Archive for July, 2010
Here is a sneak preview of what guests can expect from the speakers at this afternoon’s “Wine as a social bond: Exploring wine online communities” event. We will be taking notes, cameras and .mp3 recorders to the event and plan to share some highlights with you all via this blog.
Assoc. Prof. Barry Burgan (Head of the Business School)
Barry will provide a welcome to all attendees and provide a short background to the Business School at the University of Adelaide. He will also speak to our guests about some of the current and past wine related research projects our school has been involved with and also provide some insight into our ongoing commitment, through industry involvement across all our disciplines, to helping advance the successes of the Australian wine industry. Also a short identification each presenter.
Prof. Pascale Quester (Executive Dean, Faculty of the Professions)
Pascale is an acknowledged international authority in the area of consumer buying behaviour, with several noteworthy publications specific to the drivers of wine purchasing. She has also been involved in a number of studies related to consumer brand communities and associated ethnographic studies. She will be providing insight into how such brand ‘sub-cultures’ can be operationalised to further enhance brand commitment and loyalty and associated purchasing behaviours. This will be discussed in the context of the new ‘world’ of virtual communities and online forums of ‘consumer to consumer’ product information exchange.
Dr. Roberta Veale (Senior Lecturer in Marketing and Program Director, Post Graduate Programs)
Roberta will provide an overview of the three year GWRDC funded research project investigating the potential of wine oriented online wine based communities. This comprehensive and extensive study is comprised of several important stages involving data collection and analysis from consumers and members of the wine industry alike. Fundamental to the success of the project is the delivery of findings and implications to industry around Australia via a number of planned workshops and seminars.
Dr. Cullen Habel (Lecturer in Marketing)
A fundamental first stage of the project is an industry based survey asking members of the wine industry about their current level of involvement in online activities. Cullen will provide an overview of the components of the survey, communication of the types of information that will be collected and why and how to participate successfully.
Mr. Thomas K. Hardy (Managing Director, Thomas Hardy Wines)
The Australian wine industry faces numerous challenges in both home and international markets, with ever increasing competition and associated pressures on maintaining profits. Wine buyers, like consumers of many other products, are becoming less easy to convince by mass media advertising and traditional promotional activities. Tom will be sharing some of his own views, experiences and ideas relating to the importance of engaging wine buyers and building loyalty employing methods outside the bounds of such traditional communications channels. His reputation, experience and expertise speaks for itself and we welcome his support of this project and his encouragement to members of the wine industry to participate in the survey launched at todays event and the other scheduled activities that will take place over the next 2 years.
The New Zealand Wine Symposium
On 29 and 30 June 2010 I attended the second New Zealand Wine Symposium at the Eastern Institute of Technology (EIT) in Napier, Hawke’s Bay in the North Island, slap bang in the middle of one of the country’s premium wine-producing areas. Delegates came from NZ, Australia, USA and Canada and represented wineries, wine marketers, government agencies, universities and various industry experts, sharing thoughts, opinions and expertise on the way forward for NZ wine.
The cryptic title of the symposium was Market to Market. The themes were not so cryptic – in a nutshell – the global oversupply of wine; the deep discounting to consumers; the proliferation of cleanskins and wholesalers’ own label wines; bulk wine shipments; and the challenges and opportunities markets associated with some of the world’s key markets for wine – the US, UK and China. As a representative of the Australian wine industry, the lessons and issues for the NZ wine industry were also highly relevant for the Australian market.
So much was discussed on diverse topics, as a taster I have compiled a shortlist of key data I garnered from the two days:
- There is a global oversupply and all producers around the world are feeling it. Prices of wine and wine grapes are down for almost all wine regions and wine grape varieties. In Australia, many grape growers are pulling out vines and wineries are going into receivership. In Europe they are grubbing up 175,000 hectares over three years and have plans to phase out subisidies and simplify labels, to respond to consumer demand.
- Consumers are benefiting from cheaper wine as discounting is prevalent across the board for premium to lower end wines.
- New Zealand has successfully pitched its wines at a high price point overseas. For example, in the US NZ wine sells for around twice the price of Australian wines, and this is across the board for sauvignon banc, pinot noir and chardonnay.
- Targeting Asian markets, particularly China, is not the answer – although it may form part of the answer. China is a complex and diverse country with correspondingly diverse consumption patterns, customs, income levels, loyalty to domestic wines, and so on. With strongly growing GDP (8.5% per annum) and assumed wine consumption growth in line with GDP growth, there are huge opportunities – even the niches are large in China. But success is far from guaranteed.
- The UK and US are still key markets for many exporters – they are the two main destinations for Australian wine, accounting for more than 60% of Australian wine exports. Supermarkets feature strongly in the UK off-trade. In the US the three tier distribution system and distributor consolidation are key challenges. Both countries’ wine sales have been hit by falling incomes of consumers.
- Bulk wine shipments, wholesaler own labels and deep discounting are more prevalent than ever before in the world wine industry. There is also not a clear line between premium and lower quality wine with regard to these trends – both ends of the spectrum are being bulk shipped and both are being sold as wholesaler own labels. This represents opportunities not just concerns.
- Social networking media has a strong and growing place in the global wine market. Internet sales of wine are growing alongside this development. Understanding and embracing these trends and the various types of wine consumers will help all aspects of the wine market. See http://wp.me/pJ6Dj-1F
Author: Dr Nicola Chandler, Wine2030, University of Adelaide.
Social media as tools for business
Wine and economics have been around for a long time – hundreds, even thousands of years depending where you choose to draw the line. Social media have also been around for a long time, interpersonal communication is as old as man itself.
As an advertiser or marketer will tell you, personal recommendation is the best kind of advertising, as you tend to trust the person you are talking to more than an advertisement or the producer themselves – plus it gets your attention to focus on that particular product. Social media then provide the ultimate tools and the recent developments of social media networks such as Facebook and Twitter offer boundless opportunity for business. Facebook has over 400 million users and Twitter has 105 million – and both still rising. There are of course other online communities, but these are two of the largest and with the highest profiles.
I recently attended an energetic and fun presentation at the New Zealand Wine Symposium in Napier, New Zealand (http://wp.me/pJ6Dj-1C), by two guys calling themselves the Qwoff Boys. They emphasised the importance of communication – and in the current social climate, people want two-way communication – they want their voice to be heard. These media give people the chance to talk about what they like and want and think, and to bounce their ideas off others; join groups and focus on their areas of interest; and learn about whole new topics. Feedback is the key to social media. People don’t just want to be heard – they expect to be heard. And they want to hear what others think too.
These media give people the chance to share experiences, ideas and opinions through the spoken and written word and visual media – emails, blogs, online discussion, podcasts, photos and videos. This is the biggest audience that a company can have direct access to. Increasingly people are social networking online, doing their research online and purchasing all kinds of goods and services online. Social media opens the door to a large market. It is however important to understand the strength of ‘pull’ marketing, as opposed to the traditional ‘push’ marketing of media such as television commercials. The key is for people to become brand ambassadors, to build loyalty to the product. They become your salespeople if you go about it the right way.
On the flip side of course there are already millions of companies online, so the challenge is to establish a presence. If we are talking here about wine, this is especially true – with so many wineries online, it is important to distinguish the name and image of the company and the brand. The Qwoff Boys talk about the need to establish a personality for the company as this becomes important when you start to interact on a social level. People want to know what the company stands for, not only about the product.
Firstly, since there are a number of social media networks, it may be best to pick one or two and concentrate on those – it is an ongoing commitment to service these sites and be responsive to people about the product or service. There are a number of steps to get involved – there are several that are interlinked, and for a relative newcomer to these sites, I shall try to explain their interaction as I see them.
Let’s call the company Hip Hop Wines. The Hip Hop Wines website, blog site, Facebook and Twitter addresses are all complementary. All can exist independently but to maximise the number of visitors (and potential customers as well as brand ambassadors) the way that these media interact is crucial to understand and embrace.
Every company worth its salt these days has a website – the quality varies widey. This is a very important first step in media presence because the other media will create interest in your product and people are likely to then want to see the website. Hip Hop Wines has a lively name that gets people’s interest so look at the website – they want to see what the product is and some description of the wines, who makes it, what the brand stands for, what the logo and packaging looks like, what the company belief is. Photos of the winery, staff, some personal touches, all help the visitor to feel connected.
A point of difference is always a plus – does it have an unusual grape variety, is there something interesting about the area or the history of the winery, is the winemaker an ex-circus clown – something to make the customer feel connected and remember the brand. People love to tell stories about wine when they drink it and share with friends. I have a couple of little facts for most wineries I have visited – for example, from my visit to Champagne I remember four years on that Moet was friends with Napoleon – there is a barrel in the Moet cellars that Moet gave to Napoleon as a gift; and widow Clicquot of the Veuve Clicquot Champagne family was the inventor of the riddling table – a key piece of equipment in the making of Champagne.
On the practical side, they want to know where they can buy the wine – cellar door, outlets, online ordering. They want to be able to contact someone to ask questions. And they don’t want to have to look too hard – there are lots more wines vying for their attention. So the website needs to be informative and provide all of this information and more in a way that is interesting and accessible.
So if I have a great website – why do I need the other media? Well – if you had a great book in Dymocks, how will someone walking in the door know that your book is so great? How do you direct them to looking at your book over thousands of others? The problem is the same on the net on a larger scale.
The Qwoff Boys use social media as a core asset of their business (@QwoffBoys; www.qwoff.com/go/blog; www.facebook.com/qwoff). Twitter allows just 140 characters per message (Tweet) – enough to whet someone’s appetite and provide a link to your website, your blog, and your Facebook page. On your blog you can write and post images, podcasts and videos of whatever you like and as often as you like – reviews of new releases of Hip Hop Wines, medals that your wines have won, a new logo, a new range, a food and wine review with one of your wines, anything that may be of interest and give you a reason to tweet. People read the blog and may well start to follow your blog and see whatever you say in future.
Facebook had the business and personal page option. You want people to add you to their favourites and then receive updates when you write them. In your updates you can include videos and photos and links to blogs and the website – the Hip Hop Wines Facebook page should have key information points displayed prominently, such as the logo, winery name and address and contact details, photos, and links to interesting information about the company and the wines. It needs to hold the visitor’s interest – one click and they are looking at something else and someone else’s product.
On Twitter people start to follow you; on Facebook people start to follow you; on your blog people start to follow you – and the website is just one element in this whole media Rubik’s cube. All are inextricably linked – or should be. Each medium can and should link to the others. The website page can have links to Facebook, Twitter and blog pages and even quote tweets that are positive about the product. The interlinkages are too numerous to describe.
It is genius when you stand back and see it all working. I am still quite in awe of it myself and have explained it in a simple way so that it is clear.
The important thing to remember is that it is a two way conversation – therefore once you commit to these media, you must be dedicated. You must respond to queries or people will lose interest in Hip Hop Wines and choose something else where they feel they are being listened to. Keep a presence – set yourself a target of posting something new at least a couple of times a week, for example, so people do not get bored. If you have nothing new to tell, suggest a wine and food matching or chat about something you read or heard. Or ask your followers to tell you something – maybe ask them what they think would go best with you dinner tonight of duck fillet and orange sauce. Then answer them when they make suggestions. People want to be heard.
One other point to note is that if you want people to follow you, you also need to follow others – the principle of reciprocation, sharing and two-way communication. You need to be involved in conversations and to have a presence that is not just selling your product – remember the pull marketing. It takes time to establish a following and it needs an ongoing commitment.
Social media offer a minefield of opportunity. As the Qwoff Boys say – if you get this right, establish a presence, stay friendly and informative and respond, keep conversations relevant, and rely on pull marketing rather than push – these media will work for you. You will have your own army of brand ambassadors.
Author: Dr Nicola Chandler, Visiting Research Fellow, Wine Economics Research Centre, University of Adelaide.
Wednesday, 21 July 2010, 3.30pm.
National Wine Centre , Hackney Road, Adelaide
Wineries – Participate in our Industry Survey on Wine virtual Communities. Ten minutes or so – and you’ll be amongst the first to get the new insights about what’s going on in the industry! http://adelaide.qualtrics.com/SE?SID=SV_7OL9vlAbXK0NIFu
Full Invitation details to the launch can be found here.