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October 29, 2007

Feature Article: Mike Paul’s lecture to the Wine Press Club

Posted in: Wine Marketing

Mike Paul is a wine marketer par excellence. Unusual in the wine industry, as most of the wine companies I know are production driven rather than marketing focused. So when he speaks people listen.

According to Mike Paul, Australia’s UK wine market is overdue for review: “Australia needs to become a bit more edgy… It needs an injection of personality, of irrationality”.

Paul said that for Australian producers to compete with the higher perceived value of old world wines they have “to accept that wine is an emotional not a rational purchase” and “be aware of the power of seduction”.

Paul further notes that:

“The idea that producers may have business goals which are not fundamentally about the need to hit financial or growth targets is rather appealing. It suggests one has perhaps arrived at a higher form of existence. But in terms of the cut and thrust of day-to-day business if one is competing with people who don’t need to make the same return on investment as you do - it’s hardly a level playing field”

“The thing about new world wines is that they all compete with each other, whilst in Europe wines compete within their own regions - a simplification to be sure but one of the key dynamics of the wine industry is contained in that comment”

“You need to use new technology if you are not already doing so. The internet is the perfect vehicle for communicating wine to consumers. Not only does it’s flexibility allow consumers to take in as much information about wine as they choose, but it allows you to communicate the personality of your brand to a carefully targetted sudience and secure feedback which helps hone your proposition. It’s also of course a route to market in it’s own right”

In terms of the UK wine market Australia had “first mover advantage”. The timing was perfect, the UK consumer was ready and willing to try alternatives, quality superb and the value for money proposition excellent. This has left other Southern Hemisphere countries, including South Africa , playing “catch-up”.

So how do other countries like South Africa “catch-up”? According to Joel Cawley it’s about increasing opportunities to create differentiated value. It’s just a matter of thinking about value creation differently. “One of the things you can get confused about in doing strategy,” says Cawley, “is losing sight of where real value comes from. If you are constantly creating new value then you have opportunities to harvest that value.”

With that promise comes a warning. “At some point you may stop creating new value,” says Cawley, “and when you do, if you continue to harvest, then at some point you’re no longer earning the harvest and, in fact, you may not even be doing yourself much good, because you’re no longer off creating new value; you’re stuck in a rut.” (Quoted in Wikinomics, by Don Tapscott & Anthony D. Williams)

Download the full lecture: http://www.winepressclub.com.au/pastEvents.cfm

By Mike Carter.

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