Market Segment Analysis to Target Young Adult Wine Drinkers

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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 the legal drinking age range of 21 to 28+ This empirical study describes the perceptions and attitudes of 108 Millennials regarding wine and what the wine industry can do to better market to them in a responsible manner+ Results indicate that there is a need for greater wine advertising to this group utilizing fun, social, and relaxed settings; more innovative packaging and labels; a focus on “value” wines; as well as taste enhancements and environmental emphasis+ @EconLit citations: M310# + © 2006 Wiley Periodicals, Inc+

1. INTRODUCTION
With the recent oversupply of wine on the global market ~ Penn, 2004! and a persistent plethora of new and second or third wine labels being introduced, wine marketing continues to be highly competitive and challenging+ Due to this situation, many wine marketing experts recommend that we need to focus our efforts on finding new populations of wine consumers ~ Baenen, 2002; Cartiere, 2001; Diaz, 2002; Gillepsie, 2005!, rather than just redoubling efforts with existing consumers+

Wine marketers in the United States have primarily focused on the existing population of wine consumers, which are the very large and affluent Baby Boomer generation, at 80 million strong ~ Lancaster & Stillman, 2002; Wine Market Council, 2003!+ This was an effective strategy for many years, when the wine supply and economic conditions were stable+ Now, however, one of the most promising of the new wine consumer segments in the United States is that of the Millennial or Echo Boomer generation+ Generally viewed as “children of the Baby Boomers,” the Millennials are considered to be the largest consumer group in the history of the United States in terms of their buying power and represents the future market for most consumer brands ~ Harris Interactive, 2001!+ According Agribusiness, Vol. 22 (3) 307–322 (2006)

© 2006 Wiley Periodicals, Inc.
Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/agr.20088

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to the Wine Market Council ~2003!, this consumer segment is already consuming larger quantities of wine than the previous generation, Generation X+ However, very little research has been conducted on why this group is drinking wine, as well as their viewpoints and recommendations on wine marketing in general+

With this in mind, a research study was designed to identify the perceptions and attitudes of the millennial generation towards wine+ A videotaped interview format was used to capture in digital film the image and voices of 108 participants+ This article describes the results of the study, as well as implications for future wine marketing efforts to this promising consumer segment+

2. REVIEW OF THE LITERATURE
2.1 Customer Segmentation in the Wine Industry
Market segmentation, or the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups ~ Zikmund, 1999!, is used in multiple industries+ In general, segmentation is useful for two major reasons+ First, it assists marketing researchers in analyzing the needs of a specific customer segment+ Second, from the resulting data, it allows marketing campaigns to be focused on these identified needs+ In the long run, this...
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