Marketing is essential to any wine business

Before you think of the label and package, you need to decide what your wine brand stands for. That is where good wine marketing needs to start, says Larry Lockshin.

China seems to be ready to accept Australian wines again and the Federal Government has called for a taskforce to investigate the crisis facing the Australian wine industry and possibly recommend actions.

These are macro influences.

I wanted to write about what each wine producer could do to help themselves, because this situation will not be solved quickly, just as it has not been generated quickly.

Each company has to take much of their fate into their own marketing hands.

The comments in this column can be used to focus and redevelop an existing brand or brands, or to develop a new brand, perhaps one aimed at a different target market or a different product than those being currently produced.

Marketing is essential to the success of any business, including wine businesses.

There is so much to write about, it would take a book (which I am working on).

Today I am writing about the key guidelines for success.

First, successful marketing is similar to planting a successful vineyard.

It takes planning prior to planting and then careful nurturing to get the vineyard to maximum quality for the planned output.

Many vineyards have been planted and cared for haphazardly just as many wineries’ marketing is haphazard.

Start with goals.

What do you want to (realistically) achieve?

Develop a plan and strategy to achieve these goals.

Many wine producers have goals, but these are either too broad or not realistic given their time and financial constraints.

Devising a realistic strategy often takes expertise that is not available in-house and can often benefit from fresh eyes that understand the wine industry and marketing strategy.

There are a number of businesses, many of them fairly small with good experience that can help, either in the short term for making the plan or in the longer term for making and helping advise on implementation.

It always puzzled me how wineries will spend money on viticulture and oenology assistance and then assume they can do the business and marketing themselves.

Like any supplier, be sure to get references from previous clients and contact those clients and speak to them at length about their experience and outcomes.

A good advisor will keep the strategy realistic.

Do the same if planning for yourself.

Plan not only how much you can produce, but given your sources of fruit and production, how much wine you can make at specific quality levels.

At the same time as you develop or redevelop your strategy for making your wine, you need to develop your plan for what routes to market you will use, and even more importantly – how much can you sell and at what prices in each marketing channel?

By prices, I mean the price you receive in the market, not the list price.

Whether you are selling direct, or through distributors, or even managing your own sales to retailers and restaurants, there are costs; costs not only of doing business, but costs for marketing allowances to your trade partners or retailers and restaurants.

You might receive your list price from selling direct online to a consumer, but do you have to offer free shipping to get the sale?

What is the cost of picking and packing mixed cases based on each consumer’s order?

How much is the software to manage your selling and how much time does someone have to allocate to run it?

If you don’t have expertise in these things before setting your budgets, you need knowledgeable advice.

The basis of all marketing beyond the strategy is the brand.

Your marketing goal is to gain awareness or at the minimum ‘being noticed’ when a potential buyer is in the market.

If no one notices your brand on the shelf, on a wine list, or online, you will make no sales.

Your brand is the key to being noticed.

Before you think of the label and package, you need to decide what your brand stands for.

What value are you providing to a buyer in exchange for their money?

Most wines can provide good quality at a specific price and that is the base price of entry for any brand.

We call this the core product.

If the core does not meet expectations, there is no sense in augmenting it.

Of course, there are many good value wines on the market.

Why should someone spend $25 for your wine versus others at the same price from the same region made of the same grape variety?

What distinguishes your wine is what makes it a brand.

What are the values and story behind the wine?

A good marketing expert and a good package designer will help you articulate them, so these important but ephemeral attributes can be encapsulated in what the market sees when someone is thinking of buying wine: your brand and its packaging, your price, your website, your social media, your cellar door, and your staff.

These last sentences may seem extraneous to many, but we know that consumers make their choices based mainly on subconscious influences.

So, similarities in price, region, grape variety get them to what we call a consideration set, which are the wines they choose from in-store, online or at a restaurant.

If they notice the wine, if they have heard of or recognise the package (colour, logo, font, etc.), the probability of purchase increases dramatically.

Good marketing is about creating a distinctive offering and developing buyer awareness.

It is not about differentiation in the sense of tasing or being different; it is about being a distinctive brand that is recognisable, that has its own story, that helps fulfil the needs or desires of the potential buyer.

The distinctive brand image you create is then translated into the various platforms for reaching the most likely buyers.

Just like tending a vineyard, you don’t graft over or pull up your vines until there is a major reason to do so.

You don’t change your distinctive brand image and the accompanying story, names, logos, colours, etc. unless there is a major reason to do so.

Keep your presence in the market the same, even though you might get bored with it.

Buyers don’t think much or for very long about what they buy, so make it easy for them to notice you wherever and whenever they enter the market to buy wine.

A note of caution here.

If you are keeping your existing brand, but contemplating a complete redesign, be careful.

Your existing customers know your current packaging and branding.

A drastic change may result in them not noticing your wines.

A redesign is best if done gradually over a period of years.

Finally, there is a plethora of real-world research which shows the best time to invest in marketing is during a major downturn.

Other companies are cutting back and often eliminating marketing spend or new product development.

Companies that increase their spending outperform those that cut back and don’t increase their budgets until things look better.

If you can, now is the time to approach channel partners, redevelop social media and internet marketing, and access new markets.

Larry Lockshin is Emeritus Professor at the University of South Australia. This article first appeared in the March-April issue of WBM – Australia’s Wine Business Magazine.