The ethics of marketing wine

Are we on the horns of a dilemma?

During his travels through space, Arthur Dent, the central character in The Hitchhiker’s Guide to the Galaxy, comes across a planet that had just managed to get rid of those elements of the population considered useless. A story had been invented that the planet was about to be destroyed by a comet, and two very large spaceships had been built. The population was then divided into two. Those deemed surplus to requirements – which, as I recall, included hairdressers and marketing people – were fired off to an uninhabited planet some light years away.

A while later the hitchhiker happened upon this planet where he found some marketing people having their hair cut. They appeared to be thriving (and had great hair) but after a while he realised that he could see no evidence of the wheel. It was pointed out to him that they had developed the capability to build the wheel soon after landing, but the marketing people couldn’t decide what colour it should be.

Now Douglas Adams, the author of the HHGTTG, is hardly alone in believing that marketing can too often represent a triumph of style over substance. Indeed its not too difficult to think of examples in our own industry where this is the case.

Understanding the mind of the consumer

I’m sure that we could all agree that in an ideal world one would never market anything that one didn’t believe was a product or service of appropriate quality or value.

Unfortunately life is rather more complicated than that. For a start the words “quality” and, particularly, “value” are pretty nebulous; they mean different things to different people. The reasons consumers choose one bottle of wine over another are hardly entirely rational (and occasionally not rational at all, as wine experts might define the term). Even on occasions when the choice is made entirely because of prior knowledge of how the wine tastes, people’s tastes vary. What is good value to one person may be the opposite to someone else.

More importantly, if people are getting pleasure from buying a bottle of wine that goes beyond what it tastes like, is it wrong to appeal to such pleasures in one’s marketing? At one level someone may simply pay more than they should “rationally” because they adore the presentation, find the back label story appealing or feel engaged by the website.

At another level they may feel they want to buy that particular bottle because everybody they know is drinking it or, alternatively, because nobody they know is drinking it. They may indeed want to buy it because it IS expensive and/or because their peer group knows it is expensive.

Good marketing people understand human nature, they understand how consumers’ minds work, and use that knowledge to develop more successful brands than producers with less awareness of consumer needs. Isn’t that the marketing mantra? Well, if you read many of my posts, that’s in effect what I’m arguing. In fact a key objective of this blog is to encourage people to be more successful by developing a greater understanding of consumer marketing as well as marketing more generally.

I rarely feel I have to justify this objective. There are too many producers who make great wines, yet the consumer is unaware of their existence because they are poor communicators. There are other producers who appear to be teetering on the brink of failure because they are too production oriented. What good would it serve for them to fall over the edge? Surely it’s a “win-win” to encourage producers to communicate effectively and creatively and thus engage (and thereby give pleasure to) consumers on a deeper level?

Do people really need more stuffor more marketing?

However, two books I have read recently, which are particularly critical of trends in consumer marketing, brought to the front of my mind a question or two that normally reside closer to the back.

One book, How Much Is Enough? by Robert & Edward Skidelsky, is a thoughtful account by two economists of how western society has reached its current position. It’s a powerful polemic against insatiability in economic terms and, while certainly not anti capitalist, argues powerfully that we cannot simply continue on our current path.

As one element of their thesis they make the point that our natural tendency to insatiability is inflamed by advertising (and, I’m presuming, consumer marketing in general). The traditional view of advertising was that consumers used it to enlighten themselves so that they could make more informed decisions about a product that they were going to buy anyway. He argues that nowadays “the aim of most advertising is rather to create an atmosphere around the product, to enhance its glamour and allure, in short to make us want something we would otherwise not have thought of wanting”.

The second book, What Money Can’t Buy: the Moral Limits of Markets by Michael Sandel, takes a similar view about advertising, seeing it in effect as in the vanguard of a commercialism that is increasingly pervasive. The book argues that no area of life appears sacrosanct any more and quotes countless examples, such as people selling their bodies for tattoo advertising, to advertising being widespread in schools in the USA. “Do we want a society,” he asks, “where everything is up for sale?”

Neither of these authors are in any way neo-puritans; nor are they against advertising in principle. Sandel uses an interesting analogy with pollution. “Emitting carbon dioxide is not wrong in itself; we do it every time we breathe,” he says. “And yet an excess of carbon omissions can be environmentally destructive.”

We’re all marketers, whether we think so or not

So where does this lead us? Well as someone who lectures on marketing I’ve always defended it as a discipline against those who criticise it on “holier than thou” grounds. Some students say, for example, that it’s all about spin and therefore, in effect, a deceit. Yet spin is hardly confined to companies or politicians. How many people give a balanced assessment of their strengths and weaknesses in job interviews or, when selling a property, point out the defects of the house in equal measure to its attractions? How many indeed would turn down an exceptional offer for their property because they thought it wasn’t worth the amount offered? Marketing is something we all do, I would suggest, almost on a daily basis: we seek, consciously or subconsciously, to put ourselves forward in the best light.

As individuals we are, in effect, brands. We have an identity and we have an image. If those who knew us were asked to sum us up in one sentence we would like that sentence to be in line with one we might write about ourselves. Thus, it could be argued, companies or brand owners have merely formalised what is inherently human nature. Marketing isn’t something you just pick up when you join the business world.

Yet the more profound issue being raised by these authors (and they are hardly alone) is that it is unbridled human nature that has, over the last thirty years in particular, in western society, led us to a position that appears unsustainable. Thus, one might extrapolate from this, the better we are at marketing, as individuals and companies, the more we are in effect adding fuel to the flames.

So what should be done? Well, firstly, you may not agree that economic insatiability is either happening or indeed alarming. Secondly, you may feel that as an individual or company you can’t afford to take account of such macro trends, you need to focus on optimising the potential of both yourself and your company. I would suggest that most of us would fall into one of these two categories. After all there is precious little one individual can do to change human nature.

But let us look at it another way. There is precious little any individual can do about climate change yet many of us have adopted recycling to some extent or another. What might be the equivalent of recycling when it comes to behaving appropriately in the marketing of wine?

Well for a start we can fully understand that wine is an alcoholic beverage and not try to push the boundaries by developing brands that might be appealing to under-age drinkers. Unlike most other FMCG categories it might be argued that we are at an advantage; we have much clearer operating boundaries. Some areas, to take Sandel’s point, ARE sacrosanct when it comes to promoting alcohol.

Secondly (as I argued in a recent post) we cannot simply hide behind the fragmentation of our industry and rely on the WSTA or the big companies when it comes to self-regulation. However much some may rail against political correctness, or the apparent ineffectiveness of health warnings, some of that railing is probably simply an excuse for inactivity.

Thirdly, we can as part of our marketing plans look to put something back into the community either in the UK or in the area of production. Linked with this we can develop a greater understanding of what the word “sustainability” means in wine industry terms. As a category we are closer to the land than most and have therefore an inherent advantage in this respect. It would be fair to say that there are plenty of initiatives that tick these particular boxes.

Being on the horns of a dilemna.

Ultimately, however, it is not that simple. Wine is not a necessity; it’s a treat, a minor luxury, and in some cases a very expensive one. To many people it’s a symbol of good living and a cosmopolitan lifestyle and, as marketers, our overriding objective is to keep it that way. If we don’t, as an industry we will be even less successful in terms of return on investment than we are currently.

So arguably we find ourselves on the horns of a dilemma. To achieve our own ends as an industry one of the key things we need to do is to learn lessons from other categories in terms of how to get more consumers to pay higher prices for bottles of wine. This in part implies significantly improving our ability to engage with consumers in ways that it could be considered risk encouraging the very insatiability that both the authors above are railing against.

Much consumer marketing of wine is terribly old fashioned as the Siddleskys define the term. It is merely providing information for the consumer rather than seeking to beguile and entrance them. Indeed our industry is in such dire straits partly because our marketing is so ineffective. And, however much we might say that we will always ensure there is substance behind the style, our objective is to ensure that consumers pay more for that “substance” than is currently the case.

Ultimately I resolve this dilemma by believing that the prices most consumers are paying for most wines are ridiculously low given the effort and resource that has gone into their production. We need to ensure that our industry is sustainable economically and not just in the more narrow definition of the word.

However I am aware that this argument is perhaps just a little too convenient. Would my attitude, I wonder, be any different if I worked in a category of high returns? Are all consumer marketing people inherently at the forefront of commercialism? Answers on a postcard please.

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20 thoughts on “The ethics of marketing wine

  1. One thing that is key….if the majority of marketing and sales people in the “wine world” had as much passion as the winemakers do for their products, we would see a somewhat different picture..Secondly, you are talking about “entrancing” consumers… Do they really want to be “entranced” by wine? I’m not so sure. We just need to speak about wine in a different way – e.g. the new Casillero del Diablo youtube advert is great – it’s tapped into trends of what consumers are interested in right now by looking at market commercial trends and movies etc. and built their campaign around what excites consumers and what engages consumers… Honestly as a wine industry we make things too complicated, talk to the trade too much and forget about what really motivates and excites and interests the average consumer.

    • Mike, this is a very good piece – as thoughtful as ever. Catherine, actually I partly disagree with you. Half of French wine is produced by cooperatives – and the figure is similar in other parts of Europe. In the New World big commercial wineries buy large volumes of grapes from large growers. Many of the people delivering grapes are simply farmers and no more passionate about what they do than their neighbours who farm wheat or soya.

      I also think that you are over-focusing on Mike’s use of the word “entrance”. If we replace it with a term like “engage with” or “catch the attention of”, we’d be on the same page. What the marketing men – and Mike – are talking about is creating an emotional response rather than an intellectual or functional one.

      But Mike is addressing a bigger issue here. We are moving into an era of far slower growth than most people have been used to. Real incomes are falling and the ability to get a new iPhone every year or so is becoming less certain. The authors Mike quotes are suggesting that late 20th century marketing concepts may need to be rethought. And I’m not just talking about wine.

      • Thank you Robert. I don’t think there’s any disagreement that we need as an industry to move on and talk to the consumer in different ways ( whichever words one uses ). But I am raising, as you say, a bigger issue which reflects my concern about the direction in which we appear to be heading not as a wine industry ( although I have plenty of concerns about that ) but in terms of society as a whole. I am not a pessimist by nature and do believe that man has a remarkable capacity to solve the problems that we create or are thrown our way but the problems that these authors are raising are somehow to me more insidious. And I’m simply asking whether or not that should affect our thinking….and if so how.

  2. The wine industry is way behind the new marketing concepts that you potentially discuss Robert. To have got most wine trade people into social media is a big thing. To move them into the next stage that I have seen in some of the leading companies and conferences in the USA this year will be an enormous challenge. I hate the word engage… it’s moot and dull and over-used. I really do not think people want to be entranced by wine. It’s not an illegal drug. 20th C marketing concepts? The best marketers have moved (swiftly) on. The wine industry will take longer… because it often rejects change of the status quo and it doesn’t believe that much in marketing because the use of the work marketing has been misused by winemakers and the trade at times…

    • I agree 100% that we misuse the word marketing and with Sean’s similar point. And there is no question, as I’ve said on many occasions, that we are way behind other categories and in order to improve margins, or achieve greater success more generally, we need to catch up which implies amongst other things we need to talk to consumers in different ways. The question I’m asking is whether we should consider broader issues or trends while we go through that process.

      I’m conscious its a very easy question to ask and a very difficult one to answer. And Robert raises an interesting point. Very broadly, in trying to catch up other categories in the way brands are marketed will we find when ( if?) we finally get to the point of reaching that particular ‘summit ‘ that they will have moved on. Now there’s a question !

    • I don’t think that any of us are actually disagreeing here – other than on words: “entrance”, “engage” or whatever. The point we are all making is that wine, for too many people, is produced, sold and bought as a commodity. That’s as true of cheap Bordeaux as of White Zin. The difference between deciding to buy Chateau X v Chateau Y or Brand A Zin v Brand B lies in price or marketing and far too often, the former. And when it comes to marketig, as we all agree, the wine industry is often still struggling with late 20th century methods.

      To compare the US with Europe is like travelling in time. Just look at the prevalence and success of the winery “wine clubs” that enable huge volumes of wine to be sold directly to consumers who happily sign up to receive it on a regular basis. It is a rare US winery, even in states like Virginia, that doesn’t have some kind of club. In Europe they are almost unknown. I have just returned from a Digital Wine Communicators conference in Spain where marketing still consists of advertising with images of barrels and vines and presentations to the press that focus on length of time in wood. Some wineries are still uncertain over whether they should have a website…

  3. Paul,

    read your piece with interest and I have to disagree with you in a couple of points. first, “industry is in such dire straits partly because our marketing is so ineffective”, i think that our industry is in such a state because of its marketing, it is very effective, the problem is that we are marketing the wine as a commodity and not a treat, a pleasure and until the marketing will be done by the same people that have done it so far, it wont change and dont think it is sustainable, eventually, the companies will end up bankrupt not after having damaged the wine industry as a whole. ON the other side, you are right when you say that everyone of us is a brand and in fact, the passionate brands, the passionate people, the brands that market the wine properly, as a pleasure, survive, it is a Goliath vs David but eventually, if many Davids will join the fight, Goliath can be defeated. This is why, despite the wine marketing being done by the big, you still see plenty of small, independent striving. And the Casillero del diablo advert contribute to market the wine as a commodity, their advert may go to tap a new audience and a potential market, but those not really help the wine industry and not even the good wines…

    • Thanks Andrea. On your first point I don’t define marketing wine as a commodity as effective, in the sense that its not taking the category in the right direction. So we are probably in agreement.
      On your second, I don’t see large producers as ‘bad’ and small as ‘good’ if that is what you are saying, I think its much more complicated than that. For example, I would see CYToro as definitely one of the good guys

      • Paul, yes, we agree on the first point, however, if we agree on the first point I dont see how we can disagree on the second, since the big producers are taking us to wrong direction. the point for me is not about the cost of marketing is the skills which are often not present in a winery, simply because for most of them, it is still about making wine and not about selling it. CYToro the good guy? dont really agree with you. probably they were a good guy a few years ago, not anymore, at least for me

      • Thanks Andrea. I think that why I’m uncomfortable with this is that I don’t believe all big producers are taking us in the wrong direction or that all small producers are taking us in the right one. There are I would suggest plenty of exceptions in both cases. More broadly I believe that all healthy categories need a blend of both, travelling in roughly the same direction. Now I wouldn’t describe the wine category as particularly healthy but to imply that this is largely the fault of the big guys is I think an over simplification. The same point I believe could be made about the retail sector.

      • Paul
        yes, there are exceptions on both categories, but never forget, and this go back to the reason behind your post, most of the time the people who “market” are the big, smalls dont even know what marketing is and still associate marketing with publicity. Anyway, good discussion.

      • I’d like to move beyond the half-price deal issues because they are a largely UK-centric phenomenon. Of far broader relevance is the “commoditisation” issue. When we talk about commodity, we rarely think about that in the context of appellations, but I think that they are commodities too. When I buy a Cotes du Rhone or a Barossa Shiraz I’m effectively buying something that has been marketed to me as a commodity.

      • I agree with this Robert on both counts. There are plenty of generic commodities, areas in which the consumer in effect gets little encouragement other than to select on which is the cheapest

  4. The wine industry especially in Europe seems to think that Marketing costs a WHOLE lot of money… why? Because it thinks that taxi wine advertising is marketing, or that a Jacobs Creek ad is marketing. Why is that wrong? Well there is so much that can be done for very little money – but no-one wants to find out about it, understand it, implement it. They all seem to be waiting for the day when margins improve so that they have thousands to spend again like they did back in 2000. Well that day is gone. The US succeeds because it understands Inbound Marketing (bet most people don’t know what that is) and social media in the proper sense of the word and it understands how to “engage” with consumers in a way that doesn’t cost a lot. Another big issue is that wineries tend to mix up marketing and sales. why don’t they view them as the same thing… if you’re a great sales guy you know how to market a product… If you’re not then you are a pushy peddlar of wine cases… ask any buyer this…We have this problem with winery mentality where budgets are put into the wrong things. SOO much money is spent on entering 3-5 competitions a year at near on 100 euros a wine and for what? A sticker? Wineries should be out talking to their consumers and their customers – reaching out through mediums that don’t cost a lot and actually selling their product with passion in a marketing manner that is emotive and engaging. The wine industry thinks that retailers can do all the wok for them at times. This is not the answer. They need to get out there and help themselves… Mike you are right – by the time it’s all caught up, the “real marketers globally” will be on to a new thing/phase etc. and it will be catch up time again. I don’t mean to sound pessimistic but all this screaming about half price deals (which actually are far fewer than before) and engaging the consumer goes back to 2003… it’s now 2013 and we are all still singing the same hymn (mainly in the UK) which is shame really…

    • True, Catherine, very true. And/but there’s a problem we have to add into our scenario, especially in the UK: the demands of the retailer. Many producers only enter those competitions because the retailer demands it of them as part of a due diligence / box ticking exercise. Similarly, some of the high-cost marketing efforts are done as much to convince big retailers of one’s serious intent as to have a direct impact on the consumer.
      If the retailer doesn’t “get” your more innovative direct-to-consumer efforts, and takes every spare penny you have (or makes you spend it with them and on competition entry etc), that hardly makes life easier…

      • Spot on Robert…trade marketing in effect comes first and whats left goes into the consumer pot. The need to secure distribution in the mults is so paramount for anyone wanting to sell more than 10000\20000 cases ( unless one has strong on trade links ) that this drives the marketing strategy. And the impression can sometimes be that producers see securing such distribution as ‘job done’ when of course not only has it just really started but also it implies one is looking at things from the wrong direction.

    • You make two very good points here Catherine. Firstly, marketing costs per case are probably lower than they have ever been given technological change. Securing cut through is more the issue now which is why when we talk about marketing investment one could argue that investment in skills and creativity is the key to progress…..and that is one of the real issues in the UK in my view. Because of low returns we are not attracting skills from outside the category as we were in the 90’s so we must get better at developing home grown talent.

      And the other point I particularly like is that about half price deals. If we spent a tenth of the energy we spend on complaining about ‘rip offs’ on looking at ways of encouraging consumers to spend more we would be in a better place.

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