Rice Policies For Long Tail Market Creating Innovations: Empirical Study On Consumers' Cognition and Behavior in Japan

Asia-Pacific Journal of Regional Science
https://doi.org/10.1007/s41685-021-00209-4
ARTICLE
Rice policies for long‑tail market‑creating innovations:

empirical study on consumers’ cognition and behavior
in Japan
Lily Kiminami1 · Shinichi Furuzawa1 · Akira Kiminami2
Received: 24 February 2021 / Accepted: 13 July 2021

© The Japan Section of the Regional Science Association International 2021
Abstract
Although rice production adjustments were officially abolished in 2018, they still
exist in the form of game equilibria and customary institutions in Japan. However,
market-creating innovations are considered to be able to change the culture of the
entire society, including the cognition of producers and consumers towards rice,
rice products and rice cultivation. Therefore, the purpose of this study was to clar-
ify the necessity of rice policies for long-tail market-creating innovations in Japan.
Specifically, structural equation modeling (SEM) and cognitive map analysis were
introduced in a questionnaire survey of Japanese consumers. The following analyti-
cal results were obtained. First, rice policies that promote consumers’ independent
orientation for rice consumption including their potential needs about rice such as
information, environment, packaging, safety, health, and various ways of eating, etc.
are required. Second, Japan’s rice market needs to be transformed from a short tail to
a long tail through market-creating innovations. Finally, rice policies to promote the
businesses conducted in partnership with consumers and local residents for “Creat-
ing Shared Value” through organizational learning and stakeholder management are
also required.
Keywords Market-creating innovation · Long tail · Rice policy · SEM · Cognitive

map · Japan
JEL Classification O31 · Q18
* Lily Kiminami
kiminami@agr.niigata-u.ac.jp
Shinichi Furuzawa
furuzawa@agr.niigata-u.ac.jp
Akira Kiminami
akira@mail.ecc.u-tokyo.ac.jp
1
Niigata University, Niigata, Japan
2
The University of Tokyo, Tokyo, Japan
13
Vol.:(0123456789)
1 Introduction
Generally, food demand is affected by prices, income, preferences (including food

culture), information and policies. Figure 1 shows the changes in the rice purchase
volume per capita and rice price (both in nominal and real term) from 1963 to 2019.
The rice purchase volume per capita has continued to decrease from 86.5 kg in 1963
to 20.9 kg in 2019.
Japanese rice market so far is supposed to be a short tail as shown in Fig. 2. There
are products in the volume zone that meet the actual needs such as deliciousness,
savings, and brands, but they are not satisfied enough. In addition, the short tail part
is the current niche market, which consists of implicit needs (health, safety, environ-
ment) and value oriented (usage/experience) areas. The improvement of rice taste
and branding during this period has not led to the expansion of rice consumption
(suppression of decrease). For example, as in the taste ranking by the Japan Grain
Inspection Association, the number of special A rank production areas has increased
from 13 in 1989 to 55 in 2018. In addition, traditional branding has progressed
excessively, and many rice products are not appreciated by consumers, neither ben-
efitable for producers, although the number of local brands is increased remarkably
from 537 in 2007 to 893 in 2021. To change such a situation and transform rice
market to a long tail, policy transformation toward innovation creation, particularly
to ‘market-creating innovation’ was suggested by Kiminami et al. (2021a). Further-
more, as pointed out by von Hippel et al. (2011) that consumers can be active actors
in the processes of innovation creation. Therefore it is necessary to conduct research
and analysis on consumers cognition and behavior towards rice.
The purpose of this study is to conduct an analysis on consumers cognition and
behavior to draw implications for rice policies toward long-tail market-creating inno-
vations in Japan. First, in Chapter 2, selective literature reviews on consumer choice
and innovation policy will be conducted and research question will be set based on
the review results. After giving an overview of rice consumption in Japan, we will
introduce SEM (structural equation modeling) analysis and cognitive map analysis
to the results of questionnaire survey of consumers for answering the research ques-
tion in Chapter 3. Finally, we will derive policy implications for the sustainable agri-
cultural and rural development in Japan including rice industry based on the analyti-
cal results.
2 Literature review and research question for the study
2.1 Literature review
The conventional consumer choice theory in economics has been extended to allow
factors such as the cost of gathering information, imperfections in the perception
of information and limitations to consumers’ cognitive powers in gathering and
processing information. As argued by Anderson (2006) that e-commerce and other
new technologies improve efficiency by encouraging the entry of new producers and
13
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Fig. 1 Trend of rice price and annual purchasing quantity per capita. Source: Ministry of Internal Affairs
and Communications “Family Income and Expenditure Survey”, “Consumer Price Index”
Fig. 2 Current rice market in Japan
innovations, creating a “long tail” of niche products while reducing the market share
of previously popular products. On the other hand, Kendall and Tsui (2011) studied
the strategic interaction between hits and niches in their pricing, entry, and innova-
tion decisions using a model of competition under product differentiation and gen-
eralized cost structure. They pointed out that industries in which firms innovate low
variable/high fixed cost technologies tend to move toward superstar effects, while
those where firms innovate low fixed cost /high variable cost technologies tend to
move toward long tails effects.
Previous studies on the long-tail market have usually associated with the develop-
ment of the Internet, music streaming services and book e-commerce sites as typi-
cal examples while there are only a few studies on grocery markets. However, the
development of long-tail market requires not only an efficient distribution system
for a wide variety of products and services, but also the existence of consumers with
13
diverse niche needs and suppliers who can provide products and services that meet
the needs of consumers. Salvador et al. (2020) found that venture companies that
flexibly respond to the niche needs of consumers are developing sustainably. They
pointed out that business success in long-tail markets requires reducing the cost of
creating and maintaining a large assortment on the supply side, and reducing the
cost of consumers exploring a large assortment on the demand side. Richards and
Rabinovich (2018) analyzed the impact of assortment on sales value for an online
grocery retail market and find that a long-tail effect exists. According to the result
from an empirical analysis conducted by Kiminami et al. (2021b) on the rice retail
market (especially the e-commerce market) in China, the retail rice market is under-
going dynamic change in which the externalities of consumption in the two-sided
market are modernized and sustained through cumulative market feedback. Moreo-
ver, von Hippel et al. (2011) proposed a new innovation paradigm that emphasizes
the role of consumers as innovators.1 In this paradigm, innovation consists of three
phases: consumers develop new products for themselves, other consumers evaluate
and improve them, and producers enter when market potential is clear.
However, innovation policy is relatively new to the agenda of policy makers,
and its interest has risen rapidly since the mid-1990s. It has been categorized into
three types (Edler and Fagerberg 2017): “Mission-oriented policy” (Ergas 1986),
which provides new solutions to specific political issues; “Invention-oriented pol-
icy”, which focuses on the R&D/invention stage and leaves exploitation and diffu-
sion stage to the market mechanism; “System-oriented policies”, which focuses on
the interactions between different parts of the system in recent years. In Innovation
Policy Review by the OECD (2020),2 it provides a comprehensive assessment of the
innovation systems of individual members of partner countries, and provides spe-
cific recommendations for policies that affect the performance of innovation.
As Edler and Fagerberg (2017) pointed out, the market failure argument, which is
invoked as a rationale for public funding has the problems of policy failure, perfect
knowledge, and the linear model. Hence, it is seen difficult to justify the design and
implementation of innovation policies broadly. As the responsibility for the different
components of the system distributed across different areas of government, such a
systemic understanding of innovation policy necessitates a ‘holistic’ perspective on
policy (Edquist 2011) as well as an effective coordination between different parts of
government, such as the ministries responsible for knowledge creation, skills-pro-
duction, finance, and so on (Braun 2008; Fagerberg 2016). Japan’s rice innovation-
related policy has been emphasized on breeding so far and could be classified as an
‘invention-oriented policy’. In addition, since the distribution control system under
the old Food Control Law had a strong political mission that emphasized the stabil-
ity of rice production, there is a weak system-oriented innovation.
1
Consumer innovator is defined as a person who had innovated in software products or physical prod-
ucts from scratch or improving an existing for non-work purpose within the last three years.
2
OECD Review of Innovation Policy (https://www.oecd.org/sti/inno/oecd-reviews-of-innovation-policy.
htm).
13
On the other hand, Christensen et al. (2019) categorize innovation into three
types: sustaining, efficiency, and market creating. It insists that “All innovations are
important to keep the economy vibrant, but especially market-creating innovation
plays an important role and is a strong foundation for sustainable economic pros-
perity”, because market-creating innovations transform culture. The institution of
a society reflects the culture and values of the people of that society, institutional
change needs to be elicited by cultural transformation. Simply introducing a system
is not effective in promoting economic growth and sustainable development. Fur-
thermore, the ability of policy to improve market efficiency is limited by the knowl-
edge that policymakers hold regarding the cost structure and other parameters of
the affected industries. Zilberman et al. (2019) addressed the importance of policy
design that does not diminish entrepreneurship in the food and agriculture sector.
In addition, Kiminami et al. (2021a) analyzed the relationship between Japan’s
rice policy and innovation in rice cultivation so far. The bottlenecks in innovation
creation in Japan’s agriculture and rice cultivation are considered that agriculture
policies including rice policy (pushing institutions) are not having the desired effects
on creating and sustaining well-functioning system. Although rice production
adjustment was officially abolished, it still exists in the form of game equilibrium
and customary institutions. Even if there are structural reform conditions (liquida-
tion measures) in the economic domain, a major innovation has not occur due to
Peasantism as the cultural belief system was dominant in the political and social
domains for institutions. Therefore, it is necessary to conduct research and analy-
sis starting from the consumption/demand side by considering consumers as active
actors in the processes of innovation creation.
2.2 Research question for the study
Here, we consider the issues for inducing market-creating innovation through an

analysis of the actual situation in the three segments of “utilization/experience
value oriented,” “innovation orientation” and “creating shared value orientation”
(Table 1). First, the segment of “utilization/experience value oriented” includes
consumer direct sales (co-op direct sales), food education (school lunch), cooking
classes, and food tourism (Local cooking tour, cultivation experience) that the con-
sumers can have various experiences from the process of rice consumption. The
characteristics of market / corporate strategy and organizational behavior are strong
as a niche market strategy, and business diversification. It also has non-profit busi-
ness in the educational activities. The level of social and environmental value is
middle while the level of innovativeness is low in general and some business models
face the problem of low feasibility.
Next, the segment of “innovation-oriented” includes B2C and B2C2C includes
the businesses such as EC market, business services utilizing SNS and apps. It also
has the outbound and inbound food tourism, etc. Typical examples of these are EC
sites and recipe sites that have been rapidly expanding along with the development
of ICT in the recent decade. The characteristics of management and market are con-
sidered as two-sided markets and consumer interactions. Overall, many businesses
13

13
Table 1 Business cases in the long tail of rice market
Segment Utilization and experience value orientation Innovation orientation Creating shared value orientation
Meanings of consumer activities Experience Experience + Creation Experience + Creation + Collaboration

Business model (Possibility) – Direct sales to consumers – B2C2C type EC market – Partnership with consumers and residents (
with Cross-industrial collaboration, forma-
tion of industrial cluster)
– Food education and cooking school – SNS/ Applications
– Food tourism – Outbound/Inbound Food Tourism
Representative cases – Direct sales from producer to consumer – EC direct market (B2C2C) – CSA(Community-supported agriculture)
by Co-op
– Utilization of local rice in school lunch – Recipe site (C2C) – CSA(Community-supported agriculture)
– Local food tour – Special recipe Cooking by using the – Paddy terrace Ownership system
imported rice
– Cultivation experience – Consumer participatory system for rice
breeding?
Characteristics of market/corpo- -Diversification of business -Two-sided market (Platform business) -Collective cognitive change through organi-
rate strategy and organizational zational learning
behavior
-Niche market strategy -Interaction of consumers -Stakeholder management
-Non-profit business
Socio-environmental value (Middle) (Middle) (High)
Innovativeness (Low) (High) (Middle & High)
in this segment are highly innovative but their social and environmental value is at a
medium level in general. In order for the long-tail market to function, it is important
to have a large number of products for consumers to choose from and online sales
play a major role in it. According to the survey by the Rice Stable Supply Support
Organization, the percentage of consumers who buy rice from online is on the rise,
which has reached around 8% in 2019.3
Finally, the segment of “Creating Shared Value4” includes the businesses con-
ducted in partnership with consumers and local residents. CSA (community sup-
ported agriculture) and consumer participated business development can be a typical
example. The characteristics of management and market are considered as collec-
tive cognitive change through organizational learning and stakeholder management.
There are both medium and high levels of innovation while most of the businesses
have high social and environmental value as a whole. In the segment of “Creating
Shared Value”, those with high innovation are considered to be social businesses
with high social impact through market-creating innovation.
Based on the results of the above literature review and the consideration about
the strategies of innovation for Japan’s rice industry, we raise the following research
question.
Research question: If consumers can be active actors in the processes of innova-
tion creation in Japan’s rice industry?
To answer the above question, we will give an overview of situation of rice con-
sumption to verify that market-creating innovation has not been created in Japan’s
rice industry so far, and introduce structural equation modeling (SEM) and cognitive
map analysis using the data of authors’ original questionnaire survey of consumers
to verify that rice policies or strategies for long-tail market-creating innovation are
required in the following chapter.
3 Analytical results
3.1 Situation of rice consumption in Japan
Here, we give an overview of the current state of rice consumption in Japan from
the perspective of international comparison. To consider differences in preferences
(food culture), an analysis will be conducted using cross-section data by country for
the two groups. That is, the Asian group whose staple food is rice and the Western
group whose staple food is other than rice. Looking at the relationship between per
capita rice consumption and income (Fig. 3), it is shown that rice consumption is
lower in high-income countries than in low-and-middle-income countries in Asian
group. However, rice consumption is slightly higher in high-income countries in
3
See https://www.komenet.jp/data/jukyuudb/jukyuudb1/ for details.
4
Creating Shared Value (CSV) is the idea that a company creates social value by working to solve social
needs and social problems, and as a result, economic value is created. See Porter and Kramer 2011 for
details.
13
Fig. 3 Quantity of rice consumption and GDP per capita. Note: Quantity of rice consumption is “rice
and products”. Asia group includes Japan (JPN), China (CHN), Indonesia (IDN), Malaysia (MYS), Phil-
ippines, PHL), Korea (KOR),Thailand (THA), Vietnam (VNM). West includes USA, UK, Italy, Aus-
tralia, Canada, Germany, France. Source: Price (2019) is collected from NUMBEO HP. https://www.
numbeo.com/cost-of-living (2020/12/28 Accessed. Quantity of consumption (2018) is collected from
FAO HP “FAOSTAT New Food Balances”. (2020/12/28 Accessed. GDP per capita is collected from
World Bank “World Development Indicators”. (2020/12/28/ Accessed)
Fig. 4 Quantity of rice consumption and relative price of rice. Note: Quantity of rice consumption is
“rice and products”. Source: Same as Fig. 3
Western group. In addition, Japan has the lowest rice consumption among Asian
countries. South Korea, whose income level is almost the same as Japan, consumes
more rice than Japan. From this, it is considered that factors such as prices, prefer-
ences, information, and policies other than income influence rice consumption in
Japan and South Korea.
Next, looking at the relationship between rice consumption and rice prices, the
variation in rice prices is small in Western group, while it is large in Asian group
(Fig. 4). And it is clear that the higher the rice price, the lower the consumption in
Asian group. Moreover, the price of rice in Japan is the highest, and it deviates sig-
nificantly upward from the approximate straight line. This could be considered that
13
Table 2 Descriptive statistics of variables

Variables Unit Mean S.D Minimum Maximum
Dependent variable Annual purchase (kg/person) 40.7 17.0 20.9 86.5

quantity of rice per
capita
Independent variable Rice price (real (yen/kg) 464.9 75.4 330.6 598.9
term)
Bread price (real (yen/100 g) 45.5 1.7 40.4 50.1
term)
Noodles price (real (yen/100 g) 53.1 5.8 38.8 64.8
term)
Annual consumption (yen/person) 1,021,878 200,796 508,215 1,210,546
expenditure per
capita (real term)
the level of rice consumption in Japan is affected not only by rice price but also by
other factors such as food culture, information, and rice policies, etc.
Furthermore, the demand function of rice is measured to clarify the self-price
elasticity of demand, cross-price elasticity, income (consumption expenditure) elas-
ticity, and trends in rice consumption using time-series data. The demand function
of rice is expressed by Eq. (1).
(1)
( )
Qr = f Pr, Pb, Pn, P0 , Y
Here, Qr is the annual purchase quantity of rice per capita, Pr is the rice price, Pb
is the price of bread, Pn is the price of noodles, P0 is the price of market goods other
than rice, bread and noodles, and Y is the amount of annual consumption expendi-
ture per capita.
Of these, the annual purchase quantity of rice (Qr), rice price (Pr), bread price
(Pb), noodles price (Pn), and annual consumption expenditure (Y) are collected in
the Ministry of Internal Affairs and Communications “Household Survey”. Data for
workers’ households from 1963 to 1999, and for two-or-more-person households
from 2000 to 2019. The purchase quantity of rice and consumption expenditure are
divided by the number of household members and converted to per capita. For the
prices of other market goods (P0), the Ministry of Internal Affairs and Communi-
cations “Consumer Price Index” is used (2015 = 100). The descriptive statistics for
each variable are as shown in Table 2.
Equation (2) shows the specification model which uses a log–log type to measure
the rice demand function. To clarify the trend effect, the trend term (Trend: 1963 = 1,
1964 = 2,… 2019 = 57) is used. In addition, Prais-Winsten AR (1) regression (GLS
estimation) is used to deal with the problem of series correlation of error terms.
( ) ( )
ln Qr = 𝛼0 + 𝛼1 ln Pr ∕ P0 + 𝛼2 ln Pb ∕ P0
( ) ( ) (2)
+ 𝛼3 ln Pn ∕ P0 + 𝛼4 Ln Y ∕ P0 + 𝛼5 Trend + 𝜀
13
Table 3 Result of measurement Coefficient t-value

of rice demand function
Rice price: ln (Pr / P0) – 0.219 – 3.760 ***
Bread price: ln (Pb / P0) – 0.184 – 1.460
Noodles price: ln (Pn / P0) – 0.007 – 0.100
Annual consumption expendi- – 0.418 – 5.740 ***
ture per capita: ln (Y/ P0)
Trend term: Trend – 0.019 – 16.740 ***
Constant 10.102 15.040 ***
rho 0.548
R2 0.996
DW value 1.831
Note: ***Shows the statistical significance at 1% level
The measurement results are as shown in Table 3. R2 is 0.996 and DW value is

1.831 (the closer it is to 2, the better), and the model has high explanatory power
and good results are obtained. The following four points can be pointed out from
this result. First, the self-price elasticity of rice is negative and significant, so rice
demand is elastic with respect to price. As the price of rice falls, the quantity of
rice purchase may increase. Secondly, the elasticity of consumer spending is nega-
tive and significant, indicating that rice is an inferior good as a whole. Thirdly, the
cross-price elasticities of bread and noodle were not significant respectively indicat-
ing that although bread and noodles were not crude substitutes for rice but it can’t be
said that their price changes have not influenced the changes in the amount of rice
purchase. Fourthly, the sign of the coefficient of the trend term was negative and sig-
nificant. Rice purchase volume is declining as a trend.
3.2 Motives for rice consumption and preferences for rice policy
A web-based questionnaire survey was conducted to clarify the motives for rice
consumption and consumers’ preference for rice policy (see Appendix Table 7 for
the results of simple tabulation of multiple-choice questions). The investigation
was outsourced to Cross Marketing Co., Ltd. and conducted from September 8th
to September 9th, 2020 after designing the original questionnaire. Samples are col-
lected according to the ratio of the sex, age (7 categories from 18 to 79 years old),
and place of residence (Hokkaido/Tohoku, Kanto, Koshinetsu, Tokai, Kinki, Chu-
goku, Shikoku, Kyushu/Okinawa) in the census. The number of collected samples
is 1805. In the following, 1387 samples were used in SEM (covariance structure
model) analysis, excluding 418 samples who answered “I don’t know / do not want
to answer” when asked about income.
As a variable preparation used in the analysis, principal component analysis was
performed for the answers to the questions regarding rice consumption motives
(reasons for eating rice and rice-related products as staple foods) (Table 4). The
cumulative contribution ratio up to the second main component is 45.4%, which is
generally a good result. Since the score of the first principal component is positive
13
Table 4 Results of PCA about motives for rice consumption

Ratio 1st component 2nd component
(%)
Because it is delicious 75.5 0.22 0.52

Because it is a request of my family / cohabit- 12.6 0.23 – 0.40
ants
Because it is cheap 8.7 0.29 – 0.38
Because it can be eaten in different way 26.4 0.48 0.03
Because I want to save time for cooking and 3.7 0.34 -0.54
tidying up
Easy to eat 33.6 0.49 0.25
Because it is easy to store 19.8 0.48 0.27
Cumulative contribution ratio 29.0% 45.4%
Interpretation of components Way of eating oriented Functionality oriented
(high-low) (high-low)
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in all items, it can be interpreted as way of eating oriented (high-low). The second
principal component can be interpreted as functionality oriented (high-low) because
positive and the large items of the score are “because it is delicious”, “because it is
easy to store”, and “easy to eat”, while the negative and large items of the score are
“because I want to save time for cooking and tidying up”, “because it is a request
of my family/cohabitants”, and “because it is cheap”. For the variables of rice con-
sumption motives, the score of each principal component was used.
Here, we use Structural Equation Modeling (SEM or covariance structure analy-
sis), to identify the relationship between consumer constraints, preferences and pur-
chasing behavior, and to clarify the process of formation of the needs for rice and
clarify their influence on consumers’ preferences for rice policy at the same time.
Figure 5 shows the framework of covariance structure analysis, and Table 5 shows a
list of explanatory variables and descriptive statistics.
It is assumed that consumer attributes (social economic attributes) and con-
sumption motives influence consumer minds (innovation-oriented consumer, self-
determination for rice purchase) and the conditions for rice demand (conditions
13

Table 5 Explanation and descriptive statistics of variables

Components of Variable Name of variables Explanation Mean Minimum Maximum
13
Socio-economic attributes Sex Female: 0, Male: 1 0.51 0 1
Age 18–19 years old: 1, 20 s: 2, 30 s: 3, 40 s: 4, 50 s: 5, 60 s: 6, 4.51 1 7
70 s: 1
Income 0 to less than 3 million yen: 1, 3 to less than 5 million yen: 25 2.62 1 5
to less than 7 million yen: 3, 7 to less than 10 million yen: 40
to 10 million yen or more: 5
Motive for consumption Way of eating oriented Score of 1st principal component (Reason for eating rice and 0.65 0 2.53
rice-related products as staple food)
Functionality oriented Score of 2nd principal component 0.45 -0.94 1.07
Innovation oriented Innovation I don’t like it at all: 1, I don’t like it very much: 2, Neither: 3, I 3.01 1 5
like it a little: 4, I like it very much: 5
Self-determination for rice purchase Decision I don’t think so: 1, I don’t think so much: 2, I can’t say either: 3.59 1 5
3, I think so a little: 4, I think so: 5
Conditions for increasing rice consumption Price Condition: Price range goes down (not applicable: 0, applica- 0.39 0 1
ble: 1)
Taste Condition: Tastes better (not applicable: 0, applicable: 1) 0.38 0 1
Information Condition: Information on production method is clarified (not 0.09 0 1
applicable: 0, applicable: 1)
Environment Condition: Environmentally friendly (not applicable: 0, appli- 0.10 0 1
cable: 1)
Package Condition: Packaging etc. becomes attractive (Not applicable: 0.03 0 1
0, Applicable: 1)
Safety Condition: Higher safety (not applicable: 0, applicable: 1) 0.16 0 1
Health Condition: Good for health (Not applicable: 0, Applicable: 1) 0.28 0 1
Diversity Condition: You can eat in diversified ways (not applicable: 0, 0.15 0 1
applicable: 1)
Not increase No more increase (not applicable: 0, applicable: 1) 0.27 0 1
Table 5 (continued)
Components of Variable Name of variables Explanation Mean Minimum Maximum
Policy preference Production adjustment Policy to adjust productions to keep prices high 2.83 1 5
(Not good at all: 1, not very good: 2, neither: 3, a little good: 4,
very good: 5)
Same below
Customs duty Policy to impose tariffs on imported rice 3.34 1 5
Scale expansion Policy to encourage scale-up to reduce costs 3.53 1 5
New technology Policy to encourage the introduction of new technologies (ICT, 3.76 1 5
etc.) to improve efficiency and stabilize quality

New utilization Policy to promote rice production for new utilization method 3.71 1 5
(rice flour, etc.)
Environmental conservation Policy to encourage the introduction of environmentally 3.80 1 5
friendly production methods (organic farming, etc.)
Interaction Policy to encourage interaction between producers and con- 3.59 1 5
sumers
Development of manager Policy to promote the human resource development of manag- 3.86 1 5
ers for rice farms
13
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Fig. 6 Path diagram of estimation result
for increasing rice consumption), and consumer minds also influence the demand
conditions for rice. We also assume that consumer minds and the conditions for
rice demand influence their policy preferences. The socio-economic attributes are
set as constraints and control variables are sex, age, and income.
Regarding the preferences for rice policy, three potential variables are
assumed: protection policy (production adjustment, customs duty), innovation
policy (scale expansion, new technology, new utilization method of rice) and sus-
tainability policy (environmental conservation, communication between produc-
ers and consumers, human resource development of manger). Demand conditions
for increasing consumption (excluding “do not increase”) are classified into two
latent variables: overt demand (price, taste) and the potential demand (informa-
tion, environment, packaging, safety, health, variety).
Figure 6 and Table 6 summarize the path diagram and estimated coefficients
of the results. The model fit is relatively good (CFI = 0.766, RMSEA = 0.079).
The results clarified that consumers’ innovation orientation and self-determina-
tion of rice purchases influence each condition for increasing rice consumption,
and these conditions affect consumers’ preference for rice policy. Socio-economic
attributes (sex, age, income) and rice consumption motives (especially way of
eating oriented) also influence these processes to some extent (used as control
variables here). The following important points are obtained from the estimation
results.
First, there are few answered that they will not increase rice consumption any
further among the consumers who are highly innovation oriented and who are
highly self-determined in purchasing rice, which means that the consumers who
are particular about rice and who are innovation oriented can increase the con-
sumption of rice if some conditions are met. Secondly, the consumers with overt
13
Table 6 Result of the estimation
Coefficient p-value Coefficient p-value
Protection policy Overt demand 0.115 0.049 ** Innovation Sex 0.353 0.000 ***
Potential demand 0.197 0.033 ** Age -0.057 0.002 ***
Not increase 0.016 0.192 Income 0.102 0.000 ***
Innovation 0.003 0.555 Way of eating oriented 0.250 0.000 ***
Decision 0.004 0.271 Functionality oriented – 0.105 0.249
Innovation policy Overt demand 0.553 0.000 *** Decision Sex – 0.722 0.000 ***
Potential demand 0.851 0.000 *** Age 0.103 0.000 ***
Not increase -0.051 0.169 Income – 0.068 0.020 **

Innovation 0.045 0.003 *** Way of eating oriented 0.258 0.000 ***
Decision 0.002 0.873 Functionality oriented 0.072 0.529
Sustainability policy Overt demand 0.484 0.002 *** Latent variables
Potential demand 1.795 0.000 *** Overt demand Condition: Price 1.000
Not increase 0.055 0.195 Condition: Taste 1.234 0.000 ***
Innovation 0.038 0.028 ** Potential demand Condition: Information 1.000
Decision 0.022 0.079 * Condition: Environment 1.322 0.000 ***
Overt demand Sex 0.041 0.022 ** Condition: Package 0.416 0.000 ***
Age – 0.020 0.000 *** Condition: Safety 1.998 0.000 ***
Income 0.005 0.407 Condition: Health 2.138 0.000 ***
Way of eating oriented 0.118 0.000 *** Condition: Diversity 1.063 0.000 ***
Functionality oriented 0.077 0.003 *** Protection policy Production adjustment 1.000
Innovation 0.031 0.000 *** Customs duty 5.456 0.007 ***
Decision 0.017 0.008 *** Innovation policy Scale expansion 1.000
Potential demand Sex – 0.010 0.173 New technology 1.274 0.000 ***
Age – 0.001 0.735 New utilization 1.186 0.000 ***
13

Coefficient p-value Coefficient p-value
Income 0.001 0.713 Sustainability policy Environmental conservation 1.000
13
Diversity oriented 0.092 0.000 *** Interaction 0.910 0.000 ***
Functionality oriented – 0.008 0.454 Development of manager 1.038 0.000 ***
Innovation 0.016 0.000 *** Covariance of error term
Decision 0.004 0.087 * Sex Age – 0.033 0.152
Not increase Sex – 0.072 0.002 *** Income 0.011 0.538
Age 0.033 0.000 *** Way of eating oriented – 0.022 0.004 ***
Income – 0.004 0.631 Functionality oriented – 0.004 0.364
Way of eating oriented – 0.095 0.000 *** Age Income – 0.088 0.149
Functionality oriented – 0.099 0.003 *** Way of eating oriented 0.139 0.000 ***
Innovation – 0.060 0.000 *** Functionality oriented 0.132 0.000 ***
Decision – 0.036 0.000 *** Income Way of eating oriented 0.022 0.262
Functionality oriented 0.018 0.167
Way of eating oriented Functionality oriented 0.078 0.000 ***
Note: ***, ** and * show the statistical significance at 1%, 5%, and 10%, respectively
and potential needs for rice evaluate sustainability and innovation policies, and
innovative consumers particularly evaluate innovation policies.
3.3 Cognitive structure toward rice cultivation, agriculture and rural

development
In the next, we will analyze the data of free-form questions in the items of ques-
tionnaire survey of consumers (see Appendix Table 8). Specifically, the cognitive
structure of consumers is visualized using co-occurrence network analysis (3–5
keywords are given by each respondent to the questions about < what is required of
Japanese rice > and < what is required for Japanese rice cultivation and agriculture /
rural areas > . The co-occurrence network is a diagram in which the relationships of
words appeared in common (co-occurrence relationships) are displayed by circles
and lines. It is thought to be effective to analyze the co-occurrence relationships of
the keywords obtained by the free association method to structure the potential fac-
tors and concepts.
The software of KH Coder (Higuchi 2014) was used in this research, and 1,805
samples were used for the analysis. A data cleaning was conducted in the analysis,
such as unification of notation fluctuations (conversion of hiragana into kanji), des-
ignation of forced extraction of words (“local production for local consumption”,
“new rice”, “pre-washed rice”), designation of unused words (“none”, “nothing in
particular” and “I can’t think of it”).
From the results of the analysis, the consumers’ cognitive structure regard-
ing < what is required for Japanese rice > can be classified into four factors (Fig. 7a):
economic efficiency (competitiveness), environmental conservation, social-
ity (safety/security, health), and diversity. And the consumers’ cognitive struc-
ture regarding < what is required for rice cultivation, agriculture and rural areas
in Japan > can be organized according to the four elements of (Fig. 7b): economic
efficiency (competitiveness), environmental conservation, sociality (safety and secu-
rity), and attractiveness of rural areas.
4 Conclusions and policy implications
This study draws the following conclusions based on the above analytical results.
First of all, as clarified by SEM analysis that the consumers who are particular about
rice and who are innovation oriented can increase the consumption of rice if some
conditions are met. Rice policies to promote consumers’ independent orientation for
rice consumption including their potential needs toward rice such as information,
environment, packaging, safety, health, and various ways of eating, etc. are required.
Moreover, it was also clarified that the consumers with overt and potential needs for
rice evaluate sustainability and innovation policies, and innovative consumers par-
ticularly evaluate innovation policies. Secondly, from the cognitive map analysis, the
consumers’ cognitive structure regarding < what is required for Japanese rice > was
classified into economic efficiency (competitiveness), environmental conservation,
13
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Fig.7 a Co-occurrence network analysis about < What is required for Japanese rice. b Co-occurrence net-
work analysis about. < What is required for rice cultivation, agriculture and rural development in Japan >
13
Fig. 8 Development of rice market through market-creating innovation
sociality (safety/security, health), and diversity. And the cognitive structure regard-
ing < what is required for rice cultivation, agriculture and rural areas in Japan > was
classified into economic efficiency (competitiveness), environmental conservation,
sociality (safety and security), and attractiveness of rural areas. This means that con-
sumers who have an intention to innovate and create shared value in addition to the
use and experience value will play a central role in discovering new types of rice
products and new ways of eating and new methods of rice cultivation, and inheriting
the food culture related to rice through communication among stakeholders (Fig. 8).
Therefore, rice policies to promote the businesses conducted in partnership with
consumers and local residents for “Creating Shared Value” through organizational
learning and stakeholder management are called for. Meanwhile, research on the
actual state of consumer innovation in the long-tail rice market is seemed to be nec-
essary and this will be our next research agenda.
Appendix
13

Table 7 Simple tabulation results for choice questions in consumer surveys (%, N = 1387)
Socio-economic attributes
Sex Please answer your sex
13
Male Female
51.3 48.7
Age Please answer your age
18–19 20 s 30 s 40 s 50 s 60 s 70 s
2.7 13.5 15.4 17.5 15.9 19.5 15.5
Income Please answer your household income
0 to less than 3 million 3 to less than 5 million 5 to less than 7 million 7 to less than 10 mil- 10 million yen or I don’t know / do not
yen yen yen lion yen more want to answer
24.1 27.8 20.9 16.0 11.2 -
Independence of consumer
Consumers’ innova- Do you like to improve and devise tools, accessories, sundries, toys, clothing, sporting goods, cars, household appliances, software, etc. in your
tion orientation daily life?
I like it very much I like it a little: Neither I don’t like it very much I don’t like it at all
10.1 25.2 32.9 19.0 12.8
Self-determination Do you decide which rice you usually eat?
of rice purchase
I think so I think so a little I can’t say either: I don’t think so much I don’t think so
40.8 19.3 13.8 9.9 16.2
Demand condition
Conditions for Under what conditions do you consume more rice than you currently have? (Multiple-selection)
increasing rice
consumption
Price Tastes become Information Environment- Packaging etc. Higher Good for You can eat Others No more
range better on produc- friendly becomes safety health in diversi- increase
goes tion method attractive fied ways
down is clarified
38.6 38.4 8.6 10.1 3.1 16.1 28.4 14.6 0.9 26.9
Policy preference
What do you think of the following rice policies?
Not good at all Not very good Neither A little good Very good
Policy to adjust productions to keep prices high 10.2 25.6 41.1 17.2 5.9
Policy to encourage scale-up to reduce costs 2.0 7.2 41.0 35.3 14.5
Policy to encourage the introduction of new technologies 0.9 3.4 35.9 38.1 21.7
(ICT, etc.) to improve efficiency and stabilize quality
Policy to promote rice production for new utilization 1.1 3.2 37.9 39.7 18.2
method (rice flour, etc.)
Policy to encourage the introduction of environmentally 0.8 2.5 34.7 40.0 22.0
friendly production methods (organic farming, etc.)
Policy to encourage interaction between producers and 1.3 3.4 45.0 36.0 14.4
consumers
Policy to impose tariffs on imported rice 3.9 9.5 47.9 25.7 13.1
Policy to promote the human resource development of 0.7 2.0 32.1 41.6 23.7
managers for rice farms
13
Table 8 Results of free-form questions in consumer questionnaires (%, N = 1805)

Rank Extracted Number of Rank Extracted Number of Rank Extracted Number of
words appear- words appear- words appear-
ances ances ances
What is required for Japanese rice

Q. Please list the keywords that come to your mind as < What is required for Japanese rice > (up to 3–5)
1 Delicious 803 11 Koshihikari 77 21 Organic 31
2 Safety 700 12 Sweet 61 22 New rice 28
3 Security 291 13 Brand 60 23 Fresh 27
4 Price 274 14 Good 53 24 Nothing 27
5 Cheap 202 15 High 46 25 Understand- 26
ing
6 Taste 182 16 Production 43 26 Production 25
area
7 Quality 177 17 Variety 41 27 Health 23
8 Pesticides 125 18 Supply 39 28 Cultivation 23
9 Stability 104 19 Eating 33 29 Improve- 22
ment
10 Rice 79 20 Sticky 33 30 Fragrance 21
Rank Extracted Number of Rank Extracted Number of Rank Extracted Number of
words appear- words appear- words appear-
ances ances ances
What is required for rice cultivation, agriculture and rural areas in Japan
Q. Please list the keywords that come to your mind as < What is required for rice cultivation, agricul-
ture and rural areas in Japan > (up to 3–5)
1 Safety 371 11 Production 94 21 Rice 48
2 Security 197 12 Quality 91 22 Young 45
person
3 Delicious 188 13 Machinery 82 23 Water 43
4 Pesticides 183 14 Cheap 69 24 Farm house- 41
hold
5 Stability 166 15 Scale 69 25 Supply 38
6 Succession 166 16 Nature 60 26 Difficulty 37
7 Price 124 17 Shortage 59 27 Variety 35
8 Agriculture 108 18 Aging 55 28 Labor 32
9 Efficiency 105 19 Environ- 53 29 Taste 31
ment
10 Training 104 20 Understand- 50 30 Improve- 30
ing ment
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Rice Policies For Long Tail Market Creating Innovations: Empirical Study On Consumers' Cognition and Behavior in Japan

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Asia-Pacific Journal of Regional Science

Rice policies for long‑tail market‑creating innovations:

Lily Kiminami1 · Shinichi Furuzawa1 · Akira Kiminami2

Received: 24 February 2021 / Accepted: 13 July 2021

Keywords Market-creating innovation · Long tail · Rice policy · SEM · Cognitive

JEL Classification O31 · Q18

Generally, food demand is affected by prices, income, preferences (including food

2 Literature review and research question for the study

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Fig. 2 Current rice market in Japan

2.2 Research question for the study

Here, we consider the issues for inducing market-creating innovation through an

Meanings of consumer activities Experience Experience + Creation Experience + Creation + Collaboration

3.1 Situation of rice consumption in Japan

Table 2 Descriptive statistics of variables

Dependent variable Annual purchase (kg/person) 40.7 17.0 20.9 86.5

Table 3 Result of measurement Coefficient t-value

Note: ***Shows the statistical significance at 1% level

The measurement results are as shown in Table 3. R2 is 0.996 and DW value is

3.2 Motives for rice consumption and preferences for rice policy

Table 4 Results of PCA about motives for rice consumption

Because it is delicious 75.5 0.22 0.52

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Fig. 5 Framework of SEM analysis

Table 5 Explanation and descriptive statistics of variables

etc.) to improve efficiency and stabilize quality

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Fig. 6 Path diagram of estimation result

Not increase -0.051 0.169 Income – 0.068 0.020 **

3.3 Cognitive structure toward rice cultivation, agriculture and rural

4 Conclusions and policy implications

Fig. 8 Development of rice market through market-creating innovation

Table 8 Results of free-form questions in consumer questionnaires (%, N = 1805)

What is required for Japanese rice

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2 Literature review and research question for the study

5LFH SULFH1RPLQDO 5LFH SULFH5HDO

Fig. 2 Current rice market in Japan

2.2 Research question for the study

3.1 Situation of rice consumption in Japan

Table 2 Descriptive statistics of variables

Table 3 Result of measurement Coefficient t-value

3.2 Motives for rice consumption and preferences for rice policy

Table 4 Results of PCA about motives for rice consumption

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Fig. 5 Framework of SEM analysis

Table 5 Explanation and descriptive statistics of variables

Fig. 6 Path diagram of estimation result

3.3 Cognitive structure toward rice cultivation, agriculture and rural

4 Conclusions and policy implications

Fig. 8 Development of rice market through market-creating innovation

Table 8 Results of free-form questions in consumer questionnaires (%, N = 1805)