February 22 2006

A fresh look at super-premium spirits
The use of educational and aspirational messages in drinks advertising

FRESHMINDS

The use of educational and aspirational messages in drinks advertising

This white paper analyses the marketing messages of five super-premium spirits categories. It discusses the contrasting benefits of educational and aspirational marketing and explains the differences in behaviour of each category. Through semiotics, we also argue the need for Brand Managers to be aware of emerging consumer codes which can help to create more powerful, differentiated brand values. More of that later. FreshMinds is a research company. We help clients gather and analyse information on competitors, market dynamics and consumer perceptions. Our research expertise covers luxury goods, the drinks industry, retail and FMCG markets. In this report we have focused on super-premium spirits, which for simplicity we have defined by reference to retail prices.

Super-Premiumisation An insight into print advertising

Super-premium spirits
The category of super-premium is not unique to the spirits market. Indeed, with the growing appeal and accessibility of luxury products to the mass market, super-premium categories have arisen across many sectors. Achieving super-premium status and commanding correspondingly high prices in a category can be accomplished in two ways. The first is by educating the consumer. Educational messaging covers quality, craftsmanship, heritage and production techniques used to create the product. The learnings can create both real and perceived benefits in a consumer’s mind. These in turn drive brand differentiation and super-premium positioning. For many consumers, it is the feeling of being ‘in the know’ which instils pride in being a connoisseur, deserving of quality. Alternatively brands appeal more directly to emotions through aspirational marketing messages. Products are positioned as a step away from the ordinary and the gateway to a far more luxurious life. Both messages can be effective in increasing the desirability of a product. Each, or a mixture of the two, can be deployed to great effect. This white paper looks exclusively at the consumer-focused print media advertising of super-premium spirits brands. It does not take into account billboards, trade press, web communications, on-trade promotions, off-trade promotions or event sponsorships. It should be kept in mind that super-premium spirit brands may be educational in their print media and aspirational in their below-the-line marketing or vice versa and hence may demonstrate a more complex strategy than illuminated here. In commissioned studies FreshMinds recommends an analysis of all these communications, which are then placed in context by scrutinising product portfolios, drinks prices, volumes, annual reports and other financials.
Aspirational

FreshMinds’ Approach
We have analysed the adverts of around 20 super-premium brands1 placed in UK consumer magazines between 2004 and 2005. The headline, body copy, image, and layout of each advert was evaluated to determine the structure and content of the marketing message. Each of these elements was scored on both aspiration and education scales using the basic definitions given above. We found that the majority of drinks in a specific category were clustered closely together. Cognacs behaved most homogeneously, hence forming a more concentrated cluster. The clusters are shown below, in Figure 1. This overview provides a starting point from which to analyse the prevailing marketing strategies of categories and brands within them. It provides a platform for brands to assess their desire for conformity or differentiation from the current ‘way of doing things’. In addition, it is worth noting that the clusters are dynamic and thus analysis of how each category has evolved can provide clues for future trends and opportunities.

Figure 1 Super-premium category clusters
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Cognacs

Vodkas

Blended whiskies

Gins

Malt whiskies

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Educational

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1

Courvoisier XO, Remy Martin XO, Remy Martin Louis XIII, Martell (no product identified),Ian Macleod’s Isle, Chivas Regal (12 and 18 year old), Johnnie Walker (no product identified), Glenfiddich (no product identified), Highland Park, Balvenie Malt, Bruichladdich, Laphroaig 16 year old, Belvedere, Ciroc, Grey Goose, U’Luvka, Slava, Millers, Blackwood Vintage Dry Gin.

The trade-off that brands make between education and aspiration is often a passive or reactive ‘me-too’ move. Making a conscious and strategic change can provide significant opportunities for differentiation.

Categories, and the brands within them, are subject to both physical and historical constraints. Cognacs, for example, are expensive to produce and the consumer ‘expects’ to be spoken to in a manner reflecting the accumulation of decades of advertising culture.
Education or aspiration There are three broad drivers for the choice between an education or aspiration-based campaign: category, history and composition, brand differentiation and changing consumer codes.

real and perceived differences. Superpremium brands seek to differentiate themselves firstly against lower price bands (standard and premium) and secondly

gloved women’s hands, it used a code familiar from perfume advertising. This was effective because both bottles contain precious, desired and luxurious products.

Our findings indicate that the exact mix of educational and aspirational marketing messages for super-premium spirits is partly strategic and partly reactive. The strategic need for differentiation drives changes in brand expression however current and historical market expectations impose rules that brands cannot afford to ignore.
against each other. If an adjacent price band is positioned as aspiration-focused (as is the case with premium gin) the superpremium brands can choose to play the same game at a higher level or change tack. In the case of gin most super-premium brands have decided to change tack, creating desire by educating consumers as to what makes these products different from the Tanquerays and Bombay Sapphires.
Semiotics: the cultural meanings we attach to signs

The history of a category is of great importance in the education/aspiration trade-off. Brand new, trailblazing products that are creating categories for the first time frequently have to expend efforts educating consumers before focusing on anything else. A consumer will not demand a product before they first understand what it is and what it can do for them. It follows that only after a category is understood, does the opportunity for aspirational campaigns fully present itself. Hence the relatively new category of super-premium vodka is more educationally-focused than the wellestablished cognac category. Super-premium categories have generally started life with educational marketing and then steadily shifted towards more aspirational advertising. The move can be led by just one brand which drops education in favour of a strongly aspirational brand. Examples of this can be seen in a variety of luxury sectors; in the fashion industry this is what created Prada’s success in the 80s and Jimmy Choo’s huge growth in the 90s. The composition of a category also has an impact on print communication. In a category made up of mostly large, international brands, product recognition is no longer a significant issue and the codes can become more abstract and playful. Johnnie Walker’s “Keep Walking” campaigns are an example of this. There is no need to reinforce the quality of the product by educating the consumer about its characteristics or heritage as these are known. The second driver is differentiation. Category and brand identities are based on

Chivas Regal’s 12YO whisky, a premium product, has focused on friends sharing magic moments surrounded by natural wonders. This is a trick previously well developed by the luxury travel industry. Brand managers need to be aware of emerging codes and understand how they can affect both the educational and aspirational aspects of their marketing messages. Spotting a code early provides the opportunity to ride on the crest of a wave and transport a brand to the forefront of the consumer mind.
Best Practice

The third driver comes from changing cultural codes. This is best explained using the language of semiotics. Semiotics is the study of how people and groups attach meanings to signs. For example the heavy glass of cognac bottles signifies the value of the liquid contained inside and a logo in the form of a signature, such as Johnnie Walker, is a code for the individual and personal care and attention invested in the preparation of the spirit. Codes develop over time and this provides both an opportunity and threat. A brand that targets an emerging code ahead of the pack can be responsible for leading the development of a category and will benefit disproportionately as a result. Conversely a brand which becomes wedded to an ageing code may become outdated. In such a case, it may only survive by clinging onto a small (and often old) consumer group that is equally stuck in the past. Emerging codes may be most easily recognised by studying the trends in other markets. Importing connotations can be very successful if the associations hold up. When Courvoisier created the image of a beautiful and delicate bottle held by two

So what is best practice? Education, aspiration, a mixture? There is no definitive answer as each category and brand must balance history, relative positioning and consumer expectations. It seems that there are nonetheless two main strategic options: embody the characteristics of your category and price band or choose to differentiate. However this perennial marketer’s dilemma of conformity versus differentiation can be negated through market-leading early recognition of code dynamics. This approach is not the same as the traditional inside-out analysis of consumer understanding; rather it is outside-in, looking at how values and beliefs reach the minds of consumers in the first place. Understanding this, and the current dominant codes, Brand Managers are in a stronger position to influence their audience and drive growth.

This approach is not the same as the traditional inside-out analysis of consumer perceptions; rather it is outside-in, looking at how values and beliefs reach the minds of consumers in the first place. Understanding this, and the current dominant codes, Brand Managers are in a stronger position to influence their audience and drive growth.

A well-established category generally starts with educational advertising and shifts to aspirationbased advertising as the category develops and product recognition improves.

Blended Whisky
Constraints • Heavy presence of standard and premium brands obscures super-premium level • Blended so can’t use heritage messaging in quite the same way as single malts

Single Malt Whisky
Constraints • Relatively low volumes • Many brands in the marketplace • Many small competitors with similar products • Historically older consumers

Gin
Constraints • Strong aspirational advertising in premium categories (e.g. Bombay Sapphire) • Limited drinking variation (mostly associated with gin and tonic water) • New category with limited consumer awareness Dominant codes • Fresh crisp colours, usually green, associated with botanicals with a white background • Clear glass bottles • Open and uncluttered layout • Minimalist and modern photography • Strongly educational copy and taglines to contrast with premium category • Similar to single malts in terms of production and ingredients focus (this association is explicit in some Millers advertising) • No association with drinking opportunities • Messaging is addressing a discerning connoisseur

Dominant codes • Warm colours and dark, evening backgrounds • Prominent bottle – it’s all about the drink after all • No or little copy on advertisement • Simple, clear and uncluttered layout • Taglines are simple and strong • Modern rather than traditional styling

Dominant codes • Bottle is usually prominent • Bottle is copy-heavy often with a traditional look and feel • Copy is educational, focusing on the time and effort put into production • References source and heritage • Traditional recipe • Ageing as a badge of quality • Text is often a narrative of product history • Traditional fonts, white text • Images represent Scottish wilderness or production • Warm and natural colours of moss and peat dominate Emerging codes • Drinking occasions that denote shared moments with friends • Drinking occasions that signify luxurious lifestyles • Images and taglines which younger consumers connect to enjoying life

Emerging codes • Making shared moments special • Aspiration through uniqueness of shared experiences

Emerging codes • Simple, plain bottle labelling using translucent and minimalist stickers to keep bottle clear • More education, heritage and quality association expected • This will be followed by increasing focus on drinking opportunities

Vodka
Constraints • Consumer expectation of price is relatively low • Rarely drunk straight for its own taste in the UK • Broad mixing opportunities • Strong aspirational advertising by some premium brands (e.g. Absolut)

Cognac
Constraints • High production costs • Relatively high price • Historically older consumers • Traditionally un-mixed

Jargon
Semiotics The theory and study of signs and symbols. We use it to understand the meanings that individuals and groups associate with the attributes of a brand and its marketing. Communication codes These are unspoken connections between words and images and the meanings attributed to them. A woman in fur connotes wealth and luxury. However these codes shift over time and when a code has lapsed the meaning no longer holds, e.g. in the eighties, to many individuals, fur was a sign of crass, uncaring opulence. Dominant codes This is the set of codes most used today. They each signify an important message in a way that resonates with today’s consumer.

Dominant codes • Clear glass bottles • Blues, greys and whites dominant • Images of cold, natural outdoor environments • Simple bottle design • Educational copy regarding batch size, distillation and ingredients • Aspirational copy focuses on extravagance and luxury • Frequent use of cocktail glasses to reinforce mixing • Modern and contemporary fonts Emerging codes • Botanical credentials explained through copy and shown through images of grain • Thin, delicate bottles denoting the fragility of the product • Aspiration-focused images will develop more in the long run • Associations with fashion may migrate into print campaigns

Dominant codes • Luxurious image-heavy advertising • Opulent bottle design • Dark backgrounds and evening settings • Golden browns and reds centre stage • Heavy and flamboyant fonts in tagline • Gold text

Emerging codes • References to other luxury markets such as jewellery, perfume and handbags • Arrogance and playfulness in advertising • Images and taglines which younger consumers connect to prestige

Emerging codes This refers to codes starting to be used which could supplant some or all of the dominant codes in the future.

Future category developments

Given the advertising histories of each super-premium category and the growing presence of some emerging codes, we expect some shifts in the positions of the super-premium spirits categories. Cognacs are likely to retain their aspiration-focused position in their print campaigns. There is the potential to increase education; in particular to attract the increasing raft of high-net worth consumers who are new to the market and to react to the growing threat of white spirits. However, this could also effectively take place through other marketing channels (e.g. on-trade). Vodka may increasingly shift towards increased aspiration and reduced education as it becomes more established and confident about its differentiation from lower price bands. However we also expect some brands to focus more strongly on the emerging codes that connect ingredients to purity. Originally led by the organic foods movement, botanical credentials and a simple focus on basic ingredients now send a powerful message about quality through purity. This emerging code has been used by Blackwood’s in the print advertising for their gin. Gin is the spirit to watch as we expect it to emulate some of the success of the vodka super-premium category. In a similar way to vodka, and in contrast to cognacs, we expect gins to build on an emerging code for purity: the use of clear and relatively thin glass bottles. Gin will increasingly establish itself as a super-premium choice, but will continue to struggle against the limited ways in which it can be drunk. This may spark the need for increased on-trade education and integration of the drink further into the cocktail trend. Association with lifestyle by carefully targeted sponsorship may additionally increase category and brand awareness.

We also expect to see more on-trade venues encouraging consumers to buy super-premium drinks to increase bar spend. The adjacent image shows a recent example: the cocktail menu of a London club which encourages consumers to upgrade from “standard” to “business class” and “first class” cocktails. Coupled with the growth of brand calling, this will further strengthen brand perceptions and the consumer understanding of category differentiation. Figure 2 shows how we expect the aspirational and educational trade-off to develop for each super-premium category. A more general trend may be the widening of the gap between premium and superpremium categories across all luxury product categories. This may be enhanced through partnerships between fashion products and super-premium drinks. The brands reinforce each other’s brand equity and create increased desirability if appropriately partnered.
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Reproduced with kind permission of The Player, www.thplyr.com

Through an analysis of semiotic codes and an understanding of category maturity and brand differentiation, the future superpremium market leaders will evolve.

Cognacs

Blended whisky

Vodkas

Aspirational

Gins

Single Malt whiskies

Figure 2 Future positioning

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Educational

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About FreshMinds

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FreshMinds is an innovative research consultancy providing a flexible, responsive and creative resource for our clients. We have built a team of Minds – a network of the brightest analysts in Europe. Together with our research management team, they will find information on your consumers, competitors or markets; whatever you need to drive your business forwards. FreshMinds' core strengths lie in helping our clients to better understand their competitor strategies, and giving them actionable recommendations regarding product launches, new market entry or brand repositioning. Our mixed methodology approach uses a combination of competitor interviewing (complying to SCIP guidelines), internet and desk research. We find that this holistic approach means that we can give you customised research and analytical solutions to meet your specific needs.
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Luxury goods case study
The need Our client, a luxury diamond retailer, wanted to understand how important branding is to the luxury consumer. This research was commissioned to help our client decide whether or not to launch a branded diamond collection. The solution The project had two phases. The first phase was to review the diamond market as a whole, with a particular focus on the US. This involved looking at key competitors' diamond ranges and their target market. The second phase looked at the 'luxury consumer' and the role of branding in the purchasing decision. We compiled overviews of fifteen different luxury segments including leather goods, wine, cigars and sound systems. This phase profiled the consumer and the role of the brand in sponsorship deals and advertising. The result Our report enabled our client to make an informed decision as to whether to introduce a branded diamond collection. Our next project will be looking at where the most effective retail outlets are in the US market to enable our client to expand their business.

Contact Claudia Brendel tel: 0207 692 4300 www.freshminds.co.uk info@freshminds.co.uk Copyright FreshMinds Ltd

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