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Answers and Questions to Case Discussion E.J. Gallo Winery
1.) Why did Gallo company start with selling fortified wines, jug wines?
- accommodation to American market
- strong wines were substitute products for liquor, they were affordable for everyone
- no wine tradition in the U.S. as in Western Europe (France, Italy)
2.) What do you think about the integration level of Gallo?
- full vertical integration made it possible to create really "own" brands
- own R&D testing of more than 400 varieties of grapes to find the best tasting ones
- later (from 1967) long-term contracts with suppliers (wine growers) who met fully Gallo´s quality standards (guaranteed quality)
- own marketing activities helped to recognise the customer needs better than the competitors crucial factor for the success of Gallo´s brands
- usual distribution was to sell the wine to a wholesaler; Gallo distributed it directly to the liquor stores or groceries -> higher margins......
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Title: Vbm
Approximate Word Count: 830
Approximate Pages: 4 (250 words per double-spaced page)
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