Marketing decisions made by Target and Bud Light have caused quite a stir, resulting in a combined loss of $28 billion for the companies’ shareholders.
The issue has caught the attention of experts in the industry who are now questioning whether or not more brands will be cautious before they wade into controversial issues.
According to Timothy Calkins, the associate chair of the marketing department at Northwestern Kellogg, “These are both cases where brands have gotten in the middle of some really controversial issues.” He further added, “I think we’ll see more brands be very cautious about getting into the middle of some of these really controversial issues.”
Bud Light’s decision to gift transgender activist Dylan Mulvaney a personalized pack of beer with the influencer’s likeness as part of an ad for the company’s March Madness contest and to celebrate the year anniversary since Mulvaney began identifying as a woman has cost Anheuser-Busch nearly $19 billion. The backlash resulted in shares being down 14% amid nationwide boycotts of the beer and sales tanking.
“It was pretty clear, with Bud Light, that decisions were made by the team working on the brand, but not by more senior executives. And so, there wasn’t really a line in there. I think in hindsight a team would say, you really don’t want to get involved in that controversial an issue. The problem is it just takes your brand into a space that it doesn’t need to be, and it just creates a lot of strong feelings about something that isn’t really related to the product or its brand,” Calkins observed.
Earlier this month, HSBC analyst Carlos Laboy cut the stock to a hold rating following the backlash and in a note to clients raised several questions. “Why did its US leadership underestimate the risk of pushback given the recent experience of other firms? Is A-B hiring the best people to grow the brands and gauge risk? If Budweiser and Bud Light are iconic American ideas that have long brought consumers together, why did these marketers fail to invite new consumers without alienating the core base of the firm’s largest brand? These questions are not trivial to the crisis and say a lot about the state of A-B’s marketing culture,” he wrote.
Similarly, Target, which has supported LGBTQ Pride for years, this year offered merchandise that included female-style swimsuits that have the option to “tuck” male genitalia, “Thoughtfully fit on multiple body types and gender expressions,” “Gender Fluid” mugs, and a variety of adult clothing with slogans such as “Super Queer” among other items. The merchandising move resulted in more than $9 billion being shaved off the retailer’s market value since mid-week last week with shares down over 12.6%, as tracked by Dow Jones Market Data Group.
“For more than a decade, Target has offered an assortment of products aimed at celebrating Pride Month,” a company spokesperson told Fox News Digital. “Since introducing this year’s collection, we’ve experienced threats impacting our team members’ sense of safety and well-being while at work. Given these volatile circumstances, we are making adjustments to our plans, including removing items that have been at the center of the most significant confrontational behavior. Our focus now is on moving forward with our continuing commitment to the LGBTQIA+ community and standing with them as we celebrate Pride Month and throughout the year.”
“I believe Target is still very much going to support Pride. And I think we’ll see lots of organizations do that because that is an issue that has broad support across the country and that isn’t as controversial as transgender issues,” Calkins added.