Marketing for Wines - Hong Kong - Case Study Example

MARKETING FOR WINES (Course Instructor) (University Affiliation) (Student’s Name) Date Table of Contents Table of Contents 2 Introduction 3 2010 Clarendon Hills Astralis – A$450.00 each (other vintages available) 4 2012 Cullen Vanya Cabernet Sauvignon – A$350.00 each 5 2002 Greenock Creek Roennfeldt Road Shiraz – A$599.00 each (other vintages available) 5 2004 Penfolds Block 60A Cabernet Shiraz – A$699.00 each 6 2010 Torbreck The Laird Shiraz – A$699.00 each (other vintages available). 6 2005 Jim Barry The Armagh Shiraz – A$250.00 each 7 2002 Torbreck Run Rig – A$299.00 each (other vintages available) 7 Conclusion 7 Bibliography 9 Introduction Hong Kong is emerging as one of the fastest growing wine markets in the world in the re3cent past following the scraping of the city’s wine taxes in 2008. The growing population made up of majorly the expatriates as well as a huge number of tourists make up the main consumer base for the consumption of Hong Kong. There is an increasing number of local and middle class Chinese population who considers wine consumption as a healthy and a prestigious lifestyle leading to a steady increase in the size of the Hong Kong wine market (Australian Trade and Investment Commission, 2016). The gift packed wines are also offers a great appealing to the millions of the mainland tourists who visit the Hong Kong city. Australian wines have in the recent past made strong inroads into the Hong Kong city wine market with the quality of the wine the regional identity gaining a major recognition amongst the consumers more so the consumers. The Australian wine has greatly expanded the share of the market in relation to other European wine makers like France over the past decades to become the number two supplier of grape wines to the city of Hong Kong over the past 16 years. In terms of volume, the city of Hong Kong imported 50 million liters of wine in 2013, a slight of 0.8 percent from 2012. In 2014, the wine imports grew by 1.8 per cent in relation to the same period in the previous period (Dewald, 2003). The wine market in Hong Kong is certainly growing, and more wine companies need to venture to get a sizeable share of the market. This report looks into the suitability of a number of wine brands into the Hong Kong market. 2010 Clarendon Hills Astralis – A$450.00 each (other vintages available) The wine was first vintage in 1994 with an initial production of 150 cases. The Astralis that is used in the manufacture of the wine was fast planted in the 1930’s on a mix of ironstone, clay and gravely soils. The story of Clarendon Hills is one of passion, dedication and one that is committed to exceptional wine. First produced by Roman Bratasiuk in 1990, the wine was produced based on the preferred style of the producer himself (Chris & Annie, 2014). Based on a benchmark of the French traditional wines the wine brand has been hailed for its exceptional taste. In fact roman was among the first wine producers to use only the French oak, where it spends one and half years in 50 percent new and 50 percent seasoned tightly kept French oak barrels. Most of the Clarendon Hills range is meant majorly for overseas consumption and are rarely found in the Australian markets. The other vintages are 1994, 1995, 1996, 1999 and 2006. The wine has a prospect of gaining an acceptance in the Hong Kong market. The price range is well suited to the middle class Chinese from the mainland china that is famed for their love for the vintage wines (Chris & Annie, 2014). The other contributing factor for its suitability for the Hong Kong market is the fact that the brewers do not necessarily need to satisfy the Australian wine market since most of it is exported to the United States of America and other European countries. 2012 Cullen Vanya Cabernet Sauvignon – A$350.00 each This brand of wine represents everything that one would be looking for in wine manufactured by Cullen, the climate, the land and the vines that the family has nurtured for the 44 years at Cullen wines. Vanya is a certified biodynamic fermented wine with no yeast, acid, malolactic cultural additives, filtration and fining. The wine has been aged one year seven months in the 50% new oak. At the initial launch of the product, sales were only restricted to the first 450 purchases from the general public. The wine is majorly found in the shelves in most parts of western parts of Australian where the Cullen brands of wine control a sizeable size of the market (Pomarici, 2016). Worth 350 dollars per unit, the price serves the consumers who have an elastic demand curve. This would mostly comprise of the low income immigrants, most of whom are victims of human trafficking in Hong Kong. The wine would not be suitable for export to Hong Kong owing to the fact that the brand is yet to find acceptance in the domestic market. However, with time the brand will penetrate the Hong Kong market due to the economies of scale that the parent company enjoys (Pomarici, 2016). 2002 Greenock Creek Roennfeldt Road Shiraz – A$599.00 each (other vintages available) This is a classic vintage in much of South Australia with a slow and long ripening period. People have been waiting for the brand with a lot of excitements. It is thought that the wine will take a long time to bring down. After all those years in the market, the wine’s tight American oak is still noticeable with everything else remaining constant mostly liked with the 1980s vintage. The wine is worth 599 dollars each (Hooke, 2010). The brand can easily be exported to Hong Kong. The Hong Kong wine market is expanding partly due to the increasing population and the popularity of the Australian market in Asia. The price of the wine is suitable to the trendy individuals mostly the expatriates working in the city from most parts of the world. 2004 Penfolds Block 60A Cabernet Shiraz – A$699.00 each The brand is a blend of Goonawarra cabernet Sauvignon (56%) and Barossa Shiraz (44%). The bled is supposed to have a minimum of 30 years of aging potential and a true collector of many years to come. The wine is perfectly formulated and well balanced and is one of the greatest wines. Its dense aroma is still focused and backed by undertones of black and white pepper. The price of the products suits the well off Chinese from the mainland china that is famed for their love for the vintage wines. The other factor for its suitability for the Hong Kong market is the fact that has a brand name that can easily penetrate the Chinese market (Hooke, 2010). 2010 Torbreck The Laird Shiraz – A$699.00 each (other vintages available). Torbreck launched what it believed to be the most expensive modern Australian table wine worth 699 dollars. 2005 Torbrek the laird Barossa Shiraz is expected to increase its price up to 730 dollars. The wine is made from grapes planted in the 1950s, a concentrated fruit that has left a mark amongst its consumers. The wine spends 3 years in Dominique Laurent barrels and another two years in the bottle before it’s released. The wine has 14.8 percent alcohol content. The wine received a lot of orders in Britain and other European countries. It is expected that the brand is going to do well in Hong Kong because of its classical taste and the fact that it suits the high income earners mostly the expatriates in the city (Hooke, 2010). 2005 Jim Barry The Armagh Shiraz – A$250.00 each The wine is a beautiful bouquet whose fruits are dark forest, minty, chocolate and vanilla. On the palate is a concentrated and beautiful wine with lots of spices black berries, good acid levels, mild tannin and beautifully dosed oak. The price of the wine is pocket friendly suited for the low income earners and this wine would be suitable for the low income earners at the Hong Kong city. The average rating of 93.1 percent amongst its users is a good sign that the brand is good for the Chinese consumers. With the increasing market of the wine market in Hong Kong, it is expected that the wine will easily penetrate the market more so because the people of the city have shown a high affinity to the grape wines (Hooke, 2010). 2002 Torbreck Run Rig – A$299.00 each (other vintages available) The 2002 run rig is a representation of the old vine Barossa fruits with 97 percent shiraz and 3 percent viognier aged in 100 percent new French oak. The wine is ranked as one of the most remarkable wines in the north and the south of the hemisphere. The wine is incredibly full sweet and rich with wild purple flavor sensation and is regarded as more than the elderberries. One of the cheape3st wines in the market. 2002 Torbreck Run Rig is one of the cheapest wines in the Australian market and could explain why the product is very popular. It is expected that the brand is going to do well in Hong Kong because of its classical taste and the fact that it suits the high income earners mostly the expatriates in the city (Lanphier and Stoeckl, 2006). Conclusion The Hong Kong wine market is gradually expanding due to the wine savvy nature of the Hong Kong residents who partly believe that wine is good for their wealth. This has therefore presented a good opportunity for the Australian wine makers to venture into the expanding market. The success of any wine import according to this report depends on its success at the domestic market. Some of the brands will most likely make it while some might not. This is because of the parameters that determine the prospects of the wine to penetrate the market. This includes the economies of scale, the taste, the brand name and more importantly the price of the product. It is for this reason that the paper has picked a number of wine brands in the above wine lists to ascertain the possibility of succeeding in the Hong Kong market. Bibliography Australian Trade and Investment Commission 2016, Wine to Hong Kong. Available at: http://www.austrade.gov.au/Australian/Export/Export-markets/Countries/Hong-Kong/Industries/wine (Accessed: 18 Oct. 2016). Chris, Li & Annie, Lai 2014, Hong Kong wine market 2014. Available at: http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Hong%20Kong%20Wine%20Market%202014_Hong%20Kong_Hong%20Kong_2-12-2014.pdf (Accessed: 18 October 2016). Dewald, B 2003, ‘Wine consumption in Hong Kong’, International Journal of Wine Marketing, 15(1), pp. 54–68. doi: 10.1108/eb008752. Hooke, H 2010, Torbreck claims most expensive Australian table wine title. Available at: http://www.executivestyle.com.au/torbreck-claims-most-expensive-australian-table-wine-title-150kr (Accessed: 18 October 2016). Lanphier, F and Stoeckl, N 2006, ‘Australian wine exports and the AUSFTA’, Journal of Wine Research, 17(3), pp. 173–184. doi: 10.1080/09571260701286593. Pomarici, E 2016, ‘Recent trends in the international wine market and arising research questions’, Wine Economics and Policy, 5(1), pp. 1–3. doi: 10.1016/j.wep.2016.06.001. Read More