1. Evaluate O'Doul's positioning strategy. Is it wise, given the flat market for the overall beer industry?
In my opinion O'Doul's positioning strategy is very good for all beer company around the world and Anheuser-Busch Cos Inc itself. They can distinctive big idea in mind of the target market at the right time and place.
The company focuses on customer's need and wants, at the same time give the priority to legal constraint. In this case customer's or beer drinker's need to drink beer for it taste, join the fun, apart of heritage and culture. At the same time beer drinker want to avoid the cost associated with overindulge. Anheuser-Busch Cos Inc produce O'Doul's not to replace the alcoholic beer with nonalcoholic beer, their just want to do application and user positioning for company to give focuses and satisfy customer with their drinking dilemma. It show's that company also care about the legal constraint.
Their also make attribute positioning, with Anheuser-Busch Cos Inc promotes O'Doul's with its highly successful Budweiser brand. This image from a best beer producer occupy as a unique place in mind of nonalcoholic beer drinker's as positioning bases to the mind of prospect such as "What beer drinkers drink when they're not drinking beer".
Their positioning strategy look successful because O'Doul's market shares growth positively and closing the gap in second place in nonalcoholic beer share market.
Yes, it wise to give the flat market with overall beer industry because, it shows that Anheuser-Busch Cos Inc. (Company also produce many kind of alcoholic beer) also care about stricter legal constraints against drinking and driving. In other word it promotes their company name and product to suite consumer behavior trends, and give some opportunity to steal overall sales market from competition. Anheuser-Busch Cos Inc. produce O'Doul's not to replace alcoholic beer which the major sales volume for them, it is one way to influencing customer buying decision in psychological factors that affected by social forces outside the individual and create choice to have a brand loyalty customer.
In fact, their successful positioning strategy had disappointed some nonalcoholic beer manufacture that hoped to appeal to nondrinkers as one way to increase sales (Competitor use wrong positioning strategy).
2. How would you define O'Doul's target segment? Be sure to include the base or bases used to define that segment?
O'Doul's target segmentation is beer drinkers because they find that nearly all nonalcoholic beer drinkers are also regular or light beer drinkers and not nondrinkers (see the chart below). This is the right target segmentation because the response to nonalcoholic beer in 1980 had failed to attract non-beer drinkers to drink beer and this only minority group in the market.
Consumer Behavioral Segmentation
Base on diagram, The O'Doul's market segmentation should define as behavioral segmentation that divided customer into group on basis attitudes towards beer drinkers and non-beer drinkers. O'Doul's nonalcoholic beer target segmentation is single segment concentration on alcoholic beer drinker. They try to achieve strong market position due to their greater knowledge, nearly all nonalcoholic beer drinkers are also regular and light alcoholic beer drinker. Furthermore, in 1991 nonalcoholic segment grew 32 percent is opportunity for them to have the right target segmentation and they also know that nonalcoholic beer can't attract non-beer drinkers.
Anheuser-Busch Cos Inc. that produce O'Doul's also have better knowledge in this beer segmentation need due to their reputation as Bavarian brewery since 1852 and the customer need to stricter legal constraints against drinking and drive. They also can operate in economies of scale through its production, distribution, and promotion because they are already in this beer market.
3. How does this segmentation strategy satisfy the criteria for effective segmentation?
These segmentation strategies satisfy the criteria for effective segmentation by positioning its brand to appropriate usage segment, and has closed in lead competitor in fast-growing segment of slow-growth industry.
O'Doul's beer segmentation strategy not just to sell nonalcoholic beer, they seek benefit or solutions for alcoholic beer drinkers by understanding customer better such as their legal constraint.
5 effective O'Doul's segmentation criteria as below:
a. Measurable - The size, purchasing power and characteristics of segmentation can easily be done because they already in that market. O'Doul's also can be categorized as consumable product that can easily investigate the measurable thing by doing market research.
b. Accessibility ? O'Doul's product also can reach intended target segments efficiently thru' marketing communication and distribution strategies because it same segmentation as product sold before.
c. Substantial ? O'Doul's segmentation (alcoholic beer drinker) are large and profit potential for all beer drinkers to avoid drinking alcohol when the occasion call for sobriety, yet still wish to enjoy beer and avoid the costs associated with overindulging.
d. Durability ? As long these social pressures against drinking and driving make consumers in dilemma, O'Doul's can't be disappear from the market.
e. Differential responsiveness ? O'Doul's is a beer with nonalcoholic, forever this beer conceptually distinguishable from alcoholic beer in legal all around the world.
This 5 strong criteria make O'Doul's still been produce until today in the market. Company had positioning the brand in a right target segmentation to satisfy customers need and want, but still meeting the organization objective.