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Essay by   •  October 19, 2015  •  Research Paper  •  6,199 Words (25 Pages)  •  1,937 Views

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  1. Executive Summary
  2. Current Marketing Situation
  1. Market Description

In the Philippines, wine has been a symbol of sophistication and—to a certain extent—luxury, as such is often consumed only during special occasions and holidays or given as gifts, most especially during Christmas season.


In 2013, the wine market experienced an 8% growth in sales volume despite the sin tax law implemented in 2013. Euromonitor explains that this is because, having a higher-income consumer base, demand for wine is less elastic compared to other types of alcoholic drinks. Furthermore, upscale consumers even consider purchase and consumption of wine as a necessity.


This market can be divided into segments according to wine type. These major categories are Still Light Grape Wine, Fortified Wine and Vermouth, and Sparkling Wine.

The Still Light Grape Wine category dominates the market with the highest volume sales growth of 8% CAGR in 2013. This category is further subdivided into three subcategories, namely Still Red Wine, Still Rosé Wine, and Still White Wine. These subcategories registered growth rates of 7.8% CAGR, 3.6% CAGR, and 6.8% CAGR respectively, through years 2008 to 2013. Among these subcategories, Still Red Wine accounted for 82% of total volume sales.


Fortified Wine and Vermouth, on the other hand, registered a 3.1% CAGR for years 2008-2013. The Vermouth category, in particular, registered a 3.2% CAGR in the same period while other fortified wine and vermouth products registered a 1.1% CAGR.


Registering a 3.2% CAGR within the aforementioned period is the Sparkling Wine Category. However, Champagne, in particular, observed a decrease of -0.9%CAGR. Euromonitor explains that this is due to a 4% unit price increase in 2013.


As for flavors and varieties, the market offers two major classifications—new world wines and old world wines. In 2013, it was observed that new world wines gained marginal share from old world wines due to wide availability, greater affordability, and flavor varieties. New world wines are also said to fit the Filipino taste as these wines are fruitier and modern.


In terms of texture, however, the wine market can be segmented simply into two categories—dry (bitter) and sweet wine. In the Philippines, the Filipino palette has grown to prefer sweet wine. In response to this, winemakers have created sweet wines that are partially fermented to keep alcohol content low and maintain the sweetness at the level preferred by majority of the market.

In general, it can be said that in the Philippine wine market, consumers prefer sweet wine with wide variety and availability, while price has no significant impact on their consumption or purchase behavior.

  1. Consumer Behavior

Over the past decade, the worldwide wine industry has become more internationalized and sophisticated. At the same time, in countries like the United States, England, France, Japan, and China, the wine industry has experienced steady growth because many consumers have adopted wine tasting and consumption as a favorite leisure activity.

Today, wine enthusiasts are looking for something more than just a bottle on a shelf. They are looking for a wine store that can enhance their wine experience and provide opportunities for their love of wine to grow.

In the Philippines, while the total wine market is small in comparison with the other Asian countries, demand is continually growing. While the Philippines remains a beer-consuming country, with big companies like San Miguel Corporation and Asia Brewery as strong domestic producers, wine appreciation and consumption has shown reasonable growth over the past years.

The principal drivers of this growth are lifestyle and health. The growing medical evidence on the benefits of moderate drinking has led to more consumers. Some of these consumers are now shifting away from other alcoholic beverages in favor of wine. Also, due to its perceived health benefits, red rather than white wine is the general preference.

Another driver of this growth is the growth of the tourism industry. The number of new bars and nightclubs, especially in Metro Manila which serves as distributors of wine makes it easier for the product to get to customers.

Regarding price, budget to mid-range priced wines are the most popular. And since young professionals’ purchasing power to spend on alcoholic drinks is increasing, the market is expanding to include them as well as to recognize that this segment has the capacity to be a primary market.


However, a shift in purchase from lower-priced brands to higher-priced brands has been observed, suggesting that the preferences of wine consumers in the Philippines are becoming more sophisticated. This trend is said to be evident most especially among consumers described as high-income older males who either drink wine on special occasions or serve wine to guests.



Novellino Wines was established in 1999, following the vision of Vicente “Nonoy” Quimbo to make wine drinkers out of non-traditional wine drinkers by tearing down barriers that prevent Filipinos from drinking wine. Due to the aspirational value associated with wine, Filipinos consider it as a lifestyle product unlike Europeans who considered it as a staple – resulting to its high seasonality. In spite of this, Quimbo saw the opportunity and potential in the Philippine Wine Industry.


Through market research, Novellino identified 3 key reasons for the limited wine consumption in the Philippines – price, taste and familiarity. These factors served as the basis for the framework in coming up with marketing strategies suited to change the Filipinos’ perception regarding wine drinking, hence, resulting to a comprehensive program that offers affordable sweet wine suitable for every Filipino celebration.


Current Marketing Plan

In order to address the Filipinos’ reluctance to drink wine, Novellino’s current marketing plan focuses on these three key factors:


Taste – Novellino aimed to change the perception that all wines are bitter by incorporating the typical Filipino taste to the Italian wine-making tradition it employs in its production processes. To satisfy the Filipino palate and to compliment the tropical weather in the country, it produces light and refreshing wines that are sweet, fruity and effervescent.


Price – With the high volume and efficient production methods employed in its plants, Novellino wines are priced between 200 to more or less 300 pesos in various supermarkets, wine shops and major retailers in the market, with a slight mark-up in restaurants and other “on premise” outlets. This reasonable pricing aims to bridge the gap between its target market’s purchasing power and its image – so as to avoid being perceived as “cheap wine.”



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