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component 1 final_edited (FINAL)_Essay

component 1 final_edited (FINAL)_Essay - Company...

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Company Description Introduction Rusty Red is a wine-selling business founded by Joe Lizzio, a 1988 Cornell alumni and former Cornell Lacrosse player. Lizzio founded Rusty Red in 2008 when he began importing wine from his vineyard in Predappio, Italy. Due to his interest in lacrosse and philanthropy, he decided to found an organization in which he could contribute the proceeds from his wine sales to provide funding for community athletic projects and scholarships for student athletes. The name Rusty Red comes from the name of Lizzio’s lacrosse team, composed primarily of former Cornell lacrosse players. “Red” refers to Cornell’s mascot “Big Red”, and “Rusty” refers to the older age of the men on the team. Rusty Red’s product is a red wine made from Sangiovese grapes, a variety of Italian grapes originating from Tuscany. Rusty Red wine contains 13.5% alcohol by volume and is sold in 750ml bottles. The wine comes in two varieties: regular and reserve, which is slightly higher quality than the regular. Rusty Red wine provides multiple benefits to its consumers as well. The proceeds from the sale of Rusty Red wine contribute directly to providing scholarships for student athletes. The wine itself provides a great tasting beverage and also contributes to the socialization of various alumni and others involved with the foundation. Additionally, Rusty Red provides its customers with a sense of prestige and a perceived connection with a prestigious social network. Currently, Rusty Red is a “question mark” in terms of both its wine and its scholarship fund (see Figure 1). The company has low market share within the wine selling industry compared to major wine and alcoholic beverage companies, such as Constellation Brands, which currently offers a large assortment of wine and alcoholic beverages and showed sales revenues of $3,843.4 million within its wine division in 2007 (Datamonitor 14). The company also has low market share in terms of its cause related marketing efforts, in which it faces competition from major CRM companies Page | 1
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like Ben and Jerry’s. However, the markets for both wine and CRM have experienced high growth rates in recent years. When a company is faced with a strategic business unit (SBU) that it deems a question mark, it has two options; it can either invest additional resources into the SBU in hopes of capturing market share, or it can divest. In the case of Rusty Red, Joe’s personal dedication to the company makes investing the most apparent option at this time. Rusty Red’s core problems at this stage include establishing brand awareness and customer loyalty, devising a system of ordering and distribution, and developing a pricing strategy. Market Summary The target market of Rusty Red consists of Cornell affiliates, primarily Cornell alumni. In the year 2006 3,525 students graduated from Cornell (Cornell 2006). An additional 3,334 graduated in 2007 (Cornell 2007). Based on these figures, Rusty Red’s target market appears to be growing at a steady rate of approximately 3,000 alumni per year.
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component 1 final_edited (FINAL)_Essay - Company...

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