The Components Of Wine Prices

The winery industry can be categorized into red and white wine segments. The red wine segment, measured by tonnage of varietals crushed, has grown at a compounded annual rate of 4.7% for 10 years from 1989 to 1998, and a year over year growth rate of 8.2% from 1998 to 1999. Judging by the strong growth rate experienced in the red wine segment, it is reasonable to conclude that the red wine segment is in the growth phase of the life cycle model. In addition, production of red wine varietals which are relatively unknown such as syrah and sangiovese nearly doubled in a year from 1998 to 1999. The white wine segment, however, is at the mature phase of its life cycle as the segment shrunk slightly by 0.42% from 1998 to 1999. Overall, the industry is still at the growth stage lead by growth in the red wine segment.

The structure of the wine industry is quite different around the world. The barrier to entry is relatively higher in the New World than in the Old World. Referring to the market data on the level of concentration in 1998, people can see a few players dominate the markets in Australia and the U.S. while the level of concentration is quite low in Europe. Therefore, the rivalry in Old World is intense there.

The dynamics of the global wine industry are better understood through a brief history of wine as well as an overview of the wine making process. Some countries have longer historical and cultural ties with wine then others and that can affect the quality and perception of the product in the eyes of the consumer. Also, the conditions in which the wine grapes are raised and the processes used to make the wine can create a superior wine and therefore a competitive advantage.

When you are out shopping for a wine, you will see wines priced from a few dollars to thousands of dollars. The often asked question is, "can you taste the difference or are they really worth the added costs." Some people have a dollar limit on what they will spend for a wine where others will pay top dollar. The most important detail is to evaluate the wine based on one's own palate. The proper technique for evaluating a wine is as follows:

Customer’s perception about the particular product is defined as a brand image. In recent days, building a strong brand has been proved to bring financial rewards to organization and becomes a top priority. It is regarded as hard core of any products and services, from small fruit juice shop to multinational organizations. The food manufacturing companies

Wine consumers hardly think about price when it comes to buying. For the lower grad cheaper wines, the power of the buyer is greater; but when in comes to premium brands of wine, the power of the buyer is low.

The price of wine would fall. This is due to the demand of wine would fall and the suppliers will reduce the price to market the consumer to buy more wine.

The pricing for the products themselves are harder to approximate. There are many factors that go into deciding the price for a certain type of wine, with a certain name, from a certain company, containing a certain type of grape, that was processed a certain way. Many wine companies throughout the US have a high end wine and a low end wine. This allows the company to enter the market at all angels. Especially with the down turn of the economy, many companies have had to

The climate in Coonawarra is perfect for wine cultivation for it has bountiful rain and extensive clouds, which maintains the climate at a range of 66 degrees Fahrenheit. The price would be determined on the quality of the grapes and how it will be distributed. Sydney Cove wines will market very high and are targeting middle to upper class clientele. The promotion will be to build and encapsulate the history of Australian wine. The distribution and supply chain risk are very minor. Australia exports products to South Asia and India and built a market share of 16%. This could be the starting customer for Sydney Cove Winery (Countries and Their Culture, 2011). Australia and New Zealand consumes 500 million liters of wine providing large revenue distributed into the economy making wine extremely high demand (Countries and Their Culture, 2011).

A brand is an organisation, product or service which has created an emotional connection with their consumers in order for them to favour their brand over their competitors. It is incredibly important for brands to keep up their image and one little thing could change the global perception of a business. It takes a lot to maintain a brand image that has been built up over a long period of time and even more to regain it if that reputation is lost. Brands are created through various different aspects such as their visuals, tone of voice, advertising, actions and reputation. The combination of these will leave their consumers with long lasting emotions and perceptions of a particular brand and will effect whether they support a business or not and whether they would favour or avoid it. When a brand looses their image it can cost a lot of money and time to rebrand to prevent complete failure of the product or service.

The following analysis will use Porter's 5 Forces Model to identify the market power. The grape growers are the suppliers, the winemakers are the sellers and the consumer is the buyer. This discussion could also include the suppliers of raw materials for bottling the wine, the shipping companies used to carry the wine to the point of sale and also the supermarket, liquor store and restaurant owners where wine is often purchased by the consumer.

Since RMC has established its brand image as the top quality premium wines through years of wine development and partnerships with top world brands like Marchesi de’ Frescobaldi, the Chadwick, and Opus One, it is more attractive for RMC to pursue higher income market segment. The high earnings associated with greater wine consumption. This market segment is less sensitive to price changes, high-end wines demands usually exceed supply which creates an opportunity for this segment, and retailers have lass of bargaining power since producers can sell high-quality wines through restaurants, hotels, and wine shops.

In the most recent years, domestic sales of wine has declined constantly. The wine consumption is becoming more occasional. This is partially due to an aggressive anti-alcohol campaign and driving restrictions set by the local government, but also facilitated by a lack of marketing strategy: the wine market is loosing touch with the youth (the average age of wine drinker is gone up from 35 to 55) and young people are getting more keen to beer or alcohol pops.

Nowadays, in the “Old World” countries of Europe, where the bulk of the volume is still produced, this is of great concern. However, consumers, especially younger drinkers, prefer the high quality wine from famous brands which are imported into Europe by the “New World” player, and the growth rate is at average10% per

This paper will outline an executive summary of a marketing strategy of a new wine brand to a targeted audience that will incorporate the buyers motivation, psychographics, and demographics. A description of the overall marketing strategy will include advertising, customer relationship manager and a Public Relations campaign. Finally, a an overall strategy to position the brand against the competition will be outlined.