Current Issues in Marketing Strategy

ASM Liquor have launched their new product 'Vodka O' with a huge launch party in both Sydney and Melbourne. The 'tasteless' themed party was a public affair held at Paddington United Church and Transport Bar and aimed to offer consumer trial of the product and convey brand messages and values to the late night revelers. This 'Big Launch' marketing strategy is common, but is it effective?


The big launch party is a strategy used all too often in the liquor industry, but it is like trying to air-condition Yankee stadium with $10 electric fan from Bunnings, yes it creates some ripples and a little movement, but on the whole, nothing has changed. I use to be involved in the liquor industry and have seen this over and over again, the biggest problem is always the same, channel power and user switching costs.

Channel power in Australia (Melbourne as small example) is owned by a couple big players, then their are a host of independents who buy most of their stock from Dan Murphies as it is. Sales reps are sent around from various companies to make the sales and if the deal is good enough, they achieve distribution. So even if they jump through these hoops of fire, who is going to buy it?

Advertising alcohol to consumers is both difficult and expensive. Large TVC and radio campaigns very rarely change consumer buying patterns and in store price promotions are very short term in their effect on sales. Instead, the company is looking to raise the their profile by turning up at bottle shops for free tastings and hosting high profile, low cost events. They explain that introducing a new drink product to the early adult market is best done with “touchy feely” marketing. “To convince the uncommitted drinker you need to provide an experience they can see, taste, touch and smell and feel.”*

Josh Strawczynski's Opinion
If the ripples they are making in the blogging world continue, they will enter the mainstream market. However, I can't see the product gaining any real dominance in a very mature market. The brands they are up against are just too powerful in both reputation and economies of scale.

Sam Berringer's Opinion
I am impressed with the amount of user generated media coverage this is getting, but the product would need to be exceptional and well priced to achieve any real market share, and I just can't see that happening.

Metlink are shaming commuters into paying for their tickets, in what is half comedy, half serious, the advertising is generating conversion and at the very least forcing users to consider buying a ticket.  The strategy is supported by some online content, but is it effective?

Nestlé are taking a more family friendly approach to their confectionary advertising, announcing that they would be improving the nutritional content of their products or failing that, stop advertising them to children. The question that needs to be asked is why? Definitely macro-economic forces were at play, but what is the marketing strategy behind this move?

Kellogs Special K advertising has taken a radical turn, moving away attacking head on with competitors and 'stealing' market share, but trying to expand the market by targeting women who skip breakfast to stay slim. The bold new marketing strategy is a powerful step for Kelloggs which also helps to position the brand as a healthy alternative.



When choosing how to advertise Special K, marketers had two options. They could try to increase trial of the product in order to 'steal' market share & support the ads with a pricing 'pull strategy' (discounting) which tends to be a very short term strategy with short term results. Instead they tried the more difficult direction, expand the market and attract new customers with no existing brand loyalty. This has the potential to form longer lasting and more profitable relationships. The ads also brand the company as a healthy alternative.

The additional benefit of the advertising is the positioning of the product as the 'healthy' alternative. Many breakfast cereals are undermined because of sugar content concerns (amongst other ingredients). Special K are differentiating in the same way Wheat Bix did when they referenced "9 out of 10 nutritionist recommend Wheat Bix", moving into the growing market of health conscious consumers.

Do not make this look like the one and only way to advertise your cereal, there are pitfalls and risks along the way. The ad needs to convert enough consumers to the brand to pay off the production and airing costs, there is every chance that the breakfast skipping segment is either too small or constrained by other reasons (e.g lac of disposable income) to be able to make a purchase.

Josh Strawczynski's Opinion:
I think it is clever and worth a shot at doing, I think the creatives they designed were good and the message was clear. This being said, there is a lot of negative comments being posted on blogs and forums and realize that I am not representative of everyone. Kelloggs need to be careful not to build up negative brand equity, annoying people with your ads is worse than keeping you ad budget in the bank.

Sam Berringer's Opinion:
My only comment on this matter is targeted at the forum banter that thinks this study was made up:

Skipping breakfast has more implications than just mid-morning hunger pains. A new review, published in the Nutrition Bulletin verified that people who eat cereal for breakfast regularly tend to have a lower body mass index (BMI) and are less likely to be overweight than those who do not eat cereal for breakfast regularly.

The Red Bull Air Race is a minority sport which is hugely expensive, difficult to derive income from and falls under the banner of "corporate branding", but is it delivering any real value to the company? Purely taking a marketing strategy point of view their are two schools of thought, firstly that sports branding is nearly pointless and alternatively that you can 'associate' your brand with the sporting attributes (e.g David Jones & Melbourne Cup fashion). The Red Bull Air Race fits into neither of these directly, the strategy in relation to competitors is brilliant.


What would you say if I offered you, an event that people would not only associate your brand with, but your brand would actually transcend product boundaries and become part of the name? I also offer you unlimited branding, 100% creative rights and it represent your brand values of cool and premium? Would that be worth your advertising spend?

Contrast this to one of the sponsors of the Australian Open or America's Cup, many marketers I know claim this sort of spending buys nothing more than corporate entertainment. With this in mind, you can see why Red Bull sink so much folding stuff (money) into what is effectively a nothing sport.

Branding is Red Bull's point of differentiation. You will be hard pressed to find a more disciplined branding across any number of product categories, 'subtle premium' + 'young & cool'. They have worked very hard over the years to build their brand and now with competitors like Mother, Rockstar and enough pretenders to make the Foo fighters write a sequel song (follow the reference if you can) entering the market, this branding insulates the market leader from a price war and helps to maintain their market share without competition.

Josh Strawczynski's Opinion:
I love the air race, unlike Rockstar that has invested money in sponsoring some back water motor sport or any number of other energy drinks that max out their advertising spend in this way, Red Bull have a strategy keeping them miles in front.

Sam Berringer's Opinion:
There is room in the energy drink market for more players, but they need to find a point of differentiation. At the moment everyone is trying to create the same product. I asked a barmaid why she was drinking Mother and she said "because it tastes like Red Bull"...why? That is like selling an Ipod with the label scratched out and 'Sam's Music' stick slapped over the top...it's not fooling anyone!