Credibility of Collective Brand as a Source of Equity: An Empirical Application for Spanish Wine Market

The appearance of consumers groups increasingly concerned about the quality of food products, together with an increasingly competitive environment and domestic saturated markets, has led companies to achieving differentiated quality. The wine sector is immersed in this situation. Valuation of this differentiation by consumers will not happen by complying with certain standards or technical specifications, but rather it has to be perceived by consumers. Unlike experts, consumers cannot easily know which properties are intrinsic to products, which are those that give them their quality. There is, thus, a problem of uncertainty regarding the quality of products. This problem becomes more complex when consumers are faced with many alternatives of a similar perceived quality, which makes them have to decide on one without being completely sure. This problem is evident in the wine market. To solve this issue, Signalling Theory has investigated the variables used by consumers to infer quality. Among these variables are price, guarantees, origin, advertising, packaging design and brand. From the consumer point of view, the most reliable signal is the brand. Due to the territory image was earning more and more equity; an opportunity to differentiate wine emerged for these regions, which was the creation of appellations of origin. Thus, some producers of a same region or territory can collaborate and establish a joint offer which permits to differentiate a typical production. Therefore, the appellation of origin or, in our case, the collective brand, will have the basic objective of signalling differentiation. The aim of this work is therefore to ascertain the value that the collective brand, as a signal, provides for end consumers. In order to respond to this question, a field study consisting of a personal survey was carried out in 2006 on a sample of 296 Spanish purchasers and/or consumers of quality wine. Results reveal that the collective brand, as a signal, allows consumers to infer quality, but also it improves perception of the intrinsic attributes of the product, which some authors have called the halo effect.