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Wine Intelligence: ‘Continue marketing spend – it’s more effective now’

According to advice disseminated by Wine Intelligence last week, drinks brands should continue their marketing spend during the Covid-19 pandemic, because it’s “more effective than ever”.

Brands should not be tempted to cut their marketing budgets, because their spend will in fact be more effective during the current pandemic, says Wine Intelligence

In a five-point piece on wine marketing during and after Covid-19 written by Lulie Halstead at Wine Intelligence, the first, and most critical point, centred on brand promotional spending.

With a picture of a person shouting into a megaphone, Halstead, who heads up the drinks research agency, made her primary message, “Continue marketing spend – it’s more effective now”.

Explaining the reason for this, she wrote, “As companies cut marketing spend, each $ that is spent becomes more effective as it delivers a proportionally higher share of voice (SOV) amongst a total reduced spend across a category.”

Continuing, she noted, “This results in this spend being more ‘effective’ than ever with studies showing that ‘All things being equal, a brand whose share of voice (SOV) is greater than its share of market (SOM) is more likely to gain market share’ (Clarke, 2009) so increasing SOV leads to higher market share in the longer term, holding true also during times of recession.”

A similar view was previously shared by db following an interview with Tom Harvey, who is client director at alcohol marketing agency YesMore.

Commenting that sales in the off-trade are soaring, he said that there are plenty of reasons why producers, retailers, and even hospitality businesses should still spend money on advertising.

Harvey also told db that drinks brands must focus on this sudden shift in behaviour and “tap into an audience that they can keep loyal for years to come.”

Harvey said this is particularly important for emerging startups that have launched in recent months and have yet to build up an established consumer base. While people are stuck at home and have more time on their hands to experiment with new products “now is the time they are going to go elsewhere.”

Meanwhile, Halstead at Wine Intelligence penned four further key marketing lessons for the current pandemic, which we have reproduced over the following pages.

2. Focus on core brands

Lulie Halstead writes: “During times of stress, upheaval and economic crisis, consumers tend to revert to what’s familiar as it makes us feel ‘safer’.

“This is particularly true when shopping trips are more challenging and there is a need to switch to new purchase channels (e.g. online).

“Analysis of brand purchase during previous recessions has shown that ‘high market share brands’ tend to win at these times.

Its time to park more niche brand development that might distract and focus on what we know works well.”

3. Opportunity for agile innovation & NPD that focuses on relevant benefits

Lulie Halstead writes: “Alongside the focus on core brands (see point 2 above) there is opportunity for selected NPD and innovation.

“NPD that focuses on helping consumers through these times and solves direct problems can be effective, such as convenient & economical larger packaging formats and online engagement activities.

“Collaboration with competitors, in an environment where competition legislation is being adjusted, can provide also open up new opportunity.”

4. Avoid promotional discounts

Lulie Halstead writes: “There will be lots of channel pricing discrepancies and short-term promotions, but fixing brands at lower price points will keep them there, causing long-term viability issues.

“While these will be difficult time for many, consumers will continue to rely on treats, ‘min rewards’ and everyday luxuries in a time of recession, with wine will remain both a treat and a reward, whether priced at $5 or $50.”

5. Think local

Lulie Halstead writes: “In times of stress, our tendency as humans is to revert our focus to our local (& national) communities and this is even more true now in an era of lockdown and restrictions of movement.

“‘Local’ consumers have the ability to buy direct more easily, visit more frequently as movement restriction are lifted and feel engagement to support brands that are ‘closer to home’.”

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