Price-Quality Inference Problem In The Wine Industry Essay Example

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Consumer Behavior 6

Consumer behavior

Consumer behavior is the decision making process and physical activity that is involved when an individual is out to acquire, use or even dispose goods or services (Acebrón & Dopico 2000). This therefore entails that, it is not just an issue of buying a certain product but it also entails the process that starts way before the good has been bought. In actual facts, the process of buying an item starts in the minds of a customer, which in the long run results to the finding of alternatives between products that can be acquired with the inclusion of their advantages and disadvantages (Hoyer &MacInnis 2008).

One very fundamental presumption for consumer behavior research is that people often buy products not because of their main function but just because of the perceived value. This being the case, it is therefore a point to note that, consumer skills and knowledge play a very vital role in the change of behavior. Therefore to cause a tremendous change of consumer behavior calls for giving adequate information (Hoyer &MacInnis 2008). In many occasions, Consumers do not have sufficient knowledge about wine to make well informed decisions and this being the case; their decisions are made on aspects such as price which may not always be a fair indication of good quality wine.

There is a notion that consumer perception of price, quality and even value are very strong determinants of consumer behavior and product choice. Perceived quality in this case is the consumers judgment about a wine product overall excellence or superiority. In many instances, consumers perceive that, the higher the prices of a specific brand of wine the higher quality the product is (Acebrón & Dopico 2000). However this might be ambiguous because this may not mean that high prices depict high actual quality. In other words, consumers may fall prey of poor quality wine products at a high price.

There is a very close correlation of price quality relationship. However, it has all to do with risks. This being the case, wine product buyers balances the extra price they pay against the possibility of any disadvantage or any loss associated with lower quality of lower priced products (Hoyer &MacInnis 2008). This being the case, in order to reduce the risk of perceived risk of choosing a product of poorer quality the consumer chooses he high priced brand (Unser 2000). However, this may land the consumer into poor quality wine products for a higher cost and hence not get any value for their money.

Price in this case is a cue that consumers use as a perception of quality (Hoyer &MacInnis 2008). This is attributed to the fact that, the price of good quality products will be pushed up by their increased demand and thus the higher price will act as a signal of higher quality. However, this may not always be true. This entails that, the consumer must be educated or even be made aware of the product they are buying to avoid any confusion. However, it is noteworthy that, consumer’s information process insinuates that, they behave as problem solving cognitive individuals working towards have a specific decision, but for a certain reason (Slovic et al 2004). In this case, the hierarchy of effects assume that, the stimuli is processed first as it is the most basic level.

An economic point of view depict that, assessing the product quality is determined by signals and are all aimed at reducing the perceived risk of purchase (Acebrón & Dopico 2000). However, consumers lack the expertise of accessing the quality of the involved wine product due to lack of information to make choices, opting to go for brand names which mean that they commonly rely on labels for these products.


To ensure that consumers get value for their money, educating consumers in the appropriate use of the cues is of great importance. For instance, there is a need to have quality marks or brands which correlate with difference in wine quality which consumers experience, improve on the formation of quality expectation and in the long run be used in the quality perception process. There is a need to have comprehensive consumer awareness so as to equip them with the right information about the quality of the product, its characteristics and other marketing strategies of place price and promotion (Smith 2007). This for instance can be implemented by the use of mass media. Making consumers aware of the product creates more informed buying decisions. This therefore means that, creating consumer awareness is of great importance for consumers cannot buy products which they don’t know exist.

Having comprehensive consumer education on the other hand entails that, consumers have easy access to the knowledge and skills which are essential to be informed consumers. Having clearly writes literature can be one of the strategies employed to keep the consumers informed. The ingredients, dos and don’ts , warranty and guarantee , manufacture and expiring dates should be clear so as to give the consumer accurate information so that they can make accurate decisions. Most importantly, educating and creating consumer awareness will in the long run act as a protection n act for the consumers against buying costly wines with a perception that the quality is all the same high (Blocker et al 2011).

Through education, consumers will obtain information that will protect them and empower them while making them aware of their rights and responsibilities that will be pivotal in their welfare (Joshi & Sharma 2004). Consumers acting under perceptions might end up buying products which do not have the quality they are looking for, enhancing consumer awareness and education will equip them with all the skills they require in order to make the right choices and get the quality products they are paying for. It is also worth noting that both can be effects through websites which give accurate information about wine products, and monitor the same through checking the enquiries and sales volume achieved at a specific duration of time.


Acebrón, L. B. & Dopico, D. C. (2000). The importance of intrinsic and extrinsic cues to expected and experienced quality: An empirical application for beef. Food Quality and Preference, 11, 229-238.

Blocker, C.Flint, D.Myers, M.Slater, S. (2011) Proactive Customer Orientation and its Role
for Creating Customer Value in Global Markets, in: Journal of the Academy of MarketingScience, 39, 2, S. 216-233.

, 5th Edition. Mason, OH: South Western. Consumer BehaviorHoyer, W. D., &MacInnis, D. J. (2008).

, 24(2), 311-322.Risk AnalysisSlovic, P., Finucane, M.L., Peters, E., & MacGregor, D.G. (2004). Risk as analysis and risk as feelings: Some thoughts about affect reason, risk, and rationality.

Smith, J. B.Colgate, M. (2007) Customer Value Creation. A practical Framework,
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Joshi, A. W.Sharma, S. (2004) Customer Knowledge Development: Antecedents
and Impact on New Product Performance,
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Unser, M. (2000). Lower partial moments as measures of perceived risk: An experimental study. Journal of Economic Psychology, 21(3), 253-280.