Alcohol Brand Marketing Strategies

Alcohol Brand Marketing Strategies

• Alcohol brands are increasingly using "brand stretching" to expand into non-alcoholic products, bypassing advertising regulations.
• This involves line extensions (e.g., lower-calorie beers) and category extensions (e.g., alcohol-branded food).
• Alcohol brands are a well-recognized cultural touchstone, even for young people (pre-teen and teens).

Brand Stretching Techniques

• Line Extensions: Introduce new products within the same category (e.g., low-calorie beers).
• Category Extensions: Apply an existing brand to a new product category (e.g., alcohol brands producing food items).
• Successful extensions often build on existing brand trust and reputation (e.g., Jack Daniel's Tennessee Honey).
• Alcohol companies may use these types of extensions to maintain/increase brand visibility when direct alcohol advertising is prohibited, a tactic called "displacement marketing."

Marketing Tactics

• Traditional advertising, like TV and radio, is declining.
• Contemporary methods include promotions, celebrity endorsements, product placement, event sponsorships, and social media marketing (which can sometimes be subtle).
• A significant trend is alcohol-branded merchandise (ABM), such as T-shirts, mugs. The increased use of e-commerce platforms for selling ABM is noteworthy, particularly to target younger consumers.
• Brand stretching to non-alcoholic related goods and services demonstrates a sophisticated marketing approach to circumvent advertising restrictions.

Risks and Challenges of Brand Stretching

• Dilution: New products may dilute the core brand identity or alienate existing customers.
• Misalignment: Products that don't correlate with the existing brand reputation, like Coors' unsuccessful attempt to enter the bottled water market, ultimately fail.
• Success stories however show that this strategy can effectively boost brand equity and shareholder returns (e.g., increase shareholder value by 5%).

Displacement Marketing

• A tactic pioneered by tobacco companies to bypass advertising restrictions.
• Alcohol companies are utilizing similar strategies in regions with advertising bans (e.g., Kingfisher Airlines and Kingfisher Water in India).
• Existing alcohol brand logos are used to maintain brand recognition despite the regulatory ban.

Conclusion and Calls for Regulation

• Brand stretching is gaining popularity, presenting an alternate method for companies to influence consumer behavior.
• There's a call for tougher regulations on alcohol marketing, focusing on eliminating sponsorships, restricting marketing to adult audiences, and ensuring factual product information in marketing materials.
• Even with restrictions, careful attention to alternative brand extension strategies in the alcohol industry is crucial.

Examples of Brand Extensions

• Baileys: Ice cream, other related food items.
• Guinness: Chocolates, various accessories.
• Jack Daniel's: BBQ sauces, luxury items.
• Smirnoff: Key rings.
• Kingfisher: Airlines and water.