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A Tale of Two Spirits: Entrepreneurial
Marketing at 42Below Vodka and
Penderyn Whisky
Sussie C. Morrish
a
& Jonathan H. Deacon
b
a
Senior Lecturer, Department of Management, University of
Canterbury, Canterbury
b
Reader, Newport Business School, University of Wales, Wales
Published online: 19 Dec 2012.
To cite this article: Sussie C. Morrish & Jonathan H. Deacon (2011) A Tale of Two Spirits:
Entrepreneurial Marketing at 42Below Vodka and Penderyn Whisky, Journal of Small Business &
Entrepreneurship, 24:1, 113-124, DOI: 10.1080/ 08276331.2011.10593529
To link to this article: http:/ / dx.doi.org/ 10.1080/ 08276331.2011.10593529
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3. Journal of Small Business and Entrepreneurship 24.1: pp. 113–124 113
A Tale of Two Spirits: Entrepreneurial Marketing at
42Below Vodka and Penderyn Whisky
Sussie C. Morrish, Senior Lecturer, Department of Management, University of
Canterbury
Jonathan H. Deacon, Reader, Newport Business School, University of Wales
ABSTRACT. Entrepreneurial marketing (EM) has gained popularity in the entrepreneurship and marketing dis-
ciplines recently. The success of ventures pursuing non-traditional marketing approaches can be attributed to
entrepreneurial marketing practices. Despite the multitude of marketing concepts and models, there are notable
successes that diverge from these and are labeled “entrepreneurial.” The purpose of this paper is to explore en-
trepreneurial marketing approaches used by companies and their impact on the success of marketing activities.
We use the seven core dimensions of entrepreneurial marketing developed by Morris, Schindehutte, and LaForge
(2002) and apply these to two cases: 42Below Vodka and Penderyn Whisky.
RéSUMé. La popularité du marketing entrepreneurial a augmenté au cours des dernières années dans les disci-
plines de l’entrepreneuriat et le marketing. La réussite d’entreprises qui préconisent des approches de marketing
non traditionnelles peut être attribuée à des pratiques de marketing entrepreneurial. Malgré le grand nombre de
concepts et de modèles de marketing, des réussites notoires qui divergent de ceux-ci sont identiiées comme étant
« entrepreneuriales ». Cet article a pour but d’examiner les approches de marketing entrepreneurial utilisées par
les entreprises et leur impact sur la réussite des activités de marketing. Aux ins de cette étude, les auteurs ont uti-
lisé les sept paramètres principaux du marketing entrepreneurial développés par Morris, Schindehutte et LaForge
(2002) et les appliquent à deux cas : 42Below Vodka et Penderyn Whisky.
Introduction
The purpose of this paper is to explore entrepreneurial marketing (EM) and present evi-
dence of how irms can and do market successfully by employing entrepreneurial thinking.
We do so by investigating two spirit companies operating in a mature industry and domi-
nated by large global players. We argue that irms with an entrepreneurial mindset are able
to successfully operate in a competitive marketplace by being innovative.
While many marketing successes are analysed in hindsight using traditional market-
ing concepts and strategies, there are some that challenge standard marketing textbook
recommendations. Marketing strategy is often viewed as a linear management process; the
reality, however, is that a number of businesses pursue alternative approaches to market
development, often categorised as EM.
EM has gained popularity in both the entrepreneurship and marketing domains in re-
cent times, and the success of ventures that have pursued non-traditional marketing ap-
proaches may be attributed to EM practices. Despite the multitude of marketing concepts
and models, there are prominent venture successes that do not conform to these and have
thus been put in the “entrepreneurial” box. The “Virgin” business model is a case in point.
Branson has shown that not “sticking to the knitting” can be a successful strategy. Conse-
quently, an entrepreneurial orientation may be regarded a desirable business philosophy,
examples of which can be found across traditional industries that have adopted innovative
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4. 114 MORRISH and DEACON
segmentation and distribution models (e.g. airlines, information technology, fashion and
automotive industries).
Entrepreneurial irms that explore new ways of doing business may be responding to
challenges in the marketplace. Miles and Arnold (1991) found that entrepreneurial orien-
tation is positively correlated to marketing orientation and propose that entrepreneurial
orientation is a strategic response by irms to turbulence in the environment.
There are other schools of thought and business models that assist in explaining differ-
ences in orientation, such as branding (Keller, 2001), service-dominant logic (Vargo and
Lusch, 2004) and effectuation logic (Sarasvathy, 2001). This illustrates that scholars are
looking to cognate ields to explain a phenomenon beyond long-held traditional manage-
ment science models. Supporting this trend is a growing number of researchers working in
and around the entrepreneurship and marketing interface (see e.g. the Journal of Research
in Marketing and Entrepreneurship, 1999 to date; the proceedings of the University of
Illinois at Chicago, Research Symposium: Marketing at the Entrepreneurship Interface,
1987 to date; and the proceedings of the Marketing and Entrepreneurship Special Interest
Group of the Academy of Marketing, 2004 to date). There is now a maturing body of work
dedicated to this interface, hence the development of EM that is viewed as a complement
or alternative to traditional marketing management approaches. Having started as a special
interest research group, EM is now gaining recognition in mainstream entrepreneurship
and marketing literature. The popular press and contemporary business publications, how-
ever, have recognised EM much earlier and many entrepreneurial success stories have been
popularised through this medium.
Background Literature
What is Entrepreneurial Marketing?
Originating from two distinct disciplines, marketing and entrepreneurship, EM has evolved
as an amalgamation of two discrete management areas to capture facets of marketing that
are not often explained by existing traditional marketing concepts and theories. An early
conceptualisation of EM suggested that entrepreneurs undertake marketing in unconven-
tional ways. Stokes (2000: 47) suggests they do so by tending “to focus irst on innovations,
and only second on customer needs. They target customers through a bottom-up process
of elimination, rather than deliberate segmentation, targeting and positioning strategies.
They rely on interactive marketing methods communicated through word-of-mouth, rather
than a more conventional marketing mix. They monitor the marketplace through informal
networks, rather than formalised market research.” This conceptualisation further suggests
that EM is driven by a central individual—often the entrepreneur—with the passion and
vision for the product. Morris, Schindehutte and LaForge (2002: 5) went on to deine EM
as the “proactive identiication and exploitation of opportunities for acquiring and retaining
proitable customers through innovative approaches to risk management, resource leverag-
ing and value creation.”
The above deinition thus implies that critical aspects of marketing and entrepreneur-
ship can be synthesized into a comprehensive conceptualisation where marketing becomes
a process that irms can use to act entrepreneurially (Morris, Schindehutte and LaForge,
2002). Examples of these conceptualisations are relected in alternative perspectives, such
as guerrilla marketing, radical marketing, expeditionary marketing, disruptive marketing,
etc. Morris, Schindehutte and LaForge (2002) identiied seven core EM dimensions (see
“Dimensions” section) that build upon Stokes’ (2000) observations and propose that EM
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5. ENTREPRENEURIAL MARKETING AT 42BELOW VODKAAND PENDERYN WHISKY 115
represents a different approach to envisioning business and its relationship with the mar-
ketplace.
There is empirical evidence suggesting that a signiicant relationship exists between
a irm’s marketing and entrepreneurial orientations (Miles and Arnold, 1991), both being
widely regarded as essential for corporate success. In addition, there is a growing cannon
of academic work on EM, some of which focuses on the role of marketing in small and
medium enterprises (Carson and Gilmore, 2000; Bjerke and Hultman, 2002; Grunhagen
and Mishra, 2008) and large irms (Miles and Darroch, 2006).
SME Marketing
The foundations of entrepreneurial marketing are to some extent grounded within the SME
(small and medium enterprise) sector. Indeed, there is a strong argument within the litera-
ture that EM is really about the “small” in SME marketing. Within the generic marketing
management literature is also a stream of thought that suggests EM is somewhat like “text-
book” marketing, but undertaken either with some lair or just simply doing something
completely different across all aspects of the normative marketing mix (Earls, 2002; Chas-
ton, 2000). Some argue that this approach is possibly what marketers should be doing any-
way (see Brown, 2001). Being entrepreneurial, however, is not a necessary prerequisite, as
not all small irms are entrepreneurial (Bjerke and Hultman, 2002). However, small irms
will need entrepreneurship in order to grow, and such growth can be leveraged from the
small irm’s advantage in marketing. Bjerke and Hultman (2002) propose that in an era of
dramatic social and technological change, one approach for irms to establish and sustain
a long-term customer relationship is through EM facilitated by a four-pillar framework
comprising of entrepreneurship, resources, processes, and actors (entrepreneur, coordinat-
ing irm, and network).
Marketing is a challenging process for any organisation, an approach that works for one
irm may not easily be replicated for another, due to context. Carson and Gilmore (2000)
were at the forefront of acknowledging that SMEs conduct a different type of marketing
to that of the large irm, with Brownlie and Saren (1997) further suggesting that perhaps
this type of marketing activity is in advance of contemporary theoretical, pedagogical and
conceptual underpinning. Others further suggest that EM represents marketing in its purest
form (Deacon and Corp, 2004).
EM, therefore, must be viewed as contextual given the emphasis on the “individuality”
of marketing. Deacon (2002) observes that the “personality” of the irm and any subsequent
marketing activity is inevitably connected to the personality of the owner/manager.
Entrepreneurial and Marketing Orientation
There are several studies that have investigated the relationship between entrepreneurial
and marketing orientation with emphasis on the similarities and differences between the
two. Morris and Paul (1987) highlighted the inherent similarity between marketing and
entrepreneurship, and hypothesised that more entrepreneurial irms would also be more
likely to have a strong marketing orientation. Market-oriented irms and/or managers also
need to be entrepreneurial if they are to seize opportunities.
The two orientations can, however, be distinguished from each other. Essentially, mar-
keting orientation can exist independently and does not always need aspects of entrepre-
neurial orientation, such as the tendency to be innovative, accept risks and act in a proac-
tive manner. Miles and Arnold (1991) propose that an entrepreneurial orientation can be
developed depending on the dynamics of the environment.
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6. 116 MORRISH and DEACON
It has been argued elsewhere that market-oriented irms become too customer-focused
at the expense of innovation. To counter this, Hamel and Prahalad (1994: 83) suggest that an
entrepreneurial approach to marketing has emerged as a mechanism to mediate the tyranny
of the served market. By having an entrepreneurial approach, the irm is able to engage in
market-driving behaviour (Schindehutte, Morris and Kocak, 2008). Schindehutte, Morris
and Kocak (2008) argue that this behaviour is distinct from a irm’s market orientation, and
is the essence of entrepreneurial action in the Schumpeterian “creative destruction” sense.
This scenario can be viewed as a way of manifesting entrepreneurial orientation.
Additionally, Schindehutte, Morris and Kocak (2008) contend that the irm’s
entrepreneurial orientation interacts with other strategic orientations and, in the process,
determine how they are manifested, if at all. For example, strategic behaviours are the driv-
strategic behaviours are the driv-
ers of growth and/or expansion of products and technologies fuelled by environmental con-
ditions (Moreno and Casillas, 2008). Rapid irm growth can occur when the condition is
highly dynamic, not very hostile, and resources are available; however, there is overwhelm-
ing evidence that entrepreneurial orientation plays a critical role in determining transitions
among various strategic orientations over time (Schindehutte, Morris and Kocak, 2008).
Dimensions of Entrepreneurial Marketing
Extant literature indicates that EM is generally applied at the SME level. The application
of entrepreneurship in a marketing context is well argued, but the reverse also needs be
considered. Marketing covers a huge domain, whether as a discipline, concept, activity,
process or any other manifestation of description (Carson, Gilmore and Grant, 2001). It
therefore makes sense that marketing should be observed, not from a single perspective,
but from several—academic, practitioner and researcher—relecting the evolution of the
discipline to suit speciic practice requirements (Carson, et al. 2001). Given this contention,
EM should not be limited to SMEs. For example, Miles and Darroch (2006) found that EM
processes could be used strategically to foster entrepreneurship within marketing proc-
esses, building and renewing competitive advantage in large irms.
The question then is: What constitutes EM? A suitable way to view it is through the
seven core dimensions that Morris, Schindehutte and LaForge (2002) proposed: oppor-
tunity-driven, pro-activeness, innovation-focused, customer intensity, risk management,
resource leveraging, and value creation. Hills, Hultman and Miles (2008) concur that these
dimensions distinguish entrepreneurial from administrative marketing. In their study of
59 Swedish and US irms, they found that irms with EM orientation exhibit a different
strategic orientation, commitment to opportunities, opportunity recognition mechanisms,
control of resources, and management structure. In presenting EM as an interface con-
struct, the authors of this paper agree with Hills and LaForge (1992) that entrepreneurship
researchers can beneit from more sophisticated marketing concepts and methods, and that
much value can be derived from looking to the marketing discipline in informing entrepre-
neurship research.
Methodology
In order to investigate EM, we take a qualitative approach and employ two cases. The use
of cases is a recommended method for researching EM, and the use of two cases has its
precedent in Mankelow and Merrilees (2001). Schindehutte, Morris and Kocak (2008) also
employed two case studies to illustrate how trajectories can be identiied in the dominant
strategic orientations within companies as they evolve.
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7. ENTREPRENEURIAL MARKETING AT 42BELOW VODKAAND PENDERYN WHISKY 117
The two cases in this study are 42Below, vodka producers from New Zealand, and
Penderyn Distillery, whisky distillers from Wales. The cases were chosen based on their
characteristics. Both companies originate from small economies, make products (spirits)
from locations that are not traditionally associated with this type of product and are of
similar age. The cases were investigated using a combination of site visits, interviews and
desktop research.
In this study, we used the Morris, Schindehutte and LaForge (2002) model of EM and
apply a qualitative lens on the approaches of both companies. Partly based on Covin and
Slevin (1989), the EM model was also followed by Miles and Darroch (2006) when con-
sidering EM processes in large companies. We explored the strategies of both companies
based on the seven core EM elements. In analyzing the cases, we speciically looked for
evidence that related to the core dimensions and used these to structure the indings. We
start with case histories for both companies followed by a discussion section.
Case 1: 42Below
Background. 42Below was founded by Wellington-based entrepreneur and ex-Saatchi and
Saatchi marketing executive, Geoff Ross, in 1999. Hailed by many observers as a unique
marketing success, 42Below is New Zealand’s irst premium vodka. Like many start-ups,
42Below was inanced from Ross’ personal sources. In the early days, Ross distilled at
home using a home brewing kit. In 2003, the company was loated to raise capital for
growth and expansion into international markets. Despite criticism that the company was
too young, too small, and too soon to loat, the IPO raised NZ$15 million, with Ross re-
taining 26% of the company. Three years later, they were producing 7000 cases a week
and selling to 25 countries. By the end of 2006, the company was sold to Bacardi Ltd. for
NZ$138 million (Morrish, 2009). 42Below’s claim to fame is grounded in the quality of
its ingredients. Described as “New Zealand in a bottle,” 42Below has unashamedly associ-
ated itself with all the attributes of the country. It uses water sourced from the crystal clear
spring lowing through the 42-degree latitude that holds the international benchmark for
water and air purity. The alcohol content is set at 42%, much higher than average, to signal
higher quality and greater purity. 42Below’s limpidness is the result of a sophisticated
six-week-long distillation process with multiple iltrations that apparently creates a more
viscous character on the palate. Three years after it was loated, 42Below expanded its
product portfolio to include the award-winning “South Gin,” the company’s spring water
“420” and two types of rum: “Seven Tiki” and “Tahiti Dark Rum.” Best means not only
sourcing the best possible ingredients and processing, but also inding the perfect packag-
ing that symbolises 42Below attributes.
Entrepreneurial Marketing Activities. Although vodka is not widely consumed in
New Zealand, vodka-based cocktails are popular in the US and parts of Europe. Respond-
ing to global trends towards lavoured spirits, 42Below introduced unique New Zealand
lavours such as Kiwifruit, Passionfruit, Feijoa and Manuka Honey. Their creativity was
not limited to the product. This extended to the way they promoted 42Below, quite unlike
the mass advertising that is often used by their competitors. Their use of viral marketing
was hugely successful. More interesting is the way they have tackled many issues, such
as being gay or national identities (German, French, English), in a cheeky and irreverent
way and without regard about being politically correct. Ross’ extensive advertising back-
ground was complemented by his network of shareholders, who held a collective exper-
tise in advertising, fashion and media. 42Below does not conform to usual company staff
titles. For example, Ross is called the Chief Vodka Bloke and they have Vodka Professors
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8. 118 MORRISH and DEACON
that teach bartenders at their Vodka University, while Brand Agents wear “42Below Job”
t-shirts.
42Below targets what they call the “elite of the cocktail set,” a segment with high dis-
posable income. This segment wants to be unique, entertained and provoked. As such, they
are likely to respond to individuality, cheek and irreverence. Individuals belonging to this
segment respond to brands they and their social circles discover, not those endorsed by the
mass media. When it comes to cocktails, this group relies on word-of-mouth recommen-
dations from friends and bartenders. Realising that the cocktail set naturally converged in
bars, Ross saw bar staff as the way to reach their target consumers. As this segment rejects
mass advertising, 42Below relies on web technology and interpersonal communication for
their promotion strategies.
Ross believed truly successful brands evoke fresh stories and exotic experiences of
people and places. Needless to say, its country of origin being clean, green, pure and cre-
ative became a source of competitive advantage for 42Below. It was for this reason that
42Below launched the Annual International Cocktail World Cup where the most inluential
people behind the best bars of the world are lown to Queenstown for a truly unique New
Zealand experience. In this event, 42 top bartenders from around the world mix vodka
cocktails while doing extraordinary adventures, such as jumping off a helicopter, bungy
jumping, or on bars on top of snow-peaked mountains. This event attracts extensive world-
wide television coverage.
42Below aims to be the most desired and talked about vodka in the world and sets its
own standard. They sell stories designed to evoke a different reaction from every customer
and many customers post their stories on blogs, including Saatchi and Saatchi’s Lovemarks
page.
Conclusion. 42Below’s marketing strategy approach deviates from traditional market-
ing practices. They exploited international opportunities long before they were established
domestically. This approach usually requires the use of networks to penetrate various niche
markets and advocates the use of personal experience as ways of minimising risk and
uncertainty (Chetty and Campbell-Hunt, 2004). Ross used his networks of creative people
to design and develop 42Below products and marketing tactics speciically for their niche
market. He also called on his personal experience, both from his advertising career and by
visiting the bars where 42Below’s target customers are frequently found.
This approach precludes entry to new markets for the sake of territorial expansion.
Each market is carefully chosen and entered only where there is scope for the brand to
become meaningful. Their entry into new territories has consistently relied on positioning
as a premium brand using premium price points and highly selective distribution channels.
42Below’s pricing strategy is consistent with that positioning. In the US, it sells at about
$30 per bottle.
42Below irst expanded to the Australian market followed closely by the UK and the
US. The perceived similarities of these markets meant that 42Below was able to use the
same form of viral marketing across the three markets. They entered the Italian, German
and French markets after winning two premium awards in Brussels and Paris. All the bars
they supply in these countries powerfully endorse their products. 42Below consistently
win taste tests around the world. They have won multiple awards, including the 2004 Gold
Medal at the Brussels Monde World Selection for 42 Below Pure Vodka. It also won gold
for 42 Below Manuka Honey Vodka at the Salon Internationale Award in Paris. In 2006,
they had a grand slam of gold medals at all major spirit awards, a testimony to their superi-
or positioning and unique understanding of opportunities that they so vigorously pursued.
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9. ENTREPRENEURIAL MARKETING AT 42BELOW VODKAAND PENDERYN WHISKY 119
When Bacardi announced its 2006 takeover offer, 42Below had just posted a total of
$7.2 million in revenue. Over the previous 12 months it achieved a 32% increase in rev-
enue and the cash low from operating activities showed a 71% improvement. The number
of cases sold also increased by 60.6% from the previous year. They have re-invested proits
into company expansion, especially in the very competitive US market, thus reporting a
half-yearly loss of $2.7 million. This is a signiicant drop from its reported loss the previous
year of $5.10 million. 42Below was judged the fastest growing exporter, fastest growing
listed company, and fastest growing company overall by Deloitte.
Case 2: Penderyn Whisky
Background. Wales is not a nation renowned for the production of whisky—a product
mostly associated with Scotland and Ireland. Penderyn Distillery (formerly known as the
Welsh Whisky Company) is located in the Brecon Beacons National Park in Mid Wales
and claims to be the only distillery in Wales. It was founded in 1998 with an original capital
investment of £130,000. The original shareholders were motivated by the desire to produce
a quality “world class” product and an unashamed “nationalism,” as opposed to seeking a
large return on investment. As is the case with many such start-up irms, the investor group
had known each other socially prior to investment.
However, by 2000, it was clear that the initial capital investment was inadequate for
sustainable and viable whisky production. The business of whisky production is “cash
hungry” due to the lengthy maturation process demanded in the production of a compet-
itive—in terms of quality and lavour—product. The irst bottle of Penderyn single malt
Welsh whisky was sold at a PR launch on March 1, 2004, after a ive-year “laying up” of
the distilled output. A further complexity of the business model comes from the realisation
that, of the original distillation, only a proportion will be made available at ive years—the
remainder being matured for a further 10, 15 and 20 years before release for sale.
Entrepreneurial Marketing Activities. An informal company culture clearly has an
impact on the approach to market development, where small is beautiful and unquestion-
ably exclusive. The view of Stephen Davies, MD, of Penderyn is that, “it is ine for global
brands who need to deliver many millions of cases of spirit consistently and with little
or no variance, to use computers or prescribed systems to decide when to bottle. We will
continue to leave it to our Master Distiller, Jim Swan, to decide when our whisky is at its
best.”
Instead of pursuing volume production, the company focuses on producing different
“expressions” of its whisky and limited “discovered” editions—such as the Grand Slam
2005 and 2008, and the Penderyn Welsh Rugby Union 125th Anniversary Edition—that
command a high price amongst whisky connoisseurs and members of the 200 club, an
exclusive connoisseurs members group facilitated by the company.
To enable the irm to fully explain the uniqueness of the product, a visitors’ centre was
opened at the distillery in 2008. This facility attracts between 20,000 and 25,000 visitors
per year, and aims to convert visitors to becoming both members of the Penderyn commu-
nity and advocates of the brand. Within the centre, the company manages to successfully
marry respect for tradition with passion for innovation and a non-conformist approach to
market development.
The distillation process of Penderyn’s malted barley spirit is unique and was designed
by Dr. David Faraday (a descendant of Sir Michael Faraday). Unlike Scottish and Irish
stills, which use either a two- or three-pot system, the barley is stilled in a single copper pot
system. This method of distillation originates from technology used in the oil reining in-
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10. 120 MORRISH and DEACON
dustry. The spirit is said to arrive at an industry high of 92% ABV (alcohol by volume) and
is virtually free of chemical compounds. Following distillation, the whisky is irst matured
in bourbon casks, sourced from Kentucky and Tennessee, and then inished in Madeira
barriques (a form of barrel) from Portugal.
Owing to strict legislation, which inhibits direct sales of alcohol via the Internet, Pen-
deryn limits sales through formal distribution channels. Given that the company only pro-
duces one cask per day, the company employs a strict allocation procedure serving the
home market irst—and, in particular, the members of the 200 club—before supplying
export markets, even though export markets are often more lucrative. Nevertheless, this
limited allocation appears to strengthen the brand image and creates a further perception
of exclusivity.
Four years after producing the irst bottle, the brand is now available in 16 countries
(including 28 American states). The company believes such expansion has been leveraged
on the authenticity and heritage of the brand, building up a “tribal-like” following amongst
emotive driven, like-minded customers. The emotive behaviour of the customer base has
led to an acknowledgement by the irm that viral marketing within the home market and
expatriate communities, especially in the US and Australia, has proven more valuable and
effective than traditional marketing campaigns (see Sparkes et al., 2001). However, Pen-
Sparkes et al., 2001). However, Pen-
. However, Pen-
deryn does not drive the viral nature of the communication, but rather facilitates a com-
munity via its social media activity, and believes that this frees up capacity to concentrate
its limited resources on the quality of the product—which, in turn, drives the community,
brand and sales.
Keen to leverage the non-conformist nature of the Welsh psyche, Penderyn experi-
mented with non-traditional and irreverent approaches to promotion—especially viral net-
based executions. The use and enhancement of “community” is evidenced by Penderyn’s
web blog, providing an opportunity for expat customers to be involved with and belong to
the larger Penderyn whisky community, a platform used to launch special edition whiskies
and other “community exclusive” products.
Conclusion. The central feature of Penderyn’s commercial success is prima facie the
“authenticity” of its origination and the evoked “belonging” that this creates in the mind
of the customer—an emotive that is recognised by the irm in its investor relations mate-
rial, which states: “Penderyn is what the marketing people would call a discovered brand,
discovered by the Welsh, who bought the whisky out of pride and passion.”
Penderyn Distillery was born out of a passion for identity, heritage and belonging, and
has created a market for a Welsh whisky where there was a clear lack of evidence that such
a market existed due to the dominance of Irish and Scottish product. Penderyn continues to
develop despite a lack of formal administrative marketing management. As the company
remains in private shareholding, placing an accurate value on Penderyn proves dificult;
however, it has a stock holding in excess of £10M (as of late 2009) and a growing asset
base (circa £5M). The brand value is somewhat comparable with the stock holding value.
Penderyn produces about 350 casks of whisky per year and employs 30 people.
Results and Discussion
A comparison of the two cases reveals some similarities and variances. Both companies
have employed entrepreneurial marketing approaches, but with different intensities. While
acknowledging that they are different from the norm, the speciics of their individual ap-
proaches are somewhat dissimilar. Both companies have positioned their products at the
premium end of their categories and have emphasised quality and “recognition” in their
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11. ENTREPRENEURIAL MARKETING AT 42BELOW VODKAAND PENDERYN WHISKY 121
communication strategies. Overall, it appears that both irms enjoy success, as evidenced
by industry awards and international acclaim. A unique feature of both cases is the “com-
munities of shared interest” they have established and facilitate. Evidence of entrepreneur-
ial marketing from both companies is discussed following the EM elements framework.
Opportunity-driven
Having been established around the same time, both companies seized existing opportuni-
ties (the availability of pure and authentic ingredients) and those emerging in the market
(new customer tribes). They have also exploited national pride and non-conformist culture
amongst their loyal customers. It appears that loyalty organically evolved from those who
were able to identify and make a connection with the country-of-origin of the product and
the symbolism and meaning that these bring. Expatriate customers contribute greatly to the
word-of-mouth/viral effect that saw the products succeed without costly “managed” mar-
keting campaigns. This is highlighted by the “tribal market” concept identiied by Pend-
eryn and the “cocktail elite set” by 42Below.
Pro-activeness
Both companies are pro-active in identifying opportunities for promotion in non-tradi-
tional ways. 42Below opted to be non-politically correct by tackling sensitive issues and
generating publicity and awareness through risqué and witty viral marketing campaigns.
Penderyn seized on the rivalry between the Celtic countries to push for tribal attachment
(e.g. unite behind the common cause) and rally expat communities to support the growth
of the brand.
Innovation-focused
Being in the same industry lends focus to the comparison, especially around innovation. As
premium producers, both companies pursued quality throughout the value chain. 42Below
uses a multi-stage distilling process, whereas Penderyn uses advanced technology to
generate purity. Given the trend towards lavoured spirits, 42Below has been quick to
introduce exotic lavours—such as kiwi fruit, manuka honey, feijoa and passionfruit—
highlighting its contemporary approach to innovation. Penderyn juxtaposes oil-reining
technology with the tradition of using wooden casks, and has evolved limited edition
products to commemorate Welsh sporting success.
Customer Intensity
Both companies have identiied unique market segments and tailored inexpensive—but
extremely effective—ways to reach them. Highly visible endorsements from celebrities
and elite club members (Wales) and the Cocktail World Cup (NZ) are examples. These seg-
ments such as the“cocktail elite” prefer to consume products they discover themselves and,
being media-savvy, reject mass advertising.The result is a highly loyal following (tribe)
of customers not shy to launt their love for the products on the web (e.g. Lovemarks and
web blogs).
Risk Management
Although both companies used bootstrapping techniques at the outset, these were insufi-
cient in their pursuit of growth. Having small domestic economies, the internationalization
route was undertaken selectively where there were pockets of customer segments such as
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12. 122 MORRISH and DEACON
expatriates. Both companies had used their personal and business networks (sometimes
serendipitously) as sources of additional inance, shareholding and creative ideas. 42Below
went public very quickly and realized fast growth, becoming an acquisition target for Bac-
ardi. Penderyn, on the other hand, has remained private—two different ways of inancial
management.
Careful branding strategies were also employed differently. Penderyn created a private
connoisseur brand, while 42Below opted for a fashion brand that proved popular with
bartenders, who they regarded as the gatekeepers. Whether their branding strategies were
intentional or emergent, both have become a “discovered brand” to their many devoted
consumers.
Resource Leveraging
There is overwhelming evidence that both companies have leveraged their access to unique
ingredients (such as purest water, GE free wheat and Madeira casks), technology (e.g.
unique distillation process) and their countries-of-origin (being clean and green) to gain
competitive advantage. It is perhaps the opportunistic nature of this approach that makes it
entrepreneurial. They have found international acclaim for their products over a short peri-
od of time and capitalised on these awards to build on their reputation in the marketplace.
Value Creation
If marketing is about creating value, both cases have demonstrated almost similar ways of
how this is done using the elements of the marketing mix. The combination of very high
qualityproducts(andlowvolumeproductioninthecaseofPenderyn),withpremiumpricing,
distributed selectively (e.g. top bars or through special memberships) to a targeted customer
base and promoted in non-traditional ways (selling meaningful stories) may illustrate some
traditional marketing processes, but the entrepreneurial approach to implementing these
processes distinguishes 42Below and Penderyn from their competitors.
Conclusion, Managerial Implications and Limitations
The aim of this study was to explore evidence of entrepreneurial approaches to marketing
activities by comparing two cases. The investigation, based on an established framework,
found that EM was employed successfully in both cases.
42Below has carved an image of irreverence and being non-conformist. They have
unashamedly utilised viral marketing and entered international markets by training
bartenders and hosting unconventional events. They use edgy language and unashamedly
leveraged their host country resources to promote their lagship product. Penderyn has
taken a more traditional approach to marketing their products by portraying romantic
images of folklore and age-old tradition of distilling as key to their positioning, but also
adding a contemporary twist with innovative technology and developing a “community of
shared interest” around the brand. Both cases illustrate that a non-conformist—and thus
non-managed marketing—approach to marketing suits the entrepreneurial irm within this
type of industry.
While the argument for context is well articulated in this study, it must also be noted
that the cases are industry-speciic and evidence here may not necessarily be generalisable
to other settings. This, however, brings to the fore the need to explore EM in different
contexts, such as across different industry sectors, stages of business maturity, and size of
companies. For example, there is still much that we do not know about EM in larger irms
or smaller SBUs within a large corporate family, such as the one 42Below inds itself in
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13. ENTREPRENEURIAL MARKETING AT 42BELOW VODKAAND PENDERYN WHISKY 123
now that it has become part of a huge global company. With Bacardi Ltd.’s resources, the
question is: Will 42Below remain entrepreneurial and, in the same token, will it still have
the freedom to be so given a different corporate setting? As for Penderyn, being in pri-
vate ownership lends freedom to implementing innovative and entrepreneurial strategies.
However, if Penderyn was acquired by a bigger (non-Welsh) company, would it still be
entrepreneurial or would it fall into a conformist regime?
Finally, we acknowledge that the indings in this study are limited to the context of
smaller irms from small economies; hence, wider applicability may not necessarily follow.
However, this paper does not purport to prescribe how EM should be practiced, rather it
aims to provide EM evidence as practised in the marketplace and stimulate further debate
to better enrich understanding of what is entrepreneurial in marketing.
Acknowledgements
The authors would like to acknowledge the assistance of Louise Worth, PhD research stu-
dent at the Newport Business School, in developing this paper.
Contact
For further information on this article, contact:
Sussie C. Morrish, Department of Management, University Canterbury, Christchurch, New Zealand
Phone: +64 3 3642987 ext. 3547
Fax +64 3 3642020
E:mail: sussie.morrish@canterbury.ac.nz .
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