The role of credence attribute claims in food product launch - A comparative study of New Zealand and Australia

Abstract

This paper aims to empirically investigate the role of claims of credence attributes in the launch of food and drink products using a large dataset of new product development by food companies in Australia and New Zealand. Multinomial regression models are employed to analyze the association between the type of product launch and the positioning claims adopted by firms in the two markets. The results provide evidence that claims of credence attributes play an important role in the product launch strategy of firms in both Australia and New Zealand. Food companies tend to choose the most cost-effective strategies to launch products with credence attributes. Hence, claims that are seen as most important for consumers are more likely to be engendered for the more costly launch approach. For example, the attribute of “environmental-friendly” is highly important in both markets and its use is related to launching brand new products which generally is the most costly launch strategy. In contrast, other credence attributes, such as “ethical” and “safety”, are linked to relatively simpler and cheaper strategies, such as new packaging and new extension. Note that whilst the attribute of “health and nutrition” is regarded as an important claim to firms in the Australia market, it is not related to any product launching approaches in the New Zealand market. Given most studies on credence attributes have focused on the consumer side, results of this study fill in the gap of understanding how food suppliers respond to consumer demand for food products with credence attributes.