Credence Attributes Research Articles

Quality signaling through certification in developing countries

This paper studies how signaling the credence attributes of consumer goods distorts their market equilibrium in developing countries. Costs of certification, sunk in order to achieve credibility, play a key role in producing an oligopolistic market, leading to high prices that form a barrier for consumers in the South. To lower the cost, certification is better achieved by a single independent body which can be financed either by end consumers, through a fee, or by public subsidies. The paper identifies the conditions under which each funding mechanism is most efficient, taking into account the government's budget constraint. The theoretical analysis is motivated with reference to agricultural seed certification.

The Importance of Consumer Trust for the Emergence of a Market for Organic Food: The Case of Thailand

The organic food market in Thailand is still at an early stage of development, only about 0.1% of the domestic food market. In Bangkok and a few other big cities, organic food is now available in specialty stores and in upscale supermarket chains, at about twice the price of conventional mass-produced agricultural products. Hence, only urban, well-educated, better-off families have access to and can afford organic food. Many consumers fear being cheated when buying “green” products, but there is a lack of research on the role of trust for the adoption of new “green” products. In Thai culture, there is a strong aversion against losing face, which might be an impediment for introducing new premium-priced products with credence attributes. A related norm is to be kreng-jai (not causing inconvenience or discomfort) to others, especially respectable persons. Most Thai people would disregard lack of firm evidence in order to achieve smooth relationships. In this paper, the cultural influence of trust on consumer adoption of organic food in Thailand is explored by means of a mixture of qualitative and quantitative methods. Data were collected by means of two focus groups with consumers, ten depth interviews (minimum one hour long) with key stakeholders and a mall-intercept survey outside four supermarkets in Bangkok that sell organic food. Participants were screened for basic knowledge and awareness of organic food. The interviews and the survey study revealed that although most participants were aware of organic food, most of them could not explain the details of its qualifying characteristics or differentiate it from the other “safe” options. Thai consumers’ attitudes towards buying organic food primarily depend on how healthy and environmentally friendly they believe organic food is. In the qualitative interviews, many people referred to cancer prevention and a common statement was that we are surrounded by toxic influences in everyday life. Hence, they would like to find better alternatives, if possible. The intention to buy organic food depends mostly on personal preferences, but with a considerable influence from perceived social expectations as well. Consistent with the latter, many participants in the qualitative interviews made reference to the need to take good care of one’s family or being looked after by one’s parents who prefer the healthier food options. Regression analysis shows a strong relationship between behavioral intention and buying behavior regarding organic food. After controlling for buying intentions, mistrust in the authenticity of food sold as organic food has a significant negative impact on self-reported buying behavior. This is consistent with many non-buyers who participated in the qualitative interviews and expressed positive attitudes towards organic food refusing to pay a “stupidity fee” for an illusory premium.

Marketing Placebo Effects – From Behavioral Effects to Behavior Change?

Abstract Food decisions occur very frequently and are influenced by a variety of individual as well as contextual factors. Physical product attributes, including for example, caloric density, water content and sweetness are important drivers of food choice and preferences. However, food products are usually not evaluated solely based on their nutritional content. In addition, most products are packaged and carry abstract attributes, such as quality claims, and brand names. Critically, these product attributes, not products attributes also influence food consumption, reported consumption enjoyment, and product demand. A variety of these marketing actions were shown to alter consumption experiences of otherwise identical products, inducing a so-called marketing placebo effect (MPE). Here, we review studies providing insights into the various behavioral and neural processes underlying the response to these contextual marketing cues. An extensive amount of studies has shown impressive, sometimes peculiar and also disquieting effects of branding, logos, labels and prices on behavioral measures. We will illustrate the plethora of affected behaviors, ranging from increased taste pleasantness ratings for higher-priced wines to enhanced cognitive performance after drinking a higher-priced energy drink, compared to the identical lower-priced counterparts. Credence attributes, such as organic or social sustainability labels, have been gaining relevance in many industrialized countries, and influence product demand and consumption experience. We will therefore introduce studies that systematically investigated the effects of credence claims, elucidate possible mechanisms, and emphasize the negative consequences when misusing such claims. As children are an important and vulnerable target group for marketing actions, we will also specifically present studies conducted in children. These studies highlight the influence of marketing actions on children’s taste perception, product demand, and effort to obtain a certain product. We will shortly introduce the neurobiology of food choices, and present suggested processes underlying MPEs. Converging evidence confirms that MPEs are not a mere result of demand effects, but that they influence the neural responses to products down to a primary somatosensory level. We will show that marketing claims are very effective in influencing expectations and subsequent consumption experience. Therefore, we suggest that public policy interventions may build upon MPE research, and we will provide evidence for this supposition. Throughout this review, we present insights from a variety of different disciplines, including marketing, psychology, neuroscience and nutrition science. Albeit far from exhaustive, this non-systematic review aims at providing a joint perspective from various fields, highlighting that future research endeavor is certainly auspicious.

Montasio cheese liking as affected by information about cows breed and rearing system.

23±2·2 points on Labelled Affective Magnitude scale, P>0·05), it was possible to identifying consumers' clusters with differential liking for the two types of Montasio PDO, that were characterised by different physico-chemical properties. Consumers express a high EL for ISMC (38±2·6 points) and even more for ALP-ISMC (61±2·5 points). The AL of ISMC (35±2·1 points) was similar and statistically not different from the EL (complete assimilation of information about breed). For ALP-ISMC the assimilation was complete for consumers (29%) who have expressed a positive PL for it, at least twice as much than ISMC. For the rest of consumers, both information and intrinsic properties play a significant role in the AL of the pasture-derived cheese.

Meat consumption: Trends and quality matters

This paper uses quality theory to identify opportunities for the meat sector that are consistent with trends in meat consumption. Meat consumption has increased and is likely to continue into the future. Growth is largely driven by white meats, with poultry in particular of increasing importance globally. The influence of factors such as income and price is likely decline over time so that other factors, such as quality, will become more important. Quality is complex and consumers' quality expectations may not align with experienced quality due to misconception of certain intrinsic cues. Establishing relevant and effective cues, based on extrinsic and credence attributes, could offer advantage on the marketplace. The use of extrinsic cues can help convey quality characteristics for eating quality, but also for more abstract attributes that reflect individual consumer concerns e.g. health/nutrition, and collective concerns, e.g. sustainability. However, attributes are not of equal value to all consumers. Thus consumer segmentation and production differentiation is needed.

Disentangling direct and indirect effects of credence labels

Purpose – The purpose of this paper is to disentangle the direct and indirect effects of three credence labels (Australian, animal welfare and grass-fed) on US consumer attitudes toward buying beef steaks. Furthermore, it explores the impact of consumer attribute knowledge, usage frequency, education and opinion strength on the magnitude of direct and indirect effects. Design/methodology/approach – Data are collected through an online experiment with 460 US consumers and analyzed with path modeling. Findings – The Australian label generates a 86 percent negative direct effect vs a 14 percent negative indirect effect on consumer attitudes, which means that US consumers do not make strong inferences to form their attitudes toward buying Australian beef. The animal welfare label generates 50 percent direct and 50 percent indirect effects. The grass-fed label generates only indirect effects (100 percent). The higher consumer education, attribute knowledge, usage frequency, education and opinion strength, the weaker are the indirect effects of credence labels. Research limitations/implications – The study focusses on consumers in one country (USA), one product (beef steak) and one label across three attributes, therefore generalization of results is limited. Practical implications – The study offers a tool to agribusiness managers as well as to policy makers, NGOs and consumer groups to design and assess the effectiveness of communication campaigns attempting to strengthen (or weaken) consumer inferences and attitudes relative to credence labels. Originality/value – Despite the wide literature on consumer inferences based on credence labels, this is the first study that quantitatively disentangles the complex set of inferential effects generated by credence labels and explores common relationships across multiple credence attributes.

Study of consumers’ behavior for non-vegetarian products in emerging market of India

Purpose – The purpose of this paper is to understand non-vegetarian food consumption behavior, and factors affecting the same of the consumers of middle-sized market, where organized retailing is still at infancy. Design/methodology/approach – A total of 182 households of two middle-sized cities of India were personally surveyed with a structured questionnaire. Simple statistical analysis such as frequency distribution, factor analysis and analysis of variance, logit regression were carried out to infer the required information. Findings – Although an important constituent of the food, for most the consumers, purchase of non-vegetarian products were weekly, well planned, and family affairs. Assured good quality, followed by the meat preparation in front of the customers’ eye emerged important market attributes for selecting the store by the consumers. The study revealed that consumers were mainly dependent on search and credence attributes of the product for non-vegetarian food purchase decisions. Research limitations/implications – This paper analyses non-vegetarian food consumption food behavior of those customers, for whom non-vegetarian food is still considered as special food, and who belong to middle-sized cities where organized food retailing has just started. Originality/value – The subject is relatively less researched in emerging markets where organized food retail is still at infancy, and where non-vegetarian foods are considered special.

Beef Credence Attributes: Implications of Substitution Effects on Consumers’ WTP

AbstractConsumers’ food choices are influenced by a wide variety of credence attributes, but the food industry faces problems assessing whether the price premiums that consumers are willing to pay for these attributes will be sufficient to offset higher production costs. In this context, consumers’ willingness to pay (WTP) for safer, cleaner and animal friendlier beef was investigated through a choice experiment. The relative importance of WTP for these attributes shows that consumers place the highest values on food safety, followed by animal welfare and finally environmental protection. WTP for different combinations of the three attributes cannot be obtained by independent valuation and summation due to the presence of significant substitution relationships. However, some suggestions for the relationships between these attributes can be proposed through an after‐survey analytical solution. The bias involved in separately valuing closely related attributes can potentially jeopardise the success of a differentiation strategy.

Premium Potential for Geographically Labeled, Differentiated Meat Products

Growing consumer demand for local foods and products grown under specialty production systems provides livestock producers with the opportunity to increase profits and reduce variability through production of high-value finished meat products, integration of additional species, and targeted marketing efforts. This study examines consumer preferences and willingness to purchase and pay premiums for origin-labeled differentiated beef, pork, and lamb products through a mail survey of Nevada residents. Logit model results show important differences in consumer preferences across meat products. Pricing premiums for differentiated pork and lamb products ranged from 11 to 15 percent, while those for beef products ranged from 22 to 40 percent. Additionally, premiums were higher for superior meat cuts. Product appearance attributes such as marbling, texture, and brand had a significant impact on consumer willingness to pay for all products, while product credence attributes, such as production method and origin, only had a significant impact on consumer willingness to pay for commonly known beef products. Target consumers for local differentiated pork and lamb products include higher-income, white married adults with children. Target consumers for beef products include higher-income, younger white adults. Study results show the importance of targeted consumer marketing for less commonly consumed products, such as lamb. Including information on the health benefits of specialized production methods in marketing materials would also be useful, especially if targeting seniors and ethnic groups.

Product Differentiation with Credence Attributes and Private Labels: The Case of Whitefish in UK Supermarkets

AbstractThe retail market for seafood is dynamic with substantial competition both amongst retailers and between private labels and national brands. New product attributes are added in attempts to differentiate products and to attract consumers. Credence attributes, in particular those related to eco‐labels and fishing method, have become more common. But little is known about how these and other credence attributes are valued in the retail market. In addition, little is known about price differences between private labels. To estimate the value of these attributes, weekly in‐store observations of selected frozen whitefish products were conducted in seven UK retail chains in the city of Glasgow. An estimated hedonic model shows a substantial price premium for fishing method (line‐caught), a premium for both home (Scottish) and non‐home country of origin (Icelandic) and a premium for the Marine Stewardship Council eco‐label. An uncertified eco‐label owned by a large seafood manufacturer leads to reduced price. The study also reveals substantial price differences between private labels for whitefish. The results contribute new insights regarding opportunities for differentiation by credence attributes which may lead to more sustainable and effective resource use along the value chain for frozen whitefish.

Quality disclosure and certification in the motorcycle industry

This paper studies the practise of quality disclosure and quality certification of sellers and experts in the Italian motorcycle industry between 2007 and 2010. Motorcycles are a combination of search, experience and credence attributes and consumers cannot observe product quality perfectly. Empirical analysis shows that the vertical and horizontal characteristics of motorcycles do not have a clear impact on the sellers’ decisions to disclose product quality. At the same time, specialist journals do not favour any specific motorcycle category when they choose which model to test. With respect to the results of the tests, the quality disclosed by motorcycle companies is systematically biased upward, but only slightly. On the whole, market efficiency is not threatened by asymmetric information and credence attributes.

Service Brand Equity: Cross-Sectional Analysis of Four Service Schemes in Malaysia

It has been noted in the literature, service brand is considered to be one of the most discussed in the service industry. Because service is dominated by experience and credence attributes; therefore an extrinsic cue like brand may help to reduce customers’ purchase risk and optimize their cognitive processing abilities towards the service. One of the emerging service brand concepts that used extensively by marketing reseachers is service brand equity. However, there is limited interest looking at the broader application of service brand equity concept across different service categories. This is important to provide service marketers with useful and broader managerial insights in order to establish greater brand managerial sophistication in marketing the services. Hence, the aim of this research is to determine the dimensions of a successful branding strategy of services, to note each specific service sectors requirement, and its differences. The survey method is used in this study. The findings showed that different service category such as health service, retail, hotel and banking in Malaysia posited different dimension of service brand equity. This tends to suggest that, although service brand equity concept provides a significant description of how to brand a service; different services require different approach of branding process. Thus, this may help brand managers to prioritize and allocate which brand equity dimensions is suitable for their service. The principal contribution of the study is that it provides evidence for the validity of service brand equity used in various service contexts.

An Examination of the Credence Attributes of an Audit

SYNOPSIS: An audit consists of two main components: (1) the assessment of risk, and (2) the planning and execution of audit procedures. Both activities require a great deal of professional judgment. In this sense, the auditor is an expert who is best positioned to assess the risk and to conduct the audit in accordance with professional auditing standards. We use a simple decision-making framework to illustrate an auditor's possible strategies when an auditee cannot directly determine the effort level required to conduct an audit appropriately. We discuss and compare three economic perspectives for the audit: search goods, experience goods, and credence goods. Based on the economic theory of credence goods, we predict that a seller has incentives to act strategically when buyers are faced with considerable uncertainties relating to a service they purchase. Specifically, we argue that an auditor might have incentives to (1) under-audit, (2) over-audit, or (3) overcharge. These strategic actions have important implications for audit quality, efficiency, and regulation. We also discuss the professional and institutional arrangements that serve to limit the strategic behavior of auditors. Finally, we discuss previous empirical and behavioral audit evidence in the context of the credence aspects of an audit.

Determinants of brand equity for credence goods: Consumers' preference for country origin, perceived value and food safety

Food safety is an important credence attribute that is increasingly being emphasized by the food industry, regulatory bodies and the consumers around the world. Consumers cannot predict ex ante performance of the product based on the credence attributes due to information asymmetry, and they need a signal that they can trust in purchasing a food product with high credence attributes. Consumers are likely to use a brand name as a surrogate of the quality and the safety guarantee in purchasing food products with credence attributes. An effective brand management appears to be a major prerequisite for the creation of superior customer value (i.e. brand equity) and successful positioning of credence goods. This study empirically validates four determinant conceptualization of brand equity for credence goods by utilizing the Latent Variable Structural Equation Modeling (LVSE). Findings support the four factor model of brand equity for credence goods. The main objective of this study is to illustrate how consumers place value on major product cues in making purchasing decision of credence products. The findings show that brand loyalty and attribute based components (i.e. perceived value) appears to have the dominant role in determining a brand’s equity.  

Abstraction and product categories as explanatory variables for food consumption

This study sets out to explore variation in the consumer choice structure in relation to three types of products with different levels of search, experience and credence attributes. The decision structures of rice, wine and functional food (experience, search and credence products) consumers were explored by means of laddering. The results suggest the presence of an emotional component in foods that increases in complexity (becomes more abstract) with the number of credence attributes. The findings recommend adjusting the complexity of advertising campaigns and product positioning to the type of product being promoted.

Who are the locavores?

PurposeThis research aims to develop a behaviorally based definition of “locavores”, i.e. a segment of a population that purchases locally grown produce. It describes the locavore segment on a set of attributes representative of those typically used for market segmentation and contrasts the locavore segment with a non‐locavore segment to estimate the impact value of local production over organic production. This paper operationalizes the concept in terms of reported buying behavior for fresh produce. A questionnaire administered to adult primary household food shoppers and residents of a US state included attribute, trial and usage (AT&U) questions focusing on a specific target product, i.e. apples. The paper profiles the segment in terms of marketing relevant criteria and discusses implications of the segment for the marketing of fresh produce.Design/methodology/approachA quantitative online survey of 1,218 Pennsylvania residents was conducted. The survey included a conjoint experiment where respondents rated their preference for various apples consisting of different levels of key apple characteristics, including physical apple attributes (sweetness, blemishes, size, crispness), credence attributes (conventional versus organic production method, local origin versus product of USA versus imported) and purchase price when buying apples. The data were used to quantify how much consumers are willing to give up in terms of product appearance, price, value of locally produced or other variables. Traditional attribute, trial and usage data were also collected.FindingsThe key finding was that the attribute “local” was significantly more impactful in changing preference for apples than “organic”. It was also found that there were three segments of apple consumers: those that most valued the quality of the apple, a second that was most interested in price, and a third most interested in the health and/or life style attributes such as local and organic attributes. Large differences were found between locavores and non‐locavores on marketing relevant criteria, such as price sensitivity, outlet preferences, and media characteristics.Research limitations/implicationsThe major limitation was the use of only Pennsylvania residents in the study and produce other than apples might have been used as well. Additionally it would have been more effective if the actual apples could have been available to taste and inspect. A valuable finding is that there is a local segment that values and is willing to pay for a locally produced product. However, that is the smallest segment and must be carefully targeted as most consumers are interested in either taste or price.Practical implicationsUSA food retailers that use local supply can tell their customers “that purchasing from local farmers helps the economy in the communities we serve. Local produce can be delivered to your store very quickly and faster shipping means even fresher produce for you. Items can be picked and packed at a more mature stage. This can really bring out the taste of the product. Eating locally grown food also means less fossil fuel burned in preparation and transport – and less energy needed to refrigerate during transportation”. Farmers may wish to promote their local crops and not spend the additional money on organic farming.Originality/valueThe article appears to be the first research paper to tease apart the impact of local from organic via a conjoint analysis.

Modelli alternativi di garanzia della qualitŕ dei prodotti biologici alla luce della teoria delle convenzioni

In recent years, parallel to the growth of the organic sector, we have witnessed an increasing interest in alternative ways of guaranteeing the integrity and authenticity of organic food. The mainstream approach to organic certification is useful for consumers in that it provides guarantees regarding production processes and food quality. However, it is less accessible to small-scale producers and poorer consumers, particularly in developing countries. Groups of smallholders and local communities worldwide have started implementing alternative approaches in order to cope with problems associated with third-party certification. These practices are known as Participatory Guarantee Systems (pgs). The Participatory Guarantee is based on International Organic Standards issued by ifoam. It takes place at community level and involves a wide variety of stakeholders along the supply chain (from producers to consumers). It aims to minimize bureaucracy and costs by employing simple verification procedures and incorporating elements of environmental and social education, improving quality for both producers and consumers. Pgs models are based on the idea of voluntary quality assurance and a diffused control approach. Currently, they are mostly used in developing countries and in economies in transition such as Brazil, India, New Zealand, Costa Rica. The adoption of pgs makes organic food affordable even to the poorest consumers mainly through relying upon direct selling and direct trust formation mechanisms. These reduce transaction costs and grant a higher share of added value to farmers. The basic common elements of several pgs projects worldwide are: a participatory approach, a shared vision regarding quality, transparency, trust building and reinforcing mechanisms and a non-hierarchical relationship between the stakeholders. The pgs approach has been observed empirically, however a theoretical framework to interpret this phenomenon has not yet been identified. This framework is necessary to correctly set up empirical research aimed at analysing the factors which determine or hinder its success. The development of participatory guaranteed organic food can be influenced in several ways, depending on the location of the consumers, for example (at a local rural community level or a non-local level) where different levels of trust and social control could influence their behaviour. The aim of this study is to provide a conceptual framework for the analysis of pgs, and aims to contribute to an investigation into consumer attitudes towards organic foodstuffs guaranteed through pgs. The of has been widely adopted in the study of Geographical Indication products but it has not yet been applied to pgs projects. Pgs and gi products and value creation mechanisms share a broad range of common features, mainly related to the fact that they all deal with credence attributes of high quality foods. The Theory of Conventions approach considers that the control of product quality is guaranteed mainly by solid network arrangements. This is achieved by developing close relationships based on trust, thus mainly involving a local dimension and socially relevant mechanisms which go beyond a framework of individual preference analysis. The analytical framework should allow the setting up of an empirical model aimed at measuring the factors influencing the consumption of pgs-certified organic products in different market locations. This allows the identification of a series of variables related to the different conventions which are able to influence consumer behaviour in different market locations.

Importance of traceability for sustainable production: a cross‐country comparison

AbstractTraceability systems are becoming an important tool for tracking, monitoring and managing product flows through food supply chains. Traceability can be used as a method of certifying production, processing and nutritional credence attributes of food products. Environmentally sustainable production is a credence attribute that is gaining in importance in the eyes of consumers. In this research, the importance of traceability in verifying environmentally sustainable production practices is examined. The data were collected in online surveys related to consumer's perceptions and concerns about food safety, trust and reported behaviour related to meat consumption in three countries – Canada, the US and Japan. Determinants of traceability in verifying environmentally sustainable production practices include respondents' locus of control about food safety, food purchasing characteristics such as whether they normally buy organic products or shop at supermarkets and general traits such as worry and trust. In comparing across countries, there are significant differences in the interests in traceability to verify environmentally sustainable production practices and in the determinants of level of importance ascribed.

Credence attributes, voluntary organizations, and social pressure

Credence attributes of products are unobservable through search or experience. Some consumers are willing to pay a premium for their provision, and in addition, citizens can apply social pressure on firms to supply credence attributes. Firms have formed voluntary organizations to assure the provision of credence attributes, and the credible provision provides product differentiation. This paper provides a theory of the voluntary provision of credence attributes in the presence of demand pull from consumers and social pressure from NGOs, where an organization chooses a credence standard and firms compete given the standard. The credence standard is lower the larger the organization, and social pressure results in a higher standard.

A survey comparing meat quality attributes of beef from credence attribute-based production systems

Markus, S. B., Aalhus, J. L., Janz, J. A. M. and Larsen, I. L. 2011. A survey comparing meat quality attributes of beef from credence attribute-based production systems. Can. J. Anim. Sci. 91: 283–294. Two branded beef programs based on producer-defined production systems differentiated by intangible credence attributes (Organic and Natural) were compared with Commodity beef to determine meat quality and assess consumer acceptability. In each of four slaughter seasons (winter, spring, summer and fall) longissimus lumborum muscle samples were collected from two industry slaughter plants; Organic n=30, 30, 27 and 31; Natural n=30, 27, 29 and 25; Commodity 1 n=12 and 18 for spring and summer, respectively; Commodity 2 n=14 and 12 for spring and fall, respectively. Samples were vacuum packaged and aged for 16±2 d at 2°C. Seasonal effects (P<0.01) were evident for mean shear force, composition, drip loss, colour and pH. While all mean shear values were classified as being tender (<5.6 kg), a smaller proportion of steaks were classified as tender in the Organic beef compared with the Natural and Commodity beef (55.9 vs. 70.3 and 78.6%; P<0.01), indicating that even after industry normal ageing times there was higher tenderness variability in the Organic beef. Fat content (SEM=0.23; P<0.01) was lowest for the Organic line (3.98%) with Natural (5.34%) and Commodity being intermediate (5.73%). Some statistically significant differences (P<0.05) in mean scores for aroma, juiciness, flavour, tenderness and overall acceptability of cooked beef steaks were observed amongst the three production systems when samples were not matched on the basis of intramuscular fat (IMF). Clearly there are measureable differences in quality between “credence” based production systems and commodity beef with an overall better quality in Commodity beef. However, if the consumer is willing to pay for credence-based attributes then there is an opportunity for these production systems to improve the quality of their product, specifically in respect to age at slaughter and content of IMF.