Wowing the millennials: creating brand equity

in the wine industry

Linda Nowak, Liz Thach and Janeen E. Olsen
School of Business and Economics, Sonoma State University, Rohnert Park, California, USA

Abstract
Purpose – The purpose of the study is to examine the attitudes of millennial wine consumers and determine if positive affect in tasting room situations
leads to higher levels of brand equity for the winery.
Design/methodology/approach – A survey was developed to evaluate winery tasting room experiences based on standardized brand measurement
scales. In total 80 millennials visited tasting rooms and then completed the survey to evaluate their experience.
Findings – 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, profitable relationships through continued
patronage and brand loyalty.
Originality/value – Practical application of this study suggests that carefully orchestrating a tasting room experience to create a positive experience
for the millennial customer appears to be a critical component of post-purchase attitudes and building brand equity. In addition, customer commitment,
product quality, service quality, and fair pricing are also significant predictors of brand equity.

Keywords Brand equity, Wines, Customer service management, Youth, Individual psychology, United States of America

Paper type Case study

An executive summary for managers and executive
readers can be found at the end of this article.
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
winery’s 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
The current issue and full text archive of this journal is available at
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Journal of Product & Brand Management
15/5 (2006) 316– 323
q Emerald Group Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/10610420610685712]
purpose of this study is to examine the attitudes of millennial
wine consumers and determine if positive affect, in
combination with factors such as service quality, product
quality, fair pricing, feelings of commitment towards the
winery, and customer satisfaction with the tasting room
experience lead to higher levels of brand equity for the winery
in this particular segment of the wine market.
Theoretical background and development of
research questions
About the millennial consumer segment
The millennial market segment in the USA is estimated to be
currently between the ages of 7 and 29 (Lancaster and
Stillman, 2002), but is being heralded by most major
consumer product companies as a generation with very high
buying power (Harris Interactive, 2001; KeyFindings, 2004).
They are also referred to as the Y Generation, Nexters, and
Echo Boomers – the later title a tribute to the claim that they
are primarily the children of the baby boomers. According to
Lancaster and Stillman (2002), they are approximately 76
million in size.
Not only is the millennial generation much larger than their
previous generation, the gen Xers, at 46 million; they are also
reported to be very market savvy when it comes to consumer
purchases. Even at their current young age, they are attributed
to have annual incomes totaling $211 billion; spend
approximately $172 billion per year and save $39 billion per
year (Harris Interactive, 2003). According to Fernandez-Cruz
(2003, p. 1), “quickly surpassing its parent generation,
Generation Y has grown up in a media-saturated, brand-
conscious world, and is keeping advertisers on their toes.”
They not only have a lot of their own money, but they
influence family purchases. Many have been given parent
co-signed credit cards at a young age, and perform the grocery
shopping for their families (Neuborne, 1999). Research shows
that they are savvy when it comes to brands (Moriarty, 2004),

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Linda Nowak, Liz Thach and Janeen E. Olsen
and value quality products when sold at a fair price (Key
Findings, 2004).
The reason they are of interest to the wine industry, is
because those that are between the ages of 21 and 29 have
begun to adopt wine in increasing numbers. According to the
Wine Market Council (2003), millennials are already
consuming larger quantities of wine than the previous
generation of Gen Xers. Furthermore, a recent Gallup Poll
(Seed, 2005) identified millennials as part of the reason for
the increased popularity of wine in the USA.
The millennial generation is known for certain traits and
behaviors which may influence their purchasing decisions. A
primary trait is that they are very technology savvy. Most have
grown-up with the Internet and are adept at using it for
product research and purchasing. According to Moriarty
(2004), the Internet is their primary source of information
and they trust it. A second trait is their concern for the
environment and social responsibility issues. They have been
known to boycott brands which they perceive to be violating
these values (BusinessWire, 2004; Neuborne, 1999). Related
to this is a concern for diversity. Not only have they grown up
in an age in which diversity was taught in school, but one-
third of the millennial generation is non Caucasian (Key
Findings, 2004). Therefore, they look for, and expect to see,
advertising that includes diversity of race and gender.
Other traits and behaviors that distinguish this generation
include their very optimistic nature and belief that they can
make a difference in the world (Lancaster and Stillman,
2002). This is balanced by a strong practical streak. They are
reputed to be financially savvy, and don’t like owing money.
Because of this, they often seek brands which provide quality,
but at a fair price, and prefer advertising that is “disarmingly
direct” (Neuborne, 1999). A final characteristic is their belief
in work/life balance. Millennials tend to believe that life
should be fun and enjoyable, but at the same time they do
want responsibility and challenge on the job. According to
Harris Interactive (2001, p. 1), millennials exhibit “a well-
balanced mixture of mind and heart.”
Examining the characteristics and traits of the millennial
generation is useful for marketers, as it suggests new
marketing strategies to reach this large and affluent
segment. Indeed, according to Neubourne (1999, p. 4),
“marketers who don’t bother to learn the interests and
obsessions of Gen Y are apt to run up against a brick wall of
distrust and cynicism.”
Building emotional brands to increase market share
If any business is successful at forming a positive emotional
bond with the consumer, it has a competitive advantage.
Some marketers refer to this as “share of heart”. Day (1989)
describes how important it is to appeal to the consumer on a
personal and emotional level. She talks about creating
products and then ad campaigns that will “win the hearts”
of the customer. Share of heart leads to market share. But
other factors contribute to market share also. For example,
new buyers can be attracted to a wine simply through special
promotions (e.g. price discounts, coupons), but marketers
warn that often these special promotions do not create brand
loyalty (Schultz and Robinson, 1986). Deal-prone consumers
can comprise a significant portion of a firm’s market share,
but how long will they be there? Building share of heart is a
good defense against aggressive promotional efforts (e.g. price
deductions) by other wineries.
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Emotion marketing is neither quick nor easy to employ, but
the results can be measured in loyal customers who spend
more and stick with the brand longer (Robinette et al., 2002).
Loyal customers make a difference in the bottom line.
Forming an emotional bond with a customer involves showing
them that the winery truly cares about their customers as
people. Product quality and fair pricing still form the
foundation for a successful brand, but the emotional
components of a brand can be effective in differentiating a
wine from its competitors. Emotional marketing which
incorporates lifestyle-based persuasive communication
targeting selected audiences, such as the millennial
generation, may have a positive impact on brand equity
(Orth et al., 2005).
Emotion marketing is not just a heart-tugging advertising
campaign that is eventually forgotten. It is a total company
effort by employees, events, and communications (e.g. events,
phone calls, e-mails, and newsletters) to give the customer a
tremendous sense of belonging and camaraderie. The tasting
room experience is a perfect place to start building this
relationship with younger wine consumers. Consumers are
emotional beings and they strive to meet their higher-level
needs in every aspect of their lives (Robinette et al., 2002). We
see consumers trying to meet their emotional needs through
their consumption choices, through where they dine out, what
they wear, what they drive, and of course, their alcoholic
beverage choices. This is especially true in the case of the
millennial generation in regards to wine adoption (Olsen et al.,
2006).
Oliver et al. (1997) found that positive emotion (positive
affect) had a direct and significant effect on customer
satisfaction which then leads to purchase intention. Research
has shown that other factors also contribute to repurchase or
future purchase intentions. A strong emotional marketing
campaign can not make up for poor quality, lousy service, or
too high of a price (Robinette et al., 2002). Excellent
customer service becomes a key factor in pleasing customers
and gaining a share of their heart. Charters and O’Neill
(2001) found that dealing with customers in a speedy,
sensitive, and sympathetic manner is more important than the
facilities, the decor, or the wine offered for tasting.
Customer satisfaction has a significant and positive effect
on the profitability of a firm (Yeung et al., 2002). Satisfied
customers return to the winery, bring their friends, and spend
more on both wine and wine accessories than typical first time
visitors (Dodd, 1999). Yu and Dean (2001) found that the
affective (emotional) component of customer satisfaction was
a better predictor of customer loyalty than the cognitive (price
and quality) component. In their study, positive emotions
were the best predictor of overall loyalty and positive word of
mouth. Building loyalty for a brand is one way to build brand
equity. Therefore, positive affect as a means of building loyal
wine consumers is an important topic for the wine industry.
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,
 Brand equity in the wine industry
Linda Nowak, Liz Thach and Janeen E. Olsen
brand awareness, perceived quality, brand associations, and
other proprietary brand assets. As a measurable asset, brand
equity may increase cash flow to the firm (Simon and
Sullivan, 1993) and competitive advantages based on
nonprice competition (Aaker, 1991).
A consumer’s attitude towards a wine brand is also a key
component of brand equity. Often, brand attitude reflects the
extent to which a firm has been able to create close emotional
bonds with the customer (Lemon et al., 2001). In the wine
industry, loyalty programs such as wine clubs, special
recognition or treatment such as invitations to member-only
functions, community-building programs such as support of
local schools or events, and knowledge-building programs
such as food pairing classes can build strong emotional bonds.
If a winery is able to help a customer feel a strong sense of
belonging and makes them feel like part of the family, then a
feeling of commitment towards the relationship with the
winery starts to be cultivated. Commitment is defined as a
consumer’s belief that an ongoing relationship is worth
investing time, energy, and money in (Sharma and Patterson,
2000). Hirschmann and Holbrook (1982) proposed that
extremely positive, consumption-related emotions are likely to
lead to very high levels of commitment.
The wine’s image is another component of brand equity
and can be critical when the customer’s use of the product is
highly visible to others (Lemon et al., 2001). The brand
becomes an extension of the individual, a statement the
individual can make to the world about himself or herself.
Everything a winery does that the public sees can affect the
brand’s image: label design, price, ratings, advertising,
customer service, community service, environmental issues,
which restaurants serve it, and which celebrity drinks it.
Brand equity for a winery is a competitive asset that is
developed over time. It is what may prompt a consumer to
purchase one wine with similar attributes and price over
another. It is a combination of factors such as brand loyalty,
brand awareness, perceived quality, brand image, and
attitudes toward the company and its wine (Orth et al.,
2005). Positive customer experiences should contribute to
positive attitudes towards the brand and thus contribute
toward building brand equity for the winery.
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
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creates exceptional results. For managers, this level of
customer satisfaction is commonly referred to as “customer
delight” (Keiningham et al., 1999). Schlossberg (1990) also
proposed that merely satisfying customers is not enough, that
you really need to delight them in order to build loyalty and
loyalty-driven profits. Whittaker (1991) proposed the same
concept when he said “although the elimination of defects is
critical to continuing customer satisfaction, increased
productivity, and decreased costs, it is customer delight that
is the key to survival in today’s markets”. Jones and Sasser
(1995) found that Xerox Corporation’s “totally satisfied”
customers were six times more likely to repurchase the
company’s products over the following 18 months than
customers who rated themselves as merely “satisfied”.
Roche Diagnostics Systems, a division of F. Hoffman-La
Roche Ltd health care, had rarely met its profit objectives for
nearly 20 years (Keiningham et al., 1999). Roche conducted
focus groups with its customers to determine their weaknesses
in the areas of product quality and customer service. It then
adopted a strategy focused on moving customers’ reported
levels of satisfaction beyond “satisfied” to the “very satisfied”
level by making improvements in those areas. Roche found
that by improving the quality of customer interactions with
their business (e.g. toll-free telephone support and ordering
assistance) that the number of “very satisfied” customers
increased, as did sales and profits (Keiningham et al., 1999).
Positive affect
Richins (1997) determined that there were over 17
consumption-related emotion sets. They are anger,
discontent, worry, sadness, fear, shame, envy, loneliness,
romantic love, love, peacefulness, contentment, optimism,
joy, excitement, surprise, guilt, and pride. He developed the
consumption emotion set (CES), which identifies emotions
that are relevant to consumers. Delight is considered to be a
descriptor of the “joy” cluster. Therefore, the two
consumption-related emotion sets that may be appropriate
for a study relating to wine consumption are “joy”, which is
comprised of the descriptors of happy, pleased, and joyful and
“excitement” which is described as excited, thrilled, and
enthusiastic. These descriptors could easily be included in
survey questions. Other feelings that may lead to positive
emotions and which may be associated with “share of heart”
are “sense of belonging”, “sense of being appreciated as a
customer”, “sense of being like family”.
The customer interface during the tasting room experience
is an 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. Helping a visitor feel special during the tasting
room visit may help the consumer develop a special
attachment to that particular winery (Olsen and Thach,
2006). Hirschmann and Holbrook (1982) proposed that
extremely positive, consumption-related emotions are likely to
lead to high levels of repurchase intentions.
 Brand equity in the wine industry
Linda Nowak, Liz Thach and Janeen E. Olsen
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 winery’s 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
consumer’s 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.
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 customer’s 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 customer’s 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 customer’s 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.”
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
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of pricing strategies: skim, penetration, and neutral (Holden
and Nagle, 1998). Wineries use all three of these strategies.
Skim pricing is the strategy of pricing a wine higher than its
competitors. Some wineries make a conscious decision to
deliberately price above the market average in order to
indicate superior quality or even luxury. The wineries that are
able to successfully use this strategy do so because of the
wine’s reputation for extremely high quality, prestige in
ownership, or collectability. When a winery decides to use
penetration pricing, it is a decision to price the wine lower
than the competition and low relative to the wine’s value, in
other words many wine consumers would consider it a “good
deal”. Neutral pricing by a winery would be an attempt to
eliminate price as a decision factor for wine consumers by
pricing neither high or low relative to the competition. This is
the strategy that most wineries are currently using.
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.
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 week-
end 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
 Brand equity in the wine industry
Linda Nowak, Liz Thach and Janeen E. Olsen
semantic differential scale, how often they felt these emotions
during their visit to the winery (never . . . always). The
Cronbach Alpha score for emotions was 0.943.
Three items were used to measure perceptions of fair
pricing, adapted from research conducted by Nowak and
Washburn (2002). The Cronbach Alpha was 0.860. Product
quality was measured with three items developed by the
authors for this study. Product quality was measured with the
following items: “Overall, I consider the quality of the wine to
be excellent”, “I believe that the general quality of the wine is
low”, and “The quality of the wine is generally (very poor . . .
excellent). The Cronbach Alpha was 0.866. All used a 7-point
scale.
Service quality was measured using three items and was
based on questions developed by Taylor and Baker (1994).
The Cronbach Alpha was 0.907. Brand equity was measured
with five items, adapted from a scale developed by Yoo and
Donthu (1997). The Cronbach Alpha was 0.924.
Commitment to the winery was also measured with three
items, adapted from research conducted by Meyer and Allen
(1991) and Bansal et al. (2005). The Cronbach Alpha was
0.915. All used a 7-point scale, with 1 anchoring “strongly
disagree” and 7 indicating “strongly agree”. The four
customer satisfaction items were based on a scale developed
by Oliver and Swan (1989), using a 7-point semantic
differential scale. The Cronbach Alpha score was 0.889.
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
Beta t score Significance
Customer commitment 0.507 5.645 0.000
Positive emotions 0.244 2.617 0.011
Product quality 0.250 2.562 0.012
Service quality 0.186 1.903 0.061
Fair pricing 0.157 1.871 0.065
Notes: F ¼ 26.102; adjusted r ¼ 0.614; sig. ¼ 0.000
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profitable relationships through continued patronage and
brand loyalty. Carefully orchestrating a tasting room
experience that creates a positive experience for the
millennial customer appears to be a critical component of
post purchase attitudes. Previous research into what drives
consumer behaviors supported the premises tested with this
small sample of millennials. Robinette et al. (2002),
emphasize that lifelong loyalty can be created by
emphasizing the emotional component of human
interactions, such as the importance of friends and family.
These authors also stressed that everyone who interfaces with
the customer must show that they truly care about them as
people. The goal is to help the customer feel a sense of
belonging and camaraderie. This is evidenced in the
regression model results in which commitment was the
strongest predictor of brand equity. In this study commitment
was measured with the following statements: “this winery
makes me feel like part of the family”, “I feel a special
attachment to this winery”, and “this winery makes me feel a
strong sense of belonging”.
Managerial implications
Kumar et al. (2001), in their article on the antecedents of
customer delight, recommend that organizations try to find a
very meaningful way to delight customers “through an
on-going activity which physically and/or mentally engages the
customer with the firm or its products and services”. In other
words, the first visit to the winery is just the beginning of the
relationship. Special invitations and seasonal events should
keep the customer returning. Wineries can also personalize
the relationship by sending birthday greetings with gift
coupons to its wine club members in order to get them to
return to the winery and to convey the message that the
winery really cares. Another way to build a sense of belonging
in wine club members is to get them involved in an activity
that makes them feel good about their relationship with the
winery...perhaps by asking them to help serve their wine
during a fund-raising event. Participants can be given free
wine for their efforts.
Limitations and future research
There are several limitations to this study, as well as
opportunities for future research. The primary limitation is
the small sample sized limited to a single geographic region –
California. Another limitation is that the study only examines
the millennial market segment for wine. It would be useful in
a future study to increase the sample size and to include other
wine market segments such as the Baby Boomer generation in
order to compare perceptions. Furthermore, since the
number of wineries is growing across the USA, with a
current number of 5300 (Wine Business Monthly, 2006), it
would be useful to expand this study to other wine tourism
regions in which there are large numbers of winery tasting
rooms, such as Washington State, Oregon, and New York.
Finally, it would be interesting to be able to design a
longitudinal study which tracked survey participants over
time to determine if the positive brand attachment created
from their winery tasting room visit continued to be as strong
over time.
Conclusion
In conclusion, this study focused on the tasting room
experience for millennials and how a positive emotional
 Brand equity in the wine industry
Linda Nowak, Liz Thach and Janeen E. Olsen
experience combines with product quality, excellent service,
and fair pricing to contribute to brand equity. Wine
consumers have a vast array of choices and there are many
quality wines being produced worldwide. Creating an
experience in the tasting room that is fun or exciting builds
customer loyalty and future sales. Through careful research
into the needs and wants of the millennial wine consumer,
wineries can focus their efforts on improving the customer’s
experience and build loyal consumers for the long term.
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 Brand equity in the wine industry
Linda Nowak, Liz Thach and Janeen E. Olsen
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About the authors
Linda Nowak is Professor of Marketing and Wine Business, at
the School of Business and Economics, Sonoma State
University, Rohnert Park, CA, USA. She is the
corresponding author and can be contacted at:
Linda.nowak@sonoma.edu
Liz Thach is an Associate Professor, Management and
Wine Business, School of Business and Economics, Sonoma
State University, Rohnert Park, CA, USA.
Janeen E. Olsen is a Professor, Marketing and Wine
Business, School of Business and Economics, Sonoma State
University, Rohnert Park, CA, USA.
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
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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 state’s 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 non-
participants 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.
 Brand equity in the wine industry
Linda Nowak, Liz Thach and Janeen E. Olsen
Those who take the trouble to get to know the segment can
achieve very successful outcomes. Those who don’t 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 won’t 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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.
Product quality – among wine consumers this is the
strongest predictor of brand equity. Cues used by
consumers are their senses, price, brand name, awards,
ratings, growing region, the winery’s reputation, and
recommendations from other wine drinkers.
.
Service quality – which for tasting room staff is like every
other business, consistently good service quality is key –
no room for bad days and the like that make experiences
variable.
.
Pricing – which must be seen to be fair. Prices don’t need
to be cheap, but must be perceived to offer value.
Wineries must view first visits by customers to their premises
as the beginning of a relationship. If they are successful the
relationship will flourish. Wine clubs have been a key
component for many, and are very good at generating a
sense of belonging. Other methods need to be found too,
from personalizing invitations to special tasting events, to
providing sample wine to be offered at customers’ corporate
functions.
As in all successful relationships, there should not only be
one winner, both should thrive from knowing each other.
Milennials make for interesting relationship partners, but
once their needs are understood, everything in the garden can
come up smelling of roses.
(A précis of the article “Wowing the millennials: creating brand
equity in the wine industry”. Supplied by Marketing Consultants
for Emerald.)