Wine Expectations: the Case of Rosemount and Southcorp

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Memo To: From: Date: Re: Management Students November 20, 2013 Improvement of Marketing Strategies The merger between the largest Australian wine company, Southcorp, and the family run company, Rosemount Estates, was supposed to be beneficial to both companies. Both companies sold “premium” branded wine and were notable producers in the global economy. That should have facilitated much success for the newly merged company, however, that was simply not the case. Rather than reap the benefits, the merger caused much tension in the firm. Firstly, the marketing focuses of the two were different – Southcorp wanted to push products while Rosemount wanted to promote. Then the companies couldn’t agree on what quality and price to set their products at, and of course there were the cost reductions by the CEO. These reductions were choices such as the cutbacks of employees, vineyards, wineries and warehouses. As well, the problems between merged computer systems signified the decline of this once profitable company. Within a year of the company being merged, everything that made the two separate entities work, was making this new company fail, so what went wrong? Upon reviewing the recent activities that have occurred, the following are two key problems disabling this firm in expanding and growing their marketing strategies: Ø Promotion of their Products Ø Difficult Pricing Environment DIFFICULT PRICING ENVIRONMENT One of the key problems that the merged firm experienced was the inability to come to a decision about how to price their products. Before the merger, Southcorp was a company who focused on all aspects of the wine market. High quality, and low quality products were produced and sold by them and that created a beneficial market strategy for them. As for Rosemount, they focused on the premium brand wines, and had much success with it. Once these two companies

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