Known as an independent and democratic nation, the legislative structure in New Zealand allows elections process to select the heading leader of the governing authority as Prime Minister, according to CIA (2014). Nevertheless, due to historical monarchy, the Queen of Great Britain is still regarded as the chief of state; therefore, there is always an existence of close relationships between New Zealand and the United Kingdom as well as other countries considering the Queen as the chief. Thus, wines export activities have been strongly enabled among those countries. In addition, the Tourism New Zealand, a governmental body, has been established to be responsible for the national marketing strategy to position the national brand as 100% Pure New Zealand as stated by Morgan, Pritchard and Piggott (2002). Thereby, wines industry in New Zealand would be also positively branded.
According to CIA (2014), New Zealand is a high income country with total GDP reaching approximately $198 billion while the tourism industry was accounted for more than 14% in GDP among more than 70% of services sector. Additionally, exports also reached $40.21 billion in values while three biggest markets for wines in 2015 included the US, Australia and the UK and the Sauvignon Blanc has still maintained the 1st wine brand position with around 86% of export volume (New Zealand Winegrowers, 2015).
Among total population, CIA (2014) demonstrated that about 86% live in urban regions,besides baby boom generation. It would encourage the increasing consumption of wines domestically.
New Zealand Winegrowers has implemented Virus Elimination Project to apply a variety of technological tools such as fact sheets, social media, the online photo library, series of videos and Leafroll 3 App for both IOS and Android (New Zealand Winegrowers, 2015).
Supported by the Ministry of Business, Innovation and Employment, the Ministry for Primary Growth partnership and Plant and Food research, Powdery Mildew Best Practice , Vineyard ecosystems, Lifestyle Wines and Grape Days programs were implemented to improve the quality of wines sources. Reducing dependence on chemical materials and managing epidemics are the most important roles to upgrade wines industry.
2. SWOT Analysis
According to Cidral (2011), in terms of strengths, Rongopai Wines possess several advantages such as products positioned as one of the oldest brands with high quality in a long history and positively supported by middle-class wines segment due to its objectives creating values-for-money products. In addition, establishing Rongopai Wines Shop and the mailing system would enable the company to create a two-way communication channel with customers so that feedbacks could be timely received. Its weaknesses might include the small quantity of production and a basically high system of fixed costs for producing wines, as analyzed by Cetrangolo and Briz (2008). Targeting international market, Rongopai Wines would have more opportunities because the global demand has tended to increase but the global undersupply has been witnessed, as reported by Morgan Stanley Research (2013). Additionally, the greatest threats derives from fierce competition in global wines industry and the decrease of wine consumption. According to Morgan Stanley Research (2013), the global wines industry has been still dominated by old world countries such as European nations while new world countries like New Zealand, Argentina or Chile could just occupy a small proportion of market shares.
3. MARKETING STRATEGY
- MARKETING OBJECTIVE
• To achieve the annual growth rate by ten percent by the end of next fiscal year
• To obtain the leadership position in terms of market shares in New Zealand market
• To increase market shares in the UK market by 20 percent compared to this year
• To launch new ranges of products related to Sauvignon Blanc
• To launch promotion campaigns in targeted markets
• To conduct market researches for new markets (European and East Asian countries)
- TARGET MARKET
Morgan Stanley Research (2013) reported that China is ranked as the fifth largest wines import market in the world while with the twice-doubled consumption in the last half of decade, China was estimated to reach the leading position as the globally largest consumer of wine. Thus, China should be considered as the most importantly targeted market for Rongopai Wines. Possessing the agent in China, Rongopai Wines should make partnerships with local wines firms or supermarkets to increase market shares.
- PRODUCT STRATEGY
Positioned as the medium brand with high value-for-money quality, Rongopai Wines could develop products that focuses on educate rising Chinese middle and upper class men who might be willing to pay reasonably high price for high quality wines. These customers have good understanding of international brands; therefore, it seems easier to occupy their minds. However, localization strategy in favors and tastes should be involved to create the connected feelings to local customers.
4. PRICING STRATEGY
The value for money image should be maintained in new markets to retain the brand consistency as well as a strong brand loyalty; therefore, the suitable pricing strategy should be medium-priced.
Due to current existence of Rongopai Wines products, the promotion campaigns should focus on raising brand awareness. Besides Public Relations activities and favorite brand ambassadors, Wansink et al. (2006) highlighted three risk-lower strategies to make customers more familiar with wine products, including proposing specific wines, accompanying food with wines and implementing wine tastings.
- Cetrangolo, H. & Briz, J. (2008). Wine Argentinean Export Chain: A Case Study in the UK Market. The 110th EAAE Seminar System Dynamics and Innovation in Food Networks Innsbruck-Igls, Austria.
- CIA (2014). The World Factbook: New Zealand. [Online]. Available from: https://www.cia.gov/library/publications/the-world-factbook/geos/nz.html. [Accessed: 25 September 2015).
- Cidral, M. (2011). Marketing Plan for Rongopai Wines.
- Morgan Stanley Research (2013). The Global Wine Industry: Slowly Moving from Balance to Shortage. Morgan Stanley Australia Limited.
- Morgan, N., Pritchard, A., & Piggott, R. (2002). New Zealand, 100% Pure. The creation of a powerful niche destination brand. Journal of Brand Management, Vol.9, pp.335-354.
- New Zealand Winegrowers (2015). Annual Report 2015. New Zealand Wine. [Online]. Available from: http://www.nzwine.com/info-centre/statistics/. [Accessed: 25 September 2015].
- Wansink, B., Cordua, G., Blair, E., Payne, C. & Geiger, S. (2006). Wine Promotions in Restaurants: Do Beverage Sales Contribute or Cannibalize?Cornell Hotel and Restaurant Administrative Quarterly, Vol.47, No.4, pp.327–336.