Strategy for marketing wine in Britain Essay Example | Topics and Well Written Essays - 2000 words

Strategy for marketing wine in Britain - Essay Example Promotion entails not just advertisement but also branding while pricing refers to balancing what the consumer is prepared to exchange in relation to production costs. Placement in a globalised environment creates the greatest challenge of retailing the product. Wine Production. Wine production in Europe has traditionally been labor intensive, based on fragmented production of grapes by small sized farmers spread over a wide area. These are dependent on a long chain of producers, distributors and marketing agents and are thus impervious to the needs of the consumer, a cardinal sin in product marketing. On the other hand new world wine growers, in the United States, Australia, Argentina, Chile and South Africa, have large land holdings averaging 158 hectares compared to 1 acre in Europe and with mechanization and use of modern techniques have full control of the production, supply and distribution chain thereby being responsive to product development based on consumer preference. Modernization of production has been rejected by French wine growers who do not want to lose the, "poetry of wine." Product and Price Differentiation through Packaging. ... Australian and American wine producers have displayed greater flexibility in product development focusing on the change in demand to premium and super premium brands, switch from red to white wine and vice versa based on health benefit perception of consumer, fashion trends and even preference based on variety of grapes. This has been achieved by cultivating the identified variety in larger acreages. Old world wine growers did not have this flexibility as land continued to be scarce as also its use for growing grapes was regulated. Pricing. Apart from the factors covered above, new world producers were able to achieve a price advantage due to economies of scale while French and German wine growers were restricted by small holdings and limited scale of operations. Ease in transportation costs and liberalization of tariff regulations due to execution of World Trade Organization norms also assisted the new world producers in pricing their products competitively. Promotion - Impact of Branding. While branding a product is an important tool for its promotion, in old World Europe, regulation and classification of wine led to a deleterious impact creating a hierarchy of regression with a government panel allotting quality certificates. Branding or classification in France was carried out based on an antiquated system of terroir or the unique qualities provided to wine due to factors as soil conditions, rainfall and so on. But when phylloxera struck affecting wine production in the last quarter of 19th Century, it was only through the process of grafting with phylloxera resistant roots from Californian vine yards which transposed wine industry beyond Europe. The regression in branding is exemplified by the fact that a resolution was passed by the European Union