Tuesday, February 1, 2011
Is the big game the right place for niche brands?
The problem is, this formula hasn't been working for Bud over the past few years. Sales of their flagship brand have continued to drop despite a 10% increase in ad spending over the past year.
Yes, the brands are at different stages of their respective life cycles in the U.S. Everyone knows what Bud is, and this familiarity has been working against the brand for years.
Stella, even with its rich history, is relatively new to the States and has a long way to go to penetrate the market in both awareness and trial. But is building a big expensive campaign the right way to build this brand for the long term?
Probably not. Stella isn't a tailgate beer. It's not a volume beer. It's not a default beer. It's a special occasion beer, one you drink maybe 10% of the time.
Treating Stella like Bud puts this specialness, as well as its high price and margin, at risk.
It seems to me there's a better way to spend six to seven million dollars to build volume while protecting all that makes Stella special.