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Introduction
How does a winery successfully build its customer base? One
method may be to start cultivating relationships with the
millennial generation potentially 76 million new customers.
The millennials were born between 1977 and 1999 and are
the children of the baby boomers (Lancaster and Stillman,
2002). They are considered to be the largest consumer group
in the history of the USA with annual incomes currently
totaling $211 billion (Harris Interactive, 2001).
Two important keys to building a relationship with this
generation is understanding and responding to their wishes
and needs. This research focuses on the tasting room
experience with the millennial generation; on building loyal
millennial wine drinkers that will continue to purchase the
winerys brand after the tasting room experience is over. By
getting to know the millennial wine consumer, wineries can
learn how to meet the customers expectations for the type of
tasting room experience that will lead to positive word of
mouth, wine club memberships, and repeat purchases.
Previous research has shown that perceived wine quality
along with consumer perceptions of fair pricing relative to
quality are two critical success factors for building brand
equity (Nowak and Washburn, 2002). But what else can the
winery do to create loyal millennial customers? Perhaps one
way is to build strong emotional connections. Therefore, the
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Brand equity
All wineries strive to build brand equity. It is the incremental
value added to a product because of its brand name
(Farquhar, 1994). This value can be reflected in the price
premiums that customers are willing to pay for a particular
wine brand or this value can be a loyalty or commitment
toward a brand that is difficult to articulate in measurable
terms. According to Aaker (1991, 1996) brand equity is a
multidimensional concept that consists of brand loyalty,
317
Customer satisfaction
All businesses understand that satisfying customers is
important for positive word-of-mouth, repeat business, and
profitability. However, researchers and practitioners alike have
been proposing that merely satisfying customers is not
enough anymore (Keiningham et al., 1999). In fact, Yeung
et al. (2002) analyzed customer satisfaction data and financial
performance data from approximately 100 firms over a five
year period and found that there is a direct linear relationship
between customer satisfaction and profitability. In other
words, with increased satisfaction came increased profits.
Anderson et al. (1994) found that high levels of customer
satisfaction are correlated with superior economic returns.
Some researchers and practitioners call extremely satisfied
customers delighted customers (Keiningham et al., 1999).
It has been proposed that customers have a range of
satisfaction, referred to as the tolerance zone and within
this range of satisfaction differences between firms does not
produce much change in customer behavior, and therefore
profitability. However, it is believed that moving satisfaction
scores beyond the upper threshold of this zone of tolerance
318
Product quality
Nowak and Washburn (2002) found that among wine
consumers, product quality is the strongest predictor of
brand equity. Anderson et al. (1994) found that quality was a
significant predictor of customer satisfaction and that this
relationship, over the long term, was an important predictor
of superior economic returns through repeat sales. Novice and
expert wine consumers will assess quality using a variety of
cues: their senses, price, brand name, awards, ratings,
growing
region,
the
winerys
reputation,
and
recommendations from other wine drinkers.
For some novice wine drinkers, a sweet wine such as a white
zinfandel might be considered a wine of good quality because
it is enjoyable to drink, has a pretty label, and is a brand name
they recognize. A novice wine drinker may not be able to
appreciate the taste of a $100 bottle of award-winning
zinfandel, but the price would certainly hint at its quality and
act as a substitute for a sophisticated palate. In fact, Lockshin
and Rhodus (1993) found that there was a positive
relationship between price and perceived quality by
consumers. Consumers were either unable or unwilling to
trust their own palates. However, they found that as a
consumers knowledge of wine increases, the reliance on
external cues to determine quality tends to decrease.
Regardless of how a wine consumer assesses quality, past
research supports the premise that the higher the level of
perceived wine quality, the higher the level of repurchase
intention.
Research question
Millennials are considered to be practical and often look for
value in their consumption choices (Harris Interactive, 2001).
How would positive emotion factor into their attitudes toward
a brand? Based on the literature, the authors propose that
positive emotion will have a positive relationship with
attitudes towards a wine brand. Previous findings regarding
the importance of customer satisfaction, product quality,
perceptions of fair pricing, service quality, and feelings of
commitment as factors that contribute to building brand
equity must also be evaluated in millennial consumers.
Therefore, the authors propose that:
H1. The higher the level of customer satisfaction,
perceptions of fair pricing, product quality, service
quality, commitment, and positive emotions,
associated with the winery visit, the higher the level
of reported brand equity by the millennial consumer.
Service quality
The customer interface is another area in which a winery can
differentiate itself from the competition. Successful firms
realize that every interaction with the customer can make or
break the relationship (Brown, 2003). Customer contact
employees need to understand that often they are the key to
delighting the customer and creating lasting, positive
memories. Tasting room staff can never have a bad day or
appear snooty. Not enough staff to handle a surge of
customers in the tasting room can be the kiss of death, leaving
the customer with a feeling of just being one of the crowd
and not appreciated by the winery.
All internal operations that interface with the customer are
also critical. Employees should be empowered to handle
customer problems, such as adjusting a customers bill,
without the delay of management approval. Phone calls and
e-mail inquiries should be returned promptly. Customers
appreciate it when a firm learns the customers preferences
and buying habits (Lemon et al., 2001). Customer databases
should be carefully maintained for all customers: distributors,
retailers, restaurants and end consumers. Even internet sales
can be personalized. For example, Amazon.com does a great
job of personalizing their relationship with the customer by
sending e-mail order acknowledgements to customers signed
with the name of a real person and urging the customer to
call or e-mail with any questions. When a customers order is
shipped, the customer receives yet another e-mail saying when
it was shipped and what day to expect it, signed by the same
real person.
Methodology
Subjects and design
Millennials, aged 21 through 28, were asked to visit a winery
they had never visited before and then fill out the
questionnaire evaluating the winery on product quality, fair
pricing, positive emotions felt, overall customer satisfaction,
brand equity, feelings of commitment, and service quality.
The participants were asked to visit the wineries on a weekend in order to control for volume of traffic as a determinant
of customer satisfaction. The participants were also asked
their ages, their gender, and approximately how many
wineries they had visited in their lifetime. Individuals
participating in this study were 80 MBA and undergraduate
business students from a public university in California. The
sample included 41 men and 39 women. The number of
times they had visited wineries in their lifetimes ranged from 0
to 200, and the mean number of visits was 13.975. All had
easy access to local wineries.
Measures
The strength of the emotional bond was measured using two
of Richins (1997) consumption-related emotion sets, joy and
excitement. The components of joy and excitement are happy,
pleased, joyful, excited, thrilled, enthusiastic, and delighted.
The participants were asked to indicate, using a 7-point
Pricing
Perceptions of fair pricing have been found to be highly
significant predictors of brand equity in the wine industry
(Nowak and Washburn, 2002). There are three general types
319
Results
Multiple regression was used to test customer satisfaction,
product quality, fair pricing, service quality, commitment, and
positive emotions as predictors of brand equity. The multiple
regression model found customer satisfaction not to be a
significant predictor of brand equity. This was not
unexpected, since customer satisfaction was found to be
highly correlated with both positive affect and service quality.
The results of the second model that excluded customer
satisfaction are in Table I. Commitment was the strongest
predictor of brand equity. Product quality and positive
emotions were also highly significant. The model predicted
approximately 61 percent of the variance in brand equity. The
F score for the model was 26.102 at a significance level of
0.000.
Discussion
The results of this research empirically support the anecdotal
evidence that through positive emotions associated with the
tasting room experiences, wineries can cultivate relationships
with millennial customers that may lead to long-term,
Table I Multiple regression: predictors of brand equity as evaluated by
millennial consumers
Customer commitment
Positive emotions
Product quality
Service quality
Fair pricing
Beta
t score
Significance
0.507
0.244
0.250
0.186
0.157
5.645
2.617
2.562
1.903
1.871
0.000
0.011
0.012
0.061
0.065
Conclusion
In conclusion, this study focused on the tasting room
experience for millennials and how a positive emotional
320
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321
research undertaken and its results to get the full benefits of the
material present.
Emotional attachment
The millennial generation, or Y Generation, Nexters or echo
Boomers, are worth getting to know. As children of the Baby
Boom generation there are a lot of them around. Born
between 1977 and 1999, and aged between seven and 29,
they are not only large in number, but have cash to spend. In
the USA there are estimated to be 76 million of them or, to
put it another way, they are the largest consumer group in
American history. Their annual incomes total around $211
billion of which they spend $172 billion per year and save $39
billion.
They are not a generation that smart marketers are likely to
ignore. Interest in them, as may be imagined, is keen. A study
by academics from Sonoma State University in California has
examined the issue of building loyalty among the millennials
within the states vineyards, or wineries. Their focus has
been on the tasting rooms that characterize the American
winery experience. For those feeling uneasy, rest assured,
those at the younger end of the segment were nonparticipants in the wine drinking implicit in the survey. The
sample was from among students, and presumably willing
ones at that.
Building emotional connections with the millennial
generation
Those charged with developing brands know that, in the end,
it is emotion in the customer that is key. In the wine business
quality, and perceptions of value (essentially relating quality
to the price) are the twin pillars of brand building. Without
them there is very little except undifferentiated cheap plonk.
However, if emotional connections can be built, then
opportunities for brand loyalty will grow significantly, and
customer loyalty is the heart and soul of successful businesses
everywhere.
It is not a quick and easy process, but few worthwhile
activities are when it comes to brands. New customers may be
attracted by the glitter of promotions. Loyalty through
emotion marketing involves showing that you care, day after
day. Yet forming a positive emotional bond will bring lasting
competitive advantage. Quality and pricing that reflects value
provide the foundations from which the brand is built.
Emotional components provide the differentiation that makes
a brand special.
So what do marketers understand about the millennial
generation? For legal reasons wineries are interested in those
aged between 21 and 29. They are a generation that are
drinking more wine than their predecessors, the Generation
Xers, and seem to be responsible for wine drinking becoming
increasingly popular in the USA. In examining the traits that
affect their consumer purchasing behaviour, these have been
identified as:
.
being very technologically savvy, with the internet a
primary source of information;
.
being aware of the environment and corporate social
responsibility issues; and
.
a belief in balance between work and life, between fun and
responsibilities.
Executive summary
This summary has been provided to allow managers and executives
a rapid appreciation of the content of this article. Those with a
particular interest in the topic covered may then read the article in
toto to take advantage of the more comprehensive description of the
322
Those who take the trouble to get to know the segment can
achieve very successful outcomes. Those who dont can find a
brick wall of cynicism to bump into.
What to concentrate on
Positive emotion has a direct correlation with customer
satisfaction, a prerequisite for customer loyalty, and directly
related to purchase intention. In the wineries, satisfied
customers are seem to be willing to return, to bring their
friends, and to spend more on wine and the other goodies that
are offered for sale. It wont compensate for poor quality and
poor value, but if these are appropriately handled then serious
relationships can be built. The building blocks for this are:
.
Brand equity built upon customers beliefs that investing
time energy and money in an ongoing relationship with a
brand is worthwhile. For the brand owner, benefits
include the ability to charge premium prices.
.
Customer satisfaction in which mere sufficing alone is not
enough, but where those who can generate high levels of
customer satisfaction can expect to see this correlated to
high levels of economic returns.
.
Positive affect every interaction with customers in the
winery tasting rooms can be make or break, moments of
truth in fact. Emotions which can be triggered, positively
or negatively, have been identified as anger, discontent,
worry, sadness, fear, shame, envy, loneliness, romantic
love, love, peacefulness, contentment, optimism, joy,
excitement, surprise, guilt and pride.
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