High-volume, Inexpensive Branded Chardonnay Flashcards
Global over-supply
- Competition from cheap alternatives
- Threat of being left with unsold wine near harvest
- Sell at lower price, sometimes below production cost
Strength of the economy
- Buyers are likely to be at risk during recession
- Threat to sales
Profit margin in relation to volume of wine sold
- Tiny margin per unit
- High-volume sales
Costs of grape growing (12x75cl)
Under $20
Costs of winemaking (12x75cl)
Under $30
Grape growing costs as a percentage of total production costs
70%
Choice of retailer in a free market
Supermarket and Convenience shop
- Low-involvement consumers
- Price-conscious
- Convenience of buying wine together with other goods
Not:
- Deep discounters have own private labels
- Casual dining for price comparison
How likely is selling direct to retailer in a free market
Most likely
- Directly to supermarkets and convenience shops
How likely is selling via an intermediary in a free market
Second most likely
- Via an agent, distributor, broker or joint venture: focus on production but add to costs
How likely is selling direct to the consumer in a free market, and why
Unlikely
- Cellar door/club: Low-involvement consumers
- Events: additional staff
- Online shop: warehousing and delivery to individuals
How likely is price promotion
Likely
- Competition
- Attract new customers
How likely are competitions as a form of promotion
Possible
- Engagement
- Contact details for future promotions
How likely is limited edition presentation as a form of promotion
Possible
- Competition
- Linked to events in the calendar
- Linked to sponsoring events
How likely are tastings as a form of promotion
Unlikely
- Supermarkets/non-destination are not suitable settings
- Lack of trained staff in settings
How likely are staff incentives as a form of promotion
Possible in hospitality
- Rewarding members who sell the most of a particular brand
