MARKETING-TRAPICHE ARGENTINA
MARKETING-TRAPICHE ARGENTINA
Executive Summary
Trapiche Argentina is a leading global exporter of wine products (Trapiche Argentina, 2012). It is an established firm based in Mendoza, Argentina. It has a global presence and operates in 80 countries worldwide competing with the world’s greatest companies. It boosts over 15 lines of wine products that beat the best brands in the market. In respect to global business, Trapiche exports approximately 14 million liters of wine to foreign consumers. It has distribution networks in the various regions of the world. This paper reviews the business of Trapiche winery and develops a marketing plan based on SWOT analysis, PEST matrix, and BCG analysis. The strength of Trapiche is that it has expansive supply of pure grapes grown in the best agricultural areas, in Argentina (ProsperAr, 2009). Opportunities exist in the growing number of wine consumers, in vital markets including United States, Japan, Brazil, China, and Russia (Reed, 2007). Global competition poses a threat while its weakness is in high pricing. External factors that influence wine business include regulations by World Trade Organization and changes in social, technological, and economic factors.
Company Background
Trapiche is an Argentinean winery based at the slopes of Los Andes in Mendoza (Trapiche Argentina, 2012). It is a premium brand of wines exported to over 80 countries globally. In 2009, the winery exported 1.55 million 9-liter cases of wine products (Ibid). Trapiche is a model for the richness of diversity in South America. Its history of the knowledge of viticulture is rich due to the specialization in creating unique wines. In addition to obtaining grapes from more than 200 independent farmers, Trapiche has expansive vineyards stretching 1000 hectares, in the best agricultural areas of Argentina (Zanni, 2004). This diversity and expansive portfolio enable the company to produce the best wine products. Its diverse products operate at the forefront of global trends in packaging and wine styles. The fundamental principles for Trapiche are innovation, diversity, and quality. These are the drivers which guide its foundation and progress.
Range of Products
Trapiche has 15 lines of wine products in the market namely Trapiche Manos, Iscay, Malbec Single Vineyard, Medalla, Gran Medalla, Finca Las Palmas, Broquel, Oak Cask, Zaphy, Varietals, Melodias, Astica, Sparkling Wine, Tradio, and Septiembre (Trapiche Argentina, 2012). Each of the product line has many, diverse products.
S.W.O.T. Analysis
Strengths
Trapiche built a distinguished brand image through its quality drinks and diverse social connection (ProsperAr, 2009). It has an internationally recognized brand and well established manufacturing plant and distribution networks. It is diverse in terms of product lines and variety of products. It has essential commercial ties with distribution networks in several countries globally. For instance, its distribution networks in Africa are in Mauritius and Angola (Trapiche Argentina, 2012). It has a department for research and development whose responsibility is to guide innovation and quality enhancement. It also has a solid reputation for quality and a solid brand name. It has a large number of grape producers and expansive vineyards spread across the agriculturally rich areas of the country.
Weaknesses
Some of the Trapiche products do not have international appeal and recognition(Ebers & Wied, 2007). Promotional activities do not cover much of the global market. In addition, the Trapiche products do not have diversity, in terms of consumer tastes and preferences.
Opportunities
Trapiche sells products in 80 countries. Therefore, it has an opportunity to expand its international market to include many other countries because its brand is global. In addition, there are new consumers in markets with high potential such as Brazil, Russia, and the United States. Economists projected that the global consumption of wine would increase by 6% in the period between 200-2012 (Reed, 2007).
Threats
Global warming and climate change pose a threat to fruit farming and agriculture in general. Trapiche has its vineyards and independent supplier farms located in Mendoza. Mendoza is a relatively dry region that depends on the amount of snowmelt for its rivers. Climate change will affect the amount of water available for irrigation of vineyards which affect production of fruits in the region. The other threat is the fast changing taste and preferences. It is vital to keep track of the dynamism in people’s preferences and tastes. This is particularly so for those experiencing wine products for the first time i.e. young people and women. The third threat is the fast rate of inflation which affects pricing. It is crucial for Trapiche to device cheaper manufacturing and production technologies, in order to ensure that its product prices reflect market rates. The fourth threat is the aging population. Ecco population love coolers and beer more than wine. Lastly, there is the competition from countries that produce wine products at lower costs.
P.E.S.T. Analysis
P.E.S.T. analysis involves the evaluation of political, sociocultural, economic, and technological factors that may affect external business environment (Ebers & Wied, 2007).
| Political Factors | Economic Factors | Socio-cultural Factors | Technological Factors |
| OMC regulations of the World Trade Organization. |
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It may also include consideration of ecological factors, and, so, becomes P.E.S.T.E analysis (Ibid). In this case, organic wine appeals more to the market than inorganic wines.
BCG Matrix for Trapiche Product Line
Stars
These are products that have a high market share and high growth. They are leaders in business and so they require a higher investment than the other products. In relation to Trapiche, products from the Tropiche Malbec Single Vineyard line including Jorge Miralles, Christina Bibiana Colleto, Federico Villafane, and Broquel are the stars, according to product ratings at eRobertParker.com (2012).
Cash Cows
These are slow-growing businesses with high point market shares. They are the former stars i.e. the foundation of the company. They are present in mature industries (neither growing nor declining) and generate profits with little investment. The Tropiche cash cows include Bodegas Trapiche Malbec Oak Cask and Trapiche Medalla, created in 1983 (Trapiche Argentina, 2012).
Question Marks
These are business with low market share, and high point market shares. They have the potential, but need an extraordinary effort to expand point share. Most products start as question marks. These are new products and so they have the potential to become stars or dogs.
Dogs
These are products that have low relative market share expected rate of growth. These products may have points enough to sustain, and are rarely a competing force. The dogs are products that trap cash. They do not have the capacity to generate much cash, and require minimization. Zaphy Malbec has market performance that is relatively low (eRobertParker.com, 2012).
Marketing Strategy
Products
Trapiche is a brand of wine drinks produced and exported to the leading world drinks’ markets (Trapiche Argentina, 2012). The varieties of wines are specific to consumers, events, and occasions. They suit uses in environments such as parties, clubs and festive occasions. Target consumer markets for Trapiche wines comprises the entire population, including, young people aged 20 years and below. However, high alcohol wines are specific to adult consumers. Trapiche is an international brand. Therefore, the target consumers are multiracial and multicultural. In addition, the wine products have an appeal for all religions, age categories, gender variation, and social classes. The young generation identifies with diverse cultural, religious, and racial backgrounds. This market segment is vital as it embraces diversity. It presents room for progression, in that this generation is new to wine consumption and so represents the uncovered market. Diversity and innovation is pivotal in meeting the expectation of people belonging to this category.
Place
Trapiche wines suits social events and the home environment (Ibid). The modern generations appreciate global issues. They socially interact through the virtual media. They recognize the value of global communication, family relationships, and friendships. This is the group that love and participate in social occasion and events. The innovative Trapiche wine products target social settings facilitate social relationships and interactions among populations. The products target global citizens while recognizing the diverse cultural, religious, and racial backgrounds. Trapiche positions itself as a unifying drink in a culturally diverse market. Trapiche produces products that reflect the common social issues across world cultures. In this regard, family functions, parties, sports events, clubs, and different other social occasions are the critical markets for the Trapiche wine products.
Pricing
Inflation makes wine product changes sensitive (Reed, 2007). The global wine manufacturers compete in the reduction of costs so as to have a competitive edge. Trapiche, therefore, prices its products based on market research recommendations prepared by its research and development department. In order to expand market share to include the young people, the wine products should bear affordable prices, at least, to the average global citizen.
Promotion
In terms of product promotion, Trapiche recognizes the trend in social interaction (Trapiche Argentina, 2012). Its advertising strategies include posts on the social media. These are places where people spend time and are an opportunity for spreading product awareness.
Conclusion
Political and legal regulations, cultural diversity, economic changes, and technological advances constitute the external business environment of the wine industry (ProsperAr, 2009). The Climatic conditions in the western region of Argentina have enabled Trapiche to reach the top level of the global wine markets. The company premium location boosts high altitude varietals, particularly Cabernet Sauvignon and Malbec. The key to continued progress, along the promising path of winery production, is the dynamic adaptation of the various wine fruits to seasonal changes in climatic conditions of the desert area. The continued increase in the number of new consumers provides the opportunity for the progress of Trapiche.
References
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