Belgravia Wine and Packaging for Generation Y - Case Study Example

Belgravia Wine: Packaging for Generation Y About Belgravia Wine Belgravia Wines is a relatively new winery having started its operations in 1996 and delivered its first wine label in 2001. Since then, the winery has been producing wines in “whites and fruity reds” as it seeks to penetrate the concentrated wines market in Australia (Belgravia Wines, 2011, para. 1). As a relatively recent market entrant, Belgravia has to find a market penetration strategy, which will give it a competitive edge over other wineries. Ideally, Generation Y (hereunder Gen Y) presents an under-tapped market segment which the firm can use to gain market share. According to Fountain and Fish (2010, p.1), Gen Y is a term used to refers to people born between 1977 and 1999. Some of the reasons that make Gen Y such an appealing target group include its sheer size and the fact that most have not taken to drinking wine yet, but have shown the potential of being future wine consumers based on their current interests in the same (Fountain & Fish, 2010, p. 1). A study conducted by Kent (2007, cited by Philips, 2008, p. 30) for example found out that at least 30.5% of the surveyed Gen Y respondents consumed wines on a weekly basis, while 60% of the respondents in the same survey admitted to consuming wine once a month. Some of the challenges identified as hindrances to the uptake of wine consumption by Gen Y and which can be addressed through packaging include the perception among young people that wine is meant for the older generation; the perception that wine is dull, lacks vitality; and the robustness associated with other social drinks such as spirits and beer (Philips, 2008). Packaging and Gen Y Like everything else in the market place, the wine package is the first encounter that consumers have with the product. Based on its appeal or lack thereof, it can arouse interest in the product, or push the consumer away. As Aaker (1996) observes, the package determines the perception that the potential buyer forms regarding the product’s reliability, qualities, value, confidence, and loyalty. Specifically, Kotler (1996, p. 28) states that the package has a self-expression quality, which consumers usually interpret as a representation of the contents therein. In the wine industry, Thomas (2000, p. 12) states that how the wine is packaged “reaches out beyond the point of purchase to make statements about the purchase”. If Thomas’ statement is true, this then means that packaging wines targeting Gen Y needs to be different from wines targeting other generations. Ideally, the wine package should not only attract new customers, but develop lasting relationships with them in a manner that will enable them want to drink the wine in future, hence developing brand loyalty. As Charters (2006) indicates, wine is part of the civilised culture, but people still need motivation to drink it. Packaging and the aesthetic appeal that comes with it has been identified as one such appeal that can make wines more attractive to new consumers who have not developed taste preferences for specific brands yet (Szolnoki et al., 2009). Currently, the packaging of Belgravia as seen in figures 1, 2, and 3 below can only be described as ordinary. Looking at the figures, there is no indication that the wines are any different from any other wines found in the market. The wine bottles are ordinary, and the labelling is not only ordinary, but dull too. Figure 1 Figure 2 Figure 3 To package Belgravia wines to appeal to Gen Y therefore, a few factors need to be considered. They include the trendy nature of the Gen Y consumers, their love for the environment; and their appeal for things that have innovative brand appeals (Barber & Taylor, 2009; Noble, Haytko, & Philips, 2009; Nowak, Thach & Olsen, 2006). Additionally, and in line with observations made by Barber and Taylor (2009), this report considers the view that the “role of a wine products package is to attract, communicate and persuade, with creativity” the consumer’s perceptions regarding the product. Placed in a crowded shelf close to other brands, there is little doubt that the Belgravia wines featured in figures 1, 2, and 3 would not stand out. This then means that the wine package of the subject winery cannot effectively generate sales or create a flattering brand perception among Gen Y potential consumers (Mueller & Charters, 2011). Recommended actions While the use of bottles seems to be the convention in wine packaging, the desire to capture Gen Y consumers may need a shift from the ordinary. One of the viable ways that Belgravia Wines can do this is by adopting Can packaging as their package of choice. While this does not necessarily mean that the winery needs to completely stop packaging wine in bottles, it means that the winery should diversify the product packaging in order to appeal more to the youth. Admittedly, can packaging may affect the traditional perceptions of quality that people have always associated with bottled wine, but this can be shaped through other marketing approaches such as advertising. As Chakravarti and Janiszewski (2004) note, advertising is essential for purposes of creating brand awareness and preferences especially in young people. The can packages may also change the perception that Gen Y has about wine, since the “single serve” may be perceived to mean that the wine has been packaged with one person in mind, and that people can easily carry it to different locations. According to Thomas (2000), some of the major hindrances of wine consumption uptake by the young people are the perceptions that wine has to be taken in a group setting, most especially at the dinner table. This means that the mobile young person who is rarely at home at dinner time rarely drinks wine except on rare social events. By encouraging snacking habits on wine through individualised, smaller and cheaper packages as shown in figure 4, the wineries can succeed in changing such perceptions and hence sell more to Gen Y. Figure 4: Canned wine from one of Australia's wine makers Already, some industry players such as Aussie Wine are using can packaging as a way of appealing to Gen Y. Some of the advantages that Aussie Wine (2012) associates with using the can packages include their safety, convenience, reduced weight and style. In addition to the fact that cans would have more appeal among Gen Y due to the above indicated reasons, there are also the indirect advantages that include the relative affordable prices of canned wine owing to their small size compared to the bottled wine. The element of design and the use of colour is also an added advantage when packaging wines in cans since they allow for more design flexibility and colour usage compared with bottles. Having indicated that the bottle packages will not be done away with completely, it is also important for them to be redesigned in order to match the styles and colours that will be used on the canned wines. This will enhance brand identification and brand equity among consumers who may want to purchase larger quantities of the same product. As indicated by Szolnoki, Herrmann, and Hoffmann (2010, p. 2), through packaging, “consumers are not buying just a product, but also a positive image, lifestyle, picture, colour and model with the product itself”. If this observation by Szolnoki et al. (2010) were to be considered when using can packaging, the same would need to be utilised in the bottle packages too. Hence, in addition to introducing new can packages, Belgravia Wines will have new look bottles for their bottled wine. Impact of the proposed can packages and new labels on bottled wine Considering that this report was intended to discuss how packaging can be used to market more to Gen Y, one of the expected impacts of the proposed changes is that Belgravia Wines will have more appeal among young consumers. This expectation corresponds with findings by Szolnoki et al (2009), that “young inexperienced consumers orientate themselves at the design when being a purchase situation”. In other words, young people are more likely to purchase wine based on how well it is packaged. This implies that if Belgravia Wines succeeds in packaging its products in a manner that attracts the youth, then it is more likely to find a ready market in that market segment, some who may become loyal customers in future. By sticking to the bottle packages, it is also expected that earlier brand customers will still have their wines in their accustomed package, with the exception of the changed label. In other words, the proposed packaging is meant to draw new and youthful customers to the brand, without disappointing existing customers through too drastic changes in the overall product packaging. Overall, and as Hall and Mitchell (2008) observe, packaging is one of the ways through which wine marketers can appeal to the youth niche market, whose different perceptions and purchase cues are quite different from the traditional wine markets made of older people. For Belgravia Wines, packaging their products with the intention of appealing to Gen Y means that the firm has an opportunity to infiltrate the market and hence develop a loyal consumer base for future purposes. References Aacker, D 1999, Building strong brands, Free Press, New York. Aussie Wine 2012, ‘Aussie Wine introduce an exciting new era in canned wine and PET plastic bottle wine packaging” viewed 4 May, 2012, < http://aussiewine.net.au/> Barber, N & Taylor, C 2009, ‘Wine bottle closure: The importance to millennials and baby boomers during purchase situations’, Cenometrie, vol. XVI, pp. 1-14. Belgravia Wines 2011, ‘Our wine’, viewed 4 May 2012, < http://belgravia.com.au/wine/our-wine> Charavarti, A & Janiszewski, C 2004, ‘The influence of generic advertising on brand preferences’, Journal of Consumer Research, vol. 30, no. 4, pp. 487-502. Charters, S 2006, Wine and Society: The social and cultural context of a drink, Elsevier Butterworth-Heinemann, Oxford, UK. Fountain, J & Fish, N 2010, ‘It’s a happy drink’: Australasian generation Y’s experience and perceptions of sparkling wine’, 5th International Academy of Wine Business Research Conference, 8-10 Feb., pp. 1-7. Hall, C M & Mitchell, R 2008, Wine marketing: a practical guide, Butterworth Heinemann, Oxford. Kotler, P 1999, Marketing Management, 12th edn, Pearson Education, London. Mueller, S & Charters, S 2011, ‘Generation Y and wine’, International Journal of Wine Business Research, vol. 23, no. 2. Noble, S, Haytko, D & Philips, J 2009, ‘What drives college-age Generation Y consumers?’ Journal of Business Research, vol. 62, pp. 617-628. Nowak, L, Ritchie, F & Olsen, J E 2006, ‘Wowing the millennials: Creating brand equity in the wine industry’, Journal of Product & Brand Management, vol. 15, no. 5, pp. 316-323. Philips, S 2008, ‘Spinning the bottle: The relationship between public relations and young Australian wine consumers’, Unpublished Dissertation, RMIT University, Melbourne. Szolnoki, G, Herrmann, R & Hoffmann, D 2010, ‘Origin, grape variety or packaging? Analyzing the buying decision for wine with a conjoint experiment’, AAWE Working Paper, no. 72, pp. 1-18. Thomas, A 2000, ‘Elements influencing wine purchasing: a New Zealand view’, International Journal of Wine Marketing, vol. 12, no. 2, pp. 1-10. Read More