FRANCE. Trevor Lloyd-Jones went to Cognac to see first hand the results of Martell’s period of research and reflection into its brand essence.
Since acquiring the brand from Seagram in December 2001, Pernod Ricard has undertaken a major study to refine Martell’s “brand essence” and the way such attributes can be federated in a decentralised marketing strategy – to deal with the widely differing Cognac markets around the world.
The first results of the repositioning are shown in a new campaign announced recently (The Moodie Report, 31 October 2003) which is aimed at recruiting new Cognac drinkers through targeted and relevant media; increasing awareness of Martell and more clearly establishing the brand’s territory. The visuals focus strongly on the Martell Cordon Bleu flagship XO line, as the objective is to grow Martell’s share within the premium segment of the Cognac category.
The image issue versus the taste issue
In many ways, Martell is typical of the competitive pressures on all Cognac houses. If it wants to attract more consumption for long and mixed drinks and younger consumers generally there is massive competition from the Scotch whisky category, which has a 20-year head start in such an education process. Last year domestic and duty free Scotch sales were 70 million nine-litre cases compared to just under 9.2 million cases for Cognac (BNIC figures).
Nearly half of Cognac sales by volume are now made in the US, with four million cases and a +12.5% rise this year, mostly sold at the VS price level.
Travel retail and duty free remain key as a showcase with approximately one million cases in 2003, yet traditional Asian XO consumers and Japanese in particular are tending to buy less spirits, and they are being somewhat replaced in the market by Chinese businessmen.
Cognac sales in Japan (duty free and domestic) have fallen to 250,000 cases per year from a peak of one million cases and the country is a completely different market now. Cognac is a stable market, with relatively little experimentation, yet it somehow has to reach out to younger consumers with discerning marketing messages that have meaning for core consumers too.
On the price issue, Cognac prices start at the level most other categories tail off. For example Martell VS is priced on a par with Chivas Regal 12 year old and it is something of a challenge for Cognac to be consistent and deliver the quality and brand values at these price points, in a way that connects with consumers. And a lot of premium Scotch whisky development is coming up to meet Cognac on price. Considering this shifting landscape, it is possible to see the challenges faced by the whole Cognac industry.
Martell international marketing director (and former Pernod Ricard Japan executive) Eric Benoist says in the period since the acquisition from Seagram by Pernod Ricard, the strategy has been to re-focus on gaining core market share, rather to encourage switching from other spirits categories.
“Exclusive concepts are a part of this strategy, but not a raft of confusing launch activity,” says Benoist. “We also want to give opportunities to explain and educate, and conduct tastings in travel retail. The more the brand goes into luxury – the more important travel retail becomes,” he says, adding that point-of-sale and packaging for the whole Martell range is also under redevelopment.
“There is interesting work to be done. We will rationalise Martell references at the top end and most important is to determine the reason for being in each case. We will identify which ones are the best expression of the brand and this takes time. Then we will choose which references to expose in duty free.”
ON THE RECORD: “IT IS NOT A TASTE ISSUE, IT IS AN IMAGE ISSUE. YOU CAN’T ADDRESS AN IMAGE ISSUE WITH NEW-GENERATION PRODUCTS. YOU ARE RUNNING AWAY FROM THE PROBLEM IF YOU DO THAT.” – ERIC BENOIST
Leading into the world of luxury
Martell’s heritage dates back to the 18th century, when Jean Martell, a native of Jersey in the Channel Islands founded the company in 1715, making Martell the oldest of all the major Cognac houses.
Martell markets itself as a Cognac with a light and floral character. Its smooth, rounded and well-balanced taste is said to be the result of a unique distillation process – which adds the “heads” and the “seconds” back to the wine that is ready for its first distillation (rather than into the second-stage distillation). Martell uses fine wine from the Folle Blanche grape in four top growing areas of Cognac, using a significantly higher proportion of eaux-de vie from the Borderies area. These core taste attributes formed part of the brand definition that went into the marketing plan.
Independence of mind was also important to the meaning of the brand, illustrated by the personality of the entrepreneur Jean Martell and his followers. Creative know-how was embodied by the creation of Cordon Bleu in 1912, and other emotional attributes came out of the research such as hedonism and enjoyment, both in perfect Cognac taste and in the way of living in the Cognac region and across the world.
ON THE RECORD: “THERE IS A CONSUMER PERCEPTION THAT MARTELL HAS NOT BEEN VERY ACTIVE, BUT THEY HAVE STAYED LOYAL. COGNAC IS A STABLE MARKET.” – ERIC BENOIST
Martell set out to define its brand essence based on a thorough analysis of this history and other attributes that determine what makes Martell unique versus its competitors. Following the research, the task was then to share this platform with everyone working on Martell, comparing this brand understanding to the analysis of each market’s situation and competition, to build a local positioning and marketing mix in each case.
Using the brand essence as a guideline in developing all above-the-line and below-the-line activities Martell seems to have set out on a path to differentiate itself from what it considers to be other, more extrovert and bragging competitors. This personality definitely leads the brand into the world of luxury, more than in the premium spirits category. Luxury brands are brands which, over time, balance their origin and product superiority with continuous research of an innovative emotional territory.
“This is what Martell will strive to do through its brand essence,” says Benoist.
Martell was the number-two Cognac brand in travel retail last year, a 2% market share and 24,000 cases behind leader Remy Martin. The brand reports a good recovery post-SARS and aggressive plans for 2004 with a radical move away from the previous “Deep and Daring” campaign initiated by Seagram. Travel retail accounts for 20% of Martell sales volume, with a significant share in the premium and super-premium qualities.
Leading Cognac brands in travel retail 2002
Remy Martin 21.6%
Martell 19.4%
Hennessy 17.9%
Others 41.1%
Note: Based on sales volume.
Source: DFIC
Cognac market in travel retail by qualities 2002
VSOP 55%
VS 19%
XO 17%
Other 9%
Note: Based on sales volume.
Source: DFIC
New products and instore activity
Martell confirms that a major, new promotional concept is being developed for 2004, conveying the new brand positioning and the year also marks the end of the Grand National sponsorship.
Meanwhile, retailers and airports are looking for original, interactive activity to attract travellers and drive footfall into their stores with brand experiences. And Pernod Ricard World Trade (PRWT) has started a good track record for instore and out-of-store airport terminal activity that engages the traveller, such as Jameson Take Five and The Glenlivet Virtual Putting Challenge. A joint Martell-Dunhill campaign in travel retail this year called “The Discerning Choices” was very successful in bringing in new consumer groups such as Thai travellers.
While formulating the brand essence, Martell defined four themes as relevant vehicles for the brand image which are highly transferable into travel locations: Voyage (Blue Ribbon and a journey into the world of the senses); Gastronomy (Cordon Bleu and French excellence and taste); the Arts (the art of discernment) and Celebration (Martell’s long history and inspirational spirit).
Future promotional activity is planned to capture these key qualities in such a way that they translate into the widely differing Cognac markets around the world.
A key challenge will be to find a common theme that is flexible enough to accommodate the regional positionings. But to tackle particular situations in travel retail, Martell has not been slow in coming forward with special product presentations and point-of-sale units, developed with PRWT last year.
The VS Sélection Exclusive (a travel retail exclusive) launched earlier this year to make Martell VS available to travellers within the EU at key locations. It was initially developed for World Duty Free’s main UK airports (in both arrivals and departures) and distribution now includes Eurotunnel.
Another travel retail exclusive, VSOP Réserve de Crus was launched to make Martell VSOP available to travellers within the EU at key locations. It plays an important role in a number of European airport locations where Martell VSOP was not previously accessible to intra-EU passengers. Current listings include World Duty Free and Gebr Heinemann. The packaging is recognisably close to the original VSOP while achieving enhanced stand-out on shelf.
Communicating the brand essence
Recent advertising developments are highly focussed on two main targets: Chinese Asians at the top end of the quality level and African Americans at the VS level, who account for 50% of consumption in the US and 19% of global consumption (as the US is the world’s largest Cognac market with 38%).
A new campaign for Martell in the US launched in October and the company says there will be more news in the coming months about developments in other major markets. The “Rise Above” promotion for the US, scheduled for the first half of the year and put on ice during the Iraq War finally broke in October and November. The campaign featured magazines such as Black Enterprise, Savoy, Trace and Vibe. The ads featured famous African Americans including recording artist Sanford Biggers and chef Gerry Garvin.
Then this month Martell Cognac started the launch of a new TV and print advertising campaign focussing on Chinese Asians, who make up 28% of global Cognac consumption.
The campaign will run in China, Hong Kong, Singapore, the US Asian communities and other major Asian markets in December/January 2003 to highlight its new brand positioning of ‘discerning enjoyment’.
The advertising claim “only a few can tell” refers to Martell as the Cognac of consumers who are discerning through their knowledge and are able to appreciate good things in a substantial way, as shown in real-life, modern situations.
The visual executions reflect Martell’s core brand values and should appeal to the target audience of discerning and demanding Cognac drinkers, who are mainly male consumers aged 35+.
The film, directed by David Tsui, features a true connoisseur of great taste and style. He represents the kind of self-made individuals who are knowledgeable, confident and successful in their choices in life.
The three print advertisements reflect the premium and distinctive nature of Martell Cordon Bleu by magnifying the bottle’s signature details such as the label, seal and ribbon.
Both the TV and print executions establish Martell, through Cordon Bleu as a quite different proposition to other Cognacs with the copy line: “Martell. The art of discernment” or “Martell. Only a few can tell”.
ON THE RECORD: “WE WILL RATIONALISE THE REFERENCES AT THE TOP END.” – ERIC BENOIST
Belief in education
The advertising campaign is supported by other promotional activities and events to build awareness and recognition of the brand – such as the Martell Elite Club in China and a special gift box, to maximise the gifting opportunity around Chinese New Year. The company also has some interesting work in progress for next year, including a focus on the growing Russian market and it has not ruled out a fresh take on the Japanese market.
As Eric Benoist says: “The scale and scope of the campaign in Asia is evidence of our investment and ambition for Martell Cognac.”
ON THE RECORD: “WE WANT TO GIVE OPPORTUNITIES TO EXPLAIN AND EDUCATE AND CONDUCT TASTINGS IN TRAVEL RETAIL. THE MORE THE BRAND GOES INTO LUXURY, THE MORE IMPORTANT TRAVEL RETAIL BECOMES.” – ERIC BENOIST
Pernod Ricard World Trade marketing director James Clarke also believes strongly in the power of educating the consumer. In the latter half of 2004 and 2005 PRWT is planning more instore activity in travel retail for Martell. “But this will take more than just a US focus, because instore opportunities in US airports are not abundant,” says Clarke.
“This is an interesting time in the brand’s development, with the end of the Grand National sponsorship and the new brand essence in place. The challenge is to find the brand nuances that are common worldwide.”
