Topic > Wine market: radical changes

IndexIntroductionObjectives and methodologyAnalysis of clusters and emerging segmentsConclusions and implicationsIntroductionIn recent decades the wine market has been characterized by radical changes on both supply and demand sides, thus making competition between increasingly complex and challenging wine producers. European countries that traditionally dominate the global wine industry, such as Italy, France and Spain, are increasingly facing intense competitive pressure coupled with a decrease in wine consumption, while “New World” countries, including including the United States, Australia, South Africa, Chile and Argentina, has experienced significant growth in both production and consumption (Anderson, 2004). Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay Major changes have also influenced consumer behavior, which has evolved from traditional to experimental and is increasingly influenced by complex factors that influence psychological and social needs (Moulton and Lapsley, 2001). Due to the forces of globalization, the dissimilarity of wine consumption between geographic areas has significantly reduced in recent years (Smith and Mitry, 2007). At the same time, quality has become a central element in wine purchasing decisions, especially in traditionally wine-drinking countries, where customers have shifted towards wines with regional or vineyard appellations. In the current scenario, a fundamental challenge for wine producers is to achieve a comprehensive understanding of the behavior and purchasing habits of wine consumers. Research in this field has made great strides in recent years, as demonstrated by numerous contributions aimed at determining consumer attitudes towards wine. . Since heterogeneity appears to be a key element of current wine markets, most of the studies proposed to understand wine consumer behavior are based on segmentation methodologies (Johnson et al., 1991; Bruwer et al., 2002; Thach and Olsen, 2006; Kolyesnikova et al., 2008). In fact, as clearly stated in marketing studies, to better understand the needs and purchasing habits of wine consumers and the characteristics of the wine that correspond to their preferences it is necessary to divide the markets into different segments, to be reached with specific marketing tools (Rouzet and Seguin, 2004). Given the diversity of objectives driving wine consumer behavior research, several methods have been used to segment wine markets, generally through the classic marketing segmentation variables: geographic, demographic, psychographic, and behavioral (Kotler and Keller, 2006). In his seminal work on Australian market segmentation, McKinna (1987) identified consumer clusters using lifestyle-based psychographic variables. His work was then expanded and empirically tested by Spawton (1991), who investigated wine purchasing behavior by focusing on consumer expectations and risk reduction strategies, thus identifying four main segments: "connoisseurs", "drinkers". aspirational”, “beverage wine consumers”, “new wine drinkers”. A segmentation approach based on psychographic variables was also used by Bruwer et al. (2001), who recognized lifestyle as an effective element for understanding wine consumption patterns and profiles. More specifically, using a new wine-related tool capable of measuring lifestyle, they identified the following segments of wine consumers in the domestic marketAustralian: inconspicuous premium wine drinkers”, “ritual-oriented conspicuous wine enthusiasts”, “fun-seeking social wine drinkers”, “fashion/image-oriented wine drinkers” and “basic wine drinkers”. Segmentation based on lifestyle has also been applied in the United States, but with the specific aim of highlighting consumption motivations and occasions (Thach and Olsen, 2005). Geographic variables are consistently adopted by international institutions, such as the International Organization of Vine and Wine (OIV) and the Organization Institute, which usually classify wine consumption data with reference to the countries or regions where consumers live. Some notable contributions have been produced by adopting a behavioral segmentation approach, which is normally based on variables such as occasions, benefits, brand loyalty, usage rate and so on. For example, Johnson et al. (1991) applied a behavior-based segmentation scheme combined with conjoint analysis, in order to determine the critical choice factors for each specific segment identified through consumer behavioral aspects. In their review of the literature on wine market segmentation, Thach and Olsen (2006) point out that some of the most significant studies on behavioral segmentation have been conducted by the Wine Market Council in the United States over the past decade. In particular, the US market was segmented based on the consumption rate and five main segments were identified: "super-core", "core", "marginal", "non-adopters", "non-drinkers". In most cases, behavioral bases have been combined with demographic ones, whose role in classifying the behavior of wine consumers is also well documented in the literature (Spawton, 1991). In fact, the research also collects various contributions aimed at comparing attitudes towards wine based on age or gender. An exploratory study on the behavior of young wine consumers is provided by Mattiacci et al. (2006), who investigated the cognitive elements that influence this particular market segment. Both behavioral and demographic variables were also used in a segmentation study conducted in New Zealand by Thomas and Pickering (2003), which identified the consumer profile substantially based on purchased volumes. Even considering such a relevant body of literature, research based on behavioral segmentation still seems to lack a holistic analysis of the entire wine purchasing process. Since the marketing literature recognizes the multi-phase nature of the purchasing and consumption process, we realized that in most cases only part of this process has been considered to arrive at market segmentation. This study attempts to contribute to partially filling this gap by adopting a cluster analysis technique capable of dividing the market into distinct segments based on both behavioral characteristics, from pre-purchase to post-purchase behavior, and socio-demographic ones. An empirical application is provided to illustrate methodological and practical insights of the developed framework. Objectives and methodology The main aim of this article is to propose a market segmentation approach based on all stages of the wine purchasing process. To this end, we studied the main components of wine purchasing behavior and the socio-demographic profile of those who are both buyers and consumers of wine. In order to acquire useful information that can guide the formulation and implementation of marketing strategies, scholars and marketing professionals agreeon whether to focus on the entire customer decision-making process rather than just the purchase decision. It is known, in fact, that the purchasing process begins well before the decision itself and entails very interesting consequences that last over time (Kotler and Keller, 2006). Similarly, we believe that, to better understand the characteristics of the different market segments, it is necessary to analyze the individual phases of the purchasing process in order to highlight what really classifies the different types of customers. As noted previously, research in the field of wine market segmentation appears to lack a holistic understanding of the individual aspects that determine the consumer's purchasing decision. Try to contribute to partially filling this gap in the literature by: selecting variables relating to the entire purchasing process; proposing an empirical application of the developed approach. Starting from the literature on consumer behavior, we identified six phases in the purchasing process and operationalized each of them by selecting the variables to include in the investigation: The perception of Need: refers to the various situational factors and mental states that trigger the decision-making process . We have considered the main reasons that lead to the decision to purchase wine, referring to the following components: the utilitarian one (e.g. "it is good for my health"), the social one (e.g. "for reasons of status and social prestige"), the cultural and experiential (e.g. “For personal gratification”). The search for information: includes all the actions undertaken by the potential customer to identify the most suitable product to solve the perceived problem. The survey considered two macro-categories of information sources: internal or empirical sources (i.e. consumption experiences already had in the past), and external sources, in turn divided into personal sources (i.e. family and friends), commercial sources (i.e. advertising , promotions, etc.) and public sources (e.g. films, books, etc.). The evaluation of alternatives: concerns all the products that make up the buyer's "consideration set". With reference to this aspect, the survey investigated the type of wine most often purchased (i.e. red, white, etc.) and the origin of the wine purchased (i.e. regional wine, national wine, foreign wine, etc.). The purchase decision: the reference is to all the choices and actions that lead to the actual purchase of the product. We considered: the place where the wine is purchased (e.g. winery, supermarket, restaurant, etc.), the factors that influence this decision (e.g. price, quality, origin, etc.), and the average expenditure for the purchase. The use of the product: includes all the factors that determine the overall enjoyment of the wine. In particular we considered: consumption opportunities, also in relation to the frequency of consumption, and the way in which the wine is experienced (i.e. which attributes best describe the wine in the opinion of consumers). Post-purchase behavior: as is known, satisfaction with the product leads to the intention to repurchase it. We considered the declared loyalty to the type of wine and the brand loyalty compared to the wine usually purchased. We applied the developed approach to wine market segmentation in an empirical study, conducted in the Campania region (in Southern Italy). The study focused on those responsible for purchasing the wine, who were themselves users of the product. We conducted 630 interviews during the summer of 2010. All individuals were approached by the interviewers and informed about the purpose of the study and then asked if they would like to participate in the survey. We considered two initial "filter questions": only those were interviewedwho were both buyers and consumers of wine. We used a structured questionnaire, containing multiple choice questions on the various phases of the process described above. In the last section, the main socio-demographic characteristics of the interviewees were identified. The sampled individuals were representative of the different wine buyer and consumer profiles (Table To identify the most relevant segments of wine consumers, we performed a cluster analysis with SPAD v56. The criteria used in the hierarchical classification included both socio-demographic characteristics which behavioral variables. Cluster Analysis and emerging segments The results we obtained from the cluster analysis showed four market segments: "Domestic hedonists", representing 31.34% of the sampled individuals, "Image-oriented drinkers", which represent 20.36% of the sampled individuals”; Eclectic Consumers”, which represent 30.12% of the sampled individuals; “Conservative Consumers”, which represent 18.18% of the sampled individuals features that characterize the identified segments, we put them into two-dimensional maps (Figure 1). The first dimension we considered (vertical axis) is related to the benefits associated with the purchase and consumption of wine: at the top we find consumers mainly motivated by functional and utilitarian reasons; At the bottom we find consumers motivated mainly by aesthetic and symbolic reasons. The second dimension that we considered (horizontal axis) is related to the type of wine consumption, considering both the occasions and the places where it is usually drunk: on the right we find consumers who usually drink wine outdoors, in public places and/or or at social events; on the left we find consumers who usually drink wine at home, for lunch/dinner or with friends. The main characteristics of the identified segments are highlighted below: Domestic hedonists: Consumers in this segment are mainly female, middle-aged (34-55) and have received tertiary education. They drink wine only on weekends, when they invite friends and relatives to share lunch or dinner, which is consistent with a “socially oriented” view of wine consumption. They have a number of “safe brands” from which they choose their wine and show considerable interest in the origin of the wine they drink. Image-oriented drinkers: Consumers in this segment are young men/women (under 34 years old) who drink wine in restaurants and public places. They experience pleasure and satisfaction in choosing and drinking the “right” wine and appreciate the image that drinking wine portrays towards others. For this type of consumer, wine is a "status symbol"; therefore he tends to have the idea that the more expensive the wine, the better it is. Image-conscious drinkers also pay close attention to the place of origin and the different combinations between food and wine. They are often in the early stages of wine consumption: consequently, when choosing wine, they seek information and are often guided by the sommelier and other opinion leaders. Eclectic Consumers: Consumers in this segment are relatively educated compared to the general population and aged between 45-54 on average. When they buy wine they do not take into account the occasion on which the wine will be drunk and they look for little information. Eclectic consumers drink wine because they like it and consider wine consumption a natural and genuine habit. They are attentive to price, quality and place of origin. They have 2-3 safe brands from which they choose their wine and make the best choice based on previous experience. Conservative consumers: the average age of this segment is higher than the others (more than.