The January cover story of Inc. magazine (www.inc.com) has a fascinating case study of an American food sauce manufacturer with a branding problem.
Dave’s Gourmet has four product categories and 136 different products, many with completely different label and packaging designs – and no common branding theme.
A host of wine companies find themselves in a similar situation. Let me explain.
Wine companies like to segment their wines into three tiers – basic, premium and super-premium. Some even add an additional two tiers – ultra-premium and icon. And then they segment further, by varietal or blend.
Now if this sounds confusing to the average consumer, it might just well be, because mostly these wines are differentiated by price alone as neither the packaging, nor the branding, is doing the job it’s supposed to do â€“ and thatâ€™s building a consumer to consumer grapevine. In property itâ€™s location, location, location. In marketing itâ€™s communication, communication, communication.
Differentiating by price alone turns a product into a commodity and may make the consumers purchase decision simpler, but it lessens the value of the brand. And in most companies that’s where the real value resides.
Brand is often a word that is greatly over-used and adding another ‘me too’ product is not a branding strategy. Successful companies do things differently by creating entirely new markets and brands.
Dave was asked to make a choice. Did he want his company to function as a branded house or a house of brands? A branded house markets all their products under one brand. In a house of brands each has a distinctive design and marketing campaign. In a branded house everything flows more naturally, new products automatically gain acceptance because consumers identify personally with the parent brand, and it’s more cost effective for new product launches and brand extensions.
Dave took the path of least resistance and decided to keep the status quo. ‘But there’s an emotional side, especially for a small business like mine’ he says. I think Dave is missing a huge opportunity to rejuvenate his brand. He needs to look at his business and brand from a very different point of view. And this might just be one of the reasons why no wine brand has more than 2% global market share.
By Mike Carter. This article was originally published on www.wine.co.za