Final Paper for the Degree (Lato Sensu) Graduate MBA Course in International Trade

– T18

Internationalization of the Brazilian wine

A Study on the insertion of Brazilian wines in the German market

Juliana Clemente Troula

Coordination :Prof. Dr. Celso Cláudio de Hildebrand e Grisi

Prof. Dr. Fábio Lotti OlivaAdvisor :

Prof. Dr. Fábio Lotti Oliva

São Paulo – 04 / 2009

Acknowledgements:

To Pro fessor Mar ia Sy lv ia Macch ione Saes , sen io r l ec tu rer o f t he

Un ive rs i t y o f São Pau lo , fo r he r se l f less suppor t and gu idance in

the in i t i a l se lec t ion o f t he theore t ica l bas is and l i ne o f research fo r

th i s paper .

To Che f Pe te r Rock , i n Nuremberg - Germany , f o r g i v ing up h is

t ime to answer a ques t ionna i re and p rov ide h igh ly re levan t

in fo rmat ion , bo th genera l , i n regard to the g loba l marke t , and

spec i f i c i n regard to the German w inegrow ing indus t ry .

Resumo

Esse es tudo ana l i sa o po tenc ia l de mercado na A lemanha e

aborda , super f i c ia lmen te , uma es t ra tég ia de pos ic ionamento de

market ing in te rnac iona l pa ra a lguns v inhos b ras i le i ros . A lém

d isso , busca-se exp lo ra r : a evo lução ao longo dos anos , a

iden t i f i cação de f raquezas e a propos ição de me lhor ias para a

indús t r ia v i t i v in íco la do Bras i l que , bem como ou t ros s i s temas

agro indus t r ia is nac iona is , en f ren ta d i f i cu ldades de coordenação

p rodu t i va , manutenção de qua l idade e pos ic ionamento

mercado lóg ico para a t ing i r um n íve l sa t is fa tór io de

compet i t i v idade , no con tex to in te rnac iona l .

Com o uso de en t rev is tas , par t i c ipação em expos ições , v i s i t as a

es tabe lec imentos , pesqu isas em s i tes e le i tu ra de l i v ros ou a r t i gos

pub l icados sobre o assunto , fo i rea l i zado um pro je to que

apresen ta t rês g randes ve r ten tes . Uma de las se r ia a aná l i se da

compet i t i v idade do p rodu to b ras i l e i ro , tan to no âmb i to indus t r ia l ,

como mercado lóg ico . Em um segundo momento , de l ineou-se o

potenc ia l de consumo para o p roduto , no mercado a lemão a t re lado

a uma nova es t ra tég ia de pos ic ionamento de market ing .

F ina lmente , como busca de benchmark pa ra a indús t r ia v i t i v in íco la

nac iona l , fo i fe i t o um es tudo de caso sobre o h is tó r i co da evo lução

da indús t r ia v i t i v in íco la a lemã e os inc rementos no seu n íve l de

qua l idade conqu is tados ao longo dos anos .

Como resu l tado da pesqu isa , podemos iden t i f i ca r um n icho de

mercado in te rnac iona l pa ra a lguns v inhos espec í f i cos bras i le i ros

bem como, de l inear super f i c ia lmen te uma es t ra tég ia de

pos ic ionamento de market ing . A lém d isso, a t ravés desse es tudo,

também podemos observar as me lhores p rá t i cas de coordenação

indus t r ia l na A lemanha que podem ser absorv idas , não somente

pe la indús t r ia v i t i v in íco la , mas , também, por ou t ros s is temas

p rodu t i vos agroa l imen ta res b ras i l e i ros .

1

Como conc lusão desse es tudo, pe rcebemos que se tem mui to a

exp lo rar no que d iz respe i to à o rgan ização produ t i va da indús t r ia

v i t i v in íco la nac iona l pa ra inc rementa r a p rodut iv idade e mante r a

qua l idade de seus p rodu tos . Com a sus ten tação do n íve l de

qua l idade e compet i t i v idade de cus tos , encon t ra r -se -ão d ive rsos

n ichos de mercados in te rnac iona is pa ra os v inhos b ras i l e i ros

como, por exemp lo , o espumante e o orgân ico .

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Abstract :

Th is s tudy ana lyzes the marke t po ten t ia l i n Germany and i t

approaches super f i c ia l l y an in te rna t iona l market ing pos i t ion ing

s t ra tegy fo r some Braz i l i an w ines . Even more than tha t , the p ro jec t

exp lo res : the evo lu t ion a long the years , t he ident i f i ca t ion o f

weaknesses and the p ropos i t ion o f improvements fo r B raz i l ’ s

w inegrow ing indus t ry tha t faces , as we l l as o ther na t iona l ag ro -

indus t r ia l sys tems, d i f f i cu l t ies in p roduc t ive coord ina t ion , qua l i t y

ma in tenance and market ing pos i t ion ing to ach ieve a sa t i s fac to ry

compet i t i veness leve l in the in te rna t iona l contex t .

Us ing in te rv iews , exh ib i t par t i c ipa t ions , es tab l ishment v is i t s ,

webs i tes researches and read ing books o r a r t i c les pub l ished abou t

the sub jec t , th i s p ro jec t was deve loped and i t p resents th ree g reat

b ranches . One o f them wou ld be the ana lys is o f t he Braz i l i an

p roduc t compet i t i veness , in the indus t r ia l sphere as we l l as in the

market ing a rea. In a second moment , the po ten t ia l p roduc t

consumpt ion was de l ineated in the German marke t l i nked to a new

market ing pos i t ion ing s t ra tegy .

F ina l l y , as a benchmark search fo r the domest i c w inegrowing

indus t ry , a case s tudy was deve loped abou t the h i s to ry o f the

German winegrow ing indus t ry evo lu t ion and the inc rements in i t s

qua l i t y l eve l t ha t were ach ieved a long the years .

As a resu l t o f t he research , we can iden t i f y an in te rnat iona l marke t

n iche fo r some spec i f i c B raz i l i an w ines as we l l as , we can ou t l ine ,

super f i c ia l l y , a marke t ing pos i t i on ing s t ra tegy . In add i t i on , th rough

th i s s tudy , we can a lso observe the bes t p rac t i ces o f i ndus t r ia l

coord ina t ion in Germany tha t can be absorbed, no t on ly fo r the

w inegrow ing indus t ry , bu t , a l so , fo r o the r Braz i l i an agr i - food

p roduc t ion sys tems.

In conc lus ion o f tha t s tudy , we not iced tha t there is a lo t to be

exp lo red in re la t ion to the na t iona l w inegrow ing indus t ry

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produc t ion o rgan iza t ion to inc rease the p roduc t i v i t y and ma in ta in

the qua l i t y o f the i r p roduc ts . P rov ided the qua l i t y l eve l and the

cos t compet i t i veness i s ma in ta ined , the re w i l l be severa l

in te rna t iona l marke t n i ches ava i lab le fo r t he Braz i l i an w ines l i ke ,

fo r example , the spark l i ng and the o rgan ic w ines .

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Resumo:

Es te es tud io ana l i za e l po tenc ia l de mercado en la A leman ia y se

acerca , super f i c ia lmen te , de una es t ra teg ia de pos ic ionamien to de

market ing in te rnac iona l pa ra a lgunos v inos b ras i l eños . Aún más

que ese , e l p royec to exp lo ra : l a evo luc ión a lo l a rgo de los años ,

la i den t i f i cac ión de las deb i l i dades y la p ropos ic ión de me jo r ías

para la i ndus t r ia de v in i f i cac ión de l B ras i l que enf ren ta , as í como

a o t ros s i s temas agro - indus t r ia les nac iona les , d i f i cu l tades en la

coord inac ión p roduc t iva , man ten im iento de la ca l i dad y

pos ic ionamien to en e l mercado para a lcanzar un n ive l sa t i s fac to r io

de compet i t i v idad , en e l con tex to in te rnac iona l .

Con o uso en t rev is tas , pa r t i c ipac ión en expos ic iones , v i s i tas a

es tab lec im ien tos , pesqu isas en s i t i os en la i n te rnet y l a lec tu ra de

l i b ros o a r t í cu los pub l i cados sobre e l t ema, fue desar ro l lado un

p royec to que p resen ta t res g randes ve r t i en tes . Una de e l las se r ía

e l aná l i s is de la compet i t i v idad de l p roduc to bras i leño , en e l g rado

indus t r ia l as í como en marke t ing . En un segundo momento , fue

de l ineado e l po tenc ia l de consumo de l p roduc to en e l mercado

a lemán en jaezado a una nueva es t ra teg ia de pos ic ionamien to de

market ing .

F ina lmente , como busca de benchmark para la i ndus t r ia de

v in i f i cac ión nac iona l , fue hecho un es tud io de caso sobre la

h is to r ia de la evo luc ión de la indus t r ia de v in i f i cac ión a lemana y

los inc rementos en su n ive l de ca l idad que fue ron a lcanzados a lo

la rgo de los años .

Como resu l tado de la pesqu isa , podemos iden t i f i ca r un segmento

de mercado in ternac iona l para a lgunos v inos espec í f i cos

b ras i l eños as í como, podemos de l inear super f i c ia lmen te una

es t ra teg ia de pos ic ionamiento de marke t ing . Además, con es te

es tud io , podemos también observar l as me jo res p rác t i cas de la

coord inac ión indus t r ia l en la A leman ia que se puede absorber , no

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só lo por l a i ndus t r ia de la v in i f i cac ión , pe ro , tamb ién , po r o t ros

s is temas produc t i vos agro -a l imen ta res bras i l eños .

En conc lus ión de ese es tud io , no tamos que se hay mucho a

exp lo rar re lac ionado a la organ izac ión p roduc t i va de la i ndus t r ia

de la v in i f i cac ión nac iona l pa ra inc rementar la p roduc t i v idad y

mantener l a ca l i dad de sus produc tos . Con e l sos ten im ien to de l

n ive l de ca l idad y de la compet i t i v idad de los cos tes , habrá

d ispon ib le va r ios segmentos de mercado in te rnac iona les para los

v inos b ras i l eños como, por e jemp lo , e l espumante y e l o rgán ico .

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Table of Contents:

1 INTRODUCTION

1.1 Problem Si tuat ion / Chal lenge: Di f f icu l t ies encountered by the Braz i l i an winegrowing industry and ident i f ica t ion of market oppor tuni t ies wi th in the in ternat iona l context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

1 .2 Object ives: Analysis o f the main causes of these d i f f icu l t ies , p roposal for improvement and s tudy o f a compet i t ive st ra tegy for some Braz i l i an wines in Germany. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

1 .3 Just i f ica t ion: Improvements both in the posi t ion ing wi th in the in ternat iona l market and in the organizat ion of the Braz i l ian agr ibus iness system are cruc ia l , so that the country can f ina l ly become the “wor ld ’s granary”……………………………………………………………..17

1 .4 Case study: Analys is of the winegrowing industry in Germany as a benchmark , s tudy o f the potent ia l consumpt ion of the German market fo r expor ts of some Braz i l ian wines and def in i t ion o f a market ing pos i t ion ing s t ra tegy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

2 REVIEW OF THE THEORY: COORDINATION OF PRODUCTION AND MARKETING.

2 .1 Features and t rends wi th in the g loba l agr i - food industry requ ir ing bet ter organizat ion of product ion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

2 .2 Evolu t ion of the Braz i l ian agr i - food industry and an ana lysis of i ts potent ia l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

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2 .3 Analysis of the product ion organizat ion of the Braz i l ian winegrowing industry , ident i fy ing the main causes of i ts d i f f icu l t ies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

2 .4 Review o f the main market ing concepts adopted to boost the compet i t ive s t rategy of some Braz i l i an w ines on the in ternat iona l market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

3 METHODOLOGY

3.1 Determining the type of research and i ts constra ints………………………………………………….. . . . . . . . 46

3 .2 Speci f ic object ives of the research. . . . . . . . . . . . . . . . . . . . . . . . . . .47

3 .3 Types and sources o f in format ion. . . . . . . . . . . . . . . . . . . . . . . . . . . . .49

3 .4 Def in ing the issues of the study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50

4 ANALYSIS OF THE RESULTS

4.1 Proposal for enhancing the product ion organizat ion of the Braz i l ian winegrowing industry . . . . . . . . . . . . . . . . . . . . . . . . . . .52

4 .2 Study of the potent ia l consumpt ion of the German market for several Braz i l ian wines . . . . . . . . . . . . . . . . . . . . . . . . . . . .55

4 .3 Def in ing a market ing s t rategy for Sal ton spark l ing and organic wines……………………….. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63

5 FINAL REMARKS…………..…………………………………………..69

6 BIBLIOGRAPHY…………………………………………………………71

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1 INTRODUCTION

1.1 Problem Si tuat ion / Chal lenge: Di f f icu l t ies encountered by the Braz i l i an winegrowing industry and ident i f icat ion o f market oppor tuni t ies wi th in the in ternat iona l context .

The Braz i l i an w inegrow ing indus t ry , l i ke many o ther ag r ibus iness

sys tems, i s fac ing d i f f i cu l t i es in o rgan iz ing i t s p roduc t ion ,

ma in ta in ing qua l i t y and in i t s pos i t i on ing on the in te rna t iona l

market .

Th is p roduc t ion sys tem in par t i cu la r i s a ve ry appropr ia te examp le

fo r exp la in ing why s t r i c t coord ina t ion i s fundamenta l fo r

t rans fo rming reg iona l p roducers in to h igh ly p roduc t ive ,

in te rna t iona l ly renowned supp l ie rs .

Un l i ke mos t consumer goods tha t f requent ly use on ly new

market ing techn iques to add va lue to the i r b rands , w ine , i n mos t

cases , has to s imu l taneous ly show h igher l eve ls o f qua l i t y i n how

i t i s p rocessed in o rder to ach ieve th i s same ob jec t i ve .

Braz i l i an w ine is unab le to a t ta in a h igh -p ro f i le i n te rna t iona l

pos i t i on , in sp i te o f B raz i l ’ s huge agr ibus iness po ten t ia l . O ther

South Amer ican coun t r ies such as Ch i le and Argent ina , w i th

sma l le r a reas o f a rab le land to be exp lo i ted and much less

economic c lou t than Braz i l have fo r many years success fu l l y

a t ta ined h igh -p ro f i le pos i t i ons on the in te rnat iona l marke t , w i th

compet i t i ve p r i ces .

The cu l tu re o f w ine p roduc t ion was in t roduced in Braz i l by the

Por tuguese and I ta l ians who chose the sou th o f the coun t ry to

se t t l e . I n i t i a l l y t hey were independen t p roducers w i th no s tandard

o f qua l i t y , coord ina t ion o r techno log ica l i nnova t ions .

Thus we can say tha t B raz i l i an w inemak ing is much more s im i la r to

tha t o f Europe , t ha t i s , i t i s based on smal l p roducer fami l ies , than

9

the la rge-sca le p roduc t ion sys tem preva len t i n the Un i ted S ta tes

and Aus t ra l i a . (ZYLBERSTAJN, 2002) .

By us ing severa l sources o f i n fo rmat ion , Sa to (2004 , p .1 ) de tec ts

tha t :

[ . . . ] A rou nd 95% o f B r az i l i an w i nes a r e p r odu ced i n R i o G r ande

do Su l , w i th 5% in San t a Ca t a r i na and Pa ran á , t aken tog e the r . I n R i o

Gr and e do S u l , re d w i ne p r edom i na te s , w i t h 77 . 4%, rosé w in e w i th 15 .3

% an d w h i t e w in e w i t h 7 .3% [ . . . ] .

Tab le 1 – Sa les o f w ines and der iva t i ves p roduced in RS, f rom

2003 to 2008 - t he domest i c and ex terna l markets - i n l i t e rs .

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Source : UVIBRA – Braz i l i an Winegrowers Un ion , 2009.

Accord ing to the TDA (2005) w ine consumpt ion in Braz i l i s

approx imate ly 1 ,65 l i te rs pe r cap i ta /annum. In Weste rn Europe

(France, I t a l y and Por tuga l ) consumpt ion averages 55 l i t e rs . I n

Argen t ina consumpt ion is 28 ,81 l i te rs pe r cap i ta and 15 ,5 l i t e rs in

Ch i le .

The exce l len t b rand o f the w ines p roduced in the Va le dos

V inhedos reg ion has been recogn ized wor ldw ide , thanks to the

impor tan t domest i c and in te rna t iona l awards rece ived , wh ich vouch

fo r t he p roduc t ion techn iques emp loyed. The c l imate and the

P r o d u c t s J a n t o D e c 2 0 0 3

J a n t o D e c 2 0 0 4

J a n t o D e c 2 0 0 5

J a n t o D e c2 0 0 6

J a n t o D e c2 0 0 7

J a n t o D e c2 0 0 8

% V a r i a n c e 0 8 / 0 7

% V a r i a n c e0 8 / 0 3

D o m e s t i c m a r k e tT a b l e w i n e 2 1 7 , 0 4 0 , 2 8 7 2 2 4 , 7 9 6 , 9 6 9 2 7 0 , 7 6 1 , 0 6 7 2 4 4 , 9 0 0 , 1 5 1 2 2 1 , 1 2 1 , 6 8 7 1 9 7 , 5 6 3 , 3 8 1 ( 1 0 . 6 5 ) ( 8 . 9 7 )S p e c i a l w i n e 2 0 5 , 2 6 9 6 6 , 9 8 9 2 8 5 , 9 8 7 1 7 2 , 1 7 4 1 0 6 , 3 3 3 6 5 ( 9 9 . 9 4 ) ( 9 9 . 9 7 )V i n i f e r a w i n e 2 3 , 2 7 1 , 4 9 6 1 9 , 7 4 7 , 3 4 1 2 1 , 9 1 3 , 8 1 7 2 2 , 4 7 6 , 2 6 3 2 0 , 9 5 5 , 7 1 1 1 7 , 0 1 4 , 9 2 1 ( 1 8 . 9 6 ) ( 2 6 . 8 9 )S u b - t o t a l 2 4 0 , 5 1 7 , 0 5 2 2 4 4 , 6 1 0 , 2 2 9 2 9 2 , 8 7 0 , 8 9 1 2 6 7 , 5 4 8 , 5 8 8 2 4 2 , 2 3 3 , 7 3 1 2 4 1 , 5 7 8 , 3 6 7 ( 1 1 . 4 1 ) ( 1 0 , 7 8 )V i n i f e r a R e d w i n e ( P E P )

- - - - 4 , 8 0 8 , 6 1 6 -

S u b - t o t a l 2 4 0 , 5 1 7 , 0 5 2 2 4 4 , 6 1 0 , 2 2 9 2 9 2 , 8 7 0 , 8 9 1 2 6 7 , 5 4 8 , 5 8 8 2 4 7 , 0 3 2 , 3 4 7 2 4 1 , 5 7 8 , 3 6 7 ( 1 1 . 4 1 ) ( 1 0 , 7 8 )V i n e g a r w i n e 6 , 9 8 7 , 2 0 2 7 , 8 6 1 , 2 7 8 7 , 4 1 9 , 7 3 6 7 , 6 7 7 , 9 0 6 7 , 1 8 8 , 1 3 5 7 , 2 4 3 , 8 1 9 0 . 7 7 3 . 6 7B r a n d y w i n e - 1 9 2 1 2 , 8 5 6 - 2 7 - -W i n e a l c o h o l - 1 5 0 8 2 , 1 0 5 1 0 0 1 0 0 - -G r a p p a 2 8 , 1 2 8 3 1 , 2 3 6 3 1 , 0 4 8 2 9 , 8 4 1 2 0 , 9 6 1 2 3 , 0 5 1 9 . 9 7 ( 1 8 , 0 5 )C h a m p e n o i s e 6 9 , 8 0 0C h a r m a t - 1 , 7 2 9 3 0 , 0 0 0 - - 5 6 - -M o s c a t e l S p a r k l i n g

- 1 7 , 7 2 7 - 6 8 1 2 , 5 6 8 - -

G r a p e d r i n k s 1 , 7 6 7 , 0 7 2 2 , 9 7 4 , 9 2 3 4 , 5 3 3 , 9 7 3 5 , 0 9 7 , 8 6 1 5 , 3 6 9 , 8 3 3 3 , 8 8 8 , 1 8 7 ( 2 7 . 5 9 ) 1 2 0 . 0 4D r i e d s e d i m e n t

- 7 , 0 0 0 4 - 2 4 , 5 4 3 1 8 , 6 4 0 ( 2 4 . 0 5 )

B r a n d y ( C o g n a c )

2 , 7 2 9 , 2 0 1 2 , 5 0 5 , 8 8 2 2 , 0 7 4 , 3 8 0 5 , 4 6 2 5 , 9 0 3 5 , 1 3 6 ( 1 2 , 9 9 ) ( 9 9 . 8 1 )

C o o l e r 7 , 3 4 6 , 6 0 3 6 , 6 6 7 , 6 1 3 5 , 9 8 5 , 4 1 9 5 , 0 6 0 , 9 8 4 5 , 0 0 2 , 6 6 6 4 , 3 3 8 , 6 2 8 ( 1 3 . 2 7 ) ( 4 0 . 9 4 )W i n e c o c k t a i l

1 , 0 0 2 , 1 4 9 1 , 4 2 9 , 4 9 2 1 , 8 2 6 , 5 2 4 9 3 2 , 9 7 9 7 9 8 , 6 2 4 7 9 1 , 5 3 2 ( 0 . 8 9 ) ( 2 1 , 0 2 )

W i n e d i s t i l l a t e

1 5 0 , 2 3 2 1 7 1 , 3 3 5 1 6 7 , 8 7 8 1 9 4 , 4 3 4 1 3 9 , 4 1 0 3 2 , 2 8 1 ( 7 6 . 8 4 ) ( 7 8 . 5 1 )

S p a r k l i n g C h a m p a g n e

4 , 2 0 4 , 2 1 3 4 , 8 0 5 , 6 8 1 5 , 6 8 2 , 5 2 6 6 , 3 4 4 , 9 6 9 6 , 9 8 4 , 4 3 6 7 , 5 6 8 , 3 3 6 8 . 3 6 8 0 , 0 2

M o s c a t e l S p a r k l i n g ( A s t i )

5 9 4 , 0 3 9 6 7 1 , 8 7 4 1 , 0 6 1 , 0 9 2 1 , 3 1 9 , 2 6 8 1 , 5 7 8 , 8 8 4 1 , 9 0 0 , 9 5 7 2 1 . 4 0 2 2 0 . 1 0

F i l t e r e d P r o d u c t s

7 , 8 9 8 , 4 0 1 8 , 4 7 3 , 2 0 7 7 , 9 8 7 , 2 5 9 7 , 8 1 6 , 9 7 5 7 , 5 8 3 , 6 7 4 7 , 5 4 9 , 3 8 2 ( 4 . 4 5 ) ( 4 . 4 2 )

S e m i -s p a r k l i n g w i n e

5 , 2 0 3 1 7 , 2 2 5 1 1 1 , 6 6 6 2 5 8 , 2 4 4 2 5 0 , 0 3 2 4 4 1 , 6 9 0 7 6 . 6 5 8 , 3 8 9 . 1 4

S t r o n g , c h e a p w i n e

5 2 , 9 8 7 3 1 , 1 2 3 2 3 , 5 3 3 4 6 , 9 2 6 1 9 , 9 2 6 1 0 , 7 9 6 ( 4 5 . 8 2 ) ( 7 9 . 6 3 )

F o r t i f i e d w i n e

1 0 , 4 3 5 3 , 7 4 1 5 , 0 0 9 4 , 5 0 0 3 , 4 3 0 3 , 3 3 6 ( 2 . 7 4 ) ( 6 8 . 0 3 )

G r a p e m o s t - 7 1 7 1 2 2 , 1 2 0 7 , 7 4 0 2 , 0 0 0 ( 1 0 0 . 0 0 )G r a p e n e c t a r 1 , 0 8 5 , 4 4 2 4 5 1 , 2 2 3 3 6 0 , 5 3 8 3 6 8 , 8 7 5 5 4 1 , 6 1 2 2 , 0 0 2 , 4 0 9 2 6 9 . 7 2 8 4 . 4 9O t h e r p r o d u c t s

- 1 , 3 2 2 1 , 2 8 0 , 6 0 2 5 , 7 3 6 5 2 8 , 5 8 6 7 4 3 , 3 6 7 4 0 . 6 3 -

G r a p e p u l p - 8 3 2 , 3 9 9 9 4 0 , 6 1 9 9 8 7 , 8 2 8 1 , 1 7 7 , 6 7 8 1 , 3 1 6 , 8 4 6 1 1 . 8 2 -J u i c e c o n c e n t r a t e

9 4 , 2 3 1 9 1 , 2 0 7 1 2 6 , 4 7 7 6 3 2 , 0 6 5 7 5 3 , 8 4 2 6 9 4 , 8 1 6 ( 7 . 8 3 ) 6 3 7 . 3 5

S a n g r i a 3 3 0 , 5 7 6 1 , 1 1 8 , 6 5 4 1 , 1 4 0 , 0 4 7 1 , 2 0 7 , 2 0 1 5 3 9 , 5 8 6 4 5 3 , 9 0 3 ( 1 5 . 8 8 ) 3 7 . 3 1G r a p e j u i c e 1 7 , 7 7 9 , 3 7 7 2 0 , 7 7 8 , 3 4 5 3 0 , 6 4 2 , 5 0 3 3 3 , 4 9 5 , 8 1 7 3 7 , 5 6 3 , 8 3 7 4 3 , 4 2 2 , 4 1 9 1 5 . 6 0 1 4 4 . 2 3W i n e v i n e g a r 1 , 6 8 5 , 3 2 9 1 , 9 4 0 , 7 9 2 1 , 8 8 7 , 8 3 9 2 , 2 1 9 , 2 5 0 2 , 8 3 5 , 1 6 7 3 , 4 8 3 , 5 9 9 2 2 . 8 7 1 0 6 . 7 0A c e t i f i e d w i n e

4 , 3 1 4 , 1 5 0 3 , 3 9 6 , 3 8 0 1 , 9 5 9 , 0 3 0 8 9 2 , 7 7 0 9 2 1 , 0 0 0 1 , 5 4 7 , 1 6 1 6 7 . 9 9 ( 6 4 . 1 4 )

C o m p o u n d w i n e

5 8 2 , 9 7 0 1 , 2 5 1 , 6 0 5 1 , 1 0 3 , 5 6 7 8 4 3 , 3 2 0 8 9 8 , 1 5 6 1 , 0 6 5 , 8 4 2 1 8 . 6 7 8 2 . 8 3

L i q u o r o u s w i n e

8 8 9 , 5 2 0 7 7 1 , 1 2 7 7 4 1 , 1 3 9 7 2 6 , 7 7 7 5 8 6 , 6 0 3 5 5 5 , 6 7 1 ( 5 . 2 7 ) ( 3 7 . 5 3 )

D o m e s t i c M a r k e t T o t a l

3 0 0 , 0 5 4 0 4 9 2 3 1 0 , 9 1 4 , 3 0 5 3 6 9 , 8 2 4 , 4 4 0 3 4 3 , 7 1 6 , 4 3 4 3 2 8 , 3 5 0 , 9 9 8 3 0 3 , 7 6 2 , 6 5 5 ( 7 . 4 9 ) 1 . 2 4

E x t e r n a l M a r k e tT a b l e w i n e 4 2 , 6 7 1 2 2 5 , 8 6 2 5 7 7 , 4 2 5 7 2 5 , 4 6 3 7 7 9 , 7 4 2 2 , 9 2 5 , 2 3 1 2 7 5 . 1 5 6 , 7 5 5 . 3 1S p e c i a l w i n e - - 7 1 - - - -V i n i f e r a w i n e 2 1 , 6 7 5 1 3 7 , 0 2 5 3 9 2 , 1 6 7 2 9 1 , 0 9 5 4 8 9 , 9 8 8 6 , 1 5 2 , 8 1 7 1 , 1 5 5 . 7 1 2 8 , 2 8 6 . 7 0S u b - t o t a l 6 4 , 3 4 6 3 6 2 , 8 8 7 9 6 9 , 5 9 9 1 , 0 1 6 , 5 9 9 1 , 2 6 9 , 7 3 0 9 , 0 7 8 , 0 4 8 6 1 4 . 9 6 1 4 , 0 0 8 . 1 8

11

f i neness o f the var ie t i es ensure a p roduc t o f exce l len t qua l i t y .

Thanks to the co l lec t i ve e f fo r t s o f APROVALE ( the Assoc ia t ion o f

F ine Wine Producers o f the Va le dos V inhedos Reg ion) , l oca l

p roducers success fu l l y reg is tered the Va le dos V inhedos b rand

obta in ing the ce r t i f i ca t ion o f o r ig in (SATO, 2004) .

Among the w inemakers opera t ing in the Va le do V inhedos reg ion ,

we can ident i f y those bes t known in Braz i l : M io lo , Sa l ton ,

Coopera t iva Auro ra , Casa Va lduga and severa l mu l t i na t iona l

b rands , such as Fores t ie r and Chandon do Bras i l . Sa l ton , f o r

examp le , appears as the la rges t w inemaker in Braz i l , w i th a 45%

share o f the Braz i l i an marke t .

Wine i s the t ype o f p roduc t whose wor ldwide consumpt ion w i l l tend

to inc rease s ince in sp i te o f the in te rnat iona l economic c r is i s in

2009 , one can observe tha t the fo recas ts fo r th is year a re tha t

consumers w i l l no t s ign i f i can t l y reduce the quant i t y consumed, bu t

ra ther w i l l buy cheaper brands . Moreover , as the fo l l ow ing char t

shows, the share o f B raz i l i an w ine on the in te rna t iona l marke t i s

s t i l l i nc ip ien t :

Box 1 – Forecas t reduc t ions in expor t s fo r 2009.

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Source : USDA - Un i ted S ta tes Depar tment o f Agr i cu l tu re , 2009 .

By observ ing the above in fo rmat ion we can say tha t the inves tment

in ident i f y ing an in te rna t iona l n i che fo r B raz i l i an w ine is qu i te an

in teres t ing one . One o f t he po ten t ia l marke ts to be s tud ied i s t he

European, because in sp i te o f i t s s t rong w inegrowing t rad i t ion , i t

i s l ess compet i t i ve than Braz i l in severa l aspec ts . Among the more

impor tan t aspec ts we can ment ion : the huge , s t i l l unexp lo i ted

fa rming a rea , g rea te r capac i ty fo r economies o f sca le and cheaper

labor .

The success fu l case o f Ca l i fo rn ia (USA) , Aus t ra l i a and Ch i le

ind ica te tha t reo rgan iza t ion i s as impor tan t as the exc lus ive ly

reg iona l charac te r is t i cs respons ib le fo r c rea t ing qua l i t y a t t r i bu tes

in the w ines . In the las t decade , bo th t rad i t i ona l p roducers and

new p layers in the marke t have inves ted heav i l y and emp loyed

h igh techno logy in the i r p roduc t ion sys tems.

However , i n sp i te o f the need to make some ad jus tments in ce r ta in

p re-es tab l ished qua l i t y a t t r i bu tes , we can iden t i f y , among o ther

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th ings , a huge oppor tun i ty i n the marke t fo r bo th Braz i l i an o rgan ic

and spark l ing w ines , p r imar i l y i n Europe .

Wi thout go ing in to dep th in spec i f i c mat te rs o f the sc ience o f

eno logy , we be l ieve tha t B raz i l i an w ine is fu l l y capab le o f

expand ing i t s i n te rnat iona l marke t share .

By means o f a s imp le compara t i ve ana lys i s o f genera l fa rming

cond i t i ons , we can see Braz i l ’ s pos i t i on as a producer o f o rgan ic

w ines when compared to o ther coun t r ies tha t a l so p roduce them.

Aus t ra l i a : i n sp i te o f t he h igh techno logy and be t te r o rgan ized

p roduc t ion in th i s coun t ry , B raz i l has cheaper labor and a la rger

unexp lo i ted a rab le a rea. In o ther words , the poss ib i l i t y ex is t s o f

much lower p roduc t ion cos ts .

Ch i le : no tw i ths tand ing i t s be t te r o rgan ized p roduc t ion and

ex t remely favorab le c l ima te , due to the spec i f i c fea tu res o f i t s

re l i e f , B raz i l can b r ing i t s economic migh t to bear in te rms o f

in tens ive inves tments and economies o f sca le so as to p roduce

w ine w i th a compet i t i ve p r i ce and qua l i t y .

South A f r ica : i n sp i te o f lower labor cos ts , t he coun t ry i s fac ing

se r ious prob lems regard ing ins t i t u t i ona l s tab i l i t y and the

expropr ia t ion o f l and tha t i n i t ia l l y be longed to wh i tes in favor o f

peop le o f A f r i can o r ig in who un fo r tunate ly do no t have a su f f i c ien t

leve l o f educat ion to produce qua l i t y w ine . In o ther words , B raz i l i s

more ins t i tu t i ona l l y s tab le and can fa l l back on i t s economic migh t

to i nves t .

Un i ted S ta tes (Ca l i f o rn ia ) : no tw i ths tand ing the h igh techno logy

and bet te r o rgan ized produc t ion , t he coun t ry d id no t s ign up to the

Kyo to Pro toco l , wh ich means tha t B raz i l en joys g rea te r c red ib i l i t y

in te rms o f i t s sus ta inab le brands . In add i t i on , B raz i l has a

cheaper work force and a g reater a rea o f unexp lo i ted a rab le land .

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1 .2 Object ives: Analys is o f the main causes of these d i f f icu l t ies , proposal for improvement and s tudy o f a compet i t ive s t rategy for some Braz i l i an wines in Germany

The p r imary ob jec t ive o f th i s s tudy i s to ident i f y oppor tun i t i es and

d raw up a compet i t i ve s t ra tegy , bo th in market ing and indus t r ia l

te rms fo r the Braz i l i an w ine on the in te rna t iona l market .

By ana lyz ing the German consumer marke t and de f in ing a

market ing s t ra tegy fo r severa l spec i f i c B raz i l ian w ines , we a re

endeavor ing to ca rve ou t an in te res t ing n i che in Europe .

In add i t i on , we a im a t p ropos ing improvements based on the

ana lyses o f t he p r inc ipa l causes o f the d i f f i cu l t i es fac ing the

Braz i l i an w inegrow ing indus t ry , and on a case s tudy about how

th i s ve ry same sys tem i s o rgan ized in Germany i t se l f .

Th is s tudy has no in ten t ion o f cover ing the spec i f i c qua l i t y c r i te r ia

o f eno logy , new methods o r the pecu l ia r i t i es o f B raz i l i an w ine

p roduc t ion , s ince i t i s l im i ted to cover ing mat te rs o f an

admin is t ra t i ve na tu re , such as the o rgan iza t ion o f p roduc t ion and

market ing pos i t ion ing .

That be ing the case , the s tudy p roposes a marke t ing pos i t i on ing in

the in terna t iona l marke t , as we l l as an improvement i n the

o rgan iza t ion o f p roduc t ion fo r g rea te r compet i t i veness in cos ts ,

w i thou t ana lyz ing , however , poss ib le spec i f i c l im i t i ng fac to rs

invo lv ing the a r t o f w inemak ing , such as so i l , v in tage , ag ing ,

bo t t l ing e tc . . .

Wi thout go ing in to dep th in spec i f i c mat te rs o f the sc ience o f

eno logy , we be l ieve tha t B raz i l i an w ine is fu l l y capab le o f

expand ing i t s i n te rnat iona l marke t share , i nc lud ing in the mos t

t rad i t iona l o f a l l marke ts : Europe .

In order to ach ieve th i s goa l the Braz i l i an w inegrowing indus t ry

mus t reso lve , in shor t , the fo l l ow ing prob lems: F i rs t l y , l im i ted

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produc t ion o f va r ie t ies tha t leads to d i f f i cu l t i es in te rms o f s tab i l i t y

and homogene i t y i n the supp ly o f qua l i t y g rapes . Second ly ,

pers i s ten t p rob lems invo lv ing hor izon ta l coord ina t ion and con t ro l

wh ich , g iven the h igh cos t o f superv i s ion , end up permi t t i ng the

oppor tun is t i c behav io r o f improper add i t i on o f p roduc ts to the

w ine . Th i rd ly , the law tha t does not fos te r improved qua l i t y .

Four th ly , h igh in te res t ra tes in Braz i l , wh ich end up demot iva t ing

p roducers f rom mak ing new inves tments ; and in f i f th p lace , h igh

p roduc t ion cos ts due to the sma l l - sca le p roduc t ion .

In regard to the in te rna t iona l oppor tun i t i es fo r B raz i l i an w ine , we

can iden t i f y , fo r examp le , t he fo l l ow ing s t ra tegy :

Placement o f spark l ing and o rgan ic w ines a t compet i t i ve

p r ices in severa l i n te rnat iona l marke ts as a hea l th ie r op t ion

us ing , however , a you th fu l , exo t ic , sus ta inab le and qua l i t y

commun ica t ion .

In i t i a l pene t ra t ion by d isp lay ing o rgan ic w ine in long- l i fe

ca r tons and p las t ic cups on s tands dur ing open-a i r pa r t i es .

Assoc ia t ing w ine w i th the typ ica l B raz i l i an cu is ine adver t i sed

in on - the -sp i t barbecue res tauran ts , wh ich a re a l ready

es tab l i shed wor ldw ide .

Adver t i s ing , a l so , o f t he Sa l ton Mosca te l spark l i ng w ine on

the German market , no t so much fo r t he consumer o f the

Sekt , bu t a l so fo r t he more t rad i t i ona l consumers o f beers ,

because o f i t s exce l len t swee t tas te .

A l though in smal l quan t i t i es , Ch i lean w ine i s a l ready expor ted in

long- l i fe ca r tons and the consumpt ion o f w ine w i th th i s t ype o f

packag ing w i l l t end to inc rease, g iven the g loba l concern w i th

sa fe ty and env i ronmenta l conserva t ion (ANDERSON, 2004) .

Under the law o f Germany and severa l o ther coun t r ies , ca r ry ing

a lcoho l i c beverages in g lass bo t t l es i s p roh ib i t ed a t pa r t i es and

open-a i r concer ts , as we l l as a t exh ib i t i ons and in s tad iums.

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St i l l w i th regard to Ch i lean w ine , i t i s wor th po in t ing ou t t ha t , as i s

the case o f the German wine , “expor t - t ype” w ine succeeded in

p resen t ing a be t te r qua l i t y t han the o thers and i t s cer t i f i ca t ion i s

recogn ized by the EU.

Unfor tuna te ly , on some occas ions one canno t say the same abou t

Braz i l i an w ine , s ince to be compet i t i ve in te rms o f p r i ce on the

European marke t i t sac r i f i ces qua l i t y . Tha t i s , severa l B raz i l i an

w ines l i ke spark l ing Sa l ton Mosca te l , whose tas te and qua l i t y a re

recogn ized on the domest i c market , a re no t expor ted perhaps

because they a re not compet i t i ve l y p r iced . However , a l t hough no t

compet i t i ve in te rms o f p r i ce , expor ts o f spark l i ng Sa l ton Mosca te l

a re s t i l l v iab le .

1 .3 Just i f ica t ion: Improvements both in the pos i t ioning wi th in the in ternat iona l market and in the organizat ion o f the Braz i l ian agr ibus iness system are cruc ia l , so that the country can f ina l ly become the “wor ld ’s granary” .

As the ma jor j us t i f i ca t ion fo r th is s tudy we can say tha t no t on ly

the w inegrow ing indus t ry , bu t a l so a la rge g roup o f B raz i l i an

agr ibus iness expor t sys tems a re in u rgent need o f improvements in

te rms o f manu fac tu r ing coord ina t ion and in teg ra t ion , in o rder to

comply w i th in te rna t iona l qua l i t y s tandards .

For Braz i l to take i t s pos i t ion as the “g ranary to the wor ld " , one

mus t emphas ize tha t the coun t ry needs to show tha t i t i s capab le

o f ma in ta in ing qua l i t y , compet i t i ve p roduc t ion cos ts and a

market ing pos i t ion ing ta i l o red to i t s p roduc ts .

Wine is a der i va t i ve o f ag r ibus iness p roduc t ion sys tems. There fore

many concep ts used in th is s tudy may be used fo r o ther consumer

goods f rom the same or ig in , such as foods tu f f s and beverages tha t

a re seek ing to in te rna t iona l i ze .

C lear ly , a h igher consumpt ion o f B raz i l i an w ine in te rna t iona l l y w i l l

never be a d i rec t i nd ica to r tha t the coun t ry has e f fec t i ve ly

17

ach ieved the pos i t i on o f "g ranary to the wor ld ” . Never the less ,

B raz i l i an qua l i t y w ine can be an exce l len t showcase overseas fo r

o ther ag r ibus iness p roduc ts tha t compr ise the bas ic s t ruc tu re o f

nu t r i t ion , such as pas tas , canned vege tab les or meats , j u ices

e tc . . .

Fo r w ine to be in te rna t iona l ly recogn ized i t i s impor tan t tha t i t be

tes ted and approved in the mos t demand ing and s t r i c t consumer

market o f a l l , the European marke t .

Due to sa fe ty i ssues and env i ronmenta l p ro tec t ion , p roduc ts in

long- l i fe packag ing a re be ing inc reas ing ly used . In o ther words ,

idea l i z ing Braz i l ian o rgan ic w ine in th i s t ype o f packag ing i s i n l ine

w i th th is g loba l t rend , and may a lso be cons idered a domest ic

innovat ion .

As a marke t pos i t i on ing one can asser t tha t sus ta inab le foods tu f fs

w i th fewer chemica ls a re h igh ly va lued wor ldw ide . Spec i f i ca l l y on

the German market one sees s t r ingent res t r i c t i ons on impor ts o f

gene t i ca l l y mod i f ied p roduc ts o r those w i th any k ind o f chemica l

p reserva t i ve .

Accord ing to Aus t rade (2009) , approx imate ly 2% o f German w ine

p roduc t ion i s o rgan ic . Th is marke t n i che i s expec ted to g row in the

near fu tu re . Th is s ta tement i s under l i ned by the fac t t ha t the

Federa l Assoc ia t ion o f Eco log ica l Wines (Ecov in) wh ich s ta r ted

w i th 35 members back in 1995 , t oday has 195 members . I n

add i t i on , t he lead ing g loba l exh ib i t i on o f o rgan ic p roduc ts

(B io fach) takes p lace in Nuremberg , Germany .

I t i s wor th add ing tha t w ine i s a ve ry in te res t ing p roduc t f o r new

inves tment and fo r conquer ing in te rna t iona l markets l i ke Europe ,

because i t i s expec ted tha t i n sp i te o f the c r i s i s consumpt ion o f

w ine w i l l remain unchanged .

Fur the rmore , AC N ie lsen made some very in teres t ing su rveys

regard ing the t rend in h igher consumpt ion o f sus ta inab le p roduc ts

18

i n 2008 and in 2002 , whereby w ine wou ld be the type o f p roduc t

whose consumpt ion wou ld on ly tend to inc rease w i th t ime .

A l though d i rec t access to the resu l t s o f t he AC Nie lsen s tudy i s

no t ava i lab le , and the poss ib i l i t y tha t some repor t s ava i lab le to the

pub l ic a re more jou rna l i s t i c and in format i ve than sc ien t i f i c i n

na ture , never the less i t i s wor th show ing the f i gu re be low w i th two

pub l ica t ions by th i s i ns t i tu t i on , ou t o f cu r ios i t y .

In te rms o f compet i t i ve cos ts , B raz i l i s fu l l y capab le o f becoming a

supp l ie r o f beverages and food produc ts to Europe , g iven i t s

fa rming po ten t ia l and cheaper cu r rency .

F igure 1 : Charac te r is t i cs o f g rowth in the consumpt ion o f f ood and

p roduc ts and beverages wor ldwide .

Source : ACNie lsen UK - Trends & Ins igh ts - 2008 and ACNie lsen BR - Re la tó r io Execut ivo de No t íc ias ( Execut ive News Repor t ) - 2002 .

19

(Tex t in Por tuguese w i th in the above f i gu re)

T h e W o r l d ’ s H o t t e s t P r o d u c t sI n f o r m a t i o n a b o u t G r o w t h i n F o o d a n d B e v e r a g e sI n f o r m a t i o n a b o u t t h e F a s t e s t - G r o w i n g C a t e g o r i e sA l c o h o l i c M i x t u r e s L e a d t h e G r o w t h R a t e( A l c o h o l i c B e v e r a g e / W i n e - B a s e d M i x t u r e s a n d “ M a l t e r n a t i v e s ” )T h e A l c o h o l i c M i x t u r e c a t e g o r y s h o w e d t h e s h a r p e s t g r o w t h o v e r t h e t h r e e - y e a r p e r i o d . I n 2 0 0 0 t h e c a t e g o r y g r e w b y 6 5 % , f o l l o w e d b y g r o w t h o f 3 3 % i n 2 0 0 1 . H i t h e r t o b a s i c a l l y c o m p r i s i n g w i n e c o o l e r s , t h i s c a t e g o r y h a s b e e n b o o s t e d b y t h e l a u n c h i n g o f n e w p r o d u c t s , i n c l u d i n g s e v e r a l a l t e r n a t i v e s b a s e d o n v o d k a a n d r u m , a s w e l l a s t h e “ m a l t e r n a t i v e s ” ( a l t e r n a t i v e b e v e r a g e s t o b e e r p r e p a r e d f r o m m a l t ) , p a r t i c u l a r l y i n t h e U S A .

C a t e g o r y d a t a w e r e a v a i l a b l e i n 1 6 o f t h e 4 7 m a r k e t s , s h o w i n g s i g n i f i c a n t g r o w t h i n 1 3 o f t h e s e d u r i n g 2 0 0 1 .

R e f r i g e r a t e d r e a d y - a n d s e m i - r e a d y - t o - e a t m e a l s l e a d t h e f o o d p r o d u c t c a t e g o r yE x e c u t i v e N e w s R e p o r t , A C N i e l s e n G l o b a l S e r v i c e s . M a y 2 0 0 2

In regard to qua l i t y , Zy lbe rsz ta jn (2002) s ta tes tha t i n the case o f

B raz i l i an w inemakers , spec i f i c i nves tments in th i s f ie ld have

d i f fe ren t amounts , depend ing on the segment . For example ,

inves tments in qua l i t y wou ld have lower va lue in the a l te rna t i ve

d is t r ibu t ion , wh ich in th i s case wou ld be the produc t ion o f non-

b randed w ine in l a rge quan t i t i es , o r t he supp ly o f g rapes d i rec t l y

to the ju ice indus t ry , ra the r than se l l i ng them to w inemakers .

Based on the in fo rmat ion in the p rev ious paragraph , we can

conc lude tha t the re a re no incen t i ves fo r i nc reas ing the

compet i t i ve s tand o f po tent ia l new p layers on the Braz i l i an marke t .

Th is fac t leads us to conc lude tha t w inemakers cu r ren t l y opera t ing

on the market a re in a comfor t zone and a re no t mak ing add i t iona l

inves tments in improv ing qua l i t y .

A t t he same t ime we can observe tha t i n the w inegrow ing indus t ry

inves tment i n equ ipment and brand deve lopment , spec i f i ca l l y

re la ted to es tab l ish ing long- te rm supp ly con t rac ts w i th

supermarke ts , i s fundamenta l f u l f i l l the end consumer needs ,

wh ich a re absorbed and conveyed a t the po in ts o f sa le .

The cho ice o f the case s tudy o f t he German w inegrowing indus t ry

can be jus t i f i ed by the fac t tha t th is p roduc t ion sys tem is

recogn ized g loba l l y fo r i t s coord ina t ion and h igh leve l o f qua l i t y

cont ro l . Fur the rmore , in the pas t t h i s coun t ry was fo rced to and

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managed to ach ieve exce l len t resu l t s i n o rder to bu i ld an indus t ry

s t rong enough to p ro tec t i t se l f aga ins t the wor ld ’ s mos t p res t ig ious

w inemaker : F rance.

1 .4 Case s tudy: Analys is of the winegrowing industry in Germany as a benchmark , s tudy of the potent ia l consumpt ion of the German market fo r expor ts of some Braz i l ian w ines and def in i t ion o f a market ing posi t ion ing s t ra tegy

The German p roduc t ion sys tem i s an exce l len t mode l f o r

unders tand ing how an in i t i a l l y reg iona l and low-y ie ld indus t ry

modern ized i t se l f and go t i t s ac t together to become an example o f

qua l i t y and organ iza t ion .

Through the V ineyard Reorgan iza t ion and Reeng ineer ing P lan and

the 1971 law, we can see how Germany read ied i t se l f to i nc rease

i t s expor t s w i th in the European Un ion i t se l f . Based on the

unders tand ing o f t h i s concep t we can use i t as a benchmark fo r

o rgan iz ing p roduc t ion w i th in the Braz i l i an indus t ry .

A t t he same t ime , measur ing and iden t i f y ing the cu r rent p layers in

the German market w i l l enab le us to d raw up a compet i t i ve

s t ra tegy fo r t he Braz i l ian w ine . Las t ly , coming up w i th a market ing

pos i t i on ing p lan w i l l enab le the Braz i l ian w ine to appear as an

innovat ion in th i s marke t .

Accord ing to Aus t rade (2009) , in sp i te o f hav ing s l i gh t ly dec l ined

in 2008 , Germany is s t i l l t he wor ld ’s l a rges t w ine impor t ing marke t

in te rms o f vo lume. In g loba l te rms, by va lue , the German marke t

g rew by 4 .1% in 2008 . F rom May 2007 to Apr i l o f 2008 , impor ts

were 2 .03 b i l l i on Euros .

I ta l y , F rance and Spa in a re the wor ld ’ s l a rges t p roducers . In

add i t i on , t hese th ree count r ies a re a l so the la rges t supp l ie rs o f

w ines to Germany , accoun t ing fo r a market share o f approx imate ly

21

80% o f impor ts . Mos t o f the impor ted w ine - 68% - i s red ,

compared w i th 25% wh i te and 7% rosé .

In the case o f German impor t s o f w ine f rom the New Wor ld , Sou th

A f r i ca w ine i s cu r rent ly a marke t l eader , w i th 65 mi l l ion Euros ,

fo l lowed by Ch i le , the USA and Aus t ra l i a .

Tab le 2 : Wine produc t ion by coun t ry .

Source : Uni ted S ta tes Depar tment o f T reasury A lcoho l and Tobacco Tax and T rade Bureau - 2005.

22

Tab le 3 : V ineyard a rea by coun t ry .

Source : Uni ted S ta tes Depar tment o f T reasury A lcoho l and Tobacco Tax and T rade Bureau - 2005.

Germany is cur ren t l y among the wor ld ’s la rges t consumers o f w ine .

Accord ing to the DWI – the German Wine Ins t i tu te (2009) , the per -

cap i ta w ine consumpt ion in 2005 was 24 .51 l i te rs . The da ta shows

tha t consumpt ion rose by 2 .6 l i te rs per person over the las t t en

years . Another impor tan t po in t : a lbe i t t he nega t i ve economica l

scenar io , w ine rema ins an impor tan t e lement i n the gas t ronomy

sec to r .

Spark l i ng w ine is a pre ference among Germans . I t accounts fo r a

quar te r o f the consumer marke t . Accord ing to Verband Deu tscher

Sek tke l le re ien e .V (2009) the marke t f o r spark l ing w ines i s s t i l l

g row ing .

23

German consumers a re more pr i ce -sens i t i ve than mos t

conno isseurs o f w ine . In 2008 , the average supermarke t p r ice fo r a

750 ml bo t t le ( inc lud ing d iscoun ts ) was 1 .78 Euros . On average ,

the p r i ce o f German wine o f 1 .91 Euros i s s l i gh t ly h igher than the

average p r ice o f impor ted w ine , wh ich is 1 .70 Euros a bo t t le .

The data a lso shows tha t sa les o f l ow-p r i ced produc ts in

supermarke ts such as A ld i , P lus and Norma accoun t fo r 57% o f the

to ta l w ine marke t , o r 6 .4 m i l l i on l i te rs . Marke t research ca r r ied ou t

by AC N ie lsen (2006) showed tha t A ld i a lone accoun ts fo r 26 .5%

o f sa les , thanks to the low p r ices o f fe red .

Ever s ince Roman t imes , w ine has been cu l t i va ted and loved in

Germany . In the Neckar , Rhe in , Mose l , and Saar reg ions and in

the va l leys o f the Ruwer , v ineyards a re in t ima te ly l i nked to

re l i g ious h is to ry fo l low ing the r i se o f the Chr i s t i an church .

Char lemagne suppor ted g row ing p ro jec ts and incen t i ves fo r

monas t i c o rders tha t cu l t i va ted w ine fo r use on a day- to -day bas is

and a t ce remon ies . As these orders emphas ized o ther ac t i v i t i es

such as devo t ion and persona l se rv i ces , the v ineyards began

showing low y ie lds , a s i tua t ion tha t l as ted fo r cen tu r ies .

Some o f these monas t i c o rgan iza t ions a re s t i l l ac t i ve today ;

no tab ly Sch loss Johann isberg and Eberbach Abbey a re recogn ized

as t rad i t iona l cen te rs o f the w ine indus t ry i n Germany .

The two wor ld wars had a pro found impac t bo th on workers and

p roduc t ion , as we l l as on d is t r i bu t ion . The F i rs t Wor ld War , f o r

examp le , led to the po l i t i ca l occupat ion o f F rance on the

p roduc t i ve a rea o f Rhe ine , i n 1929 . A f te rwards , an unba lanced tax

sys tem favored French w ines .

Dur ing the Naz i per iod a l l w inemak ing o rgan iza t ions became par t

o f t he Winegrow ing Un ion , wh ich made in i t i a t i ves and e f fo r ts to

improve the sec to r d i f f i cu l t .

24

Af te r the end o f the Second Wor ld War , un l im i ted compet i t i on f rom

impor ted fo re ign w ines pu t enormous p ressure on producers . I n

response to th i s , coopera t i ve organ iza t ions reappeared and some

o f t hem took con t ro l i nc lud ing o f low-qua l i t y v ineyards .

In the i r e f fo r t to recover , t he coopera t i ves enhanced pes t cont ro l ,

c lone se lec t ion and pro tec t ion f rom f ros ts . Fur thermore , they

expanded the v ineyards , c reat ing in tens ive ly cu l t i va ted f ie lds .

In rep ly , a typ ica l v ineyard tha t i n 1900 p roduced 1 ton per ac re ,

s ta r ted p roduc ing approx imate ly 6 tons in 1980 .

In o rder to boos t expor t s , hundreds o f h i s to r i ca l des igna t ions were

abo l ished in accordance w i th the V ineyard Reorgan iza t ion and

Reeng ineer ing P lan known as the Flu rbere in igung .

In 1971 , the German Wine Law was once aga in re fo rmu la ted to

adap t t o the regu la t ions o f the European Un ion . I t was a t t h i s t ime

tha t w ines l i ke L ieb f raumi l ch became s tandard ized and made a

name for themselves a round the wor ld .

Cur ren t l y , i n the e f fo r t to p roduce hea l thy g rapes in an

env i ronment o f a c l ima te qu i te o f ten un favorab le and shor tage o f

land , Germany ’s w ine regu la t ions are among the mos t s t r ingent in

the wor ld . The labe ls on the bo t t les a re more de ta i l ed and spec i f i c

when compared to those o f o ther coun t r ies .

Un l i ke France , a la rge par t o f the German v ineyards a re no t

o f f i c ia l l y c lass i f i ed accord ing to the i r h is to r i ca l qua l i t ies . Thus

w ines a re examined and c lass i f ied on the i r own a t every harves t ,

by government -superv i sed labora to r ies . I n theory , w ines need to

be loya l to the i r he r i t ages and mon i to red f rom the v ineyard to the

end-consumer .

Among the cer t i f i ca t ions we can observe the Qua l i tä tswe in ,

equ iva len t t o France ’s Cont ro l led Des igna t ion o f Or ig in fo r

European Un ion s tandards . Th is t ype o f ce r t i f i ca t ion is used in

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wines tha t p rov ide 95% o f t he harves ts ; the re fore the des igna t ion

is no t as exc lus ive as i t appears to be . The w ines a re ana lyzed by

government -approved labora to r ies fo r t echn ica l f au l ts and reg iona l

exac tness . The number appear ing on the labe l i s t he con t ro l

number ind ica t ing the year in wh ich the w ine was inspec ted and

the number o f w ines author i zed annua l l y by i t s p roducer .

Sekt i s the German term fo r spark l i ng w ine . Mos t Sekt w ines

(abou t 95%) a re p roduced us ing the Charmat method . In add i t i on ,

90% o f Sekt w ines a re p roduced , a t leas t pa r t l y , f rom w ines

impor ted f rom I ta l y , Spa in and France . Sekt w ines labe led as

Deutscher Sek t a re made exc lus ive ly f rom German g rapes , wh i le

Sekt b .A . (Bes t immter Anbaugeb ie te , in para l le l w i th Qua l i tä tswe in

b .A . ) a re made on ly f rom g rapes coming f rom 13 qua l i t y w ine

reg ions o f Germany .

The award -w inn ing w ines a re genera l l y p roduced f rom Ries l ing ,

P ino t b lanc , P ino t g r i s and P ino t no i r g rapes , and mos t o f the

p roduc t ion is consumed loca l ly .

2 REVIEW OF THE THEORY: COORDINATION OF PRODUCTION AND MARKETING

2.1 Features and t rends wi th in the g loba l agr i - food industry requir ing bet ter organizat ion of product ion.

With the changes in consumer p re fe rences over recen t decades ,

the g loba l ag r i - food indus t ry has been inc reas ing ly domina ted by

la rge compan ies w i th con t ro l over the va r ious s tages o f f ood

p roduc t ion , i n o rder to ensure qua l i t y and e f f i c iency .

Th is phenomenon w i l l ach ieve even h igher leve ls i f consumers

demand spec i f i c f ea tures in p roduc ts and techno log ica l advances

tha t re f lec t a grea te r con t ro l over wha t the fa rms p roduce .

26

Accord ing to Mar t inez (1996) , ve r t i ca l coord ina t ion re fe rs to the

a l l oca t ion and management o f resources ac ross the success ive

s tages o f the food p roduc t ion cha in . Coord ina t ion methods inc lude

p roduc t ion fo r the open marke t , p roduc t ion under con t rac t and

ve r t i ca l i n teg ra t ion .

Produc t ion fo r t he open market : t he company purchases the

commod i ty f rom the p roducer a t t he marke t p r ice de te rmined a t the

t ime o f pu rchase . Farmers se l l i ng wheat to a buyer a t a f i xed p r i ce

and the supermarkets se l l i ng produc ts to the end consumer are

examp les o f t h i s t ype o f opera t ion .

Produc t ion under con t rac t : t he company agrees to buy the

commod i ty f rom the p roducer a t a prede te rmined p r ice p r io r to

p roduc t ion

Ver t i ca l in teg ra t ion : a s ing le company con t ro l s the f l ow o f t he

commod i ty ac ross two o r more s tages o f food p roduc t ion .

Wi th more women en te r ing the job market , consumers have begun

spend ing less t ime in the k i t chen , p re fe r r ing processed food . A t

the same t ime , the demand fo r qua l i t y food has a lso r i sen .

We can say tha t the h igher consumpt ion o f p rocessed foods i s

d i rec t l y l i nked to the enhancement o f ve r t i ca l coord ina t ion .

There are usua l l y t h ree t ypes o f p roduc t ion cont rac ts : spec i f i c

market con t rac ts , p roduc t ion management con t rac ts and resource

p rov ider cont rac ts .

In spec i f i c marke t cont rac ts , t he pr inc ipa l has l i t t le in f l uence over

p roduc t ion dec is ions . Th is t ype o f cont rac t reduces the uncer ta in ty

o f f ind ing a consumer marke t fo r t he food p roduced .

In order to manage p roduc t ion , on the o ther hand, the con t rac ts

inc lude the f i x ing o f p r i ces , qua l i t y and quan t i t y . I n th is manner

th i s o ther t ype o f con t rac t i n f l uences the p roduc t ion dec is ions .

Compared w i th spec i f i c marke t cont rac ts , p roduc t ion management

27

cont rac ts typ ica l l y t rans fe r o r a l l oca te more con t ro l and r isk to the

d i f fe ren t p roduc t ion phases .

Produc t ion management cont rac ts usua l l y a re used when dec is ions

regard ing the manu fac tu r ing p rocess o r sa les a f fec t t he a t t r i bu tes

o f t he p roduc t tha t a re cons idered va luab le to consumers . By

assuming cont ro l o f the agreed p r ice , the buyer takes on some o f

the r i sk tha t p rev ious ly l ay w i th the p roducer .

Resource p rov ide r cont rac ts , i n tu rn , a f fo rd g rea te r con t ro l o f

p roduc t ion . Here the buyer i s i nvo lved in many p roduc t ion

dec is ions .

Bes ides the t rend towards ver t i ca l coord ina t ion , compan ies a re

inves t ing in produc t ion to sca le , cap i ta l - i n tens ive manu fac tu r ing

and con t ro l o f p roducers ’ dec is ions . In o ther words , t he

concen t ra t ion is inc reas ing (MARTINEZ, 1996) .

2 .2 Evolu t ion of the Braz i l ian agr i - food industry and an ana lysis of i ts potent ia l

Braz i l i s one o f t he na t ions bes t p repared to meet the cu r ren t

g loba l shor tage o f f oods tu f f s .

Accord ing to USDA repor ts , w i th in the who le o f La t in Amer ica and

in some cases a t a g loba l l eve l , t he count ry i s a leader p roducer o f

the fo l l ow ing p roduc ts : bee f , sugarcane and soy bean , among

o thers .

Never the less , accord ing to Fava Neves (2008) , B raz i l i s in a

pos i t i on to cons iderab ly i nc rease i t s p roduc t ion dur ing the nex t

years , s ince i t uses on ly 60 mi l l i on o f the 400 mi l l ion hec ta res o f

a rab le land . I n add i t ion , the c l ima te is ex t reme ly favorab le and

wa ter i s p len t i fu l . Fo re igners a re a l so showing an in teres t i n

inves t ing in Braz i l . A round 4 mi l l ion hec ta res a l ready be long to

fo re ign g roups .

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Accord ing to the CONAB (2009) , in the las t ten years the p lan ted

a rea in Braz i l has r i sen by jus t under 35%. A t the same t ime ,

p roduc t i v i t y has r i sen f rom 2 ,180 k i l os per hec tare , in the

1997 /1998 harves t , to 3 ,026 ten years la ter . Th is f i gu re shows the

h igher user o f techno logy in c rops .

In sp i te o f a grea te r use o f t echno logy and p ro fess iona l l abor ,

B raz i l s t i l l has a long way to go in the contex t o f p roduc t ion

coord ina t ion , qua l i t y main tenance and pos i t i on ing on the

in terna t iona l marke t .

Braz i l i an companies have been la te in in te rna t iona l iz ing when

compared no t on ly to compan ies in deve loped count r ies , bu t a lso

to those o f o the r emerg ing count r ies , i nc lud ing those loca ted in

La t in Amer ica .

The g rea t ma jo r i t y o f B raz i l i an companies tha t have inves ted

d i rec t l y overseas d id so beg inn ing in 1990 . The p ioneers were

s ta te -owned companies , wh ich in the 1960s and 1970s a l ready had

in terna t iona l subs id ia r ies . Th is fac t exp la ins the reason fo r the low

p resence o f B raz i l i an b rands and p roduc ts overseas . In order to

es tab l i sh an impor tan t pos i t ion ing in the minds o f consumers , one

mus t i nves t i n market ing , w i th l ong- te rm s t ra teg ies , manu fac tu r ing

coord ina t ion and cons tan t qua l i t a t i ve suppor t , so tha t compet i t i ve

and su i tab le p roduc ts a re ava i lab le to the var ious markets .

Bes ides the p rob lems ment ioned above , expor t i ng compan ies qu i te

o f ten made the dec is ion to abandon the i r overseas cus tomers ,

p re fer r ing to focus on supp ly ing domest ic consumpt ion on accoun t

o f t he absence o f a deve loped cap i ta l s marke t and the low

ava i lab i l i t y o f l ong- te rm c red i t , p r imar i l y fo r sma l l and mid-s i ze

compan ies .

Th is absence o f a s teady in ten t and , as a l ready ment ioned , o f

p roduc t ion coord ina t ion , adverse ly a f fec ts the in te rna t iona l i za t ion

p rocess . The behav ior expec ted o f a company tha t i n tends to

29

i nc rease i t s bus iness on the overseas marke t mus t i nc lude

p lann ing o f t he s tages to be reached g radua l l y , beg inn ing w i th

expor ts and p rogress ing to methods o f i n te rnat iona l i za t ion

invo lv ing a g reate r commi tment , whose f ina l s tep wou ld be d i rec t

inves tment i n o ther count r ies by se t t i ng up manufac tu r ing p lan ts ,

o r even s t ra teg ic pa r tne rsh ips w i th ou tsourced manufac tu rers .

2 .3 Analysis o f the product ion organizat ion o f the Braz i l ian winegrowing industry , ident i fy ing the main causes of i ts d i f f icu l t ies .

Summar iz ing we can say tha t the Braz i l i an indus t ry i s be ing

cha l lenged and mus t cor rec t the fo l low ing fac to rs , among o thers :

F i rs t l y , l im i ted produc t ion o f va r ie t i es c rea t ing d i f f i cu l t i es in te rms

o f s tab i l i t y and homogene i ty i n the supp ly o f qua l i t y g rapes .

Second ly , pe rs is ten t p rob lems invo lv ing hor izon ta l coord ina t ion

and cont ro l wh ich , g iven the h igh cos t o f superv i s ion , end up

permi t t ing the oppor tun is t i c behav io r o f excess ive use o f add i t i ves

in the w ine . I n the same ve in , i t i s wor th reca l l i ng tha t o rgan ic

w ines a re even more res t r i c t i ve regard ing the use o f add i t i ves and

in Braz i l the re i s no cen t ra l au thor i t y w i th respons ib i l i t y fo r

cont ro l l ing th is . Th i rd l y , the law does no th ing to encourage qua l i t y .

Four th ly , h igh in te res t ra tes in Braz i l demot i va te p roducers f rom

mak ing inves tments ; and in f i f th p lace , h igh p roduc t ion cos ts

because o f t he low-sca le p roduc t ion .

L im i ted produc t ion o f va r ie t i es o f g rapes leads to he te rogene i ty i n

the supp ly cha in . I n th i s respec t i t i s the w inemaker ’s du ty to

cont ro l t he qua l i t y o f t he seeds and how the g rapes are g rown, so

tha t t he f ina l p roduc t , name ly the w ine , i s the p roper one . I n order

to ach ieve th i s ob jec t ive , i t p rov ides incen t i ve po l i c ies , techn ica l

ass is tance and d isc losure o f bes t p rac t ices .

Moni to r ing a lso p reven ts the oppor tun is t i c behav io r o f us ing

add i t i ves when p roduc ing g rapes and w ine . In the case o f the

30

organ ic w ine , t he re a re spec i f i c cer t i f i ca t ions tha t l im i t the use o f

subs tances l i ke su l f i te , fo r example .

Compared w i th the coopera t ives , research shows tha t w inemakers

w i th s tab le long- te rm con t rac ts and g rea te r ve r t i ca l i n teg ra t ion

w i th the fa rmers a re more produc t i ve (ZYLBERSTAJN, 2002) .

Where the s ta te i s concerned , t here i s c lea r ly no cen t ra l au thor i t y

in charge o f qua l i t y con t ro l i n Braz i l . Fu r the rmore , the law and

h igh in te res t ra tes do not encourage improvements o r i nves tments

in techno logy (ZYLBERSTAJN, 2002) .

2 .4 Review of the main market ing concepts adopted to boost the compet i t ive st ra tegy o f some Braz i l ian wines on the in ternat iona l market .

Given the uncer ta in t ies c rea ted by changes in the ex te rna l

env i ronment and the need to prepare fo r the fu tu re , o rgan iza t ions

found themse lves fo rced to deve lop and app ly co rpora te s t ra tegy

concep ts in o rder to ach ieve a sus ta inab le compet i t i ve advan tage

over t ime.

The co rpora te s t ra tegy is based on both concep ts o f o rgan iza t iona l

cu l tu re and po l i c ies as we l l as on those o f t he ne tworked economy

spawned by the evo lu t ion o f i n fo rmat ion techno logy .

The word s t ra tegy comes f rom the Greek word s t ra tegos , mean ing

head o f the a rmy; the se t o f management techn iques known as

s t ra teg ic p lann ing i s c lose ly connec ted w i th how genera ls p lan

wars . F i schmann and A lme ida (1990) .

Accord ing to M in tzberg and Qu inn (1998) , co rpora te s t ra tegy

invo lves behav io rs , ac t i v i t ies and va lues shared among an

o rgan iza t ion ’s emp loyees who a re ded ica ted to a common purpose.

For Por te r (1998) , s t ra tegy takes p lace in a l l a reas o f the

bus iness . The foundat ion o f an o rgan iza t ion ’s s t ra tegy mus t be

mani fes t in every ac t i v i t y t he company under takes .

31

Accord ing to F ischmann and A lme ida (1990) , s t ra teg ic p lann ing is

a management techn ique tha t by ana lyz ing the in terna l and

ex te rna l env i ronments , t he s t reng ths and weaknesses o f a

company , ra ises the awareness requ i red fo r fu l f i l l i ng the la t te r ’s

m iss ion , a t a l l t imes tak ing advantage o f the oppor tun i t i es wh i le

avo id ing the r i sks .

Ansof f (1977) , i n tu rn , s ta tes tha t s t ra tegy i s t he gu id ing s ta r fo r

compan ies to make dec is ions in t imes o f uncer ta in ty . For the

author , s t ra tegy compr ises fou r e lements . These a re :

Produc t m ix and marke t ;

Deve lopment d i rec t ion ;

Compet i t i ve advan tage;

Synergy ;

Drucker (1972) cons idered marke t ing as the mos t impor tan t

ac t i v i t y w i th in an o rgan iza t ion , because cus tomer sa t is fac t ion is

fundamenta l . Lev i t t (1981) adds tha t o rgan iza t ions in add i t i on to

p roduc ing goods and se rv i ces need to lea rn to take in to accoun t

how cus tomers buy the i r p roduc ts .

Lamb in (1989) po in ts ou t tha t t he main purpose o f the opera t iona l

market ing is to genera te sa les us ing the cheapes t poss ib le too ls .

The purpose o f t he s t ra teg ic marke t ing , i n tu rn , i s t o i den t i f y

market oppor tun i t ies fo r the o rgan iza t ion . In add i t i on , t he s t ra teg ic

market ing area seeks to inc rease the company ’s ab i l i t y t o adap t t o

env i ronmenta l changes , seek ing to an t ic ipa te the need to renew

the p roduc t po r t fo l i o .

In regard to the re la t ionsh ip between s t ra teg ic market ing and

compet i t i ve advan tage we can say tha t over recent decades

compan ies have been t ry ing to deve lop new s t ra teg ic ana lys is

too ls to he lp them in the i r dec is ion-mak ing processes . W i th in th i s

32

contex t , s t ra teg ic marke t ing has changed to ensure the company ’s

compet i t i ve advan tage .

Accord ing to Por te r (1998) , the company mus t have a sus ta inab le

compet i t i ve advan tage in o rder to remain hea l thy in the face o f

ex te rna l th rea ts year a f te r year . Compet i t i ve advan tage is

p rec ise ly the va lue tha t the company i s ab le to add to a p roduc t , i n

add i t i on to the cos t o f manu fac tu r ing i t . There fo re the re are two

bas ic t ypes o f compet i t i ve advan tages : l eadersh ip in cos ts and

d i f fe ren t ia t i on .

Aaker (2005) s ta tes tha t the sus ta inab i l i t y o f t he compet i t i ve

advan tage i s a comb ina t ion o f e lements w i th in the co rpora te

s t ra tegy tha t p rov ides an advantage over compet i t o rs now and in

the fu tu re .

In regard to synergy , Aaker (2005) adds tha t w i thou t synergy

among the bus iness un i ts , compet i t i ve advantage w i l l no t be

sus ta inab le in the long run .

Fur the rmore , i n o rder to c rea te a compet i t i ve advan tage , i t mus t

be h igh ly va lued in the marke tp lace and no t eas i l y emu la ted .

From the moment a company dec ides to tu rn in to g loba l

co rpora t ion , Aaker (2005) recommends tak ing in to accoun t the

fo l low ing fac tors when choos ing the ta rget count ry :

I s t he marke t an a t t rac t i ve one in te rms o f s i ze and g rowth

poten t ia l?

I s t he compet i t i on s t rong? Who a re the marke t p layers?

Can the company add va lue to the marke t?

A re the re bar r ie rs i n tha t marke t?

Kot le r (2000) es tab l i shed fou r d i f f e ren t compet i t i ve s t ra teg ies fo r

o rgan iza t ions :

The s t ra tegy o f the leader by meet ing p r imary demand.

33

The s t ra tegy o f the a t tacker by a t tack ing the leader .

The s t ra tegy o f the fo l lower , by m i r ro r ing h is dec is ions on

wha t the compet i t i on i s do ing .

The s t ra tegy o f the spec ia l i s t by spec ia l i z ing in a n i che.

Accord ing to Aaker (2005) , segmenta t ion is fundamenta l fo r

sus ta in ing the compet i t i ve advan tage , because i t can be used to

become spec ia l i zed in a marke t .

For Aaker (1998) , b rand loya l ty i s a c ruc ia l i ssue when a l l oca t ing a

company ’s resources . Thus Aaker ho lds tha t :

[ . . . ] t he i nc r ease o f f i ve pe rcen tage po in t s i n l oya l t y ma y a l mo s t doub l e the ea r n i ngs o f a l i f e t i m e ge ne r a te d by cus t om ers i n d i f f e r en t i nd us t r i e s , i nc lud ing b ank ing se r v i ces , i nsu ran ce , a u to se rv i ces , pub l i sh i ng m ar ke t a nd c r ed i t ca r ds . As a r u l e , t he key i s t o r ewa rd t he l oya l cus tom er s so t ha t t he i r expec t a t i on s a r e me t , t he r eby ensu r in g an on - go i ng r e la t i o nsh ip and o f fe r i ng ex t r as th a t su rp r i se and t i t i l l a t e [ . . . ] (A AKE R, 1 998 , p . 57 ) .

Aaker (1998) p repares a loya l ty mat r i x (Tab le 4 ) where each ce l l

represen ts a d i f fe ren t s t ra teg ic p r io r i t y . The au thor shows tha t i t i s

usua l ly very easy to cons ider a loya l cus tomer as a guaran teed

asset . Bu t ,

[ . . . ] i f we l o ok a t i t f r om t he p e rsp ec t i ve o f t h e su m o f t he ea r n in gs f r om a cus to mer ’ s l i f e t i me , t h i s m ay m ake t he va l ue o f a h ig he r l oya l t y m uch m or e a t t rac t i ve [ . . . ] (A AKE R, 19 98 , p . 5 7 ) .

Tab le 4 – The loya l ty mat r i x : p r io r i t ies .

Matr ix Dis loya l I r regular Loya l Cus tomers Ave ra ge H i gh The lo wes t

Non -cu s to me rs Low H i gh Low

Source : Aaker – S t ra teg ic Marke t Management - 1998 .

34

The loya l ty mat r ix sugges ts tha t those w i th an i r regu la r a t ten t ion

to the b rand, inc lud ing those who occas iona l ly pay a t ten t ion to

compet i to rs ’ b rands , mus t be a p r io r i t y fo r the o rgan iza t ion .

Us ing the mat r i x imp l ies es t ima t ing the s ize o f the s i x ce l l s ,

iden t i f y ing the cus tomers in each g roup and d raw ing up p rograms

tha t w i l l i n f l uence the i r b rand p re fe rence and loya l ty l eve l .

In the w ine marke t the ques t ion o f l oya l t y to a b rand car r ies a lo t

o f we igh t i n the consumer ’s dec is ion to purchase (K IM;

MAUBORGNE, 2005) . Never the less , t he dec is ion p rocess to buy a

p roduc t a lso invo lves o ther mot i va t iona l fac to rs exp la ined in the

nex t paragraph .

Mas low (1943) s tar t s f rom two ideas when fo rmula t ing h i s theory

o f human mot iva t ion : the env i ronment in f l uences human behav io r

(cu l tu ra l fac to rs ) and human be ings ca r ry cer ta in inna te

mot i va t ions and emot ions (gene t i c f ac to rs ) .

The au thor be l ieved in human k indness , t hus h is research led h im

to search fo r “se l f -ach ievement ” themes and the s tudy o f human

poten t ia l .

When research ing “emot iona l domina t ion and secur i t y ” w i th in the

B lack foo t Ind ian t r i be in 1938 , he no t i ced tha t peop le have ce r ta in

inner needs no t spec i f ied by Freud wh ich were aga ins t the

cap i ta l i s t no t ion o f the economic man s t imu la ted by mate r ia l

des i res . He recogn ized the inna te need o f peop le to exper ience

sense and have a purpose in the i r l i ves .

In deve lop ing the theory o f human mot i va t ion , Mas low t r i ed to

unders tand the fac to rs compr is ing happ iness and a sense o f

ach ievement . Upon ana lyz ing norma l persona l i t i es he iden t i f i ed

common charac te r i s t i cs such as se l f -es teem, se l f -awareness ,

sk i l l s o f rece iv ing and express ing love and the ab i l i t y to ques t ion

the ru les o f soc ie ty i t se l f as p rerequ is i tes fo r a hea l thy psyche.

35

In th i s con tex t , Mas low ’s Theory (KOTLER, 2000) h ie ra rch izes

human needs in such a way tha t t he mot iva t ion o f i nd iv idua ls

wou ld s t r i ve to sa t is f y those needs tha t range f rom pr imary

(phys io log ica l ) needs , to the mos t comp lex o r psycho log ica l needs

(se l f -ach ievement ) . The f i ve types o f need a re shown in the tab le

be low.

Tab le 5 – Human needs accord ing to Mas low.

Physio logica l Hunger , th i rs t , s leep , sex , e tcSecur i ty Stab i l i t y , p ro tec t ion aga ins t phys ica l o r

emot iona l ha rm, e tcSocia l Fr iendsh ip , i n t imacy , accep tance , f ee l ing loved ,

lov ing , e tc .Sel f -esteem Be ing admi red by the o thers , fee l i ng impor tan t ,

se l f - love , pe rsona l ach ievement , e tc .Sel f -ach ievement

Persona l deve lopment and /o r p ro fess iona l advancement , pe rsona l sa t i s fac t ion , e tc

Source : Kot le r – Marke t ing Management - 2000 .

For Mas low, ind iv idua ls wou ld on ly t rans i t f rom one s tage to

ano ther i f they have sa t i s f i ed a l l t he needs o f t he p rev ious s tages ,

tha t i s , when the mos t bas ic needs have been sa t is f ied , new needs

(a t a h igher leve l ) appear , and the o ld needs no longer se rve as

mot i va tors o f behav io r . Th is i s the charac te r is t i c o f t he h ie ra rchy

o f re la t i ve impor tance o f human needs , where a t the top the re i s

the des i re fo r se l f -ach ievement , “espec ia l l y t he tendency to

become what he po ten t ia l l y i s : become every th ing tha t a person

can become. ”

Char t 2 – H ie ra rchy o f needs .

36

AchievementEsteem

Part ic ipat ionSecur i ty

BasicSource : Marke t ing Management - Ph i l i p Ko t le r (2000) .

Th is fac t canno t be p roven in a l l soc ie t ies , bu t the h ie rarchy

se rves as a gu ide l ine fo r the dec is ions o f marke t ing pro fess iona ls

when adap t ing a p roduc t to be o f fe red to the consumer .

La ter , the ERG – Ex is tence , Re la tedness and Growth Theory o f

C lay ton A lder fe r (1969) was to make Mas low ’s h ie ra rchy more

compat ib le w i th the rea l i t y o f a l a rger number o f soc ie t ies ,

show ing tha t more than one need may be tak ing p lace

s imu l taneous ly .

Dur ing the dec is ion p rocess fo r buy ing a p roduc t , the consumer i s

faced w i th severa l s tages o f re f lec t ion . The A IDA model c reated by

Je rome McCar thy in 1960 exp la ins the s tages tha t a re

p rerequ is i tes fo r a purchase dec is ion . A t ten t ion , I n teres t , Des i re

and Ac t ion fo rm a l i near h ie ra rchy tha t consumers exper ience

when mak ing a purchase .

So in order to buy a produc t t he consumer mus t necessar i l y meet

the fo l low ing c r i te r ia :

Tab le 6 – S tages , accord ing to the A IDA mode l , i n the purchas ing p rocess .

Attent ion Knowing tha t a p roduc t o r se rv ice ex is ts .

In terestPay ing a t ten t ion to the charac te r is t i cs ,

spec i f i ca t ions and bene f i t s o f t he p roduc t .

DesireHav ing the des i re to en joy the bene f i t s the p roduc t

o f fe rs .

37

Act ion Purchas ing the produc t

Source : Aaker - S t ra teg ic Market Management - 1998 .

The char t be low h igh l igh ts the purchase dec is ion p rocess i t se l f :

Char t 3 – Purchase dec is ion p rocess .

Source : Kot le r - Market ing Management - 2000.

So in an examp le about mot iva t iona l segments and p r io r i t i es o f

a i r l i ne cus tomers , Aaker (1998) segments the mot iva t ions as

fo l lows :

Tab le 7 - Cus tomer mot i va t ion : a i r l i ne passengers .

Segment Mot ivat ion

Business Rel iab le se rv ice , conven ien t t imes , user - f r iend ly

a i rpo r ts , f requen t f l ye r p rograms and comfor tab le

se rv ice .

Tour is ts Conven ien t p r i ces , t imes and dates .

Source : Aaker - S t ra teg ic Market Management - 1998 .

I t i s impor tan t t o be aware o f t he se t o f mot i va t ions tha t compr ise

the consumer ’s cho ice ; a l t hough mot i va t ions a re no t t he ma in

e lement when de f in ing a s t ra tegy o r d i f f e ren t ia t i ng a bus iness ,

they represen t m in ima l l y a d imens ion tha t one mus t a t ta in in o rder

to pe r fo rm adequa te ly , on pa in o f los ing the ba t t le . Accord ing to

Aaker :

[ . . . ] i f t a s te i s t he b as i c mo t i va t i on fo r t ho se w ho buy spec ia l f r ozen d i nne r s , a v iab le com pany mus t a t l e as t be capab l e o f o f fe r i ng an accep t ab l e t as t e [ . . . ] ( AA KER , 1998 , p . 59 ) .

R e c o g n i z i n g t h e p r o b l e m ( p e r c e i v i n g t h e n e e d ) > S e a r c h i n g f o r i n f o r m a t i o n a b o u t t h e p r o d u c t > E v a l u a t i n g t h e a l t e r n a t i v e s > P u r c h a s e

d e c i s i o n .

38

As Char t 4 sugges ts , mot i va t iona l ana lys i s o f the consumer beg ins

w i th the task o f ident i f y ing the mot iva t ions o f a g i ven segment .

Char t 4 – Ana lys i s o f Cus tomer Mot i va t ions .

Source : Aaker - S t ra teg ic Market Management - 1998 .

Go ing back to the examp le o f t he a i r l i nes , Naresh K Ma lho t ra

(1999) in h is book “Marke t ing Research” shows how the ana lys i s o f

cus tomer mot iva t ions i s e f fec t ive ly pu t i n to e f fec t . Ma lho t ra te l l us :

[ . . . ] t h a t A s ian a i r l i ne com pan i es had fo r a l ong t im e be en f ac ing unce r t a in t y and s t r ong co mpe t i t i on f rom t he i r U S coun te r pa r t s . W i t h i n th i s con te x t t h ey w oke up to th e n eed to g r oup to ge t he r and i nc re ase th e i r c l i en t e le . Se conda r y da t a ( i n f o r ma t i on a l rea dy ava i l ab l e i n t he ma rke t ) sho wed t ha t t he fac t o r s de te r m in i ng passenge rs ’ cho i ce o f an a i r l i ne com pany i nc l uded p r i ces , punc t ua l i t y , des t i na t i on s , o f f e r s ava i l ab l e , i n - f l i gh t m ea l s , se r v i ce , e t c . . . T he As ian com pan ies we r e o f fe r i n g th ese se r v i ces a t l eas t on equ a l con d i t i on s . I n f ac t , an add i t i ona l s tud y showe d th a t i n - f l i gh t se r v i ce and f ood w e r e even b e t t e r t h an t hose o f t he com pe t i t o r s . A ga ins t t h i s b ackg r ound , why we r e t he As i an com pan i es f ee l i ng t he hea t f r om t he co mpe t i t i on? [ . . . ] (M AL HO TRA , 1999 , p . 474 ) .

Af te rwards , a qua l i ta t i ve s tudy was ca r r ied ou t us ing focus g roups .

Th is revea led tha t the f requent f l ye r p rogram was a c r i t i ca l fac to r

fo r a la rge segment i n genera l , and fo r the new bus iness segment

in pa r t i cu la r . Mu l t ip le regress ion ana lys i s o f the da ta gathered in a

su rvey o f i n te rna t iona l passengers enab led the fo l low ing

conc lus ions to be reached :

[ . . . ] Th e l i ke l i ho od o f f l y i ng and o t he r mea su re s o f ch o i ce se r ved as a de penden t va r i ab l e , w h i l e t he se t o f f ac t o r s i nvo l v i ng se r v i ce , i nc l ud i ng t he f req uen t f l ye r p ro g ra ms , w as the i ndepen den t va r i a b les . The r esu l t s sh owed tha t t he f re quen t f l ye r p r og r am d id i n f ac t have a

Id en t i f y mo t i va t io ns > G roup and s t ruc t ure mot i va t ion s > Eva l ua t e th e i mpor t ance o f t he mot iva t i ons > Gi ve s t ra te g ic

ro le s t o th e mot i va t ions .

39

s ign i f i can t i m pac t on t he ch o i ce o f t he a i r l i ne com pany . B ased on th i s ev id ence , t h r ee As ian com pan ie s l aun ched a j o in t p r og r am f o r t he i r f r equ en t f l ye r s , ca l l ed As i a P lus , f o r use r s o f a l l t he i r a i r l i nes . Th e p r og r am was t he f i r s t amo ng t he As i an a i r l i ne comp an ie s to o f f e r f r ee t r ave l i n exchange fo r r egu l a r f l y i ng . A m ar ke t i ng camp a ign was l au nched and m i l l i on s o f d o l l a rs spen t on adve r t i s i ng t o p rom o t e As ia P l us . The f req uen t f l ye r s wen t f r om , l e t ’ s say , t u r bu le nce to good wea the r , and t he A s ian a i r l i nes saw the i r passeng e r tu r nove r g r ow [ . . . ] (M AL HO TRA , 1999 , p . 474 ) .

Th is type o f ana lys i s , in the case o f cus tomer re la t ionsh ip

management i n se rv i ces bes ides a i r l i nes compan ies , can be

examp led by char t 5 :

Char t 5 - Serv ice .

Key to the char tF a c i l i d a d e d e a c e s s o E a s e o f a c c e s s

P r o g r a m a d e P a s s a g e i r o s F r e q u e n t e s F r e q u e n t F l y e r s P r o g r a m

A g i l i d a d e n o a t e n d i m e n t o Q u i c k c u s t o m e r s e r v i c e

C o r d i a l i d a d e e a t e n ç ã o C o r d i a l i t y a n d a t t e n t i o n

M a n t e r M a i n t a i n

M a n t e r o u m e l h o r a r M a i n t a i n o r i m p r o v e

M e l h o r a m e n o s p r i o r i t á r i a L o w e r p r i o r i t y i m p r o v e m e n t

P r i o r i d a d e m a x i m a T o p p r i o r i t y

I m a p c t o I m p a c t

40

Source : Malho t ra – Marke t ing Research - 2009 .

In regard to p r ic ing , Parsons and Da l rymp le (1995) ho ld tha t the

def in i t i on o f the p r i ce o f a p roduc t can serve d i f f e ren t pu rposes . In

some cases , the p r ice a f fo rds the p roduc t exc lus iveness ; wh i le i n

o ther cases a low p r ice enab les i t to ga in marke t share f rom

compet i to rs .

G loba l iza t ion i s a t rend in the bus iness env i ronment , and the

border l i ne between wha t i s domest i c and wha t i s i n te rna t iona l i s

an inc reas ing ly tenuous one.

The d isappearance o f cus toms bar r ie rs has led to g rea te r a f f i n i t y

be tween coun t r ies . Techno log ica l deve lopment and g loba l i za t ion

have in tu rn p roduced impor tan t mod i f i ca t ions in the in te rnat iona l

a rena .

Accord ing to Mead (1998) , ma jo r compan ies conduc t t he i r

in te rna t iona l bus iness th rough subs id ia r ies and jo in t ven tu res ,

wh i le smal l compan ies a lso fee l the p ressure f rom fo re ign

compet i t i on and dec ide to in te rna t iona l ize , t oo . I n the advanced

s tages o f deve lopment , o rgan iza t ions op t fo r f ranch is ing o r

l i censed manufac tu re .

The d i f f e ren t s tages o f deve lopment i nvo lve d i f fe ren t concepts o f

in te rna t iona l marke t ing .

Keegan (2005) du r ing the in te rnat iona l i za t ion p rocess es tab l i shes

fou r s tages w i th in a company ’s i n te rna t iona l i za t ion p rocess :

Domest i c Organ iza t ions : companies focused on the

domest i c marke t , w i th on ly sporad ic expor t ac t i v i t y .

In te rnat iona l o rgan iza t ions : Compan ies tha t t rans fe r the i r

va lues and prac t i ces to the i r b ranches in o ther count r ies .

41

Po lycen t r i c Organ iza t ions : Compan ies tha t adap t t he i r

va lues and prac t i ces in the i r b ranches loca ted in o ther

coun t r ies .

Globa l o rgan iza t ions : Companies tha t success fu l l y deve lop

a g loba l s t ra tegy fo r t he i r p roduc t based on s im i la r i t ies

be tween the marke ts .

Accord ing to Cra ig and Doug las (2000) , g loba l market ing i s more

complex than domest ic marke t - focused marke t ing a lone , as the

ac t i v i t ies invo lve d i f fe ren t management sys tems, such as l i censes ,

s t ra teg ic a l l i ances and jo in t ven tu res . For T roy jo (2005) , fo r

examp le , o rgan iza t ions mus t pu t i n p lace depar tments fo r hand l ing

these spec i f i c p rob lems and , a t the same t ime , i den t i f y

oppor tun i t ies w i th in the in te rna t iona l contex t .

K im and Mauborgne (2005) ana lyzed the case o f Case l la Wines

and put toge ther the f ramework needed to c reate a l te rna t ive room

in the marke t to ge t round the compet i t ion .

Char t 6 : E lements fo r c rea t ing a new va lue cu rve - The four

ac t ions f ramework .

42

Source : The b lue ocean s t ra tegy - Kim and Mauborgne (2005) .

Case l la W ines c rea ted the “Ye l low Ta i l ” w ine whose s t ra teg ic

p ro f i l e beat the compet i t ion and c reated the “b lue ocean” . Ins tead

o f o f fe r ing w ine as w ine , Case l la c rea ted a soc ia l w ine access ib le

to everyone. In o ther words , access ib le to consumers o f beers ,

cock ta i l s , e t c . . .

In a two-year per iod , t h i s soc ia l and fun w ine tu rned ou t t o be one

o f the fas tes t -g row ing b rands in the market i n the Un i ted S ta tes

and Aus t ra l i a . Th is w ine ou tper fo rmed sa les o f F rench and I ta l i an

w ines .

An in te res t ing fea tu re o f t he Ye l low Ta i l w ine i s tha t the re was no

p romot iona l campa ign , mass med ia or adver t i s ing campa ign to

d ivu lge i t . In i t i a l l y t oo , th i s w ine d id no t s tea l the marke t f rom

t rad i t iona l w ines , ra ther i t s imp ly won over new consumers who

had p rev ious ly never drunk w ine .

US consumers usua l l y cons ider w ine comp l i ca ted because i t s t as te

is d i f f i cu l t to apprec ia te . Beer and cock ta i l s a re swee te r and

eas ie r to d r ink . Ye l low Ta i l i s smooth and less comp l i ca ted than

t rad i t iona l w ines . In o ther words , t he a l coho l s t ruc tu re i s l ess

compl i ca ted .

The Ye l low Ta i l packag ing i s uncompl i ca ted and innova t i ve , w i th

v ib ran t o ranges and ye l lows on a b lack background . T rad i t i ona l

w ines have labe ls w i th lo ts o f de ta i l s tha t a re d i f f i cu l t to

unders tand.

F igure 2 : Wine labe l ing .

43

UN I TED S TA TESFR AN C E

ITA LY

Source : Wine lovers ques t ionary - 2009 .

1 - Winemaker ’s name

2- Reg ion where the g rapes were cu l t i va ted .

3 - Year in wh ich the grapes were p icked.

4 - Type o f g rape.

5 - Type o f p rocess ing .

6 - Bo t t l i ng reg ion .

7 - Add i t i ona l i n fo rmat ion .

F igure 3 : Ye l low Ta i l l abe l ing

44

Source : h t tp : / /www.c rea t i veroo ts .org - 2009 .

S t i l l w i th regard to Ye l low Ta i l we can say tha t labe l ing

te rmino logy and the t rad i t iona l marke t ing o f w ines were

e l im ina ted .

Par i passu , a d r ink was c reated tha t has a l igh t tas te and can be

en joyed soc ia l l y . Fu r the rmore , the po in t -o f -sa le re la t ionsh ip was

enhanced and the comp lex i ty o f the w ine reduced .

Char t 7 : Summary o f t he Ye l low Ta i l s t ra tegy .

Source : The b lue ocean s t ra tegy - K im and Mauborgne (2005) .

45

3 METHODOLOGY

3.1 Determining the type of research and i ts constra in ts .

We can say tha t th is s tudy is an exp lo ra tory one , as i t has sough t

to i den t i f y a n iche in i n te rna t iona l marke t and has mere ly

sc ra tched the sur face o f an innovat ive marke t ing s t ra tegy fo r some

Braz i l i an w ines .

In add i t i on , based on the case s tudy , th i s paper a l so sough t to

inc rease the leve l o f compet i t i veness o f B raz i l i an w ine w i th in the

p roduc t ion env i ronment .

There fore the purpose o f t he case s tudy o f the German indus t ry

was to p rov ide the deve lopment t ime l i ne o f t hose reg iona l

w inemakers w i th in i t ia l l y l ow y ie lds p rogress ing to a g loba l ly

recogn ized , h igh ly coord ina ted and e f f i c ien t p roduc t ion sys tem.

In sp i te o f hav ing touched upon p roduc t ion concep ts , th i s s tudy

was l im i ted to examin ing mat te rs o f an admin is t ra t i ve na tu re , such

as : o rgan iza t ion o f p roduc t ion and market ing pos i t i on ing .

There fore th is s tudy d id no t go in to depth in i t s ana lys is o f spec i f i c

mat te rs invo lv ing the sc ience o f eno logy .

One can say tha t t h i s s tudy began w i th a theory : B raz i l i an w ine is

fu l l y capab le o f compet ing w i th w ines f rom the New Wor ld (USA,

South A f r i ca , Ch i le and Aus t ra l i a ) on the German marke t , as Braz i l

possesses a huge unexp lo i ted agr ibus iness potent ia l . Bes ides ,

B raz i l a l so en joys g rea ter poss ib i l i t i es o f ach iev ing economies o f

sca le when compared to Ch i le and Sou th A f r i ca , wh i le i t s

p roduc t ion cos ts , such as labor , a re much cheaper when compared

to those o f the USA and Aus t ra l ia .

A l though not an exp lanatory s tudy , t h i s p ro jec t a lso sought to

unders tand the ex-pos t - fac to CAUSES o f the p rob lems w i th in the

Braz i l i an w inegrowing indus t ry , by ana lyz ing h is to r ica l da ta on the

in terne t and read ing books and a r t i c les on the top ic .

46

Fur thermore , the s tudy a lso t r i es to DESCRIBE the German w ine

market and the h is to ry o f i t s deve lopment . In order to con f i rm

documenta ry da ta in format ion , a f ie ld research was ca r r ied ou t i n

Nuremberg – Germany , bu t wh ich i s no t s ta t i s t i ca l l y

represen ta t i ve .

The case s tudy o f t he German w inegrowing indus t ry no t on ly

se rves as an organ iza t iona l mode l f o r B raz i l i an w inemak ing , bu t

a lso as a means o f unders tand ing how poss ib le loca l compet i to rs

wou ld behave . I t shou ld be po in ted ou t , never the less , tha t

accord ing to the B lue Ocean s t ra tegy , bo th the Sa l ton Mosca te l

and Organ ic Wines wou ld endeavor to exp lo re new n iches in the

German marke t ra ther than compet ing head- to -head w i th the Sekt .

Given tha t s tud ies were ca r r ied ou t us ing b ib l iog raph ies o f

a r t i c les , books and per iod ica ls , e r ro rs o f ana lys i s may have

occur red . Never the less , a documenta ry su rvey was done p r imar i l y

on s i tes , severa l in te rv iews and a s imple f i e ld s tudy to p rove the

theory .

The reason fo r choos ing an exp lo ra to ry research is due to the

e f fo r t to sa t i s fy a theory and the o r ig ina l i t y o f i den t i f y ing a new

market n iche .

3 .2 Spec i f ic object ives of the research.

Summar iz ing , we can say tha t t h is s tudy is s t ruc tured in the

fo l low ing manner :

Char t 8 : Research scheme

47

Key to the char t

P e s q u i s a e x p l o r a t ó r i a E x p l o r a t o r y r e s e a r c h

B i b l i o g r a f i a B i b l i o g r a p h y

M a r k e t i n g I n t e r n a c i o n a l I n t e r n a t i o n a l M a r k e t i n g

P e r f i l d e c o n s u m o , d e m o g r a f i a , c o m p e t i t d o r e s , e t c

C o n s u m p t i o n p r o f i l e , d e m o g r a p h y , c o m p e t i t o r s , e t c

O r g a n i z a ç ã o d a p r o d u ç ã o P r o d u c t i o n o r g a n i z a t i o n

V a l i d a ç ã o d o c u m e n t a l D o c u m e n t a r y v a l i d a t i o n

E s t u d o d e c a s o C a s e s t u d y

F o n t e s s e c u n d á r i a s S e c o n d a r y s o u r c e s

E s t r a t é g i a c o m p e t i t i v a C o m p e t i t i v e s t r a t e g y

M e r c a d o a l e m ã o , g r a n d e i m p o r t a d o r G e r m a n m a r k e t , m a j o r i m p o r t e r

E n t r e v i s t a s I n t e r v i e w s

I n d ú s t r i a a l e m ã G e r m a n i n d u s t r y

P e s q u i s a d e c a m p o F i e l d r e s e a r c h

F o n t e s p r i m á r i a s P r i m a r y s o u r c e s

Source : Ju l i ana C lemente T rou la - 2009.

48

A b ib l i og raph ic research was ca r r ied ou t o f a r t i c les , books and

per iod ica ls i n o rder to ana lyze a s t ra tegy fo r ra i s ing the

compet i t i ve s tand o f t he Braz i l ian w ine , w i th in bo th the market ing

and the produc t ion env i ronments . The books chosen to a t ta in

these ob jec t i ves be long , in the main , to the fo l l ow ing f ie lds :

o rgan iza t ion o f p roduc t ion , marke t ing and compet i t i ve s t ra tegy .

In o rder to va l ida te the ideas presen ted in the b ib l iog raphy

researched regard ing the o rgan iza t ion o f p roduc t ion , a

documenta ry research was ca r r ied ou t on the s i tes o f pub l i c o r

p r iva te research ins t i tu t ions , assoc ia t ions , companies and news

agenc ies . I n add i t ion , severa l in te rv iews were ca r r ied out , bo th in

w ine s to res and exh ib i t ions .

In order to render feas ib le a new marke t ing s t ra tegy p repared

th rough b ib l i og raph ica l research , da ta was ga thered bo th in the

f i e ld , by v is i t i ng supermarke ts , and th rough in te rv iews in w ine

s to res and exh ib i t i ons . In add i t i on , a l l i n fo rmat ion co l lec ted was

va l ida ted by rev iewing the in fo rmat ion p rov ided by s i tes and

a r t i c les on the sub jec t .

3 .3 Types and sources of in format ion.

Summar iz ing , as ment ioned prev ious ly , by us ing in te rv iews , v i s i t s

to es tab l i shments , pa r t i c ipa t ion a t exh ib i t i ons , research on s i tes

and read ing o f books o r a r t i c les pub l ished on the sub jec t t h is

p ro jec t came to f ru i t ion under the gu idance o f th ree majo r

approaches . One o f them was an ana lys i s o f t he compet i t i veness

o f B raz i l i an w ine w i th in bo th the p roduc t ion and the market ing

env i ronment . The second was the measurement o f t he po tent ia l

consumpt ion o f the produc t on the German marke t and the s t ra tegy

fo r i t s marke t ing pos i t i on ing . Las t l y , i n t he search fo r a benchmark

fo r the domest i c w inegrowing sec tor , a case s tudy was made o f t he

h is to ry o f the German w inegrow ing indus t ry and the enhancements

in the leve l o f qua l i t y a t ta ined over the years .

49

As a source o f secondary data , we used b ib l iog raph ica l and

documenta ry research. Among the c lass ica l au thors consu l ted we

have Ko t le r , Aaker and Por te r . In the case o f documenta ry

research , we can ment ion AC N ie lsen , t he USDA, CONAB,

UVIBRA, Aus t rade e tc .

To ob ta in pr imary da ta we d id a su rvey w i th eno log is t s in w ine

s to res and a t exh ib i t i ons . However , t he number o f i n te rv iewees is

no t s ta t i s t i ca l l y rep resen ta t ive , and i t was dec ided no t t o ment ion

the names o f t he compan ies o r p ro fess iona ls p resen t espec ia l l y a t

the Expov in i s fa i r .

As a l ready ment ioned , in the case o f i nd i rec t documenta ry

research we can say tha t bo th documenta ry and b ib l iog raph ica l

sources were used . A t t he same t ime , i n the case o f d i rec t

documenta t ion we can say tha t a s imp le f ie ld s tudy was ca r r ied ou t

in Nuremberg .

The in terv iews conduc ted bo th in w ine s to res and a t exh ib i t i ons

a re c lass i f i ed as s t ruc tu red and invo lve in tens ive d i rec t

observa t ion .

Las t ly , i n regard to the case s tudy we can say tha t i n fo rmat ion was

co l lec ted abou t t he s t ra teg ies emp loyed fo r ach iev ing es tab l i shed

goa ls , wh i le a l so ou t l in ing a po l i t i ca l and manager ia l p ro f i l e o f t he

coun t ry and i t s p roducers . In add i t ion , the economic and

p roduc t ion scenar ios were ana lyzed a t d i f fe ren t s tages , so as to

unders tand how the coun t ry made dec is ions in the face o f

numerous advers i t i es .

3 .4 Def in ing the issues of the s tudy

The da ta was co l lec ted us ing a qua l i ta t i ve ques t ionna i re app l ied to

Che f Peter Rock in Nuremberg - Germany . In add i t i on , i n te rv iews

were he ld a t the Expov in i s Bras i l f a i r , w i th research on webs i tes

and pub l i shed ar t i c les .

50

In l i ne w i th the 4 P ’s , the ques t ionna i re app l ied to Che f Pe te r Rock

compr ised the fo l low ing ques t ions :

PRODUCT :

What changes were made to the German p roduc t ion sys tem in

o rder to inc rease expor ts?

How do the w inemakers cont ro l t he qua l i t y o f t he g rapes and

the w ines?

What is t he dura t ion o f t he supp ly cont rac t be tween the

w inemakers and the fa rmers?

Are German p roducers in teres ted in p roduc ing organ ic w ines?

PROMOTION :

What i s t he p r imary in terna t iona l marke t ing s t ra tegy fo r

German wine?

PLACE:

In what t ype o f es tab l i shment i s w ine mos t ly consumed?

PRICE:

What is t he average p r i ce o f German wine and impor ted

w ine?

Both the expor ters and the eno log is ts i n te rv iewed a t Expov in i s

2009 w i l l no t be iden t i f i ed . Never the less , we prov ide be low a l i s t

o f t he ques t ions submi t ted to them:

PRODUCT

Which w ines o f the w inemakers a t t he Expov in i s a re in tended

fo r expor t and wh ich qua l i t y w ines a re on ly consumed loca l ly in

Braz i l ? Why?

51

Why don ’ t B raz i l ian w inemakers p roduce w ine in l ong- l i f e

packag ing as Ch i le does?

Which w inemak ing fea tu res o f Ch i lean w ine lead i t to be the

la rges t Sou th Amer ican expor te r and recogn ized wor ldw ide fo r i t s

qua l i t y?

PLACE

To wh ich marke t i s Ch i lean w ine mos t expor ted?

PROMOTION

What i s t he in te rnat iona l marke t ing s t ra tegy adop ted by the

Ch i lean w ine fo r conquer ing the European market?

PRICE

What i s t he average p r i ce o f Ch i lean w ine on the European

market?

4 ANALYSIS OF THE RESULTS

4.1 Proposal for enhancing the product ion organizat ion of the Braz i l ian w inegrowing industry .

In accordance w i th the ques t ionna i re on the fou r P ’s and in regard

to the changes in the German p roduc t ion sys tem so as to inc rease

expor ts , Peter Rock sa id tha t t he key landmark was the dec is ion o f

the coopera t ives to inc rease the p lan ted a rea and inves t i n

techn ica l improvements fo r cu l t i va t ing g rapes .

Over t ime, German fa rmers dec ided to make in tens ive use o f

fe r t i l i ze rs and to cons iderab ly expand the p lan ted a rea , so as to

p rov ide the la rges t poss ib le quan t i t y o f g rapes , so tha t the

government wou ld tes t fo r qua l i t y and dec ide whe ther the f ru i t was

appropr ia te fo r p roduc ing h igh -qua l i t y w ine. I n o ther words , the

52

grea te r t he quan t i t y o f f ru i t p rov ided , t he g rea te r the poss ib i l i t y o f

f i nd ing the p roper g rapes .

Fur the rmore , and s t i l l w i th regard to the p roduc t , where w ine fo r

expor t i s invo lved they choose sma l l a reas o f t he p lan ta t ions to

inves t in tens ive ly i n the Ries l ing g rape , wh ich requ i res a h igh

leve l o f qua l i t y and add i t i ve con t ro l .

The p r imary in te rnat iona l marke t ing s t ra tegy o f the German wine i s

to pub l ic i ze the qua l i t y o f the Ries l ing g rapes used to p roduce the

ma jo r i t y o f the p roduc ts fo r expor t .

In o rder to con t ro l the compet i t i ve s tand o f the German wine

aga ins t the F rench , fo r i ns tance , the coun t ry makes use o f the

government o f f i ce in Wiesbaden , wh ich i s respons ib le fo r

cont ro l l ing impor t s and expor ts us ing a quo ta sys tem.

Wi th regard to the qua l i t y o f the g rapes and w ines , we can say tha t

bo th the government and the w inemakers a re respons ib le fo r

cont ro l l ing them. In the case o f g rapes , the quant i t y o f na tu ra l

sugar they con ta in i s measured . In the case o f w ine, the quant i t y

o f add i t i ves and pump ing is con t ro l led .

There is no con t rac t be tween fa rmers and producers tha t

de termines the quan t i t y and qua l i t y to be p roduced every year ,

because the c l ima te in Germany i s ha rsh and uns tab le , wh ich

adverse ly a f fec ts produc t i v i t y fo recas ts fo r the harves ts .

Las t ly , i n regard to the p roduc t ion o f o rgan ic w ine , we can say tha t

in Germany th is t ype o f ac t iv i t y i s a t the c raw l ing s tage , a l though

Germans apprec ia te foods tu f fs f ree o f add i t i ves o r chemica l

p roduc ts .

The fac t tha t p roduc t ion o f o rgan ic w ine i s s t i l l a t the c raw l ing

s tage is due to the unfavorab le na tu ra l cond i t i ons in Germany .

There fore based on the theory o f compara t ive advan tages , we can

conc lude tha t B raz i l cou ld be a supp l ie r o f th is p roduc t .

53

As observed in the es tab l i shment where the in terv iew took p lace ,

we can see tha t the p r i ces o f w ine in Germany , bo th impor ted and

domest i c , can range f rom 1 Euro to 20 Euros . However , as a l ready

ment ioned, the average i s a round 1 .78 Euros .

Accord ing to what has a l ready been sa id , i n regard to the venue

chosen , t he supermarkets a re the es tab l i shments where the

p roduc t i s mos t ly pu rchased , wh i le the pre fer red w ine among

Germans i s spark l i ng wh i te w ine . Based on th i s fac t we can

iden t i f y an oppor tun i ty f o r B raz i l i an Sa l ton Moscate l , shou ld i t be

ab le to penet ra te th i s marke t a t a compet i t i ve p r ice i f poss ib le .

I t i s wor th po in t ing ou t tha t i n the case o f t he Ye l low Ta i l w ine and

the b lue ocean s t ra tegy , Sa l ton Mosca te l wou ld no t be in tended to

compete head-on w i th Sekt , bu t ra ther to open a new marke t in

Germany by w inn ing over t rad i t iona l consumers o f beer , as i t s

s imp le a l coho l s t ruc tu re and sweet tas te wou ld be very fami l ia r to

th i s t ype o f consumer .

Based on the in format ion ga thered in i n te rv iews a t the Expov in i s

s tands , we were ab le to reach the conc lus ions in the paragraphs

be low.

An ex tens ive l i s t o f w ines was ind ica ted as in tended fo r expor t .

However , one can see tha t severa l w ines o f exce l len t qua l i t y such

as Sa l ton Mosca te l a re on ly i n tended fo r loca l consumpt ion .

One theory beh ind th is fac t wou ld be tha t B raz i l ian w ine i s

incapab le o f be ing su f f i c ien t l y compet i t i ve in te rms o f cos ts , in

o rder to bea t t he compet i t i on in Europe . However , i f Ch i le , Sou th

A f r i ca and Argen t ina are ab le to compete on pr i ce , wha t ’ s to s top

Braz i l?

Un l i ke Ch i lean w ines , B raz i l ian w ine has never been p roduced in

long- l i fe packag ing , as th i s i s no t pa r t o f t he consumer cu l tu re in

Braz i l .

54

On accoun t o f bo th re l ie f and c l imate , Ch i lean w inemakers found

the idea l env i ronment fo r p roduc ing the i r w ines . I n add i t ion , fo r

many years loca l p roducers endeavored to ob ta in severa l

ce r t i f i ca tes o f recogn i t i on f rom European consumers in o rder to

pene t ra te and become the la rges t expor ter in La t in Amer ica to tha t

market .

As a resu l t o f t he above-ment ioned inves tments in ce r t i f i ca t ion ,

Ch i le now has the European marke t as i t s p r imary des t ina t ion fo r

expor ts , and is the South Amer ican coun t ry w i th the la rges t share

o f t ha t marke t .

Las t ly , Ch i lean w ine reaches the German market a t an average

p r ice o f approx imate ly 2 Euros . S im i la r ly , Ca l i f o rn ian , Aus t ra l i an

and South A f r ican w ines a re a l so ab le to compete a t t h i s same

p r ic ing leve l .

Wi thout go ing in to mat ters o f w inemak ing , i f Ch i le , A rgen t ina and

South A f r i ca a re capab le o f pene t ra t ing the European marke t a t

the p r ice o f 2 Euros , why cou ldn ’ t B raz i l ?

Based on the fo rego ing we can conc lude tha t B raz i l has to

o rgan ize i t s p roduc t ion sys tem in o rder to become as indus t r ia l l y

compet i t i ve as the USA, Aus t ra l i a , Ch i le and Sou th A f r i ca .

2 Study of the potent ia l consumpt ion o f the German market for severa l Braz i l ian wines .

As a l ready ment ioned , the German market i s the wor ld ’s l a rges t

impor t ing marke t and per cap i ta consumer . I t i s approx imate ly 20

l i te rs pe r pe rson, a f i gu re wh ich accord ing to AC N ie lsen w i l l on ly

tend to inc rease in years to come.

Accord ing to Aaker ’s theory (1998) and in regard to w ine b rand

loya l ty , we can see tha t the Germans a re less loya l t han

consumers in o ther coun t r ies , as they are usua l l y ve ry pr i ce -

sens i t i ve .

55

Accord ing to the A IDA mode l , one can a t t rac t the a t ten t ion o f the

German consumer us ing packag ing w i th an uncompl i ca ted bu t

exot ic and v ib ran t message. As fa r as in teres t i s concerned , t he

idea i s to a t t rac t consumers o f add i t i ve - f ree p roduc ts to o rgan ic

w ine , and t rad i t iona l beer consumers to a swee t i sh w ine w i th a

s imp le a l coho l ic s t ruc ture w i th wh ich they are a l ready fami l i a r ,

such as Sa l ton Mosca te l . The des i re and the purchase ac t ion

wou ld come in response to the o f fe r o f d i f fe ren t ia ted produc ts to

spec i f i c g roups o f consumers in Germany .

56

Tab le 8 : Per cap i ta w ine consumpt ion per coun t ry .

57

58

Source : Uni ted S ta tes Depar tment o f T reasury A lcoho l and Tobacco Tax and T rade Bureau - 2005.

As a l ready ment ioned , Germans a re very p r i ce-sens i t i ve and the

ma jo r i t y o f them, a lmos t 60%, purchase the i r w ines in

supermarke ts .

Accord ing to Ko t le r ’s t heory (2000) , the compet i t i ve s t ra tegy fo r

B raz i l i an w ine to ga in a foo tho ld in the German marke t wou ld be

tha t o f the spec ia l i s t , wh i le accord ing to Keegan (2005) , the

Braz i l i an w inegrowing indus t ry wou ld the rea f te r be capab le o f

evo lv ing f rom a domest ic to an in terna t iona l s ta tus .

Accord ing to Parsons and Dabymple (1995) , no tw i ths tand ing the

exc lus iv i t y t ha t p r i c ing may a f fo rd to a produc t , B raz i l i an w ine

mus t en ter the German marke t a t a p r i ce as compet i t i ve as the

Ch i lean and Argen t ine w ine .

For tunate ly , i n regard to management by ca tegory w i th in

es tab l i shments in Germany , on -s i t e observa t ion shows tha t in mos t

cases the re is no p re fe rence fo r d isp lay ing German w ines in the

bes t p laces on the she lves .

Wi th the excep t ion o f the Rea l supermarke t , bo th impor ted and

German w ines a re d i sp layed toge ther . The on ly concern i s to

ensure tha t the more expens ive w ines take pr ide o f p lace. Wines

in long- l i fe packag ing, i n tu rn , a re p laced on the f l oo r .

Accord ing to Aaker (2007) , the p roduc t ca tegory assoc ia ted w i th a

new bus iness i s o f enormous s t ra teg ic impor tance. For examp le ,

59

Schweppes , pe rhaps in an a t tempt to avo id compet ing w i th Coca

Co la and Peps i , pos i t i oned i t s p roduc t as a m ixed dr ink on the US

market . However in Europe , the p roduc t i s p laced on the she lves

a longs ide the so f t d r inks .

Be low one can see severa l pho tographs o f the es tab l i shments :

F igure 4 : Photo o f the Rea l supermarke t i n Nuremberg - Germany .

Source : Ju l i ana C lemente T rou la - 2009.

F igure 5 : Photo o f the A ld i supermarket i n Nuremberg - Germany .

Source : Ju l i ana C lemente T rou la - 2009.

60

Figure 6 : Photo o f the P lus supermarke t i n Nuremberg - Germany .

Source : Ju l i ana C lemente T rou la - 2009.

F igure 7 : Photo o f the Norma supermarke t in Nuremberg -

Germany .

Source : Ju l i ana C lemente T rou la - 2009.

61

Tab le 9 : P r ice survey in the supermarke ts o f Nuremberg .

Source : Ju l i ana C lemente T rou la - 2009.

62

4 .3 Def in ing a market ing st ra tegy for the Sa l ton Moscate l spark l ing and organic w ines .

The essence o f the market ing s t ra tegy i s t he pursu i t o f a po in t o f

d i f fe rence in re la t ion to the compet i t ion , by choos ing the marke t ,

p roduc t , p r i ce , image and d is t r i bu t ion w i th a v iew to exc lud ing o r

p reven t ing copycats . One can say tha t s t ra teg ic market ing

endeavors to cons tant ly opera te in tune w i th the purpose o f t he

p ro jec t and the o rgan iza t ion ’s overa l l ta rge t .

The essen t ia l components o f s t ra teg ic marke t ing a re :

segmenta t ion , pos i t i on ing and se lec t ing the ta rge t marke t

( ta rget ing ) .

Je rome McCar ty (1960) once deve loped the concep t o f the fou r

P ’s , wh ich i s i n l ine w i th the idea o f the market ing mix . The 4 P ’s

a re : p roduc t , p r ice , p romot ion and p lace.

Ana lyses are a lso ca r r ied ou t o f t he sec to r and o f the company ’s

in te rna l compet i t i ve ab i l i t y as an organ iza t ion , so as to de f ine the

pos i t i on ing o f t he produc t i n the marke t . Wi th in th i s concept we

can ment ion the SWOT ana lys i s tha t dea ls w i th the s t reng ths ,

weaknesses , oppor tun i t ies and th rea ts to a new p roduc t o r p ro jec t

The marke t ing mix chosen , i n tu rn , enab les the marke t ing a rea to

in t roduce a new idea , cons tant ly con t ro l l i ng and o rgan iz ing i t se l f

so tha t i t may a t ta in i t s ob jec t i ve . Severa l ac t iv i t i es can be

under taken, such as adver t i s ing , p romot ion , ca tegory management ,

d issemina t ion on the web and pub l i c re la t ions .

The concepts ment ioned above wou ld be used to c rea te the

s t ra teg ic marke t ing p roposa l f o r B raz i l i an o rgan ic w ines . In

add i t i on , the char t be low i l l us t ra tes the SWOT Ana lys is fo r t he

p roduc t :

63

Char t 9 : SWOT ana lys i s fo r the "New Wor ld " p layers .

S W O T B r a z i l A u s t r a l i a S o u t h A f r i c a C h i l e U S A ( C a l i f o r n i a )S t r e n g t h s Abundant and

unexplored natural resources

Cheap labor Economies of

scale

Abundant natural resources

High technology and coordination

Economies of scale

Cheap Labor Favorable climate

High technology and coordination

Cheap labor Favorable

climate

Abundant natural resources

High technology and coordination

Economies of scale

W e a k n e s s e s Lack of coordination and quality control

Few production incentives

Expensive labor Lack of coordination and quality control

Institutional problems

Small scale Limited natural

resources

Expensive labor Low-quality

grapes

O p p o r t u n i t i e s Exotic and sustainable culture aligned with the country

Exotic and sustainable culture aligned with the country

Exotic and sustainable culture aligned with the country

Holds Kupay certification

Country’s economic strength

T h r e a t s Unable to obtain recognition of quality for its product, and instability of the dollar

Produces a very expensive product

Unable to resolve its political and institutional problems

Unable to produce on a large scale, and instability of the dollar

Produces a very expensive product

Source : Ju l i ana C lemente T rou la - 2009

The Braz i l ian w inegrow ing indus t ry has enormous po ten t ia l fo r

exp lo i t ing the marke ts o f deve loped count r ies us ing s t ra teg ies

focused on low cos ts and economies o f sca le . Fur the rmore , t he

coun t ry can focus on s t ra teg ies fo r d i f f e ren t ia t i ng i t s p roduc t , such

as , fo r examp le , t he p roduc t ion o f o rgan ic w ines tha t a re

pos i t i oned in the marke t as “exo t i c ” o r even “sus ta inab le ” .

The concept o f exo t i c o r sus ta inab le i s i n t r ins i ca l l y l i nked to

Braz i l i an cu l tu re , wh ich fac i l i ta tes the communica t ion o f a

Braz i l i an b rand w i th th is p roposa l . In add i t i on , B raz i l i s now seen

in terna t iona l ly as the “wor ld ’s lung” .

In sp i te o f the favorab le c l imate and abundan t wa te r , B raz i l shows

a ma jo r weakness tha t does no t spec i f i ca l l y i n f l uence the

p roduc t ion o f o rgan ic produc ts . Th is weakness a r i ses f rom the fac t

64

tha t B raz i l cur ren t l y needs to impor t 80% o f the fe r t i l i ze r used in

i t s ag r icu l tu ra l p roduc t ion .

In tha t case we can the re fo re asser t tha t as a means o f b reak ing

the parad igm, and in sp i te o f a l l the d i f f i cu l t ies o f ce r t i f i ca t ion in

te rms o f c lean l iness , o rgan iza t ion , e t c . , t he p roduc t ion o f o rgan ic

w ines i s h igh ly advan tageous fo r B raz i l .

A t the same t ime , an easy way o f d i vu lg ing Braz i l i an w ine so as to

in i t i a l l y penet ra te the market , wou ld be to in t roduce i t as the

compan ion fo r the Braz i l i an bee f se rved in ba rbecue res tauran ts

wor ldwide.

F igure 8 : Market ing p roposa l fo r B raz i l i an o rgan ic w ine .

Source : Ju l i ana C lemente T rou la - 2009.

K e y t o t h e i l l u s t r a t i o n

P r o d u c t : o r g a n i c w i n e i n a l o n g - l i f e c a r t o n / t e t r a p a c k

P r i c e : c o m p e t i t i v e a g a i n s t o t h e r i m p o r t e d w i n e s

P l a c e : c o u n t r i e s w h e r e w i n e c o n s u m p t i o n i s a p p r e c i a t e d , e . g . G e r m a n y

P r o m o t i o n : p r o m o t e t h e p r o d u c t a t y o u t h p a r t i e s a n d B r a z i l i a n b a r b e c u e r e s t a u r a n t s

65

S e g m e n t a t i o n : d e m o g r a p h i c o r p s y c h o g r a p h i c

T a r g e t m a r k e t : y o u n g p e o p l e o r t h o s e w h o a p p r e c i a t e o r g a n i c p r o d u c t s

P o s i t i o n i n g : e x o t i c , s u s t a i n a b l e , y o u t h f u l q u a l i t y i m a g e a t a c o m p e t i t i v e p r i c e

Sa l ton Moscate l spark l i ng w ine has a grea t chance o f captur ing

the German market , as i t has an exce l len t swee t f l avor and i t i s

qu i te s imple and fami l i a r t o the tas te o f t rad i t iona l German

consumers o f beers .

In add i t i on , a tas ty , qua l i t y w ine l i ke Sa l ton Moscate l cou ld open

the doors o f the German marke t t o impor t o the r Braz i l i an p roduc ts ,

inc lud ing food and beverages .

A l though t rad i t iona l l y recogn ized as an expor te r o f raw mater ia ls ,

B raz i l mus t a l so revea l t o the wor ld i t s qua l i t y p rocessed foods

and beverages , thereby exp lo r ing new marke t n i ches where i t s

p roduc ts exh ib i t h igher added va lue .

Respond ing to the ques t ions f rom Aaker (2005) we can d raw the

fo l low ing conc lus ions :

I s t he marke t an a t t rac t i ve one in te rms o f s i ze and g rowth

poss ib i l i t i es?

Yes . The German marke t i s one o f t he wor ld ’ s l a rges t impor ters

o f w ine and the consumpt ion o f t h i s beverage w i l l t end to

inc rease in the years to come.

I s t he compet i t i on s t rong? Who a re the marke t p layers?

Yes , the re i s s t rong compet i t ion . Bu t the organ ics n iche , fo r

examp le , i s s t i l l un tapped . The majo r p layers tha t compete w i th

Braz i l a re : Ch i le , the USA, Sou th A f r i ca and Aus t ra l i a .

Can the company add va lue to the marke t?

Yes , as a l ready ment ioned, o rgan ic p roduc ts a re he ld in h igh

es teem in th is marke t . Bes ides , Sa l ton Mosca te l , w i th i t s s imp le

66

sweet i sh f l avo r , s tands a good chance o f p leas ing German

pa la tes .

A re the re bar r ie rs i n tha t marke t?

Yes , Germany uses the government o f f i ce in Wiesbaden , wh ich

is in charge o f con t ro l l i ng impor ts and expor t s us ing quo tas but

s t i l l t he coun t ry impor ts a good va r ie ty o f w ines f rom Amer ica .

F igure 9 : Summary o f the marke t ing proposa l f o r Mosca te l w ine

Source : Ju l i ana C lemente T rou la - 2009.

K e y t o t h e i l l u s t r a t i o n

P r o d u c t : A s t i - t y p e S a l t o n S w e e t S p a r k l i n g M o s c a t e l

P r i c e : c o m p e t i t i v e a g a i n s t o t h e r i m p o r t s

P l a c e : c o u n t r i e s w h e r e w i n e c o n s u m p t i o n i s a p p r e c i a t e d , e . g . G e r m a n y

P r o m o t i o n : d i v u l g e t h e p r o d u c t a t p a r t i e s

S e g m e n t a t i o n : d e m o g r a p h i c o r p s y c h o g r a p h i c

T a r g e t m a r k e t : c o n s u m e r s o f s p a r k l i n g w i n e s

P o s i t i o n i n g : e x o t i c , s u s t a i n a b l e , q u a l i t y i m a g e a t a c o m p e t i t i v e p r i c e

67

In add i t i on to the Ye l low Ta i l case s tudy , an a t tempt was made to

d ivu lge Braz i l i an w ines in an uncompl i ca ted and innova t i ve

manner :

Sa l ton Mosca te l has an uncompl i ca ted , smooth and sweet i sh

f l avor tha t may be apprec ia ted by t rad i t iona l consumers o f

German beers .

Organ ic w ine , i n tu rn , i s under tapped , bes ides the fac t the

German consumer i s more than a l i t t l e in te res ted in

p reserva t i ve - f ree p roduc ts . Fur the rmore , we came up w i th a

young , co lo r fu l and uncompl i ca ted packag ing , i n tune w i th

the image o f B raz i l .

In regard to b rand loya l ty and p r i c ing , we be l ieve tha t the bes t

s t ra tegy wou ld be to launch the w ine w i th a compet i t i ve pr i ce and

a dar ing image , so as to cap t i va te those consumers who a re not

a lways loya l to t rad i t i ona l w inemakers , wh i le cap tu r ing new

consumers who prev ious ly on ly d rank beer .

One can say tha t t he s t ra teg ic pos i t i on ing o f B raz i l i an o rgan ic

w ine wou ld be tha t o f a spec ia l i s t s ince i t works in a spec i f i c

market n i che, wh i le the fundamenta l c r i t i ca l fac to r tha t wou ld

mot i va te the consumer to t r y th i s new w ine wou ld be innovat ion ,

hea l th and sus ta inab i l i t y .

Las t ly , the sugges t ion i s tha t a focus group type o f research be

ca r r ied ou t a f te rwards to con f i rm the theor ies o f the c r i t i ca l fac to rs

in f luenc ing the w ine purchas ing p rocess . Never the less , i t i s

sugges ted tha t p r i ce and tas te are the de te rmin ing fac to rs in

Germany .

68

5 FINAL REMARKS

Th is s tudy has endeavored to iden t i f y an in te rna t iona l marke t

n iche fo r some Braz i l i an w ines . These a re : Sa l ton Mosca te l by

V in íco la Sa l ton and the o rgan ic w ines .

The German market has shown to be ve ry recep t i ve in the

fo l low ing aspec ts :

I t i s among the wor ld ’ s l a rges t consumers o f a l coho l and

impor te rs o f w ine .

In sp i te o f the presence o f many European w ines , i t s t i l l i s a

g row ing marke t .

Consumpt ion o f w ine has no t dec l ined, even in t imes o f

c r is i s , s ince consumers swi tch to cheaper b rands .

Organ ic p roduc ts a re h igh ly apprec ia ted in Germany .

Nuremberg , where the research was ca r r ied ou t . Th is c i t y

hos ts the B io fach.

Sweet i sh spark l ing w ines such as the Sa l ton Mosca te l s tands

a good chance o f conquer ing the pa la te o f t rad i t i ona l German

consumers o f beer .

A qua l i t y w ine f rom Braz i l may be the showcase fo r many

Braz i l i an foods and beverages .

For a w ine to be accep ted g loba l l y , i t f i r s t needs to be tes ted

and approved in the mos t compet i t i ve market o f a l l : Europe .

Exp lo r ing in terna t iona l n i ches has been shown as an impor tan t

s t ra tegy in recen t decades , no t on ly because i t enab les the

deve lopment o f new consumer marke ts , bu t a l so because i t

ensures su f f i c ien t c r i t i ca l mass fo r companies to compete w i th

la rge g loba l en terp r i ses , wh ich in the ma jor i t y o f the cases , have

the i r o r ig ins in r i ch count r ies .

69

Severa l g loba l t rends were shown in regard to agr ibus iness

p roduc t ion sys tems and a lso the p r inc ipa l d i f f i cu l t i es tha t

spec i f i ca l l y t he Braz i l ian w inegrow ing indus t ry faces .

As has a l ready been descr ibed w i th regard to the German

winegrow ing indus t ry , t he re a re severa l c ruc ia l d i f fe rences

between the p roduc t ion sys tems o f t he two coun t r ies tha t need to

be ad jus ted in o rder to improve the qua l i t y o f the Braz i l ian

p roduc t .

Improvements , bo th in the pos i t i on ing w i th in the in te rna t iona l

market and in the o rgan iza t ion o f the Braz i l i an agr ibus iness

sys tem are c ruc ia l , so tha t the coun t ry can f i na l l y become the

“wor ld ’s g ranary ” .

Because o f i t s enormous agr ibus iness power , and w i thou t go ing

in to de ta i l s abou t w inemak ing, Braz i l has shown to be fu l l y

capab le o f compet ing w i th New Wor ld p roducers on the

in terna t iona l marke t . In o ther words , i f Ch i le , A rgen t ina and Sou th

A f r i ca can pene t ra te the German marke t a t the p r ice o f 2 Euros ,

the re i s no reason why the Braz i l i an p roduc t canno t ach ieve th is

leve l o f p r i c ing .

By in t roduc ing the o rgan ic w ine and the Sa l ton Mosca te l spark l i ng

w ine , Braz i l can use the b lue ocean s t ra tegy to meet a pen t -up

demand fo r sus ta inab le and hea l th ie r p roduc ts in the f i r s t case,

and in the second case , w in over the t rad i t i ona l German consumer

o f beer .

Never the less , by us ing the examp le o f German coord ina t ion and

cont ro l and the exp lo ra t ion o f the marke t n iche fo r the o rgan ic

p roduc ts and the Sa l ton Moscate l spark l ing w ine , Braz i l ian w ine

has an exce l len t chance o f inc reas ing i t s marke t share w i th in the

g loba l con tex t .

70

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