MANAGING FOOD & BEVERAGE COMPANIES

Tradition and Innovation

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KEY

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Important  concept  

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AGENDA

① Nurture Authenticity ②  Innovating Value Propositions

③  Innovating along the Customer Experience

④  Product Lifecycle and Market Lifecycle

⑤  The Value of Brands

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AUTHENTICITY How can a company be considered

authentic by consumers?

Authenticity is a concept that lets the company reconcile TRADITION with INNOVATION

Why autheticity matters

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AUTHENTICITY “Brands seek their aura of distinction and pedigree through allusions to time and

place.” (Alexander, 2015, p.1)

“Authenticity may be defined objectively by the process of creation and the physical materials used in the creation process or by constructive values that are subjective and derived from users’ perceptions of authenticity (Chhabra, 2005)”

“Constructive authenticity allows for different interpretations of reality on the basis of consumers’ projections onto objects” (Leigh et al., 2006, p. 483)

“Existential authenticity is a product of postmodern consumers’ orientation toward pleasure which is brought into being through the “liminal process of activities” (Leigh et al., 2006, p. 483)

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AUTHENTICITY

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PRODUCT

AUTHENTICITY  

PRODUCER

AUTHENTICITY

PRODUCT AUTHENTICITY There are three aspects define the authenticity of a product:

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TRADITIONAL METHODS OF PRODUCTION

HISTORY

TERRITORY

PRODUCT AUTHENTICITY

The production process influences

the product's overall evaluation.

A company that wants to exploit

Parmigiano Reggiano’s fame has to respect its strict

rules of production. 8

TRADITIONAL METHODS OF PRODUCTION

Source:  h=ps://en.wikipedia.org/wiki/Parmigiano-­‐Reggiano#/media/File:Parmigiano-­‐Reggiano.png    

PRODUCT AUTHENTICITY

Why are they different? The methods of production

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e.g.

source: http://winefolly.com/review/champagne-vs-prosecco/

Champagne and Prosecco are both sparkling. But what makes them so different and so authentic at the same time?

“We invented Franciacorta, and nobody can change this.” Paolo Ziliani VicePresident

Guido  Berlucchi  &  C  S.p.A.  

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Building a new tradition

BeFood Interviews:

PRODUCT AUTHENTICITY

Having a long history behind a brand can increase the trust that consumers have towards it.

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Source:  h=ps://www.google.it/search?q=since+1800&espv=2&biw=1422&bih=1025&source=lnms&tbm=isch&sa=X&ei=tX2BVbamGImUsAGz9L_4Ag&ved=0CAYQ_AUoAQ&dpr=0.9#tbm=isch&q=de+cecco&imgrc=XdYGMfIoZIzMQM%253A%3Bg7w1LKpJ48v-­‐EM%3Bh=p%253A%252F%252Fwww.jdaliments.com%252Fwp-­‐content%252Fuploads%252F2014%252F08%252FDeCeccoLogo.jpg%3Bh=p%253A%252F%252Fwww.jdaliments.com%252Fporeolios%252Fpasta%252F%3B1181%3B465  

HISTORY

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The place where a product is produced can completely change its

image and thus its authenticity.

Sometimes territory works as a guarantee for the product:

consumers are more likely to trust it.

Source:  h=p://www.vinosite.com/wp-­‐content/uploads/2011/03/20-­‐nagve-­‐varieges-­‐vino-­‐blog.jpg  

PRODUCT AUTHENTICITY TERRITORY

PRODUCT AUTHENTICITY

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Coca-Cola’s history

Starbucks built its authenticity

source: http://www.gutewerbung.net/wp-content/uploads/2014/05/McDonalds-Pictograms-Campaign-3.jpg |http://pad1.whstatic.com/images/thumb/9/91/Order-at-Starbucks-Step-2-Version-2.jpg/670px-Order-at-Starbucks-Step-2-Version-2.jpg | http://dismuke.net/howimages/cocacolasanta1938.jpg

e.g.

Are they authentic ?

PRODUCER AUTHENTICITY Three characteristics define the producer authenticity:

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History and Reputation à HERITAGE

Delivering high quality à COMMITMENT

Extra-goals besides profit à SOCIAL ORIENTATION

PRODUCER AUTHENTICITY Heritage à Refers to all the intangible attributes linked to a specific group such as history and reputation. Belonging to this sort of tradition give companies an extra-value.

Commitment à Refers to the passion and the dedication that companies adopt in producing and delivering their value.

Social orientation à Refers to any extra goals that do not concern profit which could also be an aim of the company. They often become part of the companies’ philosophy and values.

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AUTHENTICITY Authenticity includes

both:

Tradition

ü  Exploiting the product authenticity

ü  Based on history

Innovation

ü  Exploiting the producer authenticity

ü  Based on innovation

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AND

AUTHENTICITY

SWEDISH VODKA FRENCH VODKA

Producer authenticity can overcome territory issues.

17 source; http://wallpaperswide.com/absolut_vodka_2-wallpapers.html | http://www.vodkaycaviar.com/120-207-thickbox/comprar-vodka-grey-goose.jpg

GERMAN GIN JAPANESE WHISKEY

e.g.

BUILDING AUTHENTICITY The company has to identify which components of its

can be recognized by consumers

as

AUTHENTIC 18

HISTORY   REPUTATION   COMPETENCE  

HERITAGE COMMITMENT SOCIAL ORIENTATION

COMMUNICATING AUTHENTICITY

Once the company has found the components to stress, it has to define a

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A consistent communication strategy works through a well coordinated use of different promotional  means  that are intended to reinforce each other. It is a comprehensive plan whose aim is to deliver the same message.

CONSISTENT  COMMUNICATION  STRATEGY  

COMMUNICATING AUTHENTICITY

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“Consumers identify three different types of authenticity when they read adversiting: pure

(literal), approximate and moral.” (Beverland, 2008)

“[..] using advertising to project an image of authenticity is difficult because methods of mass marketing are believed to undermine such claims” (Beverland and Luxton, 2005)

“Stern (1994) posits that even though advertisements are representations of reality, they are still considered authentic if they "convey the illusion of the reality of ordinary life in

reference to a consumption situation" (p.388).” (Chalmers, Tandy D., 2008)

AGENDA

①  Nurture Authenticity

② Innovating Value Propositions ③  Innovating along the Customer Experience

④  Product Lifecycle and Market Lifecycle

⑤  The Value of Brands

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VALUE PROPOSITION The customer value is composed of

a set of benefits that the organization’s offering can provide and the set of sacrifices that the customer has to make in order to enjoy the

benefits provided by the organization’s offering.

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Benefits represent the positive side of what consumers get from consuming a specific product/service: they can be either psychological, economic, or functional.

Sacrifices  have  to  do  with  all  resources  available  to  the  consumer  that  can  be  

invested  in  that  specific  product  

rather  than  in  alternagve  products/acgviges.  

VALUE PROPOSITION

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Simplification

Benefits

Sacrifices

Benefits

Sacrifices

Benefits

Sacrifices

How can a company innovate this ratio?

Increasing benefits

Decreasing sacrifices

VALUE PROPOSITION WINE INDUSTRY

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Yellow tale simplified the way consumers perceive wine.

Competition transformed wine into a

complex product.

Wine can only be consumed

by expert consumers.

source: http://www.yellowtailwine.com/media/141396/yt%20fullcol%20yel%20ban.jpg | http://www.totalwine.com/_static/webupload/730/2_93192015_3.jpg

e.g.

COMPONENTS OF VALUE PROPOSITION

Innovation can involve different components of the value proposition:

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PRODUCT DISTRIBUTION

PRICE SERVICE

PRODUCT

COMPONENTS OF VALUE PROPOSITION

Ingredients

26 source:https://m1.behance.net/rendition/pm/143147/disp/856981225715285.jpg http://www.myamericanmarket.com/components/com_virtuemart/shop_image/product/COCA_COLA_CHERRY__x6__400.jpg

Companies can modi fy the ir products by either adding or subtracting ingredients.

Method of production

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Companies can innovate their production method.

Source: http://www.brewdogbar.se/wp-content/uploads/BrewDog-core-range.png

PRODUCT

COMPONENTS OF VALUE PROPOSITION

Occasion of usage

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Companies can urge or cause consumers to consider their product for new occasions of usage.

PRODUCT

COMPONENTS OF VALUE PROPOSITION

Source: http://coolmaterial.wpengine.netdna-cdn.com/wp-content/uploads/2013/10/Heineken-Sub-1.jpg| https://www.philadelphia.co.uk/~/media/Philadelphia/en/Images/Brands/press_ad_06.jpg

DISTRIBUTION

COMPONENTS OF VALUE PROPOSITION

29 Source: http://a1.mzstatic.com/us/r30/Purple3/v4/ca/7c/fd/ca7cfd3e-27bf-71ca-d2ad-3ec6f3c64b17/icon320x320.png http://lincolnpizza.co.uk/wp-content/uploads/2011/09/Late-Night-Window-Cling-lr_2.jpg

Distribution identifies the way that the product is provided through. Companies can renovate the way that consumers buy the product or the service.

COMPONENTS OF VALUE PROPOSITION

30 Source: http://www.hibachisuperbuffetnewbern.com/images/buffet_menu4.png | http://1.bp.blogspot.com/_mpbRVvqlUmQ/TPR0Ech3CPI/AAAAAAAAAHY/DY-rbDRcFHU/s1600/menu3.png

Companies could introduce new consumer-oriented pricing strategies based on market segmentation.

PRICE

COMPONENTS OF VALUE PROPOSITION

31 Source: http://www.nutella.com.au/static/nutella/images/products/nutella-products.png

Companies can give c o n s u m e r s t h e opportunity to enjoy the product or the service based on their specific needs and occasion.

SERVICE

“The restaurant is like a temple; holy food means happy customers.”

Pietro Leemann Owner and Chef

Joia  

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Innovation in the kitchen

BeFood Interviews:

AGENDA

①  Nurture Authenticity

②  Innovating Value Propositions

③  Innovating along the Customer Experience

④  Product Lifecycle and Market Lifecycle

⑤  The Value of Brands

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CUSTOMER EXPERIENCE The customer experience is composed of four stages:

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CONSUMPTION

PURCHASE

POST-CONSUMPTION

PRE-CONSUMPTION

CUSTOMER EXPERIENCE

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PURCHASE EXPERIENCE

PERCEIVED VALUE

EXPECTED VALUE

CONSUMPTION EXPERIENCE

EXPECTED VALUE

PERCEIVED VALUE

(DIS)SATISFACTION

PRE- CONSUMPTION

EXPERIENCE

POST- CONSUMPTION

EXPERIENCE

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Absolute AD

Source:https://postmedialeaderpost.files.wordpress.com/2014/07/coke-can-e1405370395240.jpg | https://artitudeusj.files.wordpress.com/2013/04/absolut004.jpg

Can an advertising campaign

drive consumer choices?

Pre-Consumption

CUSTOMER EXPERIENCE

CUSTOMER EXPERIENCE Purchase

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Subway

Source: http://www.wine.com/v6/Dom-Perignon-Limited-Edition-Metamorphosis-Rose-in-Gift-Box-2003/wine/134791/Detail.aspx

CUSTOMER EXPERIENCE Consumption Experience

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Dinner in the sky

Source: http://www.nuovetendenze.net/wp-content/uploads/2013/09/dinner_in_the_sky.jpg | http://www.jagermeister.com/client/styles/assets/stages/visual/en-int/brandstage-product-int-3.jpg

CUSTOMER EXPERIENCE Post-Consumption

39 Source: http://www.sararosso.com/wp-content/uploads/SaraRosso_MyNutellaStory-1024x583.png | http://www.bullbrand.co.za/your-story

AGENDA

①  Nurture Authenticity

②  Innovating Value Propositions

③  Innovating along the Customer Experience

④  Product Lifecycle and Market Lifecycle

⑤  The Value of Brands

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TIME Tradition and innovation should be seen within

the concept of time.

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PRODUCT LIFECYCLE

MARKET LIFECYCLE

MARKET LIFECYCLE

A market consists of a set of actors who interact to exchange goods, services, reputation and information. These activities and additional

actors who exert their influence form the basis for this interaction

The market lifecycle relates to different stages in the life of a market based on a time unit (weeks, months, or more often years) and the

supply-demand dynamic (I.e. sales). The latter can be expressed with product units or values.

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MARKET LIFECYCLE

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SALES

TIME

Unlikely to

happen!

MARKET LIFECYCLE

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Introduction: In this stage sales are usually limited and sale growth is slow. There are only a few competitors (in some cases only the innovator who created the market) and not many customers.   The objective of competitors in the market creation stage is customer education. Growth: It is the result of the combined effect of new customers, who take advantage of the experience and word of mouth of the original customers, and new competitors who are prompted to enter the market thanks to growth opportunities.  The objective of competitors is to follow market expansion, facilitating further dissemination of product knowledge and building a differential image.

MARKET LIFECYCLE Maturity: When sales stabilize and sales growth by and large stops. Since potential customers are now actual customers, product purchases tend to be substitutions and there are few entirely new customers. Maturity for most of the markets is the longest stage, so sales may fluctuate somewhat due to changes in the macro-context.

Decline: This stage occurs when market growth decelerates ever more rapidly, dropping to the levels of the introduction stage and dipping lower, even to the point of disappearing. Decline in this context is mainly theoretical, because after expansion and contraction, along with competitors relaunching and revitalizing their products, very rarely does a market actually reach this stage.

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PRODUCT LIFECYCLE

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TIME

Likely to happen because products can lose

their value

SALES

DYNAMIC BETWEEN LIFECYCLES

Dynamic between the two life cycles is fundamental for companies to take decisions.

The lifecycle is an endogenous process.

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Product

TIME

SALES

PRODUCT LIFECYCLE The shape of the product lifecycle is influenced by:

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CONSUMERS COMPETITORS

TIME

SALES

Consumers

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TIME

Innovators

Early adopters

Early majority

Late majority

Laggards

SALES

Consumers

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Innovators: Have distinctive traits: a low aversion to risk, a tendency to be non-conformists, and a strong desire for social distinction, close connections with sources of innovation, and marked interest in new trends in general.

Early Adopters: Have a greater aversion to risk (especially social risk), and more intense social connections with other customers; they are more often opinion leaders. These are the people who set the much more powerful imitative dynamic, the bandwagon effect, in motion.

Consumers

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Early and Late Majority: Both of these groups, at varying levels of intensity, are adverse to risk and as such not particularly taken account for by innovations; they tend to be conformists and need to see that other people have already adopted the product before they do the same. Laggards: Represent a minority of the market (numbering about the same as the innovators and early adopters put together). These consumers are very resistant to change; for the most part they are not opinion leaders and are very strongly tied to tradition and habit.

Competitors

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Imitation-Differentiation Game New entrants have to imitate but also try to

innovate with respect to incumbents

It stimulates sales overall

Innovate:

LAUNCH A NEW PRODUCT

Renovate Tradition:

REVITALIZATION

Companies have to choose whether to

OR

PORTFOLIO SOLUTION

Companies may have both innovation and tradition

in the same portfolio, offering both

conservative and innovative products.

53 Source:http://upload.wikimedia.org/wikipedia/commons/c/cb/Coca-Cola_Life_0.5_liter.jpg | http://stander.it/wp-content/uploads/Coca.jpg

AGENDA

①  Nurture Authenticity

②  Innovating Value Propositions

③  Innovating along the Customer Experience

④  Product Lifecycle and Market Lifecycle

⑤ The Value of Brands

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BRAND A brand is a set of symbols

that distinguishes a product of a company from a competitors’ one. “A brand is a set of mental associations, held by the consumer, which add to the perceived value of a product or service (Keller, 1998).

These associations should be unique, (exclusivity), strong (saliency) and positive (desiderable).*”

*JN Kapferer, “Strategic Brand Mangagement” pg. 10, 2008

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BRAND Food and beverage products are experience goods

Brands serve as a quality clue

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Knowing the brand

helps consumers, especially who are not experts in the

field, make a choice

source: http://wijnbloggers.nl/wp-content/uploads/2012/12/champagne-veuve-clicquot.jpg ; http://www.winereviewonline.com/images/labels/moet_chandon.jpg

BRAND EQUITY Brand Equity: The extra value that the brand adds to the product when the

customer knows the brand.

It is composed of:

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Brand Awareness

The extent to which a brand is recognized by

consumers

Brand Image

The judgment that consumers have

towards the brand

POSITIONING

Without a difference there is no preference.

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Positioning: Where your product stands in respect to others offering similar products in the mind of consumers.

POSITIONING

59 Source:http://www.cosmo.com.ua/upload/image/marc-jacobs-diet-coke6.jpg https://wanphing.files.wordpress.com/2011/05/diet_pepsi_skinny_can_ad.jpg

Can you perceive any difference?

e.g.

BUILDING A POSITIONING In order to build a positioning

companies should link to the brand some associations which have to be:

ü F A V O R A B L E

ü U N I Q U E

ü R E L E V A N T

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BUILDING A POSITIONING

Primary Associations: Are associations that are directly connected to the brand such as:

- Attributes of the product

- Benefits provided by the product

- Value behind the product

- Competitors

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BUILDING A POSITIONING

Secondary Associations: are associations that are linked to third parties that have a link to the brand, such as:

- Awards

- Events

- Celebrity Endorsement

- Characters

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- Country of origin

- Co-branding

- Distribution channels

BRAND ELEMENTS Brand Elements: are visual elements that distinguish the brand from

competitors’ ones.

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LOGO &

SYMBOLS

CHARACTER URL

JINGLE

SLOGAN

PACKAGE

NAME

BRAND ELEMENTS Brand elements provide value for consumers in two different ways:

¤  They help consumers making choices. ¤  They provide consumers with meanings.

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LINKS Why autheticity matters

Why are they different?

The methods of production

Starbucks built its authenticity

Coca Cola history

Yellowtail

Coca Cola AD

Coca Cola AD - vimeo

Absolute AD

Subway

Dinner in the sky

Jager Bond – vimeo

Jager bond

Berlucchi

Joia

Pinterest Board

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