1. Target

In this chapter the attractiveness and competitiveness of each segment will be analysed in order to choose one or more segments to focus on. The core-target is selected depending on several factors such as France’s competitive advantages toward its competitors, a rational use of its resources, the attractiveness of the segment…. It will also have to be consistent with the strategy. On the different geographical levels, only the most promising segments (1 or 2 segments) will be selected even if some others could provide interesting but less valuable perspectives. Of course, targeting issues differ from one another on geographical scale. For the global market, the approach chosen is to elaborate a value proposition for one or two types of customers. For the European and French levels, the vision will be multiple with two or three marketing propositions addressed to two types of consumers.

1.1 Growth

On the global level:

This segment obviously accounts for the broadest part of our customers. On this segment as any other, we are aiming at improving value over quantity. This is why we are targeting Image Seekers and Enthusiasts. These two segments are consistent with this vision.

A trend that appears to be a global trend, is that these two groups are the most promising. They are not the most numerous segments over the global consumers, as they accounts respectively for about 13% and 15% of consumers. However the trend is verified for instance in the US where image seekers account for 20% of the volume but 24% of the value; and the trend is even more impressive for the enthusiasts who account for 12% of the volume but 25% of the value . This trend is not always that pronounced over the globe, but in a consequent number of important countries.

Growth potential:

These segments have an interesting potential on both short and medium/long term. On the short term, parts of the world where these categories are declining are broadly compensated by countries with an important growth (see countries from the Asian-Pacific area where 6 out of 10 millionaires are and where there was a 29% wealth growth in 2015).

On the European level:

European people have the wine in their culture. The strategy for this segment is to be leader on the high and medium quality. The most promising segment for French wines (that are more traditional) are the Enthusiasts. French wines already lead the market composed by these traditional drinkers of high or middle quality. This is why we will use this comparative advantage and specialise and develop the offer for this type of customers. They account for about 15% of European consumers.

Growth potential:

The growth in term of value for this segment is propped up by the fact that these enthusiasts are quite young. The dynamism of these consumers will likely tend to make them everyday loyal.

On the French level:

The strategy chosen for France is to be leader in the value of sales on every quality range (high, medium and low). French wine consumers are essentially Everyday Loyal consumers, and we will focus on that type of consumer. Indeed, once French consumer likes a wine, he will have a tendency to buy preferentially this wine or that type of wine. This feature of the French market allows to maximise the value of sales thanks to a very good price discrimination. This is the reason why it is important to keep the quality offer as broad as possible and to be present on all segments. That way the everyday loyal consume a certain volume that quality will depend on its revenue. Low income will buy on a constant basis a low quality wine, idem for the high income who will buy for everyday consumption high quality wine.

Growth potential:

The growth potential in France is on the value more than the quantity. Indeed, produced quantities tend to diminish and quality tends to raise. That way the average price will rise allowing a more important value, but low quality wines will still find an outlet thanks to lower income consumers.

1.2 Competitiveness

Regarding the competitiveness, French wine are very well positioned in term of image. They even are the leader on the image due to the historical image of French products abroad (specifically in fast developing countries with a lot of image seekers). This bestows on French wines a competitive advantage that will be used and put forward. For the European market, French wines have also a non negligible advantage concerning the traditional segment.

1.3 Knowhow

The image of French knowhow concerning viniculture is not to be made anymore in the world. Nevertheless, the production tools and processes of production could be considered as archaic compared to the “New-world” way to produce wine. The French traditional way to produce should not become the reason of their lack of competitiveness and of a loss of even more market shares.

1.4 Strategy

Concerning the strategy, French wine producers need to cover the global market segment by segment depending on the geographical scale in order to maximise their profit in term the value. They must take special care to adapt to the specifics of the scales they are working on.