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some plans made for the future since Amelia is the president and seems to have a more powerful vote then
the others. Before she decides to retire there should be at least two possible candidates who will need to
Ceja’s founders proclaim that their business model is based on the idea that everyone can make enough to
be happy, but as the family grows, this might be increasingly difficult with the current forecasted 20,000
The Cejas need to keep focusing on quality and how they can make it better. If they focus on growing and
continued expansion too soon they might lose this advantage.
The Ceja family has seen other wineries come and go because of over production and growing too quickly
*The larger wine companies, like Constellation or Gallo or Foster’s, not to mention the influx of low–priced
imported wines, are increasingly crowding out rival boutique wines at the distributor level, so ethnic or
Although boutique distributors may continue to exist, there is increasing consolidation in that business—a
business in which pricing remains the major negotiating factor, something on which a high–end brand like
Ceja is not yet prepared to concede. One student commented:
*Should wine markets and supply sources continue to globalize, there will be additional international
Allocations of scarce resources to increase production, distribution, and brand promotion, etc. will need to
be weighed against the profit potential. It will be difficult to convince proponents of Amelia’s position
(rely on direct marketing channels). Students who side with Pedro and Armando, i.e., think that Ceja
needs to align itself with a distributor in order to gain market traction and necessary retail and menu
*Ceja’s case production is not enough to get the attention of major distributors. Major distributors look for
high production wineries, 50,000 cases or more, so they won’t be caught with a short supply. The direct to
consumer distribution channel holds the highest promise of increasing sales for Ceja. This channel
produces more profit than the other channels. Ceja is poised to take advantage of increased traffic in Napa
If I had a chance to speak with the Cejas, I would tell them to hire a professional marketing manager,
explore niche distributors, and maintain the quality of the wine. These things are critical for them to keep
the business around for their kids and the generations to come.
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Teaching tip: Instructors should remind students that, over the next ten years, it is likely that the wine
4. What segmenting dimensions (behavioral, geographic, demographic) will you use to identify
and describe the potential target markets for Ceja Vineyards? Justify your choices.
Behavioral
Owing to Ceja’s position as a boutique small production winery, there is a need to leverage the medium
rate of use, positive and ongoing purchase relationship, and insistent and preferential brand familiarity of
Another behavioral segmenting dimension Ceja should consider is targeting the specialty/celebratory/
event kind of shopper. This shopper is looking for the special bottle of wine for celebratory events such as
Geographic
Ceja needs to target visitors to the Napa/Sonoma wine country, or those looking to have that experience
by ordering a wine from that region on the menu at a fancy restaurant or integrating wine from this region
Moreover, Amelia Ceja, as well as the other family shareholders, has strong ties to Mexico. *The question
is: how will this linkage with the country of familial origin be sustained once the next generation of the
family inherits the business (assuming the children want to do this)? Ceja’s next generation may not want
Demographic
Within Ceja’s geographic focus on Californians, ethnicity can and should be a primary segmenting
solely to Hispanics, but also descendants of immigrants from multiple races.
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Students who had Latino heritage commented:
The family story that Ceja’s brand embodies has great potential appeal to the acculturated and partially–
event is promising for future potential events where they can further emphasize their Mexican heritage.
Going beyond California, Ceja should put particular emphasis on targeting states such as Florida, Texas,
and New Mexico where the Hispanic population is higher relative to the rest of the country. Although
costly, the reward for capturing the Hispanic market is seemingly worth the risk.
Looking at history and current trends there is going to be a massive influx of Latinos for the next twenty to
thrty years. We all come here for prosperity and for the “American Dream.” For companies in the wine
business and other industries this segment is going to play a major role. The right business strategy is going
to make business owners and businesses very wealthy. The real question here is whether Latinos are going
to buy wine? The Ceja family is banking on a yes answer. I would say that third and fourth generation
Owing to Ceja’s positioning as a premium wine brand, there are a number of qualifying dimensions such
as income level and education, that are less of an option for Ceja to consider. Given the high price points
(per bottle) of its branded wines, Ceja needs to target consumers with incomes in the range of $40,000–
*Should current population trends play out, Ceja is likely to primarily target consumers in the baby boom
age dimension, however, they could also consider targeting the growing Millennial consumer segment,
5. Using the segmenting dimensions you described in question 4, describe in detail four
potential target markets for Ceja Vineyards.
Hispanic shoppers
Hispanics make an obvious choice for Ceja. Just as Round Hill Vineyards & Cellars did, Ceja should
certainly find a way to directly target the Hispanic consumer, which has an estimated $653 billion in
Out of the 40 million plus Hispanics in the United States, 20 percent of that population earns above
$100,000 per year, 9 percent are “mostly acculturated,” and 66 percent are “partially acculturated.” The two
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acculturated groups are important because they are most agreeable, out of the Hispanic population, with the
American culture, are educated, have high disposable incomes, and are not firmly rooted in their Latino
There is likely to be some debate over whether the immigrant heritage of Ceja’s founders should be
positioned to appeal to Hispanic segments that are 96 percent more likely to spend more than $20 on a
bottle of wine than non–Hispanics. Could Ceja’s heritage make this consumer group a profitable target for
Ceja’s high–end wine brands?
Pros
+ Potential to attract a percentage of large untapped market
+ Consumers can relate to and understand Ceja’s history
Cons
– Wine not traditionally served to accompany spicy food
– Language barriers and income levels may hinder use of social and other promotional media
– Price sensitivity is key driver of success in this segment
High-End Local Restaurants/Hotels
This is a logical target market segment for Ceja; upscale hotels, cafés, and restaurants attracting the
warehouse stores. Would Ceja have particular success in targeting Hispanic owned and operated high–end
tourism and hospitality establishments, or at least those focused on supporting local or ethnic businesses?
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Pros
+ Potential to attract a percentage of boutique, high–end market
Cons
– Wine has stigma of not being traditionally used to accompany Mexican food
– U.S. Hispanics not homogeneous, so techniques chosen will only reach some
Special Occasion Shoppers/Tourists/Events
By positioning its wine in local wine boutiques, hotel lobby gift shops, local retailers that do not require
One student shared some inspirational ideas about how to attract special occasion shoppers and develop
tie–ins with existing events in the Hispanic community:
Ceja should promote and hold events for its wine club members and customers to keep them interested, as
well as gain potential members. Given that Amelia prepared her grandmother’s recipes in college, Ceja
family’s Latino heritage and market to the Hispanic segment, the winery should consider holding or
participating in Cinco de Mayo, César Chávez (family has a connection), and El Dia de Los Muertos “Day
of the Dead” holiday events.
Particularly appropriate would be targeting the Hispanic special occasion shopper who is not familiar with
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Pros
+ Potential to develop synergies with wine club member events
Cons
– Wine has stigma of not being traditionally used to accompany Mexican food
– Hispanic group is not all the same, so techniques chosen will only reach some
Wine Club Members
This is the most obvious of Ceja’s potential target markets because sales to club members increase gross
wine club events and where club members will feel empowered and privileged to bring their friends and
family to share in the Ceja experience. One group of students, in their oral presentation of the case, went
even further to suggest that:
Selling direct–to–consumer provides the family with higher profit margins. Ceja needs to expand its wine
Wine club purchases currently make up about 20 to 30 percent of Ceja’s case sales. Given its commitment
to use social networking media as well as a modest investment in customer relationship management
technologies, Ceja could achieve the forecasted increase in wine club membership and thereby increase
its direct sales to consumers by an additional 20 to 30 percent. Should Ceja focus on building out its wine
club?
Pros
+ Loyal wine club membership has been growing rapidly, 233 percent growth from 2005 to 2006 (from
Exhibit 6 in the case)
Cons
– Time and labor–intensive to manage memberships and organize events
– Probably of limited scope—potential draw within California, but unknown from proximate states with
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6. Develop screening criteria using both qualitative and quantitative factors, to evaluate the
attractiveness of potential target markets for Ceja Vineyards.
Ceja needs to sustain its position as a premium, high–end family winery. One student said:
The most important thing the Ceja’s can’t lose is their love and dedication to making wine. To some it’s
The family owners have no plans to increase production above 20,000–25,000 cases over the next five
years, and will need to decide whether to target niche or mass markets to absorb this increased supply of
Positioning Ceja in the market requires consideration of target markets, competitors, and uniqueness or
competitive advantage. As to rivals, Ceja has many in the region of Carneros and northern California, but
few wineries are Hispanic owned and operated. The Hispanic heritage will help with their positioning in
the market, particularly with the “mostly acculturated” sub–segment (9 percent of all Hispanic–
When it comes to creating a consistent message versus a different message among the target markets,
Ceja Vineyards would benefit from a consistent message. Even though the target markets are different,
most consumers—i.e., those 75 percent of Hispanic–American consumers comprising both the “partially
Quantitative Criteria—Examples
• Increase case sales to wine club members by 20–30 percent
Qualitative Criteria—Examples
• Nature of business preferred
o Must not interfere with existing grape sourcing relationships
o Aligned with founder focus on making wine available to all people and part of everyday
• Constraints
o Nature of business to exclude use of large distributor
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• Geographic
o U.S., Mexico, Canada only (to be revaluated after completion of integrated winery
• General
o Make use of current grape production
o Leverage founder immigrant and Hispanic heritage
7. Use the screening criteria to generate options and develop a recommendation to the owners
of Ceja Vineyards.
Once students have agreed upon the screening criteria for choosing a strategy and have evaluated Ceja’s
financial capacity to make any changes in its marketing strategy, instructors should push them to make
One student opined that tight cost control ought to be a primary consideration in choosing which course
of action to pursue, while others spoke of holding to modest and sustainable growth targets via niche
*Ceja must have tight cost control over factors such as packaging, shipping, database management, and
promotion in order to achieve the highest margin. Neglecting to do so will make direct sales not as
profitable as other methods available. Through the further emphasis of sales in its wine club, Ceja can
Ceja Vineyards should continue to build brand equity and market its wines to an exclusive market. An
online wine shop will compliment its two tasting rooms, building a powerful direct to consumer channel.
*The Ceja family has proven that the “American Dream” truly exists and is plausible. The fragmented
About half of the students will recommend against targeting Hispanic consumers, the typical argument
being as follows:
*Although there is a lot of discussion among the family members about how to market to Latinos, I do not
million potential consumers, but the white demographic holds nearly five times that amount. It would be
irresponsible to pursue this route.
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To recap, students should reach a consensus that building out wine club memberships is the highest
same time preserves its high prices per bottle. See Exhibit IM-5 for more detail on the options and the
pros and cons of each.
To heighten this part of the discussion or sharpen debate over the question of marketing to Hispanics,
Suggestions for Wrap-Up
There is little question that the potential for Ceja lies in moving beyond its current “scattershot” approach
to customer targeting, but doing so via diversification into new products at different, perhaps lower, price
points might prove be a double–edged sword.
Offering an Hispanic–oriented, lower–priced product can be an effective strategy for those wine
Should Ceja’s management reach a consensus on the fourth option in order to promote to multiple
Hispanic as well as current non–Hispanic segments, it needs to find ways to communicate those cultural
Pairing its wines with Mexican food, as alluded to in the final section of the case (see the “kitchen
Finally, emerging marketing concepts, such as multicultural marketing and Web 2.0 are not only affecting
how customers are identified in the wine industry, but also in just about every consumer product industry.
How to target the Hispanic consumer market and how and when to segment and address the needs of this
rapidly growing customer base is a major marketing issue in the U.S. Proliferation of choices to reach
niche markets is a reality: the days when 80 percent of consumers purchased 20 percent of products are
EPILOGUE
Amelia did indeed have the last word. Ceja began creating direct marketing materials to reach Hispanics,
but previous price points were maintained and no new varietal brands were added to the product mix in
2007–2008. Ceja maintained its existing relationships with boutique distributors, while no large