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The beer industry: Literature and definitions

Background and objective of the topic

The beer industry 's been around for many centuries and has always impacted national economies. Countries, including the United Kingdom (UK) and america (US), have had a capricious relationship with the beer industry during the last few centuries. Indeed, these countries start to see the benefit for the economy, from tax revenue increases to job creation, but other regulatory and social costs challenge businesses within the industry. Furthermore within each brewery, their marketing, advertising and branding strategies will be the leading differences amidst the competitors. In oversaturated, competitive markets of the UK and the united states, various breweries are able to maintain profitability even as beer consumption and national incomes are in the decline. Indeed, with social-economic trends stacked resistant to the industry, companies remain profitable, but those profits are fading. Through these declines, companies 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 area of the UK economy, and with a $79 billion market value can be an important part of the US economy. In the united kingdom, the brewery industry provides 600, 000 direct jobs and 500, 000 indirect jobs which generates $45 (28) billion in financial activity and $133 (81. 3) million in tax revenue for 2008. In america, the industry provides 1. 9 million jobs in which $62 billion was made in wages and benefits and $41 billion running a business, personal and consumption taxes for 2008. In the UK, the primary brewery market share is Scottish & Newcastle at 27. 1%, Molson Brewing Company at 19. 7% and Anheuser-Busch InBev at 17. 7%. Within the leading brewery market share in the US is Anheuser-Busch InBev at 50. 8%, accompanied 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 your clear brand increases. A brandname can identify one item or a family of items and is also thought 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 a business and it is a consumer product. Marketing can be 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 virtually any of the media to persuade members of a particular targeted audience. (American Marketing Association, 2009)

A powerful brand provides company a personality of its own which transcends its components. These components can be seen in both American brewing industry and the British brewing industry. A brand emphasizes emotion and awareness, but it addittionally connects with consumers to make 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 include the total cost to manufacture, distribute and advertise the beer. The place is the distribution of the beer from the warehouse to the buyer with varies steps among. And lastly, the promotion of the beer is through various characteristics of the 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 energy to accomplish profitability. The specific research questions were created:

  • To understand and compare the brand drivers of the beer industry in the US and the UK
  • To measure the distribution channels
  • To better understand the government's role
  • To find out how the leading businesses within the UK and US industry are profitable in just a competitive market dealing with the existing economic downturn

Research Question 1: How exactly does the US and UK brewing industry implement their branding identity?

Research Question 2: How will social-economic trends affect the profitability of the US and UK brewing industry?

These questions provides a knowledge of firm characteristics within the industry and their business practices as well as the relative success of the best firms.

Terms used within the industry are thought as follows from the Dictionary of Beer (2001):

  • Ale: a type of beer fermented with top-fermenting ale yeast
  • Bar: a public room in just a pub
  • Barrelage agreement: one common method for a brewery to tie up a ˜free' pub in substitution for a ˜cheap' loan
  • Beer: the generic term for a non-distilled alcoholic drink produced by fermentation of any wort produced from mashed malted barley grain
  • Beer orders: UK government regulations concerning licensing laws and consumer choice in pubs
  • Bitter beer: highly hopped ales with an aftertaste associated with hops, malt and yeast
  • Bottom fermentation: fermentation at 10C where yeast cells sink to underneath of the vessel
  • Brew pub: a pub which brews beer on the premises and serves food
  • Brewery: a place where beer or ale is brewed
  • Brew house: the region of the brewery where the beer is mashed and brewed
  • Brewing process: the procedure of earning wort, boiling it with hops and fermenting it into beer
  • Cask: the general name for any of the barrel-shaped containers of varied sizes used for traditional draught beer
  • Draught: a general term for just about any drink that is dispensed from a bulk container into smaller measures for sale
  • Fermentation: biochemical reaction when sugar is changed into ethyl alcohol by yeast plus some bacteria
  • Free house: a pub supposedly free of any brewery tie and in a position to offer a selection of beers from different breweries
  • Guest beer: a beer, not regularly bought from a pub, being available for a restricted period
  • Lager: beer fermented with bottom fermentation yeast where primary fermentation reaches less temperature than for ale and secondary fermentation happens in closed conditioning tanks around 0C.
  • Light beer: any American low-calories beer which will not contain dextrin and alcohol content ranges between 2. 8 to 4%
  • Microbrewery: small-scale brewery procedure where equipment has been specially developed for brew pubs and small independent breweries and produces a limited amount of beer
  • Macrobrewery: a big brewery produces larger levels of beer at a cheaper price
  • Off-trade (or off-license): where places such as a supermarket or convenience store are qualified to sell alcoholic beverages for consumption from the premises
  • On-trade (or on-license): an establishment where alcohol must be consumed at the idea of sale such as the pub or bar
  • Premium lager: a lager brewed above 5% alcohol strength
  • Porter: a dark, slightly sweetish but hoppy ale made out of roasted barley
  • Pub: a house open to the general public at mentioned times for the intended purpose of social drinking
  • Standard lager: a lager brewed under 5% alcohol strength
  • Stout: a very dark, heavy, well-hopped bitter ale with a dry palate, thick creamy head, and good grainy taste from a dark roasted barley
  • Three tier distribution (NBWA): the US distribution system for the beer industry where brewers make the beer, wholesalers distribute it to supermarkets and bars, and retailers sell it, but no-one within the line is permitted to do one of the other two at the same time
  • Tied house: a pub which is obliged to sell only the products of a particular brewery
  • Top-fermentation: fermentation where the yeast rises to the most notable of the vessel in a thick foamy head
  • Wort: the sweet liquid, containing all the extracts from the malted grain, which subsequently will be fermented into beer

Framework

The framework for the dissertation is really as follows with this chapter presenting the overview for today's study. In the next chapter the methodology is described in greater detail. In Chapter Three, a review of the literature relating to industry concentration, advertising, competition and demand is presented. Chapter Four will consist of empirical materials of primary and secondary data on the key macrobreweries within the united states and the united kingdom as well as results of semi-structured interviews comprised of men and women working within the industry. Chapter Five conveys the analysis and findings developed throughout the study. The final chapter presents the conclusions and suggestions for further regions of research.

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