The Role of Demographics: What Product Developers can Learn from Four Loko

Chances are that if you are under the age of 25 or regularly watch any of the major news networks, the name Four Loko is at least familiar to you.  If you need a refresher, Four Loko is perhaps the worst tasting mass produced alcoholic drink designed specifically for one and only one purpose, to make people go… Loko. I’ve smelled it and if I think it smells bad (thank you very much organic chemistry for destroying my sense of smell), it must be awful.  I’ve honestly smelled road kill that appealed more to me.  But enough of my critic on the smell;  Turns out that if you mix an an 11% alcoholic drink and pump it fun of caffeine, it really leads to people going Loko!  Add in the fact that it sells for $3 and is targeted to college students… even the most naive person can guess the outcome.

That being said, Four Loko can also be apply described as a highly successful product design with dead on advertising and marketing campaigns.  By now you might be asking yourself, “Why Brian, you tell me this awful product exist and that no-one in their right mind would ever consume it… but then you tell me it’s awesome… are you off your meds?”  First, I’m not on any meds (my quirkiness is all-natural thank you very much) and secondly, yes, that is exactly what I am telling you.

“Well Brian, please explain.”  Gladly.

So here we go.

1) Four Loko fills a niche.  It’s unique.

Although introducing caffeine into alcoholic drinks is nothing new (think irish coffee, coffee stouts), the caffeine in the drink has traditionally been a tangential result of mixing the coffee flavor with alcohol.  When I grab a delicious coffee stout, like my current favorite beer (Big Boss Brewing’s Aces&Ates Coffee Stout), I don’t even think to myself, “why this drink contains caffeine!”  I’m not exactly complaining that it has caffeine, but it’s not why I ordered it.

That all changed with the introduction of the now legendary Red Bull and Vodka sometime in the 1990s.  Some ingenious bartender figured out they could mix the two and make a lot of money, but that’s a story for another time.  The point is a new market emerged: caffeine infused alcohol.

And that’s where Four Loko’s creators are genius.  The Red Bull and Vodka is a lovely idea, but even if you make it yourself at home, you are looking at a $3+ drink.  Red Bull isn’t cheap!  And everyone knows that the vast majority of college students are 1) cheap 2) traditionally large consumers of “adult beverages” and 3) hopefully pretty book smart (although I’ve got my questions about that).  But one thing is for sure: students know a good “deal” when it comes to booze.  Look at what beer sales at grocery stores; it’s always the cheapest/volume.  Add that demography specific trifecta together and guess what… a super lucrative secondary market emerges from the caffeine infused alcohol market; the cheap alternative.

2) Four Loko has great self-esteem.  It knows exactly who it is.

If it looks like a duck, quacks like a duck, and walks like a duck, it’s probably a duck.  If you are in the advertising and marketing world, figuring out what your product really is is the greatest thing ever.  I like to call it Core Product Value.  It’s kinda like figuring out what you want to do in life and getting the motivation to do it.  Once you figure out what you were meant to do in life, only the sky limits you.  For Four Loko, it may be a cheap, low class, and a horrible tasting excuse for a drink, but it’s going to be the cheapest, lowest class, and worst tasting drink it can be and feel great about it.

3) Four Loko embraces itself.  It doesn’t try to be anyone but itself.

When Four Loko was being developed, chances are a bunch of marketing pros were working alongside the chemist to figure out how to position the product.  A product may have great value, but without a strong strategy to tap into that value, a product is as good as dead.  Think Coca Cola or my favorite, the Volkswagen Beetle: without dead-on marketing and advertising, those products would not have developed as they did.  Four Loko’s advertising and marketing strategies have done remarkably well.  Visually, the packaging is instantly recognizable and if you say the name Four Loko to the target demographic, it taps deep into consumer’s emotions.  It’s got brand personality and has developed exactly the kind of reputation it deserves: it’s cheap, full of caffeine/alcohol, and offers drinkers exactly what they want.