Paul Walsh Gets It!!! But does the rest of the organization?

I just finished reading an article in The Scotsman called More to exporting than bagpipes & tartan by Colin Donald.

It's an article focusing on Paul Walsh - Chief Executive of Diageo and newly named Chairman of the SWA.

In the article, Mr. Walsh is quoted as saying:

"I think the reason that Scotch languished as it did in the 1990s was that, as marketeers, we relied too much on the wonders of the product and we communicated those wonders through – forgive me – bagpipes, heather and tartan. Those are very important and relevant qualities but in today's world they are not enough to position the product to a new-age consumer."

Mr. Walsh gets it. I'd like the opportunity to chat with Mr. Walsh, as I am impressed with his stewardship of Diageo - and the man has certainly turned a good profit for me as a shareholder.

What Diageo, as a marketing behemoth, misses is that marketing needs to be authentic - and authenticity can come from selling the Kilts and Castles. If you forgo that imagery, then your approach must firmly rooted in an authentic departure.

Despite what most CPG brand managers believe, branding is NOT the "Walking Man" or inexplicable brand extensions or even the product itself - instead a brand is that impalpable convergence between what you want a customer to think about your product - and what they actually think about it.

Brands are defined by consumers - not by the companies which produce them.

That's a tough pill to swallow for all the marketing, advertising, and public relations people (and not just at Diageo) - who are absolutely certain that they can control the mind of the weak-willed consumer. They miss the point that a company can certainly influence how a consumer thinks - by clearly describing the qualities which differentiate a product.

Playing on the insecurities of the consumer - as so many marketers do - is not "life-style". Nor is it a long-term marketing strategy.

So while I agree with Mr. Walsh's keen observation (and I don't just say that because I've been saying it for years) that in order to be truly successful in the world-wide market, the perception of Scotch has to change - a move to life-style based marketing is a great start - but certainly not the only answer.

Life-style marketing is not a panacea - and, managed poorly such approaches can unfortunately degenerate into fad status. It can also become the basis for a very poor play-book. (Rap Stars & Alcohol, anyone?)

Arrogance of the marketer

A year or so ago I engaged in a discussion about Johnnie Walker Blue with a Diageo Brand Manager (she was not the Brand Manager for Johnnie Walker.)

Johnnie Walker is a shining example of a Scotch whisky (or family of whiskies) which very successfully uses life-style marketing. I am a personal fan of the "Keep Walking" campaign, which is usually brilliantly executed, and successfully diverges from "kilts & castles" marketing - while keeping the brand's heritage firmly in the mix.

Johnnie Walker Green and Gold are great whiskies and I have recommended them numerous times in person and in print (and JW Black is not bad either - since I'm flogging JW). The JW family culminates in Johnnie Walker Blue, which if you believe the hype, is the epitome of life-style.

In my estimation it's also a shining example of brand extension driven to the extreme by a complete lack of imagination. (Oops! Let's not forget the even further extension to JW Blue King George V).

The basic premise of the discussion was that I am wrong about JW Blue.

My basic argument is that Blue is a fair to middling whisky with a high price tag.

The basic argument of my opponent was "If it is so bad why do so many people buy it".

I've never said that it was bad. I've only said it's not THAT good. Certainly not $200 good.

I also said that the vast majority of people who drink it do so based on the ridiculous price; and the status they perceive from the purchase - and not because of the taste.

I will put money down on the fact that many of the people who swear by Blue would not be able to tell the difference if I swapped their Blue out with JW Gold (a point I made during the discourse).

The primary response to that comment - and throughout most of the conversation - was a look that said "You poor misguided idiot - you know nothing".

It's true - I don't rely on focus groups to plan my strategies, create new products, or price my products. It's also true that I don't rely on the buying habits of some over-paid stock brokers to decide on what is "good".

I DO tell high end establishments that I work with to have JW Blue on the menu. I tell them to charge as much as they can for a pour. I tell them some idiot will pay for it.

At least one bar that I know of charges somewhere in the range of $50- $60 for a single pour of JWB. It's an inside joke with the staff to see how high a price they can charge and still sell the stuff. They are basically making over $1000 profit on the full bottle - and that is if they are buying at retail prices.

If you are going to treat me like an idiot and dismiss my viewpoints, then at least have a better argument than "people buy it". People bought fucking Yugos - that didn't make them good cars.

Comments

[Japanese whisky]

And Yugos were cheap.

[Ian Buxton]

There is a well-known phenomenon here which we refer to as "the Scottish cringe" - an apology for anything that might be a bit distinctive, that we might get a bit passionate about, or which, heaven help us, might make us stand out from the crowd.

Hence an obsession in Scottish (and Scotch) marketing circles that "bagpipes, heather and tartan" are bad and must be avoided at all costs.

Two questions: 1) when did you last actually see a Scotch ad, certainly from a major brand, that used bagpipes, heather and tartan? and 2) what's the problem anyway with national icons as distinctive, powerful and strongly identified with Scotland as those are? Do we imagine that the French, or Americans or any other country you can think of wouldn't flaunt them if they had 'em? So why throw them away?

Try using those symbols creatively - see the European market William Lawson's TV ad "Haka" for an example (check it out on YouTube). And other Lawson's stuff.

And didn't great global brands like Johnnie Walker and Dewar's and many others actually get built on a foundation of bagpipes, heather and tartan? Was there so very much wrong with that? That's brand heritage, isn't it?

PS: Kevin, if you think Blue is expensive, then what about Johnnie Walker 1805 at $2,000 A NIP (yes, a nip - this is not a typo) in Gleneagles? Sad acts actually buy it!

Those marketing guys are laughing all the way to the bank!

[James T]

horses for courses - as Scotch is just a wee bit Scottish as in "no other product, in any category, anywhere in the world, is named after its country of origin" - it kind of has to come with the mist, the hills and some drunken kilted highlander of old attached at times. I think it's the baggage of the marketng of blends for 100+ years. Understanding a good Single malt is a very different proposition - but you would have to differentiate between Scotch (blends) and the less mainstream Single Malt bottlings to complete this argument.

[Dan D.]

As someone who hails form the US knows little of the complexity of Scotch but enjoys a glass from time to time, my eyes are fixed not on the price tag but the image. Exotic whiskeys here in the US sell not based on quality but on perception. Sure JW Blue label may not warrant the $200 price tag but until until another whiskey can dethrone the proverbial JW walking man image, no other whiskey quality or crap will rival the marketing physiological effect of JW.

[Ophelia]

While any reader of your terrific blog doesn't have to be told that single malts will never go out of style, per se, lifestyle/image marketing versus "kilt and castle" imagery is not a discussion to have within the confines of the scotch industry. i don't think this is a matter of one brand trying to win over another brand's devoted imbibers as much as it's a matter of the scotch industry's *necessary* efforts to lure new drinkers to the category -- especially given how fast the spirits market on the whole is getting more and more crowded every year. Companies/distillers have to cultivate an image to warrant -- or, in some cases, to create reason for -- the ultra-premium prices....especially if they're going to target drinkers in their 20s who aren't yet aware of/versed in various spirits' legacies -- particularly Scotch's, which, as James T. pointed out, can be daunting. Apologies for using this term glibly, but Scotch distillers/brands won't win hearts and minds with bagpipes and tartan. And too often, as you state, taste has nothing to do with winning hearts and minds either.
As evidence of people pawing over top dollar for a drink not because it rocks one's palate, but because it's a status signal, let's look (however wincingly) at the vodka market. Huh?! yep, people will eagerly fork over $25+ for a shot of colorless, odorless alcohol just because it has some superlative adjective in its name and a glammy endorsement. extra smooth? maybe, some will claim, but chances are, they're mixing it with bottled cranberry juice or soda from a gun, in which case any "smoothness" is overshadowed. and look how the image-is-everything tactic is being adopted by the tequila industry, which has quickly become one of the fastest growing spirits category in the US. many brands are, accordingly, redesigning their packaging to offer that sleek sexy bottle that resembles all the supermodel vodka bottles on the back bar. i'm hardly endorsing glam and sleek for the sake of sleekness, but if there's going to be any chance of educating new legal-aged drinkers about the complexity and rich legacy of Scotch, there must be a way to make sure people in crowded, popular venues at least have the visual cue or pop culture association to think to order the spirit for the first time. just as Scotch gets better with age, so will people's appreciation for the legacy (ie: kilts and castles.)