How Patrón Uses Target Marketing for Growth

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How Patrón Uses Target Marketing for Growth

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There was a time in my life when I firmly believed that tequila made you stupid. An avid margarita maker and celebratory shot enthusiast, I certainly had amassed plenty of evidence that supported this conviction. In recent years, however, my perception of tequila has evolved and it’s not just because I can’t throw ‘em back like I used to. It’s because tequila, in the form of super-premium brands, have become sip-worthy like single malt scotches and fine wines.

Which brings me to Patrón and my extensive conversation with its CMO, Lee Applbaum. Having pretty much invented the super-premium tequila market, Patrón now enjoys a 70% share, leading to another interesting predicament—how do you keep growing when you already dominate the category? The answer, it turns out, is to increase your customer base while not alienating those who got you there in the first place.

And to do that, it really helps to have clear personas for both. For Patrón, these personas are The Bros (think young Drew) and The Knows (think “less-young” Drew). What’s particularly fascinating is how well Applbaum understands these two targets—a vital building block for any successful marketing strategy. So read on, perhaps while sipping your favorite agave-rich beverage of choice, and ask yourself, can you describe your target market this clearly?

Drew: Tell me about Patrón’s target audience.

Lee: We have two very distinct audiences—The Bros and The Knows. The Bros are really into style first, and The Knows are really into substance. They’re the farm-to-table movement. They want to know where the product comes from. So we’re looking at our performance with the both of them. At the end of the day, a Bro wants to be smart and a Know still wants to be cool. We have to look at how we’re playing with both audiences.

The good news is with all the growth we’ve had the last several years with the over-investment in The Know consumer and talking about style and substance and authenticity, we’re still continuing to maintain all that swagger with The Bro. The mass of the luxury market will still be image-conscious. They’re buying into the whole aspirational image, first and foremost.

Drew: If The Bros were the old folks and The Knows were the growth engine, what specifically did you do or change in the marketing mix that got at The Knows?

Lee: It’s not that The Bros are the old audience or that they’re not part of the key growth. The reality is that even with all the growth in ultra-premium tequila, it still isn’t as large as other spirit categories like vodka. There is still a lot of growth to be harvested with Bros, and while there are always extreme ends of the spectrum with Bros and Knows, Bros still desire to be smart and validated.

The best kind of Bro is the image-conscious Bro who can also prove that he/she knows what they’re talking about. Conversely, there are Knows who might shoot down the image. But most of them want to be smart and stylish. The Knows are vitally important in championing the authenticity story. You also see this broadly in the culinary world, where people want to know the backstory. They want to know who makes the product, where it comes from, and whether it’s sustainable.

Drew: How important are The Knows?

Lee: The Knows are increasingly influential. While this audience consumes a lot of traditional media, a lot of what they consume is not only based on peers, but experts. For them, the expert is going to be the mixologist. When they are at a mixology-heavy bar or restaurant, these Knows count on the word of the mixologist. For us, it’s been about embracing and ultimately educating mixologists around our product. Many of them served us, and served us enthusiastically, but never understood the authenticity piece. When they had someone walk in and ask for the “latest and greatest, your small-batch artisanal tequila,” the bartender would defer to what they perceived to be small-batch. In fact, many of these small batch products are just clever marketing.

Drew: So how do you engage with The Knows?

Lee: For us, it’s much more difficult and more intensive than traditional mass media advertising. It’s been a lot of trade education, a lot of outreach. Certainly using tools like VR to educate the bartender, but also getting them down to Mexico to experience the production process, firsthand. Having the people who make the product talk about it has been a really key part, then taking a step back and letting those mixologists become our marketers, talking objectively about our brand and our product.

We’re very blessed to have 70% share, but the curse is small-batch. Small-batch is hot and the trade and consumers want exclusivity and scarcity, even if it’s only perceived. When someone walks in and says “give me that product or brand that I can’t find elsewhere,” that’s not necessarily a good thing in the world of mixology. It may just be clever marketing, so having an educated mixologist who can say “I respect the fact that you’re looking for a brand you never heard of, but here’s a brand you have heard of and is just as much, if not more, the handcrafted artisanal product you’re looking for.” That can only come from a third-party, objective mixologist. It can never come from our voice with the same degree of authenticity.

Final Note:In case you’d like to hear more about Applbaum’s plans for Patrón, here’s my recent podcast where we talk in much greater detail about the brand and its marketing strategy.

Image credits: Patrón

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March 29, 2017 at 12:37AM