Determinants of WTP for Prosecco wine: A latent class regression with attitudinal responses

Purpose – Under investigation is Prosecco wine, a sparkling white wine from North-East Italy.<br/>Information collection on consumer perceptions is particularly relevant when developing market<br/>strategies for wine, especially so when local production and certification of origin play an important<br/>role in the wine market of a given district, as in the case at hand. Investigating and characterizing the<br/>structure of preference heterogeneity become crucial steps in every successful marketing strategy. The<br/>purpose of this paper is to investigate the sources of systematic differences in consumer preferences.<br/>Design/methodology/approach – The paper explores the effect of inclusion of answers to<br/>attitudinal questions in a latent class regression model of stated willingness to pay (WTP) for this<br/>specialty wine. These additional variables were included in the membership equations to investigate<br/>whether they could be of help in the identification of latent classes. The individual specific WTPs from<br/>the sampled respondents were then derived from the best fitting model and examined for consistency.<br/>Findings – The use of answers to attitudinal question in the latent class regression model is found to<br/>improve model fit, thereby helping in the identification of latent classes. The best performing model<br/>obtained makes use of both attitudinal scores and socio-economic covariates identifying five latent<br/>classes. A reasonable pattern of differences in WTP for Prosecco between CDO and TGI types were<br/>derived from this model.<br/>Originality/value – The approach appears informative and promising: attitudes emerge as<br/>important ancillary indicators of taste differences for specialty wines. This might be of interest per se<br/>and of practical use in market segmentation. If future research shows that these variables can be of use<br/>in other contexts, it is quite possible that more attitudinal questions will be routinely incorporated in<br/>structural latent class hedonic models.