The Warranty of Biodynamic Products - Essay Example

Biodynamic or Organic Wines Institution: Name: Date: Student ID: The potential marketing landscape for biodynamic or organic wines The choice of the consumers on biodynamic wine is mostly instigated by healthy issues and the while they are in the search of quality attributes (Fotopoulos et al., 2003). Biodynamic wines differ from the organic ones because they use products like cow horn manure (preparation 500) by filling a cow’s horn with dung followed by burying it in the ground during the cooler months to enhance soil fertility and increase the vitality of the plant. According to Delmas and Grant (2008) wineries adopt to manage their green orientation as a strategy for achieving product differentiation. Wineries in turn manage their green orientation. In the modern time, consumers have increased awareness of natural issues and this has in return led to organic foods shifting from niche to mainstream positions. The warranty of biodynamic products is in their characteristics by coherently strategizing in the planning and evaluation of those strategies to aid in gaining competitive advantage. In some cases the warranty of quality is what consumers seek for while in other cases it is defined by a stage in the consumers lives thus changing the consumption pattern like the birth of a baby as observed by Hughner et al. (2007). The consumers may have values which in return changes their consumption pattern therefore leading to a rise in the market for biodynamic wines. There is no task that can be referred to as an art or landscape referred to as a garden without human intelligence, dedication and imagination. It’s believed that quality wine appellation is not just due to administrational or geographical boundaries or of impersonal and abstract regulations (Toften and Hammervoll, 2008). Today, many consumers know that the main way of achieving greater social status is by wearing the right labels. Now, a group of market researchers realized that the same principle holds for genuine wine. Consumers therefore are becoming more health conscious and a number of them are choosing to take products that are organic produced in nature. This behavior doesn’t discriminate biodynamic and organic wines. Biodynamic farming takes a farm as a living tied to the cycles of the whole cosmos (Fotopoulos et al., 2003).Biodynamic production requires specific organic preparations applied at specified high times. Customers’ option towards biodynamic and organic wine is commonly motivated by the search for quality attributes and healthy issues (Sharples, 2000). Being biodynamic or organic can characterize a factor of choice for consumers; therefore the accessibility of organic product on the market has popularized organic products among consumers. As customer’s knowledge towards natural concerns grew, manufacturers have seen organic as a strategy for marketing their products (Kotler and Armstrong, 2010). Macquariedale Organic Wines, the first vineyard to receive biodynamic certification began turning to organic and biodynamic production in large scale since they consider damage of landscape was lessening the quality of their wines. Hannan's team found out that organic and biodynamic farming enhanced the soil quality better than traditional ways of cultivation. Nevertheless, the strangeness of biodynamic farming gave it a comprehensible distinction. "If viticultural knowledge tells us that these techniques produce comparable improvements, we reasoned that the nonrational or romantic imagery of biodynamics and its tools of precepts could serve as the foundation for a very distinctive character in the market even though the character could be valued either negatively or positively,"(Hannan , 2013). In comparison, organic production was more familiar and common to consumers. Researchers have noted that winemakers deciding to turn biodynamic have superior quality to start with, whereas those opting for organic did not necessarily have to. In either category, certification boosts sales reputation. Despite, some wine producers fear from marking their bottles with the name of organic or biodynamic, fearing it would create an unearned aura of superiority or raise complacency. "Don't just get attracted to me for the reason that I am doing biodynamic production," vintner said. "Get attracted to me for the reason that I have quality products and, above that, I'll give you a quality biodynamic." one vintner told them. But labels eventually played insignificant role in signaling quality of biodynamic wines (Hannan, 2013). In some way, the wine itself became a sign of the precision and care that the name had demanded. The micro and macro environmental forces that affect the ability of marketing biodynamic or organic wines The latest changes in the competitive environment, happening at both global and local level have reshaped that righteous circle that has been capable of creating advantage for the local rural communities. According to Kotler and Armstrong (2010), the micro and micro environment consists of players close to the organization that facilitates the ability to serve the target customers and propose the factors influencing the this environment. These are: the organization, the suppliers, the competitors, the customers, the public, the stakeholders and the marketing intermediaries. This kind of environment can be both micro or macro environment and still can be divided into external and internal. From the industry’s view, porters’ model of five forces offers an analysis of the competition. To understand the Winery’s business situation the utilization of porters’ 5 forces tool is very significant. Porters’ model assumes that there are five significant forces that determine the threats and competitive power, shaping the competitive nature in the industry (Porter, 2008). These environmental factors influencing ability to market biodynamic or organic wines are: Threat of new entrants New comers into the market bring new capacities into the trade and desire to achieve a market share. Power is also influenced by the ability of individuals to enter company’s market. Entry barriers will determine the level of the threat. These entry barriers might be advantages to relatively both new entrants and the existing competitors. These entry barriers includes: customers' switching costs, economies of scale, capital investment needs, unequal access to distribution channels restriction and legislation by government (Porter, 2008). Buyers' power Buyers are powerful if and when they have negotiating leverage in relation to the industry, particularly, when they are price sensitive. The power of buyers grow, when there is a little number of buyers with greater volume of purchases, since the products are standardized and no differentiation is applicable and corresponding products are accessible; little switching costs (Porter, 2008). Threat of substitutes Substitutes have similar functions as the original product and they therefore limits an organization’s potential of making profits because they have price ceilings. If the substitutes offer better prices than the original products at the market, consumers will therefore switch the costs in preference to the substitutes (Porter, 2008). Suppliers' power The power to he suppliers is increased by the fact that they are able to limit product quality, adjust the price upwards and more so if the numbers of consumers are high. Therefore the suppliers will not depend on the industry. The participants of the wine will therefore face high switching costs in different suppliers as the products offered are differentiated (Porter, 2008). Overall competitive rivalry In a competitive industry, the players may use such tools as price discounts, launching new products as well as aggressive advertisements to sell their products. This leads to rivalry among the competitors which its intensity depends on the intensity of the competition. The competition grows if many competitors are performing at the market and if their size and power are roughly equal to each other (Porter, 2008).. The competition intensity also grows if the industry grows at a slow rate and if the exit barriers are high with the competitors highly committed to the business as they aspire to be the leaders. Also, if companies do not have information about their competitors, this leads to others having an upper hand because they lack the familiarity witch each other and cannot read signals (Bonn and Fisher, 2011). Given that wine is considered to be a high quality product and produced for the upper end market, this results to different tastes and products leading to market segmentation. In the wine business, the biodynamic wine segment is considered as a niche within a niche. The increase in the interest in the consumers towards organic and biodynamic products, it becomes easier for the promotion of wine. Due to its productive methods, organic wine helps avoid several problems like eliminating the problem of competing into a niche which it too small (Porter, 2008). Also, consumers and producers do not share a philosophy or a similar set of values among themselves. While some consumers are concerned of environmental issues in the adoption of organic products, others are motivated by healthy issues such as it has been vastly known that biodynamic wine reduces headaches as compared to the non organic wines which contain sulphur preservatives causing wine induced headaches (Fotopoulos et al., 2003). References Bonn, I. and Fisher, J. (2011), “Sustainability: the missing ingredient in strategy”, Journal of Business Strategy, Vol. 32, No.1, pp. 5-14. Delmas, M.A. and Grant, L.E. (2008), “Eco-labeling strategies: the eco-premium puzzle in the wine industry”, AAWE working paper n. 13 Fotopoulos C, Krystallis A, and Ness, M. (2003), “Wine produced by organic grapes in Greece: using means-end chains analysis to reveal organic buyers’ purchasing motives incomparison to the non-buyers”, Food Quality and Preference, Vol.14, No.7, pp. 549–566. Hughner, R., McDonagh, P., Prothero, A.. Shultz, C. and Stanton, J. (2007), “Who are organic food consumers? A compilation and review of why people purchase organic food”,  Journal of Consumer Behavior, Vol. 6, No. 2-3, pp. 94 – 110. Hannan, M. (2013). A Fine Wine: Do Labels Make a Difference? Retrieved on February 4, 2013: http://www.gsb.stanford.edu/news/research/fine-wine-labels-make-difference Kotler, P and Armstrong, G.(2010),Principles of Marketing. 13Th ed. Pennsylvania:Prentice Hall, 613 p. ISBN 978-013-6079-415. Porter, M., E. ( 2008). On Competition. 2nd ed. Boston: Harvard Business Press, 576 p.ISBN 978-142-2126-967. Sharples, L. (2000), “Organic wines – the UK market: a shift from ‘niche market’ to‘mainstream’ position?”, International Journal of Wine Marketing , Vol.12, No. 1, pp. 30–41. Toften, K. and Hammervoll, T. (2008), “Niche marketing and strategic capabilities: anexploratory study of specialised firms”, Marketing Intelligence & Planning , Vol. 28, No. 6,pp. 736-753. Read More