Ceja vineyards: marketing to the hispanic wine consumer - Case Study Example

CEJA VINEYARDS: MARKETING TO THE HISPANIC WINE By Lecturer Key Issues Lack of up d business and marketing plansCeja was unsure of whether to use the three tier system or sell its wines direct to its customersDirect selling would enable Ceja to increase its profit, but this strategy risked the company from being unable to reach all the customers particularly Hispanic customersCeja was unsure of how it would price the product for Hispanic customers since there was a general belief that Hispanics are generally poor.

RecommendationsCeja should establish an updated business and marketing plans. The marketing plan should outline the firm’s marketing objectives, strategic goals and marketing strategies. The business and marketing plans should be based on concrete market research.The firm should go for direct marketing to Hispanics customersThe firm should not alter prices for Hispanics customersAnalysisBusiness and marketing plansIt goes without saying that any firm that wishes to be successful in selling its products must have well developed and up-to-date business and marketing plans.

The primary role of business and marketing plans is that they act as the guide for the business by outlining what the business should do. Effective business and marketing plans, which foster business growth and success, are based on extensive market research aimed at identifying and characterizing the target market. Fortunately, the case study has results of extensive market research as reported in appendix 2. The work of the firm in this case is to update its business and marketing plans based on these research results.

Direct marketingCeja should go for direct marketing for this customer segment (Hispanics). Data in appendix 2 shows that Hispanic wine consumers comprise a market that has not yet been tapped. Hispanics are highly likely to purchase a bottle of wine compared to average Americans, which means that going for the direct marketing option will not be hectic for Ceja (Gilinskey et al. n.d). The only challenge that Ceja will face by going the direct marketing way is that if Hispanic wine consumers are widely spread, marketing and selling costs might be high.

To address this, the firm can sell directly to retailers, pubs and restaurants who will then sell to final customers. There are 39.9 million Hispanics and if only 10% of these decided to consume Ceja’s products, this will be enough market to justify direct marketing (appendix 1) (Gilinskey et al. n.d). If the company was to go the distributor way, it will be losing 50% of sales compared to direct marketing because it must sell to the distributor at a lower price (50%) to allow the distributor make profit out of the supply chain.

No need to alter prices for Hispanics customersResearch results in appendix 2 shows that Hispanics are as much as 96% more ready to spend money on wine than average Americans (Gilinskey et al. n.d). This means that Hispanics are not as poor as they are thought to be. If the firm reduces prices for the Hispanics market, it might be accused of using discriminative pricing, which may lead to the loss of Non-Hispanics customers. ConclusionCeja is wondering whether to use direct marketing or use the traditional three-tier marketing system for Hispanics market.

It is recommended that the firm uses direct marketing instead of the three-tier system because the Hispanics market is a large and untapped market while the three-tier system will reduce the firm’s profits. The firm should not reduce prices for this market because research results show that the market is ready to spend on wines. AppendixAppendix 1: Size of Hispanics marketTotal population: 39.9 millionPercent of Hispanics that are wine consumers: 10%Size in numbers: 4 million consumersBibliographyGilinskey, A.

, Nowak, LI., Santini, C. & Villarreal, R n.d, Ceja Vineyards: Marketing to the Hispanic Wine Consumer? North American Case Research Association, Inc.