Econometric analysis of consumers’ preference heterogeneity for yoghurt and ice cream products in Tanzania: A latent class model and mixed logit mode
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Date
2024-11-22
Journal Title
Journal ISSN
Volume Title
Publisher
Heliyon
Abstract
In Tanzania, a growing upper and middle classes, particularly among urbanites, exhibit distinct
preferences for higher-quality processed foods, including dairy products. This study examines
variations in consumer preferences and their willingness to pay for yogurt and ice cream, which
serve as stand-ins for processed milk products. The analysis is based on a discrete choice
experiment involving 400 participants in Dar es Salaam. A random parameter logit model was
utilized to account for preference heterogeneity, while latent class models (LCMs) were applied to
uncover the underlying factors driving these differences in preferences. Our findings reveal three
distinct consumer classes: processed milk sceptics (who prefer unprocessed dairy products),
processed milk advocates (who prefer processed products), and neutral consumers (indifferent
between processed and unprocessed milk). Preferences are influenced by product attributes, so
cioeconomic characteristics, and attitudes towards processed foods. The results indicate that
Tanzanian consumers place the greatest value on sensory attributes, packaging, and the product’s
origin (local versus imported). This research offers fresh perspectives on the intricate preferences
of dairy consumers in Tanzania, a topic that has been relatively underexplored. The findings
suggest that producers and marketers must adapt to the dynamic market by balancing intrinsic
and extrinsic factors against price. Understanding consumers’ socioeconomic and product attri
butes is essential for increasing market share and effectively segmenting markets. These findings
would be useful incorporated into strategic planning to enhance the competitiveness and sus
tainability of Tanzania’s dairy industry.
Description
Journal article
Keywords
Consumer preference, Heterogeneity, Yoghurt, Ice cream, Attributes, Mixed logit, Latent class model, Utility, Willingness to pay