Features Business
Battle of the brands

It’s no exaggeration to say that branding strategies will make or break companies, and there is everything to lose – or gain.

In the view of Mitchell Osak, LPs will choose a go-to-market approach that either leans heavily toward branding individual products (Tide or Pampers are what’s marketed, for example, and not the firms that make them) or toward a corporate branding focus (the opposite – promoting the whole company such as Microsoft, Victoria’s Secret or Harley Davidson). Which way an LP will go “depends on your product positioning, how many products you have and other factors such as available marketing budget,” notes Osak, the managing director of Strategic Advisory Services at marketing consulting firm Grant Thornton in Toronto. “Both strategies can be successful in achieving meaningful differentiation, if properly implemented.”

As those in the industry know, Canadian law will require that cannabis packaging be very plain, with only a small single brand element (a non-metallic/fluorescent company or product slogan or a logo) allowed, along with the product and company name. For his part, Erik Fletcher, chief marketing officer at Kitchener, Ontario-based LP James E. Wagner Cultivation (JWC) notes “the packaging requirements are not necessarily prohibitive compared to what we currently use. The true challenge here is how we can stand out given that everyone else is now subject to the same design restrictions.”

Indeed, but successful branding of Canadian cannabis products is not only challenging because of plain packaging. Federal law also prohibits any advertising or direct promotion, direct celebrity endorsement or the use of glamour, sex and other exciting elements in any type of indirect promotion.

“Companies will be forced to being very creative and use non-traditional marketing avenues and tools,” Osak says. However, because cannabis marketing is brand new, it also carries some execution risk. “The government could step in and disallow some tactics or executions as ‘too glamourous’ for example,” Osak explains.

“I think on the whole, we’re going to see companies at the outset aim to establish a reputation for quality, consistency and integrity, not a party animal focus. At the time of recreational cannabis legalization, most LPs will be producing both recreational and medical marijuana. Many of these LPs have a solid and growing medicinal cannabis business so they need to protect that.”

Getting creative
There are many non-traditional marketing tools available to LPs. One popular way to get the spotlight pointed in a firm’s particular direction is to have a celebrity or fictional characters join it. Rap star Snoop Dog was the first, and recent examples include KISS rock star Gene Simmons, members of The Tragically Hip rock band, and characters from the Trailer Park Boys television series. However, as Osak notes, what exactly will be allowed in terms of celebrity marketing activity is not yet truly known, nor is how much company relationships with famous people will lead to sales success.

Another marketing option is to try and co-brand a cannabis firm with the launch of non-cannabis products, such as the new “cannabis-inspired” beer called San Rafael ’71 recently released by MedReleaf and Amsterdam Brewery. The firms state that the beer is “designed to celebrate the spirit of classic cannabis culture…for adults who are discerning and knowledgeable about cannabis products and those who value quality and an authentic experience.” In other words, older hippies and younger hipsters, please give us a try.

Another non-traditional way to cause a media splash is to sponsor an event. Tweed/Canopy Growth, for example, is sponsoring Fashion Week in Toronto this year. Osak, however is not a believer that this strategy will be a good fit for every LP. “Events have long lead times for planning, plus there are only so many adult-only events to go around,” he notes. “It’s not cheap to sponsor big events, and there has to be a big social media follow up or it’s not worthwhile.”

Osak also anticipates some hesitancy at this point among event organizers and existing sponsors to be seen as affiliated with cannabis firm sponsorship. Bridget Hoffer agrees. “It’s about a values match,” notes the head of strategy and branding at Toronto-based marketing firm Cannabis Communications. “Companies and event organizers have to be aligned. But in the future, I also think the stigma of going to a cannabis firm-sponsored event will drop away.”

Other potential cannabis marketing strategies include providing expert commentary at events and in the media (radio, TV, print, internet) on medicinal benefits, responsible use and more. Interviews and comments then spread through social media, Osak notes. “LPs can also gain exposure through corporate social responsibility initiatives such as sponsoring medical research and youth education,” he adds. “In addition, in some markets LPs could own retail stores. Like Apple and Nike, a strong retail execution is a powerful form of marketing.”

Hoffer also believes the customer service experience provided in these stores will be an important marketing factor. “Overall, it’s about public relations and building a community,” she says. “Companies will seek feedback on social media through surveys and more, about the service they’ve received, and personal opinions of the product, it’s strength, taste and other attributes. They will offer customers and potential customers the option to sign up for newsletters and provide information at events.”

She says it’s up to companies to do a lot of legwork educating the public about what their brand stands for, such as a recreational experience or high-quality exclusivity.

That approach seems to be one JWC will take to heart. Fletcher notes that while his firm “certainly believes” that the quality of its product will speak for itself and attract an audience by word of mouth, that alone will not be sufficient in establishing national brand recognition.

“JWC takes pride in the authenticity of both our product and our message,” he says, “and for that reason, I don’t see us pursuing celebrity endorsements; rather, I believe the best approach is to work with media groups to keep both medical patients and adult-use consumers well-informed of our product offerings, while also partnering with non-profit groups which advocate for social causes that align with our values and who strive to make a difference in this rapidly evolving industry.”

Target markets
As the cannabis market had traditionally catered to men, Hoffer predicts this year and going forward, many new products will be specifically marketed to women.

“There are no calories in cannabis compared to alcohol, and that’s a plus for many women – and men,” she notes. “Marketing cannabis to couples as a way to enhance their relationship will also be prominent, as will marketing to Baby Boomers. Millennials will share what they buy with their parents and even grandparents. We may also see people using cannabis as part of entertaining – along with a selection of alcoholic beverages at a party, there may be different cannabis products to try.”

There will also be opportunities to position products along psycho graphic needs or demographics. For example, Osak says many premium products will be targeted at consumer segments interested in certain lifestyles and social interaction (e.g. Heineken). There may also be lighter potency brands for seniors or for consumers looking to relax or ‘mellow out.’ Looking into the future, Osak says we should also not be surprised to see the emergence of less expensive value brands. “Not surprisingly,” he explains, “the biggest retailer in the world is not Holt Renfrew, it’s Wal-Mart.”

At this exciting time, Osak notes that “the next few weeks and months is when the rubber hits the road. Companies have raised a lot of money to ramp up production and now its time to sell product. The pressure is on to design creative branding programs that quickly build awareness and communicate meaningful market differentiation.”