Title

Path dependency, behavioral lock-in and the international market for beer

Document Type

Article

Publication Date

1-1-2016

Abstract

© Ignazio Cabras, David Higgins and David Preece 2016 and Respective authors 2016. Although beer is an ancient beverage, brewing as an industry was not historically one of the driving forces of globalization. Certainly there are instances during the past century of specific brands being made available in other countries, but for the most part beer brands have not crossed national boarders. In many countries, beer, more than many products, has become intertwined with notions of national identity and pride. As a result, efforts to internationalize in this market have to overcome deep cultural associations regarding the product, the producer and the consumer. A recent Wall Street Journal article discussed how unhappy many Germans were that Anheuser-Busch had acquired the exclusive rights to sell beer at the 2006 World Cup. To diffuse the situation, Anheuser-Busch agreed to allow Bitburger - A German brewery - to sell beer at some of the matches. Upon learning of this, one German fan commented, "That’s great. Now I’ll surely stick to the country and have a Bitburger." This anecdote raises important questions about consumer preferences and company expansion strategy: while Germans do not have any difficulty buying many American brands, from McDonald’s to Coco-Cola, attitudes about beer seem quite different. In 2006, Anheuser-Busch was one of the largest breweries in the world and Germany was the third largest beer market, so why was this brewery having such problems in a large, potentially profitable market?.

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