Wine Pricing In Niche Marketing: Small Vineyard Niche Branding, Positioning, Promotions

Published: 05th May 2010
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Wine Pricing In Niche Marketing:

Small Vineyard Niche Branding, Positioning, Promotions

Once the juice is in the bottle, pricing becomes an important part in selling wine.

For hand-tended California vines and small lots of carefully blended and aged wine, the cost can be calculated. But price is quite a different thing. Above $15, brand and market niche have everything to do with price. Quality, the balance of sophistication and dynamism is key, but brand and niche determine price.

Many vintners begin pricing by calculating fixed and variable costs per bottle or case. That calculation has more to do with skill at running the farm than the price/value of the wine. It is a proper exercise, but the market doesn't care.

Now, if there sometimes is a combative relationship between vineyard manager and wine maker, there is a similar relationship between winemaker and marketer where one's job is to make wine, the others is to sell wine - different goals.

For smaller vintners, marketing requires a niche sales strategy of focusing the brand on a niche that combines price acceptance with an appreciation for your wine. A niche market is the subset of the larger wine market having some special characteristic and that's worth exploiting. For help with this call the author at six five zero, eight six seven, thirty-seven hundred.

Q: Why should you bother to establish a niche market?

A: Because of the great advantage of being alone there; other small wineries may not be aware of your particular niche market, and large vintners won't want to bother with it.

The trick to capitalizing on a niche market is to find or develop a market niche that has customers who are accessible, that accepts your price, and that is not owned by one established vendor already.

Targeting Your Niche

- Focus. Be specific. Your niche should arise naturally from your wine or your interests or experience.

- Describe the customer's worldview. Look at the world from your wine buyers' perspective. The best way to do this is to talk to current customers to identify what it is they like. Note: Don't be surprised if it is the experience or a memory, which the wine enhances.

- Evaluate. Evaluate your proposed niche and brand. Perhaps you'll find that the niche you had in mind, say grand slam tennis, requires more cost or travel than you're ready for. So scrap it, and move on to the next idea.

- Test. Once you have a match between niche and product, test-market it. This can be done at targeted tasting events, mini-seminars on the brand and/or distribution of your newsletter.

Seven Steps in Pricing

Price is an important niche marketing issue because it is related to branding, product positioning, target market and promotional activities including Web, advertising, PR and packaging decisions. For help with these issues, contact the author at molitor42 at gmail.

Step one: Vintners should articulate the pricing objectives. For example, building market share is in direct opposition to driving revenue and quality will conflict with profit maximization.

While there is no single recipe to determine price, the seven steps below are a traditional list for determining price. It is a good exercise, but generally does not apply to small vintners because of their highly social aspect of wine sales. But If you are going to try and sell through distribution, you will need to have these calculations in hand.

- Develop marketing plan: Perform marketing analysis, segmentation, targeting, and positioning.

- Define the product: This wine is ___ ?

- Understand the market environment: Evaluate, your niche, likely competitors and their historic actions.

- Decide on the marketing mix - Distribution, winery sales, online sales; outline promotional tactics.

- Estimate the demand - If you only have 1,200 cases this activity may not be worthwhile. But at 10,000 cases, estimated demand becomes your cash flow estimate on the balance sheet.

- Lastly, outline pricing structure and discounts.

These steps are interrelated and are not necessarily performed in the above order, nonetheless, the above list serves to present a starting framework for pricing that must be tested when determining your niche.


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