Rating and Investigating Factors Affecting Consumer Preferences for Organic Products in Mashhad City

مجله اقتصاد و توسعه کشاورزی

Article 2, Volume 33, Issue 3 - Serial Number 45, October 2019, Pages 239-250   

Document Type: Research Article

DOI: 10.22067/jead2.v33i3.73853

Authors

M. Ghorbani^* ; A.H. Tohidi; P. Alizadeh

Ferdowsi University of Mashhad

Abstract

Introduction: Organic farming plays an important role in protecting the environment, maintaining non-renewable resources, improving the food quality, reducing the production of unnecessary products, and promoting market- oriented agricultural sector. In fact, organic farming make a significant contribution in improving the quality of the environment and natural resources, and also it has a positive effect on the quality of food supply and the promotion of public health. Given the many benefits of organic products, the market for these products has been increasingly considered by researchers, government officials and consumers. First step in developing the market for organic products is to meet the needs and demands of consumers. Recognizing consumer behavior and investigating the factors affecting it contributes significantly in success of any economic system. Besides, in advanced marketing studies, the process of identifying consumer choice is very crucial. Contrary to economists' views, consumers give little weight to benefits and costs in their decision making, and their choices are based on people's behavior, habits and other factors that may speed up the decision making. Consumer preferences for organic products depend on many factors and the importance of each of these factors varies among different consumers. Therefore, the main aim of this study is to rate and evaluate factors affecting the consumer preferences for organic products (fruitage, vegetables and cucurbits) in Mashhad city.
Materials and Methods: Many marketing researchers use regression models to evaluate consumer decisions. In these models, decision variables are definitive part of utility function which is used to calculate how to choose a product. Linearity of utility function is the vital hypothesis. To specify a non-linear model, it is necessary to use variables that can show non-linear effects (For example, including the quadratic term of variables). However, this requires the insertion of assumptions about the nature of the utility function which ultimately leads to specification bias, and subsequently misinterpretation and unreasonable applications in marketing studies. Modeling complex processes is one of the advantages of artificial neural networks, and in this approach, it is not necessary to specify a mathematical relationship between the variables. The nonlinear and complex interactions can be considered between system variables using artificial neural network model. In this study in order to rate and evaluate factors affecting consumers preferences for organic products (fruitage, vegetables and cucurbits) an artificial neural network has been used that is consist of three dependent or target variables. Also, in order to evaluate the importance of the explanatory variables of the artificial neural network, partial derivatives approach has been used. Therefore, the use of three output variables on artificial neural networks simultaneously and partial derivative approach was distinctive features of this study compared with previous ones. Data is collected through questionnaires from a total of 175 households living in Mashhad. Age, gender, education, household size, number of household members under 10 years, number of household members over 65 years, price, having information on organic products, product appearance, having information on the supply of organic products, nutritional values, ease of access, the supply of organic products during the year and having labels were the input variables of artificial neural network. Consumer preferences for the purchase of organic fruitage, vegetables and cucurbits were the target variables of the artificial neural network.
Results and Discussion: The results indicate that price has the greatest influence on willingness to consume organic products among all other factors. The price effect on willingness to consume organic products is different among individual consumers, and it's independent of the product. This finding suggested that the price of organic products had a significant impact on consumer purchasing decisions in comparison with other marketing mix elements.
Conclusion: The adoption and implementation of marketing strategies based on price play a very important role in the growth of organic products markets. The results of the study indicate that, for each consumer and each product, the price had almost the similar effects on willingness to choose. Hence, it is recommended that the similar pricing strategies be used for these three organic products.

Keywords

Marketing Strategy; Preferences; Organic products

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