Written by Katharina Veit

1. Introduction & purpose

Social media continues to grow rapidly, offering consumers and companies a new way to communicate and engage with each other (Hoffman & Novak, 2012). While the utilization of social media in the wine business still is in its infancy, consumers spend more time on social networks than on any other category site (Nielsen Social Media Report, 2011). For instance, US-Internet users now devote more time to Facebook than on any other website, making Facebook to a powerful marketing instrument (Nielsen Social Media Report, 2012).

The wine business is particularly suited to the new social and digital environment as wine as a product inherently involves socialization, requires knowledge and is often based on recommendations. Moreover, the wine industry is very fragmented with a few big global players and many small family-run wine businesses - more than 50% of US wineries and in Europe even a bigger percentage have less than 10 employees (Family WineMakers, 2013). As a result, social media platforms provide tremendous opportunities for wine companies to publish their own content without third party media, communicate directly with their consumers all over the world and target vast numbers of underserved audiences with authentic wine stories as well as let the consumers spread these stories (Hennig-Thurau, Gwinner, Walsh & Gremler, 2004; Kaplan & Haenlein, 2010; Scott, 2011).

To this point of time, there is a limited cadre of academic literature combining social media and the wine industry – especially in the field of brand building through social media. Therefore, the main goal of this paper is to understand if social media can help to build a successful wine brand by reviewing general research on the social media phenomenon, introducing a new concept of value creation in the wine industry as well as examining the case of the Pacific Rim Winery on Facebook. The paper strives to contribute to the field of social media marketing for wine companies and is designed for wine marketing/PR executives, wine business researchers and the wine sector in general.

2. Review of the literature and theoretical framework

In order to gain a better overview of the paper, it starts with the definition of the major concepts.

2.1 Social media phenomenon

During the past decade the web has transformed from a platform for scientists to an information and entertainment space with more than one billion users (Anderson, 2007; Hanna, Rohm & Crittenden, 2011; Seraj, 2012; Varadarajan & Yadav, 2009). Social media has grown to a ubiquitous scale and plays an essential role in peoples’ daily lives (Hoffman & Novak, 2012). Time spending on social media sites went up by 21% from 2011 to 2012 (Nielsen Social Media Report, 2012).

Kaplan and Haenlein (2010) describe social media as “a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content” (p. 61). The term ‘social media’ refers to a wide range of interactional vehicles including blogs, vlogs, websites and other applications that allow customers to share, co-create, discuss and modify user-generated content (Kietzmann, Hermkens, McCarthy & Silvestreet, 2011; Scott, 2011).

2.2 Social media in the wine industry

Previous research has shown that US-wineries have not adopted social media to great extent in their marketing strategy (Thach, 2008) and if they have, the value creation through social media is not optimized (Wilson & Quinton, 2012).

Nevertheless, through greater information access and immediate publishing power social media has provided the consumers with more power over wine businesses by enabling them to generate their own content (Cova & Pace, 2006; Nielsen Social Media Report, 2012; Wind, 2008). Discussions, reviews and personal recommendations about wine have noticeably redefined the industry (Mills, Pitt & Sattari, 2011). Social Media enables quick and easy communication between wine consumers directly impacting the consumer decision-making process and thus buying behaviour (Nielsen Social Media Report, 2012; O’Brien, 2011). Moreover, consumers find personal recommendations the most trusted form of advertising (Beard, 2012; Winer, 2009). In fact, the top 20 wine bloggers in aggregate have a larger audience than the successful wine magazine ‘Wine Spectator’ online (Quint, 2010). Besides, social media also offers opportunities for wine companies for direct communication and dialogue with their consumers as well as for creating close relationships without using middlemen such as mass media or retailers (Qualman, 2010; Scott, 2011; Sigala, 2010). Due to limited financial resources in the wine industry social media provides a tremendous opportunity for all wine businesses – especially for talented small wine producers - to reach new consumers and engage in conversation.

For the purpose of this paper, the most popular social media platform Facebook with currently 846 million users was investigated in order to illustrate the value creation for wine businesses (Hoffman & Novak, 2012).

2.3 Concept of ‘value creation in the wine industry’

In the following Doyle’s (1990) ‘framework of a successful brand’ is adapted to the wine industry (see figure 1).

The features of the ‘tangible product’, ‘basic brand’ and ‘augmented brand’ are generally present in the wine market. In fact, if not possessing these features a winery cannot survive in the largely saturated beverage market. With this in mind it leaves the ‘potential brand’ features that distinguish a middle class winery from a successful wine brand and consist of anything that conceivably could be done to build brand awareness, brand engagement and word of mouth (WOM) and thus creates long-term value (Doyle, 1990). Historically the ‘potential brand’ features could primarily be added through recommendations from wine critics or journalists, wine awards or mass-media advertising. That is because wine is an incredibly information-rich subject and consumers typically do not feel confident in selecting wine due to lack of knowledge and the huge amount of choices. Additionally, consumers have difficulties to trust their own taste and thus the role of the wine critic or the wine award acts as a risk reducer and influencer when purchasing wine (Wilson & Quinton, 2012). Accordingly, wine reviews and wine awards are essential factors in a wine company’s communication strategy and for unknown and small wineries difficult to achieve and very cost-intensive. This surely also applies to the utilization of mass media (Feng & Papatla, 2012).

The aim of this paper is to investigate if social media helps to build a successful wine brand by increasing the ‘potential brand’ features reflected in the new metrics of social media: brand awareness, brand engagement and WOM (Hoffmann & Fodor, 2010). In short, it examines whether in today’s digital and social environment Facebook is able to take over the role of a risk reducer and influencer (see figure 2).

Figure 2: Building a successful wine brand - the ‘new’ concept of value creation in the wine business

3. Case discussion: Pacific Rim Winery

In the following section a case study of the small-seized (350 acres) Pacific Rim Winery will be presented and discussed concerning its potential to create value by using the new metrics for social media (Hoffmann & Fodor, 2010).

Pacific Rim Winery, situated in Oregon, started a successful social media campaign in 2010, investing nearly $10.000 based on the premise to promote the underdog grape variety Riesling (Emerson, 2012). The aim was to turn passive wine drinkers into Riesling enthusiasts. Pacific Rim introduced its Facebook page with appealing videos as well as a free ‘Riesling Rules Book’ for those who liked the page (Appendix 1). Consequently, the winery generated over 11,000 Facebook likes in the initial two weeks after the free booklet offer and received more than 300 comments from consumers (Emerson, 2012).

After that phenomenal start Pacific Rim continued to interact with its Facebook fans through the free ‘Weed Killer Sticker’ identifying a consumer as a ‘Riesling Fan’ as well as through contests such as ‘Riesling for Being’ where consumers had to state why they loved Riesling (Appendix 2 & 3). This contest generated nearly 15.000 likes on Facebook (Emerson, 2012). Additionally, pictures and videos about the wine making process were posted as well as recipes, wine-food-pairing tips and wine recommendations for specific holidays (Appendix 4).

Today, Pacific Rims counts more than 30.000 fans and increased its revenue by 15% since the Facebook page launch (Emerson, 2012; Appendix 5). Additionally, Pacific Rim’s wines can be purchased in all 50 states at all major retailers.

3.1 Case analysis

As the case of the Pacific Rim Winery vividly illustrates social media enables to build a successful wine brand that can be measured in terms of brand awareness, brand engagement and WOM (see figure 3).

Figure 3: Effectiveness of social media in the wine industry – the case of the Pacific Rim Winery

3.1.1 Brand Awareness

The wine company increased its brand awareness which is indicated through over 30.000 fans until today. Every time fans get in contact with a Facebook post of the winery, it thus increases exposure to the brand. The increased awareness among consumers represents also a compelling sales tool for retailers as well as it strengthens brand recognition and ensures reliability among consumers when standing in front of the wine shelves.

3.1.2 Brand Engagement

Furthermore, there is evidence of an engaged audience interacting with the brand reflected in the numerous amounts of comments, Facebook likes and active users (Appendix 6). The winery creates compelling, informative and authentic content such as contests, videos, pictures, recipes and wine-food-pairing tips that Facebook fans can engage with instead of shouting out sales messages in a so-called push-strategy (Barwise & Meehan, 2010; Muniz & Schau, 2011). According to Deighton & Kornfeld (2009) the winery established interactive and cultural exchange with its consumers who would normally only get in contact with the wines via the retailers. Through the customer engagement and exchange, the Facebook fans became co-producers of the brand (Arviddson, 2005; Holt, 2002; Vargo & Lusch, 2004).

3.1.3 WOM

Once consumers are aware and engaged, they are in the position to communicate their opinions to other wine consumers enhanced through the free ‘Riesling Rules Book’ and ‘Weed Killer Sticker’. The satisfied wine consumers spread positive messages about the wines and a positive attitude toward the winery itself (Grönroos, 2008; Appendix 7). As consumers rely on other individuals more than on advertising, WOM is a powerful tool to reach consumers in business areas, shaping consumers’ attitudes and buying behaviour (Feng & Papatla, 2012; Yang, 2012). Additionally, the free give-aways offer the consumers a sense of being part of the ‘Riesling’ community through educating and entertaining the social wine drinkers. (Cova & Pace, 2006; Kozinet, 1999; Seraj, 2012). Moreover, the postmodern desire for authenticity and community better categorized under Tönnies (1964) ‘Gemeinschaft’ theory is implemented and thus creates significant value (Holt, 2002; Kotler, Kartajaya & Setiawan, 2010; Muniz & Schau, 2011).

Finally, brand awareness, brand engagement and WOM shape trust, reliability, reputation and status among consumers that are evidently portrayed in the revenue figures.

4. Conclusion & suggestions

The results of the case study indicate that social media helps to build a successful brand if wine companies provide interesting, relevant and authentic content which consumers enjoy to share with their peers. Furthermore, social media represents a cost-efficient possibility for small wineries to form trust, reputation and reliability in comparison to other promotion activities such as wine reviews, wine awards or mass media advertising. Consequently, online presence including an appropriate social media appearance might be crucial especially in the current tough economic climate.

Nevertheless, social media is not the only way to create value for a company, meaning social media cannot be regarded as the perfect substitute for traditional media (Armelli & Villanueva, 2011; Weinberg & Pehlivan, 2011). Particularly for small wineries it is challenging to find the time and personal to keep social media platforms up to date (Winer, 2009). There is a need for a dedicated person that knows how to act appropriately in the social environment, focuses on customers’ needs rather than selling, interact in an authentic and truthful manner and has a tactic how to handle negative feedback and complaints (Barwise & Meehan, 2010; Kaplan & Haenlein, 2010; Petouhoff, 2010; Qualman, 2010). Additionally, owing to the specific features of wine ‘physical appearances’ where people can actually taste wines are essential. This can be done for instance through organizing wine events or regional wine fairs. Moreover, small-sized wine companies often have numerous regional consumers and therefore it is important to include traditional marketing channels that are less expensive such as cultural events or the regional press (Joachimsthaler & Aaker, 1997). Successful wine brands should therefore deliver an appropriate mix of traditional and social media marketing in other words combine push- and pull strategy in their communication strategy (see figure 4). At best, social media activities are aligned and complemented with traditional wine marketing efforts (Armelli & Villanueva, 2011; Kaplan & Haenlein, 2010).

Figure 4: Communication strategy for a successful wine brand

To conclude, while social media also holds numerous challenges, the Pacific Rim case clearly shows how a carefully planned social media strategy offers a great opportunity for relatively cost-efficient investments to build a successful wine brand instead of only relying on wine reviews and awards. In this new digital and social environment clever wine companies need to find a way to utilize social media in the correct manner, focus on customer needs and engage in conversation as well as handing over a certain control of the brand and letting customers promote wines in their community much more efficiently than ever before (Cova & Pace, 2006).

5. Limitations of the study

The research focused on a single example; therefore the picture might be different if more examples are examined. Due to limited word count it was also not possible to investigate the negative aspects of social media (Fournier & Avery, 2011). Additionally, the research focused on an US-winery where social media is more evident in the wine industry than for instance in Europe (Bouquet, 2012). The observation of another social media platform or product could also lead to other results as wine is the perfect product to be talked about and inherently involves socialization.

References

Armelli, G. & Villanueva, J. (2011). Adding social media to the marketing mix, IESE insight, No. 9.

Anderson, P. (2007). What is Web 2.0? Ideas, technologies and implications for education, JISC Technology and Standards Watch, pp. 2-64.

Arvidsson, A. (2005). Brands: A critical perspective, Journal of Consumer Culture, vol. 5, pp. 235-258.

Beard, R. (2012). Trust in Advertising – Paid, Owned and Earned. Available Online: http://blog.nielsen.com/nielsenwire/nielsen-news/trust-in-advertising-%E2%80%93-paid-owned-and-earned/ [Accessed 09 Feb 2013]

Bouquet, P. (2012). Social Media Marketing in the American and French Wine industry in 2011. Available Online: http://de.slideshare.net/pierrickbouquet/social-media-marketing-in-the-american-and-french-wine-industry-in-2011-13045571 [Accessed 10 Feb 2013]

Constantinides, E. Fountain, S. J. (2008). Web 2.0: Conceptual Foundations and Marketing Issues, Journal of Direct, Data and Digital Marketing Practice, vol. 9, p. 232-23.

Cova, B. & Pace, S. (2006). Brand community of convenience products: new forms of customer empowerment - the case "my Nutella The Community, European Journal of Marketing, vol. 40, iss. 9, pp. 1087–1105.

Deighton, J. and Kornfeld, L. (2009). Interactivity's Unanticipated Consequences for Marketers and Marketing, Journal of Interactive Marketing, vol. 23, pp. 4-10.

Doyle, P. (1990). Building Successful Brands: The Strategic Options, Journal of Consumer Marketing, vol. 7, iss. 2, pp. 5–20.

Emerson, M. (2012). Using Social Media to Promote an Underdog Wine. Available Online: http://boss.blogs.nytimes.com/2012/07/06/using-social-media-to-promote-an-underdog-wine [Accessed 12 Feb 2013]

Family Winemakers (2013). Association strength. Available Online: http://www.familywinemakers.org/whoweare/sizeOfOrg.cfm [Accessed 10 Feb 2013].

Feng, J. & Papatla, P. (2012). Is Online Word of Mouth Higher for New Models or Redesigns? An Investigation of the Automobile Industry, Journal of Interactive Marketing, vol. 26, pp. 92–101.

Fournier, S. & Avery, J. (2011). Uninvited brand, Business Horizons, vol. 54, pp. 193—207.

Grönroos, C. (2008). Service Management and Marketing- Customer Management in Service Competition, 4th edition, John Wiley & Sons Ltd.

Hanna, R., Rohm, A. & Crittenden, V. (2011). We’re all connected: the power of the social media ecosystem, Business Horizons, vol. 54, pp. 265-273.

Hennig-Thurau, T., Gwinner, K. P., Walsh, G. & Gremler, D. D. (2004). Electronic Word-of-

Mouth via Consumer-Opinion Platforms: What Motivates Consumers to Articulate Themselves On the Internet?, Journal of Interactive Marketing, vol. 18, no.1, p. 38-52.

Hoffman, D. L. & Fodor, M. (2010). Can you measure the ROI of you social media marketing?, MIT Sloan Management Review, vol. 52, iss. 1.

Hoffman, D. L. & Novak, T. P. (2012).Toward a Deeper Understanding of Social Media, Journal of Interactive Marketing, vol. 26, pp. 69–70.

Holt, D. (2002). Why do brands cause trouble?, Journal of Consumer Research, vol. 29, pp. 70-90.

Joachimsthaler, E. & Aaker, D. (1997). Building Brands Without Mass Media, Harvard Business Review, vol. 75, iss. 1, pp. 39-50.

Kaplan, A.M. and Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of social media, Business Horizons, Vol. 53, no. 1, pp. 59-68.

Kietzmann, J. H., Hermkens, K., McCarthy, I. P. & Silvestreet, B. S. (2011). Social media? Get serious! Understanding the functional building blocks of social media, Business Horizons, vol. 54, pp. 241—251.

Kotler, P., Kartajaya, H. & Setiawan, I. (2010). Marketing 3.0: From Products to Consumers to the Human Spirit, ed. 1, John Wiley & Sons.

Kozinets, R.V. (1999). E-tribalised marketing? The strategic implications of virtual communities of consumption, European Management Journal, vol. 17, no. 3, pp. 252-64.

Mills, A. J., Pitt, L. & Sattari, S. (2011). Reading between the vines: analyzing the readability of consumer brand wine web sites, Journal of Wine Business Research, vol. 24, no. 3, pp. 169-182.

Nielsen Holding N.V. (2011). Social Media Report 2011. Available Online: http://blog.nielsen.com/nielsenwire/social/2011/ [Accessed 13 Feb 2013].

Nielsen Holding N.V. (2012). Social Media Report 2012. Available Online: http://blog.nielsen.com/nielsenwire/social/2012/ [Accessed 13 Feb 2013].

O’Brien, C. (2011). The Emergence of Social Media empowered Consumer, Irish Marketing Review, vol. 21, no 1 & 2, pp. 32-40.

Petouhoff, N. (2010). The Social Customer Economy. Available Online: http://www.destinationcrm.com/Articles/Columns-Departments/The-Tipping-Point/The-Social-Customer-Economy-61332.aspx [Accessed 14 Feb 2013].

Qualman, E. (2010). Socialnomics: How Social Media Transforms the Way We Live and Do Business, ed. 1, John Wiley & Sons.

Quint, B. R. (2010). Wine Education Network - Market Enablers - Information Overload. Available Online: http://www.linkedin.com/groups/Market-Enablers-Information-Overload-3984584.S.94617231 [Accessed 10 Feb 2013].

Scott, D. M. (2011). New Rules of Marketing and PR: How to Use Social Media, Blogs, News Releases, Online Video, and Viral Marketing to Reach Buyers, ed. 3, John Wiley & Sons.

Shepp, J. (2013). Social Media Marketing for the Wine industry. [online image]. Available at: http://de.slideshare.net/earthsite/social-media-for-the-wine-industry-by-joey-shepp [Accessed 14 Feb 2010]

Thach, L. (2009). Wine 2.0 – the next phase of wine marketing? Exploring US winery adoption of wine 2.0 components, Journal of Wine Business Research, vol. 20, no. 2, pp. 143-57.

Tönnies, F. (1964 [1887]). Community and Strategy, translated and edited by Charles P. Looming. East Lansing: Michigan State University Press.

Varadarajan, R. & Yadav, M. S. (2009). Marketing Strategy in an Internet-Enabled Environment: A Retrospective on the First Ten Years of JIM and a Prospective on the Next Ten Years, Journal of Interactive Marketing, vol. 23, pp. 11–22.

Vargo, S. L. & Lusch, R .F. (2004). Evolving to a dominant logic for marketing, Journal of Marketing, vol. 68, pp. 1-17.

Weinberg, B.D. and Pehlivan, E. (2011). Social spending: managing the social media mix, Business Horizons, vol. 54, pp. 275-282.

Wind, Y. J. (2008). A plan to invent the marketing we need today, MIT Sloan Management Review, vol. 49; no. 4.

Winer, R. S. (2009). New communications approaches in marketing: issues and research directions, Journal of Interactive Marketing, vol. 23, pp. 108-117.

Wilson, D. & Quinton, S. (2012). Let’s talk about wine: does Twitter have value? International Journal of Wine Business Research, vol. 24, no. 4, pp.271-286.

Yang, S., Hu, M., Winer, R. S., Assael, H. & Chen, X. (2012). An Empirical Study of Word-of-Mouth Generation and Consumption, Marketing Science, pp. 1-12.

Appendix

Appendix 1: Riesling Rules Book

Source: Pacific Rim Riesling Rules Facebook Page. https://www.facebook.com/pacificrimwine?fref=ts [accessed 12 Feb 2013]

Appendix 2: Weed Killer Sticker

Appendix 3: ‘Riesling for Being’ Contest

Source: Pacific Rim Riesling Rules Facebook Page. https://www.facebook.com/pacificrimwine?fref=ts [accessed 15 Feb 2013]

Appendix 4: Wine-Food-Pairing Tip