GREEN RETAILING AND THE ADDED VALUE OF AUTHENTICITY

JesseTingen .

UNIVERSITY OF GRONINGEN JUNE 2015

GREEN RETAILING AND THE

ADDED VALUE OF

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Green retailing and the added value

of “authenticity”

University of Groningen

Faculty of Economics and Business Msc Marketing Management Master Thesis

June 2015

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Management Summary

This research paper is aiming at generating deeper insights concerning the term “authenticity” and its link with the retailing of social responsible “Greenish” products. Retailers can use these insights in order to market their products better and more efficiently. This research will answer questions like: ‘What is authenticity?’ And “how does authenticity influence the consumers’ willingness to pay?” These questions are dealt with by conducting both quantitative and qualitative research. A conceptual model explaining authenticity will be presented, which will be used in order to find out how we can deal with authenticity, and what the influences of this term are on the consumers’ willingness to pay.

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Preface

It was the summer of 2014 when I started with my Master degree in Marketing Management at the Rijksuniversiteit in Groningen, after successfully completing my Bsc Degree in international business. During my bachelor I really got interested in marketing related topics and I immediately knew that marketing would be the direction to go. It was only after the first courses that I was completely convinced, I really liked the master. And after the Retail marketing course (which was partly lectured by Prof. Sloot) I knew that I wanted to write my master thesis about a retail related topic. After prof. Sloot advised me to dig deeper into the term “Authenticity” I first thought this topic would be too extensive for one single student to investigate, but I soon got into the literature and was able to find some interesting theories. Writing the thesis was not always easy, and I am really happy with the help that I received from my fellow students and especially my supervisor prof. Sloot. Therefore, I would like to thank everybody for their help and support.

Groningen, June 2015

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Table of Content

2.1Theoretical explanation of Authenticity ...8

2.2 Which consumers consume authentic products ...9

2.3 Authenticity within the organization ... 10

2.4 Green Products ... 13

2.4.1 Local Products ... 13

2.4.2 Fair-Trade Products ... 14

2.4.3 Organic Products ... 14

2.5 Hedonic and Utilitarian Products ... 15

2.6 Willingness to pay a price premium ... 15

3. Qualitative Research on Authenticity ... 17

3.1 Qualitative research on authenticity ... 17

3.2 Interviewing Consumers ... 18

3.3 Interviewing Field Experts ... 20

3.3.1 Local Product Expert ... 21

3.3.2 Fair-Trade Product Expert ... 22

3.3.3 Organic Product Expert ... 22

3.4 Qualitative data analysis ... 23

4.Conceptual Model and Hypotheses ... 24

5 5.3.5 Purity ... 31 5.3.6 Willingness to pay ... 32 5.3.7 Control variables ... 33 5.4 Plan of analysis ... 33 5.4.1 Demographics ... 34 5.4.2 Descriptive analysis ... 34

5.4.3 Testing main hypotheses ... 34

6.Results ... 35 6.1 Descriptive analysis ... 35 6.1.1 Price consciousness ... 37 6.1.2 Manipulation Check ... 37 6.2 Pre-insights ... 38 6.2.1 Authentic elements ... 38 6.2.2 Normality testing ... 39 6.2.3 Correlations ... 40 6.2.4 Multicollinearity ... 41

6.2.5 Overall product evaluations ... 42

6.3 Testing Hypotheses ... 43 6.3.1 Main model ... 43 6.3.2 Model 2 ... 44 6.3.3 Model 3 ... 44 6.4 Model 4 (moderation) ... 45 7.Discussion ... 48 7.1 Fundamental influences ... 49 7.2 Extended influences ... 50 8.Managerial implications ... 53

8.1 Learning objectives & implications ... 53

9.Limitations and further research ... 57

References... 58

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1. Introduction

Sustainable production gets more attention nowadays, because of the rising concerns about the environment. Jones et al (2008) describe supermarkets as the gatekeepers within the food industry, because they can steer towards healthier, greener, and fairer food production by influencing supply chains and consumer behavior. According to Genesan et al (2009), more sustainable sourcing decisions can positively influence the perception of the retailer’s brand. Luo and Bhattacharya (2006) also state that increased positive consumer perception of retailers’ social responsibility increases their purchase intentions. Therefore, green and responsible products have become an important aspect in the current food retailing environment (Van Herpen et al. 2011). Literature thus states that sustainability and selling social responsible products can strengthen retailers’ image, but how do consumers value these products?

There are different product types that can be labelled as ‘green products’ by the consumer. De Pelsmacker et al. (2012) distinguish between social responsible products beneficial to people such as: fair trade or Child labour free products. And social responsible products beneficial to the natural environment, such as: organic, biological and local products.

The fact that companies focusing on green products such as Hieber (Germany), Whole Foods (USA), and increasing competition in this market is able to exist, underlines the importance of green and social responsible retailing (the economist, 2014).

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can companies successfully transfer this value in order to make consumers buy these authentic products?

Important here is, to find out how consumers currently think about authentic products and what that term actually means to them. Also the types of products consumers relate authenticity to can be important, because this can be crucial information for marketers when developing or positioning a product. Tully and Winer (2014) only addressed issues concerning the social responsible products (Pelsmacker et al, 2012) in this paper; the combination with authenticity will be explored.

Also interesting in this domain, is the question of how much price-premium retailers can ask for these ‘authentic’ products, and how much the consumers are willing to pay? Stephanie Tully and Russel Winer (2014) also investigate the willingness to pay (WTP) in their research, especially focusing on social responsible products. They indeed found that consumers are willing to pay a price premium for social responsible products, which is supported by other researchers (e.g. Aguilar and Vlosky 2007, De Pelsmacker, Driesen, and Rayp 2005).

This research therefore will aim at exploring what the underlying dimensions of the perceived authenticity of food products are and to what extend these dimensions add value to green products.

In order to understand these relationships properly, the main research question will be broken down into smaller researchable sub questions.

1. What are the main underlying dimensions of consumers’ perception of authenticity for food products?

2. To what extend do these dimensions influence the consumers’ willingness to pay? 3. Is there a difference in influence between hedonic and utilitarian products?

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tested by doing qualitative research on “authenticity”. Third, the hypotheses will be formulated. These hypotheses will be incorporated into the conceptual model, which will explain the relationships between the variables. Fourth, we will elaborate on the applied methodology and the processes concerning the data collection. The results, analyses of the research, and the discussion will follow thereafter. Finally, the last section will address managerial implications, limitations of this work, and suggestions for any further research.

2. Theoretical Framework

In this literature review further elaboration on the different concepts used will be provided. Reviewing different theories on the used concepts will provide better theoretical knowledge on the research questions and following hypotheses. First of all, the meaning of Authenticity will be discussed, this will be done by both applying existing theories and adding in depth consumer interviews. Then, the existing theory about green and social responsible products will be discussed. Then, the eventual outcomes such as Willingness to Pay and purchase intentions will be further highlighted using existing theories. Finally, the eventual hypotheses will be stated.

2.1 Theoretical explanation of Authenticity

A lot of researchers already investigated topics around authenticity, but only a few were able to provide us with a general definition (Beverland, 2006; Leigh et al. 2006). The word “Authenticity” can mean different things to different consumers in different situations; therefore, the meaning will be explored within this chapter. Sometimes “authenticity” is described as something not being counterfeit or imitated, authentic in this sense would mean being ‘original’ (Huntington, 1988). The term ‘Original’ can be subject to a different set of classic terms also linked to authenticity; such as: sustainable, rooted, natural, honest and human (Boyle, 2003). Bendix (1992, p.104) states that the word ‘authentic’ is related to ‘genuineness,’ ‘reality,’ and ‘truth’. More modern terms for describing authenticity are explained by Munoz et al. (2006) who investigated authenticity in a cross-cultural way regarding Irish pubs. According to Munoz et al. (2006) authenticity can be described as: original, traditional, genuine, unique and real.

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be labeled as having indexical authenticity (Grayson and Shulman, 2000). Pierce et al. (1998) state that the term ‘index’ refers to the consumer’s cues, that are thought to be spatial-temporally and factually linked with something else. For example, when talking about an indexical authentic painting from the Renaissance, the consumer should have some prove that the painting was made during that specific time period. When a product looks like the original, or is perfectly reproduced, the authors speak of iconic authenticity (Grayson and Martinec, 2004). Examples of iconic authenticity are gifts and souvenirs from a gift shop, or a play in a theatre for example. In this context, concerning products, the term ‘iconic’ can be perceived as being similar to something else.

However, some researchers state that these two aspects can be supported by a third component: existential authenticity (Wang, 1999; Leigh, 2006). This form of authenticity depends on the consumers’ perception of authenticity, because in postmodern times, the more ‘authentic’ a product is, the more it is ‘real’. In other words, it depends on the consumer’s personality and opinion. Finally, Liao and Ma (2009) found six main characteristics of authenticity after conducting personal in depth interviews and monitoring focus groups. First of all, their participants linked authenticity to originality. Originality can be described as being innovative and being not imitated. The second link they found was quality commitment and credibility. The participants indicated that authentic products should deliver the quality that is promised upfront. Thirdly, the participants stated that authenticity is linked to heritage and style persistence. Authentic products should be in line with traditional style and produced according to existing habits. The fourth term that was found by the researchers was scarceness, which indicates that people should do extra effort in order to obtain authentic products. Fifth term that was linked with authenticity is sacredness, which indicates that the consumer’s memory links positive experiences from the past to these authentic products. Finally, the participants highlighted purity as being important for authentic products. Purity in this sense means that the products should be simply focused on simple elements, without any impurities.

2.2 Which consumers consume ‘Authentic’ products?

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values that we stand for (Kleine et al. 1995; Zavestoski, 2002). By means of consumption people can nowadays easily show who they actually are, and what they think is important. The element of authenticity is very important in interpersonal relationships and communication between people because people feel a bond of trust with people and brands that also show authentic behavior (Lewis and Bridger, 2000). This might also be the reason why it is so difficult for firms to build strong and long term relationships with people who value authentic elements in brands and their products, according to Crosby and Johnson (2003). Therefore, those specific consumers do have strong long term relationships with only a few specific ‘authentic’ brands that they do value (Lewis and Bridger, 2000).

2.3 Authenticity and the Organization

The term authenticity can not only be related to products or brands, people and organizations can also be viewed or perceived as authentic. The following section will elaborate further on this perspective on the term of ‘authenticity’. Bovens (1999) states that individuals first need to be sincere to themselves before they can be perceived as being authentic by others. Imagine the example of a fortune 500 company’s CEO claiming to be solely driven by the well-being of his employees. Although this claim might express his heart desire, the claim will be viewed as inauthentic by others, as he does not remain true to his current role and function as a fortune 500 CEO (Leroy and Sells, 2008). The term can also be explained by taking a philosophic perspective. Greek philosophers Aristotle and Socrates were the first to refer to the term ‘authenticity’, they claimed that an unexamined life is not worth living. They claimed that individuals should aim for the ‘highest good’ through self-realization and self-actualization in order to be ‘true to the self’. Psychologically viewed, authenticity can be explained as: in tune with their basic nature and able to clearly and accurately see themselves and their lives, unencumbered by others' expectations for them allowing to make more personal choices (Erickson, 1995).

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partners and suppliers and they should be honest about environmental impacts and their sustainable measures (Cohn and Wolfe, 2014). Apparently, consumers do care about social responsible behavior of firms and apparently they do value responsible authentic brands and their products. However, Porter and Kramer (2006) state that organizations are still struggling with the creation of competitive advantages using corporate social responsible strategies. Wicki and Kaaij (2007) state that many companies fall into the so called ‘authenticity gap’ when trying to (re) build their social responsible image through CSR practices. The ‘authenticity gap’ can be explained as the difference between the brand’s projected identity and the brand’s actual identity (see figure 1).

Figure1. (Wicki & Kaaij, 2007)

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of authenticity, where managers and marketers should focus on, in order to create a competitive edge. These five concepts will be discussed in short, in order to get an overview of how organizations can position themselves by using an ‘authentic strategy’. First of all, the authors state that organizations can focus on ‘natural authenticity’ which can be explained as going green or organic. Second, they use the term ‘original’ authenticity, which refers to the fact that organizations should be original and creative. An example of this form of authenticity could be the company Apple; they were able to outperform the market with their ‘think different’ strategy and innovative product introductions. Thirdly, the authors discussed a form of extraordinary authenticity. The authors state that organizations should focus on one of their selling propositions, and make sure that it creates a competitive advantage, by being extraordinary good at it. The fourth authentic strategy they highlight is referential authenticity. Organizations should try to position their brand in the mind of the consumer. When creating this mental mind position, authentic elements of the brand should be linked to positive past memories (referential). This strategy partly correlates with the indexical authenticity explained by Grayson and Martinec (2004). Finally, the authors state that influential authenticity can be used as a strategy. This can be done when your brand has the advantage of being influential concerning a specific cause, for example Max Havelaar for fair-trade products.

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2.4 Green products

In 1983 Theodore Levitt wrote an article in the Harvard Business Review: ‘The globalization of markets’ in which he stated that ‘everything will be more alike and the world’s preference structure will be more homogenized’. However, after the financial crisis appeared in 2008, consumers reshaped their consumer patterns into more social responsible ways. Consumption is moving from global to more local, and well known established brands are also adapting to this trend. (e.g McDonalds localized assortment). Pelsmacker et al. (2012) distinguish between the following social responsible product types: fair trade, child labour free, organic, and for example legally logged woods. An important aspect of Green products is that it are credence goods; consumers cannot ascertain their environmental qualities during purchase or use. Customers are not present when the products are produced and therefore cannot observe the environmental friendliness of the processes. The objective of green-labels is to reduce information asymmetry between the producer of green products and consumers by providing comprehensive, trustworthy and positive information related to the environmental attributes of the products (Delmas, M., & Grant, L. 2008). It is already known that there are differences in willingness to pay premiums for these different social responsible product types (The Roper Organization Inc. 1990; CRC-Consommation, 1998), but within this research I would like to investigate whether these green products can be labelled as authentic and if this changes consumers’ evaluation and willingness to pay for these products. Since the focus of this research lays on food retail, and the willingness to pay for social responsible products, the focus here will be on local, fair trade, and organic products.

2.4.1. Local Products

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Furthermore, the products are often related to ‘freshness’ and ‘organic’. Even though there is discussion about the accepted definitions of ‘local’ and/or ‘locally produced’ products, literature states that ‘Local’ is valued by consumers. Researchers state that products labelled with the term ‘local’ or ‘locally produced’ are more preferred by consumers (Gracia, 2012). Often it is unclear why consumers have more preferences for these ‘local’ or ‘locally produced’ products. Costanigro et al. (2011) investigated this matter, and stated that one explanation of preferences for local products can be the satisfaction of social and public values. Also the feeling of social connections and trust are reasons why people might buy local products according to Hinrichs (2000). This again implies that it is not only the quality of the products that causes the consumers’ preferences.

2.4.2 Fair-Trade Products

The Economist (2006) describes Fair-Trade production as an inefficient way to get money to the poor producers. And the producers will get fair-trade support as long as they keep producing the products that locked them into poverty in the first place (Paul Collier 2007, p.163). According to these authors, Fair-Trade production is not really helping the poor producers, so are there also positive aspects of fair-trade production? And what does it entail?

Dragusanu et al (2014) describe Fair-Trade as products that have been labelled in such a way that the trade will help producers in developing countries. This is done by offering the poor producers better negotiation terms and helping them organizing their production processes (Dragusanu et al, 2014). Furthermore, Laura Raynolds (2009, p.1089) states that Fair-Trade production offers farmers better prices, stable markets and resources for social and environmental projects. She also states that consumers are provided with products with high social and environmental standards. (Laura Raynolds, 2009).

2.4.3 Organic Products

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2.5 Utilitarian and Hedonic products

Within this research we will investigate the authenticity effect on willingness to pay for different products, making the distinction between hedonic and utilitarian product types. Because consumers buy these two product types for different reasons and on different occasions the effect on both product types will be included in this research.

Utilitarian products can be labelled as products that are functional to the consumer, in order to reach a practical goal (Dhar & Wertenbroch, 2000). Examples of utilitarian products can for example be found within household or cleaning product categories and products such as margarine, toilet paper, and water. Hedonic products are more related to the sensory experience and the product itself can provide excitement, pleasure, and fun while purchasing or using the product (Dhar & Wertenbroch, 2000; Hirschman & Holbrook, 1982). Examples of hedonic products can be found within food product categories, such as coffee, candy, and chocolate for example. However, classifying products within either the utilitarian or hedonic category is difficult because some products can basically be categorized in both categories. The distinction is merely based on the consumer’s perception (Steinhart et al. 2013). This research will look at the hedonic level that the participants place on the different products and if there are significant influences between the hedonic level and willingness to pay.

2.6 Willingness to pay a price premium

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expected quality of the product can also influence the consumer’s willingness to pay. In order to ensure the quality of the product people are willing to pay more for that specific item. Another important underlying dimension for WTP is the consumer’s desire to maintain positive self-concept and self-esteem (Bolderdijk et. al, 2012). After a person’s basic functional needs are satisfied, people strive to fulfill their symbolic and hedonic needs e.g. social appreciation and self-esteem (Maslow, 1943; Park et. al, 1986). These hedonic needs are not fulfilled by just acquiring the product, but are also linked to the pleasure of buying, and the related social status obtained from the product (Arnolds and Reynolds, 2003). This is especially interesting in the context of social responsible products and the connection with authenticity that we would like to investigate. As mentioned before, Gilmore and Pine (2007) stated that the authentic element in consuming is getting more attention and consumers are nowadays more willing to buy authentic products. These authentic products are more frequently used by consumers to make statements and show others which norms and values they stand for (Zavestoski, 2002).

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3. Qualitative Research on “Authenticity”

Since the existing literature on authenticity is limited concerning the meaning of authenticity, and the meanings do differ among the authors, qualitative research will be used in order to obtain deeper insights. Therefore, in this chapter the previous discussed aspects and dimensions will be further investigated by using qualitative research methods. Information will be gathered through in-depth interviews among consumers, producers, and distributors of green products.

3.1 Exploring “Authenticity” through qualitative research

By interviewing consumers, field experts, and producers their experiences and the meaning they place on the different dimensions of authenticity can be captured. Qualitative research may involve prolonged or intense contact with the participants in their everyday situations, which will provide a holistic view through the participants’ own words and perceptions (Miles and Huberman, 1994). Qualitative research allows the researcher to probe wherever needed, and the participants are in their comfortable own atmospheres where they can freely share their thoughts. The one-on-one in depth interviews will be taken by using a semi-structured, question based interview guide and will last approximately 20-30 minutes. The semi-structured set-up creates consistency within the interviews, but leaves enough space for elaboration or additional information on specific follow-up questions. During the interviews probing and laddering techniques will be used, in order to extract as much information as possible. Laddering is a way of measuring consumers’ means-end chains that makes use of semi-structured qualitative personal interviews (Reynolds and Olson, 2001). After the in-depth interviews have been conducted, the qualitative data will be analyzed using theoretical coding, in order to create supporting dimensions in line with the existing theory. The dimensions extracted from the qualitative research, will then, serve as foundation for the following quantitative research.

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3.2 Interviewing Consumers

Throughout the interviews, the participants elaborated on their need for authentic products, their experiences, and efforts made to obtain authentic products. The participants varied in gender, age, and occupation, in order to get broader insights on their thoughts and experiences (table 1). Before the interviews started, a short introduction was provided, and the opening questions were discussed (interview guide), during the interviews, notes were taken for later analysis. We continued taking interviews until the data was saturated and until we were able to extract elements from the gathered information. Qualitative research in the form of in depth interviews can be done with at least 4 to 10 participants, in order to generate meaningful output (Eisenhardt, 1989). After conducting 10 interviews data was saturated and the output could be used for coding (see table 3). The elements subtracted will serve as the fundamental basis for the upcoming quantitative research.

Participant Gender Age Occupation

(A) M 22 Marketing Student (B) F 22 Medical assistant (C) F 49 Cab driver (D) M 52 Entrepreneur (E) M 20 Business Student (F) M 22 Construction worker (G) F 34 Manager

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The participants were randomly selected and asked if they would participate in this research. After the topic guide was discussed with the participants, the interviews started. All participants had to get confident and familiar with the set-up and the topic at first. But after a few openings questions all the participants were able and willing to openly share their opinions. The answers to the opening questions were relatively short and straightforward, however, after probing and asking for elaboration, the answers were getting longer and more comprehensive. Participant (A) who is a student, was familiar with the term ‘authenticity’ and immediately described it as

“something old, produced according to old procedures”. The term reminded him of his

grandmother, who always served him her own baked cake, which in supermarkets is always labeled as ‘authentic’ or ‘grandmother’s cake’. Participant (C) and (D) who were older compared to the other participants also highlighted the element of tradition and habits. They both referred to the past and ‘authentic’ products from their childhood. Interestingly enough, both mentioned products which were related to their (grand) parents. Participant (C) immediately responded with: “When I walk through the city center, looking around in the

clothing stores, I always remember my grandmother when I see those thick warm socks. Often these cloths are labeled as ‘traditionally knit’ and they always remember me of the cold afternoons after school, with a warm cup of tea” These statements support the findings of

Grayson and Martinec (2004) concerning the link to the past, which was explained by the term ‘indexical authenticity’. Participant (D) started off with his father’s smoking habit, and the pipe he used to smoke and the advertisement within stores for such products. “I think brands label

their products as ‘authentic’ or ‘traditional’ too often in order to address people from our generation, and to activate their memories. People will then become more interested in these ‘old fashioned’ products, because they link it with family, relatives, or the ‘good old times”

Interestingly, participants (B) and (F) also referred to (grand) parents, and their traditional (local) soups and sausages. Both stated that supermarkets and other stores, often (mis) use this term in order to market and promote these ‘authentic’ products. “I always laugh when I see

products as -Grandmother’s cookies, or traditionally recipe for soup- because we all know that this is just a marketing trick and the products are mass produced within factories”. Participant

(G) can be described as an active user concerning green and authentic products. She explained that she orders food products from the delivery company ‘Hello Fresh’ on a weekly basis and that cooking and searching ingredients are a real hobby of hers. Eating healthy, and knowing where her products come from are important she said. “To me, authenticity means that the food

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markets and/or organic farmers with a good friend of hers, in order to look for fresh products and to gain some inspiration. “For me, eating healthy is really important; I truly see it as a

lifestyle. People surrounding me also comply to this lifestyle, which even makes it more fun.”

The participant explained that living this lifestyle also tells people who she is, and which norms and values she thinks are important in live. This statement is in line with the earlier discussed findings of Bolderdijk et al. (2012) and Zavestoski (2002). They indeed found that people use their consumption behavior in order to show to others which norms and values they stand for. Apart from the fact that she thinks it is healthy and good for her body, she also stated that it is interesting to discuss topics with equally minded people and that she values the fact that she is being seen as healthy. “I don’t want to be seen as a mother who feeds her children unhealthy

food, therefore I am glad that others ask me for advice, and value my lifestyle”. This partly is

explained by the paper of Griskevicius et. al (2010), in which they state that people might engage in green consumption behavior in order to be seen as exclusive and special. Participant (E) had a somewhat different idea about ‘authenticity’ compared with the other participants. He stated that when he thought of ‘authenticity’ terms like ‘real’ and ‘true’ came to his mind. “The

product should deliver that what is promised up front and the information given should be trustworthy and honest”. He gave examples of ‘originally French wine and champagne’ or

‘typical Italian pasta products’. He also stated that the large brands try to convince consumers of the fact that they really act ‘green’ however, that often is something to question. After all, he preferred to buy products that are produced as originally intended, according to the typical standards.

3.3 Interviewing Field Experts

After conducting in-depth interviews with consumers differing in age and occupation, information from people who work in the field was gathered, in order to get an overview of the perception of authenticity from multiple perspectives. Interviews were planned with people with working experience with the different types of green products discussed before, being: Fair-trade, Local, and Organic products (see table 2).

Participant Gender Age Occupation

(1) M 45 Butcher

(2) F 25 Shop assistant

(3) M 39 Farmer

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The interviews with the professionals were set up using the same question based semi-structured interview guide. However, these interviews were merely focused on the field of expertise of the participant and their view on the term ‘authenticity’. The interviews were again conducted by visiting the participants, so they were comfortable and were able to give practical examples.

3.3.1 Local Product expert

Firstly, an interview was arranged with participant (1). Participant (1) is working at a Butcher in his daily life; however, he is dedicated to make high quality local meat products in his spare time. Furthermore, his wife has an own studio where she teaches people to work with clay products, she also makes clay sculptures based on historical local art work. Participant (1) was enthusiastic about the topic and warmly shared his thoughts and experiences. For him the term ‘authenticity’ meant: producing products with respect to the traditional habits and recipes. According to participant (1), using traditional recipes and production methods will result in qualitative products, without any unnecessary adjectives or substances. “To me, authentic meat

is my own traditionally made dried sausage with spices”. The participant states that there is a

solid consumer base that weekly buys his ‘locally produced’ meat products, which are preferred over the meat from the local supermarket’s butcher. The butcher gives two possible explanations for this phenomenon: “I’m living in this region for quite some time now, so the

people know me and my products, my loyal clients like to make a chat with me and the old stories about the sausages”. This can be explained by the consumers’ need for social

connection and trust previously explained by Hinrichs (2000). Furthermore, the quality of the product is just better compared to fabric produced meat products, according to participant (1). Zooming in more on their consumer base reveals that tourists are also interested in the ‘authentically’ produced products. “Tourists always buy a few sausages when they go home,

just for themselves, or as a present for relatives and friends”. Simply because the sausages are

not available in other parts of the country and it serves as a ‘local souvenir’ for the tourists. “You can compare it with a Dutch tourists bringing home cheese from France, or beers from

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3.3.2 Fair-Trade Food Expert

Second, Participant (2) was contacted for an in-depth semi-structured interview. Participant (2) has worked as a volunteer at a ‘Wereldwinkel Shop’ where social responsible and fair trade products from all over the world are sold. Participant (2) has experience with cooperating with fair-trade producers and communicating with interested customers. The participant states, that for her, ‘authenticity’ is about the values and story told by the product. “When I think of

‘authentic products’ I think of products that tell me a story, no simple daily mass produced products, but traditional, qualitative, historic products. Not only Fair-Trade products that we sell here, but also traditional cheese, or a good French wine for example”. She explained that

most customers of the shop come for the ‘unique characteristics’ of the products being sold. The ‘Wereldwinkel’ is not selling normal day to day products, so apart from the feeling of doing something socially responsible; the customer also buys something unique. “Apart from the

feeling of acting morally well, the customers also get something special and unique”.

3.3.3 Organic Food Expert

Thirdly, a professional with experience concerning organic food products was contacted, in order to gain deeper insights on his view on ´authenticity´. Participant (3) is working for a ‘Natuur Winkel’ which is a natural shop, selling organic products. It might be no surprise that participant (3) describes ‘authentic’ as being natural, fresh, and traditionally grown. “For me,

authentic products really are the classic fresh vegetables, naturally grown; I go crazy if I have to cook 2-year old canned vegetables”. Participant (3) describes her consumer base as active,

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3.4 Qualitative Data Analysis

After conducting 10 semi-structured personal interviews with 7 consumers and 3 professionals with field experience I was able to summarize the participants’ descriptions and opinions in table (3). The notes of the text excerpts from the semi-structured interviews were used in order to summarize and analyze the responses, using coding techniques. The relevant statements were grouped and linked to terms extracted from the already existing theories (see table 3). These elements and their definitions will serve as the foundation for the up following quantitative research.

Described Term Description Participants Theory

Traditional “The product is

produced according to old recipes and by using craftsmanship”

A,B,C,D,F,G,1,2,3 Munoz et al. (2006); Liao et al. (2009);

Original “The product is not

copied, and produced in a special way”

A,B,E,F,,3 Huntington,(1988);

Munoz et. al (2006); Liao et. al (2009)

Pure “The product is made

without any additives”

A,B,C,E,F,G,1,2 Boyle,(2003); Bendix,

(1992); Munoz et al. (2006); Liao et al. (2009)

Nostalgic “The extent to which

the product is able to recall memories from the past”

B,C,D,F,1,2 Liao et al. (2009)

Table (3), Overview Qualitative data

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4. Conceptual Model and Hypotheses

The existing literature and qualitative data discussed above will serve as the fundamental base for the conceptual model and following hypotheses. This research paper will investigate the effect of the different authentic elements on the willingness to pay a price premium for different green product types and if this effect is significantly different for either hedonic or utilitarian products. This chapter will elaborate further on all the variables that are included in the model and the different expected effects will be discussed (see figure 2).

4.1 Conceptual Model

H1a-d (+)

H2a-d (+)

Figure 2. Conceptual model

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4.2 Hypotheses

4.2.1 Main effect

The previously discussed literature states that consumers are indeed willing to pay more for social responsible (green) products. Furthermore, researchers have found that authenticity is indeed valued by consumers and that the products are purchased not only for qualitative reasons, but also social motives are involved. The qualitative research conducted earlier reveals that consumers identify authenticity by the following terms: Original, Traditional, Pure, and Nostalgic. However, still unclear is, how much more people are willing to pay more for these different products once identified as being authentic. Based on these findings, we can formulate the first hypothesis:

H1a-d: The authentic perception of the product (e.g. Traditional, pure, local, and original)

positively influences the consumers’ willingness to pay a price premium for the product.

Existing literature already investigated the consumers’ willingness to pay price premiums for social responsible products (Tully and Winer , 2014). This research therefore, is trying to find out if there are differences among the green product types (local, fair-trade, organic). These relationships will be included as controlling variables

4.2.2 Moderating effect

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there are the consumers who like to shop for new ideas, inspiration, and news concerning the latest trends, these shoppers can be labelled as idea shoppers. A fourth distinction made by the authors is the social shopper, who is keen on shopping with friends and family. Fifth, the gratification shopper can be identified. Gratification shoppers shop in order to relief their stress, or in order to escape from their negative thoughts. Finally, the authors discussed the role shopper. Role shopping can be reflected by the enjoyment and pleasure that people get while shopping for others (Arnold and Reynolds, 2003). As discussed before, the product itself can also be labelled as either hedonic or utilitarian (Dhar & Wertenbroch, 2000). This research expects that consumers, who are shopping for utilitarian products, will be less interested in the type of product, and the social responsible value that the product might be carrying. However, I also expect that consumers, who shop for hedonic products, are paying more attention to the product specifications and will care more about their social responsibility. The fact that these consumers are more aware of their behavior, might be reason to incorporate social motives into their decision making, which might result in paying higher price premiums. Therefore, the following hypotheses are stated:

H2a-d: The level of hedonic perception of a product positively moderates the influence of the

authentic perceptions (e.g. traditional, pure..) on the Willingness to pay.

4.2.3 Controlling effects

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5.0 Methodology

During the previous chapters, already existing literature has been discussed and the up following hypotheses and conceptual model have been explained. This chapter will further elaborate on the research design and methodologies that will be used.

5.1 Research Design

Within this research the influence of the different authentic elements among varying product types and the consumers’ willingness to pay will be investigated. In order to academically test the set hypotheses, the conceptual model will be statistically tested by conducting a quantitative research. According to Malhotra (2007) there are multiple research methodologies that can serve our purpose. Malhotra (2007) discusses conclusive and exploratory research designs; the first design will be used in this paper because of its structured character. In order to gather the data needed, a causal quantitative research will be set up by using an online questionnaire. This will enable us to investigate the causal relationships amongst our variables.

5.2 Participants

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5.3 Measurements

The research will be based on an online questionnaire, which will be distributed via online channels. The online questionnaire will be distributed among Dutch participants, living in the Netherlands with a minimum age of 18 years old. This selected sample is expected to do their own groceries at least sometimes, and therefore, their opinions are valuable in the light of this research. The data is gathered by means of an online questionnaire because the targeted participants are expected to be reached most efficiently and fast in this way.

First of all, the participants will be informed about the purpose of the research and they will be thanked for their participation. Furthermore, additional information concerning confidentiality will be explained.

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5.3.1 Products

In order to find out if the participants have different feelings for “authenticity” concerning the different product types (being: Fair-Trade, Organic, Local, and a Normal product) products from all categories will be shown to the participant. Because this research also wants to control for the influence of the hedonic or utilitarian character of the products, both product types are included in this research. The hedonic products are represented by chocolate and the utilitarian products are represented by butter because these two products are typically associated with the two product types (Hirschman & Holbrook, 1882; Dhar & Wertenbrock, 2000; Reynolds et. al 2006). By adding questions about the participant’s perceived level of hedonic product level, the manipulation can be confirmed. The products presented in the research are listed in table (4). In order to check if the consumers really perceive the products as being hedonic/utilitarian, 6 questions are added to the questionnaire and have to be rated on a 7-point Likert scale.

Manipulations check – The purchase of this product provides me with pleasure and enjoyment.

Also the extent to which the participants perceive the quality of the presented products will be measured with an extra manipulation check (Westbrook, 1980).

Product Price Product type

AH basis boter € 0,99 (250 gram) C-Brand

Campina botergoud € 1,79 (250 gram) A-Brand

Mathijsen boeren boter € 2,51 (250 gram) Local Product

AH Biologische boter € 1,85 (250 gram) Organic Product

Bio+ Fair-Trade boter € 1,69 (250 gram) Fair-Trade Product

Campina Boerenland Boter € 2,29 (250 gram) A-Brand/Local Product

AH Biologische chocolade € 1,19 (100 gram) Organic Product

Milka Chocolate € 0,94 (100 gram) A-Brand Product

Quinoa Fair trade chocolate € 2.29 (100 gram) Fair-Trade Product

AH basis Chocolade € 0.43 (100 gram) C-Brand Product

Côte D’or Intense Belgian chocolade € 1,85 (100 gram) A-Brand/Local Product

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5.3.2 Nostalgia

As discussed in the literature review, consumers tend to link “authenticity” with memories and positive experiences from the past, better described as the feeling of “nostalgia”. Baker and Kennedy (1994) described this term as “the sentimental or bittersweet yearning for a product, experience or service from the past”. The authors explained, that for consumers; “nostalgia is the way to remember yesterday”. As mentioned before, this paper will use the following definition: “the extent to which the product is able to recall memories from the past”. In order to capture the level of nostalgic perception for the different products presented, part of the scale from Baker and Kennedy (1994) will be used, which results in the following statements that have to be rated on a 5-point likert scale. (See table 5)

Statements ‘Nostalgic’

This product reminds me of the past

This product makes me recall certain memories from my childhood When I think of this product, I immediately feel sentimental

This product gives me a nostalgic feeling

Table (5), Nostalgic statements

5.3.3 Purity

Boyle (2003) used terms like natural and pure in his definition of authenticity. We describe pure as: ‘produced without using any additives’. This statement is confirmed by the interviewees within this research. For example, participant (G) stated “To me, authenticity means that the

food (or product) is made without chemical nonsense and other adjectives, it has to be made in a natural traditional way”. And the field expert on organic food products as well highlighted

31 Statements ‘Pure’

This product is made using pure ingredients

For the production of this product no condiments were used I see this as a natural product

This product feels untouched

Table (6), Pure statements

5.3.4 Originality

As stated in the literature review, researchers highlighted the importance of product originality and uniqueness when it comes to authenticity (Huntington, 1988; Munoz, 2006). When products are not perceived as original or unique, they will not be linked to authenticity that easily by consumers. These findings were supported by the interviews with the field experts, who also stated that your product has to offer something unique in order to be special. This can come from the ingredients used, the production method, or the place of origin. In order to investigate if the products presented are being perceived as original, the following statements will be presented to the participants.

Statements ‘Original’

This product is different than other product within this product category

I think this is a special product

This product is not a copy of another product I think this is an exclusive product

Table (7), Original statements

5.3.5 Traditional

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products (van der Meulen, 2007) the author states that the term traditional can be explained by: 1) the historic load, which is covered by the nostalgic element in this research. 2) The production (process) and 3) the (eating) culture of the participant. As mentioned before, this paper will use a slightly different definition: ‘The product is produced using traditional recipes and craftsmanship’. Therefore, in order to find out how traditionally the presented products are perceived, the following statements will be presented to the participant. (See table 8)

Statements ‘Traditional’

This product is based on traditional recipes

The way this product is produced is still like in the past. In order to produce this product, you need craftsmanship I expect that this product will be produced by a small producer

Table (8), Traditional statements

5.3.6 Willingness to Pay

As discussed during the literature review, consumers are indeed willing to pay more for socially responsible products (De Pelsmacker et al. 2005). In the end, this research is looking for the link with perceived authenticity and the differences in consumers’ preferences resulting in their willingness to pay (price premiums) for these products. This research will therefore investigate the willingness to pay, as described by (Jedidi and Zhang, 2002) “the reservation price or

maximum amount a customer is willing to pay for a good”. In order to reveal the consumers’

willingness to pay, we will use the method presented by Tully and Winer (2014). The participants will be presented with multiple price options from which they can choose. This will give us clear insights in the differences in WTP among the manipulations. The average price of the presented products will be shown to the participant, where after they are asked to make a choice from the different presented prices varying from low to high.

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5.3.7 Demographic Variables

This research includes several demographic control variables as well. These control variables will be used to describe the sample used and to check if the sample is representative for the population in the Netherlands. The control variables will also gather insights about the consumer’s shopping behavior and their attitude towards the products presented. The control variables will be presented at the end of the survey, when all the products already have been rated. The following questions were included:

Questions will be asked about gender, age, education, and income. In order to check if there are differences between men/women, income levels etc.

 What is your Gender? Either male/female

 What is your age?

 What is your yearly income? (nominal data, based on 7 point likert scale)

 What is your level of education? (7 point likert scale)

Furthermore, questions regarding the participants shopping habits are included

 Are you the one that normally does the groceries in your household?

 Which of the following fresh markets do you regularly visit? (Bakery, Butcher,

Greengrocer, Fish market, local market).

 Which supermarket do you visit most often?

5.4 Plan of Analysis

The plan of analysis consists of 3 different parts. First, the sample will be described and by making use of the variables describing the demographics in order to check whether the sample corresponds with the population in the Netherlands. The second part will focus on the research reliability and normality and if there are correlations between the variables used. In the final part, the hypotheses and conceptual model will be tested.

5.4.1 Analyzing the demographics

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age groups, which will result in more reliable analytical results. The other control variables will also be grouped, in order to generate clear insights on participants’ shopping behavior and preferences. This can then be linked to their age, yearly income, and educational level. These insights will then function as support for our further analysis.

5.4.2 Descriptive data analysis

The second part will focus on the basic analysis of the descriptive data. The questionnaire contains several multi scale items with which the participants could evaluate the different products on their authentic elements, and the questionnaire contained quite some multiple scale items. Therefore, we will use factor analysis in order to test if it is possible to merge the multi statement questions into one single variable, representing the different elements. These newly created variables can only be used in the analysis when the internal consistency is sufficient. The internal consistency will be checked by using the reliability measure called Cronbach’s Alpha. When the Cronbach’s Alpha is >0,7 the internal consistency of the created variable is guaranteed and then the variables can be used for further analysis. After we conducted the factor analysis and checking the reliability by using Cronbach’s Alpha, the data will be checked for normality. The normality of the gathered data will be tested by looking at the skewness, kurtosis, and the Kolmogorov Smirnov statistic. Furthermore, the variables will be tested on their underlying correlations and multicollinearity.

5.4.3 Testing the hypotheses

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6.0 Results

In the following chapter the data which is gathered through the quantitative research will be analyzed and discussed. We will start with the descriptive statistics, in order to control if the participants are representative for the Dutch shopping population. The internal consistency and reliability will be checked thereafter. Finally, the hypotheses and underlying effects will be tested by using linear regression analysis and moderating analysis.

6.1 Descriptive statistics

All the respondents were asked to evaluate either the hedonic or the utilitarian version of the survey, which means that they were randomly assigned to the questionnaire about butter versus chocolate. The initial dataset consisted of 249 respondents; unfortunately 48 respondents did not completely fill out the questionnaire and 2 respondents were younger than 18 years old. Therefore, these cases were deleted, which leaves us with 199 completely filled out cases to work with.

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Demographic Variables % According to

CBS Sample After weighting (N= 199) Gender (%) Male Female 50.5 49.5 38.5 61.5 Age (%) 18-34 years 35-49 years 50 +years 35.2 35.4 29.4 84.435.1 6.0 35.5 9.5 29.4 Education (%) Basisonderwijs MBO 2/3 MBO 4 HAVO/VWO Bachelor Master. 0.4 3.0 38.3 19.7 28.1 10.4 Income (%) <10.000€ 10.000-20.000€ 20.000-30.000€ 30.000-40.000€ 40.000-50.000€ >50.000€ 22.6 20.0 25.2 16.8 11.0 4.5 Table 9, Descriptive statistics (after weighing for age)

Participants’ income levels were also taken into account. The income categories are varying from <€ 10.000 to more than €50.000,- Here as well, lower incomes are slightly overrepresented, which also might be explained by the influence of younger participants within the sample. Furthermore, we examined the level of education of the participants. The level of education varied between: Basic education (0.4%), MBO2/3 (3.0%), MBO4 (38.3%), Havo/Vwo (19.7%), Bachelor degree (28.1%), and Master degree (10.4%). Here again, higher educated individuals are slightly overrepresented, which can be explained by the high number of students that participated in this research. This might cause a major limitation of this research because the results might not be applicable for the entire Dutch population.

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butcher, the greengrocer, the fish market, the bakery, or the local market. This will give us more insights on the willingness to buy fresh and premium food products.

From the gathered data we can see that the relatively larger supermarket chains are visited most by the participants. 34.7% of the participants states that they go to the Albert Heijn most often; Jumbo and Coop also score high with respectively 24% and 19.5%. As mentioned before, also the participants’ willingness to visit specialty stores was measured during the quantitative research. Fortunately, more than half of the participants are regularly visiting a specialty store such as the butcher, or a local market. Only the fish market is an exception in this case, with only 22.6% of the participants regularly visiting a store. This might be an indication of the consumers’ willingness to visit and buy at specialty stores, and their willingness to look for more exclusive products.

6.1.1 Price Consciousness

Since we are mainly interested in the consumers’ willingness to pay price premiums for the authentic (and non-authentic) perceived products, questions concerning the participants’ price consciousness were also included concerning the controlling effect. There were 4 items measuring the consumers’ price consciousness and these items had an internal consistency, which was measured using Cronbach’s Alpha, of α= 0,829. Deleting items did not increase the internal consistency and therefore all the 4 factors were combined into 1 component, representing ‘Price Consciousness’. The mean of all the observations is M=3.31 and the standard deviation is 1.31.

6.1.2 Manipulation Check

During this research we made the distinction between hedonic and utilitarian food products. The hedonic products are represented by the chocolate bars; utilitarian products are represented by the butter packages. In order to check whether the participants really see these two product types as either hedonic or utilitarian, a manipulation check was performed.

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Number of items Cronbach’s Alpha

Hedonic items 3 0,82

Utilitarian items 3 0,73

Table 10, Hedonic and Utilitarian Level

Another important aspect between these two types of products is of course the regularity of how often the participants buy chocolate and butter products. Fortunately, 86.8% of the participants regularly buy butter products, and 88.3% of the participants at least regularly buy chocolate bars. (Table11).

Product Hedonic level Utilitarian level % that buys regularly

Chocolate (Hedonic) 6.00 2.89 88,3%

Butter (Utilitarian) 4.12 4.38 86.8% Table 11, Hedonic level Product types

We indeed see that Chocolate is being perceived as more hedonic compared to the butter products. Furthermore, we see that the butter products are being evaluated as slightly more than hedonic.

6.2 Basic Analysis & Pre-insights

Prior to the hypothesis testing the variables have to be ordered and combined. Furthermore, the internal reliability has to be checked by using Cronbach’s Alpha. As mentioned before, participants were asked to each evaluate 6 different products. Amongst these questions were multi item scales, measuring nostalgia, purity, originality, and traditionalism. In the next section we will test if these variables can be combined and they will be tested for internal reliability.

6.2.1 Authentic elements

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seems appropriate in this situation. The initial principal component factor analysis, focused on Eigen values > 1 resulted in the extraction of 2 components. However, the multi-item scales were built to measure 4 different authentic elements; therefore, the factor analysis was conducted again. This time, the fixed amount of components to extract was set to be 4. The second factor analysis, with a fixed amount of 4 components to be extracted, used the Varimax factor rotation method. It turned out that the related factors were perfectly loading on the 4 different components (see appendix 2). Fortunately no strong signs of cross-loading occurred and all the factors were loading high on one component (all loadings were above 0.5). In order to test if the factors, composed of 4 different items, are internally consistent; Cronbach’s Alpha was computed (see table 13). Deleting items did not lead to significant increases in the Cronbach’s alphas; therefore, we decided to keep all the 16 items within the 4 factors.

Table 13, Internal consistency Factor Analysis

6.2.2 Test of Normality

In order to test if the data is normally distributed the skewness and kurtosis have to be tested. The statistical output representing the skewness of the data explains whether or not the data is asymmetrical and differs from a normal distribution. The output representing the kurtosis statistics tells us whether or not the distribution of the data is peaked or flat. We will start off with the skewness of the variables: Nostalgia, traditionalism, and price consciousness have a positive skew >0 which means that most values are located to the left side of the mean, and that the distribution is skewed to the right where the extreme values are located. Pure, Original, and the perceived product quality have a negative skew, < 0. This means that in this case the most values are located to the right side of the mean, and the most extreme values are located on the left side. Therefore, these variables are skewed to the left. Furthermore, all the variables have a platykurtic kurtosis, which means that the values are < 0. In this case, the distribution is flatter than normal and the values are wider spread around the central mean. Furthermore, using the Kolmogorov Smirnov test of normality tells us that all the variables are normally distributed at a significance level of 0.05. And since the skewness and kurtosis statistics are not showing

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extreme values, normality will be assumed for further analysis. The results of the normality test can be found in table 14 and in appendix (4).

Table 14, Skewness and Kurtosis statistics

6.2.3 Correlations

Before the hypotheses are tested, pre-insights are gained in the relationships between the constructs by looking at Pearson’s correlations. First of all, the authentic elements are expected to have a positive correlation with the willingness to pay and purchase intention, the results indeed do show a strong positive correlation between all the authentic elements and the dependent variable. Furthermore, the perceived product quality and hedonic level were expected to correlate positively as well, however, the relationships are not statistically significant for the hedonic level. Of course, the participants’ level of price consciousness is expected to negatively correlate with the willingness to pay. And we indeed observe significant negative correlations for this variable. Finally, we see that all the product types are positively correlating with the willingness to pay and purchase intention, except for the C-label products, which is in line with the expectations as well. The results can be found in appendix 4.

41 WTP Purchase intention Nostalgic R .370** .562** Sig. .000 .000 Purity R .571** .487** Sig. .000 .000 Original R. .691** .589** Sig. .000 .000 Traditional R. .548** .477** Sig. .000 .000

Perceived product quality R. .607** .677**

Sig. .000 .000 Price consciousness R. -.103** -.087** Sig. .000 .002 Hedonic Level R. .029 .068 Sig. .322 .019* R .135** .193** A-Label Sig. .000 .000 C-Label R. -.361** -.177** Sig. .000 .000 Local product R .096** .096** Sig. .001 .001 Organic Product R .178** .052 Sig. .000 .07 Fair-Trade Product R. .233** -.059* Sig. .000 .04

Table 15, Correlation Matrix **Significant at 1% level *Significant at 5% level

6.2.4 Multicollinearity

Before conducting the regression and moderation analysis, the variables have to be tested on multicollinearity. Multicollinearity is present when two or more predicting variables are highly correlated to each other. Multicollinearity may lead to incorrect insights concerning the effect of individual variables in the model. Within this paper we state that multicollinearity is present when the VIF and the tolerance scores, are respectively higher than 4 or lower than 0.25. The results concerning the main independent variables are displayed in table 16.

Variable Tolerance VIF

Nostalgic 0.639 1.566

Pure 0.252 3.961

Original 0.219 4.559

Traditional 0.250 3.994

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Since we are working with combined variables after the Factor analysis, we first tested the computed variables for signs of multicollinearity. As displayed in table 16, the computed variables do have the tendency to score around or slightly above the accepted VIF scores. Relatively low tolerances scores are detected as well. Therefore, we decided to continue the analysis with the 4 generated factor scores from the previous factor analysis.

6.2.5 Overall Product evaluations

Eventually we are also interested in the differences between the different types of products that were presented to the participants, and how differently the products were evaluated. The participants were asked to evaluate the mass (A and C label) products and the ‘greenish’ (local, organic, fair-trade) products on: perceived product quality, purchase intention, and eventual willingness to pay. Both purchase intention and perceived product quality were measured using multiple questions with a 7-point Likert scale. Internal reliability was checked by using Cronbach’s alpha. Since these scores were higher than the cut off level of 0.7, the new variables “perceived quality” and “purchase intention” were used for further analysis. Furthermore, the participants’ willingness to pay was measured by presenting them with a fictive ‘normal’ price of €1,50 (for actual prices see table 4) and then the participants were asked what they would be willing to pay for the presented product. The participants were able to choose from 8 options, varying from less than €0,75 to more than €2,25.

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A-label C-label Local Organic Fair-trade Purchase intention 4,52*** 3.77*** 4.57*** 4.32* 4.02** Perceived quality 4.51*** 3.62*** 4.83*** 4.68*** 4.45*** WTP 5.03*** 3.79*** 5.21*** 5.35*** 5.46*** Nostalgic 3.29*** 2.67*** 3.97*** 3.23 3.09 Purity 3.78*** 3.94*** 4.80*** 5.02*** 4.50*** Original 4.06 3.50*** 4.73*** 4.70*** 4.69*** Traditional 3.40*** 3.28*** 4.64*** 4.40*** 4.22*** Table 17, Overall Product evaluations

*** significant at 1% ** significant at 5% *significant at 10%

6.3 Testing Hypotheses

The hypotheses that were discussed in the literature review will be tested in the following chapter. We will start off with the main model, which is the influence of the authentic elements on the participants’ willingness to pay price premiums. These fundamental influences will be explored by using a linear regression analysis(1). Furthermore, we will then discuss the first extended model(2), which includes the different product types as well. The second extended model(3) will zoom in on the effect of all the control variables, whereas the final model(4) will explain the moderating role of the product’s perceived hedonic level.

6.3.1 Model (1), Main model

In order to test the fundamental relationship in our conceptual model the influence of the authentic elements on the willingness to pay will be tested by using a linear regression analysis. The first hypotheses were: H1a-d:The authentic perception of the product (e.g. Traditional,

pure, local, and original) positively influences the consumers’ willingness to pay a price premium for the product. When we test the fundamental model with a linear regression, we see