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Price Versus Non-price Incentives for Participation in Quality Labeling: The Case of the German Fruit Juice Industry

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  • Herrmann, Roland
  • Bleich, Simon

Abstract

Quality assurance and labeling play an important and increasing role in firms’ marketing strategies. In almost all cases, a price incentive has been stressed as the major incentive for firms to participate in such schemes. We argue here that important non-price incentives for participation in quality labeling may exist, too. In German retailing, it can be observed that discount retailers are listing more and more foods with quality labels. Processors may then participate in voluntary quality labeling in order to enter the large and growing market of discount retailers. The price-premium versus the market-entry hypothesis are analyzed theo-retically. We investigate then in an empirical hedonic pricing model for the German fruit juice market and for participation in the quality label of the Deutsche Landwirtschafts-Gesellschaft (DLG) which of the two hypotheses is consistent with the data. There is strong support for the market-entry hypothesis.

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  • Herrmann, Roland & Bleich, Simon, 2013. "Price Versus Non-price Incentives for Participation in Quality Labeling: The Case of the German Fruit Juice Industry," 2013 International European Forum, February 18-22, 2013, Innsbruck-Igls, Austria 164756, International European Forum on System Dynamics and Innovation in Food Networks.
    • Handle: RePEc:ags:iefi13:164756
    DOI: 10.22004/ag.econ.164756
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    Keywords

    Agribusiness; Food Consumption/Nutrition/Food Safety; Food Security and Poverty; Industrial Organization; Research Methods/ Statistical Methods;
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