Economics and Marketing

I was at a publick house last night and Budweiser was running a promotion in which they gave out scratch-off tickets to win some kind of prize package and give out ugly branded crap (t-shirts and hats with the Bud Lite logo). So that part makes some sense to me–it gets potential customers to associate the brand with Winning! and Prizes!–but then the other part of the promotion sort of befuddled me. You see, the Bud Lite lady would go around to people at the bar and say “do you mind if I buy you a round of Bud Lites?”

Now here’s the thing. It’s not like there are people out there who would be Bud Lite drinkers, but they just haven’t had the pleasure of trying it yet. So basically it seems like Budweiser is just buying beers for no purpose whatsoever.

I understand the idea that in a market with two or three dominant brands (i.e. Coke and Pepsi; or Budweiser, Miller, and Coors) each competitor must engage in huge marketing campaigns just to maintain its market share. And I understand the fact that for some reason people often pick one of the interchangeable brands and forms some sort of emotional attachment to it. But I don’t know anybody who’s ever been convinced to switch brands based on a free sample. I mean, there’s at least some sense to those taste tests where you find out that–hey!–you prefer Fanta to Minute Maid. What’s the sense in giving away free samples of a product that is essentially indistinguishable, in price, taste, and popularity, from its competitors?

The only thing I can think of is that it’s no different from all the other stupid crap they give away–people will think about how Budweiser gave them free stuff and want to buy Budweiser products. But there’s a huge difference between a free beer and a stupid hat: if you give me a stupid hat I will still have it tomorrow; I will have flushed away the free beer by then.