Marketing Strategies for Champagne Brands

BSc Business Studies (2005–2008)
Cass Business School
Marketing
strategies
for
Champagne
Author: William Tarvainen
Supervisor: Prof. George Balabanis
Submission: 27 March 2008
Grade: Distinction
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ACKNOWLEDGEMENTS
I would like to dedicate this dissertation to my beloved father, who has not only made it
financially possible for me to study several degrees, but also contributed at a deeper level –
constantly encouraging, never doubting, always inspiring.
My sincere thanks to Professor George Balabanis, who has supervised this
dissertation and been a truly stimulating guide to marketing. I would also like to thank the
academia at Cass Business School for creating an academic environment in which intellectual
discussion challenges students to find their full potential. From the academia, I would
especially like to thank Doctors David Edelshain and Ajay Bhalla for offering not only
outstanding academic support but also for encouraging and building me as an individual.
I am grateful to all the 13 interviewees for taking the time to meet me personally – I
sincerely hope you will find this research useful. I am especially honoured to have worked
with what I consider to be among the very greatest Champagne houses – and some of my
personal favourites.
Lastly, I would like to thank my family and friends. My sister has been an academic
inspiration and also a comfort in my dissertation preparation; and without the inspired late-
night tastings with my Champagne-drinking friends, I would have had a much harder time in
deciding on the dissertation topic.

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ABSTRACT
This dissertation looks at what makes for a good marketing strategy in the Champagne sector.
With global demand outstripping the supply of Champagne, there has been pressure to
manage this demand by getting consumers to trade up to more specialist value-added styles
from the lower-value non-vintage style of Champagne. This changing nature of the
Champagne market generates new opportunities and challenges, and the prominent role of
brands in this market creates unique opportunities for marketing strategies.
To gain a better understanding of marketing strategies and brands in this market, 13
people were interviewed from different parts of the trade, and the findings were analysed in
the light of modern academic thinking in luxuries, brands, and wine. The interviews showed
that among the most crucial aspects for marketing Champagne are visual branding and
distribution channel management, with consistency and quality becoming more vital in the
long term. Shifting the marketing focus onto more value-added styles has clear benefits, but
this has to be carefully managed to avoid confusing the consumer or diluting the brand
identity. The findings resulted in four recommendations for current areas of improvement:
brand the mid-sector; tailor your offering to your customer’s values; communicate your
speciality; and send a consistent message.

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TABLE OF CONTENTS
INTRODUCTION ______________________________________________6
Dissertation structure _________________________________________________________________ 7
PART I: LITERATURE REVIEW __________________________________8
1. Luxury _______________________________________________________________8
Luxury consumers___________________________________________________________________ 10
Veblenian consumers ________________________________________________________________ 11
Snob consumers ____________________________________________________________________ 12
Bandwagon consumers _______________________________________________________________ 13
Hedonist consumers _________________________________________________________________ 13
Perfectionist consumers ______________________________________________________________ 14
The role of culture___________________________________________________________________ 15
New luxury markets _________________________________________________________________ 15
2. Brands ______________________________________________________________16
Brand extensions____________________________________________________________________ 16
Brand portfolios ____________________________________________________________________ 17
Brand knowledge and linking brands to other entities _______________________________________ 17
3. Wine ________________________________________________________________19
Wine as a hedonic product ____________________________________________________________ 19
Wine consumption and purchasing ______________________________________________________ 19
Wine marketing_____________________________________________________________________ 20
PART II: INDUSTRY OVERVIEW ________________________________22
Definition of Champagne _____________________________________________________________ 23
The history of Champagne (Appendix 1) _________________________________________________ 23
Champagne sales____________________________________________________________________ 24
Champagne markets _________________________________________________________________ 25
Environmental analysis (Appendix 2)____________________________________________________ 27
Industry analysis (Appendix 3) _________________________________________________________ 28
Brands in Champagne ________________________________________________________________ 29
Champagne styles (Appendix 4) ________________________________________________________ 30
PART III: RESEARCH PROCESS ________________________________31
Before the interview _________________________________________________________________ 31
The interview process (Appendix 5) _____________________________________________________ 31
The discussion guide (Appendix 6)______________________________________________________ 32
The interviewees ____________________________________________________________________ 34
Analysing the interviews______________________________________________________________ 35
Interpreting the interviews ____________________________________________________________ 36
PART IV: FINDINGS AND ANALYSIS _____________________________38
Marketing Champagne _______________________________________________________________ 38
Marketing mistakes__________________________________________________________________ 39
The Champagne market ______________________________________________________________ 39
The Champagne consumer ____________________________________________________________ 40
Purchasing Champagne_______________________________________________________________ 41
Indicators of quality and prestige _______________________________________________________ 42
Linking brands to other entities_________________________________________________________ 42
Product lines _______________________________________________________________________ 43
Perception differences________________________________________________________________ 45
Validity and reliability _______________________________________________________________ 46

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PART V: RECOMMENDATIONS_________________________________49
Brand the mid-sector_________________________________________________________________ 49
Tailor your offering to your customer’s values_____________________________________________ 50
Communicate your speciality __________________________________________________________ 51
Send a consistent message ____________________________________________________________ 52
CONCLUSION_______________________________________________53
Further research_____________________________________________________________________ 54
REFERENCES_______________________________________________55
APPENDICES _______________________________________________70
Appendix 1: History of Champagne ________________________________________70
History of Champagne _______________________________________________________________ 70
The process ________________________________________________________________________ 70
The trade __________________________________________________________________________ 70
History of Champagne brands__________________________________________________________ 71
Appendix 2: Environmental analysis _______________________________________72
Political ___________________________________________________________________________ 72
Economic _________________________________________________________________________ 72
Social_____________________________________________________________________________ 73
Technological ______________________________________________________________________ 73
Environmental______________________________________________________________________ 74
Legal _____________________________________________________________________________ 74
Demographic_______________________________________________________________________ 75
Appendix 3: Industry analysis_____________________________________________76
Suppliers __________________________________________________________________________ 76
Buyers ____________________________________________________________________________ 76
New entrants _______________________________________________________________________ 76
Substitutes_________________________________________________________________________ 77
Industry rivalry _____________________________________________________________________ 77
Appendix 4: Champagne styles ____________________________________________78
Non-vintage________________________________________________________________________ 78
Prestige cuvée ______________________________________________________________________ 78
Vintage ___________________________________________________________________________ 78
Rosé______________________________________________________________________________ 79
Blanc de blancs, blanc de noirs _________________________________________________________ 79
Ultra brut__________________________________________________________________________ 79
Sec and demi-sec____________________________________________________________________ 79
Mono-crus_________________________________________________________________________ 80
New combinations___________________________________________________________________ 80
Appendix 5: Discussion guide _____________________________________________81
Appendix 6: Approach letter ______________________________________________83
Appendix 7: Interview codebook___________________________________________84

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LIST OF TABLES
Table 1: Values of luxury......................................................................................................9
Table 2: Champagne brand collaborations........................................................................... 30
Table 3: Interviewee perception differences by role in the industry ..................................... 45
Table 4: Interviewee perception differences by experience.................................................. 47
Table 5: Consumer types and Champagne........................................................................... 51
LIST OF FIGURES
Figure 1: Luxury consumer grid.......................................................................................... 10
Figure 2: Luxury consumer motivations.............................................................................. 11
Figure 3: Global Champagne sales 1997–2007.................................................................... 24
Figure 4: The proportion of Champagne sales in the top 6 markets...................................... 25
Figure 5: Top 10 Champagne export markets ...................................................................... 26
Figure 6: Environmental factors for Champagne ................................................................. 27
Figure 7: Champagne industry factors................................................................................. 28

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INTRODUCTION
Champagne is the great success story of wine. Its status as the celebratory sparkling wine is
undisputed – even other wine-producing countries serve Champagne at their embassies
(Lowe 2006). It is often seen as being closer to a luxury commodity than a wine (Stevenson
2005 b), and has arguably one of the strongest-ever unique selling points (Boothman 2005).
Champagne is currently enjoying a boom in global sales, and supply is struggling to keep up
with demand (Beckett 2005 a & 2006; Straker 2007 b).
The great majority of Champagne is a blend of several vintages, and as the entry-level
product to any producer’s product line, non-vintage Champagne also sells at the lowest price
(Juhlin 2004). With limited supply and booming demand, many producers are now
attempting to shift the emphasis from lower-value non-vintage Champagne toward higher-
priced value-added styles; these are more specialist cuvées (blends) such as vintage
Champagne (Evans 2007; Fallowfield 2006 a). However, the value of new Champagne styles
might be more difficult to communicate to the consumer who is more driven by lifestyle than
wine quality. With these emerging opportunities in mind, this dissertation answers to the
research question, “What makes for a good marketing strategy for Champagne?”
To answer the research question, 12 trade interviews are conducted and the findings
examined in the light of past academic research and current industry trends.
This dissertation is targeted toward brand managers and other Champagne sector
decision-makers. Most of the interviewed people work in the United Kingdom (UK), the
largest export market for Champagne (Hey 2008), and thus the findings of this research are
best suited for UK brand managers.
An interesting aspect for research in Champagne marketing is that much cutting-edge
research on marketing is done in countries outside the European Union (EU) that do not
recognise the Madrid Agreement Concerning the International Registration of Marks
(Madrid Treaty) (WIPO 1891), which protects the intellectual property rights (IPRs) of the
word “Champagne”. Thus, there is very limited research on applying concepts of luxury
consumer behaviour (e.g., Liebenstein 1950; Vigneron and Johnson 1999) or brand
management (e.g., Aaker and Joachimsthaler 2000; Keller 2005) to Champagne. This is not
to suggest a total lack of research in Champagne marketing – merely that considerable scope
for further research exists in this area. This dissertation explores this gap in research, adding

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value by combining modern academic thinking on luxuries, brands, and wine with the insight
from the 12 trade interviews.
Dissertation structure
To provide a balanced picture of marketing Champagne, this dissertation combines past
research and current industry analysis to the new information gathered from trade interviews.
The structure of this report is divided into five distinct parts.
To provide an understanding of what is already known of Champagne marketing, Part
I: Literature Review examines past research. Since research into Champagne marketing in
itself is in woefully scant supply, research into three different aspects of Champagne is
reviewed; luxury, brands, and wine – these aspects help to understand the consumption and
marketing of Champagne as a luxurious branded wine.
However, Champagne is more than just a luxurious branded wine, and the
Champagne market has unique characteristics. To understand the speciality of Champagne,
Part II: Industry overview provides a look at the current markets, analysing Champagne from
the perspectives of history, the macro-environment, the industry environment, brands, and
different Champagne styles.
Part III: Research process explains how this particular research was conducted,
helping to understand where the findings might be most applicable.
In Part IV: Findings and analysis, the findings from the 12 interviews are presented
and analysed in the light of theoretical and market knowledge.
Finally, Part V: Recommendations arrives to four recommendations for the modern
Champagne marketer, and the Conclusion sums up what has been researched and where
further research might be directed.

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PART I: LITERATURE REVIEW
An important first step in research into a new area is recognising past research, and how the
aspects of past research can contribute to the new research. Although Champagne is a very
prominent brand in itself, academic research into Champagne marketing is miniscule. Thus,
to get an understanding of what research might be valuable for Champagne marketing,
research into three different aspects of Champagne are reviewed separately. The first part of
the literature review examines past luxury research, and especially the theories of luxury
consumer behaviour. The second part looks at past research in brands, looking at areas such
as brand portfolios and linking brands to other entities. Finally, the third part examines the
specific attributes of marketing wine, also explaining the differences between hedonic and
utilitarian products.
1. Luxury
The word luxury derives from the Latin word for excess, luxus, and it has been researched for
over a century (Soanes and Stevenson 2005). Veblen’s The Theory of the Leisure Class
(1899) was the breakthrough work on luxury consumer behaviour; so influential in the field
that latter research often talks of the conspicuous consumer as the Veblenian consumer. Rae’s
(1834) earlier work examined conspicuous consumption along similar lines. With the
introduction of the concept of “prestige value” (Keasbey 1903), it became easier to examine
and understand luxury products and luxury consumer behaviour.
Research into luxury products has suffered from differing definitions of key terms.
Vigneron and Johnson (1999) define prestige brands as the umbrella category for upmarket,
premium, and luxury brands. This dissertation, however, uses the terminology of the
Champagne industry, where prestige cuvées are at the very highest end of luxury brand
portfolio.
Luxury products can be defined as those “whose ratio of functional utility to price is
low while the ratio of intangible and situational utility is high” (Nueno and Quelch 1998 p.
62). Luxury products present the very extreme in high-involvement decision-making
(Vigneron and Johnson 1999), and people may buy luxury products for what they symbolise

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(Dubois and Duquesne 1993). Luxury also makes people dream, and these attached
emotional and aspirational values justify some of the price premiums of luxury (Dubois and
Paternault 1995). As research has progressed, several aspects of luxury value have been
identified. Table 1 segments and aggregates some research examples of perceived luxury
values into five main categories (the dark areas have not been researched by the given
authors).
Table 1: Values of luxury
The different values of luxury (Table 1) imply that people perceive luxury in different
ways. It is thus important to understand how luxury is perceived – understanding the luxury
consumer is the key to understanding luxury marketing. The following looks at these
different consumer types in more depth.

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Luxury consumers
In early research to different luxury consumer types, Leibenstein (1950) differentiates
between the Veblenian, snob, and bandwagon consumer. The bandwagon effect makes the
luxury consumer more price-sensitive, and the snob effect makes the consumer less price-
sensitive than otherwise. The Veblen effect makes the luxury consumer so price-insensitive
that a higher price can actually increase demand.
Vigneron and Johnson’s (1999) model divides luxury consumers into four different
categories, as indicated in Figure 1. Self-consciousness is defined as the consistent tendency
to direct attention inward or outward: publicly self-conscious consumers are more concerned
on how they appear to others, while privately self-conscious consumers reflect more on their
personal thoughts and feelings. The private or public value of luxury goods is built on the
strong communicative status of these items (Dawson and Cavell 1987). Building on
Leibenstein’s (1950) three consumer types, Vigneron and Johnson (1999) add two further
consumer types: the hedonist and the perfectionist consumer (Figure 2).
Figure 1: Luxury consumer grid
Understanding the differences between luxury consumer types can contribute to
segmenting – value-based segmenting may be a more efficient way to target modern
consumers than traditional demographic segmenting (Forsyth et al. 1999). Understanding

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these consumers also allows researchers to adjust their advertising message to underline the
values perceived as most important in determining the level of luxury (Vigneron and Johnson
1999). Further research on this framework presents tools to measure perceptions of luxury
along the dimensions of Figure 2 in order to manage marketing activities more efficiently
(Vigneron and Johnson 2004). As the primary values of these consumers are very different, it
is important to understand these five consumer types in more depth – the following examines
the specific traits of the Veblenian, snob, bandwagon, hedonist, and perfectionist consumers.
Figure 2: Luxury consumer motivations
Veblenian consumers
Veblenian consumers are motivated by ostentation – conspicuous consumption can be used to
signal wealth, and by inference, status (Veblen 1899; Leibenstein 1950). Conspicuous
products are typically consumed publicly, and thus have primarily interpersonal motivations
(Bearden and Etzel 1982). Highly visible brands are thus best positioned for this consumer
segment.
In addition to high visibility, conspicuous consumers place high importance on price.
Not only is price a perceived as an indicator of quality (Erickson and Johansson 1995), it is

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also a signal of luxury (Lichtenstein et al. 1993). The price of conspicuous products can be
divided into two categories; the real price refers to the actual price the consumer paid for the
product, whereas the conspicuous price is the price other people think the consumer paid for
it (Leibenstein 1950). This has led to a conscious effort to add value to the product by
applying a prestige-pricing strategy in support of other marketing activities of luxury
products (Groth and McDaniel 1993). Conspicuous consumption can also be linked to
materialism through envy – as envy is usually directed at expensive products one cannot
obtain oneself, the envious person consequently places higher value on acquiring and
consuming these products (Wong and Ahuvia 1998).
Snob consumers
Whereas the Veblen effect is directed solely outward, snob consumers also considers
personal desires in luxury consumption (Leibenstein 1950). The snob effect may occur in two
directions; the snob can either take advantage of the limited nature of consumers at the launch
of a new luxury product, or reject a product when it is perceived to lose the rarity value and
becomes more widely available to the masses (Rogers 1995). The primary perceived value of
luxury thus lies in its uniqueness, and the snob consumer emphasises his non-conformity to
the mass by avoiding popular brands (Leibenstein 1950; Vigneron and Johnson 1999; Wong
and Ahuvia 1998).
Like the Veblenian consumer, the snob consumer is also highly aware of price.
Relative scarcity can increase the value the consumer attaches to a brand (Bearden and Etzel
1982; Verhallen 1982), and this limited supply has an even stronger effect on demand if the
product is also seen as expensive (Verhallen and Robben 1994). Prestige pricing can thus also
be used to communicate luxury to the snob consumers, as it can concurrently be an indirect
indication of exclusivity (Groth and McDaniel 1993; Vigneron and Johnson 1999).

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Bandwagon consumers
Whereas snob consumers seek non-conformity to the undesired social group, bandwagon
consumers seek conformity to the desired prestigious social group (Leibenstein 1950). Snob
and bandwagon consumers have the same basic motivation for buying luxury products:
enhancing their self-concept through luxury consumption (Dubois and Duquesne 1993).
Bandwagons can also be seen as the antecedent of the snob effect (Miller et al. 1993). The
bandwagon decision-making process can be seen through the materialistic model; measuring
success by the things one owns (Belk 1985; Richins 1994). The desire to possess and
consume prestige brands can also be seen as a symbolic marker of group membership (Belk
1988); this can mark between the consumption and non-consumption of a luxury brand
(Vigneron and Johnson 1999; Tian and Belk 2005).
Price is relatively weak indicator of luxury for bandwagons, who are the most price-
sensitive of the Leibenstein’s (1950) three luxury consumer types. Consumers may try to
imitate stereotypes of affluence by consuming similar luxury products, which act as devices
for locating other people in the social hierarchy (Dittmar 1994).
The three discussed consumer types reviewed – Veblenian, snob, and bandwagon –
consume luxury for primarily inter-personal motivations. However, many consumers also
consume luxury for primarily personal motivations, such as emotional (hedonist) or quality
(perfectionist) reasons.
Hedonist consumers
Hedonist consumers are more concerned about their own feelings when consuming luxury,
and thus place less emphasis on price as an indicator of luxury. They focus more on the
subjective, intangible benefits of the products, such as sensory pleasure, aesthetic beauty, or
excitement. Hirschman and Holbrook (1982 p.1) define hedonic consumption as the “multi-
sensory, fantasy, and emotive aspects of one’s experience with products”. Hedonist
consumers absorb experiences from luxury products, sometimes escaping from reality by

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engaging in fantasy (Hirschman 1982; Hirschman and Holbrook 1982). Research into
product-fantasy relationships shows that certain products have a “dream premium”; they
possess and communicate this hedonistic value more strongly than other products (Dubois
and Paternault 1995). (Vigneron and Johnson 1999.)
Although hedonist consumers place less importance in the social context of their
consumption (Vigneron and Johnson 1999), differences in consumers’ emotional responses to
products are closely tied to subcultures (Hirschman and Holbrook 1982). The value of
hedonistic goods thus exceeds their functional utility, feeding into consumers’ aspirations of
a better life (Silverstein and Fiske 2003). Those consumers who decide what to buy while
remaining “intentionally oblivious to social demands” are referred to as role-relaxed
consumers (Kahle 1995 p. 1) – this type of behaviour is at the extreme end of personal self-
consciousness (Figure 1).
Perfectionist consumers
In addition to social (Veblenian, snob, bandwagon) and emotional (hedonist) factors,
consumers may evaluate the level of luxury on the basis of perceived quality. Perfectionist
consumers seek reassurance of this superior quality through their own assessment of product
attributes, but also from price (Vigneron and Johnson 1999). Maintaining a quality leadership
and developing quality indicators are key elements in marketing premium products (Quelch
1987).
Price is perceived as an indicator of quality (Erickson and Johansson 1995), and for
some consumers, higher prices can make luxury products even more desirable (Leibenstein
1950; Groth and McDaniel 1993). Although perfectionist consumers rely on their own
perception of the product’s quality, the price cue may serve as further evidence to support the
quality offering (Vigneron and Johnson 1999).
Personal preferences shape the primary values of luxury, as discussed with the five
consumer types. In addition to these internal determinants, external factors also affect how
luxury is consumed; culture plays an important part in luxury consumption.

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The role of culture
Although income is the single most important determinant of luxury consumption, culture
influences luxury consumption across all income classes – the propensity to consume luxury
products may triple in moving from a luxury-to a more luxury-endorsing (Dubois and
Duquesne 1993). Culture also determines how consumers are allowed to respond to luxury,
shaping not only the amount but also the type of luxury products consumed (Hirschman and
Holbrook 1982).
The strongest recent growth in luxury consumption has been in the emerging markets,
and modern research has consequently compared attitudes toward luxury consumption across
different cultures (Dubois and Laurent 1996; Dubois and Paternault 1997; Wong and Ahuvia
1998). New luxury markets can emerge not only in new cultures, but also in unexpected
demographics, as discussed below.
New luxury markets
In addition to searching more and more exclusive markets, the luxury sector has also
extended downward. Whole new market segments have emerged between the old mass
market and the high-end luxury market; these mass affluent can be targeted by slightly
modifying the luxury consumption context (Nunes et al. 2004). Other ways to reach these
new markets are using unconventional price points and extending the distribution channels
downward (Johnson and Nunes 2002). So-called new-luxury products differ from old-luxury
products by being able to generate high volumes despite their premium prices (Silverstein
and Fiske 2003). To support the mass marketing of luxury, special strategies have been
identified (e.g., Nueno and Quelch 1998; Silverstein and Fiske 2003).
This section has identified key values for luxury, and explained how different consumers
value the aspects of luxury. In addition to these internal reasons, external reasons such as the
culture affect luxury consumption, and new markets are emerging at unconventional price
points. Luxury can be communicated through a prestigious brand (Liebenstein 1950; Wong
and Ahuvia 1998), and the next section reviews the aspects of brands in more depth.

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2. Brands
Kotler et al. (2005 p. 549) define a brand as a “name, term, sign, symbol or design, or a
combination of these, intended to identify the goods or services of one seller or group of
sellers and to differentiate it from those of competitors.” However, these external attributes
are only one dimension to brands – a brand can also be viewed more internally as a collection
of associations, consisting of benefits and attributes connected to the brand as a consequence
of marketing efforts and personal experiences (Keller 1993).
Brands that have favourable, strong, and unique associations are better differentiated
from competing brands, and can also be more easily extended into other product categories
(Keller 1993). Brands are the most important aspect for marketing when emotional and
experiential aspects of the purchase are strong, and when the experiences are passed from one
person to another (Lemon 2001).
Brand extensions
If a brand is strong, its value can be further utilised by brand extensions. Modern research has
assessed the attractiveness of brand extensions (Aaker and Keller 1990); conditions under
which brand extensions are likely to have favourable associations (Keller and Aaker 1992);
and how this can be done without damaging the core brand (John et al. 1998).
A balance needs to be struck – extensions outside the apparent category may dilute
the image of the parent brand, whereas a too narrowly defined brand makes any future
extensions difficult to justify (Meyvis and Janiszewski 2004). In general, consistent brand
associations are more easily and quickly recalled than diffuse associations, and brands with
narrow category associations thus seem to have a greater potential for extensions (Anderson
and Spellman 1995).
Without explicitly extending the brand, even implicit retail environment cues
implying some commonality between a higher- and a lower-established brand can benefit the
latter (Simmons et al. 2000). Brands, however, have boundaries – they can only be stretched
so far.

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Brand portfolios
When the core brand cannot be further stretched, managing multiple brands as a portfolio can
have significant benefits (Barwise and Robertson 1992; Kotler and Keller 2006). The many
brands can also be seen as a family, with an umbrella mother brand and possible sister brands
(Aaker 2004; Randall 1997) – recent research has even identified “problem child” brands in
some families (Harrison and Hartley 2007).
Brands can be viewed strategically, as a portfolio of assets to be leveraged and
managed to maximise their total worth to the company (Day 1998; Randall 1997). Although
typically seen as the sum of the company’s own brands, an alternative definition of brand
portfolios suggests they should encompass all brands influencing the consumer’s purchase
decision, whether owned or not (Hill and Lederer 2001). This definition would include brand
alliances, brand extensions, and ingredient brands as a part of a company’s brand portfolio.
Coordinating brand portfolio management strategically helps to identify which brands
deserve most attention and investment, and to avoid customer confusion or investment in
overlapping product development or marketing efforts (Carlotti et al. 2004).
Brand knowledge and linking brands to other entities
Brand knowledge means all the brand-related information a consumer has, whether positive
or negative, true or false (Keller 2003). Earlier research examined how these brand
knowledge structures were organised and their effects on consumers (Johnson and Russo
1984; Mitchell 1982). Aaker (1997) suggests five basic perceptual dimensions of brands:
sincerity, excitement, competence, sophistication, and ruggedness. Further research has
helped grasp the relationships that consumers form with brands (Fournier 1998), and the
community relationships among brand users (Muniz and O’Guinn 2001).
Linking brands to other entities give a chance to “borrow” equity from other brands.
This wider brand knowledge can affect how the consumer perceives and responds to the
brand. (Keller 2003.) The most sustainable form of differentiating the brand is when the point
of difference itself can be branded – Aaker (2003) calls this the branded differentiator. The
consumer does not need to thoroughly understand the differentiator – as long as the
differentiator is perceived as delivering something special, it can work to the brand’s
advantage. (Aaker 2003.)

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Understanding how the values of luxury differ across consumers and what kind of
possibilities new modern thinking in brand management can offer have given some insight
into luxury brands, such as Champagne. However, Champagne is also a wine, and it is
important to finally review the research on wine marketing to fully appreciate the
multidimensionality of marketing Champagne.

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3. Wine
Wine as a hedonic product
The core benefit of wine is quenching thirst – but as consumers are willing to pay significant
amounts for wine, there has to be something more to it than fulfilling a basic need. To
understand why consumers might be willing to pay more for wines such as Champagne, it is
important to distinguish between hedonic and utilitarian products. Hedonic products should
not be mixed with the hedonist consumers, although the terms may sound similar.
The underlying rationale behind hedonic products is that consumers do not buy
products merely on the basis of rationally maximising their functional utility (Hirschman and
Holbrook 1982; Millar and Tesser 1986; Tauber 1972). In some instances, emotional desires
are even more important than the basic utilitarian motives in choosing products (Maslow
1999); and consumers may also inject subjective meaning to a product to supplement the
product’s concrete attributes (Hirschman 1980). Measuring exactly how weight consumers
base on the utilitarian attributes of a product is very difficult, but Babin et al. (1994) have
arrived to a scale for assessing these utilitarian and hedonic values of shopping experiences
more accurately.
Empirical research supports this theory of hedonic and utilitarian sources of consumer
attitudes, and they appear as varyingly important across different products and consumer
behaviours (Batra and Ahtola 1991). Due do differences in the nature of different products,
the Batra and Ahtola (1991) findings might not be generalisable to all product categories
(Crowley et al. 1991); research continues in this area (Voss et al. 2003). Segmenting
consumers based on their utilitarian/hedonic shopping goals may offers benefits, as firms can
better adjust their marketing communications to highlight the benefits for the different
consumers (Guido 2006).
Wine consumption and purchasing
Consuming wine is very complex, even for a hedonic product – it is more similar to art
appreciation, with its complex combination of sensory, emotional, and cognitive responses
and a strong role of personal taste (Charters and Pettigrew 2005).
The main bases of wine choice are risk reduction and familiarity; factors indicating
familiarity include previous tastings (Dubow 1992), type or style (Mitchell and Greatorex

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1989), price (Mitchell and Greatorex 1989; Nerlove 1995), brand (Gluckman 1990; Mitchell
and Greatorex 1989), and region (Gluckman 1990; Spawton 1991). When purchasing wine
for an occasion, the first consideration is typically style suitability, then value, endorsement,
and wine character (Halstead 2005). Understanding the consumer motivations allows for
creating marketing strategies specifically tailored for the wine consumer.
Wine marketing
The move toward more branded wines is inevitable (The Economist 16 Dec 1999), and
marketing strategies mark success from failure to wine producers (Felzensztein et al. 2004).
Wine branding differs significantly across global regions, with two different commercial
strategies – European wines based on strictly defined destinations of origins, and new world
wines based on the grape variety (Martinez-Carrasco et al. 2005).
Marketing wine to specific consumer groups is a relatively new concern (Thomas and
Pickering 2003). Producers have been slow to adopt segmentation concepts, being more
preoccupied with wine quality (Spawton 1991). Occasion-based segmentation in the wine
markets may be more useful than user-based segmentation, providing clearer differences in
positioning for brands (Dubow 1992). However, behavioural segmentation using number of
bottles purchased might still be the clearest method for examining a wine market (Thomas
and Pickering 2003). Regional differences persist in channels and retail structures (Malhotra
et al. 1998), but strategies aimed at identifying high-involvement wine consumers may still
be successful on a global scale (Lockshin et al. 2001). Further, strategic partnerships with the
right channels are crucial for a wine producer’s global success (Thach and Olsen 2006).
The price hedonic model is often used as a basis for wine research (e.g., Landon and
Smith 1997; Combris et al. 1997; Oczkowski 2001). The model suggests that the product’s
price is an additive function of a bundle of attributes (Lancaster 1966). In the context of
wines, these attributes may refer to more objective features such as production district, grape
varieties, and the vintage year, or more subjective attributes (Thrane 2004). Although unable
to untangle the supply and demand effects on price (Unwin 1999), these models can provide
important insight to the price implications of a wine’s region, vintage, and subjective
qualities (Combris et al. 2000; Thrane 2004). Empirical research suggests that a wine’s
quality rating is strongly correlated with its price range and producer rating (Horowitz and
Lockshin 2002).

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Part I: Literature review has examined past research on luxuries, brands, and wine – three
different aspects of Champagne. Wine consumption has idiosyncratic characteristics, as does
luxury consumption; brand knowledge gives tools to market to these luxury wine consumers.
Marketing Champagne is not only affected by the consumer behaviour, though –
industry-specific factors are looked at in Part II: Industry overview before going on to the
main research process.

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PART II: INDUSTRY OVERVIEW
The Champagne market is not only unique in relation to other wine markets, but it is also at a
unique point in its history. It has enjoyed its biggest boom ever over the past years, and is
now faced with different choices: whether to increase supply by expanding the area; to
increase the price of generic Champagnes; or to increase the proportion of higher-value
Champagnes to manage the demand.
To gain an inclusive picture of the Champagne market, Part II: Industry overview
examines it through various angles. The part looks at how the history of Champagne has
contributed to its unique status as a world-famous sparkling wine, and current global sales
and regional markets are also reviewed. What happens in the macro-environment of
Champagne affects the industry environment, and factors affecting both environments are
analysed. Having reviewed these factors, brands in Champagne are reviewed from the
perspectives of AC Champagne itself and the various Champagne producers’ brands; and
finally the different styles are mentioned. To begin, though, Champagne is defined more
exactly.

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Definition of Champagne
The word “Champagne” has four meanings. Geographically, it denotes both the Champagne
province in northeastern France, and the delimited area inside the Champagne province that
can produce sparkling wine under the denomination Appellation Champagne Contrôlée (AC
Champagne) as defined by the Institut National des Appellations d’Origine (INAO).
Champagne is also the famous sparkling wine itself produced by the Champenois
(Champagne locals) in that area with the specific production standards set by the INAO.
Fourthly, champagne (with a lower case “c”) can be a generic word for any sparkling wine in
those countries that do not recognise Champagne IPRs (WIPO 1891). This report is on
Champagne, the French sparkling wine defined by the INAO. (Juhlin 2004; Stevenson 2002)
The history of Champagne (Appendix 1)
The wines of Champagne have had a celebratory status for centuries. As explained in greater
detail in Appendix 1, the unique history and characteristics of the region have led to brands
being more dominant than in any other wine area. Champagne differs from most other wine
areas in several respects: even of the best Champagnes can be sold under the same generic
AC Champagne denomination as the poorest ones, and most Champagne is a blend of several
vintages, several grape varieties, and several villages. As consumers often cannot use the
denomination, vintage, grape variety, or village name as an indicator of quality, the
producer’s brand has become one of the few quality indicators for the consumer. (Juhlin
2004; Robinson 2006)

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Champagne sales
Some 30 billion bottles of wine are produced and consumed globally per year, of which 2.8
billion bottles are sparkling wine. At 340,000 bottles, Champagne represents roughly 1% of
global wine production and 12% of sparkling wine production in 2007. (Straker 2008.)
By and large, Champagne sales have grown strongly over the past 300 years (Juhlin
2004). The global market took a dramatic hit in the early 1990s when the world economy
went into recession; and experienced more recent a bubble and crash right after the
millennium (Figure 3). This millennium crash is usually attributed to over-optimistic sales
projections for the millennium parties and the ensuing problems with overstocks, but the dot-
com crash had also an effect on the demand. (The Economist 11 Mar 2008; Williams 2008.)
In 2007, global Champagne sales topped the 1999 peak of 327,000 bottles, having
fully recovered the serious drop in the post-millennium sales. The 2007 annual turnover for
Champagne was an estimated !5 billion (£3.9 billion), and margins for producers have
improved over past years. Overall, the current market looks strong. (Straker 2008.)
Figure 3: Global Champagne sales 1997–2007

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Champagne markets
Despite its international appeal, more than half of Champagne is still consumed domestically
(Figure 4). The domestic French market still accounts for 54% of the sales, but exports are
growing more rapidly at 7.9%, compared to the domestic growth of 4.6% between January
and November 2007. The average bottle price is higher for exports, and they also seen as an
attractive buffer against domestic demand volatility. (Hey 2008; Williams 2008.)
Figure 4: The proportion of Champagne sales in the top 6 markets

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Of the export markets the UK is clearly the largest, with sales more than those of the United
States and Germany combined (Figure 5). The UK’s role as the market leader is often
attributed to geographic proximity and a long, shared history with the French. Although the
emerging markets still have very small sales volumes, booming sales growth in them has
created hopes that Champagne could shrug off a possible western recession. (Hey 2008.)
Figure 5: Top 10 Champagne export markets

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Environmental analysis (Appendix 2)
A standard framework for examining the environmental factors is the PEST (political,
economic, social, technological) analysis, which categorises macro-environmental factors by
their source (Grant 2008). The framework here is extended to incorporate environmental,
legal, and demographic aspects as well. Figure 6 presents the currently most relevant macro-
environmental factors for the Champagne industry, and these are analysed in more depth in
Appendix 2.
Figure 6: Environmental factors for Champagne

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Industry analysis (Appendix 3)
The history of Champagne and the current macro-environmental trends have shaped the
industry environment where the brands compete, and the Champagne market is distinctly
different from other wine markets. Figure 7 analyses the industry environment through the
five aspects of Porter’s (1979) Five Forces analysis, and the factors are viewed in more depth
in Appendix 3.
Whereas growers elsewhere usually make wine of their own grapes, Champagne is
characterised by large producers purchasing and blending grapes from several producers and
villages. Although Champagne houses can own some vineyards, they are restricted from
owning or renting more than 15 hectares of land (Stevenson 2005 a). The 100 or so
Champagne houses account for 90% of exports (Mintel 2006), and largest houses are referred
to as the grandes marques. The rest is dispersed between some cooperatives of producers,
and grower-producers doing all or part of the process themselves. (Juhlin 2004.)
What is curious in the UK market is that although Champagne is the most profitable
sector of the British wine trade (Rose 2005), it is the only wine regularly sold on discount
(Mintel 2006). Even the current shortage of Champagne has not restricted high-profile price
promotions, which have had a big impact on the industry – the editorial of The Drinks
Business Champagne Report 2008 remembers 2007 as “the year of half-price Dom Pérignon”
(Schmitt 2008 p. 5), and the same report describes discounting as “deconstructing the value
of Champagne as a luxury good (Cawood 2008 p. 33).
Figure 7: Champagne industry factors

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Brands in Champagne
Demand for Champagne outstrips its supply, and the industry can sustainedly address this
issue not by heavy price increases in the non-vintage, but by moving toward more
differentiated, higher-value Champagnes (Fallowfield 2006 a; Evans 2007). The combination
of intra-industry consolidation and the need for varied product offerings create a particular
need for effective brand portfolio management. Brands in Champagne can be looked from
two perspectives: the following first looks at brand of AC Champagne itself, and the brands
of the individual Champagne producers.
Although the name Champagne itself holds unique brand value (Williams 2007 b), its
sub-brands are less known. In the nearby Burgundy, the terms Premier Cru or Grand Cru on
the bottle label carry enormous value, acting as strong indicators of prestige for the consumer
(Johnson and Robinson 2001; Robinson 2006). In contrast to Burgundy, most Champagne is
a blend of many crus and consumers remain largely unaware about Premier Cru or Grand
Cru Champagnes (Fallowfield 2006 b). To address this gap, some leading Champagne critics
have called for a reshuffle in the classification: Stevenson has called for a dozen or so
hierarchical appellations (Redman 2002), and Juhlin (2004) suggests demoting Champagne
from the Aube area to a secondary status. There has also been a recent counter-trend toward
regionality, as the big Champagne houses promote more mono-cru Champagnes (Fallowfield
2005 b & 2008 a). What is peculiar is that the effort toward finally branding mono-crus and
smaller regions has come from the large houses, although smaller grower-producers would be
optimally positioned to capitalise on this (Stevenson 2005 b). The ongoing debate about the
expansion of AC Champagne has raised some concerns regarding the long-term brand value
of the AC Champagne itself (Hickman 2007 b; Stevenson 2007).
The producer’s brand is the key determinant of consumers’ Champagne purchases
(Juhlin 2004; Fallowfield 2008 b). A prestigious etiquette creates feelings of which hedonic
consumers are willing to pay without apparent limits (Nuikki 2007; Vigneron and Johnson
1999). External cues such as packaging are seen as increasingly important, as Champagne is
becoming more popular as a gift (Boothman 2005). Consumers are not usually told when the
batch for non-vintage Champagnes changes (Juhlin 2004; Edwards 2006), and producers
create a house style that consumers assume to stay consistent and reliable through the years
(Parkinson 2006) – the consumer thus learns to trust the producer’s brand more than
anything. Veuve Clicquot herself showed exemplary branding sense when she patented the
orange colour used in her Champagne labels (Juhlin 2004); now 200 years later, anything in

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Champagne with bright orange is automatically connected to the brand (Boothman 2005).
Not all brands enjoy the unique strength of Veuve Clicquot, though, and linking Champagne
brands to other entities is seen as increasingly important for distinguishing the brand from
competition (Sheppard 2007). Table 2 presents examples of some key brand collaborations of
the leading Champagne producers.
Table 2: Champagne brand collaborations
Champagne styles (Appendix 4)
As Champagne houses are trying to make the most out of the limited grape supply by selling
more added-value products such as the vintage, there has been a pronounced move from the
dominance of the brut non-vintage toward different styles of Champagne (Fallowfield 2006
c). With current high grape prices, the higher returns from selling more premium styles of
Champagne are not only attractive for companies, but also vital for many (Fallowfield 2007
b). Appendix 4 explains the characteristics and trends in different styles.
Part II has analysed the Champagne market from different perspectives: history, sales,
macro-environment, industry environment, brands, and styles. The big picture conveyed was
that Champagne is doing very well, supply is limited, and one way to manage demand is to
shift the emphasis into more specialist value-added styles. Before linking the theory of Part I
and industry insight of Part II to the findings of the 12 interviews, Part III: Research process
explains in more depth how this research was conducted.

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PART III: RESEARCH PROCESS
The dissertation is exploratory and interpretive in nature, and based on face-to-face
interviews and analysis thereof (Sanday 1979). As it is more effective to aim the work for a
specified external audience (Shugan 2003), the target audience of this research consists of
Champagne brand managers and other Champagne industry decision-makers.
Before the interview
The researcher’s personal work history in wine industry had provided a unique opportunity to
scan the challenges and opportunities in the Champagne industry with managers – this served
as a starting point for gathering relevant information. For example, work experience at a wine
shop had suggested that consumers behave differently when buying Champagne to when
buying less aspirational products; that consumers link Champagnes to other entities so
strongly that they might ask for “the Formula 1 Champagne”; and that product lines seemed
to be proliferating.
Secondary sources for research included academic journals and books, trade reports
and magazines, and business papers and magazines. Wine industry reports and wine
magazines such as Decanter, The Drinks Business, Harpers, and Wine & Spirit were used to
identify further issues to be brought up in the interviews, helping also to put the observed
industry trends into perspective. Academic articles were also used, and concepts from
Vigneron and Johnson (1999), Dittmar (1994), and Keller (2005), among others, were used to
shape the discussion guide. Academic jargon was avoided, and rather than asking about
“Veblenian” behaviour, the interviews used more understandable wordings like ostentation,
status, and price perception to define the mentioned ostentations or “Veblenian” behaviour
(Leibenstein 1950; Veblen 1899).
The interview process (Appendix 5)
Face-to-face interviews were selected as the only source of gathering primary data. As this
research looks into the makings of a good marketing strategy, qualitative data seemed to be
more appropriate for exploring this. Interviewing face-to-face allowed for the optimal

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combination of flexibility and depth for this research. Focus groups were not selected as a
tool, since the interviewees were mainly senior managers and organising a focus group for
this sample would not have been feasible regarding their schedules. More quantitative
methods such as surveys do give differential insight, but a combination of qualitative and
quantitative methods were not feasible due to the time and scope limitations of this
dissertation. (McDaniel and Gates 2006.)
For the primary research, 12 face-to-face interviews with professionals from different
parts of the Champagne trade were conducted. Depending on how much time the
interviewees had, the length of the interviews was between 40 and 100 minutes, typically
around 50–60 minutes. Effort was made to avoid assumptions by keeping the questions as
open-ended as possible. All interviews were conducted in greater London, typically at a
conference room at the interviewee’s office or a café. Because the interview discussions did
not go into very sensitive personal areas, a completely private was not as imperative as for
other research projects.
Two managers came to the interview from Ruinart, but all the other managers were
interviewed individually; no differences in response were noted between the Ruinart
interview and other interviews. The interviews were conversational, with some freedom to
focus more on those areas the interviewees felt they had to most to say about. (Gubrium and
Holstein 2001; Hermanowicz 2002; Warren et al. 2003.)
The interviews were semi-structured, following a discussion guide with five main
areas – Champagne marketing, the Champagne market, consumer motives, linking brands to
other entities, and product lines (Appendix 5). Rather than serving as an extensive handbook
for strategic marketing, the research focused on marketing issues of particular relevance in
the current Champagne market, and the discussion topics were selected accordingly.
The discussion guide (Appendix 6)
The interviews began with an ethical disclosure that the interviews would be recorded for
personal records. The background of the interviewee(s) was also inquired to understand how
it might affect their views (Schaeffer and Presser 2003; Reynolds and Gutman 1988).
The first part of the actual interview asked open-ended questions about marketing
Champagne – this allowed the interviewees to spontaneously bring up whatever they
perceived as the most relevant aspects. To understand both positive and negative aspects, the

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interviewees were also asked about most common mistakes, whether currently or in
hindsight.
The second section discussed the Champagne market itself – how the market is and
how it differs from other markets. This included the trends, challenges, and substitutes.
The third section discussed different aspects of Champagne consumers – what roles
and occasions Champagne has for consumers, and what kinds of differences exist. The main
emphasis was on how consumers buy champagne – what aspects are important, what aspects
indicate quality and prestige, and how price is perceived (Gluckman 1990; Mitchell and
Greatorex 1989; Vigneron and Johnson 1999). Without explicitly explaining the five
discussed luxury consumer types (Vigneron and Johnson 1999), questions on private/public
motives (direction of self-consciousness), perceptions of price, imitation, and exclusivity
gave a good picture of who the consumers might be.
Brand partnerships have become very current in the marketing of Champagne
(Boothman 2005; Sheppard 2007), and the fourth section examines them as a form of linking
brands to other entities (Aaker 1997; Fournier 1998; Keller 2003). Event sponsorships and
branded bars were used as current examples of linking brands to other entities.
The fifth section discussed product lines, whether in brand extensions into new styles
or to geographical areas (Aaker and Keller 1990; John et al. 1998; Keller and Aaker 1992), or
by focusing the brand’s attention more to a certain direction (Meyvis and Janiszewski 2004).
This was to understand how to best manage the limited supply of Champagne, and what kind
of implications adding new items to the brand portfolio might have (Aaker and Keller 1990;
Day 1998; John et al. 1998).
To conclude the interviews, the interviewees were asked what advice they would give
to a new marketing manager in the Champagne sector. To end with a positive personal note,
the interviews concluded with a personal vision for Champagne.
In addition to the questions described in the discussion guide, prompting questions
were used to understand the cause and implications of the discussed matter. Prompts included
asking why; why not the other one; how; what is driving this; how sustainable is this; how
does this affect/translate into profitability; how does this affect the brand; how does this
affect the consumer; and is this specific to you or general. These prompts turned the
discussions from descriptive (what is happening) into more analytical (why it is happening)
in nature, going into higher levels of abstraction. (Hermanowicz 2002; Schaeffer and Presser
2003.)

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The interviewees
A total of 13 people were interviewed for this research in 12 sessions. Managers were better
suited than consumers to be interviewed about marketing strategies, although consumer
interviews would certainly have given further insight into how the marketing strategies were
actually perceived. To gain a more balanced view, managers were interviewed both from the
producer and the retailer side – the producers had worked with several retailers and the
retailers with several producers’ brands. Further, the retailer side was more in contact with
actual end-users, whereas the producer side might have a more coherent view of the longer-
term marketing strategies.
The people were interviewed not as official spokespeople of their representative
companies, but rather as individuals with unique experience and insight. It should be noted
that all interviewees had worked at a number of companies in the trade, and thus could also
provide insight into Champagne marketing over and above their current role.
From the producer side, managers from three grande marque Champagne houses
(Bollinger, Pol Roger, Ruinart) were interviewed, as well as a person from the leading
holding company, Moët Hennessy. In addition to these, a manager from a leading Italian
sparkling wine producer (Bisol) was interviewed, not only as a competitor to Champagne, but
also for his long tenure as the manager of Wines & Spirits floor for Harrods. Lastly, one
Champagne consultant was also interviewed to hear the views of someone who had worked
with many different sides of the trade.
o Jonathan Stevens is the Brand Manager at Mentzendorff, owner of Champagne
brands Bollinger and Ayala.
o James Simpson, Master of Wine (MW) is the Director at Pol Roger in the UK.
o Giles Henton and Max Helm are Sales Managers for Ruinart in the UK.
o Sophie Janion is a Sales Assistant at Moët Hennessy UK; despite being at a junior
position, her knowledge and experience into linking luxury brands exceed her status
o Roberto Cremonese is the European Export Manager at Prosecco Bisol Desiderio &
Figli, a leading sparkling wine producer, having also worked as the Sales Manager for
the Harrods Wine Department for six years.
o Maggie McNie MW is a long-time Champagne consultant to producers and
Champagne bodies, buyer, educator, and author of the influential book Champagne
(McNie 1999).

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The secondary data seemed to imply that certain distribution channels were more
desirable for Champagne producers than others; preferred off-trade channels were wine
merchants and high-prestige outlets, and preferred on-trade channels were restaurants and
clubs (Cawood 2007 c; Grant 2007; Woodard 2007 b). Thus, managers from these channels
were interviewed. Although supermarkets are increasingly important retail channels for
Champagne, this dissertation only interviewed managers from specialist or luxury outlets.
From the retailer side, managers were interviewed from London’s big three luxury
department stores (Harrods, Selfridges, Harvey Nichols), a leading wine merchant chain
(Oddbins), an independent fine wine merchant (Roberson Wine), and a restaurant (Harrods
restaurants).
o Dawn Davies is the Sommelier at Selfridges.
o Jeremy Lithgow is the Floor Manager for Wines & Spirits at Harrods.
o Jeremy Lee is the Wine Shop Manager at Harvey Nichols.
o Joe Gilmour is the Manager of Roberson Wine, a past agent for Champagne Devaux.
o Amelia Aragón is a Manager at Oddbins and Export Manager at Cillar de Silos, a
Spanish wine producer.
o Penny Johns is a Restaurant Manager at Harrods, having also managed a Champagne
bar and a wine merchant.
To get 12 responses, 25 companies were contacted. Some companies had a policy of only
commenting in writing; others’ managers were not available for the interview period; still
others never answered. No major trend was seen in what kind of companies either accepted
or rejected the invitation. The standard approach email is shown in Appendix 6.
Analysing the interviews
After the interviews had been completed, they were personally transcribed into written form.
As in interpretive research, the data was observed, selected, coordinated, and interpreted by
the researcher (Sanday 1979). Spiggle’s (1994) guide was used as a basis for disaggregating
the analysis and interpretation of the qualitative research data into separate operations.
The first step in analysing the data was categorising it. As the discussion guide for the
interviews included five topics, data was labelled and codified along these lines (Lincoln and

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Guba 1985; Weston et al. 2001). As some comments referred to more than just one specific
area, the data was categorised using both deductive and inductive methods (Spiggle 1994).
Closely following the categorisation, the data was then abstracted into fewer, more
general categories to enable comparison of common features (Spiggle 1994). Comparing the
comments of the different interviewees helped to understand how the views of interviewees
from different parts of the trade differed, and what views were shared across the sample.
Comparing the findings of previous interviews also served as a tool for refining the
subsequent interviews to address the most interesting aspects (Lincoln and Guba 1985).
Where applicable, the data was dimensionalised in the relevant categories to empirically
clarify how the perceptions and views of the interviewees from the various professional
backgrounds differed (Bagozzi 1984; Spiggle 1994). For this, a basic codebook was used
(Appendix 7). Because the interviewer and analyser was the same person, and because the
sample size of 13 was too small for valid empirical quantitative analysis, the codebook was
very bare. The codebook did, however, enable detecting where the retailer/supplier side or
the senior/junior interviewee answers differed. MacCoun’s (1998) article on biases was used
to scrutinise the findings. (Weston et al. 2001.)
To gain a more coherent understanding of Champagne marketing, the findings were
then integrated in respect to different interviews and the relevant academic and trade
literature. Identifying where strategies, contexts, and outcomes were linked enabled the
construction of a framework for key findings from the data. (Spiggle 1994.)
In this process, the already collected data was iterated by revising the previous
interpretation of the data – hearing the views of others puts the first view into perspective and
aids induction (Spiggle 1994). The data was also refuted with inherent scepticism toward the
researcher’s own findings and ideas (Strauss and Corbin 1999).
Interpreting the interviews
Whereas data analysis is about manipulating it into more actionable forms, interpretation is
making sense of it through more abstract conceptualisations (Spiggle 1994). When going in
depth in interviewing Champagne trade professionals, years of work experience in the
industry benefited the researcher essentially in interpreting the interviews. For instance,
expressions such as “the Cristal crowd”, or “the yellow label drinkers” have specific
stereotypical connotations in the trade. Further, understanding the dynamics of the trade and

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37
the orientation of different Champagne houses, channels, and consumers gave more meaning
to some references in the interviews.
Some sales figures or potentially offending views of rivals were asked not to be
quoted, and were consequently not transcribed. Not disclosing some exact figures or
wordings in the few instances that this was asked was not likely to have a large impact on the
validity of the interpretation – the aim, after all, was to understand what those figures or
attitudes mean, not dwelling on exact figures for their own sake. (Spiggle 1994.)
Having explained the methods used in the research process, the results of the 12 interviews
will be presented in Part IV: Findings and analysis. As typical in qualitative research, the
findings are reported together with analysis.

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PART IV: FINDINGS AND ANALYSIS
The general feel from the interviews was that Champagne has done very well as a whole –
the main concern from the producer side was managing demand, rather than creating it. It is
natural that the producers’ views differed from those of the retailers in some area, as they had
the possibility to observe the dynamics of multiple retail channels. Similarly, retailers had the
possibility to observe the brands of multiple producers. Regarding the compatibility of the
findings with the theory of Part I, the behaviour of Champagne consumers seems to have a
better fit with luxury consumer behaviour than wine consumer behaviour; although this is not
to suggest that these areas of study would be by any means mutually exclusive.
The following discusses and analyses the findings of the interviews thematically,
loosely following the structure of the discussion guide. For reasons of research ethics, the
exact interviewees will not be identified; rather, they will be referred to as PSIs (producer
side interviewees) and RSIs (retailer side interviewees).
Marketing Champagne
In marketing Champagne, two issues rose above others in importance: visual branding and
distribution channels. Visual branding, through packaging, often determines the consumer’s
choice of brand at the point of purchase; and the channels themselves actively shape the
consumer’s perception of the brand. Brand awareness is also seen as crucial for consumers
due to the brand’s multiple roles as a source of familiarity, a social class cue, and indicator of
wealth and status through a known price.
There seems to be a fine balance between high brand awareness and the image of
exclusivity. One PSI sees their brand as the “best kept secret in Champagne”, but continues,
“We’d like, though, this secret to be shared with a few more people.”
It is important to note that what drives short-term seasonal sales is very different from
what drives longer-term sales. In the short term, new packaging and press coverage are major
forces driving the lifestyle-driven consumer, and wine press and retail endorsements are
major forces driving the quality-driven consumers.
Over the longer term, the quality of wine becomes a more critical factor – “unless you
have a monster budget” (PSI). In addition to quality, integrity and consistency are seen as

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crucial for the build-up of reputation. Consistency refers especially to the positioning as a
luxury brand, avoiding the brand-damaging discounting and over-exposure in the wrong
channels. A good long-term strategy also targets the future generation of consumers, in
addition to the current drinkers.
Marketing mistakes
Asking the interviewees to reflect on the past with hindsight allowed for identifying some
key mistakes brands have fallen victim to. The main mistake for brands is choosing the
wrong channels, leading to over-exposure in a low-prestige environment and aggressive price
promotions. A PSI crystallises it: “If you say you’re the best, stand by it”. The combination
of poor channel management and uncoordinated pricing is especially detrimental for the
perception of quality. Pushing for higher volumes through supermarket promotions has
implications both on the supply and demand side: “on the supply side you have to stretch the
quality of your product, and on the demand side you have to burn brand equity to build your
market share” (PSI).
Another looming threat is forgetting or alienating the core consumer, often by
excessive preoccupation with the prestige niche products. Rapid price changes and
turnarounds in packaging may create a short-term buzz, but may come on the expense of the
loyal core consumer.
A third threat is complacency. The Champenois have been on the top for so long that
few appreciate the massive educational task there is if consumers are to be educated to trade
up to the higher value-added styles.
The Champagne market
When asking how the Champagne market was, “buoyant” was the word most often used to
describe it. It is also seen as very dependent on the economy, as Champagne is to first wine to
go with the tightening of the belt.
Different rules seem to apply to wine and Champagne markets, as one PSI notes: “We
as a trade have set ourselves apart from wine – the sort of consumer who spends £5 on a
bottle of wine is happy to spend £35 on a bottle of Champagne. It constantly amazes me”.
Consumers are unlikely to compare Champagne to wine in terms of value for money, because
they have been taught that Champagne is the only beverage for certain occasions. The sound

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40
of cork coming off has an effect on people, and bubbles make it harder for consumers to
evaluate Champagne’s vinosity. Any threat of substitutes is at the very lowest end of the
Champagne market, to the inexpensive own-label Champagnes. It is peculiar that although
Champagne was seen to be at least as much a luxury as a wine, not a single interviewee
suggested that other non-drinkable luxury items, such as shoes or handbags, could be a
substitute for consumers.
The market is also highly stratified between brand-loyal people – consumers drink the
brand rather than the wine. “The idea of the brand is important for the majority of people”,
one RSI notes; “it could all taste the same and people would still be brand-loyal.”
The Champagne market is often viewed as four major price brackets: the value
Champagnes below £25; the grande marque non-vintages at £25–£40; the sparsely populated
specialist range of £40–£70; and the prestige cuvées from £70 upward.
The Champagne consumer
The Champagne market seems to incorporate all of Vigneron and Johnson’s (1999) luxury
consumer types, and bandwagons form the bulk of the market. Especially the RSIs see the
consumption of prestige cuvées as very ostentatious: “Quite frankly, if they burned £100 and
everyone was watching them, the same social function would be fulfilled.” The brands see
their consumers more as more hedonist types who do not have to prove themselves to others
– the PSIs’ perception of the consumers’ direction of self-consciousness is not as strongly
external as the RSIs’ perception. There is also a small market niche of snob and perfectionist
consumers, who may also collect Champagnes.
Inter-personal motives seem to be more important for most consumers, as the visible
external aspects of Champagne brands are easier to understand. The risk is, however, that
consumers with a purely public focus of self-consciousness will not become as emotionally
attached or brand loyal as other consumers: “The Chinese and Japanese don’t really like
Champagne, but they like the idea of being seen drinking Champagne. So the risk in those
markets is that you’re not going to get a regular consumer” (PSI).
The retailer side interviewees observed that consumers seem to follow a certain
pattern of consumption sophistication, trading up from the push-marketing bandwagon
brands such as Moët & Chandon or Veuve Clicquot to discover more discrete niche brands
such as Ruinart, Gosset, or Billecart-Salmon. One SSI describes this brand progression as a
form of social advancement: “People, who mingle in social circles, evolve. They might start

Tarvainen (2008)
41
off with Veuve Clicquot until someone turns up his nose up on it – that’s a Kensington thing.
In the world of luxury, everyone likes to turn up his nose to something.” It was intriguing to
learn that consumers trade up from one brand to another rather than within the same brand’s
products, indicating that consumers might use the producer’s brand rather than the wine style
for signalling social status and locating others in the social hierarchy (Dittmar 1994).
Although the consumer might trade up to slightly more niche brands, the bandwagon motives
of signalling belonging to a certain group seem to remain the same (Liebenstein 1950;
Vigneron and Johnson 1999).
Champagne is still a celebratory occasional drink for consumers, but increasingly
being consumed throughout the week. It is not only drunk on special occasions, but also to
make occasions special. The growth in smaller is expected to bring about new drinking
occasions, but Champagne’s role as a food wine is likely to remain small.
Purchasing Champagne
Visual branding seems to be the key for purchasing Champagne – and brand loyalty is
directed more toward what the brand looks like than what it tastes like. Much Champagne is
being bought as a gift, and consumers want packaging to communicate a high price. Most
successful offerings combine the important quality assurance of the brand with the
excitement of the packaging. Accessibility is seen as contributing to Champagne’s success –
compared to other luxury items such as sports cars, Champagne is a more affordable but
equally visible statement of luxury. In effect, Champagne enables communicating wealth
without having to us too much of it – this behaviour is what Veblen (1899) calls “pecuniary
emulation”. The role of the brand for Champagne converge suggests purchasing Champagne
is more like buying a luxury product than wine; the brand’s personal role a source of
familiarity (Gluckman 1990; Mitchell and Greatorex 1989) is not as important as its
interpersonal role as a strong communicator of social class (Dittmar 1994) or power through
wealth (Veblen 1899).
Price is also a major consideration in purchasing Champagne, but different consumers
react very differently to pricing. The lower-end consumers are more price-sensitive, but the
higher end purchases prestige cuvées almost solely because of their price signal, especially in
nightclubs. This strongly supports a key trend that emerges from the interview data – non-
vintage consumers are typically bandwagons whereas prestige cuvée consumers are
Veblenians.

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42
In more specialist venues, staff can shape consumers’ preferences, but for most
consumers, the inside of a bottle is less important than the outside. One RSI puts it quite
blatantly: “(The consumer) will stand in front of you and say that (quality) is not as important
as brand recognition. In essence, what they’re saying is, “What’s on the surface is more
important than what’s in the bottle.” Depending on the consumer, other important
considerations when buying include peer pressure, perceived exclusivity, recommendations
and endorsements, promotional deals, and personal taste. It seems that the purchasing process
for the bandwagon and the Veblenian consumers is more clearly defined, whereas the factors
affecting the brand choice for the perfectionist and snob consumers are more intricate.
(Leibenstein 1950; Vigneron and Johnson 1999.)
Indicators of quality and prestige
The Champagne market differs dramatically from the wine market in that the product’s
quality is judged much less on the actual taste than external cues such as brand and price.
When asked how consumers judge the quality of Champagne, one RSI simply answered, “I
don’t think they do judge the quality of Champagne.” Even to many who do judge the
quality, it seems to be very hard to assess. Packaging enhances the quality perception – if
money is invested in the packaging, consumers expect the wine to be worth that packaging.
Personal or wine press endorsement is only important for some consumers.
The main indicator of prestige is price, especially at the top end of the market. Many
even noted increases in demand when the price of a prestige cuvée was increased; this
converges with Leibenstein’s economic models of the Veblenian consumers. The second
prestige cue is packaging – and prestige cuvées practically always come in large boxes. For
lesser-known brands, salesperson endorsement can enhance the prestige perception, but for
the more established brands, celebrity endorsement is a stronger indicator of prestige.
Limited availability can signal prestige to some consumers; these are mainly snob consumers.
(Liebenstein 1950.)
Linking brands to other entities
Linking brands to other entities through partnerships is seen as a good way to market a
product. Crucial for successful brand partnerships is a compatible customer lifestyle and a

Tarvainen (2008)
43
similar level of luxury. Exclusive collaborations can drive press and differentiate the brand in
the short term, but the long-term sustainability of brand partnerships is seen as unproven.
Champagne brands are most often linked to people. One PSI describes a high-profile
prestige cuvée campaign with a famous supermodel as “elegant, sophisticated – a real fit”,
and for another PSI, associations with the British royal family drive differentiation globally.
However, brands such as Cristal can lose control of their marketing through overtly strong
associations with certain people.
Consumers also associate Champagne brands to distribution channels: one PSI
describes channels as “very, very strategic” for their brand. Branded bars, especially at luxury
department stores, have more potential in terms of PR and sales – they can be effective
marketing tools as long as they have some rarity value.
Consumers associate the distribution channel to the brand, but brands can also be
linked to events such as product launch parties and event sponsorships. Sponsoring events is
exclusively about creating awareness among a selected audience; launches can also nurture
relationships with existing customers. Carefully selected sponsorships can even enhance the
brand’s quality perception.
Product lines
There is a clear trend toward diversification toward more specialist styles in the market, and
there are sound reasons for producers to diversify. As the mass-selling non-vintage is the
entry-level Champagne for any brand, diversification always means higher value. Product
launches can create a positive buzz around the brand, and having more styles allows targeting
more consumers with the brand.
However, significant risks accompany extending the brand into new styles. A vast
product offering might confuse the core consumer through brand dilution, price confusion, or
over-exposure in availability. To avoid these risks, companies should make a clear distinction
between their core product line and the extensions. One PSI had very positive experiences of
streamlining the product offering: “Now that we’ve removed the … vintage, life’s gotten a lot
easier for us.” A RSI describes selling smaller styles as “an uphill struggle”; they require
educating consumers about the benefits, and no brand loyalty is guaranteed when consumers
trade up.
Vintage Champagne is the logical trade-up from non-vintage, as prestige cuvées are
typically several times the non-vintage’s price. The vintage category has been squeezed

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44
between the non-vintage and prestige cuvée, and lacks the typical customer profile. The
consumer does not understand the value proposition of the vintage Champagne – more than
one interviewee mentioned that Bollinger’s vintage La Grande Année became much easier to
sell after it was positioned as a prestige cuvée. Many interviewees mentioned the vintage
Champagne as offering “the best value”, and these could potentially be targeted more toward
the perfectionist consumer. (Vigneron and Johnson 1999)
Prestige cuvées do not only create profit and allow targeting the highest consumer
segments – they can symbolise the house’s values to the consumer and build the mother
brand. A prestige cuvée can represent the brand’s history, highest-quality winemaking, or
what one PSI describes as “ultimate luxury”. The perceived link between the prestige cuvée
and the mother brand is weakening, and they are increasingly being marketed, sold, and
perceived as stand-alone brands. “It might be that the prestige of their prestige cuvées spills
over to their regular brands”, says one PSI, “– but how much, I’m not sure.” Overall, the
suggestion of Simmons et al. (2000) of lower-established brands benefiting from a
commonality with a higher-established brand are not seen to be as common as might have
been assumed.
Most consumers do not seem to mind less scarcity in this growing sector so long as
the prices and image are exclusive – this is more Veblenian than snob behaviour (Vigneron
and Johnson 1999). There is, however, a small but clearly defined sector of snob consumers,
to whom very limited edition cuvées might send a well-targeted message: one brand’s
limited-edition prestige cuvée is “very much about making a statement about the traditional
vineyard focus of (the producer), and that’s really all it is. It makes a statement to … 0.001%
of the (the brand’s) consumers that (our brand) is a traditional, vineyard-focused producer”
(PSI). A perceived drop in the quality of some prestige cuvées may cause some longer-term
implications, as might their wild proliferation from lower-level producers.
A new direction for Champagne brand extensions is the new world – this is natural as
most new world sparkling wines imitate the Champagne style. A new world expansion may
offer a chance for the mother brands to leverage some of their prestige on sparkling wines,
but consumers do not perceive this link to the mother brand to be strong. The clearly different
price points and target markets limit the risk of brand dilution, and some see the expansion
into the new world as sounder in the long term than an expansion of the delimited
Champagne appellation.

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45
Perception differences
By and large, the interviewees had very similar perceptions of marketing Champagne, the
market, and the consumer. Some differences between the perceptions of the PSIs and RSIs
did, however, exist. It is important to note that these differences are by no means
contradictory or incompatible; they merely bring out different sides of the underlying
phenomenon. Table 3 summarises the areas where differences in the PSI/RSI perceptions did
exist and what the perceptions were. It should also be noted that the sample size for people
representing each side of Table 3 was very small and many people had worked on both sides
of the trade – thus the table does not imply an exact statistical difference in the perceptions,
but merely identifies possible locations of bias. The PSIs tended to be even more wine
connoisseur types than the RSIs; thus they might have projected some of their own values on
their consumers. This was taken into account in the analysis and recommendations.
Table 3: Interviewee perception differences by role in the industry

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46
Validity and reliability
Validity is the extent to which an instrument measures what it claims to measure, in terms of
internal validity or credibility, and external or transferability. Internal validity measures the
extent to which conclusions about cause-effect relations are likely to be true, including how
well selected measures match selected conceptualisations (Neuendorf 2001). External
validity measures the extent to which the findings can be generalised to other settings.
Reliability measures the consistency of the measuring instrument. (Kassarjian 1977; Lincoln
and Guba 1985)
This report used interviews as the only method in primary data gathering, and
excluded customers from the interviews, which were conducted in one geographical location
and within one month. Although customers were excluded from the interviews, the long
experience of most interviewees had given them insight on how consumers were likely to
react to marketing efforts. Although consumer motives and perceptions were speculated on,
what is crucial for marketers is how the consumers react in terms of sales.
All the interviews took place in London, and eight of the 13 interviewees were
British. The UK, however, is the largest export market for Champagne at almost twice the
size of the second-largest export market (Straker 2007 a), and the international character of
London brings UK managers in touch with international customers. These factors mean that
the findings might be generalisable to other export markets to some extent, but the
dissertation is most suited for UK brand managers.
The interviewees, both from the supplier and producer side, represented high-end
brands and channels; no own-label producers or supermarket managers were interviewed.
However, the market share of own-labels in the UK was only 4.3% and decreasing in 2005,
and big brands dominate the market (Mintel 2006). The results here might not be fully
transferable to the lower-luxury parts of the trade.
Off-trade represents 55% of the UK Champagne sales by volume (Mintel 2006), and
more interviewees from the retailer side were from the on-trade side rather than the off-trade.
However, much of the wine merchants’ business was with on-trade customers, and brand
managers collaborated closely with the on-trade as well.
It is important to note that when the interviews were conducted in February and
March 2008, there was great ambiguity surrounding the future of the global economy (Giles
2008). Speculation on the economic threats and opportunities to the Champagne market was
rife within the wine business in spring 2008, and the first major articles highlighting this risk

Tarvainen (2008)
47
to Champagne started to come out only weeks the interviews (e.g., The Economist 11 Mar
2008; Straker 2008; Williams 2008). Although the views of many interviewees might have
changed somewhat during the spring 2008, the interviews focused more on areas on which
the interviewees’ views are more likely to remain reliably stable, such as consumer
behaviour, brand management, and product lines. The seasonal effect is not likely to have
played a crucial role, as the questions concerned long-term issues.
Including the years worked in the industry as one codebook variable gave some
insight into how the perceptions of more junior interviewees differed from those of more
senior interviewees (Table 4). The mood among those who had experienced the boom and
bust of 1999–2000 was somewhat cautious, even more so among those who had experienced
the crisis of the early 1990s. These differences were taken into account in the data analysis
and interpretation.
Table 4: Interviewee perception differences by experience
Because the same discussion guide with the same open-ended questions was used for
the interviews, the differences in findings are more likely to reflect an underlying trend rather
than merely the interpreter’s bias. Especially with the producer side interviewees, there was a
predictable tendency of portraying one’s own brand and customers in a good light, and this
bias was addressed by asking them to describe the brands and consumers of others as well.

Tarvainen (2008)
48
One interviewee puts this explicitly when asked about internal and external motivations for
purchasing Champagne: “We would like to think that our consumers purchase on the basis of
inherent quality, but I suspect that most of them buy because of external reasons.”
It is also important to note that the researcher himself is an active Champagne
consumer and personal bias is naturally an important issue. The researcher’s own preferences
toward connoisseurs’ Champagnes and snob and his perfectionist-type luxury consumer
behaviour were recognised and addressed – even more self-critical scrutiny went in the areas
where the researcher was highly opinionated as an individual. (Neuendorf 2001; Whittemore
et al. 2001.)

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49
PART V: RECOMMENDATIONS
Understanding the views of the interviewees and analysing them in the light of relevant
theoretical and industry knowledge has given rise to four recommendations on areas where
Champagne marketing could generally be improved on. Branding the mid-sector of the
Champagne market is imperative if producers are to get consumers to trade up. Tailoring the
offering to the customer’s values enables targeting the marketing message more directly to
the right consumer. Communicating the speciality is important for markets where consumer
knowledge of the product is very low. Finally, sending a consistent message builds the brand
in the long term.
Brand the mid-sector
The non-vintage and the prestige cuvée are the two clearly understood styles, and value
propositions of these styles are quite easy to communicate. Although rosé is growing, most
rosé Champagne falls into the non-vintage and prestige cuvée brackets; Laurent-Perrier
Cuvée Rosé Brut and Dom Pérignon Rosé are arguably the most visible sector leaders. Mid-
sector Champagnes are mores specialist cuvées, such as the vintage.
The interviewees described the £40–£70 mid-sector between the non-vintage and
prestige cuvée as the hardest sector to market; it was even described as a “no man’s land”
(RSI). The findings show that consumers are very much driven by visually recognisable
brands throughout all Champagne styles and price points, but the mid-section has a striking
relative absence of strong brands. Moët & Chandon’s 2007 re-branding of Brut Impérial
Vintage as the Grand Vintage could be seen as an early-mover attempt to brand this sector
more strongly (Schmitt 2007 b), but other examples are few and far between.
Although the much-discussed consumer education about other styles is undoubtedly
very important, branding the mid-sector with clearly defined wine identities is likely to have
a more direct appeal to Champagne consumers. Having the same product name for a house’s
non-vintage and vintage (e.g., Brut Impérial and Brut Impérial Vintage) does not indicate a
higher level of prestige for the vintage wine, nor does it strongly indicate superior quality to
the consumer. More distance should thus be created between the non-vintage and vintage
brands to support the vintage brand’s value proposition of superior quality and prestige.

Tarvainen (2008)
50
The most important aspect in branding the mid-sector is creating more distinct
packaging to support a strong visual brand image for the vintage wine. Consumers are loyal
to how the brand looks like rather than how it tastes; thus the wine’s visual image should both
communicate the reputation of the mother brand and signal superior quality and prestige to
the consumer. One good way to signal this is packaging. By introducing the larger gift box
for the 1999 La Grande Année, Bollinger wanted to signal to consumers that the wine was
competing in the prestige cuvée category, rather than with mere vintage Champagnes (PSI).
The findings suggest that consumers trade up from one brand to another rather than
within a brand; a stronger brand image for the mid-sector wines would be the first step of
closing this gap of defecting customers. In advertising the wine, the value proposal of
superior quality and prestige can be reinforced by creating and communicating the new usage
occasion for the wine.
Tailor your offering to your customer’s values
Understanding the main values of the core consumer enables targeting the marketing message
to the consumer more efficiently (Guido 2006; Vigneron and Johnson 1999 & 2004). Every
retail manager interviewed mentioned Veuve Clicquot as a company with consistently
excellent marketing campaigns; the brand fits neatly into the bandwagon category, and the
brand’s signature yellow colour can now be extended to innovative and fun packaging ideas.
The yellow colour, patented hundreds of years ago, has become an unbeatable “branded
differentiator” (Aaker 2003; Juhlin 2004). Veuve Clicquot is a good example of brand whose
visual image and marketing activities are clearly targeted to their core consumer type, the
bandwagon. (Liebenstein 1950.)
Not only do different brands appear more compatible with the luxury consumer types,
but also with different Champagne styles (Table 5). By recognising the primary luxury value
the brand’s customer seeks, marketing communications and new products can be tailored to
that customer. The houses established hundreds of years ago usually have a clear identity and
have found their loyal customer type, but now that many are introducing new styles, some
clashes are happening.
One example of such a clash is the Trilogy. The Trilogy is a range of three single-
vineyard Champagnes from Moët & Chandon, i.e., a snob-appealing range from a leading
bandwagon producer. One RSI puts it very clearly: “Veuve Clicquot and Moët & Chandon

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51
represent the mass-market, commerce-driven side of Champagne, and so their single vineyard
wines would be hard to sell”.
Table 5: Consumer types and Champagne
Communicate your speciality
Consumers seem to take Champagne’s special role as the celebratory beverage for granted,
without analysing the actual quality or value of the product too much. This is very well as
long as the economy does well, but marketing Champagne as merely an occasional drink
exposes it to economic volatility much more than any other wine. It is thus important to
clearly communicate what makes Champagne different from other wines, and also what
makes a particular brand or cuvée different from others. When a brand is better understood
by a consumer, a stronger emotional tie can then be built between them.
Those interviewees with more experience in the market suggested that
communicating the speciality of a Champagne’s quality sets the brand on a firmer basis. This
is consistent with the retailers’ desire for the houses to participate in educating the consumer
about the virtues of higher-value styles. It is not enough to propose that some difference
exists – the difference should also be understood to add value by the consumer. Lanson’s “Un
style unique…” marketing campaign has not been a success, not least because the proposed

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52
uniqueness is presented in such vague terms that consumer does not understand what value
this adds (Godsell 2007; Lanson 2007). In contrast, Veuve Clicquot’s “The season”
campaigns communicated clearly the social value of having fun and belonging to a social
group (Boothman 2005; Clicquot 2007).
When demand is booming, houses can manage without feeling the pressure to educate
consumers about their speciality. But, as one PSI puts it, “[the Champenoise] have been on
the top for so long that they don’t realise what an enormous educational problem there is.”
Send a consistent message
To build the brand in the long term, it is important to send a message that consistently builds
the consumer’s perception of the brand. The brand’s message should be consistent with
regard to three key areas: pricing, distribution channels, and the product line.
The findings show that for most Champagne consumers, price is a stronger indicator
of quality and prestige than even the taste of the product. Thus, even if a product’s actual
quality would stay the same or even improve over time, exposure to price discounts can still
weaken the product’s perceived quality. As perceived quality is a key component of a brand’s
long-term success, diluting the message of superior quality through price promotions is a
serious threat indeed. Successful promotional campaigns differ from unsuccessful ones in
that the successful campaigns increase the perceived value, whereas the unsuccessful
campaigns typically decrease prices.
Distribution channels are strategically very important in managing the brand’s long-
term image. Presence in high-prestige on- and off-trade venues can increase the prestige of a
product, as consumers make an association between the brand and other entities very easily
(Simmons et al. 2000). Similarly, over-exposure at low-prestige venues such as corner stores
or supermarkets can damage the perception of exclusivity.
It has become clear that getting consumers to trade up is important in managing the
currently surging demand for Champagne. Adding new products to the product line can allow
for targeting more consumers, but a proliferating product portfolio can also dilute the mother
brand and confuse the consumer. The findings suggest that it is important to make a
distinction between the core product line of the brand and add-on products. Perhaps brand
managers should look into the fashion industry, where Armani has had great success in
managing five clearly distinct Armani sub-brands, each with a clear offering to a well-
defined target audience (Michaels 2008).

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