Wednesday, February 24, 2010

A recipe for failure

We all know that the point of business is profit. But Heineken seems to have forgotten that the way to profit is through creating customer demand... 

Despite the sales declines, Heineken did manage to boost its earnings in the U.S., saying key drivers were the price increase across the Dutch portfolio implemented at the end of 2008 and lower marketing rates. The Dutch parent did not break out specific earnings numbers for the U.S.

When I read this paragraph in Ad Age, I flashed back to the early '90s and a client of ours, Point Beer. After years of trying to out-Bud Bud, their sales slide seemed unstoppable. They had cut advertising and raised prices to remain profitable. Their core market was aging and we all know that most beer is consumed by men 21 – 25. That's when a brilliant writer and art director found an old picture in the brewery's archive and created this poster.

It reconnected Point with its heritage, but in a way that made it relevant to a younger audience. The poster sold like gangbusters and beer sales soon followed. By repositioning Point as a local treasure with a quirky personality they were able to take advantage of the nascent microbrew movement to create a future that now includes a full line of year-round and seasonal beers. And 20 years later the Pointman is still a part of the story.

So my advice to Heineken is this: Don't just create a funny Bud Lightesque commercial and expect things to turn around as you did last year (sorry that it's in Dutch, I couldn't find the English version on YouTube)...

Find a truth in your heritage that gives younger drinkers a reason to try the beer and create a story around that. If it's still here 20 years from now, you'll know you've done your job.

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