Building brand loyalty in wine

1. Building brand loyalty in wine
May 23rd, 2012
Wine Intelligence at London International Wine Fair
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© Wine Intelligence 2012

2. 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

3. To be effective, a brand must have. . . .
 Authenticity
 Authority “Customers must recognise that
 Friendliness you stand for something”
 Status - Howard Schultz, Starbucks
 Loyalty
 Irreverence
 Conscience
…all of which combine to make a brand identity, to provide
direction, purpose and meaning for a brand
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4. 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

5. 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
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6. 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
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7. Branding and the wine industry

8. 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
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9. Understanding subconscious behaviours is useful to
support our complex category
Category Social
complexity complexity
Range of SKUs Wine’s role in the social
environment
4
COMPLEXITIES
OF WINE
?
Situational Product
complexity complexity
Appropriateness of wine for Variability of style,
different occasions vintage and variety etc.
9

10. Brand loyalty and consumers

11. What are consumers loyal to?
Price
 ¾ of consumers
£5 - 8
usually buy…
what is on 61%
promotion
Varietal
Promotion
 1/3 usually buy 55%
wines from the 73%
same brand
Brand
35%
Origin
(Country
/ region) Own
label
30%
22% 11
SOURCE: Wine Intelligence Vinitrac® UK, May 2012, n=1,003 UK regular wine drinkers

12. Who are your consumers?
More interested in wine
Adventurous
Connoisseurs
Generation
INVOLVEMENT
Treaters 3 ML
2.7 ML
Mainstream-
at-Homers
Risk-averse Senior Sippers
Youngsters 8.3 ML
Less interested in wine
6.9 ML
Kitchen
5.1 ML
Casuals
2.9 ML
Younger
AGE Older
Size of bubble is proportional to size of population 12
SOURCE: Wine Intelligence Vinitrac® UK, March and July 2011, n=3,052 UK regular wine drinkers % in bubble = % of total value

13. Portraits at a glance: We group UK wine drinkers into 6
segments, each with a distinct relationship with wine
Adventurous Connoisseurs are middle-
aged confident wine drinkers who enjoy
experimenting within their wine lives
Generation Treaters are
Kitchen Casuals are younger wine drinkers who
10% 11%
middle-aged and infrequent are growing in confidence and
wine drinkers, who are experimenting with caution in
typically unengaged with the 9% their wine choice
category
Senior Sippers are 24%
older, less frequent
wine drinkers with a
limited interest in
wine 29%
Mainstream-at-Homers
18% are middle-aged ‘core’ wine
Risk-averse Youngsters
are younger wine drinkers, drinkers who view their wine
lacking in confidence and still drinking as a frequent treat
growing into the wine category
SOURCE: Wine Intelligence Vinitrac® UK, March and July 2011, n=3,052 UK regular wine drinkers
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14. Portrait groups overview
Adventurous Generation Mainstream- Risk-averse Senior Kitchen
Connoisseurs Treaters at-Homers Youngsters Sippers Casuals
Who are Younger,
Younger wine Middle-aged or
they? Middle-aged and conservative wine Older, less
drinkers, lacking older and
higher income drinkers who Middle-aged ‘core’ frequent wine
in confidence and infrequent wine
confident and experiment with wine drinkers from drinkers with a
with low interest drinkers, typically
experienced wine caution and use across the UK limited interest in
in the wine unengaged with
drinkers price as a proxy for wine
category the category
quality
Why do they Wine is an A relatively Wine is one of a
drink wine? Wine is a hobby, Wine is a social
A glass of wine at affordable drink affordable and set of alcoholic
which they enjoy drink that projects
the end of the day choice when healthy choice for drinks, which
exploring and an image of who
is a frequent treat spending time their occasional they consume
experimenting with they are to others
with friends alcoholic drink infrequently
Where? Drink at home and
Buy in
in the on-trade. Generally drink Pick up a bottle
Highest likelihood supermarkets, Almost
More often than wine at home, and on their way out to
among all groups to and mostly drink exclusively
others found in buy wine as a part see friends, and
drink wine in bars at home, although consume wine in
wine shops, but of the weekly rarely stock up on
and pubs occasionally also the off-trade
mainly shop in supermarket shop wine at home
in the on-trade
supermarkets
What do Looking for a
Like Senior
they drink? Large repertoire, “good value for Tend to stick to
Consume from a Sippers,
and enjoy trying Growing repertoire, money” everyday “easy choices” in
narrow repertoire consume from a
new styles and and enjoy trying wine – know their terms of brands,
that is driven by narrow repertoire
regions – but also new wines brands, but will try varietals and
low prices that is driven by
buy big brands anything on origins
low prices
promotion 14

15. Which brands they buy the most? Brand mapping
More interested in wine
Adventurous
Connoisseurs
Generation
INVOLVEMENT
Treaters 3 ML
2.7 ML
Mainstream-
at-Homers
Risk-averse Senior Sippers
Youngsters 8.3 ML
Less interested in wine
6.9 ML
Kitchen
5.1 ML
Casuals
2.9 ML
Younger
AGE Older
Size of bubble is proportional to size of population 15
SOURCE: Wine Intelligence Vinitrac® UK, May 2012, n=1,003 UK regular wine drinkers % in bubble = % of total value

16. Building brand loyalty
 Building brand loyalty is about relevance and knowing what
is important to consumers
 So… what is important to consumers?
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17. What is important for them when buying wine?
Value for money and consistency lead for all Portrait
groups
Story behind the wine
Unusual
More interested in wine
Producer’s passion
Anti-marketing
Natural/organic Adventurous
Connoisseur
Generation
INVOLVEMENT
Treaters 3 ML
2.7 ML
Reassurance
Wines that in taste / origin
bring back nice
memories Mainstream-
At-Homer
Risk-averse Senior Sippers
Youngsters 8.3 ML
Less interested in wine
6.9 ML
Kitchen
5.1 ML
Casuals
2.9 ML
Younger
AGE Older
Size of bubble is proportional to size of population 17
SOURCE: Wine Intelligence Vinitrac® UK, May 2012, n=1,003 UK regular wine drinkers % in bubble = % of total value

18. Communicating brand through labels

19. How do consumers view brands?
Consumers in focus groups place wines in groups based on perceived price and
frequency of discounting
STANDARD
DISCOUNT FAMILIARS / HIGH
BRANDS TV BRANDS QUALITY
(depending on Portraits group)
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Source: Wine Intelligence focus groups, London, April 2012. Groups conducted with Mainstream-at-Homers and Generation Treaters

20. 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
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21. Exercise
1. What does the brand owner want to communicate?
2. How do they communicate it?
3. Who is the target consumer?
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22. Thank you
© Wine Intelligence 2012
www.wineintelligence.com