P3 Flashcards

Question

Brand building standpoint / Long term success

Answer 1

Tied to awareness and brand positioning. For a Bordeaux Chateau focused on long term success, might choose to keep inventory back for later release, moderate price increases to ensure a more even increase and spend money for activities like visiting top markets for trade work.

Answer 2

Business that is able to reliably have a profit after all expenses/debt servicing is complete.

Answer 3

Sequential process of production and distribution of an item

Answer 4

Breaking into various parts. Opposite of consolidation

Answer 5

A label that has no branded winery or physical vineyards - low capital requirements usually with more focus put towards brand development, sales & marketing.

Answer 6

A brand with strong consumer recognition, high turn, increasing sales/velocity/price and with demand ahead of supply.

Answer 7

Means any descriptive matter, written, printed, marked, embossed or impressed on, or attached to the packaging, that gives information to consumer about product.

Answer 8

A general direction through time. Can be short or long term

Answer 9

Limited time price discount with the goal of driving increased sales volume. Very important tactic in grocery store distribution (55% of wine sales at Waitrose are on promotion), but also important in burgeoning online sales channel. Will often be promoted against a "false frontline" (a falsely high SRP cross through to show a large discount). Various types of promotions include: BOGO (buy one, get one - Publix grocery stores in FL; Nickel Sale at BevMo), linked promos (ie buy XYZ Zinfandel, get $5 off steak). With grocery loyalty programs, have ability to target promotions via companies like Catalina (ie if someone buys Cavit, feed them a coupon for Santa Margherita). Regulations manage what type of promotions are allowed, usually connected to health concerns. In UK, unit minimum pricing helps set price controls. In other markets, BOGO's or happy hour pricing are illegal. In some markets, mandatory minimum mark-ups control pricing (ie in Ohio, have a mandatory 33% mark-up) while in others, selling below cost (only done with big brands as loss leaders) is allowed. in online, most promotions are tied to volume purchase or free shipping. Sainsbury's does 50% off during key periods (ie half price Champagne at the holidays) In online channels, some sophisticated dynamic pricing models that adjusts promotions offered and pricing based on data about the person shopping.

Answer 10

Products manufactured by one company for sale undet another companies brand. "Own Label" specifically carries the brand of the retailer that is carrying it (ie Kirkland, Tescoe, etc.). Private Label is 24.2% of UK Grocery - HUGE part of the market. Covers the spectrum from lowest price to top tier (ie Chave Hermitage for The Wine Society). Marks & Spencer is almost entirely Private Label.

Answer 11

Control brands: Owned by the supplier, but exclusively carried by one retailer.

Answer 12

Multi-unit retailer, usually located in multiple markets. Often able to negotiate discounted purchasing through volume commitments and work at lower margins (ranging from 12% at Costco, 18% at Trader Joes, 28% at Harris Teeter) that allows them to have lower prices vs independent wine shops (generally 33% margin). Suppliers often make HQ calls rather than sell through distributors (even though the actual sales happens through the distributors) and work to offer price and supply consistency across the markets. Large suppliers work to have very close relationships - ie Gallo is a wine "category captain" for Kroger, the largest wine purchaser in the US (though Costco also says they are largest) which means they set the shelf matrix and are able to put their own products in better placements.

Answer 13

Single-unit retailer or small chain (5 or less locations?) that differentiate based on selection with a POV or high levels of service and knowledge. Will often be highly targeted to the neighborhood or a particular consumer group (ie collectors, highly engaged consumers, new but interested consumers etc) and will offer classes, tastings, and other educational opportunities to build loyalty. Margins are higher, ranging from

Answer 14

Directional shifts in consumption behavior, purchase motivation, or category affinity. In the past decade, trends include 1) premiumization 2) growth in sparkling, esp. Prosecco, Rosé, Sauvignon Blanc

Answer 15

Market that is difficult to measure, but includes the purchase or rare or collectible wines with the goal of selling at an appreciated price in the future. Includes a portion of retail sales, DTC allocation sales, as well as private sales and auction. The 2019 Auction Market: $438M. Dipped in 2020 ~9%. Viewed as appealing due to low long term volatility (due to limited supply) and arguably positive returns vs. stock index funds. Collectible, "passion assets" are illiquid and require appropriate storage, etc. Regional focus on: Burgundy (+10% auction sales in 2020 per Wine Market Journal Burgundy index), Bordeaux (though has declined), Cult Napa, Italian Blue Chips, Rhone, Champagne.

Answer 16

Websites and apps that allow users to create and share content or to participate in social networking. Wine businesses from throughout the value chain can engage with consumers via social media to 1) build awareness and affinity 2) Build connection 3) convert to purchase. Wine brands have an advantage as there is infinite beautiful and timely content possible for sharing...

Answer 17

Environmental credentials are third party certifications such as organic, biodynamic, or sustainable, that link a wine producer’s production practices with their desire to minimize environmental harm. [Organic certifications are granted by numerous agencies such as Ecocert, Biogro, or CCOF and their criteria vary. Sustainable certification is similarly fragmented and most often regionally specific (e.g. Lodi Rules, LEED. ) However, Biodynamic certification is more limited and dominated by Demeter. Thus, apart from biodynamic certification, environmental credentials defy fully consistent globally criteria.]

Answer 18

Vertically integrated business model that owns both the production and relationship with the consumer. Usually driven by e-commerce, but includes Cellar Door, winery hospitality, urban tasting rooms, as well as e-commerce. In 2020, saw a significant surge in DTC sales in many markets.

Answer 19

Creation of something new, whether within packaging, promotion, communication, brand, or style.

Answer 20

Wine with production far below demand such that there is a process of allocation and often price appreciation on the secondary market.

Answer 21

All of the elements of containing a wine for sale, including bottles, labels, capsules, closures or alternative packaging such as PET, BIB, Cans, Kegs

Answer 22

Different types of containers and sizes for the commercial sale of wine.

Answer 23

Final purchaser who opens/consumes the wine at the end of the supply chain

Answer 24

Connection between the beginning and end of the supply chain. A close relationship allows significant DTC sale (via wine tourism, in-market activities such as wine dinners, digital marketing, social media) and is often with high engagement consumers.

Answer 25

Production volume below the average; often the result of frost, drought, or other climatic challenges that impact yield

Answer 26

Generally the 5 p's (product, price, people, place, promotion)

Answer 27

Strategy includes selection of partners and priority markets / channels + tactics and activities to support them

Answer 28

Markets where wine appears to have reached its potential with stable or declining volumes. IE: Germany, UK, France, Australia

Answer 29

Markets where wine is experienceing growth and shows potential from a relatively low base.

Answer 30

Markets with strong historic growth that is tailing off. Ie US, Canada, Japan

Answer 31

Venture owned jointly by a group of members. Effective way to pool winemaking and marketing resources especially within regions that have a low average price per bottle and numerous but small vineyard holdings.

Answer 32

Brief created to initiate the design of a brand, a lablel, and advertisement. It includes the brand identity, objectives, consumer group, etc.

Answer 33

The OIV defines wine: a beverage containing a minimum of 8.5% abv (although wines that are naturally low in alcohol such as Moscato d’Asti or many traditional German styles have special derogations). Low alcohol wine might be considered to be one with less than 8.5% abv. UK law: Wine with less than 1.2% abv, and an alcohol free wine is one with an abv below 0.05% abv. A ‘reduced alcohol’ wine, in the UK, is one with an alcohol level that is lower than the average. In US law: less than 7% abv. Possibly: Wine with less than 8.5% abv, although wines with much lower alcohol levels will be discussed.

Answer 34

Category of wine that eshews the use of animal products in its production. In most extreme, ensures no gelatin in label glue etc. Mostly impacts fining options. Size of the category varies from country to country; key in UK retail and monopoly purchase boards.

Answer 35

Category of wine that is certified as organic (eschews the use of chemicals) and has production restrictions. Certification standards vary by region. In the US, must also avoid any sulfur inputs

Answer 36

Wine made with to goal of avoiding any form of environmental degredation while maintaining the economic viability of the vineyard and winery.

Answer 37

Measure of repeat purchase and brand affinity from a set of consumers.

Answer 38

Purchaser for a restaurant or retail shop; range from a side job to a highly knowledgable beverage professional. Tasked with maximizing profits, sales, and often team education

Answer 39

Better price than the competition for equivilant quality

Answer 40

Profit that allows for investment and allow long term business success. In the context of this question about on premise, should cover that wine is a higher margin category than food for restaurants, but has costs that include glassware, expertise, inventory etc.

Answer 41

Self-service shop with an array of products; wine is generally focused in the entry to low-premium tier

Answer 42

Differentiating aspects of a brand that help drive success / growth

Answer 43

According to Pew / Brookings: Cohort born between 1981-1996. Grew up and had attitudes being formed around the turn of the millenium. 9/11 an important turning point that made 1996 the cutoff b/c Gen Z doesn't have a collective memory of the event

Answer 44

Were the "I generation" because of attachment to i-phones. Likely will change once there's a better understanding of what unites them.

Answer 45

The path from producer to consumer in which value is created for the consumer that exceeds the cost of providing its good

Answer 46

A company with offices and assets in at least one country beyond it's headquarters. In the wine business, often luxury goods companies. For example LVMH, EPI, AXA Millesime, Richemont, Constellation; not always luxury though, ie Altrea (Tobacco + Chateau Ste. Michele - though recently sold)

Answer 47

Brand that is exported to multiple countries and must have the volume, marketing and sales capabilities to navigate compliance, cultural complexity, as well as pricing strategies across them. Some have unique go to market strategies such as the Place de Bordeaux for GCC. Really only Champagne, Bordeaux, Port are true Global Wine Brands

Answer 48

The marketing of a wine based on the place where it is grown. Concept incapsulates: the entire physical environment of a vineyard, including the soil, topography, and climate as well as the human interaction with the vine within the tradition of the region that gives wines their sense of place and typicity.

Answer 49

Regional marketing or governing bodies that collect dues (either via a portion of excise taxes or via voluntary participation) that act on behald of the region as a whole and help form regional identity. There activities may include marketing (trade and consumer), R&D, industry support, etc.

Answer 50

Core guiding principles of a company; for family companies, likely to be multi-generational in thought and forward looking.

Answer 51

A company or group of people authorized to act as one unit. Generally, owned by shareholders and often with quarterly or short term reporting that can impact tactics & strategy

Answer 52

"Green” approaches assume a choice for more sustainable practices, lighter touch inputs, and a lower carbon footprint throughout the value chain.

Answer 53

Multi-day blind tasting events awarding points and medals by a panel of judges. Impact is often regional in nature.

Answer 54

High quality wines display balance, length, complexity, concentration, typicity, and often age-ability. They are generally limited in production and often command premium or luxury prices.

Answer 55

Wine of the highest quality, coming from a special location, and with an element of scarcity an elevated price, and provides a sense of privilage and pleasure to the owner.

Answer 56

A better quality wine is one that has a greater degree of these characteristics than the average, and usually involves a degree a degree of typicity.

Answer 57

A wine that is the highest tier of quality often from classic regions, vineyards and winemakers. It is often made in limited quantities, appeals to conneussers and collectors, has a premium price and will often appreciate in value as it ages. Consistency (history) is key

Answer 58

Social responsibility is the obligation of a producer to think beyond the boundaries of the commercialisation of his/her wine and to consider the wider impact of their actions on the environment, the local community and the broader community at large.

Answer 59

Wines brands with a devoted following, minuscule production (generally under 2000 cases), precise allocations and rapidly escalating prices; often reflect a unique place, distinctive often quixotic personality, both true and exaggerated paucity, differentiating prestige packaging, and elevating promotion strategies

Answer 60

Used in any social contexts, voluntary or mandatory, operating in such a way that it is easy for others to see what actions are performed

Answer 61

Definition that means different things for different consumers…by reading such label consumers are not misled by it and can make informed choices. However, today’s trend - “clean label” is evolving to mean a “better product”. This can include organic, low calories, “free-from” and many other claims on the label, but also ingredients listing. In the wine sector label transparency determined by labelling requirements (!)

Answer 62

An important element of high-quality wines, assessed through aromatic, palate impression, and finish. Complexity can be impacted through primary elements from grapes and secondary elements of winemaking as well as processes during maturation that build and enhance complexity. Complexity also develops and diminishes as a wine ages with tertiary elements, but the greatest impact a winemaker has is with the secondary winemaking stage. The expectation of complexity is also dependent on the style of wine.

Answer 63

Positive outcome, often measured in terms of profit, but can also include prestige, growth of market share, expansion of sales.

Answer 64

The opposite of a blessing. A negative outcome, measured by declining profits, prestige, market share, contracting markets.

Answer 65

Tendencies that a consumer has when buying products or services or engaging with brands ranging from how and where they shop to how they consume marketing content to how they consume the product itself.

Answer 66

Those who consume wine at least 1 time/month (varies by research group and country)

Answer 67

the total level of greenhouse gases (GHG), mainly carbon dioxide (CO2), released during the lifecycle of a product. Carbon footprint measurement is increasingly a concern to businesses and consumers. Several national carbon footprint communication programs exist which allow logo identification on product labels but IPAS 2060 is the internationally recognized standard for carbon neutrality.

Answer 68

(DTC) is the leanest business model where one producer and one buyer are connected. Direct to consumer (DTC) sales bypass the traditional import/retail routes to market. The end consumer purchases directly from the winery through cellar door, wine clubs, events, winery website, Brand e-shops, phone and mail order sales.