Key market values for bottled wine in an emerging market: product attributes or business strategy?

ABSTRACT

This article focuses on the emerging bottled Chilean red wine market and studies the main determinants of the consumer price of wine sold on the domestic market. A hedonic price function was estimated for a sample of 810 wines using a quantile regression (QR) model. The database contains three variable groups to explain price: objective variables (national, international and vine quality designations), subjective variables (wine score) and business strategies used by wine producers. Results show that some objective variables have a greater impact on price than the wine score (a subjective variable) and business strategies, which vary for each quartile of prices analysed. Finally, this information will allow companies to design and implement marketing strategies to inform the consumer about the importance of some variables in the price of their product.

KEYWORDS:

• Red wine
• Chile
• business strategy
• hedonic price
• quantile regression

JEL CLASSIFICATION:

• C21
• L11
• L66

Disclosure statement

No potential conflict of interest was reported by the authors.