The Effect of Gender, Age, and Income on Alcohol Preference

Maile Mosley
Omis 600 Fall 2012

TABLE OF CONTENTS
INTRODUCTION.....5 Statement of Problem...5 Age and Income in Alcohol Advertising..6 Gender in Alcohol Advertising..7 Purpose..8 Hypothesis..8 METHODOLOGY.....8 Participants.8 Study Design..9 FINDINGS AND DISCUSSION......9 SUMMARY AND IMPLICATIONS......12 APPENDIX A: Survey: The Effect of Gender, Age, and Income on Alcohol Preference....13

The Effect of Gender, Age, and Income on Alcohol Preference Mosley

APPENDIX B: Gender and Alcohol Preference Chi-Square Test of Independence....15 APPENDIX C: Age and Alcohol Preference Chi-Square Test of Independence.....16 APPENDIX D: Income and Alcohol Preference Chi-Square Test of Independence....17 REFERENCES....18

The Effect of Gender, Age, and Income on Alcohol Preference Mosley

LIST OF TABLES AND FIGURES

Alcohol Sales Percentage from 2007 to 2012.....6 Summary of Drinking Habits for Ages 18 50+.....7 Alcohol Preference by Gender.......10 Alcohol Preference by Age Group..................10 Alcohol Preference by Income Group.....11

Figure 1

Figure 2

Table 1

Table 2

Table 3

The Effect of Gender, Age, and Income on Alcohol Preference Mosley

INTRODUCTION Statement of Problem Research consisting of demographics may have invaluable business implications regarding marketing. Advertising is a fundamental focus of many trades, principally the Moreover, brand awareness is crucial for alcoholic beverage

alcoholic beverage industry.

companies and developing a strong brand is vital to their success. Companies use many factors when assessing which marketing campaigns to choose and they experiment with their strategies on a regular basis (Novak). As a result, demographics are a major emphasis of marketing promotions. Many companies strive to identify their potential consumers age, gender, and income level before determining the proper marketing strategy to acquire the patron. Only when companies have all the information regarding their target market can they obtain and retain their customer. The alcohol industry spends billions of dollars to promote its products; $2.2 billion alone in the United States in 2006 (Moore et al). A trend that needs to be addressed by marketers is that of spending a great sum of money on endorsing a product that is losing consumers. For example, Figure 1 below shows that beer has lost market share between 2007 and 2012 as liquor and wine have gained. Furthermore, beer has steadily lost market share to liquor for each of the last 13 years, with the exception of 2008 (York). Demographic research may also help industries concentrate their promotion dollars on the right products.

The Effect of Gender, Age, and Income on Alcohol Preference Mosley

60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Beer Liquor Wine 2007 2012

Figure 1 Alcohol Sales Percentage from 2007 to 2012 from Emily Bryson York; "Liquor, Wine Continue to Take Share from Beer Sales"; chicagotribune.com, 31 Jan. 2012; Web; 25 Nov. 2012.

Age and Income in Alcohol Advertising Age is a prevalent demographic factor for marketing purposes in determining a consumer profile. However, a consumers age is typically paired with income when shaping promotional strategies. A Gallup poll found that older affluent (an income of $50,000 or higher) adults were among societys heaviest drinkers and were more likely than older non-affluent adults (an income of less than $50,000) to use alcohol; 74% compared to 49%. Interestingly, these

prosperous adults also drank more often than younger wealthy drinkers (Arora and Saad). Figure 2 below shows a comparison of drinking habits for 18 50 years of age and older. A common misconception is that the under 40 age group is the key consumer of alcoholic beverages; this can be realized in viewing the many alcoholic beverage commercials on television.

The Effect of Gender, Age, and Income on Alcohol Preference Mosley

Figure 2 Summary of Drinking Habits for Ages 18 - 50+ from Tommy McCall; Marketing to Older Affluents, Gallup Business Journal, n.d.; Web; 23 Nov. 2012.

Yet, the 45 and older demographic are just as likely as younger drinkers to switch brands and try new products (Arora and Saad). Furthermore, young adults between the ages of 25 and 34 receive the most marketing attention yet only accounted for 23% of overall alcoholic drink consumption whereas people over the age of 45 contributed 39% (Consumer Targeting). It would be advantageous to the alcoholic beverage companies to understand which beverages are purchased more regularly by which age and income level. Gender in Alcohol Advertising Gender is also a significant demographic in the alcoholic beverage industry. Many beer commercials typically feature masculine activities such as men playing sports. Market research has shown that men accounted for 64% of alcoholic drinks consumed and women accounted for

The Effect of Gender, Age, and Income on Alcohol Preference Mosley

36% (Consumer Targeting). The alcoholic beverage industry also typically uses sex appeal to sell their products, yet women respond differently to these advertisements than men (Jones). Beer companies are slowly finding that sex appeal rarely changes consumers preferences (Novak). Moreover, a new alcohol marketing trend has emerged which focuses on lower calorie and lower carbohydrate beverages. Men and women alike have been featured in these ad campaigns. It would be beneficial to the alcoholic beverage companies to understand which beverages are purchased more frequently by which gender, therefore spending the right amount of marketing dollars on the right gender-focused campaigns. The information found in this study may assist marketers in determining if their dollars are being spent wisely on pursuing these specific demographics. Purpose This research was designed to address whether age, gender, and income are justly a major factor in a consumers alcohol preference. The examination implications could assist alcoholic beverage companies in determining if their marketing dollars are best spent on targeting these specific demographics and their presupposed alcoholic beverage choices. Hypothesis The demographics of age, gender, and income are independent of alcohol preference. METHODOLOGY Participants The contributors were 44 males and 58 females for a total of 102 surveys compiled. The

The Effect of Gender, Age, and Income on Alcohol Preference Mosley

individuals measured included graduate students at Southeastern Louisiana University as well as co-workers and acquaintances of the surveyors. The partakers were samples of convenience as they were readily available for inclusion. The respondents were informed via a statement at the top of the questionnaire as to the purpose of the survey, and that the survey was confidential. Study Design Participants were given a four question survey to complete at their leisure; all were completed within minutes and returned thereafter. The questionnaire asked the contributors to select their gender, their age range, their household income range, and their alcohol preference (Appendix A). To simplify the results, the ages were grouped as under 40 and over 40 and the income results were grouped as under $50,000 and over $50,000 in the Chi-Square Test of Independence. The results of each set of variables were analyzed in Excel (Appendices B D). FINDINGS AND DISCUSSION Regarding whether gender had an effect on alcohol preference, it was found to have a significant effect with a p value of 2.564E-8 at the .05 alpha level. The observed frequencies show that considerably more males surveyed preferred beer and liquor and that significantly more females surveyed preferred wine and cocktails (Table 1). Therefore it was concluded that alcohol preference was not independent of the gender of the consumer.

The Effect of Gender, Age, and Income on Alcohol Preference Mosley

Table 1 Alcohol Preference by Gender

GENDER Male Female Total

Beer
22 5 27

Wine
2 29 31

Liquor
10 3 13

Cocktails
6 15 21

None
4 6 10

Total
44 58 102

The study also found that age had an effect on alcohol preference with a p value of 2.212E-3 at the .05 level. Table 2 below shows that the observed frequencies of participants 40 years of age or younger preferred beer and liquor significantly more than those who were 40 years of age or older. Thus it was concluded that alcohol preference was not independent of the age of the consumer.
Table 2 Alcohol Preference by Age Group

AGE Under 40 Over 40 Total

Beer
25 2 27

Wine
17 14 31

Liquor
11 1 12

Cocktails
11 11 22

None
7 3 10

Total
71 31 102

Interestingly, the study showed that income did not have a significant effect on alcohol preference with a p value of .3162 at the .05 level. Therefore it was concluded that the variable of income was independent of alcohol preference. Table 3 below illustrates that individuals surveyed with an income of $50,000 or less preferred almost the same type of alcohol as individuals surveyed with an income of $50,000 or more.

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Table 3 Alcohol Preference by Income Group

INCOME Under $50,000 Over $50,000 Total

Beer
15 11 26

Wine
13 18 31

Liquor
6 6 12

Cocktails
12 11 23

None
8 2 10

Total
54 48 102

Since this survey was that of convenience, future studies regarding the role of age, income, and gender in alcohol preference should utilize a random sample. With a random sample, results may reach beyond the sample and may have implications regarding the population. Subsequently, no correlation was found between income level and alcohol beverage preference. A future study could focus on specific alcohol brands within alcohol type and their possible relation to income. For example, if one prefers beer, do they prefer Budweiser or do they prefer Heineken? This could be tested using the Analysis of Variance between treatment variability to find if there are differences between different brands of beer and demographics. Conversely, within-treatment variability could be used to test a companys different sub-brand options such as Abita Amber, Abita Turbodog, or Abita Purple Haze. A strength of this examination was that an extensive range of incomes and ages were attained. Also, an almost equal number of each gender responded to the questionnaire. Another strength was the survey itself, which was multiple choice. A broad assortment of options was offered for the answers, and the questionnaire was also limited to four short and simple questions. This diminutive length made it easy to obtain the surveys in a timely fashion.

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SUMMARY AND IMPLICATIONS The hypothesis was incorrect for the demographics of age and gender, but was correct for the demographic of income. However, if income doesnt show a connection to alcohol These two

preference then companies should forego grouping age and income together.

demographics should be measured separately. Given that the alcoholic beverage industry spends billions of dollars a year on marketing, it is imperative that the businesses recognize their audience. The marketing ramifications of this study may aid companies in having a better understanding of key demographics and the promotion of their products.

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APPENDIX A The Effect of Gender, Age, and Income on Alcohol Preference

The purpose of this survey is to determine if there is a significant correlation between these three key demographics and alcohol preference. The information collected would be useful in a business environment given its marketing ramifications. This survey is confidential. Please do not put your name on the survey. Please only check one blank per question. 1. What is your gender? ______ Male ______ Female

2. What is your age? ______ 18-21 ______ 22-25 ______ 26-30 ______ 31-40 ______ 41-50 ______ 51-60 ______ 61 or Over

3. What is your household income? ______ Less than $10,000 ______ $10,000 to $30,000 ______ $31,000 to $50,000 ______ $51,000 to $70,000 ______ More than $70,000 13

The Effect of Gender, Age, and Income on Alcohol Preference Mosley

4. What type of alcohol do you prefer? (Please select only one.) ______ Non-Alcoholic Beer or Wine ______ Beer ______ Wine ______ Liquor ______ Cocktails (Mixed Drinks)

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APPENDIX B Gender and Alcohol Preference Chi-Square Test of Independence

OBSERVED FREQUENCIES
ALCOHOL PREFERENCE GENDER Male Female Total Beer 22 5 27 Wine 2 29 31 Liquor 10 3 13 Cocktails 6 15 21 None 4 6 10 Total 44 58 102

EXPECTED FREQUENCIES
ALCOHOL PREFERENCE GENDER Male Female Total Beer 11.6471 15.3529 27 Wine 13.3725 17.6275 31 Liquor 5.6078 7.3922 13 Cocktails 9.0588 11.9412 21 None 4.3137 5.6863 10 Total 44 58 102

p value = 2.564036862994E-08

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APPENDIX C Age and Alcohol Preference Chi-Square Test of Independence

OBSERVED FREQUENCIES
ALCOHOL PREFERENCE AGE Under 40 Over 40 Total Beer 25 2 27 Wine 17 14 31 Liquor 11 1 12 Cocktails 11 11 22 None 7 3 10 Total 71 31 102

EXPECTED FREQUENCIES
ALCOHOL PREFERENCE AGE Under 40 Over 40 Total Beer 18.7941 8.2059 27 Wine 21.5784 9.4216 31 Liquor 8.3529 3.6471 12 Cocktails 15.3137 6.6863 22 None 6.9608 3.0392 10 Total 71 31 102

p value = 2.212387984149E-03

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APPENDIX D Income and Alcohol Preference Chi-Square Test of Independence

OBSERVED FREQUENCIES
ALCOHOL PREFERENCE INCOME Under $50,000 Over $50,000 Total Beer 15 11 26 Wine 13 18 31 Liquor 6 6 12 Cocktails 12 11 23 None 8 2 10 Total 54 48 102

EXPECTED FREQUENCIES
ALCOHOL PREFERENCE INCOME Under $50,000 Over $50,000 Total Beer 13.7647 12.2353 26 Wine 16.4118 14.5882 31 Liquor 6.3529 5.6471 12 Cocktails 12.1765 10.8235 23 None 5.2941 4.7059 10 Total 54 48 102

p value = 0.316279877

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REFERENCES Arora, Raksha, and Lydia Saad. Marketing to Older Affluents. Gallup Business Journal (2012): n. pag. Web. 27 Oct. 2012. Consumer Targeting in Alcoholic Drinks: Effective Marketing and Innovation Strategies by Gender, Age, Price and Occasion. marketresearch.com. 25 Aug. 2010. Web. 01 Nov. 2012. Jones, Sandra C. Beer, Boats and Breasts: Responses to a Controversial Alcohol Advertising Campaign. Faculty of Health and Behavioural Sciences (2005). 77 83. Web. 01 Nov. 2012. Moore, Heather, Rhonda Jones-Webb, Traci Toomey, and Kathleen Lenk. Alcohol Advertising on Billboards, Transit Shelters, and Bus Benches in Inner-city Neighborhoods. business.highbeam.com. Web. 20 Nov. 2012. Novak, Julie A. Alcohol Promotion and the Marketing Industry: Trends, Tactics, and Public Health. apolnet.ca. Association to Reduce Alcohol Promotion in Ontario, 2004. Web. 21 Nov. 2012. York, Emily Bryson. Liquor, Wine Continue to Take Share from Beer Sales. Chicago Tribune Business. Chicago Tribune., 31 Jan. 2012. Web. 20 Nov. 2012.

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