Before the GSB I worked for two year in economic consulting, and about 80% of my time was doing conjoint analysis. Conjoint analysis is a really common tool in surveying and marketing to determine how much a consumer is willing to pay for a feature of a product. For example, are you willing to pay more for a jacket that is red or blue? Wool or polyester? And how much? The way that it is (generally) done is by showing consumers a few different options of a product, and seeing which one they select. So the study might show you three items:
(1) A red jacket, made of wool, produced in America, priced at $100
(2) A blue jacket, made of wool, produced in Bangladesh, priced at $120
(3) A red jacket, made of polyester, produced in America, priced at $80
After showing a variety of different selections to thousands of people, researchers can parse out your willingness to pay for each attribute of the item (e.g., I am willing to pay $10 more for a red jacket than a blue one).
In academia, some very classical studies have been done on wine. There are multiple articles written by two professors in Spain (Mercedes Sánchez and José Maria Gil) that evaluate consumers’ preferences on wine from two different Spanish regions – Aragon and Navarre. One that I find particularly interesting evaluates the difference in consumer preferences by the outlet where they purchase (wine shops, supermarkets and directly from the producer). Here, instead of evaluating exactly willingness to pay, they used a slightly different model and evaluate the attribute that has the biggest impact on a consumer’s decision. They find that price is the most important aspect for wine shop consumers, origin is the most important attribute for supermarket buyers and vintage is the most important for those who buy wine directly from the produce.
What do you think are some potential reasons for this?
This is interesting! My intuition would have been that price was the most important aspect for supermarket buyers as opposed to wine shop buyers. Purchasing for the supermarket seems opportunistic - you might grab a bottle of wine if you are there for other items. A wine shop seems like you are intentionally seeking wine, and might be searching for specific characteristics in addition to price. Since this study took place in Spain, I wonder if there is a different culture around wine shops? My impression is that in the U.S. wine shops tend to carry wine that is considered higher-end and specialty, whereas grocery stores carry more mass market wines. If this study was re-created in the U.S. would the results be replicated?
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