This is because Australia has free trade agreement with the U.S. As a result, the wine could enter the U.S. (duty free) and then could be transported to Canada (under the North American Free Trade Agreement). In order to determine if this is: feasible and to find the quickest routes requires using various third party intermediaries. They could reduce the time and the costs involved in exporting the wine (based on their experience). ("Australia United States Free Trade Agreement," 2011)
As far as the marketer's overall control is concerned, these forces will depend upon: weather conditions and the underlying costs of shipping the product to stores, in this case, these factors are difficult to control, as the costs have been consistently rising thanks to: fluctuating currencies and volatile fuel prices. This is problematic because, it gives marketers little control over control these variables, which will have a negative impact upon their overall bottom line. At which point, they will be subject to the changes that are taking place in the market.
Clearly, the profit margins of exporting Cabernet Sauvignon and Patricia Cabernet Sauvignon to Canada can be beneficial. Using the two examples that were examined (which is based upon 10,000 units) the revenues will be: $6,000.00 (for Cabernet Sauvignon) and $38,000.00 (for Patricia Cabernet Sauvignon). This is important, because it shows how there is ability to see significant profit potential, from exporting these two wines. However, there are a number...
This can come in form of higher fuel prices to volatility in the currency markets. These two factors are important, because they are highlighting the lack of control that marketer's have over the underlying costs. At the same time, there has been number of different producers that have been purchased by real estate developers (for the potential land appreciation of their farms). This is significant, as it is showing how the underlying supply of wines has been declining significantly. As a result, the costs associated with producing and selling wine have increased by 20% since 2003. What all of this highlighting, is how marketers can be able to make substantial profit margins exporting wine to Canada (even though the underlying cost are rising). This is important, because it shows the possible profits and challenges when engaging in these kinds of business transactions.
Bibliography
Australia United States Free Trade Agreement. (2011). Department of Foreign Affairs and Trade. Retrieved from:http://www.dfat.gov.au/fta/usfta/index.html
Cabernet Sauvignon. (2011). Wine Searcher. Retrieved from: http://www.wine-searcher.com/find/brown+brothers+cabernet+sauvignon
Patricia Cabernet Sauvignon. (2011). Wine Searcher. Retrieved from: http://www.wine-searcher.com/find/patricia+cabernet+sauvignon
Stafford, T. (2010). FM. Retrieved from: http://www.fm.co.za/Article.aspx?id=112787
