Innovative Maori Product Improvement: An Analysis of Tohu Wines

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1. Introduction

Tohu Wines is a Maori-owned wine enterprise established over 20 years ago in Marlborough, New Zealand. The company is an organic-based business that gets its competitive advantage from using home grown raw materials using cultural and traditional values of the Maori people. Tohu Wines has attracted global attention from this business model, including an emphasis on using organic products and a supply chain that is chiefly founded on the Maori way of life. The company prides itself of bearing the responsibility to uphold the legacy of the forefathers and founding members of the Maori community, who believed in the value of hard work, fairness, creativity, and being one with the natural environment ( ). Tohu Wines focuses on creating internationally recognized products while keeping true to the deeply held values of the Maori including kindness, excellence, and guardianship (manaakitanga, rangatiratanga, and kaitiakitanga). The bottle design is one of the most important selling points for the company, bearing a logo derived from the koru pattern that symbolizes the natural world, growth, and life. Tohu, meaning signature, is the brainchild of several Maori families working to craft a path for other business people in New Zealand.

Even with the elegant design and a focus on being one with nature, Tohu Wines has not performed very well in the international wine market. Therefore, an issue emerges to combine the creative design, the focus on nature, the emphasis on a traditional approach, and a supply chain of handcrafted solutions with better and innovative market approaches in an attempt to steer the company forward. The aim of this current report is to identify a gap in the company’s market to introduce the proposed innovation to solve customer problems. It will also develop a market evaluation of the proposed improved innovation process using relevant evidence to support the launch of the proposed improved innovation. These elements will all be applied and integrated with relevant Maori values to generate enhanced value for the new improved innovation. Lastly, the report will undertake a business risk assessment for the introduction of the new/improved innovation for the business enterprise and adopt the Lean Canvas model to give innovative suggestions through analysis.

The current report is divided into several sections. The first section, the introduction, focuses on giving a brief introduction of the product and the company. The second section is an analysis of the current problems that Tohu Wines is facing, including a perspective of the solutions from a customer’s positioning and a review of its alignment to Maori values. The third section performs a deep analysis of the proposed solutions. The fourth section then gives an analysis of risks. The last section will conclude the analysis giving a restatement of the major issues found within the discussion.

Problem Solution Unique Value Proposition Unfair Advantage Customer Segments

Conventional bottling that is not unique to the brand positioning

Similar composition of wines to those in established international market

Zero application of an eco-friendly design in packaging

Green Marketing

Use different fruits unique to New Zealand (Kiwi fruits) to make the wine

Use sustainable packaging away from the conventional wine bottling Eco-friendly packaging in line with the uniqueness of the product thatis made in alignment with Maori values of caring for the environment and excellence,creativity, and kindness Eco-friendly and sustainable packaging

Unique fruit use in wine making

Organic products

New Zealand wine market

Australian food and beverage sector

Organic-inded consumers

Populations conscious on health consumption

The upper middle class

Existing Alternatives Key Metrics Channels Early Adopters

Going Green

Green Marketing

Sustainable production

Organic products Consumer satisfaction

Customer retention

Sales

International market expansion Social media

Website

Supermarkets

E-commerce websites High disposable income

Eco-conscious

Organic product enthusiasts

Upper middle class

Health-conscious consumers

Cost Structure Revenue Structure

Product cost

Tax

Storage cost

Delivery cost

Promotion cost B2C

B2B

Figure 1: Lean Canvas Model for Tohu Wines

2. Analysis of Entrepreneurial Opportunities

The section will identify the gaps and opportunities available for Tohu Wines through an analysis of the company’s business activities. It will also provide business innovation proposals in line with the Maori values.

Identifiable Problems

Tohu Wines has a major problem when it comes to its decision making capacity. The company is run on a trust comprised of more than 4000 Maori families. Decision making and policy formulation takes a lot of time and every member of the decision making unit must be considered. From a consumer’s perspective, this means that some critical requirements of the customers, including small decisions on pricing strategies or distribution, take a lot of time before they can be approved. In other wine companies, the decision making process is fast and efficient. Another major impediment to an improved product is the use of a conventional packaging that is not unique to the brand positioning. Tohu Wines uses the same bottling design as any other wine company. While this can be seen as an advantage in maintaining conventionality to the wine culture, it is a problem to the company’s competitive advantage. The customer interprets this design as a reference to every other wine company or brand. As shown in image 1 below, the bottling design employed must not be 100% similar to the industry standards, in order to create uniqueness and to attract customers’ attention as a part of the promotional strategy.

Image 1: Sample Tohu Wines bottling compared to other wine brands

Another major issue with Tohu Wines is that the company uses the same raw materials applied in international and domestic wine making techniques. The only difference is that Tohu Wines uses organic products harvested and grown in line with Maori values of gentleness and kindness as well as guardianship to the natural environment. However, these values cannot be distinguished from every other brand available in the market. Therefore, the consumer is not able to differentiate Tohu’s products from those of the competition because the botting design and he composition of the wines are similar to the industry standards. The main competitors of Tohu Wines in the New Zealand domestic market, including those that already have footing in the Australian market, include: Chard Farm, Matariki Wines, Stonecroft, Martinborough Vineyard, Canterbury House, and Gibbston Valley Wines. To stand out from the competition, Tohu Wines must differentiate its product, suggestively by using the same Maori culture and planting traditions to grow kiwis for use in the wine making business. Because the traditional wine is in more demand, the kiwi wine suggested can be grown as an alternative product, to create uniqueness and to ensure that Tohu’s value proposition remains intact and noticeable.

The third problem is how the company, despite its value proposition of remaining true to the environment and the consumers, uses zero application of an eco-friendly design in packaging. ( ) highlights an ever increasing number of consumers demanding environmentally friendly products. Tohu Wines markets itself as an organic brand, conscious about the natural environment from the way it grows its raw products to the production process. However, these elements are not reflected in its packaging. For a company to be seen as having exceeded consumer demands and expectations in relation to remaining true to environment-related issues, a critical part of the strategy must include packaging of products ( ). In agreement to this position, ( ) and ( ) found that packaging is now a global communication tool and a way to market a brand. A customer is more likely to purchase a prduct that adheres to environmentally friendly packaging compared to brands that use the traditional packaging. As such, eco-friendly designs in packaging as a way to add value to the customer, because they include a need satisfaction in a design/packaging that meets expectations on environmental conservation ( ). Tohu Wines must consider the use of eco-friendly packaging and design in order to cater to a market that is increasingly driven towards conservation of the environment.

2.2 Discussion of Customer Segmentation Relevant to Tohu Wines

2.3 Suggested Solutions to the Problems Identified

3. Tohu Wines Market Evaluation

This third section analyses innovation at Tohu Wines using four main aspects that include; unique value proposition, unfair advantage, channels, and cost structure and revenue.

3.1 Unique Value Proposition

3.2 Unfair Advantage

3.3 Channels

3.4 Cost structure and revenue

4. Risks and Key Metrics

The following section evaluates the possible risks of the proposed improved product in Tohu Wine’s business process and provides solutions to use key metrics to avoid or reduce risks.

4.1 Inventory Risks

4.2 Customer Satisfaction Risks

4.3 E-commerce operation risk

5. Conclusion

Tohu Wines has a very attractive value proposition. However, it lacks uniqueness because of how it conforms to industry standards in terms of packaging and the composition of wine. The packaging is not in any way reflective of the carefully-crafted product that is made from organic plants that have been grown and produced in line with the Maori values of manaakitanga, rangatiratanga, and kaitiakitanga. Therefore, the present report gives a number of suggestions on how to make an improved and innovative packaging design as well as crafting an alternative product to solve these problems.

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