There has been no better time to identify new problems for brands and companies than in recent months. With over 20 million jobs lost in the US and the globe on some measure of “stay at home” order, the rules of most marketing games have changed.
I am Co-Founder of a company that built a wonderful technology allowing brands in the spirits, wine, and beer industries to associate marketing spends through our agency. Its primary function was/is to be a “Venmo for Cocktails” so to speak. The cool feature that is game changing is our ability to put drink credits into the accounts of brand ambassadors for them to share with others. Sounds cool. As of March 2020, it’s largely irrelevant. Not for sure how long but it will be an uphill slog. We are now called on to redefine the alcohol industry problem.
For decades, the problem was simple. How does one build a brand in the alcohol industry?
On-premise. Meaning restaurants, bars, venues. Second way, restaurants, bars, venues, events.
When the industry thought it was getting creative, and to some degree it was, it utilized experiences. Alcohol suppliers and brands spent billions in agency dollars to develop, promote, and host experiential tastings, pop ups, environments, etc, to build their brands. Much of this was done in collaboration with restaurants, bars, and venues thanks to the limits of alcohol licensing.
Brands even built Brand Embassies that became tourist destinations and influencer hangouts. https://www.interbrand.com/best-brands/best-global-brands/2016/sector-overviews/alcohol-brands-are-lifting-millennial-spirits/
One agency in 2017, recent history is quoted as saying, “Even in the digital age, nothing compares to personal interaction; one recent study found that face-to-face interactions were 34 times more successful at generating action than email requests.
Get your brand on the ground by sending a team of brand ambassadors to the most popular and relevant bars in your target markets. These spokespeople will establish relationships with bartenders, buy drinks for bar goers, and introduce consumers to your product in new and exciting ways. Watch your sales and brand awareness levels increase as these in-person efforts pay off.”
Sorry, those days are over. For now and the immediate future, they are done. Perhaps not for good. There will be a vaccine one day and as short term human memory goes, there will be uncontrolled crowds at bars again. For now, the brand building money is parked.
So in this case, the problem to be solved prior to March 2020 was brand building. The solution or where the money was spent was on experiences, on-premise promotions, and events. The problem to be solved for spirits brands in April 2020 is brand building. The solution however is gone.
“This moment in time make redefining the problem easier than ever before. The solution, not so much.”
Why redefine a problem? Problem redefinition allow organizations to challenge assumptions. When leaders challenge assumptions, a reconstruction of industry boundaries takes place. This allows disruptive and non-disruptive creations to take place.
So in our example above, the question may start with, how. How might a spirits brand build without availability of the tradition restaurant and bar business previously available?
Every industry that has been newly conceived, grown, monetized, and built to something exceptional came from someone either intentionally or accidentally, redefining and solving an industry problem.
Some of these redefinitions are taking place in real time. Alamo Draft House in Austin TX is streaming movies to its audience of formerly “in-house” patrons. This piece from Deadline.
“Since theaters have closed their doors due to the COVID-19 pandemic, the Alamo Drafthouse has been proactive in celebrating film by presenting and giving access to films that cater to their cinephile audiences. At the same time, the continue to advocate for arthouse theaters. They introduced “Alamo-At-Home” which brings the spirit of the Drafthouse into homes through its signature programming series “Terror Tuesday” and “Weird Wednesday. The Austin-based company is also participating in Virtual Cinema, an initiative led by distributors like Kino Lorber, Film Movement and Magnolia Pictures that allows independent theaters to digitally offer new films to their guests.”
Again visiting the spirits and wine industry, virtual tastings are delivering new value innovation to fans of brands and product categories. Brands are wising up fast and sponsoring these events knowing they expose new customers in numbers similar to bars but with better metrics and KPI’s for follow-up marketing.
When innovators offer breakthrough solutions for existing industry problems, disruptive creation generally follows.
Identifying new problems or capturing new opportunities generally leads to non-disruptive creation.
Redefining and solving existing problems will necessitate drawing on elements of both disruptive and non-disruptive creation.
How might your company redefine a problem it faces? Is the current market environment redefining the problem for you?
If your company has been challenged by current events, it is safe to say, market boundaries, industry problems, and previously regarded assumptions are all now shifting sand. This is opportunity for you. Opportunity for you and your team to ask questions leading with how. How we will capture new opportunities? How will we adjust to a new normal? How will we brand build in additional channels? How, how, how, how, how?
If you have questions about how Blue Ocean Strategy works in trying times, schedule a call. I am interested in your business. I am interested in your problems and would count it an honor to share time with you. I do a complementary one-hour zoom call for all things Blue Ocean. Schedule that call here.
Sherman G. Mohr is an Insead Certified Blue Ocean Strategist working in a number of industries. He’s a tech and marketing startup founder and currently works in spirits, wine, Telehealth, pet supplements, and other industries.