In June 2008, founder and CEO of Virgin Wines Rowan Gormley was attempting a management buyout from parent group Direct Wines. The result was he got the sack. ‘It was the best thing that ever happened to me,’ says Rowan, because six months later Naked Wines was born. This innovative online wine company, which does things differently, is now owned by Majestic Wine and its business model uses crowdfunding to support independent winemakers. 

Community Networking Drives the Business Model

The concept was to bring crowdfunding to the world of winemaking via the internet. At its heart is ‘a community of wine drinkers’ who join Naked and make regular payments, starting at £20 a month, into an online account. The name given to this special group of community members is Angels, as they help independent winemakers achieve their dreams by investing their regular contributions into the vintners’ businesses. They then have no worries about selling the wine and just need to concentrate on producing a quality product. In return the Angels receive a substantial discount when purchasing the wine. Paying for the product in advance is like the way we purchase airline and travel tickets, but is an unusual approach to pricing in the retail wine Industry.

Now with more than 200,000 Angels, generating a cool £3.5 million a month, those investments are substantial and help support a ‘community of winemakers’, producing new, interesting wines that cannot be purchased elsewhere. 

This co-creation of value approach between winemakers and wine drinkers is helping Naked Wines to continue to grow. It can attract talented, independent winemakers who want to experiment with new ideas, and connect them directly to the end consumer. This is reinforced by the reviews that people leave on the Naked Wines website, to which winemakers can respond directly via a specially developed app. ‘We knew that it would be beneficial from a customer perspective,’ said Laura Riches, former marketing director of Naked Wines, ‘but what we didn’t realize was that, from a winemaker perspective, they’d never had that type of feedback before........

Questions

1. Explain how and why Naked Wines is doing things differently. 

2. Describe the ways in which Naked puts its customers at the core of its B2B marketing activities. 

3. Discuss which type of B2B market Naked Wines is operating in, and identify who its customers are. 

4. Apply the buying process model to this case and evaluate the role of the end consumer. 

5. Suggest how producers and manufacturers are involved in creating added value.

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