Free Flashcards DipWSET D2: Wine Business (All Decks)

Free DipWSET D2: Wine Business Flashcards

ALL DECKS

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[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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