The Italian market of sparkling wines: Latent variable models for brand positioning, customer loyalty, and transitions across brands' preferences

The Italian market of sparkling wines has undergone a strong expansion driven by what can be defined as the “Prosecco phenomenon.” It has extended consumption reaching new and more complex segments with a wide offer of appellations, brands, and prices. We aim to evaluate the Italian market of sparkling wines to figure out the competitive associations among the major brands. We propose two different analyses to disentangle distinctive groups of brands. First, using the information on scanner purchases of sparkling wines recorded by a consumer panel over a 2‐year period, and appropriate specifications of the latent class model, we cluster homogeneous groups of winery brands for the product attributes they propose to the market. Then, we analyze consumers' brand preferences from a dynamic perspective by employing a hidden Markov model to identify segments of brands perceived as similar. These results shed light on loyalty behavior and its evolution over time in the market.