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Wine Marketing: a Practical Guide

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Wine Marketing: a Practical Guide Wine Marketing This page intentionally left blank Wine Marketing: A practical guide C. Michael Hall and Richard Mitchell AMSTERDAM • BOSTON • HEIDELBERG • LONDON • NEW YORK • OXFORD • PARIS • SAN DIEGO • SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO Butterworth-Heinemann is an imprint of Elsevier Butterworth-Heinemann is an imprint of Elsevier Linacre House, Jordan Hill, Oxford OX2 8DP, UK 30 Corporate Drive, Suite 400, Burlington, MA 01803, USA First edition 2008 Copyright © 2008, C. Michael Hall and Richard Mitchell. Published by Elsevier Ltd. All rights reserved The right of C. Michael Hall and Richard Mitchell to be identified as the authors of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988 No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone (ϩ44) (0) 1865 843830; fax (ϩ44) (0) 1865 853333; e-mail: [email protected]. Alternatively you can submit your request online by visiting the Elsevier web site at http://elsevier.com/locate/permissions, and selecting Obtaining permission to use Elsevier material Notice No responsibility is assumed by the publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for this book is available from the Library of Congress ISBN: 978-0-7506-5420-3 For information on all Butterworth-Heinemann publications visit our web site at books.elsevier.com Typeset by Charon Tec Ltd (A Macmillan Company), Chennai, India www.charontec.com Printed and bound in Hungary 0708091010987654321 Contents List of Boxes vii List of Figures ix List of Tables xi List of Plates xiii Acknowledgements xv 1 Introduction: A practical approach to wine marketing 1 2 The international business environment of wine 35 3 The marketing dimensions of production processes: adding value to the vine 83 4 Cellar door: direct sales, brand building and relationships 112 5 The role of intermediaries 143 6 Retailing 160 7 Licensed premises 188 8 Wine events 207 9 Wine brand image agents: advertising, endorsements, reviews and media 225 10 Marketing cooperation: regions, networks and clusters 259 11 Conclusions: To market to market 295 References 309 Index 340 v ●●●● This page intentionally left blank List of Boxes 1.1 The USA’s three-tiered wine distribution system 21 1.2 Australia’s Marketing Strategy and Wine Australia market programmes (2007) 25 1.3 How not to plan for a new winery 29 2.1 From food miles to wine miles 41 2.2 The EU wine sector 47 2.3 Stimulating a new market: the case of China 59 2.4 Wine X: wine, food and an intelligent sense of vice 65 2.5 Growth of wine culture in India 67 2.6 The OIV 71 2.7 Biosecurity and wine tourism 75 2.8 Gathering market intelligence 77 3.1 Vieilles Vignes Françaises – An Ungrafted 91 Champagne 3.2 The Lodi Rules 96 3.3 The New Zealand Wine Company Limited 104 4.1 Hillebrand: cellar door success 127 4.2 Wine consumer behaviour insight 130 5.1 ASC Fine Wines: China’s largest wine marketmaker 147 5.2 Key questions in the winery–intermediary– retailer relationship 156 6.1 UK wine retail discounting: The great wine rip-off? 169 6.2 Market segmentation of retail customers in Ontario 176 6.3 Good wine retailers 184 vii ●●●● Wine Marketing: A practical guide 7.1 Wine pricing at restaurants and licensed premises 199 7.2 Licensed restaurants’ response to the screwcap wines initiative 203 8.1 Making exhibition stand attendance work for your wine business 211 8.2 Visitor profiles to wine events 213 8.3 Wine event market research 215 8.4 Wine Marlborough Festival ‘New Zealand’s Premier Wine and Food Experience’ (festival tagline) 220 9.1 General tips for wine advertising 232 9.2 Virtual wine and connectivity 233 9.3 Wine club members as high involvement consumers 235 9.4 Key design elements: Greenstone Wines 238 9.5 Wine as fashion: Moët & Chandon and Dom Pérignon 250 9.6 The ‘Sideways Effect’ 254 10.1 Inter-Rhône 264 10.2 Champagne: the world’s foremost place brand 269 10.3 The French regional classification system 274 10.4 Central Otago Pinot Noir Limited, New Zealand 279 10.5 The Wine Islands Project: A successful cooperative (tourism) marketing venture 281 10.6 New Zealand wine promotion: ‘the riches of a clean green land’ 288 11.1 Trends and issues in consumption and consumer behaviour to 2015 297 11.2 Trends and issues in production and production behaviour to 2015 300 ●●●● viii List of Figures 1.1 The basic wine supply chain 16 1.2 The role of festivals, wine shows and wine clubs 17 1.3 Complexity of the wine supply chain 18 1.4 Media, legal and cultural overlays 20 2.1 The international business environment of wine 40 2.2 The competitive framework for wine 44 3.1 A model for modes of designed qualities in wine products 85 3.2 Tangible and intangible dimensions of wine production 86 3.3 Flexibility in production 88 3.4 Business influences on the vineyard 88 3.5 Connection between biodiversity, terroir and wine in the South African biodiversity and wine initiative 101 4.1 Cellar door experiential marketing approach 141 5.1 Taxonomy of wine intermediaries 146 5.2 Volume versus specialist wine distribution 150 5.3 Classification of winery–intermediary trust 153 5.4 Synchronised, interrupted and distrust wine trust chains 154 6.1 Distribution channels 162 6.2 Drivers of global retail sourcing and supply systems 166 6.3 Relationship between retailers and wine brands 170 6.4 Wine retail servicescape 180 ix ●●●● Wine Marketing: A practical guide 7.1 Factors influencing the development of a restaurant and licensed premises wine list 195 9.1 Wine image formation agents 227 10.1 Stages of wine tourism network development 283 ●●●● x List of Tables 1.1 Production-driven and market-driven approach versus an experiential approach in wineries 13 1.2 8 Ps of the wine marketing mix 27 1.3 The 8 Ps in each chapter 31 2.1 Systembolaget wine launches October 2007– March 2008 38 2.2 World production and consumption of wine 51 2.3 World production of wine 52 2.4 World consumption of wine 54 2.5 Examples of institutional arrangements for wine 70 3.1 Vineyard integrated pest management practices of winegrape growers in the Lodi-Woodbridge Commission 1998–2003 95 3.2 Viticultural and marketing strategies of the South African Biodiversity and Wine Initiative 100 3.3 The New Zealand Wine Company’s/Grove Mill’s innovations for sustainability 107 3.4 New Zealand Wine Company’s/Grove Mill environmental accreditation programmes and their application 108 4.1 Estimates of winery visitor numbers 114 4.2 Advantages and disadvantages of wine tourism for wineries 116 4.3 Ranking of motivations for those visiting wineries 117 4.4 Potential of advanced wine knowledge segment 120 4.5 Wine interest segments in a survey of winery visitors at Margaret River 121 4.6 Examples of how interpretation and unidirectional education differ 138 xi ●●●● Wine Marketing: A practical guide 6.1 Wine available at Tesco.com March 2007 167 6.2 Advantages and disadvantages of different retail outlets 171 7.1 Restaurants and hotels as percentage of total household consumption expenditure (at current prices) 191 7.2 Wine policy in restaurants 197 9.1 Use and capacity of selected advertising communications channels in developed countries with respect to premium wine and food products 229 9.2 Examples of retail promotions 235 9.3 Influence of wine shows/awards 247 10.1 Clusters versus network characteristics 267 10.2 Examples of cases of intellectual property actions taken by the Champagne region 272 10.3 Italian, Spanish and Portuguese equivalents to the French AOC system 275 10.4 Key international agreements involving intellectual property rights 277 10.5 Principal Australian wine industry associations in 2000 286 10.6 Selected national and state/provincial offices in export markets 291 ●●●● xii List of Plates 1.1 Old vintages of champagne stored in underground wine cellars. This sends strong symbolic messages about the history and heritage of champagne. 1.2 Gas station own-brand sekt (German sparkling wine). A different set of meanings and brand image to champagne. 2.1 Phylloxera sign, South Australia. Although biosecurity is a major issue in many wine areas the impacts of wine tourism have often not been considered. 2.2 Vineyards in South-west Australia. Concerns over water availability, potentially worse under climate change, has necessitated the development of irrigation dams on many properties. 3.1 Sustainable winegrowing, Waipara, New Zealand 3.2 Greening Waipara project. The project aims to enhance the biodiversity of the region. 4.1 Wine House and Kitchen (Gibbston Valley, New Zealand) meeting room. Design elements reflect a 1950s country home using the philosophy of the warmth and welcome of ‘Grandma’s place’ to engender a sense of home. 4.2 Olssen’s of Bannockburn (Bannockburn, New Zealand) cellar door. Vernacular and heritage architecture can be effective in creating a sense of authenticity by providing a setting that has a strong sense of place.
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