Did you hear what Maker’s Mark announced this week?
We’re in a midst of a bourbon boom.(yes, really). Since it takes a long time to make the stuff, an imbalance of supply and demand has arisen. Its the kind of thing markets normally sort out through shortages or price increases.
But the folks over at Makers Mark had an idea. What if they watered down their iconic whiskey by just 3%? That would give them more product to fill their orders, and help them maintain their share of a suddenly fast growing market. Let’s call this plan, “Just Add Water.”
There’s just one problem, nobody asked the customers. I mean literally, the voice of the customer was absent from this consideration. In fact, it sounds like it came down to the brains and tongues of two guys.
Is Dilution How Premium Brands Solve Shortages?
Now don’t get me wrong. Chief Operating Officer, Rob Samuels is the right guy to make this call. His grandfather created the whiskey’s unique recipe thought this change over, and though Makers Mark is owned by Beam, Inc. it is still family run. He and his father functioned as a focus group of two people, agreeing that if it tasted right, the plan was on.
Time Magazine describes how Rob Samuels and his father, Bill Samuels Jr. got together every night after work for 30 nightly tastings. (Doesn’t that sound bucolic?) And after a month of tastings they “agreed that the lower proof tasted like Maker’s is supposed to.”
Everyone Please Repeat: “I am not the target market”
If there was anything we learned from “New Coke” it is that taste is often not what consumers are buying.
In the case of whiskey, it may be familiarity, tradition, even stability. It might also be alcohol content, or the status of a high proof number. At any rate, rate the Samuels were surprised that the bar owners and customers who buy their whiskey started to complain that a “watered down version of Makers Mark” wasn’t what they wanted to sell or buy.
Now, we can debate if watered down whiskey tastes the same; the Samuels say it does. And I’m sure there will be long term value from expanding supply to gain new customers and retain their existing buyers. I don’t argue with either of these points, that’s the Samuels’ business, literally.
But they focused their decision purely on product attributes, as measured by their own tongues, rather than how their best customers would respond. It would have been easy to call up 100 distributors who were waiting on product orders to ask if they’d be keen to get a new lower proof Makers Mark sooner. What strikes me is that they protected the “integrity of the product” but not the reputation of the brand, which lives and breathes in the real world far away from whiskey makers.
When In Doubt, Get Customer Facts
Honestly, I have nothing against the Samuels and I wish them, their family and their business well. But there’s a huge lesson and reminder in this story for marketers. One of the four P’s marketing is classically charged with is Product. And when it comes to product road maps, not even the most expert opinion can replace fact-based research on actual consumers. Knowing is better the tasting and guessing.
When Mr. Samuels describes the “close relationship” Makers Mark has with its customers, where was there input on reformulating the product? I wonder if the tribe of people who prefer Maker Mark will now order it with less ardor knowing it contains a bit more water. Market research could have prepared the firm to lessen the impact of this change, or better still, do what countless brands of done during shortages – promoting the fact that there are lines and waiting lists for their iconic product.
So far, The Samuels’ thirty nights of tastings hasn’t satisfied Makers Mark’s most ardent fans; perhaps it time it will. But now, ironically, Markers Mark’s attempt to meet demand by increasing supply may have an unexpected consequence of lowering demand among some of their most loyal customers.
Update 2/18/13 — Over the weekend, Makers Mark announced they heard the voice of their consumers and reversed their decision. http://abcnews.go.com/m/story?id=18524914
Being really customer centric….starting with customer thinking before product thinking is cultural. Makers Mark has a successful social media “ambassadors” program, and they’re trying to engage their buyers. Hopefully this will help shift some remaining “product-first” thinking to starting with customers first. And perhaps wrapping more rigor around testing ideas for innovation would be a good start.