North Land Winery Case Study
ENGG439 Case Study - Week 5
North Land Winery are a solid, well established, family-based winemaker headquartered in Wollongong, NSW. After ongoing success the vintners have addressed the idea of expanding their wine distribution to Ontario situated in Eastern-Canada.
So far NLW's most innovative product involves soil-aged merlots and chardonnay grapes grown in areas prone to wild fires which was labeled "Deep Burn". The purpose of these wines were to exploit these wild fires to give the wines "smoky" characteristics. Given the popularity of this flavor in North American foods & beverages, this wine would be expected to pair well with many Canadian palates, particularly red meat dishes. Ideally this product would be a key seller to help develop a name for NLW and give it more exposure. NLW's latest addition is the ice-like wine "Cold Burn", something similar to the Jacob's Creek line "Cool Harvest". This is believed to have some potential with Canada having such a cold annual climate, however for the same reasons there is expected to be a high degree of competition emanating from NA vineyards.
This case study will evaluate 2 possibilities to achieve market presence in Canada as well as the drawbacks and pro's of integrating the NLW brands. It is paramount to determine the point when the cost of the 2 options become equal, the "no difference point", and ultimately a decision can be reached based on evidence and logic.
The 2 methods considered for expansion are:
Option One - "Wine Representatives"
Pre-selected sales reps work under commission for the winery to deal business with a defined set of wine retail outlets shelving the NLW labels. Costs for the reps would be proportionate to the turnover of product volume. Commission would be 10% of sales. Pros | Cons | Smaller initial outlay | More training required | More direct communication to retail | Product knowledge is a MUST | Higher control over marketing of goods | Risk of being dependant |
North Land Winery are a solid, well established, family-based winemaker headquartered in Wollongong, NSW. After ongoing success the vintners have addressed the idea of expanding their wine distribution to Ontario situated in Eastern-Canada.
So far NLW's most innovative product involves soil-aged merlots and chardonnay grapes grown in areas prone to wild fires which was labeled "Deep Burn". The purpose of these wines were to exploit these wild fires to give the wines "smoky" characteristics. Given the popularity of this flavor in North American foods & beverages, this wine would be expected to pair well with many Canadian palates, particularly red meat dishes. Ideally this product would be a key seller to help develop a name for NLW and give it more exposure. NLW's latest addition is the ice-like wine "Cold Burn", something similar to the Jacob's Creek line "Cool Harvest". This is believed to have some potential with Canada having such a cold annual climate, however for the same reasons there is expected to be a high degree of competition emanating from NA vineyards.
This case study will evaluate 2 possibilities to achieve market presence in Canada as well as the drawbacks and pro's of integrating the NLW brands. It is paramount to determine the point when the cost of the 2 options become equal, the "no difference point", and ultimately a decision can be reached based on evidence and logic.
The 2 methods considered for expansion are:
Option One - "Wine Representatives"
Pre-selected sales reps work under commission for the winery to deal business with a defined set of wine retail outlets shelving the NLW labels. Costs for the reps would be proportionate to the turnover of product volume. Commission would be 10% of sales. Pros | Cons | Smaller initial outlay | More training required | More direct communication to retail | Product knowledge is a MUST | Higher control over marketing of goods | Risk of being dependant |