Branding Rose Wines in the Cyprus Wine Industry. Demetris Vrontis and Demetris Pavlides

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1 1 Branding Rose Wines in the Cyprus Wine Industry Demetris Vrontis and Demetris Pavlides

2 2 Professor Demetris Vrontis, PhD (Correspondence Author) Professor of Marketing Dean, School of Business, University of Nicosia 46 Makedonitissas Ave., P.O. Box 24005, 1700 Nicosia, Cyprus Tel: , Fax: and Demetris Pavlides Reservations and Sales Executive 94 Rigenis Street, PoBox 21758, 1513 Nicosia, Cyprus Tel: , Fax: Biographies : Demetris Vrontis is a Professor in Marketing and the Dean of the School of Business at the University of Nicosia, Cyprus. He is also a Visiting Teaching Faculty for Henley School of Management in the UK, a Visiting Professor for Vorarlberg University in Austria, a Visiting Research Fellow at Manchester Metropolitan University in the UK and a Visiting Fellow at Leeds Metropolitan University in the UK. His prime research interests are on wine marketing, branding, marketing planning and marketing communications, areas that he has widely published in over fifty refereed journal articles, contributed chapters and cases in books/edited books and presented papers to conferences on a global basis. Dr Vrontis is also the author of ten books, one on wine knowledge, and the rest in the areas of international marketing and marketing planning. He is also the President of the EuroMed Research Business Institute and the Founding Editor of the EuroMed Journal of Business. Demetris Pavlides is the Reservations and Sales Executive at Classic hotel in Nicosia, Cyprus. Demetris holds a BA (Hons) in International Hospitality Management from Bournemouth University, UK. During his studies, Demetris Pavlides had showed interest in the area of wine and more specifically in the process of wine tasting. His dissertation, named Approaches to Wine Tasting, was the beginning of an intensive and long-term study in this area. He is also the author of one book entitled Wine-knowledge: Everything you Need to Know, published in Cyprus in 2009.

3 3 Branding Rose Wines in the Cyprus Wine Industry Introduction Cyprus has the longest history of wine making in Europe and Europe accounts for three quarters of the world s wine production. Historical evidence establishes wine being produced in the eastern Mediterranean area between B.C. Cyprus is considered to be among the first countries to practise viticulture. Modern excavations have established that during the Hellenic (Classical) Age, there existed a wealthy and remarkable society whose prosperity seems to have originated from and depended on viticulture, wine production and wine trading. The development of Cyprus in the field of viticulture and wine-producing ended in the latter half of the 16 th century with the Turkish Ottoman occupation. During virtually this entire 300 year period, wine producing would receive little attention. A further important stage in the history of Cyprus wine took place in 1878 when British control over the island replaced the Turkish Ottoman rule and taxation changes that were enacted had the effect of kick starting the local wine making industry once again. Research Aim and Methodology This research evaluates the perceptions of local, Greek and international wine experts on the Cyprus wine industry and specifically for rose wines. This research aims through primary and secondary research to outline the problems within the rose wine industry (and not only). This will allow recommendations to be made in the areas of marketing and more specifically, in branding. The input of experts was of paramount importance here not only in understanding the problems and deficiencies evident in the market, but also in extrapolating opportunities and recommendations for the rose wine industry.

4 4 In relation to the research undertaken to local Cypriot wine experts, twenty-five in-depth interviews and four focus groups were undertaken. As far as the Greek wine experts are concerned, twenty semi structured interviews were held in Greece. For the above, qualitative research was used. Further, for research done to international experts, an questionnaire was sent and completed by 100 respondents. This was of a quantitative nature. Research Findings This research identified that the price of the Cyprus rose wine does not offer value for money. A new pricing strategy is needed to achieve customer satisfaction and loyalty. Something distinctive needs to be offered. The island's native grapes could be used to attract the adventurous consumer who is looking for something different. Overall, the respondents stated that the technology used in Cypriot wineries was suboptimal. However, there is some evidence of recent improvement. The use of modern methods of vinification has led to the production of some well balanced rose wines which are aromatic, pleasant and easy to drink. In addition, wine experts recommended that further changes need to be made in terms of: 1) concentrating on native grapes which offer optimum results; 2) focusing attention on vineyards and restricting cultivation in order to develop quality; 3) identifying and setting the right price level that will offer value for money and customer satisfaction;

5 5 4) upgrading the current wine making technology and viticulture using better marketing and promotional techniques; 5) increasing professionalism; 6) developing collective cooperation; and 7) employing professional oenologists and sommeliers. Figure 1, which follows, outlines the considerations for developing the brand in the Cyprus rose wine industry. It highlights those factors which will enhance quality development and those which relate to marketing and branding. It should be noted that these factors are interrelated, are inextricably linked and cannot easily be separated, otherwise the result will be confused and confusing. Brand building of rose wine can prove effective if issues which differentiate Cyprus as a wine producing country are promoted to consumers as competitive advantages. To begin with, the history, heritage and culture of Cyprus as a wine producing country should be emphasized in order to attract attention and receive wider acceptance from wine consumers. Secondly, Cypriot indigenous varieties can also differentiate Cyprus on the wine map and this could be used to make Cyprus unique when compared with New World wine-producing countries. Moreover, it is strongly recommended that the international acceptance, success and the recognition of Commandaria (traditional sweet wine unique to Cyprus) be used as a first step towards success. In addition, segmentation should be employed with different kinds of wine being produced for different target market audiences. Finally, as consumers appear always to be looking for something different and unique, a well planned marketing mix, could highlight different and distinctive selling propositions.

6 Capitalize on history, mythology and culture as a means for competitive advantage Marketing and Branding Development 6 Develop and promote different wines for different target audiences Differentiate by focusing on the distinct taste of local varieties Concentrate on indigenous grape varieties and when needed blend with cosmopolitan ones Develop own Know- How Share expertise and cooperate collectively with other wine producers Acquire external expertise, knowledge and know-how Restrict cultivation by producing less quantity at a higher quality Considerations for developing the Cyprus Wine Industry Use modern and technologically advanced methods of vinification Privately own vineyards or exercise control at grape producers Differentiate from nonbranded wine and convince customers that quality has improved Offer value for money Educate stakeholders in handling, storing, serving, drinking and enjoying wine Use Commandaria s international acceptance as a footstep for success Labeling and bottling should be attractive and sophisticated, and at the same time authentic and truthful Quality Development Figure 3: Developing the Cyprus Rose Wine Industry: A Summation. Integrate Marketing Communication Tools (IMC) for image development

7 Branding of rose wine is important but its effectiveness is dependent upon quality. It has to live up to its promise. Wine quality can be improved only if wine makers in Cyprus invest, develop their knowhow, acquire external expertise, and work collectively. Furthermore, stakeholders lack of wine education needs to be addressed to develop their knowledge in handling, storing, serving, drinking and enjoying wine. Cooperation among wine producers is of paramount importance. This could be in the form of establishing new associations or in the form of achieving economies of scale by sharing expertise and the costs associated with the employment of a full time oenologist and sommelier. A number of changes are being recommended that need to be implemented in order to allow branding, quality and marketing techniques to be further developed. These are in terms of: concentrating on native grapes which offer optimum results; restricting cultivation and developing quality; identifying the right price level that will offer value for money and customer satisfaction; updating the current wine making technology and viticulture; using better marketing and promotional techniques; developing know-how; increasing professionalism; forming collective cooperation; focusing attention on vineyards; obtaining professional advice and employing professional oenologists and sommeliers. There is an urgent need for active cooperation among the key actors in the industry to coordinate an industry-wide focus on quality. In relation to promotion, more attention needs to be given to educating the consumer, which involves demonstrations, wine tasting events and wine exhibitions. Provided that the quality of wine is of sufficient quality, these events will reap benefits through word of mouth, as customers tend to be loyal to brands they have tasted in the past and have

8 8 enjoyed. Other promotional tools such as sales promotion, retail displays and advertising are of lesser importance and no major investment should be made there as the costs incurred are likely only to add to overhead and reduce overall margins. Conclusions Today, even though the Cyprus wine industry is facing a number of problems, it is making significant efforts to develop its processes in grape cultivation and wine production. This research indicated that there are necessary steps that the industry stakeholders should put forward to allow the Cyprus wine industry to develop again. For this to happen, wine producers should focus on producing wine from the native/indigenous grape varieties that can help differentiate them from competing international products and at the same time take action on restricting and controlling grape cultivation. Industry efforts should attempt to update the existing levels of wine making technology and viticulture; produce better quality products; enhance collaboration with other wine producing companies and wine associations; share resources; push distributors, retailers and restaurants to distribute, store and serve wine appropriately, develop consumers wine knowledge and culture; change its pricing policies and thus offer better value for money; seek to take advantage of the history of the island as a wine producing company; capitalise on Commandaria s reputation as a footstep for international recognition, acceptance and preference and revisit their marketing and promotional techniques. Brand building can be effective if issues which differentiate Cyprus, as a rose wine producing country, are promoted to consumers as competitive advantages. Firstly, the

9 9 history, mythology and culture of Cyprus as a wine producing country, should be emphasized in order to attract the attention and receive the acceptance of wine consumers. Furthermore, Cypriot indigenous varieties can also differentiate Cyprus on the wine map and may be used as a point of competitive advantage. Branding is equally important for rose wines in Cyprus as the creation of a powerful brand can dictate high brand equity. Wine brands that have higher brand equity, have higher brand loyalty, name awareness, perceived quality and strong brand associations. High brand equity provides a company with many competitive advantages. A powerful brand enjoys a high level of consumer brand awareness, performance, quality, reputation and loyalty. Further, the brand name carries high credibility and offers the company a defense against fierce competition. The Cyprus rose wine has high potential to expand and develop a strong brand name. A strong brand name carries high credibility, loyalty, name awareness, perceived quality and a strong brand association. Subsequently, the company can then launch line and brand extensions more easily. Branding can differentiate a wine from other national and international competitors, offering a defence against competition. It seems, then, that local wine producers still have a great deal of work to undertake before they can start to enjoy the benefits of strong brands.