Scotch Whisky in China: A Taste of the Good Life Scotch whisky is a textbook example of a global product. Wealthy consumers with discerning palates do not hesitate to pay premium prices for top global brands such as Chivas Regal and Johnnie Walker. Moreover, Scotch drinkers everywhere associate the amber spirit with aspirational goals such as success and achievement. In the late 1990s, Diageo, the owner of the Johnnie Walker brand, launched a global advertising campaign featuring the tagline "Keep walking." The theme, which was developed by Britain's Bartle Bogle Hegarty (BBH) advertising agency, was keyed to the brand's logo: a red-coated, top-hatted gentleman in mid-stride. However, as BBH staffers working on the Johnnie Walker account understand, the things that constitute "achievement" can vary from culture to culture.

In China, for example, the self-satisfaction that goes along with achieving a goal may not be enough; acknowledgment of the achievement by peers is also important. For this reason, BBH created a localized marketing campaign for China. One ad depicts two golfers hitting increasingly extreme shots that include teeing off from the roof of a golf cart and a ball that is hit from underneath a crocodile. The campaign coincided with rapid market growth; after China joined the WTO in 2001, tariffs on spirits imports were cut from 65 percent to 10 percent. According to the Scotch Whisky Association, total Scotch exports to China totaled £80 million in 2009, up from just £1.5 million in 2001. Today, Johnnie Walker has a 34 percent share of China's whisky market. BBH's Orlando Hooper-Greenhill explains the insights that were incorporated into the campaign.

He says, "Johnnie Walker's marketing in China needed to reflect the importance of peer group and family perceptions of an individual's achievements, while also accommodating the fact that whisky is a youthful As noted throughout the text, global products and brands often compete with local ones. In China, Johnnie Walker Scotch competes with Moutai, a sorghum-based liquor that is associated with the southwestern province of Gui Zhou. Moutai is packaged in a fancy box with a distinctive white bottle inside. Alcohol is "the" gift that the Chinese take when visiting friends. Depending on the quality, a single bottle of Maotai can cost anywhere from $25 to more than $1,000. Source: STR/AFP Newscom. drink."

Hooper-Greenhill also notes that in China whisky is consumed in a wider variety of settings than in the West. In HooperGreenhill's words, "Different messages were needed to reflect the different environments in which whisky is consumed, and for more and less urbanized areas." Market segmentation is an integral part of Diageo's approach to the Chinese market. As Kenneth MacPherson, managing director for Diageo China, notes, "The size of the market and the complex demographic composition leads to totally different consumption habits and patterns in different parts of China." The first segment, guanxi men, are status-driven businessmen aged 35 to 45 who spend a great deal of time networking and trying to set up business deals.

The second segment is "strong independent women," also in the 35-to-45 age bracket. A third segment is composed of upwardly mobile men and women aged 25 to 35 who want to be seen as cutting-edge. Finally, "the choice generation" consists of those in their twenties who seek out new experiences. Although Johnnie Walker has achieved great success in China, the sbrand is in second place behind Chivas Regal, which commands a 50 percent market share. For decades, Chivas enjoyed a global reputation as the deluxe Scotch whisky. As was the case with Johnnie Walker, the brand's promotional strategy also frequently called for global advertising campaigns.

For example, in the early 1990s a print campaign was keyed to the slogan "There will always be a Chivas Regal." The campaign featured a series of universal images and was translated into 15 languages. Managers in each of 34 countries were authorized to choose individual ads from the campaign that they deemed appropriate for their markets. In 2000, France's Pernod Ricard SA acquired the Chivas Regal brand from Seagram. Between 2000 and 2002, Chivas experienced a 10 percent overall decline in sales volume, while Johnnie Walker posted a 12 percent gain. Prior to the acquisition, Pernod Ricard was best known for Ricard, an anise-flavored beverage known as pastis. Some industry observers questioned whether a company that had focused on so-called "second tier" local brands had the marketing skills to reinvigorate a truly global brand such as Chivas.

As one analyst put it, "Pernod Ricard was a very big French company that has joined the big time. Now they're taking on the big global brands, which requires different skills. The question is, do they have the skills that it takes?" Ricard chairman Patrick Ricard is confident that the management team at Pernod Ricard does have the skills required to succeed in the global marketplace against giants such as Diageo. For one thing, the company's decentralized strategy is well matched to an industry sector characterized by local tastes. Unlike Diageo, Ricard passed over British advertising agencies in favor of TBWA Paris.

Impact, an industry trade magazine, observed that "When you know," the enigmatic slogan developed for Seagram's final Chivas advertising campaign, was "utterly ineffective." As Martin Riley, Ricard's chief marketing officer, explained, "When you get to a lot of countries that are not primarily English-speaking, like those in Asia or South America, they would like you to fill in the dots." A new slogan, "This is the Chivas Life," was designed to appeal to the aspirations of Chivas drinkers throughout the world.

In China, the tagline "This is the Chivas Life" was replaced in 2005 by "This is the Chivas Party Experience." TEQUILA/China, the agency that developed the theme, wanted to target more cosmopolitan, affluent young adults. The agency's research indicated an aspiration for leisure and travel. The agency developed a communication program centered on a series of parties that were staged in Shanghai, Beijing, and other key cities. Each party had a distinct theme; one was dubbed "Chivas 2070 Futuristic Life," while another was called "Chivas Life 70s Psychedelic Disco Fever." Partygoers could sample Chivas cocktails, enjoy fashion makeovers, and listen to cutting-edge music. By 2008, with the global economy starting its downward spiral, Pernod's research yielded insights into a subtle shift in consumer sentiment. As CMO Riley noted, "People are questioning a certain level of values that have taken the world to where it is right now . . . the individual getting ahead at any price."

The research results led to a new campaign in China with the tagline, "Live with Chivalry." The creative taps into Chivas' European heritage and the code of conduct practiced by knights. The themes of brotherhood, freedom, gallantry, honor, and loyalty figure prominently in the ads, which are also being run globally. One execution shows a man in a business suit walking on a crowded city street; the voiceover says, "Millions of people, everyone out for themselves. Can this really be the only way?" The spot then switches to images of men skydiving and mounted on horses. "Here's to honor, and to gallantry, long may it live. Here's to doing the right thing, to giving a damn."

Discussion Questions

1. Why are Diageo, Pernod Ricard, and other marketers of global spirits brands localizing advertising campaigns in emerging markets?

2. How do consumption habits for products such as Scotch whisky vary from country to country?

3. Why are some spirits products and brands strictly local-pastis in France, for example, or Moutai-whereas others have global potential?

4. What strategies should Diageo, Pernod-Ricard, and other Western spirits brands pursue in China?