Asymmetric demand patterns for products with added nutritional benefits and products without nutritional benefits
Abstract
Purpose
This paper aims to investigate consumers’ demand patterns for products with nutritional benefits and products with no nutritional benefits across processed healthy and unhealthy foods. This paper integrates price changes (i.e. increases and decreases) into a demand model and quantifies their relative impact on the quantity of food purchased. First, how demand patterns vary across processed healthy and unhealthy products is investigated; second, how demand patterns vary across nutrition-benefited (NB) products and non-nutrition-benefited (NNB) products is examined; and third, how consumers respond to price increases and decreases for NB across processed healthy and unhealthy foods is investigated.
Design/methodology/approach
Here, a demand model quantifying scenarios for price changes in consumer food choice behaviour is proposed, and controlled for heterogeneity at household, store and brand levels.
Findings
Consumers exhibit greater sensitivity to price decreases and less sensitivity to price increases across both processed healthy and unhealthy foods. Moreover, the research shows that consumers’ demand sensitivity is greater for NNB products than for NB products, supporting our prediction that NB products have higher brand equity than NNB products. Furthermore, the research shows that consumers are more responsive to price decreases than price increases for processed healthy NB foods, but more responsive to price increases than price decreases for unhealthy NB foods. The findings suggest that consumers exhibit a desirable demand pattern for products with nutritional benefits.
Originality/value
Although studies on the effects of nutritional benefits on demand have proliferated in recent years, researchers have only estimated their impact without considering the effect of price changes. This paper contributes by examining consumers’ price sensitivity for NB products across processed healthy and unhealthy foods based on consumer scanner data, considering both directionalities of price changes.
Keywords
Acknowledgements
The authors thank TNS UK Ltd. for providing the panel and survey data used in this research. The use of TNS UK Ltd. data in this work does not imply the endorsement of TNS UK Ltd. in relation to the interpretation or analysis of the data. All errors and omissions remain the responsibility of the authors. Ji Yan thanks financial support received from China National Social Science Fund (Grant No. 12CJL015), The Humanities and Social Science Project of the Ministry of Education (Grant No. 12YJC790222) and the Social Science Funding of Hunan Province (Grant No. 11YBA282). Kun Tian thanks the financial support from China National Social Science Fund (Grant No. 11CJL017) and the Social Science Funding of Hunan Province (Grant No. 2010YBA215).
Citation
Yan, J., Tian, K., Heravi, S. and Morgan, P. (2016), "Asymmetric demand patterns for products with added nutritional benefits and products without nutritional benefits", European Journal of Marketing, Vol. 50 No. 9/10, pp. 1672-1702. https://doi.org/10.1108/EJM-06-2015-0356
Publisher
:Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited