Market Segment Analysis to Target Young Adult
Wine Drinkers
Elizabeth C. Thach
School of Business and Economics, Sonoma State University, 1801 E. Cotati
Ave., Rohnert Park, CA 94928. E-mail: Liz.Thach@sonoma.edu
Janeen E. Olsen
School of Business and Economics, Sonoma State University, 1801 E. Cotati
Ave., Rohnert Park, CA 94928. E-mail: Janeen.Olsen@sonoma.edu
ABSTRACT
Consumer segmentation in the wine industry takes on many forms: demographic, geographic, behavioral, and others+ In the United States, one of the most promising new demographic segments is the
Millennial or Echo Boomer segment, which is being targeted by many consumer industries due to its size and buying power+ For the wine industry, this group currently fits
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geographic, which is based on where the customer lives, such as country or city; ~2! demographic, which is based on age, gender, income, social class, and so on; ~3! psychographic, which is based on lifestyle and personality; and ~4! behavioral, which is based on occasions, benefits, usage rate, readiness to purchase stage, and so on+ ~ Zikmund, 1999!+
In the wine industry, some of the most extensive research on market segmentation has come from Australia+ One of the premiere studies was that of McKinna, in which he focused on the geographic segment of consumers in the South Australian wine industry, and then was able to divide this consumer grouping more specifically into a psychographic segmentation based on five wine lifestyles ~ McKinna, 1986!+ This research was further expanded upon and empirically validated by a cadre of other wine marketing researchers ~ Bruwer, Li, & Reid, 2001; Hall & Winchester, 1999; Johnson, Ringham, &
Jurd, 1991; Spawton, 1991a!+ The most recent empirical findings using this lifestyle segmentation suggest that the following five consumer segments are confirmed in
The premium wine segment is quite concentrated with high barriers to entry making mergers and acquisitions a strong and prevalent growth strategy. With industry analysts forecasting the demand for premium wine to grow at 8% to 10% per year, many former non-rivals are now becoming a threat. Jug wine producers are entering the premium market and beer and spirit producers
Identifying a new market can be a challenging task. However, when examining the preferred alcoholic beverage of three major age groups, one in particular stands out. Of the three age groups, fifty and older consumers are the age group with the smallest preference for beer. Figure 2 on the following page compares the alcoholic beverage preference for three major age groups.
Shifting demographics: Millennials have emerged as the most populous generation in the United States. As this group’s disposable income rises, industry operators will increasingly cater their services to attract these individuals. Millennials are
C) The key consumer segment is the younger drinker who aged 21 to 27. They were first time drinker that not founded loyalty to any brand yet accounted for large beer consumption. The segment tended to purchase more light beer instead of lager.
The smooth taste of American Contradiction is intended for a broad market so that anyone of legal drinking age may enjoy. Male, female, no one is excluded but, American Contradiction’s advertising will be focused more towards the male segment of the available market. The target market of age for American Contradiction is 21 plus. This approach targets all, of age individuals and businesses that can purchase the product. The reason for this all-inclusive targeting is based on an analysis of the distilling industry, which reports an overall trend in increased per capita spending on alcohol (Stivaros, 2015). The income level of a target consumer of American Contradiction is based on the per capita of disposable income, which is roughly defined
This growing demand has added to the attractiveness of the industry with many new producers entering the market. US Wine producers have also been able to establish an improved reputation among experts and are now becoming more accepted internationally. Wine producers have managed to make their products more accessible to consumers, offering them through a wider array of distribution channels. In relation to foreign competitors, US wine consumption is still small, with Americans consuming less than 3 gallons per person, demonstrating more room for industry growth. Wine sales through eccomerce and other direct to consumer sales have also experienced rapid growth. Laws facilitating direct-to –consumer shipments have helped in the increase of distribution of wine eliminating the need for other distributers.
Aging Baby Boomers are the biggest spenders because they are the wealthiest and most educated with a large portion of disposable income (Business Insider, 2015). Boomers are seen as “workaholic” and as retirement comes around many individuals are taking active retirement which allows them to continue working and make additional money (Williams and Page, 2010). Baby Boomers are price conscious, but are more focused on receiving a product that best suits them. When they find a brand or style that they like, they continue to purchase that item (Williams and Page, 2010).
different goals and scenarios the customers might find themselves in when interacting with a specific touch~point (website, catalogue, shop floor etc.). Unlike typical demographics
In 2001 there were over 1 million wine producers worldwide, and no firm accounted for more than 1% of global retail sales. Because of this, it would be nearly impossible for the Robert Mondavi winery to dominate sales in any region. Due to Mondavi’s efforts, the winery became one of America’s most innovative,
The United States wine industry is a 12 billion dollar industry and is composed of 7,000 wineries and around 1,800 different companies. The three major companies within the industry are Constellation brands, E&J Gallo, and The Wine Group Inc. The industry has made its way through the economic crisis at a better rate than some of the other U.S industries however in order for them to continue to see any type of growth it is important that they acknowledge their issues and find ways in which they can rectify them. The majority of the issues among the industry are problems that cannot be directly controlled by individual wine companies. Therefore it is imperative that wineries find away to use these issues to their
Armstrong, G. Brown, L. Burton, S. Deans, K., & Kotler, P. (2010). Marketing (pp. 4-40). New South Wales: Pearson
In the most recent years, domestic sales of wine has declined constantly. The wine consumption is becoming more occasional. This is partially due to an aggressive anti-alcohol campaign and driving restrictions set by the local government, but also facilitated by a lack of marketing strategy: the wine market is loosing touch with the youth (the average age of wine drinker is gone up from 35 to 55) and young people are getting more keen to beer or alcohol pops.
This paper will outline an executive summary of a marketing strategy of a new wine brand to a targeted audience that will incorporate the buyers motivation, psychographics, and demographics. A description of the overall marketing strategy will include advertising, customer relationship manager and a Public Relations campaign. Finally, a an overall strategy to position the brand against the competition will be outlined.
1.Identify the sources of internal and external data for all three (3) types of customers.
2. The identification of the customer segment / customers who are supposed to experience the service