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                                                                        November 2016
Gallo Winery Embraces Integrated Marketing to Boost Sales

By Pat Lenius

Robert Ruijssenaars looked at E & J Gallo Winery’s marketing efforts two years ago and decided to make them more strategic and coordinated. That’s because the senior director of shopper marketing felt that plans were built in silos, and often ended up splintered. That situation would not spur sales growth for the 83-year-old company, which sells more than 100 brands through more than 100 retailers across the globe. Its well-known labels include Barefoot, Dark Horse and William Hill.

One of the company’s sales execs told Ruijssenaars that retailers don’t care about brands. They want help growing the category, and that is how Gallo can differentiate itself.

Ruijssenaars’ evaluation uncovered four biggest challenges the company had to overcome:

  • Its marketing and branding plans were more tactical and not strategic. “We need one idea everyone can rally around,” he said.
  • Consumer and shopper communications were not consistent. “If consumers of Barefoot visited a store, a website, checked an app, looked at a billboard or a print ad, would they get the same cohesive story? No.”
  • The cycle for the sales/retailer/marketing plan was not aligned.
  • The brand department would build the program that other departments would later bring to light.

Ruijssenaars was convinced that the future is integrated marketing, which combines consumer, shopper and trade marketing efforts. In other words, the brand team could tell the shopper marketers what they hear from the trade so more effective promotions can be executed.

This thinking led Gallo to embark on a study of integrated marketing, partnering with Syntegrate Consulting, formerly known as Shopper Intelligence. The test was still underway at the time Ruijssenaars and Jessica Krauser, Lead Strategist at Syntegrate, outlined it in a recent workshop at the Path to Purchase Expo, hosted by the Path to Purchase Institute in Rosemont, Ill.

Ruijssenaars was asked about results of the case study. “We have not yet seen an increase in sales, but I am convinced that we will. And we will see ROI go up. We had to spend a lot of money fixing things after the fact,” he said. “It’s not easy, but it is absolutely possible” to change from a siloed marketing structure to integrated marketing, he said. It just takes a lot of time and planning. He estimated it would be a year or two before everything was resolved.

Krauser noted that most organizations still break marketing into silos, all with different functions. When marketing plans are built, executed and measured in silos, she wondered how can companies be sure they are connecting with consumers and shoppers with the right message at the right time, and with the right emotional insight?

“We are trying to win attention and win dollars, but first we have to win their attention,” she said. “In the past, the definition of marketing was to generate transactions. Today it is much more than that. We are not just a need-based society but want-based. Everyone needs to think of the consumer and shopper together.” 

For Krauser, integrated marketing focuses on building a relationship through meaning. “First connect with manufacturers and shoppers at an emotional level,” she said. “Understand who they are and how they react to your product/brand/category. You can be a reflection of them. Engage them in the brand story. They need to feel your brand understands them. Then you can tell them your story and persuade them to purchase.”

Do you want to manipulate or inspire your customers? She asked. Price promotion is a manipulative tool. The winning formula is: connect + engage + inspire. Consumer and shopper marketing work together.

“Trigger a new purchase. This is where you can show your value,” Krauser said. “Someone who does not have your category on their list will choose to buy you. Or change usage occasions.”

She advised companies to create the brand’s emotional story collaboratively between all of the marketing disciplines at the beginning of the planning process.

Krauser listed key elements of an integrated marketing plan:

  • Growth Strategies: Buy your product. Buy more often. Buy more of your product.
  • Emotional and Behavioral Insights: What are the shoppers’ hurdles?  What do we need to overcome? Understand the emotional aspect. Think about who the shoppers are. Study consumption for insights. “If we are a reflection of who they are, they will start to engage,” Krauser said.
  • Communication Strategies: Awareness, concentration, usage, and purchase advocacy.
  • Story: What are those emotional truths about? How will your brand reflect those emotional truths?

Why waste shopper marketing dollars on driving awareness? Krauser asked. Let the brand marketers drive awareness and shopper marketers can drive the purchase.

Ruijssenaars shared information about New Amsterdam, Gallo’s three-year-old vodka that he called the second largest vodka brand in the country, outselling Absolut. With New Amsterdam, Gallo is going after the young, urban Millennial male who is worried about his social media profile, hangs out with the guys, and takes pride in being masculine. One of the sales partners sold the product into a regional chain of 90 stores, but Ruijssenaars said the marketing department did not do a good job of taking the story and translating it into a good sales program. The consumer target was a beach cruiser. That did not tie in well with an urban Millennial male. But this can happen in a siloed marketing structure, he said, where communication may be inconsistent and alignment between departments happens too late.

In the case study for integrated marketing, the goal was to drive awareness of the brand through education and a 360-degree campaign. Gallo wanted to leverage 187s (small bottles) to spur additional usage and to create compelling retail activations.

The shopper marketing department can take the lead on the move toward integration, he said, but may need outside help. “I quickly learned I was still looked at as a shopper marketing guy and the others did not believe I was really serious about integrating,” he noted. “We needed alignment up through senior leadership across all relevant disciplines.”

Gallo created a new campaign and integrated plan. With other brands, the company had to start from scratch, but in others it could build an integrated plan within an existing campaign.

An example of a Syntegrated plan:

  • Growth Strategy: Buy me, buy the brand
  • Initiative: Increase household penetration with new user
  • For Consumer: Less awareness of brand, drive consideration of usage occasions
  • Tactics: Print, PR, events, digital, social, mobile
  • For Shopper: Convert awareness into purchase. Reinforce consideration via usage occasions. Also, secondary merchandising, and digital.