IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v10y2018i5p1522-d145717.html
   My bibliography  Save this article

Eco-Labeling and Retailer Pricing Strategies: The U.K. Haddock Market

Author

Listed:
  • Dengjun Zhang

    (Business School, University of Stavanger, Stavanger 4036, Norway
    CAPIA AS, Tromsø 9252, Norway)

  • Geir Sogn-Grundvåg

    (The Norwegian Institute of Food, Fisheries and Aquaculture Research (Nofima), Tromsø 9291, Norway)

  • Frank Asche

    (The Institute for Sustainable Food Systems, School of Forest Resources and Conservation, University of Florida, Gainesville, FL 32611, USA
    Department of Industrial Economics, University of Stavanger, Stavanger 4036, Norway)

  • James A. Young

    (Marketing and Retail Division, University of Stirling, Stirling FK9 4LA, UK)

Abstract

In attempts to differentiate their store imagery, grocery retailers frequently introduce new products, which are often rich in extrinsic attributes such as claims regarding healthiness and environmental sustainability. This paper explores retailers’ pricing strategies for product attributes of haddock in the United Kingdom. The results show that retailers’ pricing strategies vary, in particular for extrinsic product attributes such as eco-labels and country-of-origin. The high price premium generated from the most advocated eco-labels and an emphasis upon promotion strategies appear to play a role in the success of high-end retailers, and may have implications for any heightened competitive responses by larger retail chains in the future.

Suggested Citation

  • Dengjun Zhang & Geir Sogn-Grundvåg & Frank Asche & James A. Young, 2018. "Eco-Labeling and Retailer Pricing Strategies: The U.K. Haddock Market," Sustainability, MDPI, vol. 10(5), pages 1-13, May.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:5:p:1522-:d:145717
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/10/5/1522/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/10/5/1522/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ward, Clement E. & Lusk, Jayson L. & Dutton, Jennifer M., 2008. "Implicit Value of Retail Beef Product Attributes," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(3), pages 1-18.
    2. Daniel Hassan & Sylvette Monier-Dilhan, 2006. "National brands and store brands: Competition through public quality labels," Agribusiness, John Wiley & Sons, Ltd., vol. 22(1), pages 21-30.
    3. Douglas Cooper, 2003. "Findings from the Competition Commission's Inquiry into Supermarkets," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 127-143, March.
    4. Sogn-Grundvåg, Geir & Larsen, Thomas A. & Young, James A., 2013. "The value of line-caught and other attributes: An exploration of price premiums for chilled fish in UK supermarkets," Marine Policy, Elsevier, vol. 38(C), pages 41-44.
    5. Feenstra, Robert C, 1995. "Exact Hedonic Price Indexes," The Review of Economics and Statistics, MIT Press, vol. 77(4), pages 634-653, November.
    6. Asche, Frank & Bronnmann, Julia, 2017. "Price premiums for ecolabelled seafood: MSC certification in Germany," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 61(4), October.
    7. Geir Sogn-Grundvåg & Thomas Andre Larsen & James A. Young, 2014. "Product Differentiation with Credence Attributes and Private Labels: The Case of Whitefish in UK Supermarkets," Journal of Agricultural Economics, Wiley Blackwell, vol. 65(2), pages 368-382, June.
    8. Hiroki Wakamatsu & Christopher M. Anderson & Hirotsugu Uchida & Cathy A. Roheim, 2017. "Pricing Ecolabeled Seafood Products with Heterogeneous Preferences: An Auction Experiment in Japan," Marine Resource Economics, University of Chicago Press, vol. 32(3), pages 277-294.
    9. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    10. Cesar Revoredo‐Giha & Alan Renwick, 2012. "Retailers Price Behavior in the UK Fresh Fruit and Vegetable Market," Agribusiness, John Wiley & Sons, Ltd., vol. 28(4), pages 451-468, September.
    11. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    12. Jeffrey M. Wooldridge, 2003. "Cluster-Sample Methods in Applied Econometrics," American Economic Review, American Economic Association, vol. 93(2), pages 133-138, May.
    13. Ladd, George W & Zober, Martin, 1977. "Model of Consumer Reaction to Product Characteristics," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 4(2), pages 89-101, Se.
    14. Julia Bronnmann & Frank Asche, 2016. "The Value of Product Attributes, Brands and Private Labels: An Analysis of Frozen Seafood in Germany," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(1), pages 231-244, February.
    15. Paul W. Dobson & Michael Waterson & Stephen W. Davies, 2003. "The Patterns and Implications of Increasing Concentration in European Food Retailing," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 111-125, March.
    16. Domenico Carlucci & Biagia De Devitiis & Gianluca Nardone & Fabio Gaetano Santeramo, 2017. "Certification Labels Versus Convenience Formats: What Drives the Market in Aquaculture Products?," Marine Resource Economics, University of Chicago Press, vol. 32(3), pages 295-310.
    17. Cathy A. Roheim & Frank Asche & Julie Insignares Santos, 2011. "The Elusive Price Premium for Ecolabelled Products: Evidence from Seafood in the UK Market," Journal of Agricultural Economics, Wiley Blackwell, vol. 62(3), pages 655-668, September.
    18. Steven S. Vickner, 2015. "Estimating the Implicit Price of Convenience: A Hedonic Analysis of the US Breakfast Sausage Market," Agribusiness, John Wiley & Sons, Ltd., vol. 31(2), pages 281-292, April.
    19. Hao Lan & Paul W. Dobson, 2017. "Healthy Competition to Support Healthy Eating? An Investigation of Fruit and Vegetable Pricing in UK Supermarkets," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(3), pages 881-900, September.
    20. Asche, Frank & Guillen, Jordi, 2012. "The importance of fishing method, gear and origin: The Spanish hake market," Marine Policy, Elsevier, vol. 36(2), pages 365-369.
    21. Kennedy, Peter E, 1981. "Estimation with Correctly Interpreted Dummy Variables in Semilogarithmic Equations [The Interpretation of Dummy Variables in Semilogarithmic Equations]," American Economic Review, American Economic Association, vol. 71(4), pages 801-801, September.
    22. Nerlove, Marc, 1995. "Hedonic price functions and the measurement of preferences: The case of Swedish wine consumers," European Economic Review, Elsevier, vol. 39(9), pages 1697-1716, December.
    23. Howard Smith, 2004. "Supermarket Choice and Supermarket Competition in Market Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(1), pages 235-263.
    24. Lloyd, T.A. & McCorriston, S. & Morgan, C.W. & Poen, E. & Zgovu, E., 2014. "Retail price dynamics and retailer heterogeneity: UK evidence," Economics Letters, Elsevier, vol. 124(3), pages 434-438.
    25. Eliza M. Mojduszka & Julie A. Caswell, 2000. "A Test of Nutritional Quality Signaling in Food Markets Prior to Implementation of Mandatory Labeling," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 298-309.
    26. Lal, Rajiv & Matutes, Carmen, 1994. "Retail Pricing and Advertising Strategies," The Journal of Business, University of Chicago Press, vol. 67(3), pages 345-370, July.
    27. Verlegh, Peeter W. J. & Steenkamp, Jan-Benedict E. M., 1999. "A review and meta-analysis of country-of-origin research," Journal of Economic Psychology, Elsevier, vol. 20(5), pages 521-546, October.
    28. Richard Carew & Wojciech J. Florkowski & Elwin G. Smith, 2012. "Hedonic Analysis of Apple Attributes in Metropolitan Markets of Western Canada," Agribusiness, John Wiley & Sons, Ltd., vol. 28(3), pages 293-309, June.
    29. Panle Jia, 2008. "What Happens When Wal-Mart Comes to Town: An Empirical Analysis of the Discount Retailing Industry," Econometrica, Econometric Society, vol. 76(6), pages 1263-1316, November.
    30. Jaffry, Shabbar & Pickering, Helen & Ghulam, Yaseen & Whitmarsh, David & Wattage, Prem, 2004. "Consumer choices for quality and sustainability labelled seafood products in the UK," Food Policy, Elsevier, vol. 29(3), pages 215-228, June.
    31. Richard J. Volpe & Chenguang Li, 2012. "On the Frequency, Depth, and Duration of Sales at High–Low Pricing Supermarkets," Agribusiness, John Wiley & Sons, Ltd., vol. 28(2), pages /, March.
    32. Kyrre Rickertsen & Frode Alfnes & Pierre Combris & Géraldine Enderli & Sylvie Issanchou & Jason F. Shogren, 2017. "French Consumers' Attitudes and Preferences toward Wild and Farmed Fish," Marine Resource Economics, University of Chicago Press, vol. 32(1), pages 59-81.
    33. Asche, Frank & Larsen, Thomas A. & Smith, Martin D. & Sogn-Grundvåg, Geir & Young, James A., 2015. "Pricing of eco-labels with retailer heterogeneity," Food Policy, Elsevier, vol. 53(C), pages 82-93.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Trestini, Samuele & Stiletto, Alice, 2020. "Does Italian origin really determine a price premium for fluid milk? Evidences from a hedonic price analysis," Economia agro-alimentare / Food Economy, Italian Society of Agri-food Economics/Società Italiana di Economia Agro-Alimentare (SIEA), vol. 22(1), June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bronnmann, Julia & Asche, Frank, 2017. "Sustainable Seafood From Aquaculture and Wild Fisheries: Insights From a Discrete Choice Experiment in Germany," Ecological Economics, Elsevier, vol. 142(C), pages 113-119.
    2. Asche, Frank & Bronnmann, Julia & Cojocaru, Andreea L., 2021. "The value of responsibly farmed fish: A hedonic price study of ASC-certified whitefish," Ecological Economics, Elsevier, vol. 188(C).
    3. Domenico Carlucci & Biagia De Devitiis & Gianluca Nardone & Fabio Gaetano Santeramo, 2017. "Certification Labels Versus Convenience Formats: What Drives the Market in Aquaculture Products?," Marine Resource Economics, University of Chicago Press, vol. 32(3), pages 295-310.
    4. Roheim, Cathy A. & Zhang, Dengjun, 2018. "Sustainability certification and product substitutability: Evidence from the seafood market," Food Policy, Elsevier, vol. 79(C), pages 92-100.
    5. Carlucci, Domenico & Dedevitiis, Biagia & Nardone, Gianluca & Santeramo, Fabio Gaetano, 2016. "Certification Labels Vs Convenience Formats: What drives the market in aquaculture products?," MPRA Paper 75448, University Library of Munich, Germany.
    6. Andersson, Anna & Hammarlund, Cecilia, 2023. "The effect of eco-certification on demand: The case of MSC-certified Norway lobster," Ecological Economics, Elsevier, vol. 204(PA).
    7. Sigurdsson, Valdimar & Larsen, Nils Magne & Pálsdóttir, Rakel Gyða & Folwarczny, Michal & Menon, R.G. Vishnu & Fagerstrøm, Asle, 2022. "Increasing the effectiveness of ecological food signaling: Comparing sustainability tags with eco-labels," Journal of Business Research, Elsevier, vol. 139(C), pages 1099-1110.
    8. Frank Asche & Julia Bronnmann, 2017. "Price premiums for ecolabelled seafood: MSC certification in Germany," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 61(4), pages 576-589, October.
    9. Julia Bronnmann & Frank Asche, 2016. "The Value of Product Attributes, Brands and Private Labels: An Analysis of Frozen Seafood in Germany," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(1), pages 231-244, February.
    10. Ankamah-Yeboah, Isaac & Nielsen, Max & Nielsen, Rasmus, 2016. "Price premium of organic salmon in Danish retail sale," Ecological Economics, Elsevier, vol. 122(C), pages 54-60.
    11. Marcello Risitano & Rosaria Romano & Vincenzo Rusciano & Gennaro Civero & Debora Scarpato, 2022. "The impact of sustainability on marketing strategy and business performance: The case of Italian fisheries," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1538-1551, May.
    12. Smed, Sinne & Hansen, Lars Garn, 2018. "Consumer Valuation of Health Attributes in Food," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(2), May.
    13. Kyrre Rickertsen & Frode Alfnes & Pierre Combris & Géraldine Enderli & Sylvie Issanchou & Jason F. Shogren, 2017. "French Consumers' Attitudes and Preferences toward Wild and Farmed Fish," Marine Resource Economics, University of Chicago Press, vol. 32(1), pages 59-81.
    14. Samuele Trestini & Alice Stiletto, 2020. "Does Italian origin really determine a price premium for fluid milk? Evidences from a hedonic price analysis," Economia agro-alimentare, FrancoAngeli Editore, vol. 22(1), pages 1-22.
    15. Asche, Frank & Larsen, Thomas A. & Smith, Martin D. & Sogn-Grundvåg, Geir & Young, James A., 2015. "Pricing of eco-labels with retailer heterogeneity," Food Policy, Elsevier, vol. 53(C), pages 82-93.
    16. James Hilger & Eric Hallstein & Andrew W. Stevens & Sofia B. Villas-Boas, 2019. "Measuring Willingness to Pay for Environmental Attributes in Seafood," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(1), pages 307-332, May.
    17. Luigi Roselli & Domenico Carlucci & Bernardo Corrado Gennaro, 2016. "What Is the Value of Extrinsic Olive Oil Cues in Emerging Markets? Empirical Evidence from the U.S. E‐Commerce Retail Market," Agribusiness, John Wiley & Sons, Ltd., vol. 32(3), pages 329-342, July.
    18. Frank Wijen & Mireille Chiroleu-Assouline, 2019. "Controversy Over Voluntary Environmental Standards: A Socioeconomic Analysis of the Marine Stewardship Council," PSE-Ecole d'économie de Paris (Postprint) halshs-02071504, HAL.
    19. Sigurdsson, Valdimar & Larsen, Nils Magne & Alemu, Mohammed Hussen & Gallogly, Joseph Karlton & Menon, R. G. Vishnu & Fagerstrøm, Asle, 2020. "Assisting sustainable food consumption: The effects of quality signals stemming from consumers and stores in online and physical grocery retailing," Journal of Business Research, Elsevier, vol. 112(C), pages 458-471.
    20. Ankamah-Yeboah Isaac & Max Nielsen & Rasmus Nielsen, 2015. "Organic Salmon – Considered a Fisheries or Agricultural Product Among Consumers?," 2015 EAFE (European Association of Fisheries Economists) Conference Papers 003, Nisea.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:10:y:2018:i:5:p:1522-:d:145717. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.