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Evaluating the worth of nascent old vine cues for South African wines

Evaluating the worth of nascent old vine cues for South African wines In increasingly competitive markets, opportunities exist to meaningfully differentiate product offerings by cue signalling the claims of emergent categories. Therefore, and within the context of wine sales, the purpose of this study models the supply-led price importance of nascent, extrinsic old vine (OV) cues for South African wines to establish whether to what extent and how producers prioritise such nascent cues relative to more established extrinsic cues of worth.Design/methodology/approachA data set was compiled of 159 South African wines with OV category cues signalled on front labels, back labels or via marketing material. The play of contending cue variables was computed through an ordinary least square hedonic pricing model.FindingsIn addition to the contribution of established cues such as aggregated critic ratings, grape varieties and area of origin, this study confirms that vineyard age contributes significantly to wine price, particularly when signalled on back labels.Practical implicationsIn price setting and positional models, such as brand extensions, the findings prove useful in understanding the inherent value of nascent cues and specifically vineyard age, relative to competing established wine cues of worth.Originality/valueThis study extends the wine pricing theory by validating the viability of nascent OV cues in the modelling of a wine’s value. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Wine Business Research Emerald Publishing

Evaluating the worth of nascent old vine cues for South African wines

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References (75)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1751-1062
DOI
10.1108/ijwbr-04-2019-0029
Publisher site
See Article on Publisher Site

Abstract

In increasingly competitive markets, opportunities exist to meaningfully differentiate product offerings by cue signalling the claims of emergent categories. Therefore, and within the context of wine sales, the purpose of this study models the supply-led price importance of nascent, extrinsic old vine (OV) cues for South African wines to establish whether to what extent and how producers prioritise such nascent cues relative to more established extrinsic cues of worth.Design/methodology/approachA data set was compiled of 159 South African wines with OV category cues signalled on front labels, back labels or via marketing material. The play of contending cue variables was computed through an ordinary least square hedonic pricing model.FindingsIn addition to the contribution of established cues such as aggregated critic ratings, grape varieties and area of origin, this study confirms that vineyard age contributes significantly to wine price, particularly when signalled on back labels.Practical implicationsIn price setting and positional models, such as brand extensions, the findings prove useful in understanding the inherent value of nascent cues and specifically vineyard age, relative to competing established wine cues of worth.Originality/valueThis study extends the wine pricing theory by validating the viability of nascent OV cues in the modelling of a wine’s value.

Journal

International Journal of Wine Business Research – Emerald Publishing

Published: Apr 30, 2020

Keywords: Marketing; Old vineyards; Market signaling; Hedonic pricing; Nascent cues; South Africa; Wines; Regression; Analytical economic model; Marketing research

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