Budweiser accidentally stepped into a pile of putrid politics. This isn’t about politics, though. This is what nobody’s talking about. This is about Bud Light’s real mistake.
For those of you not familiar with the basic story, in a botched marketing campaign meant to demonstrate its “inclusiveness,” Bud Light managed to both exclude and alienate its core market. Since then, sales have dropped more than 20%. The latest figures show they continue to drop and that the ensuing boycott has now extended to other Anheuser-Busch products.
This is not a good look if you’re the head of marketing. And that’s where the real mistake comes from. It’s a mistake made by all too many companies, big and small.
Here’s the basic sin: greed.
All business owners and executives want to build a sustainable business model based on continuous growth. What they fail to realize, however, is no tree grows to the sky.
This isn’t news. In the November 1965 issue of the Harvard Business Review, Theodore Levitt explained the nature of the “Product Life Cycle.” The concept relayed in this piece is now required reading for all MBA candidates. In it, he described the four stages a typical product goes through – Market Development, Growth, Maturity, and Decline. Under Levitt’s definition, the Growth stage represents the sweet spot as it offers the highest profits.
Note there are two other stages after growth. This is the sin of marketers since the dawn of time. From Icarus (who flew too high) to Babylonian tower builders (who built too high) to the Harley-Davidson Cake Decorating Kit (because cake decorating meshes so well with the Harley manly persona), greed has consumed those oblivious to their short-sightedness.
The Harley example actually takes Levitt’s advice on how to exploit the product life cycle. He suggests (and provides examples of) companies “extending” their brand by adding a twist to it. For example, Jell-O originally offered “six delicious flavors.” It extended its line (and its product life cycle) by boosting its offering to more than a dozen flavors.
Similarly, 3M took its popular “Scotch” tape and created different variants of it (e.g., colored, patterned, waterproof, invisible, and write-on) for different uses (e.g., sealing and decorating items for holiday and gift wrapping).
Product extensions can successfully give new life to an aging product.
But notice the difference here between what Jell-O and 3M did versus Anheuser-Busch and Harley-Davidson. The former extended their products in a way that complimented their existing customers. The latter alienated their core markets.
That’s not to say Anheuser-Busch and Harley-Davidson did not in the past successfully extend their products.
Harley has had a very lucrative history licensing their product. That’s an example of a product extension. More importantly, it leveraged its legion of fans. After all, what Harley aficionado wouldn’t want to wear a tee-shirt blazoned with the logo of his favorite motorcycle? It simply screams macho. Cake decorating? They’ll pass.
In a similar fashion, years ago Anheuser-Busch famously extended its Budweiser brand by creating Bud Light. Yes, it was a bit of a risk, but not much since Miller Brewing Company had already created Miller Lite, the first successful light beer. Understanding the risk of pushing away its male market, Miller introduced its beer through a series of wildly popular commercials featuring undeniably male athletes arguing over whether Miller Lite is great because it tastes great (therefore you want to drink more) or because it’s less filling (therefore you can drink more).
The whole point is that you drink more. That’s what Miller Brewing wanted, and sales proved they got it.
Incidentally, the first beer to market itself as a “light” beer was Coors. The Coors Brewing Company introduced its short-lived “Coors Light” product in the late 1940s but pulled it after only a few years. Apparently, it didn’t fit with the manly men coming home from World War II. Coors relaunched Coors Light in 1978, after Miller Lite had made light beer acceptable.
Bud Light (originally introduced as “Budweiser Light”) wasn’t rolled out nationally until 1982. Thanks in part to a much spoofed and noteworthy series of humorous commercials featuring Spuds MacKenzie, Bud Light surpassed its older rivals to become the number one light beer brand. It has held that position ever since. According to 2017 sales data, Bud Light had twice as many sales as its nearest competitors (Coors Light and Miller Lite).
Now, circle back to Levitt’s product life cycle. This is where greed comes in. This is where the classic marketing faux pas comes in.
Alissa Heinerscheid, Bud Light’s (now former) vice president of marketing tried to explain her decision to take a risk using a transgender influencer to promote Bud Light by saying, “We had this hangover, I mean Bud Light had been kind of a brand of fratty, kind of out of touch humor, and it was really important that we had another approach.”
Ironically, she knew where Bud Light stood in the product life cycle. She said, “I had a really clear job to do when I took over Bud Light, and it was ‘This brand is in decline, it’s been in a decline for a really long time, and if we do not attract young drinkers to come and drink this brand there will be no future for Bud Light.’”
So, it’s clear Heinerscheid, a graduate of both Harvard and the Wharton Business School, was up on her Levitt. Unfortunately, she wasn’t up on the difference between extending the product and killing it. This is the mistake many failed businesses make. It’s so quick they don’t even know what hit them.
When seeking to grow sales, you can’t forsake those that brought you to the dance. Yes, products need to evolve with their markets, but that refers to the core markets, not the extended markets. Quite bluntly, to prosper, a product cannot serve two masters.
Heinerscheid’s towering mistake was assuming all light beer drinkers speak the same language. They don’t. As both she and Anheuser-Busch have now learned.
Somewhere in Atlanta, the guy responsible for pushing New Coke is breathing a sigh of relief.
Hi Chris – Nicely done – Interesting story around a potentially delicate topic. My only beef is that it wasn’t originally Miller Lite, it was Meister Brau Light. Miller bought the rights & brought it to that much wider (tastes great – less filling!) market. I was a beer can collector in that era & snagged a few of those original Meister Brau Light cans for my collection. But back the core of your story – “know thy customer & stick to your target market” – pure gold. And today, w/ a craft brewery on every corner, Bud Lite has infinitely more quality competition than ever before. Let’s meet over at Okay Brewing & hoist a cold one – Cheers!
Mike, you are correct, (although, as the article mentioned, Coors Lite was actually first). I used Miller Lite because that’s how it was when it was the first light beer to be successfully accepted by the mass market.