Market Segmentation Analysis of Preferences for GM Derived Animal Foods in the UK

Abstract

This paper undertakes a detailed market segmentation analysis of the demand for GM derived animal foods in the UK with the aim of illustrating how this analysis can provide distinct information that can assists in evaluating the welfare impacts of proposed changes to the EU's GM labelling policy. The specific modelling approach employed was the latent segment (LS) model which allows for the simultaneous determination and explanation of both segment membership and product choice. Based on psychometric and demographic variables as well as choice data, the LS model was able to identify three distinct and behaviourally consistent consumer segments. Further, the LS model was found to outperform alternative econometric approaches for accounting for preference heterogeneity. Finally, our analysis shows how it can yield distinct information over the segmented nature of the food market that can uniquely assist both European policy makers in designing GM labelling regimes and public awareness campaigns as well as the agricultural and food industry in developing pricing, marketing and new product development strategies.

Optimal management of wetlands: Quantifying trade‐offs between flood risks, recreation, and biodiversity conservation

“…Full details on the specification of the LCM approach can be found in, for example, work by Hynes et al [2008]. An alternative method for modeling unobserved heterogeneity is the random parameter logit (RPL) model which allows model parameters to vary randomly over individuals, and assumes that each individual represents a segment [Train, 1998;Kontoleon and Yabe, 2006]. In other words the LCM is a special case of the RPL model, where the random coefficient is discretely distributed, i.e., there are finite number of segments, in contrast to a RPL model where the coefficient has a continuous distribution.…”

“…Scarpa et al [2005] applied this method to study preferences over water services attributes. Hu et al [2004] and Kontoleon and Yabe [2006] used the LCM to investigate consumers' preferences for food attributes. Aldrich et al [2007] estimated the heterogeneity over public's preferences for endangered species using LCM.…”

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“…While several studies conclude that socio-demographic variables (alone) do not have a strong explanatory power to predict acceptance of GM food products (Bredahl et al, 1998;Baker and Burnham, 2001;Kontoleon and Yabe, 2006;Anand et al, 2007), other studies found several socio-demographic differences in GM food acceptance (Hoban, 1998;Chen and Li, 2007). For example, women Moerbeek and Casimir, 2005), older people (Ganiere et al, 2006) and those with a low education (Hoban, 1998;Traill et al, 2004) or a low income level (Wachenheim et al, 2008;Yee et al, 2008) are generally more skeptical of GM food.…”

“…GM derived animal foods UK 1 -Opponents (7.6 %) 2 -Cautious (41.3 %) 3 -Optimists (51.1 %) (Kontoleon and Yabe, 2006) GM maize South Africa 1 -Anti-GM, brand aware (35 %) 2 -Brand unaware, farmer sympathetic (20 %) 3 -GM consumer benefit, brand aware (25 %) 4 -Brand aware, Pro-GM (20 %) (Vermeulen et al, 2005) GM oil seed a Australia 1 -Conservatives (28 %) 2 -Confident protectors (51 %) 3 -Anti-GM (20 %) (Cox et al, 2008) GM tofu Taiwan 1 -Conventional Buyer (45 %) 2 -GMO Buyer (32 %) 3 -Non-GMO buyer (23 %) (Jan et al, 2007) Note: c = chocolate; t = tomato a To our knowledge these are the only segmentation studies solely focusing on GM products with consumer benefits, the socalled 2 nd generation GM products; b 4 th , 5 th , 6 th and 7 th Eurobarometer Surveys are conducted in 1999, 2002, 2005 and 2010, respectively; c In the 5 th Eurobarometer 'undecided' is replaced by 'risk-tolerant'; d Although the authors discovered three additional, smaller segments with respect to GM tomatoes, only the common clusters are shown.…”

“…Several segmentation studies focus on specific GM food products, such as GM apples (Kaye-Blake et al, 2007), GM chocolate and tomatoes in New Zealand (Gamble et al, 2000), foods derived from animals fed with GM feed in the United Kingdom (Kontoleon and Yabe, 2006), GM corn flakes in the United States (Baker and Burnham, 2001) and GM maize in South Africa (Vermeulen et al, 2005). All authors analyzed the market potential for products with improved agricultural traits, except for O 'Conner et al (2005) and Cox et al (2008).…”