Wine Marketing - Round 2

Pricing Considerations

100

Strategies for implementing a successful price push on a wine

Increase the perception of quality of the wine:

Change the label and marketing to promote a serious wine and be consistent of the quality in the bottle

200

This is the oldest method for pricing wine. What is it, and why is it no longer often used

Production-cost pricing method - Bottle price is based on the price per ton of grapes used.  

Simple, but does not take into account the cost of the land value or the cost of the winery time.

300

The two most significant contributors to cost of a bottle of wine

Vineyard Labor   and Direct Wine Making Costs (labels, bottles, corks, etc)

400

The reason why a bottle of wine won't sell at $6, but when price is raised to $12 the wine sells

Because people buy within their PERCEIVED range of value and price, and the $6 regular price of the wine gave consumers a perceived view of low quality that fell outside their established range

500

The most effective way to price wine in today's market

Combination of Production & Market Driven pricing:

Start with production costs

Submit wine competitions & wine ratings to establish market value

Combine consumer perception of quality and pricing with competitive pricing data to identify price range

Direct to Consumer Sales

100

Main reasons behind the creation of the US Three tiered System

Intentionally inefficient to:

- increase the minimum price of alcohol to control abuse (leftover from prohibition laws)

- reduce the ability to create a monopoly in the market and limit consumer choice

200

Five Ways a winery can sell directly to a customer

Tasting Room Sales, Wine Clubs, internet sales, culinary services (winery restaurant), special events or programs

300

Benefits of Direct to Consumer Sales

Higher Margins

Brand Awareness and Loyalty

Low entry costs

Improved US law on direct shipping

400

Limitations of Direct to Consumer Sales

Not able to ship to all 50 states

Potential conflict of interest with distributors and retailers

Cost of implementing high end consumer direct program

500

Important outcomes of running and participating in wine events

- Being in front of people's thoughts

- Building relationships

- Building wine club membership through pushing boundaries in perception of quality and relationships

- Staying involved in and supporting the community

Distribution Sales

100

Standard distribution of profits in a three tiered sales system

Producer - 50%

Distributor - 20%

Retailer- 30%

200

Main ways that distributors help producers making it valuable to use outside distributors vs. self-distribution

• Many states have laws requiring that wineries sell wine to distributors, rather than directly to retailers establishments  (24 states)
•  Logistics of transporting wine  to retailer
• assist with tax reporting
• assist with marketing
• Built-in network of contacts to sell the wine

300

Types of Distributors

Wine Brokers

National Distributor (Southern Glazer is biggest)

Specialty Wholesaler

Online Distributor

Importers

400

Key Attributes of Successful Distribution Account Managers

- Showing Benefit of a wine (vs. simply featuring it)

- Look for opportunities at the retail level

- Provide consulting to retailers to how customers purchase

- Help create a blended selection of wines based on variety and price point

500

Explain why a winery (producer) would choose a smaller distributor with less reach than a larger distributor with more coverage

Less competition in the book

More personalized attention 

Depth of coverage vs breadth

Better services

Retail Sales

100

Significant differences between a Large Grocery Wine Retailers and Fine Wine Retailers

High Volume/Low Margin vs. Low Volume/High Margin

- discounting vs value added service

- National Brands vs. niche producers

- wine tastings focused on bringing in new customers vs. wine tastings focused on valued regular customers

200

States that have government-controlled wine stores

and philosophy as to why

- Alabama, Idaho, New Hampshire, Oregon, North Carolina, Pennsylvania, Virginia, Washington and Utah

- controlling availability without encouraging consumption

300

Wine List Philosophy of Fine Dining Restaurants

• Wine must match and enhance food
• Appeals to their specific consumer segment
• Focus on margins and what will sell
• Well known brands to supplement small and unknown labels
• Popular varietals in addition to offering something unique
• Discovering new winery or wine for marketing impact
• Promote that elusive wine to encourage desirability due to scarcity

400

General rule for pricing wines by the glass in an on-premise retailer

Price of the glass is equal to the purchase (wholesale) price of the bottle

500

Different promotional strategies in a Wine Bar to create and maintain popularity

• Educational seminars
• Winemaker presentations
• Wine-themed party nights
• Discounts and specials on wine
• Wine flights
• Online and catalog sales
• Wine clubs

Promotion

100

Difference between Advertising and Public Relations

Advertising:

Bringing wine brand to the attention of customers through a variety of media including print ads, brochures, radio, TV, internet, email, direct mailing, signs and personal contact. Usually requires payment

Public Relations :

The building of good relationships with the winery’s various  stakeholders/audiences (customers, shareholders, community, press, wine writers, online, etc) by obtaining positive publicity, managing unfavorable events, and creating a good corporate image.  Can often be free, except for salary or consulting fees for professional services.

200

Key reasons to advertise

It supports distributor sales for in a market

It can lead to PR coverage in publications

It creates long-term image for the brand

It guarantees that your message is seen when and as you want it, and keeps brand in front of the target market

300

Types of Media Outlets

• General Interest Media – .  Looking for stories that best meet the goals of the publication.
• Wine Trade Media – Journalists first, wine experts second.  Seek the same stories that general media want (trends, new developments and exciting news), but also include product review stories or buying guides for readers.
• Electronic Media – More generalized audience than print media.  Includes: television (national television or cable pay to play), radio (wine and food shows)  and the internet.   Directed at the general public
• The internet – extremely active with new developments happening weekly. Internet stories can have a large impact on Television news media.  Include: print and electronic media websites,  specialized wine and food websites (strong community of readers), and Blogs (influence and community)

400

Audiences other than media that a winery would promote to

The Distribution Network (They want help selling). 

Industry Professionals – Educators and Sommeliers (They want support through donated product in return for word of mouth marketing)

Retailers & Restaurants (They want support through the sharing and populating of events with other PR audiences when co-sponsoring.)

Wine Organizations (These associations serve as gate-keepers for large groups of the wine drinking public.  They want information to represent wines and winery to the members.   Presentations at conventions and conferences are key, as is sponsorship.)

Company ownership/shareholders and Employees (They want clear explanations of strategy, goals and expected results)

Community (They want help with community causes through donations and support)

500

Goals and Benefits of being a part of a Trade Association

Provide strength through numbers.

 Joint promotion for a product or a region increases the total time, energy, creativity and money to help achieve mutual goals. 

 Puts your message and product into the minds of a very targeted audience, and increase product demand. 

Successful trade association relationship is when:

• Goals of association are consistent with your own marketing goals
• Association can offer solid audience of interested consumers or trade
• Association offers most cost-effective way to achieve your identified goals