Some Winners, Some Losers ... and Bud Light

Mark and Lorraine dig right into some advertisers who are back to doing positioning right: Burger King lets you have it your way and Dominos is back at the delivery game. Those are our winners. We have a few losers too, including Bed Bath & Bankrupt and the loser of the month, Bud Light. Learn what's going right (and wrong) with each of these brands and why Mark and Lorraine are hot on the King and the Tot and not-so-hot on BBB and Bud.

If you dig all things marketing, advertising, and positioning, spend 30-ish with Mark and Lorraine.

Transcript

Mark Vandegrift:

Welcome to the latest episode of the brand shorthand podcast. I'm your host, Mark Vandegrift. And once again, we have the ever brilliant, amazing, all around incredible positioning strategist, Lorraine Kessler. I laugh, but Lorraine, you know what I think about your positioning capabilities.

And she's a wonderful woman. So that, that is, it's amazing. Lorraine, you know, the topic today, I thought we'd go through some. Brands. We get questions on a pretty regular basis: “What's our take on this brand or that brand?” And a lot of the times, I don't know if you find this to be true, but the person asking the question is instinctually thinking the ad or the business move or whatever's going on is just not quite right. And I think that goes to our nature as human beings to criticize, but I'd like to point to some recent brand successes. We'll get to some problem children here in a moment. But at least in our eyes, I think we've seen some brands turn it around a little bit. The first one is Burger King. I was driving down the road the other day and on their sign, I actually saw You Rule. And it's interesting because they floundered for years doing some of the worst advertising we've seen. I think you mentioned our last podcast, The Dancing Chicken. I mean, that was bad. The weird looking king. They just, they were off base for a long time, and they seem to be back on the right track. We know their position and the creative way they expressed it: have it your way. But I even like this contemporary version of that as: You Rule. I think they're doing a pretty good job. What's your recent take on this move by Burger King?

Lorraine Kessler:

Well, I couldn't applaud it more. You know, over the years, let's go back to the very beginning. And it's such a great positioning principle. We talked about in our other episode about how, if you're number two, you have to go against number one. And certainly McDonald's was number one in the fast food hamburger franchise, going way back to the early 60s when I was a little kid. And... What was McDonald's? It was commodity, it was mass production, right? If you ordered a cheeseburger, it's gonna come with a pickle, the ketchup, the mustard. Special orders upset us, right? So you got to learn to eat the hamburger the way McDonald's wanted to serve it because it was operationally driven to do that. So Burger King comes along and they floundered in the beginning and then they hit on this great campaign with “have it your way” because you get to special order and I think they even have the line “special orders don't upset us” I believe. That was their line too.

So have it your way. Genius. Number two should go east to the west of number one and they did that and it gave them a reason. Now they had a lot of operational problems too, Mark … over the years

McDonald's was much more centralized and controlled in terms of the consistency of the food quality and Burger King gave franchisees a lot more freedom. And so you didn't have, if you ate at a Burger King in say Collingswood, New Jersey, where I'm from and then you had one in Canton, Ohio, it could be a very different experience.

So they did have a lot of operational problems, but that's not to say that the advertising was the problem. That position was great. We were the place for special orders. We do that for you. And “have it your way” was a great way to say it. I think now going back, coming back with that is brilliant. And they've juiced it a little bit with “You Rule,” which is what? We're a Me society. It's all about you. It's all about you making your choices. And it gives it a little fresh kick that I think is a little extra octane to the engine. And I couldn't applaud them more and I hope they stick with it. 

They've also done something interesting. They took the old retro font, you know, we were talking about brand features, and kind of resurrected that in a way that's certainly current and I think relates to today's audience.

Mark Vandegrift:

Yeah, it's amazing to me. I guess – one of the four Cs we always talk about is context – and that might be my only question mark in all of this, meaning is that idea still relevant for the times? But honestly, I don't know that they can move a different way. I mean, there's so many more fast food joints now, and I don't know that any of them say, come get it your way. So it's certainly a positioning idea. what's your thought on the context of it? Because we always say: is the idea right for the time?

Lorraine Kessler:

Yeah, I think it is right for the category, right? They're a fast food burger/fry place, essentially. I mean, the fast food market has expanded well beyond just burgers and fries to a whole slew of different foods. And so you can't really target everyone. And you have to target in the specific, not the general. So I think it's still relevant in terms of the space or the niche. It's been niched, fast food has been niched, let's say. And I think it's still relevant in that the bigger problem is just that there's many different types of food items now available in a fast food kind of way. And they will always have that balance.

Mark Vandegrift:

Well, another one that's seen a resurgence is Domino's. And I don't know that … well, I know for sure they didn't go away from what their position is, which we'll mention in a second, but they did depart for a little bit. We'll talk about that. I remember meeting the CEO of Domino's back in college, and he told our group that one day, that Domino's would one day make and deliver pizzas right in the delivery vehicle.

And they're not quite there yet, but I mean, half of their advertising is about going to EV cars and the whole idea of getting it there fresh. It seems like they're getting real close. They took a detour that felt like they left the position, but now they're back to promoting their position of pizza delivery. And the ad I saw last night was about the new tater tots. I don't know if you've seen that. They offer it with pizza toppings, which frankly look gross to me, but the promotion was wrapped in the fact that fries don't deliver well. And they show these bags of fries, they're greasy and they're limp. So for them, it was time to rethink that potato side. And they found that tots were a better way to deliver. They made it there better. I guess in their shape and their form and greasiness and whatever else.

Lorraine Kessler:

Whoever wants it.

Mark Vandegrift:

But the focus, in introducing the new menu item, was delivery. Give us your take on this.

Lorraine Kessler:

Yeah, I was a little concerned with Domino's when they took what you called, I think, a detour.

When they did the yes, yes, we did. And it was all about kind of correcting or fixing the pizza. It wasn't quite up to snuff. And I'm like, what are they trying to do? Say they have a better pizza than someone else? Because, you know, being better is not a strategy for success. But as I look back on that, it was a detour and it was a very needed detour because you know, one of the things is you have to equal table stakes. 

You can't have a product that is below the standard that customers, consumers expect. So like Volvo, right? Volvo safety, and they changed the design of their car because there was a point of time where people didn't want their Volvo looking like a mini tank, right?

They wanted it to have some design. So, Volvo took some criticism for shifting, and I wouldn't say they shifted their position in total, but they did shift to improving the design. You need to bring the product up to the standard the customer expects. So let's just say table stakes.

Once you have table stakes, once you've equalized on something that every consumer wants from that product, once you've equalized, now your differentiation works all the better. So they use the Yes We Did It campaign to say: we've equalized so that our pizzas are as good as any you're gonna get. And our difference is still delivery. And they've been back on it so hard and with some great creativity. So I certainly think they're on the right track and they've had constancy and consistency, the things we talk about. 

And in addition to the tater tot one you just saw, or whatever that product is. where they improved it so it could be delivered and still retain its taste. They had an interesting commercial before about electric vehicles, electric cars, right. And they kind of show the car arriving with static. It's all about delivery. And I thought that was really smart because they're even showing their forward thinking in terms of another category, which is the type of vehicle that delivers pizza. So, good job for Domino's.

Mark Vandegrift:

Yeah, and you know, we love the pizza category because one of the stories we always heard from Jack Trout was about his interaction with Papa John's and how he walked into the room and the setting for that. Share that story.

Lorraine Kessler:

Well, he walked into the room and what happened is I think Dino, who was the owner at the time, no, no, no, the owner at the time called this Dino guy who actually, I can't remember his last name now, but he was on the board of University of Pacific where my good friend was the president of that university in California.

Mark Vandegrift:

Okay.

Lorraine Kessler:

And they grew all these tomatoes in California and the producer, this Dino, only sold to independent restaurants and independent, you wouldn't sell to a chain. But somehow because the owner was it, is it John's? I can't remember his whole name.

Mark Vandegrift:

John was his first name.

Lorraine Kessler:

Yeah. He was really small when he started, he was buying Dino's product and Trout understood who Dino was, understood the quality of the product and understood that the tomato base that he was getting was very far afield, very different and much improved from the other chains that were in the market. And said, this is the heart of your position. It is better ingredients, better pizza. And

Mark Vandegrift:

Papa John’s

Lorraine Kessler:

it was true.  And Papa John's. And that's the story

Mark Vandegrift:

It was a great story I always remember. I think that's where we got the Ring the Gong story too, isn't it?

Lorraine Kessler:

I know that, that was a Jack Trout story about Ogilvy, David Ogilvy, the father of advertising.

The story where he's called in to do it, make a pitch, his agency in Madison Avenue, along with others. And he's, and you know, you have to imagine the great David Ogilvy with that beautiful British accent, just his brilliance. He's told by a person attending the door, that you have X amount of minutes and when those minutes are up, I'm going to ring the gong, you know. And so Ogilvie asked, well, how many people in that room will be making this decision and the room was filled with board members and what have you. And the person said all of them. And Ogilvie said, ring the gong.

Mark Vandegrift:

That's right. That's right. Well, we are critics. So there's one very hot topic right now, I think in the in the brand world that we can't let slide by and that's Bud Light.

I wrote an article on that, which is on our agency blog. And I've never had that many people reach out and respond to it. You have to peel back the political and values layer to it because that's, if you don't set that aside, you miss the fact that this is actually an amazing positioning lesson about, I guess when you put it the most easily, it's about taking an existing client base for granted. So just give your take on that because mine's already out there. Let's hear what you have to say.

Lorraine Kessler:

Yeah, well, any brand that ventures into, and I will say, this political or cultural wars area, you know, we saw Nike do it with Colin Kaepernick, right? And successful, right? But it's tricky business, and it's fraught with, you know, as much risk as it is game, and maybe more risk. In Bud Light's case, and I think you hit on it, it really was not understanding their core customer. Remember… I talked about positioning is about a distinctive customer, a psychology of customer that you own. And when you're repositioning, as was needed in the Bud Light case, I mean, that was the mandate to this CMO who's the fall gal for a lot of reasons for what went wrong. When you reposition, you can't lose touch with your core customer, you know, and they went so far afield from where the core customer is. That break just became what we know it to be right now. I think what you said today, we were talking that they dropped

Mark Vandegrift:

46.8%.

Lorraine Kessler:

46.8%.

Lorraine Kessler:

And of course, Core's Lite and Miller Lite and it's picking that up as well as Michelob Ultra which Anheuser-Busch owns. But... Boy, that's pretty, I mean, the scale, it started at 7% in the first week, it went to 26% by the end of April, and now we're at 46.8%. It's like, where's the end in sight? I think the other thing that they totally miscalculated, first of all, the consumer who buys Bud Light was insulted. They were called, they were frat boys, right?

Mark Vandegrift:

Right.

Lorraine Kessler:

And so, to add insult to injury, it's like, well, we don't value you as people. It's this idea too of this being kind of this cultural place we're in today on this issue being forced down people's throats, literally.

But they also didn't consider, I think, in this, the first customer. and the first customers, the buying customers, the distributors. Because these are the ones who get hung on the line now with tons of inventory that they can't move. And so when you're thinking about positioning, I encourage companies, particularly that go through distribution, you have to be thinking about not just the consumer, but also that first customer, the buying customer. At least you have to consider it. Doesn't mean you have to be driven by them. But you have to understand the dynamics of the economics of selling through distribution. And I think you had some thought on that as well.

Mark Vandegrift:

Yeah, I made a point in my article just about, can you really own both sides of this? Because to me, it was like New Coke where you were trying to be the new thing and the new thing and the old thing can't exist together.

Lorraine Kessler:

Right, not with the same branding.

Mark Vandegrift:

And it kind of felt, it was like Bud Light saying, we wanna be the new thing. And... screw the old thing. Well, pardon the language, but it just doesn't work. And while you're doing that, oh, by the way, you're gonna lose 50% of your sales. Last night I saw an article that they are sending free Bud Light to distributors.

And I've seen tons of social media images showing Bud Light stacked up outside of coolers and these retailers have to sell it for, who knows, half price? A third? It's crazy what they're having to deal with here. It was just a bad move. And what didn't help was that interview that you referenced of the CMO who said our existing customer base has to get with the times. Well, now you're saying you have to change your values to drink a beer? I don't know what level of Bud Light would be classified, but I think it's not high on the scale of love for the taste or anything. It goes back to what you said, we taste images. And so that huge customer base they had, they picked them up and said, out the window, we're gonna introduce an entirely new customer base to our drink. And time heals all wounds. I don't know that this is gonna be forever, but boy, to lose that amount of customer base that quickly is just unbelievable.

Lorraine Kessler:

Yeah, it just shows the times. And the problem is it was revolution, not evolution. And I think the problem too, and this happened to me when I was young in my agency and doing work for Champion Spark Plug, and we sold to installers and mechanics who were largely male. And what did they like on their walls? Girlie posters, right? I mean, I'm sorry, but I used to have this argument with our creative staff. because they came up with this very high-falutin kind of very, I wanna say, arty campaign to these installers. And the argument I got from my creative director was, well, we wanna elevate their thinking. And I said, that's not our job. We're not being paid to elevate or change the audience. We're being paid to sell this product to an audience who appreciates it. So, this is what can happen when creativity or the need of the CMO or the need of the internal oversteps what really, who's really buying the product and what really they value. Not what I value personally. I don't bring my values to the brands that we market. Try to understand what is the distinctive audience … what do they care about and what do they care a lot about and we try to appeal to them.

Mark Vandegrift:

Yeah, well, you know, all of these examples are a good reminder too, that there's always a new audience and we can't let our foot off the battle for the mind. Our younger associates here, it's funny because you and I have done this before and we'll say, well, what is this brand equal? Or we'll name a position and say, who is that brand? And our younger associates can't name it. And it's not because they don't know positioning, it's because they weren't around then when they were actually doing it. I mean, we think of FedEx known for what? Overnight delivery. But you say overnight delivery today and any number of names came up, the most frequent of which is probably Amazon, which is, you know, we don't think that way because we remember the fast talking salesman when it absolutely positively has to be there overnight. Or we think of Southwest, what were they known for? Lowfare Airline. Well, gone are those days, but who knows? Maybe like Burger King and Domino's, these companies will get back to their positioning roots.

Lorraine Kessler:

You know, if they can, and I mean, that's always a, but you have to adapt, and there's, but the thing is how do you adapt and how do you evolve versus revolutionize? I would call this step as a complete trying to revolutionize and leapfrog, just was a leap too far, a bridge too far.

And they're paying the price. But here's the other thing on the beer category. If you go back and study this for many years, as I've had, and you look at Miller and you look at Budweiser, what they've done is they're chasing beer, their plunk beer, their bad beer down. They keep creating new brands at higher cost and they're chasing the whole category down. I mean, look what's coming around is microbeer brews and really great tasting beers that go back to the origin of really where beer had flavor and distinctive characters. And yeah, these are micro brews. And so some of these companies have bought those smaller breweries. But the point is that, you know, there's a point at which the more you fracture your own line, you're just chasing things down. And that's kind of happened as well. We've seen

What would be an interesting move for a new small brewery would be to take a Virginia Slims approach, create a beer. That's for. the different stroke people. You're different strokes, you do different things. Could be adventurous, it could be related to transgenderism or you dress differently, but a different stroke beer for people who think differently, I could see a small brewery taking that and creating a brand around that idea.

Mark Vandegrift:

Well, it certainly wasn't worth testing it on a well-known, established, been here forever beer,

Lorraine Kessler:

Mass. Middle aisle,

Mark Vandegrift:

but I guess they thought the risk was worth it.

Lorraine Kessler:

mid-cult, beer.

Mark Vandegrift:

We see that too often. Another one is Bed Bath & Beyond. That was one, again, I wrote an article on that, just published this week, and it is unfortunate because you're losing a lot of workforce when these big retailers shut down. But had they called us and we picked up the phone, I think our advice would have been pretty basic. And my whole perspective on it started when my wife was saying she used to walk into the store and she could pick from 50 bath mats. And then just maybe 10 years ago, it was 20. Well, in the end, we're lucky to find five. And it was because all the shelf space was being taken by all these other things that fell outside the idea of the bed category, the bath category, and really what I felt was the kitchen category because when we went in there, the first thing I saw was all the kitchen stuff, and that's what the “and beyond” meant to me. So it was more like bed, bath, and kitchen, and all those things are tightly focused, but then they just went complete generalist on us instead of being the specialist of bed, bath, and kitchen. And I think that was their doom, but you know maybe you have a take on that or a different perspective?

Lorraine Kessler:

I do. I mean, I think they had a lot of coalescing problems, you know, and as they say, pressure breaks pipes.

They had a lot of boardroom shakeups. They had stock buyback programs. They missed payments. They had empty shelves. I went in and there was empty shelves. They did this clean store reset, which ended up being an empty store. It's clean because there's nothing in there. And what's sad is when they started, when Werner Eisenberg and Leonard Feinstein, I think started it somewhere in the early seventies, I think it was around 71, they had a mantra. It was like everything we do, we do for the customer. And so they were unique in this. They're kind of like Southwest. And then they kind of reinvented the category a little bit. They shunned most retail orthodoxy in terms of, they gave their managers local decision-making as to what to stock in the stores. They pretty much eschewed having warehouses. They overstocked the stores. That's what you're talking to. So you would go and you would see like stock everywhere. It was just a plethora of stock, not a clean store, right? Which is someone's idea of an aesthetic, but does it sell? That's the question. And it didn't. But I think the reason they cascaded into financial problems and got away from this unique beginning that Eisenberg and Feinstein had is because they had a blind spot. It's called what Jack Trout in his Big Brands Big Trouble kind of listed as different mistakes. And I think this one goes to the mistake of when you get too successful, you become arrogant. 

So they were very successful with their stores and they got married. They saw their job. And this is real important. I think the management saw their job. as maintaining their stores versus maintaining their customers. And so they didn't migrate to the web in the way they should have. They didn't get an online presence the way they should have. They probably saw that as undermining their stores when in fact it would have saved them.

And so to me, who did that? And I think they could have expanded beyond kitchen. I think they could have done furniture and all that online. Because who's done that? Wayfair. And rather than being like an overstock where there's no real experience of the brand, it's just more stuff in a price. Wayfair comes to the online and creates a lifestyle idea, which I think Bed Bath and Beyond really could own and kind of did, and has everything you need for the Bed Bath and Beyond. And so I think Beyond could have been even expanded more online. I think they just totally missed the boat because they were married to brick and mortar. And it cascaded into all these problems that, you know, and then consumers felt it way downstream.

Mark Vandegrift:

Yeah, that was it. Unfortunately, in this case, I don't know that BBB can get back to the roots and recover like maybe Burger King and and Domino's, of course, didn't get too far away. But these big brands, like you say, that that Wall Street pressure to grow and be more things to more people is just deadly. 

Lorraine Kessler:

Yeah, that's another mistake.

Mark Vandegrift:

it's going to keep taking these big retailers out. I mean, we see more and more closings. Another one that popped up just the other day was Tuesday Morning. And I don't know that brand well. I've never been in one of their stores, but there's another well-established brand that is gone.

Lorraine Kessler:

Yeah. And I really enjoyed their store. I always knew this is the thing that even you think about what consumers think about. I knew in the past that if I needed something, I could go to Bed, Bath, and Beyond and find it. And I would say in the last year I've gone there six times and I never found one thing I thought that they should have. You know, deadly.

But yeah, they had a coalescence of the Wall Street pressure. Financial pressures. But I think it did start … I think it started with their inability to migrate to the web in a way that preserved and elevated the brand to a brand experience as well as supply.

Mark Vandegrift:

Well, I had a meeting the other day with a client and we were just talking a little bit about it and she goes, even when I started buying stuff online, I knew that I could go in there and try out different blenders and sometimes they had the better price so I just buy it there and it wasn't worth waiting to get the other one but she said the same thing. By the time it was all said and done, she was lucky to go in there and find two blenders. So it's, you know, you mourn the fact that that people lost their jobs. But if I were one of those employees, I might say, why did management blow it? What did they do wrong? And you and I know you can go back to positioning basics and say, that's where it started. And there's a lot of other things that go into it. But positioning at its root really was one of the reasons here that this specialist, kind of fell by the wayside and the inability to adapt, like you said, to the online market.

Lorraine Kessler:

And Sears, they're very much, I mean, this is a similar thing that happened to Sears and I worked with Sears directly.

So the arrogance of previous success and they did a lot of things Sears did that every, someone told me, I think it was Karen here, that you're really dumb if you buy anything at Bed Bath & Beyond and don't use a coupon. And Sears used that, like they had sales on Tuesday and people knew it, so they sold under margin every Tuesday and nobody shopped. Wednesday, Thursday, Friday, Saturday. So, I mean, a lot of the same repetitive mistakes were made here.

Mark Vandegrift:

Yeah, yeah, good. Well, I think we're at the end here. Thank you again, Lorraine, for your insights on positioning. Join us for our next episode of Brand Shorthand as we discuss some of the developments on the media front, both digital and linear. And we'll see you next time.