I’m not racist but… I just couldn’t give them Chilean wine as a gift

If you ask people where to find the best chocolate, chances are they’ll answer with “Switzerland” or “Belgium”. How many people will answer Venezuela? The country which produces the finest cacao in the world. Not many, and there’s a reason for this. It’s known as the provenance paradox.

The provenance paradox is a phenomenon, where according to Harvard Business School professor Rohit Deshpande, a product’s country of origin establishes its authenticity. Products from this country are considered better because of this expectation regardless of actual quality. And people set standards on what prices they are willing to pay for produce from particular countries, based on these biases.

Wine is another good example. Chilean winemakers Concha y Toro produce a wine called Don Melchor, objectively amongst the best wines in the world as scored by experts. If this wine came from Bordeaux, it would cost 300-400 dollars a bottle. But retailers can’t command a fraction of this price, because they just can’t convince customers to part with more than 50 dollars for a Chilean wine. Why? Because it’s Chilean wine. And no amount of expert ratings or reviews will convince people that it’s worth more.

This bias is annother illustration of what the behavioural economists have been rightly shouting about in marketing circles– people are not rational. We make instinctive, emotional decisions about which products or brands we will buy into, and then we cherrypick facts to support this viewpoint.

In our industry, advertising has historically been dominated by the idea that successful communications are based on single minded propositions ie. the credible benefit of choosing my brand.  The creative emotional elements are just there to grab attention for this benefit message. Supposedly, it’s the logical argument that does the heavy hitting – the rest is just fluff.

Except it isn’t. Turns out the fluff is the most important stuff actually.

Heath and Feldwick caused a bit of a stir with their seminal paper “Fifty years using the wrong model of advertising” a couple of years ago, when they posited that the Informational Processing (IP) model we were using, just didn’t stack up with evidence on how advertising actually works. The evidence suggests that the visuals, sounds, symbols, music and context, are not just aids to recall or engagement, they are the central persuasive elements of the advertising. They found that there was a linear relationship between emotional content and brand favourability, but no relationship between rational content and brand favourability.

In the case of Don Melchor, “this is one of the highest rated wines in the world” should be a pretty compelling marketing proposition. If customers acted rationally. But we don’t. So they need a create a better emotional story. Then maybe next Christmas, people won’t hestitate to gift a bottle of Chilean wine.

*Video via Paul Dervan

Advertisements
    • Eoghan Nolan
    • December 22nd, 2010

    Nice post Neasa, thanks. Personally, I’d find the right bottle of Chilean wine (vines unaffected by philoxera and all that) very acceptable- or a good Argentinian Malbec for that matter. If, on the other hand, I was given an English whisky I might react with horror. This heightened form of ‘Provenance Paradox’ is also fascinating- where some origin points for products are not just less desirable but, in some sense, conceptually unacceptable.

    • Neasa Cunniffe
    • December 22nd, 2010

    Thanks Eoghan! The Corona example he goes on to talk about is also fascinating – they quickly recognised that a populist Mexican beer would find it difficult to command a price premium in comparison to European beers who have the heritage advantage. So they side stepped the whole provenance issue by not referencing their Mexican origins at all, and creating a lifestyle image. They changed the focus of their story away from origin and into a definition of what they stand for. Wine is particularly origin focused as a category, but it would be interesting to see whether more wine brands could really rise above grape or country of origin and be defined by taking a strong viewpoint instead.

  1. January 14th, 2011
  2. February 21st, 2011
    Trackback from : Starting Higher « Room435

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: