Free DipWSET D2: Wine Business Flashcards

ALL DECKS

Instructions before starting:

I RECOMMEND YOU LEAVE THE CARDS IN THE INITIAL ORDER AND USE THE “SHUFFLE” OPTION ONLY WHEN YOU MASTER THE WHOLE DECK (= 0 MISTAKE)

Read the Term on the Card and give your answer
Click on “Check the Answer” button to check your knowledge
Click on “Got It!” if your answer was correct

Click on “Need more practice” to review the card at the end of the deck and try answering another time

Click on “Shuffle” button to change cards order

GOOD LUCK!!

[qdeck]

[h] DipWSET D2 ALL DECKS

[i] DipWSET D2 – Wine Business Flashcards

ALL DECKS

I RECOMMEND YOU LEAVE THE CARDS IN THE INITIAL ORDER AND USE THE “SHUFFLE” OPTION ONLY WHEN YOU MASTER THE WHOLE DECK (= 0 MISTAKE)

– Read the Term on the Card and give your answer
– Click on “Check the Answer” button to check your knowledge
– Click on “Got It!” if your answer was correct
– Click on “Need more practice” to review the card at the end of the deck and try answering another time
– Click on “Shuffle” button to change cards order

[start]

[q unit=”2″ topic=”1″] GRAPE GROWING COSTS

[a] 1- VINEYARD ESTABLISHMENT

2- VINEYARD MANAGEMENT

[q unit=”2″ topic=”1″] VINEYARD ESTABLISHMENT COSTS

[a] 1- COSTS OF BUYING

2- COSTS BEFORE ESTABLISHMENT

3-COSTS FOR ESTABLISHMENT

[q unit=”2″ topic=”1″] VINEYARD MANAGEMENENR COSTS

[a] 1- LABOUR
2- MACHINERY & FUEL
3- SUPPLIES
4- VINEYARD TREATMENTS
5- WATER
6- ELECTRICITY
7- INSURANCE & DEPRECIATION

[q unit=”2″ topic=”1″] WINEMAKING COST STRUCTURE

[a] 1- WINERY ESTABLISMENT COSTS (CAPITAL COSTS)

2- WINEMAKING OPERATIONAL COSTS (OPERATING COSTS)

[q unit=”2″ topic=”1″] WINERY ESTABLISHMENT COSTS

[a] 1- BUYING / RENTING THE LAND

2- COSTS OF BUILDING

3- COSTS OF EQUIPMENTS

[q unit=”2″ topic=”1″] WINEMAKING OPERATIONAL COSTS (DETAILED)

[a] 1- GRAPE GROWING or FRUIT BUYING
2- LABOUR
3- MACHINERY & FUEL
4- WINERY MATERIALS
5-WATER
6-ELECTRICITY
7- MATURING / AGING
8- PACKAGING
9- DEPRECIATION

[q unit=”2″ topic=”1″] TOP-5  COUNTRIES FOR WINE CONSUMPTION

[a] USA
FRANCE
ITALY
GERMANY
CHINA

[q unit=”2″ topic=”1″] FACTORS INFLUENCING WINE DEMAND

[a] 1- SOCIAL FACTORS

2- ECONOMIC FACTORS

3- LEGISLATIVE & POLITICAL FACTORS

[q unit=”2″ topic=”1″] WHY SOCIAL FACTORS INFLUENCE WINE DEMAND

[a] BECAUSE THEY IMPLY CHANGES IN CONSUMPTION HABITS

[q unit=”2″ topic=”1″] 10 SOCIAL FACTORS (INFLUENCING WINE DEMAND)

[a] 1- REDUCTION OF NON ESSENTIAL SPENDING (2008 CRISIS)

2- NEW CONSUMPTION TRENDS (ROSE, SPARKLING)

3- REDUCTION OF CONSUMPTION OF TABLE WINES

4- YOUNGER PEOPLE DRINK LESS WINE (SEEN AS OLD-FASHIONED, LESS TIME IN PUB IN THE UK)

5- HEALTH CONCERNS (HEALTH AWARNESS, GOVERNMENT CAMPAIGNS)

6- CHANGE IN LIFESTYLE (FAST FOODS, NO TIME FOR LONGER MEALS)

7- REDUCED AVAILABILITY OF CHEAP WINES (VINE PULL SCHEMES)

8- CHANGES IN CONSUMER PREFERENCES (e.g. PROSECCO IN US/UK)

9- CHANGES OF REPUTATION 10- CHANGES IN SPENDING PATTERNS

[q unit=”2″ topic=”1″] EXAMPLES OF CHANGES IN CONSUMER PREFERENCES

[a] 1- ROSE = USA

2- SPARKLING = PROSECCO (US / UK)

3- REDUCTION OF CONSUMPTION OF FORTIFIED WINES (higher abv.)

4- MEDIUM SWEET GERMAN WINES = OUT OF FASHION (Liebfraumilch)

[q unit=”2″ topic=”1″] EXAMPLES OF CHANGES IN REPUTATION OF A PATRICULAR REGION, STYLE OF WINE, BRAND, PRODUCER

[a] 1- WINE REVIEWS

2- ONLINE INFLUENCERS

3- CRITICS (Jancis Robinson = UK; Wine Spectator = US)

[q unit=”2″ topic=”1″] EXAMPLES OF CHANGES IN SPENDING PATTERNS

[a] 1- PRICE SENSITIVE MARKETS (UK, Germany)

2- PREMIUMISATION (US)

[q unit=”2″ topic=”1″] PRICE SENSITIVE MARKETS  (CHARACTERISTICS)

[a] 1- CONSUMERS UNWILLING TO PAY MORE THAN
LOWEST PRICE POSSIBLE FOR A GIVEN STYLE OF WINE

2- FIERCE COMPETITION

3- CAN BE PERCEIVED AS NON-PROFITABLE MARKETS BY SOME PRODUCERS

[q unit=”2″ topic=”1″] PREMIUMISATION (DEFINITION)

[a] CONSUMERS WILLING TO SPEND MORE PER BOTTLE AS THEY ARE BUYING LESS VOLUME (especially for wine perceived as higher quality wines)

[q unit=”2″ topic=”1″] CAUSES OF INCREASED WINE CONSUMPTION IN CHINA

[a] 1- GROWING MIDDLE CLASS

2- SHOW WEALTH & STATUS

[q unit=”2″ topic=”1″] ECONOMIC FACTORS INFLUENCING WINE DEMAND

[a] 1- STRENGTH OF THE ECONOMY

2- FLUCTUATIONS IN CURRENCY EXCHANGE

3- CHANGES TO THE MARKET 

[q unit=”2″ topic=”1″] DISPOSIBLE INCOME
(Definition)

[a] THE AMOUNT OF MONEY A PERSON HAS AFTER PAYING TAXES 

[q unit=”2″ topic=”1″] STRENGTH OF THE ECONOMY
(ECONOMIC FACTOR INFLUENCING WINE DEMAND)

[a] 1- STRONG ECONOMY = HIGHER DISPOSIBLE INCOME

2- LOWER DISPOSIBLE INCOME = LOWER WINE SALES

3- ECONOMIC DEPRESSION
= CUSTOMERS SWITCH TO CHEAPER WINES
= CUSTOMERS SWITCH TO LESS EXPENSIVE
ALCOHOLIC DRINKS 

[q unit=”2″ topic=”1″] FLUCTUATIONS IN CURRENCY EXCHANGE
(ECONOMIC FACTOR INFLUENCING WINE DEMAND)

[a] 1- WEAK PRODUCER CURRENCY = HIGHER PROFITS
(=higher investments in winery)

2- WEAK PRODUCER CURRENCY = COST MORE TO IMPORT EQUIPMENTS, SUPPLIES… (if needs to import them)

3- STRONG PRODUCER CURRENCY = less competitive price for export markets
= risk of loss sales & loss of profits

 

[q unit=”2″ topic=”1″] CHANGES TO THE MARKET
(ECONOMIC FACTOR INFLUENCING WINE DEMAND)

[a] 1- IF A PRODUCER DISAPPEARS = OPPORTUNITY FOR SURVIVING COMPETITORS (raise prices…)

2- IF NEW PRODUCER COME TO THE MARKET (usually with lower prices)
= FORCES COMPETITORS TO LOWER PRICES 

[q unit=”2″ topic=”1″] LEGISLATIVE & POLITICAL FACTORS
(FACTOR INFLUENCING WINE DEMAND)

[a] 1- INCLUDE CHANGES OVER TIME

2- INCLUDE LOCAL, NATIONAL & GLOBAL LEVELS

3- LAWS PROHIBITING THE SALE OF ALCOHOL

4- GOVERNMENT POLICIES TO REDUCE ALCOHOL CONSUMPTION

5- TAXATION

6- INTERNATIONAL TRADES

7- WINE LAWS 

[q unit=”2″ topic=”1″] 4 TYPES OF LEGISLATIONS PROHIBITING OR LIMITING THE SALES OF ALCOHOL

[a] 1- MINIMUM DRINKING AGE

2- PROHIBITION

3- STATE OWNED MONOPOLIES

4- 3-TIER SYSTEM (USA) 

[q unit=”2″ topic=”1″] CONSEQUENCES OF LAWS PROHIBITING
OR LIMITING THE SALE OF ALCOHOL

[a] 1- LIMIT WINE SUPPLY

2- INCREASED PRICES

[q unit=”2″ topic=”1″] WHY GOVERNMENT POLICIES TO REDUCE ALCOHOL CONSUMPTION

[a] 1- DUE TO PUBLIC HEALTH ISSUES

2- DUE TO INCREASED CRIMINAL BEHAVIORS

[q unit=”2″ topic=”1″] EXAMPLES OF GOVERNMENT POLICIES TO REDUCE ALCOHOL CONSUMPTION

[a] 1- LOI EVIN IN FRANCE (limit on advertising)

2- MINIMUM UNIT PRICING (Scotland)

3- BLOOD ALCOHOL CONCENTRATION (BAC) BEFORE DRIVING

[q unit=”2″ topic=”1″] WHY GOVERNMENTS IMPOSE TAXATION ON WINE

[a] 1- MAJOR SOURCE OF REVENUE FOR GOVERNMENT

2- PROTECT & DEVELOP NATIONAL PRODUCTION & AUTONOMY

3- REDUCE WINE CONSUMPTION (higher prices = dissuasive) 

[q unit=”2″ topic=”1″] 4 EXAMPLES OF GOVERNMENT TAXATION

[a] 1- VAT

2- SPECIFIC ALCOHOL TAXES

3- IMPORT DUTIES

4- CATEGORY DUTIES 

[q unit=”2″ topic=”1″] EXAMPLE OF CATEGORY DUTY

[a] IRELAND
DIFFERENCE STILL WINE TAXES vs. SPARKLING WINE TAXES (higher)

CONSEQUENCES = REDUCED CONSUMPTION OF SPARKLING WINES 

[q unit=”2″ topic=”1″] EXCISE DUTY ON WINE IN HONG KONG

[a] ABOLISHED TO BECOME “WINE TRADING HUB” OF EASTERN ASIA 

[q unit=”2″ topic=”1″] CUSTOM DUTIES
(definition)

[a] TRADE TARIFFS ON IMPORTED GOODS 

[q unit=”2″ topic=”1″] E.U. TRADE TARIFFS

[a] 1- MEMBERS OF THE E.U. TRADING INSIDE E.U. = 0 TARIFFS

2- NON E.U. MEMBERS STATES = TRY TO ENTER TRADE AGREEMENTS 

[q unit=”2″ topic=”1″] CONSEQUENCE OF UK LEAVING THE E.U.

[a] 1- NEGOTIATED TARIFFS ON IMPORTED AUSTRALIAN WINES

2- CHANGE IN BRITISH CONSUMPTION HABITS

[q unit=”2″ topic=”1″] 2 EXAMPLES OF TRADE TARIFFS

[a] 1- US/CHINA TRADE WAR = CHINA IMPOSED TARIFFS ON IMPORTED US WINES

2- ARGENTINA (2010s) = ALSO IMPACTED IMPORTED WINE SUPPLIES FOR ARGENTINIAN PRODUCERS 

[q unit=”2″ topic=”1″] IMPACT OF TRADE WARS

[a] NEGATIVE PERSISTING FEELING = CUSTOMERS CONTINUE BOYCOTTING PRODUCTS AFTER TARIFFS WERE DISAPPEARED 

[q unit=”2″ topic=”1″] MAIN REASONS WHY CUSTOMERS ARE DRAWN TO WINES FROM A PARTICULAR G.I.
(= GEOGRAPHICAL INDICATION)

[a] 1- ENJOYED WINES FOR THAT PARTICULAR G.I. IN THE PAST

2- BECAUSE OF STRONG REPUTATION 

[q unit=”2″ topic=”1″] IMPACTS OF G.I. CREATION ON PRODUCERS

[a] 1- INCREASED DEMAND AND RECOGNITION FOR WINES FROM THAT G.I.

2- ALLOW PRODUCERS TO INCREASE PRICES 

[q unit=”2″ topic=”1″] PDO RULES DIFFERENCES
(E.U. vs NON E.U.)

[a] 1- E.U. = VERY STRICT

2- NON E.U. = LITTLE LIMITATIONS
= REACT MORE QUICKLY
TO CHANGE IN CUSTOMER PREFERENCES 

[q unit=”2″ topic=”1″] WINE LAWS IN CHINA

[a] 2012, STOP TRADITION OF LAVISH GIFTING TO GOVERNMENT OFFICIALS + ANTI-EXTRAVAGENCE CAMPAIGN

CONSEQUENCES = PURCHASE OF PREMIUM & SUPER-PREMIUM WINES DROPPED IMMEDIATELY 

[q unit=”2″ topic=”1″] FACTORS INFLUENCING SUPPLY OF WINE

[a] 1- AMOUNT OF WINE PRODUCED

2- LEGISLATION

[q unit=”2″ topic=”1″] 7 CATEGORIES INFLUENCING AMOUNT OF WINE PRODUCED (SUPPLY OF WINE)

[a] 1- AREA UNDER VINE

2- VINE PULL SCHEMES

3- E.U. RESTRICTIONS ON PLANTING NEW VINEYARDS (1% annual growth)

4- CONVERSION TO OTHER USES

5- ABANDONMENT OF RURAL AREAS

6- HUMAN FACTORS (modern techniques & equipments)

7- NATURAL FACTORS

[q unit=”2″ topic=”1″] 4 DETAILS ON AREA UNDER VINES

[a] 1- HIGHER PLANTING SURFACE = HIGHER TOTAL WINE PRODUCTION

2- 90% OF VINEYARDS WORLDWIDE = USED TO PRODUCE WINE

3- OVER 50% OF CHINA VINEYARDS = USED TO PRODUCE TABLES GRAPES

4- E.U. = OVER 50% OF WORLD WINE PRODUCTION

[q unit=”2″ topic=”1″] EXAMPLES OF VINE PULL SCHEMES

[a] 1- E.U. (South of France, Spain, Italy)

2- AUSTRALIA

3- NEW-ZELANDE

4- ARGENTINA

[q unit=”2″ topic=”1″] 3 DETAILS ABOUT E.U. VINE PULL SCHEMES

[a] 1- DURING THE 1980s

2- WINE PRODUCTION SURPLUS = “WINE LAKE”

3- MAIN AREAS AFFECTED = SOUTH OF FRANCE, SPAIN, ITALY

[q unit=”2″ topic=”1″] 4 EXAMPLES OF CONVERSION TO OTHER USE (FACTOR INFLUENCING WINE SUPPLY – AMOUNT OF WINE PRODUCED)

[a] 1- APPLES = SOUTH AFRICA (Elgin)

2- PISTACHIOS & ALMONDS = USA

3- REAL ESTATE & TOURISM = MADEIRA

4- BUSINESS OFFICES = USA (California)

[q unit=”2″ topic=”1″] 5 DETAILS ON NATURAL FACTORS (FACTOR INFLUENCING WINE SUPPLY – AMOUNT OF WINE PRODUCED)

[a] 1- E.U.   = OVER 50% OF WORLD WINE PRODUCTION
                             = ANY NATURAL EVENT (drought, hail…) IMPACT THE WORLD MARKET

2- GLOBAL CLIMATE CHANGE

3- GOOD VINTAGE = RISK OF OVER PRODUCTION

4- BAD VINTAGES = RISK OF UNDER SUPPLY

5- NATURAL FACTORS INFLUENCE BOTH POTENTIAL QUANTITY & QUALITY PRODUCED

[q unit=”2″ topic=”1″] LEGISLATION IMPACT ON SUPPLY OF WINE

[a] 1- INCREASED NUMBER OF GIs AROUND THE WORLD

2- STRICT PDOs RULES IN EUROPE

[q unit=”2″ topic=”1″] 5 AIMS OF GIs

[a] 1- STYLE DEFINITION

2- SUPPLY & DEMAND MORE IN LINE

3- REDUCE DOWNWARD PRICE PRESSURE

4- MORE PRICE CONTROL FOR PRODUCERS
(allow long term investments)

5- MOVE WINE AWAY FROM COMMODITY PRODUCT
(easily substituable)

[q unit=”2″ topic=”1″] DOWNSIDE RISK OF GIs

[a] 1- WHEN SUCCESSFUL = PRESSURE TO EXTEND PRODUCTION AREA TO LESS SUITABLE SITES (e.g. Prosecco & Chianti)

2- COMPLAINTS FROM PDOs PRODUCERS COMPETING WITH WINE FROM LESS REGULATED COUNTRIES

[q unit=”2″ topic=”1″] SOLUTIONS TO LIMIT DOWNSIDE RISK OF GIs

[a] 1- GOVERNING BODIES
(e.g. Comite Champagne & Sherry Consejo Regulador)

2- INTRODUCTION OF “VIN DE PAYS” SYSTEM

[q unit=”2″ topic=”1″] HOW GOVERNING BODIES REDUCE DOWNSIDE RISKS OF GIs

[a] 1- ENSURE MARKET IS NOT OVERSUPPLIED

2- LIMIT NEW PLANTINGS 3- MAINTAIN PRICE LEVEL

[q unit=”2″ topic=”1″] CHALLENGES IN OVER SUPPLY OF WINE

[a] 1- GLOBAL WINE PRODUCTION
CONSISTENTLY EXCEDEED WINE CONSUMPTION
(structurally over supplied)

2- OVER SUPPLY REDUCED IN RECENT YEARS
– China & USA increased consumption
– limitations imposed on production 

[q unit=”2″ topic=”1″] CONSEQUENCES OF OVER SUPPLIED WINE MARKET

[a] 1- PRICES TEND TO FALL

2- HARDER FOR PRODUCERS TO SELL THEIR STOCKS

3- FORCED SALES AT LOWER PRICES = DEVALUE BRAND IMAGE

4- PRO-ACTIVE PRODUCERS SEEK NEW MARKETS

5- DEVELOPMENT OF PRIVATE LABELS 

[q unit=”2″ topic=”1″] PRIVATE LABELS

[a] WINE BOTTLED UNDER LABELS EXCLUSIVE TO SUPERMARKETS, DEEP DISCOUNTERS, BARS, RESTAURANTS… 

[q unit=”2″ topic=”1″] CHALLENGES IN UNDER SUPPLY OF WINE

[a] 1- GLOBAL LACK OF WINE SUPPLY IS UNUSUAL

2- EXCEPT BAD HARVEST (ex: 2017, bad harvest across Europe)

3- UNDER SUPLLY COMMON FOR PARTICULAR WINES
(ex: Premium & Super-Premium) 

[q unit=”2″ topic=”1″] CONSEQUENCES OF UNDER SUPLLY OF WINE

[a] 1- DISAPPOINTED CLIENTS

2- STRAINED BUSINESS RELATIONSHIPS

3- FINANCIAL PENALTIES FROM LARGE RETAILERS

4- CUSTOMERS SWITCH TO OTHER ALCOHOLIC DRINKS
(beer, spirits)

5- CUSTOMERS SWITCH TO CHEAPER ALTERNATIVES
(in the case of Premium wines)

6- CUSTOMER SWITCH MAY BECOME PERMANENT

[q unit=”2″ topic=”2″] VINEYARD ESTABLISHMENT 1st COST

[a] BUYING or RENTING THE LAND 

[q unit=”2″ topic=”2″] THE PRICE OF THE VINEYARD REFLECTS
(cost of buying)

[a] THE POTENTIAL TO PRODUCE HIGH QUALITY FRUITS 

[q unit=”2″ topic=”2″] EFFECT OF SCARCITY OF LAND ON BUYING A VINEYARD
(area under G.I. for instance)

[a] INCREASES VINEYARD PRICE
(GIs & PDOs limit the area of land available) 

[q unit=”2″ topic=”2″] COSTS BEFORE ESTABLISHING THE VINEYARD

[a] 1- SURVEYING THE LAND

2- SITE CLEARANCE
(removing large rocks & vegetation)

3- BUILDING ACCESS ROADS
(to the vineyard & within the rows) 

[q unit=”2″ topic=”2″] WHY SRUVEYING THE LAND BEFORE ESTABLISHING A VINEYARD

[a] 1- TO CHECK SUITABILITY TO VITICULTURE

2- TO IDENTIFY THE BEST GRAPE VARIETY FOR THAT LAND 

[q unit=”2″ topic=”2″] HOW TO SURVEY A LAND BEFORE ESTABLISHING A VINEYARD

[a] 1- SATELLITE IMAGING

2- SOIL SAMPLES

3- GEOLOGICAL STUDIES 

[q unit=”2″ topic=”2″] AVERAGE TIMING DELAY FROM PLANTING VINES TO PRODUCING WINE

[a] VINES NEED AT LEAST 3 YEARS TO PRODUCE QUALITY FRUITS 

[q unit=”2″ topic=”2″] WAYS TO FUND CAPITAL COSTS

[a] 1- LOANS

2- INVESTORS

3- PUBLIC SUBSIDIES

4- TAX INCENTIVES 

[q unit=”2″ topic=”2″] COSTS ASSOCIATED WITH ESTABLISHING A VINEYARD

[a] 1- BUYING & PLANTING VINES

2- STAKES & WIRES

3- DRAINAGE & PIPE WORKS (if needed)

4- PROTECTION AGAINST WEATHER HAZARDS
(wind breaks, frost protection…)

5- PROTECTION AGAINST ANIMAL PESTS
(high fences, electric fences, netting…)

6- BUYING MACHINERY & EQUIPMENTS
(tractors, machines…)

7- IN DRY AREAS = IRRIGATION SYSTEMS

[q unit=”2″ topic=”2″] DOWNSIDE OF LOAN FINANCING

[a] INTERESTS + CAPITAL REPAYMENTS 

[q unit=”2″ topic=”2″] DOWNSIDE OF FINANCING THROUGH INVESTORS

[a] 1- CONCEDE PART OF PROFITS

2- MAY IMPOSE HIGH RETURN ON INVESTMENT

3- PROVIDE THEM WITH VOTING RIGHTS = LOSS OF CONTROL

[q unit=”2″ topic=”2″] VINEYARD MANAGEMENT COSTS
(definition)

[a] COSTS OF RUNNING THE VINEYARD 

[q unit=”2″ topic=”2″] 7 CATEGORIES OF VINEYARD MANAGEMENT COSTS
(main categories)

[a] 1- LABOUR

2- MACHINERY & FUEL

3- SUPPLIES

4- VINEYARD TREATMENTS

5- WATER

6- ELECTRICITY

7- INSURANCE & DEPRECIATION 

[q unit=”2″ topic=”2″] LABOUR COSTS ASSOCIATED ON VINEYARD MANAGEMENT
(4 key takes)

[a] 1-VARIES ACCORDING TOPOGRAPHY, SIZE & OTHER FACTORS

2- ORGANIC & BIODYNAMIC VINEYARDS ARE MORE LABOUR INTENSIVE

3- VINEYARDS FOR PREMIUM & SUPER PREMIUM WINES ARE MORE LABOUR INTENSIVE

4- HIGHLY MECHANIZED VINEYARDS ARE LESS LABOUR INTENSIVE

[q unit=”2″ topic=”2″] EXAMPLES OF TOPOGRAPHY INFLUENCING LABOUR COSTS

[a] VINEYARDS ON STEEP SLOPES
(ex: Mosel…)

[q unit=”2″ topic=”2″] THE LABOUR COSTS vs. CAPITAL COSTS TRADE OFF

[a] 1- WHERE LABOUR COSTS ARE LOW = LESS INCENTIVE TO INVEST IN CAPITAL INTENSIVE EQUIPMENTS
(ex: Chile)

2- WHERE LABOUR COSTS ARE HIGH = INVESTMENT IN MACHINERY BETTER OPTION
(ex: Coonawarra) 

[q unit=”2″ topic=”2″] SEASONALITY OF LABOUR COSTS

[a] 1- AT HARVESTING = HIRE TEAM OF PICKERS FOR HAND-HARVESTING

2- REST OF THE YEAR = SMALLER STAFF OF MORE EXPENSIVE WORKERS
+ MANAGER 

[q unit=”2″ topic=”2″] OTHER COSTS ASSOCIATED WITH LABOUR

[a] COSTS OF HIRING, TRAINING & RETAINING STAFF 

[q unit=”2″ topic=”2″] 3 EXAMPLES OF COSTS REGARDING VINEYARD SUPPLIES

[a] 1- MATERIALS FOR REPAIR TO TRELLISING

2- PRUNING SHEARS

3- GLOVES TO WORKERS

[q unit=”2″ topic=”2″] 3 ELEMENTS OF VINEYARD TREATMENTS

[a] 1- AGRO-CHEMICAL COSTS
(herbicides, fungicides, insecticides…)

2- PREVENTING FUNGAL DISEASES
(cost of own weather station
or access to government-run weather station)

3- ORGANIC & BIODYNAMIC GROWERS STILL NEED
TRADITIONAL TREATMENTS
(ex: sulfur, Bordeaux mixture…)

[q unit=”2″ topic=”2″] 3 EXAMPLES OF ELECTRICITY COSTS
ASSOCIATED WITH VINEYARD OPERATING COSTS

[a] 1- FOR IRRIGATION SYSTEMS

2- FOR BIRD SCARERS

3- FOR FROST PROTECTION 

[q unit=”2″ topic=”2″] 2 EXAMPLES OF VINEYARD INSURANCES

[a] 1- AGAINST FLOOD

2- AGAINST FIRE

[q unit=”2″ topic=”2″] DEPRECIATION
(Definition)

[a] THE REDUCTION IN THE VALUE OF AN ASSET OVER TIME, BASED ON ITS USEFUL LIFE 

[q unit=”2″ topic=”2″] WINEMAKING COSTS
(cost structure)

[a] 1- WINERY ESTABLISHMENT
(capital costs)

2- WINEMAKING OPERATING COSTS 

[q unit=”2″ topic=”2″] WINEMAKING OPERATING COSTS
(Definition)

[a] COSTS INVOLVED IN RUNNING THE WINERY 

[q unit=”2″ topic=”2″] 3 CATEGORIES OF WINERY ESTABLISHMENT COSTS

[a] 1- BUYING or RENTING THE LAND
TO BUILD THE WINERY

2- COSTS OF BUILDING THE WINERY

3- COSTS OF EQUIPMENTS
(presses, pumps, maturing vessels, bottling line…)

[q unit=”2″ topic=”2″] 3 WAYS OF FUNDING WINERY ESTABLISHMENT COSTS
(capital costs)

[a] 1- THROUGH LOANS/MORTGAGE

2- THROUGH OWNER OWN CAPITAL

3- THROUGH INVESTORS 

[q unit=”2″ topic=”2″] 4 MAIN ACTIVITIES INVOLVED IN WINEMAKING OPERATING COSTS
(active verbs)

[a] 1- MANAGING THE WINERY

2- PRODUCING THE WINE

3- MATURING THE WINE

4- BOTTLING & PACKAGING
THE FINAL PRODUCT 

[q unit=”2″ topic=”2″] 9 CATEGORIES OF WINEMAKING OPERATING COSTS
(costs structure)

[a] 1- GRAPE GROWING or FRUIT BUYING

2- LABOUR

3- MACHINERY & EQUIPMENTS
(running costs)

4- WINERY MATERIALS

5- WATER
(e.g. cleaning)

6- ELECTRICITY

7- MATURATION

8- PACKAGING

9- DEPRECIATION

[q unit=”2″ topic=”2″] 3 MAIN COSTS ASSOCIATED WITH MATURING WINE

[a] 1- AGING VESSELS COSTS

2- STORAGE SPACE COSTS + OVERHEADS (electricity…)

3- LOSS OF CASH FLOW
(money tied up in maturing stocks) 

[q unit=”2″ topic=”2″] OTHER COSTS IMPACTING WINE PRODUCERS’ PROFITABILITY
(5 main categories)

[a] 1- TRANSPORTATION

2- TAXES & DUTIES

3- SALES

4- MARKETING

5- INDIRECT COSTS

[q unit=”2″ topic=”2″] ROUTE TO MARKET
(Definition)

[a] HOW A BOTTLE OF WINE GETS FROM THE PRODUCER TO THE CUSTOMER

[q unit=”2″ topic=”2″] SUPPLY CHAIN
(Definition)

[a] THE NETWORK OF ORGANIZATIONS AND ACTIVITIES INVOLVED
FROM THE CREATION OF A PRODUCT
TO ITS DISTRIBUTION AND SALE TO THE FINAL CUSTOMER 

[q unit=”2″ topic=”2″] IN WINE INDUSTRY, 1st STAGE OF SUPPLY CHAIN

[a] GRAPE GROWING

[q unit=”2″ topic=”2″] CAPITAL COSTS
(Definition)

[a] MONEY SPENT BY A BUSINESS IN ACQUIRING, IMPROVING OR MAINTAINING LONG-TERM ASSETS SUCH AS LANDS, BUILDINGS & EQUIPMENTS

[q unit=”2″ topic=”2″] COSTS OF GROWING GRAPES
(structure)

[a] CAPITAL COSTS + OPERATING COSTS 

[q unit=”2″ topic=”2″] USE OF AIR FREIGHT FOR WINE BOTTLES
(Circumstances)

[a] 1- SPECIAL CIRCUMSTANCES
– Bottles for competitions
– Bottles for fairs

2- HIGH VOLUME WINES FOR WHICH IT IS IMPORTANT TO HAVE CONTROL OVER THE FINAL PRODUCT

3- IMPORTANT DEADLINES
(Beaujolais Nouveau in Japan) 

[q unit=”2″ topic=”2″] SEA TRANSPORTATION

[a] 1- CALLED “DEEP SEA”

2- CHEAPEST METHOD (Cost/distance)

3- CONTAINERISATION IS ESSENTIAL

4- DOWNSIDE = SLOW

[q unit=”2″ topic=”2″] CAPACITY OF THE DIFFERENT TYPES OF SHIPPING CONTAINERS

[a] 1- SHIPPING CONTAINERS = 9000 to 10000 Liters of bottled wines

2- FLEXITANK = 24000 Liters of bulk wine

3- ISOTANK = 26000 Liters of bulk wine 

[q unit=”2″ topic=”2″] DISADVANTAGES OF BULK TRANSPORTATION

[a] 1- IF INFERIOR TO 15000 Liters = no cost advantages

2- ONLY POSSIBLE FOR LARGE VOLUME OF THE SAME WINE

3- NO CONTROL OVER BOTTLING PROCESS

4- NO CONTROL OF QUALITY OF FINAL PRODUCT

[q unit=”2″ topic=”2″] IMPORTATION COSTS

[a] 1- CUSTOM DUTIES & TAXES

2- LABELLING LAWS 

[q unit=”2″ topic=”2″] MAIN DIFFERENCES IN LABELLING LAWS

[a] 1- E.U. abv = nearest whole or half

2- USA = 1.5% VARIANCE ALLOWED

3- USA + MUST DISPLAY HEALTH WARNING 

[q unit=”2″ topic=”2″] ESTATE PRODUCER
(Definition)

[a] PRODUCER WINE FROM HIS OWN VINEYARD(S) OWNED OR LEASED

[q unit=”2″ topic=”2″] GROWERS
(Definition)

[a] 1- CHOOSE NOT TO PRODUCE OWN WINE

2- FOCUS ONLY ON GROWING GRAPES 

[q unit=”2″ topic=”2″] GROWER PRODUCER
(Definition)

[a] PRODUCE WINE FROM THEIR GRAPES AND SELL IT TO MERCHANTS
WHO MATURE AND SELL IT 

[q unit=”2″ topic=”2″] MERCHANTS
(Definition)

[a] BUY IMATURE WINES & GRAPES TO MAKE WINE, MATURE IT
& SELL IT UNDER MERCHANTS’ NAME 

[q unit=”2″ topic=”2″] ADVANTAGES OF USING DISTRIBUTORS

[a] 1- DEAL WITH LOCAL REQUIREMENTS

2- MARKET KNOWLEDGE

3- ESTABLISHED CLIENT LIST

4- DEALS EFFECTIVELY WITH LOGISTICS

5- PROVIDE INSURANCES

6- DISTRIBUTOR CARRY THE RISK OF LOSS/DAMAGES TO WINE 

[q unit=”2″ topic=”2″] DISADVANTAGES OF USING DISTRIBUTORS

[a] 1- CHARGE FEES (called Margin)

2- HORECA DISTRIBUTORS CHARGE HIGHER MARGIN

3- DISTRIBUTOR SALES & MARKETING MAY NOT BE IN LINE
WITH PRODUCER STRATEGY

4- DISTRIBUTOR MAY DROP LOW PERFORMING WINES

 

[q unit=”2″ topic=”3″] EFFECTS OF THE SCALE OF PRODUCTION ON HIGH VOLUME INEXPENSIVE WINES (give 3 elements)

[a] 1- SOLD WITH LOW MARGIN TO KEEP PRICE LOW

2- INVESTMENTS IN EXPENSIVE EQUIPMENTS
(able to process high volumes)

3- COSTS OF EQUIPMENT RECOUPED BY HIGH VOLUMES

[q unit=”2″ topic=”3″] ECONOMIES OF SCALE (definition)

[a] WHEN INITIAL INVESTMENTS & EQUIPMENT COSTS ARE SPREAD OVER A LARGE VOLUME OF PRODUCTION = lower the cost per unit produced

[q unit=”2″ topic=”3″] EFFECTS OF THE SCALE OF PRODUCTION ON LOW VOLUME & HIGH MARGIN WINES (3 elements)

[a] 1- MINIMAL ECONOMIES OF SCALE

2- NOT ENOUGH VOLUMES = SMALLER VINEYARDS, LOWER YIELDS

3- INITIAL INVESTMENTS RECOUPED BY HIGHER PRICES

[q unit=”2″ topic=”3″] LOW VOLUME SUPER PREMIUM CABERNET COST STRUCTURE FOR GROWING GRAPES (3 main categories)

[a] 1- LABOUR COSTS WAY HIGHER
(more interventions & manual works)

2- HIGHER REAL ESTATE TAXES
(based on higher land value)

3- HIGHER DEPRECIATION OF ASSETS

[q unit=”2″ topic=”3″] LOW VOLUME SUPER PREMIUM CABERNET SAUVIGNON
COST STRUCTURE FOR WINE MAKING
(4 main categories)

[a] 1- GRAPE GROWING COSTS
(the most important cost)

2- HIGHER MATURATION COSTS
(aging)

3- LABOUR & CELLAR OVERHEADS
(water, electricity, depreciation,
longer period in cellar, smaller barrels take more space)

4- HIGHER PACKAGING COSTS (glass, closures, labels, packaging)

[q unit=”2″ topic=”3″] 2 KEY ADVANTAGES OF MAKING HIGH VOLUME & INEXPENSIVE WINES (advantages on direct costs)

[a] 1- ECONOMIES OF SCALE AT MANY POINTS
IN THE PRODUCTION PROCESS

2- BUYING MATERIALS IN BULK

[q unit=”2″ topic=”3″] GENERAL INDIRECT COSTS TO BE ADDED TO TOTAL COSTS
(4 examples)

[a] 1- SALES & MARKETING

2- COST OF TRANSPORT

3- TAXES & DUTIES

4- OVERHAEDS COSTS OF RUNNING THE BUSINESS
(depreciation of any assets not directly used in production)

[q unit=”2″ topic=”3″] WHICH OPTION TO PREFER FOR TRANSPORTATION
OF WINE IN BOTTLES & WHY

[a] 1- PREFER FREIGHT FORWARDERS

2- BECAUSE SPECIALISED IN WINE TRANSPORT
(dedicated insurances & structure…)

3- BECAUSE BETTER EXPERTISE
(fragile, spoilage risks, risk of loss & damage…)

[q unit=”2″ topic=”3″] DOWNSIDE OF USING FREIGHT FROWARDERS

[a] MORE EXPENSIVE

[q unit=”2″ topic=”3″] 3 MAIN RISKS OF SPOILAGE
(sources)

[a] 1- HOT TEMPERATURES

2- DIRECT SUNLIGHTS

3- EXCESSIVE VIBRATIONS

[q unit=”2″ topic=”3″] COSTS OF AIR FREIGHT FOR WINE BOTTLES
(3 characteristics)

[a] 1- COST HEAVILY DEPENDENT ON WEIGHT
(bottles heavier than bulk alternatives)

2- BOTTLES TAKE MORE SPACE

3- BOTTLES MORE FRAGILE THAN CONTAINERS

[q unit=”2″ topic=”3″] WHEN TO USE AIR FREIGHT FOR WINE BOTTLES
(3 main circumstances of use)

[a] 1- SPECIAL CIRCUMSTANCES
(competition & fairs)

2- FOR HIGH VOLUME OF WINE WHEN PRODUCERS WANT
TO GUARANTEE THE QUALITY OF FINAL PRODUCT

3- FOR IMPORTANT DEADLINES
(e.g. beaujolais nouveau in Japan)

[q unit=”2″ topic=”3″] ADVANTAGE OF ROAD TRANSPORTATION

[a] VERY USEFUL FOR SHORT DISTANCE

[q unit=”2″ topic=”3″] ROAD TRANSPORTATION OVER LONG DISTANCE

[a] 1- MAY BE THE ONLY OPTION AVAILABLE
IN CERTAIN AREAS/COUNTRIES

2- LONG DISTANCE = VERY EXPENSIVE 

[q unit=”2″ topic=”3″] 2 OPTIONS OF RAIL FREIGHT

[a] 1- BY INDIVIDUAL PALLETS = EXPENSIVE

2- BY CONTAINERS = LESS EXPENSIVE

[q unit=”2″ topic=”3″] SEA TRANSPORTATION
(“Deep Sea”)

[a] 1- CHEAPEST METHOD

2- CONTAINERISATION ESSENTIAL

3- DOWNSIDE = SLOW

[q unit=”2″ topic=”3″] 2 MAIN OPTIONS FOR BULK WINE TRANSPORTATION

[a] 1- FLEXITANK = NON REUSABLE
(big plastic bag inside a regular container)

2- ISOTANK = REUSABLE
(non flexible)

[q unit=”2″ topic=”3″] KEY ADVANTAGES OF BULK TRANSPORTATION

[a] 1- CHEAPER
(less space & total weight than bottle equivalent)

2- MORE ENVIRONMENTALLY FRIENDLY

[q unit=”2″ topic=”3″] BULK TRANSPORTATION IS ATTRACTIVE FOR

[a] 1-SUPERMARKET & LARGE BUYERS
(keep low price point)

2- MAJOR BRANDS WHO SELL LARGE VOLUMES
(contribute to economies of scale)

3- FOR CHEAP WINES
(less risk of fraud & quality)

[q unit=”2″ topic=”3″] DISADVANTAGES OF BULK TRANSPORTATION

[a] 1- IF LESS THAN 15000 Liters = NO COST ADVANTAGE

2- ONLY FOR LARGE VOLUME OF SAME WINE

3- NO CONTROL OVER BOTTLING PROCESS
(format of bottles, labels…)

4- LOSS OF CONTROL OVER QUALITY OF FINAL PRODUCTS 

[q unit=”2″ topic=”3″] TRANSPORTATION INSURANCES USUALLY COVER

[a] 1- RISK OF LOSS

2- RISK OF DAMAGE

3- RISK OF SPOILAGE

[q unit=”2″ topic=”3″] ISSUES WHEN EXPORTING WINE

[a] 1- DUTIES

2- TAXES

3- LABELLING LAWS

4- THE MORE EXPORTING MARKETS INVOLVED
= THE HIGHER THE COMPLEXITY

5- BUILDING CLIENT LIST

6- COSTS OF MARKETING & SALES

7- DIFFERENT LOCAL CUSTOMER HABITS & TRENDS

8- RISK OF LOSS, SPOILAGE & DAMAGE

[q unit=”3″ topic=”2″] KEY ADVANTAGES OF USING DISTRIBUTORS

[a] 1- DEAL WITH LEGAL & LOCAL REQUIREMENTS

2- PROVIDE MARKET KNOWLEDGE & EXPERTISE

3- PROVIDE ESTABLISHED CLIENT LISTS

4- CARRY THE RISK OF LOSS, SPOILAGE & DAMAGE

5- EASIER TO ENTER NEW MARKETS

6- PROVIDE LOGISTICAL EFFICIENCY

7- TAKE UP SALES & MARKETING

8- MAY BE THE ONLY WAY TO ENTER SOME MARKETS
(e.g. USA 3-Tier System)

9- CAN INCREASE EXPOSURE TO SMALL PRODUCERS
(Portflio tastings)

10- SOME WINE BUYERS NOT REACHABLE OTHERWISE

[q unit=”2″ topic=”3″] EXPLAIN HOW DISTIBUTOR “MARGIN” IS COMPUTED

[a] 1- QUOTED AS A PERCENTAGE

2- Example = 1 euro of fee charged by distributor
= 1 + 10 (initial wine price)
Margin = 1/11 = 9.09% 

[q unit=”2″ topic=”3″] 5 MAIN CATEGORIES OF RETAILERS COSTS

[a] 1- PROPERTY COSTS

2- LABOUR

3- EQUIPMENT & MATERIALS

4- STORAGE COSTS

5- DELIVERY COSTS

[q unit=”2″ topic=”3″] BARS & RESTAURANTS PROPERTY COSTS

[a] VERY EXPENSIVE DUE TO THE LOCATION

[q unit=”2″ topic=”3″] COMPARISON BUYING A PROPERTY vs. RENTING IT

[a] 1- BUYING = NEED UPFRONT INVESTMENT
ASSET DEPRECIATION
PROPERTY OWNED

2- RENTING = CHEAPER INITIALLY
HAS TO MOVE AT THE END OF THE LEASE

[q unit=”2″ topic=”3″] PROPERTY COSTS FOR ONLINE-ONLY RETAILERS

[a] LESS EXPENSIVE BECAUSE WAREHOUSING AWAY FROM CITY CENTERS
(cheaper locations)

[q unit=”2″ topic=”3″] VARIABILITY OF STAFF COSTS OF RETAILERS

[a] 1- VARY ACCORDING TYPE OF RETAIL OUTLETS

2- STAFF SKILLS & EXPERTISE NEEDED
(the higher the skills & expertise the more expensive)

[q unit=”2″ topic=”3″] LABOUR COSTS ASSOCIATED TO SUPERMARKET RETAILERS

[a] LABOUR COSTS ARE LOW
(does not require high skills & expertise)

[q unit=”2″ topic=”3″] LABOUR COSTS ASSOCIATED WITH WINE RETAILERS & WINE SHOPS

[a] 1- EXPENSIVE
(high knowledge, engage with clients, advise clients)

2- STILL LOWER THAN BARS & RESTAURANTS

3- LOWER THAN FINE DINING RESTAURANTS

[q unit=”2″ topic=”3″] LABOUR COSTS ASSOCIATED WITH BARS & RESTAURANTS

[a] HIGHER COSTS THAN WINE SHOPS BECAUSE NEED ADDITIONAL STAFF
(to wait, clean, wash up…)

[q unit=”2″ topic=”3″] LABOUR COSTS ASSOCIATED WITH FINE DINING RESTAURANTS

[a] 1- THE HIGHEST COSTS OVERALL

2- HIGHER THAN BARS & RESTAURANTS BECAUSE HIGHER SKILLED & EXPERTISED STAFF + HEAD SOMMELIER (very costly)

[q unit=”2″ topic=”3″] HEAD SOMMELIER
(main characteristics)

[a] 1- OPERATE GENERALLY IN FINE DINING RESTAURANTS

2- HIGHLY KNOWLEDGEABLE? QUALIFIED & SKILLED

3- VERY EXPENSIVE

4- SELECT THE WINE LIST

5- MAKE PERSONNALIZED & DETAILED CLIENT ADVICE

[q unit=”2″ topic=”3″] GRADATION OF LABOUR COSTS ACCORDING TYPES OF RETAILERS
(comparison scale)

[a] SUPERMARKETS < WINE SHOPS < BARS & RESTAURANTS < FINE DINING 

[q unit=”2″ topic=”3″] HORECA
(meaning)

[a] HOtel + REstaurants + CAtering (CAfé) 

[q unit=”2″ topic=”3″] 6 EXAMPLES OF MAIN EQUIPMENT & MATERIAL COSTS FOR RETAIL SHOPS

[a] – TILL SYSTEM
– FRIDGE
– SHELVING
– DISPLAY CABINETS
– DISPLAY MATERIALS
– CLEANING EQUIPMENTS

[q unit=”2″ topic=”3″] EQUIPMENTS & MATERIALS COSTS ASSOCIATED WITH BARS & RESTAURANTS

[a] SAME AS FOR RETAILERS SHOPS 
+
TABLEWARE
+
GLASSES
+
EXPENSIVE WINE PRESERVATION SYSTEMS

[q unit=”2″ topic=”3″] STORAGE COSTS ASSOCIATED WITH RETAILING ACTIVITIES

[a] 1- STORAGE SPACE

2- TEMPERATURE CONTROL EQUIPMENTS

[q unit=”2″ topic=”3″] OPTIONS FOR STORAGE COSTS IN RETAILING ACTIVITIES

[a] 1- LOCAL STORAGE

2- EXTERNAL STORAGE
(additional costs)

[q unit=”2″ topic=”3″] LARGE CHAINS & SUPERMARKETS STORAGE COSTS

[a] SHARED COSTS THROUGH CENTRALIZED WAREHOUSES

[q unit=”2″ topic=”3″] DELIVERY COSTS ASSOCIATED WITH RETAILING ACTIVITIES

[a] 1- ONE OF THE MOST EXPENSIVE ELEMENT IN THE SUPPLY CHAIN

2- SURPLUS FOR
– extra fast delivery
– specific day delivery

3- FREE DELIVERY OVER CERTAIN TOTAL AMOUNT
(hidden discount)

[q unit=”2″ topic=”3″] MARGIN AT THE POINT OF SALE

[a] 1- VARIES ACCORDING COUNTRIES, COMPETITION, TYPE OF RETAILERS

2- USUALLY BETWEEN 30 & 50%

[q unit=”2″ topic=”3″] MARGIN AT THE POINT OF SALE FOR HORECA RETAILERS

[a] 1- MUCH HIGHER THAN NON HORECA

2- BECAUSE OF OPERATING COSTS

[q unit=”2″ topic=”3″] 3 MAIN CATEGORIES OF MARKETING COSTS

[a] 1- LABOUR COSTS

2- DESIGN & PRODUCTION
(labels + bottles)

3- MARKETING CAMPAIGNS

[q unit=”2″ topic=”3″] LABOUR COSTS ASSOCIATED WITH MARKETING ACTIVITIES
(large producers vs. small producers)

[a] 1- LARGE PRODUCERS = CAN HAVE THEIR OWN IN-HOUSE TEAM

2- SMALL PRODUCERS = USE EXTERNAL SERVICES

[q unit=”2″ topic=”3″] SOLUTION TO LOWER INDIVIDUAL MARKETING COSTS
& WHY IT LOWER COSTS

[a] BECOME A MEMBER OF

– Industry Association
(Consorzio in Italy & VDP in Germany)

– Generic Trade bodies
(Wines of Australia & Wines of South Africa)

BECAUSE IN CHARGE OF MARKETING MEMBERS’ WINES COLLECTIVELY
(reduced individual costs because of pooled efforts)

[q unit=”2″ topic=”3″] 4 CATEGORIES OF COSTS ASSOCIATED WITH CARRYING MARKETING CAMPAIGNS

[a] 1- ADVERTISING

2- PROMOTIONAL MATERIALS

3- SAMPLE BOTTLES
– tastings
– campetitions

4- PRICE PROMOTIONS
(important for large retailers)

[q unit=”2″ topic=”4″] LEGISLATIONS IMPACTING THE COSTS OF WINES

[a] 1- TAXES

2- TRADE BARRIERS

3- MINIMUM UNIT PRICING

4- DUTIES

5- SUBSIDIES

6- LABELLING LAWS

[q unit=”2″ topic=”4″] EXCISE DUTIES IN THE UK

[a] PAYABLE ON WINE ENTERING THE UK UNLESS STORED IN A “BONDED WAREHOUSE”

[q unit=”2″ topic=”4″] 2 OPTIONS REGARDING DUTIES PAYMENT
FOR WINES ENTERING THE UK

[a]

1- IF STORED IN OWN WAREHOUSE = WHEN IT ENTERS THE COUNTRY

2- IF STORED IN “BONDED WAREHOUSE” = DUTIES PAYABLE WHEN WINE LEAVE THE BONDED WAREHOUSE
(when ordered) 

[q unit=”2″ topic=”4″] DESCRIBE FINANCIAL ADVANTAGE OF “BONDED WAREHOUSE”

[a] 1- BONDED WAREHOUSE STORAGE COSTS COVERED LARGELY
BY ECONOMIES ON EXCISE DUTIES

2- CASH FLOW SITUATION IS IMPROVED
(not need for up front cash)

[q unit=”2″ topic=”4″] IMPACT OF IMPORT DUTIES ON PRODUCERS’ DECISION

[a] MAY DISSUADE TO EXPORT IN CERTAIN COUNTRIES
(abandon a market)

[q unit=”2″ topic=”4″] IMPACT OF TRADE TARIFFS IN THE E.U. MARKET
(regarding US wines)

[a] FEW MID-PRICED US WINES ON THE EUROPEAN MARKET BECAUSE THEY CANNOT COMPETE WITH WINES FROM CHILE & SOUTH AFRICA
(who benefits from Trade Agreements)

[q unit=”2″ topic=”4″] IMPACT OF CURRENCY FLUTUATIONS ON THE COSTS OF WINES

[a] CAN AFFECT WINE PRICES CONSIDERABLY

[q unit=”2″ topic=”4″] 8 OPTIONS TO PROTECT AGAINST CURRENCY FLUCTUATIONS

[a] 1- OPTION ON THE PHYSICAL WINE
(with the producer)

2- OPTION ON A CURRENCY
(with a Bank)

3- CONTRACT TO FIX THE PRICE
(with the producer)

4- CONTRACT TO FIX THE CURRENCY RATE
(with a Bank or the producer)

5- TRADING IN EUR or USD

6- OPEN FOREIGN CURRENCY ACCOUNT AT LOCAL BANK

7- OPEN ACCOUNT IN AN OVERSEAS BANK

8- BUY CURRENCY IN ADVANCE TO COVER A FUTURE ORDER

[q unit=”2″ topic=”4″] DEFINITION OF AN OPTION
(currency fluctations hedging)

[a] PAY A PREMIUM UPFRONT (option cost) IN ORDER TO RESERVE A CERTAIN AMOUNT OF PHYSICAL WINE (or currency) THAT COULD BE PAID AT A PRICE SET IN ADVANCE ON A SET DATE (or period)

IF THE OPTION IS ON PHYSICAL WINE (and not on a currency) THE PRODUCER MUST SET ASIDE THE AGREED VOLUME OF WINE

[q unit=”2″ topic=”4″] DIFFERENCE BETWEEN AN OPTION AND ENTERING A FIXED CONTRACT
(in currency fluctuations hedging)

[a] IN AN OPTION, THE IMPORTER CAN DECLINE THE WINE

IN A FIXED CONTRACT, THE IMPORTER MUST TAKE THE WINE
(even if the actual rate is more interesting than the contracted rate)

[q unit=”2″ topic=”4″] ADVANTAGES OF TRADING IN USD or EUR

[a] 1- EUR and USA HAVE HISTORICALLY SHOWN TO BE MORE STABLE (and more widely accepted) CURRENCIES

2- IMPORTERS HAVE MORE CERTAINTIES ON PRICE

[q unit=”2″ topic=”4″] WHY PRODUCERS MAY CHARGE A PREMIUM WHEN ENTERING A FIXED CONTRACT WITH A FOREIGN IMPORTER

[a] BECAUSE IT SHITS THE CURRENCY RISK TO THE PRODUCER

[q unit=”2″ topic=”4″] BUYING CURRENCIES TO COVER SPECIFIC ORDERS
(characterictics)

[a] 1- REQUIRES PRO-ACTIVE STANCE

2- REQUIRES IN-HOUSE COMPETENCIES

3- NOT CONSIDERED SPECULATION

4- USUAL TECHNIQUE FOR LARGE IMPORTERS

[q unit=”2″ topic=”4″] DISADVANTAGES OF OPENING AN ACCOUNT IN AN OVERSEAS BANK

[a] ALL THE DISADVANTAGES OF OPENING
A FOREIGN CURRENCY ACCOUNT AT A LOCAL BANK
+
RISKS ASSOCIATED WITH THE DIFFERENCE
IN BANKING REGULATIONS

[q unit=”2″ topic=”4″] ADVANTAGES OF BEING AN ESTATE PRODUCER

[a] 1- CAN CONTROL THE ENTIRE PROCESS
(growing, producing, bottling)

2- CHOOSE THE STYLE OF WINE

3- ENSURE QUALITY
(at all stages)

4- KEEP ALL THE “PRODUCTION PROFIT”

5- IF SELLS DIRECTLY TO CUSTOMERS = KEEP ALL THE PROFITS
= PRODUCTION PROFITS + DISTRIBUTION PROFITS

6- AUTHENTICITY FACTOR VALUED BY CUSTOMERS

7- ENABLE STORY TELLING

[q unit=”2″ topic=”4″] MAIN DISADVANTAGES OF BEING AN ESTATE PRODUCER

[a] 1- SUPPORT FULL MANAGEMENT & INDIRECT COSTS

2- SUPPORT EQUIPMENT COSTS
(direct capital costs)

3- SUPPORT FULL COSTS OF RUNNING THE ESTATE
(direct operational costs)

4- SUPPORT THE FULL RISK OF VINTAGE VARIATION
(both quality & quantity)

[q unit=”2″ topic=”4″] BEING A GROWER IS ATTRACTIVE FOR

[a] OWNERS OF SMALL VINEYARDS

[q unit=”2″ topic=”4″] WHY VINEYARD OWNERS MAY DECIDE TO BECOME SOLELY GROWERS

[a] 1- BECAUSE THE VINEYARD SIZE IS TOO SMALL

2- BECAUSE OF THE HIGH CAPITAL COSTS REQUIRED
(buying or hiring equipments)

3- BECAUSE THEY DO NOT WANT TO MARKET & SELL THEIR WINES

[q unit=”2″ topic=”4″] KEY ADVANTAGES OF BEING A GROWER

[a] 1- GENERATES EARLIER CASH FLOWS
(payment due when grapes are sold)

2- NO HEAVY WINEMAKING INVESTMENTS

3- NO WINEMAKING OPERATING COSTS

4- NO NEED FOR MARKETING

5- GROWERS CAN FOCUS THEIR EFFORTS
ON PRODUCING THE BEST GRAPES POSSIBLE

[q unit=”2″ topic=”4″] DISADVANTAGES OF BEING A GROWER

[a] 1- HIGH RISK OF VINTAGE VARIATIONS
(quality & quantity)

2- FLUCTUATIONS IN SUPPLY & DEMAND
(reduced prices + not able to sell all)

[q unit=”2″ topic=”4″] 2 OPTIONS FOR GROWERS TO SELL THEIR GRAPES

[a] 1- ENTER INTO A CONTRACT
(1 or more vintages)

2- SELL GRAPES ON SPOT MARKET

[q unit=”2″ topic=”4″] ADVANTAGES FOR GROWERS TO ENTER INTO A CONTRACT
TO SELL THEIR GRAPES 

[a] 1- GIVES GROWER CERTAINTY TO SELL GRAPES

2- LONGER TERM CONTRACTS
(greater security & strong relationships)

[q unit=”2″ topic=”4″] PROS & CONS OF SELLING GRAPES ON SPOT MARKETS
(for growers)

[a] 1- PRO = HIGHER REWARD 
(if supply < demand) = HIGHER PRICES

2- CON = HIGHER RISK
(if supply > demand) = LOWER PRICES

[q unit=”2″ topic=”4″] GROWERS-PRODUCERS
(definition)

[a] GROWERS THAT PRODUCE WINE FROM THEIR GRAPES & SELL IT
TO MERCHANTS THAT MATURE & BOTTLE IT

[q unit=”2″ topic=”4″] GROWER-PRODUCER FAIRLY COMMON IN
(which region)

[a] BURGUNDY

[q unit=”2″ topic=”4″] GROWER-PRODUCER MAIN CHARACTERISTICS

[a] 1- LOSS OF CONTROL OVER THE FINISHED WINE

2- MERCHANTS CHOOSE THE LENGTH & TYPE OF MATURATION

3- MERCHANTS CAN BLEND WINES FROM DIFFERENT PRODUCERS

[q unit=”2″ topic=”4″] GROWER-PRODUCER ADVANTAGES
(for grower-producer)

[a] 1- DO NOT NEED TO INCUR COSTS OF MATURATION

2- DO NOT SUPPORT MARKETING COSTS

[q unit=”2″ topic=”4″] GROWER-PRODUCER MAIN DISADVANTAGE
(for grower-producer)

[a] MAKE A SMALLER PROFIT THAN IF THEY WERE TO SELL FINISHED WINE

[q unit=”2″ topic=”4″] MERCHANTS
(definition)

[a] = NEGOCIANT

= BUY IMMATURE WINE (or grapes) TO MATURE IT (+make wine if buying grapes) AND SELL IT UNDER MERCHANTS’ NAMES (or merchants’ brands)

[q unit=”2″ topic=”4″] ADVANTAGE OF MERCHANT ROLE
(for merchants)

[a] 1- DO NOT NEED TO BUY THE VINEYARDS
(no capital costs)
(beneficial in expensive wine regions)

2- DO NOT NEED TO MANAGE THE VINEYARDS
(no operating costs)

3- CAN BUY GRAPES or UNFINISHED WINES
FROM MULTIPLE SOURCES
(flexibility & security)

4- CAN MAKE THEIR OWN WINES
ALONGSIDE THEIR MERCHANT WINES

[q unit=”2″ topic=”4″] RISKS OF BEING A MERCHANT

[a] 1- NO CONTROL OVER GRAPE GROWING PROCESS

2- NO CONTROL OVER WINEMAKING PROCESS
(when buy unfinished wine)

3- MAY BE FORCED TO TURN TO THE SPOT MARKET

[q unit=”2″ topic=”4″] HOW MERCHANTS CAN REDUCE THEIR RISKS

[a] 1- PRODUCE THEIR OWN WINES ALONGSIDE THEIR MERCHANT ACTIVITIES

2- GIVE TECHNICAL SUPPORT & ADVICES TO GROWERS
(to ensure quality)

3- ENTER LONG-TERM CONTRACTS WITH PRODUCERS

4- CAN MIX WINES (or grapes) FROM DIFFERENT SOURCES
(flexibility & protection)

[q unit=”2″ topic=”4″] MICRO NEGOCIANTS
(definition)

[a] SPECIALISE IN SMALL PRODUCTION WINES,
USUALLY FROM INDIVIDUAL VINEYARDS

WORK CLOSELY WITH GROWERS FOR BETTER QUALITY

CAN ACHIEVE SUPER-PREMIUM PRICES

RISE OF MICRO-NEGOCIANTS IN BURGUNDY

[q unit=”2″ topic=”4″] 2 REGIONS WHERE MERCHANTS OPERATE DIFFERENTLY

[a] 1- IN BURGUNDY = MORE INVOLVED IN PRODUCTION

2- IN BORDEAUX = DEAL MORE IN WINE
THAT HAS ALREADY BEEN MADE 

[q unit=”2″ topic=”4″] EN PRIMEUR
(definition)

[a] = WINE FUTURES

= METHOD OF SELLING WINE BEFORE IT HAS BEEN BOTTLED

= BUYING WINE WHILE IT IS STILL IN BARREL A
ND REMAINS IN THE PRODUCER’S CELLAR
UNTIL READY FOR BOTTLING. THE WINE WILL BE DELIVERED
ONCE IT HAS BEEN BOTTLED, FEW YEARS LATER

[q unit=”2″ topic=”4″] ADVANTAGE OF THE “EN PRIMEUR” SYSTEM FOR THE SELLER

[a] 1- EARLIER CASH FLOW

2- ESPECIALLY INTERESTING FOR WINES
WITH LONG MATURATION

3- BENEFITS FROM AN ALREADY ESTABLISHED MARKET & BUYERS (merchants…)

[q unit=”2″ topic=”4″] ADVANTAGES OF THE “EN PRIMEUR” SYSTEM FOR BUYERS
(e.g. merchant)

[a] 1- CHEAPER & EASIER TO BUY WINE AT THIS STAGE

2- PRICES CAN GO UP ONCE MATURED & BOTTLED

3- MAY BE THE ONLY OPPORTUNITY TO BUY CERTAIN WINES
(small quantities, prestigious, high demand…)

[q unit=”2″ topic=”4″] DISADVANTAGE OF “EN PRIMEUR” SYSTEM FOR 

[a] EARN SMALLER PROFITS

[q unit=”2″ topic=”4″] DISADVANTAGE OF THE “EN PRIMEUR” SYSTEM FOR THE BUYER
(e.g. merchant)

[a] EVEN THE MOST PRESTIGIOUS WINES CAN SEE THEIR PRICES GO DOWN
(no guarantee)

[q unit=”2″ topic=”4″] USUAL TYPES OF WINES SOLD “EN PRIMEUR”
(give 2 criteria + give 4 examples)

[a] 1- WINES WHO BENEFIT FROM CELLAR AGING (usually > 18 months)

2- THOSE WHO ARE PRIZED BY INVESTORS

EXAMPLES: BURGUNDY, BORDEAUX, SUPER TUSCANS, VINTAGE PORTS

[q unit=”2″ topic=”4″] GROWER-MERCHANT
(definition)

[a] WHO OWN VINEYARDS AND PRODUCE WINES FROM THEM
ALONGSIDE WINES FROM BOUGHT-IN GRAPES

[q unit=”2″ topic=”4″] EXAMPLE OF FAMOUS GROWER-MERCHANT IN THE RHONE VALLEY

[a] E. GUIGAL

COTE ROTIE, CROZES-HERMITAGE & GIGONDAS = OWN VINEYARDS

STANDARD COTE DU RHONE = BOUGHT-IN GRAPES

[q unit=”2″ topic=”4″] EXAMPLE OF FAMOUS GROWER-MERCHANT IN BURGUNDY

[a] DOMAINE DUJAC

[q unit=”2″ topic=”4″] 2 STRATEGIES OF GROWER-MERCHANTS BRANDING

[a] 1- E. GUIGAL = own wine + bought-in = UNDER SAME BRAND NAME

2- DOMAINE DUJAC = UNDER DIFFERENT BRAND NAMES
= from bought-in = DUJAC PERE & FILS
= from own vineyards = DOMAINE DUJAC

[q unit=”2″ topic=”4″] CO-OPERATIVES
(definition)

[a] 1- OWNED BY A GROUP OF GROWERS

2- PRODUCE & SELL WINES
FROM GRAPES GROWN BY ITS MEMBERS

[q unit=”2″ topic=”4″] ADVANTAGES OF THE CO-OPERATIVE

[a] 1- POOL FINANCIAL RESOURCES

2- AFFORD MORE EXPENSIVE EQUIPMENTS & EXPERTISE

3- REDUCED COSTS BY BULK-BUYING

4- POOL MARKETING & SALES EFFORTS

5- CAN CREATE, MARKET & VALUE SUCCESSFUL BRANDS

6- CAN GIVE MEMBERS ACCESS TO 
– expert viticultural services
– expert winemaking services
– advice on Marketing, Packaging
& Sales services

7- OWNED BY MEMBERS

8-WORK ON DEMOCRATIC PRINCIPLE
= MANAGERS MUST CONSULT
MEMBERS BEFORE KEY DECISIONS

[q unit=”2″ topic=”4″] DOWNSIDE OF THE CO-OPERATIVE

[a] DECISION-MAKING PROCESS CAN BE SLOW & CUMBERSOME 

[q unit=”2″ topic=”4″] 2 OPTIONS OF PAYMENT FOR CO-OPERATIVE MEMBERS

[a] MEMBERS RECEIVE A % OF ANNUAL CO-OPERATIVE’S PROFITS BASED ON

– OPTION 1 = VOLUME OF GRAPES BROUGHT

– OPTION 2 = BASED ON THE QUALITY
OF THE FRUITS BROUGHT

[q unit=”2″ topic=”4″] CUSTOM-CRUSH FACILITIES
(definition)

[a] IT IS A VARIANT OF THE CO-OPERATIVE MODEL
WHERE GROWERS DO NOT OWN THE WINEMAKING FACILITIES.
THEY ARE OWNED BY A PRIVATE INDEPENDENT COMPANY
THAT WHO CHARGES GROWERS
EACH TIME THEY WANT TO USE ITS SERVICES.

[q unit=”2″ topic=”4″] WHERE CUSTOM-CRUSH FACILITIES ARE MAINLY FOUND

[a] IN NORTH AMERICA (CAFLIFORNIA)

[q unit=”2″ topic=”4″] INTRINSIC ADVANTAGES OF THE CUSTOM-CRUSH FACILITIES
(compared to the co-operative model)

[a] 1- CAN MAKE QUICK DECISION

2- DOES NOT REQUIRE AGREEMENTS OF THE MEMBERS

[q unit=”2″ topic=”4″] ADVANTAGES OF THE CUSTOM-CRUSH FACILITIES MODEL FOR GROWERS

[a] 1- NO NEED TO INVEST IN EXPENSIVE
WINEMAKING FACILITIES & EQUIPMENTS

2- GROWERS CAN FOCUS ATTENTION ON GROWING
THE BEST FRUITS POSSIBLE & ON MARKETING

3- CAN BENEFIT FROM WINEMAKING EXPERTISE
OFFERED BY THE CUSTOM-CRUSH FACILITY COMPANY

[q unit=”2″ topic=”4″] DISADVANTAGES OF THE CUSTOM-CRUSH FACILITIES

[a] 1- LOSS OF WINEMAKING AUTONOMY
(dates of crushing linked to availabilities…)

2- PAY EACH TIME USES THE FACILITY

3- NEED GOOD RELATIONSHIP WITH GROWERS
TO UNDERSTAND AND MEET
THEIR RESPECTIVE SPECIFIC REQUIREMENTS

[q unit=”2″ topic=”4″] VIRTUAL WINEMAKERS/WINERIES
(definition)

[a] WINEMAKERS WHO DO NOT OWN THE VINEYARDS
NOR THE WINEMAKING FACILITIES

[q unit=”2″ topic=”4″] VIRTUAL WINEMAKERS/WINERIES
(where are they mainly found)

[a] MAINLY IN NORTH AMERICA

[q unit=”2″ topic=”4″] VIRTUAL WINEMAKERS/WINERIES
(how do they work)

[a] 1- BUY GRAPES OR JUICE

2- RENT SOME WINEMAKERS FACILITIES
(or custom crush facilities)

3- MARKET & SELL THE WINE
UNDER OWN BRAND

[q unit=”2″ topic=”5″] CONGLOMERATES (definition)

[a] OFTEN OWN MANY SMALLER BUSINESSES ACROSS THE SUPPLY CHAIN  (production, distribution…)

[q unit=”2″ topic=”5″] LARGEST WINE CONGLOMERATE IN THE WORLD (Names + location)

[a] E & J GALLO (CALIFORNIA)

[q unit=”2″ topic=”5″] ADVANTAGES OF CONGLOMERATES

[a] 1- CAN SET UP REGIONAL OFFICES

2- GREATER CONTROL AT ALL STAGES OF THE SUPPLY CHAIN

3- MASTER MANY ROUTES TO MARKET

4- REDUCED NEEDS TO PAY INTERMEDIARIES

5- HAVE SIGNIFICANT NEGOCIATING POWER
(both with suppliers & retailers)

6- GREATER LOBBYING POWER

[q unit=”2″ topic=”5″] CURRENT TRENDS IN CONGLOMERATES

[a] MAJOR COMPANIES OUTSIDE THE WINE INDUSTRY
BUY PRESTIGIOUS WINE BRANDS
– LVMH (luxury)
– INSURANCE COMPANIES

[q unit=”2″ topic=”5″] E & J GALLO OVERVIEW

[a] 1- LARGEST WINE CONGLOMERATE IN THE WORLD

2- OWN MORE THAN 15 WINERIES IN CALIFORNIA

3- OWN GLASS COMPANY = GALLO GLASS (bottles…)

4- OWN EXCLUSIVE IMPORT RIGHTS OF MANY WELL-KNOWN WINES

5- STAFF ACROSS THE WORLD TO COVER REGIONAL MARKETS
– REPRESENTS OVER 40% OF PRODUCTION
OF CALIFORNIAN WINES
– REPRESENTS OVER 22% OF USA WINE
MARKETS BY VOLUME

[q unit=”2″ topic=”5″] CITE 3 DIFFERENT WINE CONGLOMERATES

[a] 1- E & J GALLO (California, USA) = LARGE SIZE

2- MICHELE CHIRALO (Piemonte, Italy) = MEDIUM SIZE

3- FELTON ROAD (Central Otago, New-Zeland) = SMALL SIZE

[q unit=”2″ topic=”5″] MICHELE CHIARLO

[a] MEDIUM SIZED WINE CONGLOMERATE PIEMONTE, ITALY

OWN BAROLO VINEYARDS BUY GRAPES FROM
LOCAL GROWERS LARGE VOLUME OF MID-PRICED WINES
(Moscato d’Asti, Barbera d’Asti)

[q unit=”2″ topic=”5″] FELTON ROAD

[a] SMALL SIZE CONGLOMERATE CENTRAL OTAGO, NEW ZELAND

OWN 4 VINEYARDS ONLY ORGANIC & BIODYNAMIC WINES
ONLY AMBIENT YEASTS AVOIDS FINING & FILTERING

[q unit=”2″ topic=”5″] WINE SALES SPLIT INTO 2 BROAD SECTORS

[a] 1- RETAIL
– OFF PREMISE (USA)
– OFF TRADE (UK)

2- HOSPITALITY
– ON PREMISES (USA)
– ON TRADE (UK) 

[q unit=”2″ topic=”5″] HORECA
(meaning)

[a] HOtel + REstaurants + CAtering (& CAfé) 

[q unit=”2″ topic=”5″] ADVANTAGES FOR PRODUCERS OF SELLING DIRECTLY TO RETAILERS

[a] 1- DO NOT HAVE TO PAY INTERMEDIARIES

2- MAXIMIZE THEIR PROFITS

3- CAN DECIDE WHICH RETAILERS STOCK THEIR WINES
& HOW WINES ARE MARKETED

4- RETAIN CONTROL OVER BRAND IMAGE
(but not possible with large buyers)

[q unit=”2″ topic=”5″] DISADVANTAGES FOR PRODUCERS OF SELLING DIRECTLY TO RETAILERS

[a] 1- INCREASED ADMINISTRATIVE BURDEN
(administrative tasks + export admin)

2- CARRY THE RISK OF LOSS, SPOILAGE & DAMAGED WINES
(reduced if use freight forwarders)

3- THE MORE DISTRIBUTORS DELT WITH
THE HIGHER THE ADMINISTRATIVE BURDEN

[q unit=”2″ topic=”5″] MAIN ADVANTAGE OF BULK TRANSPORTATION
FOR LARGE BUYERS & LARGE PRODUCERS

[a] MEET & RETAIN COMPETITIVE PRICE POINTS 

[q unit=”2″ topic=”5″] DISTRIBUTOR
(definition)

[a] INTERMEDIARY THAT BUYS WINE FROM A RANGE OF PRODUCERS AND SELLS IT TO A RANGE OF RETAILERS
(including HORECA)

MAY OR MAY NOT HOLD STOCKS

MAY OR MAY NOT HAVE EXCLUSIVE RIGHTS TO IMPORT
OR DISTRIBUTE CERTAIN PRODUCTS

[q unit=”2″ topic=”5″] DISTRIBUTOR
(other usual names)

[a] = IMPORTER / AGENT / WHOLESALER

[q unit=”2″ topic=”5″] BENEFITS OF USING A DISTRIBUTOR
(for producers)

[a] 1- EASIER TO ENTER A NEW MARKET

– TAKE ADVANTAGE OF DISTRIBUTOR
MARKET KNOWLEDGE
(clients, buyers list, consumption habits…)

– DISTRIBUTOR HELP FOR
ADMINISTRATIVE BURDEN
& LEGAL REQUIREMENTS

– DISTRIBUTOR ABSORB RISK OF LOSS,
SPOILAGE, DAMAGED WINES

– DISTRIBUTOR OFFERS LOGISTICAL EFFICIENCY

– GREATER RESOURCES TO PROMOTE WINE
(portfolio tastings…)

– GREATER RESOURCES FOR MARKETING

HELP FOR LANGUAGE BARRIER

– LARGE BUYERS PREFER DEALING WITH DISTRIBUTORS
(cannot reach them otherwise)

– NOT POSSIBLE TO ENTER SOME MARKETS WITHOUT DISTRIBUTORS
(USA 3-Tier System)

[q unit=”2″ topic=”5″] DISADVANTAGES OF USING A DISTRIBUTOR

[a] 1- REDUCED PROFITS

2- MARKETING & SALES STRATEGY CHOSEN
BY THE DISTRIBUTOR MAY NOT BE IN LINE
WITH IN LINE WITH PRODUCER’S BRAND IMAGE

3- DISTRIBUTOR CANNOT GIVE UNDIVIDED
ATTTENTION TO ANY ONE PRODUCER

4- DISTRIBUTOR MAY DROP LOW PERFORMING
PRODUCERS FROM PORTFOLIO

5- PRODUCERS NEED TO SPEND TIME TO SELECT
THE RIGHT DISTRIBUTOR

6- PRODUCERS MAY SELECT SEVERAL
DIFFERENT DISTRIBUTORS FOR EACH
OF THEIR PRODUCTS

[q unit=”2″ topic=”5″] JOINT VENTURE
(definition)

[a] WHEN TWO DIFFERENT COMPANIES AGREE TO COMBINE RESOURCES TO PURSUE A COMMON GOAL BY CREATING THIRD COMPANY ASIDE IF THE INITIAL 2 COMPANIES
(the initial 2 founding companies remain in existence)

[q unit=”2″ topic=”5″] JOINT VENTURE
(conditions to be successful)

[a] 1- COMPANIES NEED TO BE OF COMPARABLE SIZE
(otherwise effect of a takeover)

2- EACH RESPONSIBILITIES & OBLIGATIONS NEED TO BE CLEARLY AGREED, DETAILED  & DOCUMENTED

3- BETTER IF THE 2 COMPANIES ARE NOT DIRECTLY COMPETITORS

4- BETTER IF THE 2 COMPANIES DO NOT OVERLAP

[q unit=”2″ topic=”5″] 2 EXAMPLES OF JOINT VENTURES

[a] 1- METZENDORFF (UK distributor) + CHAMPAGNE BOLLINGER
= FLADGATE PARTNERSHIP PORT

2- BUCKINGHAM SCHENK (UK distributor) + HD JOYEUX FABRE 
= VINALBA (ARGENTINIAN WINE BRAND)

[q unit=”2″ topic=”5″] MERGERS

[a] OCCURS WHEN TWO BUSINESSES JOIN TOGETHER COMPLETELY
INSIDE A NEW COMPANY WITH GREATER
RESOURCES & RESPONSIBILITIES

[q unit=”2″ topic=”5″] ACQUISITION
(synonymous)

[a] TAKEOVER

[q unit=”2″ topic=”5″] ACQUISITION
(definition)

[a] OCCURS WHEN ONE COMPANY BUYS ANOTHER ONE,
WHICH THEN BECOMES A SUBSIDIARY
OF THE PURCHASING COMPANY

[q unit=”2″ topic=”5″] 6 REASONS FOR A MERGER
(2 categories)

[a] 1- TO ACQUIRE CAPABILITIES
– skills
– brands
– resources
– market shares
– vineyard locations

2- TO SAVE A COMPANY FROM GOING BANKRUPT

[q unit=”2″ topic=”5″] 2 ADVANTAGES OF A MERGER

[a] 1- LOSS OF CONTROL

2- CAN OPEN NEW ROUTES TO MARKETS

[q unit=”2″ topic=”5″] DISADVANTAGE OF MERGER

[a] LOSS OF CONTROL

[q unit=”2″ topic=”5″] BROKER
(defintion)

[a]  – INDEPENDENT INTERMEDIARY WHO
REPRESENTS NEITHER PARTY
AND DO NOT ENTER ANY DEAL.

– IT ACTS AS A FACILITATOR
WHO MAKES DEALS HAPPEN.

– IT ALSO CHARGES SMALLER FEES.

[q unit=”2″ topic=”5″] EXPLAIN THE DIFFERENCE BETWEEN A BROKER AND A DISTRIBUTOR

[a] A BROKER IS AN INDEPENDENT INTERMEDIARY
WHO REPRESENTS NEITHER PARTY

THE DISTRIBUTOR IS PAID BY A PRODUCER
TO SELL WINE ON HIS BEHALF 

[q unit=”2″ topic=”5″] USING A BROKER
(benefit for producers)

[a] 1- HAS INTIMATE KNWOLEDGE OF A PARTICULAR,
OFTEN SPECIALIZED MARKET

2- KNOWS WHAT OTHER PRODUCERS (competitors)
HAVE FOR SALE AND AT WHICH PRICE THEY ARE WILLING TO SELL

3- KNOWS WHAT STYLE, VOLUME
& PRICES BUYERS ARE LOOKING FOR

4- BRING TOGETHER BUYERS & SELLERS

[q unit=”2″ topic=”5″] USING A BROKER
(benefit for the buyer)

[a] 1- KNOWS WHAT WINES AT FOR SALE (types, volumes & prices)
ON THE MARKET

2- KNOWS WHAT OTHER BUYERS ARE LOOKING FOR

3- BRING TOGETHER BUYERS & SELLERS

[q unit=”2″ topic=”5″] BROKERS ROLE IN BORDEAUX

[a] 1- HAVE LEGAL STATUS

2- PLAY AN IMPORTANT ROLE

3- INTERMEDIARIES BETWEEN CHATEAUX
& NEGOCIANTS

4- WHEN BULK-BUYING = IN CHARGE OF ENSURING
CORRECT VATS ARE DELIVERED TO BUYERS

5- IN FINE TRADE = FACILITATE DEALS
BETWEEN SEEKERS & SELLERS

[q unit=”2″ topic=”5″] 4 OPTIONS FOR SELLING DIRECTY TO CUSTOMERS

[a] 1- CELLAR DOORS SALES

2- EVENTS

3- WINE CLUBS

4- ONLINE

[q unit=”2″ topic=”5″] CELLAR DOOR SALES
(definition)

[a] SET-UP FACILITIES ON ESTATE OR AT THE WINERY
TO SELL WINES TO VISITORS

[q unit=”2″ topic=”5″] CELLAR DOOR SALES
(type of customers)

[a] 1- LOCALS

2- REGULAR TOURISTS

3- WINE TOURISTS

[q unit=”2″ topic=”5″] CELLAR DOOR SALES
(experiences provided)

[a] 1- SEE WHERE THE WINE IS MADE

2- TASTING BEFORE PURCHASING

3- STORY BEHIND THE LABEL

4- WINES NOT AVAILABLE ELSEWHERE
FOR SOME TOURISTS

5- ADDITIONAL ACTIVITIES (extra fees)
(tours, exclusive tastings, reserve wines, food & wine pairing)

[q unit=”2″ topic=”5″] CELLAR DOOR SALES
(benefits for producers)

[a] 1- EARN LARGER PROFITS

2- ENGAGE DIRECTLY WITH CUSTOMERS

3- TASTING = IMPORTANT FOR MARKETING

4- BUILD BRAND AWARENESS

5- BUILD LOYALTY

6- PROMOTE BRAND VALUES

7- INCREASED CHANCE OF RETURNING CUSTOMERS
(buy again in the future)

8- INDIRECT RECOMMENDATIONS TO ENTOURAGE

9- WAY TO TRIAL NEW PRODUCTS
-direct feedbacks
– no need for market research

[q unit=”2″ topic=”5″] WHY SOME PRODUCERS DECIDE NOT TO OFFER CELLAR DOOR SALES

[a] 1- LACK OF SUITABLE LOCATION

2- REQUIRE ADDITIONAL STAFF

3- FOCUS ON OTHER ROUTES TO MARKET

[q unit=”2″ topic=”5″] ALTERNATIVE TO STANDARD CELLAR DOOR SALES

[a] OPEN A “CELLAR DOOR” IN A NEARBY TOWN
(no need to visit the estate)

[q unit=”2″ topic=”5″] 2 MAIN TYPES OF DIRECT SALES EVENTS

[a] 1- TASTING FAIRS (salons)

2- WINE & FOOD FESTIVALS

[q unit=”2″ topic=”5″] ADVANTAGES OF EVENTS FOR PRODUCERS
(direct sales context)

[a] 1- ATTRACT LARGE NUMBER OF PEOPLE

2- ATTRACT WIDER RANGE OF PEOPLE

3- GET ACCESS TO PEOPLE THAT COULD NOT
BE REACHED OTHERWISE

[q unit=”2″ topic=”5″] DOWNSIDE OF EVENTS
(direct sales context)

[a] 1- PAY TO EXHIBIT

2- TRAVEL EXPENSES

3- NEED ADDITIONAL STAFF

4- LOGISTIC BURDEN

5- COMPETE FOR VISITORS’ ATTENTION

6- NEED CAREFUL MANAGEMENT
(accident with overdrinking)

[q unit=”2″ topic=”5″] SUCCESSFUL EVENTS IN CERTAIN WINE REGIONS CAN CREATE

[a] A DESTINATION EFFECT

[q unit=”2″ topic=”5″] WINE CLUBS
(definition)

[a] EXCLUSIVE CLUB WHO OFFER MEMBERS THE OPPORTUNITY TO PURCHASE WINE AT A REDUCED PRICE TO DELIVER TO THEIR HOMES

[q unit=”2″ topic=”5″] ADVANTAGES OF WINE CLUBS

[a] 1- ACCESS TO WINES NOT NORMALLY AVAILABLE
TO THE GENERAL PUBLIC

2- GET FREE TOURS

3- GET INVITATION TO EXCLUSIVE TASTINGS

4- PRODUCERS CAN STAY IN CONTACT WITH CUSTOMERS
(newsletter, website, blog)

5- POSSIBLE TO SUBSCRIBE TO PRODUCERS’ WINE CLUBS
AT CELLAR DOOR

[q unit=”2″ topic=”5″] CONSTRAINTS OF WINE CLUBS

[a] 1- RUNNING COSTS
(additional costs, send details…)

2- PROCESS ORDERS

3- SHIP THE WINES

4- PRODUCERS CARRY THE RISK OF LOSS,
SPOILAGE & DAMAGE

5- USA = ONEROUS ADMINISTRATIVE BURDEN
(3 Tier System)

[q unit=”2″ topic=”5″] WINE CLUBS FOR SOME PRESTIGIOUS PRODUCERS
(peculiarity)

[a] MAY BE THE ONLY WAY TO GET ACCESS TO THOSE WINES
(exclusive members’ clubs)

[q unit=”2″ topic=”5″] ADVANTAGE ONLINE SALES FOR PRODUCERS
(direct selling to customers

[a] LARGER PROFITS FOR PRODUCERS

[q unit=”2″ topic=”5″] DISADVANTAGE ONLINE SALES FOR PRODUCERS
(direct selling to customers)

[a] 1- COSTS ASSOCIATED WITH SETTING UP
& MAINTAINING RELIABLE UP-TO-DATE WEBSITE

2- ADDED COSTS ON DELIVERY

[q unit=”2″ topic=”5″] DIFFERENCE BETWEEN RETAILER AND THE RETAIL SECTOR

[a] 1- SELLING THROUGH A RETAILER MEANS
SELLING DIRECTLY TO THE END USER
(vs. distributor, importer…)

2- RETAIL SECTOR = IN CONTRAST
WITH THE HOSPITALITY SECTOR

[q unit=”2″ topic=”5″] RETAIL SECTOR IN THE UK
(% of total sales)

[a] 80% OF WINE SALES BY VOLUME

[q unit=”2″ topic=”6″] SUPERMARKETS (characteristics)

[a] 1- IN USA / UK / FRANCE = LARGEST MARKET SHARE
2- ATTRACT CUSTOMERS WITH LITTLE WINE KNOWLEDGE
3- STOCK WINES FROM WELL KNOWN BRANDS / GRAPE VARIETIES / REGIONS
4- WINE STYLE THAT APPEAL TO A WIDE RANGE OF CUSTOMERS
5- CUSTOMERS CAN COMPARE PRICES

[q unit=”2″ topic=”6″] SUPERMARKETS EXCLUSIVE WINES

[a] 1- SUPERMARKETS LIKE TO STOCK WINES THAT ARE EXCLUSIVE TO THEM

2- CAN CREATE THEIR OWN BRANDS & NAMES

3- SOME HAVE THEIR OWN BRAND RANGE OF WINES (e.g. Sainsbury’s Taste)

[q unit=”2″ topic=”6″] WHY SUPERMARKETS LIKE EXCLUSIVE WINES

[a] 1- BECAUSE THEY CAN ATTRACT CUSTOMERS

2- BECAUSE THEY PROMOTE CUSTOMERS’ LOYALTY

3- USUALLY BETTER MARGINS

4- NO DIRECT PRICE COMPARISON

5- REDUCES DIRECT COMPETITION
(alternatives less clear)

[q unit=”2″ topic=”6″] PRIVATE WINE LABELS
(definition)

[a] WINES THAT ARE MADE BY PRODUCERS IN ORDER TO BE EXCLUSIVE TO DISTRIBUTORS & RETAILERS
(usually through different & exclusive brandings)

[q unit=”2″ topic=”6″] PRIVATE WINE LABELS
(main characteristics)

[a] 1- EXCLUSIVE TO THE SELLER

2- NEED TO BE AVAILABLE IN LARGE VOLUMES

3- ATTRACTIVE OPPORTUNITY TO SELL LARGE VOLUMES OF WINE

4- OFTER NO INTERMEDIARIES
(buy directly to producers)

5- USUALLY SHIPPED IN BULK
(to retain low price points & high margins)

6- SUPERMARKETS CAN EMPLOY WINEMARKERS
TO WORK CLOSELY WITH PRODUCERS FOR SUPERVISION
& QUALITY CONTROL

[q unit=”2″ topic=”6″] PRIVATE WINE LABELS
(producers risks)

[a] 1- SUPERMARKETS’ WINE BUYERS HAVE ENORMOUS NEGOTIATING POWER

2- PAY FEES FOR SUPERMARKETS TO STOCK THEIR WINES

3- PAY FOR ANY ADDITIONAL PROMOTION
– product placement
– ads on supermarkets’ magazines
– pay for supermarket price promotion

4- SUPERMARKETS IMPOSE STRICT CONDITIONS
– quality control
– time & manner of delivery
– packaging
-labelling

5- WINES MAY BE DELISTED IF DO NOT ACHIEVE EXPECTED SALES
(volume or margin)

[q unit=”2″ topic=”6″] DEEP DISCOUNTERS
(9 main characteristics)

[a] 1- OFFER PERMANENTLY LOW PRICES

2- KEEP THEIR COSTS DOWN

3- LOWER MARGIN THAN SUPERMARKETS
(rely on volume)

4- SHOPS ARE BASIC

5- LIMITED PRODUCT RANGE
(cheaper to maintain)

6- WINES, OFTEN PRIVATE LABELS

7- MAJOR BRANDS ARE TOO EXPENSIVE

8- BUY DIRECTLY FROM PRODUCERS
(no intermediaries)

9- DON’T CHARGE SUPPLIERS
FOR STOCKING THEIR WINES

[q unit=”2″ topic=”6″] CONVENIENCE RETAILERS

[a] 1- CLOSER TO WHERE PEOPLE LIVE

2- OPEN FOR LONGER

3- SMALLER RANGE THAN SUPERMARKETS

4- DOMINATED BY MAJOR BRANDS

5- SOME HAVE THEIR OWN BRANDS
(exclusive)

6- HIGHER PRICES THAN SUPERMARKETS
(people pay for convenience)

[q unit=”2″ topic=”6″] SPECIALIST WINE RETAILERS
(definition)

[a] SPECIALIZE IN WINE
(sometimes with spirits & beers)

SOME SPECIALIZE ON TYPES OF WINE
– organic
– biodynamic
– natural

[q unit=”2″ topic=”6″] 2 EXAMPLES OF SPECIALIST WINE RETAILERS WHO FOCUS ON 
PREMIUM & SUPER PREMIUM WINES

[a] 1- MILLESIMA (France, Bordeaux)

2- HEDONISM (UK)

PROCUREMENT = OFTEN ENGAGE IN “EN PRIMEUR” OFFERINGS

[q unit=”2″ topic=”6″] SPECIALIST WINE RETAILERS
(2 main characteristics)

[a] 1- LOWER PURCHASING POWER THAN LARGE RETAILERS

2- FOCUS ON WINES FROM 
– smaller producers
– lesser known wine region
– lesser known grape varieties

[q unit=”2″ topic=”6″] SPECIALIST WINE RETAILERS
(interests for producers)

[a] 1- HIGHER AVERAGE RETAIL PRICES

2- CONSUMERS WILLING TO SPEND MORE (per bottle)
(because attract high involement customers)

3- BETTER MARGIN FOR PRODUCERS

4- BROADER RANGE OF WINES

5- MORE PERSONAL ADVICE

6- KNOWLEDGEABLE & WELL-TRAINED STAFF
(can hand-sell wines)

7- BUILD RELATIONSHIP WITH CUSTOMERS

8- CAN HOLD SPECIAL EVENTS
– tastings
– wine education classes

[q unit=”2″ topic=”6″] HYBRIDS
(definition)

[a] SPECIALIST WINE RETAILERS WHO ALSO HAVE A BAR AREA
– sell foods
– sell tapas, dishes, cheese…

OFFER CHANGING SELECTION OF WINE-BY-THE-GLASS
– showcase new wines
– wines from lesser known regions/grapes

[q unit=”2″ topic=”6″] HYBRIDS
(downsides)

[a] 1- STAY OPEN LATER

2- NEED ADDITIONAL STAFF

3- ADDITIONAL BUREAUCRACY ON OPENING PERMISES

[q unit=”2″ topic=”6″] ONLINE RETAILING
(4 main characteristics)

[a] 1- MANY RETAILERS OFFER ONLINE RETAILING IN PARALLEL
WITH SALES THROUGH SHOPS

2- INCREASING NUMBER OF ONLINE ONLY RETAILERS

3- ONLINE WINE CLUBS SET BY NEWSPAPERS
– New York Times Wine Club
– Sunday Times Wine Club

4- SOME GENERALIST ONLINE ONLY RETAILERS ALSO SELL WINES
(example: Amazon)

[q unit=”2″ topic=”6″] ADVANTAGES OF ONLINE RETAILING

[a] 1- NO NEED FOR EXPENSIVE RETAIL SHOPS

2- WAREHOUSE LOCATED IN CHEAPER AREAS

3- CAN STOCK LARGER & MORE VARIED RANGES OF PRODUCTS

4- LARGER CONSUMER BASE
(not limited to locals)

[q unit=”2″ topic=”6″] DISADVANTAGES OF ONLINE RETAILING

[a] 1- STILL NEED STAFF TO DEAL WITH CUSTOMERS’ QUERIES,
ORDERS, DISPATCHING…

2- SOME OFFER CUSTOMER ADVISORS (costs)

3- DELIVERY IS EXPENSIVE

4- RETAIN THE RISK OF LOSS, SPOILAGE, DAMAGE

5- CONSUMERS EXPECT QUICK DELIVERY

6- ENSURE SECURE, USER-FRIENDLY, RELIABLE WEBSITE

7- CUSTOMERS QUICKLY OFFSET BY SLOW
& NON-FRIENDLY WEBSITES

8- WEBSITE CONVEYS BRAND IMAGE

9- NEED ONGOING TECHNICAL SUPPORT

10- NEED  WELL-PRESENTED, HELPFUL & DETAILED CONTENT

11- CUSTOMERS CAN LEAVE OWN REVIEWS & COMMENTS
(need moderation)

12- UP-TO-DATE CONTENT & STOCKS

[q unit=”2″ topic=”6″] ONLINE RETAILERS
(additional services to offer)

[a] 1- CLICK & COLLECT OPTIONS

2- MOBILE APPS
-general
-specialized

MOBILE APPS, MUST BE QUICK, EASY TO USE,
PROVIDE HIGH LEVEL OF SERVICES

[q unit=”2″ topic=”6″] GLOBAL TRAVEL RETAIL
(possible locations)

[a] AIRPORTS
SEAPORTS
INTERNATIONAL RAILWAY STATIONS
ONBOARD SHIPS

[q unit=”2″ topic=”6″] GLOBAL TRAVEL RETAIL
(characteristics)

[a] 1- HISTORICALLY KNOWN AS DUTY-FREE
(customers were looking for lower prices)

2- WITH FREE TRADE ZONES (such as the E.U.)
– prices less important
– look for high quality & high priced goods
that cannot be found at home

[q unit=”2″ topic=”6″] DISADVANTAGE OF GLOBAL TRAVEL RETAIL

[a] SELLING THROUGH GLOBAL TRAVEL RETAIL IS EXPENSIVE
– cost of retail spaces
– % of costs charged to suppliers

= LOWER MARGINS

[q unit=”2″ topic=”6″] WINE INVESTMENT COMPANIES
(definition)

[a] SPECIALIZE IN SOURCING & SELLING WINES FOR INVESTMENT

[q unit=”2″ topic=”6″] INVESTMENT GRADE WINES

[a] – THE MORE SOUGHT AFTER
& EXPENSIVE WINES IN THE WORLD

– RARITY VALUE

[q unit=”2″ topic=”6″] WINE INVESTMENT COMPANIES
(procurement process)

[a] USUALLY SMALL YEARLY ALLOCATION OF RARE WINES THROUGH:
– producers (direct)
– merchants (indirect)

[q unit=”2″ topic=”6″] WINE INVESTMENT COMPANIES
(other activities)

[a] CAN ACT AS A BROKER

(CUSTOMERS TELL THEM WHAT WINE THEY ARE LOOKING FOR AND THEY PUT THEM IN TOUCH WITH SELLERS + CHARGE FEES WHEN DEAL IS DONE)

[q unit=”2″ topic=”6″] WINE INVESTMENT
(historic perspective)

[a] HAS BEEN SAFER HISTORICALLY THAN INVESTMENT IN STOCKS
& SHARES IN TIMES OF FINANCIAL TROUBLES

[q unit=”2″ topic=”6″] RISK OF WINE INVESTMENT

[a] EVEN THE MOST PRESTIGIOUS WINES’ PRICES CAN FALL

[q unit=”2″ topic=”6″] MAIN WINES ON SECONDARY MARKET
(wine investment)

[a] BORDEAUX
BURGUNDY
CHAMPAGNE
PIEMONTE
TUSCANY
CALIFORNIA

+2 PRODUCERS IN AUSTRALIA (Penfold’s Grange, Hill of Grace)

[q unit=”2″ topic=”6″] HOW INVESTORS BUY WINES FOR WINE INVESTMENTS

[a] 1- EN PRIMEUR
– from producers
– through retailers
– on release

2- THROUGH A BROKER
– e.g. Cult Wines (uk)

3- ON SECONDARY MARKETS
– wine exchanges

4- THROUGH MANAGED WINE PORTFOLIOS

5- THROUGH WINE INVESTMENT FUNDS
– Sommelier Capital Investors

[q unit=”2″ topic=”6″] MOST IMPORTANT WINE EXCHANGE IN THE WORLD

[a] LIV-EX
(London)

[q unit=”2″ topic=”6″] MAIN WINE INVESTMENT PLACES

[a] 1- LONDON 
(traditional wine investment hub)

2- HONG-KONG
(government abolished excise duty to become 
wine trading hub of eastern asia)

[q unit=”2″ topic=”6″] AUCTION HOUSES
(main companies)

[a] SOTHEBY’S & CHRISTIES SPECIALIZE IN SELLING
HIGH-PRICED INVESTMENT GRADE WINES 

[q unit=”2″ topic=”6″] RISK OF AUCTION HOUSES

[a] 1- RISK OF SPOILAGE

2- STORAGE CONDITIONS

3- FRAUDS

[q unit=”2″ topic=”6″] THE 2 MOST FAMOUS WINE AUCTION FRAUDSTERS

[a] 1- Hardy RODENSTOCK
(selling Thomas Jefferson wine collection)

2- Rudy KURNIAWAN
(caught selling Burgundy Domaine Ponsot
vintages that never existed)

[q unit=”2″ topic=”6″] SOLUTION TO WINE FRAUD

[a] SOPHISTICATED ANTI-COUNTERFEITING TECHNIQUES

[q unit=”2″ topic=”6″] KEY SUB-SECTORS OF THE HOSPITALITY SECTOR

[a] BARS & RESTAURANTS

[q unit=”2″ topic=”6″] AVERAGE PRICE OF A BOTTLE OF WINE SOLD IN THE
HOSPITALITY SECTOR

[a] CONSIDERABLY HIGHER THAN IN RETAIL

[q unit=”2″ topic=”6″] SPECIALIST WINE BARS
(main characteristics)

[a] 1- SPECIALIZE IN SELLING WINE

2- KNOWLEDGEABLE & WELL TRAINED STAFF

3- LESS KNOWN WINE REGIONS

4- LESS KNOWN GRAPE VARIETIES

5- HIGH INVOLVEMENT CONSUMERS

6- PAY ABOVE AVERAGE FOR QUALITY

7- DO NOT OFFER BIG BRAND NAMES

8- CANNOT COMPETE ON PRICES WITH LARGER BAR CHAINS

[q unit=”2″ topic=”6″] LARGE CHAINS OF WINE BARS
(key feature)

[a] ENOUGH VOLUME TO HAVE THEIR OWN LABEL WINES

[q unit=”2″ topic=”6″] COMPANY SPECIALIZED IN WINE BARS
IN AIRPORT LOUNGES

[a] VINO-VOLO
(USA)

[q unit=”2″ topic=”6″] GENERAL BARS
(main characteristics)

[a] 1- LESS WINE FOCUS

2- WINE IS JUST ONE OF THE DRINKS ON OFFER

3- WINES OFFERED
– well known producers/brands
– well known grape varieties
-well known grape varieties

4- MAINLY INEXPENSIVE TO MID-PRICED WINES

5- WINES THAT APPEAL TO WIDE RANGE OF PEOPLE

6- WINES DRINKABLE WITH or WITHOUT FOODS

7- SOME BARS HAVE SPECIFIC THEMES

[q unit=”2″ topic=”6″] BAR PRICES MARK-UP

[a] 1- PRICES ARE HIGHER THAN IN SHOPS

2- TO AVOID PRICE COMPARISONS SOME PRODUCERS
MAKE WINES ONLY SOLD TO THE HOSPITALITY SECTOR

[q unit=”2″ topic=”6″] THE 3 RESTAURANT CATEGORIES

[a] 1- NON DESTINATION RESTAURANTS

2- CASUAL RESTAURANTS

3- FINE DINING RESTAURANTS

[q unit=”2″ topic=”6″] NON-DESTINATION RESTAURANTS
(characteristics)

[a] 1- THE MEAL IS NOT THE MAIN FOCUS
OF THE LUNCHTIME / EVENING

2- WINES NEED TO APPEAL TO THE LARGER BASE POSSIBLE
– well known brands
– well known grape varieties
– well known regions

[q unit=”2″ topic=”6″] CASUAL DINING RESTAURANTS
(main characteristics)

[a] 1- FALL BETWEEN NON-DESTINATION & FINE DINING

2- FROM QUICK MEALS TO LONGER MEALS

3- MID-PRICED TO PREMIUM PRICED

4- WINES OFFERED
– a mix of well known & lesser known regions / grape varieties

[q unit=”2″ topic=”6″] FINE DINING
(main characteristics)

[a] 1- DESTINATION RESTAURANTS

2- MEAL = MAIN FOCUS OF VISIT

3- ONE OR MORE MICHELIN STAR HEAD CHEF

4- FOOD & WINE PAIRING PARTICULARLY IMPORTANT

5- WELL TRAINED & KNOWLEDGEABLE STAFF

6- WINES OFFERED
– super premium wines
– best vintages
– available in small quantities

[q unit=”2″ topic=”6″] FINE DINING STAFF

[a] 1- HEAD SOMMELIER
(prestigious position + expensive)

2- HIGHLY TRAINED & KNWOLEDGEABLE STAFF

[q unit=”2″ topic=”7″] NON FREE-MARKETS
(main market types)

[a] 1- MONOPOLY MARKETS

2- AMERICAN THREE-TIER SYSTEM

[q unit=”2″ topic=”7″] MONOPOLY MARKET
(definition)

[a] WINE IS DISTRIBUTED THROUGH GOVERNMENT RUN MONOPOLIES STORES
(and distributors for some)

[q unit=”2″ topic=”7″] 2 EXAMPLES OF MONOPOLY MARKETS

[a] 1- SCANDINAVIAN COUNTRIES

2- CANADA

[q unit=”2″ topic=”7″] MONOPOLY MARKET IN SWEDEN

[a] SYSTEMBOLAGET

– the only retail outlet selling wine

– some specialist independent
distributors can be licensed
under conditions

– Bars & Restaurants can buy from monopoly
or specialist independent distributors

[q unit=”2″ topic=”7″] GOAL OF THE MONOPOLY SYSTEM

[a] 1- LIMIT ALCOHOL CONSUMPTION

2- SHOPS & STAFF DO NOT PROMOTE PRODUCTS
or PRODUCERS

[q unit=”2″ topic=”7″] PRIVATISATION OF ALCOHOLIC BEVERAGES LEAD TO

[a] 1- GREATER COMPETITION

2- PRICE PRESSURE

3- GREATER ACCESSIBILITY

[q unit=”2″ topic=”7″] MONOPOLY MARKETS CONSEQUENCES FOR PRODUCERS

[a] 1- HARDER TO ENTER THE RETAIL SECTOR

2- CONSIDERABLE AMOUNT OF BUREAUCRACY

[q unit=”2″ topic=”7″] HOW TO GET A WINE STOCKED AT SYSTEMBOLAGET

[a] 1- REGISTER WITH AN IMPORTER
(approved supplier of Systembolaget)

2- FOUR TIMES per year, SYSTEMBOLAGET
ISSUES TENDER REQUESTS FOR VARIOUS 
TYPES OF WINES

3- APPROVED SUPPLIERS SUBMIT SAMPLES

4- BLIND TASTED BY A PANEL

5- ONCE SELECTED, THE WINE IS TASTED AGAIN
+ CHEMICAL ANALYSIS

[q unit=”2″ topic=”7″] CANADIAN MONOPOLY MARKET

[a] 1- STATE MONOPOLY IN ALL BUT ONE STATE:
ALBERTA

2- ALBERTA
– exception
– private market but supervised

[q unit=”2″ topic=”7″] USA PRE-PROHIBITION

[a] 1- Before 1919

2- Pre Prohibition = gambling, prostition, crime, drunkeness

3- Pre Prohibition Saloons = were tied houses

[q unit=”2″ topic=”7″] USA PROHIBITION

[a] 1- FROM 1919 to 1933

2- CONSUMPTION, DISTRIBUTION & PURCHASE OF ALCOHOL
= FORBIDDEN 

[q unit=”2″ topic=”7″] TIED HOUSE

[a] REQUIRED TO BUY ALL PRODUCTS (ALCOHOL) TO ONE
BREWER / DISTILLER
WHICH CREATED MONOPOLIES

[q unit=”2″ topic=”7″] REPEAL OF USA PROHIBITION

[a] 1- 1933

2- BIRTH OF THE 3-TIER SYSTEM

3- IMPLEMENTED ON A STATE BY STATE LEVEL

4- AVOID TO GO BACK TO PRE-PROHIBITION DAYS

[q unit=”2″ topic=”7″] GOAL OF THE 3-TIER SYSTEM

[a] 1- PREVENT DIRECT SALES FROM PRODUCERS / SUPPLIERS

2- AVOID PRODUCER MONOPOLIES

3- AVOID INCREASED PRICES

[q unit=”2″ topic=”7″] NAME THE 3 TIERS OF THE US SYSTEM

[a] 1- SUPPLIER
(producers / importers)

2- DISTRIBUTOR
(wholesalers / brokers)

3- RETAILER
(off premises
on premises)

[q unit=”2″ topic=”7″] USA 3 TIER SYSTEM
(main legal requirements)

[a] 1- LIMIT OR PROHIBIT CROSS-OWNERSHIP BETWEEN MOST RETAILERS
AND THE OTHER 2 TIERS

2- PRODUCERS CAN BE IMPORTER BUT NOT WHOLESALER

3- WHOLESALER CAN IMPORT BUT CANNOT PRODUCE

4- SOME STATES DO NOT ALLOW WINES PURCHASED
IN OTHER STATES TO CROSS BORDERS

5- SOME STATES ALLOW WINERIES TO SELL DIRECTLY TO CUSTOMERS
(under conditions)

[q unit=”2″ topic=”7″] CONSEQUENCES OF THE US 3-TIER SYSTEM
(on state level)

[a] 1- THE FEDERAL GOVERNMENT CEDED CONTROL OF
BEVERAGE ALCOHOL SALES TO INDIVIDUAL STATES

2- EACH STATE = DIFFERENT LAWS

3- INCREASED COMPLEXITY & BUREAUCRACY

4- “COMPLIANCE OFFICERS” NEEDED WITHIN BEVERAGE COMPANIES

5- NO STATES ARE DRY TODAY BUT THERE ARE SOME DRY COUNTIES

[q unit=”2″ topic=”7″] U.S. CONTROL STATES

[a] 1- THE STATE HOLD THE MONOPOLY OVER ONE OR MORE TIERS

2- THE ONLY LICENSED OFF-PERMISES RETAILER
= THE STATE

3- 17 CONTROL STATES IN THE USA

4- PENNSYLVANIA = STRICTEST CONTROL
= all spirits sold in state package shops

[q unit=”2″ topic=”7″] STATES IN WHICH STATE DOES NOT PARTICIPATE DIRECTLY
IN SALE OF ALCOHOL

[a] 1- OPEN STATES

2- FRANCHISE STATES

[q unit=”2″ topic=”7″] OPEN STATES

[a] 1- REGULATION OF THE 3-TIER SYSTEM IS MINIMAL

2- SUPPLIERS & DISTRIBUTORS ARE FREE TO ENTER INTO
AND EXIT OUT OF AGREEMENTS TO SELL
AND DISTRIBUTE BRANDS FREELY

[q unit=”2″ topic=”7″] FRANCHISE STATES

[a] 1- HAVE STRONG FRANCHISE LAWS THAT SEVERELY RESTRICT
THE FREEDOM OF SUPPLIERS
TO CHANGE DISTRIBUTOR AGREEMENTS

2- APPOINTMENT OF A DISTRIBUTOR TO A SUPPLIER (producer)
= ALMOST A LIFETIME APPOINTMENT

[q unit=”2″ topic=”7″] FRANCHISE LAWS
(rationale)

[a] EXIST TO PROTECT DISTRIBUTORS AGAINST SUDDEN
AND MASSIVE CHANGES TO THEIR BUSINESSES

[q unit=”2″ topic=”7″] CONSEQUENCES OF FRANCHISE LAWS ON SUPPLIERS
(Franchise States in the U.S.)

[a] EVEN IF LEGITIMATE REASON TO BE A DISSATISFIED WITH A DISTRIBUTOR PERFORMANCE
=
LITTLE RESCOURSE IF THE DISTRIBUTOR DOES NOT AGREE TO RELEASE THE SUPPLIER

[q unit=”2″ topic=”7″] CONNECTICUT LAWS ON ALCOHOL

[a] 1- VERY STRICT STATE

2- RESTRICT THE NUMBER OF OFF-PREMISES LICENCES IN EACH CITY

3- SMALL SHOPS BOUGHT BY LARGE ENTITIES TO OBTAIN LICENCES

4- PROHIBIT QUANTITY DISCOUNTS BY DISTRIBUTORS

5- ENFORCE MINIMUM BOTTLE PRICING FOR EACH BOTTLE SOLD IN THE STATE

[q unit=”2″ topic=”7″] CONSEQUENCES OF CONNECTICUT ALCOHOL LAWS

[a] 1- SMALL ALCOHOL / WINE SHOPS ARE PROSPEROUS

2- NO CONSOLIDATION AS IN OTHER STATES

[q unit=”2″ topic=”7″] CRITICS OF THE CONNECTICUT ALCOHOL LAWS

[a] 1- BORDER WARS

2- CHEAPER IN OTHER STATES

[q unit=”2″ topic=”7″] STRENGTHS OF THE 3-TIER SYSTEM
(4 main strengths)

[a] 1- SIGNIFICANT TAX REVENUE
(on each tier)

2- DISTRIBUTORS SPECIALIZE IN LOGISTICAL EFFICIENCY

3- DISTRIBUTORS TAKE ON MARKETING & SALES

4- BETTER EXPOSER FOR PRODUCERS
(compared to isolated approach)

[q unit=”2″ topic=”7″] WEAKNESSES OF THE 3-TIER SYSTEM

[a] 1- IN PAST 20 YEARS, NUMBER OF DISTRIBUTORS DECREASED BY 2/3

2- A LOT OF CONSOLIDATION

3- NUMBER OF U.S. WINERIES SEEKING TO ENTER THE MARKET
MULTIPLIED BY 5

4- BOTTLENECK EFFECT = DETRIMENTAL TO SMALLER PRODUCERS
(lost among massive portfolios)

[q unit=”2″ topic=”7″] CONSOLIDATION IN PRODUCER TIER

[a] LARGER WINERIES BUYING SMALLER ONES

[q unit=”2″ topic=”7″] EFFECT OF CONSOLIDATION IN THE PRODUCTION TIER

[a] 1- CONGLOMERATES OFFER ATTRACTIVE ARRAY OF PRODUCTS
FOR A LARGE DISTRIBUTOR

2- DISTRIBUTORS NEED TO DEAL WITH ONLY ONE CONGLOMERATE
TO GET ACCESS TO A RANGE OF DESIRABLE BRANDS

3- RETAILERS DEAL WITH 1 or 2 LARGE DISTRIBUTORS TO OFFER
LARGE RANGE OF PRODUCTS

[q unit=”2″ topic=”7″] CONSEQUENCES OF THE 3-TIER SYSTEM ON SMALL PRODUCERS

[a] 1- LOOK FOR SMALLER SPECIALIST DISTRIBUTORS

2- DISTRIBUTION CONTRACTS MAY BE HARD TO BREAK

[q unit=”2″ topic=”7″] SMALLER SPECIALIST DISTRIBUTORS

[a] 1- BETTER EQUIPPED TO SELL LOW-VOLUME BOUTIQUE BRANDS

2- LIMITED COVERAGE SCOPE ACROSS STATES

3- DISTRIBUTION CONTRACTS HARD TO BREAK

[q unit=”2″ topic=”7″] CONSEQUENCE ON PRODUCERS OF CONSOLIDATION
WITHIN THE U.S. 3-TIER SYSTEM

[a] DEVELOPMENT OF THE DIRECT-TO-CUSTOMER CATEGORY
(shipping to customers /
cellar door sales)

[q unit=”2″ topic=”7″] DIRECT-TO-CUSTOMERS ASSOCIATED COSTS

[a] 1- LABOUR

2- ADVERTISING

3- SHIPPING

4- ADMINISTRATIVE BURDEN

[q unit=”2″ topic=”7″] MARKETING
(definition)

[a] THE MANAGEMENT PROCESS IN CHARGE OF IDENTIFYING, ANTICIPATING,
AND SATISFYING CUSTOMER REQUIREMENTS PROFITABLY

[q unit=”2″ topic=”7″] 3 WAYS TO GENERATE PROFITS

[a] 1- THROUGH VOLUME OF SALES

2- THROUGH VALUE OF SALES

3- NOT ONLY THE WINE BUT ALSO THE WHOLE EXPERIENCE
– confirmation of social status
– ownership of something valuable
– return on investment

[q unit=”2″ topic=”7″] THE 4 STEPS OF MARKETING

[a] 1- IDENTIFY THE TARGET

2- UNDERSTAND THE NEEDS

3- SATISFY THEM

4- CREATE PROFITS

[q unit=”2″ topic=”7″] SUCCESSFUL MARKETING CAMPAIGN

[a] ACHIEVES ADEQUATE LEVEL OF PROFIT WITHIN A SPECIFIED TIMETABLE

[q unit=”2″ topic=”7″] MARKETING STRATEGY
(5 key steps)

[a] 1- IDENTIFY PRODUCT / BRAND TO BE MARKETED

2- IDENTIFY TARGET MARKET

3- SETTING OBJECTIVES

4- DEVISE MARKETING STRATEGY
(marketing mix)

5- IMPLEMENTING / MONITORING THE MARKETING STRATEGY

[q unit=”2″ topic=”7″] MARKETING MIX

[a] 5 Ps

PRICE
PRODUCT
PLACE
PROMOTION
PEOPLE

[q unit=”2″ topic=”7″] SWOT ANALYSIS

[a] STRENGTHS (internal + helpful)
WEAKNESSES (internal + unhelpful)
OPPORTUNITY (external + helpful)
THREATS (external + unhelpful)

1- IDENTIFY FACTORS THAT ARE RELEVANT TO ACHIEVE AN OBJECTIVE

2- IN ABSENCE OF A SPECIFIED OBJECTIVE PRIOR THE START OF THE ANALYSIS
= NO REFERENCE POINT
= cannot assess helpful / unhelpful

[q unit=”2″ topic=”7″] SETTING THE OBJECTIVE
(swot analysis)

[a] 1- OBJECTIVE SET PRIOR THE ANALYSIS

2- THE SWOT ANALYSIS HELPS TO SORT ACHIVABLE vs. UNACHIVABLE
OBJECTIVES

[q unit=”2″ topic=”7″] OBJECTIVE OF THE ANALYZED OBJECTIVE
(swot analysis)

[a] 1- INTUITION
2- DREAM / INSPIRATION
3- KNOWLEDGE OF THE MARKET
4- BUSINESS TOOLS

[q unit=”2″ topic=”7″] VALUE-CURVE ANALYSIS
(definition)

[a] 1- IT IS EXAMPLE OF A BUSINESS TOOL THAT CAN BE USED TO IDENTIFY AN OBJECTIVE

2- IT CONSISTS IN USING CONSUMER RESEARCH TO IDENTIFY CLUSTERS OF CONSUMER DEMAND THAT ARE UNDER-SUPPLIED or IGNORED

[q unit=”2″ topic=”7″] RESOURCE
(definition)

[a] IT IS A THING THAT THE ORGANISATION HAS ACCESS TO 
/ CAN EXPLOIT AS A TOOL

[q unit=”2″ topic=”7″] EXAMPLES OF RESOURCES IN WINE PRODUCTION

[a] 1- ESTABLISHED REPUTATION

2- RELIABLE / AFFORDABLE SUPPLY CHAIN

3- VINEYARD LOCATIONS

4- OPTIMIZED PRODUCTION FACILITIES

5- ACCESS TO RELIABLE / AFFORDABLE SUPPORT INDUSTRIES

6- STRONG FINANCIAL POSITION

7- INTERNAL EXPERTISE / EXPERIENCE

[q unit=”2″ topic=”7″] CAPABILITY

[a] SOMETHING THE ORGANISATION IS ABLE TO DO

[q unit=”2″ topic=”7″] EXAMPLES OF WINE CAPABILITIES

[a] 1- BUILD STRONG NEW BRANDS

2- GROW EXISTING BRANDS

3- SCALE PRODUCTION UP OR DOWN

4- CHANGE PRODUCTS RAPIDLY

5- R&D FOR NEW PRODUCTS

6- LOBBYING (local, regional, national)

[q unit=”2″ topic=”7″] OPPORTUNITIES & THREATS IN SWOT ANALYSIS
(3 key elements)

[a] 1- RELATED TO THE EXTERNAL BUSINESS ENVIRONMENT

2- CONSIDER ALSO TRENDS PRESENT & FUTURE
THAT MIGHT AFFECT THE BUSINESS ENVIRONMENT

3- USEFUL MNEMONIC = PESTEL

[q unit=”2″ topic=”7″] PESTEL ANALYSIS

[a] 1- POLITICAL
2- ECONOMIC
3- SOCIAL / SOCIETAL
4- TECHNOLOGICAL
5- ENVIRONMENTAL
6- LEGAL

[q unit=”2″ topic=”8″] POLITICAL
OPPORTUNITIES & THREATS
(swot analysis)

[a] 1- PROHIBITION & TAXES

2- SUBSIDIES

3- PROMOTIONAL SUPPORTS

[q unit=”2″ topic=”8″] ECONOMIC
OPPORTUNITIES & THREATS
(swot analysis)

[a] 1- CURRENCY FLUCTUATIONS
– improve competitiveness of exports
– more expensive importations
– hard to plan
– if more reactive than competition = OPPORTUNITY

2- RECESSION
(reduces consumer purchasing power)

[q unit=”2″ topic=”8″] SOCIAL
OPPORTUNITIES & THREATS
(swot analysis)

[a] 1- ONE GENERATION AVOID DRINKS OF THE PARENTS

2- CULTURAL ATTITUDES

3- AVAILABILITY OF SKILLED / AFFORDABLE LABOUR
(in rural areas for instance)

[q unit=”2″ topic=”8″] TECHNOLOGICAL
OPPORTUNITIES & THREATS
(swot analysis)

[a] 1- NEW PRODUCTION TECHNIQUES

2- NEW EQUIPMENTS

[q unit=”2″ topic=”8″] ENVIRONMENTAL
OPPORTUNITIES & THREATS
(swot analysis)

[a] 1- CLIMATE CHANGE

2- PRESSURE FOR ALTERNATIVE LAND USE
(real estate…)

3- LOGISTICS IMPACT

4- WASTE MANAGEMENT / ENERGY USE

[q unit=”2″ topic=”8″] LEGAL & REGULATORY
OPPORTUNITIES & THREATS
(swot analysis)

[a] 1- REGULATION ON TRADE

2- REGULATION ON PRODUCTION

3- WINE PDOs / PGIs

[q unit=”2″ topic=”8″] SWOT ANALYSIS PROVIDE INSIGHTS INTO

[a] 1- HOW ACHIEVABLE IS THE OBJECTIVE

2- WHAT FURTHER INVESTMENTS (resources / capabilities)
WILL MAXIMIZE CHANCES OF SUCCESS

3- CHARTS EXTERNAL BUSINESS ENVIRONMENT

[q unit=”2″ topic=”8″] PRODUCT LIFE CYCLE
(4 phases)

[a] 1- INTRODUCTION
(start slowly
+ establishes itself)

2- GROWTH
(start to grow)

3- MATURITY + STABILIZATION

4- DECLINE

[q unit=”2″ topic=”8″] INTRODUCTION PHASE
(product life cycle)

[a] 1- FOCUS ON GETTING THE PRODUCT TO THE MARKET

2- GAINING REPUTATION & RECOGNITION

[q unit=”2″ topic=”8″] GROWTH PHASE
(product life cycle)

[a] THE PRODUCT GETS INCREASINGLY WIDELY DISTRIBUTED

[q unit=”2″ topic=”8″] MATURITY & STABILIZATION PHASE
(product life cycle)

[a] HIGHLIGHT DIFFERENCES BETWEEN THE PRODUCT
& THE COMPETITION

[q unit=”2″ topic=”8″] DECLINE PHASE
(product life cycle)

[a] TAKE STEPS TO EXTEND PRODUCT LIFE CYCLE

[q unit=”2″ topic=”8″] HOW TO EXTEND PRODUCT LIFE CYCLE

[a] 1- IMPROVING PRODUCTS

2- UPDATING PACKAGING

3- REDUCING PRICES

4- SEEKING NEW MARKETS

[q unit=”2″ topic=”8″] BRANDING
(4 main characteristics)

[a] 1- WITHOUT BRANDING, PRODUCTS WOULD BECOME COMODITIES

2- SEEKS TO MOVE A PRODUCT AWAY FROM BEING A COMMODITY

3- CUSTOMERS ARE WILLING TO BUY A BRANDED PRODUCT
EVEN IF IT COSTS MORE THAN THE MINIMUM PRICE

4- CUSTOMERS WANT TO BUY WHAT A PRODUCT REPRESENTS
AND NOT JUST A RANDOM PRODUCT

[q unit=”2″ topic=”8″] BRAND
(definition)

[a] 1- THE SET OF PHYSICAL ATTRIBUTES OF A PRODUCT OR A SERVICE,
TOGETHER WITH THE BELIEFS
& EXPECTATIONS SURROUNDING IT

2- IT IS A UNIQUE COMBINATION THAT A NAME
OR A LOGO SHOULD EVOKE
IN THE MIND OF THE AUDIENCE

[q unit=”2″ topic=”8″] TO BE SUCCESSFUL A BRAND SHOULD

[a] CREATE A POSITIVE IMAGE

[q unit=”2″ topic=”8″] 12 WAYS TO CREATE A BRAND POSITIVE IMAGE

[a] 1- SUBSTANCE
2- CONSUMER TRUST
3- CONSUMER ENGAGEMENT
4- BRAND STORY
5- PRICE PREMIUM
6- LONGEVITY
7- STRONG BRAND NAME
8- BRAND POSITION
9- PRIVATE LABEL
10- LADDER BRAND
11- SOFT BRAND
12- LUXURY BRAND

[q unit=”2″ topic=”8″] SUBSTANCE
(positive brand image)

[a]  CONSISTENT STYLE & QUALITY
(e.g. champagne non vintage
consistent year on year)

[q unit=”2″ topic=”8″] CONSUMER TRUST
(positive brand image)

[a] ALWAYS DELIVER EXPECTED VALUE

[q unit=”2″ topic=”8″] CONSUMER ENGAGEMENT
(positive brand image)

[a] 1- PERSONAL RELATIONSHIP WITH THE BRAND

2- BESPOKE MESSAGE TO THE TARGETED AUDIENCE
(feel the brand marketing strategy is taylored at them personally)

[q unit=”2″ topic=”8″] BRAND STORY
(positive brand image)

[a] 1- STORIES THAT CONSUMERS CAN RELATE TO

2- EMOTIONAL ATTACHMENT BRAND to STORY

3- PROMOTE AUTHENTICITY

4- CREATE ENGAGEMENT & VALUE

5- INCLUDE WHAT OTHER PEOPLE SAY
ABOUT THE PRODUCT

[q unit=”2″ topic=”8″] PRICE PREMIUM
(positive brand image)

[a] MANY CONSUMERS VIEW HIGHER PRICES
AS A GUARANTEE OF QUALITY

[q unit=”2″ topic=”8″] LONGEVITY
(positive brand image)

[a] THE BRAND HAS BEEN IN EXISTENCE FOR A LONG TIME
(e.g. champagne brands)

[q unit=”2″ topic=”8″] STRONG BRAND NAME
(positive brand image)

[a] 1- NAME EASY TO REMEMBER

2- NAME EASY TO PRONOUNCE
(in different languages)

3- NOT OFFENSIVE
(in other languages / cultures)

4- CAN INCLUDE
– geographical features (sense of place)
– company founder’s name (heritage, longevity)

5- CAN BE TRADEMARK REGISTERED

6- CARRY FINANCIAL VALUE
(brand equity)

[q unit=”2″ topic=”8″] BRAND POSITION
(positive brand image)

[a] 1- LINKED TO RETAIL PRICE

2- WHERE IT SITS IN THE MARKET & COMPARED TO ITS COMPETITORS

3- USUALLY SET AT LAUNCH

4- CAN EVOLVE OVER TIME
(but harder to shift brand position)

[q unit=”2″ topic=”8″] PRIVATE LABELS
(positive brand image)

[a] AVAILABLE ONLY AT RESTAURANTS, SUPERMARKETS…
WHO CREATED THE BRAND

[q unit=”2″ topic=”8″] LADDER BRAND
(positive brand image)

[a] 1- GIVE CONSUMERS EASY-TO-UNDERSTAND “RUNGS”
TO HELP THEM TRADE UP TO A HIGHER-PRICED
& BETTER QUALITY EXPRESSION OF THE BRAND

2- THE WHOLE RANGE OF BRANDS BENEFIT FROM
THE IDENTITY OF THE MOST PRESTIGIOUS EXPRESSION
OF THE BRAND

3- USUALLY 3 RUNGS
– accessible (least expensive)
– stretch (affordable)
– aspiration (most prestigious)

[q unit=”2″ topic=”8″] SOFT BRAND

[a] 1- A SORT OF UMBRELLA BRAND THAT HIGHLIGHTS A SET OF COMMON & SHARED FEATURES BY THE PRODUCTS CARRYING THE SOFT BRAND

2- AT THE SAME TIME ALLOW A DEGREE OF FREEDOM
& THE EXPRESSION OF A SENSE OF UNIQUENESS
WITHIN THAT BRAND

3- EXAMPLES: PDOs, PGIs…

[q unit=”2″ topic=”8″] LUXURY BRANDS
(positive brand image)

[a] 1- SUPER-PREMIUM PRICED WINES THAT
ONLY FEW CUSTOMERS CAN AFFORD

 2- PROMOTE THE IDEA THAT THEY ARE
SCARCE EVEN IF THEY ARE NOT
(perceived scarcity)

[q unit=”2″ topic=”8″] BRAND EQUITY
(definition)

[a] VALUE OF A BRAND FOR ITS OWNERS

USUALLY COMPUTED USING METRICS SUCH AS
– brand awarness
– brand image 

[q unit=”2″ topic=”8″] BRAND POSITION
(the 4 usual segments)

[a] 1- VALUE
2- STANDARD
3- PREMIUM
4- SUPER-PREMIUM

[q unit=”2″ topic=”8″] ASPIRATION BRAND

[a] 1- THE MOST PRESTIGIOUS EXPRESSION OF A BRAND

2- USUALLY CASTS ITS SUPER-PREMIUM IDENTITY
OVER THE ENTIRE LADDER

[q unit=”2″ topic=”8″] EXAMPLE OF LADDER BRANDING
(Pol Roger champagne house)

[a] 1- ACCESSIBLE = POL ROGER NON VINTAGE

2- STRETCH = POL ROGER VINTAGE

3- ASPIRATION = POL ROGER WINSTON CHURCHILL

[q unit=”2″ topic=”8″] EXAMPLE OF LADDER BRANDING
(Roederer champagne house)

[a] 1- ACCESSIBLE = ROEDERER NON VINTAGE

2- STRETCH = ROEDERER VINTAGE

3- ASPIRATION = ROEDERER CUVEE CRISTAL

[q unit=”2″ topic=”8″] EXAMPLE OF LADDER BRANDING
(on Bourgogne as a soft brand)

[a] 1- ACCESSIBLE = BOURGOGNE ROUGE

2- STRETCH = GEVREY CHAMBERTIN

3- ASPIRATION = LE CHAMBERTIN GRAND CRU

[q unit=”2″ topic=”8″] TYPES OF PRODUCTS FOR WHICH LADDER BRANDING WORKS VERY WELL

[a] ON LUXURY PRODUCTS
(like champagne)

[q unit=”2″ topic=”8″] TYPES OF CUSTOMERS FOR WHICH LADDER BRANDING
USUALLY DO NOT WORK WELL

[a] LOW INVOLVEMENT CUSTOMERS

BECAUSE
– few will be aware of the aspiration brand
– so no identity will be given by the aspiration brand
– then the entire value of the ladder will be based
on the accessible expression of the brand

AS A RESULT
– the aspiration brand will be considered as overpriced

[q unit=”2″ topic=”8″] FACTORS THAT MAY CONTRIBUTE TO THE LUXURY OF A BRAND IMAGE
FOR A GIVEN WINE
(non exhaustive, give 5)

[a] 1- QUALITY OF THE FRUITS

2- QUALITY OF THE VINEYARD

3- NO EXPENSES SPARED DURING WINEMAKING

4- RICH HERITAGE

5- FAMOUS & RECOGNIZED WINEMAKER

[q unit=”2″ topic=”8″] 3 MARKETING STRATEGIES TO PROMOTE THE IDEA OF LUXURY

[a] 1- SPONSORSHIP OF EXCLUSIVE & LUXURY EVENTS

2- POSITIONNING IN THE MOST UPMARKET RETAILERS

3- POSITIONNING ON THE WINE LISTS OF FINE DINING RESTAURANTS

[q unit=”2″ topic=”8″] GLOBALLY MOST POWERFUL WINE BRANDS
(main characteristic)

[a] BENEFIT FROM WIDESPREAD AWARENESS IN MULTIPLE MARKETS

[q unit=”2″ topic=”8″] A NEW PRODUCT WITH LIMITED CHANCES OF SUCCESS IS

[a] A PRODUCT THAT FAILS TO PROVIDE SOMETHING DIFFERENT, CHEAPER or BETTER THAN A PRODUCT ALREADY ON THE MARKET

[q unit=”2″ topic=”8″] SEGMENTATION
(definition)

[a] DIVISION OF A MARKETPLACE INTO DISTINCT & HOMOGENEOUS
SUBGROUPS (= SEGMENTS)

EACH SEGMENT IS CHARACTERIZED BY PARTICULAR PARAMETERS & TASTES
REQUIRING SPECIFIC MARKETING STRATEGIES

[q unit=”2″ topic=”8″] TARGETED SEGMENT
(main characteristic)

[a] 1- LARGE ENOUGH GROUP(S) TO BE PROFITABLE

2- SHARE SOME SIMILAR PREFERENCES & NEEDS

[q unit=”2″ topic=”8″] SEGMENTATION VARIABLES USUALLY USED FOR ANALYSIS OF A MARKET
(4 main variables)

[a] 1- GEOGRAPHIC

2- DEMOGRAPHIC

3- PSYCHOGRAPHIC

4- BEHAVIOURAL

A SEGMENT IS USUALLY MADE THROUGH THE USE OF A COMBINATION OF VARIABLES

[q unit=”2″ topic=”8″] GEOGRAPHIC VARIABLES
(use for market segmentation)

[a] GENERALLY TOO BROAD AS A STANDALONE

[q unit=”2″ topic=”8″] EXAMPLES OF DEMOGRAPHIC VARIABLES
(for segmentation purpose)

[a] AGE, GENDER…

[q unit=”2″ topic=”8″] EXAMPLES OF PSYCHOGRAPHIC VARIABLES
(for segmentation purpose)

[a] LIFESTYLE
PERSONALITY
KNOWLEDGE OF WINE

[q unit=”2″ topic=”8″] EXAMPLES OF BEHAVIOURAL VARIABLES
(for segmentation purpose)

[a] 1- BENEFIT WANTED FROM WINE (quality, prestige…)

2- WHERE THE WINE IS BOUGHT

3- BRAND LOYALTY

[q unit=”2″ topic=”8″] VARIABLES COMBINATIONS MEANINGFULNESS
WITHIN A MARKET SEGMENTATION

[a] 1- PEOPLE SHARING PSYCHOGRAPHICAL & BEHAVIOURAL TRAITS
ARE MORE LIKELY TO BEHAVE IN A SIMILAR WAY

2- PEOPLE ONLY SHARING AGE & LOCATION ARE USUALLY
A LESS MEANINGFUL COMBINATION

[q unit=”2″ topic=”9″] CONSUMER SEGMENTATION USUALLY USED IN THE WINE INDUSTRY
(2 factors)

[a] HIGH INVOLVEMENT CUSTOMERS
vs.
LOW INVOLVEMENT CUSTOMERS

(but not valid in all countries)

[q unit=”2″ topic=”9″] HIGH INVOLVEMENT CUSTOMERS
(definition)

[a] 1- HAVE DEEP INTEREST IN THE WINES THEY DRINK

2- USUALLY KEEN ON TRYING NEW PRODUCTS

3- CAN SPEND MORE ON WINES

[q unit=”2″ topic=”9″] LOW INVOLVEMENT CUSTOMERS
(definition)

[a] 1- HAVE LITTLE INTEREST IN THE WINES THEY DRINK

2- USUALLY STICK TO FEW PRODUCTS THEY KNOW

3- UNLIKELY RO SPEND MUCH

[q unit=”2″ topic=”9″] ANOTHER CONSUMER SEGMENTATION USED IN THE WINE INDUSTRY
(3 factors)

[a] 1- WINE LOVERS
– great interest
– great knowledge
– high income
– high level of education

2- WINE INTERESTED
– great interest
– moderate knowledge
– university educated
– moderate income

3- WINE CURIOUS
– moderate interest
– limited knowledge
– moderate income
– medium level of education
– see wine as a way to socialize

[q unit=”2″ topic=”9″] SUCCESSFUL SEGMENTATION

[a] IDENTIFY THE TYPE OF CUSTOMERS WHO MIGHT BUY THE PRODUCT

[q unit=”2″ topic=”9″] SUCCESSFUL SEGMENTATION HELPS FORECASTING

[a] 1- HOW MUCH CUSTOMERS ARE WILLING TO PAY

2- WHERE THE PRODUCT IS LIKELY TO SELL

3- HOW TO BEST MARKET IT

[q unit=”2″ topic=”9″] MARKET RESEARCH
(definition)

[a] THE GATHERING OF DATA AND ANALYSIS ON A SEGMENT
TO IDENTIFY NEEDS & WANTS

[q unit=”2″ topic=”9″] MARKET RESEARCH CAN BEN USED TO

[a] 1- DEMAND EXISTS FOR A NEW PRODUCT

2- WHAT FEATURES PEOPLE WOULD LIKE

3- HOW MUCH THEY ARE WILLING TO PAY

[q unit=”2″ topic=”9″] MARKETING RESEARCH IS IMPORTANT FOR

[a] CREATING A MARKETING STRATEGY

[q unit=”2″ topic=”9″] BEFORE STARTING MARKET RESEARCH

[a] 1- BE CLEAR ABOUT GOALS OF THE MARKET RESEARCH

2- IDENTIFY WHAT INFORMATION IS NEEDED

3- FROM WHOM

4- DETERMINE WHICH METHODS SHOULD BE USED
– surveys
– focus groups
– interviews
– observations
– secondary research

[q unit=”2″ topic=”9″] OBSERVING CUSTOMER BEHAVIOUR HELPS

[a] 1- FINDING OUT NEEDS & WANTS OF CUSTOMERS

2- MONITORING THE SUCCESS OF A CAMPAIGN
AND MAKE ADJUSTMENTS

3- UNDERSTANDING WHAT APPEALS
TO TARGETED CUSTOMERS

4- UNDERSTANDING DECISION MAKING PROCESS

[q unit=”2″ topic=”9″] MARKETING CAN INFLUENCE CUSTOMERS ON

[a] 1- SOMETHING THEY NEED or WANT

2- SOMETHING THEY DID NOT KNOW THEY WANTED

3- WHERE TO FIND A PRODUCT

4- HIGHLIGHTING FEATURES / SELLING POINTS OF A PRODUCT

[q unit=”2″ topic=”9″] EXAMPLES OF METHODS OF OBSERVATION
(for studies on consumer behaviours)

[a] 1- WATCHING CUSTOMERS MOVES IN SHOPS

2- STUDYING INTERACTIONS WITH CUSTOMERS

3- ANALYZING DATA FROM STORES’ LOYALTY CARDS

4- USING WEB ANALYTICS

5- STUDYING HOW MUSIC / LIGHTING INFLUENCE CUSTOMERS

[q unit=”2″ topic=”9″] THE PORTRAIT MODEL from Wine Intelligence
(6 U.S. portraits)

[a] 1- ENGAGED EXPLORERS

2- PREMIUM BRANDS / SUBURBANS

3- CONTENTED TREATERS

4- SOCIAL NEWBIES

5- SENIOR BARGAIN HUNTERS

6- KITCHEN CASUALS

[q unit=”2″ topic=”9″] 1st STEP TO CREATE A MARKETING STRATEGY

[a] DEFINE ITS OBJECTIVES

[q unit=”2″ topic=”9″] THE 4 KEY AREAS NEEDED TO BE COVERED BY MARKETING STRATEGY

[a] 1- WHAT TYPE?
– undifferenciated / mass
– niche
-multiple

2- WHAT AIMS?
– launch new product
– increase sales of existing product
– increase market share

3- HOW SUCCESS WILL BE MEASURED
– profits
– market share
– value of sales

4- THE TIMETABLE
– short term
-long term

[q unit=”2″ topic=”9″] HOW A MARKETING BUDGET SHOULD BE SET

[a] IN REFERENCE TO THE PROFITS EXPECTED FROM THE MARKETING CAMPAIGN

[q unit=”2″ topic=”9″] THE 4 STEPS OF MAKETING STRATEGY

[a] 1- UNDERSTANDING THE PRODUCT / BRAND TO BE MARKETED

2- IDENTIFYING THE TARGET MARKET

3- SETTING THE OBJECTIVES

4- DEVISING THE MARKETING STRATEGY
(5 Ps)

[q unit=”2″ topic=”9″] THE MARKETING MIX

[a] = 5 Ps

– PRODUCT
– PRICE
-PROMOTION
-PEOPLE
-PLACE

[q unit=”2″ topic=”9″] PRODUCT
(from the Marketing Mix)

[a] 1- THE OBJECT / SERVICE / SYSTEM TO BE MARKETED

2- INCLUDES THE LIQUID, PACKAGING, BRANDING

[q unit=”2″ topic=”9″] COMMUNICATION ON THE PRODUCT

[a] 1- COMMUNICATE THE CHARACTERISTICS OF THE PRODUCT
& HOW IT SATISFY NEEDS & WANTS

2- DIFFERENT TYPES OF CUSTOMERS ARE ATTRACTED
TO DIFFERENT FEATURES

3- DESCRIBE THE EXPERIENCE THAT THE PRODUCT
WILL DELIVER

4- EXPLAIN CLEARLY HOW THE PRODUCT IS DIFFERENT
FROM THE COMPETITION

[q unit=”2″ topic=”9″] WINE MARKET PECULIARITIES

[a] IS A SATURATED MARKET

MEANING THAT THERE IS A STRONG COMPETITION
BETWEEN SIMILAR PRODUCTS

[q unit=”2″ topic=”9″] PRICE
(from the Marketing Mix)

[a] 1- INCLUDES ANY ADDITIONAL COSTS

2- INCLUDES TIME & EFFORTS NEEDED BY THE CUSTOMER
TO FIND / BUY THE PRODUCT

[q unit=”2″ topic=”9″] PRICE STRATEGY TO ENTER A MARKET WITH A PRODUCT

[a] 1- LOW PRICE = ATTRACT NEW CUSTOMERS

2- CAN BE DIFFICULT TO RAISE SUBSEQUENTLY

[q unit=”2″ topic=”9″] PRICE INFLUENCE ON CONSUMER BEHAVIOUR

[a] 1- CUSTOMERS DECISION MAKING STRONGLY INFLUENCED BY PRICE

2- MORE PLEASURE IS FELT WHEN CONSUMING EXPENSIVE WINES

3- ASSUMPTION THAT THE PRICE IS BETTER IF EXPENSIVE
(especially if low knowledge)

[q unit=”2″ topic=”9″] PEOPLE
(from Marketing Mix)

[a] 1- ATTITUDES & BEHAVIOURS OF TARGET CUSTOMERS

2- EMPLOYEES ATTITUDE, SKILLS, CUSTOMER SUPPORT
& CUSTOMER SERVICE

[q unit=”2″ topic=”9″] PLACE
(from Marketing Mix)

[a] 1- WHERE THE PRODUCT IS SOLD / TO WHOM
(e.g. independant specialized retailers,
high involvement customers)

2- IDENTIFY THE MOST EFFECTIVE DISTRIBUTION CHANNELS
FOR THE TARGETED SEGMENTS

3- TAKE INTO ACCOUNT THE DIFFERENT TYPES OF MARKETS
(maturity…)

[q unit=”2″ topic=”9″] PROMOTION
(from Marketing Mix)

[a] 1- ALL METHODS USED TO PROMOTE A PARTICULAR PRODUCT

2- DIVIDED IN
– point of sale promotion
– promotion outside point of sale

3- A SINGLE TYPE OF PROMOTION IS NOT ENOUGH
FOR A WHOLE SEGMENT

4- SHOULD CONSIST IN A VARIETY OF ELEMENTS TO CONNECT
WITH A LARGE AUDIENCE

[q unit=”2″ topic=”9″] 5 TYPES OF MARKETS
(based on Maturity)

[a] 1- MATURE MARKET

2- ESTABLISHED MARKET

3- GROWTH MARKET

4- EMERGING MARKET

5- NEW EMERGING MARKET

[q unit=”2″ topic=”9″] MATURE MARKET

[a] 1- REACH ITS FULL POTENTIAL

2- STABLE / DECLINING

EXAMPLES: FRANCE, GERMANY

[q unit=”2″ topic=”9″] ESTABLISHED MARKET

[a] = STRONG HISTORICAL GROWTH TAILING OFF

EXAMPLES: ITALY, SOUTH AFRICA

[q unit=”2″ topic=”9″] GROWTH MARKET

[a] 1- WINE IS THE MAINSTREAM PRODUCT

2- MARKET IS EXPERIENCING GROWTH

EXAMPLES: USA, CANADA, BRAZIL, POLAND

[q unit=”2″ topic=”9″] EMERGING MARKET

[a] = SHOW GROWTH POTENTIAL FROM A RELATIVELY LOW BASE

EXAMPLES: CHINA, RUSSIA, TAIWAN

[q unit=”2″ topic=”9″] NEW EMERGING MARKET

[a] = WINE RELATIVELY NEW & UNKNOWN
(with potential)

EXAMPLES: INDIA, THAILAND

[q unit=”2″ topic=”9″] MATURE MARKETS CHARACTERISTICS
(positive & negative)

[a] 1- POSITIVE
– reliable trade structures
– reliable route to market
– established wine structure

2- NEGATIVE
– highest saturation
– least growth

[q unit=”2″ topic=”9″] EMERGING & NEW EMERGING MARKETS CHARACTERISTICS
(positive & negative)

[a] 1- POSITIVE
– potential for large growth

2- NEGATIVE
– carry the most risks
– do not have trade structures
– no easy route to market

[q unit=”2″ topic=”9″] AIMS OF SALE PROMOTION

[a] 1- INCREASE SALES OF EXISTING PRODUCTS

2- GAIN VOLUME SALES FOR NEW PRODUCTS

3- ATTRACT NEW CUSTOMERS

4- BIN ENDS

[q unit=”2″ topic=”9″] BIN ENDS
(definition)

[a] SALE OF OLD STOCKS / DISCONTINUED LINES

[q unit=”2″ topic=”9″] EXAMPLES OF POINT OF SALE PROMOTION
(by types)

[a] 1- % DISCOUNT

2- SEASONAL SALE

3- DISCOUNT CERTAIN DAYS

4- MULTI-BUYS

5- DISCOUNT FOR A GROUP OF PEOPLE

6- VOLUME DISCOUNT

[q unit=”2″ topic=”9″] MULTI-BUYS
(definition & examples)

[a] CONSUMERS PAY LESS IF THEY BUY MORE
(volume discount)

examples: 1+ 1free
1+ 1 at 50%
3= price of 2

[q unit=”2″ topic=”9″] TIMING TO ASSESS THE SUCCESS OF PRICE PROMOTION

[a] CANNOT BE JUDGED UNTIL THE PROMOTIONAL PERIOD HAS ENDED
AND PRICE HAS RETURNED TO NORMAL

[q unit=”2″ topic=”9″] EFFECT ON SALES OF A PRICE PROMOTION THAT WORKED

[a] VOLUME OF SALES POST-PROMOTION SHOULD BE HIGHER
THAN THE VOLUME OF SALES PRE-PROMOTION

[q unit=”2″ topic=”9″] RISK OF PRICE PROMOTION

[a] 1- NO CUSTOMER LOYALTY BUILT

2- JUST OPPORTUNITY PURCHASES

in that case, volume of sales post-promotion
will not be higher than pre-promotion

[q unit=”2″ topic=”9″] OTHER RISKS ASSOCIATED WITH PRICE PROMOTION

[a] 1- DAMAGED BRAND IMAGE

2- DISCOUNTED PRICE SEEN AS THE CORRECT PRICE

[q unit=”2″ topic=”9″] MULTI-BUYS & VOLUME DISCOUNT ARE CONTROVERSIAL BECAUSE

[a] THEY ENCOURAGE ALCOHOL CONSUMPTION

they are banned in Sweden & Scotland

[q unit=”2″ topic=”9″] 2 TYPES OF PROMOTION CARRYING THE LESS RISK OF DEVALUING THE PRODUCT / BRAND IMAGE

[a] 1- LINK SAVES

2- DISCOUNT ON DELIVERY COSTS

[q unit=”2″ topic=”9″] LINK SAVES
(definition)

[a] BUY ONE PRODUCT AND GET A REDUCED PRICE ON ANOTHER FROM A DIFFERENT CATEGORY

[q unit=”2″ topic=”9″] BENEFITS OF PROMOTION
(from the Marketing Mix)

[a] 1- INCREASE SALES

2- IMPROVE BRAND AWARNESS

[q unit=”2″ topic=”10″] THE 6 CATEGORIES OF POINT OF SALE PROMOTION

[a] 1- PRICE PROMOTIONS

2- COMPETITIONS

3- LIMITED EDITION PACKAGING

4- CONSUMER TASTINGS

5- STAFF INCENTIVE

6- STAFF TRAINING

[q unit=”2″ topic=”10″] 2 EXAMPLES COMPETITIONS
(point of sale promotion)

[a] 1- A CHANCE TO ENTER A DRAW

2- WIN A MERCHANDISE

[q unit=”2″ topic=”10″] OPPORTUNITY OFFERED BY COMPETITIONS
(point of sale promotion)

[a] COLLECTING CUSTOMERS’ CONTACT DETAILS

[q unit=”2″ topic=”10″] ADVANTAGE OF LIMITED EDITION PACKAGING

[a] CONTRIBUTE TO LUXURY BRAND IMAGE

[q unit=”2″ topic=”10″] LIMIT OF LIMITED EDITION PACKAGING

[a] DOES NOT INCREASE SALES OVER THE LONG TERM
(no long term effects)

[q unit=”2″ topic=”10″] ADVANTAGES OF ORGANIZING CONSUMER TASTINGS

[a] 1- OPPORTUNITY TO INTRODUCE NEW PRODUCTS / NEW VINTAGES

2- CAN INCREASE SALES

3- LOW INVOLVEMENT CUSTOMERS MORE LIKELY TO BUY

[q unit=”2″ topic=”10″] 3 TYPES OF CONSUMER TASTINGS
(examples)

[a] 1- IN-STORE TASTINGS

2- PRODUCER TASTINGS

3- WINE TASTING DINNERS

[q unit=”2″ topic=”10″] STAFF INCENTIVES
(point of sale promotion)

[a] SELL MORE OF A PARTICULAR PRODUCT
(receive bonuses linked to the level of sales of given products)

[q unit=”2″ topic=”10″] RISK ASSOCIATED WITH STAFF INCENTIVES
(point of sale promotion)

[a] IS CONSIDERED ILLEGAL IN SOME COUNTRIES (China) BECAUSE IT IS CONSIDERED AS BRIBERY & UNFAIR COMPETITION

[q unit=”2″ topic=”10″] STAFF TRAINING
(point of sale promotion)

[a] 1- CAN BE PROVIDED BY RETAILER / DISTRIBUTOR / PRODUCER

2- BENEFITS
– promote a product with confidence, enthusiasm
– enable story telling
– contribute to brand image

3- WORKS WELL WHEN
personal contact between employee & customers

[q unit=”2″ topic=”10″] PROMOTION AWAY FROM THE POINT OF SALES
(14 options)

[a] 1- TV / CINEMA
2- RADIO
3- PRESS
4- BILLBOARDS
5- DIGITAL ADS / ONLINE
6- SOCIAL MEDIA
7- WEBSITES
8- SMARTPHONE APPS
9- REVIEWS & REWARDS
10- WINE TOURISM
11- PUBLIC RELATIONS
12- SPONSORSHIPS
13- EVENTS & FESTIVALS
14- FREE MERCHANDISE

[q unit=”2″ topic=”10″] ADVERTISING CAMPAIGNS
(general characteristics)

[a] 1- CAN BE VERY EXPENSIVE

2- USE THE SERVICE OF AN ADVERTISING AGENCY TO DESIGN THE CAMPAIGN

3- ENSURE NOTHING MIGHT OFFEND OTHER CULTURES
(translation…)

[q unit=”2″ topic=”10″] SPECIFIC INTERNATIONAL ADVERTISEMENTS

[a] 1- DELIVER GLOBAL BRAND MESSAGE

2- USED INTERNATIONALLY WITHOUT CHANGES

[q unit=”2″ topic=”10″] 2 EXAMPLES OF COUNTRIES WHERE LAWS RESTRICT WINE ADVERTISING

[a] 1- UAE + QATAR = TOTAL PROHIBITION

2- FRANCE = LOI EVIN

[q unit=”2″ topic=”10″] RADIO
(promotion away from point of sale

[a] 1- LESS EFFECTIVE THAN TV / CINEMA

2- LESS EXPENSIVE

3- LACK OF IMAGES MAKE THEM LESS MEMORABLE

[q unit=”2″ topic=”10″] PRESS ADVERTISING
(promotion away from point of sale

[a] OPTION 1- STRIKING FULL PAGE IMAGE WITH LITTLE OR NO TEXT

OPTION 2- PAY RESPECTED WINE WRITERS TO WRITE ARTICLE

– ALLOWS TO PLACE ADVERT IN THE RIGHT PRINT MEDIA
TO REACH TARGETED AUDIENCE

– LOWER COSTS

[q unit=”2″ topic=”10″] TELEVISION / CINEMA
(promotion away from point of sale)

[a] 1- POWERFUL

2- VERY EXPENSIVE
(large marketing budgets)

3- REACH THE LARGEST NUMBER OF PEOPLE

[q unit=”2″ topic=”10″] BILLBOARDS
(promotion away from point of sale

[a] 1- OFTEN ON SIDES OF ROADS

2- STRIKING MEMORABLE IMAGE

3- SHORT & SIMPLE MESSAGE

4- POSTERS AT BUS STOPS & RAILWAY STATIONS
= allow a more detailed message

[q unit=”2″ topic=”10″] DIGITAL ADVERTISING / ONLINE PLATFORMS
(promotion away from point of sale

[a] 1- CHEAP

2- REACH LARGE / GLOBAL AUDIENCE

3- ADVERT ON ANOTHER WEBSITE

4- ADVERT ON SOCIAL MEDIA

[q unit=”2″ topic=”10″] SOCIAL MEDIA
(promotion away from point of sale

[a] 1- THE FIRST TIME IT IS POSSIBLE TO HAVE A DIRECT DIALOGUE WITH CUSTOMERS RATHER THAN TALKING TO THEM

2- IMPORTANT FOR YOUNGER CUSTOMERS

3- NEGATIVE REVIEWS / PUBLICITY = CAN BE VERY DESTRUCTIVE

[q unit=”2″ topic=”10″] 2 WAYS OF USING SOCIAL MEDIA

[a] 1- PROMOTIONAL ACTIVITIES
(adverts…)

2- NON PROMOTIONAL ACTIVITIES = EQUALLY IMPORTANT
(news, events, share photos & videos…)

IF ONLY USED FOR PROMOTIONAL ACTIVITIES IT WILL ALIENATE CUSTOMERS

[q unit=”2″ topic=”10″] TRENDS IN THE USE OF SOCIAL MEDIA

[a] 1- YOUNGER AUDIENCE TURN AWAY FROM TWITTER & FACEBOOK

2- PREFER YOUTUBE & INSTAGRAM

3- PEER REVIEWS ARE IMPORTANT

4- COMPANIES WILL MAKE IT EASIER FOR CUSTOMERS TO SHARE THEIR EXPERIENCE

[q unit=”2″ topic=”10″] WEBSITES
(promotion away from point of sale)

[a] 1- SHARE INFOS, PHOTOS, VIDEOS…

2- SHARE DETAILS ABOUT WINES

3- ALLOW STORY TELLING

4- CAN OFFER ONLINE SHOPS

5- COMMUNICATE ON FUTURE EVENTS

6- SUGGEST FOOD & WINE PAIRINGS

[q unit=”2″ topic=”10″] WEBSITES MUST BE

[a] 1- USER-FRIENDLY

2- SECURED

3- UP-TO-DATE

4- CONSISTENT WITH MARKETING STRATEGY

[q unit=”2″ topic=”10″] DOWNSIDE OF WEBSITES

[a] 1- PERSONALIZED SITE = COSTLY

2- COST OF MAINTENANCE

3- PEOPLE RARELY GO BEYOND FIRST COUPLE
OF PAGES ON SEARCH ENGINES

4- CAN BE ACCESS BY PEOPLE BELOW DRINKING AGE

[q unit=”2″ topic=”10″] SMARTPHONE APPS
(promotion away from point of sale)

[a] 1- FIND / READ ABOUT / LEAVE COMMENTS & REVIEWS ON WINES

2- MANAGE PERSONAL CELLARS

3- SHOPS SHARE THEIR UP-TO-DATE STOCKS

[q unit=”2″ topic=”10″] REVIEWS & AWARDS
(promotion away from point of sale)

[a] 1- FAVOURABLE REVIEW & HIGH SCORE BY RESPECTED CRITICS
= CAN SIGNIFICANTLY BOOST SALES

2- WINE COMPETITIONS

3- MEDALS & AWARDS CAN BE USED FOR PROMOTIONAL PURPOSE
(possible to buy bottle stickers)

4- WILL INFLUENCE LARGE WINE BUYERS
(supermarkets…) 

[q unit=”2″ topic=”10″] 2 EXAMPLES OF FAMOUS INTERNATIONAL WINE COMPETITIONS

[a] 1- DECANTER WORLD WINE AWARDS

2- INTERNATIONAL WINE CHALLENGE

[q unit=”2″ topic=”10″] WINE TOURISM
(promotion away from point of sale)

[a] 1- OPPORTUNITY TO ENGAGE WITH THE PUBLIC

2- OFFER WINE TASTINGS = INCREASED LIKELYHOOD OF SALES

3- CAN OFFER OTHER SOPHISTICATED EXPERIENCE
(tours, casual dining, accomodation, special events, weddings,
fine dining…)

[q unit=”2″ topic=”10″] 2 EXAMPLES OF FAMOUS WINE TRAILS

[a] 1- NAPA VALLEY WINE TRAIL

2- ALSACE CYCLE ROUTES

[q unit=”2″ topic=”10″] HIGH INVOLVEMENT CUSTOMERS
vs.
LOW INVOLVEMENT CUSTOMERS
(regarding wine tourism habits)

[a] 1- HIGH INVOLVEMENT CUSTOMERS
= TRAVEL TO WINE REGIONS TO VISIT SPECIFIC WINERIES 
+ TASTE LOCAL FOOD

2- LOW INVOLVEMENT CUSTOMERS
= VISIT WINERIES BECAUSE THEY ARE NEARBY
(this segment should not be ignored because
it can make recommendations)

[q unit=”2″ topic=”10″] ADVERTISING
(definition)

[a] DRAW ATTENTION TO AND PROMOTE A SPECIFIC PRODUCT OR RANGE OF PRODUCTS

[q unit=”2″ topic=”10″] PUBLIC RELATIONS
(definition)

[a] AIM AT GIVING THE BUSINESS THE MOST FAVOURABLE IMAGE IN THE MIND OF ALL STACKHOLDERS, CUSTOMERS & BEYOND

[q unit=”2″ topic=”10″] PUBLIC RELATIONS
(promotion away from point of sale)

[a] 1- NOT THE SAME AS ADVERTISING

2- TYPE OF ACTIVITIES
– attend public events
– appear on tv/radio shows
– press release
– brand ambassadors

[q unit=”2″ topic=”10″] CSR
(definition)

[a] = CORPORATE SOCIAL RESPONSIBILITY

THE ENGAGEMENT BY A COMPANY TO GO BEYOND ITS PURE BUSINESS OBJECTIVES AND TAKE INTO ACCOUNT OTHER DIMENSIONS:
ENVIRONMENT, LABOUR RELATIONS…

[q unit=”2″ topic=”10″] STRONG CSR HELPS

[a] 1- IN CREATING A POSITIVE BRAND IMAGE

2- IN PUBLIC RELATIONS

[q unit=”2″ topic=”10″] KEY OPINION LEADERS
(characteristics)

[a] 1- HAVE LARGE / LOYAL FOLLOWERS

2- MAY BE HIRED TO CREATE HIGH QUALITY CONTENTS 
(on social media for instance)

3- POWERFUL BECAUSE
– peer reviews
– word of mouth

[q unit=”2″ topic=”10″] SPONSORSHIP
(promotion away from point of sale)

[a] 1- SPORTING EVENTS
– Mouton Cadet Ryder’s Cup
(controversy = healthy vs. alcohol)

2- CULTURAL EVENTS

3- TV PROGRAMMES

[q unit=”2″ topic=”10″] EVENTS & FESTIVALS
(promotion away from point of sale)

[a] 1- LIKELY TO ATTRACT HIGH INVOLVEMENT CUSTOMERS

2- ATTRACT BROAD RANGE OF CUSTOMERS

[q unit=”2″ topic=”10″] DISADVANTAGES OF EVENTS & FESTIVALS
(promotion away from point of sale)

[a] 1- ADDITIONAL COSTS
– additional staff
– pay to exhibit
– delivery costs
– stocks for samples
– preparing stands

2- COMPETING FOR ATTENDEES’ ATTENTION

3- MUST BE CAREFULLY MANAGED
(accident due to overdrinking)

[q unit=”2″ topic=”10″] FREE MERCHANDISE
(promotion away from point of sale)

[a] 1- VARIOUS PROMOTIONAL ITEMS OFFERED WITH SOLD PRODUCTS
(ice buckets, corkscrews…)

2- INCREASE BRAND AWARNESS

3- NOT ONLY IMPACT THE DIRECT CUSTOMER BUT ALSO HIS ENTOURAGE

[q unit=”2″ topic=”10″] IMPLEMENTING & MONITORING MARKETING STRATEGY
(key characteristics)

[a] 1- DYNAMIC PROCESS

2- NEED CONSTANT REVIEWS / CHECKS

3- MAKE ADJUSTMENTS NEEDED

4- ABANDON CAMPAIGN / PRODUCT IF NEEDED

5- USE INDICATORS TO HELP MONITOR
(profits, sales, market share…)

6- ORGANIZE OPPORTUNITIES TO RECEIVE FEEDBACKS
(focus groups…)

[q unit=”2″ topic=”10″] 3 MAIN OPTIONS TO CARRY A MARKETING CAMPAIGN

[a] 1- IN-HOUSE MARKETING TEAM

2- OUTSOURCE TO
– Public Relation Agency
– Advertising Firm

3- BECOME A MEMBER OF 
– Industry Association
– Generic Trade Body
– Informal Trade Group

[q unit=”2″ topic=”10″] 2 EXAMPLES OF WINE INDUSTRY ASSOCIATIONS

[a] 1- CONSORZIO (Italy)

2- VDP (Germany)

[q unit=”2″ topic=”10″] 2 EXAMPLES OF WINE “GENERIC TRADE BODIES”

[a] 1- WINES OF AUSTRALIA

2- WINES OF SOUTH AFRICA

[q unit=”2″ topic=”10″] EXAMPLE OF A WINE “INFORMAL TRADE GROUP

[a] VIGNO (Chile)

[q unit=”2″ topic=”10″] MAIN CHARACTERISTICS OF GROUPED MARKETING EFFORTS

[a] 1- CHARGE MEMBERSHIP FEES

2- CHEAPER THAN EMPLOYING OWN MARKETING EXPERTS

[x] GOOD JOB!!   [restart]

[/qdeck]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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