Competetive analysis of Wine company

Mad housewife is a wine brand produced by Rainier Wine Company based in California (U.S.A). Rainier recognizes that wine should never threaten, nor make anyone think too hard about it, or even make someone create a new line item in their budget but above all, the company believes that “wine should be fun, relaxing and something everyone should afford to look forward to at the end of each and every day” (www.rainierwine.com) after a hard day of work. Rainier wine company is at the moment mainly making four types of wine which are Chardonnay, Cabernet Sauvignon, Merlot and a limited edition unique wine called White Zinfandel wine. Besides the wines, mad housewife makes t-shirts and coking recipes through its blog.

Strategy Identification

Marketing Mix (4p)

Products

Mad housewife makes its products with the housewife in mind. Their wines are made to give their clients a sense of freedom and peace when they are left at home by their families. The wines:

Chardonnay: An outstanding white wine made from white grapes that bound to please. The mad housewife’s chardonnay wine has a mixed flavor of melon, pear and Fuji apple. Hints of cinnamon, light toasty oak, and a creamy finish make it the wonderful choice for dinner, fun events, or a simple moment to the company’s target market (the housewife). 

Alcohol 13.5%

Sugars 0.7g/l

Cabernet Sauvignon: Made from Ripe cherries, mint, and mocha this distinguishes the soft, beautiful expression of the grape. The bunch offers an explosion of sweet preserves while the taste is overjoyed with the smooth, lush sensations of silky Cabernet.

Alcohol 13.5%

Sugars 0.6 g/l

Merlot: Mad Housewife Merlot mixes complex flavors of blackberries and plum with hints of vanilla and spice, for a smooth and rich wine, easily match able with an selection of dishes.

Alcohol 13.5%

Sugars 0.6 g/l

White Zinfandel: A wine made from Watermelon and strawberry combine with a subtle sweetness in this pink treat. A real crowd pleaser

Alcohol 13.5%

Sugars 3.5 g/l

Place

All the wines made by mad housewife are 100 percent California and at the moment the wines can be found in wine shops, liquor stores and grocery stores in most states of the U.S.A and in some parts of Canada. But because of the wines popularity among house wives worldwide the wines can now be brought online.

Price

Rainier Wine Company uses value based pricing for its products. This is when a company prices its product based on the value it creates for the customer (target market in mind). Because of what the company believe should be the picture of wine to everyone (wine should be fun, relaxing and something everyone should afford to look forward to at the end of each and every day, (www.rainierwine.com)), value based pricing is the best pricing strategy for rainier wines because it is the most profitable form of pricing once achieved.

Promotions

Looking at the target market and most of all its consumers, promotions are one of the main factors that drive mad housewife wine. With a lot of holidays that looking into women affairs like International Women’s Day, International Midwives Day, mother’s day and many more, it is easy for mad housewife to come up with a good number of promotions to fit their clients like specials on the above mentioned days where they can come up with gift basket. When it comes to communication about the product, mad housewife is advantaged because its target market is always sharing information about the things they like. In return mad housewife gives away free Mad Housewife T-shirt to clients every week, to show how much they appreciate their fans.

E-CRM

An eCRM system enables a company to know its clientele better. A company gets to understand its customer’s values and uses that information to make better marketing, sales and service decisions. When a client joins the Mad Housewife mailing list, the company keeps them informed about news from Mad Housewife, upcoming events and everyone is automatically entered into a prize drawings. The list also helps the company follow up on its clients through email marketing and direct give backs where it shows appreciation to returning clients.

Virtual communities

These are social network where individuals interact through specific online Medias, possibly to cross geographical and political limitations in order to pursue common interests and goals. One of the most spread types of virtual community today include social networking services, which consist of various online communities. Mad housewife has two main virtual communities. One on facebook (www.facebook.com/MadHousewife) and the other is on twitter (www.twitter.com/themadhousewife) which are the two most used social networks today. The company also has a blog were housewife shares cooking recipes (www.madhousewifecellars.com/blog/).

Environmental Analysis

SWOT

SWOT is a tool used for auditing a company’s internal and external environment. The tool is the first stage when it comes to Strategy planning for a market segment and it also helps the marketing department to focus on key issues about the standing of a company. SWOT stands for strengths, weaknesses, opportunities, and threats. Were strengths and weaknesses are internal factors and, opportunities and threats are considered as external factors.

Strengths

Unique and funny name, the name Mad Housewife is one of those names that gets consumers thinking and wondering. It is a unique name that always connects with its intended target market.

Creative and funny labels, the labels that portray a housewife thinking of what to do next gives the consumers a sense of humor which they go through also when they are done with all their work in the house. Making them want to try something else.

The product appeals to women, specifically mothers and wives. With a clear target market in mind which is the housewife this is considered a strength, because no other wine on the market targets a gender market segment.

Economically low-priced, because the company wants its target market to look at their wines in a different way, which is that (wine should be fun, relaxing and something every mother/housewife should afford to look forward to at the end of each and every mad day, www.rainierwine.com) makes the company place value to its clients by providing a great wine at a low-price. The team at Rainier Wine also believes that wine should never intimidate or create a new line item in their client’s budget (www.rainierwine.com).

Mad housewife wine wins a lot of wine competitions due to its position in the eyes of the consumers. This shows that the wine is more than just a clever and fun label but that it also has a great test too. The wine has received more than 40 medal from 2007 to date which also shows that it is a well known and loved wine.

Mad housewife wine is a popular wine amongst mothers and wives around the U.S and Canada. The wine gives its target segment a sense of understanding, in 2011 the company tag line for mother’s day was “your mom needs “a moment without the madness.” (www.madhousewifecellars.typepad.com/blog) which made a lot of consumers to connect with the brand.

Weaknesses

Not international and national yet, the brand had not broken through all the regions of the U.S and still only exports to Canada, which means that, the company will have to increase its distribution efforts in order for it to grow its brand.

The brand doesn’t appeal to men.

The brand doesn’t appeal to the many other women that work which is a market segment the company can do something about.

The company doesn’t offer any other products rather than wines and t-shirts.

Opportunities

The company has a chance to expend worldwide and be the only well known wine brand of its kind amongst housewives.

The brand has a chance to attract other types of target audience. With a well known brand already at hand, it will be easy for the company to attract different clientele.

The brand still has room to go national.

The company can gain more revenue by starting to sell its wines online because at the moment it only sells it t-shirts online.

Threats

Mad housewife wines are usually overshadowed by other type of wines from other parts of the world. Many people like wines that are imported from wine counties like Spain, Italy, France and South Africa.

The wine has competitors from similar wines like working girl wises.

The company might not being able to expand or appeal to other market segment.

Old and new competitors products becoming more popular due to the luck of the product in parts of the U.S and other parts of the world.

Competitive analysis based on the five forces

Force 1: The Degree of Rivalry

With a lot of other companies making wine, it is not easy to place a target on the market. According to a report by Provence wine (www.provencewineusa.com, February 2011) wine consumption in the U.S. increased from 205 million cases in 2000 to 276 million cases in 2010. The wine market in the U.S is represented by a 72% domestic made wine (mainly from California), while the remaining 28% represented the imported wines which three-quarters come from Old World exporters like France, Italy, Spain, Germany, Portugal, and the other quarter-plus come from New World markets like Australia, Chile, Argentina, New Zealand, and South Africa. This shows that Mad housewife has very little power on the market.

Force 2: Threat of new Entry

This is one of the most difficult markets/industries to keep hold of because it does not require heavy machinery or investments. In addition, the wine production techniques are not original or difficult to copy. As of now, there are about 1,200 known wineries in the U.S alone and many more new wines coming on to the market every year. Wine being a beverage that is made in different parts of the world using different techniques, which bring out different tastes, consumers will always want to taste the other products available on the market. Keeping hold of clients is the key in this industry because competitors don’t just come from within the country but outside too.

Force 3: The Threat of Substitutes 

Wines being a beverage that can either be expensive cheap depending on the year, consumers have a high substitute grounds. One can change from taking wine to beer, liquor, non-alcoholic beverages or wine coolers which are also a very large market in the U.S. Apart from the change in type of beverage, new wine makers are substituting the grapes which are the main ingredient many wineries use to make their product with other fruits like apples, blackberry, blackcurrant, blueberry, cherry, cloudberry, cranberry and many more. This alone is something that will in the end weaken grape wine produces powers on the market.

Force 4: Buyer Power

With a product that targets a unique clientele, it is easy to say that Mad Housewife’s target market have the individual powers to change the cause of the product. Being one of the very few wine produces that have a main target audience which is a large market, the company knows that its clients are price sensitive and are knowledgeable regarding the product and what the company stands for.

Force 5: Supplier Power

When wine producer have their own vineyards (which most in the U.S do), the suppliers power is low, except in cases where there is a fire outbreak in the vineyard, disease, drought or frost that damages the grapes, and so on. The suppliers have low to moderate power on the industry. The only time supplier power could be high is if the wine produces didn’t have their own vineyards which would give the suppliers of for example grapes a very large industry to work with. By controlling the operations from growing the grapes, production the wine to distribution it, reduces the supplier’s bargaining power.

Segmentation and targeting, differentiation and positioning

By using segmentation, targeting, differentiation and positioning tools to identifying and satisfying clientele common needs and desires a company can gain competitive advantage. While it is known that Consumers have different needs and tastes’, making of tailor-made products has always been a unique way to differentiate and position a company to a target segment that has similar characteristics.

Segmentation

Mad housewife has taken a Demographic segment approach. The company’s target segment is women that are house wives between the ages of 25-65 that do not work and are stay at home mothers and wives. This segment is always busy with taking care of the kids and house the whole day long which made mad housewife looked at how it can give the target audience a sense of freedom at the end of the day.

Targeting

Because of the products unique name which makes it appeal mostly to its target audience, it is safe to say that this targeted group has the potential to be a profitable market because it has been ignored by the other wine makers that are also mad housewife’s competitors. According to a study by the New York Times in 2005 (www.nytimes.com, published: Friday, April 29, 2005), the paper reported that women purchased 77% and consumed 60% of wine in the United States. According to a Report by the Canadian Embassy in Washington, D.C (www.ats.agr.gc.ca, The Wine Market in the Northeastern United States, April 2006 ), The Wine Market Council reported that Women account for 64% of wine consumers in the United States.

Differentiation

Mad housewife’s wine is different in the sense that it is a wine that has been made with women in mind. The company spent almost a year on the road around the U.S conducting taste panels that let women design and create the mad housewife wines, from the packaging to the flavours. The company also uses a marketing technique that is used in traditional consumer packaging as their branding strategy, which is very unusual in the wine industry instead because companies in the industry usually use advertising technique were they advertise their wines by the regions were they are made.

Positioning

Positioning involves creation of an image that the target customers identifies, based on the product characteristics, uniqueness, quality and promotions carried out by the company, a product can stand out in a market that has many competitors. Because mad housewife as positioned itself as the wine for the housewives, it is easy to see why a lot of its clientele has warmed up to the name and products. Due to the unique brand name, the company as established a competitive advantage because customers view the products as a unique product made just for them which makes them feel superior.

Objectives and E-marketing Strategies

Objectives

To appeal and expand target audience.

To get the target audience excited about the arrival of a newly designed wine just for them.

To clearly distinguish the different flavour of each wine to the target audience.

To help in the fight breast cancer.

To give the housewives a moment to enjoy the day without the madness that comes with day to day running of the house.

E-marketing Strategies: (Marketing communication)

Mad housewife has a mailing list registration option on its website. The list helps the company with its email marketing where it sends emails to everyone that registers. This is one of the cheapest ways to advertise its products and upcoming promotions. The company can also use Online advertising which is a marketing strategy that has shown a very significant value when it comes to return on investment (ROI). Online advertising is when a company placing advertises of its products and services on other companies’ website, like companies that are found on the first pages of search engine, or on sites that get large amount of traffic from Internet users. Besides Online advertising, the company can also do some affiliate marketing with other companies or store that sell online.  In addition to online advertising and affiliate marketing, mad housewife can also come up with an online newsletters to pass on product information and promote their wines and upcoming events, services and whatever new products that might be in the pipeline to be launched. Unlike email marketing, online newsletters are issued at regular time intervals which might be an advantage to the company.

Differentiation Strategies

Mad housewife’s wine is different from other wines on the market because, the wine has been made with women in mind. It is a wine designed by women for women. This unique difference is what makes mad housewife wines very popular with the house wives. The wine has been made in such a way that it delivers emotional power and stirs the hearts and the mind of its consumers. This is what distinguishes mad housewife’s wine from that of the competitors’ products. The fact that the company uses traditional branding strategies that talk directly to its consumers gives the wine a following the company can take extra advantage on.

Positioning Strategies

Because mad housewife as positioned itself as the wine for the housewives, the end result should be, to create a market focused value plan that sends a clear message on why the targeted market should buy the company’s products. With the unique brand name the company as established, it can take advantage of this by creating other products that will define what the company hopes to achieve for example its goal to appeal and expand its target audience. Since the company as

already established itself as a housewives targeting company, it can change or add on to that to be known as a women targeting company instead. This can be done by introducing other wine brand names that will target all women not just housewives for example a wine for the working and super mothers.

Website Analysis (7c’s)

The seven design elements of an Ecommerce website.