Key considerations in wine marketing Flashcards
Free market
A ‘free market’ is one in which producers are relatively free to choose whether to sell directly to a consumer or retailer or through an intermediary.
Monopoly
A government-run monopoly for the retail sale of alcoholic drinks: Sweden, Norway, Canada
Three-tier system
A system used within the USA to control the direct sale of alcoholic beverages.
* Suppliers
* Distributor
* Retailer
What is the aim of a monopoly?
to control alcohol consumption
What is the process for a producer to be listed with a
monopoly?
- producer approval, tender and blind-tasting selection system
- lengthy process (seven to eight months from successful tender)
- final decision
Marketing
The management process responsible for identifying, anticipating and satisfying consumer requirements profitably.
What are the main considerations when producing a marketing strategy?
- identifying the product/brand to be marketed
- identifying the target market
- setting the objectives of the marketing strategy
- devising the marketing strategy (the ‘marketing mix’)
- implementing and monitoring the marketing strategy.
What is a brand?
The set of physical attributes of a product or service, together with the beliefs and expectations surrounding it - a unique combination which the name or logo of the product or service should evoke in the mind of the audience.
Identifying the product/brand
to be marketed
- substance
- consumer trust
- consumer engagement
- brand story
Ladder branding
Accessible: the least expensive with the greatest distribution and the one that consumers will buy most often
Stretch: affordable, but only for special occasions
Aspirational: the most prestigious expression of the brand. Most of the brand’s consumers will never buy it as it costs far more than they are willing or able to spend on wine; however, it should cast its super-premium identity over the entire ladder.
Product Lifestyle Cycle
- Introduction – The strategy should focus on getting the product into the market and gaining recognition and reputation. Initially, distribution may be limited to a few carefully selected channels to begin with.
- Growth – The product should be increasingly widely distributed and aimed at a broader target market to encourage strong growth.
- Maturity or stabilisation – The strategy should highlight the differences between the product and other competing products, which will have entered the market by now.
- Decline – Faced with the prospect of declining sales, a company may take steps to
extend the life cycle, perhaps by improving the product, updating the packaging, reducinghe price to make it more competitive or seeking new markets. Each of these will need to
be communicated to prospective customers through an appropriate marketing strategy.
SWOT: strengths
Examples:
* Established reputation in wealthy, growing markets
* Reliable and affordable supply chain
relationships
* Capability to scale up production
SWOT: Weakness
Examples:
* Lack of expertise or experience
* Lack of suitable production facilities or
equipment
* Weak financial position, lack of budget to invest
SWOT: Opportunities
- Political – availability of financial subsidies
- Economic – a weak currency may
increase competitiveness in export markets - Social – increased consumption of a style of wine by a certain demographic
- Technological – new production
techniques that increase the quality or
efficiency of production. - Environmental – climate change providing opportunities for regions on the cool margins of wine production
- Legal – tight production regulations part of the marketing of the product’s integrity
SWOT: Threats
- Political – high taxes, strict or complex
legislation - Economic – a weak currency means
equipment that needs to be imported is
more expensive - Social – reduced availability of skilled
labour in region of production - Technological – global availability of
techniques can threaten local wine styles - Environmental – climate change making viticulture unsustainable in some regions
- Legal – tight production regulations limit a producer’s options for product/packaging
Engaged Explorers
- Younger, confident wine drinkers who
enjoy discovering new wines - Wine is part of their lifestyle and social life so they spend time and money in the category
- Enjoy buying from wine shops and
wineries and are highest spenders in on- and off-premise - Have the broadest repertoire and enjoy trying new varietals, regions and types of wine
Premium Brand Suburbans
- Mid to older aged, frequent wine drinkers, lower spending but very
knowledgeable - They enjoy wine in social situations in the on-premise for casual occasions
- Get wine from the supermarket or previously known wineries, often in bulk to get value
- Very broad repertoire, however
they know what they like and prefer domestic wine-producing regions
Contented Treaters
- infrequent, but high spending drinkers, who know what they like
- They have wine infrequently but
enjoy it in social situation as a treat or to pair with their dinner - They buy wine from liquor stores or wine shops or from wineries they visit to stock up
- They know what they like and stick to the more mainstream varietals preferably from domestic regions
Social Newbies
- The youngest segment, drinking fairly frequently and rely on recommendations due to lack of knowledge
- Wine is often consumed in the on
-premise and in social situations with friends and family - Main factor when buying wine is convenience, so many wine-buying channels are used
- They are exploring the category and
enjoy trying more niche varietals and regions of origin
Senior Bargain Hunters
- Most infrequent and one of the
oldest segments with good knowledge due to a long time in the category - Low confidence in their knowledge, wine drinking centers around casual occasions at home
- Most consumers get their wine from the supermarket, being strongly value-driven
- Despite their good knowledge of
varietals and places of origin, they stick to what they know and drink from a narrow repertoire
Kitchen Casuals
- One of the oldest, very infrequently drinking segments, they have little interest in the category
- Not understanding much about wine and little interest to learn more, they mostly drink at home for informal occasions
- Very price-conscious, their primary channel is the supermarket, rarely branching out
- Drink from a very narrow repertoire and stick to what they know
Why is market research needed?
- information is needed:
- what price are consumers prepared to pay for a particular product?
How is research undertaken?
- researchers will gather data, e.g. from a small group of consumers from a particular segment
- survey
- focus group
- interviews – one-to-one discussion of the topic being researched
- observing consumer behaviour
- secondary research – market research is carried out using data available in the public domain
Objectives of a marketing
strategy
- launch a new product
- communicate improvements to an existing product
- increase sales
- increase market share
- improve brand awareness
- improve brand identity
- attract new consumers
Implementing a marketing
strategy
5Ps
* product
* price
* people
* place
* promotion
Measuring the success of a
marketing strategy
- profits
- value of sales
- market share
- number of hits on the website
- marketing research
- seeking feedback from consumers
- eye-tracking
- social networking potential
Market Catagorisation
Mature Market
established market
growth market
emerging marke
new emerging market
mature market
Wine appears to have reached its potential with stable or decling volumes
Germany, France, Uk
Established Markets
strong historical growth that is tailing off
Ireland South Africa Italy Hong Kong
Growth Markets
wine is mainstream and or experiencing growth
USA Canada Brazil
Emerging Market
experiencing growth and shows potential from a relatively low base
china, Russia, Turkey, Taiwan
New Emerging Market
wine relatively new and unknown but showing potential
India, Malaysia, Thailand
