Customer Loyalty and Lifetime Value - Example

Marketing plan Executive summary The Wellington pty Ltd is a winery company in Mudgees region in New South Wales that deals in the manufacture and sale of two brands of wines: sauvignon blac and the chardonnay. Following the results of the last financial year, the management wants to increase the sales volume by 15%. The management has set out to increase product awareness, brand managements and create customer satisfaction in order to reach its goal. The objectives will be achieved through the development of a website, a blog and an online store and marketing through social media and in collaboration with most of other hotels. These strategies were chosen after consideration of the needs of the target market that is tourist in the Mudgees area. The plan is envisioned to take approximately six months with the involvement of the finance, marketing IT and the operational departments and overseen by management. In order to measure the effectiveness and the efficiency of this strategy, Wellington will carry out a market share analysis, marketing budget control, customer feedback reviews and the sales analysis over the same period. Current situation The wellington wines pty is a winery located in Mudgees, the west of Mudgees the company. Currently Wellington deals in two products: the sauvignon blac and chardonnay all packaged in 750ml bottles that are being sold through supermarket chains and independently to consumers. This is the main avenue for making profits for the company. In the last financial year the company recorded sales revenue of $50 million AUD, of which 2% was allocated for the marketing department. In the same year, the average sale per dozen for its wine was$120 AUD. The sale points are supermarket and independent contracts and in the FY 2015, wellington had a trade mark up of 30% form the supermarket. Objective and issues The objectives of the marketing department are informed by the issues that the department considers being influence to the financial results of the previous year. The issues mainly stem from the sale volume, that were very low and the product awareness of its products. Hence the primary objective of the marketing plan is to inverse sales volume by 15% in year 2016/2017. The marketing department has also envisioned that the amount of sales will improved only to the extent that there are more people who are aware of their products. Therefore we marketing plan will also outlay the means through which we can increase the product awareness of our wines. The Wellington wines also seek to establish a brand that will be known to all consumers. This is in attempt to ensure that consumers are always reminded that there is a brand of wines that are produced in the wellington winery and the uniqueness of the product. This will be achieved simultaneously to a need to capture a market that is currently being serviced by the other wineries. Target market, customer analysis and positioning The most notable market for the Mudgees region wines is tourists who on most cases were interested in getting the wines and food experience of the south wales. The Tourism Research Australia (2015) report shows that in the period 2012-2014, 13% of the food and wine visitors who came to NSW came to Mudgees region. The hunter valley was the most visited destination in that year followed by Blue Mountains. The demographic features of the visitors showed that a large portion of the visitors travelled as a couple while those that travelled as a family were the same in quantity as those who travelled as friends. Furthermore, the distance of travel influenced the destination of choice and the time of year was also considered with most visitors coming in during the spring season. The survey informs the management that the target market for the company would be the tourists who come in Mudgees. The other customer segment that the company could benefit from is the hotels within the area. This is in the regard that Mudgees area is known for its wine varieties and hence the hotels and restaurants would keep some of the local produce in their menus. Therefore the marketing plan will also target restaurants and hotels in which the tourists most liked. The primary target customer segments for Wellington wines will be the tourists that visit Mudgees yearly. Most of these visitors most likely visit the regions that are most likely near their homes but wellington would like to attract tourists from other areas. Most of these customers need a place where they have authentic Mudgees experience either through the food or local produce (Tourism Research Australia 2015). The rate and frequency of visit was also influenced by how easy it was for the tourists to organize that trip, accommodation facilities and customer service. This is where the second target market comes in. though Wellington will not be able to provide these services through the restaurants and hotels that would provide accommodation to the customers. This is so especially because more 30% of tourists would prefer to stay for more than two nights for the trip (Tourism Research Australia 2015). The market positioning of a company is usually dependent on the size of the market and the competitors, as well as the segmentation of the target customers: The needs and wants of the wellington’s target market are based on the experience that they seek to achieve form their travels. This is based on the foods and wines that they partake and purchase. Currently, Wellington wines provide the best experience of the Mudgees in terms of the wine experience. This gives Wellington wines a competitive advantage over other wineries. Moreover, the company produces two of the best and most popular wine varieties in Mudgees (Wine Market). The positioning of the company is also determined by how the company relates to its customers. The Wellingtons wines plan to increase its customer service experience and have customer intimacy that makes to customer wants to deal with the company in more way than one. Marketing strategy The marketing strategy of Wellington is designed to achieve the goals that the company had initially planned. These objectives include: brand managing, increase in sales, product awareness. The strategy that is applicable for Wellington Wines will be based on its target market that is the tourists. The main product of Wellington is wines and local produce but the needs of the target market expand to accommodation and memorable food and wine experiences. Therefore the company will include a plan to capture the travel needs of tourist. The customer service and customer intimacy strategy will also be developed: more specifically a relationship marketing strategy with be a focus on customer loyalty and retention strategy. Customer retention has been proven to be instrumental in increasing profit margins (Zhang et al). The marketing strategy mix will focus on the product, price, position and promotion (business Victoria 2017). Specifically, Wellington seeks to include wines, local produce and accommodation services as part of its product line at affordable prices compared to its competitors. The position of the company’s products will be entail strategy to use the internet and social networks as a selling point as well as promotional service. Brand management objective will be achieved through promotion of the brand in either participation in festivals or Marketing Plan It is the objective of the company to apply its marketing strategy in order to achieve its marketing goals. The plan will be the roadmap for which these strategies will be implemented. Product: the main product of Wellington is wines and in the best quality which represents the rich culture of Mudgees the bottle will be repackaged to include a scenic view of the region to make it known to tourists how beautiful the region is. Wellington also seeks to introduce small wine bottles that will be included in the takeaways packages as part of creating customer retention. Pricing: the price of a product or service serves as the backbone to breaking even and influences the sales volume. The pricing of the wine bottles will not be drastically changes as they are in line with the industry prices. However, the small wine bottles will be on sale as well and they will price as 45% of the 750ml bottle price. Promotion: the technological advancements of the 21st century have made it easier for marketing. The wellington wines will include more resources into the development of an efficient website to increase accessibility. The Tourism Research Australia also recommends that an efficient of the website will have an advantage to wineries. Furthermore, in order to meet the travel needs and accommodation issues of its target market, the company will develop a blog on the site. The purpose of the blog will be to identify to its customers some of the most scenic places to visit, the accommodation facilities and activities that they take part in. this will also help penetrating the market in other states other than NSW. The social media networks will also be an efficient place for the promotion of our wines. The sites will also be used in the development of a customer service that is most likely to influence the retention and loyalty of the customers. There will also be use of direct mails to the previous customer and new customers on the services available and aby changes that would be introduced. The bi monthly emails will entail all events that Wellington will be taking part in as well as other promotional services available to the customers. Position: this plan will entirely be for the purpose of increasing the selling points of the company’s products. In the age of advanced technology, the company seeks to develop an online store where customers can directly order from them and the product of choice will be delivered at their own convenience. This has proved to be successful for other companies such as eBay and Alibaba that work entirely online. The social networks are also an efficient mechanism for the sale and distribution of its products. However, the traditional means through which selling of its product will not be ignored: the supermarket chain will be held and further, the individual contracts most especially to restaurants and hotels. Financial and operational plans The objectives of the company cannot be achieved without digging into the finances of the company. Therefore the operational plan will be used to guide the implementation of these strategies. Presently, the company has allocated 2% of its sales revenue for the marketing budget therefore the amount will be increased from the purpose of achieving this marketing strategy. The financial requirement will be used for the acquisition of web developers and employing staff to manage the online store and the social media staff. Moreover, an introduction of the small wine bottles is accepted to increase the manufacturing costs of the company. In totality, the responsibility of achieving the marketing strategy falls fully on everyone in the company. The product rebranding and development strategy will be handled with the production departments in collaboration with thaw marketing team. The IT department will be solely in charge of the development of the website, online store and the social media networks. However, the human resource department will be charged will the acquisition of staff for the management of these networks. The marketing team on the other hand will presumably head the content of promotional programs for the sites as well as the participation in the festivals and shows such as the Mudgees wine show. The management will be responsible for overseeing the smooth transition and collaboration of these departments. The management expects that these tasks will be rolled and take operation within six months of their initiation. The sites should be up and running within two month following the finance department approval of its estimates with the recruitment of staff will run concurrently. The staff will have to be experienced personnel in order to reduce the training period to a maximum of 2 weeks. Metrics and implementation control The implementation of strategies will span over a period of 6 months and this time the management will be monitoring the progress of strategies in achieving its goals. The goal of sales revenue will be measured using the profit generated, through a sales analysis, as a result of the web strategies and marketing on social media. This will be measured against the expenses incurred in their implementation. The marketing budget will also be helpful in determining if the strategies are helpful or not. The brand recognition objective will be evaluated based on customer feedback from online surveys and their responses to the emails. This will also be reflected on the market share that will be held by wellington at the end of the six month period: market share analysis. References Business Victoria marketing strategies and tactics online 2017: www.business.vic.gov.au/marketing-sales-and-online/increasing-sales-through-marketing/marketing-mix-strategies-and-tactics 16 Feb 2017 Tourism Research Australia January 2015 food and wine tourism in New South Wales Wine Market Mudgees online, 2017 www.winemarket.com.au/blog/nsw-mudgees 16 Feb 2017 Zhang Jason, Dixit Ashutosh and Friedmann Roberto. “Customer loyalty and lifetime value: an empirical investigation of consumer packaged goods” journal of marketing theory and practice vol 18(2):127-140 Read More