Consumer buying decision eventually is influenced by the number of factors or reasons; this concept of decision making is rooted historically in personal, psychological, demographic, and social concerns of the consumer. There are numerous reasons to buy a brand in a given situation, but our objective is only to study the behavior of the consumer regarding his/her purchasing attitude by examining the significant /dominant reasons of buying a particular product in a given situation.
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As theory suggests that the consumers are usually choosing a brand they recognize. If the consumers do not choose the brand according to traditional theories, then what are the dominant factors that have a greater effect on the buying behavior of a consumer? A lot of controversies are arising while looking into the literature regarding the “consumer choice decision”, whether the decisions are based on some attributes of the product like quality, price, brand credibility, or on the basis of consumer attitude and intention, advertising, group influences, innovations, and brand loyalty, or the decisions are made on the ground of brand awareness.
So many important elements might have strong influence on buying decisions which need to be considered to understand the consumer’s buying decision making particularly in low involvement category of the products in an un-awareness situation.
Further, it seems highly essential to differentiate between buyer’s behavior toward a choice among various brands within the product category and the dimensions referring to reasons affecting choice of a buyer.
“The most situations facing every business are to identify the factors determining preferences for the brands with supporting reasons which affect consumer choice”. (Itamar and Nowlis, 2000), further, Wilson and Schooler (1991) found that “subjects who had analyzed their reasons for liking different brands of jams subsequently expressed preferences that corresponded less well to those of experts than the preferences of subjects who did not analyze the reasons for their attitudes”.
In many studies the marketers and researchers has recognized the effectiveness of the factors those affecting brand choice, moreover Brown (1950) in his study identified that, “physical characteristics of the brand, user’s experience with the brand, packaging, price, premiums, guarantees, habit, recommendation by friends, recommendation by experts, convenience of dealer’s location, personal salesmanship, dealer services, dealer prestige, advertising and display, special characteristics of the manufacturer, e.g., labor policy, location, etc., novelty, chance, availability, brand prestige or social acceptance”.
“Many choice situations occur outside of conscious awareness and with limited information search”, (Kivetz and Simonson, 2000). Further, there are evidences when some times non-conscious influences affect choice much more than are traditional concept.
Whenever the unawareness on the part of consumer about the brands and the consumer is supposed to make a choice in that condition, then what factors or reasons are there which persuade a consumer to choose any brand among from available brands?
The controversies about the concept of Consumer buying Decision help in knowing and testing the impact of the dominant factors/reasons on the consumer buying decision in a no-awareness situation, where a consumer is lacking any kind of information regarding the product category or/and about the available brands in that category of low involvement products.
The scope of study was to focus on consumer perception on brand choice based on some factors or reasons. The study specifically was designed to explore the phenomenon in which only frequently bought products are tested in an unawareness situation, where the consumer does not have any prior information and knows nothing about the available set of brands within the product category in a given situation.
The extent of the research was accelerated to compare the consumer responses of large city and a small town of rural area (i.e.; Karachi and Khairpur). The objective was to understand the consumer perception in different cultures and market segments that may help in developing an appropriate strategy to satisfy the needs of different customers accordingly.
1.2 Problem statement
The goal of this experiment was to empirically examine the buying behavior and decision making attitude of the consumer in a no-brand awareness condition of low involvement product categories as a general phenomena and find out any differences with respect to rural and urban consumer choices.
Research Questions:
1. How unawareness does differ from awareness of the brands?
2. How do consumers perceive on the products of low involvement?
3. What factors or reasons are there which persuade a consumer to choose any brand among from available brands?
4. How do consumers make the decision to buy the brand and what are the determinants dominating consumers’ purchasing decision making?
5. How rural and urban consumers differ on determinants dominating purchasing decision making?
The study may contribute and assist local marketers and managers to develop effective strategies regarding production, managing, and marketing of the products in a given marketplace, further;
To study the consumer response in unawareness situation.
To understand the consumer perception toward low involvement products.
To understand the differences in choice decision of rural and urban areas.
To evaluate the factors affecting consumer choice.
To help managers in developing appropriate and effective marketing strategies.
1.3 Hypotheses:
H1: Uniqueness/Innovation is the dominant reason for choice of a brand.
H2: Quality is the dominant reason for choice of a brand.
H3: Price is the dominant reason for choice of a brand.
H4: Packaging/Attribute is the dominant reason for choice of a brand.
H5: Group Influences is the dominant reason for choice of a brand.
H6: Company Credibility is the dominant reason for choice of a brand.
H7: There is no difference in dominant reason for choice of a brand in rural and urban area consumer.
1.4 Outline of the study
The basic purpose of the research was to explore and recognize the effects of important elements affecting the consumer’s preferences and relative actions to purchase and to identify major reason(s) to purchase in a given situation where the consumer has no prior knowledge about the brands under consideration set.
Expected Benefits of the study;
To have a better understanding of unawareness on the part of consumer where he/she is going to make purchase decision.
To realize how the consumer perceive on the low involvement product category, where little efforts are needed to make a purchase.
To understand the factors influencing purchasing decision in a given situation.
To assist the managers and marketers to know the dominant determinants of consumer decision and to develop the strategies particularly when introducing a new brand in a given market.
Definitions
The choice has been defined by different researchers in varied aspects, Flemming (1976) viewed the choice with supporting example by saying, that” the person walking down a road who hesitates at a fork in the road before choosing which route to take classically illustrates choice”.
Consumer Buying Behavior was defined by Schiffman, and Kanuk, (1997) as “the study of how individuals make decision to spend their available resources on consumption-related item, where they buy it how often they buy it and how often they use it”.
Low involvement refers to the premise that the consumers while making a purchase decision experiencing with little effort, time , and money to decide for a particular brand to buy, because the consumer has been buying frequently in that product category.
“Uniqueness refers as to be seen and viewed as different from others. Illustrative of consumers’ efforts to resist or counter the acceptance of popularized goods that symbolically convey conformity, consumers may dispose of goods that become popular and repeat the cycle in search of new and special products, innovations, and emerging fashion trends” (Snyder 1992; and Tepper, 1997).
Product quality may be defined as “the consumers’ judgment of the excellence of the product or service” (Zeithaml, 1988).Quality (perceived not conformity) is a prime factor that plays very dominant role in selection process.
Price may defined in its narrowest sense as “the amount of money charged for a product or service, and in broad sense it is the sum of all the values that customers give up in order to gain the benefits of having or using a product or service” (Kotler and Amstrong, 2008). Packaging can be defined as “to design and produce a wrapper or container for a product” (Kotler and Armstrong, 2008).
“A person’s groups consist of all the groups that have a direct (Face-to-face) or indirect influence on his/her attitudes or behaviors”. (Kotler and Keller, 2005).
Corporate reputation has been defined by Fombrun (1996) as a “perceptual representation of a company’s actions in past and prospects of future that are an aggregate of many personal judgments about the company”.
While Keller (1998) has defined company credibility as “the degree to which consumers do believe that a company can deliver products and services that satisfy most their needs and wants.”
CHAPTER 2:
LITERATURE REVIEW
2.1 Choice Decision
To choose a brand among from available brands of low involvement product category in a situation where consumer does not know about the brands under consideration seems very critical, because the most theories of consumer behavior support the awareness as a dominant factor in consumer choice. On the other hand it was also assumed that excess of every thing is dangerous, likely it can be guessed that more information may confuse the consumer about the brand to be selected. Jacoby, Speller, and Berning (1974) are of the opinion that “Consumers actually make poorer purchase decisions with more information”.
The research was intended to test the assumption that what may happen when the consumer is completely unknown about he brands under consideration in a low involvement product category. The choice is restricted toward the limited brands in different categories of low involvement products.
There is no disagreement on that every one is facing with a choice. If, however, the example is changed slightly, it is more doubtful whether we are still talking about a choice. The person walking on a sidewalk, when confronted with a puddle, changes his direction slightly and continues. In this case few people may say that a choice was involved.
Attitude of the consumer plays an important role in making decision making in a given situation. A consumer’s attitude and purchase intention towards a brand is not only a product of their cognitive evaluations of that individual brand but are also determined by their perception of other competing brands within the consideration set. (Ronnie, Anne, and Karinna, 2006).
2.1.1 Decision making Process [Fig. 2.1]
Need Recognition & Problem Awareness
Purchase Decision
Evaluation of Alternatives
Information Search
Post-Purchase Evaluation
Need Recognition
The buying process starts when the buyer recognizes a problem or need. Need recognition occurs when actual state differs significantly from desired state. It is triggered when a customer is exposed to either an internal or an external stimulus. “Hunger and thirst are internal stimuli, the color of a product, the package design, name of a brand mentioned by a friend, or an ad. are considered external stimuli” (William, 2002).
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It is widely accepted that the traditional problem solving approach involving rational decision making to the study of consumer choice may not be suitable for all situations, or is at least incomplete to understand choice behavior. “Limited information search and evaluation of alternatives led to a situation in which consumer choice is also driven by hedonic considerations” ( Dhar, and Wertenbroch, 2000). In general, a common distinction to be made is that while the utilitarian goods usually are primary instrumental and functional, hedonic goods provide fun, pleasure and excitement.
Consumer Information Search
“Consumer information search should yield a group of brands, sometime called the buyer’s evoked set (or consideration set), which are consumer’s most preferred alternatives” (Clow, and Baack, 2001).
Evaluation of Alternatives
“In close relation to information search, evaluation of alternatives has also gained a momentum in recent research” (Laroche, Kim, and Zhou, 2003). Their study on “consumer’s use of five heuristics (conjunctive, disjunctive, lexicographic, linear additive, and geometric compensatory) in the consideration set formation” found that “conjunctive heuristics is the most often used decision model in the consideration set formation for two product classes in the study” (here,Sun block brands and pens). “Conjunctive heuristics means that a consumer selects a brand only if it meets acceptable standards, the so-called cutoff point on each key attribute consumer regards as important” (Assael, 1998). In the non-compensatory method of evaluation, a consumer would eliminate a brand that does not fulfill the standards on one or two of the most important attributes, even it is positive on all other attributes.
“Brands, which will be selected to group purchase options, will also be considered during the alternative evaluation process” (Hawkins, Roger, and Kenneth, 1998).
Purchase Decision and Post-purchase evaluation
To select a specific brand after evaluation the buying and consuming it may consequently result in delighting, satisfaction, dissatisfaction, and disappointment about the selected brand.
It is essential to distinguish between the attributes per se and consumers’ perceptions of these attributes, because consumers differ in their perceptions. It is the perception that affects behavior, not the attribute itself. “Attribute” is often used to mean choice criteria, but this leads to confusion.
A vast amount of research has been and is being conducted on many of them (factors) individually. Testing the product, the advertising, and the package, is an old story. But seldom has an adequate overview been taken. Does the consumer pay more attention to the advertising-beyond a certain point, at least-than to the dealer’s salesmen? Would lower prices or improved quality be more preferred by the buyer? How important are such factors as the recommendations of experts or of friends and to what extent may the individual marketing firm control them? The most effective direction of marketing activities requires accurate answers to all of these questions.
The importance of the factors influencing choice has been recognized for many years by the researchers and marketers, as Brown (1950) identified as, “Physical characteristics of the brand, User’s experience with the brand, Packaging, Price, Premiums, guarantees, Habit, Recommendation by friends, Recommendation by “experts”, Convenience of dealer’s location, Personal salesmanship, Dealer services, Dealer prestige, Advertising and display, Special characteristics of the manufacturer, e.g., labor policy, location, etc., Novelty, Chance, Availability, Brand prestige or social acceptance”.
The weight of (no redundant) reasons in choice and, correspondingly, the degree to which the choice of reasons drives the choice of options vary across decisions and are likely to depend on the task, the context, the choice problem, and individual differences. In particular, when consumers are explicitly told to explain their decisions, it is reasonable to expect that the reasons that can be used to support considered options play a prominent role in the choice process. “A question that naturally arises is what factors determine preferences for reasons and how does a need to provide reasons affect choice?” (Itamar, and Nowlis, 2000).
Wilson and Schooler (1991) found that “subjects who had analyzed their reasons for liking different brands of jams subsequently expressed preferences that corresponded less well to those of experts than the preferences of subjects who did not analyze the reasons for their attitudes”.
Purchase decision
“Decision making is very complex phenomena where the consumer does not make a decision simply, and but to arrive at a final and concrete decision the consumer experiences sub-decisions (i.e.; What type of goods should be purchased, chased?, How much of an item should be purchased?, When should the purchase be made?, Where should the purchase be made?, How should the purchase be made, i.e., by telephone or in person, by cash or on credit, by husband or wife, and so on? What brand should be purchased? In many cases, the consumer is not conscious of the fact that he arrives at decisions with respect to all of these sub-decisions to purchase” (Brown, 1950).
2.2 Consumer Buying Behavior
Consumer Buying Behavior has been defined by Kotler, and Amstrong, (2001), as
“Consumers make many buying decisions every day. Most large companies research consumer buying decision in great detail to answer questions about what consumers buy, where they buy, how and how much they buy, when they buy, and why they buy”
A simple model of the consumer buying behavior deemed as the stimulus-response model. According to this model, marketing stimuli and other major force enter the consumer’s “black box” and produce certain responses. One in the black box these inputs produce observable buyer responses, such as product choice, brand choice, purchasing timing, and purchase amount.
“The consumer decision-making process does not occur in a vacuum. On the contrary, underlying cultural, social, individual, and psychological factors strongly influence” (lam, Hair, and McDaniel, 2002).
Cultural Factors
Culture represents the behavior, beliefs, and in many cases, the way we act learned by interacting or observing other members of society. In this way much of what we do is shared behavior, passed along from one member of society to other.
“In order to increase customer satisfaction the managers and marketers are trying to understand the real behavior and attitude of consumers in a given situation. The better the marketer understand the factors underlying consumer behavior, the better able they are to develop affective marketing strategies to meet consumer needs” (Assael, 1998).
2.3 Low Involvement
Hoyer and Brown (1990), examining the heuristic for low-involvement decision making, and found that consumers who are aware of the name of one of the brands in a product category will repeatedly choose that brand, even when it offers objectively determined lower quality. Consumers who are unfamiliar with the brand names often will experiment with and eventually settle on a brand that offers higher quality.
Time pressure commonly influences consumers’ opportunity to engage in effortful decision strategies. Payne, Bettman, and Johnson (1988) demonstrate that “consumers who are faced with making a choice under time pressure (lack of opportunity) will accelerate information processing, ignore certain pieces of information, or shift to simpler heuristics”. “Perhaps the simplest low-involvement decision heuristic involves the retrieval of previously formed affect associated with the product” (Peter and Nord, 1982).
2.4 Uniqueness/ Innovation
Uniqueness and Innovation play a significant role in making choice of a brand particularly in unawareness condition, as (Tepper, 1997) view it as “Conceptual models of social nonconformity recognize that behaviors that render a person different relative to other people may reflect several motivational processes, Although such a choice may at times differentiate the decision maker from others, this outcome is incidental to acting consistent with personal standards”.
Consumers’ need for uniqueness is also distinct from independence, a motivation that may inadvertently manifest in social different-ness as a result of adhering to one’s personal taste. Decisions shift the focus from the choice of options to the choice of reasons. “Buyers who explain their decisions and have high need for uniqueness tend to select unconventional reasons and are more likely to make unconventional choices” (Itamar, and Nowlis, 2000). Itamar, and Nowlis (2000) further support their view that “the effect of NFU (Need for Uniqueness) on choice emerges when consumers have the opportunity to explain their decisions and do not expect to be individually evaluated”. That is, the ability to explain, without concerns about others’ criticism, may allow greater use of unconventional arguments and unconventional choices that express uniqueness and independence. Further they argue that the need for uniqueness and autonomy is usually dominated by the desire for social approval and other pressures for conformity, when consumers are encouraged to explain their decisions and are not concerned about others’ criticism, expressions of uniqueness come to the surface and affect choices.
“Consumers’ need for uniqueness may fit into a broader theory of consumption as an extension of self” (Belk, 1988). This supposition is further supported by the work of Tepper (1997) that Consumers’ need for uniqueness could be examined as a trait influencing processes whereby situations that elicit consumer counter conformity motivation lead to conflict and acts of conflict resolution.
In phenomenological interviews, Thompson and Haytko (1997) found that “attempts to stay ahead in the realm of fashion trends by discarding fashions that catch on and seeking emerging innovations are interpreted as acts of resisting conformity”. The concept is exemplified in the comments of one of Thompson and Haytko’s (1997) interview participants: “Usually if something is hot, I’ll go out of my way to stay away from it. Even if I like it at first, if everyone’s wearing it, I don’t want to be wearing it.” The concept of consumers’ need for uniqueness derives from Snyder and Fromkin’s (1977) “theory of uniqueness”. According to this theory, the need to see oneself as being different from other persons is aroused and competes with other motives in situations that threaten the self-perception of uniqueness (i.e., situations in which individuals see them- selves as highly similar to others in their social environment).
“A unique product may be sought out to restore a person’s self-view as one who is different from others, such as when an anonymous art collector bids via the internet or telephone for a rare painting she wants to display in her bedroom”. (Tian, Bearden, and Hunte, 2001)
McAlister and Pessemier (1982) suggest that “a desire for social distinction via unusual products influences new product adoption and variety-seeking behavior”. Where (Fisher & Price, 1992). Commenting that”Because consumer choices, particularly creative choices, may establish one’s uniqueness, such choices are likely to attract followers who also seek to develop their special-ness or share a common link with early adopter groups”. And “Initially unpopular consumer choices may later gain social acceptance and thereby positively distinguish the consumer as an innovator or fashion leader” (Heckert, 1989).
“It should be noted that changing from an initially preferred choice to a new one in order to avoid similarity is a criterion for distinguishing counter conformity from other motivations that incidentally result in being different” (Nail, 1986). And “even initially unpopular choices can gain widespread acceptance over time” (Heckert, 1989). On the contrary Thompson and Haytko (1997) in his research concluded and suggested that “this could be the time when innovation is less important than heritage, as brands with history can speak to consumers through nostalgia packaging, graphics and advertising messages”.
“As a result of pursuing different-ness through no confrontational venues such as the purchase of unique products, individuals driven by counter conformity motivation should not perceive themselves to be similar to others with respect to their consumer choices” (Kilduff, 1992; Snyder and Fromkin, 1977). This concept is further supported by Snyder and Fromkin, (1977) that “specifically, uniqueness theory suggests that individual differences in motivation to seek different-ness arise from early childhood socialization that either emphasizes obedience and following norms or emphasizes creativity and individuality”.
Further, Thompson and Haytko (1997) have suggested that, “for those who construct their personal identity through a contrast between their perceived fashion orientation and that of others in their social setting, “personal identity does not reflect a stable set of essential features but is negotiated in a dynamic field of social relations”.
Bloch (1995) in his research concluded and proposes that “individual differences in the need for uniqueness influence consumers’ product selections through its effect on affective and cognitive responses to the exterior design”. This indicates that strategically marketers should place the greater emphasis on unique features may be a reasonable heuristic when subjects must choose between two alternatives (Meyer and Eagle, 1982).
2.5 Quality
While making a purchase decision it was observed that the quality of the product was affecting intensively on the consumers’ ability to make a decision, because the consumer always expecting a good quality product at reasonable price. Since the consumer had no previous experience with the brand under consideration, the quality of the brand was being judged through the brand exposure and outlook.
Garvin (1987) proposed that “product quality can be captured in eight dimensions: performance, features, reliability, conformance, durability, serviceability, aesthetics, and perceived quality (i.e., image)”. Quality assessment is very critical and personal that may be viewed from different dimensions, particularly the product attributes/features and its out look, its color and shape/design etc.
Income of the buyer may determine the degree of quality of a product; a particular brand may be viewed as of good quality by the person having low income and low buying power, while a higher income person may see it as inferior.
The price of a brand and company and store prestige may be considered as significant cues for quality. “It is encouraging to be able to confirm that such stimuli as price information and the reputation of a store or company are used as cues to the quality of a product” (Wheatley and Chiu, 1977).
2.6 Price
Price and quality remained very interrelated factors those affect collectively on perception of a consumer and response toward the brand. A better understanding of how customers use price information in choosing among alternative brands within frequently bought product categories helps to evaluate it and knowing the intensity as compare to other factors or reasons. Andrews, I. R., and Valenzi (1971) found that “when other cues are present, some researchers have found that price remains the dominant cue”. It is also consistent with Shapiro’s (1973), and (Marketing Science Institute, 1972) suggestion that” the use of price as an indicator of quality is a reflection of both its concrete, unambiguous nature and the faith that consumers tend to place in at least some price setters such as prestigious retail stores”.
Notions of the price customers use as a reference in making purchase decisions, such as “fair price” (Thaler, 1985), aspiration price, and list price (Klein & Oglethorpe, 1987). Mostly the price we consider as the expected price should coincide with the “fair price” Where the perceived “fair price” may be lower than the expected price.
“Customer response depends not only on the retail price, but also on how it compares with the reservation price” (Scherer, 1980), “perceived price” (Della Bitta and Monroe, 1974; Emery, 1970; and Monroe, 1973), or evoked price (Rao and Gautschi, 1982; Thaler, 1985; Winer, 1985) view that “customers use the price they expect to pay for a brand on a given purchase occasion as a reference in forming price judgments”.
Nwokoye (1975) found evidence that “some customers use end prices-the lowest and highest prices-as anchors in their price evaluations”.
A significant role of the expected price in customer brand choice was found by Kalwani, Sugita, and Yim (1986) which have modeled a brand’s expected price as a function of the last price paid, the deal proneness of the customer, and the frequency of sales promotions of the brand, and Gurumurthy and Little (1986) assume “a reference price is formed as adaptive expectations of past prices and allow a latitude of acceptance of the reference price within which customers are insensitive to price gains or losses”.
“Price declines in importance and may become insignificant in its impact on quality perception” (Jacob, Olson, and Haddock, 1971; Vithala ,1971). This indicates that it is probable, however, that “price effects on quality perceptions are product specific” (Gardner, 1970). Price expectations of consumers are not a function of past prices only, but these expectations are influenced also by contextual variables.
2.7 Attributes /Packaging
Packaging was considered as the leading indicator of quality and a dominant clue in selecting a brand when the consumer is completely unaware about the brands real quality and performance.
According to Slovic (1975) “decision makers faced with a need to choose between two equally valued alternatives tend to prefer the one that is superior on the more important attribute. In judging alternatives, consumers may combine evaluations on various attributes”. The rules for combining evaluations are thus important aspects of the choice process (Bettman, 1979).
Consumers make purchases by image and perception of value, packaging, color and other attributes of a product, and packaging is widely considered as “the silent salesman”, which helps in developing strategies for better marketing results. Packaging is very important instrument in the marketing mix. Packaging has two functions: (i) to protect and contain the product; and (ii) as an interface to sell the product to the consumer. High-quality packaging involves target market research, environment changes in market, society, and the technology.
Product features/attributes have also proved as a significant importance in deciding for a brand to purchase. Research suggests that “an important determinant of the extent to which a feature is contrasted or assimilated is the degree of feature overlap between the new feature and the brand to which it is added” (Herr, 1989). In the present case, it was expected that when a brand with superior features or brand name adds yet another (positive) feature, the new feature is assimilated into the existing perception of superior performance and, thus, is unlikely to significantly affect the over- all evaluation of the product.
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