Predicting Consumers' Preferences for and Likely Buying of Local and Organic Produce: Results of a Choice Experiment

Data from consumer intercept surveying and a hypothetical choice experiment conducted in 11 Albuquerque, New Mexico, USA grocery stores were used to predict consumers' preferences for and likely buying of local and organic produce. Results indicate that consumers strongly prefer produce with local and/or organic attributes, but are generally less likely to buy produce with these attributes. Consumers' sociodemographic characteristics, knowledge of different produce types, distance traveled for food shopping, and metro-area location affected preferences and likely buying behavior. These results will help local farmers in New Mexico and other states improve their competitiveness, preserve agricultural traditions, and contribute to economic development.     

Per piece or per kilogram? Default-unit effects in retailing

Retailers offer a variety of products either per unit or per weight. Depending on the product category, consumers may find either one of these pricing strategies typical and the default. Especially online retailers are increasingly using unit-based prices, which is the non-default for many produce categories. So far, consequences resulting from non-default pricing strategies are unclear. This study addresses the questions of whether and how pricing strategies affect consumer behavior. In a series of four experiments, we show that default pricing strategies exist in the marketplace and that consumers prefer products that retailers offer using default pricing strategies. We also demonstrate that this behavior is due to uncertainty issues when assessing prices in non-default pricing strategies. Furthermore, we elaborate on the influence of weight expectations and explicitly stated weight information on this default-unit effect. The findings suggest that retailers can mitigate negative effects resulting from non-default pricing strategies by providing weight information.     

Quality Factors Influencing Consumer Demand for Small Fruit by Focus Group and Sensory Test

ABSTRACT

The market of berries is a niche of high value in Italy. Small fruit’s healthy properties are well known in the international market, but little is known about the reason for a low commercialization rate of fresh small fruit in Italy. The objective of this study was to assess consumer preferences in Italy for selected berry species. Moreover, the study aims to identify the relevant attributes of berries that affect the demand for this produce according to consumers and to compare these attributes. We assessed relevant attributes affecting the demand for fresh berries for different consumers’ profiles and compared berries’ attributes rankings. The results reveal high concordance between blackberries and raspberries; price is the attribute that constrains more purchases because it is deemed too high. Consumers prefer small fruit because of the rising interest in their nutraceutical value, and they have a higher willingness to pay because of this important attribute.     

Experiential product attributes and preferences for new products: The role of processing fluency

This study shows how experiential product attributes that are part of the design of new products can create compelling consumer experiences. Following processing-fluency theory, when consumers attend to experiential attributes (sensory or affective), they should process them fluently (i.e., spontaneously and with little effort); however, consumers should process functional attributes always deliberately, irrespective of whether or not they attend to them. An experiment testing the fluency hypothesis confirms that the processing of experiential attributes, but not functional attributes, depends on attention focus. When consumers focus their attention on specific experiential features, products with experiential attributes are evaluated more positively. In contrast, the processing of functional attributes does not depend on attention focus. Further confirming the fluency hypothesis, the experiment also shows that presentation duration does not affect the processing of experiential attributes but does affect the processing of functional attributes. The authors discuss how marketers can use experiential product design in market segmentation and innovation.     

The market value for product attribute improvements under price personalization

Personalization of the marketing mix is a topic of much interest to marketing academics and practitioners. Using discrete choice demand theory, we investigate the aggregate market value for product attribute improvements when firms are engaged in personalized pricing. Our results provide a theoretically grounded rule for how to aggregate consumer valuations to assess the overall profitability of attribute improvements under price personalization. Under common pricing, each consumer contributes the same margin. Profitability of an attribute improvement is thus driven by inducing more consumers to buy. Consumers with high choice probabilities are given less weight in the market valuation under common pricing as they are less responsive to attribute improvements. Under personalized pricing, profitability of an attribute improvement is driven by extraction of consumer surplus from high valuation consumers. Consumers with higher valuations, and consequently higher choice probabilities, are given more weight in the market valuation under personalized pricing. Since individual consumers play a more central role in the market valuation under personalized pricing, estimation of consumer-level valuations is of increased importance. Under common pricing, the market valuation for an attribute improvement is robust to extreme estimates of the consumer-level valuations. Through our theoretical and empirical analyses, we demonstrate that this robustness does not hold under personalized pricing.     

The Korean versus American marketplace: Consumer reactions to foreign products

The Republic of Korea recently became one of the member countries of the Organization of Economic Cooperation and Development (OECD). Such developed-nation status requires Korea to open its consumer goods and financial markets. As a more open Korean market becomes increasingly attractive to foreign manufacturers and investors, it is critical for foreign marketers to understand how Korean consumers perceive and evaluate imported goods. This study examines how Koreans in comparison with Americans react to foreign-made products. The results of the study show that both Korean and U.S. consumers, in general, relied heavily on specific intrinsic attributes of products as the basis for their evaluations of the product quality. Interestingly, Koreans considered country-of-manufacture information as equally important in this situation. However, when they determined their purchase intentions, neither Koreans nor Americans valued country labels of the products; they again used product attribute information. The implications of the results for foreign marketers in Korea are discussed. © 1998 John Wiley & Sons, Inc.     

Everyday “low price” or everyday “value”? The interactive effects of framing and construal level on consumer purchase intentions

Academic literature uses the term “everyday low price” (EDLP) when referring to a pricing strategy that offers relatively stable, low prices across a wide assortment of product categories. However, in real-world situations, many brands and retailers opt to use a different term – “everyday value” (EDV). Do consumers differentially evaluate such framings of the same pricing strategy? The present research draws upon construal level theory and demonstrates – across two experimental studies – that EDV (vs. EDLP) framing is more effective among consumers with high (but not low) construal levels. This effect is mediated by perceived benefit such that consumers with high construal levels derive higher levels of perceived benefit when evaluating a product promoted with an EDV (vs. EDLP) framing. The findings of this research can be useful for marketers and retailers in promoting and framing the EDLP (or EDV) pricing strategies in their advertising and marketing communications.     

Menu price endings that communicate value and quality

This paper investigates the extent to which restaurant marketers use the price endings .00 and .09 to communicate quality and value images, and whether consumers use those price endings as information cues when choosing where to dine out. The experimental data shows that marketers probably rely on price cues and that consumers use those cues. Moreover, many other researchers have found that there is a perceived relationship between prices ending in 0 and overall quality, and prices ending in 9 and overall value. This paper discusses three theories that might explain why consumers associate the price endings 0 and 9 with quality and value: the Schemer Schema Intuitive theory, the Persuasion Knowledge Model, and signaling theory. Those theories suggest that consumers learn from the behavior of marketers and that consumers use their intuition, persuasion knowledge, and coping behavior to interpret, evaluate, and adapt to the marketers' pricing practices.     

Pricing Experience Goods in Information Good Markets: The Case of eBusiness Service Providers

We study the pricing strategies of firms providing a service in experience good markets with switching costs. Using data on vendors providing “hosting and related services” at an early stage of the market, we test for pricing distortions that follow from oligopolistic competition with quality uncertainty and switching costs. We find that firms with a brand name charge a premium for their product – leveraging the reputation accumulated in closely related markets. As the theoretical literature suggests, we also find that the type of pricing distortions along the product line depends on consumers’ expectations about quality. If consumers underestimate the quality of the product, firms behave as if they discount introductory contracts in order to build trust, and later on markup upgraded contract. In contrast, firms that offer a quality level that is lower than consumers’ expectations markup initial contracts while discounting upgraded ones.     

The effects of traffic light labels and involvement on consumer choices for food and financial products

Traffic light (TL) labels that inform consumers regarding product safety have received increasing attention in different fields. Behind the background of behavioural economics, this paper presents the results of a split‐sample choice experiment conducted in Germany to evaluate the impact of TL labelling on purchases of food and financial products. We hypothesize that consumers experience different levels of involvement with these two types of products, leading to different recommendations regarding the use of TLs. The results show that TLs affect consumer purchases of both product groups by focusing their attention on specific product attributes. For food, whereas the low‐fat attribute has no significant impact on food choices that do not include TLs, this attribute has a positive impact on choices once it is signalled with a TL label. The positive evaluation of the organic production attribute of a food product without a TL decreases when the same product is labelled with a TL. In the case of financial products, TLs significantly reinforce the impact of all characteristics on choice probability. TLs also generate a halo effect with regard to return variance. Although consumers demonstrate different levels of involvement for the two types of products, involvement does not always impact the evaluation of attributes. Compared with less involved consumers, more involved consumers exhibit more heterogeneous evaluations of the return variability attribute in the case of the financial product and the organic attribute in the case of the food product.     

Currency Substitution and Price Endings: Right Digit Effect

ABSTRACT

The strategic manipulation of prices. rightmost digits has been a tactic used by retailers in the western world for decades. By studying the internationalization of pricing tactics in a global economy, our research adds a much needed contribution to the literature of price endings and pricing tactics in global markets. We find that at lower price levels, consumers exposed to a 99 ending price in a currency substitution market are more likely to purchase the product compared to consumers in the US market. At higher price levels, on the other hand, consumers in either market situation exhibit no change in purchase intentions. Thus, the 99 ending tactic has no effect on consumers when the product is expensive. The use of the right digit effect by managers in a currency substitution/ dollarized economy as a way of persuading consumers to buy is still likely to be more successful compared to the USA market. As such, firms in a dollarized economy should structure their pricing strategies while taking into consideration the type of product they are offering and the consumer market they are dealing with.     

National versus private brand: A regulatory focus perspective

Why do consumers choose a private versus national brand? A between-subjects factorial design was used to address this question in two product categories: shampoo and athletic shoes. Three determining factors were used—regulatory focus: promotion versus prevention; brand types: national versus private; and attribute framing: hedonic versus utilitarian—to predict consumer attitude towards the brand, its ad, and purchase intention. The results provide support for the interactions between regulatory focus and attribute framing for shampoo, and between regulatory focus and brand types for shoes. When exposed to shampoo ads, promotion focused consumers have a more positive attitude toward the ad and a higher purchase intention if the ad features utilitarian rather than hedonic attributes. Further, both promotion and prevention focused consumers prefer national brands of shoes to private labels. One possible explanation may lie in private versus public consumption of shampoo and shoes.     

Too close to be similar: Product and price competition in retail gasoline markets

We examine how product and pricing decisions of retail gasoline stations depend on local market demographics and the degree of competitive intensity in the market. We are able to shed light on the observed empirical phenomenon that proximate gasoline stations price very similarly in some markets, but very differently in other markets. Our analysis of product design and price competition between firms integrates two critical dimensions of heterogeneity across consumers: Consumers differ in their locations and in their travel costs, as in models of horizontal differentiation. They also differ in their relative preference or valuations for product quality dimensions, in terms of the offered station services (such as pay-at-pump, number of service bays or other added services), as in models of vertical differentiation. We find that the degree of local competitive intensity and the dispersion in consumer incomes are sufficient to explain variations in the product and pricing choices of competing firms. Closely located retailers who face sufficient income dispersion across consumers in a local market may differentiate on product design and pricing strategies. In contrast, retailers that are farther apart from each other may adopt similar product design and pricing strategies if the market is relatively homogeneous on income. Using empirical survey data on prices and station characteristics gathered across 724 gasoline stations in the St. Louis metropolitan area, and employing a multivariate logit model that predicts the joint probability of stations within a local market differentiating on product design and pricing strategies as a function of market demographics and local competitive intensity, we find strong support for the central implications of the theory.

Local and/or organic: a study on consumer preferences for organic food and food from different origins

This paper gives a deeper insight into consumer preferences for different food products of varying place of origin (i.e. local, Germany, neighboring country, non‐EU country) and production practices (i.e. organic vs. non‐organic). Consumer surveys combined with choice experiments were conducted with 641 consumers in eight German regions. Mixed logit models were estimated to draw conclusions on consumers’ preferences for different product attributes. The Stimulus‐Organism‐Response model was applied to theoretically frame the key findings. Results reveal that consumers prefer locally produced food to organic food. However, conclusions on consumers’ preferences should not be generalized as they vary depending on product type and consumers’ place of residence. When looking at the willingness‐to‐pay estimates for ‘organic’ and ‘local’ while distinguishing among consumers from different regions of Germany, results indicate that consumers living in rural areas and consumers living in the eastern part of Germany are less willing to pay a premium for organic products than urban consumers and consumers from other parts of Germany. As preferences for origin attributes and organic production vary between different food products and in different regions of Germany, market actors should design marketing activities accordingly. This study adds to the international research on consumers’ preferences for organic and/or local food. The results provide better insights into preference structures, as more than one product has been included and surveys were conducted in different regions across Germany.     

The Impact of Violent Content on Pricing of Media Products

Although considerable research exists on the impact of exposure to violence on individual and group behavior, existing research has not examined how violent media are valued by consumers, specifically as it relates to the pricing and promotion of media products. In this study a total of 960 monthly price observations for video games and DVD movies were collected. Pricing data for the month of product launch as well as the months following the launch were compiled and subjected to ANOVA and regression analyses, to determine the role of violent content on both new and pre-owned prices. Consistent with the theoretical framework presented, the results indicate that violence can systematically impact prices, but the impact depends on the medium. In the video game market violent content contributes to a faster rate of price depletion, while in the DVD market it helps new product prices appreciate post-launch. The article concludes with a discussion of the implications of the findings for managers, public policy advocates, and researchers.     

Farmers' markets: consuming local rural produce

Marketing food directly from producers to consumers, so circumventing the ‘middlemen’ in the food supply chain, has many potential benefits. For consumers, direct marketing initiatives are providing people with locally grown, fresh, healthy and, in many cases, organic food at affordable prices. Through buying locally grown produce, consumers are giving their support to local producers as well as helping to revitalize rural economies. Producers benefit through retaining more of the value of their produce, which can help them survive through the current crisis in UK farming. There are also environmental benefits. Creating markets where people can buy produce from local farmers and growers reduces the distance that food travels between producers and consumers, which in turn decreases global environmental pollution. One direct marketing scheme – the farmers’ market – has proved to be particularly popular with local people, producers and the local councils, organizations and institutions who are involved in setting them up. This paper focuses on one such market, the Stour Valley Farmers' Market, which commenced trading on 20th June 1999. Customers who attended the first three of these monthly markets were interviewed to investigate the reasons for their attendance at the market, and their attitudes towards a number of food issues including organic and genetically modified food, local and seasonal food and concerns they may have over the way their food is produced. The research has shown that most customers visited the markets initially out of curiosity, although some attended specifically to buy healthy fresh foods. The vast majority of interviewees expressed a preference for food which is organically grown and free from genetic modification. Organic foods are generally perceived to be healthier and more flavoursome. When buying fresh foods, interviewees stated the importance of quality and freshness in their choice of produce.     

关于国内品牌服装价格乱象的思考

在市场竞争中,服装企业除了要提高产品质量,选择合理的分销渠道,还要制定合理的价格。在分析当前市场服装定价畸形等乱象的基础上,提出服装定价应随"市"而变,顺应消费者的需求变化,才能在激烈的市场竞争中立于不败之地。