The Challenge Facing the New Owners of Chivas Regal infinding a promotional strategy that will reverse the brand’ssale slump.KEY ISSUE: US/ World EconomyThe economic condition will inevitably impact the global drinks market but the extent ofits impact remains unclear. Recent figures reveal that American consumers are alreadyreducing their number of shopping trips as they begin to feel the pinch of branddownturn. This trend is likely to spread across the globe as consumers look for valuerather than luxury and there will be a decrease in the demand for premium products. TheUSA is a key market for many of the brands in the Power 100 and they will surely feelthe pressure of an economic turnaround. Yet despite the threat of a global market demise,the drinks industry has a history of remaining relatively buoyant in times of us anddowns.BRAND DEPTH• Chivas Regal :Chivas Brothers was first established in 1801 in Aberdeen, Scotland. The Chivas brands home is Strathisla Distillery at Keith, Moray in Speyside, Scotland. Chivas Regal Family:Chivas Regal whiskies are blended in a distinctive house style of a mellow, honeyed flavour. Chivas Regal 12 Year Old: Blended from whiskies matured for at least 12 years. Taste: Round and creamy on the palate, a taste of honey and ripe apples, with vanilla, hazelnut and butterscotch notes. Chivas Regal 18 Year Old: Blended from whiskies matured for at least 18 years. Taste: Chocolate and orange notes, some citrus and spice on the nose and a full, fruity, citrusy and spicy palate, with sherry notes to finish.  Chivas Regal 25 Year Old: Created using whiskies aged at least 25 years; available only in limited quantities with a retail price of c$300. Taste: The blend has tasting notes of apricot and peach.• Johnny Walker Black(JW) :The colour black of Johnny Walker Black has always been associated with style and elegance. The little black dress is always a sophisticated choice whereas the traditional tux can transform any mans appearance. But black is also intriguing. It has a hint of mystery, of something waiting to be revealed. This is Johnnie Walker Black Label - a deep and complex flavour which is also an unquestionable mark of power and refinement. It is a luxury blend and a luxury brand, with a completely individual personality.The scotch category, led by Johnnie Walker and the winning combination of Ballantinesand Chivas Regal, is rapidly encroaching on the vodka category. The trend is particularlynoticeable in this year’s two most powerful brands: Smirnoff, which has clung to thenumber one position and Johnnie Walker, which, although sitting in second place, has asignificantly higher brand score than Smirnoff. If Johnnie Walker’s growth continues,Smirnoff could be superseded. This is a result of brand depth and territorial relevance.Scotch is performing very well in all continents while vodka still has a heavy relianceupon the US market. This indicates that the vodka category may have reached a plateau
and the drinks groups will need to look beyond the next vodka flavour to generategrowth.FACTS: Chivas had long enjoyed a reputation as a deluxe scotch whisky. In 1990s,a print campaign was keyed to the slogan”There will also be a Chivas Regal” The campaign featured a series of universal images and was translated into 15 languages.Managers in each 34 countries were authorized to choose indivisual adds from the campaign. Advertising; Chivas Regal and Johnnie Walker start preaching to the choir in campaigns aimed at Scotch lovers. For the marketers of two big brands of Scotch whiskey, Chivas Regal and Johnnie Walker, it was back to the drawing board -- again. Both have discarded advertising they had introduced only recently in favor of significantly retooled campaigns. One reason for the changes, in campaigns with combined budgets estimated at more than $25 million, was a switch in strategy for selling Scotch. Rather than remaining focused on stimulating demand among consumers who do not already drink Scotch, the campaigns now getting under way concentrate on wooing consumers who already do, particularly aficionados of the pricier single-malt Scotches. Also a factor was the need to remain competitive in the clamorous liquor market. Brands like Bacardi rum, Tanqueray gin and Finlandia and Stolichnaya vodka are all changing their marketing approaches by bringing out revamped ads. Sales of Scotch whiskey and other brown goods, so named for their color, had declined for decades as younger drinkers gravitated to white spirits like vodka and gin. But it looks like Scotch has bottomed out, said Frank C. Walters, senior vice president and research director at M. Shanken Communications in New York, who oversees the companys annual report on liquor brand performance, known as Impacts Spirits Study. Its a good idea, Mr. Walters said of the decision to change campaigns for Chivas Regal and Johnnie Walker, because the ranks of younger drinkers, growing as the children of baby boomers reach 21, are drinking better. That is a reference to the propensity to buy higher-priced distilled spirits like single-malt Scotches and super- premium vodkas. Why shouldnt they get a piece of that action? Mr. Walters asked, referring to the marketers of the two brands. In 2000,Chivas Regal was sold to a French person named Pernod Richard. Chivas Regal, sold to the Pernod Ricard U.S.A. division of Pernod Ricard, is the No. 4 brand of Scotch whiskey in the United States, according to Impacts Spirits Study. Case shipments were flat last year when compared with 2001 after falling in 2001 from 2000. Johnnie Walker is sold by Schieffelin & Somerset, a venture of Diageo and LVMH Moët Hennessy Louis Vuitton. The Johnnie Walker Red Label brand is No. 2, according to Impacts Spirits Study, and the Johnnie Walker Black Label brand is No. 3. Red Label case shipments fell slightly in 2002 from 2001 and in 2001 from 2000,
but Black Label enjoyed robust gains in the two-year period. (The best-selling brand by far in the United States is Dewars, marketed by Bacardi.) Chivas has changed campaigns frequently in the last 20 years. The most recent ads, since 1999, carried the theme When you know, replacing a campaign that had run since 1995 that carried the theme You either have it or you dont. The new ads, in English and Spanish, with a budget estimated at more than $10 million, carry the theme This is the Chivas life, in print, outdoors and on television. Theres always a huge temptation to pursue drinkers who have not developed a taste for Scotch, said Chris Willis, vice president for marketing for Chivas Regal at Pernod Ricard U.S.A. in White Plains. But you can go a little too far, losing some of your roots and heritage. I think we did walk away from some of our core brand values, he added, and realize that it would be better to take a line of much less resistance, because we have more chance growing the brand by taking share from other whiskeys than stealing share from white spirits. While the When you know ads were centered on wry comments about lifestyles -- like digs at people who keep pampered poodles as pets -- the new campaign offers paeans to the trappings of la vida Chivas that re-emphasize the brand name to play up its associations with the luxe life. For instance, ads celebrate going ice fishing in an Alaskan glacier field rather than a local pond, crossing the room like you own it at a hot club and sailing away with friends after you throw a dart at a map of the world and go where it lands. Brand Architecture International in New York created the Chivas Regal campaign in North and South America for G1 Worldwide, a division of the TBWA Worldwide unit of the Omnicom Group. The campaign is part reinforcement of our existing franchise, to get our fair share of whiskey drinkers, and part recruitment of newcomers to whiskey, said Adam Stagliano, president and founding director at Brand Architecture. We still want to reach out and bring new people into the franchise, Mr. Stagliano added, but were not just saying were a great liquor brand, as When you know did. Were doing it in a way that says were a great whiskey. The new campaign for Johnnie Walker reworks ads that were introduced in January 2001, which carried the theme Keep walking. The theme remains, as does a role for the venerable character known as the Striding Man. What is different in the new print and outdoor ads for Johnnie Walker, with a budget estimated at $15 million, is a significant scaling back of the outsized point of view of the previous campaign, which suggested that the life of a Johnnie Walker drinker was, with apologies to Cole Porter, a trip to the moon on whiskey wings. Gone are ads that honored gazillion-dollar ideas like inventing the online bookstore, the gourmet coffee chain and snowboarding. In their place are less grandiose stories that include elements of frustration and even failure. For instance, one print ad shows a successful music producer whose past careers are listed as terrible guitarist, incompetent drummer, laughable lead singer. Another ad shows a man whose perfect job is as a nature guide. And a billboard shows the Striding Man navigating a fever chart, reminiscent of recent stock-market performance, with jagged peaks, deep valleys and a final slight upturn.
We wanted to hook into a universal human truth about leading a successful life, progress, moving forward, said Richard Nichols, product group director for Johnnie Walker at Schieffelin & Somerset in New York. The ads showed what progress meant at the time of the dot-com boom. After sitting down with people to get insights into how they live life today, we found they see it as a journey, with good moments and bad, he added. And now the Striding Man is a symbol people can say moves forward with me on my journey. The Johnnie Walker campaign was created by the New York office of Bartle Bogle Hegarty. Aiming the ads at the customers Johnnie Walker already has, said William Gelner, group creative director at Bartle Bogle, can help them become brand zealots who can do a lot of the heavy lifting with people who arent. As for the altered approach, success is now the sum of the obstacles you overcome, the fears you face, the lucky accidents along the way, Mr. Gelner said. The original campaign was based on an attitude that went along with overnight, 24- year-old millionaires, he added. Were living in a much different age, a much more sober time.SOME OF THE STRATEGIES ADOPTED BY CHIVAS REGAL • In February 2004,online promo of Barman Chivas,a 3D game was designed by the consulting firm Arena,dependent on the product consumption of the particular brand. • In August 2003, Hispanic rock group La Ley recently concluded a 23-city tour, which was sponsored by Chivas Regal. The final stop for the tour was Los Angeles. Other tour stops in the West included San Francisco, Santa Barbara and Fresno, Calif., and Las Vegas. The tour, which attracted more than 60,000 people, is part of Chivas Regals grassroots marketing efforts targeting young Hispanics. • In July 2004,Pernod Ricards Chivas Regal brand launched a nationwide search for an individual to explore the globe and document their findings in The Chivas Life Guide, a travel and lifestyle guide scheduled for release in 2005.Chivas Regal had placed classified ads in the help wanted sections of both national and major metropolitan newspapers nationwide to extend the search for the candidate. • In June 2009,Chivas Regal launched a "major overhaul" of its digital marketing strategy as it became the latest whisky brand to ramp up its online activity in a bid to broaden appeal. • In 2009,Chivas Regal also sponsored The Black Eyed Peas, Robbie Williams, Beyonce’s, and Christina Aguilera’s tours in Asia.
• Hispanic Business Strategy for the Chivas Regal brand was followed in June 2009. This strategy: • aligned with the brand image of Chivas Regal • was pertinent to its Hispanic customers • offered a unique framework for Off-Premise retail strategies • provided Chivas Regal with an exclusive and extendable platform of engagement with the Hispanic communityThe company emphasized on a strong sales/retail component tied to the brand’s newfocus on Chivas Regal 18 as its ‘halo product’ (Super Premium @ $60/bottle),integrating paid media, and various yet simple consumer engagement methods: • Retail promotion in key participating Hispanic off-premise accounts displaying POS and Chivas 18 ambassadors’ events • Paid ads and editorial support across targeted print, radio and online channels • Digital Direct Marketing including banner ads, contextual ads, SEM and social media marketing • Coordinated viral support from community-based organizations through flyers, e-Blasts, e-Letters, Facebook, site linksCampaign components drove viewers to: • Retailers participating in the program raising financial contributions to local community-based organizations • EDPL micro-site and Facebook page for engagement opportunities: to Vote for favorite Keys of Success; Become an EDPL Facebook fan; Post comments, questions or success storiesThis resulted in an increase of: Brand impact • Improved opinion of brand = +67% vs. 50% goal. • Improved purchase intent = +32% (see actual sales increase under Sales Impact) vs. 10% goal. • Positive perceptions of EDPL & its support for Latino community = 91% vs. 85% goal. Sales impact • Increase in Chivas Regal® 18 sales of +117% vs. YA (compared to -15% in control group of similar accounts not participating in Promo) • Increase in overall Chivas Regal brand sales of +19% vs. YA (compared with -14% in control group)
Online results Goals Final Final % Increase FY 09 vs. Totals for Microsite & 08 FY 2009 FY 2009 FY 2008 FacebookTotal Visitors 6,000 13,972 3,387 313%Total Page Views 10,000 19,659 9,908 98%Total Engagement (votes, FB 1,966 2,240 983 128%fans) Target reach: • Bilingual = 91% vs. 67% goal. • Equally Bicultural = 54% vs. 40% goal. • 30-49 year olds = 72% vs. 51% goal.• In December 2009, Chivas Regal sponsored The Yearbook series on BBC World News. The Yearbook series follows the stories of six real life school friends from Singapore, whose lives have taken different and interesting routes since they left school. Each 1 minute vignette takes up the story of a different individual, while showing how the friends have maintained their relationships together since they graduated.Chivas Regal is to sponsor the series and will also be taking a supporting advertising campaign online on bbc.com from January 2010. TheYearbook vignettes will run in BBC World News Asia Pacific feed until the end of March. Advertising for the brand will also appear on BBC Knowledge.• In Feb 2010, Chivas Regal injected glamour into Cannes Film Festival Promotion:To celebrate becoming an official partner of Festival de Cannes 2010, Chivas Regal launched a competition offering travel retail customers the chance to win a VIP trip to the film festival in May. Through this activity, Pernod Ricard Travel Retail aims to further boost Chivas Regal 25yo by communicating a strong brand message of “exuberant luxury” through its association with the famed film event. The promotion aims to maintain Chivas Regal’s current positioning in the super-premium category and raise brand visibility, while encouraging trade-up and augmented sales for the Chivas Regal 12, 18 and 25yo references.
INNOVATIVE PROMOTIONAL STRATEGY• After the Chivas Regal Brand had been sold to Pernod Ricard,the French the sale of Chivas Regal dropped down due to cultural insensitivities.So the prime strategy must be to lay stress on the fact the Chivas Regal is manufactured in US.Therefore, a tagline keeping this point in mind must be created for promoting the same.The tagline that can be used for promotion can be “Chivas feast-a true US lineage.”• The second strategy that can be adopted is the discount scheme offered by the company “Buy Two Get One Free”.This will encourage the consumers to consume it and hence result in the increase of sales. The company can arrange for a system and coordinate with the restaurant and bar owners where it is being supplied to become aware of the consumers of the brand.For this,the restaurant owners can go for those consumers asking their details(name,age,profession,email id)and provide the company with the same details.Now, the management can communicate with the customers through direct mails especially intimating them with the Easter Direct Mail Pack,Winter DM Pack,Father’s Day email and many more special occasions.This is basically building brand through Relationship marketing using digital media.• Keeping in mind the current scenario,the best strategy that Chivas Regal can opt for is the social networking sites like Facebook,Orkut,Twitter.The company can go for communities on these social sites and blogs where it can post the upcoming events if any and seek for the visitor’s experiences and comments.Through these social sites the company can track the consumers of this brand and target increased sales by building brand through relationship marketing using digital media.