Blog #3 consumer culture

One of the clichés of business school is talking about synergy. It is sometimes talked about like it's a magic trick that any company can use to make more money. I found the Quaker Oats example to be an obvious failure that they should have seen coming. I grew up in southern Vermont in the 1990's where the Snapple brand had become a bit of a cultural phenomenon among the hemp wearing, hill-billy hippies of the state. Snapple's commercials fit the culture, they were seen as more green because they sold their product in glass bottles, and more natural because they did not sell soda. Gatorade by contrast caters to a completely different demographic, mainly athletes. From a production stand point Quaker must have thought they were buying a product that was within their core competency. But from a marketing/cultural stand point the products couldn't be more different. Quaker Oats is well known by older people, Gatorade is loved by athletes, and Snapple was a cultural phenomenon among young, green, liberals. These products are only similar, perhaps, from a production stand point, but that is not how customers see products. Customers see the marketing and the cultural signals, and no amount of marketing would have made athletes drink Snapple, hippies drink Gatorade, and Quaker Oatmeal cool. The synergy in this acquisition probably seemed obvious but a clash of cultures got in the way. 

The Coherence articular had a good example of a "Pseudo-Adjacent" strategy from Anheuser-Busch. They tried to sell new products to existing customers, which may have worked in a bar, but failed in the grocery store. Salty snack and beer do go together in a bar when they are being consumed, but in a grocery store they are just two items on the shopping list and are unrelated. It seems that setting would be key to selling this new product, but they changed the setting. If they had stuck to selling in bars they may have forestalled competition with Frito-Lay and gained customer attention in the snack market over time. Then the decision to compete for grocery shoppers would have made more sense. The second big problem is that producing and shipping snack is a completely different core competency requiring different equipment, and knowledge, and predictably they had problems with shipping. 

Both of these examples seem to be a mistake in understanding the culture of consumers, as well as the setting in which they consume the product.