Defining a brand portfolio strategy for a premium spirits company
A multi-billion dollar global spirits company was seeking to establish a premium rum segment that would exist between its mainstream competitors and super premium brands. The company’s existing 250-year-old rum brand suffered from surprisingly low awareness and declining brand equity resulting from years of heavy discounting. The key opportunities were to identify a compelling new positioning for the master rum brand and to define strategic roles for its full suite of category offerings (light, dark, spiced, and flavors). Additionally, the company sought to revisit its pricing strategy across the portfolio, hypothesizing that raising its everyday and promotional price points for all category offerings and sizes would not only improve its premium brand perception, but also increase revenue and profitability.
A current FullSurge partner in a previous role assembled and led a cross-functional project team. The primary objective of the project was to ensure the alignment of business and brand goals by translating customer preference data into resulting share of preference and financial impact for the organization. Quantitative research was conducted to determine a desirable positioning for the master rum brand and the optimal everyday and promotional price points for each of its offerings. Based on research findings, formal strategic roles were defined for each of the product lines based on category purchase behavior and growth opportunities. The research was also used to conduct a mini price elasticity study. These findings validated the ingoing hypothesis that the margin gains from across-the-board price increases would more than offset decreased unit volume declines, resulting in more financially favorable business results. Finally, this work was applied to a concurrent packaging redesign, new distribution initiatives, and new product launches in order to deliver optimal market impact.
The recommended new portfolio and pricing strategy yielded an 11% increase in revenue and a 23% increase in profit for the brand. Since implementing the new portfolio strategy, two new product lines were successfully launched and the brand has seen steady increases on key brand equity measures, including the all-important “is a premium brand” metric. It was also named one of the Top 20 Rum Brands in the World in the recent World Spirits Competition.