22/05/2018 STUDY RATIONALE OBJECTIVES OF THE STUDY THEORETICAL BACKGROUND

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2 STUDY RATIONALE Sandra Pestar Bizjak Hristo Hristov Aleš Kuhar In a recent review on consumer perceptions and preferences for local food (Feldmann and Hamm, 2015) it was pointed out that in the

1 2 STUDY RATIONALE Sandra Pestar Bizjak Hristo Hristov Aleš Kuhar In a recent review on consumer perceptions and preferences for local food (Feldmann and Hamm, 2015) it was pointed out that in the context of local food there is evidence of a gap between attitudes and behavior. Contrary to consumer ethnocentrism and national identity, which were intensively studied, the two constructs in the regional context have been somewhat neglected in academic literature. None of the previous studies at a regional level (Lantz and Loeb, 1998; Fernandez-Ferrin and Bande-Vilela, 2013; Lee et al., 2016) looked at the effect of each construct independently on actual purchasing behavior. Van Ittersum et al. (2003) demonstrated that region-of-origin has product-specific influence on product preference and that product perception is significantly influenced by the perceived product-specific regional image. Influence of product-specific regional image on the purchasing behavior has not been explored and we have not been able to find a measurement instrument to evaluate wine-specific regional image. May 23, 2018 Enometrics XXV, Dijon OBJECTIVES OF THE STUDY THEORETICAL BACKGROUND The objective of this study was to examine the effects of consumer regiocentrism and regional identity directly on wine purchasing behavior. Study aimed to develop a scale to measure wine-specific regional image and to understand the influence of wine-specific regional image on the wine consumers perception and wine purchasing behavior. Additional aim of our study was to identify opportunities to tailor marketing approaches at a region-of-origin level, considering the effects of regional identity and consumer regiocentrism on wine purchasing behavior against the background of wine-specific regional image from the perspective of regional consumers. Regionality of food products has become an important criterion for European consumers in their product evaluation and purchasing decisions (Lorenz et al., 2015). The strategy of marketing agricultural products based on region-of-origin enables the perception of superior quality and the development of long-term competitive advantage (Thode and Maskulka, 1998). According to van Ittersum (2002; 2007), a region is defined as an area situated in one or more countries which forms an entity based on local and regional characteristics, such as traditions, culture and scenery. Van Ittersum et al. (2003) demonstrated that product perception is significantly influenced by the perceived product-specific regional image. Shimp and Sharma (1987) noted that regional marketing is an especially exciting application of the CETSCALE, a scale to measure the level of consumer ethnocentrism.

5 6 CONSUMER REGIOCENTRISM AND REGIONAL IDENTITY RESEARCH HYPOTHESES Consumer ethnocentrism describes beliefs of consumers about the appropriateness and morality of purchasing foreign-made products,

2 5 6 CONSUMER REGIOCENTRISM AND REGIONAL IDENTITY RESEARCH HYPOTHESES Consumer ethnocentrism describes beliefs of consumers about the appropriateness and morality of purchasing foreign-made products, which (from the perspective of ethnocentric consumers) would be wrong as it hurts the domestic economy, causes loss of jobs and is unpatriotic (Shimp and Sharma (1987). Term ethnocentrism relates to social identity theory which is based on a set of concepts that address intergroup relations and was proposed by Tajfel and Turner (Tajfel, 1981; Tajfel and Turner, 1986). Regional identity is an example where a smaller (in this case, regional) group of people consider themselves as a distinct entity and not just a sub-group of the more inclusive national group (Simon et al., 1995). Regional identity explains pro-in-group while consumer regiocentrism desribes anti-outgroup tendencies, meaning they are conceptually different constructs, and it is therefor important to study the effects of each independently (Zeugner-Roth et al., 2015). H1: In the perception of Slovenian wine consumers their home wine region has significantly higher wine-specific regional image than the other studied wine region. H2: Wine-specific regional image significantly affects wine purchasing behaviour. H3: More regiocentric consumers buy statistically significant more wine from their home wine region. H4: Consumers with higher degree of regional identity will buy significantly more wine from their wine region. H5: Regional identity has a stronger positive impact on consumers wine purchasing behaviour than consumer regiocentrism. QUALITATIVE MARKET RESEARCH 1. phase Test qualitative (1 focus group) Anaysis Focus groups are the key qualitative method to discover the concepts which have not been considered in the previous and are important tool to study image (Malhotra in Birks, 2007). 2. phase Qualitative (focus groups: 3x) Descriptive analysis Material: Purposive sampling; wide range of consumers with different socioeconomic background, Respondents age: yrs old who are regular wine consumers (buy and drink wine regularly). Date PowerPoint Presentation 7 3. phase Test quantitative 4. phase Quantitative Methods: Focus groups (three; 20 respodents in total) Guided minute discussion with introduction, purpose and discussion in 2 parts (purhasing and consumption habits, wine-specific regional image) Wine-specific regional claims were the basis to develop a measurement tool to e wine-specific regional image

3 1. phase Test qualitative (1 focus group) 2. phase Qualitative (focus groups: 3x) 3. phase Test quantitative Testing 4. phase Quantitative Final analysis Material Purposive sampling stricly following even distribution of respondents according to gender, age and place of residence Inclusion criteria: adult regular wine consumers (drink wine at least once monthly and buy wine at least twice per year) who are born and resident in studied wine regions (Primorska in Podravje) Exclusion criteria: prefessional wine-makers, wine prefessionals and sommeliers Methods Structured questionaire in five thematic parts (online system 1KA, 32 questions ) QUANTITATIVE RESEARCH Closed questions with one possiblle answer: purchasing and consumption habits standard-socio-demographic questions wine-specific image (8 attributes) Closed questions measured on 7-point Likert semantic scale: 5-point CETSCALE to measure consumer regiocentrism (Shimp in Sharma, 1987; Fernandez-Ferrin in Bande-Vilela, 2013); 4-point scale to measure regional identity (Fernandez-Ferrin in Bande- Vilela, 2013). ANALYTICAL APPROACH To measure perceptions of wines and wine regions from the perspective of regional consumers we checked if proportion of answers for one or another wine region is statistically significant (one-way chi-square test). We analysed differences in perception from consumers from two wine regions and compared it to likelihood ratio between place of residence and region of most commonly purchased wine. Validity and reliability of consumer regiocentrism and regional identity scales was confirmed with factor analysis. Pearson correlation coefficient was used as a tool to evaluate the connection between consumer regiocentrism and regional identity scores and proportion of wine bought from different wine regions. SAMPLE CHARACTERISTICS Wine region of residence Primorska (n=109) Podravje (n=112) Total (n=221) Count N % Count N % Count N % Gender male female Employment status student unemployed employed retired Partnership status single with partner or relatives* alone with child/ren with partner and child/ren* Size of place of residence town (> inhabitants)* small town ( inhabitants)* village (< ) Education High school and below Income relative to national average Graduate degree Post-graduate degree below average* average above average Note: *= significantly different at p<.05 in the two-sided test of equality for column proportions. Tests assume equal variances Tests are adjusted for all pairwise comparisons within a row of each innermost subtable using the Bonferroni correction. Date 12

4 13 14 RELIABILITY AND VALIDITY OF SCALES Constructs (Kronbach alpha) Standardised loadings CR AVE ASV Regional identity (0,95) 0,97 0,95 0,38 WINE-SPECIFIC REGIONAL IMAGE In the total sample all attributes to measure wine-specific regional image were related more to Primorska wine region with statistical significance, except for the attribute»in this wine region wine is present everywhere«(where there was no difference between the two regions). I strongly identify with my region. 0,92 I am very commited to my region. 0,95 I am proud to be a member of my region. 0,87 Wine-specific regional image from the perspective of Primorska respondents Wine-specific regional image from the perspective of Podravje respondents Consumer regiocentrism (0,86) 0,90 0,86 0,31 Products fromoutside our region should only be bought when regional equivalents are not available. 3,16 Our regional products come first and foremost. 4,97 A true member of our region should always buy products made in our region. 4,01 Member of our region should not buy products from outside the region since it harms our companies and causes unemployment. 3,46 Goodness of fit indices: χ2(12) = 23,53; p < 0,024; RMSEA = 0,07; NFI = 0,98; NNFI = 0,98; CFI = 0,99; IFI = 0,99; SRMR = 0,05 CR = composite reliability, AVE = average variance extracted; ASV = average shared variance H1: In the perception of Slovenian wine consumers their home wine region has significantly higher wine-specific regional image than the other studied wine region. Partly accepted (only for one wine region: Primorska). EFFECT OF WINE-SPECIFIC REGIONAL IMAGE ON WINE PURCHASING BEHAVIOR Association between region of residence and wine region from where majority of wine was bought in the last year 15 EFFECT OF CONSUMER REGIOCENTRISM AND REGIONAL IDENTITY ON WINE PURCHASING BEHAVIOR Region of origin of purchased wine Living in Primorska wine region Living in Podravje wine region RI CR RI CR r Primorska wine region n Podravje wine region r * 0.014* n H2: Wine-specific regional image significantly affects wine purchasing behavior. Partly accepted (only for wine region Primorska). Posavje wine region Foreign wine r * n r n Note: *= significantly different at p<.05 r = Pearsons correlation coefficient; n = number of respondents, RI=regional identity, CR=consumer regiocentrism

5 EFFECT OF CONSUMER REGIOCENTRISM AND REGIONAL IDENTITY ON WINE PURCHASING BEHAVIOR We found no statistically significant correlation between regional identity and consumer regiocentrism and proportion of purchased wine with respondents from Primorska wine region. With respondents from Podravje wine region we observed weak positive statistically significant correlation between regional identity, consumer regiocentrism and proportion of wine purchased from their home wine region. H3 and H4 are partly accepted (only for wine region Podravje). Respondents from Podravje region who have higher scores of regional identity (but not consumer regiocentrism) buy significantly less wine from wine region Posavje (r = -0.19; p = 0.045), which implies that regional identity might be a better predictor of purchasing behavior than consumer regiocentrism, therefor H5 can be accepted. 17 CONCLUSIONS Our study adds additional evidence of a gap between attitudes and behavior in the context of local food. Despite similar levels of consumer regiocentrism and regional identity in both samples, we demonstrated that only in one of the two studied wine regions both constructs affect wine purchasing behavior. Importantly we also found that regional identity is a better predictor of wine purchasing behavior than consumer regiocentrism. Evaluating the wine-specific regional image in our study we confirmed that it is closely linked to preference, but not necessarily to purchasing behavior LIMITATIONS Relevance of consumer regiocentrism and regional identity data in the context of the size of the region 7-point Likert scale to measure product-specific image to allow for more comprehensive statistical analyses Number of indicators in the consumer regiocentrism and regional identity scales could be increased Date 20

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