Raise a glass to the hardworking people

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Unsurprisingly to anyone who knows of the early Louis Cheskin work, a recent Stanford study established that the more wine costs, the more people enjoy it, regardless of how it tastes.

Expectations of quality trigger activity in the medial orbitofrontal cortex, the part of the brain that registers pleasure. This happens even though the part of our brain that interprets taste is not affected. While many studies have looked at how marketing affects behavior, this is the first to show that it has a direct effect on the brain.

“We have known for a long time that people’s perceptions are affected by marketing, but now we know that the brain itself is modulated by price,” said Baba Shiv, an associate professor at the Stanford Graduate School of Business.

When we worked with a wine brand recently, we sought to understand the complete wine “usage” process, from planning, through shopping, to storage, to opening, to serving and drinking. We looked specifically at people who were interested in lower-priced wines and most of them were limited in their knowledge and/or experience.

In other categories when the customer is new and is presented with enormous product choice (the amount of wine choice dwarfs most other categories I can think of) we might feel sympathetic for the learning/selection/usage learning curve they would face; with wine people spoke very enthusiastically about the journey. Each trial experience involved drinking wine…something they liked to do! A social, tasty, and rewarding experience. Even a wine they “didn’t care for” (the typical critique) wasn’t a failure, because it still carried all the symbolic meaning.

The marketers were hampered by a limiting view of their customers; the market had been sliced into ridiculously narrow price points and this inevtiably drove discussions of people characterized exclusively within those $3 slots (as in, “I’m a $7.99 to $10.99 drinker”). While our client no doubt had cash register data to support their segmentation, it was completely at odds with how people saw themselves. They purchased across a much broader price range, and their primary concern was their own knowledge and accumulated experience. We were given a great opportunity to offer this different view and illustrate some of the unmet opportunities this presented.

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