1. food and drink
2. beverages
3. alcoholic beverages
4. wine

Export business plan
The Netherlands
Stellenbosch, South Africa
Export business plan
Export business plan
the Netherlands
Student information
Name:
Terry Berends
Education:
Bachelor of Commerce
ID-code:
428116
Phone number:
06-23691556
Address:
Zweerslaan 40
6711 GG Ede
Organization information
Supervisor: Nick Ridley
Wine Marketing and Sales Manager
Address:
Tel:
Fax:
Cell:
Internet:
96 Winery Road
P O Box 5337
Heldervue, 7130, Somerset West
South Africa
+27 (0) 21 842 2945
+27 (0) 21 842 2085
+27 (0) 71 332 8922
[email protected]
www.zandberg.co.za
University information
Name:
HAN University (Arnhem Business School)
Address:
Ruitenberglaan 31
City:
Arnhem
Postal Code: 6826 CC Arnhem
Tel:
+31 (0)26 369 1111
Fax:
+31 (0)26 369 1369
Internet:
www.han.nl
[email protected]
Tutor:
Internet:
Marlou Landman
[email protected]
Assistant:
Internet:
Loes Cuppen
[email protected]
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Export business plan
Management summary:
Zandberg is owned by a rich Russian business man (Igor kimaschinkov), who bought the
estate a few years ago, the General Manager (Dmitri Dos Santos) is Russian as well. The
management consist the owner and the general manager. Both managers has no experience
and knowhow in wine making and marketing, therefore the management of Zandberg hired
Mr. Ridley. He has a lot of knowhow of marketing and is very passionated about wine. Mr.
Ridley is responsible for the winelabels and sales of the wines. When Mr. Ridley started to
work for Zandberg the image of the estate was not very well, there was no range of wines
and the reveneu became less e.g. trough the economical recession. That is the reason that
Zandberg want to introduce new wines and work on a better image of the company and
become more profitable. Zandberg has not a clear view how they have to launch its wines to
the Netherlands and with what kind of strategy.
Assignment description:
Develop an international marketing strategy for Zandberg Wine Estate, which enables the
company to expand the brand and increase sales in the Netherlands.
Goal
Develop an international marketing strategy, which will gain revenue of ZAR 3.290.000 in the
Netherlands in 2012.
According to this business export plan, the goal of a revenue ZAR 3.290.000 will not be
achieved by entering the Netherlands using this export businessplan. In a normal scenario
Zandberg will gain a revenue of ZAR 1.165.620 in 2012, which is significant lower as
the goal.
Research question:
what is the most suitable strategy to launch Zandberg its wines to the Netherlands and
accomplish a revenue of ZAR 3.290.000 in 2012?
In order to enter the Netherlands the student has researched what the best suitable strategy
is to enter the Netherlands by using deskresearch and fieldresearch: intervieuws with wine
specialists in the wine business ( importers, Dutch and South African embassy, WOSA,
reports of the Stellenbosch business school). The best option to enter the Netherlands is
using an indirect strategy and cooperate with an reliable Dutch importer who distribute the
wines through it’s own distribution network. Furthermore, Zandberg will use market
development as market expansion strategy. This means that Zandberg will offer the excisting
wine range and enter new markets, in this case the Netherlands.
Summary internal analysis:
Zandberg is founded in 1699 and since then it has a rich history. The vineyards are situated
in a beautiful terroir nearby the Helderberg Mountain. Zandberg is situated in the
Stellenbosch wine area, which people know all over the world. Due the knowledge of the
wine maker combined with the wine marketing knowledge of Mr. Ridley, Zandberg produces
quality wines which has won several wine awards. Currently, Zandberg produces a Cabernet
Sauvignon 2005, 2006, 2007 , a dry Rosé and the first South African white Merlot. Zandberg
is selling the wine to BWC Boucheron wines, a domestic distributor in the Gauteng area.
Furthermore, Zandberg is selling the wine most of the wines to wine tourists in the wine
tasting centre on the estate. Zandberg export on a small scale to Canada, Germany and
Switzerland.
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Export business plan
Conclusion internal analysis:
Zandberg has potential for the future in terms of market expansion but has to invest in client
systems, stock systems and has to expand the wine range. Zandberg is analysed if it is
ready to export by using the nine strategic window’s. According to these strategic window’s
Zandberg need to focus on a niche market in the Netherlands. The Cabernet Sauvignon will
be sold domestically towards big restaurant chains (Primi Piatti and Odega) and will be not
available for the international market.
Summary External analysis:
The Netherlands will be an interesting country for Zandberg to sell it’s wine. An interesting
option for Zandberg is doing business with distributors, wine importers or an agent. South
Africa and the Netherlands have strong historical ties, which is important for doing business.
During the redit crunch, the consumers don’t spend much money on expensive wines but
prefer cheaper wines which are mostly being bought in supermarkets. The Dutch wine
market consists of 4.2 milliard euros in 2008. Concerning the niche markets which is worked
out, Zandberg will gain a total market potential of € 10.482.879,85,Conclusion External Analysis:
Potential niche markets: Beach companies, lounge bars and golf clubs is been analysed by
the student. The biggest threat for Zandberg is the credit crunch, consumers are not
spending extra money on luxery goods. The traditional Dutch wine market which consist the
supermarkets (off trade), the restaurants and hotelbusiness (on trade) is saturated in the
Netherlands.
Export business plan:
Zandberg will enter the Netherlands and focus on 46 lounge bars in the Netherlands. It is a
interesting niche market to start for Zandberg. The lounge bars will be operated by offering
the dry Rosé and the white Merlot.
Profit and loss account:
The student has made a profit and loss account of the export business plan in order to see if
this plan will achieve the goal of ZAR 3.290.000 in the Netherlands in 2012. The income in
the profit and loss account is based on a best, normal and worst case scenario.
Best case scenario: This scenario is based on the goals in the marketing and sales plan;
these are high formulated and could only be reached in a best case scenario.
Normal case: This scenario is based on 60% of the best case scenario what will be achieved,
this because it is a more realistic goal.
Worst case: This scenario is based on no sales in the Netherlands; the account manager will
not achieve in finding a Dutch business partner and selling any wines.
Worst case scenario
Normal scenario
Best case scenario
2010
2011
2012
-ZAR
ZAR 143312 ZAR146900
156900
-€15.085
€15.463
€16.515
ZAR
ZAR
ZAR
428.012
749.750
1.165.620
€45.054.10 €78921,89 €122.697,47
ZAR
ZAR
ZAR
1.838.100
617.812
1.151.650
€
€65.032,84 €121.200,16 193.484,79
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Export business plan
Table of contents
1. The decision whether to internationalise............................................................................ 9
2. Organizational audit..........................................................................................................11
2.1 Market definition .........................................................................................................11
2.2 Company profile .........................................................................................................12
2.3 Vision .........................................................................................................................12
2.4 Mision .........................................................................................................................12
2.5 Company strategy ......................................................................................................12
2.6 Current export strategy ...............................................................................................13
2.7 Current Situation Zandberg:........................................................................................13
2.8 Internationalization motives. .......................................................................................14
2.9 Triggers of export initiation..........................................................................................15
2.10 Internationalization barriers/risks. .............................................................................15
2.11 Internal organization: ................................................................................................16
2.12 Conclusion 7-S framework........................................................................................19
2.13 Growth stage of Zandberg ........................................................................................20
3. Marketing audit.................................................................................................................21
3.1Product ........................................................................................................................21
3.2Place Strategy .............................................................................................................26
3.3 Promotion Strategy.....................................................................................................28
3.4 Pricing strategy...........................................................................................................30
3.5 Conclusion marketing mix:..........................................................................................31
3.6 Value Chain: ...............................................................................................................31
3.7 Sales analysis.............................................................................................................36
Sales process...................................................................................................................36
4.Financial audit ...................................................................................................................38
5.Conclusion internal analysis ..............................................................................................38
External analysis ..................................................................................................................39
1. Market definition and market analysis...............................................................................39
1.1 Introduction.................................................................................................................39
1.2 Market definitions .......................................................................................................39
2. Market environment Zandberg:.........................................................................................41
2.1 General structure of the international wine market......................................................41
2.2 Potential in the Global wine market:............................................................................41
2.3 South-African wine export:..........................................................................................41
3. DESTEP- analysis the Netherlands ..................................................................................43
3.1 Demographical aspects: .............................................................................................43
3.2 Economic aspects ......................................................................................................44
3.3 social and environmental aspects ...............................................................................46
3.4 Technical aspects.......................................................................................................47
3.5 Ecological aspects: .....................................................................................................49
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Export business plan
3.6 Political and juridical aspects: .....................................................................................50
4. Dutch wine market............................................................................................................51
4.1 Dutch wine market size and potential: ........................................................................51
4.2 Wine market segmentation: ........................................................................................52
4.3 Imports from other countries: ......................................................................................52
5. Wine Consumer Analysis the Netherlands:.......................................................................54
5.1 Wine consumption the Netherlands: ...........................................................................54
5.2 Identification wine consumer the Netherlands.............................................................55
5.3 Preference in Wine .....................................................................................................55
5.3 Trends en developments Dutch wine-consumers: ......................................................56
6. Wine markets the Netherlands:.........................................................................................58
6.1 Beach companies .......................................................................................................58
6.2 Cafe (bars) .................................................................................................................59
6.3 Golf clubs ...................................................................................................................62
7. Distribution analysis:.........................................................................................................65
8. Competitor Analysis:.........................................................................................................67
8.1 Five Forces analysis The Netherlands: .......................................................................67
9. Conclusion external analysis: ...........................................................................................70
8.1 Potential for Zandberg in the Netherlands:..................................................................70
8.2 Overall Conclusion:.....................................................................................................70
SWOT-Analysis and confrontation matrix .............................................................................71
1. Swot analyses ..................................................................................................................71
1.1 Introduction:................................................................................................................71
1.2 SWOT-Analyses: ........................................................................................................71
1.3 Confrontation matrix ...................................................................................................72
2. International Market selection...........................................................................................73
2.1 Market expansion strategies .......................................................................................75
2.2 Conclusion International Market selection...................................................................75
Export plan business plan ....................................................................................................76
1. Stratetgy...........................................................................................................................76
1.1 Strategicall summary ..................................................................................................76
1.3 Target group in the Netherlands .................................................................................77
1.5 Competititor Analysis: .................................................................................................78
1.7 Revenue goal .............................................................................................................80
1.9 Strategy Typology.......................................................................................................82
2. Marketing: ........................................................................................................................83
2.1 Product: ......................................................................................................................84
2.3 Price plan: ..................................................................................................................94
2.4 Distribution plan:.........................................................................................................96
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Export business plan
3 Sales plan .........................................................................................................................98
4 International law and customs .........................................................................................101
5 Financial plan ..................................................................................................................103
6 Risk Management ...........................................................................................................111
7 Bibliography ....................................................................................................................112
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Export business plan
Introduction:
This report consist the situational analysis; internal and external analysis. Furthermore, this
report consist the export business plan, which is written for Zandberg. Zandberg is a wine
producer and supplier which is located in Somerset West, the Stellenbosch wine area in
South Africa. This report will be written for a period, 2009 till 2012.
First, the organisation of Zandberg is been analysed in the internal analysis. This analysis is
focused on the internal factors that characterize the organisation; its purpose is to attain
insight in the success-increasing factors (strengths) and the value-decreasing (weaknesses)
factors in this specific organisation. This is done with the help of a SWOT-analysis. In this
case, Zandberg, the SWOT-analysis focuses on the exporting Zandberg its wines towards
the Netherlands.
The external analysis will give information about the environment of Zandberg. The market
environment consists of both the macro environment and the micro environment. After a
detailed analysis the last chapter consist a SWOT-analysis and a confrontation matrix to
have a clear view of all the Strengths, Weaknesses, Opportunities and Threats.
The export business plan consist suggestions of how to enter the Dutch wine market.
Furthermore, this business plan will be implemented by the account manager (the student).
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Export business plan
1. The decision whether to internationalise
Introduction
Internationalization is unlikely to be succesful unless the firm, in this case Zandberg,
prepares in advance. Advance planning has often been regarded as important to the success
of new international ventures (Knight, 2000). The following nine strategic windows of Solberg
will be used to decide of Zandberg should ‘stay at home’ or further ‘strenghten the global
position’ as two extremes. The framework in Figure 1.1 is based on the following two
dimenseions: Industry globalism and Preparedness for internationalization
Fig. 1.1 Solberg, nine strategic windows
1.1Industry globalism
Basicly, Zandberg cannot influence the degree of industry globalism, as it is mainly
determined by the international marketing environment. On the one hand, the wine industry
has a international competitive structure with increasing interdependencies between the wine
market, customers and suppliers. The wine industry is not very international like software,
movies and aircrafts. On the other hand, the wine industry is not part of a multidomestic
market environment. When we take a look at the wine industry of South Africa, partically to
Zandberg the market is potentially global. The South African wineries are more focussed on
exports these days. Currently, Zandberg is exporting already on a small scale. Therefore
Zandberg is based in the potentially global column.
1.2 Preparedness for internationalization
This degree is basicly dependent on the ability of Zandberg to carry out strategies in the
international marketplace, i.e. the actual skills in international business operations. When we
take a look at the peronal skills of Zandberg. Mr. Ridley is the only person who is well
educated (Bcom Marketing, wine marketing at the UCT, serveral wine certificates), has the
knowledge of exporting wine and speaks well English. Zandberg is a small winery and has
therefore not enough financial sources to invest in appropiate marketing campaign’s.
However, Zandberg has a lot of potential to grow both domestically and internationally,
according to an intervieuw with Anette Badenhorst of WOSA. The winerange will be expand
by de demands of the international consumer and the objective of Mr. Ridley is to build an
brand domestically. This means, in this stage Zandberg is immature. However, Zandberg has
potential to grow and evantually be Mature.
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Export business plan
1.3 decision
As analysed in paragraph 1.1 and 1.2, Zandberg is based in the potentially global column
and in the immature row. This means that Zandberg has to seek for a niche market in the
Netherlands (window number 4). Zandberg has the ability to enter the Dutch market but is
immature and should therefore searching for small profit making market(s).
1.4 Development of the ‘global marketing’ concept
The form of zandberg’s response to global market opportunities depends greatly on the
management’s assumtions or beliefs, both concious and unconscious, about the nature of
doing business in other countries, which is called the EPRG framework. It consist of four
orientations as follows: Ethnocentric, Polycentric, Regiocentric, Geocentric.
In this case, Zandberg is currently Etnocentric, which means that the home country is
superior. The focus is on selling wine domestically with the USP’s terroir, quality of the wine.
Zandberg aims to be Polycentric within the next three years, which means seeing each
country as a unique market and therefore targeted in a different way. Therefore, Zandberg
aims to be market orientated and making wine what the wine consumer desires of particilar
markets.
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Export business plan
2. Organizational audit
Introduction
The internal analysis will be analyzed throughout an organizational audit, marketing audit
and a financial analysis. This organizational analysis will function as an overview of the core
business of Zandberg.
2.1 Market definition
The current market definition of Zandberg in South Africa will be clarified by using the three
dimensional business definition graph (abell). This is a definition graph of the domain where
the market is analyzed by using three dimensions, customer’s functions, customer groups
and the alternative technologies which could used to satisfy the client needs.
The customer groups consist of current customer groups of Zandberg. The current market of
Zandberg is selling wine to one distributor (boucheron wines), export small volumes to
Germany and Canada and wine tourists in the wine tasting centre. The potential buyers are
importers of new export markets and big chains in order to provide restaurants and super
markets in South Africa. Currently, Zandberg is trying to satisfy the customer by offering a
quality product and a appropriate price-quality relationship.
Customer Functions
Delivery liability
Wine range
Price-quality relationship
Price policy
Product policy
Customer groups
1
customer groups:
1 Distributor, export, wine tourists
Logistics
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Export business plan
2.2 Company profile
Zandberg is founded in 1699 and is owned by several owners of the last ages. Zandberg is a
wine producer and supplier of wine. Currently, Zandberg sell its wines both domestic and
internationally. Zandberg is located in Somerset West, in the Stellenbosch wine area.
Legal structure:
When taking a look at the legal structure, Zandberg is a subsidiary of Chesterfield Group
Holding. Chesterfield owns multiple companies, e.g a golf club in Russia,other wineries,
hotels. all over the world; the owner of Zandberg is Igor kimaschinkov, an wealthy Russian
businessman. The Russian management has bought the estate for an investment and has
no knowledge of wine making.
Further legal information is unfortunately not available e.g. the company is a plc or an ltd, this
because the Chesterfield is not registered at a Chamber of Commerce and is not willing to
provide more information to the student.
Conclusion company profile
It is a weakness that the management of Zandberg has no knowledge of making wine. This
means, the management has to depend on other people who has the wine knowledge.
2.3 Vision
No vision has been formulated. Within Zandberg are multiple visions (management and
employees) about the future. Furthermore, there is no clear view for the future. This is a
weakness for Zandberg.
2.4 Mision
The current mission of Zandberg is:
“Zandberg aims to provide quality wines with appropriate packaging and presentation
to the domestic and international aspirant wine markets at youthful and mature
consumer levels and create sustained consumer brand loyalty relationships with their
products at both entry levels.”
The way Zandberg currently work does not live up with the mission. The mission is about
entering domestic and international aspirant markets at multiple entry levels. Zandberg does
not have a complete wine range yet to accomplish the described mission.
2.5 Company strategy
•
•
•
•
Produce quality wines;
Building long term business partnerships both domestic and internationally;
Building an wine range;
Building a brand.
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Export business plan
2.6 Current export strategy
•
•
•
Building the brand internationally.
Building long term international business partnerships.
Explore aspirant international market to gain revenue.
2.7 Current Situation Zandberg:
The following analysis is based on the own experience of the student. During five months,
the student has made several interviews, with particular employees and management to
create a clear view of the situation of Zandberg.
Zandberg is a wine estate which is founded in 1699. However, the wine estate has been
producing quality grapes since 2001 which resulted in quality wines. The wine maker of
Zandberg is the 6th generation of winemakers. Unfortunately, Zandberg is selling small
amounts throughout the world, especially to Russia, Canada, Belgium and Germany. The
wines of Zandberg have not been marketed for domestic sales channels or other
international markets. The effect of this is that there is no real profit margins and limited
brand awareness.
Zandberg has to realize that they cannot survive of only producing wine and selling it. Wine
tourism has to be the integrated in the company strategy. The wine estate has a lot of
potentials, such as the wine tasting what is focused on wine tourists. According to the
viticultulist, the vine yard of Zandberg is not in a good shape. According to WOSA,
consumers judge these days not only on the image of the brand and the relation between the
quality and the price when the buying wine. The consumers judge also on the state of the
vine yard. According to a survey of estimated 100 wine consumers, the 2005 and the 2003
wine which was the first run resulted in a bad image for Zandberg. On the label of the 2005
bottle where traditional faces printed and on the 2003 where golf players printed, which
resulted on a poor packaging and branding for a good product. The effect of the poor
packaging is that the product was not accepted by wine consumers domestically and
internationally. At this stage Zandberg only tried to sell something with no strategy. The
image of Zandberg is been damaged, the products where launched without any research
what consumers want and what kind of label suits the best for the product.
Mr. Ridley was hired in the end of 2006, to become the new wine marketing manager. His
goal is to improve the image, which will result in more revenue. Before he launched the
product of the second run, he researched the market well and designed a new label as
shown in figure 2.1 Zandberg has now a clear logo which is the basis for a new brand.
Fig 2.1 Cabernet Sauvignon 2005
The talent of the winemaker combined with the terroir has resulted, that the second run of
cabernet Sauvignon wins a gold medal wine award of the Concours Mondial in Bruxelles and
a silver medal Michelangelo in 2008 for the Cabernet Sauvignon 2005. Compared with the
African Faces, it has the same terroir as the new developed Cab. 2005, it has only a different
method of production. The cabernet Sauvignon 2005 which is shown in figure 2.1 is further
emphasized in the product paragraph of this analysis.
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Export business plan
2.8 Internationalization motives.
The most important reason for Zandberg to export its wine is that the South African market is
too saturated. As analysed in the external analyses there are hundreds of wineries in South
Africa who are trying to sell its wines domestically. Furthermore, there is an over production
of 43% which result in a fall in selling prices. Zandberg is a small winery which has to
distinguish of all those wineries, this is difficult for Zandberg. The biggest wineries have the
largest market share in the off – and on trade businesses. Zandberg has to focus on potential
international markets to survive, especially during the economical recession.
The revenue is not really high for a wine estate like Zandberg. A way of earning more money
is to penetrate more countries and markets. Using desk research, will be researched if it is
wise to export the wine to the Netherlands.
The entry strategy is an important part of the export policy of the company. It is necessary to
make a choice on which period of time and on which way the market has to be approached.
The goals on a longer term are very important for the market entry choice at the beginning of
entering a new market. When choosing the entry strategy, possible choices for exporting the
Zandberg products are, direct and indirect export. Currently Zandberg is a small wine estate
with no subsidiaries or agents in foreign countries.
Zandberg is only exporting wine with small amounts throughout the world as mentioned
before, especially to Russia, Canada, Belgium and Germany. Zandberg has not a clear
export strategy so far. They grab every opportunity to sell wine internationally and
domestically. Zandberg is not a market focussed organisation with Nick in place, Zandberg
knows that it has to be market orientated but it takes time and understanding of the Russian
managers to be really market orientated. The following motives are diveded in Proactive
motives, which represent stimuli to attempt strategy change, based on Zandberg’s interest in
expoiting competences or market possibilities. Reactive motives indicate that Zandberg
reacts to the pressures or threaths in South Africa or in foreign markets, in this case the
Netherlands and adjusts passively to them by changing its activities over time
Proactive motives
• Spread the risks out of more markets;
• Build the brand of Zandberg internationally;
• Gain an better image internationally;
• Profit and growth goals;
• Economies of scale.
Reactive motives
• Extremely satisfied market in South Africa (43% is overproduction);
• Cometitive pressures;
• Proximity to international customers.
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Export business plan
2.9 Triggers of export initiation.
For internationalization to take place someone or something within or outside of Zandberg,
must initiate the process and carry it through to implementation. Zandberg has the following
internationalization triggers, which are divided in internal and external triggers:
Internal triggers:
• Specific internal event;
Mr. Ridley as specifically looking for potential markets and is trying to emphasis of
export.
• Importing as inward internationalization;
using capabilities and network of business relationships in order to focus on a new
market.
External Triggers:
• Market demand in the Netherlands;
According to deskresarch and intervieuws with the Dutch Ambassy, Wine importers
(wijnunie, De Bruijn Wijnkopers and Bart Wijnkopers) the Netherlands has potential
for South African wines.
• Competing firms;
Competitive wineries who could damage the market for Zandberg.
• Outside Experts;
Outside experts who knows the wine market abroad and could advise Zandberg what
to do, such as the viticultulist, who travel’s a lot to other wine producing countries.
2.10 Internationalization barriers/risks.
There is a wide variety of barriers for zandberg to succesful export operations an be
identified. Some problems mainly affect the export start; other are encountered in the
process of exporting for Zandberg. Critical factors hindering the internationalization initiation
of Zandberg include the following barriers:
•
•
•
Lack of capital to finance expansion into foreign markets;
Insuffcient knowledge of the management of Zandberg;
Lack of export commitment of the management of Zandberg.
General market risks:
• Language and cultural differences;
• Difficulties in finding the right importer/distributor in the Netherlands;
• Complexity of shipping services to overseas buyers.
Commercial risks:
• Exchange rate fluctuations between the Euro and South African Rand;
• Delays and/or damage in the export shipment process;
• Difficulties in obtaining export financing.
Political risks:
• Confusing Dutch import regulations and procedures;
• Export policy of South Africa;
• Dutch government restrictions.
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Export business plan
2.11 Internal organization:
The internal organization will be analysed using McKinsey’s 7-s framework. This framework
consists seven parts (Strategy, Structure, Systems, Style, Staff, Skills and shared values).
This analysis is based on information witch is gained from personal experience of the
student, as well as in-depth interviews with Mr. Ridley, the viticulturist, General Manager and
other employees. This framework will be used to judge the quality of the company. The result
reveals if the different aspects of Zandberg are in balance and eventually the affectivity of
Zandberg will be measured.
Strategy
Zandberg currently produces wines, which the company sells to both consumers and
businesses. At the moment Zandberg grabs every opportunity to increase sales. However,
there is no clear sales strategy at the moment. Currently Zandberg is focused on building a
brand and completing the wine range based on the demands of the wine market. The
potential clients from overseas want to experience the South Africa culture and the quality of
wine. Therefore, Zandberg has to focus on the South African authenticity what potential
clients want. The effect is that Zandberg still is searching for a clear position in the wine
market, both internationally and domestically. Currently, Zandberg depend on the Russian
management who invest extra money each year to survive. This is also the reason why
Zandberg is suriving the credit crunch.
Zandberg could accomplish this goal to search for new international sales channels and
introducing innovative wine products and focus on the packaging, wine label, demands of the
wine consumer in specific countries. The revenue goal of Zandberg concerning the export
will be three million South African rand in 2012. Furthermore, Zandberg will focus in the
future more on the market demands to eventually become a market orientated organisation.
Structure
The structure of Zandberg is divided in the wine department and the hotel department. The
management team consists of the Directing manager and the General Manager, both are
wealthy Russians. As shown in the organ gram in figure 3.1 you will see that the wine
department consist a wine marketing manager and wine experts which are take care of the
wine yards of Zandberg.
Fig. 3.1
Remarkable to see is that only one manager, Mr Ridley is responsible for the marketing,
sales, export, logistics, building the brand etc. This is a weakness of Zandberg and is not the
most ideal situation when Zandberg want to be a market orientated organization and want to
Export to the Netherlands. When Zandberg want to export more wine, Zandberg need more
sales managers. The structure of the company has to be changed especially when Zandberg
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Export business plan
want to focus on exporting its wine. The structure of the organization could be defined as a
flat structure. Even though there is a flat structure within Zandberg, the structure is
hierarchically. There is a large gap between the vineyard crew and the management of
Zandberg, this is due to the national culture and is the same all over South-Africa.
Systems
The wine-section of Zandberg uses only a few standard procedures. There is a standard
procedure for e.g.
- Invoicing,
- Logistics,
- Finances,
These procedures are known to whoever has to deal with them. However, they are not
documented and have to be taught personally. Furthermore, these procedures are quite
basic and can be made a lot easier with the implementation of more advanced, but still
simple, software. When comparing the systems used by Zandberg with the average
European company, it becomes clear that Zandberg is behind quite a bit. There is no client
database, automated order/invoice program etc. Because these systems are not available, it
is impossible for Zandberg to clearly monitor their customers, their demands and their buying
patterns. The company does not know who their best customers are and what these
customers really want.
Style
The style of leadership at Zandberg is different compared with a Dutch organization because
of the cultural difference between the countries. Therefore, the student will not compare the
leadership of managers at Zandberg with Dutch managers. Instead of that the student will
analyse the style of leadership with an objective point of view. The management of Zandberg
consist a Russian Directing manager and a General Manager. Both are leading Zandberg on
a Russian management style which could be defined as hard and formal.
It is very clear who leads the organization, the employees has there own responsibilities. The
General Manager is in charge during the daily activities. The Directing Manager is a wealthy
Russian business man which owns a lot of real estate al over the world, he only visit
Zandberg a few times a year. Furthermore; both are communicate in Russian with each other
and communicate in English with all the employees. There is an informal atmosphere
between the employees compared with the formal way of communication between an
employee and the employer.
Staff
As there is not a real emphasis on educating staff within Zandberg, it is important that the
right people get selected for a vacant position. If staff wants to get further developed, it is
upon their own responsibility and, most of the time, for their own costs. As with most SouthAfrican companies, Zandberg uses a lot of untrained staff as well for day-to-day chores.
When hiring new, untrained, staff, the selection is based upon reliability of the staff. As
Zandberg is a small company, with only a few positions which require specific knowledge, all
people applying for vacant positions are external. These people do not know the company,
which is a big disadvantage in the first months of employment. However, this is the only
option for Zandberg to get new employees.
The functioning of staff is assessed continuously by Mr. Dos Santos, General Manager of
Zandberg. He asks people what they are doing and what their progress is. If there is not
enough progress, Mr. Dos Santos will either try to put in new ideas, or he will have a
discussion with that member of staff, from where he will take action. The way staff threats
each other depends on their relationship in the hierarchical structure of the company. People
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Export business plan
on the same ‘level’ communicate with each other in an informal, casual way. However,
when communicating with someone on a different ‘level’ in the hierarchical structure,
communication is quite formal. Zandberg does not have any corporate events or team
building days for their staff outside of work.
Skills
because there are a lot of wineries active in the South-African market, it is hard for Zandberg
to distinguish themselves. Competitors offer similar products in the same price class with the
same or better service. However, Zandberg has to have core skills, serving demands in the
market, to survive. These core skills are:
Quality of the product
The biggest asset of Zandberg is the quality of its products. The Zandberg ‘Cabernet
Sauvignon 2005’ for example, was awarded with a gold medal at the Concours Mondial de
Bruxelles in 2007. Other products have won awards as well and customers praise the quality
of the products Zandberg delivers.
Price
Because the wines of Zandberg are produced in bulk, it is possible to sell products against a
very competitive price. As in every market, a competitive price is necessary to survive in the
wine industry.
Even though there are two core skills present at Zandberg, the company does not have
some other vital skills. The most vital skill missing is a range of wines. However, the
company is busy developing a range of wines, so, within the near future, this will be a skill as
well. Other vital skills, missing at Zandberg are e.g. a proper distribution system or an
efficient sales system. This is because the wine marketing department is still at a
developmental stage.
Shared values
The culture of Zandberg is experienced as informal. However, there is not really a team spirit
at Zandberg. The wine and hotel department operate separately from each other and hardly
cooperate. The effect of this is that the cooperation within the company will be less;
Zandberg will be less capable in doing business. Furthermore; there is a difference opinion
between the GM and the wine department concerning the business priorities and vision at
Zandberg.
The GM is more focused on the accommodation and the development of real estate instead
of the wine department. Zandberg has realist that they have to distinguish from the market,
because of that Zandberg is busy with building a brand and work on the image of Zandberg
domestically.
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Export business plan
2.12 Conclusion 7-S framework
S
Strengths
Weakness
Strategy
- Willing to complete the
wine range.
- Selling wine to consumers
and businesses.
Structure
- Clear structure, everyone
knows who its superior is.
- Searching for a clear
position in the wine
market.
- Not a market focussed
organization.
- The structure of
Zandberg.
- The Marketing manager
has too many functions.
- Using standard systems
for procedures.
- Systems just basics, e.g.
no client database or
automated invoicing
system
Systems
Style
- Informal atmosphere
between all colleagues.
Staff
Skills
- Quality and the price of
the product.
Shared Values
- Company started building
and improving a brand
already
- The Russian
management style.
- not a real emphasis on
educating staff within
Zandberg
- Missing a complete wine
range.
- Missing a distribution
system and sales system.
- Missing a clear vision.
- No team spirit and the
departments hardly
cooperate.
According to the above analysis, Zandberg has some weaknesses. The weakest factor is
that the management has not a modern point of view in terms of doing business and the
vision of the future. This will have consequences for the future when Zandberg want to be a
market orientated organisation. It will be hard for the management to adapt itself on the
market and to focus on the demands of the clients. Mr Ridley, is currently responsible for the
marketing department. It would be impossible for one person to focus on both the domestic
and international market.
Furthermore, the framework of Mckinsey reveals that Zandberg has to invest more in
systems. Currently, Zandberg has no client systems, stock systems etc. By expanding the
sales to new markets it will be very important to have updated information about how much
wine Zandberg can offer to the client from stock, and knowing who your clients are in order to
focus on CRM (customer relationship management) in the future.
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Export business plan
2.13 Growth stage of Zandberg
Furthermore, a look will be taken at the stage of growth, where Zandberg is in at the
moment. This will be done using the five stages of growth by Churchill & Lewis. The
American authors have done research to the growth of companies. Both have also
researched which factors have an influence on the growth of companies. Churchill & Lewis
diverse the following growth stages; from a starting company till a big and full-grown
company:
•
•
•
•
•
Establishment of a company;
Survive and a tender growth of a company;
Success;
Expansion;
Optimal relations.
Even though Zandberg has been founded in 1699, the growth stage of the company is and
can still be described as phase two: survival. This is because the company only began to
operate efficiently and market-orientated a few years ago. The company is selling its
products and gains a small profit, but is still struggling to become a success. A small setback
(like a bad harvest or a failed wine) can cause big problems for the company
The priority for a company in the ‘survival’ stage is getting enough turnover to pay debts and
to be able to replace necessary equipment. Furthermore, the company should try to increase
its turnover and size, so it can grow to the next stage, ‘success’.
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Export business plan
3. Marketing audit
In this marketing audit will the current marketing mix being analysed using the 4 P’s, these
consists Product, Place, Promotion and Price.
3.1Product
The demands of the South-African market vary, depending on the segment of the market. In
the lower-end segments, price is the most important thing, mid-end segments are looking for
a good quality against an affordable price, and where as the high segments are only looking
for an excellent quality. As Zandberg tries to focus on the mid- to high-end segments, an
excellent quality for an affordable price is the product it needs to deliver.
Analyzing the products of a wine estate is different from analyzing the average product.
Because wine is an agricultural product, there is only one moment of production for each
product; no vintage will be the same. It is never sure if next another vintage will have the
same quality or taste. Currently, Zandberg has its products divided into three tiers. The tiers
Zandberg offers are:
Premium tier:
Quality
This is the wines with the highest quality. This tier target people with knowledge of and a high
involvement in wines. The goal is to develop complex wines with a sophisticated taste.
Zandberg emphasizes this with the label. The label is Currently, the only wine in this top tier
is Cabernet Sauvignon. This is the product where Zandberg is specialized in, mainly because
of the terroir the vineyards are situated on. Because the area Zandberg is situated on lies in
a valley close to the Pacific Ocean, winds cause the vineyard to cool down in the afternoon,
creating better quality grapes, making the wine of better quality. This actually creates a
competitive advantage for Zandberg, compared to other wine estates. The Cabernet
Sauvignon is the core competence of Zandberg.
Design of the bottle
The design of the Premium tier is designed to have a clear logo, it could be typefied and
radiate as a exlusive bottle. The bottle has a traditional cork, at the front of the bottle the
awards are printed in order to give the bottle more exclusivity. However, the 2006 has won
no awards and has only a clear label. At the back of the bottle you will find a sticker with the
code of the bottle which is important for the department of Agrilulture in South Africa. The
premium tier wine has a alcahol percentage of 14, 5% with a volume of 750 ML per bottle.
According to a consumer survey of 100 consumers, the bottle is well designed and have a
exlusive character.
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Export business plan
The top tier currently consists of the following wines:
Cabernet Sauvignon 2005
The current top wine of Zandberg is the premium Cabernet Sauvignon 2005. It is
of excellent quality, being proven by the two awards it won at international wine
festivals (gold at Concours Mondialles de Bruxelles and silver at the Michelangelo
awards). John Platter, known as the expert on South-African wines, awarded this
wine with three stars (out of a possible five).
Cabernet Sauvignon 2006
The Cabernet Sauvignon 2006 has been bottled in the beginning of 2009, but still
has to age for a few months, before it is ready for selling. Even though John Platter
has awarded this wine with 3.5 stars, consumers and wine connoisseurs agree
that the quality of this wine does not reach the quality of the Cabernet Sauvignon
2005. The Cabernet Sauvignon will be ready to sell in early 2010.
Production capacity
Zandberg has a production capacity of 30 000 litres (40 000 bottles) of Cabernet Sauvignon
per year. However, a big disadvantage of producing Cabernet Sauvignon is the production
costs. The wine has to be aged in wood for two years, this cost a lot. For the upcoming 2007vintage, the production costs will be around R 18 per bottle.
Versatile tier:
The versatile tier has only recently become available for sale. This tier is developed to be
fashionable and to be versatile in food-pairing. Because Zandberg used to make only
traditional red wines, the products in this versatile range are either variations on these red
wines, or produced with grapes bought from external vineyards. Zandberg tries to
differentiate itself by producing these versatile wines.
Dry Rosé 2009:
The Dry Rosé 2009 is the first Dry Rosé Zandberg has produced. Where
most rosé’s are being produced in France, this Rosé is produced from
Cabernet Franc (produced at external vineyards), giving it a distinguished
taste compared to the Rosé’s of competitors. The Rosé was developed for
the export market, with a taste closer to what the European consumer
prefers. As the Dry Rosé has just been released, no real market position
has been gained yet, so the performance of the dry rosé cannot be
analyzed.
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Export business plan
Production capacity
Zandberg produces 20 000 litres (26 600 bottles) of Dry Rosé per year. Because the
Cabernet Franc is produced at external vineyards, the production costs are a bit more
expensive than what they would have been when produced at Zandberg itself. Production
costs for the Dry Rosé are R 14 per bottle.
White Merlot 2009:
Zandberg’s White Merlot 2009 was the first White Merlot ever produced in
South-Africa. It is produced by altering the way normal (red) Merlot is
produced. This process gives the White Merlot a unique taste, incomparable
with any other wine.
Unique selling point
At the moment, the uniqueness of the wine is its USP, causing this first
vintage to nearly have sold out in two months. The new vintage will be
available around June 2010. Until other wineries start making White Merlot as
well, the uniqueness will stay the USP. However, when other wineries start
making white merlot as well, Zandberg will need a clear strategy and market
position for this product.
Production capacity
Zandberg produced 3000 litres of White Merlot during the 2009-vintage and is planning to
expand production to 20 000 litres (26 600 bottles) of White Merlot before 2012. Merlot is
produced at Zandberg and this wine does not need aging. However, the special process
used to make white merlot makes production a bit more expensive. Production costs for the
White Merlot were R 18 per bottle for the 2009-vintage. Because the production will be
increased, production costs for the 2010-vintage will be lower, and are expected to be
around R 12 per bottle.
Design of the bottle
The design of the Versatile tier is designed for modern and young urban people, it could be
typefied and radiate as a fancy and modern bottle. The bottle has a modern screw cap, with
a red top for the Rosé and a fancy silver top for the white Merlot. At the back of the bottle you
will find a sticker with the code of the bottle which is important for the department of
Agrilulture in South Africa. The dry Rosé, has a alcahol percentage of 14% with a volume of
750 ML per bottle, the white Merlot has a alcohol percentage of 13% with a volume of 750
ML. According to a consumer survey of 100 consumers, the bottle is well designed and
especially the young urban people likes the design of the bottle.
Low tier:
The lower tier currently exists of wines of lower quality. Generally, these wines turned out to
be worse than expected (due to bad harvest or processes during aging), or were
experiments which did not have a satisfying result. Zandberg tries to sell these wines for
cheap prices. Currently, there is only one wine in the lower tier. This wine is:
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Export business plan
Cabernet Sauvignon 2005 – African Faces
In 2005, Zandberg produced two Cabernet Sauvignons. One is the Cabernet Sauvignon
which won two awards and is currently the flagship wine of the company. The other (African
Faces), was not aged as long and turned out to be of inferior quality.
Design
Furthermore, this is the only wine left with the old branding. This branding had pictures of a
certain theme on it for every range, the Cabernet Sauvignon 2005 carried pictures of African
Faces. Currently, Zandberg tries to offload this wine against bargain prices, and the company
is not planning on producing an equivalent to the Cabernet Sauvignon 2005 – African Faces.
Type assortment
With these three tiers, Zandberg has a deep range, but not a very wide range. If the
Cabernet Sauvignon – African Faces sells out, the range will drop down to two tiers, with
only the premium Cabernet Sauvignons and the Dry Rosé remaining (with the White Merlot
being available again from June 2010).
Even though Zandberg finally has multiple wines to offer, the range is still a weakness. There
are only three varieties available, while the market (especially distributors) is demanding for
wineries with a lot of varieties, making it easier for distributors to sell a wide range with only a
small amount of suppliers.
Service
The most important service Zandberg provides is a tasting centre. This is both a service and
a promotion tool. The tasting centre gives consumers the opportunity to try the different
wines Zandberg produces and, in the meantime, to learn more about the product. At the
moment, the tasting centre is basic. People can taste wine and buy the wine they like, but
there is no additional experience created. The consumers can pay by cash, pin transactions,
credit card or other electronic transactions. When someone has paid for the wine it is not
possible to refund the money. However when the quality is bad there will be given new
bottles, it depends on the circumstances. Other wineries create this additional experience
with e.g. vineyard tours or food-and-wine tastings. The tasting centre can be used to create a
bond with the consumer, but Zandberg currently is not using the full potential of the tasting
centre.
Another part of the service is delivery. Zandberg takes care of delivery, depending on the
size of the order, where the order has to go and who places the order. Bigger orders and
orders outside the Cape-region are outsourced to a specialized transport company. Smaller
orders within the Cape-region for loyal customers can be delivered by the staff of Zandberg.
However, most of the time, small orders are being fetched by the customer instead of being
delivered.
Product life cycle
To know if there is a lot of potential growth for the different products, a look at the product life
cycle will be taken. Instead of the actual products, the product life cycle of the product group
in the domestic and international market will be analyzed.
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Export business plan
Premium Cabernet Sauvignon
Internationally, the Premium Cabernet Sauvignon is in the introduction and growth stage.
This means, Zandberg is trying to build the brand abroad and is searching to a useful
strategy, to gain more profit from international markets. In the domestic market, premium
Cabernet Sauvignon has reached the maturity-stage. This means that there is only a small
growth, and that there are not a lot of potential ‘new’ customers. This makes it hard to
increase distribution and sales for a small company like Zandberg, because they will have to
‘steal’ market share from direct competitors to realize this.
Dry Rosé
Internationally, the Dry Rosé is in the introduction stage. The wine is especially developed for
the export market. This means, due well research of the needs of the consumers, Zandberg
knows that people in Europe prefer Dry Rosé above sweet Rosé. Europe has a lot of
potential buyers who prefer South African wines, thus of a few wineries are producing Dry
Rosé. Domestically, Dry Rosé is in between the ‘introduction’ and the ‘growth’ stages. There
are quite a few wineries producing Dry Rosé. However, as South-African people prefer sweet
Rosé, the popularity in South-Africa is not large. The market for Dry Rosé is more a nichemarket and Zandberg developed the Dry Rosé more for export markets.
If more South-African people get to accept Dry Rosé, a larger part of the potential consumers
will be reached and Dry Rosé will be able to fully enter the growth stage.
White Merlot
White Merlot is a product in the ‘introduction’ stage, internationally as well as the Dry Rosé.
Both are being bottled recently and has to build an image; internationally and domestically.
Zandberg was the first company in South-Africa to produce this particular wine and it was
only introduced in the last few months. There are only few consumers who know White
Merlot and the distribution is very limited. However, as the first vintage was sold out really
fast, this product shows great potential for future growth.
Conclusion product strategy:
According to an intervieuw with Mr de Bruijn of de Bruijn Wijnkopers, producing 40.000
bottles of Cabernet Sauvignon, 26.600 bottles of Cabernet Franc and 26.600 bottles of white
Merlot would not be enough to serve the entire Dutch market. Therefore, Mr de Bruijn
advised to focus on one target group and expand after a few years. Currently, Zandberg is
negotiating with big South African restaurant chains (Primi Piatti 56 restaurants in South
Africa and Odega, 32 restaurants in South Africa) to place the Cabernet Sauvignon 2005 and
2006 on the wine list of these restaurants.
The new vintage of Cabernet Sauvignon 2007 will be sold to the owner of Zandberg, who
has a golf estate in Russia. The wine will be served in the restaurant of the golfclub. The
Cabernet Sauvignon 2007 will also being used to win wine awards. This means that the
Cabernet Sauvignon will not be available for the Dutch Market.
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Export business plan
3.2Place Strategy
Location Zandberg
Zandberg is founded in 1699 and since then it has a rich history. Zandberg is situated in a
beautiful terroir nearby the Helderberg Mountain. Zandberg is also situated in the
Stellenbosch wine area, which people know all over the world. The place where Zandberg is
situated is strength for Zandberg.
Zandberg has a central location nearby highways to the nearest cities and is easy accessible
to the main highway to Cape Town. On the R44, which is the main road between SomersetWest and Stellenbosch, there are has signs of Zandberg. People can easily reach Zandberg
from the nearest highways.
Distribution
According to interviews with big clients (distributor in Johannusberg and a german
community) and small clients (wine tourists), it is important that the wines are being delivered
on time. Furthermore, wine is a fragile product; therefore it is important that the wine cases
are not broken when it arrives at the client. Zandberg does not have a clear view on which
market segments they are selling wine and to which consumers Zandberg sell its wine.
Zandberg is currently trying to enter the market domestic and internationally, this is hard
because Zandberg does not have a market position. Zandberg is trying to sell its wine to
everyone who wants to buy it, but not with a clear strategy.
When we take a look in the future, Zandberg aims to have a selective type of distribution.
Zandberg want to choose on which particular businesses to sell the wine e.g. upper-class
restaurants and luxury hotels in order to build initially a brand image. Currently, Zandberg
distributed the wines according to an direct short channel. Zandberg produces the wines and
sell it directly to the consumers or through a distributor, which is shown in the following
graph:
Direct Channel
Producer
(Zandberg)
Bottling factory
Warehouse
Clients
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Export business plan
Zandberg tries to outsource the distribution of the wines to specialist companies which
carry wineries in a portfolio and act as their domestic agents. Zandberg also wants to focus
on trustfully distributors domestically and internationally for cooperation with Zandberg.
These agents and distributors will sell the wine throughout there own distribution channels.
So far, Zandberg distribute its wine to a distributor in Johannesburg (BWC boucheron wines),
who sell the wine throughout there own distribution channels in the area of Johannesburg.
Internationally, zandberg cooperate with an Canadian distributor, this is in an developing
stage.
Orders
Zandberg has two warehouses. The difference between the warehouses is that there is a
small one and a big warehouse where the most wines are stocked. When clients want to
order something from the smallest warehouse, clients have to place the order 24 hours
before they want to receive the wine. When clients order wines from the biggest warehouse,
Zandberg will pick the requested order from the warehouse and send it immediately to the
customer. The warehouses are not located on the estate; Zandberg has to pay rent to the
owners of the warehouses. The reason why Zandberg does not have a own warehouse is
because of legal reasons. A lot of tax has to be paid when Zandberg stores its own wine.
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Export business plan
3.3 Promotion Strategy
.
The demands of the international clients concerning promotion are mainly samples and
product information about the wine.
Promotion strategy
So far Zandberg does not have a clear promotion strategy, last years Zanderg didn’t spend
much effort in promotion for wine department. The goal of the promotion activities is to build
a brand and, eventually, gain more revenue. These goals are not expressed in specific
amounts of revenue or in years, this means that there are no SMART formulated promotion
goals. Furthermore, there is no specific promotion budget. When the wine departments want
to promote something they are more concerned about the costs then the effect of the
activities.
Currently Zandberg has only one person in charge for the wine department, his
responsibilities are the Logistics, marketing, sales, and administration. With the focus on the
future, Zandberg has realized that marketing is an important aspect and that they want to
focus more on marketing. Because of that the wine marketing manager further educates
himself by participate in marketing and sales courses.
Advertising
Domestically, Zandberg mainly advertise in wine related magazines. Zandberg mainly
advertise in those magazines to gain brand awareness, gain more attention of wine tourists
to eventually gain more revenue. Currently, Zandberg advertise in regional guides and other
tourist related material. Internationally, Zandberg has only advertised in wine related
magazines.
Domestic advertisement:
Wine magazine, 45.000 copies a year (depending on season)
Bespoke, approximate 50.000 copies
Stellenbosch wine route, 300.000 copies
International
Golf en wein, lufthansa 100.000 copies
Zandberg realised that advertise and promote the wines internationally does not work. This
because the wine industry is not a normal industry where you can advertise, especially doing
business with international business people.
According to Nick Ridley, Ted Business and Nedoweb it is important to know people abroad
(networking) and build a brand before you can work on your advertisement activities.
Zandberg is in a certain stage that they are building a complete wine range and only
exporting wines with small amounts.
Tasting centre
A powerful promotion platform for Zandberg is the tasting centre. It offers Zandberg brand
awareness, brand loyalty, image of the wine and increases direct sales and distribution.
The tourists who are staying on the estate and people who are having dinner or lunch at the
restaurant are most of all foreigners and business people. The tourists and business people
sometime visit the tasting centre to gain more product information and buy wine after an
expended wine tasting. The wines of Zandberg are being sold through the restaurant, so
people can enjoy the wine during dinner or lunch.
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Export business plan
The tasting centre has a lot of opportunities; unfortunately the tasting centre does not
attract people of the restaurant and the guests of the accommodation because of the location
and the appearance. The wine is not integrated in the accommodations; there are no
packages which include the wine, for example: staying at Zandberg with breakfast and two
bottles of wine for a pick nick or during dinner. The guests have no wine experience or
whatsoever of the Zandberg wines during there stay at Zandberg.
Overall promotion:
Zandberg is a member of WOSA (wines of South Africa), it is a governmental organisation
that develops and promotes South African wine trade on an international level. Every wine
estate is a member of WOSA. It helps especially the bigger estates such as Spier to expand
their sales market internationally. WOSA provide useful information for new potential
markets. Zandberg is a small wine estate. WOSA does not add value for Zandberg, because
they are not specialized in providing information for small wineries. WOSA is a knowledge
resources for wineries in South Africa.
Zandberg is also a member of the Stellenbosch Wine Route and is thereby benefiting of the
regional branding opportunities. Local and international consumers add value and quality to
this wine route and often make purchasing decisions on the image and quality of the wine
estate and wine. The wine route adds value to Zandberg because Zandberg is situated on all
the wine route maps and its terroir. Zandberg depends on the Stellenbosch wine route
because; wine tourists visit Zandberg often en wants to taste the wine. The Stellenbosch
wine route also markets its members and is a portal used by overseas consumers coming to
South Africa to visit cellar doors. An CRM-system, customer relationship management is a
system which could be used to see who the customers of Zandberg are and what the
communication is with the client, it is an opportunity to apply the marketing on this system.
Unfortunately, Zandberg is not able to communicate on a regular basis, because Zandberg
has not the right systems to communicate with the costumers. Zandberg is currently busy
with cooperation with an online wine cellar door from the UK, sawinesonline.co.uk. This will
help with building a brand in Europe and works as an indirect promotion activity.
Furthermore, Zandberg does not use extra promotion sources such as flyers, sending news
letters to clients etc.
Website
The website of Zandberg gives only information about the core businesses; it is not up to
date and does not provide the latest tools which ca be applied on the marketing activities.
The website is divided in the departments of Zandberg such as a page which provide basic
information for the accommodation, wines, restaurant and weddings. To have a website
which provide the latest developments of the company is essential these days and is the
basic of promotion. Zandberg will put more effort and money in developing a new website
focussing on the wines within the original website. Currently, Zandberg has not many visitors
and page views between November and January 2009. The student received the information
from Nedoweb, who is responsible for the website of Zandberg. Furthermore, in the graph
you can see that when updating the website, there are more visitors then normal.
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Export business plan
3.4 Pricing strategy
Zandberg’s prices are market orientated and based on research but are subject to increase
with the accreditation of awards which seem to be prevalently in their favour. The pricing will
initially be slightly lower to encourage brand awareness and gain market entry but still high
enough to represent, appropriately, the quality of the wines. Another factor influencing price
positioning would be export criteria and related markets. The pricing would further be
affected differently by the target markets relevant to the two tiers.
Price
Concerning price, the market demands a fair price for the quality. Traders require room for
margin as well. Zandberg keeps these things in mind when determining prices. All aspects
taken in consideration for the price are:
•
•
•
•
Cost Price,
Market price of comparable products,
Positioning of the product,
Future positioning of the product.
The price has to be more than the cost price, and is based on the (future) positioning of the
products. E.g., if the product is positioned for the higher ends of the market, a price
compared to or higher than comparable products will be used.
Zandberg will only drop the prices for their products in extreme cases, when that particular
product is not being sold at all. This happened with the Cabernet Sauvignon 2005 African
Faces. This resulted in the wine being sold against cost price, earning back the expenses
made with producing the product. The cost price is build up as you can see in the following
diagram:
Costprice
Cabernet Sauvignon 2005, ZAR 20.7
(€ 2,18)
Cabernet Sauvignon 2006, ZAR 16.8
(€ 1,77)
Dry Rosé, ZAR 14.7
(€ 1,55)
White Merlot, ZAR 21
(€ 2,22 )
Bottle: ZAR 5,20
€ 0,55
Printing Label: ZAR 2,60 € 0,27
Bottling factory: ZAR 2, 85€ 0,30
Wine maker: ZAR 3,50
€ 0,37
Salary wine manager: ZAR 3,55 € 0,38
Viticultulist: ZAR 3
€ 0,32
Bottle: ZAR 4
€ 0,42
Printing Labels: ZAR 2.60
€ 0,27
Bottling factory: ZAR 2,85
€ 0,30
Wine maker: ZAR 2,25
€ 0,23
Salary wine manager: ZAR 2,90 € 0,30
Viticultulist: ZAR 2,20
€ 0,22
Bottle: ZAR 3
€ 0,32
Printing Labels: ZAR 2, 60
€ 0,27
Bottling factory: ZAR 2,85
€ 0,30
Wine maker: ZAR 1, 15
€ 0,12
Salary wine manager: ZAR 2,90 € 0,30
Viticultulist: ZAR 2,20
€ 0,22
Bottle:ZAR 5,50
€ 0,58
Printing Labels: ZAR 2,60
€ 0,27
Bottling factory: ZAR 2,85
€ 0,30
Wine maker: ZAR 3,50
€ 0,37
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Export business plan
Salary wine manager: ZAR 3,55 € 0,38
Viticultulist: ZAR 3
€ 0,32
By determining the price this way, Zandberg makes sure that their pricing is competitive,
causing the wine to sell for a price accepted by consumers, traders and high enough for
Zandberg to make a profit. Prices for the different products are:
Prices domestic market
Cabernet Sauvignon 2005
Cabernet Sauvignon 2006
Dry Rosé
White Merlot
Cab 2005 African Faces
Trade Price
R 46
R 40
R 35
R 50
R 15
Profit margin
45%
42%
42%
42%
-
Consumer Price (cellar-door)
R 63
R 50
R 35
These prices are competitive and ensure Zandberg a good profit margin. Only the Cabernet
Sauvignon 2005 African Faces does not create profit. However, dropping the price is the only
way to get this wine sold, gaining some of the costs made back.
3.5 Conclusion marketing mix:
Marketing mix
Product
Price
Place
Promotion
Strengths
•
•
Quality of the wine.
Intention to innovation and
building a wine range.
• Tasting centre
• Competitive prices
• Profit margin
• Market orientated price
strategy
• .Terroir of the vineyards
• Location of Zandberg
•
•
Being a member of WOSA.
Being an member of the
Stellenbosch wine route
Weakness
•
•
Wine range.
.After sales service
• -
• Not an clear distribution
strategy
• .Distribution.
• The promotion activities.
• Website.
• Using no extra promotion
sources
• Promotion strategy
3.6 Value Chain:
To know how Zandberg will gain competitive advantage in the market the student will use the
value chain of Porter. In this analyses the activities of Zandberg will be analysed create the
most value for the client.
Zandberg could create a competitive advantage through implement these strategically
important activities on a cheaper way ore use it better then its competitors.
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Export business plan
To get a better perception, the following primary and supporting activities will be analysed.
Zandberg is typified as a wine producer and supplier and is an “element” in the value chain,
which create value for the clients. In figure 2.1 you will find the value chain of an South
African winery in general, the value chain of Zandberg will be worked out further below. After
this analyse you will find a conclusion concerning the value chain.
Fig. 2.1 Value chain South African winery
Primary activities:
Entering Logistic:
Zandberg is a wine producer and a wine supplier, in terms of entering logistics, zandberg
mainly need other types of grapes to make wine, supporting attributes to complete the
product. Zandberg buy other grapes from wineries which Zandberg select on the quality and
the price of the grapes. For the Rosé, zandberg bought Cabernet Franc (type of grape which
can be typified as the father of the Cabernet Sauvignon). Zanberg adds value on this process
in terms of production, through use a commodity and add special ingredients which result in
the core product of Zandberg.
When the wine is bottled and is finished, Zandberg needs a bottle, screw cap or cork and a
labe for finishing the product. The attributes are specifically selected to combine them which
result in a final product.
Zandberg adds value to this process to cooperate with trustful wineries and other companies
which supplies the attributes. Because of this Zandberg tries to make sure the process is
optimized and could guarantee the quality of the product.
Operations
Because Zandberg is mainly a wine producer and supplier, the company hardly changes its
core product such as the ingredients and quality. Zandberg is in a developing stage in terms
of completing the wine range. In the following years Zandberg will develop more types of
wines to complete the wine range. The wine range will be the core business of Zandberg. In
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Export business plan
certain ways Zandberg adds something to the product, for instance the packaging of the
cases and the labels.
Currently, this is organized by external companies (Nedoweb). In this stage, it is cheaper
then invest in own product facilities. A disadvantage is that other companies are responsible
for making the wine, bottling the wine and developing the labels for new types of wines.
Outbound Logistics
After bottling the wines, Zandberg stocks the wines in two warehouses near the estate.
according to Mr Ridley and the wine maker of Signal hill (a famous South African winery) It is
not necessary to have a certain temperature in the warehouse, because the wine needs a
room temperature. When the client orders the wine, the order will picked immediately at the
warehouse and would be delivered within a few ours. Orders with a larger amount of bottles
will be delivered at a certain data, as agreed with the customer. Zandberg adds value on the
product to deliver the wine quick to the customer.
Marketing and sales
The department of marketing and sales consists of only one person. He has the
responsibility of the Logistic, marketing, sales and administration. Therefore, the wine
marketing and sales manager has no time to inform the customers about the new products,
special offers of wines, product developments etc. The customers do not receive new
information about the products ore other developments of Zandberg. At this stage the
marketing and sales department adds no value for the customer.
Besides that the marketing and sales department adds no value to the customer, through
customers could place an order fast and easily. According to own experience of the student,
the most customers are tourists, business people and is helped quickly, the customers are
being helped and could place and order fast, according to the experience of the student.
These will safe time and therefore money, which effect in extra value.
Service
The service of Zandberg consist most of all in the previous processes. For instance the fast
delivery time, production of the wine and that customers are able to place and receive there
orders quickly. To guarantee the quality of the wines are always the most important aspect of
the process. Zandberg does not provide any after sales services so far, such as dealing with
customer clients. Zandberg does not add any value at this point.
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Export business plan
Supporting activities:
Infrastructure
Zandberg has a clear infrastructure. The communication within the organisation of Zandberg
is organised at a certain way that everyone knows what there responsibilities and tasks are.
Because of this all the activities are going fast and efficient. The employees could focus more
on the needs of the customers and what they want.
Management
Zandberg has two departments, a wine department and an accommodation department.
Both have a manager in charge that is responsible for the department. From interviews with
employees and experience from the student the managers has to many tasks. The effect of
this is that they could not focus on their core tasks. The managers and the management
have not the same vision about the future. The management is only thinking on making
revenue and is not concerned about building a brand, image of the company etc.
The marketing and sales manager has finished a wine and marketing programme at the
University of Stellenbosch business school to gain more knowledge about what consumers
want and need in the future. He is trying to apply his knowledge in the strategy of Zandberg.
Unfortunately, it is hard for a manager of Zandberg to convince the MT, because they are not
concerned about a new way business thinking. This change-over cost a lot of time and
money. For instance the activities of Mr. Ridley what he is setting up currently e.g. the new
wine website and the new business style of Zandberg. On a long term this will result in an
organisation which adapts what (potential) customers want and need and therefore create
more value for this customer.
Technology
When looking at the technology side, Zandberg is far behind. Zandberg do not have any
client, stock ore administration systems. All these information is saved in maps and adds no
value to the value chain process. Because of this, the employees do not have a clear view
about the customers according to conversations with employees. Zandberg could adapt on
the customers needs and what they want to implement the data of the customers, stocks etc.
in systems and could eventually add more value for the customer.
Furthermore, Zandberg add no value for customers in terms of ordering. Zandberg has not a
web shop or innovative website what will add more value for customers to order wine.
Acquisition
When looking at the entering logistics side, Zandberg create especially value through the
knowledge of the wine and the wine market. Zandberg has hired two external viticulturists
(wine consultants) in charge who advice Zandberg about the vineyard. As well of these
knowledge Zandberg create a wine range with good quality, never the less the wine range is
to small according to the viticulturists and Mr. Ridley. One of the viticulturist travels often to
other wine producing countries to spot wine trends and developments. When Zandberg use
this benefit, it adds more value and Zandberg can compete with competitors; to create a wine
range totally based on the trends and developments from consumers all over the world.
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Export business plan
Conclusion Value Chain
According to opinions of customers appears that the core business of Zandberg is to deliver
wines of a good quality with a good competitive price. The price is mainly reached by looking
in the wine market and how the wine is positioned. On top of that Zandberg adds value on
the production of the wines from a commodity to wine.
Furthermore, Zandberg creates value for the customers concerning acquisition and the
outbound logistics. In the outbound logistics is created value by the way of delivery. This is
fast and the client appreciate is when the wines are being delivered quickly, according to
interviews with customers.
When looking at the acquisition side, Zandberg create value by the knowledge of wines and
the wine and the wine market. Through the knowledge, Zandberg is able to offer a quality
wine range and expand the wine range to offer more wine types. According to a survey of
100 customers, people needs a wide wine range with innovative products which Zandberg
cannot provide at this stage.
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Export business plan
3.7 Sales analysis
Zandberg is a small company, with the marketing/sales department of the wine division still in
a developmental stage. Nick Ridley is, besides his other tasks, responsible for the sales
department as well. Because he has a lot of tasks up his sleeve, there is not a lot of time to
acquire new customers or follow-up on leads or prospects. Most of the sales are done
through existing customers.
Sales process
Acquisition
Most of the acquisitioning and networking of Zandberg towards trade companies happens at
the wine shows Jo’Burg Wine Show (in Johannesburg), Winex (in Johannesburg as well) and
at small local wine shows. Furthermore, cold-calling was used in the past by Mr. Nick Ridley
to try to approach new trade companies as well, but because of the small success rate, coldcalling is not used to approach new companies anymore. Mr. Nick Ridley believes the small
success rate is due to the small range and lack of brand-awareness. Therefore, he does not
plan to start cold-calling until a range has been build and brand-building has started.
Sales
Most sales of Zandberg are made by existing clients approaching Zandberg. They either ran
out of stock or want more wine for private use. Mr. Nick Ridley arranges the sale and makes
sure the wine either gets distributed to the client, or that the client comes to Zandberg to pick
up the. However, apart from wine shows or tastings, Zandberg is never selling actively. This
could be a reason why some wines (e.g. the Cabernet Sauvignon 2005 African Faces) did
not sell quickly.
At wine shows and wine tastings, Nick Ridley does sell actively and achieves well in doing
so. After this, he tries to stay in touch with his customers, but he does not always succeed in
this because there is not a system to record the customers.
Reward system
there is a reward system in place at Zandberg. Over every sale he makes, Mr. Nick Ridley
gets 10% commission; this is part of his overall wage structure. This reward system
motivates Mr. Nick Ridley to try and make his sales as big as possible. This is an positive
way to sell more wine and in order to gain more commission.
Customer analysis
Distributor
Zandberg has two distributors. The most important one is BWC Boucheron Wines, based in
Jo’Burg. This is the biggest buyer of Zandberg’s premium wines. Boucheron Wines
distributes its wines to connoisseurs and on-trade companies in the Jo’Burg/Gauteng-area.
Furthermore, Zandberg has a distributor in the Durban/KwaZulu-Natal area. However, this
distributor does not sell large quantities of Zandberg wine.
German community in the Cape Area
There is a large community of retired German millionaires who are living in Cape
Town/Somerset West. One of them (mr. Hoizer) is the former owner of Zandberg. He has
made other people in this community aware of Zandberg’s products. Many of them have
become loyal customers to Zandberg, making it one of the biggest segments.
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Export business plan
Export
Zandberg currently has small export markets to Canada, Germany and Russia. These
customers do not offer often, but when they offer it is large quantities of wine, making it a big
segment.
Other clients
Most other sales come from people visiting the tasting centre and buying a few bottles of
wine, most of them are wine tourists from South Africa or overseas. Furthermore other clients
are people who already know Zandberg and come directly to the cellar-door to buy wine.
Sales analysis conclusion
Zandberg does not have an efficient sales system, they are no figures concerning customers
available. Customers are approaching Zandberg to buy wine; the company is barely selling
actively itself. Acquisition is not done often, what is a weakness. This results in a small group
of loyal clients, mainly consisting of the Jo’burg distributor (Boucheron Wines) and the
German community living in the cape area. However, acquisition was done in the past but
often failed, because Zandberg has no range and no known brand.
However, a strong part about the sales system is the reward system. This motivates Nick
Ridley to gain more sales which result in bigger commissions.
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Export business plan
4.Financial audit
The management of Zandberg is not willing to release any figures. Therefore, it is not
possible for the student to make a financial audit.
Conclusion internal analysis
According to the internal analysis, Zandberg has the strength of the quality of wines, well
educated employees and the terroir of the vineyards. The weakness of Zandberg is that
there is no vision for the future and the management has no knowledge about making and
wine marketing. The nine strategic windows revealed that Zandberg has the ability to export
and has to focus on a niche market. Zandberg does not produce enough wine in order to
guarentee a certain volume for the Netherlands.
Zandberg has to invest in new systems to build an stock system and build a client database.
Due exporting Zandberg has to face some barriers and risks; political, general and
commercial risks. However, Zandberg is an scenic winery, surrounded by the beautifull
winelandscape and has potential to grow in the future.
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Export business plan
External analysis
1. Market definition and market analysis
1.1 Introduction
This chapter will function as a summary of the market definition and market analyses as
shown in the external analyses. The Market definition will be clarified be using the Kotlerscopes.
1.2 Market definitions
To know in which direction the Export Plan has to be written is it important to know what the
current position of Zandberg is on the market and what the position will be in the future. This
prospective positioning, which will be realised in the period 2009-2012, would be the guide
for the rest of the assignment.
A way to get a clear view about the future positioning the student used the Kotler Scopes.
Written below you will see the composed Kotler survey:
Scope
Geographical
Market Segment
Current
Selling wine in domestic
markets and some international
markets: Canada, Belgium and
Germany.
• Domestic Wine clubs
• Domestic Liquor stores
• On-trade markets
(restaurants etc.)
Products &
Applications
The wine function now as a
export product.
Vertical
Producer, supplier, furthermore
there will sell some small
amount of wine-bottles to
visitors of the wine estate.
Industry
Wine-industry
Future
Zandberg will focus more
internationally and have a strong
share in the domestic markets.
•
•
International Retail
Food and beverage
sector
• Wine shops
• Domestic and
International On-trade
markets (restaurants,
clubs etc.)
• Domestic and
International Off-Trade
markets (retail)
• Online web shop, online
wine cellar
Still function as export product
but in combination with more
types of wines
In the future Zandberg will still
producing and supplying its own
wine. Zandberg will focus more
on sales in the future and will
function more as a exporter.
Wine-Industry
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Export business plan
The market definition for the Netherlands will be clarified by using the three dimensional
business definition graph (abell). This is a definition graph of the domain where the market is
analyzed using three dimensions, customer’s functions, customer groups and the alternative
technologies which could used to satisfy the client needs. The customer groups consist of
potential customer groups for Zandberg by entering the Dutch Market.
The following Desk research and field research sources are being used to know what the
Dutch market and potential customer’s need and desire:
•
•
•
•
Trends and developments Dutch wine market, Rabobank
TED Business, wine consumers in the Netherlands
Interview with de Bruijn Wijnkopers, biggest independent wine trader in the
Netherlands
Annete Badenhorst, manager Benelux WOSA
Abell-graph The Netherlands
Customer Functions
Innovative wine label design
Packaging
Delivery liability
Wine range
Price-quality relationship
Price policy
Product policy
Logistics
Promotion
1
2
3
Customer groups
4
customer groups:
1 The Netherlands
2 Wine Clubs
3 Slijterijen
4 Hotels
5 Restaurants
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Export business plan
2. Market environment Zandberg:
This chapter will give more information about the environment of Zandberg. According to the
market environment analysis the student has a clear view of the international wine market
which enables to identify the opportunities and threats.
2.1 General structure of the international wine market
The international wine market consists of a number of overlapping and sub-markets. The
wine market is more vertically differentiated, this means that the wine market is complex and
has more steps before it reaches the consumer compared with other agricultural products.
The segments with higher prices are fragmented and show considerable product
differentiation. The segment with lowest prices and lowest qualities is more homogenous and
does not focus on particular quality criteria. The wine segment is related to demand for
consumer’s consumption as well as for business uses.
2.2 Potential in the Global wine market:
For the past years, the wine industry has been performing very well until the financial crisis
hit many parts of the world. In the year 2002 alone, the global wine market’s retail turnover
was 101.5 milliard euros1. As far as international wine production concerned, in the period
since 1994, world wine production has remained in the range of 25 to 28 milliard litres.
However, this decline was halted in 2008, when world wine production increased marginally
by 0.3% to 27 billion litres.
The 90s was characterised by a relatively unstable consumption level. Later it increased and
decreasing up until the year 2000. Remarkable was the 3.2% increase in 2003, when the
consumption level reached 23 589 million litres. In 2005 wine consumption reached a peak at
23,767 million litres.2
2.3 South-African wine export:
The Cape winegrowing area is situated in the narrow viticulture zone. They mainly have a
Mediterranean climate and the mountains and valleys form the ideal habitat for the wine
grape. Long, sun-drenched summers and mild, wet winters contribute to the ideal conditions
for viticulture at the Cape. The South African wine industry has gone from strength to
strength, with exports growing by 335% between 1995 and 20083. In figure 2.1 you will find a
review of the wine export in litres.
Fig. 2.1 Total South African wine export in million litres.
These days, more than 4000 farmers cultivate some 101.957 hectares of land under vines.
1
Source: WOSA
Source: Austrade
3
Source: Wosa
2
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Export business plan
This could be a threat for Zandberg because they have to compete with a large number of
competitors. Approximate 256.908 people are employed in the South African wine industry
.The number of wineries declines as shown below in Figure 2.2.
Fig 2.2 Growth in Wineries in South Africa
Number of primary wine producers
Number of wine cellars which crush
grapes
Co-operatives
Producing wholesalers
1991
4786
2002
4346
2005
4360
2006
4183
2007
3999
212
427
581
572
560
70
6
66
11
65
21
65
17
59
20
According to WOSA (wines of South Africa), red wine exports grew by 19.1%, to account for
59% of all natural wines exported. Over the last years South Africa produces more wine as
shown in Figure 2.3 below.
Fig 2.3 Wine produced in South Africa in million Gross Litres.
Wine
Rebate
Juice
Distilling wine
2003
2004
2005
2006
2007
712.7
50.5
70.7
122.2
696.6
85.4
87.8
145.8
628.5
82.9
64.6
129.2
709.7
82.1
73.2
147.9
730.4
101.5
65.2
146.4
2008
(est.)
787.2
88.2
68.8
156.9
All wines for export must be granted an export licence. Samples of each batch of wine
destined for foreign countries are sent to the Wine & Spirit Board in Stellenbosch. They will
be put through detailed tasting tests and chemical analysis in the laboratories before licences
are granted. An official seal is given to each bottle by the Wine & Spirit Board, which verifies
that the claims made on the label regarding origin, vintage and grape variety are true. The
most wineries in the Western Cape export its products, mostly to Europe as shown below in
Figure 2.4
Fig 2.4 Packaged and Bulk Natural wine exports from South Africa in litres per country for the period August-July
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Export business plan
3. DESTEP- analysis the Netherlands
The DESTEP analysis gives insight in different factors of the Dutch wine market which can
be divided in macro environment factors and micro environment. This chapter will focus on
the Macro-environment, which consists: The DESTEP analysis and the Porter’s Five Forces
model. The DESTEP-analysis will be used also to spot opportunities and treats.
Using the DESTEP-analysis you will see an overview of the external environment and its
developments. DESTEP stands for: demographically, economic, social/cultural,
technological, ecological and political.
3.1 Demographical aspects:
The Netherlands is the 27th most densely populated country in the world, according to CBS.
The 16 million Dutch men and women are concentrated on an area of 41, 52 km². This
means that the country has a population density of 397 per km², which is high. As a result of
these demographic characteristics the Dutch government has had to plan to use its land
strictly. The emigration rate is high, because of that the population growth will decrease and
the aging of the population will increase. The most citizens’ lives and work in the western part
of the Netherlands approximate 7.5 million people4. The aging could be seeing as positive
point for Zandberg; older people prefer quality wine, according to the trends and figures of
the Rabobank. Furthermore, there is more attention to a healthy lifestyle in the Netherlands
and the Dutch consumers are more be aware of the ‘experience and emotion’ of consuming
either than just consume.
Developments in ethnics:
The amount of ethnics will rise more in the future. There are living 1.8 million not western and
1.4 million western ethnics in the Netherlands. The expectation for 2050 will be that 3 million
not western and 2 million western ethnics will live in the Netherlands. According to research
of the CBS, the number of the Dutch native citizins will decline of 13, 2 million from now to
12,4 million in 2050. In 2050 will 29% of the Dutch population be an ethnic, compared with
20% now.
Education level:
According to the OECD Health data, in the Netherlands are living relatively the highest
educated people in Europe with 21 % (consist of people who reached this degree between
an age of 25 and 64). With the highest educational level, HBO ore WO, which similar to an
university degree. For instance, In Portugal and Austria are living less people with a higher
education degree; only 7% of the population has a university degree5. According to several
studies, for instance the study of OECD “education of a glance, 2007”, reveals that higher
educated people prefer drinking wine during a social evening or dinner above beer and other
light alcohol spirits.
Eating and buying habits:
Diverging eating and buying habits is also the effect of the demographic developments.
There are older people and smaller housekeeping’s and there are more ethnics. The
diverging trend will lead to an increasing ask to luxury and products witch is easy to prepare.
Furthermore, there is more attention to a healthy lifestyle in the Netherlands and the Dutch
consumers are more be aware of the ‘experience and emotion’ of consuming either than just
consume.
4
5
Source: CBS
Source: ISCED (International Standard Classification of Education) systeem.]
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Export business plan
Demographic developments in the future:
According to recent researches from e.g. TNO, CBS and the ministry of health in the
Netherlands expect that there are following some demographic developments in the future.
First, the population will grow less compared with last years. Furthermore, the population will
be consisting of people with an older age, as an affect of the baby booming after the World
War 2. On the other hand, the people with an older age will retire within a few years. This
means that the labour force will decline and there is more business areas available then
expected. The Dutch government has to adapt there plans more, concerning developing
business areas then before according to the demographic changes.
Furthermore, in the future, the Dutch cities will be developed in “black cities” according to
research of the Erasmus University of Rotterdam. This means that within a few years the
total Dutch population will consist of migrants and their children. The number of ethnics will
be less outside the cities, compared with the main cities in The Netherlands. Another
demographic development factor is the larger number of people that will retire which will be
determined for the future. This means that more and more young Dutch inhabitants have to
take care about the older people, the insurance premium concerning and taxes will increase
in the future.
3.2 Economic aspects
The Netherlands has the image of a wealthy country with a lot of potential for foreign
investors. The economical structure of The Netherlands is characterised as open, outwardlooking and thinking out of the box. The Dutch economy has a strong international focus, as
the Netherlands is one of the European Union's most dynamic centers of trade and industry.
Owing largely to its favorable location by the North Sea, it plays a key role as a main port and
distribution centre for companies operating worldwide. Amsterdam's Schiphol Airport is one
of the largest airports in Europe. For these reasons the Netherlands is often called, the
Gateway to Europe.
Economical recession:
On the other hand the economical recession hit the Netherlands hard. The economical
growth declined in The Netherlands with 0, 9% in the 4th quarter of 2008. According to CBS,
the economy will decline with 3, 50 % in 2009 and with another 0, 25 % in 2010.
The effect of the recession is that the amount of investments declined compared with a year
ago6.The GDP was 0, 6% lower at the 4th quarter of 2008 compared to 20077. The Dutch
inflation has reached a peak of 3% in August 2008 and declined to 1, 9% in February. The
Netherlands has an open economy with a lot of distribution activities8, therefore is the
Netherlands more susceptible for a collapsed world trade compared with other EU countries.
Purchasing power:
In figure 3.1 you will see a graph which shows the purchasing power of consumers in the
Netherlands. Remarkable to see, is that the figures fluctuate much between 2004 and 2009.
Before the economical recession starts the consumers has a large percentage of purchasing
power. The cause that the purchasing power is rising after 2008, is surprisingly enough of the
credit crunch, according to the ministry of finance in the Netherlands. Especially the oil price
is beneficial for the purchasing power. People with a supplementary pension will not have an
advantage. Because of the credit crunch there will probably no inflation correction on the
pensions.
6
Source: Rabobank
Source: DNB
8
Source: CPB
7
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Export business plan
Fig. 3.1 Purchasing power of consumers in the Netherlands
purchasing
power
developments
Periodes
%
2004/2005
-0,3
2005/2006
3
2006/2007
3,1
2007/2008
0,3
2008/2009
1,3
CBS, 7-12-2009
Spending power:
When we are looking to how much people spend in the food and beverage business, there
are some remarkable facts. You can divide two consumption groups in the Netherlands. The
first group is spending 40 euros in average per visits of companies in the catering industry.
This group consist relative much people who are retired, but also the consumers with an age
category between the 25 and 35 years old. The second group is spending approximately 15
euros. This group consists of senior people and lower educated people. This is important to
know concerning on which consumer groups Zandberg want to focus. About 90 % of the
Dutch people having dinner occasionally in restaurants, bars etc. compared with 80% of
people which are retired. The spending power of consumers increased with 2,5 % in the
second quarter of 2009, according to the CBS.
Exchange rate::
Another important economical aspect too look at is the exchange rate between the Euro and
the South African Rand. In figure 3.2 below shows historical exchange rates between the
South African Rand (ZAR) and the Euro (EUR) between 6/11/2009 and 12/4/2009
fig. 3.2 development between the Euro and South African Rand.
Volatile exchange rates require more and more attention in the international wine industry, in
particular when they have an impact on competitiveness. South Africa benefited from a
weakening currency in 2002 which at that time allowed it to be very competitive in the
Netherlands. Since then, the surge in the Rand presented an increasing challenge for
exporters. The Rand exchange rate compared with the EUR is extremely volatile as you can
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Export business plan
see in fig. 3.2. According to exchange rates and fast changing economic conditions should
stimulate the South African wine industry to diversify risks, exporting to a range of countries
with different exchange rates.
Economic developments in the future:
according to the ministry of finance in the Netherlands, the globalisation, automation and the
individualism of the Dutch economy is being developed in an “new economy”’,. The economy
is typified by the attendance of the service sector and increasing of the knowledge in terms of
the production processes.
These structure changes do not exclude the volatility of the business outlook in the future.
On the other hand, bigger tendencies on the business market, as a cause of individualism in
the Netherlands will have an effect of bigger tendencies on the labour market. Recessions,
in combination with a long term process of low productive labour, this is a risk for migrant
groups and low educated people. Moreover, the inhabitants who are getting older, the
housekeeping families who have fewer children in the future and increasing of doubleincome couples will lead of an increase of the commercial and personal services.
3.3 social and environmental aspects
It is easy to do business with Dutch people; they are open-minded and thinking
internationally9. The most people are speaking English and could even speak more
languages. A well known Dutch social aspect is that Dutch people are always stressed; time
is money in the Netherlands. Within approximate 30 years there are living one million more
citizens in the Netherlands. The population will rise from 16, 5 million people to 17, 5 million
people, after that the population will decline. Because of the increasing number of people
that are working there are more people are spending money on dinners at restaurants.
This is a positive trend because people are consuming more wine during a dinner, according
to a wine consuming research of the EVD. The effect is that the revenue of restaurants etc
will increase about a couple of years. According a presented study of the Rabobank, EFMI
Business School and the FoodService Institute of the Netherlands the revenue will be more
then 30 milliard euros in 2020 compared with the revenue of 19 milliard in 2007.10
A new trend in the Netherlands concerning socialism is mondialism; the boundaries are
beginning to fade away, thanks to the virtual world. The Dutch society becomes more
impersonal. But the humanity wants recognizability, because what is recognizable is safe11.
The importance oh the own environment increased, provincial products, from recipes till the
restaurant design offers that recognizability
The consumers require safe and certified products and needs information about e.g.
nutritional value, methods of preparation and origin of which wine suits the best with what
kind of recipes . There is an increasing interest for health, durability and the environment.
There are changes in the combination of health and convenience with a wine assortment. 12
9
10
11
12
Source: SCP
Source: FSIN
Source: Rabobank
Source: HBD and the Rabobank
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Export business plan
3.4 Technical aspects
IT-business:
Dutch companies use IT more these days. Unfortunately the Dutch companies do not make
use of al the potential. The most companies use and have only a website on the internet.
However when you compared it with South-Africa the IT is more developed13 as shown in
Figure 3.4 below.
Fig 3.4 ICT penetration rates per 100 inhabitants, 2007
E-commerce:
Through to the trend using E-commerce people could buy more products online. Ecommerce is a collect term for al the ways that through computer networks people could
trade with each other. E-commerce is stimulated through the essential of increase the scale,
cost reduction and convenience.
Technical Developments:
Furthermore, when we are looking at the wine business on particular the technical part, there
are some developments over the last few years. Consumers have taken a greater interest in
where their food and drink comes from. Allied to this, ethical issues such as sustainability,
carbon footprints, packaging waste and fair trade have risen to the forefront of public
consciousness. According to WOSA, the new trend will be organic wine about a couple of
years. Of all alcoholic beverages, wine can claim to be the most natural.
It isn’t manufactured, in the sense that grapes contain within themselves all that is needed to
make wine without any additions. In Europe there is a growing ‘natural wine’ movement,
which is a loose coalition of artisanal producers aiming to work without any additions of other
ingredients during the winemaking process.
Alternative packaging and producing wine:
The need to innovate, in order to create a point of difference plus environmental concerns
are driving the growth in alternative packaging. According to WOSA, e.g. screw caps have
been accepted in some wine markets, such as in Europe.
Alternative packaging is one of the hot topics in the wine trade at the moment, but it’s not
exactly a new development. Glass bottles themselves are a relatively recent innovation in the
7,000 year history of wine. Wine was mostly transported in bulk, and sold from barrels.
13
Source: TU Delft
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Export business plan
In recent years, moves have been made to replace glass, which while being cheap and
excellent at protecting wine from the ingress of oxygen. The negative point is that glass is
heavy and has a tendency to break. As well as the cost and difficulty of transporting glass
bottles. The wine sector is always looking for ways to innovate. Furthermore, developing
more consumer friendly styles of wine, wineries also see packaging as another way to give
their wines an edge in a crowded marketplace. According to the data monitor industry report;
wine packaging of the University of Stellenbosch business school, environmental issues are
now a factor in decisions made by both retailers and consumers and the alternatives to glass
promise to reduce the carbon footprint of wine significantly.
Bag-in-box:
Putting wine in a plastic bag with a tap, suits those consumers who drink modestly or
infrequently. As a glass of wine is drawn from a wine box the internal bag collapses so that
no air enters to fill the gap left by the vacated wine. The bag-in-box is also an economical
way to ship wine. This because a pallet of bag-in-box wine holds 80% more wine and is less
than two thirds the weight of the equivalent volume of glass-bottled wine, with reducing the
carbon footprint. Boxes are also interesting to retailers because they are easy to
merchandise.
PET:
The latest development in packaging, is the appearance of 75cl PET bottles on supermarket
shelves. PET is a plastic bottle, which has been used before, mostly with 25cl bottles from
the south of France. But this current move to PET is significant, because it is the first time
that wine in standard sized 75cl bottles has been presented in plastic on supermarket
shelves. Positive, to mention is that the PET bottles are light for the consumer to carry two
bottles home for dinner from supermarkets. The most important benefit is that the bottle is
environmentally. Shipping lighter, bottles reduces their carbon footprint through savings in
the transport chain.
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Export business plan
3.5 Ecological aspects:
In the business life, the ecological rules become stricter in the Netherlands, also the
environment and safety become more important. Zandberg has to face strict rules regarding
hygiene, as example the HACCP rules.
The ISO standard was introduces in the Netherlands in 2005. The ISO standard has a lot of
requirements on a management system for the food safety focused on the chains in the food
chain. This standard is focused on the food business and the retail market.
The ISO 22000 could be used as a international standard and could be used as a basic for
the HACCP certificate14
Environmental issues:
For years the wine industry in the Netherlands has the topic, CSR (corporate social
responsibility) as the highest priority in the environmental policy of the Dutch government.
This, because of attention of the Dutch politics and media about doing business on a
environmental way. According to “Productschap Dranken Nederland”, in the wine business it
is all about enhance clean business processes. Although, most of all issues about return
bottles for the deposit and empty wine bottles who is lying as rubbish on the street (mostly
big Dutch cities).
According to VROM (ministry of e.g. environment) the attention for bigger corporate social
problems such as the CO2 issues increased significantly by the Dutch citizens as well as the
media and Dutch government. Concluding, last years, Dutch citizens, the Media as well as
the government is more focused at the CSR emphasises. Some famous people has a
mission to interest more people about the CSR issues e.g. ex-president candidate Al Gore.
Furthermore, according to the International Federation of Organic Agricultural
Movements (IFOAM) wineries al over the world is last years more aware of CSR and
have a significant effect on the external environment. Thus, in which it operates and can
change that environment through its activities. The trend in the wine business is
producing wine on an organic way. These days and in the future you will find more logo’s
on wine bottles concerning recycling etc.
14
Source: Ecological rules department the Netherlands, Nen
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Export business plan
3.6 Political and juridical aspects:
Juridical aspects:
The Netherlands has been a constitutional monarchy with a parliamentary system since
1848, when the constitution was substantially revised. The constitution defines the powers
vested in the monarch and other government institutions. This arrangement contrasts with
other West European monarchies, which exclude the monarch from government. While
having no political responsibility and therefore, not being accountable to Parliament, the
monarch plays an important role in the formation of new governments.
The current head of state is Her Majesty Queen Beatrix, who acceded to the throne in 1980.
The government is located in The Hague, where most foreign embassies are also located.
The area between the four main cities: Amsterdam, Rotterdam, The Hague, and Utrecht is
referred to as the Randstad, one of Europe’s most populated regions. South Africa is the
Netherlands’s most important trading partner on the African continent and the Netherlands
ranks in the top ten of the list of South Africa's most important trading partners. The South
African-Netherlands Chamber of Commerce was established in 1992, and is one of the
leading chambers in the country. Below you will find the most important juridical aspects for
Zandberg.
Wine import rules:
In the Netherlands are approximate 10,000 people who are working in the wine sector15.
Furthermore, there are approximate 800 companies which are import wine professionally.
When we are looking to import rules and requirements, Zandberg has to pay attention on
certain aspects. According to the Dutch customs, a winery and the importing company have
to report the wine both at the Dutch chamber of commerce, productschap wijn in the
Netherlands and the customs office. Zandberg has to pay additional taxes such as excisetax, packaging taxes and for every pallet Zandberg has to pay a certain amount of tax for
removing of the glass, foil, cardboard of the cases and the wooden pallet.
According to the Customs of the Netherlands, Import duty is only applied on goods imported
from a country outside the European Union16. The following tariffs are valid in 2009 as shown
in figure 3.5.
Fig. 3.5 import tariffs The Netherlands 2009
Zandberg has to pay a contribution to the productschap wijn and the importing company has
to be registered at the Chamber of Commerce. The importing company has to pay an extra
import tax because the wines will be imported outside of Europe. According to the South
African embassy, South African wineries are allowed to export 42 million litres of wine to the
EU in total without paying import duties, this is an example why South African wines are
cheaper to import compared with other wine producing countries.
15
16
Source: CBS
Source: Customs The Netherlands
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Export business plan
Product requirements:
As a member state of the EU the Netherlands is committed to obey all the EG-regulations
concerning product safety and the protection of the environment en the consumers. Products
which have a CE-mark, could enter the Dutch markets with any problems. When there are no
regulations for special types of the products, the national requirements will count. The Dutch
law is focused on product recycling, it is important that the products could be recycled.17
Zandberg has also to pay attention of the labels of the bottles. In the Netherlands it is
required to have a sticker on the bottle which consist “bevat sulfieten” in Dutch of the day the
wine is bottled.
Ad valorem:
The Netherlands is a member of the EU, When Zandberg want to export the wine products to
the Netherlands they have to pay import duties. The amount of this duty is depended on the
weight and the quantity of the products. Overall, the Netherlands has an average ad valorem
with less than 5%. (This is a tax which is calculated above the value of a product)
Import Quotas and Licences:
As a member of the EU, the Netherlands has an attractive tariff for most non-agricultural
items. Imports from the agricultural sector can have very high and sometimes prohibitive
tariffs, whilst some products, including meat and cheese, are subject to quota arrangements
between the EU and South Africa.
4. Dutch wine market
4.1 Dutch wine market size and potential:
The Dutch wine market generated total revenues of 4.2 milliard euros in 2008. The Dutch
market is still growing, from 14, 50 litres per head consumption in 1990 to 21, 60 litres per
head in 2008. The performance of the market is forecast to accelerate fast as shown in figure
4.1 below18. With a forecasted grow of 1.1% for the five-year period 2008-2013, which is
expected to post a market value of 4.4 milliard euros by the end of 2013. When you compare
this with the French and German markets they will grow with 0.9% and 0.2%.
Fig 4.1 Netherlands wine market value forecast in million dollars, 2008-2013
17
18
Source: EVD, import duties
Source: Data monitor industry report, wine in the Netherlands, University of Stellenbosch business school
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Export business plan
Holland is a take home market. Some 85 percent of the wines are sold in the off-trade
(retail industry), 15 percent through the on-trade (restaurants, bars etc). About 70 percent of
the off-trade volume is sold through the multiple grocers, coops and independents, the
remaining 25 percent through specialist’s bottle shops. Most of the wine imported into the
Netherlands came from France, which is 40%. The followed in the row is:
•
•
•
•
South Africa, 17.9%;
Spain and Germany, both approximately 10%;
Italy,7.8%;
New World wines made up around 32%.
4.2 Wine market segmentation:
When you make a segmentation of the Dutch wine market, you will find different types of
wine. In figure 4.2 which is shown below you will find the wine market segmentation of the
Dutch market. Remarkable is that Still wine sales proved the most lucrative for the Dutch
wine market, generating 80.7% of the total revenues. In comparison, sales of fortified wine
generated 13.1% of the market's value.
Fig. 4.2 Netherlands Wine Market Segmentation, % share, by Value, 2008
4.3 Imports from other countries:
By far the largest share, which is still growing of New World wines, came from South Africa.
The popularity of South African wines can be attributed to the historic ties with the
Netherlands, which is also reflected in the Dutch names of many of the South African wines.
When we are looking to the Dutch imports of wine from several countries, there are some
remarkable developments before the economical recession. Unfortunately there are no
figures published about wine imports in The Netherlands during the credit crunch, currently
companies are researching these figures. In stead of that, the import figures of last years is
analysed below.
According to the CBS, last years appear more South African wines on the Dutch market. In
1996, The South African wines are on the 7th place on the priority list of the most important
wine import countries. Compared with eight years ago South Africa is climbed to the second
place after France. With this development, South Africa increased its market position
compared with the well known wine producing countries as Spain, Germany, France and
Italy. As shown in figure 4.2 The Netherlands is still importing the most amount of wine from
France.
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Export business plan
Fig 4.2 Share of importing wines in The Netherlands, most important countries (1996-2204)
Almost 147 million litres of wine was imported from France in 2005. The share of French
wine in the Netherlands is declined significantly. In 2004 the share of French wine was for
the first time less then 40 percent, compared with 46 percent in 1996. Remarkable to see is
that other European wine producing countries has approximately the same import share
between 1996 and 2004.
4.4 The Netherlands compared with South Africa
To know how Zandberg should do business with The Netherlands it is important to compare
the Netherlands with South-Africa. With the Geert Hofstede’s Cultural dimensions as shown
in Figure 3.3 gives Zandberg insights into other cultures so that Zandberg can be more
effective when interacting with people in The Netherlands.
Fig 3.3 five Dimension model of Geert Hofstede.
19
19
Source: Geert-hofstede.com
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Export business plan
PDI: Power Distance Index
Score: the Netherlands 38
Score: South Africa
49
The Power of Distance is smaller in The Netherlands compared with South-Africa. This
means that people in a high position are treated more equal. There is more space for
discussion with higher placed people. This will make things easier for Zandberg such as
approaching the people in higher positions, who most of the times form, the DMU.
IDV: Individualism (IDV)
Score: South-Africa
65
Score: the Netherlands 80
The Dutch people are more individual thinking compared with South-African people; this is a
big difference between both countries. The Dutch people are more focused on themselves
then care about other people. For Zandberg it is important to know if they has to focus on
families, groups etc during promotion campaigns.
MAS: Masculinity
Score: South-Africa
63
Score: the Netherlands 14
The Netherlands is a very feminine country; South-Africa is more masculine. The people in
the Netherlands have other interests than South-African people. Zandberg has to pay
attention to this fact, by putting more value to a good cooperation and creating a good
relationship with their partners in The Netherlands.
UAI: Uncertainty avoidance
Score: South-Africa: 49
Score: the Netherlands: 53
There is not a big difference between South-Africa and the Netherlands regarding to
uncertainty avoidance. South African and Dutch people like it to take some risks to a
certain point, but if a risk is too large, they stop with making a deal.
5. Wine Consumer Analysis the Netherlands:
This chapter will focus on the wine consumers in the Netherlands. Wine is considered as a
‘complicated’ drink that requires insider knowledge to buy. The huge range of different
brands and the lack of clear information on the labels add to this
perception. At the same time interest is growing and more people would like to learn more
and may consider attending wine tastings.
5.1 Wine consumption the Netherlands:
After years of strong growth the wine consumption in the Netherlands is still stable, with 21, 6
litres per capita. 20 With a low level of population growth estimated to be 0.6% between 2005
and 2006, growth in wine consumption can only be achieved by expanding the circle of wine
drinkers in the Netherlands.The consumption of wine increased 10.57% between 2003 and
2007 in the Netherlands. At the end of 2007 the volumes of consumed wine reached 41,684
million in 9-litre cases. This is similar to 500,208 million bottles. The wine consumption
should grow 4.5% between 2008 and 2012. This means that the volumes of consumed wine
reach 43,836 million cases or 526 million bottles by the end of the period.21
20
21
Source: GFK
Source: Vine expo
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Export business plan
The number of Dutch who drink wines on special occasions increased from 3.3 million in
1978 to 9.2 million in 200022. Furthermore, wine is evolving from its perception as an upper
class beverage to a popular drink in general. Wine Forecasters, such as Nielsen Co. expect
that Dutch consumption will rise another 5 percent, with an increasing demand for a higher
quality product after the economical recession is ended. As shown below in figure 6.1 the
consumption of Rosé is increasing last years. This is positive because Zandberg developed
a Rosé for the new range recently. The Dutch wine consumers still prefer Red wine above
red wine. White wine consumed more during the summer and with fish dishes.
Fig 5.1 Wine consumption in the Netherlands divided by type of wine.
5.2 Identification wine consumer the Netherlands
Although France still dominates the off-trade in the Netherlands, historical links from both the
Old to New World have favoured the acceptance of South African wines in the Netherlands.
The languages of The Netherlands and South Africa are almost similar. The Dutch people
like the South African language on wine bottles. They like it because it is funny and the
consumers like the authentic part of the wine fields, according to the trends and figures of the
Rabobank.
5.3 Preference in Wine
As shown in figure 6.2 below the Dutch wine consumers prefer to drink quality wine above
cheaper table wine, according “productschap wijn” in research to consumer needs . The wine
consumers discovered Rosé; it has grown significantly in the past few years to reach 11% of
the market share. Rosé become increasingly popular with both men and women, mostly the
upper class. The Rosé is especially consumed during spring and the summer months.
Fig 6.2 preference of wine consumption in the Netherlands
22
Source CBS
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Export business plan
According to trends and figures research of the Rabobank, wines are consumed primarily
at home in the Netherlands. An increasing number of Dutch consumers drink wine during
dinner. Most of Dutch drinkers prefer soft, less tannin and not too sweet wines. Wines are
also consumed in place of beer and spirits, reducing sales of those items. The Dutch wine
consumers are the ones who seek for value for price, therefore a balance between quality
and price is important. Dutch wine consumers are not loyal with brands. This means that
brand image is important. People are very attracted by some kinds of short, entertaining
stories about the origin of the wine, according to the trends and figures of the Rabobank.
According to bedrijfschap and Horeca, dutch wine drinkers are conservative. In the last
couple of years, wine consumers start exploring more the world of wine. They become more
interested in new world wine, and they know ore about the types of wines. People now also
spend more money for well known wines. New world wines are accepted in the Netherlands
and even considered to be trendy to drink wine. According to Foodstep, in 2008 66% of the
cunsumers who are older then 50 years has based the choice of buying wine on the
producing country. This was 55% in the age category between 35 and 49, bewteen 25 and
34 it was 44% and between 16 and 24 it was 35%. This shows that the trend of choosing an
wine consciously will persevere. In 2008, two of the three bottles which is sold was coming
from Europe. The French wines are still being sold the most, followed by wines of SouthAfrica, Germany, Spain, Chili, Australia and Italy. The volume share of Argentina and
Germany increased the most in 2007.
5.3 Trends en developments Dutch wine-consumers23:
•
24
Health and wellness influences demand .
Sales of alcoholic drinks were highly influenced by a health trend in the Netherlands. They
became more interested informing healthier eating and drinking habits. The Dutch
government adds more public campaigns around alcohol abuse prevention. The goal of the
campaigns is to reduce the reach and effects of alcohol related diseases and accidents in
The Netherlands. Campaigns such as “Bob jij, Bob ik”, you can compare this with the
designated driver. This campaign was widespread through the Netherlands and reminds
Dutch people of the negative influence of drinking alcoholic drinks and driving.
Sectors such as wine taking highly benefited from this trend, showing positive sales growth in
2008.
•
More stable situation less impacted by lower consumer confidence.
Alcoholic drinks recorded a more stable volume and value performance in comparison to
previous years where steep falls in volume impacted the market. In 2008, value performance
was influenced by a rise in prices that did not have a major impact on demand. Dutch
alcoholic drinks are generally cheaper than other European countries, despite the heavy tax
the alcoholic drinks look like expensive.
•
Smaller wine bottels
The wine consumers spend more money on drinking wine at home; according to trend
watchers is this because of the Economical recession. The wine consumer spend in average
12 eurocents more pro bottle. The smaller wine bottles become a trend especially by the
youth, senior citizens with a little income.
•
23
24
Health
Source: Rabobank, trends and figures
Source: minvws, ministry of health in the Netherlands
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Export business plan
The continued link between moderate wine consumption and lower risk of heart disease,
cancer and stroke remains a major reason for wine’s popularity in an ever more healthconscious society.
•
Tickle my senses
The Dutch consumers are searching to more experience in consuming products. The
consumer’s ad more value on the quality, packaging of a product.
Conclusion wine consumer analysis the Netherlands:
It is obvious that Dutch wine consumers accepted wine in their culture. It is no longer an
upper class product but a normal drink and assumed to be a trendy drink. The Dutch
consumers are more interested in health last years; Zandberg could do something with
health in their promotion campaigns.
The Dutch consumers are not brand loyal; the important aspect for them is the price and
quality. The Dutch consumers prefer to drink red wines in the autumn, winter and prefer
white wine and rosé in the summer, spring. This is positive for Zandberg, they could sell al
the types what they produce in the Netherlands.
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Export business plan
6. Wine markets the Netherlands:
6.1 Foodservice business
Due exporting the white Merlot and the Rosé to the Netherlands, Zandberg has to take a look
at the Dutch foodbusiness. This because, wine is being consumed mostly during dinner,
lunch or a social drink with family and friends. The Dutch consumers are spending in total €
18.9 billion in 2008 by eating and drinking out of home. The foodservice market (eating and
drinking out of home) has gained an record turnover of €18.9 billion in 200825, which is an
increasing of 6.2% compared with 2007. The total market size in the Netherlands is € 54
billion euro’s, which is an increase of 4.3% compared with the last five years. The total
foodservice market could be divided by 5 channels.
The retail business gained a turnover of € 23.8 billion (food), The specialist stores gained an
turnover of € 11,7 billion euro’s, the food&beverage channel gained an turnover of € 13.5
billion euro’s, the catering channel gained an turnover of € 3.4 billion euro’s and the food
turnover in Pompshops gained an revenue of € 2 billion euro’s. In figure 6.1 is shown the
trends and developments in the foodervice sector from 2007 till 2015. This is researched by
Spronson food&beverage consultancy. Remarkable, to see is that convenvience, culinary
and care will be the spearheads for the next years.26
Fig 6.1 trends of consumers till 2015 (8 c’s)
Zandberg cannot produce huge volumes of wines to provide the classic Dutch wine market;
liquor stores, wholesalers and supermarkets. According to the rapport “climbing the price
ladder” a report about South African wines in the Netherlands, researched by Cees van
Casteren for WOSA the Dutch wine market is saturated, especially in
supermarkets.Therefore, these markets will not be an potential market for Zandberg and not
be worked out, as agreed with Zandberg. According to the internal analysis, Zandberg has
sold all the Cabernet Sauvignon 2005 and 2006 in order to sell this wines in restaurant
chains (odega and primi piatti) in the domestic market. This means that Zandberg could enter
the Netherlands only by selling the white Merlot and the Dry Rosé.
25
26
Source: Misset horeca
Source: Spronson food&beverage consultancy
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Export business plan
According to the nine strategic windows in the internal analysis, Zandberg has to focus on
entering an niche market in the Netherlands. Therefore, the student has analysed Dutch
niche markets in the on trade who offers wine and has potential for the next years. The on
trade could be divided in 3 segemts:
• Hotelbusiness (hotels, bed & breakfast etc.)
•
Restaurantbusines (restaurants)
•
Drinkbusiness (bar’s, club’s enz.)
The student has chosen for the drinkbusiness because it consist the niche markets, the
hotels and restaurants business is to big for a small winery like Zandberg.
6.2 Drinkbusiness:
The Drinkbusiness has on 1 January 2009 17.638 companies diveded in 8
companietypes(niche markets)27; Beach campanies (lounge bars), kiosk, beverage in
recreation companies, beverage in sportaccomodation, meeting centres and party catering.
2009 was a hard year for the drink business. The drinkbusiness gained an turnover of 3.4
billion euo’s (inclusive tax) in 2008. the entire on trade size is 14.3 billion euro’s (inclusive
tax)28.
According to figures of Bedrijfschap and catering the number of companies declined by 1.6
%29. The last ten years is the number of companies declined from 18.899 in 2000 till 17.638
companies in 2009, which is an decrease of 7.9%. However the restaurant business is
increased with 12.5%, fastservice business with 3.2% and the partycatering business with
165.3%. The number of companies in the hotelbusiness is decreade wwith 1.3%. The
number of rooms is increased of 87.562 to 102.287, (16.8 %) in 2009.
27
Source: Bedrijfschap voor horeca
Source: Horeca Nederland
29
Source: figures of Foodstep
28
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Export business plan
6.3 Beach companies (pavilion)
According to bedrijfschap and horeca there are 365 beach companies in the Netherlands. An
beach company means: an company which is situated on the beach, who offers
food&beverage in combination with a terrace. These are companies who are situated on the
coastline and on recreation lakes. In figure 6.2 you will find the development in companies of
the last ten years.
Fig 6.2 development in companies between 1999 and 2008
The above graph means that the number of beach companies is increased with 7%.
Remarkable to see is the huge decreasing in 2001, this was not because of the weather. The
total food&beverage market increased with 1,4%.
Season of beach companies
The most beach companies (85%) are not allowed to open the company the whole year, this
because of the protection of the beach during the winter season which is declared by the
government of water (Rijkswaterstaat)30. In general the season for beach companies are
longer every years. Last years the companies where 10 to 12 weeks open, now the season
is from march till october ( 28 weeks)
30
Source: Rijkswaterstaat
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Export business plan
Exploitation of beach companies
According to Horeca Nederland, the exploitation of an beach company is depended on the
season and the weather conditions. During an summer with a lot of rain, it is hard to make
profit for owners of a beachclub. In general, 30 days of appropiate weather is enough to
break even. In a normal season, 50% of the turnover is gained in the months july and august.
The total revenue of a beachcompanies is in general € 184 million per year, which is
approximate € 500.000 per company.31 The turnover depend on the size of the company,
location and opening hours. The exploitationduration of excisting pavilions is 9,9 years and
an average of 10,2 years in the food&beverage market. The average age of an entrepreneur
is 45 year.
Customers
The average what customers are spending during an visist is € 9,30. The reason of the visit
is various, a day to the beach, a company drink ore socialise with friends and family. Based
on a turnover of € 500.000 there are 54.000 visitors per beachcompany in a year32.
The beach attract a wide public, young people to old people. The customers are selecting the
beach company by image, price and quality, design and location. These days you will find
two types of beach companies. First, the traditional beach pavilion who is focused on
families, retired people etc. These customers are looking for affordable prices and comfort.
On the other hand, you will find stylish and design pavilions who are focused on people with
an age till 35, well educated people with a lot of money to spend.
Trends33
• Greenkey, environmental friendly beach companies;
• Smartcard, due saving discounts it will be deduct of the bill;
• Health; yoga workshops and massages.
Future and market potential for Zandberg
Due the credit crunch, more people are choosing to spend there holidays in the Netherlands
which will be an interesting developments. Furthermore, the city beach pavilions are
upcomming near rivers in big cities, like the Maas in Rotterdam. Unfortunately, the student
could not do field research in the beach pavilions because they will open the season in
March. However, to know if a pavilion is interested in a dry Rosé and an white Merlot the
student has phoned 10 beach companies in order to gain more information.
According to beach company ‘de gouden bal’in wassenaar, most of the owner’s are buying
wine from wholesalers like the Hanos or Makro. When we take a look at the wine list, the
traditional pavilion are selling most of all French and Italian wines (traditional wine producing
countries). On the other hand, more trendy beach companies are selling wines of traditional
wine producing countries in combination with new producing countries (Chili, South Africa,
Argentina etc.). However, interesting to see is that trendy beach companies where interested
in the white Merlot. This because, it is a new product and especially a wine to consume in the
summer. Acording to club Nautique in Zandvoort, the most beach companies are selling
Rosé during the summer season, it would be hard to sell the Rosé to beach campanies
because of the competition of other types of Rosé.
There are 365 beach companies in the Netherlands, we presume that 95% welling wine( 347
companies). In general customers are spending € 9.30 per visit, we presume that customers
are spending € 1.20 on wine per visit. In general an beach company has 54. 000 per year.
We presume of the 54.000 visitors, 10.000 visitors are ordering wine per beach company.
31
Source: Food service instituut Nederland
Source: Spronson Food&beverage consultancy
33
Source: Cijfers en trends Rabobank
32
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Export business plan
According to fieldresearch and of own experience of the student of working in the F&B
business, an company will add a margin of 300% in general above the purchase price.
According to Vinoo community for specialists in the wine business, in general an wine
importer will ask 25% of the purchase price. This means that Zandberg will have an potential
of: 10.000*1.20*347/1.3/1.25= € 2.562.461,54,-
6.3 Cafe (bars)
An food and beverage company will be part of the drinkbusiness when 50% of the turnover is
gained through selling alcoholic drinks. 2009 was a hard year for the Dutch bar business, this
because of the credit crunch. According to figures of Bedrijfschap Horeca en Catering, in
2008 approximate 231 bars stopped the business. This is an negative trendline since 2000.
When we take a look at the number of bars, it is decreased from 11.084 in 2000 till 9.678 in
2009 which is an decreasing of 12.7%.
Company types
The bar business could be divided in two segments; the ‘bruin café’ and the modern ‘not
bruin café’ Within these segments there are several other types of segments such as; Irish
pub, wine bar, lounge bars, beer café and grandcafé. Every segment has it’s own style,
formula, target group and design. This makes it an interesting but complex business. The
turnover of an average café was in 2008 € 2580,00 per m2. The average turnover of an
Café is € 67.700, 00 per year.
Customer
In 2008 has more than 55% of all the Dutch people (16-80 year) visit an company which offer
drinks. Dutch men are visititing an café more compared with women. In 2008 customers
spend in general € 16,30 during a visit. However, in the traditional café it is € 10,10 which
covers basicly the drinks. It is a group of people who want fancy and modern drinks, food in a
well designed atmosphere. The group of people is mostly not older then 30 years and is well
educated and like to travel around the world. These people could also be typified as
‘cosmopolitan ore world citizen’.
Trends in Café34
• Wireless internet and technology
• Focus on experience for the customer
• Authenticity in bruin café’
• Design
Wine bars and lounge clubs
In New Tork and in London there are already wine clubs and lounge bars for years. Recently,
this kind of bars are a huge trend in the Netherlands. The company Boelen&Boelen started
the first wine bar in Amsterdam in 2000. The lounge bars are typified as an transperant
charisma, stylish and luxury design and is focused on a target group of people above the
thirty year and has a lot of money to spend (Young Urban Proffesional). The Dutch consumer
desires more luxery and comfort these days. Furthermore, the consumtion of wine is
increased with 13.3 % and the consumption of beer is decreased with 6%. According to
tilllate.com, there are 46 lounge bars in the Netherlands who are serving good quality of
wines. According to Pronson food&beverage consultancy, an customer spend €21,- till €35,during a visit.
34
Source: cijfers en trends Rabobank
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Export business plan
Future and market potential for Zandberg
According to Spronson food&beverage consultancy the bar business will increase the next
years. However, due the credit crunch and it is prohibit to smoke in bars, customers are
moving from small bars to bigger bars with a new concept like the lounge bar. According to
Spronson food&beverage consulantcy, bedrijfschap horeca and an intervieuw with Anette
Badenhorst of Wosa, the lounge bars will be an trend for the next years and a interesting
niche market because of the potential; customers who are spending much money on wine
and the small number of lounge bars.The student has done fieldresearch in the lounge bar
business (Jinso in Amsterdam, Sushi Lounge Den Bosch and Rose’s in Arnhem and showed
samples of Zandberg’s wine. All the lounge bars liked the design of the bottle and where
interested in the first South African white Merlot.
The student has analysed the wine list, remarkable to see is that the lounge bars are not
selling a lot of South African wines. Furthermore, the student has visit the first wine bar in the
Netherlands Boelen&Boelen and was surprised of all the types of wine and the quality.
Zandberg cannot compete with high class, expensive wines in wine clubs and the
competition of all the wines.According to Pronson food&beverage consultancy, an customer
spend €21,- till €35,- during a visit. We presume that 40% of the turnover in general per
lounge bar (€ 67.700, 00) will be gained by selling wine. According to fieldresearch and own
experience in working in restaurants and bars e.g. Planken Wambuis which is situated in
Ede, in the food&beverage market an company will add a margin of 300% in general above
the purchase price. According to Vinoo community for specialists in the wine business, in
general an wine importer will ask 25% of the purchase price. This means that the potential
for Zandberg will be: 67.700*0.4*46/1.3/1.25= € 766.572,31,6.4 Golf clubs:
According to the popularity of golf and drinking wine in a golf club house in South Africa and
due the own experience of playing golf, consume wine in the clubhouse, the student has also
decided to research the food&beverage in golf clubs. According to the report GOSTA 2007 of
Horwath HTL It is busy these days on the Dutch golf cources. This because playing golf is
already a trend for years in the Netherlands. According to research of 44 golfcources in the
netherlands there is an increasing tendency of the number of rounds on golf cources.
However the prices has been risen of an membership of cof cources. The price for a
membership of an 18-holes cource is in general € 800,- this is € 500,- for a 9-holes cource.
Between 2001 and 2008 the membership prices have been risen with an average of 20%.
According to NGF (Dutch Golf Federation) there are 330.000 gofers diveded by 186
golfclubs.
Food&beverage in golfclubs
According to NGF, the food&beverage having an increasing share in the turnover of
golfclubs. These days, the golfclubs has there own lounge bars, restaurants etc. This is
increased significantly compared with 2001 when the restaurants where leased. Because the
F&B is upcomming in the golfclubs, it is an instabel market. The turnover increased with 11%
between 2006 and 2007. In figure 6.3 you will see that the percentage of F&B is important of
the turnover per golfclub.
Fig 6.3 turnover per golfclub in 2007
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Export business plan
According to Horwath HTL consultancy, the turnover of the F&B in golfclubs in general was
in 2007 € 550.000 Compared with other F&B companies the costs in the meeting area of an
golf club is higher. The reason is that most of the clubs are open 7 days a week, with non
profitable opening hours. Because of the popularity of the sport, the profitability of the
golfclubs are increasing significantly.
The total turnover on a commercial 18-holes cource was € 2.9 million, the turnover of a
commercial 9-holes cource is significantly lower € 879.000 per year.
Customers
The customers could be typified as business people and sporting people. Golf is being used
these days as a possibility to network and build business relationships. Furthermore, the
biggest share of the 330.000 golfers are people who are retired. This group of people has a
lot of free time and these days money to spend.
Trends35
• Wireless internet in golfclubs
• Upcomming restaurants in golfclubs
• Health; massages at golf clubs
Future and marketpotential for Zandberg
The student has played golf and experienced of consuming wine in golfclubs. According to
Foodstep and cijfers en trends of the Rabobank, golfers has a certain lifestyle and likes to
consume wine which will be interesting for Zandberg. There are 186 golfclubs in the
Netherlands, who has a restaurant. According to Horwath HTL consultancy, the turnover of
the F&B in golfclubs in general was in 2007 € 550.000 with assuming € 50.000 because of
selling wine. According to fieldresearch and own experience in working in restaurants and
bars e.g. Planken Wambuis which is situated in Ede, in the food&beverage market an
company will add a margin of 300% in general above the purchase price. According to Vinoo
community for specialists in the wine business, in general an wine importer will ask 25% of
the purchase price. This means that the potential for Zandberg will be: 50.000*186/1.3/1.25=
€ 7.153.846.
Total marketpotential Zandberg in the Netherlands:
Beach companies:
Lounge bars:
Golf clubs:
Total:
35
€ 2.562.461,54,€ 766.572,31,€ 7.153.846. +
€ 10.482.879,85,-
Source: NGF and cijfers en trends Rabobank
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Export business plan
7. Distribution analysis:
In figure 5.1 will represent a simplified view of the distribution chain of South-African wine.
Zandberg is a Crape producer and supplier of wine; they are in the bottom part of the figure
and reach the consumer through the indirect channel. The figure shows that the wine
undergoes some steps before it arrives at the wine consumer, these steps are explained
below.
•
•
•
•
•
•
•
After the growing process, the grapes will be picked through several workers. The
grapes will be transported to the winemaker; he is responsible to make the wine.
The winemaker adds alcohol and other ingredients to the grapes and fills the barrels
with wine.
When the winemaker decides that the quality is good, the wine will be bottled, this
often happens when the wine is in barrels for a few years. This process means that
the wine will be transported by a truck from the winemaker to the bottle fabric.
The bottles will be filled with the wine and the label of zandberg will be added on the
bottle. In the last process, the bottle will get a screw cap or a traditional cork.
The wine bottles will be packed in cases and on EU pallets in the bottle factory. The
pallets will be transported to the wine cellar and is ready for transport.
In general the wine is being sold domestic markets or in international markets. When
the wine is being sold internationally the wine producer often cooperate with
importers, agents etc as shown in figure 5.1
The pallets will be transported by sea freight or air from South Africa to the
Netherlands. When the pallets with wine arrive in the Netherlands, The pallets could
be transported further to the client by a truck, in cooperation with transporters.
When Zandberg exporting and distribute the wine to the Netherlands, Zandberg has several
distribution possibilities such as: joint ventures, piggyback strategy, own company in the
country etc. Written below you will see a worked out distribution analysis of the Netherlands.
Fig 5.1 distribution of south-African wine
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Export business plan
7.1 Distribution analysis The Netherlands:
The Netherlands is a trading nation with Schiphol airport and the Port of Rotterdam providing
major entry points for goods imported into the Europe Union. It is possible to transport wine
from South-africa to the Netherlands, according to the Gargo team, international
tranporters.36 Wine is mostly transported by air and sea freight. Schiphol airport in
Amsterdam is a major European freight hub. Regional airports are located in Rotterdam,
Eindhoven and Maastricht. There are numerous options in terms of routes and airlines for
South African goods transporting to the Netherlands, but air freight for fresh products may at
times be limited depending on the season.
Import regulations from abroad:
Rotterdam is the world’s largest port, with throughput of 370 million tonnes in 2007. The port
area runs from the city itself down the Rhine River delta, to the North Sea coast. An
advanced logistics network linking Rotterdam with the rest of Europe supports the port.
There is ample sea freight capability between South Africa and the Netherlands. There are a
lot of international transporters, which could help with transporting wine. In general the
companies will provide freight letters, shipping freight options, distribution conditions, costs
further transportation to the client etc. There are some distribution conditions which are
important37,;
•
•
•
•
Marking and Bar Codes The Netherlands, who promote, implement and support the
effective use of EAN UCC (distribution standards) in Dutch supply chains. However,
(EAN) Electronic Article Numbering of South Africa will also be able to provide
assistance in the first instance.
Packing and Labelling Packing and labelling requirements need to be checked before
offering product. Packing and labelling should generally be in Dutch. Label
requirements can be heavily regulated, especially in the food and beverage and
pharmaceutical sectors.
Tariffs and Duties The EU Common External Customs Tariff applies, which is based
on the International Harmonised System for classifying products.
Taxation A value-added tax in Dutch mentioned as BTW of 19 percent is levied on
most products. The lower rate of six percent applies to such necessities as food,
transportation and medicine. VAT tax on imported goods is based on CIF values plus
import duty.
The clients, who are buying the wine, prefer mainly delivery reliability, convenience and the
speed in terms of delivery, concerning distribution. In the wine market there are several
distribution possibilities, as mentioned before Zandberg uses the indirect long channel.
Because of the developments of internet and the country borders are beginning to fade away
is it possible to extinguish the wholesaler for the clients. The use of internet makes it easier
to make contact with the wine producer (direct channel). Wines are almost similar to nature
products, which have to be tested every step on quality, e.g. ISO and HACCP certificates are
important. Because of that the wines are most of all be distributed through an agent or
importer.
36
37
Source: Cargo Team transporters
Source: Holland international distribution council, HIDC
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Export business plan
The wines will have a wider distribution because of the fading of the branch. This is
described in figure 5.2 the wines will be sold at more distribution places in the future, this
means that the wines will be sold more intensively.
Fig 5.2 Distribution intensity
8. Competitor Analysis:
A few hundred years ago people started making wine in South Africa, especially in the
Western Cape. Through all those years this is developed in a wine-making culture. In the
current market hundreds of wineries are established and trying to be buoyant in this market,
especially during the economical recession. South-Africa has a wine industry, with hundreds
of wine producers trying to sell their wine on the same market. There are three big players
active in the South African wine market, DGB, Foster’s and Distell. They export wine to the
Netherlands. Unfortunately, these companies are too big for Zandberg to be their direct
competitors. They accompany for 31% of the market share. The rest of the market is filled up
by all the other smaller wineries, which exporting to many countries overseas, providing
many competitors for Zandberg.
In terms of a taking a close look at all these South African wine competitors this analysis will
not take a close look of the competitors because of the large scale of wineries. Instead of
that, this analysis will have a detailed look at the competitive forces in the market using the
five forces of Porter.
8.1 Five Forces analysis The Netherlands:
The competitive environment of the Dutch market will be analyzed, using the five forces of
Porter.
Buyer power
Wine is a differentiated product with hundreds of wine brands available on the market which
may be intimidating to many Dutch wine consumers due to the lack of consumer orientation.
Some beverage producers (such as Bacardi and Diageo) have began to introduce brand
management and modern merchandising through injecting bold brands, label designs and
marketing campaigns in order to become more identifiable to the Dutch public. Purchasers
have a very wide range of wines to choose from with low switching costs. These factors tend
to intensify rivalry.
The buyer power has an influence on the price of the products. When the buyers have a
large power, this is disadvantuous for the wine branch. The buyers of the Zandberg wine
contain the retail industry, specialist shops and the on-trade business. The buyer power is
described to the situation in the wine sector:
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Export business plan
•
•
•
•
•
Concentration buyer’s contra the concentration of companies: The number of wine
consumers is very high in the Netherlands and scattered in different channels. The
number of companies which selling wine is huge, although there are a small number
of big retail players which have the biggest market share. This means that the buyer
power is relative low, because the buyer has a pretty good dominant position,
competitors in the retail industry could be very competitive in terms of offering wine to
consumers.
Buyers volume: The number of buying volume diverge very pro wine consumer in the
Netherlands.
The switching costs of the client to another company: This is very high, the retail
business buys the type or brand what the wine consumers like, they change easy
from supplier.
The threat of vertical integration: These days the off-trade has a lot of knowledge of
importing wine, the retail chains buying wine all over the world, so there is a certain
threat of vertical integration.
Price sensitivity: Because the wine business is depended on a good harvest, through
nice wetter conditions, the prices could fluctuate. The negotiate power is in these
terms limited. Differences in prices would be calculated through suppliers, such as
Zandberg to the client, at which the margin is determined.
Supplier Power
Wines are produced and developed in a lot of countries. The power of suppliers is depended
of several factors. Especially the number of suppliers is important. Old wine producing
countries has a lot of wineries and exporting its wine with big amounts. The number of
wineries and wine labels increased last years, although some wineries are bankrupt because
of the economical recession. Because of this the power of suppliers is limited; the buyers
could easily change to other wine suppliers that offer the same type of wine.
New Entrants
Because a lot of space and knowledge is required to start off as a new wine producer in
South Africa, after started a winery it is difficult to export because it is required to have export
knowledge. The threat of new entrants is depended of the existing entering barriers.
The treats of the new entrants is being criticized on six important entering barriers:
1. Economy of scale:
Economy of scales is not a huge barrier for new entrants on the market. When a client buys
a bigger amount of wine, in general it is possible to receive more quantity discount when you
are buying more wine at once. However, the fixed costs not really high, the purchase on big
scale and the costs of stocks are becoming higher.
2. Product differentiation:
Brand awareness is important in the wine business and for wine consumers in the
Netherlands. The Dutch consumers and retailers buys wine mostly one the quality, price and
brand image. Furthermore, brand loyalty is important at selling wine.
3. Starting capital:
To set up a subsidiary company in the Netherlands, rent a warehouse or using other export
strategies, new entrants needs a lot of starting capital.
4. Changing costs:
The barrier of changing costs that clients have to change to other wine suppliers is modest.
Unless it happen sometimes that contract is made, it is still easy for a client to change to a
competitor. Many clients such as retail chains are doing business with several suppliers.
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Export business plan
5. Access to distribution channels:
This barrier is important: distribution channels where wines are sold are relative saturated.
Furthermore, new entrants have not the right knowledge and business relations with
purchasing companies. The wines are bought throughout the whole world, by witch business
relations are very important.
6. Policy of the government:
The Dutch government has strict rules on importing food and beverages. New entrants has
to obey the rules of the HACCP, ISO 22000, en de VWA. Wine imported from non-EU
countries also require a CAP (Common Agricultural Policy) Import License and must be
accompanied by a VI1 document until such wine can be freely circulated. Zandberg has to be
aware of the strict rules. Agent or importer will provide information concerning the ISO and
HACCP rules. This is not a threat to Zandberg but it is important to be ware of those rules.
Substitutes
The main substitute in the Netherlands for wine would be other alcoholic beverages, like beer
and spirits. These products are quite similar then wine, are being sold through the same
distribution points and also use the same facilities to get sold. This means the switching
costs involved in switching to a substitute are not very high.
However, some selling points (e.g. restaurants) will find it very hard to operate without selling
wine, although other selling points (e.g. pubs or certain type of clubs) can operate perfectly
without selling wine.
From a consumer point of view, the consumption of alcoholic beverages largely depends
upon personal taste and upon the mood someone is in. This makes it easy for the consumer
to switch from wine to a substitute. Overall, the threat of substitutes in the Netherlands is
considered high.
Rivalry
The competition of the South African wineries which is selling wines in the Netherlands is
high. Last years increased the Rivalry because the Dutch consumers discovered the exotic
wine producing country South Africa. Because the different wine tenders offering mostly the
same products, they have to distinguish themselves from the competitors in terms of
distribution, brand identity and packaging etc. Because mostly the same types of wine are
offered in retail shops, mostly the competition is on the wine assortment. These days a
winery that want to export needs a wide range of wines and different types and packaging to
distinguish of the competitors, unfortunately the competitors will follow with the new
applications. New wine types have the best possibilities. As example Zandberg introduced
the first white merlot to compete with other wineries. The wine prices are mostly determined
by the market, the companies could only follow the prices of the competition. High margins of
the competitors don’t sell in general. Companies such as retail stores can’t easily compete
on the wine price, because the margins have too much pressure. Overall, the rivalry of the
South African wineries in the Dutch market can be considered as quite high.
Summary
Treats of new Entrants:
Treats of substitutes:
Buyer power:
Supplier power:
Rivaly:
Overall:
Now
moderate
High
moderate
moderate/low
High
Moderate/high
Future
moderate
High
moderate/high
Low
High________________
moderate/high
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Export business plan
9. Conclusion external analysis:
Considering the external analysis for Zandberg, being the Dutch as potential new sales
market, it can mention several aspects which can either cause threats or develop into
opportunities for Zandberg. These aspects are important to focus on, because it shows how
Zandberg might be influenced by its environment when Zandberg is going to export. In this
chapter the conclusion of the Opportunities and Threats is given; it represents the “OT”-part
of the SWOT analysis. There will be given a separate conclusion of the three researched
countries.
Opportunities:
• Many high educated/ internationally-minded people.
• White wine and rosé will be consumed especially in spring and summer.
• There is more attention to a healthy lifestyle.
• Internet developments, selling wine online as an additional sales channel.
• Tickle my senses
Threats:
• Economical recession, consumers don’t spend more money on luxury goods.
• Competition of other South African wineries in retail shops.
• Rising figures of substitutes.
• Consumers are not brand loyal.
• Dutch consumers prefer price above the quality of wine.
8.1 Potential for Zandberg in the Netherlands:
The Dutch wine market consists of 4.2 milliard euros in 2008. The Netherlands has a
remarkable sales potential for Zandberg as shown below in figure 7.1. Concerning the niche
market which is worked out, Zandberg will gain a total market potential of € 10.482.879,85,The forecasted grow will be 1.1% for the five-year period 2008-2013, which is expected to
post a market value of 4.4 milliard euros by the end of 2013. When you compare this with the
French and German markets they will grow with 0.9% and 0.2%.
Fig 7.1 Netherlands wine market value forecast in million dollars, 2008-2013
8.2 Overall Conclusion:
The Netherlands will be an interesting country for Zandberg to sell it’s wine. An
interesting option for Zandberg is doing business with distributors, wine importers or
an agent. South Africa and the Netherlands have strong historical ties, which is
important for doing business. During the economical recession the consumers don’t
spend much money on expensive wines but prefer cheaper wines which are mostly
being bought in supermarkets.
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Export business plan
SWOT-Analysis and confrontation matrix
1. Swot analyses
1.1 Introduction:
In this chapter, the SWOT-analysis and the confrontation matrix is being analysed. The
SWOT analysis describes the most important opportunities, threats, strengths and
weaknesses which is analysed in the internal- and external analysis. The Opportunities and
threats are being combined in the confrontation matrix with the strengths and weaknesses of
Zandberg. This will give an perception of the correlation between the internal –and external
environment of Zandberg.
1.2 SWOT-Analyses:
Strengths
Opportunities
S1
Delivery
S2
Quality of the wine
K1 White wine and rosé will be consumed
especially in spring and summer
K2 Tickle my senses
S3
Terroir and location of Zandberg
K3 More attention to an healthy lifestyle
S4
Intention to build a brand an wine
range
K4 Increasing use of internet and E-Commerce
S5
Company structure
K5 Increasing high educated people and
internationally minded people.
Weaknesses
Threats
Z1
Zandberg does not have any insight
in the clients and new aspirant
international sales markets.
B1 Credit crunch, consumers don’t spend more
money on luxury goods.
Z2
Old style of Leadership of the
Russian Management
B2 Competition of other South African wineries in
Dutch retail shops.
Z3
Not market orientated
B3 Rising figures of substitutes.
Z4
The current wine range
B4 Consumers are not brand loyal.
Z5
Computer systems which Zandberg
are using
B5 Dutch consumers prefer price above the
quality of wine.
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Export business plan
1.3 Confrontation matrix
O1
O2
O3
S1
S2
S3
S4
S5
+
+
++
+
++
+
+
++
W1
W2
W3
W4
W5
Score
-
-
--
O4
O5
T1
T2
++
++
T3
T4
BT5
++
+
+
+
+
--
--
+
++
+
++
+
5
9
1
11
3
++
---
-10
-3
-5
-3
-2
--
-
--
1
2
2
-1
1
-3
0
-1
3
2
Out of the confrontation matrix, which is being analysed above it is made clear which
strengths and weaknesses are relevant in the current market developments. Moreover, on
which opportunities and threats Zandberg can adapt, with the current internal situation.
Especially the most important opportunities are interesting to look and analyse on which
opportunities Zandberg could adapt currently. Furthermore, it gives input for the strategical
options.
According to the confrontation matrix, K1 and K2 has the most opportunities for Zandberg.
These opportunities (tickle my senses and more attention to a healthy lifestyle) has a
correlation with the changing consumption patron of the current consumers. These
opportunities could be combined with deliver a quality wine (S2), and a wine range which will
be expand to offer more types of wines (S4)
Zandberg aims to expand its wine range and to focus on the needs of the consumers. With
an better research in trends and developments, Zandberg could adapt itself on opportunities
like K 1,3 and 5 with offering quality wines and innovative packaging, focused on the
consumer market. With new systems such as a new developed website, client and a stock
system, it is possible for Zandberg to adapt on selling wine online and build a brand in online
sales.
The biggest threat for Zandberg is the economical recession. As an effect of the credit
crunch many wineries are bankrupt and consumers do not spend extra money on luxury
goods, like wine. Zandberg is surviving the credit crunch because e.g. its strengths (S2, 3
and 5). Furthermore, there is a lot of competition of South African wineries in Dutch retail
shops (T2) it is possible that Zandberg distinguish itself from all the competition by expanding
the wine range (S4) and offer originally types of wine with innovative packaging.
It appears that the biggest weakness of Zandberg is the insignificant awareness of aspirant
international markets and perception of its clients. Because of this, Zandberg does not have
adapted itself till now on developments in the market, which is resulted in a larger market
position for competitors.
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Export business plan
2. International Market selection
In this chapter a systematic approach to international market selection (IMS) is presented.
Research from the Uppsala school on the internationalization process of the firm has
suggested several potential determintants of the firm’s choice of foreign markets. These van
be classified into two groups: (1) environmental and (2) firm characteristics. The market will
be selected by using 4 steps:
Steps 1 and 2: Defining criteria
In general, the criteria for effective segmentation are as follows:
• Measurability: the degree to which the size and purchasing power of resulting
segemnts can be measured;
• Accessibility: the degree to which the resulting segments can be effectively reached
and served;
• Substantiability: the degree to which segemnts are sufficiently large and/or profitable;
• Actionability: the degree to which the organization has sufficient resources to
formulate effective marketing programmes and make things happen.
Step 3: Screening of the Country:
The Netherlands will be screened ny using the BERI Index (Business Environment Risk
Index) This concist an index with criteria and according to the score could be analysed if it is
a high risk to enter the Netherlands.
Criteria
Weights
3
2.5
2.5
Multiplied with the
score (rating) on a
scale of 0-4(a)
2
1
2
Political stability
Economic growth
Currency
convertibility
Labour Cost
Short term credit
Long term credit
Attidude towards the
foreign investor and
profits
Nationalization
Monetary inflation
Balance of payments
Enforceability of
contracts
Bureaucratic delays
Communications:
phone, fax internet
acces
Local management
and partner
Professional services
and contracts
Total
Total
Overall BERI Index
(b)
6
2.5
5
2
2
2
1.5
2
2
2
2
4
4
4
3
1.5
1.5
1.5
1.5
2
2
2
2
3
3
3
3
1
1
3
4
3
3
1
4
4
0.5
4
2
25
X 4 (max)
= Max. 100
55
a 0= unacceptable; 1= poor; 2= average conditions; 3= above average conditions; 4= superior
conditions. (B) > 80 favourable environment for investors, advanced economy. 70-79 not so
favourable, but still an andvanced economy. 55-69 an immature economy with investment potential,
probably an NIC. 40-54 a high-risk country, probably an LDC. Quality of management has to be
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Export business plan
superior to realize potential. < 40 very high risk. Would only coomit capital if some extraordinary
justification.
The score of The Netherlands was: 55. This means according to the BERI index that the
Netherlands has an immature economy (credit crunch) but has investment potential for
Zanderg and is therefore suitable as import country for Zandberg.
Step 4: segment markets within countries
We will take a look at segment the Dutch potential niche market for Zandberg. We will take
the following variables: potential Zandberg per company, potential for Zandberg, interest in
wine, risk for zandberg, competition and the competition wine list.
Beach
companies
Lounge
bars
Golf clubs
Potential
Zandberg
per
company
€
7.020,44,-
Potential for
Zandberg
Interest in
wine
€
2.562.461,54,- + (white
Merlot)
Risk for
Zandberg
Competition Number of
on the wine companies
list
- - (depend
on weather
conditions)
€
€ 766.572,31,+
++ (white
16.664,62,Merlot and
potential)
€
€
38.461,54,- 7.153.846,63,- +
(upcoming) (upcoming,
instabel
market)
-+
: Huge risk for Zandberg, not interested in the wine, huge competition
: Slight risk for Zandberg, not really interested in the wine, some competition
: No risk for Zandberg, interested in the wine, no huge competition
++
: Open market with huge potential
365
46
186
Benefits and disadvantages of entering the beach companies as analysed in external
analysis
• Instabele market; depending on weather consitions;
• The wines are suited to the public and season;
• Less market potential for Zandberg compared with other niche market;
• Uncertain if Zandberg could produce wine for all the 365 companies.
Benefits and disadvantages of entering lounge bars as analysed in external analysis
• Niche market with 46 companies is favourable to start with selling wine;
• The wines are suited to the public and according to field research the lounge bars are
interested in South African wines;
• Less competition on the wine list compared with other niche markets;
• The expectation is that the turnover of lounge bars will increase the next years.
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Export business plan
Benefits and disadvantages of entering lounge bars as analysed in external analysis
• Uncertain if Zandberg could produce wine for all the 186 companies;
• Instabele market, upcomming but still not an serious interesting market for wine;
• Highest market potential.
2.1 Market expansion strategies
by choosing the market expansion strategy will be used the theory of Ogor Anshoff. The
growth matrix will gave a clear vieuw of the market expansion possibilities. Ansoff’s
product/market growth matrix suggests that a business’ attempts to grow depend on whether
it markets new or existing products in new or existing markets. The output from the Ansoff
product/market matrix is a series of suggested growth strategies that set the direction for the
business strategy which could be as followd: Market penetration, Market development,
Product development and diversification.
In this case, Zandberg will enter a new market with excisting products. This means that
Zandberg will choose for an market development in the Matrix of Anshoff.
2.2 Conclusion International Market selection
According to the four steps of the Uppsala school the risk of entering the netherlands and the
potential niche markets is being analysed by using variables. Furthermore, the market
expansion strategy is been choosen for Zandberg. According to the third step of the Uppsala
school the Netherlands has an potential for foreign investores but the economy is immature.
Zandberg is being analysed in the internal analysis and the Netherlands is being analysed in
the External analyses, and can conclude that both Zandberg and the Netherlands is ready to
do business with eachother. Therefore, the decission is to enter the Netherlands.
The niche markets is being analysed. Both golfclubs and beachcomapies has a lot of
companies in the Netherlands, which will be an risk regarding the production capacity of
Zandberg. Both are depending on the weather conditions, therefore it is uncertain if
Zandberg could sell enough wine. There are 46 lounge bars in the Netherlands who are
interested in the wine of zandberg. Therefore, the choice is to enter the Netherlands by
focussing on the niche market Lounge bars and using the market expansion strategy: Market
development.
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Export business plan
Export plan business plan
1. Stratetgy
Introduction
In this chapter, we take a look to the new strategy of Zandberg, especially with the
international focus. This new strategy is formulated in this chapter and will be worked out
further in the next chapters.
1.1 Strategicall summary
There are different kind of opportunities and threats envolved, out of the internal and external
analysis and on the other hand internal strengths and weaknesses.
Important opportunities are the changing consumption patron of the current consumers and
more consumers are having dinner in e.g. restaurants and bars. The quality of the wine in
combination with the price is still important for consumers. The biggest threat for Zandberg
as analysed in the external analysis is the credit crunch. As an effect of the credit crunch
many wineries are bankrupt and consumers do not spend extra money on luxury goods, like
wine. On the one hand, Zandberg is surviving the credit crunch because the Russian
management, who invests huge amounts of money in the winery each year. On the other
hand Zandberg is surviving the credit crunch, because of it strengths, the quality of the wine
and the beautifull terroir.
To accomplish the revenue goal of ZAR 3.290.000, Zandberg will have to focus on reliable
business partners in the Netherlands who sell the wine to the 46 Lounge bars. Furthermore,
it will be important to focus on awareness of the name Zandberg and quality of the wine at
consumers in Lounge bars.
1.2 Mission and vision
To have a clear fundamental base for the export plan, the mission, vision and main goals will
be formulate first. These will be the core base of the export business plan.
Mission
In the beginning of the internal analysis is the following temporary mission being formulated:
“Zandberg aims to provide quality wines with appropriate packaging and presentation
to the domestic and international aspirant wine markets at youthful and mature
consumer levels and create sustained consumer brand loyalty relationships with their
products at both entry levels.”
The way Zandberg currently work does not live up with the mission. The mission is about
entering domestic and international aspirant markets at multiple entry levels. Zandberg does
not have a complete wine range yet to accomplish the described mission.
However, the mission does not have to be revised for the next three years. Because the
mission is what Zandberg aims to be in international markets.
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Export business plan
In the next three years the wine range will be expand and will cooperate with international
businesspartners to eventually build the image of the estate internationally by consumers
who consume Zandberg wine.
Vision
Zandberg has currently no clear vision about the future. Within Zandberg are multiple visions
(management and employees) about the future. Therefore, the following vision is been
formulated for Zandberg, for the next three years.
“Zandberg aims to increase business partners in both international and domestic markets
and increase brand loyalty and image, for 2013. Zanberg will realise this to be an market
orientated company and by offering a complete and qualitive wine range with innovative
packaging”
The emphasis in this vision is to focus on what consumers want and desire. Furthermore, to
offer quality wines which adapt on the consumers who has more knowledge of wines and
prefer to drink quality wines.
1.3 Target group in the Netherlands
Zandberg will serve wine in lounge bars with innovative receipts and packaging. By serving
for example, the dry Rosé with crushed ice and fresh fruit, as a cocktail. According to
tilllate.com, there are 46 upper-class lounge bars in the Netherlands. Zandberg will focus on
the Young Urban Professional; in Dutch it’s called “yuppen” who are lounging on the best
lounge bars all over the Netherlands.
The DMU is the business partner of Zandberg in the Netherlands who has the function as
importer or agent. The business partner of Zandberg will decide which types of wine he will
buy and with what amount of volume. On the other hand, the decission maker of buying the
wine will be e.g purchasing manager, sommelier and management of a restaurant or hotel.
Market potential for Zandberg is € 766.572,31,-. In 2008 has more than 55% of all the Dutch
people (16-80 year) visit an company which offer drinks. Dutch men are visititing an café
more compared with women.
1.4 Positioning
The positioning of Zandberg will be focused on what the consumer want and desire. The
main value will be integrity (consumer trust) delivered through complete transparency and
authenticity. These values will be delivered through an online web portal in the form of short
films, info – mails and a dedicated blog. Furthermore, an important aspect in the positioning
is the experience of wine. Zandberg will give the wine consumer more experience by offering
wine seminars, wine tastings in Lounge bars and online wine tastings at the website of
Zandberg (this will be worked out in the chapter promotion). By offering these experiences,
Zanberg will gain more image awareness in the Netherlands. On the other hand, the
positioning has to focus on the advantages for importers or agent to cooperate with
Zandberg. These factors combined will lead to the following positioning:
Zandberg is a supplier and producer of quality wines in South Africa combined with the
strengts; the terroir and the authenticity of the winery. Zandberg will adapt itself on what
customer’s desire and demand by offering a quality product and give the customer more
wine experience. Zandberg could be typified as an organization that has a international
market orientated focus. Furthermore, offering a qualities wine range and a fast delivery
period is important in the positioning.
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Export business plan
This positioning could be typified as an informational positioning. Zandberg emphasise the
product features which will be delivered to the customer and the value what is attached to
this. On this way Zandberg is trying to convert the (small) difference with the competitors in a
competition advantage. The Premium wines of Zandberg will be positioned as authentic; with
a real winery and real winemakers, real vineyards and history, sense of place etc.
No other New World wine producer like South Africa has such traditional and unique estates.
Many of them were established around 300 years ago and today welcome large numbers of
tourists and local visitors for an authentic lifestyle experience that is in line with consumers’
expectations regarding super premium wines. Especially the on-trade and multiple specialist
categories should focus more on promoting the estates. When we take a look at the
communication; the wine estates in general and Zandberg should therefore be brought more
to forefront of the communication of the South African wine industry, as authentic places
which offer a unique life style, both in South Africa, as well as in the export markets.
Zandberg will positionate both wines as an fancy wine in the Lounge bars. This means that
the dry Rose could be served as an coctail and the bottle of the first South African white
Merloy could be introduced with fancy packaging.
1.5 Competititor Analysis:
In order to know on what kind of way Zandberg could gain competition advantage, the
student has done field researxh in 5 trendy Lounge Bars in the Netherlands, with all different
style of design and target group. According to research of the Lounge bars, a bottle of wine
will be purchased of an wholesaler of importer between the 6 and 9 euro’s. The Lounge bars
are asking in average 4 euro’s per glass of wine and there are served 5 to 6 glasses of wine
from one bottle.
The student has visit Bloomingdale in Bloemendaal, expensive F&B, Lounge music, offering
breakfast, lunch, dinner and is well known in the Netherlands. Remarkable, on the wine list is
that Bloomingdale are offering very expensive champagnes (€85 - €475) but affordable
prices for a bottle wine (€19.50 - €27.50) The wines are from Italy, France, Australia and
Chili. There is no South African wine on the wine list, which is an potential for Zandberg.
The second Lounge Bar is the Escape in Amsterdam, it is an affordable Lounge bar where
people can order Lunch and dinner. It has affordable prices, Lounge music and is well
designed. When we take a look at the wine list, the average of a glass of wine is €3,50 and
an average of € 20,- per bottle. Remarkable to see is that the Escape is not serving any
South African wines. The white and red wines are all from France. This is an interesting
potential for Zandberg.
The third Lounge bar is Jinso in Amsterdam, it is an Lounge bar which is slighty more
expensive compared with the Escape. Jinso offers lunch and dinner with lounge music in the
eavening and is well designed. Compared with Bloomingdale and the Escape, this Lounge
bar is serving two white wines from South Africa (Nederburg and Culenburg) who are bigger
wine estates compared with Zandberg. Jinso, serves also two South African red wines of
wine estate Nederburg and Culenburg. The average price of a glass of wine is € 4,- and a
bottle of wine € 25,-.
The fourth Lounge what the student has visited is Rose’s in Arnhem. It is an trendy and cosy
lounge bar with excellent combination of price and quality. The lounge bar offers also lunch
and dinner. The music is relaxed with an excellent atmosphere. When we take a look at the
wine list: The white wines are mostly from France, Australia and Chili and the red wines from
Spain, Argentina and France. Rose’s sells only on South African red Pinotage wine. The
prices are compatible with the other lounge bars; € 20,- for a bottle and € 3,50,- per glass.
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Export business plan
The fifth and last lounge bar what the student has visited is the Sushi Lounge in Den Bosch.
The student has chosen to visit also a sushi lounge bar, because the white Merlot is really
suited by eating spicy japanese food, according to wine tourists in the wine tasting centre of
Zandberg and Mr. Ridley who is educated as a chef. The sushi lounge is well desined and
has a relexed and typicall Japanese atmosphere. Customers are mostly having dinner with a
few drinks. When we take a look at the wine list, the wines are more expensive compared
with Jinso and the Escape with an average price per bottle of € 30,- and € 4,5,- per glass.
The wines are from all kind of wine producing countries. The sushi lounge has one white
Chardonnay, Amandalia, Robertson and one red Pinotage from the fairvieuw estate in Paarl.
Concluding: there is enough potential for South African wines in lounge bars. Especially with
the Dry Rose and the first South African white Merlot, what no other lounge bar has on the
wine list. Compared with the competitors, Zandberg could introduce the wine for easy € 4,per glass and € 20,- per bottle. According to conversations with sommeliers in the lounge
bars which the student has visited, the wines of Zandberg is well designed and is interesting.
Furthermore, lounge bars hardly selling an South African Rose.
1.6 Goal
Within the next three years, Zandberg will increase the revenue by exporting the wines to the
Netherlands. On this way, Zandberg aims to gain revenue of ZAR 3.290.000 (€ 346.315,79)
in the Netherlands in 2012. When calculating the Euro’s and South African Rand, the student
uses the following exchange rate for this business export plan: 1 Euro= ZAR 10.53
This is an increase with 365 percent at the end of 2012. This means, an increase of the
revenue of approximate ZAR 797.000 (€ 83.894,74) per year. The goal is based on the
domestic sales goal, which is ZAR 3.290.000 (€ 346.315,79). According to the management
of Zandberg, Mr Ridley and the external analysis it is expected that Zandberg will gain the
same revenue in the Netherlands as the domestic market. However, the Netherlands is a
new market with more sales potential but with more risk; therefore Zandberg will take the
above goal as a target for 2012.This increase will be realised by doing business with reliable
business partners (importer) in the Netherlands.
The importer(s) will order huge volumes and sell it to their distribution network, this consist
46 lounge bars. Due appointments with big international wine companies and organisations
in the wine industry , such as the Baarsma wine group, de Bruijn wijnkopers, wijnkristal and
WOSA and talked about the possibilities of entering the Dutch market, they all agreed that
Zandberg has a lot of potentials in the Dutch Market. The student (accountmanager) has
already appointments with specialised South African wine importers such as Wijnkoperij Bart
who is interested in cooperation with Zandberg. During a period of five months, the student
build an international network with importers all over the world and will visit fairs (ProWein in
Dusseldorf, Germany) to network in the wine industry. This means, that the accountmanager
will gain the clients by using his network in the wine industry.
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Export business plan
1.7 Revenue goal
The revenue will be increased in the Netherlands. Therefore, the following revenue goal is
been formulated from 2010 till 2012.
Year
Revenue in ZAR,
€
ZAR 900.000
(€ 94.736,84)
ZAR 1.950.000
(€ 205.263,16)
ZAR 3.290.000
(€ 346.315,79)
2010
2011
2012
Increase in
ZAR,€
ZAR 900.000
(€ 94.736,84)
ZAR 1.050.000
(€ 110.526,32)
ZAR 1.340.000
(€ 141.052,63)
increase %
116
148
Currently, Zandberg does not selling wine in the Netherlands. Because, Zandberg want to
operate actively in the Netherlands and aims a good market position in the future, will gained
a large revenue increase, with in 148% in 2012. When we take a look at the goal in terms of
bottles, pallets we will presume the following goal. We assume that the three types of wine
have the following sale share in the Netherlands to accomplish the goal of ZAR 3.290.000 (€
346.315,79)
• White Merlot 55%; it is a fancy wine and the first South African white Merlot, what the
young urban proffesionals like, according to the external analysis.
• Dry Rosé 45%; it is a type of wine what most of all is consumed during spring and
summer, according to the external analysis.
Dry Rosé
Revenue
goal for 2012
Production Bottles goal 2012
capacity
per year
45% of ZAR
3.290.000
20 000
litres
(26.600
bottles)
ZAR 1.480.500/ 35
(salesprice per bottle)=
42.300 bottles
20 000
litres (26
600 bottles)
ZAR
1.809.500/50(salesprice
per bottle)= 36.190
bottles
40.000
litres
=53.200
bottles per
year
78.490 bottles in
2012/3= 26.164 bottles
per year.
ZAR
1.480.500
(€ 140.600)
White
Merlot
55% of ZAR
3.290.000
ZAR
1.809.500
(€ 171.843)
Total
ZAR
3.290.000
Cases
goal(6
bottles
per
case)
42.300/
6=
7.050
cases
EU Pallets
goal (140
cases per
pallet)
36.190 /
6 (6
bottles
per
case)=
6.031
cases
12.148
cases
6.031
/140=
43pallets
7.050/140=
50 pallets
93 pallets
When we take a look at the production capacity, Zandberg produces 40.000 litres of wine per year,
which is engough to provide the Dutch market till 2012. zandberg will guarentee 27.000 bottles of wine
per year for the Dutch market, as agreed with the management of Zandberg. According to a factsheet
of shortsea.nl, there will fit 14 EU pallets in a 20 ft container. This means that zandberg has to sell
93/14= 6(.5 a half container will be transported by groupage)containers of wine before 2012 (2
containers per year).
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Export business plan
1.8 Market entry strategy
There are multiple options for entering the Dutch wine market. In this paragraph we will take
a look what the best option is for Zandberg and the target group. The objective of Zandberg
is to establish Zandberg as a market orientated winery and to build awareness of the estate
Zandberg internationally of consumers who drinks the wine of Zandberg. To achieve this
goal, Zandberg plans to continue with looking to market opportunities both domestically and
internationally.
Furthermore, building on an appropriate wine range which is based on the demands of the
consumers and selectively pursue other opportunities, to leverage the name Zandberg
through offering a quality wine, giving consumers an wine experience which is based on
authenticity and the development of new distribution channels. In this chapter, Zandberg
policy towards entry strategies in the new market is described in terms of market entry
starting point, market entry strategy and growth strategies.
Market entry starting point
In the selection of international sales channels companies are taking a look of three starting
points of Franklin Root. By using these starting points it make clear differentiation of the way
companies are orientated on foreign markets. The three starting points are: naïve starting
point, pragmatically starting point and strategically starting point.
Zandberg is a relative small South African winery; it will be a huge financial, brand image,
and logistic risk to do business in another country, especially on the other side of the world.
This means that Zandberg should operate in the Netherlands with taking minimal risks.
Therefore, the starting point of Zandberg by operating in the Netherlands should be a
pragmatically starting point. With this starting point we will take a look at the market entry
strategy for Zandberg.
Market entry strategies
According to the external analysis, most South African wine exporters in general initially
choose to work through agents, distributors or wine importers. In the longer term, however,
wineries considered other options, such as taking more direct control of the market, more
direct selling or promotion, or seeking alliances or agreements. Zandberg has no experience
in selling wine in new markets such as the Netherlands and does not have the financial
possibilities to set up a international unit. Furthermore, South African wineries hardly
cooperate with each other.
The wine and marketing manager has to focus on producing and supplying quality wines and
has no time and financial sources to travel a lot between South Africa and the Netherlands.
During an appointment with Mr de Bruijn of de Bruijn Wiijnkopers ( wine importer in the
Netherlands), the student discussed what the best option is to enter the Dutch wine market.
According to Mr. de Bruijn the best option is to cooperate with a specialised Dutch importer
of South African wines. Such importers has years of experience in importing wine and has all
the contacts in the wine market e.g. The gastronomy and hotel sector what the target group
is. This means, that Zandberg need to cooperate with an importer and using an indirect entry
strategy. This means, Zandberg has a reliable Dutch business partner who sell the wine to
their own distribution channels. Concerning juridical information such as contracts, see the
juridical chapter. Furthermore, the student will function as a account manager from the 1th of
February of 2010.
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Export business plan
1.9 Strategy Typology
Treacy and Wiersema have developed, according to their own business experiences a
strategy typology. This typology is used to look and concentrate on what the value is for the
customer (of Zandberg), on the base of the process concerning the rendering service and the
interaction between (seller) Zandberg and the customer. The authors developed the following
three alternatives for companies to compete in the market.
•
•
•
Operational excellence;
Product Leadership;
Customer intimacy.
Every of these options ask for a specific organization configuration. However, every of the
three strategies emphasize a certain dimension of (relation) value; Zandberg has to score on
all the dimensions to survive. The three dimensions of value are: relational benefits, product
benefits and costs.
The best strategy typology for Zandberg should be Customer intimacy, in order to add value
for the customer; this because Zandberg aims to be a market orientated company. In the
next years, Zandberg should convert the organization structure from a transactional focused
organization to a relation focused organization. This could be achieved by cultivating
business relationships. In this kind of organization structure, the decisions will be made
closer and focused to the client. As a result of adapting the products to the demands of the
clients of Zandberg, the clients will be loyal and willing to pay for the products. This strategy
should be utilized by entering the Dutch market and developing new wines.
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Export business plan
2. Marketing:
Introduction
This marketing programme will be developed on the base of the chosen positioning.
Furthermore, there will be developed an marketing programme for the lounge bars. This
involves on the one hand the formulation of the marketing goals and the realization of the
marketing mix will be consistent with the positioning. On the other hand, the realization of the
marketing programme will make use of, and adapting of the difference in purchasing
behaviour and therefore reaction of the clients of the marketing efforts. By adapting of these
aspects in the marketing programme, the clients will be reached more effective and is the
change that the clients the positioning recognizes will be bigger.
This marketing programme is focused to design a set of marketing activities which add value
for the customer on a way which is consistent with the positioning of Zandberg in the
Netherlands. The following marketing programme consist the 4 p’s, also known as the
Product, Price, Promotion and Place. However, these P’s are made in a seller’s perspective.
We also take a look of the buyer’s perspective, because of Zandberg should focus on the
buyer. The 4 C’s of the buyer perspective consist:
Product
Price
Place
Promotion
Core Benefit (customer value)
Cost for the customer
Convenience
Communication
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Export business plan
2.1 Product:
The product part of the marketing mix is the most important part of the organisation; this
because it is concerned on what kind of way the product is adapted on what the clients of
Zandberg want.
Product goal
According the external analysis the (potential) clients of Zandberg want to choose from
different types of wine with a good quality, moreover the consumers are more concerned
about health and are not brand loyal. Furthermore, the consumers expect more in terms of
packaging and innovative wines. These aspects will be taking in account of the new product
policy. Zandberg should focus in the next years on producing quality wines and complete the
wine range with innovative wines which is focused on the demands of the wine market.
Furthermore, the existing wine range will be investigate closer, the 2005 African faces should
be sold quickly with a low price. In figure 2.2 you will find an overview for expanding the wine
range for the next three years.
Fig 2.2 Overview wine range in 2012.
In figure 2.2 is shown the entire wine range for 2012. The other wines which is added to the
wine range is researched the demands of the total wine market. Moreover, Zandberg aims to
expand the entire wine range for the future. This product policy and export plan is focused on
the premium and versatile wines for the gastronomy and hotel restaurants.
For this future product policy is formulated a product goal for the Dutch market, which is:
The product goal of Zandberg is to expand the versatile range with a Sauvignon Blanc before
2012 and producing quality wines which is focused on the demands of the Dutch wine
market.
In terms of the core benefit for the buyer which will be achieved with this goal is: “a complete,
innovative wine range with a high wine quality”.
Product strategy:
The future product strategy for the Dutch market will be worked out according to the following
aspects: innovation, typical usage by end users, unique competitive advantages, Product
characteristics.
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Export business plan
Innovation
Zandberg will search actively the next three years to trends and developments in the Dutch
wine market. With this on the hand Zandberg gain competitive advantage and the products
will lead to a higher margin. The expansion of the wine range will be executed through a
trading- up strategy. This means, that Zandberg will try to stretch out the product line above
the original price range, in order to bring the wine range to a higher level. The new premium
and versatile range would adapt itself on the new trends and developments in the Dutch wine
market. Currently there will be searched to innovative additions in terms of packaging, labels,
wine tasting which adapt on health and the quality of wine.
To research the new trends and developments in the Netherlands (in the future other
markets) , having contact with the Dutch business partner and arrange the international
distribution it would be necessary for Zandberg to hire a international account manager who
has experience in the international wine business. According to the internal analysis, the
wine marketing department is too small when they want to operate in more international
markets. This international account manager has to research the trends and developments of
the international wine market. Therefore, he or she has to visit wine fairs both domestically
and internationally. The international account manager could adapt faster on the demands of
the consumers and eventually Zandberg will change in a market orientated organization.
Zandberg cannot afford to hire new employees who are well educated, instead of that
Zandberg could cooperate with student associations like Khaya, in order to get wel educated
students who could search to new trends and developments in the market. This will cost
nothing for Zandberg, the student cannot receive money because of getting an Visa.
Besides researching the market, the international account manager has to focus on the
competition in the market in order to distinguish from all the competition. Furthermore, the
strategy typology is customer intimacy; the most important task for the international account
manager is to focus on the business relation with the Dutch importer and conscious discuss
and focus on operating the Dutch Lounge bars.
To be innovative in the Dutch Market, the whole organisation has to be involved by this
process. A suggestion is that the viticulturist, wine maker and the management of Zandberg
could hand in innovative suggestions at the international account manager. A suggestion is
that when an idea is being approved by the international account manager and is also
launched the employee will be awarded with for example an extra bonus. The competition
will create a certain internal competition, involvement of employees. Furthermore, a
suggestion is to plan meetings between the management international account manager,
viticulturist and the wine marketing manager to discuss about the trends and developments
in the wine business and innovation. The viticulturist travels a lot to other wine producing
countries and with these meetings you create more involvement. Another suggestion is that
the Russian management will visit more wine fairs with the wine department in which is
focussed on international wine relations like the yearly wine fair Jo’burg wine show in
Johannesburg. Another suggestion is to make use of crowdsourching. With this, customers
could give some input of development of new wines and innovate aspects for selling the
wine.
Quality
Offering quality will remain an important strength and focus point for Zandberg. By producing
and developing the wine, the emphasis will remain the quality. Currently, Zandberg is buying
other types of wines from wineries with a good combination of price and quality. The
winemaker is the 7th generation of winemaker who is always focused on the quality of wine
and therefore works with the best ingredients and tools. However, by focussing more on the
quality and the exclusivity of the and concerning less about the price, as it is now, the quality
of the wine range will increase significantly.
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Export business plan
To test the quality of the wines, a suggestion is to take some samples at random in order
to test the wines at stock and take some samples before the wines will be send to the
customer. When the wines enter the Dutch border the wines has to meet certain product
certificates like the ISO certificate. More information about foreign intellectual property
protection, see the International law chapter.
Packaging
An important factor of the product is packaging. Currently, Zandberg is only selling bulk
packaging and bottles during wine tastings. Within the next years, Zandberg will focus more
on designing consumer packaging for international markets. Zandberg will design the
packaging itself and research what kind of packaging the customers want. However, the
consumer packaging will be done by the clients overseas. Recently, packaging of the wines,
like the cases is currently been done by another company.
Product strategy Lounge bars
According to the external analysis wine consumers want more wine varieties and innovation.
Furthermore, drinking wine is these days normal in the Dutch culture and not anymore for
elite groups. Therefore, it is a possibility to launch the dry Rosé in upper-class and trendy
bars as a cocktail and giving wine a more subconscious experience. Zandberg has only to
deliver the dry Rosé and the bar has to buy the other ingredients.
After sales activities
As analysed in the internal analysis there is currently no after sales service. Furthermore,
there is no information concerning after sales on receipts, invoices ore whatsoever. This has
to change within the following years. According to both internal and external analysis it is
normal that someone is paying for the wines and that’s it. A suggestion is to place
information on receipts and invoices in order to give clients information about the following
aspects
•
•
•
Who is responsible, when the bottles are broken
What will happen if the customer do not like the wine
What will happen if the quality is bad of some bottles
If a customer wants something specific, Zandberg will try to give the the customer what they
need. As example, when someone wants to open a new shop or a restaurant and needs
specific demands of the wines and the packaging, Zandberg will try to fulfil in there demands.
If a small client has a certain specific request and it would not be very profitable, Zandberg
will not realise this request. People who want to order small amounts of wine could order by
the webshop within the next three years, more information about the webshop you will find in
the distribution chapter.
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Export business plan
2.2 Promotion
The promotion activities will be further worked out in the following communication plan.
The communication plan for Zandberg, will be written for the mid-long term which is 20092012 just like the marketing plan. First, the most important market developments will be
typified, further the communication goals, strategy, choice of communication mix, budget and
the communication mix will be worked out.
Important market developments
•
•
•
•
Demographic developments: increasing of older People/ education level of people
Changing consumption patron: increasing ask of healthier food and food varieties and
‘tickle my senses’.
People are more eating outside in restaurants
People having more interest in sustainability.
Communication target group
Zandberg will focus the communication on one target group in the Netherlands, which is
been identified in the first chapter of the export business plan. These are the potential Dutch
customers of the wines of Zandberg.
The communication target group consist the lounge bars. As suggested in the product plan,
Zandberg will serve the dry Rosé as a cocktail. According to tilllate.com, there are 46 upperclass lounge bars in the Netherlands.
Zandberg will focus on the Young Urban Professional; in Dutch it’s called “yuppen” who are
lounging on the best lounge bars all over the Netherlands. It is a group of people who want
fancy and modern drinks, food in a well designed atmosphere. According to the external
analysis, it is a group who is well educate,have a large social network and spend a lot of
money on luxery goods. You will find yuppen in the best restaurants and bars in the big
Dutch cities. The lounge bars are upcoming and mostly situated in the Randstad where the
most people are living and working.
Communication goals:
The communication goals which will be measured in terms of knowledge, attitude and
behaviour will be measured in different ways:
•
•
•
Knowledge; is concerned about the image of Zandberg. This will be measured with a
yearly online survey on the existing customers. The cost of the survey is limited.
Attitude; is concerned about the new image of Zandberg; innovative packaging and
quality wines. This will be measured by compare the revenue of the products in the
Netherlands which is branded different with the excising products. Furthermore, it will
be measured with a yearly online survey on the customers.
Behaviour; it is concerned on the purchase of the products and will be measured in
the administration, survey of all the purchases.
Lounge bar:
Knowledge: Within one year 70% of the lounge bars need to be familiar with Zandberg, after
three years it will be 90%.
Attitude: Within three years 75% of the lounge bars will conclude that the quality of the dry
Rosé for serving in the cocktails be mentioned as “good”.
Behaviour: Within three years 25% of the revenue needs to come from the lounge bars.
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Export business plan
Marketing communication strategy
Zandberg will focus the communication strategy on the clients who consist the young urban
professional. The Dutch importer will contact the target group throughout own distribution
network. However, the student who will function as an account manager and will persuade
the clients with giving information about launching the dry Rosé as cocktail, innovation,
authenticity and promotion activities in the lounge bar.
According to the external analysis the market is currently want these aspects and therefore
the client will be persuaded. The strategy is mainly focused on image awareness.
Furthermore, Zandberg will giving the target group extra value by launching a cocktail of a
South African winery with real authenticity and giving wine tastings to give the customers
extra experience. According to Ted Business and an interview with Annette Badenhorst from
WOSA, people are looking for real authentic products. Therefore, by offering a real authentic
wine with fresh ingredients, people will experience the “real’’ cocktail instead of instant fake
cocktails with no fresh ingredients.
General statement which match with the goals and strategy:
Zandberg is the specialist in quality wines. The organisation is market orientated and adapt
on the demands of the market. The quality, innovation, and customer focused will be the
characteristics of Zandberg
Core statement:
“Due meeting of your demands you are guaranteed of a qualitywine with a appropriate
packaging which has a well known image”
Breakdown structure of the marketing communication mix:
Website:
The website of Zandberg has to match with the new policy. The changed mission and vision
will be the focus points and has to featured at the website. The new website will be used to
give everyone in the Netherlands who are interested in wine the posibbility to experience of
what a winery is doing. Currently, there is not much information about the wines and it is not
really attractive. A suggestion is to give the wine consumer more feeling and experience with
the wine, in order to gain extra value and distinguish from competitors. Many people all over
the world have not seen a vineyard before in there lives. As mentioned before, people want
to see a “’real” products and a “real” person who is selling the wine, according to Ted
business.
• Zandberg will provide online wine educational short films produced in an authentic
relaxed sense explaining the general processes involved and how the nature of the
product is affected by “arcane” terms such as terroir. These short films will not be
stuffy or carry an air of condescension but fun and demystifying: explained in
laymen’s terms.
• A “vine line” will be created: A time line that chronicles the yearly life cycle of the
vineyards. At “bud break” for instance the viewer can log on and watch 5 min
“glimpse” into what this stage of the vineyard entails, only the main most interesting
points discussed to ensure the consumer’s attention will be focused on. The
consumer will be able to become one with the process all they way from the vine into
the bottle in a fun informative manner.
• Recipes paired with available wines concerned will be prepared, not in studios but in
the the beautiful winelands themselves: in the very vineyards where the varietals
such as pinnotage or cabernet sauvignon are grown. These recipes will be simplified
and accessible for everyone, with ingredients commonly available.
• This interactive educational approach to wine will without a doubt encourage
satisfaction of the wines for the consumers as Zandberg offers a connection to the
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Export business plan
experience that the product represents. The short film based on the product offers
a certain familiarization with brand without even tasting it, and the online wine tastings
even more so.
With the help of new technologies, people could subconsciously be part of the wine world. A
possibility is to build a wine website inside the normal website, when people click at the
home page, click on wine and everyone will see the wine website. In figure 2.4 is shown the
suggestion of the wine website:
Fig 2.4 overview wine website Zandberg
Explanation new wine website:
• In figure 2.4 is shown the homepage of the wine website. On the top of the website is
the Zandberg Vineline situated. It is a certain timeline where people could follow the
journey from a grape through the vineyard all the way into the bottle by clicking on the
seasonable dots. When people are clicking on the dots, people will see a movie shot
and explanation by the viticulturist ore the wine marketing manager.
• On the left, is shown different corners, which give people information about e.g. the
winemaker, viticulture with the help of movie shots
• People will find a blog in the middle of the website, with updated information about
the Zandberg wines.
• On the right, people could sign up for Zandberg’s Edu-mails. It consist educational
mails, movie’s etc. in order to give people information about all the developments of
the Zandberg wine.
• The new technology which is been used often these days on website is Twitter and
Facebook. When people are clicking on twitter, it gives recent information of all the
developments of Zandberg. Zandberg has also an own Facebook group, people
could join the group and discuss with each other about wines, networking etc.
An important addition could be a webshop, which will promote clear on the website. The
webshop could be designed by Zandberg or Zandberg could cooperate with a webshop in
the Netherlands who is selling online South African wines. More information about the
website, see the distribution chapter. When entering the Dutch market, the website should be
translated in Dutch and having a www.zandberg.nl name instead of www.zandberg.co.za in
order to reach more people and for the brand awareness in the Netherlands.
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Export business plan
The website would be used for every target group. Zandberg has a contract with
Nedoweb, a South African company who designs websites.
Costs of the website
The costs of the website is basd on implementing a Blog, build in a Video player and a flash
time line into the new wine website of Zandberg. These costs are quoted by Nedoweb, an
South African webdesign company who build the new website for Zandberg.
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Export business plan
Wine tastings
Zandberg will offer extra value for the wine consumers in the lounge bars. Zandberg offers
tourists wine tastings in the tasting centre at the estate for years. Tourists come from all over
the world to gain more knowledge and experience the South African wines.
South Africa has not a wine culture yet and has not developed a palette (taste). Therefore,
image awareness is very important in South Africa because people choose wine from the
image of a wine and winery. According to the external analysis, this is a difference,
compared with other wine producing countries that developed a palette, such as the Dutch
wine consumers.
By giving wine tasting with elementals which is shown in figure 2.5 it will give an extra value
in terms of having more feeling with the wine and for a wine tasting, especially to Dutch
consumers who are interested in gaining wine knowledge.
Fig. 2.5 wine tasting elementals
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Export business plan
The elementals are developed to give a consumer more feeling and taste experience. The
first South African white Merlot will be introduced in the Netherlands by giving this wine
elemental tasting. As shown in figure 2.5. The white Merlot will be tasted with on the pallet;
tangy delicious apple fuit is well balanced with crisp acidity to make a delicately fruity and
refreshing wine. In order to designing the elementals, Zandberg cooperated with Nedoweb a
South African website designing company. Nedoweb quoted the following prices for
designing the elemental boards.
Furthermore, this wine fresh plums with hints of white pepper on the nose. An suggestion
that the wine tasting will be given in lounge bars on selected dates by the account manager.
According to the sommelier.nl, the rates for specialized wine tasting company e.g. ‘De
sommelier’ is € 150, - per hour. Zandberg is a small winery and cannot afford to spend much
money specialised people who can give the wine tasting. Therefore, the account manager
will give the wine tastings. This is cheaper and the account manager (the student) has a half
year experience in giving wine tastings. The idea is when the first 50 people have bought a
Zandberg wine during; they will be invited on a wine tasting seminar at the bar. After this
session, consumers could book a wine tastings and there are more options for the
consumers like team building, clubs, big groups who will do a wine tasting. This has a
advantage for the restaurant, who has more people in the restaurants and for Zandberg it will
increase the image awareness.
2010 Fifa World Cup
From 11th June till the 11th of July the 2010 Fifa world cup is in South-Africa. For Zandberg it
is a huge opportunity to adapt on this soccer event with in combination with the South African
experience. To organize a contest and wine tickets for a match of the Netherlands and
staying in Cape-Town would be to expensive for a small winery like Zandberg.
Therefore a cheaper and more effective suggestion is to cooperate with a Dutch company
who supplies a product such as nuts. During an meeting with Mr de Jonge of Delinuts, the
student discussed about opportunities to make a combination of nuts and wines. Mr de
Jonge has a lot of contacts in the food and beverage world.
The idea is to sell the combination of ‘orange’ nuts in the sales channels of Delinuts which
are; the off trade, industry, consumers and the food and beverage industry. Zandberg will
offer the wines to Delinuts, which will cost no extra money.
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Export business plan
Fairs
Relevant fairs will be visited with as a goal to network for the accountmanager with people in
the business and gain more image awareness. The fairs will specially be selected for
operating on the Dutch markets. The first fairs will be important to communicate and
exchange business cards with as much potential business partners as possible to arrange
appointments. Written below you will find suggested fairs for the 2009 and 2010 year:
•
•
•
•
Foodweek, jaarbeurs Utrecht, 11th of November 2009;
ProWein, international wine fair for Europe, 21-23 March in Düsseldorf, Germany;
Horecava, 11-14th January 2010, Rai Amsterdam;
Easyfairs, 16-17th December 2010, Autotron Rosmalen.
Annual Client survey
The accountmanager will do an annual client survey. These new survey meet with the new
working method of Zandberg to be more client focused. Furthermore, by using the client
survey, the communication goals could be measured up and be evaluated. The costs of a
online survey is low and the results are easy to process the data. A suggestion is that the
most positive results will be viewed at the website of Zandberg.
Advertising
For a small winery like Zandberg it is hard to invest in advertising campaigns, because it will
cost thousand’s of euro’s and it is not sure that it will provide a lot of brand awareness.
Therefore, a suggestion is to focus on free publicity. Zandberg has interesting subjects for
free publicity such as; the first South African white Merlot, serving the wine as a cocktail and
the authenticity of Zandberg wine estate.
Newsletter
There will bes end once a month a newsletter/action diagram (Zandberg wine news) to all the
customers. By sending these newsletters to the customers, the clients will be updated of the
developments of the Zandberg wines, developments in the wine market. Furthermore, it is a
possibility of giving information about offers and new wines. The core communication will be
mentioned in the newsletter. According to the internal analysis, Zandberg currently has no
insight of the customers. A suggestion is to save all the wine consumer details during the
wine tasting and other clients in order to make a client system.
Samples
Samples are the most important promotion activity in the wine business. Samples, which
consist one bottle of wine of all the different types of the wine range, will be used to show the
product to potential clients and to taste the quality of the wine. The decision of taking the
wines is based on the quality of the wine, Image, design of the label and the price of the
wine. Therefore, Zandberg has to invest in sending samples to the account manager in the
Netherlands. The idea is to take the samples to all the appointments of potential importers in
order to give the client more information about the Product. Zandberg will pay for the
samples as an investment for entering the Dutch market, as agreed with the management of
Zandberg.
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Export business plan
Communication budget
The communication method what is been used is the task method ‘’taakstellende methode”
this means that the estimated costs will be used as the base for the budget. The following
costs are per year(sources costs see the financial chapter):
Marketing-communication tools in
ZAR and Euro’s
Website
Design
Maintenance
Elemental tasting boards
Design
Production
Survey
Annual costs
Fairs
Entrance fees
Samples
Costprice
Shipment
Total
2010
2011
2012
ZAR 5.700
€ 600
ZAR 2.000
€ 210,53
ZAR 2.000
€ 210,53
ZAR 2000
€210,53
ZAR 684
€ 72
ZAR 300
€ 31,58
ZAR 100
€ 10,52
ZAR 100
€ 10,52
ZAR 4500
€ 473,68
ZAR 4500
€473,68
ZAR 4500
€ 473,68
ZAR 2.238
€ 235,58
ZAR 7.890
€ 830,53
ZAR111.988
€ 11.788,21
ZAR 2.300
€ 242,11
ZAR 8.000
€ 842,11
ZAR 420.250
€ 44.236,84
ZAR 2.300
€ 242,11
ZAR 8.000
€ 842,11
ZAR808.380
€ 85.092,63
2.3 Price plan:
When we take a look at the price factor, there is not much margin in the wine business.
Wineries are forced to follow the market price, otherwise it will be hard to sell the wine or the
margins are to low. Furthermore, Zandberg’s prices will be market orientated by entering the
The Netherlands and based on research but are subject to increase with the accreditation of
awards which seem to be prevalently in their favour. By entering the Dutch market, Zandberg
will utilize the same prices as the South African prices as shown in figure 2.6 Furthermore as
analysed in the external analysis importers are asking 25% margin in general and the lounge
bars are putting 300%. Figure 2.6 will give an idea of what the importer and the lounge bar
could for the wine in order to see what the price for the consumer is. The prices below are
compatible with the competior prices in lounge bars as researched in the competitor chapter.
This means that Zandberg has a competitive price strategy by entering the Netherlands.
Fig 2.6 Zandberg wine prices 2009
Trade
Price for
importer
Dry Rosé
R 35 € 3,70
White Merlot
R 50 € 5,25
Importer(25% Lounge
margin)
bar
(300%
margin)
R 43.75
R 131.25
€ 4.63
€ 13,90
R 62.50
R 187.50
€ 6.56
€ 19
Consumer
price per
bottle
R 135
€15
R 190
€ 20
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Export business plan
Dutch Traders require room for margin as well. The margin is based on looking what the
competitors is selling the wine. Zandberg keeps these things in mind when determining
prices. All aspects taken in consideration for the price are:
• Cost Price,
• Market price of comparable products,
• Positioning of the product,
• Future positioning of the product.
Price for the Dutch market
By utilizing the prices as shown in figure 2.7 Zandberg will gain a profit margin in average of
43% above the costprice. Furthermore, the prices will be competitive, market orientated and
both, the buyer and Zandberg will gain a good profit margin. 38According to the tax collectors
office, Zandberg does not have to pay excise tax, due Zandberg suffice the following three
conditions: transporting the goods directly by import, having a transport order and transport
the goods to a excise goods area. Zandberg will utilize the following prices which are shown
in figure 2.7 by selling pallets for the Dutch markets from 2010 till 2012. The inflation could
be an influence factor on the prices in order to reduce the price or the price will rise.
Fig 2.7 Zandberg pricelist for the Dutch market 2010 till 2012
Zandberg Wine Pricelist FOB:
Prices
EUR
Zandberg White Merlot 2009
Zandberg Dry Rose 2009
€ 4,50
€ 3,15
1 pallet 2 pallets 3 pallets 4 pallets 5 pallets
€ 4,41
€ 4,32
€ 4,23
€ 4,14
€ 4,05 per bottle, FOB
€ 3,09
€ 3,02
€ 2,96
€ 2,90
€ 2,84 per bottle, FOB
International payment
To have payment conditions and to cover the risk by entering the Dutch market, Zandberg
should use a Letter of Credit and a bill of exchange. With these papers Zandberg will make
use of the secure ness of the bank of Zandberg and the buyer. Both banks will ensure of
spreading the risk of the products. Because the distance is huge between the Netherlands
and South Africa and the risk of sending the products on a containers ship it is important to
ensure of receiving the money. This will be achieved by using a Letter of Credit and a bill of
exchange. Furthermore, to ensure the guarantee Zandberg should make use of advanced
payment conditions, 50% of the invoice has to be paid in front and 50% has to be paid after
receiving the goods. According to Wosa, These conditions are is often used in the wine
business.
Exchange rate
Because Zandberg deals with international trade, we will take a look at the fluctuations of the
exchange rate, as example during the World Cup. According to Simon Ridley, CFO Standard
Bank Group the South African Rand will remain strong untill during the World Cup, after the
world cup it is expected to weaken. Concerning export, Zandberg has two choices: either to
stick to the price it would receive in Rands meaning the prices in Europe will drop.
The second choice is to keep the prices as they were in Euro’s, meaning Zandberg will get a
higher price in ZAR for the wine, increasing its profit margin. A suggestion is to keep the
price as they were in Euro’s in order to increase the margin. The choosen price reflects the
chosen strategy and positioning. Furthermore, the prices are competitive and Zandberg
38
Dutch tax collectors office and EVD
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Export business plan
expext that the clients still will buy the wine, otherwise Zandberg can adapt the price to the
competition.
Discount policy
Currently, Zandberg utilize no clear discount policy. Discounts are discussed with the
customer, according to the volume of the order. When taking a look at the new situation,
Zandberg need a clear discount policy. Due, entering the Dutch market there will be send
large shipments to the Dutch importer. There will be negotiated about huge amounts of
volume. According to the Trade prices in figure 2.7 Zandberg will give a discount of 2 percent
per pallet with a maximum of 10 percent, which will be revised every year. This discount
policy is progressive and based on to tempt the importer to buy more pallets per order.
Zandberg can afford only small discounts and therefore it will start with 2 percent.
2.4 Distribution plan:
In this plan we will take a look at the distribution aspect. The distribution will create a physic
connection between Zandberg and the consumer who eventually will consume the wine.
When Zandberg organize the distribution well, it could eventually lead to a competitor
advantage. In the following chapter we will take a look at which decisions Zandberg has to
take in terms of channel management
The clients of Zandberg want concerning distribution especially the value of convenience of
ordering the products and the delivery time of the products. On the other hand, the consumer
desires more a value of availability.
For the new distribution policy is the following distribution goal being formulated:
The distribution goal of Zandberg by entering the Dutch market is to realise a high
distribution intensity to the lounge bars.
Distribution strategy
Due using the push strategy, Zandberg will try to ‘push’ the products through the channel.
Zandberg will try to gain a image and quality preference, when Zandberg achieve this, there
will be created a certain ask for the products. Zandberg could use trading margins, discounts
and effort of the account manager. Furthermore, the above distribution goal is achievable
due recruit intensive new clients in the Netherlands. The products of Zandberg could be
typified as convenience goods and will be distributed intensively.
Achieving the goal
In order to make this goal operational, Zandberg will deliver the target groups intensive.
Zandberg will deliver the wines through the indirect distribution channel as mentioned in the
market entry strategy. The importer of Zandberg wines will distribute the wines further. The
wine importer could sale the wine first to a wholesaler or directs to the target group, the
importer is responsible for taking this decision. The new distribution structure is shown in
figure 2.8. Organizing this huge shipments will cost internal no extra problems. Mr. Ridley
has experience in arranging all the export documents and organize the transport of the wines
to the harbour.
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Export business plan
Fig. 2.8 distribution Zandberg ‘supply chain’
Indirect Channel
Producer
(Zandberg)
Bottling factory
Warehouse
Dutch Importer
(Wholesaler)
decission of
importer
On trade, Lounge
bars and Liquor
stores
Incoterms
In terms of time line, it will cost a day to load the wines into a truck and transport it to the
harbour in Cape Town. According to CapeGrape, an South African transportation company it
cost ZAR 2.750 (€ 289 ) to transport the wines from the warehouse to the harbour, inclusing
insurrance. The wines will be transported by sea freight in a 20 or 40 ft container. According
to the external analysis, this is the best option for Zandberg. However, the samples will be
transported by air freight. It will take tree to four weeks to transport the container by sea
freight from Cape Town to the dutch harbour in Rotterdam. The container will be picked up
by a truck and transported to the delivery address. Both parties have not to fear In terms of
perishable, wine could be preserve for years.Zandberg will deliver the wines from the
warehouse to the harbour in Cape-Town. Therefore, it is important to take a look at in these
standard definitions. Incoterms make international trade easier and help traders in different
countries to understand one another. These standard trade definitions that are most
commonly used in international contracts are protected by ICC copyright. The incoterms
consist of 13 different standards, 6 of the incoterms are focussed on sea freight. In terms of
choosing an incoterm, Zandberg will utilize the incoterm FOB. ‘Free on Board’ means that
the seller delivers the goods pass the ship’s rail at the named port of shipment. This means
that the Dutch importer has to bear all costs and risks of loss of or damage to the goods from
that point. The FOB term require that the clear the goods in Rotterdam, costs are for the
buyer. Furthermore, this term can be used only for sea or inland waterway transport.
According to the international chamber of commerce, the wine business use FOB in general.
Furthermore, Zandberg has already send some shipment before and uses FOB.
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Export business plan
Distribution goals per target group
Lounge bars
There are 46 lounge bars in the Netherlands who serves cocktails to consumers who prefer
innovative and new drinks and is willing to pay for it “yuppen”. An suggestion is to approach
the first year big and well known lounge bars such as Bloomingdale, Bitterzoet and Escape in
order to accomplish the distribution goal.
In the diagram below is the distribution goal formulated. To serve the Dry Rosé as a cocktail,
it will be a unique product and according to Bernadette Badenhorst of Wosa, there are huge
potentials to sell the Rosé as a cocktail in lounge bars. Furthermore, the white Merlot will be
introduced by giving wine tastings of the white Merlot.Therefore we assume that 70% of the
lounge bars will serve the cocktail at the end of 2012. Zandberg can not afford to promote the
new product on a wide scale. The account manager has to approach all the lounge bars
itself. Because it would be hard to approach every chain and lounge bar, the goal for 2010 is
that 10 of the 46 bars will sell the dry Rosé. This will be sligtly increased every year, this
because the account manager will build his network and have more expierence of contacting
new clients.
Lounge bars
Lounge bars
Distribution goal
32 lounge bars
2010
10
2011
22
2012
32
3 Sales plan
In this plan we will take a look at the sales part of the export business plan. This plan
consists the sales targets, who the client groups are and the sales process.
Sales targets
As mentioned before Zandberg aims to gain revenue of ZAR 3.290.000 (€ 346.315,79) in
the Netherlands in 2012. This is an increase with 365 percent at the end of 2012 This means,
an increase of the revenue of approximate ZAR 797.000 (€ 83.894,74) per year. According
to the external analysis, Zandberg has an marketpotential of € 766.572,31,- ( ZAR
8.072.006,42) in the lounge bars. To achieve this goal the account manager and the importer
has to acquire new clients actively. The following targets are formulated per target group in
order to achieve the revenue goal:
Target group
Lounge bars
2010
ZAR 900.000
€ 94.736,84
2011
ZAR 1.950.000
€ 205.263,16
2012
ZAR 3.290.000
€ 346.315,79
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Export business plan
The above figures is based on the total goal, divided by the target group and per year.
We will take a look what Zandberg has to sell per lounge bar per year to achieve the sales
target:
Target group
2010
2011
2012
Lounge bar
ZAR 900.000/10
lounge bars=
ZAR 90.000
€ 8.547
ZAR 1.950.000/
22 lounge bars=
ZAR 88.636,36
€ 8.417
3.290.000/
32 lounge
bars= ZAR
102.812,50
€ 9.763,77
Client groups
The goals concerning acquire the wines to the sales channels are formulated in the
distribution chapter. Currently, the clients are not divided by an ABC-analysis. A suggestion
is to divide the customers in A, B, C groups in order to work more focused and more
efficienthis process has to go step by step. In the diagram below you will find the goals for
the A, B, and C division. Zandberg will start with dividing the client groups at the beginning of
2010, this because in 2009 Zandberg will get the first clients in the Netherlands.
Time
Juli 2010
December 2010
Juli 2011
Goal
Dividing the clients in big and small groups.
Specify to four client groups
Specify to five client groups
A suggestion is to segment the groups according to the following criteria:
•
•
•
•
Turnover
sales
Margin
The amount of new ‘innovative’ products what the clients buys.
Sales process
Zandberg will use personal sales and the importer who will try to sell the wines to the Dutch
target group and eventually to the wine consumers.
Account manager
The account manager needs to focus first on finding a reliable business partner in the
Netherlands. In cooperation with the importer, the account manager will start with acquire of
lounge bars. In terms of time line, the account manager will be acquiring clients for 30 hours
a week. The other hours of the week will be filled with giving wine tasting in lounge bars and
communicating between Zandberg and the importer. The account manager will be
responsible for all the communication and arrangements between Zandberg and the
importer. When Zandberg introduces new innovative products, the account manager will
inform all the Dutch clients and discuss the developments at Zandberg. The acount manager
has agreed with the management of Zandberg, that he is appointed as Chesterfield Group
Holdings T/A Zandberg’ offcial agent in the territory of the Netherlands and may negotiate in
alimited capacity on zandberg’s behalf in the matter of wine business in the above
aforementioned territory for the time period of 1 year existing from 01/02/2010 until
01/02/2011. This contract will be revised every year.
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Export business plan
In terms of salary, the account manager will receive a salary of 10 percent of commission
of the wine what will be sold to the Netherlands, as agreed with the management of
Zandberg.
Cooperation with importer
The importer will be responsible of selling the wines to its own sales channels. Zandberg will
look for an importer who has a lot of connections in the market and having experience in
importing wines for years. The student(acount manager) has build an international network
during five months, the acount manager will approach the following specialised South African
importers for a cooperation:
•
L’ Exeption Cordier
L'Exception Lenselink is founded in May 1997. L'Exception Lenselink importing, selling and
distribute quality wines from al the important wine producing countries from new producing
countries and old producing countries. Innovation and tradition are the spearheads of the
company. L'Exception Lenselink want to build an reliable business relationship with business
partners and organise therefore business trips to wine producing countries.
• Fourcroy
Fourcroy is founded in 1980 and is specialised in importing wine from all over the world. The
company is situated in Bussum and operating in the on trade, bars etc. The spearheads of
the company is quality and cooperating with NYK, an specialised wine distributor to maintain
the quality during transport. The importer is interested in wineries who can offer an wide
range of wine in different price categories.
• Kwast Wijnkopers
Kwast Wijnkopers B.V is founded in 1978 by J.J.C Kwast. The goal of the company is to offer
quality wines for an affordable price. For years the company was focused on traditional wine
producing countries but is focused also on new producing countries these days. The importer
sells the wine towards winetraders and F&B market. These days, Kwast Wijnkopers are one
of the biggest and important importers of the Netherlands.
• Wijnkoperij Bart
Henk Bart is leading a traditional, flexible wine import company together with a team of 40
enthusiastic people. They bring quality and character directly from the producer to the Dutch
hotels, catering , F&B industry and the corporate market. Most of the wines are imported on
a exclusive basis. At almost all levels in the Dutch Hotel and catering industry you will find
the wines of Wijnimport J. Bart. The range of wines has been selected in such a way that the
cosy cafeteria 'at the corner' can find a suitable house wine and the exclusive star restaurant
can present a well balanced wine list. Wijnimporter Bart cover all of The Netherlands. The
main office is the Fort Benoorden Purmerend situated in Zuidoostbeemster. This is an old
military fort. The premises in Amsterdam at The Food Center is being managed and supplied
by the main office.
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Export business plan
4 International law and customs
Introduction
In this chapter we will take a look at the process of sending the wines from South Africa to
the Netherlands. As analysed in the external analysis Zandberg has basically to obey the
rules of the EU.
Export procedure
Zandberg has to deal with a certain export procedure for exporting the products to the
Netherlands, according to the 13 steps of WOSA.
1. Register as an exporter at (Sars, Wine online,DTI and SAWIS)
Zandberg is already registered at the above organisations, However Zandberg need
to look at the contracts for updating every year.
2. Receive first export enquiry
this will be sending, the prices, wine portfolio etc to the potential client who is
interested in the wines of Zandberg.
3. Sending Samples and if required merchandising.
In general in the wine industry, the buyer wants to taste the wine and take a look at
the label. Zandberg will send 15 boxes a year to the account manager for samples.
4. Sending quotation (proforma invoice)
Zandberg need to send a quotation with the listing the products, prices, quantities etc.
5. Negotiate the terms and receive purchase order
The buyer will negotiate about the terms and the last price conditions with Zandberg
and the order is placed.
6. Notify the suppliers and shippers
In this stage Zandberg need to inform the transporters and the shippers to arrange
the logistics.
7. Get an export certificate of the Department of Agriculture
Zandberg need an export certificate of the Department of Agriculture, this is required
by the law and the customs by exporting the wines.
8. Pack container, move to the harbour
In this stage, Zandberg need to pack the wines from the warehouse and transport it to
the harbour. An suggestion is to use a freight forwarder, to handle the documentation,
booking of space and land movements. Once the consignment is packed and sealed,
the declaration of loading must be completed and submitted to the department of
Agriculture.
9. Submit exchange control documents to the bank
For exports to the value R 50.000 or more, Zandberg need to submit an Exchange
Declaration is and a commercial invoice to the bank of Zandberg for attestation.
10. Customs and excise clearance
Zandberg need to complete and fill in The customs and Excise documentation,
Customs Bill of Entry. When the freight forwarder has delivered the goods to the
carrier and obtained a transport document as proof of receipt, he can arrange for
customs clearance.
11. Transport by Sea
the wines of Zandberg will be transported by Sea, in general this will take 16 to 20
days for it arrive in the Harbour of the Netherlands. Once the ship is sailed, the
shipping line or forwarding agent must be send a shipping instruction, upon which the
shipping line will issue a bill of lading or waybill.
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Export business plan
12. Offload container, move to buyer’s premises
The land arrangements of the buyer’s side are usually his own responsibility. In this
Case Zandberg Uses Free On Board. This means that Zandberg is responsible for
deliver the goods to the ship and the buyer will be responsible for the rest. He will
have to clear the consignment through the Dutch Customs. The documents described
in the various sections will have been forwarded to the buyer while the wines where in
transit.
13. Payments
The buyer will pay the invoice after receiving the goods. Zandberg ask in terms of
payments conditions 50% in front and 50% after receiving the goods.
Duties/Taxes
Zandberg has to pay import duty.It is only applied on goods imported from a country outside
the European Union (EU). The following tariffs are indicative only at the time of this report
and any rates should be confirmed with Dutch Customs authorities. Furthermore, there are
no quotas .Every wine merchant needs to be registered with the Product Board Wine.
Insurance
In terms of insurance of the wines during transportation, Zandberg will cooperate with a
FENEX shipping agent in agreement with the buyer. This is a specialist in the logistic aspects
of sending goods all over the world. In this case, the incoterm is FOB. This means, that the
buyers will be responsible for all the insurance of the wines. On the other hand, a suggestion
is to have transport insurance. Wineries, mostly using a revenue policy what covers most of
the shipments. Transporting wines will have some risks:
•
•
•
•
The value will be less, This could through damage of the pallets, robbery;
Costs that are made to prevent direct damage;
Costs that are made to keep the ship, freight and shipment (averijgrosse);
strike and war risk and pirates, along the coast of Africa
Furthermore, Zandberg need to have an insurrance due transporting the wines from the
warehouse to the harbour in Cape-Town. According to CapeGrape, an South African
transport organization; the cost of transporting the goods and the insurrance is ZAR 27.500
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Export business plan
5 Financial plan
In this chapter we will take a look at the financial aspects of entering the Netherlands. The
following financial plan is build up by making a profit and loss account for the new market. It
is still uncertain if Zandberg will succeed in making deals with importers, therefore the
following profit and loss account is based on a worst, normal and best case scenario.
However, the student has not access to financial data of Zandberg, this means that the
student cannot provide any further detailed financial plans.
Written below you will find a worked out profit and loss account in terms of worst, normal and
best case scenario, all the figures will be further clarified. Furthermore, this financial plan will
be written for the next three years because the business plan is focused on the mid long
term.
Figure 2.9 Worst case scenario in ZAR and Euros
2010
2011
2012
Income
Gastronomy and hotel/restaurants
Lounge Bars
Liquor Stores
Webshop
Total Income
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Expenditures
Production costs
0
0
0
0
ZAR
120.000
€12.631
0
ZAR
130.000
€13.684
0
ZAR
140.000
€ 14.736
0
0
0
ZAR
5.700
€ 600
ZAR
2000
€ 210
ZAR 2000
€ 210
ZAR
2000
€ 210
ZAR
684
€ 72
ZAR
300
€ 31
ZAR 100
€ 11
ZAR100
€ 11
Salary
Sales staff
Basic salary marketing manager
Listing fees
Marketing-communication tools
Website
Design
Maintenance
Elemental tasting boards
Design
Production
Survey
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Export business plan
Annual costs
Fairs
Entrance fees
Samples
ZAR
4500
€ 473
ZAR 4500
€ 473
ZAR
4500
€ 473
Shipment
ZAR
2238
€ 236
ZAR
7890
€831
total
-ZAR
143312
ZAR - ZAR146900 156900
€15.085
€15.463 €16.515
Costprice
ZAR 2300
€242
ZAR 8000
842
ZAR
2300
€242
ZAR
8000
842
Figure 2.10 normal case scenario in ZAR
Normal case scenario in ZAR
Income
Lounge Bars
Total Income
2010
2011
2012
ZAR
ZAR
540.000
1.170.000
€ 56.842,10 €
123.157,89
ZAR
ZAR
540.000
1.170.000
€ 56.842,10 €
123.157,89
ZAR
1.974.000
€ 207.789,47
ZAR
1.974.000
€ 207.789,47
Expenditures
Production costs
ZAR
334800
€35242
ZAR
725400
€76357
ZAR
1223880
€128829
Salary
Sales staff
Basic salary marketing manager
Listing fees
ZAR
54000
€5684
ZAR
120000
€12631
ZAR
25500
€2684
ZAR ZAR
117000 197400
€12316 € 20778
ZAR
ZAR
130000
140000
€135842
€14736
ZAR
41250
€4342
ZAR 61200
€6442
Marketing-communication tools
Website
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Export business plan
Design
Maintenance
Elemental tasting boards
Design
Production
Survey
Annual costs
Fairs
Entrance fees
Samples
Costprice
Shipment
total
Result
ZAR 5700
€600
ZAR 2000 ZAR 2000
€210
€210
ZAR 684
€72
ZAR 300 ZAR100
€32 € 11
ZAR 2000
€210
ZAR100
€ 11
ZAR 4500 ZAR 4500 ZAR 4500
€474 €474
€ 474
ZAR 2238
€235
ZAR 7890
€830
ZAR
111988
€11788
ZAR
428.012
€45.054.10
ZAR 2300
€ 242
ZAR 8000
€842
ZAR
420250
€44236
ZAR
749.750
€78921,89
ZAR 2300
€ 242
ZAR 8000
€842
ZAR
808380
€85092
ZAR
1.165.620
€122.697,47
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Export business plan
Figure 2.10 Best case scenario in ZAR
Best case scenario in ZAR
Income
2010
2011
2012
Lounge Bars
ZAR
ZAR
ZAR
900.000
1.950.000
3.290.000
€ 94.736,84 € 205.263,16 €
346.315,79
Total Income
ZAR
ZAR
ZAR
900.000
1.950.000
3.290.000
€ 94.736,84 € 205.263,16 €
346.315,79
Expenditures
Production costs
ZAR
558000
€58736
ZAR
1209000
€127263
ZAR
2039800
€214715
ZAR
90000
€947
ZAR
120000
€12631
ZAR
195000
20526
ZAR
130000
€13684
ZAR
329000
€34631
ZAR
140000
€14736
ZAR
42500
€4473
ZAR 68750
€7236
ZAR
102000
€10736
ZAR 5700
€600
ZAR 2000
€210
ZAR 2000
€210
ZAR 2000
€210
ZAR 100
€11
ZAR 100
€11
ZAR 4500
€473
ZAR 4500
€473
Salary
Sales staff
Basic salary marketing manager
Listing fees
Marketing-communication tools
Website
Design
Maintenance
Elemental tasting boards
Design
ZAR 684
€72
ZAR 300
€32
Production
Survey
Annual costs
Fairs
ZAR 4500
€473
106
Export business plan
Entrance fees
Samples
Costprice
Shipment
Total
Result
ZAR 2238
€236
ZAR 7890
€831
ZAR 2300
€236
ZAR 8000
€842
ZAR
282188
€29704
ZAR
798350
€84036
ZAR 2300
236
ZAR 8000
€842
ZAR
1451900
€152831
ZAR
1.838.100
ZAR
ZAR
617.812
1.151.650
€
€65.032,84 €121.200,16 193.484,79
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Export business plan
Income:
The income of Zandberg by entering the Netherlands is based on the sales goals as
described in the sales plan.
Target group
Lounge bars
2010
ZAR 900.000
€ 94.736,84
2011
ZAR 1.950.000
€ 205.263,16
2012
ZAR 3.290.000
€ 346.315,79
The income in the profit and loss account is based on a best, normal and worst case
scenario.
Best case scenario: This scenario is based on the goals in the marketing and sales
plan; these are high formulated and could only be reached in a best case scenario.
Normal case: This scenario is based on 60% of the best case scenario what will be
achieved, this because it is a more realistic goal.
Worst case: This scenario is based on no sales in the Netherlands; the account
manager will not achieve in finding a Dutch business partner and selling any wines.
Expenditures:
Production costs
Currently, Zandberg has a gross profit margin of 43%. Because a lot of the wine will
be sold in bulk, expected is that it will turn out to be 38% for export. The production
costs contain the total revenue made in export, minus the 38% profit margin.
Sales staff:
The sales staff what will be the account manager will earn 10% of every order what is
sold to the Netherlands. This is agreed with the management of Zandberg.
Basic income marketing manager
The sales from export also cover half of the salary of Mr Ridley, the marketing
manager. His estimated salary is ZAR 20,000, making his total salary ZAR 240,000.
Half of this is ZAR 120,000. To take possible raises in account, this amount will raise
by ZAR 10,000 each year.
Listing fees:
Zandberg’s target group will be Lounge bars. According to appointments with big
franchises, Primi Piatti and Adego ask a listing fee to put your wine on the menu.
Usually, this is about 5% of the total sales through the franchise. This is why the
listing fees have been stated at 5% of total sales in the catering industry.
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Export business plan
Marketing-communication tools:
Website design:39
Design is charged once, in 2010. This is half of all the design costs, as the domestic
sales will also cover half of the costs of the website.
Maintenance:40
Zandberg also pays a fee for website maintenance. This is ZAR 4000 per year,
export covers half of these costs, making the costs for website maintenance 2000.
Elemental boards:41
Design is charged once, in 2010. This is half of all the design costs, as the domestic
sales will also cover half of the costs of the elemental boards. For breakdown
structure of the costs, see the promotional chapter.
Production elemental boards: 42
The boards have to be produced physically as well. Six boards will have to be made
in 2010, costing ZAR 50 per board. Costs in 2010 are ZAR 300. Expected is that
boards have to be remade every now and then, ZAR 100 per year is quoted for that.
Fairs:
The account manager will visit four fairs during the year. Costs for these fairs are:
- ProWein:
- Horecava:
- Foodweek:
- Easyfairs:
Due to cooperation with WOSA: free
Due to contacts in Dutch catering industry: free
ZAR 600 (two entry tickets)
Free fair
Annual survey:
In cooperation with NetQ (www.netq.nl) Zandberg will do a annual survey at the
Dutch clients, the costs according to the website of Netq will be ZAR 4500
Newsletter:
Purchase software:
Special software is needed to make the newsletters. At the website
www.sendblaster.nl you can download free software to make your own newsletter.
Samples:
As agreed with Zandberg, the estimated samples what the account manager need to
send to the Netherlands will 15 cases a year (90 bottles) these bottles will be used to
show the wine at appointments with potential clients. Costs are:
•
30 bottles Dry Rosé.
Trade price = ZAR 35
Cost price = ZAR 20,30
39
Nedoweb e-marketing and website design company in South Africa (www.nedoweb.com)
Nedoweb will utilize the maintenance
41
Nedoweb will design the elemental boards, and quoted the costs
42
Nedoweb will design and produce the elemental boards, and quoted the costs
40
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Export business plan
30 x ZAR 20,30 = 609
•
30 bottles White Merlot.
Trade price = ZAR 50,
Cost price = ZAR 29
30 x ZAR 29 = 870
Total costs: ZAR 2238
The amount of bottles for the following years is unknown, this is estimated on ZAR
2300.
•
According to CapeGrape the following costs will be for sending 60 bottles
60 Bottles: ZAR 5280
• Total costs for sending = ZAR 7890
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Export business plan
6 Risk Management
In this chapter we will take a look at all the risks of utilizes this plan. In addition to the normal
risks of business, conducting business in another country adds additional risks. This plan
covers the following risks; country risks, commercial risks and Market risks
Country Risk
The risk of political instability and/or government interference for this plan is minimal, this
because both South Africa and the Netherlands has currently a stabile government.
Zandberg will be doing business with the Netherlands, who is a member of the EU.
Therefore, Zandberg has to obey the EU rules in terms of international trade. Currently, both
the Netherlands and South Africa is in a economical recession.
In terms of economic conditions, there will be moderate risk. As mentioned in the external
analysis, wine is a luxury good. The risk will be that the wine sales will decline more when
the economical recession is not over within the next year.
Commercial risk
It will be risky if the wine consumers will not like the cocktail Rose what will be served in the
Lounge bars. This will lead to less sales in Lounge Bars and when this do not work it will
have consequences for the image Zandberg. It is also important to recognize that the Dutch
culture demand the highest quality and safety of foreign imports.
It is the responsibility of Zandberg to ensure the quality of the wines. The spearhead of
Zandberg is quality; the goods have to be transported by sea freight and the wines could be
at sea for three weeks. Therefore, the risk of transporting the goods could have an effect on
the quality and further on default, refusal to accept the goods and insolvency. If the quality of
the product is affected at any stage of production or shipment the contractual agreements
with Dutch clients could be jeopardized.
Currency risk
Zandberg has to deal with international currencies, the Euro and the South African Rand.
The risk is that both the currencies could rise or decline, which has an effect on the price of
the wine. This will be a moderate risk, as mentioned in the price plan chapter the currencies
will change after and during the Fifa world Cup.
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Export business plan
Bibliography:
Books:
•
•
•
•
Marketingstrategie, Frambach en Nijsen, 2005 (3th edition)
Export management, J.Veldman, 2007, (5th edition)
Global Marketing, Svend Hollensen, (4th edition)
Marktgericht management, Roger J. Best (4th edition)
Organizations:
•
•
•
•
•
•
•
SAWIS
WOSA
Unilever
UCT bussines school of Cape Town
KvK
EVD
Dutch Embassy and South African Embassy
Reports:
•
•
•
•
Taste Wine On The Web, The case of Fourtyfour Degrees – Trang Alice Nguyen
Trust and online wine purchasing: Insights into UK Consumer Behavior –Sarah
Quinton and Sally Harridge – March, The Business School, Oxford Brookes
University, Oxford – International Journal of Wine Research Volume 20. No.1 2008,
pg 68 -85
UCT Unilever Institute of Strategic Marketing 2007
Sawis 2008, SA Wien Industry Statistics No.32: Annual report the Netherlands
References:
•
•
•
•
•
Mr de Bruijn of De Bruijn Wijnkopers
Anette Badenhorst, Wosa
Managent of Zandberg
Mr Nick Ridley, wine and marketing manager Zandberg
Viticultilists
112