Ch. 8 - Segmenting and Targeting Markets

   
     When it comes to segmenting the market, Dom Perignon relies heavily on their centuries of experience in dealing with specific target markets to appropriately market and sell their champagne. It is important that marketers for Dom Perignon assess their market segments carefully so as not to waste time attempting to sell to the wrong groups. Specifically, marketers for Dom Perignon are mostly concerned with geography, age and income. Marketers for the company know that in terms of geographic segmentation, luxury champagne will inevitably sell better in certain locations versus others. For example, a high end restaurant in Las Vegas is far more likely to exhaust a case of Dom Perignon than a restaurant of relatively the same caliber in Nebraska. Marketers know that restaurants and wine shops in large cities, such as Las Vegas, tend to sell more champagne because of their larger populations and generally higher income. That is not to say that high end restaurants in more rural areas like Nebraska should not be targeted, however marketers know that they must put forth more effort in high-density areas in order to ensure more sales and subsequently higher profits.
      As with the marketing of any alcohol, market segmentation in terms of age will always be an important factor. In the US, legal drinking age is 21 and therefore alcohol must be marketed to this group specifically. Not only is it illegal to market alcohol to minors, it is also a fruitless endeavor on the part of the marketer. If Dom Perignon were to market their product to those under 21, even if the marketing were successful, the target market would be unable to purchase the product by law.
      Perhaps the most important factor in determining market segmentation for Dom Perignon is income. Because Dom Perignon is a luxury brand item, and therefore very expensive, the income of those being marketed to must be highly considered. Dom Perignon is marketed to only those who can afford it, namely the upper and upper middle class. Dom Perignon has made it abundantly clear who their fiscal target market is, and does not offer coupons, deals or discounts in order to make it more affordable. Their prestigious and specific market is part of the reason they have gained such a favorable reputation in the champagne world.
      Psychographic segmentation is also very important when marketing for Dom Perignon. Potential buyers' personalities, motives and lifestyles are all highly considered. When a consumer purchases a bottle of Dom Perignon, they are inevitably making a statement about the kind of life they lead, whether it is accurate or not. Because Dom Perignon has become a status symbol throughout the world, the consumer is projecting an image about themselves that is prestigious, wealthy and powerful. Personality-wise, the average Dom Perignon consumer is affluent and high-class. Their motives are status-related and their lifestyle is opulent, carefree and indulgent. All of these factors contribute highly to Dom Perignons market segmentation and help the marketer to hone in on a very specific target market.
      Because Dom Perignon is a fine champagne and not just a sparkling wine, they have a niche market in the wine world and have positioned themselves as the pinnacle of excellence. In the eyes of Dom Perignon, they are the end-all-be-all in terms of champagne; a caliber of wine that others companies strive to be. They have positioned themselves firmly at the top, an element of product differentiation that has kept their product in high demand for centuries. As far as Dom Perignon is concerned, they have no serious competition to speak of in terms of quality champagne and therefore have built an empire based on being the business model that other wine producers can only hope to be. Because they have established themselves so steadily at the top of the food chain, there is no room for Dom Perignon to reposition themselves as a company in the near future.

Ch. 11 - Developing and Managing Products

      Recently, many alcohol companies have attempted to introduce new product lines into already existing markets. Companies like Smirnoff and Absolut vodka are creating a myriad of flavor infused vodkas that have hints of everything from whipped cream to jalapeños. Likewise, whiskey and bourbon companies like Jim Beam and Johnny Walker use different distilling processes in order to offer different product lines at different prices. New and interesting ideas can be introduced into these markets because spirit manufacturers are able to develop their technique over time. However, unlike spirit manufacturers, this kind of trial and error strategy does not work for Dom Perignon or for wine producers in general. Because sparkling wine is such a niche market, it would be unwise for producers to jeopardize Dom Perignons reputation by attempting to make it new or different. It harkens to the saying "if it ain't broke, don't fix it". Dom Perignon is committed to creating the best tasting champagne in the world, therefore they are constantly striving to improve their product any way that they can. While each vintage is unique in its own way, that does not mean that each vintage is necessarily a new product. Because wine makers rely on the quality of their grapes to produce a superior wine, a large part of the production is heavily reliant on factors that are out of the producers' control.  Climate, insects and vine rot are all variables that producers take precaution against but are unable to fully eliminate. It is for this reason, that Dom Perignon must take extra care to produce a quality wine. Once a harvest is used up, it is gone forever and marketers for Dom Perignon fear that if the outcome of a new product is unfavorable, they will inevitably lose money on a product that could easily have succeeded had it not been tinkered with.
      It is not to say that Dom Perignon produces one product and one product only however. Prices for the champagne do vary, and if the grapes have a particularly good year, the price for that vintage goes up substantially. However, as mentioned earlier, these are not new products and the quality of a vintage is based largely on the climate in the region at the time of harvest. To ensure a well rounded product line, Dom Perignon  currently offers a rose varietal, a vintage 2003 and an oenotheque. Each style of champagne varies in price and bouquet, ensuring that there is something for every potential buyer. Occasionally, Dom Perignon will use collaborations with artist types in order to liven up the sale of a vintage. Again, while not a new product, it is a way to reconfigure the brand image and potentially attract new clients to Dom Perignon.

Ch. 16 -Integrated Marketing Communications

     
     When it comes to sales promotion, long-standing companies like Dom Perignon rely heavily on their already established reputation rather than on traditional advertising techniques like television, radio, or billboards. Luxury brand companies rarely give things away for free for fear that offering discounts or free items with a luxury purchase could place the company in a position where they look as if they need to give something away in order to make a sale. Dom Perignon is a company with a projected image of elegance and prestige. Giving away promotional products could potentially compromise the integrity of a company that has worked very hard to maintain a prestigious image. Centuries of marketing Dom Perignon has put them in a unique position where word of mouth precedes non-verbal promotion or advertising. The average consumer can only name a handful of luxury champagnes and Dom Perignon very often tops the list. This kind of favorable publicity is something that can only be achieved through many years of promotion and advertising, that of which has changed greatly throughout the time that Dom Perignon has been in operation. No amount of advertising money can buy this kind of long-lasting promotion.
      While many people do purchase individual bottles of Dom Perignon for personal, non-business use, the company makes most of their money selling cases of Dom Perignon to restaurants, bars, wine shops and nightclubs. This kind of personal selling by wine and spirits representatives turns an otherwise personal product into a business product purchased by the buyer. These representatives are able to offer the buyer a sales promotion, namely discounts on over-seas tax, to encourage the buyer to purchase a certain amount of cases to sell in store.

      As mentioned earlier, interpersonal communication is the driving force in the marketing of Dom Perignon. With the exception of very few print ads, mass communication is almost never used when attempting to sell or promote the product. Representatives can often influence current and potential buyers based solely on the companies reputation and thereby putting the seller in the position on the sender. The buyer, or receiver, can then give the appropriate feedback to the sender based on his or her positive or negative experience with the champagne. Because Dom Perignon is a very expensive champagne, buyers and consumers often have to go through an extensive thought process when deciding whether or not to buy a single bottle or an entire case. Typically, because Dom Perignon is such a mature company, consumers need little more than to be reminded that the champagne still exists. In terms of the AIDA concept, Dom Perignon is mostly concerned with the action that they take in terms of promotion. Little attention needs to be drawn to Dom Perignon, many consumers have an interest in it, and avid champagne drinkers certainly have a desire for it. It is up to the marketer or promoter to make sure that the consumer takes the final step and purchases a bottle or case.  

Ch. 10 - Product Concepts

        Dom Perignon is a specialty product with a prestigious and high-end name associated with it. Those who purchase Dom Perignon rarely do so on a whim and may have to do some research and planning in order to find somewhere to purchase a bottle. Dom Perignon itself is part of the group LVMH, a group specializing in high-end goods including wines, spirits, leather goods, fashion, perfume, watches and jewelry. LVMH boasts a unique product mix width among their wines and spirits which include Moet & Chandon, Krug and Hennessey to name a few. Having a diverse product mix allows LVMH to sell a wide variety of wines and spirits to potential buyers, Dom Perignon included. Because Dom Perignon is a vintage cuvee, each product in their product line is essentially unique for that year and cannot be recreated, regardless of what demand calls for. According to Dom Perignons website, their current product line includes a rose 2000, a vintage 2003 and two oenotheque 1996 and 1990 vintage and rose respectively. Additionally, Dom Perignon has added a specialty bottle designed by director David Lynch to their product line for the rose 2000 and vintage 2003 champagnes.  
       Dom Perignons brand name speaks to excellence and luxury. Many people recognize the name as being the gold standard for luxury champagnes, regardless of whether or not they have tried it. This kind of brand recognition is due in part to cooperative branding by Moet & Chandon. When Moet & Chandon first acquired Dom Perignon in the 1950s, the two champagnes appeared side by side in their print ads. This was done in order to create a positive association with Moet & Chandon and the lesser known Dom Perignon. Once Dom Perignon gained a reputation for excellence, it was able to carry its own brand name thanks to Moet & Chandon. While the average consumer can't necessarily afford to stay brand loyal to Dom Perignon, buyers from restaurants and nightclubs tend to stay brand loyal to high end champagnes like Dom Perignon and will keep their establishments stocked with the fine champagne as long as it is selling.
        Another reason that Dom Perignon comes out ahead above the rest in regards to brand recognition is their unmistakeable and iconic packaging. Since its inception in the early 1600's, Dom Perignons gold shield has remained virtually unchanged on every bottle. Each bottle boasts the prominent shield, making it the most recognized logo of any champagne manufacturer. Many recognize the shield as a symbol of high quality champagne and excellence. The gold shield has become synonymous with wealth and prestige, which is exactly the kind of image that Dom Perignon has strived for for centuries. Noted artists like David Lynch have undertaken the privilege and task of redesigning the logo and bottle, while it still remains recognizable. When Dom Perignon created tribute bottles to artist Andy Warhol, the iconic shield appeared in bright blue, pink and green in order to honor the late artist. In both cases however, the bottle and logo designs keep the original integrity of a time honored and classic packaging.

 

Ch. 18 - Sales Promotion and Personal Selling

      

      Fine wines and champagnes are generally not the kind of items that average consumers purchase with coupons, rebates or special offers. Dom Perignon is no exception, and consumers often find themselves paying full price when purchasing this coveted champagne. Because Dom Perignon is a luxury brand item, marketers for the company are weary about lessening the brands name by offering significant discounts on their product. Although Dom Perignon does not subscribe to sales promotion directed at the consumer, it does offer sales promotions when dealing with their wholesalers and retailers. Because Dom Perignon exports most of the bottles that they produce, they are able to offer retailers outside of France cases of champagne less the tax they would normally pay. A tax free discount on multiple cases of Dom Perignon can mean hundreds of dollars saved for retailers and large wholesalers. Nightclubs and restaurants are also privy to this tax exempt discount provided they meet the minimum requirement of bottles purchased.

      Representatives for the wines and spirits of Dom Perignons parent group, LVMH, rely heavily on personal selling and relationship selling in order to ensure that retailers and restaurants keep their products in stock. LVMH also represents notable champagnes and spirits such as Moet & Chandon, Hennessey,  Veuve Clicquot, Belvedere vodka and Krug. Typically, representatives for LVMH will have standing accounts with different wine shops, restaurants, nightclubs or wholesalers that have agreed to stock and sell the alcohols that LVMH offers. These representatives tend to have long standing personal relationships with those who buy alcohol for these different companies. When dealing with a potentially perishable luxury brand item, it is imperative that those doing the buying feel comfortable and secure when purchasing large amounts of expensive alcohol should something go wrong. Through these long standing buyers, representatives are able to network appropriately and gain qualified leads in order to secure more accounts within the given industry. LVMH representatives are then able to do the necessary research and preapproach for companies that appear promising for future accounts.                

Ch. 17 - Advertising and Public Relations

     
       Those who advertise for Dom Perignon have the unique task of creating and maintaing an iconic and prestigious image for their company outside of the more traditional marketing approaches. Because Dom Perignon is a luxury item, advertising on billboards, television, radio, or newspapers could potentially "cheapen" the brand, thus tarnishing a favorable reputation that the company has worked centuries to create. Instead, Dom Perignon uses their easily recognizable name and status to collaborate with artists, celebrities and events in order to advertise and promote their product.
        After Moet et Chandon acquired Dom Perignon in the 1920's, the company advertised their champagne in traditional print ads, often with the two iconic bottles appearing side by side. Throughout the 50's and 60's Dom Perignon and Moet et Chandon maintained these print ads, often advocating purchasing the champagne for special events such as birthdays and anniversaries. Because Dom Perignon was relatively new to the United States it often took a backseat to the more easily recognizable Moet et Chandon bottle in these print ads. Slowly however, Dom Perignon acquired a reputation for excellence due in part to their close proximity to Moet et Chandon. The phrase "Come quickly, I am drinking the stars" became widely known as a quote from Dom Pierre Perignon himself. However, this slogan was created nearly 200 years after Perignons death by advertising executives and appeared in their early print ads. This "quote" became synonymous with Dom Perignon and inevitably helped to jumpstart the brands popularity.

        Decades later, Dom Perignon continues their print advertisements but in a far less traditional manner than in the 50's and 60's. Their current print ads appear in high end fashion magazines like Vogue, Harpers Bazaar and W. Indeed, Dom Perignons print ads appear far more like a fashion editorial than an advertisement for alcohol, replete with notable fashion models and fashion photographers. Famously, fashion designer and photographer Karl Lagerfeld shot ads for Dom Perignon with super models Claudia Schieffer and Eva Herzigova on separate occasions. Karl Lagerfelds shoot with Claudia Schieffer features a series of pictures with the super model portraying different "roles" for her husband. The idea that one can be transformed after drinking Dom Perignon was Lagerfelds vision when creating the ads. The advertisements with Schieffer and Herzigova are relatively similar, both cases feature the model as the main point of focus rather than the product itself. While a magnum of Dom Perignon does appear in each ad, it is almost hidden, again taking a backseat to the artistry and vision of the campaign.
        Throughout the years, Dom Perignon has done an excellent job of lending their name to organizations and people in order to gain advertising. Because it is already an established name, Dom Perignons brand is highly sought after when it comes to product placement and sponsorship. Movies, music and television make countless references to the luxury champagne, giving it a household name. James Bond drank Dom Perignon exclusively in the first Bond movie, a cooperative advertising move that helped sky rocket sales. Additionally, star-studded red carpet events and parties are often sponsored by Dom Perignon in order to remain synonymous with wealth and prestige. Countless celebrities are photographed with the Dom Perignon shield behind them at red carpet events as a result of their sponsorship, giving them endorsements in exchange for providing Dom Perignon at the event.

  

Ch. 15 - Retailing

       
      The retailing of fine wines like Dom Perginon tend to be exclusive and strategic in where they are sold. Unlike other easily recognizable alcohols that are sold in grocery and liquor stores, the average consumer looking to purchase a bottle of Dom Perignon may have to do slightly more research in order to find a retailer of the coveted bottle. I went to the independent retailer Sea Grape Wine Shop in the West Village on my quest to seek out a bottle of Dom Perignon. While they did have many fine wines and champagnes, Dom Perignon was not something that they kept in the store. With the exception of the high production volume champagne Veuve Clicquot, all of the champagnes and wines that Sea Grape carries in store are from small production vineyards. Although the exact number of bottles produced in a single vintage is unknown, it is estimated that each vintage generally boasts a couple of million bottles, making Dom Perignon a high production champagne. Because each bottle of Dom Perignon runs at about $200 per bottle, Sea Grape chose the more reasonably priced Veuve Clicquot, priced at around $60 per bottle, as their high production champagne of choice.
        It goes without saying that alcohol of any kind can only be retailed at places where alcohol can be legally sold. Additionally, Dom Perignon can only be sold to those who are of legal age to drink. Generally this means that a consumer is likely to find bottles of Dom Perignon at high-end restaurants and night clubs, places that are typically frequented by the Dom Perignon consumer. The average wine or liquor store is not likely to carry Dom Perignon simply because the price of a case is very high and the volume sold is generally low. A small specialty wine shop like Sea Grape could potentially hold onto a case of Dom Perignon for years before they have sold the entire volume. However, fine dining restaurants and night clubs generally sell more bottles of Dom Perignon than specialty wine shops, and at a higher price. Restaurants typically mark up wines and champagnes at two and a half to three times the wholesale cost, and night clubs can charge thousands of dollars for bottle service with Dom Perignon. Fine dining and night club settings are ideal for selling fine wines like Dom Perignon because a large part of the champagnes appeal is the status and prestige that it exudes when purchased for entertaining others.
       Because Dom Perignon can be difficult to find at your local wine retailer, those looking to purchase a bottle of the fine champagne have other options available. Because Dom Perignon is a vintage cuvee, once a vintage year is over, that exact wine cannot be manufactured or recreated again. Because of this, the auction market has opened up opportunities for wine enthusiasts and collectors to buy and trade the vintages of their choice. Online auction websites like Amazon and eBay are available for those who are looking to purchase bottles and even provide options to buy Dom Perignon coupled with Godiva chocolates or flowers for special occasions. For serious wine collectors, auction houses like Chisties and Sothebys have set records for auctioning off prestigious vintages of Dom Perignon. In 2004 Chisties sold three bottles of Dom Perignon vintage 1921 for nearly $25,000! Bottles of this caliber have truly become collectors items for champagne and wine enthusiasts.