The Difference between Chinese and British Consumer Behaviour on Coffee Consumption - Literature review Example

? THE DIFFERENCE BETWEEN CHINESE AND BRITISH COSUMER BEHAVIOUR ON COFFEE CONSUMPTION ID Number) (Unit (Unit Submitted) Literature Review Introduction The dissertation aims at studying the consumer behaviour on coffee consumption in China and UK and the major differences in the two countries. The study aimed at reviewing literature by investigating the consumer behaviour and what influences them. The literature review focuses on information from China and UK that identifies the consumer behaviour. The study looked at some areas that could help identify the actual consumer behaviour such as attitudes, perceptions, beliefs and values. The literature review will give information on how the attitudes affect consumer behaviour. It will investigate the actual and post purchase behaviours where it will include information such as where and how coffee is purchased in the two countries. It will also explain about the factors that affect the post purchase behaviour of the consumers. The literature review will describe the coffee shop atmosphere and how it will influence consumer behaviour. Other models of consumer behaviour will also be discussed under this topic. Consumer behaviour on coffee consumption in China Gillespie, Jeannet and Hennessey have argued that coffee consumption depends on the consumer income. Starbucks gave coffee market in China a priority as it believed in Chinese youth consumers. Coffee sales have increased and shown a positive growth. Starbucks has improved its marketing strategies by reducing coffee prices. The writers have stated that coffee is mostly consumed by elite consumers, tourists and expatriates as they are the most targeted group by the coffee operators. They influence other consumer to have a coffee preference. Consumers that are attracted or like the luxury products tend to consume more coffee than other consumers. Increase in consumption level has lead to increase in coffee stores in the country who are competing amongst themselves (Gillespie, Jeannet, & Hennessey, 2010). Nagel has also argued that Starbuck has helped to increase coffee preference in China. An increase in coffee consumption has been experienced in the large cities such as Hong Kong, Beijing and Shanghai. These cities have been flexible enough to adapt western culture such as coffee drinking, due to the attraction of the western lifestyle. The Chinese in the big cities have changed their consumer behaviour due to the influence of different cultures and westernisation. The growth of coffee consumption in some cities has been affected by the government and the Chinese traditions. Nagel also believes that consumer behaviour among the Chinese youth have changed towards coffee consumption. They have accepted the coffee culture and its associated lifestyle. They now prefer premium coffee and they are drinking grounded coffee, due to its sweet smell compared to instant coffee. Nagel also complements that coffee consumption in China is seen to be a luxurious lifestyle, due to its exceedingly high cost. He concludes that the coffee consumption in China is increasing especially among the youth who grew after culture revolution (Nagel, 2008). Zinzius has states that China has been a tea drinking country but it has slowly adapted coffee drinking culture. This has been greatly influenced by the coffee shop atmosphere. Coffee consumption in China is quite low as many have not adapted to its bitter taste. Others complain that it is keeping them awake till late in the night. Starbucks is one of the companies that have affected the consumer behaviour on coffee consumption in China. The company has opened stores that increased coffee consumption and has targeted the youth such as students, young managers and employees. Despite the coffee being expensive, the consumers prefer coffee shops to tea shops as they are mostly filled with smoke and a lot of noise. The tea shops are mostly dominated by the adult population. The company has also offered training in coffee classes to enlighten them on coffee drinking and this has increased coffee consumption in China. Zinzius has argued that Starbucks has contributed in changing the Chinese to be coffee drinkers from being tea fans (Zinzius, 2004). The Starbucks has opened more outlets that have offered a new variety of products including coffee. The company plans to open about 1500 outlets in China cities. Coffee appetite has increased among the Chinese consumers due to the influence of western lifestyle. The Chinese admire the lifestyle in the west and tend to live the life of people in developed countries. They then indulge in coffee drinking so as to have a feel of the admired culture. Other coffee stores have added other topping to the coffee blends to enrich the taste of coffee. Pacific Coffee introduced a new taste of coffee in their menu that consists of a blend of coffee and Chinese liquor and named it Er Wotou chillino. This new taste of coffee had Er Wotou liquor and iced coffee. This was introduced to help promote coffee consumption. Studies have shown that even though there are many outlets in China, it will take time for coffee to b a popular beverage in China unlike other countries (WordPress.com, 2012). Coffee is one of the beverages that show that China has accepted modernisation. China is certainly a very big country but the rural and remote areas have remained traditional. They have not accepted the western style compared to the big cities. The growth in the economy has also influenced the Chinese to increase their coffee consumption. It has enhanced exposure of other cultures especially the western. Consumer behaviour toward coffee consumption in China has been influenced by coffee’s rich taste, flavour and high quality. In China, the most coffee consumers are young as they are easily lured to adopting the new and modern cultures. Findings from studies show that female gender is likely to have more coffee drinkers compared to the male gender. The female gender is said to offer the standard price to get premium coffee. The level of education and income also affects the consumer behaviour. Those with a higher level of education are very open minded and most of them have a western lifestyle orientation and are curious to experience different things. Consumers with a high income are able to afford a lavish lifestyle as coffee drinking is seen to be very fashionable in China (Yang, Hu, Mupandawana, & Liu, 2012). Naidoo, et al argues otherwise and says that coffee is mostly consumed by people with a low degree of education. They also say that men are the more consumers of coffee compared to the females (Naidoo, et al., 2011). Coffee consumption in China is very low but many people are optimistic that consumer behaviour on specialty coffee will improve. The coffee trend has definitely changed compared to fifteen years ago because there has been an expansion of cafes in China that are of western style. Consumer behaviour in China towards coffee consumption has been influenced by the growth of western beverage and food scene. The coffee stores that have increased the level of coffee consumption include Costa and Lavazza Espression stores. The Chinese consumers get their coffee drinks in coffee shops instead of brewing coffee beans at home, due to lack of machines. Chinese do not know much about coffee and they are mostly offered coffee that is brewed from poor quality and cheap roasted coffee beans. Therefore, the consumer behaviour might be affected by consumer beliefs that coffee is bitter. Lack of knowledge on how coffee is made, drunk and the actual taste of quality coffee affect consumer behaviour on coffee consumption. The coffee consumers in china are not familiar with the different types of coffee such as cappuccino and latte. The love for specialty coffee in China is growing due to the different methods of brewing and the growth in consumption and the entire coffee market will mature soon (The New Frontier, 2012). Increase in the living standards has contributed to a change in food and beverages to better quality products. Most consumers consume instant coffee despite the strong love for grounded coffee. This is because it is easily prepared unlike grounded and roasted coffee that needs coffee machines to brew the beans. Nestle is one of the coffee companies that promoted instant coffee drinking by introducing packets of single-cup of instant coffee. The instant coffee is also cheaper than grounded coffee. Many Chinese consumers opt to take grounded coffee in cafes because they neither want to buy a coffee machine nor do they know how to use one. Chinese consumers prefer drinking coffee while eating as thy have not fully adapted to the coffee taste. Espressos are rarely prepared in coffee houses due to its bitterness. The culture in China’s cafes has attracted many consumers to be coffee drinkers. Many of them have changed their preference due to the style and atmosphere portrayed in coffee houses. The cafes have beautiful ambience and relaxing music. Coffee consumers indulge in coffee drinking during business or casual meetings and dates for couples (International Trade Center, 2010). Ganes has argued that coffee is mostly drunk by the white collar young professionals. Coffee culture is seen as an extreme lifestyle aspiration. This has made consumers to indulge in coffee drinking every morning before going to work or school. Appetite for this beverage has increased among consumers in middle class. The demand of the coffee is increasing every year and this has forced coffee companies in China such as McDonalds and Blenz among others to compete in launching new coffee stores. They have affected the coffee drinking habits (Ganes, 2011). Coffee is said to be the world’s favourite drink but China is among the countries that has a coffee market that is not vibrant. China has a very big population and most prefer tea compared to other beverages. The growth in the coffee market in China is slowly expanding due to the advanced marketing strategies and consumer education. According to the rate at which coffee consumption is increasing per annum shows that in few years to come, China will have matured in the coffee market. China has shown a lot of potential in terms of coffee consumption especially in the large cities. The consumer behaviour is said to be affected and consumers are likely to change their beverage preference due to the impact of globalisation. Chinese consumers believe that coffee is a preferred drink for the urban, young and adventurous. They also see it to suit the liberal and affluent consumers. Coffee consumption is also high among consumers who frequent abroad. Nestle is one of the companies that has promoted instant coffee thus increasing consumer preference in instant coffee with their Nescafe brand. Fresh coffee is rarely consumed in China as it is only available in few stores and hotels. Coffee houses, restaurant and internet cafes have increased coffee consumption (GreenCoffee.com, 2012). Consumer behaviour on coffee consumption in UK Coffee is widely consumed in Britain and most of the Londoners prefer taking a cup of coffee in the morning. They hold events that would help promote coffee consumption in London. Such events include coffee festivals where consumers are educated on how to make quality coffee at home by experts. These events are attended by many people who come together to celebrate food and coffee culture. The festivals offer samples galore and the participants get to taste different types of coffee. The consumers get to know the finest coffee and the major, stores, shops and kiosks where they can get high quality coffee. Coffee consumption is high in the city than other parts in the UK. Londoners tend to frequent coffee shops more and often drink instant coffee. They also like take-away coffee which is very common among Londoners. The rest of the UK prefers French press and espresso. The Londoners value sustainability in products and the consumers tend to choose coffee that is ethically sourced (The Mag, 2012). Coffee is said to be a stable beverage in the UK despite tea being the national drink. The consumption level of coffee was very low compared to tea but the difference in consumption is reducing fast. The British consumers prefer instant coffee when compared to the rest consumers in Europe. Instant coffee preference in Britain is 90 percent compared to other types of coffee. Consumers tend to prefer drinking their favourite beverage outside their homes and it has increased the growth of coffee consumption in the UK. Hashemi and Hashemi have also argued that UK consumes little coffee compared to the rest of Europe (Hashemi & Hashemi, 2004). Studies have shown that sales in coffee shops have recorded an increase in growth. There are very many coffee outlets and they all recorded an increase in revenue during recession. Coffee consumption has really increased including independents and branded chains. The coffee consumers have increased pressure on the branded chains to offer quality coffee at fair prices. The coffees shops are competing amongst themselves to offer promote and enhance better experience, coffee quality and innovation. The British have adapted the coffee culture and is now a British lifestyle. The consumers prefer coffee as the coffee shop environment has a comfortable and relaxed atmosphere. This has resulted to a rise in coffee consumption among the British consumers (Allegra Strategies, 2010). The British consumers always prefer a hot beverage and coffee is the most common drink among the chocolate and tea. Britain has a large market of coffee and has made the country to be recognised as top two of the coffee market. The consumers have increased their appreciation of coffee’s aroma and flavour. The coffee shops have tried to attract consumers and increase coffee consumption by packing the take-away coffees in paper cups that are branded and portray the drink to be of high quality. The consumer behaviour varies with the consumers taste. The shops make the drink meet the consumer’s taste preference in respect to the weight and health concerns. They are more concerned in making specialty coffees with several flavours such as amaretto, cinnamon and hazelnut. Vending industry has tried to come up with different strategies that would help increase the appeal to consumers. They have made use of the toppings and creamers to help in enhancing the taste of the beverage. The British consumers are willing to pay more for ethically traded coffee (Allegra Strategies, 2007). The United Kingdom has also been one of the popular tea nations. The currents trends have changed and coffee preference has increased. The consumers in the UK are mostly attracted by the quality of the coffee. Coffee has found its way into the hearts of the British as UK has been a land of tea for many years. Many companies have continued to emerge, due to the growth of coffee consumption. Many companies are still willing to open up more chains so as too cater for the demanding consumers. Before coffee culture penetrated through the British lifestyle, it was seen as an American style. It started being popular among the youth and those who were in the urban areas. Coffee continued being popular and most of the consumers drunk instant before espresso was introduced. The coffee bars increased and this helped to increase the coffee consumption. During that time, the consumers would only get good quality coffee in the city only. Stylish cafes were launched and these influenced the consumer behaviour toward coffee consumption (Black, 1998). Consumers have become discerning about the quality of coffee, consumer behaviour has changed. Consumers are now preferring filter, ground and roast coffee compared to the instant coffee. The coffee houses are experimenting with coffee by using different topping and sizes. Coffee has now become a favourite drink among the British. The latte and cappuccino have become very common due to the fact that there is a bit of milk in them. The amount of coffee consumption has also increased as the consumers are now buying coffee in mugs rather than in cups. Other consumers have complained that the coffee houses are very fashionable but the coffee being offered is of poor quality. This may negatively impact consumer behaviour towards coffee consumption and the coffee shops are advised to improve the quality of their products. They are supposed to invest in good quality espresso machines and to ensure that coffee is being prepared by confident and skilled staff. Many coffee houses have sustained their customers after investing in a good coffee machine. Studies have shown that coffee consumption has also increased due to a consumption increase among the children. They also head to coffee shops to purchase good quality coffee (Reed Business Information, 2002). Many work places offer their employees coffee but most complain that it is not good coffee. The workplace assume that they are pleasing their workers abut little do they know that the workers would prefer to pay more just to get premium coffee at their workplaces. Quality coffee is said to increase and improve moral and performance in workers. The consumer behaviour and tastes have certainly developed. During the time of recession, consumers increased their coffee consumption and demand for premium coffee due to pressure such as job uncertainty. Consumers are attracted to coffee consumption by vending operators who offer quality drinks. Nescafe is among the major vending operators that has increased coffee preference (Nestle professionals, 2010). Molloy states that consumer demand for hot drinks has increased. Coffee has recorded an increase in consumption for grounded coffee from single origin that is rich in quality and taste. Cafedirect has promoted quality coffee being offered to consumers. It has also increased fair-trade products in the workplaces thus increasing the coffee consumption among the workers. The coffee market is predicted to have expanded in the next ten years due to the demand from consumers for fair-trade coffee. The fair-trade status is settling in UK towns and it has changed the British lives and consumer behaviour. The Cafedirect offers different tastes in coffee and the dispensing machines have also made consumers to prefer coffee to other beverages (Molloy, 2005). Consumers above 65 years are reducing their coffee consumption thus affecting the market as the age group covers a fifth of the grown-up population. The youth are the targeted market and has increased the coffee market that has focused on in-home beverage. Many consumers have complemented coffee for boosting energy. The youth are attracted to the coffee culture and being in the urban has increased their interest in purchasing a pod machines so as to make home coffee. On the other hand they tend to decline the urge of purchasing the machines due to occupation of too much space. The coffee pods have increased coffee consumption of the working population. Instant coffee is highly consumed in the work places as it is readily available though most prefer to drink ground coffee (Mintel Group Ltd, 2011). Coffee consumption in Britain in the 18th century was high in men than in women. It then became a domestic beverage as there was a rise in consumer consumption. During that time, coffee was seen as a luxury beverage. In the mid-nineteen century, there was growth in the rate of urbanisation and free trade that also increased coffee consumption. Coffee houses were mainly visited by men but more were open in different location. Most were sited in places that involved decision making or exchange of knowledge. They offered a nice place for public interaction. Coffee consumption was not very common but the little was consumed was consumed by men who were out to buy insurance or when being informed about business news (Duncan, 2007). The theories stated below have lead to increase or decrease to coffee consumption in United Kingdom. All the theories are health related and the positive effects on the consumer have out done the negative effects. These theories include; It is believed that coffee consumption reduces chances of one getting stroke. Stroke is health challenge that has claimed the lives of most citizens in UK hence it has lead to increase of coffee consumption. The research conducted in United Kingdom shows that coffee has beneficial health effects. The researchers stated that the more you drink coffee in a day the more you lower the chances of suffering from stroke. The researchers believe that coffee is a mixture of many substances hence it has both positive and negative effects to our health. One of the positive effects is ensuring “low density lipoprotein cholesterol (LDL). The negative effect is that too much consumption of coffee causes hypertension (Daily mail 2011). The research by the University of California/Berkeley (U.S.) and Bradford University (UK) states that coffee consumption has negative effects on men’s fertility. The cause of the infertility was due to the caffeine substance found in coffee. The research shows that the more a male takes coffee the more they contribute to genetic damage to sperm; the main cause of these is yet to be established. In females lots of caffeine intake leads to delayed conception. Caffeine intake causes increase in estrogen levels. High levels of estrogen are the main cause low reproductive in women. Those ladies who take a lot of caffeine hardly know or notice they are pregnant during the first few weeks or months. The scientist’s advice it’s good to keep off caffeine consumption when one is trying to conceive (fertility-health.com N/A). It has been found that men who drink coffee are unlikely to get prostrate cancer. Coffee consumption also decreased risks of getting infected with endometrial cancer in women. This was a research done by researchers at Harvard school of Public Health. It believed that coffee has a substance such as anticarcinogenic that reduces cancer tumors. Coffee is also a short term memory booster. The caffeine acts on the part of the brain that deals with concentration and memory. This research has not yet been proved how long it takes on each individual (Jong 2012). Conclusion The literature review has discussed a wide area that affect the consumer behaviour on coffee consumption in this dissertation. It has also identified the reasons that increase the consumption level. The literature review has identified that it is the younger generation that consume more coffee compared to the adult population. In China and UK, the biggest consumers are those in the cities. The trends in coffee consumption in the two countries are encouraging as the coffee markets are growing fast. The consumers in those countries have adopted the coffee culture and the coffee shop atmosphere has been one of the factors that have contributed to an increase in coffee consumption. This is because they are attractive, peaceful, entertaining and the aroma of the ground coffee are appealing to the consumers References Allegra Strategies. (2010, December). UK coffee shop market reaches all time high of ?5.0 billion turnover as boom in coffee continues. Retrieved July 12, 2012, from http://www.cafe-business.co.uk/Images/allegranews.pdf Allegra Strategies. (2007, April 1). 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