June 02, 2020

The following is republished with the permission of the Association of National Advertisers. Find this and similar articles on ANA Newsstand.

 

By David Ward

For Matti Anttila, who created and owns the Dixie Southern Vodka brand, the presence of a much larger competitor in his category has been both a challenge and an opportunity.

The competitor, Tito's Handmade Vodka, has been a juggernaut in the space for more than a decade, as it tapped into consumers' insatiable thirst for American-made craft spirits to become the largest vodka brand in the U.S.

Anttila, who is also the founder and CEO of Grain & Barrel Spirits, is trying to do something similar with Dixie, but with a twist. While catering to an audience receptive to craft alcohol, he's positioning the company as a scrappy underdog, carrying the brand message, "Made in America, Raised in the South."

"The trend is definitely 'smaller is better,' which makes Tito's vulnerable to emerging brands like Dixie," Anttila says. "Beyond made in America and craft, Tito's also established a strong foundation in Texas before expanding nationally. We look at the Southeast as our Texas and we first focused on success at home before starting to branch out nationally."

Dixie targets people in their mid-20s to mid-40s and leans on influencer marketing channels. "We've linked up with BBQ influencers, cocktail influencers, chefs, [and] athletes," Anttila says. "The commonality is everyone has had a connection to the South. For us, the flavors of the South aren't just ingredients we put in our vodka or cocktails. They are also stories, personalities, and art forms."

Dixie's boldest marketing move yet is a NASCAR sponsorship. "It has allowed us to speak to a much larger and more national audience, particularly via digital and email, and — once racing resumes — via our entitlement race, the Dixie Vodka 400," Anttila says. "We don't have the resources of the big guys, but a lot of people out there want to support the little guy. That's an advantage we have that the large players don't and it's really valuable."

To be sure, small brands don't have the same resources as bigger companies. The same is true for reach and networking capabilities. But there's still plenty smaller brands can learn from their larger competitors when it comes to maximizing their marketing efforts and optimizing their budget.

Different Size, Similar Scope

Dixie's efforts to carve out mind share in a category dominated by a major player reflects the challenge among many marketers working for smaller brands.

Marketers for smaller brands may envy the much bigger ad budgets owned by their counterparts at larger companies. But borrowing marketing strategies from larger companies isn't solely based on budgeting and purchasing. "Broadly speaking, the playbook is the same for brands both big and small," says Emma Armstrong, president at FCB New York. "Who are you? Who are you for? How do you find your target?"
 
Before emerging on the national stage via a NASCAR partnership, Dixie Vodka learned from larger competitors about the value of regional brand-building. Courtesy of Dixie Vodka

Armstrong stresses that smaller companies can learn a lot from their larger competitors when it comes to investing in consumer research. "Larger companies normally have this already embedded in their structure," she says. "Large or small, deeper consumer understanding helps drive better insight and drives better value creation, ensuring you reach the right consumers and are driving brand affinity."

Armstrong also recommends smaller brands mimic the strategy among larger brands to continually test their messaging. "No matter how small the budget, it's always worth building in the ability to test and learn," she says. "Even a simple A/B test for an email subject line normally drives better understanding and the ability to optimize and be smarter next time."

Derek White, CEO of Refuel Agency, adds that many of the excuses smaller brands may have had in the past for not adopting the strategies and tactics practiced by bigger brands are no longer valid in a post-digital world.

"This is the golden era for small brands due to the unprecedented direct access to consumers that social/digital media provides," he says. "Never has it been easier for a brand to microtarget. Never has it been easier to test product features, consumer data profiles, marketing, or creative through online A/B testing. We typically run scores of tests in a matter of days around any given campaign."

White says while larger brands have much bigger teams focused on these individual tasks, it doesn't necessarily mean a built-in advantage over smaller brands. "You just need a different tactical approach that must be much more targeted," he says. "Do not compete head-on with the bigger brands. Find the brand adoption entry point for your category and build from there."

Taking the Smart Path to Growth

In some respects, marketing is easier for startup brands because they may have just one product serving a narrow audience segment.

The challenge comes when smaller companies start to grow and add additional SKUs and product lines under their core brand umbrella, says Dr. Vanitha Swaminathan, director of the Center for Branding and the Thomas Marshall Professor of Marketing at the University of Pittsburgh's Katz Graduate School of Business.

"Often, I notice that smaller brands grow through mergers and acquisitions, and they don't have a systematic way of organizing their portfolio of brands," she says. "Due to the lack of systematic brand management approaches applied to create a brand portfolio, smaller brands may end up with an unorganized collection of products and brands without any systematic branded approach that creates a brand architecture that is easy for consumers to understand."

Swaminathan says smaller brands should study how their larger competitors diversify their offerings and coordinate messaging around product launches. "Small brands could learn from larger, more well-established brands that they have permission to leverage their brand equity," she adds.

The reality for smaller brands is that most are unable to take the same chances as their larger peers, especially when it comes to major investments like sponsorships and national experiential programs.

But Britton Upham, CEO of marketing agency McGarrah Jessee, says marketers for smaller brands can still leverage more cost-effective sponsorship opportunities that enable marketers to engage their core audiences.

He adds that this is where smaller internal marketing departments can really benefit from the experience and tools of an outside agency. "Thinking through the customer journey will guide you through the evaluation of whether a high-profile opportunity could effectively reach your core target," says Upham, whose clients have included Lyft and Shiner Beers. "It's also important to consider the environment — how your brand and messaging align with the opportunity."

A Two-Way Street

The learning process between major and minor players is hardly a one-way street. It's no secret that dominant brands constantly pick up tips and tricks from smaller competitors, especially when it comes to embracing digital strategies and platforms and acting more nimbly.

"I've seen large brands both benefit from, and be victimized by, their size," says Jason Schlossberg, managing director of strategic communications at global experience agency Huge. "They often find themselves more focused on protecting market share and navigating internal politics rather than on innovating."

Schlossberg adds that smaller brands also have a higher tolerance for risk and are more willing to experiment with new marketing innovations that pay dividends now and into the future.

Swaminathan says larger brands don't have the benefit of "David v. Goliath" storytelling and face the risk of being viewed as inauthentic if they veer too far from their core brand beliefs.

But individual brands within a large corporate portfolio can nimbly execute like a small company and take some risks with purpose-driven programs, she says, citing Dove's Self‑Esteem Project.

Recalibrate for the Short-Term

Even in normal economic times, smaller brands have to avoid the temptation of spreading themselves too thin, according to FCB's Armstrong.

"Limited marketing dollars require more choices, saying no to more things — or, at least, saying 'not yet' — and each decision can feel momentous," she says. "Using a combination of data, modeling, and consumer insight, we should be able to help validate each choice that needs to be made, giving more surety that the choices are the best way to continue to drive growth."

But these are hardly normal times, and smaller brands shouldn't assume they can thrive simply by mimicking how their well-established and better-financed competitors weather events like the coronavirus pandemic, according to Upham. "One tactic the larger brands can wield during an economic downturn like now is they can prepare for the other side," he adds. "They have the reserves to get through. This will be much harder for smaller businesses."

Upham adds smaller brands that take a temporary hit need to include their audience as they begin to rebuild. "Let your customers into your business and story in a sincere and uncalculating way and acknowledge them as part of your success," he says. "Give them a say in how you rebuild and showcase their contributions."

Anttila says Dixie Vodka is already adjusting its messaging and marketing in the short-term to focus more on retail sales, rather than bars and restaurants.

One thing he won't be doing moving forward is looking to larger competitors for all the answers.

"You can take elements from a successful brand's story and strategy, but every brand needs to find their own path," Anttila says. "I also believe small brands have a significant advantage in drumming up local support. We want to support our neighbors and that's an opportunity for Dixie and other brands with strong local and regional identities."

 

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