Marketing Assignment: 4Ps Applied to the Wine Industry
Task: Marketing AssignmentTask: In the article supplied below, the author claims that while the 4P’s are applicable to a wide range of industries, given the transition to an experience economy, the 4P’s are more specifically useful when tailored to the wine industry as the 4E’s to allow for the inclusion of customer experience.
Festa, G., Festa, A., Cuomo, M. T., &Metallo, G. (2016). The (r)evolution of wine marketing mix: From the 4Ps to the 4Es. Journal of Business Research, 69(5), 1550-1555. doi:10.1016/j.jbusres.2015.10.015 Your task in this assessment is to select one of the 4P’s (e.g. product OR place OR price OR promotion) and consider with reference to relevant academic journal articles and industry case studies:-
(1) How the ‘P’ you selected has been tailored over time, (figure 1 on page 1551 or the article provides some guidance on where to start your research, you should then research information relevant to the ‘P’ you select)
(2) How the ‘P’ you selected is tailored between industries, (ensure to provide real life examples to support your claims as outlined in your rubric criteria), and
(3) Given the research you have conducted in (1) and (2), how and why you think the ‘P’ you selected may change or may not change as we move towards an experience base economy.
This assessment provides you with an opportunity to diagnose problems, analyze and evaluate situations, and develop strategic marketing decision choices based on the conceptual frameworks learned in this subject. It allows you to connect your academic theoretical skills with your practical business skills; this is a very important attribute for developing your professional career.
Introduction to marketing assignment
Organizations until recently were focusing on 4P's for extending their products and services to their customers. Till a recent period of time, there has been a transfer from 4P's to 4E's. Various industries are adopting 4E's for their customers, but the wine industry in recent times has been developing an interesting dynamic. Countries that were traditionally manufacturing wine have product orientation focusing on the 4P’s however the new world producing wine, in order to extend their products to customers is focusing on market orientation. It is interesting to analyze the transfer of 4P's to 4E's as applicable to the wine industry, epically considering the way in which price component of 4P's has been tailored over time to analyze and meet customer needs by analyzing their behavior. Molding to 4E's has not only provided the new wine manufacture with the opportunity to provide customer experience but also created a new market segment for these manufacturers.
Until a recent period, most wine manufacturers were focusing on the 4P's namely product, price, place, and promotion (Cluster, 2015). In the current discussion for the marketing of wines in the traditional wine industry, it was noticed that various manufacturers had varied types of focus. Price was used by many manufacturers as a factor to market themselves and set themselves apart from rests wine manufacturers in the market. Some of the world-famous wine manufacturers focused on manufacturing premium quality wines, that born the taste of specific regions. The inclusion of different types of pricing strategies acted as the key to their marketing tactics (Festa et al, 2016). For marketing such products, the premium price was charged, which was distributed through wholesalers, retailers, and distributors. For instance, Domain Leroy Musigny Grand Cru, Chateau d’Yquem, Sauternes, Leroy Domained’Auvenay Chevalier-Montrachet Grand Cru, and few more charge highest price in world markets (Huen, 2019). Most of the well-known wine manufacturers around the world charge price supremacy across world markets to demonstrate their quality standards and competitiveness. The core competency of their products and market leadership are depicted by price supremacy. In order to conduct the marketing of their products, amongst the 4P's, the price has always been considered to be one of the primary aspects. The role of pricing strategy by the adoption of price leadership has acted as a key component in the marketing of wine in the traditional wine industry. Miller et al, (2019) identified the firms in the wine market frequently changed their prices in quick succession. While some of these price changes were incommensurate with changes in costs or demands. This article represents oligopolistic price leadership, where wine manufacturers set prices above competitive levels. A successful promotional strategy adopted by wine manufacturers is by establishing pricing leadership (Matei, &Cuza, n.d.). Wine manufacturers put attractive prices for their products at which they can make their products available it to targeted consumers. Njoku, (2012) identified the marketing strategy of Jacob's wine in the UK as consisting of case analysis. This case study analysis reveals the effectiveness with which price technique is used by wine manufacturers. By using a price-friendly strategy as suggested in this case, wine manufacturers extend their products in the market. Jacob wine manufacturer focuses on pricing strategy for marketing in the markets of the UK. As studied in various journals, articles, and case studies, pricing strategy amongst 4Ps has acted as a major component for traditional wine manufacturers. However, with the transition of time, customers focusing more on experience over any other 4P’s. Now consumers are no more attracted to the exclusivity of the products, prices, distribution methods, or promotional strategies as many competitors are undertaking similar strategies (Malindretos et al, 2016). With globalization wines from one region being available in another region of the world, wine manufacturers are now clubbing their product offering with exclusive consumer-oriented services. Currently, new wine manufacturers as well as some traditional wine manufacturers, instead of tailoring their 4Ps for attracting and marketing to customers, are making use of the 4Es formula. 4Es include focusing on expertise, evaluation, education, and experience of customers to market their products. Manufacturers in the wine industry are not anymore focusing on product, pricing, distribution, or promotional strategies instead they focus on recalling the real experience of their customers (Cantino et al, 2019). They try and extend the values and tastes they provide their customers by focusing more on real aspects of the organization and its products. They disregard any non-real aspect that might lead to a gap in perceiving the consumers from what is already projected for the product (Kim et al, 2019).
Manufacturers are thus trying to match and represent their products as close as possible to unique customer experience. For example, tasting Cabernet Sauvignon, a French-origin wine originating from Bordeaux is set to remind customers of the finest grape-fields of the world located at Bordeaux (Huen, 2019). When consumer purchases a bottle of this wine, it is supposed to provide the customer with the unique taste associated with one of the finest red wines in the market. When another manufacturer claims to manufacture wine with the grapes from the same region, then to provide a real experience to customers the same taste and association, the organization needs to undertake all possible efforts to match such experience. New wine manufacturers with their products are reaching out for various awards such as Vivino’s latest 2019 Wine Style Award to highlight the customer experience they provide. Wine manufacturers try and get recommendations from fellow wine drinkers to share their unique experiences with different types of wines. This has led to a significant transformation in the wine industry with the increasing popularity of Chardonnay, Portuguese white wines along with other lesser popular wines such as Pinot Noirs from Tasmania and Patagonia. Vivino’s five-point scale provides a point-based approach to rate wines on varied user criteria. While some reviewers point out that there might be concerns about getting fake reviews as well when rating experience. So, there are a lot of scans that wine data goes through to qualify and receive 50 ratings every year (Huen, 2019). Based on these reviews and consumer experiences, Vivino posts a list of popular wines in the world.
The selected "P" from the 4P's is tailored between industries to match the needs and expectations of consumers. While in one industry, pricing strategy aims at claiming leadership in the market, another pricing strategy might aim at providing consumers with competitive product offerings. For instance, retail products such as detergents often follow price competition strategies in their product offerings. One competitor competes with another to provide the best quality products within a certain price range.
Consumers in this industry often select products that are cost-competitive and offer the lowest prices (Resnick et al, 2016). On the contrary, in the premium watch industry, where Rado is a dominant player, price leadership strategy is used to depict its superiority. Such pricing strategies of products differ solely due to the impact on customer behavior and the difference in customer segments, the products being catered to. Though these industries are also undergoing transformations significantly. However, the most impacted is the wine industry from the emergence of new 4E's. Where consumers are extremely conscious of the product offerings and ways they match their perception of the product. This is the region where manufacturers struggle to keep pace with consumer perception.
Given the research undertaken in the above segment, the 'P' selected is bound to change significantly as we move towards an experience-based economy. As the industry transforms and economies have changed through a four-stage evolution, marketing mixes are bound to change within their impact. From the change of agrarian economy to the industrial economy there was a change in pricing strategies with increasing focus on price manipulation to gain competitive advantages. As the economy transformed from industrial to a service-based economy, there was again an extension of pricing strategies, now with the introduction of the experience economy, the effect of price is expected to diminish as a marketing component to being attached to the value proposition offered by the product. Thus, as the economies progressed there have been significant changes and transformations to the component of price as a factor.
In conclusion, the wine sector has been developing to include interesting market dynamics by transforming the old-world manufacturers along with new world manufacturers.In the traditional wine manufacturing 4P's received tremendous importance for the marketing of products and services to reach out to customers. However, this has significantly transformed as the economy has transformed into an experience-based one. Hence currently various industries are adopting strategies to focus on 4E's for the customers so as to attract them. The wine industry is a classic example that has transformed itself into the new adoption and is currently catering to products as per these 4E's especially focusing on the past consumer experience of the product. Thus, with this new revolution, more industries are expected to transform and adopt 4E's model into their marketing propositions.
Cantino, V., Giacosa, E., &Cortese, D. (2019).A sustainable perspective in wine production for common-good management. British Food Journal.https://doi.org/10.1108/BFJ-06-2018-0351
Cluster, I. W. (2015).Innovation Scope and the Performance of the Firm. Handbook of Research on Global Business Opportunities, 550.https://doi.org/10.1108/BFJ-06-2018-0351
Festa, G., Festa, A., Cuomo, M. T., &Metallo, G. (2016). The (r)evolution of wine marketing mix: From the 4Ps to the 4Es. Journal of Business Research, 69(5), 1550-1555. doi:10.1016/j.jbusres.2015.10.015 Huen, E. (2019). The World’s 30 Best Wines In 2019. Forbes. Retrieved from [https://www.forbes.com/sites/eustaciahuen/2019/03/25/wine-3/#3ac19c250ed0]
Kim, W. H., Cho, J. L., & Kim, K. S. (2019). The relationships of wine promotion, customer satisfaction, and behavioral intention: The moderating roles of customers' gender and age. Marketing assignmentJournal of Hospitality and Tourism Management, 39, 212-218.https://doi.org/10.1016/j.jhtm.2019.03.001
Malindretos, G., Tsiboukas, K., &Argyropoulou-Konstantaki, S. (2016). Sustainable wine supply chain and entrepreneurship: The exploitation of by-products in a waste management process. International Journal of Business Science & Applied Management (IJBSAM), 11(2), 34-46.
Matei, ?., &Cuza, A. I. SUCCESSFUL PROMOTIONAL STRATEGIES IN THE WINE INDUSTRY: THE CASE OF WEB MARKETING. Retrieved from [https://old.upm.ro/cci3/CCI-03/Eco/Eco%2003%2092.pdf] Miller, N. H., Sheu, G., & Weinberg, M. C. (2019). Oligopolistic Price Leadership and Mergers: An Empirical Model of the US Beer Industry. Retrieved from [https://economicdynamics.org/meetpapers/2019/paper_1210.pdf]
Njoku, C. (2012). The Marketing of Jacob's Wine in the UK: A Case Study.Retrieved from [https://www.theseus.fi/bitstream/handle/10024/51407/CHIKA%20NJOKU%20JACKSON.pdf?sequence=1]
Resnick, S. M., Cheng, R., Simpson, M., &Lourenço, F. (2016). Marketing in SMEs: a “4Ps” self-branding model. International Journal of Entrepreneurial Behavior & Research, 22(1), 155-174.https://doi.org/10.1108/IJEBR-07-2014-0139