D2C12 Devising Marketing Strategy Flashcards
What is the marketing mix
Elements of the marketing strategy, a combination of factors that must work together for the strategy to work
5Ps: product, price, people, place, promotions
What is the product in the context of marketing mix
The product being marketed, including all packaging and branding and any value-added features, e.g., gift wrapping in a wine shop and a winery’s wine club
What should marketing communicate with regard to the product
Characteristics that will appeal to target consumers and how it will satisfy their needs and wants
Presentation appeal to consumer
Experience delivered
What does saturated market mean
There are already enough products to satisfy consumers’ needs and there are few gaps in the market
Strong competition between relatively similar products
What should companies try to explain with regard to the product in a saturated market
How their product is different to that of competitor, e.g., better quality, better value for money, organic, Fairtrade etc
What is price in the context of marketing mix
The amount which a consumer pays for a product
Includes price of the product on the shelf, and any additional costs such as delivery and discounts
Also includes cost in time and effort which the consumer is willing to go to in order to buy the product
List some pricing strategies
Penetration strategy: Low price for new product - undercut competition and rapidly reach a wider section of the market, expecting consumer to permanently to switch to new brand. May be difficult to raise price later
High price: linked to more pleasure. Consumer with low wine knowledge buying for someone with more knowledge are likely to buy more expensive bottle
Certain price points have psychological importance: 9. Producer may reduce price slightly so retailers can hit desired price point
What does people mean in the context of marketing mix
Attitudes and behaviors of target consumers;
Relationship between company, staff, partners, customers, and includes aspects such a s employee attitudes and skill, and customer service
Key features of people
Ensure to have sufficiently knowledgeable and trained staff to sell
Any companies, such as distributors and PR, share producer’s image and vision
Present consistent message at all stages of supply chain
What is place in the context of marketing mix
Where the product is sold
List elements to consider regarding place in the marketing mix
Where target market shop, supermarkets? Specialist wine shops?
Identify most effective distribution channels: bulk? Specialist intermediaries?
Consumer tastes change between countries: produce wines with different aroma/flavor, sweetness and alcohol
Legislation, taxation and duty or restriction on distribution make some markets less attractive
Market maturity
Briefly compare mature and emerging markets
Mature and established markets show the greatest amount of saturation and least growth; reliable trade structures and routes to market; established wine culture
Emerging and new emerging markets hold potential for most growth; carry most risk; often do not have the structures in place for an easy route-to-market
List major types of market, describe and give examples according to WI’s market maturity
Mature market: markets where wine appears to have reached its potential with stable or declining volumes. E.g., Germany, France, Switzerland, UK
Established market: markets with strong historical growth which is tailing off. E.g., Australia, Netherlands, Ireland, Japan
Growth markets: markets where wine is a mainstream product and experiencing growth. E.g., USA, Canada, Italy, Poland
Emerging markets: markets where wine is experiencing growth and shows potential from a relatively low base. E.g., China, Russia, Brazil
New emerging markets: Markets where wine is still a relatively new and unknown beverage, but showing some potential. E.g., Malaysia, Philippines, Vietnam, Thailand
What is promotion in the context of marketing mix
All methods used to promote a particular product
Two categories of promotional activities
Those take place at point of sale
Those happen elsewhere
List promotions at POS
Price promotion Free merchandise Limited edition packaging/presentation Competitions Consumer tastings Staff training and incentives
The aim of price promotions
Increase sales of existing products, gain volume sales for new products or attract new customers
Shift old stock or discontinued lines
What are bin ends
Shift old stock or discontinued lines
List major types of price promotions
Effectively reduce the price of a product, usually for a limited period
Multi-buy or volume discount
Link saves
Discount on delivery cost
Examples of price reduction
Specified amount or percentage discount on all or selected items
Seasonal sales
Discounts on certain days
Discounts for certain groups of people
Give examples of multi-buy or volume discount
BOGOF
Buy one get one half price
Buy three for the price of two
Save a specified amount when spending over a certain amount, buying a certain number of bottles or more
Buy two glasses and get the rest of the bottle free
How to fudge the success of price promotion
If price reduction has worked, although sales will drop once it has increased again, they will still be higher than they were before the promotional period
Risk of price reduction
Promotion does not build consumer loyalty to the product or even the retailer, when price returns to normal
Consumers view promotion simply as ways of buying products cheaply and switch to the next similar product to be on promotion
Damage image of product in the mind of consumer (direct reduction, not multi-buy)
Multi-buy and volume discounts encourage excessive alcohol consumption
What is link saves
Off consumers who buy one product a reduced price on another product from a different category
Adv and disadvantages of price promotion for producers
Highly beneficial: increase sales, brand awareness
Dis: big retailers expect producers to meet the cost of promotions including loss in sales revenue, resulting that they may only be financially viable for large producers
Adv and disadvantages of free merchandise for producers
Adv: generate sales without the need to reduce price of product
Dis: available to everyone, rarely seen as anything valuable by consumers, unlikely to create many additional sales
Adv and disadvantages of limited edition packaging/presentation
Contribute to brand image: exclusive, elaborately designed presentation cases for particular wines; packaging linked to sponsorship of major events promote brand image if regular
Dis: most seen by consumers as little more than a bit of fun; may be introduced to the brand in this way and buy again, but does not tend to increase sales in the longer term
Advantages of competitions to producers
Encourage to buy a product because it is a more attractive, higher-value proposition as it gives the chance to win something exclusive; collect consumers’ contact details, which are used for further promotion
Adv and disadvantages of consumer tastings
Adv: studies show that offering tastings increases sales; consumers,especially low-involvement, nervous about buying when they do not know if they will like it. Many will buy now and future, those who don’t may buy something else
Dis: cost of bottles which could have been sold, sometimes provided by retailer, sometimes by distributor and producers
Benefit and disadvantages of using staff as promotional tool
Education help promotes the product with more confidence and enthusiasm, allow them to tell story of wine
Incentives may not be illegal in certain markets (China)
Not suitable for large retail outlets
In what kind of market is using staff as promotional tool
Where there is personal contact between sales staff and consumer, such as specialist wine shops, bars, restaurants
Not appropriate for larger retail outlets such as supermarkets
List promotions away from point of sale
Advertising Sponsorship Website Social media Smartphone apps Wine tourism Events and festivals Reviews and awards Public relations
Major benefits and disadvantages of advertising
Benefit: well-designed advertising campaign can be very powerful tool for promoting a product to a potentially large and varied group of consumers. Can remain in minds for long time after withdrawn
Dis: can be very expensive, esp on TV, cinemas or national press; need advertising agency which can be very costly
Many countries have laws restricting advertising of alcoholic beverages
Major channels of advertising campaign. Compare
TV or cinema: most powerful, reach largest number of people; very expensive, only for large companies
Radio: slightly less effective than TV; less expensive; lack of images
Press: striking image to promote brand; can give more detailed story. Important to put in right place to reach the target consumer. “Advertorials”
Online: easy, in the form of company website, advert on another website or YouTube; lower cost
Billboards: most people do not stare for long - striking effect is important; railway stations and bus stops can contain a more detailed message - people spend longer
Forms of sponsorship
Display company logo on billboards or participants’ clothing
Exclusive rights to be served in bars and hospitality venues at event
TV program sponsorship
Advantages of websites as promotion
Give great deal of information, enhanced through use of photographs and videos
Website can tell story, give details, offer paring suggestions, incorporate online shops, provide details of upcoming events
Provide different levels of information to satisfy different types of consumer: basic details for most; link to technical specification for high-involvement consumers
Key features of websites
Attractive and easy to navigate - building can be costly
Ensure as many as possible find website - search engine optimization
Access by people below drinking age - filter, depend on visitor honesty
Benefit of social media promotion
Benefit: have a dialogue with consumers rather than talking to them
How should companies utilize social media for promotion
Non-promotional activity equally important - even if not related to wine, such as what is going on in the vineyard
Use the most appropriate social media channels to communicate with target market
Allow to leave reviews: peer review increasingly important on wine purchase decisions, esp among millennials; negative publicity and reviews need to be sealed with in a positive way
How can smart apps be used for promotion
User find, read about and comment on individual wines -free publicity
Shops can allow stock info to be shared through apps so that consumers can find who stocks the wine they want to buy
Benefits and issues of wine tourism
Benefit: particularly beneficial for new producers and those in up-and-combing regions, provides opportunity to engage with public; increase sales through tasting
Issues: infrastructure can be expensive; get in the way of day-to-day operations; staff requirement
Forms of wine tourism
Simple cellar door
Winery tour, visitor center
shops selling local produce, art and wine-related paraphernalia as well as wine
Cafe, casual dining and fine dining
Experience packages: participate in harvest or become winemaker
Hire space for events
Bring together other tourist business: wine trails, specialist tourist attractions (Napa Valley Wine Train)
Reasons for high-involvement and low-involvement consumers to become wine toursists
High-involvement: keen to widen wine knowledge
Low-involvement: winery is in the region they are visiting
Adv and disadvantages of using events and festivals as promotion
Adv: take place in urban areas, chance to taste a variety of wine without having to travel to vineyards; attract mostly high-involvement consumers but can engage with new customers because of other attractions
Issues: cost - pay to exhibit, additional staff, use up stock that could have been sold, prepare stand; competition - need something distinctive; management - consumers drink too much (vouchers);
Compare advertising and PR
Advertising seeks to draw attention to and promote a specific product or a range of products
PR gives business the most favorable image possible in the mind of consumers
List forms of PR activities
Representatives of company attending public events or appearing on TV or radio news programs to comment on issues relevant to the business Press releases Newsletters Social media Brand ambassador
Who could be brand ambassadors
Full time employees of company, chosen for excellent brand knowledge and social and presentations skills
Celebrities who the company believes share value and image of their products; feature in campaigns / videos on brand website
Key opinion leaders hired to create social media content about the company’s brands shared with their huge number of followers; can be very powerful where word of mouth and peer recommendation is highly valued
What are KOLs
Person, community or organization that creates high quality content on social media and has a large group of loyal follower, ranging from thousands to millions
