Marketing wine Flashcards
Marketing wine
What is marketing?
- Identifying the target consumer and understanding their needs and wants is fundamental to succesful marketing
- Also the experieme the wine will bring (confirmation of social status, ownership of something valuable, return on investment capital)
- ultimate aim of marketing = create profits (through volume of sales and/or value of sales
- Succesful marketing campaign = achievment of an adeguate level of profit within a specified timetable
Marketing Wine
5 key stages of Wine Marketing
- 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.
Marketing Wine
SWOT
- SWOT = Strengths, Weaknesses, Opportunities, Threats
- Can be used to provide analytical insights into the achievement of any objective
- Identifies factors that are relevant to achieving an objective, and divides the factors in two ways:
1) Helpful / Unhelpful (to the achievment of the objective)
2) Internal (to the organisation) / External (in the wider business enviroment)
The SWOT tool helps an organisation in the following ways:
- To what extent do the various factors favour the organisation’s success in achieving the objective (strategic fit)
- what changes could the organisation make to achieve a better stategic fit?
- Where there are threats, how can the resulting risks best be managed?
- Can also help in helping to understand that a particular objective is not easily or realistically achievable and to consider pursuing a different objective
Marketing Wine: SWOT
Setting the Objective
- Objective to be evaluated is selected prior to the SWOT analysis
- Origin of the obejective can be:
1) Someone’s intuition of a particular business opportunity
2) An individual’s personal business dream or aspiration
3) Something generated by other business tools (E.g. result of analysis of gaps in the market)
Marketing Wine: SWOT
Strenghts and Weaknesses
- Identify Resources needed (‘thing’ that the organisation has access to, that it can exploit as a tool)
- Identify Capabilities available (something the organisation is able to do)
How does this organisation compare and do its internal resources and capabilities provide it with a competitive advantage? Can it achieve the objective better? Faster? More affordably?
RESOURCES examples:
- established reputation
- Reliable and affordable supply chain
- Vineyard locations that favour a particular style
- Access to reliable and affordable support industries
- Strong finan cial position
- internal expertise
CAPABILITIES examples:
- build strong new brands or grow existing ones
- scale production up or down/change product according to changing demand
- experiment to innovatively develop new product
- lobby political organisation to achieve favourable outcomes
Marketing Wine: SWOT
Opportunities and Threats
Good SWOT analysis depends on factors that are:
- real and accurately described
- everything that is most important to consider
- relevant to the objective un der discussion
Also consider what the trends are that might affect the helpfulness or hostility of the external business enviroment in present as well as the future
Research needed = PESTEL (Political, Economic, Sociological, Technological, Enviromental, Legal) = to ensure every factor is really relevant
Marketing Wine: SWOT
P.E.S.T.E.L.
Political:
- From prohibition and taxes to financial subsidy and other promotional support
Economic:
- Relatively weak local currency = can improve the price competitiveness of export (opportunity for big volume brand sector / potentially a threat to prestige in the luxury sector) and make equipment that need to be iomported more expensive
- Foreign exchange instabilities = can make it hard to plan (threat) but can provide opportunities for those who are able to respond more quickly than other cempetitors (opportunity)
- National or Global recession = reduces consumer pruchasing power (threat) but could lead consumer away from more expensive comfort products and towards wine (opportunity)
Social:
- cultural attitudes can greatly affect attitudes to alcohol consumption
Technological:
- New techniques, types of equipment and analysis can provide opportunities for increasinf quality or decreasing costs (opportunity) but when shared globally = increased difficulty to retain the uniqueness of local style (threat)
Enviromental:
- Climate change: threat for areas with an established style or already at the hot limit / opportunity for regions on the cool margin of wine production
- Pressure for alternative land use (urban growth, other agricolture or industry, return to nature) can provide opportunities or threaten some production
Legal and Regulatory:
- Increasing regulation of production limits a producer’s choices (threat) / could be an expression of product integrity (opportunity)
- Relaxing of regulations: opens up new possibilities (opportunity) or could undermine competitive advantage of producers that have optimised thei production to tight regulation (threat)
Marketing Wine: Identifying the Product/Brand to be Marketed
Product life cycle
Every product have a life cycle: sales of most new product start slowly, then grow up when it establishes itself in the market, then start to grow quikly as more and more people buy the product. Eventually it stabilise and fi nally sales begin to decline
Adifferent marketing strategy is needed in each of the stages:
1) Introduction: focus in getting the product into the market and gain recognition and reputation
2) Growth: Increased and wider distribution / aimed at a broader target market to encourage growth
3) Maturity and Stabilisation: highlight differences with competing products
4) Decline: either extend product life cycle buy improving/update, reduce the price to make it more competitive or seek new markets
Marketing Wine: Identifying the Product/Brand to be Marketed
Branding
Brand definition = ‘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’
Branding aim = seeks to move a product away from being a commodity to the extent that consumers will want to buy that product even if it costs more than the minimum possible price
How to create a positive image in the consumer’s mind:
- Substance: delivering same level of quality and style costantly
- Consumer trust: result of consistency (give regular consumers what they want)
- Consumer engagement: Consumer has a relationship with the brand / they feel the brand’s marketing is aimed directly at them
- Brand story: Story to which the consumer can relate / creates an emotional attachment between brand and consumer
- Price premium: higher price =guarantee of quality
- Longevity: many succesful brands have been in existence for a long time
- Strong brand name: must be easy to remember / easy to pronounce in all relevant languages / consider if it could be offensive/obscene in another language / may be beneficial to have different names tailored to particular markets / name linked to the name of the company’s founder (Krug, Taylor’s) / Name linked to a particular geographic feature (Felton Road, Cloudy Bay, Blossom Hill)
- Brand position: Where the brand “sits” within the market (Value , Standard, Premium, Super-premium) / Usually set at launch, having been intended to hit a particular price point / difficult but possible to change it afterwards
Marketing Wine: Identifying the Product/Brand to be Marketed
Special kinds of brand
Private label: own label of supermarkets, deep discounters and large chains / only available in the retailer or restaurant that created the brand
Ladder brand: Intend to give the consumer easy-to-undertand “rungs” to help them trade up to a higher-priced and better quality expression of the brand:
1) Accessible: least expensive with greater distribution
2) Stretch: affordable, but onkly for special occasions
3) Aspiration: the most prestigious expression of the brand / most consumers will never buy it / cast its super-premium identity over the entire ladder
Soft brand: Any cue used by a consumer when choosing a wine in preference of another (Country of origin / Region / GI / Variety / Style)
Luxury brand: super-premium priced wines that only a very few consumers can afford / perceived scarcity (even if not the case like for many Champagne)
Ladder branding examples:
1) Pol Roger NV
2) Pol Roger Vintage
3) Pol ROger Cuvee Winston Churchill
1) Bourgogne Rouge
2) Gevrey-Chambertin
3) Le Chambertin Gran Cru
Marketing Wine: Identifying the Target Market
Segmentation
- division of the market place into distinct subgroups or segments, each characterised by particular tastes and requiring a specific marketing strategy
Geographic variables: Where the consumers live (country, region, city / urban area, rural area)
Demographic variables: Age , Gender, Ethnicity, Family status (single, have kids…) , Income, Level of education, occupation, socioeconomic status
Psychographic variables: (Psycological characteristics) Lifestyle (like to eat and drink, Health-consious), personality (show off their wealth or knowledge of wine), Values and beliefs (Vegetarians, prefer organic products, enviromentally friendly, Fairtrade), Interests (interested in wine from a particular country or region)
Behavioural variables: (based on consumers’ observable behaviour)
- What benefit do they want from wine: quality, value for money, prestige…
- When do they buy wine: regularly, only on special occasion..
- Where do they buy wine: supermarkets, specialist retailers..
- What is their level of branbd loyalty
- What is their level of interest in wine: enthusiast, moderate interest, indifferent..
- Are they early adopters (keen to buy new products) or late adopters
Marketing Wine: Identifying the Target Market
Market Research
- Gathering and analysis of data about a particular market segment in order to understand what that segment wants or needs
- Can be useful at all stages of the marketing process (prior: un derstand if there is a demand, what features people would like it to have, how much they might pay for it)
- Especially important to confirm weather the approach suggested by the segmentation is accurate or not before embarking on a potentially expensive and time-consuming marketing campaign
- What information is needed? (e.g. what price are consumers prepared to pay?)
- From whom will the researchers gater date? (e.g. small group from a particular segment or a cross-section of the public)
- How will the research be carried out:
1) a survey
2) a focus group
3) interviews
4) observing consumer behaviour
5) secondary research (using data already available)
Marketing Wine: Identifying the Target Market
Observing consumer behaviour
- Observing and analysing the behaviour of target consumers
- To find out needs and wants of these consumers
- To monitor the success of the campaign (later in the marketing process) and possibly to make adjustments
Marketing Wine: Setting the Objectives of the Marketing Strategy
Objectives of the marketing strategy
1) What type of marketing strategy does the company want to pursue?
- Undifferentiated or mass: appeal to the whole market or a large section of it
- Niche: aimed at a specific segment
- Multiple: appealing at numerous segments or launching several brands targeting different segments
2) What are the aims of the startegy?
(e.g. launch a new product / communicate improvements / increase market share / improve brand awareness / improve brand identity / attract new consumers)
3)How will the success of the strategy be measured (e.g. profits, value of sales, market share)?
4) Within what time period should the objectives be achieved?
- short-term startegy
- period of several years
Setting up marketing budget (another important element)
Marketing Wine: Devising the Marketing Strategy
The “Marketing Mix”
- A combination of factors that must work together for the strategy to work (5Ps). If any one element is weak, this will weaken the entire marketing effort.
The Product: This is the object, service or system that is being marketed (liquid itself and all packaging and branding)
- communicate the characteristics of the product that will appeal to target consumers and how it will satisfy their needs and wants.
Price: The amount that a consumer pays for a product (includes any additional costs, such as delivery, discounts, the cost (in time or effort) that the consumer is willing to go to in order to buy the product.
People: Interpreted in different ways, depending on the model:
- the attitudes and behaviours of the target consumer
- the relationship between the company, its staff, its partners and its customers (employee attitudes and skills, and customer service)
Place: Where the product is sold: identify where its target market shops, such as supermarkets, deep discounters, specialist wine shops or online, and focus on those outlets.
