Ejercicios Tasas de Interes

International Journal of Wine Marketing
Marketing Planning for Wine

Tony Spawton
Article information:
To cite this document:
Tony Spawton, (1990),"Marketing Planning for Wine", International Journal of Wine Marketing, Vol. 2
Iss 2 pp. 2 - 49
Permanent link to this document:
http://dx.doi.org/10.1108/eb008580
Downloaded on: 31 January 2016, At: 05:57 (PT)
References: this document contains references to 0 other documents.
Downloaded by MAHIDOL UNIVERSITY At 05:57 31 January 2016 (PT)
To copy this document: permissions@emeraldinsight.com

The fulltext of this document has been downloaded 1863 times since 2006*
Users who downloaded this article also downloaded:
Elizabeth C. Thach, Janeen E. Olsen, (2004),"The Search for New Wine Consumers: Marketing Focus
on Consumer LifeStyle or LifeCycle", International Journal of Wine Marketing, Vol. 16 Iss 3 pp. 44-57
http://dx.doi.org/10.1108/eb008778
Eli Cohen, (2009),"Applying best-worst scaling to wine marketing", International Journal of Wine
Business Research, Vol. 21 Iss 1 pp. 8-23 http://dx.doi.org/10.1108/17511060910948008
Johan Bruwer, Anthony Saliba, Bernadette Miller, (2011),"Consumer behaviour and sensory preference
differences: implications for wine product marketing", Journal of Consumer Marketing, Vol. 28 Iss 1 pp.
5-18 http://dx.doi.org/10.1108/07363761111101903
Access to this document was granted through an Emerald subscription provided by emerald-
srm:540409 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald
for Authors service information about how to choose which publication to write for and submission
guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company
manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well
as providing an extensive range of online products and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the
Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for
digital archive preservation.
*Related content and download information correct at time of

download.
Tony Spawton
for Wine
Marketing Planning
Abstract Marketing Planning for Wine
and Tony Spawton
Keywords Marketing Mix, Marketing Strategy,
Wine Industry
The broad area of the wine industry and
2 the marketing of wine, particularly, are
focused on with regard to the changing
environment in which wine is made and
consumed. The marketing process is
described in the context of its
application in the wine industry and the
environment in which it operates:
changing consumption patterns in the

industrialised nations, new distribution
patterns, and different social and
environmental issues. The seg-
mentation of the wine market into two
distinct areas,finewines and beverage
wines, each operating independently of
the other, is described and the
marketing mix factors which the wine
marketer can deploy in order to
maximise opportunities in these
markets are detailed, utilising research
into wine consumers' behaviour. The
factors detailed are the product, its
tangible and intangible benefits; the
price — market skimming, market
penetration, neutral pricing; the
communication mix — word of mouth,
journalism, sales promotion,
advertising; branding and positioning;
ranging, and the distribution channels.
It is shown that marketing planning is
essential for the winemaker, whether
a one-person boutique winery or a large
multinational. The steps to take in
preparing a marketing plan are
described and guidance is given so that
the winemaker can make it happen,
both to satisfy consumers' needs and
to make a profit.
Planification commerciale du secteur du vin French
Cet article se penche sur le vaste domaine de l'industrie du vin et de la Abstract
commercialisation du vin, et se concentre plus particulièrement sur
1'environnement changeant au sein duquel le vin est confectionné et consommé.
Le processus de commercialisation est décrit dans le contexte de son application
à l'industrie du vin et à 1'environnement dans lequel il est utilisé: schémas de
consommation changeants dans les nations industrialisées, nouveaux plans de 3
distribution et nouvelles questions environnementales et sociales. La
segmentation du marché du vin en deux zones distinctes, les vins fins et les
vins de consommation courante, chacune opérant indépendamment l'une de
l'autre, est décrite dans cet article ainsi que les facteurs de stratégie commerciale
que les fabricants de vin peuvent mettre en oeuvre de manière à maximiser
leurs opportunités dans ces marchés tout en mettant à contribution la recherche
dans le comportement des consommateurs de vin. Les facteurs évoqués sont

le produit, ses avantages tangibles et intangibles, les prix appliqués — survol
des marches, penetration des marchés, prix neutres, mélange des types de
communications — bouche à bouche, journalisme, promotion des ventes,
publicité, recours à des marques et prise de positions, détermination de
l'étendue du champ d'action et réseaux de distribution. Il a été démontré que
la planification du marketing est essentielle pour le fabricant de vin, qu'on ait
à faire à un éstablissement vinicole à une personne ou à une multinationale
de taille importante. L'article décrit les mesures à prendre pour l'élaboration
d'un plan de marketing et il est offert des instructions de guidage de manière
à ce que le fabricant de vin puisse appliquer ce plan tant pour satisfaire aux
besoins de ses clients que pour réaliser des bénéfices.
German Marketingplanung für Wein
Abstract Im Hinblick auf das sich ändernde Umfeld, in dem Wein gemacht und verbraucht
wird, konzentriert sich der Artikel auf das breite Gebiet der Weinindustrie und
besonders der Vermarktung von Wein. Der Marketingprozeβ wird im
Zusammenhang mit seiner Anwendung in der Weinindustrie und dem Umfeld
beschrieben, in dem er stattfindet: sich ändernde Verbrauchsmuster in den
4 Industrieländern, neue Vertriebsmuster und andere soziale Fragen und
Umweltprobleme. Es wird die Segmentierung des Weinmarktes in zwei genau
abgegrenzte und unabhängig voneinander operierende Bereiche, feine Weine
und Getränkeweine, beschrieben. Auβerdem werden die Marketing-Mix-
Faktoren aufgeführt, die der Marktteilnehmer anwenden kann, um die
Möglichkeiten, die sich ihm auf den Weinmärkten bieten, unter Ausnützung
der Ergebnisse von Untersuchungen des Verhaltens der Weinverbraucher zu
maximieren. Die angegebenen Faktoren sind das Produkt, seine greifbaren und
nicht greifbaren Vorteile; der Preis — Marktabschopfung, die Markt-
durchdringung, neutrale Preispolitik; das Kommunikationsmix — mündlich,
Journalismus, Verkaufsförderung, Werbung, Warenzeichenpolitik und
Positionierung; die Sortimentierung und die Vertriebswege. Es wird gezeigt,
daβ die Marketingplanung für den Weinproduzenten von ausschlaggebender
Bedeutung ist, wobei es keine Rolle spielt, ob es sich um eine Ein-Mann-
Weinkellerie oder ein groβes multinationals Unternehmen handelt. Es werden
die Maβnahmen beschrieben, die bei Ausarbeitung eines Marketingplanes
ergriffen werden müssen, und Anleitungen erteilt, die es dem Weinproduzenten
ermöglichen, die Verbraucherbedürfnisse zu befriedigen und gleichzeitig einen
Gewinn zu machen.
Preface Preface
The Marketing Planning for Wine handbook is designed to supplement the

traditional marketing texts by focusing on marketing as it relates to the
international wine market. It is presented as the seed to encourage research,
scholarship and case studies in wine marketing. 5
The literature and fundamental research into the business of wine marketing
is lacking, especially for an industry that makes such a significant contribution
to the welfare and prosperity of many regions and countries globally. As such
we are pleased to have the opportunity to lay down some of the inroads.
Finally, I would like to thank Abby Day, Consultant Publisher for MCB
University Press, for her editorial guidance and help on thefinaldraft, and also
Professor D. Corkindale and Byron Sharp for their advice.
Anthony Spawton
Adelaide 1990
Of Wine and
Live Asses
1. Of Wine and Live Asses:
An Introduction to the
Wine Economy and State of
6 Wine Marketing
The wine economy is more than 4,000 years old. At that time, Armenian traders
used to navigate the Euphrates to trade in wine with the Babylonians. Modern
methods of distribution have obviously become more sophisticated but the
importance of wine as a traded commodity has not changed.
While it is certainly true that special knowledge is required to make wine,

special knowledge is also required to trade in wine. The development of
knowledge to make better wine has occupied the minds of academics and
scholars for centuries, but the knowledge of how to trade in wine is embryonic.
This was demonstrated at a 1990 Symposium on Wine and Vine Economy
in Kecskemet, Hungary, where the issues of the wine and vine economy were
discussed in open forum for perhaps the first time. Similarly, two Wine 2000
Conferences were held in Australia and England to provide an interchange of
knowledge and direction for the wine industry into the next millenium. It is
now being appreciated by the industry that the environment in which wine is
made and consumed is changing and the industry will need to change if it is
to survive as a viable industry into the future.
But let us not forget the Armenians. With their cargo of wine, they brought
a live ass. The Armenians had planned their mission meticulously: the live ass
was their ticket back to Armenia after the wine was sold: boats could not sail
upstream!
Wine marketing can be considered the equivalent of the live ass to the wine
industry. It is, indeed, the ticket to future prosperity.
The Wine Economy

As Tables I, II and III illustrate, the world currently produces more wine than
it can consume. The wine economy, nevertheless, is the livelihood of
grapegrowers and winemakers as well as those industries associated with its
production and marketing. The per capita consumption of wine is falling,
especially in the major producing nations, therefore creating a surplus. How
is the industry responding to this?
The wine industry is production-based. As a result it is poorly placed to
facilitate change and to adjust to an increasingly competitive marketplace.
Solutions to change in the wine economy are diverse and not the basis of this
text, but there is a realisation in the industry that its future is geared to meeting
the expectations of the wine consumer. That has contributed to the growing
importance of wine marketing as a discipline within the industry.
Of Wine and
Country Production Consumption Surplus
Live Asses
W. Germany 971 1,588 -617
France 5,753 4,150 + 1,603
Greece 450 299 + 151
Italy 6,186 4,139 + 2,047
UK 1 642 -641
Spain 2,157 1,850 + 307
Portugal 383 536 -153 7
EEC(12)* 15,917* 13,778* + 2,139*
Austria 288 257 + 31
Norway — 27 -27
Sweden — 103 -103
Switzerland 111 318 -207
Yugoslavia 576 588 -12

Rest of Europe* 1,002* 1,320* -318*
E. Germany 140 -140
Bulgaria 340 136 + 204
Hungary 470 235 + 235
Romania 1,000 683 + 317
Czechoslovakia 161 172 -11
USSR 1,986 1,275 + 711
COMECON* 3,957* 2,959* + 998*
Argentina 2,063 1,786 + 277
Brazil 376 203 + 173
Canada 56 235 -179
Chile 423 333 + 90
USA 1,824 2,090 -266
Mexico 15 15 —
Uruguay 74 88 -14
Americas 4,908* 4,842* + 66*
S. Africa 846 336 + 510
Algeria 100 18 + 82
Morocco 38 29 +9
Tunisia 20 26 -6
Total Africa* 1,020* 626* + 394*
Cyprus 63 7 + 56
Israel 14 16 -2
Turkey 39 61 -22
Japan 53 126 -73
Total Asia* 189* 217* -28*
Australia 403 340 + 63
New Zealand 48 42 +6
Total Oceania 451 382 + 69
Total World* 27,444* 24,124* + 3,320*
Table I.
* Totals include minor producers/consumers The World Surplus
Source: [1] Situation 1988 (millions
of litres)
Of Wine and Exports Imports
Live Asses Country 1988 1987 Country 1988 1987
France 1,300 1,327 W. Germany 934 928

Italy 1,280 1,082 UK 689 660
Spain 432 442 France 547 416
W. Germany 279 262 Belgium/Lux 236 246
8 Hungary 213 207 The Netherlands 210 211
Bulgaria 179 171 Switzerland 195 187
Portugal 165 159 E. Germany 195 196
Yugoslavia 104 110 USSR 175 157
Australia 39 22 USA 173 312
Chile 14 14 Canada 140 133
Sweden/Norway 134 124

Denmark 128 133
Japan 76 52
Australia 12 11
World Total* 4,464* 4,262* World Total* 4,380* 4,335*
Table II. Note variations owing to approximations

World Wine Exports * Totals include minor exporters and importers
and Imports, 1987 and Source: | 1 |
1988 (millions of litres)
Country 1988 1987
Italy 6,186 7,587

France 5,753 6,944
Spain 2,156 4,022
Argentina 2,063 2,063
USSR 1,986 1,650
USA 1,824 1,676
Romania 1,000 806
West Germany 971 970
South Africa 846 802
Yugoslavia 576 608
Hungary 471 471
Greece 450 412
Chile 423 423
Australia 403 396
Portugal 383 1,112
World Total* 27,444* 31,614*
Table III. Note variations owing to approximations

World Wine * Total includes all producing countries
Production, 1987 and Source: [1]
1988 (millions of litres)
Historically, the wine industry has shown, often by default, considerable market Of Wine and
acumen. The names of Sichel and Mondavi are legendary. The development, Live Asses
too, of the appellation contrôlée systems has provided a basis for quality. The
innovations of Dom Perignon with champagne provided a basis for product
development. Wine marketing also is credited for the marketing-led recoveries
of both the Austrian and Italian wine industries after the damaging "wine
scandals" of the 1980s.
Nevertheless, little has been done to chronicle these achievements, to analyse 9
the market successes and failures and to develop an experience curve that will
guarantee the future viability of the industry.
What is Wine Marketing?

Marketing is a matching process. It is the profitable matching of an organisation's
resources with a customer's needs and wants. This is illustrated in Figure 1.

Wine marketing is the adaptation of this process as it directly relates to the
wine industry. It includes:
• an understanding of the marketplace;
• the development of marketing strategies both for corporate growth and
competitive advantage;
• marketing planning;
• communication;
• co-ordination;
• the management of the branded assets of the wine company.
A broad analysis of the development of marketing in the wine industry positions
the industry as being more sales- than marketing-oriented. The differences
between sales and marketing are detailed in Figure 2.
The Marketing Process

The marketing process and the stages involved are illustrated in Figure 3. This
shows that before marketing decisions are made there is a requirement to gather
and analyse marketing information. The historical production-focus of the industry
means that data collection and dissemination focus on production and sales,
rather than on market information.
Of Wine and The What To w h o m is W h a t is your H o w do you
Live Asses organisation's business are the service primary goal? seek to
focus is you in? directed? achieve your
goal?
Selling Inwards on the Delivering Everybody Maximum Primarily

orientation organisation's products and numbers through
needs services through the intensive
10 door promotion
Marketing Outwards on Satisfying Specific Customer. Through co-

orientation the w a n t s and consumer groups of satisfaction ordinated
preferences of w a n t s people marketing
Figure 2. client groups activities
The Selling and

Marketing Orientations Reprinted w ith permission from | 2 |
Contrasted
Consumers:
What do they drink?
Who drinks?
How much?
How often?
How are they influenced?
What are their expectations of wine?
What are the perceived risks of purchase and how do customers
endeavour to reduce risk?
What is their sensitivity to price?
What are their attitudes to packaging, labelling, etc.?
Who are the competitors?
What is their/your market share?
What are the stock levels in store?
Stock turn by product?
Attitudes to and the effectiveness of advertising and promotion?
Promotion expenditures by medium?
Product sales by wine type?
Retail price levels?
Wholesale price level?
Wine stock levels in the industry?
Demand and supply of grape material?
Volume movements through the channels of distribution?
Table IV.
Of Wine and
Live Asses
11
The key ingredients of marketing information needed for decision making in

the wine industry are listed in Table IV. Many of these data would require market
research, especially information on consumer behaviour. Distribution information
may be available from retail audits.
The Wine-
Marketing
2. The Wine-Marketing
Environment Environment
Marketing decisions are not made in a vacuum but are often forced by changes
12 in the commercial environment in which every organisation operates. The factors
affecting the commercial environment for marketing decision making are:
(1) Demographic/Social
The alcohol consumption patterns of the populations of the westernised
industrial nations are changing with the general ageing of the population.
Consumers will undoubtedly still drink beer, wine and spirits but in much
lower quantities than hitherto. In addition the growth of low alcohol
products is expected to continue.
Retailers report that wine buyers are becoming more knowledgeable
and discerning in their choice of product. This is expected to grow into
the 1990s. The beverage wine consumers of the 1970s are now the fine
wine buyers of the 1990s.
Products will have ageing profiles — for example, the age profile of
sherry in the UK is polarising towards the 50-plus age group, which in
1989 represented 70 per cent of regular drinkers.
Industry forecasts of the UK market suggest that by the year 2000
the volume of the wine consumed could increase 80-120 per cent. In
the traditional wine-consuming countries such as France and Italy per
capita consumption is likely to continue to decline.
(2) Distribution Changes
The onset of a single market in Europe in 1992 will result in a growth
in amalgamations, joint purchase arrangements, take-overs, and joint
ventures amongst distributors and retailers. This concentration of
distribution is occurring globally with the exception of countries where
the distribution of alcohol is government-controlled.
This will benefit the wine marketer in that it will widen distribution
opportunities. The single market in Europe, however, will limit
opportunities for the development of specific marketing strategies for
individual countries owing to the free movement of goods across national
boundaries. This will enhance the power of the distribution channels and
set the wine marketer more apart from the consumer.
Appreciating these changes, proactive wine and spirits companies have
moved into acquisition and joint ventures with distributors and retailers
in order to retain control as far as possible.
The concentration of distribution is likely to preclude small winemaker
operations owing to the high channel costs involved. Small winemakers
will therefore need to seek alternative distribution, via direct mail for
example. Wine selling via direct mail is burgeoning in Australia and is The Wine-
expected to grow in other markets. Marketing
(3) Social Issues Environment
The issue of alcohol consumption is gaining momentum. The wine
industry is responding by promoting responsible consumption and the
fact that moderate consumption is often said to be beneficial to health.
The prohibitionists, however, will continue to promote the curtailment
or abolition of alcohol advertising supported by taxation to recover the 13
social cost of alcoholism.
Responsibility for the counter-argument is the domain of wine industry
associations; nevertheless, individual wine marketers should build this
contingency into their marketing planning.
The key factor is to consolidate market position. Experience from the
cigarette industry demonstrates that when advertising has been banned

the established brands have held market position and the weak brands
are the main losers. Similarly, the ability of marketers to introduce new
brands is severely curtailed.
An issue not to be overlooked is that of the use of preservatives in
wine and fungicides in the vineyard. As the marketer needs to be more
diligent, winemakers and viticulturalists must be equally diligent in
ensuring that the wines they make do not use materials which are not
permitted by health authorities. This is of particular relevance for products
prepared for export.
(4) Environmental
Concern for the environment is also a growing social issue. The wine
industry, although perceived as a passive environmentally-friendly
industry, needs to pay cognisance to the trends for the recycling of drinks
packaging. Currently, this is a growing issue in the EC with a drive towards
homogeneous regulation, but the momentum is expected to continue
elsewhere.
The Economic and Competitive Environment
The globalisation of the wine industry, coupled with growing surpluses in the
EC in particular, is adding to the competitiveness of the international wine trade.
The competitive issues currently involve:
• internationally comparative pricing of grapes;
• cost of vineyard, comparative technological development;
• commercial abilities of individual wine companies.
Historically, the success factors for wine companies were based on production
technology and quality products. In the future, success will be based on a
combination of commercial acumen and quality capabilities coupled with an
international outlook.
Wine marketing is now a global activity. A review of wine industry journals
details a regular listing of acquisitions and mergers of winery assets both within
The Wine-
Marketing Commercial Environment
Environment Legal — Social — Technological EXTERNAL TO THE COMPANY
Availability Representation
Advertising + Promotion Service

+ PR terms of trade
14
Competitive
— Marketing strategy
Market research — Marketing planning Legal/ethical
— Co-ordination
Raw materials — Communication Finance and
requirements — Monitor/control administration
Operational Warehousing and distribution Commercial

practices
INTERNAL WITHIN THE FIRM
Figure 4.
The Marketing Political — Demographic — Institutional — Economic
Function of a Company
wine-producing countries and across international boundaries. This trend is

expected to continue. In addition, the technology transfer to emerging wine
producers such as Chile will accelerate, and a drive can be expected to modernise
the wine industries of Eastern Europe. Figure 4 summarises the marketing
function of a wine company as it operates within the business environment.
The Two Wine Markets

It has become evident that the global market for wine is being segmented into
two distinct markets, each of which is operating independently of the other.
The industry expression is that wine drinkers are "drinking less but are drinking
better quality wines''. We need to explore why this phenomenon is taking place.
The author suggests the following hypotheses:
• Wine established itself as the beverage of the post-war ''baby-boomers'',
especially women who adopted wine in preference to beer and spirits.
• The adoption of wine as a drink prevalent in the household made wine
consumption similarly acceptable to male drinkers.
• Early consumption was encouraged by the availability of inexpensive ''jug''
wines which were produced as consistent quality and taste palatable
blends. These jug wines were supported by the growing availability of
branded products, which were heavily promoted, such as Le Piat d'Or,
Sichel's Blue Nun and Black Tower which could be consumed on more
prestigious occasions.
• Improved wine-making technology and growing household prosperity have The Wine-
led consumers to experiment with difference. This is leading to a growing Marketing
appreciation of fine wines at the expense of beverage wines. Environment
• It is expected that the consumption of unique and differentiated wines
will continue to grow at the expense of beverage wines.
The suggested application of the factors of the marketing mix is included in
Table V, which sets out to provide the wine marketer with the deployment of 15
the marketing mix factors in order to maximise opportunities in these markets.
One of the difficulties that wine marketers will face is when wine companies,
usually associated with the volume-related beverage market, attempt to position
products in thefinewine segments of the market. Companies operating in the
international environment will need to superimpose the business and cultural
environment of the importing country on that of their domestic market.
The Wine Consumer

Research of behaviour patterns of wine consumers is a growing phenomenon
amongst wine marketers. Historically, winemakers have backed their own
Marketing Mix Factors Fine Wines Beverage Wines

Product Appellation, first Varietal or blend, taste
growth varieties limited important, consistency,
quantity, vintage and high quality control,
regional variables little vintage, regional
important variation
Price High price, price Price competitive, price
skimming/prestige sensitive, price
pricing, no price promotion common
promotion
Positioning Speciality branded Branded products
products
Distribution Specialist outlets Supermarket and liquor
stores
Promotion By recommendation Via the mass media,
and reputation, point-of-sale displays,
supported by wide etc.
publicity
Selling Scarcity, quota, Continuous availability,
allocation, case lot truck load quantities
quantities Table V.
The Marketing
Inventory Ageing and maturing Stock turn paramount Differences between
essential the Fine and Beverage
Wine Industries
The Wine- experiences and those of their peers. The growing competitiveness of the market
Marketing now requires a much more in-depth analysis of behaviour as a means of need
satisfaction.
Environment The wine market is growing in sophistication and the opportunities for market
segmentation are increasing. The growth of beverage wines in the 1970s has deve-
loped a more discerning consumer in the 1990s. Industry studies of consumer
behaviour are few, as wine companies see consumer behaviour analyses as a means
16 of developing a competitive advantage. Research results are therefore often
unavailable for publication.
Consumer Expectations and Risk-Reduction Strategies

With the exception of a small connoisseurs segment of the market, the majority
of wine purchasers are highly risk-sensitive and their wine purchase behaviour
is governed by expectation and risk-reduction strategies during the purchase

process. The main factors of expectation are:
• self-esteem where wine knowledge and appreciation create a favourable
impression, e.g. "a good host";
• occasion enhancement and celebration, e.g. champagne corks are expected
to "pop". Champagne is expected to be served as a celebratory drink;
• complementary to meals to enhance taste and enjoyment.
The main facets of risk are:
• psychological, being potentially damaging to the buyer's own self-esteem
by making the wrong wine choice;
• functional, i.e. the inability to determine that the wine is faulty, or it is
the wrong choice of wine for the occasion or to accompany a particular
dish or meal;
• economic, i.e. is the perceived value of the product relative to the price
being paid?
Risk-reduction strategies are where the consumer uses other stimuli in order to
reduce purchase dissonance. These include:
(1) Known brands, where a brand-name is synonymous with quality consistency
and an enhancement of self-esteem. It is suggested that inexperienced wine
buyers purchase wine within a range of "safe brands" of which they have
experience.
(2) Recommendation: "People drink other people's wines." This is where a
consumer becomes aware of a wine based on the knowledge and experience
of others and usually in a social environment. Promotional tastings are used
to extend this key behavioural factor where the demonstrator becomes
the risk-reducing authority.
(3) Retail assistants, who provide education and authoritative comment on the
wines.
(4) Wine appreciation education.
(5) Pricing, where the perceived quality of the wine is signalled in the shelf The Wine-
price. Marketing
(6) Packaging and labelling, where the bottle type and label copy signal Environment
product style quality and function.
This expectation/risk-reduction function can form the basis for market
segmentation studies of wine consumers. Consumer behaviour has been used
to segment the Australian wine market by D. McKinna in 1987[3]. The study 17
was able to identify four major segments which can be described briefly:
(1) Connoisseurs
This is the wine knowledgeable segment, the primary purchasers of fine
wines. These people consume wine on a regular (daily) basis. They have
a broad spectrum of tastes and like to experiment, although adoption
of new tastes may be slow. They are brand-loyal, have strong preferences
and make their decisions in advance of purchase. They prefer to purchase
from specialist wine merchants, auctions, or directly from the wineries.
These consumers see wine education as a hobby, read wine journals
avidly, and are not price-sensitive.
(2) Aspirational Drinkers
Members of this segment are concerned with the social aspects of wine
drinking. They purchase fashionable wine styles and are attracted to the
more fashionable brands and labels. Brands act as symbols of status and
for reassurance. These buyers are highly risk-averse and will spend
considerable time in the search process. They will often need the
confidence of the retail assistant and will therefore choose outlets
dependent on convenience and their confidence in the retail stall.
Aspirational drinkers are strongly influenced by wine writers, journalists,
and opinion leaders. They are likely to attend wine appreciation courses.
(3) Beverage Wine Consumers
These are avid wine consumers with little desire to appreciate wine.
They are loyal to a wine style and are not prepared to experiment. They
buy wines in an impersonal supermarket environment. They are brand-
loyal to a range of "safe brands", where choice is dependent on a
consistent taste, price and price-related promotions.
(4) New Wine Drinkers
These are the young who are attracted to wine based on the behaviour
of their parents or peer group. Preferences are not yet established but
sparkling wine and coolers may feature strongly in the choice of product
consumed.
Wine is purchased at social occasions and often "on premises" at pubs,
discos, parties and restaurants. They are strongly influenced by the
occasion where wine may be consumed. They are unsophisticated and
have limited parameters for choice, but often use price as a determinant
for purchase.
The Wine- The benefits consumers seek from wine are dependent on:
Marketing • the role of wine in culture;
Environment • the relative image of wine in relation to the consumer values placed on
other alcoholic beverages;
• the role and influence of wine in the major religion of that country.
One aspect of behaviour that has come to light in the beer and spirit cultures
18 of the United States, UK and Australia is the important role played by women
in the adoption of wine as an accepted beverage to replace beer and spirits.
Not only did their influence affect consumption but it also brought about a radical
change in taste preferences which in turn have significantly affected wine-making
techniques in order to create acceptable wine styles.
3. Wine and the Marketing Mix Wine and the
Marketing Mix
The Wine Product
A product is defined as a bundle of benefits which in combination satisfy a
consumer requirement. The wine product is the combination of a noble grape,
the creative artistry of the winemaker, and the tradition of the package.
The bundle of benefits for a wine is illustrated in Figure 5. The core benefit 19
is the reason why a consumer chooses wine in preference to other alcoholic
beverages. Core benefits may be:
• celebration sparkling wine;
• wine with food — table and dessert wines.
To communicate these benefits to the consumer they are made tangible by

relating the wine's properties to the knowledge and experience of the buyer.
The tangibility process is to appeal to the senses of touch, sight and smell.
The devices used in the tangibilisation process are:
(1) Quality of the packaging and the materials used.
(2) The bottle shape which will help identify the style of the wine (for
example, the champagne bottle shape is universal).
(3) The label and the information presented on the label, e.g.:
• variety
• region
• appellation
• vineyard or brand
• wine maker's notes.
The intangible factors are the way that the product is differentiated from its
competition and the reinforcement to the buyer of the market position of the
product. Intangible factors include:
• Price (does the price reflect the perceived value and quality of the
product?).
• Outlets where the products are sold (fine wines should not be found
at discount stores).
• The image of the winery.
• The personality of the winemaker.
• The respectability of the agent or distributor.
• The communications mix used by the wine company.
A cautionary note to wine marketers: it is important that the bundle of benefits
is in concert, i.e. they are complementary; otherwise, any discord can change
the buyer perception and disadvantage the product in the marketplace.
Wine and the
Marketing Mix
20
A review of success factors amongst wine companies is the consistency of their

quality and presentation and their careful selection of the outlets where their
products are made available.
Price
Price is defined as "what the consumer is prepared to pay for the perceived
value of a product". With the determination of price the wine marketer has
the following options:
(1) Market Skimming
Market skimming can be a useful device where the pricing objectives
are profit contribution and image, rather than sales volume and market
share. The objective is to maximise return to the full extent of the
preparedness of the consumer to pay.
Appellation and fine wines should adopt this approach without
exception, with modification only to reflect reduced consumer perceptions
resulting from a lesser quality vintage. These wines should avoid being
promoted using price-based sales promotion techniques. Nevertheless,
limited time random promotions may be undertaken to provide "bargain"
sales without damaging the price position of the wine.
(2) Market Penetration
The objective of this technique is to enter the market with a product
which is price-positioned below the value as perceived by the buyer, with
the intention of gaining market share rapidly at the expense of profitability.
This pricing tactic is most appropriate to the beverage segment of
the market and is usually confined to wine companies with a long Wine and the
experience curve of mass production and the related cost benefits. Marketing Mix
Very small wine companies with a low overhead structure can deploy
market penetration pricing provided that they are not perceived as
competition by the large cost-efficient companies.
Price-promotional techniques emanating from price penetration are
periodic discounting (monthly, quarterly, Easter, Christmas, etc.) and
loss leadership. 21
Other pricing methods where sales leverage may be gained from market
penetration pricing are:
• price bundling, where a number of products are offered as a single
purchase, e.g. mixed dozen sales;
• situational pricing, where alternative prices are not available, such
as on licensed premises, e.g. wine bars and restaurants.

Some second market pricing is becoming evident in wine marketing where
the same product is priced differently when sold in different markets
either by segment or geographically to include export.
If this pricing tactic is adopted it is important that buyers in one market
are excluded from the other markets or moving product from one market
to another is of no benefit to any third party, i.e. opportunities of parallel
importing, for example, are minimised.
(3) Neutral Pricing
Neutral pricing is where price is secondary to the other elements of the
marketing mix. It is not appropriate to wine pricing, as price plays such
an important role in communicating quality and image and is therefore
complementary to the other factors of the mix.
The Communication Mix
The communication mix available to the winemaker consists of:
• word of mouth
• wine journalism
• sales promotion
• advertising.
Word of Mouth
''People drink other people's wines.'' Word of mouth is by far the most effective
method of communication. The majority of wine consumers often buy wines
on other people's recommendation, via tastings, direct visits to the winery,
personal contact over dinner, lunch or from a mutual interest in wine. With word
of mouth communication, every taster/cellar door sales visitor is not one but
potentially three buyers. To capitalise on this momentum, the customer should
be made welcome at the cellar sales area.
However, control of the "mobile drunks" is very much in the hands of the
winemakers themselves, and the way they conduct their cellar sales operations.
Wine and the Barring entry is not the remedy; a "tasting fee" would perhaps deter the less
Marketing Mix than responsible visitor. The "tasting fee" system is used in France and can
be used to compensate the winemaker for the cost of the casual sales staff.
The winemaker should not be concerned if the visitor does not buy or if
his purchases are little compensation for the time spent. Ensure the tasting
educates visitors — that they are learning about wine, that you provide them
with expertise so that they can talk authoritatively about the wines, that you
22 provide them with tasting notes. Always ensure that they are aware from where
the wines are available and whether you offer a mail-order facility.
Wine Journalism
If you add up the column inches which are devoted to wine in specialised
publications, glossy magazines, newspapers, etc., wine knowledge amongst
customers should be complete. This, however, is not the case. A personal review
of the articles written shows that they are aimed at a very narrow market,
representing about 6 per cent of wine drinkers. Often the articles are couched
in mystique and jargon rather than attracting readers with a desire to learn about
wine and thus improve their enjoyment of the product. For small winemakers,
however, the opportunity of "column inches" is a boost to the communication
of the product, and should not be ignored. To be successful a number of rules
apply.
Winemakers compete for column inches in the same way as they compete
for customers. The journalist is a professional who requires information from
which to prepare any article. To differentiate your winery you need to:
• Provide some background of your winery, history, viticulture and
winemaking philosophy and practices. Make it interesting, do not follow
the crowd. Mundanity does not sell magazines or newspapers.
• Provide the information on a specific product you want to promote.
Describe its unique features, how it is different from others. Just listing
winery show medals is not enough.
• Provide photographs that will enhance your winery/product story. Ensure
they are of a quality that can be used in print (this may mean using a
professional photographer — the family 35mm may not be good enough).
• Provide tasting notes and a sample of wines so the journalist can draw
his own conclusions.
• Circulate your release to a range of wine journalists (lists are available
from your local Association).
Some winemakers use this form of promotion as their sole communications
method, often very successfully. To be really successful, however, the winemaker
must capture the imagination of the wine writer; the tips above could help.
Public relations consultants do provide editorial and other services and should
be considered as a professional input that could enhance your chance of
promotion.
Sales Promotion Wine and the
The opportunities via wine journalism cost little for major returns. For example, Marketing Mix
a half-page write-up in a metropolitan daily would in advertising terms be worth
about $A3-4,000, i.e. your cost-efficiency is high. Sales promotion, however,
involves a cost designed to provide a short-term sales stimulus. Types of sales
promotions are:
• Competitions 23
• Premiums
• Free goods
• Retail/wholesale incentives such as rebates, discounts, co-operative
advertising, promotional allowances.
The majority of the communications spending in the wine industry is devoted

to sales promotion especially aimed at the retailer and wholesaler. Dependence
on sales promotion reduces the opportunity for brand-loyalty, thus inducing
the consumer to buy across a range of "safe brands" according to whether
they are promoted "on special" or not.
Although it is the domain of the larger winemakers, small winemakers can
be involved in sales promotion. Here again are some rules that may be useful:
• To be successful, a sales promotion should involve in some way the
consumer, wholesaler/retailer and salesperson. Omit one and you are
not likely to gain his/her support.
• Sales promotions can take the form of money, goods or services, but
they are all a cost for which one must budget. The advantage of a sales
promotion is that it is likely to get an early upturn in sales.
• Sales promotions, public relations and advertising should have a common
theme and complement one another.
• If premiums/give-aways are used, ensure they have a perceived quality
equal to the product you are promoting, e.g. do not give away plastic
cups with champagne. Poor quality will reflect on your product.
• Timing is of the essence. Sales promotions are most effective during
peak selling periods. Make sure all your materials and stock are available
at the beginning of the promotion and that all the stock is sold at the
end. There is nothing more frustrating for a consumer than to want to
enter a competition, only to find the closing date has passed.
• Check the legality of the promotion. The lotteries and gaming acts in
each country or state, the trade practices acts and the licensing acts
are rigorous. If the laws are transgressed, the penalties can be severe.
• Sales promotions must have a time-limit, especially where wholesale
and retail incentives are concerned. Incentives such as rebates that have
no time-limit tend to be treated as a "right" rather than an incentive.
Wine and the Advertising
Marketing Mix Advertising is considered as the last item in the communications mix. Long-
term advertising is the most effective communications vehicle because it is
designed to educate and to modify consumer behaviour. Advertising should be
considered as an investment as it is use of the paid media to communicate one's
message. Advertising is not a waste of money if it is used effectively. Again
a set of guidelines apply:
24
• If you appoint an advertising agency make sure they are compatible with
your organisation (small budget, small budget agency).
• Make sure your communication with them is succinct, detailing your
expectations. Always deploy the principle of "garbage in, garbage out"
(GIGO), i.e. an agency is only as good as the brief provided by the client.
• You must ensure you have completed your marketing planning before you
advertise, then you can define your target market and thus your target
audience. This will determine the media you will use and make more
effective use of your advertising expenditure.
• Ensure the advertising message is in consumer terms and in a format
that attracts the consumer and with which he/she can associate.
• Ensure your advertising is true to life. A cheap advertisement does
nothing for your product. Make it believable and true to life.
• Ensure you have a message to communicate, i.e. do not advertise just
for the sake of advertising.
• Because the returns in sales from advertising are longer-term, then
advertising should be treated as an investment with an expected return
within a given time.
• Keep abreast of legislation aimed at banning the advertising of alcohol.
The liquor industry has already argued for self-regulating guidelines. Make
sure your advertising agency is cognisant of them. The advertising of
alcohol products needs to be responsible; otherwise alcohol advertising
may be banned.
Branding and Positioning

Branding
It is becoming evident that the building of new brands is synonymous with growth
categories. With the majority of product categories either stagnant or in decline,
the relative value of branding is paramount to wine marketers. In an era where
a company's "consumer franchise" can be of greater value on the balance-
sheet than its technology and assets, brands are king. Wherever we look we
see companies paying handsomely for consumer franchise; Nestle paying five
times the book value for Rowntree Hoadley, Allied Lyons paying £100 million
for Chateau Latour.
The role of wine products marketing today is therefore brand marketing. Wine and the
Unless products are updated, reformulated and improved in time they will die, Marketing Mix
but the goodwill built up by a brand will continue if it is maintained and its product
and service bundle of benefits kept responsive to changing consumer
expectations.
Although the wine industry is "brand-dominant", in the past brand association
has been confined to products and vineyards. It is only recently, and as a result
of legal challenge to the use of the names of viticultural regions as "wine style 25
generics", that the industry has appreciated the importance and "leverage"
that the region as a brand-name can provide.
Positioning
Positioning is defined as the activity of placing a product in a desirable location
in the mind of the consumer. The objective of positioning is to position a product

so that we can compare favourably with competing products.
Positioning is important as it reflects how the consumer perceives the product
in the light of competitive offerings. A key factor in positioning is that a product
should not be positioned in a head-to-head position with its competitor. If a
product offering can be compared directly with its competitor it is obvious that
the product which offers the lowest price will win, most of the time.
The consumer's perception of a brand and its positioning is the result of:
• the way the company has managed its marketing mix in the past;
• the action of competitors and their market mix activities;
• the buyer's own evaluation and perceptions including his/her own
experiences and the experiences of others.
In the end it is only the customers' perceptions that count.
Often wine marketers are expected to reposition products in order to regain
the competitive initiative that occurs with changing current consumer attitudes
towards the product. This can be achieved in a number of ways, e.g.:
• change in packaging
• building a new brand by changing the name.
It is wise to make haste slowly, working on current perceptions and challenging
only the perceptions that are most easily modified. Radical changes or too rapid
change can destroy even the most favourable of attitudes and thus render the
repositioning ineffectual; irretrievable damage may ensue.
Before the repositioning can be implemented the relative positions of your
offer and that of the competitor need thorough research. The repositioning
options are twofold:
• reposition your product relative to the competitor, or
• reposition the competitor relative to your product offer.
Repositioning the competition needs a thorough examination of the competitor
position and communicating your strengths vis-à-vis the competitor deficiencies.
Wine and the
Marketing Mix
26
Ranging
The issue of marketing product ranges and the extension of established brands
into product ranges is a common occurrence in wine marketing today. There
are two alternative ranging options open to the wine marketer: Hierarchical
Ranging as illustrated in Figure 6 and Parity Ranging as in Figure 7.
Hierarchical Ranging
This is related to the parameters of price and quality differentiation. This type
of ranging is common to motor cars. Also, as thefigureillustrates, this concept
of ranging is related to the purchaser's relative risk and effort during the purchase
process. The risks a wine consumer experiences are described in the section
on consumer behaviour and are related to the level of marketing effort necessary
to reduce these risks and to encourage purchase.
Risk-reduction tactics in the beverage segment are usually price- and
promotion-related. In the branded segment, risk is reduced by "known name"
associations. Highest risk is experienced where the products are based on the Wine and the
communication of uniqueness and differentiation. Marketing Mix
High priced and specialist wine purchase involves little risk as the number
of buyers is limited to a small band of specialists who are wine-knowledgeable
and are prepared to pay for the exclusivity of the product.
The pointers to wine marketers engaged in hierarchical ranging are:
(1) Ensure that the range is differentiated to attract a particular buyer and
therefore positioned well away from the others to avoid intra-brand 27
cannibalisation. This can be achieved by using differing merchandising
and distribution tactics either within a particular retail outlet or by limiting
distribution of certain products to specific outlets where a particular buyer
is known to shop.
(2) Ensure that price, quality and image are in concert with buyer
expectations.
(3) Rebranding a single product to be positioned in differing parts of the
range is not recommended, especially where consumers and retailers
have knowledge and can identify these products.
Parity Ranging
These are ranges where price and quality are deemed to be the same across
the range. This type of ranging can occur in any product classification zone
(see Figure 7). These ranges are established either by smaller winemakers
who offer a number of varietal products under a common vineyard label or by
large companies that introduce branded ranges into the brand preferred or
beverage classification zones.
The marketing tactic of parity ranging is to provide opportunities for placement
across the market and to increase market share and display in the retail outlet.
It also allows the marketer to adjust the range as consumer tastes change with
the addition of new varieties and the deletion of less popular styles.
The attractiveness of parity ranging is the economies gained by the recovery
of product launch and promotional costs across a number of products. The
dangers are when wine companies endeavour to line-extend what were
previously single product brands in anticipation of a "cheap ride" by capitalising
on a known and established brand-name. The marketing literature contains a
litany of examples where this tactic has proved unsuccessful and has ultimately
damaged the previous market position of the originally successful product.
Wine and the The Channels of Distribution for Wine
Marketing Mix As an alcoholic beverage in the majority of countries, wine can be distributed
only through outlets licensed for the sale and distribution of alcoholic products.
This restriction has been both beneficial and disadvantageous to wine marketing.
Benefits
28 • The ability for outlets to specialise as wine merchants.
• The opportunity for wine to compete as a choice product versus beer
and spirits.
• Display opportunities owing to diversity of labels.
• The communication opportunities for staff to educate themselves
regarding wine and then pass on this knowledge to the consumers.
• With spirit sales a single choice decision which may have a long search
period and thus exposes the potential buyer to a variety of wine styles
and products.
• Where permitted, this search process has been extended to tasting as
a precursor to purchase.
• To allow wine to be sold at venues where it can both form part of a social
atmosphere and be served with food, which has become its prime core
benefit amongst regular consumers.
• Often the retailer margin percentage achieved on the sale of a wine is
greater than that achieved on the sale of a beer or spirits product.
• Wine in some countries is not subject to excise duties.
• Wine has been able to be "leveraged" by both agents and distributors
as a portfolio product linked in the "selling package" to the retailer of
a successful beer or spirit and a range of wines.
Disadvantages
• Where the beer and spirits industry is largely oligopolies, the wine
industry because of its relatively larger number of suppliers is more
subject to the pressures of perfect competition.
• Where the beer and spirits industries have deployed pull strategies to
encourage distribution through the free retail system (i.e. not tied to any
brewer or liquor company), the wine industry has tended to favour push
strategies and has abdicated marketing activities to the distribution
channels (especially to the agent and distributor system).
• Where negotiation and stocking decisions are made based on the
experience of beer and spirits rather than treating wine as a separate
product. Fortunately, the growth in wine sales through mass distribution
outlets is changing this practice. Nevertheless, the ability of retailers
to merchandise low volume sales of fine wines is still restrictive. For
example, a retail chain in the United Kingdom merchandises its wines
vertically (i.e. cheap wines on the bottom shelves, expensive wines on Wine and the
the top shelves). This practice is not good for the wines as the ceiling Marketing Mix
is usually the warmest part of the room. Nor is it any good for the wine
buyer involved in the search process unless he/she has good eyesight
and long arms.
• The major disadvantage is the slow realisation by the retail network of
the existence of the two wine markets. The volume-related, rapid stock
turn philosophy (coupled with penetrative pricing) has reduced the sale 29
of wine to that of a commodity in many markets.
In addition, the necessity for retailer risk-reduction endorsement of unique or
distinctive wines is absent. Thus the consumer will reduce risk by purchasing
a known brand or a lower-priced product. Retailers are now appreciating the
value of risk-reduction opportunities and are setting up speciality fine wine
sections. A retail chain in the United Kingdom is experimenting with a chain

of exclusive fine wine stores.
The major drawback of retail distribution is often the preclusion of the smaller
wine companies owing to limited volume or expense constraints when asked
to meet the costs of distribution. These costs can involve:
• stocking cost — the cost of stocking the product;
• display allowance — the cost of shelf or floor space;
• promotional allowance — the cost of maintaining the product at a particular
shelf price;
• co-operative advertising — the cost of inclusion in a retailer's promotional
advertisement.
Other cost may be incurred by the beverage market to cover product returns,
breakages, leakage (bag-in-box) product beyond the expiry of the use-by date
(bag-in-box).
A knowledge of the structure and operation of the channels of distribution
is vital to successful wine marketing.
Direct Marketing
A growing area of opportunity to wine marketers is direct selling, using the
in-home personalised approach, direct mail, or telephone selling. The advantages
of these selling and distribution techniques are numerous:
• knowing the buyer personally;
• being able to record purchase behaviour;
• being able to target particular customers specifically with a particular
product offer;
• there is some opportunity for ' 'second market pricing'', i.e. offering the
same product in a different market using a different pricing structure;
• to coincide offers with the purchasers' buying patterns;
Wine and the • to develop a captive market response by building purchase loyalty, i.e.
Marketing Mix membership in "clubs", regular communication, loyalty-related offers and
competitions.
A review of direct marketing material for wine has identified some deficiencies:
• too difficult to choose between offers;
• often the order-placing procedure is complex and time-consuming;
30 • too impersonal (standard letter, not signed, not personally addressed);
• a lack of risk-reducing copy such as wine description, the winemaker's
comments, expert opinion. Some major direct marketing organisations
offer a "toll-free" advisory service to enhance further the risk-reducing
service offered.
Telephone selling and personal selling, to be successful, need:

• trained salespeople who understand wine as well as selling;
• an understanding that a refusal is not a lost sale and that a future contact
could prove more fruitful;
• a stable salesforce. Often direct selling organisations are marred by having
a rapid turnover of sales staff. This does not allow the salesperson to
establish him/herself in a risk-reducing role. To overcome this, improved
recruitment and training techniques are necessary.
Consumer Sales at the Winery

For the boutique winery often the sole opportunity for sales is at the cellar
door. Successful cellar door sales can increase profit and be a continuous source
of cash flow. The success factors for a cellar door operation include trained
staff who understand wine and can communicate with the potential customer.
A "no sale" is not a lost sale; an alternative stockists list or a mail-order service
is available.
Where space permits, buyers should be segregated to identify the potential
loyal customer from the occasional wine drinker. Various methods can be adopted
to do this, from a charge for the tasting to a conducted tasting led by a staff
person conversant with wine.
Scarcity Marketing
The enhancement opportunities for a wine can be increased by adopting scarcity
marketing tactics. To do this:
• the wine is available only in limited quantities;
• is applicable only to fine and speciality wines that are recognised for their
outstanding quality or uniqueness;
• stock-outs should be used as a leverage point for future sales.
The changes in distribution arrangements for wine in the European Community
are of urgent consequence to wine marketers. The issues will be:
• Purchasing power arrangements as retail outlets combine across country Wine and the
boundaries. Marketing Mix
• Physical distribution arrangements.
• The effects of cost differentials across the Community and their
repercussions on transport and warehousing costs.
• Licensing laws and on-premises consumption.
• Customs regulations. 31
• Wine promotion techniques at the point-of-purchase.
Government-controlled Distribution
In Norway, Sweden, the Provinces of Canada, and some states of the US the
distribution of wine is undertaken by Government. The characteristics of
government distribution are:

• Periodic approvals.
• Performance criteria after listing (de-listing occurs for non-performance).
• Highly price-sensitive purchase behaviour with supplier loyalty aligned
with pricing structures.
• Sales performance data readily available.
• Limited merchandising opportunities.
• Pricing structures based on a price/quality determination.
• Fixed margin structure.
• Ranges often provide a broad consumer choice.
• Consumer risk-reduction needs to be communicated outside the
distribution system. Often this is made difficult by advertising restrictions
on the sale of alcohol.
Marketing
into Europe
4. Marketing into Europe
It is an otherwise normal Monday morning, but on your desk this day is a memo
that intrigues at first, then confuses, then irritates. It is from your new head
of product development, who suggests that, as you may have forgotten, one
of his hidden attributes is fluency in French. Doesn't that mean, he continues,
that the company really should consider expanding the hitherto primarily British
32 trade in hand-finished light-pulls into the French market?
You ease yourself from incredulity into exasperation. Who does this fellow
think he is? Does he honestly assume that one small factor, such as his linguistic
ability, guarantees entry and growth in a foreign market where distributorships
and after-sales service are non-existent? He must be mad. You have better
things to do with your time than respond to this ridiculous idea, not least of
all the half-yearly out-turns and the consequent challenges facing you in your
home market during the next six months.
Yet it is entirely likely that your day's post will contain at least one other
item urging you to "face up to the issues and responsibilities of 1992". "1992?",
you ask. 1990 has hardly begun and, anyway, your current corporatefiveyear-
plan is forcing you to confront eventualities in 1994. Go back to your out-turns,
but as you go let the possibility of France rest gently in the backwaters of your
consciousness. Consider it again in the bath tonight and let it softly play around
your last thoughts as you slip into sleep. That, in itself, is the benefit of being
prompted into "thinking Europe". Thinking Europe, for most of us, will be
enough and at least we will, for a change, have considered it seriously. But,
should we rush headlong into this infatuation simply because it has presented
itself as an opportunity, we would be acting like silly school-children and not
the professional managers we hope we are. Here, then, is the once-and-for-all
form memo to send back to those people in your organisation who gasp excitedly
about 1992 and hope to spur you on to wider and possibly richer markets.
Your Standard "1992 Response" Euro-memo

(Personalise as appropriate)
Date: 31 March 1989
To: (enter name)
From: Head of Group Marketing
Re: Should we expand our business throughout Europe in the light of lessened
trade restrictions planned for 1992?
Thank you for your recent correspondence on above subject, which I read
with interest. Before committing myself to a decision on the matter, I suggest
we review several key issues with which, no doubt, you are already familiar
but which, perhaps, may now deserve a more detailed analysis.
This chapter is based on an article written by Abby Day.

(1) What business arewein? Marketing
It is, of course, not necessary for me to remind you of the Corporate Mission into Europe
Statement which we devised last year and which clearly articulated our precise
definition of the business we are in. Let me here, however, emphasise that
all our corporate, indeed, marketing, strategies evolve from this statement and
we must consider any potential market in its light. As you no doubt recall, the
purpose for creating such a statement was to give us a well-lit path to follow
during the turbulent years ahead and provide us with the ability to focus on 33
what we are good at, rather than what other people are good at or what we
might like to think we're good at. Peters and Waterman described this as
"sticking to the knitting", as you know, and urged all organisations to formulate
a business definition to guide them. The question we must ask, therefore, is:
"Does penetration of other markets comply with and complement our own
business definition?"
(2) Who are our customers?

We paid a small fortune, as you know, to the Wunce and Forall Marketing
Strategists Consultancy Group last year for a three-week in-company training
(sorry, management development) programme in marketing planning. One of
the greatest benefits we all derived was a better understanding of the nature
of segmentation. Indeed, improved segmentation is the hallmark of our current
marketing plan, regarding which I once again congratulate you and your team
for your fine efforts. The coloured overlays were particularly brilliant. But, I
digress. Instead, I attach for you my own notes from our plenary session which,
no doubt, correspond with your own.
Notes
What is a Segment?
It is often found that, when a market is subjected to scrutiny, the members of that market
fall into natural groups or segments within which customers exhibit the same broad
characteristics. These segments form separate markets in themselves and can often be
seen to be large enough to warrant a separate marketing strategy. Looking at markets
in this way is termed market segmentation.
Criteria for Segmentation
Whatever the means whereby we distinguish between our customers, the criteria that
we use for categorisation must be appropriate to the specific product/market situation.
In other words, why segment a market on the basis of age of customer or even geography,
if those characteristics fail to distinguish between different kinds of potential purchasing
behaviour? Clearly, the characteristics must be related to behaviour. When segmentation
is based on the benefits that the customer is seeking to acquire from a product, the criteria
must be limited to those benefits actually related to purchase. Once we know the nature
of those benefits and the particular combinations that the market seeks, then we are better
poised to promote our product offering to those customers who are most likely to be
attracted to it.
Marketing For a strategy of market segmentation to be successful, a number of requirements must
be met (see Figure 1):
into Europe
(1) For a segment to be viable it is necessary that it can be distinguished from other
segments. At the same time, the customers within each segment must have a
high degree of similarity on the criteria adopted for segmentation. In other words,
customers must be different on some dimensions, thus allowing segments to be
isolated within the overall market, but customers within each segment must be
similar on certain specific dimensions.
34
(2) The criteria used to differentiate between customer groupings — market segments
— must be relevant to the purchase situation. These criteria should be related
to differences in market demand.
(3) The segment should be of a sufficient potential size to ensure that any marketing
investment made within it will result in an adequate return.
(4) An identified market segment can be exploited only if it can be reached. It must
be possible to direct a separate marketing strategy to each segment. This means
that the customers in each segment could have different television reviewing or
reading habits, different retail shopping patterns, different responses to prices
or different expectations as to the benefits to be derived from the product.
As has already been indicated, the realisation that customers are different has led to many
successful marketing innovations by a wide variety of companies. Building societies, for
example, offer different rates of interest for customers with short- and long-term financial
needs. Educational institutions segment their markets successfully by using criteria of
educational qualifications and career aspirations. Manufacturers of components for
computers divide their market and vary their terms of sale according to the requirements
and circumstances of different customer organisations. These and other examples provide
a testimony to the value of the market segmentation.
It seems, on reflection, that "1992" would ease one criterion of segmentation,

which is the accessibility of the market. There is no doubt that removal
of trade restrictions would ease our entry into another market, but the other
criteria still exist. Most particularly, I am concerned with the common needs
of customers in the potential segment. Frankly, I do not know enough about
the Italians, or the French, or the Spanish to know what their needs are.
Admittedly, we could commission market research but I, personally, would feel Marketing
uncomfortable being so distanced from my customers that I had to rely on print- into Europe
outs to tell me anything about them. The only answer would be to create
partnerships, franchise operations, I suppose, in local markets to give us the
native intuition for the market which we enjoy here in the UK.
It is all possible, of course. Hundreds of multinationals already do it. The
people who needed to be "in Europe" are already there. But, I ask myself:
"Does the satisfaction of one criterion of segmentation, namely that of 35
accessibility, give us the will or the reason to consider the segment viable?"
(3) Who are our customers?

Following from the previous point, we must ask ourselves constantly the key
question — who are our customers? Are they segmented by geography, sex,
age, income, ownership of Audis, or what? What motivates these customers?

Admittedly, the effects of 1992 will change depending upon the business we
are in and the customer base.
Take ball-bearings, for example. Purchasers of these fast-moving industrial
goods are hyper-sensitive to price. After all, for most purposes one ball-bearing
is much like any other. The product itself is much of a muchness, and even
the price is relatively the same across the board. We might expect, therefore,
that manufacturers of ball-bearings will be subject to gross competitive pressure
once the trade barriers fall down.
True? False. These companies are simply going to be subject to more of
the same — more companies competing in what is already a competitive market.
Let them ask themselves how they do business today, in the UK, protected
as it is from external pressure but ruthless in its internal competitive force.
Do these manufacturers roll over and die? Of course not. They seek to
differentiate themselves from the competitors and, if they cannot do so on
product or price, they look to the other two of marketing's famous "Four Ps''
and concentrate on promotion and place.
They build in improved after-sales service, or freephone crisis lines, or
discounts on products in the same line — or something. It is never the number
of competitors in the marketplace which proves a threat, nor is it always
someone's ability to undercut our price (really, would you buy a cheap Jag from
a spiv in the local?) that determines our rise and fall. It is more our ability
to persuade the customer to buy from us, and to buy again, and again, and again.
Let us get back to understanding our customers. Should we be worried? Maybe
so, but it is not likely that we should be worried just because a smart Spanish
company is about to throw itself on our customers' doorsteps. If their ideas
were so smart, why had not someone in the UK thought of them before —
why had not we? And should we go after customers in the Spanish market?
Only if they are truly potential markets and it is viable to do so. I seem to
recall we turned down a proposal recently to branch into north-east Scotland,
for good reasons based on distributorships and after-sales service. Why should
Barcelona be more attractive?
Marketing I attach for your interest an extract from an article by Paul Bender which,
into Europe although focusing on the question of distribution, paints a wide picture of the
key questions which confront all of us considering international business.
The Challenge of International
Distribution
Paul S. Bender
36 (From International Journal of Physical Distribution & Materials Management, Vol. 15 No.
4, 1985)
Current business conditions make the distinction between domestic and inter-
national distribution unimportant. Successful enterprises have realised that, to survive and
prosper in the business environment of today and tomorrow, they must go beyond the
organisational structures and strategic approaches of the past, and adopt a worldwide, global
view of business.
As a consequence, enterprises that continue to adopt a regional, national, or even

multinational approach, are falling prey to the competitive advantages of global organisations.
In the last few years, many major USA corporations have learned this bitter truth. Some
of them had enough accumulated resources (or were protected by the government) to survive
and adapt quickly enough to the new conditions. Others were not so lucky, and were acquired
or put out of business by more efficient competitors.
In the next few years we are likely to see the scenario played again and again, with increasing,
lethal regularity. It is, then, worthwhile examining some of the reasons for this state of affairs,
and developing an understanding of the factors that determine the superiority of global
companies over other forms of business organisations.
Our aim here will be to answer the question: Why should you be interested in global business?
By inference we will be addressing the question: Why should you be interested in global
distribution, even if your responsibilities encompass only domestic operations? To answer
such questions, let us start by examining the common factors that successful enterprises
share all over the world.
When we examine the anatomy of successful businesses, we can see that they all share
four characteristics:
(1) a definite purpose, normally expressed in a people, or customer, orientation, such
as "to attract and keep customers";
(2) a clearly defined approach to accomplish their purpose, expressed in physical terms,
such as "to produce and deliver goods and services attractive to customers,
competitively";
(3) an underlying technology to implement their approach, expressed in informational
terms, such as "to introduce into the business process the most cost-effective
management systems, to maximise company productivity"; and
(4) meet a basic requisite to ensure long-term survival, expressed in financial terms,
such as "to generate enough profit to justify long-term investments under risk and
uncertainty''.
In the last few years, there have been significant advances in logistic and informational
technologies. Those advances constitute the main strategic weapons used today by global
organisations to defeat their competitors worldwide. Let us examine why this is so.
There have been many advances in logistics — such as new, cost-effective transport
technologies for air, ocean and rail movements — and in inventory management — such as
the zero inventory approach, and advanced multistage inventory management techniques.
At the same time, there have been major informational advances such as instant global
communications, the massive introduction of microprocessors, and the beginnings of the use
of artificial intelligence in business management.
Such advances have effectively reduced the size of the world, and have produced changes Marketing
in human aspirations and values, thus changing worldwide demand characteristics.
Specifically, the demonstration effect, diffusing information through increased travel, movies, into Europe
television, books and magazines, is homogenising demand for most goods and services. People
all over the world today know how people live everywhere else, and are eager to adopt foreign
mores. Witness the successes of IBM, McDonald's, Coca-Cola, Levi's, Sony, Toyota, Seiko
and others, distributing their standard products from Parsippany to Paris, and from Tegucigalpa
to Tokyo.
Another specific consequence of those advances is that cheaper transport and
communications have reduced the importance of geographic proximity. Thus a product or 37
service that succeeds with a certain type of market stratum in Malibu, California, is more
likely to succeed with an analogous market stratum in Madrid, Spain, than with a different
market stratum in Monterey, California.
The business consequences of those developments are basically:
(1) there is a world-wide convergence of markets;
(2) we are witnessing the emergence of global enterprises;

(3) we are witnessing the demise of multinational corporations.
The first consequence is a direct result of the technological advances discussed before. The
other two result from critical differences in the fashion in which different companies develop
their strategies.
A strategy is the result of an optimal matching of a company's external opportunities with
its internal capabilities, subject to the constraints imposed by the business environment, and
by internal policies.
External opportunities can be described effectively in terms of expected product or service
demand for varying price and service levels, at different market strata: market strata being
homogeneous groupings of demands based on demographic, social, and economic factors.
The fashion in which different companies stratify their demands is what produces the main
difference between multinational and global enterprises.
Multinational enterprises stratify their demandswithingeographic areas. Global enterprises
stratify their demands purely along demographic, social, and economic lines, across geographic
areas.
The Marketing
Plan
5. The Marketing Plan
The need for marketing planning may not always be considered necessary to
winemakers. The comments, "I have difficulty selling what I make" or "We
make it, then the agent sells it" are common.
38 Why is Marketing Planning Essential?

Wine companies operate in a hostile commercial environment. Some of the
difficulties with which they must cope are:
• changing consumer tastes
• concentration of major winemaking companies
• concentration of wholesale and retail outlets

• changing legal requirements
• taxation
• anti-alcohol lobby, etc.
This can be quite confusing for someone who just wants to make fine wine.
It is also where marketing planning can help. It ensures the co-ordination of
activities between the grower, the winemaker, the brand agent and the retailer.
When preparing the marketing plan the winemaker must decide:
• what types of wine will be made
• what quantities
• when it will be available for sale
• how it will be packaged
• what the costs of production and packaging will be
• when cash flow from the vintage will be achieved
• what profit will be made.
It will assist in identifying and coping with unexpected events such as increases
in sales tax or the introduction of new label regulations. Marketing planning
will prepare the winemaker for change:
• changing consumer variables
• new packaging and labelling
• the need to introduce new technology and methods
• planting new grape varieties
• using different methods of grape handling to provide style variations.
It will assist in decision making when "the unexpected" takes place, as
marketing planning identifies future threats. Forewarned is forearmed.
An important benefit of marketing planning is that it improves communication
between the winemaker, the grower, the suppliers, the brand agent and
the accountant. It can reduce conflict in the larger wine companies as common The Marketing
marketing goals ensure that winemakers, administration, salespersons, etc. are Plan
all working to a common end rather than being in conflict with one another.
Marketing planning will help alleviate under/overproduction and future stock
balancing and planning. Finally it ensures that the promotional programme
provides value for money spent, as opposed to depending on selling job lots
and price cutting to ensure sales budgets are met.
39
The Role of Marketing Planning
It may be argued that only large companies need marketing planning. Experience
shows that every organisation needs marketing planning from the one-person
boutique winery to the large multinational. The process of marketing planning
forces management to define why they are in business and what they hope
to achieve, and what they need to do in order to achieve these aims.

The process of strategic marketing planning is described in Figure 8. Strategic
marketing planning, which includes corporate planning, can be compared with
the flight plan for an aircraft:
Mission: what is the purpose of the flight?
Situation analysis: where we are now, and a review of our resources to
ensure we are capable of reaching our destination.
Analysis of Strengths, Weaknesses, Opportunities and Threats

This should be a candid review of the organisation in terms of both capabilities
and the standing of the organisation in relation to the competition and the hostile
marketing environment referred to earlier.
In recent years it has become the trend for organisations to concentrate on
what they are good at, divesting themselves of unrelated activities. The latest
example of this is Beechams, which has divested its soft drinks operation to
concentrate its activities in pharmaceuticals and toiletries. This approach can
be summed up as "do what you do well" or "a passion for excellence". Wine
companies are so often caught in the dilemma of "causes versus quality".
How to Prepare a Marketing Plan

The steps needed to complete a marketing plan are shown in Figure 9. The
process should start in May/June in the southern hemisphere and
December/January in the northern hemisphere. Why so early? The wine
production process takes nine months from budding to bottling. If excellence
is to be achieved, then decisions must be taken on pruning, canopy management,
the use of irrigation, etc. Climate cannot be controlled but vineyard management
can and this is fundamental to the quality of the end product.
The objective must be to produce wine in the quality and style that the
consumer will appreciate and purchase. Planning will isolate the varieties
required, what is available in your vineyards and what will be required from
independent grapegrowers.
40
Plan
The Marketing
Corporate Plan
The Marketing
Plan
Situation analysis — marketing audit
Internal External Environmental
Wine styles Who are your competitors? Economic situation of the
Grape availability How do you rate against industry
Market positioning them? Taxation
Market share How do their products, Legal constraints
Profit margin/costs costs, marketing methods Social attitudes to alcohol 41
Market information compare with yours? Changing technology
Marketing mix Changes in the Changing consumer tastes
Production capacity distribution channels
Storage capacity Consumer behaviour
SWOT analysis
Strengths Opportunities
Weaknesses Threats
Marketing objectives and strategies

Rules
1. Must be consistent with corporate objectives
2. Must be within the resources of the organisation
3. Must be achievable
4. Must be quantified and achieved in a given time
5. Must take into account corporate and product life cycle
considerations
6. Must consolidate strengths, eliminate weaknesses, develop
opportunities, overcome threats.
Product Price Promotion Distribution

Wine type x style x quality Product quality x ex-winery Advertising Direct selling
Type of package Price to calculate sales Sales promotion Cellar door
Type of capsule Revenue Co-operative advertising Brand agent
Type of cork Pricing policy Rebates, discounts, free Wide range distributor
Type of label Price positioning goods, tasting stock Volumes/parcels
Carton details Pricing structures Public relations Warehousing
New products • suggested retail Export promotion requirements
Product positioning • wholesale Palletisation
Statements to include: • agent Freight and transport
• unique selling point • cellar door Service levels
• variety details • ex-winery Inventory
• blend details Order processing
• legal requirements Export
• distribution requirement
Marketing Budget
Sales revenue
Cost of sales Feedback
Selling costs Implement, action, monitor,
Advertising and promotional costs
Distribution costs
and control Figure 9.
Elements of the
Marketing Plan
The Marketing The next stage is the vintage plan. Hand picking, mechanical picking, adequate
Plan equipment and sufficient storage must all be addressed. Similarly, bottles, labels,
vintage supplies, hire equipment and so on must all be taken into account. The
benefit to you is to ensure that you have the equipment you need when you
need it and thereby avoid penalty costs for rushed jobs. You can ensure your
product is on the market at the right time to maximise opportunity, bearing
in mind that wine sales show highly seasonal patterns.
42 Again the implementation of the promotion, selling and distribution plan
requires the same meticulous care that is given to the vineyard and vintage
plans. Good planning can save you money.
Finally, the marketing plan is a communication document for your agent or
salesforce and accountant. Nothing can happen until individuals know when they
are expected to do something. Delayed availability and out-of-stock situations
may also be avoided.

The marketing plan should be made and used as a living document, not only
as a monitor of progress towards achieving budget but to enable adjustments
to be made as circumstances change. Imagine where a pilot would be if forced
to change course to avoid an electrical storm without his original flight plan
to guide him. You also should be piloting your business with an adequate plan.
The marketing plan is a method of putting marketing ideas into practice. It
determines the activities of the marketing function and is completed in the
context of the corporate plan. This takes into consideration several elements
of the corporate plan:
The mission statement. This defines the business and its key competitive
advantages. It spells out the future direction and provides the framework
for long-term planning.
Corporate objectives. These determine the performance criteria of the wine
company and are usually expressed in financial terms, e.g. return on
investment, etc. The corporate objectives should also include objectives that
will position the wine company in relation to its shareholders, society, its
competitors, its position in the industry as a responsible corporate citizen,
and its relationships with suppliers, grapegrowers, customers and government.
Corporate strategy. This determines the investment decision of the wine
company, growth, maintenance, harvest or divest.
The marketing plan for a product or a product range will be a statement of the
way in which corporate objectives will be achieved by the management of that
product or product range in a particular market. For a small or medium-sized
winery then the marketing plan should be designed wholly to achieve the corporate
objective. The marketing-planning process includes a number of steps.
The Marketing Audit
This is ah appraisal of the operating environment, in particular the products,
the market and the customer. It should also evaluate the wine company's past
performance.
The research process involved should focus on the following factors and the The Marketing
analysis should determine their influences on the future marketing decision- Plan
making process:
(1) The business environment. (The key factors of the environment for wine
are detailed in chapter 2).
(2) The current state of the wine industry:
• market growth trends 43
• the industry life cycle stage
• market life cycle stage
• influence of suppliers and distributors
• cross-elasticities of demand between competing wine products
• the long-term grape supply

• the influence of imports and exports
• industry barriers to entry and exit.
The wine industry is considered as having high entry barriers owing to the
time needed for vineyard development. These barriers are low, however, when
the number of new market entrants as viticulturalists/winemakers is considered
in the new world markets of Australia, New Zealand and California.
Barriers to exit, however, are high as a result of the high establishment cost
of both vineyard and winery. These high barriers to exit are the cause of grape
and wine surpluses in the European Community and the vine-pull schemes
of Australia and New Zealand.
A Comparative Analysis of Industry Success Factors and the

Individual Wine Company Performance
What are the success factors for the industry and how does the wine company
rate against its competitors?
Customer and Consumer Behaviour

Consumer behaviour has already been considered, but for the customers the
following analysis is important:
• Who are they?
• What is their relative value to the wine company (this allows a classification
system to be developed)?
• How important are you to them?
Competitor Analysis
• Who are your competitors?
• What are their capabilities?
The Marketing
Plan
44
• Corporate:
— production
— R&D
— financial
— distribution
— promotional
— marketing
— supplier relationships
— customer relationships
Analysis of the Product Portfolio

Picking the winners and the losers using the Boston Group analysis is illustrated
in Figure 10. The decisions from the analysis could entail the following:
• The "dog" quadrant is a likely candidate for divestment.
• The ''question mark'' is where all new products start and should continue
to be supported by investment in order to capture growth and
development opportunities.
• The ''star'' should be invested in in order to maintain growth and market
share.
• The ''cash cow'' is the major source of cash flow and should be nurtured
and protected from competitive attack. The cash cow funds the star and
question mark products.
Analysis of your Company The Marketing
This includes analysis of resources and limitations (financial, vineyard, production, Plan
technology and equipment, management expertise, etc.) The bringing together
of the external and internal analysis is the Opportunities, Threats, Strengths
and Weaknesses (SWOT) analysis.
Opportunities and Threats are drawn from the business, industry, customer
and consumer, and from changes in the competitive environment. Strengths
and limitations are related to how well your wine company can react to the threats 45
and opportunities identified.
The Marketing Objectives

Marketing objectives are expressed as:
• Volume sales in litres.

• Value sales in dollars, francs, etc.
• Marketing contribution.
• Market share in the case of companies operating in the beverage market.
The planning gap is the difference between current direction of the wine company
without anything particularly happening and where it would like to be in the
future as determined by the corporate objectives. The attainment of the
marketing objectives is by way of the marketing strategy.
Marketing Strategy
Growth strategy options are illustrated in Figure 11. The options are shown
with the level of risk involved with each option.
Market penetration is a low risk strategy and involves selling more of your
products to your current customers.
Market development is the next level of risk and involves selling current
products to new customers.
Product development is a higher risk owing to high failure rates. This involves
the development of new product further to satisfy current customers' needs.
Diversification means new products to new customers and is very high-risk.
Acquisition may be a better method of achieving diversification.
The Competitive Strategy

Both the beverage and fine wine markets are highly competitive. The generic
competitive strategies, as defined by Porter, are:
Differentiation: making the wine company's product different from those of
other wine companies competing in the same segment.
Focus: aiming the product range at a particular group of customers or segment
of consumers.
The Marketing
Plan
46
Low cost: differentiation by being the most cost-efficient. This strategy does
not mean selling at the lowest price, but in a price war this company is the
most likely to win.
All successful wine companies should be able to identify a "Sustainable
Competitive Advantage", i.e. what single factor does a wine company possess
which in the eyes of the customer sets it apart from the competitors and which
the competitors cannot emulate [6]?
Making the Plan Happen

The main challenge to the wine marketer is to get the plan accepted and
implemented within the wine company. In an industry where marketing is still
just gaining credibility, the internal marketing process is essential. Wine-
marketing people may well spend much of their time marketing their activities
to other staff within the organisation.
The acceptance of marketing within the wine company will vary. The focus
on production will often leave the necessity for marketing in question.
Where this lack of conviction in the value of marketing has not been achieved,
the outcome has been that in times of economic or market constraint
marketing operations in wine companies have been disbanded and the staff
dismissed (this has also occurred after the acquisition of a marketing-oriented
company by one that has yet to appreciate the role of marketing). Or they have
suffered restricted budgets necessary for the marketing people to do their job
(e.g. marketing research, market testing, etc.) or failed to obtain resources The Marketing
in competition with other expenses within the wine company. Thus the role Plan
of the marketer is to increase the influence and effectiveness of the marketing
function.
Marketers themselves in this environment must be cautious about thinking
that their interpretation of marketing is the only way to run the organisation.
Winemakers may see marketing as a constraint on their creative activities, whilst
as a whole marketing may well be seen as a non-productive expense. More 47
often than not marketing is interpreted as just selling, advertising and promotion.
The perception of the role of marketing in the wine industry is improving
as organisations realise that the need for marketing is necessary for long-term
commercial success, especially in developing export markets. The key to
acceptance from those who are not convinced of the value of marketing is to
involve them as much as possible in the marketing-planning process.

This can be achieved only by developing communication with the other parts
of the wine company, R&D, viticulture, winemaking, bottling, etc.
In wine companies with a low cost focus, winery management is likely to
be preoccupied with production considerations or with cost reduction and
improving efficiency. In this instance, establishing the marketing function by
internal marketing is not likely to be very effective.
In wine companies that are following a differentiated competitive strategy
then the communication and activities of internal marketing should focus on
groups or parts of the wine company which are influenced by marketing decisions
or can be persuaded that the marketing function can assist with their decision
making or performance. A good example here is the bottling Hall manager. This
communication needs to be encouraged as a two-way input by encouraging others
to provide the wine marketer with information that will assist in the planning
process.
In summary:
• Ensure that the marketing plan "happens" — gain credibility by
performance.
• Make the communication simple for people to follow.
• Use Gantt Charts to communicate activities and deadlines and to establish
who is to take responsibility for a certain activity.
• Ensure that you understand the steps involved and the time-frames
necessary to undertake each and every task.
• Negotiate the time-frames with the winemaker, bottling hall manager
or accountant to ensure that they are realistic before you incorporate
them into the plan.
• Communicate performance. Effective feedback is the key to effective
internal marketing of the plan. Once the plan is approved and in place
ensure that you report progress against the plan. This communication
should be to all levels and highlighting the success of the plan and the
contribution of each part of the wine company.
The Marketing • Make available:
Plan — copies of wine press articles
— wine reviews
— copies of brochures and advertisements
— new labels
• Allow the staff to taste the new vintage wines, any new wine styles or
48 any new products that have been developed.
Where there are shortcomings and performance objectives are not being
achieved, then meetings with the chief executive and the departmental heads
concerned are necessary. These meetings should monitor the assumptions made
by the plan and the wine marketer should be able, using the market information
available, to recommend remedial tactics.

Future plans should incorporate the experiences gained from previous plans
and the planning assumptions should be modified accordingly. Effective internal
marketing will improve the professional and personal effectiveness of the
marketing function. It will also help the different functional areas of the
organisation to work better together to improve the performance of the wine
company.
References
1. Bulletin de l'OIV, Vol. 63, Office International de la Vigne et du Vin, May/June, 1990.
2. Corkindale, D., Balan, P. and Rowe, C.W., Marketing: Making the Future Happen, Nelson,
1989.
3. Edwards, F. and Spawton, T., "Pricing in the Australian Wine Industry", International
Journal of Wine Marketing, Vol. 2 No. 1, 1990.
4. Day, G.S., "Diagnosing the Product Portfolio", Journal of Marketing, Vol. 41, 1977, pp.
29-38.
5. Ansoff, I., Corporate Strategy, Penguin, 1968.
6. Porter, M.E., Competitive Advantage, Free Press, New York, 1985.
Further Reading
Balan, P., Creating Achievable Marketing Plans, Polyglot Enterprises, 1990.
Decanter Magazine Ltd, Priory House, 8 Battersea Park Road, London, UK.
International Journal of Wine Marketing, Vol. 1 No. 1 and No. 2 and Vol. 2 No. 1, MCB University
Press Ltd, Bradford, UK.
Wine and Spirit International, Ervo Publishing Co. Ltd, London, UK.
Wines and Vines, The Hiairing Company, 1800 Lincoln Avenue, San Rafael, California, USA.
Wine Spectator, M. Shanken Communications Inc., 387 Park Ave South, New York, USA.
for Wine
Marketing Planning
This article has been cited by:
1. Claudio Aqueveque. 2015. The influence of experts' positive word-of-mouth on a wine's perceived
quality and value: the moderator role of consumers' expertise. Journal of Wine Research 26, 181-191.
[CrossRef]
2. Mark A.A.M. Leenders, Yanto Chandra. 2013. Antecedents and consequences of green innovation
in the wine industry: the role of channel structure. Technology Analysis & Strategic Management 25,
203-218. [CrossRef]
3. Claude Petit, Werner Konold, Franz Höchtl. 2012. Historic terraced vineyards: impressive witnesses
of vernacular architecture. Landscape History 33, 5-28. [CrossRef]
4. Johan Bruwer, Isabelle Lesschaeve, Benjamin L. Campbell. 2012. Consumption dynamics and
demographics of Canadian wine consumers: Retailing insights from the tasting room channel.
Journal of Retailing and Consumer Services 19, 45-58. [CrossRef]
5. Johan Bruwer, Anthony Saliba, Bernadette Miller. 2011. Consumer behaviour and sensory preference
differences: implications for wine product marketing. Journal of Consumer Marketing 28:1, 5-18.
[Abstract] [Full Text] [PDF]
6. Nelson Barber, Barbara A. Almanza, Janis R. Donovan. 2006. Motivational factors of gender, income
and age on selecting a bottle of wine. International Journal of Wine Marketing 18:3, 218-232.
[Abstract] [Full Text] [PDF]
7. Robert E. Morgan, Georgios Sarris. 1992. The International Marketing of Cyprus Wines: A Case
Example — The UK Market. International Journal of Wine Marketing 4:1, 44-63. [Abstract] [PDF]
8. A.L. Spawton. 1991. Grapes and Wine Seminar – Prospering in the 1990s: Changing Your View of
the Consumer. International Marketing Review 8:4. . [Abstract] [PDF]
9. A.L. Spawton. 1991. Grapes and Wine Seminar — Prospering in the 1990s: Changing Your View
of the Consumer. International Journal of Wine Marketing 3:1, 32-42. [Abstract] [PDF]

Ejercicios Tasas de Interes

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Ejercicios Tasas de Interes

Uploaded by

Copyright:

Available Formats

International Journal of Wine Marketing

Marketing Planning for Wine

To copy this document: permissions@emeraldinsight.com

*Related content and download information correct at time of

changing consumption patterns in the

dans le comportement des consommateurs de vin. Les facteurs évoqués sont

The Marketing Planning for Wine handbook is designed to supplement the

While it is certainly true that special knowledge is required to make wine,

The Wine Economy

Yugoslavia 576 588 -12

France 1,300 1,327 W. Germany 934 928

Sweden/Norway 134 124

Table II. Note variations owing to approximations

Country 1988 1987

Italy 6,186 7,587

Table III. Note variations owing to approximations

What is Wine Marketing?

resources with a customer's needs and wants. This is illustrated in Figure 1.

The Marketing Process

Selling Inwards on the Delivering Everybody Maximum Primarily

Marketing Outwards on Satisfying Specific Customer. Through co-

The Selling and

The key ingredients of marketing information needed for decision making in

cigarette industry demonstrates that when advertising has been banned

Advertising + Promotion Service

Operational Warehousing and distribution Commercial

wine-producing countries and across international boundaries. This trend is

The Two Wine Markets

The Wine Consumer

Marketing Mix Factors Fine Wines Beverage Wines

Consumer Expectations and Risk-Reduction Strategies

is governed by expectation and risk-reduction strategies during the purchase

To communicate these benefits to the consumer they are made tangible by

A review of success factors amongst wine companies is the consistency of their

as on licensed premises, e.g. wine bars and restaurants.

The majority of the communications spending in the wine industry is devoted

Branding and Positioning

in the mind of the consumer. The objective of positioning is to position a product

sections. A retail chain in the United Kingdom is experimenting with a chain

Telephone selling and personal selling, to be successful, need:

Consumer Sales at the Winery

government distribution are:

Your Standard "1992 Response" Euro-memo

This chapter is based on an article written by Abby Day.

(2) Who are our customers?

It seems, on reflection, that "1992" would ease one criterion of segmentation,

(3) Who are our customers?

age, income, ownership of Audis, or what? What motivates these customers?

As a consequence, enterprises that continue to adopt a regional, national, or even

(2) we are witnessing the emergence of global enterprises;

38 Why is Marketing Planning Essential?

• concentration of wholesale and retail outlets

to achieve, and what they need to do in order to achieve these aims.

Analysis of Strengths, Weaknesses, Opportunities and Threats

How to Prepare a Marketing Plan

Marketing objectives and strategies

Product Price Promotion Distribution

may also be avoided.

• the long-term grape supply

A Comparative Analysis of Industry Success Factors and the

Customer and Consumer Behaviour

Analysis of the Product Portfolio

The Marketing Objectives

• Volume sales in litres.