A segmented analysis of consumer willingness-to-pay for rakija

Abstract

Two research projects focusing on distillers and consumers regarding the economics of rakija in Serbia resulted in the publication of two papers on market segmentation of rakija. The author initially believed that an identical number of segments eliminated the need for further investigation into consumers' willingness-to-pay for rakija. However, this conclusion was flawed. This study conducts a comprehensive analysis of prices across segments based on consumer attitudes. The findings are presented using the mean and median as measures of central tendency, while the 5% trimmed mean, interquartile range, and standard deviation are used as measures of dispersion. The "traditionalist" segment reported the highest average fair price for rakija at M = 14.67 (Mdn = 12.35), while the "price-limited" segment had the lowest at M = 12.31 (Mdn = 10.22). The "modernists" segment fell in between, with an average of M = 13.69 (Mdn = 10.22). All values are expressed in euros (EUR). Data from a 5% trimmed mean analysis show that most respondents across all segments consider 12 EUR to be a fair market price for a bottle of the national alcoholic beverage. This price, however, does not align with current market prices but reflects what consumers are willing to pay for rakija of acceptable quality. Producers who can meet this quality standard at the indicated price, particularly when targeting the "modernist" segment, may achieve favorable business outcomes in the Serbian market.

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