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Land and Environment : Agribusiness Assoc. of Australia

Agribusiness Review - Vol. 8 - 2000

Paper 4
ISSN 1442-6951

Quality, Uncertainty and Consumer Valuation of Fruits & Vegetables

Kate Owen, Vic Wright, Garry Griffith
Kate Owen is a Research Fellow at the University of Sydney,
Vic Wright is an Associate Professor with the School of Marketing and Management at the University of New England,
and Garry Griffith is a Principal Research Scientist with NSW Agriculture in Armidale.
Our thanks also for comments provided by Professor Bill Schroder at Monash University.

August 3rd, 2000

Brands and quality consistency
Price: quality perceptions
The interaction of price and risk
Discussion and Conclusion


This paper reports on the results of three studies into consumers' perceptions of the quality of fresh fruits and vegetables, the links with "value", and its effect on purchase behaviour. The discussion centres on the premises that underpin differentiation strategies, such as branding and price: quality associations, and the necessary conditions for consumers to respond to these. The findings suggest that producers and marketers in the horticultural industry need to view their product through the same holistic lens as the consumer, to find the synthesis of its attributes rather than to treat them in isolation, which appears to have been the case.


Historically, producers in the horticultural industry have viewed themselves as little more than commodity producers and, following from this, their emphasis has been on price competition and reducing production and marketing costs. However, increasingly tight profit margins in the production sector are shifting this focus to one where producers are seeking avenues for differentiation. The strong push by government and industry for export development in horticultural products has also contributed to producers' awareness of the possible benefits from closer attention to quality control and marketing strategies.

In the domestic market producers' attempts to differentiate are most evident in the sticky labels that are used as a form of branding. At a more sophisticated level, efforts are being made through product development to differentiate on quality attributes, for example, the recently introduced vine ripened tomatoes that are priced as a superior quality tomato (in terms of taste and appearance). Finally, attempts have also been made to develop improved or innovative packaging as a way of differentiating product and maintaining product quality to the consumer.

At first glance, the attempts by horticultural producers to appeal to consumer choice strategies such as reliance on brands and price: quality associations would appear appropriate for fruits and vegetables. The products fall into the frequently purchased, mundane category where consumers generally seek to minimise effort and uncertainty ( Hoyer and Brown 1990, Hoyer 1984 ). Further, the quality of many fruits and vegetables can be difficult to assess at purchase which can result in uncertainty about the performance of the product. Attributes such as the flouriness of apples, or the sweetness of oranges or aubergine can only be assessed through consumption. Plums and potatoes are similarly difficult to assess. Thus, strategies that facilitate reliable choice can alleviate the consumer's uncertainty and reduce the effort required to make a choice.

However, the strategies producers have employed have met with mixed success, with quality remaining a key source of dissatisfaction and concern, particularly for fruits (Kime 1997, Robertson 1996 , Godfrey 1996, Duggan 1996 , Milgate 1996 , Yuen et al. (1994) , HRDC 1990 ), and stickers being more a source of irritation than a useful indicator of the quality of the product ( McKinnon 1994 , Milgate 1996 ). Further, while consumers have indicated that quality takes precedence over price, the premiums they are willing to pay for quality appear limited ( Robertson 1996 ).

Nevertheless, evidence from the Netherlands ( Nijssen and Van Trijp 1998 ) suggests that it is possible to build strong brands for fresh fruits and vegetables, and that these can provide suppliers with higher financial returns. This paper reports on three studies that examined the issues of price, quality and risk in purchasing fruits and vegetables. We draw on these and other research to explain why strategies based on brands and price: quality associations do not always provide the results producers expect.

Brands and quality consistency

The benefit to consumers of employing a brand strategy is that a brand provides the consumer with a set of known product attributes, at a known quality level, and generally within a known price range relative to similar products. In other words, a brand is a mélange of hedonic, instrumental and price preferences that represent value to the consumer and that are reasonably consistent over time (Zeithaml 1988) . It is this consistency that enables consumers to minimise cognitive effort and perceived risk, and is particularly important in relation to quality. Following initial experimentation to identify a preferred brand(s), consumers perceive they can expect the same quality experience on consecutive purchases; that quality is something that is within the control of the producer.

From the evidence of past research, consumers do not perceive this to be the case for most fruits and vegetables ( Robertson 1996 , McKinnon 1994 , Yuen et al 1994 , HRDC 1990 ). The 1990 study by the HRDC found 54 per cent of consumers had been disappointed with the quality of fruits they had purchased. Similarly, Yuen et al. (1994) reported only 37 per cent of consumers interviewed in Perth thought the quality of apples was good; most considered them average to bad quality. Milgate (1996) reported results from focus discussion groups that indicated consumer dissatisfaction both with the quality consistency of pineapples and in their ability to evaluate pineapple quality at point of purchase. Thus, quality matters to consumers and achieving it is seen as problematic.

In the first of the studies reported in this paper we examine the implications for branding of consumers' perceptions of these quality attributes. The study from which these results are drawn investigated consumers' perceptions of a wide variety of fruits and vegetables and was part of broader research into the factors that influence consumers' sensitivity to price (Owen 1997) . In the context of this paper, the aspect of interest is how the presence/absence of quality consistency and quality determinacy at point-of-purchase may influence consumers' use of brand strategies when purchasing fruits and vegetables.

The data for the study were collected from 175 consumers shopping at a major green grocer in Armidale, a northern NSW country city with shopping facilities and product scope comparable to suburban metropolitan areas. The consumers were randomly chosen as they completed their shopping and asked to give their perceptions of the quality of several of their purchases. In relation to quality consistency, consumers were asked whether they thought the quality of a purchased product was ‘pretty consistent year-round', ‘often varies from week to week' or ‘only varies with seasons. It is pretty consistent when in season'. To determine their confidence in evaluating quality they were asked: ‘how confident are you that, when you come to use this item, its quality will be what you expected?'. Three categories were provided to indicate confidence, ‘very', ‘reasonably' and ‘not very'. The latter two were subsequently combined because their use was specific to the respondent, rather than the product. No attempt was made in this study to identify whether consumers' responses were associated with this particular shopping location. However, of the 175 consumers, 82 per cent normally shopped at the location.

Figure 1: Graph of results for questions on vegetables
Figure 1

Figure 2: Graph of results for questions on fruit
Figure 2

Figure 1 and Figure 2 graph the results for these questions for vegetables and fruits respectively. The axes represent the level of agreement among respondents with the statements ‘very confident' in evaluating quality (the vertical axis) and quality is ‘pretty consistent year-round' (the horizontal axis). Thus, in the case of mushrooms in Figure 1, 64 per cent of respondents perceived quality to be consistent and 87 per cent were confident of being able to evaluate quality. The converse was true for tomatoes, indicating that the general perception is that tomato quality is inconsistent and respondents find it difficult to evaluate at purchase.

The most striking feature of the graphs is the distribution of products over the quadrants. Vegetables are clustered in the top right quadrant while most fruits are in the bottom left, indicating respondents were far less confident in being able to assess the quality of fruits and perceived greater variation in their quality. With the exception of grapes and rockmelon, which varied weekly, most of the variation in quality for fruits was perceived by consumers to be seasonal. However, respondents were limited to one response and so weekly variation may be underestimated. A prevalence of both forms of variation is supported by the studies commissioned by the HRDC, and referenced earlier. Vegetables were more evenly distributed across seasonal and weekly variation in quality, although tomato and bean variation was mostly weekly.

From the perspective of branding or labelling, the quadrant where consumers are most likely to gain benefits from branding or labelling is the lower right, where quality is difficult to evaluate but the product is considered quality consistent. It is possible that many fruits would fall into this quadrant within season. However, where quality remains variable, or the purchases are at the fringe of seasons, consumers are unlikely to rely upon branding to reduce uncertainty. In short, any fruit or vegetable under the horizontal axis is a potential candidate for branding if quality consistency can be achieved. For products above the horizontal axis, labelling is likely to be irrelevant to choice unless the product has a unique attribute that is valued and that is not readily apparent (eg flavour, texture, cooking quality).

Price: quality perceptions

Where branding is not employed to differentiate products or is not perceived as informative, and there are no reliable alternative cues such as location, consumers will often evoke a price-perceived: quality schema (Dodds et al. 1991 ). Price-perceived: quality schema tend to be evoked only when there are clear price differentials, perceived heterogeneity across products, and a high perceived (performance) risk associated with the purchase ( Monroe 1973 , Peterson and Wilson 1985 , Petrushius and Monroe 1987 ). However, there is also evidence to indicate that some consumers hold general price-quality schematics across all products, while others are aschematic or product-specific (Lichtenstein and Burton 1989) .

A distinctive feature of fruits and vegetables trading and retailing in Australia is quality grading. As such, the use of price: quality heuristics would seem a reasonable strategy for consumers to employ when purchasing products where the quality is not easily assessed. Although there is some indirect evidence of perceived price: quality associations for fruits such as stonefruit in Australia (McKinnon 1994) , there has been no formal examination of the prevalence of consumers' use of price: quality heuristics.

To establish whether consumers do hold price-quality schemas in relation to fruits and vegetables, a survey was conducted of 92 mature-aged students who were studying externally at the University of New England in Armidale, NSW. The survey instrument listed a number of grocery and consumer items, together with selected fruits and vegetables, and respondents were asked to indicate the extent to which they agreed-disagreed with the statement ‘the price of this item is a good indicator of its quality' (Lichtenstein and Burton 1989 and Gerstner 1985) .

In Table 1 are listed the mean scores for each product. There are clear and significant differences in the price: quality relationship of different products. Those in the ‘high' category comprise mainly durable items. An exception is steak which is a consumable but which is offered to consumers in cuts that imply different quality grades. The ‘medium' category comprises higher-priced grocery items. Fruits and vegetables only appear in the ‘low' and ‘very low' categories. Particularly low price-quality perceptions are held for lettuce, potatoes and apples (despite the distinct grading on these). The group mean for these products was significantly lower than the ‘high' and ‘medium' groups, as was the ‘low' group (Bonferroni p=.05). These results point to a conclusion that, in general, consumers perceive little price: quality relationship for these fruits and vegetables.

Table 1: Perceptions of the price-quality relationship for selected products.

Quality Perception Mean Quality Perception Mean
High Medium
Camera 4.68 Instant coffee 4.03
Cars 4.66 Cheese 4.03
Shoes 4.63 Ice cream 4.01
Stereo 4.53 Suntan lotion 3.75
Wine 4.51 Cakes 3.62
Steak 4.38
Man's shirt 4.26
Low Very low
Washing powder 3.45 Lettuce 3.20
Strawberries 3.42 Apples 3.18
Paper towels 3.38 Potatoes 3.16
Toothpaste 3.36
Tomatoes 3.36
Rockmelon 3.33
Bread 3.28

A second aspect of interest was whether this was the case for all respondents. To examine the claim that some individuals impose a general price-quality schema across products, respondents' mean scores across all products were calculated to arrive at an overall rating for price-quality perception. This mean was then split into five equal percentiles to examine differences in group scores. In Table 2 the group means on a selection of fruits and vegetables for respondents with the lowest overall mean scores (bottom 20 per cent) are compared to those with the highest scores (top 20 per cent). The presence/absence of a general price: quality schema is evident for all items. 1

The difference between the two groups is more substantial than between items. Respondents who perceive little price: quality relationship do so consistently across all items. The converse is the case for respondents perceiving a high price: quality relationship. A Bonferroni test for differences between means on the five percentiles was significant for all groups, which confirms the existence of differences across individuals on the price: quality schema.

Table 2: Means for group price-quality perceptions.

Group size Wine Strawberry Rockmelon Apples Potatoes Tomatoes
Means Means Means Means Means Means
Price-quality perception
Lowest 20 3.30 2.35 2.25 2.00 2.15 2.20
Highest 15 5.31 5.27 4.87 4.87 4.47 5.10
Item mean 92 4.51 3.42 3.33 3.18 3.16 3.36

Although, the results of the survey do indicate differences across consumers in their use of price: quality schema, the overall scores for fruits and vegetables are low, which indicates that the product group does not generally evoke application of the schema. Even those consumers who are inclined to rely on price: quality associations tend to do so much less for fruits and vegetables. In many respects this is not surprising. Price and quality are frequently uncorrelated because of the confounding effect of other factors. Natural elements related to supply, such as seasons, weather and pests, influence quality and price. The consumer may be confronted with high-quality produce at low prices at one point and, at a later purchase, with relatively higher-priced produce that is of lower quality. Added to this is the practice of frequent promotion of high volume produce. Thus, not only is a price: quality schema unreliable in allaying consumers' uncertainty as to product performance, it also raises the potential for further uncertainty over the value of the product. Peterson and Wilson (1985) call this uncertainty a ‘Type 2' risk but it can be interpreted as a financial risk.

‘A Type 2 risk is that products only differ in price and not in quality. [As such], selection of the high-priced product would incur a monetary loss equal to the price difference between the high and low-priced product' (1985: 252).

The loss ensues from the presumption of a price-quality relationship where one does not exist. By implication, performance and financial risk generally occur together in a choice. For example, a consumer uncertain about the quality of a variety of oranges may turn to a higher-priced variety by invoking a price-quality heuristic. However, the internal qualities of oranges cannot be determined until they are consumed. Consequently, the consumer is faced with the further uncertainty that the higher-priced orange is not significantly better than the original variety. The performance risk remains but added to this is financial risk.

The interaction of price and risk

Whether the uncertainty is one associated with lack of familiarity with a product, performance expectations, or financial loss, it has the effect of reducing the perception of product value. Zeithaml defines perceived value as ‘the consumer's overall assessment of the utility of a product based on perceptions of what is received and what is given' (1988:14). In the consumers' words, ‘what I get for what I give' or ‘the quality I get for the price I pay' (Zeithaml 1988: 13) . Consistent with this definition of value, then, we would expect that any uncertainty attached to the outcome of a purchase would result in consumers' discounting the overall value of the product; or in other ways seeking compensation for the risk associated with the purchase.

This contention was examined within the third study undertaken in Armidale, NSW. The study comprised the collection of verbal reports from a sample of 24 consumers as they shopped for fruits and vegetables. All subjects were informed that the purpose of the research was to examine their shopping habits at their usual location. They were told they would be required to wear a small dictaphone (hung from their neck) and to think aloud as they proceeded through their purchases. Prior to commencing their shopping expedition subjects were given precise instructions for their verbalising and a brief warm-up exercise (Ericsson and Simon 1993) . During their shopping they were accompanied by the researcher who followed at a distance and noted for each product the subjects' behaviour, and whether they eventually purchased the item.

The verbal reports were analysed using a scheme based on the Bettman and Park (1979) encoding scheme, which comprises 70 individual codes representing five categories: attribute comparisons, within brand processing, use of prior knowledge, statements of plans or needs, and general statements. The current study departed from the Bettman and Park scheme by changing the focus from the processes of choices in general, to one in which the factors that influence choice of fruits and vegetables was the centre of interest. 2

A total of 62 codes were developed covering three broad categories. The first two categories were concerned with various forms of choice processes and were separated into immediate elimination of products and unelaborated acceptances (11) and choice processes that were more cognitively complex (44). The remaining category comprised general statements of choice strategy or tasks (7).

Of the 55 choice codes, 19 were concerned with quality in choice, either as a trade-off with price or need, an evaluation of quality, or simply a positive/negative reference to quality. In three of these the emphasis was on the effect on choice of uncertainty attached to the quality of a prospective purchase, and indicated that the consumer responded by employing trade-offs between quality and price, or quality and need. The difference between codes indicating unacceptable quality and uncertainty over quality was narrow but for a choice process to be coded under ‘uncertainty' there had to be a clear indication that the consumer perceived a risk associated with the quality of the product. It was not that the quality was unacceptable as in the statement: Strawberries $2.49... No... They don't look fresh, but that the subject's ability to judge the consumption outcome was uncertain.

Finally, consumer uncertainty over usage timing or encounters with unfamiliar pricing, which also influence perceptions of value, were represented in a further three choice codes. All six codes relating to uncertainty are included in the Appendix, together with four examples of other quality-based codes.

Of a total of 394 products that subjects considered for purchase, 109 were rejected (28 per cent) and of these 45 per cent because the quality was not satisfactory. Overall, explicit references to quality were made in 41 per cent of choices and the majority of these indicated careful evaluation of the product rather than an off-hand reference. For example,

And... I only buy cauliflower when it's reasonably cheap and it looks nice... and it looks nice so I'm going to get a cauliflower because everybody else loves cauliflower... some cauliflower... on special are they... yeah... that looks pretty good... I'll get one... that's a nice one.

The only problem is the fruit flies are really bad... It isn't conducive to making you want to purchase them... Yuk, that one's revolting... I might change my mind on those plums actually... They're not very nice... I think I will give them a miss... Never mind.

The incidence of choices in which the consumer expressed uncertainty in assessing quality was relatively low, only seven in total. There were also two incidences where subjects perceived a risk in purchasing because the pricing of the product was unfamiliar or unavailable, and another in which there was uncertainty over usage timing. These 10 choice processes are listed in Figure 3 and grouped according to the primary emphasis of the choice.

Figure 3 : Risk and consumer behaviour

Quality uncertainty -- assuaged by a favourable price
  • The grapes look a bit small and a bit green, but I'll try them because they're only $1.60 a kilo which is the cheapest I've seen.
  • Bananas are too green... Uhm I'll get a couple... Guess they'll ripen up... but they're very green... and they're very small... but the price is pretty good.
  • pineapples...oh yeah...bit bruised there...and the others look like they'd give you a stomach ache like you wouldn't How much are they?...oh yes...$1.49 ain't bad is it...actually I think I will get one...
  • These mangoes are a bit spotty. What do they look like?.. Probably fine enough.. I don't know whether spotty mango… I don't have an opinion about whether spotty mangoes are actually bad, so I'm no… it's really hard for me to assess $1.50 for spotty mangoes… Can you give me some advice here?……. I'll get them and I'll find out. Okay. Two, because they're $1.50 each.
  • Rockmelons... last time I had one it looked beautifully sweet and then it went horribly bitter in your mouth and you couldn't tell from the outside that that was going to happen... But these are well priced... I'll try that one... I'll give it a burl.

Quality uncertainty - no purchase or reduced purchase

  • Um... strawberries... yes... Sue and I like strawberries... sometimes it's a bit of a treat to have them at night for dessert... this week they're quite expensive at $2.80... so they are a treat... let's have a they're... they're smell...they smell nice actually... look at the bottom of the pack... no bruising... smell... dubious...I don't know... maybe not this week.
  • got corn at home... 89...oh no...that looks pretty crappy for 89 cents... that one might be all right... take a look inside and see... I'll just get one... I think one will do.

Quality uncertainty – traded-off for desire

  • bananas... last time I bought some bananas and they looked as if they were ripe but they were actually quite green... but it's one of his favourites so I'll...yes, look at those...

Price uncertainty – no purchase

  • pineapples...they don't say how much they are so I can't, won't buy a pineapple...
  • Rockmelon well.. that's priced by the kilo not the are.. not.. the melon. So I might have to check the weight on that because generally rockmelon sits and goes off in the fridge.

All 10 processes indicate that consumers either discount the value of the product or seek compensation when there is uncertainty associated with the purchase. The first seven processes illustrate consumers' trade-off between performance risk and price. In the first five favourable prices assuage concerns over the quality of products. However, in the two remaining processes subjects rejected, or reduced, their purchase in response to uncertainty over quality. In each of these cases price was at the edge of acceptability. In the first, the product was classified as a ‘treat', and price was accepted on that basis, but the quality was considered dubious. In the second example, the subject doubted the quality of the produce and limited her purchase to one item that she thought might be satisfactory.

Quality is not at issue in the final two processes in Figure 3 but they are particularly interesting because they illustrate the importance to consumers of full and consistent information on key product attributes. In the last example a change in pricing interrupts the subject's choice process and prompts her to investigate further because of the perceived risk of paying more than she is willing to pay. In fact, this consumer forgot about the rockmelon altogether. By forcing her to work harder to make a choice the retailer may well have lost a sale unnecessarily.

The potential for confusion over the use of unfamiliar pricing structures is nicely illustrated by a pricing strategy proposed by Heath et al. (1995) in North America. Their objective was to outline possible pricing strategies to attract custom for retailers who sell low-cost, habitually purchased products. They use the example of lettuce and suggest that 'advertising the price of lettuce as "40% off" might grab attention and induce price processing more than simply stating its current price of 60¢.' (1995: 96). In the Australian context such an advertisement would certainly gain attention but this attention is likely to be in the form of consternation; '40% off what'. The practice in Australia is to advertise the actual current price, and the price variability of lettuce is such that consumers would find it difficult to attach a meaningful reference point to assess the offer. Consequently, this strategy would simply add uncertainty and effort to the purchase process, both of which consumers prefer to avoid.

Discussion and Conclusion

From the preceding discussion it is evident that successful differentiation requires more than sticky labels or occasional promotion. Current consumer perceptions are that quality is not generally within the control of producers and, hence, labels or other claims hold little legitimacy with the consumer. Looking to the future, quality control is likely to become more of an issue since continued market growth will mean catering to sophisticated export markets and, in the domestic market, the expectation is that consumers will increasingly move towards remote shopping through the internet. Supermarket and greengrocer chains seek to promote an overall "quality" offering (fresh, healthy etc) and attempt to organise the marketing chain to provide this quality in a consistent manner. For them, competition is between different QA systems; less on the quality of individual products (an interesting topic of research in itself). It is the producer who wishes to differentiate their product from substitutes that faces the challenge of creating and maintaining that quality image throughout the marketing chain.

Unfortunately, less clear is whether consumers' demand for quality will translate into willingness to pay higher prices for that quality. It is important to emphasise that there are two distinct, but related, issues in the price-quality relationship. The first is consumers' use of price as an indicator of quality. The second is the price-quality trade-off, which encompasses the first as a special case but is broader in that the price-quality relationship is considered a two-way interaction ( Erickson and Johansson 1985 ). Thus, while a price considered to be unacceptable implies little or no perceived value in the offer, it does not necessarily follow that a perceived positive price-quality relationship will translate into perceived value or willingness to buy ( Monroe and Krishnan 1985 ).

This is particularly worth recalling when interpreting the implications of consumers' assertions that they would pay a higher price for quality. Where a product has readily available substitutes any attempt to differentiate on the presumption of price-quality premiums would need to have a clear understanding of the sensitivity of consumers to the price: quality differentials between the products. In other words, the key to successful product differentiation is to view the product through the same holistic lens as the consumer, to find the synthesis of its attributes rather than to identify, and act on, them in isolation.

Finally, it is also evident that there are categories of products that are unlikely candidates for branding or price-quality appeals . 3

The quality of vegetables in Quadrant 1 of Figure 1 are easily assessed at point of purchase and are generally quality consistent and, therefore, present little risk at purchase. However, it may be possible to achieve some differentiation if producers have the opportunity to bundle or piggy-back these products with others that have greater potential for differentiation, thereby creating a form of brand line.


  • Examples of codes used for the verbal reports
  • Unfamiliar pricing, or price unavailable, prompts decision not to purchase.
  • Uncertainty over preparation or timing of use. Decision to purchase because of favourable or acceptable price.
  • Neutral or acceptable price, but uncertainty over usage timing, or need, leads to decision not to purchase.
  • Concern over, or unacceptable price, overridden/traded for quality.
  • Uncertainty over quality of a product countered by favourable price.
  • Simple statement of price or neutral evaluation, but uncertainty over quality of a product results in no purchase, or reduced quantity.
  • Favourable price, quality traded for price.
  • Low price, but unacceptable quality results in no purchase.
  • Neutral or acceptable price, but quality not. Decision not to purchase.
  • Uncertainty over quality, or unacceptable quality, but quality traded for need.
  • Elimination, quality unsatisfactory


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1 - In fact, on all products the difference between the lowest and highest groups was significant at p=.000

2 - A full description of the coding scheme is available in Owen (1997).

3 - Unless they have other unique qualities such as taste or texture or cooking qualities.

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