How does family firm image affect consumer behaviour?

Family firms make up for the majority of wine businesses worldwide, yet little is known about the levers these businesses should pull to stimulate customer loyalty. New research conducted in Australia, Italy and the USA with a sample of over 1,500 people sheds light on the matter.

Winery Hill

Family firms play a critical role in the global economy and are a key driver for job creation. However, to date the concept of a family winery still lacks a precise definition from a consumer point of view, and the image this type of businesses evokes in the mind of consumers is still largely unknown.

In order to shed light on the matter, Dr. Christopher Köhr developed his PhD research under the supervision of Assoc. Prof. Roberta Capitello (University of Verona), Assoc. Prof. Armando Maria Corsi (Adelaide Business School, University of Adelaide) and Prof. Giulio Malorgio (University of Bologna). The full results of the study have recently been published in the Journal of Consumer Behaviour, whilst a more industry-ready summary of the research will soon be published in the 2021 Winter Issue of Wine & Viticulture Journal.

The study, conducted in Australia, Italy and the US with a sample of over 1500 consumers, first identified the key attributes consumers link with family firms through an extensive review of recent literature and then measured these attributes in relation to their ability to stimulate customer loyalty.

Results show  consumers believe that family firms rank higher than non-family businesses in relation to all the measured brand knowledge variables (i.e., customer orientation, long-term orientation, corporate social responsibility, localness, perceived quality, social image, and uniqueness). However, it is also seen heterogeneity exists and businesses that exhibited a stronger family firm image also ranked higher in the individual measures of brand knowledge, despite slight cultural variation of effect size between the three countries. Still, it could be shown customer orientation and localness are the two most differentiating elements of brand knowledge across all countries. Both measures did show positive influence on brand relationship that ultimately leads to superior loyalty.

In addition, results indicate the vast majority of the proposed brand knowledge attributes are positively associated with brand trust and/or brand satisfaction, which are the two key measurements of brand relationship (both are positively linked to each measure of loyalty).

However, two variables of brand knowledge have also showed opposing effects depending on the country of investigation. The clearest example for this behaviour is reflected in the relationship of long-term orientation with brand trust and satisfaction. In both Anglo-Saxon cultures effects on observed brand relationship were negative, while the Italian sample exhibits significant positive effects that lead to increasing consumer loyalty. Similarly, social image shows a positive linkage to both brand relationship variables in the Italian sample, while effects are negative in Australia and the USA. Hence, social desirability of the individual traits of family firms (which are similarly seen across all countries) follows an individual interpretation depending on cultural context and can be explained with Hofstede’s theory of cultural dimensions.

These results can be of value to both policy makers, family winery owners and brand managers. The contribution that family firms can offer the local community in terms of sense of place (i.e. localness and perceived quality), relationship (i.e. customer orientation) and responsibility (i.e. CSR) can be of help to policy makers when justifying the need to attract investments and develop a social capital for the local community.

Similarly, owners and brand managers can use the results of this research to build a storytelling which communicates something more unique and distinctive than strong family ties and a passion for wine.

Dr. Armando Corsi is an Associate Professor in Wine Business at the University of Adelaide, teaching Wine Branding and Direct Wine Marketing as part of the Wine Business suite. When not teaching, Armando is a key investigator for a variety of major projects funded by Wine Australia  and has recently completed a number of projects exploring the perceptions of Australian wines and its key competitors in the US and the UK.

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