– Miller Highlife “Champagne of Beer”
= most money to date
= new conceptualization of market: target women
– Miller Lite versus Coors
= instead “American’s Fine” rather Miller on “great tasting” “less filling” “premium”
= premium bracket: Schlitz
› versus “back alley brews” and cheap = potentially deadly crud
› status advertising
= initial 19% gain, from new bottle design & color scheme
› could charge premium, too!
– versus costs: shifts share
= if lower costs, then could “buy” share without losing lots of money
= only real difference “purchased” identity
– advertising: claim national brands benefited more than regional
= TV ← → increased industry concentration
= buying shelf space: “facings”
• Anheuser-Busch: bottling
– received approach branding in saloons
› cheaper to make
› cheaper to ship: lighter, more compact, no backhaul costs → more than 50% reduction
• innovation: other areas
– first movers tended to do quite well: shipping
› refrigerated shipping
› interstate systems
– these worked even better if had established market
› do larger firms have more to gain from innovation?
» cannibalization of own sales versus creation of new sales
» capitalization that makes new facilities possible
› 1st tier or 3rd tier: systematic R&D versus “hail mary” strategy
– process improvements ← → cost reduction
– constant innovation serves as an entry barrier
• why concentration?
– premium partially insulates from cost disadvantages
∑ why concentration?
– does tech change amplify random initial differences
› of course not everyone does tech change equally well, see for example the various family succession disputes that brought in good / bad leadership
– are certain sorts of tech chng more important for large firms and other types for small?
› a large firm benefits more from reducing costs
› a small firm sees less cannibalization from new product ideas and new brand strategies
∑ branding and advertising?
– can there be too much / too little product differentiation?
› cf. Hotelling where 2 varied products leave more people getting items closer to their preferences than two identical products
– can we have too much advertising? too little?
› what is the strategic equilibrium? there are lots of potential tradeoffs, and as always what is good for producers may not be good for consumers