Background and objective of the topic

The beer industry has been around for many centuries and has always impacted national economies. Countries, such as the United Kingdom (UK) and the United States (US), have had a capricious relationship with the beer industry over the last few centuries. Indeed, these countries see the benefit for the economy, from tax revenue increases to job creation, but other regulatory and social costs challenge firms within the industry. Furthermore within each brewery, their marketing, advertising and branding strategies are the leading differences amongst the competitors. In oversaturated, competitive markets of the UK and the US, various breweries are able to maintain profitability even as beer consumption and national incomes are in the decline. Indeed, with social-economic trends stacked against the industry, companies are still profitable, but those profits are fading. Through these declines, firms make radical business choices of mergers or acquisitions in order to dominate the brewery industry.

The brewery industry with a $40 (£24.4) billion market value is an important part of the UK economy, and with a $79 billion market value is an important part of the US economy. In the UK, the brewery industry provides 600,000 direct jobs and 500,000 indirect jobs which generates $45 (£28) billion in economic activity and $133 (£81.3) million in tax revenue for 2008. In the US, the industry provides 1.9 million jobs in which $62 billion was generated in wages and benefits and $41 billion in business, personal and consumption taxes for 2008. In the UK, the leading brewery market share is Scottish & Newcastle at 27.1%, Molson Brewing Company at 19.7% and Anheuser-Busch InBev at 17.7%. While in the leading brewery market share in the US is Anheuser-Busch InBev at 50.8%, followed by SABMiller at 18.4% and Molson Coors Brewing Company at 10.6%.

Marketing, advertisement and branding strategies are key elements within the beer industry. The beer industry includes the brewers and breweries, distributors, and suppliers and retailers. As markets become more crowded, competitive and complex, the value of a clear brand increases. A brand can identify one item or a family of items and is defined as a name, term, design, symbol that identifies one seller’s good or services as distinct from other sellers. An advertised brand is a brand that is owned by an organization and is a consumer product. Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers that benefit the organization. Advertising is the placement of messages in time or space in any of the mass media to persuade members of a particular targeted audience. (American Marketing Association, 2009)

A powerful brand gives a company a personality of its own which transcends its components. These components can be seen in both the American brewing industry and the British brewing industry. A brand emphasizes emotion and awareness, but it also connects with consumers to create a strong loyalty base. Fads come and go, but name brands last generations. The brewery industry is very complex in both horizontal and vertical business activities.

There are emerging literatures that specifically relate to the brewery industry where various theories involve the marketing, price and competition aspect of the industry overall. Marketing beer involves the four Ps which is the product, in this case the brand name. The price, which includes the total cost to manufacture, distribute and advertise the beer. The place is the distribution of the beer from the warehouse to the consumer with varies steps in between. And finally, the promotion of the beer is through various characteristics of a marketing plan where advertising is included.

Research Questions

The main subject studied in this academic style dissertation is the effects of branding and marketing within the American and British brewery industry as well as the power to achieve profitability. The specific research questions are designed: