An Examination of the Impact of Product Organization and Region Equity on the Comparison and Selection of Wines

Charles S. Areni, The University of Sydney
ABSTRACT - North American wine consumers reported purchase likelihoods for fictitious Chardonnays from three different production regions based on brief verbal descriptions in an information display table. The information in the table, which described several wines, was organized according to either region (AFrench Wines,@ ACalifornia Wines,@ etc.) or variety (AChardonnays,@ ACabernet Sauvignons,@ etc.) categories. Results indicated that when the evaluation set included only the French and Texas Chardonnays, the purchase likelihood of the Texas Chardonnay was lower when information was organized according to region categories rather than variety categories. Product organization had little or no effect on the purchase likelihood of the French Chardonnay when it was evaluated against the Texas Chardonnay. However, when the evaluation set included only the French and California Chardonnays, the purchase likelihood of the French Chardonnay was higher when information was organized accordingto region rather than variety. The purchase likelihood of the California Chardonnay was unaffected by product organization.
[ to cite ]:
Charles S. Areni (1999) ,"An Examination of the Impact of Product Organization and Region Equity on the Comparison and Selection of Wines", in NA - Advances in Consumer Research Volume 26, eds. Eric J. Arnould and Linda M. Scott, Provo, UT : Association for Consumer Research, Pages: 359-364.

Advances in Consumer Research Volume 26, 1999      Pages 359-364

AN EXAMINATION OF THE IMPACT OF PRODUCT ORGANIZATION AND REGION EQUITY ON THE COMPARISON AND SELECTION OF WINES

Charles S. Areni, The University of Sydney

ABSTRACT -

North American wine consumers reported purchase likelihoods for fictitious Chardonnays from three different production regions based on brief verbal descriptions in an information display table. The information in the table, which described several wines, was organized according to either region ("French Wines," "California Wines," etc.) or variety ("Chardonnays," "Cabernet Sauvignons," etc.) categories. Results indicated that when the evaluation set included only the French and Texas Chardonnays, the purchase likelihood of the Texas Chardonnay was lower when information was organized according to region categories rather than variety categories. Product organization had little or no effect on the purchase likelihood of the French Chardonnay when it was evaluated against the Texas Chardonnay. However, when the evaluation set included only the French and California Chardonnays, the purchase likelihood of the French Chardonnay was higher when information was organized accordingto region rather than variety. The purchase likelihood of the California Chardonnay was unaffected by product organization.

A considerable amount of research has examined the impact of brand equity on product perceptions, brand preferences, and purchase decisions (Aaker 1991; Keller 1993; Broniarczyk and Alba 1994; Park and Srinivasan 1994). Keller (1993) defines brand equity as "the differential effect of brand knowledge on consumer response to the marketing of a brand" (p. 2). In other words, brand equity exists when brand knowledge alters consumer response to a given marketing variable (i.e., media advertisement, point-of-purchase display, price-off, etc.) relative to when that variable is used in conjunction with an unfamiliar brand. In Keller’s (1993) conceptual model, brand equity has two major components, brand awareness and brand image. Importantly, the latter is comprised, in part, of brand associations that depict functional and experiential benefits of consuming the product.

A second stream of research has focused on the impact of country-of-origin (COO) on product perceptions and preferences (Cordell 1991; Wall, Liefeld, and Heslop 1991; Tse and Gorn 1993; Elliott and Cameron 1994; Maheswaran 1994). Research indicates that COO effects sometimes rival the effects of price, brand name, and specific product attributes in determining preferences (Tse and Gorn 1993; Okechuku 1994), but there is considerable variation in relative importance by product category (see Ettenson, Wagner, and Gaeth 1988; Elliott and Cameron 1994). It is likely that the variation in the relative importance of COO across product categories is based on consumers’ perceptions of "core competencies" associated with specific countries (Maheswaran 1994; Okechuku 1994). When a country’s core competencies are relevant to assessing the quality of a product (e.g., German engineering, French fashion and style, Japanese electronics, etc.), the COO effect is magnified.

Recently, Leclerc, Schmitt, and DubT (1994) effectively combined brand equity research with research examining COO effects. They assessed the impact of French versus English brand names on brand preferences across multiple product categories. Consistent with the core competency interpretation, they found that French brand names were associated with more favorable brand attitudes than were English names when the product category was associated with experiential benefits; however, the reverse was true for products associated with functional benefits.

The research reported below is also consistent with the idea that French culture is associated with core competencies that make French products more desirable in certain contexts, and the product category examined is one in which French culture would seem to create obvious advantages. Specifically, this research examines the "region equity" of French wines relative to wines from California and Texas. Rather than measuring the importance of region of origin relative to other wine attributes (Tse and Gorn 1993; Peterson and Jolibert 1995), the salience of the region attribute is manipulated in a laboratory experiment. Results indicate that, as expected, increasing the salience of region of origin benefits French wines, but seriously penalizes wines from Texas.

PRODUCT ORGANIZATION AND ATTRIBUTE SALIENCE

Region of origin is a certainly relevant when consumers compare and select wines for personal consumption. However, previous research is equivocal regarding its relative salience, with some studies indicating that region is less important than price, color/variety, and brand name (Zaichkowsky 1988; Areni, Duhan, and Kiecker 1997), and others reporting that it is the most important attribute affecting choice (Keow and Casey 1995). The purpose of this research is not to determine the relative salience of region of origin for wine purchase decisions, but rather to examine variables that alter the salience of the region attribute. This offers the potential of influencing brand choice by regionBan increasingly relevant marketing goal as production region has become the focus of an increasing number of promotional campaigns in the wine industry (Christy and Penn 1994; Penn and Christy 1994).

Previous research suggests that the organization of the products to be evaluated is a potentially important moderator of the relative salience of various product attributes (Simonson and Winer 1992; Simonson, Nowlis and Lemon 1993). When product information is organized according to levels of a specific attribute (e.g., by brand, by flavor, by price point, etc.), the perceptual salience of that attribute increases (Tversky 1972; Glass and Holyoak 1986); and drawing attention to an attribute increases the importance weight it receives when consumers evaluate products and/or make purchase decisions (MacKenzie 1986; Hutchinson and Alba 1991). In addition, product organization influences the ease with which consumers can compare alternatives on various attributes, and therefore, the likelihood that a given attribute will be the basis for selecting alternatives (Russo 1977; Bettman and Kakkar 1977; Wright and Barbour 1977). Hence, when attribute information about various wines is organized according to region categories (i.e., Texas versus France), consumers are more likely to compare alternatives using the region attribute. Decision heuristics emphasizing the region attribute should increase the purchase likelihoods of alternatives from regions with considerable equity, and penalize alternatives from regions having little or no equity.

REGION EQUITY AND WINE PURCHASE DECISIONS

French wines enjoy a prestige that is unmatched by any other wine producing country, and there is little doubt that the region equity of France is central to the success of French wineries entering foreign markets (Molyneaux-Berry 1990; Kiley 1997). Although French prestige may foster perceptions of higher prices (Lukow 1989), French wines, nevertheless, fare well when consumers compare and select wines on the basis of region (Keown and Casey 1995; Waal 1997).

On the other hand, Texas is generally not perceived as a premier wine producing region, despite having excellent climatic conditions for various varieties of wine (Dodd 1994; Dodd, Pinkleton, and Gustafson 1996). When production region is made salient to consumers comparing unfamiliar wines, Texas wineries would almost certainly be penalized relative to French wineries, assuming other relevant attributes (price, vintage, etc.) were comparable or otherwise low in salience (Areni, Duhan, and Kiecker 1997). Hence, when comparable French and Texas wines are in an evaluation set, organizing products according to region should increase the purchase likelihood of the French wine and decrease the purchase likelihood of the Texas wine relative to when products are organized according to another attribute (i.e., Chardonnays versus Cabernet Sauvignons). This suggests the following hypotheses:

H1:  For American wine consumers, when an evaluation set includes a French wine and Texas wine of the same variety, the purchase likelihood of the French wine will be higher when product information is organized according to region categories rather than variety categories.

H2:  For American consumers, when an evaluation set includes a French wine and Texas wine of the same variety, the purchase likelihoo of the Texas wine will be lower when product information is organized according to region categories rather than variety categories.

In the United States, California wines enjoy considerable region equity with American consumers (Sommelier Executive Council 1992). California is easily the top wine producing state in the U.S. in terms of prestige (Wiegand 1995) and volume (Dodd 1995; Dodd and Bigotte 1997). Several regions within California have garnished a world-renowned reputation for producing top quality wines (Molyneaux-Berry 1990; Sommelier Executive Council 1992), and for several varieties, American consumers prefer California wines to corresponding French products (Wiegand 1995). Even European wine drinkers are beginning to recognize the quality of California wines (Sterlicchi 1989), although there is still considerable work to do before California approaches the prestige of France (Sternberg 1994). It is, therefore, difficult to derive definitive predictions regarding the effect of product organization on the purchase likelihoods of wines from France versus California. Hence, the null hypotheses of little or no effect are explicitly stated and tested against the alternative hypotheses which parallel the predictions for Texas wines:

H30:  For American wine consumers, when an evaluation set includes a French wine and California wine of the same variety, the organization of product information will have little or no effect on the purchase likelihood of the French wine.

H31:  For American wine consumers, when an evaluation set includes a French wine and California wine of the same variety, the purchase likelihood of the French wine will be higher when product information is organized according to region categories rather than variety categories.

H40:  For American wine consumers, when an evaluation set includes a French wine and California wine of the same variety, the organization of product information will have little or no effect on the purchase likelihood of the California wine.

H41:  For American wine consumers, when an evaluation set includes a French wine and California wine of the same variety, the purchase likelihood of the California wine will be lower when product information is organized according to region categories rather than variety categories.

METHOD

Design

Hypotheses 1-4 were tested via a laboratory experiment involving 96 Executive MBA students from a major university located on the east coast of the United States. The conditions in the experiment were structured as a 2 (product organization) x 2 (U.S. comparison region) x 2 (country of origin) mixed factor design. Product organization, a between-subjects factor, was based on whether the information about the various wines was featured within region of origin categories or wine color/variety categories. U.S. comparison region, also a between-subjects factor, pertained to whether respondents were rating an American Chardonnay from Texas versus California. The Chardonnay variety was selected because it is widely produced in all three regions, and thus, would not represent a cue that was incompatible with the region of origin information (see Keller 1993; Leclerc et al. 1994). Finally, country of origin, a within-subjects factor, assessed how the U.S. wine compared to the corresponding wine from France.

Procedure

Respodents participated in groups of five in private cubicles that restricted visual contact with one another. Upon entering the laboratory and taking a seat at one of the cubicles, respondents were told that they would evaluate various wines using the questionnaire in front of them. On the second page of the questionnaire, 18 wines were briefly profiled; this represented a cross section of six varieties (i.e., Chardonnay, Riesling, Cabernet Sauvignon, Chianti, Zinfandel, and Table Blush) from each of the three regions (i.e., California, Texas, and France). For each wine, the table of information contained: a) a number, b) a single letter brand name (e.g., Brand I, Brand J, etc.), c) the color and variety, and d) the region of origin of the wine. To enhance the realism of the task, respondents were instructed that other important pieces of information (e.g., price, vintage, brand name, etc.) were deliberately omitted from the descriptions for purposes of the study (see Lockshin and Rhodus 1993).

The third and fourth pages of the questionnaire items for measuring the purchase likelihoods for 14 of the 18 wines in the table. The specific wines to be evaluated were indicated by referring to the corresponding number in the table. Only 2 of the 14 wines were of interest, the U.S. Chardonnay and the French Chardonnay. The remaining wines were intended to draw respondents’ attention away from the purpose of the research. In each version of the questionnaire, the U.S. Chardonnay was rated second and the French Chardonnay was rated sixth.

Independent Variables

Product organization was manipulated by altering the organization of the product information on the second page of the questionnaire. In the by region of origin condition, the various wines were listed under the headings "Texas Wineries," "California Wineries," and "French Wineries." In the displayed by color/variety condition, the wines were placed into three groups according to their color, with the labels "Red Wines," "White Wines," and "RosT Wines" appearing over the corresponding set; subheadings indicated that wines were either Chardonnays or Rieslings (within white wines), Chiantis or Cabernet Sauvignons (within red wines), or Zinfandels or Table Blushes (within rosT wines). U.S. comparison region was manipulated by describing the second wine to be rated as a Chardonnay produced in Texas versus California. Finally, country of origin was manipulated by having each respondent rate a Chardonnay from the U.S. region (either Texas or California) and a Chardonnay from France.

Dependent Variable

Respondents rated each of the 14 wines with respect to purchase likelihoods on the third and fourth pages of the questionnaire. Respondents answered the item: "Based only on the information given, how likely is it that you would purchase a wine like Wine " on your next trip to the store?" on two seven-point response scales anchored by "unlikely (1)-(7) likely" and "improbable (1)-(7) probable." The average of the two responses served as the purchase likelihood measure.

Manipulation Check

In order to directly assess relative preferences, and hence, the "equity" of the three regions, respondents answered: "Overall, what is your preference regarding (region) wines?" on 2 seven-point scales anchored by "dislike (1)-(7) like" and "do not enjoy (1)-(7) enjoy." The region preference measure was based on the average of the two responses. Three items were included for Texas, California, and France, respectively, near the end of the questionnaire after all the dependent variables had been reported.

RESULTS

In order to establish relative preferences by region, a one-way ANOVA was performed with region of origin, a repeated factor, as independent variable and the manipulation check measure as the dependent variable. The results revealed that the main effect of region of origin easily attained significance (F2,174=173.8, p<.0001). Further analysis of the region of origin main effect revealed that French wines (M=5.5) received a higher general preference rating than did California wines (M=4.9; F1,91=14.5, p<.0003). Not surprisingly, French wines also received a higher general preference rating than did Texas wines (M=2.3; F1,88=220.4, p<.0001), and finally, the general preference rating for California wines was significantly higher than the rating for Texas wines (F1,87=209.7, p<.0001). Apparently, for these respondents, France held the most region equity regarding wine production, but California also possessed a fair amount of equity, finishing a close second. Consistent with expectations, Texas did indeed lag far behind France and California in terms of region equity. Hence, the foundation for Hypotheses 1 and 2 is further supported by the manipulation check measures, but Hypotheses 3 and 4 are still open to speculation given the relatively close preference ratings of California and France.

Research Hypotheses

Hypotheses 1-4 were tested via a three-way mixed factor ANOVA with product organization, U.S. comparison region, and country of origin as independent variables and purchase likelihood as the dependent variable. The first two independent variables were treated as between-subjects factors, and the third was treated as a repeated factor. Results indicated a main effect for country of origin (F1,78=26.7, p<.0001). As expected, the French Chardonnay (M=4.4) received higher purchase likelihood ratings than the Chardonnays from the U.S. (M=3.1), without considering the specific comparison region. The main effect for U.S. comparison region was also significant (F1,78=3.7, p<.05); purchase likelihoods were higher when the U.S. comparison region was California (4.2) rather than Texas (2.0). Not surprisingly, the country of origin x U.S. comparison region also attained significance (F1,78=38.9, p<.0001). The purchase likelihood for the French Chardonnay (M=4.9) was higher than that for the Texas Chardonnay (M=2.0) when the two regions were compared directly (F1, 81=58.1, p<.0001). But there was little or no difference in purchase likelihoods when the French Chardonnay (M=3.9) was compared to the California Chardonnay (M=4.1; F 1,78<1).

Although the main effect of product organization failed to attain significance (F1,78<1), both the product organization x country of origin (F1,78=8.6, p<.005) and the product organization x U.S. comparison region interaction reached significance (F1,78=4.9, p<.03). However, the product organization x country of origin x U.S. comparison region effect did not attain significance (F1,78<1). The mean contrasts pertinent to Hypotheses 1-4 are depicted in Figures 1 and 2. As shown in Figure 1, when the French Chardonnay was compared to the Texas Chardonnay, product organization had little or no effect on the purchase likelihood for the French wine (F1,41<1). Purchase likelihoods were only slightly higher when products were organized into country/region categories (M=5.0) versus color/variety categories (M=4.7). Hypothesis 1 was not supported. However, product organization did influence the purchase likelihood of the Texas Chardonnay (F1,41=7.3, p<.01). Consistent with Hypothesis 2, purchase likelihoods were lower for the Texas wine when products were organized according to country/region (M=1.5) versus color/variety (M=2.6) categories.

Consistent with Hypothesis 31, product organization influenced the purchase likelihood of the French Chardonnay when it was compared to the California Chardonnay (F1,39=8.8, p<.005). As shown in Figure 2, the purchase likelihood rating for the French wine was higher when products were organized by ountry/region (M=3.0) versus by color/variety (M=4.7) categories. However, product organization had little or no impact on purchase likelihood for the California Chardonnay when it was compared to the French Chardonnay (F1,39<1). Hence, Hypothesis 40 could not be rejected.

DISCUSSION

The most surprising deviation from expectations was that the organization of product information had a strong effect on the purchase likelihood of the French Chardonnay when the French wine was compared to a California Chardonnay. Why would displaying product information by region benefit the French wine if France was not perceived as being superior to California? This result was quite surprising given that there was no overall difference between purchase likelihoods for wines from the two regions. The second major deviation from expectations was that, when the Texas and French Chardonnays were included in the evaluation set, the organization of information affected purchase likelihoods of the former but not the latter region. Both of these deviations from expectations can be explained in terms of respondents’ relative familiarity with wines produced from each of the three regions.

For wine consumers leaving in the eastern United States, Texas is likely to be unfamiliar as a wine production region. It is likely that many of the respondents never actually consumed a Texas Chardonnay, and that many were not even aware that Texas produced quality wines (see Dodd 1995). Although wine consumers may revere France as a wine production region, they may not personally drink French wines, at least not on a regular basis (Kiley 1997). The reaction to the French Chardonnay may have been driven more by the prestige and reputation of the region rather than through personal experience with French wines. By contrast, most American wine consumers are likely to have at least tasted California Chardonnays. California produces roughly 90% of the Chardonnay in the U.S., and has achieved the most intensive channels of distribution (Dodd 1995; Sommelier Executive Wine Council 1992). In short, respondents were probably far more familiar with California Chardonnays than they were with Chardonnays from France and Texas.

FIGURE 1

PURCHASE LIKELIHOOD FOR FRENCH VERSUS TEXAS CHARDONNAY BY PRODUCT ORGANIZATION CONDITION

FIGURE 2

PURCHASE LIKELIHOOD FOR FRENCH VERSUS CALIFORNIA CHARDONNAY BY PRODUCT ORGANIZATION CONDITION

As consumers become more familiar with a product, preferences begin to stabilize, and situational variables have less of an impact on choice (Bettman and Zins 1977; Bettman 1979); consumers may even rely solely on attitudes retrieved from memory to complete the choice task (Fazio, Powell, and Williams 1989). Hence, when the evaluation set included California and France, attitudes toward California Chardonnays may have served as "anchors" against which the France wine was assessed. When region was made salient in the information table, subjects reacted to the cachet of France and rated the French Chardonnay as superior even to California. But when region was less salient, favorable attitudes toward California Chardonnays were retrieved, and subjects rated the French Chardonnay (and indeed all the other wines) as being inferior. On the other hand, when the evaluation set included the French and Texas Chardonnays, France rather than Texas served as the anchor. The purchase likelihood for the French Chardonnay was relatively stable across information organization conditions. But Texas, an unfavorably perceived region, was heavily penalized when the information display format made region of origin salient.

The research reported above holds practical significance for marketing efforts in the wine industry. Specifically, wineries from regions not generally associated with wine production have begun pooling their promotional dollars in order to compete with the better known regions in France and California (Jenkins 1992; Phillips 1992; Voight 1995). This research suggests that wineries from lesser known regions would be well advised to highlight attributes on which they are likely to compare favorably (e.g., value for the money, performance in competitions, emphasis on a specifc variety, etc.) rather than focusing solely on the production region. On the other hand, wineries located in regions having strong reputations are likely to benefit from cooperative promotions focusing on the region, and would be well advised to manipulate the in-store environment (i.e., via labelling, signage, special displays, etc.) to maximize the salience of the region attribute.

One critical limitation of this research is that respondents were presented with very little product information, and information on attributes known to be salient to wine consumers (e.g., price, vintage, brand name, etc.) were not included in the information table. Moreover, only two attributes, production region and wine variety, were allowed to vary across the 14 wines rated by the respondents. Together, these two restrictions probably inflated the impact of the region manipulation (see Wall, Liefeld, and Heslop 1991; Peterson and Jolibert 1995). Future research should manipulate production region in conjunction with several other salient attributes (see Zaichkowsky 1988) in a full factorial design in order to better assess the relative impact of region equity on purchase likelihoods.

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