By Denise A. Harrison
Note: This was first published in Compass Points July 2006
Over the last twenty years, your company has earned the number one market position – time to relax and enjoy? No! The mass market is now fragmenting as consumers become more sophisticated. Niches are carving up pieces of the lucrative mass market and consumers are becoming more educated, picky and even downright snobby. What should you do?
- J. Gallo faced exactly this dilemma as it was developing its strategic plan for the 21st century. The growth in the wine market was going to come from various niches as the wine drinking population became more savvy and had more disposable income to spend on wine. Gallo’s mass market image was fine for the mass market, but the image did not play well in the new image-conscious niches. The tried and true strategy of the past would not work for the future.
Knowing that they could not leverage their brand, they sought ways to leverage their knowledge of the wine industry. As the WSJ reported on February 8, 2006, Gallo decided to create a stand-alone brand: Ecco Domani, a Pinot Grigio wine made and bottled in Italy. To capitalize on the wine’s Italian origin, marketing decided to use the Italian fashion industry to develop a trendy image for the brand. They set up the Ecco Domani Fashion Foundation awarding grants to emerging designers. Publicity came fast and furious – the major networks covered the awards, Ecco Domani was on the short list of invitees to fashion’s promotional events and given access to fashion and media’s current luminaries. Pairing wine with fashion enabled Gallo to create a successful new brand – who knew that mass marketer Gallo really owned the label?
When a strategy works – repeat! Gallo continues to create stand-alone brands to capitalize on the trendy and often fickle wine market. Did you know the following were really Gallo brands? Red Bicycle from France and Black Swan from Australia.
- If you are a dominant mass market player watch out for market fragmentation as consumers’ tastes and preferences mature. Keep looking for emerging trends so you do not open the door to niche competitors.
- If your image is mass market, consider a stand-alone brand when you approach a niche market.
- This niche market will often require different marketing techniques than the ones that have been successful in the mass market – consider a variety of creative approaches.
As markets grow, they often fragment into specialized niches. Use strategic planning as a way to identify and capitalize on these emerging trends.
For more information on how to take your strategic planning to the next level please listen to our webinar: Why Isn’t My Strategic Planning Working?
Denise Harrison is a senior consultant for the Center for Simplified Strategic Planning, Inc. She can be reached at email@example.com.
© Copyright 2015 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.