Market Analysis of Constellation Wines Australia - Research Paper Example

This report, International Marketing Analysis, and Strategy is intended to be a research from which an international marketing plan for an Australian company emanates. The research is to indulge in the market of an Australian company with its products’ (or services’) prominence and economic viability in its market highlighting the various determinants that affect its business. The criterion upon which company selection for this report is selected is: “’ An Australian company considering the export of a product or service to a country where they are not presently represented’. ‘The business industry used for this report is the Australian wine industry which is the fourth largest exporter of wine in the world1 exporting over 400 million liters of wine a year to the international export market that includes wine-producing countries such as France, Italy, and Spain” (Dutruc-Rosset, 2002, p. 23). Australia’s ‘domestic wine market is just as flamboyant consuming over 400 million liters of wine per year’.

‘The wine industry is a significant contributor to the Australian economy through employment, export, and tourism'. According to the Australian Wine and Brandy Corporation wine fact sheet, in 2005/06 Australians ‘consumed about 430 million liters of wine with a wholesale value of $1. 9’ billion which was an increase in annual per-person consumption from the previous decade to 22.5 liters. As an export earner, the industry hit a record 3. 02 billion in fiscal 2007 with the US, Canada, Continental Europe, and Japan, being the major importers from Australia. (See appendix 1 for further facts about the Australian wine industry).

Investment in the Asian market has not been as overt as in other western markets for Australia and it is on this premise that Constellation Wines Australia is the choice company for this report which has prospects of extending its business into South Korea where it is not operational as of now.

Constellation Wines Australia is the largest wine-making company in the world owned by Constellation Brands in Victor, New York. It was founded by Thomas Hardy after he arrived in South Australia from the English country of Devon in 1850 initially calling it the Tintara Vineyard Company (Hardy, 2001). The progressive expansion of the company saw it purchase London-based Emu Wine Company and Chateau Reynella in 1982 as its first corporate acquisition. In 1992, “Hardy’s company merged with Berri Renmano Limited to become Australia’s second-largest wine group and adopted the name BRL Hardy Limited. 2003 saw this brand merge with that Constellation Brands to create the world’s largest international business and due to this merger, BRL Hardy Limited was renamed the Hardy Wine Company. This continued metamorphosis saw Constellation Brands (in 2006) acquire Vincor International adding the West Australian brands of Amberley and Goundrey to the Hardy portfolio” (Hardy, 2001, p.78). On March 31, 2008, the Hardy Wine Company changed its name to constellation Wines Australia and currently trades in such labels as Amberley, Banrock station, Goundrey, Houghton, Hardys, Omni, and Stanley wines (Hardy, 2001).

The purpose of this marketing plan is to investigate the economic viability and opportunities presented in the possibility of Constellation Wines Australia expanding its business into South Korea. It is observable that rich South Korea has not been exploited fully given the high wine consumption rates that are pegged to this market. The expanse of Australia’s wine business in other overseas countries like the US, and Continental Europe is so extensive and surpasses such investment in Southern Asia by far and it is on this surmise that South Korea was chosen as a potential foreign market for Constellation Wines Australia’s export worth of analysis and research.

This analysis looks into the external environment factor in the target market that will determine the market plan resorted to. First to be considered are the factors that would favor business ventures in South Korea. The relative government stability and cordial diplomatic relationship South Korea continues to enjoy with Australia promises minimal political impediments towards Constellation Wines Australia’s introduction of its branches in South Korea. In addition, legal requirements and regulations for importation are in tandem with international inter-country product/services regulations posing no unfamiliar market specifics.