EXPLORING THE ROLE OF RELATIONSHIP MARKETING IN WINE TOURISM

Amanda Castray and Heather Francis

University of Tasmania
Track: Market Orientation and Relationship Marketing
Abstract
Academic researchers have devoted considerable attention over the last two decades to
developing a comprehensive theory of relationship marketing. Previous research has
addressed several aspects of a relationship marketing orientation, such as the benefits of
consumer loyalty, repeat purchase and positive word-of-mouth, to provide justification for its
usefulness in both theory and practice for contemporary firms. However, these aspects of
relationship marketing have attracted little research attention in the context of the wine
tourism industry. Furthermore, previous empirical research in wine tourism has largely had a
short-term focus, centered on shaping the marketing mix in an effort to attract consumers to a
winery cellar door with little consideration to the elements of the wine tourism experience that
may facilitate long-term relationships with consumers post-visit. This conceptual paper
highlights the relevance of relationship marketing to wine tourism and proposes a research
agenda by which gaps in extant literature may be empirically addressed.
The growing importance of relationship marketing
Traditional marketing theory has been grounded in a transactional framework, where there is
a simple exchange of goods or services between a seller and a buyer in a context where
ongoing interaction is given little, if any, consideration (Callaghan and Shaw 2001). Such
theory focused on single transactional exchanges between the firm and the consumer often
resulting in anonymous, price-based, automated purchasing (Day 2000). However, there is a
growing consensus, by academics and practitioners alike, which questions the continuing
relevance of this transactional approach to marketing given, among other things, the
increasingly competitive marketplace and the growing power of consumers (Berry 2002;
Gronroos 2000; Payne 1997).
Current marketing research and theory highlights the importance of forming strong, ongoing
relationships with customers for organisational success (Beverland 1999). The new paradigm
of relationship marketing is defined by Gronroos (1994:9) as marketing to establish,
maintain and enhance relationships with customersat a profit so that the objectives of the
parties are met. This is achieved by mutual exchange and fulfilment of promises. In
considering the scope of relationship marketing, it is often viewed as a whole of firm strategy
which includes the development and management of relationships with a variety of markets
(Veloustou, Saren and Tzokas 2002). It is apparent that in current theory and practice,
customer markets are now placed at the core of relationship marketing (Christopher, Payne
and Ballantyne 1991). Indeed, a relationship marketing strategy is designed to enhance the
consumers chances of satisfaction, loyalty and repeat business through the development of
interpersonal ties with the firm (Claycomb and Martin 2002). In this sense, Fournier, Dobscha
and Mick (1998:44) argue that relationship marketing is the epitome of customer
orientation.
ANZMAC 2003 Conference Proceedings Adelaide 1-3 December 2003 1134
Sheth and Parvatiyar (1995) attribute the emergence of relationship marketing as a reaction to
the loss of direct interaction between firms and their customers caused by mass production
and the apparent separation of production and consumption activities formerly closely aligned
in the pre-industrial era. Furthermore, it is acknowledged that the transactional approach to
marketing has restricted our understanding of the role of the end user to acceptance or
rejection of the offer made and precluded firms from considering the reasons underlying their
decision or the formation of their preferences (Wikstrom 1996). As such, there has been a
paradigm shift in marketing, re-focusing on the mutually satisfying, potentially ongoing,
buyer-seller relationship as the fundamental approach to marketing strategy (Berry, 2002;
Gummesson 2002; Hennig-Thurau, Gwinner and Gremler 2002; Palmer, 2002).
There are many reasons provided in the literature for the emergence of the relationship focus,
with the key drivers having foundation in competitive advantage, the growth of services in the
economy, technological advancement and consumer empowerment (Faus and Quintano 2000;
Gronroos 1994; Gummesson 1997; Morgan and Hunt, 1994; Sheth 2002). In combination,
these drivers provide a compelling force demanding that marketing theorists and practitioners
understand and engage in relationships of mutual benefit with a longer term focus.
Relevance of relationship marketing to the wine tourism industry
Recent decades have witnessed a dramatic increase in growth and competitive intensity of the
tourism industry, which has, in turn, stimulated recognition of the importance of marketing in
setting objectives and associated strategy. Indeed, recent findings published by the Australian
Bureau of Statistics (ABS) have observed that tourism provides a strong contribution to our
nations economy, with $31.8 billion generated from international and domestic tourism in
Australia, accounting for 4.7% of GDP in 2001 (ABS 2003).
Many regional areas are aiming to build upon the production of regional foods and wines to
market new travel and destinational experiences in an attempt to lure domestic and
international tourists (Carlsen, Getz and Dowling 1999). This practical engagement has been
coupled with strong growth in the degree and sophistication of conceptual and empirical
research into the field of tourism generally and, more specifically, a recent focus on wine
tourism (Getz 1999; Hall, Johnson, Cambourne, Macionis, Mitchell and Sharples 2000).
Of particular interest is the parallel growth in, and the complementary nature of, the wine
industry and wine tourism and the effort which has been expended in determining the most
effective manner by which one may promote the key elements of a winery experience to
potential visitors (Getz, Dowling, Carlsen and Anderson 1999; Macionis 1998). For the
tourism industry, wine is an important component of the attractiveness of a destination and
can be a major motivating factor for visitors (Hall et al. 2000). For the wine industry, tourism
is a very important way to build relationships with customers who can experience first hand
the workings of a vineyard and gain wine education (Jago, Issaverdis and Graham 2000). It is
recognised that substantial benefits are to be derived from increasing cooperation between the
wine and tourism industries, at both regional and national levels (Carlsen and Dowling 1999).
Wine tourism or visitation to vineyards, wineries, wine festivals and wine shows for the
purpose of recreation (Johnson 1998 cited in Hall et al. 2000) is an essential element in the
growth and success of many small wineries (Cambourne and Macionis 2000). Wine tourism is
largely transient and experiential in nature, with wineries making popular daytrip destinations
Market Orientation and Relationship Marketing Track 1135
involving visitors making a brief stay at a winery to taste the wine, tour the facility and/or eat
at the winery restaurant (Getz 1999). Furthermore, historically, wine tourism has been viewed
in practice from a transactional exchange perspective.
Despite this interimistic nature, for small wineries, particularly in emerging wine regions,
wine tourism is often an economic necessity to complement fundamental production
activities, providing cash flow and assisting to achieve a better sales mix at a higher yield,
while at the same time providing opportunities to brand both product and winery successfully
(Cambourne and Macionis 2000). Dodd and Bigotte (1997) note that many smaller wineries
in the United States rely primarily on tourism for their survival, reflecting the fact that income
from tourists can be a major source of revenue and, further, that this interaction may provide
excellent public relations opportunities which may in turn support the development of more
enduring relationships.
In their study of Margaret River wineries, King and Morris (1997) found that tourism is an
important part of winery operations, reporting the average cellar door sales accounted for
approximately 34 per cent of their total sales revenue. In addition to sales revenue, winery
tourism offers benefits such as opportunities for market intelligence, the education of
customers and the chance to encourage brand loyalty toward a winery to facilitate future
purchase beyond the tourism experience (Dodd and Bigotte 1997; Getz 1999). Significantly,
Mitchell and Orwig (2002) suggest that such consumer experience tourism forms an
important part of a firms integrated marketing communications effort, cultivating greater
personal involvement and bonding with a brand and subsequent brand loyalty and positive
word-of-mouth promotion. The benefits associated with ongoing relationships with customers
at the cellar door are explicitly noted as being likely to add exponentially to profitability (Sin,
Tse, Yau, Lee and Chow 2002). This growing need of many wineries to become actively
involved in tourism, combined with the growth in both the wine and tourism sectors in the
Australian economy, has placed greater emphasis on marketing strategies and associated
development of a successful wine tourism industry (Macionis 1999).
Although recognised as an important area in wine marketing, it is apparent that researchers
have given little attention to the benefits of retaining consumers beyond the initial visit. In
practice, wine tourism marketing appears to have a short-term, largely transactional focus,
with operational goals based on visitor numbers and sales with a limited commitment to
understanding or meeting customer expectations in the long-term. This is consistent with the
concentration of many researchers and practitioners on how to shape the marketing mix to
acquire consumers rather than on how to retain them (Berry 1995). Indeed Dodd (1999)
argues that it is mistakenly believed by many winery operators that the supply of new
customers is endless. Hall et al. (2000) argue that there is a limited research base from
which an understanding of wine tourism and its relationship to broader sales and profitability
issues may be developed. Illustrating this point, in their study of wine tourism, Ali-Knight and
Charters (1999: 8) suggest that research into the needs of wine tourists may enable wineries to
see beyond increasing short-term sales towards ideas of brand awareness, relationship
marketing and cementing opportunities for repeat sales.
Highlighting the significance of this observation, in Longos (1999 cited in Hall et al. 2000)
research of wine tourists in New Zealand, 88 per cent of visitors who had previously visited
the winery expressed the opinion that they would definitely or were highly likely to make
future purchases of that wine. This indicates the possibility of a continuing post-visit
relationship between the winery and these consumers and an opportunity to develop brand
ANZMAC 2003 Conference Proceedings Adelaide 1-3 December 2003 1136
loyalty. Interestingly, however, no work has been done to date to confirm, or otherwise, the
findings of Longo's research in New Zealand or any other wine producing country (Hall et al.
2000).
As identified, both in theory and practice, little attention has been given to considering the
possible benefits of a relationship marketing orientation in the wine tourism context. The gap
in the research is highlighted by Ali-Knight and Charters (1999:8), who suggest that the
notion that cellar door sales lead to higher wine sales when the visitors return home has
considerable scope for investigation. Furthermore, Jago et al. (2000) argue that more
research is required to assess whether cellar door visitation leads to increased purchase of
wines once the visitor returns home. Specifically, there is a need to identify the elements of
the wine tourism experience that facilitate post-visit consumer behaviours such as repeat
purchase of the wine, positive word-of-mouth and brand loyalty, in order to assist marketers
to better shape the marketing mix at the cellar door (Charters and Ali-Knight 2002; Dodd and
Gustafson 1997; ONeill and Charters 2000). These aspects of relationship marketing theory
are equally as relevant to the wine tourism industry where it is argued that developing long-
term relationships with visitors is an important part of the activities in a winery (Dodd
1999:139).
However, it should be noted that the transient nature and experiential basis of wine tourism
may prevent the formation of close, collaborative exchanges, often described as the ultimate
aim of relationship marketing. Rather, marketing mix variables may be better developed
within the framework of value-adding exchanges through tailored communications with an
emphasis on retention and maximising lifetime value. Indeed, Hall, Binney and OMahony
(2003) argue that the tangible nature of wine combined with the intangible aspects of the
experience adds greater complexity to the marketing of wine tourism. Hence, there is greater
relevance of a value-added marketing focus in the context of wine tourism, one that moves
beyond the traditional transactional approach to marketing strategy. Given this, empirical
research is required to determine what opportunities currently exist to provide such value-
adding exchanges in the wine tourism experience.
Formation of a research agenda: Identify elements of the wine tourism experience
facilitating relationships
It is proposed that research is required to determine the elements of the wine tourism
experience that impact post-visit consumer motivations and behaviours towards building
relationships. These elements are diverse and may include the existence and standard of such
things as wine quality, complementary and supplementary products, service quality, temporal
dimensions (pre and post visit), spatial dimensions (setting, atmosphere, facilities,
cleanliness), a mailing list, value-added services such as tours and meeting the winemaker,
accommodation availability and communications (including website). Clearly, this summary
of product, service and experiential elements is not exhaustive and yet its complexity
highlights the need to fully understand the influence of these factors, individually and
collectively, upon the formation of customer relationships.
Thus it is contended that research is required to inform the theory of relationship marketing in
the context of wine tourism in practice by seeking to:
Understand the marketing strategies wine tourism operators believe will assist them to
build relationships, during the visiting experience and post-visit;
Market Orientation and Relationship Marketing Track 1137
Identify the characteristics (demographic and psychographic) of wine tourists,
particularly those that can be identified as having repeat purchased or spread positive
word-of-mouth;
Identify the elements of this wine tourism experience that most effectively contribute
to customer satisfaction (through an assessment of the perceptions of both the wine tourism
operator and the wine tourist); and
Determine which of these elements are important in influencing the relational
behaviour of wine tourists (repeat purchase, positive word-of-mouth communication and
generate positive feelings of loyalty to the brand and winery).
Through pursuit of this research, consideration can then be given to what factors should be
considered by wine tourism operators with respect to their product and service offering to
assist in encouraging repeat purchase and building consumer loyalty and developing
relationships.
Wine tourism provides a valuable opportunity to study the tourist experience within a wider
temporal and spatial context (Mitchell, Hall and McIntosh 2000). In this way, pre and post
visit factors and experience both at home and in the winery should be considered when
developing the marketing mix. Zaheer, Albert and Zaheer (1999) suggest the importance of
considering time-scales and temporal intervals in research given that observations of a
visitors experience during their visit may be different to the emotions remembered about the
trip once the visit is over. This has particular relevance to the carriage of future research
where the elements important to formation of long-term relationships between visitors and
wineries can only be tested by considering behaviours and attitudes of consumers post-visit.
As such, it is postulated that contrary to the majority of extant research in this area, empirical
investigation must focus upon exploration of consumers perceptions of the wine tourism
experience post-visit rather than in situ.
Relationship marketing in wine tourism: A summary of implications and further
research opportunities
Much of the conceptual literature and empirical studies in the growing field of relationship
marketing have focused on discovery and explanation of the constructs which constitute
customer relationships. The research proposed aims to move beyond analysis of the
subcomponents of the constructs to an exploratory focus, identifying those elements of a
consumer experience that facilitate the establishment of a relationship with a firm in the wine
tourism context. Further, it is observed that the relative importance of these elements to
relationship marketing requires exploration in order to provide valuable contributions and
insight into the applicability of relationship marketing strategies in wine tourism, both in
theory and practice, and to assist in informing a wider research agenda.
Specifically, there are extensive opportunities for further, complementary research to augment
the program proposed. In particular, research is required to analyse the economic and other
benefits of increased customer loyalty for wine tourism operators and to determine the
potential value of relationship marketing for an entire wine region. As an extension of this, it
is observed that explanatory research should be undertaken to determine the effect of a
relationship marketing orientation on the overall performance of a winery. Furthermore, it has
been acknowledged that limited research has been undertaken in ascertaining whether such
relationships and loyalty can contribute to a firms long-term profitability in the wine tourism
ANZMAC 2003 Conference Proceedings Adelaide 1-3 December 2003 1138
context. Dodd (2000) highlights this opportunity for research work stating that the
development of loyal customers has been closely linked to profitabilityalthough no
published studies have been reported concerning this link in winery tourism, it is expected to
exist (2000:139).
The findings from the preliminary research agenda outlined in this paper aim to underline the
importance of this area of theory and, importantly, to provide the foundation upon which to
undertake further causal research. The brief overview of the theoretical concepts underlying
relationship marketing and its practical relevance in the context of wine tourism, illustrate the
considerable value which may be gained from this program of investigation, a contribution in
which the authors are actively engaged.
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