04 January 2006

A-B Ends Busch Series sponsorship

As Budweiser sales fall, Anheuser-Busch has decided to stop sponsoring NASCAR's Busch series. Saying that they are diluting their marketing efforts, moving consumers from Bud to Busch.

The big breweries need to take a lesson from Big Tobacco. Back in the 90s, as Tobacco Companies increased prices on their major brands, cigarettes sold at two price points: Premium and generic. By the mid 90s, B&W had driven the sub-generic market, and PM and RJR were producing private label brands for large chains as sub-sub-generic prices. Marlboro noticed that their profits were being impacted, and cut prices on their premium line causing pandemonium in the marketplace as their competitors scrambled to match them. To prevent slippage of all-important market share, A-B had to sell premium and generic beers.

Competing in both markets is a bad idea, and it will eventually impact your premium line.


posted by hiikeeba at 08:34


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