious benefits of a controlled advertising campaign would be a more accurate targeting of the legal drinking market, a less distorted image of what the product will do for its consumer, and fewer alcohol related injuries and violence. Budweiser has been an innovator in the area of responsible advertising. While they are still not perfect, they have taken steps to encourage responsibility when drinking. Actions like those are what helped many believe that Budweiser is a responsible corporate citizen, in turn, making consumers feel better about buying Bud products. The cost of regulated advertising will be a reduction in sales.
To offset the loss in revenue, Anheuser-Busch could look into foreign markets, as well as creating new product lines that could compliment their current line but not contribute to its consumption. By looking at the big picture though, a more responsible advertising campaign would limit Buds liability in lawsuits and other litigation that would involve over-consumption. Description of Strategic Alternative Two The alternative to limiting advertising would be to eliminate alcohol-related advertising all together. In this case, the products could only be advertised directly where they are sold. Grocery stores would only have advertisements in the liquor department, sporting events would rely strictly on the mobile beer vendors, and other venues could only advertise in the actual beer garden. Clearly, a reduction in consumption would be attributed to this type of, Out of site, out of mind campaign.
Without the constant bombardment from advertisers, people might actually choose an alternative to consuming alcohol. The cost of eliminating advertising will be a reduction in sales. To offset the loss in revenue, Anheuser-Busch could look into foreign markets, as well as creating new product lines that could compliment their current line but not contribute to its consumption. Selection of Strategic Alternative and Implementation Regulated advertising would be the best strategy for all parties involved. Justification for Selection of Strategy While regulated advertising wouldnt reduce alcohol consumption the most, it would allow consumers make decisions without the usual bombardment associated with current alcohol advertising. Given the opportunity to make a clear decision, I believe consumers would make more appropriate decisions, as well as benefit from the message of drinking more responsibly.
This would also be the most favorable strategy from Anheuser-Busch's point of view. Completely banning alcohol advertising would infringe on some of their basic rights. Description of Implementation of Strategy To implement this strategy, it would take the support of a government agencies like the FTC, FDA, or FCC. It would be their responsibility to set guidelines for each company to abide by. They would then need to monitor those advertising activities to ensure complete compliance with the regulations. 1999 Annual Report, Anheuser-Busch Companies Anheuser-Busch Announces Record Sales and Earnings for the Fourth Quarter and Full Year 1999; Worldwide A-B Brand Shipments Exceed 100 Million Barrels.
Business Wire, 2 / 2 / 2000. Online. Electric Library. Atkin, C. K. , The Role of Alcohol Advertising in Excessive and Hazardous Drinking. Journal of Drug Education 1993, p. 313 - 325 Best, Kathleen.
Simon Wants Warning on Liquor Ads. St. Louis Post-Dispatch 3 / 31 / 93, p. 15 A. Online. Electric Library.
Fox, Richard J. ; Krugman, Dean M. ; Fletcher, James E. ; Fischer, Paul M. , Adolescents attention to beer and cigarette print ads and associated product warnings. Journal of Advertising, 9 / 22 / 98. vol. 27. p. 57.
Online. Electric Library. Gerbner, G. , Stories That Hurt. Journal for Substance Abuse Prevention, 1990, p. 53 - 57 Suffers, H. , Alcohol Advertising and Motor Vehicle Fatalities. Review of Economics and Statistics. 1993, p. 431 - 442 Sellers, Patricia. Selling: How Busch Wins in a Doggy Market.
Fortune Magazine, 6 / 22 / 87, p. 99. Electric Library. Tax and Sin in Moderation. St. Louis Post-Dispatch 2 / 26 / 98. Electric Library.
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Research essay sample on Anheuser Busch Alcohol Advertising
