DIGITAL MARKETING PLAN
Brancott Estate, New Zealand
EXECUTIVE SUMMARY
This report attempts to extend a digital marketing plan for a wine company named Brancott Estate in New Zealand. Brancott Estate has aim to get attach to the land and it is commitment to take care and preserve philosophy of winemaking. The company also makes wine from other famous winegrowing places of New Zealand including home town Marlborough. The company has marked the dedication and skill of winemakers in each bottle of wine which is a symbol of the respect and care for the natural resources and land. Firstly situation analysis is conducted for Brancott Estate and then a digital marketing plan is extended.
OBJECTIVES
- To conduct environmental scanning of New Zealand wine market
- To conduct internal analysis of Brancott Estate
- To develop a digital marketing plan for Brancott Estate
SITUATIONAL ANALYSIS
Internal Analysis
Resources and Capabilities
In relation to resources and capabilities, one strategy companies recognize is surrounded by the customer base, and present cases of how they may well control the market base by means of filling product emptiness in the forms of subsidiary offerings, innovative expansions. In relation to the production and resource market, the proposition is to concentrate on dealing with convergences in cost so as to get benefit of domestic cost compositions. Another strategy is to form vertical business through reconfiguring current value chains. Fleury and Fleury (2009) reveal in the case of Brazil that more than a few companys may well be categorized as international value chain creepers as they looked to actions in the value chain as vicinities where they may well throw in. While this particular stream of research seeks to identify strategic options for companies, whether they are advanced market companies or developing market companies, the overall thrust of the options has close similarities to the country-specific advantages delineated by Rugman (2009). Thus, the country-specific advantages have been translated into the strategy formulation process. It would be interesting to explore whether or not companies that have expanded into emerging markets have a two-tier process. The value-chain as one of the most vital strategic choices , where innovation is at the centre of strategic management, and Wells (2009) draws our attention towards the value of innovation as strategic management in contemporary international market. Even though information has developed into a product in contemporary globalised market, companies globally have to find out to make the most of the utilization of their information technology by means of influencing its technological competences. Seeing that the absolute structural variable, the marketing plan of company is significant in a market in which recognizing the rules of strategic management is decisive to achievement (Peng et al., 2008).
As shown in Diagram no. 1, for Brancott Estate resources and capabilities have been categorically defined in terms of financial resources and capabilities, human resources and capabilities, technological resources and capabilities, relational resources and capabilities, and organizational resources and capabilities. In terms of financial resources the company is dependent on debt, whereas as regards human resources the focus of the company in on developing employees’ competences through specialized training. For technological resources, the competences lie in product innovation and process innovation. Finally in relation to relational resources and capabilities, the competences lie in variety of distribution channel and competent relations with domestic customers.
Diagram No. 1: Resources and Capabilities Brancott Estate
Source: Menorca, Fernández-Ortiz and Emeterio (2012)
It becomes quite apparent that Brancott Estate applies a very systematic model resources and capabilities management. However the model necessitates to be redefined considering the emerging market environment in New Zealand’s wine market and further Brancott Estate mission to expand its market share and business. The contemporary market environment is all about cost saving and increasing efficiency where the traditional model of value chain or managing resources and capabilities is no longer going to be of much help for Brancott Estate, therefore the company needs to adopt a new digital model, particularly considering the proposed digital marketing plan.
Customers
Well-known brand names may well publicize product gains and go ahead to superior recall of advertised gains than non-famous brand names. Brand name in fact is the formation of an image or the growth of a brand identity and is a luxurious and time taking course of action. The growth of a brand name is an indispensable fraction of the progression seeing as the name is the foundation of a brand’s image. Brand name is vital for the company to exert a pull on customers to buy the product and influence goes over purchasing. Customers lean to distinguish the products from a general viewpoint, linking with the brand name all the features and satisfaction experienced by the buying and consumption of the product. There are several unknown brand names and choices accessible in the market. Customers may well have a preference to trust foremost well-known brand names. These prominent brand names and their images exert a pull on customers to buy the brand and bring about go over purchasing and lessen price linked switching behaviors (Keller, 2003). Sprott et al (2009) in this context find that the force of the relationship flanked by a definite brand and a consumer’s self-concept to be an imperative determinant of the consumer’s price sensitivity. For that reason, an additional vital question arises as when does the call for uniqueness directing to higher or lower pricing competition.
In order to keep up a better position in the market, Brancott Estate attempts to target premium customer segment through delivering constantly high quality wines with a rising focus on varieties of products considering the demand of the customers. Fresh wine styles and flavours is facilitating the company to uphold its position with current target segment and further to put on entry into other potential customer segments with diversification strategy. Worth to mention here that delivering a constantly high quality of wine with the fresh flavours for which New Zealand has developed into acinformationd is key to the continuous success of the market. Moreover, in order to meet up the demands of the sensitive consumer for sustainability the company necessitate to keep up its finest position in the market through applying new technological based delivery system, for which a digital delivery system is suggested. Moreover, pricing would be key for retaining the existing and obtaining new customers. For this, cost saving approach is a must where digital marketing can work wonder.
Culture
Culture is information as a model of common supposition, beliefs, and hope that lead members’ construals and proceedings through elucidating fitting behavior in a company (O’Reilly and Chatman, 1996). In view of the fact that several companies run in go-ahead environments and that well-built cultures may well enhance the performance of a company. Moreover, well-built cultures show the way to evenness in performance through enhancing individual’s agreement and readiness to support company’s goals, trimming down ambiguity in the course of goal lucidity, and rising motivation. Nevertheless, in unpredictable environments, those in which technology and macro-economic circumstances are shifting fast, the very steadiness that enhance company performance in static environments appeared to hold back a company’s capability to become accustomed to fresh strategic challenges (Sørensen, 2002; Van den Steen, 2005).
For Brancott Estate, the organizational culture of the company is based on four basic foundations namely decision making, leadership effectiveness, relationships and information sharing. This is shown in Diagram no. 2.
Diagram No. 2: Organisational Culture of Brancott Estate
Source: Booz & Company Inc(2010)
Considering the fast changing work environment and technological advancement Brancott Estate needs to give more focus on information sharing part of orgnisational culture. This is particularly imperative considering the proposed digital marketing plan for the company.
SWOT Analysis
Strengths
- Renowned brand in wine market
- Good financial and business performance
Weaknesses
- Traditional model of value chain
- High cost of production
Opportunities
- Wine market has had been growing considerably
- Competence and resources to expand and grow in the market using digital technology
Threats
- Price sensitive customers
- Security concerns in Digital marketing
Source: Brancott Estate ( 2012)
MARKETING MIX
Product
- Products offering in premium segments
Price
- High price of products
Place
- Own distribution through shops, part from through retailers
Promotion
- Concentration on adverting through both print and electronic media
Source: Brancott Estate ( 2012)
BUYERS BEHAVIOUR
Brancott Estate offers to the buyers world’s most curious Bottle App delivering up to 14 exclusive experiences covering up a range of wine-specific content and amusement. The company is proud of offering this exhilarating innovation to its customers. The app works by prompting buyers to concentrate on their smartphone’s camera on different parts of any new-label Brancott Estate Classic still range bottle to facilitate the a range of experiences (http://www.brancottestate.com).
There is high demand of premium wine products, but buyers preferences are changing fast. They have now option of low cost and high quality products, therefore retaining them has become tricky (PWC, 2011). Brancott Estate has challenge to come into the market with low priced and high quality wine products. Working in this direction, the company necessitates to take the low approach of production and marketing. In this context, digital marketing will be a solid solution.
Brancott Estate needs to invest in a present generation technologies (Steinthal, 2011) to establish digital sales channels which are allowing wine consumers to progressively experience comfortable online shopping.
EXTERNAL ANALYSIS
Market
Kotler defines marketing as “the societal and decision-making process by which companies generate value for customers for capturing value from them in return (Kotler and Armstrong, 2006 p.5)”. Moreover, as according to Armstrong and Kotler (2007), marketing all concerns to structuring correct and well-built relationships with the true customers, where the essential conception is observed as recognizing the explicit, ever changing wants and desires of the target market and bringing the preferred happiness superior than other companies (p.164). For that reason, it is indispensable to keep in mind that the company’s most budding customers are as well the competition companies paramount customers. Kotler and Armstrong (2006) further argue that marketing is a very open phrase covering a variety of different actions, and as a result, these different activities are to be mentioned using in the marketing strategy of cosmetic products companies and these activities of marketing strategy are identified as segmentation, targeting, and positioning.
Currently the wine market of New Zealand is tremendous and this is the outcome of dramatic growth of the market in terms of wine growers. There are currently more or less 1,100 wine growers, just about two times the number in 2002. On the other hand, every single one winery category has as well grown considerably to the point that till 2011 there were more or less 700 wineries in New Zealand (PWC, 2011). There has had been a sharp fall in financial returns ever since 2008 economic down globally , but interestingly despite the low returns and financial crisis globally, wine market in New Zealand has had been growing considerably. Markedly, the most prospective market in New Zealand market lies in its export and wine exports from the country have went up high in recent times (PWC, 2011). This is evident from the Diagram no. 3. The red line in the diagram clearly reveals that from 2002 to 2011, there has had been five times growth in wine exports from New Zealand.
Diagram No. 3: New Zealand Wine Exports : 2002-2011
Source: PWC (2011)
This high growth of wine exports from New Zealand suggests that Brancott Estate has huge opportunity of growth being part of New Zealand’s wine industry, where it can expand its market and further revenue taking part in the export market of the country’s wine market. On the other hand, it is as well revealed that New Zealand’s wine production size has rushed forward almost 40% , where the high productivity is driven by first-class weather and the growing of large scale innovative plantings in Marlborough. Moreover, there is high demand of premium wine products that is as well fuelling the market of New Zealand’s wine export. Taking advantage of this production efficiency Brancott Estate can take a big leap in export market.
New Zealand’s wine exports market has taken a new turn in terms of growth and so is the case when it comes to undesirable mix shift to bulk wine as wineries straight away attempted to clear tanks and making cash flow resulting bulk wine prices falling down to under half levels and bulk, nevertheless wine rose from just about 5% to 30% of exports by size. This drift has paved the way for emerging a lower-priced market segment, for the most part in the UK and Australia, serving up big retailers formerly unmet demands for special brands and private labels from New Zealand.
Competition
According to Porter(1985), in order to have profitable business operation and long standing survival in the market, a company needs to create a sustainable competitive advantage , where competitive advantage originates from grouping together the business activities in terms of creating value through offering products that make difference in the market and for other competitors not easy to compete. Value creation for customers is key to attaining competitive advantage. Porter establishes that a company may create for its customers with the help of two types of strategies namely cost leadership and product differentiation. This is shown in figure 1 below. Evidently in the case of cost leadership strategy, a company needs to have cost focus rather than catering different market segments, whereas in the case of differentiation strategy, the company needs cater different market segments rather than focusing lowering cost.
Figure 1: Porter’s Competitive Advantage Model
Source: Porter (1985)
Formerly low cost and low price ruled the export and domestic wine market of New Zealand, but things have changed now and the country’s wine market shifted to a new-fangled business called bulk leading to New Zealand’s market at low cost and low prices. This new strategy is working as in the case of falling price, the export volumes are increasing considerably. As bulk wine exports of the country grew 1,150% by volume and 480% by value with average prices per litre falling from $6.30 to $2.90 during the period of 2007-2011 (PWC, 2011). This is shown in Diagram no 4.
Diagram No. 4: Sources of Sales of New Zealand Wine
Source: PWC (2011)
A wine company such as Brancott Estate looking for a low cost-low price or cost leadership strategy needs to reduce cost through simplifying logistical requirement , enhancing economies of scale and try to concentrate on a segment needs. This is shown in Figure 2.
Figure 2: Cost Focus Strategy
Cost Leadership | Cost Focus | |
Aim of product Innovation | To reduce product cost by:
Lowering material content, Facilitating ease of manufacturing, Simplifying logistical requirements, etc. |
To design in only enough performance fro target segment’s need |
Aim of Process Innovation | Reduce material usage or lower labor input
Enhance economies of scale |
To tune the value chain to a segment’s needs in order to lower the cost of servicing the segment |
Source: Porter (1985)
Markedly the growth and survival of New Zealand’s wine industry depends on its export market and so is the case of a company like Brancott Estate. The estimated share of New Zealand’s export in various markets is shown in Diagram. Evidently New Zealand’s wine market has prospective future in both global export market, and particularly in Australian off trade. Therefore, Brancott Estate has opportunity to target the export market of Australian off trade, apart from global wine markets. Notably Brancott Estate should target solo export market segment as Australian off trade, where the company should attain competitive advantage adopting cost leadership strategy, low cost-low price-high volume export.
As price is in all probability the most imperative thought for the common customers and customers with high brand loyalty are enthusiastic to disburse a premium price for their preferential brand, consequently their purchase intent is not simply influenced by price (Cadogan and Foster, 2000). More importantly, customers have a well-built faith in the price and value of their preferred brands so much so that they would evaluate and weigh up prices by means of substitute brands (Keller, 2003). Customers’ fulfillment may well as well be built by comparing price by means of perceived costs and values. More clearly, if the perceived values of the product are bigger than cost, it is viewed that customers will pay for that product. Further, loyal customers are enthusiastic to give a premium even if the price has increased for the reason that the perceived risk is far above the ground and they have a preference to pay a higher price to stay away from the risk of any alteration.
Customer Groups
Financial crisis has no effect on demand growth in key wine export markets. Therefore, Brancott Estate should look for the potential export markets where the share of New Zealand export is low. The growth and survival of New Zealand’s wine industry depends on its export market and so is the case of a company like Brancott Estate. The estimated share of New Zealand’s export in various markets is shown in Diagram no. 5. Evidently New Zealand’s wine market has prospective future in both global export market, and particularly in Australian off trade. Therefore, Brancott Estate has opportunity to target the export market of Australian off trade, apart from global wine markets.
Diagram No. 5: New Zealand Wine’s Estimated Export Share
Source: PWC (2011)
STEP Analysis
In STEP analysis there is conducted analysis of socio-cultural, technological, economic and political environment. Here STEP analysis of New Zealand wine market from the perspective of Brancott Estate is conducted as regards these environmental factors.
Socio-cultural Environment Analysis
Rising next generation consumers is all set to give opportunity for Brancott Estate in luxury wine segment.
Technological Factor Environment Analysis
There are a number of digital marketing tools obtainable for Brancott Estate for low cost and efficient marketing particularly in export segments.
Economic Factor Environment Analysis
Currently the wine market of New Zealand is tremendous and this is the outcome of dramatic growth of the market in terms of wine growers and this is huge opportunity for Brancott Estate to expand and grow in the market.
Political Factor Environment Analysis
The government in the country is supporting the export of wines to global markets and particularly Australian market ad therefore Brancott Estate should take advantage of this emerging favourable situation.
Digital Marketing
A information-management point of reference is to be found as a unique competence that holds up the formation of sustainable competitive benefits in the forms of innovation. Organizations with an information-management oriented do better than those categorized as market oriented. More importantly, a market orientation is turning out to be a division of a information management orientation (Darroch and McNaughton, 2003). In fact, technology has grown to be an imperative machination in settling forward in the competition among organizations. Generally the operation of technology in organizations in undertaken in the course of various phases namely acquiring information , codifying information , disseminating information , and development of information and deploying information. However, conducting the task of information management in the course of these phases successfully is not an easy one, as the technology managers in companies may come across with a number of tribulations (van Zolingen and Streumer, et al., 2001). Nonetheless, in no way such tribulations hold in low esteem the importance of technology for organizations in the contemporary world of information, as every strategy has perspectives and pitfalls. As a result, the focal point of running an unbeaten technology for organizations ought to monitoring and controlling the whole operational phases of technology with focusing on core competencies and strategies.
The model of technology as a commanding competitive tool has had been stalwartly stressed in the world of strategic management, though the area is still to be fully explored particularly in the framework of the competitive benefit offered by technology competence for organizations operating in different sections of operations. Whatever explorations have been so far manifest that organizations explicit technology resources are key to implementation of technology practices that are categorized as social technology resources, and technological technology resources. The general technology practice is that organizations make use of both technology resources; however, the impact of social technology resource is comparatively more effective on competitive benefit than technological resource. To some degree, technological reserve in the form of technology is not positively linked with competitive benefit; nevertheless, technology competence is considerably linked with competitive benefit (Chuang, 2004).
Taking advantage of technological revolution Brancott Estate has opportunity put into practice digital marketing strategy building on and adapting the doctrine of long-established marketing, making use of the opportunities and challenges presented by technology and the digital tools and techniques. The digital marketing strategy will say aloud the most gainful way for Brancott Estate to take over a definite phase of time. This strategy will as well point toward which plans and tools ought to be utilized to carry out this way. Explicitly the purpose of the digital strategy is using strengths, with that of the framework in which the company is operating, to its benefit.
The proposed digital marketing model of Brancott Estate includes tools in the forms of RSS, SED, SMS, SOAP, webPR. These are basic tools and strategies for the proposed digital marketing of Brancott Estate.
CONCLUSION
For Brancott Estate resources and capabilities have been categorically defined in terms of financial resources and capabilities, human resources and capabilities, technological resources and capabilities, relational resources and capabilities, and organizational resources and capabilities. The contemporary market environment is all about cost saving and increasing efficiency where the traditional model of value chain or managing resources and capabilities is no longer going to be of much help for Brancott Estate, therefore the company needs to adopt a new digital model, particularly considering the proposed digital marketing plan. Moreover, pricing would be key for retaining the existing and obtaining new customers. For this, cost saving approach is a must where digital marketing can work wonder for Brancott Estate.
RECOMMENDATIONS
- In order to meet up the demands of the sensitive consumer for sustainability the company necessitates keeping up its finest position in the market through applying new technological based delivery system, for which a digital delivery system is suggested. Moreover, pricing would be key for retaining the existing and obtaining new customers. For this, cost saving approach is a must where digital marketing can work wonder for Brancott Estate.
- The proposed digital marketing model of Brancott Estate includes tools in the forms of RSS, SED, SMS, SOAP, webPR. These are basic tools and strategies for the proposed digital marketing of Brancott Estate.
JUSTIFICATION OF PROPOSED DIGITAL MARKETING PLAN
Even though information has developed into a product in contemporary globalised market, companies globally have to find out to make the most of the utilization of their information technology by means of influencing its technological competences. For Brancott Estate resources and capabilities have been categorically defined in terms of financial resources and capabilities, human resources and capabilities, technological resources and capabilities, relational resources and capabilities, and organizational resources and capabilities. The contemporary market environment is all about cost saving and increasing efficiency where the traditional model of value chain or managing resources and capabilities is no longer going to be of much help for Brancott Estate, therefore the company needs to adopt a new digital model, particularly considering the proposed digital marketing plan. Customers may well have a preference to trust foremost well-known brand names. These prominent brand names and their images exert a pull on customers to buy the brand and bring about go over purchasing and lessen price linked switching behaviors. In order to meet up the demands of the sensitive consumer for sustainability the company necessitate to keep up its finest position in the market through applying new technological based delivery system, for which a digital delivery system is suggested. Moreover, pricing would be key for retaining the existing and obtaining new customers. For this, cost saving approach is a must where digital marketing can work wonder for Brancott Estate.
In unpredictable environments, those in which technology and macro-economic circumstances are shifting fast, the very steadiness that enhance company performance in static environments appeared to hold back a company’s capability to become accustomed to fresh strategic challenges. For Brancott Estate, the organizational culture of the company is based on four basic foundations namely decision making, leadership effectiveness, relationships and information sharing. Considering the fast changing work environment and technological advancement Brancott Estate needs to give more focus on information sharing part of organizational culture. This is particularly imperative considering the proposed digital marketing plan for the company. The growth and survival of New Zealand’s wine industry depends on its export market and so is the case of a company like Brancott Estate. The estimated share of New Zealand’s export in various markets is shown in Diagram. Evidently New Zealand’s wine market has prospective future in both global export market, and particularly in Australian off trade. Therefore, Brancott Estate has opportunity to target the export market of Australian off trade, apart from global wine markets.
New Zealand’s wine exports market has taken a new turn in terms of growth and so is the case when it comes to undesirable mix shift to bulk wine, where this drift has paved the way for emerging a lower-priced market segment, for the most part in the UK and Australia, serving up big retailers formerly unmet demands for special brands and private labels from New Zealand. Formerly low cost and low price ruled the export and domestic wine market of New Zealand, but things have changed now and the country’s wine market shifted to a new-fangled business called bulk leading to New Zealand’s market at low cost and low prices. This new strategy is working as in the case of falling price, the export volumes are increasing considerably. A wine company such as Brancott Estate looking for a low cost-low price or cost leadership strategy needs to reduce cost through simplifying logistical requirement , enhancing ecomies of scale and try to concentrate on a segment needs. The growth and survival of New Zealand’s wine industry depends on its export market and so is the case of a company like Brancott Estate. The estimated share of New Zealand’s export in various markets is shown in Diagram. Evidently New Zealand’s wine market has prospective future in both global export market, and particularly in Australian off trade. Therefore, Brancott Estate has opportunity to target the export market of Australian offtrade, apart from global wine markets. Notably Brancott Estate should target solo export market segment as Australian off trade, where the company should attain competitive advantage adopting cost leadership strategy, low cost-low price-high volume export. As price is in all probability the most imperative thought for the common customers and customers with high brand loyalty are enthusiastic to disburse a premium price for their preferential brand, consequently their purchase intent is not simply influenced by price.
Rising next generation consumers is all set to give opportunity for Brancott Estate in luxury wine segment. There are a number of digital marketing tools obtainable for Brancott Estate for low cost and efficient marketing particularly in export segments. Currently the wine market of New Zealand is tremendous and this is the outcome of dramatic growth of the market in terms of wine growers and this is huge opportunity for Brancott Estate to expand and grow in the market. The government in the country is supporting the export of wines to global markets and particularly Australian market ad therefore Brancott Estate should take advantage of this emerging favorable situation. The country-specific advantages have been translated into the strategy formulation process. It would be interesting to explore whether or not companies that have expanded into emerging markets have a two-tier process. The value-chain as one of the most vital strategic choices , where innovation is at the centre of strategic management, and Wells (2009) draws our attention towards the value of innovation as strategic management in contemporary international market. Brancott Estate looking for a low cost-low price or cost leadership strategy needs to reduce cost through simplifying logistical requirement , enhancing economies of scale and try to concentrate on a segment needs. An all round application of digital marketing would be of immense help for the company to reduce cost and offer wines on low price.
Technology has grown to be an imperative machination in settling forward in the competition among organisations. Generally the operation of technology in organizations in undertaken in the course of various phases namely acquiring information , codifying information , disseminating information , and development of information and deploying information. Digital marketing is not just a speedily developing force in the present marketing field, it is said to be the marketing future and it is expected that online medium will soon substitute more conventional forms of marketing. Digital approaches of marketing and communication are quicker, practical, more versatile and uniformed, thus it is not unexpected that when the technology made available. The people started rapidly shifting into the digital era. The best part is that digital marketing provides equal opportunity to both marketers and consumers (TCii, 2011). Brancott Estate is investing in a present generation technologies to establish digital sales channels which are allowing wine consumers to progressively experience comfortable online shopping. It is also learning how to improve strategic planning which represent objectives, strategies and assigns resources with equally committed towards plans of national distribution (Steinthal, 2011).
Cost leadership concept can be a clear choice for several e-business companies. Though low costs do not essentially refer to low prices, lesser price is an important selling method for e-business companies. The concept of cost leadership may be predominantly appealing to internet shopper those are price sensitive. As price is in all probability the most imperative thought for the common customers and customers with high brand loyalty are enthusiastic to disburse a premium price for their preferential brand, consequently their purchase intent is not simply influenced by price (Cadogan and Foster, 2000). More importantly, customers have a well-built faith in the price and value of their preferred brands so much so that they would evaluate and weigh up prices by means of substitute brands (Keller, 2003). Brancott Estate has opportunity to target the export market of Australian off trade, apart from global wine markets. Notably Brancott Estate should target solo export market segment as Australian off trade, where the company should attain competitive advantage adopting cost leadership strategy, low cost-low price-high volume export.
The focal point of running an unbeaten technology for organizations ought to monitoring and controlling the whole operational phases of technology with focusing on core competencies and strategies. Taking advantage of technological revolution Brancott Estate has opportunity put into practice digital marketing strategy building on and adapting the doctrine of long-established marketing, making use of the opportunities and challenges presented by technology and the digital tools and techniques. The digital marketing strategy will say aloud the most gainful way for Brancott Estate to take over a definite phase of time. The proposed digital marketing model of Brancott Estate includes tools in the forms of RSS, SED, SMS, SOAP, webPR. These are basic tools and strategies for the proposed digital marketing of Brancott Estate.
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