Volinbham Talks Marketing and Bud Light

[volinbham]

Rather than clutter up the threads I thought I'd give my extended take on why the Bud Light scenario was a predictable marketing failure.

This will be a multi-post review. It will be lectury at times since that's what I do for a living.

Part 1: Marketing Basics: Customer Perceptions, Branding and Positioning

A fundamental of applying Marketing is recognizing that customer perceptions are your reality. "The Customer is always Right" doesn't mean that customers are factually correct, reasonable, rational etc. It means they approach the exchange with their beliefs, perceptions, desires. If you want to do business with them you must recognize their perceptions and either 1) change them or 2) meet them. If you cannot do either the smart move is to seek customers you can match with. Just as customers choose providers, providers should choose customers. The problem arises when you don't understand their perceptions then can't understand why they didn't choose you.

Branding and Positioning are very closely related with Positioning being how customers view you relative to the competition (your position in the market) where as Branding is the entire collection of impressions, images, feelings etc that are conjured by the seeing/hearing the brand.

Positioning is important in differentiating against direct competitors. How is Bud Light different than Miller Lite? Than Budweiser? Than Sierra Nevada? Think Walmart and Target - two retailers that are miles more alike than different in approach to retailing and merchandise yet most people familiar with each see them as distinctly different. That is the power of positioning.

Branding is important in differentiating and decision making. A brand communicates the characteristics and consistency of a product so when I go to choose I don't have to do some long feature calculus. I see Taco Bell and I know exactly what I'm getting. They don't have to explain everything to me - just ring the bell, show the sign/logo and all that information is communicated.

So where is Bud Light positioned? A domestic light beer that is not heavy, is available everywhere and has been linked to fun, good times, downing brewskis. The Bud Light brand includes all those impressions plus the distinctive labeling, the link to AB and even Spuds MacKenzie if you're old enough.

Both branding and positioning are critical differentiators in markets with many competitors that don't have strong product differentiation. Bud Light isn't much different than almost any mass market domestic brew. My bet is most people drink it because it's an easy choice (the brand) and they aren't about having the best beer but rather having beer while they have a good time.

 

[85SugarVol]

 

[volinbham]

Part 2: The Situation at Bud Light Prior to the Decision

Taking the Marketing VP at her word, sales of Bud Light were sliding and had been for quite some time. The big question is where was the decline coming from?

Possible Scenarios

1. Sales of Bud Light could be down in line with a drop in sales of all beer consumption (eg. switching to other alcoholic drinks like cocktails, seltzers, etc)
2. Sales of Bud Light could be down as people switch from tasteless domestic light beers to other beers.
3. Sales of Bud Light could be down as light beer drinkers switch to other domestic light beers.

It is #3 that would most call for a change in marketing campaign. #2 and #1 may require product changes since they are driven more by product differences.

So, was #3 the case? We do not know.

 

[volinbham]

View attachment 548472

detention for you

 

[volinbham]

Part 3: The Decision Calculus

If you want to grow sales without introducing new product lines the first of your choices is:

New Customers or More Consumption from Existing Customers. We can eliminate the second as the goal based on the comments from the Marketing VP about changing the image of the product. Typically increase consumption campaigns are about showing the existing customers more ways to use the product (eg a famous Minute Maid commercial series about OJ isn't just for breakfast anymore or an American Express campaign with Seinfeld using his card at the gas station or grocery store).

So if New Customers is the goal the next choice is: New to the Category (not domestic light beer drinkers) or Brand Switchers (switch from other lights or domestics to Bud Light).

It's not clear which the target was but if the "New" then the question is will the switch from funny, silly, brewski messaging to DEI messaging will convince more formerly non domestic light beer drinkers to enter the fray than it will lose as the image that differentiated BL is altered. If Brand Switchers the question would be are Coors, Miller Lite, etc being chosen because of a DEI image OR are Coors, Miller Lite drinkers seeking a more DEI image and once BL offers it they will migrate to the image that better fits what they seek.

I'd say neither outcomes are likely (the new customers won't make up for the lost) so why would this be considered a solution to the sales problem?

But rather than take my word for it - they certainly had plenty of data they could have looked at. I'm betting it would not yield evidence that the pathway to net new sales is a DEI image for the brand. Some DEI messaging combined with maintaining the existing image may have had a small net gain. (will come back to this).

 

[Pepe_Silvia]

I feel like I just watched an episode of Mad Men.

 

[volinbham]

Part 4: The Environment

Bud Light decided to jump into the DEI image world and chose an influencer (among many they chose to be fair) that represented the current DEI hot button (Trans). They had to know that the issue was divisive and a current topic of heated debate.

Add to that another topic of hot debate was the idea of companies going "woke".

Choosing to change your image to embrace a side in these issues means your new image will be more polarizing than your existing one.

 

[volinbham]

I feel like I just watched an episode of Mad Men.

now I want a cocktail

 

[StarRaider]

I feel like I just watched an episode of Mad Men.

I never watched that show, just wanted it to be over to get to the next thing (Breaking Bad).... kinda just like this thread

 

[volinbham]

Part 5: Influencers and Amplification

The strategy to use influencers makes sense if they influence the people you are trying to attract. Influencers tend to have big personalities and that personality can become attached to your brand. Influencers also can impact your brand if they are not being paid by you (and whether you want them to or not).

Social media is an amplification tool. Small issues that shouldn't gain attention do so because some people (often influencers) amplify the item.

So looking at the influencers BL chose, they didn't really match the customer base (at least the one in question) nor did they reach the customer base. So how did the customer base find out? Other influencers that BL didn't choose got wind of the Mulvaney tweets/reels and said look at this!.

What BL missed was that it was no surprise that the unchosen influencers (who the customer base actually were influenced by) would amplify this as the perfect example of the views they already held (concerns about trans and the woke take over). Had BL paid attention to who influences their customer base they would have seen the trouble ahead.

 

[SpaceCoastVol]

What it was, in simple aviation terms was a complete loss of situational awareness, resulting in stall, spin, crash, burn.

 

[evillawyer]

Rather than clutter up the threads I thought I'd give my extended take on why the Bud Light scenario was a predictable marketing failure.

This will be a multi-post review. It will be lectury at times since that's what I do for a living.

Part 1: Marketing Basics: Customer Perceptions, Branding and Positioning

A fundamental of applying Marketing is recognizing that customer perceptions are your reality. "The Customer is always Right" doesn't mean that customers are factually correct, reasonable, rational etc. It means they approach the exchange with their beliefs, perceptions, desires. If you want to do business with them you must recognize their perceptions and either 1) change them or 2) meet them. If you cannot do either the smart move is to seek customers you can match with. Just as customers choose providers, providers should choose customers. The problem arises when you don't understand their perceptions then can't understand why they didn't choose you.

Branding and Positioning are very closely related with Positioning being how customers view you relative to the competition (your position in the market) where as Branding is the entire collection of impressions, images, feelings etc that are conjured by the seeing/hearing the brand.

Positioning is important in differentiating against direct competitors. How is Bud Light different than Miller Lite? Than Budweiser? Than Sierra Nevada? Think Walmart and Target - two retailers that are miles more alike than different in approach to retailing and merchandise yet most people familiar with each see them as distinctly different. That is the power of positioning.

Branding is important in differentiating and decision making. A brand communicates the characteristics and consistency of a product so when I go to choose I don't have to do some long feature calculus. I see Taco Bell and I know exactly what I'm getting. They don't have to explain everything to me - just ring the bell, show the sign/logo and all that information is communicated.

So where is Bud Light positioned? A domestic light beer that is not heavy, is available everywhere and has been linked to fun, good times, downing brewskis. The Bud Light brand includes all those impressions plus the distinctive labeling, the link to AB and even Spuds MacKenzie if you're old enough.

Both branding and positioning are critical differentiators in markets with many competitors that don't have strong product differentiation. Bud Light isn't much different than almost any mass market domestic brew. My bet is most people drink it because it's an easy choice (the brand) and they aren't about having the best beer but rather having beer while they have a good time.

"How is Bud Light different than Miller Lite? Than Budweiser? Than Sierra Nevada?"

Sierra Nevada isn't piss, the others are?

 

[evillawyer]

Part 4: The Environment

Bud Light decided to jump into the DEI image world and chose an influencer (among many they chose to be fair) that represented the current DEI hot button (Trans). They had to know that the issue was divisive and a current topic of heated debate.

Add to that another topic of hot debate was the idea of companies going "woke".

Choosing to change your image to embrace a side in these issues means your new image will be more polarizing than your existing one.

What I don't get is the cost/benefit here. There would be such a miniscule gain, even from a "successful" marketing campaign involving a trans person. There just aren't that many of them and they're probably not buying a cheap beer associated with middle America. Was the thinking that pro-trans rights people who are not themselves trans would be motivated to buy Bud light because they're "inclusive"? I get you don't want to appear bigoted, but I'm not sure appearing forcefully non-bigoted gets you much.

 

[volinbham]

Part 6: The Mistakes

Why did it go so bad? A series of predictable events but at the heart was a strategic decision to change the image of the product that was primarily differentiated by image.

As noted above, merely adding some DEI messaging but not trying to overhaul the image would have been much less damaging and possibly even slightly positive.

The outbreak could have been contained/lessened if the VP video did not surface. It was her own words that confirmed this wasn't just some messaging but an intended change of the image of the product to something that didn't align with the customer base.

One could argue that the public shouldn't have seen that video but again BL had to know that once something gets controversial the Internet sleuths come out of the wood work to dig up what ever they can and this one was the confirmation that the base needed to see it wasn't just a rainbow on the can for a week or month but indeed the company saying we are different now.

Had BL done all the research and concluded the change of image would be a net positive then the VP should not be fired/reassigned. From the outside however it appears they missed too many obvious land minds and misread the situation so badly that they probably didn't do the research.

At a minimum, they exhibited they didn't understand their customer base - a failure of the most basic tenet of Marketing.

 

[volinbham]

At bit more on the power of image/positioning and beer.

Miller Lite was not the first light beer but it quickly became the dominant market leader via positioning (and distribution advantage).

Most light beers marketed themselves as diet beers. But the reality people serious about dieting aren't going to drink a lot of beer.

Miller Lite chose "less filling" as the feature to emphasis rather than "fewer calories" and the message was you could drink more without getting bloated or drink more for the same calories. People who drink a lot of beer at time bought into the less filling benefit.

 

[volinbham]

What I don't get is the cost/benefit here. There would be such a miniscule gain, even from a "successful" marketing campaign involving a trans person. There just aren't that many of them and they're probably not buying a cheap beer associated with middle America. Was the thinking that pro-trans rights people who are not themselves trans would be motivated to buy Bud light because they're "inclusive"? I get you don't want to appear bigoted, but I'm not sure appearing forcefully non-bigoted gets you much.

you are exactly right - the potential upside is tiny.

maybe it gets your corporate scorecard on DEI up so you can promote that but as you suggest a beer brand being inclusive is a tiny net benefit and probably not a brand switching game changer

I don't believe the cost/benefit was done.

 

[Orangeburst]

 

[85SugarVol]

Part 3: The Decision Calculus

If you want to grow sales without introducing new product lines the first of your choices is:

New Customers or More Consumption from Existing Customers. We can eliminate the second as the goal based on the comments from the Marketing VP about changing the image of the product. Typically increase consumption campaigns are about showing the existing customers more ways to use the product (eg a famous Minute Maid commercial series about OJ isn't just for breakfast anymore or an American Express campaign with Seinfeld using his card at the gas station or grocery store).

So if New Customers is the goal the next choice is: New to the Category (not domestic light beer drinkers) or Brand Switchers (switch from other lights or domestics to Bud Light).

It's not clear which the target was but if the "New" then the question is will the switch from funny, silly, brewski messaging to DEI messaging will convince more formerly non domestic light beer drinkers to enter the fray than it will lose as the image that differentiated BL is altered. If Brand Switchers the question would be are Coors, Miller Lite, etc being chosen because of a DEI image OR are Coors, Miller Lite drinkers seeking a more DEI image and once BL offers it they will migrate to the image that better fits what they seek.

I'd say neither outcomes are likely (the new customers won't make up for the lost) so why would this be considered a solution to the sales problem?

But rather than take my word for it - they certainly had plenty of data they could have looked at. I'm betting it would not yield evidence that the pathway to net new sales is a DEI image for the brand. Some DEI messaging combined with maintaining the existing image may have had a small net gain. (will come back to this).

None of the above?

It was simply the “right thing” to do.

 

[McDad]

 

[Orangeburst]

 

[StarRaider]

 

[RikidyBones]

Part 6: The Mistakes

Why did it go so bad? A series of predictable events but at the heart was a strategic decision to change the image of the product that was primarily differentiated by image.

As noted above, merely adding some DEI messaging but not trying to overhaul the image would have been much less damaging and possibly even slightly positive.

The outbreak could have been contained/lessened if the VP video did not surface. It was her own words that confirmed this wasn't just some messaging but an intended change of the image of the product to something that didn't align with the customer base.

One could argue that the public shouldn't have seen that video but again BL had to know that once something gets controversial the Internet sleuths come out of the wood work to dig up what ever they can and this one was the confirmation that the base needed to see it wasn't just a rainbow on the can for a week or month but indeed the company saying we are different now.

Had BL done all the research and concluded the change of image would be a net positive then the VP should not be fired/reassigned. From the outside however it appears they missed too many obvious land minds and misread the situation so badly that they probably didn't do the research.

At a minimum, they exhibited they didn't understand their customer base - a failure of the most basic tenet of Marketing.

I think the VP video was a podcast rather than an internal message. Doesn't change much now but the way she worded it is fireable on its own given it was for public consumption imo. Negativity directed at your customer base shouldn't ever be on the table whether you are pivoting your brand image or not. Maybe huff will concede this one now. Great breakdown.

 

[85SugarVol]

Part 6: The Mistakes
One could argue that the public shouldn't have seen that video but again BL had to know that once something gets controversial the Internet sleuths come out of the wood work to dig up what ever they can and this one was the confirmation that the base needed to see it wasn't just a rainbow on the can for a week or month but indeed the company saying we are different now.

I think it said much more than that to the average “Bud drinker”.

It could have been, and likely was by many, perceived as “we’re not for you anymore”.

 

[McDad]

 

[volinbham]