The role of price as a product attribute in the organic food context: An exploration based on actual purchase data

High prices are often quoted as an obstacle to consumer purchase of organic food products. This article investigates the market performance of organic food products at different price levels and whether high price is necessarily a disadvantage for organic food products, especially with regard to generating repeat purchase. Based on analyses of panel purchase data from 2011 in Denmark, the study explores the effects of production method (organic vs. conventional) and price on consumers’ repeat purchase and cross-purchase across four product categories: red meat, chicken, milk and hard cheese. Results show that a high price is a disadvantage for generating repeat purchase of organic food products. Although organic products enjoy higher repeat purchase than conventional products overall, a high price generates less repeat purchase of organic products than a low or a medium price in all product categories; whereas in the case of conventional food products the situation is the reverse. At the same time, the cross-purchase analysis reveals that consumers who buy organic products from the high price tier are less likely to switch to other price tiers than consumers who buy low or medium price organic products (i.e. there is a spillover of high price organic food purchases to other product categories). Implications for pricing strategies for organic food products are discussed.     

An empirical examination of the determinants of honey consumption in Romania

While not much attention has been paid in the international literature to the consumption of premium food products with enhanced quality properties in Central‐Eastern European Countries (CEECs), the present survey aims to investigate consumer behaviour in Romania as regards ‘honey’ as an example of such a product. The research concludes that, despite the changes in eating habits induced by changes in the retail environment, honey remains a popular product, the purchase of which in bulk from producers and in open markets is still the dominant trend. The survey further identifies four main dimensions of honey‐purchasing motivation: medical benefits of its consumption, dietary quality, ethical character of honey and suitability with food consumption lifestyle. Using these dimensions validated by factor analysis, three clusters of honey consumers in Romania emerged through cluster analysis: the common consumers, the younger consumers indifferent towards honey and the enthusiastic consumers, who are also more willing to pay premium prices for the organic type of honey. If the first segment may be the keenest on competitive prices, quality differentiation strategies can target the enthusiastic honey consumers. The distinctive features of Romanian consumers also include a low attention paid to labels, related in a low awareness of the energy content of honey. Quality cues are defined by search attributes of the bulk product (colour, taste, aroma, thickness), rather than credence attributes (warranties, brand name, country‐of‐origin). Marketers targeting this market should be aware of this scepticism towards label information, which necessitates more communication effort to built consumer trust.     

Consumers’ perceptions of organic food attributes and cognitive and affective attitudes as determinants of their purchase intentions toward organic food

The current study investigates how consumers perceive organic food attributes, which in turn influence their utilitarian and hedonic attitudes and intentions to purchase organic food. Specifically, consumers’ perceptions of nutritional content, ecological welfare, and price attributes of organic food have strong effects on utilitarian attitudes as well as hedonic attitudes toward buying organic food, while perceptions of the sensory appeal attribute have a strong effect on hedonic attitudes. Interestingly, consumers’ perceptions of the natural content attribute of organic food are not a significant determinant of the two dimensions of attitude. Lastly, utilitarian and hedonic attitudes play an important and influential role in determining behavioral intentions to purchase organic food. This study raises questions about the lack of a theoretical framework in previous organic food studies. Therefore, a modified S–O–R model is applied to provide theoretical support for organic food research. In addition, this study employs a bi-dimensional approach to attitudes (i.e., utilitarian and hedonic attitudes), contributing to a better understanding of consumers’ expectations and perceptions in their behaviors regarding organic food.     

The influence of reputational concerns on purchase intention of fair-trade foods among young Japanese adults

This study explores whether reputational concerns have an effect on purchase intention for fair-trade food products among Japanese young adults. To manipulate reputation cues, we assessed consumers’ intentions to purchase fair-trade food products under two different experimental situations: the ‘observable’ condition, in which participants’ purchase behaviors were observable by others (N = 84); and the ‘anonymous’ condition, in which participants’ purchase behavior could not be observed by others (N = 106). The effect of six sensory and extrinsic attributes including fair trade, price, country of manufacture, taste characteristics, polyphenol content and caloric content on consumer intentions to purchase chocolate was evaluated using conjoint analysis. Results demonstrated that participants under the observable condition valuated fair trade higher than those under the anonymous condition, whereas the opposite tendency was observed for the valuation of price and caloric content for their overall purchase intention. These phenomena suggest that ethical consumption, such as purchasing fair-trade foods, is influenced not only by individual’s intrinsic motives for ethical issues but also by extrinsic social factors such as reputation-enhancing opportunities.     

How to position ‘mildly sustainable’ products: The joint impact of assortment display and price setting

To tempt consumers towards more sustainable food choices, ‘intermediately’ sustainable products (i.e., in between conventional and organic) have been introduced. This poses the managerial question how to best position this range of products. In an experiment with intermediately sustainable meat products, we show that the choice share of these intermediate products is high when price level and physical display signal a consistent positioning of these products. This implies that the effect of layout depends on the price level at which intermediately sustainable products are offered. When these products are offered at intermediate prices, displaying them in a separate section will increase choice (i.e., unique feature positioning). Yet, when intermediately sustainable products are offered at low prices, a mixed display in which intermediately sustainable and conventional products are dispersed will be more effective in increasing choice for the intermediately sustainable options (i.e., comparative positioning). These results show the importance of assortment display in affecting the sales potential of products, and how the most optimal display in-store depends on price level.     

Target groups for organic wine: The importance of segmentation analysis

In light of low and stagnating market shares of organic wine, there is an ongoing debate about growth potential for organic wine. A recent study revealed that even consumers of organic food did not necessarily purchase organic wine regularly. The aim of this contribution was to analyse the wine preferences of organic food consumers and identify promising new target groups for organic wine. We conducted choice experiments in Germany (N = 600) and analysed the data with mixed logit models and latent class models, revealing interesting differences between the results of the two approaches. While the mixed logit models suggested ‘organic’ was the most important wine attribute, the latent class models challenged this proposition. While three of four consumer segments had a strong preference for organic, only one segment in the red wine model (and no segment in the white wine model) gave organic highest priority. Just like non-organic consumers, many organic food consumers seem to use price or country of origin as the most important quality cue for wine. The comparison between the results of the choice experiments and the participants’ stated normal purchase behaviour suggested there is growth potential for organic wine. Apparently, consumers of organic food would buy more organic wine if their preferred type and variety of conventional wine would be available in organic quality at similar price levels.     

Consumers' preferences for beef in the Spanish region of Extremadura: a study using conjoint analysis

The study of consumers' preferences is of great interest in the beef sector, where the BSE crisis generated deep changes in the basic conditions of demand for meat and in the behaviour of consumers. Previous qualitative research showed that ‘price’, ‘origin’, ‘production system’ and ‘labelling’ were the main attributes affecting preferences for beef in Extremadura (SW Spain). The data were obtained by a survey carried out between February and April 2002 with a sample of 575 regular consumers of beef. Conjoint Analysis has been used to estimate the relative importance of those attributes and to determine the existence of consumer segments with similar preference profiles. Results show that the origin of the product is the most important attribute for the choice of beef, followed by quality labelling, production system and price. Three groups of consumers were identified through cluster analysis, according to their preferences for beef. Copyright © 2005 Society of Chemical Industry     

How are organic food prices affecting consumer behaviour? A review

This article reviews research on consumer behaviour regarding the price of organic food published from January 2000 to December 2013, in order to identify the current state of research and research gaps. The publications were classified into stimulus–response or stimulus–organism–response paradigm based studies. Organism-internal processes were further divided into ‘affective’, ‘cognitive’ and ‘intentional’ processes. Moreover, for a systematic review the categories ‘price elasticity’, ‘price perception and evaluation’, ‘price knowledge’, and ‘willingness-to-pay’ were built. The majority of studies were based on a stimulus–organism–response paradigm. 20 studies in the sample analysed the price elasticity of demand and reported partly contradictory results. There were no studies on affective processes in the sample. A solid body of knowledge exists on the cognitive processes ‘price perception and evaluation’ while very few studies investigate ‘price knowledge’. The majority of studies were concerned with the willingness-to-pay for organic food and yielded mixed and contradictory results. The explanatory power and conclusiveness of research is impaired by weak sampling techniques (e.g., convenience sampling, sampling at few locations) and data collection methods. The improvement of sampling techniques, the increase of comparability of results and the deepening of analyses is recommended.     

Identification and characterization of fluid milk consumer groups

Consumption of fluid milk has steadily declined over the last few decades. Understanding the attributes of fluid milk products that are attractive to specific consumer groups may provide a sound basis for education and marketing to encourage increased dairy consumption and reverse the downward trend. The objective of this study was to identify the attributes of fluid milk that specific consumer groups find attractive and attributes that suggest a higher purchase likelihood. An adaptive choice-based conjoint (ACBC) survey was designed to assess attributes of fluid milk. The ACBC survey included Kano, importance, labeling identification, and beliefs questions to determine the key attributes that dictated consumer purchase and consumption. Self-reported purchase habits and attitudes for organic food products were also collected. Attributes in the ACBC exercise included fat content, package type, shelf life, and label claims. Maximum difference scaling was used to rank the importance of attributes in fluid milk that affected purchase. Maximum difference scaling was also used to rank qualities and issues associated with organic milk that were most motivating for those who identified as organic milk consumers. Results were analyzed by univariate and multivariate statistics. A total of 1,163 fluid milk consumers completed the survey, and of those, 434 were regular purchasers of organic milk. The ideal fluid milk from conjoint analysis was 2% milkfat, organic, packaged in a plastic jug, conventionally pasteurized, and contained no additives or label claims. The belief that “organic milk is healthier” was the most important motivator for purchases of organic milk, followed by the beliefs that “organic milk production encourages ethical treatment of animals” and “organic milk production supports local farms and farmers.” Conjoint importance scores of all fluid milk consumers showed that milkfat content was the most important attribute, followed by flavor, package size, and price. For all milk consumers, designation as organic was ranked as the 8th most important of 14 attributes. Evaluation of these results on both aggregate and individual levels suggest that fluid milk consumers are not a homogeneous consumer group and that underlying consumer groups are led to purchase decisions by specific product features or expectations.     

An attribute prioritization-based segmentation of the Chinese consumer market for fruit juice

Despite the enormous opportunity that the Chinese market provides for exporting companies in the food and beverage industry, little research has considered Chinese consumer decision making processes surrounding these products. This study provides an empirical investigation into how Chinese consumers prioritize extrinsic product attributes (brand, nutrition content claim, ingredient label, shelf-life, price, and manufacturing country) when making their fruit juice purchase decisions. The study illustrates that consumer decision making processes are culturally embedded by presenting a comparison of the study’s findings with the more prevalent Western-based literature on consumer decision making processes.A choice-based conjoint survey was administered to 645 Chinese participants in Hangzhou, China using the internet-based software 1000Minds. Three consumer segments were identified through cluster analysis: Health Conscious, Premium Product, and Long Product Shelf-life. The Health Conscious segment wants natural and nutritious fruit juices that have a well-known brand. The Premium Product segment is willing to pay higher prices for imported fruit juices. Compared to the other two segments, the Long Product Shelf-life segment prefers lower priced and extended shelf-life fruit juices that are more convenient to store and consume. While the three clusters were similar in their preferences for the fruit juice attributes and levels, they differed in the rank order of the attributes. These findings highlight the importance of how extrinsic product attributes are traded off by Chinese consumers when making their fruit juice purchase decisions.The identification of these Chinese consumer segments provides juice manufacturers better knowledge on the market opportunities in China and strategic guidance for effective positioning, packaging, labeling, and pricing of fruit juices. This attribute prioritization-based segmentation for the Chinese consumer market is novel and thus provides strong implications for the fruit juice industry. In addition, this paper also makes a novel academic contribution to the Chinese consumer decision making literature on food and beverage products.     

An analysis of the territorial factors affecting milk purchase in Italy

Numerous international studies have pointed out that consumers are usually willing to pay a premium price for domestic and local food. This paper describes the use of a choice experiment to investigate the willingness to pay (WTP) a premium price for milk while considering three attributes: origin (south Italy, north-centre Italy, or other European Union countries), area of production (mountain or plains), and rearing method (cows grazed or kept in a barn). The data collected were analysed by means of three approaches. First, we used a multinomial logit model to estimate the average premium price for the three attributes considered. Second, an interaction term between price and quantity of milk purchased weekly was introduced into the model. This made it possible to verify whether the quantity purchased can modify the WTP, and the magnitude and significance of the effect. Finally, the latent class method was used to explore the heterogeneity of the preferences. The results suggest that the choice experiment, despite providing important qualitative measures, should be utilised with caution regarding premium price estimates in the analysis of food demand.     

Consumers wine preferences according to purchase occasion: Personal consumption and gift-giving

We tested the hypothesis that individuals may act differently when buying a bottle of wine for themselves than they do when buying wine as a gift. Using a between-subject design, we estimated the differences in consumer preference for these two occasions. We conducted a choice experiment on 618 Italian wine consumers and included the attributes of price, geographical indication (i.e. IGT, DOC, or DOCG), organic claim, and brand (i.e. famous producer or a non-famous producer). By applying an error component random parameters logit model, we detected relevant differences between the two scenarios in terms of the relative importance of the studied attributes. The gift-giving scenario was further investigated using a latent class model, which identified three segments of consumers; we profiled these according to personal attitudes and wine knowledge. Our results show a relevant heterogeneity among consumers’ preferences for the gift-giving scenario, with geographical indication having a low impact and brand and organic claim playing a pivotal role. This study provides relevant insights for winemakers and retailers regarding diversifying marketing strategies.     

The influence of organic production on food quality – research findings,gaps and future challenges

Although several meta‐analysis studies have been published comparing the quality of food derived from organic and non‐organic origin, it is still not clear if food from organic production per se can guarantee product‐related added value to consumers. This paper aims to summarize the status quo in order to identify research gaps and suggest future research challenges. Organic food is described according to a quality model already published. The influence of organic production on food quality is structured in primary production and processing. Furthermore, organic food authentication is discussed. Organic food seems to contain fewer pesticide residues and statistically more selected health‐related compounds such as polyphenols in plant products and polyunsaturated fatty acids in milk and meat products, but the health relevance for consumers is not clear yet. Comparing food from organic origin with so called ‘conventional’ food seems not to be appropriate, because ‘conventional’ is not defined. In organic food quality research a system approach is needed from which systemic markers can be selected. Research on the impact of processing technologies on the quality according to organic principles seems of high relevance, since most of the food is processed. © 2014 Society of Chemical Industry     

Effect of fibre information on consumer willingness to pay for French baguettes

The objective of this study was to assess the impact of nutritional information on the willingness to pay for bread. Four French baguettes were presented to 123 consumers who firstly gave liking scores in three evaluation conditions, and who then gave their maximum price (reservation price) they were ready to pay in two information steps. In the first step, the baguettes were presented without any information about their composition. Following this, half the participants received information about the potential health benefits of fibre. In the second step, two baguettes were presented with a ‘source of fibre’ label. A similar product hierarchy was observed between hedonic scores and reservation prices. In addition, a significant effect was found on the reservation prices when the ‘source of fibre’ label was presented, but no effect was observed when the information concerning the potential health benefits of fibre was given.     

Economic analysis of consumer choices based on rice attributes in the food markets of West Africa—the case of Benin

The focus of this study was to investigate consumer preferences for various attributes of rice marketed in Benin. Consumer choice theory postulates that products are consumed not for themselves, but for the characteristics they possess that satisfy consumers’ greater liking of one attribute over another. In the case of rice, quality attributes, as incentives for both producers and consumers, have important price implications. In this study, we empirically analyzed the relationship between the price paid by consumers for their choice of rice and its attributes in the markets of Benin using hedonic pricing and discrete choice models of demand. We used data collected from rice-consuming households in four major provinces of Benin, in both rural and urban areas, during 2006. The results of this econometric estimation indicated that there was considerable variability in consumer preferences for different rice attributes across the regions studied. Nevertheless, consumers paid a premium price for observable attributes, such as grain size and breakage. In addition, both urban and rural consumers preferred imported and parboiled rice to domestic and raw rice. The study results showed that implicit prices paid by consumers for both domestic and imported rice were based on quality attributes. These findings have important implications for future breeding programs aimed at making domestic rice more competitive with imported rice.     

Impacts of situational factors on process attribute uses for food purchases

Consumer buying decisions for food reflect considerations about food production.However, consumers’ interest in process-related product characteristics does not always translate into buying intentions. The present study investigates how situational factors affect the use of process-related considerations when consumers select food products. A conjoint study provides estimated part worth utilities for product alternatives that differ on five product attributes (including four process-related factors) across two products (bread and sports drink) that differ on perceived naturalness. The investigation of the utilities of the process-related attributes features both an internal (priming of environmental values/value centrality) and an external (time pressure) situational factor. The results indicate that the importance of process-related attributes is product specific and also depends on situational factors.     

How does animal welfare taste? Combining sensory and choice experiments to evaluate willingness to pay for animal welfare pork

Although consumers show considerable interest in higher animal welfare, the market share for such products remains low. To provide consumers with a choice regarding different levels of animal welfare, animal welfare labels have been developed. Such product options are intended to serve as intermediate products between conventional products and more expensive organic options that are often associated with high animal welfare standards. This study aims to evaluate whether information about animal welfare practices affects consumers’ liking and willingness to pay (WTP) for a pork product. Using a within-subject design with three evaluation rounds (blind, expectation, and full information) we combine hedonic liking where subjects rate four different types of ham with a choice experiment. Hams differ in the animal husbandry conditions during the rearing and fattening process: conventional rearing, a specific treatment of mother sows, a general animal welfare label, and organic production. Results show an effect of information on consumers’ sensory evaluation of the different products, although products were evaluated to be similar in the blind condition. Consumers rated the organic product higher than those with animal welfare labels while the conventional option had the lowest liking scores. Results from the choice experiment concur with the hedonic rating. Estimates indicate that consumers are willing to pay more for ham bearing a general animal welfare or organic label in the expectation and full information condition. Consequently, information regarding animal welfare affects both consumers’ hedonic liking and WTP for ham.     

The order of tasting and information presentation in an experimental auction matters

Experimental auctions are used to determine the price consumers are willing to pay for products with specific attributes, including sensory attributes. Previous experimental auctions have demonstrated that taste is an important factor in determining panelist bid price. Those auctions generally conducted the tasting after providing the explicit product information. Our objective was to determine the relative difference in panelist bidding prices between tasting apple samples before verses after observing displays containing explicit information about the apples. We chose four apple varieties for this study: Honeycrisp, Braeburn, Pink Lady and Red Delicious. Each variety of apple had been grown under two conditions: conventional and organic. A total of 86 panelists participated in one of two information scenarios. Panelists in the first scenario first tasted the apples and placed individual bids for one pound of each of the apple samples. They then viewed information displays (apple name and growing condition) of the apples and placed a second bid. The process was reversed for the panelists in the second scenario in that the information was given before the tasting. When the sensory properties of products were presented before other product information, the impact of the explicit product information was minimized. When product information was presented before the sensory evaluation, it biased the bid prices. To better understand the influence of both the implicit sensory properties and the explicit product information, presentation orders of both types of information should be balanced in an experimental auction.     

How important intrinsic and extrinsic product attributes affect purchase decision

We simultaneously evaluated intrinsic and extrinsic product attributes by means of a choice-based conjoint experiment. A sample of 621 consumers tasted three soft drinks and chose the product most preferred. Test products were systematically varied across choice sets with respect to sweetening system, calorie reduction label, price and brand. Choice data and data on consumption patterns, attitudes and socio-demographics were analysed by a conditional logit model. This approach enabled us to model product choice as a function of one intrinsic and three extrinsic attributes and of consumer characteristics. The latter permits market segmentation of preference data. The main results showed that consumers’ preferences of sweetening systems are heavily dependent on brand information. Simulations of market shares based on the total sample reveal the preference of sugar over sweetening systems. However, in some specific consumer segments, sugar is not significantly superior to sweetening systems—indicating how useful market segmentation can be in sensory analysis.