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Wednesday, February 05, 2003

The McSlide and a Brewer’s Cautionary Tale

It’s been amusing to watch the McDonald's marketing people take the heat for the first negative quarter in the fast food giant’s history. Hey, McIdiots, marketing ain’t the problem.The Golden Arches are becoming a dinosaur, first of all, and secondly, more and more people are starting to become hip to the fact that eating Ronald’s garbage can be dangerous to your health.

The marketing people know this, but the corporate execs are breathing down their necks, telling them that they’ve got to spice up the message. Nothing is more terrifying to a marketing person than being faced with putting a spin on an inferior product.

The McD marketing folks, in a panic, are convening a joint creative conference with ten different ad agencies. This is practically unheard of and a sign of true desperation. Normally, you get each agency,separately, to pitch its own approach to your marketing situation, and you go with the one that seems to have the most promise.

Marketing professionals hate being in this bind because they know that dollars spent to lure customers to inferior products or services will come back to haunt them. Sometimes it can even lead to a death spiral. That’s what happened to Schlitz about twenty years ago.

Schlitz beer is still around, but owned by Pabst and a pallid shadow of its glory days. The once mighty Joseph Schlitz Brewing Company is long gone. I’ll bet few of my readers were of boozing age when Schlitz was actually the number one “premium-priced” beer in the US—valued for its good taste and consistent quality. Its slogan, “The beer that made Milwaukee famous,” was universally recognized. “She sits and sips Schlitz” was perhaps the most famous toungue-twister of the time.

In the 70’s, Budweiser and Miller got very aggressive in their advertising and overtook Schlitz in sales and market share. How did Schlitz respond? They decided to compete on price and to join the advertising wars.

In order to compete on price, they were forced to lower their quality. Then, astonishingly, they launched a massive, “taste challenge” ad campaign. It became one of classic fiascos of marketing history. People were invited to do blindfold taste tests. These had the unintended but predictable result of people discovering that Schlitz was the shits.

Continuing their cost-cutting, Schlitz did the unthinkable. They left Milwaukee because they could no longer afford the high wages of the skilled brewers of that Germanic city—thus destroying their history, heritage, credibility, and of course, their famous slogan.

They went down south—Texas, I think—and only lasted a few years. By the early 80’s, they were out of business entirely. Pabst picked up the brand but has done nothing with it. It’s now a minor label in a dreary stable of watery beers. If you had told people when I was in college that Schlitz would be belly up in twenty years, you would have been dismissed as deranged.

McDonald's, by making its marketing people the scapegoats for its current problems, could be starting down this same treacherous road. If it happens, I will gleefully dance on their grave.


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