Promotion entails not just advertisement but also branding while pricing refers to balancing what the consumer is prepared to exchange in relation to production costs. Placement in a globalized environment creates the greatest challenge of retailing the product.
Wine Production. Wine production in Europe has traditionally been labor-intensive, based on the fragmented production of grapes by small-sized farmers spread over a wide area. These are dependent on a long chain of producers, distributors and marketing agents and are thus impervious to the needs of the consumer, a cardinal sin in product marketing. On the other hand new world wine growers, in the United States, Australia, Argentina, Chile and South Africa, have large land holdings averaging 158 hectares compared to 1 acre in Europe and with mechanization and use of modern techniques have full control of the production, supply and distribution chain thereby being responsive to product development based on consumer preference. Modernization of production has been rejected by French wine growers who do not want to lose them, “poetry of wine.”
Product and Price Differentiation through Packaging. New world wine producers also made innovations in packaging with the half-gallon flagon in America and collapsible plastic bags in Australia which contributed to cost-cutting, reduced transportation load in ships and eased storage in refrigerators. This enabled raising the market share with European wine producers sticking to the bottle.
The flexibility of Product. Australian and American wine producers have displayed greater flexibility in product development focusing on the change in demand to premium and super-premium brands, switch from red to white wine and vice versa based on health benefit perception of the consumer, fashion trends and even preference based on a variety of grapes. This has been achieved by cultivating the identified variety in larger acreages. Old world wine growers did not have this flexibility as the land continued to be scarce as also its use for growing grapes was regulated.