Agriculture Reference
In-Depth Information
Documented effects of shelf placement on product choice in a supermarket can also be used
to increase sales of organic products. The more shelf space an item receives the more likely
is it that it is selected (Desment & Renaudin, 1998; Dreze et al., 1994). In the supermarket the
shelf space is usually distributed in strong disfavour of organically produced products. A
position on eye or hand level also has a strong positive effect on sales numbers (Campo &
Gijsbrechts, 2005). Items presented earlier on the shelf as well as near focal items (items
highly preferred) also tend to have higher likelihoods of being sold (Simonson and Winer,
1992). Such effects are especially relevant, when the customers are under time pressure or
are not motivated to engage in the shopping decision (e.g., after work shopping).
Interestingly the effect of shelf-placement has been under-researched when it comes to
organic food. One of the very few exceptions is a very comprehensive study by van Nierop
et al. (2010). They found the best market share of organic products when they were
presented in the middle of the shelf space and at eye level. They furthermore found that
placing all organic food products in one corner of the supermarket does not increase sales
but sorting the whole product category by brand (organic as well as conventional) does.
3.3 Price
Many studies found that higher prices for organic produce are the main barrier named by
customers when asked why they do not buy organic (see Hughner et al, 2007, for a review).
The relation is, however, more complex than it appears at first glance. When asked, if they
are willing to pay a premium for organically grown food, consumers usually state that they
are (Batte et al., 2007). Interestingly, the amount people state they are willing to pay as a
premium is in many food categories lower than the actual premium (Millock et al., 2002)
and this might not be a coincidence: Stating to be willing to pay a premium but at the same
time naming an amount for the acceptable premium that lies below the actual premium is a
very convenient way to both keep a clear conscience (“I am willing to financially support
organic farming…”) and continue not buying (“… but the actual premium is too high”).
Soler et al. (2002) however present an alternative explanation: Based on results from their
experimental study they assume that the decision to pay a premium is two-fold, first a
decision is made, if a premium should be paid or not. About 70% of their participants were
willing to pay a premium. This decision is more determined by attitudes towards
environment and food safety. Then a second decision is made on the amount of the
premium that is acceptable. This decision is more determined by socio-economic variables.
Factors that have been shown to impact willingness to pay for organic products are a
perceived added value with respect to food quality and security as well as trust in the
producers and marketing chain (Krystallis & Chryssohoidis, 2005). Furthermore, willingness
to pay increases with strong pro-environmental attitudes and young children in the
household (Soler et al., 2002). They found that willingness to pay for an organic product is
higher if a reference price for a conventional product is named and if information about the
organic alternative is given orally (as opposed to written).
Interestingly, having to pay a premium on organic food is not only a barrier to purchase but
also has a positive effect on the perception of the quality: Hill and Lynchehaun (2002) found
that consumers used the price difference to infer that organic products both have better
quality and taste. Also Cicia et al. (2002) demonstrated that customers used the price as a
proxy to determine the quality of organic olive oil. Too low prices on organic olive oil were
associated with it being of poor quality or not even truly organic.
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