Many markets appear saturated these days. Analysis may reveal that established players dominate and that the required marketing spend to compete presents a high barrier to entry. It’s enough to put off many potential entrants.

But look again and you may be able to see such markets with ‘fresh eyes’. You might be able to spot the traditional business model, predictable marketing strategy and well worn distribution strategy...and find scope to innovate.

Pluerat Shabani has done just this. He stared a crowded market in the face, ignored the objections of banks and venture capitalists to his requests for funding and went ahead on in his terms with a unique vision. He has successfully launched his new vodka brand into a crowded market in a recessionary climate.

Inspiring stuff, so what has driven his success?

• Clear positioning for his brand.

At £37 a bottle, this is super premium vodka. Shabani has held fast to his vision even in the face of temptation. He declined a potential listing by Waitirose – because the store would not guarantee not to discount the brand.

• Challenging prevailing wisdom.

Everyone told him that he would need £5 million to launch a new spirits brand. Indeed, this is a widely held view in the industry, so it’s not surprising that banks and venture capitalists concurred.

• Vision and tenacity of the entrepreneur.

It is likely that Shabani believed so strongly in his proposition that he could literally ‘see’ his way forward. In the absence of a marketing budget he has created his own brand story to inspire the bar owners with whom he has developed relationships. I imagine that it is a story told with passion. As he says, why does he need a PR company? He will always be able to tell the brand story better.

Can big companies learn from this?

Well, it’s a tough challenge to stick with your innovation vision when you’re part of a management team rather than a lone entrepreneur. You’ve all signed up to the annual budget and even more critically the next quarter’s results. Getting a listing with a big retailer would take the pressure off... which leads to compromises being made.

But compromises add up and erode brand positioning, ultimately leading to commoditisation. Smaller, nimbler companies run by passionate entrepreneurs can then nibble away at your big company portfolio - one brand at a time.

So, perhaps there is learning from the passionate entrepreneur.

• If there is a different sales strategy for a new innovation, try and have the product handled by a different sales team from the people who handle the rest of the portfolio. At least this way it can help prevent the new launch getting sucked into cross portfolio promotions.

• Make sure your sales teams know the real impact on gross margins of discounts. Get them to work out just how much incremental volume is required to make up for the margin loss when discounts are given. This can be quite enlightening.

• For the entrepreneur holding the margin will directly benefit his or her own business. How is your sales team incentivised? Make sure that profit is rewarded not just sales volume.

• If you’re not going to create the type of glossy marketing and advertising campaign that is industry standard, then you need something equally captivating. Mr Shabani has created a compelling story for his brand and tells it with enthusiasm.

Alternative marketing approaches can come in many forms. Above all you need to think creatively, experiment, and understand what really motivates your customers.

Yes, if you are going to do what everyone else is doing  – you're going to need £5 million to get a big enough share of voice to cut through. But cut through can come at much lower levels of spend as long as there is creative thinking.

What’s more, that ‘you need £5 million to launch a spirits brand’ phrase has been around since before the existence of social media, smart phones and viral marketing. So for many markets there are likely to be new effective approaches to marketing through using these new technologies. The important thing for Shabani was to believe there was an alternative even when the VCs and banks didn’t share his vision.

Suggested Action.

What assumptions abound in your industry sector about launching new products, selling and marketing them ? What sacred cows could be slaughtered? What beliefs could you have about your market that would be more empowering?

Learn more about Pleurat Shabani's premium vodka innovation.

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