Product 'on the rocks' offers marketing insights
David Perry, Executive editor -- Furniture Today, July 5, 2004
The two market-share leaders are headed south. One has seen its market share cut almost in half. The No. 3 producer is stagnant. But the producers in the Nos. 4 through 7 slots are coming on strong.
Before my friends at Sealy, Serta and Simmons get too alarmed, I must tell you that I'm not talking about bedding. Actually, I'm summarizing key developments over the last decade in the world of pricey, single-malt Scotch liquor.
An interesting article on the subject in The Wall Street Journal caught my eye, and just might offer us some marketing lessons. And, if nothing else, you may learn a little more about single-malt Scotch, information I trust can prove useful in a business lunch or dinner down the road.
Surprisingly, the two leaders in the single-malt category, No. 1 Glenfiddich and No. 2 Glen Grant, show big market share loses. Those two accounted for almost half of the world's share of single-malt Scotches in 1992. By 2002, their combined share was down to just under one-third.
The WSJ article doesn't explain why those two have lost market share. Perhaps it's a case of growing competition, with some formidable up-and-comers making their mark.
The big gainers on the list are the smaller guys. No. 4 The Macallan, No. 5 Glenmorangie, No. 6 Cardhu and No. 7 Aberlour all posted big market share gains in the last decade.
It's interesting, I think, that with the exception of Cardhu, each of those smaller brands is more highly regarded by some connoisseurs than the top two brands.
-
Lesson: Quality sells.
It's also worth noting that the single-malt Scotch category is, by definition, one of brands. Every distillery is a brand. There is no such thing as generic single-malt Scotch. -
Lesson: Brands are important.
The single-malt category is the shining star in the Scotch arena. Worldwide, sales of Scotch — most of which is sold in blends, not single malts — dropped by 1% in the last decade. But the single malts were up 37% from 1992 to 2002.
Why? The single malts offer cachet. They are status symbols for affluent consumers. Like fine wines, they have their own stories, replete with fancy terms like "nose," "body" and "finish." Also, the distilleries have become better promoters. The word is getting out. -
Lesson: Marketing matters.
Fine single malts are not cheap. Expect to pay $40 or more for a fine brand. The really good ones can command prices in excess of $100 for special editions. Yet this category is growing fast. -
Lesson: There's a growing market today for luxury products. Ask any bedding producer how his $1,000-plus beds are doing.
Well, that wraps up our quick study of the single malts. Let's lift a wee dram to the marketers who are driving that category upward.
