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Interactions between Brands and CO Labels: The Case of “Bavarian Beer” and “Munich Beer” – Application of a Conditional Logit Model

2008; Taylor & Francis; Volume: 20; Issue: 3 Linguagem: Inglês

10.1080/08974430802157655

1528-6983

Adriano Profeta, Ulrich Enneking, Richard Balling,

Culinary Culture and Tourism

ABSTRACT For the past four decades 'country-of-origin' (CO) research has been discussing the value of designations such as 'Made in Germany' or 'Made in USA.' However, published studies have not usually investigated brand-specific effects of 'country-of-origin' (CO labels). This article employs a choice experiment in order to analyse the impact of a CO label applied to branded food products. For this purpose, a nationwide survey was carried out in Germany to measure the effect of the geographical indications 'Bavarian beer' and 'Munich Beer' on brand choice. The results indicate that weak unknown brands can benefit especially from the labeling of geographical indications. KEYWORDS: Conditional logit modelcountry-of-origindiscrete choice experimentprotected geographical indication Notes Source: compiled by the author. Source: Own work. Notes: Observations = 11634; LR χ2 = 828.43 (p = 0.0000); log likelihood = − 2819.93; pseudo R2 = 0.1281. Observations = 9023; LR χ2 = 268.32 (p = 0.0000); log likelihood = − 2374.12; pseudo R2 = 0.1535. Source: own calculations (bold numbers have a significant influence (α = 0.05) on the choice of brand). For the wine sector two discrete choice studies are known (Perrouty et al., Citation2006; Mtimet and Albisu, Citation2006) that analyse interaction effects between brands and COs. For an exhaustive derivation of the MNL model see Louviere et al. (Citation2000: 45 pp.). The questions asked were: (1) How important are following criteria when you purchase beer? 1) totally unimportant 2) rather unimportant 3) neither nor 4) rather important 5) very important (2) How great do you find the difference for the mentioned attributes for beer which can be purchased in different outlets? 1) very small 2) rather small 3) middle 4) rather large 5) very large. Every alternative in the choice set represents an assigned brand. This approach allows us to interpret the alternative specific constant as indicator of brand strength as shown later. A decision had to be made on whether or not a no-choice option should be included in the choice design. On the one hand, such a base alternative leads to better predictions of market penetration and is considered more realistic since in many purchase situations consumers can defer purchase or purchase elsewhere. On the other hand, the base alternative gives no information about the impact of label and price on choice. Furthermore, Dhar (Citation1997) shows that when alternatives are similar in preference, respondents will choose the no-choice option more often compared to when alternatives are very distinct from each other. Additional informationNotes on contributorsAdriano Profeta Adriano Profeta, PhD, is affiliated with the Technical University of Munich, Environmental Economics and Agricultural Policy Group, Freising-Weihenstephan, Germany. Ulrich Enneking Ulrich Enneking, PhD, is a Professor at the University of Applied Sciences Osnabrück, Osnabrück, Germany. Richard Balling Richard Balling, PhD, is a Professor At Bavarian Ministry of Agriculture and Forestry, Munich, Germany.