DFJ Vinhos: Wines in China, A promising but difficult market

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Different wines for different consumers Positioning wines for the right consumers is always a major challenge. Presently, DFJ Vinhos’ portfolio consists of 96 wines and 30 brands, which are divided into 7 market segments with distinct consumer objectives. The company´s most usual consumer is in the medium-end segment, investing in wines with a good price/quality ratio. The first four ranges of wine [see table below], although having distinct objectives, ended up being for the same consumer in terms of purchasing power, not varying significantly in the price range. However, José Neiva Correia was concerned in submitting wines for various consumer targets, for instance with “Pink Elephant” and “Patamar”, both in the same segment. The first wine is for spicy food, mainly for the English market, and the second wine is for a more varied range of occasions and goes well with Portuguese food. Naturally to a lesser extent, both in number of wines as in quantity produced, José Neiva Correia presented ranges for the finest segments or the most special occasions. In terms of exclusivity, the “Icon” was highly emphasized, which was produced to celebrate his 30 years as a winemaker. The “ex works” price table 8 of DFJ Vinhos varied depending on the business itself and the strategy that José Neiva Correia had for each Market. For instance, when working with big retailers the price was established by packages, sacrificing margins and betting on turnover of orders. Currently, the “Basic” and “Standard” segment represent approximately 85% of the company´s market. Euro ex-works prices by segment Market Segment Brands Nº of wines Objective Average price Basic Bigode, Pomar, Coreto ”Joker”, Portada 12 The perfect day by day 2,05€ Standard Segada, Vega, Monte Alentejano, Paxis, Fonte do Beco, Bela Fonte, Pedras do Monte, Alta Corte, Cartada, Vale de Rosas 26 High quality day by day 2,6€ 8 Table “ex works”: Wine prices “at the company´s door” 10
Premium Medium Sweet collection Premium collection Monovarietel Premium collection Bivarietal Icon Source: Company data – Case writer Casa do Lago, Patamar, Manta Preta, Storks Landing, Point West, Escada, Esplanada, Pink Elephant, Two Ravens Portada, Coreto “Music”, Vale de rosas, Storks Landing, Bigode 17 Grand´Art 16 DFJ 5 Francos, Consensos Escada, Quinta do Rocio High quality Special occasions 2,9€ 10 Sensations 2,35€ 10 Best grape selection (Monovarietal) Best Grape selection (Bivarietal) Best selection special occasions 5,6€ 4,8€ 17,2€ Investing in marketing and promotion has always been a priority for the company. Through strategically chosen magazines and fairs they are in a better position to reach their clients. For instance, for the Chinese market, prizes from the USA and the “China Wine Awards” are of greater importance. Since, for the wine industry, visibility and recognition are essential, and the “brand Portugal” doesn´t speak by itself for many countries, about 80% to 90% of their investments in Marketing were in the United Kingdom, the United States of America, and Germany. All with powerful fairs and magazines, which have a spillover effect on the perceptions of other consumer markets. By the end of 2012 Dfj Vinhos was able to acquire a wide range of awards in different segments with a total of 180 awards for that specific year. Source: DFJ Vinhos´s website: Awards by category 11
Page 1 and 2: DFJ Vinhos: Wines in China, A promi
Page 3 and 4: Acknowledgements Firstly, I would l
Page 5 and 6: Exhibit 11: Interview to Alberto Ca
Page 7 and 8: As CEO of DFJ Vinhos he has been de
Page 9: Slovakia, and Bulgaria; in Africa:
Page 13 and 14: Middle class is mostly concentrated
Page 15 and 16: Furthermore, more than being a fine
Page 17 and 18: The margins applied by the major su
Page 19 and 20: 2 nd scenario - Upper segment With
Page 21 and 22: Exhibits Exhibit 1 - Wine market di
Page 23 and 24: Exhibit 4 - Wine imports in China W
Page 25 and 26: Exhibit 7 - Chinese consumer´ crit
Page 27 and 28: Exhibit 10: Relative weight of the
Page 29 and 30: 40% to 50% from distributer to stor
Page 31 and 32: First, one should stress that, as t
Page 33 and 34: 5. Use of the Case The case study
Page 35 and 36: iii. Chinese Wine Market: The Chine
Page 37 and 38: The company’s core business is wi
Page 39 and 40: Recognized Winemaker: José Neiva C
Page 41 and 42: 3) Describe the current attractiven
Page 43 and 44: the middle/high end wine, which is
Page 45 and 46: annually. The rising middle class w
Page 47 and 48: Culture has an enormous preponderan
Page 49 and 50: They buy the product to fill a soci
Page 51 and 52: Exhibit TN TN Exhibit 1 - Porter´s
Page 53: Bibliography Source: AICEP Portuga

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