Product and process certification – Systems, regulations and international marketing strategies

Asymmetries in information, where sellers have more information than buyers about product qualities, may prevent firms from supplying some goods and services despite the fact that consumers are willing to pay adequately for them. The frequency and importance of such market failures is growing with the increase in buyers’ interest in unobservable qualities (attributes) of products, including the nature of their production processes. Certification by credible third parties may reduce the frequency and mitigate consequences of market failures. Certification creates a variety of challenges for both marketers and regulators. In this paper, we examine the emergence of alternative domestic and international regulatory regimes for certifying some qualities of products and services. We explore the implications of these regimes and country and product characteristics to the formulation of international marketing strategies. We illustrate our findings through a case study of the forest products industry.