Hochschule Geisenheim University Bachelor-Thesis Consumption in Armenia – An Analysis of the Wine Demand Reviewer : Prof. Dr. habil. Jon Hanf Department of Wine and Beverage Business Geisenheim University Co-Reviewer: M.Sc. Linda Bitsch Department of Wine and Beverage Business Geisenheim University Written by : Anne Elisabeth Hugger 7th Semester Bahnstraße 1 65366 Geisenheim Geisenheim, 21.12.2018 Affidavit Eidesstattliche Erklärung Hiermit erkläre ich an Eides Statt, dass ich die vorliegende Bachelor-Thesis "Consumption in Armenia – An Anlysis of the Wine Demand“ selbständig und ohne fremde Hilfe angefertigt habe. Ich habe dabei nur die in der Arbeit angegebenen Quellen und Hilfsmittel benutzt. Geisenheim, 21.12. 2018 Table of Content 1 Introduction .......................................................................................................................... 6 2 Consumption ....................................................................................................................... 8 Consumption Theory .................................................................................................. 8 SOR-Model .......................................................................................................... 8 2.1.1.1 Stimuli ............................................................................................................. 10 2.1.1.2 Consumer ...................................................................................................... 10 External Factors ........................................................................................................ 11 Internal Factors ......................................................................................................... 12 Activating Determinants ........................................................................................... 13 Cognitive Determinants ........................................................................................... 15 The Decision Process ...................................................................................... 16 3 Wine Consumption ........................................................................................................... 19 Current State of the World Wine Market ............................................................... 20 Wine Market of Armenia .......................................................................................... 21 The Product Wine ..................................................................................................... 23 Product Attributes of Wine ...................................................................................... 24 Consumer-Centric Orientation ................................................................................ 26 The Wine Consumer................................................................................................. 27 Segmentation Approaches of Wine Consumer ............................................ 28 Influencing Factors of the Wine Consumption .............................................. 30 3.4.2.1 Sociodemographic Influencing Factors ..................................................... 31 Age as an Influencing factor .................................................................................... 31 Gender as Influencing Factor .................................................................................. 33 Other Sociodemographic Influencing Factors ...................................................... 34 Overview of the Research Assumptions................................................................ 35 I Age-Related Research Assumption ....................................................................... 35 Gender-Related Research Assumption ................................................................. 35 4 Methodological Framework ............................................................................................. 37 Research Design ....................................................................................................... 37 Design of the Questionnaire .................................................................................... 38 Sociodemographic Characteristics – Independent Variables ............................ 39 Behavioural Characteristics – Dependent Variables ........................................... 40 Further Investigative Questions .............................................................................. 41 Data Collection .......................................................................................................... 42 Face-to-Face...................................................................................................... 42 Online ................................................................................................................. 43 Reflection of the Data Collection ............................................................................ 44 5 Presentation of the Results .............................................................................................. 46 Overview .................................................................................................................... 46 Results of the Armenian Wine Consumers ........................................................... 49 6 Discussion .......................................................................................................................... 63 7 Conclusion ......................................................................................................................... 66 8 Bibliography ....................................................................................................................... 67 9 Appendix ............................................................................................................................ 75 II Index of Abbreviations AMD Armenian Dram ICARE International Center for Agribusiness Research Mhl Million Hectolitres OIV International Organisation of Vine and Wine (French: Organisation Internationale de la Vigne et du Vin) SOR Stimuli-Organism-Response Vs Versus III List of Figures Figure 1 SOR Model ................................................................................................................... 9 Figure 2 Influencing factors on consumer behaviour .......................................................... 11 Figure 4 Maslow's Hierarchy of needs ................................................................................... 14 Figure 5 Decision making mode ............................................................................................. 17 Figure 7 Influencing factors on consumer behaviour ......................................................... 28 Figure 8 Combination of segmentation variables ................................................................. 29 Figure 9 Independent and Dependent Variables of Wine Consumption .......................... 30 Figure 10 Structure of collected questionnaires of the Armenian Wine Consumers ..... 49 Figure 11 Wine Type ................................................................................................................ 52 Figure 12 Wine Types in Allocation of Age and Gender ..................................................... 53 Figure 13 Allocation of preferred Wine Style........................................................................ 54 Figure 14 Place of Consumption ............................................................................................ 55 Figure 15 Willingness to pay for a glass of Wine ................................................................. 59 IV List of Tables Table 1 Overview of the research assumptions ................................................................... 36 Table 2 Overview of the Collected Questionnaires ............................................................. 46 Table 3 Consumed Alcoholic Beverage - In Allocation of Age Cohort and Gender ....... 47 Table 4 Wine Consumption Frequency in Alloctaion of the Age and Gender ................. 50 Table 5 Categories of the most commonly consumed wine/wine brand .......................... 57 Table 6 Category of the Special Attribute of Armenian Wine ............................................ 58 Table 7 Willingness to pay in Allocation of Age and Gender.............................................. 60 V 1 Introduction The history of wine is a long-lasting and lively one. Since thousands of years, vines and wine is cultivated, produced and consumed. The focus of the consideration of wine was and still is the product itself. But in the last decades the spotlight expands, so that also a light is set on the consumer of wine and those various attributes, characteristics and behaviour. But still in various wine markets and wine producing countries, the consumer in the own market is hidden in the shadow of the wine. Also, in the cradle of winemaking with its long history the consumer of wine is still hidden in the shadow. The Southern Caucasus has been identified as the cradle of winemaking. In Armenia as part of this region wine constitute an important pillar as well from the economic as from the cultural side (Batello, et al., 2010). Over the time enormous changes occur in the Armenian wine industry, especially in the last twenty the wine industry started to rise and experience a revival. This is noticable as well from the production point of view as from the development in the own domestic and the export markets