Marketing as an essential aspect of modern business
Marketing has become an essential aspect in the modern day business. It is playing a greater role in the success of the firm especially in the expansion plan of the company. It helps the firm in extending its reach in the new areas by communicating the goals and objectives of the organisation from their business (Varsei & Polyakovskiy, 2017). In the competitive environment, effective marketing can help the company in having edge over the other competitors. Before marketing, it is essential that companies perform environmental analysis based on various factors. Multinational firms had to design International marketing campaign based on the resources it has as well as the segments they have targeted in the market. Yellow Tail Wine is an Australia based wine company which is produced by Casella Family Brands. They have been producing wine in Italy since 1820. Later in 1957 the family moved to Australia. This report analyses the issues that Yellow Tail wine is facing in the market as well as its expansion in United Kingdom. It also presents the strategic analysis based on various external factors.
Yellow Tail wine is one of the most popular wine brands in Australia. It is based in Yenda, Australia. Casella family developed this brand in the year 2000 for the purpose of export. By 2003, it became the most imported wine in USA (Thach & Olsen, 2004). Till this time the cited firm expanded around 10 times its original size. This company has a capacity to have approx. 300 million litres on site as well as it produces and stores more wines at somewhere else (Gandellini & Venanzi, 2011). This brand derived its name from yellow footed rock wallaby. Around one third of the grapes that are harvested by Yellow Tails are done in one region i.e. Vineyard in Riverina, Australia.
Issues faced by the brand
The issue that company faced in the last few years is the currency problem. In last few years this company has faced many types of loss. Casella faced a loss of 30 million Australian Dollar in 2011-12 (Gara, 2013). In this competitive environment the room for increasing the price range is not so much. Rising labour cost in Australia is also a challenge for the wine industry. Australian dollar has strengthened against the American dollar which gives wine companies from Australia a competitive advantage over the rivals from other regions.
Yellow Tail Wine: introduction and production capacity
UK has been a great market for the wine companies hence there are many players in the industry. The society has changed and with it the wine culture is growing (Mozell & Thach, 2014). Although the per capita consumption of wine in UK is relatively on the lower side as compared to other European country, the wine sale is on the higher side. The wine market in Europe is USD 26 billion respectively. The majority of wine sold in UK is through the retail outlets (Wilson & Phillips, 2016).
(Source: Wine and Spirit trade association/Nielsen, 2016)
It can be an excellent opportunity for the company to expand its business into UK. With the trade routes becoming easier the company has an excellent chance to capture the market base of UK. With a higher per capita income people have enough money to spend on these luxurious and imported products (Szolnoki, 2013). The opportunity can also be justified by the fact that most of the UK wine retailers are from USA, Australia and Italy (Orth, Lockshin & d’Hauteville, 2007).
(Source: Wine and Spirit trade association/Nielsen, 2016)
Marketing conditions in UK
Market condition of UK has changed considerably and the companies in various industries have focused towards designing of the marketing campaigns. In the process of designing a marketing plan for Yellow Tail in Australia, it is crucial that a strategic analysis needs to be done by the company. The analysis must be based on various factors. The strategic analysis of UK is as follows:
- Political: The political environment of UK has changed and its effect can be noticed on wine retail industry. With the easing of trade barriers, Yellow Tail can easily export its products into UK. The decisions such as Brexit will help the company as Britain’s trade policies with other countries are also going to change. This change will empower the company to sell its product in the market without checking the norms made by European government (Amienyo, Camilleri & Azapagic, 2014). On the other hand the changing policies against the heavy consumption of alcohol may somehow affect its sale. At the same time, the increased tax especially the import duties on luxurious product will impact the sale of Yellow Tail Wine.
- Economic: Britain is a powerful economy hence provides a strong support to any industry. Wine is considered to be as the luxurious product hence it required a market that is stable. UK has high per capita income hence the purchasing power of the people is also a higher side. But it is also to be noticed that on the other side inflation is increasing at much faster rate and this is decreasing the spending power of the people (Ritchie, 2011). After the recession of 2009, the economy of UK has shown poor growth. This is dangerous for any new kind of investment. Apart from this, the retail market in UK has shown a higher growth which is a positive sign for the wine retailer like Yellow Tails. On the other hand, the tourism industry has also shown a positive growth which is an excellent opportunity for the new firms to invest in the country. In the designing of marketing campaign, it is essential that company uses innovative marketing activities rather than intense marketing campaign.
- Social: In UK, society has changed drastically especially in terms of demographics. Britain is ageing and hence people are becoming more conscious about the health concerns. This is not the positive sign for the sale of luxury products like wine. There are many students coming in the country for the purpose of study, they can be a target market for the company. With the increasing unemployment numbers in the country, marketing could be a challenge for the company. It will have sure effect on the pricing of the products which is a major aspect of the marketing campaign. The use of electronic forms of advertisements like television and radio in the UK market could create issues related to CSR (Ritchie & Valentin, 2011). The best marketing strategy that company will have to focus on is ‘word of mouth’. For this they will have to focus on product development strategies so that they could bring the best of products for the market.
- Technological: UK is technologically advanced market hence it is crucial that Yellow Wines utilises digital marketing strategies in their marketing campaigns. This is due to the fact that it makes the company capable of reaching deep into the society. There are many people in UK that are highly active on the social media sites. Use of Social media sites can be effective for attracting larger number of people towards their products (Holden, Hawkins & McCambridge, 2012). With the development of mobile technology, it is easier for the companies to do personalised marketing. Company must focus on spreading messages through the help of different kind of technological platforms.
- Legal: The legalities in the UK against the abusive use of alcohol are very strict. The government has imposed many types of rules and regulations on the companies that are in wine industry. Due to these rules companies will have to keep more focus on their production and marketing activities (Schirmer, 2011). The age restrictions on the use of Alcohol will also restrict Yellow Tails from doing free marketing. In such environment, it is crucial that complies with all the rules and regulation before planning marketing campaign so as to avoid any legal consequences.
- Environment: The agricultural industry in UK has shown a positive response for the wine producers. Sustainability is still an issue in the UK market. This is because of the climate change and increased demand of the local wine industry (Hill, 2008). The marketing of the brand should focus on the sustainability issues so as to create positive impact on the minds of potential consumers.
- Financial: The financial condition of UK is very strong except the fact that in the recent years they have faced any kinds of challenges. Along with this, Yellow Tail wine also has a good financial base. They can utilise this strength of the company for making better supply chain in the UK market (Mitchell, Charters & Albrecht, 2012). Since UK is having effective trade partnership with Australia hence company will not face much problems related to the import of products. At the same time, they will also have to make sure that cost effective marketing campaign is prepared so as to achieve best ROI.
Conclusion
From the above based report, it can be concluded that Yellow Tail Wine is one of the biggest wine producers in the Australia and one of the largest exporters in USA. It has faced a loss in past few years due to variation in the economic environment and currency value. This company can select UK as a target market as it is a developed nation and in terms of overall consumption it is highest in the European region. Evaluating the external environment is essential for the wine companies before making an expansion so as to implement the best of strategies in their marketing campaign. The political and economic factors support its expansion. On the other hand, technological environment in UK will benefit the company and they must select best digital marketing strategies in their international marketing campaign.
References
Amienyo, D., Camilleri, C., & Azapagic, A. (2014) Environmental impacts of consumption of Australian red wine in the UK. Journal of cleaner production, 72, 110-119.
Gandellini, G., & Venanzi, D. (2011) Purple Ocean Strategy: How To Support SMEs’ Recovery. Procedia-Social and Behavioral Sciences, 24, 1-15.
Gara, T. (2013) Yellow Tail Has A Currency Problem, Aussie Wine Has A Yellow Tail Problem Retrieved from: https://blogs.wsj.com/corporate-intelligence/2013/01/14/yellow-tail-has-a-currency-problem-aussie-wine-has-a-yellow-tail-problem/
Hill, C. (2008). International business: Competing in the global market place. Strategic Direction, 24(9).
Holden, C., Hawkins, B., & McCambridge, J. (2012) Cleavages and co-operation in the UK alcohol industry: a qualitative study. BMC public health, 12(1), 483.
Mitchell, R., Charters, S., & Albrecht, J. N. (2012) Cultural systems and the wine tourism product. Annals of Tourism Research, 39(1), 311-335.
Mozell, M. R., & Thach, L. (2014) The impact of climate change on the global wine industry: Challenges & solutions. Wine Economics and Policy, 3(2), 81-89.
Orth, U. R., Lockshin, L., & d’Hauteville, F. (2007). The global wine business as a research field. International Journal of Wine Business Research, 19(1), 5-13.
Ritchie, C. (2011) Young adult interaction with wine in the UK. International Journal of Contemporary Hospitality Management, 23(1), 99-114.
Ritchie, C., & Valentin, D. (2011, June) A comparison of wine drinking behaviours in young adults in the UK and France. In 6th Academy of Wine Business Research International Conference, Bordeaux, France.
Schirmer, R. (2011, October) Globalization in the Wine World. In Globalization in the Wine World (pp. 177-192). Firenze University Press.
Szolnoki, G. (2013) A cross-national comparison of sustainability in the wine industry. Journal of Cleaner Production, 53, 243-251.
Thach, E. C., & Olsen, J. E. (2004). The search for new wine consumers: Marketing focus on consumer lifestyle or lifecycle. International Journal of Wine Marketing, 16(3), 44-57.
Varsei, M., & Polyakovskiy, S. (2017) Sustainable supply chain network design: A case of the wine industry in Australia. Omega, 66, 236-247.
Wilson, J. & Phillips, S.S. (2016) UK Wine Market Report 2016 Retrieved from: https://gain.fas.usda.gov/Recent%20GAIN%20Publications/UK%20Wine%20Market%20Report%202016_London_United%20Kingdom_2-19-2016.pdf
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
