Stone Creek WineryStone Creek WineryBringing a taste of California to Bringing a taste of California to

JapanJapanPreliminary Marketing Plan

May 14th, 2009

Pattie Chen Jim Folger

Alexis KushnerAlesandro LicopoliChristopher Serio

Unsolicited inquiry received from Japan.Large untapped Japanese market.Japan has a cultural appreciation for alcohol. Target audience is young, Japanese females.

40% of females have at least one glass of wine per month. Women are more conscious of western trends.

Marketing ObjectivesMarketing Objectives

Modifying the product to become more Japanese would counteract the interest in California wine. Packaging is essential. Labels must be meticulously placed, good attention to detail.

“Japan Packaging Institute, has been promoting the rationalization of production and distribution as well as a consumption through improvement and elevation of the packaging technique and thereby contributing to the progress of Japan’s economy.”

Product AdaptationProduct Adaptation

Promotion MixPromotion Mix Objectives:

To generate the attention of consumers To build a strong brand name To create consumer demand for our wine

Message: “Stone Creek wines are crafted from quality grapes grown in the Lodi,

California wine region” Promoting 2 attractive core components (Design Features):

Quality of grapes: The “western-ness” of California Making process: Wine are produced in tradition

Strategy: Push: Educational materials to the distribution chain Pull (Long-term): 1.Advertising 2.Trade show 3.Sponsorship 4.Sales promotion

Pull Strategy-1: AdvertisingPull Strategy-1: Advertising

Work with the Japanese distributor, Smile CorporationUtilize pre-existing distribution channelsSmile Corporation helps implement Japanese advertising campaigns by using:

1. Print Ads: Early adapters and innovators Magazine, Newspaper, Menu Inserts

2. Web: Targeting, Database, Effective Direct Mail, Banner Ads, Official website, Keyword search

3. Outdoor: Billboards for branding

Pull Strategy-2:Pull Strategy-2:Trade Fairs and Exhibitions Trade Fairs and Exhibitions

Increase awareness of our winesEncourage trialMeet with trade organizations and consumers

Pull Strategy-3: SponsorshipPull Strategy-3: Sponsorship

Japanese drama shootingExpose our wine bottle and brand name to our target audienceFashion show events by brandsAssociate Stone Creek with celebrity and established quality lifestyle brands

Pull Strategy-4: Sales Pull Strategy-4: Sales PromotionPromotion

To distributors: Promotion for the order of certain amount of cases

To customers: Free tasting events Mail Coupons

Request distributor to fill out the standard distributor questionnaireCreate a long-term relationship with the distributorPrepare contingency plans should this relationship not last given Stone Creek’s commitment to JapanPrepare for possibility of being contacted by a competing Japanese distributor

Channels of DistributionChannels of Distribution

Cost-Plus approach - $50/case. $35 + 40% mark up.

Invaluable to Stone Creeks strategic mix. Shipment is not just excess inventory.

Advantage of working with a distributor. Control and minimal investment for entry.

Current strategy allows for easy adjustments.

Initial Pricing StrategyInitial Pricing Strategy

Tariffs and liquor tax laws. $1.95 per bottle.

Japanese recycling regulations. Inflation rates in the United States and Japan. Exchange rate fluctuations.

Price EscalationPrice Escalation

Initial strategy - Irrevocable Letter of Credit. After tariffs, taxes, mark-ups - $17-18 per bottle.

Future transactions Full-Cost pricing strategy.

Foreign currency transactions. Protective hedging and currency repatriation.

Future business resource requirements.

Future Pricing StrategyFuture Pricing Strategy

Entice our prospective buyer Set a positive tone for future relationship Relevant technical details Offer Free Advertising Possible future discount Subtlety hint at finding a distributor Questionnaire

Fax Offer - key pointsFax Offer - key points

Total price All applicable shipping details Payment terms Letter of Credit Conditions Letter of Credit Documents

Proforma Invoice – key Proforma Invoice – key pointspoints

Excellent growth opportunity for Stone Creek. Importance of international business.

Minimal business and marketing investment. This has room to grow as relationships develop. Marketing channels and revenue steams exist.

There is no downside to Stone Creek moving into the Japanese wine market.

ConclusionConclusion

Questions?Questions?