Assessment on consumer preference and willingness to pay for finished and chilled tender beef in Southern Highland Regions of Tanzania

S W Nandonde, E E Msuya, L A Mtenga* and A Issa-Zakaria**

Department of Agricultural Economics and Agribusiness, Sokoine University of Agriculture, P.O. Box 3007, Morogoro, Tanzania.
snandonde@yahoo.com
* Department of Animal Science and Production, Sokoine University of Agriculture, P. O. Box 3014, Morogoro, Tanzania.
** Department of Food Science and Technology, Sokoine University of Agriculture, P. O Box 3006, Morogoro, Tanzania.

Abstract

There is an increasing tendency of improving quality of beef through cattle finishing and chilling of the carcases among few producers and processors respectively; however, the encouragement to expand the adoption of the practices is jeopardized by lack of adequate supportive information from consumers for quality attributes derived from such practises among other factors. The study was therefore conducted in Mbeya and Iringa regions to reveal consumer choice preference and willingness to pay for tenderness and freshness of the carcass in conjunction with other attributes including price.

On average consumer prefers and willing to pay higher for high tender beef and non-fresh (chilled) beef although no positive preferential recognition to high tender-chilled beef. Choices for tenderness-and-freshness of beef were made under the influence of gender and education level of consumers.

Key words: behavioural, chilling, conjoint-analysis, finishing, marketing

Introduction

The worldwide beef market particularly in developed countries is emphasizing on quality improving practices at various levels including beef cattle husbandry, slaughtering, carcass processing and beef retailing.  These practices are aiming at deriving important beef quality attributes and thus maximizing consumer’s satisfaction. One of the basic practices is cattle finishing whereby cattle is kept under adequate feeding regime meet some eating quality attributes of  tenderness, leanness, marbling and taste. 

Followed by appropriate cattle slaughtering, chilling facilitates attainment of potential tenderness of the carcass by allowing physiological relaxation of muscles which ease further processes such as cuttings and packing. In  countries where chilling is not common including Tanzania, the  usual reference attributes to chilling process by consumer is the freshness status of carcass whereby the chilled beef is regarded as non fresh since it has to be consumed a day or later after slaughtering (Liu and Deblitz 2007). In such case, consumer preference for chilling as a guarantee of tenderness can be observed through choice behaviour for chilled and higher tender attributes interaction.

 All production and processing chain has to be governed by proper hygienic practices. In most cases hygiene is a mandatory requirement by public rules and regulations as compare to cattle finishing and carcass chilling which are subject to producers and consumers themselves. However, consumer concerned to hygiene is still emphasized when public hygiene standards are either fulfilled or not by service providers. Presence of product traceability and the use approved product label and stamp can assists consumer to reveal the hygienic quality status of beef beyond the retailer outlet (Jabbar et al 2010). Cattle finishing and chilling of the carcass are popular practices in prominent beef production countries such as Botswana, South Africa, Namibia and Ethiopia with profound demand support from domestic consumers prior to export (Du Plessis and Hoffmann 2007, Jabbar and Admassu 2009). In Tanzania, beef export market is almost absent due to the collapse of Tanganyika Packers Limited in early 1990’s after economic liberalization among other reasons which made domestic market dominant for beef products as it was before, but the quality of beef has been deteriorated significantly due to absence of efficient mechanisms to reinforce quality beef production (MLDF 2008).

 Failure to export coupled with imports of beef and perpetual poor quality production practices was among the indication of demand for quality which then awaken the government, private companies and small scale farmers to respond by involving in quality improving initiatives such as cattle finishing, construction of modern slaughter houses with chilling facilities and emphasis on hygiene in processing and retailing of beef (Kinunda-Rutashobya 2003, URT 2006, Nandonde 2008).  Despite these initiatives being demand driven and cost involving, the reaction from final consumer for attributes of interests from such practices are not clearly known to give a way forward for further development including the need for up-scaling of practices and innovations particularly cattle finishing and carcass chilling. There is inadequate information on consumer choice preference and willingness to pay for higher tenderness and chilled along other attributes such as leanness, hygiene and price. This is one of the gaps that will be addressed by this paper in addition to consumer choice preference for chilled beef as guarantee of higher tenderness.

Materials and Methods

Location

The experiment was conducted in Iringa Region (Iringa Municipal and Mafinga town) and Mbeya Region (Mbeya City and Tunduma town), as residential area with diverse socio economic population in the Southern Highland zones where much of produces including beef are directed.

Approaches to conjoint analysis technique

Conjoint market analysis technique has for decades being adopted to reveal consumer preferences and willingness to pay as it mimic the real purchase situation by jointly consideration attributes through a series repeated choice experiment  (Lusk and Schroeder 2004; Kallas et al 2007). There are number of conjoint techniques; however choice based conjoint experiment (CE) is the most preferred due to its realistic nature of imitating real shopping behaviour compare to ranking or rating of attributes.

 Despite its usefulness in understanding consumer preferences, CE is limited by the way of preparing sample and display of the products under investigation to consumer. In areas where information technology is well advanced internet has play very vital role in interviewing consumers (Mennecke et al 2007). This may pause the difficulties in most developing countries such as Tanzania where not only that the experimental approach is relatively new decision makers but also the use of internet is costly and can’t be easily accessed thus the use of pen-and-pencil in experimental room is inevitable (Chowdhury et al 2009).

Econometric modelling of choice experiment

Choice experiment rely on Lancaster’s Theory of Value (Lancaster 1966), which proposes the comprise of commodity into separable and additive utilities as consumer do purchase a commodity as bundle of attributes; and the Random Utility Theory (Thurstone 1927) which accounts for random choice behaviour for the available alternatives. With these theoretical frame work, the probability of choosing one alternative than other is the probability that consumer get higher satisfaction with attributes embedded within the chosen alternative than the other.  The utility function that with deterministic and the stochastic of value term distributed identically and independently across alternatives and choice scenarios. The deterministic component includes the products attributes and can be expanded to accommodate characteristics of consumers and other interactions (Kallas et al 2007).  

Estimating consumer preferences and willingness to pay

There are various models useful in estimating consumer choice preferences. However, random effect model (REM) is regarded as useful standard approach when dealing with repeated choice data as it has some degree of flexibility in parameters estimation and capture more heterogeneity through combination of alternative attributes and socio-economic characteristics of subject in the systematic utility term (Hole 2008). The model assumes no variations in preferences across choice situations for the same respondent such that utility to a given attribute is captured by integration of all observed choices. This weakens the reliability of REM but it remains basic model in estimate choice preference and it can be strengthened using a randomized block design (RBD) for experimental treatment (attributes) allocation.

Experimental design

The experiment was designed according to Hensher et al (2005) whereby beef cattle production system was the source of alternative with the practical assumption that finishing and chilling affects carcass tenderness and freshness respectively (Table 1).  These assumptions facilitates easy observation choice behavioural pattern for higher tender attributes, chilled and interaction of the two with subject characteristics. RBD reduce 180 full factorial choice sets into 2 blocks each with 10 choice sets feasible to consumer in either block (Photo 3). One of the 10 choices made was at random made as binding for actual purchase in which price (cost) was deducted from Tshs 10000 stipend provided to each decision maker. Sensory evaluation taste for samples was performed prior to choice experiment to justify the CE design with its assumptions particularly to beef intrinsic attributes of tenderness and aroma.

Photo 1: Cattle in finishing routine	Photo 2: Finished beef for sale

Consumer sampling and sample size

Purposive sampling was done to target working class beef consumers in the study area obtained from private and government institutions together with self-employed entrepreneurs aiming at getting diverse socio economic representation of consumers. The random selection was done within institution to get 10 to 15 representatives with a targeted sample size of 300 consumers (Hensher et al 2005, Rose 2011).

Photo 3: CE room	Photo 4: CE session

Results and Discussion

A total of 308 consumers participated in CE whereby 30 of them participated in both CE and sensory evaluation.  CE was done once only limited to 30 participants due to budgetary and logistics constraints.  Respondents performed the exercise according to the set up requirement as the result none of the 30 observations made by each was dropped.

Socio economic characteristics of respondents

51.6% were female aged less than 35 years old (Table 2), which suggests that there was approximately equal gender presentation in the exercise.   The age difference class indicates that most of respondent were born from late 1960’s late 1970’s and are the active working class according to age working distribution scheme of the country.

All respondents had substantial education, most with degree level (Table 3). The fact that none of choice full filled choice from was rejected indicates that they were keen in listening to researchers and perform the exercise accordingly despite the exercise being new to almost all of decision makers.

Very few participants had income level below minimum government wage of Tshs 135000 and above 1000 000 per month (Table 4).  The experiment was not dominated by consumers with either extreme level of income.

Considering gender, age, education and income there was considerable combination of consumers with different socio economic background for reliable estimates.

Sensory evaluation score

On average all beef sample had higher sensory acceptance score above the average 2.5 (Table 5). Crossbred finished beef had highest score in tenderness but score for local unfinished beef was higher than the local finished beef in the same attribute (p=0.05), which might be due quality inconsistency supply of beef in butcher shops where the sample was taken with implication that the status quo beef does not necessarily indicate poor quality or neither of the alternative is superior than the other when it comes to consumer decision making as per the CE design and protocol.

Average choice preferences for tenderness and freshness

The part worth (utility) estimates for high tender attribute was higher than low and medium tender (Table 6).  Since, high tender beef level was only associated with finishing as opposed to low tenderness (non-finished) and medium (non finished or finished) this is clear indication that consumer satisfaction is attained with finished tender beef. This is in agreement with the report by Lusk and Shroeder (2004) that tenderness though an invisible attribute is a positive consumer choice criterion for beef among other attributes.

Choice preference for chilled was higher than fresh beef (Table 6), although chilling is not a common the practice for beef supplied in the existing market. This is different to other consumers who tend to be tied to their routine attributes (Liu and Deblitz 2007). But the findings are similar to that of Jabbar and Admassu (2009) suggesting an opportunity to cold room chain development for beef market with adequate support from consumers.

Average choice preference for tenderness and freshness interaction

Despite the solitary preference, both higher tender and chilled attributes had shown to have negative utility estimates (Table 7).  The higher satisfaction with chilled but less preference to chilled-tender beef might be due to a common practice by some consumers who associates freshness with muscular (beef) weight when purchasing beef as they prefer to purchase beef in late hours or a day later with expectation of having more weight of beef after physiological water content of fresh carcass has dropped drastically.  This gives a precaution in retailing of  beef  derived from both finishing and chilling when we consider the entire market but otherwise chilling might be a beneficial value  addition practice for carcasses produced from non finished local cattle which currently dominate the market.

Interactive choice preference for tenderness and freshness with socio economic factors

As opposed to average estimates for interaction of tenderness and freshness in previous subsection, the double interaction with socio economic characteristics of consumers revealed some positive preference for tenderness and chilling combination among different socio groups (Table 8). Choices made by female consumers were in favour of low tender but chilled beef while the jointly higher tendered and chilled beef were preferred by consumers with tertiary and degree level of education. The influence of gender and education in purchasing decision is similar to the finding by Reicks et al (2011).  Age and income of respondents does not have influence in consumer choice decisions with regard to tenderness and freshness attributes interaction.

Willingness to pay for tenderness and freshness

On average, consumers were willing to pay more for high tender beef than low tender beef (Table 9).  WTP for high tenderness was higher than low and medium tender beef. This implies that consumers are ready to pay more shillings for finished than non finished beef.  The positive and higher WPT for chilled beef is clear indication that it can be sold at higher prices, however other attributes like hygiene has to be well considered.

Conclusion

• Majority of consumers prefer high tendered and chilled beef. The interaction of higher tenderness and chilling preference was influenced by gender and education level of consumer. Willingness to pay is higher for high tendered beef than low and medium tendered beef similarly for chilled beef than non chilled beef which implies consumers’ acceptance to finishing and chilling practices.

Recommendation

• Consumers gave an insight to promote and develop cattle finishing and carcass chilling as positive marketing news for finishers and processers in consumer gender and education should be used as preliminary market entry for finished and chilled tender beef.

Acknowledgement

The authors wish to acknowledge the Germany Academic Exchange Service (DAAD) in collaboration with International Livestock Research Institute (ILRI) for their support.

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Received 15 November 2012; Accepted 9 December 2012; Published 4 January 2013

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