For four days in 2019, Yum! Brands took over a hotel in Palm Springs and refashioned it as “The Bell”, a Taco Bell-themed hotel where visitors could indulge in taco-centric nail art and lounge on hot-sauce-packet-shaped pool floats. Reservations sold out in two minutes.
As a marketing tactic, it wasn’t as straightforward as a new TV ad campaign. But Ken Muench, Chief Marketing Officer at Yum! Brands (which owns Taco Bell and other fast-food brands including KFC, Pizza Hut, and The Habit Burger) says that selling the pop-up hotel idea to the C-Suite wasn’t a problem for the brand's marketers. He had already developed a framework to explain what distinguishes truly effective marketing, a set of guidelines that can be boiled down to the acronym R.E.D.: relevance, ease, and distinctiveness. That made it easy for the marketers to explain why a Taco Bell hotel needed to happen.
Last year, in fact, Muench wrote the book on R.E.D. (alongside coauthor Greg Creed, who was the CEO of Yum! Brands until he retired in 2019). R.E.D. Marketing: The Three Ingredients of Leading Brands distills the knowledge Muench has gained over his 25 years in marketing and strategy. He recently joined YCCI’s Learning from Leaders webinar to explain the key tenets of R.E.D. and to share lessons learned from his years of applying the framework in the real world.
Muench explained that the R.E.D. approach was born out of a need to standardize how Yum! Brand’s two thousand marketers around the world were thinking about the marketing tactics and strategies that helped drive sales. About a decade ago, he noticed that these marketers were operating on several different marketing philosophies, many of which he began to dispel as marketing myths. It wasn’t enough to appeal directly to a consumer’s logic, for example, by striving to differentiate a product. At the same time, focusing squarely on building an emotional connection didn’t work either. So what did?
The R.E.D. approach is intended to distill what psychologists like Daniel Kahneman, the author of Thinking, Fast and Slow, have found: humans make 95% of their decisions intuitively, not rationally, Muench explained, He refined his R.E.D. marketing theories within Taco Bell and then launched them on a global scale with Taco Bell, Pizza Hut, and KFC. The launch aligned with a jump from 3% to 8% growth for the brands.
In a nutshell (or a taco shell), the R.E.D. approach emphasizes three areas where marketers ought to focus when developing campaigns: relevance, ease, and distinctiveness.
“Relevance” prompts marketers to consider how they can make a product feel relevant to consumers’ lives. Muench broke down three types of relevance: cultural (does the brand have cultural meaning that allows people to feel like they’re part of an in-group?); functional (is the product relevant across several “use occasions,” like for family lunch and date night and late night?), and social (is the brand generating buzz such as the purpose of the Taco Bell hotel?). Muench offered Apple as the ultimate example of a company that has achieved relevance to modern culture with its buzzy releases and company led discussions around newsy topics like privacy.
“Ease” asks is the product easy to get, and is the brand easy to notice? Muench shared an example of a time when KFC marketing made a bold move to get the brand noticed: After the fried chicken franchise had to temporarily close one thousand stores in England because they had run out of chicken, the team designed an ad to apologize with the familiar KFC bucket bearing the letters “FCK.” When it comes to ease of access, Muench added, the undeniable best example is Amazon.
“Distinctiveness” requires that a brand be instantly recognizable which requires unique, ownable, and consistent brand assets. Coca Cola, with its familiar shapes, colors, and campaign themes, is the standout here, he said. In an embrace of this idea, KFC brought back The Colonel in its advertising—a distinctive brand asset—and accordingly saw a 5% jump in sales.
Crucial to enabling R.E.D.’s effectiveness, Muench said, is creating a “culture of courage.” In other words, marketers have to believe that it’s safe for them to be bold, take risks (along the lines of putting “FCK” on a KFC bucket), and get noticed whether with praise or heated criticism. Ultimately, he said, brands who are like a tennis player lobbing balls safely down the middle of the court won’t see the benefits of R.E.D. until they strive to slam the ball on the edge of the line to keep everyone watching on the edge of their seats.