When the CEO of Ambev came to speak one day at the GSB I remember asking him why he has decided not to venture Ambev into the wine industry. He responded that people do not tend to order wine based off a company but rather based off a region/type. His brands such as Corona and Budweiser are iconic names that people order based off the company and he said he did not think he can emulate that same type of success with wine.
I found his answer to be very interesting and it is something I never really thought of. Whenever I go to a restaurant, I tend to order based off the category of wine, whether it be Merlot or a Sauvignon Blanc. I do not order based off of the company of the wine. Having these case studies and hearing our guest speakers has certainly made me realize how much more of a competitive industry the wine industry is and it has give me a new found respect to the titans of the industry.
Nathan, thanks for posting this! I wanted to respond and think through my own decision making process as well as brainstorm if this behavior varied based on consumer segment.
ReplyDeleteSimilar to you, I also order based on the category of wine. However, my decision is less of a well-informed choice based on my food choices or mood, and more so of sticking with generalized norms about wine - such as cabs are easy or generally avoiding merlots. And as we've discussed in class, by glass choices for wine are most often influenced by pricing structure within that category. I would definitely feel weird/anxious if I ended up not liking a new wine varietal I tried, and then having to deal with drinking it or sending it back. Therefore, I really agree with the hypothesis that wine is not bought based on brand/company/geography and more on type and price. I would guess this applies to the average wine drinker and therefore is the biggest driver in economic considerations for beverage makers such as the CEO of Ambev.
I would want to bring two other factors into consideration. The first being marketing! We haven't spent much time on this piece in class, but I am curious to think through the customer decision making process for ordering in social settings versus buying in store/online. Topics such as label, name or geography all come in to play in the store. It'd be interesting to do some A/B tests on how people taste with different marketing.
And lastly for the customer segment that is more educated about wine, I would guess their decision making is much more nuanced. But this segment is likely a minority and also not the target audience for a company such as Ambev!