Label Analytics presents Wine Pricing Sleuth – a breakthrough in optimal pricing




The price of a bottle of wine plays two vital but competing roles: price is both the amount a consumer must pay to make the purchase AND the most important indicator of product quality. If your label says good quality and your price is too low, the price will reduce consumers’ perception of quality and reduce sales. If the price is too high for what your label looks like, many may think the brand is overpriced. Understanding the perfect spot where your label look and price combine to drive buying can increase profits and avoid costly pricing mistakes.

For example, knowing that your label is priced higher than what you charge allows you to increase the price to match buyers’ perception of quality, thereby increasing sales. To provide such information, Label Analytics has developed a new research tool, Label Analytics Wine Pricing Sleuth.

“We have worked with a select group of the top 50 wineries over the past seven years,” says John Lawlor, CEO and co-founder of Label Analytics, “helping them assess new labels against existing brands against to competing brands. Our experience made us realize that we could expand our research to help them make pricing decisions that increase sales and profitability. “

Price Sensitivity Among Baby Boomers

The example shown in the first graph shows that the ideal retail price for this brand at $ 9.99 is actually $ 2.00 higher among baby boomers. At $ 11.99, it drew higher overall buying interest – 16 points above the interest level before seeing retail price. The Top Picks buying interest of 6% of surveyed buyers is higher than the 5% observed for the current retail price. How can the brand manager use this information? They could organize an in-store price test to confirm these results on the way to the price increase. Or, they could use the results to give their sales team a compelling case to push for extended distribution.

Here’s what their sales team will want to know about how this test was conducted.

  • Each price is independently tested with a unique set of interviewed buyers who have been matched across all four cells by randomly selecting buyers from each cell.
  • Each priced plan is tested alongside a wide range of competing brands.
    1. Buyers surveyed are unaware that this is a price test.
    2. They have no way of knowing which brands are being investigated.
    3. The study never asks them for their opinion. Instead, it measures their reaction to each packet.

The second half of the Label Analytics Wine Pricing Sleuth study discusses promotional pricing decisions where many brands spend most of their marketing dollars.

Price sensitivity among respondents

In the second example, each price discount performed better than the normal retail price without a promotion. A $ 2.00 rebate outperformed other options tested and did significantly better than a $ 3.00 rebate. The fourth option ($ 11.99 with a discount of $ 2.00 to $ 9.99) confirms the previous observation that this brand could support a retail price increase of $ 2.00.

The company uses an online virtual shelf that simulates how consumers choose wine. Randomly selected respondents choose from nine sets of nine competing products (81 in total) based on which ones seem the most expensive, which grab their attention first, and which they would buy. A three-level ranking algorithm converts their clicks into a solid recommendation for the optimal choice of label. Because respondents don’t know which brand is being studied and this is a price test, the metrics simulate how consumers make decisions on the shelf. When a shopper walks into a store – in real life or online – their first perceptions of the wine labels displayed on the shelves are often the main motivating factor behind their purchasing decision.

Coming out of the tumultuous year of the pandemic, wineries know that the status quo is not enough in the face of dramatic market changes. Consumers are buying more wine online. Retailers are reducing the number of brands they offer and increasing the number of their stores. In response, some wineries are raising prices while others are lowering them, and discount prices are on the rise.

Understanding how buyers will react to these changes is critical as wineries re-evaluate the way they do business in the future. Because brand managers make intuitive decisions about the price of wines, just as consumers do to purchase wines, Label Analytics Wine Pricing Sleuth was developed for that group of marketers who recognize that pricing decisions related to wine. labels can make them money.

To turn your wine label into a business advantage with information from Label Analytics Wine Pricing Sleuth, contact [email protected] or visit


Wine Pricing Sleuth is a service mark of Label Analytics LLC

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