Question
Read the case bellow and answer the related questions. From Howling Wolves to howling success The Howling Wolves Wine Group is a story of innovation,
Read the case bellow and answer the related questions.
From Howling Wolves to howling success
The Howling Wolves Wine Group is a story of innovation, marketing prowess and good strategic and tactical business planning. Allan Waters is the original owner of Harmans Ridge Estate, a 17-hectare property located in the world-famous, premium wine region of Margaret River, Western Australia. Commencing in 1998, he established a hi-tech winery to produce a range of quality wines using a contract winemaking business model. In 2002, after establishing and refining this business model, Waters joined forces with friends Vaughan Sutherland, a successful and innovative advertising professional and Damian Knowles, an experienced fine wine retailer, to create the Howling Wolves Wine Group (HWWG). This powerful combination of production, marketing, distribution, wholesale and retail sales expertise is a key factor in the rapid, yet planned, growth of HWWG into some of the most promising markets for premium wines worldwide. The corporate team has grown and changed somewhat over the ensuing decade to reflect the growing needs of the business, as has the winemaking personnel roster.
Throughout a decade of growth, the company has maintained a clear strategy to focus on innovation in branding and winemaking technologies to project their premium products and winemaking skills into diverse international and domestic markets. By 2012, the Wilyabrup winery had grown in capacity to produce and store over 1.5 million litres of premium wine each year. Looking beyond this impressive volume of wine production, at the core of any good business model is a quality product that will satisfy customer needs. To ensure the quality of the wines is maintained at these high production volumes, HWWG has historically employed the skills of some of Australia's most respected winemakers. These skilled people include Chief Winemaker Dave Longden. Prior to his appointment at HWWG, Dave was a key player in developing the quality and volumes of wine produced at Evans & Tate.
Winery is a pioneering premium brand in the Margaret River region. With the 15-member plus vintage international winemaking team, Dave oversees the production of award-winning wines for a diverse range of domestic and export markets.
The business plan for HWWG has a geographically segmented strategy operating at multiple price points, with products, brands and entry strategies to suit local markets in Australia, Switzerland, Singapore, Indonesia, the US, India and China. The wines produced range from quality entry-level wines of the Eight Vineyards brand, and several styles of white, red and sparkling wines sold under the Howling Wolves Claw banner, to the super-premium quality Small Batch range.
Each wine aims to represent an exceptional value within its price range and is designed with global wine markets and trends in mind. The group has some salient stories about when a plan needs to be changed for strategic, tactical or practical reasons. For example, in 2003, the original brand Howling 'Wolf' was identified by the Australian Wine & Brandy Corporation (export regulator) as contravening the International Geographic Index because there was already a commune in Germany named 'Wolfe', hence the name change to the plural Howling Wolves. This change of branding was slight but still entailed a great deal of unplanned expense in changing signage, bottle labels, packaging, marketing material, websites and all corporate livery.
Because the development of brand names and products linked with innovation and quality is a key strategic direction for HWWG, clear ownership of trademarks was considered a critical success factor. Registered trademarks have been filed, and the business rigorously defends any identified breaches of their intellectual property. In 2007, the group successfully brought legal action against a new start-up California- based business calling itself Howling Wolf Wines, which was forced to cease trading under that name in US markets.
Another strategic marketing and distribution plan was to create the brand 8 Vineyards for the Asian market. The strategy here was to back up a good entry-level product with a brand name that resonates in Asian cultures. The number 8 is considered a particularly lucky number by the Chinese community. To capitalise on this, the product was placed in the mainland Chinese market prior to the 2008 Olympic Games.
A further change of operational and financial plans was required to enter the Indian market. Because India imposes up to 250% tax on imported wines, a strategic decision was taken to produce the wine in India, to avoid this tax impost. A hi-tech winery modelled around what had been learned at the Australian winery was planned in a 50/50 joint venture with Birhans PL, a well-known Indian distiller and distributor.
Premium Margaret River cuttings were grafted to rootstock planted on a 100 acre property in Shreepur, a region with a suitable climate and soil profile located about 300 km south of Mumbai. HWWG have enlisted experienced Margaret River region viticulture consultant, Tim Quinlan, to oversee the transport, planting and cultivation in Shreepur. According to the director of the JV company Harshawardhan Apte, the long-term plan is to transfer the entire production and distribution of the 8 Vineyards range to the Indian joint venture. In early 2010, the first vintage was harvested from the vineyard in India.
Another chapter in the HWWG story sees the group producing 'The Lone Wolf' range exclusively for the Coles Liquor Group. This action opened another opportunity to expand this entrepreneurial forward-thinking wine production and marketing business.
Like any strategically oriented business, HWWG will no doubt continue to revise and evolve their strategies and tactics to suit the external environment and respond to opportunities; but it is clear that the central tenet of a strong focus on planned innovation and branding will form the basis of the growth strategy of this local and global success story.
A. List the 4 Ps of the extended marketing mix by describing the specific strategies adopted by HWWG related to each 'P'. Give examples.
B. When creating a strong brand, wine recipes, or new products, it is strongly recommended to adopt protection strategies as a critical market strategy based on intellectual property (IP). Considering the HWWG case, they registered for a trademark as one of the intellectual property modalities available in most countries. Besides the brand, please, describe at least one more suitable IP modality to the context of HWWG and how the company can guarantee their differentiation and competitivity adopting this IP strategy. Remember, not all modalities are suitable for the HWWG context.
C. Regarding the 'growth strategies' discussed in the textbook, cite at least one of the four possible strategies for growth, providing details and examples of how HWWG could increase revenue or expand the business internally and worldwide.
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