Luxury Brands and Customer Engagement: Lessons for small Australian wine producers

Description

Australia’s small winemakers are, on the whole, highly competent at translating the abundant natural capital of Australian wine country into high quality wine. Australian winemakers excel at wine production. The Australian industry has been less successful at inspiring the customer to pay a premium for the quality of its product.

In recent times two opportunities have emerged for small winemakers to improve profitability and better access customers:

• “Premiumisation”, which relies on lifting desirability and consequently price in both domestic and export markets.
• Increasing the percentage of wine sold directly to the consumer and retaining margin otherwise captured by wholesalers and retailers, primarily in the domestic market.

The author identified that prestige or luxury brands are able to command price premiums by rousing customer desire. Through visiting many of these brands across different industries the aim of this is to observe whether any of the techniques utilised by luxury brands might be transferable to small winemakers and other primary producers.

The report offers commentary as to the common characteristics of luxury brands. These are typically businesses that offer products, which, like wine, exist “beyond necessity” (Csaba, 2008). Importantly, the author concludes that it is not necessary to be a luxury brand in order to adopt some of the techniques and concepts that drive the success of those businesses.