In post number one on the Blue Ocean Strategy Six-Paths Framework, we discussed looking across alternative industries to your own. We niched down the discussion a bit to focus on the sampling, tasting, and activation segment of the spirits, wine, and beer industry. We’ll continue our focus on that segment in this post as well.
As a refresher, here is a graphic on the entire Six-Paths Framework from Blue Ocean Strategy.
In step two, or the second path, one looks across strategic groups. Strategic groups within Industries are groups of organizations within an industry that pursue a similar strategy. Strategic groups include a hierarchical order built on two dimensions, price and performance. Thus by looking across strategic groups, an organization has to find out why buyers trade up for the higher group, and why do they trade down for the lower one.
At the heart of the second path is the necessity to ask questions. Tough questions. You’ll find this true of all Blue Ocean Strategy processes. The questions in path two are these.
Why do buyers trade up for a higher group?
And question two, why do buyers trade down for a lower one?
Remember the higher and lower answers are based on price and performance.
Let me give you an example.
As a vodka drinker, there are brands that are considered premium. Ketel One, Chopin, Grey Goose, etc. There are brands that are considered less than premium. There are brands that are just plain nasty and sold primarily as Well brands for high volume bars who care nothing about the drink, only the margins.
I’ve found that while I like vodka, it’s my body chemistry or my perception of body chemistry that has lead me to only buy 7 times or more distilled vodka. This leads me to Platinum, Score, Deep Eddy, or perhaps Western Sun. Tito’s branding and their “hand-crafted” narrative do nothing for me if it’s not distilled 7 or more times. Many say it makes little difference but when the price point is so dramatically different, I trade down in price for equal performance.
The value propositions in Deep Eddy, Score, and Platinum make a great case for why in the eyes of Blue Ocean Strategy, these brands are winners.
In the world of tastings, sampling, and activation of spirits, wine, and beer brands, looking across strategic groups is interesting. Our Blue Ocean Strategy visualization today looks at how brands look at their agency relationships and marketing plans.
We ask, what may be learned by looking across buyer groups of competing brands? What may be learned by viewing agency work that’s conducted on behalf of brands serving other buyer groups that compete with yours?
If you’re asking, great, how do I find alternative strategic groups? Think about customers or buyers in the context of past customers who have left your business. They bought up to something better or they scaled down to something perceived as less than.
Shared Spirits Marketing in conjunction with Vsite Technologies have methods to identify the customers who have traded up or traded down from your brand.
In post three, we’ll look at Path 3: A look across buyer groups. There are more moving parts to the buyer journey than most brands realize.
If you’re interested in further explanation of the Six-Paths Framework from Blue Ocean Strategy, I’m prepared to assist. Visit https://shermanmohr.com for a complimentary strategic canvas. It’s literally a high-value takeaway I’ll share with no obligation on your part.
Sherman Mohr is an Insead Blue Ocean Strategic Institute Certified Blue Ocean Strategist residing in Nashville, TN.