Regional & Production Appellations for Rural Development Can they help?. John M. Crespi Kansas State University. The issue is whether producers -- either in a region or using a distinctive production process -- can collectively “brand” themselves to increase profits.
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John M. Crespi
Kansas State University
What does economic theory say?
Is this a feature of credence goods?
In the case of credence characteristics, in my opinion, this claim is mostly a myth for 3 reasons.
The literature shows that the most important feature of profitable credence labeling is an accurate, understandable, and verifiable signal.
Label proliferation is as mind-numbing as too much noise.
Grocery-store chains such as Safeway Inc., Albertsons Inc. and Fred Meyer's owner, The Kroger Co., grew into national forces over the past century by marketing to the masses.
But the giants are losing their grip.
Shoppers have locked into new habits, rolling their carts into an ever wider array of food stores at either side of the retailing spectrum. At one end, they steer toward lower prices at big-box discounters: Costco Warehouse, WinCo Foods, Wal-Mart Supercenter, SuperTarget. At the other, they search out upscale and organic offerings at specialty stores, from Portland-based Zupan's Markets and New Seasons Market to national chains --Trader Joe's and Whole Foods Markets.
The Oregonian, June 12, 2005