Global Marketing Plan Part I
Running head: GLOBAL MARKETING PLAN PART I 1
GLOBAL MARKETING PLAN PART I 8
Global Marketing Plan Part I
Washburn O. Kelly
Global Marketing/ BUS622
Jeffrey Kimmel
November 27, 2019
Global Marketing Plan Part I
Anheuser-Busch’s Budweiser a beer brewing company that has established itself as one of the best-selling beers in North America and proclaimed themselves to be the Great American Lager. A German immigrant in St. Louis, Missouri, started it in the 19th century with his father-in-law. It has developed several brewing technological innovations such as pasteurization and artificial refrigeration that have, which enabled the company to ship its beer worldwide hence its fast growth. If Budweiser wants to extend its operation in a country around the world, the company has to consider the economic, social, cultural, demographic, political, and legal regulation factors to predetermine its performance in the new market.
Economic analysis
Over the past fifty years, Budweiser’s economic condition has substantially changed. This condition is because of the economic factors that pertain to the country’s economy in which Budweiser is operating. The factors include the inflation change rate, interest rates, foreign exchange rates, and the GDP, which affect the business climate, aggregate demand, and investment, that is, determining if the company would profit or incur losses. The company has employed millions of people in America both directly and indirectly and has contributed to the country’s economy through the contribution of taxes. The American exchange rate has impacted the profitability of Budweiser, and the stability of the US dollar has ensured its success. The efficiency of the financial market Budweiser operates, especially in America, has ensured its efficiency in raising capital at a fair price while considering the supply and the consumers’ demand.
Social and cultural analysis
Budweiser Company not only purposes on brewing but also participates in actions that socially affect the community. For example, they stop production of beer in some of its factories to produce cans and clean drinking water that they distribute to areas that have been struck by disasters. They partner with America Red Cross to provide millions of canned water to the communities affected by natural disasters. In 2019, the company has also teamed up with National Volunteer Fire Council to donate a million water cans to hydrate those who are volunteering in case of fire. The partnership shows the commitment of Budweiser in helping communities in America when they are in need. This strategy has ensured the success of this company because several social factors in the society they operate in, directly impacts how the company performs. The cultural beliefs and factors of the community have had a significant impact on the operational and marketing aspect of Budweiser beer in different countries, with their product being a sensitive aspect of society. Unlike other goods, the consumption of beer prohibited, sold, or advertised freely (Babor, Xuan, Damon, & Noel, 2013). The main reason was that alcohol consumption could have many adverse effects on society.
Political, Legal and Regulatory
Budweiser has been subject to several legal regulations and political machinations since its establishment and is recently subject to taxation policies, anti-trust issues, political lobby, and alcohol policies. The political lobby has been an integral part of this company because there are several legislative concerns and policies relating to the beer industry. For example, Budweiser, as a beer producer, was sometimes back affected by the 18th Amendment to the Constitution and the Volstead Act. This act prohibited the companies from producing and distributing beverages with one and a half or more alcohol percentage. The act was then later revoked; the company needed to engage in intense lobbying for the congress to pass legislation favorable to them. Various legal regulations have implemented for advertising, selling, and consuming alcohol since it is a product that, when nor regulated, may negatively affect society (Cartensen, & Dahlson, 2006). For instance, the US has put in place regulations on the time and days when alcohol is sold, such as the limiting of alcohol Sunday sales for consumption off-premises.
Budweiser Operation in Egypt
Budweiser should consider extending its operation in Egypt, Africa. Egypt is a strategically positioned country near to the Middle East and has a stable economy and a high population making it suitable for doing business. Budweiser needs to consider the demographics of Egyptian populations such as the gender and ages to determine if their product may have a good market (Ginsberg & Bloom, 2004). The population is mostly female, even though the ratio is quite low, which is an ideal market for beer.
The economy in Egypt has a freedom score of 52.5, which is in 2019 ranked 144th freest (“Egypt’s Economic Update ? October 2019,” n.d.). The economic system operational in Egypt would be suitable for Budweiser to operate. The country’s GDP growth that is growing at a fast rate would have a positive impact on how fast the beer company expects to grow in the future. The Egyptian Pound is a stable currency that encourages the company to invest in this country. The exchange rates do not also fluctuate a lot (“Egypt’s Economic Update ? October 2019,” n.d.). The country has a quite high level of unemployment, meaning that there would be a more excellent supply of jobs than the demand. Therefore, this means that people would be willing to work for a lower salary, thus lowering the costs of production for Budweiser.
The culture, attitude, beliefs, and values that most people in the Egyptian communities hold would have a significant impact on the operation and the marketing of Budweiser. The social class distribution among the communities in this country is quite extensive. Thus Budweiser would be able to promote its premium product to the public in general since most people are of a higher class and should take care of keeping a connection to their target market priorities and interest (Doole & Lowe, 2008). Moreover, despite the restrictions put in place by religion, beer consumption in Egypt is the most popular alcoholic beverage that accounts for 54% of the total consumption of alcohol.
Egypt has strict regulations on alcohol, which shapes the reservations of alcohol in the country. The government prohibits selling and consuming alcohol in any shop or public places except for tourist facilities and hotels that the Minister for Tourism has approved. This law reduces the growth of the alcohol industry, which can be a disadvantage to Budweiser. However, the country offers licenses to companies wishing to produce and market their alcoholic beverages. The beer industry is not well developed due to regulations; hence, as soon as Budweiser gets a license, it would have a successful operation. Egypt is also politically stable, making it an ideal environment to do business. Therefore, all these factors render Egypt the right potential environment for Budweiser to operate.
References
Babor, T. F., Xuan, Z., Damon, D., & Noel, J. (2013). An empirical evaluation of the US Beer Institute’s self-regulation code governing the content of beer advertising. American journal of public health, 103(10), e45-e51.
Bradley, F. (2005). Global marketing strategy. Pearson Education.
Cartensen, P. C., & Dahlson, R. F. (2006). Vertical restraints in beer distribution: A study of the business justifications for and legal analysis of restricting competition. Wis. L. Rev., 1.
Doole, I., & Lowe, R. (2008). International marketing strategy: analysis, development, and implementation. Cengage Learning EMEA.
Ginsberg, J. M., & Bloom, P. N. (2004). Choosing the right green marketing strategy. MIT Sloan management review, 46(1), 79-84.
Egypt’s Economic Update? October 2019. (n.d.). Retrieved from https://www.worldbank.org/en/country/egypt/publication/economic-update-october-2019
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