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MANAGING FOOD & BEVERAGE COMPANIES
Tradition and Innovation
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KEY
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Important concept
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AGENDA
① Nurture Authenticity ② Innovating Value Propositions
③ Innovating along the Customer Experience
④ Product Lifecycle and Market Lifecycle
⑤ The Value of Brands
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AUTHENTICITY How can a company be considered
authentic by consumers?
Authenticity is a concept that lets the company reconcile TRADITION with INNOVATION
Why autheticity matters
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AUTHENTICITY “Brands seek their aura of distinction and pedigree through allusions to time and
place.” (Alexander, 2015, p.1)
“Authenticity may be defined objectively by the process of creation and the physical materials used in the creation process or by constructive values that are subjective and derived from users’ perceptions of authenticity (Chhabra, 2005)”
“Constructive authenticity allows for different interpretations of reality on the basis of consumers’ projections onto objects” (Leigh et al., 2006, p. 483)
“Existential authenticity is a product of postmodern consumers’ orientation toward pleasure which is brought into being through the “liminal process of activities” (Leigh et al., 2006, p. 483)
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AUTHENTICITY
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PRODUCT
AUTHENTICITY
PRODUCER
AUTHENTICITY
PRODUCT AUTHENTICITY There are three aspects define the authenticity of a product:
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TRADITIONAL METHODS OF PRODUCTION
HISTORY
TERRITORY
PRODUCT AUTHENTICITY
The production process influences
the product's overall evaluation.
A company that wants to exploit
Parmigiano Reggiano’s fame has to respect its strict
rules of production. 8
TRADITIONAL METHODS OF PRODUCTION
Source: h=ps://en.wikipedia.org/wiki/Parmigiano-‐Reggiano#/media/File:Parmigiano-‐Reggiano.png
PRODUCT AUTHENTICITY
Why are they different? The methods of production
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e.g.
source: http://winefolly.com/review/champagne-vs-prosecco/
Champagne and Prosecco are both sparkling. But what makes them so different and so authentic at the same time?
“We invented Franciacorta, and nobody can change this.” Paolo Ziliani VicePresident
Guido Berlucchi & C S.p.A.
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Building a new tradition
BeFood Interviews:
PRODUCT AUTHENTICITY
Having a long history behind a brand can increase the trust that consumers have towards it.
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Source: h=ps://www.google.it/search?q=since+1800&espv=2&biw=1422&bih=1025&source=lnms&tbm=isch&sa=X&ei=tX2BVbamGImUsAGz9L_4Ag&ved=0CAYQ_AUoAQ&dpr=0.9#tbm=isch&q=de+cecco&imgrc=XdYGMfIoZIzMQM%253A%3Bg7w1LKpJ48v-‐EM%3Bh=p%253A%252F%252Fwww.jdaliments.com%252Fwp-‐content%252Fuploads%252F2014%252F08%252FDeCeccoLogo.jpg%3Bh=p%253A%252F%252Fwww.jdaliments.com%252Fporeolios%252Fpasta%252F%3B1181%3B465
HISTORY
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The place where a product is produced can completely change its
image and thus its authenticity.
Sometimes territory works as a guarantee for the product:
consumers are more likely to trust it.
Source: h=p://www.vinosite.com/wp-‐content/uploads/2011/03/20-‐nagve-‐varieges-‐vino-‐blog.jpg
PRODUCT AUTHENTICITY TERRITORY
PRODUCT AUTHENTICITY
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Coca-Cola’s history
Starbucks built its authenticity
source: http://www.gutewerbung.net/wp-content/uploads/2014/05/McDonalds-Pictograms-Campaign-3.jpg |http://pad1.whstatic.com/images/thumb/9/91/Order-at-Starbucks-Step-2-Version-2.jpg/670px-Order-at-Starbucks-Step-2-Version-2.jpg | http://dismuke.net/howimages/cocacolasanta1938.jpg
e.g.
Are they authentic ?
PRODUCER AUTHENTICITY Three characteristics define the producer authenticity:
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History and Reputation à HERITAGE
Delivering high quality à COMMITMENT
Extra-goals besides profit à SOCIAL ORIENTATION
PRODUCER AUTHENTICITY Heritage à Refers to all the intangible attributes linked to a specific group such as history and reputation. Belonging to this sort of tradition give companies an extra-value.
Commitment à Refers to the passion and the dedication that companies adopt in producing and delivering their value.
Social orientation à Refers to any extra goals that do not concern profit which could also be an aim of the company. They often become part of the companies’ philosophy and values.
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AUTHENTICITY Authenticity includes
both:
Tradition
ü Exploiting the product authenticity
ü Based on history
Innovation
ü Exploiting the producer authenticity
ü Based on innovation
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AND
AUTHENTICITY
SWEDISH VODKA FRENCH VODKA
Producer authenticity can overcome territory issues.
17 source; http://wallpaperswide.com/absolut_vodka_2-wallpapers.html | http://www.vodkaycaviar.com/120-207-thickbox/comprar-vodka-grey-goose.jpg
GERMAN GIN JAPANESE WHISKEY
e.g.
BUILDING AUTHENTICITY The company has to identify which components of its
can be recognized by consumers
as
AUTHENTIC 18
HISTORY REPUTATION COMPETENCE
HERITAGE COMMITMENT SOCIAL ORIENTATION
COMMUNICATING AUTHENTICITY
Once the company has found the components to stress, it has to define a
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A consistent communication strategy works through a well coordinated use of different promotional means that are intended to reinforce each other. It is a comprehensive plan whose aim is to deliver the same message.
CONSISTENT COMMUNICATION STRATEGY
COMMUNICATING AUTHENTICITY
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“Consumers identify three different types of authenticity when they read adversiting: pure
(literal), approximate and moral.” (Beverland, 2008)
“[..] using advertising to project an image of authenticity is difficult because methods of mass marketing are believed to undermine such claims” (Beverland and Luxton, 2005)
“Stern (1994) posits that even though advertisements are representations of reality, they are still considered authentic if they "convey the illusion of the reality of ordinary life in
reference to a consumption situation" (p.388).” (Chalmers, Tandy D., 2008)
AGENDA
① Nurture Authenticity
② Innovating Value Propositions ③ Innovating along the Customer Experience
④ Product Lifecycle and Market Lifecycle
⑤ The Value of Brands
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VALUE PROPOSITION The customer value is composed of
a set of benefits that the organization’s offering can provide and the set of sacrifices that the customer has to make in order to enjoy the
benefits provided by the organization’s offering.
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Benefits represent the positive side of what consumers get from consuming a specific product/service: they can be either psychological, economic, or functional.
Sacrifices have to do with all resources available to the consumer that can be
invested in that specific product
rather than in alternagve products/acgviges.
VALUE PROPOSITION
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Simplification
Benefits
Sacrifices
Benefits
Sacrifices
Benefits
Sacrifices
How can a company innovate this ratio?
Increasing benefits
Decreasing sacrifices
VALUE PROPOSITION WINE INDUSTRY
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Yellow tale simplified the way consumers perceive wine.
Competition transformed wine into a
complex product.
Wine can only be consumed
by expert consumers.
source: http://www.yellowtailwine.com/media/141396/yt%20fullcol%20yel%20ban.jpg | http://www.totalwine.com/_static/webupload/730/2_93192015_3.jpg
e.g.
COMPONENTS OF VALUE PROPOSITION
Innovation can involve different components of the value proposition:
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PRODUCT DISTRIBUTION
PRICE SERVICE
PRODUCT
COMPONENTS OF VALUE PROPOSITION
Ingredients
26 source:https://m1.behance.net/rendition/pm/143147/disp/856981225715285.jpg http://www.myamericanmarket.com/components/com_virtuemart/shop_image/product/COCA_COLA_CHERRY__x6__400.jpg
Companies can modi fy the ir products by either adding or subtracting ingredients.
Method of production
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Companies can innovate their production method.
Source: http://www.brewdogbar.se/wp-content/uploads/BrewDog-core-range.png
PRODUCT
COMPONENTS OF VALUE PROPOSITION
Occasion of usage
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Companies can urge or cause consumers to consider their product for new occasions of usage.
PRODUCT
COMPONENTS OF VALUE PROPOSITION
Source: http://coolmaterial.wpengine.netdna-cdn.com/wp-content/uploads/2013/10/Heineken-Sub-1.jpg| https://www.philadelphia.co.uk/~/media/Philadelphia/en/Images/Brands/press_ad_06.jpg
DISTRIBUTION
COMPONENTS OF VALUE PROPOSITION
29 Source: http://a1.mzstatic.com/us/r30/Purple3/v4/ca/7c/fd/ca7cfd3e-27bf-71ca-d2ad-3ec6f3c64b17/icon320x320.png http://lincolnpizza.co.uk/wp-content/uploads/2011/09/Late-Night-Window-Cling-lr_2.jpg
Distribution identifies the way that the product is provided through. Companies can renovate the way that consumers buy the product or the service.
COMPONENTS OF VALUE PROPOSITION
30 Source: http://www.hibachisuperbuffetnewbern.com/images/buffet_menu4.png | http://1.bp.blogspot.com/_mpbRVvqlUmQ/TPR0Ech3CPI/AAAAAAAAAHY/DY-rbDRcFHU/s1600/menu3.png
Companies could introduce new consumer-oriented pricing strategies based on market segmentation.
PRICE
COMPONENTS OF VALUE PROPOSITION
31 Source: http://www.nutella.com.au/static/nutella/images/products/nutella-products.png
Companies can give c o n s u m e r s t h e opportunity to enjoy the product or the service based on their specific needs and occasion.
SERVICE
“The restaurant is like a temple; holy food means happy customers.”
Pietro Leemann Owner and Chef
Joia
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Innovation in the kitchen
BeFood Interviews:
AGENDA
① Nurture Authenticity
② Innovating Value Propositions
③ Innovating along the Customer Experience
④ Product Lifecycle and Market Lifecycle
⑤ The Value of Brands
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CUSTOMER EXPERIENCE The customer experience is composed of four stages:
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CONSUMPTION
PURCHASE
POST-CONSUMPTION
PRE-CONSUMPTION
CUSTOMER EXPERIENCE
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PURCHASE EXPERIENCE
PERCEIVED VALUE
EXPECTED VALUE
CONSUMPTION EXPERIENCE
EXPECTED VALUE
PERCEIVED VALUE
(DIS)SATISFACTION
PRE- CONSUMPTION
EXPERIENCE
POST- CONSUMPTION
EXPERIENCE
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Absolute AD
Source:https://postmedialeaderpost.files.wordpress.com/2014/07/coke-can-e1405370395240.jpg | https://artitudeusj.files.wordpress.com/2013/04/absolut004.jpg
Can an advertising campaign
drive consumer choices?
Pre-Consumption
CUSTOMER EXPERIENCE
CUSTOMER EXPERIENCE Purchase
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Subway
Source: http://www.wine.com/v6/Dom-Perignon-Limited-Edition-Metamorphosis-Rose-in-Gift-Box-2003/wine/134791/Detail.aspx
CUSTOMER EXPERIENCE Consumption Experience
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Dinner in the sky
Source: http://www.nuovetendenze.net/wp-content/uploads/2013/09/dinner_in_the_sky.jpg | http://www.jagermeister.com/client/styles/assets/stages/visual/en-int/brandstage-product-int-3.jpg
CUSTOMER EXPERIENCE Post-Consumption
39 Source: http://www.sararosso.com/wp-content/uploads/SaraRosso_MyNutellaStory-1024x583.png | http://www.bullbrand.co.za/your-story
AGENDA
① Nurture Authenticity
② Innovating Value Propositions
③ Innovating along the Customer Experience
④ Product Lifecycle and Market Lifecycle
⑤ The Value of Brands
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TIME Tradition and innovation should be seen within
the concept of time.
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PRODUCT LIFECYCLE
MARKET LIFECYCLE
MARKET LIFECYCLE
A market consists of a set of actors who interact to exchange goods, services, reputation and information. These activities and additional
actors who exert their influence form the basis for this interaction
The market lifecycle relates to different stages in the life of a market based on a time unit (weeks, months, or more often years) and the
supply-demand dynamic (I.e. sales). The latter can be expressed with product units or values.
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MARKET LIFECYCLE
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SALES
TIME
Unlikely to
happen!
MARKET LIFECYCLE
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Introduction: In this stage sales are usually limited and sale growth is slow. There are only a few competitors (in some cases only the innovator who created the market) and not many customers. The objective of competitors in the market creation stage is customer education. Growth: It is the result of the combined effect of new customers, who take advantage of the experience and word of mouth of the original customers, and new competitors who are prompted to enter the market thanks to growth opportunities. The objective of competitors is to follow market expansion, facilitating further dissemination of product knowledge and building a differential image.
MARKET LIFECYCLE Maturity: When sales stabilize and sales growth by and large stops. Since potential customers are now actual customers, product purchases tend to be substitutions and there are few entirely new customers. Maturity for most of the markets is the longest stage, so sales may fluctuate somewhat due to changes in the macro-context.
Decline: This stage occurs when market growth decelerates ever more rapidly, dropping to the levels of the introduction stage and dipping lower, even to the point of disappearing. Decline in this context is mainly theoretical, because after expansion and contraction, along with competitors relaunching and revitalizing their products, very rarely does a market actually reach this stage.
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PRODUCT LIFECYCLE
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TIME
Likely to happen because products can lose
their value
SALES
DYNAMIC BETWEEN LIFECYCLES
Dynamic between the two life cycles is fundamental for companies to take decisions.
The lifecycle is an endogenous process.
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Product
TIME
SALES
PRODUCT LIFECYCLE The shape of the product lifecycle is influenced by:
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CONSUMERS COMPETITORS
TIME
SALES
Consumers
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TIME
Innovators
Early adopters
Early majority
Late majority
Laggards
SALES
Consumers
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Innovators: Have distinctive traits: a low aversion to risk, a tendency to be non-conformists, and a strong desire for social distinction, close connections with sources of innovation, and marked interest in new trends in general.
Early Adopters: Have a greater aversion to risk (especially social risk), and more intense social connections with other customers; they are more often opinion leaders. These are the people who set the much more powerful imitative dynamic, the bandwagon effect, in motion.
Consumers
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Early and Late Majority: Both of these groups, at varying levels of intensity, are adverse to risk and as such not particularly taken account for by innovations; they tend to be conformists and need to see that other people have already adopted the product before they do the same. Laggards: Represent a minority of the market (numbering about the same as the innovators and early adopters put together). These consumers are very resistant to change; for the most part they are not opinion leaders and are very strongly tied to tradition and habit.
Competitors
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Imitation-Differentiation Game New entrants have to imitate but also try to
innovate with respect to incumbents
It stimulates sales overall
Innovate:
LAUNCH A NEW PRODUCT
Renovate Tradition:
REVITALIZATION
Companies have to choose whether to
OR
PORTFOLIO SOLUTION
Companies may have both innovation and tradition
in the same portfolio, offering both
conservative and innovative products.
53 Source:http://upload.wikimedia.org/wikipedia/commons/c/cb/Coca-Cola_Life_0.5_liter.jpg | http://stander.it/wp-content/uploads/Coca.jpg
AGENDA
① Nurture Authenticity
② Innovating Value Propositions
③ Innovating along the Customer Experience
④ Product Lifecycle and Market Lifecycle
⑤ The Value of Brands
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BRAND A brand is a set of symbols
that distinguishes a product of a company from a competitors’ one. “A brand is a set of mental associations, held by the consumer, which add to the perceived value of a product or service (Keller, 1998).
These associations should be unique, (exclusivity), strong (saliency) and positive (desiderable).*”
*JN Kapferer, “Strategic Brand Mangagement” pg. 10, 2008
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BRAND Food and beverage products are experience goods
Brands serve as a quality clue
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Knowing the brand
helps consumers, especially who are not experts in the
field, make a choice
source: http://wijnbloggers.nl/wp-content/uploads/2012/12/champagne-veuve-clicquot.jpg ; http://www.winereviewonline.com/images/labels/moet_chandon.jpg
BRAND EQUITY Brand Equity: The extra value that the brand adds to the product when the
customer knows the brand.
It is composed of:
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Brand Awareness
The extent to which a brand is recognized by
consumers
Brand Image
The judgment that consumers have
towards the brand
POSITIONING
Without a difference there is no preference.
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Positioning: Where your product stands in respect to others offering similar products in the mind of consumers.
POSITIONING
59 Source:http://www.cosmo.com.ua/upload/image/marc-jacobs-diet-coke6.jpg https://wanphing.files.wordpress.com/2011/05/diet_pepsi_skinny_can_ad.jpg
Can you perceive any difference?
e.g.
BUILDING A POSITIONING In order to build a positioning
companies should link to the brand some associations which have to be:
ü F A V O R A B L E
ü U N I Q U E
ü R E L E V A N T
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BUILDING A POSITIONING
Primary Associations: Are associations that are directly connected to the brand such as:
- Attributes of the product
- Benefits provided by the product
- Value behind the product
- Competitors
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BUILDING A POSITIONING
Secondary Associations: are associations that are linked to third parties that have a link to the brand, such as:
- Awards
- Events
- Celebrity Endorsement
- Characters
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- Country of origin
- Co-branding
- Distribution channels
BRAND ELEMENTS Brand Elements: are visual elements that distinguish the brand from
competitors’ ones.
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LOGO &
SYMBOLS
CHARACTER URL
JINGLE
SLOGAN
PACKAGE
NAME
BRAND ELEMENTS Brand elements provide value for consumers in two different ways:
¤ They help consumers making choices. ¤ They provide consumers with meanings.
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LINKS Why autheticity matters
Why are they different?
The methods of production
Starbucks built its authenticity
Coca Cola history
Yellowtail
Coca Cola AD
Coca Cola AD - vimeo
Absolute AD
Subway
Dinner in the sky
Jager Bond – vimeo
Jager bond
Berlucchi
Joia
Pinterest Board
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