Marketing is the planning and execution of the production, pricing, promotion and distribution of goods and services to create exchanges that achieve individual and business objectives.
The success of any small business depends upon the ability to provide:
These five factors - sometimes referred to as the 5 P's - are called the marketing mix and together they form the basis of any business marketing activities.
The Marketing Plan
Questions to ask during the planning stage of a marketing plan include:
Once you are equipped with the answers to these questions you can determine realistic goals to achieve. You objectives should include details on how you aim to achieve customer satisfaction in service and product quality, whilst providing value for money.
Developing and Image and Target Marketing
Establishing a product image is extremely important decision and should not be taken without considerable consultation. The label design, colour, size and style all contribute to the image of your product. It would be highly recommended to discuss your ideas with a marketing consultant before you commence sales. The image of your product can be as important as the quality of your wine in establishing your position in the market place. Your image once set should be reflected in all form of advertising, including promotions, printed material and signage.
Once your image has been clearly defined, you will need to identify your target markets. This may be defined by consumer type or by sales outlet. Each target market is a unique sector and may have its own needs and wants. Successful target marketing firstly involves having a clear understanding the your own product and its unique selling points.
Once this is established, you will need to define what are the ultimate factors that affect the decision making ability of each of your targeted sectors. Your product ranges can then be tailored towards the needs and wants of these groups. Most wineries have several ranges of wines. Price, quality, style and image usually distinguish these different product ranges. It is this image that needs to be understood and the label and associated promotional material should be a reflection on this.
Wine Sales Pricing Policy
The first task needed before setting any prices is to precisely determine the cost of production for each wine. This can be accurately achieved if throughout the year expenses are coded to the individual vineyard paddocks and the resulting wines are tracked to that individual vineyard. Alternatively a total cost of grape production can be determined and the cost spread evenly as a ratio to yield. If the grapes are purchased from a vineyard this system is much easier.
Once the grapes are costed, expenses within the winery can be kept and allocated to each wine. Or again alternatively expensed as a ratio. The expenses relating to oak and storage costs can be directly costed to the resulting wines.
Your potential selling price will still be influenced by customer demand. The selling price however is still ultimately under the control of the winery. If the cost of production has been accurately determined it allows you to confidently sell your product at a known margin.
As a general guide the gross profit margin of cellar doors sales is the highest followed by mail order, direct to retailer, wholesale and lastly export. This however should only be used as a guide and will depend on volume and the particular market segment.
It is the sales mix that will determine the average income per bottle received by the winery. This is the ratio of sales (revenue) by outlet by volume.
Last updated 06 October 2005.
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© The State of Queensland (Department of Tourism, Fair Trading and Wine Industry Development) 2005.