Understanding Heterogeneous Consumer Preferences in Chinese Milk Markets: A Latent Class Approach

Xiang Wu, Bin Hu and Jie Xiong

Journal of Agricultural Economics, 2020, vol. 71, issue 1, 184-198

Abstract: We examine heterogeneous consumer preferences in Chinese milk markets. Using a discrete choice experiment, we examine how the brand, quality certification, traceability label and price influence consumers' milk choices. We identify four consumer segments using a latent class model: price conscious (9.8%), balanced thinking (19.8%), health conscious (57.5%), and environment conscious (12.9%) consumers. These four segments have distinct preferences: price conscious consumers prefer green certification; balanced thinking consumers have the highest willingness to pay for traceability labels; health conscious consumers have strong brand awareness; and environment conscious consumers prefer organic certification and traceability labels and use price as a quality signal. Such diversity of consumer preference can be explained by four psychological factors: price consciousness, food safety concerns, health consciousness and environmental concerns.

Date: 2020
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