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Lynne Whitaker, founder, Winebrands on what we can learn from power of fragrance brands

Published:  13 July, 2009

Lynne Whitaker, founder of the Winebrand consultancy, takes a look at what the wine trade could learn from branding and premium positioning in the fragrance sector

Unlike many other consumer goods markets, where personnel regularly move from one product category to another, the wine industry remains comparatively insular. Although there has been a gradual influx of sales and marketing talent from outside, many wine businesses are still managed by people with a lifelong interest in, and passion for, their product.

Hence the idea to step back occasionally from the heady world of wine and assess the challenges faced by those in other industries. What are the parallels, and how can we learn from them?

One market with many similarities to wine is that of fragrance. It is fiercely competitive, with over 1200 fragrances on the market at any one time. Product lifecycles are short - several hundred new perfumes are launched annually, but few survive beyond the first year.

Department stores, which once dominated perfume sales, are today in competition with discount retailers, supermarkets, and on-line operators, thus creating pressure on price and difficulties in maintaining the premium image of the product. Brand owners struggle to attract attention in what is colloquially known as "spray alley" - the wall of perfumes typical of so many stores.

To compound the problem, investment in new product development is expensive. The perfume houses need to spend at least £1million in advertising a new brand to have an impact on the market, yet the pressure for commercial success inhibits creativity, and leads to a risk of "sameness" on the part of the global brands.

Fragrances, like wine, are bought by a broad spectrum of consumers with different levels of knowledge and interest. Consumer research distinguishes "fragrance sensualists" from "fragrance loyalists" - contrasting those who are eager to experiment with those who tend to stay with a favourite brand. And just as wine enthusiasts are able to share views on specialist websites and blogs, so the "fragrance aficionados" can choose from a range of sites such as the intriguingly named!!

The perfume marketers face a major challenge in gaining trial: "liking the smell" is a key purchase driver, but sampling, especially in the larger retail outlets, is a challenge. Consumers have little upon which to base their purchase decision, other than the brand name, packaging, and the subliminal influence of any advertising they may have seen.

It is perhaps because of the difficulties of gaining visibility in such a crowded market, that many perfume houses have turned to the use of celebrity as a way to establish brand awareness. Pioneered by Elizabeth Taylor with her "White Diamonds" fragrance back in the early 90's, celebrity perfumes are now big business. Reported to be in rapid growth, perfumes endorsed by the likes of Paris Hilton and Kate Moss now account for over 30% of the market.

The benefits, of course, are the immediate level of awareness conveyed by the celebrity's name. Clearly, the use of such names can be polarising, and few true aficionados would indulge in anything so populist. However, it is interesting to note that the celebrity fragrances have found favour amongst new users - according to TGI almost 1 in 5 young people aged 16 - 24 now owns a celebrity perfume.

Perhaps "Beckham's Bordeaux" or "Britney's Burgundy" could yet prove the answer for those French wine marketers trying to attract new users to the category!

Celebrity aside, what other aspects of the fragrance industry might have applications for wine? Here are just a few we might consider:

- Niche marketing, using different products and imagery to target different consumers and usage occasions
- Engaging the consumer, by telling stories of the fragrances, their ingredients and creative inspiration
- Emphasising the pleasure of wearing a good perfume
- Training sales staff to instruct consumers on how to wear perfume, as well as which scents to choose for different occasions
- Providing educational literature
- Segmenting fragrances by fragrance family to encourage trial and make gift purchasing easier
- Sampling, either through traditional media or even through offering small "sample sizes" for sale
- Using media, or brand extensions, or celebrity to cut across the "noise" and achieve visibility
- Gaining commitment at retail level to promoting added value, and maintaining the premium image of the product.

A final lesson is that a quality product, with a great story and a commitment to long term brand building, will usually pay dividends. Chanel No.5 was first launched in 1921, yet its contemporary marketing campaign featuring Nicole Kidman ensures that a bottle of this classic fragrance is still sold every thirty seconds.