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Title: IMPACT OF QUALITY ATTRIBUTES ON HEDONIC PRICING OF CHICKEN MEAT
Authors: Shahida Parveen, Waseem Ahmad, Burhan Ahmad, Sarfaraz Hassan
Journal: International Journal of Business and Management Sciences (IJBMS)
Publisher: BIGBIO Researchers and Publishers
Country: Pakistan
Year: 2023
Volume: 4
Issue: 3
Language: English
Keywords: Quality attributeschicken meathedonic pricesretail market.
Product pricing is vital for businesses and marketing managers as it affects consumer buying behavior and business performance. In a highly competitive market, it is essential to observe the factors that increase the profitability of a product. The available studies concentrated on estimating the shared aspects from the sellers' perspective instead of the end user. To fill the gap this study investigates the impact of different meat quality attributes on retail chicken prices from consumers' perspectives when they buy fresh chicken meat. The data was collected from household consumers of four major cities of Pakistan, i.e. Karachi, Lahore, Faisalabad, and Islamabad, using a well designed and pre-tested structured questionnaire. The present study applies revealed preference theory and estimates log-linear functional form to study the effects of fresh chicken meat attributes on its price. The findings shows that meat quality attributes such as place of purchase, hygiene, meat cuts (drumstick,chest piece, boneless and whole chicken), texture, juiciness, and organic(desi) chicken positively impact the price of fresh chicken meat. The results indicate that consumers are paying premium price for these quality attributes of chicken meat. The implications of the results have been discussed in the perspective of developing the business strategies for the chicken industry in Pakistan. Understanding product attributes communicate the consumer`s preference, which is valuable for producers in developing production strategies, cost management strategies, investment decisions, marketing programs, and policy making regarding the development of the poultry industry.
To investigate the impact of different meat quality attributes on retail chicken prices from consumers' perspectives in Pakistan.
The study applies revealed preference theory and estimates a log-linear functional form using a structured questionnaire administered to household consumers in four major cities of Pakistan (Karachi, Lahore, Faisalabad, and Islamabad). The hedonic pricing model is used, with the price of chicken meat as the dependent variable and various quality attributes as independent variables. Diagnostic tests such as Ramsey Reset Test, VIF test, and Breusch-Pagan test were conducted to ensure model validity.
graph TD
A["Data Collection via Questionnaire"] --> B["Apply Revealed Preference Theory"];
B --> C["Estimate Log-linear Hedonic Model"];
C --> D["Perform Diagnostic Tests"];
D --> E["Analyze Results"];
E --> F["Draw Conclusions and Implications"];
The findings suggest that consumers in Pakistan value specific quality attributes when purchasing chicken meat and are willing to pay more for them. This information is crucial for businesses to develop effective strategies, tailor products, and manage costs. The study highlights the importance of understanding consumer preferences in a competitive market.
Meat quality attributes such as place of purchase, hygiene, meat cuts (drumstick, chest piece, boneless, whole chicken), texture, juiciness, and organic (desi) chicken positively impact the price of fresh chicken meat. Consumers are willing to pay a premium for these attributes. Weight of the chicken had a negative impact on price.
Several quality attributes significantly influence the retail price of chicken meat in Pakistan. Consumers are willing to pay a premium for attributes like hygienic conditions, specific meat cuts, texture, juiciness, and organic chicken. These insights are valuable for retailers, policymakers, and poultry firms to enhance business strategies and develop a profitable chicken meat retail market.
1. The study collected data from 768 chicken meat consumers.
2. The R-squared value of the model is 0.3647, indicating that 36.47% of the variation in chicken price is explained by the independent variables.
3. Consumers are willing to pay a premium of 22.36 rupees for hygienic conditions at the place of purchase.
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