Geomarketing Opportunities for Virginia Wineries

Joao Ferreira (jp@mawamsolutions.com), Consultant, Mid-Atlantic Wine and Agribusiness Marketing Solutions. Gustavo Ferreira (gferre3@vt.edu), Extension Economist, Department of Agricultural and Applied Economics, Virginia Tech

Because Virginia wineries sell more than the 65% of their wines at their tasting rooms, it is imperative that they attract more visitors to their premises. In this sense, the development of a geomarketing strategy could help Virginia wineries increase their wine sales, save costs, and build brand awareness. Geomarketing can be defined as a business tool in which geographical information is used to analyze market and customer information, determine investment strategies, implement tactics, and follow-up activities executed. Furthermore, given the surge of agritourism, Virginia wineries should seek to use geomarketing to build strategic alliances with other tourism-based businesses.

In this article two examples of applied geomarketing are presented to illustrate how wineries can benefit from the use of this marketing tool. Considering the geographical characteristics of the Virginia wine industry, we divided our analysis in two different scenarios:

  • Wineries that are geographically isolated
  • Wineries located near densely populated areas

Figure 1 shows the geographical distribution of Virginia wineries, and simple observation reveals a large concentration of wineries in northern Virginia, the Shenandoah Valley and along interstate 81. A number of other wineries are scattered across the state.

geomarketing-1

Figure 1. Location Virginia Wineries (Source: Virginia Wine)

1. Geographically isolated wineries

For research purposes, we selected the town of Blacksburg as the geographic point for the case of a winery that would be located away from densely populated areas. A winery away from large population centers must focus on those factors that can attract visitors to the site. In this example, we consider two main factors: tourism and transportation infrastructures (Highway 81). Using MapPoint software[1], and a 30 miles radius, a series of factors were selected under the assumption that each can be relevant to potential winery visitors and wine consumers. More specifically, the selected factors fall within four categories:

Tourism: amusement parks, campgrounds, hotels and motels, park and rides,

Leisure and recreation: galleries, golf courses, restaurants,

Transportation: gas station, rental agencies, rest areas

Wine industry: wineries

The results from the software search show the following points of interest are within a 30 miles radius of Blacksburg:

  • 4 amusement parks
  • 10 campgrounds
  • 8 galleries
  • 220 gas stations
  • 42 golf courses
  • 124 Hotels and motels (including high end B&B)
  • 15 museums
  • 3 park and rides
  • 13 rental car agencies
  • 20 rest areas
  • 706 restaurants
  • 5 wineries (competitors)

Once identified, wineries can use these points of interest to deliver their promotional materials. For instance, a winery might consider placing informational brochures at rest areas, gas stations or parks that are known to be visited by travelers and tourists. Wineries can also use this information to indentify and approach strategic partners such as nearby hotels, golf courses, bed and breakfasts, or restaurants. In this case, wineries might choose businesses whose customers have a profile that fits the typical winery visitor or wine drinker. More specifically, wineries should be looking for other businesses serving customers with higher income levels (i.e. nearby Bed & Breakfast). Finally, the more geographically isolated wineries should still consider all surrounding cities and micro/metropolitan areas. In this particular example, population areas like Salem and Roanoke should be included in the promotional strategies. For that, wineries should promote their business and products in these urban areas by using local media, participating in festivals, sponsoring events, among other venues.

2. Wineries located near densely populated areas

The town of Conklin was selected as a geographical point to represent the case of a hypothetical winery located near a large metropolitan area – Washington D.C. In this case, wineries must implement a marketing strategy that capitalizes on their proximity to highly populated areas and larger potential markers. Using MapPoint software, the following potential partners, promotion and sales sites are found within a 30 miles radius.

  • 2 amusement parks
  • 11 campgrounds
  • 10 convention centers
  • 127 galleries
  • 834 gas stations
  • 199 golf courses
  • 512 Hotels and motels (including high quality B&B)
  • 146 museums
  • 2 park and rides
  • 83 rental agencies
  • 13 rest areas
  • 6925 restaurants
  • 57 wineries (competitors)

geomarketing-3

In this scenario there are very many population centers close by in which the wineries

should focus their marketing efforts, for example Arlington, Alexandria, and D.C.  As previously stated, wineries can use local media, events, and other groups to promote their business. The differences here are a much larger number competitors (57 versus 2 wineries in the surrounding area), more sophisticated markets, and higher marketing costs. Nevertheless, a much higher return on investment may be expected considering the proximity to the target market, larger pools of customers, and higher income levels in these urban areas. As in the first scenario, wineries should also use the points of interest and select strategic partners.

It is important to note that not all points of interest shown in both examples would be feasible or advantageous for the wineries in question. More specifically, it is advisable to conduct pre-selection visits or interviews of those points to determine if they are in tune with the winery’s characteristics, brand, image, and products.  By doing this, wineries can allocate their marketing efforts in a more cost-effective manner, and will be able to reach their target market. Furthermore, when considering the characteristics of these population centers (e.g., rent, education level, age), wineries can benefit from the combined use of other free online tools such as, Google Maps, Win Maps, Genome Project, or Claritas.com.

 Conclusions

These two examples illustrate how geomarketing can be used by Virginia wineries, in coordination with some of their other marketing tools, to give them a better understanding of the surrounding market. This in turn can result in increased business visibility, a larger number of visitors, and ultimately, increased sales. Finally, and just as other web marketing techniques, the implementation of geomarketing is characterized by its simplicity and very low cost. These two aspects are particularly important for smaller wineries because of their limited marketing budgets. Furthermore, a small winery owner tends to be in charge of developing and implementing the marketing along with many other tasks.

[1] MapPoint is Microsoft® software available for purchase on the internet. Nevertheless, a free trial is available for those businesses that would like to assess its capabilities.

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