Wine is the fastest food export item in the US. Suppose you are the international marketing analyst for an exporting US winery. Assume it is December 2020 and you are requested to provide sales and revenue estimates for the year 2021 given some important changes in your export markets with respect to 2020

a. During 2020 your company sold 60,000 cases of wine to Japan, 50,000 to China and 20,000 to Brazil. Your price/case was (and still will be in 2021) US $400 in each market (paid in local currency) There is no tariff for US wines in Brazil or Japan, but China charges a 25% tariff (paid by your importer).

b. You get important new information about your markets for the year 2021 that you need to incorporate in your projected sales and revenues: 1) Japan per capita income is expected to decline by 8% with respect to 2020 (economic recession will continue there), 2) The Brazilian currency (Real) will devalue 10% with respect to the US $ in 2021, and 3) China plans to eliminate its current 25% tariff on US wines in 2021. Assume no other changes are expected for 2021 and that your price in US $ will not be changed.

What are the total (gross) revenues by country for 2020? What are the new projected sales (quantity), and total (gross) revenues by country for 2021 (considering the changes you anticipate) ?.

You know by your previous research that the wine demand elasticities in your markets are as follows:

	Wine Demand Elasticities
	Japan	China	Brazil
Own price elasticity	-2.0	-1.5	-2.0
Income elasticity	2.0	2.2	1.5

Hint: Use elasticities definitions to calculate changes in sales. You may not need all the elasticities provided. Depreciation of a currency implies change of price in the importing country but not in your export price in US $. Tariff elimination implies change in your importers domestic price but not in your selling price in US $.

NAME _____________- ASSIGNMENT 2A INTERNATIONAL WINE SALES 2020/2021 RESULTS OF YOUR ANALYSIS

Wine Sales and Revenues	Price/case (US $)	Quantity sold or To sell (q)	TOTA L REVENUE (price x q)
Japan
Situation 2020
Forecast For 2021
Change
Brazil
Situation 2020
Forecast For 2021
Change
China
Situation 2020
Forecast For 2021
Change
Total
Situation 2020
Forecast For 2021
Change