Modeling the Impact of Social Interactions on Wine Purchasing Behavior

Extended Abstract Over the last decade, the consumption of wine on the world market remains more or less stable, declining in Europe and slightly increasing in Asia. Consumers-neophytes present more than 50% of wine buyers; an average consumer becomes less and less predetermined in its purchase and thus more sensitive towards advertising and promotion campaigns. Occasional versus traditional wine drinking prevails, and wine companies search for new marketing solutions to attract newcomers and create customer's loyalty. The impact of wine experts, wine critics continue influencing the wine market, bloggers of wine lovers suggest personal judgments and give comments on wines they consume. The process of wine purchasing is quite complex, many variables are taken into consideration, and the experts ' opinions or friends' advice could be crucial for a final decision. Our work focuses on the impact of social interactions on the dynamics of wine purchasing behavior. We assume the phenomenon is identical to others problems of individual social choices. Therefore, it can be mapped onto a problem of opinion dynamics among agents who have to make a choice about which bottle of wine they are going to buy. Each bottle is in competition with a finite population of similar wine products. We assume that each bottle of wine competes only within its own wine range, and each consumer acts and makes decision on favoring one or another wine being located in this specific price range. So, our consumer belongs to a specific set of consumers which could be described for example either using the socio-demographic characteristics (age, gender, occupation, education level, marital status, or monthly income), or using wine consumer's segmentation. It is worth to mention a number of research studies regarding classification of consumers that have been conducted. The groundwork on wine market segmentation, which was published by McKinna (1986) distinguished connoisseurs, aspirational drinkers, beverage wine consumers, new wine drinkers. Spawton's classification (1991) was based on consumer expectations and risk-reduction strategies; he divided consumers by cask and bag-in-the box wine drinkers. Hall & Winchester (1999) added enjoyment-oriented segment instead of new wine drinkers. Several different approaches have been taken for wine market segmentation during the last twenty years. In their review of different segmentation approaches, Bruwer, Li, and Reid (2002) classified the consumer group with life style and concluded that wine markets have been segmented based on nine major segmentation variables: