Marketing & Advertising report By Marit Ouwerkerk 28 March 2014 Psychology of Marketing & Advertising

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Executive Summary This report provides Kopparberg with insights and recommendations for changing

its marketing and advertising strategy, which is currently focused on focused on

differentiation and targeting the ‘Shoreditch Drinker’, if sustained growth achieve in

the long run in an increasingly busy fruit cider market place. To ensure growth in the

long term, Kopparberg is advised to focus on market penetration instead of loyalty

building, and to increase mental and physical availability of its brand by persistently

communicating Kopparberg’s distinctive assets in all marketing communications.

This builds strong associations in people’s mind between Kopparberg’s easily

identified assets and Kopparberg. This increases the possibility Kopparberg’s

marketing initiatives are noticed, recognized and processed, and eventually

increases the possibility a person thinks of Kopparberg in a buying situation. This

strategy ensures Kopparberg’s place in an increasingly competitive cider market and

enhances sales.

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Content

1. Terms of Reference - 3

2. Main Body – 4 - 11

a. Current Marketing Strategy – 4

b. Mental & Physical Availability – 4

c. Distinctive Assets – 5

d. Issues and Solutions – 6

e. Limitations – 11

3. Conclusion - 12

4. Recommendations – 12

5. Sources Consulted – 13

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1. Terms of Reference As a responds to Kopparberg’s request for insights and recommendations for

improving its marketing and advertising strategy with the long-term aim to growing

the brand, this report is written by Marit Ouwerkerk, student MSc Management of

Innovation at Goldsmiths University and aspiring marketer, and presented to

Kopparberg’s management team. The focal problem I have been presented with is

that more heavyweight beer brands are entering the increasingly popular UK cider

market, especially the bottled fruity category, and this challenges Kopparberg’s

premium place in the Pear and Mixed Fruit rankings. Kopparberg’s marketing

budget is relatively small compared to these new competitors and risks falling

behind in an increasingly crowded marketplace.

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2. Main Body 2.1 Current Marketing and Advertising Strategy

When entering the UK fruit cider market in 2006, Kopparberg has seen phenomenal

growth mostly due to word-of-mouth. The Happenings-campaign, including several

underground events, festivals and sponsoring initiatives, which targeted the so-

called ‘Shoreditch drinker’, created a buzz on- and offline that further increased

word-of-mouth recommendations. Kopparberg’s Pear cider became and still is the

most popular in terms of sales in its category and the Mixed Fruit variants are

leading the pack as well. Currently, Kopparberg’s marketing strategy is aimed at

enhancing the ‘Cider of Shoreditch’ image and strengthening relationships with

Kopparberg fans. ‘Shoreditch drinkers’ are defined as 24 and 34 years old living in

London and other UK cities, who have promising careers ahead of them and are

social and hip. They regularly go out to have drinks at the cool bars in town and a

Kopparberg bottle in their hand boosts their image. They are thought to influence

people that not yet drink Kopparberg.

2.2 Mental and Physical Availability

Most marketers base their advertisements and other marketing efforts on popular

but unproved, sometimes even ineffective, theories and gut feeling, for example by

focusing on positioning, persuasion and promoting unique selling points. The

recommendations presented in this report are mainly based on the few ‘marketing-

laws’ that have been proven to work for brand growth and are suggested in Byron

Sharp’s book How Brands Grow.

Customers are busy and are exposed to about 625 advertisements a day. Therefore,

people are likely to favour brands that make decision processes easy for them. For

this, increasing Kopparberg’s mental and physical availability is of premium

importance to eventually enhance customer loyalty (in terms of noticing and

choosing a brand) and subsequently sales. Consequently, the recommendations to

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improve Kopparberg’s marketing strategy and facilitate brand growth are primarily

based on two goals: increasing mental and physical availability.

A brand is mentally available if it is noticed in today’s cluttered world, recognized

quickly and recalled in buying situations. To build and strengthen this process, the

links in people’s memories between Kopparberg’s distinctive assets and the brand

should be increased in number and strengthened. In this way, whenever a person

observes one of Kopparberg’s distinctive assets, the person will think of you. This is

a non-conscious process. Physical availability indicates a brand is easily spotted and

easily bought by as many consumers as possible across as many occasions as

possible.

2.3 Distinctive Assets

Using distinctive assets (visual, verbal or style elements) helps intensifying saliency.

These assets must be widely known, easily recognized and seen as unique to

Kopparberg and correctly associated with Kopparberg. Kopparberg already has

several identifying characteristics that have potential to become, or already are,

widely known and unique to Kopparberg:

o Stylish bottle

o Logo

o Experimental flavour variants

o Fruity and refreshing

o A link to the Kopparberg town and forests

o A link to summer, festivals, outdoor activities

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2.4 Issues & Solutions

The following issues regarding the current marketing and advertising strategy were

identified. These are followed by recommendations and some are illustrated by

examples of how to realize the suggestion.

Issue 1. Differentiation does not lead to brand growth

For Kopparberg, differentiation with fruit ciders has been very successful. However,

brands are generally only seen as unique if there is almost no competition and since

many major brands are entering the fruit cider category, differentiation has turned

out to be a short-term competitive advantage. Even though buyers might buy one

brand’s product, they experience little differentiation between this brand and its

rivals. This means it is less important what a person’s attitude is about a brand or if a

person ‘likes’ a brand. Consequently, the emphasis marketers put on differentiation

by offering unique value propositions is not likely to attract more customers,

increase sales and realize brand growth. In stead, focusing on distinctiveness has

shown to be useful.

Recommendation 1: Focus on distinctive assets

Issue 2. Too narrow focus on loyalty building to increase sales

Many brands, including Kopparberg, focus on increasing buyers’ loyalty to increase

sales. Referring to research, it seems that big and small companies do not

considerably differ in level of loyalty, but differ in the level of market penetration.

The double-jeopardy-law underscores this: Small brands have lower sales compared

to big brands only because of fewer buyers who buy the brand less often. Growth is

therefore a result of extraordinary acquisition.

Example: Kopparberg can start distributing over the whole of the UK, and eventually

go abroad as well.

Recommendation 2: Increase focus on market penetration

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Issue 3: Too narrow focus on Shoreditch drinkers

Most customers of a brand are light buyers who buy a brand a few times a year,

maybe just once. In general there are three times more light than loyal, heavy

buyers. This means that in absolute terms there will me more sales from light buyers

than from loyal buyers. Furthermore, light buyers easily forget brands, because

memory structures are not that strong yet, so they regularly have to be reminded of

Kopparberg to they notice and recognize it quicker. Kopparberg’s current focus on

further strengthening relationships with Kopparberg consumers, especially on online

platforms, is recommended to be narrowed. These buyers are already engaged and

already buy Kopparberg because their memory structures are already strong

enough to notice Kopparberg among competition. To illustrate this point: they

already hold a strong association between, for example, a warm summers day and

drinking a refreshing Kopparberg. They would buy it anyway out of habit. So it may

be said that heavily investing in these high buyers is wasted money.

If Kopparberg wants to assure its primary place in the market it should step away

from focusing on a niche group, but reach out to as many people as possible and

strengthening their memory structures so in the long run, a larger group of light

category buyers will buy Kopparberg more often.

Recommendation 3: Reach light buyers

Issue 4: Small Marketing Budget

However, we should bear in mind Kopparberg’s marketing budget is, for now,

smaller than that of bigger brands, which makes it more challenging to get noticed

and reach the masses. While there still is a limited marketing budget, giving loyal

buyers sufficient attention to keep them is advised since this group will, for now,

give Kopparberg more in return in absolute terms. If few heavy buyers leave to

rivals, Kopparberg considerably feels this in sales. Kopparberg should therefore

reach out to its heavy buyers as well. Important to note here is that the ‘Shoreditch

drinker’ will grow up. They will become more mature and discerning and might

become more interested in heritage and ingredients. Focussing on these two

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distinctive assets, will enhance the possibility the original consumer will keep buying

Kopparberg.

Recommendation 3.1: Reach heavy buyers

Because many major brands’ marketing activities are not effective, Kopparberg can

do a lot more with less resources if keeping the ‘marketing laws’ in mind that

enhance effectiveness. Although it can take a while until strong associations are built

in people’s minds between distinctive assets and Kopparberg, when they are

established, it also takes a long time to fade. Kopparberg should therefore see it as

an investment in the long run. If Kopparberg is able to use its distinctive assets

effectively and in all its marketing efforts, Kopparberg will do a lot better with less

money than many other cider brands that are not ultimately deploying the

recommendations in this report.

Example: Kopparberg is advised to keep investing in promoting their core

Kopparberg range consisting of Pear, Apple, and the Mixed Fruit-variants. In this

way, memory structures that already exist will be strengthened over time, increasing

the possibility consumers will chose Kopparberg when in the situation of buying

cider. A strong memory association between cider and Kopparberg will make the

decision process easier for customers, which they like.

Recommendation: Persistently communicate distinctive assets

Issue 5: High investment in Loyalty programs

Loyalty programs should not be used to attempt to increase loyalty or growth,

because they usually have very little effect on this since loyalty programs attract

heavy Kopparberg buyers with already strong memory structures and who would

buy Kopparberg anyway. The investment might be higher than what is gained.

However, if Kopparberg effectively uses the consumer data that is gained from

these programs, loyalty programs can affect sales eventually in a relative

inexpensive way. Kopparberg is therefore recommended to build new ways of

communication with people in the loyalty programme, for example, to reach new

buyers.

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Example: While organizing or sponsoring an event, Kopparberg could set up a

competition on various social media platforms, in which fans can win a trip to

Kopparberg’s factory in Kopparberg if they invite their whole list of friends to an

upcoming Kopparberg-event. In this way, many people hear of Kopparberg in a

relative inexpensive way, plus the distinctive asset of Kopparberg’s origins is

highlighted.

Recommendation: Deploy consumer data

Issue 6: Not enough Mental Availability

Since buyers only take into account a small number of brands in a category and do

not chose rationally but emotionally, in most cases only the brands that get noticed

are considered and eventually bought. Kopparberg should use a mix of personal

stimuli, emotional cues, faces and surprising elements in advertisements to grab

people’s attention.

Example: Kopparberg can push bespoke activities by asking consumers to send a

photo of themselves, which will be printed on the back of a Kopparberg bottle sold

somewhere in the UK. This is not only creates personal relationships, it also uses

faces on bottles, which gets noticed by the buyer who buys the bottle. Also, what a

nice surprise would it be to find a friend (or yourself!) on a bottle.

Recommendation: Get Noticed!

In a world of information overload, and bearing in mind consumers are busy, it is

crucial it is made easy for customers to identify the source of the cider and

distinctive assets work as identification triggers. All advertisements and promotional

activities should be showing clear links to Kopparberg trough the usage of

distinctive assets so that consumers easily recognize Kopparberg as the source of

the marketing effort.

Recommendation: Get Recognized!

To increase the possibility Kopparberg gets remembered, it is crucial the ad gets

processed. To ensure people will stand still and think about the meaning of the ad,

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using metaphors is an effective way, because people tent to want to solve puzzles.

Possibilities for co-creation are effective too since people are encouraged to form

their own opinion. Narratives work as well, since people are curious about the end

of the story so they keep watching.

Recommendation: Get Processed!

Customers seem to experiment with other drinks and flavours of cider and they

might go on to other innovative drinks if Kopparberg does not keep an interesting

edge. So, to increase physical availability and keep ahead of competition,

Kopparberg has to keep popping up on surprising moments.

Example: Kopparberg could add limited editions every few months to fuel

excitement and offer something unusual. This launches could be supported by a

marketing campaign, alongside the continuous efforts to advertise Kopparberg’s

permanent ciders and Kopparberg as a brand. Limited availability might also

temporarily increase sales, since it is based on scarcity.

Example: Offer cider in stylish cans, especially on festivals. In this way Kopparberg

ensures Kopparberg ciders are drunk out of cans that reflect Kopparberg’s

distinctive style.

Example: Offer a range with less sugar attract different consumers or consumers that

sometimes want a ‘healthier’ drink.

Recommendation: Increase Physical Availability by introducing New Products

Issue 7: Not enough Physical Availability

It is important to increase physical availability in pubs and bars to faster activate

people’s memory structures associated with Kopparberg.

Example: It is crucial to have strong, tailored relationships with pub and bar owners

to get placed on noticeable places. Just as customers, bar owners most likely favour

Kopparberg more if they get reminded of it more often. Sending bar owners offers,

such as free carton pads to place drinks on displaying the Kopparberg logo, could

do the trick.

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Example: There is no other fruit cider available on draught yet. Offering Kopparberg

on draught enhances physical availability. But a glass of draught cider does not have

the same image-boosting feeling as a bottle of Kopparberg in your hand. Even

though this limitation, having the clear Kopparberg-logo on draught, which is a

premium location to be seen by people at a bar, might stimulate memory structures

so that the consumer, unconsciously, easier buy a bottle of Kopparberg.

Recommendation: Increase Physical Availability in Pubs & Bars

Physical availability also increases when Kopparberg would be more available over

time. Kopparberg is now mainly associated with summer and festivals and not with

winter or dinners. It is important to advertise distinctive attributes that indicate that

Kopparberg is also suitable in other situations. In this way, Kopparberg is able to

attract different consumers that enjoy drinking cider in various drinking occasions.

For example, the same customer might want to drink a fruity, fresh cider on a hot

summer day, while during a dinner, a high-quality apple cider might be thought of

as more suitable.

Example: Organizing competitions in pubs where customers can have dinner

accompanied with wine and cider. This will get people to drink Kopparberg in

occasions where it was not seen as suitable before.

Example: Advertise Kopparberg ciders for everyday (Naked Apple, Pear) by showing

a narrative in which the host surprises guests by serving Naked Apple cider at

dinner, followed by a scene where they have fun and enjoy dinner.

Example: Make Kopparberg also a suitable winter drink by offering limited edition

winter mulled and spiced ciders.

Recommendation: Increase Physical Availability on other Occasions

2.5 Limitations

As John Wanamaker said: “Half the money I spend on advertising is wasted; the

trouble is I don’t know which half.” Measuring advertisements effects is a difficult to

do accurately. Advertisement could stop a decline in sales, but this also means sales

figures will not change. To if an ad worked, single-source data is useful in which one

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keeps track of ads individuals have been exposed to and their buying behaviour

over time. It is also difficult to evaluate who buys more: heavy or light buyers? This is

a problem due to the law of buyer moderation, which states that over time, heavy

buyers will relatively buy less often and light buyers more.

3. Conclusion Summarizing the information presented in the main body, to stay ahead of the

increasingly strong competition in the fruity cider market place and keep growing,

Kopparberg is advised to focus its marketing and advertising strategy on increasing

mental and physical availability through the persistent use of distinctive assets in all

its marketing communications.

4. Recommendations 1. Use distinctive assets to create saliency;

2. Focus on market penetration in stead of loyalty;

3. Attempt to reach light buyers, but…

4. …don’t forget heavy buyers;

5. Increase mental availability by persistently communicating distinctive

assets;

6. Get noticed, recognized and processed;

7. Increase Physical Availability in pubs, bars and different occasions;

8. Deploy consumer data from loyalty programs.

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5. Sources Consulted Kotler, P. & Armstrong, G., Lloyd C. & Piercy, N. (2013). Principles of Marketing. Romaniuk, J., Sharp, B., & Ehrenberg, A. (2007). Evidence concerning the importance of perceived brand differentiation. Australasian Marketing Journal (AMJ), 15(2), 42-54. Sharp, B., & Ehrenberg-Bass institute for marketing science (Melbourne, Australie). (2010). How brands grow: What marketers don't know (Vol. 189). South Melbourne: Oxford University Press.

THANK YOU! TACK!