International makreting entering the wine market

A monopoly occurs when one company is the main provider of a product or service in a market. Canada has one of the most regulated markets for wine in the world and trade issue include state monopoly of liqueur stores, subsidies for the limited local production of wine, and a distribution system that curtails the ability of foreign companies to market their products.

Due to political and economic instability, the wine industry was not able to develop and take on a global perspective until when Chile began to focus on the exporting of natural resources to strengthen its economy.

The top 8 companies produced a total of Another innovation that Mondavi implemented was the use of French oak barrels. This Industry Note provides background information relating to the third strategic priority of positioning U.

A few examples of some of the distribution channels that Wente utilizes include opening wine bars in airports from Africa to the Pacific Rim.

The total volume is up from the deficit number of 33, million gallons to 38, million gallons in White wines in accounted for Commercial Service trade specialist in the U.

Market Entry Strategies

A monopoly occurs when one company is the main provider of a product or service in a market. In the top markets for Argentine wine were Paraguay, the U. Photo Edison light globes: In other cases, key officials and decision makers will demand some form of payment to allow a transaction to proceed.

Chile is the 9th largest producer of wine in the world Table 1 with output of million gallons in and million gallons When entering a market dominated by a monopoly, companies must understand that they have a high chance of failing and be prepared to lose substantial amounts in sunk costs.

This elevated the brand image of his wines as being higher quality due to the associations with French wines and the region where his wines were produced, Napa Valley.

Given the fact that market is full of cheap products, local wineries can offer a unique alternative with their products. France was also in this situation since both countries tend to use older methods of production that have become a part of their "wine culture" instead of constantly innovating.

Franchising Franchising is a typical North American process for rapid market expansion but it is gaining traction in other parts of the world. Letters of credit might be unreliable or difficult to obtain.

Both countries have a long history of wine production and consumption, yet despite this the consumption rate in France is relatively stagnant while Italy is showing a decrease. No one market entry strategy works for all international markets. They adopted early on the strategy of having their sales force "push" for very visible places in liquor stores and grocery stores to help drive sales.

Top three potential barriers to foreign market entry

Terroir is a determining factor in the quality of the wine. That paradigm has changed in the last few decades as a few of the more established wine drinking countries have seen their per capita consumption stagnate or decline Table 3.

So many winemakers have started to complement and specified the detailed list of the ingredients used in the production of wine, on their bottles.

The second appellation control system was developed in recent years to help raise the quality of the wines produced. Most of those wineries have very low volume production capabilities, so a small number of large volume producers dominate the market.

There can be several disadvantages to this system as well, such as no control over the channel used, marketing plans implemented by the agent could be different then the wine producer wants, and the producer has no access to data about the markets and consumers that purchase the product.

Corrupt practices can be used to induce a government to adopt measures that are favourable to an industry or to influence government purchasing decisions. The competitive environment that small wineries are subject to is harsh. Strategies implemented by wineries to try to establish a competitive advantage can include targeting varietal segments, strategic supplier and distribution partnerships, and differentiation based on image and price.

The production of wine in Argentina has increased over the years Table 1but the wine produced tends to be for local consumption, not for export, due to low quality and government regulations. Table 7 shows how the customer preferences for the colors, or varietals, of wine in the years of to have shifted from white wines to red.

The international image of the U. Opportunities for sparkling wine in emerging markets was to flood the market with marketing, invest in distribution and then fight for dominance. However, in many emerging markets, this approach is so resource intensive and risky as to per capita consumption of wine in the USA remains low by international standards.

However, in the aim to sell wine products in the Chinese market, consumer education s and Summergate Fine Wines, all founded in the s and currently marketing themselves as both purveyors of fine wine and educators.

This informational aspect of distribution is necessary, given the relative immaturity of the Chinese wine market. There are a variety of ways in which a company can enter a foreign market. No one market entry strategy works for all international markets. Direct exporting may be the most appropriate strategy in one market while in another you may need to set up a joint venture and in.

1 The Wine Market in Japan: Market competition among exporting countries and the strategy of US wine Katsumi Arahata Abstract The purpose of this paper is to examine the structure of wine.

Market research on the wine industry. Standardised and cross-comparable statistics including total market sizes, market share and brand share data, distribution and industry trends. The article gives an introduction to the wine market in China and outlines its development. It goes on to identify the key issues which need to be addressed in order to enter the market successfully.

These revolve, tactically, around effective mangement of the 4 P's, with distribution and promotion being the most problematic.

International makreting entering the wine market
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Top three potential barriers to foreign market entry - Trade Ready