Since rice is main staple food in Korea, the Korean government has put much effort on the improvement of rice production structure and the enlargement of rice production. Up until 1980's the enlargement of rice production was a main task for Korean government due to the shortages of rice production. Since 1972 a high yield variety(HYV) of rice, Tong-il rice, has been produced. As a result rice production has been increased to meet rice demand.
Since 1960's urban population has been rapidly increased in the process of the Economic Development Plans, and market distribution of rice has been increased year by year. Moreover food consumption pattern has been changed due to per capita GNP increase.
It has been known that main concerns of rice consumers are rice quality with tastes and flavor, food safety, and small packing of rice. Corresponding to the consumers' preference, rice producers(or producer's associations) have made branding with small packing and high quality rice, which led to the rapid increase of small packing branded rice.
Branding in rice commodity (rice-branding hereafter) has been considered very important as a strategy corresponding to consumers' preference as well as competing with foreign rice. The objectives of this study are to analyse the current situation of rice-branding in Korea by survey method and to prospect the future of rice-branding. The survey has been done on rice producers, rice processing centers(RPCs), and rice consumers.
Results of the survey are summarized as follows.
1) All of the surveyed groups, rice producers, RPCs, and rice consumers consider rice-branding is necessary, even though each group has different benefits as the effect of rice-branding. Rice producers and RPCs gain benefits to increase the marketing amount and producer's profit, while consumers come to trust rice quality and become easier to purchase rice.
2) Consumers prefer rice quality with tastes and flavor, and safety to rice price. Also the proportion of small rice packing is higher than conventional big packing, and one-stop shopping together with other food items in department stores or large marketing centers shares high portion of rice purchase.
3) Consumers consider rice-branding is necessary. However most of them do not recognize quality difference between different rice brands. Hence they expect government or consumer's associations make quality differenciation between diverse rice brands.
4) It is demanded that the area covered by one specific rice brand has to be readjusted. While currently one specific rice brand usually covers a very small production region, it is generally expected that the newly established rice brands may cover larger production regions including Myun level, County level, or even Province level.
5) So far consumers have little recognition of certified rice or organic rice. More than half of the surveyed rice consumers have experience to purchase certified rice or organic rice. However so far consumers less recognize certified rice or organic rice, which may be a barrior to extend the market of certified rice or organic rice.
6) Rice brands named by specific administrative regions are most well known to rice consumers among various rice brands. Especially Kyung-gi rice is most popular to consumers. However Pung-kwang-su-to, Chung-pung-myung-wol, and EQ-2000, which are high quality rice brands maded by province level, are not well known to consumers.
7) Consumers are affected by the design of rice packing and they prefer stand type, juice-box type, and small packing for leisure as a type of rice packing. Also consumers want to know the information regarding producer's personal records, residual pesticide amount in rice, characteristics of rice quality, rice variety, mixed rates between different rice varieties.
8) Rice consumers can be categorized as quality preference group, price preference group, and organic rice preference group. Each group of consumers has different purchasing behavior.
All of the surveyed groups, rice producers, RPCs, and rice consumers consider rice branding is necessary. There are several reasons rice-branding has not been well established. One of the reason is that conventional rice purchasing behavior of consumers has not been changed. Other reasons are based upon problems in view of producers and government.
1) Government puchased rice usually does not include high quality branded rice, because government has puchased rice based on degree of water content amount and the content of alien substances rather than based on rice quality. As a result rice producers supply government purchased rice based on quantity rather than quality. Therefore government purchased rice usually contains low quality rice, which may be the main difficulty in the enhancement of rice quality.
2) RPCs have some difficulties to secure high quality rice. Most of RPCs can not afford to secure high quality rice as much as they need during harvest period due to the shortages of funds and insufficiency of dry and storage facilities. Thus part of the necessary amount of rice in RPCs is provided by government purchased rice which is usually low quality.
3) Recently RPCs try to establish rice brands based on rice quality, however, so far rice brands established by RPCs do not really reflect rice quality. Except certified rice and organic rice, most of the branded rice has been mixed together with diverse varieties of rice, rice produced in different years, and rice from various regions. Therefore there is no rice quality differenciation from different regions.
4) There is lack of recall system in rice market. Even if consumers are not satisfied with the purchased rice of a specific brand, they may not usually get refunded or exchanged. Some of RPCs do not have recall system due to the shortages of funds and manpower. Even though they have recall system they are not really responsible for consumer's claims.
It is prospected that rice-branding will be developed and extended further. The reasons are the followings.
1) Producers (mainly RPCs) can easily extend the market demand of rice by establishing rice brands based on commodity differenciation and advertisement.
2) Consumers prefer high quality rice owing to income increase. Moreover consumers reveal that they want to purchase various types of rice packing and various uses of rice. Therefore it is necessary to establishing rice brands that can be easily recognized by consumers, based on quality differenciation and various outfits of rice packing.
3) Marketing agents can reduce marketing costs by establishing rice brands with unified rice quality and packing, which can lead to increase the marketing agents' share in retail market.
In order to generalize rice brand system, the followings are needed.
1) In government side, government support and changes in government rice purchasing and supplying system are demanded. Rice is not just a main source of income to farmers but also main staple food to consumers, which is basically related food security.
Therefore rice-branding may not be established just by reflecting demand and supply of rice. Also, rice-branding may be affected by the government rice purchasing and supplying system. Furthermore foreign rice market is open to Korean rice market, which may threaten Korean rice farmers. Thus it is very important government supports rice farmers in order to compete with foreign rice.
2) It is demanded that the area covered by one specific rice brand has to be readjusted. Currently rice brands may not really reflect differenciation of rice quality, rice varieties, and rice production technology, etc. Therefore it is expected that one specific rice brand may be differenciated with one another in terms of rice quality, varieties, or rice production technology, which may lead to readjustment of the rice production areas covered by current one specific rice brand.
On the other hand, low quality rice may be expected differenciation in terms of price and various types of rice packing. Enlargement of the rice production areas covered by one specific brand may be necessary in order to bring reduction of marketing costs in low quality rice.
3) In order to establish rice brand system in Korea, it is very important rice producers may change their conventional understanding of rice brands. Since rice variety may be the most important factor in rice quality, it is necessary to develop rice varieties that can be properly adaptable to production conditions in specific regions.
4) Current marketing strategy of branded rice may not really follow up consumer's preference and purchasing behavior. Therefore it is necessary of branded rice producers to have marketing strategy focused on consumer's needs and purchasing behavior.
Owing to the per capita income increase and changes in rice consumption pattern, rice consumers reveal demand differenciation in rice quality, which may be expected to accelerate consumption of branded rice. Therefore it is needed and expected that rice brand system may be further established.
Government support and better understanding of the concept of brands by rice producers are essential in developing rice brand system in Korea.