Segmentation of the market for labeled ornamental plants by environmental preferences: A latent class analysis

Abstract

Labeling is a product differentiation mechanism which has increased in prevalence across many markets. This study investigated the potential for a labeling program applied in ornamental plant sales, given key ongoing issues affecting ornamental plant producers: irrigation water use and plant disease. Our research investigated how to better understand the market for plants certified as disease free and/or produced using water conservation techniques through segmenting the market by consumers' environmental preferences. Latent class analysis was conducted using choice modeling survey results and respondent scores on the New Environmental Paradigm scale. The results show that when accounting for environmental preferences, consumers can be grouped into two market segments. Relative to each other, these segments are considered: price sensitive and attribute sensitive. Our research also investigated market segments' preferences for multiple certifying authorities. The results strongly suggest that consumers of either segment do not have a preference for any particular certifying authority.