When you’re Selling, Perception is Reality
In the wine business, it is hard to reliably differentiate between a good quality wine vs. a low-quality replacement. We can see from controlled experiments as well, even wine connoisseurs have trouble doing so without any context.
It is this context which shapes perception, which in turn feeds into the reality of quality that the consumer builds around the product. Experts would generally rely on their technical knowledge to assess the wine, while the regular consumer bases judgment on her/ his own limited past experiences and external characteristics, like origin, bottling, tastes as per experience, etc. The national image of a particular producer also plays a role in marketing., like in the case of Chile.
Concha y Toro is trying to figure out the art of appealing to different consumers at different price points with different products. The company should continue with a value-centric strategy (sacrifice volumes to sustain margins), working with the assumption that its brand equity will help to sustain price rises and fall in volumes in major markets would be made up by increase in volumes in Asia. The supermarkets, their biggest customers, want to see that you are investing in your brand. And Concha does the same - it entered into a three-year deal to be the official sponsor of Manchester United, a football club not only popular in the U.K, but also Asia – where it wants its Casillero del Diablo brand to gain more traction.
Companies can emphasize attributes that are most important to consumer and successfully link value to high quality and price. This is true across many sectors. For example, retail companies such as Gap, have long emphasized value and quality over price in their marketing strategies.
