Miller Lite accounts for 14 per cent of the total sales volume of beer its company. It the first “light beer” introduced in the 1975 by the company. It was quickly replicated by major competitors like Heineken and Anheuser-Busch, due to the huge potential of the category. The company made way for a new beer brand category of beer which is now the largest in the entire beer industry (Millercoors, 2011).
Brand Category and Life Cycle Stage
Miller Lite belongs to the “Light Beer” category. The target market of light beer is young, male and female, energetic, employed and unemployed individuals. The brand is at its maturity stage of product life cycle. In 2004, the brand accounted for nearly 40 per cent of the company’s sales. Since then, the sales have grown by 12 per cent (The New York Times, 2006). The brand has sustained its equity and share in the category despite of the negative impact of the economic slump, where other brands, like Bud Light actually saw a rapid fall in sales (Bloomberg Businessweek, 2006).
Total Category Size and Trends
Light beer is by far the largest category in terms of size in the beer industry. The light beer category accounts for almost half of all American beer sales. Major light beer brands include Bud Light, Heineken Premium light, Amstel Light and Corona Light (Bloomberg Businessweek, 2006). The industry, though has suffered from economic shocks in the form of reduction in sales, continues to grow.
Social, Cultural and Economic Trends
Social and Cultural Trends
The trend towards drinking lightly to make way for a fresh-headed morning accounts mainly for the success of the light beer category. The consumers in order to have fun but also allow themselves to think straight after drinking consume light beer. The mainstream target market of light-beer constitutes of young consumers.
Because of the majority of “youth” consumers of light beer, the social media and internet have become quite resourceful to attract this market towards the brands. It has been found that the consumers are “tech-savvy” which has transformed how light beer brands communicate with their target consumers (The New York Times, 2006).
Unemployment trends, high fuel prices and fall in disposal income impact the profitability of the light beer category. The growth in the alcohol market in Brazil and Mexico has declined due to the economic fallback, but due to the rising trends in European and North American markets, the companies are sustaining their positions profitably and there is still recorded overall growth in the industry of 55%. Though economic trends tend to push the sales down slightly and produce a stagnant or a slower growth trend, extensive marketing and retail activities ensure that sales do not fall in several states, such as in US, Europe and Africa.
There are various channels involved in the distribution of Miller Lite. Miller Litet is imported from Africa, where it is produced, owing to the cost benefit of cheaper labor that the company acquires there. It is shipped and sold to bottlers in the US who then sell it to distributors. The distributors deliver it to retail shops and local pubs (Fogarty, 1985, pp.560).
Opportunities and Threats
Customers are increasingly switching local unbranded beers to more marketed, attractively packaged and commercialized brands due to the retail and advertising influence. Those companies and those states are seeing positive growth trends in the brewery industry where there is extensive expenditure in advertising and promotion and the commercialization of the alcohol and beer brands (Gallet and Euzent, 2002, pp.90).
Another opportunity to build onto brand equity and attract more consumers towards light beer exists in the form of online advertising and social media marketing. Online advertising is the most effective medium to communicate with and attract the target market of light beer, as it has found to be “tech-savvy.”
It has been forecasted that in the next two years, the main driver of global sales of beer will be the emerging markets, such as China, Ukraine, India, Vietnam and Peru (SAB Miller, 2011).
There are massive threats from the competitor brands, such as Bud Light, Heineken Premium light, Amstel Light and Corona Light. The rivalry in the light beer category is quite aggressive, especially in the face of economic challenges limiting sales of the brands. Anheuser-Busch has been continuously chugging along Miller Light in a neck-to-neck battle for higher market share (Bloomberg Businessweek, 2006). The market share is threatened as well as the position, as other brewery companies continue to expand across the world searching for new market opportunities.
Another major threat arises from consumers who are now switching to cheaper brands and have become less brand-loyal and more price-conscious. This trend is now challenging the expenditures on marketing and promotional activities to attract and retain customers.
The main reason behind the success of light beer category is the consumer demand and the attractiveness of the target market, which offers an ample amount of opportunities for the brands to grow and expand and counter challenges from the competition and the economic environment.