Tohu Wines
Introduction
Tohu Wines is an internationally recognized wine producer in New Zealand that craft grapes from the Awatere Valley Vineyard. The winemaker was introduced in 1998 as the world’s first wine company among the Maori people. They produce a wide range of wine varieties most of which are award-winning with premium standards. Guardianship (Kaitiakitanga) is a core value that directs the business and environmental culture. The choice to venture into organic wines was a smart decision introduced in 2019 following longterm research. Tohu’s organic wine is the Sauvignon Blanc 2019 sourced from vineyards within the Awatere Valley. The major target for organic wine should be the local market considering the closure of the international market following the COVID-19 pandemic. Among the resident the customers the product should be targeted towards the traditional family set up, new greens described as the socially and environmentally conscious, and the progressives comprising well-educated members of the society. The marketing strategies should include; advertisements in print media, ads in major websites, offers, and discounts to attract consumers, and participation in community activities aimed at curbing the COVID-19 pandemic such as public awareness. The strategy aligns with the New Zealand culture of communal coexistence and in return, the company benefits from the programs. The main objectives of the marketing should be; popularizing the product among the locals, improve the sales of the organic wine, and devise the probable distribution channels. The organic wine is produced with the use of the local grapes from a known vineyard and the contractors are members of the society. The Tohu organic wine, given the fact that it is produced by the first Maori owned company, attracts the local market. The blending of various fruits to produce an unmatched flavor of the wine is essential in creating a unique brand. Organic wine inputs fewer chemicals in their products hence they are a healthy product for consumption.
Target Market Segments
The prevailing COVID-19 pandemic has limited access to a wider market hence, the company should align its products to fit the local market. The New Zealand population is comprised of culturally sensitive people that believe in communism. The market can be segmented into progressives, new greens, and the traditional family values (Watkins et al., 2015). These are essential elements of the population as they encompass a wide range of society wine consumers. Social events have been disrupted and the only opportunity for wine consumption is in small family groups at home.
- The Progressives
The ‘progressives’ are a large proportion of the New Zealand adult population comprising of approximately one-fifth of the entire population. Their strong belief in community involvement corresponds with the Tohu wines advertisement as they take part in community safeguarding. The wine company is concerned with the environmental impact of farming to maintain soil fertility and produce organic products. To reach this market fully, Tohu wines should be more involved in community activities and the end, attract the ‘Progressives’ into purchasing their wines. They are known to support charity causes to help society through fund rives to support the elderly and the vulnerable. Currently, the Tohu wines run an advert to donate 5% to charity to help cushion cafes and restaurants. This is provided by the purchase of their wines hence the progressives will feel more obliged to purchase their products. They are more involved in the reading of magazines and newspapers hence the need for advertisement in print media. The culturalism can be an added advantage to support organic wine as an environmentally friendly strategy.
- The ‘New Greens’
Organic wine refers to synthetic wine production free from the use of chemicals. They can be of two categories, either wine produced from grapes grown under organic conditions or the brewing of grapes without the use of chemicals. The ‘New Greens’ segment is considered the smallest of the New Zealand population of adults. They have strong opinions necessary in the formulation of strategies and critic societal issues. Therefore, Tohu wines should identify this segment as an essential market target. They are known to comprise of Indian descent people and those with children at home hence they are a responsible segment of adults. They are educationally equipped and up to date on social and political issues. The ‘New Greens’ are attributed to environmental protection and organic wine would be an interest in their daily routine. They are strict in considering corporations that have the aim of protecting the environment hence they are likely to buy from such corporations. This segment is an important lot that when reached by the wine producer they are assured that their product has the right exposure.
- ‘Traditional Family Values’
This is the second largest segment of the New Zealand population and a very important target market for wine. It is majorly comprised of members above sixty-five years of age that are contented and focus on spending time with family. They are fulfilled in life and most likely at the retirement level satisfied with life and characterized more by high levels of personal wellbeing. This is a perfect target for organic wine consumption as they are concerned with the levels of chemicals that they consume and the effect on their health. They are mostly known to host dinner parties which are often complemented by drinks most notably wine. They form a reliable local market as they are against the idea of moving overseas as they are contented with living in New Zealand, hence, at this time when there is no export of products out of New Zealand, they form a critical consumer base. Therefore, the company should focus its marketing on activities that relate to the activities of this segment. The ‘Traditional Family Values’ are known to be financially stable with most out of work hence they wouldn’t mind spending their money on expensive organic wine as they are more prestigious individuals. They actively participate in cultural events and sports creating a spot for advertisement and promotion of a company’s products.
Marketing Objectives
A marketing objective refers to the assignment of aspirational measurable values to a company’s goals to help the team members in understanding their direct role and the impacts it will have on the business (Sirgy, & Lee,1996). Tohu should formulate strategies to help gain more even during the COVID-19 pandemic. This report proposes the following marketing strategies;
The company should improve the brand reputation as this allows the gaining and retention of 90% voice share by the end of the calendar year. The company should target the local market with the ban of international flights to ensure that the prospective customers have a clear knowledge of the quality, they like the products and lastly have trust in the company’s products.
Currently, most people are encouraged to stay at home and/or work from home therefore, their online presence is guaranteed and they can also read magazines. Therefore, Tohu wines should publish at least four articles monthly to increase the brand experience through such media as; ads on major social websites and articles in both print media and online sites.
The company should optimize the brand positioning through the definition of statements and other communication frameworks at the end of every month to help the team at the Tohu wines to better understand the strategic differentiators in the competitive wine market. This can be through the emphasis of the fact that it is an indigenous company that is more inclined towards the Maori culture rather than solely making a profit.
The company should diversify the lead sources and test new lead source generation monthly for the 2020 fiscal year to find ways of generating new demand that can be implemented by 2021. This is by increasing the number of organic wine to two more brands.
The other objective should be the acquisition of the prospects from the existing market through content upgrades by the end of the calendar year such as the increase of the environmentally friendly products to meet the target market that comprises the ‘progressives’, ‘New Greens’, and ‘Traditional Family Values’.
Marketing can also be achieved through the increase of customer advocacy through such programs as ambassador programs yearly. The ‘Traditional Family Values’ segment of the target market often hold social gathering hence they should be part of the program to help refer new customers to Tohu wines hence increase the prospective customers.
The Tohu wines Company should break into new Markets to help salvage part of the revenue collected from the international market. The COVID-19 pandemic calls for their involvement in community initiatives such as the provision of face masks and sensitization of the public on the ways to prevent themselves from infection. This attracts the intended target market as all are inclined towards the role of companies in social responsibility.
Product Strategy
Strategic marketing involves a planning process that flows from a mission and vision statement and progresses on to the selection of target markets (Nadube, & Didia, 2018). The process then leads to the formulation of the marketing mix and positioning objectives for the products or services. Tohu Wines Company should aim at the local market through the segments identified above to maximize profit and popularize its new organic wine. The progressives, the new greens, and the traditional family values are the already identified target market that the company should narrow their focus to achieving their customer base. Financially, the identified market is able and the competitors are present but the Tohu products are unique given the fact that it is an indigenous company. The product life cycle is categorized into four distinct stages, that is, introduction, growth, maturity, and decline as illustrated in the diagram below. The organic wine brand of Tohu Wines Company is at the introduction stage with the sales beginning to pick and rise while the profits are at the negative mark.
Figure 1: Life Cycle of a typical product
Organic wine is an emerging product for Tohu Wines hence the market is also an emerging one. Emerging markets are characterized by the uncertainty of; the customer response and the eventual market size, the processes and technology to dominate, cost behavior whether it will increase or decline, and the structure of competitors (Lambkin & Day, 1989). However, the target market is a demanding lot hence the possibility of perfect product performance as the quality is guaranteed with the local farms as the source of the grapes. The perception of the customer is somewhat positive as the company undertakes several measures to ensure environmental protection. The target market believes in the responsibility of firms to protect the environment hence, they are more likely to purchase organic wine.
Organic wine is produced from either, use of organic processes in the crop production stage or the non-use of chemicals at the industry level (Azabagaoglu, Akyol., & Ozay, 2007: Mann, Ferjani, & Reissig, 2012). The use of organic methods of crop production is more efficient because Tohu Wines have large tracts of land in Marlborough, New Zealand in which they practice organic farming. They are then considered by the target market as environmental conservators as there is minimum or no leach of harmful chemicals into the soil. The customization of the Tohu Company brand to fit the New Zealand cultural structure, most notably, the Maori people is a unique feature. However, the preferences of the customers vary depending on the regional fragmentation hence the company should be considerate in manufacturing variety of flavors. This will ensure they satisfy a wide range of customers and in return gain profit.
Capabilities and resources is a key aspect in the determination of a product strategy. This revolves around the aspect of the company’s ability to produce the product and the availability of resources. With an experience of over 20 years, the Tohu Wines Company has the necessary capability to produce organic wine that can satisfy the local market. The long existence in the market gives the company a wider perspective of the areas they can easily target. The company and contract vineyards give them the resource advantage with an already created brand in New Zealand. Their products have had unique characteristics from the logo designed by a local and their continued proud recognition of the New Zealand culture.
Price and Promotional Strategies.
A price strategy is often employed to increase the sales of a specific company. Product pricing is arrived at through various complex and intense processes that include; research, calculations, risk-taking, and understanding the target market (Wilson, R. M. 2010). Among the considerations before determining the price are; buyers’ ability to pay for the products, market conditions, competitor actions, production cost, and profit. Currently, the COVID-19 pandemic has limited access to markets and the ability of customers to purchase wines because most people have unstable sources of income. Therefore, the organic wine by Tohu Wines Company should be considerate of the aforementioned factors to ensure they achieve the brand positioning. The most efficient pricing strategy considering the factors mentioned is penetration marketing. This revolves around the idea where a company prices its products intending to gain market share. Penetration strategy can be combined with the freemium model to achieve and enter into a new market. Freemium refers to a model where a company offers their products or services for free for a given period to amass enough customers.
The Tohu Wines Company introduction of organic wine should combine the above strategies amid the COVID-19 pandemic. The company should begin with freemium for the first one month to popularize the product through such services as ordering online and delivery is made house to house. This will define the product’s future and popularity among the people. The product will always be remembered as one that offered free wine to the buyers at a time of a global crisis. After, mobilizing consumers, the company should move to apply the penetration strategy that involves low prices. This will continue to attract the customers as they will have tasted the quality of the wine and would be willing to purchase the products. This should be an offer to last for four months while introducing the product to the consumers. The fifth month will have the organic wine popularized across New Zealand and the quality appreciated. Additionally, the company should then apply competitive pricing upon reaching a realistic quotient of the market base. Competitive pricing involves the setting of prices depending on the prices of competitors in the market and for Tohu’s case they should lower their prices. This will attract more customers as they will be getting the same quality or better of organic wine at a slightly lower price.
Distribution Strategy
Distribution is the making available of a product for purchase through dispersion into the market. The key processes are packaging, transportation, delivery of the products fundamentally important for sales. The distribution strategy in the wines industry is largely dependent on; the characteristics of wineries, individual company marketing strategies, and integration processes (Sun, Gómez, Chaddad, & Ross, 2014). Tohu Wine Company has the characteristics of an indigenous company that incorporates the culture of the Maori people. The Corona Virus pandemic has disrupted the international market therefore, the distribution option is but not limited to; supermarkets, online, specialty retail stores, and business to business. With the restriction of movement and congregation, the specialty retail stores and business to business option should be left out. The best solutions are the supermarkets and online markets. The company should offer fair prices to the clients in supermarkets that they can purchase alongside home essentials. The freemium and penetration pricing models should be implemented at the stores gradually within the stipulated time. The working from home strategy adopted by the New Zealand government should be a loophole for advertising through the partnership of Tohu and the teleconferencing software providers to aid in an advertisement through ads. The company should also use social media platforms to popularize their websites to increase prospective customers. With the limited number of people attending social events, the celebration of special occasions such as anniversaries and birthdays are done at home with few members in attendance. Therefore, the company should offer such services as the free door to door delivery to encourage the continued purchase of the wine. The company should also provide free packaging services depending on the customer’s preference hence, attract more customers into purchasing wine as gifts to their loved ones.
Marketing Schedule and Program
TOHU WINERY MARKETING SCHEDULE AND PROGRAM
YEAR:2020
Event
May
June
July
August
September
October
Email Campaigns
#1 – Sensitization
New product advertisement
18th & 25th
#2 – CSR
Organize fund drive towards supporting the country in the fight against Covid-19 pandemic
10th
20th
23rd
#3 – Product Quality
Send content and quality advert to the members
18th & 23rd
4th & 11th
Weekly
Blog Posts
Post #1
Cultural integration in the Tohu organic wine
4th
8th
Post #2
Environmental Conservation measures by the vineyards
20th
22nd
02nd
Video Post
YouTube
Tohu organic farming in vineyards
5th
5th
5th
5th
5th
5th
Social Media Update
New Product launch
18th
4th
20th
Variety of Tohu organic wines
weekly
weekly
Daily
weekly
daily
Figure 2: Marketing Schedule and program
Budget
TOHU MARKETING PLAN BUDGET
Program
Amount ($NZ)
Market Research
25,000
Blog
30,000
YouTube
15,000
Facebook & Twitter
50,000
Recruitment
110,000
Hardware
20,000
Software
35,000
TOTAL
285,000
Figure 3: Budget
Monitoring Processes
Strategic management planning is continuous and dictates that should formulate an evaluation, monitoring, and control plan to ensure proper implementation. Marketing control is essential as it helps in managing the implementation stage of a plan.
Tohu Winery should employ tracking tools for the strategies to function perfectly. Online advertisements can be managed through website analytics most preferably Google analytics. Discounts are an important component of the penetrating pricing hence they should also be monitored using the coupon codes differentiated for each publication.
Every marketing effort made should be built with an appropriate monitoring system at the beginning. The monitoring tools for such events as campaigns should be listed before the kick-off of the program. The sales should be monitored through imputing a tracking code into the specific website HTML code to determine the progress of the marketing plan.
Sales response is an essential factor in gauging the performance of a product in the market. Therefore, the response should be tracked before and after the marketing campaign launch. The main aim of marketing is to increase sales hence, the performance of the marketing plan is often measured depending on the sales. Such strategies as the request of staff for specific information or customer feedback helps in tracking such inquiring from the customers’ hoe they came across the company’s products.
Communication with Customers is also an essential component of monitoring a marketing plan’s progress. Surveys and questionnaires are important in monitoring marketing efforts quantitatively. This is often through the interaction with the target audience, in Tohu’s case, the ‘progressives’, ‘new greeners’, and ‘traditional family values. The surveys can be sent through simple emails to customers on social media platforms with questions requesting specific information, such as the new product, that is, organic wine and the taste preferences of the customers.
Conclusion
In conclusion, the organic wine product of Tohu Wine Company is a viable project that as illustrated in the discussion above. The cultural aspect is well taken care of by the fact that it is an indigenous company based on the culture of the Maori people. For proper planning this paper has segmented the target market into three segments namely; the ‘progressives’, ‘New Greens’, and ‘Traditional family values’. These are the dominant members of the New Zealand population with the right financial ability and the intent to buy Tohu’s products. The three are concerned with the social contribution of a company and the environmental conservation strategies. The marketing objectives are the essential guidelines to determine the main purpose of the project to be implemented, for this case, the Tohu organic wine. Brand positioning is an essential aspect that is largely dependent on pricing and promotional strategies. The penetration and freemium are basic pricing strategies discussed in the paper and their contribution to the market success of the business. Distribution is also a strategy to be considered as it is the channel between the producer and the consumers. The most essential components of distribution strategy are packaging, transportation, and delivery. The efficient delivery ensures that the demand is met and the products can easily be accessed by the consumers. Supermarkets and online are the best distribution option considering the market disruption brought about by the COVID-19 pandemic. The program, schedule, and budget have been illustrated in the respective figure and the rough estimate amounts provided. Finally, the paper discusses the monitoring processes of the implemented techniques and the possible tools that can be adopted to ensure the success of the marketing plan. Sales have been identified as the measurement of a marketing plan because it is always intended to increase sales of a company.