Every few weeks, and latterly months, I’ve regaled you with a story about the old days at Liberty Life ….. and have interwoven my musings with a skein from the world of wine.
A question that plagues me is whether anyone out there is actually interested in reading my ramblings? Should I continue? During the Victorian era a publishing trend called serialized fiction rose to popularity. The greatest novelists of the time, including Charles Dickens, George Eliot, William Thackeray and Joseph Conrad, chose to publish their newest works of fiction in installments. When Dickens published chapters of ‘Oliver Twist’ he knew that the reading public wanted more. There’s so much to read … am I merely adding to the clutter?
I’ve looked back over what I’ve said so far and much seems to have been my self indulgently recalling some of my Mandela stories. As Madiba grows increasingly aged and infirm recording them, even this strange medium, is probably a worthwhile effort. Unlike Eliot’s, Dicken’s or Conrad’s words, mine shan’t be immortal, but they will live on digitally in cyberspace.
So, allow me to relate an amusing anecdote that tells so much about the political landscape in the South Africa of the ‘90s. It also says much about our leadership in those days when there were lions. Mandela, Sisulu, Slovo, Asmal, de Klerk, Suzman …The lions roar no more … a different sub-species of felines skulk and snarl in the dark dank alleyways of power.
One Saturday afternoon 1994, shortly before the first multi-racial election, found me sitting in my study in Johannesburg. The phone rang but I didn’t answer it. I rarely answer the phone as no one phones me … the phone’s always for Wendy, especially on a weekend.
Eventually the phone is answered in the kitchen … a moment or two later it ‘buzzes’ on my desk … the call was for me after all. I lift the receiver … “Ahh Hylton….” Madiba’s unmistakable stentorious tone resonates. We chat, conclude and hang up.
A brief digression: a week or so earlier I had had an interesting discussion at the office. Jamie Inglis, one of our directors at Liberty and a warm and charming chap, was relating the brilliant work his wife had been doing for the then DP (Democratic Party), and how the DP was going to do surprisingly well in garnering a substantial share of the ‘black vote.’ Upon what empirical research had Jamie based his findings? Well, Jane, his energetic wife, had hosted a tea party and discussion group for the maids in her area – deep in the lush green heartland of Atholl. The maids had turned out in force and the event was adjudged a great success. In fact, Jamie assured me “your Caroline was there.” ‘My’ Caroline happened to be the twin sister of ‘Jamies’’ Rebecca.
Back to the Saturday afternoon. A while after replacing the handset after talking to Madiba, I went down to the kitchen. Caroline, who had answered the call, Patricia and Sam were busying themselves doing nothing, but hovering to find out what Madiba had wanted.
“Caroline” I asked terribly seriously, “do you know who was on the phone?” “Yes” she beamed back. “Do you know what Madiba wanted?” I asked, almost sepulchrally. “No?” A vague flicker of uncertaintly rippled across Caroline’s gentle brow. “Madiba,” I continued, “wanted to know about Caroline Masala?” Surprise … “What! Me?” I continued, “Madiba’s upset Caro.” Alarm now. “Madiba wanted to know why Caroline Masala, who he greets in my home, is supporting Tony Leon and voting for the DA?”
Horror and panic … “No, no” Caroline gushed …. “Rebecca’s madam had a tea party for all Rebecca’s friends. We went. We drank the tea and ate the cakes and in our language we said ‘we’ll eat the cakes and drink the tea and we’ll vote for Madiba’.”
I suspect that Nelson Mandela would not approved of my jokingly undermining the democratic process. Our current president, however, has been known to tell unsophisticated rural voters that their ancestors will be angry and vengeful should they not vote for the ANC, and his cadres have been known to warn voters that they know who votes for whom.
I guess my silly teasing didn’t do much to reinforce an understanding of the secrecy of the ballot or the freedom of assembly, but it certainly highlighted the danger of kitchen market research.
Market research is a dangerous arena which, all too often, has the ultimate effect of harmogenising everything and elevating the lowest common denominator to the gold standard.
A rose by any other name might smell as sweet, but slap on a hefty price tag, and our opinion of it might go through the roof. At least that’s the case with the taste of wine, say scientists from the California Institute of Technology and Stanford University.*
Professor Antonio Rangel, an economist at Caltech, and his colleagues found that changes in the stated price of a sampled wine influenced not only how good volunteers thought it tasted, but the activity of a brain region that is involved in our experience of pleasure. In other words, “prices, by themselves, affect activity in an area of the brain that is thought to encode the experienced pleasantness of an experience,” Rangel says.
Rangel and his colleagues had 20 volunteers taste five wine samples which, they were told, were identified by their different retail prices: $5, $10, $35, $45, and $90 per bottle. While the subjects tasted and evaluated the wines, their brains were scanned using functional magnetic resonance imaging, or fMRI.
The subjects consistently reported that they liked the taste of the $90 bottle better than the $5 one, and the $45 bottle better than the $35 one. Scans of their brains supported their subjective reports; a region of the brain called the medial orbitofrontal cortex, or mOFC, showed higher activity when the subjects drank the wines they said were more pleasurable.
There was a catch to the experiment, however. Although the subjects had been told that they would taste five different, variously priced wines, they actually had sampled only three. Wines 1 and 2 were used twice, but labeled with two different prices. For example, wine 2 was presented as the $90 wine (its actual retail price) and also as the $10 wine. When the subjects were told the wine cost $90 a bottle, they loved it; at $10 a bottle, not so much. In a follow-up experiment, the subjects again tasted all five wine samples, but without any price information; this time, they rated the cheapest wine as their most preferred.
Previous marketing studies have shown that it is possible to change people’s reports of how good an experience is by changing their beliefs about the experience. For example, says Rangel, moviegoers will report liking a movie more when they hear beforehand how good it is. “Our study goes beyond that to show that the neural encoding of the quality of an experience is actually modulated by a variable such as price, which most people believe is correlated with experienced pleasantness,” he says.
The experiment doesn’t reveal whether the subjects truly experienced more pleasure from the wines that they thought were more expensive. “The area of their brain that is thought to encode for the pleasantness of the experience was more active when they drank wine they believed had higher prices. Strictly speaking, that is the only hard finding of the paper,” he says. However, he adds, “it is hard to believe that this is not affecting their actual experience somehow, but we don’t have hard evidence for that.”
The results, while puzzling, actually make intuitive sense, Rangel says: “The brain encodes pleasure because it is useful for learning which activities to repeat and which ones to avoid, and good decision making requires good measures of the quality of an experience.” But the brain is also a noisy environment, and “thus, as a way of improving its measurements, it makes sense to add up other sources of information about the experience. In particular, if you are very sure cognitively that an experience is good (perhaps because of previous experiences), it makes sense to incorporate that into your current measurements of pleasure.” Most people believe, quite correctly, that price and the quality of a wine are correlated, so it is therefore natural for the brain to factor price into an evaluation of a wine’s taste.
Could the findings be used by marketers to mess even more with consumers’ heads? “Not directly,” Rangel says. “But it certainly points out a channel through which prices affect the consumer experience and thus sales.”
Making a decision on where to position a wine in terms of price point is a very tricky one. The costs associated with developing a premium wine estate are very high and factors such as capital costs cannot be included in the bottle price otherwise the price would be completely unrelated to the market.
Price pointing is often a theoretical exercise where a winery will position its’ wines in relation to competitors in the market. The wine’s quality needs to relate to its competition in a specific price bracket. Higher priced wines generally have greater intensity and flavor concentration as a result of greater care and attention paid in the winery and higher costs in terms of premium quality grapes and usage of value add resources such as oak barrels or lengthy maturation.
But … does this then mean that automatically positioning your wine at a higher price point assure greater sales as a consequence of the consumers conflation of higher quality with higher price, even if these prices are justified in terms of input costs. The product needs to be bought first and encouraging the consumer to part with their hard earned money is not that simple.
At DeMorgenzon we pay painstaking attention to the growing of our grapes, the making of our wines, the taste profile we present, and finally, the packaging in which we deliver. We believe that ours need to be the best quality wines in their respective price brackets and the branding of our products needs to be bold and strong creating an imprint in consumers’ minds.
We specifically created our DMZ wines to evidence our commitment to over-delivering fine wine at the most sensible price points. Whilst there is obviously a correlation between price and the quality of a wine, our focus is on the confident wine lover who tastes an exceptional product and says “wow, this is great” and it ‘only’ cost R 85 for the bottle, rather than the pretentious wine snob whose reaction is “this cost R 350 so it must be good.”
The only messing we want to do with our consumers’ heads is to give them more than they pay for.