The Duality of Beer Marketing: Marketing to Businesses and Consumers - Term Paper Example

? The Duality of Beer Marketing: Marketing to Consumers and Businesses BY YOU YOUR SCHOOL INFO HERE HERE The Duality of Beer Marketing: Marketing to Businesses and Consumers Introduction The beer industry is complex and dynamic, a business environment characterized by significance in marketing to outperform larger and smaller beer brands both domestic and international. Product differentiation is a considerable source of marketing advantage in most industries, however beer producers such as In-Bev and Miller-Coors maintain products with like product composition, especially as it pertains to the light beer product line. Traditional marketing practices, involving the standard Four P’s of marketing, are sources of competitive strength with a particular emphasis in this industry on the promotional aspect of marketing. Diverse buyer segments and inability to differentiate product highlights the methodology by which major beer producers focus on brand establishment with consumers and businesses. The complexity of target consumers desired by large beer producers is too difficult to express substantially, as each brand in major beer producer product lines looks to target based on lifestyle, needs fulfillment, resource procurement, or other psychographic attributes known in key market segments. Consolidation of distribution practices, as one example, is generally done in this industry as a matter of cost reduction or cost improvement, marking the dynamics of the business-to-business marketing environment. Establishing a brand relationship with the business environment requires staying dedicated to logo presentation and utilizing a significant merchandising effort such as POP or distribution of free consumer promotional merchandise. This report took a qualitative approach to identifying the duality of beer marketing in this industry, focusing on consumer-based attributes and the B2B environment. Many of the competitive tools utilized by major beer producers are not highly publicized, likely as a product of the powerful reliance in this industry on promotion. However, there is substantial research evidence that it is the market itself that creates the necessity to segregate consumer marketing from business marketing to maintain competitive edge. The goal of major beer producers is to link brand professionalism or exploit brand equity with business customers while establishing connective consumer relationships as brand-building focus in this dimension of marketing. The Consumer Marketing Environment Michael Porter’s Five Forces Model of business describes the various externalized threats that impact successful business strategy. This industry is characterized by consumer buying power on the market as there are considerable threats of substitutes. Guinness, as one relevant example, understands that its product composition is unique with diverse and differentiated flavor. Guinness is one of the only beer brands on the market that can rely on its product attributes to reduce consumer brand switching costs, thus threat of substitutes is minimized as compared to such brands as Miller Lite or Budweiser from In-Bev. Because of differentiation, Guinness maintains concerns over alcohol as substitutes (Oboulo, 2011), allowing Guinness to promote a certain consumer premium perception. Why is this necessarily relevant? It is necessary to understand the dynamics of the industry in order to illustrate the duality of beer marketing between major competition. Guinness is not as heavily driven by consumer sentiment on the market, having established differentiated brands of beer products. Guinness can then rely on brand equity in marketing strategy to achieve effective profitability with key markets. On the other hand, companies like Miller or In-Bev are concerned with customer relationship management and establishing lifestyle-focused principles in marketing to gain consumer attention and, ultimately, long-term loyalty. An inability to differentiate by product for the majority of producers strongly dictates the standard by which marketing strategies are developed and implemented. One should consider the many different aspects of consumer beer marketing that are influenced by externalized market conditions. Major beer producers have developed codes of commercial communications that dictate the ethical standards of integrated marketing communications. AB In-Bev outlines that no promotional materials should contain explicit messages that point toward creating consumer inferences that products will enhance sexual experiences (AB In-Bev, 2010). Herein creates a certain limitation with beer brands that are dedicated to lifestyle-focused promotions as the social stereotypes associated with beer consumption and lifestyle excitement are widespread. Adhering to a code of ethical communications limits the potential to position the beer brand. This is where the duality of beer marketing exists: Major beer producers must devote considerable capital investment into marketing, with an emphasis on promotion, which is geared toward lifestyle (psychographics). Take, for example, Miller Lite. This particular beer brand relies heavily on merchandising and brand equity to gain market share and attention in key markets. Figure 1 illustrates a typical promotional activity distributed within a lifestyle-relevant marketplace. As illustrated, this marketing strategy tends to speak for itself, with considerable emotional appeal associated with consumer lifestyle. Figure 1: Miller Lite Consumer Promotion Source: http://www.tbseblog.com/2011/04/29/beer-i-had-this-week-miller-lite/ This type of promotional activity as highlighted in Figure 1 represents beer marketing duality, imposed by ethical codes of marketing communications, consumer sentiment, and concerns over potential product/brand substitutions in key target demographics. In important sales environments where Miller Lite is being consumed regularly, energetic and vigorous representatives of the beer brand create a brand experience indulged by attractive endorsers. However, the beer brands are illustrating their emphases and concern over corporate social responsibility in a variety of different campaigns designed to reduce over-consumption or promote responsible drinking education. However, it is the endorsement potential for Miller Lite by outsourced spokespersons in a lifestyle environment that makes the final sale. It would be unfair to state qualitatively that the beer industry is an underground promotional opportunity, where sexually-based innuendos are understood by producer and consumer. However, the duality of approaches by beer companies attempting to circumvent certain ethical codes of communications are illustrated by blended innuendos supported by responsible business practice. Other like beer brands, such as Bud Light, take similar approaches to merchandising, using less-explicit sponsorship or endorsement to gain consumer attention and loyalty. However, the viability and functionality of the merchandise illustrates further emphasis and support for lifestyle-related promotional function. Figure 2: Bud Light Consumer Merchandising Source: http://www.kegworks.com/bud-light-round-pub-table-345-p175147 One might argue that the illustration in Figure 2 represents little duality, using non-explicit merchandising efforts to establish consumer connection while staying true to fundamentals of ethical business communications. Figure 3: Bud Light Lifestyle Advertising Source: http://www.bryanandrewruiz.com/blog/?p=1416 Figure three illustrates a liberal beer brand, focusing on gaining specific market attention. Duality in marketing is demonstrated by the amalgamation of different lifestyle characteristics of buyers, using promotion as differentiation tools while using merchandising to stay true to pre-established brand equity as with the production of relevant branded products outside of the beer line. Though Bud Light is not creating ethical conflictions associated with promotion, the external market conditions dictate regular duality in marketing approach that is unique by buyer niche, segment characteristics, and the relevancy of product or brand equity where products are consumed. Buttle (2007, p.3) defines customer relationship management as “a business strategy that maximizes profitability, revenue and customer satisfaction by organizing around customer segments, fostering behavior that satisfies.” For brands such as Bud Light and Miller Light, duality is a necessity to achieve this satisfaction as each buyer segment maintains different relationships with the beer brands in a wide variety of environments where the product is consumed socially or professionally. Duality is largely market and competition driven, but an absolute necessity to achieve integrated market reception toward the beer brand. Major beer producers understand the psychological and sociological constructs of consumer attitude and the importance of using credible celebrity endorsements. When a brand allows a consumer to seek self-expansion, they are more likely to gain long-term attachments which lead to brand loyalty (Zhang, Hong & Chan, 2009; Greenwald et al., 2002). At the same time, staying true to ethical communications philosophies means limited use of innuendos. Rather than create implied or perceived advertisement illustrating sexually-based scenarios or other morally-questionable tactics, attachments are then created by celebrity involvement, adding credibility to the beer brand by using attractive, experienced, or trustworthy endorsement (Pornpitakpan, 2003). In the consumer markets, the duality of beer marketing is relatively self-explanatory, but it does not appear to be a direct expectation of major beer companies. Market-driven conditions simply demand duality by blending integrated communications in a variety of forums and formats in order to gain attention of diverse consumers both domestic and international. Without this duality, the ability to expand brand equity and also create satisfied consumers would be limited by mundane promotional activities not relevant to the psychographic characteristics of buyers. In nearly every detail, the external market, ethical regulations, and complex consumer market segments are the foundation of beer marketing duality, but an absolute necessity to achieve competitive advantage in an environment where differentiation through product is limited to a select few makers. The Business Marketing Environment This was the most complicated environment for analysis, due to the aforementioned lack of research evidence illustrating business-to-business strategies for major beer producers. Likely, this is due to the highly competitive environment where proverbial competitive tit for tat occurs regularly. Recent mergers between major producers have streamlined or enhanced distribution potential, but largely as a product of simply more effective access to capital investment. Palino (2008) describes a much more professional approach to establishing relationships with important business customers. As with consumer marketing, brand equity through logo presentation on merchandising and promotional materials is important, but with much less emphasis on lifestyle- or emotion-based marketing practice. The logo is an important contextualization in business-to-business marketing in the beer industry. Miller Coors, as one example, distinguishes itself through logo, segregating the parent company from the individual brand product lines. Figure 4: Miller Coors Consumer/Business Market Segregation Source: Brand New. (2008). http://www.underconsideration.com/brandnew/archives/ a_glass_half_full.php SAB Miller strongly reinforces, “Expensive marketing does not necessarily equal effective marketing” (Bloomberg, 2010, p.1). Nowhere is this better illustrated than in the business-to-business market where less labor and capital investment is placed into promotional marketing. Other than merchandising in certain buyer segments (e.g. night clubs), the distinction between parent brand and individual brand illustrate duality in marketing between segregated consumer versus business marketing strategy. There is also much more emphasis on corporate social responsibility in the business-to-business market, influenced by corporate-driven regulations on ethical behavior and also the ability to effectively profit from such relationships with a variety of business customers. AB In-Bev, as one example, has actually trained approximately 160,000 bartenders, store clerks, and waiters across the country on responsible alcohol sales (AB In-Bev, 2012). During the first year of this particular campaign, the beer producer distributed ID-checking tools to business customers with a goal of training over one million by 2014 (AB In-Bev, 2012). There is a much more hands-on approach to marketing in the B2B environment, focusing on the constructs of ethical and moral programming which is suitable for professional business relationship development in most industries. Advertising expenditures for the business customer are considerably lower than for consumer marketing, due again to the constructs of the type of relationship that is most profitable for the beer producer. Suitable marketing focus is not as dependent on promotional investment and distribution than through various networking functions strongly associated with the important and segregated business brand. The business-to-business environment maintains much less dualism than that of consumer-focused marketing, as this would conflict establishing a singular message of corporate viability and parent brand importance in this marketplace. It would have been highly beneficial to the study if the specific dynamics and strategies of major beer producers were promoted in press releases or other published studies to offer more intensive insight into buyer strategies. However, it becomes necessary to infer a great deal of strategy without focusing specifically on cost advantages and other synergies achieved by large beer producers or recently-merged partners. Business customers are as widely diverse as within the consumer market in this industry, consisting of outlets and retail centers as well as establishments geared toward consumption within a consumer lifestyle activity. Each requires appropriate POP or important display merchandise, though produced for different intentions. It is not dualism in this particular business segment, rather it is coordinating communications to avoid overwhelming buyers with too many integrated concepts and straying from long-standing brand reputation illustrated by more professional renditions of the logo separate from consumer audiences. There is further very little research information available about the influence of regulatory forces that impede or improve business-to-business marketing, thus providing for many inferences about why certain aspects of marketing are considered viable business strategies. Anheuser-Busch has historically devoted $423 million to marketing strategies (Nelson, 2001), but there is little indication even in a variety of annual reports about how this expenditure is allocated between consumer and business marketing. One striking difference, however, from consumer marketing and business marketing focus is the interaction between executive management and the end buyer segments. Business customers are considered largely platforms for growth while consumers are considered the foundation of profitability. In this industry, it seems that the push and pull forces as it relates to supply and demand is equally split between business buyers and the beer industry, thus giving neither a strategic advantage. However, removing individual buyers from the distribution value chain would be considered an executive-level decision that impacts long-run growth expectations. Thus, it would not be favorable business strategy to publicize distribution reductions as those who relied on profitable supply relationships with the beer marketer would be treated like a commodity that can be divested or procured. There is a much more mathematical relationship with the business buyer closely related to strategic intention and management accounting backed by solid parent brand personality or professionalism. This lack of publicity about business-to-business strategy in the beer industry makes it difficult to illustrate both duality in marketing or to conceptualize why one strategy is chosen over another between different beer competitors. Channel system streamlining or improvement alters marketing strategy, but fails to paint a portrait of what is actually driving these decisions other than identifying profitable versus less-profitable markets that impede distribution costs or improve revenues. In any event, this environment is considerably different than the consumer market where consistency in strategy must be aligned with executive-mandated growth imperatives. Determining who is a valuable buyer and who conflicts the value and supply chains is a corporate-level imperative, dealing little with relationship development for long-term brand and buyer connection. The ethical expectations for corporate social responsibility are clearly evident in the business-to-business market as there is a great deal of emphasis and capital investment into socially responsible promotions that are distributed to consumers and business customers. However, the level to which these relationships are developed are related to geographics of bottlers, availability of distribution instruments, and a variety of factors not determined by market characteristics or attitudes related to the brand. Palino (2008, p.1) refers to this marketing relationship as “a tough line-up for a graphic story that relies on the subtleties of a multi-color environment.” The visual dimensions of brands seem to be viable tools for the business buyer resting on the laurels of established brand equity. It is only, however, through professional business development that long-standing buyer relationships are forged. A General Discussion of Findings and Limitations It is, perhaps, due to the limited publicity of the business-to-business research that identifying where duality exists becomes difficult. There is consistency in brand logo presentation and ensuring segregation from individual brand acknowledgement or brand recall which is vital in the consumer segments to attain competitiveness and profitability. Business buyers understand the complex lifestyle dynamics of the brand, which expands equity to include a variety of merchandising opportunities. In opposite accord, consumers are so widely diverse with multiple psycho-social characteristics in which dualism is simply a necessity of business practice both competitive and relationship-oriented. Responsible beer consumption is a considerable marketing tool that is rather unanimous between consumer and business buyer segments in this industry. It reflects the most noticeable correlation in beer marketing best practice where integrated strategies are possible. It was previously identified that there is a difficulty in establishing differentiation through tangible product benefits and composition, which requires more subtle advertising focus to make one competing brand more appealing to consumer segments. From a critical perspective, it may have initially been a minor bias or supposition that beer marketing in the consumer segments would be more consistent, following typical branding strategies to avoid overwhelming customers with too many distinct messages. However, the dispersal patterns (as well as differing lifestyles) mandate multiple strategies that, when merged together through an analytical approach, would appear largely dualist. Without, however, this dualism it would be largely ineffective to gain consumer market share and establish the type of brand equity associated with many larger and well-known beer brands. Consumers maintain much control over revenue growth even in much larger volume to the business buyer who represents, largely, just a single transaction leading to ultimate buyer connection and growth in market share. Conclusion This qualitative study based on evidence and supposition where appropriate due to limitations in research availability described the majority of dualism between ethics and innuendo. Self-restricting policies associated with ethical behaviors in communications drive this form of dualism where consumer attitudes dictate intimation or allusion in order to illustrate how the product can have tangible benefits to meet with consumer emotions and lifestyle attitudes. However, insinuations appear to be a part of a successful marketing model whereby competitive strategy has a limited life cycle before other competitors mimic or outperform a single competitive marketing strategy. Promotional function in the beer industry is substantial. It should be said that the dualist philosophy of beer marketing is driven by externalized factors, most largely noticeable in the consumer promotional category. This is the only market where allusion or cultural overtones and artifacts can be utilized successfully over time while trying to stay consistent to the main brand message or vision established. These are long-standing business brands with significant social and cultural characteristics, thus making business and consumer marketing considerably different than other industries with many new entrants or no solid brand recall. The extent to which brand equity or relationship blended with corporate social responsibility determines the extent of dualism in marketing in the beer industry. References AB In-Bev. (2010). Code of Commercial Communications, Retrieved October 1, 2012 from http://www.ab-inbev.com/pdf/CCC_guide_EN.pdf AB In-Bev. (2012). Responsible Drinking Goals on Third Annual Global Beer Responsible Day, Retrieved October 1, 2012 from http://www.ab-inbev.com/press_releases/hugin_pdf/529098.pdf Buttle, Francis. (2007). Customer Relationship Management: Concepts and Technologies, Oxford: Butterworth-Heinemann. Greenwald, A.G., Banaji, M.R., Rudman, L.A. et al. (2002). A Unified Theory of Implicit Attitudes, Stereotypes, Self-Esteem and Self-Concept, Psychological Review, 109(1), pp.3-25. Nelson, J.P. (2001). Alcohol Advertising and Advertising Bans: A Survey of Research Methods, Results, and Policy Implications, in M.R. Baye and J.P. Nelson (eds.), Advances in Applied Microeconomics: Advertising and Differentiated Products. Amsterdam Press. Oboulo. (2011). The Strategy Marketing of Guinness, Irish Beer, Retrieved October 2, 2012 from http://en.oboulo.com/the-strategy-marketing-of-guinness-irish-beer-81700.html Palino, Christian. (2008). A Glass Half Full, Retrieved October 1, 2012 from http://www.underconsideration.com/brandnew/archives/a_glass_half_full.php Pornpitakpan, Chanthika. (2003). Validity of the Celebrity Endorsers’ Credibility Scale: Evidence from Asians, Journal of Marketing Management, 19(1), pp.179-195. Zhang, Hong and Chan, Darius K. (2009). Self-Esteem as a Source of Evaluative Conditioning, European Journal of Social Psychology, 39(1), pp.1065-1074, Retrieved October 1, 2012 from www.proquest.com Read More