Tuesday, February 1, 2011

Is the big game the right place for niche brands?

InBev, the international conglomerate that owns both Budweiser and Stella Artois apparently has decided that what's works for Bud will work for Stella and has produced a lavish spot featuring an Academy Award winning actor. On top of a seven-figure production budget, 60-second extravaganza will cost at least five million dollars to air.

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.

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