scholarly journals Price promotion of organic foods and consumer demand

2021 ◽  
pp. 1-6
Author(s):  
Danhong Chen ◽  
Edward C. Jaenicke ◽  
Ji Yan ◽  
Kun Tian ◽  
Rodolfo M. Nayga
Keyword(s):  
Consumer Demand ◽  
Price Promotion ◽  
Price Promotions ◽  
Food Category ◽  
Organic Foods ◽  
Price Elasticities ◽  
Product Categories ◽  
Demand Elasticities ◽  
Consumer Panel ◽  
Organic Products

Abstract Existing studies have examined the demand elasticities for organic products only in select categories, and their results for consumers' sensitivity to price changes are inconsistent. Evidence regarding the effects of price promotions on the demand for organic foods vs non-organic foods is scarce. This study aims to (1) examine the own-price elasticities of organic foods vs non-organic counterparts both with and without a promotion in a variety of product categories, and (2) investigate how the distinctive promotion effects between organic and non-organic counterparts depend on food category features. Using purchase data for 36 food categories from the 2015 Nielsen Consumer Panel, we find differential own-price elasticities for organic and non-organic foods, regardless of whether the product is purchased with a promotion. When the products are purchased with a promotion, we find stronger price promotion effects of organic virtues than non-organic virtues and weaker price promotion effects of organic vices than conventional vices. Price promotions of organic foods are more likely to induce health-conscious consumers to switch from conventional purchases to organic purchases in virtues.

scholarly journals The effects of price promotion on relative virtue and vice food products

2017 ◽  
Vol 20 (5) ◽  
pp. 637-654
Author(s):  
Josefa Parreño-Selva ◽  
Francisco J. Mas-Ruiz ◽  
Enar Ruiz-Conde
Keyword(s):  
Survey Data ◽  
Product Category ◽  
Scanner Data ◽  
Price Promotion ◽  
Low Fat ◽  
Price Promotions ◽  
Product Categories ◽  
Light Product ◽  
Enduring Involvement ◽  
Product Sales

Retailers use price promotion of light and regular products, but not all of these products are perceived as relative virtues and vices, respectively. This paper aims to identify whether consumers distinguish between the two product categories. Survey data is used to distinguish between each product category, and identifies low-fat milk as a light product that gives both immediate and delayed rewards. Daily scanner data from a hypermarket supports the effects of price promotions on sales within and between product categories, as expected. We expect that, (1) due to these light products representing more enduring involvement, demand is less price sensitive compared to demand for regular products; (2) as nonimpulse purchase products, price promotions of light products cannibalize the sales of other light products; and (3) the loss of light product benefits associated with switching means that price promotions of light products hurt regular product sales more than vice versa.

Comparison of consumer perceptions and preference toward organic versus conventionally produced foods: A review and update of the literature

2005 ◽  
Vol 20 (4) ◽  
pp. 193-205 ◽  
Author(s):  
Emmanuel K. Yiridoe ◽  
Samuel Bonti-Ankomah ◽  
Ralph C. Martin
Keyword(s):  
Human Health ◽  
Income Elasticity ◽  
Consumer Demand ◽  
Empirical Studies ◽  
Organic Food ◽  
Consumer Preference ◽  
Price Premium ◽  
Organic Foods ◽  
Organic Products ◽  
Income Elasticity Of Demand

AbstractGrowing interest in organic agriculture has prompted numerous studies that compare various aspects of organic and conventionally produced foods. This paper provides a comprehensive evaluation of empirical studies comparing organic products and conventionally grown alternatives. The emphasis is on key organic consumer demand and marketing issues, including: (1) the implications of an economic definition of organically grown food for consumer demand; (2) attributes that shoppers consider most when comparing organic with conventionally grown products; (3) level and characteristics of consumer knowledge and awareness about organic food; (4) assessment methods and characteristics of organic consumer attitudes and preferences; (5) size of price premium and characteristics of consumers’ willingness-to-pay for organic products; and (6) profile of organic consumers. Overall, although there is some knowledge and awareness about organic products, consumers are not consistent in their interpretation of what is organic. Secondly, while consumers typically understand the broad issues about organic foods, many tend not to understand the complexities and niceties of organic farming practices and organic food quality attributes. Uncertainty regarding the true attributes of organic, and skepticism about organic labels, part of which stems from reported cases of (inadvertent) mislabeling, and product misrepresentation, and partly because of nonuniform organic standards and certification procedures, may hold some consumers back from purchasing organic. Thirdly, concern for human health and safety, which is a key factor that influences consumer preference for organic food, is consistent with observed deterioration in human health over time and, therefore, motivates consumers to buy organic food as insurance and/or investment in health. Fourthly, the proportion of consumers who are willing to pay a price premium for organic food decreases with premium level. On the other hand, premiums tend to increase with (combinations of) preferred attributes. In addition, demand tends to depend more on the price differential with respect to conventionally grown products, than on actual price. In contrast to sensitivity of demand to changes in price, income elasticity of demand for organic foods is generally small. Finally, it is important for policy analysts and researchers to note that organic fresh fruits and vegetables currently dominate the organic consumer's food basket. Furthermore, it is not clear whether frequent buyers consider particular organic products (e.g., organic meat) as normal goods, or if consumers consider such products as luxury goods.

scholarly journals The Production Theory Approach to Import Demand Analysis: A Comparison of the Rotterdam Model and the Differential Production Approach

2002 ◽  
Vol 34 (3) ◽  
pp. 431-443 ◽  
Author(s):  
Andrew A. Washington ◽  
Richard L. Kilmer
Keyword(s):  
Consumer Demand ◽  
Estimation Procedure ◽  
Import Demand ◽  
Theory Approach ◽  
Price Elasticities ◽  
Demand Elasticities ◽  
Rotterdam Model ◽  
Stage Estimation ◽  
Derived Demand ◽  
Production Approach

Results indicate that, when comparing the unconditional derived-demand elasticities to the unconditional consumer demand elasticities, significant differences emerge due to the differences in the first-stage estimation procedure between the differential production approach and the Rotterdam model. In comparing the consumer demand price/cross-price elasticities to the derived-demand price/cross-price elasticities, it is clear that use of the Rotterdam model when a production approach should be used can lead to overestimation, underestimation, and incorrect signs in deriving unconditional price effects.

scholarly journals Price Promotions and Popular Events

2018 ◽  
Vol 83 (1) ◽  
pp. 73-88 ◽  
Author(s):  
Wiebke I.Y. Keller ◽  
Barbara Deleersnyder ◽  
Karen Gedenk
Keyword(s):  
The Netherlands ◽  
Price Promotion ◽  
Price Promotions ◽  
Packaged Goods ◽  
Consumer Packaged Goods ◽  
Timing Decisions ◽  
Sales Response ◽  
Event Times

Managers often use popular events, such as the Olympics, to advertise their brands more heavily. Can manufacturers and retailers capitalize on these events to enhance the response to their price promotions? This study empirically examines whether the sales response to price promotions is stronger or weaker around events than at nonevent times, and what factors drive this relative promotion response. Studying 242 brands from 30 consumer packaged goods categories in the Netherlands over more than four years, the authors find that a price promotion offered around a popular event often generates a stronger sales response than the same promotion at nonevent times, with a price promotion elasticity that is 9.3% larger, on average, during events. Still, the variance in relative promotion response across brands and events is high, and the authors identify several drivers that managers should consider before shifting promotions toward event times. Currently, managers often do not take these drivers into account. This study provides guidelines to improve promotional timing decisions in relation to popular events.

Implicit Statistical Learning in Real-World Environments Leads to Ecologically Rational Decision Making

2017 ◽  
Vol 29 (1) ◽  
pp. 34-44 ◽  
Author(s):  
Sonja Perkovic ◽  
Jacob Lund Orquin
Keyword(s):  
Statistical Learning ◽  
Organic Food ◽  
Ecological Rationality ◽  
Rational Behavior ◽  
Statistical Structure ◽  
Organic Foods ◽  
Decision Strategies ◽  
Rational Decision Making ◽  
Organic Products ◽  
Healthful Food

Ecological rationality results from matching decision strategies to appropriate environmental structures, but how does the matching happen? We propose that people learn the statistical structure of the environment through observation and use this learned structure to guide ecologically rational behavior. We tested this hypothesis in the context of organic foods. In Study 1, we found that products from healthful food categories are more likely to be organic than products from nonhealthful food categories. In Study 2, we found that consumers’ perceptions of the healthfulness and prevalence of organic products in many food categories are accurate. Finally, in Study 3, we found that people perceive organic products as more healthful than nonorganic products when the statistical structure justifies this inference. Our findings suggest that people believe organic foods are more healthful than nonorganic foods and use an organic-food cue to guide their behavior because organic foods are, on average, 30% more healthful.

Using POS Data for Price Promotions Evaluation

2011 ◽  
pp. 267-285
Author(s):  
Danijel Bratina ◽  
Armand Faganel
Keyword(s):  
Panel Data ◽  
Marketing Research ◽  
Sales Promotion ◽  
Communication Tool ◽  
Price Promotions ◽  
Obvious Effect ◽  
Consumer Panel ◽  
Pos Data ◽  
High Level ◽  
Analysis Models

Price promotions have been largely dealt with in the literature. Yet there are just a few generalizations made so far about this powerful marketing communication tool. The obvious effect, that all authors who have studied price promotions emphasize, is quantity increase during price promotions. Inference studies about the decomposition of the sales promotion bump do not converge to a generalization or a law, but end in radically different results. Most of these studies use consumer panel data, rich of demographical characteristics and consumers’ purchasing history. Companies that use such data, available from marketing research industry, usually complain that data is old and expensive. The authors start with literature review on price promotions in which they present existing models based on consumer panel data (Bell, et al., 1999; Mela, et al., 1998; Moriarty, 1985; Walters, 1991; Yeshin, 2006). Next they present existing POS analysis models and compare their findings to show the high level of heterogeneity among results. All existing models are based on powerful databases provided by professional research institutions (i.e. Nielsen or IRI) that usually cover the whole market for the analysed brand category geographically. The authors next apply existing models to find which best suits data available for Slovenian FMCG market. They show two models analysis – quantity (SCAN*PRO) and market share (MCI) and their power for explanatory and forecasting research using POS data. Having dealt with more than 30 brand categories within a wider research, they conclude that the models developed are usable for a fast decision making process within a company, but their exploratory power is still poor compared to panel data.

scholarly journals A content analysis of organic product package designs

2019 ◽  
Vol 36 (4) ◽  
pp. 441-448 ◽  
Author(s):  
Polymeros Chrysochou ◽  
Alexandra Festila
Keyword(s):  
Content Analysis ◽  
Environmental Friendliness ◽  
Content Type ◽  
Package Design ◽  
Design Elements ◽  
Product Categories ◽  
Managerial Decisions ◽  
Organic Products ◽  
Product Launches ◽  
Product Package

Purpose Do the package designs of organic products differ from those of conventional products and which package design elements are used more systematically in organic products? This paper aims to address this question by exploring the package design elements of organic products. The proposition is that in addition to package design elements that explicitly communicate and position a product as organic (i.e. organic labels and claims), other package design elements that implicitly convey an organic image are used. Design/methodology/approach The authors conduct a content analysis of the package designs from new product launches in four product categories (butter, cereals, fruit juice and milk) and across four markets (Austria, Denmark, Sweden and Switzerland). Findings The results show that the package designs of organic products differ from those of conventional products based on the presence of more paper material, white and green colours and images displaying nature. Research limitations/implications The findings support the notion that in addition to organic labels and claims, package design elements that implicitly communicate values associated with organic products, such as environmental friendliness and sustainability are used. Originality/value This study is among the few to explore package design elements for organic products. Understanding how the package designs of organic products are constructed can support managerial decisions on the use of the package as a means to better communicate and position organic products.

scholarly journals The Healthiness of Food and Beverages on Price Promotion at Promotional Displays: A Cross-Sectional Audit of Australian Supermarkets

2020 ◽  
Vol 17 (23) ◽  
pp. 9026
Author(s):  
Lily Grigsby-Duffy ◽  
Sally Schultz ◽  
Liliana Orellana ◽  
Ella Robinson ◽  
Adrian J. Cameron ◽  
...  
Keyword(s):  
Food Environments ◽  
Unhealthy Food ◽  
Price Promotion ◽  
Healthy Foods ◽  
Purchasing Decisions ◽  
Price Promotions ◽  
Cross Sectional ◽  
Policy Makers ◽  
Food And Beverages ◽  
Economic Position

Supermarket environments can strongly influence purchasing decisions. Price promotions are recognised as a particularly persuasive tactic, but the healthiness of price promotions in prominent in-store locations is understudied. This study compared the prevalence and magnitude of price promotions on healthy and unhealthy food and beverages (foods) displayed at prominent in-store locations within Australian supermarkets, including analyses by supermarket group and area-level socio-economic position. A cross-sectional in-store audit of price promotions on foods at key display areas was undertaken in 104 randomly selected stores from major Australian supermarket groups (Woolworths, Coles, Aldi and independents) in Victoria, Australia. Of the display space dedicated to foods with price promotions, three of the four supermarket groups had a greater proportion of display space devoted to unhealthy (compared to healthy) foods at each promotional location measured (end of aisles: 66%; island bins: 53%; checkouts: 88%). Aldi offered very few price promotions. Few measures varied by area-level socio-economic position. This study demonstrated that price promotions at prominent in-store locations in Australian supermarkets favoured unhealthy foods. Marketing of this nature is likely to encourage the purchase of unhealthy foods, highlighting the need for retailers and policy-makers to consider addressing in-store pricing and placement strategies to encourage healthier food environments.

Determining Optimum Price Promotion Quantities

1970 ◽  
Vol 34 (4) ◽  
pp. 31-39 ◽  
Author(s):  
David A. Goodman ◽  
Kavin W. Moody
Keyword(s):  
Price Promotion ◽  
Price Promotions ◽  
Optimum Price

How can a price “special” be made more profitable for the manufacturer? Is it possible to predict sales which will be generated through price promotion? These are two of the basic questions that are examined in this article. A methodology is presented for optimizing manufacturers’ shipment quantities for price promotions in cases where the duration of the promotion is fixed and the item to be promoted is fair-traded.

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