ANALYSIS ON

COONAWARRA WINES

Assignment 1
Date- 31/03/2015
Submitted by Rakesh Jha
PGDM- Semester 4
CLASS MARKETING 1
Submitted To - Prof. Jayanta Sengupta
Integrated Marketing Communications

IMC STRATEGY
IMC refers to the process of integrating and coordinating various
communication elements known as Promotional Mix. The promotional mix
consists of sales, advertising, sale promotion, personal selling, and public
relations. This in fact particularly the case for Coonawarra Wine, where strong
marketing communications is required to achieve strong brand identity is of the
utmost importance. Coonwarra maintains its strong reputation as a leading wine
region through its strong presence in the Australian domestic market.
To achieve this, an intense information gathering process was adopted that first
involved a preliminary secondary information-gathering phase during which the
various elements/aspects involved in the IMC process were identified and their
relevance linked to the wine regions real-life situation.
There are basically two model:1. The Integration Model (planning group level)
Internal- planned messages, strategic plan, mission statement, policies
where it has to be asked how the internal will be carried and further to
the next process.
Intra-regional- product and service messages where the action takes
places.
Communications- unplanned messages where basically, messages are
not arranged or driven in cordially manner but to make confirmation
and proceed to level 1 process. Its a cycle process.

2. The Integration Model (regional level)

External- asking for communications through media, promotions.

 Regional- interactions specially deals with door-to-door, retail outlets

etc.
Communications- requires word of mouth factor, being its the
external factor, so that the taste of wine can be classified only through
word of mouth.

PEAK PLANNING GROUP

The planning groups task is threefold: 1. It must diagnose the regions strengths
and weakness. 2. It must develop a vision that is shared by all, and 3. The
Planning Group must develop a long-term plan of integrated marketing action.
The beginning of Coonawarra Wine, was probably based on common interest at
a production level rather than marketing level; its only recently that marketing
has become a science so to speak. Coonawarra wines, probably regarded as a bit
of hocus-pocus by some of the producers and some were a little nervous about
marketing level where everyone felt comfortable. Now people are starting at a
marketing level and working conundrum for a small producer who knows a lot
about making wine but not as much about selling it.

REGIONAL STRATEGIC PLAN

According to the wine industry officer, the marketing plan has two major goalsto increase visitation and visitor yield and to increase sales. The bulk of the
associations investment and expenditure is in the area of hospitality and public
relations with activities such running the wine events and hosting of key wine
press and industry representatives. The region makes little use of paid
advertising. Such advertising that is commissioned centres largely around the
various formal scheduled events.

CUSTOMER/STAKEHOLDER FOCUS
Stakeholders would therefore include everyone from the person who prunes the
vineyard right through to the vineyard or winery owner. The concept can be
further widened to include members of the local community, the Penola and
District Business and Tourism Association (PADBATA), the local council and
so on. Being a small community, many informal links naturally develop when
people regularly cross paths.
The challenge arises for the regional tourism organisation, like any other
regional tourism organisation, in being able to cater for the different stakeholder
within the group. The target market is different to that of the regional tourism
organisational target market and as such the messages and the images are not
always as compatible as we would like them to be.
Bruce Redman said, the wine region is geographically not a neat fit with their
tourism region as perhaps it is in some other areas such as the Barossa. Within
their tourism region there are at least five other regions such as keen as there
were to see their particular region and their regional brand recognised,
differentiated, supportive and promoted. As such they are constantly working at
having not only the theme of food and wine supported within their region, but
also their regional brand (Coonawarra) recognised and supported by both in
their regional tourism organisation and the South Australian Tourism
Commission. This work needs to be ongoing and at the end of the day they have
to strategic in setting up the priorities, fostering relationships, supporting and
initiative activities that meets the vision and the goals of the organisation.

MISSION AND VISION

Recognized as the best red wine district in the world
To promote Coonawarra as the premium red wine district in the world,
locally, nationally or internationally, through united accessible forum
that is constant and consistent.
The potential for conflict in terms of strategic direction would seem
quite high.
Members have got different commercial objectives, some may have
had to make a small compromise in the way things are done.

STRATEGIC CONSISTENCY OF REGIONAL BRANDS

The regional level, the concept of Internal Marketing is heavily applied which
is directed towards the wineries and their stuff plus all the major actor
stakeholders within the region, such as the tourists association, travel agencies,
the hospitality and the retail industries. According to the wine industry officer,
most brand messages related to Coonawarra originate from CVA, although other
organisations also produced promotional material. The wine industry officer
was consequently asked the question as to what the CVA is doing to foster
communication amongst those engaged in image-building activities. For
communications with other tourism operators and our surrounding Visitor
Information Centres we produce and distribute a quarterly news bulletin. The
bulletin is one-page sheet with information about coming events, achievements
or any new collars-doors, new restaurants-thing that have a tourism related
news value. The website also promote fairly heavily within the region and also
in their external promotional collateral and marketing activities. The use of the
website increase dramatically and now regard it as one of the key
communication channels. It is very effective and efficient communication tools
and relatively easy for a small office to manage. On a more level, the website is
printed on a Cooonawarra bottle bags which are produced by the Association

and distributed through cellar doors as well as the inclusion of the web address
on items such as signage at the Mt Gambier Airport and Coonawarra Cup
merchandise etc.. Having a bi-monthly cellar doors staff get-togethers which
have an educational component increases the invitation to local hoteliers,
restaurateurs, and tourism operator to come along to build relationships with the
vignerons and their staff and to learn a bit more about wine. In understanding a
number of wine tourism research initiatives we have been able to provide not
only our members but also our tourism partners and the general community with
an invaluable insight into visitation and drivers.

SWOT ANALYSIS
StrengthsQuality extends across a broad spectrum of wine varieties,
styles and price points, which is a very good thing
WeaknessThe domestic market for wine is very substantial, but it is still
dominated by low-price basic wines another weakness.
Water is also an issue here as it is in many wine regions.
Threats There are a number of very serious economic threats that cloud
the short term outlook.
Production costs are rising rapidly labor, grapes and other
inputs are increasingly expensive.
Land prices for new vineyard projects seem to be growing
exponentially.
Revenues are not increasing at the same rate, with the result that
margins are being squeezed.

 It is not clear how long the current combination of rising costs

and falling revenues (or soft revenue growth) can be sustained.
Opportunities-

New wines and new markets. By new wines mean a movement

to expand Brand both into the higher reaches of the wine wall

and into other varietals.

Not cheap bulk wines
Not overpriced prestige labels like those of wines from other

countries
The new market with the greatest potential for Australia wines
may be Australia itself.

Bottom Line Analysis

The long run opportunities are important, but it seems that the short term threats
are on everyones mind right now, in particular, the inflation-exchange rate
squeeze. If inflation continues at high rates, some producers will be squeezed
out of the market. Perhaps they can sell to other countries or on the domestic
market, but the prospects are not good if everyone tries to shift focus at once.

What is keeping the exchange rate stuck at an over-valued level? Politics and
fear, I suppose. Theres a presidential election in the fall and everything here has
taken on a political significance, so it is no wonder that holding the line on the
exchange rate (and denying that an inflation problem exists) would be political,
too.

OPPORTUNITIES AND CHALLENGES

One of the challenges facing an organisations with limited resources is how to
effectively fund its various strategic efforts. The development of the Limestone
Coast Zone has presented Coonawarra with both strategic opportunities and
challenges. The wine industry officer was asked to comment on the Limestone
Coast Wine industry council and how this organisation figures in the plans of
CoonawarraVigerons Associations. Its an area that equate to about 10% of the
population of the wine industry, so its a very large in production terms.
Another challenges relates to the development and nurturing of a strong regionoriented culture. For the integrated marketing efforts to be truly effective, all
those working within the region should come to the realisation that the welfare
of the region as a whole is just as important as the promotion of their individual
interests. With the strong regional culture, the regions wineries and other
stakeholders have the advantage of communicating with the wine consumer and
the visitor with one voice.
The wine industry officer summed up the opportunities and challenges facing
the Coonawarra wine region this way: Product development and strategic marketing are the keys to our
regions future success.
Various guests speakers and workshops helped in developing
appropriate tourism products and services for visitors

 The cellar door study has provided with invaluable information as to

who is visiting and why. It cannot be ignore this information and both
individual business as well as collectively need to use this information
strategically to develop and promote the point of difference.
Wine tourism is a tough market, there are not only new wines label
being launched everyday but also new cellar doors opening, new wine
regions evolving and ever increasing array of holiday and short break
options and increasing competition for the disposal dollar.

COMPARISON WITH SULA WINES.

In 1993, Stanford-trained engineer Rajeev Samant left his job at Oracle in
Silicon Valley to follow his entrepreneurial spirit to do something on my own.
He wasnt quite sure what hed be doing when he came home to India. One day
his father showed him their 30-acre family farm in the hill station of Nashik,
180 kilometres from Mumbai which he had wanted to sell. Samant started
growing mangoes on the site but soon realised that traditional agriculture in the
region was not profitable. He noticed that a lot of table grapes were being
grown in the area but no one was making wine.
In 1996 and 1997, with the help of Californian winemaker Kerry Damskey,
Samant grew five acres of grape varieties never planted in India before:
Sauvignon Blanc and Chenin Blanc, under the brand Sula Vineyards. They
used New World techniques because India didnt have a tradition of winemaking. In 1998, money was raised to build thewinery.

Pioneering Work
In 1999, the modest Sula Vineyards with its iconic sunburst had its first crush,
and in 2000, sold its first bottle of wine.

Wine Spectator, a leading wine magazine, did a five-page feature on Sula in

November 2002, a proud first for an Indian winery, says Samant.
His Californian philosophy of allowing one and all to visit the winery was
unheard of in India where a handful of wine growers kept the secret of wine
making close to their chests.
After Sulas success and having seen the process of making wine for
themselves, farmers thought this cant be that difficult and decided they could
also make wines, Samant recalls. Soon many in the neighbouring farms people who have never tasted wine before - jumped on the bandwagon and
started their own wineries. That regretfully resulted in wines that were not of
very good quality.
Undeterred, Samant continued to experiment with new varietals. Ten years on,
Sula Vineyards has expanded to 1800 acres and produces three million litres,
which

constitutes

some

75

per

cent

of

Indias

wine.

In the process, Sula has placed itself firmly as Indias leading premium brand by
concentrating on quality. The wines are exported all over the world and feature
on the wine lists of some of the worlds finest restaurants, says Samant. Today
Sula Wines is Indias number one in terms of consumer perception and sale.

Challenges
It took more than two years to obtain the necessary licence to make wine. We
were the first company to apply for a licence in our state in 15 years, he says.
We decided to change tack with the powers that be: dont think of this initiative
as alcohol production, think of it as a benefit to grape growers, increasing rural
employment. And that struck a chord with the government.

Banks were not willing to lend as there was no track record. So Samant
borrowed from friends and family. My fathers bank eventually made me a
loan, solely on the basis of his 35-year custom with them, he says.
Another challenge was marketing. Not only were Indian wines not heard of,
they were more expensive than some French wines sold in India.

Growing the Market

The biggest challenge is to grow the market. In India, annual wine consumption
is 10 millilitres per capita compared to Chinas 400ml. Id like to see
consumption in India grow from 10ml to 100ml per capita, Samant says. To
achieve this, we go out to rural areas and do tastings and education on wine.
Alcohol consumption is a state issue, not a federal issue. Karnataka, another
wine producing region, imposes huge state duties on Maharashtras wine, and
vice versa.
We need to get these people to talk to bring down the duties and have free
trade zones for wine within India, Samant says.
The other challenge would be getting the rest of the world to find Sula Wines
acceptable.

Broad-Based Clientele
When Sula started operations, they sold their wines in the four main cities of
India. Their customers were the wealthy Indians, tourists and expats, recalls
Samant.
Today the clientele is more broad based and the consumption has moved out to
the upper middle class in Tier-2 cities, such as the state capitals, and tourism

areas

in

Maharashtra

and

even

the

rural

areas.

Sula Vineyard trees - INSEAD Knowledge

Currently we have one per cent of the population drinking wine. What I would
like to see is five per cent over the next ten years; that would be huge in
absolute terms. Imagine the amount of grapes we have to plant -- triple shifts
and increased acreage, says Samant. We do not focus on exports because we
dont need to; there is a huge market here we can tap.
Sula became profitable from the second year. Because of the fast-growing
market, it has been reinvesting its profits every year. Revenue was $12 million
in 2008 with profits of one million dollars.

Riding out the economic downturn

India is one of the fastest-growing wine markets in the world, with growth of
more than 25 per cent a year over the last four years. That was probably not
sustainable and so with the economic meltdown last September, there has been a
fall in wine consumption, says Samant. Hotel stock levels have fallen by 50
per cent and inventory levels are at a record low.

But things are beginning to look up and Sula Vineyards hope to achieve doubledigit growth this month after 12 bad months.
In the meantime, Sula has been gaining market share even as the wine market
in India has been declining. It currently has 35 per cent of the market - which is
a lot for wine, Samant says. Thats definitely going to help us a lot when the
market picks up.

SWOT ANALYSIS
StrengthFastest growing market in wine industry (30% p.a growth rate)
Good climate for grape growing
Women/youth see health and sophistication in wine
WeaknessDrinking age (42% of population) is 25yrs of age
Poor awareness of wine and infrastructure
Wine
has
an
elite

taste

OpportunitiesLarge domestic markets with increasing disposable incomes

Increased tourism
Population changing lifestyle accepting new trends
Export
potential
to
the
rest
of
the
world
ThreatsReligion replicates it as a sin
Whiskey is preferred alcoholic beverages
Advertising is banned for alcohol

Brand Building
Sula had positioned itself as an indigenous wine made to international standards
with international techniques and know how. A number of consumables are
procured overseas and also adopted to the sub-tropical Indian conditions.
Sula celebrated the harvest season of 2005, by opening a 1 st wine tasting room
in India in its Nashik winery atop hill giving 180degree views. The winery and
vineyards are open to public for educational tours also there beyond, a 23
room resort.

Marketing Mix for Sula Wines

The marketing mix of Sula wines which includes the 4Ps of Sula wines. Sula
wines are one of the most widely distributed and most loved wines of Indian
origin.

Product and Pricing of Sula Wines Sula Wines has 5 basic types of wines.
Each of them has been mentioned here along with the pricing which i could
find. Pricing of Sula wines is general pricing and appears more of penetration
rather than premium pricing. Here are the products and pricing of SULA wines
Red Wines
sula

cabernet

shiraz

395

madera red 250

White Wines
sula

sauvignon

sulachenin

blanc*540
blanc*395

madera

white

205

viognier**
dia

white

riesling
samara white
Rose Wines
sula

blush

zinfandel-450

madera ros-205
Sparkling
sula

Wines
brut*

550

seco
Dessert
late harvest chenin blanc
PLACE

Five Star Hotels

Wine shops

High end Restaurants

PROMOTIONS

Wines

Use of the mass media to promote alcoholic beverages is not permitted,

but in-shop advertising or on-premise promotions are allowed in all states
except Delhi.

Organizing Sula fest

Organizing a launch of a new brand

Complementary glass of wine in restaurants and bars

Sula Harvest

Internet marketing