Are experts overoptimistic about the success of market labeling information?

Being able to accurately predict the marketing effectiveness of product labels is critical for business profitability. Do industry experts (e.g., domain-specific and domain-general marketers) understand and accurately predict which messages appeal most to consumers? There is limited knowledge in this area, specifically around two essential food attributes: health and taste. Consumers perceive health and taste as trade-offs, which makes their reaction to such marketing information challenging to forecast. This study is the first to quantify the extent to which domain-general vs domain-specific experts can accurately predict consumer responses to health and taste information via marketing labels. We conducted three incentivized studies: Study 1 investigated consumer preferences for simple health versus taste labeling messages with actual consumers. Study 2 uncovered industry domain-specific ‘industry experts’ predictions for average consumers’ willingness-to-pay (WTP) for the messages providing incentives for accuracy. Study 3 employs domain-general ‘marketing experts’ (cross-industry) and evaluates the role of market intelligence in improving consumer valuation forecasts. We found that while both expert types made optimistic predictions that marketing health-related information would effectively increase consumer valuations, consumers did not respond to such information. Moreover, despite exhibiting greater confidence in their predictions than domain-general experts (63% vs 70%), domain-specific industry experts overestimated consumer valuations by 33% relative to the average consumer WTP of $6.80 for an 8 oz. bag of pecans. In contrast, domain-general experts overestimated consumer valuations by only 5%, suggesting possible motivated reasoning among industry-specific experts. Releasing market intelligence to domain-general experts for the baseline valuation (control) improved the accuracy of the forecast for the control, but forecasting inaccuracies for specific labeling messages prevailed.