Spending money on advertising is, indeed, money down the pan for many spirit brands (MW March 11). The article captured the heart of a debate currently in play in most boardrooms, not just those of spirit companies.
The best way to create a profit-focused plan is to deconstruct the brand, not into the different media but into its different user groups. Only then does the role and application of the different marketing techniques become apparent.
The brand’s consumer franchise should be segmented and analysed in terms of usage, customer loyalty and attitudes toward the brand and category, showing which customer groups are most important to the brand’s future health. A quantified brand equity model is the result, enabling companies to set objectives knowing the implications for brand profit, with the role of each main marketing discipline becoming clearly evident and the budget allocated according to customers’ worth and potential to change their behaviour (both positive and negative).
We commend this approach to spirits marketers (and, indeed, all marketers). Many product sectors are now characterised by shrinking consumer franchises and greater dependence on a small band of followers (the classic 80:20 rule). Add to this falling loyalty, a low frequency cycle and lack of real differential brand benefits leading to a lack of brand distinctiveness and relevance. And then add in low and falling penetration levels and a high advertising decay factor so that advertising must pay back over the advertising period and not over a longer period, and the future seems dim. This is exacerbated by the dependence on Christmas to achieve annual sales targets: a period when prices drop, promotions increase and the sales window of opportunity forever shrinks year by year. God knows what will happen in the Millennium Christmas!
I suspect, for most, it will show that network TV is inappropriate and that the route forward is to cement customer retention through a customer relationship marketing programme and the recruitment of the young through a strategic marketing programme with its focus on stylish outlets and a benefit-led proposition.
Perhaps, then, there will be celebratory drinks in the year 2001 accompanied by a move away from toilet language.