FINAL PROJECT
Training program: Masters Business Administration
Subject:Marketing
ENEB Business School
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BACKGROUND
Elephant is a company dedicated to the sale and distribution of wine with
the Designation of Origin Ribera del Duero. It was founded in 1999 and
since then its sales have been increasing.
Elephant (fictitious company), has a high-quality product, has won some
prizes and aims to become a reference for the younger consumers.
The company has created an online sales platform and proposes a new
sales strategy, based on the online channel to reach a wider market share
and surpass the reach of its stores to the virtual experience.
1. Analysis of the external situation.
It will be necessary to research the Spanish market about the wine
sector and an analysis of its competence. In addition, a study of
electronic commerce in Spain will be necessary.
Although many vineyards are low-yielding, Spain is a large country
geographically and has more acreage under grape cultivation than
any other country in the world. In terms of global wine production, it is
the third largest.
Castilla-La Mancha has nearly half of the country's planted acreage,
followed by Extremadura, Valencia, Castilla-Leon, Catalonia, Murcia,
and Rioja. About two-thirds of all wines produced in Spain are table
wines, with the remaining one-third consisting of high-quality wines
produced according to the European model.
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Due to the high volume of wine production, competition is a major
external issue for the region. The presence of small, medium, and
large-scale wine production in the region increases competition
significantly. Spain is also close to Italy and France, both of which are
major wine producers in the region. As a result, unless Elephant
can ensure high-quality products and explore new markets for them,
competition in their current regions may severely stifle their operations.
Red wines are slightly more popular than white wines in terms of
volume, but they are far more noticeable. Arien, Tempranillo, Bobal,
Garnacha, Monastrell, Pardina, Macabeo, and Palomino are the most
widely planted varietals. Although excellent wines are produced
throughout Spain, some of the most well-known regions include Rioja
for Tempranillo-based wines, Jerez for Sherry, the Penedes for Cava,
Ribera del Duero for Tempranillo blends, and Priorat for Garnacha-
based wines (Grenache). Spain's infrastructure is among the best in
the world when it comes to business expansion and growth, with two of
Europe's ten largest airports located in Madrid and Barcelona. The
country has 47 airports that serve 250 airlines and one of the
continent's largest railway networks. Spain has the most ratified
environmental agreements within the European Union (EU). Portfolio
investment has been a major source of foreign direct investment (FDI)
inflow into the country.
Spain's political culture includes stringent deficit-reduction policies.
While tensions have been rising due to Rajoy's government's
increased cuts in health care and education budgets, the EU has
sanctioned EUR 100 billion as a bailout package. Limited
competition has been introduced in the energy, electricity, and telecom
markets, indicating that liberalization is on track. Interest rates on
corporate loans are high in the Eurozone, causing corporate sector
instability.
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In terms of social policy, the government began reforming the rigid
labour market to make it more flexible and cost competitive. The GINI
coefficient (a measure of income inequality) of household disposable
income was 35 in 2012, making it one of the highest in the OECD. In
terms of technology, Spain has one of Europe's largest mobile markets.
Its 4G networks are well-established. The low level of innovation in
Spain is reflected in the low number of patents registered (711) in
2014, compared to 6083 and 15498 patents respectively in France
and Germany.
According to the findings, Spain has a high rate of unemployment,
which hurts economic growth. Despite its flaws, Spain has several
strong points:
✓ A good geographical location.
✓ FDI is attracted by the strategic location.
✓ A healthy tourism industry (ranked as the 2nd largest earner
worldwide after the US).
After the highest-volume year in a decade in 2018, world wine
production fell by more than 10% in 2019. Every major wine producer
saw a decrease in volume in 2019 compared to 2018, with Italy and
France down 15% and Spain down nearly 25%. Only Portugal (ten
per cent), Russia (nine per cent), and South Africa (two per cent)
saw an increase from the previous year. Nonetheless, 2018 was not as
bad as it sounds because it was an unusual year. World production
was down by just over 3% compared to the previous 5-year average,
and Italy's volume was down by about 4% in 2019. Over the last five
years, Chile has seen the most growth among the major producers,
whereas China has seen a sharp decline as a greater emphasis on
quality has taken a lot of production off the market.
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Electronic Commerce in Spain
Following WWII, and particularly after dictator Francisco Franco died in
1975, Spain quickly modernized economically. However, the
government has had to enact several austerity measures in recent
years. Spain now has one of Europe's highest unemployment rates
as a result of a large budget deficit that had to be reduced. Spain has
a population of over 47.4 million people, making it the world's ninth
most populous country. Between the ages of 25 and 54, slightly
more than 46% of the Spanish population lives. More than 28 million
Spaniards have access to the internet, according to 2011 statistics.
E-commerce Customers in Spain
In 2019, Spain had approximately 26.2 million ecommerce users.
According to a report published by E-commerce Europe in 2018,
online consumers in Spain have a clear preference when it comes to
paying for products purchased online. PayPal or a similar payment
method is the most popular (77 per cent).
Debit and credit cards (50 per cent), cash on delivery (18 per cent), and
invoices in arrears are the next most popular payment methods (6 per
cent). According to IAB Spain data, 44 per cent of Spanish Internet
users aged 16 to 55 buy online regularly. The following product
categories accounted for the majority of their purchases: fashion
(65%), travel tickets (59%), consumer electronics (55%), tickets
(54%), and books & CDs (54%). (46 per cent). According to data from
the National Observatory for Telecommunications, 18.6 million
Spaniards purchased something online in 2014.
According to data from the Instituto Nacional de Estadictica, roughly
22% of the Spanish population purchased something in the three
months leading up to a survey in 2012. In the previous year, 10.7
million Spaniards (31 per cent of the population aged 16 to 74) ordered
something online.
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The E-commerce Market in Spain
Spain was hit by a major financial crisis, but it had little impact on the
e-commerce sector. The e-commerce industry was one of the few
sectors to grow by double digits in 2011 and 2012, a trend that
continued in subsequent years. According to the Ecommerce
Foundation, ecommerce in Spain was worth nearly 28 billion euros in
2018.
Many Spaniards shop on international websites. However, in recent
years, the total amount of purchases made on foreign online stores
has been lower than on domestic sites. E-commerce isn't that big in
Spain in terms of percentage. It only accounts for 3% of total retail
sales.
2. Analysis of the internal situation.
Identify the target audience and the different customer
segments and their positioning.
SWOT a n a l y s i s to identify the weaknesses and strengths of
t h e company and the opportunities and threats from abroad.
According to the National Statistics Institute, the largest Spanish-age
population is around 38 million people, with about 60% of them
being wine drinkers. According to EAE Business School studies,
ordinary consumers account for 80% of this amount.
According to research, red wine is preferred by nearly 73 per cent of
Spanish wine drinkers, followed by white wine at 13 per cent and
rose wine at 6.4 per cent. The difference in consumption between men
and women is 57 per cent for males and 43 per cent for females, with
26 per cent aged 18 to 34, 36 per cent.
aged 35 to 54, and the remaining 38 per cent aged over 54.
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Given the foregoing data and the Project's primary goal of targeting
a young audience, the following has been set for Elephant:
Men and women between the ages of 25 and 45 with a
revenue per centage that was somewhere between low and
high. They enjoy experimenting not only with traditional wines
but also with the most recent trends in order to expand their
wine culture. They consider wine to be one of their favorite
beverages for both meals and leisure. They prefer red wines
because they are considered an upgrade, and they consider
the price because it demonstrates a level of trust in the product's
quality. These individuals gather information from wine-related
magazines and web pages to use it in their conversations and
when selecting wines for events or consumption.
In terms of the digital environment, the chosen group prefers
to obtain information and provide feedback on their
experiences through social media platforms such as Facebook,
Instagram, and Twitter. This will be ideal for Elephant's
marketing strategy.
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3. Specify the goals aligned with the business proposal to expand to a
new sales channel.
In most cases, developing and implementing a solid strategy plan is
the most important activity a company can undertake. For the
organization to achieve consistent revenue streams, such a plan is
also necessary. The company has developed an online sales platform
and proposes a new sales strategy based on the online channel to
expand its market share and expand its virtual experience beyond the
reach of its physical stores.
Elephant used to be completely reliant on the traditional sales system
of using retail stores. However, the company will need to invest in
additional human resources t o oversee the a d d i t i o n a l distribution
requirements t h a t will be required as a result of the new online
platform. The proposal to expand into new sales channels aims to
accomplish several objectives, including:
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➢ Develop a campaign that stands out from the competition in
terms of innovation and customer service.
➢ For the coming year, increase existing customer profit by 15%.
➢ During the year, increase market share by 10%.
➢ Create a clear publication schedule for our website that focuses
on content to increase engagement.
➢ To promote flavours and online sales, increase the number of
product testing opportunities in chain stores for both current and
potential customers.
➢ A 6-month campaign to increase website traffic using Google
Ads, Facebook Instagram, and other online platforms.
4. Prepare and select the strategies that will serve as a route for
implementing an online business in the market. You must include the
different tactics of the marketing mix and concoct the action plan to
follow.
Customers are primarily concerned with a product's ability to reach
them and meet their various needs. Given the rational nature of
customers, it's also crucial to think about the prices that are set for
the products. Elephant's target marketing strategies for launching the
online business will be centered on ensuring that each of the four Ps
contributes to the perfect marketing mix. Customers have come to
expect high-quality products from the company. As a result, the
company's quality will be a selling point. Customers can make
purchases and receive their orders from the comfort of their own homes
thanks to the platform. Elephant intends to improve distribution
systems by implementing the following measures.
Product
Due to the quality of our product has already been established, there
will be no changes to the manufacturing process or the taste of our
red and white wines. Instead, we will concentrate solely on our
packaging and advertising to be recognized by the end customer as a
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wise choice that is environmentally conscious. Customers who spend
more than 100 euros will receive a pair of limited-edition glasses.
The company's logo and slogan will be engraved on these glasses.
Price
The price will be calculated based on the quantity ordered. There
will be a standard price per bottle based on the age and type of wine,
but discounts will be available. If you buy in bulk, you'll get a discount
on shipping, depending on your location and delivery size. Customers
will receive a bottle of red wine with the purchase of two bottles of
white wines and a bottle of white wine with the purchase of two
bottles of red wines at no additional cost during the first month of our
relaunch of the online store. We will have a 10% reduction in red wines
in the second month.
Promotion
We will create a special, trained team of online marketers to reach
the target audience because the main source of promotion in our
campaign will be social networks, particularly Facebook and
Instagram, which will focus directly on online sales. They will run
social media campaigns offering discounts, sweepstakes, and travel,
as well as small prizes and discounts for customers who post photos
of our wines on social media and tag the company. Special hashtags
would be created as well. Influencers will also be used to promote our
products by posting pictures of them using them.
Ultimately, we'll take part in large-scale events as organizers or
sponsors. Fashion shows, concerts, and stand-up comedy are
examples of these types of events. Our online store will also be
promoted on billboards, buses, and trucks. Place Given the foregoing,
our website will serve as the primary sales and purchasing location.
We'll create a new page that allows for easy navigation and secure
shopping. We will include weekly articles about wine consumption,
history, tips, and preparations to increase traffic. A competition with a
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prize will be held to elect the winner as the picture on YouTube to
motivate company employees. This person will produce weekly high-
quality videos that show our vineyards,
factories, employees at work, serving tips for our wines, and
various situations that engage our target audience.
5. Propose a detailed schedule and timing for each action.
Elephant Marketing Schedule
Action Jun Jul Aug Sep Oct Nov De Jan Feb Mar
t c
Customized wine
glass promotion for
delivery with orders
exceeding €100
Employee
Competition
Discount Offers
Maintenance of
Webpage
Online Campaign
Travel raffles
Newsletter (Weekly)
6. Write a detailed elaboration of the budget of the
necessary actions to implement the proposal.
included.
The competition for the best employee 1500
youtuber is
fierce. 6000
Competition for employee launch
advertisements. 3000
In the case of red wine, there is a 10%
discount. 6500
Maintenance of a website and an online
campaign
Sweepstakes - The winner will receive a
three-day, two-night trip for two to 5000
Elephant Vineyard and
1000
influencers in the media
35000
Quarterly Activities
2500
Website with articles Page 11
TOTAL 65000
Elephant’s Budget
Details Cost €
For orders over 100 €, production and distribution of
2 customised wine glasses with company logo 450
are. 0
7. Define which measurement and control methods will be
used to determine whether the proposed actions and activities are
beneficial to the company or not. Justify the use of these tools.
It's crucial to determine what needs to be measured before deciding
on measurement and control methods for the project. The key business
drivers will be the focus of the measurement decision. The marketing
plan's implementation is set to begin on July 1, 2022, and the above-
mentioned activity schedule will be followed. A committee made up
of the following people will oversee the activities and ensure that the
goals are met:
✓ Head of Logistics Division
✓ Head of Accounts and Finance
✓ Marketing Manager
✓ Sales Manager
✓ Community Manager
This assessment committee will meet biweekly to verify that the activities
were completed on time, that they were implemented, and that the
results were modified if necessary. If an external factor prevents the execution
of the strategy and the achievement of marketing objectives, the
committee should take the necessary steps to correct the dates or purpose
of any activity. They should also assist with the marketing strategy.
These meetings should result in a report to general management that
includes online growth indicators, sales through various channels, response
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time to requests, website interactions, prints online campaign numbers of
unique users, requests, and complaints. The committee will also create a
set of key performance indicators to assess the campaign's effectiveness.
Subsequently, the employee continues to be the most valuable resource in
the company. As a result, as the company grows, so will the number of
employees. In this case, the company must fully comprehend how the
employees are performing to ensure that they are providing high-quality
services to the customers. Meetings and appraisals, as well as qualitative
measurement of employee performance, are some of the formal ways that
organizations can measure and control employee performance.
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