Wine Strategic Plan Essay
Wine Strategic Plan
I. Executive summary
The quality and reputation of wellington wine have a key role to play in strengthening wellington wine’s brand promise of being a vibrant and welcoming place that celebrates the good things in life.
Wellington wines core brand attribute of being Australia’s home of exceptional wine and produce, complements other core brand attributes of un spoilt nature at close proximity, enterprising tradition of creativity and innovation, and a beautiful city and festival spirit.
The Strategic Plan target is to achieve an increase in Australia wine market from $50 billion in 2011-2012 to $57.5 billion in 2012-2013. The wellington strategic Plan identifies the priority strategies to achieve this target. One of these strategies is to encourage further investment in Australia’s food and wine tourism assets.
This strategy aims to create an unassailable competitive position for food and wine experiences and in doing so help to create global awareness of Australia as one of the world’s outstanding authentic food and wine destinations.
It also aims to increase the number of visitors, their length of stay and expenditure yield while in Australia’s food and wine regions. This strategic approach has been developed within a longer-term  vision while providing an action plan until 2012. Australia’s wine, food and tourism sectors are a potential winning partnership that can put Australia firmly on the global map by communicating the best of Australia today; making Australia easy to access and experience; and by creating an even more appealing Australia of tomorrow. New products and experiences will create exciting ‘new news’ about wellington wine that will inspire people to visit and buy its produce both in site. The holistic experiences that are a blend of heritage, culture and natural environment, will offer a compelling celebration of the good things in life.
Wellington Wines (Pty) Ltd is a successful single production site winery situated at Mudgee in New South Wales. Wellington Wines currently sells the follow branded products in the Australian market through both the independent and supermarket channels. The product will be wellington Sauvignon Blanc, Wellington Chardonnay. Wellington wines (Pty) Ltd was recently appointed to the new marketing manager to created new marketing report for the year 2012 where the shareholder likes to grow the sales by 15% per cent in the Australia wine market.
Wellington wines (Pty) Ltd will use three distribution channels in the beginning of operation to establish our winery which is retail sales (on-premise), retail sales (off-premise), and internet sales. These three channels will provide this company with the most access to primary and secondary markets. We will use a competitive pricing strategy listed below that is slightly below the other premium wineries in the area to attract the younger generation of wine consumers. In order to generate a profit, we will routinely analyze our costs to assure we are generating a modest profit to cover all our expenses to be a profitable wine company.
II. Current Situation
Wellington wine (Pty) Ltd have seen a further significant increase in the number of customers who have made purchases in the last sales revenue for the period July 2001- June 2012- $ 50 million (AUD). This was reflected with strong growth average trade mark up in the supermarket sector- 30%, marketing budget 2% sales revenue, average gross sales revenue per case (12×750) – $ 120.00(AUD).
* A “premium” brand, its signature Wellington Sauvignon Blanc, Wellington Chardonnay. * When the wine tester enthusiasts think of wellington wine they will think Sauvignon Blanc, Wellington Chardonnay is one of a strong identity that many wine regions envy. * Wellington wine market is not just wellington Sauvignon Blanc, Wellington Chardonnay we will more produce another variety of our runner up new extends across a broad spectrum of wine varieties, styles and price points, which is a very good thing.
* Lack of growth in market for premium (fine) wine resulting in an oversupply of grapes from temperate and cool climate region * Time lags and costs associated with changes in varietal planting * Lack of mutual understanding of respective business coasts and operating in wine industry value chain. * Lack of resources for grower organizations to meet increasing demands for relationship management in the wine industry value chain, with government and the general community * Lack of capital for small growers and wineries to fund new initiatives and market opportunities
* To grow the market for the future of this company will be win more market share in line with increasing Australia wine consumption, * With the growing consummation of wellington wine in Australia market line increasing per capita wine consumption. * Promoting the wellington wine for food service and hospitality sectors in amongst Australia and overseas traveller, promoting worldwide who are seeking quality branded wines building high level collaboration in the value chain for increasing competitiveness in the world wine market, * Developing wine grape grower relationships with the Australian Government through the Industry Partnerships Programmers.
* There are a number of very serious economic threats that cloud the short term outlook. * Domestic inflation is high in Australia, the governments keep rising the tax。 * Production costs are raising rapidly– labor, grapes and other inputs are increasingly expensive. * Land prices for new vineyard projects seem to be growing exponentially. * Revenues are not increasing at the same rate, with the result that margins are being squeezed. In fact, the pressure is on to cut prices in the competitive in Australia wine market. It is not clear how long the current combination of rising costs and falling revenues (or soft revenue growth) can be sustained.
III. Competitor & Issues Analysis
The Wellington Wines (pty) Ltd is a successful winery company for the period July 2011-june 2012 for total sales revenue -$ 50 million (AUD) for the next step of the improvement of the continuously competent with the wine market place, Wellington wine (pty) Ltd going to grow up the sales by 15 per cent in the Australia wine market for the year 2012. The Mudgee region is located on the Central Tablelands of New South Wales and is considered to be a cool climate wine region. The region has a reputation for producing quality wine grapes suitable for super premium and ultra premium bottled wines, with red varieties accounting for nearly Two-thirds of the 2011. However, Mudgee is only a small producing region, accounting for just 4 per cent of New South Wales wine grape production and just over 1 per cent of Australian production in 2011-2012. In another word there is many wine company still stand well in Australia wine market and overseas, there are is:
* Riverland is the largest wine grape producing region in Australia, accounting for 61 per cent of South Australian wine grape production and 28 per cent of national production in 2001-02. The region has a reputation for producing good quality wine grapes used for premium bottled and bulk wine sales, the majority of which are marketed overseas. * The Loxton winery is located in the heart of South Australia’s Murray Valley. In vintage 2004 the winery crushed 89,000 tons of grapes, up from 69,000 tons in 2003. A large proportion of the throughput comes from Company owned or managed vineyards. As such, and due to哦 smaller tank configurations, the Loxton winery plays an important role in preparing and blending wines for own brand bottled sales. * McGuigan Located in the Hunter Valley, NSW, and this winery has a capacity of 5,000 tones, and is used primarily for local Hunter fruit crushing, winemaking, maturation and bottling of premium branded products.
IV. Marketing Objectives
Ensure that wellington wine influence on the Australia wine market continues to significantly outweigh its market share, Enhance the image and reputation of the wine, Expand the scale and scope of market opportunity for the wine, growing the category, Focus on quality wine which offers brand development and increasing brand value potential, target the market segments with the best growth and reward prospect, stay close to the consumer through product offer, promotion and communication, and Improve market access and distribution opportunities. The main objective of this marketing plan is to grow up the sales of the wine to 15 per cent more from last year in Australia wines market, and for the future of this marketing plan there are several important factors to consider when setting the objective of this marketing plan so to ensure that plan we going to use SMART to approach the plan effectively Local Community
* General public with little knowledge
* Educated industry champions
* Liquor retailers
* Other business operators
The Education Community
* Tertiary students
* Students’ families
* Ex students
* Teaching & allied professionals
* Secondary services to industry
* Families looking for diversification of experiences
* Parents and teachers visiting attractions
* Sport tourists
* Race visitors looking for diversified experiences, including ‘race widows’ (female purchasing power)
* Educated wine consumers wanting to be the first to know about what is newly fashionable and emerging
* Blue Mountains visitors
* Western Sydney (affluent Western Sydney, neglected by mainstream wine)
* Young people looking for an approachable entry to learning about wine, the next wave of consumers
V. Marketing Strategy
To build on this natural expansion there are a number of market development strategies to stimulate additional growth which could be considered. These include: * Creating new packaging sizes and formats for added convenience and appeal. * Developing new wine products by blending with non-wine beverages. * Acknowledging and meeting the demand for sweeter wine styles, especially from new wine drinkers. * Enhancing and expanding distribution opportunities.
* Encouraging more frequent consumption by the occasional consumer segment.
The three core tasks in promoting to this strategic are:
* Presenting consumer relevant information about wine (simplify wine speak) * Building consumer confidence and comfort about wine (remove intimidation barriers) * promoting wine as a way of adding enjoyment to any occasion (everyday relevance)
The three main chancels for retailing wine are:
* Supermarket-high volume, mainstream brand, convenience and competitive pricing * High Street- diverse selection of wine and a different categories mix * Independent Specialists- more involved experience, exclusive or limited release product offering
The marketplace should provide sufficient incentives for producers to respond to any new products and/or packaging opportunities which may exist. In the case of sweeter wines, this change will require producers to drop their prejudices and adopt more of a consumer perspective. Improved distribution opportunities will occur when the industry overcomes unjustified legislative barriers which limit retail expansion in areas such as supermarkets.
For small producers, the Internet and wine tourism offer alternative channels which will enhance their distribution opportunities. However, it is the occasional consumer strategy which has the greatest likelihood of growing the Australian wine market. This growth will only be achieved if the industry commits to a collaborative promotional program for the Australian market. The program should be targeted at the occasional consumer segment via a range of initiatives that present wine as friendly, broadly appealing, accessible and easy.
VI. Action Programs
Wellington wine (Pty) Ltd commitment to collective marketing activity is justified where it expands the scope of market opportunity for Australian wines. The accountability imperative is that resources have to be utilized in the most cost effective manner and performance measured. This is the decade where we must as an industry entrench the consumer franchise of this surrogate wine brand, “Australia”, by better communicating the consumer benefits, thereby strengthening it as a market asset, where the marketing task of refining and enhancing the product offer of attaining more pervasive and secure distribution of more closely targeting the price and geographic market segments of expanding sales and building our reputation and brands becomes the priority.
Industry resources are also committed to other promotion activities with Australia wine being the most significant. Each of these other promotion activities has, in the absence of an overall marketing strategy, pursued its own valid objectives. However, it is now feasible to realign their objectives to maximize the contribution to driving the industry marketing strategy. The implications are that substantial changes will need to be made in the type, location and implementation of future industry collaborative promotion. The Promotion Action Plan outlines the proposed major changes and recommended timing for implementation:
Define and develop the market reputation assets referred to as wine brand “wellington wine” * Articulate core values, point of difference and personification. * Commission creative expertise to develop the communications elements (messages, tag lines, visuals). * Ensure that wine brand “wellington wine” is not fragmented or diluted – while regions and states have a role in teaming of promotion activities in appropriate markets, they should not be promoted as formal sub-brands of wine brand “wellington wine.”
Increase the targeting of promotional effort
* Priorities the allocation of promotional resources, especially levy funds, to new category growth. * Focus most effort, in non-category priority markets, on fewer, high profile promotions to achieve threshold impact. * Customize the promotional activity mix to meet specific objectives for each individual market Enhance implementation effectiveness
* Strengthen the AWEC Council role, for ensuring that promotion plans fit industry marketing Priorities and performance accountability. * Revise the resource bid procedure so that submissions are made annually incorporating a rigorous, structured business plan. * Introduce a zero base model for the evaluation of resource bids. * Appoint the same organization to be the guardian and manager of the marketing asset, wine brand “wellington wine”.
Expand the wine brand “wellington wine” promotion effort
* Continue to pursue alternative funding opportunities through joint ventures and sponsorship. * Encourage greater user pays participation in selected promotions. * Review the terms of promotional participation to make it more attractive for small producers to be involved in mature market niche programs.
Integrate Wine Australia as an essential component of the promotion effort * Revise Wine Australia’s mission statement so that it is more closely aligned to the market development priorities of The Marketing Decade. * Develop a new, more flexible event format which is able to deliver specific program offerings to target different audience segments. * Re-focus the event’s emphasis on two key market segments: international trade/international consumers and occasional consumers in the Australian market. * Evaluate the feasibility of extending the new Wine format to encompass a series of major Australian wine promotions in priority overseas markets.
Start with a statement that identifies what the plan trying to accomplish Include rationale statements such as: restate the sales goals, identify the marketing objectives, & outline the time frame Give a break out of planned expenses, listed line by line item under each expense category Obtain budget estimates from each department associated with marketing activities Use historical information to give you a base for predicting the future be sure that the allocations support your objectives. The marketing budget will identify with three option of marketing it will be:
* Set a budget based on what needs to be accomplished for the product * The focus is on adequately supporting the marketing mix activities * Estimate the cost of using each marketing tool in the plan
Marketing budget total as as total percent of total sales
* Is most effective if you have no history with the effects of marketing & using tactical tools * Can serve as a method for allocating expenditures that is in line with industry standards
* Involves estimating the sales & marketing budgets of leading competitors & comparing those estimates to your sales & marketing budget * May enable you to meet or beat specific elements used by competition, resulting in a competitive edge
These process may sound too involved to be coast effective for many wineries. It is true that an initial investment will need to be made to accumulate intelligence and to develop a plan. However, once the plan is in place it can be used as a template for years to come. Changes will, of course, need to be made regularly to the specific elements of the marketing mix and research will need to be updated but the process of doing these activities will be reduced substantially over time.
The global wine market segmentation model offers wine companies and organizations a framework and a process for evaluating wine markets based on a universal measure (stage of evolution) which cuts across all geographic and traditional marketing boundaries. Most importantly, this universal measure offers a ongoing benchmark, with markets moving from segment to segment as they evolve. Wine Intelligence intends to maintain and update this model over the next few years, offering the industry as continuous reference point. It’s perhaps useful at this stage to set this model against the typical mode of behavior exhibited by companies in the wine industry. Basic economic theory tells us that businesses will gravitate towards markets where the returns are best. This act will serve to bring those returns down through greater competition, and an equilibrium point will be reached where the returns are more or less the same everywhere.
Clearly this is a simplistic view at the best of times, and particularly so in the wine business, where the impact alone of government regulation and the tax system is enough to distort the returns significantly. The economic returns theory also ignores the wine industry’s most pressing imperative: the need to turn the most recent crop into cash. This imperative often overrides even the need for profit, as the opportunity cost of not clearing the tanks can often be a catastrophic write-down and possible business closure. As such, many wine businesses naturally gravitate towards markets and customers who can be relied upon for large orders that will empty the tanks.
These tend to be markets where per capita consumption is already high, there is little or no need to invest in marketing and supply chain, and there is a sufficient critical mass of drinkers to tap into. Given these pressing short-term priorities, there is often a natural reluctance to invest for the long term in markets where the bigger prize is some way in the future, especially where the organization is regularly accountable to shareholders or stakeholders.
This model-based approach to building a market development portfolio might assist businesses and wine region organizations define a balanced market development portfolio, combining higher-return/short-term volume opportunities with longer-term growth where early presence in the market can help build enduring loyalty. Our conclusion, therefore, is that most wine companies and organizations will want to identify a mixed portfolio, combining well-targeted investment in at least three of these segments, and monitoring markets for short-and longer-term returns using this stage-of-evolution tool. Of course, beyond macro trends in all five segments, there are local differences that must also be taken into account –and that’s before we start drilling down even further into different types of consumers within each market.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 7 January 2017
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