Understanding perceptions of wine and cellar door experiences as a means to motivate

GREAT WINE CAPITALS CARLA SILVA (MBA student) ANTONIO AZEVEDO Minho University Prof. 2 February 2011

Age: 34 to 44 years of age

Age: 15 to 33 (21 for this study) years of age

People are shaped by history and events, technological advances, social changes, economic conditions, popular culture, etc. Generation is = A society-wide peer group, born over approximately 15 - 20 years, who collectively possess a common persona. In general, members share beliefs and behaviors and a common location in history. They also perceive themselves to be part of a common generation.

1.

Determine what Generations X and Y perceptions are of wine;

Demographics Age Income Gender Education

Psychographic and behavioural characteristics Lifestyle/Hobbies Drinking & Driving Wine Knowledge Frequency of wine consumption Wine Involvement

2.

Evaluate the wine industries communicational activities ;

COMMUNICATIONS ACTIVITIES External to the winery Word-of-mouth Media _Advertising _Public relations Direct Marketing Web site/CRM Signs/outdoor Branding Label

3.

Determine both generations satisfaction level when visiting a winery.

Internal to the winery Location Decor Landscape Building characteristics

Service elements Tour guide Wine-maker Retail sales personnel Educational Activities

Wine Elements
Taste Price

VISITOR

CHARACTERISTICS

Demographics Age Income Gender Education Psychographic and behavioural characteristics Lifestyle/Hobbies Drinking & Driving Wine Knowledge Frequency of wine consumption Wine Involvement

COMMUNICATIONS ACTIVITIES
External to the winery

EXPERIENTIAL MIX
Internal to the winery Location Decor Landscape Building characteristics Service elements

Word-of-mouth
Media _Advertising _Public relations

Direct Marketing Web site/CRM Signs/outdoor

Branding Label

Tour guide Wine-maker Retail sales personnel Educational Activities Wine Elements Taste Price

4. PERCEPTIONS & BELIEFS

Attitude toward the wine brand

Intention to visit the cellar

Wine purchase intention Probability to recommend the experience

Research in 2 different wine regions:

DOURO
NAPA

 4% of Californias total wine

production

US economic impact of 34% = $42.4

billion dolares > 45 years of age = 60.8% of all visitors

World Heritage (by UNESCO)

7th in the National Geographic Society listing of 133 sustainable tourism destinations 240 thousand stay over visitor, in 2007 Ages 50 to 65

First Phase
Online Survey (PT & ENG)

Second Phase
Winery Visits

Survey Telephone or Personal (One-onOne) Interview

VISITOR

CHARACTERISTICS

Demographics Age Income Gender Education Psychographic and behavioural characteristics Lifestyle/Hobbies Drinking & Driving Wine Knowledge Frequency of wine consumption Wine Involvement

Sample
US Census for September 2009 Generation Y (ages 21 to 33) totals 54 million Generation X (ages 34 to 44) 45 million. Number of respondents for the online survey

Generations X = 78 and Generation Y= 146 The majority reside in or near San Francisco. Mean age:
Generation X= 38 years; Generation Y=25 years.

Gender: In both generations the number of female respondents is greater compared to the male counterpart.

Marital Status: Generation Y is predominantly single, and never married (69%), in comparison, to Generation X (46% married).

Employment:Most Generation Xers (60%)and Millennials

(45%) are employed full-time. Full-time Millennial students and students with part-time jobs total 32% of the population.

Education & Income:

The majority of Gen X and Y have completed a college degree.

Generation X has a greater income ($3501-$4000) than Generation Y($2001-$2500). (Mean value)
59% of Millennials have a purchasing power of less than $2000, whilst 27% of Generation X earns more than $6000.

Income:

Hobbies:

Favorite hobbies include eating out and socializing followed by internet. Concerning the internet, sites such as Facebook (Gen X: 87%; Gen Y = 96%) and Google were top of the list.

Wine Involvement - Consumption

Beer, followed by vodka, cocktails and scotch/whisky were the most predominant beverages consumed by both Generations X and Y.

A mention of mixed drinks is a term frequently employed by Generation Y (Millennials).

Over 80% of both generations prefers to consume red wine.

62% of Millennials enjoy white wine in comparison to Generation X at 55%.

Consumption averages on 1 to 2 glasses of wine at any one time, for both generations.

Wine Involvement - Consumption

Wine Involvement - Purchasing preferences

Wine Involvement - Purchasing preferences

Both generations choose a wine based on recommendation and if the wine is a familiar brand. Grape variety was an important aspect to Generation X (mean score of 3.35) whilst Generation Y ranked promotional offer and price in third place with a mean score of 3.50. Alcohol content rated least for both populations. 10$ to 15$ is the average price both generations purchase their wine for, being home the primary location for wine consumption.

Wine Involvement
Taste

The terms sweet, semi-sweet, red fruits, oaky and fruity were used to classify their favorite wine taste.

Perceptions

Both Generations believe wine is an expensive product and Generation Y referenced a negative perception on taste.

Wine Involvement Perceptions

High Alcohol Content Awful Taste Expensive Religious reasons inhibit be from drinking wine or more of it Family does not consume wine, so I dont have the habit Have to drink wine from a glass, so I dont like it Packaging is outdated It is snobby I am uneducated in wine and therefore feel uncomfortable drinking it Wine is fattening Dont believe it is the healthiest option Friends dont drink wine, so I dont either If I drink wine frequently, I am afraid I will become alcoholic Wine is a status symbol

Wine Knowledge

76% of Generation Y believes to hold below average or little to no knowledge on wine in comparison to Generation X at 59%. On the other spectrum, those knowledgeable or experts on wine make up 41% of the Generation X sample, whilst only half of this value of Millennials (23%) fall into these categories.

Wine Knowledge

Wine Knowledge
The majority of Generation X has visited a winery followed

close behind by the Millennials.

Wine Knowledge

The wineries most mentioned were: Generation Y: Robert Mondavi, Kendall Jackson, Domaine Carneros and Domaine Chandon;
Generation X: Robert Mondavi, Sebastiani

Vineyards & Winery, Chateau St Jean, Roshambo, Reynolds Family, Domaine Chandon, Ravenswood, Roederer Estate.

COMMUNICATIONS ACTIVITIES
External to the winery

Word-of-mouth
Media _Advertising _Public relations

Direct Marketing Web site/CRM Signs/outdoor

Branding Label

External to winery
The primary source of information for both

Generations X and Y is word-of-mouth;

Generation Y uses the internet frequently for

entertainment purposes as well as an information source, which poses no surprise that 34% of this population comes into contact with wine brands through the online medium.

External to winery

Wine Labels
In order to understand the specific label

characteristics desirable to consumers, the respondents were asked to rate 10 color wine labels on a 5 Likert scale from Dislike a Lot to Like a Lot, followed by the first word that came to mind, in a comments column on the survey.
Both generations presented similar results

choosing labels 10 and 5 which bore a more classical design. Label 2 received the lowest score.

10

EXPERIENTIAL MIX
Internal to the winery Location Decor Landscape Building characteristics Service elements Tour guide Wine-maker Retail sales personnel Educational Activities Wine Elements Taste Price

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

Winery Visits
A total of 12 participants visited the Napa winery

region. Illustration 1, shows a photo of 10 of the 12 participants.

A total of 4 visitors were from Generation Y, and 8

from Generation X evenly divided between males (50%) and females (50%).

Copyright

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

Winery Visits

Exterior Attributes

Able to view surroundings Attractive Settings

Interior Attributes Clean Uncluttered Visually Appealing Comfortable and enjoyable Service Attributes Prompt Service Ability to talk to winemaker Informative Educational Restaurant /Coffee shop

Staff Attributes Friendly and welcoming Professional and knowledgeable Understand visitor needs Provide individual attention Wine Attributes Wine quality Wine variety Reasonably priced Convenience Attributes Adequate signage / easy to find Adequate car parking Convenient opening times Tasting notes available Price list available Ability to join mailing list

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

Winery Visits Results:

Generation X is more demanding, presenting 13

quality indicators with a higher mean score

Generation X held the highest expectations in

relation to the staff and interior attributes of the winery/tasting room. Friendly and welcoming staff with an understanding for visitor needs, as well as a clean, comfortable and enjoyable environment scored high. Potential visitors from Generation X also demonstrated increased expectations for the quality of the wine.

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

Winery Visits Results:

Indicator ability to talk to winemaker received a 0.38 mean score for Generation X and Winery N1. One of the participants had the opportunity to speak with the wineries founder and owner which greatly increased his/her satisfaction level. Previous research carried out by Cambourne and Macionis (2000) ressonate this finding, suggesting that tourists enjoy the chance to meet the maker. Both generations are price sensitive with Generation Y being more so.

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

Winery Visits Telephone Interviews:

Overall, both generations, and in particular Generation Y, prefer a more flexible, rather than structured experience. In accordance with previous research, the study found that younger wine visitors seemed to place a lot of emphasis on being asked their needs in the service experience and having those needs met. (Charter and Fountain, 2006)

VISITOR

CHARACTERISTICS

Demographics Age Income Gender Education Psychographic and behavioural characteristics Lifestyle/Hobbies Drinking & Driving Wine Knowledge Frequency of wine consumption Wine Involvement

Sample
INE data for 2008
Generation Y (ages 21 to 33) 2 million

Generation X (ages 34 to 44) 1.8 million.

Number of respondents for the online survey

Generations X = 61 and Generation Y= 130 The majority reside in or near Porto District. Mean age:
Generation X= 38 years; Generation Y=27 years.

Gender: In both generations the number of female

respondents is greater (Gen X= 57% and Gen Y=53%), although not significantly different from the male counterpart (Gen X=43% and Gen Y=47%).

Marital Status: Generation Y is predominantly

single/never married (70%). Generation X shows a 48% married response rate, followed by 28% for single.

Education

The majority of both generations has at least completed a college degree and has a higher education.

Income: The majority of Generation Y earns less than

Generation X. 67% of Gen Y earn less than 1000 compared to 45% of Gen X.

Employment: Both generations are, in majority, employed

full-time (69% and 65%). Millennial students comprise 20% of the sample.

Hobbies: Travelling received the highest score for both

generations, followed by going to movies. Of all the internet sites, Facebook obtained the highest percentage at 52%, Generation X, and 53%, Generation Y.

Wine Involvement
Consumption

Beer, followed by vodka and liquors are the most predominant beverages consumed by both Generations X and Y.

Both generations mostly consume 1 to 2 glasses of wine at any one time.

Wine Involvement Consumption

Over 60% of both generations prefer to consume red wine. In comparison to Generation X (20%), twice as many Millennials (39%) prefer white wine. Vinho verde is also a favourite for both groups.

Wine Involvement - Consumption

Restaurants were considered the primary location for wine consumption, for both generations, followed closely behind by home and friends place.

Question

1 2 3 4 5 6 7 8 9 10 11

Promotional offer / Price Grape Variety Recommended by friend or family Country of Origin Region of Origin Recommended by shop staff or shop leaflets Packaging or label design Recommended by wine guide books Medal or award Brand that you are familiar with Alcohol Content

10 9 8 4 21

Unimportant
7 3 2 5 6 7

Wine Involvement - Purchasing preferences

Wine Involvement - Purchasing preferences

Both generations choose a wine based on Region of Origin and if the wine is a familiar brand.

These two attributes received the highest scores and denote regional favoritism. Recommended by friend or family ranked third in the priority listing. Recommended by shop staff or shop leaflets and alcohol content rated least for both populations.

Wine Involvement - Purchasing preferences

The highest percentage (price preference) for both generations is allocated in the 3-6 range.

Wine Involvement Perceptions

High Alcohol Content Awful Taste Expensive Religious reasons inhibit be from drinking wine or more of it Family does not consume wine, so I dont have the habit Have to drink wine from a glass, so I dont like it Packaging is outdated It is snobby I am uneducated in wine and therefore feel uncomfortable drinking it Wine is fattening Dont believe it is the healthiest option Friends dont drink wine, so I dont either If I drink wine frequently, I am afraid I will become alcoholic Wine is a status symbol

Wine Involvement
Taste Both group samples mostly used the terms semidry, sweet, and red fruits, to classify their favorite wine taste.
Perceptions Generation Y rated wine is a status symbol, at 34%, and both generations believe it is an expensive product.

Wine Knowledge

89% of Generation Y believes to hold below average or little to no knowledge on wine in comparison to Generation X at 75%. Those knowledgeable or experts on wine make up only 11% of both generations.

Wine Knowledge -The majority of both generations

has not visited a winery.

Wine Knowledge
In no order of preference, the wineries most mentioned by:
Generation Y: Herdade do Esporo, Aveleda,

Quinta da Pacheca and Taylors.

Generation X: Herdade do Esporo, Quinta do

Vallado and Quinta da Pacheca.

COMMUNICATIONS ACTIVITIES
External to the winery

Word-of-mouth
Media _Advertising _Public relations

Direct Marketing Web site/CRM Signs/outdoor

Branding Label

External to winery - The primary source of information for both Generations X and Y is word-of-mouth.

Wine Labels
In order to understand the specific label

characteristics desirable to consumers, the respondents were asked to rate 10 color wine labels on a 5 Likert scale from Dislike a Lot to Like a Lot, followed by the first word that came to mind, in a comments column on the survey.
Both generations presented similar results

choosing labels 10 and 3 which bore a more modern - classical design. Label 1 received the lowest score.

10

EXPERIENTIAL MIX
Internal to the winery Location Decor Landscape Building characteristics Service elements Tour guide Wine-maker Retail sales personnel Educational Activities Wine Elements Taste Price

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

Winery Visits

A total of 16 participants visited the Douro wine region. For 15 of the participants this was their first winery visit.

A total of 8 visitors were from Generation Y. Males (5) and females (3). Generation X is represented by a total of 8 participants. Males (3) and females (5).

COPYRIGHT

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

Winery Visits

Exterior Attributes

Able to view surroundings Attractive Settings

Interior Attributes Clean Uncluttered Visually Appealing Comfortable and enjoyable Service Attributes Prompt Service Ability to talk to winemaker Informative Educational Restaurant /Coffee shop

Staff Attributes Friendly and welcoming Professional and knowledgeable Understand visitor needs Provide individual attention Wine Attributes Wine quality Wine variety Reasonably priced Convenience Attributes Adequate signage / easy to find Adequate car parking Convenient opening times Tasting notes available Price list available Ability to join mailing list

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

Winery Visits Results:

Generation Y were far less demanding, with a total

of 7 negative mean scores in relation to the initial expectations, in comparison to the 20 negative mean scores of Generation X.
Winery D2, surpassed all expectations for both

generations in the service and staff dimensions. Generation Y rated high mean scores of 1 regarding the ability to talk to winemaker, 0,87 for understanding visitor needs and 1,25 providing individual attention.

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

Winery Visits Results:

Low scores for both generations and wineries were assigned to the indicators reasonably priced wine, indicating price sensitivity, and adequate signage /easy to find, given the insufficient road signs available and the slightly difficult path route approaching the location of Pinho.

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

Overall, both generations, and in particular Generation Y, prefer a more flexible, rather than structured experience. In accordance with previous research, the study found that younger wine visitors seemed to place a lot of emphasis on being asked their needs in the service experience and having those needs met. (Charter and Fountain, 2006)

Ultimately what the visitors want are engagement, personalization, quality and connection.

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

Part of the winery experience is the tasting room which needs to provide an enjoyable ambience and be well presented. Visitors are continually searching for value-added experiences as this study concludes. For this reason wineries need to attain a competitive advantage through quality improvement strategies (also known as the TQM movement).

A total of 4 visitors were from Generation Y, and 8 from Generation X evenly divided between males (50%) and females (50%).

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