I’m currently in Ireland on a work/pleasure trip, and just listened to a heated debate on RTE radio, Ireland’s national radio station. The topic of the conversation was Bulmer’s Cider, and their latest television commercial. Here are some details:
- Ireland is in a recession (obviously…as is the world…however, you wouldn’t think it when you see the crowds out shopping and drinking on the weekends), and the media here seems to love saying the word “recession” even more than Wolfe Blitzer on CNN.
- Irish pub owners are becoming increasingly worried as a change seems to be happening in Irish society. More people are deciding to drink at home on the cheap rather than to socialize in the pubs and this is hurting the publicans and their industry, especially the thousands of small rural pubs around the country. As a result, more bar stools are empty on a regular basis, and many pubs are apparently not making much in the way of profits at the moment.
So, most of these publicans are complaining about high costs, and not enough business coming in. This provides the foundation for the stupidity of what Bulmer’s Cider marketing team decided to do.
I imagine the Bulmer’s management and marketing team sat around a table, trying to decide what they should do to increase sales in a bad economy. Their sales have decreased, something had to happen.
So, they set out to create a television ad campaign that would let the market know that they were “cutting” their prices, specifically, the price of the pint bottle by 10c.
The ad’s theme involves an over-enthusiastic Bulmer’s staff member, Liam, at the orchard, who overhears management talking about “cuts”. So, he starts applying “cuts” of his own to everything in sight, trying to make an impact and speed up production of the cider. You can watch the 40 second ad below, or by visiting the post on my site if you are reading this via email or rss reader.
So, why is this “marketing gone wrong”? Well…it’s simple. Bulmer’s don’t control the final sale price of the pint bottle that the consumer buys in the pubs. Bulmer’s only controls the price that they sell their product to when the publican’s purchase it from them as suppliers. Guess who controls the price when it gets sold to the consumer….The publican does…..And guess who isn’t making the same profits he once enjoyed?(as mentioned above)……. The publican. …And guess who isn’t going to lower his sale price even though his cost price has been reduced? You got it.
I don’t blame the publicans that aren’t lowering the price of a Bulmer’s pint bottle. They are in business to make a profit, and if they are struggling to survive right now, they are going to be delighted with any reduction in their cost of supplies. So why should they reduce their prices?
The problem here is that Bulmer’s the brand wants to be seen as lowering their prices, and doing something good for the market. The fact that they thought that the consumer would receive these lower prices is extremely naive and quite foolish, especially with the current economic climate and the fact that the publicans seem to be struggling.
In marketing, you can come up with all the great ideas you want, produce fancy television ads, and attempt to do something good and positive for the market, but if there is no business logic or pragmatic thinking behind it, you can end up doing more harm than good.
All of the callers into this radio show discussing this topic were angered at the fact that most publicans had not lowered their prices for a pint bottle of Bulmers. Needless to say, some publicans entered into the discussion, and argued their side about the fact that they are struggling and need all the profits they can get.
Have you ever seen a case like this with another company? I am sure that this happens all the time, especially when the market is made aware that a supplier has reduced their costs, and the end seller doesn’t follow suit.