Friday, March 2, 2012

The Road to Shangri-La

Blink:
As 2011 came to a close, I wrote about Moet Hennessy partnering with a Chinese company to build a vineyard in northwest China. I just learned that their Chief Executive, Christopher Navarre revealed:”Our first objective is to produce the best quality.” Sounds like a great wine production objective for Shangri-La.

Read On:
As I reported, the production costs of champagne in Reims, France have skyrocketed due to the increased cost of grapes and land since most of the major brands do not own vineyards, thus buy their grapes from independent growers. Consequently, Moet Hennessy, the French wine and spirits company has been investing in China. They just entered into a joint red wine venture with Chinese liquor maker the VATS Group. The area in China they have chosen to plant vines that will produce superior grapes is in the far northwest corner of the Yunnan Province at the foot of the Himalayas. Mr. Navarre at the signing ceremony indicated: “The team spent a lot of time in China to find the right location to produce this top-quality red wine. The combination of soil, sunshine and climate make it ideal for the type of grapes needed to produce a robust, Bordeaux-style wine that should be ready in three to four years. The objective here is not market share, not sales revenue. Our first objective is to produce the best quality.” For the record the signing ceremony was held in the town of Shangri-La.

Remember Shangri-La, the fictional place depicted in the British classic Lost Horizon? It was a mystical valley isolated from the outside world, synonymous with paradise and utopia according to Tibetan Buddhist folk-lore. Let’s face it, as business leaders; we are all searching for our Shangri-La. Smart marketers recognize that classic marketing models are fading and are being replaced by customer centric engagement strategies. As a result, companies (B2C and B2B) are utilizing collaborative Web 2.0 technologies to get closer to their customers. Occupants of the C-Suite are challenging their people to get into the social media game. They are also demanding “Show me the ROI” since they are too accustomed/programmed to the traditional bottom line quantitative monetary measurement of Return on Investment.

SMARTKETING has been afforded the opportunity to work on several social media projects and recommends stealing a page from Moet Hennessy’s playbook – when embarking in the new world of social media, think big picture/long-term. Make your first objective to produce the best quality social media movement since the end result is still all about achieving a transaction. Moet Hennessy understands this concept since they know they will be producing choice bottles of Bordeaux that their Chinese target market will be lining up for in future years.

Is your company ready for the long journey to Shangri-La?

3 comments:

  1. Hi Jim,

    Two things stood out while I was reading your piece. First was Navarre saying "Our first objective is to produce the best quality". As we all know, we often tend to regard things being made in China as being cheap, which is kind of ignorant since most electronics, including Apple products, are made in China. And yet, that perception persists and continues to be pushed.

    So one can only imagine that most wine drinkers would be reluctant to buy wine with some notion of it being "made in China". His focus and openness about this being their key goal shows an awareness of the challenges they face and their confidence in changing it.

    And this brings me to the next thought. In the 70s and 80s, we used to make a lot of noise about how buying 'foreign' cars was the sign of luxury or high quality. I remember so often how we did pay attention to where that TV was made because one that was made in Japan was infinitely better than one made in Korea (notice how that too has changed).

    With the growth of the middle-class in China, we're seeing that same mentality happening there, where they'd rather buy something made in Europe or North America than in their home country. However, as companies like Moet Hennessy create opportunities like this - and as Apple continues to get more unwanted attention about improving working conditions at their suppliers in China - it's easy to see that the Chinese will start to focus less on the "Made in" label and shift to our current focus of what the product offers.

    That is, after all, why so much product these days is made in China.

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  2. Great piece, Jim. Not sure I totally agree on the long-term bigpicture concept for every client. As with all strategies, each social media plan will differ according to client goals and..yes..whims, even though SM marketers will never admit to this. Also depends on company size. But, overall, I do agree that the success of any campaign is in the planning, and it must go beyond what the client wants or hopes will happen. Sometimes, it takes tough talk to snap the client out of his own skewed dreams of Shangri-La!

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  3. Jimmy,

    Two comments. (1) There is something special about the location of the French vineyards (light, soil, temperature, etc.) that I don't think can be duplicated anywhere in the world. Admirable goal to produce the best quality, and it may be the best quality in China, but I don't think it can equal France.

    (2) While important to think of the long run or long term, implementing social media tools should be embrace a "try it" mentality. Look at the speed of acceptance for Pinterest. What will be next? Yes the culture has to change to accept the new, but actions should be quick, and if something fails, move on the the next item or too.

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