In one of my classes this week, the professor ran a very interesting experiment. We had a blind tasting of 3 cups of vodka - two from the same brand, and the third from a different one. The two brands poured are Smirnoff and Absolut, but we don't know which brand is poured into two cups instead of one. The experiment was conducted in a double-blinded way (i.e., the professor didn't know the right answer till the experiment is done), and the question for us was to identify which cups are from which brand.
Before the experiment, many of us were quite confident that Absolut "tastes better" and is "smoother" than Smirnoff (myself included). As a matter of fact, Absolut's retail price is about 50% more than that of Smirnoff. However, when the class started tasting, we very much disagreed with each other on our perception of the results. In the end, only one student out of 15 gave the correct answer (expected value of a correct random guess is 1/8 - we did worse than guessing randomly).
The purpose of the experiment was to show us the power of branding and consumer perception. That made me reflect on the wine market as well - how does branding affect our perception of the quality of the wine? Obviously, it's easy to tell the difference between a $5 bottle and a $100 one, but how do consumers differentiate the difference between a) a $100 bottle and a $500 bottle, and b) a $7 bottle and a $10 bottle?
It's interesting to further reflect on the concept of branding in wine. What does it exactly mean? We learned about 5 ways of brand association in class: Sincerity, Excitement, Competence, Sophistication, and Ruggedness.
- Sincerity: to be "sincere" in wine probably most closely means to be honest. Label the wines in a consumer-friendly way, and call it what it is. I think the Foot of the Bed Cellars that the Wine Circle introduced to us in a tasting event is a good example of it - unassuming design and super easy to read labels.
- Excitement: this has much to do with the design and labeling of the bottle. A quite effective way to introduce excitement is through complete subversion of the traditional image of wine: to turn the elegant, exclusive, mature image of wine into a unvarnished, embracing, and young one. The success of Apothic wines could be a good example of using excitement to capture the younger drinkers.
- Competence: winemakers can also achieve brand recognition through proven competence. I think Kirkland Signature can be a "pure play" competence brand: consumers really don't get any utilities from its brand except for knowing that it is a drinkable wine at a very affordable price.
- Sophistication: this is likely the most widely used strategy in wine branding, from the Burgundy 1er Crus to the $100+ bottles in Napa. When consumers purchase a sophisticated brand, they experience two levels of enjoyment: one from the self-realization of their capability to appreciate sophistication, and one from the expected recognition from others of the consumer's status. Drinking a bottle of Opus One is not that different from wearing an Hermes.
- Ruggedness: this could be an interesting one... Surprisingly, winemakers can associate their bottles with ruggedness yet drinkable. Consider 19 Crimes - it sells wine through association with the earliest prisoners sent to Australia from the UK. The image of untamed, brave explorers of the new world strangely speaks to wine drinkers - maybe it's in wine where people are searching for their alter ego.
Foot of the Bed Cellars - Sonoma Valley Syrah:
Apothic wines:
Kirkland Signature
Petrus, retails at $3,500+
19 Crimes:
