Marketing Wine Flashcards
What is marketing?
the management process which is responsible for identifying, anticipating and satisfying consumer requirements profitably
What should marketing for wine emphasize?
how the product can give the consumer the experience they are looking for. Examples:
* confirmation of social status
* ownership of something perceived as valuable or
* return on investment capital
What is the ultimate aim of marketing?
create profits, whether this is through:
* volume of sales (attracting new consumers, encouraging existing consumers to buy more) and/or
* value of sales (convincing consumers that it is worth spending more money on this product, compared to its lower-priced competitors)
What are 5 key stages in creating and implementing 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 SWOT?
- a tool can be used to provide analytical insights into the achievement of any objective
- Strengths, Weaknesses, Opportunities, Threats
How does SWOT divide relevant factors?
- Is the factor helpful or unhelpful to the achievement of the chosen objective?
- Is the factor internal to the organisation (such as resource or capability that would provide competitive advantage) or is the factor external, in the wider business environment (such as a political, economic, sociological, technological, environmental or legal factor or trend)?
What are 3 ways that SWOT can help an organization?
- Strategic fit: For a given objective, to what extent do the various factors favour the organisation’s success?
- Where there are mismatches between the factors and likelihood of success, what changes could the organisation make in order to achieve a better strategic fit? (e.g., guide investment in resources)
- Where there are threats, how can the resulting risks best be managed?
Under SWOT, what are 5 things to consider when deciding how risks can best be managed?
- the likelihood and the size of impact of the risk
and the options to
* avoid it entirely
* reduce probability or impact
* transfer the risk (e.g. by purchasing insurance) or
* accept the risk and budget for its possible impact.
What are possible origins of an objective selected prior to SWOT analysis?
- Someone’s educated (or uneducated) intuition that a particular business opportunity exists.
- An individual’s personal business dream or aspiration.
- Something generated by other business tools, such as ones that analyse for unmet gaps in markets (e.g., value-curve analysis)
What is a value-curve analysis?
- analyst selects various factors that differentiate products within a particular market (such as price, convenience, packaging, prestige, history, environmental impact, organoleptic attributes)
- consumer research is used to identify common clusters of consumer demand
- identify clusters that are under-supplied or ignored by the industry
What are the 4 steps in a SWOT analysis?
- Setting the objective
- Identifying strengths and weaknesses
- Identifying opportunities and threats
- Application: Conclusions and recommendations
What are questions to ask when identifying strengths and weaknesses in SWOT?
- What tools and resources are needed?
- What capabilities are relevant?
- Compared to other organisations that might pursue the same objective, 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?
What is a resource in the context of SWOT?
a ‘thing’ that the organisation has access to, that it can exploit as a tool
What are 7 examples of resources in the context of wine production?
- An established reputation in wealthy, growing markets
- Reliable and affordable supply chain relationships
- Vineyards in locations that favour a particular style of wine.
- Wine production facilities that are optimised for a particular style of wine.
- Access to reliable, affordable support industries (logistics, bottling and labelling, training of production staff, research and lab analysis).
- A strong financial position to enable investment.
- Internal expertise and experience, and the ability to make best use of these.
In the context of SWOT, what is a capability?
something the organisation is able to do
What are 4 examples of capabilities?
ability to:
* build strong new brands or grow existing ones (considering all the Ps of marketing);
* scale production volumes up or down in response to changing demand, or change products to follow rapid changes in demand;
* experiment to innovatively develop and launch new products;
* lobby local, regional, national or global political organisations to achieve favourable political outcomes (such as subsidies, favourable regulations, governmental promotion).
What are 6 examples of types of external factors?
PESTEL:
* political
* economic
* social (including cultural and demographic)
* technological
* environmental
* legal and regulatory
In a SWOT analysis, what 3 things should external factors be?
- real and accurately described;
- everything that is most important to consider;
- relevant to the objective under discussion.
What are examples of economic factors in a SWOT analysis?
- currency conversion rates and changes
- national or global recessions
What are examples of political factors in a SWOT analysis?
- one extreme: prohibition and taxes
- other extreme: financial subsidy and promotional support
What are examples of social factors in a SWOT analysis?
- trend where one generation avoids parents’ drinks
- cultural attitudes towards alc consumption (including different types of drinks)
- availability of skilled labor, esp in rural areas
- changing cultural attitudes in other areas (e.g., trade, synthetic chemicals, “natural”, friendship between nations, etc.)
What are examples of technological factors in a SWOT analysis?
- New production techniques, types of equipment and analyses
- Spread of technology
What are examples of environmental factors in a SWOT analysis?
- climate change impacts on regions
- pressure for alternative land use (urban growth, other ag or industry, return to nature)
- environmental change’s impact on logistics, waste management and use of energy and synthetic chemicals
What are examples of legal and regulatory factors in a SWOT analysis?
- production and trade more tightly regulated in some regions
- increasing regulation of trade favors those that can navigate it
- increasing regulation of production limits a producer’s choices (threat), but could be part of a message expressing product integrity (opportunity)
- relaxing production regulations, opens up new possibilities (opportunity), but could undermine some of the competitive advantage of producers that have optimised their production to tight regulation (threat)
What two questions does the SWOT analysis provide insight into (i.e., conclusions and recommendations)?
- How achievable is the objective (should it be pursued or not)?
- If it is to be pursued, what further investment in resources and capabilities will maximise the chance of success?
How does SWOT chart the external business environment?
it identifies factors outside the organisation that can:
* help (what opportunities can the organisation take advantage of?) or
* hinder (what threatens success, and what can the organisation do to manage the resulting risks?)
What are four stages of the product life cycle?
- Introduction
- Growth
- Maturity or stabilization
- Decline
What is the focus of the marketing strategy in the introduction stage of the product life cycle?
- getting the product into the market
- gaining recognition and reputation
- Initially, distribution may be limited to a few carefully selected channels
What is the focus of the marketing strategy in the growth stage of the product life cycle?
increasingly widely distributed and aimed at a broader target market to encourage strong growth
What is the focus of the marketing strategy in the maturity or stabilization stage of the product life cycle?
highlight the differences between the product and other competing products, which will have entered the market by now
What is the focus of the marketing strategy in the decline stage of the product life cycle?
- steps to extend the life cycle, perhaps by improving the product, updating the packaging, reducing the price to make it more competitive or seeking new markets
- communicate each of these to prospective customers via marketing
What is the aim of branding?
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
What is an example of successful branding?
a consumer may choose more expensive Cloudy Bay because they specifically want what Cloudy Bay represents and not just any example of a Marlborough Sauvignon Blanc
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
What are 7 ways that a brand can create a positive image in the consumer’s mind?
- Substance
- Consumer trust
- Consumer engagement
- Brand story
- Price premium
- Longevity
- Strong brand name
How can substance deliver a positive brand image?
Consistent quality, like an NV Champagne that has no vintage variation
How can consumer trust deliver a positive brand image?
Because of consistency, consumers come to trust a brand that delivers
How can consumer engagement deliver a positive brand image, and one danger?
- consumers will feel like the marketing strategy is aimed at them
- danger: even that the smallest change to their marketing strategy, such a minor label redesign, risks alienating loyal customers
How can brand story deliver a positive brand image?
creates an emotional attachment between the consumer and the brand
How can price premium deliver a positive brand image?
many consumers view higher prices as guarantee of quality
How can longevity deliver a positive brand image?
longevity seen as an indicator of quality
How can strong brand name deliver a positive brand image?
- easy to remember
- easy to pronounce in relevant markets
- not offensive (e.g., “Mist” from Saint-Tropez in Germany)
Who are attracted to the story of a wine?
Many consumers, especially millennials (from legal drinking age to mid-30s)
What are ways to tell the story of a wine?
- Producer’s history
- Where grapes are grown
- How wine is made
- Story behind the name, label, or bottle design
What are are examples of ways to include the producer’s history in the story of a wine?
- Have they been producing wine for generations?
- In newer wine-producing regions, did their ancestors come from older wine-producing regions and bring vines with them?
- Did the producer have an interesting previous career?
What are are examples of ways to include the grape growing in the story of a wine?
- Do they come from a single vineyard, perhaps with an unusual or evocative name?
- What is the vineyard like?
- Is it steep, rocky, prone to mist in the morning, etc.?
- What other vegetation or animal life is there in the vineyard?
What are are examples of ways to include the winemaking in the story of a wine?
- Is there a particular philosophy used (e.g. organic, biodynamic or natural)?
- Does the winemaker use any distinctive processes?
- Do they use unusual or especially old equipment?
How can it be beneficial to have different brand names in different markets?
not just a translation, but a different name that is designed to better appeal to and resonate with the target market
What are examples of successful wine brands?
- Geographical features (perhaps because wine is linked to agriculture, so place is helpful, even if it is made up)
- Company founder (like for Champagne or fortified wines)
What are 5examples of wine brands that refer to geographical features?
- Cloudy Bay
- Blossom Hill
- Banrock Station
- Felton Road
- Terrazas de los Andes
What are 2 examples wine brands that refer to company founders?
- Krug
- Taylor’s Port
What is a quirk of the Chinese trademark system and impact of it?
- first to file has the right
- legal battles with squatters/trolls (e.g., Penfolds for “Ben Fu”)
What are the components of brand equity?
- brand awareness (the extent to which consumers are familiar with the brand) and
- brand image (how consumers perceive the brand)
- other factors
What are 5 terms used for different aspects of branding in the wine industry?
- Brand position
- Private label
- Ladder brand
- Soft brand
- Luxury brand
What is brand position?
Where a brand ‘sits’ within a market and the cues used to indicate that position, often linked to price
When is a brand’s position set, and can it be adjusted?
- usually set at launch to hit a price point
- may be lowered to compete
- possible (though rare) to increase (e.g., Symington Family Estates’ efforts with Cockburn’s Port)
What can a large company do with respect to brand position?
Aim at a wine variety of brand positions, to attract as wine a range of consumers as possible (e.g., Concha y Toro and Hardys)
What is a ladder brand?
- intended to give consumers easy-to-understand ‘rungs’ to help them trade up to a higher-priced and better-quality expression of the brand
- the whole range benefits from the identity of the most prestigious expression of the brand.
What are the typical rungs on ladder brands?
- accessible – the least expensive with the greatest distribution and the one that consumers will buy most often;
- stretch – affordable, but only for special occasions;
- aspiration – 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.
- Where do ladder brands work well?
- Where do they not work well?
- very well: luxury products
- may work: soft brands bought by high-involvement consumers
- don’t work: low-involvement consumers (bc most of them aren’t aware that the aspiration wine exists)
What is an example of a ladder brand in Champagne?
- accessible – Pol Roger non-vintage;
- stretch – Pol Roger vintage;
- aspiration – Pol Roger Cuvée Winston Churchill.
What is an example of a ladder brand in a soft brand in Burgundy?
- accessible – Bourgogne Rouge;
- stretch – Gevrey-Chambertin;
- aspiration – Le Chambertin Grand Cru.
What is a soft brand?
any cue used by a consumer when choosing to buy one product in preference to another. This could be:
* country of origin
* region
* GI
* style
very important in wine, especial for GI wine
What is a luxury brand?
- no agreed definition
- tend to be super-premium priced wines that only a very few consumers can afford
What marketing can allow luxury brands charge a premium?
- perceived scarcity (even if not true, as with Champagne)
- quality of the fruit or of the vineyard in which it was harvested, no expenses spared during winemaking, a rich heritage, etc
What are two examples of how product marketing can promote the idea of luxury?
- sponsorship of exclusive and luxury events
- positioning in the most upmarket retailers and on the wine lists of fine dining restaurants
What are two parts of identifying the target market?
- segmentation
- market research
What are the 4 sets of variables that are used for market segmentation?
- geographic
- demographic
- pyschographic
- behavioral
What are the two geographic variables used for market segmentation?
- the country, region, or city where they live
- urban or rural
What are eight demographic variables used for market segmentation?
- age
- gender
- ethnicity
- family status (e.g. are they single? do they have children?)
- income
- level of education (e.g. are they university-educated?)
- occupation
- socioeconomic status; an individual’s or family’s position in society relative to others based on their income, level of education and occupation
What are 4 psychographic variables used for market segmentation?
- lifestyle (e.g. people who like to go out to eat and drink, the health-conscious)
- personality (e.g. people who like to show off their wealth or knowledge of wine)
- values and beliefs (e.g. vegetarians, people who prefer products that are organic, environmentally friendly or Fairtrade)
- interests (e.g. people interested in wines from a particular country or region).
What are 7 behavioral variables used for market segmentation?
- What benefit do they want from wine (e.g. quality, value for money, prestige)?
- When do they buy wine (e.g. regularly, only on special occasions)?
- Where do they buy wine (e.g. supermarkets, specialist wine retailers)?
- 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 (e.g. enthusiast, moderate interest, indifferent)?
- Are they early adopters (i.e. people who are keen to buy new products when they come on to the market) or late adopters?
What set of variables are better at predicting behavior?
Better:
* psychological
* behavioral
Less so:
* geographic
What are the two categories that the wine industry has come closest to in a global model of segmentation?
- high-involvement consumers have a deep interest in the wine they drink, 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 that they know and are unlikely to spend much on the wine they buy
- What is a three-part segmentation proposal?
- What is a drawback?
Proposed by Hall:
* wine lovers – those with a great interest in and knowledge of wine, high income and high level of education;
* wine-interested – those with a great interest in wine, moderate wine knowledge, university-educated with moderate income;
* wine curious – those with a moderate interest in wine but limited knowledge, moderate income and medium level of education; they see wine as an opportunity to maintain social relations.
Too simplistic to link level of interest and knowledge to income and education.
Why is it difficult to create a global segmentation?
Countries are very different, even those that are close geographically
What is a common problem with many proposed wine consumer segmentation models?
they tend to be the result of academic studies with a relatively small sample size, so they do not readily extend to the market as a whole
What does Wine Intelligence produce?
A series of models (“portraits”) of various markets, including the UK, US, and China based on detailed data
What does a successful segmentation exercise provide (one outcome and three inferences)?
It identifies the type of consumer, which lets the company estimate:
* how much the consumer is willing to pay
* where the product is likely to sell
* how best to market it
What are 6 segments identified by Wine Intelligence for the US market, and what are 4 tendencies identified for each of them?
Segments:
* Engaged Explorers
* Premium Brand Suburbans
* Contented Treaters
* Social Newbies
* Senior Bargain Hunters
* Kitchen Casuals
Tendencies:
* Who are they?
* Why do they drink wine?
* Where?
* What do they drink?
What is market research?
gathering and analysis of data about a particular market segment in order to understand what that segment wants or needs
What are two times when market research is especially useful and why?
- Prior to starting work on product: to understand demand, features, and price
- Creating marketing strategy: Confirm whether approach suggested by segmentation exercise is accurate
What are three questions to be clear before engaging in market research?
- What information is needed?
- From whom will the researchers gather data?
- How will the research be carried out?
What are 5 ways that market research can be carried out?
- survey – a series of questions designed to investigate the opinions, feelings, actions or behaviours of a large group of people;
- focus group – a small group of people drawn from the relevant consumer segment, brought together to discuss and comment on the topic being researched;
- interviews – one-to-one discussion of the topic being researched;
- observing consumer behaviour;
- secondary research – market research carried out by using data already available in the public domain or available as a report from a market research company.
Why might observing consumer behavior be employed?
- to find out the needs and wants of these consumers, or
- it may be used later in the marketing process to monitor the success of a campaign and possibly make adjustments to make it more successful
What are 4 ways that marketing may influence consumer behavior?
- focus the consumer’s attention on something that they need or want
- draw attention to products that the consumer didn’t previously know they wanted
- direct consumers to where they can buy the product, reducing the effort needed to buy that product
- highlight the selling points of the product (whether that be a luxury status, the fact that the grapes were organically grown or a competitive price) and thus can influence the evaluation of the alternatives available and the final purchase decision
What are 4 methods of observing consumer behavior?
- watching how consumers move around a shop
- interacting with consumers (e.g. retail or hospitality staff may build up a profile of the preferences of regular customers)
- store loyalty cards (records of purchases),
- web analytics (information recorded about what web pages people have visited, how long they spent on the page, etc.)
What are factors that have been subject of academic research into what influences consumer behavior?
lighting, music or decor in a shop or restaurant
What are four key areas that the objectives of the marketing strategy should cover?
- Type of marketing strategy
- Aims of the marketing strategy
- How success will be measured (e.g.m profits, value of sales, market share)
- Time period in which objectives should be achieved (e.g., short term or over period of several years)
What are three broad options for a type of marketing strategy?
-
Undifferentiated or mass – Appealing to the whole market, or a large section of it,
with a single product; for example, many branded wines available in supermarkets
and other large retailers. - Niche – Aiming a product at a specific segment of the market; many wines are niche products.
- Multiple – Either appealing to numerous segments with one brand (each segment will potentially require a different marketing approach) or launching several brands each targeting different segments.
What are 7 potential aims for a marketing strategy?
- launch a new product;
- communicate improvements to existing product;
- increase sales;
- increase market share;
- improve brand awareness;
- improve brand identity;
- attract new consumers.
In addition to setting the objectives what is another important element and how should it be set?
- the budget
- set by reference
to the profits that the marketing campaign is expected to produce
What are 5 common factors that are the elements of a marketing strategy, or “marketing mix”?
The 5 Ps:
* Product
* Price
* People
* Place
* Promotion
When it comes to wine marketing, what is the product?
The liquid itself and all packaging and branding
What should marketing deliver with respect to the product?
- communicate how the product will satisfy the consumer’s needs and wants
- presentation should appeal to target consumer
- marketing should describe the experience the product will deliver
- bc market is saturated, marketing needs to explain how their product is different from competitors (e.g., higher quality, better value, organic, vegetarian, Fairtrade, etc.)
With respect to wine marketing, what are 4 components of price?
- Price of a product on the shelf
- Other costs, like delivery
- Discounts
- Time or effort that the consumer is willing to bear to buy the product
Why might the price of a wine be set low, and why might it be difficult to raise that price?
- In introduction of a new product: Set low to undercut competition and rapidly reach a wider section of the market - the goal is to get consumers to switch permanently
- But attempts to raise the price may not be successful if consumers think the wine is no longer a good value
When might a consumer prefer a more expensive wine?
- Academic research (brain scans): Many people get more pleasure if they think the wine is more expensive as opposed to cheaper
- Consumers with lower wine knowledge who buy a wine for someone with greater knowledge will likely buy a more expensive bottle, assuming that it is more likely to meet the recipient’s expectations
What is the impact of price points, and an example?
- Consumers can react strongly to crossing certain price thresholds (which can vary from country to country)
- Example of $9.99 vs. $10
What two different things can “people” mean in the marketing mix?
- Attitudes and behaviors of the target consumer
- Relationship between the company, its staff, its partners, and its consumers; includes aspects such as employee attitudes and skills, and customer service (whether to target consumer or a business like a distributor)
What two aspects of “people” in the marketing mix should producers focus on?
- sufficiently knowledgeable and trained staff to sell their products, either to final consumers at a cellar door or consumer event, or to distributors or retailers
- any companies a producer works with (such as distributors and public relations (PR) agencies) share the producer’s image and vision, to present a consistent message at all stages of supply chain
How can a producer ensure that any companies it works with share the image and vision?
a winemaker or a sales representative of the producer may conduct a complimentary masterclass for the employees of the distributor or retailer to highlight the brand image and story as well as showcase the products
With respect to wine marketing, what is place?
Where the product is sold
With respect to wine marketing, what are two things for the producer to identify?
- Where the target consumer market buys wine
- The most effective distribution channels
With respect to wine marketing, what are 5 considerations when deciding whether to sell its wine in more than one market?
- Tastes of specific countries (and whether the style needs to change)
- Legislation, tax, or distribution restrictions
- Whether it is a price-sensitive market
- Whether to focus on a mature or emerging market
What are 5 categories of markets with respect to development?
- Mature market (stable or declining volumes)
- Established market (historical growth tailing off)
- Growth market (wine is mainstream and/or experiencing growth)
- Emerging market (growth and shows potential from a relatively low base)
- New emerging market (wine is new and unknown, but showing some potential)
- What is an advantage and disadvantage of a mature market?
- What is an advantage and disadvantage of an emerging market?
- Mature: Least growth, but reliable trade structures, route to market, and wine culture
- Emerging: Most potential growth, but most risk and often don’t have structures for easy path to market
Into what two categories can promotion be divided?
- at point of sale
- away from point of sale
What are 6 types of promotion that happen at the point of sale?
- price promotions
- competitions
- limited edition packaging/presentation
- consumer tastings
- staff incentives
- staff training
What are 11 types of promotion that happen away from the point of sale?
- Advertising - TV, cinema, radio, press, billboards
- Digital advertising
- Social media
- Websites
- Smartphone apps
- Reviews and awards
- Wine tourism
- Public relations
- Sponsorship
- Events and festivals
- Free merchandise
What are the 4 aims of price promotions?
Typical:
* Increase sales of existing products
* Gain volume sales for new products
* Attract new customers
Less common:
* Move old stock or discontinued lines
What are 4 examples of price promotion (other than volume discounts)?
- a specified amount or percentage discount on all or selected items;
- seasonal sales (e.g. in the run up to Christmas, ‘summer wine’ promotions);
- discounts on certain days (often used by the hospitality trade to encourage business on quieter weekdays);
- discounts for certain groups of people (e.g. students, members of the armed forces
What are 5 examples of volume discounts?
- buy one, get one free (also known as ‘BOGOF’);
- buy one, get one half price;
- buy three for the price of two;
- save a specified amount or percentage when spending over a certain amount or buying a certain number of bottles or more;
- (in the hospitality sector) buy, for example, two large glasses (25cL) of wine and get the rest of the bottle free.
In addition to volume discounts, what are two examples of non-traditional price promotion that carry less risk of devaluing the brand?
- “Link saves”: Buy one product, get a discount on one in another category
- Discounted or free delivery on orders over a certain size
What is the test of whether a price promotion has succeeded?
although sales will drop once the price is increased again, they will still be higher than they were before the promotional period
What are two risks of price promotions?
- No consumer loyalty, as they just switch to the next product on promotion
- Damage to brand as they see the reduced price as “correct” (e.g., Champagne industry concern over persistent UK supermarket discounts)
What price promotion technique has been banned or limited, why and where?
- Volume discounts
- Seen as encouraging excessive alc consumption
- Sweden and Scotland (e.g., minimum unit pricing)
What is a benefit and a detriment to a producer of price promotions?
- can increase sales and brand awareness
- many big retailers expect producers to meet the cost of any promotions, so may only be viable for larger producers
What is an example of a competition used as a promotion, and why is it used?
- NZ wine producer offering a chance to win a 2-week trip to NZ
- In addition to attracting buyers, is an opportunity to collect consumers’ contact info
What are two examples of limited edition packaging?
- Exclusive presentation cases for super premium wines, contributing to luxury brand image
- Tie-in to major sponsored events, like the World Cup or Olympics
How do consumers view limited edition packaging?
- Can contribute to luxury image
- Mostly seen as a little more than a bit of fun (may introduce to product, but does not increase sales in the longer term)
How can consumer tastings promote sales?
- Studies show that offering tastings can increase sales (even if there is a cost to producers/distributors to giving extra bottles that could have otherwise been sold)
- Even if consumers don’t like the wine, they may buy something else in the shop
What are 3 examples of consumer tastings?
- In-store tasting by a distribution company or producer
- Winemaker comes and tell the story of the wine
- Restaurants hosting wine tasting dinners
How can staff incentives be used as promotion for a wine, and why/where can it be illegal?
- For example, the member of staff selling the largest number of bottles of a particular brand of Champagne during the promotional period might get a free trip (funded by producer or trade body)
- Considered bribery or unfair competition and thus banned in some markets (like China)
When is staff training appropriate?
- When there is personal contact between sales staff and the consumer, as with specialist wine shops, bars, fine dining restaurants (not supermarkets)
- Given the staff more confidence and enthusiasm for the product
How would typical “at the point of sale” promotion techniques apply to an inexpensive Chard?
- Price promotion: likely (attract large market)
- Competitions: possible (deepen engagement, cheap price)
- Limited edition packaging: possible in retail (e.g., Christmas)
- Consumer tastings: unlikely (as sold mostly in supermarkets and non-dest restaurants)
- Staff incentives: possible in hospitality (not retail as little contact with staff there)
- Staff training: possible in hospitality
How would typical “at the point of sale” promotion techniques apply to a low-vol, super-premium Cab Sauv?
- Price promotion: unlikely (devalue brand)
- Competitions: unlikely (wine price too high)
- Limited edition packaging: possible in retail
- Consumer tastings: unlikely (amount too small)
- Staff incentives: unlikely (amount too small)
- Staff training: likely (wine sold personally by staff)
What are four traditional channels for advertising?
- TV or cinema (over ad or product placement)
- Radio (less effective, and less expensive)
- Press advertising (aimed at target audience)
- Billboards
- What are the advantages of traditional advertising?
- Disadvantages?
Advantages:
* Very effective, and the impression can last a long time
Disadvantages:
* Very expensive (both the placement and the cost of an outside agency)
* Might need to create multiple ads specific to countries
* Most countries have laws limiting ads on alc beverages (from total prohibition to strict controls (Loi Evin) to self-regulation in UK)
What is one advantage and one disadvantage of TV or cinema advertising?
- Most powerful, reach the most people
- Very expensive, so only companies with large marketing budgets can afford
What are two advantages of press advertising?
- Can tell more of a story than a TV ad
- Can target high-involvement wine consumers by placing ads in specialist wine or food publications (which can include “advertorials” by respected wine writers)
What are two types of billboards?
- Roadside (must be immediately striking)
- In railway or bus stations (can have a more detailed message as people will be standing around)
What is digital advertising and what is an advantage of it?
- Placing an ad on another company’s website
- It is a very easy way to advertise cheaply to a large, global audience
- What does social media introduce with respect to consumer relationships?
- What should companies do to build an effective social media presence?
- Producers can engage in a dialog with consumers
- Share news, articles, etc., of interest to the target audience (not just ads), in addition to updates of the winery
How should companies deal with the risks of social media?
- Manage social media presence frequently and carefully
- React to any negative content in as positive a way as possible
- Immediately take down inappropriate materials posted by users
Who tends to rely more on peer reviews by normal users, as opposed to established wine critics?
Millennials
What are advantages to having a website?
- tell the story of the wine,
- give details of the wines produced,
- offer food and wine pairing suggestions,
- incorporate an online shop
*provide details of upcoming events - provide different levels of info for different consumers (e.g., basic details and a link to a tech sheet)
What must be true of an effective website?
- attractive and easy to navigate
- consistent with overall marketing strategy
- use search engine optimization so it is findable
- have an age filter so only those of legal drinking age can access it
What are examples of smartphone apps?
- apps that allow users to find, read about and comment on individual wines
- shops allow their stock information to be shared through apps, which get a commission if it is purchased
- What is an advantage of reviews and awards?
- What can producers do to try to get positive reviews and awards?
- can significantly boost sales of a particular wine (esp with lower involvement and less knowledgeable consumers)
- send free samples to competitions and critics (though some, like Robert Parker, only taste what they buy)
Who is wine tourism especially beneficial for?
new producers and those in up-and-coming wine regions
Why welcome wine tourists?
- giving consumers the opportunity to taste wine can significantly increase the likelihood of sales
- people who visit producers are generally more likely to become regular customers and to recommend those wines to others
What are 8 examples of sophisticated wine tourism experiences, beyond cellar doors?
- tasting rooms
- vineyard and winery tours,
- visitor centres,
- shops (often selling local produce, art and wine-related paraphernalia as well as the producer’s wine)
- cafés, casual dining and even fine dining restaurants
- accommodation
- experience packages, such as allowing visitors to participate in the harvest or to become a winemaker for the day
- hire out space for events such as weddings and parties
What are two examples of wine trails?
- Alsace: cycle routes
- Napa Valley Wine Train (gourmet dining with Napa Valley wines and option of winery visits)
For wine tourism, what is the distinction between high-involvement and low-involvement consumers?
Low-involvement:
* Visit a winery because it is in a region they are visiting
High-involvement:
* Travel specifically to wine regions to visit wineries
* enjoy tours and talking with producers to widen knowledge
What is the aim of PR?
to give the business the most favourable image possible in the mind of consumers.
What are 5 examples of PR activities?
- representatives of the company attending public events or appearing on TV or radio news programmes to comment on issues relevant to the business;
- press releases;
- newsletters;
- social media
- adopting a strong social/corporate responsibility policy
What is a form of PR used by many larger companies?
- brand ambassadors
- can be employees chosen for knowledge and social and presentation skills)
- can also be celebrities (e.g., Roger Federer for Moët et Chandon)
What is a form of PR used in China?
- key opinion leaders (person, community, or organization)
- hired to create social media content and shared with their followers
- can be powerful if they have genuine interest and knowledge of the product
What are 3 examples of sponsorship of events?
- Chilean wine brand Cono Sur (Tour de France)
- Mouton Cadet (golf’s Ryder Cup)
- Champagne house Carbon (supplier of Champagne for Formula One podium celebrations)
Why can sponsorship be controversial?
particularly in the sporting arena where some people question the suitability of linking alcohol with activities that are intended to promote health and well-being
What are examples of what the sponsor gets for sponsorship of an event?
- can be display of a business’s logo on billboards or participants’ clothing.
- exclusive rights to be served in the bars and hospitality venues at the event
What are the costs for attending events?
- pay to exhibit
- may have to pay additional staff to run the stand
- use up stock as tasting samples they could otherwise have sold
- cost of preparing the stand (simple table to a branded pop-up bar with a seating area and props)
- have to stand out from other producers (as there will be many
What are two types of events for purposes of promotion?
- Wine-focused, often in urban areas: likely to attract high-involvement consumers (though can attract more than wine tourism)
- Not wine-focused: less likely to result in new customers (so producers will usually charge for tastes)
- When is free merchandise particularly common?
- What are examples of free merchandise?
- What does this do?
- before a holiday or another time when wine is a gift
- branded glasses, ice buckets, corkscrews, umbrellas
- increase the brand awareness not only of the person using them but also others around them, and so indirectly promote sales
How would typical “away from the point of sale” promotion techniques apply to an inexpensive Chard?
- Trad ad: likely (large audience)
- Digital ad: likely
- Social media: likely
- Websites: likely
- PR: possible
- Sponsorship: possible
- Events: possible
- Reviews and awards: possible
- Wine tourism: unlikely
How would typical “away from the point of sale” promotion techniques apply to low-vol, super-premium Cab Sauv?
- Trad ad: possible (in specialist media)
- Digital ad: unlikely (do not target consumers)
- Social media: unlikely
- Websites: likely
- PR: unlikely (low vol doesn’t justify)
- Sponsorship: unlikely (producer too small)
- Events: unlikely
- Reviews and awards: possible
- Wine tourism: possible
Once a marketing strategy is in practice, what needs to be done?
Monitoring effectiveness (to change course if necessary)
What are three ways of measuring success?
- sales figures, profits or the number of hits on a website
- marketing research: ask consumers directly for feedback, either individually or through a focus group (e.g., their view of brand image)
- eye-tracking to analyse how consumers look at websites, store layouts and adverts, and viral marketing research (estimates probability specific communications will transmit through their network–“social networking potential”)
What are four ways for companies to carry out marketing?
- in-house marketing team (possible one in each market)
- outsource some or all to a PR or advertising agency
- small company: one person or part of a person’s time (limited marketing)
- industry association (e.g., consorzio in Italy or VDP in German), generic trade body (Wines of Australia or Wines of South Africa), or informal trade grouping (VIGNO, the Vignadores de Carignan in Chile)
How can industry associations, generic trade bodies, or informal trade groupings help with marketing?
- one of the main aims is to promote their members’ products
- may have a marketing team, but, if not, the groups can benefit from the combined knowledge and experience of their members
- there will be a membership fee, but it will be far cheaper than employing their own team
- part of a larger portfolio that is more broadly marketed
