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Document 1 of 1 International online marketing of foods to US consumers Author: White, Gregory K ProQuest document link Abstract (Abstract): US consumers' reactions to 20 domestic and international Internet sites marketing specialtyfood products are examined. Abstract: US consumers' reactions to 20 domestic and international Internet sites marketing specialty foodproducts are examined. Respondents' ratings of site characteristics and use of descriptive adjectives areanalyzed and it is determined that international sites were viewed significantly lower than domestic sites onvirtually all measures. Those differences were correlated with a lower likelihood of purchase. Internationalcompanies hoping to market their products to US customers via the Internet should expect to have onlineconsumers apply a more stringent standard of site design and quality. However, those companies which meetthese standards can expect to be competitive with US companies. Full text: Gregory K. White: Department of Resource Economics and Policy, University of Maine, Orono, Maine,USA ACKNOWLEDGMENT: This research was funded by the Maine Agricultural and Forest Experiment Station andthe University of Maine and is MAFES No. 2123. Introduction Internet shopping is beginning to show signs that it may live up to its early revolutionary projections. It is nowestimated that 23 per cent of US and Canadian residents over the age of 16 use the Internet, and as of March1997, 17 per cent of this population had used the World Wide Web (WWW) in the previous month.(CommerceNet, 1997) Nearly three quarters of these Web users have searched the Internet for informationabout products and services, and 15 per cent have made an online purchase. Thousands of firms marketing food and beverages worldwide are among those trying to attract the attention,and buying power, of these Internet shoppers. It is now possible to purchase specialty Italian cheeses directfrom a cybershop in Italy or New York. Consumers interested in smoked fish can pay a virtual visit to companiesin Alaska or Iceland from their home computers. Internet users are an attractive target group for specialty food and drink producers. Like the overall Internetpopulation, people who visit food and drink sites online are relatively young (median age of 37), wealthier thanmost (median income of $58,000), and well educated (91 per cent have attended some college and 75 per centhave at least a four-year degree) (White and Cheng, 1996). They also mirror those consumers who purchasespecialty food and drink products through traditional markets (Dietrich, 1992). The Internet population is also international, although more than 80 per cent of Internet users are estimated toreside in the USA (Pitkow and Kehoe, 1996a). This means that any business with a presence on the Internetautomatically becomes a multinational company (Quelch and Klein, 1996). The question for food and beveragefirms on the Internet is: are international sales a realistic expectation? Background Researchers at the University of Maine conducted two surveys from June-September 1996 in whichrespondents evaluated a total of 32 commercial Web sites marketing specialty food and drink products. In eachsurvey, respondents were asked to evaluate six sites with regard to a series of site characteristics and toindicate their likelihood of making a purchase from the online site or, hypothetically, from the company by mailorder or at a local retail outlet (White and Manning, 1997a). Non-US residents comprised 8.8 per cent of the respondent population of the initial two surveys, and they

completed 8.0 per cent of the site evaluations. While they were equally likely to make a purchase from thecompanies in the survey if their products were available at a retail store in their area, they were four to five timesless likely to make an online purchase. This contrasts with data collected in GVU's bi-annual surveys of Internet users, which indicate that there was nosignificant difference between US and international Internet users' purchasing activity of "food/condiments/beverages" online in the previous six months (Table I) (Pitkow and Kehoe, 1996b). Therefore, it would appearthat international and US consumers are equally likely to purchase food and drink products online, but UScompanies on the Internet do not currently appeal to foreign consumers. This project was designed to determine if consumers in the USA have similar concerns with makinginternational food and beverage purchases over the Internet. It examines US residents' reactions to a sample ofinternational commercial WWW sites, compares their likelihood of purchase from international companies tothat from US companies, and analyses reviewer comments to determine why they might view international sitesand potential purchases differently. Methodology An on-line survey was conducted from 11-31 December 1996 in which consumers interested in food and drinksites on the Internet evaluated 20 commercial WWW sites. Fifteen were US companies which marketed one ormore of the following products: barbecue sauce, cheese, olive oil, and potato chips. Five companies were fromGermany, Iceland, Italy, Switzerland, and the UK. They marketed chocolate, seafood, olive oil, and/or gourmetgift baskets. This was the third in a series of Internet site evaluation surveys. The previous two studiesevaluated consumer reaction to 32 US and Canadian cybershops which marketed chocolate, coffee, fruit, salsa,seafood, and/or wine. The survey instrument was an interactive WWW site located on the University of Maine server(http://www.ume.maine.edu/[similar]specfood/survey. html). Calls for volunteers were placed in a variety of siteson the Internet which are visited by Internet users interested in specialty food and drink products. Theseincluded commercial WWW sites marketing food and drink products, food- and drink-related electronicmagazines (e-zines), and food- and drink-related newsgroups. Some of these notices were posted by theinvestigator; others were provided by companies and individuals interested in the project. The survey site wasalso registered with several Internet search engines. Respondents who took part in the first and/or secondsurvey were contacted by e-mail and encouraged to take part the current survey. These methods weredesigned to attract a sample of individuals who are likely visitors to commercial WWW sites marketing specialtyfood and drink products. It was not intended to attract a representative sample of the Internet population as awhole. A further description of the methodology and potential sampling and procedural biases can be found inWhite (1996). During the survey, each respondent was asked to evaluate six commercial WWW sites. In addition to basicquestions regarding familiarity with the company being reviewed and previous visits to its WWW site, thecompany evaluation forms asked respondents to review each WWW site with regard to various sitecharacteristics. These included the speed at which the site loaded, the ease of navigating the site, companyinformation, product information, graphics, order options, as well as overall appeal of the site. Respondents were also asked to identify descriptive words and phrases which, in their opinion, were applicableto the sites they reviewed. They could select from a list of 15 words and phrases (innovative, fun, personal,useful, clear, concise, attractive, interesting, informative, confusing, impersonal, wordy, hard to read, out-of-date, and busy) which were frequent comments in the first two surveys. Respondents were then asked to identify that product, if any, from among those available on the site which theywere most likely to purchase within the next six months. Each product, as well as the option "would not considerpurchasing any product" could be selected from a pull-down menu on the survey form. They were also asked toidentify their preferred method for placing an order from among those offered on the company's WWW site, and

to indicate the likelihood of actually purchasing the selected product within the next six months. Since productsmay not be available in local retail stores for most respondents, they were asked the hypothetical question "Howlikely would you be to purchase that product from a retail store in your area (if it were available) in the next sixmonths?" A similar question was asked about the likelihood of purchase by mail order from a catalogue. Thescores for likelihood of purchase from retail stores, by mail order, and online are the primary measures by whichthe research objectives for this project are evaluated. Findings A total of 874 site evaluations were completed by 163 respondents during the survey period. Femalescomprised a slight majority of respondents (56.3 per cent); 43.0 per cent were male, and 0.7 per cent did notindicate their gender; 86 per cent of respondents were aged 25-55, with an estimated median age of 41. Thegroup was well educated. Nearly 95 per cent attended some college, and 64.8 per cent had at least a four-yearcollege degree. The estimated median income was $57,000. US residents comprised 93.3 per cent of the respondent population, and they completed 92.6 per cent of thesite evaluations. Because this paper addresses the likelihood of US consumers' willingness to purchase foodand beverages online, only those evaluations submitted by US residents have been considered. In addition to a series of questions regarding the appeal and quality of the WWW sites being reviewed,respondents were asked to evaluate the appeal of each company's products. The US companies' products wererated either "good" or "excellent" by 78.2 per cent of respondents. This compares with 61.3 per cent of theinternational companies. The difference is significant at the 99 per cent level. In order to understand better theeffects of the WWW sites alone, as opposed to the products marketed, the evaluations analysed in this paperare further limited to those for which respondents rated the product appeal as "good" or "excellent". Thisresulted in 485 reviews of US sites and 111 of international sites. Respondents were more critical of the international WWW sites than the US sites. They were significantly lesslikely to describe the international sites as "good" or "excellent" with regard to loading speed; ease ofnavigation; company, product, or shipping information; order options; and overall site rating. There was nosignificant difference in their opinions regarding the quality of the sites' graphics (Table II). With respect to the 15 descriptive terms, respondents were also significantly less likely to describe internationalcompanies' sites in positive terms. International sites were described as "fun" only half as often as domesticsites (13.5 per cent and 27.2 per cent respectively) (Table III). They were 75 per cent less likely to be describedas "personal". The use of these terms, as well as "innovative", "useful", "clear", "concise", "attractive","interesting", and "informative", appear to be related to a higher likelihood of online purchase (White andManning, 1997b). As indicated in Table III, for those positive terms in which there was a significant difference inusage between the US and international sites, the international sites scored lower in all cases. The reverse was true of terms associated with a lower likelihood of purchase. The international sites were morelikely to be described as "confusing" (13.5 per cent), "impersonal" (9.9 per cent), and "hard to read" (12.6 percent) than domestic sites. There was no significant difference between the groups for the two terms (i.e. out-of-date and busy) which the White and Manning study found to have no clear relationship to willingness topurchase. Respondents were asked to indicate the likelihood of making a purchase from each site within the next sixmonths by online ordering, by mail order, or from retail stores if the product were available locally. There was asignificant difference between the US and international sites for each possible method of purchase (Table IV).Among this group of respondents who rated a company's product appeal as "good" or "excellent", more werelikely to make a purchase from a company within the USA than an international company. It would appear thatthese differences are not necessarily solely due to issues of international shipment and/or payment, since evenpurchases from local retail stores are significantly lower for the international companies, but are rather related tothe sites themselves.

Each site evaluation was analysed and categorized according to whether the reviewer had used only positiveterms, neither positive nor negative, both positive and negative, or only negative terms to describe the site.Respondents used only positive terms to describe 77.5 per cent of the US sites and 65.5 per cent of theinternational sites. Respondents used only negative terms to describe international sites approximately threetimes as often as they did describing US sites. Table V also indicates the percentage of respondents who were somewhat or very likely to make a purchasefrom the online site by the terms they used to describe the site. It is clear that if only positive terms were used todescribe the site, approximately one-third of respondents indicated a high likelihood of making a purchase fromcompanies regardless of their country of origin. However, if one or more negative terms were used, thelikelihood of an online purchase from an international company was virtually eliminated. Their likelihood ofpurchase from a US company decreased with the application of negative terms, but the decrease wassignificantly less than that of international sites. Suggestions for international food producers These findings suggest that international food and drink companies whose commercial WWW sites meet theneeds of US consumers can be competitive in the USA. Comments made by reviewers along with the resultsreported above provide some guidance for firms hoping to market their food and drink products in the USA. Language" Poor spelling and grammar - I understand that this is an Italian company, however the repeated errors areunprofessional." Companies who wish to market their products in the USA must provide site content in English. (They might alsoconsider options in Spanish and other commonly spoken languages.) Reviewer comments, however, suggestthat international companies must be careful in their use of English and avoid grammatical and usage errors. Availability of international shipping" Shoot, they said worldwide, but I saw no US options!" Companies that are prepared to make international sales should indicate that clearly on their WWW pages.Without this information, and sometimes despite its presence, some respondents mistakenly believed that theycould not make a purchase from international companies. Currency" Interesting products ... I'd be tempted to order but there are no US dollar equivalents ... I can't tell howexpensive they are." Shopping on the Web needs to be convenient. Therefore, consumers are unlikely to search for information oncurrency conversion rates. Firms who wish to market their products internationally may consider adding a linkfrom their web pages to a currency converter or provide an approximate conversion rate for each country towhich they are prepared to make sales. Shipping charges" Shipping charges to USA are prohibitive." Shipping charges may be beyond a company's control, but it is a concern for international customers. At aminimum, Web sites should clearly indicate shipment costs to each country to which delivery is available. Shipping information" Products look good, but would be very dubious to buy ... and having it shipped all the way here." In addition to the cost, respondents were often concerned about the time needed for international shipmentsand its impact on the quality of the products. Companies should consider providing information on how theproducts are shipped and precautions taken to ensure their quality on arrival. Quality guarantees and/or specialconsideration for international returns or refunds may also be necessary. Local availability" Yummy looking/sounding food, but I'd think we have pretty comparable stuff from here."

Respondents overwhelmingly preferred to purchase most food and beverage products at a local retail store.International products are no exception. Therefore, companies on the Internet must distinguish their products asunique and not available locally if they are to realize international Internet sales. Summary Survey respondents residing in the USA evaluated both domestic and international WWW sites marketing foodproducts. Among the responses which rated the appeal of the product as good or excellent, international sitesconsistently were rated lower than domestic sites. The international sites were significantly lower on seven outof eight site-related characteristics such as ease of navigation, company and product information, shippinginformation, and overall site rating. Respondents also used positive descriptive terms to describe theinternational sites significantly less frequently than domestic sites, and negative terms more frequently. After reviewing the sites, respondents expressed a lower likelihood of purchasing products from the foreignproducers through online ordering, mail order, as well as local retail options. When the likelihood of purchaseratings were compared to the use of the positive and negative descriptive terms, it was apparent that ifreviewers considered a site to have one or more negative aspects, it reduced the likelihood of purchase from adomestic company by approximately 42 per cent, but it reduced the likelihood of purchase from an internationalcompany by 87 per cent. Thus, international companies hoping to market their products via the WWW to UScustomers should expect to have on-line consumers apply a more stringent standard of site design and quality.Those companies which meet these standards can expect to be competitive with US companies. If food anddrink sites are viewed negatively in any way it will have a much greater impact on sales by international thandomestic companies. International companies hoping to market specialty foods in the USA via the Internet should pay particularattention to making the sites convenient and informative. They need to include a well-edited section in Englishwhich includes clear information about international availability and shipping as well as guidance regardingcurrency equivalents. Finally, the products must be presented in a manner which highlights the "specialty" intheir specialty foods. If the products are no different from those available in consumers' local retail stores, thereis no incentive for Internet shoppers to experiment with an international purchase. References 1. "CommerceNet/Nielsen Media Internet Demographics and Electronic Commerce Survey" (1997),http://www.commercenet.work/pilot/nielsen_96/press_97.tml 2. Dietrich, R. (1992, "Today's specialty food consumer", in NASFT Showcase, National Association forSpecialty Food Trade, Inc., New York, NY, March/April. 3. Pitkow, J. and Kehoe, C. (1996a, "Sixth GVU WWW user survey. High level summary and trend analysis",October, GVU Center, College of Computing, Georgia Institute of Technology.http://www.cc.atech.edu/gvu/user_surveys/ 4. Pitkow, J. and Kehoe, C. (1996b, "Sixth GVU WWW user survey", General Demographic and InformationGathering and Purchasing Datasets, October, GVU Center, College of Computing, Georgia Institute ofTechnology. http://www.cc.atech.edu/gvu/user_surveys/ 5. Quelch, J.A. and Klein, L.R. (1996, "Opinion: the Internet and international marketing", Sloan ManagementReview, Spring 1996, Vol. 37 No. 3, pp. 60-75. 6. White, G.K. (1996, "An online survey of food and beverage consumers on the Internet: an evaluation of thesurvey methodology", Marketing Research Online, Vol. 1, pp. 39-59.http://msc.city.unisa.du.au/msc/jems/MRO_Vol_One.html 7. White, G.K. and Cheng, T. (1996, "Purchase behavior of online specialty food and drink consumers: resultsof an electronic survey", Proceedings, Allied Academies Annual Meeting: Marketing Studies Section, Maui,Hawaii, October. 8. White, G.K. and Manning, B. (1997a, "Characteristics of likely Internet specialty food and drink consumers",

Presented at American Marketing Association Future of Marketing Special Conferences, Dublin, Ireland, June. 9. White, G.K. and Manning, B. (1997b, "Commercial WWW site appeal: how does it affect online food anddrink consumers' purchasing behavior?" working paper. Illustration Caption: Table I; US and international Internet users food/ condiments/beverages purchases in previous sixmonths; Table II; Site characteristics ratings for US and international companies; Table III; Site descriptions forUS and international companies; Table IV; Likelihood of purchase from US and international companies; TableV; Likelihood of online purchase by use of positive and negative site descriptions Subject: Studies; Marketing; Consumer attitudes; Internet; Food; Online advertising; Location: United States, US Classification: 9190: United States; 7200: Advertising; 5250: Telecommunications systems & Internetcommunications; 9130: Experimental/theoretical Publication title: International Marketing Review Volume: 14 Issue: 5 Pages: 376-384 Number of pages: 0 Publication year: 1997 Publication date: 1997 Year: 1997 Publisher: Emerald Group Publishing, Limited Place of publication: London Country of publication: United Kingdom Publication subject: Business And Economics--Marketing And Purchasing ISSN: 02651335 Source type: Scholarly Journals Language of publication: English Document type: Feature ProQuest document ID: 224310861 Document URL: http://search.proquest.com/docview/224310861?accountid=149759 Copyright: Copyright MCB UP Limited (MCB) 1997 Last updated: 2014-05-26 Database: ProQuest Research Library

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