| As the fiscal year ends this June, luxury | | | | Asian Americans, Hispanic Americans, and Russian |
| marketers are starting to think of new ways to | | | | Americans. Each will have its own concentric circle |
| reach new consumers. Given the myriad of | | | | that includes niche and grassroots efforts: |
| changes in the marketing and media landscape, | | | | sponsorships, influencer programs, marketing |
| there is still a segment of highly qualified | | | | partnerships, online engagements, retail events |
| consumers that are untapped and easy to reach. | | | | promotions, charity support and more. These |
| These consumers are not your usual suspects. | | | | individual concentric circles will work together to |
| And the first luxury purveyor to execute a | | | | build critical mass that in turn translates into the |
| sound, non-traditional marketing strategy will win | | | | new mass marketing. And if you were wondering |
| their attention. | | | | what resonates with this group, in general, try |
| Who are these consumers? Here are some | | | | high- touch engagements that allow consumers to |
| answers: | | | | interact with the brand. Traditional advertising is a |
| 1. Meet the Royaltons. Multicultural and mass | | | | waste of your marketing dollars. |
| marketers generally refer to ethnic consumers as | | | | Targeting smaller groups of influencers in a |
| "minorities." Within this large demographic, | | | | cost-effective manner may require more time |
| however, is the growing body of affluent ethnic | | | | and effort upfront, but the payoff in building a |
| consumers--and they need to be viewed quite | | | | blueprint for the future, making inroads into each |
| differently. In their 2008 strategic planning | | | | "community," and developing a meaningful and |
| sessions, luxury purveyors should devote special | | | | authentic dialogue with this consumer, will be |
| emphasis to this group, which spans ethnicities, | | | | priceless in the end. |
| and is dubbed "Royaltons." Royaltons is a term | | | | Our recommendation: Don't let your lack of |
| derived from the word "royalty," meaning "of or | | | | diversity research or insight hinder your brand |
| relating to a monarch; a person or thing that holds | | | | growth. Hire a well-rounded diversity expert to |
| a dominant position." | | | | act as your Chief Integration Officer. This expert |
| This under-the-radar but overly influential | | | | will design a methodology for your diversity |
| consumer segment offers a wealth of | | | | initiative inclusive of standard operating procedure |
| opportunity and increased sales for luxury | | | | guidelines. |
| purveyors. It's estimated that less than two | | | | 3. Women and Wine With all the talk over the last |
| percent of marketing budgets are dedicated to | | | | few years about marketing to the largest group |
| engaging this target audience because luxury | | | | of consumers and purchase influencers (women), |
| brands are focused on the uber-affluent or the | | | | we predict that wine marketers will finally place |
| more obvious affluent consumer. | | | | more effort into engaging affluent female |
| For example, Hispanics represent our largest | | | | consumers. After all, according to a 2006 Gallup |
| minority, now numbering about 42 million. Of | | | | survey, women make 55% of U.S. wine |
| those, six percent earn more than $100,000. | | | | purchases. According to another survey, nearly a |
| Merrill Lynch estimates, however, that this | | | | quarter of women's wine purchases are over |
| relatively small segment of affluent Hispanics will | | | | $100. |
| spend $300 billion this year -- representing almost | | | | The evidence suggests that wine marketers are |
| two-thirds of overall Hispanic buying power. | | | | starting to recognize the trend, with wine clubs, |
| Hispanics make up between five and ten percent | | | | Web sites, and ladies' nights at bars, all designed |
| of elite university enrollments; some 40,000 | | | | to appeal to women imbibers. There's a |
| Hispanics are physicians. | | | | low-alcohol, low-calorie wine, White Lie Early |
| America's single most affluent consumer group: | | | | Season chardonnay, with a 9.8 percent alcohol |
| Asian-Americans, who now total about 13 million. | | | | content, compared with the 13 percent and 14 |
| The number of Asian-American families with | | | | percent found in some vintages. Displays of pink |
| incomes of more than $200,000 is about the | | | | and white wines in bottles bearing such flowery |
| same (156,000) as Hispanic and African-American | | | | names as Seduction have been derided by the |
| families combined, according to Packaged Facts. | | | | Web site as the Virginia Slims of the wine trade. |
| This group represents between 10 and 25 | | | | Wine marketers need to understand the more |
| percent of elite university enrollments. Within this | | | | contemporary, affluent and accomplished women. |
| group, Asian Indians are the fastest-growing and | | | | They are not looking for upscale wine coolers. |
| wealthiest ethnicity. Almost 40 percent of all | | | | Unless you are marketing a wine that benefits the |
| Indians hold a professional degree. | | | | Susan G. Komen Foundation, it's not advisable to |
| A less familiar ethnic group, Russian-Americans, | | | | use pink or anything that speaks to the "child" |
| has arrived with a fury -- about four million strong. | | | | inside a woman. |
| They are twice as likely to have graduated from | | | | Aggressive marketers with leadership cultures will |
| college as the overall American population and 50 | | | | customize programs that also target Royaltons |
| percent more likely to report an income of | | | | via member- based organizations and associations. |
| $75,000 or more. They consume luxury goods at | | | | This is a great niche not currently being filled by |
| a rapid pace. | | | | any wine marketer (or other marketer for that |
| In order for luxury marketers in 2008 to better | | | | matter). Affluent ethnic women feel more |
| allocate their dollars towards Royaltons, it's | | | | pressure than their white counterparts to be |
| important for them to embrace an aggressively | | | | respected and feel a sense of accomplishment, |
| proactive "portfolio attitude" to research, analyze | | | | and therefore work harder to achieve this. If you |
| and develop strategies across the complete | | | | want to reach this time- strapped consumer, |
| landscape of opportunity. This should be inclusive | | | | deliver programs that merge her desire for a |
| of a consumer blueprint, marketing audit, | | | | work-life balance and the respect she's likely |
| proprietary research, and a well-crafted strategic | | | | earned. |
| plan that leverages existing human capital or | | | | Our recommendation: If wine companies want to |
| identifies new sources of business intelligence. | | | | achieve brand dominance, they need to create |
| We anticipate this as the single biggest effort | | | | experiences that maximize women's social life and |
| luxury marketers can tackle in 2008. Just don't | | | | enhance their businesses and careers. |
| expect miracles overnight. | | | | We predict that more emphasis will be placed on |
| 2. The New Mass Marketing Have you heard the | | | | differentiating products at the retail level that aim |
| news? Mass marketing is out. Target marketing is | | | | to make the shopping experience and purchase |
| in. | | | | decision easier. This will be accomplished through |
| Let's take a specific set of target groups, | | | | on- premise and off- premise events, including |
| Royaltons (affluent ethnic consumers), and build a | | | | weekend in-store tastings, sponsored |
| new mass marketing program. Here's how it | | | | invitation-only wine dinners at upscale restaurants |
| works. | | | | and high- profile event sponsorships of women's |
| You've determined that you want to target a | | | | social events and professional organizations. |
| cluster of Royaltons including African Americans, | | | | |