We report the results of a study based on revealed and stated preference data on choice of Prosecco wines in retail stores close to the origin of production in Northern Italy. Emphasis is placed on ability to reconcile the utility structure of stated preference data with that underlying revealed preference data. We extend the analysis to cover nonattendance of key attributes, such as price and certification of origin, while controlling for the large range of brand effects.JEL classifications: C15, C25, Q13, Q18
This article investigates preference heterogeneity of wine consumers by using latent class models based on attitudinal questions. Such responses turn out to be an important source of additional information when the goal is to identify different groups of people with a similar wine preference structure. We assume that preferences are latent and the responses to attitudinal questions are the visible effect of this latent heterogeneity. In this study evidence is found of four different classes of respondents with similar response patterns. We focus on preferences for a well-known wine, the Prosecco, and use a sample of the population in the area of production. For each preference-class we estimate a class-specific WTP (willingness to pay) equation for this wine, so as to estimate the class responsiveness of WTP to various determinants. Estimates for a four-class model are discussed in detail to illustrate the potential of this approach in characterizing the preferences of local consumers for the two most common certifications of origin
Purpose
The purpose of this paper is to analyze the market of rosé wines in Italy, to outline retail strategies and to investigate to what extent the price is affected by branding these wines.
Design/methodology/approach
A survey has been carried out on retailers by collecting data about wines as intrinsic attributes (grape variety, blending, origin, alcohol content, etc.) and extrinsic attributes (brand, price, packaging, etc.) and about outlet and retail environment. The hedonic analysis required a rearrangement of data survey, while a Box-Cox transformation allowed to control the strong heteroskedasticity detected of the data.
Findings
Results provide strategies for still, semi-sparkling and sparkling rosé market segments. Still rosé wines are strongly differentiated, while the price is affected by the appellation, grape variety, blending, brand and outlet features. Two main strategies are suggested: the first focuses on appellations endorsing consumer’s brand loyalty; the second is driven by retailers while involving weaker brands. Different pictures emerged for semi-sparkling and sparkling wines, as producers and retailers tend to follow consumer’s preferences for fresh and easy drinking wines as well as to extend the product assortment.
Research limitations/implications
Results for sparkling rosé wines cannot be generalized. The high fragmentation hinders the hedonic model performance in capturing the price effects of brands, appellations, grape variety and wine blend.
Practical implications
The hedonic analysis provides suggestions for rosé wine producers that should reinforce their brand through associations among intrinsic attributes, such as appellation, and extrinsic ones, such as price, while satisfying retailer requirements.
Originality/value
The paper contributes to the knowledge base about the Italian rosé wine market, which is mostly export-oriented. Model results help to understand why the domestic consumption is stagnant with respect to other countries such as France or the USA.
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