Flashcards in D2C12 Devising Marketing Strategy Deck (48)
What is the marketing mix?
Elements of the marketing strategy, a combination of factors that must work together for the strategy to work
5Ps: product, price, people, place, promotions (6th P is packaging)
What is the product in the context of marketing mix?
The product being marketed, including all packaging and branding and any value-added features, e.g., gift wrapping in a wine shop and a winery’s wine club
What should marketing communicate with regard to the product?
>Characteristics that will appeal to target consumers and how it will satisfy their needs and wants
>Presentation appeal to consumer
What does saturated market mean?
>There are already enough products to satisfy consumers’ needs and there are few gaps in the market
>Strong competition between relatively similar products
What should companies try to explain with regard to the product in a saturated market?
>How their product is different to that of competitor, e.g., better quality, better value for money, organic, Fairtrade etc
What is price in the context of marketing mix?
>The amount which a consumer pays for a product
>Includes price of the product on the shelf, and any additional costs such as delivery and discounts
>Also includes cost in time and effort which the consumer is willing to go to in order to buy the product
List some pricing strategies
>Penetration strategy: Low price for new product - undercut competition and rapidly reach a wider section of the market, expecting consumer to permanently to switch to new brand. May be difficult to raise price later
>High price: linked to more pleasure. Consumer with low wine knowledge buying for someone with more knowledge are likely to buy more expensive bottle
>Certain price points have psychological importance: 9. Producer may reduce price slightly so retailers can hit desired price point
What does people mean in the context of marketing mix?
>Attitudes and behaviours of target consumers;
>Relationship between company, staff, partners, customers, and includes aspects such a s employee attitudes and skill, and customer service
Key features of people
>Ensure to have sufficiently knowledgeable and trained staff to sell
>Any companies, such as distributors and PR, share producer’s image and vision
>Present consistent message at all stages of supply chain
What is place in the context of marketing mix?
Where the product is sold (e.g. bar?, supermarket?, specialist?)
List elements to consider regarding place in the marketing mix
>Where target market shop, supermarkets? Specialist wine shops?
>Identify most effective distribution channels: bulk? Specialist intermediaries?
>Consumer tastes change between countries: produce wines with different aroma/flavor, sweetness and alcohol
>Legislation, taxation and duty or restriction on distribution make some markets less attractive
Briefly compare mature and emerging markets
>Mature and established markets show the greatest amount of saturation and least growth; reliable trade structures and routes to market; established wine culture
>Emerging and new emerging markets hold potential for most growth; carry most risk; often do not have the structures in place for an easy route-to-market
List major types of market, describe and give examples according to Wine Intelligence’s market maturity
Mature market: markets where wine appears to have reached its potential with stable or declining volumes. E.g., Germany, France, Switzerland, UK
Established market: markets with strong historical growth which is tailing off. E.g., Australia, Netherlands, Ireland, Japan
Growth markets: markets where wine is a mainstream product and experiencing growth. E.g., USA, Canada, Italy, Poland
Emerging markets: markets where wine is experiencing growth and shows potential from a relatively low base. E.g., China, Russia, Brazil
New emerging markets: Markets where wine is still a relatively new and unknown beverage, but showing some potential. E.g., Malaysia, Philippines, Vietnam, Thailand
What is promotion in the context of marketing mix?
All methods used to promote a particular product
Two categories of promotional activities
Those take place at point of sale
Those happen elsewhere
List promotions at POS
>Limited edition packaging/presentation
>Staff training and incentives
The aim of price promotions
>Increase sales of existing products, gain volume sales for new products or attract new customers
>Shift old stock or discontinued lines
What are bin ends?
Old stock or discontinued lines
List major types of price promotions
>Effectively reduce the price of a product, usually for a limited period
>Multi-buy or volume discount
>Discount on delivery cost
Examples of price reduction
Specified amount or percentage discount on all or selected items
Discounts on certain days
Discounts for certain groups of people
Give examples of multi-buy or volume discount
Buy one get one half price
Buy three for the price of two
Save a specified amount when spending over a certain amount, buying a certain number of bottles or more
Buy two glasses and get the rest of the bottle free
How to fudge the success of price promotion
If price reduction has worked, although sales will drop once it has increased again, they will still be higher than they were before the promotional period
Risk of price reduction
>Promotion does not build consumer loyalty to the product or even the retailer, when price returns to normal
>Consumers view promotion simply as ways of buying products cheaply and switch to the next similar product to be on promotion
>Damage image of product in the mind of consumer (direct reduction, not multi-buy)
>Multi-buy and volume discounts encourage excessive alcohol consumption
What are "link saves"?
When consumers can buy one product at a reduced price alongside another product from a different category
Adv and disadvantages of price promotion for producers
> Highly beneficial: increase sales, brand awareness
> Dis: big retailers expect producers to meet the cost of promotions including loss in sales revenue, meaning that they may only be financially viable for large producers
Adv and disadvantages of free merchandise to producers
> Adv: generate sales without the need to reduce price of product
> Dis: available to everyone, rarely seen as anything valuable by consumers, unlikely to create many additional sales
Adv and disadvantages of limited edition packaging/presentation
> Contribute to brand image: exclusive, elaborately designed presentation cases for particular wines; packaging linked to sponsorship of major events promote brand image if regular
> Dis: most seen by consumers as little more than a bit of fun; may be introduced to the brand in this way and buy again, but does not tend to increase sales in the longer term
Advantages of competitions to producers
> Encourage to buy a product because it is a more attractive, higher-value proposition as it gives the chance to win something exclusive; collect consumers’ contact details, which are used for further promotion
Adv and disadvantages of consumer tastings
> Adv: studies show that offering tastings increases sales; consumers, especially low-involvement, nervous about buying when they do not know if they will like it. Many will buy now and future, those who don’t may buy something else
> Dis: cost of bottles which could have been sold, sometimes provided by retailer, sometimes by distributor and producers