Vincor: Twist Project

By Kritapong PhasuvorapongGnov09GLM065

Executive Summary “Vincor is one of the most successful producer

and distributor of wine and wine-related products,Yr 2004 their revenues exceeding US$400 million”

“Vincor was the market leader with 21% market share in Canada. Their Portfolio included popular Canadian wines & refreshment alcohol drink such as Growers Cider, Vex & Canada Cooler”

“In 2005, Vincor intended to launch a new alcohol drink since the market was extremely dynamic & consumers always change their preference”

After analyzed case’s situation, we recommend to

• Spring Water Based with juicy flavors

• Glass with 4 packages open containers and pressure sensitive labels

• Positioning for medium to premium market

• Price caped for $9.45 to allow LTOs and profit margin

Problem Statements“Late 2005, Kretz was juggling the various demands of a new product launch for Vincor’s refreshment portfolio. She was finding which new alcohol product should be launch by 1st April 2006. There were many criteria need to be consider according to pre-launch researches both Quantitative & Qualitative”

What will be the best alternative way to launch a new product?•Product to offer on the market

•Selling price to offer-Affordable

•Distribution channels- Executive stores

•Positioning for new product

•Promotion-Majors Gen X+Y events

•Packaging to offer

• Carrier

• Label

• Bottle

Situation Analysis• The trends of alcohol drink is fast moving &

short life cycle-innovation, R&D is keys “What’s trendy today may not be trendy two years from

now.” “The customer is very exploratory and is open to trying new

things” “A person’s tastes change from when they are 19 to when

they are 22”

• Cdn$230M industry with 6.8M 9litres case sold in 2004

• Aggressive competition for Spring and Summer

• Quotas limited for no. SKU available each State (10 to 60)

• One buyer and single distribution channel

• Pull system from central buyer

• Need good relationships with owners

• Required Limited time offers (LTOs) and support Sales & Marketing program for each store

• Ratio of Sales this type of market in liquor and supermarket stores is 90% with 10% for Restaurants and Bars

Consumers Analysis

Consumers Analysis

Consumers Analysis• Prefer new brands and varieties of coolers rather than brand loyalty

• Key factors need to consider:

• Excited taste- expect better than current market

• interesting packaging (bottle and colour)

• Compelling and unique product

• Value offering

• Liquor based (vodka, rum or wine)

• Carbonate Vs non-carbonate

• Fruity Vs clear colored

• Drawback of coolers

• High sugar content-too sweet, hangover overnight

• Taste too strong & poor aftertaste

• Leave them feeling full and bloated

• Difficulty for male drink alone

• More expensive than beer

• More difficult to mix with food at social events

• Channels of recognized

• Word of month

• Advertising and in-store display

• Bars

Competitors

•Smirnoff Ice-26%•Bacardi Breezer-17%•Mark Anthony Mike Lemon-9%•Growers Cider-8.6%•Vex-7.3%•Canada Cooler-2%•Market shrank-6% YoY

SWOT Analysis

Weakness•Some exist

product was not perform well in the market

•The market share is not stable and possible to decrease due to nature of market likely

•Exist products could not offer more choices

•Positioning as value and low-medium market

Strength• Vincor-Strong,

experienced in the market

• Has couple products in the market with reasonable market share

• Expertise in R&D and production lines are in-house capability

SWOT Analysis

Threat•Monopolistic for

distribution channels

•Nature of product is short life cycle

(6-12month)

•Risk of investment for new production and packaging

Opportunity

• Nature of market need new product with a better taste and quality

• Trends of young generation is expected to growth in the refreshment products

• Possible for expansion of market to non-English speaker region and other regions in Canada

5 Product Options • 50% Fruit juice based

• Pro

• Healthier, less artificial

• Less gas/bloating

• Easy and pre-mixed drink

• Con

• High sugar levels

• Unsure for % of real fruit juice

• Gin based

• Pro

• Less sugar

• Easy to mix with many flavours

• Unique & sophisticated product

• Con

• Difficulty to drink gin

• Spring water based

• Pro

• Low calories, less sweet

• No hangover

• Unique and new to market

• Con

• Possible to reduce flavours

5 Product Options • Tequila based

• Pro

• Cool concept & fun

• Perceived is stronger taste

• Easy to try

• Con

• Some don’t like Tequila taste

• Taste of Tequila is overpowering of cooler

• Energy based

• Pro

• Increase energy

• Good source of energy-guarana berry

• Pre-mixed and convenience

• Con

• Can not sleep after drink

• Too sweet

• Negative impression like others that exist in market

Financial Analysis Sold cases $50,000 $75,000Cost per cases $9.45 $9.45Income $472,500 $708,750direct cost 30% $141,750 $212,625direct cost 50% $236,250 $354,375

Sold 50,000 cases 30% 50%Media 37% $52,447.50 $87,412.50Creative 9% $12,757.50 $21,262.50LTOs 4% $5,670.00 $9,450.00Packaing Development 9% $12,757.50 $21,262.50Image/display/Sale promotion 6% $8,505.00 $14,175.00Marketing promotion/out-of store trial 31% $43,942.50 $73,237.50in-store tasting 4% $5,670.00 $9,450.00

Sold 75,000 cases 30% 50%Media 37% $78,671.25 $131,118.75Creative 9% $19,136.25 $31,893.75LTOs 4% $8,505.00 $14,175.00Packaing Development 9% $19,136.25 $31,893.75Image/display/Sale promotion 6% $12,757.50 $21,262.50Marketing promotion/out-of store trial 31% $65,913.75 $109,856.25in-store tasting 4% $8,505.00 $14,175.00

Evaluation

Healthy Easy to drink Sweetness In-house

capability Competitors Summary

Fruit juice based 7 8 5 4 6 30

Gin Based 4 3 6 6 9 28

Spring water based 6 7 7 7 7 34

Tequila based 4 4 6 6 9 29

Energy based 6 5 5 6 6 28

Since the Spring Water Based has highest scored, then we recommend Vincor to launch a new product as Spring water based with Vodka 7%. However We also we re- commend to add more fruit juice ratio in the product, to capture consumers that afraid the water based will reduce the taste of beverage

Recommendation“ To differentiate from other products exist in the market,

Twist offer: healthy & energize your daily life , low calories,

feel younger with super cool & classy packaging with

affordable price”

•Offering more diverse choices–with fruity tastes

Target market : as medium to premium market for medium

to high-income consumers, young generation and promote

on major events , malls, free-try to target consumers located .

Carrier

• According to our positioning product, we should offer to only 4 pack with open

carrier that easy for consumer to carry to party add more value to our product

Label

•We also recommend to use “pressure-sensitive label” to allows our R&D to

creative at most possible to attract more consumers, according to research result ,

people tends to buy because of packaging is attractive

Recommendation Bottle

• Since the majority of major competitors in the same market offer as a Glass bottle- (minor modify for attractive)

• We also recommend to promote “Save The World “ campaign by demonstrate CSR program to recycle easily

• Extend our product life cycle (Since our product contained Alcohol as ingredient)

• It also would be good for our consumer to see the container as a glass due to he/she can see the colour of beverage inside easily.

Price

• As we position our product for medium to premium, the pricing is another factor of value of brand

• We recommend to set price as “$9.45” that lower than our major competitors and gain our initial investment faster

• We also consider of LTOs that should be “ $1 to $1.25” due to we are new to market and it will help us to gain “Win-Win” strategy with Stores

Action Plan• Pre-launch & Marketing with Target events

• Young, High profiles, Social Events

• Caleb & Brand Ambassadors

• TV & Young media magazines

• Social network-Facebook, Twitter

• Adsence-Google, yahoo

• Free-try around party events and pubs areas

• Educate healthy awareness program

• Launch new product according to preference location

• Ontario-Quebec-Prairies-B.C and lastly Atlantic region

• Executive & Premium stores

• Delicate & Executive sales personal to visiting stores

• Closely monitors for any reaction in the market and adapt quickly if needs

• Premium hotline for suggestion and complains