How to Make Mount Gay Rum Super Premium

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I prepared this document for a rum brand in 2012. Nothing ever came of the meeting, but I thought my followers might enjoy seeing a discussion document that highlights how to make a brand super premium. It was meant for a presentation-style meeting so some slides may not be 100% clear, but it should still be an enjoyable read.

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How to Make Mount Gay Rum Super Premium

  1. 1. Mount Gay Rum How to Become “Super Premium”
  2. 2. “We argue that moving away from product to corporate branding means moving from communications/ marketing driven activity towards adapting a brand-based strategy for managing the organization. Corporate branding implies that the whole organization serves as the foundation for brand positioning...” 2 Source: R. Elliot & K. Wattanasuwan, International Journal of Advertising, 1998
  3. 3. AGENDA WHO AM I? GLOBAL RUM MARKET SUPER PREMIUM BRAND STRATEGY US RUM MARKET SUPER PREMIUM BRAND IMPLEMENTATION STRATEGY 3
  4. 4. STRATEGIC MARKETER AND BRAND SPECIALIST • Overall, Dexter has 12 years of branding experience in the beverage space and has built an extensive network of contacts and has tremendous experience in managing and leveraging key trade, distributor and retailer partners. • In 2009 Dexter launched Morpheus Imports, Inc, an importer of wines and spirits from across the globe. Dot Au vodka is the first product to be launched in the US. • From 2007-2009, Dexter was a senior brand manager of Strategic Alliances and Luxury Gifting in Diageo NA’s Reserve (Luxury) Brand Group. • Prior to joining DIAGEO, he served as a senior brand manager at Moët Hennessy USA (LVMH) where he led Hennessy’s Privilege VSOP and its luxury Prestige Range from 2003-2007. • Prior to entering the alcoholic beverage industry, Dexter was a brand manager at The Coca- Cola Company in Atlanta from 1999-2003 where he marketed many of their flagship products like DASANI, diet Coke, Fruitopia, Cherry Coke and Minute Maid sodas. • Dexter began his marketing career as a brand management intern working on the Head and Shoulders brand at the Procter and Gamble Company in Cincinnati, OH. Who am I? Media Coverage 2005 BizBash Magazine Event Planner of the year Skills: Brand Strategy & Mgmt Corporate Strategy Organizational Leadership Innovation/New Product Dev Internet/Social Media Strategy Media Planning & Buying
  5. 5. Highlights: Global Rum Market Rum is a fast growing, lucrative segment dominated by big global players • Five global giants control 65% of overall spirits globally and 4 have major rum brands in their portfolios. • The global rum market is 150MM 9L cases and 12% of global spirits [2009 IWSR] • Rum’s CAGR = +7.4% from 2004-2009 and is projected to grow +3.4% 2010-2014 [IWSR & Euromonitor 2014 Rum Market Forecast (2009)] Diageo Pernod Ricard Bacardi Fortune Brands Captain Morgan Havana Club Bacardi Cruzan Zacapa Rum Malibu Coconut Rum Bacardi Flavors Ronrico Myer’s Rum Montilla CastilloRon Conch Republic Ron Cacique Palmas Pampero Ron Ron Estelar Bundaberg Rum * Diageo Annual Report 2010 & Impace Databank 2011
  6. 6. Key Global Rum Markets* 6 Key Market Global Market Share CAGR (2007-2009) USA 28.9% 5% India 10.4% 16% Spain 7.0% 2% Canada 6.5% 4% UK 5.7% 8% Germany 4.2% 3% France 3.5% 7% Venezuela 2.5% 50% Dominican Republic 2.4% 15% Australia 2.1% 12% Top 10 Rum Markets Represent 73.2% of Volume *Source: 2009 IWSR (Intl Wine & Spirits Research) Report
  7. 7. “The old brand model, which advocated the creation of an external brand image to influence consumers, is a thing of the past... brands must be better from the inside out. They must embrace a cultural shift.” 7 Source: The Liquid Agency, Brand Culture White Paper, 2012
  8. 8. PURPOSE THE REASON YOU EXIST BEYOND MAKING MONEY (NEVER CHANGES) GOALS SHORT-TERM OBJECTIVES THAT SUPPORT YOUR MISSION AND VISION (1-5 YEARS) THE STRATEGIC PYRAMID MISSION A MASTER PLAN FOR CREATING VALUE (5-20 YEARS) VISION A SHARED PICTURE OF MISSION SUCCESS (5-20 YEARS) LIQUID AGENCY Strategic Pyramid: The “What” of Brand Strategy 8 Source: The Liquid Agency, 2012 Google: To organize the world’s information and make it universally accessible. Coca-Cola: To refresh the world PURPOSE VISION JFK Space Program: Put a man on the moon by the end of the 1960s Mount Gay Rum: Become a Top 5 rum brand in the USA by 2018
  9. 9. Mount Gay Rum is the ONLY _____ that _____. 9 Source: R. Elliot & K. Wattanasuwan, International Journal of Advertising, 1998 Mount Gay Rum: What Makes It “The Only?” ex - HARLEY DAVIDSON WHAT: The only motorcycle manufacturer HOW: that makes big, loud motorcycles WHO: for macho guys WHERE: mostly in the USA WHY: who want to join a gang of cowboys WHEN: in an era of decreasing personal freedom
  10. 10. THE CONVERSATION VALUE GENERATED BY INVENTIVE ACTIVITIES AND EXPERIENCES. “THE REASON TO TALK” CREATE BRAND MYTHOLOGY THE AUTHENTIC, AND UNIQUE BRAND STORY THAT HAS THE POWER TO EXCITE PEOPLE AND MAKE THEM CURIOUS Who do we TARGET with Mount Gay? A NEW CLASS OF INFLUENCERS, INDEPENDENT THINKERS AND DOERS THAT ARE NOT AFRAID TO STAND OUT, EMBRACE AUTHENTICITY WHILE LEAVING CLASSLESS LUXURY FOR DEAD THE REBELLIOUS ELITE™ ESTABLISH CULTURAL RELEVANCE
  11. 11. Consumer Target: The Rebellious Elite™ The Rebellious Elite™ - A new class of influencers, independent thinkers and doers that are not afraid to stand out and embrace authenticity while leaving classless luxury for dead. •Marketing Target: Age = 27 yrs •Volume Target: Age = 25 - 35 yrs •Psychographic: Global travelers who party where the weather is best. They’re transitioning to adulthood and deciding who they want to be and what brands will represent that mindset.
  12. 12. “In consumer culture people no longer consume for merely functional satisfaction, but consumption becomes meaning-based, and brands are often used as symbolic resources for the construction and maintenance of identity”* 12 Source: R. Elliot & K. Wattanasuwan, International Journal of Advertising, 1998
  13. 13. Amer Whiskey 11% Impor Whiskey 14% Gin 6% Vodka 31% Rum 13% Tequila 6% Cognac 6% Liqueurs 11% Cocktails 3% 13 US Distilled Spirits Consumption by Category 2009 Source: Adams 2010 Advanced Rum is 3rd largest segment in the US and is growing about +2.5% Vodka’s % of Distilled SpiritsVodka’s % of Distilled SpiritsVodka’s % of Distilled Spirits 2007 2008 2009 28.9% 29.5% 31%
  14. 14. Mount Gay volume has been flat in the USA 14 200 400 600 2005 2006 2007 2008 2009 2010 0 1 3 2 6 711 20 26 27 23 22 57 125 213 344 475 575 0 0 69 73 118 195190 190 197 207 195 193 Cases(000s) Mount Gay Don Q Sailor Jerry 10 Cane Oronoco If Mount Gay increased its share of US rum market to 1% its volume would be 255K cases and after a growth rate of +32%
  15. 15. 2010 Top Rum Markets in USA 15 State Volume CDI Growth Rate Mount Gay Fair Share* 1 Florida 2.7MM 178 2.5% 20.4K 2 California 2.5MM 82 2.4% 18.9K 3 New York 2.1MM 127 2.0% 15.9K 4 Texas 1.3MM 69 2.2% 9.8K 5 Illinois 1.1MM 108 2.2% 8.3K 6 New Jersey 1.1MM 147 2.3% 8.3K *Based on Mount Gay Rum US Market Share of 0.76% (1) California and Texas are underdeveloped rum markets (2) Mount Gay should be generating 81.6K cases and 42% of its volume in Top 6 markets*
  16. 16. Mount Gay Rum’s 5 Stage Repositioning Model 5 Full Portfolio and Continuous 360 Degree Growth Driver Activation 4 Expand and Deepen Distribution Global Duty Free Strategy 3 Tier 2 On- Trade Distribution Tier 2 Off- Trade Distribution Luxury 3rd Party Partnerships 2 Influencer Adoration Activation (Guru/Key Decision Maker Strategy) Mentorship Activation (Events/ Training/ Education) PR and Media Visibility Activation Retail Distribution and Activation (in the Top- End Leader Accounts) Foundations for GrowthFoundations for GrowthFoundations for GrowthFoundations for GrowthFoundations for GrowthFoundations for GrowthFoundations for GrowthFoundations for Growth Commercial PlanningCommercial PlanningCommercial PlanningCommercial PlanningCommercial PlanningCommercial PlanningCommercial PlanningCommercial Planning 1 Top Tier Mgmt and Sales Organization Portfolio of Exceptional Brands Superior Consumer Understanding Establish Route-to- Market Define Top- End Leader Accounts Develop Influencer Adoration (Select Gurus, Trade Partners) Strategy Plan PR and Media Visibility Years 1 - 2 Years 2 - 3 Years 3 - 4 Years 4+ First 3-6 Months
  17. 17. PR Influencer Strategic Alliances Training Material Packaging CRM Sampling & Drink Rituals Retail Theater Advertising Brand Experience Interactive Mount Gay Rum’s Marketing Growth Drivers
  18. 18. “A people’s ethos is the tone, character and quality of their life, its moral and aesthetic style and mood; it is the underlying attitude toward themselves and their world that life reflects.” 18 Source: C. Gertz, The Interpretation of Culture, 1973
  19. 19. Brand Platform: Surf/Sailing Culture Luxury manifested in living where and how you want while doing whatever you want when YOU decide.
  20. 20. Mount Gay’s Digital Strategy: Consumer Generated Ecosystem Create a brand-equity-building Internet ecosystem utilizing social media (Facebook, Twitter), blogs (Tumblr) and mobile (Instagram, Foursquare) to connect with target consumers. Enable brand connection by requesting and posting consumer-generated content via Internet ecosystem.
  21. 21. Brand Promotional Calendar Mount Gay rum’s promotional calendar will be conducted in cities with satellite surf culture towns, i.e. NYC + Montauk (Hamptons) and take place during their high seasons. Essentially, Mount Gay rum will be where the Rebellious Elite “plays” and vacations. Spring/Summer: NYC + Montauk; Boston + Vineyard Fall/Winter: LA + SoCal Coast; Miami
  22. 22. Example - Brand Equity Partnership Using principle of “borrowed equity” Mount Gay rum should partner with brands that are already establish super premium/luxury players. The strategic partners should also support Mount Gay’s brand positioning and platform. Hinckley Yachts Events for Hinckley
  23. 23. 23 Packaging Upgrade Case Study BENEFITS  of  PACKAGING  UPGRADE* •Provided  a  mechanism  for  consumers  to  re-­‐consider  the  brand •Generated  tons  of  PR  &  Press  due  to  it  being  “new  news” •Increased  Smirnoff’s  “super  premium”  cues  at  a  premium  price   (increased  value) •Combined  with  advertising  to  provide  enough  value  for  price   increases •Helped  brand  to  increase  its  execution  of  retail  theater  resulting  in   higher  distribution  of  volume  driving  displays •Enabled  brand  to  benefit  from  consumer  switch  to  off-­‐premise   purchase  patterns  during  recession Smirnoff has added 1.5MM cases since 2005 *Anecdotal analysis based on work experience
  24. 24. 24 Mount Gay Rum Cocktail Program Cocktail Program: Should be developed by high end talent behind influential bars and cocktail culture SHOTS/SHOOTERS CLUB  COCKTAILS HIGH  END  COCKTAILS Mount Gay’s versatility, both in cocktails and drinking occasions, will drive velocity.
  25. 25. 25 Thank You

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