Determinants of Willingness to Pay of Organic Products

Demand of organic products is in an increasing rate and organic market is growing internationally and in the year 2009 the volume hit $55.4 billion. Malaysia is also experiencing the blooming of demand of organic products. In fact, consumers have become more conscious about the healthy and quality products. They are willing to pay for premium price for organic products. In addition, organic market is a potential and profitable market for marketers to have a deep study on it since the demand of organic products is kept increasing. Thus, the objective of this study is to explore the determinants that motive organic consumers' willingness to pay for the organic products. A total of 479 samples were collected through self-administrative questionnaires in November 2012 from the organic consumers in Klang Valley, Malaysia. The study showed that environment consciousness, health consciousness, perceived expensiveness and labelling and certification, significantly predicted willingness to pay. Malaysian consumers consider organic products as very healthy and of environmental friendly. However, these products are perceived as rather expensive. Thus, marketing strategies for organic products should be targeted towards to those segments of consumers most appreciative of the positive attributes of organic products.