What does it take to build a brand? Brand definitions are innumerable, and almost every author in the field has his or her own. Although they can be useful, definitions tell us very little about how to build a brand. Definitions are static: they take the brand for granted. Building the brand is dynamic.
In general, in our executive seminars, when we ask attendees how to build a marketleading brand, typical answers include advertise, create an image, and develop awareness. They are mostly answers that focus on communication.
Instead of answering that question frontally, we shall look at an interesting case: how did an unknown Australian company, Orlando Wyndham, build the UK’s leading bottled wine brand, Jacob’s Creek? This brand is now the leader in volume and the leader in spontaneous brand awareness, with a very strong image. All that was achieved without mass-market advertising before 2000. It is most interesting also to note that between 1984 and 2000, the UK wine market doubled in size. What then was needed to create a successful wine brand in the UK mass market?:
These five steps to build a brand in the market may seem straightforward and easy to follow. Actually they are not. French wines could not meet the conditions, while New World wines, and Australian wines in particular, could. Let us examine why, for each condition.
Old World wines are based on one principle. The quality of the wine is totally dependent on natural factors: the specific type of soil, the sun, the climate, the air. As a consequence, hundreds of wines have been created, differentiated by the wine-growing area, or even specific vineyard, from which they come, and its unique characteristics. Each vineyard claims its soil is better than that of competitors, for example. As a consequence, the product is fragmented. For example, behind each of the 5,000 marques of Bordeaux wine there is a different grower, usually rather small. This prevents suppliers from responding to the first condition for building a brand: enough volume.
Old World wines have tried to secure their market leadership by transforming their wineproducing practices into laws. Producing a Burgundy or a Bordeaux wine means obeying these laws. What was intended as a quality control system has become a major block against innovating to address the competition from emerging growing areas.
If a wine is to be called a Pauillac, a Graves or whatever (these are subregions within Bordeaux), its producers are not permitted to mix the grapes from this region with grapes grown anywhere else, or only at a very small level. If one season is dry they cannot irrigate; nor can they add chemicals to moderate the differences in quality caused by differences in climate from year to year. Because they respect these laws, Old World wines have an inherent variability: they are the true produce of nature, more than the produce of man. There is much more variety of soils and variance in climate from year to year in Europe than in Australia, California or Argentina, and this too leads to differences between one Old World wine and another.
Branding means suppressing this variability: to secure the same taste from year to
year, one must master the art of blending grapes coming from very different soils – and regions, if one of them is underproducing. Australia, as a relatively newly settled country without a long wine-growing tradition, had few laws governing wine producing; it could do it. It was not so for wine makers from Bordeaux or Burgundy.
The same holds true for getting the right quality at low production costs. French wine makers are not allowed to use mechanized harvesting: they are required to harvest by hand. They cannot irrigate, and so radically increase the productivity of their soils; they cannot make use of chemical additives. In France too, wine is stored in barrels as a rule. In Australia wine is kept in huge aluminium tanks, and wood cuttings are put in the wine: there is more wood surface in contact with the wine, which accelerates the process of giving the wine the right ‘woody’ taste. Time being money, this reduces production costs.
Point four concerns getting the right taste to appeal to the target market. New World wines have no tradition to respect: they started from the customer. They adapted their product to the taste of customers in emerging markets, used to drinking soft drinks and beer. Their wine had to be fruit-driven, very soft, very smooth, easy to drink for all occasions. Some varietals (types of grape) such as Chardonnay and Semillon Chardonnay could deliver such a taste. These were not the varieties that made the reputation of Bordeaux or Burgundy wines.
One other dimension of being client-driven is language. Marketing research showed that the English were still broadly an ‘island race’: many of them are not well versed in European languages and the cultural traditions of Continental Europe. Unlike the maze of thousands of hard-to-pronounce wine names from Europe, Jacob’s Creek is an English name, and the wording on the wine labels is written in English. Until recently French wines rarely provided any labelling information in English. Furthermore, Australia is part of the Commonwealth, and some English people identify more closely with it than with France.
In addition, each New World country has become associated with a small number of grape varieties. This means that consumers find it easier to forecast the taste of an Australian wine than of a French wine. The country of origin adds its own risk-reducing role to the brand.
Last but not least, the industry’s organization in the Old World is too fragmented. Individual growers cannot afford a dedicated sales force even in their homeland. Even when the wine is produced by cooperatives of growers, the coops tend to want to remain independent and refuse to join larger organisations, the only viable path to reaching the critical size to create a brand.
As a result, in the 16 years to 2001, Australian wines, led by Jacob’s Creek, went from zero to a 16.9 per cent share by volume and a 20.1 per cent share by value of the British market.
Meanwhile the market doubled in size. Interestingly, as is shown by the value share being higher than the volume share, price is not the main reason consumers choose Australian wines. The New World growers have succeeded in persuading customers to trade up, by offering higher quality brand extensions designed to appeal to former novice wine drinkers who are now willing to explore more complex wines.
Can Old World wines come back and stop their sharp decline? As long as they do not suppress their internally based regulations, their production laws, and do not encourage supplier concentration, they will not be able to fulfill the five conditions for building brands. Bordeaux and Burgundy cannot do it.
However, the Languedoc wine-growing region is the biggest in the world. As such it fulfils the first condition. In this region, which historically produced lower-status wine than Bordeaux and Burgundy, there are very few production rules to obey. The future is in the hands of Languedoc’s growers if they can concentrate and meet customers’ requirements, not only in the UK but also in Japan, Korea and other countries with a growing market for wine.
They might also export their know-how and build brands where the future market is: China. This is why so many players are signing joint ventures with Chinese companies and authorities, to grow grapes in China and develop brands that have none of the Old World wine industry’s self-imposed limitations.
What lessons can be drawn and generalised? New World wine brands have succeeded because they innovated, breaking with the competition’s conventions for consumer profit. They have not stopped innovating and disrupting conventions. In Australia, Jacob’s Creek recently introduced screw cap closures on its Riesling varieties, abandoning a sacred cow: cork closure. Riesling is more likely than wines from some other grape varieties to be affected by problems of cork quality, and half-bottles are especially vulnerable. Both consumers and the trade reacted favourably to this small but revolutionary innovation.
A second lesson is that a part of Jacob’s Creek appeal was based on one enduring weakness of competition: it was not an elitist brand, and it had no snob value. It was approachable for everybody.
The product’s quality–price ratio was excellent, attracting praise from experts and taste makers. This is an endless race: each year the brand continues to improve the quality, thus winning continuous publicity. Since it was the first of the major Australian wine exporters, Jacob’s Creek benefited from the ‘pioneer advantage’, and became the symbol of Australian wine. Interestingly, Orlando Wyndham, the company that owns the brand, is far smaller than some of its Australian competitors such as Hardy’s, but all its energy and efforts were focused on this one single brand.
Many brands have developed by contact and retail without advertising: Google, Zara, Amazon. This is not the only brand-building model. Yellow Tail became the number one wine brand in the United States thanks to a huge advertising campaign, a fun personality and a price which strongly motivated its main distributor. In addition it was aimed at the wide field of non-experts in wine.
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Strategic Brand Management Tutorial
Brand Equity In Question
Strategic Implications Of Branding
Brand And Business Building
From Private Labels To Store Brands
Brand Diversity: The Types Of Brands
The New Rules Of Brand Management
Brand Identity And Positioning
Launching The Brand
The Challenge Of Growth In Mature Markets
Sustaining A Brand Long Term
Adapting To The Market: Identity And Change
Growth Through Brand Extensions
Handling Name Changes And Brand Transfers
Brand Turnaround And Rejuvenation
Managing Global Brands
Financial Valuation And Accounting For Brands
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