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Business dynamics of on-premise wine trade: cases from South Korea

Jeeah Hwang (Warwick Business School, University of Warwick, Coventry, UK)
Martin Kunc (Warwick Business School, University of Warwick, Coventry, UK)

International Journal of Wine Business Research

ISSN: 1751-1062

Article publication date: 17 August 2015

649

Abstract

Purpose

This paper aims to explore the dynamics and performance of on-premise wine trade business.

Design/methodology/approach

The study involved in-depth interviews with six on-premise businesses in Seoul, South Korea. The data obtained were methodically analysed to understand the impact of different variables through a qualitative business dynamic model.

Findings

Customer satisfaction and number of customers are key performance factors for on-premise wine trade business. Customer satisfaction is driven by servicescape, wine lists and front-line employees. However, the length of wine list impacts directly on inventory costs and staff knowledge, while the number of service staff in the business has a non-linear effect on profits, as service staff does not grow linearly with the number of customers.

Research limitations/implications

One important limitation is that the business dynamics model, which is based on South Korean cases, used only owners/sommeliers’ perspectives but not consumers’ perspectives. There are two implications. First, in terms of on-premise wine trade, the alignment of servicespace, front-line employees, wine lists and pricing strategy is key to shape customers’ expectations and confirm the market positioning of the business. Second, for wineries, understanding the dynamics of on-premise wine trade can help them to find strategies to position their wines.

Originality/value

The paper offers two contributions. Firstly, the paper provides the first exploratory study on the business dynamics of on-premise wine trade businesses, which complements existing wine-buying behaviour studies. Secondly, the study explores the on-trade channel in South Korea, providing insights into an important Asian market.

Keywords

Citation

Hwang, J. and Kunc, M. (2015), "Business dynamics of on-premise wine trade: cases from South Korea", International Journal of Wine Business Research, Vol. 27 No. 3, pp. 239-254. https://doi.org/10.1108/IJWBR-08-2014-0034

Publisher

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Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

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