Marketing Planning & Competitive Advantage

7/30/2019 Marketing Planning & Competitive Advantage

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Marketing Plan Components for a Competitive Advantageby Veronica Barclay

Developing a strategic marketing plan is critical in today's wine arena to help your winerymake decisions that will improve your brand's performance while maintaining its competitiveadvantage in the marketplace. This operational "road map" can become your most valuable

tool as it pinpoints key opportunities to help reach your winery's specified goals andtargeted buyers.

Identify Your Targets

Identifying target customers and their wine buying needs requires shifting efforts from a

reactive, production-driven orientation to a pro-active, market-driven focus. Your marketingefforts directly link consumer demand with the wines you have to offer.

Take a good, hard look at who is buying your wines and why. If you make only high-endCabernets, you wouldn't expect White Zinfandel lovers to understand your wines so why try

and market to them? Instead of trying to convert customers, concentrate on positioning

your wines favorably among those who already seek out and appreciate the wines you offer.Then focus your marketing efforts on serving that specific group.

Market-Driven vs. Marketing-Driven

Market-driven companies often play a lead role in production planning. By starting with theend-user's needs instead of the production process, marketing strategies can project

consumer trends and help guide critical production decisions involving quantities,packaging, and stylistic quality. They listen to customers, identify their needs, and find ways

to fill them.

There is a big difference between "marketing driven" and "market-driven." Marketing-driven

wineries achieve consumer awareness through advertising, innovative point-of-salematerial, aggressive programming, and other forms of promotion. Some may be lucky

enough to obtain instant, widespread recognition, but it may not last.

Market-driven brands concentrate on developing distinctive wines, know what's happening

in the marketplace, and build long term customer relationships. They solidly position theirproducts by carving a niche in the market that competitors find difficult to penetrate. They

also develop marketing plans with measurable objectives and goals.

Better and Faster

But, what good is a great marketing plan if you cannot achieve or maintain a competitiveadvantage? With such aggressive competition today at all price levels, marketing

opportunities have become extremely time sensitive. Wineries that identify strategies butdecide to implement them too slowly will most likely concede their hard-earned shelf space

or list placements to their quicker competitors. Now is the time to make better marketingdecisions--faster.


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With this need for speed also comes the need for faster feedback from all levels of ourthree-tier distribution system. This includes responses from within the winery, distributors

and their sales people, valued restaurant and retail accounts and consumers. If this type ofpro-active market research does not allow us rapid access and turnaround to essential

information, then our marketing decisions will be made without vital statistics or with stalefacts. Poor planning may lead to excess inventory, negative publicity or confusing messages

to the consumer. Having updated information sooner to support specific goals can help usmake decisions faster and achieve a competitive edge.

Outlined below are some basic components to develop a strategic marketing plan that willhelp define your image, focus and direction necessary for your brand's success. It will also

identify your strengths and weaknesses, and examine current market trends and

competition. Measurable, attainable goals are created with specific strategies and tacticsassigned in order to reach them. The final component is an action calendar and marketing

budget to help you carry out your successful plan.

Action Calendar

After prioritizing your objectives and strategies, you'll have to create an action calendar andadequate marketing budget to help your plan become a reality. Here are some guidelines increating your action calendar:

1) Estimate a time frame for each objective over next year's calendar. Beware of seasonalconflicts, such as harvest, which may affect your staff, time or financial commitments.

2) Delegate specific tactics to appropriately skilled members of your staff. Their active

participation can bring you renewed enthusiasm, new ideas and increased results.

3) Establish regular check-up points during each time frame to monitor progress and dealwith any unexpected challenges.

4) Adjust your action calendar and specific tactics as needed.

Your marketing plan is a live document. Try and design it so that it can be easily reviewed

and updated. The key is to evaluate it at least every six months to monitor your progress orrevise specific tactics. Each year you'll have updated financial statements and sales

projections to help you develop new action calendars and marketing budgets.

The Marketing Budget

Determining how much of your total operating budget you will re-invest into your marketingprogram will depend on your cash flow requirements and net profit. It's not unusual to see

some brands reserve 20-40 percent of sales revenues for upcoming marketing and salesdevelopment.

By studying your expenditures from last year, you'll have some idea of what you spent onmarketing. However, if you are new to the industry, have been the recipient of negative

publicity or are launching a new product, you may have to spend more on your marketingprogram than "normal." Be sure that your marketing budget adequately supports the

marketing objectives you are seeking to obtain.


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Your Competitive Edge

Developing your marketing plan will help you assess and identify your strengths and

weaknesses, analyze your competition, and establish your target market. While setting andprioritizing realistic objectives and strategies for your brand, costs and resources will be

identified in order to achieve measurable results.

In prioritizing your goals, be sure to "grade" them by level of difficulty as well as

importance. Those that are easiest to implement result in a faster rate of success. This is

especially important for those brands with little or no previous marketing plan developmentexperience. If you do not have the skills or market expertise necessary to write your own

plan, you may wish to consider hiring an industry consultant to assist you with market

research or developing timely and achievable goals.

Profit should be the balancing point. If a specific objective appears to be unobtainable after

a mid-point check, that may be the time to re-frame the objective with other strategies andtactics or switch to new goal. Sales performance levels and customer support are key

factors that reveal the impact of proposed activities, their timing and whether the

appropriate people have been assigned to achieve them. With careful planning, you canposition your wines to achieve their ultimate market potential.

Your marketing and promotional efforts are often the first impression that prospective

buyers have of your winery. From that first impression, both conscious and subconsciousbuying decisions are made that can bring you customers for life.

Marketing Plan Components

Background and Mission Statement

This section is one or two paragraphs that introduce your winery and its mission statement.Identify what makes you and your brand distinctive. It may be your philosophy, familyhistory, stylistic qualities, geographical location, packaging, price points, etc. State the

general purpose of writing this plan.

Product and Service AnalysisDefine your product lines and packaging. Describe your customer service philosophy.Identify your strengths and weaknesses vs. your competition.

Target CustomersWho is buying your wine? Outline the demographics (Educated, white and pink collar

workers, 30-49 years old, with annual incomes over $55,000.) Identify your customer baseand their needs. What influences their lifestyle and buying decisions? Specify the exact

message of how you will fill these needs and identify the target market you want as newcustomers.

Market ShareWhat share of the wine market does your winery hold? Define the geographic segments

where you do business or wish to target. Identify your current market share and how itdiffers from what you think it should be. Many small producers are surprised to find that


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their annual sales revenues often represent less than 1 percent of the total market share intheir price category.

Current Marketing EffortsWhat do customers think about you? Define your image in the marketplace and whether

current customer perceptions are accurate. Identify current marketing efforts and their

targets. Does consistent organizational behavior represent the image you are trying toproject through the condition of your facility, employee behavior, service levels,communications, etc.? Describe your most effective advertising and promotion efforts

including print ads, website, wine club, special events, etc.

Current Market Environment

Macro-Market: (The Big Picture) Describe wine consumption patterns and trends on thedomestic and international levels, by varietals, and by total revenues. Identify growing or

declining trends and why they're happening (economic patterns, changing lifestyles, etc.)The latest figures and annual reports may be obtained and purchased from Motto, Kryla

and Fisher (MKF) in St. Helena, CA 707-963-9222, or industry consultants, Gomberg andFredrikson in San Francisco, CA 415-957-5071.

Micro-Market: (Segmentation) This section narrows the overall wine market to focus onyour niche. Note the volume levels (in cases and dollars) of the varietals you produce and

the geographic areas you serve.

Generating New BusinessDescribe how you generate cost-effective ways to gain new business and generate repeatorders. Who are your sources of your most productive referrals?

Pricing and DistributionDefine your price points by label. Are they are positioned successfully within price sensitive

markets? State how your distribution channels, allocations and availability affect yourbuyers. Do you sell winery direct or use distributors, brokers, your own sales force?

Examine your distribution network, discounts and programming structures. Explain thebenefits of your sales structure and identify that bring you the highest profits.

Risks and OpportunitiesRisks: Specify external and internal influences that may affect your growth and profitability.

External barriers include recession patterns, consolidation of wholesalers, higher excisetaxes, etc. Internal influences may include financial resources, staffing levels, winemaker

capabilities, or grape availability. Describe the potential for future competitors and the risksthat may make it difficult for a brand to enter into new markets. (Market saturation,

additional compliance requirements and licensing or high production costs are someexamples of these barriers.)

Opportunities: Describe the opportunities your brand has to succeed in this competitiveenvironment. Isolate any weaknesses and pinpoint what can be done to correct them.

Describe the long-term outlook for your winery, and how your strengths translate into

opportunities for growth.

Objectives, Strategies and GoalsObjectives: Measurable, attainable marketing goals relating to service levels, customer

base, target markets, sales projections, programs, and priorities. Measurement can be in


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the form of dollars, cases, percentage increases, new placements, time frame, etc. Prioritizethese in order of importance and within the limits of your staffing and budget restrictions.

Strategies: General approaches developed in order to reach the goals.

Tactics: Specific actions and decisions to execute these strategies.

wbm

Veronica Barclay heads Barclay & Company, a wine marketing firm based in St. Helena,

California.

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Marketing Planning & Competitive Advantage