Ch. 4 - The Marketing Environment

     
    Understanding the market environment can be one of the most integral parts of advertising and selling a product. Luxury brands are no exception, and Dom Perignon has done a very consistent job of of using their target audience and demographic to create a brand name that is synonymous with prestige and wealth. Indeed, their target audience consists of those who are 21+ and are, or are looking to be perceived as wealthy or high-class. Because Dom Perignon has such a high price point, their demography consists of only those who can afford it. For instance, Dom Perignons print advertisements  appear more like fashion lay-outs than advertisements for alcohol. Because of this, marketers for Dom Perignon place ads in high-end fashion magazines like Vogue and Harpers Bazarre instead of on subways and billboards. They know that the average consumer is not in the market for luxury champagne at any given time, making large advertisements seemingly pointless, considering their target market.
      Recently, Dom Perignon has made small steps to expand their target market while maintaing the integrity of their brand. Currently, Dom Perignon has collaborated with film director David Lynch on a series of bottles designed by the artist. In the past, Dom Perignon has targeted mostly baby boomers and Generation Xers in part because they were the demographics who had the most money and could afford luxury brand champagne. However, with Generation Y increasing in age and wealth, collaborations with notable avant garde directors like David Lynch have the tendency to intrigue a younger crowd without compromising  the brands identity. A Gen Yer who may never have thought twice about buying Dom Perignon could easily be swayed by the idea that their favorite director is in collaboration with the company. Dom Perignon has done an excellent job of understanding who their target market is. Simply put, if you can afford it, they will sell it to you.

     A notable example of misunderstanding your target market comes from one of Dom Perignons former largest competitors, Cristal champagne. In the early 2000's Cristal was one of the largest and most popular luxury champagnes on the market, due in large part to endless endorsements by the hip-hop community. Many rappers and hip-hop artists bought cases of Cristal, wrote about it in songs and even drank it onstage at concerts and appearances. The sales and notability of Cristal went through the roof in a way that advertising could only hope to accomplish. The controversy came when managing director Frederic Rouzaud spoke out against the hip-hop communities affection for Cristal and even went on to say "We can't forbid people from buying it. I'm sure Dom Perignon or Krug would be delighted to have their business." These statements sparked a backlash from rappers like Kanye West and Jay-Z who openly made statements condemning and boycotting Cristal. Whether or not Cristal meant to target the hip-hop community initially, they made a grave mistake by alienating and shaming a very loyal and essential part of their demographic. However, this misstep meant good news for Dom Perignon whose sales increased dramatically within the hip-hop community in subsequent years. The controversy also virtually eliminated a major competitor for Dom Perignon, a controversy Cristal was never fully able to bounce back from.