competing against the big boys / strategic marketing lessons learned
DESCRIPTION
Lessons learned in creating competitive advantage. Mega brand marketing cases and lessons applied to strategic marketing advice for craft distillers. How to compete and thrive in a category dominated by big, rich, global brands.TRANSCRIPT
Competing Against The Big Boys Competing Against The Big Boys
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Competing Against The Big Boys Competing Against The Big Boys
My Story: VP Marketing.
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Competing Against The Big Boys Competing Against The Big Boys
The siren song of craft spirits.
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Competing Against The Big Boys Competing Against The Big Boys
“If you know your enemy…”
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Competing Against The Big Boys Competing Against The Big Boys
“This is the business we have chosen.”
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Competing Against The Big Boys Competing Against The Big Boys
Outnumbered & outspent… Too many competitors. Clutter. Chaos.
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Competing Against The Big Boys Competing Against The Big Boys
Underdogs
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Competing Against The Big Boys Competing Against The Big Boys
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.
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Competing Against The Big Boys Competing Against The Big Boys
How ‘the big boys’ think: “When all you have is a hammer….”
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Competing Against The Big Boys Competing Against The Big Boys
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.
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Competing Against The Big Boys Competing Against The Big Boys
Neglected brands in the portfolio…
250 50 10 250 50 25 100 25 75
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Competing Against The Big Boys Competing Against The Big Boys
There are only two basic business strategies:
Low Price (implies low cost producer)
Differentiate This is your only option. But how?
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Competing Against The Big Boys Competing Against The Big Boys
De-positioning Your Competitor
Using their strength against them.
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Competing Against The Big Boys Competing Against The Big Boys
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.”
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De-positioning Big Brands
Competing Against The Big Boys Competing Against The Big Boys
Craft, not Kraft.
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Competing Against The Big Boys Competing Against The Big Boys
• They have a giant factory:
• You have a distillery experience:
De-positioning.
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Competing Against The Big Boys Competing Against The Big Boys
De-positioning • They have a nameless, faceless factory
manager:
• You have a master distiller:
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Competing Against The Big Boys Competing Against The Big Boys
Differentiation: Think Beyond These Entry Level Ideas:
Smooth.
# of times distilled.
Where you’re from.
The quality of your water.
“Babes”
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Competing Against The Big Boys Competing Against The Big Boys
Don’t go here.
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Competing Against The Big Boys Competing Against The Big Boys
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.
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Competing Against The Big Boys Competing Against The Big Boys
Digital media is the great equalizer.
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Competing Against The Big Boys Competing Against The Big Boys
You can have your own tv channel.
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Competing Against The Big Boys Competing Against The Big Boys
Your story is newsworthy.
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Competing Against The Big Boys Competing Against The Big Boys
A story and a personality… without authenticity or craft.
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Competing Against The Big Boys Competing Against The Big Boys
How NOT to tell your brand story.
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Competing Against The Big Boys Competing Against The Big Boys
Strategic Consistency
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Competing Against The Big Boys Competing Against The Big Boys
Strategic Consistency
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Competing Against The Big Boys Competing Against The Big Boys
Lack of Consistency = Chaos.
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Competing Against The Big Boys Competing Against The Big Boys
God’s Incredients.
Alaska’s Spirit.
Wasilla’s Soul.
Toby’s Heart.
Consistency creates a Brand.
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Competing Against The Big Boys Competing Against The Big Boys
Consistency + Integration.
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Competing Against The Big Boys Competing Against The Big Boys
Publicity Trumps Advertising.
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Publicity Trumps Advertising.
Competing Against The Big Boys Competing Against The Big Boys
You can afford this: $250
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Competing Against The Big Boys Competing Against The Big Boys
$2.4 billion / year
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Digital retailing: another equalizer.
Competing Against The Big Boys Competing Against The Big Boys
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.
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Competing Against The Big Boys Competing Against The Big Boys
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.
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Competing Against The Big Boys Competing Against The Big Boys
Seek Category White Space
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Competing Against The Big Boys Competing Against The Big Boys
Smirnoff Absolut Stoli
Smirnoff
The Herd The Herd
Smirnoff
Absolut Stoli
The Herd
Grey Goose
The Herd
Grey Goose
Absolut Stoli
Smirnoff
CraB
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Category Evolution 70’s Late 80’s Late 90’s Now
Competing Against The Big Boys Competing Against The Big Boys
Category Positions
Star
Cheapest
Value
Legends
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Competing Against The Big Boys Competing Against The Big Boys
White Space
American Rum In 1763 there were 159 rum distilleries
in New England alone.
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No pirates allowed.
Competing Against The Big Boys Competing Against The Big Boys
White Space
The Aging Population Bubble.
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White space
Competing Against The Big Boys Competing Against The Big Boys
United Craft Distillers
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A behind-‐the-‐scenes holding company that provides markeOng, sales, and financial experOse to select, high-‐potenOal craB disOllers
Canadian CraB Brand
CraB Tequila
Competing Against The Big Boys Competing Against The Big Boys
Focus.
• Not too many markets. • Not too many accounts. • Not too many flavors. • Not too many products.
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Competing Against The Big Boys Competing Against The Big Boys
Recap
• Small is beautiful • De-positioning • Tell Your Story • Go digital • Consistency • Look for the White
Space • Stay Focused.
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Competing Against The Big Boys Competing Against The Big Boys
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Martin Pazzani Founder, United Craft Distillers
860-375 0426
Twitter @mpazzani Facebook “Martin Pazzani”