Consumer Preferences of Nanotechnology Products

Consumer preferences for Nanotechnology products












ADITYA KR. BAJAJ
SWASTIK NIGAM


iTABLE OF CONTENTS



1. ABSTRACT/MOTIVATION ____________________________________________ 1
Supply side: ________________________________________________________________ 1
Demand side ________________________________________________________________ 1
2. INTRODUCTION TO NANOTECHNOLOGY _____________________________________ 2
History of Nanotechnology ____________________________________________________ 3
Nanotechnology ± A technical discussion _________________________________________ 4
Applications of Nanotechnology ________________________________________________ 5
Nanotechnology in the World __________________________________________________ 8
Nanotechnology in India _____________________________________________________ 10
Social and ethical implications of nanotechnology _________________________________ 11
3. METHODOLOGY ______________________________________________________ 13
Questionnaire ______________________________________________________________ 13
Choice of Nanotechnology products ____________________________________________ 13
4. RESULTS AND CONCLUSION _____________________________________________ 14
Socio-demographic characteristics of respondents _________________________________ 14
Customer perception/attitude towards Nanotechnology products ______________________ 15
Initial choice at equal prices ___________________________________________________ 19
Willingness-to-pay __________________________________________________________ 21
Conclusion ________________________________________________________________ 22
5. REFERENCES ________________________________________________________ 23
6. APPENDIX __________________________________________________________ 26
The survey questionnaire _____________________________________________________ 26



i1. ABSTRACT/MOTIVATION
Supply side: Nanotechnology is not a fuzzy technology that is far off into the future. It
has well and truly arrived on the global scene and applications of this amazing
technology are visible today around us. The clothing industry, for example, is starting to
experience the applications of nanotech. Nano particles are currently being used to create
stain-repellant khakis (Nanotechnology Now, n.d.). Nano-filters are under study for
possible application in sterilizing drinking water. Yet another application involves
liquefying coal and turning it into gas, an application which could have far reaching
effects on the imported-oil dependence of several countries. Several of these applications
will affect our day to day life; in fact, nanotech applications could possibly find their way
into our food chain. Obviously, the supply side of nanotech shows an extremely exciting
picture.
Demand side: We feel that although the supply side of nanotechnology has been studied
and explored, the demand side of the story is yet to be told. The consumers take on
nanotech, his/her perception of the technology and its applications, his/her apprehensions
(if any) about it and his/her willingness to accept products that have nanotech embedded
in some or the other form inside them, is still a gray area, and one that interests us. One
may argue on the basis of common perception that consumers may not be concerned
about the advent of nanotechnology, since it is not something like Genetic Modification
(GM) where genetic modifications or organic retrofitting takes place. However,
nanotech related food processing, food engineering and packaging are in the innovation
pipeline of the food industry (Nanotechnology targets, n.d.). Nanotech also offers the
possibility of applications in medicine, surgery etc. Hence, there are bound to be debate
1regarding this technology, especially concerns about environment, safety and especially
in India, possible religious and social reservations. This study tries to understand
nanotechnology from the Indian consume rs perspective.

2. Introduction to Nanotechnology
"The principles of physics, as far as I can see, do not speak against the possibility of
maneuvering things atom by atom." ± Richard Feynman

Nanotechnology is the broad name of a field of applied science involving the
investigation and design of materials or devices having special properties and functions at
a scale of 1 to 100 nanometers (Frequently Asked Questions, n.d.). One nanometer (nm)
-9
is one billionth, or 10 of a meter and is the unit of length most useful when describing
the size of individual molecules (Nanotechnology, n.d.). There are unique properties of
materials in this size range. Nano technologies become possible with the help of our
ability to manipulate matter with atomic precision. At this scale, new phenomena arise
and materials start behaving differently (Nano-particular, n.d.).

Multiple disciplines such as applied physics, materials science, molecular physics, supra-
molecular chemistry, biology, computer science, colloidal science, and electrical and
mechanical engineering comprise the ambit of nanotechnology. As a result, we see the
prefix nano being attacheled gato mut aof whotechnologies and products today.
Nanotechnology is expected to bring in a lot of product improvements. It is expected to
make most new products stronger, lighter, cleaner, cheaper and more accurate. It presents
2advances in all the fields mentioned above. However, nanotechnology also carries along
possible cons with its usage. Future uses of nanotechnology could cause consequences
like cheap duplication and manufacturing leading to economic disruption to as severe as
arms race between nations.

History of Nanotechnology
The scientist, Richard Feynman was the first person to suggest that fabrication of
materials and devices to atomic specifications is possible. In a talk titled ³Theres Plenty
of Room at the Bottom where he was talkitless ngspac about e availalible mifor
information storage (and other uses), he described a process by which properties of
individual atoms and molecules may be manipulated (A brief history, n.d.). He said that
the laws of physics do not limit our ability to do so; it was the lack of appropriate
methods and tools for doing so. Prof. Feynman called such an atomic scale fabrication a
³bottom-up approach, as against-down the´ a³pprotop ach that we are accustomed to. In
the traditional top-down approach, we construct parts through methods like cutting,
carving and molding, which severely limit the size of the devices we can manufacture out
of the process. Bottom-up manufacturing uses molecular components as building blocks
and these components assemble themselves chemically by principles of molecular
recognition. As it turned out, Prof. Feynman was correct in his prophesy.





3Nanotechnology ± A technical discussion
The fundamental technical nuances of nanotechnology can be absorbed in two
perspectives, a materialctis ve peand rspea molecular perspective (Nanotechnology,
n.d.).
Materials perspective (Nano-materials): A unique property of nanotechnology is the
enormous increase in ratio of surface area to volume in nanoscale materials. This opens
up possible applications in surface-based science, e.g. catalysis. As the size of a system
decreases, a number of phenomena get uncovered, e.g. statistical mechanical effects,
quantum mechanical effects, etc. Materials reduced in size to the nano level can suddenly
start displaying very different properties compared to the properties they exhibit on the
macro level. For example, opacity may be converted into transparency as in the case of
copper, inert materials (electrically neutral) become catalysts as in the case of platinum,
insulators become conductors, stable systems become volatile or combustible etc.

Molecular perspective (Molecular self-assembly): This perspective is based on the
concept of bottom-up system building approach. Pharmaceuticals, polymers etc are
chemicals produced through small molecules using synthetic chemistry. Nanotechnology
extends this ability of building useful structures by seeking ways to build supra-molecular
assemblies using single molecules. These assemblies are well-defined complexes of
molecules held together by non-covalent forces (Supramolecular assembly, n.d.). For
building these assemblies, the concept of molecular recognition is utilized wherein
molecules can be fabricated such that a specific molecular structure or conformation is
rendered stable by the existence of non-covalent bonds. The underlying theme is to create
a complex and useful system out of mutually attractive components. Such a building
4approach is expected to vastly improve both our manufacturing speed as well as bring
down manufacturing costs compared to the earlier top-down approach. This perspective
of nanotechnology finds application in the field is that of molecular biology in subjects
like base paring, enzyme-substrate interactions, etc.

Applications of Nanotechnology
There are three general classes of nanotechnology applications based on the degree of
control over the synthesis, characterization and positioning of nanomaterials (Miller,
Serrato, Represas-Cardenas, Kundahl, 2005). The term simple nanoted chnology is use
to describe applications involving mass productions of nanomaterials. These commercial
products do not involve precise fabrication or positioning of nanostructures. The second
class of nanotechnology applications involves building the use smallof . This refers to
nanomaterials to build advanced materials, devices and systems. The final class is of
building large. This category describes the unrea-reliplizcead ting expectation of self
nanorobots.

Simple Nanotechnology
This includes products which are manufactured by mass production or by the random
dispersion of nanomaterials. Products include catalysts used for the acceleration of
chemical reactions, surface coatings and in composites and textiles. These products have
physical/chemical properties which significantly affect the way the incumbent
applications brace their utility. Surface coatings can help make coatings on walls resistant
to graffiti, and also in the creation of self-cleaning windows. Through application of
coatings, these walls and windows repel matter thus providing the specific effects. Even
5sophisticatedly engineered semiconductor materials use thin film surface coatings in this
form of technology. Composites of various materials can be used to provide novel
properties to trivial products varying from tyres to utensils.

Building small Nanote chnology
This form primarily involves using nanomaterials to construct novel devices, materials,
and systems. In contrast to simple nanotechnology, building small requires the ability
to precisely fabricate and position nanostructures. On exploring the unique chemical,
electrical, mechanical and optical properties of different nanomaterials a large no. of
products in various industries can be created. The products are grouped into six major
classes: communications, energy, sensors and measurement, electronics, life sciences and
aerospace and defense (Miller et al, 2005).

Sensors and measurement: Nanostructures are being used increasingly to make better
chemical sensors. Often used in applications related to healthcare and the environment,
these devices can be used in medical monitoring, leak detection and hazardous waste
monitoring. These can also be used to improve biological detection like in Gene detection
of a DNA sample.

Electronics: Nanoelectronics are making the development of processor speed faster than
Moores law. Carbon Nanotubes provide great potential through their diode like
properties. It is also believed that these may result in revolutionizing the industry
through creation of novel devices. Spintronic devices are new devices which are can
6provide new concepts in non-volatile memory. These turn on or off in response to a
electric charge.

Communications: Nanotechnology is expected to enable better optical networks.
Photonic crystals are good semi-conductors of light and provide a new media as against
the transfer of electric current.

Energy: Nanostructured photovoltaic cells can be used to provide the next level of
development for Hydrogen cells. These can help provide clean and green energy at very
affordable rates on scaling up. Substituting nanomaterials have also been advocated for
lithium-ion batteries and thus these applications are possibly very close to
commercialization if not already marketed. Large-scale storage of solar power is believed
to be possible through use of superconductors.

Medicine: Nanotechnology is expected to spawn new drugs, drug delivery systems,
diagnostic devices, materials for tissue engineering and other devices. Nanotechnology is
also expected to provide new mechanisms of drug delivery, as well as improving the
effectiveness of the drugs, designing nanostructures which prevent digestive enzymes
from breaking down the medication. It can also be used in treatment of cancer without
having the deleterious effects of chemotherapy. Researchers are developing implantable
devices which can periodically dispense medicines such as insulin or morphine.
Nanotechnology can also find application in tissue engineering and cell therapy,
applications which face some heat due to the ethical nature of the application.

7Aerospace and Defence: A final class of products relates to strategic applications in
national weaponry arsenals. The United States has conspicuously devoted extensive
funding to various initiatives of the NASA and the Defense Department. Dramatically
scaling down the size of the probes designed to go into space as well as a futuristic
combat gear being designed by MIT are only some of the visible initiatives of these.

Building Large nanotec hnology
This is a concept that attempts to revolutionize macroscopic manufacturing capabilities.
Popularized by Eric Drexlers term molecular manufacturing, it involves the concept of
mechanosynthesis, which endeaours to have positional control over the site of chemical
reactions. These ideas are currently still at an abstract level and thus their discussion shall
not form a part of this project.

Nanotechnology in the World
A large no. of companies have been able to apply nanotechnology through internal R&D
efforts and partnerships with other companies (Miller et al, 2005). DuPont is applying
nanotechnology to textiles and nanotubes in flat panel displays. Mobil has been
experimenting with nanoporous zeolites as catalysts. Roche, the pharma major, has
actively been researching drug delivery diagnostics based on nanotechnology and
nanoparticles. Perhaps the greatest expenditures on nanotechnology are taking place in
the field of computing, communications and consumer electronics. The names include
among others IBM, Hewlett-Packard, Intel, Lucent, Infineon and Hitachi. It is worthy to
note that these are predominantly seeking to integrate nanotechnology into their existing
technology platforms, while nanotech startups are focused on developing and marketing
8nanoscale materials, devices and systems. Thus even though the former are important
players in nanotechnology, it is possible to distinguish them from the nanotechnology
industry itself.

The Organization for Economic Cooperation and Development (OECD) estimates that
over 30 countries have established nanotechnology R&D programs in recent years.
Nanoscale research nearly doubled from 1997 to 2000 in both the European Union and in
Japan (Local Regional and Global Competition: US, Europe and Japan, 2004). Europes
rate of patent filing was alarmingly low in comparison to the US and the Far East ±
notably so in the electronics sector (Nano commercialization problem in Europe, 2006)

National Nanotechnology Initiative (NNI) received a new, four-year authorization under
the Nanotechnology Research and Development Act of 2003, signed into law by
President Bush in December 2003. The Act authorizes the expenditure of nearly $4
billion for nanoscale research and development over the next four years, with
approximately 60 percent of the funds to be disbursed to academic institutions. Small
technology firms will directly benefit from the NNI as well, particularly through the
Small Business Innovation Research (SBIR) program, which diverts 2.5 percent of all
funds for competitive R&D contracts to competitions reserved solely for small
businesses. Nanotechnology commercialization in Europe is considered to be far lower
than in other parts (Local Regional and Global Competition: US, Europe and Japan,
2004) In Asia, Japan and China lead the race with the maximum nanotechnology patents.


9Nanotechnology in India
India is a relatively late starter in nanotechnology, and is still way behind China in the
field. India floated the Nano Science and Technology initiative (NSTI) in 2001.
However, the funding in India (US$ 4 million in 2002) was far below that in China (US$
200 million in 2002) (Preparing for Take-off: Indian Nanotechnology, 2006). The
problem as per CNR Rao, president of JNCASR is that of a lack of talented technical
manpower. There is a dire need to train teachers, students and research scholars in
nanotechnology for India to be a strong competitor in the field.

The Indian Government is actively promoting links between Indian research institutes
and industry. The New Millennium Indian Technology Leadership Initiative programme
of the Council of Scientific and Industrial Research is also promoting two public-private
collaborative ventures for developing nanotechnologies that target drugs to exactly where
they are needed in the human body. India has entered into bilateral nanotechnology
programs with the EU, Germany, Italy, Taiwan and the United States. India was also
slow to draw up plans for a national nanoscience programme, and its Nano Science and
Technology Initiative (NSTI) was launched just five years ago, in 2001. In April 2004,
Kalam organised a meeting of nanoscience experts to devise a national mission plan. Its
recommendations include spending US$22 million each year for the next five years on
five new national facilities specialising in complimentary areas of nanotechnology and
ten 'mini centres' across the country. Overall, the experts recommended that US$200
million be spent on nanotechnology over a five-year period.

10Few Nanotechnology firms have come up in India (Nanotech Now These are Qtech
Nanosystems, Yashnanotech, United Nanotechnologies, Nanocet and Velbionanotech.
(Nanotechnology: India, Companies and Institutions, 2007). There are a few Nano-
consultancy firms that have opened up as well. This maybe attributed to the fact that few
private firms have the actual infrastructural capability of performing nanotechnology.
However, India is rich in the intellectual capability to unravel the complications of
nanotechnology. Thus consultancies have sprouted before the manufacturing plants have
opened up, due to this reason. However, some companies have also provide
nanomaterials produced. These include Velbionanotech, which develops and provides
Nano sensors and Bionanochip products. Hyderabad-based United Nanotechnologies
provides simple nanotechnology¶ products like coatings. To a large degree most of the
nanotechnology development in India is still in the research labs of the government
institutes and laboratories. There is an imminent need for the various business houses to
take an interest in nanotech research.

Social and ethical implications of nanotechnology
While the immense possibilities that nanotechnology offers are exciting, an obvious
question that arises, as it does with any powerful new technology is whether society
should in fact go ahead with the adoption of nanotechnology? The following section
discusses some social and ethical implications of this technology which would certainly
affect consumers when they make the choice to adopt nano-tech products (Miller et al,
2005). While applications in new material applications are not expected to create any
social or ethical implications, the ³building small´ concept is expected to face some
resistance. Issues like how powerful computer processors should be made, implications
11of neuro-biochips installable inside the human body, implications in the field of genetic
engineering, etc are proving to be points of immense debate today. The use of nano-
devices in systems like microscopic sensors, etc can prove to be a big threat on individual
privacy and are also the subject of heated discussions. Many critics have labeled
nanotechnology as a path towards repression of humans. Artificial intelligence is already
in abundant use today and there are fears among people that intelligent machines will
ultimately mix with and finally replace humans. Nano-robots are another source of
concern and fear to man, where the self-replicating variety can have potential use in
weapons of mass destruction. If the opposition to nanotechnology is valid and reasonable,
further advent of the technology can be stopped in the next few years. If however,
nanotechnology takes off and becomes a major driver in economic growth for countries,
it would become unstoppable. Scary views about nanotechnology have already been
promulgated by authors like Michael Crichton, who in his latest thriller called Prey
describes a world invaded and taken over by nanorobots.













123. Methodology
Questionnaire
The questionnaire for the purpose of this project was adapted from the working paper of
Deodhar, Ganesh and Chern (2007) which deals with consumer preferences for GM
(food) technology. The questionnaire starts with a brief introduction of Nanotechnology
in order to ensure that the layman has some flavor of Nanotechnology before he/she
answers the questions. The questionnaire has five sections. The first two sections aim to
gather information of the respondents knowledge of, perception of, and attitude and
reservations (if any) towards adopting Nanotechnology. The next two sections quiz the
respondent on two very different products, one representing the application of
Nanotechnology in fabrics and the other in food additives, and seek to gauge their
willingness to pay for the nano-enabled features of these products. The last section is
concerned with obtaining socio-economic and demographic information.

Choice of Nanotechnology products
For the questionnaire, we selected applications of nanotechnology in fabrics and textiles
in the form of nano-pants (Repels & Releases, n.d.) and in foods in the form of food
additives in juices (Narrative Science, n.d.). Customer involvement of different degrees is
expected for these two products. Purchasing clothes requires customer participation but
the primary concerns are sensory. The decision of purchasing food items, on the other
hand, involves a distinct concern for safety since these products are for internal
consumption. Determining customer preferences for these products would provide
interesting inferences which could be used to draw parallels for future applications of
nanotechnology in other fields.
13In case of nano-pants, we compared customer preferences and willingness to pay for
nano-pants with ordinary non-nano pants. The nano-pants are a product currently being
marketed by a company called Nano-Tex that claims to be pioneer of such nanotech-
enabled stain-resistant cloth. The aim of this comparison is to determine the excess
amount that the consumer is willing to pay (if at all) for the stain-free property of the
pants allowed by the nanotechnology.
In case of food additives in juices, we have compared natural fruit juices available in the
market with juices having nano-additives.

4. Results and conclusion
Socio-demographic characteristics of respondents
Respondents were chosen from among the student community at IIM A and other internet
equipped respondents. As shown by the table below, all the respondents have a graduate
degree or above. We believe that this education profile is appropriate for the above
survey due to the following reasons:
- Nanotechnology products will probably invade the market in a few years and the
current set of respondents will then be the primary target segment for such products,
given that their education generates a higher probability of their being able to
understand nanotechnology and accept it.
- These respondents are likely to be opinion leaders for Nanotech products as and
when they are launched.
The respondent set is skewed with 90% of the respondents being single. However, we do
not expect the survey results to have been markedly different had there been more
14married respondents since consumer preferences for these products are independent of
marital status. Another skewness observed in the respondent set is the overwhelming
number of nuclear families. Since we expect nanotechnology products to be targeted
towards a predominantly urban audience, and with urban families in India increasingly
going nuclear, we feel that a more exhaustive respondent set would also see a nuclear-
family stronghold.
Table: Socio-demographic characteristics of the respondents
Particulars Number Percentage
1. Gender
Male 21 65.63%
Female 11 34.38%
2. Marital Status
Unmarried 29 90.63%
Married 3 9.38%
3. Education
Under Graduate 0 0.00%
Graduate 28 87.50%
Post Graduate 4 12.50%
4. Family Type
Nuclear 30 93.75%
Joint 2 6.25%
5. Age
Mean Years 24.15625 -

Customer perception/attitude towards Nanotechnology products
Respondents were quizzed on their perception of Nanotechnology as a safe technology
(for human safety), their willingness to consumer Nano-embedded products and the role
of ethical and religious concerns, if any, in their decision making process while
purchasing Nano-enabled products. 31.25% of the respondents perceive Nanotechnology
as risky for human health while just about 19% of them feel that the technology is safe.
This reflects a dominant opinion that Nanotechnology, owing probably to its nascent
15nature in the markets, has yet to be proved a sarth fenoti¶ ngtec thathnolo gy. It is wo
more than a quarter (28.13%) of the respondents are indifferent and more than one fifth
(21.88%) differ having an opinion on the subject. The second attribute observed is that
46.88% of the respondents were willing to try out Nanotechnology while 21.88% are
indifferent to doing so. Hence, 68.7% respondents are not averse to consuming
Nanotechnology products, which show that despite having a concern regarding the safety
aspects of this technology, people are still willing to try it out. The acceptance results
obtained by this survey may not be representative of a larger audience since the target set
consists primarily of educated youth who are likely to be predisposed to experiment with
newer developments on the technological front. With respect to ethical concerns, a large
number of respondents (62.5%) dont consider them important or are neutral. Religious
concerns seem to take a definite backseat for the respondents with 59.38% of them
considering religious concerns to be Eaxnt tremeland y 96.88unimport% considering
them either unimportant or are neutral to them. This result is slightly surprising
considering our initial expectations of an Indian customer set placing higher emphasis on
religious inclinations. However, the result possibly reflects the educational and age
profile of the target set of this survey.
Table: Customer perceptions of Nanotechnology products
Particulars Number Percentage
Perception of Nanotechnology's effect on human health
Extremely risky 0 0.00%
Somewhat risky 10 31.25%
Indifferent 9 28.13%
Somewhat safe 5 15.63%
Extremely safe 1 3.13%
Don't know 7 21.88%

Willingness to consume Nanotechnology products
Extremely willing 4 12.50%
16Somewhat willing 11 34.38%
Indifferent 7 21.88%
Somewhat unwilling 7 21.88%
Extremely unwilling 1 3.13%
Don't know 2 6.25%

Importance of ethical concerns in consuming Nanotech products
Extremely important 2 6.25%
Somewhat important 9 28.13%
Neutral 9 28.13%
Somewhat unimportant 3 9.38%
Extremely unimportant 8 25.00%
Don't know 1 3.13%

Importance of religious concerns in consuming Nanotech products
Extremely important 0 0.00%
Somewhat important 1 3.13%
Neutral 6 18.75%
Somewhat unimportant 6 18.75%
Extremely unimportant 19 59.38%
Don't know 0 0.00%

When surveying customer preferences for Nanotech applications in food, we sought the
opinion of respondents on the subject of labeling. Respondents were asked how important
labeling of food items is to them and what kind of labeling regime is better off in their
opinion, a mandatory labeling regime or a voluntary one. An overwhelming 90.63% of
respondents consider labeling of food products to distinguish between nano/non-nano
additives as important, which proves that the customer is concerned about relevant
information dissemination regarding the product. To prove this further, the survey
discovered that 96.88% respondents prefer a mandatory labeling regime wherein the
manufacturer is required by law to label its products. However, consumers do not seem to
wish to pay too much premium for having food products labeled, with 65.63% of the
respondents saying that they would support mandatory labeling only if the resultant
premium for this service is less than 10% of base price. There is however, a sizable chunk
17of the respondents who would support labeling premium even if base prices were hiked
by more than 15%. We hence think that customer opinion is still divided regarding the
extra charge one has to pay for labeling, and would possibly take a more unanimous
shape in the future as customer awareness regarding the technology increases.
Table: Consumer opinion of labeling of Nanotech foods
Particulars Number Percentage

1. How important is it to label food products for Nano/Non-nano attributes
Extremely important 16 50.00%
Somewhat important 13 40.63%
Indifferent 0 0.00%
Somewhat unimportant 0 0.00%
Extremely unimportant 1 3.13%
Don't know 2 6.25%

2. Preferred type of labeling
Mandatory labeling 31 96.88%
Voluntary labeling 0 0.00%
No labeling is necessary 1 3.13%
Don't know 0 0.00%
3. Willingness to pay Extra for labeling
Don't support any Nano labeling if food prices were higher. 1 3.13%
Support Nano labeling only if prices were higher by no more than 5%. 16 50.00%
Support Nano labeling even if prices are higher than 5% but no more than
10% 5 15.63%
Support Nano labeling even if prices are higher than 10% but no more
than 15% 0 0.00%
Support Nano labeling even if prices are higher than 15% 10 31.25%

We next tried to gauge respondents willingness t-proceossed f consumood ore d Nano
Nano food additives given that the use of nanotechnology would reduce the amount of
pesticides applied to crops. 62.5% of the respondents replied that they are willing to
consume nano-food if it provides the above benefit. As a flip side, when respondents
were asked to convey their willingness to consume nano-food given a risk of allergic
reaction in humans from the same, an overwhelming 84.38% emerged unwilling. 56.25%
18of the respondents were willing to consume nano-foods if they are proved to provide
greater nutritional value as compared to ordinary non-nano foods with 21.88% indifferent
to the same.
Table: Consumer acceptance of Nanotech food additives
Particulars Number Percentage

How willing would you be to consume Nano processed food or food having
Nano-scale food additives if :

a. it reduced the amount of pesticide applied to crops?
Extremely willing 6 18.75%
Somewhat willing 14 43.75%
Indifferent 5 15.63%
Somewhat unwilling 5 15.63%
Extremely unwilling 1 3.13%
Don't know 1 3.13%

b. it posed a risk of causing allergic reactions for some people?
Extremely willing
Somewhat willing 1 3.13%
Indifferent 3 9.38%
Somewhat unwilling 12 37.50%
Extremely unwilling 15 46.88%
Don't know 1 3.13%

c. it was more nutritious than similar food that isn't Nano-treated?
Extremely willing 7 21.88%
Somewhat willing 11 34.38%
Indifferent 7 21.88%
Somewhat unwilling 5 15.63%
Extremely unwilling 1 3.13%
Don't know 1 3.13%

Initial choice at equal prices
Given the customers willingness and perception of nanotech products, we aim to
quantify his/her willingness to pay for these products. We check whether consumers will
pay a premium for nanotech products or the other way. At the outset, we aim to classify
19the respondents into three categories depending on their initial product choice with
products available at the same price. The initial choices are as shown in the table below.

Table: Initial choice at Equal prices
Particulars Pants Juices
Number Percentage Number Percentage
Nanotech 20 62.50% 5 15.63%
Non-Nanotech 2 6.25% 21 65.63%
Indifferent 10 31.25% 6 18.75%

Consistent with our expectations, a majority of respondents are willing to try out nano-
pants over ordinary pants but the opposite is observed in the case of a product like Juice
which is meant for internal consumption, with 65.63% preferring juice without nano-
additives as compared to that with nano-additives. Only 18.75% respondents are
indifferent between nanotech and non nanotech in case of juice while this percentage is
significantly larger at 31.25% for pants.
Respondents who prefer the nanotech product as an initial choice are thus willing to pay a
premium for such products and hence willingness to pay is calculated by reducing the
price of the less preferred product (in this case, the non-nanotech product) by 10% in
each step and observing the point when the customer switches from nanotech product to
non-nanotech. The difference is the willingness to pay for the nanotech attributes.
Respondents whose initial choice is the non-nanotech product have a negative
willingness to pay for nanotech products. The mean value is calculated over the complete
set of respondents.


20Willingness-to-pay
We define willingness-to-pay (WTP) for nanotech products as the premium the
respondent is ready to pay above the price of the non-nanotech product, in order to avail
the nanotech attributes. The WTP results are as shown in the table below:

Table: Mean Willingness to Pay (premium over non-nanotech) for Nanotech
products
Particulars Mean of Initial and Follow-up Response
Base price (in Rupees) Pants (Rs. 1000 per pair) Juices (Rs. 80 per litre)
All respondents
Mean 212.5 -43.5
Percentage 26.98% -54.38%
Nanotech respondents
Mean 365 8
Percentage 57.48% 11.11%
Non-nanotech respondents
Mean -250 -68.19
Percentage -25.00% -85.24%

Nano attributes in case of pants find much more favor among the respondents with the
average WTP premium for nano pants being +26.98% over the base price of ordinary
pants. For Nanotech respondents (whose initial choice itself was nano-pants), this
premium is significantly larger at 57.48%. Contrarily, in case of juices, the average
respondent is averse to buy juice with nano-additives to an extent of 54.38% of non-nano
juices base price, i.e., in order to convince an average respondent to consume juice with
nano-additives, a discount of Rs.54.38 would have to be awarded to him for every Rs.100
worth of natural juice. Even for the respondents who accept juice with nano-additives, the
premium they are willing to pay is very small compared to the negative premium that
needs to be awarded to a natural juice respondent. Natural juice respondents, of course,
21are highly averse to buying juice with nano-additives with average discount required by
them being 85.24%.

Conclusion
Nanotechnology shows great potential in the coming years. However, it is necessary to
understand that unless we are able to gauge the market response to nanotech products and
understand consumer preferences early, irrespective of the novelty and utility of the
product, it may turn into a no-show. This study has sought to, and has hopefully
succeeded in, shedding light on possible consumer reactions to any future forays into
product markets by nanotechnology. We observed that consumers show greater
acceptance for products like clothing, which do not require internal consumption, while
having apprehension regarding consumption of food items. This shows that there
applications of nanotechnology in products meant for internalization into the human
biological system may not find ready acceptance in the market. Further, even applications
in say, food packaging could face resistance because such applications also involve direct
contact with food and hence indirectly leads to internalization of nanotechnology into the
biological system.





225. References

A Brief History of Nanotechnology, Retrieved July 31, 2007 via online access from
http://www.nanoword.net/pages/history.htm

Deodhar, Ganesh and Chern, (2007). Emerging Markets for GM Foods: An Indian
Perspective on Consumer Understanding and Willingness to Pay, Working Paper No.
2007-06-08, Indian Institute of Management, Ahmedabad

Frequently Asked Questions, Retrieved July 31, 2007 via online access from
http://www.foresight.org/nano/whatisnano.html

Local Regional and Global Competition: US, Europe and Japan, (2004) Retrieved online
on July 31, 2007 from http://www.masstech.org/institute/research/nano_report_04/us.pdf

Miller, J.C., Serrato R., Represas-Cardenas J.M., and Kundahl G., (2004), The Handbook
of Nanotechnology: Business, Policy and Intellectual Property Law, John Wiley & Sons,
USA

Nano commercialization problem in Europe, 2006, Retrieved July 28, 2007 via online
access from http://www.nano.ir/en/News.php?TblEN_newsPage=2&News_Id=58

Nano-Particular Technology Synthesis, Retrieved July 31, 2007 via online access from
www.che.iitm.ac.in/~abhijit/ch204/Nano-Particulate%20Technology_nag.ppt
23Nanotechnology, Retrieved July 31, 2007 via online access from
http://en.wikipedia.org/wiki/Nanotechnology

Nanotechnology: India, Companies and Institutions (2007) Retrieved July 30, 2007 via
online access from http://www.nanotech-now.com/cb/nanotech-now/nanotechnology-
companies/india

Nanotechnology Now, Retrieved August 12, 2007 via online access from
http://www.nanotech-now.com/current-uses.htm

Nanotechnology targets new food packaging products, Retrieved August 12, 2007 online
http://www.foodnavigator.com/news/ng.asp?n=63147-nanotechnology-food-packaging-
research-and-development

Narrative Science Journalism, Retrieved August 20, 2007 via online access from
http://72.14.235.104/search?q=cache:vo80DkX5sTQJ:www.pantaneto.co.uk/issue18/goe
de.htm+juices+nano-additives&hl=en&ct=clnk&cd=2&gl=in&client=firefox-a

Preparing for Take-off: Indian Nanotechnology, (2006) Retrieved July 29, 2007 via
online access from
http://www.scidev.net/Features/index.cfm?fuseaction=readfeatures&itemid=533&langua
ge=1

24Repels & Releases Stains, Retrieved Aug 20, 2007 via online access from
http://www.nanotex.com/applications/apparel_P2.html

Supramolecular assembly, Retrieved July 31, 2007 via online access from
http://en.wikipedia.org/wiki/Supramolecular_assembly



256. Appendix
The survey questionnaire
(Adapted from the working paper of Deodhar, Ganesh and Chern (2007))

Nanotechnology involves the synthesis, fabrication and manipulation of matter at the
nanoscale, or better understood as being at the molecular level. At this level, properties of
matter behave differently from that in the bulk state which enables us to exploit it in novel
ways and thus enhance the functionality of various products. It is established that these
products show improvement, however, it still remains to be checked thoroughly that all

nanotechnology applications are safe.
In the following sections, we would like to know how you will make decisions on purchasing
Section A of Nano products. Please ü the option closest to your opinion.


A1. Between Nano and Non- Nano products, how would you rate Nano products in terms
of their effects on human health?
Extremely Somewhat Indifferent Somewhat Extremely Don't
Risky Risky Safe Safe Know
1 2 3 4 5 6

A2. How willing are you to consume products produced with Nanotechnology?
Extremely Somewhat Neutral Somewhat Extremely Don't
willing willing unwilling unwilling Know
1 2 3 4 5 6





26A 3- A 5. How willing would you be to consume Nano processed food or food having
Nano-scale food additives?
Extremely Somewhat Neutral Somewhat Extremely Don't
willing willing unwilling unwilling Know
A3. if it reduced
the amount of 1 2 3 4 5 6
pesticide applied
to crops?
A4. if it posed a
risk of causing 1 2 3 4 5 6
allergic reactions
for some people?
A 5. if it was more
nutritious than 1 2 3 4 5 6
similar food that
isn't Nano-
treated?

A6. How important are ethical concerns when you decide whether or not to consume
Nano products?
Extremely Somewhat Neutral Somewhat Extremely Don't
important important unimportant unimportant Know
1 2 3 4 5 6

A7. How important are religious concerns when you decide whether or not to consume
Nano products?
Extremely Somewhat Neutral Somewhat Extremely Don't
important important unimportant unimportant Know
1 2 3 4 5 6

27Section B

Here, we ask you a series of questions about food attributes and labeling.

Please ü the option closest to your opinion.


B1. Which of the following food attributes do you think is the most important?
*
Sensory Nutrition Safety
1 2 3
* includes taste, colour, texture, etc.

B2. How important it is to label food products for Nano/non- Nano attributes?
Extremely Somewhat Neutral Somewhat Extremely Don't
important important unimportant unimportant Know
1 2 3 4 5 6

B3. There are two potential types of labelling:
1. Mandatory labelling - Food manufacturers are required by law to label their
Nano products as foods having Nano food additives
2. Voluntary labelling - Food manufacturers can freely decide on whether or not to
label their products as Nano products
Which type of labelling would you prefer?
1 Mandatory labeling
2 Voluntary labeling
3 No labelling is necessary. (Skip to B5)
9 Dont Know (skip t o B5)

B4. Any labelling will impose an extra cost on the food manufacturers, and the extra cost
may well result in higher food prices. Which of the following statements is closest to
how you would feel?

281 I would not support any Nano labelling if food prices were higher.
2 I would support Nano labelling only if prices were higher by no more than 5%.
3 I would support Nano labelling even if prices are higher than 5% but no more than 10%
4 I would support Nano labelling even if prices are higher than 10% but no more than 15%
5 I would support Nano labelling even if prices are higher than 15%



In Sections C and D, we would like you to consider your usual shopping trip

intended to buy clothes (pants, sarees etc) and food/food additives. You are
P ause asked to compare various alternative products and determine whether or not
to buy one of the alternative products in question.


Section C
Nano pants: Researchers at a firm called Nano-Tex have developed a miracle technology

which allows the production of stain-resistant fabric. Here is what the company
advertisement says: Sc³hool picture day. Kids fighting. Grape juice flung. Oatmeal flung

back. Jelly smeared. You get the idea. Food confiscated. Shirts wiped. Peace restored. Pictures
taken. Crooked smiles. But no sign of stains. Nano-Tex Repels and Releases Stains technology
keeps stains from soaking in, and allows them to easily come clean, while retaining a fabric's

natural softness
C1. Give details on the brand of trousers/jeans/pants you/your family use.
Sr. No. Name Brand (if branded)
1
2




29C2. Imagine that on your next shopping trip, you want to buy your kid/yourself some
pants and that there are only two kinds of pants available, as shown below:
Type of pants Nano-pants Non-Nano pants

Price (Rs) 1000 1000

Note: Apart from the Nano attribute, the two pants are assumed to be the same. Given
that they have the same price, which of the following alternatives best describes your
preference under your current budget?
Please ü only one box.

1 I will choose Non-Nano pants
2 I will choose Nano pants (skip to C7)
3 I am indifferent (skip to C11)

C3. Suppose, price of Nano pants was reduced by 10% (Rs 900 as against Rs 1000)
Considering your current budget, which pants would you choose?
1 I will choose Non-Nano pants
2 I will choose Nano pants (skip to C11)

C4. Suppose, price of Nano pants was reduced by 20% (Rs 800 as against Rs 1000)
Considering your current budget, which pants would you choose?
1 I will choose Non-Nano pants
2 I will choose Nano pants (skip to C11)

C5. Suppose, price of Nano pants was reduced by 30% (Rs 700 as against Rs 1000)
Considering your current budget, which pants would you choose?
1 I will choose Non-Nano pants
2 I will choose Nano pants (skip to C11)



30C6. Suppose, price of Nano pants was reduced by 40% (Rs 600 as against Rs 1000)
Considering your current budget, which pants would you choose?
1 I will choose Non-Nano pants (skip to C11)
2 I will choose Nano pants (skip to C11)

C7. Suppose, price of Non-Nano pants was reduced by 10% (Rs 900 as against Rs 1000)
Considering your current budget, which pants would you choose?
1 I will choose Non-Nano pants (skip to C11)
2 I will choose Nano pants

C8. Suppose, price of Non-Nano pants was reduced by 20% (Rs 800 as against Rs 1000)
Considering your current budget, which pants would you choose?
1 I will choose Non-Nano pants (skip to C11)
2 I will choose Nano pants

C9. Suppose, price of Non-Nano pants was reduced by 30% (Rs 700 as against Rs 1000)
Considering your current budget, which pants would you choose?
1 I will choose Non-Nano pants (skip to C11)
2 I will choose Nano pants

C10. Suppose, price of Non-Nano pants was reduced by 40% (Rs 600 as against Rs 1000)
Considering your current budget, which pants would you choose?
1 I will choose Non-Nano pants
2 I will choose Nano pants





31C11. In general, how likely is it that you would purchase the two types of pants?
Sr. No. Particulars Extremely Somewhat Neutral Somewhat Extremely Don't
likely likely unlikely unlikely Know
C11a Non-Nano 1 2 3 4 5 6
pants
C11b Nano pants 1 2 3 4 5 6

Section D

Nano-scale Food Additives are added into processed food to impart various
properties. They can be used to add colour or even to enhance the texture/structure of food

items by infusion of synthetic nanoparticles. However, it is remains to be established
whether very small particles on consumption are safe or may be harmful.


D1. Give details on the fruit/vegetable juices you/your family consume.
Sr. No. Name Brand
1
2

D2. Imagine that on your next shopping trip, you want to buy some juices and that there
are only two kinds of juices available ± those with natural antioxidants and those with
nano-additives, but having greater effectiveness. Please compare alternative juices
below.
Type of juice Natural juices Juices with nano-
additive

Price (Rs /Litre) 80 80

Note: Apart from Stability of the antioxidant, the two juices are the same (in terms of
appearance, smell, taste, feel and nutritional value for instance). Given that they have the
same price, which of the following alternatives best describes your preference under your
current budget?
32Please ü only one box.

1 I will choose Natural juice
2 I will choose juice with nano-additive
(skip to D7)
3 I am indifferent (skip to D11)

D3. Suppose, price of juice with nano-addtive is reduced by 10% (Rs 72/kg as against Rs
80/ltr)
Considering your current budget, which juice would you choose?
1 I will choose Natural juice
2 I will choose juice with nano-addtive (skip to D11)

D4. Suppose, price of juice with nano-addtive is reduced by 20% (Rs 64/ltr as against Rs
80/ltr)
Considering your current budget, which juice would you choose?
1 I will choose Natural juice
2 I will choose Juice with nano-addtive (skip to D11)

D5. Suppose, price of juice with nano-addtive is reduced by 30% (Rs 56/ltr as against Rs
80/ltr)
Considering your current budget, which juice would you choose?
1 I will choose Natural juice
2 I will choose Juice with nano-addtive (skip to D11)

D6. Suppose, price of juice with nano-additive is reduced by 40% (Rs 48/ltr as against Rs
80/ltr)
Considering your current budget, which juice would you choose?
1 I will choose Natural juice (skip to D11)
2 I will choose Juice with nano-additive (skip to D11)
33D7. Suppose, price of Natural Juice is reduced by 10% (Rs 72/ltr as against Rs 80/ltr)
Considering your current budget, which juice would you choose?
1 I will choose Natural juice (skip to D11)
2 I will choose Juice with nano-additive

D8. Suppose, price of Natural Juice is reduced by 20% (Rs 64/ltr as against Rs 80/ltr)
Considering your current budget, which juice would you choose?
1 I will choose Natural Juice (skip to D11)
2 I will choose Juice with nano-additive

D9. Suppose, price of Natural Juice is reduced by 30% (about Rs 56/ltr as against Rs
80/ltr)
Considering your current budget, which juice would you choose?
1 I will choose Natural Juice (skip to D11)
2 I will choose Juice with nano-additive


D10. Suppose, price of Natural Juice is reduced by 40% (Rs 48/ltr as against Rs 80/ltr)
Considering your current budget, which juice would you choose?
1 I will choose Natural Juice
2 I will choose Juice with nano-additive

D11. In general, how likely is it that you would purchase the two types of juices?
Sr. No. Particulars Extremely Somewhat Neutral Somewhat Extremely Don't
likely likely unlikely unlikely Know
D11a Natural 1 2 3 4 5 6
Juice

34D11b Juice with 1 2 3 4 5 6
nano-
additive

Section E
Please tell us a little bit about your background.

E1. Gender:
Female Male
1 2

E2. Marital status:
Married Unmarried Other(specify___________________)
1 2 3

E3. Age: ____________years

E4. Working status of respondent
Employed Student Homemaker Retired Unemployed Other: Specify_____
1 2 3 4 5 6

E5. Education
Illiterate Primary High Intermediate Graduate Post Ph.D.