“I had a $100 wine once. It wasn’t that good at all. I wish he hadn’t wasted all that money.”An acquaintance told me that recently. As it turns out, that’s what every American believes -- although the numbers change for each person, according to a wine marketing guru I had the pleasure of dining with last week.
Research has shown that American wine drinkers all have a price point where they feel comfortable, whether it’s $5 a bottle, $25 or $125. And at every price point, Americans think cheaper wines are crap, while more expensive wines are a waste of money.
It doesn’t matter where the price point is. People who buy $5 bottles of wine think $3 wine is crap, while people who buy $50 bottles of wine think $100 bottles of wine are a waste of money.
Do you see yourself here? I do, even though my price-comfort range is wider than most people’s because I taste so much wine. There are only a few wines under about $9 that I don’t consider plonk (Vinho Verde is the major exception). I’m not sure what my upper limit is, because I get to taste expensive wines all the time, and some of them are great. Yet I was on the Sine Qua Non mailing list for a while, but dropped off because I realized that savvy purchasing would get me wines I liked as well for much less money.
This price-classification turns the traditional 4 P’s of marketing -- price, product, promotion and placement -- on its head.
With most products, the product itself is the most important thing. If you buy Crest toothpaste, you’ll stick with it even if Pepsodent is 25 cents cheaper; maybe even if it’s a dollar cheaper.
But few wine consumers are brand-loyal. If someone’s favorite Argentine Malbec is $10.99 and there’s one from the same region for $9.99 next to it, he’ll try the cheaper one. But if there’s also one for $6.99, he’s likely to sneer at it as plonk.
The exceptions to the absence of brand loyalty tend to be drinkers of the cheapest wines. Beringer White Zinfandel fans feel about Sutter Home White Zin the way Ford buyers feel about Chevys. And Almaden and Carlo Rossi drinkers are also very loyal: they’ve find their drink, and they’re sticking with it.
We wine lovers don’t often think of Carlo Rossi drinkers as part of our gang, but they are: only 61% of American adults drink any wine at all, ever.
Moreover, 80% of American wine consumption comes from just 17% of the population. As wine sales are continuing unabated throughout the Great Recession, that means some of us are doing a whole lot of consuming to keep the wine industry afloat.
Moreover, because many of us are not brand-loyal, we’re spreading our support around. Aren’t we generous? Just don’t try selling us any of that half-price plonk or those overpriced ripoffs. We know the best wines are all priced just right.
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2 comments:
Hi Blake,
Great read. I have been doing a lot of work and discovering that there is an interesting facet to the very large sweet wine consumer segment that goes a long way to explain the observation: "The exceptions to the absence of brand loyalty tend to be drinkers of the cheapest wines. Beringer White Zinfandel fans feel about Sutter Home White Zin the way Ford buyers feel about Chevys. And Almaden and Carlo Rossi drinkers are also very loyal: they’ve find their drink, and they’re sticking with it."
Consumer taste sensitivity, preference and behavior research I have have been conducting shows clearly the wine industry has slowly disenfranchised sweet wine drinkers around the world over the past 60 years. The wine community has created the position that sweet is bad (in spite of sweet wine being favored in France, Italy and even the UK for centuries) and that is is the 'wrong' choice with food. This has also created a 'sweet is cheap' attitude and low, artificial price ceiling for sweet wines in general.
In fact, this segment of the population (sweet wine dirnkers)has the highest level of taste sensitivity and they frequently turn to other beverages, particularly cocktails, when they want to spend more money: having drinks with friends, dining out or celebrating. We are simply giving their business away. The spririts industry is delighted to have their dollars. The wine industry just rants on.
Dr. Virginia Utermohlen at Cornell University, who I have been working with for several years now, has been conducting research that shows people with sensory hyper-sensitivity tend to glom onto products and brands and become the most brand loyal of all customers. This also explains some the the 'talk dry but drink sweet' brands that have emerged over the years: from Yellow Tail to KJ Chardonnay to Rombauer today.
Their is a big opportunity here for the wine industry if we can get off our high horses. Turns out that we have a great number of things wrong about the histoical place of sweet wines and the consumers who drink them. But that is a longer story!
It is like the line about advertising: "I know that 75% of what I spend on advertising is a waste of time and money. The problem, is, I can't tell which 75%."
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