MEASURING BRAND AWARENESS IN A RANDOM UTILITY MODEL

Brand awareness is recognized to be an important determinant in shaping the success of durables, yet it is very difficult to be quantified. This is exactly the main goal of this paper: propose a suitable model where brand awareness of two competing firms is modeled and, eventually, estimated. To this aim, we build a random utility model for a duopoly where each competitor is characterized by different pricing strategies and brand awareness. As a result, different levels of market shares will emerge at the equilibrium. As a case study, we calibrate the model with real data from the smartphone industry obtaining an estimate of the value of the brand awareness of two leading brands

Consumer Willingness-To-Pay for Different Organic Certification Logos in Turkey

Using data from focus group discussions with consumers and a choice experimentconducted in some of Turkey’s major cities, this study investigates whetherTurkish consumers prefer certain organic labelling schemes over others attemptsand to elicit their willingness to pay (WTP) for different organic certificationlogos. Although the level of awareness regarding organic certification logos waslow, consumers’ perceptions of the logos were generally positive. The results ofthe random parameter logit models indicated a positive WTP for the presence ofone of the three tested certification body logos in addition to the mandatorygovernmental logo. Given the low level of certification logo awareness, theconclusion is that both purchasing decisions and perceptions regarding logoswere affected by subjective criteria. Both the government and certification bodiesshould develop measures to increase consumer awareness of their logos and formconsumer perceptions and attitudes regarding the quality of the certificationimplied by the logo

Revealing additional preference heterogeneity with an extended random parameter logit model: the case of extra virgin olive oil

Methods that account for preference heterogeneity have received a significant amount of attention in recent literature. Most of them have focused on preference heterogeneity around the mean of the random parameters, which has been specified as a function of socio-demographic characteristics. This paper aims at analyzing consumers' preferences towards extra-virgin olive oil in Catalonia using a methodological framework with two novelties over past studies: 1) it accounts for both preference heterogeneity around the mean and the variance; and 2) it considers both socio-demographic characteristics of consumers as well as their attitudinal factors. Estimated coefficients and moments of willingness to pay (WTP) distributions are compared with those obtained from alternative Random Parameter Logit (RPL) models. Results suggest that the proposed framework increases the goodness-of-fit and provides more useful insights for policy analysis. The most important attributes affecting consumers' preferences towards extra virgin olive oil are the price and the product's origin. The consumers perceive the organic olive oil attribute negatively, as they think that it is not worth paying a premium for a product that is healthy in nature.Postprint (published version

Neural correlates for price involvement in purchase decisions with regards to fast-moving-consumer-goods

Some customers are loyal to their favorite brands, others easily switch between them. A new technique is available to assess differences in brand related behavior. We assume that price and brand-conscious participants show nearly the same activations in emotionally associated brain areas. Price-conscious participants also show an activation of cognitive associated regions. We employed functional magnet resonance imaging during a preference judgment task for fast mov-ing consumer goods. We discuss the results with differences in product and price specific in-volvement and advance that involvement of price-conscious participants is higher because of a higher price interest.internet Neuro market research, Involvement, Price Interest, Reward Circuitry

Got (Safe) Milk? Chinese Consumers’ Valuation for Select Food Safety Attributes

Food safety issues often arise from problems of asymmetric information between consumers and suppliers of food with regards to product-specific attributes or characteristics. Food safety concerns in China are having a drastic impact on consumer behavior, commodity markets, international trade and food security. An additional challenge to the problem of asymmetric information lies in the inherent structure of the governing bodies which oversee food safety and quality. Unlike the United States and other developed countries, China’s food safety is regulated by several government entities with different and sometimes overlapping responsibilities. As a result consumers don’t have a comprehensive food safety and quality system on which to base their economic decisions. In an effort to maintain the food supply of the world’s largest economy safe, China’s government has approved a series of tougher food safety laws and regulations. Although publicized as a tough approach to food safety, it is unclear whether this latest effort will make China’s food safer to eat and improve the country’s image to its agricultural trading partners. While much attention has focused on the problems plaguing China’s food inspection system, little research has been dedicated to analyze consumers’ concerns over food safety. In this paper we measure consumer preferences for select food safety attributes in milk. More specifically we estimate consumer’s willingness to pay for government certification, an independent (third party) certification program, national brand, and a product’s shelf-life using a choice experiment approach. We compare and contrast several modeling strategies to capture heterogeneity of consumer preferences. The data used in this study was collected from a choice experiment administered in seven major metropolitan cities in China, yielding a statistical sample of 6,720 observations. Our results suggest that Chinese consumers have the highest willingness-to-pay for a government certification program, followed by national brand, private certification, and longer shelf-life products. We find that Chinese consumers are very concerned about the safety of the milk they purchase and are willing to pay a high premium to assure that their food is safe. The high level of concern regarding milk safety is linked to recent food safety incidents involving dairy products, most notably the Melamine-adulterated milk products. Heterogeneity of consumer preferences and willingness to pay for the select food safety attributes was found by implementing a latent class logit model based on attitudinal responses as well as a mixed logit model. Although it might appear that Chinese consumers’ confidence on the government is eroding, as reported in the wake of recent food safety scandals, our research found that consumers were less confident on non-government food safety control measures. This result indicates that there is a strong need for the Chinese government to provide adequate food safety and quality control. Our findings call upon the direct involvement of the Chinese government in the food safety system. A more strict monitoring system via certification is necessary. If realized, such government efforts will provide higher welfare to consumers in the short-run and will restore consumers’ trust increasing social welfare in the long run. Policy implications of our results are discussed with particular attention given to food safety and security issues.China, Choice experiment, Mixed logit, Latent class logit, Food safety, Preference heterogeneity, Willingness-to-pay, Food Consumption/Nutrition/Food Safety, International Relations/Trade, Marketing, Q11, Q18,

DIFFERENCES IN U.S. CONSUMER PREFERENCES FOR CERTIFIED PORK CHOPS WHEN FACING BRANDED VS. NON-BRANDED CHOICES

Consumers' preferences for credence attributes of a product may differ from each other, when facing the choices between branded and/or non-branded products. We test this hypothesis with conditional and mixed logit regression using data obtained by choice experiment surveys. The results suggest that, on average, consumers are willing to pay more for a certification attribute when the product is branded. Additionally, greater variation in consumer willingness-to-pay is observed in the non-branded case. This latter characteristic of the results may represent the increased uncertainty some consumers internalize concerning quality consistency when brand information is not provided. These results have interesting implications for producers, processors, retailers, and policy makers.Consumer/Household Economics,

Factors Influencing Willingness-to-Pay for the Energy Star Label

In the United States, nearly 17 percent of greenhouse gas emissions come from residential energy use. Increases in energy efficiency for the residential sector can generate significant energy savings and emissions reductions. Consumer labels, such as USEPA’s Energy Star, promote conservation by providing consumers with information on energy usage for household appliances. This study examines how the Energy Star label affects consumer preferences for refrigerators. An online survey of a national sample of adults suggest that consumers are, on average, willing to pay an extra $249.82 to$349.30 for a refrigerator that has been awarded the Energy Star label. Furthermore, the results provide evidence that willingness to pay was motivated by both private (energy cost savings) and public (environmental) benefits.Energy Star, willingness-to-pay, eco-label, Consumer/Household Economics, Demand and Price Analysis, Environmental Economics and Policy,

Climate Policy Measures: What do people prefer ?

Several countries are responding to the climate change threat with various policy measures (e.g., taxes, permit trading, regulations, information campaigns, etc). While the effectiveness of different measures (instruments) has been studied extensively, very little research exists related to public preferences for alternative measures. This paper describes the results of a pilot study to determine whether a choice experiment might be a feasible approach for measuring preferences for carbon dioxide reduction policies, while ensuring careful consideration of the budget constraint facing households. We focus on estimating the public’s marginal utilities and implicit prices for a select group of attributes that describe climate policy measures in general. The results from the pilot study indicate that when respondents trade-off the cost of alternative and unlabeled policy measures, they are willing to pay for those that encourage (1) the development of environmentally-friendly technology and (2) climate awareness among the Swedish population. Finding (1) could be interpreted to mean public support for market-based measures (e.g., taxes and permit trading) while finding (2) seems to support the use of information in the design of climate policy measures in order to encourage carbon dioxide-reducing behavior. Finally, our pilot study assumed that respondents’ preferences for the cost-sharing burden (equity) of measures might be defined in terms of an individual’s ability to pay. Given this assumption, our results indicate weak preferences for non-regressive cost distribution, but progressive cost distribution had no effect on choice. We offer several possible conclusions from this preliminary investigation into climate policy preferences.market-based mechanisms; information effects; equity; choice experiment; preferences

Influence of Brand Name in Variety Seeking Behavior of Consumers: An Empirical Analysis

The variety-seeking behavior and the brand choice among the consumers have been discussed extensively in the previous research contributions from the stochastic point of view. This study argues that although consumers are seeking novelty and unexpectedness in a brand that they have not bought before, their purchase will be selective, in reference to the empirical investigation. The study has been conducted in Mexican retail business environment with a focus to explore the tendency of decision making of consumers towards buying unfamiliar brands in considering the importance of brand name. The discussions in the paper have been woven around the issues of perceived risk, perceived brand difference, association of brand name and customer values as major influencing factors in making buying decisions towards unfamiliar brands. The study reveals that the perceptions on brand name in reference to brand risk and brand differences have been the prime factors in making buying decision for new brands among the consumers. Consumers also ascertain the brand name associated with the unfamiliar brands as they feel high risk averse and entangle in decision making with perceived brand differences.Cognitive behavior, personality traits, brand loyalty, brand perceptions, decision making, customer value