The Effects of Organic Label on Marketing Performance (Prices, Sales, and Margins)

Summary

The measurement of marketing performance is delicate because of the multidimensional nature of marketing. Past researches have assessed the market performance only using attitudinal data. This paper investigates the impact of organic label on performance, with a differentiation between market and financial performance. Two studies are implemented, build on real market data, to assess the price, sales volume and market share performance of organic eggs, and measure the margin creation according to store type. Our results reveal a positive trend for higher quality products, and that core organic consumers are not pricesensitive, which increase market performance. Critically, we found a negative correlation between the market share growth and the margin growth of organic products. This effect is mitigated by the store type which commercializes the organic product, highlighting the importance of the interaction between the two quality signals.