Wine’s Apparent Neglect of MarketingBy Jonathan Cahill
Marketing is a pervasive theme in modern business. This is understandable when it is recognised what a magical effect it can have on the fortunes of a product. Unfortunately this contribution is often obscured by it being seen by some as a sort of voodoo art whose use is akin to selling snake oil. This is often due to a perception that marketing is complicated and expensive. Much of this prejudice stems from confusion as to its actual nature.
When using any term there needs to be a clear, commonly agreed, understanding of its meaning – that’s the purpose which dictionaries serve. With the word “marketing” this seems to be elusive. A simple test is to ask anyone involved in marketing to define it. Often this question is met with incomprehension or garbled mantras. If someone is unclear as to what a concept means then, by a simple process of deduction, they are operating from a rather shaky foundation when practicing it. This results in the many misapprehensions around marketing.
There are several supposed definitions of marketing. The American Marketing Association states that it is: “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”. This gobbledygook contributes little other than confusion. It is not even a definition, in the sense of expressing the essence of the concept, rather it is merely a description. There are other so-called definitions. One cliché is that it involves meeting consumer needs. But if those citing this would reflect for a moment they would realise that this is the province of new product development rather than marketing. The essence of marketing is competition, so this needs to be part of its definition. A more grounded definition is: “the achievement of competitive advantage through meaningful differentiation, in terms of product or perceptions, and the exploitation of this to the full.” At its core is the importance of being clear about how your product is different, particularly in terms of perceptions.
Contrary to beliefs, marketing does not need to be either complicated or expensive, often all that is needed is thought and curiosity. A good example was the Pilchard in the UK. This was a fish whose name was toxic, being perceived at a level similar to Spam luncheon meat. Curiosity revealed that the Pilchard is a member of the Sardine family, only a little larger than other varieties. So they were called ‘Cornish Sardines’ – an invented name, but an accurate description.
In 1997 the average price paid to fishermen for a landed kilo of ‘Pilchards’ had been £0.015 and the total annual catch was seven tons. By 2003 the average price paid for a kilo of ‘Cornish Sardines’ – the very same fish – was £1.00, a 67 times increase in value[i]. By 2008 the quantity landed was 1,596 tons. The reality had not changed, just the perception based on a simple change of name which cost virtually nothing.
A good example of a similarly toxic name in the wine industry is “Sherry”. This covers a broad spectrum of what are, in effect, different wines but they are all put under this umbrella because represents the region. Unfortunately the default perception of Sherry in the UK is of something slightly sweet and old-fashioned and this is inevitably applied to all Sherries, even to Fino and Manzanilla, the dry wines with the greatest growth and potential. The name Sherry is like an Albatross around their neck.
Moving on from the word “marketing” there is another, directly linked to it, which appears to confuse even more – “brand”. Because it is a term which is used frequently, it has come to be referred to as if it is a thing. In fact it is nothing more than subjective thoughts, being the sum of perceptions the consumer has of a particular product. Unsurprisingly, consumers’ behaviour in relation to a product is based on their thoughts, which are gathered in the concept of a brand – much like a bundle of reeds. A good distinction is that a product is something people buy for its functional benefits, whereas a brand they buy for emotional benefits. This emphasis on the emotions is particularly potent as the rational basis for choice has been proven to be shaky by many, such as the Nobel prize winner Daniel Kahneman. As Alexander Segart, managing director of a Swiss PR company, which had great success in political advertising, said: “we’re successful because we know how to reduce information to the lowest level, so people respond to it without thinking”.
A key basis for emotions is a relationship. Gavin Fairburn of Leeds University noted that, “storytelling is central to most of human life. It is also the most startlingly simple and direct way l know of encouraging the development of empathy”. In his book, Mindwise, Nicholas Epley gave more flesh to this when he stated that: “you define yourself not by the attributes that make you the same as everyone else – has two arms, two legs, breathes air – but rather by the attributes which make you different from everyone else – spent time in the Peace Corps, works as a physicist, loves to go fishing, and so on.[ii]”
The wine industry has stories in abundance and has probably the greatest emotional depth of any food or drink category. Sometimes great store is put by the French term “terroir”. But this refers to the physical aspects of a wine, the soil, location, weather, etc which appeals to the rational side. Of much greater potential is what might be called “emotional terroir”: its history, those who make it and any unique anecdotes. Being emotional, these stories have an even greater pull in terms of establishing a clear differentiation than just reciting product details and are far more durable as, stemming directly from the particular brand, they are unique. As Bill Bernbach, one of the greats of advertising said: “if they don’t feel it, nothing will happen.” But most in the wine industry seem to fail to recognise this.
This blind spot was illustrated by a newspaper wine critic in the UK who wrote how, when considering a wine, “it’s the one with the more straightforward package that gets my cash every time – the one that suggests the producer has spent their time and money on the contents rather than dreaming up an unnecessary ‘brand story’”. This rather short-sighted perspective demonstrated a failure to realise that a story needs only a little curiosity and does not need ‘dreaming up’. If it comes from the wine itself, it’s already there – no dreaming required. Also it is difficult to understand why something which can provide such competitive leverage should be deemed “unnecessary”. Ironically, this disdain was immediately contradicted the next week when the same critic, on talking of another wine, commented on the fact that it was from a small producer who made it as a sideline and talked about it being an example of “little-guy revenge stories”.
Such scepticism in the face of anything which might smack of marketing indicates how much of the wine industry, through neglecting its full potential, has become prey to price promotions and fostered a tendency to commoditise. Shoppers aren’t naive, regular sales promotions encourage them to wait for the next sale rather than purchase a product at full price. Ask anyone in the wine department of a supermarket if a particular wine sells well and the frequent response is: “when it’s on promotion”. The consumer is educated to buy whatever is on offer rather than being drawn by a wine’s individual merits.
The power of stories was illustrated by LEGO in its Architecture line. This was originated by a Chicago architect who built skyscrapers made with LEGO. The first example was a model of the Sears (now Willis) Tower in Chicago. As well as instructions, a booklet came with the bricks which had a brief profile of the building’s architect, the origin of the design and the architectural features. The inventor explained that: “l wanted to tell a story, not just sell a box of bricks.[iii]”
LEGO bricks were already twice the price of equivalent bricks although any manufacturer could make them, the last patent having expired in 1989. But LEGO Architecture increased this premium, thanks to the clear differentiation through the stories. A box of 70 normal LEGO bricks sold for $7.99, whereas an Architecture box, containing the same number of the same standard bricks, sold at $19.99. Since the line’s launch in 2008 the sales increased by 900 per cent in 2009, 350 per cent in 2010 and 200 per cent in 2011. A LEGO executive described the range as “very, very profitable.”
Wine too can be very, very profitable. In 2011 Cheval Blanc was reported to have made profits of €14 million on sales of €22 million and Chateau Lafite Rothschild made €70.2 million on a turnover of €80.8 million[iv]. Yet their ability to command the prices which produced such profits was not based on rational factors alone, but rather on the perceptions of the consumer. The power of what were, effectively, brands.
The role of perceptions was shown by Frederic Brochet. He served 57 French wine experts with two identical mid-range Bordeaux wines, one in an expensive Grand Cru bottle the other in a cheap Vin de Table bottle. The wine in the expensive bottle was preferred by a large majority. They used positive terms such as “excellent”, “complex”, “good” and “long” more than twice as often when describing this wine as opposed to when they talked about the wine in the cheap bottle. For this latter they used negative terms such as “unbalanced”, “short”, “flat” and “simple” more than twice as often. Yet it was exactly the same wine[v].
This is a clear illustration of how perceptions rather than reality can influence choice and further emphasises the potency of having a firm position in the consumer’s mind. These are neatly summarised in the term “brand”. This is the reality of human behaviour, yet the industry insists on believing that only focus on physical characteristics can establish differentiation. In terms of taste, a largely subjective area, descriptions appear to be a semantic challenge as to how intricately the writer can articulate their subjective feelings. There is often much discussion as to how intelligible these often ornate descriptions are to consumers. Even should they be effective, they can only be effective once, when the consumer comes new to the wine. Once it is tried then any descriptions become superfluous, for that is the only criterion which concerns the consumer – whether they like it. Consequently taste is not an enduring platform but rather a one trick pony.
In the drinks area an example of how simple stories have worked has been the success of Jack Daniel’s[vi], which has built itself into the sixth-biggest drinks brand in the world and the single biggest whisk(e)y brand by differentiating itself through a series of individual stories firmly rooted in its home town of Lynchburg and in the people who make it. The style of these was summed up by their being referred to as “postcards”. Such an approach is a good illustration of the “emotional terroir” of a brand referred to in the discussion about wines, where the positioning springs directly from the intrinsic nature of the brand’s context and the firm emotional base this provides. Unlike the default position of the wine industry, there is seldom any mention of taste nor of the product. An enduring story needs to be something which they cannot directly experience, as this then becomes redundant as a descriptor, but rather something which can become part of their personal perception of the brand. As the creative director for Jack Daniel’s said: “We’re not selling a bottle of booze. We’re selling a place.” The campaign has lasted for over 60 years.
With regards to wine there is also the fact that many wines are made from the same grape variety. Usually a particular grape has fairly similar generic taste characteristics and variations are quite subtle. Consequently it is difficult to fulfil the key requirement of marketing by differentiating one wine from another of the same variety. There are 56 Sauvignon Blancs listed on Waitrose’s website. Usually these resort to a simple rearranging of the adjectives which are appropriate for the generic properties of this wine. “Zesty”, “crisp” and “citrus” are words which regularly feature. When comparing these different descriptions the overriding impression is of verbal wallpaper with minor variations in design as opposed to the articulation of clear differences for one Sauvignon Blanc against another. As in Mindwise, referred to above, they are largely defining themselves by the attributes that make them the same as everyone else. As differentiation is the basic task when marketing a product, then the role of such writing appears to add little to this endeavour.
By contrast, an example of establishing an enduring position was provided by Lanson Champagne, making the brand personal to the consumer. It suggested that people create their own “Champagne Moment”, which reflected the special occasion aspect of Champagne, so taking a generic aspect of Champagne and making it Lanson’s. The brand outperformed the market by 32 per cent and had an increase in prices of 10 per cent above the average. Turnover exceeded projections by £10 million.
Wine provides one of the richest soils in which marketing can thrive. The reason that this seldom seems to be recognised and fully exploited is no doubt understood by those within the industry, but it is difficult for those outside to fathom.
Jonathan Cahill has many years experience in advertising, research and marketing, both in the UK and overseas. Currently he lectures in marketing. He has written two books on marketing: ‘Igniting the Brand – Strategies that have shot brands to Success’, and ‘Marketing Rethink – Reassessing the Roots, Practice and Diversions of Marketing’. A third book: ‘Making a Difference in Marketing – the Foundation of Competitive Advantage’ is published on 14 March.
[i] “Who are you calling Pilchard? It’s ‘Cornish sardine’ to you…”, The Independent on Sunday, 17 August 2003
[ii] Nichols Epley, Mindwise, Allen Lane, 2014, p.126
[iii] David Robertson and Bill Breen, Brick by Brick, Random House, 2013: p.205
[iv] The Times, 9th June, 2011
[v] Robin Goldstein and Alexis Herschkowitsch, The Wine Trials, Fearless Critic Media, 2008