The need ... or not ... for wine discounting

[Roy Hersh]

http://www.winesandvines.com/template.c ... %20Problem

What do you think of the premise?

[Moses Botbol]

There's nothing novel in her ideas and her ideas translates to many consumer items.

I'd like to see more direct wine sales, even if channeled through the 3 tier system. I think it would be quite easy for the consumer to talk to the winery and then product follows it’s normal channels right to the local B&M or shipped to consumer. Importers & Distributors could stand to make a smaller margin as the product is “paid for” and they are simply moving packages.

[Roy Hersh]

There is one large stumbling block to that line of thinking and it is called, WSWA.

[Mahmoud Ali]

I don't think much of the article. Here are a few points to consider:

• Still, invest in and partner with the millennial generation. Use marketing strategies that have buzz, like Greyhound’s new Bolt Bus division that uses social media for marketing and offers $1 tickets from Washington, D.C., to Boston to the earliest customers to reserve.


What possible relevance has this to fine wine and luxury goods? There are plenty of cheap wines on the market (is Two Buck Chuck still around?) so that can't be what she is talking about. Is she suggesting that the first buyers of a wine gets a discounted price, early shoppers in the store gets the wine for a dollar? Something like a door crasher but with extra stock at regular price for the latecomers. I suppose the last case of wine will have a premium attached to recoup the money lost on the early buyers.

• Develop a product line with good, better and best tiers. “It’s a good time to up your price at the best end, and find an improved good-better-best scale.”

Most wine producers already have three or more tiers of wine products. Port producers have VP, SQVP, and LBVs; Tuscany has it's IGT, Chianti Riservas and regular Chianti not to mention Brunello's Riserva, regular, and rosso; Chablis has three tiers; Barolo has it's single vineyard wines, regular Barolo, and Nebbiolo Langhe; etc. Even Chateau Musar has three tiers of wine. I think all fine wine buyers know about the "good-better-best" scale and would love to have the best wines if they could afford it. The comment about increasing the prices of top-tier wines will sound ridiculous to most wine lovers. Wineries who can raise the prices of their best wines have mostly already done so.

• Try new packaging. For people who can’t remember milk in glass bottles, glass is a cool package for milk. Maybe box wines or other options are cool to consumers who’ve seen nothing but glass.

Box wines have been around for some time now. Is it at all likely that buyers of fine wine will look at cellaring box wines? What about the sediment, will there be a filter in the spigot to take care of that? How about decanting a young wine for aeration? Here's a case of a marketer who probably knows very little about wine let alone fine wine.

• Trade vertical integration for virtual integration. Maybe every wine company doesn’t need to own its vineyards and production facilities, she said. “Hermes and Louis Vuitton don’t raise their own alligators.”

I suppose she hasn't heard of negociants who buy-in grapes and wines, or cheap supermarket wines with a P.O Box address on the back label. Hermes and Louis Vuitton sell bags and shoes, not alligators. Wineries don't sell grapes, nor do they make their own bottles or print their labels. This point alone proves how little the author knows of the wine industry and how shallow her logic and thinking is.

This is an example of a marketing "expert" who believes that any marketing that works in one area can be applied indiscriminately in another. I think pretty much everything in the article can be ignored.

Perhaps the only line that made sense was the line about “discounting is not really the problem, but a symptom of the problem.”. Yes, discounting takes place because of the problem of slow sales. It used to be called supply and demand. Now it requires an expert to point it out!

Cheers..............................Mahmoud.

[Roy Hersh]

Mahmoud,

Your read on the article and author were considerably more fun to read than the original piece. Thanks!