LUNGAROTTIcreatività, territorio, tradizione

Rossella CarpinoPaige Hannah

Zach McCarthy

April 10th, 2008

Presentation Overview• About Lungarotti

– Company Culture

• SWOT Analysis

• Cultural Profiles– Trompenaar’s Cultural Dimensions– Lungarotti’s Markets: Current & Emerging

• Marketing Strategy – Existing Markets– Emerging Markets

April 10, 2008

Lungarotti

• Power Culture at the top– Senior Management

• Role Culture– Underneath Senior Management

• Switch to Task Culture to manage expansion– Creativity– Teamwork – Horizontal structure

April 10, 2008

SWOT Analysis:Strengths

• Good re-use of facilities and resources available

• Aspects of culture used as support for sales

• Lungarotti brand carries a respected name– Awards– DOC

• Well-developed, wide-range product line

• Sold in 45 countries worldwide

• Name is beyond wine– Vineyards, factory, 5-star hotel, museum, olive oil– Le Tre Vaselle website is translated into English,

Spanish, Portuguese, Russian, Chinese and Japanese

April 10, 2008

• Lack of communication between agents and home base

• Power culture on top, Role culture on the bottom

• Passive PR– Agents to do the marketing– Relying on word of mouth for opportunities abroad

• Global Strategy: Thinking too small

• Webpage not in GermanApril 10, 2008

SWOT Analysis:Weaknesses

• Expansion Wine Therapy

• Potential of internal employees • Marginal costing to get into new markets

• Creating specific wines for other markets

• Becoming the Italian wine for emerging markets

• BrandyApril 10, 2008

SWOT Analysis:Opportunities

• Competition from Chile, Australia, New Zealand, France

• Successor Issues

• Culture can hinder innovation and expansion

• Competition gains advantage in emerging markets

• Domestic wines

April 10, 2008

SWOT Analysis:Threats

Cultural Profiles:Trompenaars’ Cultural Dimensions

• Universalist/Particularism• Individualist/Communitarian• Neutral/Emotional• Diffuse/Specific• Achievement/Ascription • Internal/External Control• Sequential/Synchronic

April 10, 2008

Marketing Strategies

April 10, 2008

Current Markets• European Union– Italy– Germany– UK

• United States

Emerging Markets

• China• India• Japan• Russia

Focus Strategy

Marketing Strategy:Focus Strategy

• Narrow Market

• Tailor marketing mix to these markets

• Looking to gain a competitive advantage

• Good for small companies

April 10, 2008

Existing Market:Italy

Characteristics• Particular• Communitarian• Affective• Diffuse• Ascription• Internal• Synchronic

Doing Business• Relationships are very

important– Relationships before

schedule

• Superiors are respected• Time is approximated

– Being late with good reason is OK

• Show emotions very openly

• Very little personal space • Use of proper etiquette • Work and Personal lives

not separatedApril 10, 2008

Existing Market:European Union

• Italy, Germany, UK

• Competitive Advantage

• Continue current operations

• Closer contact with agents

• Widespread marketing across EU

• Website translation into German

April 10, 2008

Existing Market:United States of America

• Increase in Price

• Internet Sales– PayPal Capability– Distribution Centers– Distributor Personally Delivers

• Partnerships with Hotels

• Improve motivation and relationships with sales personnel– Use of Marginal costing – Build Motivation of sales force

• Marketing Lungarotti over competitor’s wines– No screw top in USA– Certified with DOC– Premium Italian Wine

April 10, 2008

Emerging Market:China

• Target Market: Upper-class wealthy individuals– More millionaires per capita – The wealthy are westernized– Wine is becoming more popular

• Personal Status and brand image are extremely important

• Wealth concentration in few cities:– Shanghai– Beijing– Guangzhou

• Heavy direct marketing is essential

• Asia Distribution Solutions: main importer of western beverages

April 10, 2008

– Chengdu– Ningbo– Dalian

• Located in Southwest China

• Huge emerging market– One of the most important economic transport and

pharmaceutical centers in China

• More tea-houses and bars than Shanghai

• Laid back attitude– Enjoying life– Similar to Italians

• France and Australia already showcasing wine– March 20th: Australian wine showcase

April 10, 2008

Emerging Market:Chengdu, China

Emerging Market:China

Characteristics• Particular• Communitarian• Neutral • Diffuse• External• Ascription • Synchronic

Doing Business• Appointments are

important• Long decision making

process• Group is most

important, but rank is highly valued– Senior Executives lead

• Punctuality • No use of large hand

movements or personal contact

April 10, 2008

Emerging Market:China

Price• Expensive –

Communicate Luxury– Room for 60% price

increase in large distribution areas

• Selling to top 10%• Marginal Costs

– Only using variable costs and profit

– Use marginal costs to expand

• Fixed Costs constant (70%)

Product• High Quality Wines

– White wines towards women

• Wine Therapy• Brandy Line

April 10, 2008

Emerging Market:China

Place• Business & First Class of

Airplanes– Singapore Airlines– DragonAir– Cathay Pacific Airline

• Luxury Hotels• Upscale Social Scenes• The “Big Six” Cities

– Hong Kong: VinExpo– Chengdu: Important trade

center• Two Biggest Importers:

Montrose Food & Wine, ASC Fine Wines

• Lungarotti Distribution in major cities

Promotion• Push image of Lungarotti

wines– Lungarotti is the wine to drink– Associate with Status– Health Benefits, Wine Therapy– Awards, DOC

• Heavy Marketing– No Agents– “Impression on brand has

become the main reason for consumers’ purchasing actions.”

• VinExpo in Hong Kong (May)• 2008 Olympics• White wines for Women

April 10, 2008

Emerging Market:India

• Target Market– Upper-class individuals: Wine is consumed in top

2%– Wealth Concentration: Mumbai, Bangalore, Delhi– Westernized group– Media is now portraying women who drink wine as

sophisticated

• Growing interest in wine, especially among the wealthy– Developing Tastes– Wealthy are westernized– Wine is a sign of sophistication

• Less domestic production as tastes improve

• Typically prefer still winesApril 10, 2008

Characteristics• Particular• Communitarian• Neutral• Specific/Diffuse• Ascription • Internal/External• Synchronic

Doing Business• Hierarchy plays a key

role• Use appropriate titles• Must build relationships• Appointments are

important (made in advance)

• Punctuality• Slow process for

business transactions

April 10, 2008

Emerging Market:India

Emerging Market:India

Price• Expensive – Selling to

top 2%• Marginal Costs

– Only using variable costs and profit

– Use marginal costs to expand

• Fixed Costs are Constant (70%)

Product• Currently like sweet

wines, but tastes are developing

• Sparkling and rose wines target the affluent

• Luxury Good

April 10, 2008

Emerging Market:India

Place• 80% of wine sales accounted for

by major cities– Mumbai– Bangalore– Delhi

• Business & First Class on Airplanes

– Jet Airways– Cathay Pacific Airlines

• 5-Star Hotels, upscale restaurants, pubs and bars

– Accounts for 63% of volume sales

• Lungarotti Distribution Centers

– Wine storage in India is a problem

Promotion• Lungarotti is a luxury

wine– Awards, DOC

• Heavy Marketing– No agents

• Show women drinking wine (sign of sophistication)

• Wine Magazines – Sommelier India recently

featured Lungarotti

April 10, 2008

• Target Market: Upper-class wealthy individuals– The wealthy are westernized: education, travel– Wine is becoming more popular

• Food capital of the world– Upscale Italian Restaurants– Hobby is finding new restaurants

• Drinking is very popular; socially accepted

• French wines currently valued

• Wealthy are westernized– Western Education, Travel– Willing to Westernize some behaviors

• World Wine Day– Lungarotti participated per request of Japanese Princess

April 10, 2008

Emerging Market:Japan

Emerging Market:Japan

Characteristics• Universal • Communitarian• Neutral• Specific• Ascription• Internal• Synchronic

Doing Business• Teamwork is important

– Always deal with team, not individuals

• Hierarchy is respected• Formalities, procedures• Don’t show feelings

– Silence is a virtue

• Value relationships and harmony

April 10, 2008

Emerging Market:Japan

Price• Expensive – Selling to

top tier• Marginal Costs

– Only using variable costs and profit

– Use marginal costs to expand

• Fixed Costs are Constant (70%)

Product• High Quality Wines

– Red Wines– Accompany Italian

Meals– Enjoy sweet wines

• High status product• Brandy Line

April 10, 2008

Emerging Market:Japan

Place• Japanese Italian Restaurants• Business & First Class of

Airplanes– ANA All Nippon Airways

• Luxury Hotels• Upscale Social Scenes• Major Cities

– Tokyo– Yokohama – Osaka – Nagoya – Kyoto

• Supermarkets, Wine Stores

Promotion• Push the image of

Lungarotti– Lungarotti is the wine to

have– Associate with status– Awards, DOC

• Heavy Marketing– No agents

• Males in mid-30s– Need convincing

• Young Japanese Women• Joint ventures with upscale

Italian restaurants and hotels

April 10, 2008

Emerging Market: Russia

• Target Market:– Young, wealthy individuals– Highest number of billionaires per capita

• Domestic Wine Production is falling

• 30% Wine consumption increase per year

• Increasingly health conscious– Drink higher quality wines

• Growth of specialty wine storesApril 10, 2008

Emerging Market: Russia

Characteristics• Particular• Individual/

Communitarian• Affective• Specific• Ascription • External• Sequential/Synchronic

Doing Business• Openly show feelings• Work and personal lives

separated• Punctuality

– Indicates how serious one is

• Formality observed• Simple, straightforward

presentation• Rude to reject

invitations

April 10, 2008

Emerging Market: Russia

Price• Selling to upper class

– Young, extremely wealthy males

• Marginal Costs– Only using variable costs

and profit– Use marginal costs to

expand

• Fixed Costs are Constant (70%)

Product• Want seemingly

expensive luxury Wines

• Semi-dry red wines

April 10, 2008

Emerging Market: Russia

Place• Major Cities

– Moscow– St. Petersburg – Tomsk

• Business & First class of airplanes– Aeroflot– S7

• Specialized wine stores, Kiosks, Supermarkets

• Upscale Hotels, Restaurants

• Lungarotti Distribution Center in major cities

Promotion • Very fine Italian wine • Push Awards & DOC

Certification• Heavy Marketing

– No agents

April 10, 2008

Final Thoughts

• Organizational Cultural Changes– Role culture to a task culture

• Success in Existing Markets– Continue current operations– Small improvements

• Success in the Emerging Markets– Market as a luxury good– Get rid of distributors in emerging markets– Do the marketing yourself– Pay careful attention to cultural

dimensions April 10, 2008

April 10, 2008

LUNGAROTTIcreatività, territorio,

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