Taking commercial education to the next level

The following piece appeared on Harpers.co.uk last week and is complementary to my last post

A recurring theme at the recent Wine Vision Conference was that the Wine Industry needed to improve its marketing. We are too production oriented: we don’t really understand the consumer. If we have heard it once we have heard it a thousand times and I’d be surprised if anyone in the room in fact disagreed with the message.

The issue audiences usually have with such presentations is that they encapsulate the problem but offer no practical suggestions as to what to do about it.

For once, however, I’m pleased to say at least one speaker addressed this issue. Stephen Woodford, the Chairman of Lexus, emphasised the point that effective marketing was now within the reach of companies with smaller budgets to a greater extent than in the past because of the increased importance and cut through of on line media. He used the example of You Tube through which it is possible to reach large audiences for minimal cost if the campaign is both relevant to the target audience and creative.

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Stop selling and start marketing

Why we need a cultural revolution in the UK wine trade

The management guru Peter Drucker once wrote, “The aim of marketing is to make selling superfluous.” This was, I remember, translated at a company conference I once attended into “the aim of the marketing department is to make the sales force redundant”. I recall this was seen to be taking sales and marketing rivalry just a little too far.

Less open to misinterpretation, Drucker also wrote “the aim of marketing is to know and understand the customer so well that the product or service sells itself”. I’m not sure anyone would argue with that. Some might feel that this represents an unattainable ideal, but actually there are many examples of where it has been achieved – some right here in our own industry.

From personal experience I know that the Percy Fox sales team did not have to work very hard to sell Domaine de la Romanée-Conti or Dow’s Vintage Port in the late 80s, and the Southcorp sales team didn’t exactly struggle to sell Penfolds premium reds a decade later. As I write, in fact, producers of English sparkling wine are allocating rather than selling.

Some might argue that these wines sell easily not because they’ve been marketed but because of their “quality”. Ah, that wonderful word! Drucker had something to say about that too. “Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. A product is not quality because it is hard to make and costs a lot of money … customers pay only for what is of use to them and gives them value.”

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Vision 2034: Long term thinking and unknown unknowns

Forecasting the future may be a useful exercise, but let’s not pretend any of us really knows what lies ahead for the wine industry in the very long term.

Donald Rumsfeld famously said in 2002: “There are known knowns; these are things we know that we know. There are known unknowns; that is to say, there are things that we now know we don’t know. But there are also unknown unknowns – these are things we do not know we don’t know.”

I always thought the criticism he received for this was more than a little unfair and that it represented a pretty concise summary of not only one of the major risks of going to war but also, more generally, of longer term planning. Nassim Taleb, in his book The Black Swan, noted subsequently that unknown unknowns are responsible for the greatest changes in our society.

This came to mind as I read the recent report from Prowein, The International Wine Industry: Global Experts’ Vision 2034. Carried out by Wine Intelligence, the UK-based research company, this report was based on the views of wine professionals around the world as to the likely state of play in the category in twenty years’ time.

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