General public, constantly bombarded by advertising campaigns from TV screens, Internet sites, pages of periodicals, billboards, transportation exterior, etc. is rarely aware of the fine correlation between the commercials it is forced to absorb and the economic nature of the products being promoted to them. The majority of consumers don't realize that Mad Men, both real and fictional, are after the largest chunk of their disposable incomes – the money spent on what's known in the economic science as "normal" goods, i.e. every-day necessities with a moderate income elasticity of demand.
In plain words it means that when people's wealth increases, the demand for the normal goods increases at a slower than income rate. It's not like you are going to start using twice as much detergent if your salary doubles, but you may switch to a more expensive brand, which supposedly delivers cleaner and brighter clothes. And that's why commercial sequences look like the war of brands: Progressive vs. Geico aka Flo vs. Gekko; Advil vs. Alive, Post vs. Kellogg's, etc.
On the other hand, marketing for "inferior" goods (i.e. those for which demand decreases as income increases) is basically non-existent. It would be a waste of the advertising budget to promote items that sell themselves anyway because they are the cheapest in their product groups. For a store-brand quart of milk at 99 cents you don't even need too much color on the packaging. On the other hand, to sell a quart of the fancy Farmland Special Request Skim Plus Milk for $2.99 you need it to stand out on the shelf in its purple lettering and black cow spots.
What about even fancier, extraordinarily expensive items? The ones labeled by the economists as luxury goods, for which demand inexplicably increases more than proportionately when income rises? We don't see much advertisement for them either. Yes, from time to time De Beers injects a bit of its A Diamond Is Forever campaign into various media. And on a rare occasion you can catch on TV one of those sexist (targeted exclusively to men) Porsche commercials. If you are a tennis fan watching one of the Majors you get to see Roger Federer in a Rolex ad… rarely.
But, have you ever seen a broadcast spot for a $12,000 Chanel suit? A $350,000 Harry Winston diamond necklace? A 73-foot ocean yacht (about $1.3 mil)? A Bentley (average price $200,000)? Louis Roederer Cristal Rose 2005 ($600 a bottle)? How about a public notice for the upcoming Sotheby's Fine Art auction?
One may think, "Well, if I had this kind of money, I would've found those things." Who doesn't want a yacht with a polished mahogany stateroom? Or a rare car? Yet, it would be a mistake to think that these items don't require any form of marketing or that they are above competition. Yes, rappers drink and rhyme about Cristal, but according to many experts the champagne that can really blow your mind is Dom Perignon White Gold Jeroboam, which can demand an auction price of $40,000 per bottle. Imagine that you can afford it – how would you know about its existence? These products are exclusive rarities that occupy narrow niche markets. Hence, they call for innovative, targeted marketing tailored for creating brand awareness.
Enter Remy Martin Fine Champagne Cognac (est. 1724) and it's most privileged drink – Louis XIII cognac. Blended from 1200 eaux-de-vie aged from 40 to 100 years, in very special 300-year-old oak barrels hidden in a secret cellar in Grande Champagne region of Cognac, France, and, when deemed ready by the Cellar Master, bottled into proprietary Baccarat crystal decanters – this is as high-end as brandy can get and its price reflects it: a "regular" bottle goes for $3,000 and limited editions (such as Rare Cask or Black Pearl) can fetch anywhere between $22,000 and $44,000 per bottle. And I can personally vouch that it worth every penny. I mean, that shit will spoil you for life: you try it and you don't want to drink any other brown-colored grape liquor no more.
It was the fast-growing and hungry for new clients EastWest Bank who invited me to participate in the cognac's exclusive (20 people) degustation event jointly hosted by the bank and "the brand ambassador" (i.e. a good-looking English-speaking Remy Martin's representative) in a building in SoHo formerly owned by Charging Bull sculptor Arturo Di Modica and temporarily converted to accommodate the Louis XIII presentation. It was an installment in Remy Martin's marketing campaign called Louis XIII Legacy Experience, which has been on the World Tour for six years, rolling through the cities with major concentration of wealth – New York, Los Angeles, London, Dubai, etc.
This is how it works: In each location, the brand's representatives contact high-net-worth individuals, heads of private financial institutions, high-tech moguls, distributors of other luxury goods (Ferrari and Porsche dealerships are always targets), etc. and offer them an opportunity to host an exclusive event for their most important customers, prospective clients, business partners, or other wealthy friends. The price tag… NOTHING!
It's truly a marketing tool. What Remy Martin gets out of it is: 1.) The brand recognition through introduction of the drink to people who may never heard of it before; 2.) Additional entries in their contact list – one of the leggy hostesses meets you at the entrance with her iPad and asks you to share your business card and/or an email with Louis XIII; 3.) Spot orders of both "standard" and special-edition bottles of the famous drink - I know for a fact that before our event was over all Rare Cask and Black Pearl bottles on display were sold.
With no price tag attached, what does the Experience offers to guests?
The event starts with a gathering/mingling part. In our case, quite excellent Piper-Heidsieck champagne (with refills) was passed cocktail-style accompanied by extraordinary finger-food trays (I wish I knew who the caterers were), while people talk to each other, looked at the displays of special Louis XIII, and read leaflets about the silent auction of silkscreens and lithographs made in Andy Warhol's Factory, which lined the walls of the drawing hall (an NYC-specific added benefit).
After that you are taken to a screening room (red semi-circular couches) for a presentation of a film that tells the story of Remy Martin and its highest-priced product. Next, we were led to the underground level (a fortunate feature of this particular venue – it looks like a cellar with exposed brickwork and arches), where a surprise display was revealed: an actual 300-year-old barrel, previously used to age the cognac for 100 years and now retired due to its diminished quality.
Over this artifact a 750-ml bottle of Louis XIII de Remy Martin was opened and pored into the proprietary Baccarat glasses (if a group is larger and/or more valuable to the organizers, Le Jeroboam, 3-liters-full, is used). Warning you not to down your drink right away, the "ambassador" gives a mini lesson on the proper tasting of the dark-amber liquid. Let me relate the first bit: like with many other drinks, you start with the nose. The difference is that, instead of trying to squeeze as much of your face into the glass as you can, you experience your first nose of this incredible cognac at the stomach level. As a person with chronic respiratory aggravations, I was very doubtful - I didn't expect to smell anything. But let me tell you: the power and the complexity of that aroma… It will probably take me extra 100 words to describe it.
While recovering from the magic of swallowing the drink, you are invited to place an order for your own bottle of Louis XIII complemented by two glasses of the same type you are still holding in your hand. With that comes a special perk from the ambassador: if you order a bottle from him you get your initials engraved on the decanter.
I know that on some occasions the Legacy Experience rolls into a dinner, but for us that was it. Still, what an amazing adventure! Thank you, EastWest Bank! Everyone leaves feeling incredibly grateful to whoever invited them to participate in this memorable gathering.
Are you grasping the commercial meaning of this? This is genius! Nothing short of a double-impact marketing: Remy Martin broadens its brand awareness and sells some of its ultra-expensive booze, while the co-hosts, being the actual invitors, make a lasting impression and raise their customers' satisfaction.
In this predominately business crowd, one guest of a guest was an artist. And, of course, she was the one who has recognized the familiar traits in the creation of Louis XIII cognac: a single person, the Cellar Master (presently, Pierrette Trichet – the first female to hold the position), relying purely on her talent and experience, selects, blends, and combines eaux-de-vie to create a drinkable masterpiece - that's art. Well, it takes one to know one. All I can say is that bringing a luxury product to a proper audience is not a trivial task either and the Legacy Experience is as good as it gets.
The Frustrated CFO 