Wine Pricing: The philosophy of Over-Delivering

The answer to the question in the previous post is $25 – $30. That response is based on the philosophy of Over-Delivering.

While it is possible to find value at every wine pricing level, it is far more difficult to deliver value when the wine is high priced, if only because the inherent reason for pricing a wine high is to raise expectations among the buyers.

Over-Delivering means giving the buyer more than they expected. It is a practice that builds loyalty and is based on honesty. Today’s wine consumer is far more savvy than they were a decade ago mainly because consumers are more savvy when it comes to marketing and promotion. There has always been skepticism built into the consumer mind, particularly since the 1970s when mass marketing hit its stride. That skepticism has accelerated over the past decade until now. Today, the buyer of wine and any other product expects to be gouged and is a careful buyer. But in addition to skepticism and careful shopping, today’s consumer is demanding authenticity.

When it comes to wine we are past the days when a high price alone can give the aura of high quality to a wine. Ironically, this is much easier to accomplish among high-end wine buyers ready and able to spend $50 on any old bottle of wine. But for the wine lover who is not in that category, the idea of authenticity is attached to a number of other factors: relative size of the winery, buzz among the consumers’ group of peers, and the appearance of simplicity built into the marketing. The idea of a wine’s attributes being one of simplicity and therefore authenticity can drive a brand far. And high pricing is rarely a factor that suggests simplicity.

Finally, it is far easier to raise the price of a line of wines and keep the brand vital than it is to lower the price. Many brands discovered this when their prices had to come down in the wake of the dot com debacle.

This client will be offering wine that will certainly be seen as a value. Their size and ability to hand sell the wine will buy authenticity and loyalty. They will make less profit in the early years of the brand but the brand will build a very stable base that allow them to build trust, introduce new wines to a willing and loyal base of consumers and to raise prices on subsequent releases.

It’s the benefit of Over-Delivering.

Posted In: Wine Business


One Response

  1. Corktease - June 3, 2005

    When you get more than you bargained for…

    We’ve all heard the adage, when you buy a bargain, you get what you pay for. But in wine marketing, there seems to be a sweetspot at which a winemaker prefers to over deliver rather than charge price the wine out of the market, hence you get more wine …

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