D2: Analysing the current market and identifying the target consumer (8)

Question 1

Although the creaton of the product is often a key part of the story of wine, it is only oe part of the marketing proces.

Answer 1

1) a product that doesnt provide something different, cheaper or better than a product that is already on the market is likely to have limited success

2) most products will not appeal equally to all consumers and therefore it is important to identify the type of consumer that the product is aimed at
* so that the marketing strategy can be tailored to their wants and needs

Question 2

Another important activity is when preparing to create a market strategy is to identify and analise the factors (both internal and external) which affect the product, the company and market it opperates

Answer 2

This should be an objective analysis of the

1) health of the businees
2) its current and potential customers
3) trends within the particular market
4) position of the business within it

Question 3

The most common way to achieve this is by carrying out a SWOT analyisis;

Answer 3

1) Strength
2) Weakness
3) Opportunities
4) Threats

Question 4

An example in the wine business of SWOT diagram:

Answer 4

1) Strengths:
* The wine is competitively priced
* The wine is high quality
* The wine is an unique style
* Strong customers base
* Broad market coverage
* Highly skilled/knowledgeable workforce

2) Weaknesses:
* High production cost
* Limited Marketing activity
* The wine not widely known outside its region of production
* poor brand image
* limited resources

3) Opportunities:
* New and growing markets
* gaps in the market
* market trends such as premiumisation, interest in lower alc wines
* Weak local currency, making wine more competitive on export markets

4) Threats:
* Competitors
* Possible changes in legislation (eg min unit pricing)
* changing consumers tastes
* concerns over the social or health impact of alcohol
* Increases in duty/taxation
* Strong local currency, making wine less competitive on export markets rates

Question 5

In simple terms:

Answer 5

1) Strength and weaknesses are those of the particular product or company
2) opportunities and threats are external factors which affect the market as a whole

Question 6

Once they have been identified, strengths and opportunities can be exploited (uitgebuit)

Answer 6

1) Where possible these should be highlights in the marketing campaign
2) steps should also be taken to eliminate weakness and mitigate threats as far as possible

• • is is also possible to achieve this through marketing:
• improving a poor brand image
• lowering prices to compensate for exchange rate rises

Question 7

Wat is segmentatie?

Answer 7

Het proces waarin op basis van 1 of meerder kenmerken, homogene groepen klanten worden vastgesteld en klanten aan deze segmenten worden toegewezen

Question 8

The next stage is to identify the consumers for the product through a proces known as segmentationand then understand the needs and wants for those consumers through market research

Answer 8

It would not be profitable to design and produce a specific product for every individual consumer

• for that reason companies need to try and define the group of consumer (often called a market segment or simply a segment) who will be attracted to their product and the marketing of that product to them

Question 9

Segmentation looks simple, but it isnt because everyone is different

Answer 9

The aim is to choose a group with sufficiently similar preferences and needs to create a meaningful segment that can be targeted by companies

Question 10

Segmentation is often based on four sets of variables:

Answer 10

1) geographic
2) Demographic
3) psychographic
4) behavioural

** a segment will usually be defined as a combination of variables

Question 11

Geographical Variables:

Answer 11

These relate simply to where the consumers live (eg country, region or city) and shether they live in an urban (stedelijk) or rural (landelijk) area

Question 12

Demographic variables:

Answer 12

These includes:

1) age
2) gender
3) ethnicity
4) family status
5) income
6) level of education (are they university educated
7) occupation socioeconomic status: this is an individual position in society relative to others based on their income, level of education and occupation

Question 13

Psychographic variables

Answer 13

1) lifestyle (people who like to go out to eat and drink)
2) personality (people who like to show off their wealth or knowledge about wine

3) values and beliefs( vegetarians, people who prefer products that are organic, environmentally friendly or fairtrade
4) interests (those who are interested in wines from a particular country or region)

Question 14

Behavioural variables:

Answer 14

these are variables based on consumers observable behaviour such as:

• what benefit do they want from wine (eg quality, value for money, prestige?)
• When do they buy wine (on special occasion or regularly)
• where do they buy wine ? (supermarket, specialist wineretailers)
• how often do they buy wine and in what volume?
• what is their level of brand loyalty
• What is their level of interest in wine (eg enthusiast, moderate interest, indifferent)
• Are they early adopters (people who are keen (enthousiast) to buy new products when they come to the market) or late adopters

Question 15

People who share psychologial or behaviourable characteristics are more likely to behave in a similar way than those who live in the same area or are in the same age group

Answer 15

Okido

Question 16

There is no global model of consumer segmentation each country is different

Answer 16

The closest the wine industry has got to creating global segments is to separate high- and low involvement consumers
* high involvement consumers have a deep interest in the wine they drink and are keen to try new products and tend to spend more on wine

• low involvement consumers have little interest in the detail of what they drink, stick to a few products which they know and are unlikely to spend much on the wine they buy

Question 17

There has been a number of attempts to divide wine consumers into narrow segments (mainly in the context of wine tourism rather then buying the wine) 1

Answer 17

1) Wine lovers: those with a great interest in, and knowledge of wine; high income and high level of education
2) wine interested: those with a great interest in wine, moderate wine knowledge, university educated with moderate income
3) Wine curious: those with moderate interest in wine but limited knowledge, moderate income and med level of education, they see wine as an opportunity to maintain social relations

Question 18

Wine intelligence US portraits 2016

Answer 18

Zie curcus

Wine intelligence provides a range of additional information to help companies understand these segments breaking each down into demographic groups, leel of involvement and their wine-buying habits, motivation and behaviour
** although companies need to pay for this information, it can be

*** however even within such a sophisticates segmentation model, there will still be plenty of consumers who do not fit into any one particular segment
Nevertheless a successful segmentation exercise will help to identify the type of consumer who might buy a particular product

– armed with that information a company can make a realistic estimate of how much that consumers may be willing to pay for it, where the product is likely to sell and how best to market it

Question 19

What is market researcg ?

Answer 19

Gathering and analysis of data about a particular market segment in order to understand what that segment wants or needs

Question 20

Market research can be useful at all stages of the marketing process

Answer 20

1) prior to starting work on a new product, a company can use market research to understand whether there is a need in the market for that product and, if so, what feautures (kenmerken) people would like to have and how much they might pay for it

Question 21

Market research is especially important in creating the market strategy as it can confirm whether the approach suggests by the segmentation exercise is accurate or not, before the company embarks on a potentially expensive and time consuming marketing campaign

Answer 21

okido

Question 22

Market research takes time and effort to arrange and some methods can be relatively expensive, such as setting up a focus group

Answer 22

It is therefore important to be clear about the aims of the research from th eoutset:

• what information is needed (what price are consumers prepared to pay for a particular product
• from whom will the researchers gather data: eg small group of consumers or a cross selection of the public
• how will the research be carried out, for example:
• survey a series of questions
• focus group (small group of people drawn of a segment)
• interviews: one to one discussion of the topic being researched
• observing consumer behaviour
• secondary research: using data available from a market research company

Question 23

what do they mean by observing the behaviour of the consumer ?

Answer 23

1) Observing and analysing the behaviour of the target customer
2) this may be to find out the wants and the needs of these consumers

3)or it may be used later in the marketting process to monitor the succes of a campaign and possible make just adjustments to make it more seccesful

Question 24

Marketing can have influence on consumer behaviour in different ways:

Answer 24

1) it can bring to the attention of the consumer something that they need or want
2) some marketing (eg an advert for a local wine shop) can direct consumers to where they can buy the product, reducing the effort needed to buy that product

3) in various ways marketing will also usually highlight the selling point of that product:
* whether it has a luxury status
* the fact that the grapes are organically grown or a competitive price
- - this can influence the evaluation of the alternatives available and the final purchase decision

Question 25

Therefore understanding following points of the consumer is necessary:

Answer 25

1) what appeals the consumer (beroepen)
2) their lifestyle
3) and what influences their decision making

** these can ensure that the marketing strategy is as effective as possible

Question 26

How can you observe the behaviour of the consumer?

Answer 26

1) watching how the consumer moves around in the shop
2) interacting with the consumer
3) store loyalty cards (records of purchases)
4) web analytics (information recorded about what web pages you have visited
- how long you spend on the page, etc

5) also some studies have shown that factors such as the lighting, music or decor in a shop or restaurant also influence the consumer