From Russia with Root Beer

Posted on by Chief Marketer Staff

EVERY NOW AND THEN you see a promotion and you say to yourself; “damn I wish I’d thought of that!” Then there are the even less frequent occasions where you see something and wish to God that you had the sheer chutzpah to do something like that. This is the story of a promotion that will give you both reactions at the same time.

Barqs Root Beer was a venerable old regional brand, founded in 1898 in New Orleans. At best, Barqs was a distant No. 2 to A&W in the sleepy little root beer category. In the 1980’s two local businessmen, Johnny Koerner and John Oudt, bought the brand from the Barq family with the idea of developing the business via franchising large Coke and Pepsi bottlers. Along the way they hired Rick Hill to be their VP-marketing. In the years to come, executives around the world would marvel at the promotions from this tiny company, and wonder, “Who are these guys?”

Hill was, to put it mildly, not the typical marketer. You would expect a graduate of Cornell University, with a Wharton MBA to be maybe a trifle conservative. Hill marketed Barqs like he was 200 bucks short of the rent money, and willing to gamble it all on the turn of the next card. “We had very small advertising and promotional budgets,” he commented, “and we were desperately seeking to carve out our own unique space with the immense Coke and Pepsi bottlers who were distributing us.” While other soft drink brands were pursuing tie-ins with Disney and other “G” rated studios, Barqs was tying in with the Freddy Krueger slasher movies that seemed to go directly from release to triple billing on the marquees of America’s drive ins. Music tie-ins are a staple of soft drink marketing, so Hill, never a follower, endeared himself to the Baptist preachers of the Deep South by sponsoring MTV’s Head Banger’s Ball.

In 1991, Barq’s needed an aggressive 12-pack promotion that would enable them to compete with the cola giants during the summer of 1992. Reasoning that Elvis was born in nearby Tupelo, MS, and that 1992 was the 15th anniversary of the singer’s death, Hill decided to buy an old used Cadillac that was once owned by the King, cut it into little bits, and offer these pieces of rock and roll’s cross as it were, by mail with proof of purchase. The promotion’s title alone would make music aficionados drool; “A Hunk, A Hunk of Burning Lugs.” Everyone at Barq’s New Orleans headquarters was feeling real good until late December when they received a letter with a Memphis, TN, postmark from those friendly folks who manage the Presley estate. It seemed that they were more than willing to go along with Hill’s plan as long as Barqs paid them just a tad over $1 million in licensing fees. Since the fee alone was more than 10 times his budget, Hill started thinking back-up plan.

The Good Lord was smiling on Hill when the Soviet government collapsed on Dec. 25, 1991. While watching live footage of the end of communism, Hill flashed on those Oriental Rug and appliance sales you see all the time; “We’ve lost our lease and are selling out to the bare walls!” There was only one problem, Barq’s 1992 marketing plan was due out in January. Hill recalls that when he took his idea of offering Soviet Union tchotkes in place of Elvis Cadillac bits to Barq’s president, Johnny Koerner, “He just stared at me, and finally said, ‘Do you have anything else?’ When I told him no, he finally shrugged and said ‘Go with it.’” “We made our bones as a company being fleet of foot, fast moving and quick to market,” Hill says, so on Jan. 2, 1992, they announced that their promotion for that year’s key summer season would be “The Soviet Union Going Out of Business Sale.”

The press had a field day with this irreverent poke at our former Cold War rivals. Once again, everyone at Barq’s was feeling real good until the Associated Press called and said that they liked the idea so much that they were sending a photographer down to New Orleans to shoot some of the premiums Barq’s would be offering consumers. Of course there were no premiums, how could there be, the whole idea was barely one week old! In a scene reminiscent of Mel Brooks’ The Producers, Hill booked the AP shoot for things they didn’t have, “I called a friend in New York City and told him to get on down to Brighton Beach (Little Russia) and grab everything he could,” he says.

Having successfully bluffed the AP, and with bottlers now calling him personally to be sure to get early booking on his promotion, Hill figured it was high time he paid a visit to Mother Russia to figure out what he was really going to offer consumers. On Jan. 22, armed with an open airplane ticket, a lawyer (don’t ask!) and $70,000 in checks, Hill went to Russia where he negotiated with members of the “Soviet Mafia.” “After all,” he explained, “The country had just gone to hell, and the only people able to do any business were the criminals.” Ten days later he’d purchased “4,000 pounds of stuff, to be shipped FOB New York, for around $75-$80,000.”

“We filled a container with Metrushka dolls, Lenin Day pins, tank commander watches and military medals,” Hill reminisced, “we even had complete Soviet Army uniforms as bottler premiums. Of course we were offered MiGs and tanks, but we declined.”

Barq’s final consumer offer was a piece of the Soviet Union, for one 12-pack proof of purchase and 50 cents postage and handling. Even the postage and handling charge was Hill’s way of nostalgically paying tribute to the great giveaways of his youth. In 1992, 50 cents didn’t cover half of his actual costs. In return, consumers got a genuine Soviet tchotke chosen at random for them and presented in a clear plastic box complete with a certificate of authenticity.

The results for this desperate, ill-planned, last-minute gamble by a small regional marketer were about what you would expect: 99% bottler enrollment, over 30% increase in May-August sales vs. previous year, Super Reggie Award for the promotion and a Clio finalist award for the TV spot!

Rick Hill left Barq’s in 1996 when it was sold to Coca-Cola. As he explains it, “They offered to make me ‘Director of Worldwide Promotions-Indigenous Brands’ and RC Cola offered me the VP of Marketing job, so I went with RC.” Currently he’s a director of business development at Hewlett-Packard. As former agency associate Jordan Bochanics summarizes; “Everyone who did business with him back in the ’90s is still a personal friend.”

Looking back on 1992’s Promotion of the Year, Hill’s “biggest surprise was that Barq’s held the ONLY organized celebration of the end of the Cold War.” America’s soft drink marketers are breathing a sigh of relief that this innovative maverick is now marketing a less complex product than theirs — computers!

Quick Bites

  • Purchase requirement: one 12-pack of Barq’s root beer
  • Promotion dates: May 1 through September 6, 1992
  • Actual fulfillment: 30,000 consumer mail-ins
  • Offer circulation: 600,000+
  • Fulfillment factor: 5%
  • Sales lift: 30%
  • Total advertising & promotion budget: $750,000

Source: Rick Hill

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