Date of Publication

3-24-2023

Document Type

Master's Thesis

Degree Name

Master of Science in Marketing

Subject Categories

Marketing

College

Ramon V. Del Rosario College of Business

Department/Unit

Marketing and Advertising

Thesis Advisor

Reynaldo A. Bautista, Jr.

Defense Panel Chair

Dave Vincent A. Mangilet

Defense Panel Member

Luz Suplico-Jeong
Carlo Miguel C. Saavedra

Abstract/Summary

Coffee consumption all over the world has consistently been increasing on a yearly basis since 2011 (Rider, 2022) with around 2 billion cups consumed daily according to the British Coffee Association (2022). Its supply, however, depends on the production from countries located within the coffee belt including the Philippines, which contributed 12,000 metric tons of commercially-viable varieties of Arabica, Robusta, Excelsa, and Liberica in 2021 (ICO, 2022). Such production from the Philippines however, has been observed and forecasted to sustain a downward trend by the Philippine Statistics Authority (2021) due to: farmers shifting to non-coffee crops, aged trees with minimal rejuvenation, poor coffee-farming practices, more at risk farmers aged from 45-67 years old, and limited access to supplies, equipment, and funds. Integrating Statista Research Department (2021) and Euromonitor (2021)’s reports that the Philippines is also reported to increase its coffee consumption, Catacutan & Ulep (2020) forecasts a growing gap between coffee supply and consumption which results to the Philippines being a net-importer of coffee (USDA, 2011).

Specialty coffee may answer most of the problems identified by the PSA (2021) as producing it from bean to serving it to the consumer in a cup strictly follows high standards set by the Specialty Coffee Association (n.d.) resulting to a premium coffee experience with Q-grade coffee quality at its best, which translates into a more sustainable income for the producers and processors such as the farmers, roasters, coffee shops and baristas. However, since the start of the Covid-19 pandemic in 2020, its consumption in the Philippines declined by 25% (Euromonitor, 2021).

There is potential in the Gen Zs born in the period from 1995 to 2009 (Ha, 2020) to be at the forefront of the solution with their advantage of being exposed to modernization of technology including the internet and social media since birth. Gen Zs are forecasted to create more opportunities for local market producers and drive economic growth (Euromonitor, 2021) as they represent the largest consumer base until 2030 (Hodgson, 2018), are influential to the purchasing decision of their families and are more entrepreneurial at a very young age (Ha and Angus, 2019).

Icek Ajzen’s (1991) Theory of Planned Behavior (TPB) was utilized to understand the specialty coffee consumption of Gen Zs in the Philippines. With the Gen Zs’ feature of desiring to make the world a better place by being socially responsible (Hodgon, 2018), Moral Norm – the personal feeling of obliging one’s self to perform the right action (Schwarz, 1970 - was tested to fit the TPB’s constructs in this context. To test these, a quantitative study was conducted using a scale based on these constructs (Francis et al, 2004; Lee, Ajzen, n.d., Bonn, and Cho, 2015; Bang, Odio, and Reio, 2014). Convenience sampling was conducted online from October 27, 2022 to November 28, 2022 with a total of 393 qualified samples collected. The Partial Least Squares Structural Equation Modeling (PLS-SEM) was utilized to process the data as it is estimates complex causal relationship models with latent variables to develop theories (Cepeda-Carrion,et al., 2019). Descriptive analysis, evaluation of the measurement models for reliability and validity, and evaluation of the structural model were conducted based on the advice of Hair et al. (2017).

Results with p-value < 0.05 and t-value > 1.96 revealed that all TPB constructs of Attitude Towards Behavior (ATB), Social Norm (SN), and Perceived Behavioral Control (PBC) are significant predictors of Intention of Gen Zs to purchase specialty coffee in the Philippines. Results with p-value < 0.05 and t-value > 1.96 revealed that Moral Norm is also a significant predictor of Intention of Gen Zs to purchase specialty coffee in the Philippines. Mediating analysis was conducted to test which TPB constructs have the tendency to strengthen or weaken the relationship between Moral Norm and Intention. Results with p-value < 0.05 and t-value > 1.96 revealed that all TPB constructs are significant mediators between Moral Norm and Intention. Evaluating further, Gaskin et al.’s (2023) indirect effect size threshold was conducted. Results revealed that TPB constructs have a medium effect to the relationship between Moral Norm and Intention in the context of specialty coffee consumption of Gen Zs in the Philippines. These imply that Ajzen’s (1991) Theory of Planned Behavior can be extended by using Moral Norm as a construct and applied in the context of non-food agricultural products consumption such that of specialty coffee.

A qualitative approach through the Focus Group Discussion was conducted to validate results of the study. Majority of the respondents agree with findings of the study. Two interesting themes emerged in the discussion when it comes to the most effective motivators to their specialty coffee consumption: younger Gen Zs identify more with the indirect path of Moral Norm -> Social Norm -> Intention while older Gen Zs identify more with the indirect path of Moral Norm ->Perceived Behavioral Control -> Intention. Suggestions of exploring Accessibility, Affordability, and Ambiance as potential constructs for future studies were recommended.

The Philippine coffee industry therefore can activate the Gen Zs and increase their motivation to consume specialty coffee by integrating Moral Norm and Ajzen’s (1991) TPB constructs in their processes from bean to cup. More consumption of specialty coffee by the Gen Zs will translate to more profits and demand from the producers, encouraging they stakeholders to be more active than ever. These activities if executed properly and communicated constantly to the Gen Zs and the rest of the coffee value chain will result to the creation of an uptraded coffee culture in the Philippines (Changsog et al., 2021; Abuabara et al., 2019).

Abstract Format

html

Language

English

Format

Electronic

Keywords

Coffee drinks—Philippines; Consumer behavior—Philippines; Coffee industry—Philippines; Generation Z—Philippines

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Embargo Period

4-20-2023

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