| Abstract: |
Being able to accurately predict the marketing effectiveness of product labels
is critical for business profitability. Do industry experts (e.g.,
domain-specific and domain-general marketers) understand and accurately
predict which messages appeal most to consumers? There is limited knowledge in
this area, specifically around two essential food attributes: health and
taste. Consumers perceive health and taste as trade-offs, which makes their
reaction to such marketing information challenging to forecast. This study is
the first to quantify the extent to which domain-general vs domain-specific
experts can accurately predict consumer responses to health and taste
information via marketing labels. We conducted three incentivized studies:
Study 1 investigated consumer preferences for simple health versus taste
labeling messages with actual consumers. Study 2 uncovered industry
domain-specific ‘industry experts’ predictions for average consumers’
willingness-to-pay (WTP) for the messages providing incentives for accuracy.
Study 3 employs domain-general ‘marketing experts’ (cross-industry) and
evaluates the role of market intelligence in improving consumer valuation
forecasts. We found that while both expert types made optimistic predictions
that marketing health-related information would effectively increase consumer
valuations, consumers did not respond to such information. Moreover, despite
exhibiting greater confidence in their predictions than domain-general experts
(63% vs 70%), domain-specific industry experts overestimated consumer
valuations by 33% relative to the average consumer WTP of $6.80 for an 8 oz.
bag of pecans. In contrast, domain-general experts overestimated consumer
valuations by only 5%, suggesting possible motivated reasoning among
industry-specific experts. Releasing market intelligence to domain-general
experts for the baseline valuation (control) improved the accuracy of the
forecast for the control, but forecasting inaccuracies for specific labeling
messages prevailed. |