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The Loyalty Structure of Sparkling Wine Brands in Italy

19 citations0/0 files storedJournal of Wine Economics

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Wine Industry and Tourism Consumer Market Behavior and Pricing Consumer Behavior in Brand Consumption and Identification

Abstract

Abstract This article analyzes consumer loyalty in the Italian market for Prosecco sparkling wines. In particular, we examine the relationship among wine appellation, price, and consumer loyalty. To that effect, we run a Dirichlet model on Nielsen scan data to estimate brand performance measures and study purchase patterns in the sparkling wine market. We find that Prosecco wines benefit from high-consumer loyalty, and that this loyalty can be explained by both the appeal of the Prosecco appellation and its upper-tier price point. We conclude that promotion strategies with deep discounts, as they affect the appellation's image, might hurt consumer loyalty in the long run. (JEL Classifications: D12, L11, L66, M31)

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References

2003Customer loyalty and customer loyalty programs 2003Understanding brand performance measures: using Dirichlet benchmarks 1984The Dirichlet: A Comprehensive Model of Buying Behaviour 2007Revealed preference analysis of red wine attributes using polarisation 2013Determinants of WTP for Prosecco wine 2015Who likes it “sparkling”? An empirical analysis of Prosecco consumers’ profile 2018Understanding consumption choice of prosecco wine: an empirical analysis using Italian and German Homescan data 2011A better understanding of the structure of a wine market using the attribute of variety

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