Description of the Company
The company Ceja Vineyard was established in the year 1983 and is operating in the wine industry for the last three decades. The holdings of the company reside with a Mexican family Ceja that started this initial set-up by growing grapes. The company since its inception is restricted in its approach, however, the major focus has always remained on diversifying with the passage of time.
Pedro, Amelia and Armando Ceja are taking care of the business and in the early 2001 the company decided to launch their first brand under the name Ceja Vineyards leveraging their capacity Vina Del Sol. As the time went by, the company experienced growth and the sales revenue started to increase. However, the growth is not that rapid and is not of significant number because the company has been limited in its production.
As the company’s budget has always been restricted and limited the production also suffers that do not allow the company to shift its focus from market penetration to product or market development. Although the company is present in the US and has a Mexican origin, which is why the company is focusing to a country with similar taste and interest.
However, in order to carry on with this decision the company will have to encounter some critical challenges. The paper will analyze the situation for the company using different strategic models. These will be utilized in order to present recommendations to help the company in finalizing a decision and will develop a strategic marketing plan to facilitate the company in making the right decisions.
For promotion and marketing, the company is restricted regarding advertising due to laws and regulations. On the other hand, the company is using different trade shows, wine club, and awards and acknowledgments for promoting and selling its brands. The selected country or the newly target market that the company is aiming to target is Peru which also has a resemblance to the Mexican culture and the taste and preferences are similar. However, the company will only be targeting the customers of Hispanic origin and will cater their needs initially.
The Customers
The current customers of the company are highly educated, middle-aged people, mostly from the Hispanic belonging and have a high level of income. These preferences of these people vary, but taste and quality are the most prominent one as these customers prefer a good drink. These consumers seek pleasure in the product rather than focusing on the prime utility of the product.
Therefore,the idea suggests that the consumers are pleasure seekers and have a high tendency towards taste. Their income brackets allow them to purchase premium wines and seek the best quality wine as they have the knowledge towards the taste and quality. Besides that, they belong to the high-end segment of the market and mostly comprise of the upper class and upper-middle class.
The Competitors
The competition for Ceja Vineyards is intense, especially from the big five in the industry who hold approximately 52% of the market share. Southern Wine and Spirits are the biggest competitors who are amongst the top wine producers and distributors in the country.
Along with that, the major threat is from Glazers, Charmers, Youngs and NDC. Besides this, there is a growing concept of consolidation between producers, retailers and distributors which is becoming a major threat and competitors. On the other hand, the local importers, import wine from cheap producers around the globe are a major competitive threat.
These importers contain 32% of the market, and the company will have to cater the threat posed by them. However, these competitors are targeting different market segments and mostly catering to the mass market. They are using different channels like sponsoring events and below the line activities to market their products.International Marketing Plan Case Solution
However, these are the threats that the company will have to face while competing in the US market, but the scenario is totally different in Peru. Peru is a potential opportunity as the taste and preference are there, but the consumers are not served with quality. The local producers are lacking the ability to produce premium wines with good taste and quantity.
Political Environment
The industry is under the control of AFTD (alcohol, tobacco, and firearms division) that is being regulated by the IRS. Therefore, the tax regulations for this specific industry are subjected to be high. Besides that, this particular industry is regarded as amongst the highly regulated industries and the companies can only approach the retailers and wholesalers that are being approved by the authorities. Although the company has the feasibility of selling the products directly as the open regulatory environment in the country provides this opportunity. ..................................
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