Executive SummaryThe Grand Chais de France Group has been a leading company in the Dutch market with its wine and

spirits portfolio for many years now. However the GCF group has been losing market share during the

past 4 years. (Source Euromonitor, 2015)

In order to invert the GCF market share decrease and their wine volume drop down, a new strategy for

the Dutch Market, a premium Private Label wine without GCF endorsement will be proposed and

discussed in this report as a potential solution towards the “Private Label” threat.

Once the strategy established, and in order to deliver a product that will fit the strategy, an empirical

research was conducted collecting the appropriate information about the market itself as well as the

forecast made for the wine industry in the Dutch Market.

Qualitative and Quantitative research helped understand the growing positioning of private labels, as

well as the modern wine consumer profile. A survey designed and applied to 116 participants in the

city of Groningen established element such as the price and market target. An objective observation in

an Albert Heijn store and two interviews were made, one with an Albert Heijn manager and the other

with a winery competitor manager. The insight facilitated the construction of the promotion and

distribution strategies.

Enriched from those researches, the best product to deliver was a premium white wine; Chardonnay

produced by the Maison François Martenot in Bourgogne as the GCF group already owned it. The

packaging was built in order to differentiate as premium wine from competitors and retain the best

quality possible. The name of this wine would be “Le Papillon Blanc”, the white Butterfly in French

sold at a price of €7.99. Sales will be pushed by some promotional actions such as, in-store

presentation and discount as well as seasonal different packaging established to increase customer

interest.

The price established after the previous researches made had to cover all the expenses related to the

production, the packaging, the distribution and the promotion. But also guarantee a sufficient profit

margin for the GCF group as well as for Albert Heijn Group, the chosen retailer for the Dutch Market.

Once the retail price and expenses established, sales forecasts have been made. If the current scenario

is faithful enough, around 265 200 bottles would be sold in 2017 for a global turnover of

€2,118,948.00, a net profit of €317,842.20 for the GCF group and an interesting net profit of €

635,684.40 for the Albert Heijn Group.

2

Table of contentIntroduction

Product DescriptionResearch Methodology

LimitationsTarget Market Definition

Market description & segmentationIdentification of target segment and populationDemand EstimationSales forecast

Product StrategyPackagingAfter sales care

Pricing strategyProduct positioning & competitor analysisPrice of Product & ComponentsFinal Retail Price

Placement & Distribution StrategyThe production regionMarketing intermediaries In the production and distribution of the premium private label wine is one further major market intermediary at play - the wholesaler Albert Heijn.Transportation

PromotionFinances

Distribution CostPackaging CostProduction Cost

ConclusionRecommendationAppendices

Appendix B – SWOT Analysis Dutch average annual incomeAppendix C – Consumer Expenditure Average Annual Real Growth by Category: 2010-2030Appendix D – Number of On-trade Establishments by Type 2010-2015Appendix X – Label design of Le Papillon BlancAppendix XX – Packaging designAppendix XX – Cost structure of packaging for “Le Papillon Blanc”Appendix XX – Homepage of “Le Papillon Blanc” WebsiteAppendix X – White Wine Pricing

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Appendix XX – Survey result on price categoryAppendix XXX – The Effect of Alterrations on Wine Vield (Gallons per Grapes)Appendix XX – Excise duty per percentage of alcohol content in the NetherlandsAppendix E – Distribution of Alcoholic Drinks by Format and Category: % Off-trade Volume 2015Appendix F – Selling Margin of Typical Wine Brand in Retail Channel Which Uses Wholesalers 2015Appendix XX – Forecast Sales of Wine by Category: Total Volume 2015-2020Appendix C - Market share of distribution channelsAppendix BLA BLA – Interview transcript with Mr. Johannes Lager, Industrial Design studentAppendix XX – Interview with Christine Fabre of Muscat St. Jean in France conducted by Kader

Appendix XX – Interview with Leonie Vervelde

4

Introduction Brands are fighting a fierce competition fight also increasingly with private labels, which are

becoming more and more common in the local supermarkets. In the past private labels were mainly

used to offer a product in a lower price section, however, there are now also more frequently more

premium private labels on the market, competing for market share with more sophisticated brands. As

a consequence, brands need to develop a strategy to keep their position in the market.

This report will introduce the strategy of developing a premium private label wine without

endorsement by GCF group. In the following pages different aspects of this process will be discussed,

based on the methods of quantities and quantities research have been used to create an objective

(Euromonitor, 2009).

Product Description

In corporation with Albert Heijn GCF Group has developed a not endorsed premium wine brand

called “Le Papillon Blanc”. It will be available in the Albert Heijn for the retail price of 7,99€ per

bottle. The lable and label design can be seen in appendix A and B.

Research MethodologyThis report is conducted in the field of Product Strategy and Development. The focus of this study is

to determine the appropriate recommendation regarding a Non-endorsed Private Label Wine

introduction implemented by Grand Chais de France Group. Therefore, in order to deliver a fitting

proposal, empirical research was conducted, collecting and analyzing information from different

sources as well as applying qualitative and quantitative research. First, investigation was carried out on

current literature and publications about the growing positioning of private labels and the strategic

response of national brands manufacturers, as well as on the modern wine consumer profile in the

Netherlands. Different data was collected in regard to demand growth, wine production process, legal

requirements and regulations in the Netherlands for imported wine and pricing strategies for the wine

5

industry, using sources such as Euromonitor. Secondly, having collected sufficient preliminary

information about the market’s environment, a survey was designed containing questions using a

Likert scale format, with the purpose of gathering more specific data about preferred price range, wine

consumption habits, wine type preference and purchasing channels. It was then applied to 116

participants in the city of Groningen. The survey was first applied to a certain number of assistants at a

Wine Festival in the city center, with the intention of getting current wine consumers as participants.

The remaining sample of the survey was from aleatory pedestrians in the city center surroundings and

shoppers at the Vismarkt. The survey results were analyzed using Enalyzer and SPSS and used as

supportive factors to established product elements like price and market target. Qualitative research

was conducted using two different approaches; objective observation in an Albert Heijn store in

Groningen’s southern district Helpman at the Helperplein, and the second approach being interviews

with key sources. The first interview was with a former Albert Heijn Store Manager and the second

interview was conducted with the  manager of Muscat St. Jean, a major GCF French competitor. The

insight obtained from both methods facilitated the construction of the promotion and distribution

strategies suggested.

LimitationsAlthough this report was conducted using sources from a mature industry such as the wine industry,

certain limitations were encountered; First, the designed survey was applied mostly in the city center

of Groningen, where the majority of participants are young students with different buying and

consumer behavior. Because the survey was applied by a group of IBS students, the majority being

international students, a limited approach to native Dutch speakers reduced the sample to mostly

young people who were more likely to speak English and therefore participate in the survey. Another

limitation was the lack of information in store and competitors’ sources were willing to disclose. Such

was the case for obtaining information regarding packaging costs with German manufacturers and

Albert Heijn managers and Customer Service personnel, because it was concerning classified

information and competitive advantage related. Finally, and related to the previous limitation, there is

insufficient information to use as reference for establishing retailer and manufacturer’s profit margin.

This data also is considered classified and if available could expose business strategies beneficial to

both retailer and producer.

Target Market Definition

6

Market description & segmentationThe wine market is segmented in 4 categories, retail sale of champagne, fortified wine, sparkling wine

and still wine. The market is valued according to retail selling price (RSP) and includes any applicable

taxes. Still wine is the main leader of the wine segmentation with a total of 83.1% of the market’s total

value in 2014 and it should follow this trend for the upcoming years.

Category 2014 Percentage %

Still wine 3,739.6 83.1%

Fortified wine 337.4 7.5%

Sparkling 325.0 7.2%

Champaign 97.7 2.2%

Total 4,499.7 100%

Table 1 : Category Segmentation (Marketline Industry Report, 2015).

The Grands Chais De France SA is the leader in the Dutch wine market, with 10.7% share of the

market's volume in 2014 and are comfortably ahead of many other competitors such as Sogrape

Vinhos SA or the French group Pernod Ricard that own under 2% of the Dutch wine market share.

The Grands Chais De France SA is the leader in the Dutch wine market, with 10.7% share of the

market's volume in 2014 and are comfortably ahead of many other competitors such as Sogrape

Vinhos SA or the French group Pernod Ricard that own under 2% of the Dutch wine market share.

Company Share in %

Les Grands Chais de France SA 10.7%

Sogrape Vihos S.A 1.8%

Pernod Ricard 1.5%

Barcadi Ltd. 1.0%

Other 85.1%

Total 100%

Table 2 : Netherlands wine market share: % share, by volume, 2014 (Marketline Industry Report, 2015)

7

Identification of target segment and populationThis part will largely deal with the consumer preferences on the Dutch wine market and essentially

will give a good picture of their main target group of The Grands Chais de France Group (GCF).

In order to draw a complete picture of GCF consumers in the Netherlands, both primary and secondary data was conducted and analyzed. Both should be considered influential in decision-making.

Consumer preferencesIn order to gain a greater market share, The Grands Chais de France Group (GCF) not only needs to

persuade the chosen retailer, but ultimately also the end consumer with its premium private label wine.

To produce a wine distinguishing itself from the competition and meeting the consumer preferences, it

is essential to be aware of the changing consumer behavior on the Dutch wine market.

Wine consumption

Primary research shows that 81.62% of Dutch people, aged 18 and older, generally enjoy drinking

wine. 18.38% of the survey participants responded that they do not drink wine, though a further 6.6%

of total participants, and 36% of those who reportedly do not drink wine, reported that they do buy

wine either as gifts, when having visitors over for dinner or other occasions.

This provides GCF with approximately 88% of the Dutch population older than 18 of potential

customers.

Red, white and rosé winesFurthermore, the survey aimed to find the wine preferences of the participants.

In Groningen, the vast majority of people prefer to drink red wine (51.8%). Second ranking is white

wine with a percentage of 36.4. The lowest market share accounts for Rosé and Bubbles of 4.5% and

5.5% respectively. Other types of wine account for 1.8% of participants’ responses.

The survey results are displayed graphically in appendix XXX.

The survey has two limitations though that need to be considered when making a final decision.

1. Representativeness for the Netherlands

As the survey was only conducted in Groningen, a city accounting for approximately 1.15% of

the overall Dutch population, it has to be considered that answers cannot necessarily be made

representative for the entire country and always have to be looked at in combination with

secondary research.

2. Seasonality of products

Studies show that during the summer time white wine sales increase, while during colder

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temperatures the richness of red wine is preferred (Fridjhon, 2013). As the survey was

conducted in the beginning of October, with relatively cold weather in Groningen, the given

results may have been influenced by the season.

Secondary data, focused on the national market instead of local sources, show slightly different

results.

Statistics also indicates that red wine is the most popular wine on the overall Dutch market. Though,

looking at sales figures from the past years, it becomes evident that white wine sales have been

growing by 3.5% since 2013 while red and rosé wines decreased (Ministry of foreign affairs, 2016). If

this trend continues, the sale of white wine will soon surpass the sale of red wine and provides an

opportunity for GCF.

The table below shows the sale of wine on the Dutch market (Ministry of foreign affairs, 2016).

Type of wine Sales in percent (%)

Red wine 44.9%

White wine 42.5%

Rosé 13.8%

Table 3 : Sales of wine (Ministry of foreign affairs, 2016).

Sparkling wineIn the period of 2014 - 2015, the sale of sparkling wine, especially that of slightly sparkling wine,

increased, while still wine sales remain stable (Ministry of foreign affairs, 2016). This increase in sale

of sparkling wine is at the cost of the sale of rosé wines (Ministry of foreign affairs, 2016). Slightly

sparkling wine benefits from its lower alcohol percentage making it cheaper in excise tariffs (Ministry

of foreign affairs, 2016).

As the report by the Dutch Ministry of foreign affairs states, the competition on the Dutch wine market

is extremely high making it essential for companies to provide means to persuade the consumer. This

can be done through original packaging, labels, branding, testimonials and/ or geographical

statements.

Organic and Fairtrade Wines

On the Dutch market, there is still very limited awareness for Fairtrade and Organic wines. As the

Ministry of foreign affairs state, Fairtrade wines account for less than 1% of total market share

9

(Ministry of foreign affairs, 2016). While sales for organic wines are increasing, it is still only at

around 1% of overall sales (Ministry of foreign affairs, 2016).

We therefore discourage GCF from using Fairtrade or organic labels as a means of differentiation. At

this point in time the market is simply too small. This does not mean though that it is not encouraged

by the Dutch government to produce wine to eco-friendly conditions e.g. with low CO2 emissions.

Target Group

Age group

Data from 2011 shows, that predominantly the population aged between 35 and 64 years account for

66% of all wine sales in the Netherlands (Sagala, 2011). Figures show that 13% of the 35 to 49 year

olds and 28% of the 50 to 64 year olds drink one glass of wine a day or more (Sagala, 2011). People

younger than this reported that they consume wine only occasionally (Sagala, 2011).

Gender

Furthermore, a gender difference in wine consumption can be observed in the Dutch market. While

wine is still considered a consumer good rather catering to the female population, men tend to drink

more beer instead (Sagala, 2011). Also in this age category, red and white wine consumption is

predominant (Sagala, 2011).

Correlation with income

In order to draw a good correlation with the income spent by our target group it is essential to have a

look at the developments in the Dutch economy. Data provided by Euromonitor shows that the

average expenditure in the Netherlands is higher than the European average. However, the country is

influenced by high taxes and social security contributions (Euromonitor, 2016). The graphic in

appendix XXX shows a SWOT analysis of the current Dutch market.

From 2010 - 2014 the average gross income has declined in the Netherlands, though in 2015 it has

slightly picked up again (Euromonitor, 2016). Part of GCF’s recommended target group, the people

aged 45 to 49, enjoy the highest gross income with an average of roughly US$52,000 annually

(Euromonitor, 2016).

In addition, expenditure on tobacco and alcoholic beverages is expected to continue to rise between

2016 and 2030, providing an excellent opportunity for GCF on the Dutch market (Euromonitor, 2016).

The original graph from Euromonitor can be seen in appendix XXX (2016).

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Demand EstimationThe wine market will provide a positive development in the years to come. A forecast provided by

Marketline Industry Report states that by 2019, the Dutch wine market will have a volume of 399.2

million liters and by that shows a growth of 6.5% of the volume of 2014 (Marketline Industry Report,

2015).  

Sales forecastThe Sales forecast of  the upcoming years plays a vital role for the GCF willingness to reverse the

current trend. In order to gain a greater market share, and increase the company profits, the product

launched by Grand Chais de France SA must be in line with the forecast made according to wine

categories and primary research done.

As stated on the financial part below the optimist estimate is that on average 6 bottles of Le Papillon

Blanc will be sold at 7.99 € per week per store. With the current 850 Albert Heijn stores in the

Netherlands, a total of 5,100 bottles will be sold per week on the Dutch Market. This estimation gives

a total of 265,200 bottles in the first year (2017).

The 265,200 bottles need to be converted to liters, accounting for 198,900 liters of 750ml bottles.

The forecast sales of wine are used to calculate the yearly percentage increase starting 2017 which

grants a 1.01% for the following 4 years.

In the best scenario, 265,200 bottles will be sold in 2017 at €7.99 that represent a total turnover of €2,

118,948.00 for Albert Heijn and a profit of € 317,842.20 for the GCF group.

2017 2018 2019 2020 2021

Sales Volume (sold units)

265200 26758 270531 2730531 278701

Total Sales €2,118,948.00 €2,140,137.48 €2,161,538.85 €2,183,154.24 €2,226,817.33

GCF profit (15%)

€317,842.20 €321,020.62 €324,230.83 €327,473.14 €334,022.60

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Product StrategyIdentifying the core components of the product “Le Papillon Blanc” will help to further develop a

product strategy, this has been done by Kotler’s “Three Levels of a Product” theory.

First, identifying the core benefit of the product. Since “Le Papillon Blanc” is a premium wine, and

will be “competing through design” with a unique packaging style of self-wrapping (Olseen, J. et. al.

2012; Baker, 2007) . “Le Papillon Blanc” is the best wine choice when needing a last-minute present

(Gegia, 2014). Therefore, the core is pleasure (“gezellig”) in good company. The core of a product is

identified as the benefit to a customer.  Since wine can have many different core benefits it is

important that the core benefit is communicated to the consumer in line with the overall product

strategy, promotion, packaging and positioning.

Second, for the actual product it is necessary to look in 2 different dimensions:

● Packaging: The visible and tangible component

● Wine: Color, smell and taste

Third, the augmented product, which mainly involve after sales care. The actual product and

augmented product level will be dealt with in depth in the paragraphs below.

PackagingThe packaging should reflect the core benefit of wine. Since only a very small group of customers is

educated about wine, most customers make decisions based on the packaging SOURCE. As a result

the packaging needs to appeal to the customer and satisfy their need, wants and desires.

As mentioned above this section will discuss the 2 dimensions of the actual product level:

● Packaging: The visible and tangible component

● Wine: Color, smell and taste

Previous research has shown that the packaging is one of the main influencers, when making buying

decisions in store (Nigro, 2002). Wine in this price range belongs to the fast moving consumer goods,

which means consumers do not overthink the purchase and do not conduct any kind of research before

purchasing the wine.

The design of the packaging and the exact cost structure is displayed in appendix BLA BLA and BLA

BLA has been developed due to the following research results:

● The trend of drinking more responsible has become more important. As a result, consumers

buy less often alcoholic beverages, but therefore prefer quality products (Euromonitor, 2016).

● Wine is traditionally packaged in 0.75L bottles, due to the shelf spacing in the retail stores.

● The cap closure has been introduced by other premium wine products, so the paradigm shift of

consumer perception of low quality wine when having a cap closure has happened already. 12

Additionally, it is scientifically proven that screw caps preserving the quality of a wine better

over long term (Euromonitor, 2009) and it is more cost efficient.

● “Competing through design” the packaging feature of the bottle, which makes it a brilliant last

minute present. According to industrial designer Johannes Lager, this might make the final

step towards a purchase.

Besides appealing to the consumer, labelling and packaging needs to be according to country and EU

standards, necessary symbols have been included on the label seen in appendix XX.

Looking into the second dimension of the actual product,  the liquid wine, the characteristics of it will

be discovered after the purchase. The drinking experience will lay the basis for a second purchase and

a possibly loyal customer.

Appendix BLA BLA shows a process flow of consumers’ purchase behavior when it comes to wine,

which combines the two dimensions elaborated above. The initial purchase, which will result in

another purchase, when the overall product experience has satisfied the consumer.  

After sales careAs by Kotler, the augmented product, addresses the product features that are non-tangible and

characteristics of after-sale e.g. warranty, customer service.

Consumer retention by being transparent as a brand is to be managed by being accessible via website,

displaying the production process and where to find the products. This information will be available

via the website: http://www.le-papillon-blanc-vin .nl .  An  example is displayed in appendix blab la

bla.

In addition, Albert Heijn already has a customer service installed. Besides the customer service

hotline, available 24/7, it has been observed (see appendix XXX)  that Albert Heijn stores offer quality

help at the fast service desks for inquiries of customers and are sufficiently staffed with trained and

educated employees that help with questions when needed.

Pricing strategyIn any given industry, willingness to pay is driven by specific factors such formulating competitive

strategies, implementing pricing strategies and developing new products. WTP refers to the maximum

price a customer is willing to pay for a product, and it is driven by the customer’s established value on

a product. This value is associated with the objective (packaging, brand, origin) and subjective

13

(quality, emotional involvement, status) attributes of the product (Dixit, 2007). With a defined

framework of WTP, the way price fits into the formula is through “buyer’s surplus”; the difference

between the buyer’s WTP and price, as well as “producer’s surplus or profit”, being the difference

between price and cost.

In order to set a price on our product, it is necessary to understand the relationship between wine

consumers’ WTP and price. According to Zalan & Lewis (2014), there is a significant influence in

price, appreciation and WTP, meaning that non-expert or novice wine consumers have difficulty in

distinguishing wine quality if prices aren’t relevant, this meaning that there isn’t a clear distinction

between “good” (expensive) wines and “bad” (cheap) wines. Knowing that non-expert consumers

associate high price with better quality, this increases their WTP.

Product positioning & competitor analysisIf Goldstein’s (2008) and Zalan & Lewis (2014) premise is applied, being that low price is perceived

as low quality in the mind of most consumers, consequently decreasing buyer’s WTP, positioning our

product within a premium range of national brand wines in the Netherlands, increasing buyer’s WTP,

will achieve “buying” market’s share through price strategy. This is also supported by the previous

information in Section xx (Target Group), stating that consumers’ expenditure on alcoholic

beverages is rising.

Also it needs to be taken into account if buyer’s WTP wants to be contained by setting price too high,

analyzing what are the most common bought wines and their prices in the Dutch market is necessary.

By doing this, there is a better understanding of the general WTP and the average price consumers are

paying for white wine.

The following table XXX in appendix XXX presents the most bought white wine brands prices in the

Netherlands from 2015.

The highlighted rows in yellow are Albert Heijn’s current in store brands, Mooi Kaap Droë Steen -

Colombard (€ 2.51) and AH Franse Huiswijn Wit (€ 3.99), considered as possible competition being

the retailer’s own brand. Albert Heijn’s private label wines hold around 9.8% of the brand share

( Euromonitor International, 2016), which could be highly profitable for GCF and AH partnership.

The highlighted rows in green are the highest priced brands among the most frequently bought,

becoming indicators of consumer’s WTP.

Indicating these two possibilities, we need to categorize them within the general price standardization.

Up next is presented a worldwide standardization for wine categories according to price.

·  Super Value Wine: Available for less than €3 per 750ml. These prices have encourage

retailers to offer store brands in wine products14

·    Basic / Subpremium Wines: €3-6.99

·    Premium Wines: €7.00 - €9.00

·  Super Premium Wines: €10.00 – €13.99 This category includes well-known brands

·    Ultra Premium / Deluxe Wines: €14.00 - €49.99

·    Icon Wines: + €50.00

(Olseen, J. et. al. 2012)

If compared, the prices in table XXX and the previous wine price categories, we determined that most

of the brands included in the table XXX can be categorized as Super Value and Basic / Subpremium

Wines, with only three brands remaining as Premium Wines.

Price of Product & Components If we use the previous categorization, we determine that our premium brand wine will range between

€7.00 and €9.00.

In order to find out if there is enough or potential market for our intended premium wine, we

conducted a survey that included among other things, the price range in which most wine consumers

purchase their product. The survey included 6 different price categories; €2 - €5, €5 - €8, €8 - €11, €11

- €14, €14 - €17 and >€17. The results are presented in the graph in appendix XXX.

As stated before, the partnership’s intention of Albert Heijn and GCF is to introduce a Premium Wine

within a premium price range. This set price is supported by our own survey, concluding that 58.72%

of the people in the survey, (64 of out 114) prefer to buy wine within a price range from € 5.00 to €

8.00.

Now that we have set our price range, supported by survey results, determining the exact retail price is

the next step. There are numerous pricing methods among the wine industry, and are based upon

different factors such as grape prices, raw material expenses, marketing expenses and wine yield per

ton of grape. The following are the most common pricing methods used by wineries:

Percentage of Revenue MethodAs it is common in other industries, this system is adjustable and fixable. The purpose of this method

is to establish sales goals and if sales are exceeding projections, the general budget is increase, or it is

scale down if sales aren’t met. If this method is applied, it is recommended to avoid reducing budget if

sales are behind projections, instead an increase sales & marketing budget is suggested.

An industry average for revenue shows a wide range, from 6% to 55%. The higher percentages are

implemented by already established brands. (Olseen, J., Tach, L., Wagner, P., 2012).

15

Dollar per case ration MethodSystem applied in big wineries that produce over 5,000 cases of wine. This method is difficult to apply

in wineries with several wine productions. Low-priced wines hardly generates marketing budgets

(Olseen, J., Tach, L., Wagner, P., 2012).

Marketing Program Goals MethodMarketing  plan with developed objectives and goals, which generate costs for their execution. Actions

and elements in the marketing plan have to be cost-effective. (Olseen, J., Tach, L., Wagner, P., 2012)

Production Cost Pricing MethodThe oldest method used to price wine bottles according to price paid per grape ton. Meaning if the

grape ton cost €1000, this price is divided by 100, therefore bottle price should range around €10.

Strategy and Consumer Driven MethodThis method relies on the business strategy and, described by the target consumer segment.

Most wineries use a combination of the methods presented above when setting their prices. Since GCF

already has all the infrastructure and resources needed for production, there are no limitations

regarding saving up costs. It is therefore advise to use a combination of methods to set a strategic price

within the premium range that will enhance not only market share but profits.

Wineries with more production capacity are able to reduce costs, as shown in the table XXX in

appendix XXX.

Final Retail PriceBy applying a combination of pricing strategies such as profit goals, production and penetration, and

including several cost elements like production, packaging, distribution, taxes and most importantly

retailer and manufacturer margins, an established price of € 7.99 for the new product. The decision to

set a .99 ending digit price or “psychological pricing” (Mason & Mayer, 1990), is supported by

research which indicate the positive effect in purchase by customers (Kibarian & Schindler, 1996),

leading to an increase in sales volume by sacrificing one-cent per item sold.

Cost will be described in full detail in the Finance Section.

16

Placement & Distribution Strategy

The production regionBased on the survey conducted (Appendix XXXX )and on numbers of euromonitor (described in the

target market part, table 1), the decision was made to produce white wine, to be specific Chardonnay.

Primary research conducted shows that Chardonnay is the most liked white wine among the Dutch

customers. It is one of the best products made in the region of Burgundy, France. The region is most

popular for the production of white wines

● product region; product region, source from elliot

● marketing intermediaries: retailer; wholesaler ah in the netherlands

● transportation company + comparison to alternatives, insurance?

● strength gcf: advanced transportation (product desc) → strategic positioning.

● 8% distribution cost, justify!

Marketing intermediaries

In the production and distribution of the premium private label wine is one further major market

intermediary at play - the wholesaler Albert Heijn.

Albert Heijn

After careful consideration and the weighing of alternatives, it is advised to chose Albert Heijn as the

retailer for ‘Le Papillon Blanc’. Primary research shows that 56,0% of all survey participants having

stated ‘supermarket’ as their distribution channel, regularly buy their wine at Albert Heijn. This makes

it the most chosen supermarket chain among study participants given that its’ biggest rival Jumbo was

only mentioned by 31.9% of participants.

Albert Heijn is simultaneously also the biggest retailer on the Dutch market with a value share of 25%

in 2015 (Euromonitor, 2016 SOURCE). One of the major reasons for Albert Heijn to maintain its

position as the market leader in such a competitive environment is the continous innovation taking

place. This includes Albert Heijn to-go stores, self-checkout opportunities and the cooperation with

Villeroy and Boch, by selling their products and attracting new customers (Euromonitor, 2016).

Comparing Albert Heijn to its main competitor Jumbo makes it evident that both retailers focus on

different aims. While Jumbo prioritizes high in-store service and lower prices, Albert Heijn focuses on

new innovations and technologies (Euromonitor, 2016).

For Aileen to add tomorrow morning:

● to include value share of other retailers and more detailed info17

● National distribution centers and addresses

Transportation

As described in the assignment description? GCF Group has been very successful over the years due

to a mix of strengths, including advanced logistics. based on the information on the webpage the

decision had been made to use the transportation from GCF Group.

The advantage of a producing a private label for GCF Group is that the space left in the manufacturing

process can be used, and therefore against low cost, able to produce more wine and increase the

market share.

GCF Group is already a partner of Royal Ahold NV, and is selling different wines in the Albert Heijn

stores (source). Therefore combining the transportation together with the rest of the goods that will be

going to the distribution center of Albert Heijn in the Netherlands will be a strategic decision. This

will be reducing the costs for GCF Group, which is favourable, especially in the case of a private label

product.

The supply

As mentioned above the role of the GCF is to supply the national centers Albert Heijn in the

Netherlands as soon as possible and then, the rest of the distribution, from the delivery to regional

centers to the shelving is managed by Albert Heijn thanks to its experience in the field of wine and its

ability to handle multiple references at the same time, however it is the responsibility of GCF to

provide the products to the national centers Albert Heijn to meet demand quickly.

The product in the storesThe wine bottles will be placed in a reserved promotional stand in the Albert Heijn shops during the

first month of introduction in order to make know the product to the clients, and to be different from

all the others products, but after this period and a good knowledge of the brand by the consumer the

product will be placed on the shelf next to other wine products.

Promotion of the GCF premium private label wine will take place in different kinds of levels in the

marketing mix. Price, place, promotion and product. These 4 aspects will result in a promotional

strategy for GCF and Albert Heijn in the Dutch wine market.

18

PromotionThe name of the product will be Le Papillon Blanc meaning white butterfly in French. This name is

chosen to suit the target group and have an easy pronounceable name for the Dutch market. The

butterfly suits the target group of women giving the wine a soft name, blanc standing for the color of

the product.

the bottle is designed to look premium, using green glass instead of a white variant to protect the wine

from UV radiation (WRAP, 2013) and giving it a more expensive look. The label of the bottle is a

crème white base with a golden edge and a slightly grey butterfly as a logo. The target group remains

women, however men might be willing to buy the product thus the slightly vague print of the butterfly.

Apendix-xxx

Consumers buying the Le Papillon Blanc wine buy more than just a wine, they buy an experience.

Next to a premium wine, this wine is to be considered to be an excellent gift or to treat yourself as the

label contains a gift-wrap Apendix-xxx this gift wrap is hidden inside the normal label of the bottle

and remains hidden until the consumer decides to use the extra feature.

Considering the premium private label wine is not endorsed by GCF, it will largely be promoted by

Albert Heijn, the retailer. Below are some ideas of promotional activities useful to penetrate the

market quickly and gain market share on the B2C market.

B2B

Marketing efforts on the B2B markets will be minimal, as Albert Heijn will be the only retailer selling

‘Le Papillon Blanc’. Therefore, as soon as the relationship with Albert Heijn is established, the

promotion should focus on the B2C market.

B2C

The promotional objective by Albert Heijn during the first weeks of sales is to use price penetration to

enter the market successfully by using in-store promotions.  By careful in-store observations of Albert

Heijn, there are some possibilities to exploit to GCF’s and the retailers benefit.

Marketing the product itself by GCF

Giving the special gift wrapping feature of the product, it is guaranteed that the product will stand out

from the competition. However, it should be noted that the wine should not be marketed as only a gift-

19

giving type of wine, but instead that this is a wine that should be sold the whole year round using the

slogan “verwen jezelf” on the inside wrapping, meaning treat yourself.

Giving the gift-wrapping feature of the product, certain periods would be more suitable for

promotional activities. Such weeks in 2017 include:

Week 7         - Valentine’s day

Week 15/16 - Easter

Week 18          - Mother’s day

Week 51/52 - Christmas and New years

It should be considered to adapt the gift wrapping during those periods to match the festive feeling.

Examples include hearts on the wrapping during Valentine’s Day or Christmas Trees for Christmas.

This feature however will impact the packaging and distribution costs.

In-store promotion by Albert Heijn

Observing the in-store management of the Albert Heijn stores clarifies that there are opportunities for

further in-store promotion through shelf spacing and a combination sales. Albert Heijn has weekly

changing promotions accessible with the ‘Bonuskaart’. Observations also showed that customers are

very likely to buy promoted wines and often ignore alternatives.

Placing in the supermarket:

Placing of the product is of importance to gain attention of the consumer. This is especially important

during the introduction period of the wine. According to in-store observations, the Albert Heijn

locations all have the same mapping, advertising and management in their supermarkets.

There are two major places of interest in the supermarket for the sale of wine:

1. The cheese section

The cheese section is of interest as the two are complementary products that are often consumed

together. Primary research showed that a small selection of wines, about 6 different types including

red and white wines from different price ranges, is always presented next to the cheese. For Albert

Heijn and GCF it would be useful to use this option when entering the market as the number of direct

competitors in that section is significantly smaller. Presenting the wine there at a 25% discount would

greatly encourage the consumer to try Le Papillon Blanc. It should be noted that promoting the wine

there is only a weekly option and cannot be used temporarily.

2. The wine aisle

20

The wine aisle will be the main distribution place for the product for the majority of times. Shelf

spacing in Albert Heijn stores is according to rough price ranges, meaning there can be exceptions to

the general rule. A detailed overview of shelf prices can be found in Appendix XXXX. With a retail

price of €7,99, Le Papillon Blanc would be conveniently located in the second highest level, directly

on eye level. If placed on promotion, the wine could also be located in the middle of the aisle,

depending on store size and convenience to the customer.

Specially during the introduction period of the wine, an explanation of the gift wrapping feature

Price

Because of the large number of wine brands and producers whom are active on the Dutch market

(37.000 types) (Voorn, 2014). A penetration strategy is required to gain quick access and introduce the

GCF private label Le Papillon Blanc to the market. This strategy, price penetration, will result in a

rapid growth of market share. This strategy will influence both the B2B market and the B2C market.

For the B2B market this pricing strategy means large quantities will be sold at once in bulk pricing to

the Dutch reseller, Albert Heijn. This temporary strategy will force the Albert Heijn  resellers to have

a large quantities available and automatically reserve shelf space for the bottles of wine. In

cooperation with Albert Heijn, the resellers can use a price strategy in the B2C market. Per the survey,

customers are likely to buy a different or a new brand when it is in promotion or sale. (source -

Appendix) this temporary promotion will result in a quick gain of market share for the wine.

To help B2C sales promotion, in-store promotion is needed to help boost the sales of the wine bottles.

This in-store promotion will take place in a short-term promotion in price due to the penetration

strategy. To differentiate from all the other wine bottles in the premium price range (€ 7.99) the target

group for the Albert Heijn GCF wine will undergo a special promotional price during the introductory

period.

Albert Heijn uses a national strategy, meaning all stores should be the same and only varying in size.

Promotional activities are the same in all stores spread over the country. A national promotional

strategy of Albert Heijn is a weekly variety of promotional products (bonuskrant) during the first

period of introduction the Le Papillon Blanc wine will be in this promotion with a 25% discount for

the B2C consumers. This promotion will mean a loss of profit comparing to the usual retail price. It

would be wise to take this loss in revenue and create a bigger market share and introduce the wine to a

bigger audience due to this promotion.

This 25% loss in revenue will be covered for 5% by GCF and 20% by Royal Ahold NV.

21

GCF profit margins Royal Ahold NV profit

During normal retail price €1.198 (15%) €2.397 (30%)

During promotional period €0.799 (10%) €0.799 (10%)

Table X: Profit margins of GCF group per bottle of Le Papillon Blanc

During promotional periods a loss In sales revenue compared to normal sales price is € 1.9975 per

bottle making a sales price of € 5.99 during promotional periods.

As mentioned the promotional activities in Albert Heijn stores usually take place on a weekly notice.

An estimated 5.100 bottles are to be sold in Albert Heijn stores nationwide according to the planned 6

bottles a week schedule. Meaning a loss of € 10.187.25 during promotional weeks if sales stay the

same. However sales are expected to grow giving the promotional price and to introduce the product

to the market. The starting number or sales is 0 and with this promotion the target is to reach the mark

of 5.100 bottles in the first week.

FinancesJustification of costsIn the previous Pricing Strategy section, the price established for Le Papillon Blanc is € 7.99. This

price will now be break down into the elements it consists of.

Retailer margin Private label wines have increased their market share over the last years, giving an opportunity to

retailers to obtain higher profit margins than national brands (Wine Curmudgeon, 2015). In order to

make this product attractive to Royal Ahold NV portfolio, a profit margin of 30% is set, taking into

account that both, the wholesaler and retailers obtain a profitable revenue. This percentage was set for

the retailer to also absorb distribution and promotion costs.

Producer margin (GCF)A profit margin of 15% was assigned for GCF, since it is industry standard that retailers get a double

profit margin than manufacturers. It is also the purpose of this strategy to increase GCF’s market share

instead of focusing solely on their profits. This percentage is intended to make the product proposal

attractive to the chosen retailer as well.

22

VATIn the Netherlands VAT needs to be paid, this is a tax. The VAT for alcoholic beverages is 21%, the

general tax (Belastingdienst, 2016A).

Excise DutyThe alcohol percentage of wine determines the excise duty that should be paid for the wine. The tariff

should be paid per hector litre (100 litre), see table xxx in the appendix xx . The alcohol content for Le

Papillon Blanc is 13.5%, which is the most common for Chardonnay wines (Puckette M, 2013). In

order to set the Excise duty for each 750ml bottle, the following calcutation is made.

100 hl x 1000 = 100,000ml

100,000ml / 750ml = 133 bottles

€ 88.36 / 133 = € 0.66

Therefore € 0.66 are to be included in each bottle cost.

Distribution Cost

The distribution cost is calculated through a benchmark of blablabla company,  as this french company

also imports wines into the Netherlands and uses Royal Ahold NV as their distribution channel and

Albert Heijn as retailer. Their transportation cost is 8%. Since the manufacturing region of name

copany is in Southern France, it is a safe percentage to use, since the distance from GCF to the

wholesaler in the Netherlands is less.

Packaging Cost

Due to a lack of proper information, even though we tried to reach out to wine producers in Germany

and France, the packaging cost is reasonable estimated via Lay (2012). In his article, he gives an

overview of packaging costs for Icon Wines (Olseen, J. et. al. 2012). Thus, these numbers have been

reasonably adjusted towards the price range of “Le Papillion Blanc”.

The piece prices of packaging components can be seen in appendix XXX.

Production Cost

Since GCF already has all the infrastructure and resources needed for production, the cost for the

entire production process from harvest to bottling is €1.03.

Revenue Projections

23

The total wine volume sold in the Netherlands for 2015 account for 380.2 million litres, as for still

white wine 140.7 million litres were sold, this accounts for 37% of the total wine sold. Table xxx. The

total wine sold by Royal Ahold NV in 2015 in the Netherlands was 36.5 million litres (Table xxxx.).

To calculate the still white wine sold by Royal Ahold NV, the same percentage for still white wine

sold is used (37%), which comes down to 13.14 million litres.

Sales Projection Increase The best case scenario is that on average 6 bottles of Le Papillon Blanc will be sold per week per

store. Given that there are currently 850 Albert Heijn stores in the Netherlands, a total of 5,100 bottles

will be sold. This estimation gives a total of 265,200 bottles in the first year (2017).

To connect the estimated total of Le Papillon Blanc to the current Royal Ahold NV sales, the 265,200

units will be converted to litres, given a total of 198,900 litres for 750ml bottles. This volume accounts

for 1.51% of the average 13.14 million litres sold by Royal Ahold NV.

The forecast sales of wine (Table xxx) is used to calculate the yearly percentage increase starting 2017

which grants a 1.01% for the following 4 years, except for a 1.02% for 2021. 2017 = 1.01% (143.4 /

141.7 = 1.01)

2018 = 1.01% (145.2 /143.4 = 1.01)

2019 = 1.01% (147.4 / 145.2 = 1.01)

2020 = 1.01 = (149.9 / 147/.4) = 1.01)

5 year Revenue Projections2017 2018 2019 2020 2021

Sales Percentage Increase (%) 1.01 1.01 1.01 1.02Sales Volume (sold units) 265200 267852 270531 273236 278701Sale Price € 7.99 € 7.99 € 7.99 € 7.99 € 7.99Total Sales (€) € 2,118,948.00 € 2,140,137.48 € 2,161,538.85 € 2,183,154.24 € 2,226,817.33Royal Ahold NV profit margin (30%)

€ 635,684.40 € 642,041.24 € 648,461.66 € 654,946.27 € 668,045.20

GCF profit (15%) € 317,842.20 € 321,020.62 € 324,230.83 € 327,473.14 € 334,022.60Table 5221 Mio.: Sales Revenue of past 5 years.

ConclusionTo conclude, it is advised to GCF to produce a premium private label white wine as market forecasts

and primary research project an increase in sales and therefore revenues. Simultaneously, also the

24

expenditure of consumers is expected to rise, providing a positive outlook for both GCF and Albert

Heijn as the retailer.

To distinguish the wine from competing brands, the Chardonnay Le Papillon Blanc will provide an

original packaging making it an easy, yet classy gift option for loved ones. Combined with proposed

promotional efforts that lay in the hands of Albert Heijn, the wine will also be marketed as a treat for

the customer itself, making sure that it does not only becomes an infrequent purchase.

In order to penetrate the market rapidly and to raise awareness in the minds of customers, promotional

deals with the retailer Albert Heijn in the form of discounts are strongly encouraged.

Manufacturing will occur in Burgundy, France, using TimoCom as means of distribution. It should be

noted that GCF will be responsible for the production and distribution, while Albert Heijn has the

responsibility to meet market demand.

To cover all costs related to production, distribution and marketing as well as to generate a profit for

GCF and Albert Heijn, the retail price will be set at € 7,99.

If all goes as planned, the proposed Chardonnay Le Papillon Blanc has the ability to increase market

share and therefore generate an annual profit of €334,000.

RecommendationTo recommend GCF group a possible market strategy to increase their market share in the dutch

market, a new not endorsed private label white wine with a focus on “competing via design” has been

developed. Furthermore, Albert Heijn has been identified as best suitable retailer to cooperate with and

the price of €7.99 per bottle has been determined via primary research. Lastly, promotional actions

such as, in-store presentation and seasonal differences have been established to create customer

awareness.

These marketing efforts will be result in:

● financial profit of NUMBER

● and an increase in market share in the Dutch market of NUMBER

Even though, research has been conducted the report faces several limitations. To achieve the best

possible outcomes, it is necessary to conduct further in depth primary research on a broader consumer

25

basis and ensure access to actual manufacturing, packaging and transport costs encountered by GCF

group.

Creating successfully awareness of the specialized wrapping, the product should be introduced during

a season of present-purchasing, like Valentine's Day. In addition, white wine consumption increasing

during warmer seasons. Therefore, starting sales just before spring is recommended to the retailer.

Adding a not endorsed private label to the GCF group gives the opportunity to increase market share

within the Dutch market, without encountering added costs of production or promotion, since GCF

group can take advantage of the excess manufacturing capacity in Bourgogne, France. Furthermore,

parts of the promotional effort is to be born by the retailer, Albert Heijn. Nevertheless, GCF group

needs to assess the risk when adding this product to their portfolio that other higher value Chardonnay

white wines do not suffer, or even being cannibalized.

Due to the results of the report it can be recommended to implement this strategy.

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Appendices

Appendix 2 – Survey results

30

145 respondents

29 respondents

31

10 responses

115 respondents

32

115 responses

33

Only included the responses with an higher response rate than 2.

34

35

36

37

38

39

40

41

Appendix B – SWOT Analysis Dutch average annual income

Figure 1: SWOT Analysis Dutch average annual income

42

Appendix C – Consumer Expenditure Average Annual Real Growth by Category: 2010-2030

Appendix D – Number of On-trade Establishments by Type 2010-2015

43

Graph 2:  Average Annual Consumer Expenditure (Euromonitor, 2016).

Appendix X – Label design of Le Papillon Blanc

Appendix XX – Packaging design

44

Appendix XX – Cost structure of packaging for “Le Papillon Blanc”

Figure 3: Cost structure of the packaging (Lay, 2012).

45

Appendix XX – Homepage of “Le Papillon Blanc” Website

Appendix X – White Wine Pricing

Brand Manufacturer Distribution Channel

Volume Price

Mooi Kaap Droë Steen - Colombard (13% Abv)

Royal Ahold NV Supermarket 750 ml 2.51

Penfolds Rawson's Retreat Chardonnay - Chardonnay (13% Abv)

FGL Wine Estates Supermarket 750 ml 8.49

Concha y Toro Trio Sauvignon Blanc - Sauvignon Blanc (13% Abv)

Viña Concha y Toro SA

Supermarket 750 ml 7.99

Berberana White Dragon - Chardonnay (12% Abv)

Bodegas Berberana SA

Supermarket 750 ml 7.98

46

Casillero del Diablo Chardonnay - Chardonnay (13.5% Abv)

Chacali Fine Wines Supermarket 750 ml 6.69

Jacob's Creek Chardonnay - Chardonnay (12.7% Abv)

Pernod Ricard Nederland BV

Supermarket 750 ml 6.69

Nederburg Sauvignon Blanc - Sauvignon Blanc (13% Abv)

Distell Group Ltd Supermarket 750 ml 6.69

Trivento Chardonnay Reserve - Chardonnay (14% Abv)

Viña Concha y Toro SA

Supermarket 750 ml 6.69

Kumala Colombard Chardonnay - Colombard (12.5% Abv)

Kumala Winery Ltd Supermarket 750 ml 5.99

Norton Sauvignon Blanc - Sauvignon Blanc (12.5% Abv)

Bodegas Norton SA (Argentina)

Supermarket 750 ml 5.99

Rosemount Chardonnay Sémillon - Chardonnay (13.5% Abv)

FGL Wine Estates Supermarket 750 ml 5.99

Torres Viña Brava Chardonnay Parellada - Chardonnay (12.5% Abv)

Miguel Torres SA Supermarket 750 ml 5.99

Drostdy-Hof Sauvignon Blanc - Sauvignon Blanc (12% Abv)

Distell Group Ltd Internet retailing 750 ml 5.95

Welmoed Sauvignon Blanc - Sauvignon Blanc (13.5% Abv)

Royal Ahold NV Supermarket 750 ml 5.79

Lindeman's South FGL Wine Estates Supermarket 750 ml 4.99

47

Africa Sauvignon Blanc Chardonnay - Sauvignon Blanc (13% Abv)

(South Africa)

Undurraga Chardonnay - Chardonnay (8% Abv)

Viña Undurraga SA (Chile)

Supermarket 750 ml 4.99

AH Franse Huiswijn Wit (11.5%

Royal Ahold NV (France)

Supermarket 1 litres 3.99

Hardys Crest Chardonnay - Chardonnay (12% Abv)

Thomas Hardy & Sons Ltd

Supermarket 750 ml 3.99

Peter Mertes Lizard Pinot Grigio - Pinot Gris (11.5% Abv)

Mertes KG Weinkellerei, Peter (Germany)

Supermarket 750 ml 3.79

Average Price

€ 5.85

Table 5: List of white wine pricing (Euromonitor International, 2016; Consultation 14/09/16)Appendix XX – Survey result on price category

Graph 3: Results of the dutch survey conducted (translation: In which price category do you buy wine?)

48

Appendix XXX – The Effect of Alterrations on Wine Vield (Gallons per Grapes)

Table 7: Table of the effects of alterations on wine yield (C.R. Dillon, J. R. Morris, C. Price, 1994. p3. ).

Appendix XX – Excise duty per percentage of alcohol content in the Netherlands

49

Table 8: Table of excise duty t be paid per percentage of alcohol content (Belastingdienst, 2016B)

Appendix E – Distribution of Alcoholic Drinks by Format and Category: % Off-trade Volume 2015

50

Appendix F – Selling Margin of Typic

al Wine Brand in Retail Channel Which Uses Wholesalers 2015

Appendix XX – Forecast Sales of Wine by Category: Total Volume 2015-2020

51

Appendix C - Market share of distribution channels

Appendix BLA BLA – Interview transcript with Mr. Johannes Lager, Industrial Design student

Interview transcript with Johannes Lager, Industrial Design Student in Osnabrück, Germany. Mr. Lager answered a few questions within a 45 Minutes interview via Skype.Nicole: Welcome Mr. Lager, thank you for your time to talk about our New Product Development. Could I ask you to introduce yourself shortly?Mr. Lager: Sure, well, I am a “industrial Design” student at the University of Applied Science in Osnabrück in my last semester of studies. I have been taught the technique of industrial design within 2 and a half years of studies and a 6 months’ internship in Munich. Before entering University, I finished a carpenter apprenticeship. Nicole: Why the carpenter apprenticeship, is there a direct connection to your industrial Design studies?Mr. Lager: To be honest, I just did not feel like studying yet, but in the end, turns out there are many connections, because I could develop a product oriented way of thinking during the work as a carpenter. Nicole: Could you explain what you mean by “Product oriented thinking”?Mr. Lager: Basically, it means that through my apprenticeship I was able to understand what a consumer wants in a product, practicality, convenience, beauty and many more things depending on the product. But basically, it is understanding who you work for. Nicole: In you apprenticeship you worked basically for the end consumer, while now your projects are more for industrial clients in the process of new product development and design, right?Mr. Lager: Yes.Nicole: What is the major difference between these two customer groups?Mr. Lager: Well, to be fair at the end you still work for a client. However, when you client is an industrial client it adds a stakeholder. Meaning, when making a piece of handmade furniture, the lady comes to the office and talks to me directly or the team. We work directly with the lady who later also puts the table into her living room. When designing a for example new motorcycle for a known brand, I need to meet their brand requirements, the requirements of practicality of the product from the view of the company and the taste of the end consumer. Adds a lot of more rules, regulations and guidelines to follow.Nicole: I have told you about our current project and you will also draw our sketches explaining the design of the product, what is your opinion about the design?Mr. Lager: Since I told you before in industrial design you have multiple stakeholders to get together on a satisfying level. From an end consumer point of view I see a market for it, since a wine it is a very common commodity to come not with empty hands to a dinner. So the packaging will make it convenient. As you know I proposed a couple of other packaging ideas that might are easier to realize. But as you know when we started looking into it, the convenience for the retailer was not given, higher costs were encounter, etc. Especially with a packaging that is separate from the bottle. When proposing to have the wine wrapped in the first place we encountered legal issues and increased transportation costs. Basically, this project shows you how difficult it is sometimes to joggle with many different stakeholders involved in a new product design. Nicole: Yes, thank you. Very true. What do you personally think adds the packaging and general design of a product to it?Mr. Lager: Well, you are asking a designer (laughing). I love design, I buy things as a consumer very often just for the outstanding design, which is simply different than the common products shelfed next

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to it. Taking serious, on the knowledge I gained during my educations in the past and personal experience, end consumers are very eye sight focused. They make a lot of decisions though what they see and what perception they will have of it. Price is another issue I personally see, so it is also product dependent. But nevertheless, I would say the right eye-catching product will increase the chances of a final purchase much higher. Nicole: Thank you Mr. Lager for your time and input. Also thank you very much for the sketch.

Appendix XX – Interview with the Manager of Muscat St. Jean in France conducted by Kader WhiteFollowing our study, we wanted to know how does the distribution of French wines in the Netherlands works, for it after several attempts we can join one of the managers of Muscat St Jean in France, Kader French student arrives at phone to get some information, and manages to get some interesting information despite privacy concerns that reigns in this area.What is your wine?Our wine is the Muscat St Jean de Minervois, located in the Herault in southern France, a quality product that has white Muscat AOC (controlled designation of origin).What is the strengths of your wine?The wine we offer is a quality wine, which is very perfumed with floral notes, it may as well be consumed both in appetizers or dessert especially with cheeses.Where can we find your product?Our products are available in all France but also in several European countries.Your products are available to the Netherlands, and if so can you tell me about this marketYes, our products are available in Netherlands for several years, this market is very promising, its geographical proximity facilitates transactions with that country, then the market is very easy to integrate i compared with other European markets including England, however, there is competition and we need each year to provide the best vintages..Your products are available in stores Albert Heijn what happens during the distribution?Concretely one goes through several distributors and the process is the same for each market, the approach is different depending on the market, but because of confidentiality with Albert Heijn I can tell you about the operation with themCan you give me a percentage of the distribution cost for the Dutch market?I cannot give you an exact but be aware that the average number of distribution cost is not the most important, I would say it is less than 10% of the price of the bottle, approximately 8%, but this percentage can also vary.Can you advise us to penetrate the Dutch market with a quality white wine?In reality all markets are important , but you need first a pre-depth study, and the success of your product depends primarily on the quality of the product you offer, but also consumer habits in the target country, I can do give a concrete answer because I do not know your product well, in any case I wish you luck.

Appendix XX – Interview with Leonie Vervelde

Albert Heijn – Store information

Dorien: How limited is the shelf space in the retail shop?

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Ms. Vervelde: Always limited and the supermarket success will depend largely on their ability to

maximize sales per square meter (shelf space). For every product and category they will analyse how

to optimize sales per square meter (within product categories and across) on a regular basis.

Dorien: How much space does the Albert Heijn have for private labels?

Ms. Vervelde: In terms of #products it is around 50%, but will likely continue to increase. Albert

Heijn makes a distinction between 4 different types of private label: AH basic, AH private label, AH

excellent, AH biologic.

Dorien: What kind of space do you, as a supplier, receive for promotion outside the shelf? Private

labels do not advertise outside of the shelf, do they?

Ms. Vervelde: If in promotion, also private labels will be promoted outside of the shelf. However, the

supermarket will be looking for a promotion fee or discount on product price – e.g. if you as supplier

pay X, you’re product will be on promotion and displayed at another place.

Dorien: What kind of promotion is applied to private label wine brands?

Ms. Vervelde: A wide range, most often X% discount on wine.

Dorien: What kind of profit margins does Albert Heijn wants to receive?

Ms. Vervelde: Don’t know, in grocery retail main focus is on revenues instead of margin

Dorien: What are the 5 most important key factors that Albert Hijn negotiates with their suppliers?

(Here I would like to achieve to have 5 major points of factors AH is really putting emphasis on when

negotiating with new suppliers e.g. margin, price, forecasts of sales, previous sales, history, etc.)

Ms. Vervelde: Price, sales forecast, ability to produce requested number of products (including a

range), supplier characteristics (do they meet AH’s criteria), quality

Dorien: What is the procedure when the Albert Heijn is approached by new companies?

Ms. Vervelde: No idea

Dorien: Are there special characteristics of labelling Albert Heijn is looking after?

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Ms. Vervelde: Should always include product characteristics, and might be required to be in Dutch

(don’t know for certain). For wine labels there are specific requirements for labels, e.g. contains

sulphite.

Wine knowledgeDorien: When did you start your own business?

Ms. Vervelde: 2011

Dorien: What have been setback for you in the process of importing the wine into the Netherlands?

Ms. Vervelde: Importing from South-Africa – it takes a lot of time. Sea transport will keep you busy for at least 3 weeks

Dorien: How did you research the legal part? Did you have to deal with anti-dumping duties and

agricultural levies?

Ms. Vervelde: No anti-dumping / agricultural levies as far as I am aware. Did online research and

contacted the ‘Kamer van Koophandel’.

There are super value wines, basic/subpremium wines, premium wines, ultra premium/deluxe wines,

icon wines (you might know them by different categories or names).

Dorien: What is your price range perception on premium?

Ms. Vervelde: I would say:

Super value – up to 3 euro

Basic / subpremium wines – from 3 – 7 euro

Premium wines 7 – 25 euro

Ultra premium >25 euro

Dorien: Up to what price do you have a perception of low quality wine, from the perspective of a

wine importer?

Ms. Vervelde: First, quality of a wine depends on similar wines in the same price range. That means,

you have to know what is available and if the quality of the specific wine is better than other wines in

the same price range. Only in this case you know you have quality in comparison to your competitors.

However, knowing what an empty bottle costs and the process to make wine, you cannot really make a

decent wine for 3 euro’s.

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Dorien: What is the core benefit of wine in your opinion?

Ms. Vervelde: Enjoyment for the customer

Dorien: What kind of wine is or will be more successful? White or red?

Ms. Vervelde: Hard to tell, if it’s warmer it will be more focused on white, winter more on red. In

general, more red wine is sold.

Dorien: How important do you think the packaging and labelling is for the end consumer?

Ms. Vervelde: Can definitely be important, especially for wines up to premium. Because of the fierce

competition wine label can definitely make a difference. Look at for example a winelabel from

Stormhoek (AH) where you can write on, or the funky wine labels of some of the HEMA wines.

Dorien: There is a very clear trend in design of a bottle, often vineyards, flowers, grapes and often

classic shape of bottles. To what extend do you think this matters to the sales of the wine?

Ms. Vervelde: Both shape of bottle and information on vineyard, grape variety used can be

determined in the place of origin/district where the wine comes for (‘appelation’). For example

Bordeaux wines have a specific bottle shape, vineyard and grape variety will tell you which part of

Bordeaux and quality of the wine (e.g. premier cru). But that’s mainly ‘old world wine’, in ‘new

world’ you increasingly see different type of labels with less information about the vineyard and

grapes, and more focused on the flavour (see HEMA for example).

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