How wine brands behave?
Hervé Remaud, Professeur of Marketing
Academic Head – BEM Wine & Spirits MBA
Senior Research Associate – Ehrenberg-Bass Institute for
Marketing Science
Agenda
1. What is a wine brand?
2. Is brand important for consumers when buying wines?
3. How wine brands grow?
•
A 'rétrospective' approach
4. Anticipating consumers' expectations and identifying
consumers' preferences
•
•
A 'prospective' approach
Leading to market segmentation and brand positioning
5. Conclusion: what's a successful wine brand?
2
Hervé Remaud


PhD in Agro-food SMEs' marketing strategy
5 years at the University of South Australia – EhrenbergBass Institute for Marketing Science

At BEM since January 2010
 Academic Head of the Wine & Spirits MBA
 Head of the 6th BEM AWBR conference

Various research project conducted or in progress




Vins de Pays d'Oc: Promoting sustainable claims / credentials
UCCOAR: positioning PET wine bottle in the French market
JeanJean: repositining Les Embruns Brand
Auchan: French Wine Consumer real purchase behavior
3
What's marketing?
The process by which individuals and groups
obtain what they need and want by creating and
exchanging products and value with others”
4
Is branding critical to marketing?
5
What's any marketer key objective?
Increase sales …
o
o
Price increase: add value to your wines (greater WTP)
Volume increase:
•
•
Your clients buy more of your wine (at all / more often)
You get more (new) clients buying your wines
6
How?
Physical availability of your wine brand


Maximise the number of opportunities for consumers to
buy your wines
Penetration rate and 'numerical diffusion'
Mental availability and salience of your wine brand



Maximise the number of opportunities for consumers to
'think' of your brand(s), notice it, in a purchase situation
Be part of the consumers' repertoire of brands
Image, reputation, positioning
7
BUT
In the meantime …

So many competitive brands
o
o
And you're a small brand
With other beverages in competition (budget constraint)
8
BUT
In the meantime …

So many consumers
o
o
Who don't care of your brand
Having so many other aspects in mind
But… all brands are in the same boat!
So all brands share a similar situation
9
Agenda
1. What is a wine brand?
2. Is brand important for consumers when buying wines?
3. How wine brands grow?
4. Anticipating consumers' expectations and identifying
consumers' preferences
5. Conclusion: what's a successful wine brand?
10
What is a (wine) brand?
‘‘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’’
(American Marketing Association)
11
What is a (wine) brand?
‘‘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’’
(American Marketing Association)
‘‘a wine brand is a cluster of attributes which defines the
identity of the wine in the eyes of the buyer’’
(Lockshin, 2004)
12
What is a (wine) brand?
13
What is a (wine) brand?
14
What is a (wine) brand?
15
What is a (wine) brand?
16
What is a (wine) brand?
A cluster of attributes…









The commercial name
The region of origin
The country of origin
The grape variety (ies)
A medal
A sustainable claim
Vintage
Shape of the bottle
etc
PRICE
17
Wine brand styles
18
Agenda
1. What is a wine brand?
2. Is brand important for consumers when buying wines?
3. How wine brands grow?
•
A 'rétrospective' approach
4. Anticipating consumers' expectations and identifying
consumers' preferences
•
•
A 'prospective' approach
Leading to market segmentation and brand positioning
5. Conclusion: what's a successful wine brand?
19
Is brand important for consumers
when buying wines?
80
60
40
20
oh
ol
<1
3%
Dis
pla
y
lab
el
Fr o
nt
o
inf
Sh
e lf
lab
el
ck
Ba
Fo
od
t
ad
ab
ou
Re
Me
da
l
an
d
Br
n
Or
igi
Va
rie
ty
en
de
d
co
mm
Alc
-40
Re
-20
Ta
ste
d
0
-60
-80
20
Australia
New Zealand
UK
USA
China
Taiwan
France
Germany
Italy
Israel
Brazil
Is brand important for consumers
when buying wines?
21
Is brand important for consumers
when buying wines?
22
Is brand important for consumers
when buying wines?
23
Is brand important for consumers
when buying wines?
24
Is brand important for consumers
when buying wines?
25
Agenda
1. What is a wine brand?
2. Is brand important for consumers when buying wines?
3. How wine brands grow?
4. Anticipating consumers' expectations and identifying
consumers' preferences
•
•
A 'prospective' approach
Leading to market segmentation and brand positioning
5. Conclusion: what's a successful wine brand?
26
Understanding 'real' wine consumers'
behavior
Marketing facts found to be always true
 Your brand penetration rate
o
o
o
Number of people during a specific period of time who purchase
your brand at least once
Some consumers purchase that brand more often than other
consumers
Most consumers don't buy your brand
27
Understanding 'real' wine consumers'
behavior
Marketing facts found to be always true
 Your brand penetration rate
o
o
o
Number of people during a specific period of time who purchase
your brand at least once
Some consumers purchase that brand more often than other
consumers
Most consumers don't buy your brand
As for Coca-Cola brand, the majority of your
sales is generated by occasional buyers, even
very occasional buyers
28
Understanding 'real' wine consumers'
behavior
If your brand is purchased 5 times a year…
Purchase distribution of your brand
1200
Number of buyers
1000
800
600
400
200
0
0
1
2
3
4
5
6
7
8
Number of bottles of your brand bought in the period
9
10
29
Understanding 'real' wine consumers'
behavior
225
200
Number of buyers * Number of bottles bought
during a year
175
150
125
100
Frequency
75
50
25
0
1
51.00
26.00
101.00
76.00
152.00
126.00
210.00
178.00
330.00
252.00
953.00
Quantity
Source: Jarvis, 2005
30
Understanding 'real' wine consumers'
behavior
225
200
Number of buyers * Number of bottles bought
during a year
175
150
125
100
Buy 1, and the buy
2, etc during the
year
Frequency
75
50
25
0
1
51.00
26.00
101.00
76.00
152.00
126.00
210.00
178.00
330.00
252.00
953.00
Quantity
Source: Jarvis, 2005
31
Understanding 'real' wine consumers'
behavior
Light Buyers
Penetration
Market Share
Purchase freq.
Sparkling white
0,30
0,13
1,47
Shiraz
0,26
0,11
1,39
Cabernet Sauvignon
0,23
0,09
1,30
Cabernet blends
0,15
0,05
1,27
Shiraz blends
0,13
0,05
1,27
Riesling
0,11
0,04
1,25
Sauvignon Blanc
0,08
0,03
1,19
Merlot
0,06
0,02
1,24
Moyenne
0,17
1,32
Source: Jarvis, 2005
32
Understanding 'real' wine consumers'
behavior
Marketing facts always found to be true

Loyalty rate seldom varies between competitive brands

The double jeopardy rule
 Big brands are bought by more consumers who
purchase them more often
 Small brands are bought by fewer consumers who
purchase them less often
33
Understanding 'real' wine consumers'
behavior
Marketing facts always found to be true


o
o
Penetration rate, purchase frequency, loyalty rate
Implications:
You can't just double the purchase frequency rate of your
brand tomorrow
To grow, you have to grow your consumers base:
 'Numerical diffusion'
 Maximise the total number of consumers you could
reach
34
Understanding 'real' wine consumers'
behavior: duplication of purchase
Marketing facts always found to be true
 The duplication of purchase:
o
Allow marketers to analyse competition between brands (or
prices, grapes varieties, etc)
o
The duplication of purchase law means that a brand should
expect to have many of its buyers buying big brands and
fewer of its buyers buying small brands on a market
o
At the brand level, this laws shows what other brands 'my'
consumers/buyers also purchase
35
Understanding 'real' wine consumers'
behavior: duplication of purchase
Penetration
Grape varieties
83
74
71
71
70
59
52
47
46
39
35
28
25
54
Chardonnay
Shiraz
Sparkling white
Cabernet Sauvignon
Cabernet blends
Shiraz blends
Riesling
Merlot
Sauvignon Blanc
Muscat
Semillon
Semillon Chardonnay
Pinot Noir
Average
36
Understanding 'real' wine consumers'
behavior: duplication of purchase
Penetration
Grape varieties
83
74
71
71
70
59
52
47
46
39
35
28
25
54
Chardonnay
Shiraz
Sparkling white
Cabernet Sauvignon
Cabernet blends
Shiraz blends
Riesling
Merlot
Sauvignon Blanc
Muscat
Semillon
Semillon Chardonnay
Pinot Noir
Average
Ch
87
Sh
76
Sp wh Ca Sa Ca bl Sh bl
76
75
75
63
76
83
80
70
Ri
56
59
Me
51
53
Sa Bl
50
52
Mu
40
41
Se
39
42
Se Ch Pi No
33
28
34
29
Source: Jarvis, 2005
37
Understanding 'real' wine consumers'
behavior: duplication of purchase
Penetration
Grape varieties
83
74
71
71
70
59
52
47
46
39
35
28
25
54
Chardonnay
Shiraz
Sparkling white
Cabernet Sauvignon
Cabernet blends
Shiraz blends
Riesling
Merlot
Sauvignon Blanc
Muscat
Semillon
Semillon Chardonnay
Pinot Noir
Average
Ch
Sh
76
87
88
87
88
89
90
90
90
87
94
95
91
90
77
85
83
87
83
82
82
77
85
82
87
82
Sp wh Ca Sa Ca bl Sh bl
76
76
76
77
79
80
80
80
78
81
84
81
79
75
83
76
82
84
80
82
80
75
82
81
85
80
75
80
76
81
84
80
83
79
79
83
82
82
80
63
70
66
70
71
69
74
68
64
73
75
71
70
Ri
Me
Sa Bl
Mu
Se
56
59
58
59
59
61
51
53
53
55
55
59
56
50
52
51
52
52
53
60
54
40
41
42
41
43
42
43
47
41
39
42
39
40
40
43
48
45
51
37
61
67
58
72
64
70
62
56
57
61
62
63
57
48
68
59
66
55
41
45
43
42
54
49
44
Se Ch Pi No
33
34
34
32
32
36
35
38
36
33
45
28
29
29
30
29
30
34
33
36
28
36
29
32
35
31
On average during the year, 82% of wine buyers (all grape varieties included), bought Shiraz
Source: Jarvis, 2005
38
Understanding 'real' wine consumers'
behavior: duplication of purchase
Penetration
Grape varieties
83
74
71
71
70
59
52
47
46
39
35
28
25
54
Chardonnay
Shiraz
Sparkling white
Cabernet Sauvignon
Cabernet blends
Shiraz blends
Riesling
Merlot
Sauvignon Blanc
Muscat
Semillon
Semillon Chardonnay
Pinot Noir
Average
Ch
Sh
76
87
88
87
88
89
90
90
90
87
94
95
91
90
77
85
83
87
83
82
82
77
85
82
87
82
Sp wh Ca Sa Ca bl Sh bl
76
76
76
77
79
80
80
80
78
81
84
81
79
75
83
76
82
84
80
82
80
75
82
81
85
80
75
80
76
81
84
80
83
79
79
83
82
82
80
63
70
66
70
71
69
74
68
64
73
75
71
70
Ri
Me
Sa Bl
Mu
Se
56
59
58
59
59
61
51
53
53
55
55
59
56
50
52
51
52
52
53
60
54
40
41
42
41
43
42
43
47
41
39
42
39
40
40
43
48
45
51
37
61
67
58
72
64
70
62
56
57
61
62
63
57
48
68
59
66
55
41
45
43
42
54
49
44
Se Ch Pi No
33
34
34
32
32
36
35
38
36
33
45
32
35
28
29
29
30
29
30
34
33
36
28
36
29
31
Big grape varieties share more consumers whereas small grape varieties share fewer consumers
Source: Jarvis, 2005
39
Understanding 'real' wine consumers'
behavior: duplication of purchase
Penetration
Grape varieties
83
74
71
71
70
59
52
47
46
39
35
28
25
54
Chardonnay
Shiraz
Sparkling white
Cabernet Sauvignon
Cabernet blends
Shiraz blends
Riesling
Merlot
Sauvignon Blanc
Muscat
Semillon
Semillon Chardonnay
Pinot Noir
Average
Ch
Sh
76
87
88
87
88
89
90
90
90
87
94
95
91
90
77
85
83
87
83
82
82
77
85
82
87
82
Sp wh Ca Sa Ca bl Sh bl
76
76
76
77
79
80
80
80
78
81
84
81
79
75
83
76
82
84
80
82
80
75
82
81
85
80
75
80
76
81
84
80
83
79
79
83
82
82
80
63
70
66
70
71
69
74
68
64
73
75
71
70
Ri
Me
Sa Bl
Mu
Se
56
59
58
59
59
61
51
53
53
55
55
59
56
50
52
51
52
52
53
60
54
40
41
42
41
43
42
43
47
41
39
42
39
40
40
43
48
45
51
37
61
67
58
72
64
70
62
56
57
61
62
63
57
48
68
59
66
55
41
45
43
42
54
49
44
Se Ch Pi No
33
34
34
32
32
36
35
38
36
33
45
32
35
28
29
29
30
29
30
34
33
36
28
36
29
31
Could you observe any 'partition' in that market?
Source: Jarvis, 2005
40
Understanding 'real' wine consumers'
behavior: duplication of purchase
Marketing facts always found to be true

o
o
o
o
The duplication of purchase law:
If your brand is purchased, other brand are also purchased
If purchase at Carrefour, purchase also at Nicolas retail
store
If purchase of Chianti, also purchase of Venetian wines
If purchase of 5-7 € wines…
41
Agenda
1. What is a wine brand?
2. Is brand important for consumers when buying wines?
3. How wine brands grow?
4. Anticipating consumers' expectations and identifying
consumers' preferences
5. Conclusion: what's a successful wine brand?
42
Anticipating consumers' expectations
In most cases, real purchase data
are not available or difficult to
analyse, costly to produce
In a more prospective perspective,
one can wish to measure
consumers preferences and
WTP for a specific attribute
(grape variety, claim, etc) to
activate
Anticipating consumers' expectations
Various approaches to analyse these expectations
but:

We want to compare bottles with various attributes

We want to know the relative importance of variants for
an attribute

We want to know the WTP and expected market share

We want to know who these attributes appeals to
Anticipating consumers' expectations
Anticipating consumers' expectations
Anticipating consumers' expectations
Anticipating consumers' expectations
Anticipating consumers' expectations
Identifying your brand equity

What do you want your brand to be known for?

What associations do you want your brand to
Anticipating consumers' expectations
Segment 1
REGION 1
Conviviality
Good as a gif t
Happy hours
Cuisine du monde
Sea / Farniente
REGION 3
dif f icult to understand labels
REGION 4
Détente
With f amily / f riends
Réconf ort
REGION 2
Artisanat et SF
Patrimoine
Innovant
Among wines connaisseurs
Leader / environnement
De qualité variable
Digne de conf iance / Fiable
Leader / DD
REGION 5
Dépaysement
I would recommend to a
f riend
REGION 6
Chaleur / Terrasse au soleil
Socialement responsable
Elégance
Anticipating consumers' expectations
Anticipating consumers' expectations
For the aperitif
With a BBQ
To relax
Traditional
With family members
With friends
Elegant
Unusual
Anticipating consumers' expectations
Elégance
Brand 2
Tradition
Apéritif
Brand 1
Brand 3
En famille
Entre amis
Dépaysement
Brand 4
Détente
Grillades
Brand 5
Agenda
1. What is a wine brand?
2. Is brand important for consumers when buying wines?
3. How wine brands grow?
4. Anticipating consumers' expectations and identifying
consumers' preferences
5. Conclusion: what's a successful wine brand?
54
What's a successful wine brand?
Rule 1: A brand that is available everywhere!




Including if you're a small brand
Your consumers are not loyal…
Your consumers don't care so much about your brand
So you have to enlarge your consumers' base
55
What's a successful wine brand?
Rule 2: A brand that is distinctive on shelves
56
What's a successful wine brand?
Rule 2: A brand that is distinctive on shelves
57
What's a successful wine brand?
Rule 2: A brand that is distinctive on shelves
58
What's a successful wine brand?
Rule 3: Create
engagement, excitation,
talking, noise… in brief,
associations in people's
mind
59
What's a successful wine brand?
Rule 4: Do not target one too narrow group of
consumers (for example young, women, etc) but try to
satisfy as many consumers as possible
Consumers move
from one segment to
the other depending
on the occasion of
consumption…
60
Thanks for your attention
Questions?
Hervé Remaud, Professeur of Marketing
herve.remaud@bem.edu