Category: Wine

The research group from the University of Alberta in Canada found that resveratrol antioxidant contained in red wine affects the duration of human life like physical exercises. It is widely believed that this antioxidant is able to slow the aging process and reduce the risk of cardiovascular diseases as well as cancer development.

The benefit of red wine is not surprising – it is a completely natural product created by nature. According to Canadian historian Rod Phillips, “every grape is a small winery – there are all the chemical elements inside and outside it that make a berry wine” (Phillips, 2014). It is now unlikely that anyone would argue that a small amount of red wine could bring some benefit to a human. For example, after drinking one glass in the morning, one recharges himself with a good mood and cheerfulness for the whole day. Essential oils and esters contained in wine would improve the tone of the nervous system and reduce blood pressure (News Breaker, 2015). Red wine contributes to the reduction of gastric and intestinal diseases as well as asthenia. Besides, it promotes faster toxins and additions output from the human body. Dry red wine might advance the plasticity of veins, too. It is also recommended for patients with diabetes because it contains a small amount of sugar and generally improves the health of diabetics.

However, in my opinion, there is the flip side of the coin. The main component of red wine is ethyl alcohol. Once in the body, alcohol breaks down into plenty of toxic substances such as acetaldehyde, a highly toxic poison that thins the protective cell membrane and penetrates it, violates metabolism getting in the DNA, causing cell changes, and resulting in the appearance of atypical cells, or tumor. Along the way, there are brain intoxication, thrombosis, and hypoxia neurons.

Nevertheless, I believe that everything is good in moderation. A daily dose of the drink should be limited. For instance, as if one was taking the drug. It goes without saying that wine of dubious origin is considered a potentially dangerous product for the health. In the case when the wine of unknown origin goes along with excessive use of it, the picture is rather disappointing.

Moreover, some people are genetically unable to resist alcohol. Drinking wine, even red and very useful, is not recommended for them at all. It is also necessary to note that drinking wine, even in small doses could have a negative impact on the health of people who are already suffering from some serious disease and taking medications reducing their current state of health. No doubt that wine cannot be used during pregnancy and lactation as the alcohol, getting into the body of the child, could cause irreversible damage to his brain and spinal cord cells. Besides, if one considers himself an implacable opponent of alcohol, the content of resveratrol could be supplemented by other sources, for example, peanuts, cranberries, or blueberries.

In conclusion, it should be stressed that red wine might be useful in a small dose and only for certain people. In case a person cares about his or her health, he or she needs to choose only real wine from trusted manufacturers as red wine could improve the health or, at least, save its current state to some extent.

References

News Breaker. (2015). Experts Say Red Wine Could Be As Beneficial As Exercising [Video file]. Web.

Phillips, R. (2014). Alcohol: A History. Chapel Hill: University of North Carolina.

Introduction: The 2013 Concerns and the Wine Promotion Campaign

According to the recent records, the English Wine Producers are going to promote their wine not only to the residents of the United Kingdom, but also to the tourists. Moreover, as soon as the company succeeds in its beginnings, it can be expected that the English Wine Producers will start selling their products worldwide.

Thesis statement: despite the lack of available information, the English Wine Producers can succeed in the European wine market by using their key assets and improving their knowledge management system.

The Analysis of the State of Affairs: What Needs to Be Done

Like any other company, the English Wine Producers have their own advantages and downsides. Learning to use the former and hide the latter will help the company succeed.

The strengths of the English Wine Producers: putting the emphasis on the quality

To win the battle, the company will have to lay the emphasis on its assets so that the potential clientele could see these advantages as well. Therefore, the strategy must be aimed at finding the way to stress an outstanding quality of the English wine. Perhaps, combining a well-known stereotype of English people always clinging to their traditions, one can come up with an alluring advertizing concept.

The weaknesses of the English Wine Producers: when it comes to information availability

Sadly enough, there is a lack of cooperation between the English Wine Producers affiliates. However introducing the system of knowledge sharing, one can expect a better information processing.

Looking for the Solutions of the Problems: Flexible Measurement System and Awareness Campaign

Needless to say, a good advertizing campaign makes the bulk of a company success. Therefore, every single element of the campaign must be well thought out.

Technological advances as the key means to inform the potential customers

Utilizing the latest technological advances will help considerably in promoting the company. E.g., a blogosphere can be used to attract even more clients.

Effective advertizing campaign: let the whole wide world know about English wine

To make the advertizing campaign as impressive as possible, different types of media must be used. Starting from advertisements in newspaper and TV commercials to direct marketing (e.g., sending e-mail invitations and newsletters), the commercials have to aim at the clients.

Rethinking the Budget Issues: One Hundred Bottles of Wine on the Wall

With the help of a 100,000 pounds budget, the English Wine producers will be able to promote its wine efficiently.

The costs that cannot be avoided: promotion campaign

A good promotion campaign must drive people’s attention towards the goods and make them feel like trying these goods. Therefore, the following costs can be expected:

Unforeseen costs and how to deal with them

It is also necessary to keep at least £5,000 for the possible unforeseen costs, such as broken/stolen goods, etc. In addition, it is necessary to keep in mind that the English Wine Producers will also have to provide the clients with an opportunity to try the wine for free as a part of the promotion campaign to attract even more people.

Conclusion: Reconsidering the Current Action Plan

Though there might be other possible obstacles for the English Wine Producers, it still must be admitted that the given plan is rather viable. Creating effective commercials that emphasize the positive aspects of the English wine, one can expect a surge of clientele and impressive revenues.

Terroir

Originally, the word terroir has its derivations from the word terre which is a French word used to denote land. The term is used to give an explanation of the characteristics that are specially meant to give a description of the climatic, geographical and geological conditions that of an area where different varieties of the mentioned crops can be grown. In this view, it is important to know that this agricultural area has similarities in the farming techniques used, weather conditions and also the soil where the crops are grown. These factors play a part which contributes to the unique qualities of the variety of crops grown.

Is there a Unique Terroir for the Okanagan Region?

Yes there is. The terroir of the Okanagan region is unique as compared to other parts where growing is done. The reason for the uniqueness of the area is that the area has climate whose soil conditions emanate from glacial movement from events that are considered as pre-historic. These conditions favor the region as it is considered to be a desert area. Its location is to the North of the Sonoran Desert (Wine X Magazine, 1997)

Major varieties of grapes (cepages) grown in the Okanagan region

With the area being extremely productive, there are a variety of grape fruits grown in this region. These crops are grown based on the importance and demand and therefore the tones produced and acres of planting matter when it comes to the varieties. The varieties are as follows: merlot, chardonnay, Pinot noir, Pinot Blanc, Cabernet Sauvignon, Pinot Gris, Sauvignon Blanc, Gewurztraminer, Riesling and Shiraz/Syrah. With this as the major varieties, the region also produces other varieties making the total count of grapes as 38. These means the Okanagan region produces 38 varieties of red grapes and 39 varieties of white grapes.

Difference between Coastal British Columbia Wines from Interior British Columbia

The wines in these regions differ due to the growing process right into the wine processing. This means the variations of weather and soil difference in these areas are a factor in the growth of grapes and the processing of quality grapes. These diverse factors differentiate the growth grapes and the quality of wine produced. The Okanagan and Simillkameen valleys are the oldest growing fields in the region and thus there is also the existence of the Coastal British Columbia which lies on the Southern part. The grapes grown in these two regions are chosen from the conditions that widely favor their proper growth hence production is conducted through a team of knowledgeable craftsmen who ensure that the standards of wine are truly authentic thus the quality of wines produced from the Coastal British Columbia result from the newer ideas that have been coined since the interior British Columbia region of Okanagan and Simillkameen have preserved their traditions in the making of wine. The quality of the wine product is ascertained through having the products registered as trademarks with the wine descriptions being considered as crisp and fruity for the wines in the Coastal British Columbia and scrumptious dessert wines for the wines grown in the Interior British Columbia

Price quantity and Quality

The Price quantity of wine in these regions must conform to the agreed standards of quality production of wine. The VQA which is a symbol that ensures the quality of wine products from British Columbia gives assurance that wines processed in the region are from 100% British Columbia grapes. The wines undergo testing and any wines found to be faulty are rejected and are neither considered as VQA wines therefore their sale is prohibited (British Columbia Wine Institute, 2010).

Difference of Wines produced in Northern Okanagan from those in Southern Okanagan

As said earlier, the northern part occupies a dessert so the wines from this area are usually processed from grape fruits that have been grown under climatic conditions which are different from those on the Southern part of Okanagan. For example, grey monk wines from the Northern region have a slightly different way of preparation so that they attain the quality standards expected. The grapes also grow in different soils which is also a key factor when it comes to the taste of these wines.

Jobs in the Wine industry (British Columbia)

The wine industry has created over a thousand employment opportunities for inhabitants in the region. Though permanent jobs are hard to find, the industry has come up with numerous other jobs which are seasonal. These jobs are considered as volunteer jobs while others are internships. This has been as a result of the number of wineries that have come up in the area thus increasing the level of employment opportunities. These jobs include: wine harvesting, employment for tour consultants which is an indirect employment et cetera.

Two largest Producers of Wine in Okanagan

The two largest producers of wine in Okanagan are the Grey Monk Estate Winery and the inniskillin Okanagan. The two wineries have expanded greatly since their inception and have continued with their tremendous growth through processing of quality wine.

Number of Wineries and Vineyards in Okanagan

Okanagan has a cool climate and accommodates over 200 vineyards and 120 wineries. This gives the region an advantage as the climate favors the growth and production of wine processed.

Consumption of Okanagan Wine

Most of the wine produced in Okanagan is consumed locally. This is due to the culture of the inhabitants within the region as the inhabitants of the area consume a significant amount of the wine produced on an annual basis.

Prices of wine

Normally, the British Columbia Wines are nurtured from the best qualities of grapes and are processed through the knowledge of skilled craftsmen who ensure that the wines are 100% authentic and are worth the price. The reason as to why the prices of wine at the winery and state liquor remain the same I because there are no taxes charged at liquor stores just the same way as the wineries do not have charges.

Wine Flavor Associated with Ageing

Just as it is said, chocolate helps from improve once health thus reducing the ageing ingredients within the body. This therefore means that the wine flavors in chocolate help prevent one’s ageing rate as it rejuvenates the skin and makes one age at a slower pace than usual.

References

British Columbia wine Institute, 2010. Quality Assurance. Web.

Wine X Magazine, 1997. Uniqueness of Okanagan region. Web.

Introduction

Pomegranate is known for its health-promoting effects, including its role in preventing heart disease and diabetes. Huge wastes of over-ripe and secondary quality pomegranate prompt the need to improve the quality of associated processed products. Therefore, methods and uses of fruit processing should be advanced. Pomegranate wine dispensation has been recently elaborated as a novel approach to Punica granatum L exploitation (Lan et al., 2017).

During fermentation, significant characteristic flavor formation and volatile composition alterations occur, resulting in fragrant, alluring, and unique wines. The pomegranate wine’s comprehensive real-time change of antioxidant elements and its characteristic flavor profile during the entire aging and fermentation process requires further studies. This research’s primary objective was to investigate the flavor profile and antioxidant changes of pomegranate wine through the process of fermentation and aging.

Methodology

Based on the article, the total anthocyanin content (TAC), superoxide anion, DPPH free radical, total phenols content (TPC), phenolic profiles, and hydroxyl radicals scavenging activity were examined throughout the entire pomegranate winemaking procedure. The overall aromas and taste quality, as well as dynamic flavor ingredient changes in the wine, were also monitored during processing.

E-tongue and E-nose technologies were utilized in detecting and analyzing even the slightest variation in aroma and taste of different samples. Other quality parameters, such as titratable acidity (TA), pH, organic acid profiles, alcohol content, and total soluble solids (TSS), were also investigated. Three independent trials were carried out, and the data obtained were evaluated statistically using the variance (ANOVA) method. The ANOVA technique employed the SPSS 18.0 software. In situations where significant differences between samples were distinguished, an LSD assessment was applied.

Results

Anthocyanin swiftly decreased until the fourth day and then mildly reduced to the end of the preparation process. TAC exhibited a significant loss after fermentation (from 53.71 ± 3.06 to 23.02 ± 1.09 mg/L) (Lan et al., 2017). The results also indicated that the scavenging activity of superoxide anion free radical slightly decreased after the fermentation and aging process (Lan et al., 2017). The processed pomegranate wine still contained potent hydroxyl radical scavenging activity.

The scavenging capacity of the DPPH free radical dropped initially and then increased as the fermentation process continued. In the final aging stage, the DPPH scavenging activity remained relatively stable. The TPC’s concentration fluctuated significantly during fermentation and became gradually stable during the aging period. Using the e-nose technology, significant differences were observed in the samples before and after fermentation. On the other hand, the E-tongue signal results decreased in all potentiometric chemical sensors, except one.

Discussion

Anthocyanin has a significant function in the antioxidant activity and fascinating color of pomegranate wine. The TAC changes during the process could be because of anthocyanin degradation and polymerization interactions and reactions between anthocyanin and other phenolic compounds (Lan et al., 2017). The O2 free radical does not directly induce an oxidative reaction, but it promotes the construction of an active OH free radical. The potent hydroxyl radicals were mainly due to specific bioactive composites that mop up free radicals in the wine. The DPPH scavenging ability’s variation is linked to the transformation of polyphenols content.

The manufactured wine maintained a considerable capacity to reduce and inhibit DPPH compared to red wine. The TPC variation was due to the oxidation and hydrolysis of native polyphenols. The significant E-nose sample differences could be attributed to the formation of similar volatile substances and novel volatilities in various concentrations. The E-tongue outcomes show that the sourness of the wine weakened at the end of its manufacturing course.

Conclusion

The antioxidant capacity, flavor characteristics, and phenolic profile changes were investigated for pomegranate wine during winemaking. The survey proved that the wine had an adequate antioxidant scavenging capacity for free radicals, regardless of the minimal losses in antioxidant activity and polyphenols after fermentation. The study also proved that pomegranate wine has a high phenolic compounds amount and displayed outstanding flavor characteristics. The TPC and radical scavenging trend during fermentation and aging designate that the wine has crucial antioxidant abilities, making it an excellent healthy beverage for human beings.

Reference

Lan, Y., Wu, J., Wang, X., Sun, X., Hackman, R., Li, Z., & Feng, X. (2017). Evaluation of antioxidant capacity and flavor profile change of pomegranate wine during fermentation and aging process. Food Chemistry, 232, 777-787. Web.

The study of material objects such as weaponry, jewelry, clothing, or even cooking utensils created during a certain historical period can give researchers valuable insights into the culture of a certain society or a country. Moreover, in this way, one can better understand the ritualistic practices adopted in the community. So, this approach can be useful for examining the life of past generations.

The museum exhibit, which has been selected for the discussion, can be used as a primary source for the study of Chinese culture, which existed before the Common Era. In particular, one should speak about the Late Shang Dynasty, whose legacy continues to be studied by modern historians. Overall, this material object can be distinguished among others due to its unique tracery, age, and the fact that it is very well-preserved. Furthermore, this exhibit can throw some light on the ceremonial practices developed in China and the material culture of this society. These are the main questions that should be elaborated more closely in this essay.

This object is a ritualistic wine vessel, called zun. One should bear in mind that such vessels began to be manufactured during the Shang Dynasty (Z. Li 63). This zun was created during the period between the thirteenth and eleventh centuries before the Common Era. Its color is a mixture of green and grey; however, one should keep in mind that the original coloring of this vessel might have changed profoundly during more than three millennia (S. Li 53).

So, this object could have a different physical appearance in the past. This object was made of bronze; it should be noted that this alloy was widely used during the Shang Dynasty. In fact, the bronze ware, which was created during this period, continues to fascinate art critiques and historians who are impressed with the skill of Chinese artisans (Howard 35). This vessel could be produced in the Yellow River Valley because this is the region where Shang Dynasty ruled (Z. Li 63). Similar vessels are often found in this particular area (Z. Li 63). Nevertheless, this is only an assumption that cannot be fully confirmed now.

This vessel has a cylindrical shape, and it is a common form of zuns created during the Shang Dynasty. Yet, one should bear in mind that Chinese artisans created vessels that resembled animals and birds (Howard 36). So, one can find even more sophisticated examples of bronze ware (Howard 36). This exhibit is approximately 30 centimeters in height, and in comparison with other zuns, it is relatively high. So, these are some of the details that immediately attract the attention of the viewers.

Judging from the physical characteristics of this object, one can deduce that it is a vessel, which was needed primarily for the storage and transportation of some liquids. For example, one can speak about a different beverage that could be popular in China during that period. This is probably the first assumption that a person can make when he/she sees this vessel for the first time. Nevertheless, it is not immediately obvious this object was used for holding wine during religious ceremonies such as burials (Z. Li 63).

There is no visual evidence that can support this hypothesis. This is one of the aspects that should not be overlooked. This is why I wanted to know how historians determined the exact purpose of zuns. My intention was to understand what kind of sources I could study in order to reach this conclusion. This was a question that puzzled me. Certainly, one can assume that this zun could not be afforded by poor people. It should be borne in mind that this vessel is adorned with very complex ornaments, and it is a great example of artisanship.

So, it is rather unlikely that this vessel could be used by poor peasants on a daily basis. Nevertheless, such an object could be owned by a courtier or a wealthy merchant, and these people might not necessarily use it only during ceremonies. This was the main cause of ambiguity. According to historians, there are some textual records suggesting that similar zuns could be used in ceremonies (Howard 35).

These historical records suggest these vessels were necessary for providing a symbolic offering of wine to the deceased people (Howard 35). This example indicates that historians can rely on various sources in order to understand the material culture of people and their lifestyles. This approach is necessary for supporting the hypotheses that historians can make in the course of their research. This is one of the arguments that can be put forward.

To a great extent, this museum exhibit indicates that during the Late Shang Dynasty, Chinese people created a very sophisticated material culture. For instance, they were able to process metals and create alloys such as bronze. At that time, this technological achievement was not very widespread in other regions of the world. This is one of the main details that can be identified. Additionally, one can argue that Chinese culture incorporated abstract art, which could give rise to various interpretations. This idea can be demonstrated with the help of complex ornaments envisioned by Chinese artisans.

Moreover, this vessel contains some symbols that resemble hieroglyphs. Therefore, one can assume that this society developed a written language, and this was a remarkable cultural achievement by the standards of that period. Thirdly, if a person learns more about the history and usage of zuns, he/she can argue that the representatives of this culture accepted the idea of an afterlife. In particular, they assumed that people could interact with their deceased relatives and express their respect for them (Howard 35). These are some of the main details that be singled out. Certainly, such generalizations should be supported by other evidence such as textual documents, engravings, or pictures; otherwise, they may seem too far-fetched and even flawed. Still, such an exhibit can be used as a starting point for a historical discussion.

Overall, this discussion shows that museum exhibits can be very informative for people who study the culture and history of a particular country. The vessel, which has been discussed, indicates that the Late Shang Dynasty achieved considerable material prosperity before the Common Era. This zun can be described as a primary source, which can help historians understand the lives of people who lived in China during the period between the thirteenth and eleventh centuries before the Common Era. In particular, they adopted complex ritualistic and ceremonial practices. Moreover, their technological progress was also very considerable, especially in comparison with other societies that existed during that time. These are the main aspects that can be singled out.

Works Cited

Howard, Angela. Chinese Sculpture, New Haven: Yale University Press, 2006. Print.

Li, Song. Chinese Bronze Ware, Cambridge: Cambridge University Press, 2011. Print.

Li, Zhengping. Chinese Wine, Cambridge: Cambridge University Press, 2011. Print.

Case analysis

It is evident that the wine market in the United States is growing tremendously. The same can be evidenced in European countries. The improvement of the wine quality in recent years has proven that the demand for the product is high, especially in the United States. Moreover, the competition for the US market as a strategic and high priced wine market is an indication that the market is growing with time.

Moreover, the resuscitation of the old world wine producers in the European countries is an indication that wine market is yet to saturate. Over the years, the demand of wine has fluctuated as can be evidenced in the case study of the global wine war. Some of the factors that has affected this demand include, price, customer preferences, market distance, chain of distribution and wine quality (Anderson 278).

On the other hand, the supply of the wine has been affected by the following factors; the price of the product, wine producing technology, the price of related products such as beer, the climatic conditions of the wine producing countries and subsidies given to wine producers or grapevine growers. In the following discussions, the above aspects will be outlined in an in-depth manner.

As earlier indicated, the wine market is growing rapidly. An example of such is exemplified in the US wine market. It is asserted that with time a new generation of wine consumers started to prefer wine compared to conventional alcohol consumers in America. From this perspective, it is notable that majority of the Americans are used to liquor and beer (Bartlett 3).

However, with time, majority of the alcohol consumers started to understand the health benefits that are accrued from taking wine. As a matter of fact, American wine producers could not satisfy the domestic market, prompting more wine to be imported from the old world’s wine producers.

Another justification of the expanded market of wine is that some of the old world wine producers had already started to battle for a ready market of wine in America. The competition was largely contributed by price and quality factors. The Europe’s advance on the American market through various tactics is an example of a promising wine market. An example of such is evidenced by the subsidized marketing on wine products.

As a matter of fact, the subsidizing of these products is as a result of a European Union policy on agriculture. On the other hand, the American US producers have taken another role of rebranding the foreign wines as their own. Examples of such wine are the Italian wines; Ecco Domania and the Bella sera wines.

In order to determine the demand of wine in the wine industry, one has to consider the various factors that influence the commodities’ demand. In this case, the wine’s demand has incredibly changed or fluctuated over time. First, the price of the wine in old world wine producers was relatively high.

This is due to the fact that, wine was only associated with class and prestige. The increasing of the price affected the demand of the product and in due time, the demand of wine had reduced in many of the old world wine producing countries. Example of such is evidenced in Chile, Argentina and in Spain.

The entrance of the new world wine producers, namely; US and Australia, saw the reverse of this demand. The two countries ensured that wine was produced with the newest technology and made available at lower prices to many of the wine consumers. Relatively, this increased the demand for wine. America has a lot of alcohol consumers and their preference sometimes depends on the price of the commodity.

In the same context, the consumers’ preferences will determine the demand of the product in question. In case of the American wine consumers, most of them preferred the foreign wines. This was after the domestic wine producers in America started to increase the price of their wines (6). Moreover, some of the wine consumers in America believed in the authenticity of the wine blended in the old world.

This affected the demand of the local American-made wines, prompting for more wine imports into the country. Another reason that affects the demand of wine in America is the price of other alcoholic drinks such as beer and liquor (Bartlett 3). As indicated earlier, majority of the conventional Americans are used to beer and liquor. Beer and liquor can be termed as substitutes to alcohol. Since the prices of the two substitutes are relatively lower than wine, the demand for wine goes down.

However other factors such health benefits make more of the Americans consume wine than other alcoholic drinks. However, a higher demand on wine does not make beer and liquor inferior. The superiority of a commodity depends on the preference of the consumer. Majority of the wine consumers in the US are well endowed people, well educated and internet savvy. According to the case study on the global wine wars, the US wine clientele is also termed as price-sensitive (6).

This exhibits the sophistication of the US wine consumers. This means that they have the ability to buy wine regardless of the price, but with certain considerations; utility. The wine consumers want to buy a product of value and which they consider as quality. This is the reason they prefer low-priced wine from foreign countries, and which they still believe is still of good quality.

Supply is another major aspect to consider when discussing the wine industry in the US. According to Amerine and Josyln (146), the supply of wine into the US market has been influenced by factors discussed herein. Firstly, the price of the commodity in the US was relatively high considering that the product was under strict regulations (Bartlett 2). On the other hand, most of the old world wine producers had little wine production capacity.

This made the new world wine producers monopolize their market territories making the price of the commodity go high. In most of the European countries, the price of the grapevines was bought relatively low by the merchants and other corporations that were involved in large-scale wine production. The price of essential factors that contribute to production of wine such as land or labor can either reduce or increase the supply of the commodity.

For example, the fragmentation of land in many of the European countries like Germany and UK reduced the supply of wine. In this case, farming of the grapevine was done in small-scale and only few growers supplied the vines. On the other hand, large tracts of land in both Australia and America were used as vineyards. With time, the new technology used in producing wine by the new world made it easier to reduce labor and all costs associated with land and production (4).

Therefore, this reduction of the production costs increased the supply of wine in the expanding of wine market. Thirdly, the government’s action to subsidize farmers who had vineyards and wine making companies ensured that some of the old world wine producers supplied more wine.

Works Cited

Amerine, A., Maynard and Josyln, A., Maynard. Table wines: The technology of their production, Volume 2. Berkeley, CA: University of California Press, 1970. Print.

Anderson, Kym. The world’s wine markets: Globalization at work. Northampton, MA: Edward Elgar Publishing, 2004. Print.

Bartlett, A., Christopher. Global wine war 2009: New world versus old. Harvard Business School Case Study, August 13, 2009. Print.

Introduction

The Australian wine industry has experienced an unprecedented expansion in terms of sales and profits in the last three decades. However, the current business environment is unsupportive and the industry is facing major challenges in maintaining profitability. Wine is traded globally and this means that the industry players have to consider the situation in the international market. The success of the Australian wine industry largely depends on the demand and supply of the product internationally (Warren 2).

The international wine industry has the problem of excess production which has contributed to supply that is much greater than demand. This has inevitably put a downward pressure on the price levels in the industry. The current position in the market indicates that it will be many years before the global wine stocks reduce and the prices increase (Sheales et al 2006).

The situation has necessitated a change in production and consumption in the main producing and consuming parts of the world. This has presented opportunities for growth for the Australian wine industry. However, there are substantial threats to the long-term success of the industry (Hutton 29).

The history of Australian wine

To better understand the conditions in the Australian wine industry, it is necessary to consider the history of the industry. The story of the wine industry in Australia has not always been so rosy. It is only recently that the industry has picked up and became a significant part of the international wine industry.

According to Love, the Australian wine industry had very humble beginnings when Governor Phillip and Phillip Schaeffer started it in 1780. Unfortunately, these attempts were unsuccessful because of mismanagement and disease. The first wine producer to export wine was Gregory Blaxland who carried out experiments to find out the best way to grow vines in the Australians climate (Kelly 5).

When immigration began in the 1840’s, a number of vineyards were established in Australia, some of which are still operating today. This led to a rapid expansion of the industry. The stringent regulations that governed the industry were done away with thus, there was a doubling of the hectares set aside for vineyards.

The increase in production was also attributed to the distribution of guides and manuals that educated farmers and producers on viticulture (Warren 4). It is in the 1900’s that the industry burst into mass production and wine was being sold using private brands instead of in mass. After 1960, the industry bloomed into a lucrative investment which saw the Australian wine industry being ranked as the fourth biggest producer globally (Love).

The international wine industry

The worldwide consumption of wine has increased only marginally in the last three decades. This has created a lot of concern for the producers of wine because the situation means that there is very little room for growth in the industry (Warren 3).Wine has lost to competing products such as spirits and beer.

Between 2000 and 2004, the worldwide consumption rate of wine increased by only 0.1 percent in comparison to 2.2 percent for alcohol. Consumption of wine has reduced significantly from and average of 7.1 litre in the period between 1961 to 1964 to 4 litres in 2000 to 2004 (Sheales et al 15).

Determinants of demand in the wine industry

There are a number of factors which affect the demand of wine internationally. Determining the future consumption of wine is very complex as these factors may change with time. The main factors influencing wine demand are consumer incomes, age structure of the population, tastes or preferences and societal traditions (Sheales et al 8).

The key influencers of changes in demand in the United Kingdom and the United States are increasing incomes, variation in lifestyle and preferences. In china and Russia, increasing incomes and enlarging middle class have increased the consumption of wine (Bisson et al 697).

According to Sheales et al (12), the wine consumption increases with a rise in income and decreases as prices rise and the population over 65 years increases. Demographics of a market should be considered as it is the people between 30-60 who consume the most wine. This can be useful in the prediction of future trends in demand. Knowledge of the number of young people and the percentage that take wine is vital for the wine industry (Sheales et al 12).

Main export markets of Australian wine and their demand

It is important to consider the different countries which form the main market for the Australian wine. The main export markets are the United States, the United Kingdom, France, Italy and Spain (Anderson 24). The consumption of wine in the United Kingdom has increased significantly from an average of 1.7 litres per person to 17 litres. It is presumed that the rising income, changing tastes and lifestyles have caused this.

There has been an increase in exports of Australian exports to the United Kingdom. Increasing the market share of the wine industry in the UK has been very crucial to the Australian wine producers. Retail consolidation is likely to make it difficult to sell wine to supermarket chains thus the wine industry will be very competitive. The Australian wine producers need to take advantage of the opportunity to sell wine in restaurants in the United Kingdom (Sheales et al 24).

The consumption of wine in the United States has increased since the 1980’s from 8 litres to 10.4 litres per person in the year 2005. There is a large diversity of wines in the United States in terms of price and quality. This presents the opportunity of increased familiarity thus the US consumers can be persuaded to buy higher priced products. However, the export of Australian wine to the United States in the recent past has mainly consisted of low priced variety (Sheales et al 24).

When the demographics of the American market are taken into consideration, it is clear that there will be some problems for the Australian wine producers who export to the country. It is expected that there will be a reduction in the consumption of wine because of the changes in demographics of the United States. It is estimated that the proportion of the number of people who are over 65 years old will increase to 25 percent of the total population in the near future. (Sheales et al 25).

International wine production

In order to effectively realize the future of the wine industry, it is important to examine the international trend of wine production. Currently, the production of wine globally is increasing. Conversely, there has been a reduction in the production in the two largest wine producing countries i.e. France and Italy.

This presents an opportunity for the Australian wine producers to increase sales. Even with the decline in production by Italy and France, these two countries are still the largest wine producers in the world. Australia’s wine production has also increased by more than 1 billion litres between 1990 and 2004. This is an increase of about 230 percent (Kelly 60).

The European Union has come up with policies which are bound to affect the wine producers in Australia. The policies that are implemented by the European Union have a major impact on the international wine industry because France, Spain and Italy produce half of the world’s wine. The policies by the European Union are aimed at improving their competitive position in the world wine market. In addition, the rules and regulations governing the wine industry within the European Union are to be simplified (Sheales et al 25).

In the long run, there will be some negative effects in the wine markets due to the European Union policies. The wine producers in the European Union will enjoy increased competitiveness in the world wine market.

Simplifying the regulations that concern labelling, quality and other winemaking processes will improve the flexibility and efficiency of the European wine makers thus making them more competitive. A less regulated market will make it difficult for smaller wine producers to compete with the European producers (McCarthy and Ewing-Mulligan 215).

The implications for the Australian wine industry

The Australian wine industry is heavily reliant on exports for sales. Although the country is successful in exporting to the overseas markets, it is still a very small wine producer internationally. Therefore, it is a price taker and cannot have much influence on the price of Australian wine in the world market.

Competition from other producers has made it imperative that the Australian wine makers improve their position through marketing internationally. In addition, the wine producers have to carry out market research to ensure that the product they are offering is profitable. (Kelley 6)

Australia’s position in the world wine market

Australia is among the countries referred to as New World producers. Other such wine producers include South Africa, New Zealand and Chile. In the past this producers had a negative publicity and were regarded as mediocre in terms of quality. Most importers preferred European wine as they had a superb reputation worldwide.

However, today, the New World producers especially Australia have become a force to recon with in the world wine market (Aylward and Zanko 2). Since Australia is separate from other wine manufacturers especially Europe, it developed its own winemaking technology. This has contributed to the unique and distinct Australian wine (Sharpe and May 180).

Australia’s success in the world wine industry can be attributed to the role of the Australian Wine Research Institute and the Cooperative Research Centre for Viticulture. The institutions provided advice, wine education, brand development and trade. The industry was able to work with a common purpose, set targets and developing a yardstick for the entire industry. The focus was to ensure that the production process was geared towards satisfying the consumer needs (Aylward and Zanko 4).

According to the South Australian Research and Development Institute (3), innovation and creativity have to be employed if Australia is to retain and improve its position in the world wine market. The country aims to improve the infrastructure that supports the wine industry so as to enhance the wine industry’s competitive advantage. Research and development initiatives have been put up including recruiting and retaining the best researchers (SARDI 1).

The effects of the changes in the exchange rate should be considered because most of the sales of Australian wine are to external markets. The exchange rates create greater risk for the producers of wine as they may not achieve the expected profits levels. A decrease in the interest rates will reduce the profits and this may discourage wine producers from dealing with customers from a specific country. (Sharpe and Danny 182)

The current global financial crisis

The on-going global financial crisis has affected almost all industries and the Australian wine industry is not exception. The latest export figures have shown a decrease in the wine exports. The Australian wine exported was 11 percent less in volume and 18 percent less in value in the year 2008. In addition, the value per litre of wine fell by 7.6 percent. The Australian wine producers have to find ways to cope with this problem otherwise this industry will tumble (Sheales et al 43).

The financial crisis has also affected demand from the key markets such as the United States and the United Kingdom. The total value of wine exports to the United Kingdom dropped by 18 percent while those of the United States fell by a whooping 26 percent. Although there has been a downward trend in most markets, China was positive as the exports to china increased by more than 32 percent (Alibaba).

Wine tourism

Wine tourism is an important business strategy which assists small wine producers to increase their sales thus enhancing profitability. The tourists get an opportunity to talk to the wine-maker and tour the cellar. In addition, the tourists are given a total winery experience where they can learn and enjoy themselves. There is wine tasting and other activities which ensure that the tourists really experience the winery (Charters 59).

Australian wine producers have fully embanked on wine tourism. There are wine related events and occasions that are carried out in different parts of the country. For instance, Canberra District hosts an event called ‘The days of Wine and Roses’ where local hotels and restaurants are hosted. Wineries showcase their products so as to educate the public on the wine and winemaking process. The Wine Tourism Development Executive is responsible for the success of wine tourism in Australia (Hall 95).

Like in any other venture there are some challenges that are being faced in conducting wine tourism. It has been difficult to create a whole tourist experience instead of only visiting cellars. The availability and dissemination of wine tourism information has also been quite challenging. (Hall 96)

The future of Australian wine Industry

The wine producers of Australia are currently bent on products of superior quality in response to the conditions at the world wine market. It had become apparent that other New World producers of wine are also improving on the quality of their product. On the other hand, there is a significant decline on the consumption of wine.

This means that Australian wine producers have a great challenge in terms of maintaining or even improving their position (Warren 3). Although market conditions are difficult, the Australian wine industry can continue in its growth. The industry can develop and thrive if it utilizes the opportunities in the market and manages any threats to its continuity. (McCarthy and Ewing-Mulligan 215)

The producers have to enhance their competitiveness in the world market by ensuring that the industry runs in an efficient manner. Therefore the production, marketing and operations costs have to be as low as possible. This will ensure sustainability in the market even when the Australian wine producers are only price takers.

The industry and individual companies have to be innovative, adaptive and flexible. Failing to take this into consideration will destroy this industry which has been built for the past three decades. The differentiation of Australia’s wine products in the market will give a competitive edge over other competitors (Anderson 267).

From the above evaluation, it is clear that the Australian wine industry has room for growth. However, the growth rate may be at a lower rate than the in previous years because of issues such as a declining international consumption of wine and the global financial crisis. The expansion of the industry will be enhanced by the increased innovation and creativity that the industry has been involved in. Innovation will set the Australian wine industry apart from other competitors particularly those from Europe

(SARDI 1).The industry will face certain challenges such as increased competition from the Old World producers such as France, Italy and Spain. The policies that have been proposed by the European Union will improve the position of European producers (Warren 5). The Australian wine producers can deal with this set back by increased marketing and innovation. Australia has an impressive history in the global wine market and it is safe to project its continued success (SARDI 1).

Works Cited

Alibaba. “Australia’s Wine Industry at a crisis crossroad.” Alibaba, 19 Jan 2009. Web.

Anderson, Kym. The World’s Wine Markets: Globalization at Work. Massachusetts: Edward Elgar Publishing, 2004. Print.

Aylward, David and Clements, Michael. Crafting a local-global nexus in the Australian wine industry. Journal of Enterprising communities. 2.1 (2008): 73-87.

Aylward, David and Zanko, Michael. “Emerging Inter-organizational Structures in the Australian Wine Industry: Implications for SME’s” University of Wollongong. 2006. Web.

Beeston, John. Concise History of Australian wine. Australia: Allen & Unwin, 2001. Print.

Bisson, Linda et al. The Present and Future of the International Wine Industry. Nature. 418. (2002): 696-699. Print.

Carlsen, Jack and Charters, Stephen. Global wine tourism: research, management and marketing, Oxford: CABI. 2006. Print.

Hall, Colin. Wine tourism around the world: development, management and markets. Oxford: Butterworth-Heinemann, 2000. Print

Hutton, Wendy. Food of Australia. Boston: Tuttle Publishing. 1999. Print.

Jordan, Rohan, Zidda, Pietro and Lockshin, Larry. Behind the Australian wine industry’s success: does environment matter? International Journal of wine. 19.1 (2007): 14-32. Print.

Kelly, A. C. The vine in Australia. Oxford: Sands, 2007. Print.

Love, Ian. “A History of Australian Wine.” Street Directory. 2009. Web.

McCarthy, Ed and Ewing-Mulligan, Mary. Wine for Dummies. Indiana: Wiley publishing, 2006. Print.

Merrett, David and Howard, Dick. The internationalization strategies of small-country firms: the Australian experience of globalization. Massachusetts: Edward Elgar Publishing, 2007. Print.

O’Neill, Martin and Charters, Steven. “Service quality at the cellar door: implications for Western Australia’s developing wine tourism industry” Managing Service Quality 10.2 (2000): 112-122.

SARDI. Innovation drives wine industry. Government of South Australia. June 2009. Web.

Sharpe, Andy and May, Danny. The Only Wine Book You’ll Ever Need. MA: Adams Media, 2004. Print.

Sheales, T et al. “Australian Wine Industry” Challenges for the future. ABARE. 2006. Web.

South Australian Tourism Commission. Wine tourism strategy 2004-2008. 2004. Web.

Warren, Chris. Australia Wine – A Beginner’s Guide. Ottawa: The Pocket Sommelier, 2009. Print.

Zanni, Lorenzo. Leading firms and wine clusters: understanding the evolution of the Tuscan wine business through an international comparative analysis. Milano: FrancoAngeli, 2004. Print.

Mission Statement

The goal of this marketing campaign is to assist the EWP (English Wine Producers) organization in creating greater interest and awareness of English sparkling wine both in local markets and abroad. Such a strategy will go beyond traditional marketing and instead will focus on utilizing online social platforms and E-commerce as a means of increasing interest for English sparkling wine (Chahal 2012, p. 10).

The reason behind such a choice stems from the growing utilization of numerous corporations of online social media and E-commerce as an effective marketing/sales platform for their products. With hundreds of millions of online users, social media platforms represent an efficient and above all effective method of utilizing an assortment of marketing strategies in order capture a wide variety of consumer demographics.

Best of all, given the limited budget of the EWP, online social media is a far more affordable solution to promoting the products of local wine growers on an international scale as compared to traditional methods which could cost several million pounds or more. It is based on this that this marketing campaign will focus on the development of an effective online social media platform and E-commerce platform which utilizes different strategies of promotion in order to promote English sparkling wine to both local and international consumers.

Main Objective

– To increase the general awareness of English sparkling wine to domestic and international consumers

Online social networking

-To create an effective marketing plan utilizing online social networking which would enable the EWP to potentially access millions of consumers online.

-To indicate the cost savings that can be obtained by utilizing online social media as the primary method of promotion for English sparkling wine

-To show how patronage through YouTube stars and viral marketing campaigns could increase the general awareness of consumers regarding the products of the EWP.

-Lastly, this marketing will seek to show how integrating online E-commerce into the current business platform of the EWP will result in more customers through greater accessibility to the products that the organization is promoting.

Marketing Objectives

-To increase the amount of English sparkling wine sold to international client’s by 100% within the next year

-To create an effective means of enticing the target population to purchase English sparkling wine on the basis of taste, convenience and novelty as compared to other types of wine

– To increase the number of visits of local tourists to the various English vineyards in order to increase the level of general awareness regarding England’s wine industry.

SWOT

Strengths

When examining the case of English sparkling wine, it can be seen that the product has a considerable level of potential given the generally positive responses to it as stated by the EWP. Combined with the increased awareness of the local population regarding the presence of a regionally distinctive type of wine that is unique to England, this would of course result in a considerable level of patriotism resulting in the possibility of increased local sales of English sparkling wine (Agarwal, Ellig & Zywicki 2004, pp. 10-11).

Based on Mintel research data which has examined the impact of U.K. sparkling wine since it entered the market, 69% percent of present day consumers within the U.K. prefer sparkling wine as compared to champagne. In fact a gradual progression has been shown wherein since 2007 there has been more sparkling wine sales in the country as compared to champagne by a factor of 18 percent. This is indicative of strong local demand within the U.K.

Weaknesses

The main weakness of the EWP and the wine that it promotes is the fact that it is entering rather late “into the game” so speak when taking into consideration the presence of numerous international wine brands from Europe and even the U.S. When taking into consideration the amount of time these brands have had in establishing their respective markets it can be seen that English sparkling wine has a long way to go into terms of establishing a proper niche in an already overly saturated wine market (Benfratello, Piacenza, & Sacchetto 2009, pp. 2197-2209).

Based on research data from Mintel, one of the current problems with English sparkling wine at the present is a lack of sufficient brand development due to its association with British wine. Consumers often think that English Sparkling Wine and British Wine (which is made from imported grapes) is actually the same thing.

This is a detrimental association given that the quality of British wine is towards the lower end of the spectrum as compared to its locally grown counterpart. This is indicative of the necessity of further brand development to the extent that consumers need to know the difference otherwise the association could damage the brand’s reputation in the long run.

Opportunities

Opportunities for EWP come in the form of the growing Asian and South American markets which have yet to achieve the same level of market saturation seen in the wine markets of the U.S., U.K. and Europe.

Taking this into consideration, one possible opportunity for expansion would be to market English sparkling wine to these newly developing markets and establish a sufficient enough level of market penetration to make English wine the luxury drink of choice for the local population (Bicknell & MacDonald 2012, pp. 172-184).

Threats

The main threat for the EWP comes in the form of the current financial downturn which has impacted the U.S., U.K, and European markets. Suffice it to say this has resulted in a considerable reduction in wine sales within the past 4 years with no end in sight for the current economic turmoil that the global economy finds itself in at the present (Chung & Austria 2010, pp. 581-586). Should the global sale of wine continue to be adversely affected it is likely that this could have a disastrous effect on England’s wine industry.

Situational Analysis

Brand Recognition

One of the initial problems the EWP will experience when attempting to entice foreign and local buyers is brand recognition. Branding is an important aspect of selling products since it is the manner in which consumers differentiate one product from the rest in terms of what the brand represents such as quality, product longevity and popularity (Bouzdine-Chameeva & Galam 2011, pp. 871-885).

The fact remains that it is likely that there are already well established brands within the targeted markets with similar products lines as that of English sparkling wine. Europe itself is known as the wine capital of the world and, as such, there is already an assortment of local brands that are popular with local consumers (Bouzdine-Chameeva & Galam 2011, pp. 871-885).

This creates a distinct problem when entering into a new market since it is likely that consumers would choose a brand they know and are used to rather than a relatively unknown brand that they have never seen before.

Another factor that the organization should take into consideration is that competitors in the U.S. (i.e. California Red Wine) and the U.K. may in fact be well entrenched within the markets that the EWP wishes to enter resulting in the possibility of a price war or a certain degree of difficulty entering into the desired retail market.

There is some good news in this regard though, sales of sparkling wine within the U.K. have shown a considerable increase within the past few years and Mintel data has shown that it has beaten Champagne in the local market by 8%. The reason behind this is connected to growing brand awareness, general taste and growing popularity in the local market. This means that English sparkling wine has the potential to go beyond the current local market and encapsulate a wider international audience.

One way of overcoming this was actually shown by Wal-Mart when it entered into the Chinese market, what the company did was bring in its own business model into China yet adjusted its product lineup to include local favorites that would be bought by consumers.

What can be done in the case of EWP is that the products it promotes can be changed somewhat to match the local culture of our desired markets. This can come in the form of products that conform to an aspect of cultural tradition, local necessity, or basically an aspect related to local popular culture. By doing so, not only will the EWP be able to gain a new market for its products and services but it will be able to expand its own product line.

Economic Recession

The current problem with the wine market within the U.K., U.S. and European economies is the fact that consumer spending is at an all time low due to the 2008 – present day economic downturn (Clemente-Ricolfe et al. 2012, pp. 185-202). However, such a situation can actually be considered advantageous for English Sparkling wine given its lower price point compared to champagne.

As it can be seen from the following graph from Mintel, price has been a factor that has been influencing consumer choice between English Sparkling wine and Champagne. With low levels of economic activity within the U.K., more consumers are choosing to purchase English Sparkling wine due to its affordability. Such a scenario could similarly be utilized in other markets wherein the EWP could promote the wine as a better and more affordable option as compared to champagne.

Unfortunately, the inherent problem with the current situation is that it creates a vicious cycle wherein low consumer spending results in companies reducing various aspects of their operational capacity (i.e. manufacturing of products, low level employees etc.) in order to remain in business which results in even lower consumer spending since people do not have jobs to support themselves anymore (Clemente-Ricolfe et al. 2012, pp. 185-202).

An example of the effect of such a behavior by major corporations can be seen in the U.S. wherein up to 8% percent of the population is unemployed due to workforce cutbacks employed by various companies in an attempt to continue to remain viable despite lackluster local demand.

Another global factor that should be taken into consideration when conducting business operations is the current debt crisis in Europe that was brought about through not only the reckless actions of various banks within region (as seen in the case of Ireland) but also through government mismanagement of finances (seen in the case of Greece) and exposure to a reckless housing market (the case of Spain) which has also adversely affected domestic manufacturing within the U.S. Such factors have taken a steep toll on the wine market with up to 30% of profits effectively wiped out in period of 6 months immediately during the aftermath of the 2008 recession with only a marginal improvement on domestic sales within the U.K. and Europe since the latter half of 2012.

Domestic Competition

Despite the attempts of the EWP in increasing general awareness within the country as well as in Europe regarding the quality and flavor of English sparkling wine, the fact remains that there is still considerable competition within the domestic wine market. Brands from California, France, Spain and Italy continue to capture the attention of local consumers more so than local brands (Marks 2011, pp. 245-263).

The following data from Mintel shows that English Sparkling wine has a considerable level of local competition and controls only a small portion of the local wine market as compared to other wine types.

The inherent problem with brand promotion of locally produced wine in domestic markets originates from the fact that other brands and vineyards have simply been around longer resulting in better brand awareness and consumer patronage (Parker 2004, pp. 1-106). As a result, this shows the necessity of developing a marketing strategy that can either enable the EWP to get around the sheer strength of well known international brands or get around them somehow in a creative fashion.

Marketing Strategy: Central Awareness Campaign

Shifting to New Consumer Markets

With low consumer spending and an atmosphere of economic uncertainty which pervades the domestic markets within the U.S., U.K. and Europe, this has resulted in wasteful operational costs for local win producers in the form of storage, utilities, taxes, worker salaries and employee benefits for unsold products. The fact is the current consumer market situation within the U.K. is not conducive towards sales and, as such, the EWP has suffered as a direct result (Hilger et al. 2011, pp. 1289-1296).

One possible avenue of approach that was determined by this market strategy was to shift resources towards foreign markets which have not been as adversely affected by the current economic downturn and focus efforts there instead of in cathartic local markets.

Asian markets such as those within China, Japan and the A.S.E.A.N (Association of South East Asian Nations) presented themselves as viable consumer markets due to the fact that despite the slowdown of various western economies, eastern economies have actually grown on average by five to eight percent annually (Bruwer & Buller 2012, pp. 338-355; Wei & Xueguang 2011, pp. 1435-1448)).

This is due to the fact that as the expense of doing business within western nations rises companies start to shift their manufacturing operations to other countries with far lower operational expenses. In response to this, various businesses have focused on expanding their product promotion strategies into such regions. Aside from Asia, other possible international consumer markets could be Australia, Canada, and even South America given the increase in economic activity within such countries/regions (Parker 2010, p. N.PAG).

Utilizing Online Social Media Platforms for Promotion

Introduction

The sheer proliferation of social media platforms such as blogs, wikis and online forums has created an unprecedented opportunity for EWP to take advantage of this new social trend in order to promote particular products and services via online social platforms (Dillabough 2004, p. 12).

Nearly 22% of all online activity within the U.S. alone (which is one of the largest wine markets in the world) is spent on social networking websites and, as such, is indicative of the consumer market share that social media platforms could potentially provide to the EWP should it utilize such a marketing tool (Dillabough 2004, p. 12).

Cost-Benefit Standpoint

It has been proven using social media programs such as viral marketing initiatives that a certain degree of “hype” can be generated for a particular product or service yet only cost a fraction of a standard advertising campaign (Gil-Or 2010, 7-14).

Thus, from a cost-benefit standpoint, the utilization of social media platforms as marketing tools is not only advantageous for the EWP in terms of brand promotion and gaining a certain degree of market penetration into potentially untapped consumer segments but it can do so at a relatively low cost and, as such, presents numerous potential avenues of approach by which the EWP can generate consumer awareness of its products (Gil-Or 2010, 7-14).

Utilizing Facebook

One way of utilizing social media in advertising the wines of the EWP is to create a Facebook fan page for the company in order to help better connect itself with its current customer base. What must be understood is that by creating a fan page this allows subscribed Facebook fans to receive updates from the organization in the form of product launch dates, overall product availability, performance and other factors that can contribute to its sale.

In fact, a fan page creates a “human” face for the organization in that by posting daily news regarding the particular industry the organization is in, this helps consumers to better understand local wine producers in England and thus create a greater degree of product awareness which translates into a higher likelihood of product patronage and sales (Quinton & Fennemore 2013, pp. 36-51).

It is also interesting to note that through the fan page the EWP can also better facilitate particular promotions such as discounts, special contests and other such methods of promotional marketing that are meant to entice greater public interest over a particular wine or vintage.

Various companies ranging from the alcoholic beverage maker Jack Daniels to the computer manufacturer Asus have Facebook fan pages and this has enabled them to create a larger consumer fan base since instead of the company merely being a nameless entity that consumers buy products from, it is subsequently transformed into an entity with particular views, positions on current events and even a sense of humor when it comes to posting its daily wall posts (Zeisser 2010, pp. 28-30).

It is based on the various perspectives that have been elaborated on that it is highly recommend that the EWP venture into at least some form of social media marketing in order to better connect itself with its customers.

There is little risk in utilizing this particular marketing tool and the potential rewards are massive in terms of greater brand awareness, better consumer relations and the creation of a particular image for the organization that goes beyond merely being a business entity but rather is one connected to an open attitude regarding current events, the needs of consumers and being an organization that is modernizing instead of being stuck in the dark ages of consumer marketing (Taplin 2012, pp. 229-246).

Promoting the Destination and the Product

Data Collection

Collecting data from consumers will incorporate the use of online social media marketing in order to obtain large amounts of data within the span of the EWW. One of the current trends in online social media has been the use of online giveaways in order to increase the number if followers on a Facebook or Twitter page.

This is done either by liking or sharing a post or by having consumers register on a site. Such a technique can be utilized wherein through a Facebook marketing campaign that would give away free wine to a lucky consumer, all that would need to be done is for them to register their complete contact details and email address on a designated site.

It is expected that through this method, EWP will be able to develop and extensive consumer contact list that they can use for future events. The same technique can be utilized in the case of YouTube stars wherein they could advertise that a luck customer could win a free trip to a winery in England and all they would need to do is register on a site connected to the EWP.

By utilizing these widely used methods, it is expected that the EWP will be able to generate a consumer contact list consisting of hundreds of thousands of individuals from all around the world.

Advertising Through Social Media: YouTube Stars

Various forms of consumable media in the form of print ads, billboards, commercials, online marketing campaigns and a plethora of other types of advertising initiatives are rife with the images of various popular individuals showing just how prevalent product endorsements are in the advertising campaigns of numerous companies (Kalpaklioglu & Toros 2011, pp. 4112-4129).

The logic behind this particular method of advertising stems from the fact that people are more likely to purchase a product or utilize a particular service if they see someone else happily using it, studies even show that the likelihood of product patronage goes up astronomically if it is seen that a pop culture icon is utilizing a particular type of product (Kalpaklioglu & Toros 2011, pp. 4112-4129).

This speaks volumes of the influence of pop culture on consumer buying behavior however it is also indicative of the fact that companies are aware of what causes consumers to purchase a particular product and act accordingly in order to exploit it.

Yet, the inherent problem with using popular culture celebrities is the fact that they are often quite expensive and demand millions of pounds in fees. An alternative strategy that this marketing strategy has devised that overcomes this particular problem utilizes YouTube stars as a means of promoting the sparkling wines of England.

On average, YouTube stars such as Ray William Johnson, Philip DeFranco, Shane Dawson, Smosh and others like them often generate millions of views per video, greater even than some shows on cable television. Furthermore, these shows are watched by a global audience encompassing countries such as the U.S., China, Russia, Australia, and various states within the European Union.

This would enable any marketing campaign that centers on the use of such YouTube stars to in effect target a wide range of consumer markets at a relatively low cost. YouTube stars in general do not demand a lot of money for placing ads within their show; it is usually the case that by providing a promotional code or a link in the description of the video, the company that created an advertising contract with them usually pays on the basis on the number of clicks.

This averages to around $1,000 or less on select advertising and promotional deals; this is a vast difference when compared to the millions demanded by A-list stars within Hollywood. You also have to take into consideration the fact that YouTube stars can come from a variety of different countries wherein they have a distinct level of popularity with the local populace.

Based on this, a marketing campaign could spend half the amount of money that would normally go to an A-list star yet reach 20 times the intended audience demographic by utilizing a select marketing strategy devoted to using YouTube stars from specific regions that cater to the audience demographics that the campaign is attempting to appeal to.

Sponsored Links, Promotional Codes and Banners

The best way in order to fully utilize the viewership of a YouTube star is to have them sponsor English sparkling wine by having them mention it then have them point to either a banner location on the screen, a promotional code the viewers can use to get discounts or a link in the description of the video where viewers can go and visit a website detailing the various packages for English Wine Week they can avail of.

This is often the strategy Netflix uses on either the Philip DeFranco show or on Epic Meal Time in order to gain a substantial amount of subscribers to their services. The same strategy can be utilized on select YouTube stars from specific regions and through multiple shows.

By examining the viewership range and what type of viewers normally watch a particular YouTube star, the marketing campaign will be able to determine what star to use, how long should the promotion period last for and will be able to monitor the overall effectiveness of the campaign via the number of clicks on the link, the number of people watching the video or the sheer amount of times the promotional code is used.

Vloging a Sponsored Vacation

One potential avenue of approach is to arrange for an all expenses paid trip for the YouTube star to a select vineyard where they can vlog their experience to their viewership. Vlogging is a term that is a result of combining the words “blogging” (referring to act of publishing personal thoughts and experiences online for complete strangers to read) and “video”.

The vlogs of YouTube stars often generate a substantial degree of views due to the current obsession over “reality viewing” wherein people want to watch people living their lives as it unfolds. By having YouTube stars vlog their experiences within the vineyard for a few days, this in effect acts as type of commercial which shows cases the amenities and overall appeal of the location.

Since it comes from a personal perspective and not through a telegraphed and obviously one sided view of the vineyard, this in effect generates a unique appeal to the market segments that the marketing campaign is attempting to target (Ştefan and Coca 2011, pp. 468-471).

It must also be noted that the YouTube stars in question could also be potentially convinced to host their shows with a live background of the vineyard. This enables the marketing campaign to more effectively capture a larger audience without having to increase the amount of money paid to the YouTube star since they are already on an all expenses paid free vacation.

Measurement

The proposed method of measurement for the EWW will consist of combining the proposed E-commerce aspect of the wine sales with online social media concept. It is actually quite simple, through the social media platform consumers will be directed to the E-commerce landing page where they can purchase the wine that is being sold.

Since all customers that will be attracted through this marketing campaign will be directed through the E-commerce site, the EWP will be able to easily track the amount of sales within a given period and where in the world the sales are coming from. This can be done automatically through an installed program on the website which would enable easy tracking and the creation of a database of customers through the site’s registration option.

Traditionally the buying and selling of products and services has always occurred either through a face to face transaction, a letter of intent or even a simple phone call where a person places an order and pays upon delivery. Yet due advances in technology where the scale and scope of the retail industry has come to encompass a global market place the traditional processes by which this industry has always followed has started to change (E-Commerce 2004, pp. 22-24).

The internet has brought with it an unprecedented level of interconnectivity on a global scale through which more and more transactions such as banking and even retail are conducted.

Sites such as Amazon.com, EBay, Craigslist and numerous other online retail suppliers are able to sell items such as computers, books, desks, clothing and even furniture online all of which are growing indicators of a shift in consumer preference from buying their wants and needs through traditional stores to picking the convenience of the internet for all their shopping needs (E-Commerce 2004, pp. 22-24).

Various studies have shown us that modern day consumers are heavily influenced by the concepts of convenience and accessibility when it comes to their purchasing decisions.

The more convenient and accessible a particular product or location, the more likely it is that consumers will patronize it. What must be understood is that customers are more likely to spend more on a particular item so long as it was nearby and easily accessible as compared to getting the same item at a much cheaper price at a location that was much further off and less convenient.

E-commerce Method of Retail

It is based on this that this marketing strategy advocates the use of online E-commerce platforms as a means for consumers to buy English sparkling wine on an international scale without having to rely on local distributors to acquire the wine beforehand (Jones 2006, p. 4). This method of direct sales to consumers comes with numerous advantages, for example, it can easily be incorporated into the proposed use of online social media through banner or web links (Jones 2006, p. 4).

As a result, if a consumer has developed a certain degree of interest in a particular type of English sparkling wine through an online social media marketing campaign, they can immediately satisfy their curiosity regarding the product by purchasing it online. Not only that, the ease of purchasing the purchasing the products of the EWP would result in more consumers choosing English sparkling wine due to the overall ease by which they can purchase the product (Keenan 2000, p. 43).

Inherent Limitations

There are certain limitations though when it comes to the use of this particular platform, for one it requires two things in order to properly function:

1.) A constant connection to the internet.

2.) An online account connected to a customer’s credit card in order to process purchases.

The inherent problem with the first problem is that this requires a customer to access to an internet connect in order to actually order a product. The second problem is that not all customers have credit cards, even if a customer were to buy this type of product so long as they do not have a credit card to connect to their online account this basically renders this platform useless.

Budget

Forecasts and Financial Data

For this project it is anticipated that the promotional campaign will generate up to 10,000,000 pounds in sales within a single EWW week with a growth rate of 10 to 15 percent in the number of units sold within a period of 3 years. This assumes that within this given period of time no possible situation may arise that could result in a drop in consumer demand within this particular period.

Based on an examination of costs which arise with doing business which consists of the cost of promotion. branding expenses, online promotional expenses and the percentage that goes towards the owners of the space (15%) utilizes the total assumed cost is roughly 70,000 pounds.

This takes into account that the first day of doing business will actually be a loss for the organization due to the initial low sales rates and the amount that needs to be paid into services and associated fees. The highest cost for the business is the 50,000 pounds paid for the online promotion through YouTube stars and online Facebook giveaways. This rate takes into account the possibility of product spoilage as well as the possibility of unsold ingredients within a given week.

Year 1 estimate along with costs

Reference List

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Ynatai Changyu Pioneer Wine Company Limited is a Chinese wine company that produces and sells wine, brandy and tonic wine in the Chinese market as well as other international markets.

The company was established in 1892 and remains the largest and oldest wine producing company in the Chinese market. The cumulative wine output is estimated to be 80,000 tons annually (Changyu 3). The company has a 21 percent of the Chinese wine market share.

Sales Volumes

Amid the global recession experienced in 2007-2009, ChangYu was ranked by a Canadian research firm among the few wine companies that beat the financial odds to improve their market shares in foreign markets as well as earn a more strategic place in the global wine market (CN wine news (a) 2).

In the period between January and November 2008, the volumes of wine sales in the Chinese wine market registered a 32.9 percent increase (CN wine news (a) 3). In the global market place, Changyu was raked in the seventh place after attaining $890 million in 2008.

Wine enterprises that came before it included Constellation brands ($ 3358.8million), E&J Gallo ($3080 million), Foste’s Group ($1667.9 million), Castel-Freres ($980 million) and the Wine group ($910 Million). Earlier in 2007, Changyu had attained the 10^th ranking in the global market, and was ranked at 79^th place among the largest Chinese companies in the local market.

At the time, the sales revenue for the wine company was approximately 27 billion Yuan. Still, this was way below what market analysts believed a global wine company should have in terms of sales revenue.

Changyu’s general Manager said that the company was targeting attaining annual sales revenue of at least $ 1.5 billion annually (CN wine news (a) 11). To do this however, the company acknowledged that it would need to increase its production, adopt better sales techniques and move to newer markets.

Products

Some of the wine brands that have great sales potential include the 4 chateaus brand and the Jiebaina Brand. The latter registered 1,600 tones of sales in 2007, consequently earning the company 700 million Yuan, which translated to 40 percent of the total Changyu revenue in the same year. Overall, the company has products in the wine category, brandy, sparkling wine and healthy liquor (China daily 1).

Number of Stores

In China, Changyu has at least one distribution outlet in each province. The outlets sell wine and other products manufactured by Changyu to wholesalers only. The wholesalers on the other hand are mandated to deal with retailers, who sell the products to the consumers.

In the export market, Changyu has distribution networks in over 20 countries. The largest exporters of the company’s products include the United States, Netherlands, Thailand, Belgium and Singapore among other countries. Between 2001 and 2007, Changyu had only four wineries in New Zealand, Beijing and two provinces of Shandong and Liaoning (Underwood 5).

The company promoted these wineries at wine culture clubs and eventually managed to get more consumers to come aboard. This was in line with the “4+1” strategy that the company had earlier adopted.

The strategy involved opening four chateaus and developing a single core product. In most chateaus that came up after the initial trial, the Jiebaina was the core product that was promoted (Underwood 4).

Changyu increased its distribution network by employing more people in its sales team. Jenster (cited by Underwood 4) notes that in 1989, the company had only three sales people. In 2006 however, the company had a record 1500 sales people.

In 2008, the company was working with a web of wholesalers throughout China to distribute its products to 3,000 nationwide retail outlets. In 2009, Yan reported that Changyu had adopted a vertical distribution in 2002 with the aim of addressing some of the challenges that the company faced with powerful distributors (11).

With such distribution, the company was able to break down the control of sale terminals from the distributors and give the control back to the company. Changyu did this by sending regional sale representatives to the main sales regions.

The action to send the sale representatives to specific regions weakened the power that distributors had on the company’s products and consequently helped the company to achieve control of all the terminals in its sales networks. Yan reports that this approach enhanced distribution of the company products and also improved sales (10).

In a report filed by CCTV in 2006, Changyu’s General Manager was quoted as saying that the company had constructed a distribution network in more than 40 regions and countries in preparation to rolling out an international brand.

“We will purchase wineries in Australia, France and Italy when the right time comes” Hongjiang (quoted by CCTV broadcast 3).

In 2008, Changyu invested 200 million Yuan in promotional activities of the Jiebaina Brand. The company also put up a new product line for the brand and also improved its manufacturing technology (Yan 3).

Overall Industry Context

Changyu’s performance since its return to the active market in 1989 has been a story of one success after another. Its “4+1” strategy has worked well with the consumer to restore the Chinese confidence in their locally brewed wines.

The winning of a court battle in 2007 in order to retain the Brand name “Jiebaina” for its red wine had positive outcomes for the company, because the Chinese had come to associate the “Jiebaina” brand (although different wine brewers used the name for their red wines) as an authentic Chinese brand.

Relationship with marketing

In the Chinese Market, Wine is categorised as a fast moving consumer product. Changyu’s main competitors in the Chinese market are: Dynasty and Great Wall. According to CN wine news (a), Dynasty and Great Wall concentrate their marketing activities on restaurant channels (12).

Chang Yu on the other hand markets 55 percent of its products to the retail market. Statistics on China’s wine marketing trends indicate that restaurants account for 51 percent of the market share, while retail channels account for 49 percent of the market share.

From this statistics, it is therefore apparent that the Dynasty and Great Wall concentrate their marketing efforts on the 51 percent market share (which they have to share), while ChangYu concentrates on the 49 percent market share represented by the retail outlets.

The retail outlets gives the marketing department in ChangYu quite a number of marketing platforms since the retail channels comprise of supermarkets independent food shops and specialty shops (Yan 12).

Like every other fast moving consumer product, there must be an existing good working relationship between sales and marketing in Changyu. This is especially so because sales usually depends on the amount of efforts that the marketing department puts in place.

In Beijing for example, CN wine news (b) notes that Changyu faces stiff competition not only from the main competitors mentioned elsewhere in this essay, but also from small wineries which sell their products at relatively low costs (4).

In spite of the competition however, the sales for Changyu products have remained constant over the years especially in the restaurants and retail outlets.

To uphold this, the marketing department in the company have had to enter into an agreement with Donghaixinye Trading Co., which is responsible for the placement of Changyu’s two brands (Cabernet and Castel) in Beijing (Styles 4).

In this market, this action by the marketing team has enabled the sales department to record 35 million Yuan in the Beijing’s 800 people high end market and 45 million Yuan in the middle and low income target market.

Changyu’s preference within the Beijing market is rated at 35 percent, something that is credited to the marketing efforts by the company towards placing its products more strategically in the highly competitive market.

CN wine news (b) further reports that Changyu has taken advantage of the Chinese high patriotism, which means that most people prefer local wines than imported wines (4).

Since Cabernet and Castel are two of its brands that target the high-end market, Changyu specifically markets such in high end hotels in major towns where the wealthy Chinese patrons frequent. To beat competition, Changyu like other players in the wine sector also carries out promotions and sells consumption packages at reduced costs during holidays (Wine China 2).

The wide range of wine and alcoholic beverages, Changyu is able to tap into both the brand –conscious consumer market that attaches quality to the specific brands, and the price-conscious consumer market, which is easily swayed by prices and promotions.

According to CN wine news (b), majority of the middle-class and low income earners falls in the latter category. Incidentally, any market player intent at selling volumes has to focus their marketing efforts on this category of buyers, since the majority of the population in china are middle income earners (16).

Market statistics indicate that young people who have fewer commitments in life, and have just entered the job market are more willing to spend money on entertainment.

Compared to the senior citizens, CN wine news (b) notes that wine selling at 250 to 300 Yuan has more appeal with the young population, while the senior citizens tend to prefer wine priced between 10-35 Yuan. Middle aged wine drinkers on the hand prefer wine priced between 40 and 60 Yuan (45-52).

Developments in China’s Wine Industry

With Changyu being among the three biggest wine makers in the Chinese market, the growth of the wine industry has worked to the company’s advantage. Together with Dynasty and GreatWall, Changyu enjoys 50 percent of the Chinese wine market share.

The remaining 50 percent is shared by other local wine makers as well as international wine imports. Collectively, the three leading wine manufacturers (Changyu, Dynasty and GreatWall) earn 67 percent of all profits generated in the industry (China Business Intelligence 6).

According to China Trade Gateway, the Chinese wine markets has started experiencing the positive effects of a booming economy, where a considerable number of the population acquires purchasing power and are hence able to spend on consumption patterns which were previously seen as a preserve of the rich (1).

In addition to consumers purchasing alcohol for purposes of using the same at home, the increased entertainment venues which serve wine as one of the main alcoholic beverages is another consideration that will enlarge the wine market in the country (Styles 3). Being one of the large wine companies in the company, the recent trends can only mean better sales for Changyu.

Critical Evaluation

Changyu’s selling approaches is seen to be serving the company’s interests well so far. The company seems to have a clear target market for each of its products and also seems to have a strategic position in the market.

While the company has some of the premium wines meant for the high end market, it seems to recognise that volume of sales in a business do matter and have hence designed specific products to cater for the emerging middle class income earners.

The court battle won against other wine makers over the trademark of the name “Jiebaina” seems to be working well so far. Before winning this court case, which will eventually mean that Changyu is the only company that trades its red wine under the Jiebaina label, the name was used as an antonym for red wine (Underwood 8).

The effect of the sole ownership on the red wine brand manufactured by Changyu will most probably be an increase in the sale volume of this specific brand of wine. Reports by the CN wine news (a) indicate that apart from the Chinese people buying local made wines out of patriotism, they also consume red wine more due to related health benefits (45).

The recognition of the wine maker in international wine circles also means that its products can now target an international market just like other international wine makers do. Luckily for the company, the wine quality seems to be satisfying both the domestic and international markets meaning that product quality is one of the company’s strong marketing strategies.

Conclusion

In most consumer products, sales are a direct resultant of marketing, whereby the right product is sold to a specific market at the price most appropriate for that market. How a product is branded or packaged and promoted also contributes significantly to the volume of sales that a product attains in a competitive market.

Other factors that affect sales include product placement and distribution. By placing the product in outlets where the intended consumer can easily see and purchase the same, the product manufacturer is more likely to register increased sales.

For Changyu, the distribution in the Chinese market looks like a well thought strategy that not only makes the products available to the mass market, but also one that seals any loopholes that may create dependence on the distributors.

Overall, Changyu sales continued on an upward trend even in the middle of the recession. This could only mean that either the quality is extremely good that people still bought even when the economic times were hard, or that the marketing of the products still continued irrespective of the recession.

A third alternative would be that the target market Changyu’s products were not as severely affected by the recession like other people were. Whatever the case, it is evident that Changyu made profits when other companies (especially) in other sectors were complaining about reduced consumerism.

Works Cited

CCTV broadcast. Construct Global Distribution Network, Create International Brand. 2006. Web.

ChangYu. Getting Better with Age. 2004. Web.

China Business Intelligence. China’s Wine Industry development and Import Analysis (Part 1): Bright prospects for China’s Wine Market. 2008. Web.

China Daily. The predicts for Chinese wine industry of 2008. 2009. Web.

CN wine news (a). Wine sales of Changyu Jumped to No. 7 in the World. 2007. Web.

CN wine news (b). China’s Wine Industry development and import Analysis. 2009. Web.

Styles, Oliver. China to become leading wine producer? Decanter Newsletter. 2008. Web.

Underwood, Laurie. Winning Strategic case 1: Up the price ladder with Changyu: China’s Oldest wine producer moves upscale, heads offshore. 2009. Web.

Wine China. Changyu. 2008. Web.

Introduction

This paper will present a detailed sectoral analysis, which focuses on the luxury wine industry in the US. Russian River Ranches Chardonnay is the luxury wine brand that will be analyzed. The brand is manufactured and distributed by Sonoma-Cutrer in the US.

Russian River Ranches is a luxury brand because it is made of high quality grapes and advanced brewing technologies (Sonoma-Cutrer 2014). As a premium product, Russian River Ranches is sold in luxury restaurants and hotels in the US.

In addition, it was the second most expensive among the top 20 luxury wine brands in the US in 2013 (Sonoma-Cutrer 2014).

Porter’s five forces model will be used to analyze the competitiveness of Russian River Ranches in its industry. Other elements of the brand that will be analyzed include price aesthetics, product, communications, and branding.

Porter’s Five Forces Analysis

Suppliers’ Bargaining Power

The luxury wine industry has several suppliers, which include manufacturers of packaging materials, producers of labeling materials, producers of grapes, and shipping companies. The suppliers have a high bargaining power due to the following reasons.

First, there are more wine producers than suppliers of key inputs such packaging materials. In the last five years, vineyard acreage reduced significantly as famers used their land to produce more profitable crops such as almonds.

This problem is exacerbated by the fact that there are no substitutes for grapes in luxury wine production (Demeter Group 2013).

The demand for grapes has significantly increased as producers of high-end wine increase their production capacities. The resulting shortage of grapes has significantly increased farmers’ bargaining power.

Second, differentiation of inputs is a key determinant of the quality of luxury wine. Producers of high-end wine must consistently use the best grapes and packaging materials to attract customers (Sonoma-Cutrer 2014).

Third, most suppliers in the industry have low switching costs since there are many buyers for their products. For example, suppliers of packaging materials also sell to manufacturers in the soft drinks industry.

Thus, they give priority to buyers who are able to offer high prices and to make bulk purchases. The high bargaining power of the suppliers means that they can easily increase their prices, thereby reducing the competitiveness of Russian River Ranches and other brands.

Buyers’ Bargaining Power

The buyers (consumers of wine) have a high bargaining power due to the following reasons. First, brand loyalty is very low since customers are interested in trying new products (Brun & Castelli 2013, pp. 823-847). This limits the ability of producers of luxury wine to retain their customers.

Second, nearly all manufacturers of wine are focusing on product differentiation. This increases the number of products that are available in the market, thereby increasing buyers’ bargaining power.

Third, buyers of luxury wine have low switching costs. Thus, they can easily change brands in order to satisfy their needs. The high power of consumers of luxury wine means that producers have to focus on product differentiation and aggressive marketing to retain their customers.

The producers of luxury wine have a moderate bargaining power. One of the factors that improve their bargaining power is ability to make bulk purchases. This enables producers to negotiate for favorable prices for their supplies.

The threat of backward integration is also high since companies such as Sonoma-Cutrer produce grapes on their own (Sonoma-Cutrer 2014).

The main factor that reduces the bargaining power of wine producers is the mismatch between the demand and supply of their inputs (Demeter Group 2013). Specifically, undersupply limits manufacturers’ ability to bargain since the available inputs have to be rationed through high prices.

Threat of Substitutes

The main substitutes of luxury wine include soft drinks, beer, and spirits. Luxury wine also competes with the regular wine brands. The threat of substitutes is low due to the following reasons. To begin with, luxury wine performs better than other alcoholic drinks in terms of quality.

Specifically, the people who drink alcohol prefer wine because of its superior taste. Consumption of luxury wine is also associated with high social status in the society (Brun & Castelli 2013, pp. 823-847).

Apart from taste, wine has several health benefits that cannot be enjoyed through consumption of other alcoholic beverages.

Specifically, moderate consumption of wine helps in prevention of heart diseases, stroke, anxiety, and lose of memory in old age (Brun & Castelli 2013, pp. 823-847). These benefits make wine the best option among consumers of alcohol.

However, excessive consumption of wine can have negative health effects. Moreover, some religions prohibit consumption of alcohol.

These factors reduce the competitiveness of luxury wine as customers opt for soft drinks. Generally, luxury wine is more expensive than other alcoholic beverages and soft drinks (Brun & Castelli 2013, pp. 823-847).

However, the high price does not have negative effects on the demand for luxury wine, especially, in the affluent market segment where customers are not price sensitive. Since Russian River Ranches has a superior quality, it is likely to overcome the low threat of substitutes in the market.

Threat of New Entrants

The threat of new entrants is low because of the following factors. First, the cost of entering the luxury wine industry is prohibitive.

New companies that intend to establish production plants require significantly high financial capital, which is not easily available. Second, the incumbents have high economies of scale (Demeter Group 2013).

In the last decade, major producers of luxury wine focused on consolidation through mergers and acquisitions. This has enabled them to achieve “economies of scale in production and distribution” (Chevalier & Mazzalovo 2012, p. 56).

As a result, they have high production capacities and cost advantages that make them more competitive than new entrants.

Third, the incumbents have control over the distribution channels. In the last five years, distributors of luxury wine such as wholesalers, specialty restaurants, and retailers embarked on consolidation to strengthen their market power (Demeter Group 2013).

The incumbents in the wine industry have long-term distribution contracts with the available distributors. This means that new entrants will have to incur high costs to access the distribution system.

Finally, access to inputs such grapes is difficult, since the incumbents have long-term supply contracts with famers. The low threat of new entrants is a growth opportunity to Russian River Ranches as demand continues to rise.

Threat of Competitive Rivalry

High competition in the US luxury wine market is explained by the following factors. First, the industry is highly concentrated. In 2013, the top 4 largest producers of luxury win accounted for 70% of the market share (Demeter Group 2013). This means that only 30% of the market is left for the remaining producers.

Second, the industry is characterized by high fixed costs. Specifically, the cost of labor and warehousing is on the rise, thereby reducing the profits of producers of luxury wine.

Third, there is overcapacity in the industry. This is explained by the fact that liberalization of the US wine industry has resulted into an increase in importation of luxury wine from countries such as China, Italy, and France (Demeter Group 2013).

Wine products from countries such as China are sold at low prices since their producers have production cost advantages.

Although the industry is characterized by high competition, it is still experiencing strong growth. In the last three years, the market for luxury wine in the US grew at an average annual rate of 12% (Demeter Group 2013). This strong growth is expected to continue in the next four years as economic growth improves.

The implication of the high competitive rivalry is that Russian River Ranches must be able to satisfy customers’ needs in order to maintain its competitiveness. Specifically, the marketing mix strategy that is used to market it must be aligned to customers’ needs.

Success of Russian River Ranches

The factors that account for the success of Russian River Ranches in the luxury wine market include the following.

First, the brand is successful because of its unrivaled quality. Since its inception, Sonoma-Cutrer acknowledged the fact that high quality is one of the major factors that determine the success of luxury wine brands. Consequently, the company strategically chose to produce its own grapes.

This enables it to improve the quality of Russian River Ranches by selecting the best grapes to manufacture it (Sonoma-Cutrer 2014). Moreover, the company focuses on incremental product innovation to improve the quality of its wine.

As a result, it has been able to produce several flavors that meet the expectations of its customers. As a premium brand that is known for high quality, Russian River Ranches is able to achieve high sales despite being one of the most expensive brands in the market (Sonoma-Cutrer 2014).

Second, Russian River Ranches is successful because of its strong brand image. It has been rated as the most popular luxury wine brand in the US for over ten consecutive years (Sonoma-Cutrer 2014). The brand personality of Russian River Ranches reflects the attributes that customers in the luxury wine market look for.

These include authenticity, premium quality, good reputation, and excusive brand history (Brun, Castelli 2013, pp. 823-847).

These attributes have enabled Russian River Ranches to command a high brand loyalty in a market where customers are constantly shifting to new products. High brand loyalty enables the brand to overcome competition from other luxury brands and substitute products.

Third, Russian River Ranches owes its success to the multi-level distribution channel that is being used to distribute it in the US. As the most popular luxury brand, all high-end restaurants and hotels strive to serve Russian River Ranches to maintain their competitiveness (Sonoma-Cutrer 2014).

The wholesalers also have the incentive to distribute the brand because its premium price enables them to earn a decent profit margin. This enables Russian River Ranches to overcome competition by denying its competitors access to third-party distribution channels.

In addition, Sonoma-Cutrer has its own retail and online stores that it uses to distribute the brand. This enables its sales team to offer excellent customer service, which in turn improves brand loyalty and sales.

Finally, Russian River Ranches is successful in the luxury market because of the marketing strategies that have been adopted by its producer. The brand’s premium positioning strategy has been reinforced through innovative marketing communications initiatives.

The brand is marketed through digital platforms such as the social media, the internet, and smartphones that allow its marketers to convey personalized messages to a niche market segment rather than the mass market (Sonoma-Cutrer 2014).

This enables customers to identify with the brand and to recommend it to their colleagues, thereby increasing its sales and brand credibility (Reyneke, Pitt & Berthon 2011, pp. 21-35). In addition, Russian River Ranches is marketed based on value rather than price.

Although most companies are trying to gain market share by reducing the prices of their wine, Sonoma-Cutrer has focused on marketing the benefits that are provided by its brand. As a result, Russian River Ranches has been able to overcome brand dilution in the market.

Key Elements of a Luxury Brand

Price

Pricing has a significant influence on the way customers perceive luxury brands. Consciously or sub-consciously, customers often develop a psychological luxury image based on the price range that is used to market a brand (Chevalier & Mazzalovo 2012, p. 78).

Most consumers of luxury brands believe that price has a positive correlation with value. This explains the high price of Russian River Ranches in the luxury wine industry. Specifically, the high price is meant to protect its brand image from being compromised.

Undoubtedly, consumers of luxury brands are interested in obtaining high value for their money (Brun & Castelli 2013, pp. 823-847). They will not pay more for a product that has no superior functionality. As a result, the high price of Russian River Ranches is justified by its premium quality and good reputation.

Apart from compensating producers for the high product quality, pricing in the luxury wine industry is used to ensure exclusivity.

This perspective is based on the fact that consumers of luxury products focus on maintaining their self-esteem by purchasing products that others cannot afford. Since Russian River Ranches targets affluent customers, its high price serves as a mechanism for excluding the mass market from consuming it.

Product

A luxury brand must have a high quality (Brun & Castelli 2013, pp. 823-847). This requirement is justified by the fact that a luxury brand must achieve superior performance at the product level and experiential level. This explains Sonoma-Cutrer’s focus on product innovation to maintain the high quality of Russian River Ranches.

At the product level, the brand satisfies functional and utilitarian attributes of wine in terms of taste, packaging, alcohol content, and acidity. As a luxury brand, Russian River Ranches also performs at the experiential level by creating an emotional appeal to customers.

The emotional appeal distinguishes the brand from the regular brands of wine. The high quality of Russian River Ranches has to be maintained because its consumption signifies high status.

The affluent customers consume the brand partly to express their status in the society (Brun & Castelli 2013, pp. 823-847). For instance, the brand is often bought as a special gift for loved ones or during special occasions such as weddings as a way of expressing appreciation.

Communications

Luxury brand communications must be dynamic and versatile in order to attract the attention of the market without hurting brand image (Reyneke, Pitt & Berthon 2011, pp. 21-35).

Adopting a dynamic marketing communications strategy is justified by the fact that a luxury brand must retain its pedigree status while keeping up with contemporary trends and newness. In a nutshell, the brand must adjust to emerging tastes and preferences without compromising its original attributes that make it unique.

This enables the luxury brand to remain desirable and inspirational. Russian River Ranches has been able to maintain its brand relevance because its adverts focus on conveying emotional and sensual messages. This creates a distinction between the brand and its competitors that target the mass market.

In addition, the adverts focus on creating an aura that is genuinely exceptional to the brand image. In the digital marketing platform, Russian River Ranches is advertised using long-form commercials to attract customers’ attention.

The main strength of this strategy is that it improves brand awareness and motivates customers to take action by purchasing the wine.

Branding

In the luxury market, brand presence focuses on creating memorable shopping experiences. A luxury brand has to be retailed in a high-end store that reflects its superior attributes. Every customer touch-point has to enhance the brand experience to strengthen the aura of luxury (Chevalier & Mazzalovo 2012, p. 98).

In this regard, the marketers of Russian River Ranches utilize great aesthetics and craftsmanship to improve the ambiance of the stores where the wine is sold. Public relations also “plays an important role in branding luxury brands” (Chevalier & Mazzalovo 2012, p. 102).

The use of public relations is justified by the fact that it enables marketers to influence public opinion favorably in order to strengthen brand image. In addition, it helps in enhancing the credibility of luxury brands, especially, if the brands are reviewed by renowned public figures.

As a result, the marketers of Russian River Ranches use celebrity endorsements to influence public opinion about the brand. Specifically, the public associates the brand with the superior qualities of the celebrities that endorse it.

This strategy has significantly improved customers’ confidence in Russian River Ranches, thereby making it the luxury brand of choice in the US.

Conclusion

The main threats to the competitiveness of Russian River Ranches are the high bargaining power of suppliers, high bargaining power of consumers of wine, and high competition in the luxury wine industry.

The suppliers have a high bargaining power because of the shortage of key inputs such as grapes and the large number of producers of wine. The consumers of wine have a high bargaining power because of their low switching costs and access to a variety of brands.

Competition is high in the market because of the high concentration of the industry and increased importation of luxury wine. The opportunities that are available to Russian River Ranches include the strong growth of the luxury wine market, as well as, the low threat of substitutes and new entrants.

The factors that account for Russian River Ranches’ success include its high quality, strong brand image, and access to established distribution networks. In order to overcome competition in future, the quality of the brand should be improved consistently through product innovation.

References

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Chevalier, M & Mazzalovo, G 2012, Luxury brand management, McGraw-Hill, New York.

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Reyneke, M, Pitt, L & Berthon, P 2011, ‘Luxury wine brand visibility in social media: an exploratory study’, International Journal of Wine Business Research, vol. 23. no. 1, pp. 21-35.

Sonoma-Cutrer 2014, Our craft. Web.