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Choosing Brands: Fresh Produce versus other Products

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  • Jin, Yanhong H.
  • Zilberman, David
  • Heiman, Amir

Abstract

This study presents a framework to analyze how uncertainty about product attributes affects consumers' WTP for brand name products over generic ones, incorporating key elements of a random utility model and product attribute models. We found that in comparison to electronics, clothing, and processed food, consumers buy brand name vegetables and fruits mainly because of quality uncertainty, and they can easily reduce uncertainty of product quality of fresh vegetables and fruits by seeing, touching, smelling, and tasting. Hence, consumers are less willing to pay for brands of fresh vegetables and fruits. However, simulation results show that brands of fresh fruits and vegetables may have a similar price premium as other products, but they lack the market share. Thus, the main challenge in building brands of fresh produce is to establish a critical mass. We also find that demographic information such as education and gender does affect consumers' WTP for brands.

Suggested Citation

  • Jin, Yanhong H. & Zilberman, David & Heiman, Amir, 2005. "Choosing Brands: Fresh Produce versus other Products," 2005 Annual meeting, July 24-27, Providence, RI 19192, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea05:19192
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    References listed on IDEAS

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    1. Jeongwen Chiang, 1991. "A Simultaneous Approach to the Whether, What and How Much to Buy Questions," Marketing Science, INFORMS, vol. 10(4), pages 297-315.
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    Cited by:

    1. Devkota, Nirmala & Paudel, Krishna P. & Parajuli, Shanta, 2009. "Broiler Producers’ Willingness To Pay To Manage Nutrient Pollution," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46825, Southern Agricultural Economics Association.
    2. Martinez, Stephen W., 2011. "Brand Premiums in the U.S. Beef Industry," Journal of Food Distribution Research, Food Distribution Research Society, vol. 42(2), July.
    3. Joe L. Parcell & Jason R.V. Franken & Maria Cox & David J. Patterson & Richard F. Randle, 2010. "Buyers' perceptions of importance and willingness-to-pay for certain attributes of source and production verified bred heifers," Agricultural Economics, International Association of Agricultural Economists, vol. 41(5), pages 463-470, September.
    4. He, Na & Bernard, John C., 2011. "Differences in WTP and Consumer Demand for Organic and Non-GM Fresh and Processed Foods," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 40(2), August.
    5. Rickard, Bradley J. & Schmit, Todd M. & Gomez, Miguel I. & Lu, Hao, 2011. "Does the Name Matter? Developing Brands for Patented Fruit Varieties," Working Papers 126603, Cornell University, Department of Applied Economics and Management.
    6. Jin, Yanhong H. & Lin, Liguo & Yao, Lan, 2011. "Do Consumers Trust the National Inspection Exemption Brands? Evidence from Infant Formula in China," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103766, Agricultural and Applied Economics Association.
    7. Morales, Luis Emilio & Fleming, Euan M. & Wright, Vic & Griffith, Garry R. & Umberger, Wendy J., 2008. "Product And Branding Innovations In The Australian Beef Marketing System," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 5993, Australian Agricultural and Resource Economics Society.

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    Keywords

    Consumer/Household Economics;

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