Wine Marketing Flashcards
What is the aim of the monopoly system?
To limit alcohol consumption
The only retail outlet allowed to sell alcohol in Sweden?
Systembolaget
Describe to enter the retail sector in Sweden.
- Register with an importer who is an approved supplier of Systembolaget
- Systembolaget tender requests (4times a year)
- Approved suppliers to submit samples
- Selected by blind tasting panel
- Wines will be tasted again and chemically analysed prior to launch
How long Systembolaget’s tender system take?
7 - 8 months
As Systembolaget selects products on quality alone, what benefit smaller producers can have?
- Smaller producers has the same access to the market as larger ones.
- Once it’s selected, wines have exposure throughout Sweden
- Potential to sell larger volumes
When USA was under prohibition, by what law?
1919 - 1933
Volstead Act
Why the three-tier system was introduced?
- To prevent direct sales from the producer/supplier to the retailer
- To avoid producer monopolies and increased prices
What are the three-tier system’s benefits to each state?
- Creating additional jobs
- Easier regulation
- Easier collection of taxes
- More tax revenue by additional tier of businesses
The three tiers are:
Supplier
Distributor
Retailer
True or False
Producers can by-pass a wholesaler and sell direct to a retailer.
False
Three tier system generally limit or completely prohibit cross ownership between most _________ and the _____________
retailers and the upper two tiers
three tiers: supplier / distributor / retailer
three tier system
the each state of the USA can have drastically different laws, which are very complicated.
Therfore there is a need for ____ within alcoholic beverage companies
‘compliance officers’
three tier system
States in which the state itself holds monopoly over one or more of the three tiers are called?
‘Control’ states
three tier systerm
Open state
suppliers and distributors
Minimal state involvement.
Suppliers and distributors are free to enter into and exit out of agreements to sell and distribute brands freely.
three tier system
What is franchise law?
Why does it exist?
- Franchise law severely restrict the freedom of suppliers to change distributor arrangements
- ‘lifetime appointment’
- to protect distributors against sudden and massive changes to their business
definition
What is marketing?
‘the management process which is responsible for identifying, anticipating and satisfying consumer requirements profitably’
the Chartere Institute of Marketing (CIM)
Marketing Process
- Identifying the product/brand to be marketed
- Identifying the target market
- setting the objectives of the marketing strategy
- devising the marketing strategy
- implementing and monitoring the marketing strategy
What is 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.’
Brand
How to create a positive image in the consumer’s mind?
Substance, Consumer trust, Consumer engagement, Brand story, Price premium, Longevity, Strong brand name
Brand
- Substance
- Consumer trust
- Consumer engagement
- consistent quality and style
- ‘trust’ a brand always to give them what they want
- a relationship with the brand and will ask for it by name
Brand story
How brand story works?
This creates an emotional attachment, a sense of authenticity.
The story also covers price, where the wine is sold, how it is sold, what other people say about the product
a story behind history, terroir, philosophy, name
Promotion
Aims of Price Promotion
- to increase sales of existing products
- gain volume sales for new products
- attract new customers
- shift old stock or discountined lines(‘bin ends’)
Promotion at the Point of Sale
Types of price promotion
- a specified amount or percentage discount
- seasonal sales
- discounts on certain days
- discounts on certain groups of people
- ‘multi-buy’ or volume discount
- ‘link saves’
- discount on delivery costs
Price promotion at the point of sale
Risks of Price Promotion
- the promotion will not build consumer loyalty
- may damage the image of the product in the mind of the consumer
- (multi-buys & volume discounts) less-likely affect the image of the product, but to encourage excessive alcohol consumption
Marketing options
What are the ways in which companies can carry out marketing?
- an in-house marketing team
- outsourcing: PR company, advertising agency
- do the work themselves
- members of an industry association, a generic trade body, informal trade grouping
What are the cost implications in marketing for producers?
Cost implications, and how these affect the route a producer may choose.
e.g.) house marketing team vs external agency, design & production of the bottle, labels, marketing campaign
Promotion
What are the promotion methods at the point of sale?
- Price promotions
- competitions
- limited edition packaging/presentation
- consumer tastings
- staff incentives
- staff training
Promotion
What are the promotion methods 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
Promotion away from POS
Advantages of websites?
- wide reach of communication
- a great deal of information enhanced with photographs and videos: story, details of wines, food and wine pairing suggestions, upcoming events
- different levels of information
- online shop
Promotion away from POS
Disadvantages of websites?
- can be high maintenance and costly
- competition, search engine optimisation
- can be accessed by people below legal age
Promotion away from POS
Advantage of wine tourism?
- opportunity to engage with the public expecially for new producers, up-and-coming wine regions
- increased sales through cellar door, tour, shops, restaurants, cafes, accomodations
- synergy from collective wine tourism strategy e.g.wine trails
Promotion away from POS
Disadvantages of wine tourism?
- developing infrastructure can be very expensive
- take time away from day-to-day operations in the vineyard and winery
- small wineries; simply not have the staff - only run occasional events, not encouraging visitors
The benefit of cellar door sales for producers?
- earning larger profits
- can engage directly with cunsumers
- build up brand awareness and loyalty
- ‘word-of-mouth marketing’ opportunity
- direct feedback on new products from potential consumers
The disadvantages of selling from the cellar door?
- initial investment
- not suitable location
- may take up too much time or require additional staff
- if poorly managed, it will affect brand image negatively
- can’t move large volume of products
- not suitable for small production
Marketing Strategy
High-volume, inexpensive branded chardonnay would utilise press advertising?
Likely option.
Adverts in the non-specialised press and in the media in general may be used as these will be seen by a large number of consumers with the aim of increasing brand awareness
How successful brands achieve a positive image with consumers?
- Substance: consistency
- Consumer trust: trust from consistency
- Consumer engagement: relationship, closeness
- Brand Story: emotional attachment, a sense of authenticity
- Price premium: higher price - guarantee of quality
- Longevity: existence for a long time
- Strong brand name: easy to remember/pronounce, cultural consideration, geographic features, heritage, logo, trademark registration, brand equity
Factors that influence the demand for wine
What are the social factors?
Changes in consumption habits
younger people drinking less wine
health concerns
changes in lifestyle
reduced availability of cheap wine
Changing consumer preferences
Changes in reputation
Changes in spending patterns
Brand position?
Where a brand ‘sits’ within a market and the cues used to indicate that position.
* value
* standard
* premium
* super-premium
Why private label wines are important to supermarkets?
They can promote customer loyalty.
What are the three rungs of 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.
What is ‘soft brand’?
Any cue used by a consumer when choosing to buy one product in preference to another.
e.g. a country of origion(Brand Australia); region(Rioja); geographical indicator(Pouilly-Fumé; grape variety(Merlot); a style of wine(oaky Chardonnay) etc
