Strategic-marketing-FINAL

ASSIGNMENT COVER SHEET
Student Name: Ricky Bichel, Emily McGenniskin, Alexandra Parsons, and Azad Tasin
Student no.: 4006789, 4004995, 4008817, 4003109
Subject Code: MKT300
Subject Name: Strategic Marketing Management
Lecturer/Tutor: Martin Long
Assignment Title: Strategic Marketing Plan
Word Count: 2,487 words (excluding in-text citations and references)
Due Date: Week 10
I am aware of ICMS policy on plagiarism as stated in the ICMS Student Handbook. This
assignment does not breach those requirements nor has it been previously submitted for
assessment contributing to any other subject or course. The ideas and information that are not
mine have been referenced accordingly.
Signed: Ricky Bichel, Emily McGenniskin, Alexandra Parsons, and Azad Tasin

Strategic Marketing Management MKT300
1
Table of Contents
1. EXECUTIVE SUMMARY..................................................................................................................................2
2. INTRODUCTION & BUSINESS DESCRIPTION..................................................................................3
3. IDENTIFIED GAPS & OPPORTUNITIES THATCAN BE ADDRESSED THROUGH
MARKETING......................................................................................................................................................................3
4. CRITICAL EVALUATION OF THE CURRENT STRATEGY.......................................................4
5. SCENARIO BUILDING.......................................................................................................................................5
A) MOST OPTIMISTIC SCENARIO..............................................................................................................................5
B) MOST LIKELY SCENARIO......................................................................................................................................7
C) MOST PESSIMISTIC SCENARIO ............................................................................................................................8
6. FIVE YEAR STRATEGY.................................................................................................................................11
7. CONCLUSION & RECOMMENDATIONS............................................................................................12
8. REFERENCES.......................................................................................................................................................13
ANDERSON, K. (2015). GROWTH AND CYCLES IN AUSTRALIA’S WINE INDUSTRY: A
STATISTICAL COMPENDIUM, 1843 TO 2013.................................................................................................13
9. APPENDIX..............................................................................................................................................................16
A) SUMMARY OF ASSIGNMENT 1 ON MCWILLIAM´S....................................................................................16

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1. Executive Summary
McWilliams Wine group is one of the largest leading wine companies in Australia. To ensure
they uphold this brand reputation, this report aims to provide a strategic marketing plan for
the company over a 1 and 5 year period, with respect to the company’s current and
prospective marketing strategy. The marketing plan will be established through forecasting
multiple scenarios, providing assessment of an optimistic scenario, most likely scenario and
pessimistic scenario. Through the use of strategic marketing models, the report will analyze
McWilliam’s current product portfolio, and through use of a trend analysis, the report hopes
to strengthen to the strategic marketing plan for McWilliam´s Group.
The findings showcase that due to intense competition and premiumisation trends, the
McWilliam´s Group will continue to capitalize on this trend in the most likely scenario until
the trend deceases. By continuing to pursue a digitalization of the wine distribution, mainly
through embracing the introduction of wine e-commerce, McWilliam´s can be differentiated.
It is recommended that McWilliams utilize the situation of the most likely scenario as a
strategic marketing alternative over the next year. The forecast for McWilliam´s 5 year
strategy will most likely continue to prosper under the fertile umbrella of the premiumisation.

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2. Introduction & business description
With 7.9% market share by volume of the Australian market, McWilliam´s is currently the
fourth largest wine company in Australia (MarketLine, 2015). After intense rationalization of
its product portfolio, reducing the number of brands from 23 to six (Sparks, 2016), the family-
owned company is now seeking to further establish itself in the premium segment by focusing
on its domestic core brands, namely McWilliam´s, Evans & Tate and Mount Pleasant.
3. Identified gaps & opportunities that can be addressed
through marketing
With “per capita consumption increasing by approximately 7% per annum” (Reindl, 2011),
China is the “worldwide fastest growing wine consumption market” (Reindl, 2011) and with a
“year-to-year growth rate of 58% in imported wines” (China Wine & Spirits Awards, 2015),
foreign wines will satisfy a major part of this newly developed demand. Thus, in conjunction
with the recently adopted China-Australia free trade agreement and a growing trend to drink
for pleasure (Halstead, 2014), adapting its wines to the needs of Chinese consumers would
allow McWilliam´s to penetrate a highly profitable market and generate a large share of its
profit through export.
With “new wealth” (Banks & Overton, 2010), meaning an expanding middle class, being one
of the primary catalysts of the growing wine demand in Asia, and especially China, effective
marketing, mostly under the form of strategic brand positioning, is imperative to attracting
this highly fruitful market (Banks & Overton, 2010). “Wine – expensive wine in particular
has been adopted as a marker of wealth and sophistication and its adoption by the newly rich
draws on imagery elegance, affluence and worldliness. Money alone cannot provide the status
and respect sought by some” (Banks & Overton, 2010). Thus, by tailoring their brand
positioning to these coveted determinant attributes, McWilliam´s could successfully leverage

4
consumer behavior in the Chinese market allowing them to penetrate the market. Since the
desired product characteristics provably exceed the tangible components of the wine (Banks
& Overton, 2010), McWilliam´s could easily increase the attractiveness of its wine in this
foreign market by encompassing a positioning of their wine as a higher status product into its
value proposition.
Moreover, through attending wine fairs in Asia, McWilliam´s could raise its brand´s
awareness in this New World market, attracting simultaneously the rich, who are seeking
“markers of Westernisation and wealth” (Banks & Overton, 2010), as well as the young
professionals that increasingly drink for pleasure (Banks & Overton, 2010).
Thus, high profits can be achieved in the Asian/Chinese market through implementation of
effective strategic marketing.
4. Critical evaluation of the current strategy
While achieving complete vertical integration, from grape growing to end consumer sale,
bypassing the Coles-Woolworths duopoly in the process, can be highly desirable; it bears
substantial risks to McWilliam´s financial viability. By not generating any revenue until the
final selling, dangerously large amounts of capital remain tied-up in the company for a
prolonged time period, often causing cash flow problems.
Moreover, by reducing their brand portfolio, McWilliam´s has increased its reliance on a
single market, namely the premium/masstige segment. Consequently, through higher
dependability, they have become more vulnerable, due to their decreased degree of
diversification. The volatility of trends and developments in the general environment, such as
a potential sudden reduction of the demand for premium wines, now poses a substantive
threat to McWilliam´s overall performance.
However, since “McWilliam´s Wine is recognized in the market as being the industry leader
when it comes to NPD´s with a reputation of being the fastest to bring an NPD to life from

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concept to shelf” (Sparks,2016), the company can effortlessly introduce new question marks
(using the BCG-matrix language), which in conjunction with an increase of market share,
might develop into new net cash generators. Hence, the dangers engendered by an excessively
narrow product portfolio can easily be counteracted, reducing their overall menace.
Consequently, one can assume that the organization has taken a sensible decision by
prioritizing and focusing their effort on their three core brands in order to differentiate them
from the intense competition (Business FIrst Magazine, 2015).
5. Scenario building
a) Most optimistic scenario
Within the most optimistic scenario, McWilliam’s will maintain their aggressive growth
strategy, where they will target the Baby Boomers and focus on Millennials as a secondary
market. McWilliam’s will continue to pursue premiumisation and e-commerce, while still
providing the same beloved, premium quality wine consumers expect, which will rapidly gain
them market share in the Australian wine market.
Premiumisation will allow McWilliam’s to become market leader as consumers are
“increasingly looking for quality wines and are willing to pay more for them” (Harris, 2014).
With the excessively high demand for their premium wines, McWilliam´s will have to mass-
produce its product in order to satisfy the consumers´ needs. Thus, through developing their
premium into a masstige segment, McWilliam´s products will become net cash generators, as
market share surges and corresponding cash consumption decreases through optimal
utilization of their experience curve, meaning the ability to produce at the lowest cost.
Premiumisation will further entice their sub-market of millennials to purchase their wine, as
“17% of Millennial wine drinkers bought a bottle costing over $20 in the past month,
compared to 10% of all drinkers, and 5% of Baby Boomers” (Chew, 2016). Hence, an

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expansion and diversification of the attracted market segments will further raise McWilliam´s
sales, reducing their dependability on a single market.
Furthermore, extensive research has shown that McWilliam´s wines are currently underpriced
in relation to their offered quality. Thus, McWilliam´s will capitalize on the high demand by
increasing their product prices, in turn repositioning their brand into the premium segment as
well as solidifying the consumer perception of the winery as upscale.
In addition, McWilliam´s will focus on continuing to differentiate themselves from
competitors by promoting their history-charged character of being an authentic Australian,
family-owned winery. As they focus more on premiumisation and mass production,
McWilliam’s will invest more in digital marketing and focus on continuing to enhance their
social media and web platform. Also, as they pursue a digitalization of their wine
distribution, McWilliam’s will increase their overall brand exposure and provide an
alternative for consumers who do not want to purchase in store. By utilizing e-commerce, it
will allow McWilliam’s to “have a huge advantage with the data they receive. They will
know who a customer is and what they’re interested in. The customers are tweeting and
instagramming everything and the key is making sense of that” (Swan, 2015).
Furthermore, McWilliam’s will expand their product lines to include limited special edition
products during certain seasons and events, such as The Sydney Food & Wine Festival, in
order to gain more exposure, specifically in their target markets, and add another incentive
for more purchases. This will allow McWilliam´s to monetize the excessive demand for their
products for cash flow, inducing a maximization of their potential profit. By focusing on
premiumisation and e-commerce and targeting both Baby Boomers and millennials,
McWilliam’s will rapidly increase their profit margin and market share, as well as maintain
their reputation as a globally known and respected premium brand.

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b) Most likelyscenario
In the most likely scenario, over the next year McWilliam’s will increase its place in the
market through capitalizing on wine e-commerce and reaching out to new markets,
particularly Millennials.
Wine e-commerce serves as a major opportunity for growth and development for
McWilliam’s, particularly as its consumers´ purchase behavior is largely driven by
convenience. In the most likely scenario, McWilliam’s would continue to promote the brand,
positioned in a space, which advocates ‘premiumisation’. Focusing on growth within wine e-
commerce, McWilliam’s could take charge of the market, ahead of its competitors, by
strongly accessing the industry’s largest emerging market – the Millennial’s, who present
heavy presence in the online domain. It is predicted that Millennial’s will constitute
approximately 40% of the drinking population in ten years time (Chew, 2016).
As the brand shifts further into a distribution strategy that is more heavily within
digitalization, McWilliam’s will bridge the gap of time and space between the brands
manufacturing location and its consumers. In turn, meeting the customers demand for
convenience, particularly for the emerging market of the Millennial generation. To ensure the
effectiveness of e-commerce, McWilliam’s will have to distribute through the shortest most
direct distribution channel in order for the product to reach the consumer within an
appropriate timeframe. As a vertically integrated company, the infrastructure required is
already in place to allow for this notion of distribution to occur.
To maintain a balanced product portfolio, McWilliams will introduce question marks into
their product line by releasing seasonal limited edition products. Whilst McWilliams harvest
their cash cow scenario, these products will essentially serve as a question mark to the
business in order to ensure continued growth and to maximize potential. The questions marks
have potential to grasp new interest from new consumers as they vacate an important location
in the product portfolio. While acknowledging that this position provides no guarantee for

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success until obtaining a market reaction, McWilliams will work actively to ensure a balanced
portfolio. Moreover, McWilliams will strategically divest in such promotional products if
required to release any unsuccessful portion of the business.
In order to maintain the promotional perspective on quality, McWilliam’s will partner with
high-end restaurants, especially in hub cities. McWilliam’s will educate consumers on the
quality of their wine through the experienced sommeliers within such restaurants. This
promotional strategy will allow for effective education to the Millennial market, who are
particularly attentive to the “authenticity, history, uniqueness, production methods, and the
people behind a glass of wine” (Millennials And Wine, 2015). To capture the attention of the
well-educated Millennials, McWillams will strongly invest into the content provided to them
digitally. Particularly, spreading their education means to the platform of the ‘vinomofo’
website. Specifically, aimed to attract the millennial market and more importantly an arena
they will educate themselves before purchasing and enjoying such wines. “Millennials don’t
just drink wine differently—they learn about it and buy it differently” and together, through
the use of wine e-commerce and sommeliers, McWilliams will ensure their consumers gain
the understanding they desire in regard to their wine interest (Millennials And Wine, 2015).
Moreover, using these means for promotion and communication with and amongst
consumers, it can be assumed McWilliam’s will soon see growth and increased product
demand.
By focusing on wine e-commerce, McWilliam’s can expect to obtain increased profit margins
and increased market share through use of the cost effective, profit-generating platform.
c) Most pessimistic scenario
In the most pessimistic scenario, profit will remain stable or possibly even drop due to the fact
that Australians are drinking less alcohol in general (Millar, 2015).

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In addition, McWilliam’s wines´ success, which is based on premiumisation, might not last
due to stagnation/recession of consumer disposable income as well as other premium
Australian and New Zealand wines entering the market as competition for McWilliam’s.
Differentiation through quality can easily be replicated, inducing the loss of McWilliam’s
competitive advantage.
There is also the threat of substitution entering the Australian market in the form of craft beer,
which is an unanticipated opponent of fine vintage wines (RoppReport, 2016, para. 1-2).
Another factor that may negatively impact the future of McWilliam’s is the industry exit of
one of their main grape suppliers. This may result in an increase of supplier power overall and
costs of production, as McWilliam’s will have to source from other suppliers and may have to
accept higher prices due to their dependency on a particular grape (Cavanagh, 2016). In order
for McWilliam’s to confront this situation and correct it, McWilliam’s could merge with or
acquire grape production companies so that their supply and demand is more regulated by the
company, rather than having a dependency on suppliers and supplier demands. In Ansoff´s
terms, this vertical integration would allow McWilliam´s to control its material supply.
However, unfortunately, a vertical integration will hardly be sufficient to turn around the most
pessimistic scenario. Hence, McWilliam´s marketing strategy could be assessed as inapt, as it
was unable to yield the desired profits, thus requiring the implementation of a strategic
marketing alternative. Instead of relying on others to exit the premium market, turning
McWilliam´s into the “last man standing”, the company will conquer the leader position and
adopt a market-responsive approach, reacting to the developments in the market, namely the
decrease of demand for premium wines. McWilliam´s´ core competencies of wine production
at the lowest cost, resulting from its extensive experience curve, will be integrated into its
newly implemented blue ocean strategy. Its superiority in new product development will
enable McWilliam´s to quickly introduce its “question marks”, meaning new brand and/or
product lines.

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McWilliam´s will reduce the sophistication, complexity and lavish packaging of its wine and
eliminate the focus on prestige as well as quality competition, since attempts of differentiation
through superior wine quality yield at best ephemeral competitive advantages, as capabilities,
such as winemaking, lack rareness. This will allow the company to avoid unnecessary
inflation of its production costs, hence selling prices. Consequently, they will be able to offer
their wine, which remains of high quality, but is stripped of unwanted, cost-adding features at
prices inferior to those of competitors.
On the other hand, McWilliam´s will further raise the awareness of its origins and history,
increasing the perceived quality of its product. Moreover, their e-commerce involvement,
which constitutes a cost-effective distribution channel, will also be raised, making their wines
widely available.
The money saved through the optimization of the cost-structure will be partially invested in
marketing, aimed at establishing McWilliam´s new wines as a social lubricant. By providing
quality Australian wine at an affordable price level, McWilliam´s targets “the new market
segments of younger drinkers and women who look to fit wine into their lifestyle” (Mowry,
2015), which currently prefer beer and spirits to the over-complicated and intimidating wines.
In addition, the new wines will be heavily advertised in domestic retailers. While this will be
a major cost point, the distribution through wine retailers remains the most important
distribution channel in the Australian market (MarketLine, 2015). Hence, McWilliam´s will
be able to effectively communicate its brand/product repositioning and ensure that their
differentiation is noticed. Moreover, digital advertising will be used to create further product
awareness, without large additional costs.
Concluding, in Ansoff´s terms, McWilliams will diversify through creation of a new product
sold to a new market. By offering quality wines, which are widely accepted as social
lubricants, distributed and promoted through diverse channels at an affordable price level,

11
McWilliam´s will attract a previously untapped demand and create a market where no
competition exists.
6. Five year strategy
The direction of McWilliam´s five-year strategy is dependent on the magnitude and
permanence of the current premiumisation trend. As premium wines are generally classified
as wines sold above $20 per bottle, they require an elevated level of disposable income.
However, according to Forbes, “Australia is one of seven countries that are most likely to
suffer a debt crisis within the next three years” (Willitts, 2016), inducing a general recession
and decrease of disposable income. The trend-impact analysis, which allows, “projecting
future trends from information gathered on past behavior” (Long, 2016) can be used to gauge
the potential contraction of the premium market in case of a recession as well as McWilliam´s
corresponding actions. During the 2007-2010 global financial crisis, the Australian economic
activity dropped sharply, especially in 2008, pulling along real GDP and disposable income
(Australian Government, 2011). Nevertheless, demand for premium wines increased during
2008 (Anderson, 2015), proving the invulnerability of the premiumisation trend against
economic recessions. Hence, McWilliam´s will most likely continue to prosper under the
fertile umbrella of the premiumisation.

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7. Conclusion & Recommendations
This paper has developed scenarios and designed strategies, which essentially capitulates
enough flexibility to accommodate whatever market outcomes may occur in the future.
However, with the persistence of the ‘premiumisation’, a strong and ongoing trend, it is
recommended that the McWilliams Wine Group capitalize on the outlined ‘most likely’
scenario to uphold presence within a realistic business mentality. Moreover, within the most
likely scenario it is recommended that McWilliams invest in and exploit the emergence of the
millennial market whilst harvesting and attending to current consumers of the brand to
maintain customer loyalty and satisfaction nurture growth. Should any major trends or
external factors occur, McWilliams should make an improved and revised strategic reaction
suitable for those changes.

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8. References
Anderson, K. (2015). Growth and Cycles in Australia’s Wine Industry: A Statistical
Compendium, 1843 to 2013.
Australian Government. (2011). THE AUSTRALIAN ECONOMY AND THE GLOBAL
DOWNTURN PART 1: REASONS FOR RESILIENCE. Retrieved from The Treasury:
http://www.treasury.gov.au/PublicationsAndMedia/Publications/2011/Economic-
Roundup-Issue-2/Report/Part-1-Reasons-for-resilience
Banks, G., & Overton, J. (2010). Old World, New World, Third World?
Reconceptualising the Worlds of Wine. Journal of Wine Research , 21 (1), 57-75.
Business First Magazine. (2015). Robert Blackwell: Mc Willams. Retrieved from Business
First Magazine: http://www.businessfirstmagazine.com.au/robert-blackwell-mcwillams-
wines-ceo/3777/
Chew, J. (2016). Millennials Are Drinking More Wine Than Boomers. Retrieved from
Fortune: http://fortune.com/2016/02/17/millennials-wine-council-study/
China Wine & Spirits Awards. (2015). The Chinese Wine & Spirits Market. Retrieved from
China Wine & Spirits Awards: htto://www.cwsa.org/china-wine-market/
Halstead, R. (2014). China Wine Market Landscape. Wine Intelligence .
Harris, R. (2014). Trading up. Retrieved from Bay of fires wines:
http://www.bayoffireswines.com.au/sites/
bayoffireswines.com.au/files/pages/press/NLN, 01.06.14, Arras + Mud House + BOF +
Crofters + Eddystone.pdf
Higgins, L. M., McGarry Wolf, M., Bitter, R., & Amspacher, W. (11 2015). Winery
Distribution Choices and the Online Wine Buyer. Journal of Food Distribution
Reserach , 46 (3), S. 32-49.

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Jackson, D. (22. 06 2016). McWilliam`s driving profits for independents. Retrieved from The
Shout - Hotel, bar, club & liquor industry news:
http://www.businessfirstmagazine.com.au/robert-blackwell-mcwillams-wines-ceo/3777/
Long, M. (2016). Lecture Week 6 - Marketing strategies. Powerpoint presentation .
MarketLine. (2015). MarketLine Industry Profile: Wine in Australia. MarketLine.
McWilliam`s Wines. (2016). Launch of the new McWilliam´s Wines Appellation Range.
Retrieved from McWilliam´s Wines: http://mcwilliams.com.au/blog/launch-of-the-new-
mcwilliams-wines-appellation-range/
Millar, R. (2015). Australian wine drinking on the rise. Retrieved on 24. 07 2016 from The
Drinks Business: https://www.thedrinksbusiness.com/2015/05/australian-wine-drinking-
on-the-rise/
Millennials And Wine. (2015). A New Generation Grows Up. Retrieved from Millennials
And Wine: http://marketwatchmag.com/millennials-and-wine-december-2015/
Mowry, L. (2015). The Australian Wine Market: Opportunities and Challenges.
Reindl, S. (2011). China Market Entry of AUstralian Wine Brand "Hardys Shiraz".
Sparks, H. (23. 02 2016). A Step Change in Leadership at the Helm of McWIlliam´s Wines.
Retrieved on 29. 07 2016 from Drinks Bulletin: http://drinksbulletin.com.au/2016/02/a-
step-change-in-leadership-at-the-helm-of-mcwilliams-wines/
Sparks, H. (2016). McWilliam’s Reveals Portfolio Reductions. Retrieved from Drinks
Bulletin: http://drinksbulletin.com.au/2016/02/mcwilliams-reveals-portfolio-reductions/
Swan, D. (2015). E-commerce tops $260bn mark as more businesses log on. Retrieved from
The Australian: http://www.theaustralian.com.au/business/companies/ecommerce-tops-
260bn-mark- as-more-businesses-log-on/news-
story/ee7d27ebf143434cb805ae795651c799
Willitts, W. (28. 3 2016). Forbes says Australia is No. 2 on list of 7 countries most vulnerable
to debt crisis. Retrieved from Financial Review:

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http://www.afr.com/news/economy/forbes-says-australia-is-no-2-on-list-of-7-countries-
most-vulnerable-to-recession-20160327-gns13w

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9. Appendix
a) Summary of Assignment 1 on McWilliam´s
McWilliam´s, which is entirely family-owned and encompasses core brands, namely
McWilliam´s, Evans & Tate and Mount Pleasant as well as three imported brands, accounts
for 7.9% market share by volume, making it the fourth largest wine company in Australia.
However, intense competition and most of all, premiumisation trends in the external
environment currently impact the Australian wine industry and the consumer´s desires.
Prolonged increases in disposable income have encouraged the development of the demand
for wines sold above $20 per bottle, requiring repositioning and/or rebranding of the history-
charged and authentic Australian winery. Consequently, McWilliam´s has initiated a
rationalization process of its brand portfolio by reducing its number of brands from 23 to six
and simultaneously its number of stock keeping units from more than 1,100 to 285, “allowing
the company to gain a clear picture across the business of what its core portfolio would look
like for the next three years” (Jackson, 2016). McWilliam´s focuses on “championing the hero
varietals and styles that make NSW such a rich and diverse wine landscape” (McWilliam`s
Wines, 2016) through offering its newly launched “Appellation Range, showcasing the best
wine regions of NSW with each label featuring an original, hand painted artwork seeking to
capture the spirit of the region the wine is sourced from” (McWilliam`s Wines, 2016). With
retail prices of approximately AUD$25, these wines are well into the premium segment, thus
satisfying the premiumisation trend.
In terms of market segmentation, McWilliam´s targets both, domestic and international
markets, while emphasizing the Australian market. As for demographics, McWilliam´s aims
at middle to high socio-economic and disposable income classes, mostly belonging to the
Baby Boomer generation. They should value high quality food and drinks as well as a strong
interest in Australian viticulture and its history while seeking premium wine experiences as

17
well as exclusivity, statues, sophistication and indulgence. McWilliam´s aims at creating
perception of premium quality an proud Australian heritage.
The author identified wine e-commerce as a potentially large growth segment that
McWilliam´s could exploit in the future. While nowadays “the online wine buyer is typically
an older, married man, with a high income and is more likely to be a wine connoisseur”
(Higgins, McGarry Wolf, Bitter, & Amspacher, 2015), McWilliam´s could attract a massive
untapped demand by increasing the attractiveness of wine online distribution to Millenials,
who “make up 14% of the legal drinking population, but will grow to approximately 40% of
the drinking population over the next ten years as well as 28% of core wine drinkers”
(Higgins, McGarry Wolf, Bitter, & Amspacher, 2015).

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