QUESTIONS WITH SOLUTIONS GRADED A+
◉ The general factors affecting demand for wine. Answer: - Social
- Economic
- Legislative
- Political
◉ List major social factors affecting demand for wine. Answer: -
Change in consumption habits
- Change in consumer preferences
- Change in reputation
- Change in spending patterns
◉ Describe how global wine consumption habits have changed since
2001. Answer: - Rapid growth in the first part of 2000
- Fall after 2008 financial crisis as many consumers reduce spending on
non-essential products
- Slight decline in recent years and due to remain stable to 2021
- Strong growth in sparkling wine sales
,◉ Top five countries for total wine consumption in 2017. Answer: -
USA
- France
- Italy
- Germany
- China
◉ Explain the increasing wine consumption in USA in the last 20-30 yr.
Answer: - Increasing globalization of the food and drinks industry
- Consumers more able and willing to embrace new tastes
- Increases and improvement in wine production in the domestic market
◉ Explain the increasing wine consumption in China. Answer: -
Growing middle class showing wealth and status - move away from
local drinks
- Aspire to drink imported wine
- Bilateral trade agreement with Australia, Chile etc
◉ Give possible reasons for falling wine consumption in traditional
wine-drinking countries. Answer: - Younger people drinking less wine:
old fashioned; less time in bars, more on social media
- Health concerns: mostly due to government campaigns, e.g., Loi Evin
in France
,- Changes in lifestyle: less time for longer meals, less lunchtime
drinking
- Reduced availability of cheap wine: reduce over-production, some
consumers switch to cheaper alcoholic drinks
◉ List a few major changes in consumer preferences in recent years.
Answer: - Rose and Prosecco become popular
- Increased demand for lower-alcohol wines
- Medium-sweet German wines and fortified wines going out of fashion
◉ What factors could influence a wine's reputation?. Answer: - Good
reviews from leading publications and critics
- Online influencers and KOLs
- Presence in popular culture, e.g., films television series, music lyrics or
celebrity lifestyle news
- Peer opinions
◉ What are price-sensitive markets? Give examples. Answer: Markets
where consumers are unwilling to pay more than the lowest price
possible for the style of wine they want to buy. E.g., Germany, UK
◉ What can producers do to retain customers in price-sensitive
markets?. Answer: - Competition is fierce - reduce price or simply
choose not to sell
, - Reluctant to pass on increases in production costs to consumers
- Try to build up 'brand loyalty'
◉ Explain 'premiumization'. Answer: - Consumers are increasingly
willing to pay more for individual bottles of wine, often because they are
buying less wine by volume
- Happens in USA even in UK
◉ List major economic factors that influence demand for wine. Answer:
- Strength of economy
- Fluctuations in currency exchange
- Changes to the market
◉ Give examples in which the strength of economy affect wine demand.
Answer: - 2008 financial crisis: champagne demand falls, Prosecco
grew; trade wine for beer, cider etc
- Chinese economy growing: emerging middle class chasing aspirational
wines
◉ In what kind of market does currency fluctuation have the most
significant impact on the demand for wine?. Answer: Price-sensitive
market