Low-volume, Super Premium Cabernet Sauvignon Flashcards

1
Q

Global over-supply

A
  • Volumes are low
  • Little impact on sales
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2
Q

Strength of the economy

A
  • Volumes are small
  • Buyer are less likely to be at risk during recession
  • Little impact on sales
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3
Q

Profit margin in relation to volume of wine sold

A
  • High margin per unit
  • Low-volume sales
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4
Q

Costs of grapegrowing (12x75cl)

A

Almost $300

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5
Q

Costs of winemaking (12x75cl)

A

Over $400

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6
Q

Why is grape growing more expensive

A

Labour, due to a number of likely factors:

  • More interventions in the vineyard (pruning, leaf removal, crop thinning etc)
  • More manual work
  • No benefit from economies of scale
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7
Q

Why is winemaking more expensive

A
  • Oak: new oak barrels vs oak chips
  • Cellar overheads: 18 months maturation vs 2 months
  • Cellar overheads: individual barrels vs in bulk
  • Quality materials: glass, closures, labels, case packaging
  • Higher standard for materials
  • Less benefit from economies of scale
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8
Q

Grape growing costs as a percentage of total production costs

A

70%

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9
Q

Choice of retailer in a free market

A

Specialist retailers and fine dining restaurants:
- Small volume
- High price
- High-involvement consumers

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10
Q

How likely is selling direct to the retailer in a free market

A

Unlikely
- Inefficient to deal with many different small retailers

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11
Q

How likely is selling to a retailer via an intermediary

A

Most likely via an agent, distributor or broker
- Know the target market
- Handle many, small outlets
- Focus on production
- Costs get absorbed in high price

Joint venture is unlikely due to small volume

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12
Q

How likely is selling directly to the consumer

A

Cellar door and clubs: very likely
- Experience
- Exclusive offers
- Brand loyalty

Events and online: unlikely
- Not enough volume

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13
Q

How likely is price promotion as a form of promotion

A

Unlikely
- Devalue brand image
- Small volume

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14
Q

How likely are competitions as a form of promotion

A

Unlikely
- Price is too high

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15
Q

How likely are competitions as a form of promotion

A

Unlikely
- Price is too high

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16
Q

How likely is limited edition presentstion as a form of promotion

A

Possible
- Contribute to luxury brand image
- Investment potential

17
Q

How likely are tastings as a form of promotion

A

Unlikely
- Small volume
- More likely: paid tastings by retailers

18
Q

How likely are staff incentives as a form of promotion

A

Unlikely
- Limited volume

19
Q

How likely is staff training as a form of promotion

A

Likely
- Knowledge is needed

20
Q

How likely is advertising as a form of promotion

A

Possible
- Specialist wine publications aim for high-involvement consumers

21
Q

How likely is social media as a form of promotion

A

Unlikely
- Difficult to reach limited number of potential consumers

22
Q

How likely is a website as a form of promotion

A

Likely
- Reasonable cost

23
Q

How likely is PR as a form of promotion

A

Unlikely
- Unless targeted at top wine journalists and influencers

24
Q

How likely is sponsorship as a form of promotion

A

Unlikely
- Company is unlikely to be big enough
- Small volume would not meet demand

25
Q

How likely are events as a form of promotion

A

Unlikely
- Unless small, prestigious events
- Branded free merch is an option

26
Q

How likely are reviews and awards as a form of promotion

A

Possible
- Samples for competitions, especially for unknown regions
- High-involvement consumers can be influenced
- Respected critics can increase investment potential

27
Q

How likely is wine tourism as a form of promotion

A

Possible
- Determined by volume available and producer preference