CONSUMER PERCEPTION OF FRESH MEAT QUALTITY: A FRAMEWORK FOR ANALYSIS

Prof. Dr. Tilman Becker

Institute for Agricultural Policy and Markets University of Hohenheim

Paper presented at Peterson Publications Ltd., Droitwich: published in the British Food Journal, Vol. 102, No. 3, 2000 p. 158-176.

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CONSUMER PERCEPTION OF FRESH MEAT QUALITY: A FRAMEWORK FOR ANALYSIS

Tilman Becker 23 September 1999

Dr. Tilman Becker Professor for Agricultural Markets and Marketing

Institute of Agricultural Policy and Markets University of Hohenheim

Stuttgart-Hohenheim, Germany

This study has been carried out with the financial support from the Commission of the

European Communities, Agriculture and Fisheries (FAIR) specific RTD programme CT95-

0046 “Quality Policy and Consumer Behaviour”. It does not necessarily reflect it's views and

in no way anticipates the Commission’s future policy in this area.

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Abstract: A model for analysis of consumer behaviour towards food is developed. This model

is intended to bridge the gap between the objective quality approach pursued in food sciences,

the product characteristics approach, and the subjectively perceived quality approach, the

product attribute approach as pursued in the consumer behaviour literature. The focus is on

the information processing by the consumer. Information on the product quality is supplied to

the consumer in the form of cues received while shopping or consuming. A distinction is

made between extrinsic and intrinsic cues, and between search-, experience-, and credence-

quality attributes. Within the credence attributes, three categories are distinguished: food

safety, health and all other credence quality attributes. It is demonstrated that public policy

should use minimum standards for regulating food safety, information and consumer

education on health issues and definitional standards to regulate the other credence qualities.

In the case of search quality no public intervention is needed. In the case of experience

quality, reputation is a means to reduce the quality erosion inherent for experience quality

attributes. In the case of those food which are not sold prepacked over the counter, these

means are restricted. Here the public regulators could consider backing up the private quality

policy efforts on labeling by implementing traceability schemes and defining the requirements

for specific label claims.

Keywords: Consumer Behaviour, Search-, Experience- and Credence Attributes, Extrinsic

and Intrinsic Cues, Characteristics, Quality Policy

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Quality is a term with a meaning depending on the background of the person using this term.

The term quality is very ambiguous if not contradictory used by different persons or even by

the same person in different instances. Accordingly we will start here with the definition of

quality as agreed on by most people working in the area of food quality. After defining quality

and quality policy generally enough to accomplish very different people and instances, we

will concentrate on the conceptualization of quality as perceived by the consumer and by the

supply chain.

The International Organization of Standardization (ISO) supplies us with the most popular

and probably the only definition on food quality agreed on by almost all people coming from

different backgrounds and working in this area, either in politics, industry or sciences,

defining quality as: "the totality of features and characteristics of a product or service that

bear on its ability to satisfy stated or implied needs." (ISO 8402)

The Total Quality Management literature does not provide a more detailed definition: Quality

is according to Crosby the "conformance to requirements", or quality, as defined by Juran is

"fitness for purpose"[1]. Rather similar the German Association for Quality: “quality is the

entirety of features and characteristics of a product, which refers to the fitness to fulfill given

needs“ [2].

It is important to note that the definition of quality, in particular meat quality, has undergone

important changes in the last decades. In the 60s and 70s an approach, which the author

denotes as the technological product characteristics approach, was the popular one pursued in

defining meat quality. This is demonstrated by the following definition from the 70s: Quality

is the sum of all sensoric, dietetic, hygienic, toxicological and processing-technological

characteristics of meat [3]. This definition hardly takes those aspects into account, which are

important for the quality as perceived by the consumer.

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While defining quality according to the ISO, it leads us to the definition of quality policy,

which is given by the ISO as well: "Quality policy are the overall intentions and directions of

the organization as regards quality" (ISO 8402). Quality assurance and quality control are

regarded here as subsets of quality policy and as such are included in quality policy.

This definition of quality policy is devoted to private organizations, firms, cooperatives,

clubs, groups etc. When including the political arena, the definition has to be restated in this

way:

"Quality policy are the overall intentions and directions of public and private

organizations as regards quality."

We will pursue here a total quality policy concept, total in the sense, that public and private

quality policy both are included. Both are interacting and without further considerations their

role is not clearly defined. It is part of our research effort, to clearly define the areas where

public and/or private quality policy efforts are needed. Public and private quality policy have

to be integrated in a total quality policy approach. The total quality management approach

popular in the business literature belongs to private quality policy and as such is only part of

FIGURE 1: STEPS TO TOTAL QUALITY POLICY

PDO, PGI, TSG

Consumer oriented quality

HACCP, ISO 9000Efficient Consumer Resp.

Process oriented quality

EUROP-NORMProcess quality control

Product oriented quality

Product quality control

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total quality policy, as defined here. We regard private quality policy or management only as

one part of total quality policy.

The approach towards quality favoured in the 60's and 70's was targeted towards product

oriented quality. In the 80's and 90's emphasis was shifting to the process quality approach.

The consumer oriented quality is the approach chosen in present quality policy.

This change in emphasis in quality policy is shared by both, private and public quality policy.

The emphasis of private quality assurance moved from the product to the process to the

consumer orientation. The emphasis of public quality assurance moved from regulating the

product quality to regulating the process of quality. Public policy is now about taking care of

consumer needs, for example by defining and protecting regional specialities.

Private quality assurance in the 1960's and 1970's relied on controlling the product before it

left the firm and reached the costumer. This proved to be a rather expensive way to assure a

certain quality. The cost incurred with product failures detected at the end of the production

chain (within the firm) could be reduced by monitoring the product during the whole

production, or, what is equivalent, monitoring the process of producing the product.

Public quality policy up to the 1980's showed the same emphasis on product control like

private quality policy. The recipe harmonization approach was dominating legislational

efforts. An example of the orientation of public quality policy on the product is the carcass

classification according to the EUROP "quality" grading.1

1 It is important to note, that this grading is established as a trade standard, widely used in the trade between

farmers and abattoirs and for the trade between abattoirs and the further stages of processing. The carcase grading is based on a classification of quality, as it is of importance for the processing industry. This standard is not communicted to the consumer. The criteria used for grading seem to have little relevance for quality as perceived by the consumer. In the present form, the carcass classification is an intra-industry trade standard. This standard has been introduced not at least to make price quotations more transparent.

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In the 80's and 90's the emphasis in public and private control of quality moved from product

to process control. In the industry the approach of Hazard Analysis and Critical Control Points

(HACCP) gained increasing popularity. Public quality policy picked up this approach very

eagerly. While HACCP was voluntary till the beginning of the 90's, with the food hygiene

directive (93/43/EEC) it became mandatory in the legislation of the Member States. This is an

interesting example of a process standard which was first established on the market before

being picked up by regulators and made mandatory.

The ISO 9000 is another example of a voluntary public process quality standard. This

approach to monitor the production process was designed by the ISO for military uses. Later

it became an international standard widely accepted by the industry. The importance of this

process quality standard is minor for the meat supply chain compared to other industries, like

the car industry. But, to a different extent in different countries, this standard is accepted in

general by the meat market.

Product and process standards like carcass classification or ISO 9000 are not communicated

to the consumer. These standards are mainly devoted to assure the quality needed for further

processing, the process oriented quality, but not the quality as demanded by the final meat

consumer.

The approach becoming popular in private quality management in the 90's is "Efficient

Consumer Response". With the change of the food markets from markets in short supply to

markets with short demand but ample supply consumers' importance increased. The growing

income and the decreasing share of income devoted to food strengthened this development.

Consumers basic needs for food were satisfied and additional issues became important. It is

well known, that increasing income results in the demand for product quality attributes, like

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animal welfare or environmental issues, which have hardly any importance in low income

countries.

"Efficient Consumer Response" in its initial stage is mostly targeted to decrease storage cost,

but includes much more than this. Efficient consumer response means to take the needs of the

consumer as the overall objective of quality policy. It insures that these needs are efficiently

responded by the supply side. The information on consumer needs is of growing importance.

This definitely holds for successful private quality management.

As well in the area of public quality policy first efforts in this direction have been made. The

present approach towards quality is characterized this way by the Commission: "Alongside

rules governing organic production methods, the mainstays of European quality policy are the

rules on the protection of geographical indications (PGI), the protection of designations of

origin (PDO) of agricultural products and foodstuffs (Regulation (EEC) 2081/92) and the

rules on certificates of specific character for agricultural products and foodstuffs (Regulation

(EEC) 2082/92."2 These regulations have been amended.3 Spain, France, Portugal and the

United Kingdom have already registered several fresh meats under the PGI.

Furthermore, a regulation on organic production (2092/91/EEC) lays down harmonised rules

on the labelling, production and inspection of agricultural products bearing or intended to bear

indications referring to organic production methods. A proposal for extending this regulation

to include livestock production was presented by the Commission in July 1996.

Another effort in this direction is the establishment of a system for the identification and

registration of bovine animals and the labelling of beef and beef products. The identification

and registration of bovine animals was already established before the BSE-crisis to control the

2 Compare http://europa.eu.int/en/comm/dg06/qual/en/syste_en.htm as of 24.09.98. 3 All relevant regulations and directives are listed in Bund für Lebensmittelrecht und Lebensmittelkunde

e.V.(ed.): Das gemeinschaftliche Lebensmittelrecht, Bonn, 1998.

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payments of premia. As an answer to the BSE-crisis, this identification and registration

system was extended to the whole production chain. This identification system is the basis for

verifying and controlling labelling and advertising claims on country of origin, method of

fattening and feeding, information on slaughtering, or any other "characteristics or production

conditions of the labelled meat", the operator or organization wishes to provide information

on to the consumer.

It is not only a prerequisite for successful private consumer oriented quality management to

analyse consumer needs, but more so for public quality policy. This article is intended to

present the framework, on which an economic evaluation of quality policy has to be based.

This framework intends to link together quality, as perceived by the consumer, and quality, as

managed and produced by private and regulated by public organizations.

The definition of quality, presented in the beginning of this article, is rather general and not

differentiated enough to serve as a basis for a conceptual framework to draw conclusions for

private and public quality policy. Such a framework needs to be normative, so that

conclusions to improve public and private quality policy can be drawn. This framework is

developed in this article.

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Figure 2: FOOD QUALITY PERCEPTION IN THE EU 15February 1997

Some people think that the quality of food products sold in (our country) is improving, whilst others think it is getting worse. For each of the following products sold in (our country), please tell me if you think its quality is tending to improve or tending to get worse? (Show card) EU 15 average

in % of respondents

Tending to get worse Tending to improve NeitherFresh Meat: 45 32 23Fresh Fish: 32 38 31Fresh Vegetables: 28 44 28Fresh Fruit: 28 46 27Pree-Cooked Meals 25 43 32Eggs: 24 39 37Canned Foods: 23 38 39Fresh Milk: 21 42 36Bread and Bakery Products: 21 49 30Frozen Foods: 18 49 33Cheese: 17 48 35

Source: International Research Associates (INRA): Eurobarometer 47.0, 20 March 1997.

The decrease in meat consumption is accompanied by a large mistrust of consumers in the

quality of meat. A recent consumer survey of Eurobarometer demonstrates this very well. Of

all food products, the perceived quality of meat is getting relatively worse.

1. THE PRODUCT CHARACTERISTICS- AND THE PRODUCT ATTRIBUTES-APPROACH

We regard it as important to rebuild consumer confidence in the quality of meat. Accordingly

our framework distinguishes between categories of quality attribute cues according to their

degree of confidence and degree of performance in the process of integrating the information

received from quality cues by the consumer to judge the perceived quality of the product.

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Food quality is a rather complex issue. The approach towards food quality inherent in the

natural sciences is based on the measurability of quality characteristics. These measurable

features of a food product will be denoted as product characteristics. Though sensoric

methods are trying to "measure" meat quality, sensoric studies with trained sensoric experts

and untrained consumers clearly demonstrate, that the perceived quality differs between both

groups and within consumers [4]. Furthermore, sensoric studies concentrate exclusively on

the organoleptic quality.

Product characteristics are those features of a product which are used as (technical)

indicators for product quality and are (in principle) measurable with (standardized)

analytical (including sensoric) methods.

Product characteristics in this sense are the intrinsic product features. But not all product

characteristics are important for the consumer and the product attributes important for the

consumer may be not measurable with indicators.

In the food science literature on meat quality [5] four categories of product characteristics

are established:

• characteristics indicating the nutritional value: protein, fat, carbohydrate content, ash

content, digestibility, etc.

• characteristics indicating the processing quality: share-force, sarcomere length, pH-value,

colour, fatness, water-binding capacity etc.

• characteristics indicating the hygienic-toxicological quality: residues, contaminants,

micobacterial status, additives etc.

• characteristics indicating the sensoric quality: texture (tenderness, juiciness),

flavour/odour, and colour or appearance (marbling) etc.

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While the nutritional, the processing and the hygienic-toxicological evaluation of meat relies

mainly on laboratory methods to measure the respective quality characteristics, sensoric

studies rely on trained experts. The approach pursued in food science and technology is

focusing on the intrinsic product quality aspects. The consumer perception is not part of the

approach chosen in traditional food sciences. The consumer relies heavily on extrinsic cues

for quality selection, which is well demonstrated by the results of our consumer survey,

reported here in this special issue. Furthermore, these measurable quality characteristics only

correlate to a certain extent with the organoleptic quality attributes as perceived by the

individual consumer.

While the natural science approach, as pursued in the realm of food science (including

technology), is based on an objective quality concept, the consumer behaviour approach

towards food quality is based on the perceived quality paradigm. The objective product

characteristics are not in the centre of interest, rather the subjectively perceived product

attributes.

Product attributes are those features of a product, meeting consumer needs.

The term characteristics is mainly used in the food science literature, the term attributes is

more prominent in the consumer behaviour literature, though sometimes both terms are used

interchangeably in the literature. We will make a clearcut distinction between product

characteristics and product attributes.

The consumer receives information on product attributes during shopping and consuming. We

will distinguish this information from other information on product quality received from

media, word of mouth etc. We will call the chunks of information received while shopping

and consuming as cues to distinguish this kind of information from the information supplied

by media etc. Cues may be learned by inspecting and consuming the product. In the product

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characteristics approach technical indicators are used to measure product quality, in the

product attribute approach cues are used by the consumer to evaluate the performance of the

product with respect to these needs.

Figure 3: Attributes and way of confirmation

intrinsic cues extrinsic cuesSearch quality: colour, leanness, marbling brand/label, place, price,(quality in the shop) origin

Experience quality: colour, leanness, texture,(eating quality) gristle, tenderness, smell,

flavour, juiciness

Credence quality: freshness origin , producer, organic,(e.g. food safety, feed,concerns) hormones, fat/cholesterol,

antibiotics, salmonella

We will distinguish three categories of quality attribute cues:

• search quality (quality in the shop): quality attribute cues which become available at the

time of shopping: colour, leanness, marbling as intrinsic cues and brand/label, place of

purchase, price, and (in some cases) country of origin as extrinsic cues. These quality cues

are important for quality selection by the consumer.

• experience quality (eating quality): quality attribute cues which are available in use or

with consumption: colour, leanness, texture, free of gristle, tenderness, smell, flavour,

juiciness. These quality attribute cues or indicators are important for the organoleptic

quality perception by the consumer.

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• credence quality: quality attributes, which are of concern for the consumer but where no

cues are accessible in the process of buying and consuming: hormones, antibiotics,

fat/cholesterol, salmonella and other bacteria, BSE, what the animal was fed on,

brand/label, name of producer or farmer, organically produced, country of origin,

freshness, free range (for chicken). Information on credence quality is not supplied by

cues received during shopping and consuming, but here the consumer has to rely on other

information as delivered by media, word of mouth etc,

The credence quality attributes include safety, health or other concerns. Accordingly we will

distinguish between

• food safety (including hygiene) credence attributes

• health credence attributes,

• other quality credence attributes.

The distinction between search, experience and credence quality is well established not only

in the consumer behaviour literature but as well in the industrial organization literature which

originally came up with these categories [6, 7, 8] and from which the literature on consumer

behaviour made use [9].

Nelson [10] introduced the terms search and experience quality in the economic literature. His

distinction was motivated by the literature on optimal search, in particular by Stigler [11].4 To

maximize expected utility from search, an agent will search until the marginal expected cost

of search becomes greater than the marginal expected return. This sequential search will stop,

when the consumer has found a product, which offers an utility which is higher than the utility

of the product to be expected in the next search step.

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Shopping for a search quality good5 in several shops will increase the probability of finding a

shop offering the good at a comparatively low price. The more shops are visited, the lower the

expected best price available for the agent in one of the shops visited. In the case of

experience goods, the agent has not only the usual search cost, but the cost of testing the

good. According to Nelson [12] these cost have to be added: "Marginal cost will be different

in the experience case from that of search ..... The marginal cost of an experiment is the loss

in utility from consuming a brand a random rather than using the best brand that one has

already discovered."

The economic literature on credence quality goes back to Darby and Karni [13], who

introduced the term credence quality. They already made the distinction between search,

experience and credence quality: "We distinguish then three types of qualities associated with

a particular purchase: search qualities which are known before purchase, experience qualities

which are known costlessly only after purchase, and credence qualities, which are expensive

to judge even after purchase."

The usage of the term credence quality has undergone some modifications in the last decades.

Darby and Karni [14] used this term to analyse markets in which the information asymetries

between seller and buyer are such that sellers are also experts who determine costumers'

needs: "The possibility of this situation is suggested by the observation that in a considerable

number of cases involving medical, automotive, and other repair services, contrary to the

basic assumption of conventional demand theory, the consumer is unaware of the ability of

the repair service to satisfy a given want."

4 In the meantime search theory has developed further, compare for example Shy (1995), p. 421 ff. and the

literature given there. 5 A product merely consisting of search quality attributes hardly can be found, but Nelson and other early

empirical work on credence quality took goods as the basis for empirical analysis and not the attributes.

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This understanding of the term credence quality referring to goods and services whose sellers

are also the experts who determine the costumers' needs is used as the conceptual basis for a

growing branch in the economic literature. An overview on this literature is given by Emmons

[15]. This usage of the term credence quality is a more particular one than in the consumer

behaviour oriented literature. Here credence quality is defined as above. The results accruing

from the analysis of a supplier offering inspection and repair are of less importance for food

quality, and will not be covered here in more detail.

Although the concepts of search-, experience and credence quality are well established, their

definition is ambiguous. In particular the credence quality attributes sometimes are defined

differently in the literature. Our concept is similar to the one put forward by Anderson and

Philipsen6 [16] who classify the quality features according to their pre-purchase costs of

quality detection (pre-costs) and their post-purchase cost of quality detection (post-costs):

• "search attributes have low pre-costs of quality detection and thus allow the buyer to

shop around and find the best-quality specimen by simple inspection;

• experience attributes have high pre-costs but low post-costs since quality information is

obtained by the buyer as a by-product of use after the purchase; this information provides

input to the decision making about repeat purchases;

• credence attributes have high pre-costs and high post-costs of quality detection; as a

result the buyer has to rely on third-party judgements or on the seller's credentials, i.e. the

undisputed record of honesty, competence and determination with respect to the quality

of supply".

Empirical research testing whether these three categories are merely analytical constructs or

based on the perception of consumers is already available [17]. Consumers were asked: How

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wellgood can you judge the following features of a product before purchase, shortly after

purchase, later after purchase. Some durable consumer goods were included in the analysis,

accordingly the distinction between short and long term experience was made. The research

results demonstrate, that the quality evaluation by consumers of different features of a product

is different for the three categories. Furthermore, the grouping of attributes into these three

categories by experts and by consumers seem to be very similar. This research clearly

supports the categorization of quality attributes into search-, experience- and credence

attributes and clearly demonstrates furthermore, that consumers agree on the categorization of

a particular attribute with each other. This distinction seems to be rather familiar to

consumers, though surely more implicitly than clearly understood. As such, the distinction on

which we will base our further analysis seems to be rather "natural".

In sensoric tests a distinction is made between judging products by inspecting, by taste or

judging the "quality" [18]. This distinction corresponds with our distinction between search

and experience quality attributes, but the sensoric categories exclude other aspects than

"merely" organoleptic aspects in judging the quality, while the attribute categories include

these aspects like ethical considerations on animal welfare aspects or other features of the

product or the process for producing the product.

Anderson and Philipsen further differentiate within the category of credence quality

attributes.7 They reserve the term "bundled" for the category of credence quality, as defined

by Darby and Karni and used in the branch of economic literature extending this work.

Accordingly we will reserve the term "bundled credence attributes" for those quality features

of a product which emerge when a seller provides not only a repair service but also expert

advice concerning how much treatment is necessary; to distinguish it from other categories of

6 Anderson and Philipsen use the term characteristic instead of attribute. 7 They use the term characteristic instead of attribute.

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credence attributes, which are more important for food products in general and meat in

particular.

Anderson and Philipsen denote as stochastic credence characteristics what we would call an

experience quality attribute: "stochastic credence characteristics emanate from experience

characteristics of individual specimens which become credence characteristics because

consumers draw these specimens from a probability distribution; for instance, consumers

would like that there is a very small probability of quality break down due to bad (e.g. boar-

like) taste of pig meat for a party".

The third category of credence quality introduced by Anderson and Philipsen is the

standardised credence characteristics. According to them: "standardised credence

characteristics are often a large number of minimum standards which the good should live up

but which the consumer in practice is not able to control or even think about, e.g. that meat is

labelled with the correct date of production and that it is not tendered by dangerous

chemicals". We regard minimum standards and labels only as one way among others to tackle

the problem inherent for credence quality attributes.

The fourth category put forward by Anderson and Philipsen includes hidden credence

characteristics, which "cannot be detected by inspecting the finished good because they

concern details about the production process that has little or no influence on the objective

characteristics of the purchased good, e.g. because they concern "ethical" characteristics of

the process of production". Our understanding of hidden credence attributes is a more

encompassing one. Credence attributes are by definition hidden for the consumer in the

process of buying and consuming. The consumer may receive some information on these

quality attributes, but this information is not available in the process of buying and

consuming. In particular we denote as credence quality attributes those, which are used by the

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consumer to judge the quality of the product with regard to food safety and other salient

concerns, which are not confirmed in the process of buying and consuming.

In our work, we will differentiate between bundled hidden credence attributes, food safety,

health and (rest of ) quality credence attributes. The first category is of no relevance here. The

other have been defined already.

Credence quality attributes may be product attributes or process attributes. Most food safety

concerns are targeted towards the product quality, most ethical and "rest of quality" concerns

are targeted towards process quality. Some information on these credence process quality

attributes as what the consumer judges them according to his or her informational status, may

exist within the supply chain.

2. INTRINSIC AND EXTRINSIC CUES AND OTHER SOURCES OF INFORMATION

Steenkamp [19] suggests a model of the quality perception process, which is rather similar to

the consumer attribute model presented here. This process starts with the acquisition and

categorisation of cues, intrinsic (e.g. appearance, colour, shape, presentation) or extrinsic (e.g.

price, brand name, stamp of quality, country of origin, store, production information and

nutritional information) to the product. Two types of quality attributes are distinguished,

experience quality attributes, such as convenience, freshness and sensory characteristics that

can be experienced at the time of consumption and credence quality attributes, such as

healthiness, naturalness and wholesomeness that cannot be experienced directly. Finally, the

overall quality evaluation is hypothized to be based upon the perceptions of the product with

regard to the quality attributes.

The model of Steenkamp [20] is based on a model by Olson [21]. According to Steenkamp,

the model of Olson conceptualized the formation of quality perceptions as a two stage

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process. First, consumer choose cues of product quality from an array of product-related cues.

Second, consumers integrate their evaluations of these individual cues into an overall

judgement of product quality. Olson's model aims to explain cue selection and cue importance

in the quality perception process.

We share with Olson the view, that a consumer, "given his/her limitations of information

processing capacity and time, will attach the more importance to a cue in the quality

perception process, the higher the quality information content of that cue."[22]

We regard the distinction between intrinsic and extrinsic cues for quality as an important one.

The consumer may be uncertain about the intrinsic quality cues when buying and may use

intrinsic and extrinsic cues which become available when buying for quality selection. The

consumption stage is mainly characterized by intrinsic cues becoming available. These

intrinsic cues are sensoric. Hardly any intrinsic cues are available to judge the credence

quality of a good. Freshness is the only salient intrinsic credence quality attribute cue used by

consumers. Extrinsic cues are the dominant mean to inform the consumer on the credence

quality attributes.

If credence quality attributes are confirmed by trusted extrinsic cues, they become search

quality attributes. The information may change the status of the quality attribute. Labelling

may signal credence quality attributes already when shopping for the quality.

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PerceivedQuality

Demand:Attributes

Information:Cues

Supply:Characteristics

search

experience

credence

intrinsic

extrinsic/intrinsic

none/extrinsic

Shopping qualityprocessing quality

sensoric qualityprocessing quality

hygienic-toxico-logical quality

nutritional valueprocess features

PV

PV

PV

PV=Predictivevalue

CV=Confidencevalue

CV

CV

CV

Figure 4: Supply and Demand of Quality

Cues are the way to exchange information between the demand side, as taken care of in the

attribute approach, and the supply side of quality, as taken care of in the characteristics

approach. On the demand side, cues are used for quality selection, evaluate the organoleptic

quality and confirm the credence quality attributes. These credence quality attributes may

consist of safety, health or rest of quality concerns. These three dimensions are regarded here

as the basis for the perceived quality.

Cues differ according to their status: extrinsic, intrinsic or not available, and according to the

degree of confidence, which the consumer attributes to the cue. Cues are learned while

shopping and consuming or not at all. Furthermore cues differ in their predictive value. The

predictive value captures the extent to which a cue contributes to the satisfaction of the needs

of the consumer. This extent clearly differs between consumers. Furthermore search cues are

used for predicting experience quality and credence quality. Likewise experience quality

attribute cues may be used to predict credence quality.

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Characteristics are supplied by the supply chain. While shopping, several cues become

available. The appearance of the shop, the selling personal, information provided by leaflets

or signs etc. These cues are picked up with the term shopping quality characteristics. These

characteristics are including the whole experience of shopping and as such part of the

marketing management. Furthermore, the appearance of the product itself in the shop is

picked up by the category processing quality, as defined in the characteristics approach.

The focus of the characteristics approach is on the sensoric and processing quality

characteristics, which are experienced by the consumer through intrinsic quality cues while

preparing and consuming the meat.

The hygienic-toxicological quality characteristics and the nutritional value are not

communicated to the consumer with cues. Here, the consumer receives information through

other information channels, like word of mouth, friends, media etc.

We have added here the process features as an additional category of characteristics, to take

care of the consumer demand for process quality attributes not related to safety or health

concerns.

Focus groups (2-3 per country) on meat have been conducted in each of the countries

participating in this study. Product attribute cues of help in assessing the eating quality of

meat were elected from the focus group sessions. These cues were used as a basis in designing

the consumer survey. The survey data was collected through telephone surveys of 500

households in each country. The survey was conducted by a commercial telephone survey

organization, using random-digit dialling procedures, in March 1997. This wasa one year after

the announcement of the Health Minister of the United Kingdom Stephen Dorrell, that a link

between BSE and the human degenerative brain disorder Creutzfeld-Jakob Disease could not

be ruled out. The questionnaire was designed by all project participants in English. The

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translated questionnaires were checked by each of the country groups on consistency with the

English worded questionnaire, as designed together.

The consumers were asked to judge the helpfulness of the product attribute cues “in assessing

the eating quality of meat while shopping.” It has to be stressed here, that we did not ask for

quality in general but "eating quality" in particular to focus attention of the consumer on the

organoleptic experience. "Eating quality” is a term easy to understand and easy to translate.

Food safety, health or other concerns were addressed in separate questions.

We used the following:

Search quality attribute cues: colour, marbling, leanness, brand or quality assurance label,

place of purchase, price, and country of origin.

Another question was targeted directly towards the organoleptic quality, the eating quality.

We asked the respondents: “How important or unimportant are each of the following for

assessing the eating quality.” We used the following attribute cues in our questionnaire:

Experience quality attribute cues: flavour, tenderness, colour, smell, leanness, juiciness,

free of gristle, and texture.

The credence quality attribute cues were segregated into cues denoting safety and health

concern and those concerns which are part of the "rest of quality".

Credence quality attribute cues:

Safety and health concerns: hormones, antibiotics, fat or cholesterol, salmonella or

other bacteria, and BSE (beef only)

"Rest of quality" concerns: what the animal was fed on, brand or quality assurance

label, name of producer or farmer, organically produced (beef/pork only), country of

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origin, price, freshness, and free range (chicken only). Price and Freshness were

included here as extrinsic and as intrinsic cue which could be used by consumers as

indicatives for “rest of quality ”attributes”.

The interviewed persons had to judge the importance of these search, experience and credence

quality cues for beef, pork and chicken separately.

The distinction between search-, experience- and credence quality attributes as offered by the

theory of industrial organization is helpful not only for analysing consumer behaviour, but as

well for laying ground for a total quality policy concept. These three categories are based on

the fundamental distinction between choice under certainty, risk, and uncertainty. In the

following section the analysis will focus on fresh meat quality.

3. CONSUMER DECISION MAKING IN THE CASE OF SEARCH CUES Intrinsic search quality cues are known to a high degree of certainty, because they become

available by inspecting the product in the shop. The degree of confidence - confidence value -

is high. The direct predictive value of intrinsic search cues for perceived quality is low,

depending on the presentation of the fresh meat and on the experience of the consumer. The

issue of predictive value becomes topical, if these intrinsic cues are used as indicators for

experience quality attributes. Some intrinsic search cues have a higher predictive value for

experience quality attributes than others. Colour seems to be regarded here by consumers as

most important in this respect.

Extrinsic search cues, like place of purchase and country of origin, play a dominant role for

predicting eating quality. While place of purchase for fresh meat may be regarded as a

indicator, in the sense of the characteristics approach, for eating quality, this does not extend

to country of origin. In the case of fresh meat, this cue is used by consumers as among the

most important indicators for eating quality, though this relationship between country of

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origin for fresh meat and eating quality may not be confirmed in sensoric studies in this

generality, as perceived by the consumer. In the case of Argentinian meat and some other rare

exceptions there may be a sensoric proof of this relation.

Intrinsic and extrinsic cues as received while shopping are used to evaluate experience and

credence attributes. The less the predictive value of these cues, the less is the consumer able

to select the quality demanded. The less the predictive value of the intrinsic cues, the higher

the importance of extrinsic cues for quality selection. The consumer may attribute to extrinsic

cues information on product or process characteristics, not received from intrinsic cues.

According to our results, colour, origin, and place of purchase seem to be the most important

search quality attribute cues for the consumer. Extrinsic cues, like origin and place of

purchase are primary cues for quality selection by the consumer while shopping for fresh

meat.

If there is a demand by consumers for a particular intrinsic search cue, this demand can be

met by supply adequately, within the technological restrictions. It is clearly the task of private

quality policy to improve on the predictive value of intrinsic search cues for experience

quality attributes. Here butcher shops seem to make a better quality policy than supermarkets

because consumers have more confidence im them.

In the case of extrinsic search cues, the predictive value may vary with the cue. The

confidence value depends on the reliability of the cue and on the respective use as indicator

for experience or credence quality attributes. Here public regulations have to take care of

consumer deception. This is inter alia pursued with voluntary definitional standards for

product and/or process quality.

A voluntary standard with emphasis on organoleptic quality as demanded by the consumer

may be considered as a means to improve on the predictive value of an extrinsic search

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quality attribute communicating eating quality. The European Quality Beef scheme is an

effort of this kind.

But it is clearly the task of the public quality policy to improve on the confidence value of

cues. The extrinsic cues communicated to the consumer via labelling or advertising have to be

trusted by the consumer. The introduction of the traceability of beef through the whole

production chain supplied for by the public quality policy is a great chance for the beef sector

to build up trust in quality and to increase the range of qualities supplied to the consumer.

This approach could be used for other food products for which there is, like in the case of

meat, a comparatively high percentage of unpacked selling, fish for example.

The consumer can screen quality by visual inspection of the unpacked food product.

Additional information is supplied by the selling personal. In the case of prepacked products

consumers may screen for quality attributes by paying attention to the information on the

prepacked food product. In general, for prepacked food no additional infomation is supplied

by the selling personal. Some information on the food quality may by transmitted to the

consumer by advertising, though the informational content of food advertising in general is

rather low. Other sources of information are newspaper articles, broad- and telecast, public

and private agencies and last but not least, word-of-mouth.

The great importance of the place of purchase and country of origin for the consumer seems

to indicate the low predictive value of the other cues available. Accordingly these two

extrinsic cues have probably a perceived information overload.

4. CONSUMER DECISION MAKING IN THE CASE OF EXPERIENCE CUES

The sensoric quality is experienced by the consumer sensorically and not by inspection. The

confidence value for experience quality attributes is very high. The predictive value of

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experience quality cues for credence quality attributes depends on the cue. Here freshness

seem to play an important role.

With regard to experience quality attributes, there is a chance that the consumer expectations

are not fulfilled. This quality is known only after consumption. Akerlof [23] was one of the

first to point out the consequences of quality risk as experienced by the consumer for the

market supply of quality.

Akerlof analyzed the used car market. The same problem can be illustrated for the meat

market, as now outlined. It is well known, that the category of the bovine animal is one of the

most important characteristics for predicting the sensoric quality. Long ago, small traditional

butcher shops buying the beef from farmers in the local countryside had a high market share.

In those times ox meat production in Germany amounted to roughly a third of all beef meat

production. Ox meat is well known for its high sensoric quality. With the emergence of large

supermarkets and butchers buying their meat no longer directly from the farmer, this market

share decreased to less than 1 percent nowadays. The information on the category of the

animal has been lost somewhere in the supply chain. Consumers in former times were able to

receive information on the category. The category was used as an extrinsic cue to predict

eating quality. The more reliable in the sense of prediction a cue is, the higher the willingness

to pay for the supply of this particular cue. If a high and a low quality on a market exist and if

the quality difference can be communicated to the consumer in the quality selection process, a

higher price for the high quality can be established. If a high and a low quality exists, but if

the consumer is not able to receive cues on this quality difference while shopping, the high

quality will get no price premium. If the supply of high quality incurs higher cost than the

supply of low quality, the quality traded will erode unless only low quality is produced and

consumed. There may be a high willingness to pay for high quality, covering the higher

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production cost, but this market for quality will not arise, unless the quality difference can be

signalled with a certain degree of confidence for the consumer.

Means to signal reliably quality to the consumer are available for many other products:

warranties, high sunk cost in brand advertising, that would be lost with the loss of brand

reputation due to quality failures, a higher price and other means. All these means have to

have at least some predictive and confidence value to serve as means. In the case of unpacked

sold products, like fresh meat, these means are restricted very much by the absence of brands,

labels, trademarks etc.

The consumer in the case of experience quality can at best make estimates on the probability

based on past experience that a product sampled from the elements of the product category

has a (a posteriori) certain quality attribute vector. These estimates take the form of subjective

conditional probabilities. Branding, labelling, product definitions and standards may reduce

the probability of product failures in the sense that the product did not meet the consumer

needs as expected. Here public regulators again have to establish trust in cues by regulating

claims with definitional standards, but the experience quality attributes composition, how

food scientists would call it, the recipe, themselves are at best regulated by the market.

Tenderness and flavour seem to be the most important experience quality attribute cues

followed by juiciness and smell. Private quality policy.needs to take care of these quality

attributes.

5. CONSUMER DECISION MAKING IN THE CASE OF CREDENCE CUES In the case of credence quality attributes, consumers do not face certainty or risk, but

uncertainty. Depending on the concept of uncertainty employed, the quality erosion, already

present for experience quality attributes, becomes even more severe. If the uncertainty is

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measured with the degree of belief measure instead of the probability employed by Akerlof,

this becomes obvious [24].

One of the most important tasks for regulators is to regulate such intrinsic credence quality

characteristics, which are of relevance for food safety, with minimum quality standards. In

principle consumers may screen products by employing laboratory methods. But in the case

of the final food consumer, these methods are in most cases prohibitively expensive. Further-

more the issue at stake is too differentiated to be judged by the consumer and expert

knowledge is needed here. The food consumer has to rely on the public food inspection

services and regulatory control regarding food safety.

Those people allergic to certain substances in the food are a minority. Accordingly their

interest is not taken care of by the market. Furthermore general minimum standards seem to

be a measure of last resort here. Other measure could take care of the interest of these groups,

where food safety issues are at stake. Here the market clearly fails to supply food safety also

to these small, but growing minorities. Regulatory efforts are needed. The list of ingredients is

of help here. But more detailed information is available. In Germany this information is

documented in the Food Register. This information could be made more accessibly for such

groups and for the public in general.

Regarding health concerns, it may be seen as the task of the public policy, to inform on health

issues in general. Here the experience of the U.S.A. could be helpful to establish something

like nutritional labeling for packed food products.

In the case of "other quality concerns" regulators should supply the public with definitional

standards, but mandatory standards seem to be unnecessary. In the case of "organic" this is

about to be established and in the case of "origin", "producer" and "feed", these are already

taken care of in the case of beef.

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If there are no cues for credence quality attributes available while buying and consuming, the

consumer will use word-of-mouth, media and other sources of information to form

expectations. In general the mistrust in the quality of those products will be particular high,

where the consumer does not obtain information while buying and consuming. Here the

consumer has to rely exclusively on these other information sources.

Freshness as an indicator for safety in the case of meat, as suggested from the focus group

analysis is confirmed. Freshness seems to be the most important credence quality attribute cue

for the credence quality safety. In the case of beef and pork, feed and origin is of high

importance as well. In the case of chicken free range is regarded as more important than feed,

but the results between the different countries differ.

Freshness is to some extent an intrinsic cue but more so an indicator for safety, accordingly

freshness is grouped here in both categories.

Country of origin is used as an indicator for eating quality and for safety. Here the

information overload is well documented.

The salient concerns coming out of the focus groups were: antibiotics, BSE (for beef),

hormones, salmonella and fat/cholesterol. All these concerns seem to be important for all the

interviewed persons except the one on fat/cholesterol.

To further establish confidence on meat quality, the solution of the hormone, antibiotic and

salmonella issues should be of high priority for public consumer oriented quality policy.

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