Download - Chocolate Di
-
8/10/2019 Chocolate Di
1/59
See the brand, and youll like it.
The Influence of Brand Information on
Chocolate Preferences of ChineseConsumers
The First Conference on Economics and Politics of Chocolate
LICOS, September 16-18 2012
Di Mo and Johan Swinnen
LICOS, K.U. Leuven
Linxiu Zhang
Center for Chinese Agricultural Policy, Chinese Academy of Sciences
Scott Rozelle
Center for Food, Security and the Environment
Stanford Center for International Development
Stanford University
-
8/10/2019 Chocolate Di
2/59
Over the millenniums,
the Chinese had
developed a wide range
of cuisines and snacks.
Food is what matters.
--An old Chinese saying
-
8/10/2019 Chocolate Di
3/59
But they mostly share one trait:
Salty not sweet
-
8/10/2019 Chocolate Di
4/59
Chocolate is new to Chinese.
Before Chinas economic reforms in 1970s and 1980s,
almost no one in China had tasted chocolate (Allen, 2010).
Too
sweet
-
8/10/2019 Chocolate Di
5/59
Serves better as
fabric than food?
-
8/10/2019 Chocolate Di
6/59
Chocolate Buddha
-
8/10/2019 Chocolate Di
7/59
Although there are many fresh and enthusiastic
chocolate fans, on average they only consume 100
grams per capita in 2008.
11.4
0.10
2
4
6
8
10
12
Germany China
Chocolateconsumptio
nper
capita(kg)
-
8/10/2019 Chocolate Di
8/59
1 to 100 Ratio!! Germany = 100
China = 1
-
8/10/2019 Chocolate Di
9/59
However, Chinas chocolate market has been growing rapidly.
From 1996 to 2005, per capita consumption of cocoa grew at
about 6% per year (ICCO, 2010). It grows faster at 9% after 2007.
Source: ICCO (2007) & National Bureau of Statistics of China (2011)
0
0.005
0.01
0.015
0.02
0.025
0.030.035
0.04
0.045
0.05
2001 2003 2005 2007 2009 2011
Perc
apitaconsumptionof
cocoa
-
8/10/2019 Chocolate Di
10/59
And Chinas chocolate market is expected to
accelerate in the future, growing by 10% to 15% per
year(Buffy, 2011)
.
0
1
2
3
4
5
6
7
8
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
Marketsize(billinUS
D)
With an annual growth of 10%
With an annual growth of 15%
Source: Euromonitor 2011
-
8/10/2019 Chocolate Di
11/59
In 2010, total market size of chocolate in China was USD 1.4
billion (Euromonitor, 2011).
It is believed that China could soon consume up to 7 billion
USD per year(China Daily, 2004).
Yes: lots of little chips can add up to a HUGE pile of chocolate!!
-
8/10/2019 Chocolate Di
12/59
Such potential has made China market a battle field for
the top 20 world chocolate producers , domestic
producers and many other companies (Scott-Thomas, 2011).
China now has around 250 chocolate companies with an annual
production capacity of chocolate of 150,000 tons(Buffy, 2011).
http://article.directory4u.org/profile/Phybie-Buffy/44170http://article.directory4u.org/profile/Phybie-Buffy/44170 -
8/10/2019 Chocolate Di
13/59
Chinas chocolate market
Who are the actors?
FDI
Imports
Domestic producers
How do they compete?
Branding strategies
Localization (adapt to Chinese culture andtaste)
Technology and ingredients
-
8/10/2019 Chocolate Di
14/59
The market is dominated by foreign brands.
FDI produced
(Mars, Kraft,
Nestl, Hershey's
etc.)
Domestic
(LeConte etc.)
Imported(Ferrero,Godiva
etc.)
Source: CMMS (2010)
70%
14%
16%
-
8/10/2019 Chocolate Di
15/59
The foreign brands adopted various advertising and
marketing strategies to build the brands.e.g. luxurious self-indulgence (Dove fromMars)
-
8/10/2019 Chocolate Di
16/59
Hersheys : cute
and whimsical
KISSES.
-
8/10/2019 Chocolate Di
17/59
Some of these foreign chocolate brands have also tried
to localize their taste and adapt to Chinese culture (Woodand Grosvenor, 1997).
Mars, Hersheys, Cadbury (now owned by Kraft) and
Nestl set up factories in China.
They adapted their chocolate recipes by making them
less sweet; and at the same time, more variety of
creamy and nutty chocolates were created to cater to
the Chinese taste.
-
8/10/2019 Chocolate Di
18/59
They also designed products
as unique gifts, using this as a
cultural gateway (71% of
chocolate purchase is for gifts
in 2010).
-
8/10/2019 Chocolate Di
19/59
During the past decade, a large number of imported brands have
also entered China.
It grew from $17.7 million in 1999 to nearly $50 million in 2003 (AsiaTimes, 2005).
Consumers in China now have access to more than 70 importedchocolate brands in the nations large urban cities (Chocolate News,2009).
BelgianTruffles
Cte d'Ormilk chocolate
-
8/10/2019 Chocolate Di
20/59
-
8/10/2019 Chocolate Di
21/59
Domestic competitors have also joined the battle.
However, they are less competitive.
less-developed technology
low-quality ingredients
less sophisticated marketing strategies
Fantastic photos take your
time one photo per page
-
8/10/2019 Chocolate Di
22/59
A chocolate factory in Tianjing producing
low-quality chocolates which were sold in
more than four provinces in China.
-
8/10/2019 Chocolate Di
23/59
-
8/10/2019 Chocolate Di
24/59
A few domestic companies have managed to invest in the
technology and ingredients.
They have also emphasized Chinese culture and tradition in
advertising to invoke the patriotism of consumers (World Executive,2004).Through the efforts, LeConte, the chocolate brand of COFCO (the largest
domestic food company), has reached a sale of 600 million USD in 2006.
-
8/10/2019 Chocolate Di
25/59
-
8/10/2019 Chocolate Di
26/59
On the one hand, consumers in China have been found to have
strong preferences for foreign brandsboth FDI and imported
ones (Sin, Ho and So, 2000).
Higher quality ,authenticity(Li, Fu and Murray, 1997)
Social and symbolic
values (Valentines,individualism)(Li, Li and Kambele, 2012).
On the other hand, foreign brandsface the challenge of consumer
patriotism.
Chinese united, buy domestic!!
-
8/10/2019 Chocolate Di
27/59
The literature suggests that brand information may affect
consumer preferences:
Information about food products may shape the tastingexperience of consumers (Deliza and MacFie, 1996).
Among the various information cues, brands have been
found to influence consumer choice (Allison and Uhl, 1964;
Aaker, 1992; Keller, 1993; de Chernatony and McDonald, 1998)
In developing economies, brands of new products from
developed countries can be powerful sources of
information (Carpenter and Nakamoto, 1989; Zhang, 1996)
-
8/10/2019 Chocolate Di
28/59
More importantly, how different aspects of branding
affect the preferences of consumers?
Experimental studies on brand information mostlysimply compare consumer preferences of knowing and
not knowing the brand of product (without much
discussion on the different aspects of branding) (McClure
et al. 2004; Wansink et al., 2000).
Those that do look at different aspects typically rely
on case studies or focus group analysis (e.g. Delong et al.,
2004; Chao, Whrer and Werani, 2005).
We need more empirical evidence.
-
8/10/2019 Chocolate Di
29/59
Goal of the study
Test how different types of information that are associated with
different brands affect the tastes and preferences of consumers.
Two Objectives: First, we test if thepreferences towards each brand change
when consumers are informed about the brands* (non-blind
condition) from the case when consumers are blind about the
brands (blind condition).*Brands are defined by distinguishing among source of
chocolate (imported or produced locally), nationality of
producer (foreign or domestic) and types of chocolate (milk
chocolate or truffle).
Second, we explore if knowing the brands also affects the
pair-wise rankings*of brands.*Pair-wise rankings are used to reveal whether one brand is
preferred over another brand (in order the test directly how the
different information affects preferences).
-
8/10/2019 Chocolate Di
30/59
Approach: we conducted a chocolate
tasting experiment in Beijing.
Beijing Municipality
-
8/10/2019 Chocolate Di
31/59
We recruited participants from the Olympic Forest Park and
Renmin University in Beijing.
-
8/10/2019 Chocolate Di
32/59
We recruited a total of 234 participants to be included in the
experiment.
=234
d l di id d h i i i
-
8/10/2019 Chocolate Di
33/59
We randomly divided the 234 participants into two
groups.
-
8/10/2019 Chocolate Di
34/59
-
8/10/2019 Chocolate Di
35/59
Two Identical Groups
35
Tell her
the
brands
Do not
tell her
thebrands
-
8/10/2019 Chocolate Di
36/59
W d f b d f h l t i th i t
-
8/10/2019 Chocolate Di
37/59
We used four brands of chocolate in the experiment.
Foreign-Branded Milk Chocolate/Producedin China (represented by Dove from Mars)
Imported Truffles(represented by Belgian truffles)
Imported Milk Chocolate
(represented by Cte d'Or)
Domestic Milk Chocolate(represented by LeConte)
Th th b d f ilk h l t h i il b i
-
8/10/2019 Chocolate Di
38/59
The three brands of milk chocolate have similar basic
ingredients (in terms of percentage of cocoa mass,
cocoa butter, milk etc.).
However, interviews after the experiment suggest thatdomestic brand has an unpleasant taste of milk that the
foreign brands (FDI & imported) do not have, while the
imported brand is a bit too sweet despite of the strong
and nice flavor of cocoa.
-
8/10/2019 Chocolate Di
39/59
Truffles are more different, and
more exotic to Chinese consumers.
Truffles contain more creamand they are dusted in cocoa
powder (using different
production technology from milk
chocolate). Truffles have a different
texture (softer) and taste (bitter
coat made of cocoa powder).
It is advertised as one of the most
prestigious types of chocolate in
China.
In the experiment, there is only one difference between
-
8/10/2019 Chocolate Di
40/59
YES: Information about
the chocolate brands
Taste the
chocolate samples
Rank the
chocolate samples
Taste the
chocolate samples
Rank the
chocolate samples
Short survey Short survey
Non-blind Group Blind Group
In the experiment, there is only one difference between
the two groups:The non-blind participants received information about the
brands before tasting; while the blind participants did not.
NO: Information about
the chocolate brands
-
8/10/2019 Chocolate Di
41/59
On the plate for the non-blind group, there were stickers
on the edge indicating the chocolate brands. The non-
blind participants were instructed to read the stickers
before tasting.
Blind Group Non-blind Group
Brand names on stickers:
LeConte (Domestic Brand)Dove (Foreign Branded/Produced in China)
Cote dOr (Imported from Belgium)
Truffle (Imported from Belgium)
No brand information
-
8/10/2019 Chocolate Di
42/59
YES: Information about
the chocolate brands
Taste the
chocolate samples
Rank the
chocolate samples
Taste the
chocolate samples
Rank the
chocolate samples
Short survey Short survey
Participants of both groups were then asked to taste the
chocolate samples from the plate.
Non-blind Group Blind Group
NO: Information about
the chocolate brands
P ti i t ld t th h l t l i
-
8/10/2019 Chocolate Di
43/59
Participants could not see the chocolate samples in
either group.(The chocolate samples were served on a white paper plate with the
chocolates covered)
Af i h i i k d k h
-
8/10/2019 Chocolate Di
44/59
YES: Information aboutthe chocolate brands
Taste the
chocolate samples
Rank the
chocolate samples
Taste the
chocolate samples
Rank the
chocolate samples
Short survey Short survey
After tasting, the participants were asked to rank the
chocolate samples from the best tasting to the worst
tasting.
Non-blind Group Blind Group
NO: Information aboutthe chocolate brands
-
8/10/2019 Chocolate Di
45/59
Results
-
8/10/2019 Chocolate Di
46/59
-
8/10/2019 Chocolate Di
47/59
Th I t d Milk Ch l t i k d hi h b
-
8/10/2019 Chocolate Di
48/59
The Imported Milk Chocolate is ranked higher by
participants that were in the non-blind condition
than those in the blind condition. The difference
is significant at 10% level.
0.35 0.35
0.39
0.23
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
Rank as best tasting
chocolate
Rank as worst tasting
chocolate
Percentageofranking
Non-blind Non-blindBlind Blind
-
8/10/2019 Chocolate Di
49/59
In summary the ranking of Chinese Domestic Milk
-
8/10/2019 Chocolate Di
50/59
In summary, the ranking of Chinese Domestic MilkChocolate is lower for the non-blind participants than blindparticipants; In contrast, the ranking of Imported Truffles ishigher for the non-blind participants.
0.22
0.4
0.17
0.55
0
0.1
0.2
0.3
0.4
0.5
0.6
Rank as best
tasting
chocolate
Rank as worst
tasting
chocolate
Pe
rcentageofran
king
Non-
blindBlind Non-
blindBlind
0.2
0.370.34
0.23
00.05
0.1
0.15
0.2
0.250.3
0.35
0.4
Rank as best
tasting
chocolate
Rank as worst
tasting
chocolate
Pe
rcentageofran
king
BlindNon-
blindBlind
Non-
blind
Chinese Domestic Milk
ChocolateImported Truffle
-
8/10/2019 Chocolate Di
51/59
-
8/10/2019 Chocolate Di
52/59
As mentioned before, our goal of study is to test how
different types of information of brands affect the
tastes and preferences of consumers.
However, it is not clear so far that whether there is preference
change towards foreign-branded milk chocolate/produced in China
relative to other brands.
It is not clear either that whether there is any significant
difference between the two imported brands. Are truffles more
likely to be preferred over milk chocolate when participants are
informed?
Therefore, we conduct pair-wise comparisons to answer
these questions.
In doing so we examine whether the brand information changed
-
8/10/2019 Chocolate Di
53/59
In doing so, we examine whether the brand information changed
the probability that one brand of chocolate was ranked higher
than another brand. We compare four pairs of chocolate brands:
We estimate the model:
Brand B is ranked higher than brand A (1=yes; 0=no)
= Condition (1=non-blind; 0=blind) + Control variables (includingparticipant characteristics, experiment location and tasting order of each chocolate)
Chocolate brand A Chocolate brand B
1 Chinese Domestic Milk
Chocolate
Foreign Branded Milk
Chocolate/Produced in China
2 Chinese Domestic Milk
Chocolate
Imported Milk Chocolate
3 Foreign Branded Milk
Chocolate/Produced in China
Imported Milk Chocolate
4 Imported Milk Chocolate Imported Truffles
The pair-wise comparisons demonstrated a higher
-
8/10/2019 Chocolate Di
54/59
Foreign Branded Milk
Chocolate/Producedin China > Chinese
Domestic Milk
Chocolate (1=yes;
0=no)
Imported Milk
Chocolate >Chinese
Domestic Milk
Chocolate
(1=yes; 0=no)
Imported Milk
Chocolate >
Foreign BrandedMilk
Chocolate/Produce
d in China (1=yes;
0=no)
Imported
Truffles >Imported Milk
Chocolate
(1=yes; 0=no)
(1) (2) (3) (4)
[1] Condition(1=non-blind
condition;
0=blind
condition)
0.08 0.11* 0.11* 0.28**
(0.06) (0.06) (0.07) (0.13)
[2]
Control
variablesa Yes Yes Yes Yes
The pair-wise comparisons demonstrated a higher
preference of Chinese consumers toward imported brands.
The Imported Milk Chocolate was more likely to be
preferred in the non-blind condition than the blind condition
over both the Chinese Domestic Milk Chocolate and the Foreign
Branded Milk Chocolate/Produced in China by 11%.
-
8/10/2019 Chocolate Di
55/59
Conclusion
-
8/10/2019 Chocolate Di
56/59
Conclusion
Brand information does influence Chinese consumers
preferences for chocolate.
Chinese consumers have higher preferences for the
imported brands (Imported Milk Chocolate and Imported Truffle)
than the domestic brand (Chinese Domestic Milk Chocolate).
They also have higher preferences for the imported brandsthan the foreign brand which is produced in China (Foreign
Branded Milk Chocolate/Produced in China) when they are
informed about the brands.
As discussed in the introduction, the reason for the higherpreference for the imported brands is likely to be the image of
authenticity, high quality or the social and symbolic value that
Chinese consumers associate with the brands.
-
8/10/2019 Chocolate Di
57/59
The number of Chinachocolate fans are
growing, year by year.
The growth hasaccelerated in recent
years.
Growth potentialis huge.
-
8/10/2019 Chocolate Di
58/59
Who will get the largest bite of the chocolate market? FDI Imported Domestic?
What type of chocolate will consumers like in the future? Can preferences be changed? What form of branding will be successful?
More experiments need to be conducted to
-
8/10/2019 Chocolate Di
59/59
More experiments need to be conducted tounderstand the mind and belly of todays and
tomorrows chocolate consumer