Research Korner: Food and Drink

Marketing Strategy and Consumer Perception of Organic Wine in Greece                                 Abstract                  Currently, organic wines in Greece are having a fair share in the market. In 1997 to 1998, the market share of organic wines in Greece was 10% (, 2002). However, even though this is a fair sign of increasing organic wine market in Greece, the problem is that there are special challenges that organic products producer face, not to mention the fact that conventional wines are still more in demand in Europe (, 2000). Marketing strategies in organic wines still lack investigation that is why there is little idea about its status in the Greek market. This paper proposes an investigation on the marketing strategies of organic wine companies in Greece and the perception of Greek wine consumers toward organic wines. The aim of the study is to descriptively present information about the status of organic wines in the market by analyzing if the marketing strategies of companies are aligned with the preferences and perception of consumers toward organic wine.  Both quantitative and qualitative research will used in the investigation. Other details are presented in the paper.                           Table of Contents     1. Introduction ………………………………………………………………………….1   1.1.           Aims and Objectives …………………………………………………..3 1.2.           Significance of the Study ……………………………………………..4 2. Statement of the Problem/Research Questions ………………………………...5 3. Hypothesis …………………………………………………………………………..7 4. Literature Review …………………………………………………………………..8 5. Methodology ………………………………………………………………………..12             5.1.      Primary Data Collection ………………………………………………12 6. Results and Discussion ……………………………………………………………13 7. Conclusion ………………………………………………………………………….13 8. Limitations …………………………………………………………………………..14 9. Reflection ……………………………………………………………………………14   References …………………………………………………………………………….15   Appendices …………………………………………………………………………….17                                                     Marketing Strategy and Consumer Perception of Organic Wine in Greece     Introduction   Wine is one of the oldest products of Greece. This can be reflected from the texts of Greek mythologies where it is elaborated how humans and gods happily consume wine. Viniculture and wine production has flourished in the country and still flourishes in accordance with cultural heritage ( 1999). Ancient Greeks knew well the nutritional value of wine as well as its important role to the growth of the local economy ( 2005). For centuries, wine has been the drink of choice of popular and important people in history – not only in Greece, but in other countries as well. Today, wine is one of the highlights of the Greek economy. Greece is known to produce some high-quality wines that people from all over the world can enjoy. However, being known as a producer of some high-quality wine is not enough to become impressive in the global wine industry. Recently, production of wine in Greece has declined, and compared with other European wine producers, the country has the smallest produce (, 2003). This is in contrast with the high wine consumption of Greeks (, 2003). Because of this, the country depends on imports from other wine-producing countries. Marketing of the local Greek wine is even a problem because most consumers in the country are already taking interests on import wines, especially inexpensive imports ( 2003). Another issue that wine industry face is the growing trend of organic wine. People today can be assumed as more ethical when it comes to production of food and beverages. Currently, organic wines in Greece are having a fair share in the market. In 1997 to 1998, the market share of organic wines in Greece was 10% ( 2002). While this is a fair sign of the increasing organic wine market in Greece, the problem is that there are special challenges that organic products producer face, not to mention the fact that conventional wines are still more in demand in Europe (, 2000). Furthermore, consumers of organic wines are highly segmented.  (1993) stated that organic product purchase is a matter of lifestyle choice by environmentally conscious consumers ( 1993). Buyers of such products are known as the most fanatically devoted “green” consumers (, 2002). Basically, there is still a concern of effectively marketing organic wines to the general consumers. For instance, there is still a problem in the labeling of organic wines, with the addition of consumer preference for Chardonnay and Cabernet (, 2000).               This paper proposes an empirical investigation on the marketing strategies of organic wine producers in Greece. As mentioned, marketing organic products is still a challenge for most organic products companies because of the fact that its organic consumers are too little and that most wine consumers still prefer conventional wines. By exploring the marketing strategies of organic wine companies, their approach can be analyzed and new insights will be learned to produce useful recommendations. Investigation on the perception of the consumers regarding organic wine products will also be conducted so that strategies that companies implement can be analyzed and linked with the views of the consumers.   Aims and Objectives               The main aim of the study is to present descriptive information regarding the marketing strategies of companies producing organic wines. Marketing strategies of these companies can be helpful in revealing how effective organic wines are marketed in Greece and how consumers relate to these marketing strategies. This leads to the other aim of the study, which is exploring the views of the consumers toward organic wines. As mentioned, organic products consumers are small in numbers compared with the consumers of traditional products. The challenge for organic wine companies is to create an effective marketing strategy that would not only reach with the organic consumers, but to general consumers as well. Investigating the perception of wine consumers toward organic wine products can help companies re-evaluate their marketing strategies. For this study, consumer perception will be sought to analyze if the marketing strategies of the companies fit well or are effective to those perceptions.               With those aims, the objective of the study is to survey organic wine producer marketing managers as well as a fair sample of wine consumers. The objective is to collect their opinions and perceptions about organic wines. Basically, information about organic wines, marketing strategies of organic wines, and consumer preference on organic wines, will be collected as much as possible – from primary data and secondary data, which will be derived from publication materials such as online journals, books, marketing reports, etc.   Significance of the Study               The study will be significant to organic wine marketers because it will empirically compare the marketing strategies of organic wine producing companies and perception of consumers toward organic wine. Knowing the relationship of the two may open up many interesting facts about organic wine marketing in Greece. Furthermore, the fact that more and more people are becoming health conscious and environment friendly makes improvement for organic wine marketing more relevant. Evaluating consumer perception toward organic wines may give marketers ideas on how their strategies should be patterned with thee general consumers. For instance, findings of the study may be helpful in identifying the labeling preferences of wine consumers, or pricing, or packaging, or anything related with their positive attitude toward organic products. It may also reveal how consumers are knowledgeable with organic products, which will be help companies decide how much information they should share about their organic product in their marketing approach. On the other hand, finding out the current marketing strategies of organic products companies will descriptively reveal their current status. Furthermore, room for improvements might also be identified as well as new issues that deserve further investigation in the future. Overall, this study can be a significant contribution in the field of organic products marketing and consumer perception toward organic products. It is hoped that through this study, new and interesting issues about organic products marketing will be discovered.   Statement of the Problem/Research Questions                 The problem in the study is the effectiveness of marketing strategies of organic wine producing companies in relation with consumer perceptions toward organic wine products.  (2004) stated that the general Greek wine industry is “caught in a marketing vise” (p.50). There is a problem in pricing and branding.  (2004) stated: “Greek wines from international varieties are not lively sellers in retail stores abroad because of relatively high prices” (p.50). In Greece, organic wines can be purchased in organic shops, supermarkets, as well as specialized shops for quality wines (, 2000). However, there is little information on how they are being marketed by companies and how consumers perceive them in terms of the 4Ps of marketing – product, place, price and promotion. Furthermore, it should also be questioned on how they perceive organic wines in terms of quality and difference from conventional wines. Generally, the problem is that we know little regarding such information. This research will descriptively elaborate the current situation of organic wine products in Greece and at the same time evaluate the current marketing strategies of organic wine producing companies and recommend some ways on how those strategies can be improved and aligned with the perception of the consumers toward the product.               Looking at the problem explained above, the researcher formulated the following main research questions:   1.         What are the different marketing strategies that organic products companies utilize to market organic wines in Greece? 2.         What are the perceptions of Greek wine consumers toward Greek organic wines? 3.         Are Greek consumers knowledgeable about the benefits that organic products such as organic wines can give? 4.         Are Greek organic wine companies knowledgeable about the perception of Greek consumers toward organic wines? 5.         Is there a significant relationship between the marketing strategies of organic wine companies and Greek consumer perception toward organic wine? 6.         Are Greek organic wine companies’ marketing strategies effective for the modern Greek wine consumers?               Sub-questions are essential in the development of the study that is to specify the main questions into bits that can be easily researched. The following are the sub-questions in the study:   1.                  How do organic wine companies label their products? 2.                  What are the specific advertisements or promotions that organic wine companies use? 3.                  Compared with conventional wines, is there a specific standard pricing for Greek organic wines? 4.                  What are the special features and benefits of organic wines? 5.                  Do Greek consumers have positive attitude and preference on organic wines? 6.                  What types of people are usually into organic wines?   Hypothesis                 The main idea in this research is to prove a relationship between two variables – marketing strategy of organic wine companies; and perception of wine consumers toward organic wine. With this idea, the study will have four hypotheses:   H1:      Organic wine companies use a variety of marketing strategies related with product, pricing, promotion and place. H2:      Wine consumers still prefer conventional wines from organic wines because of a variety of reasons related to the marketing of the product. H3:      Marketing strategies of organic wine companies are not patterned with the perception of consumers toward organic wine. H4:      Organic wine companies’ marketing strategies for organic wines are not effective for the general Greek wine consumers.     Literature Review               (2005) conducted an investigation regarding the regional trends and national distribution of wines in Greece. The research identified the regions in Greek where quality wine production is prevalent. The researchers mentioned , (, 2005). With the source of data coming from basic surveys of area under vines of years 1989 and 1999 and the intermediate statistical surveys of area under vines for the rest years, the study found that a downward trend effect exists in holdings with area under vines in total country from 1989 to 2003 (, 2005). Furthermore, decreases are also evident to the area under vines and the wine production for the same period. However, an upward trend effect of area under vines was present in region . In general, their study found that in the last five years, there has been an improvement to the cultivated area under vines and to their wine production.  (2005) explained that this is due to implementation of high-level agricultural technology and systematic methods used by most producers, showing that there is a high possibility that organic wines are being given priority.               On the other hand,  (2000) stated that organic agriculture started in Greece in the 1970s – at the time of environmental concern and the desire of Greeks to have more quality living. In the 1990s, big wine firms such as  show their interest and start conversion trials in some of their vineyards (, 2000). From here, outstanding progress in wine making and marketing of products were achieved by organic wine producers both in Greece and towards the Mediterranean Europe ( 2000).  (2000) also mentioned that quality of organic wines meets the high standards in Greece.                (2000) found that Greek organic wine growers rely on traditional Greek wine varieties such as: . Furthermore, French varieties such as: are also used in organic growing. Organic wine growers market currants and raisins, fresh grapes and wines in bottles.  (2000) stated that some of the challenges concerning organic wine growing are soil fertility and plant protection.               According to  (1997) consumer decision making with respect to food is a four-stage process, which are: need recognition, search for information, evaluation of alternatives and choice. The two researchers examined and compared in their study the wine attribute preferences within and between two different Spanish regions, Aragón and Navarra, through of the weighted least squares approach for conjoint analysis. Three attributes have been use in the conjoint design: geographical origin; price; and grape vintage year. Both Navarra and Aragon consumers considered the origin of the wine as the main determinants of their preference. Furthermore, through the comparison of the attribute levels, the study found that consumers from Aragón preferred locally produced and cheaper wines, while consumers from Navarra placed more importance on Rioja and more expensive wines. Basically, they found that two regions may have different behavior toward wine purchase.               Similar with ’ study, (1999) also investigated consumer perceptions about wine and wine attributes, but the location is Greece. They utilize both qualitative and quantitative research. For the qualitative research,  (1999) interviewed 41 consumers and found that for them, wine is considered as “communication” and “warmth”. They also found that most of the respondents prefer the traditional method of wine making, but seem to ignore the origin of the wine. Another significant finding from the qualitative research was that consumers believe wine promotion in Greece is ineffective because they usually consult friends and families when it comes to choosing which wine to drink. On the other hand, (1999) used a questionnaire for the quantitative research. They found that the most characteristic wine attributes expressed by the majority of consumers are “full taste”, clarity, appelation of origin, aroma and attractive label. Secondary attributes are: price, place of purchase and advertisement.    (2002) explored the purchasing motives and profile of the Greek organic consumer. Their country-wide survey shows an alarming result that three consumer groups exist, with the aware non-buyers as the highest: the unaware (18.5 per cent); the aware buyers (8.1 per cent); and the aware non-buyers (73.1 per cent). For the aware buyers, four clusters are identified: the motivated, the price sensitive, the explorers and the “greens”, making our knowledge on the organic buyer clearer and complete.  (2002) concluded that low real awareness, consumers’ contradictory perceptions, lack of any educational/communication activity, low availability and high prices are the major causes of the observed low penetration of the organic products in the Greek market.    (1991) stated that the benefits of wine should be communicated to the consumers through several tangible and intangible processes. The tangible process should appeal to the senses of sight, touch and smell through: quantity of packaging and the materials used; bottle shape; label and information (e.g. variety, region, appellation, vineyard or brand, vine maker’s note, etc). On the other hand, the intangible factors involve: price; outlets where the products are sold; the image of the winery; the personality of the winemaker; the respectability of the agent or distributor; and the communication mix used by the wine company.               (2003) suggested that providers need to consider the adoption of technology by consumers and how this impacts of strategic wine marketing planning.  (2003) reported that the wine-sector is under-utilizing the potential of the Internet as a marketing tool as well as other new technology medium approaches such as: direct and database marketing; telemarketing; email; internet marketing; digital TV; and mobile marketing.   Methodology     The research design to be used is the research process onion (e.g. see Appendix A). The study will be descriptive and will conduct both qualitative and quantitative research. A descriptive research intends to present facts concerning the nature and status of a situation, as it exists at the time of the study ( 1994). It is also concerned with relationships and practices that exist, beliefs and processes that are ongoing, effects that are being felt, or trends that are developing. (, 1970) In addition, such approach tries to describe present conditions, events or systems based on the impressions or reactions of the respondents of the research (, 1994).   Primary Data Collection Methods                 Data will be collected through interview and survey questionnaires. Interviews are to be conducted with organic wine companies. They will be asked about the different marketing strategies they use for organic wines. Interviews will be audio-recorded. On the other hand, surveys will be conducted with wine consumers in several areas in Greece. A 5 point Likert-scaled structured questionnaire will be used for the survey. The Likert Scale will help measure the level of the respondents’ agreement with each available statement (see Appendix B). Results and Discussion               Based on the literature reviewed in this paper, wine marketing in general and consumer perception towards wine purchase are complex issues. Consumers come in many groups and some prefer other brands from the others, while some prefer origins, price and other factors. In the case of organic wines, it seems that the problem would be the knowledge of consumers on such products as well as their strong preference on conventional wines. Basically, there is much to learn about marketing of organic wines and perception of consumers toward it. This study might just as well present findings that are new in the field of wine marketing study.   Conclusion                 The study will investigate the marketing strategies of organic wine companies and the perception of wine customers toward organic wine. The setting will be in Greece, perhaps on one or two areas where winemaking is prevalent. The study will answer questions and prove hypothesis about the relationship between the marketing strategies of organic wine companies and the consumer perception on organic wine. A descriptive qualitative and quantitative research will be utilized in the study. The study will be significant to organic wine marketers because it will empirically compare the marketing strategies of organic wine producing companies and perception of consumers toward organic wine. Literature shows that wine marketing linked with consumer perception is a complex issue that requires deep investigation. Limitations               Perhaps the greatest limitation that the study will have is the number of samples it will cover. Respondents will not be country-wide, but instead will be concentrated in two areas, possibly 5 to 10% from their total population of wine consumers. Another limitation of the study is that there are only few organic winemakers per area in Greece. Thus, such respondents to be interviewed will be limited only to the minimum. In terms of analysis, the study will be analyzed both statistically and interpretatively. Only SPSS and ANOVA will be used for the statistical analysis.   Reflection                 There will be difficulty in obtaining respondents for the study. For instance, there is a difficulty in traveling from one place to another interviewing organic wine producer marketing managers. Thus, if possible, special arrangements will be requested such as online interviews. On the other hand, another difficulty will be pinpointing wine consumers. The plan here is to ask the respondents firsthand if he or she is a regular wine consumer before surveying them. Ethical considerations will be ensured to the respondents. Confidentiality of the respondents answers and identity will be assured. Another concern in this study is the time. Research process will be scheduled and organized thoroughly to avoid conflicts in time and schedule.     References:                                                                   Appendices:     Appendix A: Example of a Research Process Onion       Range                                                            Interpretation             4.50 – 5.00                                                    Strongly Agree             3.50 – 4.00                                                    Agree             2.50 – 3.49                                                    Uncertain             1.50 – 2.49                                                    Disagree                      0.00 – 1.49                                                    Strongly Disagree Appendix B: 5 Point Likert Scale

MARKETING STRATEGY AND CONSUMER PERCEPTION OF ORGANIC WINE IN GREECE

Marketing Strategy and Consumer Perception of Organic Wine in Greece Abstract ...