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Globalizing An Australian Wine Company

Paper Type: Free Essay Subject: Marketing
Wordcount: 3482 words Published: 5th May 2017

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The report reviews characteristics of the marketing environment in a broader facet that BRL Hardy is facing and scrutinizing and recommending the channel strategies that it can adopt. Also provides suitable resolution for dilemma faced by Christopher Carson, managing director of BRL Hardy Europe and Steve Millar, managing director and CEO of BRL Hardy Ltd, regarding proposed D’Istinto launch and the Banrock Station versus Kelly’s Revenge decision.

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Executive Summary:

The wine industry is highly competitive in nature. BRL Hardy aimed at globalizing its brand and acquiring an established name worldwide. It was ranked at number two position in Great Britain bringing great pride to the executives of the company. The goal of becoming a Globalized wine company is challenging yet realizable in the long run however certain issues need to be resolved and crucial decisions need to be taken. Analysis of the marketing and company environment has been done on various factors and the domestic and international markets are scrutinised with reference to the case study. The pre and post merger conditions of the company are studied and how merging helped them in being remarkably successful. Scanning the various brand lines of the company and understanding the consumer buying and consumption pattern within the industry and company. Recommendations are drawn after complete analysis of the case.


BRL Hardy had acquired number two position in Britain’s off trade but still had confronting issues and paradox situations relating to marketing strategies and corporate governance. The company’s strategic sight was to become world’s first global wine companies. Christopher Carson, managing director of BRL Hardy Europe had achieved a 10-fold increase in sales volume in just 7 years. Steve Millar, CEO and managing director of the South Australia based parent company was a great worshipper in decentralized approach to management. For both Millar and Carson crucial decisions were:

Proposed launch of D’Istinto

Kelly’s Revenge versus Banrock Station decision in both the UK market and Australia.

Berri Renmano Limited (BRL) and Thomas Hardy and Sons were two separate companies having contrasting organizational culture’s wherein BRL was more “aggressive and commercial” and Hardy was “polite and traditional”. The core competencies of the two companies were perfect complements. The two companies consolidated in June 1992 and became a public listed company three months post the merger. BRL had access to combined cooperatives specialised in fortified, bulk and value wines whereas Hardy had award winning quality wines which led to post merger success of the organisation. The new company formed was BRL Hardy and comprised majorly of ex-BRL executives and few positions were allotted to Hardy’s staff. The need for consolidation was BRL’s call for expansion and Hardy’s financial crisis. The two companies together accounted for 17% of national wine exports and 22% of Australian wine market. Both the companies were strategically adjusted for achieving the aim of being globally recognized. BRL had access to fruit, funds, and disciplined management and Hardy brought in marketing expertise, brands and winemaking know-how. Dealing with Financial concern was the initial undertaking by the company and they decided directing care at home. Millar wanted to alter the company’s culture and management style and evolve a more decentralised access. The plan of attack was to attempt 20 things and getting 80% correct instead of conducting one or two big things and getting them 100% correct. The perceived planning and clarity regarding fundamental approaches were effectively blended. The case study will explore the advancement of BRL Hardy and the prevailing obstacles at strategic and operational level.


The company has a large potency in extending forward quality wines to attract and retain the customers and attain its position as a global winemaking company. Analysis of the case has been done keeping in view the following factors affecting the marketing strategies being adopted and implemented by the company.

1. Cultural Conflict:

Post merger and acquisition, Cultural disputes and power and autonomy issues between BRL and Hardy were witnessed in their working structure. Major proportion of jobs in BRL Hardy was attained by ex-BRL executives that led to many of the Hardy employees feeling dispirited and they felt like outsiders. The fundamental target was to decentralize the work and holding management accountable for the work or tasks performed on their end. Hardy employees had to really strive hard to earn their desired stripes. Serious tension regarding centralization or decentralization of the company between Davies and Carson wherein Davies had an impression of handing over the pricing, labelling and branding issues to Australian home management , Carson had opinion that labelling and positioning should be made with the primal regulators of the local market.

2. Branding, Labelling and Positioning:

Each brand was introduced with different marketing strategies and keeping in mind the customer requirements. Some branding and labelling issues were discovered relating to Hardy’s Nottage hill and Hardy’s Stamps in the UK market share. Carson was eager to relabel, reposition and relaunch these brands as to attain an efficient and effective position in the marketplace. The company focussed its sales on branded bottle sales for growth and tried repositioning itself from “quality exporter” to an “international wine company” .The company’s slogan was “making quality wines for the world”. Davies repositioned and rationalised the brand line from simple to quality wines. Diverse consumer groups were targeted relating to distinctive brand values. Following were the brands operated under BRL Hardy group-


Launched in 1998

Unique brand image which created a point of difference in the brand positioning

Mediterranean lifestyle- passionate, warm, romantic, relaxed

Wine and food loving customers could be easily attracted

It was proposed to fill in the higher end price points suffered by Stamps-$4.49 and Nottage Hill-$5.49

It aimed at serving the low and middle price points

It did fairly well and had global potency

Kelly’s Revenge:

Low price end brand

Had colourful labels

Detailed and extended marketing plan

It was positioned as the fun brand at $3.99

Lower price end prospective customers

Target group consisted of young consumers and first time wine drinkers

Banrock station:

Launched in Australia in 1996

Brand Image created was earth tone labels and protection from environment

Positioned as unpretentious, down to earth wine

Price-$4.95 to $7.95

Immediate success and hit in the market

Marketing strategies proposed-

More push than pull should be created for the brands

Retailers backup needs to be installed

Labelling is crucial

Progression from commodity to commodity, brand to soft brand to hard brand.

3. Marketing Environment:

While scanning the marketing environment of BRL Hardy, Davies identified a diversified portfolio of market positions:

Small share of Hardy wines in UK

Bulk business shared by BRL in Sweden

Weak presence in US supported by Hardy products

Nonexistent presence in Asia

Marketing environment comprises of the task environment and broad environment-

-Task environment:

The environment which affects its ability to reach business goals.The company had discovered four export markets- UK, Germany, Japan, US. The geographical distance being covered is creating operational issues in the company. The competition was really high in the wine industry. Analysing the consumers behaviour revealed that they buy any type of wine if it’s cheap and easy to drink. Domaine de la Baume, Brolio de Ricasoli and Whiclar and Gordon were the major acquisitions of the company and helped in distributing the brands worldwide.

-Macro environment:

Following factors are reviewed from the perspective of Macro Environment:

1.Economic arena- The economic trend is upright for BRL Hardy as the exchange rate was in favour for Australia in export.

2.Socio-cultural area- In Australia there was a change in consumer habit of consumption as they shifted from beer to wine and demand in the non-traditional market from new consumers created a hike. Due to large number of producers and sellers in the market, customers could easily shift to the substitute brands available in the market depending upon their varied choices. The consumption pattern tremendously created rage in the wine industry for Australia as consumers started consuming more of it with moving times and more than 1000 wineries were constituted in Australia by 1996.The customers in UK were not really charmed with the brand “Kelly’s revenge”.

3.Natural environment- The Company introduced Banrock Station which was positioned as Environmentally Responsible brand. Banrock Station is a 4500 acre land highlighting some of the world’s most picturesque scenery.

4.Technological forces- Developments were made in the winemaking industry to farm high quality wines by adopting scientific winemaking practices and modern viticulture. The company had also come up with more productive vineyard techniques and new winemaking methods.

5.Legal forces- The risk attached to alcoholic industry regarding government imposition of restrictive laws need to be checked upon by the industry.

Micro environment:

1. Pricing:

The price points of the company ranged from lower end to higher end. Hardy’s Nottage Hill and Hardy’s Stamps were retailed at 2.99 and 3.69 pounds but Carson was concerned about the image of the brands being eroded. They were again repositioned later at 4.49 and 5.49 pounds. Kelly’s Revenge was positioned at 3.99 pounds. The price range of Banrock station ranged from A$4.95 to A$7.95. D’Istinto was priced at 4.99 pounds. Analysing the pricing strategy reveals that products were ranged at different price points and for all level of consumers.

2. Competitors: (European Industry-minuscule market share)



Veuve Clicquot

Mass market global brands competitors:

Mateus Rose

Blue Nun

Mouton Cadet


Gallo, world’s biggest wine brand

3. Channel strategies: Following channels were used by BRL Hardy-

-Distribution Channels-Hardy initially relied on importers, distributors and agents for serving the market. Later on they acquired Whiclar and Gordon, a UK-based wine importer-distributor. Two other distributors of the company were Domaine de la Baume and Brolio de Ricasoli. In Australian market 90% of the sales were through hotels and bottle shops whereas the UK market was not a well established and branded wine market. Channels were established such that the retailers were convinced to place the products on their shelves and branding and labelling were done keeping in view the women wine buyers that constitute 60% of the supermarket wine sales. Marketing and distribution capabilities were evolved negotiating a 50/50 joint venture wherein the Chileans aimed at providing the fruit and winemaking facility while winemakers were send to make wines by BRL Hardy to be sold in Europe.

-Communication Channels-The communication channels between the various executives were disorganised and major conflicts over centralization and decentralization of the operations were witnessed. Paul Browne acted as a barrier of communication between Australia and Europe.

STP of BRL Hardy (segmentation, targeting, positioning)


Segmentation basically means dissecting the market into smaller sections. The BRL Hardy company had its markets segmented and spread across wide areas like Europe, Australia, UK, US.

1. Demographic Segmentation- The demographic environment of the industry deals with consumers who became more sophisticated and were served with wine in bottle varietals instead of wines earlier being sold in two litre bags in a box.

2. Geographical Segmentation-The segmentation on the basis of geographical area, BRL Hardy’s market was segmented into geographical areas like UK, Europe, Australia, US.

-BRL Hardy in Europe:

Biggest dispute over marketing strategies was that of Branding and Labelling issues

Entrant products-Hardy Stamps and Hardy’s Nottage hill

Carson wanted to relabel, reposition and relaunch them

In 1993, relabelled and relaunched which quadrupled the sales

-BRL Hardy in US:

Efforts were induced in launching Banrock Station as a global brand so it was successfully established in Canada and the US government withdrew Hardy’s Stamps product from the market and replaced it with Banrock Station.

-BRL Hardy in UK:

Carson wanted a new brand to be introduced to fill in the hiatus between the lower and higher end price points. Constant efforts were made regarding positioning, branding and labelling the product and the brand introduced was Kelly’s Revenge. It was positioned as a fun brand and targeted majorly at the younger generation of the country. Carson slashed the product line from 870 to 230 items and reduced the headcount from 31 to 18. Well established brands like Nottage Hill and Hardy’s Stamps in UK at lower price points of 2.99 and 3.69 pounds started losing its charm and Carson decided on repositioning, relaunching and relabeling the. At a later stage in time these brand were priced at higher price points at targeted for higher income groups.

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For Kelly’s Revenge the target group were younger consumer and first time wine drinkers. D’Istinto brand launched in UK targeted at wine-and-food-loving consumers. In UK, women represent 60% of the supermarket wine buyers so they are targeted keeping labelling of the product in mind. Hardy’s Nottage Hill and Hardy’s Stamps targeted at the higher income or regular wine drinkers and were priced at higher end points. The Banrock Station also targeted varied income group customers as it ranged its price points from A$4.95 to premium varietals at A$7.95.


Positioning a brand means the efforts made on the part of the company to make sure that a brand is identified in a given manner by the customers. Banrock Station was positioned as unpretentious, down to earth wine. Kelly’s Revenge was positioned as fun brand. D’Istinto adopted the Mediterranean lifestyle and positioned itself as a unique brand.

SWOT Analysis:


BRL-access to fruit, funds and disciplined management

Hardy-marketing expertise, brands and winemaking know-how

World class production facilities

International distribution

Global brands of BRL Hardy


Poor financial situation

Poor performance in previous year

Poor branding and labelling

Grape harvest was vulnerable to disease, weather and elements affecting the quality and quantity


Access to Explore the global markets

Australian wine was becoming the “hot trend”

Ambitious industry witnessing huge export potency


Jean-Louis Duneu said “the promise of a brand is that it will be same quality every time”

Jonathon Knowles quoted “Wine lovers look for something they haven’t heard of”

B2B Market:

B2B market means Business to Business market. With reference to our case, B2B market was viewed wherein BRL Hardy started dealing with a handful of suppliers who provided them with quality products in a broad line as Carson believed that sourcing from multiple regions would help in minimising the risk.


The glide path followed by the company to attain global success is a difficult objective due to distinction of mass products towards quality single branded products. Firm can seek Diversifying into new areas within the given product range, or diversity into new product inside the existent markets. But attempting both at once is not recommended. It must be made sure that each wine represents its particular region and does not taste like other areas. The professionals in the field need to be constantly engaged in branding and labelling practices and understanding the target groups with moving times as even established products need to reassess their points of parity and points of differentiation needs to be altered or modified with changing times. The frame of reference in which the brand is positioned needs to be well established and made sure it does not provides any ambiguity to the customers. Through some references it has been viewed that French wine industries pay attention towards the type of grape used instead of emphasising on the region of production which in turns helps in resisting competition and hiking the sales. The direct interaction with customers permits the initiation of a complex process of value co-creation (O’Neill and Charters, 2000). This means that relationship marketing must be the key factor underlined to enhance the value of the customer experience. The increased popularity of wine clubs in many countries indicates the success of relationship marketing techniques (Coppla, 2000; Teaff et al., 2005). The wine producer may build a restaurant and/or a hotel, design guided visits of wine caves, or develop specific touristic events related with wine producing activities – such as wine festivals (Shanka and Taylor, 2004). BRL Hardy must keep in mind innovative communication with the customers by using brand names or logo that can move around the world. It can also consider selling their wines in cans like coca-cola does as it is an innovative marketing formula. Launching the D’Istinto brand will help BRL Hardy broadening its suppliers and will provide step up power as a distributor. The main reason for supporting the launch is that it blends well with the global setting that is being looked upon by the company and it will help attaining multinational growth in a broader vision of time. Launching Kelly’s revenge would be an ideal decision for Carson and Millar as it highlights the unique brand attributes and appeal to the young generation in the UK market and also the price points at which it was positioned were merely low and appreciable by the target group. But then the positioning and labelling of Banrock Station as addressed colourless, dull and limited appeal needs effective assay and efforts need to be induced to create a charm for the brand worldwide. The decentralised plan of attack is good for the organisation to prosper but in times of crisis, decisions must be made by the top level executives. Company can also look in for sponsorship strategies at musical events as adopted by Heinekens Beer group. It is also important to understand that repositioning is not only difficult but sometimes impossible and may lead to market share woes for the company. Wine tourism can also be looked for as a good option of promotion of wine by establishing a direct link between the wine industry and the tourism industry. For an industry like this where no set patterns are followed to be successful, BRL Hardy should think out of the box and aim at being the trend setter rather than trend follower.


http://www.wharton.universia.net/index.cfm?fa=viewfeature&id=1511&language=english (April 30, 2008)

http://www.businessteacher.org.uk/free-business-essays/brl-company-and-hardy-company/ (copyright@ 2003-2011)

http://www.ehow.com/list_7538403_wine-sales-strategies.html (copyright@ 1999-2012)

BRL Hardy: globalizing an Australian Wine Company (REV October 6, 2003)

http://www.studymode.com/essays/Brl-Hardy-Globalizing-Australian-Wine-Company-1153005.html (copyright 2012) (1st November, 2012)

Three Questions you need to ask about your Brand (Harvard business review 2003)

http://www.limengine.com/assets/wine_case_study/manufacturers.html (4th November, 2012)


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