Case study assignment 5

Case study assignment 5 - Case study assignment 5 1....

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Case study assignment 5 1. Dessert wine in the industry is about a 12% of the 716 million gallons sold in 2006. The industry itself is a $28 billion industry. E&J Gallo Winery is the largest producer of wine in the world. Dessert wine is 7.03% of the sales that E&J Gallo make. The dessert wines because of their higher alcoholic content were subjected to be purchased more frequently without much advertising. This led E&J Gallo to really decrease their quality of its products and gain a piece of the 10% of the profit margins that was available. The Thunderbird and Night Train brands do not have redeeming features because they have been associated with the wino, as they would trash the streets with empty bottles to create awareness. These brands are made to lower income, placed in the right zip codes, need no advertising, and are cheap to produce. The demand of the population cannot redeem the brands either because of the placement and popularity in the target markets. 2. The key success factors in the dessert wine segment are the good profit margins, easy coverage for fixed costs and they ensure a decent profitability. They are also successful because of the cheap product, lack of marketing, and promotion. The strategic fit between Gallo’s fortified wines and other wines, is simply that Gallo’s fortified wines appeal to a
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This note was uploaded on 03/27/2012 for the course BUS 421GS taught by Professor Dr.nathanhimelstein during the Fall '11 term at Thomas Edison State.

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Case study assignment 5 - Case study assignment 5 1....

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