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 6examples 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
