Choice of a traceability strategy for U.S. seafood market enhancement: traceability as a signal of quality

Vugar Ahmadov

The paper develops a comprehensive review of the literature on the fishery traceability systems and analyzes its economic benefits to the industry players. It involves a review of various qualitative and quantitative studies on the traceability systems, functions and models outlining a detailed overview on the application of traceability systems. The work identifies that traceability is an efficient market enhancement tool enabling firms to successfully enter and sustain their place in the market. This study uses Alaskan pollock (Theragra chalcogramma) as a model product and depicts the details of a certification process for the U.S. Pollock fishery along with the application of traceability systems by an individual fish producers or processors. Further, it develops an economic analysis of value chain for this fishery in the United States and throws lights on future market trends for it, which may be transferable to other fisheries. Furthermore, this research proposes a theory for a traceability system and shows how it is a strategically important tool for U.S. Pollock producers to successfully promote their product forward in the value chain and finished products from pollock to consumers. This proposed theory involves the development of two game theory approaches to analyze and interpret the commercial interaction of producer and consumer in an asymmetric market versus a symmetric market environment. In the first approach the producer of a fish product knows the actual quality of the product but the actual of the product is unknown to the consumer. Therefore, this puts the producer in the position to make falsely high quality product claims and at the same time permit the use of low quality production practices. In the asymmetric market situation, analytical strategies of the players depend upon the payoffs in one stage, infinite and infinite periods. However, the second symmetric market model incorporates traceability as a tool to help the purchaser or consumer to evaluate the actual quality of the product and transform the experience and credence attributes of product into search attributes. In addition, the second model affords different strategies for players depending upon their payoffs in the symmetric market. Finally, the thesis supports the theory that if a traceability system is strategically chosen, it will enable the firm to maintain a good long run relationship with consumers and remain successful in the market place.

Choice of a traceability strategy for U.S. seafood market enhancement: traceability as a signal of quality

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