Marketing Plan Components for a Competitive Advantage

by Veronica Barclay Developing a strategic marketing plan is critical in today's wine arena to help your winery make decisions that will improve your brand's performance while maintaining its competitive advantage 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 and targeted 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 marketing efforts 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-end Cabernets, 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 the end-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-sale material, 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 their products 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 competitive advantage? With such aggressive competition today at all price levels, marketing opportunities have become extremely time sensitive. Wineries that identify strategies but decide 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 marketing decisions--faster.

With this need for speed also comes the need for faster feedback from all levels of our three-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 of pro-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 stale facts. 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 us make decisions faster and achieve a competitive edge. Outlined below are some basic components to develop a strategic marketing plan that will help 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 tactics assigned 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 and adequate marketing budget to help your plan become a reality. Here are some guidelines in creating your action calendar: 1) Estimate a time frame for each objective over next year's calendar. Beware of seasonal conflicts, 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 deal with 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 or revise 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 marketing program 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 sales development. By studying your expenditures from last year, you'll have some idea of what you spent on marketing. 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 marketing program than "normal." Be sure that your marketing budget adequately supports the marketing objectives you are seeking to obtain.

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 and prioritizing 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 development experience. 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 and tactics 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 can position 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 subconscious buying 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, family history, stylistic qualities, geographical location, packaging, price points, etc. State the general purpose of writing this plan. Product and Service Analysis Define your product lines and packaging. Describe your customer service philosophy. Identify your strengths and weaknesses vs. your competition. Target Customers Who 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 base and 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 new customers. Market Share What 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 it differs from what you think it should be. Many small producers are surprised to find that

their annual sales revenues often represent less than 1 percent of the total market share in their price category. Current Marketing Efforts What 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 to project 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 the domestic 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 and Fredrikson in San Francisco, CA 415-957-5071. Micro-Market: (Segmentation) This section narrows the overall wine market to focus on your niche. Note the volume levels (in cases and dollars) of the varietals you produce and the geographic areas you serve. Generating New Business Describe how you generate cost-effective ways to gain new business and generate repeat orders. Who are your sources of your most productive referrals? Pricing and Distribution Define your price points by label. Are they are positioned successfully within price sensitive markets? State how your distribution channels, allocations and availability affect your buyers. Do you sell winery direct or use distributors, brokers, your own sales force? Examine your distribution network, discounts and programming structures. Explain the benefits of your sales structure and identify that bring you the highest profits. Risks and Opportunities Risks: Specify external and internal influences that may affect your growth and profitability. External barriers include recession patterns, consolidation of wholesalers, higher excise taxes, etc. Internal influences may include financial resources, staffing levels, winemaker capabilities, or grape availability. Describe the potential for future competitors and the risks that may make it difficult for a brand to enter into new markets. (Market saturation, additional compliance requirements and licensing or high production costs are some examples of these barriers.) Opportunities: Describe the opportunities your brand has to succeed in this competitive environment. 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 Goals Objectives: Measurable, attainable marketing goals relating to service levels, customer base, target markets, sales projections, programs, and priorities. Measurement can be in

the form of dollars, cases, percentage increases, new placements, time frame, etc. Prioritize these 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.