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Imported Beer in the Hong Kong Market

Authors:
  • adjunct College of Management Mahidol University (CMMU)

Abstract

Argues that successful exporting to East Asian markets requires a good understanding of local conditions. One important issue is how consumers decide on products and how they view products from various countries. Hong Kong is representative of newly affluent markets which are growing throughout East Asia. In the beer market, Hong Kong consumers choose brands based on quality characteristics, especially taste. Other important aspects include the beer's image and the country-of-origin. Brand loyalty is strong. Price is relatively unimportant to most consumers. Many beer drinkers believe that German beer is the best, though they may not always buy beer from Germany.
Introduction
East Asia currently presents some of the most attractive
markets in the world for food exporters. Disposable
incomes are rising rapidly, and demand for high quality
food imports is soaring. The Hong Kong beer market
provides a good case study of perceptions towards
Western food products in one of these rapidly growing,
newly affluent markets of East Asia. As living standards
rise, people have begun drinking more imported beer.
While the overall beer market has been flat, as in many
other countries, imports have increased sharply, taking
market share from local brewers.
This discussion presents an overview of the Hong Kong
beer market. It reviews import trends, which show that
very few countries actually account for most of the
dramatic growth in beer imports into Hong Kong. Then
some results from two surveys are presented, which show
that people choose beer mainly based on product quality
or image criteria. Price has become relatively un-
important to many Hong Kong consumers. Finally, in the
evaluation process, people clearly associate German beer
with top quality. Information from interviews with
supermarket managers in Hong Kong also confirms
import statistics and survey data.
Relevant Country-of-origin Work
There is a scattering of theoretical work which might be
useful in explaining the increasing share of premium
imported beers in Hong Kong. Very few country-of-origin
studies have been carried out on food products. Perhaps
Gluckman[1] is the most relevant, but he asserts that
country-of-origin is not an explicit consideration among
European consumers when they choose wine. We show
below that it is important to some Hong Kong consumers
in beer choice. Sadafumi[2], in a study covering a wide
variety of products, found that colas had an American
image among Japanese consumers. But he did not
address the issue of whether consumers thought that
American cola was better or worse than other colas.
For other kinds of low-tech consumer non-durables,
Western consumers generally do not rate quality of
products from newly industrializing countries (NIC) or
developing countries very highly. For example, apparel is
rated more highly if it comes from the West or Japan[3-6].
Research also shows that better educated, higher income
consumers tend to have more favourable views towards
imports[3,7-11]; but there are also conflicting results[12].
These tendencies, if transferable to non-Western
consumers and to beer, would probably indicate that
Western beers would be rated more highly by Hong Kong
consumers than local or other Asian beers. It would
suggest that Hong Kong people of higher socio-economic
status would be more receptive to imported beers than
those of lower status. In fact, the evidence presented
below does support these views. However, it would be
risky to assume these things without direct evidence
because knowledge about consumers and products
cannot always be directly transferred to other countries
and products.
Managers could be taking large risks in assuming that
perceptions in one country towards imported products
are shared by consumers elsewhere. The few studies that
compare country-of-origin effects across different
countries show that they can vary[13]. Similarly,
perceptions towards one particular product may differ
from perceptions towards another one. Much research
shows that country-of-origin perceptions seem to depend
heavily on product class[4,14,15,16].
Of course, sometimes general perceptions are similar
across countries and products, as seems to be the case for
beer in Hong Kong. But it is better to know this for certain
than to surmise, since we do know that sometimes it is
not true. Also, general perceptions might not be of use to
all marketing managers selling Western beers in Hong
Kong. Most of the image of higher quality is tied
specifically to German beer, not to Western beer in
general. Marketing managers take on much less risk
when they have solid evidence about the Hong Kong beer
10 BRITISH FOOD JOURNAL 96,1
Hong Kong is representative of newly affluent
markets developing throughout East Asia and as
such can provide valuable insight into new
markets.
Imported Beer
in the Hong
Kong Market
British Food Journal, Vol. 96 No. 1, 1994, pp. 10-18
© MCB University Press Limited, 0007-070X
Mark W. Speece, Yukiko Kawahara
and Stella L.M. So
Received 27 July 1993
Accepted 20 November 1993
market, rather than making guesses from previous
research conducted in other countries on other products.
The Beer Market in Hong Kong
Hong Kong beer consumption grew vigorously during
the 1970s, mainly owing to the extensive import of labour
from mainland China. By the 1980s, economic success
had made Hong Kong people more educated and affluent,
and the ratio of blue-collar workers dropped. The beer
market has seen slow or no growth recently, which is
characteristic of several other South-East Asian markets
in recent years[17,18].
Per capita consumption in Hong Kong is relatively low by
Western standards, but leads the non-Western areas of
South-East Asia (Table I). Asian Retailer[18] put average
consumption at about 29. 8 litres in 1992. Other estimates
for 1990 range from 28 to 35 litres[19,20], and per capita
consumption is probably declining slightly[21]. Overall
average bi-weekly spending on beer was just over HK$11
in 1991[22], which represents roughly 25 to 30 litres per
year.
There are over 40 different brands of beer available in
Hong Kong at present. The major players can be divided
roughly into the categories of local, European, American,
Asian, and Chinese beers. San Miguel, though a
Philippines company, is brewed in Hong Kong. It has been
so well established for the last 40 years that it is widely
perceived as a local beer. San Miguel held approximately
60 to 65 per cent of the total market in 1990[20,23].
San Miguel is generally perceived as a “cheap” brand, and
it has slowly but steadily lost market share over the past
decades as Hong Kong has become more affluent. In 1980
San Miguel also began brewing the German Löwenbräu
under licence, and in 1989 signed licence and production
agreements with the Japanese brewer, Kirin. Both were
introduced to defend San Miguel from imports and from
Carlsberg[19,20,21,23,24]. Löwenbräu is still generally
viewed as German, not local, and Kirin is certainly
viewed as Japanese.
San Miguel’s closest competitor is the Danish Carlsberg,
which operates breweries in Malaysia and Hong Kong,
and supplies local markets from Hong Kong. Despite local
production, Carlsberg has not acquired a strong “local” or
“cheap” image. It is considered to be an up-market beer,
and has somewhat of an image for being a drink for
expatriates. Despite this, or perhaps because of it, most of
Carlsberg’s consumers are local Chinese. On the strength
of its strong advertising campaign, it accounted for up to
19 per cent of beer sales by 1990, a rise from under 3 per
cent in 1981[20,21,23].
Import Trends
The other significant development in the market has been
the recent increasing preference for imported beers, as is
happening in many parts of South-East Asia[17,18]. One
of the main beneficiaries of these trends has been Dutch
beers. Since 1985, imported beers have increased by HK$
243 million. During the same time, Dutch beer exports to
Hong Kong have risen from almost nothing to over
HK$109 million, fully 45 per cent of the increase in
imports. In 1992, Dutch beers accounted for over 25 per
cent of imports (Table II).
The increasing popularity of Heineken has driven much
of the spectacular growth in imports from Holland. But
other Dutch brands also have carved out strong niche
markets. In particular, Grolsch, which entered the market
in 1990, has been quite successful as a very high-end beer.
The Dutch beers have not really tried to tie their image to
Holland specifically. Many people think they are German,
and they seem to have taken advantage of a general
perception in Hong Kong that Germany produces the best
beer.
German brands enjoy a strong high quality image.
Despite this, imports from Germany began to decline in
the mid-1980s. Löwenbräu from San Miguel had become
available, and Korean Blue Girl appeared. Its label
suggests that it is German, and does not identify the
Korean origin. In addition, local consumers often think
many other northern European beers, such as Heineken
and Carlsberg, are German. Table III illustrates some of
this confusion. In the past few years, German beers have
reversed declining sales. Several, such as Beck’s, Dab, and
Spaten, are becoming important in up-scale and
expatriate market niches.
US beers have long been very strong in the import market
but their performance has not been very consistent. Pabst
Blue Ribbon is probably most widely distributed, but its
market share has declined very substantially from the
approximately 10 per cent it enjoyed in the 1970s. Most of
the strong US brands compete in the market on a price
basis, and can often be found at even lower prices than
local beers. A few up-market US beers have begun to
11
IMPORTED BEER IN THE HONG KONG MARKET
New Zealand 135.5
Australia 115.1
Hong Kong 29.8
Taiwan 23.1
Singapore 20.7
Philippines 15.1
Malaysia 5.7
Thailand 2.6
Source: [18, pp. 34-7].
Table I. South-East Asia Annual Beer Consumption 1992
(Litres)
appear in Hong Kong, but they have not made much
impact yet.
Chinese imports have fluctuated over the past six years
but the long-term trend is steady maintenance of sales.
The best known brand is Tsing Tao, from a brewery
originally founded by Germans, but taken over by the
China Beer Company after the Communist victory in
1949. Tsing Tao was once a major challenger to San
Miguel, declined, and is now enjoying some modest
growth again. However, it suffers from poor retail
penetration and lack-lustre marketing.
Most notable among other Asian beers are those from
Korea, which have had very strong growth over the past
five years. Nearly all Korean beer in Hong Kong is the
brand Blue Girl, which positions itself as German.
Japanese beer imports had shown strong growth during
the 1980s but imports declined when many customers
began buying San Miguel’s locally brewed Kirin. Only
recently have imported Japanese beers begun to recover.
Malaysian beers have posted strong gains over the past
five years, as have beers from several other countries.
However, as Table III clearly shows, beers from Holland,
the USA, Korea, and China are still the main sources of
imports.
Sample Characteristics
Since imports have made such dramatic gains over the
past decade, we wanted to investigate how local people in
Hong Kong perceive and buy beer. Two surveys were
conducted. One was answered by 132 Chinese Hong Kong
residents. Respondents were approached for intercept
interviews in the industrial districts of Sham Po Kong and
Kwun Tong, in the commercial district of Tsim Sha Tsui,
and on the campus of one of Hong Kong’s universities. To
ensure that all respondents were beer consumers and had
at least some experience in actually choosing beers, re-
spondents were screened to include only those who
consumed at least two cans of beer per month.
12 BRITISH FOOD JOURNAL 96,1
Purchase Identify brand as coming from:
Brand most (n) Hong Kong Germany Holland China USA Other
San Miguel 102 90 1 11
Carlsberg 83 39 4 1 39
Blue Ribbon 24 1 6 4 13
Tsing Tao 15 14 1
Blue Girl 14 7 1 2 4
Heineken 9 4 1 4
Löwenbräu 3 2 1
Table III. Correct Country Identification by Consumers Who Purchase Brand First or Second Most Often
Country 1992 1991 1990 1989 1988 1987
USA 90.46 164.32 100.77 71.89 22.97 89.71
Holland 109.71 34.16 7.54 0.71 0.05 0.00
Germany 7.06 5.79 4.36 4.87 10.30 17.89
Other Europe 5.87 3.52 3.27 2.61 2.59 1.54
Korea 79.19 57.00 39.62 29.84 20.01 2.53
China 44.40 37.58 34.38 43.97 41.11 30.81
Malaysia 22.76 16.57 19.22 5.94 0.00 0.09
Japan 15.68 10.52 10.13 14.41 16.35 11.70
Singapore 4.76 5.68 3.61 13.34 11.12 9.58
Australia 8.61 9.39 4.91 4.43 2.75 2.25
Total 410.63 364.57 229.53 194.37 129.63 167.41
Note: Figures for countries do not sum to total because countries supplying smaller volumes were omitted. 1992 figures
are for January-November only.
Source: [25].
Table II. Hong Kong Beer Imports by Value (HK$ million)
Because women consume relatively little alcohol in Hong
Kong, this screening resulted in only ten women in the
sample of 132. Blue-collar workers constituted one-third
of the sample, compared with about 47 per cent in the
population (Table IV summarizes population statistics).
White-collar/clerical made up 30 per cent. Professional/
upper level managerial accounted for 14 per cent.
Generally, education and income correlated very closely
with these occupational groups. The remaining
respondents were university students. Students are an
important promotional target, and we wanted to see if
they had distinctly different patterns than others.
Among these respondents (who are all beer drinkers), the
blue-collar respondents reported drinking the most beer
per month, on average. But even their average 12. 5
bottles/cans per month does not represent particularly
high consumption. Professional/upper management
people reported 9. 4 bottles/cans per month, white-collar/
clerical 7.9, and students only 4.1, on average. These
figures are comparable to the overall average annual per
capita consumption of 29.8 litres noted above, once we
account for the fact that light drinkers were screened out
of the sample. (Assume an average bottle is about one-
third of a litre; then blue-collar, for example, have
reported about 50 litres per year in our sample. White-
collar figures convert to about 31. 5 litres per year. )
The second sample consisted of 188 respondents who
were approached as they left supermarkets after
shopping. The supermarkets were scattered throughout
Hong Kong, Kowloon, and New Territories. They
included the major local chain supermarkets, Japanese
supermarkets, and the small speciality chains, which are
the three main types accounting for the majority of
packaged food sales in Hong Kong. No attempt was made
in this survey to screen out non-drinkers. As more women
tend to do grocery shopping, about 70 per cent of this
sample was women.
This survey aimed at getting more middle to upper
income people, since they are more likely to buy imported
beer. As a result, only about 15 per cent of the sample had
monthly household incomes under HK$10,000, compared
with about 50 per cent of households according to the
1991 census (see Table IV). Thirty-nine per cent had
incomes between HK$10,000 and HK$20,000, and 46 per
cent had household incomes over HK$20,000. Though the
correspondence is not perfect, these income categories in
this survey roughly match the occupational categories of
the first survey.
Beer Choice Criteria
Respondents in the first survey were asked to rate six
criteria in choosing beer. On average, all four
occupational groups ranked taste among the most
important. However, taste stands out significantly above
the second criteria only for professional and managerial
respondents (Table V). Comparing across groups, upper
management respondents rated taste higher in
importance than other groups, while students rated it less
important (Table VI).
Brand name was also quite important among all groups.
It ranked first among blue-collar workers, though not
significantly different from the rating for taste. Brand
name received higher ratings on average among blue
collar workers than among other groups. White-collar
and professional/managerial respondents viewed the
importance similarly, though the standing within their
ranking of criteria differed slightly. Students thought
brand name was significantly less important than other
groups did, and significantly less important than taste
and price within their own criteria rankings (Tables V
and VI).
Neither image nor price ranked highly to any group but
students. Professional/managerial people ranked image
fourth, though not statistically below brand name. Price
was a distant fifth, rated substantially less important by
these people than the top four criteria. Relative to other
groups, image was more important and price was much
less important. White-collar/clerical respondents ranked
price and image nearly equally, below (though not
statistically) the third place country-of-brand. Blue-collar
respondents similarly ranked price fourth, slightly below
country-of-brand. Image was least important to them
among the four groups. With students, price tied taste for
first most important, and image edged out brand name to
come in third.
13
IMPORTED BEER IN THE HONG KONG MARKET
Percentage of Percentage in
Job categories work force first survey
Blue-collar of various types 47.4 33.3
Clerks, service workers, sales 29.1 30.3
Managers/administrators/
professionals 23.2 14.4
Students NA 22.0
Monthly household income Percentage of Percentage in
(HK$) households second survey
Below 10,000 50.2 15.3
10,000-19,999 31.0 38.8
Over 20,000 18.8 45.9
Note: Job categories do not sum to 100 because a few
jobs (such as military) were not classified in any of
these categories by the source.
Source: [26].
Table IV. Occupational Categories and Household Incomes:
Hong Kong 1991 vs. Survey Samples
Ettenson and Gaeth[27] pointed out that, in the age of
“hybrid” products, consumers view country-of-brand
separately from country-of-manufacture. Country-of-
brand and country-of-production were both included to
separate perceptions of workmanship (labour) from
views on managerial expertise or technical know-how
(management). Country-of-brand ranked second to
professional/managerial respondents. Ratings were
significantly higher than for blue- and white-collar, who
both ranked country-of-brand third, with similar ratings.
With white-collar/clerical respondents, though, this
criteria was not very far below the top two, while, for
blue-collar, country-of-brand was significantly less
important than taste and brand name. Students rated
country-of-brand much lower than any other group. All
four occupational groups ranked country-of-production
(significantly) last in importance among the six criteria.
The second survey asked respondents to rank only the
top most important criteria out of ten. Again, taste was
considered most important more often than any other
criterion, and the majority of respondents in all income
levels ranked it among the top three (Table VII). This
survey, though, showed that there is also considerable
brand loyalty (or simply habit). Nearly half of the sample
said that just buying their usual brand was one of the top
three things they considered when shopping. All other
14 BRITISH FOOD JOURNAL 96,1
Image Taste Cbrand Bname Cprod Price
Grand mean 4.500 5.530 4.765 5.220 2.886 4.598
Upper management 0.50 0.57 0.76 –0.11 –0.15 –1.07
White-collar 0.10 –0.11 0.13 –0.02 0.16 0.08
Blue-collar –0.32 0.11 –0.02 0.62 0.02 0.04
Student 0.02 –0.39 –0.66 –0.84 –0.16 0.54
Significance 0.015 0.001 0.000 0.000 0.354 0.000
Notes: Significance = significance of F in MANOVA of product attributes by occupational category.
For means, 1 = not important at all, 7 = very important.
Image = image of the beer Bname = brand name
Taste = taste of the beer Cprod = country of production
Cbrand = country of brand Price = price
Table VI. Deviations from Overall Mean Criteria Rating by Occupational Category
Criteria n Mean SD Criteria n Mean SD
Professional/upper management White-collar/clerical
Taste 19 6.105 0.658 Taste 40 5.425 1.010
Cbrand 19 5.526 0.612 Bname 40 5.200 0.823
Bname 19 5.105 0.994 Cbrand 40 4.900 0.841
Image 19 5.000 0.817 Price 40 4.675 0.888
Price 19 3.526 1.124 Image 40 4.600 1.128
Cprod 19 2.737 0.806 Cprod 40 3.050 0.959
Blue-collar Students
Bname 44 5.841 0.987 Taste 29 5.138 0.789
Taste 44 5.636 0.750 Price 29 5.138 0.833
Cbrand 44 4.750 0.866 Image 29 4.517 0.829
Price 44 4.636 0.718 Bname 29 4.379 0.820
Image 44 4.182 0.870 Cbrand 29 4.103 0.817
Cprod 44 2.909 0.802 Cprod 29 2.724 0.702
Notes: att1 indicates attributes 1 and 2 are not significantly
att2 different at 90 per cent confidence.
For key to abbreviations see Table VI.
Table V. Mean Rankings of Six Beer Choice Criteria by Occupational Group
criteria were substantially less important than taste and
brand loyalty/habit.
Below these top two criteria, image of the brand, alcohol
content, value (for the price, the quality is quite good), and
friends (most of my friends drink this brand) were most
often considered important. In terms of percentage of
respondents who picked one of these four criteria among
the top ones, these four came out in third through to sixth
place for mid- and higher income respondents. Among
lower income respondents, price came in third, followed
by these four criteria. Image, alcohol, value, and friends
were also generally most likely to receive a first place
ranking if it did not go to taste or usually buy.
As in the first survey, price was not often among the most
cited criteria of importance. But among respondents with
monthly income levels under HK$10,000, price was
ranked first more often (by 11 per cent) than any other
criteria apart from taste and usually buy. Very few people
with higher incomes said that price was most important
to them, and fewer ranked it among the top three than for
the lower income respondents.
Quality of Beer from Specific Countries
Respondents in the first survey were asked to rate the
quality of beer from Hong Kong, China, the USA, and
Germany on a seven-point scale from “very poor” to “very
good”. Overall, they rated German beer top quality,
followed by US beer. Beer from Hong Kong generally
ranked third. The overall patterns conceal some
interesting differences by occupational group.
Professional/managerial respondents saw the strongest
differences in quality levels among beers from different
countries. To them, German beer stood out strongly in top
place, while US beer held second place convincingly
(Table VIII).
German beer remained in first place to the other groups,
but not significantly above the second place choice. This
second place choice was US beer for white-collar/clerical
respondents and students, and these two groups viewed
the top two beers as significantly better quality than beer
from either China or Hong Kong. Blue-collar respondents,
though, saw virtually no differences in quality among
beers from the USA, China, and Hong Kong.
Students and white-collar/clerical both ranked Chinese
beer last, though the difference from Hong Kong beer was
not significant to white-collar respondents. Students had
a very poor perception of Chinese beer quality; their
ratings of Chinese beer made it the only beer in any of the
four groups to average less than a neutral four on the
seven-point quality scale. On the other hand, professional
respondents ranked Chinese beer third. Its overall ratings
were not very high, but significantly higher than for
Hong Kong beer. These people gave Hong Kong beer its
lowest ratings of any of the groups.
In the second survey, respondents were asked only to
name the one country which produces the best quality
15
IMPORTED BEER IN THE HONG KONG MARKET
Monthly income (HK$):
Below 10,000 (n = 28) 10,000-19,999 (n = 71) Over 20,000 (n = 84)
First Top three First Top three First Top three
Taste 29 57 Taste 25 59 Taste 38 65
Usual 25 39 Usual 23 48 Usual 24 49
Price 11 25 Image 4 37 Value 7 39
Alcohol 7 25 Alcohol 13 32 Image 13 35
Value 4 25 Value 6 31 Friends 12 33
Image 7 21 Friends 6 30 Alcohol 11 33
Friends 0 21 Container 3 23 Container 6 20
Reputable 0 18 Reputable 3 21 Reputable 8 19
Container 4 14 Refresh 1 18 Refresh 2 19
Refresh 0 14 Price 4 17 Price 1 18
Notes: First = percentage who rank first.
Top three = percentage who rank among the three most important.
Attributes are ordered by percentage who ranked among top three criteria.
Taste = best taste Friends = most of my friends drink this brand
Usual = just buy the same as usual Value = for the price, the quality is quite good
Price = lowest price Alcohol = alcohol content
Container = most convenient container Image = image of the brand
Reputable = very reputable brand/country Refresh = most refreshing
Table VII. Most Important Criteria for Beer Choice by Income Level (Percentages)
beer. Overall, 45 per cent named Germany, while 33 per
cent believed the top quality beer was produced locally in
Hong Kong. Among other countries, only China, the UK,
and the USA got more than one or two votes (Table IX).
At lower income levels, people were equally divided on
whether the best beer came from Germany or Hong Kong.
As income increased, the percentage naming German
beer increased. Over half of people with above HK$20,000
incomes said that Germany produced the highest quality
beer. The percentage choosing Hong Kong beer did not
decline, though. Votes for German beer were drawn from
the UK and the USA.
Since both surveys confirm that most people think
German beer is best, one might wonder why German beer
does not dominate the market. One reason, as noted
above, is that many people think almost any European
beer is German. For example, Holland is now the main
source of imported European beer, and most of this is
Heineken. But Table III shows that only one in nine
people who drink Heineken as their top choice can
correctly identify it as Dutch. Four of the nine think it is
German.
A second reason, also noted above, is that both
Löwenbräu (brewed locally by San Miguel) and Blue Girl
(imported from Korea) are positioned as German beers.
Table III also shows that half of the 14 respondents who
choose Blue Girl first think it is from Germany. One-third
who choose Löwenbräu think it is from Germany (but this
sub-sample is really too small to take very seriously).
Even more surprising, one-quarter of those who choose
Blue Ribbon, a US beer, think it is from Germany. Blue
Ribbon makes no attempt at all to portray itself as
German.
16 BRITISH FOOD JOURNAL 96,1
Individual 95 per cent confidence intervals for mean
Level n Mean SD based on pooled standard deviation
Professional/upper management
Germany 19 5.790 0.631 (–—
*
—–)
USA 19 5.053 0.848 (–—
*
—–)
China 19 4.526 1.073 (–—
*
—–)
HK 19 4.000 0.817 (–—
*
—–)
White-collar/clerical
Germany 40 5.350 0.736 (–—
*
—–)
USA 40 5.175 0.747 (–—
*
—–)
HK 40 4.575 0.747 (–—
*
—–)
China 40 4.350 1.075 (–—
*
—–)
Blue-collar
Germany 44 5.046 0.776 (–—
*
—–)
HK 44 4.864 0.852 (–—
*
—–)
China 44 4.864 1.002 (–—
*
—–)
USA 44 4.818 0.691 (–—
*
—–)
Students
Germany 29 5.207 0.620 (–—
*
—–)
USA 29 5.138 0.581 (–—
*
—–)
HK 29 4.690 0.761 (–—
*
—–)
China 29 3.862 0.833 (–—
*
—–)
Pooled SD = 0.8140 4.00 4.80 5.60 6.40
Note: 1 = very poor, 7 = very good.
Table VIII. Mean Rankings of Quality of Beer from Four Countries by Occupational Group
Monthly income (HK$):
Percentage Below 10,000- Over
choosing 10,000 19,999 20,000
Germany 31.8 42.9 52.2
Hong Kong 31.8 38.1 29.0
China 4.5 4.8 5.8
USA 9.1 4.8 1.4
UK 9.1 3.2 4.3
Other 13.6 6.3 7.2
n 22 63 69
Note: Respondents chose only a single country. Column
sums may not equal 100 exactly because of rounding.
Table IX. Country Which Produces Highest Quality Beer by
Income Level
It is evident that, because of confusion about countries in
Europe, or confusion about where beers are from, a
substantial number of people who are buying other beers
think they are buying beer from Germany. Other people
may think German beer is best quality but simply are not
willing to pay more for the best. Table X shows that beer
drinkers in all occupational groups were willing to pay a
premium for beer from their preferred country-of-origin.
With the exception of professional level respondents
(usually also upper income), this premium is not very
large.
The premium for beer from the preferred country
amounted to only about HK$0.26 to HK$0.28 for blue-
collar and students. White-collar/clerical respondents
were willing to pay an extra HK$0.38 on average.
Professional/managerial people would pay HK$0.62 more
on average for beer from their preferred country. In the
stores currently, imported European beer generally has a
price premium of one to several HK$ over San Miguel,
Carlsberg, and some of the US beers. Thus, while most
people in Hong Kong might agree that German (and other
European) beer is among the best, not all of them are
willing to pay the current priceˇpremium.
Conclusion
The market environment for imported beers in Hong
Kong is quite attractive in the mid-1990s. Imports are
about the only category of beer showing impressive sales
gains in an otherwise flat market. Consumer views
towards imported beers are quite favourable, especially
for European beers. Aggressive promotion and strong
marketing support can turn (and has turned) new brands
into major competitors within just a few years.
Results from the two small surveys give a rough overview
of general consumer perceptions in the Hong Kong
market. It contains several well defined segments, which
can be fairly accurately identified by standard
demographic variables. Consumers are first and foremost
looking for taste, but brand, country-of-origin and simple
habit also all play important roles in product choice.
Many consumers say the main consideration when
buying beer is simply to get what they usually buy; but
brand managers cannot take them for granted.
Consumers are also willing to try new products and will
drop old brands if they no longer seem better than new
offerings.
Despite general agreement that German beer is the
highest quality there is confusion about which brands are
actually German. Furthermore, while most people are
willing to spend a little more for their top quality beer, not
all segments are willing to spend as much more as the
actual current price differential over lower priced beers.
These characteristics make the import market very open,
unlikely to be dominated by German brands even though
there is strong agreement that German beers are best.
There is no monopoly on which countries can benefit
from these trends, though capitalizing on the very strong
image of German beers can help greatly. Holland has
done very well with up-scale brands (Heineken, Grolsch).
These do not attempt to portray themselves as German,
certainly; nor, however, do they try to correct the view
among many consumers that they are German. Korean
Blue Girl has done very well by explicitly positioning
itself as German. In addition, real German beers have also
been making a comeback in imports recently.
US beers have done very well by competing on price in
the low end of the market; and neither Malaysian nor
Australian beers portray themselves as German. Overall,
Hong Kong’s beer market is fertile ground for sound
marketing strategies. The market is wide open, with room
17
IMPORTED BEER IN THE HONG KONG MARKET
Occupational Individual 95 per cent confidence intervals for mean
group n Mean SD based on pooled standard deviation
Prof 19 0.621 0.184 (—–
*
–—)
White 39 0.387 0.121 (—–
*
–—)
Blue 43 0.279 0.102 (—–
*
–—)
Stud 29 0.266 0.084 (—–
*
–—)
Pooled SD = 0.1196 0.30 0.45 0.60 0.75
Notes: Money figures are in HK$ per can/bottle.
Prof = professionals/upper management
White = white-collar/clerical
Blue = blue-collar
Stud = students
Table X. Additional Money Respondents are Willing to Spend for Beer from Preferred Country-of-Origin
for many brands competing with very different
strategies. Hong Kong itself shows many similarities with
other South-East Asian markets. It can become a training
ground for other rapidly developing markets in East
Asia.
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18 BRITISH FOOD JOURNAL 96,1
Mark W. Speece is based with EastGate International, Hong Kong; and Yukiko Kawahara and Stella L.M. So are based at
the Chinese University of Hong Kong, Hong Kong.
... Demand elasticity estimation is the most abundant area of research on alcoholic beverage consumption, with some studies considering beer, wine, and spirits simultaneously (Fogarty, 2010;Gallet, 2007), and others focusing on beer specifically (Hogarty and Elzinga, 1972;Nelson, 2014;Speece Mark et al., 1994;Toro-Gonz alez et al., 2014). Tian and Liu (2011) use data from 1993 to 2006 on Chinese alcohol demand and reported a price elasticity for beer near zero. ...
... The Chinese have a history of iconic and conspicuous consumption based on product origin (e.g. French wine or German beer) (Muhammad et al., 2014;Speece Mark et al., 1994). For instance, a study showed that about two-thirds of Chinese consumers associated European beer with Germany (Wang et al., 2017). ...
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