English Wine Producers Marketing Campaign

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Table of Contents

Main Objective
SWOT
Situational Analysis
Marketing Strategy: Central Awareness Campaign
Utilizing Online Social Media Platforms for Promotion
Promoting the Destination and the Product
Budget
Reference List

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).

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.

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

Summary of Financial plan
Annual unit sales	50,000
Price P/Unit	£ 20
Variable cost P/Unit (production and sales)	£ 5
Fixed costs (machine rent, maintenance, booths etc.)	£ 20,000
One-time start-up costs for marketing	£ 50,000
Working capital required (receivables, inventory, etc.)	£ 5,000
Estimated Annual Gross Revenues and Income:
Annual revenues	£ 10,000,000
Weekly variable costs	£ 3,000
Weekly contribution margin	£ 5,000
Break-Even Point
Contribution margin per unit	£.50
Annual break-even quantity	4,000 bottles
Ratio of break-even to expected quantities	10.4%
Starting-up the business:
Total up-front funds required	£85,000
Additional units to cover up-front funds	5,000
Break-even quantity with up-front funds	6,000
Financial Performance
Payback period for start-up funds (in days)	7 days
Annual return on start-up investment	30%
Variable cost to price ratio	35.3%
Contribution margin ratio	58.0%

Reference List

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English Wine Producers Marketing Campaign

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