Quiz - Marketing Analysis

Question 1

What is the ultimate aim of marketing?

Answer 1

To create profits through volume and/or value of sales.

• This is either through attracting new consumers or encouraging existing consumers to buy more.
• Alternatively, it’s convincing consumers that it is worth spending more money on this product, compared to its lower-priced competitors.

Question 2

Although the marketing process often isn’t linear, it usually follows a similar pattern. What are generally the necessary steps?

Answer 2

• Identify the product/brand to be marketed.
• Identify the target market.
• Set the objectives of the marketing strategy.
• Devise the marketing strategy (the ‘marketing mix’).
• Implement and monitor the marketing strategy.

Question 3

Depending on the point in the product life cycle, which marketing strategies are usually implemented?

Answer 3

Introduction
The strategy should focus on getting the product into the market and gaining recognition and reputation. Distribution may be limited to a few carefully selected channels to begin with.

Growth
The product should be increasingly widely distributed and aimed at a broader target market.

Maturity or stabilization
The strategy should highlight the differences between the product and the other competing products which, by now, will have entered the market.

Decline
Steps should be taken to extend the life cycle, perhaps by improving the product, updating the packaging, reducing the price to make it more competitive or seeking new markets.

Question 4

What is the purpose of branding wine?9

Answer 4

• To differentiate the product against the others in the market.
• To demand a higher price than a consumer would pay for an unrecognized wine.
• To make the wine recognizable to the consumer and to define a set of consumer expectations about the product - this is achieved through product consistency.
• To create a close relationship between the consumer and the brand and, if possible, cultivate consumer trust in the brand.
• To create a story around the wine.

Question 5

Define ladder branding and identify the kinds of wines that sit within each of the rungs.

Answer 5

Definition: When a brand has a range of the same type of product at different price points and quality levels to encourage the consumer to ‘trade up’ to a more prestigious product. The whole line benefits from the brand identity of the most prestigious product.

Accessible
The Lowest rung, which is most widely distributed and purchased by consumers. Often viewed as the most accessible.

Stretch
Bought less frequently, and usually reserved for special occasions.

Aspiration
Is the most prestigious expression of the brand and often too expensive for most consumers to afford. A luxury purchase.

Question 6

What is the correct description of a soft brand?

Answer 6

Any cue used by a consumer when choosing to buy one product in preference to another.

Question 7

Briefly describe some of the tactics marketers may use to create the idea of a ‘luxury’ brand wine.

Answer 7

• Luxury brand wines are often portrayed as scarce, and therefore rare and hard to purchase, even if this is not he case. Their supposed rarity makes them seem more appealing to consumers.
• The quality of the wine is often emphasized. This could be the grapes, the vineyard/winemaking techniques, or the vineyard’s location.
• The brand may sponsor luxury events to get the wine seen by the public, therefore associating the wine with high-end occasions.
• The wine will be sold at upmarket restaurants and retailers to promote the idea that the wine is exclusive.

Question 8

The value of a brand to its owner tends to be termed…

Answer 8

Brand equity

Question 9

Why do wine marketers try and identify market segments?

Answer 9

• To identify the types of consumers who might be interested in their product.
• To make sure they’re targeting the correct consumers with their product.
• Because it’s not profitable to design and produce a specific product for every individual consumer.
• To understand the behaviors of the consumers who are likely to be interested in their product.

Question 10

Which categories and variables are often considered when identifying market segmentation?

Answer 10

Geographic:
* Rural or urban home
* Country of residence

Demographic:
* Age
* Income
* Occupation
* Level of education

Psychographic:
* Hobbies and interests
* Values and beliefs

Behavioral:
* Level of brand loyalty
* When they buy wine
* How often they buy wine and in what volume
* Level of interest in wine

Question 11

Define high-involvement consumers and low-involvement consumers with regard to wine sales.

Answer 11

High-involvement consumers:
Have a deep interest in the wine they drink, are keen to try new products and tend to spend more on wine.

Low-involvement consumers:
Have little interest in the detail of what they drink, stick to a few products which they know and are unlikely to spend much on the wine they buy.

Question 12

Hall has attempted to split wine consumers into three segments. Match the definitions with the type of consumer.

Answer 12

wine lovers
Those with a great interest in, and knowledge of, wine; high income and high level of education.

wine-interested
Those with a great interest in wine, moderate wine knowledge, university-educated with moderate income

wine curious
Those with a moderate interest in wine but limited knowledge, moderate income and medium level of education; they see wine as an opportunity to maintain social relations.

Question 13

Wine Intelligence has created a series of models of consumer segments for various markets, including the UK, the USA and China. What are the segments that are distinguished?

Answer 13

Kitchen Casuals
One of the oldest, very infrequently drinking segments, they have little interest in the category.

Social Newbies
The youngest segment, drinking fairly frequently and rely on recommendations due to lack of knowledge.

Engaged Explorers
Younger, confident wine drinkers who enjoy discovering new wines.

Premium Brand Suburbans
Mid to older aged, frequent wine drinkers, lower spending but very knowledgeable.

Contented Treaters
Infrequent, but high spending drinkers, who know what they like

Senior Bargain Hunters
Most infrequent and one of the oldest segments with good knowledge due to a long time in the category

Question 14

What is one of the main problems with segmentation models?

Answer 14

Not all consumers fit neatly into one segment.

Question 15

Describe the most important market research methods:

Answer 15

Survey
A series of questions designed to investigate the opinions, feelings, actions or behaviours of a large group of people.

Focus group
A small group of people drawn from the relevant consumer segment, brought together to discuss and comment on the topic being researched.

Interviews
One-to-one discussion of the topic being researched.

Observing consumer behaviour
Monitoring and analysing the behaviour of target consumers.

Secondary research
Market research is carried out by using data already available in the public domain or available as a report from a market research company.

Question 16

How can consumer behavior be influenced by marketing?

Answer 16

• Marketing can highlight to the consumer’s attention something that they need or want.
• Letting consumers know where they can buy the product.
• It can highlight the selling points of the product (whether that be a luxury status, the fact that the grapes were organically grown or a competitive price).
• Allows the consumers to evaluate the alternatives available and the final purchase decision.
• Consumer buying patterns can be influenced by factors such as the lighting, music or decor in a shop or restaurant.

Question 17

What are the three broad types of marketing strategy and which parts of the market do they target?

Answer 17

Undifferentiated or mass
appeals to the whole market, or a large section of it, with a single product; for example, many branded wines available in supermarkets and other large retailers.

Niche
aiming a product at a specific segment of the market; many wines are niche products.

Multiple
either appeals to numerous segments with one brand (each segment will potentially require a different marketing approach) or launching several brands each targeting different segments.

Question 18

Which could be possible aims of a marketing strategy?

Answer 18

• increase sales / market share
• launch a new product
• communicate improvements to existing product
• attract new customers
• improve brand awareness & brand identity

Question 19

The factors that dictate marketing strategy are often referred to as the 5 P’s. What are these 5 P’s?

Answer 19

• Product
• Price
• People
• Place
• Promotion

Some marketers omit ‘People’ and refer only to the ‘4 Ps’. Others use the ‘7 Ps’, adding Physical Evidence and Process

Question 20

Give brief descriptions for the 5 Ps.

Answer 20

Product
The item being marketed, including all packaging and branding and any value-added features; for example, gift wrapping in a wine shop and a winery’s wine club.

Price
This is the amount which a consumer pays for a product, including any additional costs such as delivery as well as discounts. It also includes the cost (in time or effort) which the consumer is willing to go to in order to buy the product.

People
* Sometimes this means the attitudes and behaviours of the target consumer
* Others it refers to the relationship between the company, its staff, its partners, and its customers, and includes aspects such as employee attitudes and skills, and customer service.

Place
This relates to where the product is sold. A company needs to identify where its target market shops, such as supermarkets, deep discounters, specialist wine shops or online, and focus on those outlets.

Promotion
This covers all the methods used to advertise a particular product.

Question 21

If a market already has enough products to satisfy consumers’ needs and there are few gaps for new products, it’s often described as __________ .

Answer 21

saturated

Question 22

What is penetration strategy in relation to new wines?

Answer 22

• A wine may be introduced to the market at a lower price than it will be sold at in the future, or it may be put on promotion.
• This is to try and persuade price-conscious customers to try a new wine, with the hope that they will permanently switch to this brand (thereby rejecting their preferred brand/s).
• The low price undercuts competitors and makes the new wine seem more appealing.

Question 23

Wine Intelligence released a model of market maturity. Name the type of market from the description.

Answer 23

Mature market
Markets where wine appears to have reached its potential with stable or declining volumes.
Examples: Germany, France, Switzerland, UK

Established market
Markets with strong historical growth which is tailing off.
Examples: Ireland, South Africa, Italy, Hong Kong

Growth market
Markets where wine is a mainstream product and/or experiencing growth.
Examples: USA, Canada, Brazil, Poland

Emerging market
Markets where wine is experiencing growth and shows potential from a relatively low base.
Examples: China, Russia, Turkey, Taiwan

New emerging market
Markets where wine is still a relatively new and unknown beverage, but showing some potential.
Examples: India, Malaysia, Philippines, Thailand

Question 24

What is a ‘bin end’?

Answer 24

Wines that are old/have been in stock a long time, or that have been discontinued.

Question 25

**Multi-buy or volume discounts** are often introduced to encourage consumers to buy more wine. Name examples for multi-buy/volume discounts?

Answer 25

* buy three for the price of two * buy, for example, two large glasses (25cl) of wine and get the rest of the bottle free * buy one, get one free (also known as ‘BOGOF’) * save a specified amount or percentage when spending over a certain amount or buying a certain number of bottles or more * buy one, get one half price

Question 26

Name the pros and cons of all forms of marketing promotion

Answer 26

**Price promotions:** **Pros:** * If the price promotion is successful, sales of the wine will be higher after than before the promotion. * Increase brand awareness. * **Link saves** can encourage customers to try other types of product alongside the wine, thereby increasing overall sales. **Cons:** * Consumers associate the wine with promotions so will only buy it when on sale. The image of the wine is damaged by the reductions, and consumers aren't willing to pay full price. * Brand loyalty is not created and consumers return to their favorite wines once the promotion ends. * Have been seen to encourage increased alcohol consumption. * Producers can be expected to cover the cost of price promotions, so may lose revenue. **Free merchandise:** **Pros:** * Sales can increase, particularly around holidays, as these products make good gifts. **Cons:** * Merchandise may not be viewed as exclusive/special because it is available to everyone. Therefore, sales don't increase. **Limited Edition Packaging / Presentation:** **Pros:** * Collectors and investors may see wines packaged in exclusive packaging as collectable/desirable. * The packaging is distinctive and can help raise brand awareness. **Cons:** * Sales don't tend to increase in the long-term, particularly as the wine is not typically presented in this way. **Competitions:** **Pros:** * Wines can appear more attractive given the possibility of winning something. This can increase sales. * Customer details can be collected to be used for other marketing purpose. **Cons:** * An expensive way of encouraging sales, and few people will benefit from the prize. **Consumer Tastings:** **Pros:** * Encourages low-involvement customers to buy wines they may have previously avoided because they wouldn't know what it tastes like. * Encourages brand engagement. * Even if the wine at the tasting isn't purchased, it encourages potential customers to come into the retail outlets where they may buy other wines. **Cons:** * Bottles will have to be opened and given away for free, when they could have otherwise been sold. **Staff Training and Incentives:** **Pros:** * Educating staff helps them effectively sell the product, thereby making it more appealing to consumers. * Staff can be encouraged to create more sales by personal incentives, making them more invested in their work. **Cons:** * In some regions incentivising staff by awarding prizes is considered bribery, and therefore illegal. * It may be costly initially to train all staff to a high level.

Question 27

Name the major Pros and Cons of marketing promotion away from the Point of Sale

Answer 27

**Advertising** Pros: * Memorable advertising campaigns will make a product stick in consumers' minds after seeing it. This can result in them choosing the wine in shops as they recognise it. * Wider audiences can be reached via many different platforms. Cons: * Often very expensive to pay to advertise on TV, websites etc. Also, hiring external advertising agencies to run campaigns also comes at a substantial cost. * Due to health concerns, how and where alcohol can be advertised is often regulated. **Sponsorship** Pros: * The brand's logo is seen widely by people interested in the sport/event they're sponsoring Cons: * Brand has to pay to be the sponsor. * Subject to legislation and restrictions given that its a form of advertising. * Often viewed negatively, given the impact that alcohol can have on health when it's being associated with sporting events. **Websites** Pros: * Provides a platform to give thorough details on a wine. * Can incorporate an online shop to retail the wine without the overheads of a physical store. Cons: * It's expensive and difficult to design and maintain websites, both from an aesthetic and technical perspective. Specialist companies often have to be employed to help with this. * It can be difficult to direct consumers to the website, so money has to be spent on making it searchable/accessible. * This information (and therefore promotional material) can be easily accessed by people below the legal drinking age. **Social Media** Pros: * Possible to engage directly with consumers, rather than producing unspecified adverts. * Given the demographic that are most active on social media, it's a good way of reaching younger consumers. * Ordinary consumers can share their thoughts and feelings on a wine publicly. Cons: * It's time consuming/costly cultivating a social media presence that may not all relate directly to the product being marketed. * There is an increased danger of bad publicity and reviews. Sites must also be monitored for inappropriate content. **Smartphone Apps** Pros: * Allow customers to get more involved with their interests. * Brands can be publicised on the apps. Cons: * Often only used by high-involvement customers, so they don't reach the whole market. **Wine Tourism** Pros: * Provides an opportunity to directly engage with consumers. * If consumers try wines, the likelihood they'll purchase something is significantly increased. * Appeals to both high-involvement and low-involvement tourists. Tastings/tours can be pitched at different levels. Cons: * Developing the infrastructure can be very expensive. Particularly if other activities to tempt tourists to the venue are offered onsite. **Events and Festivals** Pros: * Can attract both high and low-involvement consumers, with the added bonus that they often don't have to travel far to visit. Cons: * Exhibiting costs are often high, and the need for staff. * Free samples are often given away which could have otherwise been sold. * There will be lots of other exhibitors, so it's hard to stand out amongst the crowd. * There is the risk of consumer drunkenness , which has to be considered. * It can be hard to generate sales when consumers expect samples. **Reviews and Awards** Pros: * Favourable reviews from respected critics can boost sales. * Medals and awards can be used in promotional material. This can make the wine seem more attractive to the consumer. Cons: * Free bottles of wine often have to be given as samples that could have otherwise been sold. * Entering competitions often costs money. **Public Relations (PR)** Pros: * Favourable brand PR makes the wine look good in the eyes of the consumer, therefore they're more likely to buy it. * Brand ambassadors can be used to boost the public profile of the wine, making it more recognisable. Cons: * PR campaigns are costly and complicated processes.