Imported Beer Vs Locally Made Imported Beer
Imported Beer Vs Locally Made Imported Beer
1. Secondary Research Findings
A number of empirical studies have explored the issue of brand value and brand perception by consumers as relates to local and imported products. Schaefer (1997) explored the different dimensions on consumer knowledge and their impact on consumer’s use of the country of origin in evaluating alcohol beverages. The findings indicated that brand familiarity and objective or subjective product knowledge had insignificant impact on consumers’ use of the country or origin cue rather has significant interaction effects. The research also concluded that, under some circumstances, objective product class knowledge could increase consumer’s dependence on country of origin cue when evaluating products having unfamiliar brand names as opposed to familiar brand names (Alden et al 2006).
Phau & Suntornnond (2006) found that country of origin cues influenced Australian consumer in their beer evaluations though the influences were weak, suggesting that brand familiarity together with objective product knowledge informed the degree to which the consumers dependent on country of origin in their product evaluation. Nonetheless, the study found inconsistent results varied degrees of objective knowledge and its impact on country of origin of beer manufacture.
Findings from an ethnographic research by Pettigrew & Charters (2010) showed that alcoholic consumption in Hong Kong was mainly for the purpose of conveying desired images to particular and generalized others. As such, product symbolism was the main influencer for taste considerations among consumers of different beer brands (Schaefer, 1997).
Erdem & Swait (1998) suggested to the potential of a brand name to inform a consumer’s choice as a result of the signaling function of a brand name that evokes a variety of associations e.g. prior experiences with the specific brand as well as quality inferences. Similarly, Deliza & MacFie (1996) expressed that brands often reflect various values and images which manufacturers have strived to build via marketing and advertising strategies.
2. Research Definition
a. Background of the problem
The global beer industry is on a steady rise and increasing competition between imported and local beer brands due to growing consumerism, consolidation, globalization, and taxation reforms (Liao, 2009). Developing markets especially in Africa, Latin America and Asia are increasingly providing the impetus for volume growth relative to mature markets in USA and Europe. There is increasing per capita consumption due to rising disposable income and trade ups for informal alcohol with professionally brewed beer among consumers (Pettigrew, 2010). Beside trading up into beer, there is increasing trading up within beer categories themselves with local premium brands increasing their market share in the developing markets as international premium brands grow just as strongly, though from a lower base. This is a more notable trend in Australian which premium imports and craft beers persist with their outperformance of mainstream beer. Australian consumers are increasingly seeking a broader repertoire of beer brands, resulting in growing popularity of the local premium, local and imported craft beers.
As relates to local beer, valued growth in the Australian market is larger than volumetric growth. This translates that there is stronger positioning of the entire beer market. While a larger share of the growth has been from the local sub categories of craft, and low carbohydrate beer, it is evident that the real impetus behind sales is from imported beer brands. The growth of the Australian beer market over the past decade has been primarily due to premium imports with the increasing popularity of European pilsners and lagers whose manufacturers have local brewing arrangements in New Zeeland and Australia. Also, the beer quality and competitive pricing of Asian beers has positioned them as more premium brands in Australian.
There is ever-increasing blurring of lines between domestic and imported beers in these mature markets with the increase in the number of locally brewed brands that remain tagged as ‘import premium’ in the Australian market (Dimofte et al, 2008). The increased localization of foreign beer production has evoked brand health concerns as the premium import beers are offered as low as sub $40 at times. On the surface, it appears that Australian consumers buy brand image as opposed to brand authenticity. However, the continuing discounting has resulted in devaluing of consumer initial perceptions pertaining premium beer. In addition, the Australian market is currently flooded with parallel imported beer products, brought in by retailers seeking to gain competitive advantage through direct sourcing to minimize cost. Consistency in branding is also feared to be under serious threat due to the different flavor attributes of many genuine imports versus the local imports into the Australian beer market.
Dimofte, Johansson & Ronkainen, (2008), Steenkamp, Batra & Alden, (2003) consistently showed that imported brands often engender more positive impact, enjoy stronger linkage with quality and social responsibility, and also evoke a relatively more appealing global myth compared to local brands. On the other hand, other studies by Johannson & Ronkainen (2005); Schuiling & Kapferer (2004) noted that consumers prefer local brands more due to their greater familiarity with local brands and association with their cultural roots and superior uniqueness.
The growing industry consolidation has rendered many beer manufacturers in Australian with fragmented IT and back-office systems that offer opportunities for improving global efficiency without necessarily losing local flexibility. This translates the issue of brand value and preference as relates to imported and local beer brands are set to remain particularly major to both consumers and beer companies.
b. Secondary data
Much literature has explored the issue of brand value and perception among consumers for both imported beer and local beer. Erdogan & Uzkurt (2010) defined product perception as the consumers’ overall evaluative judgment of a product’s characteristics e.g. brand, style, quality. Most of these product attributes are associated with its country of origin. Kaynak & Kara (2002) espoused that because customers’ evaluation of a brand is based on all the information at their disposal, the country of origin factor becomes a major determinant of customers’ brand evaluation. In addition, Huddleston, Linda & Lesli (2001) observed that country of origin is associated with quality of products in terms of extrinsic (price and brands) and intrinsic (style, material) cues. Also, Lantz & Loeb (1996) concluded that the country of origin is of greater significance compared to the brand name, quality, and price in influencing attitudes towards a given product.
However, other literature argued that the local customers in Australia often develop favorable perception towards the products from countries having similar cultural, political, and economic characteristics. Huddleston, Linda & Lesli (2001) stated that Australian consumers often perceive products manufactured in other developed countries as being of high quality. In this regard, as pertains to the current research focusing on the beer industry in the Australian beer market, it can be said the origin of beer brands – locally or overseas – need to be regarded as a primary factor in evaluating the perception towards beer brands available on the market.
c. Purpose of the study
The purpose of this study is to gain solid market insight into the effect of country-of-origin aspect on the purchasing decisions of imported beer and local beer among Australian beer consumers.
d. Significance of the study
This study provides useful insight into the role of country-of-origin to the brand value and perception among consumers pertaining to imported beer and local beer. The findings of this study would be particularly instrumental to alcohol manufacturing and retailing companies in product positioning in the Australian market.
3. Research Methodology
The research method used in in this study is a qualitative approach where in-depth interviews with beer consumers and liquor experts are conducted. Primary data for the research is obtained from direct answers given to specific questions relating customer brand value and the perception of imported and local beer. Secondary data for the research is obtained from existing related literature in journals, textbooks, dissertations etc.
Pilot Study
In the pilot study, respondents were randomly assigned to one of two pre-set conditions: (1) the blind condition, and (2) the non-blind condition. In the blind condition, the participants were asked to taste beer samples without any information pertaining to the brands. On the other hand, in the non-blind conditions, the participants were afforded the brands of beer samples (local or imported) prior to tasting them.
Sampling
The research recruited a total of 35 participants randomly selected from two different venues: a university and a park in Sydney. The participants were approached randomly and asked to voluntarily participate in the short survey entailing a beer tasting program. During the experiments, participants were placed in separate areas to avoid interaction, after which random technique was used to select members of the blind group and the non-blind group. According to statistical tests, there are no substantial differences between the means of the non-blind and the blind groups.
The participants in the non-blind group were given information about the origin (inside or outside Australia) of the beer sample they were to test while their counterparts in the blind group were afforded no such information before tasting. The beer samples for the non-blind group carried stickers clearly indicating “Brewed in Australia” to denote local beer brand, and “Foreign Brewed”. The participants were required to read the stickers prior to tasting and shown the order of the beer brands in advance. The samples for the blind group were blank and the participants were not told the order of the beer brands before tasting.
Tasting and ranking started after setting up the taste test, in which respondents tasted the beer samples and provided a ranking for the beers. The ranking ranged from ‘best tasting’ to ‘worst tasting.’ For both the blind and non-blind conditions, the participants were required to close their eyes so as to avoid any distractions from their tasting exercise. Thereafter, the participants provided the enumerators with their individual scores of the beer samples.
Instruments
This study’s instruments were developed following the CETSCALE by Shimp and Sharma (1987) to measure the participants’ ethnocentric tendency towards imported and local beer brands. The scale had been validated by a number of similar studies in other countries such as France, Germany, Australia, and China. In most of the previous studies, a Cronbach’s alpha value of 0.90 was reported to indicate the reliability of the Scale (Phau & Suntornnond, 2006).
Perceptions towards both local and imported beer brands were evaluated in terms of brand value, quality, price, aroma, alcohol containment as well as impact on health. These dimensions had been selected from earlier studies and industry reports (Brooks et al, 2008). Customer evaluations of imported and local beer brands commonly in each dimension were aggregated to measure the overall perceptions towards the brands. All the scales were marked on a five point likert scale that ranged from 1 (worst tasting) to 5 (best tasting). In addition, a close-ended questionnaire was administered to the respondents to collect information on such demographic data as age, gender, educational level, and monthly income.
4. Exploratory Research Findings
The findings from the exploratory research indicated that perception of beer brand is significantly affected by the information consumers have on if prior to using it. The preference of non-blind respondents for ‘Brewed in Australia’ beer sample was higher (for participants with prior information about the beer sample to taste). The respondents in the non-blind group were more likely to score the ‘Brewed in Australia’ beer as best tasting compared to participants in the blind group. The preference for ‘Foreign Brewed’ beer brands was similar across the non-blind and blind groups i.e. respondents were 5% more likely to score the Foreign Brewed beer as the best tasting beer.
The analysis of the exploratory research findings was done using the IBM SPSS 19 package. First, a reliability analysis was undertaken to measure the internal consistencies of all the scores individual scale using the Cronbach’s Alpha Coefficients. According to the findings, all the reliabilities for both scales were found to be sufficiently adequate because Cronbach’s Alpha values were higher than 0.7 (‘Acceptable’ according to George and Mallery, 2003). The customer perception towards both local and imported beer brands assessed based on dimensions of brand value, quality, price, taste, aroma, and alcohol containment as well as health impact. Descriptive statistics obtained from the aggregate values indicated a moderate level of favorable perception towards imported beer brands.
5. Proposed Conceptual Diagram
6. Conclusion and Recommendations
This study explored the ethnocentric tendency of Sydney, Australia customers and their perception towards imported beer and local beer brands available in the local market. The findings indicated that the ethnocentric tendency of beer consumers may have negative correlation with the favorable perceptions of customers towards foreign beer brands; and that highly ethnocentric beer customers have less favorable perception towards foreign beer brands. These findings correlate with the findings and conclusions of previous studies. These results have significant implications to the local brewery companies and vendors in Sydney to rethink their current strategies. Practically, most local brands are performing relatively strong performance compared to imported brands. However, the players should overlook the growing popularity of foreign beer brands in the local market. As such, local breweries and vendors should take advantage of ethnocentric brand appeals that are associated with the Australian beer culture so as to attract more consumers in growing segments. In addition, they can utilize the findings of this research in market segmentation and product positioning in the domestic market.
Bibliography
Alden, D. L., Steenkamp, J.-B. E. M., & Batra, R. 2006. Consumer Attitudes toward marketplace Globalization: Structure, Antecedents and Consequences. International Journal of Research in Marketing, 23: 227-239.
Anja Schaefer, 1997, “Consumer knowledge and country of origin effects”, European Journal of Marketing, 31, 1, pp.56-72..
Brooks, C.M., Kaufmann, R.J., and Lichtenstein, D.R., 2008. “Trip chaining behavior in multi-destination shopping trips: a field experiment and laboratory replication.” Journal of Retailing, 84, 1, pp.29-38.
Dimofte, C. V., Johansson, J., & Ronkainen, I. 2008. Cognitive and Affective Reactions of American Consumers to Global Brands, Journal of International Marketing, 16, 4, 115-137.
Ian Phau, Vasinee Suntornnond, (2006) “Dimensions of consumer knowledge and its impacts on country of origin effects among Australian consumers: a case of fast-consuming product”, Journal of Consumer Marketing, 23, 1, pp.34-42.
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Appendix
Questionnaire 1 NB: ANSWERS ARE IN BOLD TEXT
The questionnaire used in the non-blind condition
Suppose you intend to buy a beer and your options include the imported and local beer brand provided. After reviewing the information provided on the bottle sticker, how willing would you be to purchase the beer brand? Please tick against one of the following choices:
a) Local (Brewed in Australia) beer brand
Strongly Willing Somewhat Willing to Buy
Strongly Unwilling to buy Somewhat Unwilling to buy
b) Foreign Branded Beer
Strongly Willing Somewhat Willing to Buy
Strongly Unwilling to buy Somewhat Unwilling to buy
What influences your choice of a beer brand? Please tick against those brand attributes that influence your decision to buy.
a) Local (Made in Australia) Beer
Health Impact Quality Taste
Price Aroma Alcohol Containment
b) Foreign Branded Beer
Health Impact Quality Taste
Price Aroma Alcohol Containment
Questionnaire 2
Q. Please Indicate how often you drink a beer brand by ticking against the number which most closely corresponds to your answer.
Local (Brewed in Australia) beer brand
1 2 3 4 5
Never A few times A few times A few times Everyday or
per year per month per week every other day
Q. After tasting the beer sample, please rate the taste by ticking against the number that accurately represents your perception.
1 2 3 4 5
Bad Poor Fair Good Excellent
b) Foreign Branded Beer
1 2 3 4 5
Bad Poor Fair Good Excellent
Q. After tasting the beer sample, please rate the aroma by selecting a number that correctly reflect your perception
1 2 3 4 5
Bad Poor Fair Good Excellent
Q. After tasting the beer sample, please rate the alcohol containment by selecting a number that correctly reflect your perception
1 2 3 4 5
Too Little Little Average Much Too Much
Q. After tasting the beer sample, please rate your perception of its potential health impact
1 2 3 4 5
None Negligible Moderate Harmful Lethal
Questionnaire 3
Questionnaire used to gather demographic data of participants:
What is your age?
25 or under
26-40
41-55
56 or older
What is your gender?
Female
Male
What is the highest level of education you have completed?
Grammar school
High school or equivalent
Vocational/technical school (2 year)
Some college
Bachelor’s degree
Master’s degree
Doctoral degree
Professional degree (MD, JD, etc.)
Other
What is your current household income in U.S. dollars?
Under $10,000
$10,000 – $19,999
$20,000 – $29,999
$30,000 – $39,999
$40,000 – $49,999
$50,000 – $74,999
$75,000 – $99,999
$100,000 – $150,000
Over $150,000
