Scotch Whisky in China: A Taste of the Good Life
1. Why are Diageo, Pernod Ricard, and other marketers of global spirits brands localizing advertising campaigns in emerging markets?
Diageo, Ricard, and other marketers of global spirits brands are localizing their advertising campaigns in emerging markets because no two countries or their inhabitants are alike. Every country has a diverse set of consumers that have specific tastes and preferences based on geographical location, religion, age, religion, sex, education, and social and economic class as well as consumer perceptions which global brands, specifically global spirits brands, should pay close attention when choosing advertising campaigns to promote their product(s).
The advertising campaign each spirits brand uses in their host country is often misinterpreted in global markets and therefore must be localized to that specific market. Each brand must know and understand how their target audience will interpret the message their advertising campaign is sending, which is done by understanding culture. In the case of Scotch whisky, a drink widely associated with “aspirational goals such as success and achievement,” global spirits brands advertising in emerging markets, such as China or India, must understand “the things that constitute “achievement” vary from culture to culture” as BBH staffers for the Jonnie Walker brand does (Keegan & Green, 2011).
Americans are known to constitute wealth with income and are more materialistic while other cultures “define success more in terms of whether their work supports their family life” (Segar, 2011). An example of cultural interpretation or “constitution” of wealth included in the case is that of China’s.
In China “the self-satisfaction that goes along with achieving a goal may not be enough; acknowledgement by peers is also important” (Keegan & Green, 2011). Any global spirits brand seeking to advertise and sell in China must create a local marketing campaign to effectively create brand awareness. BBH, Britain’s Bartle Bogle Hegarty, advertising agency is noted in the case for doing just that. The brands global logo: a red-coated, top hated man in midstride with the tagline “Keep Walking” which conveyed “achievement” in their local marker was changed to two golfers “hitting increasing extreme shots” from a ball that is underneath a crocodile for their local advertising in China.
As emerging markets GDP continue to increase in emerging markets so too will the aspirational classes and the thirst for Scotch. Each global spirits brand must be prepared to use a more local strategy for advertising verses a standard global approach to promote brand awareness and gain control of the market.
2. How do consumption habits for products such as Scotch whisky vary from country to country?
As cultures vary from country to country, region to region, the consumption habits of each culture vary as well. This includes the types of Scotch whisky consumed, “the occasion or setting in which the consumption occurs and the population subgroup for whom drinking is considered acceptable” (Linda A. Bennett, Carlos Campillo, & C.R. Chandrashekar, 1994).
The Chinese culture consumes products such as Scotch whisky for celebration of the happiest times in their lives while American or Western cultures more for social reasons or a style and attitude.
An example of consumption based on population subgroups is given in the case as the director for Diageo China states “The size of the market and the complex demographic composition leads to a totally different consumption habits and patterns in different parts of China” (Keegan & Green, 2011). He goes on to describe the different segments which include the “guanxi men, who are status driven men ages 35 to 45” whose consumption occurs during networking as they spend the majority of their time “setting up business deals” (Keegan & Green, 2011). Another group for Diageo’s China market segmentation and consumption category is women; list the same age bracket as the guanxi men, who are “strong and independent” (Keegan & Green, 2011).
As stated in previous text, as emerging markets GDP continue to increase in emerging markets so too will the aspirational classes and the thirst for Scotch. This and the relaxation of legal issues as the world evolves will control and ultimately increase the consumption habits of Scotch whiskey consumers globally.
3. Why are some spirits products and brands strictly local, while some have global potential?
The choice to remain strictly local or explore their potential in the global market is determined by several factors within the brand itself. This all based on the resources the brand has that will or will not allow them to expand globally given the opportunity. This also includes the brands ability to understand and respond to their target culture in their product design and advertising. There are numerous local spirits brands in emerging markets that produce spirits specific to their culture. This will hinder then if ever they decide to expand in the global markets. On the other hand global brands that have captivated such a huge market share in their home country generate the capital to thoroughly research potential markets and adjust their advertising to successfully operate within or import their products through localization.
