Market Driving, Status Games, and Competitive Advantage in the U. S. Wine Industry

The concept of market orientation rests on the implicit assumption that consumers have well-developed, discoverable preferences. Empirical evidence suggests, however, that consumer preferences can be inchoate, inconsistent, unpredictable over time, and sometimes consumers can appear irrational. How can a firm learn about and succeed with when consumers are poor or inarticulate guides? We explore that question in the U. S. wine industry. Adopting a market systems perspective, we conduct an ethnographic analysis of consumers, producers, critics and the trade. Our analysis reveals that consumers derive significant meaning from wine, but much of the meaning consumers derive from wine is poorly understood, overlooked, or dismissed by producers. As a result, firms that embrace a market orientation often produce indistinguishable wines at identical prices. Rejecting a market orientation as impractical, other firms play a status game. These firms ignore consumers and turn to critics, winemakers, and others with influence in the system to engineer status for their wines, influencing the formation and evolution of consumer preferences. High-status wines achieve remarkable success with consumers, even though firms selling them display behaviors and cultural values that are inconsistent with a market orientation, suggesting the need for a broader concept of market orientation that includes actors beyond buyers and sellers, the social engineering of status, and the social construction of preferences.