1. Methodology

We picked the 10 most important wine consuming countries and observed the behaviours in terms of wine consumption. This means studying the motivations to drink wine and how to persuade consumers to drink French wine.

Here is the methodology we chose in order to elaborate our marketing strategy:

For each country from the top 10, we considered the area around it and assumed that the consumer profile was approximately the same. For instance, when we consider the Asian market we assume that Chinese consumers have approximately the same profiles as Thai our Vietnamese consumers. Given the fact that our reference country is always the most important wine consuming country in the considered area, we can thus conclude that this approximation lead to an acceptable bias.  

We established 6 different markets through our segmentation, which are Western Europe (same profile as UK, Germany, France, Spain, and Italy), North America (USA), Asia (China), South America (Argentina), Eastern Europe (Russia) and Oceania (Australia). Of course, we are fully aware that Western Europe includes many different countries: some are huge wine producers and export large volumes of wine, others are only consuming; some have beer as first alcoholic beverage…

As mentioned earlier, we will focus on value rather than on volume. The major reasons are that French wine exports are the highest in value worldwide (growing trend) while being only third in volume, furthermore, French wines have already acquired a relatively good reputation worldwide. In the eyes of its consumers French wine has a higher potential value than its direct competitors’.

Finally, we think that it would be interesting at this point to make a parallel with “Champagne” whose actual strategy is to focus on value rather on volume.

2. Strategical axes

The retained strategies depends on the geographical area (at Global, European and Domestic scale), and on the quality of the production (high, medium or low quality).The result is an aggregate three-axis strategy.

1. The strategy for French producers on the global market is to be leader on the high quality segment. The first reason is customer-oriented: due to the importance of the added costs of transportation on low-priced wines, the retail price would be excessive. Customers would thus spend a lot of money on an expensive French wine, whose quality would be disappointing. The image of French wines would suffer from these expensive and mediocre wines.
   A second reason is the image of French product across the globe. They are broadly related to luxury and knowhow, surfing on that aura would allow producers to improve their image at a little cost. They would solely have to use already existing stereotypes; costs of communication are thus limited. This global strategy would allow the most profitable wines, those with the highest added value but the most difficult to sell given their prices, to find an outlet with the wealthiest around the world.
    

2. The strategy for French producers on the European level is to be leader on both high and medium quality segment. Drinking wine is, at disparate levels, already in the European mentalities. Furthermore, the European market is easily accessible thanks to the common market. This makes of Europe a very interesting outlet in term of volume. However, the competition from other European wine producers, mostly on the lower quality wine segment, that also have access to the common market limits the gains in term of value. This is the reason why the focus should be put on the segment with the fewest competition (economically confirmed by the comparative advantage theory), the wines of high and medium quality.
    

3. The strategy for French producers on the national level is to stay and increase the leadership on every array of quality, high medium and low. The first reason is that an economic optimum can be easily reached thanks to price discrimination. Indeed, every existing quality would be available at every price range. This is a way for producers to reach maximum profit, and thus to reinvest in their production tool and to become more and more competitive.

Furthermore, thanks to raising awareness about the importance of locavorism or the preference of short circuit consumption (not “national preference” which would be forbid by the European law), volumes could be increased thanks to winning back market shares from foreign wines.