AAA Wine/Spirits Marketing Plan – AAA Wine/Spirits Expansion Table of Contents Executive Summary4 Company Description5 Vision, Mission, Beliefs and Values 6 Core Competencies7 Situation Analysis9 Competitors11 Target Market12 Action Plan13 The Marketing Mix14 Product Strategy15 Distribution Strategy15 Promotion Strategy16 Pricing Strategy18 Customer and Supplier Relationship Management18 Budget and Monitoring19 Summary and Conclusion21 List of References23 Table of Figures / Charts
Action Plan14 Invoice Sales $14 First Year Budget 19 EXECUTIVE SUMMARY AAA Wine/Spirits vision is to be the leading distributor of beverage alcohol and create superior value for all tiers of the industry. We have achieved this vision by embracing a mission of providing superior business solutions that drive growth and value for customers and suppliers alike through our national scale, state-level share, local market intelligence and brand-building expertise.
In backing this mission and vision with deeds, AAA has invested heavily in its people, its operations, and its technological capabilities, all of which add value to the three-tier distribution system—a legal system under which wine, spirits and beer pass from the manufacturer/supplier (first tier) to the distributor (second tier) and on to either the retailer or restaurateur (third tier). AAA is committed to customer service as well as performing at the highest levels of professionalism and marketing creativity.
Having successfully established its wine and spirits distribution business in 10 States, AAA is now looking to initiate operations in California. Beginning in March 2011, AAA will offer statewide distribution of wine and spirits merchandise based on an exclusive distribution contract with suppliers such as XXX Spirits, YYY Wines and ZZZ USA. Distribution operations will be initiated from a state-of-the-art warehouse in San Diego, California with a sales office in neighboring San Francisco. AAA will leverage its reputation for successfully building brands and romoting premium wine and spirits brands to secure a major share of the California wine and spirits distribution market. From a marketing perspective, AAA will use its tried and tested strategy of promoting On-Premise sales to drive sales for Off-Premise customers. AAA will hire and train its sales staff in California to be the best-in-industry with a “Most feet on the Street” guarantee, promising maximized brand exposure. Integrated Marketing Communications will be used to first create awareness of the products and build interest in the benefits provided by AAA Wine/Spirits.
A mix of traditional and customized marketing techniques like E-selling, direct one-on-one marketing, marketing programs and promotions will be used to communicate AAA product and value offering. Competitive high/low pricing with appropriate discounting will be employed to penetrate and dominate the California wine and spirits market. Customer Loyalty Rewards programs and other incentives will be offered to build and strengthen its relationships with its customers in California.
A successful launch of AAA’s distribution business in California is projected to bring in invoice sales of approximately $118 Million for the year 2011 and is expected to break even in the third quarter of 2012. AAA expects to achieve a yearly goal of 20% increase in invoice sales. Monthly and quarterly sales growth targets will be tracked and adjustments will be made to the marketing and promotion strategies as needed. The ultimate goal for AAA Wine/Spirits is to establish itself as the No. choice for wine and spirits suppliers and to be the one-stop-shop for wine and spirits customers in the State of California. COMPANY DESCRIPTION Since its founding in 1997, AAA Wine/Spirits Inc. has grown to be a nationally recognized wine and spirits distributor known for its historic commitment to delivering the highest standards of customer service and creative marketing programs and partnerships. The company is also known for its best-in-industry professional and well-trained sales, operational and support staff. AAA is also justly respected for its deeply held belief in he importance of giving back to the communities it operates in and for being a socially responsible corporate citizen and for making generous contributions to national, state and local charitable organizations. Today, AAA operates in 15 states, including its original Florida market, where its corporate headquarters is located in Orlando. Pursuing a determined strategy to expand through internal growth as well as through the acquisition of established wholesalers, AAA expanded its Florida operations into a number of states and is now looking to grow in California.
VISION, MISSION, BELIEFS and Values Corporate Vision: To be the leading distributor of beverage alcohol while creating superior value for all tiers of the industry. Mission: Providing superior business solutions that drive growth and value for customers and suppliers alike through our national scale, state-level share, local market intelligence and brand-building expertise. Beliefs and Values: Our people are our most fundamental resource. We recognize that employee contributions through teamwork and empowerment are critical to the success of the company.
Our goal is to provide a positive environment for our employees that encourages creativity, recognizes innovation and rewards results. Quality: Superior quality and continuous improvement in all aspects of our business results from a dedication to employee development with a commitment towards ever increasing customer satisfaction. Statement of Environmental Impact: AAA Wine/Spirits strives to provide excellent sales and service while minimizing our environmental impact.
Our efforts are aimed at saving energy as well as promoting sustainable environmental practices. We have implemented these responsible practices into our daily operations, as we continue to set goals that challenge us to increase efficiencies and reduce waste. Lighter-weight delivery trucks for small deliveries are being used in California and Florida. Trucks fueled by biodiesel are being piloted in Florida, with research being done on the possibility of using hybrid and automatic transmission trucks.
The speed on fleet vehicles has been governed to 60 miles per hour, and new idling and tire rotation policies put in place. Routing software has been upgraded at all divisions in an effort to increase routing efficiency, in turn reducing fuel consumption and emissions. High-efficiency lighting (e. g. motion-sensor systems) have been installed at our distribution centers. Core Competencies From its earliest days in Orlando, Florida, AAA Wine/Spirits has set out to be the most innovative and progressive distributor in each of its marketplaces.
AAA prides itself as a company that not only responds to the needs and desires of its customers and suppliers, but also anticipates them. Recognizing the consolidation and growth of its supplier and customer trading partners in recent years, AAA has anticipated their needs by establishing a strategic, tightly knit organization that is capable of developing, executing, and creating value-added marketing, national accounts, promotions and category management services in every marketing sales and trade channel in each and every market in which AAA is present.
Today, AAA represents approximately 1,200+ wine, spirits, beer, and beverage suppliers from around the world, and markets, promotes, merchandises, and distributes over 3,000 individual brands. Indeed, during a typical working week, AAA’s sales, delivery, and support staff collectively calls on or services over 200,000 different chain and independent retail and restaurant customers across the country. Today, AAA offers its suppliers the “Most feet on the Street” guarantee promising maximized brand exposure and distribution.
Beginning in Florida, AAA worked hard to achieve efficient, statewide distribution capability, which it gained in 1990. Also in 1990, when much of California’s wine and spirits wholesale business was still handled by dozens of small, regional players, AAA Wine/Spirits operations was the first to gain statewide distribution capability. From then on, the company’s strategy has been to offer statewide distribution from its local state of the art warehouses in each of its markets thus adding an invaluable dimension of service to both its suppliers and to its retail and restaurant customers alike.
AAA was the first distributor to provide statewide merchandising and promotional support behind leading wine and spirits brands, a distribution trend that became the industry standard over time. AAA Wine/Spirits has a tradition of pursuing innovation and new technology for the benefit of brand owners and customers. AAA’s underlying criterion behind the application of new technology and back-office best practices is adding value to supplier and customer relationships, making AAA the distributor partner of choice.
AAA’s back office operations provides all of its divisions with the deep content expertise, cutting-edge tools and process efficiencies that they need to win the competition in aisles, back bars and wine lists of our customers. To that end, AAA has developed and implemented software to manage the various functions of effective and efficient distribution. a. EasyOrder – A proprietary highly customizable sales tool which enables the sales force to lookup product information, and place orders wirelessly from mobile devices. b.
EDE – Electronic Data Exchange allows for direct electronic data transfer to suppliers and service vendors. c. SAP – The best Enterprise Resource Planning tool to effectively manage Financials, Sales and Distribution, Inventory and Billing. d. RouteManager – A proprietary tool developed in partnership with UPS to plan the delivery routes for the trucks. e. Web Mobile – A proprietary web based GPS phone tool developed to plan the efficient loading of products onto the truck. Besides this, Web Mobile also allows for driver and delivery tracking thus improving productivity and providing better customer service.
Situation Analysis As one of the country’s largest wine and spirits distributor, AAA is nationally recognized by its supplier partners as well as by its customers for its state-of-the-art distribution capabilities and its leading-edge information technology. Today, AAA operates in 15 states and is looking to expand its markets to California where it plans on setting up statewide distribution capability, providing merchandising and promotional support for its 2,000 + wine and spirits brands and 1,000+ suppliers.
Political and Legal: AAA has had a longstanding commitment to the alcoholic beverage laws and regulations at both the state and federal levels. The regulatory framework for the production, distribution and retail sales of wine, spirits and beer is a three-tier distribution system where wine, distilled spirits or beer product move in a legally sanctioned series of transactions from the producer (first tier) to a designated distributor at the state level (second tier) and then on to a legally licensed retail, restaurant or bar (third tier).
This three-tier distribution system is governed by the 21st Amendment of the United States Constitution which ended Prohibition and returned to the states all power over the sale and distribution of beer, wine and spirits. Its passage allowed federal as well as state authorities to tax wine, spirits and beer, which generate billions of tax dollars annually for local, state and federal authorities. At the state level, two legal approaches exist – a competitive model and a so-called control model.
Today, 32 states permit the private sector to distribute and sell alcoholic beverages, including such states as California, New York and Florida, among others. Elsewhere, 18 states have decided to adopt a so-called control model, under which the state is involved in one or more tiers of the traditional three-tier distribution system noted earlier. Control state markets like Pennsylvania and New Hampshire not only manage the distribution tier (and related tax revenue collections), but also the retail tier as well, while other control states like Michigan, North Carolina and Vermont all take slightly different approaches.
Wine and Spirits Wholesalers of America (WSWA), a trade organization and lobby group based in Washington, D. C.  that works to oppose initiatives to alter the three-tier model, contends that wholesalers perform state functions and are in the business of encouraging social responsibility concerning alcohol as well as alcohol wholesale.  The Specialty Wine Retailers Association (SWRA), a group representing the wine retail industry, is in direct opposition to WSWA and advocate the free movement of wine across state lines. 3] Economic: The annual per capita consumption of alcohol in the US is about 30 gallons of beer, 2 gallons of wine and 1 gallon of hard liquor. Alcohol purchases account for about 6 percent of an average AAA household’s food budget . Demand is driven by consumer preferences in alcohol consumption and demographic trends. The profitability of individual companies depends on effective sales operations and maintaining low operating costs. Large companies have advantages in exclusive distribution rights in large markets.
Small operations can compete effectively by distributing rare and expensive products. The industry is capital intensive with average annual revenue per employee in the range of $500,000 to $700,000 for wholesalers. Suppliers: The beer, wine and spirits industry buys from a variety of domestic suppliers, about 6,000 commercial wineries, 350 breweries, 1,500 microbreweries and 80 liquor distillers . A few large producers dominate such as Anheuser-Busch, MillerCoors, E&J Gallo, Constellation Brands and The Wine Group. Major importers include Heineken USA, Diageo, SABMiller and InBev.
Beer and wine distributors generally have contracts with producers giving them exclusive distribution rights to products within certain markets. Constellation Brands is consolidating its U. S. distributor networks as fast as it can, while treating the distributors it keeps to enhanced profit levels. As of September 2009, Constellation had achieved its goal of one distributor per state in 19 markets, with plans to transition another 11 states within 2010. Diageo continues to consolidate to a single distributor in each US state, with plans to complete its consolidation as soon as possible.
So far, Diageo has consolidated its distribution in 39 states and Washington, D. C. , representing more than 80 percent of the company’s U. S. wine and spirits volume. Technology: Recent technological advances in the Wine & Spirits Distribution Industry include wireless devices to track retail sales, integrated computer systems to order and track and distribute hundreds of products to thousands of retailers, radio frequency identification tags that follow cases or kegs as they travel through the supply chain. Competitors
Existing Firms: The US beer, wine and spirits distribution industry includes about 4,000 companies with combined annual revenue of about $100 billion. Major companies include The Charmer Sunbelt Group, Glazer’s Wholesale Drug, National Wine & Spirits, and Southern Wine & Spirits of America. The beer wholesale industry is fragmented with the top 50 companies accounting for a third of industry revenue. The wine and spirits wholesale industry is concentrated with the top 50 companies accounting for more than 70 percent of industry revenue.
New Entrants: The wine and spirits distribution business is a very lucrative and there is always a constant threat of new entrants. For example, Warren Buffett’s Berkshire Hathaway Inc. agreed to buy alcoholic-beverage distributor Kahn Ventures Inc. to add sales in Georgia and North Carolina and help the company prepare for further acquisitions in the industry . Target Market Having successfully penetrated the wine and spirits markets in 10 states, AAA is now looking to California as it next market. The Wine & Spirits market in California is a $ 1. 5 Billion industry and the 5th largest consumer of alcohol beverages in the United States . The Charmer Sunbelt Group and Glazer’s Wholesale Drugs have been in California for 5 years but have not been able to dominate some of the smaller wine and spirit distributors. AAA will look to establish its business in the state of California by offering statewide distribution of wine and spirits merchandise based on its exclusive distribution contract with suppliers such as Diageo Spirits, Constellation Wines and Pernod Ricard USA. The typical market for Wine and Spirits retailers is clearly divided into two istinct profitability segments based on the alcohol consumption venue. On-Premise customers like Bars, Restaurants, Hotels, and Nightclubs serve alcoholic beverages on-site as part of their offerings. Off-Premise customers like liquor stores, grocery stores, chain stores, specialty stores sell wine, spirits and beers to individual customers for consumption at a location of their choosing. AAA will use its tried and tested strategy of promoting On-Premise sales to drive sales for Off-Premise customers since once customers become aware of the brand they will most likely purchase it from a store.
Some of the target Off-Premise customers for AAA in the State of California would include, Brookshire Brothers, B&B Foods, Carnival Food Stores, HEB Foods, Randall’s Food Market, Sack n’ Save, Super S Foods, United Super Markets, Walgreens, BJ’s, Costco, Sam’s Club and Wal-Mart. On-Premise customers would include TGI Fridays, Applebee’s, Chili’s and local bars, pubs, casinos and nightclubs. A third segment, the US armed forces (Army, Navy, Coast Guard and Air Force) exists. Merchandise will be sold at cost to this third segment. ACTION PLAN
AAA Wine/Spiritswill launch its distributing operations in California using an exclusive distribution contract with suppliers such as Diageo Spirits, Constellation Wines and Pernod Ricard USA starting March 1st 2011 the details of which are listed below. A state of the art Warehouse will be setup in Austin, California. The current plans call for a 620,000 square foot facility with six miles of conveyors, storage space for 2 million cases of wine and spirits with capabilities of loading 12 trucks simultaneously to ship 5,400 cases per hour.
The California sales office will be located in neighboring San Antonio. 100 temperature controlled delivery trucks and other required equipment will be acquired. A key plank of AAA’s corporate strategy has been to ‘Pursue Operational Excellence’ by sharing best practices and leveraging AAA’s size in the marketplace. The back office functions of Accounts Payable, Payroll, Employee Benefits, Supplier Billing, Accounts Receivable, Master Data Management, Systems and Information Technology will be managed from AAAs back office division in Orlando leaving the California operations to concentrate on selling.
AAA’s distribution business in California is expected to bring in invoice sales of approximately $118 Million for the year 2011. Action Plan| | | | Action| Date| Duration| Cost| Secure and Finish Warehouse and Office Space| October 4th 2010| 4 months| $15,000,000| Back office operations ready| November 1st 2010| 2 months| $50,000| Secure Delivery Trucks and other equipment| December 20th 2010| 3 weeks| $8,000,000| Staffing| January 3rd 2011| 1 month| $20,000|
Purchase Orders to Supplier| January 31st 2011| 1 week| $0| Initial Marketing Promotions| January 31st 2011| 3 months| $1,000,000| Receive Orders from Customers| February 7th 2011| N/A| $0| Receive Goods in Warehouse| February 21st 2011| 1 week| $10,000| Shipping Goods to Customers| March 1st 2011| N/A| $300,000| The Marketing Mix Starting in Florida, AAA Wine/Spiritshas been able to successfully build brands and gain a positive reputation for its ability to promote and merchandise premium wine and spirits brands.
These same brand building marketing techniques will be employed to patiently and persistently build the sales of premium brands (old and newly won) in California to distinguish AAA from its competition and secure a major share of the California wine and spirits distribution market. Product Strategy: The wine and spirits brands that AAA will enter into and promote in California will be mostly stand-alone well-established brands that will be marketed separately based on promotional budget provided by the suppliers. Examples of products brands would include for, 1.
MMM Spirits – Johnnie Walker, Matador, Baileys, Smirnoff, Crown Royal, Gordon’s, Jose Cuervo, Guinness, J&B, Captain Morgan and Tanqueray. 2. NNN Wines – Vendange, Cisco, Ruffino, Mondavi, Taylor, Clos Du Bois, Woodbridge and Wild Irish. 3. The Company USA – Absolut, Fris, Seagrams, Malibu, Kahlua, Beefeater, Jacobs Creek and Presidente. Distribution Strategy: AAA is known for its best-in-industry professional and well-trained sales staff with a “Most feet on the Street” guarantee, promising maximized brand exposure and distribution.
In California, AAA will use its proven strategy of promoting On-Premise sales to drive sales for Off-Premise customers since once customers become aware of the brand they will most likely purchase it from a store. AAA will align its entire sales force in California into designated groups of specially trained teams. Each group will be carefully trained to handle a specific sales channels, and customer categories such as chain supermarkets, national hotel chains, independent restaurants and chain liquor stores.
AAA will use the following marketing channels to reach its targeted customers. 1. E-channel: AAA’s online store website http://AAAwineonline. com has products and applicable promotional information for customers who would like to research and purchase wine and spirits online. 2. Personal Selling: One-on-one personal selling will be done via, a. Sales Persons: Every customer chain account will be represented by a sales team for the entire state. Sales persons will be trained to be polite and professional and offer the best deal to the customer. . Call in to Customer Service: Customers will be able to call in orders to a customer service center. Product will be shipped out daily based on the orders received daily to ensure the customer’s shelves are always adequately stocked. Promotion Strategy: AAA will use Integrated Marketing Communications to first create awareness of the products and build interest in the benefits provided by AAA Wine and Spirits. AAA will employ the following traditional and customized marketing techniques to communicate its value offering. a.
Direct Marketing: AAA’s biggest asset, its employees will be educated in the company’s product offerings and serve as AAA’s biggest marketing resource. Customer Service representatives and Sales persons will be trained to be polite, courteous and knowledgeable about AAAs product, always offering the best deals available. b. Marketing Programs: AAA’s product promotions will be innovative customer-based programs that focus on theme, customer category and brand. Promotions will include the following: 1. Party Guides: Customers like Raleigh’ss offer party packages for its customers.
AAA provides promotional material (Party Guides) to Raley for including AAA’s products in its party packages. 2. Wine Lists and other retail display materials: Bars, Restaurants, Casinos, Night Clubs present wine lists to their customers. AAA will carry the cost of these Wine Lists and other retail display materials. 3. Monthly Cocktail Themes: AAA will invest in hiring and training Mixologists to develop new drinks and mixes based on local tastes. AAA will supply these new cocktail recipes and promotional material to local pubs and bars in amplify customer interest. 4.
Holiday Themes: Holiday specific packages with appropriate packaging, colors and selection of wines and spirits will be sold to Off-Premise customers (Grocery, Liquor stores etc. ) and holiday specific promotional materials will be provided to On-Premise customers to capitalize on increased sales during specific holidays. 5. Multi Brand 6 Pack Carriers: Assortments of beers, wines and spirits will be made available for customers 6. Customer Specific Promotions: The fastest growing race in the United Sates is the Hispanics. The 2009 US Census Bureau estimates 37% of California’ population comprises of Hispanics.
AAA will look to capitalize on this growing market with special promotions on products frequently purchased by Hispanics and sponsoring events for Hispanics. 7. Value Added Packaging: AAA will invest in researching value added packaging for its products like flavor infusion packaging and landfill waste reduction packaging. 8. In-store Kiosks and Displays: AAA will design, build, provide and place In-store Kiosks and Display Cases to showcase premium merchandise in the best-selling sections of Grocery and Liquor stores. 9. Mix and Match Combos: Customers will be offered customizable free goods deals.
For example, buy 100 cases of Absolut vodka and get 10 cases free of any Absolut vodka flavors. 10. Sponsorship for high profile events: AAA will sponsor high profile large gathering events for example, the Florida’s South Beach Food and Wine Festival, California’s Annual AAA Wine & Food Festival and UNLVino to promote our products to a larger audience. 11. “Wet” tasting programs: AAA will organize wine tasting parties and wine education seminars to build interest and reach out to new customers. Promote and build displays for more premium merchandise—rather than low-end erchandise—in the best-selling sections of the store. Promotions will be run after careful analysis of customer purchase trends and preferences. Pricing Strategy: AAA will use a high / low pricing strategy which will allow for periodic heavy promotional pricing. Initial pricing will be set at market penetrating low prices operating at a low 18 percent Gross Profit Margin (regular 21 percent GP). Discounts will be made available in terms of, 1. Cash Discounts for early payment of invoices. 2. Quantity Discounts based on different quantities of products purchased. . Seasonal Discounts will be offered for holidays such as Easter, Christmas, New Year, etc. All promotions and discounts will be supported by Promotional Allowances and Depletion Allowances offered by the Supplier. Customer and Supplier Relationship Management AAA Wine/Spiritshas invested a lot of time and money in becoming a customer focused organization. Today, AAA can proudly boast of having the understanding and the ability to address the needs and expectations of each customer by providing unsurpassed value in both the products and the services offered.
Professional relationships, cooperation, and building long term relationships will be the common goals to build successful relationships with our suppliers and customers alike. By conducting business in a manner beneficial to everyone, with highly trained and specialized resources, AAA will deliver superior value added services. AAA Customer Service representatives and Sales persons will be trained to be polite and courteous, always offering the best deals available.
Individual Account Managers are assigned for each supplier account to constantly strengthen and build on our relationship and address any issue in a timely manner. AAA offers its suppliers the “Most feet on the Street” guarantee promising maximized brand exposure and distribution while being the lowest cost distributor in the Wine and Spirits distribution industry. AAA will also institute a Customer Loyalty Rewards program to further strengthen the business relationships with it long standing, large account customers providing them with premium pricing and deals.
Budget and Monitoring First Year Budget| | Revenue| $118,000,000 | Cost of Goods Sold| ($92,040,000)| Initial Expenses| ($44,380,000)| Operational Expenses| ($10,000,000)| Marketing Expenses| ($3,000,000)| Rent| ($700,000)| Salaries| ($6,000,000)| Supplies| ($300,000)| Insurance| ($300,000)| Interest | ($145,000)| Net Income| ($38,865,000)| Based on forecasted sales volume and projected invoice sales for the first year of operations, AAA’s initial budget for the first year of operations (fiscal year 2011) is estimated as shown above.
AAA will invest $3 Million on its marketing initiative and coupled with the promotional and depletion allowances offered by suppliers, AAA will have an estimated $13 Million for Marketing and Promotional activities. AAA will constantly monitor the progress of its business venture into California and the effectiveness of its business and marketing strategies by tracking its performance against metrics developed for each of the following business objectives. Objective 1: Become the distributor of choice for wine and spirit suppliers.
AAA Wine/Spiritsvision is to be the leading distributor of beverage alcohol and create superior value for all tiers of the industry. In California, AAA will achieve this vision by embracing a mission of providing superior business partnership solutions that will drive growth and value for customers and suppliers alike through our national scale, local market intelligence and brand-building expertise. AAA will look to increase its supplier and brand distribution relationship in California by introducing new supplier like Jim Beam Brands, Moet Hennessy, Patron Spirits, Sutter Home Winery, Heaven Hill, Skyy Spirits etc. nd their brands till it achieves distribution to the scale of 700 suppliers and 3000+ brands. Objective 2: Profitability growth per year (GP $ and GP%) AAA Wine/Spiritswill enter California with a high / low pricing strategy which will allow for periodic heavy promotional pricing. Initial pricing will be set at market penetrating low prices operating at a low 18 percent Gross Profit Margin which AAA will look to gradually increase t to 21 percent. AAA will target breaking even in California by the end of the third quarter of fiscal year 2012.
The Pricing strategy will be reassessed regularly based on customer and supplier satisfaction ratings, and customer purchase growth numbers to determine opportunities for price increases to meet AAAs profitability goals. AAA will track sales to ensure monthly and quarterly sales growth targets are being met based on which adjustments will be made to the marketing and promotion strategies as needed. Objective 3: One stop shop for wine and spirit customers AAA Wine/Spiritswill use it tried and tested marketing technique of focusing its promotions on On-Premise customers to drive the sales for Off-Premise customers.
With its goals of increasing its supplier base to 1,200 supplier and 3,000+ brand offerings, AAA aims to become a one-stop-shop for customers throughout the state of California. AAA will monitor customer growth and sales growth trends to make adjustments to the marketing promotion and pricing strategy as necessary. Summary and Conclusions Having successfully established its wine and spirits distribution business in 10 States in the US, AAA is now looking to enter and grow in California. The Wine & Spirits market in California is a $ 1. 5 Billion industry and is the 5th largest consumer of alcohol beverages in the United States. Beginning in March 2011, AAA will offer statewide distribution of wine and spirits merchandise with its exclusive distribution contract with suppliers such as MMM Spirits, NNN Wines and The Company USA. Distribution operations will be initiated from a state-of-the-art warehouse in Austin, California with a sales office in neighboring San Antonio. Operational excellence will be achieved by sharing best practices and leveraging AAA’s size in the marketplace.
The back office functions will be managed from AAAs back office division in Orlando, leaving the California operations to concentrate on marketing, sales and overall growth. From a marketing perspective, AAA will use its tried and tested strategy of promoting On-Premise sales to drive sales for Off-Premise customers. This brand building marketing technique will be employed to build sales of premium brands and distinguish AAA from its competition to secure a major share of the California wine and spirits distribution market.
AAA Wine/Spiritswill hire and train its sales staff in California to be the best-in-industry with a “Most feet on the Street” guarantee, promising maximized brand exposure. Integrated Marketing Communications will be used to first create awareness of the products and then build interest in the benefits provided by AAA Wine and Spirits. A mix of traditional and customized marketing techniques like E-selling, direct one-on-one marketing, marketing programs and promotions will be used to communicate AAA product and value offering.
Competitive high/low pricing with appropriate discounting will be employed to penetrate and dominate the California wine and spirits market. Customer Loyalty Rewards programs and other incentives will be offered to customers to establish AAA as the one-stop-shop for wine and spirit customers in California. With a marketing and promotional budget of $13 Million, AAA’s distribution business in California is projected to bring in invoice sales of approximately $118 Million for the year 2011 and is expected to break even in the third quarter of 2012 with a yearly goal of 20% increase in invoice sales.
Monthly and quarterly sales growth targets will be tracked and adjustments will be made to the marketing and promotion strategies as needed. AAA Wine/Spiritsvision is to be the leading distributor of beverage alcohol and create superior value for all tiers of the industry. In California, AAA will provide superior business solutions that will drive growth and value for its customers and suppliers and establish itself as the No. 1 choice for wine and spirits suppliers and to be the one-stop-shop for wine and spirits customers in the State of California.
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