Budweiser – Market Penetration

In the fiercely competitive alcoholic drinks market, almost every brewer is on the look out for any opportunity to increase their sales – they are resorting to limited moves to such market penetration strategies, targeting existing markets and consumers.  Diageo, the distributor of Budweiser in Ireland, wishes to capitalise on the early summer in order to win market share.  The company has just launched an app for smartphones that measures the temperature across Ireland.  If the temperature in a given location exceeds 20°C, consumers in that area will receive a free drink from any 2,500 participating pubs.  See this video for a full description of how the service works.

Normally, various forms of price promotions – and any short-term adjustments to the marketing mix – are over-looked as trivial and insignificant.  This latest campaign, however, has more depth that your ordinary marketing stunt for several reasons.

Firstly, it is great to see a company that realises simply using web 2.0 or social media technology is no longer innovative: it is what you do with new technology that defines creative digital marketing.  Just about all of Budweiser’s competitors use the latest tech developments to enhance their marketing – I have previously written about Barcadi’s pit-falls here.  But this is a truly original idea.  And when something is new people want to share it with others; the whole benefit behind market penetration is to stimulate the market, which is best done through word-of-mouth.  Hence, consumers, and their friends who may have hitherto not tried the drink, will be closely watching the ‘Ice Cold Index’.

As soon as those temperatures rise enough, you can be sure everyone will be using all forms of instant and web messaging to spread the word.  This leads us to my second point: this simple move is effective enough to take advantage of external opportunities and mitigate any threats.  Any good marketing decision should involve a SWOT analysis – this is no exception.  The opportunity may be trivial – like the good weather – but the threats posed was much more serious.  Budweiser risks loosing significant market share over the summer, particularly in Ireland, where the warm weather is traditionally greeted with a cold glass of Cider or Pimm’s.  Therefore, Budweiser is effectively directly competing with these summer time market leaders with what is known as a market challenger strategy.

And what is the best way to compete?  Turn your weaknesses into strengths – this is the other benefit of doing a SWOT analysis and the third and final reason why Diageo’s strategy is more clever than your average promotion.  The Budweiser brand has been repositioned for the summer – away from its irrelevant American heritage to be more lifestyle and ‘feel-good’ focused.  Consumers see brands as an extension of themselves, and the summer this what they aspire to be.

Of course, however, it is hard to say whether or not this will have any long-term effect.  Yes, they can encourage people to try Budweiser, but can Irish drinkers really be torn away from their favourite drinks for good?  Thus, there is a degree of risk with even the simplest of marketing penetration strategies.  Now that I think about risk, surely the biggest risk – and the most likely to happen – is simply the weather turns bad and no one even gets to try a free Budweiser…

© Joshua Blatchford, author of Manifested Marketing, 02/05/2011

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1 Comment

  1. Mon

     /  May 11, 2011

    Global warming with benefits.
    Nice post, totally agree with the risks you posed.


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