There are many reasons currently given for the current export success of Australian wines. These include , technological superiority, climate, superior winemaking skills, the effects on the Europeans of the Chernobyl nuclear disaster, premium varieties etc. Often amongst these advantages there is the inclusion of marketing, or as the Australian Wine and Brandy Corporation like to call it ‘progressive marketing,’ S. Tolley (11.03.97). However despite these notable market successes that have been recorded by the Australian Wine Industry since 1985, can we truly claim to have a market orientated industry with ‘progressive marketing’ behaviour or has the successful marketing effort been fortunate enough to have coincided with a decidedly disorientated marketing approach practised by our major competitors?
Over time, there have been distinctive periods of marketing management philosophies employed by all industries including the wine industry. Initially a production orientation was the preferred philosophy, with consumers favouring the products that had a sufficient enough supply to be available. Eventually this concept evolved into a product orientation, where the consumers were believed to favour products with the highest quality levels. Some industries adopted a selling orientation emphasising price and promotion. Alternatively some industries and companies embraced the somewhat more recent philosophy of the market orientation where, “the organisational goal is determining the needs and wants of the target audience and delivering the desired satisfactions more effectively and efficiently than the competitors,” Kotler et al (1989) p15.
In 1985, the UK market (where Australia to date has been the most successful) was dominated by the so called ‘Old World’ countries, led by France. French wine, has since the 1940’s, been regulated on a geographical and production basis by what has become to be know as the Vin D’appellation D’origine (the appellation controllee system), forming the foundation of all European Wine laws. This wine code was originally established to prevent wine fraud and was proposed as a type of label integrity program by the wine and grapegrowers of France themselves during a period of social unrest caused by fraudulent behaviour. However the system has evolved into much more with, “the connection between geography and quality becoming a widely accepted belief, if not to say myth by the nineteenth century and is still the gospel of the enophiles,” Loubere (1990) p114.
With the rest of the ‘Old World’ adopting similar or related wine laws, their selling (marketing) of their wines has followed a very defined product orientation and their reliance on these wine laws and the consumer’s perceived quality has become all too apparent.
However in the late 1970’s and early 1980’s the market was about to change. The initial emergence of California as a wine producing region (albeit a little haphazardly) was followed by Australia, New Zealand, Chile, South Africa, the rest of Latin America and Eastern Europe and their impact on the more mature wine markets has been rapid and impressive. These wine producing countries and regions were quick to implement new marketing strategies in these old world dominated markets. In many cases these strategies were rather simple and basic marketing strategies, ie taste the wine and meet the winemaker, yet against little or no opposition they proved quickly successful. This has lead to the situation that we see today in the mature markets such as the UK where France has lost a large slice of the market to these ‘New World’ wines.
The French response though appears to be to blame the product quality and tighten the existent appellation controllee legislation that governs the offending region, as Champagne was forced to do in the early 1990’s. This of course further entrenches the industry in its product orientation and usually works in favour of the New World. The segment of the market that this approach does appeal to, is the most highly involved of wine consumers, the ones that Loubere refers to in the earlier quotation.
So the successes of the new world wines in these mature markets has not been the result of innovative and progressive marketing strategies and owes as much to the product orientated approach of the Old World countries as the New World countries progressive marketing techniques. Therefore the question has to be asked; “what level of competition will Australia and the rest of the New World face when the Old World embraces the marketing orientation?” That may not be too far away, as France has on its door step in the Languedoc Roussillon region, international and domestic wineries practicing that marketing philosophy.
As the global wine market becomes easier to enter, technological capabilities are increased, viticultural problems are overcome, the number of popular varieties are streamlined and other bilateral trading agreements are signed, marketing and the process of value adding will become the most dominant competitive advantage possessed by the winemaking nations.
The wine industry is “the only value added primary industry where marketing is involved in the total flow and the only primary industry where the production process is an integral part of the selling story,” T. Spawton (12.03.97). Hence, progressive marketing is the domain of the (trained and qualified) wine marketer, with the knowledge of the total flow and the production process. Unfortunately, many major wine companies appear to disagree with this assessment, (as the lack of wine marketing graduates on their staff testifies) obviously believing that marketers with non-specific marketing qualifications will be enough to maintain an advantage over the product orientated Old World competition.
And what will be the effect of ignoring these industry specific wine marketers produced by Australia’s academic institutes? Will there be a migration to the northern hemisphere of those graduates in much the same way as their winemaking counterparts did, to seek employment in a wine industry that at the moment desperately needs their skills? The cumulative effect of such a scenario would inevitably be a need for these qualified wine marketers in the Australian Wine Industry.