Prices of dairy products: Determinants
A price survey and expert interviews should clarify on what the market price for dairy products like yoghurt, mozzarella, butter, UHT milk and fresh milk depends and how the South Tyrolean products are positioned. The prices of over 1,200 dairy products were collected in 32 retail stores in Bolzano and Verona. For the two most wide-ranging products - yoghurt and mozzarella - separate expert interviews with the managing directors or farm managers were held. In addition to the product prices, other characteristics were collected which were assumed to be the cause of the final price, such as the brand (brand product from South Tyrol, "other brand products" and "non-brand products"), organic production, further processing, packaging size and other influencing factors such as the city (Bolzano/Verona), the distribution channel (branch system/open retail chain) and the location of the shop (central/peripheral). The price survey shows that brand type, processing, organic production and packaging size have a significant impact on price for almost all products, while other factors do not play a significant role.
products� in terms of price: According to the managing directors/operating managers, brand products have a significantly higher market share than "non-brand products". The market share of organic products, on the other hand, is still comparatively low; processed products are considerably more represented. Conclusions: Greater health awareness and the increase in the consumption of food out of home as a result of changing family structures are leading to increased demand for functional foods ("products with additional health benefits") and convenience foods ("smaller packaging sizes"). In addition to "classic" products, the consideration of these demand trends opens up new markets for dairy products with a high proportion of value added, such as processed milk and yoghurt drinks. From the results of the study the following conclusions can be drawn for the South Tyrolean dairy industry: •
The results of the price survey are confirmed by the statements of the experts from Bolzano and Verona. It is noticeable that South Tyrolean yoghurt and mozzarella products are often significantly cheaper than other brand products and cannot always be distinguished from "non-brand
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The brand is an essential price factor. Without a connection with a strong brand, regional labelling of South Tyrolean brand products has little success. In fact, not all South Tyrolean milk brand products are well positioned on the market. Organic production and further processing meet consumer demands for greater health and convenience. Organic and processed products are indeed achieving
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very high price increases. In contrast to processed products, the current market share in the organic sector is still relatively small. An excessively high price could be the reason why the possible market potential has not been fully exploited. The starting point for the high quality of South Tyrolean brand products is excellent: production without genetic engineering, milk from mountain farms, etc. However, it does not seem that the market positioning has been satisfactorily resolved yet. Cooperation in production and above all in joint marketing would be a prerequisite for achieving the necessary size and strengh on the market, for example through a joint South Tyrolean umbrella brand for dairy products.