competing against the big boys / strategic marketing lessons learned

Competing Against The Big Boys Competing Against The Big Boys

1


My Story: VP Marketing.

2


The siren song of craft spirits.

3


“If you know your enemy…”

4


“This is the business we have chosen.”

5


Outnumbered & outspent… Too many competitors. Clutter. Chaos.

6


Underdogs

7


The roots of Diageo: renegade, guerrilla, underdog marketers.

John G. Martin brought Smirnoff to the US in the late 1950s. Built and dominated the vodka category for 30 years.

Brought Jose Cuervo to the US in the 1970s. Built and dominated the tequila category for 30 years.

Invented the Prepared Drinks category prior to Prohibition*.

*Survived Prohibition with A1 Steak Sauce.

8


How ‘the big boys’ think: “When all you have is a hammer….”

9


What they are thinking about:

The “Big Boys” Analyst Headlines:

•  USA Is A Competitive, Mature Market.

•  Major Brands Struggling For Growth.

•  Emerging Markets Boost Growth.

•  Company Reorganizes To Enhance Emerging Market Focus.

•  Major Focus On Emerging Markets Required.

10


Neglected brands in the portfolio…

250 50 10 250 50 25 100 25 75

11


There are only two basic business strategies:

Low Price (implies low cost producer)

Differentiate This is your only option. But how?

12


De-positioning Your Competitor

Using their strength against them.

13


Own this: “Not for beginners.”

•  “We’re #1”: They sell millions of cases to the mass market.

•  Craft: “We are for people who can tell the difference between mediocre and special.”

14

De-positioning Big Brands


Craft, not Kraft.

15


•  They have a giant factory:

•  You have a distillery experience:

De-positioning.

16


De-positioning •  They have a nameless, faceless factory

manager:

•  You have a master distiller:

17


Differentiation: Think Beyond These Entry Level Ideas:

Smooth.

# of times distilled.

Where you’re from.

The quality of your water.

“Babes”

18


Don’t go here.

19


Differentiate: Tell Your Story to Consumers.

•  Stories connect us to concrete experience rather than an abstract.

•  Stories convey emotions.

•  You have a good story. –  Authentic –  Underdog

•  The Big Boys have a story too, but it’s

usually very tired, a fake, or boring.

20


Digital media is the great equalizer.

21


You can have your own tv channel.

22


Your story is newsworthy.

23


A story and a personality… without authenticity or craft.

24


How NOT to tell your brand story.

25


Strategic Consistency

26


Strategic Consistency

27


Lack of Consistency = Chaos.

28


God’s Incredients.

Alaska’s Spirit.

Wasilla’s Soul.

Toby’s Heart.

Consistency creates a Brand.

29


Consistency + Integration.

30


Publicity Trumps Advertising.

31


32

Publicity Trumps Advertising.


You can afford this: $250

33


$2.4 billion / year

34

Digital retailing: another equalizer.


Geography

•  The lure of NYC, LA and Chicago.

•  The path of least resistance often has a better ROI:

–  Black Velvet : •  #1 whisky New York state; no NYC •  Dominated Iowa and the midwest •  100k cases in Sacramento, Stockton

–  The Lesson of Tito’s.

35


Craft is not about price.

•  Its about “adding perceived value” and ‘convincing your target you’re worth it.”

•  Price competition is the slippery slope to nowhere.

36


Seek Category White Space

37


Smirnoff Absolut Stoli

Smirnoff

The Herd The Herd

Smirnoff

Absolut Stoli

The Herd

Grey Goose

The Herd

Grey Goose

Absolut Stoli

Smirnoff

CraB

38

Category Evolution 70’s Late 80’s Late 90’s Now


Category Positions

Star

Cheapest

Value

Legends

39


White Space

American Rum In 1763 there were 159 rum distilleries

in New England alone.

40

No pirates allowed.


White Space

The Aging Population Bubble.

41


42

White space


United Craft Distillers

43

A behind-‐the-‐scenes holding company that provides markeOng, sales, and financial experOse to select, high-‐potenOal craB disOllers

Canadian CraB Brand

CraB Tequila


Focus.

•  Not too many markets. •  Not too many accounts. •  Not too many flavors. •  Not too many products.

44


Recap

•  Small is beautiful •  De-positioning •  Tell Your Story •  Go digital •  Consistency •  Look for the White

Space •  Stay Focused.

45


46

Martin Pazzani Founder, United Craft Distillers

[email protected]

860-375 0426

Twitter @mpazzani Facebook “Martin Pazzani”