Mondavi

Q 2 How is it positioned vis a vis its competitors?

For many years Mondavi had been operating in a niche market due to the strong product differentiation they had with the companies flagship product, Robert Mondavi Napa Valley. In 1998 Mondavi was California’s second largest wine producer but financial statements released for the second quarter of 1997 indicated that earnings had fallen by 16% from the same quarter in 1997 and earnings were up by a disappointing 3%. Up until the 1990s there were no real substitute products in the premium wine market as the other wine making companies concentrated their marketing and production efforts in the jug wine sector. Eventually, as supply and demand reached equlibrium, sales in the jug wine sector began to level out. This had prompted a change in strategy and thinking for the other wine producing companies in California as they began to move into the premium wine segment. Many of these companies had gained marketing and product...