Wine War Case Study
Brief analysis of the evolution of the role of distribution in the global wine industry.
In Old world wine industry, old world producers gave their wine to distributors, such as wholesaler, merchant, and auction, to sell the wine, they didn’t have contact with clients directly, therefore, didn’t have much information about the market and not mention to have clear idea about the change of the market and preference of the clients, hence, they isolated from fast-changing consumer tastes and market trends, especially when they were in distant export markets, also they don’t have understanding of the rapidly concentrating retail channels. French wine industry is like this. In this case, though their products are with high quality and with certificate, their market share went down because they couldn’t meet consumers’ requirements.
Unlike old world, new world wine companies controlled their distribution chain from the vineyard to the retailer, they have their vendor to produce wine, then they decided how to pack it, for example, they created “wine-in-a-box” packing so that the products can be transfer and deliver more easily, with lower cost of transportation, and also people can storage wine much more easier than storage bottle wine. In addition, as the companies’ name will be on the top of the products, they pay attention on the quality of wine too. With full control of every step from wine produce to products sell, they were able to sense changes in consumer preferences and respond to shifts in distribution channels, and also able to capture even more economic advantage and reducing handling stages, holding less inventory, and capturing the intermediaries’ markup. Therefore, they can adjust their strategy quickly to respond the change of the market, such as to change price of their products and change packing to meet customer’s need, therefore, they can catch customers much rapidly them old world wine makers and distributors.
To sum up, as the different roles of
In Old world wine industry, old world producers gave their wine to distributors, such as wholesaler, merchant, and auction, to sell the wine, they didn’t have contact with clients directly, therefore, didn’t have much information about the market and not mention to have clear idea about the change of the market and preference of the clients, hence, they isolated from fast-changing consumer tastes and market trends, especially when they were in distant export markets, also they don’t have understanding of the rapidly concentrating retail channels. French wine industry is like this. In this case, though their products are with high quality and with certificate, their market share went down because they couldn’t meet consumers’ requirements.
Unlike old world, new world wine companies controlled their distribution chain from the vineyard to the retailer, they have their vendor to produce wine, then they decided how to pack it, for example, they created “wine-in-a-box” packing so that the products can be transfer and deliver more easily, with lower cost of transportation, and also people can storage wine much more easier than storage bottle wine. In addition, as the companies’ name will be on the top of the products, they pay attention on the quality of wine too. With full control of every step from wine produce to products sell, they were able to sense changes in consumer preferences and respond to shifts in distribution channels, and also able to capture even more economic advantage and reducing handling stages, holding less inventory, and capturing the intermediaries’ markup. Therefore, they can adjust their strategy quickly to respond the change of the market, such as to change price of their products and change packing to meet customer’s need, therefore, they can catch customers much rapidly them old world wine makers and distributors.
To sum up, as the different roles of