Thursday 18 April 2019

Larry Lockshin: The secret to great packaging in the wine industry

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I have recently taught a couple of seminars on packaging and also presented at the Business SA Export Conference on international packaging, so it was good for me to review some of the basic principles to remind myself – and now to remind all of you – of some key pointers in using packaging as a marketing tool. We are also conducting a new study on what are the branding practices on Australian wines funded by the Wolf Blass Foundation through a Master’s scholarship. This study will measure the amount of space on wine bottles dedicated to different aspects of wine branding among small, medium and large sized wineries to help us benchmark current practices.

To brag a little, but also to put some context into my assertions, the Ehrenberg Bass Institute (and School of Marketing at UniSA Business School) were named Number 1 in the world for the impact of brand management research on companies (Australian Financial Review, Boss Magazine 2018).

First, let’s revisit some terminology and principles. Direct branding is the use of the brand name. Indirect branding is the use of logos, colours, symbols, fonts, characters or other devices that are linked to the brand name. The purpose of indirect branding is to help build a range of links to the brand in the brain, which can trigger recognition so the brand comes to mind in a purchase situation.

The importance of indirect branding is better understood today in light of what is called the Associative Network Memory Model, which was put forward in the 1960s and has now been confirmed with recent neuroscience research. Our brains process colours and images much more quickly and subconsciously compared to words, so much of our routine behaviour, especially shopping, is driven by images rather than by reading words. We also store information in our brains in small chunks, called nodes. The nodes are typically symbols, images, colours and music, and often accompanied by emotional memories. Emotions make stronger more easily recalled nodes, so that is why a visit to a winery or a meal for a special occasion can be linked to a brand or a style (e.g. Champagne) of wine. These nodes can be connected when the information is received concurrently or when experiences reinforce the links. Even basic repetition, such as the logo and brand name as part of sponsorship or festival signage, on letterhead, on cellar door staff clothing, can build the strength of nodes.

The spreading activation theory is part of the Associate Memory Network Model, which shows that triggering one node spreads to others. The spreading is not symmetrical; some paths are stronger than others and some directions stronger than others. For example, I may associate the person Wolf Blass with a bowtie and bring into memory a bowtie when I hear about or see Wolf Blass, but seeing a bowtie may not trigger Wolf Blass in my memory.

Marketing communications’ main goal is to establish and reinforce these nodes and their  linkages. Since images, logos and colours are processed faster and easier than words, it is important to link these as much as possible to the brand name itself. When done over time and consistently, one can almost do away with the brand and use the logo/colour exclusively. This provides more freedom for marketers and creatives to remind consumers of the brand. These images and colours are processed more quickly and can influence purchase behaviour subconsciously.

The best examples are logos like the Nike ‘swoosh’ and McDonald’s golden arches, but there are many more. Within the wine industry, the eagle associated with Wolf Blass and the Penfolds’ script are good examples. The illegal use of the Penfolds script with similar names (like Benfolds) is an example of using these memory links to trigger a purchase. On the other hand, many companies in wine and other industries ‘refresh’ their indirect branding too radically and then they have to start building their memory associations from scratch, losing all the effort they made over the previous years. It is always best to change packaging/branding iteratively over time so as to not disrupt these memory links. Consistency is one of the key elements of building and maintaining a strong brand.

One of the other aspects of building a brand that buyers recognise in a purchase situation relates to what is called brand architecture and direct branding. The two main structures are umbrella branding and separate branding. Most companies choose to use an umbrella brand across their brand ranges. The reason is obvious: gaining greater leverage from all branding activities. We see this in Jacob’s Creek building the range of brands under its umbrella, including bringubf separate brands underneath, like Steingarten, Johan and Centenary Hill, along with building new ranges like Double Barrel and Cool Harvest. Of course, Pernod Ricard has other brands besides Jacob’s Creek, each of which have their ranges under their own umbrella.

Separate or independent branding is used by some companies. The reason is usually the range does not ‘fit’ under a single brand. This may be due to large price differences among the range, or very different positioning. Umbrella branding works when the brands under the umbrella share enough characteristics that the memory associations can still be linked together. There is no hard and fast rule about how much difference there should be before going the separate route. Penfolds has wines from $1800 to $12 under their umbrella, and they try to maintain a Penfolds style across their reds. Wolf Blass uses the different colours (e.g., red, yellow, black, platinum) but keeps the eagle across its range.

Preparing for my lectures triggered this article when one of the wineries we used for the week-long course (which includes a team analysing their website and branding followed by a visit) was First Drop Wines, maker of Mother’s Milk Shiraz. I also came across Alpha Box and Dice as an example my Master’s student asked about when developing her coding system. Both of these wineries have quite distinctive packaging for each wine with a fairly small brand umbrella logo and name on the capsule. Our theory would say it is more efficient to have a bigger version of the brand umbrella identifier to link the wines in their ranges together, however, both companies seem relatively successful with this more separate branding approach for each of their wines. I thought it useful to revisit the evidence-based branding practices we recommend, although I acknowledge there are successful brands using both architectures.

One other concept I used for my presentation on packaging for export was to maintain the current packaging as much as feasible when exporting. There is no evidence that using red and gold, for example, for the Chinese wine market improves brand recognition and sales.  It is much better to have a standard look for all export markets as well as the domestic market and add what is required for legal reasons as necessary. We have also done research concerning whether to change the language to the importing country’s language. We did trials in three different markets and found that changing the main label into the local language was detrimental to brand recognition and sales. English is perceived as a global language and products with English labels are seen as higher quality and more prestigious than exactly the same product with local language but the same overall packaging.

Most people in most purchase occasions do not have a specific wine brand in mind. The purpose of packaging and building links between the brand name and other indirect branding elements is to improve the probability your brand will be recognised or come to mind during the purchase process. Consistent use of logos, colours and fonts along with the brand name will increase this probability and extend it across the range of wines that uses them in common.

Professor Larry Lockshin is with the Ehrenberg Bass Institute, University of South Australia Business School.

• This article first appeared in WBM – Australia’s Wine Business Magazine. To subscribe click here.

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