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Brand Extension: When a Beer is No Longer a Budweiser

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Budweiser drew well-deserved applause for its Clydesdale commercial about Hope.  It was a good story which made for great marketing.

Like other brands, it turned to social media to extend the life of its big game investment. The commercial on YouTube has racked up nearly 2 million views at the time of this writing and search volume skyrocketed.

However, Budweiser had another commercial on the Super Bowl and the company ran a few variations several times before the Clydesdale commercial was shown.  It was the launch of Budweiser Black Crown.  The video, which was also uploaded to YouTube, has just shy of 300,000 views at the time of this writing and search volume is tepid by comparison.

Black Crown is purported to be a premium brand, with a premium price, which also comes with a higher concentration of alcohol.  It’s a brand line extension that says it’s a Budweiser that is well, unlike a Budweiser.


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Brand Line Extensions 

While there’s a worthy discussion around social media tactics and Super Bowl advertising — there’s very little on higher level strategy.  Yet the launch of this new product is an example of strategy — but one I recommend against.

Why?  Because every time a brand extends it’s association to a new product it dilutes the equity of the original brand.

My thinking is strongly influenced by the work of Al Ries, who along with his daughter, Laura Reis, wrote The 22 Immutable Laws of Branding.  They kicked off Chapter 10 by stating flatly, “The easiest way to destroy a brand is to put its name on everything.”

The logic for brand line extensions is simple:  take a reputable brand name and apply it to a new product and prospective customers will inherently understand its quality. Ries & Ries call this the difference between “building brands and milking brands.”  It’s aimed at incremental revenue gains while sacrificing the brand soul.

Place this in another context:  imagine Tiffany’s selling cheap diamonds; it wouldn’t be Tiffany’s anymore.  Those little aqua blue boxes could just as well be a grocery bag with a smiley face on it. Words mean something and the amount of effort that goes into building a brand is too valuable to simply dilute for an incremental objective.

A Kid that Collected a Brand

New England was among the first regions to place a .05 cent deposit tax on bottles and aluminum cans.  States from Maine to Connecticut charged and extra five cents on beverage drinks in an effort to reduce littering — you got that .05 cents back if you returned the bottle to the store.

It largely worked too.  As a kid, I’d walk up and down my street collecting those cans to return for money to buy Star Wars figures. My first “job” was self-employment — a dirty job for sure — at about ten years of age.  Remember, this was circa 1985 — drunk driving laws were on the books but not enforced and the cans all went right out the window. By far and large the majority of those cans and bottles were good old fashioned Budweiser.

As a kid, I’d walk up and down my street collecting those cans to return for money to buy Star Wars figures. My first “job” was self-employment — a dirty job for sure — at about ten years of age.  Remember, this was circa 1985 — drunk driving laws were on the books but not enforced and the cans all went right out the window. By far and large the majority of those cans and bottles were good old fashioned Budweiser.

At the private golf course across the street — the well-to-do’s all drank Budweiser and I was glad to get their empty cans. The cool high school kids partying under the old Rte. 52 bridge?  They drank Budweiser and I was glad to get their empty cans.  The scary bearded guy down the street with a Harley and the American flag

The cool high school kids partying under the old Rte. 52 bridge?  They drank Budweiser and I was glad to get their empty cans.  The scary bearded guy down the street with a Harley and the American flag

The scary bearded guy down the street with a Harley and the American flag headscarf?  He drank Budweiser.  I never did get his empty cans.

The point is — the impression Budweiser made on me as a very young kid was deep.  It was all-American…right up there with Apple Pie and baseball.  Speaking of which, who sponsored the baseball games? Budweiser.


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A Diminishing Market

The beer market has seen increased competition over the last couple decades.  In the late 1990s, microbrews started chipping away at Miller and Bud  — the start of a slow death by a thousand cuts. Today, according to USA Today, it’s the spirit makers who are offering, “consumers a wide range of new products, including vodka that come in different flavors.”

The Atlantic was even blunter, “beer drinking is in outright decline in the U.S., and drinkers are asking for one simple thing. More alcohol, please.”  In fact, Senior Editor Derek Thompson, writes, “Per capita beer consumption has declined steadily since 1990. The volume of mass-produced beer has fallen in every year since the recession hit. Since 2001, America’s beer consumption is down a hardy 11 percent.”

Do you know what we buy the most?  Bottled water.  At age 10, I used to fill my glass with tap water — from a well — for free. But I digress.

Brand extensions are not the path to reversing this beverage trend — and beer makers know this because it has done this before — Bud Light, Bud Dry and Bud Ice.  The third on that list also had a higher concentration of alcohol, which made it popular for a college semester.

Al and Laura Ries wrote that no industry has tried line extensions more often than the beer industry and here we are more than a decade after that book was published and the problem hasn’t been solved.   Beer drinking is on the decline.

How to Solve a Branding Challenge

Budweiser is not a premium beer, which makes this line extension even worse.  Black Crown is a line-extension that attempts to move the price point upstream without re-positioning the company — imagine Bic trying to sell Cross pens in plastic packaging for the same price.

This has not gone unrecognized.  One spirits blogger, who may well have been writing with alcohol induced snark, titled a post, Budweiser Black Crown: The Poor, Desperate Man’s Yuengling.

Ouch.

So what should Budweiser do?   Stay true to its brand.  Budweiser may not be premium, but it is all American and that’s why the Clydesdale ads are so vaunted.

The problem isn’t with the brand, as The Atlantic noted, it’s the consumption habits of the buyer. Upscale Vodkas are in the clubs — Budweiser is never going to be in the clubs unless people start mixing it with Red Bull.  The company needs to look elsewhere.

A better bet?  Make beer drinking out cool again and maybe a beer will be a Budweiser once more.

What would you advise Budweiser to do?

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Photo credit: Flickr, Steven Guzzardi, Black Crown – Day 46/365 (CC BY-ND 2.0)

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