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WSET LVL 4: Business > Devising Market Strategy > Flashcards

Devising Market Strategy Flashcards

1
Q

What are the steps that must happen before devising a marketing strategy?

A
  1. Identify the brand
  2. Identify the target market
  3. Set the objectives of the strategy
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2
Q

What is a “marketing mix”?

A

The different elements of a marketing strategy (5 P’s)

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3
Q

What are the 5 P’s of marketing?

A
  • Product
  • People
  • Position
  • Place
  • Promotion
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4
Q

In wine marketing, what is the product?

A
  • The wine itself
  • The packaging
  • The brand
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5
Q

What should marketing communicate about the product?

A
  • The experience that the product will give the consumer
  • How the product is different from its competitors
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6
Q

From the consumer standpoint, what goes into the total price of wine?

A
  • The wine itself
  • The cost of delivery
  • The cost of time/effort traveling to buy wine
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7
Q

What is “penetration strategy”?

A

Introducing a new product to a market at a discount/lower cost, with the hopes of creating brand loyalty before increasing prices

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8
Q

What are the pros/cons to penetration strategy?

A

Pro:
More sales upon introduction
Quicker cashflow

Con:
Hard to consequently raise prices

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9
Q

For low knowledge consumers, why is the price of a wine relevant?

A

It is a stand-in for perceived quality. They’ll be likely to spend higher on a wine for someone with more wine knowledge.

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10
Q

What are two interpretations of “People”

A
  • The behaviors and attitudes of the target consumer
  • The relationship between the company, its staff, and its customers
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11
Q

What does the “place” refer to in marketing?

A

The place where the product is sold (where their target consumer shops)

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12
Q

Why is place important in a marketing campaign?

A
  • Connects target consumer with product more easily
  • Identifies most effective channels of distribution
  • Caters to country-specific palates
  • Identifies markets that are more difficult to enter (price sensitive/stricter legislation)
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13
Q

What is a mature market?

A

A market where wine has reached its potential and sales have plateaued or declined

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14
Q

What is an established market?

A

A market where there has been historical growth, but sales are starting to plateau

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15
Q

What is a growing market?

A

A market where wine is mainstream, but there is still room for growth in sales

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16
Q

What is an emerging market?

A

A market with a historically small consumer base, but shows high potential and is experiencing growth

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17
Q

What is a new emerging market?

A

A market with a historically small consumer base, but shows some potential

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18
Q

What are the pros/cons of selling in a mature/established market?

A

Pro:
- Established routes to market and trade structure
- Existing wine culture

Con:
- Saturated market
- Less room for growth

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19
Q

What are the pros/cons in selling in a growing/emerging market?

A

Pro:
- Most room for growth
- Less competition

Con:
- Smaller reliable consumer base
- Fewer established routes to market

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20
Q

When creating promotional materials, what are 3 considerations?

A
  1. Must reach target consumer profile (psychographic, behavioral) across different backgrounds (demographic, geographic)
  2. Must be compliant with ad laws between markets
  3. Placement of promotion (POS or elsewhere)
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21
Q

What are different forms of POS-oriented promotional campaigns?

A
  • *Price promotion
  • *Multi-buy promotion
  • Competitions
  • Limited-edition packaging
  • Consumer Tastings
  • Staff training
    -Staff incentives
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22
Q

What are different forms of promotional campaigns away from the POS?

A
  • Advertising
  • Digital Advertising
  • Awards
  • Wine tourism
  • Public Relations
  • Sponsorships
  • Events/Festivals
  • Free Merchandise
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23
Q

Why do price promotions exist?

A
  1. Attract new customers
  2. Gain volume of sales
  3. Shift old inventory (“bin ends”)
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24
Q

What are the two main kinds of price promotion?

A

Price Promotion/Reduced Price:
- Specified discount on selected items
- Time sensitive (seasonal, happy hour)
- Groups of consumers (veterans, students)

Multi-buy/volume discount
- BOGOF
- Case discount

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25
Q

How is the success of price promotion measured

A

Difference between sales before and after promotion

26
Q

What are the risks of price promotion?

A
  • Won’t build customer loyalty
  • Might damage product image for consumer (discount = “correct” price)
27
Q

What are the pros/cons of a multi-buy promotion?

A

Pro:
- Doesn’t affect product image as heavily

Con:
- Can promote heavier consumption
- Legal restrictions in some markets (banning, min. unit pricing)

28
Q

What are two other kinds of price promotion beside price reduction and multi-buy?

A

Link Save:
A promotion by the retailer that doesn’t reduce the cost of the product itself, but something purchased alongside it (eg. food pairing)

Free Delivery on purchase over certain price

29
Q

Pros/cons for producers on price promotions?

A

Pro:
Increase sales and brand awareness

Con:
Retailers generally expect producer to pay for cost of promotion, might not be viable for smaller producers

30
Q

What is a competition promotion?

A

Sweepstakes/giveaway

  • Possibly a higher value to consumer than the product itself
  • Opportunity to collect consumer data for further marketing (depending on legal restrictions)
31
Q

How are packaging promotions effective?

A
  • Limited time
  • Fun for collectors
  • Leverage for partnerships/sponsorships
  • Might introduce new consumers
  • Generally don’t increase sales over time
32
Q

Pros/cons for consumer tastings

A

Pro:
- Assures low-involvement consumers
- Likely lead to other sales even if customer doesn’t like tasting
- More engagement for retailer with consumer

Con:
- Retailer might eat the cost of a bottle (unless distributor gives them sample bottles)

33
Q

What is a staff incentive promotion?

A
  • Rewards for high sales of a specific product
  • Paid for by producer
  • Illegal in some markets
34
Q

What are staff training promotions?

A
  • Opportunity to taste, and talk with distributor/producer
  • Suitable for specialist retailers catering to high-involvement consumers
35
Q

Is a price promotion a likely option for promoting a high volume, inexpensive chardonnay?

A

Yes

-Attracts newer customers at a more competitive price
- Moves higher volumes

36
Q

Is a price promotion a likely option for promoting a low volume, super-premium cabernet?

A

No

  • Damages brand image of a luxury good
  • Production too small to warrant volume sales
37
Q

Is a competition a likely option for promoting a high volume, inexpensive chardonnay?

A

Possibly

  • Deepens engagement
  • Collects consumer information for further promotion
  • Consumer might be more attracted to the competition than the wine itself
38
Q

Is a competition a likely option for promoting a low volume, super-premium cabernet?

A

No

  • High price means consumers wouldn’t likely buy for chance at winning a competition
39
Q

Is a limited edition presentation a likely option for promoting a high volume, inexpensive chardonnay?

A

Possibly

  • Could attract consumers celebrating calendar event/sponsored event
  • Short term gains
40
Q

Is a limited edition presentation a likely option for promoting a low volume, super-premium cabernet?

A

Possibly

  • Increases investment potential
  • Emphasizes luxury brand image
41
Q

Is a consumer tasting a likely option for promoting a high volume, inexpensive chardonnay?

A

Probably not

  • Minimal engagement between staff and customers in environments where this wine is sold
42
Q

Is a consumer tasting a likely option for promoting a low volume, super-premium cabernet?

A

Probably not

  • Small volume means few samples, if any, given out
  • Gamble for retailers: wine might still be out of reach for most consumers, regardless on whether or not they like it
43
Q

Are staff incentives a likely option for promoting a high volume, inexpensive chardonnay?

A

Depends on environment.

  • Retail, no, minimal engagement between staff and customers in environments where this wine is sold
  • Hospitality, possibly, because staff are more engaged with customers
44
Q

Are staff incentives a likely option for promoting a low volume, super-premium cabernet?

A

No

  • Small production means that there is no opportunity for more sales
45
Q

Is staff training a likely option for promoting a high volume, inexpensive chardonnay?

A

Depends on environment.

  • Retail, no, minimal engagement between staff and customers in environments where this wine is sold
  • Hospitality, possibly, because staff are more engaged with customers
46
Q

Is staff training a likely option for promoting a low volume, super-premium cabernet?

A

Yes

Customers shopping for this kind of wine will be shopping in environments where they can expect to be helped by knowledgable staff

47
Q

What are the pro/cons of a traditional advertising campaign?

A

Pro:
- Wide reaching
- Can be easily translated for different markets
- Can have long-lasting impact on consumers’ image of brand

Con:
- Very expensive to develop and run (either in-house marketing team or agency)
- Legal restrictions on advertising alcohol

48
Q

What are the main channels of a traditional advertising campaign?

A
  • Television/Movies
  • Billboards
  • Radio
  • Press (Magazines/Newspaper)
49
Q

What are the pros/cons of TV/movie advertising?

A

Pros:
- Can be the most effective
- Different options (ads/product placement)

Cons:
- Very expensive, especially for prime time slots

50
Q

What are the pro/cons for radio advertising?

A

Pro:
- Less expensive than visual media
- Still has a broad reach

Con:
- Not as memorable as a visual medium

51
Q

What are the pro/cons for print advertising?

A

Pro:
- Can be both visually striking and memorable (full page image), and long/detailed (article)
- Effective at communicating brand image
- Can be attractive for high-involvement consumers
- Less expensive than TV, cinema and radio

Con:
- Must be selective as where the aid airs (large general ad, write up from a critic)

52
Q

What are the pros/cons fro billboard ads

A

Pro:
- Viewed by varied audience
- Visually striking
- Some flexibility on length of copy (Side of highway vs by bus stop)

Con:
- Must be immediately striking and memorable
- Not ideal for story-telling

53
Q

What are different channels for digital advertising?

A
  • Website
  • Social Media
  • Apps for wine buying
54
Q

What are the pros/cons for social media advertising?

A

Pro:
- Potentially very cheap promotion
- Potential to be wide-reaching
- Higher levels of engagement with consumers
- More effective for younger consumers

Con:
- Must be selective as to what channels receive promotion
- Necessary balance between promotional/non-promotional materials
- Diligent management of online profiles needed (additional cost)
- Less control over consumer engagement

55
Q

What are the pros/cons of marketing via website?

A

Pros:
- Potentially wide reaching
- Can provide consumers with a great deal of information/photos
- Multi-use (brand story, shop, tourism/promotional materials)

Cons:
- Investment to create and maintain (especially for custom-built site)
- Saturation of websites on search engines
- Can be accessed by people below drinking age

56
Q

What are the Pros/Cons of smartphone app advertising?

A

Pro:
- Potential for higher consumer engagement
- Cheaper access to high-involvement consumers
- Potential for DTC sales

Con:
- Commission on sales through app, lower profits

57
Q

What are the pros/cons for critic reviews/awards?

A

Pro:
- High influence on low-involvement consumers, especially at POS
- Potential fro promotional material

Con:
- Pay for samples to be sent

58
Q

What are the pros/cons for wine tourism?

A

Pro:
- High level of consumer engagement directly with brand
- Larger potential for consumer loyalty
- Increases awareness of “soft brand”, especially in lesser known regions
- Varied possible strategies (regional tourism associations, various winery activities)

Con:
- Additional costs of establishing, furnishing and operating tourism facilities
- Consumers of varying knowledge/involvement want different experiences

59
Q

How is PR different than advertising?

A

The goal of advertising is to promote and draw consumers towards a product.

The goal of PR is to improve and maintain the public image of a brand/business.

60
Q

What are different activities for PR?

A
  • Ensuring representatives of business have a presence in various relevant events/media outlets
  • Newsletters
  • Press releases
  • Social media
61
Q

What is a brand ambassador?

A
  • Sometime a full-time employee of company, with a high knowledge of brand and social media skills
  • Sometimes a celebrity to appear in advertising campaigns or an an influencer (eg. “key opinion leaders” in China) to give authentic, word-of-mouth reviews
62
Q
A

WSET LVL 4: Business (14 decks)

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