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.

Ch. 6 - Consumer Decision Making

   
     Many factors can influence a potential buyer when it comes to consumer decision making in regards to fine wines. Dom Perignon has the distinct advantage of being one of the most easily recognizable names in high-end champagne, due in part to the experience and sheer longevity of the company. Even if a potential customer has never tasted Dom Perignon, the chance of them recognizing the name and positive reputation of this particular sparkling wine is very high. While other alcohols can be considered impulse buys, a bottle of Dom Perignon is not something generally purchased on a whim. Marketing researchers focused on the buying and selling of fine wines have discovered that it is highly important to "look at the particular occasion people drink wine as this seems to drive consumer purchase decision more than any other factor". While those who can afford to do so may enjoy a glass of Dom Perignon at home alone, the average consumer is more likely to reserve such a purchase for a notable event or gift. These kind of special occasions create a high-involvement decision making process for the consumer. The same consumer who would normally purchase a twelve dollar bottle of Prosecco for a casual dinner party with friends is now faced with the highly involved decision to purchase a $200 bottle of Dom Perignon to impress the CEO of his/her company at a formal dinner. This particular situation can greatly influence said consumers decision to purchase this notable and expensive champagne.
       Social visibility is another major factor contributing to the decision making process when purchasing fine wines. Dom Perignon is synonymous with prestige, luxury and wealth, thereby making those who purchase and drink it appear socially prestigious as well. While the financial risk of purchasing Dom Perignon can be high, being perceived as someone of high social status can be valuable for many consumers. Because those who purchase luxury champagnes are generally among the capitalist class and the upper middle class, those who drink Dom Perignon become an aspirational reference group. In much the same way that young aspiring hip hop artists coveted Cristal champagne because of their more successful counterparts' endorsements, Dom Perignon has become the unofficial champagne of the "1%". That is to say consumers who aspire to wealth and high social status perceive themselves that way when consuming luxury items like Dom Perignon.        

Ch. 5 - Developing a Global Vision

           Dom Perignon and other manufacturers of champagne have a very unique place in the global market. Because authentic champagne can only come from grapes grown in Champagne France, foreign competition is not exactly a threat. However, this also means that Dom Perignon must rely on global marketing and subsequently a well-honed global vision in order to sell their product in countries other than France. Many countries have markets and appreciations for fine wines and champagnes and Dom Perignon has successfully reached these markets out of demand and necessity. Dom Perignon is unable to outsource their champagne production to other countries because of their highly specific regional regulations for manufacturing. This means that while the company has very little competition from foreign competitors, they also have a very limited quantity of champagne to sell, should the demand increase overseas.
           Dom Perignon has remained famously silent when it comes to discussing markets and figures. However, it is estimated that between 300,000 and 350,000 cases are sold each year, or in other words, about three to four million bottles. France, Italy, Japan, The United Kingdom and the US are the five main importers of Dom Perignon. One in five bottles of champagne consumed in Japan is a prestige cuvee, like Dom Perignon, which makes Japan their single largest export market.  Not surprisingly, The United States is the second largest importer. The United Kingdom ranks third in the market for prestige cuvees, with one in every fifty consumed being a noble pedigree, however, Italy still imports more Dom Perignon than the UK. While specific figures are not known due to the companies reluctance to disclose market information, the two fastest growing markets are now India and Eastern Europe. It would appear that their notorious silence could potentially open doors for larger production in the future if need be. Indeed, Dom Perignon seems to have a handle on foreign market growth.  

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.   

Ch. 3 - Ethics & Social Responsibility

         As with any company focused on the sale of alcohol, the issue of morals and ethics in regards to selling the product to minors will always be at the for-front of discussion. Not only is it unlawful to market and sell alcohol to people under the age of 21, but it is also unethical and immoral by many peoples standards. Dom Perignon is no exception to these laws or ethical codes, however, their luxury image and subsequent luxury price tag has allowed the company to reach a postconventional morality that many of their competitors may have more difficulty achieving. Dom Perignon has a very specific image and method of wine production that they have rarely deviated from in the centuries that they have been manufacturing wine. Because of this, Dom Perignon is never trying to sell, advertise of promote a brand new product. This means that they do not run the risk of developing a new product that is potentially sweeter, cheaper, or more appealing to minors. Additionally, minors looking to buy or drink alcohol are very rarely going to purchase or obtain a $200+ bottle of champagne, leaving the ethical worry of underage drinking to alcohol manufacturers whose products are significantly less expensive. That being said, Dom Perignon does attempt to protect themselves from organizations like CAMY (Center on Alcohol Marketing and Youth) by insisting that any visitors to their website confirm that they are 21 or over before being allowed to browse the site, proving that they are indeed attempting to cover their bases in regards to social responsibility.    
         Dom Perignons online manifesto greatly details their methods of wine production and boasts many claims about the "perfection" of their wine. In addition to every bottle being a vintage wine, Dom Perignon insists that they "require the best grapes in Champagne". These are very lofty claims that the consumer can only assume to be factual. Centuries of wine making and a notably iconic image can put the consumer at ease that what the company claims is in fact true. However, if it were discovered that one of their wines was not vintage or that the grapes came from somewhere other than Champagne, this would be considered immoral and unethical on the part of Dom Perignon. Luckily for them, no such claims have ever been made against the purity of their wine.

Ch. 2 - Strategic Planning for Competitive Advantage

       
        Because Dom Perignon is a luxury brand item, its strategic marketing can differ greatly from more traditional approaches to marketing. Dom Perignon does not rely on a cost competitive advantage in order to sell its product unlike many of its sparkling wine competitors. Instead, the company relies on their prestigious image and uses a product differentiation competitive advantage in order to sell their highly priced champagne to consumers. A good example is in the 1950's, much of Europe was drinking an inexpensive champagne called Krug. When Moet Chandon, Dom Perignons mother company, discovered they could produce a comparable wine and price it three times higher than their competitor, they took that opportunity to release Dom Perignon onto the market. In order to expedite their "symbolic acceptance" they sent cases of Dom Perignon to the Queen of England and even had the fine champagne appear in the first James Bond movie as his signature drink. This strategy worked, skyrocketing Dom Perignons sales and even causing their initial competitor, Krug, to raise the price of their champagne from $19- $100 over the course of only ten years. High price, high prestige, and high quality are all factors that have resulted from an extensive and historic market plan.
        Dom Perignon is not aiming to lower its prices anytime soon. Instead the company uses an experience curve in order to create the exact opposite effect, that is to demand more money for their product. Technology and wine production have increased and improved greatly since Dom Perignons inception over two centuries ago. Therefore, with these technological advances and increased knowledge, Dom Perignon is not only able to produce far greater quantities of champagne than it once did, but it is also able to truly perfect its craft, thereby making it more desirable by consumers. Beyond having a highly sought after and prestigious product, Dom Perignon also boasts a niche competitive advantage by simply having the name "champagne" affixed to its label. A sparkling wine cannot be called "champagne" unless it is produced in the small wine region of Champagne, France. Therefore, any wine produced in this region already has a competitive advantage over other retailers who are trying to sell luxury sparkling wines. A consumer looking to purchase a high end sparkling wine is far more likely to pay $200 for a bottle of authentic champagne than they are to pay the same price for a bottle of Cava or Prosecco. That one word alone can make all the difference when it comes to purchasing sparkling wine. Additionally, Dom Perignon is a vintage wine, meaning that they will only produce bottles in years where the grapes are perfect. If it is a weak year, no wine will be produced by the company. The word vintage also refers to the fact that each bottle boasts grapes from the same harvest and, of course, the same year. Vintage wines are very rare and can also be very costly to produce. However, the rarity of these wines make them more valuable, with some vintages collecting $1000 or more per bottle. These are only some of the many competitive advantages that have put Dom Perignon a head above the rest for so many years.