THE IMPACT OF LABELING OF NEW-AGED FOODS


TO CONSUMER PERCEPTION: A FRENCH PERSPECTIVE


 


INTRODUCTION


The food industry is continuously challenged by government policies and issues of consumer loyalty.  Labeling is one important channel for companies to address the information needs of several stakeholders.  In the advent of technological improvements, the role of product labels intensifies to mitigate negative implications of introducing the new-aged food.  For genetically-modified (GM) foods, political and economic reasons resulted to total ban while highlighting negative health effects undermine GM food’s benefits to shortage of food ( 2000).   In the current study, the impact of food labeling for the new-aged food will be studied.  New-aged food is not limited to GM foods but also includes product developments and innovations with artificial products such as sugar-free soda or other improvements motivated by competition and globalization.         


 


BACKGROUND


Increased Used of Labeling


            In most parts of Europe, the battle of colas had reached its new horizon wherein carbonated drinks dominated by Coca-Cola were gradually reaching stagnation.  The still drink sector took most of the industry growth in Emus’ soft drink industry due to consumer shift of preference to health-related attributes of cola brands.  This affects the labeling of Coca-Cola to minimize health adversaries of their premier product line.  It launched a website where it described its products as “complete” in the aspects of health, taste, style and innovation.  Website labeling is tapped due to the pending resolution for user-oriented organizational framework which is lacking in the current product labels (2004).  Product labels for cola competitors also became crucial on their packaging.  Some manufacturers produce convenient labels through introduction of tetra-packing for easy storage of end users.  Further, environmental-friendly labels used recyclable and biodegradable materials to not only increase shelf life but also protect the environment.    


 


            As stated earlier, GM foods have political relevance which cannot reach consumers until approval of authorities.  In short, they are regulated because of some hesitant cultures willing to compromise norms with technological breakthrough.  In the case of Emus’ requirement to US GM food exporters, product labeling was cited as one of the key criterion for the latter to access market in the former (2000).  The issue of labeling is also cited as a mitigating element to resolve conflicting demands of national agencies that regulates food industry (Baird & Deal, 2003).  For example, the level of safety of GM foods in the US was assessed by Food and Drug Administration (FDA) as safe for humans, animals and plants.  On the contrary, Department of Agriculture (USDA) requires field testing to assure that native plants are protected while Environmental Protection Agency (EPA) re-evaluates GM foods for assurance on wildlife from pesticide elements.              


Past Researches


One of the most critical information observed in food labels is the nutritional content or facts.  Caswell (1992) together with  (1982) found that the level of nutritional information in food labels increased in the 1990s.  However, the increasing prominence of food labels is related to educational attainment of the consumers (Moorman, 1990).  This finding can undermine the proven relationship of consumer demand and nutritional information (1993) specifically demands for dairy products ( 1993).  These findings are extended by (1995).  They concluded through analysis of nutrition information from 1987-1988 NCHS data that using food labels as basis for consumption decision is related to food expenditure at home, earnings, size of household, education, race of the head of the family and degree of urbanization in the vicinity.


 


In Oregon, public opinion through voting was initiated for the purpose of passing a decree where food labels should be required to GM foods.  However, Grebe (2004) cited that the assembly failed to pass the measure due to following reasons; namely, increase in price, redundancy with FDA safety evaluations and cost impact to small farmers.  Grebe also concluded that the supporters of the measure had less concern with safety of the GM foods rather to know their contents/ ingredients before consumption.  They intend to satisfy their mental state and be critical with upright assurance offered by food authorities or the companies themselves.  This can be related to the finding of an American survey that over 40% of respondents do not trust the food-safety information of food labels (citation number 1).  


 


Many researchers also experimented to find the optimal food labeling format and structure.  For example,(1996) confirmed that indicating percentage of daily required nutrients improved labeling compared to emphasizing and segregating nutrients.  In contrast, inclusion of too many information and widening of nutritional context reduced the performance of labels.  Viswanathan (1994) proved that increasing recall for nutritional content is supported by presenting then in text rather numeric forms.  Popper & Murray (1989) considered font size and color quality of labels.  All of these researchers together with (1994) gave positive attribute to summarizing nutritional information that can increase retention and overall performance. 


 


Lipinski, 1998) indicated that nutritional labels would likely be used by unemployed consumers, those consumers that are highly concerned with health and those that are critical on nutritional guidelines.  In contrast, consumers whose main source of nutritional information is media would less likely use labels as reference.  With regards to the location of health claims, Wan sink (2003) suggested that shorter health claims should be located on the front label while full version should be located at the back label.  In doing this suggestion, the believability of health claims would rise.  Further, inability to maximize both back and front labels reflects the lacking of the product to communicate to indirect consumers and users.    


 


 (1999) found that food nutrition labels provide consumers with resource to determine nutritional contents of similar product lines in actual purchases.  Bender & Derby (1992) concluded that consumers are willing to pay a premium for nutritional information.  In the US, label use had positive implications to improving diet of Americans wherein benefits are related to the type of label information (Capps, Kim & Nagy, 2001).  This study is a working generalization of past research of Russo, (1986).  They found that nutritional or positive labeling in cereal brands had less affected consumer preferences compared to sugar content or negative labeling. (1997) concluded that consumers reduced their perception of nutritional value of food products when nutritional information and health claim were both included compared to single appearance on the label.  


 


CONCEPTUAL FRAMEWORK


During corporate crises/ scandals, good companies are given the benefit of the doubt (Dean, 2004).  Consumers will continue to place favor on them regardless they will act or not act with the regards to the event.  In the contrary, bad companies are judged according to the appropriateness of their response.  Firms that held themselves as accountable during crises are more favored than those who blame others or the tragedy itself.  Also, on the verge of ambiguity to the event, companies are held responsible for the course of action to mitigate the final result.  Lastly, good firms will loose a great deal of reputation when proved accountable for the crises.


 


Doubt on the effectiveness of labeling can be mitigated by assuming that the consumer’s purpose of product-related information will determine its knowledge on safety, perceptions of safety, and propensity of following safety instructions (Deters & Gold Haber 1989).  There are two types of information processing objectives; namely, memory-set and impression set.  The former is used when the user of the product has high interest to use it while the reverse is true to the latter.  Also in the former, the user would try to acquire as much information as possible before using the product.   In contrast, the latter with the aid of “gut-feel” will merely look for general warnings such as crossbones, other signs and hazardous ingredient. 


 


Further, memory demands more time at the processing stage and more certainty from the user in the action stage (Deters & Gold Haber 1989).  In the contrary, impression requires lesser time due to pre-determined product feature and the user tends to have spontaneous judgment.  Written messages as in product labels are considered useful for recalling purposes to information compared to other media.  The space in labels can accommodate lengthy instructions but this does not mean that it is more appealing or persuasive to the consumer.  The increased usage of the product reduces significance or importance of labels and increase risk-taking behavior of the user with the product due to familiarity effects.


 


            Excellent customer service (ECC) in the four Cs of consumers can be obtained through intensifying efforts in each area of consideration.  Customer solution is merely viewed as the state wherein a certain product can offer valuable attributes to customers at acceptable price (Porter, 1980, pp. 35-40).  With ECC, customer solution should exceed expectations of a customer after the product is delivered and provide after sales services.  This means that customer evaluation process is broadened and the product offering should include return and exchange privilege.  On the other hand, customer cost is related to cost leadership strategy where product attributes demand lower-than-rivalry cost at acceptable level of quality.  Seeing this within ECC framework, efficiencies derived in manufacturing and other value chain activities should be reflected in providing discounts, bulk-buying opportunities and other motivations. 


 


            Customer convenience is cited as a powerful tool in succeeding marketing efforts (Proctor, 2000) because it reflects the accessibility of products to consumers.  ECC in customer convenience is reflected by the ability of companies to partner with retailers at best in larger scales to provide optimal accessibility to customers.  However, such strategy is difficult due to control issues and loosing reputation from incompetent and uncooperative retailers.  Last but not the least; customer communication is considered the heart of the customer evaluation process.  This factor is vital because it rationalizes the entire aspect of ESC through feedback from intended consumers.  It directs the company to marketing strategies.  With ECC, corporate messages that are to be sent to consumers should be aligned to its audited resources and capabilities.  This reduces the risk of giving false hopes and misleading the consumers regarding the tangible attributes of the products.       


 



 


METHODOLOGY AND HYPOTHESIS


            The French consumers will be applied with case study and exploration analysis.  This method will be used to test two (2) hypotheses; namely, labeling will affect perception of French consumers to new-aged foods and company/ product attributes will dictate the success in labeling per se in its effort to get favorable consumer perception.  Using data from recent available reports such as Euro Monitor and Gain Reports, the behavior of French consumers will be identified.  With partial application of marketing concepts, the behaviors are also explained accordingly.          


 


RESULTS AND DISCUSSIONS


Consumer Behavior


In France, Dell launched expensive and hi-tech PCs that ran counter with its cost-effectiveness scheme from to direct marketing (as cited in Hindustan Times, 2005).  This evidenced that the country has strong market base who value industrial conventions over commercial ones.  Such notion is likely to gain merit as Dell turns to the meticulous high-end market.  When it comes to food, the convenience of food products is more preferable than its price due to constraints in increasing work hours especially for senior executives.  The additional costs would then be derived from work earnings.  On the other hand, high-ranking politicians are too busy with their public responsibilities that suggest efficient and reliable products seen in industrial conventions.  In contrasts, as incidence of single household rises (Euro Monitor International, 2005), these two high-end market niches would have some emphasis on packaged foods.


 


            Euro Monitor also pointed that there are only minimal consumers who give primary importance on the following food criteria: namely, health, environment and people who provided inputs.  In this respect, such portion (consistent with quality assumptions on this particular market) likely centered in the high-end market proving their emphasis on domestic, public and civic conventions.  In illustration, as organic farming unleashed its success in the French market, the past decade experienced a 300% increase in organic farmland and 500% increase in crops under organic cultivation in the country (Gain Report, 2005).  In effect, local harvests and local processed foods are perfectly embedded with French conventions.  Undoubtedly, conventions theory derived its roots from France.  They have the ability and willingness to be an industrial nation endowed with rich and quality agricultural products. 


 


            Even though the country is said to be underdeveloped in organic farming (of course, it is one of the pioneer) which is cited in the same report, the mere information about its nature and social implications has automatically “shock” the high-end market.  Approximately, they have intrinsic characteristic to have “higher and backed arrogance”.  As a result, the tendency of their behavior to be affected by economic adversaries and decline in aggregate purchasing power is far to be likely, except, perhaps when the government continues or much intensifies to “milk” on their wealth from above world standard taxes.  In this respect, the slow down of 2005 supply in dairy and meal replacement as well as sweet and savory snacks (Euro Monitor, 2005) makes importation acceptable to them.  Of course, this industrial convention should be coupled by other necessary conventions to increase their perceived value.


 


            The busy lifestyle of French people increases their tendency to snack (Euro Monitor, 2005).  This is coupled with decreasing time to prepare food estimated at a mere 20-minute routine every Sunday.  Industrial conventions again hold its emphasis that the market wanted quick and meal solutions found in convenience-based foods.  Thus, the form of packaging also is of great importance as contributory factor on convenience.  Further, French consumers move to balanced and healthy diet (Euro Monitor, 2005).  In this respect, domestic conventions is the key since the market is looking for natural flavors, less sugar rather sweetening agents, reduced-fat, no preservatives and less colorings.  Natural and traditional way of processing foods becomes the source of health benefit claims.  Taste and functionality of packaged foods should be met if any product is to succeed against stricter criteria of the high-end market.             


 


            As explicit admission, French market considers premium products of being healthier (Euro Monitor, 2005).  There are food scares in the country which undermines commercial for domestic and civic conventions.  The high-end market is exempted from the statement that “French consumers are more price sensitive than brand conscious” (Euro Monitor, 2005).  Due to this, discounters that make French retailers obtain marketing success aside from product differentiation and strategic location can even receive adverse reactions from the rich segment.  This is where the rule of “(changes in) price defines (changes in) quality” applies.  In this respect, the segment is expecting that quality products be located in specialty shops.  Innovation that is commonly known to manufacturers is useful for the market in terms of improving industrial and public conventions of their products.  In contrast, too much innovation (especially product modification and phase-outing) can lead to high-end market disloyalty due to possible loss of perceived domestic, public and civic conventions (as innovation may involve inorganic processes, de-marketing and labor-downsizing regimes).


 


CONCLUSION


            The meticulous consumers in France will tend to undermine labeling of new-aged foods especially when they are imported abroad.  It will affect and stimulate their perception but largely limited to negative connotation regarding health and environment adversaries of new-aged foods.  This admonition is backed-up by strong covenants in the country that local produced serves as the sole supplier of food that is safe.  With regards to company/ product attributes, French consumers will also reduce their importance in reference to perceiving a quality product.  Favorable perception is hard to obtain for new-aged products even if it is supplied by good companies and assured of product quality.  As long as they are imported, the labeling features of those products will automatically signal negative impressions.  The cultural interference of French consumers and available conventions would prevent new-aged food labeling to succeed positive perception.                   



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