THE EFFECTS OF BRAND IMAGE AND TRACEABILITY CERTIFICATION ON CONSUMERS VALUE PERCEPTIONS: MEDIATING ROLE OF PERCEIVED QUALITY AND

PERCEIVED RISK Hui-Chiung Loa*, Hsiao-Chien Changb and Chiao-Feng Changa Department of Business Administration, Tamkang University, Taiwan Department of Business Administration, Chungyu Institute of Technology, Taiwan
a

ABSTRACT Food safety outbreaks world-wide has increased consumers concerns over the safety of food they consume. Food traceability system and traceability certification has been introduced in Taiwan to reduce risks in food purchase and consumption. However, the effect of traceability certification has not yet been explored in conjunction with brand image, a well-established quality cue. This paper investigates the effects of both brand image and traceability certification on consumers perception of value, with quality and risk perceptions as mediating variables. A paper-based survey was conducted during the period of April, 2011, in the Metro Taipei region. 320 respondents were sampled. Results indicate that a favorable brand image, as well as traceability certification, had positive impacts on consumers perceived quality of processed food products. At the same time, consumers risk perceptions were reduced in the presence of brand image and traceability certification. Perceived value was found to be influenced by both brand image and traceability certification, mediated by quality and risk perceptions. The findings are discussed and directions for future research are presented. Keywords: Brand Image, Traceability Certification, Perceived Value, Perceived Quality, and Perceived Risk ___________________________________________ * Corresponding Author: Hui-Chiung Lo, Department of Business Administration, Tamkang University, Tamsui, Taipei Hsien, Taiwan. Email: hclo@mail.tku.edu.tw

INTRODUCTION A number of food safety outbreaks such as mad-cow disease, foot-and-mouth disease, to the more recent ractopamine-related issues in Taiwan, have caused considerable drop in consumer confidence in food. In order to restore consumer confidence and specify proper responsibilities between food supply-chain actors, the Taiwan government has implemented food traceability system, a record-keeping system that allows the tracking and tracing of food products from farm to fork, thereby reduce information asymmetry as well risks consumers face during food purchases. In addition to food traceability system, brand image, a well-established concept in marketing field, has also been employed as an effective tool in increasing consumers quality and value perceptions, as well as reduction of consumers perceived risks (Dodds et al. 1991; Grewal et al. 1998). Several studies with focus on consumer perceptions of food traceability system showed that consumers, in general, feel the system increase both quality and safety perceptions of food (Giraud and Halawany, 2006; Verbeke and Ward, 2006; Rijswijk and Frewer, 2008). Researches with regards to brand image and quality and risk perceptions are well discussed. However, there is a lack of integrative study on both food traceability system and brand image and their effects on consumer perceptions. The current study aims to investigate consumer perceptions of quality, risk and value with regards to favorable/ unfavorable brand image and presence/absence of food traceability certification, and to examine the individual effects. Moreover, the current study attempts to examine the relationships between quality, risk, value perceptions, brand image, and traceability. LITERATURE REVIEW A number of literatures discussed the effects of food traceability certification on consumer perceptions, positively influencing consumer trust and quality perceptions and reduce perception of risks. Food that are certified traceable, as stated by Hobbs (2005), generally receive higher trust from consumers, similar results are reported in other related researches as well (Issanchou, 1996; Bredhal, 2004; Loureiro and Umberger, 2007). By verifying that a food is certified traceable and reduction of information asymmetry, consumers effectively reduce the risks that are perceived to be present. Reduction of risk perceptions is crucial in boosting consumer trust and value

perceptions (Whitworth and Simpson 1997; Choe et al.2008). Brand image is a well established concept in the field of marketing. Richardson et al. (1994) stated that consumers employ a products brand image in deriving overall perceptions of the specified product. A product with higher brand image may be inferred by consumers as product of superior quality and value. Jacoby et al. (1971) conducted an experiment, using beer as test product, discovered that consumers perception of quality and value are significantly affected by brand image. Similar conclusions were derived by Shimp and Bearden (1982); Rao and Monroe (1989), supporting the notion that brand image, in many occasions, served as consumers quick reference, or short-hand of quality and value representation. In order to investigate the joint effects of traceability certification and brand image on consumers perception of quality, risk and value, a paper-based survey was conducted in April of 2011. The following sections discuss the hypotheses of this study. HYPOTHESES The preceding discussions suggested several direct relationships of brand image and traceability certification on consumers perception of quality and risk. This study also posits several indirect, relationships between brand image, traceability certification and perceived value, mediated by quality and risk perceptions. The hypotheses of this study are as follows: H1: Consumers perception of quality is higher for black pork sausage with high brand image than products with low brand image. H2: Consumers perception of risk is lower for black pork sausage with high brand image than products with low brand image. H3: Consumers perception of value is higher for black pork sausage with high brand image than products with low brand image. H4: Consumers perception of quality is higher for traceability certified black pork sausage than products without traceability certification. H5: Consumers perception of risk is lower for traceability certified black pork sausage than products without traceability certification. H6: Consumers perception of value is higher for traceability certified black pork sausage than products without traceability certification. H7a: Consumers perceived quality mediates the relationship between brand image and perceived value. H7b: Consumers perceived risk mediates the relationship between brand image and perceived value. H8a: Consumers perceived quality mediates the relationship between traceability

certification and perceived value. H8b: Consumers perceived risk mediates the relationship between traceability certification and perceived value. RESEARCH METHODOLOGY A convenient sample of 320 survey respondents was drawn from Metro Taipei region. Survey respondents were selected randomly from different convenience stores and supermarkets in April 2011. Convenience stores and supermarkets were chosen to ensure a broad sample of shoppers. Survey respondents were assigned randomly to one of four cells of the 2(high/low brand image) x 2(certified/uncertified traceable) between-subject design. The number of respondents in each cell was 77 ~ 82. Respondents were first asked to read a short description of food traceability certification. Then the respondents were told about the brand they were assigned to. The description contained information about the brand, and whether the brand has obtained traceability certification for their products. Following the short description, respondents were asked to complete the survey, which captures their stated quality, risk, and value perceptions of black pork sausage produced by the assigned brand on a 7-point likert scale. Standard demographics were also captured. The entire survey takes about 10 minutes to complete. RESULTS AND ANALYSIS Manipulation Check Brand image and traceability certification were manipulated by informing respondents about the reputation of brands previous products, and the presence/absence of traceability certification for the brands products. Respondents in the high (low) brand image group were informed that the brand is a long-standing brand of over 50 years of history (relatively new brand of less than 5 years of history) with well-above average (below average) general consumer satisfactions. For traceability certification, respondents in the certified (uncertified) traceable group were informed that the products of the brand are certified (uncertified) traceable. Hypotheses Testing

Respondents perception of quality was measured by averaging six 7-point items (Cronbachs = 0.943). An ANOVA test was conducted to test the statistical difference between high/low brand image groups. The result was statistically different (M = 4.68 vs. 4.00), F (1, 318) = 60.486, p < .0001. Similar steps were conducted for certified/uncertified traceable groups, (M = 4.54 vs. 4.14), F (1, 318) = 17.599, p <.0001. Hence, H1 and H4 are supported. Respondents perception of risk was similarly measured by averaging twenty-one 7-point items (Cronbachs = 0.961). The result of ANOVA test indicated that the mean risk perceptions of high/low brand image were statistically different (M = 3.60 vs. 4.14), F (1, 318 = 29.290), p < .0001. The result for certified/uncertified traceable groups was similarly different statistically (M = 3.73 vs. 4.01), F (1, 318 = 7.517), p <.01. Hence, H2 and H5 are supported. Perception of value was measured by averaging seven 7-point items (Cronbachs = 0.922). ANOVA test showed that the mean value perception of both high/low brand image groups (M = 4.16 vs. 3.76, F (1, 318) = 26.06, p < .0001.) and certified/uncertified traceable groups (M = 4.04 vs. 3.87, F (1, 318) = 4.557, p <.05) were statistically different. Hence, H3 and H6 are supported. In summary, the manipulation of descriptions was consistent with the intended research objectives, and Hypotheses H1 thru H6 are supported. The means and standard deviations of results are provided in table 1. Table 1: Mean Perceived Quality, Perceived Risk and Perceived Value Brand Traceability High Low Certified Uncertified Perceived Mean 4.68 4.00 4.54 4.14 Quality Sd .79 .77 .86 .81 Perceived Mean 3.60 4.14 4.01 3.73 Risk Sd .85 .92 .95 .87 Perceived Mean 4.16 3.76 4.04 3.87 Value Sd .65 .76 .69 .77 Mediation Testing Next, respondents perceived quality and perceived risk are tested for mediation effects by means of multiple regression analysis. Following Baron and Kenny (1986)s test of mediation, the coefficients between independent variable, dependent variable and mediation variable are collected. Summary of coefficients are presented in table 2.

Table 2: Regression Results of Brand Image x Perceived Quality Model 1 Model 2 Brand Image .275*** .015 Perceived Quality .651*** 2 Adjusted R .073 .428 ***Denotes sig. at p <.0001 Dependent Variable: Perceived Value As shown in table 2, in model 1, brand image is a significant and positive predictor of perceived value. As perceived quality entered the regression equation, the coefficient of brand image is reduced, while perceived quality remained a positive and significant predictor of perceived value. Hence, perceived quality is a full-mediator between brand image and perceived value. Table 3: Regression Results of Brand Image x Perceived Risk Model 1 Model 2 Brand Image .275*** .125* Perceived Risk -.518*** 2 Adjusted R .073 .317 ***Denotes sig. at p <.0001 *Denotes sig. at p <.05 Dependent Variable: Perceived Value Table 3 reports similar results as table 2. The coefficient of brand image is reduced, but remained significant at p < .05, as perceived risk (-.518, P <.0001) entered regression, denoting perceived risk as a partial-mediator of brand image and perceived value. As shown in table 4, traceability certification is a significant and positive predictor of perceived value ( = .119, p <.05). As perceived quality entered the regression equation, the coefficient of traceability certification is no longer significant, while perceived quality is a positive and significant predictor of perceived value ( = .665, p < .0001). Hence, perceived quality is a full-mediator between traceability certification and perceived value.

Table 4: Regression Results of Traceability x Perceived Quality Model 1 Model 2 Traceability .119* -.033

Perceived Quality Adjusted R2 .011 ***Denotes sig. at p <.0001 *Denotes sig. at p <.05 Dependent Variable: Perceived Value

.665*** .429

Table 5: Regression Results of Traceability x Perceived Risk Model 1 Model 2 Traceability .119* .035 Perceived Risk -.549*** 2 Adjusted R .011 .314 ***Denotes sig. at p <.0001 *Denotes sig. at p <.05 Dependent Variable: Perceived Value Traceability certification is a significant and positive predictor of perceived value ( = .119, p <.05), as perceived risk entered the regression equation, the coefficient of traceability certification loses its significance, while perceived risk is a negative and significant predictor of perceived value ( = -549, p < .0001). Hence, perceived risk is a full-mediator between traceability certification and perceived value. In summary, the variables perceived quality and perceived risk and their mediating effects were examined. There exists mediating effects for both mediating variables; hence, hypotheses H7a thru H8b are supported. CONCLUSION In this paper, the effects of brand image and food traceability certification on consumers perception of quality, risk and value are investigated. The results show that both brand image and traceability certification are positively related to product quality and value, at the same time, both variables reduce consumers perception of risk. The individual findings are consistent with past researches conducted in different product categories, proving the generality of consumer perceptions theories. Further implications of the results are that while a favorable brand image and presence of traceability certification both increases consumers quality and value perceptions, the effects of a favorable brand image surpasses that of presence of traceability certification. This result might be, in part, due to the fact that traceability certification is a relatively new concept in Taiwan, and also partly due to the fact that consumers infer superior product quality and safety attributes from a favorable or

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