Report on Penfolds (Book Report Sample)

BUSINESS REPORT ON PENFOLDS

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Table of Contents
Introduction 3
Evaluation of existing marketing mix 3
Product Category and Characteristics 3
Penfolds Brand Shares and leading competitors 3
Determine the existing marketing mix 3
Elements of the mix for Penfolds 3
Product 3
Price 4
Promotion 4
Place 4
Synergy of the mix to the brand 4
Environmental factors that impact on Penfolds 5
Determine the mix for the new segment 5
New Target Market for Penfolds 5
Overall positioning and Consumer Proposal 5
New Target Market marketing Mix 5
Product 6
Price 6
Promotion 6
Place 6
Review of the Annual Report 6
Monitor and Adjust the Marketing Mix 7
References 8
Introduction
Wine selling in Australia is a common business with most of the enterprises concentrating on the local and international market. Penfolds is an old Australian wine brand that started in the mid-19th century by a medical doctor and an English emigrant (Penfolds, 2014). The brand name originated from the medical doctor Rawson Penfold, who viewed wine in its medicinal value. The business started wine growing for the purpose of medicine, blossoming into a fortified wine and brandies company by 1920. By this time, Penfolds had 50 per cent of the Australian market share. Penfolds strategy changed after the World War II by introducing the production of red table wine and white by 1990. Southcorp took acquired the company making it the largest Australian wine producer and the fifth globally. Penfold markets its brand through the Southcorp Company that acquired it in 1990. The marketing regime of the company included setting up international markets for future distributions. The main success in sales of the Southcorp’s flagship is in the sale of its brand Penfolds Grange, which acquired the title, “best wine of the year in 1995” (Penfolds, 2014). This report analyses the current situation of Penfold, marketing and competition strategy.
Evaluate the existing marketing mix
Product category and characteristics
Penfold falls under the product category of wines. The market size of the wine industry is saturated with the number of emerging companies under the product categories increasing. It is vital to have an understanding of the marketing strategies necessary for maintaining the strengths of a wine company in the saturated environment. Australia’s market volume of wine continues to rise with most of the companies venturing into the export market. Overall studies indicate that the export of wine decreased. With these studies, the Australian market increased its exports by 1% per liter to 3% (Penfolds, 2014). This means that Penfold runs in a competitive environment where the growth and value of wine increases significantly. Exports in the Australian wine industry reduced by 6% with values of $ 1.80 billion, which means that the market volume of wine is flexible, but run continuously (Penfolds, 2014).
Penfolds Brand Shares and leading Competitors
Australia has a completive wine industry due to the opportunities available in the market. There is demand of wine in Australian hence organization strive to be the leading distributor. With Penfold enjoying 50 % of the brand share, it has challenges in ensuring that it maintains its competitiveness. The competition does not only originate locally, but also for the international market. The Australian wine industry has over 200 companies that deal with the production and sale of wine. The biggest companies in Australia include Southcorp, Hardy, Orlando, BRL and Beringer Blass. There are other competitors, but they take a small percentage of the market share (Ashkanasy, 2013).
Determine the existing marketing mix
Elements of the mix for Penfold
Product
Marketing product mix refers to product lines produced by an organization (). This element is important in the marketing mix as it helps the organizations gain consumer loyalty and increases consumer spending. Penfold produces different wine products, which gives them a competitive edge over their rivals. Product range is of value in the element mix. Penfold uses designs and variation to attract to different market segments. For instance, Penfolds produces table wine to fulfill the needs of home consumers. It also has other brands that can be served in restaurants. Product design and packaging is used in capturing new customers using unique packaging material (Christofer Pihl, 2014). Packaging red wine with red colors gives the assumption to the client. White wine has a clear packaging to make it easier for the customer to see the product. Penfold uses this concept to compete with the famous Italian industry. Branding is also important for Penfolds. It spends a lot to ensure their brand goes beyond a simple description (Penfolds, 2014).
Price
Price refers to the exchange measure of product. Penfolds understands the effectiveness of using unique pricing strategies. Penfolds witnesses success by meeting the customer’s needs during the marketing process. Wine companies that depend on the views of the organization find it difficult to attract consumers. Penfolds uses various strategies in pricing to compete effectively in the wine industry (Francis, 2002). The choice applied by the company depends on the marketed product, current competition, consumer price, and costs of production. Penfolds applies the market-led pricing strategy for competitive purposes. It analyses the competitor’s price, then charges slightly lower to attract more buyers. The strategy applies in the competitive wine industry in Australia. Penfold also applied the cost-based pricing, which includes an analysis on the cost of production plus profit. The organization applies this strategy when it knows the total amount of wine it plans to product (Penfolds, 2014).
Promotion
This marketing mix component refers to the advertising of products to consumers. Penfolds promotes its products in various forms, but the use of social media sites would increase product awareness to the consumer. Penfolds adopts the use of distribution channels to meet the demands of consumers. Through direct interaction with the consumer, they get feedback on the quality of their products (Kornkaew, 2012). Penfolds also applies publicity in the promotion of their products. An example is the Red Campaign that aims at promoting their wine. The organization commonly uses sales promotion to gain popularity. Consumers who purchased Yattarna and Grange once received wine valued at 2500 sterling pounds in one of their sales promotions (Penfolds, 2014).
Place
This refers to the location organizations choose for consumers to access their products. It involves convenience for both the organization and customer (Nguyen, 2007). Penfolds applies two distribution strategies. It supplies wine to the final consumer without using distributors. Direct distribution is beneficial to them as it gives the organization control of the product. This is only applies to customers, who live around the branch. The organization adversely uses direct distribution to reach most of their customers. By using intermediaries, they are able to dispatch products in large quantities (Penfolds, 2014).
Synergy of the mix to the brand
Penfolds marketing mix elements are linked with strategies that elevate their importance. In marketing mix, all the elements are important in generating consumer interest. They support each other in creating awareness and selling a product. Promotion makes the consumer aware on the existence of a product. Consumers go to the place of distribution to look for the product. The product branding of Penfold links well with the price. Consumers are attracted to a product through the packaging. The price then tells them the cost they must forgo to get the product. This link is necessary to successfully attract a target market (Penfolds, 2014).
Environmental Factors that impact on Penfold
The environmental factors that can affect the marketing of Penfold are viewed in two perspectives: internal and external. Internal environment actors are those that arise from within the organization (Thomas, 2008). Changes that involve marketing of the product have to consider the consent of the top management in the organizational structure. It also includes other departments such as purchasing, research, finance, and manufacturing. Getting consent from these parties is time consuming and may delay the launch of a product. The external environment occurs outside the organization. They have two sections namely the macro and microenvironment. Micro-environmental factors limit the capacity of the organization to produce and distribute. Factors such as suppliers, market intermediaries, customers, resellers, and competitors influence the marketing of Penfold. Macro-environmental factors are uncontrollable and leave the organization with minimal options. Penfold marketing strategies can be hinders by such factors, which include technological hitches, demographic changes, social and cultural forces, and legal and political forces (Penfolds, 2014).
Determine the mix for the new segment
New Target Market for Penfolds
Penfolds new target market should non-alcoholic drinkers in Switzerland. Penfolds is known for its alcoholic brands. It is important for the organization to target new markets of the non-alcoholic individuals. The choice of non-alcoholic drinks is on the rise will health-conscious individuals preferring the non-alcoholic wine. While targeting the new market, it is important for the organization to convince their target market that their products have no alcohol. Progressively, people are turning to soft drinks, water, and energy drinks. Penfolds should ensure they increase their m...