Gender is another primary segment as Lee and Low (2007, p.735) report that women in Australia buy 70% of the wine and that is typical also of their major exporting customers in the UK and US. Women may have different tastes for wine and will respond to different packaging than men (Low and Lee, 2007, p.735). Quality and cost further segment wine. These two segments may overlap, though quality is not an absolute indicator of cost. Drinking behavior is another key segment, as the wine that appeals to the occasional drinker may not be marketed in the same way as a wine meant for the market of heavy consumers.
While wine segmentation can be limited to demographics, Bruwer, Li, and Reid (2002, p.221) have reported that it limits the information about the consumer. They state that segmentation should be accomplished by identifying lifestyle and drinking behavior. They contend that this makes the segments, …more actionable from a marketing strategy standpoint (Bruwer, Li, and Reid, 2002, p. 221). They have further broken the segments into shopping styles and desired outcome of drinking behavior (Bruwer, Li, and Reid, 2002, p. 228). While these various segments may have value from a marketing standpoint, they may limit the segment to such a degree that the overall market may be too limited to be of any strategic value.
Small and medium sized wine producers will have difficulty competi…
Small and medium sized wine producers will have difficulty competing with the large producers in the area of price. Small wineries can not produce at the low cost that the larger scale producers can (Lee and Low, 2007, p. 733). However, they are in a position to control other product variables such as branding and quality. By segmenting the market they could cultivate niche markets by offering products that have a specialized appeal. However, it should be noted that niche brands that are only offered as a ‘change of pace’ brand would be in a vulnerable position in a retail market (Jarvis and Goodman, 2005, p. 295). The niche market would have to have brand loyalty to sustain sales. Larger producers may be unable to enter these markets due to their limited base.
If marketing research could show that lowering the price could sell more product, the plan would have to include which component of the mix would be given up to accommodate the lower price. Discount pricing may require less promotion. Bulk sales may improve product placement. Alternatively, pricing could be held at a premium level and sold only through direct sales or exclusive outlets. Since the 4Ps are interactive it becomes a balancing act to determine the correct mix. Other factors, such as brand awareness, product maturity, and customer relationships are additional factors that need to be considered when planning the 4Ps (Kotler, 2003, p.110). Small wineries with scarce resources have the additional difficulty of controlling a product that is at the mercy of the weather and ever changing consumer tastes.
Small producers are in a good position to market their product in unique ways. They could promote their product through the use of more personal