The Role Of Label Claims In Effecting Consumer Intention To Buy

1. By Dr. John L. Stanton Professor of Food Marketing Saint Joseph's University jstanton@sju.edu The Role Of Label Claims In Effecting Consumer Intention To Buy

2. Just look at the words: Pink Slim and super food It should come as no surprise that what we put on the label or a package can have a significant influence in the intention to buy

3. The label or package is still one of the most effective ways to communicate to consumers • Pilditch defined packaging as “the silent salesman” as early as 1957. And Lewis expanded Pilditch’s views in 1991, stating that "good packaging is far more than a salesman, it is a flag of recognition and a symbol of values."

4. The Label And Package Is Important! • In 1977 McDaniel and Baker said that “the label on the packaging provides the manufacturer with the final opportunity to persuade prospective buyers prior to brand selection.”

5. Yet many fresh produce suppliers don’t use any descriptive words on the label

6. Our research study focused on the way a company states package or label claims • That is most all claims could be focused as a positive statement or for the same topic in a negative fashion. For example, one could put on the label all natural or they could say no additives.

7. Although the bulk of the research was done on the dairy category, apples and tomatoes were also in the study.

8. Five Questions in the study were • Are positive attributes/benefits are more frequently mentioned by consumers in an unaided situation than negative claims • Do positive attributes/benefits expressed on the FOP have the greater impact on consumers’ encouragement to buy • When the same claim exist on the label in both the positive and negative wording form, does the impact of the positive claim outweigh the impact of the negative on consumers’ intention to buy • Does placing negative statement (e.g. NO GMOs) on the label decreases overall perception of the product category • Will Consumers switch from the product with the negative claim for the product without it (meaning to the product that contains substance that claimed to be negative originally) for the price discount

9. When we asked consumers to tell us about what comes to mind when we give them a specific product category such as milk, they wrote mostly all positive statements.There unaided thoughts about milk were good thoughts, such as build strong bones, good source of calcium etc.Similar findings existed for the other categories we discussed.

10. Additionally, when we gave consumers a stack of index cards with various attributes relating to dairy the following 6 attributes were the ones consumers most associated with Dairy: 1. Taste great 2. Guaranteed Fresh 3. Organic 4. No pesticides 5. All Natural 6. Highest quality quarantinedNote that one out of the six has a negative connotation

11. Note that the positive attributes (“Excellent Source of Vitamin D” and “Good Source of Protein”) had more mentions than the “Made without the use of artificial hormones” attribute; and “Excellent Source of Calcium” had the same number of mentions as the “Made without the use of artificial hormones” attribute

12. The conclusion is: people generally have very positive thoughts of our foods particularly dairy and produce when it's not positioned in any kind of positive or negative situation Similar results were found for the produce categories

13. When these positive attributes are placed on packages and labels they have the effect of positively increasing the intention to buy.It is reinforcing what people already believed, however fresh products often have no claims. Yet canned and frozen produce often make the claims. • Note claims on the competitive • canned product

14. Although not shown in this presentation, we used discrete choice experimentation modeling to determine the impact on intention to buy for specific product attributes.

15. When we placed negative claims on the labels the following results are shown below:

16. When you put negative statements such as no pesticides, no GMOs etc. the intention to buy goes down even though very few consumers indicated this was top of mind in an unaided situation

17. For example when the label includes “No artificial ingredients” much more impactful then when “All natural” is on the label. Yet both have the same meaning However , when the same claim exist on the label in both the positive and negative wording form, the negative version n has a much greater impact on consumers’ intention to buy.

18. A follow up question is how deeply are these negative claims held by consumers. • That is how much money would it take to get consumers to shift from a product that no negative claims to a product without that claim. • Although this experiment was only done on milk, we found the when consumers were offered Rbst product and traditional milk at the same price, we found 65% of the consumers choose Rbst free over traditional, but when the price was slightly lower a high proportion of consumers switched to from organic to traditional.

19. One last experiment • The issue is were consumers more effected by the actual claim or was it just that the responded to “no…” • In the first part of the experiment we used a ingredient that was not in any of the produce products but was a real negative factor. We included in our label “no acrylamides” (associated only with cooked oils). • A significant number of consumers had this negatively effect their intention to buy. Since acrylamides was a real issue just not in this category consumers may not had the awareness to understand. • In the second part we included a totally made up factor, no phylecomides.” and this similarly had a negative impact on intention to buy.

20. Conclusions • What we put on labels and packages has a major impact on consumers perceptions of our products. • The more we emphasize the negative of our products the more consumers are not likely to buy. • I believe the food industry is shooting themselves in the foot when they insist on no this and no that in our foods. Consumers don’t seem sophisticated to evaluate the negatives. • For the most part consumers have very positive images of our products and are only negatively influence when we use negative claims. • When you say no pesticide or herbicide on some products it casts a negative shadow on all thee other products.

21. Conclusions • Consumers do not bring up negative claims as top of mind claims when presented in a unaided manner (based on secondary and quality data) • Consumers are more likely to notice the negative over the positive claim on the same attribute/benefit. For example, when exposed to the label claim “No artificial ingredients” (negative claim) respondents rate the claim much higher than “All Natural” (positive claim), representing the same concept. • Most fresh products have virtually no attributes and benefits listed on the label or package.