Context
Would you rather buy your carrots from a farmers’ market or a supermarket? While some consumers argue that there are pros and cons to buying from both businesses, they usually agree that fresher products are available at a farmers’ market and cheaper products are available at a supermarket. Although the argument about different food quality may have been founded, supermarkets have made tremendous efforts to provide consumers with healthier, fresher and organic produce and sometimes even buy from local farmers. In this case, why does supermarket produce seem less natural than produce from the farmers’ market? In an article published in 2021 in the Journal of Consumer Psychology, Scekic and Krishna argue that firm size might actually influence perceived naturalness of product.
Research questions
When living beings are born, they are believed at their most “natural” (as found in nature, not involving anything made or done by people) since they have not been contaminated by their environment. Extending the metaphor to firms, consumers are expected to believe that the smaller the firm, the higher their naturalness. Therefore, they ask the following research question: does firm size impact perceived naturalness of products and purchase intent?
Method
To answer this research question, Scekic and Krishna conducted 4 studies:
– In Study 1, 182 students were asked to evaluate the naturalness of a towel (that they could touch) by assessing the percentage of organic and conventionally grown cotton it contained. Participants were randomly assigned a scenario in which the firm manufacturing the towel was big or small.
– In Study 2, 287 students evaluated the naturalness of a liquid hand soap ad by telling if they believed ingredients to be artificial or natural. The authors did their best to throw participants off the scent of the study’s real purpose: information about the firm size was “buried” in a bigger description and decoy questions were included in the questionnaire. Participants were also interrogated about their beliefs concerning small/large firms and their associations with artificial/natural products.
– Study 3 consisted of an implicit association test conducted on 285 students, to determine which unconscious associations may exist between firm size and naturalness. Participants were notably asked to associate words with “natural product or small company” or “artificial product or big company” or “artificial product or small company” or “natural product or big company”. In this type of tests, congruent associations are expected to trigger faster responses than incongruent associations.
– In study 4, 249 students were asked about perceived naturalness and purchase intent of a hand cream. They were presented with an ad featuring several pieces of information about the cream, among which size firm was manipulated (no mention of number of stores VS small number of stores VS large number of stores).
Results
– The smaller the firm, the higher the perceived naturalness, which increases purchase intent. This stems from a both conscious and non-conscious belief that small firms produce more natural products (the potential effect of a “large firm = artificial products” belief was ruled out by the analysis). The stronger this conscious belief, the stronger the effect of firm size on perceived naturalness. This result holds across different types of product cues (haptic, visual).
– Firm size only has an indirect impact on purchase intention. When the firm is small, it increases perceived naturalness, which increases consumers’ purchase intents. However, firm size does not automatically increase purchase intent. Consequently, there may be competing negative effects associated with firm size that explain this situation.
Why is this article relevant for researchers?
This article is interesting because it sheds new light on perceived naturalness. Usually, research investigates the impact of product cues on perceived naturalness, while this paper analyzes the impact of firm cues on perceived naturalness. An approach by firm cues instead of product cues could be similarly applied to other areas of consumer research, for instance, when assessing perceived quality.
Moreover, these findings constitute by essence an avenue for future research. Indeed, mediation analysis in studies 2 and 4 suggest that there is an indirect effect of firm size on purchase intent through perceived naturalness. However, this indirect effect is not congruent with direct effects of firm size on purchase intent, which suggests that competing mediations may explain the overall effect of firm size on purchase intent. Future papers could investigate these other mediations (for instance through competence, know-how, product diversity, local character, customer service, environmental impact etc).
Finally, since this research is bad news for big companies that may wish to conquer the “natural” segment, the authors mention that future articles could search for ways to attenuate the “small firm = natural products” association.
Why is this article relevant for professionals?
This article is particularly relevant for “big firms” engaging in the “natural” market segment. Particularly, these past few years, smaller companies have regularly merged with bigger ones. The latter expect various benefits such as product diversification, increasing market shares or eliminating potential competition. Such strategies may not always be a success. For instance, The Body Shop was bought by L’Oréal in 2006 and sold to Natura in 2017. When it was founded by Anita Roddick, The Body Shop had a strong, innovative, quasi-activist identity and was strongly associated with naturalness. However, after 11 years under L’Oréal’s wing, The Body Shop’s performances decreased, and it was not able to compete against newcomers such as Lush. The “size effect” may explain why this iconic brand progressively lost its aura. To avoid such negative outcomes, big firms should remain discreet about acquiring small firms, in order to preserve the small firm’s positive image and identity. This is how many brands benefit from a healthy image, without consumers knowing that they are actually owned by big conglomerates.
Big firms can also work on ways to eliminate the “small business = natural products” association. Notably, McDonald’s is labelled as a huge transnational firm producing junk food, it thereby suffers from a strong association with artificial products because of its size and because of its activity. However, the company tries to have a more natural image among French consumers thanks to this ad, by giving information about the origin of its products.
This article may also help “small firms” benefit from their rightful size advantages, especially since consumers are willing to support small business, but this does not always translate into more revenue. It suggests that small firms are naturally associated with naturalness. Therefore, small firms may profit from displaying naturalness cues to reinforce this innate association. For example, in this promotional video, La Savonnerie du Midi, a French soap manufacturer, bolsters perceived naturalness by displaying related cues about “its traditional know-how since 1894” which shows that the production process was only slightly impaired, and its use of “72% pure oil”.