CROSS CULTURAL CHALLENGES IN THE CROSS CULTURAL CHALLENGES IN THE CROSS CULTURAL CHALLENGES IN THE CROSS CULTURAL CHALLENGES IN THE EUROPE WIDE MARKETING: EUROPE WIDE MARKETING: EUROPE WIDE MARKETING: EUROPE WIDE MARKETING: THE WINE INDUSTRY THE WINE INDUSTRY THE WINE INDUSTRY THE WINE INDUSTRY FRANCE FRANCE- - HUNGARIA HUNGARIA- HUNGARIA - BULGARIA BULGARIA BULGARIA FRANCE FRANCE HUNGARIA BULGARIA
SUMMARY I. The Wine Industry II. Countries analysis 1. The Hofstede model 2. The French wine industry 3. The Hungarian wine industry 4. The Bulgarian wine industry III. Comparison of the 3 countries IV. SWOT analysis
I. The Wine Industry 1. Wine grape : species and varieties 2. Cultivation 3. Wine regions : varieties 4. Choosing a grape vineyard location 5. The uses of wine 6. The present and future of the wine sector in Europe 7. The easternalization of the EU wine market
Wine Grape: Species and Varieties Thousands of grape varieties in wine industry � Color � Size � Shape of berry � Juice composition (including flavor) � Ripening time � Disease resistance. Vitis Vinifera? Variability in Color, taste, flavor
Location: Where should we plant? Sunlight Flora and fauna Soil and the lay of the land Climate
Wine Regions: Varieties Very important part in the label of wines. � The region of production � Maturity of the fruit � Variety of grape � Year of production Also differentiated by color, sweetness, and aroma. In Europe REGION
The Uses of Wine Apperitif (Appetizer Wines) Red Dinner Wines White Dinner Wines Sparkling Wines Table Wines Dessert Wines
European Union The European Union (EU) leads the wine sector in terms of: a) Production : European vineyards about 45% 60% of world wine production b) Consumption : Almost 60% of world consumption c) Exports and Imports : Both world leading exporter and importer. Wine: Importance in final agricultural output + Community legislation : CAP � “Quality wines produced in specific regions“ � “Table wines".
II. Countries Analysis 1. The Hofstede model 2. The French wine industry 3. The Hungarian wine industry 4. The Bulgarian wine industry
1. The Hofstede Model • This model, created in 1967 by professor Hofstede is aimed at understanding better the culture of an other country. • “Geert Hofstede's research gives us insights into other cultures so that we can be more effective when interacting with people in other countries.” • Model based on 5 indexes which are: - the power distance index (PDI) - Individualism (IDV) - Masculinity (MAS) - Uncertainty avoidance index (UAI) - Long-term orientation (LTO)
France
Hungary
Bulgaria 100 80 60 40 20 0 PDI IDV MAS UAI
2. The French wine industry •Background and Regions •General aspects of wine in France •Trends •Economical aspects
Background & Regions • France as a wine producing country • The AC (Appellation Controlee system) • The main regions ( Champagne, bordeaux… etc)
Trends • Consumption in France • New tendencies • Production • Quality-Imports-Exports-Marketing
Economical Aspects • Nominal Unit price • Offer-demand • Price declining • Effects of new competitors
3.The Hungarian wine industry The Sector • Introduction: - Communism Era with Big Plants, - Modern Methods and Tradition, - Core of Hungarian Culture since 1000 years. • Economical Aspects: - Production in 2004: 4.5 million hectoliters (Increasing), - Exports in 2004: 700,000 hectoliters (Decreasing) • Political Issues: - Not enough Financial supports, - Not enough Marketing campaigns,. • General Problems: - Quality should be much higher, - Lack of Marketing and Promotion .
The Market • The Impact of Hungarian Wine in Different Countries: - Scandinavian, - American, - UK. • The Impact of the EU Accession: - Quality, - Accession to foreign Markets. • Consumer Behaviour: - Spanish wines such as Sangria, - Hungarian wines more and more « en vogue », - Social Criterion, - Mid-to-low category of Hungarian wines are threatened
•The Different Wine Producing Regions: 21 wine regions
3.The Bulgarian wine industry • Bulgaria is probably the oldest wine producing country:some wine was produced there between 6000 and 3000 years before JC • With a hot climate and a varied geography, Bulgaria produces quality wines and is generally seen as the most trustworthy of the Eastern countries in terms of wine production • Under Communism: the 5th producing country, and the 2nd exporting country
� Consumption and production - An average of 5 litres per person and per year - Local « Quality Wines » bottles between 2 and 4 euros - In 2002, Bulgarian vineyard = 145 200 hectares (ie bigger than the Australian one!) - Production in 2002 = 1 982 158 hectolitres. Average yield = 17, 29 Hl per hectare (a 4% increase since 2001) - More than 200 types of wines are produced: 24% as « Quality Wines », 76% as « Domestic Wines »
BULGARIAN VARIETIES OF WINE OTHER VARIETIES � Pamid � Cabernet Sauvignon � Mavrud � Merlot � Gamza � Pinot Noir � Chiroka melnishka loza (Melnik region) � Chardonnay � Rubin � Rkatziteli � Muscat Ottonel � Dimyat � Traminer � Misket � Riesling � Vratchanski Misket
5 main producing regions: � North region � The East region and the Black Sea’s shore � The Under-Balkanises region (Centre) The South- West region � � Exportation : 70% of the country’s industrial production � The South region 785 470 hectolitres in 2002 � Importation :40 282 hectolitres in 2002
III. Comparison of the 3 countries
Political France Hungary Bulgaria - Diplomatic dinners, meetings: - Not a priority for the - The fall of the Iron Curtain wine is one of the pride of Hungarian government, and the privatization of the France. - No real finacial support, caves: bad influence on the - No budget for wine exports. marketing. Economical France Hungary Bulgaria - Production is growing - 2004’s production is - Exports: from 140 million (5,199,930 metric tons). increasing (4.5 million euros in 1998 to 64 million - Exports is falling (913.4 hectoliters). euros in 2001(70% of its million bottles). - 2004’s exports are declining industrial production of wine - Consumption is declining (700,000 hectoliters). (785,470 hectoliters in 2002, ie (57.17 liters per capita per a 2% decrease)). annum) - Imports: increased between 2001 and 2002 (40,282 hectoliters in 2002, ie two times and a half more than the previous year).
Social France Hungary Bulgaria - Usually young French people - Wine is more and more “en - Main alcoholic beverage: beer. prefer beer. vogue” with Hungarian - But thanks to it strong image - And later they prefer to drink consumers. of wine producing country, the wine. wine consumption in Bulgaria is slowly but steadily growing. Technological France Hungary Bulgaria - The infrastructures are very - Modern methods are associated - Privatization has also had a modern. At the peak of its area. with traditional ones which give very good effect: it enables to the Hungarian wine its Bulgarian wine growers to quality. invest in good quality equipment as well as to introduce new ways of producing wine.
Legal France Hungary Bulgaria - “Appellation d’Origine - Entrance in the European Union: - A law about wine and spirituous Controllée”: guarantee the quality impact on the quality of the beverages is applied since January of French wine. Hungarian wine through EU 2001: according to this new - Custom duties, product safety quality standards. regulation, Bulgarian wines are and intellectual property: protect - Abolition of the custom duties classified in different categories. French wine. between the European countries.
The Hofstede analysis for our 3 countries: France/ Bulgaria
France/ Hungaria
Bulgaria/ Hungaria
IV. SWOT analysis
France • Strenghts – Famous, well known • Weaknesses – Marketing – Knowledge of foreign customer markets – Distribution channels – High Prices • Opportunities – EU enlargement (Single market) – Attractiveness of western products • Threats – Competition of new member states
Hungary • Strenghts – Quality and low prices – Modern techniques and EU standards – Foreign investments • Weaknesses – Marketing and promotion world wide – No subsidies from the State – Small sized national market – Hungarians habits • Opportunities – Purchasing power of Hungarians – EU accession • Threats – Competition of foreign quality wines
Bulgaria • Strenghts – Culture and Know-how – Modern infrastructures and Potential of production • Weaknesses – Not yet an EU member state – Lack of image – Bulgarians purchasing power and Bulgarians habits • Opportunities – Future EU accession – Foreign investments – Distribution networks – Consumer market potential • Threats – Social and Economical Bulgaria background – Competition of the New world producers
Conclusion
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