Willingness to Pay for Certified Wooden Furniture: A Market Segment Analysis
Keywords:
Certification, eco-labeling, market segmentation, stated choice, principal component analysis, willingness to pay, wooden furniture, wood productsAbstract
Market segmentation techniques were applied to identify and describe potential consumer clusters with highest hypothetical willingness to pay (WTP) for certified wooden furniture. Representative samples of the British and Norwegian population were surveyed by telephone and asked to choose between two profiles of wooden furniture, where one was eco-labeled and more expensive. The eco-labeled would certify that the wood originated from sustainable forestry. The survey data allowed for substantiating the attribute segmenting with the hypothetical choice behavior between eco-labeled and unlabeled wood and logit model estimates of WTP. The statistical method to identify the segments was k-means cluster analysis, principally using stated importance of product attributes and estimated WTP for eco-labeling as grouping variables.
One segment profiled as an "eco-segment" was confirmed by placing a higher value on the dimensions (values) of environmentalism—trusting environmental and outdoor organizations regarding information about forestry and environment, and having a higher rate of membership in environmental organizations. This "eco-segment" amounted to more than 1/4 of the samples. The British eco-segment could be described as relatively "greener" than the Norwegian. The British also had higher estimated WTP for eco-labeling compared to the Norwegians. The eco-segments had their media interest directed more towards intellectual issues than the other segments. Demographically, the eco-segments did not differ significantly from the other segments, except that the British had a greater female majority.
References
Ajzen, I., And M. Fishbein. 1977. Attitude-behavior relations: A theoretical analysis and review of empirical research. Psycholog. Bull.84(5):888-918.nAntil, J. H. 1984. Socially responsible consumers: Profile and implications for public policy. J Macromarketing (Fall): 18-38.nBishop, R. C., And T. A. Heberlein. 1979. Measuring values of extramarket goods: Are indirect measures biased? Am. J. Agric. Econ.61:926-930.nBlumenschein K., M. Johannesson, G. C. Blomquist, B. Liljas, And R. M. O'Conor. 1998. Experimental results on expressed certainty and hypothetical bias in contingent valuation. So. Econ. J.65:169-177.nBurrows, J. And B. Sanness, eds. 1998. The competitive climate for wood products and paper packaging; The factors causing substitution with emphasis on environmental promotions. A study performed by the Subgroup Substitution Project of the Joint FAO/ECE Team of Public Relations Specialists in the Forest and Forest Industries Sector. Oslo, Norway. 202 pp. excl. app.nCoddington, W. 1993. Environmental marketing: Positive strategies for reaching the green consumer. McGraw Hill Inc., New York, NY.nDemoskop. 1996. Nordic forestry: The public opinion in Holland, Germany, and Great Britain. Report 7093rp01, Demoskop AB, Stockholm, Sweden. Prepared by Arne Modig for Living Forests (Norway), Svensk Skog (Sweden), and Finnish Forestry Association. Unpublished.nFao. 2002. The global forest resource assessment. FAO. Rome, Italy.nGreen, P. E., And A. M. Krieger. 1991. Segmenting markets with conjoint analysis. J. Marketing55:20-31.nHanemann, W. M., And B. J. Kanninen. 1999. Statistical considerations in CVM. Ch. 11, pages 302-441, in Bateman, I. J., and K. G. Willis, eds. Valuing environmental preferences: The theory and practice of the contingent valuation method in the U.S. EU, and developing countries. Oxford University Press, Oxford, UK.nHarman, H. H. 1970. Modern factor analysis. ed. 2. University of Chicago Press. Chicago, IL.nKriström, B., & P. Riera. 1996. Is the income elasticity of environmental improvements less than one? Environ. Resource Econ.7:45-55.nKuuluvainen, J., H. Karppinen, And V. Ovaskainen. 1996. Landowner objectives and nonindustrial private timber supply. Forest Science42(3):300-309.nMcFadden, D. 1974. Conditional logit analysis of qualitative choice behavior. In P. Zarembka, ed. Frontiers in econometrics. Academic Press, New York, NY.nMoon, W., W. J. Florkowski, B. Bruückner, And Schonhof, I. 2002. Willingness to pay for environmental practices: Implications for eco-labeling. Land Economics78(1):88-102.nOttman, J. A. 1992. Green marketing, challenges, and new opportunities for the new marketing age. NTC Business Books, Chicago, IL.nOzanne, L. K., And P. M. Smith. 1996. Consumer segments for environmentally marketed wooden household furniture. Wood Fiber Sci.28(4):461-477.nOzanne, L. K., And R. P. Vlosky. 1997. Willingness to pay for environmentally certified wood products: A consumer perspective. Forest Prod. J.47(6):39-48.nPajari, B., T. Peck, And E. Rametsteiner, ed. 1999. Potential markets for certified forest products in Europe. EFI Proceedings No. 25, European Forest Institute, Finland. 352 pp.nPickett, G. M., N. Kangun, And S. J. Grove. 1995. An examination of the conserving consumer: Implications for public policy formation in promoting conservation behavior. In M. J. Polonsky and A. T. Mintu-Wimsatt, eds. Environmental marketing strategies, practice, theory, and research. Haworth Press, Inc., Binghampton, NY.nPolonsky, M. J., And A. T. Mintu-Wimsatt, eds. 1995. Environmental marketing strategies, practice, theory and research. Haworth Press, Inc., Binghampton, NY.nRametsteiner, E. 1999. European citizens and their attitude towards forests, forestry and wood. In B. Pajari, T. Peck, and E. Rametsteiner, eds. Potential markets for certified forest products in Europe. EFI Proceedings No. 25, European Forest Institute, Finland.nRametsteiner, E., And M. Simula. 2003. Forest certification—An instrument to promote sustainable forest management? J. Environ. Mgmt.67:87-98.nSAS 1997. SAS/STAT (R) User's Guide—Version 6, 4th ed. SAS Institute, Inc., Cary, NC. 1848 pp.nSedjo, R. A., And S. K. Swallow. 2002. Voluntary ecolabeling and the price premium. Land Economics78(2): 272-284.nStewart, D. W. 1981. The application and misapplication of factor analysis in marketing research. J Marketing Res.18(2):51-62.nTallontire, A., And E. Rentsendorj. 2000. Consumers and ethical trade: A review of current literature. Draft January 2000, Natural Resource & Ethical Trade. UK.nTufte, P. A., And A. Ali. 1998. Innflytelse, tillit og forbrukeratferd: Arenaer for dannelse av holdninger til miljø i Nederland, Storbritannia, Tyskland og Norge. (Influence, confidence and consumer behaviour: Arenas for formation of attitudes toward the environment in the Netherlands, the UK, Germany and Norway.) Working Report No. 3, SIFO—National Institute for Consumer Research (In Norwegian). 274 pp.nVeisten, K. 2002. Potential demand for certified wood products in the United Kingdom and Norway. Forest Science48(4):767-778.nVlosky, R. P., And L. K. Ozanne. 1997. Forest products certification: The business customer perspective. Wood Fiber Sci.29(2):195-208.n
Downloads
Published
Issue
Section
License
The copyright of an article published in Wood and Fiber Science is transferred to the Society of Wood Science and Technology (for U. S. Government employees: to the extent transferable), effective if and when the article is accepted for publication. This transfer grants the Society of Wood Science and Technology permission to republish all or any part of the article in any form, e.g., reprints for sale, microfiche, proceedings, etc. However, the authors reserve the following as set forth in the Copyright Law:
1. All proprietary rights other than copyright, such as patent rights.
2. The right to grant or refuse permission to third parties to republish all or part of the article or translations thereof. In the case of whole articles, such third parties must obtain Society of Wood Science and Technology written permission as well. However, the Society may grant rights with respect to Journal issues as a whole.
3. The right to use all or part of this article in future works of their own, such as lectures, press releases, reviews, text books, or reprint books.
