Jay-Z, Cristal, and Emergent Strategies
Louis Roederer, the makers of Cristal champagne, are facing their worst nightmare: A boycott by rap artists.
Remember, it's these same artists that have made Cristal the 8th most mentioned brand in Top 20 songs, behind stalwarts such as Mercedes, Bentley, Nike, and Rolls Royce (pretty good company, one would think!).
In the most recent issue of The Economist, Frederic Rouzaud, the managing director of Roederer, was asked if he thought that the association between his high-end champagne and endless rap lyrics and videos could be detrimental to his brand.
"That's a good question, but what can we do? We can't forbid people from buying it. I'm sure Dom Perignon or Krug would be delighted to have their business."
I'm not sure if it would be possible to create a worse response without using ethnic slurs. Let's review:
1) I've basically said that I don't like my best customers.
2) I've implied that I would like to forbid them from buying it.
3) I've told them that they should go to my competitors, then I mentioned their brands.
Jay-Z probably fell out of his diamond-encrusted executive chair when he read the article, and wasted no time in responding:
"It has come to my attention that the managing director of Cristal, Frederic Rouzaud views the 'hip-hop' culture as 'unwelcome attention,"' Jay-Z said in a statement released Wednesday. "I view his comments as racist and will no longer support any of his products through any of my various brands including The 40/40 Club nor in my personal life."
This is a classic example of a business refusing to recognize an emergent strategy. Roederer didn't plan on selling to black rap stars, but once that market opened up, they should have jumped in with two feet. Instead, Rouzaud made it clear that he found the market faintly distasteful.
What he should have said was, "We at Louis Roederer couldn't be happier that Cristal is enjoyed so widely by the hip hop community. These artists are discerning consumers and the fact that they choose Cristal is an indication of its quality. Cristal is the kind of drink that every consumer can enjoy. Holla!"