Niraj Dawar | A simple graph explains the complex logic of the "big beer merger"

The world’s top two breweries have agreed to enter the largest merger ever in the brewing business, where AB InBev plans to acquire SABMiller.

In their article in Harvard Business Review, Professor Niraj Dawar and Charan Bagga, PhD ’15, a Visiting Assistant Professor at Tulane University’s Freeman School of Business, examine the rationale and possible outcomes of the "big beer merger."

Dawar and Bagga referred to their recently developed brand mapping tool to show how the merged company will own most of the high-volume brands in the mainstream (first in mind) and aspirational (highly differentiated with wide appeal) quadrants in the U.S. market. The tool is used to evaluate brand positioning by organizing brands into four quadrants based on centrality and distinctiveness.

“Regardless of how anti-trust regulators evaluate the mega acquisition by AB InBev, the verdict from a marketing perspective is clear,” said Dawar and Bagga. “The acquisition gives the joint entity tremendous hold over the American beer consumer’s mind space.”