Hostname: page-component-cd9895bd7-lnqnp Total loading time: 0 Render date: 2024-12-23T11:58:01.788Z Has data issue: false hasContentIssue false
  • English
  • Français

Price promotion of organic foods and consumer demand

Published online by Cambridge University Press:  11 September 2021

Danhong Chen Open the ORCID record for Danhong Chen [Opens in a new window] ,
Edward C. Jaenicke ,
Ji Yan ,
Kun Tian  and
Rodolfo M. Nayga
Danhong Chen*
Affiliation:
School of Agricultural Sciences, Sam Houston State University, Huntsville, TX, USA
Edward C. Jaenicke
Affiliation:
Department of Agricultural Economics, Sociology, and Education, The Pennsylvania State University, State College, PA, USA
Ji Yan
Affiliation:
Durham University Business School, Durham University, Durham, UK
Kun Tian
Affiliation:
Norwich Business School, University of East Anglia, Norwich, UK
Rodolfo M. Nayga
Affiliation:
Department of Agricultural Economics, Texas A&M University, College Station, TX, USA
*
Author for correspondence: Danhong Chen, E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

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.

Keywords

Demand elasticityorganic vicesorganic virtues
Type
Research Article
Information
Renewable Agriculture and Food Systems , Volume 37 , Issue 6 , December 2022 , pp. 618 - 623
Check for updates
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aertsens, J (2009) Personal determinants of organic food consumption: a review. British Food Journal 111, 1140–1167.CrossRefGoogle Scholar
Aschemann-Witzel, J and Zielke, S (2017) Can't buy me green? A review of consumer perceptions of and behavior toward the price of organic food. Journal of Consumer Affairs 51, 211–251.CrossRefGoogle Scholar
Bernard, JC and Bernard, DJ (2009) What is it about organic milk? An experimental analysis. American Journal of Agricultural Economics 91, 826–836.CrossRefGoogle Scholar
Bezawada, R and Pauwels, K (2013) What is special about marketing organic products? How organic assortment, price, and promotions drive retailer performance. Journal of Marketing 77, 31–51.CrossRefGoogle Scholar
Dhar, T and Foltz, JD (2005) Milk by any other name… consumer benefits from labeled milk. American Journal of Agricultural Economics 87, 214–228.CrossRefGoogle Scholar
Fillion, L and Arazi, S (2002) Does organic food taste better? A claim substantiation approach. Nutrition & Food Science 32, 153–157.CrossRefGoogle Scholar
Fourmouzi, V, Genius, M and Midmore, P (2012) The demand for organic and conventional produce in London, UK: a system approach. Journal of Agricultural Economics 63, 677–693.CrossRefGoogle Scholar
Gil, JM, Gracia, A and Sánchez, M (2000) Market segmentation and willingness to pay for organic products in Spain. The International Food and Agribusiness Management Review 3, 207–226.CrossRefGoogle Scholar
Glaser, LK and Thompson, GD (2000) Demand for organic and conventional beverage milk.Google Scholar
Hamzaoui-Essoussi, L and Zahaf, M (2012) Canadian organic food consumers’ profile and their willingness to pay premium prices. Journal of International Food & Agribusiness Marketing 24, 1–21.CrossRefGoogle Scholar
Hu, W, Batte, MT, Woods, T and Ernst, S (2011) Consumer preferences for local production and other value-added label claims for a processed food product. European Review of Agricultural Economics 39, 489–510.CrossRefGoogle Scholar
Hughner, RS, Mcdonagh, P, Prothero, A, Shultz Ii, CJ and Stanton, J (2007) Who are organic food consumers? A compilation and review of why people purchase organic food. Journal of Consumer Behaviour 6, 94–110.Google Scholar
Jaenicke, EC and Carlson, AC (2015) Estimating and investigating organic premiums for retail-level food products. Agribusiness 31, 453–471.CrossRefGoogle Scholar
Jonas, A and Roosen, J (2008) Demand for milk labels in Germany: organic milk, conventional brands, and retail labels. Agribusiness 24, 192–206.Google Scholar
Kasteridis, P and Yen, ST (2012) U.S. demand for organic and conventional vegetables: a Bayesian censored system approach. Australian Journal of Agricultural and Resource Economics 56, 405–425.CrossRefGoogle Scholar
Krystallis, A (2005) Consumers’ willingness to pay for organic food: factors that affect it and variation per organic product type. British Food Journal 107, 320–343.Google Scholar
Lee, W-CJ, Shimizu, M, Kniffin, KM and Wansink, B (2013) You taste what you see: Do organic labels bias taste perceptions? Food Quality and Preference 29, 33–39.CrossRefGoogle Scholar
Lee, HC, Chang, CT, Cheng, ZH and Chen, YT (2018) Will an organic label always increase food consumption? It depends on food type and consumer differences in health locus of control. Food Quality and Preference 63, 88–96.Google Scholar
Liu, PJ, Haws, KL, Lamberton, C, Campbell, TH and Fitzsimons, GJ (2015) Vice-virtue bundles. Management Science 61, 204–228.Google Scholar
Lopez, E and Lopez, RA (2009) Demand for differentiated milk products: implications for price competition. Agribusiness 25, 453–465.CrossRefGoogle Scholar
Loureiro, ML and Hine, S (2002) Discovering niche markets: a comparison of consumer willingness to pay for local (Colorado grown), organic, and GMO-free products. Journal of Agricultural and Applied Economics 34, 477–487.CrossRefGoogle Scholar
Maguire, KB, Owens, N and Simon, NB (2004) The price premium for organic babyfood: a hedonic analysis. Journal of Agricultural and Resource Economics 29, 132–149.Google Scholar
Mishra, A and Mishra, H (2011) The influence of price discount versus bonus pack on the preference for virtue and vice foods. Journal of Marketing Research 48, 196–206.CrossRefGoogle Scholar
Ngobo, PV (2011) What drives household choice of organic products in grocery stores? Journal of Retailing 87, 90–100.CrossRefGoogle Scholar
OTA (2020) COVID-19 will shape organic industry in 2020 after banner year in 2019 [Online]. Available at https://ota.com/news/press-releases/21328 (Accessed 26 June 2020).Google Scholar
Parreño-Selva, J, Mas-Ruiz, FJ and Ruiz-Conde, E (2014) Price promotions effects of virtue and vice products. European Journal of Marketing 48, 1296–1314.CrossRefGoogle Scholar
Paul, J and Rana, J (2012) Consumer behavior and purchase intention for organic food. Journal of Consumer Marketing 29, 412–422.CrossRefGoogle Scholar
Pino, G, Peluso, AM and Guido, G (2012) Determinants of regular and occasional consumers’ intentions to buy organic food. Journal of Consumer Affairs 46, 157–169.CrossRefGoogle Scholar
Rödiger, M and Hamm, U (2015) How are organic food prices affecting consumer behaviour? A review. Food Quality and Preference 43, 10–20.CrossRefGoogle Scholar
Schröck, R (2012) The organic milk market in Germany is maturing: a demand system analysis of organic and conventional fresh milk segmented by consumer groups. Agribusiness 28, 274–292.CrossRefGoogle Scholar
Smith, TA, Huang, CL and Lin, B-H (2009a) Does price or income affect organic choice? Analysis of US fresh produce users. Journal of Agricultural and Applied Economics 41, 731–744.CrossRefGoogle ScholarPubMed
Smith, TA, Huang, CL and Lin, BH (2009b) Estimating organic premiums in the US fluid milk market. Renewable Agriculture and Food Systems 24, 197–204.CrossRefGoogle Scholar
Sridhar, K, Bezawada, R and Trivedi, M (2012) Investigating the drivers of consumer cross-category learning for new products using multiple data sets. Marketing Science 31, 668–688.CrossRefGoogle Scholar
Van Doorn, J and Verhoef, PC (2011) Willingness to pay for organic products: differences between virtue and vice foods. International Journal of Research in Marketing 28, 167–180.CrossRefGoogle Scholar
Van Doorn, J and Verhoef, PC (2015) Drivers of and barriers to organic purchase behavior. Journal of Retailing 91, 436–450.CrossRefGoogle Scholar
Vega-Zamora, M, Torres-Ruiz, FJ, Murgado-Armenteros, EM and Parras-Rosa, M (2014) Organic as a heuristic cue: what Spanish consumers mean by organic foods. Psychology & Marketing 31, 349–359.CrossRefGoogle Scholar
Wertenbroch, K (1998) Consumption self-control by rationing purchase quantities of virtue and vice. Marketing Science 17, 317–337.CrossRefGoogle Scholar
Wier, M, O'doherty Jensen, K, Andersen, LM and Millock, K (2008) The character of demand in mature organic food markets: Great Britain and Denmark compared. Food Policy 33, 406–421.CrossRefGoogle Scholar
Yan, J, Tian, K, Heravi, S and Morgan, P (2017) The vices and virtues of consumption choices: price promotion and consumer decision making. Marketing Letters 28, 461–475.CrossRefGoogle Scholar
Yiridoe, EK, Bonti-Ankomah, S and Martin, RC (2005) Comparison of consumer perceptions and preference toward organic versus conventionally produced foods: a review and update of the literature. Renewable Agriculture and Food Systems 20, 193–205.CrossRefGoogle Scholar
Zhang, F, Huang, CL, Lin, B-H, Epperson, JE and Houston, JE (2011) National demand for fresh organic and conventional vegetables: scanner data evidence. Journal of Food Products Marketing 17, 441–458.CrossRefGoogle Scholar
Zhao, X, Chambers Iv, E, Matta, Z, Loughin, TM and Carey, EE (2007) Consumer sensory analysis of organically and conventionally grown vegetables. Journal of Food Science 72, S87–S91.CrossRefGoogle ScholarPubMed
Supplementary material: File

Chen et al. supplementary material

Tables S1 and S2

Download Chen et al. supplementary material(File)
File 39.9 KB