It amazes me how often mega-companies with bloated marketing budgets break basic marketing rules most of us learned in Marketing 101. In January, 2011, MillerCoors announced MGD 64 Lemonade — a limited edition summer brand the company hopes will help it capitalize on growing consumer interest in flavored beers. It’s a classic example of BRAND LINE EXTENSION, and nobody does it better than the beer companies.
What were the Board members at MillerCoors thinking when their marketing team pitched this nonsense? It probably went something like: “Hey, did you [board members] know that Mike’s Hard Lemonade has nabbed another 22% market share in the Progressive Adult Beverage (flavored beers) market? We gotta wake up! We’re missing out on a lucrative market segment here. Miller needs to get in on this before it’s too late!” So they pitch to the board Miller’s new MGD64 Lemonade.
When companies “line extend”, they shift their focus on the success of the NEW product. Sure, MillerCoors will sell some lemonade beer, maybe a bunch of it to start out, but it will come at the cost of their other core brand(s). Did the Board really think that all the folks who enjoy drinking Mike’s, will flock to MGD64 Lemonade just because MillerCoors brews it? Of course they won’t.
How does the leadership of a company like this commit such a marketing blunder? Your guess is as good as mine, but I suspect they just don’t know as much about marketing as they think, and it appears neither does their marketing department.