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Lesson #1: Make a Commitment to Your Brand
For decades, the name Gallo was the last one that would ever come to mind when one was thinking of sophisticated and upscale wines. His was associated with cheap California wine – good for those who were not wine connoisseurs and who never claimed to be. And, initially, that was alright with Gallo. After all, he wanted to bring wine to those who had not been used to drinking it before. “I know Texans aren’t drinking table wine,” he once said. “If they won’t buy it, I’ll give it away to them.” And so he did, using deep discounts to lure Texans in.
In the company’s early years, Gallo saw the most potential for growth in the cheap end of the industry. But, as time went on and the company matured, Gallo saw new opportunities at the other end of the scale. He decided to move into producing new upscale varieties, but it was not an easy process.
Gallo insisted that all of his new upscale wines also be labeled with the brand “Gallo.” Of course, this decision went against the advice of marketing experts both in-house and out outside of the company. They believed that if Gallo used another name to market his premium wines, he would be able to sell more. After all, true wine connoisseurs would not be inclined to buy expensive wines with the Gallo label.
But Gallo insisted his move was less about his ego and more about building a stronger brand. “Using a different brand would not be any fun,” he said. “Where’s the challenge?” Whereas his competitors were establishing higher-end labels first, and then lettings their reputations sell their future lower-priced brands, Gallo said, “They’re depreciating their image. We’re increasing ours.”
A cartoon in the “New Yorker” captured the dilemma Gallo was imposing on wine drinkers. It read: “Surprisingly good, isn’t it? It’s Gallo. Mort and I simply got tired of being snobs.”
Gallo was not about to abandon his brand just because he was moving into a new direction. He bought up many wineries with more exclusive labels than his own, including Mirassou and Louis M. Martini, but he always brought them back to the Gallo name. No matter what his product – and no matter what popular tastes dictated – Gallo continued to use his own brand.
Today, Gallo’s son continues in that vein. Joseph Gallo insists that in no matter what direction his father’s company heads, its brand will remain the same. “How long do you think it will take consumers to see us a premium wine brand name?” he once asked a reporter. “Ten to twenty years,” he was told. “Fine, we are not going anywhere.”
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