place-based marketing and regional branding

Place-based marketing and regional brandingstrategy perspectives in the California wine

industryJohan Bruwer

School of Agriculture, Food and Wine, The University of Adelaide, Glen Osmond, Australia, and

Ray JohnsonWine Entrepreneurship, Wine Business Institute, Sonoma State University, Rohnert Park, California, USA

AbstractPurpose – The purpose of this paper is to explore different levels of place-based marketing in the form of region of origin strategies used by wineries intheir branding efforts. The overall aim is to obtain insights into wine consumer dynamics such as product involvement level, consumption frequency anddifferences between segments on the basis of gender and age from a regional branding perspective.Design/methodology/approach – Data collection took place by means of a highly-structured online survey of wine consumers across the USA. Therequest to participate was directed to legal wine drinking age people of 21 years and older to 9,922 e-mail boxes that yielded a response rate of 5.7percent, finally resulting in 570 usable surveys.Findings – Consumers used regional branding cues, information and images in their assessment and valuation of comparative wine labels. Almostwithout exception, the addition of regional information on a wine label increased consumer confidence in the quality of the product.Research limitations/implications – Any follow-on work to the study should also include a broader sampling of consumer types throughout the USAand comparisons made with the study to assess the validity of generalising the results here.Practical implications – Regional branding efforts should be targeted at high wine product involvement consumers rather than their low involvementcounterparts, as high involvement consumers are likely to be more influenced by brand-based cues.Originality/value – The paper is of value to academic readers, wine industry practitioners and regional trade and tourism associations and othercommercial entities that market their products with regional branding cues.

Keywords Brand image, Regional marketing, Wines

Paper type Research paper

An executive summary for managers and executive

readers can be found at the end of this article.

1. Introduction

Wine markets around the world are characterised by a

plethora of wine brands (Bruwer, 2004), to such an extent

that the consumer can be overwhelmed by the sheer

complexity of the buying situation this creates (Vrontis and

Papasolomou, 2007). Despite its high degree of

fragmentation, the wine industry is responding to this

situation by building strong brands with which the

consumer can identify and trust. The New World wine

countries, notably Australia and the USA, have been

particularly successful in building strong brands and the

increasing importance of region of origin as a branding

strategy for them has been documented (Tustin and

Lockshin, 2001).

Wine was one of the first products of agricultural origin todevelop a close and distinct relationship with its geographicplace of origin originally in European countries (Bernabeuet al., 2008; Bruwer and House, 2003). Not surprising,Thode and Maskulka (1998) in their seminal work on place-based marketing strategies, refer to wine as follows . . . .“itwould be difficult to find an agricultural product morefrequently associated with ‘place’ than fine wine” (p. 382). Inthe past the influence of a product’s place of origin on productevaluation has mainly been studied from a country of originperspective (Thode and Maskulka, 1998), but this trend hasnow evolved further to the region-of-origin context.Today place-based (location) branding is a hot topic

particularly throughout the tourism world and it should berecognised that every place has an image (Papadopoulos andHeslop, 2002). Therefore many a location has embraced theeconomic benefits in establishing a clear and compellingbrand proposition (Hall, 2003). At its broadest level, place-based marketing occurs in the form of country-of-originmarketing efforts such as food and wine, both which havebecome synonymous with a country like France (Frochot,2003). However, Frochot (2003) feels that food and wine arethe most difficult to study since they are often provided by a“variety of local micro-private actors” (p. 79) meaning that ata regional level image creation is difficult and can even resultin convoluted brand messages.It has been shown that country-of-origin (COO) image has

a significant positive effect on brand equity and the

The current issue and full text archive of this journal is available at

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Journal of Consumer Marketing

27/1 (2010) 5–16

q Emerald Group Publishing Limited [ISSN 0736-3761]

[DOI 10.1108/07363761011012903]

5

dimensions of brand equity (Yasin et al., 2007). The

underpinning factor that motivates consumers to buy

domestic products is ethnocentrism (Bernabeu et al., 2008)and this manifests itself in the positive effect that country-of-

origin (COO) has in consumer wine choice (Keown and

Casey, 1995). Whereas many consumers use country-of-origin (COO) stereotyping to evaluate (wine) product quality

(Yasin et al., 2007), for example, “French wine is the best”,

the more involved wine consumers also use region-of-originbrand indicators, such as Burgundy and Bordeaux. Less

involved consumers do not think much about the issues

associated with place-of-origin and they need to considerthem before making purchase decisions (Tootelian and

Segale, 2004; Barham, 2003).

2. Literature framework

Consumers search for information in their pre-purchase

search process for a product. Although the wine market is

widely regarded as a complex one for decision-making byconsumers, it has not escaped the growing importance of

product differentiation as a result of globalisation. Region-of-

origin or place-based marketing is one the strategies of suchdifferentiation (van Ittersum et al., 2003).The involvement concept has been increasingly used to

explain elements of the consumption process and it has been

widely agreed that there are high and low involvement

consumers, but also high and low involvement purchases ofproducts or services (Schiffman et al., 2008; Quester et al.,2007; Schiffman and Kanuk, 2006; Kapferer and Laurent,

1993; Rothschild, 1984).Wine is an information-intensive product (Watson et al.,

1999), one that has potential for high involvement (Bruwerand Reilly, 2006; Bloch and Bruce, 1984) Wine is therefore a

product with which consumers can form a personal

connection and this is the nexus of the so-calledinvolvement theory of consumer learning (Schiffman et al.,2008).The research approaches used to explain the nature of

involvement in turn led to the premise that a consumer’s

involvement level is dependent on the degree of “personalrelevance” (Zaichkowsky, 1985, p. 342) that the specific

product has for the consumer. Products mean different things

to different people, but if the product is personally relevant toconsumers, they are more likely to become involved in

gathering information (knowledge) about the product and

with the product itself. Risk perception is one of the mainantecedents of involvement (Kapferer and Laurent, 1993) and

both involvement and risk are related to the degree of

information search (Chaudhuri, 2000). For example, a highlywine-knowledgeable consumer will actively seek information

about aspects such as a wine’s vintage year or maturation

method (Schiffman et al., 2008; Gergaud and Livat, 2007).Such a person regards wine as a high involvement product

category and this person is highly involved with the product in

terms of consumption behaviour.Therefore in a nutshell, high involvement purchases are

very important to the consumer while low involvementpurchases are not very important (Schiffman and Kanuk,

2006). Low involvement products are generally frequently

purchased, widely distributed, low-priced consumer non-durables. On the other hand, all high involvement products

are not technologically complex, high-priced, consumer

durables. Often, there is a degree of hedonism linked to

high involvement products (Chaudhuri, 2000). Wine is anexperiential product (Kolyesnikova et al., 2008) and therefore

also fits the tenet of hedonistic motivation well.Wine as a product category has a long history with research

studies using the involvement construct as a means of definingconsumer’s engagement with it dating back to the early 1980s

(Zaichkowsky, 1985) right through to quite recent times(Santos et al., 2008). In between times there were seminal

studies linking it to the consumption situation itself (Questerand Smart, 1998), retail customer segmentation (Lockshin

et al., 1997) and purchase intention (Hollebeek et al., 2007;Lockshin et al., 2006).The intensity of a consumer’s involvement is simply

referred to as either low or high although it is strictly

speaking a continuum. For example, Charters and Pettigrew(2006) identify a group of medium-involvement wine

consumers in their study. However, it is the persistence ofthis intensity of involvement that differentiates certainproduct categories and types of consumers from one

another. The more enduring type of (high) involvementpersistence “is usually accompanied by a large body of

knowledge about the product category acquired over time”(Schiffman et al., 2008, p. 206). The so-called “wine

connoisseurs” are highly likely to exhibit this characteristicin their relationship with wine as a product category (Andrews

et al., 1990). In other words, consumers with a high level ofinvolvement with region-of-origin branded wine are likely to

consume more of this type of wine and place greaterimportance on product information on the label (Santos et al.2008). The accumulative effect of time and many purchaseoccasions in turn relate to their level of wine product

knowledge.The measures of consumer product class knowledge fall

into three categories, namely self-reported knowledge, whatproduct knowledge an individual has actually stored inmemory, and the amount of purchasing or consumption

experience with the particular product (Brucks, 1985). In ourstudy, we used self-described knowledge as a measure of the

consumers’ involvement with wine as a product.The product quality aspect of wine is an all important

aspect in consumer behaviour dynamics. Quality is however, asocially constructed yet ambiguous term (Warner, 2007).

Wine is the highly value-added end product of wine grapesthat forms one of the agricultural food product chains. It

should be recognised that the notion of quality is in itselfsomewhat nebulous and imprecise (Lecocq and Visser, 2006;

Skuras and Vakrou, 2002). It was found that wine consumers’involvement levels have a substantial impact on how they view

wine quality (Charters and Pettigrew, 2006). Due to theexperiential nature of the wine product, consumers get most

of their quality cues from the extrinsic cues such as thepackaging and specifically from the label of the wine

(Gergaud and Livat, 2007; Warner, 2007; Barber et al.,2006; Perrouty et al., 2006). That aside, the effect of theextrinsic cue in the form of the sensory quality of wine has a

profound influence on the overall perceived quality (Massonet al., 2008).It should be recognised that regional and/or specialty

products like wine “often share a collective reputation based

on aggregate quality” and “if the collective reputation of theproduct is good, the designation will be a powerful tool to

signal quality” (Winfree and McCluskey, 2005, p. 206).

Place-based marketing and regional branding strategy perspectives

Johan Bruwer and Ray Johnson


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California’s wine grape farmers have used the geographic

branding of their wine grapes as a key collective strategy forseveral decades (Warner, 2007). Hence this study’s focus on

place-based marketing and regional branding perspectives inthe context of several California wine regions.As previously mentioned, the notion that place-based

marketing affects the way in which consumers respond to the

product is widely recognised and nowhere more so than withwine (Orth et al., 2005). Consequently there is a trendtowards regional differentiation, reinforced by the protection

of geographic indications, for example American ViticulturalAreas (AVAs) (Schamel, 2006). This is at the same time

driven from the other end by the growing consumer need forauthenticity and traceable products. Thakor and Lavack

(2003) found on the other hand, that the place where theproduct is actually made is not important, but where

consumers think it is made, is important. In terms of theplace-based marketing concept, three types of places havebeen identified, namely actual, generic and fictional places

(Henchion and McIntyre, 2000). Because wine originatesfrom an actual place and it is obligatory, even legalistically

required, that it be denoted in descriptive format confirming aregistered name (for example American Viticultural Area –

AVA), we therefore contend that in the case of wine products,Thakor and Lavack’s (2003) assertion is too broad a

generalisation. In the words of Dimara and Skuras(2005). . .“consumers are increasingly anxious to knowwhere products come from” (p. 91). For example, the

origin (vineyard location) of the wine was rated secondhighest (65 percent response) by consumers among items

most frequently sought by them on wine labels in a study(Dimara and Skuras, 2005). A recent work by Goodman et al.(2007) shows that the origin of wine ranked fourth inimportance among consumers in USA retail stores. Clearlythere appears to be a shift towards the increasing importance

of the (branded) origin of wine.Finally, the strategy of place-based marketing in a regional

branding context, manifests itself clearly in the case of theUnited States wine industry’s efforts through the creation of

American Viticultural Areas (AVAs). The formation of theseAVAs has evolved in a piecemeal fashion throughout the USA

(Johnson and Bruwer, 2007). Unfortunately this has led to aplethora of AVAs created over a relatively short period of time,possibly leading to some consumer confusion and certainly to

fragmentation resulting in the possible dilution of place brandimages. The rationale for establishment of an AVA is really

quite as simple as the statement “a key consideration forgranting an AVA is whether the name is known locally,

regionally or nationally” (Kisliuk, 2008, p. 1). However, itshould be understood that “while AVAs establish where the

grapes are sourced to make a wine, they do not offer any otherestablishment of quality” (Johnson and Bruwer, 2007, p. 165).Therefore in the words of Henchion and McIntyre (2000,

p. 630). . .“the development of territorial linkages must bebased on geographical sub-divisions of relevance to

consumers”. We therefore explore this aspect through thetesting of two of our study’s four hypotheses.We based part of our research efforts on a study conducted

for the then Sonoma County Grape Growers Association that

sought to explore the equity of a larger wine region and itsinclusive sub-regions or appellations. The study found astronger awareness of the larger wine regional name Sonoma

than with the smaller appellations within its borders. It also

found that more consumers preferred a wine label with both a

small appellation and its over-arching region to labels that

only described the smaller appellation itself (Newman-Stein-

Friedman, 2004). To solicit these answers, consumers were

presented with four types of wine labels:1 undesignated, simply varietal;2 with Sonoma County added;3 with AVA added and no Sonoma County; and4 with both the AVA and Sonoma County added.

Approximately one-third of consumers preferred label

number 2, approximately one third preferred label number

4 and only 8 percent preferred label number 3. In essence

two-thirds of the respondents preferred some involvement of

the larger regional brand “Sonoma” on the label.Most of the wine community in California has embraced

the French way of seeing appellations. In Burgundy for

example, a given producer works on a price-quality range

from AC Bourgogne being cheapest to Village appellations

and finally small Grand Cru place names as best and most

expensive. Frey (2006) reiterates this in the case of Sonoma

County, saying that the fatal flaw is the conditioning of people

to think that Sonoma County is somehow lower in quality and

value and Russian River Valley is higher.The Newman-Stein-Friedman (2004) study did not answer

the following questions: How would consumers respond in

the absence of label number 1 and label number 2 above?

What would be their response if offered only choices 3 and 4?

In the absence of a “county-only” option, would almost two-

thirds of consumers prefer a label that conjoined a larger

regional identity with a smaller (sub)regional identity within

its borders? In the parlance of California wine, this would be a

county and an AVA within it.In our study, wine labels were also chosen as the vehicle to

assess consumers’ expectations on potential wine quality. All

wineries, regardless of size or location, use labels to

communicate to consumers (Merrill, 2006). Labels were

therefore a natural follow-on to the work done in the

Newman-Stein-Friedman (2004) study. The gap in the

knowledge base investigated in the study on which this

paper is based, is a survey of consumer attitudes when offered

just those two choices: wines labelled with an AVA alone

compared to wines labelled with an AVA and the

corresponding region. This yielded wide reaching results

about the regional branding of wine and its impact on

different consumer types in their wine-buying decisions.

3. Research objectives, methodology andhypotheses

This study is relevant to consumer behaviour associated with

wine purchases and attempts to influence those purchases

through place-based and more specifically, region of origin

branding. The overall aim was to obtain insights into wine

consumer dynamics such as product involvement level,

consumption frequency and differences between segments

on the basis of gender and age from a regional branding

perspective.The main research objective sought to examine the regional

brand image of Sonoma and four of the appellations within

Sonoma and their impact on consumers’ quality perceptions

when included on wine labels. The four appellations within




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Sonoma were Alexander Valley, Bennett Valley, Knights

Valley and Russian River Valley.Some secondary research objectives evolved from this.

These were to:. Determine the impact of including the regional brand

along with a corresponding AVA on the same wine label as

compared to an alike label displaying the AVA alone.. Ascertain if it is possible to generalize the result of

combining regional brand and an AVA on the same wine

label. Does it consistently increase or decrease perceived

quality?

A study of consumer preference with respect to quality

expectations created by wine labels has practical applications,

which would allow the use of four basic research design

options:1 surveys;2 experiments;3 observation; and4 secondary data.

Observation was not used as it does not provide all of the

information required for the results to be valid and reliable in

a study of this nature. Secondary information was procured to

examine the current level of knowledge on the subject and

outlined in the form of a literature review in the previous

section. As the study dealt with people and their opinions on

an array of issues relating to wine labels, an experimental

approach would not be considered appropriate either. The

quantitative data aside, some of the data sought was to be in a

descriptive format. The most effective way to gather the

required information was therefore by means of a survey. The

research design consisted of a practical application where the

primary data was gathered by a highly-structured online

survey. The use of an online questionnaire as the method of

communication with the respondent has three key issues that

needed addressing:1 Degree of structure in the questionnaire. The questionnaire

was highly structured, designed to be easily understood

and completed in approximately five minutes. There were

only a few open-ended questions. The data sought was

mainly quantitative in nature, with some qualitative

elements. All demographic questions were placed

towards the end of the questionnaire.2 Method of administration. The survey was conducted

entirely online using SurveyMonkey software. Participants

could access the survey by following a link in their

invitation to participate, accompanying the e-mail

newsletter received.3 Degree of privacy. The questionnaire was designed so that

no identifying information had to be provided by the

respondent. Participants were guaranteed confidentiality

of their responses.

Surveys were analysed and correlations drawn between the

response to quality expectations and subgroups of

participants. SurveyMonkey Filter Software was used to

collect and initially analyse the raw data. From there the data

was transferred and analysed more completely using SPSS

16.0 Software. Regional rankings were compared and

analysed to uncover associations the consumers have with

them.To disguise the Sonoma focus of the study, other selected

California regions were also included. In the Central Coast,

Alameda and Santa Barbara Counties and an appellation

from each were used in the study. The AVAs chosen were

Livermore Valley and Santa Maria Valley respectively.In the Sierra Foothills, Amador County and the AVA

Fiddletown were included. Besides Sonoma in California’s

North Coast, Mendocino County and the corresponding

Anderson Valley AVA were also included.The stratification of regions was necessary due to the

study’s financial and time constraints and the fact that there

are more than 100 officially recognized appellations inCalifornia alone and more than three dozen counties of

which they are a part.This study was exploratory in nature and hence the non-

probability sample chosen attempted to provide deeper

insight through interviewing wine consumers in numbers

large enough for some statistical significance. The samplepopulation was wine consumers, both male and female, at the

legal drinking age of 21 years and older. The study was

limited to two groups of wine consumers who voluntarily

opted to receive one of two wine newsletters. Though thesubscribers receive the newsletters throughout the United

States, the vast majority reside in California. A link was

provided directly to the survey which was available online at asite created on the SurveyMonkey web research platform. The

e-mail and request to participate was sent to 9,922 e-mail

boxes. The response rate was 5.7 percent resulting in 570

usable surveys and is in line with that of similar studies(Bruwer and Wood, 2005). The results of the two consumer

groups were merged using SurveyMonkey software into one

group of respondents for further analysis using SPSS

software. The 570 participants in total provided anacceptable level of accuracy and statistical significance for

the results.To direct the research, the following hypotheses were tested:

H1. Consumers with high self-described knowledge levels

of wine as a product differ in terms of some

demographic factors, specifically gender.H2. The product involvement level of wine consumers

differs in terms of demographic factors, specifically

age.H3. The wine regional brand image, with its broader place

of origin scope, enhances the image of the appellationswithin it and strengthens consumer confidence and

quality perception in the products that utilize these

images.H4. The brand images of appellations are not equal in

strength. Some are also held in higher consumer regard

than their corresponding wine regions.

4. Research assumptions and limitations

The participants in the survey cannot be consideredcompletely representative of American wine consumers. By

definition, it is therefore a self-selected sample. However, due

to the size of the sample analysed, the data is considered, in all

probability, to be strongly representative of at least highly-involved American wine consumers with some familiarity with

California wine. As with many other food and beverage

products, they are responsible for the vast majority of theconsumption of wine in the country. With the above

limitations, there is obviously room for further study with

other groups.




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5. Research results and discussion

Self-described wine knowledge level

Approximately 85 percent of the respondents are self-

described as being at least “somewhat knowledgeable about

wine”, demonstrating a confidence that might be particular to

the large group of Northern California participants or the

degree to which the sample group is heavily involved and

interested in wine. In order to test the first hypothesis Table I

shows the Pearson test’s correlation and non-correlation

coefficients with various demographic factors.Only the demographic factors of gender and origin show a

correlation in the Pearson test, albeit negative with self-

described wine knowledge. Gender is significant at the 0.01

level while origin is significant at the 0.05 level. 87 percent of

the male group indicated that they are at least “somewhat

knowledgeable about wine, while in the case of the females

this was 83 percent. With California responsible for close to

90 percent of the United States” wine production one can

reasonably expect high knowledge levels with this regional

subgroup which accounted for 75 percent of the total sample

and hence the negative correlation (significant at 0.05 level).The first hypothesis that wine consumers with high self-

described product knowledge levels differ significantly in

terms of some demographics is confirmed as this was found to

be the case with gender while also being slightly weighted

more towards males.

Wine product involvement level

The relevance and usefulness of involvement for segmenting

and/or explaining wine consumer behaviour dynamics have

been established in previous research (Aurefeille et al., 2002).Furthermore, there is evidence that region-of-origin is more

important for wine consumers who are high in product

involvement (Hollebeek et al., 2007). Wine product

involvement level can be measured through a combination

of various factors.Wine consumption frequency. Table II provides an overview of

the demographic characteristics of the respondents. It shows

that slightly more females responded than males. This is

broadly in line with the most recent survey that showed that

American core wine consumers split into a 54 percent female

and 46 percent male gender grouping (Wine Market Council,

2008). Core wine drinkers consume wine at least once per

week by definition. More than 85 percent of the group is

between the ages of 35 and 65 years and they are well-

educated, with more than 80 percent of the cohort achieving a

minimum of a bachelor’s degree in post-secondary education.

The average two-year median annual household income level

in the USA is $46,071 while for California it is $51,312 (US

Census Bureau, 2006). Household incomes were therefore

significantly above these medians with 71 percent of the

respondents earning over $50,000 per year. The vast majority

of 75 percent of respondents were from California, while most

of the Californians were from the San Francisco Bay Area (86

percent).The wine consumption frequency of the respondents was

used as a factor to test for correlations with the different

demographic factors using a two-tailed Pearson correlation

test. It was found that negative correlations exist between

both age and household income against wine consumption

frequency, in both cases significant at the 0.01 level. For

gender and educational status no correlation could be found.Wine volume consumption. Respondents’ wine volume

consumption characteristics are depicted in Table III. Of

those who noted bottled wine consumption, the average

quantity was just over eight bottles per month or two per

week. Box wine consumption incidence was very low (^6

Table I Respondent self-described wine knowledge – demographicfactors

Self-described wine knowledge

Demographic factor Pearson coefficient Sig. (two-tailed) n

Gender 20.208 * * 0.000 483

Age 0.034 0.448 487

Educational status 0.015 0.740 483

Household income 20.045 0.346 439

Occupation 20.100 0.073 322

Origin 20.090 * 0.049 480

Notes: * Significant at 0.05 level (two-tailed); * * significant at 0.01 level(two-tailed)

Table II Respondent demographics and wine consumption frequency

Wine consumption frequency

%

Pearson

coefficient

Sig.

(two-tailed) n

Gender 0 007 0.874 480

Male 45.8

Female 54.2

Age group 20.191 * 0.000 484

21-24 years 1.4

25-28 years 4.3

29-34 years 8.8

35-40 years 18.7

41-45 years 11.9

46-54 years 25.5

55-65 years 25.1

65 1 years 4.3

Educational status 0.011 0.814 480

High school 4.3

Associate’s degree 7.9

Other degree or certification 5.0

Bachelor’s degree 35.5

Some graduate studies 13.0

Master’s degree 26.7

Doctorate degree 6.6

Other 1.0

Household income (before taxes) 20.143 * 0.003 436

<$25,000 1.1

$25,001 to $50,000 5.1

$50,001 to $75,000 11.8

$75,001 to $100,000 15.4

$100,001 to $150,000 20.2

$150,001 to $200,000 13.3

$200,000 1 10.2

Confidential 22.9

Note: * Significant at 0.01 level (two-tailed)




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percent) among the group with 2.5 boxes on average. It

should be noted that the bottle consumption figure shows a

fairly high interest in wine as this figure is for the individual

consumer, not the household. Bruwer et al. (2005) noted that

wine volume consumption can be an indicator of the level of

involvement of a consumer with wine. It has also been

established that heavy wine users are more likely to be

interested in and involved with wine (Goldsmith and

d’Hauteville, 1998).A one-way ANOVA was conducted for wine volume

consumption by age group (Table III). The bottle

consumption was significant at the 0.05 level with it

increasing except for the 55-65 year old group. Box wine

consumption was not significant by age group.Expenditure behaviour on wine. Monthly household spending

on wine is close to $180 as reflected in Table IV. The average

price per bottle purchased is $21.61 which fits comfortably

within the ultra-premium wine price segment. Given the

general tendency for quick consumption, one might assume

that most of this wine is drunk within two weeks of purchase.A chi-square test of independence was conducted on the

amount spent per month on wine and gender. The Pearson

chi-square value of 41.939 (41 degree of freedom) was not

significant at 0.430. Hence the average total amount spent per

month on wine is not dependent on any gender group. This

was also confirmed by the statistical analysis presented in

Table V.Of particular interest to producers of ultra-premium and

icon wines, is a segment of 70 percent of all the respondents

who purchase at least one bottle of wine at a price of over $15

retail every week. Furthermore, the majority (56 percent) of

these respondents reported that most of the wine they

purchase is at over $15 per bottle retail. A Mann-Whitney

U-test was conducted to test for differences between two

independent groups (males and females) on the incidence of

buying wine at over $15 per bottle at retail. In the case of

purchasing at least 1 bottle of wine per week at over $15, the

p-value ¼ 0.025 and hence the result is not significant. There

is no statistically significant difference in the incidence of

buying at least 1 bottle of wine per week at over $15 between

males and females. As far as whether most wine purchased by

the respondents is priced over $15 per bottle, the p-

value ¼ 0.884 and also is not significant. Again we find that

there were no significant differences between the wine

expenditure per bottle of males and females.In summary, participants in the survey are by and large

highly-involved wine consumers. Over half of the group is

comfortable spending more than $15 retail on a bottle of wine

each week. They are wine knowledgeable and drink wine

frequently. As a group they are older, well-educated

professionals and self-made in their careers. Household

incomes are above average and they reside overwhelmingly

(75 percent) in California, and in particular the greater San

Francisco Bay Area. Overall these findings confirm the second

hypothesis.Geopolitical regions and their corresponding wine appellations.

The Newman-Stein-Friedman (2004) survey examining the

region Sonoma and several of its AVAs established a strong

correlation between greater quality expectation and the

inclusion of Sonoma County as a place of origin on wine

labels. From this it was hypothesized that any and all

appellations might benefit from association with the larger

regions that encompass them.A total of 483 of the participants answered questions

regarding their preference for labels with and without the

region included. In each case, a label with an AVA only was

shown side by side with a label that displayed the same AVA as

well as the larger region in which that AVA falls. In all but one

instance, respondents preferred the label with both the region

and the AVA. Figure 1 is an excerpt of the pages built online

to conduct the survey.While the results do show that respondents most often

chose the label that combined region with AVA, the effect of

combining place names on a wine label is not equivalent and

it is therefore not a guarantee of raising quality expectations.

Table III Wine volume consumption per month (one-way ANOVA)

Mean F df Sig.

Bottles (750ml) 8.3 2.649 * 7 0.011

Boxes (2.0-4.0 litre) 2.5 0.185 6 0.970

Note: * Significant at 0.05 level (two-tailed); Grouping variable: Age

Table V Purchase wine over $15 per bottle retail

Purchase behaviour % Mann Whitney U * Z Asymp. Sig. (two-tailed)

Do not purchase $1 bottle per week at over $15 30.3 – – –

Purchase $1 bottle per week at over $15 69.7 25170.000 2.242 0.025

Most wine purchased is over $15 per bottle 55.6 27609.000 0.146 0.884

Note: Grouping variable: Gender

Table IV Monthly household expenditure on wine

Mean Pearson Chi-Square df Asymp. Sig. (two-tailed)

Total amount spent per month $178.85 41.939 41 0.430

Average spend per bottle $21.61 – – –

Note: Grouping variable: Gender




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Across all label comparisons except one, respondents chose

the combined label over the label with AVA alone. Therefore

the third hypothesis that regional brand image enhances the

image of the AVAs within it and strengthens consumer

confidence and quality perception was confirmed, yet not

shown to be universally applicable.A total of 486 respondents made a selection of one of the

two labels offered for each wine region. Figure 2 shows the

percentage of respondents and their choices.Livermore Valley was alone in scoring higher in preference

without its region mentioned. The reason for this might be

alluded to in the qualitative associations that respondents

noted regarding the region Alameda County. Alameda

struggles with an image of traffic and urban congestion. The

standing and perceived value of the regions studied is

therefore not equivalent.There are many in the wine industry who argue for the

value of specific place names or appellations, which in the

United States are known as AVAs. It is their commonly held

belief that an AVA alone commands more value in the

marketplace – that consumers will pay more for appellation

labeled wine than regionally labeled wine. Yet the results in

this study show a powerful halo effect given by the well-

regarded regions, especially when the AVA is little known.

Despite this, some in the wine community argue that in the

case of higher-spending consumers, they are right. But when

put to the test, this survey shows otherwise.Respondents in the survey were further segmented to

include only those who purchase at least one bottle of wine

every week over $15 as well as those who also identify

themselves as spending over $15 per bottle on most of the

wine they purchase. Their preference for AVA only labels is

only slightly higher than the group at large, as shown in

Figure 3.

A further subset of this higher spending population

identified themselves as either very knowledgeable about

wine or an expert/professional. The expectation in the wine

community is that this group would certainly be more aware

of individual appellations and value them accordingly. Yet

again the results of the survey demonstrate that wine

knowledgeable consumers are not put-off by the inclusion of

regional information beyond that of the AVA. As above, the

only region benefiting from the exclusion of the county name

was the Livermore Valley (see Figure 4).The results confirmed the fourth hypothesis that the brand

images of AVAs are not equal and that some are held in higher

regard than their corresponding wine regions.

6. Conclusions, managerial implications andresearch recommendations

This study explored different levels of place-based marketing

in the form of region-of-origin branding strategy used by

wineries in their marketing efforts. It aimed to describe the

relationship between wine regional brands and their

corresponding appellations. The answers gained could

provide grape growers and winery owners with a greater

understanding of the strength of their own regional brands.

The study also obtained insights into wine consumer

dynamics such as product involvement level, consumption

frequency and differences between segments on the basis of

demographics from a regional branding perspective. In the

process, the regional brand image of selected California wine

regions and the effect of that image on consumers’ quality

perceptions when included on wine labels were also

explored.The study found that consumers with a high level of

involvement in wine as a product category differ in their

consumer behaviour dynamics in terms of age. We therefore

Figure 1 Label choices presented to respondents in the survey




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concur with Hollebeek et al. (2007) and recommend thatregional branding efforts be targeted at high wine productinvolvement consumers rather than their low involvementcounterparts as high involvement consumers are likely to bemore influenced by brand-based cues.Consumers in the study used regional branding cues,

information and images in their assessment and valuation ofcomparative wine labels. Almost without exception, theaddition of regional information on a label increasedconsumer confidence in the quality of the product. Thestrength of regional branding was even demonstrated with thewell-regarded Russian River Valley AVA. In the case of thelesser known AVAs, such as Fiddletown and Bennett Valley,the inclusion of a regional name was particularly beneficial.While the importance of regional wine brands,

characterized as US counties, was shown by consumers’overwhelming ratings of quality, the true value of those brandshas not been acknowledged by many of the grape growers andwineries that have spent energy and money branding thesmaller appellations where they work.It is strongly recommended that wineries (in particular,

wineries using little-known appellations), begin utilizing thebrand power of the larger regions available to them when

those regions have a positive brand image. Positive images are

key as it was also found that region is not a universally positive

attribute.The proliferation of AVAs and the diluting effect on

regional brands is an issue that is being discussed in the wine

industry, but is beyond the scope of this study. Wine industry

marketers and winery owners throughout the country should

be interested to see how the results of this study might be

extrapolated to the regions where they work. Food producers

might also be interested to see how the results of this survey

might be applied to their own regional branding efforts.More research on a national level should be done. It is

important to research the effect of regional branding in other

areas of the USA. More AVAs are currently being proposed

and few wineries today are labeling with any mention of the

county of origin. There are certainly other areas where the

advantage of the larger wine region is being ignored while

embracing small, very local and relatively unknown AVAs.Any follow-on to this study should also include a broader

sampling of consumer types throughout the USA and

comparisons made to this study to assess the validity of

generalising the results herein.

Figure 2 Label preference for AVAs with or without region




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Figure 3 Label preference for AVAs with or without region – higher spending segment

Figure 4 Label preference for AVAs with or without region – higher spending segment self-described as very knowledgeable or expert




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Corresponding author

Johan Bruwer can be contacted at: [email protected]

Executive summary and implications formanagers and executives

This summary has been provided to allow managers and executivesa rapid appreciation of the content of this article. Those with aparticular interest in the topic covered may then read the article in

toto to take advantage of the more comprehensive description of theresearch undertaken and its results to get the full benefits of thematerial present.

Country of origin (COO) often functions as a powerful aspect

of a brand’s image. Its impact is often particularly significantin the marketing of wine. Consumers are now faced with an

abundant choice of brands in wine markets around the worldand COO is readily acknowledged as a key differentiator able

to positively influence the equity of a brand.In some nations, the picture has developed further and the

region-of-origin has become increasingly more important.France provides a perfect example of this shifting tendency,

with such as Burgundy and Bordeaux recognized as indicatinga more precise identification of brand source.

Issues to consider

Product involvement is widely accepted as influencing a

consumer’s desire for information. Those who find aparticular product interesting and relevant are likelier to

seek to acquire greater knowledge about it and thereforebecome even more highly involved. And it has also been

shown that where high involvement levels prevail, theindividual can acquire substantial amount of product

knowledge over time. But for purchases deemedunimportant, involvement will be low and the information

search minimal at best. Knowledge exists in both objectiveand subjective forms and it is the latter that is considered

here.Links between consumer involvement and wine

consumption are well established and have formed the basisfor numerous studies into aspects that include consumer

segmentation, purchase intention and the consumptionsituation. Many scholars believe that consumer involvementis higher for self-indulgent products. Since wine is

acknowledged as being “experiential”, it meets the necessary




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criteria in this respect. Interested consumers form a “personalconnection” with the product and may aim to discoverinformation concerning such as its vintage year or process ofmaturation. It is logically assumed that consumers whoacquire such details or knowledge of the product’s region-of-origin are likely to consume larger quantities of this wine.Furthermore, production information contained on the

label will have greater significance for these highly-involvedconsumers. Wine is a category where product quality has aconsiderable impact on consumer behavior. Most of thequality cues are conveyed through the packaging and label.Brand origin is perceived by consumers as a key indicator of

quality. Surveys have shown that consumers rank vineyardlocation as being among the most important details on the label.If the geographical area in question boasts a positive reputation,then this information alone will convey quality to manyconsumers. In the USA, the esteem attached to California hasbeen exploited by wine producers for numerous years.That wine consumers respond to marketing based on place is

widely acknowledged. Growing demand for region-of-origininformation has led a significant increase in the number ofAmerican Viticultural Areas (AVAs) being created. AVAs serveto define grape-growing regions by geographical features, whichare felt by the wine industry to be more appropriate than theuse of state or county boundaries used previously. In order to begranted AVA status, the region’s name must be known locally ornationally. While an AVA signifies grape source, analysts pointout that no other indication of quality is suggested.

Study and findings

Bruwer and Johnson examine place-based marketing in thepresent work and investigate how including region and/or sub-region or AVA of product origin on wine labels impacts onconsumer perception of product quality and brand equity.The study was carried out on behalf of the Sonoma CountyGrape Growers Association with one key aim being todetermine the impact of including the Sonoma brand nameon product labels. To disguise this purpose, the authorsincluded other Californian regions alongside two AVAs.Male and female wine consumers aged 21 or over who

subscribed to wine newsletters were recruited for the surveyand 570 useable responses were obtained. An onlinequestionnaire was the selected method for a study regardedas exploratory in nature. Hypotheses were formed based onself-described knowledge level, involvement level, regionalbrand image and the brand image for the sub-region or AVA.The survey indicated:

. Around 87 percent of male respondents and 83 percent offemales considered themselves to be reasonablyknowledgeable about wine.

. Age and household income negatively correlates with wineconsumption frequency.

. Consumption volume may be related to involvement.

. Monthly amount spent on wine does not differ by gender.

. Over half of respondents purchase more expensive wineevery week.

These findings confirmed authorial predictions about how

certain demographic aspects relate to knowledge and

involvement.Previous work had identified that consumers believed the

inclusion of the Sonoma County origin on wine labels greatly

increased their expectation of quality. Similar indications were

revealed here. All but one of the 483 participants who

answered questions relating labeling formats preferred the

option that incorporated region and AVA rather than AVA

alone. This confirms prior belief that including the larger

regional brand helps to enhance the image of sub-regions or

AVAs within its boundaries.However, the authors point out that combining place names

on a label does not ensure that consumers will anticipate

superior quality in all cases. Some regions enjoy a more

positive image than others so producers should be wary of

making assumptions about what consumers will infer from the

information on the label. That the Alameda County region is

plagued by a reputation for traffic and urban congestion is

cited as an example. Survey responses do, nevertheless,

indicate that the including a respected region on the label will

have a positive effect, especially when the AVA is little known.

This confirms the suspicion that AVA brand names are not

equal either. In addition, Bruwer and Johnson point out how

the mantra from some wine industry players that a stand alone

AVA is more powerful in the marketplace is seriously

undermined here. They do concede though that such an

impact could be possible among those who spend heavily on

wine and possess knowledge levels that border on expert. But

even this segment does not object to regional information also

being included.

Marketing and additional research

Highly involved individuals are more likely to employ brand-

based cues in their decision making. The authors therefore

urge marketers to target this group rather than those

identified as low involvement consumers. Another key

recommendation is that wineries should exploit the brand

power of the regional name when the image is positive. It is

noted that many wineries and grape farmers have invested

heavily in building their AVA and are somewhat reluctant to

acknowledge the value of utilizing the regional brand too.Conducting similar research on a national level will help

evaluate the impact of other regional brands and perhaps

better inform those marketing on the basis of AVA alone.

Bruwer and Johnson also suggest applying the study within

other industries, such as food, may be interesting. Including a

broader sample of consumers in future work could allow a

generalization of these results.

(A precis of the article “Place-based marketing and regional

branding strategy perspectives in the California wine industry”.

Supplied by Marketing Consultants for Emerald.)




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