10.14.2009

A Look at the True Meaning and Value of Marketing

In the wine industry, we tend refer to “sales” and “marketing” in the same vein, often using the terms interchangeably. We create “sales and marketing plans”, appoint Directors of “Sales and Marketing” and generally know that we need both functions to operate successfully. However, there exists a good deal of confusion regarding the purpose and specific activities accorded to each activity. While the two should work in tandem, it is important to understand that sales and marketing are not one and the same. Marketing is a distinct value creating function.

Two years ago I created a workshop entitled “Driving Sales with Marketing Driven Strategies” that I’ve since had the pleasure of presenting to a few wine industry organizations. During the introduction, I point out that the title of the presentation was chosen mindfully -- it presupposes that sales and marketing are two distinct functions. I then show two simple images: a leather shoe and a crowded room. The leather shoe represents sales, which closes the deal, literally moving inventory out of the winery and through the channels of distribution and creating revenue. The crowded room symbolizes marketing -- a function that creates value by driving demand for wines and makes it easier to move those boxes.

Let us examine a different example, a tasting room: sales closes the deal -- it is a “here and now” activity; but first, marketing attracts the customers to the winery and requires a longer term outlook. Without marketing, the role of a sales person is rendered much more difficult. There are more outbound than inbound calls, a steeper slope and a heavier bag. And without sales, the marketing role is much less effective since wines rarely sell themselves. The challenge is that many wineries do not have the budget to hire two full-time people, one overseeing sales, another heading up marketing. So it is even more important that the roles of each function are well understood and that appropriate time is allocated to both.

One of the primary responsibilities of a marketing manager is to identify the winery’s compelling story. This story, commonly referred to as a “brand”, should identify the winery’s four “D”s – what is desirable, distinctive, deliverable and durable. These characteristics define uniqueness, which is critical for achieving a defendable and strong positioning in a very crowded marketplace. The next responsibility should be to create or polish the winery’s vision, mission, key talking points (and proof for each) and identify the segments it’s targeting in the sales channel. Part of doing so well involves a competitive analysis of wineries that occupy the chosen position and defining particular internal strengths and weaknesses, and external opportunities and threats (the SWOT analysis).

At this point a nascent winery will start thinking about assets including all visual and written communication including packaging, website, press kit, e-blasts, brochures, etc. For an existing winery, this is the time to review those assets to make sure that they do the following: 1) tell the story consistently and in a compelling manner; and 2) appeal to the identified target segment(s).
The next step in a marketing driven sales strategy is to create a plan to tell the winery’s compelling story. The traditional four P’s of the marketing mix provide the beginning of a framework -- product, price, place and promotion. The first two traditional P’s must be defined as part of the winery offering. The third, Place, is the one most related to sales. It should answer the questions of what channels and markets, as well as specific breakdown between wholesale, direct-to-consumer and direct-to-trade in each. “Place” is essentially where a winery will tell its story. The fourth P, Promotion, is often the “fun” part. It defines the combination of tactics including events, ads, online activity, media relations, trade relations, programming, promotional materials, etc.

There are some newer P’s including People, Process and Physical evidence that work very well in the wine industry, which necessarily has a hospitality and customer service focus. A good winery marketing plan will include specific strategies for engaging and training the right people, creating systems and processes for customer service, etc. and producing a location, whether online or virtual, that includes physical elements that speaking to the winery’s particular story.

The next part of a marketing driven sales strategy involves People, those charged with telling that story. Key story tellers in the organization including owner, winemaker, sales and hospitality staff etc., so all speakers should be well versed. It also defines the particular audiences -- consumers, trade, media, employees, and the modified version of the winery story each should receive.

The final and ongoing stage of marketing driven sales strategy is to aim for continuous improvement. The Processes created by marketing should determine exactly who is doing what, define how compliments and complaints are handled, and provide for a set of key winery metrics. Internal performance reviews and annual surveys of key audiences are methods used to assess good standing and provide feedback for improving operations.

Marketing can only succeed in its true creating role when it is performed at the strategic level. Confusing marketing with sales diminishes a winery’s optimum operations and misses opportunity for both short-term deal making and long-term value creation.

10.05.2009

Oregon State Fair Judging Results

This summer I had the pleasure of judging the very well organized Oregon State Fair wine competition. Elaine Lisle, Desa Swaim and their crew did a tremendous job and I truly enjoyed getting to better know my fellow judges. Last week I received the results and my judge's notes in the mail. Below is a list of my favorite wines including the medal won (if available):

Phelps Creek Chardonnay
2007 - Nice toasty notes with lemon cream and a little baking spice. Integrated with a long finish. Gold Medal.

Amity Vineyards Pinot Blanc
2007 - Pretty fruit salad, melon and floral aromas with a touch of white pepper. Nicely balanced with acid and finishes clean -- very refreshing. Silver Medal.

Orchard Heights Gew├╝rtztraminer
2008 - Beautiful aromas of slate, rain, sweet basil and honeysuckle. A little p├ętillance on the palate with floral and pear flavors. Nice acid balance with a clean finish. Silver Medal.

Chateau Lorane Viognier
2006 - I'd never heard of this winery before but I also liked its Tempranillo (see below). Lavender, floral and spicy aromas lead to a very pretty, ripe and round mouth-feel. Finishes lush and clean. Silver Medal.

Firesteed Dry Rose
2008 - watermelon, cranberry and herbal notes. Nice bright acidity leads to mouth-watering refreshment -- needs a good sunset. Bronze Medal.

Coelho Pinot Noir
2006 - Aromas of raspberry, sour cherry and pretty baking spices. Balanced with excellent structure. Gold Medal and Best of Red.

Stangeland Winery Pinot Noir
2006 - Cranberry, raspberry and nutmeg aromas with hints of dark chocolate. Bright, mouth-filling fruit with a solid finish. Bronze Medal.

Chateau Lorane Tempranillo
2004 - A huge nose filled with deep black cherry, raspberry and milk chocolate. Plus notes of fresh leather and curing tobacco. Ripe and round in the mouth with good tannic structure. One of my top three.

Devitt Merlot
2004 - Another new winery for me. Nose filled with plum, sage, fresh leather, cigar box -- it's a touch of old world mixed with ripe fruit. Nice attack and lingering finish. Silver Medal.

Zerba Cellars Red Blend
2006- Green peppercorn, pine cone and leather aromas matched by ripe blueberry, blackberry and raspberry. A hint of mint on the palate with nice balance between fruit and acid; great length. Gold Medal.

Devitt Cabernet Sauvignon
2005 - Nose of cigar box, cedar, black fruit and new leather saddle. Big, juicy black fruit with a silky mouth feel. Great lingering finish.