Reinvention needed for baijiu makers

By Mike Bastin (China Daily) Updated: 2014-05-27 07:12

It's urgent, therefore, for Wuliangye to begin to develop a portfolio of baijiu-based product brands.

Development of such a portfolio will ward off the need for drastic price-cutting for its current luxury brand and put an end to an inevitable and possibly fatal decline in brand value.

Wuliangye could follow the examples of several other alcohol brands that found themselves in a similar predicament and were forced to shift consumer tastes and freshen up their brand images.

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They need look no further than the incredibly imaginative repositioning in recent years in the United Kingdom's cider industry.

It was not that long ago that cider also had a negative image. It was often perceived as "the poor man's Champagne" and "a drink for older people".

But in recent years, the UK alcoholic beverages market has included numerous branded cider products targeted at the heavier-consuming younger generations. These products also have a "cool" and "fashionable" image.

Wuliangye could leverage its mighty brand equity in much the same way, and it could consider a branded baijiu-based product, possibly with a soft drink mixer, targeted at younger, heavier-drinking consumers.

The spirits industry in the UK generally is also fighting an image problem, and it has also shown innovative repositioning and rebranding. For example, there's Bacardi Ltd, maker of a white rum, rebranding itself with Bacardi Breezers.

Wuliangye should follow Bacardi's lead with a baijiu-based equivalent, also presented with a colorful, fun brand appearance, valued by younger generations.

Development of a portfolio of branded, baijiu-based bottled products will not only reinvent the baijiu product and Wuliangye's corporate brand. It will also introduce a brand-and market-oriented culture to the company.

And, price-cutting of the traditional, luxury product targeted at older consumers won't be needed.

Ambition, innovation and a strategic brand management plan that plots the building of a portfolio of baijiu-based branded products adapted for different market segments is the way forward for Wuliangye.

The author is a visiting professor at the University of International Business and Economics in Beijing and a senior lecturer on marketing at Southampton Solent University's School of Business. The views do not necessarily reflect those of China Daily.