Consumer's willingness to pay rises and likeness falls: the case for Labeling sake

  • La volonté du consommateur de payer augmente et la ressemblance diminue : le cas du saké étiqueté

Abstracts

This study took the approach of having consumers taste sake blind and with common information that sake brewers provide to their customers. A paired t-test results indicated that the blindly tasted sake was perceived better in all aspects than when tasting the same sake with information. However, consumer’s were willing to pay a higher price for the sake with the information given about the sake. This research suggests that consumers feel more comfortable paying for sake with some information about it; however, sake brewers may be giving the consumer the wrong information to the consumer.

Cette étude a adopté une approche consistant à faire goûter du saké aux consommateurs, en aveugle et avec des informations communes que les brasseurs de saké fournissent à leurs clients. Les résultats d'un test t apparié ont indiqué que le saké dégusté à l'aveugle était mieux perçu à tous égards que le saké dégusté avec des informations. Cependant, les consommateurs étaient prêts à payer un prix plus élevé pour le saké avec les informations fournies sur l’étiquette. Cette étude suggère que les consommateurs se sentent plus à l'aise pour payer un saké s'ils disposent de quelques informations à son sujet ; cependant, les brasseurs de saké peuvent donner de mauvaises informations aux consommateurs.

Outline

Text

Introduction

In terms of consumption, sake has been seen mostly in Japanese restaurants around the world, but there is a push to promote, educate and serve consumers sake in restaurants and bars outside where it is traditionally found. Countries like USA, Korea, Taiwan, and Hong Kong are seeing steady growth of Japanese sake consumption1.

Hong Kong has been considered an attractive market for lower alcohol beverages. In 2007, Hong Kong became a tax-free region for alcoholic beverages under 18% alcohol by volume, which opened up the territory for free trade for wine and beverages like sake and brought wine, beer, and sake importers, distributors and producers from around the globe to the market. In addition, Hong Kong is a special administrative region of China and is considered by the business world, especially wine, beer, and sake markets, as the gateway into Mainland China.

Methodology

This study is apart of a larger study that was conducted in Hong Kong, S.A.R., inside an upscale independent hotel’s lobby restaurant from March-April of 2018. Measurement items were taken from a previous study2and adapted after consultation with two Sake Samurais, a title given by the Japan Sake Brewers Association Japanese for ambassadors of sake to only about 70 persons in the world.

Convenience sampling was used as guests were asked if they would like to participate in the study. Data were analyzed using SPSS 26®

Respondents were asked to taste four sakes, rate the sakes with the measurement items, and provide their willingness to pay both in retail and restaurants. Respondents tasted sakes 2 blind and 2 sakes with information that is commonly given to consumers about sake. Without the consumer’s knowledge, the consumer tasted the same sake twice; however, the first tasting was blind and the second tasting was given with the information from Figure 1. The results of this study was taken from the one sake that was assessed twice.

Figure 1. Information given to respondents about sake

Masumi Karakuchi Kiippon
Grade Junmai Ginjo
Rice Miyamanishiki, Yamadanishiki
Rice Polishing Rate 55%
Alcohol % 15%
SMV +5
Tasting Note Clean, simple and strong minerals

Results

298 samples were collected of which 278 were valid. Demographic information can be found in Table 1. A paired-samples T-test was conducted for overall liking, willingness to pay in a retail shop, and willingness to pay in a restaurant with the blind and given information tasted sake. Individual cases were eliminated if data was missing. The results showed that the respondents' overall liking was significantly higher when the sake was tasted blind than when tasting the same sake with information. However, the respondents significantly were willing to pay more for the sake in a restaurant and retail shops when given the information than tasting the sake blind. A complete summary can be found in Table 2.

Table 1. Demographic Information of Respondents

Demographic variable Value N %
Gender Male 49 32.7
Female 177 63.7
Missing 10 3.6
Age 18-25 36 13.2
26-35 112 41
36-45 62 22.3
54-55 46 16.5
Over 55 17 6.1
Missing 5 1.8
Degree Obtained High School or less 58 20.9
Undergraduate 145 52.2
Postgraduate 68 24.5
Missing 7 2.5
Monthly household income (USD) under $2,000 30 10.8
$2,001-$4,000 63 22.7
$4,001-$5,500 48 17.3
$5,501-$7,000 29 10.4
$7,001-$9,000 25 9.0
$9,001-$12,000 11 4
Over $12,000 35 12.6
Prefer not to Disclose 37 13.3
Chinese 185 66.5
Asian Non-Chinese 27 9.7
America(s) 13 4.7
Ethnicity European 27 9.7
Oceanian 3 1.1
Caucasian 11 4.0
Other 6 2.2
Missing 6 2.2
Familiarity with Sake Extremely or Very familiar 9 3.2
Moderately familiar 60 21.6
Somewhat familiar 59 21.2
Not familiar 150 54
Missing 0 0

Table 2. Paired T-Test for Blind and Open Tasted Sake

Blind Tasting Given Information
N M SD M SD t-test
Overall liking 274 2.814 0.9248 2.55 1.027 <0.01
Retail-Willingness to pay (HKD) 225 1824.53 138.137 233.66 165.727 <0.01
Restaurant-Willingness to pay (HKD) 218 261.314 200.991 316.42 228.203 <0.01

Discussion

Overall liking was higher for the sake when tasted blind than when information about was given. A previous study in wine found that novice wine consumers rely more heavily on extrinsic information when assessing wine3. In addition, another wine study found that when consumers assessing quality spend more time focusing on extrinsic information, than briefly looking at the information, quality was negatively impacted4 It is important to note, that the majority of the sake consumers in this study did not have much knowledge about sake. The results of this study may also be attributed to the fact that most of the respondents were novice sake consumers and when presented with information, the results were negatively impacted.

The results also indicated that consumers are willing to pay more for sake when given extrinsic information than tasting it blind. As Burnham and Skilleas 5 point out repetitively in their argument that novice wine consumers cannot accurately assess wines when tasting them blindly and their assessment needs the extrinsic information to be more accurate. This could be the case for sake as well. The novice respondents did not know or understand how to assess sake which resulted in overall liking being higher when tasting the sake blindly than given information.

These results indicate that marketing to the mass novice consumer may be difficult. Providing accurate information about the sake to potential customers may negatively impact them. Therefore, small tastings may encourage novice consumers to pay the premium for the sake. These tastings could be done at a retail shop or in a restaurant setting, but allowing the consumer to taste the sake without providing much information may be a much better approach to increasing sales than just providing information to the consumer and leaving it up to them to purchase it.

Notes

1 Y. Kishi & S. Hamamatsu, “Globalization of Japanese Sake, How Japanese Sake crosses borders?”, In Proceedings of The Association of Japanese Business Studies Conference. New Orleans, 2016. Return to text

2 H. Song, W.C. Gartner & B. Marlowe, “Does objective information affect consumers’ willingness to pay for vines?”, In American Association of Wine Economists, Bordeaux, France, 2016, p. 1. https://doi.org/10.13140/RG.2.1.1322.1369 Return to text

3 S. Charters & S. Pettigrew, “The dimensions of wine quality”, Food Quality and Preference, 18(7), 2007, p. 997–1007. https://doi.org/10.1016/j.foodqual.2007.04.003 Return to text

4 S. D’Alessandro & A. Pecotich, “Evaluation of wine by experte and novice consumers in the presence of variations in quality, brand and country of origin cues”, Food Quality and Preference, 28(1), 2013, p. 287–303. https://doi.org/10.1016/j.foodqual.2012.10.002 Return to text

5 D. Burnham & O. Skilleas, “Categories and appreciation—A reply to Sackris”, Journal of Value Inquiry, 48, 2014, p. 551–557. Return to text

References

Electronic reference

Ryan P. Smith, Forest Ma and Watson M. Baldwin, « Consumer's willingness to pay rises and likeness falls: the case for Labeling sake », Territoires du vin [Online], 13 | 2021, 15 December 2021 and connection on 23 February 2024. Copyright : Licence CC BY 4.0. URL : http://preo.u-bourgogne.fr/territoiresduvin/index.php?id=2292

Authors

Ryan P. Smith

Hospitality and Tourism Management, San Francisco State University

Forest Ma

College of Hospitality, Retail, and Sports Management, University of South Carolina

Watson M. Baldwin

School of Hotel and Tourism Management, The Hong Kong Polytechnic University

Copyright

Licence CC BY 4.0