Competing Against The Big Boys / Strategic Marketing Lessons Learned

Competing Against The Big Boys Competing Against The Big Boys

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Competing Against The Big Boys Competing Against The Big Boys

My Story: VP Marketing.

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Competing Against The Big Boys Competing Against The Big Boys

The siren song of craft spirits.

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Competing Against The Big Boys Competing Against The Big Boys

“If you know your enemy…”

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Competing Against The Big Boys Competing Against The Big Boys

“This is the business we have chosen.”

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Competing Against The Big Boys Competing Against The Big Boys

Outnumbered & outspent… Too many competitors. Clutter. Chaos.

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Competing Against The Big Boys Competing Against The Big Boys

Underdogs

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Competing Against The Big Boys Competing Against The Big Boys

The roots of Diageo: renegade, guerrilla, underdog marketers.

John G. Martin brought Smirnoff to the US in the late 1950s. Built and dominated the vodka category for 30 years.

Brought Jose Cuervo to the US in the 1970s. Built and dominated the tequila category for 30 years.

Invented the Prepared Drinks category prior to Prohibition*.

*Survived Prohibition with A1 Steak Sauce.

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Competing Against The Big Boys Competing Against The Big Boys

How ‘the big boys’ think: “When all you have is a hammer….”

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Competing Against The Big Boys Competing Against The Big Boys

What they are thinking about:

The “Big Boys” Analyst Headlines:

•  USA Is A Competitive, Mature Market.

•  Major Brands Struggling For Growth.

•  Emerging Markets Boost Growth.

•  Company Reorganizes To Enhance Emerging Market Focus.

•  Major Focus On Emerging Markets Required.

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Competing Against The Big Boys Competing Against The Big Boys

Neglected brands in the portfolio…

250   50   10   250   50   25   100   25   75  

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Competing Against The Big Boys Competing Against The Big Boys

There are only two basic business strategies:

Low Price (implies low cost producer)

Differentiate This is your only option. But how?

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Competing Against The Big Boys Competing Against The Big Boys

De-positioning Your Competitor

Using their strength against them.

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Competing Against The Big Boys Competing Against The Big Boys

Own this: “Not for beginners.”

•  “We’re #1”: They sell millions of cases to the mass market.

•  Craft: “We are for people who can tell the difference between mediocre and special.”

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De-positioning Big Brands

Competing Against The Big Boys Competing Against The Big Boys

Craft, not Kraft.

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Competing Against The Big Boys Competing Against The Big Boys

•  They have a giant factory:

•  You have a distillery experience:

De-positioning.

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Competing Against The Big Boys Competing Against The Big Boys

De-positioning •  They have a nameless, faceless factory

manager:

•  You have a master distiller:

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Competing Against The Big Boys Competing Against The Big Boys

Differentiation: Think Beyond These Entry Level Ideas:

Smooth.

# of times distilled.

Where you’re from.

The quality of your water.

“Babes”

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Competing Against The Big Boys Competing Against The Big Boys

Don’t go here.

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Competing Against The Big Boys Competing Against The Big Boys

Differentiate: Tell Your Story to Consumers.

•  Stories connect us to concrete experience rather than an abstract.

•  Stories convey emotions.

•  You have a good story. –  Authentic –  Underdog

•  The Big Boys have a story too, but it’s

usually very tired, a fake, or boring.

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Competing Against The Big Boys Competing Against The Big Boys

Digital media is the great equalizer.

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Competing Against The Big Boys Competing Against The Big Boys

You can have your own tv channel.

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Competing Against The Big Boys Competing Against The Big Boys

Your story is newsworthy.

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Competing Against The Big Boys Competing Against The Big Boys

A story and a personality… without authenticity or craft.

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Competing Against The Big Boys Competing Against The Big Boys

How NOT to tell your brand story.

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Competing Against The Big Boys Competing Against The Big Boys

Strategic Consistency

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Competing Against The Big Boys Competing Against The Big Boys

Strategic Consistency

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Competing Against The Big Boys Competing Against The Big Boys

Lack of Consistency = Chaos.

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Competing Against The Big Boys Competing Against The Big Boys

God’s Incredients.

Alaska’s Spirit.

Wasilla’s Soul.

Toby’s Heart.

Consistency creates a Brand.

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Competing Against The Big Boys Competing Against The Big Boys

Consistency + Integration.

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Competing Against The Big Boys Competing Against The Big Boys

Publicity Trumps Advertising.

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Competing Against The Big Boys Competing Against The Big Boys

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Publicity Trumps Advertising.

Competing Against The Big Boys Competing Against The Big Boys

You can afford this: $250

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Competing Against The Big Boys Competing Against The Big Boys

$2.4 billion / year

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Digital retailing: another equalizer.

Competing Against The Big Boys Competing Against The Big Boys

Geography

•  The lure of NYC, LA and Chicago.

•  The path of least resistance often has a better ROI:

–  Black Velvet : •  #1 whisky New York state; no NYC •  Dominated Iowa and the midwest •  100k cases in Sacramento, Stockton

–  The Lesson of Tito’s.

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Competing Against The Big Boys Competing Against The Big Boys

Craft is not about price.

•  Its about “adding perceived value” and ‘convincing your target you’re worth it.”

•  Price competition is the slippery slope to nowhere.

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Competing Against The Big Boys Competing Against The Big Boys

Seek Category White Space

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Competing Against The Big Boys Competing Against The Big Boys

Smirnoff   Absolut  Stoli  

Smirnoff  

The  Herd  The  Herd  

Smirnoff  

Absolut  Stoli  

The  Herd  

Grey  Goose  

The  Herd  

Grey  Goose  

Absolut  Stoli  

Smirnoff  

CraB  

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Category Evolution 70’s   Late  80’s   Late  90’s   Now  

Competing Against The Big Boys Competing Against The Big Boys

Category Positions

Star  

Cheapest  

Value  

Legends  

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Competing Against The Big Boys Competing Against The Big Boys

White Space

American Rum In 1763 there were 159 rum distilleries

in New England alone.

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No  pirates  allowed.  

Competing Against The Big Boys Competing Against The Big Boys

White Space

The Aging Population Bubble.

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Competing Against The Big Boys Competing Against The Big Boys

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White space

Competing Against The Big Boys Competing Against The Big Boys

United Craft Distillers

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A  behind-­‐the-­‐scenes  holding  company  that  provides  markeOng,  sales,  and  financial  experOse  to  select,  high-­‐potenOal  craB  disOllers  

Canadian  CraB  Brand  

CraB    Tequila  

Competing Against The Big Boys Competing Against The Big Boys

Focus.

•  Not too many markets. •  Not too many accounts. •  Not too many flavors. •  Not too many products.

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Competing Against The Big Boys Competing Against The Big Boys

Recap

•  Small is beautiful •  De-positioning •  Tell Your Story •  Go digital •  Consistency •  Look for the White

Space •  Stay Focused.

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Competing Against The Big Boys Competing Against The Big Boys

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Martin Pazzani Founder, United Craft Distillers

martinpazzani@unitedcraftdistillers.com

860-375 0426

Twitter @mpazzani Facebook “Martin Pazzani”