Business and Marketing Plan of Macquarie Wine Company

This report deals with the business and marketing plan of wine from the firm Macquarie Wine Company which is a new entrant in the wine industry of Australia. The entire marketing strategy including industry analysis, competition identification, and determination of target market and promotional plans are formulated and described in detail in this report.

Running head: ENTREPRENEURSHIP
Entrepreneurship
Name of the Student
Name of the University
Author Note

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Executive Summary
This report deals with the business and marketing plan of wine from the firm Macquarie
Wine Company which is a new entrant in the wine industry of Australia. Australia being the
thirty ninth most expensive wine consuming countries of the world, is a good option for
starting off the firm even though of late this industry has been going through downturns
economically. The entire marketing strategy including industry analysis, competition
identification, and determination of target market and promotional plans are formulated and
described in detail in this report. The potential risks are ways to avoid them are also
mentioned.
Table of Content

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s
Background of the Business.......................................................................................................4
Mission.......................................................................................................................................5
Product offering.........................................................................................................................5
Market Analysis.........................................................................................................................5
a) Industry analysis................................................................................................................6
b) Competition.......................................................................................................................7
Primary Target market...............................................................................................................7
Marketing...................................................................................................................................8
Financial Plan...........................................................................................................................10
Critical risks.............................................................................................................................17
References................................................................................................................................18
Appendix 1...............................................................................................................................20
Appendix 2...............................................................................................................................21

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Background of the Business
Australia has the biggest individual wine market in all over the word. The companies
have growing business opportunities in wine market and that is the reason this is the good
start-up business for the any entrepreneur. Australia import 95% of wine per year. The new
business venture that will be processed by the entrepreneur is based on the wine
manufacturing company. The name of the company will be Macquarie Wine Company. The
company will be situated at the bank of the Macquarie River thus the name of the company
will be Macquarie Wine Company. The quality of the wine is the main USP of the company.
The sweetness, acidity, tannin, alcohol percentage and the body of the wine is unique and it
will counted as one of the best company in Australia. The sales representatives of the
company will be well-trained and they have good market knowledge as well. The company
can beat the high profile international brands as the style and innovativeness in case of
packaging and delivering the wine is unique and special. The company will have only local
branches as the company has just started their business and they need to concentrate on the
market acceleration The Company will enrich their business by the promotional activity and
by delivering their logistic process strong. In case of the national and international brands of
wines, the quality of the wine and their service facility is important and they are legally
authorised by the Australian legislation. Latest market selling process and branding portfolio
is important in that case and company will rise quickly in the Australian wine market. The
manufacturing as well as the operational units will be situated in Melbourne. In the beginning
the products will be sold solely in Australia and then depending upon the growth statistics,
the firm will expand the sale of its products internationally.

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Mission
The mission of the company is to excel in their business and gain enough reputation
that will help in achieving 3% market enhancement in one year. The mission of the company
is also to develop their international market after a year by aligning with other companies in
different nations and grab the initial market.
Product offering
The product offering of any firm caters to the briefing of the product and the types of
the products that the firm is potentially planning to manufacture or produce (Waheed et al.
2018). The products offered by the company will be Dow’s Port, Marquis la de tour,
Piaramimma, Ackerman, Vilarnau, Wise Guys, Mataora, Crossroads and Redman. All of
these products will be manufactured, marketed and sold by Macquarie Wine Company all
across Melbourne as well as other important cities in Australia. The firm will be producing
different types and qualities of wine like Riesling, Pinot Noir, Chardonnay, Sauvignon blanc,
Syrah, Merlot and Cabernet sauvignon. Further the firm will also be producing some
authentic and customized qualities and types of wine which will exclusively be produced and
will be available at only a few stores across the country.
Market Analysis
Market analysis of any industry or firm tends to study the market in which the firm
will be operating. This pertains to the total existing size of the market and the value of the
product in the market or the industry (Bogue, Collins and Troy 2016). It basically helps in
analysing the different segments of the market and hence in determining the target market or
target customer group for a particular firm. This is done essentially by understanding the
demographics and tastes and preferences of the customer’s existing for the industry at the

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moment (Burns, Bush and Sinha 2014). Further, it pertains to the recognition of the different
types and number of competitors already existing in the market and the potential entrants to
the industry which might be potential sources of threat to the upcoming firm. To understand
the patterns existing in the wine market in Australia and the economic condition of the
industry the market analysis is carried out in this report with the help of industry analysis and
competition analysis.
a) Industry analysis
The wine industry in Australia currently is facing adverse conditions and hence
is undergoing a downturn for a prolonged period of time now (Greene et al. 2018). This
is because of a lot of reasons including the pattern of sales across the world and the variance
of the same with the sales patterns in Australia (Li 2015). It is also increasing because of the
changing demand patterns of the customers with the advent of so many options of liquors
at comparatively cheaper costs. The brand value of the already existing biggest brands have
also been adversely affected because of the poor quality of products and lack of the
improvisation of options and quality of wine produced and provided within the country
(Taylor and Taylor 2018). This economic downturn in the wine industry is also attributable to
the lack of proper research and development to a large extent. Further, the phenomenon of
weather fluctuations has also been considered an important reason behind the discrepancies
in the total quantity demanded and the total quantity supplied. It is also being asserted that
around 70% of the wine produced domestically within Australia is through uneconomic
means (Wfa.org.au. 2018). It has also been reported that the wine industry in Australia will
only be able to recover if the authorities in the country are able to formulate new methods of
research and production which will be faster and easier if there are new firms in the market
and through the building of an effective tax structure for this industry. The wine industry in
Australia contributes around $40 billion annually to the economy in Australia. It has

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also been reported that the wine industry generates a total of around 172,736 full time
and part time jobs in the country.
b) Competition
Due to the lack of proper research and development as per the changing demands of
the customers, the wine industry as mentioned before is currently undergoing a prolonged
downfall and so there is not much competition currently existing in the market (Morrison and
Rabellotti 2017). The existing competition is not very strong in intensity as there are only a
few strong brands existing in the wine markets in Australia. However, the few brands existing
in the country have immensely high brand values and have been operating for many years
now. These include Accolade Wines, Treasury Wine Estates, Australian Vintage and
Yalumba. Hence, it s very important for the upcoming firm, that is, Macquarie Wine
Company to completely diversify the types of wine produced and provide new qualities and
types of wine with new tastes (Galbreath 2016). The firm will effectively have to install and
use the best forms of technology including smart products and devices to understand the
needs and the changing demand patterns of the customers to remain ahead of its few
competitors.
Primary Target market
The Australian wine market for this firm will be the immediate local market within
the boundaries of Australia for the first year as has been discussed before. Like the
competitors, it is essential for this firm to first enter the local market and cater to the current
trends and patterns of demands of the local customers. For this it is very essential for the firm
to carry out extensive research and see which part of the population’s demands are being
catered to the least by the already existing local wine producing firms in the country. Further,
as the firm is new to the market and there is already a situation of existing downturn in the

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wine industry, the firm should keep the prices low to attract the customers from all economic
cohorts within the country. The average price of each bottle will hence be kept below the
average price existing for a wine bottle in the country. Demographically, the target market
will consist of a cohort of customers whose age varies in between the youth and the old. The
products of different types will vary in the composition so that individuals of all ages can
consume the product without worrying about the health conditions and the firm will also try
to produce healthy combinations of different types of wines to expand the target market.
Reports assert that Australia is the thirty-ninth largest expensive country in terms of wine
consumption. Hence, most inevitably the firm will target a higher level of income generating
individuals as the target market for the next financial year. This will depend upon the sales
and the revenue generation levels depending upon the initial target market this year.
Marketing
The most important step for a marketing plan is the marketing techniques and
strategies used. It helps in explaining the product and the added features that are aligned to
the entire marketing plan. This step consists of clearly mentioning the four factors of product,
price, place and promotion. The subsequent part of the report focuses on identifying these
elements with respect to the company under consideration which is Macquarie Wine
Company.
a) Product – The product under consideration in this case as mentioned earlier is wine and
different types of wine already existing and new customised versions so that the customers
are provided with new products and their changing demand patterns are in turn catered to.
The types of wine that will be manufactured and produced by the firm include Riesling, Pinot
Noir, Chardonnay, Sauvignon blanc, Syrah, Merlot and Cabernet sauvignon and the products
will be available under names of Dow’s Port, Marquis la de tour, Piaramimma, Ackerman,

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Vilarnau, Wise Guys, Mataora, Crossroads and Redman. The firm shall also produce further,
personalized versions of wines. The wine produced and made available will be of authentic
and high quality which will be available for consumption by individuals varying in the age
group ranging from the youth to the old. Further, later on the (18 years to 81 years on an
average) firm will also be producing specialised wine of a healthy composition.
b) Pricing
The average cost of bottled wine in Australia is currently at a level of around $21.59
for a 750 ml bottle. The prices of all bottles of wine produced by the firm will range in
between $10 and $25 dollars depending on the quality of wine and the size of the bottle. This
will ensure broadening of the consumer base from the very beginning.
c) Distribution
The product will be manufactured particularly in Melbourne but will be distributed
across all local markets of Australia for the first year. Following this the firm will try to
expand to other countries around the world depending upon the response of the consumers in
the first year.
d) Promotion
The promotional techniques used by the firm will mostly be digitalised using social
media platforms. This will ensure that the firm is able to reach out to the maximum number
of individuals in the target market and the cost incurred will also be substantially less
compared to other methods of promotion (Appendix 2). For ensuring this, pages and online
promotional events will be carried through the use of platforms like Facebook as well as
Instagram (Appendix 2). The advertisement of the brand will also be done by providing
discount options and partnering with ongoing events in different cities to make people aware
of the upcoming brand.

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Financial Plan
Sources of Capital
Owners' Investment (name & % ownership)
Your name & % ownership $
100,000
Other Investor
-
Other Investor
-
Other Investor
-
Total Investment $
100,000
Bank Loans
Bank 1 $
100,000
Bank 2
-
Bank 3
-
Bank 4
-
Total Bank Loans $
100,000

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Other Loans
Source 1 $
-
Source 2
-
Total Other Loans $
-
Summary Statement
Sources of Capital
Owners' and Other Investments $
100,000
Bank Loans 100,00
0
Other Loans
-
Total Source of Funds $
200,000
Startup Expenses
Bldgs / Real Estate $
60,000
Leasehold Improvements 6,00
0
Capital Equipment 71,00

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0
Location / Admin Expenses 9,50
0
Opening Inventory
-
Advertising / Promo Expenses 6,00
0
Other Expenses 50,00
0
Total Startup Expenses $
602,500
Startup Expenses
Buildings / Real Estate
Purchase $
20,000
Construction $
20,000
Remodeling $
20,000
Other
-
Total Buildings and R / E $
60,000

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Leasehold Improvements
Item 1 $
1,500
Item 2 $
1,500
Item 3 $
1,500
Item 4 $
1,500
Total L / H Improvements $
6,000
Capital Equipment List
Furniture $
20,000
Equipment $
20,000
Fixtures $
1,000
Machinery $
25,000
Other $
5,000
Total Capital Equipment $
71,000
Location and Admin Expenses

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Rental $
-
Utility Deposits 3,50
0
Legal and Accounting Fees 2,50
0
Prepaid Insurance 1,50
0
Pre-opening Salaries 1,50
0
Other 50
0
Total Location and Admin Expenses $
9,500
Opening Inventory
Category 1 $
1,500
Category 2 $
2,500
Category 3 $
2,560
Category 4 $
1,500
Category 5 $
1,500
Total Inventory $

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9,560
Advertising and Promotional Expenses
Advertising $
1,500
Signage $
1,500
Printing $
1,500
Travel & Entertainment $
1,500
Other / Additional categories
-
Total Adv and Promo expenses $
6,000
Payroll and payroll taxes
Expense 1 $
25,000
Expense 2 25,00
0
Total Payroll and payroll taxes $
50,000
Break even

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Fixed Expenses
Bldgs / Real Estate $
60,000
Leasehold Improvements 6,00
0
Capital Equipment 71,00
0
Location / Admin Expenses 9,50
0
Opening Inventory
-
Advertising / Promo Expenses 6,00
0
Other Expenses 50,00
0
Total Fixed Expenses $
202,500
Variable Expenses
Inventory or Materials 0.0
Direct labor (includes payroll taxes) 0.0
Other expenses 0.0
Other expenses 0.0
Salaries (includes payroll taxes) 0.0
Supplies 0.0
Total Variable Expenses 0%
Breakeven Sales level = 202500

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Profit and loss
Year 1
Gross revenue $3,563,000
Cost of goods sold $175,000
Gross margin $3,388,000
Other revenue [source] $0
Interest income $0
Total revenue $3,388,000
Operating expenses
Sales and marketing $6,000
Payroll and payroll taxes $50,000
Depreciation $27,400
Maintenance, repair, and overhaul $0
Total operating expenses $83,400
Operating income $3,304,600
Interest expense on long-term debt $0
Operating income before other items $3,304,600
Loss (gain) on sale of assets $0
Other unusual expenses (income) $0
Earnings before taxes $3,304,600
Taxes on income 30% $991,380
Net income (loss) $2,313,220
Critical risks
The risks related to the initiation and market entrance in the wine industry in Australia is high
as the market is undergoing a very slow transition from the incessant periods of economic

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down fall. However, if the pricing and promotional techniques mentioned herein are used and
implemented the risks can be avoided up to a large extent (Woodfield and Husted 2017).
Further, the absence of a lot of competition in the wine industry is also an added advantage of
the critical risks. The only risk existing is catering to the strict tax system existing in the
country. However, proper usage of resources through effective channelizing and reinvestment
of earned profits can help in avoiding this risk as well.

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References
Bogue, J., Collins, O. and Troy, A.J., 2016. Market analysis and concept development of
functional foods. In Developing new functional food and nutraceutical products (pp. 29-45).
Bruwer, J., Lockshin, L., Saliba, A. and Hirche, M., 2015. The cellar door as a catalyst for
wine consumption and multiplier of sales in the Australian wine market.
Burns, A.C., Bush, R.F. and Sinha, N., 2014. Marketing research (Vol. 7). Harlow: Pearson.
Crabb, A., 2016. Wine export: Impact of the'Brexit'on Australian wine exports. Wine &
Viticulture Journal, 31(3), p.73.
Galbreath, J., 2016. Exploratory study of climate change innovations in wine regions in
Australia. Regional Studies, 50(11), pp.1903-1918.
Godoy, J. and Téllez, D., 2017. Mission Power and Firm Financial Performance.
Greene, R., Gibson, R., Fogarty, P., Strong, C., Grant, C. and Freudenberger, D., 2018.
Aeolian dust in vineyard soils in Australia and New Zealand: how their properties may
influence wine quality. Insights on the paradigms applied for mineral exploration in deeply
weathered landscapes.
Johnson, T.E. and Bastian, S.E., 2015. A fine wine instrument–an alternative for segmenting
the Australian wine market. International Journal of Wine Business Research, 27(3), pp.182-
202.
Morrison, A. and Rabellotti, R., 2017. Gradual catch up and enduring leadership in the global
wine industry. Research Policy, 46(2), pp.417-430.
Taylor, S. and Taylor, M., 2018. The Aroma of Opportunity: The Potential of Wine
Geographical Indications in the Comprehensive Economic Cooperation Agreement.

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Waheed, A., Khan, S.Z., Arshad, S., Rafique, K. and Laeeq, M., 2018. How Market
Orientation Helps to Gain Competitive Advantages in New Product Offering. IJAMEE.
Wfa.org.au. (2018). WFA - Winemakers' Federation of Australia. [online] Available at:
https://www.wfa.org.au/ [Accessed 17 Sep. 2018].
Woodfield, P. and Husted, K., 2017. Intergenerational knowledge sharing in family firms:
Case-based evidence from the New Zealand wine industry. Journal of Family Business
Strategy, 8(1), pp.57-69.

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Appendix 1
Logo

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Appendix 2
Promotional Advertisement
Follow us on
DELIVER
BEST QUALITY WINE
ENJOY YOUR DRINK AT AU$10
MACQUARIE WINE COMPANY
159, Pirie Street, Adelaide SA 5000
Australia.
Phone- [phone]