Chapter 8: Intro to Marketing

Question 1

What the CIM definition of marketing?

Answer 1

• the management process which is responsible for identifying, anticipating and satisfying consumer requirements profitably
• identyfing consumer & understanding their needs & wants is fundamental to success
• for wine marketing, it not just the wine, but the experience it will bring (eg social status, ownership of something perceived as valuation or ROI capital), so marketing should also emphasize how the product can give consumer the experience they are looking for

Question 2

What is the ultimate aim of marketing?

Answer 2

• to create profits, whether through vol of sales (attracting new consumers, encouraging existing to buy more) and/or value of sales (convince consumer that its worth spending more money on this product compared to lower priced competitors)
• successful campaign achieves adequate profit within specific timetable

Question 3

What are the 5 key stages of creating & implementing the marketing strategy?
AKA What are the stages of the marketing process

Answer 3

• 1. Identifying the product/brand to be marketed.
• 2. Identifying the target market.
• 3. Setting the objectives of the marketing strategy.
• 4. Devising the marketing strategy (the ‘marketing mix’).
• 5. Implementing & monitoring the marketing strategy.

not necessarily a linear process steps 2-4 closely interlinked

Question 4

What is SWOT?

Answer 4

• SWOT: Strengths, Weaknesses, Opportunities, Threats
• its a tool used to provide analytical insights into the achievement of any objective
• SWOT identifies factors that are relevant to achieving an objective and divides it into 2 factors: helpful/unhelpful and internal/exteran

Question 5

What 2 factors does SWOT identify that are relevant to achieving an objective?

Answer 5

• is the factor HELPFUL or UNHELPFUL to achievement of chosen objective?
• is the factor INTERNAL to the org (eg resources/capability that would provide competitive advantage) or is it EXTERNAL in the wider biz environment (eg political, economic, sociological, technological, environmental, legal factor or trend?)

Question 6

How are conclusions in SWOT analysis presented?

Answer 6

• Internal: organisational resource/capabilities –> presented as strengths (helpful) & weaknesses (unhelpful)
• External: business-environmental factors & their trends –> presented as opportunities (helpful) & threats (unhelpful)

Question 7

What are ways SWOT tool helps an organisation?

Answer 7

• Strategic fit: for a given objective, to what extent does the various factors favor the org’s success in achieving that objective?
• where there are mismatches btw factors & likelihood of success, what changes could the org make in order to achieve better strategic fit? this is helpful in guiding investment in resources (eg vineyard, equipment, labor) and capabilities (eg expertise to make a style of wine, create attract packaiging, lobby govt)
• where there are threats, how can the resulting risk best be managed? consider likelihood and the size of impact of the risk, and the options to avoid it entirely, reduce probability or impact, transfer the risk (e.g. by purchasing insurance) or accept the risk and budget for its possible impact.
• can also help org to understand that a particular objective is not easily or realistically achievable or to consider pursuing diff objective. insights gained from analysis can inspire ideas for alternative, more achieveable objectives

only analysis on achievability not if ethical or not

Question 8

Identify some of the potential origins of an objective

Answer 8

• someone’s educated (or uneducated) intuition that a particular biz opportunity exists
• an individual’s personal business dream or aspiration
• something generated by other biz tools, such as ones that analyze for unmet gaps in the market (eg value curve analysis)

Question 9

Describe value curve analysis and how it works

Answer 9

• business tool used to analyse unmet gaps in the market
• an analyst selects various factors that differentiate products within a particular market (eg price, conveninece, packaging, prestige, history, environ impact, etc)
• rather than evaluating each factor separately, consumer research is used to identify common clusters of consumer demand
• results may show that there’s clusters of consumer demand are under-supplied or completely ignored by an industry
• an org can size the opportunity and consider whether to develop product or not

Question 10

Provide an example of value curve analysis and the steps after

Answer 10

• many ppl in wine industry assume demand for premium red wine is best met by wines that are dry & complex in flavor
• entrepreneur might conjecture that there’s an undersupplied market for premium red wines that are off dry w/ simple fruit flavors
• value curve research & analysis can confirm this or not
• If opportunity conifmred, next step is for org seeking success with such a product to set specific objective & analyse strategic fit via SWOT anlaysis and use SWOT conclusions to show best way to achieve success

Step 1: educated intuition
Step 2: value curve research to confirm
Step 3: set objective
Step 4: SWOT analysis for strategic fit & then conclusions to show best way to achieve

Question 11

What are considerations when assessing strengths & weaknesses in SWOT analysis

Answer 11

• Consider what tools & resources are needed, what capabilities are relevant
• how does the org compare to others who might pursue same objective
• do its resources & capabilities provide it with competitive advantage?
• can it achieve the objective better, faster, more affordably?

Question 12

What is a resource in SWOT analysis? What are examples in wine industry?

Answer 12

A resource is a ‘thing’ that the org has access to that it can exploit as a tool. Examples in wine production:
* an establish reputation in wealthy, growing markets
* reliable, affordable supply chain relationships
* vineyard in location that favor a particular style of wine
* wine production facilities that are optimised for particular style of wine
* access to reliable, affordable support industries (logistics, bottling, labelling, training of production staff, research, lab analysis)
* strong financial position to enable investment
* internal exerptise/experience, and ability to make best use of these

Question 13

What is a capability in SWOT analysis? What are examples?

Answer 13

A capability is something the organisation is able to do. Examples:
* build strong new brands or grow existing ones (considering all the Ps of marketing);
* scale production volumes up or down in response to changing demand, or change products to follow rapid changes in demand;
* experiment to innovatively develop and launch new products;
* lobby local, regional, national or global political organisations to achieve favourable political outcomes (such as subsidies, favourable regulations, governmental promotion).

Question 14

When considering external factors such as opportunities & threats, what makes a good SWOT analysis?

Answer 14

-ensure the factors that are being considered are:
* real & accurately described
* everything that is most important to consider
* relevant to the objective under discussion

-need to think about how these external factors impact you in the present and future
-research is usually needed to be thorough

Question 15

What mnemonic is helpful to avoid missing anything important external factors?

Answer 15

PESTEL
Political
Economic
Sociological
Technological
Environmental
Legal

Question 16

How do you ensure that an external factor is really relevant in a SWOT analysis?

Answer 16

describe how it is helpful or unhelpful to achieving the objective

Question 17

Give examples of political external factors in SWOT analysis

Answer 17

alc industry is very affected by political involvement, ranging from prohibition & taxes to discourage to financial subsidy & other promotional support for prestigous cultural products

Question 18

Give examples of economic external factors in SWOT analysis

Answer 18

• weak local currency can improve price competitiveness of exports (an opp in big vol brand sector but a threat to prestige luxury sector) and can make it more expensive to purchase equipment that needs to be imported
• foreign exchange instabilities make it hard to plan (threat), but provide opportunities for those that can respond quikcly than competitors (opportunity)
• nationa or global recession reduces consumer purchase power (threat), but could lead consumers away from more expensive comfort products and towards wine (opportunity)

Question 19

Give examples of social external factors in SWOT analysis

Answer 19

• trend where 1 generation avoids drinks favored by parents (can be an opp, but later becomes thread as wine-consuming gen gets older/declines)
• political & legal interventions and cultural attitudes can affect attitude towards alc consumption, including diff ways that various alc bev are viewed
• social factors can affect production - eg trend in availabiity of skill affordable vineyard labor, esp in rural region that losing population to urban cities
• changing cultural attitudes in other areas (attitude to global trade, use of synthetic chems, aesthetics of artifical vs natural, friendship/animosity btw nations) can create threats & opps

Question 20

Give examples of technological external factors in SWOT analysis

Answer 20

• new production techniques, types of equp and analysis can provide opps for increasing quality and decreasing costs (opportunity) but as techniques becomes shared globally, increasingly difficult for a wine to retain uniquness of their local style (threat)

Question 21

Give examples of environmental external factors in SWOT analysis

Answer 21

• climate change impact resulting styel, creating threats in some regions (those that have establishing reputation and style; other that already on hot limit of quality wine production), but can provide oppos for regions on cool margins
• pressure for alternative land use (urban growth, other agriculture, return to nature) can be a threat to some areas, opportunity for others
• environmental change can affect logistics, waste management, use of energy & synthetic chemicals

Question 22

Give examples of legal & regulatory external factors in SWOT analysis

Answer 22

• production & trade more tightly regulated in some regions than others
• increase regulation of trade makes trade more difficult (threat), but can improve relative competitive advantage of an org that has skills, resources, patience to navigate reuglations (opportunity)
• increased regulation of production limits a producers choices (threat), but could be part of a message expressing product integrity (opportunity)
• relaxed production regulations opens new possibilities (opportunity) but could undermine some of the competitive advantage of producers that have optimised their production to tight regulation (threat)

Question 23

What does the SWOT analysis provide insight into?

Answer 23

Having set objective, considered resources/capabilities need to achieve objective, SWOT can provide insight into:
* How achievable is the objective (should it be pursued or not)?
* If pursued, what further investment in resources and capabilities will maximise the chance of success?

Also charts external business environment & identifies factors outside the org that can:
* help (what opps can the org take advantage of?)
* hinder (what threatens success, what can org do to manage resulting risks?)

provides help guidance to any org in pursuit of a business objective