a. Are there segments that have been neglected by Anheuser-Busch? b. Is there a segment that is not fully developed yet, or does not reflect Anheuser-Busch’s industry leadership? c. Should the company develop new products to cater to these segments?

Question

What will be an ideal response?

Answer 1

A-B’s success proves that a lot of people have been reached, but still there are consumer groups and market niches that have not been reached and need to be studied in more detail.
The ethnic groups living in the United States have not been targeted properly as a market segment. But it appears that this segment is becoming more and more important. The United States has a great variety of ethnic groups, which are large enough to be addressed as unique segments. A-B has not made adequate efforts to serve ethnic segments. For example, they just use a Spanish advertising agency to promote Michelob in the Hispanic market. But this is not enough. The competition is already active and is trying to find market niches (e.g., Coors uses actors with Hispanic background for its commercials). There are also several other possible target groups: Blacks,
Asians, etc.
Women as a target group also have been neglected by A-B. Their beer consumption has increased significantly.
The immense growth of the light beer segment can be partly explained by women’s preference for beer with fewer calories and less alcohol. A-B could aim at this group, either by marketing a new product or by emphasizing women with one of its existing brands. A new product, however, might be more promising in order to create a different kind of image.
Another growing segment that has not been regarded as important is the segment of senior citizens. This segment shows a strong demographic growth and has hardly been approached by any beer company. One difficulty might be that older people are more brand-loyal. But along with their growing age, they are more likely to become
more health-conscious. For this reason, they could be convinced that a lighter, healthier beer is more desirable.
Miller has taken steps toward targeting this segment with Miller Lite. A-B should not allow the competition to dominate this important segment.
As discussed above, A-B is represented in all major segments of the beer market. However, Miller has been able to gain a leadership position in the light beer segment, which has had an immense growth since the 1970s. In 1992, 60 percent of this segment was controlled by Miller. Bud Light met unexpected success when it was introduced in 1982 because A-B targeted it toward a different consumer group from that of Miller. But the mid-priced Natural Light was not widely accepted by the market. A-B should not let Miller maintain its advantage in the light beer segment. If A-B wants to remain the industry leader, it should avoid being challenged by Miller in the light beer market, a growing segment. The development of new products could give A-B a strong competitive edge over its competitors.
An emerging product might be 3.2 beer. This kind of beer has less alcohol and fewer calories than regular beer. It could be targeted at a consumer group that does not yet belong to the common beer-drinker group. The only problem is the possible impact on the light beer segment. There might be some overlaps because light beer also targets beer drinkers who prefer less alcohol and fewer calories. But if A-B does not cater to the 3.2 beer segment, one of its competitors will position itself in this segment. In order to maintain its leadership position, A-B should preempt its competitors.