Overcoming Informal Trade Barriers Among Japanese Intermediaries

Kenneth C. Gehrt, San Jose State UniversityKenneth C. Gehrt, San Jose State UniversityTomoaki Sakano, Waseda UniversityTomoaki Sakano, Waseda UniversityNaoto Onzo, Waseda UniversityNaoto Onzo, Waseda University

IntroductionIntroduction Japan, an important export

target for U.S.

U.S. the largest source of Japan’s fruit imports.

U.S. facing growing competition from Chile, Spain, South Africa, etc. (World Horticultural Trade and U.S. Export Opportunities 2005).

Japan remains a financially attractive target for U.S. exporters.

IntroductionIntroduction

Notable progress in overcoming formal trade barriers.

Incremental gains may depend on understanding informal trade barriers (Phelan 1996).

Purpose of StudyPurpose of Study Study attempts to assess informal trade barriers in the form of

attitudinal barriers… Japanese distributors’ attitudes towards U.S. fruit… Impact of Japanese distributors’ attitudes on behavioral

intentions and behavior.

Literature ReviewLiterature Review Attitude a learned predisposition to react consistently, favorably or

unfavorably, toward a stimulus object (Blackwell, Miniard, and Engel 2004).

Fishbein model widely tested to predict behavioral intention among consumers.

Model successfully used in context of consumer perceptions of agricultural products such as meat, milk, and other products (Hu 2006; Sapp and Harrod 1989; Zey and McIntosh 1992).

Limited use of model for distributor attitudes toward product..

Literature ReviewLiterature Review Japanese distribution system

characterized as tight, vertical cooperative networks…

Relationships based upon long-term trust and loyalty (Nojima 2003).

Japanese retailers sometimes reluctant to establish relationships with foreign suppliers due to risk associated with Western exporters (Childs and Batista 1994).

Japan’s Large Retail Store laws have lead to an increase in large stores including supermarkets (Larke 2006).

Methods/QuestionnaireMethods/Questionnaire

Process to identify salient attributes for distributors via…

Focus group/distributors (Tsukiji Market).

Focus group/consumers (due to consumer oriented concerns articulated by distributors)

Methods/QuestionnaireMethods/Questionnaire

Market visit/wholesale

Methods/QuestionnaireMethods/Questionnaire

Market visit/retail

Methods/Methods/QuestionnaireQuestionnaire Personal interviews

with distributors • Ito Yokkado VPs, • Dole Japan Marketing VP, • U.S. Embassy agricultural

attaches, • Japanese liaison for U.S. trade

association for fruit, • Supermarket Store Managers

(Summit, Jusco, Super Yoshino).

21 channel-related, 19 consumer-related items

e=attribute importance; b=extent to which U.S. fruit possess attribute

Sample

• 289 of 1000 returned

• Matched geographic quota

• Slight overrepresentation of distributors with high level position

• Slight overrepresentation of distributors from large company

• 111 retailers, 116 wholesalers

Methods/SampleMethods/Sample

Data AnalysisData Analysis

Identification of attitudinal themes for distributors (SPSS/Exploratory Factor Analysis).

Development of measurement model (LISREL/Confirmatory Factor Analysis).

Assessment of structural model (LISREL/Structural Equations Modeling)..

Identification of Salient Attributes (Exploratory FA)

• Vendor performance

• Ordering process

• Product healthfulness

• Financial conditions

ResultsResults

CONFIRMATORY FACTOR ANALYSISCONSTRUCT COEFFICIENT ALPHA STANDARDIZED LOADINGS

VENDOR PERFORMANCE 0.84

Provides reliable supply 0.82

Flexible, responds to my needs 0.72

Provides stable quality 0.73

Provides products with good T/O 0.81

PRODUCT HEALTHFUL 0.77

Safe from post-harvest residue 0.69

Organically grown 0.70

Fits into a desirable lifestyle 0.78

ORDERING PROCESS 0.91

Easy to order 0.99

Easy to reorder 0.92

Good conditions of sale 0.78

DISTRIBUTION INTENTION 0.92

Likelihood to purchase 0.94

Extent of purchase intention 0.95

Purchase intention at higher price 0.77

Purchase intention at lower price 0.81

DISTRIBUTION BEHAVIOR 0.91

Past experience with product 0.86

Ease of past purchase 0.97

Chi-square = 117.42 Degrees of freedom = 94 p = 0.05

GFI NFI RMSEA

0.92 0.97 0.038

STANDARDIZED STRUCTURAL EQUATIONS MODEL WITH MEASUREMENT MODEL CONSTRAINED

INDEPENDENT LATENT VARIABLE

PURCHASE INTENTION PURCHASE BEHAVIOR

VENDOR PERFORMANCE 0.59

(t-value = 5.48)

PRODUCT HEALTHFULNESS -0.19

(t-value = -2.35)

ORDER PROCESS 0.20

(t-value = 2.24)

PURCHASE INTENTION 0.92

(t-value = 27.18)

Chi-square = 178.92 Degrees of freedom = 124 P = 0.00092

GFI NFI RMSEA

0.91 0.97 0.043

DiscussionDiscussion Strong relationship between the attitudes of distributors and

their distribution intentions

and strong relationship between distribution intentions and distribution behavior.

Thus, there is substantial efficacy in taking measures to affect Japanese distributors’ attitudes toward U.S. fruit.

DiscussionDiscussion Vendor Performance

• Reliable supply• Stable quality • Exporter must be willing to work

with Japanese distributors Ordering Process

• Streamline ordering and reordering

• Responsiveness to customer in terms of conditions of sale

Product Healthfulness• U.S. exporting/manufacturing

must undergo substantial change• Japanese consumers AND

distributors acutely aware of health/product safety issues

• Organic, freshness, elimination of chemical residue

• Qualitative data—processed, thick skinned (citrus), photo of grower.

DiscussionDiscussion Attitudinal barriers that did not emerge

• Financial issues

• Product appearance issues

Limitations/Future ResearchLimitations/Future Research

Additional products• Triangulate critical attitudinal dimensions/barriers• Fruit/product specific versus more generalizable dimensions

Additional countries• Generalizability

Specific intermediary types• Wholesaler/ retailer; large/small; position in company

Longitudinal• Extent to which attitudinal barriers are subject to change due

to Japanese distributors• Extent to which attitudinal barriers are subject to change due

to U.S. exporters

Arigatoo Arigatoo GozaimasuGozaimasu

!!

Shitsumon ga arimasu ka?Shitsumon ga arimasu ka?