'Ceja Vineyards Marketing Analysis Essay\r'

'eja Vineyards’ Decision to Directly Market to the Hispanic Community depth psychology The Case Study, â€Å"Ceja Vineyards: Marketing to the Hispanic drink-colored Consumer?” by Armand Gilinksy jr., Linda I. Nowak, Cristina Santini, and Ricardo Villarreal deSilva (2010) outlines a connoisseural close a blue, family own boozery in atomic minute 20 is facing. The fuddlery, Ceja Vineyards, is situated in the Carneros orbit and is equ all(prenominal)y owned by four Mexi throw out born immigrants of bring out workers. Amelia Moran Ceja, Pre demeanornt, and her husband Pedro Ceja, Artistic Director, along with Pedro’s buddy Armando Ceja, Winemaker and Vineyard Manager, and his wife Armando Ceja comprise the self-possession team. Amelia, Pedro, and Armando grew up working in the Napa vale vineyards, and in 1983 purchased fifteen acres in the Carneros region to begin their own vineyard.\r\nThey planted their first grapevines in 1986, and had their first harvest in 1988. From 1989 to 2000 they purchased additional plots of stain and planted a variety of grapes. Their booze grape growing community is named Vina del Sol. They take a shit enough grapes for 65,000 cases of fuddle-colored per form. In 2001, the company took an otherwise large smell and began producing their own wine, under the branded name Ceja Vineyards. Their wine is made using their own grapes large by Vina del Sol. In 2002, Ceja Vineyards was named â€Å"Winery of the Year” by a panel of ball clubty wine writers. Now it is 2007, and their wine merchandiseion has doubled almost every year to the current numerate of 10,000 cases a year.\r\nProblem appellative\r\nThe key issue in the case plain is whether or not they should make a project effort to bottom Hispanics in their marketing efforts. They attain the podecadetial of marketing to Hispanics due to the influx in Hispanic population in the U.S., and the continued project increase. Their chi ef(prenominal) concerns, argon that they pass on hit to spay their marketing strategies, and incur substantial promotional expenses. They similarly will not lower their wine prices in effect(p) to market to Hispanics. Amelia wants the company to focus on count snitchs to the consumer so they don’t guard to suppose on the current distri thation system.\r\n abridgment\r\nTo recognise the present situation Ceja Vineyards is in and to best root on a course of action, tercet analysis techniques were employed. These three be the deck out Analysis, Porter’s vanadium Forces, and Value-Chain Analysis.\r\nSWOT Analysis\r\nA SWOT Analysis was applied first to the situation to assess the essential Strengths and Weaknesses, along with the orthogonal Opportunities and banes. Ceja Vineyards has a multitude of Strengths. Their ownership knowledge is based on a lifetime of real world experience. They grew up picking grapes, and turn back every aspect of the company guaranteeing visor quality. They ready a unique history, in that they ar Mexican immigrants and the company is family owned. The vineyard is in a phase modulation location. Carneros was the first wine region based on climate rather than political boundaries. Their wine is the three estates grown using grapes from their wine growing company, Vina del Sol. The company is debt free from long time of solid investing and planning. They employ a wine club, to be able-bodied to sell curbly to the consumer.\r\nCeja Vineyards is not without its weaknesses.\r\nTheir small production sum limits their marketing strategies due to not organism able to compete head to head with the mega-wineries. They likewise fool limited distribution due to their size, though the offshoot of Boutique distributors and their wine club has helped. As for external factors, Ceja Vineyards looks to maintain a plethora of Opportunities to increase their select. They could nates the ever growing U.S. Hisp anic Market. There be currently forty million Hispanics in the U.S., 20% who earn more than $100,000 per year. They are also intercommunicate to be the fastest growing population for the predictable future. In 2006, they had to turn hoi polloi away from a wine tasting in Los Angeles because of the study. Hosting more of these events could be beneficial. Their wine club members receive a discounted sell price, but Ceja Vineyards could introduce a â€Å"Rewards Program” for recruiting new members.\r\nThe wine market has exploded in the 2000s, and has produced quite a hardly a(prenominal) Threats for Ceja Vineyards. Competition has become crimson recently as the number of wineries grew by 26% from 2004-2007. The â€Å"three-tier system” for distribution does not favor small wineries. It places a different tax rate interdependent on state, and the â€Å"Big Five” distributing companies hold 52% of the distributing market. Boutique distributors are not abl e to pop off in all states, and are evermore at threat of being purchased by the major distributors. Ceja Vineyards has make well for itself so far, but there is always the threat of growing too fast, without the required demand. The SWOT analysis shows a very affluent(prenominal) amount of strengths and opportunities that would suggest an aggressive strategy if not for Ceja Vineyards personal furrow strategy of slow growth.\r\nPorter’s Five Forces\r\nPorter’s Five Forces was adjoining used to determine the militant environment. The Five Forces method acting is used to determine a company’s profit potential for a particular industry. The Threat of late Entrants †High. Despite the high start-up costs, and that vineyards and wineries are a long term investment, it has not stopped people from joining the market. In 2006-2007, 12,000 new brands were introduced to the market. The number of imports in the U.S. market has also grown. Most noticeably, impor ts priced above ten dollars, that would compete with Ceja Vineyards, have grown â€Å"44 percentage annually from 2005-2007” (Gilinksy Jr., Nowak, Santini, and Villarreal deSilva, 2010, p. 15).\r\nThe Bargaining Power of Buyers †High. The main purchaser of wines from wineries are supermarkets and warehouse stores. These location account for 80% of wine retail gross revenue. Another factor that is increase the bargaining power of buyers is that there are few key buyers since the, â€Å"retail sector witnessed considerable desegregation in the early 2000s, due to mergers of both supermarkets and spirits store chains” (Gilinksy Jr., et al., 2010, p. 14).\r\nThe Bargaining Power of Suppliers †Low. Suppliers in this instance, take to be small market suppliers. Gilinksy Jr. et al. (2010) states, â€Å"The top ten wine companies in the U.S. controlled 82 pct of all shipments,” so while the larger producers whitethorn have some bargaining power, it doesn ’t drop out any for smaller quantity producing entities.\r\nThe Threat of turn Products and Services †Low. Ceja Vineyards location is its greatest strength against the threat of substitute products and services. While there are other wine products, and other companies that sell even the selfsame(prenominal) type of wine as Ceja Vineyards, there are only so many that can produce it using Carneros grapes. In the wine industry, the quality of your grapes are your biggest asset, and each location produces a distinct flavored grape. pot who prefer Carneros grapes will only have so many creams due to its limited size.\r\nThe Intensity of competition among Competitors in an Industry †High. As stated previously, the wine market is growing each year, both domestically and internationally. As is the number of wine producers which is outpacing the market growth. This combination makes it harder each year to create a demand for your product with so many options available to the consumer.\r\nValue-Chain Analysis\r\nTo understand if a company has a competitive advantage or not, a Value-Chain analysis can be performed on the company’s business manakin. For this report, we will only focus on the old activities of the Value-Chain analysis\r\nInbound Logistics. Ceja Vineyards is classified as an estate-grown winery, because it is located in the same place the grapes are grown. The vineyard that grows the grapes, Vina del Sol, is owned by the same classify so this makes this portion of inbound logistics ideal. Being located in California, also helps with the inbound logistics of bottles, corks, and bottle labels because California has the largest number of wineries per state in the United States. This is going to mean any supplies needed for wine making will be readily available.\r\nOperations. The four owners consist of both married couples, and each has an equally weighted voting in any decision. They are also family, and function nearby ea ch other making converse easy, in theory. They also grew up around vineyards so all have a deep catch of what is needed to run the business. The quality remains high because according to Pedro, â€Å"we’ve done quality control all over every aspect, from growing to the cork that goes into the bottle” Gilinksy Jr. et al. (2010). The only improvement to the operations side would be if Pedro quit his day job and focused his full attention on the winery.\r\nOutbound Logistics. This is the area that is the main issue for the Ceja’s. The industry is set up to cater to the cumulation producing wineries. To mass distribute their product they would have to use the â€Å"three-tier system”, which would only pay them 50% of the retail value of their product. Other options are the boutique distributors, but they can’t distribute to the unblemished U.S. This is why Amelia wants to sell directly to the consumer done their wine club, and tasting room to c ut out the nerve center man and increase their profits.\r\nMarketing and Sales. The grape producing side of their company, Vina del Sol, is doing terrific. The demand for it is very high as it already has five companies on the waitlist to buy grapes. While, Ceja Vineyards sales have doubled each year since introducing their branded wine it is hard to judge the ceiling. This is mainly because the company has grown slowly, and been vigilant of growing too fast. The company realizes though, they have to determine on exactly how to market their product though if they want to continue increasing demand for it, and that is the issue we are trying to solve.\r\nAlternate Solutions\r\nThe Ceja’s have multiple options they could take, and still be successful. The easiest option would be to change nothing. They have increased their tax income and profits each of the past three years according to their income statements. Also, they stated they had doubled their wine sales each year, a nd were ranked number 2 in Wine Business Monthly’s Hottest New Small Brands. With the growing wine market and critic accolades, they would probably continue to grow without changing anything.\r\nThey could decide to target the entire Hispanic population, and market heavily. This mass marketing strategy would reach the most people, but would be very expensive. It would require an understanding from all the owners that it could produce significant losses during the transition period. They could look at Round pile Vineyards & Cellars as a blueprint. They did an ethnic outreach program in 2004 to target Hispanics and Asians. Their total case sales increased cd percent from 2005 to 2006.\r\nCeja Vineyards could work directly with their current Wine Club members, asking them for feedback on what made them join. go game the members rewards for purchasing so many cases a year, or recruiting new members. Currently, half of the wine clubs 1000 members are of Hispanic descent. Th ey could speak directly to this portion of the group to try more of a grassroots grade campaign.\r\nCeja Vineyards could also market to only a portion of the Hispanic community. Since they refuse to lower their prices, they could market to the nine percent of Hispanics that make up the â€Å"mostly acculturated” percent of the Hispanic population. Wine consultant Sandra Gonzalez stated, â€Å"these Hispanic wine consumers are 96 percent more apt(predicate) to spend $20 or more a bottle than non-Hispanics.” (Gilinksy Jr., et al., 2010, p. 14).\r\nRecommendations\r\nCeja Vineyards in the enviable position of being a growing company with no debt in a growing market. After analyzing Ceja Vineyards’ business model and the state of the external environment, Ceja Vineyards should market to the Hispanic population.\r\nAs of 2005, there were 12.5 million Hispanics in California alone. This is an frightful untapped market that if tapped into would allow Ceja Vineyardsà ¢â‚¬â„¢ to rely less(prenominal) on the big distributors and more on direct to consumer sales. Ceja Vineyards’ should continue to grow their Wine Club through the use of promotions and a reward system, while also reaching out to the â€Å"mostly acculturated” percent of the Latino population. They should also look into the marketing strategies Round Hill Vineyards & Cellars employed to attract Hispanics and Asians to their brands.\r\n'