Date of Defense

4-20-2016

Date of Graduation

4-2016

Department

Marketing

First Advisor

Marcel Zondag

Second Advisor

Frank Gambino

Third Advisor

Ann Veeck

Abstract

The wine industry is extremely fragmented with few manufacturers holding a substantial market share while contending with each other for limited shelf space and shoppers. At the same time, the large selection of wines available challenges retailers and manufacturers to make wine selection and purchase as pleasant and convenient as possible for shoppers.

Retail stores, referred to as “off-premise” are the predominant outlet for purchasing alcohol. Shoppers are exposed to a wide variety of prices, bottle sizes, grape variety, etc., but the traditional in-store displays lack in the most important information for shoppers — how to navigate the aisle and find the wine that meets their requirements for price, taste, occasion and what yet other variables make up shoppers’ wine purchase decision. This may well cause the shopper to become overwhelmed in the aisle and create psychological pressure in having to select the right wine for the intended consumption occasion.

The value of a product is created from a combination of factors such as the market price and ability to satisfy the consumer’s needs or requirements. Given that wine is enjoyed and valued mainly on sensory factors (color, smell, taste), its value can therefore not be estimated prior to purchase, so a wine shopper must either use previously known information, either their own or obtained from other sources, or obtain “immediate knowledge” while in the wine aisle, for instance from the presentation on the shelf, to drive purchase decisions.

Prior wine research mainly focuses on consumption behaviors and patterns when suggesting marketing strategies for wine and does not normally account for the difference in shoppers’ value perceptions that exist between the on- and off-premise purchasing contexts.

Current research also indicates that shoppers will weigh additional aspects such as price, brand and grape variety when selecting wine for purchase. This holds that consumption elements such as taste, smell, and color and occasion factors such as celebration and entertaining do not translate directly to the purchase decision factors available in a store setting, possibly causing increased stress and anxiety for shoppers in selecting wine.

Recognizing this gap in the the research, this study utilizes the segmentation of wine shoppers based on both purchase patterns and consumption patterns as developed by Constellation Brands. The different shopper segmentations vary on many elements of the shopping experience. These variances are highlighted through the Constellation segmentation with the additional attributes taken into consideration beyond the traditional segmentation that utilizes macro-level demographics. With statistically significant differences on key questions associated with wine aisle organization and wine aisle features, it is crucial for retailers to evaluate who the key shopper segments are and tailor their wine aisle design to assist the wine shopper with their purchase.

We think that these results speak to a need for further research into developing a robust standardized method for developing a retailer-specific wine shopper inventory, providing the opportunity to quickly, and at relatively lower costs, develop a data-based shopper marketing strategy using a more comprehensive wine segmentation.

Access Setting

Honors Thesis-Restricted

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