1. The document discusses strategic aspects of wine marketing, including differentiation approaches based on price points and target customers as well as challenges in areas like product quality, marketing, resources, and costs. 2. It also covers topics like changes in wine consumption trends, preferences of new consumers, export market opportunities and threats, and the need to define strategic priorities to pursue quantitative and qualitative growth. 3. Finally, the document emphasizes challenges around competitiveness, value creation, customer satisfaction, and education given the diversity of wine firms and products in the industry.

1. Università degli Studi di Padova Dipartimento Territorio e Sistemi
Agro-forestali
INTERNATIONAL WINE GRAPE SYMPOSIUM
The marketing of wine farms and
the preferences of new
consumers
Luca Rossetto
Università degli Studi di Padova
PACENGO DEL GARDA (VR) - 6 aprile 2011

2. The marketing of wine farms and the preferences of new consumers
SUMMARY
1. OULOOK ON THE WINE INDUSTRY
2. THE MARKETING OF WINE
3. WINE CONSUMER ASPECTS
4. STRATEGIC ASPECTS
5. FUTURE CHALLENGES

3. Outlook on the industry
FRAGMENTATION AND
Supply DUALISM
• ¼ of vineyard is divided among
Farms with vineyard: farms having less than 1 hectares
496 thousands and 710 (80% of total farms)
thousands hectares (Istat) • 1/5 of vineyard is owned by farms
with more than 10 hectars (1%)
• 90% of firms has a business less
Wine firms: ~164 housands
than 5 million euro
producers and ~3.900 bottlers
(CCIA) • 1,5% of firms produces more than
30 million euro
• 10% of market is concentrated on 4
firms only (table wine)

4. SUPPLYOutlook on the industry
VARIETY
• Big cooperatives
PRODUCERS • Small and isolated producers
• Private big firms
• Private medium firms
COMPETITIVE CHOICES • Price range
• Product extension
• Territory

5. Outlook on the industry
TERRITORY VARIETY
- 34 DOCG
- 313 DOC
- 118 IGT
- 84 wine roads
CONSORTIA EXPERIENCES
- Historical experiences –
Success
- Producers initiatives
- Growth: 15 (1960) => more
than 100 (1990) => more than
140 (2006)

6. Outlook on the industry
CONSUMPTION TRENDS
70,0
Consumo pro capite (litri/anno)
60,0
50,0
- Decreasing consumption in Francia
Italy 40,0 Italia
Germania
- Consumption between 30,0
Svizzera
producing and not 20,0 Australia
producing countries are Stati Uniti
10,0
converging
0,0
- Preferences have been Fonte: Gti, 2010.
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
shifted towards VQPRD
wines 2000 2007 var. %
- Bottled vs. bulk wine mil. Litri in % mil. Litri in % 07/00
- High share of sales TOTALE VINO E SPUMANTI 964 791 -18,0
Spumanti 51 42 -16,7
between 3 and 5
Vino 913 100 748 100 -18,1
euro/bottle Per denominazione:
- Increasing power of large - Vqprd 197 22 212 28 7,8
- Da tavola 717 78 550 73 -23,3
scale retail
Per formato
- confezionato 744 81 660 88 -11,3
- sfuso 179 20 102 14 -43,0
Fonte: Ismea AcNielsen.

7. Outlook on the industry
CONSUMPTION PRICE RANGE
>150
Icon
>30
Ultra
75.1 - 150
premium
15-30
II
Ultra
15.1 - 75
Price (€/lt)3.35-15
premium
)3.35
I
Mass 10 €
Super
market
7.1 - 14
Premium
5 .1 - 7
1.65-2.2
Premium
5€
Popular
3.1 - 5
premium
Basic
<3
<1.1
To consumer
Fonte: Bruni, 2011

8. Wine Marketing
The Marketing of Wine

9. Wine Marketing
Can we do marketing?

10. Wine Marketing
Can we do marketing?
FINAL CONSUMERS

11. Wine Marketing
WHAT MARKETING SHOULD BE APPLIED?
THE PRICIPLES OF MARKETING DO NOT CHANGE
THE WAY IN WHICH WE BUILD AND APPLY
MARKETIG STRATEGIES CHANGE ACCORDING
TO INDUSTRY OR TO PRODUCTS
THE MARKETING MIX IS DEFINED AD HOC
ACCORDING TO THE MARKET, TO THE
PRODUCTS AND TO THE CONSUMERS OF A
SINGLE FIRM

12. Wine Marketing
Competitor FIRM Competitor
Product Price
Place Promotion
CONSUMERS (potential)

13. Wine Marketing
PRODUCT
Il product wine is composed by:
• Wine (variety, vintage, alcohol, color, flavor, taste,
etc.)
• Packaging (bottle, brick, bag in box, demijohn, no
pack)
• Label and back label (mandatory/voluntary
elements, communication tool)
• Capsule and cork
• Pack (technical and communication tool)
• Brand (to find, to recognize, to communicate)
• History (communicative and evocative/suggestive
tool)
• Services (wine tasting, visits to wineries, delivering
wine home, etc.)

14. Wine Marketing
PRICE
How to fix the price:
• Demand (customer/target)
• Competition
• Distribution channels
• Production costs
• Product lifecycle
• Perception about the wine quality
• Psychological price
• Veblen effect (ultrapremium/icon wines)
(ultrapremium/icon

15. Wine Marketing
PLACE (marketing channels)
• Direct sales (85% bulk wine)
• Wine shops (specialized channel, high variety, expert
target, high prices)
• Large scale retail (> 50% of sales, increasing sales,
strong price competition)
• HORECA (dynamic channel, eating out, wholesale
suppliers, restaurant and hotel chains, catering)
• Delivering sales (not developed in Italy)
• E-commerce (firm website and specialized web
retailer)
• The export
The choice of marketing channel depends on: da:
da:
• The final consumer (target)
• Positioning

16. Wine Marketing
PROMOTION (communication)
Exchange messages on the market through:
• Point of sales
• Salesmen
• Advertising
• Promotions
• Public Relations
• Internet (web 2.0)
• Sponsoring
Objectives of communication:
• Gathering brand prestige/value
• Gathering product prestige/value
• Reinforce the product image
• Reinforce the brand image

17. Wine consumption
Aspects of Wine Consumtpion

18. Wine consumption
Wine consumption and needs
The Pyramid of needs (Maslow)
Physiological, security, social, self- • Needs
esteem, Self-actualization – Physiological needs
(convenience products)
– High needs (specialty
products)
• Pleasure (emotions)
• Re-assurance (value for
money)
• Self-esteem (distinction)
• Self-fulfillment
(gratification, conspicuous
consumption)
• Belongings (status)

19. Wine consumption
Wine consumption and information
Wine as experience good
• Search goods
– Qualitative aspects can be measured
and appreciated before the consumption.
• Experience goods
– Qualitative aspects that cannot be
checked before buying the product. The
quality can actually be appreciate after
consumption only (Philip Nelson, 1970)
• Credence goods
– Aspects of a good which can never be
verified by the consumer regardless the
consumption of the good

20. Wine consumption
Wine consumption and information
Components of the wine
• Search components
– Quality aspects
– Tools: wine guide, wine experts, seller’s advices,
wine tasting
• Experience components
– Quality aspects
– Tools: external cues associated with tangible
elements (vineyard, vintage, price, packaging,
marketing channel) e no tangible ones (brand)
• Credence components
– Geographical denominations, wine made from
organic grapes, technologies employed in
viticulture and/or enology
– Tools: certifications, traceability
• Reputation of a wine

21. Wine consumption
Wine consumption and information
The knowledge and wine consumer choices
Choice
Risk Knowledge Experience Criteria
• Conduct extensive solvers
– Purchasing new wines, low knowledge high low limitated few
and experience, no choice criteria
– The risk of making mistakes is high
• Behavior solvers limited
– The customer has a medium knowledge
even if limited to some products
– The customer is no able to understand if
the brand will satisfy or not its choice
criteria
• Behavior Routine solvers
– The customer has hierarchical personal
preferences and he makes his decisions
following criteria established over time
low high high many
– The customer has clear expectations on
specific brands
Fonte: Mattiacci, 2011

22. Strategic Aspects
Strategic Aspects

23. Strategic Aspects
25,0 4,0
CHANGES IN 3,5
Quantità (milioni ettolitri)
20,0
3,0
Prezzo (euro/litro)
Valore (mldi euro)
CONSUMPTIONS AND 15,0 2,5
2,0
10,0
CONSUMER
1,5
1,0
5,0
0,5
PREFERENCES 0,0 0,0
Q.tà Valore Prezzo
- Fast changes on 900
800
Germania
international market
Esportazioni (milioni euro)
700 Usa
600
500
- Strong growth of Italian 400
300 UK
exports F
200
100 J
CH
CAN
A NLS DK
0 RUS
- Significant differences on -20,0 -10,0 -100 0,0 10,0 20,0 30,0 40,0 50,0
-200
markets (red, white and Variazione media annua (in % 2001-2004)
1.000
rosè wines, price range) Usa
900
800
Germania
- Growth of sparkling wines Esportazioni (milioni euro)
700
600
500
UK
- Growth of large scale 400
300
retail CAN 200 CH
NL Japan 100 DK F
S A RUS
0
-14,0 -12,0 -10,0 -8,0 -6,0 -4,0 -2,0 -100 0,0 2,0 4,0 6,0
Variazione media annua (in % 2005-2009)

24. Strategic Aspects
STRATEGIC ASPECTS
DIFFERENTIATION APPROACH
- High variety of wine firms
- Competitive positioning
LOW PRICE MEDIUM PRICE HIGH PRICE
MARKET MARKET MARKET
Mass Market, Differentiated Visibility on
high volumes products markets
Fonte: Bruni, 2011

25. Strategic Aspects
STRATEGIC ASPECTS
DIFFERENTIATION APPROACH
- Customers (target)
- Products (wine)
All market
MARKETING
MARKETING
DIFFERENTIATED
NOT DIFFERENTIATED
(product extension,
TARGET
(mass market)
high volumes)
GEOGRAPHIC
NICHE MARKETING
MARKETING
(low volumes)
One (close winery)
segment
Low High
Level of differentiation

26. Challenges
Future Challenges

27. Challenges
COMPETITIVENESS AND CREATING VALUE
PRODUCT
- Quality and customers
- Products (wines)
MARKETING E COMMUNICATION
- Brand, label, bottle, etc.; promotion on markets and marketing
channels
RESOURCES AVAILABLE
- Economic/financial resources, management
- Raw material (grapes)
COSTS
- Production
- Transportation and logistics
- Ageing processes
- Scale/scope economies

28. Challenges
QUANTITATIVE AND QUALITATIVE GROWTH
LOOKING FOR MARKETS AS TARGET
- Customers
- Countries
- Marketing channels
KEY ELEMENTS: CHANGE, POSITIONING, COSTS
DEFINING STRATEGIC PRIORITIES
- Push strategies (distributors, es. large scale retail)
- Pull strategies (final consumers)
KEY ELEMENTS: MINIMUM SIZE
CUSTOMER SATISFACTION E CUSTOMER EDUCATION
- New models of consumption (enotourism, wine bar, etc.)
- New approaches to consumption (sensory marketing,
neuromarketing)