Economic incentives for vertical product differentiation in the Brazilian wine sector
Autor(a) principal: | |
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Data de Publicação: | 2011 |
Outros Autores: | , , , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://scielo.pt/scielo.php?script=sci_arttext&pid=S0873-74442011000300006 |
Resumo: | While wine is traditionally viewed as a product typical of European and Mediterranean wine producing countries, in recent decades vineyards have developed in all continents. Consequently, wines have been classified as coming from the Old World (traditional European and Middle Eastern producers), and New World (countries who developed their tradition in wine making more recently). Apart from individual taste, the marketing strategy adopted in these two origins clearly differentiates: based largely on the place of origin in the Old World by means of Appellation of Origin labelling; and based predominantly on the vine grown in the New World. Nonetheless, quality segmentation seems to have become more frequent in the New World, as it allows producers to compete in different segments of the market. In this work, we use data from Brazilian wine producing firms located in the Vale dos Vinhedos, State of Rio Grande do Sul, a region producing about 90% of all Brazilian wine. Brazilian firms have recently started to differentiate products by origin-based quality signals; they supply the markets with multiple products and are increasing market segmentation. Within this particular wine district, we estimate a production function for different wine categories, identifying the different factors contributing to the changing marketing strategy in the study area. Results indicate that vertical differentiation is a strategy pursued to optimise the economic efficiency of inputs. In particular, expenditure on product-related inputs (e.g. grape, bottle) are particularly important for lower segments, whilst expenditures in quality-related inputs (e.g. labour) are crucial for high quality wines. Consequently, it appears that vertical differentiation in the wine market is the consequence of economic incentives focusing on efficiency, rather than political or economic rent. |
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Economic incentives for vertical product differentiation in the Brazilian wine sectorHorizontal and Vertical DifferentiationProduction FunctionWineBrazilWhile wine is traditionally viewed as a product typical of European and Mediterranean wine producing countries, in recent decades vineyards have developed in all continents. Consequently, wines have been classified as coming from the Old World (traditional European and Middle Eastern producers), and New World (countries who developed their tradition in wine making more recently). Apart from individual taste, the marketing strategy adopted in these two origins clearly differentiates: based largely on the place of origin in the Old World by means of Appellation of Origin labelling; and based predominantly on the vine grown in the New World. Nonetheless, quality segmentation seems to have become more frequent in the New World, as it allows producers to compete in different segments of the market. In this work, we use data from Brazilian wine producing firms located in the Vale dos Vinhedos, State of Rio Grande do Sul, a region producing about 90% of all Brazilian wine. Brazilian firms have recently started to differentiate products by origin-based quality signals; they supply the markets with multiple products and are increasing market segmentation. Within this particular wine district, we estimate a production function for different wine categories, identifying the different factors contributing to the changing marketing strategy in the study area. Results indicate that vertical differentiation is a strategy pursued to optimise the economic efficiency of inputs. In particular, expenditure on product-related inputs (e.g. grape, bottle) are particularly important for lower segments, whilst expenditures in quality-related inputs (e.g. labour) are crucial for high quality wines. Consequently, it appears that vertical differentiation in the wine market is the consequence of economic incentives focusing on efficiency, rather than political or economic rent.ISCTE-IUL Business School2011-12-01info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articletext/htmlhttp://scielo.pt/scielo.php?script=sci_arttext&pid=S0873-74442011000300006Economia Global e Gestão v.16 n.3 2011reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAPenghttp://scielo.pt/scielo.php?script=sci_arttext&pid=S0873-74442011000300006Panzone,LucaSimões,OrlandoCampregher,GlauciaOliveira,Gabriel Nunes deFreitas,Clailton Ataídes deinfo:eu-repo/semantics/openAccess2024-02-06T17:12:09Zoai:scielo:S0873-74442011000300006Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-20T02:23:00.552185Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Economic incentives for vertical product differentiation in the Brazilian wine sector |
title |
Economic incentives for vertical product differentiation in the Brazilian wine sector |
spellingShingle |
Economic incentives for vertical product differentiation in the Brazilian wine sector Panzone,Luca Horizontal and Vertical Differentiation Production Function Wine Brazil |
title_short |
Economic incentives for vertical product differentiation in the Brazilian wine sector |
title_full |
Economic incentives for vertical product differentiation in the Brazilian wine sector |
title_fullStr |
Economic incentives for vertical product differentiation in the Brazilian wine sector |
title_full_unstemmed |
Economic incentives for vertical product differentiation in the Brazilian wine sector |
title_sort |
Economic incentives for vertical product differentiation in the Brazilian wine sector |
author |
Panzone,Luca |
author_facet |
Panzone,Luca Simões,Orlando Campregher,Glaucia Oliveira,Gabriel Nunes de Freitas,Clailton Ataídes de |
author_role |
author |
author2 |
Simões,Orlando Campregher,Glaucia Oliveira,Gabriel Nunes de Freitas,Clailton Ataídes de |
author2_role |
author author author author |
dc.contributor.author.fl_str_mv |
Panzone,Luca Simões,Orlando Campregher,Glaucia Oliveira,Gabriel Nunes de Freitas,Clailton Ataídes de |
dc.subject.por.fl_str_mv |
Horizontal and Vertical Differentiation Production Function Wine Brazil |
topic |
Horizontal and Vertical Differentiation Production Function Wine Brazil |
description |
While wine is traditionally viewed as a product typical of European and Mediterranean wine producing countries, in recent decades vineyards have developed in all continents. Consequently, wines have been classified as coming from the Old World (traditional European and Middle Eastern producers), and New World (countries who developed their tradition in wine making more recently). Apart from individual taste, the marketing strategy adopted in these two origins clearly differentiates: based largely on the place of origin in the Old World by means of Appellation of Origin labelling; and based predominantly on the vine grown in the New World. Nonetheless, quality segmentation seems to have become more frequent in the New World, as it allows producers to compete in different segments of the market. In this work, we use data from Brazilian wine producing firms located in the Vale dos Vinhedos, State of Rio Grande do Sul, a region producing about 90% of all Brazilian wine. Brazilian firms have recently started to differentiate products by origin-based quality signals; they supply the markets with multiple products and are increasing market segmentation. Within this particular wine district, we estimate a production function for different wine categories, identifying the different factors contributing to the changing marketing strategy in the study area. Results indicate that vertical differentiation is a strategy pursued to optimise the economic efficiency of inputs. In particular, expenditure on product-related inputs (e.g. grape, bottle) are particularly important for lower segments, whilst expenditures in quality-related inputs (e.g. labour) are crucial for high quality wines. Consequently, it appears that vertical differentiation in the wine market is the consequence of economic incentives focusing on efficiency, rather than political or economic rent. |
publishDate |
2011 |
dc.date.none.fl_str_mv |
2011-12-01 |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://scielo.pt/scielo.php?script=sci_arttext&pid=S0873-74442011000300006 |
url |
http://scielo.pt/scielo.php?script=sci_arttext&pid=S0873-74442011000300006 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
http://scielo.pt/scielo.php?script=sci_arttext&pid=S0873-74442011000300006 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
text/html |
dc.publisher.none.fl_str_mv |
ISCTE-IUL Business School |
publisher.none.fl_str_mv |
ISCTE-IUL Business School |
dc.source.none.fl_str_mv |
Economia Global e Gestão v.16 n.3 2011 reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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RCAAP |
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RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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1799137311726764032 |