Widmer Brothers Brewing – Pricing Essay Example

Swaminathan. 2000; Crawford, 2003). In contrast, Budweiser utilizes a variable-price strategy that mirrors the approach of "market basket pricing" (Crawford, 2003). This approach illustrates that optimal price combinations may not change over time (Milici 2000).

Moreover, the effective utilization of a variable-price tactic is not restricted to a situation where the individual customer purchases diverse products. As per Crawford's study on the topic in 2003, alternating employment of "sale" promotions captures the attention of various buyers, including those who only buy products at special prices and those who do not buy at all. Redhook, who is now the partner of Widmer Brewing, used the skimming strategy to appeal to potential customers. The President and Chief Executive Officer of Redhook, Shipman states that "we maintain our pricing strategy by reducing discounts and price promotions at the cost of volume in the western areas compared to earlier periods" (Redhook Reports Sales, 2005). Hence, these pricing strategies accentuate that companies should not merely imitate their competitor's pricing and product tactics but differentiate themselves in this aspect.

According to Chaloupka (2003), pricing is a key factor in determining the competitiveness of companies, as they do not advertise the same items or prices simultaneously. Additionally, heavily advertised products do not have stable prices across all firms. In contrast to Widmer Brothers Brewing, Budweiser and Redhook aimed to increase sales and profits by offering unique product propositions to individual customers. Budweiser leverages both individual product demand and inter-product demand relationships across various brands to generate high profits. This involves selecting well-known brands or those that customers are sensitive to price, promoting them at low prices in advertising and in-store (KLCC Beer

Fest Brewing 2005; Fill 1999).