Globalization of Markets

Theodore Levitt's article "The Globalization of Markets" is relevant to the case of MontGras, a winery in Chile, because MontGras had begun competing in the global marketplace and was facing numerous challenges. MontGras had had difficulty penetrating the U.S. wine market because its relationships with distributors failed, so it had to decide on a new partner as well as formulate an effective export strategy. A supermarket promotion in the U.K. MontGras's biggest market was offered to MontGras, promising to raise volumes, but the promotion would work against price maintenance. It was offering different wines in the fragmented U.S. market, since stricter regulations forced it to use a three-tier distribution system. Patricio Middleton, MontGras's CEO, hired Interbrand, an international marketing firm, to develop a strategic plan for the whole Chilean wine industry and found that Chile was barely known and had no specific image. MontGras was exporting 98% of its production to a total of 24 countries and focusing on a pricing strategy that highlighted mainly its highest-price wines (Arnold and Stevenson, 2002).

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Category: Business - G