Chapter 12: Devising the Marketing Strategy

Question 1

The elements of strategy are often referred to as the

Answer 1

Marketing Mix

• a combination of factors that must work together for the strategy to work. If any one element is weak, this will weaken the entire marketing effort.

Question 2

The most common way for identfying the marketing mix (factors)

Answer 2

‘5 Ps’: product, price, people, place and promotion.

Question 3

Product

Answer 3

This is the object, service or system that is being marketed. In terms of wine as an object, it includes the liquid itself and all packaging and branding.

Marketing should communicate the characteristics of the product that will appeal to target consumers and how it will satisfy their needs and wants

Question 4

Product presentation

Answer 4

The presentation of the product (i.e. the bottle, label and any other packaging) should be designed to appeal to the target consumer; different types of consumers are often attracted to different features on labels.

The marketing should also describe the experience that the product will deliver to the consumer as this is seen as an increasingly important part of marketing

Question 5

Product (the saturated wine market)

Answer 5

• The wine market is often described as ‘saturated’; in other words, there are already enough products to satisfy consumers’ needs and there are few gaps in the market.
• In such a market, companies need to explain clearly how their product is different from that of a competitor, such as higher quality, better value for money, organic, vegetarian/vegan, Fairtrade, etc.

Question 6

Price

Answer 6

This is the amount that a consumer pays for a product. It is not just the price of a product on the shelf; it includes any additional costs, such as delivery, as well as discounts. It also includes the cost (in time or effort) that the consumer is willing to go to in order to buy the product.

Question 7

Price (Ideal world Pricing Strategy)

Answer 7

• In an ideal world, the pricing strategy for a product would strike a balance between the producer’s desire to make a reasonable profit and the price that sufficient numbers of consumers are willing to pay for it.
• However, this balance will be affected by the various factors that contribute to the price of wine,

Question 8

Price (Penetration pricing strategy)

Answer 8

• The price of a new product may be set relatively low (or enter the market on a price promotion) to undercut the competition and rapidly reach a wider section of the market – the expectation is that consumers will permanently switch to the new brand because of the lower price
• However, subsequent attempts to raise the price of the product may not be successful if the consumer feels that the product now offers less value for money than its competitors.

Question 9

Price (Gifting wine)

Answer 9

Research using brain scans indicates that many people get more pleasure from a wine they think is expensive than from the same wine if they think it is cheap. Consumers with lower wine knowledge who are looking to buy a wine for someone with greater knowledge are therefore more likely to buy a more expensive bottle on the assumption that it will meet the recipient’s expectations.

Question 10

Price (Pshychological Price Points)

Answer 10

• Consumers may be more likely to buy a wine priced at USD 9.99 than USD 10, because they associate the first number with ‘USD 9’ even though it is much closer in value to USD 10.
• Knowing this, a producer may reduce the price of their wine slightly so that retailers can hit the desired price point.

Question 11

People

Answer 11

• Some marketers will use ‘people’ to mean the attitudes and behaviours of the target consumer.
• The other aspects of the marketing mix will need
  to be tailored accordingly; for example, if the target consumers are not very active on social media, there is little to be gained by running an intensive social media campaign.

Question 12

People (alternative models)

Answer 12

In other models, ‘people’ refers to the relationship between the company, its staff, its partners and its customers, and includes aspects such as employee attitudes and skills, and customer service (whether that customer be the target consumer or a business customer such as a distributor).

The attitudes and behaviours of the target consumers may be considered separately; usually initially, as this factor affects all other aspects of the marketing mix.

Question 13

People (Wine Producers)

Answer 13

Wine producers should ensure they have enough sufficiently knowledgeable and trained staff to sell their products, either to final consumers at a cellar door or consumer event, or
to distributors or retailers.

It is important that any companies a producer works with, such as distributors and public relations (PR) agencies, share the producer’s image and vision. This should make it easier to present a consistent message at all stages of the supply chain.

This may require resources supplied by the producer; for example, a winemaker or a sales representative of the producer may conduct a complimentary masterclass for the employees of the distributor or retailer to highlight the brand image and story as well as showcase the products

Question 14

Place

Answer 14

This relates to where the product is sold. A company needs to identify where its target market shops, such as supermarkets, deep discounters, specialist wine shops or online, and focus on those outlets.

Question 15

Place (High Involvement Customers)

Answer 15

high-involvement consumers buy wine in independent specialist retailers. They are more likely to shop at the premium supermarket chains, but are being increasingly attracted to the deep discounters.

They tend to drink at specialist wine bars and dine out
at casual and fine dining establishments. As these consumers are keen to experiment and expand their repertoire, these outlets are ideal for placing wines from lesser known regions and/or grape varieties – provided the quality is suitable. Even if there is only a limited supply, that does not matter as such outlets will tend to sell low volumes.

Question 16

Place (low-involvement customers)

Answer 16

low-involvement consumers are looking for wines, typically at lower price points, with a simple aroma/flavour profile but that meet a certain quality standard. They tend to buy wine at the supermarket and eat and drink in general bars and non-destination restaurants. Products likely to appeal to the low-involvement consumer should therefore be placed in such outlets.

Question 17

Place (distribution channels of Intermediaries)

Answer 17

This element also involves identifying the most effective distribution channels. The types of wines preferred by high-involvement consumers are often sold through specialist intermediaries, whereas those favoured by low-involvement customers tend to be distributed by larger intermediaries.

Question 18

Place (Selling to many markets: Consumer Tastes)

Answer 18

There are additional considerations when a producer is deciding whether to sell its wine in more than one market. Consumer tastes vary from country to country and, in order to satisfy these, it may be necessary to produce wines with different aroma/flavour profiles, levels of sweetness and alcohol.

Question 19

Place (Issues with selling to many markets)

Answer 19

Issues such as legislation, taxation and duty or restrictions on distribution, such as monopoly markets and the US three-tier system, may make some markets less attractive than others. Also, a producer may decide that they cannot sell their wine profitably in so-called ‘price-sensitive’ markets

Question 20

Place (types of markets)

Answer 20

• Mature Markets
• Established markets
• Growth Markets
• Emerging Markets
• New Emerging Markets
• Mature and established markets show the greatest amount of saturation and least growth, but have the advantages not only of reliable trade structures and routes to market, but also an established wine culture.
• By contrast, emerging and new emerging markets may hold potential for most growth, but also carry the most risk and often do not have the structures in place for an easy route-to-market.

Question 21

Place (Mature Markets)

Answer 21

• Markets where wine appears to have reached its potential with stable or declining volumes.
• Germany, France

Question 22

Place (Established Markets)

Answer 22

• Markets with strong historical growth that is tailing off.
• Ireland, Italy

Question 23

Place (Growth Markets)

Answer 23

• Markets where wine is a mainstream product and/or experiencing growth.
• USA, Canada

Question 24

Place (Emerging Markets)

Answer 24

• Markets where wine is experiencing growth and shows potential from a relatively low base.
• China, Taiwan

Question 25

Place (New Emerging Markets)

Answer 25

• Markets where wine is still a relatively new and unknown beverage, but showing some potential.
• Philippines, Thailand

Question 26

Promotion

Answer 26

This covers all the methods used to promote a particular product. Because psychographical and behavioural segments will include people from different geographical locations and with a variety of demographic characteristics, a single type of promotion will not be enough to appeal to the whole segment. The marketing campaign should therefore consist of a variety of elements to connect with as many members of the segment as possible.

• For products being marketed in more than one country, it is important to be aware of the legal constraints of different countries, in particular in relation to alcohol advertising.
• Promotional activities can be divided into those that take place at the point of sale and those that happen elsewhere.

Question 27

Two Types of Promotions

Answer 27

• At point of sale
• Away from point of sale

Question 28

Promotions (Types At point of sale)

Answer 28

• Price Promotions
• Limited edition packaging/presentation
• Competitions
• Consumer tastings
• Staff Incentives
• Staff Training

Question 29

Promotions (Types away from point of sale)

Answer 29

• Advertising – TV, Cinema, Radio, Press, Billboards
• Digital Advertising – Online Platforms (Social media, websites, smartphone apps)
• Sponsorship
• Public Relations
• Events and Festivals
• Reviews and Awards
• Free Merchandise
• Wine Tourism

Question 30

At Point of Sale: Price Promotions Goals

Answer 30

In many markets, retailers regularly offer price promotions of one sort or another (although these promotions are rarely used by deep discounters).

The typical aim is to increase sales of existing products, gain volume sales for new products or attract new customers; however, sometimes they can be used to help shift old stock or discontinued lines (often called ‘bin ends’).

Question 31

At point of sale: Price Promotions (types of reduced price promotions)

Answer 31

• a specified amount or percentage discount on all or selected items;
• seasonal sales (e.g. in the run up to Christmas, ‘summer wine’ promotions);
• discounts on certain days (often used by the hospitality trade to encourage business on quieter weekdays);
• discounts for certain groups of people (e.g. students, members of the armed forces).

Question 32

At point of sale: Price Promotions (types of multi-buy/volume discounts)

Answer 32

While the price of the product is not itself reduced, consumers pay less if they buy more than one. Common examples include:

• buy one, get one free (also known as ‘BOGOF’);
• buy one, get one half price;
• buy three for the price of two;
• save a specified amount or percentage when spending over a certain amount or buying a certain number of bottles or more;
• (in the hospitality sector) buy, for example, two large glasses (25cL) of wine and get the
  rest of the bottle free.

Question 33

At Point of Sale: Price Promotions (measuring success)

Answer 33

• The success of a price promotion cannot be judged until the promotional period has ended and the price returns to normal. If the price reduction has worked, although sales will drop once it is increased again, they will still be higher than they were before the promotional period.
• However, there is a risk that the promotion will not build consumer loyalty to the product, or even the retailer, when the price returns to normal. Consumers will view price promotions simply as ways of buying products cheaply and will switch to the next similar product to be on promotion. In this case, post-promotion sales will be no higher than those before the price reduction.

Question 34

At Point of Sale: Price Promotions (Risks)

Answer 34

• Another risk of a price reduction is that it may damage the image of the product in the mind of the consumer, who may come to view the reduced price as the ‘correct’ price for that particular product and not be willing to pay the full price again once the promotion is over.
• For this reason, the Champagne industry has been very concerned about the regular price promotions on their wines in British supermarkets over recent years.

Question 35

At Point of Sale: Price Promotions (Multi-buy issues)

Answer 35

• Multi-buys and volume discounts are less likely to affect the consumer’s image of the product, as the reduction in the price of the individual products may not be immediately apparent.
• However, these promotions have been particularly controversial as they are seen to encourage excessive alcohol consumption.
• For that reason, they have been banned in some places, including Sweden and Scotland, and there are calls in many countries to limit price promotions on alcohol generally, either by banning them altogether or introducing policies such as minimum unit pricing.

Question 36

At Point of Sale: Price Promotions (Link Saves)

Answer 36

• There are two further types of price promotion, which carry less risk of devaluing the product image.
• ‘Link saves’ offer consumers who buy one product a reduced price on another product from a different category. So, for example, where a retailer suggests that a particular wine will complement a certain type of food, they may keep the wine at full price but offer a reduction on the food item.
• Also, many wine retailers offer discounts not on the wine itself but on delivery costs by, for example, offering free delivery for orders over a certain amount (of bottles or price).

Question 37

At Point of Sale: Price Promotions (Pros and cons for producers)

Answer 37

Promotions can be highly beneficial to wine producers as they can increase sales and brand awareness. However, many big retailers expect producers to meet the cost of any promotions, including any loss in sales revenue, with the result that they may only be financially viable for larger producers.

Question 38

At Point of Sale: Competitions

Answer 38

• Competitions can be used to encourage consumers to buy a particular product. For example, a New Zealand wine producer could offer anyone in a particular export market who buys a bottle of their wine the chance to enter a draw to win a two-week holiday in New Zealand. This may be a more attractive, higher-value proposition to consumers than merchandise as it gives them the chance to win something exclusive.
• Most companies running competitions also use them as an opportunity to collect consumers’ contact details, which they can use for further promotions, subject to data protection laws in the relevant jurisdiction.

Question 39

At point of sale: Limited Edition Packaging/Presentation

Answer 39

• It is common for companies to create limited edition packaging for their products. Some producers of super-premium wines offer exclusive, elaborately-designed presentation cases for particular wines that are prized by wine investors and so contribute to the luxury brand image.
• Other producers create limited edition packaging linked to major events such as the mens’ soccer World Cup or the Olympic Games. If this is a regular promotion, such as Champagne Lanson’s limited edition packaging to tie in with its sponsorship of the Wimbledon Tennis Championships each year, this can help promote the brand’s image.
• However, most limited edition packaging is seen by consumers as little more than a bit of fun: while some consumers may be introduced to the brand in this way and then buy again, it does not tend to increase sales in the longer term.

Question 40

At point of sale:
Consumer Tastings

Answer 40

• Some retailers offer in-store tastings, particularly to introduce customers to new products or vintages.
• There can be a cost to the retailer of opening bottles that they could have otherwise sold, although many distributors and producers are willing to provide a few free bottles for tasting purposes. studies have shown that offering tastings can increase sales.[4]
• Many consumers, especially low-involvement ones, are nervous about spending money on wine when they do not know if they will like the taste. If customers try the wine and like it, they are more likely to buy it not just at the tasting but again in the future. Even if the customers do not like the wine at the tasting, they may well buy something else while they are in the shop.
• Many distribution companies offer to host in-store tastings to promote their wines and will send a representative to talk about them. Sometimes, they will arrange for the winemaker to come and tell the story of the wine. Many restaurants also now host wine tasting dinners where the wines are matched with different courses of food.

Question 41

At point of sale: Staff Incentives

Answer 41

• Staff may be offered an incentive to sell more of a particular product. For example, the member of staff selling the largest number of bottles of a particular brand of Champagne during the promotional period might be rewarded with an expenses-paid visit to the region. These are usually funded by the producer or the relevant trade body.
• However, it should be noted that in some markets, such as China, this practice is considered bribery or unfair competition and is therefore illegal.

Question 42

At point of sale: Staff Training

Answer 42

• Staff may be trained and educated on particular products. Such training may be provided by the retailer, the distributor or the producer themselves. Educating staff about how a wine is made and allowing them to taste it helps them to promote the product with more confidence and enthusiasm, and will enable them to tell the story of the wine
• Using staff as a promotional tool, either via incentives or training, can work well where there is personal contact between the sales staff and the consumer, such as in specialist wine shops and bars, and fine-dining restaurants. However, it is not appropriate for larger retail outlets, such as supermarkets, where there is little or no interaction between staff and consumers.

Question 43

Away from point of sale: Advertising TV, Cinema, Radio, Press, Billboards

Answer 43

• A well-designed advertising campaign can be a very powerful tool for promoting a product to a potentially large and varied group of consumers. A particularly successful campaign can remain in consumers’ minds for a long time after it has been withdrawn, sometimes even for years.
• Advertising campaigns can be very expensive, especially if they run on television, in cinemas or in the national press. Companies also need to employ the services of an advertising agency to design their campaign (even the biggest companies with an in-house marketing team) and this too can be very costly.

Question 44

Away from point of sale: Advertising TV, Cinema, Radio, Press, Billboards (Global Adverts)

Answer 44

Where a product is being marketed globally, adverts can be easily translated into other languages, although companies should ensure that there is nothing about it that might offend different cultures or get lost in translation. Sometimes specific ‘international’ advertisements, delivering the global brand message, are created for use without change wherever the advertisement may be shown.

Question 45

Away from point of sale: Advertising TV, Cinema, Radio, Press, Billboards (Issues)

Answer 45

• The main issue with all such advertising is that, due to the health concerns associated with alcohol, most countries have laws restricting the advertising of alcoholic beverages. These range from total prohibition, as in the United Arab Emirates and Qatar, through very strict controls, such as the Loi Evin in France, to a less rigid approach based on self-regulation by the alcohol industry, as in the UK.
• As well as trying to discourage excessive drinking, these laws and codes of conduct also seek to limit the promotion of alcohol to younger people (even those above the legal minimum drinking age). It is essential that any advert conforms to the requirements of the country in which it is used.

Question 46

Away from point of sale: Television or Cinema

Answer 46

• These can be the most powerful tools of advertising campaigns and can reach the largest number of people. As a result, however, they are very expensive, especially if the advert runs during a popular prime-time television programme, and so only companies with large marketing budgets can afford them.
• Product placement may also be used, often at a lower cost. This is a form of advertising in which branded products feature in a form of media, such as a TV programme or a film.

Question 47

Away from point of sale: Radio

Answer 47

Although usually considered slightly less effective than TV or cinema, radio adverts are less expensive and so are open to companies with more modest marketing budgets. However, the lack of images may make them much less memorable.

Question 48

Away from point of sale: Press advertising

Answer 48

• This often takes the form of a striking full-page image with little or no text, designed to promote the brand’s image. However, for products that have a story to tell, such as wine, adverts with text can be very effective at attracting readers and giving a much more detailed story than a 30-second TV, cinema or radio slot, and often at a lower cost.
• It is important to place the advert in the right print media (newspapers or magazines) to reach the target consumer segment. Some large brands will advertise in the general, non-specialised press to reach as many people as possible.
• However, most wine companies will place adverts in specialist wine or food publications as these tend to be read by high-involvement wine consumers. Some producers also pay respected wine writers to write articles specifically about them and their wines in such publications (sometimes known as ‘advertorials’).

Question 49

Away from point of sale: Billboards

Answer 49

• Some companies use billboards to advertise their products. They are found in a variety of locations. They are often seen by the side of roads, but, as most people are unlikely to be able to look at them for very long, these must have a striking and memorable image and a short, simple message.
• However, posters at railway stations and bus stops can contain a more detailed message because people waiting for a train or bus often spend longer reading advertising posters as there is not much else to do.

Question 50

Away from point of sale: Digital Advertising – Online Platforms

Answer 50

• The internet and social media have become a very easy way for companies to advertise their products cheaply to a large, global audience. This will usually take the form of an advert on another website (for example that of a magazine or a supermarket) or a social media channel (see below for more detail on the use of social media).
• Aside from the costs of creating the advert, the company will only need to pay if the advert is on another company’s website.

Question 51

Away from point of sale: Social Media & consumer interaction)

Answer 51

• Social media such as X, Facebook, WeChat and Sina Weibo have caused companies to review how they relate to the public.
• For the first time, it is possible to have a dialogue with consumers rather than talking to consumers, as is the case with more traditional advertising media. It is also particularly important for communicating with younger consumers.

Question 52

Away from point of sale: Social Media Strategies

Answer 52

• While social media can be used to share adverts, positive reviews and other promotional activity, studies suggest that non-promotional activity is equally important; indeed, it is believed that companies that only use social media for promoting themselves tend to alienate followers.
• Companies should therefore also use their account to share news, articles, photos and videos that are likely to interest their target consumers, even if they are not directly related to wine. Producers can also post updates, including photos and videos, of what is going on in the vineyard or winery.
• It is important that a company chooses the most appropriate social media channels to communicate with its target market. For example, recent statistics suggest that younger people are turning away from Facebook and X to more visual media such as YouTube and Instagram.[5]

Question 53

Away from point of sale: Social Media (reviews)

Answer 53

• It allows people to share their experiences with others easily. In the wine world, this means ordinary consumers (i.e. not only well-known critics) can share their thoughts on a particular wine.
• There are now a number of social media sites dedicated to wine where people can share reviews and tasting notes with other users. Many wine retailers’ websites also allow customers to leave reviews.
• These ‘peer reviews’ have become increasingly important on wine purchase decisions, especially among millennials, many of whom trust these more than reviews by established critics.

Question 54

Away from point of sale: Social Media (Pros & cons)

Answer 54

• While social media can potentially provide invaluable free promotion, it can also lead to negative publicity and reviews. Companies need to manage their social media presence, both frequently and carefully, and react to any negative content in as positive a way as possible.
• There is also a danger that users may post inappropriate materials to a company’s page, which should be taken down immediately.

Question 55

Away from point of sale:
Websites (communication to markets)

Answer 55

• The internet offers a wide range of new promotional possibilities. It allows companies to communicate with large numbers of people throughout the world, including markets in which they are not otherwise present.

Question 56

Away from point of sale:
Websites (content)

Answer 56

• A website can give consumers a great deal of information about a business, enhanced through the use of photographs and videos.
• A wine producer’s website can tell the story of the wine, give details of the wines produced, offer food and wine pairing suggestions, incorporate an online shop and provide details of upcoming events.
• It can provide different levels of information to satisfy different types of consumer; for example, there may be some basic details about the wines produced that will satisfy most consumers, but perhaps a link to more technical specifications detailed enough to satisfy the most exacting of high-involvement consumers.

Question 57

Away from point of sale:
Websites (Needs)

Answer 57

• A website must be attractive and easy to navigate. Internet users are very demanding and will not tolerate any site that seems badly constructed, runs slowly or crashes. Websites have become an essential part of brand image and must be consistent with the overall marketing strategy.
• While there are online applications that allow companies to build their own website cheaply, these websites tend to look very similar. Many companies therefore prefer to have a personalised site created for them, but employing consultants and IT experts can be costly.

Question 58

Away from point of sale:
Websites (Issues with competition)

Answer 58

• Companies want to ensure that as many people as possible find their website, which can be difficult given the vast number of websites now in operation. Studies show that people searching online rarely go beyond the first couple pages (or even the first page) of Google search results.[6] For this reason, companies use a variety of ‘search engine optimisation’ techniques to ensure their website features as high as possible in search results.
• Another concern about websites is that they can be accessed by people below legal drinking age. Almost all websites for alcoholic drinks will have some form of filter, asking whether the visitor is of legal drinking age in their country of residence or asking them to enter their date of birth and country of residence before they can access the site. Of course, these filters are entirely dependent on visitors being honest.

Question 59

Away from point of sale:
Smartphone Apps

Answer 59

• There is an ever-increasing range of smartphone apps that allow users to find, read about and comment on individual wines. Some are intended for high-involvement consumers who want to read reviews from other enthusiasts or professionals (to which they already subscribe) or to keep track of the contents of their own cellars.
• Aside from the opportunities for free publicity discussed above, several wine companies are starting to engage with these apps to promote their business. For example, some shops allow their stock information to be shared through these apps so that consumers who want to buy a particular wine can find out who stocks it, with the shop then paying commission to the app operator if the consumer clicks through to buy the wine.

Question 60

Away from point of sale: Reviews and Awards (reviews)

Answer 60

• A favourable review or a high score from a well-respected critic can significantly boost sales of a particular wine. Producers may target particular critics and send them samples of their wine to try and, hopefully, get a review.
• However, many critics do not like this approach; for example, Robert Parker made a virtue out of always buying his own wine to taste.

Question 61

Away from point of sale: Reviews and Awards (Awards)

Answer 61

• Producers may also send samples to wine competitions such as Decanter World Wine Awards or the International Wine Challenge. If the wine wins a medal, the producer can use this in their promotional material and it is also possible to purchase stickers to put on the bottle, showing at the point of sale the awards that a wine has won.
• It is thought that critic scores and awards can influence the purchase decision, especially among lower-involvement and less knowledgeable consumers. Critics’ scores and medals can also be influential for wine buyers. Many producers therefore consider the cost of entering the competition and sending the required number of bottles for tasting a worthwhile expense.

Question 62

Away from point of sale: Wine Tourism

Answer 62

• Wine tourism is an important form of promotional activity that may be particularly beneficial for new producers and those in up-and-coming wine regions, as it provides an opportunity to engage with the public.
• As explained previously, giving consumers the opportunity to taste wine can significantly increase the likelihood of sales, and people who visit producers are generally more likely to become regular customers and to recommend those wines to others.

Question 63

Away from point of sale: Wine Tourism options

Answer 63

• While some producers simply operate a cellar door for customers to come and buy wine (see Selling Directly to Consumers), many are offering increasingly sophisticated wine tourism experiences. These include tasting rooms, vineyard and winery tours, visitor centres, shops, cafés, casual dining and even fine dining restaurants and accommodation.
• Some offer experience packages, such as allowing visitors to participate in the harvest or to become a winemaker for the day. Many hire out space for events such as weddings and parties.

Question 64

Away from point of sale: Wine Tourism Issues

Answer 64

• While wine tourism can increase sales, developing the infrastructure can be very expensive. Tourists can also take time away from day-to-day operations in the vineyard and winery, and small wineries may simply not have the staff to deal with large numbers of tourists. Some wineries therefore only run occasional events and organised tours, while others do not encourage visitors at all.

Question 65

Away from point of sale: Wine Tourism Strategies

Answer 65

• Many wine regions have developed successful wine tourism strategies bringing together not just producers but also other tourist businesses (e.g. tour companies, restaurants, hotels).
• They have created wine trails that link up a number of producers and that visitors can follow; in some regions, such as Alsace, these include cycle routes.
• Others have created special tourist attractions, such as the Napa Valley Wine Train, which includes a gourmet dining experience with Napa Valley wines aboard vintage rolling stock and includes the option of winery visits.

Question 66

Away from point of sale: Wine Tourism for high-involvement customers

Answer 66

• High-involvement wine tourists are more likely to travel to wine regions to visit wineries and sample the local food.
• Because they are keen to widen their wine knowledge, they enjoy tours of vineyards and wineries and like the opportunity to talk to the people involved in producing the wine.

Question 67

Away from point of sale: Wine Tourism for low-involvement customers

Answer 67

• Low-involvement tourists are more likely to visit a winery because it is in the region they are visiting – for example, visitors to Barcelona might take a day trip to a Cava producer.
• They will usually be happy with a brief tour or simply just a tasting. However, even low-involvement tourists make purchases and can recommend wines to others and so this segment should not be ignored.

Question 68

Away from point of sale: Public Relations

Answer 68

Companies regard good PR as essential to successful promotional activity. Advertising is not the same as PR: advertising seeks to draw attention to and promote a specific product or range of products, whereas the aim of PR is to give the business the most favourable image possible in the mind of consumers. PR activities include:

• newsletters;
• press releases;
• representatives of the company attending public events or appearing on TV or radio news programmes to comment on issues relevant to the business;
• social media.

A strong social/corporate responsibility policy can also help create a positive image in the eyes of many consumers.

Question 69

Away from point of sale: Public Relations (brand ambassador)

Answer 69

• One particular form of PR used by many larger companies is the brand ambassador. While they are often full-time employees of the company, chosen for their excellent brand knowledge and their social and presentation skills, some brands employ a celebrity who the company believe shares the values and image of their products.
• The celebrity brand ambassador will feature in advertising campaigns and/or videos posted on the brand’s website; for example, tennis player Roger Federer is a brand ambassador for Moët et Chandon.
• In China in particular, key opinion leaders (a person, community or organisation that creates high quality content on social media and has a large group of loyal followers, ranging from thousands to millions) may be hired by wine companies to create social media content about the company’s brands that is then shared by the key opinion leader with their huge numbers of followers.
• If the key opinion leader has a genuine interest in and knowledge of the product, this option can be very powerful in markets where ‘word-of-mouth’ and peer
  recommendation is highly valued.

Question 70

Away from point of sale: Sponsorship

Answer 70

• Many sporting and cultural events are supported financially by sponsorship deals. Examples of wine companies that sponsor events include Chilean wine brand Cono Sur (Tour de France), Mouton Cadet (golf’s Ryder Cup) and Champagne house Carbon (supplier of Champagne for Formula One podium celebrations).
• In some cases, the deal simply involves display of a business’s logo on billboards or participants’ clothing. Other deals give the sponsor exclusive rights to be served in the bars and hospitality venues at the event.
• Some companies also sponsor television programmes. This is cheaper than producing a television advert; the product or company logo appears briefly at the beginning and end of the sponsored programme, either as a still or, increasingly, in a short piece of film.
• In most countries, sponsorship is treated as a form of advertising and is therefore subject to the same legal restrictions. It can be a controversial topic, particularly in the sporting arena where some people question the suitability of linking alcohol with activities that are intended to promote health and well-being.

Question 71

Away from point of sale: Events and Festivals

Answer 71

• An increasing number of wine regions are organising festivals that bring together producers from that region. They often take place in urban areas and provide an ideal opportunity to taste a variety of producers’ wines without having to travel out to vineyards and wineries, which tend to be in rural areas.
• These events are likely to attract high-involvement consumers, but, because these festivals usually include local food and other entertainment, such as live music, they can attract a broader range of consumers than are prepared to go to visit vineyards and can therefore be an excellent opportunity to engage with new customers.

Question 72

Away from point of sale: Events and Festivals (costs)

Answer 72

• The benefit of attracting new customers has to be offset against the cost of attending these events. Producers usually have to pay to exhibit and may have to pay additional staff to run the stand; they will also have to use up stock as tasting samples they could otherwise have sold.
• In addition, there is the cost of preparing the stand: these will vary in style depending on the type of event, ranging from a simple table to a more expensive branded pop-up bar with a seating area and props.

Question 73

Away from point of sale: Events and Festivals (disadvantages)

Answer 73

• The stand also needs to stand out to attract visitors, as an obvious disadvantage of exhibiting at events is that there are lots of other stands and products competing for the visitors’ attention, unlike at their cellar door. All the producers will be offering tastings and individual producers need to think about offering something distinctive, such as food pairings or a more formal tasting at which visitors can taste a specific range of wines, perhaps run by the winemaker.
• Even at wine festivals, tastings must be carefully managed; it is not unknown for consumers who have paid to enter a fair to consider they have the right to drink (rather than taste) as much as possible, often with regrettable results. To combat this problem some events issue visitors with vouchers that must be handed to staff on a stand before the visitor can be given a sample.

Question 74

Away from point of sale: Events and Festivals (Non-wine focused)

Answer 74

• Some producers also exhibit at events where wine is not the main focus, such as food fairs, travel shows and music festivals. These events attract an even wider range of visitors, many of them not regular wine drinkers.
• Again, these can be an excellent opportunity to engage with new consumers who might not otherwise try their wine; however, they are much less likely to ultimately result in new customers and increase future sales. In order to make exhibiting at such events worthwhile, producers will usually charge for people to try their wine or simply sell wine by the glass.

Question 75

Away from point of sale: Events and Festivals (Free merchandise)

Answer 75

• This is another way to generate sales without the need to reduce the price of a product. Such offers are particularly common before a national holiday or any other time when alcoholic drinks are given as gifts; for example, a bottle of wine could be offered for sale in a special presentation pack with two branded glasses.
• Big producers also have various promotional items that they offer to consumers who buy their products, such as branded ice buckets, corkscrews and even items not directly related to wine, such as umbrellas. These products can help to increase the brand awareness not only of the person using them but also others around them, and so indirectly promote sales.