BUSINESS & MARKETING V31N2 WINE & VITICULTURE JOURNAL MARCH/APRIL 2016 www.winetitles.com.au 67 Product innovation and authenticity: The case of wine By Bora Qesja, Roberta Crouch and Pascale Quester, The University of Adelaide Drawing on her presentation at the Australian Society of Viticulture & Oenology’s Adelaide seminar held in December, Bora describes a recent study in which the reactions to wines of varying alcohol levels by consumers were assessed. INTRODUCTION Product innovation is the process of modifying or updating an existing product to present something new to the market (Gruenwald 1997). Satisfying consumer expectations in markets where they are used to continuous product improvement is essential for survival in today’s competitive environment. Hence, successful product innovation is imperative for any business in order to stand the test of time (Kotler et al. 2010). Compared with just a decade ago, customers now desire products with exceptional value and improved benefits, as well as quality and reliability (Fawcett and Fawcett 2013). For a business to keep growing and remain competitive, it is important for managers to anticipate changes in technology, customer preferences and industry standards, and execute attractive product innovations on a timely basis. However, meeting consumer expectations is challenging – it is difficult and expensive for companies to introduce products regularly, and even harder to innovate already established ones successfully (Katz 2003). Launching innovated products comes with high risks and the success rate is usually less than 50% (Taylor and Bearden 2003). This can be explained by the inherent perceptions of uncertainty faced by consumers when purchasing any innovated product. Factors that influence product acceptance by consumers include a belief in superior product attributes due to the innovation, consumer characteristics (product class involvement, culture, and frequency of consumption) (d’Hauteville 1994, Hofstede 2011) and perceptions of authenticity, which according to Gilmore and Pine (2007) has overcome quality as the main purchasing criterion. Additionally, product category has also been found to play a role; for example, consumers tend to welcome product innovations in categories such as computers, software, cars, and other technologies. However, knowledge of consumers’ reactions to innovations in products steeped in tradition and, therefore, carrying symbolic value such as wine (Meillon et al. 2010), is extremely limited, leading to a substantial gap in our current knowledge with regard to consumer acceptance of product innovations in these categories. Even though the innovation of even a traditional product typically proposes new benefits, the potential perceived disadvantages of such an innovation, such as loss of perceived product authenticity, might influence its success in the marketplace. Therefore, there is a need to investigate how consumers are likely to react when traditional products are innovated. Additionally, the potential moderating effect of consumer characteristics (e.g. risk aversion, cultural linkages to the product in its traditional form, category involvement) on product acceptance needs to be concurrently investigated. REDUCED ALCOHOL WINE BUSINESS & MARKETING Research on consumers’ reactions to innovations in traditional products like wine, such as the introduction of low and no alcohol wines, is limited. An Australian study has partially illed the gap by comparing the reaction of consumers to wines of varying alcohol levels both before and after a blind tasting. Photo: Igor Mojzes, 123rf.com ▶