Essay on Marketing Strategy of AFC Longview LTD

Introduction

Longview wine was started in the year 1969 by the Vuletich family after moving into the New Zealand from Europe. The company committed itself to produce wine made from grapes in the country to what today can be referred to as AFC Longview Estate. The owner of the company resolved to plant grapes for precious wine production at Whangarei in New Zealand. AFC acquired ownership of the company in the year 2016. The new owner of the Longview farm has embarked on a marketing campaign in China, which is his home country. Few companies in New Zealand are producers of expensive wine, echoing the opportunity that AFC Longview has. Examples of varieties of products that the company produces include Cabernet Sauvignon, white diamond, syrah and e Reserve Gewurztraminer, among others. The main aim is to establish the efficacy of the marketing strategies that the company is applying. Moreover, it is critical to find out how the company’s success can be improved in a bid to capture more market share. As such, the paper will focus on AFC Longview Estate in New Zealand as a wine refinery. The eventuality of the study is to come up with appropriate strategic measures that can enable the company to gain a competitive advantage worldwide. An analysis of the approach Longview Estate applies over its competitors is also a critical factor that the paper seeks to examine.

Scope of the Project

Longview Estate, as already noted, started way back in the year 1969 by the Vuletich family in Northern New Zealand. The vision of the company is to produce the best sweet white wine in New Zealand. At the start, the company was making approximately 50-60 k New Zealand dollars annually. Longview Estate applied a simple marketing strategy at that time to ensure that its objectives are met in the market. The approach incorporated the product, which was White diamond and port at that time. Every bottle of white diamond wine retailed at $30 while a bottle of port was sold at $40. The target group for their products included the residents, and there was no promotion done at that time. In the year 2016, Longview Estate was sold to AFC holdings group, which is the current owner of the organization. Change of company ownership has led to a change in the marketing strategy of the winery. According to the new owner of the company, there is no change in product quality. However, the price of one bottle of white diamond wine increased while the rest retail at the same price as before. The company plans to change its current marketing strategy in a bid to promote global expansion of the company. These include a change in the pricing policy, product differentiation, worldwide expansion and promotion for their product. The target consumer for such product targets club members globally who love wine, unlike the previous strategy that targeted the local community in New Zealand.

Purpose of the Study

The aim of conducting this study is to establish the link between marketing strategies and the effect that they have on the current business world. In marketing, the application of different approaches causes different outcomes for companies involved. For instance, Longview Estate is one company that has felt the effect of changing marketing strategies for its operations. As such, studying their approach in marketing and the results that they have on their market share is a point of interest.

The report will feature the marketing strategies used by the company and how they have impacted their operations. Moreover, a focus on the financial benefits that have accrued to the company overtime will be used to access the progress made by the company. In essence, the study aims at ensuring that some questions regarding the company have been answered. They include:

1. What marketing strategies does the company apply?
2. What impacts have the strategies had on company operations?
3. Are the strategies effective?
4. What can be done to improve the current state of the company?

An oversight into the company’s operation since AFC took over is vital to establish the effect of the new marketing policies applied by the company. As such, four Ps marketing mix analysis is necessary for this particular report.

Preliminary Literature Review

Vineyard management is one challenging factor in maintaining healthy vines in the market. AFC Longview has made significant steps towards ensuring that consumers have sweet and precious wine for consumption. The company applied no promotional strategy in marketing for their products since they aimed to sell locally. A bottle of a precious white diamond wine was priced at $30, which has since then changed to $598 with the new management of the vineyard. Studies indicate that the company is the oldest in producing quality wine of over 50 years in New Zealand. Growing grapes for wine is not an easy task, and the company has ensured that it understands its system in cultivation and brewing (Overton, Murray & Howson, 2019).

Longview Estate was a constituent of the AFC from 2016 when Vulitech family offered to sell it to AFC. Initially, the company did not apply any promotional features on their products and the need for expansion necessitates the use of such marketing strategies to capture more market. The new Chinese owner has resolved to expand the business to China, where it has gained much popularity. The turnover of the company indicates how well the company has been doing in the industry. However, it is essential to note that ever since the new management took over from the Vulitech family sales have been reducing.

Financial records of the AFC indicate a decline in the revenue that they are obtaining from their operations. The firm can produce over 18,000 litres of wine in one year. Varieties of wine that the company provides for the market include Gewürztraminer, white diamond, cabernet Sauvignon, Merlot and Chardonnay. White diamond, Gumdiggers Port, Chardonnay and Merlot Cabernet Franc Malbec-Syrah are some of the most popular brands of wine that the company produces.

The marketing model used earlier by the company might not be the right choice for the organization right now. The new management focuses on promotion as a way of ensuring that they capture a large portion of the global winery industry. The marketing sector is dynamic and requires creativity for it to make an impact. Promotions are a key part of marketing in a company as they remind customers of the existing products in the market. They persuade buyers on behalf of the company. AFC Longview asserts to use 4Ps strategy to persuade and convince customers (Baird, Hall & Castka, 2018).

Marketing Mix Strategy at AFC Longview

Marketing mix Ps strategy is a vital tool that can help AFC Longview to promote their products and increase sales (Baker, 2016). The strategy will help the company satisfy the needs that customers want, thereby, remaining relevant. As such, Longview estate can increase their market share by employing the 4Ps mix in managing its global operations. Introduction of the products in the Chinese market has not taken effect yet due to low promotional activities. The marketing mix contains four factors that include the product, place/location, price and promotions that are done.

The product is the most important factor in any industry. AFC Longview Estate has not changed the quality of their products to something else. The products existing in the market are of high quality than those of their competitors, especially in New Zealand. A company that produces anything less than the interest of the consumer is irrelevant in the industry. As already noted above, the major products that the company produces include White Diamond and port wine. Additionally, the company should aim to differentiate their products to align with the needs of consumers, especially in China. The new owner of AFC Longview Estate is Chinese and should embark on a serious marketing campaign. Product differentiation is crucial to a product in a market that is multicultural, with different racial orientations. It is the role of the company management to ensure that products for the Chinese market are of the same quality and importantly, be able to meet the consumer’s needs (Ozdemir, Sessiz & Pekitkan, 2017).

Price is another critical factor that can be used to manipulate sales in the new Chinese market. For instance, a bottle of White Diamond was initially sold at $30, which changed to a whopping $598 with the new management. The price is relatively high, and there is a need to review it regardless of the wine being executive. The rest of the other products, such as port-wine have maintained their price at $40. The high price of white diamond is due to some reasons. First, the bottle has been sold before for $2000 in Nanjing city by a businessman. This means that the Chinese market is able and can afford to but the wine at that price. Second, AFC Longview is the only company producing this type of wine in the New Zealand. Third, there is a limited production of such wine globally due to the requirements for growing grapes, which comprise the most important raw material. Lastly, the wine has lately become popular in China following its expansion to the foreign market (Cruz & Alley, 2017).

Place or location where the product is going to sell is another important aspect of the marketing mix in any multinational organization. The Chinese market, which has captured the attention of the company, is an ideal place to expand their market. This is because the market is already aware of the existing Longview Estate products. It will require the company to conduct a thorough feasibility study of the market that they would want to expand their operations. A feasibility study will enable them to determine the viability of their operations and approximate the financial implications attached. Selling a product to a market with low demand will lead to losses. AFC Longview Estate has expanded globally and needs to assess the suitability of its products in satisfying the needs of consumers. For instance, the Chinese market has proved to be viable for AFC Longview products and a test on other global markets might prove to be helpful.

Promotions are important in persuading and convincing a customer to go for a particular product. Initially, the company did not employ any other form of promotion as it operated locally within the home country. Introduction of the products to the global market requires the company to increase its promotional activities and budget. There are different types of product promotion that the company has to its disposal. First advertising is a common practice in marketing as it helps create awareness of an existing product in the market (Haynes, 2016). Advertisements can be made on radio, live television, magazines, billboards and newspapers. Second, public relations are a factor in product promotion, especially for companies that are operating globally. As such, the company should aim to maintain a good public image. Internationally, the company should comply with business regulations within the foreign territory, especially within China, where it has taken effect. To maintain good public relations means participating in social responsibility programs within the society, complying with legal requirements and ensuring professional customer service.

Third, personal selling and digital marketing have become common in marketing. This can be done through celebrities, donations and sponsorships. Promotions can be done heavily in the home country and foreign markets in a bid to ensure that their market share rises. The target consumer for the company currently includes clubs and other entertainment centres, which will, in turn, retail it to consumers who visit those places. With an improved marketing strategy for the company, there is a possibility of the company acquiring a larger share of the market (Ramanathan, Subramanian & Parrott, 2017). Celebrities and other public figures can be used as a way to attract more traffic, especially for digital marketing. AFC Longview is expected to apply the 4Ps Strategy to ensure that their product sells in the global market (Ryan, 2016). Digital media can play a key role in the promotion of the company’s products. Wine testing events should also be introduced in the new markets as a way of capturing more clients. Tourist agents can also play a key role in ensuring that tourists get the opportunity to taste the wine. As such, promotions can easily achieve their intended purpose. Social media marketing also can prove helpful in creating awareness about the product. Places such as Bay of Islands and Queenstown are tourist centers that the company can take the wine for testing.

Conclusion

In conclusion, AFC Longview Estate refines precious wine for the New Zealand and global market. The report well analyzes the marketing mix that the company is applying to remain relevant in the international market, especially in China. The four marketing Ps that are vital when establishing a product in the market include the product itself, price, place and promotional attention accorded to the item. The new owner of AFC Longview Estate has shown intentions of expanding further internationally, making relevant the marketing mix strategy.

References

Baird, T., Hall, C., & Castka, P. (2018). New Zealand Winegrowers attitudes and behaviours towards wine tourism and sustainable winegrowing. Sustainability, 10(3), 797.

Baker, M. J. (2016). What is marketing?. In The Marketing Book (pp. 25-42). Routledge.

Cruz, J., & Alley, C. (2017). An analysis of how future investors and small financial institutions in New Zealand can avoid the effect of double taxation on corporate profits.

Haynes, P. (2016). The Critical & Cultural Marketing Mix. Marketing Mix (February 2, 2016).

Overton, J., Murray, W. E., & Howson, K. (2019). Doing good by drinking wine? Ethical value networks and upscaling of wine production in Australia, New Zealand and South Africa. European Planning Studies, 1-19.

Ozdemir, G., Sessiz, A., & Pekitkan, F. G. (2017). Precision viticulture tools to production of high quality grapes. Scientific Papers. Series B, Horticulture, 61.

Ramanathan, U., Subramanian, N., & Parrott, G. (2017). Role of social media in retail network operations and marketing to enhance customer satisfaction. International Journal of Operations & Production Management, 37(1), 105-123.

Ryan, D. (2016). Understanding digital marketing: marketing strategies for engaging the digital generation. Kogan Page Publishers.