Consumer trust in organic food on the German and Russian markets
General concept of organic food: basic ideas and explanations. Legislative base for organic production. Understanding and estimating trust in organic food. Trust in organic food among Russian and German consumers: comparative analysis of empirical data.
Рубрика | Маркетинг, реклама и торговля |
Вид | дипломная работа |
Язык | русский |
Дата добавления | 30.10.2017 |
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To begin with, it is necessary to say that “The Codex” highlights that organic production is based on three main pillars, which are social, ecological and economical sustainability (Ibid.). As it is highlighted, “the primary goal of organic agriculture is to optimize the health and productivity of interdependent communities of soil life, plants, animals and people” (Ibid. 1). It means that organic food production could not be narrowed just to one aspect of understanding, for example, production process or useful qualities. It is a complex phenomenon, which should be perceived as an integral conception and consumers should not perceive organic food just from one particular side but should understand it in a whole, including its influence on all components of the process from people to soil. As a rule, such notions as “organic”, “biodynamic”, “biological”, “ecological” on a product signal consumers that they were produced according to organic rules, while products from that production, which is only on the way to become organic and do not meet all the necessary requirements, could be labelled only as “transition to organic” (Ibid.). However, the unified name for these products is absent. For instance, in Germany, mostly, such products are labelled as “bio”, while in Russia full range of names is used: bio, organic, eco, natural, etc.
Interestingly, the goals of the guidelines are not only to protect consumers against decision and fraud on the market; to facilitate import in a sense that national systems of organic production have the same basis and could be accepted in international trade system; and to preserve natural resources and environment by maintaining and enhancing biological agriculture systems in member countries (CAC/GL 32-1999). But it also takes into consideration producers, who are avoiding misinterpretations and confusing other ways of production as being organic (Ibid.). That is why labelling could be applied only to those products, which were manufactured by producers under the supervision of an authority or certification body. It is explained by the fact that under the conditions of growing market, where just a tiny part of products is delivered directly from producer to consumer, it is hardly possible for them to stay in close contact and be mutually controlled (Ibid.).
Nevertheless, those controlling bodies “should be independent of economic interests with regard to the certification of operators” (Ibid. 2). It is a rather disputable question, because some cases of private certification, for instance, LavkaLavka in Russia or Bioland in Germany as cooperatives could hardly be considered as independent as long as they both are umbrella organizations for farmers and, surely, they have some economic interests. However, labels could help producers to signal consumers about the ecological purity of their product and make them recognizable in a way to be distinguished from other range of food products. The only possible problem is that, for instance, in Russia products that have been labelled as “organic” do not always really organic (Kolchevnikova, 2013), while there is a lack of such cases evidence in Germany. Thus, the most important thing about these guidelines is its statement that “organic” is a label that could be assigned only to those products, which “have been produced in accordance with organic production standards and certified by a duly constituted certification body or authority” (CAC/GL 32-1999, 1).
Generally, the guidelines contain information on each stage of production starting from growing and ending with import regulations. It contains detailed information about plants and plant growing including the questions of soil treatment and additives acceptable for usage against different kinds of pests; issue concerning livestock and livestock products referring to the way every type of cattle is handled, including its origin, feeding, health care, housing, free-range conditions, and slaughter; proceed with handling, storage, transportation, processing and packaging (Ibid. 10-18). Annex 2 (Ibid. 19-29) contains the list of substances allowed to be used in organic production separately for soil fertilizing and conditioning; for plant pest and disease control; ingredients of non-agricultural origin, e.g. chemical, which could be used in a certain cases of production; processing aids to prepare food for further delivery to a consumer. What it shows is that every step is clearly defined; every part of production should meet special requirements. It lets consumers know how organic product must be produced.
“The IFOAM norms for organic production and processing” was in turn developed by International Federation of Organic agriculture and Movements (IFOAM) located in Bonn, Germany, which is the only international umbrella organization of the organic world, uniting an enormous diversity of about 800 members in 117 countries and contributing to the organic vision worldwide (http://www.ifoam.bio/en/about-us). However, the basis for this document is not only IFOAM basic standards but also Codex Alimentarius itself as the first international set of rules for organic production (IFOAM norms). Russia and Germany are both members of this organization what allows to state that they should have a common base for organic food concept. Interestingly that many German organic food agents, such as Alnatura (organic food store); Demeter, Rapunzel, BOWL (labels); Bioland (organic food association) are affiliates of this organization (http://www.ifoam.bio/sites/default/files/directory_2015updated_highres.pdf). As well as some Russia companies working in the field of organic food production, such as Association for organic & biodynamic agriculture “Agrosophia”; Eco-control; Non-commercial partnership “Ecological Union”; Organic Market LLC, also work in cooperation with IFOAM (Ibid.). In general, it shows that organic food market agents both in Russian and Germany in their activity should seem to follow the same rules and standards.
When analysing IFOAM norms it becomes clear that it contains all the same parts as Codex Alimentarius regarding objectives and requirements of organic standards; standards for organic production and processing referring the every part of the process and type of food produced (crops, animal husbandry, agriculture); accreditation requirements for bodies certifying organic production and processing; labelling regulations. However, throughout the text, it is possible to find quite many references to the Codex Alimentarius, what shows that still the latter could be named as the real basic set of rules for organic production. Nevertheless. IFOAM norms are even more extended and detailed. This document represents strict instructions regarding every step of production. It also provides a list of additives that can be used in the production chain, but still many of them could be further considered by local controlling bodies like the Codex does.
Despite extensive and detailed information, IFOAM norms don't require a product to be labelled organic to be claimed as such. Thus, it is written that an organic product is “a product that has been produced, processed, and/or handled in compliance with organic standards” (IFOAM norms, 31). And then the description of these standards is given, including the packaging norms which are even more precise than those mentioned in the Codex. But what is especially notable about this particular document is that in comparison with the Codex it for the first time touches upon the questions of Social Justice (IFOAM norms, 9) and claims social rights as an integral part of organic agriculture and processing (Ibid.) “The fairness principle of organic agriculture emphasizes that those involved in organic agriculture should conduct human relationships in a manner that ensures fairness at all levels and to all parties involved” (Ibid.). It is a clearly new step in defining organic food notion.
In brief, organic product, according to the guidelines, could be claimed organic, only if it meets all the requirements listed there and labelled as organic (GL 32-1999, IFOAM norms). To be more precise, “organic is a labelling term that denotes products that have been produced in accordance with organic production standards and certified by a duly constituted certification body or authority” (GL 32-1999, 1). As we can see, the question of farm's conformance to the rules, in most cases, is delegated to special certification and controlling authorities. Special recommendations are given for them, regarding such issues as how and when to conduct expecting; and even the question about allowed amount of substantives is also a responsibility for these controlling bodies. That basically means that controlling bodies are those who have the whole responsibility to give consumers full and accurate information about organic food by the means of labels. It, in turn, indicates that existence or absence of national, local controlling parties and labels define consumer's understanding of organic food concept.
1.3 Understanding and estimating trust in organic food
The basic definition of trust and trust relations
It is a common knowledge that various researchers from different fields of studies, including sociology, anthropology, philosophy, psychology, political science, and economy, emphasized the importance of trust relations, however, hardly anyone of them tried to define what the trust is (Misztal, 1996). Nevertheless, there is a common view that trust is a complex and multidimensional phenomenon, which is an inherent part of people's lives, ranging from everyday routine to truly landmark decisions. As long ago as J.S. Mill (1891, 68) it was admitted that “the advantage to mankind of being able to trust one another penetrates into every crevice and cranny of human life”. Thus, any society could hardly exist without at least some level of trust among people and none of the decision could be made without trust. That is why, as the trust is considered to be the basis of any social relations (Ibid.), the sociological theory of trust moves to the forefront. Thus, this part is aimed at revealing the very notion of trust as it is explained by a range of outstanding representatives of sociology. Two major concepts - trust as a sensitive phenomenon and trust as rational term - will be discussed and the possibility of their combination will be justified.
As it has already been mentioned before, sociologists in their vision of the problem of trust split up into two big groups. One we could be named “rationalists” as long as they consider trust as the product of rationalization and calculation (Sztompka 1992; Luhmann 1979, 1988; Coleman, 1990) and the second could be named “fatalists” due to the fact that they think of trust as rather a sensual phenomenon based on people's feelings and beliefs (Giddens, 1990; Fukuyama, 1995).
Surely, when discussing trust, the question arises: what is the very trust? How the term could be defined and what sense do sociologists give to this notion? It goes without saying that when interacting with other people we expect some actions from their side. “All social interaction is an endless process of acting upon expectations, which are part cognitive, part emotional, and part moral” (Barber, 1983, 9). Obviously, we can't predict the outcomes of other's people actions. And it is true, because “if we had such full possibility of prediction, and strong, certain expectations trust would be irrelevant” (Sztompka, 1999, 22). In this case, we would be aware of all possible outcomes, so we are prepared for any situation and there is no place for trust. But, obviously, it is impossible to know everything. It is justified by the fact that people can intentionally hide some kind of information they think to be unimportant and irrelevant for others, or unprofitable to disclose for themselves. Moreover, in some cases, information could be concealed unpremeditatedly. What is more, it could be hardly possible to be fully aware of people's reasons, intentions or motives in everyday life which cause this or those actions. That is why Sztompka says that we remain in the situation of uncertainty because we miss important knowledge (Ibid.).
The most general definition of trust is given by P. Sztompka in his famous work “Trust: a sociological theory” (1992, 25): “Trust is a bet about the future contingent actions of others”. It is reasonable to say that he represents the position of those authors who tend to consider trust as the product of rationalization or calculation. One can try to predict which outcomes will follow this or that action according to various features of other people he communicates with. In other words, «trust is based on an individual's theory as to how another person will perform on some future occasion» (Good, 1988, 33). Surely, it is expected from people, to be honest, and fulfill other's expectations during the process of interacting regardless the sphere of relations. Despite the fact that it is still very hard to predict the outcomes, Sztompka (1992, 26) argues that in this case «we behave «as if» we knew the future».
Along with such authors as N. Luhmann and J.C. Coleman he insists that trust is not something which is groundless, just what is enough to feel, but rather something that can be, at least, partly calculated, basing on some expectations. Supporting ideas of P. Sztompka, N. Luhmann highlights that trust is a social mechanism which is called to mitigate risks. In his point of view “to show trust is to anticipate the future; it is to behave as though the future were certain” (Luhmann, 1979, 10). He also emphasizes that trust is a required condition for the social development due to the fact that modern societies are getting more complicated and less clear what, in turn, causes people's uncertainty in their own future (Ibid). J.C. Coleman continues this argumentation in regard to the rational choice theory and says that trust is connected to the rational choice and presupposes active human actions and his own futurism (Coleman, 1990). The essential assumption of the rational approach is that both parties - a truster and a trustee - are rational actors, whose aim is mostly to maximize their utilities by rational calculations taking into account the available information (Sztompka 1992, 60). F. Tцnnies (1998) supports this idea by stating that trust as a rational relation is based on the maximization of common benefit what means that both parties should gain some profit from an interaction committed and not just that trust is an essentially rational expectations about the - mostly - self-interested behavior of the trusted (Hardin, 1991, 187).
Consequently, some common characteristics prescribed by “rationalists” to the phenomena of trust could be listed. The first is that it necessarily needs human actions, both from the trustee and trusted; the second is that it occurs in situations of uncertainty, in other words, when there are some risks and a lack of knowledge; and, finally, it includes some calculations about future actions from all actors involved. By this, representatives of rational approach are moving from a psychological understanding of trust to the one related more to economics, as long as rationality is known to be the product of the economic activity of an individual. What is more, it is justifiable to name this approach also as relational as long as relations between people and their interactions are crucial for the existence of trust. As P. Sztompka (1992, 26) emphasizes, “trust is more than just contemplative consideration of future possibilities; we must also face the future actively, by committing ourselves to action”.
As it was mentioned earlier, there is also the other group of scientists who claim that trust is a sensual phenomenon and it evades any kind of computation. It even was highlighted earlier by famous economist Adam Smith, who stated long ago that trust is a natural human feeling because people are naturally prone to trustfulness; the need to trust override doubt and suspicion even concerning the most incredulous people (Smith, 2002 [1759]). He highlights that the disposition of trust is the fundamental and prevailing one (Ibid.). Following this reasoning, A. Giddens (1990, 34) defines trust as “confidence in the reliability of a person or system regarding a given set of outcomes or events, where that confidence expresses a faith in the probity or love of another, or in the correctness of abstract principles (technical knowledge)”, but, however, underlines that trust is “a link between faith and confidence” (Ibid. 33). As it is possible to see he interprets trust using the notion of confidence which, however, turns to be different category in Sztompka's theory. The latter argues that confidence, along with the hope; refer to something that happens without our active participation (Sztompka, 1999, 25).
In this case, confidence is more connected to the faith; it doesn't require some actions from the person who renders trust. We trust our parents without any calculations because we believe in them, we are confident in them, we know that they will never deceive us. It gives the reason to claim that confidence is based on more or less taken-for-granted attitude that familiar things will remain stable. It basically means that “trust presupposes awareness of circumstances of risk, whereas confidence does not” (Giddens 1990, 31). If there is a possibility of risk, trust would be necessary but not the confidence. When having a risk a person should know at least partly possible outcomes of his actions, it is hardly possible to blindly follow feelings or beliefs, especially when speaking about actions undertaken in the market.
Fukuyama goes along with Giddens in his reflections about trust. He states that law, contract, and economic rationality provide necessary but insufficient base both for the postindustrial societies stable coexistence and for their prosperity; they should be complimented by reciprocity, moral obligations, responsibilities in front of a society, and with trust, which is based more on habit rather than rational calculations (Fukuyama, 1995, 11). In his opinion, economic prosperity and business success cannot be fully explained by abundance of natural resources, brilliance of intellect, or the presence of good laws and institutions; nor is capitalist success attributable solely to the operations of rational, self-interest in free market environments (Gill, 1995). Instead, economic development requires a culture of trust and capacity for what in Fukuyama's theory is called “spontaneous sociability” (Ibid.) Thus, he emphasizes that trust, in turn, depends on a culture of shared values, a shared language of good and evil and writes that “trust is the expectation that arises within a community of regular, honest and cooperative behavior, based on commonly shared norms, on the part of other members of that community” (Ibid. 26). Fukuyama gives an example of family enterprises which are hardly able to develop further because it is difficult to establish trust relations beyond family, what shows that trust is based on the belief in family relations.
However, based on these ideas, it is fair enough to say that understanding of trust which is based only on feeling and beliefs could be replaced by the notion of confidence. When talking about uncertainty trust is important and it couldn't be based on one's faith. Thus, in modern society, two types of trust - rational and sensual - could coexist (Veselov, 2011, 30). It is known that consensual models, based on implicit, non-participatory and non-contingent forms of trust are no longer working. That is why the notion of “critical trust” has appeared, indicating trust and skepticism may coexist (Poortinga and Pidgeon, 2004). When considering trust on the market exactly this notion could be used to describe market agent's behavior and could be reasonably used to combine rational and sensual approaches to the definition of trust. Now it is possible to define trust as a bet about future fulfillment of one's expectations in a situation of uncertainty, caused by other human's actions and underpinned by a lack of important information, based both on rational calculations and people's beliefs. And in this case “the grounds for trust <…> come down to certain knowledge, information obtained by the truster about trustee” (Sztompka, 1999, 60, 70).
In regard to the structure of trust relations, it is important to say that the presence of two parties is always necessary: one who gives trust named a trustor and one to whom trust is given is called a trustee (Coleman, 1990, 91). Basically, the decision about trust is made by a trustor because only he can decide whether to give trust or withdraw it. However, there is an opinion that a trustee also has a choice, mainly, to honor the trust given to him or not. If both of the parties deliberately make these commitments - to give and to justify trust - then the situation of trust occurs (Ibid.). However, when considering market relations, third parties also sometimes are becoming involved in trust relations. As Coleman highlights, in that case, it turns into tripartite relations (Ibid.).
It is often the case that people on markets deal with actors, which they don't know directly or continuously. In this situation, some intermediaries are needed to ensure that both parties will fulfill their responsibilities. When market agents decide make a deal, they except from each other to behave according to their particular expectations. To be sure that these expectations will be met they necessarily need to receive information about a partner they want to make a deal with. It is not always the case that necessary information can be received from the actor himself as long as market is usually characterized by opportunistic behavior (Veselov, 2011). In turn, it is closely connected with the problem of unequal distribution of information, when market agents possess different amount of knowledge. Therefore each of the actors seeks to find the source which is able to fill this gap in information provision which is considered to be urgent for the deal to be made. Thus each of the parties refers to those who seem to be the most trustworthy in terms of this particular information. Following these argumentation we can define trust on the market as a bet about future fulfillment of one's expectations in a situation of market exchange under conditions of uncertainty caused by other market agents and reinforced by asymmetric distribution of important information, based on knowledge provided by actors which are believed to be the most reliable.
However, when considering the problem of trust in food, it is important to say that there is no such notion as direct trust in food (Kj?rnes, et.al, 2007), as it can be stated in regards to the immediate interaction between market agents; it is hardly possible to trust a product itself. Because trust is a social phenomenon and takes place only when the situations of uncertainty are “of human and not purely natural provenance” (Sztompka, 1999, 20), one trusts food as long as it is humanly created. Surely, food plays a big role in human's lives and at the very least they expect it not to harm their health. For example, they could expect that the food purchased is produced according to the basic sanitary rules. What is more, food could also bear some additional characteristics important for consumers, which are good sensorial qualities, esthetic value, economic benefit, etc. (Kj?rnes, et.al, 2007). However, it is rarely the case, when consumers are able to check the production themselves in order to be sure that the products they purchase are produced by other people in a way they expect it to be. In this way a consumer knows less about food he or she buys in comparison, for instance, to the very producer. That's why the situation of uncertainty acquires and causes the necessity for trust.
Under the described circumstances, the role of information and especially those who provides this information being an intermediary between a consumer and food is getting one of the most important. To put it in other words, consumers do not trust in food directly but they tend to trust either those who provide food for them or those who provide necessary information about it (Ibid.). On the food market different agents are able to give this information starts with a producer itself to advertisement. In this case consumers are able to decide, which one from all the sources seems to be the most trustworthy in terms of filling the information gap. Thus, we can define trust on the food market as a bet about future fulfillment of consumer expectations regarding particular food qualities under the conditions of uncertainty caused by other food market agents and unequal distribution of information about food production, processing and sale process, based on information received from the sources which are considered to be the most reliable in terms of necessary knowledge.
According to the literature describing food markets in general and organic food market in particular (Kj?rnes, et.al, 2007; Bruschi et al. 2015; Hemmerling, 2014; Hoffmann & Eisinger-Watzl, 2015) following actors are mainly involved in the process and could be considered as the key players on the market: consumers, producers, retailers, private certification bodies, official controlling authorities, mass media. Thus, based on who of them provide necessary information about food three basic types of trust could be eliminated: thick interpersonal trust (trust in relatives, friends and other close surrounding); thin interpersonal trust (trust in other consumers and producers), and institutional trust (trust in labels, mass media and advertisement). Thereby trust in food is substituted with the trust in those actors or, in other words, trust in these actors based on information they give about food transit to food itself. Or, as Sztompka (1992, 46) states in his theory, food could be considered as a secondary object “which become the targets only derivatively, in the process of placing and justifying trust toward primary objects”. It means that food becomes a target of trust only when consumers hear or read some information regarding this topic.
Regarding organic food market it is necessary to keep in mind that in comparison to conventional food this kind of provision is usually connected with rather specific expectations. It is often purchased not just to satisfy the need for alimentation but it is also connected with some additional values. As it was mentioned earlier motives for buying organic food can be divided in two groups: egoistic and altruistic. Nevertheless, 5 key characteristics were distinguished in order to describe the specificity of organic products. They are nutrition, quality, safety, ethics and value for money. If a product possesses these qualities then it could be considered as organic. Following this logic we can finally define trust on the organic food market as a bet about future fulfilment of consumer's expectation concerning product to be organic under the conditions of uncertainty caused by other market agents and asymmetrical distribution of information, based on knowledge about organic origin of a product provided by those actors who are believed to give the truthful and reliable information in these terms.
The problem of defining and measurement of trust in organic food
The problem of trust in food arises then and only then when there is a problem of consumer's choice, which precedes the action of purchasing. If a person grows all necessary food by himself there is no place for trust: ha can control all the way food travels from vegetable patch to the plate. Nowadays it is hardly possible to check where a product was really grown; how it was processed; how long did it spend on the road to the shop, etc. Consequently, “trust is intimately linked with the uncertainty of the future, as long as that uncertainty is of human and not purely natural provenance” (Sztompka 1992, 20). Thus, it goes without saying that food supply is the process which is largely dependent on human actions. These are people who make the whole process of food production and distribution possible.
Hence, consumers cannot take it for granted that the food supplier will confirm to their expectations; there should be something to rely on (Kj?rnes, et.al, 2007). Consumers actually can influence, at some point, only the process of food acquiring. For instance, one could choose where, when and what kind of food to buy, but it is still hardly possible to be absolutely sure about the outcomes of these actions. “The consumer, as an individual, has no control over the qualities of the food offered for sale, beyond a capacity to select among goods available in the market-place” (Ibid. 30). People can't have full control over others, especially those whom they don't know personally. They can't control the process of production: how and a kettle is a feed, where it is kept, how it is treated; or how fruits and vegetables are grown. Neither one can control the workers on the place of production: how faithfully do they fulfil their responsibilities. When buying product consumers should rely on something to be sure that the milk he or she is purchasing won't at the very least harm the health. In the same way, a consumer couldn't trust tomatoes to grow organic or cow to give organic milk. Instead, he bases his trust according to information received about the ecological origin of a product.
As we have underlined earlier trust could be defined as a bet about the future fulfilment of one's expectations in a situation of uncertainty, caused by other human's actions and underpinned by a lack of important information, based both on rational calculations and people's beliefs. However, the problem of trust measurement still remains unsolved. When talking about people relationships, how could it possible to understand at which extent one trust another? Moreover, it was defined that there is no such phenomenon as complete trust, which was expressed in a famous model “A trust B in terms of X”, what basically means that one can trust a person in one sphere and be no willing to give trust in some other (Sztompka, 1999). That is why trust always connected to some particular kind of interactions. Speaking of food it could be suggested that one can trust food in terms of its safety, nutrition quality, etc. (Kj?rnes, et.al, 2007). In these terms trust in organic food could be regarded as more complicated, because it combines a range of important for consumer qualities. Thus, it could be understood as consumer's confidence that the product he purchases will fulfil his expectation about it. More general it is a consumer trust in the truly organic origin of a product.
Turning to the question of trust measurement it is necessary to mention that pretty many attempts have been made to develop the algorithms of trust measurement but no appropriate and accurate indicators found. One can, for example, estimate the level of trust in society by posing the question: “Can you trust most of people?” (Veselov, 2011). However, the answer to this question does not depict the real situation regarding the level of trust among people (Ibid.). The question of trust measuring turns out to become even more complicated regarding the problem of trust in food. How can one measure if a consumer trusts the food he purchases or not when the very process of buying already presupposes some level of trust? Without some level of trust, the act of purchasing could be hardly done at all. Nevertheless, a group of researchers (Kj?rnes, et.al, 2007) have made an attempt to measure trust in food based on 5 key food issues, which are nutrition, quality, safety, ethics and value for money. The same methodology was applied by a group of Russian scientists who investigated trust in food with an example of beef (Ganskau et al. 2004).
These issues could be reasonably applied when analysing trust in organic food as long as according to different studies (Kolchevnikova, 2013; Rehder & Le, 2014; Kriwy & Mecking, 2011; Mercati, 2016; Buder et.al, 2010; Vega-Zamora M., et.al. 2013; Bruschi et al. 2015; Hemmerling, 2014; Hoffmann & Eisinger-Watzl, 2015; http://gain.fas.usda.gov, http://www.agr.gc.ca) these exact characteristics tend to be the most important for consumers when deciding to follow organic diet. Nutrition is connected with the belief that organic food contains more nutrients in comparison to its conventional counterparts. Quality refers to the statement that organic food is known as better controlled and produced in a way that makes product possess better sensorial characteristics, such as taste, smell, etc. Safety based on the idea that organic food is produced in a way that it does not contain any harmful elements which can have a bad influence on consumer's health. Ethics is connected to the notion of environmentally and animal-friendly techniques of productions applied when doing it organically. And, finally, value for money measures consumer's willingness to pay the additional price for organic food which is known to be usually more expensive in comparison to conventional food. What is more organic food is believed to be more beneficial for consumers and benefit could be considered as an additional measurement of trust. Consequently, by estimating the level of consumer's agreement or disagreement with these statements it is possible to estimate the level of their trust in organic food as long as it demonstrates their confidence in their expectations will be fulfilled.
Nevertheless, this list could be also complimented by one more criterion which is the time. Some authors state that trust is much influenced by the time an actor is familiar with one whom he trusts. Thus, Sztompka (1992, 72) writes that “the better and longer we are acquainted with somebody <…> the greater our readiness to trust”. V. Buskens (2002, 13) supports his argumentation and states that the continuity of relations is an indicator of trust. It is connected with the statement that “the more people know about the other actors, the longer they interact with the same partner, the more likely they are to establish trustworthy relations” (Khodyakov, 2007, 122). In the case of organic food consumption, it could be suggested that the longer person purchases the products of this kind the more trust he gives to these items. In this regard, time could be considered as one more measurement of consumer trust in organic food due to the fact that the longer one purchase organic food the more confident he becomes.
Trust on the organic food market: institutional and network approaches
In the previous sections, the general understanding of trust and the structure of trust relations were considered. Moreover, the definition and the ways of trust in organic food on the basis of general interpretation of trust in food were defined. However, the object of our research is the market for organic food and that is why it is necessary to look at how trust is formatted under the conditions of market interactions and how it could be applied to the problems of organic food market. It goes without saying that under the conditions of uncertainty which accompany any market transactions there is a strong need in possible risks calculations. Once the problem of choice becomes the core element of interaction, the rules and mechanisms of trusting have to be worked out (Veselov et. al, 2016, 79). It is a common knowledge that markets in the real world are not perfect, as was claimed by neoclassical economic theory and there is no such notion as perfect information (Furlong, 1996). The information among market actors is distributed unequally and that is why modern markets are abundant on possibilities for dishonest behavior. However, it is hardly possible for any market to exist without a certain level of trust among its actors. In this case, trust moves to the forefront as the possible way of solving the information asymmetry problem. However, the way trust is formatted on markets depends on how market is understood. In this regards, different sociological approaches to market analysis were developed and presented by representatives, mostly, of economic sociology. It seems possible to apply these approaches to the organic food market.
First of all, it is necessary to say that as N. Luhmann (1988, 98) writes: “trust is only required if a bad outcome would make you regret your action”. Under these circumstances the crucial problem which arises on the food market and especially on the organic food market, where goods are usually given more value in comparison with conventional food, is the lack of sufficient information concerning all relevant aspects of the situation, which include the process of production, processing, delivering and selling a product. And “this requires the individual, at the very minimum, to engage in various processes of information acquisition and integration” (Earle and Cvetkovich, 1995, 28). Other authors (U. Kj?rnes, 2007) also highlight the importance of information and communication regarding food issues. “Food consumption involves a much greater variety of aspects in our dealings with food as individuals and households, not only from acquisition through cooking to eating and clearing the way but also in exchange of information and knowledge” (Ibid. 26). Thus, before buying different food items a consumer should possess at least some information about what he is going to purchase. Speaking about organic food it turns out that a consumer could never know if a product is really organic or not unless he is told so. That is why the way market is organized influences where and how consumers can receive this information.
To begin with, it is necessary to say that for a long time new institutional approach based on the new institutional economic theory was one of the most influential in market studies. The core idea of this theory is that market relations do not come down only to direct interactions but also include some supra-individual constructions, which go with any market transaction (Radaev, 2008). Specifically, these constructions are in the focus of attention for the adherents of neo-institutionalism, for whom market appears as a complex of various institutions (Ibid.). It appears that market is not an institution-free beginning (Hodgson, 1998, 182). In its initial understanding institutions are construed as the rules of behavior in everyday life and the ways of their maintaining, or as D. North describes them “institutions are the rules of the game in a society; more formally, they are the humanly devised constraints that shape human interaction” (North, 1990, 5). The rules themselves are understood as regulatory principles backed by legal or social norms, which either allow some type of market exchange as possible and preferable or forbid it as undesirable (Radaev, 2008). In this way, institutes save costs for searching an option needed, propose ready schemes of actions, allow to make a choice and predict actions of other actors (Ibid.). In the light of this approach market is an institution itself due to the fact that it involves social norms, customs, instituted exchange relations, and information networks (Hodgson, 1998).
Notably, this approach, in comparison to neoclassical theory, makes an assumption of incomplete and asymmetric distribution of information impeding a commitment of various deals (Radaev, 2008). The common problem in this concept is the one of uncertainty, which arises as a result of that very information incompleteness and its asymmetric distribution. To put it in simple words, actors in a situation of market interactions do not rush to provide counterparties with all available information. Usually, people do not see the point to permanently and intentionally deceive others, but at the same time, they often tend to ration carefully and precisely the amount of information which they give to them. There is no need to cheat; it's enough to give information in a way that is profitable for a speaker and to set accents correctly (Veselov, 2011, 51).
This phenomenon is commonly understood as opportunism and describes a situation when actors in market interactions tend to use information which is not known by others for their own purposes (Ibid.). This is the crucial factor when taking into account the problem of trust as long trust becomes the only way to solve this problem of uncertainty and make interactions happen. According to new institutional approach, institutions tend to provide necessary information for individuals and thereby enable individuals to act (Hodgson, 1998). Institutional arrangements consider being a mechanism of filling the information gap between actors on the market. Moreover, it is argued that institutional arrangements make it too costly to be engaged in malfeasance (Veselov et.al, 2016). However, there is an opinion that in this case trust is not required for market functioning due to the fact that institutions themselves functionally substitute trust relations; there is no need for trust because institutes almost fully reduce uncertainty (Ibid.).
Thus, some authors provide examples of institutions which appeared on different markets to solve the problem of information inequality. More general illustration of this phenomenon was proposed by John Keynes (1978) who writes that even if trust is necessary in the economic world, it is trust of economic actors toward government and not to each other. Coleman (1990) goes along with his argumentations and emphasizes that, for example, in the process of money exchange between the actors, while money is one of the basic instruments on the market, there is also a government who legitimize money as a payment means. One could hardly argue that government is not an institution in this case, who set the rules for money transferring. However, the most famous example is the one from G. Akerlof (1970), who states that 4 basic institutions arose to counteract the effects of quality uncertainty on the market, which are guarantees, brand-name, chains and licensing. Each of them gives actors some information which allows them to decide whether to give trust and make an exchange or refrain from it.
A number of studies were conducted to prove the importance of institutions in the reduction of information asymmetry and trust formation in food and in organic food in particular. Thus U. Kj?rnes, et.al (2007) who also underlines the importance of institutional arrangements when having problems of food safety and quality; they specifically emphasize the role of public authorities, politicians, and experts in this regard. Supporting this view, Lassoued and Hobbs (2014) determine food systems (i.e. government and media) and brands as the major institutions which consumers rely on in the food market in the situation of food quality uncertainty, with special attention to the role of certification and labeling concerning environmentally friendly food items. Some studies (Anisimova, 2014; Temperini et. al, 2017) also highlight that brand communication could enhance consumer trust in organic food, while other researchers (Mueller & Gaus, 2015) underline the role of media as an influential factor concerning consumer trust in organic. At the same time, a number of studies (Petljak, 2012; Janssen & Hamm, 2011; Janssen & Hamm, 2010; Rong-Da, 2016) revealed that labeling systems and logos are major instruments of consumer's protection from fraud on the market.
Nevertheless, in this case, it is assumed that there should be some degree of trust because institutional arrangements alone cannot keep down fraud and force (Akerlof, 1970; Arrow, 1969), moreover institutions do not always provide all the necessary information for a consumer to be totally confident in a specific product characteristics (Daugbjerg et. al, 2014). The brightest example of such insecurity is the cases of mislabeling (Giannakas, 2002, Mьeller & Gaus, 2015, Zanoli, 2004) or production rules violations by big and famous companies (http://www.dp.ru/a/2016/02/24/Pishha_dlja_ubitkov). As a result, institutions provide necessary but not sufficient reason for granting trust in market relations. And it is exactly the time where network approach moves to the forefront.
Network approach sees markets not as a complex of various institutions, what Granovetter (1992) calls “undersocialized” concept, but rather as a plexus of social networks when the latter are understood as a set of stable relations between market actors (Radaev, 2008). However, it doesn't deny the existence of institutions on the market but networks turn to be the key element, defining the market structure. M. Granovetter is known to be the progenitor of this approach, as well as his teacher H. White. Nevertheless, such scientist as R.Burt, W. Baker, and others also contributed significantly to the development of the theory. Along with such authors as G. Krippner (2001) and J. Lie (1992) M. Granovetter (1992) formulates the main assumption of the approach which is as follows: market actors, being engaged in a voluntary market exchanges, are more likely to establish relations with those with whom they have already dealt earlier and ensured in their reliability (Ibid. 32). It basically means that market participant orients towards personal reciprocal trust, when ensured counterparties are prioritized for casual one (Ibid.). It shows that following this approach market do not consist of atomized independent actors, striving for their profit maximization, but rather penetrated with social networks consist of different market agents.
It is known that regarding a trust problem a special concept was developed by representatives of this approach (Granovetter, 1992). Instead of “undersocialized” and “oversocialized” understanding of trust, he proposes to understand trust in terms of “embeddedness” (Veselov et.al, 2016). He argues that under the conditions of information asymmetry, market agents seek to look for trusted sources to get information or to give recommendations about how to implement transactions (Ibid.). It means that to overcome uncertainty and reduce risks, market participants try to transform market in a network of social relations. Thus, Granovetter (1992, 61) states that personal information is much more effective than general information, firstly, because it is cheaper and, secondly, it is more detailed. Moreover, it is more significant as a sort of information to be trusted, different from one overlaid with social context (Ibid.). It is especially highlighted that social networks may also come to have more importance when institutional trust fails (Guseva and Rona-Tas, 2001; Vцlker and Flap, 2001); when people are generally distrustful of institutional regulations the only option remains is to search for much more accurate and personal forms of interactions, with fewer imbalances in power and information and more emphasis on mutual dependency (Kjжrnes, 1999). Thus, referring to the issues of trust in food, U. Kj?rnes and her co-authors (2007, 34) provide an example of local food shop, where “relationship between shopkeeper and customer are built on a range of mutual obligations based on personal knowledge, experience, and local knowledge”. However, it also can take plays when considering long-distance traditional distribution systems in the case of fish supply (Dulsrud, 2002).
It is possible to conclude that a social network of personalized economic relations carries strong expectations of trust and abstention from opportunism (Ibid.). It basically means that the lack of important information on the market is compensated by personal interaction which could be considered as trustworthy sources of necessary information. According to V. Buskens (1999, 5) “trust can emerge and can be stabilized in interdependent relations through the social context of the relationships; this social context of trustors provides them with information through which they can learn, whether a trustor is expected to be trustworthy”.
Thus, it goes without saying that consumers also get information from those people who make the same choices concerning food consumption or, in other words, other organic food consumers. It could be stated that these actions are explained by the fact that people are more likely to trust each other if they have a lot in common (Khodyakov, 2007). In our case, other organic food consumers are the more reliable source of information because they have the same interest. It is possible to say these ties fill the gap in information shortages and could be considered as the base for consumer's trust formation. However, it is necessary to make a clarification here and point that if other consumer gave a recommendation to another consumer, it is his subjective opinion (Jшsang et. al, 2006). To put it in other words “if somebody, or some institution, is known to be trusted by others - and especially “significant others”, the people whose judgment I treat seriously - I am ready to imitate trust and consider the target trustworthy without considering any other cues” (Sztompka, 1999, 73).
Generally, it might be that under the conditions of previous relationships absence, as for example, when a person commit the first act of buying organic product, the trustworthiness of potential trustee depends on two factors, which are the image of intermediaries that the trustor relies on for obtaining information about trustees (Coleman, 1990; Levi, 1998) or the trustworthiness of institutions that back up trustees (Hardin, 1996). As Khodyakov (2007) puts it the creation of trust is significantly facilitated when the trustor refers to a well-known and trustworthy intermediary about trustee. In our case intermediaries that connect consumers with organic food are other consumers and producers themselves, while institutions that support organic food production are labeling, brand name, mass media, and advertisement. However, it is not always the case that intermediaries, who were mentioned before, are well-known to a consumer. And that is why it could be named as “thin interpersonal trust”, which is formed by interacting with people whom we do not know well (Khodyakov, 2007).
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