An Assessment of Consumers’ Willingness to Pay for Attributes of Milk and Dairy Products with the 100% Canadian Milk Symbo

Abstract

Consumers are becoming increasingly concerned about their foods and more particularly, the origin of their foods and the ingredients they contain. In light of the demand for additional origin information, the 100% Canadian milk branding initiative was launched in 2009 as a means of informing consumers about the origin of milk in their dairy products. The information is indicated by the presence of the 100% Canadian milk symbol on dairy products and can be characterized a form of co-branding. The literature on co-branding stipulates that co-branding can result in changed product perceptions either negatively or positively. In addition, the willingness to pay (WTP) literature stipulates that WTP is determined by product attributes and individuals’ characteristics.

This thesis therefore seeks to ascertain the factors affecting consumers’ preferences and WTP for products with the 100% Canadian milk symbol. Specifically, the effects of individual characteristics such as health consciousness, patriotic values and risk perceptions on preferences for dairy products with the symbol are evaluated. Concurrently, the study explores the relationship between respondents’ knowledge of the Canadian dairy industry and WTP for the symbol. Data were gathered from a total of 1012 milk and ice cream consumers using two nationwide internet surveys. Estimations are carried out using the Multinomial Logit (MNL) and the Random Parameter Logit models (RPL).

The results suggest that consumers in general have positive perceptions of milk and ice cream with the 100% Canadian milk symbol but negatively perceive store brand and organic labels. However, in some cases, combining a store brand label or organic label with the 100% Canadian milk symbol, are shown to alter consumers’ perceptions of the product. Some socio-demographic variables and individual characteristics were also found to be influential in intended purchase behaviours and WTP for milk and ice cream. The findings from this study provide information on consumers’ perceptions and attribute preferences and are expected therefore to contribute to the marketing strategies of the Canadian dairy industry as a whole.