Transcript New Zealand Wine

Branding New Zealand Wine:
From Global Allocator to Global
Marketing
Professor Roderick J. Brodie,
University of Auckland Business
School
New Zealand
Agenda
1. Introduction
2. From Global Allocator to Global Marketing
3. Foundations for a National Branding Strategy
4. Creating Value with Brand NZ Wine
1. Introduction
• Historically, wine has been very much a European product
– More than three quarters of the world’s wine production, consumption
and trade still involved the European Union (EU).
– France, Italy and Spain >50% of global wine production.
– New Zealand, 0.2% of global production
• Recently wine traded internationally had increased to more than 25%
of global production
– Driven by increased production in the “New World” wine producing
nations of Australia, Argentina, Chile, New Zealand, South Africa and
the United States
• Global wine industry was extremely fragmented
– Gallo, the world's largest supplier and brand for wine, accounting for
less than 1% of world supply
• Static global demand for wine but huge increases in plantings,
principally in New World counties,
– Industry analysts predict over-supplies of wine esp. in non-premium
categories
NZ Wine Production nzwine.com
• New Zealand’s wine established itself in the global market
with its unique Marlborough Sauvignon Blanc
– New Zealand wines premium positioning was established at time
when trends showed high-end, premium wine brands growing
– Considerable optimism with increased plantings
Source: NZW Statistical Annual various
New Zealand Wine Exports nzwine.com
– Exports grater than $1NZ billion
– Domestic market is expected to grow to $0.5NZ billion.
The Emergence of an Export-dependent Quality
Industry
Indicator
1990
2010
Change
Number of wineries
131
672
413%↑
33,428
585%↑
-44% ↓
Producing area (hectares)
↑ 4880
Average yield (tonnes per hectare)
14.4
8
Grape tonnage crushed
70,000
266,000 280%↑
Wine exports (million litres)
4
142
3,450% ↑
Wine exports ($million)
18.4
1,041
5,558% ↑
Source: NZ Winegrowers Annual Reports
New Zealand Wine Growers (NZWG)
• Established 2002
– Merger of Grape Growers and Wine Institute
• National organisation for NZ’s grape and wine sector
– Goal “Building a Great NZ Wine Industry”
• Conducts wide range of tasks
– Advocacy and local and international levels
– Provides global marketing platform for NZ wines
– Facilitates research (production & marketing)
– Provides industry with timely strategic information
– Organises sector wide events (conferences, awards)
• Funded by
– Levies on sale of grapes and wine sales
2. From Global Allocator to Global Marketing
NZ Wine Growers (2009 Annual Report)
“The …industry is emerging from a period when the major
challenge was to produce enough wine to meet the world
demand, to one where the major challenge will be to sell the
available wine in an increasingly competitive world market.”
To meet this challenge,
– both demand and supply-side initiatives are necessary.
– marketing is more important to us than ever before.
– equally, effective management of supply is fundamental.
The New Zealand wine industry does not have a “wine lake”; that is
not something that happens with one or two large harvests.
However, the signs for the industry are clear and unmistakable
Driving Growth in Market Returns
(NZ Winegrowers Annual Report 2010)
Key Aspects of Strategy
• Reputation – the greatest asset
– Reputation is what the industry is selling. Every bottle that bears
the words “New Zealand wine” should add to that reputation, not
free-ride on it.
– Bulk wine sales may be a vital safety valve for cash-strapped
wineries. However sale of unbranded, below cost bulk wines
threaten to undermine the reputation that the industry has worked
so hard and so long to create.
• Backing the New Zealand brand
– New Zealand Winegrowers’ Marketing Programme provides a
highly effective platform for each exporting wine business to build
its own brand while contributing to the national and regional
brands producers share in common.
Sustainability – part of the national brand
• New Zealand is recognised as a leader in wine industry
sustainability
– Sustainability is now an integral part of our access to international
markets and distribution channels as well as our positioning with
consumers and retailers.
• Bold policy of 100% participation in an accredited
sustainability scheme by 2012, membership of Sustainable
Winegrowing New Zealand (SWNZ)
– now covers 93% of producing vineyard area and 85% of wine
production.
– new developments are happening all the time, including the rollout of the new scorecard, the Grape Futures project, the Greenlight
spray diary tool and the completion of a revised Winery Waste
Code of Practice.
• New Zealand Winegrowers also entered into a landmark
memorandum of understanding with Organic Winegrowers
New Zealand to develop common goals.
3. Foundations for a National Branding Strategy
• Geographic & Production perspective
– The filière
• based on an agribusiness/rural/lifestyle
– Innovation & quality based sustainable production
• Legal & Socio-political-economic perspective
– Government and national interest
– Politically sustainable
• Marketing/ Finance
– Branding and reputation play a central role
• Resource, asset or capability that creates value (equity)
– Financially sustainability/ market (customer ) orientation
Integrating the 3 Logics of Branding
To Market
(channels &
regulations
Brand
Identity)
1900s >
Market To
(management of
customers &
Markets
Brand Image
& Logo)
1950s >
Market With
& Among
(collaborate with
customers & partners
to produce &
sustain value
Brand Relationships)
1990s >
Three Stages of Brand Building
Trademark
“Identity”
Objective
Logic
Learning
Building
Brand Image
& Logo
Service Brand
“Co-creator of
Meaning”
•Familiarity
+
•Consistent
experience
+
•Co-Creating
meaning
•Identity
+
•Distinctive
positioning based on
image and
personality
+
•Building Recall
+
•Internalization of
brand personality
•Dynamic engaging
offerings
•Customers
interactive
experiences
+
•Dimensioning –
ideas in an
experience space
• Mass
communication
+
•Communication
focusing on
differentiation
+
•Beyond purchase
•Authenticating
experiences
A Broader Network Relational Perspective
• brand awareness & recall still necessary BUT
• brand meaning & experience are increasingly becoming the
sources of differential advantage
• this is linked with the experiences with the company, the
channel, employees and …
• thus managing brand equity becomes strongly associated with
managing a network of relationship experiences
• delivery and enabling of the promises in this complex
network play important roles in determining value
Re-launching NZWG branding strategy (2007)
• Major brand audit which included international research with key markets
– research revealed a strongly positive perception of New Zealand wine
– not only did it have an image of high quality but it also had feelings of
adventure or discovery
• Re-styled national brand image was developed
“the riches of a clean green land” replaced
• new tagline,
New Zealand wine - pure discovery
• New strategy focuses on:
• excitement and clarity of flavour that New Zealand wines offer
• summarises the journey the industry has embarked upon, as it continues to discover,
innovate, improve and diversify from the dominant focus on Marlborough Sauvignon
Blanc.
4. Creating Value With Brand NZ Wine
• Management of brands at the heart of any successful marketing
strategy
• For wine this is complicated by the hierarchical character of the
brand identity
– Rather than there being a single identity there is a brand
architecture involving multiple identities.
– Traditionally this has included:
• Country of origin, region and/or appellation, domaine/bodega/estate,
• Producer (and commonly also distributor) labels, and retailer labels.
– New World producers:
• Country and region have had a particular significance,
• Variety has also played a major role.
• Wine tourism and hospitality place a new emphasis on
developing broader identities of the various wine regions
• Brand “New Zealand Wine” has worked well in these contexts.
Challenges
• Though NZWG enjoying considerable success, the
industry faces many challenges to sustain its high value
positioning
• Understanding the nature of the successful elements of the
current strategy and ensuring the future resourcing of the
initiative:
– Complications occur in accommodating distinctive regional
identities and coordinating these with national messages
– Determining protocols of use and ownership
– Protecting the brand against free-loaders and those who would
damage it for short term gain
– Ensuring that generic activities add value relatively proportionally
to the vast range of different wine company identities.
Wine Industry Value Constellation
Value Chain for Wine
Brand “New Zealand Wine”
• Comprised of a number of elements:
– its core is a discourse of quality, promoted by industry participants,
local wine media and the industry’s representative organisations
– discourse is sustained by continued attention to quality from
winemakers, effective programmes of collective marketing and
careful cultivation of key gatekeepers – supermarket buyers and
international wine media.
• Brand is supported by:
– effective information exchange in production, commitments from
winemakers,
• collation and dissemination of industry information made available
through the industry website,
– over fifty trade shows and tastings around the world annually,
– new logo of “pure discovery” which is underpinned with the theme
of the previous logo of “the riches of a clean green land”.
NZ Wine Brand as an Umbrella Brand
• Winery Brands
• Event Brands
• Varietal Brands
• Regional & Sub Regional Brands
• Allied Brands
Understanding How Brand NZ Wine Creates Value
• Brands are intangible (relational) assets
– a brand’s role in a marketing system is much more than end
consumer associations with a name or logo
– brands facilitate processes within value systems
• multiple networks
• Brand “Wine New Zealand” is an umbrella brand within a
complex network
– Complex interactions between national & regional terroir
identities and other elements in value networks
•
•
•
•
Other National Brands e.g. NZ Tourism
Places linked to the brand
Things linked to the brand
People and organisations.
Region versus nation - challenges of sustaining
synergies in Brand New Zealand Wine
• Varietal specialisation and regional opportunities
• Pressure to enhance regional identity
• Terroirisme (provenance) and the creation of value
– regional distinctiveness: varieties, history, climate,
imagery, soils
• Regionalism of wine tourism
• Competition in marketing spend
• Regional companies vs. multinational beverage companies
– enterprise form: size, ownership, functions
5. Conclusions
•
•
•
•
“Brand NZ wine” plays a valuable integrating function and is central to the
business of wine and long term strategy for NZ wine companies
involves the integration of creative & strategic thinking with financial
investment & accountability that is politically acceptable
image/ logo awareness with end consumers is necessary BUT
brand meaning & experience are increasingly the sources of differential
advantage that create value
•
meaning & experiences are derived from network of relationships &
interactions with producers, channels, retailers, and many other
stakeholders as well as consumers
•
•
everyone in the marketing system needs to be a part-time marketer & the
passion of the people in the organisation that make the brand live
•
Sustainability (production, political, financial) is a key aspect of the brand
meaning within this network
vital to protect & integrate national, regional quality/innovative positioning
Characteristics shared by the worlds strongest
brands: Brand NZ WINE?
Necessary to have:
•
•
distinctive positioning, delivery of customer benefits & value, relevance,
consistency, a sensible portfolio
integration of marketing activities, management involvement, understanding
and support
Most critical characteristics are:
•
•
Clarity
•
distinctive values are understood and lived and loved by those who deliver
them
Consistency
•
•
in what (who) they are)
Leading the market with delivery
•
ability and exceed customer expectations and create delight
Thank you!
Any questions or comments?