AAWE 2009 Branding An Emerging Wine Region


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AAWE 2009 Branding An Emerging Wine Region

  1. 1. Branding an Emerging Wine Region:Do Appellation or Sub-Appellation matter? Isabelle Lesschaeve and Nicolas Mathieu, Vineland Research and Innovation Centre, Vineland Station, Ontario Canada
  2. 2. Outline Background Factors affecting wine choice and purchase Importance of origin Research questions and methodology Results and Discussion2 Vineland Research and Innovation Centre
  3. 3. Wine purchase decision making “Taste” is one of the most important factors cited by consumers for choosing wine (Thompson and Vourvachis, 1995; Charters, 2003) Tasting wine prior purchase is not common practice Purchasing wine is a risky endeavour, because of taste uncertainty (Mitchell and Greatorec, 1988)3 Vineland Research and Innovation Centre
  4. 4. Retail experience The retail experience is changing with the market globalization Extreme confusion wine consumers could feel entering a retail store Confusing factors (Casini et al.) Unprecedented levels of product proliferation Available access to increasing amounts of information Increasing use of imitation strategies Consumers shopping in new or unfamiliar environments Need for confusion reducing strategies4 Vineland Research and Innovation Centre
  5. 5. Risk reducing strategies Consumers tend to use these extrinsic cues to minimize risk: Price Awards Front label attributes Brand name Dependent on Region of origin, Appellation of Origin product involvement Design5 Vineland Research and Innovation Centre
  6. 6. Product involvement Product involvement has been conceptualized as the interest, enthusiasm and excitement that consumers exhibit towards a product (Mittal, 1989; Bloch and Richins, 1983) “Higher involvement consumers utilise more information and are interested in learning more, while low involvement consumers tend to simplify their choices and use risk reduction strategies”. (Lockshin, 2006) Highly involved Australian consumers conceptualized wine quality more objectively, by using more cognitive dimensions (interest or complexity) (Charters and Pettigrew, 2006) Highly involved consumers in New Zealand tended to use extrinsic quality cues other than price to lead their choice (Hollebeek et al. 2007)6 Vineland Research and Innovation Centre
  7. 7. Branding wine origin Linking a product to its place of origin is an innovative way of differentiating the product for involved consumers (Johnson and Bruwer, 2007) Although not that new… Creation of INAO in 1935 in France contributed to the contemporary acceptance of ‘terroir’ and its allied ‘quality’ and ‘typicality’ (Vaudour, 2002)7 Vineland Research and Innovation Centre
  8. 8. Branding wine origin Impact of label of origin on wine choice Low to moderate impact for Australian consumers (Veale, 2008; Australian Wine and Brandy Corporation, 2008) For US consumers, wine region was the most important cue for quality (Johnson and Bruwer, 2007). Wine region (e.g. Sonoma) was a stronger brand than sub‐region (e.g. Dry Creek) Impact of label of origin is moderated by wine involvement and expertise A strong regional brand is critical when most wines consumed in the local market are imported (Vrontis and Papasolomou, 2007)8 Vineland Research and Innovation Centre
  9. 9. The case of Niagara The Niagara Peninsula accounts for over 90% of Ontario’s grape growing volume 7,500 ha in Ontario, 6,800 ha in the Niagara Peninsula (VQAO, 2009) 71 wineries producing 998434 (9L cases)9 Vineland Research and Innovation Centre
  10. 10. Niagara In 2006, the Niagara Peninsula was divided into 10 sub- appellations and 2 regional appellations10 Vineland Research and Innovation Centre
  11. 11. Research question A large scope project has been undertaken to determine if these sub-appellations were distinct terroirs for grape and wine quality (Willwerth and Reynolds) Application to Riesling wines The representation of these new sub-appellations in the consumer mindset and its impact on purchase decision are unknown Do consumers reading the sub-appellation name on the wine label generate quality expectations? Are those confirmed or disconfirmed after sampling the wine? Hypothesis: Mature drinkers who drink regularly premium wines will use regional branding as a quality cue when buying11 wine Vineland Research and Innovation Centre
  12. 12. Experimental design 77 white wine involved consumers (49 women and 28 men), were recruited from the Niagara Peninsula region. Screening questionnaire Riesling drinker Involved consumers (questionnaire from Lockshin et al., 1997) Participated in two one-hour sessions one week apart. Session 1: Effect of extrinsic cues incl. Origin on wine quality expectation Session 2: Relative importance of origin, price, and taste cues on wine quality experienced Compensated $10/hour12 Vineland Research and Innovation Centre
  13. 13. Extrinsic cues Levels Cork Closure type Session 1 Label style Screw cap Intermediate Traditional Modern Capsule Logo VQA Absent Front label None Geographical indication Niagara Peninsula Ontario Creek Shores None Sub-appellation indication Niagara-on-the-lake Beamsville Bench 8 Font of regional indications 9 (Times New Roman) 10 Estate vineyard Reserve indication Reserve Absent 38 concepts created systematically Vintage 2005 2006 using a factorial design 2007 10-12 Price range ($) 13-15 16-2013 Vineland Research and Innovation Centre
  14. 14. Session 1 How much do you expect to like the wine described by this concept?14 Vineland Research and Innovation Centre
  15. 15. Session 2 Determine the impact of the origin on the overall wine experience15 Vineland Research and Innovation Centre
  16. 16. Session 2 Selection of 4 wines with similar sensory profiles (short supply) 8 7 6 5 Reif Myers 4 Flat rock 3 Cave Spring 2 1 016 Vineland Research and Innovation Centre
  17. 17. Extrinsic cues Levels Cork Closure type Session 2 Screw cap Intermediate Label style Traditional Modern Selection of 6 visual concepts Capsule Logo VQA Absent where 3 cues were varied, the Front label None other remaining constant Geographical indication Niagara Peninsula Ontario Creek Shores Sub-appellation indication None Niagara-on-the-lake Beamsville Bench 8 Font of regional 9 indication(Times New Roman) 10 Estate vineyard Reserve indication Reserve Absent 2005 Vintage 2006 2007 10-12 Price range ($) 13-15 16-2017 Vineland Research and Innovation Centre
  18. 18. Session 2 Four groups of consumers tested 4 different wines Within one group, consumers tested 6 times the same wine (coded differently) presented with 6 different concepts Group of consumers Vineyard Number of consumers per group Group 1 Flat Rock 20 Group 2 Myers 20 Group 3 Cave Spring 22 Group 4 Reif 15 Consumers were presented with one wine sample at a time and the computerized questionnaire displayed at the same time the corresponded visual concept. They were asked to look at the concept and to taste the wine , and then to rate how much they liked the wine on a 10 point scale anchored from ‘Not at all’ to `Very much.18 Vineland Research and Innovation Centre
  19. 19. Data analysis Results from session 2 Data analysis conducted using SPSS v.16.0 (SPSS Inc., Chicago) and XLStat 2007.1 (Addinsoft, Paris).19 Vineland Research and Innovation Centre
  20. 20. Effect of wine versus extrinsic cues Source F Sig. Intercept 935.59 0.000 Wine .849 0.471 Subject(Wine) 5.682 0.000 Appellation .563 0.453 Sub-appellation 1.183 0.277 Price 2.951 0.087 Wine * Price .768 0.512 Wine * Appellation 1.316 0.269 Wine * Sub-appellation .632 0.594 Appellation * Price .006 0.936 Sub-appellation * Price .003 0.957 No wine effect data from 4 subgroups are merged20 Vineland Research and Innovation Centre
  21. 21. Effect of extrinsic cues on liking differential Dependent variable: Experienced Liking – Expected Liking Source F Sig. Intercept 8.028 0.006 Appellation 2.656 0.107 Sub-appellation 0.659 0.419 Price 4.069 0.046 Subject 3.97 0.000 Appellation * Price 0.15 0.699 Appellation * Subject 1.06 0.376 Sub-appellation * Price 0.309 0.579 Price * Subject 1.74 0.002 Sub-appellation * Subject 1.344 0.06321 Vineland Research and Innovation Centre
  22. 22. Existence of Segmentation Ascending Hierarchical Cluster analysis Similarity: Pearson correlation coefficient Agglomeration method: Unweighted pair-group average 3 groups Dendrogram C1: 46 consumers -0.158111 C2: 20 consumers 0.0418894 C3: 11 consumers 0.2418894 Similarity 0.4418894 0.6418894 0.8418894 S20 S48 S56 S74 S23 S29 S03 S49 S64 S72 S09 S16 S21 S77 S22 S14 S33 S38 S50 S55 S44 S67 S06 S25 S17 S70 S30 S15 S71 S08 S10 S35 S60 S19 S47 S04 S36 S37 S53 S27 S58 S68 S52 S12 S61 S65 S18 S39 S75 S81 S11 S80 S13 S02 S57 S66 S32 S78 S41 S42 S34 S54 S62 S31 S01 S76 S28 S24 S43 S46 S45 S26 S63 S05 S40 S07 S7322 Vineland Research and Innovation Centre
  23. 23. Existence of Segmentation Dependent variable: Experienced Liking – Expected Liking Source F Sig. Intercept 3.342 0.071 Cluster 1.072 0.347 Subject(Cluster) 10.138 0.000 Appellation 1.71 0.192 Sub-appellation 3.323 0.069 Price 0.253 0.615 Cluster * Price 22.342 0.000 Cluster * Appellation 3.312 0.038 Cluster * Sub-appellation 6.024 0.003 Appellation * Price 0.139 0.70923 Vineland Research and Innovation Centre Subappellation * Price 0.273 0.602
  24. 24. Effect of extrinsic cues on liking differential between clusters 2 1.5 1 0.5 *** * (*) 0 Cluster 1 Cluster 2 Cluster 3 -0.5 -1 Niagara P. None Beamsville None $13-15 $16-2024 Vineland Research and Innovation Centre
  25. 25. Cluster description 2 1.5 1 0.5 0 Cluster 1 Cluster 2 Cluster 3 -0.5 -1 Niagara P. None Beamsville None $13-15 $16-2025 Vineland Research and Innovation Centre
  26. 26. Clusters’ description Demographic and attitudinal data were collected Few variables explain the difference between clusters Cluster 3 tend to purchase less often wine (monthly rather than weekly) Cluster 3 tend to drink more white wines whereas Cluster 1 and 2 tend to drink equally white and red wines Cluster 1 tend to drink wine less frequently (once a week or less) whereas cluster2 and 3 tend to drink wine several times a week Cluster 1 tend to store less wines at once (1-10 vs. >10)26 Vineland Research and Innovation Centre
  27. 27. Discussion Do consumers reading the sub-appellation name on the wine label generate quality expectations? Are those confirmed or disconfirmed after sampling the wine? Majority of involved wine consumers were sensitive to the presence of a sub-appellation when tasting the wines Encouraging for the Ontario wine industry Controversial because of the lack of sensory differentiation Other clusters were more price driven Cluster 3 seems more sensitive to the wine quality/price ratio Wine quality needs to match the expectations created27 Vineland Research and Innovation Centre
  28. 28. Discussion Our results confirmed that the 3 extrinsic cues tested were strong quality signals, although the wine intrinsic quality remained similar. Prevalence of extrinsic cues over the sensory experience has already been shown by Lange (2000) on Burgundy wines and Lange et al. (2002) on Champagne wines. Wines were different. D’ Hauteville et al. (2007) showed that the region effect on perceived quality could vary with the type of wines and the level of respondent expertise.28 Vineland Research and Innovation Centre
  29. 29. Discussion Price also moderated the quality experienced by consumers when tasting similar wines Positively for Cluster 1, negatively for Clusters 2-3 Almenberg and Dreber (2009) reported that disclosing the high price of a wine before tasting increased quality rating by women Demographics and attitudinal data failed to explain the behavioural differences between clusters.29 Vineland Research and Innovation Centre
  30. 30. Acknowledgements This project was funded by the OMAFRA/University of Guelph program #26480 It has been reviewed and received ethics clearance through the Research Ethics Board at Brock University (File # 07- 286), where the data collection took place. Jim Willwerth and Dr. Andrew Reynolds, Brock University for providing the experimental Riesling wines Dr. Johan Bruwer, University of Adelaide and Senior Research Fellow - VRIC Erika Neudorf, Research Analyst - VRIC30 Vineland Research and Innovation Centre