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Scopone Winery Marketing Plan September 2016 University of Oregon Sette Bello Team Team Members: Amy Batty, Jessica Gunn, Xiao Liang Rachel Hanks, Jennifer Kuenzi

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Page 1: Scopone Winery Marketing Plan September 2016 Winery Marketing Plan September 2016 ... aggressive marketing and social media adoption. ... Scopone must market its Brunello as a competitive

Scopone Winery Marketing Plan September 2016

University of Oregon Sette Bello Team Team Members: Amy Batty, Jessica Gunn, Xiao Liang

Rachel Hanks, Jennifer Kuenzi

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TABLE OF CONTENTS

I. EXECUTIVE SUMMARY…………………………………………….…………………………...…..2 II. SITUATION

ANALYSIS…………………………………………………..………………………......3 A. Internal Strengths and Weaknesses………………………….………………………………...…...3 B. External Opportunities and Threats………………………….………………………………...…..4 C. Competition……...…………………………………………..………………………………….....6

III. OPPORTUNITIES AND OBJECTIVES……..……………………………………………...……...8 A. Market Opportunity……...………………………………………………..……………….…...….8 B. Plan Goals …………………………………………………………….…………….…...……..….9 C. Marketing Objectives ………………………………………………………………..………….....9

IV. MARKETING STRATEGY…………………………………………………………...……….......9 A. Segmentation Strategy …………………………………………..…………………….....………..9 B. Target Market Focus…………………………………………………....…………………..….....10 C. Positioning and Differentiation…………………………………………….………………...…...11

V. MARKETING MIX………………………………………..…………………………………….…....12

A. Product Strategy……………………………………….……………………………………...…..12 B. Place/Distribution……………………………………………….……………………...……..…..13 C. Promotion Strategy……………………………………………….………………………..…..…14 D. Price Strategy………………………………………………………….……………………....….15

VI. IMPLEMENTATION……………………………………………………..…………….……...…....17 A. Implementation………………………………………………………….……………….…..…...17 B. Control…………………………………………………………………….………….………..…21

VII. CONCLUSION………………………………………………………………..…………………….21

VIII. APPENDICES…………………………………………………………………..………………….22

BIBLIOGRAPHY.......................................................................................................................................3

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I. EXECUTIVE SUMMARY Scopone Winery, a small family owned business operated in Montalcino, Italy, offers a focused selection of four wines. It is best known for producing the world renowned Brunello di Montalcino. Traditionally, Scopone has focused solely on quality wines but is now shifting its focus towards exports, beginning with aggressive marketing and social media adoption. With limited annual production of less than 20,000 bottles per vintage and an estimated 70,000 bottles of total sales, Scopone is a boutique winery in the Italian, Montalcino market. With the help of the University of Oregon Sette Bello Consulting team, the winery aims to revamp its marketing strategy in order to tackle this marketing vision and shifting industry issues. Scopone sells 80% of its wine in the United States. With global shipping costs decreasing, larger and newer wineries are rapidly entering the international market. This saturation is negatively impacting small cost-driven traditional wineries like Scopone. According to the IBISWorld Global Wine Manufacturing report, global wine revenues are declining while trade is growing. The industry is expected to decline over the next five years, with consolidation decreasing the number of wineries globally (IBISWorld, 2016). The range of product offerings is stable; however, many participants have begun consolidating products. Technological change is moderate with the largest wineries using technology to reduce costs and increase wine longevity. European wine governing agencies have started to impose regulations in an attempt to limit overproduction and maintain price and margins. Changes in socio cultural preferences are affecting the consumption of wine. With more wine available at cheaper prices, global markets in Asia and North America are increasing consumption. Other trends involve the decline in traditional beer consumption and the shift toward craft beer, a substitute to wine. Additionally, Millennial and Baby Boomers are driving the growth in the industry with these two demographics being the highest in income and per capita consumption. Baby Boomers and Millennials are the biggest consumers of premium wines like Scopone’s Brunello. Health considerations of alcohol consumption are also pushing more to choose wine as a health alternative. Domestic competition also significantly impacts the sale of wine. There are over 250 local wineries also producing Brunello di Montalcino. Consumers enjoy a wide buyer’s market while wineries struggle to promote a differentiated brand and product. Scopone has significant opportunities to adopt a clear and aggressive marketing and social media strategy. Other local wineries are digitizing their marketing in order to build stronger brands and product recognition. Sette Bello Consulting aims to adopt a similar strategy to communicate Scopone Winery with 21st century consumers as a familiar and specialized brand of wine.

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II. SITUATION ANALYSIS A. Internal Strengths and Weaknesses History During World War II, Scopone became a refuge for evacuated people in Montalcino. Today it is still fondly remembered by village elders as the haven where they were hosted during one of the darkest moments of the country’s history. After the war, there were several owners until the farm and its land were acquired by the Genazzani family in 1992. Currently, the winery is run with passion and love by the Genazzani family, first and foremost by Theresia Baijens Genazzani, assisted by her husband Andrea and their children Vanni, David, Nurit and Sarah. The winery is located 475 meters above sea level in a hilly environment with fertile soils. Planted in 1995 in a relatively mild climate, Scopone is well suited for the cultivation of vines and other plants such as olive trees. Marketing Mix (see Appendix A for more detailed model)

● Brunello di Montalcino DOCG 2010: 17,040 bottles, 146 Magnum bottles ● Brunello di Montalcino DOCG 2011: 16,922 bottles, 200 Magnum bottles ● Brunello di Montalcino DOCG 2012: about 13,000 bottles ● Rosso di Montalcino DOC 2014: 5,333 bottles ● Il Bagatto IGT 2013: 7,293 bottles ● Il Gregoriano Sant’Antimo DOC 2014: 9.733 bottles

(Wine Scopone, 12 September 2016) The Sette Bello team was unable to meet with Theresia Genazzani, the owner of Scopone, during the visit to the winery; however, the team did have two phone conversations with her. Roberto Dinetti, the lead viniculturalist at Scopone, was also interviewed during the visit to the winery. The information provided by Theresia Genazzani and Roberto Dinetti is a primary information source that the team will use throughout the marketing plan. Scopone currently produces four varieties of wine which it advertises on its website, Wine Scopone. The wines are: the Brunello di Montalcino, Rosso di Montalcino, Il Bagatto, and Il Gregoriano Sant’Antimo. (Wine Scopone, 12 September 2016) Unfortunately, the owner of Scopone, Theresia Genazzani, has not been updated on the market value of her wines in the United States. From her, the team only knows the wholesale prices. The Brunello di Montalcino is sold for 20 euros. The Rosso di Montalcino for five to six euros. The Il Gregoriano Sant’Antimo for three euros and the Il Bagatto for eight euros. (Genazzani, 23 August 2016) Despite the lack of information on US distribution prices, this is an opportunity for Scopone to develop a new, specific pricing strategy. Scopone winery currently relies heavily on distribution to the US, estimating 80 percent of profits coming from sales in the United States, 12 percent from other European countries, and less than seven percent from sales domestically. (Genazzani, 23 August 2016) Genazzani explained that her wine is only sold in local restaurants where she has personal connections and relationships with the owners. In the US, one of the distributors in the New York and New Jersey areas exclusively sells Scopone wines online. In other states in the US, Scopone wines are sold online and through restaurants. (Genazzani, 23 August, 2016)

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Scopone Industry SWOT Analysis

Strengths: 1. Quality certified wine, DOCG 2. Product focus is strong 3. Rich history, family background 4. 3 consistent importers in the United States

Weaknesses: 1. Small winery- limited resources 2. Lack of marketing strategy 3. Unaligned technology platforms 4. Outdated media/lack of organization 5. Integration issues

Opportunities: 1. Rise of wine popularity amongst millennials 2. Growing wine popularity on the west coast of

the US and in North America as a whole 3. Decline in consumption of traditional beer

brands 4. Global recognition of Brunello di Montalcino 5. Increase in global social media use by wine

consumers

Threats: 1. Greater global and local competition in wine

market 2. Rise in production and popularity of craft

beer/ other wine substitutes 3. Weather uncertainty 4. Increase in trade flow and saturation of the

wine market 5. Italian Brunello production regulations

Exhibit 1: Scopone Industry SWOT Analysis Performance Scopone’s business performance aligns with the winery’s emphasis on the values of family, passion and history. While specific sales and profit information were not provided to the marketing team, performance was measured by the team in several different ways. Scopone is considered a small winery with less than 20,000 bottles of every vintage. There are over 250 wineries in the same region as Scopone that also produce Brunello di Montalcino. Scopone must market its Brunello as a competitive product in terms of either price or in terms of quality, which is difficult in such a competitive, saturated market. Human capital at the winery has consisted of one owning family since 1995, headed by Theresia Genazzani. Upkeep of the vines and grounds is managed by Dott Valerio Barbieri and supported by Settimio and Roberto Dinetti. The vineyard is curated by the enologist Ezio Rivella who follows the process from fermentation to bottling with the assistance of Cantiniere Roberto Dinetti. (“The Farm: Scopone,” n.d.) B. External Opportunities and Threats Political Legal Regulatory The European Commission regularly addresses the ongoing problem of excess wine supply among its largest producing nations, including Italy. Measures, such as abolishing improper distillation and adjusting tariff schedules among close trading partners, have been implemented. The Brunello must also be 100% Sangiovese grapes, with a minimum of three years aging in oak barrels. This makes the Brunello Di Montalcino a time and quality intensive wine to produce. With a large variety of wines offered worldwide, the Brunello is one that has not increased at the same rate of production, which is why it is a more rare and expensive variety. According to the well known wine blog Vinfolio, the Brunello “ has the longest aging requirement of all Italian wines. With a spectacular performance at international auctions and some excellent recent vintages, it has become one of the most coveted wines for collectors” (Vinfolio Staff 2015).

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Environmental Wine manufacturers all over the world identify unpredictable weather conditions as a major threat towards production. Well known California vineyards have been plagued with ongoing dry spells for the past five years. If droughts continue in the state, regional wine production will be severely and negatively impacted. According to the New York Times, “ groundwater supply is almost tapped dry. The older vines, with root systems deep enough to absorb a modest bit of moisture, are surviving. The younger vines, not so well. In 2014, AmByth harvested less than a third the amount of grapes it did in 2010, the last so-called normal year before the drought began ” (Asimov, p30 2015). These trends have forced many California vineyards to reallocate resources and change grape varieties to drought resistant grapes. In Italy, certain laws restrict the watering of grapes. These restrictions only exacerbate the influence of weather on the outcome of the annual harvests. Social Scopone’s prized wine, the Brunello di Montalcino, has a global reputation which gives the winery significant exposure to high-end wine consumers. In reference to the Brunello, the New York Times suggests, “ get them into the hands of collectors and fine restaurants, along with consumers willing to pay prices ranging up to $1,500 for the 1958 riserva. These aren’t just another collection, there’s actually some significance as an Italian cultural icon” (Asimov, p30 2015). Scopone’s standards for quality allow their wine to age for more than 30 years, which can appeal to upscale demographics looking to collect fine, aged wines. Increase in high end wine consumption by wealthier European, Asian and Millennial American consumers have steadily driven industry success. Moreover, low price offerings, new marketing strategies, and a greater understanding of the health effects of wine has steadily increased consumption at every price point. The decline in popularity and consumption of traditional beer brands is allowing more unique substitute beverages like craft beer and wine to enter the alcoholic beverage market. Substitutes like wine are marketed as a healthier, high end alternative to beer which makes it more appealing to consumers concerned with health and status. Market Watch reaffirms this shift in preference saying, “People are more health-conscious. Wine has a halo effect; it’s perceived to be healthier. Indeed, 22% of people who are drinking less domestic beer are drinking more wine” (Fottrell 2015). Economic The cost of exporting wine globally has decreased due to larger shipping casks and growing traffic flow. The global trade value has gradually increased over the past several years due to the many countries aggressively influencing wine output. Argentina, Chile, Brazil and Australia make up the top four the fastest growing wine exporters, saturating the thirsty wine markets such as the United States at all price points. As a result, profits have been on steady decline negatively influencing small wineries such as Scopone as global competition rises. According to the Wine Institute: “ Wine shipments to the U.S. from all production sources —California, other states and foreign producers —grew to 384 million cases, up 2% from 2014, with an estimated retail value of $55.8 billion. The U.S. has been the largest wine consuming nation in the world since 2010” (Wine Institute 2015). This marks just how large the US opportunity is in the wine market. Technology Technology has strengthened customer relationships, improved branding, and significantly increased the quality of the wine aging process. With new technology, wineries are able to drastically extend the life of wine as well. Research by University of California Davis’ Chik Brenneman states: “we have equipment in place that allows us to carry out precision winemaking. Precision winemaking is important in the research world, as it allows us to investigate the winemaking processes using strict control of experimental variables—notably temperature control, ability to clean and precise mixing regimens”

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(Brenneman, 2014). Specifically this precision is defined by harvesting technology that automatically sorts which grapes are picked as well as additional sorting by machines such as the Bucher Vaslin R1 and R2 that sort grapes by quality after harvest. Technology during the production process include removing solids with innovative cross-flowing filtration systems as well as sensors that track the wine fermentation process in real time. While technology does not inherently improve wine quality, it allows the winemaker to have better control to achieve their personal goals and the requests of vendors and consumers. Additionally, with increasing global internet connectivity younger demographics are adopting new tech savvy forms of communication. For example Millennials are affecting the wine industry with technology through consumer wine rating apps like Vivino and purchasing import wines through newly formed Direct to Consumer distribution channels. C. Competition Scopone’s direct competitors are located in Montalcino, Italy. The team had a chance to speak with the owner, Theresia Genazzani, who stated 250 wineries in the region are also producing the Brunello. The amount of Brunello wine produced in Montalcino makes it difficult for Scopone to differentiate itself from competitors. Marchesi Antinori, Castello di Banfi, and Casato Prime Donne are other popular wineries in the area. The team found these brands in several supermarkets, enotecas and restaurants, where Scopone was unavailable. Other domestic DOCG and premium wines also compete with Scopone. The Brunello di Montalcino is only one offering in the diverse Italian market. Wine enthusiasts may easily prefer other premium wines such as the Vino Nobile di Montepulciano. However in terms of aging, culture, and quality, few wines are on standard of the Brunello. In the foreign United States market, Scopone competes with top wine producing regions such as California, Washington, Oregon and New York. The State of California, US largest producer, hosts 85% of all US domestic production and has more than 4,600 wineries. California ships 229 million cases of wine valuing $31.9 billion in retail value and $1.6 billion in annual exports While California grape variety only reaches 110 different types, it harvest 3.7 million tons of grapes. The US west coast market employs more than 400,000 people and attracts 25 million annual tourists. (Wine Institute 2015) Indirect competition includes products such as craft beers, spirits and nonalcoholic beverages. Currently, craft beer poses the greatest threat to wine consumption in the U.S. market. According to Fortune.com, “brewers reported a 13% increase in volume in 2015, the eighth consecutive year of double-digit growth as American beer drinkers continued to be lured by fuller-flavored ales” (Brewers Association 2015). To keep up with competitive demands, Sette Bello Consulting predicts wineries will be forced to implement aggressive social media and marketing tactics to maintain success. This is because production focus and quality emphasis alone are no longer enough to attract customers to buy. Competing wineries have already begun adapting its revenue models to include a sales oriented direct to consumer (DtC) approach. Out of the six wineries that the University of Oregon teams are working with all five other wineries are expanding its offerings into tourism; Scopone was the only winery who still has this opportunity. Tourism is becoming a larger component of the wine industry. Vacation and business conference housing and on site bed and breakfasts at picturesque vineyards are a typic for wineries supplement distribution sales.

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Competitor SWOT Analysis After conducting SWOT analyses for three of Scopone’s competitors, Sette Bello noticed striking similarities between the three wineries. Each competitor has a strong social media presence; they utilize nearly every platform, engage with consumers, and have user-friendly interfaces. (See Exhibit 2,3,4)

Strengths: 1. Website aesthetic 2. A Magazine 3. Facebook page 4. Video 5. Instagram/Twitter

Weaknesses: 1. Website is not user friendly 2. Responding with likes instead of personalized

comments on Facebook 3. Winery is emphasized over individual wines

(Brunello di Montalcino)

Opportunities: 1. Simplify website layout 2. Using more hashtags to gain a wider reach 3. Posting more photos of wine tourism as

opposed to the vineyards

Threats: 1. Potential for negative reviews to overshadow

positive reviews 2. Other wineries have a greater emphasis on

Brunello in particular 3. Contrasting cultural views of appropriate

social media marketing (cultural barrier in different countries)

Exhibit 2: Marchesi Antinori Media SWOT Analysis

Strengths: 1. Listed on Tripadvisor 2. Website visuals and user friendliness 3. Strong social media presence (Twitter,

Instagram, etc)

Weaknesses: 1. Inconsistent posts on Twitter 2. Twitter page is only in Italian 3. Don’t reply to customer reviews posted on

facebook or other sites

Opportunities: 1. Could make their Twitter page bilingual 2. Personalize responses to customer reviews

and posts

Threats: 1. Facebook is less popular with the rising

millennial demographic 2. Very formal website could be intimidating to

new wine drinkers

Exhibit 3: Castello di Banfi Social Media SWOT Analysis

Strengths: 1. 4,174 followers on Twitter 2. Multiple posts per day 3. Very visually appealing pages 4. Incorporates blog posts via links into tweets

Weaknesses: 1. Twitter page is all in Italian 2. The Twitter account is under the name of the

overarching business that owns this vineyard and 2 others

3. They only have a Twitter and a website

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Opportunities: 1. There is room for more interaction with

customers on Twitter 2. Sharing messages in more than just Italian to

reach more consumers 3. Bringing some of their high quality images to

Instagram

Threats: 1. Other Brunello wineries have a much stronger

social media presence 2. Incorporating their specific brand with a

larger name can make viewers lose sight of the specific vineyard

3. The overarching brand could feature another vineyard more prominently, losing focus from Casato

Exhibit 4: Casato Prime Donne Social Media SWOT Analysis After analyzing three competing wineries, our team believes Scopone needs to update their current social media strategy and join additional platforms such as Instagram and TripAdvisor to remain competitive. By creating features such as bilingual options on its social media, emphasizing its Brunello, and personalizing responses to consumers, Scopone could set itself apart from other wineries and gain competitive advantage. The team pulled excerpts from competitor websites to visualize the contrast in social media use, Appendix F includes positive competitor features where user experience is prioritized on social media. These three competitors offer examples for how Scopone could emulate in the near future if the winery invests in developing more engaging and integrated internet platforms. After conducting a Porter’s Five Forces Analysis, the Sette Bello team recognized a number of threats for Scopone. Despite these threats, Scopone still has the opportunity to stay competitive. Because Scopone has an established, unique, and in-demand product, the winery has the ability to set more competitive prices.

Threats of New Entrants - High · Rising consumption encourages non-traditional geographies to enter industry · Decreasing costs to ship wine globally · High time and capital investment · Significant Economies of Scale · Globalization allows for ease of import

Supplier Power - Low · Inputs for wine production are largely unchanged · Barrels are universal for all wineries · Weather, a systematic risk for all wineries

Threats of Substitutes - High · Rising Consumption of craft beers due to higher quality for comparable price · Many substitutes to Scopone wine out on the market · Wine Products at every price point saturating global market

Buyer Power - High · Buyers market, almost unlimited supply of wine selection · Little perceived product differentiation · Wine available in multiple channels with rising Direct to Consumer methods · Winery competition lowers price of product · Product lasts/increases in value if not consumed

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Scopone Internal Competition - Medium · Limited number of Brunello Producers

· Rising Number of industry players squeezing profit margin · Growing investment in promotion · Increased diversification of offerings by wineries

Exhibit 5: Porter's Five Forces Analysis III. OPPORTUNITIES AND OBJECTIVES A. Market Opportunities Local: Although there are many other wineries in the Montalcino region, the team believes there is opportunity for Scopone to work with its competitors. A potential strategy is for Scopone to partner with other Brunello producing wineries in Montalcino and offer a Brunello or Premium wine tour targeted toward wine connoisseurs and enthusiasts. Because Scopone is a smaller winery, an event like this would give it the opportunity to work with bigger, higher volume wineries in the area and gain exposure to more customers that otherwise might not visit Scopone. Our team believes an inorganic partnership with other wineries offers the maximum exposure with minimal cost and investment. Scopone is currently attending the largest wine convention in Europe, Vinitaly. Vinitaly is a four day convention where producers, distributors, restaurant owners, and journalists can taste the best wines in the world and learn about the most up and coming wineries and market trends. It would be beneficial for Scopone to invest in attending more wine conventions to display its award winning Brunello. This would allow Scopone to stay updated on current wine trends as well. Scopone could also begin asking local restaurants and friends the winery sells to for any available customer information collected on those who consistently choose Scopone wines. U.S. Expansion: California is well-established as a leader in wine production in the U.S. which Wine Institute illustrates by saying, “California’s 229 million cases shipped within the U.S. in 2015 represent a 60% share of the U.S. wine market” (2015). Despite California’s reputation in the wine industry and the number of domestic producers, Scopone has a competitive advantage that would allow it to succeed in the West Coast market. Scopone is a high end boutique Tuscan winery, and its products, especially the Brunello di Montalcino, make Scopone a unique and refreshing alternative for knowledgeable wine consumers shopping in a market saturated with Pinot Noir. Currently California, Washington, and Oregon account for the 7th, 11th, and 13th largest wine consumption per capita states in the US (Kiersz, 2014). As a popular destination for wine production, the West Coast is also known to host and attract wine enthusiasts from all over the world. As an exclusive import limited in quantity, the Brunello di Montalcino would greatly appeal to wine connoisseurs and collectors in the region who already have a knowledge of and appreciation for fine wines. Genazzani has expressed great interest in expanding to new territories in the United States, which our team believes is possible with a revamped distribution, marketing and social media strategy. B. Plan Goals By the end of the engagement with Scopone, the team aims to deliver a clear 12 month marketing roadmap and establish the winery’s specific target customer base. This plan will feature a step by step proposal featuring a 90 day action plan in addition to six and 12 month checkpoints. This plan will be an actionable rubric in how the team recommends achieving the marketing objectives set forth below. The

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team hopes to gain stronger and more consistent distributor relationships in the United States by updating Scopone’s web presence and creating social media platforms. The team hopes the winery will gradually gain exposure by attending more wine expositions and connecting with a distributor on the West Coast. C. Marketing Objectives

● Double brand awareness by October 2017 through likes, followers, and shares by utilizing social media platforms such as Facebook, Instagram, TripAdvisor, and Linkedin.

● Connect Scopone with at least one importer for California, Oregon or Washington in the next 12

months and clearly identify Scopone’s marketing responsibilities to expand its distribution to the West Coast.

VI. MARKETING STRATEGY A. Segmentation Strategy Scopone’s geographic distribution includes three main segments; Italy, the United States, and greater Europe. Italy and Europe collectively account for only 20% of Scopone’s sales and are declining wine markets. Meanwhile, the United States wine industry received $18.4 billion in revenue and grew by 1.9% in 2016 (IBISWorld, 2016). Currently Scopone successfully sells 80% its products on the East coast of the United States, but would like to extend its reach to more states (Genazzani, email, 2016). Led by California, the West is the country’s most prolific region for wine production and consumption. Droughts in California have continued to threaten the state’s wine yield, creating opportunity for import wines, such as Scopone’s, to enter the market (IBISWorld, 2016). As a result, our team has identified Italy and Europe as low opportunity segments for Scopone and suggest it focuses on the United States segment. Currently, Scopone uses an undifferentiated segmentation strategy, meaning it sends the same promotional messages to each segment. However, in terms of price it is segmented differently. Due to shipping costs and distributor markups, Scopone sells its wines at a higher price point in the United States than in Europe. This establishes Scopone’s wine as more elite in the United States and may require a unique marketing mix for the bifurcated price segments. B. Target Market Focus The team believes Scopone is a production oriented winery, meaning it has a greater focus on its internal capabilities (Lamb, Hair & McDaniel, 2016). As a result, currently Scopone does focus on a particular target market. In Italy, Genazzani exclusively sells her products by hand selecting the restaurants and liquor stores her wine is sold in; however, the majority of Scopone’s products are sold online, untracked, through distributors in the United States (Genazzani, Interview, 2016). Similarly, it is unclear what percentage of Scopone’s private business is repeat vs. new because sales are facilitated by distributors instead of the winery. However, Scopone’s commercial business consists of nearly all repeat customers as Theresia Genazzani sells to the same distributors each year. Within the United States, the market is heterogeneous in terms of geographic, socio-demographic, and behavioral characteristics. For instance, the 2015 survey by the Wine Institute states that 4% of the population identify as wine connoisseurs, 21% as advanced, 57% as intermediate, and 18% as novice (Thach & Chang, 2015). While some of Scopone’s wine is sold to upscale restaurants in the United States, the majority of its sales are generated online (Genazzani, interview, 2016). This appeals to two different generational demographics: millennials, and baby boomers. According to the Wine Enthusiast

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magazine, wine is becoming increasingly popular among millennials within the United States and is considered a healthy alternative to beer and other popular drinks. Additionally, millennials account for 40% of occasional wine drinkers in the US, overtaking baby boomers who only account for 31% of occasional wine consumption. With the trend of increasing wine consumption and discretionary spending among millennials, this is an important market for Scopone. However, baby boomers still make up the majority of high frequency wine consumers at 38%, which makes them a key target market (Hernandez, 2016). Based on the Strategic Business Insights’ VALS survey, an online assessment of psychographic types, Scopone’s products would receive the most traction with achievers and thinkers. Characterized as peer conscious, technology advocates, and family oriented individuals, Scopone’s family focused and exclusive reputation would appeal to achievers. This psychographic analysis helped the team create target personas for millennials and baby boomers in this market (see Exhibit 6). Our millennial target persona is a tech savvy, highly educated, and employed 30-38 year old. They have a large disposable income, and want nothing more than to relax with a glass of Brunello after a long, stressful day at work. The other persona is a middle aged man or woman who prioritizes family and history above all else. They have or had successful careers, frequently consume wine with dinner, and appreciate established, quality products. By focusing in on these target markets, our team believes Scopone can maximize its appeal in the United States.

Target Markets Millennial Target Market Baby Boomer Target Market

Age 30-38 51-62

Income Household income above $50K Household income above $80K

Wine Consumption Pattern Several timers per week Several times per week - Daily

Values Tech, Efficiency, Goals, Hard Work

History, Family, Quality

Exhibit 6: Target Market Table C. Positioning and Differentiation

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Exhibit 7: Perceptual Map The difference between Scopone’s products and its competitors’ products are negligible in terms of quality and price, each being of similar value. However, Scopone’s reputation is less developed than its competitors such as Marchesi Antinori, Castello di Banfi and Casato Prime Donne who all have stronger social media presence, user interaction, and brand ideals. Since Scopone lacks a brand reputation in the United States beyond its Brunello, the United States market lacks clear understanding of the winery. This could be an opportunity for Scopone to define itself in the United States without preconceived ideas from potential consumers. Our team believes Scopone should represent itself as a boutique winery focusing on traditional, tuscan values. Advertising Scopone winery’s in this way will maintain its status as a conservative winery, but push its position toward a contemporary spectrum. Likewise, increasing awareness of the wineries unique product offerings will reposition its wine as more classy and elite. This will help build its brand reputation in the United States and appeal to both Millennial and Baby Boomer target markets and differentiate Scopone from its more commercial competitors as illustrated above in Exhibit 7. V. MARKETING MIX A. Product Strategy Scopone offers four wines. According to head Vinicultalist Roberto Dinetti, Scopone averages less than 20 groups of annual visitors who come to taste Scopone wine. This suggests the winery is severely limited in terms of external contact and services outside of wine production. With only four red wines and no commercial tourism or olive oil production, Scopone’s product breadth and product line depth lacks variation. However, during the interview Dinetti stated that Scopone is interested in purchasing additional lands to expand product offerings and increase sales. Dinetti also stated Scopone regularly sells out of its Brunello, but has more difficulty selling out of its other three wines.

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Scopone could benefit from the exposure of wine tourism through its consortium of Montalcino Brunello makers. For over 20 years wine tourism has boomed into a multi-million dollar industry with Tuscany and Piedmont being the two most popular destinations among European travelers. Corporate, government, and non-profit events make up the top three organizations that take part in this practice helping wineries diversify service line and maintain revenues throughout the year. Connecting with Scopone’s Consortium of wineries who currently take part in wine tourism or connecting with touring companies could mean great opportunity for Scopone because it not only diversifies Scopone’s product but also creates a way for Scopone to build stronger customer relationships essential for long term success. Scopone’s Brunello di Montalcino is the flagship offering with the longest product history and highest Vivino reviews. According to Vivino, this Brunello is known for featuring a distinct spicy, cherry, and fig taste, best praised for its balance and ability to pair with traditional Italian meals. The Rosso di Montalcino and Il Gregoriano Sant’Antimo are Scopone’s price conscious blends with more tart and acidity. Lastly Scopone’s Il Bagatto completes the product line tying together its famous Montalcino and the two everyday reds. The Bagatto offers a tannic, fruity cedar taste that takes longer to develop compared to other wines. This is significant because all four wines operate in the mid to low tier price segment in the domestic italian market making it easily accessible to consumers. After distributor markup on imports Scopone wines jump into a more premium category which allows it to reach savvy and wine familiar Millennial and Baby Boomer consumer bases. Scopone exhibits characteristics of a winery in the mature phase of the product life cycle. With over 30 years of experience and consistent harvests, Scopone enjoys a relatively stable operating environment, however, IBIS analysts believe the industry is beginning to decline as players consolidate. Growing external pressure pushes the winery to further develop additional Brunello variations as currently the Brunello reached the certified maximum production. Roberto Dinetti has also stated he enjoys experimenting with lower certified IGT wines due to less restrictive blending practices. This is significant because it shows Scopone’s established products as well its long term focus on experimenting and developing new wines to entice customers. Scopone on an iconic level is relatively easy to distinguish due to its specific history. The majority of its wine names are based on location and type which make italian wines easy to understand as well. However unless the consumer pre-exposed to Scopone, he or she would have difficulty selecting Scopone even among the few wineries in Montalcino. Most customers meet with the owner Theresia Genazzani and Roberto Dinetti personally, other customers only ever make contact with the distributor website. The winery’s small size suggests a lack in consistent and documented customer relationship management; this severely influences Scopone’s ability to control its brand perception on a level other than wine quality. B. Place/Distribution Strategy Scopone would significantly benefit from a direct to consumer marketing (DtC) channel due to current exporters of Scopone wine exercising significant markup on each bottle. However currently with no formalized marketing strategy, the direct relationship with customers overseas is non-existent. When the team’s researched competing winery websites, all three of Scopone’s Brunello producing competitors have built an integrated product distribution platform for customers. In addition to a seamless and aesthetic design, these competitors make it simple for consumers to purchase wine direct from the maker.

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Exhibit 8: Domestic Distribution Exhibit 9: International Distribution The distribution channel map above displays Scopone’s current domestic and international distribution channels. A more aggressive DtC approach would allow the winery to rely less heavily on international distributors while letting Scopone integrate and increase more control of its brand image and customer relationship. Additionally this would eliminate storage and shipping time streamlining the consumption process bottling to uncorking. With less than 20 annual wine tour visits, Scopone has not tested whether the consumer is willing to travel significant distances to purchase it’s wine. The inaccessibility of the winery’s only location from traditional commercial buses makes it difficult for Scopone to increase consumer traffic. This means a strong distribution network is still the best way for Scopone to move its products. An updated distribution strategy which may help Scopone would require greater investment in promoting the Scopone brand through consumer interaction. Customers need interaction with Scopone more than just when they consume the wine. Distinction is essential, through website, online purchasing interface, social media, and quality user interaction. C. Promotion Strategy A typical customer has the ability to find Scopone’s wines in many ways. Tech savvy consumers often discover Scopone through apps such as Vivino. There are over 500 ratings on the Brunello alone averaging four stars. Other consumers can find out about Scopone through any of their earned media mentions in Wine Spectator, awards won in competitions, and diplomas certifying the wines. Appendix I displays the full list of awards and honors received by Scopone on the national and international stage. Promotion needs to be more targeted to the specific audiences with messages targeting via online platforms to where millennials will best receive this information. Key competitors in the Brunello market are already doing this through omnichannel promotion strategies with Facebook, Pinterest, Instagram, Twitter and Tripadvisor all seamlessly integrated into the websites.Websites also include additional language options to better address the needs of the international market. Scopone’s current website has strong product information that consumers want to know. This is very helpful for demographics that are interested in researching the product before they buy. However, Scopone requires a similarly integrated approach with a defined budget aimed to promote the winery to customers abroad. Customers whose curiosity, needs and expectations must be satisfied before a purchase is made. Appendix J represents a

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detailed chart observing Scopone’s current social media and a detailed SWOT analysis as well. These two appendices paint a clear picture of Scopone’s current position in the social media sphere. A large percentage of Scopone’s current promotion comes from earned media. According to their website, in the last five years Scopone has been mentioned 19 times in both international wine publications, and by prominent wine critics. Appendix I shows the full list of awards and diplomas hanging on the walls of the winery. Some publications they have been mentioned in are Wine Spectator and Bibenda, a food and wine guide to the best of Italy. Other earned media Scopone utilizes is features on wine apps such as Vivino. Sette Bello Consulting has found no instances of paid advertisement from Scopone. This lack of paid advertisement promotes exclusivity to potential consumers, but also limits awareness of the products. Sette Bello Consulting has developed a comprehensive social media plan for Scopone to promote their products on different platforms. The channels we suggest they use are Facebook and Twitter. With catchy themed posts such as #PerfectPairing and consistent hashtag usage, the team believes that Scopone’s promotion can be brought into the 21st century. Please see section VI for more in depth information regarding the social media plan. As mentioned, the majority of Scopone’s wine is sold to American and European distributors. These distributors then re-sell to consumers via wine shops and online retailers. Theresia also sells a small percentage to local restaurants in Tuscany. This small portion makes up most of the domestic sales. This is an area they can improve upon. The team is suggesting Scopone hosts a promotional wine tasting event where they invite local restaurateurs, American distributors and customers into the vineyard to taste their products in a natural environment. As the winery is so small, they could set up tables in the outdoor courtyard area, and have food served by one of their restaurant partners. This would help Scopone introduce key customers to the Tuscan lifestyle and hopefully boost sales. Photos from the event would be great content for both Facebook and Instagram. Other than these promotional events, Scopone should continue promoting and marketing to different distributors on the West Coast. This can be done through connecting on LinkedIn, via Facebook and through email communication. Developing relationships with key distributors will create lasting connections and therefore a consistent customer base and bigger profits. These relationships are also integral into entering new American markets. Offering these distributors small price reductions with volume of sales will help promote the product. Along with the product, Scopone could partner with local businesses and create a “Taste of Tuscany” basket to give to distributors. This basket will include different treats specific to Tuscany such as the famous Siena Cake, olive oil, and crostini di fegato. This will help secure Scopone wine as a quintessential Tuscan wine. D. Price Strategy Scopone Wine operates in the entry and mid tier segments with its four products in Italy. However after being imported into the US, distributor markup pushes Scopone into mid to elite tier prices. Current domestic pricing strategy is calculated on a cost and status quo basis. After speaking with Theresia Genazzani a second time she stated her price includes the cost of all salaries, growing costs, future investments and any additional target profits set by the winery. Per bottle prices are competitive among other domestic wineries close to Scopone that produce similar wines however Scopone Brunello is consistently sold out annually. This raises question on the price elasticity of the Brunello as it is highly demanded but also just one in the sea of wines on the market. Because Genazzani operates in coordination

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with the wine consortium, annual bottle prices are stable among competitors and with offerings in the larger global market. In terms of price sensitivity, it is the main determinant for consumers. Wine demand depends on the price per bottle which can range from a few dollars to several thousand depending on perceived quality and branding. Price sensitivity depends on income and level of involvement by consumers. Low tier wines are far more popular among casual drinkers while comparably priced alcohols act as a major substitute as craft beer and cider grow in popularity. Per capita consumption is increasing in the United States while the opposite is occurring in Europe, however profits are largely driven by evolving tastes and preferences by high income Millennials and Baby Boomer consumers who show more willingness to purchase higher end imported wines. Scopone has stated its wines are very competitive in the industry suggesting it does not experiment with consumer psychology and complex pricing strategy. According to IBISWorld's Global Wine Manufacturing Report, industry profit Margins globally averages around 7.3%. These margins are actually expected to decline to around 7% by 2020. This has pushed the team to consider several strategies to maintain profitability in the future. Profitability can be maintained through two main methods: cost cutting to increase operating income or boosting top line revenue. Due to the capital and time intensive nature of wine making the team decided to explore boosting future revenues through a Direct to Consumer (DtC) approach. From preliminary online research, Scopone’s domestic wholesale and US retail wine prices display a the difference in price per bottle. US retail markets found Scopone Wine to be charging double or triple the cost of wholesale. Appendix B displays the dollar denominated revenue gaps between domestic wine price and online distributor price per bottle of each Scopone wine which reveal potential price opportunities in direct-to-consumer distribution. Exhibit 10 DtC vs Distributor Projected Annual Revenues by vintage Appendix C displays a preliminary revenue model of Scopone and its distributors by vintage. The basis of this information is supported by wholesale prices given during primary interviews with Theresia Genazzani and secondary internet research on the US retail cost of Scopone wine. Appendix C depicts an estimate of the annual export revenues by vintage assuming Scopone and its distributors were able to all bottles available. This rough model projects Scopone’s distributors projected $1,764,980 annual revenues to just $577,099 Scopone projected. While there are legal regulations to Italian to American DtC channels, Scopone has significant opportunity to capture topline margins if it can better expand its reach to american consumers and raise its prices. A limitation to this opportunity is how Theresia Genazzani stated currently Scopone does not have a defined understanding of its US customer segment. In order to be better suited to collect this information, Scopone’s online platforms require updates to better manage customer relationships and build brand equity. At a glance Scopone’s marketing strategy seems organic with primarily centralized business decision making. However with the GEO and University of Oregon marketing partnership, it suggests Scopone’s shift in vision toward a more planned and purposeful long term marketing approach. VI. IMPLEMENTATION A. Implementation Sette Bello Consulting has created two marketing objectives and with them, specific marketing plans. These plans involve social media and the team believes will allow Scopone to achieve the stated objectives. The objectives and marketing plans are as follows:

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1.) To double brand awareness by October 2017 through likes, followers, and shares our team is going utilize the following social media platforms: Facebook, Instagram, TripAdvisor and Linkedin. Since millennials and baby boomers are the most frequent users of Facebook and Linkedin, these are ideal platforms for Scopone (Analoui, 2016). Creating an Instagram account to target the millennial demographic would also benefit Scopone. Due to the limited time Scopone has for social media, the dual posting function between Facebook and Instagram would be a convenient way for Scopone to expand its social media presence.

● Facebook : Our team has developed a 12 month plan for Scopone to re-vamp their Facebook page starting October 2016. First we are going to change their Facebook profile to the correct form as a public figure instead of how it is set up right now as a person. Second, our plan is to have them post content once a week. We have created a posting schedule for Scopone. For example, their first post will be in October, soon after the harvest so it would be appropriate to highlight Roberto, the wine marker, and post a picture of him in the winery with his grapes. The caption of the photo will explain how the harvest went and how excited they are to start the aging process of their Brunello and other wines. The caption will also express Scopone’s gratitude to Roberto and his team for all of their hard work. Other posts include: featuring their wines with food pairings, italian traditions such as the wine snow cone, and events on the West Coast and in Tuscany (Refer to Appendix D for a visual example of a mock Facebook post).

● Instagram : The beautiful landscape and unique production process of winemaking makes an

Instagram account a great way to build social media presence. Instagram is not a social media site meant only for young children or teenagers. According to Hootsuite Blog, 30 to 49 year olds make up the second largest age demographic on Instagram at 28 percent (2016). Scopone could make posts that are aimed at its target market who also happen to make up over 20 percent of users on Instagram (Refer to Appendix E for a visual example of potential Instagram posts).

● TripAdvisor : The Sette Bello team believes it will be beneficial for Scopone to set up a

TripAdvisor account in order to boost tourism. Wine tourism is a growing industry and a good way to gain more recognition and revenue.

● Linkedin : To connect Scopone with more distributors in the United States it will be beneficial for

them to update their Linkedin page. Scopone can also post links from other social media to their Linkedin page in order for distributors to understand the winery and hopefully, see it as a profitable potential client. Linkedin will allow an integrated relationship and communication platform between Scopone and distributors.

We believe social media should be posted in English because we will primarily be focusing our marketing efforts in the United States. We are also planning to use the following hashtags for all of our posts on Facebook and Instagram: #winewednesday, #wineoclock, #tuscanytuesday, #perfectparings #vinovenerdi and #datenight. Theresia Genazzani has expressed apprehensions about hiring a full time social media employee. However, our team thinks that in order to develop a strong social media presence, Scopone should look into hiring a social media intern or employee. Genazzani and her core staff can then focus their efforts on production and quality. The Sette Bello team believes that research about how much a small business typically spends on marketing will be valuable information for Scopone in order for them to make the

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important decision of whether or not to implement a marketing strategy. The team will also look to gain information on what impact a strong social media campaign can make in terms of marketing and a business’s revenue. Please see Appendix K for the Social Media Calender. 2.) To connect Scopone with at least one distributor in California, Oregon, or Washington in the next 12 months and identify Scopone’s marketing responsibilities to expand its distribution to the West Coast, our team has narrowed down 3 potential distributors: Southern Glazer’s Wine & Spirits, Young’s Market Company and C&G Wines.

● Southern Glazer’s Wine & Spirits: http://www.southernglazers.com/ Pros: Distributes to 44 US markets including California, Oregon, and Washington; Has large, new market and network channels for Scopone to expand to.

● Young’s Market Company: https://www.youngsmarket.com/ Pros: Nationally known distributor; distributes to California, Oregon and Washington; Fattoria di Petroio, another small winery in Tuscany, sells their wines through Young’s Market Company and has been successful in the Oregon market.

● C&G Wines (Oregon): http://www.cgwines.com/ Pros: Distributes within Oregon, demonstrates and emphasizes attention to detail and favor for small wineries on their website; C&G sells other Tuscan wines and a variety of International wines so the distributor has experience working with global wineries.

B. Control The team believes using analytics will allow Scopone’s social media head to observe interactions on the various platforms. Analytics display important metrics such as: Views, Likes, Follows, Comments, shares to help Scopone control what content sticks with customers. While there is not a clear budget or set of resources that are currently being used to accomplish the marketing objectives. The objectives we have suggested and discussed in this marketing plan will require some budgeting of both money and time. We firmly believe that the recommended objectives are well-suited and achievable for a winery of Scopone’s size and style. We also believe that the costs will result in strong payoffs for Scopone in the form of increased US consumer following and better distributor relationships while bringing the winery more recognition and a stronger presence online to boost higher margin DtC sales. VII. CONCLUSION: Social media use as a platform for business to consumer communication has become a key component of wine marketing and advertising. Many Italian wineries have begun to harness the power of consumer interaction and customer relationships to drive profitability in an increasingly globalized, competitive environment. The team hopes this marketing plan details a path toward closing the gap between Scopone’s current operations and its future goal to enter untapped geographical markets with new distributors. The 21st century deserves Scopone wines that focus on passion, tradition, and quality. With a redefined marketing strategy geared to communicate this powerful message to consumers, Scopone has compelling short and long term opportunities to grow and flourish in the wine market. On behalf of the University of Oregon Siena, Italy program, the team graciously thanks Scopone for the opportunity to learn about the business and future plans. Partnerships with local wineries like Scopone not only give students authentic experiences, but also allows them to exercise creativity to help solve complex

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issues of today’s wine industry. The team hopes this research can benefit Theresia Genazzani in her future business plans and wishes Scopone the finest harvests in the coming years.

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VIII. APPENDICES A:

B:

C:

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D: Updated Scopone Facebook Platform

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E. Model Scopone Instagram Account

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F. Competitor Website Comparison

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G. Scopone Domestic Channel Strategy (Closer Look at Exhibit 8 )

H. Scopone International Channel Strategy (Closer Look at Exhibit 9 )

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I: Awards Diplomas

● Selezione Dei Vini di Toscana - Brunello Di Montalcino DOCG “Fattoria Scopone” 2001 ● Selezione Dei Vini di Toscana - Toscana Rosso IGT “Il Bagatto” 2002, 2003 ● Selezione Dei Vini di Toscana - Diploma d’Onore Brunello Di Montalcino DOCG 2007 ● Selezione Dei Vini di Toscana - Diploma d’Onore Brunello Di Montalcino Riserva 2006 DOCG

2006 ● Concorso Enologico Internazionale - Diploma di Gran Menzione, Il Bagatto Toscana IGT 2003,

2005 ●

Honor Diplomas ● Selezione Dei Vini di Toscana - Diploma d’Onore Brunello Di Montalcino DOCG 2006 ● Selezione Dei Vini di Toscana - Diploma d’Onore Rosso Di Montalcino DOC 2009 ●

Competitions ● Hong Kong International Wine Competition - Bronze Winner 2012, Brunello Di Montalcino

DOCG 2007 ● Mundus Vini - Grand International Gold Winner 2015, Brunello Di Montalcino DOCG 2010 ● Concours Mondial De Bruxelles - La Medaglia d’Argento Diploma 2015, Il Bagatto Toscana IGT

2011 ● Concorso Enologico Internazionale - Diploma di Gran Menzione 2014, Il Bagatto Toscana IGT

2009 J: Scopone’s Social Media SWOT Analysis

Strengths: 1. Positive reviews on wine app, Vivino 2. Positive reviews on wine app, Delectable 3. Facebook posting include text and photos 4. Their website is easy to navigate 5. Social media emphasis on family background 6. Language options on website for Italian and

English 7. Every post on Facebook is consistently liked by

their loyal customer base 8. Online newsletter sign up on website

Weaknesses: 1. Facebook page set up as a person not as a

public figure 2. Website is outdated 3. Don’t use any social media platforms other

than Facebook 4. Don’t advertise events they attend in

advance 5. Difficulty accessing newsletter 6. Response time 7. Not on Tripadvisor, Yelp, or other wine/

tourism websites 8. Inconsistent social media posts

Opportunities: 1. Join new social media platforms gives the

chance to connect with new demographics 2. Number of potential consumers using social

media sites is consistently increasing 3. Create an Instagram account 4. Use hashtags to reach a greater audience 5. Promote events through Facebook 6. Get profiles on Tripadvisor and Yelp 7. Possibilities to interact with new importers in

the US 8. Add Spanish as possible language on the

Threats: 1. Competitors have higher ratings on wine

apps 2. Potential for negative reviews to overshadow

positive ones 3. Can be difficult to develop a following on a

new social media platform i.e. Instagram followers

4. Most other Brunello vineyards have a much stronger social media presence

5. Key demographics are moving off of platforms such as Facebook and towards

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website to appeal to Latin American markets 9. Update their website

newer platforms like Instagram and Twitter 6. The creation of new social media platforms

can be overwhelming to some brands 7. Contrasting cultural views of social media

use in the different countries 8. Language barriers in markets Scopone is

trying to break into

Observing Social Media Presence

Metric Sentiment Reach Company Posts

Feedback Average Response Time to Feedback

Website Unclear Unclear News, Events, Newsletter, Product Lines, Online shop,

No Reviews N/A

Facebook Mostly positive. They seem to get positive reviews

253 friends. Account is set up like a person instead of a business page to “fan”. This should change.

1-4 posts a month

Average 10 likes per post. Occasionally more with photos.

N/A

Instagram N/A N/A N/A N/A N/A

News Letter N/A N/A N/A N/A N/A

Vivino Wine Social Media Account: Scopone Winery

“From Tuscany in central italy, Brunello enjoys a distinction as one of Italy’s most favored wines. Ages well, and is great for collecting. Bold, rich, full bodied…..”

7 million users of mobile app. Rated as the #1 Wine rating app Scopone: has 755 Ratings on this website

N/A 3.9/5 Stars “Excellent, dark cherry, can stand alone” “Dazzling, brilliant crystal ruby color. Authentic italian style, elegant yet unconventional

N/A

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K: Social Media Calendar

Instagram Facebook Events

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