Surprising Consumer Inferences

What we associate with healthy positioning, private labels, and nutrition claims

Healthy Diets – Empty Wallets

A recent study shows that many consumers cognitively associate healthy choices with higher prices. This intuition is based on so-called lay beliefs – i.e. mental short-cuts consumers use to simplify the world around them.

Via several experiments the authors showed:

• Consumers consider snacks with a health grade of A- (e.g. Granola bars, breakfast crackers) as more expensive than a similar snack with a health grade of C. This confirms the healthy = expensive perception.
• The effect works in both directions. Not only do consumers see a product which is objectively healthier as more expensive, they also infer a more expensive product to be healthier.
• Consumers rely more heavily on the healthy = expensive intuition when information on price or ingredients is ambiguous or in situations in which they encounter new or less meaningful health claims (e.g. “natural”).

Brand manufacturers should be aware that consumers tend to overgeneralize the healthy = expensive intuition and should counterbalance this bias via communication (e.g., “Save money while getting healthier”).

Beware the informed shopper

A study on willingness-to-pay for brands versus private labels in the pharmaceutical industry shows that the more consumers are educated the more they prefer store brands vis-à-vis national brands. If all consumers were as informed as pharmacists, the market share of national brand headache remedies would fall by half and total expenditure on headache remedies would fall by 14 percent. Consequently, uninformed shoppers explain a sizeable portion of price premium for national brands in product categories where products are physically homogeneous. Another reason for manufacturers to never cease to strive for clear differentiation of their brands from private labels.

Nutrition claims: do they impact choice?

No sugar added. High in protein. With added vitamin C. Many products carry at least one nutrition claim emphasizing healthiness. At the shelf, shoppers often ignore such claims because of information overflow or a general dislike of this selling tactic.

Nutrition claims should be used wisely:

• Negatively framed claims (e.g., no sugar added) boost shoppers’ choices more than positive ones (e.g., plus vitamin C).
• Market leaders benefit more from nutrition claims because their brand equity enhances credibility. Small brands and strongly promoted brands are worse off.
• Nutrition claims work better for healthy than for unhealthy categories—for the latter they spoil the anticipated pleasure of indulgence in, for example, chocolate and crisps.
• High promotional activities in categories reduce the effectiveness of nutritional claims: Shoppers are distracted by price signals.
• Finally, nutrition claims benefit from high category advertising activities because they add to category involvement.

Because nutrition claims have no universal impact on shoppers’ choice, brand manufacturers should carefully frame their health claims.