Market Segmentation and Dynamic Analysis of Sparkling Wine Purchases in Italy. (August 2021)

• Record Type: Journal Article
• Authors: Bassi, Francesca; Pennoni, Fulvia; Rossetto, Luca
• Is Part Of: Journal of wine economics. Volume 16:Number 3(2021)
• Page Start: 283
• Page End: 304
• Publication Date: 2021-08
• Subjects: dynamic market segmentation -- hidden Markov model -- loyalty -- repeated purchases -- variety-seeking behavior; Wine and wine making -- Economic aspects -- Periodicals; Wine and wine making -- Periodicals; Wineries -- Economic aspects -- Periodicals; 338.476632
• DOI: 10.1017/jwe.2021.20
• Languages: English
• ISSNs: 1931-4361

Abstract

Abstract: The Italian market of sparkling wines increases as volume and assortment (such as brands, appellations, typologies) mainly because of sparkling Prosecco consumption. We investigate the repeated purchase behavior of sparkling wines in two years within the supermarket channel through scanner data collected from a consumer panel. We propose a Hidden Markov Model to analyze these data, assuming an unobservable process to capture consumers' preferences and allowing us to consider purchases sparsity over time. We consider multivariate responses defining types of purchases, namely price, appellation, and sugar content. Customers' covariates influence the initial and transition probabilities of the latent process. We identify five market segments, and we track their evolution over time. One segment includes Prosecco-oriented consumers, and we show that loyalty to Prosecco changes strongly over time according to the region of residence, income, and family type. The findings improve the understanding of the market and may provide evidence to design successful marketing strategies. (JEL Classifications: C33, C51, D12, L66)