Baby Boomer Marketing

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—David Mitchel, Norton Mitchel Marketing

Budweiser, the self-proclaimed King of Beers, announced a marketing initiative this week to broaden its appeal to drinkers ages 21-30. Although Budweiser is an immensely popular global brand, it has had difficulty in the United States market in recent years. In the US, Budweiser sales volume was down 9% in 2009 and it appears the brand is on track to lose about 9% again in 2010. As a means of comparison, the whole US beer market fell 2% in 2009. In 1988, Budweiser had a 26% share of the beer market in the USA. Today, Budweiser only has a 9.3% share. In particular, Budweiser is most concerned about its lack of popularity amongst young drinkers. According to its own data, 4 out of 10 drinkers in their mid 20s have never tried the beer. These factors make now a quality time for the Budweiser brand to revitalize. However, based on the plans that Budweiser has divulged, I do not believe that they will be effective in changing the perception of the brand amongst young adults and generating greater market share.

Budweiser’s marketing initiative will begin in earnest with “Budweiser National Happy Hour” on Wednesday, September 29. Free samples of Budweiser will be available at various bars across the nation. The logistics of this plan already have been criticized in the mass media. While criticism of logistics is certainly valid from a brand management perspective, it does not take into consideration the larger strategic flaws in the plan. Free sampling can be a way to build brand awareness and develop positive brand beliefs. However, marketing is a mix of elements and all elements of the mix must work harmoniously together for success. In the case of Budweiser, this will not occur.

Besides the National Happy Hour event, Budweiser plans to promote the brand through their Facebook presence and video advertising, much of it on television. They are taking a multi channel promotional approach, which is positive. Budweiser will use its Facebook page to give free beers to those celebrating a birthday (22nd birthday and up) and display photo albums of those celebrating with Budweiser on their birthday. A quick visit to Budweiser’s Facebook page shows that Budweiser isn’t likely to impress most of the young audience. Their primary profile picture displays 2 Budweiser bottles on ice and the slogan of this campaign “Grab Some Buds”. The imagery is nothing new, which is disappointing because a key component to revitalizing a brand is repositioning. Using imagery that places Budweiser in a new context would be a welcome change. Also, the slogan for this campaign is “Grab Some Buds”. There is nothing memorable about this slogan. It is about as boring as it gets. Meanwhile, the first video ad is available both on Budweiser’s home page and the Facebook page. This video ad is likely to be perceived as rather stale by young adults because it uses undifferentiated imagery. It will not break through the clutter, which is the goal of all advertising.Continue Reading Budweiser: Not The King of Generation Y

—David Mitchel, Vice President of Norton Mitchel Marketing

The Nielsen Company released new research this past week indicating that the Baby Boomer generation is being neglected by brand marketers, particularly consumer packaged goods (CPG) brands. This is not radical new insight, but it does highlight how this notion is becoming more mainstream. Those who follow demographic trends have known for a long time that the United States’ population would skew older as the Baby Boomers aged. In 2011, approximately 30 percent of the United States’ population will be over 50 years old. With an aging population, it is important for brands to learn how to market to those 50+, an uncommon practice in recent decades for most brands. Nielsen’s conclusion that the Baby Boomers are neglected by brand advertising and shouldn’t be is a correct conclusion. However, their basic analysis posted on the website failed to mention a key driver of their conclusion. Brands that are able to connect to this group meaningfully in the years to come should reap rewards from a revenue and profitability standpoint.

Nielsen was quite accurate in their conclusion that Boomers have tremendous spending power. The standard definition of the Baby Boom Generation is those born between 1946 and 1964. Today, Boomers are between the ages of 45/46 and 64. At this stage in life, many of the older Boomers are nearing retirement age and the younger Boomers are in a mature stage of their careers. This means that Boomers have more disposable income than their younger generational counterparts. The Boomers are expected to outspend their younger peers by over $1 trillion in 2011. It is noted that Boomers account for 38% of CPG purchases, yet major CPG brands are only currently spending 5% of their advertising budgets on this group. Two major conclusions can be drawn from this information. First, CPG brands are getting a tremendous return on investment by spending advertising dollars on Boomers. Next, those brands that recognize this trend and further look to capitalize on the Baby Boomers will demonstrate revenue growth in the years to come. In this depressed economic era, finding a source of growth and exploiting it represents a major competitive advantage.

The current economic downturn should be a major force examined by market research and considered by brands when charting a course of action. In an economic downturn, the vast majority of people suffer. Those who suffer the least emerge as winners. With regard to Baby Boomers, they have suffered less than other generational cohorts. The generational cohort that been disproportionally affected by this downturn is Generation Y (often considered birth years 1980-1994). Generation Y is currently between the ages of 16 and 30. Marketers have always paid a lot of attention to the 18-30 age group in the hopes of building brand loyalty amongst the youth. In this era, that is the wrong strategic approach. Generation Y has little spending power as compared to 18-30 year olds in the past. This is because youth unemployment is extraordinarily high. This is a social crisis brewing and has been underreported by major media outlets save for the exception of BusinessWeek in October 2009, but that is not the focus of this analysis. This is relevant knowledge to brand marketers when considering the Boomers. Boomers have been far more likely to keep their employment, thus producing income that can generate demand for products. The insights from this paragraph represent the key bits of information that Nielsen didn’t share in their basic analysis of marketing why Boomers have spending power and why brands should focus on them.Continue Reading Marketers Missing the Boom