Volume vs' Value

1
Volume vs. Value

• StrategistsGorana SmailagicAmun BashirSheshi
  Xie

2
Agenda

• Current Position
• Financial Overview
• Proposed Strategy
• Marketing
• Competition
• Risks and Contingencies

3
Current Market Situation
Quality Segment vs. Price
Current Position Finances Strategy
Marketing Competition Risks
4
Current Market Situation

• Wine market is shifting from old-world wine to
  new-world wine
• New world wine exports is expected growth at
  18.3 per year
• Increasing consumption per capita consumption in
  UK and US
• Level of consumption of wine below 5 is on the
  decline

Current Position Finances Strategy
Marketing Competition Risks
5
SWOT Analysis
Current Position Finances Strategy
Marketing Competition Risks
6
Proposal
Export to UK and US Offer two types of
products Mid-Low End MontGras
Reserva High End DeGras
Current Position Finances Strategy
Marketing Competition Risks
7
Overall Target Sales
Current Position Finances Strategy
Marketing Competition Risks
8
UK Market Solutions
Partner up with Resaurants and Specialty Stores
to sell DeGras at 50
Partner up with Tesbury supermarket to sell
MontGras at 14.99
Current Position Finances Strategy
Marketing Competition Risks
9
Profit from UK Sales
Current Position Finances Strategy
Marketing Competition Risks
10
US Market Solutions
Partner up with World Wine Importers to sell
MontGras at (price)
Partner up with Cabo Imports to sell DeGras at
(price)
Current Position Finances Strategy
Marketing Competition Risks
11
Profit from US Sales
Current Position Finances Strategy
Marketing Competition Risks
12
5 year export strategy in US and UK
VS.
High end sales
Low end sales
OR
Form joint venture to penetrate US market- yes
Margin strategy highe end vs. volume low
end RISK- cultural. Losing distributor.
Choice of distributors- low end cabo- use their
names and high end keep name world wine
Wines of Chile campaign vs. solo marketing effort
Choice of distributors- low end cabo- use their
names and high end keep name world wine
Importers
Distributors
OR
Solo marketing effort
Wine for Chile Campaign
VS.
Margin strategy
Volume
Current Position Finances Strategy
Marketing Competition Risks
13
Penetrating the US market
Low End MontGras Basic Wine Low prices, High
volume sales
High end distributor World Wine Importers
Low end distributor Cabo Imports
PENETRATION
High end DeGras Luxury Wine Luxury bundles,
Margin strategy
Current Position Finances Strategy
Marketing Competition Risks
14
Penetrating the UK market
Low End MontGras Basic Wine Low prices, High
volume sales
High end distributor Harrods, specialty stores,
gift shops
Low end distributor Tesbury
PENETRATION
High end DeGras Luxury Wine Luxury bundles,
Margin strategy
Current Position Finances Strategy
Marketing Competition Risks
15
Margin Strategy vs. Volume

• Margin Strategy
• Will be used for high-end DeGras
• Want to keep supply lower
• Volume
• Will be used for low-end MontGras
• Can increase volume through promotion, especially
  in UK supermarkets.

Current Position Finances Strategy
Marketing Competition Risks
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High-end vs. Low-end
Low-end MontGras Reserva High-end DeGras Both
wines will be sold in UK and US market There is
demand. Marketing efforts will differentiate our
quality.
Current Position Finances Strategy
Marketing Competition Risks
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Marketing Dollars Focused on US and UK
Current Position Finances Strategy
Marketing Competition Risks
18
Wines for Chile is NOT an option

• Wines for Chile
• Costs 18 million ? too expensive
• Cases sold is unknown
• Solo marketing effort
• We can predict our sales and revenue

Current Position Finances Strategy
Marketing Competition Risks
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4 Ps for US Wines
Current Position Finances Strategy
Marketing Competition Risks
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4 Ps for UK Wines
Current Position Finances Strategy
Marketing Competition Risks
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Wines with Incentives
MontGras Icon DeGras
MontGras Basic

• Give customers a taste of luxury
• Customers will receive a birthday discount an
  incentive for customers to treat themselves to a
  new bottle of wine

• Customers are not sensitive to price
• An integral luxury product that complements a
  lavish lifestyle
• Access to the MontGras Icon Society.
• VIP access to events (concerts, sporting
  events, fashion shows) and hotel packages
• Luxury birthday gifts

Current Position Finances Strategy
Marketing Competition Risks
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Marketing Budget
Current Position Finances Strategy
Marketing Competition Risks
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MontGras is fighting a battle on two fronts
Foreign Competition
Local Competition
MONTGRAS
Large Chilean wineries
New World Entrants
Current Position Finances Strategy
Marketing Competition Risks
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Risks and Contingencies

• Distribution channel fails (Stores go out of
  business, contract gets cancelled)
• Contingency Diversify distribution channels

• Demand preferences change
• Contingency
• 1. Monitor customer preferences with marketing
  research
• 2. Shift production and marketing to
  another MontGras product.

3. Competition catches up with our
marketing Contingency 1. Capture market
share in the beginning 2. Monitor
competitors performance and innovate
Current Position Finances Strategy
Marketing Competition Risks
25
Volume Value

• Questions?