1. Introduction
Some plants have important applications in medicine. Due to progress in science and technology, the recognition and use of medical plants’ benefits and medicinal drugs have been on the rise in recent years. Medicinal plants are marketed in various forms. Studying the factors that influence the choice of a certain type of medicinal plant and the selection of the best strategy to market these products can address consumers’ needs and lead to higher profits for producers.
The World Health Organization (WHO) [
1] has estimated that since 1971, around 21,000 plant species have been marketed and used in medicinal formulations. The worth of these plants reached
$60 billion in 2006 global trade [
2]. Such a trend is expected to expand considerably by the year 2050 [
3]. That is because of the increasing popularity of herbal medicine and the expanding use of herbs in a wide variety of foods for flavoring [
4]. The largest global markets for medicinal and aromatic plants (MAPs) are China, France, Germany, Italy, Japan, Spain, and the UK, with the U.S. and Japan having the highest per capita consumption of herbal medicine in the world. While there have been fluctuations in the overall market demand for MAPs, the average annual growth rate in volume has been around 10% over the last two decades in Europe and the U.S. [
5].
One of the most valuable medicinal plants with many uses is licorice. Licorice is the root of Glycyrrhizin Glabra from which a sweet flavor can be extracted. Much of the sweetness in licorice comes from glycyrrhizin with a sweet taste, 30–50 times that of sugar sweetness. The licorice plant is an herbaceous perennial legume native to southern Europe and parts of Asia such as India and Iran. The market for licorice can be segmented into pharmaceutical, herbal medicine, industrial, tobacco, and confectionary industry. The demand for licorice from the pharmaceutical and herbal medicine industry is by far, the largest [
6].
According to the US Food and Drug Administration (FDA), licorice and its derivative are affirmed and recognized as generally Safe (GRAS). Licorice is consumed in several forms: fresh and dried, licorice sticks, licorice paste, licorice extract, licorice powder, and licorice syrup and distillates. The global licorice extract market by form, type, and application was valued at
$1700.0 million in 2016 and is expected to reach
$2393.9 million by the end of the forecast period 2025, growing at a compound annual growth rate of 4.0% from 2017 to 2025 [
7].
The annual production capacity of licorice (powder, extract, and other products) in Iran was around 19,000 tons in 2020, of which around 60% was exported to other countries such as France, Germany, Netherlands, and UAE in the form of powder or extract [
8]. There are around 8000 diverse plant varieties in Iran, and around 2300 varieties of them are medicinal plants. Having suitable conditions in terms of climate and plant varieties has enabled Iran to gain an important position in the global market for producing and exporting medicinal plants.
The main problem in the medicinal plant industry is the marketing of these products, not production [
9]. Effective marketing plans for medicinal plants as well as identifying factors that influence their consumption can be useful for the development and cultivation of these products. This research aimed to investigate factors affecting the marketability and consumption of different forms of licorice, considering the increasing trend of using natural and harmless products and the special position of medicinal plants like licorice in today’s global marketplace.
Empirical research about factors affecting the consumption and marketability of medicinal plant products is scarce. One reason for this scarcity is the lack of accurate and credible data. To address this gap in the literature, we designed a questionnaire and conducted a survey of consumers of medicinal plants in the city of Mashhad in the Khorasan-Razavi province of Iran to generate primary data for the analysis in this research.
Khorasan-Razavi province is a major center of medicinal plant production in Iran, and around 30% of the total medicinal plants are produced in this province, having a comparative advantage in the production and export of medicinal and herbal plants. The annual production of medicinal plants in Khorasan-Razavi is around 33,000 tons with medicinal plants such as cumin, saffron, and licorice as some of these products.
This study investigated the factors affecting consumption forms of licorice, considering licorice production and export capabilities of the city of Mashhad. The results showed consumers’ experience, brand recognition, packaging, gender, having a particular disease, consultation index, and cultural index had significant effects on consumers’ preferences for various forms of licorice.
In the next section, we present a brief background of medical plants and licorice. The next section provides the details of the methodology and methods of estimation employed. The next sections present the results, discussions, and policy implications.
According to the WHO definition, herbal drugs contain active ingredients and plant parts or plant materials in crude or processed forms. The phrase “High Value Minor Crops” is applied to these plants. They fall into two major groups: herbs and spices, or medicinal and aromatic plants (MAPs). Perhaps nothing defines food medicine better than bitter taste, one of the most important criteria used to select medicinal plants, and a plant with a very strong bitter taste is used mainly as medicine, whereas a plant that has only a slightly bitter taste, might be used as food, or as both food and medicine [
10]. Nutritional sciences have recently witnessed an increase in the scientific literature on the use of medicinal plants for their health benefits and potential clinical uses [
11].
Medicinal plants are distributed throughout the world, but they are most abundant in tropical areas. A significant share of medicinal plant trade depends on the extensive collection from the desert [
12], and untrained collection and overexploitation are key threats to the status of important medicinal plants [
13]. Because of poverty and lack of access to modern medicine, about 65–80% of the world’s population living in developing countries depend directly on plants and foods for primary healthcare. Herbal drugs are cheap and locally available, and commonly believed to be without serious side effects [
14]. In addition, supporting small farmers to grow and market non-traditional agricultural commodities like medicinal plants and foods, has a positive impact on agricultural growth and rural development that leads to employment and poverty reduction in rural areas [
15]. Furthermore, the cultivation of medicinal plants is useful in reducing the pressures on wild plants [
16].
Currently, major pharmaceutical companies have shown renewed interest in investigating plants as origins for new drugs and for the development of standardized Phytotherapeutic agents with proven effectiveness, quality, and safety. Several factors have contributed to the growth of the Phytotherapeutic market globally. Preferences of consumers for natural therapies, increased interest in alternative medicines, concerns regarding undesirable side effects of modern medicines and the belief that herbal drugs are free from side effects, preference of consumers for preventive medicine, proof of efficacy and safety of herbal medicines, increased acceptance by the population, and finally the high cost of synthetic medicines are some of the reasons for the increased tendency toward medicinal plants [
17]. An important predictor of the intent to consume medicinal plants is attitude, and those who believe herbal medicines are cheaper and more efficient with fewer detrimental effects most likely use more herbal medicines [
18]. Pharmacological and environmental factors are among other factors in using medicinal plant products, and cultural factors are effective in the selection of specific product forms [
19].
Licorice is one of the most used herbal plants, and it was used as traditional and complementary medicine against innumerable ailments including allergies, lung diseases, skin disorders, liver toxicity, gastric ulcer, oral health problems including tooth decay, and inflammation [
20]. In ancient Greece, China, and Egypt, licorice was known to heal gastritis and ailments of the upper respiratory area. Powdered licorice root is especially used in Ayurvedic medicine. In a clinical trial, licorice demonstrated promising activity when applied topically against atopic dermatitis [
21]. Licorice has also demonstrated efficacy in treating inflammation-induced skin hyperpigmentation [
22]. The antiulcer, laxative, antidiabetic, anti-inflammatory, immunomodulatory, antitumor, and expectorant properties of licorice have all been investigated [
23,
24].
Licorice extracts have several medical uses, used in herbal and folk medications. Most licorice is used as a flavoring agent for tobacco, particularly US blend cigarettes. Licorice flavors are also used as candies or sweeteners, particularly in some European and Middle Eastern countries. Consumers in Europe primarily purchase licorice confections. In the Netherlands, licorice candy (drop) is one of the most popular forms of sweeteners. It is sold in many forms, and mixing it with mint, menthol, aniseed, or laurel is quite popular [
25]. However, herbal drugs such as licorice can have some side effects or react harmfully when used with other drugs [
26].
Licorice is consumed in several forms and the global licorice extract market by form, type, and application is expected to reach $2393.9 million by the end of 2025. The main problem in the medicinal plant industry is the marketing of these products, not production. If the marketing of medicinal plants improves, it can be expected that the production of various medicinal plant products will increase, and as a result, employment in the field of processing and production of medicinal plant products will increase. The effectiveness of a successful marketing strategy is when the increase in consumption occurs through advertising and changing consumption habits. Therefore, appropriate marketing plans for these products can be effective in the development and cultivation of medicinal plants as well as in identifying the factors affecting their consumption.
Considering the special position of medicinal plants like licorice in today’s global markets and increasing trends of using natural and harmless products, this research investigates factors affecting the marketability and consumption of different forms of licorice. Studying consumers’ behavior and identifying target markets, as the first and most important parts of an economic system, seems necessary [
27]. Based on previous studies, empirical research about factors affecting the consumption and marketability of medicinal plant products is scarce. In this research, we designed a questionnaire and conducted a survey of consumers of medicinal plants in the city of Mashhad, Iran to generate primary data for the analysis.
The contribution of the research is that it examined consumer preferences for a specific medicinal plant, that is, licorice, and factors affecting the consumer’s choice of different forms of licorice, which is lacking in previous studies. Hence, this research fills that gap in the field of medicinal plants and addresses consumers’ preferences for choosing a particular form of licorice.
3. Results
Before estimating the model, the correlation between independent variables was considered using the variance inflation factor (VIF) statistics. VIF quantifies the severity of multicollinearity between independent variables. The results of VIF are reported in
Table 3.
A rule of thumb is if VIF > 10, then multicollinearity is high. The results show there is no significant multicollinearity between independent variables.
The first step in estimating a multinomial logit model is to determine one of the groups of the dependent variable as the base group for comparing the probability of choosing other groups. Because the first group of the dependent variable, fresh and dried herbs, has the highest frequency (56%), this group was selected as the base group and the multinomial logit model (MNLM) estimated for determining factors affecting the type of licorice products chosen among Mashhad consumers with Maximum Likelihood (ML) method. The results of MNLM models are reported in
Table 4. According to the LR statistics of 138.7 and its significance at the 1% confidence level, the overall regression model is significant, furthermore, McFadden R-squared equals 0.367, which is acceptable in nonlinear models.
According to the results in
Table 4, the quality and effectiveness of the product, brand, and family experience have a positive and significant effect on the probability of choosing the syrup and essence forms of licorice in comparison to the base group. Therefore, by improving the quality and effectiveness of syrups and essence, and by creating and strengthening prestigious brands, the possibility of choosing this form of licorice would increase. Moreover, the gender of the head of the household, having a specific disease, brand, consultation index, and cultural index have positive and significant effects on the probability of choosing the distillate form of licorice. According to the results in
Table 4, having a specific disease, product quality and effectiveness, brand, packaging, and accessibility to the product have a positive and significant effect on the probability of choosing the tablet or candy form of licorice.
After the estimation of the multinomial logit model, the possibility of using this model was tested for IIA assumption in each category [
31]. This test was done according to the Hausman test and its results are reported in
Table 5. According to the results of
Table 5, the null hypothesis of IIA could not be rejected, and the use of the multinomial logit model was confirmed.
To consider the assumption of combining the groups, the WALD and LR tests were used [
31] and their results are presented in
Table 6. According to these results, the null hypothesis is rejected and therefore different groups of licorice products or different categories of dependent variables could not be combined.
5. Conclusions
In this research, the factors affecting consumers’ selection of different forms of licorice, a medicinal plant, were investigated using the multinomial logit regression approach. We designed a questionnaire and conducted a survey of consumers in the city of Mashhad, northeast of Iran, to generate the dataset for this study. Knowledge of consumers’ preferences in the selection of products and factors affecting their choices is a useful guide for manufacturers to address consumer needs, and generate profits. Producers that decide to invest in medicinal plants, could benefit from knowing consumers’ behavior and factors that affect their consumption decisions.
The results of this research showed that most consumers preferred fresh and dried forms of the medicinal plant licorice, partly due to the general belief that this form of licorice is more effective. However, in some European countries such as the Netherlands, the candy form of licorice is more popular, indicating that consumers’ behavior differs across cultures, and needs to be investigated specifically for marketing purposes.
The results showed that variables such as quality and effectiveness of the product, brand, and family experience increase the possibility of choosing the syrup and essence forms of licorice, in comparison to the fresh and dried or powder forms. If producers of medicinal products such as licorice create or strengthen a prestigious brand with improved quality and effectiveness, the possibility of selecting other forms of medicinal plants also increases in consumers. Producers must consider consumers’ cultural differences and apply appropriate marketing tools suitable in any one region or country.
Variables like gender, having a specific disease, reputable brand, and consultation and cultural indices increase the probability of choosing the distillate form of licorice in comparison to the powder form. Furthermore, having a specific disease, product quality, prestigious brand, packaging, and accessibility to the product increase the probability of choosing the tablet or candy forms of licorice in comparison to the powder form.
Hence, companies operating in the field of herbal medicinal products could try establishing prestigious brand names for their products to increase the sales of different forms of products. Providing expert advice in distribution centers and sales of herbal medicinal products with the provision of useful and informative labels are other factors that could increase the probability of marketing different forms of medicinal products, other than fresh or dried forms. Improving the quality and packaging, and better accessibility of various forms of medicinal products such as licorice could increase consumption levels of these products, moving toward a healthier society.
The results of the study show that economic factors such as price and income have little impact on the probability of choosing specific forms of licorice. For different forms of a health product like licorice, variables such as quality, culture, advertising, and effectiveness are more important than economic factors such as price or income. In summary, consumers could increase consumption of medicinal plant products by appropriate marketing tools such as branding and market segmentation. The practical application of the results of this research is that it helps the producers of medicinal plants such as licorice to better identify consumer needs and produce to meet them. The introduction of marketing science into the field of agriculture and its use in the direction of correctly identifying consumer needs and production based on these needs can create more profit for the producer while gaining consumer satisfaction and thus lead to more production, employment, and exports.