Internal Capability & Core Competencies Of Penfolds

By Author: balvinder
Total Articles: 55
Comment this article

Penfolds has created a different name for itself in the Australian market. The brand has created a niche for itself in the manner in which the wine production takes place at the first place without compromising on the quality standards. Majority of the players serving the market in the premium segment get their wines from a single region or a single wineyard in many other cases. This ensures that the quality remains consistent and customers get a fine blend of taste every time they purchase the brand. However Penfolds in opposite of industry standards get their wines developed from multi region blends which get their grapes from wine yards across South Australia. These different grades of wines are then classified as per their grades and quality (Robinson, 2006). This approach has helped Penfolds developed a competency in the market by developing consistent high standard wines in the country.

Penfolds develop Australia’s most famous wines using this different methodology which helps it score over its competitors in the market. The company has thereby established some of the best brands in the market like Bin 707, Grange ...
... etc (Jade, 2010).

Market Program Elements

Penfolds is very aggressive in its marketing across the domestic and international markets. The company makes sure that the marketing elements are in line with the brand image in the market. As many of the Penfolds wines are best in their class they are promoted in such a manner that they do not lose their premiumness in the market. The promotion is mainly done through premium lifestyle magazines and one on one marketing to Penfolds current customers and also the prospective clients. Customer loyalty is very high in the wine business and thus the promotions are done in a very focussed and direct manner (Snow, 2009). The supply is kept low in the market so that the product does not become a commodity. As a result of this the pricing is also kept very high to support the exclusivity of the wine and also the premiumness of the brand in the market. These wines are available only at specific outlets which matches closely with the image of Penfolds.

The company supports the channel network in a very exclusive manner so that exclusivity is maintained (Evans, 2007). In all the marketing elements Penfolds makes sure that they support the positioning of the brand and its image in the market.

Current Performance Situation

Penfolds stands at a very comfortable position in the Australian market as its brands continue to lure the customers. The company is known for its iconic wines in the market and also for bringing rarest wines in the market for special customers. The sales have been increasing year on year at healthy rtes. The wine market in Australia has grown by 10% for the last few years and Penfolds revenues as a result has shown an increase of 24% in the past 3-4 years (Kramer, 2008). Much of this has been because of the rising disposable incomes of the people and thereby raising the discretionary incomes. The market performance took a hit in 2009-10 as there was global recession around the world which not only affected sales in the domestic market but also the export market. Wine sales depend much on the economical situation as consumer confidence is directly linked to it.

Penfold’s Grange is the most successful product of the brand which has been the top performer in the market for over four decades. The wine contributes more than 5% of the business revenues as it leads the market and has resulted in establishing the Australian wines across the world (Clark, 2008). Penfolds profitability has also increased over the years as it earns a good margin on the wines sold. The margin saw an increment of 6% in the last two years as brand stands a good image in the market among the consumers thereby supporting its premium pricing (Jade, 2010).

Problems and Recommendations

Penfolds has been recently struggling with a problem related to its brand portfolio as it has to constantly keep an eye on the brands on offering in the market. Penfolds has a very strong and comfortable position in the market in the premium wines category. Its premium brands are doing extremely well in the Australian market. However the company is facing the heat in the affordable wines category where it has few brands to offer to the customers of different profile (Jancis, 2006). Penfolds is facing stiff competition in this category not only from the existent competitors but also the ones who are entering this industry owing to the growth perspectives in it. Some of the recommendations related to this problem are as follows:

1. Penfolds should bifurcate its product portfolio in two businesses which can cater to premium and affordable wines separately in the market. This would result in better business focus on both the product lines and would help the company to manage them effectively too. The similar strategy is followed by many companies which cater to different set of customer profiles with different brands although they follow umbrella branding in their promotional activities. This ensures that one brand name is used and its power be utilised to serve a wider range of customers in the market with different set of products. It helps in leveraging the brand in the market.

2. The brand can also come up with a separate new brand of wines in the market which is specially made for the affordable class of customers Many companies have used this approach in the market where they use their brand power in the market to launch new products in the market to target either the same set of customers or an entirely different class of customers (Porter, 1980). There is a need of an entirely different marketing strategy for both class of customers to attract them and to retain them as well. Separate branding strategy would help the brand have a clear cut strategy in the market

3. Penfolds can acquire one of the good brands in the market which has a good brand presence in the affordable wines segment and a loyal customer base. This would help Penfolds respond to the competition in a much faster manner and also remove one of the competitors from the market (Chakravarthy, 1997). It is essential in such a strategy that the brand has a good image in the market, offers a good product to the customers and matches closely with the objectives with which the company is looking to acquire it. Penfolds has a huge brand equity in the market much of it is due to the premium wines it has in its portfolio. The acquisition should be done with such a company which has an image resembling closely to the company so that Penfold’s customers do not get a negative image of the brand in the market.

Assignment help and its services are needed by most of students these days. It becomes a difficult choice for students to choose the correct help with assignment service. Well not to worry my dear friends www.myassignmenthelp.com and http://www.myassignmenthelp.co.uk has arrived for your rescue. Now you can get assignment help in any subject that you are having difficulty understanding with, our experts are Phd and masters level writers who have ability to write eloquently, making the whole assignment an amazing experience for you and your professor as well. Moreover, you can learn and grow with the site as they are really helpful and provide help with assignment in Marketing assignment, Accounting assignment, finance assignment, Law assignment and Nursing assignment Visit the website to book the assignment

About Author

My self Balvinder and i am writing an article about Educational assignment Help. here is very helpful Education information like Assignment help, assignment writing, Physics Custom Assignment, marketing assignment help etc. For more information visit:- http://myassignmenthelp.com/