9. Identifying the Product / Brand to be Marketed Flashcards
Name and describe the 4 stages in the “Marketing Lifecycle”
Introduction – The strategy should focus on getting the product into the market and gaining recognition and reputation. Initially, distribution may be limited to a few carefully-selected channels to begin with.
Growth – Encourage strong growth - product increasingly widely distributed and aimed at a broader target market, to
Maturity or stabilisation – Highlight the differences between the product and the other competing products which, by now, will have entered the market.
Decline – Declining sales - Extend the life cycle
1. improving the product,
2. updating the packaging,
3. reducing the price to make it more competitive
4. seeking new markets.
Each of these will need to be communicated to prospective customers through an appropriate marketing strategy.
What would happen without branding?
Products would simply become commodities.
Provided a product meets a certain standard of quality and style, the consumer would buy the cheapest option available and sales of the more expensive options would decline.
How does branding move a product away from becoming a commodity?
Consumers will want to buy that product even if it costs more than the minimum possible price. Successful brands command higher prices than similar generic products.
For example, a consumer may see two bottles of Marlborough Sauvignon Blanc on a shelf. One bottle is a mid-priced wine from a producer who is unknown to the consumer, whereas the other is ‘Cloudy Bay Marlborough Sauvignon Blanc’ and sells at a premium price. The consumer may choose the more expensive wine because they specifically want to buy what ‘Cloudy Bay’ represents and not just any example of a Marlborough Sauvignon Blanc.
Define a brand
The set of physical attributes of a product or service, together with the beliefs and expectations surrounding it.
A unique combination which the name or logo of the product or service should evoke in the mind of the audience
CIM
How does a brand create a positive image in the consumers mind
- Substance – Successful brands consistently deliver the same level of quality and style. For example, Champagne houses produce a non-vintage (NV) wine in a house style that is consistent from year to year and which is not marked by vintage variation.
- Consumer trust – As a result of this consistency, consumers come to trust a brand always to give them what they want. Many low-involvement consumers will therefore regularly buy their favourite brand of wine in preference to a cheaper, unbranded alternative which they do not know. This is an important factor in the success of supermarket own-brand wines.
- Consumer engagement – The consumer should have a relationship with the brand and will ask for it by name. They will feel that the brand’s marketing strategy is aimed directly at them (although this will clearly not be the case). Because of the ‘closeness’ of this relationship, successful brands are aware that even that the smallest change to their marketing strategy, such a minor label redesign, risks alienating loyal customers and will consider any such changes very carefully before implementing them.
- Brand story – Successful brands have a ‘story’ -creates an emotional attachment between the consumer and the brand.
- Price premium – Many successful brands command higher prices than similar generic products. Many consumers view higher prices as a guarantee of quality.
- Longevity – Many leading brands have been in existence for a long time. This is particularly true of leading Champagne brands (see Leading Wine Brands). Yet, whilst a number of the biggest wine brands overall are relative newcomers, some have also been in existence for a long time: for example, Hardys (1850s), Gallo (1930s) and Robert Mondavi (1960s).
- Strong brand name – Choosing the correct brand name is very important. The name must be easy to remember and, if the wine is to be sold in countries which speak different languages, easy to pronounce in all the relevant languages.
How is the brand ‘story’ of wine told?
- What is the producer’s history? Have they been producing wine for generations? In newer wine-producing regions, did their ancestors come from older wine-producing regions and bring vines with them? Did the producer have an interesting previous career?
- Where are the grapes grown? Do they come from a single vineyard, perhaps with an unusual or evocative name? What is the vineyard like? Is it steep, rocky, prone to mist in the morning etc.? What other vegetation or animal life is there in the vineyard?
- How is the wine made? Is there a particular philosophy used, such as e.g. organic, biodynamic or natural? Does the winemaker use any distinctive processes? Do they use unusual or especially old equipment?
- Is there a story behind the name of the wine, the label design or the bottle design?
This type of information creates a sense of authenticity; it links a wine to a particular place and a particular producer in a way that bulk production wines do not.
However, there is more to a successful story than just this. The story also covers matters such as price, where the wine is sold and how it is sold (‘marketing mix’). Significantly, it also includes what other people say about the product, making consumers part of the story.
Change brand name in different markets
In some instances, it may be beneficial to have different brand names in different markets. This is not merely a translation, but a different name usually that is designed to better appeal to and resonate with the target market. Successful examples that have been tailored to the Chinese market include Penfolds (奔富 ‘Ben Fu’), Lafite (拉菲 ‘La Fei’) and Casillero del Diablo (红魔鬼 ‘Hong Mo Gui’).
An important issue to consider is whether a name that is perfectly innocent in one language could be offensive or obscene in another: for example, a co-operative in Saint-Tropez created a rosé to which they and gave the brand name ‘Mist’ (Made in Saint-Tropez) – all went well until the wine was distributed in Germany where the word ‘Mist’ translates as (polite version) excrement.
Geographical Features
Many successful wine brands have names that contain references to geographical features (e.g. Cloudy Bay, Blossom Hill, Banrock Station, Felton Road, Terrazas de los Andes). It may be that, because wine is a product very closely linked to agriculture and the land, such names give the wine a sense of place (even if many are made up). The name of a company founder can also be a successful brand name as it links the product to its heritage and gives a sense of longevity. This is very common for Champagne (e.g. Krug) and fortified wines (e.g. Taylor’s Port). Some wine brands have not only a brand name but also a logo.
Trademarks
For a successful brand, protecting such assets through trademark registration is vital. In China, trademark rights are given to the first person/company to file an application, rather than being based on usage. Due to this, a number of companies that own well-known wine brands, have needed to enter expensive legal battles to gain the right to own their brand name in the Chinese market; for example Treasury Wine Estate’s battle to cancel the prior registration of the trademark ‘Ben Fu’ (used for their Penfolds brand) by a person not using the trademark for any commercial means.
Brand equity
Measuring the strength of a brand or its value to a company is not as easy as the measurement of a tangible asset. The value of the brand to its owner tends to be termed ‘brand equity’ and, typically, includes components such as brand awareness (the extent to which consumers are familiar with the brand) and brand image (how consumers perceive the brand), often amongst other measures. Brand equity is an abstract concept, with many people simply talking about positive and negative brand equity. However, some companies employ specialist consultants to calculate the financial value of their brand equity to include as an asset on their balance sheet.
Brand position
Where a brand ‘sits’ within a market and the cues used to indicate that position. It is often linked to retail price. Various ways of categorizing brand position within a market have been suggested, one common method being
value;
standard;
premium; and
super-premium.
However, the use of these terms, and the price ranges to which they apply, can vary considerably even within the same market.
A brand’s position is usually set at launch, having been intended to hit a particular price point. If competition increases, a brand may have to lower its position to remain competitive. It is rare, but nevertheless possible over time and with a lot of work, to raise a brand’s position: one example is Symington Family Estates’ efforts to raise the market position of their Cockburn’s Port brand by modernising production, updating the brand image and introducing new higher-end products.
Nevertheless, the cheapest end of the market should not be ignored as this offers the opportunity for high-volume sales. Some large wine companies, such as Concha y Toro and Hardys, have a variety of brands positioned in different parts of the market in an attempt to attract as wide a range of consumers as possible.
Private Label
As discussed in Supermarkets and Deep Discounters, in many countries, such as the USA and the UK, supermarkets, deep discounters and larger chains of bars and restaurants have created a range of wines from different regions under their own brand name, such as Sainsbury’s Taste the Difference in the UK, or an exclusive brand name, such as Kirkland Signature by Costco in the USA. These wines may be produced by well-known producers that have their own brands, but the producer’s name will not appear prominently on the private label, if at all. Private label products are only available from the retailer or restaurant that created the brand. The benefits of this for the retailer are detailed in Supermarkets.
Ladder Brand
These are intended to give consumers easy-to-understand ‘rungs’ to help them trade up to a higher-priced and better-quality expression of the brand. The whole range benefits from the identity of the most prestigious expression of the brand.
Ladder brands tend to have three rungs:
Accessible – the least expensive with the greatest distribution and the one that consumers will buy most often;
Stretch – affordable but only for special occasions;
Aspiration – the most prestigious expression of the brand. Most of the brand’s consumers will never buy it as it costs far more than they are willing or able to spend on wine. However, it should cast its super-premium identity over the entire ladder.
Ladder Brand example
Champagne:
Accessible – Pol Roger non-vintage;
Stretch – Pol Roger vintage;
Aspiration – Pol Roger Cuvée Winston Churchill.
‘soft brands’ (see below) bought by high-involvement consumers, for example in Burgundy:
Accessible – Bourgogne Rouge;
Stretch – Gevrey-Chambertin;
Aspiration – Le Chambertin Grand Cru.
When does ladder branding work or not work
Works:
Ladder branding works very well for luxury products such as Champagne
‘soft brands’ (see below) bought by high-involvement consumers, for example in Burgundy
Doesn’t work:
However, ladder brands tend to work less well with wines bought by low-involvement consumers. This is because, whilst the accessible and stretch rungs may work, few, if any, consumers who buy the accessible wine will be aware that the aspiration wine exists. As a result, there is no identity given by the aspiration wine to the rest of the ladder. In the worst situation the image of the entire ladder is based on the accessible wine and consumers could be reluctant to trade up even to the stretch rung as they believe it to be overpriced.
