WASB @ Brown Brothers


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WASB @ Brown Brothers

  1. 1. Engaging wine buyers through virtual communities and other e-based channels Professor Pascale Quester Dr Roberta Veale The University of Adelaide
  2. 2. Professor Pascale Quester <ul><li>The power of social networking : </li></ul><ul><li>Brand communities and eWOM </li></ul>
  3. 3. Social influences on consumer behaviour <ul><li>Many consumer purchases are subject to social group influences (this is not new!): </li></ul><ul><ul><li>Who we buy with. </li></ul></ul><ul><ul><li>Who we buy for. </li></ul></ul><ul><ul><li>Who we imitate. </li></ul></ul><ul><ul><li>Who we differ from. </li></ul></ul><ul><ul><li>Who we trust. </li></ul></ul><ul><ul><li>Others like us. </li></ul></ul><ul><ul><li>What the purchase says about us (to others). </li></ul></ul>
  4. 4. Social influences on choices <ul><li>When purchasing in groups, consumers may tend to conform to what others do... </li></ul><ul><li>Or they may choose to seek variety (and they may do this to conform to the perceived social conformism towards variety seeking!). </li></ul><ul><li>These behaviours have been reported in situations where consumers make individual decisions in a group setting, such as a drink or a meal, resulting in a curvilinear response (consumers first seek variety then conform to an increasing majority and then engage in reactant behaviour when facing an overwhelming majority). </li></ul><ul><li>This is quite different from consensus building, a requirement for a group purchase, say of a bottle to share. </li></ul>
  5. 5. Consumption communities <ul><li>When the product category or activity becomes highly meaningful for consumers, communities may emerge around it, characterised by: </li></ul><ul><ul><li>High level of involvement, interest and personal significance. </li></ul></ul><ul><ul><li>Substantial amount of time thinking, communicating and gathering information about the product category or activity. </li></ul></ul><ul><ul><li>High degree of interaction, face to face or online. </li></ul></ul>
  6. 6. <ul><li>Some consumers congregate around brands towards which they exhibit an irrational, socially motivated attachment, in what has been coined: </li></ul><ul><ul><li>‘ brand communities ’ eg. Harley Davidson, Apple, Club Med. </li></ul></ul><ul><ul><li>‘ interpretive communities ’ eg. gay groups. </li></ul></ul><ul><ul><li>consumption sub or micro-cultures. </li></ul></ul>Consumption communities
  7. 7. Brand communities <ul><li>The interaction amongst community members is now facilitated by the Internet (but seldom exclusive to it). </li></ul><ul><li>This has empowered consumers and enabled them to build a stronger stakeholder group, giving them a louder voice. </li></ul><ul><li>A major implication of this body of research is that consumers are very active in creating brand meanings and marketing managers exert far less direct control than commonly assumed in the brand management literature (Thompson, 2004). </li></ul><ul><li>Some have predicted the end of marketing as we know it: It can no longer be something done ‘ to ’ consumers, but something done ‘ with ’ them. </li></ul>
  8. 8. Consumer ‘ co-creation ’ <ul><li>The Internet allows discussion and, at times, resistance to ‘ change ’ considered unacceptable. </li></ul><ul><li>For Club Med, some consumers actively called for a boycott of the ‘ new ’ (post 2002) Club Med, seen as ‘ inauthentic ’ , missing the core values of ‘ their ’ Club Med. </li></ul><ul><li>Tampering with positioning can be dangerous ground for marketers as they risk losing loyal consumers, and fail to capture new ones. </li></ul><ul><li>Loyalty is derived from a good match between the values held by the community and these associated with the brand. </li></ul><ul><li>Repositioning, now requires the tacit agreement of consumers, as the meaning of brands is co-created and co-owned. </li></ul>
  9. 9. Consequences for marketers <ul><li>We need to understand how consumers interact both off and online. </li></ul><ul><li>We need to be part of the conversation they are having about the product/brand. </li></ul><ul><li>We need to understand the values of the community and respect these as part of our brand if we want to maintain consumer loyalty. </li></ul><ul><li>We must understand eWOM better, eg. who exercises control and influence, who moderates the discussion and who keeps information flowing. </li></ul><ul><li>The theory of small worlds and avalanches suggest they may not be opinion leaders but, rather, information ‘ nodes ’ , who are multi-connected. They hold the key to general acceptance of new ideas and information generally. </li></ul>
  10. 10. WOM: consumer-to-consumer communication <ul><li>Brand and consumption communities are characterised by a shared perception of ‘ ownership ’ . </li></ul><ul><li>They are also distinctive because of the active C-2-C communication they generate, Word-of-Mouth (WOM) </li></ul><ul><li>Previous studies have shown that loyalty is an antecedent to positive WOM. </li></ul><ul><ul><li>Loyal consumers act as ‘ advocates ’ to promote the brand. </li></ul></ul><ul><ul><li>They may also ‘ defend ’ your brand in the case of a crisis or competitive aggression (e.g. Nippy ’ s juice / hostile take-over attempt of Coopers beer). </li></ul></ul><ul><ul><li>Based on their knowledge of the brand or product they may be perceived by others as experts and exert expert or referent power. </li></ul></ul>
  11. 11. eWOM: Online brand communities <ul><li>The advent of the Internet has provided consumers with unprecedented opportunities to discuss brands or products amongst themselves. </li></ul><ul><li>It has enabled the building of brand communities that transcend geography and time. </li></ul><ul><li>eWOM enjoys much of the advantages of face-to-face WOM: </li></ul><ul><ul><li>It is deemed more credible as a source of unbiased information. </li></ul></ul><ul><ul><li>It is therefore more influential on consumer behaviour. </li></ul></ul><ul><ul><li>It is instrumental in the diffusion of information and innovation. </li></ul></ul>
  12. 12. Some research findings about eWOM <ul><li>The literature has examined the issue of viral marketing or how information gets transmitted amongst consumers, especially online. </li></ul><ul><li>It has initially sought to apply to the online environment the traditional idea that new ideas and information go from ‘ opinion leaders ’ to others. </li></ul><ul><li>Social networks and social proximity have been found to act as risk reducing mechanisms for the adoption of new products or services. </li></ul><ul><li>The internet provides an ideal empirical context because communication threads can be tracked on discussion forums or blogs. </li></ul>
  13. 13. Empirical evidence on eWOM <ul><li>A study of online discussion in two contexts: </li></ul><ul><ul><li>Mobile phones (tangible, functional product with multiple attributes making evaluation complex). </li></ul></ul><ul><ul><li>Films (experiential service, highly hedonistic and subjectively evaluated). </li></ul></ul><ul><li>An empirical examination of threads (series of messages posted by different consumers based on an initial idea or theme). </li></ul><ul><ul><li>Over 240 days (in France) </li></ul></ul><ul><ul><li>Over 1000 authors in each category (1257 for mobiles, 1952 for films). </li></ul></ul><ul><ul><li>Over 8,000 messages for mobiles, almost 20,000 for films. </li></ul></ul><ul><li>A (vast) series of measures: </li></ul><ul><ul><li>Threads-by-author and authors-by-thread. </li></ul></ul><ul><ul><li>Ratio of answers/postings and postings without response/postings. </li></ul></ul><ul><ul><li>Centrality (number of connections to others in the network). </li></ul></ul><ul><ul><li>Frequency/length of postings. </li></ul></ul><ul><ul><li>And many others! </li></ul></ul>
  14. 14. Empirical evidence <ul><li>No support for the notion of ‘ opinion leader ’ </li></ul><ul><li>Rather, we observed a series of ‘ avalanches ’ . They start in different random places and diffuse outwards from these points </li></ul><ul><li>Multiple connections and network centrality is, therefore, more important than expertise or perceived knowledge in the online environment </li></ul><ul><li>No ‘ tipping point ’ , only acceleration by promiscuous consumers (those with multiple social connections) </li></ul><ul><li>It may well be that the same applies to WOM (we simply do not have comparable measures to test this!) </li></ul><ul><li>But it would be wrong to assume that eWOM works like WOM </li></ul>
  15. 15. eWOM: What do we need to know? <ul><li>We need to understand how eWOM can be encouraged: </li></ul><ul><ul><li>Can marketers trigger it? </li></ul></ul><ul><ul><li>Who else can initiate and control it? </li></ul></ul><ul><li>We need to know what its effects are on consumer behaviour </li></ul><ul><ul><li>What are the consequences of eWOM? </li></ul></ul><ul><ul><li>Does it impacts on consumers ’ actual brand choice and purchase? </li></ul></ul><ul><li>Hence, the conceptual model proposed and investigated in this study is as follows... </li></ul>
  16. 16. Model to be tested
  17. 17. Crush festival pilot study <ul><li>Some preliminary qualitative research was undertaken in preparing for this project in relation to online community behaviour by wine consumers. </li></ul><ul><li>The pilot study confirmed that people are engaging in social networking and using it as a source of ‘ credible ’ information to guide their choice. </li></ul><ul><li>The survey, undertaken in 2008, showed (N=94) </li></ul><ul><ul><li>Wine consumers found that getting information and recommendations online saves time (M=5.37) </li></ul></ul><ul><ul><li>Technology is not an obstacle for consumers (it makes belonging to a community easy: M=5.66) </li></ul></ul><ul><ul><li>Being part of a community was easy (M=4.91) and online communications are clear and understandable (M=4.88) </li></ul></ul>
  18. 18. Questions? <ul><li>Ask away! </li></ul>
  19. 19. Engaging wine buyers through virtual communities and other e-based channels: The ‘ project ’ Dr Roberta Veale
  20. 20. Project scope <ul><li>A 3 year study funded by the GWRDC with matching contributions from the Business School and support from The University of Adelaide, Wine2030 project. </li></ul><ul><ul><li>Truly a collaborative effort involving industry participants, academic staff and external research collaborators. </li></ul></ul><ul><ul><li>A multi stage research project involving data collection from members of industry across Australia and wine consumers. </li></ul></ul><ul><ul><li>Qualitative and quantitative methodologies: content analysis, surveys, interviews, focus groups and web communities. </li></ul></ul><ul><li>Fundamental: a series of workshops and seminars. </li></ul>
  21. 21. Research objectives <ul><li>To profile wine consumers ‘ online ’ and determine levels of participation and eWOM activities. </li></ul><ul><li>To document prime benefits sought by these community participants to assist industry in strategy development. </li></ul><ul><li>To identify and quantify relationships between community commitment and brand loyalty, referrals and wine purchases. </li></ul><ul><li>To determine optimal ‘ web tech ’ to employ in order to enhance community experiences and overcome barriers. </li></ul>
  22. 22. Research stages <ul><li>Literature review and review of international experiences. </li></ul><ul><li>Where is the industry in Australia? </li></ul><ul><ul><li>Content analysis of 200 Australian wine brand web sites. </li></ul></ul><ul><ul><ul><li>- Wine 1, Wine 2 or Wine 3? </li></ul></ul></ul><ul><ul><li>Content analysis of Australian wine blogs/forums/face book etc. </li></ul></ul><ul><ul><li>Survey (online) of wine brand owners – e-based activities. </li></ul></ul><ul><ul><li>In depth interviews with a selection of wine brand owners </li></ul></ul><ul><li>‘ Feed Back ’ to each participant, the level of their e-based activities, and their own position in the ‘ big ’ picture. </li></ul>
  23. 23. Research stages <ul><li>Consumer focus groups – wine ‘ bloggers ’ and ‘ fans ’ . </li></ul><ul><li>Survey of wine consumers regarding their on-line participation rates in communities and social networking activities. </li></ul><ul><li>Set up wine communities and ‘ lurk ’ for 12 months: </li></ul><ul><ul><li>Two ‘ brand ’ based </li></ul></ul><ul><ul><li>One ‘ region ’ based </li></ul></ul><ul><li>Survey of wine participants in both communities in addition to a year of monitoring and content analysis. </li></ul>
  24. 24. Reporting and feedback <ul><li>Critical components are industry engagement and communication of results. </li></ul><ul><li>Industry based workshops. </li></ul><ul><li>Final reports available from us and the GWRDC. </li></ul><ul><li>Check out the Wine2030 website! </li></ul><ul><li>Follow Wine as a Social Bond on facebook and Twitter </li></ul>
  25. 25. Website content analysis and interviews <ul><li>Content analysis study of Australian based online wine related activities: </li></ul><ul><ul><li>Review of 200 Australian wine brand websites. </li></ul></ul><ul><ul><li>Review of Australian Wine Blogs and Forums. </li></ul></ul><ul><ul><li>Facebook and Twitter. </li></ul></ul><ul><li>Qualitative interviews with members of industry </li></ul><ul><ul><li>Working to determine the motivations for current approaches. </li></ul></ul><ul><ul><li>Gaining insights into feelings and likely strategies for the future. </li></ul></ul><ul><ul><li>Investigating current levels of online ‘ expertise ’ (self reported) in implementing e-based strategies. </li></ul></ul>
  26. 26. Wine 1.0 <ul><ul><li>Lowest level of involvement. </li></ul></ul><ul><ul><li>Traditional structure, can be considered an online brochure. </li></ul></ul><ul><ul><li>Elements include product listings/descriptions, contact details, locations, phone/fax/email and so forth. </li></ul></ul><ul><ul><li>No true online wine ordering, although order forms may be available to download and fax or phone through. </li></ul></ul><ul><ul><li>A ‘ set and forget ’ type of approach. </li></ul></ul><ul><ul><li>The potential risk is that sites can quickly become out of date and appear neglected or ‘ old fashioned ’ . </li></ul></ul><ul><ul><ul><li>Missing or old contact details </li></ul></ul></ul><ul><ul><ul><li>Links that don ’ t work anymore </li></ul></ul></ul>
  27. 27. Wine 1.0
  28. 28. Wine 2.0 <ul><li>Higher level activities allowing for interaction </li></ul><ul><ul><li>Comprises the attributes of Wine 1.0 </li></ul></ul><ul><ul><li>Also includes tools that provide the opportunity for interaction with consumers. </li></ul></ul><ul><ul><ul><li>Wine blogs. </li></ul></ul></ul><ul><ul><ul><li>Wine forums. </li></ul></ul></ul><ul><ul><ul><li>Social networking sites (facebook/Twitter). </li></ul></ul></ul><ul><ul><li>Also provide more complex and interesting sensory experiences. </li></ul></ul><ul><ul><ul><li>Wine V-logs. </li></ul></ul></ul><ul><ul><ul><li>Virtual wine tours. </li></ul></ul></ul><ul><ul><li>Many found to be ‘ dead ’ in terms of activity or links missing. </li></ul></ul>
  29. 29. Wine 2.0 No wine 3.0 yet.... Podcasts 4% 96% Blog or Forum or Discussion Board 22% 78% Twitter 33% 66% V-Logs or other video based 14% 86%
  30. 30. Wine 3.0 <ul><li>Working the medium and testing technologies </li></ul><ul><ul><li>Comprise all of Wine 1.0 </li></ul></ul><ul><ul><li>Most aspects of Wine 2.0 </li></ul></ul><ul><ul><ul><li>Particularly with respect to two-way communication tools and engagement tools. </li></ul></ul></ul><ul><ul><li>Take it all to higher levels. </li></ul></ul><ul><ul><ul><li>Inviting and encouraging consumer co-creation. </li></ul></ul></ul><ul><ul><ul><li>Virtual tastings and wine rooms. </li></ul></ul></ul><ul><ul><ul><li>On line streaming and interaction. </li></ul></ul></ul><ul><ul><ul><li>Only limited by the imagination of the brand manager and access to technical expertise and resources. </li></ul></ul></ul><ul><ul><ul><ul><li>Not always associated with huge costs. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>But requires scheduling and planning – like any other program... </li></ul></ul></ul></ul>
  31. 31. Blog and forum Analysis <ul><li>55% of Blogs are community owned with only 17% Brand owned. </li></ul><ul><li>61% of blogs are written by professional writers 39% by average wine consumers. </li></ul><ul><li>Only 44% have any advertising within the pages. </li></ul><ul><li>83% of blogs are only wine reviews. </li></ul><ul><li>On the first page of the blog 62% had over 10 brands mentioned of that, 17% over 15. </li></ul>
  32. 32. Perceptions about the future.... 94% of respondents don ’ t ever monitor online ‘ chat ’ . - Little monitoring of competitor sites. Wide variation in terms of spend and staff resources. - Typically quite ‘ modest ’ . Ave reported spend about 22% of marketing budget. 71% expect to be increasing their spend significantly in the future. Huge potential for the future in terms of exploiting this medium...
  33. 33. Qualitative segments - wine marketers
  34. 34. What are they like? <ul><li>The Reluctant </li></ul><ul><li>Aware of the potential for e-based and social media strategies being used, they know that others have entered the space but have little or no intention of entering this space at this time. </li></ul><ul><li>The Waders </li></ul><ul><li>Entering the space but are not quite sure why, there is a general feeling among this group that a Facebook and Twitter page is just something they need to have but are not sure of what they are going to do with them when they have them. </li></ul><ul><li>The Brave </li></ul><ul><li>Are “ all over it man ” they have, and are very active in both the spaces of Facebook and Twitter. Within this group however there appear to be two subgroups, one that has clear measured objectives and one that is into the space successfully but is yet to determine what/how they will use their new found channel. Still not building community! </li></ul>
  35. 35. Which social networking tools & why <ul><li>The Reluctant </li></ul><ul><ul><li>Aware of social tools </li></ul></ul><ul><ul><li>Unknown value </li></ul></ul><ul><ul><li>Risk averse </li></ul></ul><ul><ul><li>Broadly unclear communications strategies </li></ul></ul><ul><li>The Waders </li></ul><ul><ul><li>Facebook </li></ul></ul><ul><ul><li>Twitter is seen as trivial and misused. Adopting other technologies such as iphones </li></ul></ul><ul><li>The Brave </li></ul><ul><ul><li>Very confident </li></ul></ul><ul><ul><li>“ you name it and we do it </li></ul></ul><ul><ul><li>So they say …… </li></ul></ul><ul><li>The Reluctant </li></ul><ul><ul><li>Not comfortable </li></ul></ul><ul><ul><li>No proven benefit </li></ul></ul><ul><ul><li>Current communications scare off customers </li></ul></ul><ul><li>The Waders </li></ul><ul><ul><li>Everybody else is </li></ul></ul><ul><ul><li>Better to be safe </li></ul></ul><ul><ul><li>Jumping on the social bandwagon </li></ul></ul><ul><li>The Brave </li></ul><ul><ul><li>No justification needed </li></ul></ul><ul><ul><li>Just the right thing to do </li></ul></ul><ul><ul><li>Lowers risk in strategies </li></ul></ul><ul><ul><li>Faster and cheaper than updating www </li></ul></ul>
  36. 36. <ul><li>Resources </li></ul><ul><li>The Reluctant </li></ul><ul><ul><li>None – “ just us wine folks ” . </li></ul></ul><ul><li>The Waders </li></ul><ul><ul><li>More IT savvy </li></ul></ul><ul><ul><li>often not marketing or PR trained, </li></ul></ul><ul><ul><li>winemaker is also responsible. </li></ul></ul><ul><li>The Brave </li></ul><ul><ul><li>Minimum 10% per day but wanting more </li></ul></ul><ul><ul><li>no measurement of time – just whatever it takes to be there, sometimes as low as a few minutes a day, background and qualifications in Marketing or PR. </li></ul></ul>Resources, blogs and reviews <ul><li>Blogs and reviews </li></ul><ul><li>The Reluctant </li></ul><ul><ul><li>James Halliday </li></ul></ul><ul><li>The Waders </li></ul><ul><ul><li>James Halliday </li></ul></ul><ul><li>The Brave </li></ul><ul><ul><li>James Halliday </li></ul></ul><ul><ul><li>Snooth </li></ul></ul><ul><ul><li>Qwaff </li></ul></ul>
  37. 37. <ul><li>Age of website </li></ul><ul><ul><li>10 years is the magic number </li></ul></ul><ul><ul><li>Some shorter </li></ul></ul><ul><ul><li>Most plan little investment in the “ current climate ” </li></ul></ul><ul><ul><li>Some plan to review </li></ul></ul><ul><li>Reverse channels of communication </li></ul><ul><li>The Reluctant </li></ul><ul><ul><li>Email and phone response </li></ul></ul><ul><ul><li>consumers have been reluctant to share feedback </li></ul></ul><ul><ul><li>traditional distribution channels provide info through tastings. </li></ul></ul><ul><li>The Waders </li></ul><ul><ul><li>More open to hear back from consumers, </li></ul></ul><ul><ul><li>complain about specific issues </li></ul></ul><ul><ul><li>broad wine information. </li></ul></ul><ul><li>The Brave </li></ul><ul><ul><li>Emails from the zealots, </li></ul></ul><ul><ul><li>Facebook and twitter feedback regularly </li></ul></ul><ul><ul><li>but not on the wine – more on the other activities. </li></ul></ul>
  38. 38. In summary <ul><li>All members of the industry are aware of ebased tools </li></ul><ul><li>Not all members of the industry are confident in either their ability to use social media or e-based strategies or the value they may bring. </li></ul><ul><li>General agreement that 10 years is too long between web updates – but also admit it ’ s been at least that long … </li></ul><ul><li>The current climate increases the risk averse attitude. </li></ul><ul><li>Most if not all are seeking some direction as to where to go next or at least where to start. </li></ul><ul><li>All are watching the general trends </li></ul>
  39. 39. Where to now? <ul><li>The next stage of the study is to develop and nurture three ‘ incubator ’ on line communities. </li></ul><ul><li>Online is not just ‘ push out ’ it ’ s ‘ drawing in ’ – many of those that think they ’ re ‘ all over it ’ are still engaged in what is primary ‘ outward ’ messaging. </li></ul><ul><li>Monitor, foster, encourage and ‘ lurk ’ for 12 months. </li></ul><ul><li>Strive to create a strong sense of ‘ community ’ amongst members. </li></ul><ul><li>Empirically test influences on eWOM and behavioural loyalty. </li></ul>
  40. 40. Ultimate wine communities <ul><li>Seek true engagement and interaction to foster co-ownership amongst wine enthusiasts. </li></ul><ul><li>Really test the boundaries of this medium. </li></ul><ul><li>Take the ‘ risks ’ associated with this – big payoffs also possible. </li></ul><ul><li>Live video streaming. </li></ul><ul><li>Scheduled support for regional events. </li></ul><ul><li>Participation and events across the region and member brands. </li></ul>
  41. 41. Our Partners
  42. 42. Regional program <ul><li>Brands commit to an ‘event’ per month + an hour per week in the forum for discussion. </li></ul><ul><li>Events will be held at the University or at the winery – if the BB speed is good enough. </li></ul><ul><li>Video streaming of the event and live chat. </li></ul><ul><li>Local artists and wine tasting (By Jingo) </li></ul><ul><li>Cabernet tasting, short video of the vineyard and winery and interactive tasting of 2007 Devil’s Elbow (Longview Wines) </li></ul><ul><li>Chocolate and Shiraz (Handorf Hills Winery) </li></ul><ul><li>Biodiversity in the vineyard (AHWR) </li></ul>
  43. 43. Individual brand program <ul><li>“ Vineyard doings with Bert” </li></ul><ul><li>Sustainable vineyard practices (water management, sheep, solar panels etc). </li></ul><ul><li>Pruning vines. </li></ul><ul><li>Who’s living in the vineyard? </li></ul><ul><li>Yabbying. </li></ul><ul><li>Local artists and art gallery exhibitions. </li></ul><ul><li>Tastings and Q&A. </li></ul><ul><li>“ Cooking with Jeni” </li></ul><ul><li>Food matching with our wines. </li></ul><ul><li>Home made pasta and pickles. </li></ul><ul><li>Bread and pizza in the wood oven. </li></ul><ul><li>Cooking with our wines. </li></ul><ul><li>Clare Valley ‘foodies’. </li></ul>
  44. 44. The Wine Room
  45. 45. Questions? <ul><li>Ask away! </li></ul>