Virtual Vineyards Marketing Report

1638 Words7 Pages
Table of Contents

Executive Summary3



2.1Market Identification4

2.2Market Segmentation4

2.3Market Orientation5

2.4Marketing Channel Performance5

2.5Pricing Strategy5

2.6Customer Needs6

2.7Customer Analysis6

2.8Commercial Position7


Reference list7


Exhibit 1 - Distribution of wine sales by price class8

Exhibit 2 - Wine drinking habits by category and employment8

Exhibit 3 - Age distribution of wine drinkers by category9

Exhibit 4 - Wine Sales by category9

Executive Summary

Virtual Vineyards started in January 1995 and within 10 months was averaging 1500 visitors a day and enjoying a revenue growth of 20% per month.

They have successfully segmented the wine market
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This is supported by the rapid revenue increases seen during the first 10 months of operation (average 20% increase each month).

2.3Market Orientation

The founders of Virtual Vineyards are very suited to their chosen business. Peter Granoff has been working with fine wines since 1978 and is now a Sommelier. Robert Olsen has 21 years experience in computer systems design together with some marketing expertise. Together they are a formidable team.

2.4Marketing Channel Performance

Virtual Vineyards rely on a single direct channel system and as we've seen, the target market segment is well suited to this approach.

The smaller vineyards have welcomed this additional distribution channel to a market which in the past has been difficult to access. They sell wine on a form of consignment which offers excellent cash flow advantages to Virtual Vineyards.

In fact the wine is never bought by Virtual Vineyards. When they sell the wine they forward 55%-70% of the sales price to the supplier and keep the balance. (Virtual Vineyards therefore have no money tied up in expensive inventory).

2.5Pricing Strategy

Virtual Vineyards recognize that the most common cost-based pricing will not work. They are delivering a quality product to the doorsteps of a monied clientele who are prepared to pay for an unusual glass of wine.

Virtual Vineyards have chosen perceived value pricing as the pricing model where the overall benefits of the product enable

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