2. Jose Cuervo Tequila
Jose Cuervo tequila is the world’s oldest tequila brand. In South Africa, it is available in
three varieties namely Gold or Reposado, Silver and Black. Jose Cuervo Black will soon
disappear from South African shores and be replaced by the more premium
Tradiocional. Jose Cuervo is a premium drink enjoyed as a shooter or mixed in a variety
of drinks. With the addition of Jose Cuervo Black, it could also be a sipping drink to be
enjoyed in more subtle settings.
Tequila as a whole is usually enjoyed as a party drink to set the mood or take things to
the next level and Jose Cuervo is no different. Its premium feel makes it popular in more
up market restaurants and clubs but it is common in the lower end setting as well. Due
to it being enjoyed as a shooter, it is relatively affordable and therefore appeals to all
kinds of consumers and those who cannot with stand its strong taste can have it mixed
into cocktails for easy enjoyment. The youth market is its main target market but Cuervo
is enjoyed and loved by all ages and seeing as it is the world’s number one tequila, it is
clearly doing something right.
Competitive Set
In the South African market, Cuervo has a main competitor in the form of Olmeca
tequila and an unorthodox competitor in the shape of Jagermeister. For the sake of the
research I also added Patron. Although it is a more premium offering than Jose Cuervo
and the others, it tends muscle in on their sales due to people’s perceptions of it and I
thought it would be interesting to see how.
1. Olmeca Tequila
The primary competitor to Jose Cuervo.Competition between these brands is fierce in
the on and off-con markets with “pouring rights” hotly contested in the top venues
throughout the country.
Variants: Silver (Blanco) –distilled in copper pot stills
Gold –blend of young and aged tequilas, aged in white American
oak barrels.
Competitive edge: Tahona Society Bartending Competition.
Mixes: As a cold straight shot with salt and a lemon slice, Olmeca
Margarita, Tequila Sunrise
3. Current Marketing Activities:
Switch on the night events and online magazine. Olmeca presents
a series of parties featuring various international Dj’s, with the
theme “switch on the night”. They have a website that at first was
used to promote their party events but recently became an online
magazine which gives insights into the party scene both locally and
abroad.
2. Jagermeister
A unique competitor as it is a “Herbal Liqueur” and not a tequila. Made with 56 herbs
and spices, Jagermeister has become a very popular drink due to the clever way it has
marketed and positioned itself in the South African market with its tag line of “ice cold
shots”. Also made more popular by the various myths which exist about it such as
“Jagermeister contains deer and Elk Blood”. Although most of them are untrue, the
company does not go out of their way to disprove them as they add to the aura of the
brand.
Variants: Jagermeister original (35% ABV) –matured in barrels for a year.
Jagermeister Spiced (
Competitive Edge: Myths surrounding the brand. The belief that it must be consumed
ice cold or that there elk blood used in the making of the product.
Mixes: The JagerBomb. A Shot of Jagermeister dropped into a glass of
popular energy drinks. (Usually Redbull)
Current Marketing Activities: Jagermeister currently have a television advertisement
which ends off with the “ice cold shots” tagline. This has come to
represent the way in which it is enjoyed.
3. Patron Tequila
A premium brand made popular by its association with the Hip-Hop culture in the USA.
Has a sense of rarity to it as most of its offerings are made in small batches with
numbered bottles. Instantly identified by the shape of its bottle, which is common in
music videos and by its ‘cork’ top.
Variants: Silver, Reposado (Gold) and Anejo.
XO Café (silver tequila with pure natural essence of fine coffee)
4. Research Methodology
Sample Size
My minimum sample size will be 50 people with a maximum of 60 people. I believe this
will give me a decent sample and because I will be taking my sample from a mixed
group of ages, ethnicities, backgrounds and current statuses, it will be a good
representation of the population.
Demographics
A 50-50 split between males and females. Males generally tend to do the purchasing of
alcohol in this age group (18-25) but females have a very big say in what is purchased,
especially where Tequila is concerned. At least 25% of the sample will be employed
individuals, preferably those who have just entered the work market. This will provide
clarity on whether there is a change in the awareness of brands once one can afford to
spend more money on what they drink. 75% of the sample will be students as the whole
point of the research is the awareness of my chosen brand on the student population.
Data Collection Method
This is a topic in which there is not a lot of secondary data that applies to our local
market. Therefore a questionnaire is necessary to collect primary data which will be a
big basis of the investigation. Also, face to face focus groups during Jose Cuervo
promotions will add much valued insight into the thought process when ordering drinks.
I will also use my mentor as a source of information. Her knowledge will be vital in terms
of the current and previous marketing strategies of the Jose Cuervo brand. The internet
will also be used as it provides insight into Jose Cuervo campaigns running throughout
the world and some of that information could be useful in solving potential problems
encountered with the brand here in South Africa.
5. Focus Group Findings
During a few Jose Cuervo promotions, I took the liberty of asking some customers
about their thoughts on the brand. This was with the aim of discovering how the
decision to drink tequila is made and why it is made. They were also questioned on
brand knowledge with the goal of gathering information to assist in setting up a
questionnaire that would become a good measure of brand awareness. During the
promotions I would engage into conversation with those who had purchased Jose
Cuervo. From the various conversations, certain things became clear.
Tequila is usually drunk as a starter on nights where they go clubbing.
Tequila is rarely bought in a full bottle but rather as a shooter at the venue, either
restaurant or club.
Tequila is preferred because of its strong alcohol percentage and is seen as ideal
for gatherings on week days as it “sets the mood” quickly and on weekends while
out clubbing because it “keeps the mood going”.
Olmeca and Jose Cuervo are the most known tequilas.
Jagermeister and Patron are rarely seen as competitors for Jose Cuervo and
Olmeca as they do not match the usual look of tequila.
Brand knowledge with regards to tequila seems to be lacking where black people
are concerned. A lot of them had only become aware of tequila brand names
later in their university lives or when they became employed at started
frequenting status bars. A select few who attended upper class high schools and
private schools became aware of it from an earlier stage due to the influences
which exist in that environment. This tells me that financial background plays a
role in how quickly members of this population become aware of tequila and its
brands.
These focus groups gave a good insight into tequila and the thinking of members the
population for this research. Focus groups are notoriously unreliable as some members
don’t get to express themselves and the stronger personalities tend to dominate the
conversation. They do provide direction though in terms of setting up a primary data
collection method. I chose a questionnaire as it would allow for the most information to
be collected and would be private and anonymous enough to allow each respondent to
express themselves.
6. Questionnaire results
A total of 57 questionnaires where completed and of those only 50 where considered as
the other 7 where declared void due to the screening question. Of the 50 valid
questionnaires, 20 where filled by members of the population who are no longer
students and have been employed for not longer than 18months. This was to get a view
of what it is that changes after they leave the student lifestyle and gain access to more
funds. Here where the results:
Awareness of the brand in comparison to its competitive set
The respondents were questioned of their awareness of Cuervo and its immediate
competitive set (Olmeca, Jagermeister and Patron). Of the 50 respondents, the mixed
responses were as follows:
29/50 or 56% are aware of Jose Cuervo. 34/50 or 68 are aware of Olmeca.
45/50 or 90% are aware of Jagermeister. 35/50 or 70% are aware of Patron.
Cuervo and Olmeca do not currently advertise on television and are rarely in
mainstream media. For this reason very few people between the ages of 18 and 25
come into contact with the brands through the usual media sources. This is the reason
for the low numbers of people who are aware of Cuervo and Olmeca respectively.
Jagermeister on the other hand occasionally runs television advertisements and their
‘Stag antlers’ logo is easily identifiable along with the ever popular ‘Jagerbomb’ drink
which is popular in many outlets. A lot of the respondents were unaware that
Jagermeister is flavored tequila. Patron is popular because of its association with the
hip hop culture. Ironically, more people are aware of Patron than the other brands but
have not tried it because it costs significantly more than the others. Many people only
know the chocolate infused Patron offering and because of this did not regard it as
tequila either.
Perception of the brand in comparison to its competitive set
The majority of respondents were in agreement about on this topic. Jose Cuervo and its
competitors are seen as lively party brands which are consumed primarily in party
situations and to get “in the mood” for a good time. The majority of the respondents who
knew the brands agreed that Jose Cuervo and Olmeca are for everyone who intends to
party hard, regardless of their social standing. Patron on the other hand is seen as more
exclusive and premium so would be for those who can afford it. While Cuervo and
Olmeca are seen as out and out tequilas, Patron is still considered a liqueur, with one
respondent from the focus describing it as being “like Amarula but with a higher alcohol
percentage and enjoyed in shots rather than with ice cream”.
7. The interesting comparison came between Cuervo and Jagermeister. Respondents
where very confused about how to place Jagermeister and some argued that it wasn’t a
direct competitor to traditional tequilas. This is mainly because of its flavored nature and
that is never presented as tequila in any of its marketing activities.
Reasons for differences in awareness and perception
The majority of the respondents agreed that tequila is not a sipping drink and as such a
lot of them have never bought a full bottle, choosing instead to purchase it in shots at
the venue. This applies across the competitive set. Once the brands are looked at
individually, differences start to show up.
I performed a short experiment with 8 random people of mixed race and
background at Dros in Auckland Park. Four of the respondents were given a shot
of Olmeca Reposado and the other four given a shot of Jose Cuervo Reposado.
Jose Cuervo and Olmeca are seldom ordered by name and once they have been
consumed the respondents did not know which of the two they had consumed.
They didn’t seem to be bothered though because they had very little brand
knowledge and because they do not often come into contact with advertising of
the two brands anywhere besides venues like clubs and restaurants. Cuervo’s
signature “Cuervolucion parties” are a big part of Cuervo’s image yet the
message does not seem to be filtering through to the 18-25 year old main
market. Of the 50 respondents who filled out questionnaires, 12/50 (24%) had
heard of them and of that number only 4/50(8%) had been to one of the events.
Jagermeister and Patron on the other hand are ordered by name. This is mainly
because of the way they have managed to differentiate themselves from regular
tequila. The color and taste of the two brands means they are easily identifiable.
Jagermeister frequently flights ads on television and the fame of the ‘Jagerbomb’
adds to its awareness in the market. The green bottle and black liquid inside are
a unique character of the brand and serve as a point of reference when people
think of the brand. Patron has a cult following in the new age hip-hop industry
and its popularity is maintained by this. It is also a more premium drink than the
rest and this point is not lost on the 18-25 year old main market. Patron becomes
the drink of those who can afford to purchase it.
8. Marketing plan
Having spoken to members of the target population and after analyzing the results of
the questionnaire, two points became clear with regard to awareness.
1. Upon entering their late teens and early twenties, these members are unaware of
the brand. This is because the brand doesn’t necessarily advertise in platforms
that they have access to like television and mainstream magazines and
newspapers. This is such a crucial moment in terms of building brand presence
and potentially brand loyalty among this group so a strategy to impact them at
this stage is important. Equally as important, is building the right image. Students
at this age group are notorious for abusing alcohol and considering the alcohol
strength of this product it would be important to build the correct brand image so
as to not be seen in a bad light.
2. Members of this group are aware of tequila as a category but very few of them
order their tequila shots by name. The older members of this group know of the
brand but also say that they do not normally ask for tequila by name. They would
ask for it by name when they are presented with reminders such as visible
promotions and branding.
Jose Cuervo is a brand that is most effective when it is visible. It exists in a market
where there is no visible domination by any of the competitor brands and as such has
the opportunity to make an impression the members of the population without much
resistance. In a world where there are so many substitutes and competition among
competitors, it has become even more important to have presence and constantly
remind the consumer of your brand. To achieve this with Jose Cuervo, here is what I
propose.
1. Unleash the Luchador (R80 000)
Students generally like unusual and “cool” things and Jose Cuervo doesn’t have to look
far to find their own “cool” appeal. The luchador mask which has become a symbol of
the “Cuervolucion” movement since it was launched in South Africa in 2014 should
become a symbol of the brand with the younger student population too.
Firstly the image of the Luchador should become synonymous with the Cuervo brand by
being on every piece of branding and merchandise. This will make the brand identifiable
while adding a modern and ‘cool’ feel to it as well.
Within the on-trade market this should be taken a step further by bringing the Luchador
to life. One of the male promoters could wear a Luchador mask at the promos. This,
accompanied by promo girls in the usual Jose Cuervo attire would symbolize that Jose
Cuervo has arrived on the scene. Social media has gripped students and they will take
9. the opportunity to take pictures with this “luchador” character and inevitably post them
on their social networks with various hashtags about the Jose Cuervo brand. Also, the
Luchador will stick out in most venues and therefore be easily recognizable and as such
will be a constant reminder to purchase Jose Cuervo tequila. This would also be a fairly
affordable promotion tool to implement but would prove very profitable.
R80 000 would be set aside for his. This would cover the costs of having the Luchador
masks made and branding material to this regard created as well. This would also cover
the costs of the social media campaign to go along with this. R20 000 will be set aside
per city for Johannesburg, Durban, Cape Town and Bloemfontein.
Figure 1 an example of how the Luchador mask would look.
2. Bring back the fun (R340 000)
In 1979, Jose Cuervo became volleyball’s first major sponsor in the USA. Later when
the Association of Volleyball Professionals (AVP) tour was scrapped in 2012, the Jose
Cuervo Pro Beach Volleyball Series was launched in 2011.
This all happened in the USA but this very template could work on a smaller scale here
in South Africa and among the student population. At the beginning of each year the
Receive and Give (RAG) event that runs throughout the country in most major
universities. This provides the ideal marketing situation for brands. During this time, first
year students are introduced to the campus culture by participating in a number of fun
events designed to integrate them with their new surroundings. Many parties take place
all over the country in major universities as students enjoy being back at school and
squeeze in some social time before the studying begins.
10. Jose Cuervo could capitalize on this by sponsoring a small scale one day Volleyball
tournament in each university where the students would enter their volleyball teams and
compete. This way the Jose Cuervo would have a way to enter the student arena in a
manner that is seen as building relationships and team work rather than in the negative
light usually associated with alcohol brands. The branding alone would increase student
awareness greatly and build up a following among the students for the remainder of the
year. Jose Cuervo promotional material such as key chains and caps would also be a
constant reminder of the brand for the students long after the event has ended.
This is how the bulk of the budget would be spent as most students have never heard of
the brand when they start university so getting awareness at this early stage will pay
dividends later on when they get older.
R85 000 will be set aside for a tournament in one major university in Johannesburg(UJ),
Cape Town(UCT), Bloemfontein(UFS) and Durban(UKZN). These locations have been
selected as they would yield the largest crowds in their respective provinces. The total
sum of R340 000 will cover all the admin costs in each of the universities as well as
branding and prizes. This will be a strategy that can be implemented once each year in
January.
Figure 2: Example of Cuervo volleyball branding
11. 3. Bring the Cuervolucion to the people (R80 000)
Ahead of the next Cuervolucion event, an invitation will be sent out to the public for all
local bands from that host city to submit their demo’s in the hope of winning a chance to
perform on the Cuervolucion stage. Bottle hangers would be placed on the Cuervo
bottles of major bottles stores in that city to spread the message, as well as local radio
stations being used for advertising.
The R80 000 would be divided in the following way:
R40 000 for the necessary branding and advertising costs.
R15 000 for the administration and choosing of a winner.
R25 000 prize for the chosen band. (This can be in the form of Cuervo
branded music equipment.)
Judging by how few people knew of the Cuervolucion events, this publicity can serve to
enhance the reputation of these events while also giving back to the communities they
are held in. The chosen bands must be of a genre of music in line with the Cuervo
brand and the Cuervolucion events so the big name artists chosen to perform would
serve as judges to determine a winner. They would also assist the chosen band with
their music and their performance. This experience would prove valuable to the chosen
band and Cuervo could be unearthing some hidden gems with this initiative. All while
gaining valuable exposure for the brand with minimal expense.
