Branding: a lure and a seed
Last week I gave a presentation to the Canadian Duty Free Association on modern approaches to creating value. The point that I aimed to communicate was that traditional marketing tactics often do not create much long-term value unless they emanate from a brand focus, which is comprised of a name, a benefit and a supporting narrative.
To help explain the principles I often use the metaphor of a fishing lure. In order to catch fish the hook has to be sharp (i.e. it has to be focused) and it has to be appealing to the fish (by communicating a benefit). However, this metaphor doesn’t help explain why approaches like price promotion that increase sales in the short run, do little to create brand value.
Which are quality and which poison?
The evening before the presentation I met Burt Stewart of The Patrón Spirits Company who hosted a reception at the Mesa Grill in Caesar’s Palace. He told the story of how he was their first employee about 20 years ago when the company was started and how they have come to dominate the “ultra premium tequila” category.
If you visit a grocery store in Mexico you find dozens of makes of tequila, most costing between $5 and $10. Most taste equally good or awful depending on your palate. It is difficult to tell the difference between those that are high quality and those that are near poisonous.
Patrón Tequila has risen above the rest and is well known to youth far and wide. A catchy song, Patrón by the Paradiso Girls, has risen to the top of the club charts with lyrics that include a chorus of, “I’m on Patron Tequila… We goin’ all get real drunk tonight… Imma have you so f***** up!” OK, the lyrics are risqué but they have helped the brand achieve cult status amongst clubbers and rappers.
How have Patrón achieved this? Well, not by owning agave farms and a tradition-steeped distillery. For the longest time Patron did not have any production facilities. And, not by running aggressive price promotions, as the product sells for about twice the price of most of its competitors.
When John Paul DeJoria and Martin Crowley formed the company they used the same techniques they had used to build the hair care company, Paul Mitchell Systems. Consciously or not they created an effective brand focus with a well-differentiated positioning and supported by an appealing narrative.
To use another metaphor, the brand focus they created was like a seed that has taken root in popular culture, and though clever promotion and a lot of luck, it has become part of the conversation and is growing at a phenomenal rate.
A product can become part of the conversation if it has sharp brand focus, like a fishing lure, and like a seed, take root and grow as part of the cultural conversation. Unfocused tactical approaches might sell in the short run but they will never grow in the long run.