Jeffrey Michael Fallon on the Challenges of Developing Marketing Strategies for New Liquor Brands

May 27, 2011 § Leave a comment

An experienced sales and marketing professional in the wine and spirits industry, Jeffrey Michael Fallon discusses some of the challenges facing companies that launch new liquor brands.

Marketing liquor is quite different from marketing many other kinds of products. For instance, in many jurisdictions, government regulations restrict the kinds of promotions that can be involved with alcoholic products, to a certain extent. While the highly competitive disposition of the market makes launching a new brand challenging, the nature of the product does afford certain natural advantages to marketers.

Liquor marketing strategies must begin by taking into account the market segment being targeted. At the low end of the scale, consumers look almost exclusively at price and will choose competitors based on small differences in cost alone. At the high end of the market, trends are less evident as consumers tend to be connoisseurs with specific, predetermined tastes.

The middle range shows the greatest potential for sales growth, as consumers are increasingly looking to maximize value and are willing to pay slightly more for quality. As in-home entertaining has grown in prominence, consumers look to provide high-quality drinking experiences to their guests, and so marketing efforts aimed at this segment often produce favorable results.

In other industries, promotions, giveaways, and competitions can help launch a new brand. When it comes to alcohol, however, promotions must carefully avoid encouraging excess consumption, which could cause liability issues for the company. This leads to a conundrum, as marketers need to encourage consumers to buy the new product, while at the same time discouraging them from trying too much of it.

In-store retail promotions can provide an effective method of countering this issue. Shoppers increasingly purchase their alcoholic beverages from larger, consolidated stores as opposed to specialty shops. These consumers are looking to purchase for future consumption, not for immediate use. In addition, they are receptive to the idea of paying more for a premium product. For this reason, a spokesperson in the store can help consumers make a decision on upgrading to the new, premium brand.

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