Friday, December 01, 2006

The Four P's

Product, Place, Price, Promotion

They hammer that one home in Marketing 101. To market effectively you must manage all four (plus a few others they added later on) and create the right combination to match your customers' needs.

So why is wine SO stuck on Price alone?

I know, I know. Many will say that it is all about the product, but in fact the real message about product is so often lost before it gets to the consumer, that it is ineffective. Those in the wine business will tell you stories about the apparently confident consumer asking for Red Chardonnay or what country your Rioja comes from, etc. To those with knowledge, these seems ridiculous. In practice they are often the real example of the level of Product knowledge.

So what about Place (the distribution channel). Well, 80% or so of wine is bought in supermarkets, just like all other products, and this is only going up. There are no strong competitive channels at this point. Independent merchants and online retailers are there, and getting better, but where is the concerted campaign to get consumers to switch?

Finally Promotion. "If only we had [product x]'s budget" is the usual refrain, and I have used it regularly myself. But in truth we lack ideas for this rather than the money.

Look at Magners. They are probably London's biggest marketers for ice. Cider didn't sell, so they switched their four P's around, rethought their product, invested heavily (and I mean heavily) in distribution (place) and promotion. Did anyone ask the price? I doubt it. It took guts, but it paid off.

So when Threshers (40% off), Sainsburys (25% off) and Tesco (a belated match of the 25% off deal), et al start talking about discounts AGAIN, I find it somewhat depressing. It only feeds the obsession and depletes whatever coffers there might have existed with producers, agencies and retailers for investing in talking about anything else.


Jamie Goode said...

Perhaps one of the reasons is that the wine product is too complex an offering for most consumers, and there is no easy route for them to gain the information that would make them able to buy with confidence.

Add to this the fact that the waters are muddied by bad producers and good producers alike allowed to label their product with the same regional locator, which is how European wine is normally sold.

Robert McIntosh said...

Goode point Jamie

It is definitely the role of regional bodies, particularly the Europeans with supposedly strict rules in place, to actually enforce them, otherwise they and the whole 'old world' system will crash down around their ears.

I am not averse to experimentation, but I am opposed to "cashing in", particularly when it affects a whole region.

I am not sure that wine is really too complex a product for people. I am all for enjoying good, well-priced wine, and brands play an important role in this.

What I get depressed about is that it seems that a brand can only be created from a discounting platform as no-one has yet cracked a broad based quality wine message.

I can think of a few good wines (Casillero del Diablo / Cono Sur & Torres to name a few) who use this but don't rely on it like others, but these are depressingly rare.

I think the key to the question is your point about "no easy route" to "gain the information" they need. THAT is what I would like to help to build; some way of making this kind of information easily available.

Time for a Wine Conversation?