Marketing Focus in the Chilean Wine Industry

Abstract

This paper presents the findings of a research project designed in part to better understand the competitive priorities (CPs) and key decision areas (KDAs) supporting manufacturing strategies in the Chilean wine industry and how these KDAs and CPs contribute to obtaining a competitive advantage. The paper also presents the relation of competitive priorities to recent export price and export performance, indicators associated with adequately meeting consumer demands. A brief summary is presented of a survey applied to 49 Chilean wineries. The results indicate that firms rank as their highest CPs both the production of high quality wine to meet final consumer demands, and the reliability of their supply of a high quality product to meet the demands of distributors. The results are consistent both with the characterisation of the Chilean wine industry as oriented to export markets and responsive to buyer preferences, and with other research indicating that product quality and product condition are the highest ranked attributes for Chilean wine purchases by US importers. Per-litre export prices and export growth rates are used to assess how well the emphasis on product quality translates into firm performance. Controlling for export volume, the evidence supports the hypothesis that firms putting a greater emphasis on product quality receive higher average prices. KDA rankings confirm that the industry's decision-making orientation is consistent with its emphasis on the competitive priorities of product quality and dependability.