Building brand loyalty in wine May 23 rd, 2012 Wine Intelligence at London International Wine Fair Follow the discussion on Twitter #LIWF @wineintell Wine Intelligence 2012
Branding: the theory A brand is a name, term, sign, symbol or design, or a combination of these, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors (Kotler 2001) Brand is a deceptively simple concept. Everyone can immediately come up with an example of a typical brand, but very few people are able to propose a satisfying definition (Jean-Noel Kapferer, 2001) 2
To be effective, a brand must have.... Authenticity Authority Friendliness Status Loyalty Irreverence Conscience Customers must recognise that you stand for something - Howard Schultz, Starbucks all of which combine to make a brand identity, to provide direction, purpose and meaning for a brand 3
The product attribute fixation trap Brand identities that rely solely on product attributes, e.g. It tastes better It s better quality It goes faster It lasts longer Remember: Any non-trademarked attribute can be copied anyway Product attribute positioning assumes a rational customer (!) It limits brand extension strategies And reduces strategic flexibility 4
Brand positioning A brand position is the part of the brand identity and value proposition that is actively communicated to the target audience and that demonstrates an advantage over competitive brands Good positioning communicates: Emotional benefits ( you re worth it ) Rational benefits ( it does the job better than anything else ) How you can turn desire into action 5
If you re still wondering what the difference is between a product and a brand In the factory we make cosmetics. But in the store we sell hope. - Ron Perelman, Chairman of Revlon 6
Branding and the wine industry
In wine, we need to scale our brand ambitions to the following tasks: 1. How to get the consumer to notice you 2. How to get the consumer to feel reassured by you 3. How to get the consumer to remember you 8
Understanding subconscious behaviours is useful to support our complex category Category complexity Range of SKUs Situational complexity Appropriateness of wine for different occasions 4 COMPLEXITIES OF WINE? Social complexity Wine s role in the social environment Product complexity Variability of style, vintage and variety etc. 9
Brand loyalty and consumers
What are consumers loyal to? ¾ of consumers usually buy what is on promotion 1/3 usually buy wines from the same brand Varietal 55% Price 5-8 61% Promotion 73% Brand 35% Origin (Country / region) 30% SOURCE: Wine Intelligence Vinitrac UK, May 2012, n=1,003 UK regular wine drinkers Own label 22% 11
INVOLVEMENT Less interested in wine More interested in wine Who are your consumers? Generation Treaters 2.7 ML Adventurous Connoisseurs 3 ML Risk-averse Youngsters 5.1 ML Mainstreamat-Homers 8.3 ML Kitchen Casuals 2.9 ML Senior Sippers 6.9 ML Younger AGE SOURCE: Wine Intelligence Vinitrac UK, March and July 2011, n=3,052 UK regular wine drinkers Older Size of bubble is proportional to size of population % in bubble = % of total value 12
Portraits at a glance: We group UK wine drinkers into 6 segments, each with a distinct relationship with wine Kitchen Casuals are middle-aged and infrequent wine drinkers, who are typically unengaged with the category Senior Sippers are older, less frequent wine drinkers with a limited interest in wine Risk-averse Youngsters are younger wine drinkers, lacking in confidence and still growing into the wine category Adventurous Connoisseurs are middleaged confident wine drinkers who enjoy experimenting within their wine lives 24% 18% 10% 11% 9% 29% Generation Treaters are younger wine drinkers who are growing in confidence and experimenting with caution in their wine choice Mainstream-at-Homers are middle-aged core wine drinkers who view their wine drinking as a frequent treat SOURCE: Wine Intelligence Vinitrac UK, March and July 2011, n=3,052 UK regular wine drinkers 13
Portrait groups overview Adventurous Connoisseurs Generation Treaters Mainstreamat-Homers Risk-averse Youngsters Senior Sippers Kitchen Casuals Who are they? Middle-aged and higher income confident and experienced wine drinkers Younger, conservative wine drinkers who experiment with caution and use price as a proxy for quality Middle-aged core wine drinkers from across the UK Younger wine drinkers, lacking in confidence and with low interest in the wine category Older, less frequent wine drinkers with a limited interest in wine Middle-aged or older and infrequent wine drinkers, typically unengaged with the category Why do they drink wine? Wine is a hobby, which they enjoy exploring and experimenting with Wine is a social drink that projects an image of who they are to others A glass of wine at the end of the day is a frequent treat Wine is an affordable drink choice when spending time with friends A relatively affordable and healthy choice for their occasional alcoholic drink Wine is one of a set of alcoholic drinks, which they consume infrequently Where? Drink at home and in the on-trade. More often than others found in wine shops, but mainly shop in supermarkets Highest likelihood among all groups to drink wine in bars and pubs Generally drink wine at home, and buy wine as a part of the weekly supermarket shop Pick up a bottle on their way out to see friends, and rarely stock up on wine at home Buy in supermarkets, and mostly drink at home, although occasionally also in the on-trade Almost exclusively consume wine in the off-trade What do they drink? Large repertoire, and enjoy trying new styles and regions but also buy big brands Growing repertoire, and enjoy trying new wines Looking for a good value for money everyday wine know their brands, but will try anything on promotion Tend to stick to easy choices in terms of brands, varietals and origins Consume from a narrow repertoire that is driven by low prices Like Senior Sippers, consume from a narrow repertoire that is driven by low prices 14
INVOLVEMENT Less interested in wine More interested in wine Which brands they buy the most? Brand mapping Generation Treaters 2.7 ML Adventurous Connoisseurs 3 ML Risk-averse Youngsters 5.1 ML Mainstreamat-Homers 8.3 ML Kitchen Casuals 2.9 ML Senior Sippers 6.9 ML Younger SOURCE: Wine Intelligence Vinitrac UK, May 2012, n=1,003 UK regular wine drinkers AGE Older Size of bubble is proportional to size of population % in bubble = % of total value 15
Building brand loyalty Building brand loyalty is about relevance and knowing what is important to consumers So what is important to consumers? 16
INVOLVEMENT What is important for them when buying wine? Value for money and consistency lead for all Portrait groups Less interested in wine More interested in wine Story behind the wine Unusual Anti-marketing Natural/organic Generation Treaters 2.7 ML Adventurous Connoisseur 3 ML Producer s passion Wines that bring back nice memories Risk-averse Youngsters 5.1 ML Mainstream- At-Homer 8.3 ML Reassurance in taste / origin Kitchen Casuals 2.9 ML Senior Sippers 6.9 ML Younger SOURCE: Wine Intelligence Vinitrac UK, May 2012, n=1,003 UK regular wine drinkers AGE Older Size of bubble is proportional to size of population % in bubble = % of total value 17
Communicating brand through labels
How do consumers view brands? Consumers in focus groups place wines in groups based on perceived price and frequency of discounting DISCOUNT BRANDS STANDARD FAMILIARS / TV BRANDS (depending on Portraits group) HIGH QUALITY Source: Wine Intelligence focus groups, London, April 2012. Groups conducted with Mainstream-at-Homers and Generation Treaters 19
UK consumers expect higher price out of traditional labels Expected price Mean expected price if found in shop where usually buy wine Base=All UK regular wine drinkers (n=1,016) 6.95 4.67 Stately Light-hearted Source: Wine Intelligence, Vinitrac UK, March 2011, n=1,016 UK regular wine drinkers 20
Exercise 1. What does the brand owner want to communicate? 2. How do they communicate it? 3. Who is the target consumer? 21
Thank you www.wineintelligence.com Wine Intelligence 2012