#DrinkMoxie - What NOT To Do In An Economic Downturn
By Dave Marinaccio, SVP, CCO, Laughlin Marinaccio & Owens
Ever hear of Moxie? Not many people have. At one time, it was the largest-selling soft drink in America.So how did a brand that was bigger than Coca-Cola disappear from grocery shelves and consumer consciousness? It is an illuminating and cautionary tale for anyone who manages a brand.The fact that Moxie ever achieved its lofty position is a story in itself. I’ve tried Moxie. Its flavor is awful, bitter with a strong aftertaste. I wanted to spit it out. Which begs a second question: how could such a terrible tasting drink have enjoyed so much success in the first place?Both the rise and fall of Moxie can be attributed to advertising. The brand was one of the first to be introduced into the New York market. Being first, then and now, counts for a lot. Heavy advertising promoted Moxie. They had an early version of mobile billboards and a catchy jingle.It worked. Being first, launching in the nation’s largest market, and having few viable competitors didn’t hurt either. Anyway, Moxie was out there kicking butt UNTIL . . . the great sugar shortage of 1919. Suddenly, one of the main ingredients in its formula jumped in price. Fearing higher prices, and to ensure the steady production of their soft drink, the company purchased huge amounts of sugar.
In many ways this is not unlike what happened with oil in 2008. That summer, the cost of oil went through the roof, soaring as high as $142 a barrel. Some companies, in an effort to stabilize their price for oil and to ensure their supply for the following winter, locked in the price at that very high number.Unfortunately for oil buyers in 2008 and sugar buyers in 1919, the prices fell as quickly as they rose. Companies that had locked in the higher prices had locked out higher profits. To improve the balance sheet, Moxie decided to make some cuts. They cut—don’t do it—their advertising budget.The results were swift and dramatic. Sales plummeted. But the company managed to survive and, after resuming advertising, was soon flourishing again.One might assume that this adventure, or more accurately, non–adventure, taught the folks at Moxie the importance of marketing. In this case, one would be wrong.A decade later, the stock market crash began the Great Depression. Budgets were squeezed. Companies had to make tough decisions.Moxie once again cut its ad budget. You know who kept advertising through those very lean years? Coca-Cola. And by the end of the Great Depression, Coke had emerged as the number one selling soft drink in America.#DrinkMoxie didn’t die. It survives to this day. You can still occasionally stumble across a dust-covered bottle sitting on a shelf. Anti-climactically, in 2005 Moxie became the Official Soft Drink of Maine. I am not joking.Meanwhile, back on planet Earth, the economy continues its cycle of expansion and recession. Companies grow and shrink. And somewhere, out there in the advertising universe, an ad budget is coming under scrutiny. Hopefully someone in the room has heard of Moxie.[author] About the Author: Dave Marinaccio is an international bestselling author, successful marketing business entrepreneur, and SVP, CCO of Laughlin Marinaccio & Owens in Arlington, VA. He is author of All I Really Need To Know I Learned From Watching Star Trek and Admen, Mad Men, and The Real World of Advertising. [/author]
