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D2 > Businesses/Markets > Flashcards

Businesses/Markets Flashcards

1
Q

Advantages to Estate Wineries?

A

Control entire process
Obtain entire profit
Marketing benefits for authenticity
More financially viable due to reusing equipment

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2
Q

Disadvantages to Estate Wineries?

A

Cost of equipment
Cost of managing/running vineyard/winery
More vintage variation
Higher cost in bad vintage

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3
Q

Advantages to Growers?

A

Cash on sale
No marketing/winery costs
All efforts focused on grape quality

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4
Q

Disadvantages to Growers?

A

Vintage variation risk

Supply/demand risk

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5
Q

Options for growers to sell grapes?

A

Short-term contract
Long-term contract
Spot market

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6
Q

Role of a merchant?

A

Buy wine from a grower-producer to mature and bottle

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7
Q

Advantage & Disadvantage of Grower-Producer?

A

No maturation/marketing costs

Smaller profit

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8
Q

Advantages of merchants?

A

No vineyard costs
Flexibility in poor vintages
Flexibility of type of production

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9
Q

Disadvantages of merchants?

A 
No control over growing/winemaking
Cost variation (spot market)
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10
Q

What is En Primeur?

A

Wine futures
Purchased while still in barrel
Cheaper/easier on purchasers, funds producers

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11
Q

Advantages of co-ops?

A

Pooled financial resources
Shared equipment
Expert services

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12
Q

Disadvantages of co-ops?

A

Democratic process - can be slow
Pay on volume and/or quality of entire portfolio
Not all profits received - re-invested in technology

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13
Q

Advantages of Custom Crush?

A

No equipment costs

Expertise of professional winemaker

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14
Q

Disadvantage of custom crush?

A

No control on style

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15
Q

Define virtual winemakers?

A

Individuals who do not own a winery or a vineyard; they purchase fruit/custom crush and then market their own brand

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16
Q

Advantages of conglomerates?

A

Control at all stages
Significant negotiating power
Regional offices in significant markets
Other alternatives if supply issue

17
Q

What is HoReCa?

A

Hospitality sector

Hotels/Restaurants/Cafes/Catering

18
Q

Advantages to selling directly to retailers?

A

No intermediary costs
Control on who carries their product
Controlled brand image/marketing

19
Q

Disadvantages to selling directly to retailers?

A 
Administrative burden
Collection/transportation/delivery
Import taxes/compliance
Financial risk
Lack of relationships in foreign market
Lack of knowledge of foreign market
20
Q

Advantages of a distributor?

A 
Knowledge of local market
Can arrange introductions/trade shows
Take on administrative burden
Experienced staff
Greater resources
One point of contact for retailer
21
Q

Disadvantages of a distributor?

A 
Reduced profits
Get lost in large portfolio
Loss of control in where product is sold/how it is marketed
Can be dropped
Time to select the right partner
22
Q

Define a joint venture?

A

Two comparably-sized companies that partner

Typically at different stages in the supply chain to avoid intermediary costs

23
Q

Differences between brokers and distributors?

A

Brokers have lower fees and take on less risk/responsibilities
Generally 2% to arrange a deal

24
Q

Methods of direct sales to consumers?

A

Cellar door
Events
Wine club
Online

25
Q

Benefits of cellar door?

A 
Engage with consumers
Tastings
Build brand awareness and loyalty
Word-of-mouth marketing
New product trial with direct feedback (less market research)
Can be at any location
26
Q

Risks of selling to supermarkets?

A 
Strong negotiating power
Loss of control over pricing
Lots of competition
Promotion costs/fees
Delisting
27
Q

What differentiates deep discounters from supermarkets?

A 
Lower profit margin
Basic display
Limited products
Primarily private labels
Closeout items
28
Q

Advantages to online retail?

A

Larger variety

Warehouse vs expensive storefront

29
Q

Disadvantages to online retail?

A 
Delivery costs
Staff to answer questions
Website quality
Technical support
Constant updates
30
Q

What type of retailer is likely to carry allocated items?

A

Wine investment companies

Berry Bros & Rudd, Farr Vintners, Fine & Rare

31
Q

Types of bars?

A

Specialty bars

General bars

32
Q

Types of restaurants?

A

Non-destination restaurants
Casual dining
Fine dining

33
Q

Define monopoly market, and name two examples?

A

100% government controlled alcohol sales

Sweden and Canada

34
Q

What is the retail market of Sweden?

A

Systembolaget

35
Q

What is the government control in Ontario?

A

LCBO

Liquor Control Board of Ontario

36
Q

What enacted prohibition in the US?

A

Volstead Act

37
Q

Types of states in the US Three Tier System?

A

Control, Open, Franchise

38
Q

How has the number of wineries and distributors in the US changed in recent years?

A

Distributors down from 3000 to 1200

Wineries up from 2000 to 9500

D2 (3 decks)

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