When Only the Best Will Do

Tuesday, May 1, 2007 - 11:38

When it comes to successfully marketing a premium brand or product, advertising is rarely an option. Instead it's all about networking. Chris Sheedy reports.

Soon after Carole Renouf assumed the position of Director of the Garvan Research Foundation, she was faced with a challenging conundrum. A major part of her job description was to raise money for the Garvan Institute and to inform and educate the public about the role the institute plays. But many of the Garvan's main donors, research had shown, had a different point of view.

"We discovered there are very defined parameters around a premium brand, like Garvan, beyond which you cannot stray," Renouf says. "One of those parameters is that our donors see Garvan's integrity as partly being due to the fact that we are very low-key, we don't do things like advertise and we don't hold big public fundraising campaigns.

"Part of our brand footprint is that quiet excellence. So then, how do you get the word out there? An added challenge was introduced when our donors told us another of their expectations: because they have aligned with us and because we are a premium brand, they like us to be known and recognised by their friends."

Renouf's challenge is one that faces nearly every premium brand, and in an increasingly wealthy society there are more of these brands than ever. While many mainstream brands have developed offshoot products and lines in order to cash in on the trend towards more luxurious items, as soon as too many people know about the products, and the minute they become readily available to a broad consumer market, they're no longer seen as premium.

Living up to the brand image

Jenni Romaniuk, head of the Brand Equity Research Program at the University of South Australia's Ehrenberg-Bass Institute for Marketing Science, says premium brands share several traits. "The four key dimensions are: 1) the brand or product is priced higher than other products; 2) it's unique and distinctive and offers something you can't get anywhere else; 3) it is of excellent quality; and 4) it represents sophistication and is usually linked to glamorous people. A fifth element that is sometimes added is the idea of exclusive distribution - prior to the growth of the prestige market, premium brands were brands only a few people could get."

A recent argument among Romaniuk's colleagues about whether Revlon, for instance, was still a premium brand, was solved after a survey in which respondents confirmed that Revlon is, most definitely, not a premium brand. Many respondents gave the reason that it's widely available, one pointing out that Revlon is available in Kmart.

So how does a brand manager build their client base at the same time as protecting the brand's all-important image? For Renouf the solution has been to embrace the restrictions and use the Garvan Institute's prestigious image to guide everything she does.

"You have to use the understanding of what the premium brand is as your lodestar," Renouf says. "You must use it to guide everything you do, not just your marketing activities. You have to penetrate through the entire organisation. When I recruit staff I use that same lodestar: I will not recruit somebody who does not measure up to the Garvan brand qualities."

Renouf says typical mass marketing methods will never work for the Garvan. Far more important is networking with individuals of high net worth, but not just anybody with money. Renouf further narrows her donor market to only include people and organisations who are good matches with the Garvan brand. "There are only a certain number of people who have the mindset to support medical research," she says, "and within that group there's a subset who want to support the best in medical research - that's who we have to target through networking and direct mail."

Colin Kelly, Regional Director Asia Pacific for Rolls Royce Motor Cars, has a similar opinion. His organisation annually sells just 800 cars around the world, and each of these automobiles is worth around or over $A1 million. The Rolls Royce brand is the very epitome of premium.

"We're dealing with ultra high net worth individuals," Kelly says. "They're worth around $US30 million in cash plus other assets. When you're marketing to these people it isn't about mass advertising, it's about networking and personal contacts. They are, by nature, very busy. They don't just wander into a showroom, you've got to go and find them."

An average Rolls Royce buyer, Kelly says, is in their early 50s (but can range from late 20s to late 70s), typically owns five or six cars, loves beautiful things and prefers the best in terms of quality and craftsmanship. Most importantly, they love cars and can afford the best.

Finding the worthy

The dealers that Rolls Royce chooses to sell their products to are extremely successful in their own right and therefore mix with high net worth individuals on a regular basis. Their clients are their friends, colleagues and fellow businesspeople. Advertising to a wider audience, therefore, would be pointless.

"Our new dealer in Beijing is very well connected with people both in government and in private business. So we might do something like organise a dinner for his contacts with the chairman of Rolls Royce, or with the regional director, or someone from the design team," Kelly says. "Quite frankly, his contacts don't need us to buy them dinner, but we're offering them a unique opportunity to meet someone they wouldn't usually get the chance to meet, and if they want to have a look at a car then that's fine, too."

Not just anybody with cash is allowed to buy a Rolls Royce, though. There is a great chance of brand damage if the wrong person, "a gangster or thug," Kelly says, is seen using their product. But fortunately for the company, the fact that a Rolls Royce automobile makes such a grand public statement means people who have a reason not to attract attention usually stay well away.

The danger of brand damage is also front of mind for the marketing team at Diageo Australia, whose premium alcohol lines, such as Tanqueray No. Ten and Johnnie Walker Blue Label, have been gaining market share in recent years. Marketing Manager (Scotch and Bourbon) Jonathan Curnow, says success in marketing is all about behaving in a premium manner.

"We're positioning Johnnie Walker as premium at every level that it operates," Curnow says. "If you look at the difference between mainstream brands and Johnnie Walker, you should see that we are behaving in a way that anchors our brand in a premium consumer mind space."

Curnow refers to a recent campaign in Johnnie Walker's extensive sponsorship of Cricket Australia. On-pack promotions offered winners the chance to receive upgraded tickets to cushioned seats with a better view of the game, plus access to a Johnnie Walker lounge inside a marquee, with plasma screens, music and Johnnie Walker drinks.

"Not many brands operating in cricket could have done that," Curnow says. "We created a premium version of cricket without going all the way into the corporate boxes, which would have taken Johnnie Walker to a level away from where we wanted to be."

Like Rolls Royce, Johnnie Walker Blue Label, at around $300 per bottle, is never advertised. Instead it operates in the exclusive arena of high-class bars and hotels. "The marketing we do is more about distributing the brand to the right places and having it endorsed by the right people," Curnow says. "We also do tastings with journalists and use PR to drive imagery around Blue Label. That drives a halo effect across the entire brand."

Diageo has also launched the biggest training program in the drinks industry, teaching on-premise staff about the company's brands and about mixing great drinks. "It helps the industry," Curnow says, "and we benefit when bars are better. After all, that's where people try new drinks."

Loyalty to premium brands

Plenty of research has been done into consumers' loyalty towards mainstream brands, but what about premium brands? Jenni Romaniuk, head of the Brand Equity Research Program at the University of South Australia 's Ehrenberg-Bass Institute for Marketing Science, shares her knowledge.

"The interesting thing we found from a loyalty perspective is that there's actually more loyalty to the sub-segment of premium brands. In other words, if you buy a premium brand then you're more likely to buy another premium brand, but it doesn't necessarily mean you'll buy the same premium brand.

"Work has been done, for example, in the car market that shows if you buy one luxury car you're more likely to buy another luxury car next time, but not necessarily more luxurious and not necessarily the same brand. So it's not that you're more loyal to Mercedes, but you're more loyal to buying something around the same price range.

"Most often a prestige brand is a special occasion purchase and is linked to that occasion - champagne is a classic example. So a marketing professional can strongly link their brand to that occasion, but how you do that is a different issue. If you don't reach potential buyers, however, you're not even thought of as an option."