Two of my favorite quotes about advertising:

“Every advertisement should be thought of as a contribution to the complex symbol, which is the brand image.” David Ogilvy (O&M)

“I have always believed that writing advertisements is the second most profitable form of writing. The first, of course, is ransom notes…” Phil Dusenberry (BBDO)

Years ago when I was in marketing research, the CEO of a midsized company and a good friend asked me to conduct some focus groups on a new campaign his ad agency had developed. After doing the work, I came back with the recommendation that he proceed – the message was in line with the strategy and consumers liked the creative effort.

He kept challenging me on each and every positive insight I shared with him. Finally, in exasperation I asked my friend/client what is the problem. He looked at me and said, “Arthur, there is nothing you can tell me that will change how I feel. I hate the campaign.” “So why did you bother to hire me to test it,” I asked. “I was hoping consumers would hate it as well. Now I’ll just kill it on my own.”

Our debate continued. “What don’t you like about it?” “I just don’t like it,” was the reply. “Well why not give your agency some guidelines for what you’re looking for?”

“Listen” he said, “I’ll know good advertising when I see it.”

Oh, it’s good to be the CEO.

This blog has given me the opportunity to re-connect with friends and to make new ones like David van de Velde whose business motto is the headline for this posting.

In addition to being a very smart and affable fellow, David is an interesting entrepreneur and created Ketel One and Van Gogh Vodkas. In that regard, he changed the spirits industry.

I hope one day to write his full story but here are a few things that make him so interesting.

Let’s start with the motto. In an age of me-tooism, finding a hole and filling it speaks volumes about brand development strategies.

Not long after Seagram got Absolut Vodka, I kept hearing about this new brand, Ketel One, which was unique in its packaging, name, underlying concept and one other “outrageous” factor… a price at a significant premium to the category.

In addition, they concentrated on bartenders and servers and used videos and events to tell the story and even special olives for a martini. Everywhere I went at the time, all I heard was how we needed to learn from the Ketel One folks.

Many people think that the ultra premium vodka market was created by Grey Goose when, in fact, by the time Grey Goose came along, Ketel was already doing 200,000 cases.

David’s understanding of consumers is very impressive. He describes the target customer for high-end vodkas at that time as someone who wears Armani suits without pockets. Someone who walks into a bar and is holding the following – car keys with a Mercedes or BMW logo, an expensive cell phone and a wallet chocked full of goodies. No pockets. The question he asked himself is – would this person drink anything but a top shelf brand?

After Ketel One, he created Van Gogh vodka and brought the flavored category to new levels.

A little birdie told me he will be celebrating a milestone birthday this week so congratulations and keep finding and filling those holes.

Crown Royal has always been an iconic brand. But to me it’s been a bit of a mystery.

When I first met it as a consumer, it was the brand my grandfather served when company came over. Philadelphia Whiskey was his usual fare but his Crown Royal was special.

I’m not an historian on the brand but from what I can gather over the years, at the outset it had important equities but just needed a spark. The taste was great and unlike other whiskies at the time, unique packaging inside and outside, a back story about the royal visit to Canada and very aspirational look and feel. The spark occurred when oil workers from Canada working in the Gulf of Mexico (way before the current disaster) came to Gulf cities on their night off, with pockets full of money, and wanted the best whiskey they knew from home…Crown Royal.

As the story goes, this set off the growth and proliferation of the brand, primarily in the South.

It was marketed in the Seagram days in a classic brand-building manner. ‘Push’ and ‘pull’ efforts worked together successfully and the brand grew — even while vodka was growing by leaps and bounds.

The sales and regional marketing component, orchestrated by Jim Reichardt, was top of the game. All the activity was integrated and based on strategy, from the distributor focus to programming to ‘pull’ activity at retail. Above all, carefully thought through marketing innovations were introduced under Jimmy’s watch.

On the national marketing side, programs were developed to maximize the equity – especially the bag – and develop relationships with the core consumer. And, the advertising was that unique combination of creative excellence combined with brand recognition and sell. Not your average garden-variety ad campaign.

Everything on the brand was done for strategic reasons. The sole line extension (at the time) was Crown Royal Special Reserve whose intent was to protect the brand’s flank from above and make a price-value statement about the base brand. It was not to make a number. In fact, many worried about cannibalization of the base brand, which never occurred. At one point, both were growing at double digits.

Lately I’ve been looking at Crown Royal and how it’s doing. Last year was a tough one for the brand as it was for most high-end spirits. But I noticed the following in WSD the other day–

“…Furthermore, Trevor {analyst} believes the promotional support … behind Crown Royal ‘seems to be paying off,’ perhaps partly helped by its new, more expensive offering, Crown Royal Black.”

I also noticed that there are 5 Crown Royal products in the line.

I think my grandfather would have been confused.

I just got back from a trip to LA and my head is spinning with matters having to do with green in general and organic in particular.

I saw the following on a brochure for the Santa Monica aquarium:

“Printed on 100% recycled content, 100% post-consumer waste, processed chlorine free paper using soy-based inks.”

Once I got past the ‘post-consumer waste’ part, I thought, did they expect people to read or eat the brochure? But, these are important matters and we need to pay attention to what is becoming the “green” lifestyle. Including the alcohol industry.

The June issue of Cheers has a cover story on organic drinking. The following tidbit of information caught my eye.

According to the Greenfield, Ma.-based Organic Trade Association, sales of organic beer, wine and spirits were up last year. Organic beer sales totaled $41 million in 2009, up 11.7 percent from 2008; organic wine sales equaled $161 million, up 7.5 percent; and spirits were up 16 percent with $7 million in sales.

A drop in the bucket, sure, but there is a market for organic alcohol products especially in wine. In spirits, it’s the vodka category that leads the way with dozens of entries although Chatham Imports (Crop Organic Vodka) recently introduced Farmer’s Botanical Gin. In tequila, more and more organic products are entering the market.

The gist of the article seems to indicate that the organic trend in alcohol is here to stay.

A consumer friend who is not in the industry can best sum up my view:

“If organic means smoother, purer, better tasting, I’m all for it. But to tell you the truth, when I’m having a drink, I’m not thinking about hugging trees.”

Today’s issue of Ad Age Daily has a lead story on declining beer sales. Ad Age Daily

Industry shipments are down 4% (Beer Institute); for the four weeks ending May 16, only 4 of the top 30 brands posted gains  (SymphonyIRI); the big boys saw large declines – Bud Light down 5.3% and Miller Lite down 7.5%, both vs. 2009 sales.

How come?

I don’t think it’s the economy, beer held its own vs. spirits and wine at the height of the recession…why should it decline now?

Could it be the growth at the top and bottom of the beer market? Craft beers and imports are doing okay as are the price brands. Bud Light and Miller Lite are hurting and that’s enough to upset the entire category.

Maybe after a few years of substituting beer for wine and spirits, consumers have returned to pre-recession consumption patterns.

My view is that the marketplace is cluttered with light beers including new entries such as MGD 64 and Budweiser Select 55. Adding to the clutter is a barrage of new products, line extensions, brand extensions at all price tiers, especially the top end. And, let’s not forget about the growth in craft beers.

So, maybe it’s just that consumers are drinking less but drinking better. Those of us in the spirits world know that phenomenon well.

I got a lot of comment (mostly positive so far) about my last posting on “How Small is the Market.”

Like many businesses, the market for alcohol follows the old 20/80 rule. Twenty percent of your customers account for 80% of your business.

I came across a posting on a marketing blog that goes the next step.

I follow Seth Godin, a marketing guru, a prolific writer and someone well worth following and reading. Lots of insights.

A recent post of his is called “The circles (no more strangers)” and deals with the value of a “true fan” vs. “strangers.”

He concludes his posting with:

Let’s say a marketer has $10,000 to spend. Is it better to acquire new customers at $2,000 each (advertising is expensive) or spend $10 a customer to absolutely delight and overwhelm 1,000 true fans?

Check out his blog…there’s good stuff there. Here’s a link to this posting  –  Seth’s Blog

I’m always struck by the size of the spirits category and small number of dedicated drinkers of a particular brand. (Based on US Census and Gallup’s annual survey.)

Let’s do some math (or trust me and skip ahead to the fact that there are ‘only’ 24 million core spirits drinkers)…

• US population over 21 is around 200 million.
• 60% of those over 21 drink alcohol at least occasionally, 120 million people.
• People who drink spirits most often (as opposed to wine or beer) are about 20% of those who drink alcohol. So now we’re down to 24 million spirits drinkers.

(Actually the overall number who drinks spirits is much higher; perhaps 80% of alcohol drinkers or close to 100 million. But I’m focusing on most often, the core of the market.)

The size of the core market at 24 million people can be seen as huge or small depending on your perspective.

If half these drinkers consume Vodka, that’s 12 million people. But, if a brand has a 25% share, the size of the ‘franchise’ is only 3 million consumers.  (The numbers get smaller as you get into different categories.)

What this has always meant to me is, in addition to or perhaps in place of mass media, marketers need to think in terms of ‘a rifle not a shotgun’. Maybe even with a telescopic lens.

Whether aiming at increasing brand loyalty or converting users of competitive brands, it’s all about the return on investment. Efforts such as relationship building programs, digital marketing, database marketing and point of sale programs, to name a few.

Just like the old expression – fish where the fish are… but with a rod and reel not a net.

I bet you knew that.

Gregg Mineo sent me the following story about Sabra Liqueur. It was originally developed and introduced in 1963 by  Edgar Sr. Currently it’s produced by Carmel wineries, I believe.

Back in the days of the Seagram Empire, before the industry centralized and contracted, there were small companies like Park Avenue Imports.  They sold cordials and niche products like Vandermint, Cherry Suisse and, of course, the inimitable Sabra.

Sabra was a quality product, made from Jaffa oranges and Swiss chocolate.  It was packaged in a unique bottle similar to a Genie bottle, but unfortunately didn’t have a long shelf life.  I think in my early days of sampling Sabra, I gave more away than I sold.  It was a hit in assisted living care facilities, and of course Miami.

Well, as the story goes, one of the established retailers in Miami started selling Sabra at a brisk pace, and developed a loyal following, especially with a particular gentleman who was buying a bottle once a month.  He began buying it before the brand took off in this store, and one day came back to return one of the bottles he purchased.  He complained that this bottle of Sabra was not the same product he was used to, that it lacked something special he really enjoyed.

The retailer asked what the difference was, and the customer responded that “it didn’t have the chocolate bits in it.”

Stifling a laugh, the retailer offered him something else; all the while knowing that the bottles of Sabra the customer was used to had passed the expected shelf life. Obviously, the customer didn’t care.

What I want to know is — were the chocolate bits available at no extra charge?

The late Bob Dubin once told me a story about the folks he had to deal with at Allied Domecq.

It seems they weren’t very happy with the way their brands were being run in the States (New York in particular) and one of their top ranking marketing people was coming over for a series of meetings to get to the reasons behind the poor performance.

A senior member of the NY sales team met the executive at the airport when he came through customs. He ushered him to his car and told him that the plan for the first day was to bring him to the hotel, get settled and then they would tour the market.

“I hope to see stores as they really are and not have one of your set up visits,” said the marketing guy. To which the sales person replied, “any store you like…you’re staying in Manhattan so lets start there. You choose.”

A few minutes went by and the visitor exclaimed that he needed to go to a drug store right away. “Please find one close by.”

Thinking that he must have had a headache or some other physical ailment from the flight, the salesman pulled off the expressway and stopped at the first drug chain store he saw.

He was gone for about 10 minutes then came storming out, got back in the car and complained loudly and bitterly that he had looked all over the store and couldn’t find any of their brands.

The salesman patiently explained that in NY, the sale of alcohol was not allowed in drugstores.

“But it is allowed in other states isn’t it?”

“Yes, in a few states” said the salesman.

“So, if you and your associates weren’t so damn lazy, you’d get the law changed, wouldn’t you?”

The salesman didn’t bother to explain.

There is an interesting article in this week’s Ad Age on Belvedere and their new advertising campaign.

http://adage.com/article?article_id=143351

Not much more for me to add other than what I said in the article.

However, what I didn’t say and was thinking at the time of the interview was why go in this direction in the first place? Most brands I know that are called for by nickname have traction and a following e.g., Crown, Jack, Captain, Stoli, etc.

Wouldn’t it make more sense to further develop the brand on-premise rather than through ATL spending? Even if the message was strong.

If you’re a consumer and asked to participate in a focus group, do it. It’s a good gig…you get paid to give your opinions and reactions to ideas and concepts. And, it can be fun.

If you’re a spirits marketer and have a yen to sit behind a one way mirror (kind of a voyeur thing), eat M&Ms, lousy pizza (or sushi), stale pretzels and listen to a boring moderator and consumers who are lying through their teeth about what they drink and why…well, that’s a great way to get away from home and feel like you’re in touch with the market. Dream on.

Truth of it is focus groups among consumers in the booze business are a waste of time. The moderator is putting on a show for those behind the one-way mirror. Those behind the mirror spend their time playing with their computers and asking the moderator to pose questions that meet their preconceived points of view.

This may not be true in many consumer businesses but, in my experience, describes focus groups in the booze industry.

I know because I’ve been on both side of the one-way mirror (moderator or observer) for literally scores if not hundreds of group sessions.

I started my work life as a consumer market researcher and I’ve been a provider and user of consumer insight information throughout my career. So let me share some thoughts with you.

First and foremost, market and insight research – focus groups or surveys – are descriptive tools, not a predictive ones. A few great examples of the failure to predict: Absolut failed in focus group research; a new product named Green Sleeves was predicted to be a huge success…ever hear of it; research on flavored tequilas suggested a huge potential.

So if you want to describe what people are doing and gain insight into current behavior, use market research. To predict future consumer behavior, get a crystal ball.

The reason? It doesn’t cost research respondents anything to say what they think you want to hear. So, in my opinion, what they tell you about how they will act, will behave or will buy is similarly worthless.

Even in the descriptive arena, to paraphrase the old adage, “market research is like a lamppost, some people lean on it and some are illuminated by it.” That’s where the insights come in.

Final thought – focus groups among consumers. Save your money. See the next posting.

Once upon a time when the folks from Mad Men ruled the earth, it was all about whiskey – Scotch, Rye, Bourbon, and Blends. Oh sure, there was the multiple martini lunch (Gin not Vodka) but for the most part it was the “brown goods” that ruled the home bar.

By the late 60’s, Vodka started its ascendency and today it is the single largest category of spirits. And, it’s rise practically wiped whiskey off the map. The so-called brown stuff became “my father’s drink” and a new generation of drinkers jumped on the “white goods” bandwagon.

But guess what? There’s a newer generation of drinkers for whom Whiskey can be a real alternative to Vodka. Spurred on by the emerging sub-category of flavored whiskey (Red Stag by Jim Beam, Wild Turkey American Honey, others) I think Whiskeys will continue to grow and at a faster rate.

Bourbon is the engine of growth but you can expect good old Rye to fuel the category. Who knows – Blended Whiskey may make a comeback.