Chapter 12-14: Marketing Strategy, Implement/Monitor, Options Flashcards
(40 cards)
Describe marketing mix
- combination of factors/elements that must work together for the strategy to work.
- if any one element is weak, this weakens entire marketing effort
- a common way to identify these factors is the 5Ps - product, price, people, place, promotion.
Describe PRODUCT as part of the marketing mix
- PRODUCT = the object/service/system that’s being marketed (for wine, the liquid + packaging & branding)
- marketing should communicate characteristics of the product that’ll appeal to target consumer & how it’ll satisfy needs/wants
- presentation of product (btl, label) should be designed to appeal to target consumer
- marketing should describe experience that the product will deliver (story of wine)
- in saturated wine market (already enough product to satisfy needs, few gaps in market), competition strong, so need to clearly explain how product diff from competitor (eg higher quality, better value, organic, vegan, fairtrade etc)
saturated market
when there’s already enough products to satisfy consumers needs and few gaps in the market
Describe PRICE as part of the marketing mix
- PRICE = the amt the consumer pays for product; includes price on shelf, plus cost like delivery, discounts + cost (time/effort) consumer willing to go in order to buy product
- ideal world, pricing would strike balance btw producer making reasonable profit & price that sufficient amt of ppl willing to pay (but issues w/ supply & demand & cost through supply chain effect this)
- comp may set new product price low (or enter market on price promo) to undercut competition & rapidly reach wider section of market - expectation that consumer will switch to new brand b/c of lower price (penetration strategy), but attempt to raise price later may not be successful
- some producer may reduce price slightly (9.99 vs 10) so retailers can hit desired price point
penetration strategy
When company sets price relatively low for a new product (or enter market on a price promotion) to undercut competition, make wine more appealing & rapidly reach wider section of market. Lower price used to persuade price conscious customer to try new wine, with expectation that consumers will permanently switch to new brand (and reject their preferred brand)
attempts to increase price later may not be successful as customers feel product now offers less value for money
what have academic studies shown about PRICE?
- studies show consumers strongly influenced by price when making decision - brain scan show more pleasure from drinking what they think is more expensive than same wine if they think its cheap
- studies show psychological importance of certain price points; ppl more likely to buy wine priced at 9.99 USD than 10USD, bc they instantly associate the first number with ‘9 USD’ even though its more close to 10. Produces may drop price slightly to help retailers hit desired price point
Describe PEOPLE as part of the marketing mix
- people interpreted diff ways;
- some refer to it as the attitudes & behaviors of target consumer, other aspects of marketing mix need to be tailored accordingly (if targets arent active on social little to be gained running social campaign)
- some refer to it as the relationship btw company, its staff, partners, customers, and includes aspect such as employee attitude & skills, and customer service (whether that consumer is target consumer or a business customer like a distributor)
- producers should ensure sufficient knowledge/trained staff to sell product to final consumer or to distributors/retailers. also should work with PR agency & distributors who share their image & vision
- may require additional resource from producer - conduct masterclass for distributor staff or retailer to highlight brand image & story & products
Describe PLACE as part of the marketing mix
- place = where the product is sold
- need to identify where target shops & focus on those outlets
- high involvement - focus on specialist retail, premium supermarkets, specialist wine bar, casual to fine dining; they’re keen to try new, so good place for lesser known region/grapes
- low involvement - lower price points, simple aroma/flavor profile, buy at supermarket, eat/drink in general bars & non-destination restaurants
- wines preferred by high involvement often sold through specialist intermediary vs low involvement to larger intermediaries
- if multiple market, producer may need wines w/ diff aroma/flavor profile/sweetness/alc as taste vary by country
- choice of market: legsilation, taxation, duty, restriction (3 tier or monoploy) or price-sensitive markets make some markets less attractive
- may choose to focus on more vs less mature market
Describe 5 types of market maturity & examples
- Mature market: where wine have reached its potential w/ stable/decline vol (DE, FR, UK)
- Established market: market w/ strong historical growth that’s tailing off (SA, IT, HK)
- Growth market: wine mainstream product and/or experience growth (US, CAN, Brazil)
- Emerging market: wine experience growth & show potential from relatively low base (China, Russia, Turkey, Taiwan)
- New emerging market: wine relatively new & unknown, but showing potential (India, Malay, Phillipines, Thailand)
- matured/establish show greatest saturation & least growth, but have reliable trade structures, route to market, established wine market
- emerging/new emerging have most potential for growth, but no structure in place for easy route to market
Describe PROMOTION as part of the marketing mix
- as pscyhographical & behavioral segments include ppl from diff geographical location & variety of demographic traits, single type of promo not enough to appeal to whole segment; campaign should consist of variety of elements to connect w/ as many members as possible
- promoting in multiple country, need to be aware of legal constraints of each
- divided into those that take place at POS and those that happen elsewhere
List 6 types of promotions at point of sale
- Price promotions
- Competitions
- Limited edition packaging/presentation
- Consumer tasting
- Staff incentives
- Staff training
Describe price promotions. Give examples. Discuss benefits & risks.
VARIOUS TYPES OF PROMOS:
* Limited time price reduction: specific amt or % discount; seasonal sales (summer wine, xmas), discount on certain days (hospitality encourage business on quieter days), discount for certain groups (students, armed force)
* Multi buy or vol discount- price isn’t reduced itself but ppl play less if they buy more than one: BOGOF, Buy 1, get half price; buy 3 for price of 2; save amt or % when spending over certain amt or buying certain no. of btls; (hospitality) buy 2 large glasses, get rest btl free
* Link saves: offers ppl who buy 1 product a reduce price on another prodcut fr diff category (eg wine full price, but reduction on food)
* Free delivery for orders over ceratin amt, blts or price
multi buy/vol discount, link save, free delivery - less devaluing of product image
BENEFITS:
* [goal] can increase sales of existing products, gain vol sales for new product, attract new cutomer; sometimes used to shift old stock or discontinued lines (bin ends)
* post-promo sales will still be higher than before promo period (if promotion successful)
* increases brand awareness
* link saves can encourage cusot to try other types of products, increase overall sales
RISKS:
* promo doesnt build consumer loyalty to product/retailer when price returns normal; consumer see price promo as way to buy products cheaply & switch to next similar product on promo - post promo sales won’t be higher
* price reduction may damage image of product in mind of consumer - may view reduce price as ‘correct’ price and not willing to pay full price once promo over (Champagne very concerned about promo in British supermarkets). less so for multi-buys & vol discounts
* multi-buy/vol discount seen to encourage increased alc consumption (banned in Sweden, Scotland)
* producers can be expected to cover cost of price promotions, so may lose revenue
What are bin ends?
price promotions used to shift old stock or discontinued lines
Describe competitions as a type of promotion
- can encourage ppl to buy a particular product
- ex: buy blt, chance to enter a draw to win a trip (sweepstakes)
- opportunity for comp to collect consumers contact details, use for further promotions, subject to data protection laws
PRO: wine appears more attractive given possibility to win something; can increase sales
PRO: collect cutomre details
CON: expensive way to encourage sales, few ppl will benefit from prize
Describe limited edition packaging/presentation as a type of promotion
- some offer exclusive, elaborate design presentation case for super premium wines
- PRO: prized by investors, contributing to luxury brand image, seen as collectible/desirable
- others create limit ed package linked to major events (world cup, olympic games); can help promote brands image
- PRO: packaging is distinctive, can help raise brand awareness
- however, limited ed package seen by most consumer as little more than a bit of fun; some may be introduced to brand this way, then buy again, but doesn’t tend to increase sales in long term (as wine is not typically presented in this way)
Describe/evaluate consumer tastings as a type of promotion
- retailers can offer in store tasting (eg to introduce new product or vintage)
- cost of opening a bottle, but many distributors/producers willing to provide a few free for tastings
- studies show tastings can increase sales
- tastings helpful for cust, esp low involvement, can try before you buy; even if they don’t buy, they may buy something else while they are there
- many distro comp offer to host in-store tasting to promote wine, sometimes arrange for winemaker to come
- restaurants also now host wine tasting dinners, food&wine pairing
ADVANTAGES:
* encourage low involvement cut to buy wines they may have previously avoided b/c didn’t know what it tastes like
* encourage brand ENGAGEMENT - staff tells brand story, allow customer to remember and relate to them; facilitate 2 way enagement - producers & brand reps can get feedback from cutomers
* encourage customers to come to retail outlets, may buy other wines
CONS:
* bottle will have been opened and give away for free, which coud have been sold
Describe staff incentives as type of promotion
- staff may be offered incentive to sell more of a product (eg whoever sell most of a champagne brand get expense paid trip to region)
- usually funded by producer or relevant trade body
- some markets (China) consider this bribery/unfair competition, so illegal
- only appropriate where there’s personal contact w/ staff & consumer (eg specialist wine shop/bar, fining dining), not for supermarkets
Describe staff training as type of promotion
- staff may be trained/education on a product, provided by retailer, distributor or producer
- educate & allow staff to taste helps them promote product w/ more confidence/enthusiam, enable them to tell the story
- only appropriate where there’s personal contact w/ staff & consumer (eg specialist wine shop/bar, fining dining), not for supermarkets
What are the pros & cons of staff training & staff incentives
PROS:
* educating staff help thems effectively sell product, make it more appeal to consumer
* staff can be encouraged to create more sales w/ incentive, making staff more invested in their work
CONS:
* some regions see it as bribery, so illegal
* may be costly initially to train staff to a high level
What is the aim of promotions for high vol, inexpensive branded Chard?
- raise awareness of brand w/ large no. of ppl (many which are low-involvement)
- give brand advantage agaisnt immediate competitors
What is the aim of promotions for low vol, premium Cab?
product aimed at small no of wealthy and/or high involve consumers, who see wine as highly desirable experience, an investment or status symbol
What are the likely, possible, and unlikely POS promotions for high vol, inexpensive branded Chard?
- price promotion
- competition
- limited edition packaging
- consumer tasting
- staff incentive
- staff training
LIKELY:
* price promotion: make product more competitive, attract new customers to turn into regulars; attract large no of ppl as large vol to sell
POSSIBLE OPTION:
* competition: inexpensive price mean consumer may be persuaded to buy for chance of winning
* limited ed presentation (retail): can link to major events, if consumer enjoy event, can give competitive advantage ove similarly priced product
* staff incentives (hospitality): not for supermarkets b/c no personal contact btw staff & consumer, but hospitality an option
* staff training (hospitality): can give staff info to promote wine w/ customers; unlikely in supermarket no contact btw staff & consumer
UNLIKELY:
* consumer tastings: wine sold in supermarket/non destination, so lack wine-trained staff for this
What are the likely, possible, and unlikely POS promotions for low vol, premium Cab?
- price promotion
- competition
- limited edition packaging
- consumer tasting
- staff incentive
- staff training
LIKELY:
* staff training: inform about product to speak about it knowledgably
POSSIBLE OPTION:
* limited ed presentation (retail): presented in exclusive packaging, contribute to luxury brand image & investment potential
UNLIKELY:
* price promo: would devalue brand, detrimental to luxury image; small vol produced also rules this out
* competition: high price mean ppl unlikely to buy for chance of winning
* consumer tastings: small amt makes unlikely; more likely to rely on fine wine retailers offering tasting which cust. pay offering cost of tasting
* staff incentive: vol limited, spread across many specialist outlets, little to sell
List 11 types of promotions away from POS
- Advertising - TV, Cinema, Radio, Press, Billboards
- Digital advertising - Online Platforms
- Social Media
- Websites
- Smartphone Apps
- Reviews & Awards
- Wine Tourism
- Public Relations
- Sponsorship
- Events & Festivals
- Free Merchandise
