OREGON STATE UNIVERSITY

Consumers set price expectations based on design of wine bottles

09/14/2009

CORVALLIS, Ore. – Attention wine producers: If you’re putting a premium pinot noir wine in a bottle with a plain white label, you may be making a big mistake.

A new study published in a forthcoming issue of the Journal of Marketing Theory and Practice shows that consumers who highly value design set price expectations based on the package design of the wine bottle. In contrast, a self-described “wine snob” looks at other factors, including the vintage, the type of wine and the reputation of the winery.

Keven Malkewitz, an assistant professor of marketing at Oregon State University, and Ulrich Orth, professor at Christian-Albrechts-Universität Kiel in Germany, co-authored the paper, which is one of the few that looks at the way consumer’s set price expectations based on package design. Firms spend billions of dollars each year to appeal to buyers with package designs, yet not much is known about how design affects what price a consumer expects to pay.

“The problem is when you have a bottle of wine that looks much cheaper than it really is,” Malkewitz said. “If you are a company producing a high-quality wine and you are positioning the wine at a premium price, why is your design telling the consumer that this is cheap?”

According to Malkewitz, consumers form an expectation of a price based on visual cues inherent in the package. Wines that want to signal high-quality often bear ornate images of chateaus and flourish-rich typography, for example. Other wines “signal” that they are affordable, but use bold colors and fonts to appeal to design-savvy consumers.

“Yellowtail is a perfect example of a company that used design to draw in people who want an affordable wine and might pick a wine simply based on how the bottle looks,” Malkewitz said. “The bright, bold colors and use of animals on the front has been mimicked by many other companies with similar “critter-labels.”

Attractive design elements help wine bottles stand out, and prior research has shown a majority of consumers often buy based simply on the look of the bottle and the price. Therefore, a wine package that speaks to its target audience and also is priced appropriately will sell, according to the researchers.