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International marketing, national competitiveness, strategic decision-making, wine.

Undergraduate and MBA.

The nationally important Georgian wine industry by 2008 was in a deep recession due largely to the continuing 2006 Russian wine embargo, prior to which Russia had been the largest export market for Georgian wines. Second World War-era Georgian wineries such as Shavteli (disguised), in the historic Racha-Lechkumi wine-producing region, were disadvantaged due to aging facilities, lack of tourist infrastructure, and inadequate capital to make needed changes to compete in the global markets for emerging economy wines. All nearby wineries faced continuing operating deficits, high inventory levels, and could lose much of their aging wine inventory to oxidation if they could not quickly sell more wine or convert the wine to brandy. To avert becoming another defunct producer, Shavteli needed a strategy. Industry observers were divided about whether Shavteli and its sister Georgian wineries should continue operating independently, seek government support, or form a marketing association to create new export demand. Students need to prepare a strategic plan for Shavteli and the Georgian wine industry.

Students should develop well-supported recommendations for competitive strategies in an emerging economy. Students should use strengths, weaknesses, opportunities, and threats and country competitiveness analyses to ascertain vision and mission, segmentation, targeting, positioning, and alliance strategies for international markets.

Teaching notes.

Wine choices are not always fully understood by academic researchers or the industry. This paper aims to outline and test a theoretical model proposing that wine consumption may be dependent on differences in consumer expertise, the hospitality situation, characteristics of the wine itself and an interaction of these variables.

Three empirical studies (total sample size = 356) tested these theoretical propositions. Consumers with varying levels of wine knowledge were presented with experimental vignettes showing videos of wine opening and pouring and were asked to pair wines with hospitality situations.

Study 1 found that consumers with low product knowledge were more sensitive to hospitality situations and extrinsic product attributes (closures) than were the experts. Study 2 found that wine hospitality situations fall into three predicted categories, namely, food, friends and formality, although contrary to prediction, the presence of food was the weakest predictors. Study 3 demonstrated the robustness of the three-dimensional structure of wine hospitality situations.

These studies provided important practical information because targeting various market segments requires the industry to know what product attributes are favored by different groups of consumers different situations.

Previous researchers have discussed the difficulty of measuring consumption situations. By limiting these studies to wine consumption within hospitality situations, the authors learned much about how consumers’ characteristics, product attributes and the situations interact to influence not only product assessments but also choices.

Wine tasting is an integral method for engaging consumers. Producers go to great lengths to educate consumers on evaluating quality based on taste and aroma. Understanding the sensory and perceptual processes of wine tasting may offer insight into how consumers at different levels of wine expertise use their senses to evaluate wine.

This study used functional near-infrared spectroscopy to examine processing in the frontal lobe of the brain during wine tasting and aroma evaluation. Sixty subjects evaluated the tastes and aromas of wine samples with various levels of sweetness, whereas 16 defined areas of their frontal lobes were measured with functional near infrared measurement.

The subjects’ orbitofrontal cortices were activated during both olfaction (smelling) and tasting. Further, larger areas of the frontal lobes showed significant activation during the olfaction task than during the tasting task. The level of the subjects’ wine knowledge did not predict differences in neural processing when participants evaluated aroma of wine; however, subjects with higher wine knowledge did show significantly higher activation in specific frontal lobe regions when tasting. Differences in levels of product involvement among the subjects were not significant for the tasting task, but were significant for the olfaction task.

Developing a better understanding of the biological processes involved in tasting may lead to understanding the differences in consumer preferences for wine. This, in turn, may assist tasting room managers to adjust their tasting procedure to be tailored to consumer-specific needs.