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Article

A Typology of Winery SME Brand Strategies with Implications for Sustainability Communication and Co-Creation

by
Marc Dressler
1,* and
Ivan Paunovic
2
1
Department of Viticulture and Oenology, FB Entrepreneurship, University of Ludwigshafen, 67435 Ludwigshafen, Germany
2
Dienstleistungszentrum Ländlicher Raum Rheinpfalz, 67435 Neustadt an der Weinstraße, Germany
*
Author to whom correspondence should be addressed.
Sustainability 2021, 13(2), 805; https://doi.org/10.3390/su13020805
Submission received: 11 November 2020 / Revised: 28 December 2020 / Accepted: 11 January 2021 / Published: 15 January 2021
(This article belongs to the Special Issue Co-Creating Sustainable Brands)
Versions Notes

Abstract

:
The article explores SME (Small and Medium Sized Enterprises) brand strategies as a means to position and successfully engage in competitive markets. A derived typology of brand strategy types deals with social profiling and sheds light on brand strategy internalization of two current managerial paradigms—sustainability and co-creation. N = 895 German SME wineries were examined, leaning on a netnographic analysis of predominantly websites and social media interactions. A two-step clustering method thereby identified eight winery SME brand strategy types. The importance of sustainability across the identified eight brand strategy types is significant. Co-creation turned out to be a key profiling trait characterizing one brand strategy type. The typology illustrates strategic richness, with brand strategies leaning predominantly on traditional values, on sustainability, on external reputation, or on more innovative customer centric concepts such as co-creation. Hereby, the typology and the identified brand levers invite to strategically design brand management, governance, and sustainability. Wineries which focus on traditional positioning and legitimacy were found to be cautious in deploying co-creation through social media. Winery brands that are characterized by engagement in digital co-creation apparently either tend to expand their scope or partially combine it with traditional values, making them the most diverse type identified. Sustainability obviously needs to be addressed by all brand strategies. Despite industry and country focus, the analyses illustrate the relevance of socially-oriented profiling and highlights that sustainability has reached a status of a fundamental business approach still allowing to differentiate thereon. Furthermore, the business models of the SMEs need to deliver communicated values.

1. Introduction

The value of branding and brand strategy is undisputed, as it secures recognition in highly contested markets and allows the realization of price premiums for brand owners [1,2]. Brand strategy, throughout the article, is understood as a long-term perspective on brand-building compared to short-term sales [3]. Branding serves to provide orientation for consumers in their search to satisfy their needs. In the light of increasing offer variety and new instruments to interact with consumers, brand strategies turn into an obligation for small enterprise owners. In the context of small and medium-sized enterprises (SMEs), building deliberate brand strategy provides a clear advantage over emerging brand strategy or narrow marketing strategy focus [4,5]. For consumers, brands provide orientation in the complex marketplace, thereby increasing their satisfaction [6]. The historic reliance on direct contact to customers and personal profiling increasingly demands more professional brand management addressing the target groups. In this context, brands are also important contributors to communicate the sustainability of the company and eventually use sustainability as strategic lever for differentiation [7,8]. The paper presents a typology of winery SME brand strategies, illustrating profiling efforts of SMEs as the instrumental lever in the strategic deployment of brand orientation. Special attention is on sustainability as well as brand co-creation opportunities in the digital space, two managerial aspects of paramount importance. Such an exploration has required a novel data collection approach, based on netnography. Analyzing both websites and social media allowed to assess both the producer as well as the customer perspective.
The research sets out to uncover market communication and especially links between branding on one side and sustainability and co-creation on the other side, assessing brand orientation and brand strategy. Brand orientation acts as a culture and compass for organizations, and it represents a direct antecedent of brand performance [9,10]. It has been researched both as a wider philosophical orientation as well as the process of building brand capabilities [11,12]. The extant literature has established a connection between brand orientation and brand strategy, inviting for further research. Hankinson [12] identified three major brand orientation elements: (1) Brand understanding, (2) brand communication, and (3) the strategic use of brands. Some newer approaches, however, identify brand orientation as a building element of a brand strategy and not vice versa. According to Wong and Merrilees [13], brand strategy consists of brand barriers, brand distinctiveness, brand orientation, and brand performance. This research deploys a more nuanced approach to brand orientation instead of considering brand orientation as a binary variable (yes–no, high–low) [9,14] acknowledging diversity and plurality of brand orientations. The presented clustering solution is based on brand orientations as input variables, and it allows for identification of distinctive brand strategies, explores the cluster relevance of sustainability and co-creation, assesses the impact of different brand orientations on certain brand strategies, and hints on diffusion in the sense of rather mainstream/fundamental or cluster-characterizing brand strategies.
Analyzing the German wine industry for SME branding strategies seems highly relevant, since this industry is characterized by a competitive drive-out market and a transition from product centrism to customer-value paradigms, pushing a need for branding and profiling. Keeping in mind that sustainability has been recognized as a value creation factor in general, but also in the wine industry, it is rather surprising that the link between the inside-out winery branding approach and sustainability has remained largely unnoticed in the literature [15,16]. Sustainability and branding have been researched before, primarily from an outside-in perspective, rating the role of brand name and sustainability as well as other factors like taste, price, and grape variety on consumer choice, providing mixed results [17,18]. Other important issues deal with eco-branding, [19], sustainability and wine brands as products [20,21], and brand equity as a part of sustainable business models [22]. Indeed, the wine industry is a fertile ground to explore digital co-creation in SME brands for several reasons. The German wine industry consists predominantly of SMEs, and the majority of them are family owned and entrepreneurial [23]. Also, the market is increasingly competitive, with a squeeze-out effect for many market players. In addition, SME winery brands are strongly affected by the digital disruption, calling for the emergence of novel organizational branding paradigms and theoretical approaches to tackle the new co-creational opportunities [24,25,26]. Wineries, although producing an agricultural product, are increasingly engaging in digital branding by including production process attributes, locational attributes, and social attributes [27]. Finally, winery branding strategies tend to develop in an emergent rather than a deliberate, planned way [28,29], calling for further improvement in this regard.
The literature review section commences by focusing on strategic brand management. Following, the phenomenon of co-creation and the innovation–tradition nexus as well as sustainability are revealed, all being important aspects for branding in the wine industry. An overview of the research approach in the methodology section explains the research concept, the theoretical model, and the applied variables. The primary data has been collected through a netnographic approach. A two-step cluster analysis served to derive a typology of SME winery branding strategies and to rank the underlying predictors for brand orientation. The results are discussed also in the light of relevance for different industries and contexts. Finally, theoretical and managerial implications and research limitations are discussed, with a special focus on brand sustainability and co-creation.

2. Literature Review

2.1. Brand Management, Co-Creation, and Sustainability in the Wine Industry

Brand management is an essential element of business operations as well as an important research field in the FMCG (fast moving consumer goods), beverages, wine, food, as well as other related industries [30,31,32,33]. The process of brand management starts with the value of a product or service and communicates in a structured manner tangible and intangible aspects of the offer [34]. Previous research takes the perspective of the winery as an organizational brand [35,36,37,38] as well as wines as product brands [28,39,40,41,42]. However, the very issue of dealing with wine brands is often overlooked and even dismissed by wine producers in practice, resulting in a negative impact on brand management overall [43]. In this sense, there is also a gap in the literature regarding usable models for wine brand managers in dealing with the practical challenges of strategic profiling, brand management, and the co-creation of reputation [30]. Other important research gaps in wine branding literature include limited usefulness of consumer research for brand communication and positioning [43], the role of communication content and semiotic meaning for brand positioning compared (to be ommitted) [44], as well as a lack of understanding of communication styles of innovative, sustainability-oriented wines [45].
The brand co-creation process has been rapidly advanced by new technology (Web 2.0 and Web 3.0). Technology has transformed the customers’ role from a passive recipient of transmitted messages, to an active co-creator of value and meaning, and in some circumstances, to be an active producer or a co-creator of offerings, also known in wine industry as prosumers [46,47]. The wine branding research has thus far primarily focused on measuring the engagement as a substitute of co-creation, thereby concentrating on the wine consumption intensity [48,49], while no research has paid attention to the number of postings on social media. Bearing in mind that customer participation has been proven to be an important aspect of brand building for wine estates and wine growers [50], exploiting information on customer co-creation via social media postings allows them to expand the concept of brand co-creation.
One of the most important functions of wine branding is the establishment and positioning of the brand within the minds of the consumers, as identification and brand differentiation play a major role in influencing the decision-making process, especially regarding sustainability [51,52,53]. Extant literature on wine branding and sustainability largely deals with place-related branding for sustainability, while at firm level it deals only with external and internal pressures for adopting sustainability practices [54]. Although the direct link between winery branding and sustainability has been identified in the wine-related literature, it hasn’t been operationalized and researched in detail [55,56]. This study aims at filing this research gap.
Wine SME branding literature lacks an understanding on communication styles of innovative brands, traditional ones, and ones trying to communicate both innovative and traditional content [57]. The research into winery SME branding is generally being impeded by the integrated nature of different business operations of SMEs: Production, sales, and marketing [58,59]. This suggests that while catering to both innovation and tradition, SME winery branding is still not an area of critical attention in the wine industry. In order to tackle the identified research gaps, the key questions to be addressed include what are major components of winery SME brand strategy, and how to successfully build winery SME brand strategies?

2.2. Brand Co-Creation, Governance, and the Relevance of Theory of Communicative Action

The company-driven elements of brand management have long been regarded by leading marketing scholars, such as Kotler and Armstrong [60], as having a crucial influence on the branding process, because this is where major branding decisions start. The consumer driven component of the brand creation process, often referred to as brand co-creation, was explored more recently [61,62]. The importance and value of co-creation in the context of brand management has been associated with the increasing number of co-creation opportunities based on the Internet and especially social media, with opportunities, but also managerial challenges for brand governance [63]. Research gaps in the SME brand management literature relate mainly to the non-strategic deployment of websites for communication, the still underexplored fields of brand value metrics and big data in branding, as well as a growing need to understand the impact of social media and brand co-creation on society and business [64,65]. The challenges of brand co-creation specifically call for a deeper research and understanding of SME brand governance [66].
Brand positioning and management strategy is important, as it allows for distinguishing a company from the competitors [67,68]. However, it is becoming increasingly evident that companies may not have complete control over their own brand communication strategy [69]; hence concepts like co-opetition/co-branding [70], co-creation [63,71], and co-operation [72] are increasingly taking up in brand creation. These processes, triggered by the Internet’s inherent flexibility as a communication media, question the suitability of the current brand management approaches and call for new concepts like brand governance when dealing with innovation [63,73] and tradition [74]. In this sense, brand management is still being dominated by rational and instrumental approaches. Political and alternative concepts, such as sustainability, are overlooked [8,29,75]. Leaning on the theory of communicative action (TCA) from philosophy, the results extend the understanding of winery SME brand strategy with the managerial and governance-related implications. Brand relations with customers relate to all fields of action, as identified by the theory of communicative action (TCA), demonstrating instrumental (non-social action oriented towards success), strategic (social action consisting of both instrumental and communicative action), and communicative action (social action directed towards reaching understanding between actors) [75,76]. As illustrated by the identified types of sustainable brand co-creation [77], it is only suitable that a strategic approach with a unique mix of instrumental and communicative action is a necessary precondition for a successful and fruitful engagement with stakeholders.
Communicative action is established at the core of the brand governance process, because the outcome of communication is determined by the superior argument—this process can therefore challenge actors’ own preferences and identities, introduce new norms, and advance both legitimacy and accountability of actors [78,79]. Subsequently, modern brands are increasingly co-created by different actors [80,81]. With the increasing importance of co-creation within a digital brand strategy, governing rules, stemming from consumers’ need for memorable brand experiences, gain in relevance [82]. This is especially important taking into account brand communication challenges, like consumer stereotypes, non-collaborative co-creation, fake news, brand polarization, and brand community value heterogeneity [83,84,85,86]. Instrumental action is inherently related to brand management due to its hierarchical mode of operation and success orientation. Brand management needs to consider the effective channel for communication with consumers in each particular situation, as consumers respond differently to media channels in different situations [87].

2.3. Research Questions

In light of increasing relevance, but also rising complexity of strategic branding for SMEs, three research questions guided the analyses. The research questions span from the factors via clusters to the specific analysis for the two managerial topics of special interest (sustainability/co-creation):
  • RQ 1: What are the primary factors influencing brand strategy positioning of winery SMEs (brand orientation)?
  • RQ 2: What are major characteristics of each identified winery SME brand strategies (brand strategies)?
  • RQ 3: What is the role of sustainability and co-creation in the branding strategies?
The research questions address social profiling of the research subjects and according socially-tied perception of the addresses. They furthermore invite an explorative and inductive research approach.

3. Methodology

The study leans on netnography as a recent explorative and inductive research method fitting the social sphere of the research questions [88,89]. Netnography is an extension of ethnography and deals with social interactions in the digital space. So far, netnography has predominantly been used for consumer research. Applying it for an assessment of strategic organizational branding is rather a novelty. The wineries have been selected for published wine expert guides. This source, as first selection criteria safeguarded that the wineries communicate branding activities and the existence of a website of the winery. Additionally, the guides informed about selected variables (Variable 1 “wine quality circle”). Subsequently, websites and social media activities have been observed in a netnographic manner, allowing us to observe for six variables (variable 2–7 Table 1). Variables 1–5 are binary variables while variables 6 and 7 have been coded as scale variables. The data has been collected from three different sources: Websites (variables 2–6), Google reviews (variable 7), and an external winery rating (variable 1.) during the period from April 2019 to March 2020.
In order to answer RQ 1, the study commences with a model developed from seven winery SME brand strategy metrics (Table 1) for quantifying the different aspects of brand communications, explaining the previous use and the importance of each of the variables. The selected variables suit the searched industry as they are observable and they capture different aspects of the online content of a winery that constitutes the winery brand strategies. Observable variables were the prerequisite for clustering, as they allow us to identify segments efficiently [90]. The variable “Number of Google reviews” served to assess the managerial concept of co-creation. Client feedback can provide insight into digital co-creation engagement and therefore presents an innovative mechanism for client participation. It should be noted though that this one indicator does not provide for the full co-creation spectrum, but deals only with one social media platform.
The database contains N = 895 German wineries, covering all thirteen German wine regions. Due to the structural characteristics of the researched industry, the sample consists exclusively of SMEs dominated by family ownership.
Table
Table 1. Research variables deployed and their relevance for the research.
Table 1. Research variables deployed and their relevance for the research.
VariableTechnology Generation/Brand Co-CreationBrand Sustainability PillarLiteratureDescription
1. Membership in the traditional quality circleweb 1.0 (website)Social pillar of brand sustainability[91,92]In the German market, there is a representation of closed membership circle for wineries jointly promoting high-end wines.
2. Traditional vs. innovative logo[44,93]Tradition (also named typical in the old-world countries) is one common or typical theme for wine label logos, while the opposite is often named atypical or innovative
3. Affinity towards sports/culture[94,95,96]Sports and arts are two major out-of-home activities, therefore suitable for brand differentiation; brand strategies and culture/arts have a long history of fruitful cooperation.
4. Endorsement by a celebrity/place/event[97,98,99,100,101,102]Endorsements in the food and wine industry often focus on star chefs, actors, musicians, sportsman, as well as self-proclaimed digital celebrities with online fan-bases and social media role modeling.
5. Affinity towards sustainability/environmentEnvironmental pillar brand of sustainability[17,103]Environmental sustainability as a factor influencing wine brand choice; consumer displeasure with mass-produced food and beverage products have created space for differentiation through sustainability and environment aspects of products.
6. No. of foreign languages on the websiteEconomic pillar of brand sustainability[104,105,106,107]Foreign language on the website as an indicator of target market, degree of internationalization, and the level of participation in global supply chains; especially important for small and medium sized enterprises (SMEs); in wineries, very relevant for engaging with tourism markets.
7. No. of online reviews (eWOM)web 2.0[108,109,110]Social media as a powerful tool for promoting wine brands, obtaining feedback from the customers as well as identifying high-involvement customers in the Web 2.0. There is mounting evidence that Google is often very actively solicited by companies.
As presented in Table 1, online reviews (eWOM) are a part of the Web 2.0 technology generation, representing an addition to Web 1.0 technologies, such as web sites, e-commerce, and search engines [111]. Out of the first six (Web 1.0) variables used, four relate to brand attributes and one relates to the number of foreign languages on the website (the degree of participation in global supply chains). Each one of these variables has been further elaborated on in Table 1. Four of the variables presented in Table 1 refer to social pillar of brand sustainability, one refers to environmental pillar of brand sustainability, while two refer to the economic pillar of brand sustainability.
In order to reach the research goals and to provide answers to research questions, a two-step clustering method has been deployed. Two step clustering combines hierarchical and partitioning approaches. It is well suited for dealing with a combination of metric and nominal (binary) data. Unlike hierarchical clustering, two-step clustering can deal with extensive data sets, similar to k-means and c-means clustering [65,112]. The cluster analysis has been conducted using the SPSS software [113]. The clustering procedure has allowed for a creation of a typology of winery SME branding strategies, presenting the most important factors influencing the clustering solution, as well detailed profiles of each of the extracted clusters that represent winery SME brand strategies. In addition, the evaluation variables (no. of foreign languages on the website, no. of Google reviews) are introduced to asses each of the created clusters regarding global orientation and co-creation.
The two-step clustering allowed the study to extract the major predictors influencing winery SME brand strategy choice, as well as to derive typical profiles of winery SME branding strategies. In this way, meaningful clusters were built to describe and distinguish between different realized winery SME brand strategies. The best solution in the SPSS two-step cluster modeler has been achieved with an eight-cluster solution and log-likelihood distance (used for categorical and continuous variables). The average silhouette of this solution is 0.6, demonstrating a good value of cluster quality in respect to their cohesion and separation, confirmed by a green indication in the IBM SPSS software and supporting literature [112] confirming that an average silhouette of cohesion and separation of more than 0.5 is considered to be satisfactory. The final clusters in the derived typology were achieved through several iterations to meet the silhouette criterion, with Akaike’s information criterion (AIC) as well as Bayes information criterion (BIC) confirming this typology, as best measure of fit.

4. Results

The winery SME brand strategy clustering model includes seven predictors (Table 2) and eight clusters (Table 3) of winery SME brand strategy. In response to the RQ1, the predictors are presented in descending order, reflecting the importance of each variable in winery brand orientation and in predicting the membership to one of the clusters.
In response to RQ 2, eight different types of winery SME brand strategies could be identified. The initial clustering results are presented in the rows two, three, and four of the Table 3. The cluster names characterize the inside-cluster importance of the variables. Sustainability turned out to be a fundamental brand constituent as well as a characterizing basis (RQ3), whereas co-creation serves profiling. The clusters (1) Sustainability and environment, (2) Undifferentiated (no clear positioning), and (3) Traditional quality circle represent clear-cut clusters with unambiguous names. Cluster (4) Tradition stands out based on the obvious reliance on tradition. Clusters (3), (4), as well as (5) Sports/culture with a focus on the domestic market, (6) Sports/culture and endorsements, and (7) Endorsements, are all characterized by approximately half of the cluster members pursuing sustainability and environment. Cluster (8) Co-creation and international markets is characterized by a rather marginal importance of environment and sustainability.
The results show that Cluster (8) Co-creation and international markets, with 160.2 Google reviews on average, stands out as a specific cluster exploiting innovative customer interaction. It is also characterized by an extended scope with wine estates reaching international markets. This strategic type, speaking for customer brand awareness, is pursued by just 2.2 percent of the observed wineries. Indeed, all other clusters possess just around ten comments per winery on average. Cluster (4) Traditional logo scores in regards to customer awareness, with 12.95 Google Reviews on average, while cluster type (3) Traditional quality circle ranks at the bottom, with 8.14 Google reviews on average.
The variable “Number of foreign languages on the website” is highly relevant for SME wineries when engaging with international markets [105]. Cluster (8) Co-creation and international markets thereby outperforms, with 1.75 foreign languages deployed on average, followed by type (4) Traditional logo, with 0.36 foreign languages. The laggard in this brand strategy was type (5) Sports/culture with a focus on the domestic market, with only 0.18 foreign languages on average. It appears that a winery’s brand engagement in digital co-creation goes hand in hand with being active in international markets.
The variables “Membership in the traditional quality circle” and “Presence of a traditional logo” serve the role to illustrate the role of tradition in winery SME brand strategies. Both variables represent a corresponding cluster, while it is worth noting that inside cluster (3) Traditional quality circle, 15.1 percent of wineries are also characterized by presence of a traditional logo, as a further indication of tradition. In cluster (6) Sports/culture and endorsements, 38.6 percent are characterized by a presence of a traditional logo, while in cluster (8) Co-creation and international markets shows that a subset of 35 percent are members of a traditional quality circle, and 15 percent with a reliance on a traditional logo. The presented results on digital co-creation engagement, international markets, and the role of tradition, make the cluster (8) Co-creation and international markets, the most diverse and interesting group combining innovative but also tradition-related elements in their brand strategy.

5. Discussion and Future Research Direction

The analyses of winery brand strategies provided insights for winery SME branding strategy theory in the digital age, extending the previous theoretical findings from the literature on the process of crafting successful wine-related promotional strategies [114]. The generated typology of SME winery branding strategies with eight differing approaches supports an assumed high relevance of sustainability—being a factor across the identified clusters, but also serving profiling. Cluster (1) Sustainability and environment turned out to be the most populated SME brand strategy cluster. It demonstrates an increasing marketing and business model orientation towards sustainability. Cluster (2) are wineries where the clustering did not allow for identification of a clear profiling. Wine industry builds on agriculture because wine is processed of grapes. These roots impact the branding orientation and strategy as the two clusters 3 and 4 illustrate. Cluster (3) Traditional quality circle speaks for a branding that strongly builds on reputation. Wine experts with their judgement serve to assure the consumers in their quality perception. Cluster (4) is named “Tradition” since the branding orientation emphasizes the traditional ‘old world’ approaches to managing wine brands, and also in the digital era serving a target group of traditionalists and older wine drinkers [115]. This approach seems to mimic the traditional, analogue brand strategy with minimal social media interaction. In comparison, the most innovative digital approach, realized by strategy (8) Co-creation and international markets, is characterized by a high number of Google comments. This innovative digital branding strategy serves to broaden the market scope, illustrated by a high number of foreign languages on the website. It confirms previous findings on the growing significance of social media and co-creation for branding strategies [116,117,118]. This brand strategy type also corresponds with the millennial demographic group. The according brand strategy seeks to inform non-traditional (e.g., social media) outlets about wine and thereby position non-traditional wine labels, but also generally follow the consumption patterns of the older generations [119,120,121]. According brand strategies react to the changing customer traits and redefine themselves by actively exploiting co-creation opportunities [122].
In an analog era, wineries relied on tradition and family reputation for branding, while in the digital era, new ICT (information-communication technology) is challenging this paradigm, calling for a transition of brand orientation and strategy. The results illustrate European wine producers’ focus on tradition and craftsmanship and their consequent inertia to effectively adapt to the rising importance of social media for branding [123]. Traditional brands face numerous challenges while creating a clear brand identity and positioning strategy across digital and analog media and especially digital communication platforms [124,125,126]. Indeed, the SME brand strategy typology uncovers more innovative clusters to better cope with the transition from product centricity to customer orientation. From a branding strategy perspective, ‘old world’ wineries need to reflect the changing values in their communication by engaging in a media-based interaction in the era of e-business. However, this does not represent a substitution of communication channel, but a paradigmatic shift into the sphere of customer-centricity, where traditional components of their value communication (e.g., complex appellation systems with wine region codes) are questioned [32,127]. Consequently, such market structure demands a strategic approach to branding activities by individual SME wineries to avoid being forced out of the market.
Modern branding strategy is created in a multi-channel co-creation process between companies and their stakeholders. This interaction is based on empowerment, partnering, collaboration, dynamism, and tailored content [63,114,128]. The concept of brand governance signifies stakeholder buy-in and a shared control over the brand by organizations and its stakeholders [128,129]. Governance is especially important for the brand co-creation process in order to deal with power dynamics related to the brand, but also for resolving partner relationship building issues related to organization [130].

6. Theoretical Implications

The research contributes to the body of knowledge by conceptualizing three decision-making realms of winery SME brand strategy (management, governance, sustainability), thereby contributing to the identified research gaps in the literature on strategic brand management and sustainability [131,132]. More specific contributions relate to the gaps in a rather scarce literature on wine branding and sustainability [38,133], as well as wine branding, sustainability, and co-creation through social media [134].
The model borrows from the concept of communicative action from philosophy and the concept of governance from the political sciences. This approach resolves the considerable challenges of digital co-creation by providing a new theoretical foundation for brand co-creation through deliberative communicative action in relation to brand building activities. Contrary to the brand co-creation management literature and acknowledging the inherent limits of managing co-creation identified in the literature [135,136], a wider model of strategic SME branding is proposed, where brand management represents only one perspective, while brand strategy, brand governance and sustainability are instrumental in facilitating brand strategy performance. The model advocates the balance between instrumental and communicative action in the cooperation with major brand stakeholders: With stakeholders driving sustainability, such are traditional quality circles and general/environmental sustainability stakeholders, as well as with endorsers, international customers, and social media users as co-creators.
The insights on winery branding strategies for sustainability and digital co-creation can serve as a basis for further research into the link between branding strategy and important target markets (e.g., baby boomers, millennials). The interplay between digital brand co-creation and sustainability has been explored with an identification of pioneering branding strategies, thereby calling for future research. In the created typology, sustainable brands were not inclined towards digital brand co-creation, whilst those that were inclined towards digital brand co-creation and international markets were not oriented towards sustainability. Further research should complement this research stream with product-oriented brands from other industries and with other countries or markets. Quantitative (different clustering methods or other statistical procedures) as well as qualitative (interviews and case studies) perspectives may further open opportunities to enrich the theoretical foundations of SME brand co-creation and sustainability.

7. Managerial Implications

Branding practitioners, in their ambition to seek for consistent and balanced digital communication strategies, might use the discovered opportunities and challenges posed by digital co-creation and sustainability to fine-tune their positioning and brand communication. Branding orientation should reflect the ambitioned competitive profiling and result in a coherent branding strategy to meet the target groups. Each step of branding activities may be further improved by emphasizing either brand management or brand governance or a combination of the two, while paying special attention to sustainability. The typology facilitates self-reflection, especially in relation to the degree to which brand governance and sustainability stakeholders are being deployed. Therefore, the results can build the basis for a communication concept suited for brand co-creation and digital innovation of sustainability inclined brands, by relying on communicative action as a modus operandi.
Indeed, a profound brand positioning in regards to sustainability is needed. Branding managers can further benefit by recognizing the primary positioning of their own enterprise or winery, understanding the main strengths and weaknesses of this position, as well as establishing a better understanding for their own competitive position. Sustainability alignment of brand strategy is crucial in the wine industry, because of the very nature of the bottled wine as an agricultural and also alcoholic product. Sustainability is a complex aspiration, requiring the alignment of company’s interests through an interaction with stakeholders. In this sense, deploying a brand governance approach for brand building can open new, unexplored venues for sustainability-oriented brand strategy development.

8. Limitations and Future Research Directions

The research is limited by its focus on a single industry, which is the wine industry. Other limitations are its focus on one country and SMEs. The applied statistical method is limited by an exclusive use of a clustering algorithm. Primary data collection from websites and a social media platform was not validated by other sources or interviews, thereby relying solely on an explorative, netnographic approach.
Future research is invited to expand the list of the indicators used in this study in order to expand the SME brand research regarding digital co-creation for sustainability. It invites observation across different industry contexts, and across countries other than Germany. Additional primary data sources (e.g., brand managers) could validate the presented results as well as other semiotic brand analysis methods.

9. Conclusions

The paper has deployed a netnographic observation of wineries’ websites and social media interaction delivering a typology of winery SME branding strategies. Eight branding strategies illustrate the existence of different approaches. Indeed, the typology illustrates strategic richness with brand strategies leaning predominantly on traditional values, on sustainability, on external reputation, or on more innovative customer centric concepts such as co-creation. Hereby, the typology and the identified brand levers invite to strategically design brand management, governance, and sustainability. Global food supply chains face challenges related to the proliferation of social media as new digital communication platforms and the increasing consumer pressure for brand co-creation and increase of sustainability in all parts of the value chain [137,138]. The transition and challenges of the current branding paradigms, should serve to motivate brand academics and practitioners to accommodate for these changes and identify and exploit the resulting opportunities.
The identified brand strategy types confirm the existence of diverse approaches, ranging from sustainability-centered via co-creation to undifferentiated branding strategies. Wineries which focus on traditional positioning and legitimacy were found to be cautious in deploying co-creation through social media. Winery brands that are characterized by engagement in digital co-creation are identified to be either more oriented towards international markets or partially combine it with tradition, making them the most diverse type identified. Sustainability obviously needs to be addressed by all brand strategies.

Author Contributions

Conceptualization, I.P.; methodology, M.D. and I.P.; software, I.P.; validation, M.D. and I.P.; formal analysis, M.D. and I.P.; investigation, M.D. and I.P.; resources, M.D. and I.P.; data curation, M.D. and I.P.; writing—original draft preparation, M.D. and I.P.; writing—review and editing, M.D. and I.P.; visualization, I.P.; supervision, M.D.; project administration, M.D. and I.P.; funding acquisition, M.D. All authors have read and agreed to the published version of the manuscript.

Funding

The research received funding from Forschungsring des Deutschen Weinbaus (FDW) through the project “Innovation and strategic brand positioning as success factors in the wine industry: exploration of strategic types”.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

Not applicable.

Conflicts of Interest

The authors declare no conflict of interest.

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Table
Table 2. The most important factors (brand orientations) influencing winery SME brand strategies (7 inputs, 8 clusters, average silhouette 0.6).
Table 2. The most important factors (brand orientations) influencing winery SME brand strategies (7 inputs, 8 clusters, average silhouette 0.6).
RankNameImportance Factor
1Affinity to sports/culture1.00
2Traditional logo (image and color)1.00
3Membership in the traditional quality circle0.93
4Endorsement by celebrity/place/event0.77
5Number of Google reviews0.67
6Affinity to sustainability and/or environment0.52
7Number of foreign languages on the website0.14
Table
Table 3. The typology of SME brand strategy.
Table 3. The typology of SME brand strategy.
Branding StrategyCluster SizeBrand Orientations (Ordered by Variable Relevance)Value
(1) Sustainability and environmentN = 210 (23.5%)Affinity to sustainability and/or environmentyes (100%)
Affinity to sports/cultureno (100%)
Endorsement by celebrity/place/eventno (100%)
Membership in the traditional quality circleno (100%)
Reliance on traditional logono (100%)
Number of Google reviews(11.30)
Number of foreign languages on the website(0.30)
(2) Undifferentiated (no clear strategy)N = 183 (20.4%)Affinity to sustainability and/or environmentno (100%)
Affinity to sports/cultureno (100%)
Endorsement by celebrity/place/eventno (100%)
Membership in the traditional quality circleno (100%)
Reliance on a traditional logono (100%)
Number of Google reviews(10.75)
Number of foreign languages on the website(0.20)
(3) Traditional quality circleN = 106 (11.8%)Membership in the traditional quality circleyes (100%)
Number of Google reviews(8.14)
Affinity to sports/cultureno (99.1%)
Endorsement by celebrity/place/eventno (84%)
Number of foreign languages on the website(0.33)
Reliance on a traditional logono (84.9%)
Affinity to sustainability and/or environmentyes (52.8%)
(4) TraditionN = 105 (11.7%)Reliance on a traditional logoyes (100%)
Membership in the traditional quality circleno (100%)
Endorsement by famous person/place/eventno (70.5%)
Number of foreign languages on the website(0.36)
Number of Google reviews(12.95)
Affinity to sports/cultureno (77.1%)
Affinity to sustainability and/or environmentyes (50.5%)
(5) Sports/culture with a focus on the domestic marketN = 99 (11.1%)Affinity to sports/cultureyes (100%)
Endorsement by celebrity/place/eventno (100%)
Membership in the traditional quality circleno (100%)
Reliance on a traditional logono (100%)
Number of foreign languages on the website(0.18)
Number of Google reviews(11.14)
Affinity to sustainability and/or environmentyes (53.5%)
(6) Sports/culture and endorsements N = 88 (9.8%)Affinity to sports/cultureyes (100%)
Endorsement by celebrity/place/eventyes (81.8%)
Membership in the traditional quality circleno (61.4%)
Reliance on a traditional logono (100%)
Number of Google reviews(10.76)
Number of foreign languages on the website(0.23)
Affinity to sustainability and/or environmentno (51.1%)
(7) EndorsementsN = 84 (9.4%)Endorsement celebrity/place/eventyes (100%)
Affinity to sports/cultureno (100%)
Membership in the traditional quality circleno (100%)
Number of Google reviews(9.52)
Reliance on a traditional logono (100%)
Number of foreign languages on the website(0.23)
Affinity to sustainability and/or environmentyes (51.2%)
(8) Co-creation and international marketsN = 20 (2.2%)Number of Google reviews(160.20)
Affinity to sustainability and/or environmentno (85%)
Number of foreign languages on the website(1.75)
Membership in the traditional quality circleno (65%)
Affinity to sports/cultureno (55%)
Endorsement by celebrity/place/eventno (65%)
Reliance on a traditional logono (85%)
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Dressler, M.; Paunovic, I. A Typology of Winery SME Brand Strategies with Implications for Sustainability Communication and Co-Creation. Sustainability 2021, 13, 805. https://doi.org/10.3390/su13020805

AMA Style

Dressler M, Paunovic I. A Typology of Winery SME Brand Strategies with Implications for Sustainability Communication and Co-Creation. Sustainability. 2021; 13(2):805. https://doi.org/10.3390/su13020805

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Dressler, Marc, and Ivan Paunovic. 2021. "A Typology of Winery SME Brand Strategies with Implications for Sustainability Communication and Co-Creation" Sustainability 13, no. 2: 805. https://doi.org/10.3390/su13020805

APA Style

Dressler, M., & Paunovic, I. (2021). A Typology of Winery SME Brand Strategies with Implications for Sustainability Communication and Co-Creation. Sustainability, 13(2), 805. https://doi.org/10.3390/su13020805

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