Analysis of willingness to pay for ‘Ketakasi’ ground coffee in Jember Regency

Abstract

Willingness to pay (WTP) has been widely used to measure the value of an item, both private and public goods, also shared resources. More recently, the WTP concept is also applied to marketing management for product development and pricing strategies. Ketakasi ground coffee is a premium Robusta coffee product of Jember Regency. The price of Ketakasi ground coffee per package with a net weight of 160 grams was sold at IDR 15,000, relatively more expensive compared to the price of branded ground coffee product which were sold at an average of IDR 12,000 per pack. Perception about the price of Ketakasi ground coffee which was considered expensive by consumers could make an obstacle for producers to achieve the expected target customers. This research aimed to determine the value of WTP of Ketakasi ground coffee; and factors influencing the WTP. A total of 60 respondents were interviewed in this research. Average value of consumers’ willingness to pay was analyzed by the descriptive statistics, while the factors influencing the willingness to pay consumers were analyzed by logistic regressions. Results showed that the value of consumers’ WTP reached IDR 16,000 per pack. This value was actually higher compared to the current market price, i.e., IDR 15,000, with consumer surplus of IDR 1,000. The taste of local coffee was identified as the main reason why consumers willing to pay higher than the current market price. Factors significantly influencing consumers’ WTP of Ketakasi ground coffee were consumer’s gender, types of jobs, and income.