RMA Marketing Plan for Robert Mondavi WinesDeveloped by Dave HennessyMay 2012, Columbia College Chicago, Professor Zorn
Table of contentsTitle Page………………………………………….…….1 Macroenvironment…………………………..……19Table of Contents……………………………….……2 Big Idea……………………………………………….…20Executive Summary…………………………….…..3 Mission Statement…………………………..…….21Market Summary/Industry Info………….……4 Financial Objectives………………………….……22Market Description/Demographics…….……5 Marketing Objectives……………………………..23Market Description/Demographics…….……6 Target Market…………………………24, 25, 26, 27Geography…………………………..…………………7 Psychographic/Behavior Analysis…………….28Market and Industry Trends……………..…….8 Positioning Statement………………………….….29Market Growth…………………………....9, 10, 11 Elements of Strategy………………………….30, 31Current Market Position………………………...12 Expense Budget……………………………………….32Direct Competitors…………………….....…13, 14 Implementation Calendar…………………………33Indirect Competitors………………………………15 Marketing Research………………………………….34SWOT Analysis……………………………………..…16 Sources………………………………………………….…35Robert Mondavi Products………………….……17Channels & Distribution……………………….….18
Executive summaryRobert Mondavi is a California winery headquartered in Oakville, CA. Producing anumber of quality wines every year, Robert Mondavi’s average consumers areEmpty Nest Baby Boomer couples between the ages of 55-64 living mostly inAffluent Suburban Areas in the Middle Atlantic and Pacific regions of the UnitedStates.In order to compete with the increasing number of smaller, trendy wine brands,Robert Mondavi will launch a new brand in 2012 called RM. RM will produce aninitial line of five wines that highlight the culture and diversity of major Americancities. RM’s target consumer is a Young Transitional with no children living mainlyin Cosmopolitan Centers.In order to effectively launch the RM brand while maintaining 99% of existingcustomers, Robert Mondavi will hire a number of specialist teams – including anoutside creative agency – to help develop and monitor new business and creativecampaigns.Robert Mondavi’s expense budget for launching the RM brand in 2012 is between$8M and $10M.
Market Summary / Industry InfoSIC Code: 2084, Wines, Brandy, and Brandy SpiritsNAICS Code: 312130, Wineries Industry Competitors:• E & J Gallo Wineries located in California (15,000 acres). E & J had sales of $2 billion in 2009.• Constellation Brands is the second largest winery in the United States wine market (which owns Robert Mondavi). The company had annual sales of more than $3.3 billion in 2009. Located in New York, the company was started in 1945.• Jackson Family Wines (JFW) sells the top Chardonnay in the US: The Kendall-Jackson Vintner’s Reserve. The company also makes merlot, sauvignon blanc, pinot noir, cabernet sauvignon, and zinfandel varieties from 14,000 acres of vineyards in California.
Market Description/DemographicsDemographic Analysis of Robert Mondavi Private Selection consumers:• Are Empty Nest Couples (2+ person households with no children), ages 55-64• Are college graduates• Have HH income of $100,000+• Live in Affluent or Prosperous Suburban areas (Spectra Lifestyle)
Market Description/Demo. Continued Householder Age-Buying Rate Index 150 100 50 0 Age 18 - 24 Age 25 - 34 Age 35 - 44 Age 45 - 54 Age 55 - 64 Age 65 or More Source: Homescan Product Library 2012 Mar (Spectra)Robert Mondavi consumers are Generation X (Baby Boomers) living in 2-person households. Demographic Skews Buying Rate Index Suburban Aristocrats 11% 124 Age 55-64 22% 121 Income under $10,000 2% 119 Age 45-54 24% 115 Affluent Suburbs 7% 115 Struggling Rural Mix 2% 114 Struggling Country Living 2% 112 2 person households 44% 111 Other races 7% 110 Prosperous Suburbs 9% 108 Source: Homescan Product Library 2012 Mar (Spectra)
GeographyGeographic Analysis of Robert Mondavi Private Selection consumers:• Live in the Middle Atlantic and Pacific regions of the United States Variables and Measures % Demographic Variables Index Volume Census Division East North Central 10.8% 96 East South Central 2.0% 103 Middle Atlantic 12.1% 133 Mountain 6.6% 91 New England 3.4% 78 Pacific 28.3% 103 South Atlantic 25.5% 103 West North Central 4.2% 87 West South Central 7.1% 78
Market & Industry Trends• Fine wine segment of industry is beginning a long-term, steady growth phase• Wineries enjoying “marginally improving profitability” (Silicon Valley Bank)• Growth in luxury goods outpacing the rest of the economy• Baby-boomers and Generation X are stimulating fine wine recovery• Restaurant wine sales improving• Buying wine online is becoming more popular Business Drivers/Market NeedsThe economy has been and continues to be the biggest problem for the wine industry.Consumers are worrying about maintaining their standard of living in 2012. 72% of allconsumers believe the economy will get worse over the next 12 months (RachelNichols, Wine Communications Group). Wine production is shifting with a shiftingsegment of consumers. Wine purchasers are not able to spend as much money onwine, so the industry is seeing an increase in discounted wines.
Market GrowthThe fine wine market category is definitely seeing positive growth. However,pricing and distribution strategies are changing with an evolving economy. About50% of US wineries said they expected to see select price changes in theirinventory (2011, Silicon Valley Bank).
Market Growth (continued)Restaurants have also seen changes in consumer purchasing behavior over thelast few years. The chart below shows restaurant segment growth rates for finewine, starting in 2006 up until two years ago.
Market Growth (continued)The chart above (Source: Silicon Valley Bank Proprietary Research) shows that theWine Industry is on the rebound. In most years since 2002, the wine industry hasseen at least a 10% sales growth rate. The industry was at a low in 2009, but hasgrown almost 20% since.
Current Market Position (Robert Mondavi) According to a 2011 study by brand valuation and strategy consultancy Intangible Business, Robert Mondavi is the #3 most powerful wine brand in the world (almost 10,000 wine and spirit brands across the globe were interviewed for the study, the leading brands becoming The Power 100). Mondavi is one of only seven US- produced wine brands to make the list. Below is a chart from the study: Most Powerful Wine Brands. You can see Mondavi at #3.
Direct CompetitorsThe E.&J. Gallo Winery is the world’s largest family-owned winery and also thelargest exporter of California wine. The brand produces a few different stylesof wine, including Cabernet Sauvignon, Chardonnay, Merlot, Pinot Noir,Sauvignon Blanc, and Syrah.
Direct Competitors (continued)Concha y Toro is the largest producer of wines from Latin America. Thebrand, which produces several different wine styles, is headquartered inSantiago, Chile. The company had revenue of $812.3 Million in 2010.Yellow Tail Wine is produced by Casella Wines, Ltd., which isheadquartered in Yenda, Australia. The brand includes wine stylessuch as Moscato, Riesling, Semillon, Sauvignon Blanc, Pinot Grigio,Chardonnay, and others.
Indirect CompetitionIndirect competition to Robert Mondavi products could include the following: - Beer - Whiskey - Soft drinks - Champagne
SWOT Analysis Strengths WeaknessesMore than 100 independent beverage Relies on U.S. market for salesdistributors sell Mondavi wine in the U.S. Poor brand representation in retail storesAlmost 200 sales representatives market thecompany’s brands to distributors and largeretail outletsMondavi focuses on the organic growth of itspopular premier brands Opportunities ThreatsMondavi could significantly increase brand The economy has forced the global wineawareness by marketing products via a third industry to consolidateparty (agency to consumers)Eliminating under-performing distributorswould reduce costs
Robert Mondavi ProductsRobert Mondavi produces a number of quality wines every year that includeNapa Valley Wines, District Wines, Reserve Wines and Spotlight Wines. Each ofthese wine types include selections of Chardonnays, Pinot Noirs, CabernetSauvignons, and Fume Blanc wines.
Channels & DistributionRobert Mondavi Private Selection wine is currently sold in Grocery stores,Convenience stores, Clubs, Specialty stores (ex: Binny’s Beverage Depot), andOnline. The most important distribution channel for Mondavi is currently Channel Summary % Volume Buy RateGrocery. A large majority of purchases are 50%Grocery made in 3.18 Grocery stores located inMass MerchandiseAffluent Suburbs.All Other 12% 38% 2.54 1.34Channel Summary % Volume Buy RateGrocery 50% 3.18Mass Merchandise 12% 2.54All Other 38% 1.34Source: Homescan Product Library 2012 Mar (Spectra)The purchasing of wine online is becoming a more popular trend. Socialmedia is also starting to play a bigger role in the promoting of “off the radar” Source: Homescan Product Library 2012 Mar (Spectra)brands – especially brands that sell alcoholic products – and the RobertMondavi Winery is clearly aware of this as it maintains a very active Twitteraccount (almost 6,000 followers and over 2,000 tweets) and a very activeFacebook account (over 20,000 Likes and lots of new content).
MacroenvironmentBecause of the current state of the economy, a large segment of the wineindustry is starting to target niche markets using innovative brandingtechniques (packaging, advertising, distribution) and the more popularmodel of low volume/high quality. There is more competition within theindustry now than ever before, and because of this there is room for manyniche markets. The wine industry’s core consumers are educatedprofessionals earning high incomes, and wine brands – large and small –have realized that niche markets tend to out-perform more general ones ifthey do a satisfactory job analyzing and selling to their consumers.
Big Idea – Launching a new brandAfter extensively researching the current state of the wine industry – where it has been andwhere it is going – Robert Mondavi has decided its next move is to launch a brand extension.This new brand will be a collection of affordable, culture-infused red and white wines calledRM. The RM initiative is meant to counter the increasing number of small trendy wine“startups” that are popping up across the United States.Robert Mondavi takes pride in producing some of the world’s finest California wine. Foryears, families across the globe have enjoyed the traditional, unique taste of Robert Mondaviwines. This year, the Robert Mondavi Winery will launch its RM brand. This collection ofwines will highlight the culture and tastes of some the United States’ biggest and mostdiverse cities including New York, Los Angeles, Chicago, Miami, and Boston. By introducingRM Wines to a select number of diverse and heavily populated cities across the US, RobertMondavi hopes to offer a more contemporary, interesting and affordable wine option to ayounger and more independent demographic.With the launch of RM, Robert Mondavi hopes to break into a new market segment – YoungTransitionals (ages 21-35 w/ no kids) – a segment that consists of adventurous decision-makers living mostly in Affluent Suburban Areas and Cosmopolitan Centers. The RM brandwill be a very social and visual one (compared to the Robert Mondavi brand which is muchmore traditional and conservative). There will be a strong focus on design and packaging,advertising and marketing strategy, and on creatively utilizing social networks to maximizeword-of-mouth about the brand.
Mission Statement“Robert Mondavi is the world’s most trusted and respected producerof California Napa Valley wine. For decades, the Mondavi Winery hasprovided wine drinkers with delicious ways to compliment meals,celebrate special occasions, or simply make their lives moreenjoyable. Mondavi has a deep understanding of and strongconnection with its customers – one that inspires the Mondavi brandto continue making the most incredible wines in the world.”
Financial Objectives for 2012• Profit Objective: Increase total profits by 10%• Sales Objective: $3M in revenue from RM brand
Marketing Objectives for 2012Objective #1: Launch RM Brand / Increase Media AwarenessWe will measure the success of “Increasing media awareness” by measuring theamount of chatter and engagement about both the RM and Mondavi brands onsocial networks and also by analyzing our sales on a quarterly basis.Objective #2: Increase Sales (via Social Media) by 10%An important objective for the RM brand is to make conversation online and turn thatconversation into revenue. We will measure our increased sales efforts on social networksby analyzing the amount of WOM and referral conversations happening online.Objective #3: Retain 99% of CustomersAlthough we are launching a new brand, one of Mondavi’s biggest goals is to keep existingcustomers happy (customers of the Robert Mondavi brand). Without the Mondavi brand’sexisting success and knowledge of the industry and its customers, we would not be able tolaunch RM. Maintaining the Mondavi name through a new brand launch is very important.
Target Market/Audience• Young Transitionals, 21-35, No Children, Any Size HHs• Defined As: Purchasers, Decision-makers, End-users, Influencers• Type of Audience: Favorable brand switchers, Other brand switchers TOTAL DOMESTIC DRY TABLE (WINE) PINTS Total Consumption/HHs All Channels/United States BehaviorScape Framework LifeStyle Young Cosmopolitan Affluent Suburban Comfortable Struggling Urban Modest Working BehaviorStage Plain Rural Living TotalTransitionals Centers Spreads Country Cores Towns Start-Up Families living in HHs with Young Children Only < 6 1,243,742 2,010,832 1,645,415 1,377,959 1,809,119 1,942,065 10,029,132Cosmopolitan Small Scale Families Small HHs with Older Children 6+ 1,166,793 2,061,497 2,087,677 1,251,715 1,939,825 2,479,703 10,987,211 Centers are Younger Bustling Families Large HHs with Children (6+), HOH <40 844,333 1,389,321 1,533,085 1,302,595 1,572,616 1,979,818 8,621,768 among the Older Bustling Families Large HHs with Children (6+), HOH 40+ 1,499,094 3,277,148 2,412,304 1,469,689 1,861,012 2,106,362 12,625,609 most Young Transitionals 2,320,320 1,360,595 1,228,271 2,302,274 2,546,242 1,793,931 11,551,633 Any size HHs, No Children, < 35 common Independent Singles 2,529,906 1,862,471 1,975,136 2,141,135 3,033,484 2,843,933 14,386,064purchasers of 1 person HHs, No Children, 35-64 Senior Singles 1,346,174 1,341,633 1,635,222 1,250,987 2,472,039 2,882,297 10,928,351 Dry Table 1 person HHs, No Children, 65+ Established Couples 1,825,358 2,209,753 2,293,109 1,341,298 2,143,564 2,450,117 12,263,198 Wine (see 2+ person HHs, No Children, 35-54 Empty Nest Couples chart). 2+ person HHs, No Children, 55-64 1,454,703 2,650,391 2,674,654 904,742 1,817,320 2,573,688 12,075,499 Senior Couples 2+ person HHs, No Children, 65+ 1,525,051 2,490,370 2,713,077 1,036,615 2,382,980 3,245,833 13,393,926 Total 15,755,474 20,654,011 20,197,950 14,379,008 21,578,199 24,297,748 116,862,390
Target Market/Audience (continued) Young Transitionals are frequent retail and online shoppers. Within the last 12 months, the following stores and retail websites indexed very high for this market segment (in the RM cities):• Best Buy• Victoria’s Secret• H&M• Forever 21• The Gap• Amazon.com• Banana Republic• Bloomingdales They tend to shop more frequently in higher populated areas, including strip malls and busy downtown shopping centers. These patterns definitely help define this market segment as younger and trendy.
Target Market/Audience (continued) Young Transitionals living in the RM cities indexed very high eating at the following fast-food and sit-down restaurants / purchasing the following types of cuisine within the last 30 days:• Starbucks• Chipotle• Panera Bread• Subway• Taco Bell• Mexican cuisine• Asian cuisine• Upscale restaurants What does this say about this market segment? I believe it tells us that 21-35 year olds with no children are often on the go and do love cheaper food, but also enjoy fine dining – perhaps when they can afford it or have the time on a weekend. Again, this report helps indicate that this market segment is one that is trendy and comfortable trying new things and spending money when they are able to.
Target Market/Audience (continued) Young Transitionals in the RM cities are frequently reading more trendy newspapers, magazines, and other publications. A few high-index examples include:
Psychographic/Behavior Overall Analysis All of these reports (and others I chose not include in this Strategy section) indicate that Young Transitionals between the ages of 21 and 35 with no kids living in either New York, Boston, Chicago, Los Angeles or Miami are very independent consumers, thinkers, and purchasers. They enjoy luxuries and spending money, but they also love finding deals and bargains. The fact that a high number of Young Transitionals in these cities purchase organic foods, spend a lot of time on social networks and internet in general, and read some of the trendier major-city publications (vs. something like the New York Times for example) may indicate that they feel a community around their demographic; they feel like they need to be part of something. The RM brand is about allowing Robert Mondavi – the “overhead” brand – to target a new market segment with a young, trendy, social and culture-infused line of wines. We are going after exactly what this Young Transitional demographic is – a group of people that enjoy luxuries and love occasions to drink wine but may not necessarily always have the money. RM is a high-quality and visually-appealing brand with a low price tag – just what this segment wants.
Positioning Statement“For wine drinkers that want a unique and cultural experience when enjoying adelicious bottle of wine, RM Wines embodies the rich culture and history of thebiggest and most celebrated U.S. cities. Unlike small, design-focused wine labelsthat manufacture low-quality products, RM Wines offers a rich cultural experiencewith every sip.”
Elements of StrategyProduct Lifestyle – Introduction (of RM brand)Market Position – Challenger (the Robert Mondavi brand is a market leader)Buyer Behavior – Young Transitionals – Innovators, Early Adopters, and Early MajorityRapid Penetration Strategy
Elements of Strategy (continued)Strategies:• Integrated Marketing/PR Program in the “RM Cities” (New York, Los Angeles,Chicago, Miami, and Boston) Specific Tactics: - Wine tasting events - Press releases - Magazine and digital banner ad buys (see Promotions section for details) - “RM Logo Hunt” (see Promotions section for details) - Partnerships with 4 and 5-star area restaurants and hotels - RM Membership Club/Email newsletters - Brand blog with industry expert guest posts• Hire an outside ad agency – Leo Burnett, Ogilvy, other?• Design and execute social media program around the RM brand (Facebook,Twitter, Pinterest, YouTube, Google+) Specific Tactics: - Product short film - Brand website/landing pages - Facebook ad campaigns - Hashtag campaign
Expense BudgetObjective Strategy Tactic Budget $ Actual $Launch RM Brand/Create Media Awareness Integrated Marketing/PR Program Wine Tasting Events $300K TBDLaunch RM Brand/Create Media Awareness Integrated Marketing/PR Program Press Releases N/A TBDLaunch RM Brand/Create Media Awareness Integrated Marketing/PR Program Magazine/Digital Banner Ad Buys$1M TBDLaunch RM Brand/Create Media Awareness Integrated Marketing/PR Program RM Logo Hunt Event/Campaign $5K TBDLaunch RM Brand/Create Media Awareness Design/Execute Social Media Progam Produce Short Film $50K TBDLaunch RM Brand/Create Media Awareness Design/Execute Social Media Progam Design Brand Website/Landing Pages $30K TBDLaunch RM Brand/Create Media Awareness Design/Execute Social Media Progam Facebook Ad Campaigns $10K TBDIncrease Sales via Social Media by 10% Design/Execute Social Media Progam Social Media Team Hire $750K TBDLaunch RM Brand/Create Media Awareness Integrated Marketing/PR Program Hire RM Sales Team $1M TBDLaunch RM Brand/Create Media Awareness Design/Execute Social Media Progam Outside Creative Agency Hire $2M TBDLaunch RM Brand/Create Media Awareness *Pre-Strategy Product Development $2M TBDIncrease Sales via Social Media by 10% Design/Execute Social Media Progam Design/Launch RM Online Store $20K TBDLaunch RM Brand/Create Media Awareness Design/Execute Social Media Progam Pinterest Culture Boards Campaign N/A TBDRetain 99% of Customers Integrated Marketing/PR Program Hire Technical Support Team $750K TBDLaunch RM Brand/Create Media Awareness Integrated Marketing/PR Program Packaging Design Drafting $250K TBD Total Budget $ $8.165M
Market Research There will be a number of marketing research programs needed to support the RM brand in its infancy, both related to individual products and user behavior online and offline.• Digital Receipts and Purchase Surveys – Every customer that buys a bottle of RM will receive a digital purchase receipt and survey via email. Customers that complete surveys will receive discounts on future RM purchases.• Social Media Research and Analytics – Mondavi will be assembling a large social media / new media team to support the RM brand online and help build interactive communities on established social networks. We will be hiring at least one specialist to focus specifically on social media analytics. This person will be doing research about user behavior on social networks, following trends and conversations, and building reports that will help RM better target and engage customers and potential customers online.
Sources• Robert Mondavi Official Website – www.robertmondavi.com• Spectra Infinet Database – www.spectrainfinet.com• Columbia College Chicago Library – lib.colum.edu• Silicon Valley Bank Proprietary Research – www.svb.com• Hoover’s Company Records (via Lexis Nexis)• U.S. Private Company Reports (via Lexis Nexis)• Business Source Complete Database• Bing Images• Google Images• Binny’s Beverage Depot Official Website – www.binnys.com