International Marketing

Non-Assignment

Submitted by: Chaitanya Khanna

PRN: 18021021071
Section: B
 Case Study of Bud vs Bud
Q1. Discuss Anheuser Busch’s efforts to reach an agreement with Budvar. What should they
have done differently, if anything?
A1. They wanted to diversify their country of operations when Anheuser Busch realised their
sales in the United States, which was their main market, were declining. They were
attempting to approach the Budvar brewing company in the Czech Republic when they
decided to do so. However, Budvar did not share their enthusiasm, while the American
company made a great deal of effort to please them. The following are some of the steps
Anheuser took –
1. The business also opened a café and began offering classes in English.
2. In Ceske Budejovice, they paid $ 1 million for a cultural centre.
3. While equipping them with St. Louis Cardinals jerseys, they launched a baseball
team. By the way, it's an American team.
Instead of all of this, though, Budvar somehow did not relent. In their negotiations with
Budvar, I assume Anheuser made a very important error. They did not handle the situation
with the requisite diplomacy, but rather behaved like the big corporation that is trying to
smoothly speak to the smaller company about doing what they want themselves. Here are a
few suggestions on how the offer should have been better. –
1. The Czechs were very proud of their beer in a regional way. They could have
negotiated a new line of beers, even though Anheuser were to take over Budvar,
which would be introduced to a global audience, but the tastes of the range would
originate in the Czech Republic.
2. The Czech beer brands are more sophisticated and better tasting than their American
beers, Anheuser should have acknowledged. Asking the managers at Budvar that they
would strive on better beer standards such as the Czech offerings would have shown
the people of Budvar that they recognise their skills and abilities.
3. The company should have better clarified their business strategy for the Budvar beers
to Anheuser. They should have stressed how they want the two businesses to work
together in order to serve a broader global audience. They should have been
collaborative partners for various customer bases, bringing distinct tastes and levels of
beer power.
4. Giving them a café when they already have a lot of them in all probability, was no
especially killer move by Anheuser. In addition to this, the baseball team was also
wearing American uniforms. All this Americanism did not settle well with the Czech,
who are quite proud of their heritage.
Q2. Do you agree with Anheuser’s tactic to break off negotiations with the Budejovicky
Budvar brewery and go to the courts on a country to country basis to assert their right to use
the ‘Bud’ brand name?
A2. Yes, I agree that Anheuser Bosch, as a corporation, has taken the best approach they
could have in the matter of a trademark. Let us understand why I'm saying that.
Firstly, when it comes to the brewing of beers, Anheuser alone is the majority business
shareholder. They have a presence in numerous countries and, compared to Budvar, their
revenue generation is not to be taken lightly. It is true that the growth of the domestic market
was slow for the US sector, but they would have managed either way.
Secondly, Budvar had already refused to allow Anheuser to purchase a stake in their state-
owned brewery, fearing changes in their taste. With the Czech business, this was a big
problem, as they are very proud of how much better their beer tastes than its American
equivalent. On its side, Anheuser was still stubborn and would not acknowledge the truth and
also permit improvements in their own product offerings.
Thirdly, and perhaps the most significant point, while Anheuser was not able to secure the
trademark for the Budweiser brand name entirely, they were permitted to use the 'Bud' tag by
different European and other courts. This can seem like an amusing event, given that both
tags sound the same, and the fact is that this joke is not on Anheuser, but on Budvar Brewery.
Finally, in company, maybe in a utopian future, for the sake of good faith and income as well,
I would have preferred to find a different solution for both businesses. Maybe Budvar will
encourage Anheuser to sell their superior beer as a franchise offer, and they will have earned
good income on their own by doing so (thus preventing the state government from selling the
national asset, i.e. a brewery), and while doing so, Anheuser would also concentrate away
from their domestic market. Which, at least, seems to be in danger, or stagnant already. In
addition, Anheuser would not have been able to change the Budvar product (as initially
feared by the Czechs) by working as a franchise instead of purchasing the majority stake in
the company and everyone would have increased markets while still making money with this
approach.
Q3. Assess the differing positions of A-B’s Steve Burrows and Mike Benner of the Campaign
for Real Ale. Is beer a “local” product?
A3. In the answers above, we've already found that beer and its roots mean a lot to the Czech
people. The Americans seem to love their beer, but maybe it is because, due to improvements
made in the composition of the beer by the company, they were never able to taste their
Czech equivalent in its true form. The Americans consider this kind of replication very
natural as to them, beer is beer. We will now observe and better explain certain comments
made by the business executives below.
The small synopsis given above is proved by this argument. The Czechs say that American
beer is actually very pale compared to their national beers, despite all the hue and cry about
it. It may be said that this is an act of patriotism, but the fact is that the Czechs are sure of
what they are talking about. American beer sells quite a lot anyway, so it might be that the
finer aspects of beer do not matter to Americans, and they purchase whatever is offered to
them easily and at first glance. This is simply illustrated by an Anheuser executive stating
that even the largest brewery in America doesn't really care about the origin of the beer as
long as they have a partner to sell their beer. The roots, tastes, aromas, and other finer
elements of beer's 'art' are lost on them, and they don't seem to mind their customer base. Bud
is bud. A Bud.
In my opinion, the Czechs are specifically challenging the Americans with this whole quote
about their inferior tastes and habits in the field of beer. They make a very simple distinction
that is critical to remember for marketers, which is that while the American market might
think beer is just beer, Europeans want variety, options, and a wide range of wine or other
offerings produced locally. Their market is quite different, and while Budvar did not manage
to have a fruitful business deal with Anheuser, they are still quite happy to appeal to this
European market, where they are more valued for their finer aspects. The quote also tries to
remind us that, as people everywhere and their tastes are already very different to start with,
one global beer won't fit everywhere. Budvar is very accurate in the fact that in the world of
beer, regionality has to be brought in, since that is what the growing markets want now.