CATEGORY: FoodDrink

Maker’s Mark illustrates the importance of thinking BEFORE you act

CATEGORY: FoodDrinkIn case you haven’t been tracking along, the folks at Maker’s Mark (which is owned by Beam, Inc.), faced with more demand than they could meet, recently announced that they’d be lowering their alcohol by volume (ABV) from 90 proof to 84 proof. You won’t even notice, they assured us.

The backlash was swift and loud. Makers Mark customers pitched a hissy fit, and at least one marketing analysta (Roger Dooley, writing at Forbeswondered if the company had committed “brand suicide.”

Do you really want to go on the record as saying the palates of your customers are so unrefined that they can’t tell the difference when the whiskey is diluted? In reality, in blind taste tests most people probably can’t tell the difference between similar colas, beers, whiskeys, etc. Nevertheless, brands still strive to maximize their taste differentiation. Can you imagine Coke saying, “We could change our formula a little, or even put Pepsi in our cans, and not many of our customers would notice.”?

To their credit, MM leadership today changed course, announcing in a public letter that:

…effective immediately, we are reversing our decision to lower the ABV of Maker’s Mark, and resuming production at 45% alcohol by volume (90 proof). Just like we’ve made it since the very beginning.

Good for them. The thing is, we shouldn’t over-congratulate them because this was a butt-stupid mistake to start with. Dooley had commented on their missed opportunity last Thursday:

Maker’s Mark could have used their looming shortage as an opportunity to make their brand stronger. If they encountered sporadic shortages for a period of years, they could raise prices and leverage the scarcity to take the brand up a notch in prestige.

And all he was doing was stating what every smart marketer in America knew instantly: you never give people less. If the choice is between raising prices or cutting portions, for instance, raise the prices. Customers may not like it, but they react worse when they find themselves getting less for their money. Psychologically, when you do so you are taking something away from them.

Same thing with the MM trainwreck. The shortage was arguably even good news from a brand perspective because the unanticipated shortage (whatever that may say about your forecasting operation) emphasized the demand for your product. You could have responded with something like this:

Wow, folks, you like our product so much that you bought more than we expected. It’s going to take us about five or six years to get caught back up because we will not sacrifice the quality of our fine whiskey, no matter how much it costs us. In the meantime, we’re grateful to our customers and salute their discernment.

Instead, you miss the obvious opportunity, you violate the customer’s trust, and you dilute your brand by far more than the three percent you’re cutting the ABV in your now somewhat less prestigious liquid refreshments.

Given that Makers Mark had committed the gaffe, today’s announcement was precisely the right move. But there was no excuse for the mistake in the first place. Now, thanks to a moment of unfathomable stupidity, they’re faced with the challenge of restoring their tarnished reputation.

Maybe Makers Mark will be just fine. Maybe this won’t even register a blip on their sales numbers – time will tell. In the meantime, though, the company’s need to understand what they have done. Leaving the product as is, running a new ad campaign, dumping money into PR aimed at assuring us that everything is hunky-dory, none of that can undo one simple fact: a few days ago, they announced to the world that they can water down their whiskey with no noticeable impact on quality.

That’s a hell of a brand promise, and it’s a bell that you can never unring.

Think. Act. In that order.

One comment on “Maker’s Mark illustrates the importance of thinking BEFORE you act

  1. Gosh. This seems oddly reminiscent of the newspaper industry. Dilute the product, claim the quality remains the same, and demand a higher price for it.

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