Marketing mix - Promotion.doc

Marketing strategyWe classify the wine into 3 groups, Base wines, elegant wines, Location wines Well adopt different marketing strategy to the 2 groups respectively, using 4P model (Product, price, place, promotion).1, Product: Base wines are fruity and straightforward. Perfect for casual everyday enjoyment Elegant wines: Moderate income, intensive hand labor, strict hand-picking and uncompromising gentle processing feature the grapes from our estate wines. These fruity, full-bodied and elegant wines are ideal as accompaniment to food. Location wines are made exclusively from selected vineyards. Extremely low yields, utmost care in handpicking and a differentiated expansion reconcile individual, diverse and high-quality wines produced for the special occasion.2, Price:Base wines: using a combination of Promotional Pricing and cost-plus pricingPromotional pricing aims to promote product, increase the sales. Such as Buy One Get One Free), money off vouchers and discounts. Cost-plus pricing is the simplest pricing method. The firm calculates the cost of producing the product and adds on a percentage (profit) to that price to give the selling price. This method although simple has two flaws; it takes no account of demand and there is no way of determining if potential customers will purchase the product at the calculated price.Elegant wines: adopt a combination of High-low pricing and Psychological Pricing.High-low pricing: Method of pricing for an organization where the goods or services offered by the organization are regularly priced higher than competitors, but through promotions, advertisements, and or coupons, lower prices are offered on key items. The lower promotional prices are designed to bring customers to the organization where the customer is offered the promotional product as well as the regular higher priced productsPsychological Pricing: we want the consumer to respond on an emotional, rather than rational basis. Take Pinot quality dry as example, we price it RMB 49 instead of RMB 50. Its strange how consumers use price as an indicator of all sorts of factors, especially when they are face an unfamiliar market and alien brand. Consumers might practice a decision avoidance approach when buying products in an unfamiliar setting, an example being when buying ice cream. What would you like, an ice cream at $0.75, $1.25 or $2.00? The choice is yours. Maybe youre entering an entirely new market. Lets say that youre buying a lawnmower for the first time and know nothing about garden equipment. Would you automatically by the cheapest? Would you buy the most expensive? Or, would you go for a lawnmower somewhere in the middle? Price therefore may be an indication of quality or benefits in unfamiliar markets.Location wines: Value Pricing.the pricing objective of Location wines is quality leadership and taste because Location wine represents good quality of grape used for wine manufacture, experienced, professional and high technology in the manufacturing process. Also, price will lead to different level of demand and therefore have a different impact on our marketing objectives because in the normal case, demand and price are inversely related. Therefore, we will use the most elementary pricing method that is the markup pricing method, which is adding a standard markup to the products cost including the all the related costs such as product cost, transportation cost, tax and tariff cost, warehousing cost, marketing cost and so on.Product price list (Terry and Richard: 能不能帮我在这个地方加一个产品价目表，结合cost analysis和gross margin rate)3, Place & PromotionSupermarketBig supermarkets are the main wholesalers for distributing the red wine. Big supermarkets in 1st and 2nd tier cities include RT Mart, Carrefour, Wal-Mart, Tesco and Metro, Lotus. The 2nd tier cities such as Nanjing, Ningbo, Xiamen also has other big supermarket like Suguo, Hualian and so on. Weingut Becker GmbH will sign contract with target supermarket to sell our red wine. we should ensure the gross margin of 50%.The wholesale markup price of red wine for supermarket will be because we want the Villa Maria red wine to be sold at $25 per liter in supermarket so that we can reach the gross margin of 50%. As a big scale of operation, supermarkets will not pay extra attention to particular product, so we should take appropriate promotion channels. Firstly, China supermarkets will hold Red wine promotion seasons twice each year in Spring and Autumn respectively. Its good marketing channel for Weingut Becker. we should cooperate with the supermarket, by means of Buy one Get One Free), money off vouchers and discounts, well promote consumption, increase popularity and sales. Secondly, we can attract and capture customers by offering free sample in the supermarket. Its important to select and train professional salesgirl, who are capable of identifying, guiding and attracting the target customers. Successful free sample promotion is also a branding activity, to promote both the product and company culture. Thirdly, seize the cooperation with credit card. In china, such activity is very popular, consumers using credit card can get kinds of preferential, such as 80% discount can be granted if use certain credit card to buy some products within certain period, double credit card points can be got for purchasing certain product or service. These customers group are our target customers, we should consider and make use of this marketing channel.E-commerce:The past 10 years witness a dramatic growth of E-commerce, we should take advantage of this channel, including 360 buy, Yihaodian and Amazon. Such electric dealers take promotion inclusive of Membership preferential, group purchasing preferential and Holiday promotion. The majority of customers are white collar, Middle class and young people who are accustomed to online shopping and open to new. They are also target customers of Red wine. However, E-commerce is two-edged sword, there is risk of margin shrinking and brand depreciation result from the price war and excessive discount. We should try to master and control E-commerce channel, make balance between profit and branding enhancing.Advertising and promotion Considering the factors of cost, coverage and easy to reach target customers, Weingut Becker GmbH red wine will be advertised in magazines and the local hot websites. More important, the internet advertising will allow more detailed information and vivid photographs about the Weingut Becker GmbH manufacturing plants, grape farms, and product quality control and so on. Sales promotionsThe purpose of sales promotion in the China market is to stimulate the sales of Weingut Becker GmbH red wine and to increase the awareness of Weingut Becker brand in the red wine industry of China. For the first y