Being unique is a powerful business strategy. Let's learn how Yellow Tail, an Australian Wine company, smashed the highly competitive US wine market and became the biggest importer of wine in the US.
Background
The Casellas were a low-key family who moved from Italy to Australia, where they bought farmland and started a vineyard. Yellow Tail is the name of the family's own brand of wine, which was made by taking advantage of the unique qualities of the wine.
They planned to sell their wine in the United States, which has a very competitive wine market. In the 1990s, the wine business became known worldwide as one of the most competitive industries for two reasons.
Reason #1: Too many wine brands out there. If a brand-new wine product came out, getting a significant market share would be hard. Whenever a winemaker comes out with a new wine, they say it is better than the last one. But that alone won't get people interested in trying the new wine.
Reason #2: Domination of prominent players. At that time, 10% of the companies imported 90% of the wines (i.e., the remaining 90% of companies were small and only made 10% of the total market). Furthermore, almost three-quarters of the wine brought into the United States came from France and Italy (i.e., you were at a disadvantage if your products weren't French or Italian).
So, the challenge was how to stand out in a market with so many competitors, especially when you are an Australian winemaker. The Casellas knew they would need to change their business strategy if they wanted to be known in such a cutthroat industry.
Strategy
W.J. Deutsch & Sons, a company that does marketing and sales, helped Yellow Tail get into the American market. This partnership was made because Yellow Tail knew that wine producers and the biggest importers of wine from France and Italy were in a very tough race.
The groups talked to each other and realized that…
Wine is seen as a luxury drink, and its flavor profiles are intentionally made complex to appeal to a specific group of people.
What if they could do the exact opposite of what they are doing now?
What if, instead of marketing to wine connoisseurs and people who drink a lot of wine, they marketed it to people who don't drink wine?
As a result, Yellow Tail adopted the following strategy:
Their target market was non-wine drinkers (unique targeting and positioning).
They made the wine easier to drink to attract people who don't usually drink wine (unique products that are less tannic and acidic).
They kept the prices low (unique pricing that is 20-30% lower than typical wine prices).
Their marketing campaigns were geared towards dispelling the idea that wine is only for the wealthy (unique promotion).
They focused on retail stores, not specialty wine stores (unique distribution model).
Result
This strategy allowed them to leave the competitive wine business (the "red ocean") and move into a new market (the "blue ocean"). Because they have unique products and not targeting regular wine drinkers, they avoid the "sharks" in the wine industry. Within a short time span, Yellow Tail's market share went from 0.3% to 20% -- and they became America's #1 in Import Wine.
Lessons Learned
Next time you do your strategy, aim to be unique.
Think about the customers and potential customers.
Think about how you can differentiate your products.
Think about how you can make your brand stand out from the competition.
Continue to explore winning strategies here.
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