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Overcoming Informal Trade Barriers Among Japanese Intermediaries

Kenneth C. Gehrt, San Jose State University Tomoaki Sakano, Waseda University Naoto Onzo, Waseda University. Overcoming Informal Trade Barriers Among Japanese Intermediaries. Introduction. Japan, an important export target for U.S. U.S. the largest source of Japan’s fruit imports.

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Overcoming Informal Trade Barriers Among Japanese Intermediaries

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  1. Kenneth C. Gehrt, San Jose State University Tomoaki Sakano, Waseda University Naoto Onzo, Waseda University Overcoming Informal Trade Barriers Among Japanese Intermediaries

  2. Introduction 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.

  3. Introduction • Notable progress in overcoming formal trade barriers. • Incremental gains may depend on understanding informal trade barriers (Phelan 1996).

  4. Purpose 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.

  5. Literature 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.

  6. Literature 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).

  7. Methods/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)

  8. Methods/Questionnaire • Market visit/wholesale

  9. Methods/Questionnaire • Market visit/retail

  10. Methods/Questionnaire • 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

  11. Methods/Sample • 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

  12. Data 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).

  13. Results • Identification of Salient Attributes (Exploratory FA) • Vendor performance • Ordering process • Product healthfulness • Financial conditions

  14. CONFIRMATORY FACTOR ANALYSIS

  15. STANDARDIZED STRUCTURAL EQUATIONS MODEL WITH MEASUREMENT MODEL CONSTRAINED

  16. Discussion • 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.

  17. Discussion • 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.

  18. Discussion • Attitudinal barriers that did not emerge • Financial issues • Product appearance issues

  19. Limitations/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

  20. Arigatoo Gozaimasu! Shitsumon ga arimasu ka?

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