Is "co-operative" a valuable element in market communication? : an empirical study of consumer perceptions

Abstract: The dairy industry has met increasing competition in recent years. The companies must have an clear profile to possess a strong market position. Branding is important and product development and differentiation have increased. This thesis studies the question whether co-operative firms can use their business form to strengthen their profile and make their brands more attractive among consumers. The purpose is to investigate if it is suitable for co-operative firms to use the argument of being co-operative in their market communication. As case firm the Swedish-Danish Arla Foods, specifically its Swedish operations. Since the study primarily treats the subject of brand communication, the theoretical part consists of theories on branding strategies and consumer behaviour. Particularly the perception of the immaterial values among consumers is studied. During recent years the importance of brand identity has gained much attention. An empirical investigation is made through a questionnaire among 234 consumers randomly selected in Uppsala. The questionnaire was designed by a group of students in Rennes, France. The questionnaire treats spontaneous knowledge among consumers about co-operative firms and their brands as well as statements to consider concerning co-operative firms compared to non co-operatives. The latter part treats the values the consumers have concerning the firms. The study is made both in Sweden and France, which make comparisons possible. On the basis of the theoretical study three hypotheses are formulated for the Swedish study 1. The knowledge and involvement the consumers have concerning co-operative firms and their activities are low. 2. Communication of being a co-operative is not an important identity carrier for Arla. 3. The important identity carriers for the consumers concerning co-operative firms are concrete added values such as food safety, animal care, regional production and environmental consideration. The empirical studies show similar results in both countries. Consumers have more positive attitudes towards and knowledge of co-operative firms than expected. The first two hypotheses, which are tested through questions about spontaneous knowledge, prove to be false. The third hypothesis, which is built on the values and statements in the questionnaire, is verified to some degree. But the conclusions whether or not co-operative firms should use their identity as an argument in the market communication are not all obvious. Based on the theoretical study and the realities of Arla Foods, it is probably not suitable to stress the co-operative identity. Even if the results indicate rather good knowledge, it has to do with a general knowledge that has followed the history of the firm. The values in the second part of the questionnaire (quality, environmental consideration, working conditions) could be more useful, but these values are not specific for co-operatives. One conclusion from the comparison between the two countries is that local firms could have more use of their co-operative identity in their marketing. In France the local identity is more present than in Sweden. Big companies like Arla Foods should rather emphasize the values present in the Swedish culture like the values mentioned above. The co-operative identity can follow as a part of this, but have a more passive role.