CROSS CULTURAL CHALLENGES IN THE EUROPE WIDE MARKETING: THE WINE INDUSTRY 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

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 I.The Wine Industry

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

Sunlight Flora and fauna Soil and the lay of the land Climate Location: Where should we plant?

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. REGIONIn Europe

The Uses of Wine Apperitif (Appetizer Wines) Red Dinner Wines White Dinner Wines Sparkling Wines Table Wines Dessert Wines

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". European Union

1.The Hofstede model 2.The French wine industry 3.The Hungarian wine industry 4.The Bulgarian wine industry II.Countries Analysis

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) 1. The Hofstede Model

France

Hungary

Bulgaria

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

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. 3.The Hungarian wine industry

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

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 3.The Bulgarian wine industry

 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 = hectares (ie bigger than the Australian one!) - Production in 2002 = 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  Pamid  Mavrud  Gamza  Chiroka melnishka loza (Melnik region)  Rubin  Dimyat  Misket  Vratchanski Misket OTHER VARIETIES  Cabernet Sauvignon  Merlot  Pinot Noir  Chardonnay  Rkatziteli  Muscat Ottonel  Traminer  Riesling

5 main producing regions:  North region  The East region and the Black Sea’s shore  The Under-Balkanises region (Centre)  The South- West region  The South region  Exportation : 70% of the country’s industrial production hectolitres in 2002  Importation : hectolitres in 2002

III.Comparison of the 3 countries

Political FranceHungaryBulgaria - Diplomatic dinners, meetings: wine is one of the pride of France. - Not a priority for the Hungarian government, - No real finacial support, - No budget for wine marketing. - The fall of the Iron Curtain and the privatization of the caves: bad influence on the exports. Economical FranceHungaryBulgaria - Production is growing (5,199,930 metric tons). - Exports is falling (913.4 million bottles). - Consumption is declining (57.17 liters per capita per annum) ’s production is increasing (4.5 million hectoliters) ’s exports are declining (700,000 hectoliters). - Exports: from 140 million euros in 1998 to 64 million euros in 2001(70% of its industrial production of wine (785,470 hectoliters in 2002, ie a 2% decrease)). - Imports: increased between 2001 and 2002 (40,282 hectoliters in 2002, ie two times and a half more than the previous year).

Social FranceHungaryBulgaria - Usually young French people prefer beer. - And later they prefer to drink wine. - Wine is more and more “en vogue” with Hungarian consumers. - Main alcoholic beverage: beer. - But thanks to it strong image of wine producing country, the wine consumption in Bulgaria is slowly but steadily growing. Technological FranceHungaryBulgaria - The infrastructures are very modern. At the peak of its area. - Modern methods are associated with traditional ones which give to the Hungarian wine its quality. - Privatization has also had a very good effect: it enables Bulgarian wine growers to invest in good quality equipment as well as to introduce new ways of producing wine.

Legal FranceHungaryBulgaria - “Appellation d’Origine Controllée”: guarantee the quality of French wine. - Custom duties, product safety and intellectual property: protect French wine. - Entrance in the European Union: impact on the quality of the Hungarian wine through EU quality standards. - Abolition of the custom duties between the European countries. - A law about wine and spirituous beverages is applied since January 2001: according to this new regulation, Bulgarian wines are classified in different categories.

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

CASTRO Leopoldo FERRARA Elias FISCHER Mathieu GAILLY Maxime MATHIEU Marie SAKI Stéphanie Thanks to: Mr David CHELLY Me Mary Mc KINLEY Mr François DESCHEEMAEKERE Mr Geert HOFSTEDE