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Market Segmentation In The Wine Industry Marketing Essay

Market segmentation is the business needs of the marketplace diversity and differences of consumer action, all current and potential customers in the complete market, categorized as a number of similar characteristics of the customer groups, in order to determine their marketplace. It helps wines companies understand consumer requirements and then satisfy them. The basis of consumer market segments and business market sections will be reviewed in this article. You will find four important standards need to be considered: geographic, demographic, psychographic and behavioral segmentation. In your wine industry, marketing segmentation has great relevance for wine companies and marketers. For instance, based on era segmentation or income segmentation, after understand consumers, wine beverages companies can get the consequence of their objectives or marketing strategic. When building a new wine beverage company, the first factor is the marketplace target. Wine manufacturers must make a decision what segments they need. So are there three aspects experienced to think when wine beverage marketers assessing market segments: size of the segment and expansion rate of the section, segment structural appeal, and company targets and resources. Finally, marketing segmentation has positives and negatives in wine beverage industry.

What is market segmentation?

Market is composed by the clients and sellers, and various customers may have different needs, characteristics, habit or buying attitudes. Each customer is another entity, they have got unique needs. Therefore, retailers may divide market into different groups of individual marketplaces. Every consumer group is market segment, each segment are the propensity of clients with similar needs or needs (2002). They split the market into distinct organizations who have unique needs, wants, action or who might want different products and services. This step is known as marketing segmentation. It really is a concept in economics and marketing. Marketing segmentation is marketers through general market trends, based on the wishes and dreams of customers, variations of these buying habit and purchasing patterns, divide a whole market into lots of individual communities on the market classification process. Segmentation allows the wine company to raised gratify the needs of its customers. Company only through the marketplace segmentation, choose the most advantageous market area to be able to achieve monetary profits. If more descriptive to segmented market, it could be two parts, consumer market segmentation and business market segmentation.

Consumer market segmentation

The consumer market dominated on the market composition. Its development, directly or indirectly have an impact on the commercial development of the market and the entire socio-economic development. The main factors affecting the buyer market is consumer demand. Consumer demand for the number and composition of people impact, but also by the quality of goods and variety of colors, but the most crucial factor is people's purchasing electric power (2002). It immediately related to people's income level. Consumer market segments can be segmented in four main consumer characteristics: geographic, demographic, psychographic and behavioral segmentation (2010).

Geographic segmentation, it divides the marketplace into several geographic parts based on national, regional, urban, rural, weather or topography. The wine company may choice one or a few geographic areas to give consideration on consumer needs and desires. For instance, many multinational companies want to build their father or mother company in the heart of the town. Companies' want the best locations, such as Myer or David Jones on Randall Shopping center, which positioned in the centre of Adelaide. Marketers choose a best location is so important for the company's future.

Demographic segmentation, it divides the market into groupings such as era, gender, job, income, family size, family type, family life circuit, nationality, ethnicity, faith, social category. These factors will be the most popular areas for a company to segment customers. Consumer needs always change with age. Numerous companies use age group segmentation to put their product. Such as KFC targets to teenagers and children. Clothes Company offer different style clothes to different decades. Income segmentation is often utilized by many companies as vehicles, clothing, luxury furniture and rings. Income changes will straight influence consumers' desire and costs patterns. High-income consumers will buy more expensive products than low-income consumers.

Psychographic segmentation, it is relating to consumer lifestyle, personality, buying motives and other factors, divided into different groups. More and more businesses, such as clothing, makeup, furniture, entertainment, paid attention to people's lifestyle segmentation. Lifestyle is that folks use, entertainment, specific behaviors and patterns, different lifestyles will have different needs personal preferences. For example, English clothing company put some women labeled as "simple-type women", "fashion-type women" in two types. Particularly, the designers will design different styles, color and material of the garment.

If the marketplace divided by behavioral segmentation, it is matching with the consumer purchase or using time of a item, purchase size, purchase occurrence, brand commitment and other parameters. Purchasing many goods have time limit. For example, Airlines, travel firm during summer a vacation to advertise and apply concessionary fares to appeal to people travel by airplane; businesses doing great quantity advertising about air-conditioning in the hot summer months effectively increase sales. Purchase rate of recurrence segmentation, such as pencil, most important scholars often buy, senior scholars in normal and the workers or peasants not always buy.

Business market segmentation

Industrial market is an enterprise strategic and tactical decision-making, especially in the marketing. Many market segments can be segmented into five types: non-users, ex-users, potential users, first-time users and regular uses of products and services (2002). The target for business market segmentation is to identify the most significant distinctions among current and potential consumers that will affect their purchase decisions or buying habit (2002). This allows the marketers to classify products' prices, programs, or alternatives for maximum competitive profit. Professional market can be segmented geographically and behaviorally which same with consumer market. In industrial market, habits of consumption patterns can be considered a basis for segmentation, such as buying statues, usage rate and commitment status (2010).

What will be the bases for market segmentation in the wine industry?

In the wine industry, wines products are split into such as pre-dinner wine beverages, table wines with different foods have different wine beverage, high sweetness, high alcoholic beverages content, high acidity content and cellaring different years or there are some special wine beverages products for girls to drink. There are so many types of wine because wine beverages company must meet different consumer groupings. Because wine marketers must understand consumer desires and needs. The primary factors will influencing the wine consumers' purchasing decisions are knowledge of the wines and earlier drinking experience, such as wine beverages region, brand, label and the purchase price. Market segments are very useful in wine beverage industry, such as geographic, demographic, psychographic and behavioral segmentation.

Geographic segments in wine industry, a major wine beverages company has measured wine use rates across the world and in some major national marketplaces, wine consumption lessening in Europe, but increasing in Asia (Gastin & Schwing 2004). More and more Asian purchase wines, because they become traditional western lately. Many researches plainly implies that most wine consumers live near bigger cities, such as in america where the most significant wine marketplaces are Chicago, LA, Seattle and SAN FRANCISCO BAY AREA (Gastin & Schwing 2004). Therefore, wines producers more likely to sell their products at these marketplaces which is straightforward to meet their effective global strategic.

Some wine beverage companies try to use demographic segmentation to attain their aim. Income segmentation is the most frequently used by wines industry. High-income consumers have significantly more buying electricity than low-income consumers. As everybody knows, most of the wine is deal to the high-income consumers, such as French wines. But there are exceptions. For instance, Yellow Tail is stated in Australia, but the real sales in america. Yellow Tail is the foremost sales of all foreign wines products in the U. S. market. It's been reported that: "Yellow Tail is perhaps the only one Australian wine beverage brand which sold one million instances of wine in america, sales of overseas wine beverages brands in the first. " And Yellow Tail has also liked the success in the Britain. Why Yellow Tail wines can take the U. S. market? Because almost all of the wine companies are cared about the years of wines, factory country or a moving account behind wines. While Yellow Tail has destroyed the traditional wine beverage marketing model, they want the products closer to customers, near true to life marketing model. The price of Yellow Tail is suit for not only the high-income consumers to buy but also low-income consumers. Additionally, Yellow Tail has many different types wine beverages to drink with different food (n. d. ). Such as Cabernet Sauvignon, it best enjoy with roast meat and mushroom sauce (n. d. ). Chardonnay, it best enjoy with sea food and spaghetti. Rose, it best enjoy with parmesan cheese or sweetmeats (n. d. ). Especially, these wines have added many different fruit flavor which will vary from previous wine beverage. Wine marketers attempted to satisfy every consumer's needs and desires.

Age segmentation, in your wine marketing people can be segmented into young-aged men and women (21-40) and old-aged parents (more than 41). Young-aged people have higher regularity of drinking wine at the get together or fete friends. They always purchase low-middle level wines. Usually they prefer beer or cocktail to wines. When they select wine products, they focus on product packaging and brand. Old-aged parents have higher the consistency of taking in of wine beverage than young-aged. Even having dinner at home, they are willing to drink wine. Most of them like high alcoholic beverages content wine beverages. These old-aged adults have higher spending electricity plus more opportunities for higher ingestion. Hence, wine suppliers will depend the age to make the production in different packaging and brands, aroma and flavour.

Psychographic segmentation in your wine industry, based on the following five wine beverages consumer lifestyles: (1) calm lifestyle (2) kitchen ambience (3) fun and entertainment (4) communal aspiration (5) travel lifestyle (Thach & Olsen, 2005). Each buyer type has different attitudes towards wine and different preferences. On this segmentation, wine beverage industry concentrate on when and why customers buy wines. For instance, in France, consumer who like to listening to traditional music, going to the movie theater and putting on a suits and night time dress were more likely to possess a bottle of Bordeaux Grand Cru ~Dubois & Laurent. In Asia, many consumers pursue prestige and brand this means to purchasing high-priced wines (Thach & Olsen, 2005). Understanding this segmentation in your wine industry is the main element to targeting wine beverage marketing goal.

Behavioral segmentation in wines markets, matching to user status, market can be segmented into five parts: (1) regular drinkers, who take in wine beverages daily, 2% folks population (2) often drinkers, who consume wines at least several times per month, 10% of US population (3) potential drinkers, who take in wines at least two or three times per quarter, 14% of US people (4) ex-drinkers, who used to drink wine beverage, but drink other liquor now, 31% of US human population (5) non- drinkers, who never drink wine, 43% of US people. Through this data, more wines producers will try to market potential drinkers' buying vitality, such as advertising or buy one get another one free.

What are the implications for wines producers?

Marketing segmentation has great implicated on wines producers. There are a few positive edges for wine company to segmented markets into several parts. First in any way, market segmentation help wine beverages company, especially smaller companies, find a very good market opportunities and developing marketing strategies. Second of all, wine producers may use minimize operating costs to gain maximize working efficiency. Wine companies can change their strategic following the consumer needs, well-timed and correctly modify the product structure, make its products more marketable. On the other way, the marketing segmentation also offers disadvantages, such as brand credit will decrease and profits can be decline in long-term. For example, a wine beverages company starts to use a portion which is adding berry in their wines. This is actually the first discovery in wine beverages market. This induced more and more potential consumers and regular consumers buy it. They thought this company's durability is stronger than other brands. But after many years, more other wine producers utilize this section, consumers will know that the main difference is the products through advertising or other methods to impose on consumers, not products truly function as propaganda. So the brand credit cut down.

Outline the procedure of analyzing market sections.

Target market is through market segmentation, businesses are prepared to appropriate products and services to meet their needs for just one or several sub-markets. Wine beverage company has to evaluate the market segments and choice some segments to meet their purpose. A couple of three factors should be considered when assessing market sections: size of the segment and development rate of the segment, segment structural attractiveness, and company targets and resources (2010). A good goal marketing selection will help companies and attract more wine beverages consumers. Organizations produce wine is bound, but consumer demand is infinite, therefore, they can only just be predicated on market segmentation, select some consumer teams as the mark market. Firstly, they need to pick the best size of sections and development rate of the segment. These rely upon size of customer buys or the size of industry organization. General can be divided into large organizations, medium organizations and small communities' customers. Every company wants to target segments with large sales and maximum gains. Nevertheless, not absolutely all the firms can do the best. Smaller companies may find difficult to compete with bigger companies, because they lack of marketing proper or technology. Therefore the smaller size sections may become more suitable for smaller firms. Second of all, companies need to make decisions which may have the sections attractive for customer or not. Wine beverage suppliers must understand their current and potential competition. If competitors too strong to be competitive, segments can be less attractive (2010). Wine beverage producers also have to think substitute goods, because marketers may find difficult to set a higher price of wines. Finally, following a wine beverages company has right segment size and an appeal segment, it will also be considered the company's goals and resources. The best segment must meet a company's long-run goals, not only short-run. And then, resources can be a main indicate be decided. Wines marketers need to consider that do they have sufficient skills or technology to succeed in that segment (2010).


In conclusion, this content of the aforementioned words show that marketing segmentation is the introduction of key wine marketing strategy. Market is split into distinct groups who have different needs or manners. In wine beverages industry, it helps wine producers to comprehend the customer's intake patterns and product preferences. Wine company will change marketing strategic with the latest consumers' demand. They choose more profitable sections and then entice more potential prospects buy wines and get the utmost earnings. However, there are positive and negative factors for market segmentation. Such as for example profits can be decrease in long-term if wine beverage marketers often change their sections.

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