How does Budweiser price their beer?

[speeder]

Really random, weird question, I know. I'm trying to help a friend who's taking a business class and they are studying Budweiser as a business. He is tasked with finding the answer to this question. Of course I have no idea where to turn except for the deep well of random knowledge that is PPOT.

How does Bud, (or any other huge corp that produces something basically identical to other huge corporations), price their product? Without colluding with the competition?

Sorry for the stupidity of this question. I was a liberal arts major.

[Rick Lee]

I don't know for sure, but I think, whatever a case of Bud costs, 5% of that is for production, bottling and dist. and the other 95% is for marketing. It's the worst beer in the world, but they sell a lot of it.

[trekkor]

Originally Posted by Rick Lee

It's the worst beer in the world, but they sell a lot of it.

How can this be?

If it were "the worst", they would sell very little and go right out of business...



KT

[Rick Lee]

Originally Posted by trekkor

How can this be?

If it were "the worst", they would sell very little and go right out of business...

For the same reason the guy who invented the Pet Rock is a millionaire. Americans will buy anything if marketed correctly, no matter the quality. You don't see Bud sold anywhere in Europe except in American PXs or in American-themed novelty bars.

[billybek]

Originally Posted by Rick Lee

For the same reason the guy who invented the Pet Rock is a millionaire. Americans will buy anything if marketed correctly, no matter the quality. You don't see Bud sold anywhere in Europe except in American PXs or in American-themed novelty bars.

I actually saw Budwiser on tap at many pubs within London last summer.

Lots of great beers over there, but if I was hot and thirsty coming into a pub I would order a Peroni or a Stella.

A product is worth what ever someone will pay for it...

[Schumi]

When simple explanations do easily present themselves, turn to math.

Look at the prices of a lot of the other domestic pilsners - not craft brew IPA's or lagers... just the good 'ole american pilsners- Coors & Coors Light. Milwaukee's Best. Old Milwaukee. Miller High Life. Miller Genuine Draft. Pabst Blue Ribbon.

Price all those beers in 6-pack, 12 pack, and 24/30 variety. Then price them versus Budweiser.

Bud is continuously priced slightly higher than most of it's competitors, and gets away with this due to it's name. It is easily the most identifiable beer. When people walk into a crowded bar and the bartender yells 'what will it be?' and you aren't sure yet, but have to give an order quick before he moves on to someone else, what do most people in this country yell? "Bud light". Many times they don't even want a bud light, but it is what rolls of the tongue. Has happened to me a few times.


For home however, I however don't like paying the slight premium for Budweiser/Bud Light considering I find it no better than any other american pilsner.

So I stick to a circulation of PBR and High Life.

Although... the one Budweiser I will pay for is Bud Light Lime. Nothing is more refreshing than that beer for me when it's hot outside.

[biosurfer1]

Damn, this question would have been perfect for my best friends dad. He was the controller for Budweiser for 32 years...he died last year. He would have loved to talk more about this, a numbers guy through and through.

[Racerbvd]

Originally Posted by trekkor

How can this be?

If it were "the worst", they would sell very little and go right out of business...



KT

The same reason motor m & auto a are still in business..

[RWebb]

it is one of the best of the worst beers - Rick has obviously never had Buckhorn Beer

also, you need add a cent or two for the synthetic chemicals the dump into it that give people splitting headaches

it DOES kill slugs tho!

[Baz]

What is wrong with the pet rock?

Talk about cool....

[MBAtarga]

Originally Posted by Rick Lee

I don't know for sure, but I think, whatever a case of Bud costs, 5% of that is for production, bottling and dist. and the other 95% is for marketing.

Several year ago - I heard 6 cents per six pack goes towards the actual beer. The rest is packaging, distribution and marketing.

[Rusty Heap]

Actual a college case study of mine, and this is back in 1985, was that their advertising budget was 250+ million a year............and that was a longggggggg time ago.

[Rick Lee]

I had a job after college monitoring the air in an asbestos abatement site in the AB brewery in Newark, NJ. If you've ever driven to/fro the airport at night, you've seen the neon. I remember seeing a sign there about the monthly allowance for employees and there was a loading dock for it, suggesting each employee got enough free beer per month to need to pick it up at a loading dock.

[biosurfer1]

Originally Posted by Rusty Heap

Actual a college case study of mine, and this is back in 1985, was that their advertising budget was 250+ million a year............and that was a longggggggg time ago.

That was along time ago, last I heard from my buddies dad it was well into the billions now. Do you EVER see any type of sporting event (that allows beer sponsors) that Bud isn't a sponsor of?

[Rick Lee]

Remember back when Budweiser was sponsoring the Rolling Stones' Steel Wheels and Voodoo Lounge tours? I worked security at one of the Steel Wheels shows, was backstage, got to watch soundcheck, all the behind the scenes stuff. Bud ads were everywhere, even on the concert shirt I got. But they had one of those hard plastic tool carts stuffed with ice and bottles of Beck's wheeled onto the stage.

[herr_oberst]

Just two big breweries left these days (there were over 90 in 1947)

I would imagine there would be some collusion to determine pricing....

[Pazuzu]

Originally Posted by Rick Lee

For the same reason the guy who invented the Pet Rock is a millionaire. Americans will buy anything if marketed correctly, no matter the quality. You don't see Bud sold anywhere in Europe except in American PXs or in American-themed novelty bars.

In college every Brit and Euro exchange student drank the living hell out of Bud, and even now, all of the Ex-pats I know here in town drink Bud Light at the pub.

Does Bud suck? Hell yes. Does the rest of the world love it as much as the USA does? Hell yes.

[Rick Lee]

I've never been to the UK. But when I lived in Germany in 1988 and 1991-92, Bud was not available anywhere but on a US PX. As you probably know, they drink the real Budweiser from the Czech Republic there. In China anything western is trendy, regardless of quality. Though I did get forced to drink Bud there to be polite to some in-laws. And they get a far better quality Bud there than we get here.

As for Euro folks drinking Bud here, it's not like they have a lot of knowledge about the other choices. I've never seen Stella, Sam's, Coors, Corona, etc. in Germany. Obviously, Bud is the name everyone else knows, so that's what they order when they get here.

[Pazuzu]

Originally Posted by Rick Lee

I've never been to the UK. But when I lived in Germany in 1988 and 1991-92, Bud was not available anywhere but on a US PX. As you probably know, they drink the real Budweiser from the Czech Republic there. In China anything western is trendy, regardless of quality. Though I did get forced to drink Bud there to be polite to some in-laws. And they get a far better quality Bud there than we get here.

As for Euro folks drinking Bud here, it's not like they have a lot of knowledge about the other choices. I've never seen Stella, Sam's, Coors, Corona, etc. in Germany. Obviously, Bud is the name everyone else knows, so that's what they order when they get here.

I hang out at a pub owned by a Brit, with 80+ beers on tap, and populated by about 40% non-Americans. They still drink Bud. Or Shiner, but one of the two. It's funny actually, but they do like the taste of Bud Light.

Hell, we hung out at the owner's *other* non-American bar when you were in town.

[HardDrive]

Budweiser makes beverages. But calling them beer is a stretch.