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Advice for Heineken's new marketing superstar

2/19/2014

 
Over the past five years, Heineken sales in the U.S. are down nearly 20%, and they're continuing in that direction. Although, to paraphrase the company's latest explanation to the financial community, "It's not as bad for us as it is for some others."

Being not quite the ugliest girl at the dance isn't much to brag about. And it sure doesn't make you "pretty."
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To turn things around, Heineken recently announced it's importing a marketing superstar from their successful Brazilian company. He's credited with growing Heineken by a truly remarkable 500% in just four years in that South American country. Achieving results like that in the U.S. would see Heineken challenging Bud Light for the #1 spot! Talk about getting pretty.

This new marketing guy's almost unbelievably impressive track record may suggest he already has all the answers for what ails Heineken. But just in case he's an answer or two short, here are three we hope he'll consider. 

1. Take Heineken's "global brand identity" with a grain of salt. 

While a certain consistency in the brand's overall look across international borders makes sense, mandating a single advertising idea everywhere is pure marketing hubris. The current "Legendary" notion is a perfect example. How many guys really aspire to be legendary? Unless he was joking, would any regular guy ever describe himself with that adjective? What does it even mean?

We say push back against those who demand this sort of cookie-cutter marketing. It's plainly not working in the U.S., so no matter what Big Heineken says, their one size really doesn't fit.
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Heineken Brazil website
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Heineken USA website
2. Find a brand strategy that has more substance and depth than "we're cool." 

Hipness is the false god of beer marketers. One U.S. beer brand after another has squandered huge sums of money aiming to be the REALLY cool brand. Heineken's ads featuring super-cool guys at "legendary" parties are neither the most recent to go down that hole, nor have they dropped the most money there. (Bud Light holds that dubious honor.) Continuing in this direction can't possibly be the path to 500% sales gains.
3. Tell us something about the beer. Please. 

If the brisk sales of craft beer in this country-- some measure of which is no doubt accounted for by former Heineken 
drinkers-- offers a lesson, it is this: Beer drinkers really do care about their beer's resumé. They want to know what's in the beer, how it's made, where it comes from, and how it tastes. And the more they're paying for the beer, the more these facts seem to matter. So, tell them what makes Heineken beer special. 

As a starting point, perhaps just explain what this means:
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For our part, we'll be rooting for the new guy. 

Hey, even if he can only manage a hundredth of his Brazilian miracle-- 5%, instead of 500% growth-- he will still be... legendary. 


Just add lemon: The allure of line extensions

2/16/2014

 
They're the sirens of marketing, and the song they sing is all about easy money. How could a beer brand resist?
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Line extensions-- like the citrusy Coors Light just announced-- promise two routes to more cash: Minimal investment on one hand, and quick new revenue on the other. Marketing executives are easily smitten. It's "low risk," as the MillerCoors top marketing guy put it. Why make a risky bigger investment in a new brand name, when an established one can be so economically stretched?
Didn't the sirens lure ships toward hidden rocks?

On the surface, the risks of line extending are neither obvious, nor do they necessarily manifest themselves quickly. In business- school speak, it's a matter of resource allocation and its consequences.

At the brand-marketing level, resources are not limitless, so line-extension support must come from somewhere. Parent-brand budgets are the easy choice. Trimming them is usually done without fanfare. There are no press releases.

The more consequential syphoning of resources away from the parent brand is even easier to hide. Nobody'll spot the loss of attention, creativity, and focus by management and its marketing folks. Top executives will proclaim they'll maintain concentration on the parent brand while getting the line extension launched. Yet no matter what, there just can't be two number-one priorities. Just as mom and dad may proclaim they love their children equally, while in practice bestowing more attention on one, so it is with marketing companies. The new baby always gets more hugs. 

This attention deficit at the expense of the parent brand runs all through the chain.

"Focus" is the go-to buzzword in the sales organization, too. Distributors promise they won't take their eye off the ball. But will they really devote the very same attention to the parent brand as they did before the line extension existed? How is that even possible? 

Out on the street, imagine the guys tasked with selling the new stuff into stores and bars. Sales guys always "lead with the news." Guess what gets pushed out of first-place. When they pitch for extra space in the cooler, on the shelf, and in displays, which brand is the logical choice to give up some of its real estate? 

Speaking of distraction, what brand is the line extension's most likely trier now drinking? Won't many of them already be good customers? Where will they end up if they don't like the taste of the new one? (In the citrus Coors Light case, Bud Light Lime seems one likely beneficiary.) Why rock one's own boat?

There definitely are shipwrecks
When line extensions fail outright-- or fail to generate meaningful volume-- they rarely take the parent brand down with them. But it's hard to argue they leave it completely unscathed. The resources invested, the time lost, and the credibility sacrificed are not replaceable. The investment sunk 
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on just the line extensions shown here ran well into the tens of millions. And who-knows-how-many man hours. What was the return? In the end, how much did any of them help their parent brand?

Lemon or lemonade?

Time will tell whether Coors Light's citrus line extension succeeds, or joins the shipwrecks. On the downside, the Coors Light parent brand just saw its long-running positive sales momentum stall at the end of 2013. The new citrus product-- and its need for attention-- could shove that momentum the wrong way. 

An early indication of trouble? Watch to see if MillerCoors reports sales for Coors Light and its line extension together, combining them to mask the parent brand's momentum trend.

One thing is certain: "Low risk" isn't "no risk."


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    The Author

    Dan Fox is a real beer guy.

    For more than half his 30-year career at ad agency, Foote, Cone & Belding, he ran the Coors Brewing account. Leading a group of dozens of advertising professionals, Dan also personally wrote the Pete Coors "Somewhere near Golden, Colorado" commercials, designed the Coors NASCAR graphics, authored sales-convention speeches, and most important of all, formulated marketing strategy for virtually every Coors brand, including Coors Light, Keystone, Killian's Irish Red and more. His proudest achievement? "Our team had every Coors brand growing at once."

    Over his advertising career, Dan was personally involved in the analysis, planning and creation of thousands of ads for a variety of products and services. By way of this blog, he freely shares his expertise about what works, and what doesn't, when it comes to selling beer.

    If you're in the beer-marketing business--or just interested in the subject--you may want to read what "HeyBeerDan" has to say.

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