IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-00656485.html
   My bibliography  Save this paper

Why Might Organic Labels Fail to Influence Consumer Choices? Marginal Labelling and Brand Equity Effects

Author

Listed:
  • Fabrice Larceneux

    (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

  • Florence Benoît-Moreau

    (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

  • Valérie Renaudin

    (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

Abstract

An organic label offers a market signal for producers of organic food products. In Western economies, the label has gained high recognition, but organic food still represents a small part of total food consumption, which raises questions about the label's efficacy. By considering organic labels as a signal of quality for consumers, this article studies how this signal interacts with brand signals when both are visible to consumers, applying a cobranding framework. This research examines the moderating effect of the brand on organic label effects. In a 2×2 experimental design using real consumers (N0122) in a shopping context, it found that, depending on brand equity, the marginal effect of organic labelling information in terms of perceived product quality varies. In particular, when brand equity is high (low), the organic label appears less (more) effective. However, regardless of the brand equity level, an organic label makes the environmentally friendly attribute salient, which has a positive impact on perceived quality. Pertinent implications for marketing and public policy are discussed.

Suggested Citation

  • Fabrice Larceneux & Florence Benoît-Moreau & Valérie Renaudin, 2012. "Why Might Organic Labels Fail to Influence Consumer Choices? Marginal Labelling and Brand Equity Effects," Post-Print hal-00656485, HAL.
    • Handle: RePEc:hal:journl:hal-00656485
    DOI: 10.1007/s10603-011-9186-1
    Note: View the original document on HAL open archive server: https://hal.science/hal-00656485
    as

    Download full text from publisher

    File URL: https://hal.science/hal-00656485/document
    Download Restriction: no
    File URL: https://libkey.io/10.1007/s10603-011-9186-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Huang, Chung L, 1996. "Consumer Preferences and Attitudes towards Organically Grown Produce," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 23(3), pages 331-342.
    2. repec:dau:papers:123456789/5475 is not listed on IDEAS
    3. Grossman, Sanford J, 1981. "The Informational Role of Warranties and Private Disclosure about Product Quality," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 461-483, December.
    4. Russell Cooper & Thomas W. Ross, 1985. "Product Warranties and Double Moral Hazard," RAND Journal of Economics, The RAND Corporation, vol. 16(1), pages 103-113, Spring.
    5. Broniarczyk, Susan M & Alba, Joseph W, 1994. "The Role of Consumers' Intuitions in Inference Making," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 21(3), pages 393-407, December.
    6. Jutta Roosen & Jayson L. Lusk & John A. Fox, 2003. "Consumer demand for and attitudes toward alternative beef labeling strategies in France, Germany, and the UK," Agribusiness, John Wiley & Sons, Ltd., vol. 19(1), pages 77-90.
    7. Golan, Elise H. & Kuchler, Fred & Mitchell, Lorraine, 2000. "Economics Of Food Labeling," Agricultural Economic Reports 34069, United States Department of Agriculture, Economic Research Service.
    8. Joonas Rokka & Liisa Uusitalo, 2008. "Preference for green packaging in consumer product choices : Do consumers care?," Post-Print hal-02313351, HAL.
    9. Ippolito, Pauline M, 1990. "Bonding and Nonbonding Signals of Product Quality," The Journal of Business, University of Chicago Press, vol. 63(1), pages 41-60, January.
    10. Sebastian Koos, 2011. "Varieties of Environmental Labelling, Market Structures, and Sustainable Consumption Across Europe: A Comparative Analysis of Organizational and Market Supply Determinants of Environmental-Labelled Go," Journal of Consumer Policy, Springer, vol. 34(1), pages 127-151, March.
    11. McGarry Wolf, Marianne & Butler, Leslie J. & Martin, Adam J. & Foltz, Jeremy D., 2009. "Factors Influencing the Purchase Decision for Milk Labelled rBST-free and Organic," Journal of Food Distribution Research, Food Distribution Research Society, vol. 40(1), pages 1-5, March.
    12. repec:dau:papers:123456789/13919 is not listed on IDEAS
    13. Zanoli, Raffaele & Naspetti, Simona, 2002. "Consumer motivations in the purchase of organic food. A means-end approach," MPRA Paper 32712, University Library of Munich, Germany.
    14. Johnson, Richard D & Levin, Irwin P, 1985. "More than Meets the Eye: The Effect of Missing Information on Purchase Evaluations," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 12(2), pages 169-177, September.
    15. Pearce, David W, 1991. "The Role of Carbon Taxes in Adjusting to Global Warming," Economic Journal, Royal Economic Society, vol. 101(407), pages 938-948, July.
    16. Gary D. Thompson, 1998. "Consumer Demand for Organic Foods: What We Know and What We Need to Know," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(5), pages 1113-1118.
    17. Gabriele Jahn & Matthias Schramm & Achim Spiller, 2005. "The Reliability of Certification: Quality Labels as a Consumer Policy Tool," Journal of Consumer Policy, Springer, vol. 28(1), pages 53-73, December.
    18. Kardes, Frank R, 1988. "Spontaneous Inference Processes in Advertising: The Effects of Conclusion Omission and Involvement on Persuasion," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 15(2), pages 225-233, September.
    19. Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-754, July/Aug..
    20. Birger Wernerfelt, 1988. "Umbrella Branding as a Signal of New Product Quality: An Example of Signalling by Posting a Bond," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 458-466, Autumn.
    21. Kirmani, Amna & Wright, Peter, 1989. "Money Talks: Perceived Advertising Expense and Expected Product Quality," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 16(3), pages 344-353, December.
    22. Tansev Geylani & J. Jeffrey Inman & Frenkel Ter Hofstede, 2008. "Image Reinforcement or Impairment: The Effects of Co-Branding on Attribute Uncertainty," Marketing Science, INFORMS, vol. 27(4), pages 730-744, 07-08.
    23. Rao, Akshay R & Monroe, Kent B, 1988. "The Moderating Effect of Prior Knowledge on Cue Utilization in Product Evaluations," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 15(2), pages 253-264, September.
    24. Klaus G. Grunert, 2005. "Food quality and safety: consumer perception and demand," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 32(3), pages 369-391, September.
    25. Lebar, Ed & Buehler, Phil & Keller, Kevin Lane & Sawicka, Monika & Aksehirli, Zeynep & Richey, Keith, 2005. "Brand Equity Implications of Joint Branding Programs," Journal of Advertising Research, Cambridge University Press, vol. 45(4), pages 413-425, December.
    26. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    27. van Doorn, Jenny & Verhoef, Peter C., 2011. "Willingness to pay for organic products: Differences between virtue and vice foods," International Journal of Research in Marketing, Elsevier, vol. 28(3), pages 167-180.
    28. Boulding, William & Kirmani, Amna, 1993. "A Consumer-Side Experimental Examination of Signaling Theory: Do Consumers Perceive Warranties as Signals of Quality?," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 20(1), pages 111-123, June.
    Full references (including those not matched with items on IDEAS)

    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. Fabrice Larceneux & Florence Benoit-Moreau & Valérie Renaudin, 2012. "Why Might Organic Labels Fail to Influence Consumer Choices? Marginal Labelling and Brand Equity Effects," Journal of Consumer Policy, Springer, vol. 35(1), pages 85-104, March.
    2. Ernst, Holger & Wickede, Anje, 1999. "Einflußfaktoren auf die Glaubwürdigkeit kundenorientierter Produkt-Vorankündigungen: Ein signaltheoretischer Ansatz," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 515, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    3. Gergaud, Olivier & Livat, Florine, 2007. "How do consumers use signals to assess quality?," Working Papers 37296, American Association of Wine Economists.
    4. Heribert Gierl & Julia Koncz, 2007. "Unternehmenswachstum und Internationalität als Qualitätssignale," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 17(4), pages 389-409, January.
    5. Dror Etzion & Aviad Pe'er, 2014. "Mixed signals: A dynamic analysis of warranty provision in the automotive industry, 1960–2008," Strategic Management Journal, Wiley Blackwell, vol. 35(11), pages 1605-1625, November.
    6. Kurt, Didem & Pauwels, Koen & Kurt, Ahmet C. & Srinivasan, Shuba, 2021. "The asymmetric effect of warranty payments on firm value: The moderating role of advertising, R&D, and industry concentration," International Journal of Research in Marketing, Elsevier, vol. 38(4), pages 817-837.
    7. Padmanabhan, V, 1995. "Usage Heterogeneity and Extended Warranties," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(1), pages 33-53, Spring.
    8. Ivanova, Daniela, 2018. "Сертификацията – Инструмент За „Зелени“ Комуникации В Глобалната Търговия [Certification - a tool for “green” communications in global trade]," MPRA Paper 96038, University Library of Munich, Germany.
    9. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899, September.
    10. John G. Riley, 2001. "Silver Signals: Twenty-Five Years of Screening and Signaling," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 432-478, June.
    11. Liang Guo & Ying Zhao, 2009. "Voluntary Quality Disclosure and Market Interaction," Marketing Science, INFORMS, vol. 28(3), pages 488-501, 05-06.
    12. Noll, Juergen, 2004. "Comparing quality signals as tools of consumer protection: are warranties always better than advertisements to promote higher product quality?," International Review of Law and Economics, Elsevier, vol. 24(2), pages 227-239, June.
    13. Price, Lydia J. & Dawar, Niraj, 2002. "The joint effects of brands and warranties in signaling new product quality," Journal of Economic Psychology, Elsevier, vol. 23(2), pages 165-190, April.
    14. Marco Costanigro & Yuko Onozaka, 2020. "A Belief‐Preference Model of Choice for Experience and Credence Goods," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(1), pages 70-95, February.
    15. Ngobo, Paul-Valentin & Jean, Sylvie, 2012. "Does store image influence demand for organic store brands?," Journal of Retailing and Consumer Services, Elsevier, vol. 19(6), pages 621-628.
    16. Junhong Chu & Pradeep K. Chintagunta, 2009. "Quantifying the Economic Value of Warranties in the U.S. Server Market," Marketing Science, INFORMS, vol. 28(1), pages 99-121, 01-02.
    17. Elisa Monnot & Fanny Reniou & Béatrice Parguel, 2014. "Consumer responses to elimination of overpackaging on private label products," Working Papers halshs-01076408, HAL.
    18. M. Billur Akdeniz & Roger J. Calantone, 2017. "A longitudinal examination of the impact of quality perception gap on brand performance in the US Automotive Industry," Marketing Letters, Springer, vol. 28(1), pages 43-57, March.
    19. Etilé, Fabrice & Teyssier, Sabrina, 2013. "Corporate social responsibility and the economics of consumer social responsibility," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 94(2).
    20. Andrea Marchini & Chiara Riganelli & Francesco Diotallevi & Bianca Polenzani, 2021. "Label information and consumer behaviour: evidence on drinking milk sector," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 9(1), pages 1-24, December.

    More about this item

    Keywords

    Organic label . Brand equity . Label equity . Cobranding . Perceived quality;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:hal:journl:hal-00656485. 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: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.