Niche marketing for SIDS in a climate of decreasing preferential treatment.
David B. Smith Cockspur Rum, Barbados AOSIS, Dominica, September 30th 2003.
Cockspur is brand volumes are relatively small; all volumes are global totals in ‘000 of 9 ltr. equiv. c/s
• • Cockspur Key Global Brands – Bacardi – Smirnoff – Absolut – Johnnie Walker RL – Jack Daniels – Pernod Ricard – J&B – Baileys – Ballantines – Jose Cuervo 95 19,400 17,000 7,500 6,900 6,700 6,600 6,000 6,000 5,600 5,500
•
Local – Stolichnaya (Russia)
50,000
source: Impact International Feb 2003
Cockspur; the history of a small island brand and a national treasure.
• First produced at the West India Rum Distillery, Brighton Beach, Blackrock, Barbados in 1884 • A Dane, Valdemar Hanschell, a small merchant trader set up a ship’s chandlery for which a reputable rum was a key portfolio item. • Cockspur remains a local island rum for c100 years • In mid 1980’s the brand owner, Goddard Enterprises Ltd (GEL), starts to export the brand to other Caribbean islands; St. Lucia, St. Vincent, Bahamas • At the same time Cockspur is adopted by the visiting West Indies cricket fans from Bermuda and a strong export market is developed. • Visitors to Barbados start to seek a product to adopt post their island experience
Cockspur; the history of a small island brand and a national treasure.
• Throughout this period, significant Bajan communities have developed oversees in the US, Canada & the UK amongst others. • GEL seeks export markets and individual distributors are appointed in these markets to supply the Bajan communities needs. • To grow volume by broadening the brand’s appeal to new consumers outside the core Bajan consumer base, a global distribution deal is sought with a multinational drinks sales & marketing company, namely Grand Metropolitan’s IDV. • IDV take equity in the Cockspur trademark.
Cockspur; the history of a small island brand and a national treasure.
• International growth targets are set and rum is laid down to age to meet the targeted demand. • Shareholder pressure leads to market place consolidation and ‘ruthless focus’ on core brands by the multinational drinks companies • 1997: IDV and UD merge to from Diageo Drinks and Cockspur falls of their radar. • 2000: Management of Cockspur is transferred back to Barbados and the whole process of developing export markets commences again.
Export market partner selection is critical to success for a small developing brand
• Long term business aspirations of both parties must be aligned. • Agree what level of priority your brand ranks within your partners business. • Know & trust your business partners. • Contracts are a means of protecting yourself in relationships….not a document by which the relationship is run.
• Learn about your export marketplace in depth….only then can you truly understand your partner’s business development proposals.
A niche brand must have a core reason for existing.
• Any brand must have a unique product benefit to succeed • Without this even multi million $ backed brand development will fail • For a niche brand without large $ advertising & promotion (A&P) investment this reason for being becomes even more critical
• Cockspur can only exist as an export brand at present because the Bajan communities oversees demand the brand; ‘something from home over here’.
• With limited A&P funds, these consumers become the brand’s ‘ambassadors’ introducing it into the indigenous community
A niche brand must have a core reason for existing.
• Word of mouth endorsement is the most powerful marketing tool. • Many island brands have a colourful history, true heritage and are associated with ‘traditional’ production values. • All these are an aspiration to the consumer seeking ‘new’ and challenging brands to make statements about their own individuality.
Small island brands must be ‘championed’ by all oversees staff at every possible opportunity
• Live the brand;
– be proud to be seen ordering & drinking the brand – present bottles as gifts – sample to your friends & colleagues
• Ensure the brand is present at all Tourist Authority / Diplomatic events
– these organisations can be integral to creating an export market in the first instance
• Market & Promote ‘at both ends’
– talk to potential consumers of your brand in their market whilst they are visiting yours
Import duties will dictate retail selling prices
(RSPs)
• Each market’s import duty strategies differ;
– government coffers – protection of local market brands – a level playing field for imported brands (regional bias)
• If your ‘reason for being’ is strong enough then consumers will understand the resulting RSPs
• If it is not strong enough then success in the marketplace is unlikely unless heavy A&P investment is in place.