INTERNATIONAL MARKET DEVELOPMENT
CLASS PROJECT - WINE TRADE
Students have been assigned to a team of 2 or 3 to develop an international market development project.
Students are assigned to work for the same fictitious wine domaine: Domaine de X, with the same product line. They will be given fixed parameters/constraints regarding the wines and the domaine.
Each team will be assigned a different market for these wines, specifically:
-a specific country: Switzerland
-a type of retailer : Niche Supermarkets
5. Swiss Market Overview
Consumption
/ Colour
Imports French Wine
Imports
63.4%
31,2%
5,4%
1 881 mhl
68% ntl wine
consumption
396.7 mhl
21,1%
ntl imports
75%
L-R Wines 2014 White Red-Ros辿
Value K 1 807 (7.3%) 22 966 (92.7%)
Volume Kl 413 (5.6%) 6 999 (94.4%)
*Sud de France
6. Target Market Overview
Image of French Wine
2/3 CG production red wine
L-R wines / Aspiran : 束 new 損
Strengths Weaknesses
Image : 束 Old World 損
LR wines : low visibility
White wine : Swiss only
Opportunities
Entry level : Own Brand
LR red good wine and Ros辿
Connoisseurs & Young Swiss :
adventurous
Threats
New World wines
Italian & Spanish wines quality
Spain (aggressive pricing)
Young Swiss : beer = trendy
SWOT
8. Consumer Profile & Trends
Swiss residents drink wine
Increase in value
Decrease in volume
2 main groups :
85%
Younger generation
and women
45 years +
New
Loyal
Innovative
Italy and Spain : cheap wines
15. 3. Pricing
Wine
Category
Cost
Price
Margin Distributor
Price
Distributor
Margin 30%
Recommend
Sell Price
High end 7.90 50% 12.89 SFr 16.76 SFr 18.99 SFr
In-
Between
4.60 45% 7.31 SFr 9.50 SFr 10.45 SFr
AOC Red 3.45 50% 5.70 SFr 7.41 SFr 8.99 SFr
AOC
standard
2.30 45% 3.71 SFr 4.82 SFr 5.45 SFr
All Distributor purchase prices are DDP, insurance and taxes included
Recommended Sell Price includes 8% VAT
16. 3. Pricing Entry Level Wine
Hit a different target
Offer exclusivity to Denner
No packaging, limits costs
Sell in quantity
Bulk sales for red and ros辿 wine
o 75 K Bottles = 56 250 L
o 50 K Bottles = 37 500 L
Own Brand Strategy
Cost price: 1.60 / L
Sell price (40% margin) :
2.24/L
EX WORK
Decreasing price
17. 3. Pricing : Sales objective
To recover costs and make profits, our goal is to sell at least :
90 % red high end = 9 K
Company cost = 640 K
80 % red in-between = 54 K
Represents 675 K (selling price)
60 % red entry level = 45 K
ros辿 entry level = 45 K
35 K PROFIT
18. 4. Promotions & Comm.
Wine Salons
Domain presence for peak sales periods
Main urban cities
Wine fairs
Pre-festivities (Christmas etc.)
In store communication
6 days; 23 000 visitors
Swiss Salon
3 days; 52 000 visitors
International Salon
#6: Note : Ros辿 wine almost inexistant on this market
#9: 85% of Swiss residents drink wine
Swiss consumers drink less but better
They appreciate high quality products, and are willing to pay high prices if convinced of that.
Younger and female consumers are more daring in their choice of wines: they like to discover new products
45 year old and older consumers are more loyal to Swiss wines
Swiss consumers appreciate new and innovative products, but remain loyal to brands they know
#10: French class, New World style
Use reputation of French wine
Break with 束Old World損 Image
Target Young and Connoisseur adventurous end clients
Communicate origins 束Aspiran損 : New yet terroir
Bottle label strategy to reflect this position
Sud de France : Brand values : authentic, convivial, modern, diverse, creative.
Active marketing strategy : international presence, wine events, referenced in Swiss supermarkets
Economy of scale; mutualised means; skilled team
#11: Ros辿 : very low demand in Switzerland : opportunity
White : few sales as Switzerland produces and consumes mainly Swiss white. BUT
UNIQUE SELLING POINT :
different varietals to Swiss white
Red : 63% of CGs production, highest % imports of French wine, highest potential gross product sales
Entry Level : to be sold as MDD Denner : bulk shipments
AOC good wine and upscale wine : responds to Swiss expectations that French wine is the best and most expensive
AOC Upscale : essential for country image, but lower volumes.
AOC good wine : larger volumes, most gross margin
#19: In store communication
Clos de la Garelle offers POS communication for its international partners : Flyers, posters, labels