Vincor Project Twist

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Vincor: Project Twist
Table of Contents
Problem statement3
Situation analysis3
Objectives and goals:3
Background and forecast:3
S.W.O.T. analysis:3
Strengths:3
Weaknesses:4
Opportunities:4
Threats:4
Market analysis:4
Segmentation analysis:5
Competition analysis:5
Case Keys6
Key success factors:6
Key uncertainties:6
Analysis of alternative solutions7
Recommendation(s)9
Action plan10
Exhibits12
Exhibit 1: Perceptual Map12
Exhibit 2: Packaging13
Exhibit 3: Pricing and discounting15
Exhibit 4: Market segmentation chart16

Problem statement
Kelly Kretz, Vincor’s Marketing Manager, must decide what type of cooler to launch for the upcoming spring and summer season. Kelly must also consider positioning and other marketing mix strategies to achieve a successful product introduction into the fast-paced and fickle refreshment category.

Situation analysis

Objectives and goals:
Kelly‘s goal is to develop a new brand of alcoholic beverage for Vincor that will be innovative and “truly Canadian” with the objectives of: * Introducing a cooler product that will help to maintain and grow Vincor’s position in the refreshment category and * Achieve a successful launch, 50,000 to 75,000 cases, in market where 80% of new products don’t make it past their first year.

Background and forecast:
Vincor’s refreshment portfolio has been driven mostly by sales of its Vex and Growers Cider brands, which make Vincor the 2nd largest supplier of refreshment products in Canada. Canada Cooler and Tabu brands have not provided significant sources of revenue or growth for the company. Despite the existence of strong brands, the refreshment category itself has been shrinking by six per cent year over year. An innovative new product is needed in this category to help curtail this decline.

S.W.O.T. analysis:
Strengths:
* Conducted extensive market research.
* Success of Vex and Growers Cider and company as a whole. * Established national sales force that has strong relationships with retailers to leverage “pulling” product from the central buyer. * Valuable human capital within firm: Steve Bollinger, Executive VP of Marketing was instrumental in launching Mike’s Hard Lemonade and Mardi Bielak, head of the R&D lab had over twenty years of experience designing successful brand/flavor combinations. Weaknesses:

* Vincor is primarily recognized as the market leader in the wine industry. * Lack of success with other brands in category: Canada Cooler and Tabu. * New product introductions not supported by sales team as expertise and effort will be consumed meeting current sales targets. Opportunities:

* Vincor has wineries and large presence in BC and ON. The West and Ontario had the highest percentages of regularly drinking for all categories except Gin products. * 30% of coolers on the shelf each year were either new products or line extensions. Competitors launched new products last spring/summer. They will likely only add new flavours not new products. * Consumers are very exploratory and open to trying new things. * Potential for high volume sales with successful innovations make the industry attractive. Threats:

* New products have a short lifespan and unsuccessful products don’t even make it a year in this industry. * Time sensitive market in which definite timelines need to be met for having new product on the shelves. * Monopsonistic nature of distribution can limit ability to launch product across all provinces therefore impacting sales. Liquor board approval is essential. * The liquor boards set quotas that product has to achieve in order to stay on the shelves. For a new product to be listed, an existing one has to be dropped.

Market analysis:
The refreshment industry generated $230 million in sales in Canada in 2004 with over 6.8 million nine-litre cases of coolers sold. There are several successful...
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