On the Unintended Consequences of Brand Positioning

Anheuser-Busch InBev’s Bud Light has lost its top spot in the US beer market to Constellation Brands’ Modelo Especial, after a public backlash and consumer boycott over a social media promotion with a transgender influencer named Dylan Mulvaney.

Sales of Bud Light and Budweiser dropped 24.6% and 9.2%, respectively, for the four weeks ended 3 June from a year earlier, while Modelo Especial sales rose 10.2%, according to the consulting company Bump Williams, which sources data from NielsenIQ.

Let me just start by clearly stating that this article is not about the political and societal implications that have surfaced and are being debated based on the actions of the leadership team at AB InBev - the parent company of Bud Light.  Nor is this article intended to add fuel the culture wars where the media has focused the majority of their attention.

This brief analysis is about Marketing… and answering a simple question:

Where did the Bud Light team go wrong?

And when we look at the situation purely from a marketing perspective, the answer to that question is very clear. The Bud Light team violated two basic brand positioning principles:

1. Forgetting that perception is reality.

Marketing is a battle of perceptions, not products. Marketing battles are fought inside the mind of the customer. There is no objective reality. There are no facts. The better product doesn’t win. The better perception wins.

Like Starbucks, or Tesla, or numerous other brands where simply possessing them is a sign of prestige, Bud Light represented values that were part of the identity of their core customer. Did Bud Light – in reality – equal blue collar, patriotic, American values? No, but the perception existed in the mind and that’s where differentiated ideas live.

Eschewing these values in place of new values to make a cultural statement or pander to new prospects was the wrong move, regardless of where you stand in the socio-political spectrum. Alissa Heinerscheid, the Vice President of Marketing for Bud Light may end up as the fall person in this situation, but certainly the highest of AB InBev executives signed off on the brand strategy shift.

2. Leaving the core customer behind.

When you 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, you never reposition with a wholesale dump of your core customer.

“Fratty and out-of-touch” is how Alissa Heinerscheid, Vice President of Marketing, characterized Bud Light’s marketing communications and by association, the existing Bud Light customer base. While she certainly can hold any opinion she wishes of Bud Light’s core audience, her big mistake was assuming she could make such a bold statement to reposition the brand from it’s long standing values to a new value set that has just recently been trending.

Setting politics and values aside, this is a clear violation of positioning principles. Heinerscheid decided to abandon Bud Light’s core customer in one mammoth move that, to date, has cost AB InBev $5 billion in market cap.  But she certainly isn’t the first to make such a huge misstep.

Remember New Coke in the 1980s? Coke was losing the “Cola Wars” and supermarket taste tests against their chief rival: Pepsi.  Coke’s CMO at the time, Sergio Zyman, decided he wanted to be the “better tasting, new thing” without regard for its traditional customer base who desired “the classic recipe.” 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 dropped the old recipe, took the product off the shelves and told everyone to drink their new recipe. Historic fail.

Positioning principles – violate them at your own peril.

Transformational marketers understand that positioning strategy lives at the intersection of the customer and the organizations ability to deliver on the brand promise.  Market leaders are disciplined and avoid the temptation to abandon their base audiences to chase “bright, shiny new objects”.  And as they formulate new go-to-market strategies, they recognize that if the greatest differentiated idea does not fit with their target audience, then it’s a meaningless, and potentially dangerous, difference.