The Price Point Of Wine

2205 Words Oct 11th, 2014 9 Pages
Executive Summary

The report will analyse and expose the various factors that contribute to determine the price point of wine factors including the labour cost to grow grapes and produce wine, the size and reputation of the vineyard and the exclusivity and scarcity of the wine. Studies have shown that the global wine market is divided into four quality segments or categories known as basic premium, popular premium, super premium and ultra premium. Input costs for single vineyards have been divided into five categories known as direct, labour, mechanisation, and maintenance and general costs. Hedonic pricing and statistical analysis review qualities of wine that induce to price differentiation Studies have shown that different regions generate an implicit price for attributes of certain grapes grown which affects the final price.

1. Introduction

The price point of wine is determined by several factors including the labour cost to grow grapes and produce wine, the size and reputation of the vineyard and the exclusivity and scarcity of the wine. Another important factor affecting the price of wine is the consumer perception about the quality of the wine which is highly related to hedonic pricing analysis (Roger, 2014). This factor takes into account the perception of the costumer on wine variables such as vintage, scores and variety as well as label design attributes such as vineyard, estate and reserve.

The purpose of this text is to analyse and expose the various…

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