AB InBev as a parent brand for its beers

AB InBev, the global brewery that owns many of the world’s most famous beer brands, has decided that it will keep that name even after it purchases SABMiller.

Is that a good idea? My answer: It doesn’t matter.

AB InBev
AB InBev keeping its name is only important if it invests in the name.

Brand naming is an important process in gaining preference but, in this case, the name AB InBev is only as important to its beer brands as P&G is to its products. That is, consumers don’t even know the parent brand name and preference, if there is any, comes from the individual beer brands themselves.

AB InBev owns Budweiser, Corona, Stella Artois and many others, and you’d be hard pressed to find drinkers of those beers who know the name AB InBev. It’s the same thing with SABMiller. Consumers know all the Miller beers, plus Henry Weinhard and Fosters. But SABMiller? Not a chance.

The AB InBev brand structure is not for everybody.

It should be noted, however, that this is a very inefficient way to build a brand. For one thing, it’s extremely costly. Being a house of brands means you have to invest in each product like it is its own entity. There’s no relationship between, let’s say, Budweiser and Corona. They each have their own unique brands that have to create preference by themselves.

Most companies do not have the cash to do that. If you are a medical device company, for instance, giving each of your products its own unique brand name – instead of a descriptive one – means your parent brand does little to affect market share. Without the cash of a P&G, you don’t even create preference for those products.

Yet, it’s a parent brand that presents the easier path to preference. P&G has put some effort into highlighting the parent brand but it’s being half pregnant. The P&G brand, whatever it means, doesn’t really help Tide or Febreze.

It’s important for CEOs to remember that, if you have a powerful umbrella brand, then the success of one product lifts the preference of the rest.

So, is AB InBev keeping its name a good thing? It won’t matter until it invests in the parent brand.

Budweiser America is a cynical play

Beer drinkers, are you ready to drink some America? (I’ll wait until you mull that over.)

Yes, the Budweiser America campaign will be in full swing this summer, beginning later this month. Budweiser is changing the name of its brand to America through November’s elections.

Budweiser America
Why is the Budweiser America campaign even needed?

Sounds like a great pairing of brands, right? Not so fast. In fact, it’s a cynical, barely concealed move by a brand that is going the redundant route. Budweiser doesn’t need to be called America because, even though a Belgium brewery now owns it, the brand already means America. Doing this is like Apple changing its name to Innovation.

There’s a great deal of desperation within the Budweiser America campaign as beer sales of the major brands across the industry are dropping. The craft beers are eating market share and more drinkers are turning to wine and spirits. The major beer brands are beginning to feel they are becoming less relevant.

What the Budweiser America campaign does to the brand.

But Budweiser is still the market leader, especially its Bud Light brand, and those who prefer Bud are very loyal to the brand. You can ask a craft beer drinker what they want and they’ll ask, “Whadda got?” Ask a Bud drinker and they’ll say, “I’ll have a Bud.”

The underlying reason why Budweiser has been one of America’s strongest brands is because it is enthused with so much Americana without having to changes it name. Budweiser has already meant America.

What this demonstrates is that those at InBev (the Belgium company that owns Budweiser, along with Corona and Stella Artois) have little faith in the brand as it now stands.

Which is weird. Corona and Stella Artois are also powerful beer brands so you would think that InBev would have a great understanding of what makes brands work. The naked Budweiser America campaign is cynical because it suggests Americans will wake up and go, “Oh. Budweiser is for Americans. I never knew that.”

The campaign shows a complete misunderstanding of the power of the Budweiser brand itself. Maybe InBev doesn’t understand brand as well as we all thought.

Feliz Navidad to Corona

The holidays are often ripe for advertisers to trot out their old equity markers, such as Coca-Cola and Santa Claus.

Few are stronger than Corona and its simple but effective Oh Tannepalm spot.

Corona
This Corona spot is an equity marker itself.

This will be the 25th straight year that Corona will air the spot, which depicts a tropical night with one palm tree lighting up with Christmas lights, the song Oh Tannenbaum being whistled and viewers being wished Feliz Navidad.

The spot has become as iconic as other Christmas spots, such as the appearances of the Clydesdale horses in Budweiser ads.

The Corona spot serves as its own equity marker.

Equity markers are powerful things Think Cinderella’s castle for Disney. But what makes the Corona Oh Tannepalm spot work so well is that the ad itself is the equity marker.

How is that? Because no beer in the US marketplace does a better job of understanding its brand and how it is different than the competition than Corona. The Oh Tannepalm spot perfectly crystalizes that.

We have worked with many beers over the years and have done our fair share of beer market studies. The beer producers often end up mimicking each other in an attempt to steal market share, like those in many other markets.

This is especially true of the larger American lagers, which always seem to be in a race to copy the market leader, Budweiser.

But that approach has come back to bite those lagers in the arse. Beer drinkers have generally become more sophisticated and younger, leading to the rise of craft beers.

The problem with the individual craft beer brands, though, is that the typical microbrew drinker is a fickle beast. He (or she) often looks for what’s new, rather than being loyal to one specific brand.

That’s what makes Corona so special. It has a loyal fan base, remaining the most popular imported beer because it has clearly established who it is for and not for.

Corona is for those who just like to kick back like they are on a beach, even if they are holed up somewhere where it’s not exactly balmy. No one in the category can claim that space because Corona already owns it.

So, Feliz Navidad to you, Corona. Keep the Oh Tannepalm spot running every Christmas.

Beer Marketing and Differentiation

Beer Marketing — Growing Beer Market Share

Introduction

Beer marketingThe following glance at beer marketing will give you a quick peak into how Stealing Share operates and finds solutions. Of course, no branding project would be complete without market research and all too often beer marketing lacks valuable research. This is just a cursory analysis. But it suggests a brand position that beer brands could use to steal share based on our own experience and expertise in branding beers. If your brand needs to steal share, feel free to email us or call us.

Commercials

Keeping the advertising in mind for all of beer marketing is important because to be successful in stealing market share your brand needs to be both different and better. So try to keep in mind all the beer ads you’ve ever seen (COORS, Budweiser, Michelob, Miller, MGD, Corona, Beck’s, Heineken, Red Stripe, Bud Light, Sam Adams, Amstel Light and Coors Light — for example). (You can view many of the category commercials here in our beer market study). Take a look before going on with this article.

It’s important to start by briefly describing the personality, position and promise of each of the brands. Here is a short example of just a few US domestic brands.

Brand Personality Position Promise
Budweiser Confident. Hip. King of beers “I get it.”
Miller Lite Hip. Youthful. Beer for friends It’s the experience.
Coors Lite Hip (a bit sophomoric) Cold. From the Rockies. Everyman Beer.
MGD Cool. Aloof. Genuine Seize the day.
Miller High Life Knowable The High Life Everything in perspective.
Coors Real Legendary Be an original.
Michelob Cool. Knowing. Tastes Imported Taste

 

Possible Meanings

Beer Marketing Positions
There are many possible positions. The goal is to find the one with the highest emotional intensity.

We considered the positions that a beer brand could take based on the advertising when mapping out the beer landscape with the goal to create meaningful beer marketing messages. Of course that assumes that the advertisers know what they are trying to convey – and THAT is a frightening assumption. Remember, for a brand position to have any meaning there must be an opposite position that a brand could chose for any of the positions to have true meaning to the customer. For example, “Best” is not a brand position because no one would claim “worst.” “Best” simply isn’t believable to the customer. But someone may claim the “intimate” position because a competitor could claim “casual.” That would be believable because it’s positioned against another’s positioning. Below are some possible positions a beer could choose:

Rules of Positioning

The following rules are helpful when selecting a beer marketing position to steal share in your market.

  1. Thrust:
    The positioning must demonstrate an active competitive advantage. This advantage answers the question of “why should I care” from the perspective of the consumer.
  2. Beer Marketing
    Strategy has rules

    Gravity:
    The positioning must have a powerful relevance to the target audience and their interest and receptiveness must be peaked.

  3. Definition:
    The positioning must be distinctive. It must set the brand apart from the competition.
  4. Density:
    The positioning must be single minded. It must have clarity and simplicity and must illuminate the target’s main precept.
  5. Synthesis:
    The positioning must be fused together in an emotional bond with the target audience. It must grab them in the gut.
  6. Integrity:
    The positioning must be believable. If the message raises suspicion – even if it is true – barriers are raised.
  7. Precision:
    The positioning must speak to the target that is best positioned to influence consumption or to consume that product or service.
  8. Convergence:
    The positioning must convey the same positioning message in all of the ways in which the consumer has of touching the brand.
  9. Momentum:
    The present positioning must build upon (but never mimic) the equity (if any) of past communications to leverage any residual positioning equity.
  10. Acceleration:
    The positioning must keep pace with the changing markets to evolve constantly making itself increasingly effective each day.

Beer Marketing and the Current Market

Next, we map out graphically how the major beer brands see themselves to check if there’s a position ready for the taking. This is an important exercise in developing beer marketing messages and beer brand positions.

Beer Marketing
Today the market is divided mostly by origin and price point.

Beer Marketing
Most microbrews define themselves by their origins or styles

Beer Marketing
To be fair, all the beers brands could be positioned one on top of the other as there is little differentiation

Beer Marketing Summary

All the major domestic beers are, by and large, competing for the same audience with vastly similar messaging. The market skews towards masculine-bawdy. Where are the beer marketing differences? How are they being delivered?

Quality, distinctive taste and better beer belongs to the imports and the micro-brews with some spillover into the specialty mass brews of Killians, Red Dog Blue Moon and the like.

Therefore, to claim a position as the superior tasting beer is in violation of rule 7 (integrity). It simply is not believable.

Like most mature markets, the beer marketing messages need to trade off personality and brand image rather than product benefit. After all, no one prefers a beer that they do not like. Taste or even a promise of better taste is not an effective lever to take market share.

Inside-out and Outside-in

Let’s dig deeper to accurately find positions that have the most meaning to customers and provide a market opportunity. Think about beer marketing from an inside-out perspective (how the beer brand presents itself) and an outside-in prospect perspective (how the customer feels about the brand).

Beer Marketing Implications

The most successful and powerful beer advertising of the past 10 years has toyed with this position. Bud’s anthemic “This Bud’s for you” and the original “Miller Time” campaign from years back found home in this quadrant. In today’s market, the closest player to this position is Corona, which has been one of the strongest and fastest growing beers in the import market.

Behavior Modeling Analysis

beerpres_b42_355To ensure that this beer marketing position has true and important meaning to the audience, we thought through the process (what it is customers think beer does), purpose (what the result of that process is) and the precept (what are the fundamental beliefs of the audiences that leads them to think that is the process). That brings us to the ruling precepts that are the most basic and critical precepts that motivate this audience. As you can see, a brand that fits into the sophisticated/intimate/confident position will appeal to this market ? and steal market share.

From our Behavior Modeling (Read more about it here) analysis we came up with the following precepts that support our market audit.

The Beer Marketing Prime Position

X beer is an authentic great tasting American beer for those of us that don’t need to follow the crowd.

Beer Opportunity.001

“This is the confident beer for those of us who know exactly where we stand. Some things in the world simply need no explanations. Good judgment has great rewards. Discriminating and smart enough to avoid trends and ads. Nourishes the spirit without pretense.”

Preference. It’s amazingly flawed.

Why your preference is misguided

Preference in blindfolded tests
Blindfolds often reveal truths

A Bud Lite drinker once told me that Miller or Coors “would not cross these lips unless they were cold, blue and dead.” He had unshakable preference. I asked him why he hated the other lagers so much and he said “they taste like raccoon urine.”

I asked a large assembly of bankers once if they felt like they were much affected by brand in their preferences. About two-third raised their hands to let me know that brand had no influence on their purchase decisions. Budweiser preferenceI then asked a few of the brand deniers what brand of mayonnaise they had in the refrigerator. To a person, they all responded, “Well, Hellman’s of course.” By a show of hands, almost three-quarters of the group who said they were not influenced by brands admitted that they too had Hellman’s mayonnaise in their fridge. So much for brand having no influence on decisions.

For those of you who are thinking that Hellman’s just tastes better, I have a few facts to share with you that might just surprise you.

Remember the Bud Lite drinker I mentioned earlier. In blind taste tests with hundreds of subjects, beyond the normal distribution of randomness, no one, NO ONE could tell the difference between Bud Lite and its light beer competitors. But it gets worse.

Preference is not a reliable barometer of goodness.Preferences

If you are over the age of 71, in blind taste tests (blindfolded), you can’t tell the difference in taste between Coca-cola and…  7-Up. (Read my article on what happened to 7 Up here) That’s right. They taste the same to you. This is not because human taste buds die at age 71, the age is simply a dividing line between those that grew up on soft drinks and those that did not.

Preference in sodaAs most of you reading this are under the age of 71, I challenge you to do this. Buy either Coke or Pepsi (I don’t care which one but they must not be a diet version) and a non-diet can or bottle of 7-Up.  Have your significant other blindfold you and pour some of each into identical glasses. Then take the blind taste test. Will you be able to tell the difference? Probably. But, you will be shocked at how similar they taste. If it weren’t for a hint of lemon/lime scent from the 7-Up, you would find them identical. The reason is that the predominant flavor exciter is sugar.

I share all this with you because none of us do blind taste tests to choose the things we prefer. Have you ever made two batches of potato salad, one with Hellman’s mayo and another with the store brand? Have you ever compared the side-by-side results of two batches of laundry cleaned with your preferred laundry soap and that of a competitor? I think you get my point. If things that seem so different as Coke and 7-up can be confused, imaging how much of our lives are directed from perceived differences that have nothing to do with rational reasons.

Preference is confusing
Brand prejudice is a reasonable thing

Purchase decisions, ALL PURCHASE decisions are emotional decisions. We perceive the differences that we anticipate and we reinforce our past decisions with over stated differences and inflated preference memories.

This is not a damnation of human behavior. Brand loyalty is a needed and necessary means of simplifying our lives. We place trust in our preferences because it allows us to live in the crowded and loud world we find ourselves in today. Having to make a continual series of rational choices would be exhausting to us. Prejudice, in terms of making sense of our consumer world, is not only a good thing but it is a necessary thing.

So I leave you with one more example. Can you imagine your misfortune to be a child of a brand strategist like myself? When my kids were young, I blindfolded the lot of them and gave them a choice of Nestle’s Quick in whole milk and the same whole milk with confectioner’s sugar. Sure enough, my hapless guinea pigs could not tell the difference.

(Read an article on motivations and brand preference here)