Chapter 9: Identifying the Product/Brand to be 9 Marketed

Question 1

Marketing Overview (Product)

Answer 1

• Marketing is about a product (or a range of products): a bottle of wine, a wine shop, bar or restaurant.
• Understanding the product’s characteristics is essential to a successful marketing campaign (see Product in Devising the Marketing Strategy).
• The product may be brand new, launched to fill a perceived gap in the market that may have been identified by the company through market analysis or as a result of market research.
• Alternatively, the marketing strategy may be for an existing product, which may or may not have been updated.

Question 2

Product Life Cycle

Answer 2

• Sales of most new products start slowly, but, if the product establishes itself in the market, will then start to grow quickly as more and more people buy the product.
• Eventually, sales will stabilise as there are fewer people left who have not yet bought it or perhaps competition increases, and finally sales will begin to decline.

Question 3

Product Life Cycle (Marketing Strategies)

Answer 3

A different marketing strategy is needed in each of the stages:
* Introduction
* Growth
* Maturity or Stablization
* Decline

Question 4

Product Life Cycle (Introduction)

Answer 4

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.

Question 5

Product Life Cycle (Growth)

Answer 5

The product should be increasingly widely distributed and aimed at a broader target market to encourage strong growth.

Question 6

Product Life Cycle (Maturation & Stablization)

Answer 6

The strategy should highlight the differences between the product and other competing products, which will have entered the market by now.

Question 7

Product Life Style (Decline)

Answer 7

• Faced with the prospect of declining sales, a company may take steps to extend the life cycle, perhaps by improving the product, updating the packaging, reducing the price to make it more competitive or seeking new markets.
• Each of these will need to be communicated to prospective customers through an appropriate marketing strategy.

Question 8

Branding (Goal of Branding)

Answer 8

• Branding seeks to move a product away from being a commodity to the extent that consumers will want to buy that product even if it costs more than the minimum possible price
• Example buying cloudy bay over cheaper new zealand SVB

Question 9

Brand Definition

Answer 9

• The CIM defines a brand as ‘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’.

Question 10

Branding (needs for a successful brand)

Answer 10

To be successful, a brand must create a positive image in the consumer’s mind and this can be achieved in a number of ways:

• Substance
• Consumer trust
• Consumer engagement
• Brand story
• Price premium
• Longevity
• Strong brand name

Question 11

Branding (Substance)

Answer 11

• 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 is not marked by vintage variation.

Question 12

Branding (Consumer Trust)

Answer 12

• 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 that they do not know.
• This is an important factor in the success of supermarket own-brand wines.

Question 13

Branding (Consumer engagement)

Answer 13

• 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.
• 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.

Question 14

Branding (Brand story)

Answer 14

• Successful brands have a ‘story’ to which consumers can relate – this creates an emotional attachment between the consumer and the brand.
• Many marketers believe that the story of a product or brand is one of its most valuable attributes. Research has shown that many consumers, especially millennials are attracted to products with strong stories.

Question 15

Branding (Price premium)

Answer 15

• Many successful brands command higher prices than similar generic products. Many consumers view higher prices as a guarantee of quality.

Question 16

Branding (Longevity)

Answer 16

• Many leading brands have been in existence for a long time. This is particularly true of leading Champagne brands.
• Yet, while a number of the biggest wine brands overall are relative newcomers, some have also been in existence for a long time: for example, Gallo (1930s) and Robert Mondavi (1960s).

Question 17

Branding (Strong brand name)

Answer 17

• 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 that speak different languages, easy to pronounce in all the relevant languages.
• An important issue to consider is whether a name that is perfectly innocent in one language could be offensive or obscene in another
• 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.

Question 18

Branding (Strong brand name: multiple names)

Answer 18

• 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 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 (‘Ben Fu’), Lafite (‘La Fei’).

Question 19

Branding (Strong brand name: geographical features & Founders)

Answer 19

• 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. (cloudy bay, felton road)
• 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.

Question 20

Branding (trademark Protection)

Answer 20

• 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. Because of 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.

Question 21

Branding (measuring value of brand)

Answer 21

• 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, and brand image, often among 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.

Question 22

Different types of brands.

Answer 22

• Brand position
• Private label
• Ladder brand
• Soft brand
• Luxury brand

Question 23

Brand Position

Answer 23

• 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 categorising brand position within a market have been suggested, one common method being:
• value
• standard
• premium
• super-premium
• However, the use of these terms, and the price ranges to which they apply, can vary considerably even within the same market.

Question 24

Brand Position Changes

Answer 24

• 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.

Question 25

Private labels

Answer 25

• 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
• 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.

Question 26

Ladder brand

Answer 26

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

1. Accessible
2. Stretch
3. Aspirational

Question 27

Ladder Brand (Accessible)

Answer 27

The least expensive with the greatest distribution and the one that consumers will buy most often;

Question 28

Ladder Brand (Stretch)

Answer 28

affordable, but only for special occasions;

Question 29

Ladder Brand (aspirational)

Answer 29

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.

Question 30

Ladder Brand Champagne Example

Answer 30

1. accessible – Pol Roger non-vintage;
2. stretch – Pol Roger vintage;
3. aspiration – Pol Roger Cuvée Winston Churchill.

Question 31

Ladder Brand Burgundy Example

Answer 31

1. accessible – Bourgogne Rouge;
2. stretch – Gevrey-Chambertin;
3. aspiration – Le Chambertin Grand Cru.

Question 32

Ladder Brand Disadvatages

Answer 32

• Ladder brands tend to work less well with wines bought by low-involvement consumers.
• This is because, while 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.

Question 32

Soft Brand

Answer 32

• A term sometimes used to describe any cue used by a consumer when choosing to buy one product in preference to another. In the wine industry, this could be a country of origin (e.g. ‘Brand Australia’); region (e.g. Rioja); geographical indicator (e.g. Pouilly-Fumé); grape variety (e.g. Merlot); or even a style of wine (e.g. oaky Chardonnay).
• The concept of a soft brand is controversial. Some marketing professionals are happy to accept the existence of soft brands and to use the term; others do not consider these to be brands at all. Yet a soft brand does share many, but not all, the characteristics identified as features of leading brands

Question 33

Soft Brands in wine marketing

Answer 33

• Many wine-producing countries and regions promote themselves successfully in this way and the significance of geographical indicators in creating a regional identity of brand is increasingly acknowledged
• While Sauvignon Blanc is produced around the world, only wine from a small, specifically designated area in the Loire Valley can be labelled Pouilly-Fumé AOC. Most producers within the appellation are too small to become a well-known brand, but they can benefit from the AOC’s reputation to market their wines
• Even outside the EU, GIs are being created largely for marketing purposes: witness the ever-growing number of AVAs being created in California.

Question 33

Luxury Brand

Answer 33

• As with ‘fine wine’, there is no agreed definition of what makes a luxury brand. These tend to be super-premium priced wines that only a very few consumers can afford, including Champagne prestige cuvées, Bordeaux Premier Cru Classé and the most expensive Californian wines.
• Luxury brands promote the idea that they are scarce even if, as in the case of many Champagnes, this is not always the case. This perceived scarcity is one reason why luxury brands can usually charge a large premium.

Question 34

Luxury Brand Marketing

Answer 34

• The marketing may also promote other assets of the product, such as the quality of the fruit or of the vineyard in which it was harvested, no expenses spared during winemaking, a rich heritage, etc.
• Every aspect of marketing strategy for the product is likely to promote the idea of luxury; for example, sponsorship of exclusive and luxury events, and positioning in the most upmarket retailers and on the wine lists of fine dining restaurants.