Angove´s St Agnes Brandy (página 2)

The brandy market was affected by the Whitlam
government"s increase in spirits tax. Since these days the
Australian market and producers have being damaged, some
companies could survive but others could not. Foreign brandies
are mainly from France, which have been characterized by low
prices. Actually, Angove"s have 40% of the domestic Australian
market, and 45% of the market is captured by French brandies
(Mine, 2005). According to the report of the company William Reed
LTD (2004, p.2) the main French brandies are:

• 1. Courvoisier VS

• 2. Three Barrels

• 3. Martell VS

• 4. Jules Clairon

• 5. Remy Martin VSOP

These products have been trying to build their image
with luxury labels and bottle designs. Samples in chocolate
bottles have been produced to state the status of the brand, most
of the time they are distributed in fancy restaurants (William
Red,
2004).

Shield (1995, p 2) mentions in "The brandy Balloon Goes
up" some of the most important Australian brandies:

Brandy Company Characteristics of the
flavor

Other important companies in the brandy market are
Southcorp"s Chateau Tanunda, and Tarac"s Barossa Brandy, but the
main problem for Angove"s St Agnes brandy is not the rivalry
between local or French brands. The real problem is the customer
image of brandy. Brandy is thought to be old fashioned, for older
people, and Angove"s want to reposition the brand for a market
between 25 – 40 years. The budget to do it is $200,000 (Milne
2005).

Mr John Carlyon Angove knows that the budget for this
campaign is short, compared with other products of the company,
and he is conscious that the image of the market is not going to
change over night (Milne 2005). If the marketing
agency does not do something to change the image of brandy the
product will decline even more in the Australian market. Another
market alternative is the American market, which grew 10% in the
last year.

(Second Credo)

Actual sales of Angove"s brandy are 90,000 cases per
year, and the goal for this year is 100,000 bottles. Recently,
Angove"s company and Qantas signed an agreement where domestic
and international flights (Bawden 2005) will provide St Anges
brandy to the passengers, which will bring a increase of 1,000
cases per year. An extra benefit is the exposure of the brand to
overseas consumers (Milne 2005). Financially it will provide 12%
more sales for the company (Bawden 2005).

The forecast in Business Monitor
International (Q1 2005) shows that the Australian alcohol market
will have an increase for the following year. Some of the
products that are expected to lead this tendency are beers, low
alcohol beverages, new premium products and non alcoholic
products.

The following chart shows the past, actual, and future
sales of Alcoholic drinks in Australia (Business Monitor
International, 2005)

The main income in sales was in supermarkets, followed
by discount stores, and convenience stores sales (Business
Monitor International, 2005).

A SWOT analysis in the Australian beverage business is
shown in the following chart:

Strengths

• High level of education in the workers

• Highly developed transportation
  infrastructure

Weakness

• Low levels of investment compared with the Asian
  market

• Small possibilities for growth in the
  market

Opportunities

• US free trade agreement,

• Development in Asian markets

Threats

• High levels of taxation in Australia

According to Business Monitor International (Q2 2004),
the United States is the biggest retailer in the world. The
American soft and alcoholic drink market is expected to grow
12.5% for the next year, and the sales forecast for the year 2006
is US $136.3bn. This result makes the American market a good
option for Angove"s company.

Important information was found in the report of BMI,
where it shows that 75% of the sales in hot beverages were
achieved from coffee. This makes a good opportunity for Angove"s,
where one of the strategies that will be proposed is to create
exotic beverages. More information will be discussed in the
future of this essay.

Another opportunity for the Angove"s Company in the
American market is that slow growth in the alcohol market will be
driven up by sales of "higher quality and premium products"
(Business Monitor International, Q2 2004, p 5).

The following table shows the behavior of the Alcohol
and coffee drinks market in America (Business Monitor
International, Q2 2004, p 6):

The previous table shows the size of the American
market, managers from different marketing agencies must take into
account the sales potential that this market could bring for the
company.

A marketing plan must be
implemented to help Angove"s company to state the actual position
of the company, to decide where the company what to go, an what
are your plans to arrive there (Auld 1997, p. 36).

According to Auld seven steps must be done to create a
marketing plan (Auld 1997, p36-41)

• 1. "Determine where you are now (SWOT
  analysis)

• 2. Establish your objectives

• 3. Who are you talking to (Which is your target
  market)

• 4. What strategy will you use to achive your
  objectives (being the first choice in your market)

• 5. Determine your tactics (creating offers to
  your target market)

• 6. What is your budget? (budget for new and
  current customers)

• 7. Tracking and reporting (how Angove"s company
  are going to measure the results)

In the budget point, is important to state that Angove"s
company must determine the value of each customer. After this
must decide how much of the budget is going to spend to retain
her/him. If the customer is giving big income to the company,
direct markting must be focused more to her/him in the future
(Auld 1997, p. 59)

In addition, Angove"s"s marketing managers must also
consider in this marketing plan: "direct marketing, public
relations, advertising, sales promotion, distribution, and sales
training" (Auld 1997, p. 41)

(First Credo)

It is important for all the people that will collaborate
with the development of the marketing of the company to know that
we are starting a new era in the way that we communicate, and
that the company"s strategies must change. The budget to develop
a successful marketing campaign is small. For this reason our
ideas must be innovative and targeted to our
customers.

Godin analyzed that 100 years ago companies were
successful because they had large extensions of land, making it
possible to have power and be unbeaten in the market. In the
second century, successful companies were characterized by the
enormous construction of factories. Today, the way of do business
is to create great ideas for the market (2000, p 18). These ideas
must be embraced by our customers.

Godin in his book "Unleashing the Ideavirus" creates a
new word,
"ideavirus". This concept states that every person who interacts
with the product or service must be infected with the idea.
Ideavirus is created when the concept of your product is talked
about by friends, workers, classmates, and other people. The
important of this concept is that people find some value of your
product that satisfies them (2000, p. 19).

People are interacting and communicating more than ever.
For this reason it is impossible to stop them from marketing
(Godin 2000, p.20). Angove´s St Agnes can win if the
ideavirus is spread successfully.

For this reason we must focus in this campaign more than
ever on the people, effective communication, and marketing that
arrives directly to our customers. Customers will help us to
spread the idea and image faster than any other media.

People in charge of Angove"s marketing must know that
ideas are not forever, and the lifecycle is short. For this
reason a new idea must be developed to replace the old one.
Furthermore, marketing, media and PR people in the company must
help customers to interact and spread the ideavirus between them,
while not forgetting to ask what the customer wants (Godin 2000,
p. 25).

(Third Credo)

In the brief introduction, at the beginning of the
paper, it was mentioned that Angove"s St Agnes brandy is an icon
of South Australia. If we concentrate on this idea, and try to
get the Australian people to see St Agnes as a South Australian
icon, this will help to build the national image and the
perception of the brand. In addition, Godin mentions that if the
ideavirus is not up to 15% in the target market, or the
percentage does not dominate the market, the ideavirus will not
be successful (2000, p. 27). Angove"s must start to create
Angove"s brandy as icon of the country. Angove"s brandy must be
the most famous spirit in Australia, like tequila in
Mexico.

The ideavirus described before will help to the increase
the local market share, and start to develop the idea overseas.
Managers in this task must differentiate between ideavirus and
word of mouth to achieve the goal.

Moreover, the alcohol market is a very attractive market
in which to do business. Firstly, the markets capacity for growth
is enormous, there are a lot of people that do not drink, or do
it but not in large quantities. Secondly, the behavior of
drinking is a "social phenomenon, perfect to for spawning
ideavirus" (Godin 2000, p. 199). Related ideas will be discussed
in the future of this paper.

(The Fourth Credo)

According to Dru, marketing of diet drink companies must
"make people think that when they are drinking" (Dru 1996 p. 114)
some sugar free beverage customer must think that they are
drinking "the real thing" (Dru 1996 p. 114) with sugar. This idea
can be developed to the alcohol market, people must not think
that they are drinking alcohol, they must think they are drinking
fun.

Advertising
Agency

Angove"s company already knows that drinking is a social
phenomenon, and it must create a link between friends and
alcohol. Advertising can be linked to the social circle of the
customers, giving the idea that drinking will improve their
relationships with their friends.

It is an important goal in this marketing campaign to
grow faster than the market. Absolute has done it successfully
during the last years. This vodka brand is 50% more expensive in
the American market, and customers still buy it. The reason for
this success is that Absolute focuses its image in the perfection
of the product, and not on the competition. To understand this
idea better it is relevant to quote "The Law of the opposite"
(Trout 1994, p.51). This law mentions that is not so important to
better in the market, the most important thing is to be
different.

French brandy is cheap and could have other qualities,
what Angoves´s´s marketing managers need to do is to
change those strengths into weaknesses (Trout 1994, 51), but the
main point in Angove"s strategy is be different.

Even more, Angove"s can create a customer brand image
where the point is to be different from the crowd (Dru 1996, p.
117).

Another way to advertise this product is to create
episodes in the advertising. Divide the T.V spot in two or three
parts. This will create interest in the consumer about your
brand. This also can be managed with some magazines or other
media. This way of advertising is linked strongly with PR, and
the strategy of having another idea prepared and ready for when
the first idea declines (Dru 1996, p. 168).

PR company

One idea to communicate with customers could be the
concept of "consumer insights" (Dru 1996, p. 172). This concept
creates ideas based in observations about life. Ideas that
managers of marketing can take are "stolen moments, fleeting
forays into real life, and revelations of the way people think or
what they do." These ideas are not just ways to communicate, but
are also elements to build your campaign.

In the book "the fall of advertising and the rise of PR"
(Ries & Ries 2002, p. 51) states that the most important for
PR and advertising is to deal with the perception of the
consumer, and not with the product. Common advertising make
famous the advertising and do not focus to the main point that is
create sales value.

To create the concept that Angove"s is going to promote
is important to have in mind the theory "One – two –
three Approach". This theory is based in the concept that PR
people must support the concept to promote with two real events
already happen.

Another interesting idea is what Absolute has created
with PR. The concept is to sacrifice the message. They apply the
credo of sacrifice, creating different histories where the idea
to communicate can change in each history. Angove"s can create
the story of the founder, the story of distillation, or other.
(Morgan 1999, p. 130).

(The sixth Credo)

In the chapter "Rebuilding an Old Brand with PR" (Ries
& Ries 2000, p. 123) states the example of how Bacardi has
been successful in the market. It is explained that the company
has focus to increase the knowledge, experience and range of
activities that of the brand. There are many way to advertise
Bacardi rum, and also de varieties that had been developed during
this years. This elements has done of the company the most famous
alcohol company in Americas (Ries & Ries 2000, p.
123).

Mr Angove"s is an excellent channel for PR. A brand,
product or service could not be interviewed but a person can be
done. When the product brings the name of the founder results are
multiplied by two (Ries & Ries 2000, p. 160)

New brand needs publicity because key element that is
missing is credibility, contrary to old brand that needs
advertising. Advertising helps brands to have "oxygen in their
life- support systems" (Ries & Ries 2000, p. 221)
.Nevertheless, advertising and PR can be managed successful at
the same time if managers understand the importance of each
one(Ries & Ries 2000, p. 221) .

Direct
marketing/customer relationship management
supplier

According to Auld the benefit to create direct marketing
by the web is that you
can measure, and is cheaper than other media. What is relevant in
this type of direct marketing is to have the ability to record
all the answer of your customer, and also the ability to know why
some customers did not answer (Auld 1997, p. 41).

In direct marketing is important to build the database,
creating this information it is possible to email or mail your
customers. In database it is important to have the philosophy of
"Ready, fire, aim". The meaning is to have the information in the
right moment, in the right place, and with the right target (Auld
1997, p. 74).

In direct marketing, is important to remember the rule
20/80, where 20% of your customers make the 80% of your profits.
For this reason is not relevant the mass marketing in this
industry (Auld 1997, p.28).

E-mail can be used as direct marketing. This way of
communication with the customers can include images of Angove"s
brandy production. Managers must remember that e-mail has some
hidden cost, some of this are shown in the next table with an
example of 200,000 e-mail (Auld 1997, p.65):

As we saw not all the e-mails were effective, and this
can affect directly in the cost of the message. As we known,
Angove"s"s budget is limited and we need to focus in the right
people (Auld 1997, p. 66)

With customer relationship management, and the way that
the company is going to distribute the information about the
products is in the same way that physical distribution does. Buzz
distribution information are designed to communicate "from
manufacturer, to reseller to end user" (Rosen 2000, p. 219). This
system will create more interaction, the task for marketing media
is to create the ways.

Internet, and e mail is allowing the customers to be
more educated about the goods that they buy. Years ago customers
only received information from the sales people in the store,
today if someone wants to buy something it is common for them
search for information on the net. For this reason the company
will develop more ideas and links for the interest of the
consumer. One idea is to create an online space where customers
can interact and talk about the products, or give recommendations
or opinions about the product. Information from a wine expert can
be included in the web page of the company, the point is to help
customers to communicate.

(The seventh credo)

Customer relations can be improved by the creation of a
customer product information telephone number. Customers can call
and express their ideas or opinions, or ask questions about
brandy. Providing different communication channels it is
important (Dru 1996, p.171).

Old customers are very important to Angove"s St Agnes.
The reason is that the longer they stay with the brand the more
they spend in out product. A second benefit of these customers is
that the amount spent in serving them decrease with the time (Dru
1996, p. 333). Marketing people must remember that loyalty is not
achieved with gift, is achieved with the customer service
provided each time that customer comes to buy our product (Dru
1996, p. 336).

During the development of this essay, is possible to
notice that communication that the value to talk, and the
communication that we have with the customer in the future is the
most important, and for sales promotion is not the
exception.

To create a new value in the curve of customer, the
chapter "Analytical tools and Frameworks" suggests for non
alcohol berage the next four steps:

Reduce

• All factors the alcohol industry had
  long competed on

• Tannins

• Oak

• Complexity

• Complicated labels

• Terminology

• Ranch of products

• Stockkeeping units

• Variety

• Simplify wine displays

Eliminate

• Compromises, and industry
  forces

• Investment in factors that an industry
  competes on

• Difficult process to choose

Create

• New demand, and shift the strategy
  pricing of the industry

• Accessibility

• Fun

• Social drink

• Simple products

• Non traditional products

• Non traditional labels

• Easy selection

• Recommendations

Raise

• Buyer value, elements across
  alternative industries

• New experience for buyers

• Sales

• Mass media

• Consumer advertising

Media buying
house

Dru mentions that we are arriving in an era where things
are becoming more intangible, for this reason it is important to
reinforce the brand position. He suggests doing this with pre
ideas, like pre-campaign or pre-messages (Dru 1996, p. 160). This
is suggested in four areas: "branding ideas, added-service ideas,
event ideas, and media ideas" (Dru 1996, p.161), which are the
responsibility of the media house.

A branding idea for Angove"s brandy could be to give a
relaxed name to the product, something that customer will feel
comfortable buying and drinking in front of his/her friends. Also
Dru suggests using simple or easy names to remember, names that
give great ideas to the perception of your customer (1996, p.
162)

If we focus on the idea to create service ideas, we can
take the examples of Starbucks Coffee. This company is trying to
educate its customers in the field of coffee, making them
connoisseurs (Dru 1996, p. 164). This idea can be created if
Angove"s try to do the same with brandy. Some times companies put
brand stores in up market malls or shopping centers. The idea of
these stores is to build the image of the brand, rather than
making a profit at that particular store. In these stores the
communication is direct with the customer, from producer to end
user.

In addition, if we remember that 75% of the hot beverage
market in America is achieved by coffee. The idea to create
exotic beverages is good, but is better if we can make a
corporate contract similar that the one with Quantas, but this
time with Starbucks. This agreement can bring us excellent
revenues, and internationalize the brand of Angove"s brandy. This
idea of making our customers connoisseurs benefits both
companies.

Angove"s can develop the idea of the great Australian
brandy around the world, helping to build the image of the
company.

Angove"s Sales
and distribution staff

The salesforce can wear t-shirts that communicates the
most important points to customers.

(The Eighth Credo)

Distribution staff is an important link in the marketing
communication. These people are involved a lot with the customers
and have many ideas that can improve products. Nevertheless is
important to create alternative ways of communication with the
customers. Capacity and ability to communicate knowledge of the
product can change from one store to other, damaging the campaign
of the company (Rosen 2000, p. 220). Time is also import because
the way "to spread buzz can change over time" (Rosen 2000, p.
220).

The creation of web sales can be useful. Firstly, it can
bring new and direct information from the customers, and secondly
Angove"s company can relate direct information from customers and
design a chat where
they can see the products that other customers buy it.

Another idea for Angove"s sales is to design a site
where customers can go and ask the sales representative for a
product suggestion for their dinner party or event.

It is also important to remember to the people involved
in the marketing plant that if Angove"s St Anges can not be the
first in the category, we must find a new category where the
company does it (Trout 1993, p. 11). Be the cheapest brandy in
Australia is not the most important, remember
it¡¡¡¡

In conclusion, the way of do businesses is more
intangible than ever. Communication between humans and companies
is changing. Databases are more complex and sophisticated, and in
the marketing business perception is becoming to be
everything.

References

Auld, M 1997, Direct Marketing Made Easy,
Harper Business, Australia, pp. 36-41,59

Baker, T 14 March 2003, "What I like about home, sweet
home" Dow Jones & Reuters, viewed 10 April 2005,
Factiva

Bawden, T 16 February 2005, "St Agnes gets her wings"
Dow Jones & Reuters, viewed 10 April 2005,
Factiva

Breakenridge, Deidre & DeLoughry, Thomas J – The
New PR Toolkit: Strategies for Successful Media Relations,
Financial Times Prentice-Hall, USA, 2003

Dru, J 1996 Disruption, John WHey & Sons,
New York, pp. 114,117,160-171, 336

Food & Drink Forecast Australia Q1 2005, 16 April
2004, viewed 10 April 2005, pp. 1-10, Busines Monitor

Food & Drink Forecast United States Q2 2004, 16
April 2004, viewed 10 April 2005, Busines Monitor

Gladwell, Malcolm 2000 "The Tipping Point,
Little, Brown" & ~~, London,

Godin, S 2000 "Unleashing the Idea Virus, Do
You Zoom Inc", USA, pp. 18-27, 199

Milne, C 21 February 2005, "Angove"s in high spirits for
a revival" Dow Jones & Reuters, viewed 10 April
2005, Factiva, p.2

Morgan, Adam 1999, "Eating the Big Fish: How Challenger
Brands Can Compete Against Brand Leaders", John Wiley & Sons,
p.130

Off licence news, 3 September 2004, "Cognac and grape
brandy" Dow Jones & Reuters, viewed 10 April 2005,
Factiva

Rehm, J & Rehn N 2003, "The Global Distribution of
Average Volume of Alcohol Consumption and Patterns of Drinking"
European Addiction Reseach, pp. 149-155, viewed 1 April
2005, Karger AG

Ries, AI & Ries, L 2002 "The Fall of
Advertising & The Rise of PR", Harper Collins,
New York, pp. 51,123,160,221

Rosen, E 2000 "The Anatomy of Buzz – How to
create word-of-mouth marketing", Doubleday, New York,
pp.219,220

Shield, M 19 March 2005, "The Brandy balloon Goes up"
Dow Jones & Reuters, viewed 10 April 2005, Factiva,
p.2

The Advertiser, 16 February 2005, "St Agnes set to
travel" Dow Jones & Reuters, viewed 10 April 2005,
Factiva

Trout, J & Ries, AI 1993 "The 22
Immutable Laws of Marketing", Harper Business, New York,
pp.11, 51

http://www.angoves.com.au (online)

BIBLIOGRAPHY

Grey, AM & Skildum-RK "The Sponsorship Seeker's
Toolkit" (2nd Ed), McGraw-HiII, Australia, 2003

Jones, JP 2002 "The Ultimate Secrets of Advertising,
Sage Publications". California, USA

Sutherland, M & Sylvester A 2000 "Advertising
and the Mind of the Consumer", Alien & Unwin,

Autor:

Nahum Romero Santana

14 de mayo de 2005