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1. Assessing the consumer preference for organic rice and also the factors that
influence to the consumer preference for organic rice. 2.
Examines the characteristics of organic rice which affect toward that’s price. 3.
Examine differences in the structure of the hedonic price function between the consumers of center of organic rice production and the consumer of marketing
area. 4.
Describe consumer demand for organic rice and examine the factors that affect toward the demand for organic rice.
5. Examine differences in the structure of function demand between the consumer
of organic rice production centers and the consumer of marketing area.
C. Literature Review
1. The concept of quality of goods
Product quality is fundamentally expressed as the improved properties compared with normal or standard products. There is general agreement that the
quality has objective and subjective dimension. Objective quality refers to the physical characteristics of the product and in particular the approval of experts,
while the subjective quality is a perceived quality by consumers Gunert, 2005. Products have a number of characteristics that serve as indicators that
represent the quality that is perceived by consumers. Products formed in the intrinsic characteristics and extrinsic Characteristics. Batt, 2007. Based on the
degree of information symmetry between the seller and customer, products can be grouped based on quality characteristics. Nelson 1970 introduced the concept of
search and experience attribute, while Darby and Karni 1970 added the concept of credential attribute. Other quality dimension is Potemkin attribute Acheilleas
and Anastasios, 2008. Sanzo et al., 2003 divides the characteristics of agricultural products based on benefits to consumers, they are i the functional
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benefit indicate the products ability to meet basic needs, ii the sensory benefit feeling positive experiences resulting from sensory such as texture, flavor, aroma,
color, sharpness, etc, and iii symbolic benefit associated with improved self- image and self-esteem and a manifestation of the life style.
2. Relationship quality goods at a price
Agarwal and Teas 2001 developed a functional relationship between prices and value that consumer perceived by stating that the price has a function as
a hint of quality and monetary sacrifice. Price is seen as a consequence of the quality, because of the high quality products generally have higher production costs
and a tight competition will designate the high prices products but have a low quality. Higher quality goods will reduce usability risks that increase the value that
consumer perceived, which in turn increases the amount of consumption. However, just as the economics literature, price is a monetary sacrifice for
consumers. The monetary sacrifice along with the sacrifice of time that consumer spent to perform the selection of products will increase financial risk for
consumers, which in turn lowers the value that consumer perceived. According to Agarwal and Teas 2001, the perceived quality will reduce financial risks. Thus
the effect of price on value that consumer perceived is the end result of the effect of price on quality and sacrifice that consumer perceived.
3. Milled rice quality standards in Indonesia
Grain quality is multidimensional, including the physical characteristics that affect to the appearance and chemical characteristics that affect to the quality
of the cooking. Grain quality is determined by the variety, the conditions of production and harvesting, post harvest handling techniques, milling and
marketing. Quality rice has a general requirement the pest and disease free, free of moldy odor and other odor, free of bran, and are free of the harmful chemicals.
