The research report presented here looks into the UK wine industry in general and the competition which has emerged since the entry of New World countries into the wine market in particular. The UK is one of the most lucrative markets for wine imports. The UK wine market has witnessed huge growth from wines originating in the US, South Africa, Australia and South America. The report covers the behavioural and attitudinal perception towards wine consumption, particularly in the age group 18–25 years. The report consists of the findings of primary research undertaken on the target age group. The report also contains findings from secondary research, particularly the Mintel report “Wine – UK” dated January 2005. Firstly we have focused on the qualitative research methodology which gives a broad descriptive analysis of behavioural and attitudinal aspects of the target group.
Secondly we undertook comparative analysis between the findings of the primary research and the statistical results of the Mintel report. The last part of the report contains critical analysis, a conclusion and a forecast on the basis of the research undertaken.
PRIMARY RESEARCH METHODOLOGY:
Primary research is that information which has been collected first hand. The primary data is collected by a programme of observation research, qualitative research and quantitative research, either in combination or separately.
Since we were studying the perceptions of the specific age group in a particular market and looking into their buying behaviour, the qualitative research approach was adopted.
Qualitative research aims to give insights into perception, motivation and attitudes to answer: What? Why? How? The essence of qualitative research is that it is diagnostic; it explores certain kinds of behaviour. It is subjective for its findings which cannot be supported by rigorous statistical tests. But, as the Market Research Society noted in 1979, qualitative research provides the constant conceptual link between consumers and decision makers in marketing and advertising developments.
The structured, standardised techniques of quantitative research result in highly useful sets of statistics on consumption but they fail to provide answers of more subtlety and sophistication. Qualitative research is unstructured, flexible, and oblique; it is a term rather freely used to describe several specific kinds of marketing research, such as explanatory research, in-depth interviewing, opinion research and so on.
In-depth interviews are used to determine an individual’s perceptions, opinions and behaviour. They relate to the respondent’s actual experiences and help in exploring topics in more depth. The technique is completely different from structured interviewing where closed ended questions are used. We conducted some quality in-depth interviews in the selected age group. All the interviews were carried out on a one-to-one basis and lasted on average for 25–35 minutes. As some of the respondents resisted the recording of their responses on tape recorder at the first stage, we decided to conduct the interview with the help of a sample open-ended questionnaire and noted down word for word the whole transcript of the interview. We then sat together to arrange the transcript and to analyse the response.
We decided to do in-depth interviews rather than going for group discussions with the sample group within the target age group because of time and resource constraints.
Group discussions normally require a group of respondents which has to be arranged according to the convenience of all the participants. It involves many aspects such as selecting a venue, scheduling the time and creation of the discussion guide, which was almost unfeasible for us with the time and the resources available. Considering all these factors we decided to do in-depth interviews.
In-depth interviews are one of the principal methods of qualitative research. Basically, they are non-directive, informal interviews – more conversational in nature than traditional interviews. We did in-depth interviews to gauge the consumers’ behaviour about wine.
The main advantages of in-depth interviews are:
The few disadvantages of this approach are:
Sampling and categorisation of respondents
We selected a sample size of 10–15 respondents for the in-depth interviews to be conducted by our team. The transcript of the interview was then analysed and compared with the findings from the Mintel report. The length of each interview was between 20 and 35 minutes, which was very appropriate and gave ample time to discuss freely their perceptions and respective buying behaviour.
All of the respondents selected for the sample group were between the ages of 18 and 25 and included both genders.
Designing the questions for in-depth interviews:
The factors which were taken into consideration while designing the questions for the interviews:
Limitations and Critical Analysis of the methodology used:
The methodology which we adopted to conduct this qualitative research was in-depth interviews. The four limitations which we came across while doing primary research can be summarised below:
The success of in-depth interviews is very much dependent on the skills and manners of the interviewers. We tried to probe the respondents to gauge their perception towards wine and make them feel comfortable so that the responses were more accurate and reliable.
The questions asked at interview were not very specific in relation to the different types of wines – we did frame questions about wine in general. The target group which was selected had a varied choice of alcoholic drinks. Some of the respondents at the first stage did not agree to their responses being taped, thus we decided to make notes of the in-depth interview and put them in a proper format later on.
COMPARATIVE ANALYSIS – Secondary Research
Secondary Data: In today’s marketing research environment, secondary research tasks are applied more often to specific marketing problems than are primary techniques due to the relative speed and cost-effectiveness of gathering secondary data (Marketing Research, 2000). The Mintel report of January 2005 proved very helpful in getting an overall understanding of the wine market in the UK. The Mintel report had investigated the current state of market in some depth, including market drivers, segmentation, supply structure and distribution. The Mintel report looks into the wine market of the UK from a very general point of view, including consumers from every segment and every age group. But for our report we only focused on the factors which affect wine consumption in the age group 18–25 years.
From the Mintel report the rise in wine consumption is quite evident. Globalisation and opening up of markets have played a major role in this unprecedented growth. To remain at the number one position as favourite alcoholic drink beer marketers have to change their marketing strategies by focusing primarily on advertising. The market is now flooded with wines from all over the world facing cut-throat competition between New and Old World wines in order to maximise their respective market share. The way wine is branded and marketed is also seeing great changes.
The Mintel report took into consideration only one type of wine – still wine not exceeding 15% ABV excluding other types of wines like Champagne, fortified wines, Lambrini, British wines etc.
The market size is calculated by considering both types of sales: on-market sales as well as off-market sales.
The demographics were split into four main categories:
|Category||Age group||% of population|
|Pre/no Family||< 45, not parents||28|
|Family||At least 1 child < 16||28|
|Third age||45-64, no children <16||25|
|Retired||> 65, no children <16||20|
The Mintel report aimed to typify consumer habits and to do so created Special Groups of consumers. The ACORN demographic classification (based on the type of residential area in which consumers live) was also used.
Findings of Mintel Report – January 2005 – Analysis with Primary Research.
|Age group||All users||Heavy users||Medium users||Light users||Non-users|
(Source: Mintel Report, 2005)
|Countries||m litres||%||m litres||%||m litres||%||% change|
Conclusion and Forecast:
The report presented here after analysing many perspectives of the wine market strongly supports the view that the wine market in the UK will continue to see growth in coming years. This growth in wine consumption comes at the cost of beer losing its share and preference to wine as more and more people now want to drink wine because of factors like price, changing demographics and entry of many new players into the industry especially from New World countries. The rise in wine consumption was forecast to be 31 % by value by 2009, taking 2004 as the base year. The preference shift from beer and other alcoholic drinks to wine in the age group 18–25 is also quite evident from the primary research. As personal disposable incomes (PDI) continue to increase the wine market will certainly benefit as more and more consumers can afford the luxury of wine in the future. Also to be taken into consideration is the decline in the average price of wine due to increased import of wines from New World countries. The way the wine marketing is shaping up with the help of branding methodology will help to bring wine to the masses where lack of product knowledge will not adversely affect its sale. The medicinal and health value attached to wines is also playing a prominent role in the rising popularity of wine consumption. New World countries are constantly trying to focus on low calorie wines, which are appealing to customers from every age group especially health conscious customers. From the secondary and primary research undertaken it can be concluded that there has been a huge shift in preference towards New World wines from traditional wines. According to data presented by Mintel, 30.6% of adults consumed Australian wines in 2004 from a previous figure of 13.9 % in 1999. Old World wines have seen a consistent reduction in consumption in last five years and the trend seems set to continue in future. The fall in the price of wine due to increased competition between retailers and wine producers has contributed significantly in increasing the popularity of wine among all alcoholic drinks. The majority of the respondents placed price as the most important criterion determining their purchasing behaviour, and with the increased competition and constantly falling average price due to the entry of New World wines into UK markets, the price is going to remain the most important factor in coming years in determining wine consumption. Also from the Mintel report, 32% of the population tends to buy wine with a certain price range in mind. The price promotional concept of advertising in which consumers are tempted to buy a large amount of wine from retailers has also contributed significantly as a majority of respondents agreed that they usually buy wines in supermarkets or off-licence stores for home drinking. This is one of the reasons for the falling budget of media advertising in the wine industry, according to Mintel. From the primary and secondary research conducted to complete this report it can be concluded that the wine market in the UK will continue to grow and will witness cut-throat competition between the New World wines and Old World wines, only to benefit the consumer who will enjoy a variety of options at a very affordable cost.
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