2. BACKGROUND
• Wine has been well known since Egyptians and Greeks
• Under Roman Empire : Almost every town had its local vineyards and wine
become a peasant’s beverages.
• Christian era : Wine used for liturgical services
• Middle ages : Wine as a mark of prestige and become a first niche market for
premium wine
• In early 19th vines being planted in rows, so that become more efficient.
• Distribution : sold in bulk to merchant traders
• Problems in distribution : poor roads, and complex toll and tax systems so
shipping become expensive
• Late 18th, mass production of glass bottles innovations, user of cork stoppers, and
development of pasteurization.
• Result : greater wine stability and longevity, distribution became the norm,
expanded production, and global market was born.
6. Analysis
OLD WINES
• The New World nations has the distribution channel of wine in
Europe, because they are able to innovate the value chain. This makes
the local producer to distribute their products with the New World
distribution.
• The local wines are losing their customers, because the Old World could
not understand their customer and they are not good at marketing.
NEW WORLD
• In Australia, overproduction damaged the price, and in US the
cost is very high. Those things could impact on unstable wine
production.
• Many factors bring the demand decrease, such as substitute
products, the government law, and the health issues. Also the
New World producers need to fight against the Old World
producers to keep their market.
7. Distribution
The 3 main channels for retailing wine are:
• Supermarkets - high volume, mainstream
brands, convenience and competitive pricing
• High Street - diverse selection of wines and a
different category mix
• Independent Specialists – more involved
experience, exclusive or limited release product
offering.
The Old World wines could not compete on the
supermarkets and high streets because the retailer
need a fast-moving and famous brand to increase
the sales, which was dominated by the New World
wines.
Also the Old World hampered by the lack of
customer knowledge and marketing skills.
8. Exhibit 6
2001 Consumption Production Exports Import
Country (Total hls 000s)
France 34200 45400 15180 5370
Italy 28150 45900 18480 1750
Argentina 12200 15050 3260 140
Spain 14260 34700 15280 200
Germany 20380 10500 3450 14240
Australia 5960 14304 7980 340
United Kingdom 12760 - - 12910
United States 25125 20000 4240 8450
10. Analysis
• As US, Australia, and many
other wine producers
compete with substitution
product, the old world wine
producers better get a higher
target market to avoid
directly competing with
substitution products
11. Brand Power
• 7 US wine brands:
– Gallo
– Robert Mondavi
– Beringer
– Sutter Home
– Blossom Hill
– Kendall Jackson
– Inglenook
• 6 Australian brands:
– Yellowtail
– Hardy’s
– Jacob’s Creek
– Lindemans
– Wolf Blass
– Penfolds
Source: http://www.drinkspowerbrands.com
14. Analysis
• No brand awareness means that every old
world’s wine could has a value on their history
because customers only care about the year of
production, not the brand
15. LESSON LEARNED
• The heritage could not be last forever, they still need to
innovate if they want to keep exist on the market
• Sociological influences on consumer behavior, for
examples :
- rituals in a culture
- social class
- generalization
• Psychological influences on consumer behavior :
- life style
- motivation
- perceptions
- desire to (show) status
Notas do Editor
Rituals in a Culture:In the old world, the consumption of wine only to noblemen who could afford expensive wine prices. Nowadays, the development of culture becomes more modern, everyone joined in accordance with the level of wine consumption and economic needs. For example:Family rituals, in the family there are ritual often done, such as mealtimes, mothers day, ect. In this event the use of wine consumption at this time began to change, using wines with low levels.Ritual Gift giving, in some countries there is ritual. One of the gift of choice was wine. The selection of wine is definitely adjusted to motivation, interests, economic levels, and the moment.Social class and life style: Almost every society can be viewed in terms of social class based on the characteristics appropriate to the culture.social class and life style greatly affects consumer behavior of its members. members of the same social class will tend to have values, beliefs and behavior of the same. some things that could be a factor classification of social status include: occupation, source of income, associations with others, the level of influence.For example :In the old world, only people with the social status of upper class who could enjoy the wine because the distribution process is costly. Nowadays, every class society could choose the wine they want, according to their abilities, because the development of wine industry that has created a variety of quality wines. Similarly, the lifestyle. People with high income but have a casual lifestyle that will have a different behavior in terms of wine consumption by people with a glamorous lifestyle.
