Foregone profit in the wine industry

Author: Neuninger, Rosemarie; Mather, Damien William; Duncan, Tara

Date: 2015-06-02

Type: Working or discussion paper

Link to this item using this URL: http://hdl.handle.net/10523/5690

University of Otago

Abstract

Background and Aims: Wine awards are frequently used as extrinsic cues for wine categories. The aim of this paper is to show the forgone profit arising from failures to make optimal use of awards when positioning wine brands to consumer segments. Methods and Results: Four award statuses were tested: a well-known award, multiple awards, a fictitious award used as a control (an award without consumer trust) and, no award. Participants tasted eight wine samples: the first four without extrinsic cues; the next four used extrinsic cues with varying award status. Each sample was rated for liking, likelihood to buy and price willing to pay. Low-involvement consumers’ perceived liking and price willing to pay were improved by multiple (real gold) awards compared to high-involvement consumers. Conclusions: Trust in awards increased the price consumers were willing to pay for wine with an award. For high-involvement consumers who distrusted awards, multiple wine awards and fictitious awards negatively influenced perceived liking, likelihood to buy and price willing to pay. Significance of the Study: This is the first study to report on the combined influence of wine awards and consumers’ sensory perceptions of wine on perceived liking, likelihood to buy and price willing to pay.

Subjects: Wine awards, sensory perceptions, trust, distrust, involvement, generalised linear model

Citation: ["Neuninger, R., Mather, D. W., & Duncan, T. (2015). Foregone profit in the wine industry (Marketing working papers series No. 2). Retrieved from http://hdl.handle.net/10523/5690"]

Copyright: Attribution-NoDerivatives 4.0 International