GMO labels create vertical differentiation for many consumers by signaling that non-GM products are better than GM products, drawing attention away from factors such as price – making it less important – and allowing firms to charge a premium for non-GM products.
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Kim, Youngju, SunAh Kim, and Neeraj Arora (2021), “GMO Labeling Policy and Consumer Choice,” Journal of Marketing, 86 (3), 21-39. doi:10.1177/00222429211064901.
Most scientists claim that genetically modified organisms (GMOs) in foods are safe for human consumption and offer societal benefits such as better nutritional content. In contrast, many consumers remain skeptical about their safety. Against this backdrop of diverging views, the authors investigate the impact of different GMO labeling policy regimes on products consumers choose. Guided by the literature on negativity bias, structural alignment theory, and message presentation, and based on findings from four experiments, authors show that consumer demand for GM foods depends on the labeling regime policymakers adopt. Both absence-focused (“non-GMO”) and presence-focused (“contains GMO”) labeling regimes reduce the market share of GM foods, with the reduction being greater in the latter case. GMO labels reduce the importance consumers place on price and enhance their willingness-to-pay for non-GM products. Results indicate that specific label design choices policymakers implement (in the form of color and style)also affect consumer responses to GM labeling. Consumer attitudes toward GMOs moderate this effect – consumers with neutral attitudes toward GMOs are influenced most significantly by the label design.
Special thanks to Holly Howe and Demi Oba, PhD candidates at Duke University.
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