Set the politics aside. Forget your values for just a moment. Bud Light’s marketing fiasco reminds us that violating positioning principles can cost you a lot more than advertising dollars. With its loss of more than $5 billion in market cap, the folks at Anheuser-Busch learned a positioning strategy lesson the hard way.
Most analysis will point to the politics and values that the marketing team for Bud Light decided to adopt. However, the marketing misstep has a more basic explanation. The Bud Light ad violated two positioning – or more accurately in this case – repositioning principles:
1. Perception is reality. Marketing is a battle of perceptions, not products. Marketing battles are fought inside the mind of the prospect. There is no objective reality. There are no facts. The better product doesn’t win. The better perception wins.
2. Never leave your core customer behind. If you decide to make the difficult decision to reposition your brand, know that it’s one of the most challenging marketing and sales efforts in which you will ever engage. However, unless you want to lose your job (reference to the Bud Light marketing team), never reposition with a wholesale dump of your core customer.
How did Bud Light’s marketing team break these [re]positioning principles? Let’s start with the second rule that was broken: leaving your core customer behind.
Fratty and out-of-touch
Alissa Heinerscheid, Vice President of Marketing, called Bud Light’s existing customer base, “fratty” and “out-of-touch.” While she can hold any opinion she wishes of Bud Light’s core audience, her big mistake was assuming she could make such a bold move to reposition its brand from patriotic, traditional American values to a new value set that has just recently been trending. Setting politics and values aside, this is a clear violation of one of our positioning principles.
Heinerscheid decided to abandon its core customer in one mammoth move that cost AB $5 billion in market cap. But she isn’t the first to make such a huge misstep.
Remember New Coke or the Tropicana repackaging fiascos? We won’t revisit those in their entirety — you can read about New Coke here and Tropicana here. The point each situation provides is that because of an external influence — Pepsi’s new generation position in the case of Coke and bad research in the case of Tropicana — they both made huge missteps that cost them significant market share.
Coke decided it wanted to be the “new thing” without regard for its traditional customer base who desired “the original.” Pepsi’s move to reposition Coke as the “old thing” scared the Coke team and resulted in a major strategic error. Instead of doubling-down and appreciating its core customer, Coke threw away the old recipe and told everyone to drink their new recipe. Fail.
Tropicana used errant research telling it the trend was to move to more generic packaging. The company shelved its iconic straw-in-the-orange image (what says “fresh” better?!?) and decided to go generic. Fail. It took just six weeks before Tropicana saw the error of its ways and brought back the iconic brand image.
Bud Light didn’t repackage. The product wasn’t changed. But like Coke and Tropicana, the brand’s move communicated to its core customers that they were no longer valued. Brand loyalty be condemned.
AB has since run an ad touting its patriotic values, but can it save sales? Initial returns are no, this misstep was simply too egregious. Just read the comments on the Twitter feed. However, time seems to heal all wounds, and customers tend to be forgiving. Coke and Tropicana recovered. Hopefully AB learned its lesson.
Perception is … perception.
This first violation of leaving Bud Light’s core customer behind leads us to the second of two positioning principles that were broken. As mentioned, packaging wasn’t changed. The product/formula wasn’t changed. Like Starbucks, or Tesla, or numerous other brands where simply possessing them is a sign of prestige, Bud Light represented (yes, past tense) values that were part of the identity of their core customer. Did Bud Light – in reality – equal American values? No, but the perception existed in the mind and that’s where differentiated ideas live.
Throwing away these values in place of new values to make a political statement was the wrong move, regardless of where you stand in the political spectrum. Heinerscheid may be the fall person, but certainly the highest of AB executives signed off on these commercials. It’s difficult to fathom that no one in the C-suite understands positioning principles. But if Coke and Tropicana did it, why not another large corporation that thinks it’s above its core customer?
Positioning principles – violate them at your own risk.
It’s surprising how many organizations abandon their base audiences. Positioning strategy lives at the heart of the customer. If your greatest differentiated idea does not fit with your target audience, then it’s a meaningless difference. And in the world of cheap beers, differentiation is about as wide as a gnat hair.
If you’re struggling with external pressures, let Innis Maggiore help make sense of it. Whether it’s societal (like Bud Light faced), or something your competition is doing, or maybe it’s something going on in your industry, our positioning experts have seen pretty much everything and can help you work through your challenge. An outside voice is sometimes all that’s necessary to help you avoid a strategically horrible decision. (AB is probably thinking that right about now.) Give us a call or contact us to learn more about our full set of positioning principles.