Yi Tan Chen 10530335Alison Shillington 10323032William Trousas 10567333Justin Wang 10337828Angela Yang 10621593
CHANNEL AUDITCHANNEL ANALYSIS AND MANAGEMENT24222
Agenda
Introduction Strategic Intent Channel Partners Domestic Channel Structure USA Channel Structure Gap Analysis Gap Problems and Prospects Recommendation Implementation Conclusion
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Introduction
Cumulus Wines is a 508-hectare vineyard and situated at Orange
Charles Strong and Chasing Clouds are sold “on premises”
Six airlines and export to over 25 countries
Cumulus Wine
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Strategic Intent•Own production•No conflict between production/supply
Core capability
•Domestic- VIC, NSW, QLD•International- UK, USA, NZ, Europe
Selling Capacity
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Cumulus Wines intends to achieve sale of 250, 000 cases per annum by 2012 in order to reach superior ROI. 65,000 cases (12 bottles in a case) are currently being sold per annum to the Domestic market. This is hoped to be increased to 100,000 by 2012.
Channel partners
Domestic
• Australian Wine and Brandy Corporation (AWBC)• Achieve full access to marketing data in AustraliaGovernment
•Sales force co-operate with retailers in 2005•Supermarket selling started in 2006Sales•Lion Nathan exporting Cumulus product to USA
Exclusive DistributionIntern
ational
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Domestic channel structure
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USA channel structureUS Market
(Lion Nathan)
Cumulus Wines Sydney (Sydney)
(35)%
C & R logisticsCumulus Vineyard (Orange)
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Gap AnalysisBounds
EnvironmentalCurrent economic downturn affecting consumer demandIndustry technology in Australia no comparison to overseas (eg. Europe)Increased competition in the wine industry
Gaps
Demand-SideNO GAPSSupply-side Physical possession/ownership - Represents substantial cost in channel structure, can be reducedPromotion - Wholesalers can contribute to promotion function
Closing the Gaps
Create more awareness through the on-premises channel to generate a 'pull' strategy at supermarkets and independent retailersExcessive stock can be minimised by short-term forecasting and investment in new technology to increase rate of production in order to minimise need hold stock and cope with future demand
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Cumulus Wines Efficiency Template
Strategic DirectionGovernment
Focus on down stream distributors
and promotion
High volume sales are needed
Pull strategy
Brand awareness is
essential
All promotion should focus on repeat
purchases with end consumers from
independent distributors
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Gap problems/ prospects
Pull strategy for “on premises”
Address issue of lack of
distribution in the on-
premises channel/ build
relationships on a one-on-one
basis
on-premises sales strategy
consider as costly and
timely process for Cumulus
Not guaranteed that a tasting in
a restaurant would translate to an in-store
sale
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Recommendation Demand-Side
Discount of 10% (trial) for restaurants who stock Cumulus wine
• Motivation for restaurant• Trial and brand awareness
Implementation of loyalty programs
• Annual gifts for all restaurant staff when they reach sales targetsEncouraging ‘Pouring the glass’ demonstration at restaurants
• Exposed to the label and its unique branding• Educate services people
Distributing Cumulus business cards
• With payment• Brand awareness
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Recommendation Supply-Side
Consider forecasting system (SAS)
• Motivation for restaurant• Trial and brand awareness
Attend Trade Show – WineTech 2010
• Annual gifts when reach sales volume
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Implementation
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Action By Who By When
Trade Wine Magazine Ad Marketing Manager Bi-monthly from 30th June 2009
10% discount for restaurants who accept ‘Rolling’ and ‘Climbing’ Cumulus wine
Cumulus sales force Between June 30th 2009 June 30th 2010
Loyalty program - eg. Annual gifts such as cash-back or holiday
Cumulus sales force As at 30th June 2009, After sales of 800 cases of Cumulus products are exceeded per annum
Encourage ‘Pouring the glass’ demonstration at restaurants
Restaurants – wait staff As at 30th June 2009
Distributing Cumulus business cards Restaurants As at 30th June 2009
Implementation of SAS forecasting system
Cumulus Wines As at 30th June 2009 or when financially conceivable
WineTech 2010 industry trade show Cumulus Wines July 4th - 7th 2010
Conclusion
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Our recommendations aim to achieve:
Reduced physical possession in the channel through improved forecasting techniques
Improved promotion to intermediaries who purchase from wholesalers through trade show exposure
Increased demand of ‘Rolling’ and ‘Climbing’ as a result of awareness generated in the on-premises outlets
This will ultimately assist in achieving superior ROI for the company and achieve a Zero-Based Efficiency Channel structure