Analysis of French wine come-back fuels market scrap - Essay Example

Topic: Analysis of "French wine come-back fuels market scrap" Introduction Marketing is a very complex For some, it boils down to the supply and demand law as discussed in economics class. Meaning, some customers will decrease their purchase of the goods of their choice if such products increase prices. Usually, the will shift to another product that has the same benefits, uses or quality but they are offered at lower prices. Marketing, at an advanced stage includes the use of PEST analysis and the deep analysis of the many factors that uniquely affect the sales and expenses of a company as it operates it business (Berkman, 1986). Furthermore, Marketing encompasses the marketing plan that centers on the four P’s of marketing. They are Product, Price, Place and Promotion (Churchill, 1995). The following paragraphs explains these topics in more in depth study. PEST ANALYSIS Political. The Chronicle article Tasting France on the Cheap (Gray, 2007) states that revenues from French wine had worriedly dropped to the gutter because the French government had opposed the invasion of Irag in the U.S.’ drive to destroy the nations’ huge stock of weapons of mass destruction. Currently, the sales generated from French wine has dropped by 1.8 percent on a continuing downward slide when over –all wine sales have increased by 2.7 percent in terms of supermarket wine statistics. The government is cooperative to the wine industry. The government of these European Union Countries are cooperative with the plans of each state to increase sales of their wine products, especially the French who have gathered together for this huge gathering of sad – faced Wine producers (Still, 1988). And, the political Conditions are also very conducive to produce wine in each of these countries. There is peace in all the European Union member states. In fact, the government laws and regulations of each member of the European Union State help increase the trading of wine in their countries. Definitely, the French government is cooperative to its own wine industry. Economic. The level of wine selling activity has slowed down (Baumol, 1998). One very good reason is because there is a slow down in the demand for European Wines. There is now an overstock of inventory laying in the warehouses and stores in each o the European Union members’ wine companies. On the other hand, Inflation has not affected the production costs of the wine companies in these member European Union States (Mankiw, 1998). There is relative prosperity for the place but such prosperity does not automatically mean increase in the wine sales of the French and other European Union member wineries. On the other hand, The United States Wine Market has shot up in terms of consumption, exports and imports for more than ten years. Specifically, the United States wine imports had almost doubled. These imports came from Chile, Italy, Spain, France and Australia. The main reason is that the American Wine Companies had increased their selling prices resulting to a drop in the volume and sales of American wines(Seale, 2003). Definitely, there is now a dynamic change in the wine industry. The historical scenario is characterized the wine market sales being mostly cornered by the traditionally fermented ones. This study shows that customers bought wines based on which country or place they came from(Keon, 1995) Social. The culture & practices of the people living here and around the world is to lessen their love for wines (Hunger, 1996). There is a strong demand for beer and other alternative spirits that have caused a shying away from the wine products displayed I the store and grocery shelves across Europe and the rest of the world. And, media & distribution has been producing more beer products and less of the wine produce in television, radio and newspaper advertisements. Furthermore, the business methods of some age – old wine families and France and other European Union member states is to shy away from massive advertising campaigns. For, they prefer to pay for usual age –old advertising way of giving leaflets and giving sample wine bottles to capture the hearts and taste buds of new customers. The natural attributes of the member wine families show that are not willing to give up their wine business just because there is slow down in the wine sales around France, the other European Union States and around the world. The article Who won the 1976 Blind Tasting or French Bordeaux and the U.S. Cabarnets? Paramedics to the Rescue(Dominic, 2004) stated that Paris blind tasting during 1976 that the American wines unanimously won over the French wines. Further, Evidently, the culture & practices of the people living here and around the world is to lessen their love for wines. Technological. The Wine making process is technologically slow (Pindyck, 2001). The European Union member states have noticed that many people do not want to imitate the old people who prefer to gobble wine products because beer is now the very popular social life beverage. In fact, the well publicized 1976 Paris tasting of U.S. Cabernets and French Bordeaux stated that the American wine companies won over their French Rivals(Ciccherri, 2004). Also, many of the wine companies are insensitive to what the current and the non –customers want because they continue to stick with the relative cost of old advertising method of giving out leaflets and sample wine bottles. Lastly, the companies are too stuck up with their current competence in delivering the wine products to the family and supermarket store shelves. Truly, The Wine making process is technologically slow. Develop recommendations for the development of a Marketing Strategy The wine companies must develop a marketing strategy. The wine companies that have bonded together must understand the variances in customer needs, preferences as well as the buyers’ behaviour. This can be accomplished through feasibility studies (Hesselbein, 2001). And, the company will have to spend a large sum of money for advertising their products in the radio, television and the newspapers. One marketing strategy is for the wine companies to give prizes or raffles for customers that buy their products. In addition, the marketing strategy will include the slogan “Only French wine is influenced is expertly aged in oak barrels matured to produce the exquisite color and sensory description of what true wine should be.(Perez –Prieto, 2003). Identify the factors that they should address to do so There are many factors or key issues that the companies must address in order to beat the competition in the global market place (Etzel, 2001). The companies must identify the market characteristics. Meaning, the wine companies must have enough knowledge of the products sold by the competitors. One factor is the difference in the market prices offered by the competitors. Then these competitors’ prices will be compared with the French wine companies’ market prices. For economics tells us that customer’s demand for products will decrease if the products’ prices go up. Then the French wine companies must research on the quality of the competitors’ products. The French companies will then compare the quality of their products with the quality of the competitors’ products. For, many customers prefer to buy products of better quality than the competing products. Next, the companies must use the factor of distance when studying the competitors’ products. For, many customer prefer to buy from their neighborhood as against buying from another country. For, the service will be faster if the company is near the customers. Then, the company will have to use the best promotional scheme possible taking into account the capacity to pay the costs of advertising in the radio, newspaper and television stations (Molloy, 1996). The French companies will then compare the product, price, place and promotion of their companies as against the marketing mix use by the competitors. Furthermore, there are other factors to consider in studying how to defeat the competitors in the wine trade business. One such way to cluster the current and future customers into market segments (McCarthy, 1993). Then, the wine companies will use positioning or location strategies to devour a big portion of the competitors’ market. Also, the company must take into consideration the culture of the current customers as well as the prospective customers. Next, the wine companies must take into account the regulations or laws that is prevailing the competitors’ market segment (Kinnear, 1996). For, the wine companies must not violate any of the laws whenever the wine companies venture into organizational capacity as well as the cultural fit in trying to chop away a big portion of the competitors’ customer base. For, advertising for something the company cannot give will soon backfire on the companies. Also, different prospective customers have different customer cultures especially in the global marketplace. Definitely, there are many factors or key issues that the companies must address in order to beat the competition in the global market place. Obviously, there are many factors or key issues that the companies must address in order to beat the competition in the global market place (Kotler, 2001) Evaluate the factors that they should address to do so. All the above factors are very important to help keep the wine companies maintain or even increase its net income. For, the failure of the wine companies to implement steps in order to maximize the study of the above factors would result to lower sales and the corresponding decrease in the wine companies’ net income (Slavin, 1989). And, the factors discussed above must be studied and implements because there is a need to match an organisation’s strengths with market opportunities. To explain, if the wine company is popularly grown from grapes, then the grape farms must enter into extensive as well as exhaustive research where two or more grape varieties are intertwined, mixed in order to come up with a more sweeter and better smelling wine product. The factors above to be studied because the companies need to take stock of the organizations’ assets For better marketing programs that will the current customers’ as well as prospective customers’ wants and needs. To this end, the above factors have to be scrutinized in order to assist in the determination of which internal and external audits that have to be immediately put into place. Obviously, all the above factors are very important to help keep the wine companies maintain or even increase its net income (Chisholm, 1981) What arguments would you use to help justify the expenditure to their stakeholders? There are many arguments to help justify the marketing expenditures to the stakeholders (Thompson, 1999). Another big reason for the big marketing expenditures is that the wine companies will have to break into new and uncharted markets. Also, since there is a strong demand in the United Sates for European (especially French) red wines, the expenditure is justified (Morgan, 2003). Further, marketing is a large part of the both the sellers’ and the buyers’ lives(Drucker, 1980). And, the advertising costs according to internet by Quick MBA(2007) stated that: “The marketing concept of building an organization around the profitable satisfaction of customer needs has helped firms to achieve success in high-growth, moderately competitive markets. However, to be successful in markets in which economic growth has leveled and in which there exist many competitors who follow the marketing concept, a well-developed marketing strategy is required. Such a strategy considers a portfolio of products and takes into account the anticipated moves of competitors in the market”. Wells (1997) stated that marketing could be “a blend of academic psychology, marketing theory, survey methodology, and practical experience. Real-world applications, and real-world problems and limitations, were stressed throughout”. CONCLUSION In terms of analysis of the current situation and the recommendation for CCVF wine, The PEST analysis shows that the government of France and the other European Union governments are have created an environment that is conducive to the prosperity of the wine fermenting business in these countries. The peaceful environment in all the European Union States will hasten business transactions in the wine making business. Also, the economic condition in France and the neighboring European Union member states shows that there is an economic slowdown because the demand for wine products has shifted to alternative products. Thus, there is an overstock of wine products in the wine basements and the grocery stores. Also, inflation has plays a small part in the economic situation here. Thus, since there is no strong demand for wine products, the sales growth in wine products has stymied in these European Union places. Socially, the company has to include the different cultures and practices of current and prospective customers in countries around the world in their marketing strategy. The company has to advertise its wine products in television, radio and newspapers infusing the local cultures and traditions in order to get not only the sales but also the hearts of the current and prospective customers. Technologically, the wine making process has been preserved through the years. However, the marketing strategy then has been remaining stagnant and needs to change in order to keep up with the competing products like beer, rhum and other spirits. The should stop focusing on giving leaflets to their neighbors but focus on spending huge sums of money in the internet, radio, television and newspapers. And, the wine companies must be sensitive to the wants and needs (whims and caprices) of the current and prospective customers. In conclusion, a marketing strategy that is responsive to the suggestions, comments even to the point of pampering has to be done in order to capture the hearts of the current and prospective customers. Also, the four P’s of marketing MUST be part of the company’s strategic marketing plans. Finally, the wine companies have to study the benefits, prices, strengths, weaknesses and other data of the competing products in the formulation of its strategic marketing plan. REFERENCES Baumol, W (1998) Economics –Principles and Policy, London: Dryden Press Berkman, H. & Gilson, C (1986) Consumer Behavior Concepts & Strategies, Kent Publishing, Boston, Mass, Churchill, G. & Peter P, (1995) Marketing, Massachusetts: Irwin Press. Chisolm, Roger, McCarty, Marilu, (1981)Principles of Economics, London, Scott Foresman Co. 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