Marketing strategy and analytics

Question 1

Define the aspect that plays an important role in the forming of Pricing Strategy

Answer 1

Balance between producer’s desired /reasonable profit and the price sufficient number of consumers is willing to pay. It is also affected by various factors contributing to the price of wine.

Question 2

Define Penetration strategy

Answer 2

Low price set (or entering with price promotion) to undercut competition and rapidly reach a wider section of the market. BUT raising price feels like less value for money.

Question 3

Define High Involvement consumers

Answer 3

1. buying wine at independent specialist retailers or premium supermarket chains
2. consuming at specialist wine bars and fine dining erstablishments
3. Open to wines from lesser known regions and grape varieties

> increasingly attracted to deep discounters offering special limited supply

Question 4

Define Low Involvement consumers

Answer 4

1. Looking for wines at lower price points with simple aroma/flavour profile
2. buying wines at supermarket
3. consuming at general bars and non-destination restaurants

Question 5

Describe the options for Promotional activities at the point of sale.

Answer 5

1. Price Promotions > multi-buy, seasonal sales, bin-ends
2. Merchandise or Competitions > collecting consumers’ contact details (data protection laws!)
3. Limited Edition Packaging/Presentation > ‘fun’, promoting brand’s image
4. Consumer Tastings > introducing new products/vintages
5. Staff incentives > funded by producer of trade body
6. Staff Training > esp. specialist wine shops and fine-dinings

Question 6

Explain the risks of using price reduction as promotion method

Answer 6

1. not building consumer loyalty > consumers aiming on buying cheaper products
2. damaging image of the product e.g. Champaign price promotions in british supermarkets

Question 7

Describe 2 types of price promotion carrying less risk of devaluing product image

Answer 7

1. Link saves > discount on product from a different category when bought icw other product
2. discounts on delivery costs

Question 8

Explain how offering staff incentive works as promotion at point of sale

Answer 8

Incentive, usually offered by producer or trade body, to sell more of a particular product, e.g. expenses-paid visit to region. NOTE: considered as bribery or unfair competition in some markets (illegal in China)

Question 9

Describe the options for Promotional activities away from the point of sale.

Answer 9

1.TV / Cinema > advert or product placement > expensive
2.Radio > less expensive, but lack of images = less memorable
3.Press advertising > right print media for target consumer
4.Billboards > along side of roads or at railway stations
5. Digital Advertising > Online Platforms > Global audience
6. Social Media > dialogues + reaching young people
7. Websites > providing consumers different levels of info
8. Smartphone Apps > for high-involvement consumers
9. Reviews, Critical scores and Awards > for lower-involvement consumers
10. Wine Tourism > engagement with public
11. Public Relations >
12. Sponsorship > displaying logo or rights of exclusivity in venues
13. Events and Festivals > reaching new customers
14. Free Merchandise > increasing brand awareness

Question 10

Describe the difference between PR and advertising

Answer 10

advertising seeks to draw attention to and promote a specific product or range of products,

PR is aiming to give business the most favourable image possible in the mind of consumers

Question 11

Describe the different activities concerning PR

Answer 11

1. representatives of the company attending public events or appearing on TV or radio news programmes to comment on issues relevant to the business
2. press releases
3. newsletters
4. social media

ALSO important: social / corporate responsibility policy

Question 12

What is the particular form of PR used by larger companies?

Answer 12

brand ambassador, featuring ads / videos on website: sharing values / image company

ALSO: key opinion leaders (SM influencers) hired > peer recommendation

Question 13

Shortly discuss Sponsorship as a promotional activity

Answer 13

Promotional activity away from point of sale, especially occuring at sporting and cultural events by which producers provide financial support in exchange for
1. displaying brand logos on billboards or participants’ clothing
2. exclusive rights to be served at venues
3. exposure on screen / television.

*In most countries treated as a form of advertising = same legal restrictions. Can also be controversial, e.g. alcohol promotion at sport events

Question 14

Shortly discuss Wine Tourism as a promotional activity.

Answer 14

particularly beneficial for new producers / up-and-coming wine regions:
1. possibility to engage with public
2. increasing likelihood of sales
3. Bringing together other tourist businesses e.g. wine trails (cycle tours at Alsace), tourist attractions (Napa Valley wine train)

NOTE:
1. high costs on developing infrastructure
2. additional staff needed
3. time consuming, beside day-to-day operations

Question 15

Shortly discuss the use of Websites as a promotional activity

Answer 15

1. globally communicating, including less prioritized markets
2. different levels of information: telling the story, product details, food pairing suggestions, details of upcoming events, reviews, online shop
   BUT
3. effective website needed, easy to navigate
4. part of brand image > consistent with marketing strategy
5. SEO for good search results
   4.concern of access by people below drinking age

Question 16

Explain how Social Media can be used as an advertising channel and what point should be considered

Answer 16

1. Providing dialogue with consumers
2. reaching younger consumers
3. beside adverts / reviews and other promotions sharing other activity is also important
4. choice of appropriate channel e.g. younger people on Youtube / Instagram
5. increasing importance people’s experience / peer reviews
6. dealing with negative content/ review / inappropriate materials

Question 17

Describe the aspects to be considered when setting up an advertising campaign

Answer 17

1. powerful > remembered even long after withdrawal
2. expensive > depending on market reach, need of advertising agency
3. content also suitable for international casting > different cultures, message lost in translation
4. restricting laws on advertising alcohol differing per country e.g. total prohibition (Qatar) or strict controls (Loi Evin)
5. often use of combination of channels

Question 18

Shortly Describe the options by which companies can carry out marketing.

Answer 18

1. in-house marketing team at larger companies
2. outsourcing marketing to PR company or advertising agency
3. becoming member of industry association (VDP, Germ) or generic trade body (Wines of Australia) or informal trade grouping (VIGNO) in exchange of membership fee > benefitting from increased exposure as part of larger portfolio
4. smaller companies do it themselves > limited marketing activity

Question 19

Identify the different factors for devising a marketing strategy.

Answer 19

Referring to the 5 P’s (=Marketing Mix):

1. Product = wine:
   - Liquid > characteristics + needs / wants target consumer
   - Packaging > appealing to target consumer
   - Branding > experience > story behind product
   Extra important in ‘saturated’ wine market
2. Price = product itself + delivery/ discounts/ time&effort consumer
   - Different pricing strategies, e.g. Penetration strategy
   - Purchase is price driven, e.g. pleasure/price and psychological pricing
3. People, can refer to:
   - Behaviour > consumers using different selling channels
   - Relationship between company, staff, partners, customers
4. Place > where the product is sold > retail sectors
   Place in market > Wine market maturity (5 types) > growth potential, wine culture, route-to-market
5. Promotion
   - At point of sale >
   - Away from the point of sale

Question 20

What is strategic fit?

Answer 20

Defining to what extent various factors of a given marketing objective favour the organisation’s succes in achieving that objective.

Question 21

In what ways can the SWOT tool help an organisation

Answer 21

Identifying the internal and external factors for achieving an objective and gaining insights concerning
1. The strategic fit
2. What changes to be made concerning organizational resources and capabilities to improve the strategic fit
3. Possibilities of managing risks resulting from threats.

All of which concluding the achievability of an objective.

Question 22

Explain the value-curve analysis as a business tool

Answer 22

A method by which selected various factors differentiating a product within an particular market are analysed, defining the potential of an opportunity

Question 23

Define the ways to measure the success of a marketing strategy

Answer 23

1.value of sales / profits / market share

2. marketing research >
   A. consumers feedback about objective marketing strategy
   B. other complex processes including eye-tracking and viral marketing research (Social Networking Potential)

Question 24

Explain why defining the objectives is a vital part of creating a marketing strategy

Answer 24

1. Clearly defined objectives will help people in different parts of the company understand their role in the marketing process
2. Easier to analyse the results of the strategy

Question 25

What are the 4 aspects (key areas) to consider for defining the objectives of a marketing strategy? Explain them

Answer 25

1. type of marketing strategy: A. Undifferentiated/ Mass > appealing to whole market or a large section B. Niche > specific segment of market C. Multiple > numerous segments with one brand OR several brands each targeting different segments 2. aim of marketing strategy: A. new product B. Increase sales/ market share/ brand awareness/ brand identity C. communicate improvements to existing product D. attract new consumers 3. way of measuring the success of a strategy 4. short-term OR long-term strategy ALSO: setting a marketing budget, in reference to the profits a marketing campaign is expected to produce.

Question 26

Describe and give examples of PESTEL-factors en what are they used for?

Answer 26

External business-organisational factors, used for defining Opportunities and Threats 1. Political > discouraging consumption / promoting cultural products / financial subsidies 2. Economic > A. currency affecting competition and costs B. Challenging foreign exchange instabilities C. economical position affecting consumption behavior 3. Social (cultural / demographic) > A. changing trends in consuming generation B. cultural attitudes affecting consumption C. availability of vineyard labour D. attitudes to global trade, use of synthetic chemicals and other 4. Technological > affecting quality but also uniqueness 5. Environmental > A. Climate change affecting viticulture B. conversion to alternative land use C. affecting logistics / waste & energy management / use of synthetic chemicals 6. Legal and Regulatory > A. tightness in restrictions regulation as marketing of product integrity B. increasing regulation requiring skills and resources C. affecting choices and possibilities producers

Question 27

Define the 5 types of markets within the wine market maturity model

Answer 27

1. Mature Market > potential reached, stable or declining volumes > EX. Germany, France, Switzerland, UK 2. Established Market > strong historical growth tailing off > EX. Ireland, South Africa, Italy, Hong Kong 3. Growth market > mainstream product and/or experiencing growth EX. USA, Canada, Brazil, Poland 4. Emerging market > experiencing growth + potential from low base > EX. China, Russia, Turkey, Taiwan 5. New Emerging market > relatively new and unknown, showing potential > EX. India, Malaysia, Philippines, Thailand