CM E
Centre for Marketing
in Emerging Economies
ISBN
ISBN978-81-928560-2-5
987819285-7
9 789878 192857
Professional Consultancy by:
B.T. Printer, New Delhi
Sponsored by:
REACHING CONSUMERS OF
EMERGING MARKETS
Proceedings of the 2017 Annual Conference of the Emerging Markets Conference Board
January 5–7, 2017
2
3
REACHING CONSUMERS OF
EMERGING MARKETS
Proceedings of the 2017 Annual Conference of the Emerging Markets Conference Board
January 5–7, 2017
Edited by
PROF. SATYABHUSAN DASH
PROF. ANITA GOYAL
PROF. DEVASHISH DAS GUPTA
PROF. KRITI BARDHAN GUPTA
IIM Lucknow (Noida Campus)
The Centre for Marketing in Emerging Economies
4
ISBN: 978-81-928560-2-5
First Edition: New Delhi, 2017
Copyright © 2017, IIM Lucknow
All Rights Reserved
Published by
IIM LUCKNOW
Noida Campus
Professional Consultancy by
B.T. Printer
284/ 2, Mehrauli, New Delhi-110 030
ajaysharmainfo@gmail.com
5
Contents
Foreword by Prof. Naresh K Malhotra
25
Foreword by Udo Wagner
28
Preface
30
List of Track Chairs
34
6
TRACK I
CHAPTER 1
Are we Green Ready? - Green Consumer Behavior in India
38
Anshika Asthana
CHAPTER 2
Exploring the Role of Perceived Value as Mediator and Age &
Gender as Moderator on Online Shopping Intention
44
Dr. Anshuman Sharma
CHAPTER 3
Marketing Implications of Consumer Attitudes towards
Food Additives and Behavioural Intentions for Bakery
Products
48
Banasree Dey, Jones Mathew
CHAPTER 4
Luxury Consumers and Their Codes: A Profile
Development
55
Dr. Bikramjit Rishi , Akanksha Pokhriyal
CHAPTER 5
The Mediating Effects of ‘Engagement’ and ‘Flow’ on the
Relationship between Store Environment and Repatronage
Intention: An Empirical Evaluation
61
Dr. D Sriram
CHAPTER 6
Young Indian Consumers’ Brand Knowledge towards
Khadi Apparels
68
Dr. Anshu Dawer
CHAPTER 7
Analysis of Impact of Country of Origin (COO) on
Consumers’ Perception and buying behaviour
Nikhil Dhakate, Dr.Ambika Sharma, Parthasarathy. Sushant
Kumar
7
72
CHAPTER 8
Awareness, Usage and Attitude of consumers towards
Over-The-Counter Digestive Remedies: An Exploratory
Study
76
Dr.Vijay Bhangale
CHAPTER 9
Resolving goal conflict through licensing and compensating
behaviour: An Integrated Conceptual Model
82
Gurbir Singh and Himanshu Shekhar Srivastava
CHAPTER 10
Exploring consumer trust towards organic food products in
the context of emerging markets
89
Hamida Skandrani, Kooli Kaouther
CHAPTER 11
Cart Vs E-Cart: A Study on the Influencing role of Retail
Service Quality on Customer Satisfaction in emerging Indian
Food and Grocery Multi Channel Retailing
95
Dr.M. SivaKoti Reddy, Dr.M.Kishore Babu , Mr.M.Naga Bhaskar ,
and Dr.Sheela Srivastava
CHAPTER 12
Young Consumers buying behavior towards Clothing
101
Suchita Jha
CHAPTER 13
Clustering green customers for creating a movement
towards sustainability
107
Mahamaya Mohanty, Prof. Ravi Shankar
CHAPTER 14
Influence of Family and Social Media on the consumer
decision making of high involvement products
Ms. Mahasweta Das Saha , Dr. Sangeeta Sahney
8
112
CHAPTER 15
The influence of Brand Awareness, Brand Personality and
Customer Satisfaction on Brand Loyalty towards a leading
cosmetic brand in Al Buraimi Region, Sultanate of Oman
117
Mrs. Maya Manoj, Mrs. Elizabeth Philippe
CHAPTER 16
Exploring Prominent Social Cognitive Determinants of
Environmentally Sustainable Consumption Behavior in
Children
121
Meenakshi Sharma, Dr.Leela Rani
CHAPTER 17
The differential impact of brand origin and expert advisor on
brand trust and perceived risk
126
Neha Srivastava , Satya Bhusan Dash
CHAPTER 18
The relationship between the antecedents of luxury consumption
and attitude towards luxury consumption among the young
Indian luxury buyers
131
Nikita Sharda , Anil K. Bhat, P.K. Sinha
CHAPTER 19
A study of the factors influencing the consumer perception
towards choice of the Mall
137
Ms. Pooja Tiwari, , Dr. Mohit Kumar Jindal,, Dr. R K Singhal
CHAPTER 20
A Qualitative Enquiry of Consumer Empowerment with
reference to High Involvement Products
141
Ratan Kumar, Dr. Vibhava Srivastva
CHAPTER 21
Emerging Market for Organic Food Products: Role of
Trust and Fear in Buying
Heerah Jose, Vijay Kuriakose, Prof (Dr.) Moli P. Koshy
9
146
CHAPTER 22
Nutracueticals: Key to Healthy Living- Understanding
Customer Preference and their Profile
150
Dr. Richa Chaudhary, Pooja Kamthe, Abhinay Jain, Nikita
Nirmal
CHAPTER 23
Why do shoppers stop at Shoppers Stop? - An analysis of
influencers
156
Sharad Gupta and Anuj Pal Kapoor
CHAPTER 24
Social Media and its Impact on Consumers Buying
Behavior with special reference to apparel Industry in
Bareilly region ." -
160
Swati Gupta
CHAPTER 25
What is beautiful is good': Impact of Celebrity
Attractiveness on Advertising Effectiveness
164
Tijo Thomas and Dr.Johney Johnson
CHAPTER 26
Antecedents and Consequences of Perceived Brand
Credibility: An Empirical Investigation in Children’s
Packaged Food Category
171
Madhu Mandal, Satyabhusan Dash
TRACK II
CHAPTER 27
177
Valuation of Service Quality of Indian Banking in Respect
of Customer Satisfaction
Ankit Agarwal , Dr. Raj Kamal
CHAPTER 28
E-crm scale development and validation in indian ecommerce sector
182
Dr Anuja Agarwal , Dr Arun Kumar
CHAPTER 29
Investigating the Role of Customer Engagement in
Hospitality Sector
Jyoti Sharma , Raouf Ahmad Rather
10
192
CHAPTER 30
Determining the antecedents of the 'brand loyalty'-A case
of the tourism destination zone "Golden Triangle (Delhi,
Agra & Jaipur)"
197
Kirti Singh Dahiya, Professor Dr. D.K Batra
CHAPTER 31
Impact of Relationship Quality on Retention – A study with
reference to Bank Customers in Chennai
202
Mr. Nataraj B, ), Dr. Rajendran R
CHAPTER 32
Customer Life Time Value for Private Labels: A case of
Apparel Category in India
209
Pankaj Priya, Gokulanand Patel, Amarnath Bose
Understanding Antecedents of Customer Engagement
Behaviour and Its Relationship with Marketing Metrics
CHAPTER 33
216
Harmeen Soch, Priyanka Kaushik
TRACK III
CHAPTER 34
The Role of Signals in the Success of Products in Auxiliary
Channels of International Markets: The Case of Motion
Picture DVDs
224
Ashish Sinha
Luxury Value Perceptions in the Indian Market – A Sub
Cultural Context
CHAPTER 35
CHAPTER 36
230
Dr. Bikramjit Rishi, , Poulomi Banerjee, Sourabh Singh
Conceptualising Cross-Category Brand in Emerging
Country Context: Merging Associative Network Memory
Model and Resource Based View
Ediz Edip Akcay, Kaouther Kooli and Elvira Bolat
11
237
CHAPTER 37
Cultural Symbolisms in Brand Names
244
Hui Gao, Chunlin Duan
CHAPTER 38
Moderating influence of face-work on culture and
behavioral intention towards counterfeit products
250
Dr.Sunpreet Kaur Sahni, Laxmi Roy Singh
CHAPTER 39
Tracing the Retail Transition in India
259
Madhu Mitha, Fellow , Shivendra Kumar Pandey
CHAPTER 40
The Impact of Credibility of Foreign Celebrity on
Customer Engagement
266
Pantea Foroudi, Suraksha Gupta, Mohammad M. Foroudi,
Naresh K. Malhotra
RETAILARCH: A Multiple-Item Scale for Measuring
Consumer Perceptions of Retail Architecture
CHAPTER 41
CHAPTER 42
270
Mohammad M. Foroudi, Pantea Foroudi,, Suraksha Gupta,
Naresh K. Malhotra
Influence of Intra-cultural ethnic diversity (ICED) on
satisfaction formation process
275
Prithvish Bose and Sanjeev Varshney
CHAPTER 43
Management of Brand Identity Impressions in Cross Cultural
Contexts: A study on a global chain of coffee shop stores in
Poland and India
Ritu Srivastava
12
280
CHAPTER 44
Modeling the social and cultural environment of the
international logistics
284
Supachart Iamratanakul
Linking group norm and status seeking preferences: Insight
CHAPTER 45
288
From a field experiment on a charitable giving
Dr Quang Nguyen, Minh Hoang, Dr Helen Cai,
Dr Len Tiu Wright
TRACK IV
CHAPTER 46
Consumer Decision-making in Buying Fruits and Vegetables
across Online and Offline Channels
294
Surendra M. Dixit, Moutusy Maity, Sunitha Ratnakaram
CHAPTER 47
Interrelation among sources of power in distribution
channel– An empirical analysis of North-eastern part of
India
300
Dr. Pradip Sadarangani , Dr. Pradip Sadarangani, Sushant
Kumar’
TRACK V
CHAPTER 48
Centrality of some salient variables in creating online
307
brand equity
Arunima Rana, Anil Bhat, and Leela Rani
CHAPTER 49
Influence of Facebook engagement on Car Sales – Indian
Case Study
313
Balamurugan A. and Prof. Sanjeev Varshney
Digital interventions to reach the farmers’ segment
CHAPTER 50
CHAPTER 51
Dr.B.Poongodi, Kumaraguru , Dr. Mary Cherian
Role of electronic word of mouth content and valence in
influencing online behavior and digital marketing strategy –
applying deductive analysis approach
Gobinda Roy , Dr. Biplab Datta
13
318
323
CHAPTER 52
Mobile devices for shopping: A Case of Multisided Platform
331
Rakhi Thakur
CHAPTER 53
Small-town Consumers’ Online Engagement: Evidence
from Pilani
335
Ramandeep Singh
CHAPTER 54
Consumer co-creation on digital platform- the role of
consumer feeling
341
Nilamadhab Mohanty
CHAPTER 55
Evaluation of Functionalities of Mobile Apps and their impact on
the Consumer
347
Priyanka Chadha , Vandana Ahuja
CHAPTER 56
Research Methodologies in the domain of Online
Marketing-Literature review and Marketing Applications
350
Radhika Sharma , Dr.VandanaAhuja , Dr.ShirinAlavi
CHAPTER 57
When Do Consumers Use Cash-on-Delivery to Make a
Purchase?
355
Moutusy Maity, IIM Lucknow, Mayukh Dass
CHAPTER 58
Critical success factors for implementation of Internet of
Things (IoT) in Indian Public Sector Retail Oil Outlets”
Sudip Das, Infosys , Dr. Shailendra Kumar Pokhriyal and Dr.
Geo Jos Fernandez
14
360
CHAPTER 59
Measurement of website personality and its effect on
customer trust in online shopping
368
Sudipta Kumar Jana
CHAPTER 60
Visual Information Communication and Consumer
Response: Results from an Empirical Study
372
Anupriya kaur and Sufal Mahajan
CHAPTER 61
An Empirical Investigation of Brand, Category, and
Country Differences in the Engagement of Brand
Communities on Facebook
378
Purushottam Papatla , Prashanth Ravula
TRACK VI
CHAPTER 62
A Study of Gender Portrayal in the TV Advertisements: A
Stereotypical Marketing Communication Management
Approach
385
Anjali Bansal, Amrita Bansal
CHAPTER 63
Segmentation on the basis of Consumers’ Attitude towards
Advertising Music
388
Md Washim Raja, Sandip Anand , and Ibha Kumar
CHAPTER 64
mHealth Effectiveness in Emerging Economies: a Study on
Factors Influencing Scope and Acceptability of mHealth Tools in
India.
395
Saikat Banerjee,Sampada Kumar Dash
Transliteration and its impact on Print Advertisements
CHAPTER 65
Susan Mathew, Joshy Joseph
15
400
CHAPTER 66
Exploring Celebrity Associations through Brand Concept
Mapping: A Consumer Perspective
405
Mandeep Kaur Ghuman , Yadvinder Parmar and Bikram Jit Singh
Mann
CHAPTER 67
A Strategic Marketing Communication Framework for Small
Businesses
414
Meenakshi P., Sanjeev Varshney
CHAPTER 68
Creating Image-Identity Congruence when organizational
419
Values are consciously changed: A Performance
Management prespective
Dr Caren Rodrigues, Dr Anup Krishnamurthy, Archana Gorur
TRACK VII
CHAPTER 69
Empirical Anecdote of Key Account Management’s
Effectiveness on Firm’s Performance
427
A.Mahesh , Dr.G.P.Dinesh
TRACK VIII
CHAPTER 70
Trust and Attraction towards MNC and Local Brands in
Emerging Economies
435
Pramod Iyer, Audhesh K. Paswan, Tanding Suryandari
CHAPTER 71
E-tail brand experience and brand loyalty: The mediating
role of brand relationship variables
441
Imran Khan., Dr. Mobin Fatma, Dr. Zillur Rahman
CHAPTER 72
An analysis of consumers’ perception towards
rebranding:a study of hero motocorp
448
Joyeeta Chatterjee, Jayashree Dubey
CHAPTER 73
Measuring Consumers’ Response to Brand Scandals: A
Brand Love Perspective
Komal Nagar, Paramdeep Kour
16
454
CHAPTER 74
Factors influencing the Purchase Decisions of Organic Food
Products: An Empirical Analysis on Indian Food and
Grocery Retailing Customers
458
Mr.M. SivaKoti Reddy, Dr.Sheela Srivastava,
Mr.A.NagaBhushan, Ms.A.Sireesha and Mr.D.Subba Reddy
CHAPTER 75
New launch assessment benchmark norms: a syndicated &
quantitative study to judge the performances of new launch
brands in fmcg sector
463
Joydeep Mukherjee and Vinay Khamkar
CHAPTER 76
LAKSHYA: How a brand can find appropriate goals via
analysis of image data
470
Surbhi Minocha, Vasudha Kumar
TRACK IX
CHAPTER 77
481
The Quest for the Holy Grail
Debjyoti Sen Sharma and Abhinaba Neogi
CHAPTER 78
The sharpest knife to cut the edge
489
Debjyoti Sen Sharma
CHAPTER 79
Brand commitment: The roles of brand experience, brand
passion, brand ethicality perception and self-congruity
498
Geetika Varshneya, Gopal Das, James Agarwal
CHAPTER 80
Refining estimates of socio-economic group sizes
Javed Hazarika
\
17
507
CHAPTER 81
Investigating beyond category boundaries – The continuum
of Adjacency
514
K.N. Sriram
CHAPTER 82
Veiled Confessions - Beyond skin-deep need elicitations
518
Pooja Agarwal & Debjyoti Sen Sharma
TRACK X
CHAPTER 83
Consumer Perspective for PLB purchase decision for select
Retailers: An Empirical Research in Indian context.
526
Ajay Singh, Research scholar, Dr.Debdeep De
COMPETITIVE POSITIONING OF ORGANISED APPAREL
RETAIL STORES IN INDIA: A Study of Selected Apparel
Retailers in National Capital Region (NCR)
CHAPTER 84
CHAPTER 85
530
Arif Hasan, Research Scholar, Dr. Fayaz Ahmad Nika
Risk Mitigation Strategy Used by Ecommerce Companies in
Emerging Economies: A Conceptual Model
539
Deepak Ranjan
CHAPTER 86
Consultation with Retail Salesperson: Influence of
Subjective Knowledge and Purchase Pal
545
Garima Saxena and Sanjeev Varshney
CHAPTER 87
Influence of Retailer’s Promotion on Shopping Motive of
Hedonic Shoppers
Pratibha Rai , Kabir , Dr. (Mrs.) B.B. Pandey
18
550
CHAPTER 88
Impact of In-store Category Management on Operational
Efficiency of a Retail Store
554
Prof. Ravindra M Chiplunkar
CHAPTER 89
An Implicit Assessment of Consumer Price Perception:
Exploring the Psychological Pricing Effects
560
Santosh Kumar & Mrinalini Pandey
Shaping Consumer Preferences towards Omni-Channel in
Indian Apparel Retailing
CHAPTER 90
565
Divya Sharma, Lakshay Mehra, Prachi Deepak Patil, Gaurav
Tripathi
TRACK XI
CHAPTER 91
A Study of the Impact of Technology based Financial
Inclusion Initiatives by Indian Commercial Banks to reach
out to Unbanked Consumers of Delhi NCR, India
572
Deepika Saxena, Research Scholar, Dr. Shweta Anand
S-commerce: an empirical study for on-demand home
services
CHAPTER 92
Dr.Brijesh Sivathanu
Effect of perceived deception on willingness to buy and
intention to purchase: an exploratory research
CHAPTER 93
582
Ishpreet kaur virdi, prof. Kavita sharama
Determinants of Brand Loyalty in Technology Facilitated
Services
CHAPTER 94
578
Neha Sadhotra, S.B.Dash, K. Sivakumar, Abhijit Bhattacharya,
Late Saji KB Nair
19
587
CHAPTER 95
Cultural Capital and Leader-Member Exchange: Profiling
Patient Service Delivery Behaviours in Health Care
593
Puja Dhawan
CHAPTER 96
Reviewing the Recovery, for small restaurant brands: case
study from Dhaka, Bangladesh
597
Shamsul Huq Bin Shahria, Kashfia Farhin Mahbub-Ul-Islam,
Sayed Arafat
CHAPTER 97
Applying balanced scorecard to healthcare organizations (a
comparative study of public and private sector hospitals in
uttarakhand).
601
Tarun Nawani and R.C.Dangwal
CHAPTER 98
Cultural influences on service quality expectations:
Evidence
610
YingYing Liao and Ebrahim Soltani
TRACK XII
CHAPTER 99
Grocery Shopping Behaviour of Indian Consumer:
Reference to Mobile Applications
615
Shiv Kumar Sharma, Anuja Shukla
CHAPTER
100
CHAPTER 101
When relationship marketing does has the greatest impact
on the behaviour intentions in business relationships?
Assessing the moderating role of environmental uncertainty
622
Nektarios Tzempelikos, Kaouther Kooli
Perceived Market Skepticism and Chasm in Market
Development: A study of High-tech Start-Up Firms
629
Kavita Pathak, Jay Weerawardena, Alastair Tombs
TRACK XIII
CHAPTER 102
Learning Co-Creation: Promoting Effort Exertion by
Students
Praveen Aggarwal
20
637
CHAPTER
103
Application of Design Thinking in Innovating Pedagogy in
Management Education
641
Dr. M Selvalakshmi & Principal, Dr.Vidya Suresh
Incorporating Voice of Customer in Management Education
CHAPTER
104
646
Ram Komal Prasad, Sanjeev Verma
TRACK XIV
CHAPTER
105
Cost Effective Interventions to Prevent Burden of Disease:
A Case of Indian Eye Care
Venkataramanaiah Saddikuti, Rahul Gope,, Abhishek Ekka,,
Yujata Pasricha,, Sania Shankar Sawant
Factors Affecting Digital Piracy and Green IT: Testing the
Norm Activation and the UTAUT Models
CHAPTER
106
CHAPTER 110
670
S Venkataramanaiah, Mustafa Panbiharwala, Swapnil Jain
and Aparna Mishra
Service Innovation in Healthcare: Towards a Robust &
Sustainable System
CHAPTER 109
665
Dharmendra S. Sengar
Assessment of Health Status (Quality of Life) of Patients
with Pacemaker Implantation
CHAPTER
108
660
Moutusy Maity, Kallol Bagchi, Arunima Shah , Ankita Misra
Product Liability under Consumer Protection Laws in
India
CHAPTER
107
653
675
Venkataramanaiah Saddikuti, Rahul Gope, Abhishek
Ekka,Yujata Pasricha
Consumers’ attitude and intention towards purchasing ecofriendly products: Analyzing the role of environmental
knowledge and environmental concern
Rambalak Yadav, Govind Swaroop Pathak
21
682
CHAPTER
111
Does pharmaceutical price regulation result in greater
access to essential medicines? Effects of drug price control
order in India
691
Saravana Jaikumar Arvind Sahay,Pradeep K Chintagunta,
Joseph T. and Bernice S. Lewis
CHAPTER
112
CHAPTER
113
Emerging issues: Abortive Green Buying Behavior;
WHY??
698
Harsh Tullani, Dr. Richa Dahiya
Predicting Ecologically Conscious Consumer Behaviour
among Indian Urban Consumers: An Exploratory Study
705
Khan Md. Raziuddin Taufique, Sridhar Vaithianathan
CHAPTER
114
CHAPTER
115
CHAPTER
116
Green Trust in Green Purchase intentions: A Study of
Antecedents and Consequents
711
Madan Lal, Professor, CS Sharma , Nitika Sharma
A Study on Effect of Consumer Awareness and Behavior
on Green Marketing of LED Lightning Products in India
717
Ruchika Singh Malyan, Dr. Lokesh Jindal
What is Environmentally Responsible Consumption and
How to Measure it?
727
Sudhanshu Gupta, Richa Agrawal
CHAPTER 117
Frugality and green consumption value as a predictor of
environmentally responsible consumption behaviour:
Evidence from India
733
Sudhanshu Gupta, Richa Agrawal
CHAPTER 118
Social Impacts of Tourism – A Review
Pramod Sharma , Jogendra Kumar Nayak
22
739
CHAPTER
119
A study of adaption of Digital Tools in Indian Tourism
CHAPTER
120
The 4A framework at the BOP and its impact on access to
markets and people: An empirical investigation across five
Asian markets
745
V. Senthil
755
Moutusy Maity, IIM Lucknow, Ramendra Singh
Bridging the Healthcare Service Divide in India: Learning
from Success Stories
CHAPTER
121
CHAPTER
122
CHAPTER
123
CHAPTER
124
CHAPTER 125
761
Venkataramanaiah Saddikuti , Rahul Gope, Abhishek Ekka,
Yujata Pasricha, , Sania Shankar Sawant
Improving Social Capital at the Bottom of the Pyramid:
Which Interventions Work Best?
771
Reetika Gupta
Reflections from periodic markets in rural India: current
issues and implications
775
Satyam, Rajesh K. Aithal , Harshit Maurya
Economic Analysis of Marketing Channel of Grapes in
Maharashtra
779
Dr. Rachana Patil, Assistant Professor, Prin. L. N.
Exploring the Most Preferred Food Products among Indian
Consumers and Reasons for their Preferences
Kriti Bardhan Gupta
23
787
CHAPTER
126
A Case of Success Story from the Street Market in Dhaka
CHAPTER
127
Sustainable food consumption and public policy
interventions: Setting research agenda for South Africa
791
Md. Jahed Hosen, Kohinoor Biswas, M Sayeed Alam
796
Professor Neha Purushottam
Marketing Strategy for Emerging Markets of Medicinal
and Aromatic Plants
CHAPTER
128
CHAPTER
129
CHAPTER
130
801
Pramod Chandra, Vinay Sharma, Rajat Agarwal
Cognitive & Attitudinal Determinants of Consumer
Heterogeneity influencing the acceptance of functional
foods in India
805
Rajesh.p. Jawajala , Dr. Prafulla. Pawar
Descriptor Labels On Food Packaging & Their Impact On
Consumption
813
Dr. Etinder Pal Singh and Ms.Sanchita Sabharwal
CHAPTER
131
Reaching BoP consumers through BoP producers: Insights
from a Farmer Producer Company in Madhya Pradesh
819
Sandeep Rawat, FPM Scholar, Prof. Anita Basalingappa
CHAPTER
A comprehensive framework for CSR, Experiential
value and Branding Consequences: An Exploratory
Study
132
Ankur Jha1, Prof. S.B.Dash
24
824
Foreword
Reaching Consumers of Emerging Markets: The 2017 Annual Conference of
the Emerging Markets Conference Board
The annual conferences of the Emerging Markets Conference Board (EMCB)
bring together scholars and practitioners from around the globe. Our goal is to
advance the understanding of marketing in emerging markets and facilitate
collaboration on emerging markets research, education, policy and practice.
The Annual EMCB Conference is intended to provide a platform for showcasing and sharing insights and
findings on marketing in emerging economies. It is a meeting place where scholars, practitioners,
educators and policy makers from around the globe can explore collaboration and cooperation, shaping
the agenda for practice, education and research on marketing in emerging economies. It provides a
developmental environment where doctoral students and novice researchers can gain new skills. We
welcome papers, special sessions, and posters on a wide variety of topics that address issues of
importance to academics, marketers, consumers, and policymakers.
The 20147Annual EMCB Conference will be held on 5-7 January 2017 on the Noida campus of the
Indian Institute of Management (IIM) in the National Capital Region. To attest to the growing popularity
of these annual conferences, we received 308 papers from many countries including Russia, Bangladesh,
Oman, Austria, China, Thailand, South Africa, USA, UK, Canada and others. Of these, 135 papers were
accepted for presentation at the conference yielding an acceptance rate of 44% that compares favorably
with other leading global conferences.
In addition to the stimulating intellectual and social opportunities, delegates will get a taste of the culture
of incredible India. They will also have an opportunity to appreciate the matchless beauty of the world
famous Taj Mahal in Agra.
IIML has organized a preconference workshop scheduled for January 5, 2017 at IIM Lucknow Noida
campus. The objective of this workshop is to share hands-on research experience on case development
and teaching to the academicians and research practitioners and help them to explore their pedagogical
interests.
The global stature of the EMCB annual conferences is seen by its co-sponsorship by leading academic
and practitioner organizations from USA and other parts of the world. We would also like to thank our
co-sponsors for their important contributions that made our conference possible: the American Marketing
Association, Association for Consumer Research, Academy of International Business, Academy of
Marketing Science, European Marketing Academy (EMAC), the Market Research Society of India,
Sheth Foundation, CMO Council, Plekhanov Russian University of Economics (PRUE), North American
Society for Marketing Education in India (NASMEI), Shastri Indo Canadian Institute (SICI), The Market
Research Society (MRS), Indian Institute of Management, Lucknow, Georgia Tech CIBER, and other
institutions.
25
I look forward to welcoming everyone to the 2017 Annual Conference of the Emerging Markets
Conference Board at the Indian Institute of Management, Lucknow, Noida Campus in New Delhi, India
from 5 to 7 January 2017 (http://iimlcmee.org/emcbconference2017/).
Professor Naresh K. Malhotra
Chair, Emerging Markets Conference Board
Chair, Apex Board, CMEE
Lead Conference Co-Chair
26
27
Foreword
Dear Colleagues,
It gives me great pleasure to welcome you to the 2017 Annual Conference of the
Emerging Markets Conference Board which focuses on the topic “Reaching
Consumers of Emerging Markets”. This is another edition of a series of
conferences organized annually for quite some years now. I was pleased being
able to attend most of them in the past. Several aspects will make this upcoming
conference very special :( 1) In contrast to formats of others symposia much more
plenary sessions but only a limited number of paper presentations will take place.
This offers to opportunity to listen to presentations of highly honored scholars and
statements of eminent business experts. (2) Many of these scholars’ genealogical roots originate in India,
Pakistan or Bangladesh but early in their career they moved abroad and established their reputation as
Marketing Legends in the “mother country” of Marketing, the USA. Participants of this conference will
witness the relatedness of these scholars to their ancestral roots. I found this very impressive in the past.
(3)Cultural diversity of attendees, however, is not restricted to the before mentioned countries but there
will be a mix of delegates from the East and the West, in particular from countries with emerging
economies. This will stimulate the exchange of ideas in the field of marketing for emerging markets and
should offer the chance to get to know colleagues from others continents working on similar issues.
I will attend this conference in my capacity as immediate past president of the European Marketing
Academy (EMAC) and this should underscore the academic relatedness between Asian and European
Marketing scholars. I am looking forward to a great conference!
Udo Wagner, Ph.D.
Professor of Management
University of Vienna
Immediate Past EMAC President
28
29
PREFACE
A historic shift is indeed taking place today in global marketplace because of the growing
influence of emerging economies in the world economic scenario. Emerging economies
constitute several countries in Asia, Latin America, Central and Eastern Europe, the Middle East
and Africa. Brazil, Russia, India and China, referred collectively as BRIC, are among the most
influential emerging economy countries. Once viewed as “less developed countries”, the
emerging market economies (EMEs) now offer a significant growth opportunity for multinational
corporations (MNCs). The EMEs have brought about a metamorphic change in the world trade,
commerce, markets, and the balance of power. Their share of total merchandise exports is over
40 percent now. They constitute approximately 80 per cent of the global population, and
account for 20 per cent of the world economy, which is projected to grow up to 50 per cent in
the coming 25 years. Over 70 fortune 500 firms are from EMEs. Interestingly, despite the recent
global financial crisis, the expansion rate of EME-MNCs is not abating. In nutshell, the future
belongs to those marketers who successfully develop and implement marketing plans in EMEs.
In this demanding context of world business, we are indeed honoured and delighted to host the
Sixth EMCB Annual conference at Indian Institute of Management Lucknow (IIML), Noida
campus, and present before you the proceedings of this rewarding Conference. The main
academic Conference is being scheduled for January 5-7, 2017. The unique pre-conference
workshop on „Case study writing and development‟ that is being organized along with this
Conference is taking place on January 5, 2017.
This conference aims to provide a platform for a distinguished group of speakers and
participants who will discuss debate and share their insights in furthering understanding on
marketing theory and practice to listen, understand and reach consumers in the context of EMs.
Such a group includes leading academic researchers from business schools as well as experts
from the world of marketing practice. In consonance with the growing opportunities available to
consumers for expressing their opinions, and for firms to track consumer engagements, this
conference sets an agenda for ‘Reaching Consumers of Emerging Markets.’
For this conference, a total of 308 paper abstracts were submitted by over 650 authors from
across the globe. Based on the outcome of a blind review process by a panel of reviewers, 135
papers were finally accepted for presentation in the conference. In addition, a total of 10 papers
30
were accepted for poster presentation. Around 16 countries have been represented by the
authors of these 145 papers, out of which 29 papers are from outside India. The conference has
been designed with 14 track themes and five plenary sessions.
We would like to make use of this opportunity to profusely thank all those ladies and gentlemen
who helped us in various ways to make this ambitious event happen. First, we wish to place on
record our sincere gratitude to Prof. Ajit Prasad, Director, IIM Lucknow for his untiring support
and valuable guidance throughout the conference process. We are also thankful to Professor
Amit Mookerjee, Dean-Noida Campus, for his support to make this event happen at the Noida
Campus of IIML. This conference would not have been possible without the active cooperation
of valued reviewers and track chairs, and we earnestly hope that we will continue to have their
kind support and encouragement in future too.
Many thanks to all the marketing area faculty members of IIM and various administrative
departments of IIML for extending the much needed support to the Conference. We are also
thankful to all the Marketing area FPM Scholars of IIML (Ankur Jha, Madhu Mandal, Ankita
Mishra and Arunima Shah), who have helped us in various ways such as editing proceedings,
conference coordination
and making this event a grand success. We are also thankful to our
FPM student Ms. Neha Sadhotra and WMP student, Mr.Yogesh Sharma for Cmee Past
Achievement creatives. Our sincere thanks to members of organizing committee: Prof.Moutsy
Maity, Prof. Devashish Das Gupta and Prof.S. Venkataramanaiah, for their active participation
in coordinating various important activities of the conference. Thanks also to Mr. Manoj Kumar,
Mr. S.Mukhopadhay, Mr.Vijay Singh, Mr.Vivek Tyagi, Mr. Shailesh Kumar and Ms. Bhawna
Sharma for their timely support in organizing this conference. Thanks to Winter interns Mr.
Mustafa Panbiharwala and Ms. Prabina Limbu for their support.
We are thankful to American Marketing Association(AMA), Academy of Indian Marketing (AIM),
Academy of Marketing Science (AMS), The Association of Consumer Research (ACR),
European Marketing Academy(EMA), GergiaTech CIBER, NASME, AIB, Sheth Foundation,
CEO Council, Market research Socity,UK and Market Research Society of India (MRSI), to
provide the academic support for this Conference. Many thanks to Emerald Group Publishing
Ltd. and MRSI for sponsoring best paper award. Thanks to Shastri Indo Canadian Institute
(SICI) for sponsoring proceedings publication. We are also quite appreciative of the support
31
received from the Editors of nine reputed academic journals for bringing in special/regular
issues out of the selected best papers of the Conference. Our sincere thanks to LIC, Wipro and
Sage for their sponsoring support to our conference. We are thankful to our publishing partner
„Pearson India‟, BT Printers, Design studio and publishing team members Mr. Varun Goenka,
Ajay Sharma and Vikash Chada for their dedicated support for this event.
We would also like to put on record a special word of thanks to Ms.Ginni Bharti, Ms. Anuradha
Tandukar and Ms. Swati Gupta, the Centre Research Associates for overall supervision of the
conference activities from beginning to end.
NOIDA
The Editors:
Prof. Satyabhusan Dash
Prof. Anita Goyal
January 02, 2017
Prof. Devashish Das Gupta
Prof. Kriti Bardhan Gupta
32
33
LIST OF TRACK CHAIRS
1. Dash, Satyabhusan
Indian Institute of Management
Lucknow, India
2. Satish, S. M.
Indian Institute of Management
Lucknow, India
3. Amit Mookerjee
Indian Institute of Management
Lucknow, India
4. Tretyak, Olga A.
Higher School of Economics, Russia
5. Gupta, Suraksha
Kent Business School, UK
6. Skorobogatykh, Irina I.
Plekhanov Russian University of
Economics, Russia
7. Aithal, Rajesh
Indian Institute of Management
Lucknow, India
8. Maity, Moutusi
Indian Institute of Management
Lucknow, India
9. Dass, Mayukh
Rawls College of Business Texas Tech University
USA
10. Kinra, Neelam
Indian Institute of Management
Lucknow, India
11. Kumra, Rajeev
Indian Institute of Management
Lucknow, India
12. Goyal, Anita
Indian Institute of Management
Lucknow, India
34
13. Mathur, Sameer
Indian Institute of Management
Lucknow, India
14. Agarwal, James
University of Calgary, Canada
15. Das, Gopal
Indian Institute of Management,
Rohtak, India
16. Gupta, Devashish Das
Indian Institute of Management
Lucknow, India
17. Dewani, Prem Prakash
Indian Institute of Management
Lucknow, India
18. Dubey, Ashish
Indian Institute of Management
Lucknow, India
19. Alam, Intekhab(Ian)
State University of New York
20. Ali, Jabir
Indian Institute of Management
Lucknow, India
21. Kindra, Gurpreet
University of Ottawa
Canada
22. Rishi, Meghna
CMEE Research Team
23. Awasthi, Maya Kant
Indian Institute of Management
Lucknow, India
24. Gupta, K. B.
Indian Institute of Management
Lucknow, India
35
36
TRACK I
37
Are we Green Ready? - Green Consumer Behavior in India
Anshika Asthana
Assistant Professor, Prin. L.N. Welingkar Institute of Management Development and Research,
Mumbai
Email: anshika.asthana@welingkar.org
Introduction:
The bleaching of “the great barrier reef” caused a furor in the global pro-environmental
community when food and travel writer Rowan Jacobsen wrote in an article for outside magazine
that the vast coral reef ecosystem, “passed away in 2016 after long illness” It served as a point of
debate to some and a wake-up call to all, that we are way past the line. Environmental problems
now, are more complex, affecting not only the wildlife but economics, public health and the
well-being of human race. Companies need to imbibe these complexities and changes in their
core processes and systems.
Businesses are foraying into green marketplace and are increasingly trying to be in the spotlight
of environmental concern in response to the increased social and political pressure as well as
broader interests like corporate citizenship and social responsibility (Joel Makower). As
depending upon low‐ cost leadership and differentiation for competitive strategy formulation
was not enough for businesses (Reed, 2003), the prominence of sustainability in business is
growing and so the need for integration of environmentalism and green marketing. It's not just
about the pollution control and waste disposal anymore, but developing the unique
differentiating factor by way of alternative packaging, product compositions, redesigning
processes and environment-centric promotion which will give them a competitive edge in the
industry along with increased market share and customer loyalty (Chan, 2001; Fitzgerald, 1993;
Porter and Van der Linde, 1995a) .
Various environmentalists have shown their concerns regarding the probable impact of the
economic downturn on green products and green marketing but it seems that “greenism” have
38
gone beyond the looming effects of the recession (Neff, 2009), with multinational giants like
P&G announcing new green marketing ventures continuously (Alexander, 2010) and it is
believed that this movement is here to stay.
To remain competitive businesses need to be more environmentally and socially sensitive (e.g.
Roberts, 1995; 1996a; 1996b). It appears that “going green” is not a new strategy and was
advocated way back since 90’s as one to increase profitability, boost employee motivation and
customer loyalty (Forte and Lamont, 1998 ;Joel Makower 1990 ;Roberts, 1995 ). While various
writers are contemplating the impact of environmentalism and rise of green consumers globally
on marketing practices (Wasik, 1996; Drumwright, 1994), marketers on the other hand are trying
to grasp and understand the patterns and trends of consumer's buying intention towards green
products.
Ottoman, through his famous research in 1998, (Ottoman 1998) presented an interesting finding
based on a study of observable and product-specific information by Roper Starch Worldwide
(RSW) that in case of green product consumption, the perceived performance of the product is a
deciding factor for around half of the respondents. An attempt has been made in this paper to
find out that if this holds true for the Indian consumers in 2016 also. However, Driessen (2005),
concluded after researching “green product innovation strategy” that the level of greenness
defines the product's competitive advantage rather than merely capturing the green market. This
point of view is also voiced and supported by Joel Makower, an expert on green marketing
strategies, in his book, “Strategies for Green Economies”.
So, to pave the path of environmentally sustainable products to go from niche to mainstream, the
factors which influence the consumer’s buying behavior have to be taken into account. Some key
questions need to be answered specifically with respect to Indian consumers of today- like, who
are these green consumers exactly? Are they willing to pay a premium for green products? Is
there still a huge difference in beliefs and behaviors? This paper attempts to find out the impact
of consumers’ beliefs and attitudes, their exposure to effective information about the products
and companies, on their behavior and perceptions towards product performance, with the
influential role of marketing being the focal point. Is effective marketing the answer to the
problem of converting environmental beliefs of consumers into actual purchase behavior? We
consider here the future of environmentally sustainable products with reference to Indian market
39
which is valued up to US$600 billion, is expected to grow at an annual rate of 12% and is
capable of influencing global trends and patterns.
Research Gap & Research Problem:
Although there has been considerable academic research conducted to help us in understanding
green consumers attitudes, beliefs and behavior, rather few have been done keeping the Indian
consumer as the focus and that too in recent times. The purpose of this study is to test the waters
of Indian market for green products with reference to the prior findings regarding environmental
concern and consumer attitudes and behavior across countries, and to assess and find out the
readiness of Indian consumers for green products.
Objectives of the Study
● To investigate consumer perception formation towards green products and discuss its
implications on marketing strategies.
● To identify the profile of Indian consumers who are willing to pay more for green
products.
● To find out the effect of marketing communication and practices on buying behavior of
consumers with respect to green products.
Hypothesis
●
Beliefs about environment set forth the path for “green buying behavior”.
●
Attitudes and beliefs regarding green products and their performance effect the
willingness to pay a premium for the same.
●
Effective marketing communication can help in inducing positive buying behavior
towards green products and companies
●
Green purchasing behavior is an extension of consumer’s pro-environment behavior
●
It is likely that utility and cost effectiveness of the product influences the buying behavior
more than the eco-friendliness
●
Consumers will judge green products based on previous experience or word-of-mouth
Research Methodology:
An exploratory research was conducted in Mumbai city, India for testing the hypothesis
formulated above. Questionnaire method of data collection is used which has three major parts.
40
The first part was adopted from the HEP-NEP questions (Dunlap and van Liere, 1978). It aimed
to adjudge the environmental beliefs of the respondent. The second part aimed to adjudge the
general environmental and green purchasing behavior (Ottman, 1998) of the respondents. The
third part was related to attitude towards and marketing of green products. It also covered the
readiness of the consumer to pay more and the source of their experiences.
The questionnaire also included a few demographic questions such as income, age groups, etc.
It was administered, using the judgment sampling method and 65 complete responses are used
for the analysis. The responses were converted to standardized numerical form for ease of
identifying any correlations. Regression calculations were done for each of the hypothesis
groups.
Data analysis & Results:
As per the data analysis where regression statistics were generated to test for significant
correlations on different combinations of variables, we can conclude the following:
1. Beliefs about environment do not set forth the path for “green buying behavior”
2. Attitudes and beliefs regarding green products effect the willingness to pay a premium for the
same. But performance of green products do not affect the willingness to pay the premium
3. Effective marketing communication can help in inducing positive buying behavior towards
green products and companies
4. Green purchasing behavior is an extension of consumer’s pro-environment behavior (Fig. 4)
5. Neither performance of the product nor eco-friendliness have any significant influence on the
buying behavior
6. Consumers will not judge green products performance based on previous experience or
word-of-mouth
Demographics showed interesting observation for green product attitudes and purchasing
behavior.
41
Couples without kids showed greater willingness to pay more for green products than those with
kids or singles. Similar was their inclination towards green purchasing behavior and need for an
effective communication for green products.
Majority of 35-44 years old showed lower inclination to purchase or pay for green products but
all of the age groups had higher number of people in need of better and effective green
communication.
Females showed more inclination to purchase or pay for green products.
Households with Rupees 2,50,000/- & above monthly income showed the highest inclination to
pay more for green products but their purchasing behavior and need for effective communication
was lower than some of the other groups.
Self-employed respondents had a better attitude towards purchase and paying more for green
products than the salaried respondents.
Although this was not reflected in their purchasing behavior but respondents with education up
to bachelor’s level had a very high willingness to pay more for green products.
Implications of the Study:
Firstly, the findings give a sneak peek of the factors which play a crucial part in the formulation
of consumer’s perception about green products. The interesting findings with respect to effective
marketing communication, willingness to pay more and product performance paves the way for
businesses to formulate effective green marketing strategies. Further the analysis of
demographics revealed some thought-provoking results to be used in targeting the right segment
of consumers for e.g. couple without kids were more inclined towards green products which is in
extreme opposition of similar research conducted in other countries like UK (Pickett-Baker,
Ozaki 2008), where couple with kids showed the highest willingness to pay more for green
products. Another strong inference drawn is the positive relationship between attitude of
consumers towards green products and willingness to pay more for the same which is a cue for
the marketers to present their product in an effective way and work on the branding part to
influence the consumer's perception in a positive way. A rather shocking revelation was a nonsignificant relationship between the product’s performance and willingness to pay a premium for
42
green products, which is in line with the result of the study conducted by Alston and Prince
Roberts (1999) where they found that “there was a willingness to pay slightly more for
environmental improvement in cleaning products than to sacrifice product performance”.
Marketers can develop their marketing communication strategies in line with the above and
highlight the level of greenness, environmental benefits and environment-friendly features of the
products. In a nutshell, this study reveals that there is a segment of consumers(60 % in case of
this study) in India who are willing to pay more for green products and the corporates should
take a note and act upon it with right strategies to influence their perception and improve the
effectiveness of marketing communication towards conveying their pro-environment benefits.
References
Dunlap, R. E., & Van Liere, K. D. (1978). The “new environmental paradigm”. The journal of
environmental education, 9(4), 10-19.
Dunlap, R. E., Van Liere, K. D., Mertig, A. G., & Jones, R. E. (2000). New trends in measuring
environmental attitudes: measuring endorsement of the new ecological paradigm: a revised NEP
scale. Journal of social issues, 56(3), 425-442.
Elkington, J., Hailes, J., & Makower, J. (1990). Green Consumer.
Makower, J., & Pike, C. (2008). Strategies for the green economy: Opportunities and challenges
in the new world of business. McGraw Hill Professional.
Ottman, J., & Books, N. B. (1998). Green marketing: opportunity for innovation. The Journal of
Sustainable Product Design, 60.
Neff, J. (2009). Green-Marketing Revolution Defies Economic Downturn: Sustainable-Product
Sales Rise as Eco-Friendliness Goes Mainstream and Value Players Join the Trend. Advertising
Age.
Roberts, J. A. (1996). Will the real socially responsible consumer please step forward? Business
Horizons, 39(1), 79-83.
Driessen, P. H. (2005). Green product innovation strategy. CentER, Tilburg University.
Wasik, J. F. (1996). Green marketing and management: A global perspective. Wiley.
Drumwright, M. E. (1994). Socially responsible organizational buying: environmental concern as
a noneconomic buying criterion. The Journal of Marketing, 1-19.
Forte, M., & Lamont, B. T. (1998). The bottom line effects of greening. The Academy of
Management Executive, 12(1), 89-90.
Alston, K., & Roberts, J. P. (1999). Partners in new product development: SC Johnson and the
alliance for environmental innovation. Corporate Environmental Strategy, 6(2), 110-128.
43
Exploring the Role of Perceived Value as Mediator and Age &
Gender as Moderator on Online Shopping Intention
Dr. Anshuman Sharma
Assistant Professor, Department of Business Administration, and Accounting,
Al Buraimi University College, Al Buraimi, Sultanate of Oman
Email: sharma@buc.edu.om
Introduction:
Online shopping in Oman is still in its early stages, but exponential growth in the number of
internet users and positive attitude towards technology acceptance is convincing that the
future is bright. Some of the most important drivers of adoption of online shopping are its
ability of price transparency and comparison, the convenience of shopping, and the range of
products availability. Some of the common barriers for e-commerce are lack of payment
security and perceived trust. Policy makers have taken many initiatives to foster online
business activities including e-payment, e-shopping and e-governance. These initiatives have
not only increased online business activities but also boosted the ecommerce services to
create more reliable, secure and trustworthy environment.
Research Gap and Research Problem:
This study empirically examines the relationship between perceived value as mediator and
demographic characteristics- age & gender as moderator on online shopping intention.
Various studies have been conducted but no study on perceived value as mediator and age &
gender as moderator on online shopping intention context, has been done so far especially in
Omani context.
Objectives of the Study:
The study has two objectives; first objective is to measure the perception, beliefs and attitude
of consumers in online shopping, the opportunities offered by it and the challenges posed by
it. Second objective is investigating online purchase intention. To examine, how perceived
ease of use (PEOU), perceived usefulness (PU), perceived value (PV), perceived trust (PR),
privacy concerns, interact each other and affect purchase intention and finally purchase
behavior in online environment, an integrated model was developed by the researcher.
44
Research Methodology:
A mixed method approach is utilized in this study. Initially, an interview with a group of
Omani online shoppers and vendors was conducted to explore their online shopping
perception and intention. This initial study revealed that some of the important factors
affecting online shopping intentions were; service quality, consumers attitude, consumer
demographics (especially age and gender), perceived ease of use, perceived usefulness,
perceived value, perceived trust, and privacy concerns.
This study come up with a framework to examine the impact of gender and age as moderator
and on perceived value as mediator to better understand online consumers purchase intention.
The proposed framework is established on technology acceptance model (TAM) that has been
developed by Devis (1989) to understand and explain individual’s intention and real use of
information technology. To test and validate the proposed framework, structured
questionnaire was used. Questionnaire design was based on the result of the initial interview
with a group of Omani online shoppers and vendors and literature review. A pilot study was
conducted before finalizing the questionnaire. All the measures for this study were based on
five points Likert scale. 1=Strongly Disagree and 5= Strongly Agree. Convenience sampling
method was used for this study. An online survey with a sample size of 257 respondents was
administered to collect data from online shoppers who previously purchased online from
popular online stores in Oman. Hypotheses testing was accomplished using structural
equation modeling.
Data Analysis and Results:
Questionnaire survey was administered online with 257 respondents. Among respondents,
47% were female and 53% were male. The average age of respondents was 21.2 years, with
standard deviation 3.8 years. For validation of scale a confirmatory factor analysis (CFA)
using AMOS, was conducted to validate the research model. CFA was used rather than EFA
because all the unobserved constructs and corresponding measure were derived from previous
research and their reliability and validity were shown to be acceptable in prior research. This
study used covariance-based structural equation modeling. The analysis shows acceptable fit
between the CFA model and observed data and variety of the goodness of fit indices. All
goodness-of-fit measures show a reasonable fit χ² (125) = 318.29, χ²/df = 2.69, CFI = 0.981,
TLI = 0.972, RMSEA = 0.46 and SRMR = 0.036.
45
Based on the survey of online shoppers, the analysis revealed that both age and gender can
affect online purchase intention through moderating the relationship between relational
benefits and perceived value. Attitude towards online shopping and online shopping intention
are influenced by ease of use, usefulness, and enjoyment. This relationship is also influenced
by external factors like consumer characteristics, circumstantial factors, product attributes,
previous shopping experience and trust in online shopping. The study revealed that risk
negatively affects online shopping behavior (financial, product, delivery, and information).
Attitude towards online shopping, e-service quality and perceived trust were positively and
significantly correlated to consumer intentions. Exposure of internet was a significant factor
and it was positively correlated with the online shopping intention. Demographic
characteristics had a significant impact on the online shopping intention. Consumers between
26 to 35 years had the highest intention to accept online shopping. Men were more adapted
for accepting online shopping in comparison to women. Trust in the online site had a
significant influence on online purchase intention. Prior experience of online shopping did not
exert any effect. Perceived usefulness and perceived ease of use had a positive significant
effect on perceived risk. Attitude towards online shopping intention had a positive significant
effect on online shopping intention.
Implication of the Study:
This study has important implication for both academics and practitioners. It provides a
framework for researchers to figure out the drivers of consumer’s attitude, perception and
intention to shop online. This framework is relevant to both marketers and e-tailers since this
allows them to evaluate the features that explicitly attract consumers to shop online.
Understanding consumer’s motivation and limitation to shop online is of major priority for etailers. This study revealed that marketers should focus on consumers to engage trust building
initiatives such as displaying a privacy policy and use of third party seal on their web site.
References:
Ajzen, I. (1991). The theory of planned behavior. Organizational behavior and human
decision processes, 50(2), 179-211.
Ajzen, I., & Fishbein, M. (1980). Understanding attitudes and predicting social behaviour.
Chuttur, M. Y. (2009). Overview of the technology acceptance model: Origins, developments
and future directions. Working Papers on Information Systems, 9(37), 9-37.
46
Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of
information technology. MIS quarterly, 319-340.
Fishbein, M. D. (2015). Ajzen, 1.(1975). Belief, attitude, intention, and behavior: An
introduction to theory and research. Reading, MA: AddisonWesley.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2014). Exploratory factor
analysis. Multivariate data analysis, 7th Pearson new international ed. Harlow: Pearson.
Hernández, B., Jiménez, J., & José Martín, M. (2011). Age, gender and income: do they really
moderate online shopping behaviour?. Online Information Review, 35(1), 113-133.
Hsin Chang, H., & Wang, H. W. (2011). The moderating effect of customer perceived value
on online shopping behaviour. Online Information Review, 35(3), 333-359.
Hsin Chang, H., & Wen Chen, S. (2008). The impact of online store environment cues on
purchase intention: Trust and perceived risk as a mediator. Online information review, 32(6),
818-841.
Jamil, N. A. (2011). To investigate the drivers of online purchasing behaviour in malaysia
based on theory of planned behaviour (TPB): A structural equation modeling (SEM)
Approach. In International Conference on Management (ICM 2011) Proceeding. Conference
Master Resources.
Lai, E., & Wang, Z. (2012, June). An empirical research on factors affecting customer
purchasing behavior tendency during online shopping. In 2012 IEEE International
Conference on Computer Science and Automation Engineering (pp. 583-586). IEEE.
Taylor, D. G., & Strutton, D. (2010). Has e-marketing come of age? Modeling historical
influences on post-adoption era Internet consumer behaviors. Journal of business
research, 63(9), 950-956.
47
Marketing Implications of Consumer Attitudes towards Food
Additives and Behavioural Intentions for Bakery Products
Banasree Dey1, Jones Mathew2
1
Jaipuria Institute of Management, A32A, Sector 62, NOIDA, (U.P.) 201 309
2
Great Lakes Institute of Management, Bilaspur-Tauru Road, Gurgaon - Haryana 122413
Email: banasree.dey@jaipuria.ac.in / jones.m@greatlakes.edu.in
Introduction:
The bread industry in India, so far dominated by white bread with more than seventy per cent
market share, has been projected to reach INR 53 billion by year 2020 (Value Notes, 2015).
However, with the growth in disposable income and change in consumer lifestyles, there has
been a shift in consumer preferences which has led to a growing demand for multigrain bread,
wholegrain breads, and other healthier alternatives (Indiaretailing.com, 2016; Value Notes,
2015). As a result of heightened health consciousness, certain consumers are now apprehensive
about the use of additives in baked products (Value Notes, 2015). In fact, this has drawn the
attention of regulators as well. Recently, the Food Safety Standards Authority of India (FSSAI)
has banned the use of potassium bromate as a food additive based on a report by the Centre for
Science and Environment which had found its presence in 84 per cent of 38 commonly available
brands of pre-packaged breads (The Economic Times, 2016). In the wake of such reports and its
impact on consumers and manufacturers alike, it becomes imperative to examine the issue of
food safety from the perspective of consumers and its implications for marketers of bakery
products in the country.
Research Gap and Research Problem:
Considering the significance of food as a contributor to human well-being, the issue of food
safety and consumer concerns about this have received attention from researchers in recent years
(Wilcock et al., 2004; Muhammad et al., 2010; Kaptan and Kayisoglu, 2015). It has been pointed
out by Wilcock et al. (2004) that it is important to understand the consumer attitudes towards
food safety issues from the perspective of several important stakeholders such as food producers,
48
retailers, public authorities, and health educators. Brewer et al., (1994, cited in Wilcock et al.,
2004) categorize food safety issues based on consumer attitudes and concerns into: (a) chemical
issues (e.g. hormones in milk and food additives), (b) health issues (e.g. cholesterol contents and
nutritional imbalances), (c) spoilage issues (e.g. microbial contamination), (d) regulatory issues
(e.g. food inspection and labeling, (e) deceptive practices (e.g. weight-reduction diets), and ideal
situations (e.g. length of time for pesticide safety assessment). Muhammad et al (2010) examine
consumers‟ attitudes and perceptions regarding food safety in the context of four ethnic groups in
United Arab Emirates. In the view of Frewer et al. (n.d), it is essential to assess consumer
perceptions about risks and benefits with regard to food safety issues in order to predict how
consumers would behave in relation to these. The authors point out that such an understanding of
consumer perceptions would enable better framing of food safety policy and risk
communication.
Food additives have been regarded as one of the most controversial among the various issues
associated with food safety (Kaptan and Kayisoglu, 2015). These substances are used in the
production, processing, treatment, packaging, transportation or storage of food in order to
improve/maintain the flavor, texture, colour, taste, appearance, control acidity/basicity and
increase shelf life. According to the Food Safety and Standards Act of India (FSSAI, 2006), food
additives are defined as „any substance not normally consumed as a food by itself or used as a
typical ingredient of the food, whether or not it has nutritive value, the intentional addition of
which to food for a technological purpose in the manufacture, processing, preparation, treatment,
packing, packaging, transport or holding of such food results, or may be reasonably expected to
result (directly or indirectly), in it or its by-products becoming a component of or otherwise
affecting the characteristics of such food but does not include “contaminants” or substances
added to food for maintaining or improving nutritional qualities‟. Studies have reported the
possible side effects and adverse reactions associated with these additives (Kaptan and
Kayisoglu, 2015). Consequently, it is relevant to examine the attitudes of consumers towards
food additives and its likely impact on their consumption behavior.
Wilcock et al. (2004), in their review of food safety issues, conclude that it is vital for food
marketers and government agencies to have an understanding of consumer attitudes and behavior
before providing information to them. Thereafter, it is suggested that consumers may be
49
educated on specific risky food handling and food-consumption practices. Specifically in the
context of food additives, Szucs et al., (n.d.), report that consumers are skeptical about the use of
additives since they consider such substances to be unhealthy ingredients. In a qualitative study
of attitudes towards food additives, Tarnavolgyi (2003) find that consumers perceive these
compounds as unnecessary and health impairing and therefore have an aversion to these.
Likewise, in their review of studies on consumer attitudes towards food additives, Kaptan and
Kayisoglu, (2015) state that in spite of the perceived benefits of such additives, there is a
negative connotation attached to food additives in consumers‟ minds and they feel that the use of
additives should be reduced in food.
The attitudes of consumers towards products have been found to influence and predict behavior
(Wilcock et al., 2004). In a study of factors influencing processed food consumption behavior
among consumers in Seoul, Seo et al. (2014) report that people who have sufficient information
on food additives also have more positive attitudes towards and purchase intention with regard to
processed foods. Radam et al. (2010) examine the relationship between consumer perceptions,
attitudes and willingness to pay for food products with „no added MSG (Monosodium
Glutamate) labels. They have found that respondents generally have positive perceptions about
products with „no added MSG‟ labels and are willing to pay a premium for such food products.
The theory of planned behavior, though not without limitations, has found some success in
predicting food choice behaviours (Seo et al., 2014). According to this theory, behavior is
influenced by intention which in turn is influenced by attitudes, subjective norm and perceived
behavioural control.
It has been observed by Wilcock et al. (2004) that there is a relative dearth of studies related to
consumer attitudes towards food safety in the third world countries. This holds true in the Indian
context as well. The brief review of extant research presented above suggests that there appears
to be an association between consumer attitudes and their food consumption behavior. Hence, in
view of the recent ban imposed on potassium bromate as an additive in India, a study examining
consumers‟ attitudes towards food additives and their behavioural intentions with regard to
additives in bread becomes particularly relevant. It is felt that the study is important from the
perspective of diverse stakeholders particularly the marketers of bakery products in India.
50
Objectives of the Study:
The broad purpose of the study is to gain an understanding of consumer behavior in relation to
food additives in bakery products. Specifically, the study aims:
a. To assess the relationship between consumer attitudes towards food additives in bread and
their behavioral intentions
b. To discuss the marketing implications of consumer attitudes regarding food additives in
bread and its consequent impact on buying behavior
Research Methodology:
A consumer survey is proposed to be undertaken in the Delhi/NCR region with the
aforementioned objectives in mind. A detailed review of extant literature as well as focus groups
with select customers would be conducted before finalizing the model and the instrument design.
A self-administered questionnaire that measures consumer attitudes and behavioral intentions
would be utilized. The questionnaire would also include a few demographic variables. The time
period for this survey is proposed as March – June, 2017 and the tentative sample size would be
500 respondents enough to support SEM operations of data processing. Based on a preliminary
literature review, a conceptual model is proposed as follows:
51
Data Analysis and Results:
The data is proposed to be analyzed using appropriate statistical tools. Apart from basic
descriptive statistics, the technique of Structural Equation Modeling would be used to test the
strength and direction of the structural relationships in the conceptual model.
The hypotheses to be tested are as follows:
H1 Consumer attitudes have no significant impact on buying behavior regarding food
additives.
H2a Buying behavior regarding food additives have a positive impact on purchase action
H2b Buying behavior regarding food additives have a positive impact on search for
alternatives
H2c Buying behavior regarding food additives have a positive impact on influencing others
H2d Buying behavior regarding food additives have a positive impact on willingness to pay
premium prices
Implications of the Study:
The authors propose that the implications of consumer awareness and the resultant aversion
towards food additives can be significant for managers. It would be useful for managers to
scope out and implement pre-emptive as well as post-facto intervention strategies.
From the pre-emptive perspective, constant surveillance and monitoring must be ensured so
that no food additives are added into bakery products in the production process. This would
involve managers spending more resources on R&D to find alternatives to commonly used
but harmful food additives.
Twentieth century revolution in the food supply chain has had many implications. In
marketing, a new emphasis has developed in product development, branding and selling
accompanied by the problem of excessive choice and competition, compelling marketers to
be beneficiaries of heightened productivity as well as victims of ruthless competition.
Enactment of stringent laws have put the onus on managers of food product companies to be
extra cautious in controlling and eliminating the harmful effects of food additives.
52
From a post-factor branding perspective, managers must ensure that mental associations that
consumers have of a brand are protected. Legal implications of being dragged to court are to
be avoided as much as possible. Declaration in layman‟s language about the inclusion of
harmful food additives must be clearly marked and mentioned so that customers are
empowered to choose right. Managers must remember to follow a path of “ethically right”
rather than “legally permissible”.
In case of a food additive being detected above the permissible limits or in harmful quantities
by an independent, third-party source, the product must be immediately taken off the shelves
in the form of a „product recall‟. The force of legal implications must not be the compulsion
for withdrawing a harmful product. The force of moral obligation must determine appropriate
action to be taken.
Proper communication must be designed and disseminated to all stakeholders clarifying the
situation and apologizing sincerely. This would help customers maintain the positive brand
associations necessary for maintaining strong, favourable and unique brand image and brand
attitude.
References:
“Baked food category driven by consumers‟ healthy preference”, www.indiaretailing.com,
Accessed on August 20, 2016, http://www.indiaretailing.com/2016/07/19/food/foodgrocery/baked-food-category-driven-consumers-healthy-preference/, Indiaretailing.com,
2016
Frewer, L., Jonge, J. & Kleef, E. (n.d.). “Consumer perceptions of food safety”, Accessed on
August 17, 2016, http://www.eolss.net/sample-chapters/c03/e6-59-15-02.pdf
“FSSAI bans use of potassium bromate as food additive”, The Economic Times, Accessed on
August 15, 2016, http://economictimes.indiatimes.com/industry/cons-products/food/fssaibans-use-of-potassium-bromate-as-food-additive/articleshow/52837482.cms, FSSAI bans use
of potassium bromate as food additive, 2016
Food Safety and Standards Act, 2006. Accessed on August 17, 2016, from the Food Safety
and Standards Authority of India website, http://www.fssai.gov.in/portals/0/pdf/food-act.pdf
53
“India‟s bread industry to reach INR 53bn by 2020,” Value notes, 2015, 2016, Accessed on
August 15, http://www.valuenotes.biz/news-events/press-releases/indias-bread-industry-toreach-inr-53bn-by-2020/
Kaptan, B. & Kayisoglu, S. (2015). “Consumer attitude towards food additives‟, American
Journal of Food Science and Nutrition Research, 2(2), 21-25.
Muhammad, S., Sherif, S., & Gheblawi, M. (2010). “Consumers attitudes and perceptions of
food safety in the United Arab Emirates”, Journal of Food Distribution Research, 41 (2), 7385.
Radam, A., Yacob, M.R., Bee, T.S., and Selanat, J. (2010). “Consumers‟ Perceptions,
Attitudes and Willingness to Pay towards Food Products with “No Added Msg” Labeling”,
International Journal of Marketing Studies, 2 (1), 65-77.
Seo, S., Kim, O.G., & Shim, S. (2014). “Using the theory of planned behavior to determine
factors influencing processed foods consumption behavior”, Nutritional Research and
Practice, 8(3), 327-335.
Szucs, V., Szabo, E., & Banati, D. (n.d). “Factors affecting the avoidance of food additives in
Hungary”, Journal of Hygienic Engineering and Design, Accessed on August 15, 2016,
http://www.jhed.mk/filemanager/JHED%20Vol.%208/02.%20FQS/05.%20Vikt%C3%B3ria
%20Sz%C5%B1cs.pdf
Tarnavolgyi, G. (2003). “Analysis of consumers‟ attitudes towards food additives using focus
group survey”, Agriculturae Conspectus Scientificus, 68 (3), 193-196.
Wilcock, A., Pun, M., Khanona, J. & Aung, M. (2004). “Consumer attitudes, knowledge and
behavior: a review of food safety issues”, Trends in Food Science and Technology, 15
(2004), 56-66.
54
Luxury Consumers and Their Codes: A Profile Development
Dr. Bikramjit Rishi1, Ms. Akanksha Pokhriyal2
1
Associate Professor – Marketing
Institute of Management Technology (IMT), Raj Nagar, Ghaziabad – U.P. (India) 201001
2
Senior Research Director
Hansa Research Group Private Limited, 17A/58, W.E.A., Karol Bagh, New Delhi – 110 005
Emails: brishi@imt.edu / akanpokhriyal@gmail.com
Introduction:
The Indian Luxury market has evolved in a dynamic manner. Indian consumers are adopting the
global luxury brands and global lifestyles more conveniently and at much faster pace than
anticipated. Internet has further enabled the companies to reach the Indian consumers in distant
areas. It is estimated that Indian luxury market will touch $30 billion mark by 2015 and the
country may become the world’s fifth largest consumer market by 2025 1. Luxury fashion brand
marketers in India are constantly identifying and analyzing new trends and consumption patterns
in the Indian market. India as an emerging market has a lot of scope and opportunities to offer for
the marketing of luxury fashion brands. This paper attempts to understand the typical luxury
fashion consumer, their behavior towards consumption of luxury fashion brands in particular.
Research Gap and Research Problem:
To understand the context and currency of the luxury brand consumption in the Indian market,
we have reviewed the relevant theoretical and empirical studies. Through literature review an
attempt has been made to understand the meaning of a luxury brand and the consumption of
luxury brands. Phau and Prendergast (2000) have identified the following characteristics of
luxury brand:
a) They are exclusive
b) It is a well-known brand identity
c) Perceived quality is high and there exists increased brand awareness
d) Sales level and customer loyalty is retained.
1
http://www.fashionunited.in/news/fashion/indias-luxury-market-poised-for-major-growth-060420111874,
accessed on August 12, 2016
55
Wattanasuwan (2005) concluded that consumption of luxurious goods serve three functions: the
creation of identity, the sustainability of identity, and the display of socio-economic status.
McKinsey (1990), Nueno and Quelch (1998) while defining luxury used the price and quality
ratio. According to them, whatever falls into the high price and quality ratio category is regarded
as luxury. Berry (1994) also suggested that luxury is an expenditure on goods which goes beyond
what is basic and necessary. He also asserted that “luxuries are not needed”. The concept of
“luxury” is dynamic and has changed dramatically across demographics and societies. Vigneron
and Johnson (2004) tried to explain the complicated nature of defining luxury by saying that
human involvement, limited supply and recognition of value are the main components. Therefore,
luxury should be treated as a subjective matter.
Berry (1994) mentioned that in order for any goods to be categorized as luxury, the possession of
such goods should be able to provide pleasure. In the past, luxury was particularly associated
with champagne, designer clothes and sports cars. However, in recent times, the term luxury is a
blurred genre. Also the luxury is no longer a preserve of elite. More and more social classes are
indulging themselves in luxury brand consumption.
Luxury products are associated with certain personal, social and cultural values. These values are
communicated and disseminated by mass media, especially, advertising. The images and the
symbols shown in the advertisement of luxury brands affect how individuals define luxury and
how consumers spend their disposable income Mortelmans (2005).Eng and Bogaert (2010)
studied the attitude towards luxury consumption and found that luxury consumption is used to
exhibit wealth and carry symbolic meaning. The luxury brands are used to communicate one’s
social position. And thus it fulfills the hedonic needs. Shukla (2010) opined that status
consumption comprised of high- end expensive luxury products. They are not consumed
regularly rather they are consumed occasionally on social events of importance. These goods
satisfy material needs as well as social needs.
Khan (2015) suggested that there are four critical success factors to consider when developing a
business strategy to enter the Chinese luxury fashion marketplace. These factors include product
design, country of origin, distribution strategy, and anti-counterfeiting measures. The study has
56
recommended the implications of these variables on the marketing of fashion brands. Giovannini
et. al (2015) analysed the luxury fashion consumption behaviour of Generation Y consumers.
Researchers have found out that the public self-consciousness and self-esteem were both found
having significant influence on Generation Y consumers’ brand consciousness and in turn their
luxury consumption motivations and brand loyalty.
On the basis of review of literature it is evident that Indian consumers have not been studied in
context to the luxury brand consumption. So this study makes an attempt to understand and
profile the Indian luxury brand consumers. The main purpose of the paper is to profile the luxury
brand consumers so that marketers can use these profiles to market their luxury products.
Objectives of the Study:
The specific objective of this study is:
a. To profile the luxury consumers in the Indian market.
b. To give recommendations to the luxury marketers on the basis of identified profiles.
Research Methodology:
The study uses a qualitative research design. Qualitative face to face interactions (In depth
interviews) were conducted with 32 consumers across Delhi, Mumbai and Bangalore to
understand them and their consumption of Luxury fashion brands. The main criterions which we
used for the selection of respondents included belongingness to SEC A category, Fashion
conscious, purchased some luxury product in last one month.
Given the inaccessibility associated with the profile of consumers, in-depth interactions as per
their availability were felt to be the appropriate methodology to research them. This was also
supported with wardrobe audits and mapping their online behavior. This allowed for a holistic
understanding and mapping of a respondent in terms of her life, lifestyle, media habits, and
fashion consumption in particular.
57
Data analysis and results:
The data has been collected for the different variables as shown in Appendix 1. The collected
data has been analysed by using thematic analysis process as prescribed by Braun and Clarke
(2006). The study has found out that psychographics of the consumers significantly impact their
overall category interaction and behavior. There are four broad profiles of consumers that
emerged and amongst them the propensity of consumption was impacted significantly by overall
exposure levels of these consumers. The profiles which emerged were – Traditionalists, Purists,
Modernists, and Fashionistas. Exposure was seen to be a function of overall need for upgradation
demonstrated by the consumer, media habits, ostentation, financial wherewithal, working status,
international travel, and involvement in multiple activities outside their domain. These factors in
turn directly impacted the overall expectations of the shopping experience across fashion and
accessories categories specifically.
For example consumers with extensive international travel experience were found to be most
evolved, nuanced and demanding on the overall in-store experience. They even sought a parity in
Indian fashion with the international fashion with least/no time lag. These were also the
consumers who were savvy on the social media platform and on account of highest ostentation
needs were seen to be adapting the latest fashion trends at the earliest. Being the most wealthy
consumer set, they were also not impacted by the financial implications with the choices made.
This is the crème de la crème of the fashion consumers – the Fashionistas. Coming from a
background of wealth, they were drawn more to exclusivity, specialness, uniqueness, unlike
anything seen before, like what is available abroad as codes in their fashion choices on Indian
shores.
Implications of the study:
The identified consumer psychographic understanding and relationship will be helpful to the
Indian luxury fashion brand marketers to design an effective marketing strategy in general and
promotional strategy in particular for the positioning of luxury fashion brands in particular and
other luxury brand in general in the mind of Indian luxury consumers. Given the niche and
inaccessible nature of this consumer set, it will also be useful to draw inferential understanding
58
from this sample on the overall needs of these consumers in terms of the shopping experience, instore, product expectations et al.
We will be sharing detailed learning’s on each of the profiles and use that to provide directions to
Marketers for designing STP (segmentation, targeting and positioning) around this consumer set.
References:
Berry, C. J. (1994). The idea of luxury: A conceptual and historical investigation. Cambridge:
Cambridge University Press.
Braun, V., and Clarke, V. (2006). Using thematic analysis in Psychology, Qualitative Research in
Psychology, 3(2): 77 -101.
Eng, T-Y, Bogaert, J. (2010). Psychological and Cultural Insights into Consumption of Luxury
Western Brands in India, Journal of Customer Behaviour, 9 (1): 55-75.
Giovannini, S., Xu, Y., Thomas, J. (2015). Luxury fashion consumption and Generation Y
consumers", Journal of Fashion Marketing and Management, 19 (1): 22 – 40.
Khan, O. (2015). Luxury consumption moves East, Journal of Fashion Marketing and
Management, 19 (4):347 – 359.
McKinsey. (1990).The luxury industry: An asset for France. Paris: McKinsey
Mortelmans, D. (2005). Sign values in processes of distinction: The concept of luxury, Semiotica,
157 (1/4): 497-520.
Nueno, J. L., & Quelch, J. A. (1998). The mass marketing of luxury, Business Horizons, 39 (6):
61-68.
Phau, I., & Prendergast, G. (2000). Consuming luxury brands: the relevance of the 'rarity
principle', Brand Management, 8 (2): 122-138.
Shukla, P. (2010). Status Consumption in Cross-national Context: Socio-psychological, Brand
and Situational Antecedents, International Marketing Review, 27 (1): 108 – 129.
Vigneron, F., & Johnson, L. W. (2004). Measuring perceptions of brand luxury, Journal of Brand
Management, Vol.11 (6): 484-506.
Wattanasuwan, K. (2005).The self and symbolic. Consumption, Journal of American Academy of
Business Cambridge, 6 (2): 179-158.
59
APPENDIX – 1 (EXAMPLE OF A PROFILE)
DEMOGRAPHICS
•
•
SEC,
Age,
• Family,
• Working status
• Education
PSYCHOGRAPHI
CS
Risk aversion
Experimentation
Intrinsic/Extrinsic
outlook
Fashion
consciousness
LIFESTYLE
INDICATORS
Ownership status of
home, cars
International travel
FASHIONISTA
Sec A1 & above
25-35 years
Nuclear family
Combination of
working women &
housewives
Highly qualified
PSYCHOGRAPHIC
S
Risk not a matter of
concern
High tendency for
experimentation
Extrinsic outlook
High Fashion &
Brand consciousness
60
LIFESTYLE
INDICATORS
High exposure
levels
Frequent
International
travel
BRAND
OUTLOOK
Only the best &
most popular
brands sought
Brands a source
of garnering
acceptability
The Mediating Effects of ‘Engagement’ and ‘Flow’ on the
Relationship between Store Environment and Repatronage
Intention: An Empirical Evaluation
Dr. D Sriram
Great Lakes Institute of Management, Dr Bala V Balachandar Campus, ECR, Manamai Village,
Kanchipuram District, Tamilnadu (India) 603102
Email: sriram.d@greatlakes.edu.in
Introduction
In 2015, Indian Retail industry’s market size was estimated at USD 600 billion and is projected
to reach USD one trillion by 2020. With the announcement of 100% Foreign Direct Investment
in multi-brand retail and e-commerce’s contribution expected to be less than 5%, traditional
retailing is likely to witness intense competition and exciting growth opportunities. Extant
literature lays emphasis on creating compelling store layouts to enable customers to spend more
time, achieve shopping goals, continue patronage and shape attitudes (Mohan, Sivakumaran and
Sharma, 2013). Creating endearing relationships with customers is expected to be a source of
competitive advantage and is proposed as an outcome of enjoyable shopping experiences and
continuous engagement with customers. This study examines the role of Customer Engagement
(CE) and the concept of ‘flow’ that provide motivation for transforming shopping episodes to
enduring customer-firm relationship.
Customer Engagement (CE) is an emerging concept and is defined as a psychological state
arising out of interactive experiences of customers with a focal brand. It is defined as a multidimensional construct comprising of cognition and emotion, resulting from goal achievement
and/or attributions. CE is proposed as pathway to loyalty arising from personal relevance and
situational factors. Flow experiences arise due to compelling consumption experiences and
comprises of complete immersion in activity. Flow is also defined as a multi-dimensional
construct comprising of feedback, challenges matching skills, concentration, control, focus, loss
of self-consciousness, autotelic nature and transformation of time (Hoffman and Novak, 2009)
61
and is relevant for goal directed and experiential shopping activities (Novak, Hoffman and
Duhachek, 2003).
Research Gap and Research Problem:
With the exception of Mohan et al. (2013), seldom have the effects of store environment
comprising of store atmospherics, design cues and role of sales personnel been examined in
perceiving value, creating and enhancing positive affect, in Indian retail context. Further, there is
a need to gain insight into the role of goals, involvement, affect, atmospherics and choices in
retail environment (Puccinelli et al., 2009), as they contribute significantly to consumer
experience in retail setting. Being a new concept, CE and its role as a central concept within a
nomological network of variables warrants empirical testing. Similarly, flow’s role, in which an
individual is intensely engaged with the focal brand has been extensively researched in online
shopping environment, but, little research has been done in brick and mortar retail setting (Wang
and Hsiao, 2012). Finally, the effect of store environment on patronage intentions has only been
studied by considering individual or few atmospheric variables. There is a need to examine the
role of store environment as a formative construct and whether its effect on patronage intentions
is mediated through CE and flow.
Objective of the Study:
Brief explanation of the role of store environment, CE, and flow’s effect on patronage intentions
is undertaken and resulting hypotheses are stated below.
Store environment influences time and money spent and includes music, lighting, layout,
assortment, and sales personnel (Mohan et al., 2013). It could result in a ‘gestalt’ or individual
components can contribute to specific effects. Prior research emphasizes the role of environment
in price perceptions, perceived value, positive affect and attitude formation.
CE is a motivated state of being involved, occupied, or interested in something. This
motivational state can arise as a result of goal fulfilment and/or causal ascriptions attributable to
store environment. Goal achievement can motivate positive evaluation of object, influence
engagement and determine subsequent strength of engagement (Higgins, 2006). Regulatory fit in
goal pursuit enhances consumer’s experience and results in engagement. Also, causal ascriptions
(locus, stability and controllability), attributable to store elements and shopping goal fulfilment
62
results in a motivational state. Such ascriptions influence emotions and lead to motivational state,
resulting in expectancies to seek recurrence of the state (Weiner, 2000). This motivational state
can manifest as involvement (cognitive state resulting out of relevance or importance), enhanced
interest in the store or positive affect arising out of fulfilment of goals. This conceptualization of
CE is consistent with previous research where it is defined as a state comprising of cognition and
affect (Hollebeek, Glynn and Brodie, 2014). Thus, elements of shopping environment can result
in a state of arousal based on situational influence, comprising of involvement and affect, due to
regulatory fit or causal ascriptions. Hence,
H1: Store Environment has a positive effect on Customer Engagement
Flow is an extensively researched construct in online retailing context. In online shopping
context, goal fulfillment, challenges matching skills, attractiveness, novelty, interactivity and
playfulness of websites are classified as antecedents to emergence of flow states (Hoffman and
Novak, 2009). Flow is experienced in a wide variety of daily life activities. Wang and Hsiao
(2012) provided evidence of higher challenges associated with ‘in-store’ shopping positively
influencing concentration, control and enjoyment of consumers. It is posited that flow experience
comprising of enjoyment, focused attention and time distortion may arise due to attractive, novel
and interactive shopping environment. Thus,
H2: Store Environment has a positive effect on Flow
In a study differentiating involvement and flow, Huang (2006), identifies common and unique
qualities between these concepts. Interest, personal relevance and enjoyment are common
dimensions between flow and involvement. Control over the environment is a unique feature of
flow while relevance and attention focus are unique features of involvement. However, CE is
defined as a motivated state arising due to cognitive evaluation of store environment or positive
emotions experienced in the store. Flow is defined as an experiential state which may arise
directly through attractive store environment. Alternatively, personal relevance of store
environment and positive affect experienced by consumers (CE) may also result in ‘flow’
experiences. Involvement and flow are highly correlated, but, distinct constructs (Huang, 2006).
Here, CE comprises of involvement and/or affect, and is posited as a construct distinct from
flow. However, due to the completely experiential nature of flow, it is posited:
63
H3: Customer Engagement has a positive effect on Flow
CE is associated with motivation arising out of goal pursuit or causal ascriptions attributable to
realizing value and experience. Causal ascription of store environment and its offerings are likely
to motivate repurchase and develop positive attitude towards focal product. In early stages of
relationship, cognitive perceptions drive patronage intentions, whereas, for frequent consumers,
affect arising due to positive experiences promotes repatronage. Online flow is associated with
increased online purchase, revisit websites, user satisfaction and attitudes. Similarly, ‘in-store’
study found positive correlation between flow experiences and future shopping intentions (Wang
and Hsiao, 2012). Therefore,
H4: CE is positively associated with repatronage intentions
H5: Flow is positively associated with repatronage intentions
Research Methodology:
To evaluate the effects of store environment, emergence of CE and flow on repatronage
intentions, two product categories, viz., apparel and consumer electronics were chosen. Store
environment of apparel and consumer electronics stores belonging to a large domestic retail
chain were evaluated through questions covering music, lighting, layout, assortment and sales
personnel and conceptualized as formative construct. CE was conceptualized as a reflective
construct comprising involvement and emotions. Responses were collected through mall
intercept survey with 336 responses from the apparel format and 313 responses from the
consumer durable format.
Data Analysis and Results:
Partial Least Squares Structural Equation Modeling was adopted to test the conceptual model,
since this technique is suitable for testing formative models (Hair et al., 2014). Variance Inflation
Factor values were within acceptable limits. Analysis proceeded through testing the outer model
(measurement model) first followed by inner model (structural model). Convergent and
discriminant validity is established as per construct parameter measure norms suggested by Hair
et al., (2014). Outer model evaluation of constructs was valid and significant.
64
The study proposed a formative model for store environment and reflective model for CE. Latent
variable scores were used to evaluate the inner model. The conceptual model and results are
summarized in Figure 1. All hypotheses are supported.
Predictive accuracy (R2), Predictive relevance (Q2) and effect sizes are provided in Table 1.
Figure 1: Conceptual Model and Results: Mediating role of CE & Flow
Table 1: Predictive Accuracy, Effect Size and Predictive Relevance of Mediators
R2
Q2
CE
0.092
0.035
Flow
0.457
0.315
Patronage
0.458
0.316
Dependent Variable
Cohen’s f2
0.002
(small)
0.675
(large)
q2
0.001
(small)
0.410
(large)
In the store, assortment and service provided by sales personnel emerge as important dimensions
for a favorable shopping environment. Direct effect of Store Environment on patronage is small
65
(R2=0.304), indicating that mediators (CE and Flow) play a significant role in motivating
consumers to revisit the store and develop customer-firm relationships. Engagement with the
store environment can be attributed to cognitive or affective factors as their effects are more or
less equal. Store environment is slightly more effective in enabling CE than flow experience.
However, effect size, predictive accuracy and predictive relevance of flow are significantly
larger than CE. Analysis reveals that CE partially mediates Store Environment’s effect on Flow;
and Flow partially mediates CE’s effect on Patronage. This is interesting, since the effect size of
CE, though being small, still plays a role in creating ‘flow’ experience. Despite its large effect,
‘flow’ does not completely swamp out CE’s effect on patronage intentions. Thus, both constructs
play a role in enabling repatronage intentions.
Implications of the Study:
The study highlights the role of store environment dimensions in enhancing the overall retail
offering. Specifically, Indian consumers expect wide assortment of products and good service
from sales force at the store. Expectancies created by causal ascriptions of specific store
dimensions arouse cognitive and/or affective states resulting in CE. Interest and curiosity
generated through superior store environment, may increase involvement of customers, generate
positive emotions and contribute to future patronage. CE emerges as a weak but significant
mediator. Contemporary and attractive brick and mortar store environments enable customers to
experience flow and such experience has a significant effect on patronage intentions. Creating
interactive and playful store environments result in superior customers spending more time and
enjoy the shopping experience overall. CE and flow together, influence patronage intentions and
may contribute to creating lasting relationships. Finally and importantly, the study highlights the
relevance of store environment and resultant motivating mechanisms to modern, but not
necessarily niche retailers in India.
References:
Hair, J.F., Starstedt M., Hopkins L., Kuppelwieser, V.G. (2014). Partial least squares structural
equation modeling(PLS-SEM): An emerging tool in business research. European Business
Review; 26(2): 106-121.
Higgins, E. T. (2006). Value from hedonic experience and engagement. Psychological Review;
113(3): 439-460.
66
Hoffman, D.L. and Novak, T.P. (2009). Flow online: Lessons learned and future prospects.
Journal of Interactive Marketing; 23(1): 23-34.
Hollebeek, L. D., Glynn, M. S., & Brodie, R. J. (2014). Consumer brand engagement in social
media: Conceptualization, scale development and validation. Journal of Interactive Marketing;
28(2): 149-165.
Huang, M. H. (2006). Flow, enduring, and situational involvement in the web environment: A
tripartite second‐order examination. Psychology & Marketing; 23(5): 383-411.
Mohan, G., Sivakumaran, B., & Sharma, P. (2013). Impact of store environment on impulse
buying behavior. European Journal of Marketing; 47(10): 1711-1732.
Novak, T. P., Hoffman, D. L., & Duhachek, A. (2003). The influence of goal-directed and
experiential activities on online flow experiences. Journal of Consumer Psychology; 13(1): 3-16.
Puccinelli, N. M., Goodstein, R. C., Grewal, D., Price, R., Raghubir, P., & Stewart, D. (2009).
Customer experience management in retailing: understanding the buying process. Journal of
Retailing; 85(1): 15-30.
Wang, L. C., & Hsiao, D. F. (2012). Antecedents of flow in retail store shopping. Journal of
Retailing and Consumer Services; 19(4): 381-389.
Weiner, B. (2000). Attributional thoughts about consumer behavior. Journal of Consumer
Research; 27(3): 382-387.
67
Young Indian Consumers’ Brand Knowledge towards
Khadi Apparels
Dr. Anshu Dawer
Associate Professor, International Business,IILM Institute for H igher Education,
Rai School Complex, Institutional Area, Lodhi Road, New Delhi – 100 003, India
Email: anshu.dawer@iilm.edu
Introduction:
Khadi which is one of the most longstanding Indian ethnic handloom brand, guarantees hand
spun and hand woven apparels. Apparels are one of the most popular products offering by Khadi
amongst other. Khadi is an Indian apparel brand and spurs fascination for the reason that a 15
meter long Khadi handspun muslin cloth is claimed to pass through an ordinary finger ring and
weigh just 10 grams per square meter. Khadi also has a deep rooted association with the
independence struggle of India and thus has a patriotic status too. Khadi, as a brand and a fabric
has adapted to changing needs of modern times. Khadi marketers and Khadi & Village Industries
Commission (KVIC) are continuously taking new measures to propagate and popularize Khadi
apparels in India especially amongst young Indians reigning in their college years. Recent
introduction of modern apparels like Khadi denims are gradually gaining ground in target market
segment. The current research study is an attempt to interrogate and cross-examine two specific
dimensions of brand knowledge viz. brand image and brand awareness regarding Khadi apparels
amongst young Indian consumers and how the attitude, quality perception and gender of young
Indian consumers affect brand knowledge dimensions in question. Khadi is undertaking clear
and focused marketing policy shuffles precisely through new product offerings in the apparel
category to make youth-specific textiles. Khadi also asserts that its new apparel offerings like
denims are better in quality, eco-friendly and the most skin-friendly compared to its market
counterparts and will therefore attract young consumers as a potential and loyal customer base
for Khadi. The current research study also touches base with the perceived quality of Khadi
apparels in the target young consumers’ market. The objective of undergoing the research is to
identify how far have young Indian consumers perceived and accepted the marketing policy
68
changes of Khadi in the way they were meant to be. For this purpose, gender, quality perception
and attitude of young consumers have been kept as independent factors.
Research Gap and Research Problem:
The research only uses consumer responses from college students in New Delhi with respect to
apparel product category of Khadi which may limit generalization potential of the findings of the
study to all Khadi product offerings throughout India and other international markets.
Objectives of the study:
The specific objective of this study is to inspect the impact of gender, attitude and quality
perception of young Indian consumers with respect to two dimensions of brand knowledge viz. ,
brand image and brand awareness associated with local Indian apparel brand of Khadi.
Research Methodology:
Two dimensions of brand knowledge are evaluated based on the respondents’ shopping
experience related to Indian local ethnic apparel brand of Khadi. Data are collected from a
convenience sample of college students in New Delhi. The tool of analysis used is focused group
qualitative research. Interviews are conducted in focus groups to arrive at responses. Results are
derived from the responses and thereafter marketing policy recommendations are made.
Data Analysis and Results:
Analytical tool employed for the study is focused group qualitative research. Interviews are
conducted in focus groups to arrive at responses. Results are derived from the responses and
thereafter marketing policy recommendations are made. The finding suggest that gender, attitude
and perception towards quality of young Indian consumers affect both the dimensions of brand
knowledge viz., brand image and brand awareness with respect to Indian local apparel brand of
Khadi.
69
Implications of the Study:
Following are the key policy reform implications suggested as a result of the study:
Khadi needs to improve young Indian consumers’ attitude and their quality perception
towards Khadi apparels through strategically designing its marketing policy.
The need of establishing identity of Khadi through the Khadi mark, with special focus on
target market of young Indian consumers’ bracket is felt. This includes rethinking on the
design of present Khadi logo.
Research findings suggest that Khadi’s social media marketing strategy needs a face-lift.
Khadi should increase the rigor of its current and upcoming social media marketing
campaigns. Social media platforms are the first point of contacts to young Indian consumers
in contemporary times. Khadi’s currently floating social media campaign of “Khadi Gatha”
is in its primitive stage and still waits for adequate reach to youth in India.
Research also suggests that Khadi should increase brand visibility by opening more outlets
in private retail spaces like multi-brand malls in India.
References:
Kitzinger, J. (1995). Qualitative research. Introducing focus groups. BMJ: British medical
journal, 311(7000), 299.
Morgan, D. L., & Spanish, M. T. (1984). Focus groups: A new tool for qualitative research.
Qualitative sociology, 7(3), 253-270.
Macdonald, E. K., & Sharp, B. M. (2000). Brand awareness effects on consumer decision
making for a common, repeat purchase product:: A replication. Journal of business research,
48(1), 5-15.
Esch, F. R., Langner, T., Schmitt, B. H., & Geus, P. (2006). Are brands forever? How brand
knowledge and relationships affect current and future purchases. Journal of Product & Brand
Management, 15(2), 98-105.
Dobni, D., & Zinkhan, G. M. (1990). In search of brand image: A foundation analysis. NAAdvances in Consumer Research Volume 17.
Taori, K., & Singh, S. N. (1991). Marketing Rural Industry Products: Experiments and
Experiences in Uttar Pradesh. Economic and Political Weekly, M21-M26.
Vaddi, S. (2015). Study of khadi and handloom industry of Andhra Pradesh India focus on
marketing strategies and consumerism.
Pandita, R. (1997). Marketing Policies for Khadi Village Industries. Khadigramodyog, Monthly,
72(12), 86-90.
70
Mishra, P. (2014). Khadi-sustaining the Change in Generation Gap. Asian Journal of Marketing,
8(2), 86-97.
Subramani, K., Ashok, J., & Anish, V. Impact of marketing mix among customers with reference
to khadi products.
Upadhyay, G. (2013). Awareness of youths towards khadi. ACADEMICIA: An International
Multidisciplinary Research Journal, 3(7), 156-162.
Singh, K., Laxmi, P. R., & Singh, S. (2014). Reviving Khadi: From Freedom Fabric to Fashion
Fabric. Man-Made Textiles in India, 42(11).
71
Analysis of Impact of Country of Origin (COO) on Consumers’
Perception and buying behviour
Dr. Ambika Sharma1, Nikhil Dhakate2, Cma Parthasarathy3
1
2
Geeta Group Of Institution, Panipat (India) 132107
Indian Institute of Management Shillong (India) 793014
3
Emeralds Business School ,Tirupati (India) 517507
Emails: ambika.sharma21@yahoo.com/ nikhil.dhakate@yahoo.com / parthasarathy@gmail.com
Introduction:
Brand image research has long been recognized as one of the central area of the marketing
research field not only because it serves as a foundation for tactical marketing-mix issues but
also because it plays an integral role in building long-term brand equity (Keller, 1993). Alternately, the globalization has resulted in the proliferation of hybrid products (Czepiec and
Cosmos, 1983; Johanson and Nebenzahl, 1986). Hybrid products are products that involve a
local manufacturer but carry a foreign brand or locally branded but made in a foreign country
(Czepiec and Cosmos, 1983).
The literature of country of origin suggests that consumers are influenced with the preconceived perceptions about countries where they have been produced and the image of
products of those countries during the phase evaluation and phase of pre-purchase. In the present scenario a positive country of origin’s image has a quite positive consequences on taking
the purchase decision for a consumer. The present paper throws the light on the basic and
conceptual understanding about the country of origin, consumer perception about country of
origin and and their impact on consumer’s buying decision.
In this paper the authors conducted the primary research and try to examine the consumers’
attitude towards cross- national boundaries on the basis of fourteen factors. This paper also
include the influence of the origin of brand on the consumer perception of quality, value of
their money, reliability of product also associated with the country of origin, do the consumer
have positive image about the product manufactured in India, also the effect of brand associa-
72
tions, persona, product knowledge and product involvement on consumer perceptions of
quality and other features and making the final decision for purchase.
Literature Review
Gaedeke (1973) found that products from more developed countries got higher preference to
the products from less developed countries. Bilkey and Ness (1982) found that attitude of
consumers towards a product vary by nature of products. Electronic goods from Italy might
be perceived poorly over electronics goods from Japan but Italian shoes have positive perception in consumers mind. Bilkey and Ness (1993) observed that consumers have strong willingness to pay higher prices for the products originating from developed countries. Knight
(1999) found that consumers inclined to buy local products where they get acceptable quality,
a fair price and comparable technology. Supphellen and Rittenburgh (2001) suggested that
influence of COO effects depend not only country of origin but also on specific product attributes. Balabanis and Diamantopoulos (2004) examined the consumers’ preference in eight
product categories on the basis of Country Of Origin (COO) and found that influence of COO
depends upon the nature of product category. Kinra Neelam (2006) studied the attitudes of
Indian consumers towards local and foreign brands and influence of Country of Origin on
buying behaviour. Responses of 112 consumers, from Lucknow city, were collected. She
found that consumers have superior perception about foreign brands. Consumers rated foreign brands superior on technology, quality, status and esteem than Indian brands. Ranjbarian
et al (2010) investigated the influence of country origin (COO) on quality judgement of domestic products. They collected responses from 1200 individuals from four big cities of Iran.
They found that consumers attitude towards foreign clothes vary by country of origin. Image
of Country Of Origin (COO) of products affects the buying attitude of consumers. If the
Country Of Origin (foreign country) has bad impression in terms of quality, performance in
consumers’ mind then they prefer local products but if the Country Of Origin (UK, USA) has
good image in consumers mind then the preference of buying local products weaken.
Research Gap and Research Problem :
The present study is an attempt to explore some favourable signals and to bring out the relationship between Country of Origin and brand image of product. It also throws light on the
magnitude of relationship between COO and brand perception of consumers and the consequences because of impact of COO on buying behaviour of consumer.
73
Objectives of the study:
1.
To explore the meaning of country of origin image and its impact on buying behaviour
2.
Which factor influence more to buying behaviour of consumers, mainly brand association, brand persona, product knowledge, product involvement, price , quality, etc.
3.
To find out the magnitude of impact of all those factors on consumer perception and
buying behaviour.
Research Methodology:
For this survey has been conducted on 400 consumers from Delhi(NCR) for that Cluster
sampling techniques has been used to collect the data. A structured questionnaire have been
used to record the response of consumers. Semantic differential scale has been formulated to
record the perception of consumers. Hypothesis has been formulated to meet the objectives of
the research study. Factor analysis has been used, as statistical techniques, to identify the major factors affecting the perception of consumers towards Country of Origin (COO) of brand.
ANOVA has been applied to measure the level of influence of COO on Brand perception.
Data analysis and results:
As per literature survey it has been proved that COO is one of the very important element but
, It has been observed from the current researches that Country of Origin is not the most influential factor of product that affects the consumer’s perception and their buying behaviour.
Just the name of Country of Origin on the label of product does not drive the consumers to
buy the product but the attributes like quality, price,brand persona, product involvement,
brand association, product knowledge , after sale services, performance also have been
emerged as the influential factors. Consumers prefer local brands to foreign brands if they get
same product attributes (features, quality, performance etc.) at lower price in the local market. Consumers’ ethnocentrism is not the influential factor as consumer prefers value for
money rather than simple tag of country.
Implications of the Study:
The current research provides results about the influential limit of Country of Origin (COO)
of products originating from different countries on the buying behaviour of consumers. It also
suggests pragmatic approach to improve the effectiveness of global marketing strategies in
Indian market. Companies must adopt latest technologies in various manufacturing products
to enhance value for money context of product at lower prices.
Key Words – Brand Image, Country of Origin, Consumers’ Perception, Ethnocentrism
74
References:
Amine, L. (2008). Country-of-origin, animosity and consumer response: Marketing implications of anti-Americanism and Francophobia. International Business Review, 17(4), 402–
422.
Amine, L. S., Chao, M. C. H., & Arnold, M. J. (2005). Executive insights: Exploring the
practical effects of country of origin, animosity, and price-quality issues: two case studies of
Taiwan and Acer in China. Journal of International Marketing,.
Boulding, W., & Amna, K. (1993). A consumer-side experimental examination of signaling
theory: Do consumers perceive warranties as signals of quality? Journal of Consumer Research
Chryssochoidis, G., Krystallis, A. & Perreas, P. (2007). Ethnocentric beliefs and country-oforigin (COO) effect – Impact of country, product and product attributes on Greek consumers’
evaluation of food products. European Journal of Marketing, 41(11/12), 118-144.
Desborde, R. D. (1990). Development and testing of a psychometric scale to measure country-of-origin image. Ann Arbor, Michigan: Florida State University. University Microfilms
International (U M I).
Drozadenko, R. & Jensen, M. (2009). Translating country-of-origin effects into prices. Journal of Products & Brand Management, 18(5), 371-378.
Elliott, G. R. & Cameron, R. C. (1994). Consumer perception of product quality and the
country-of-origin effect. Journal of International Marketing, 2(2), 49-62.
Fetscherin, M. & Toncar, M. (2010). The effects of the country of brand and country of manufacturing of automobiles – An experimental study of consumers’ brand personality perceptions. International Marketing Review, 27(2), 164-178.
Henderson, S. & Hoque, S. F. (2010). The ethnicity impact on attitude toward country of
origin for products with different involvement levels. Journal of International Consumer
Marketing, 22(3), 271-291.
Lee, H., Kim, C. & Miller, J. (1992). The relative effects of price, warranty and country of
origin on consumer product evaluations. Journal of Global Marketing, 6(12), 55-80.
Monroe, K. B. (1982). The influence of price on product perceptions and product choice. Advances in Consumer Research, 9(1), 206-209.
Piron. F. (2000). Consumers’ perception of the country-of-origin effect on purchasing intensions of (in) conspicuous products. Journal of Consumer Marketing, 17(4/5), 308-322.
Rosenbloom, A. & Haefner, J.E. (2009). Country-of-Origin effects and global brand trust: a
first look. Journal of Global Marketing, 22(4), 267-278.
75
Awareness, Usage and Attitude of consumers towards OverThe-Counter Digestive Remedies: An Exploratory Study
Dr.Vijay Bhangale
Associate Dean - Academics
IES Management College and Research Centre
Bandra Reclamation, Mumbai 400050, India
Phone: +91-22-61378347 / Fax: +91-22-61378444
Email: vijay.bhangale@ies.edu
Introduction:
It is safe to say that each one of us must have suffered from digestive system discomfort at some
point during his or her lifetime. Digestive complaints such as constipation, diarrhoea, heartburn
and bloating are very common and usually treatable with lifestyle measures and over-the-counter
remedies.
Euromonitor International's health and wellness data shows that, for the 32 markets in which the
company carries out in-depth health and wellness research, the digestive health prime positioning
focus ranks third in value, behind general wellbeing and weight management1.
Hectic lifestyles among Indians and their love of food often lead to unhealthy eating habits,
which can also lead to gastric problems. Many consumers continue to opt to self-medicate
digestive problems thanks to stronger media advertising campaigns for these products and the
more convenient positioning of digestive remedies. The country continued to register a rise in
demand for digestive remedies during hot periods and festive occasions when consumers indulge
in spicy and oily food2.
Indian cuisine is rich in oil and spices, which continued to be one of the primary drivers of
digestive remedies. Furthermore, a lack of proper hygiene, such as washing hands before eating,
continued to be an issue for rural India. These two combined are responsible for the growth of
digestive remedies in the country3.
According to the WHO Drug Information, ―
Self-medication products are those not requiring a
medical prescription and which are produced, distributed and sold to consumers for use on their
own initiative.‖
76
‗OTC Drugs' in common parlance means drugs which are legally allowed to be sold ‗Over the
Counter‘ without the prescription of a Registered Medical Practitioner.4
In the Indian context, the phrase ‗Over the Counter‘ and the abbreviation ‗OTC‘ are also
referred to as nonprescription drugs.
Indian consumers, today, are confident about sharing healthcare responsibility, especially in case
of common ailments like aches/pains, cough, colds, hyperacidity, minor topical infections and
indigestion.
The total gastrointestinal market in India is Rs.2752 crores according to Nicholas Hall report,
2014 on OTC gastrointestinal market. The market comprises of antacids (Rs.834 crores),
laxatives (Rs.468 crores), anti-diarrhoeals (Rs.149 crores), anti-nauseants (Rs.149 crores),
traditional digestives (Rs.493 crores), liver & bile remedies (421 crores) 5.
Literature Review
Mariea Grubbs Hoy presented the ‗Consumer Behaviour Considerations‘ in the framework in
which switch drugs are compared and contrasted with Rx(prescription) and OTC drugs6 .
Heightened health consciousness and self-care is one of the ten ―
megatrends‖ observed by
Naisbitt (1990). This Proactive segment, which has been dubbed ―
Do-It-Yourself (DIY) Health
Care Consumers‖ (Pinto and Gehrt 1991) and described as ―
medically sophisticated‖ (Morris,
Ruffner, and Klimberg 1985), often take diagnosis and treatment of their health into their own
hands because it is less costly than going to a doctor and they believe that they can treat
―
common ailments‖ as well as a professional.
Self-medication is a component, but does not constitute the entire domain, of self-care behaviour.
Pinto and Gehrt (1991) extended the notion of self-care by examining other behaviours related to
self health care management. They found that DIY health care consumers have a family doctor,
exercise regularly, and perceive themselves to be in good health.
A study was conducted by Prasanna Gore, Suresh Madhavan, Gordon McClung and David Riley
amongst 3,000 randomly selected consumer households in US (1994) to assess consumer
involvement in nonprescription medicine purchase decisions and the use of expert sources of
information. The Executive Highlights7 of the study was as follows:-
77
i. Self-medication with nonprescription medicines for the treatment of minor ailments is a
desirable trend that can help keep health care costs down.
ii. Involvement in nonprescription medicine purchases increases the likelihood of
consumers seeking advice and information from expert sources such as physicians,
pharmacists, and nurses.
iii. Seeking out expert advice not only helps consumers make better purchase decisions, but
also ensures the safe and effective use of nonprescription medicines. This is
especially important in the case of elderly consumers who often take multiple
medications.
iv. By determining the degree of consumer involvement, health care marketers can target
appropriate communications to segments that would benefit from greater involvement
in such purchase decisions.
In India self-medication is on the rise, especially when it comes to minor ailments like cold,
cough, headache, digestive problems, muscle aches, small wounds, anxiety and insomnia8.
A pilot study conducted by Ajith Paninchukunnath to understand the awareness, attitude and
usage of OTC drugs among adults in National Capital Region9 revealed that the awareness level
about OTC as a category was high and was considered to be safe, on an average each person
suffered from more than five common ailments for which he/she used OTC drugs, 50 percent of
the respondents did not know the side effects of the OTC drug they take, 84 percent of the
respondents believe that self medication with OTC is increasing in the society and they prefer
print and television as the main medium to receive information on rational use of drugs from
pharmaceutical companies.
Research Gap and Research Problem:
Although occurrence of digestive ailments is very common in India, there are very few studies
with focus on the actual buying process of OTC remedies for digestive ailments. The present
study tries to fill this gap and explores the perception, motives and buying behavior of OTC
digestive remedies in India.
78
Objectives of the study:
The specific objectives of the study were to understand awareness, usage and attitude of
consumers with respective to Over-The-Counter (OTC) remedies for digestive ailments.
Research methodology:
The research design employed for the present study is basically survey method wherein
structured questionnaire was administered face-to-face to 240 respondents (60 working
professionals, 60 college students, 60 housewives and 60 respondents above the age of 60 years)
in Mumbai city and suburbs. The Purposive sampling method as well as simple random sampling
technique was used while selecting respondents so as to ensure a proper representation of the
population.
Data analysis and results:
Data analysis was done using SPSS software applying different statistical techniques. Responses
obtained from Questionnaires were analyzed using cross tabulation and descriptive statistics.
―
Cronbach‘s alpha‖ was used to measure internal consistency of the items in the scale. Inferential
statistics viz: ―
One Way ANOVA‖ and ―
Pearson Chi – square tests‖ were used for testing the
hypothesis framed.
Key results of the study are as follows:
a) Data analysis on the aspect of frequency of occurrence of digestive ailments showed that
80 percent of respondents experienced digestive complaints like ‗acidity‘ or ‗indigestion‘
at least once in a week.
b) The frequency of occurrence of digestive ailments was higher among ‗working
professionals‘ (30 percent suffering once in a fortnight) and ‗respondents above 60 years‘
(38 percent suffering once in a fortnight).
c) The study revealed that in case of majority of respondents digestive problem was related
to ‗eating habits‘ (35 percent) followed by ‗lack of sleep‘ (33 percent).
d) In order to treat the digestive ailments 42 percent of the respondents took OTC (OverThe-Counter) medicines on their own (Self-Medication), 30 percent of respondents took
doctor‘s advice and 25% of respondents resorted to home remedies.
79
e) ‗Gelusil‘ was the most recalled brand (77 percent) followed by ‗Eno‘ (75 percent),
‗Digene‘ (52 percent), ‗Pudin Hara‘ (50 percent) and ‗Hajmola‘ (42 percent).
f) The primary source of information of OTC brand/s was ‗television advertisements‘
followed by ‗friends/relatives‘, ‗newspaper advertisements‘ and ‗hoardings‘.
g) Hypotheses testing revealed that ‗top-of-mind‘ awareness is dependent on ‗mass media
promotion‘ and is independent of age/profile of the respondent.
h) ‗Syrup‘ is the most preferred dosage form (45 percent of respondents) followed by
‗tablet‘ (28 percent of respondents) and powder (20 percent of respondents).
i) Reponses to the question ―
When it comes to selecting a digestive/gastric medicine, how
important are the following and how satisfied are you? (Rate on a 5 point scale, 5 being
the highest and 1 being the lowest) revealed that ―
Quality/Efficacy‖ is the most important
parameter.
j) Multi Dimensional Scaling Technique(MDS) revealed the following positive factors for
various brands:
i)
Eno scored on parameters like ‗Company Image‘, ‗Price‘, ‗Efficacy‘,
‗Availability‘, ‗Packaging‘ and ‗Promotion‘
ii)
Gelusil scored on parameters like ‗Company Image‘, ‗Efficacy‘ ‗Availability‘,
‗Packaging‘ and ‗Taste‘
iii)
Hajmola scored on ‗Taste‘, ‗Packaging‘ and ‗Promotion‘
iv)
Pudin Hara scored only on ‗Availability‘
Implications of the Study:
The present study is successful to the extent of providing the manager with a workable model of
consumer buying behavior with respect to OTC remedies for digestive ailments that he/she could
use to generate the right consumer responses.
References:
1. just - food global news [Bromsgrove] 13 Sep 2011
2. http://www.euromonitor.com/digestive-remedies-in-india/report accessed on Aug 16,2016
3. Euromonitor International, Digestive Remedies in India, May 2014
80
4. S. Srinivasan, OTC Drugs: Some Legal Aspects, available at
http://www.essentialdrugs.org/indiadrug/archive/200405/Aug 17, 2016
5. Nicholas Hall report, 2014 on OTC gastrointestinal market
6. Hoy Mariea, Switch, Drugs Vis-à-Vis Rx and OTC: Policy, Marketing, and Research Considerations,
Journal of Public Policy & Marketing, spring 1994, Vol.13 (1), pgs 85-96.
7. Gore Prasanna, Madhavan Suresh, McClung Gordon , Riley David, Consumer
Involvement in Nonprescription Medicine Purchase Decisions, Journal of Healthcare
Marketing, Summer 1994—Vol. 14, No. 2,pg.17.
8. ―
Don‘t pop that pill‖, Hindustan Times Café, Mumbai, April 9, 2009.
9. Paninchukunnath Ajith, OTC Drug Marketing – Global Trends and Indian Experiences,
International Marketing Conference on Marketing & Society, 8-10 April, 2007, IIMK.)
81
Resolving goal conflict through licensing and compensating
behaviour: An Integrated Conceptual Model
Gurbir Singh1 and Himanshu Shekhar Srivastava1
1
Doctoral Student, Indian Institute of Management, Indore
Emails: f15gurbirs@iimidr.ac.in / f15himanshus@iimidr.ac.in
Introduction:
Every person is expected to depict similar behaviour over a period of time under normal
circumstances. The present behaviour should be consistent with the past behaviour. But we
seldom see such stability of behaviour in reality.
To understand these inconsistencies in behaviour, we need to look beyond literature on
behaviour consistency. These inconsistencies in behaviour can be explained through licensing
& compensating effects. When a person perceives that his past behaviour is generating
substantial progress towards his goals, he may engage into a licensing behaviour inconsistent
with his past behaviour (May & Irmak, 2014). Similarly, when a person perceives that he is
lagging behind in progress towards his goals due to past behaviour, he may engage into a
compensating behaviour inconsistent with the past behaviour but consistent with his goals
(Fishbach & Zhang, 2009).
Research Gap and Research Problem:
The extant literature discusses licensing effect and compensating effects individually. The
consumer behaviour is formed taking into consideration both past and present. There is no
integrated model to understand the impact of past behaviour, memory distortion and emotions
on consumer behaviour.
Objectives of the Study:
We intend to propose an integrated model to understand the cognitive process for resolving
the goal conflict through licensing and compensating behaviour. We also intend to elaborate
on the role of memory distortion and emotions in producing licensing and compensating
effects.
82
Research Methodology:
We propose five propositions leading to an integrated conceptual model for resolving goal
conflict using licensing and compensating effects. We use the extant literature in forming and
supporting these propositions. The concepts used from literature for forming these
propositions are licensing effect & compensating effect, focal goals & competing goals, goal
commitment & goal progress, emotions and memory distortion.
Consumers have to pursue many goals simultaneously in their routine life (Fishbach, Dhar, &
Zhang, 2006). Some of them are initial goals which come early in their life and are referred
to as focal goals. There are other goals in life which are in conflict with focal goals at
particular point of time and those goals are referred to as competing goals. Competing goals
come in life of a person after focal goals (Fishbach & Dhar, 2005). Consequently, people face
a conflict between focal goals and competing goals (May & Irmak, 2014) and they decide
either in favour of focal goals or competing goals.
Consumers refer to their past behaviour before deciding their present behaviour
(Mukhopadhyay, Sengupta, & Ramanathan, 2008). The past behaviour has an impact on their
present decisions. But a large body of research exhibit that consumers are also prone to
distortion of their memories (Mather, Shafir, & Johnson, 2000). Memory distortion happens
when an individual remembers the same event differently at different points of time. May and
Irmak (2014) demonstrated that distortion of memories of past behaviour can lead to
licensing behaviour in present and impact our perception of achievement of our focal goals.
Achievement of goals can be looked at from two different perspectives, namely, goal
commitment and goal progress. From goal commitment perspective goals are seen as
commitment towards an objective end state. An action consistent with a goal will increase
the commitment of further actions towards the same goal (Mukhopadhyay et al., 2008). From
goal progress perspective, if an initial action is perceived to contribute towards goal progress,
it can lead to further action inconsistent with the goal (Fishbach & Zhang, 2009). In our
research as we are focusing on multiple goals, we will be referring to goal progress
perspective.
Licensing Effect suggest that progress toward their focal goals licenses people to pursue
competing goals. The progress made towards achievement of focal goal makes people feel
that they are allowed to pursue goals inconsistent with their focal goal (May & Irmak, 2014).
83
Compensating effect is exhibited when people pursue competing goals which are inconsistent
with their focal goals. The lack of progress towards focal goals motivate them to work for
achievement of the same (Fishbach & Zhang, 2009).
Data analysis and results:
The efforts by a person to resolve the goal conflict results in memory distortion in many cases
(May & Irmak, 2014). Prior research has shown that in case of an upcoming goal conflict,
consumers favouring focal goals tend to construe a tempting competing goal as negatively
affecting their focal goal progress, which discourages them from pursuing competing goals
(Zhang, Huang, & Broniarczyk, 2010). Similarly, May and Irmak (2014) demonstrated that
consumers favouring competing goals may distort their memories of past behaviour in order
to license their present behaviour favouring competing goals. In case of a goal conflict
between focal goal and competing goal, the distortion of past behaviour or present behaviour
impacts the perceived goal progress of a consumer (Zhang et al., 2010). Although extant
literature discusses the role of distortion of present behaviour in decrease in perceived goal
progress (Zhang et al., 2010) but there is no study exploring negative impact of past memory
distortion on present perceived goal progress. We propose that distortion of memories of past
behaviour can either increase the perceived focal goal progress or decrease the perceived
focal goal progress.
Proposition 1- The distortion of memories of past behaviour mediates the relationship
between the goal conflict and the perceived goal progress.
When a consumer makes a decision and chooses one option from the available alternatives,
the left over alternatives are the non-chosen options. While taking a decision when we refer
to the memories of our past behaviour, we can refer to both the chosen and non-chosen
options. The chosen options of past may impact our perceived goal progress in present (May
& Irmak, 2014). Similarly, the non-chosen options of past can also impact the perceived goal
progress in present. The non-chosen options indicate the less-virtuous alternatives foregone in
the past. During memory distortion, the non-chosen options are exaggerated as less virtuous
than the chosen options and these forgone alternatives are termed as counterfactual sins
(Effron et al., 2013). We propose that the memory distortion can happen for both chosen
options and the non-chosen options. The distortion of memory can occur in three ways.
Memory distortion can happen for past behaviour favouring focal goals or for past behaviour
favouring competing goals or for past counterfactual sins (Effron et al., 2013).
84
Proposition 2a- The perceived goal progress can be enhanced by (a) distorting memory of
past behaviour favouring competing goal as less damaging for the achievement of focal goal
(b) distorting memory of past behaviour favouring focal goal as more beneficial for
achievement of focal goal (c) distorting memory of past counterfactual sins as more
damaging for achievement of focal goal.
Proposition 2b- The perceived goal progress can be diminished by (a) distorting memory of
past behaviour favouring competing goal as more damaging for achievement of focal goal
(b) distorting memory of past behaviour favouring focal goal as less beneficial for
achievement of focal goal (c) distorting memory of past counterfactual sins as more
favourable for achievement of focal goals.
During a goal conflict, when consumer’s focal goals are challenged by competing goals,
consumers engage themselves in a self-control effort for achievement of the focal goals. The
self-control mechanism of a consumer is activated only in case of a goal conflict (Trope &
Fishbach, 2000; Zhang et al., 2010). The self-control mechanism construes competing goals
to be negatively impacting its focal goal progress and resolve the conflict in favour of focal
goals (Zhang et al., 2010). We propose that the self-control mechanism can also distort
consumers past behaviour for achievement focal goals.
Proposition 3- Self-control (Present/Absent) will moderate the relationship between goal
conflict and memory distortion of past behaviour
The goal directed behaviour of consumers is also impacted by the emotions (Wilcox, Kramer,
& Sen, 2011). When consumers appraise the achievement of their goals, the enhanced
(diminished) goal progress elicits positive (negative) emotions. Elicitations of these positive
(negative) emotions further impact the goal-directed behaviour in form of decreased
(increased) intentions, plans and commitment of resources (Bagozzi, Baumgartner, & Pieters,
1998).
Pride is elicited when a person perceives progress towards a goal (Wilcox et al., 2011). Pride
creates a sense of achievement among a person which shifts his focus from a focal goal to
competing goals (Wilcox et al., 2011). Similarly, in this paper we propose that enhanced
perceived goal progress will elicit pride and the focus of the consumer will shift from
achievement of focal goal to competing goal.
85
Proposition 4- Pride will mediate the relationship between enhanced perceived focal goal
progress and licensing behaviour.
Contrary to above, an unjustifiable choice or a violation of a consumers own standards may
elicit guilt (Peloza, White, & Shang, 2012). Guilt motivates consumers to undertake guilt
reducing behaviours (Peloza et al., 2012). In literature there are three types of guilt, namely,
anticipatory, reactive and existential guilt (Cotte, Coulter, & Moore, 2005). During the
feeling of reactive guilt a person remembers the transgression of standard behaviour in past
(Peloza et al., 2012). Guilt acts as mediator between a guilt enticing behaviour and guilt
reducing behaviour. We propose that the diminishing perceived focal goal progress can lead
to elicitation of reactive guilt and reactive guilt can further lead to compensating behaviour.
Proposition 5- Guilt will mediate the relationship between diminished focal goal progress
and compensating behaviour
Implications of the Study:
This integrated model can help researchers and practitioners in understanding the role of
memory distortions, self-control and emotions in elicitation of licensing and compensating
behaviour. Moreover, managers can even predict the behaviour of consumer and even try to
adapt it in certain ways. Future research should empirically test these proposition.
86
87
References:
Bagozzi, R. P., Baumgartner, H., & Pieters, R. (1998). G o al-d irec ted E m otio ns.
Psychology, 2(1).
Fishbach, A., & Dhar, R. (2005). Goals as excuses or guides: The liberating effect of
perceived goal progress on choice. Journal of Consumer Research, 32(3), 370–377.
http://doi.org/10.1086/497548
Fishbach, A., Dhar, R., & Zhang, Y. (2006). Subgoals as substitutes or complements: the role
of goal accessibility. Journal of Personality and Social Psychology, 91(2), 232–242.
http://doi.org/10.1037/0022-3514.91.2.232
Fishbach, A., & Zhang, Y. (2009). The Dynamics of Self-Regulation: When Goals Commit
Versus Liberate. The social psychology of consumer behavior, 365-86. (Vol. 1).
http://doi.org/10.1017/CBO9781107415324.004
Mather, M., Shafir, E., & Johnson, M. K. (2000). Misremembrance of options past: Source
monitoring and choice. Psychological Science, 11(2), 132–138.
http://doi.org/10.1111/1467-9280.00228
May, F., & Irmak, C. (2014). Licensing Indulgence in the Present by Distorting Memories of
Past Behavior. Journal of Consumer Research, 41(3), 000–000.
http://doi.org/10.1086/676981
Mukhopadhyay, A., Sengupta, J., & Ramanathan, S. (2008). Recalling Past Temptations: An
Information‐ Processing Perspective on the Dynamics of Self‐ Control. Journal of
Consumer Research, 35(4), 586–599. http://doi.org/10.1086/591105
Peloza, J., White, K., & Shang, J. (2012). Good and Guilt Free: The Role of SelfAccountability in Influencing Preferences for Products with Ethical Attributes. Journal
of Marketing, 77(January), 1–52. http://doi.org/10.1509/jm.11.0454
Trope, Y., & Fishbach, A. (2000). Counteractive self-control in overcoming temptation.
Journal of Personality and Social Psychology, 79(4), 493–506.
http://doi.org/10.1037//0022-3514.79.4.493
Zhang, Y., Huang, S., & Broniarczyk, S. M. (2010). Counteractive Construal in Consumer
Goal Pursuit. Journal of Consumer Research, 37(1), 129–142.
http://doi.org/10.1086/649912
88
Exploring consumer trust towards organic food products
in the context of emerging markets
Hamida Skandrani1, Kooli Kaouther2, Sinda Belhaj3
1
Associate Professor in Marketing, University of Manouba, Tunis, Tunisia
2
Faculty of Management, Bournemouth University, UK
3
Ph.D Student at Université Lumière- Lyon 2, France
Emails: hamida.skandrani@gmail.com /kkooli@bournemouth.ac.uk
/bhsinda@gmail.com
Introduction:
Organic products demand is increasing worldwide. It reached a total value of almost 72
billion US dollars in 2013 with a growth of more than 10% in the most developed markets
(The World of Organic Agriculture; FiBL, 2015). This growth is due to the increasingly
consumers interest in their plate content and the organic food products (OFPs) benefits
(Yasuda, 2006; Nielsen, 2005; Tsakiridou et al. 2008; Gottschalk et Leistner, 2012; Stanton
and Guion, 2015). However, despite the increasing consumer health awareness, OFP market
is still in its infancy compared to conventional products one. Several researchers portrayed
trust as a key determinant of organic food purchase decision (Multu, 2007; Hamzaoui and
Zahaf, 2008a; Sangkumchalianga and Huang, 2012). Yet, some of them recognized the lack
of studies addressing the fundamental role of trust in food consumption (Sirieix, 1999;
Nuttavuthisit and Thøgersen, 2015), and the issue of trust towards product quality indicators
(Sirieix, 2001; Pichon, 2002). They stressed the need to investigate consumer's trust towards
these indicators (labels, product origin, etc.), and towards actors involved in food channel
(producer, retailer, issuing organization of quality signs, etc.) as they may foster consumer
trust in food products (Sirieix, 2001; Pichon; 2006; Nuttavuthisit and Thøgersen, 2015).
Research Gap and Research Problem:
Besides, research into trust in OFPs are often conducted in the developed countries where
consumers show an increasingly awareness to health concerns (Padel and Foster, 2005;
Zanoli, 2004; Zakowska, 2007), and where OFPs receive considerable media coverage (Hill
and Lynchehaun, 2002). This doesn’t seem the case for some recent emerging economies.
89
Indeed, despite the rapid growth in their organic farming, little is known about the
determinants of local consumer’s trust towards OFPs. Only few studies have addressed the
consumer buying motives and attitudes towards organic foods in these contexts (ŻakowskaBiemans, 2011; Thøgersen et al., 2015).
Objectives of the study:
The purpose of this study is to identify the determinants of trust towards OFPs in emerging
markets taking the example of Tunisia. Indeed, despite its second largest organic agricultural
area in Africa (Willer and Kilcher, 2011, p.111), Tunisian consumer's demand for these
products still embryonic compared to European one. The organic market represents less than
one percent of the domestic market. Moreover, one of the few academic studies conducted on
organic products in Tunisia, revealed that Tunisian consumers seem to have skeptical views
of organically grown food, which may suggest a lack of trust towards these products and the
stakeholders of the organic chain in a broader sense (Bouslama and Lakhdhar, 2007).
Research methodology:
The purpose of this study is to explore determinants of trust towards OFPs in an emerging
market context. An inductive approach was adopted and 21 in-depth interviews were
conducted with 21 organic food consumers living mainly in the capital city Tunis.
Respondents (9 men and 12 women, aged between18-65) were selected on the basis of their
OFPs consumption. The sample size evolved as we gained insight into the critical variables
that determine trust in OFPs and we kept gathering until we reached a saturation point
(Mucchielli, 1991; Arnould and Epp, 2006). A semi-structured interview guide allowing for
two-way communication was used and interviews lasted approximately between twenty
minutes and one hour. After getting the interviewee consent, the interviews were recorded,
then transcribed and analysed following the Miles and Huberman (1984) three steps
approach: 1- data reduction; 2- data display; and, 3-drawing and verifying conclusions. The
judges’ method was used to validate the categorization of statements in the content analysis.
Data analysis and results:
Four main determinants of trust towards OFPs are found to be particularly important.
1) Consumer related determinants: Individuals’ experience is found to be an influential factor
of trust towards OFPs (cited 25 times). “I rely on my experience to judge them” (Interviewee
4). Moreover, consumer expertise in dealing with organic food fosters trust towards this
consumption. Interviewee 3 declared: “In regard to my academic studies, I trust organic
90
products more than chemical ones, they are soft and reliable”. Trust is also explained by the
perceived risk of food contamination and diseases as well as the perceived advantage in
OFPs. Furthermore, consumers who have a high self-confidence trust the organic food that
they produce by themselves. Another consumer-based determinant is the search for
reassurance through trustworthy information sources. This finding offers support to Mutlu’s
(2007) one arguing that trust is developed when buyers are sure that the organic product is
really coming from organic agriculture without any cheats in production or certification.
Having a healthy lifestyle is another personal related determinant of trust towards OFPs.
Results show that people trust OFPs because they entail a possibility to follow right ways of
eating, cooking or even getting healthier with alternative medicines. This finding reinforces
Hamzaoui and Zahaf (2008a) findings showing that organic lifestyle is only based on trust
between consumers and producers.
2) People-based determinants. These are important factors that contribute to consumers’ trust
towards OFPs in the Tunisian context. Several respondents noted that they trust the supplier
(seller, farmer) because he is familiar to them or they have a special relationship with him.
This finding is in line with Sirieix et al. (2004) and Truninger (2006) results that emphasized
the importance of personal trust towards OFPs.
The results also reveal that consumers may trust organic food when the direct partners: 1-are
honest, 2-are small-sized 3-have a good reputation 4-transfer their credibility to the product.
Moreover, consumers are likely to trust their social network, the worth-of-mouth and experts.
This result supports Andrews and Boyle’s (2008) finding suggesting that interpersonal
communication plays an important role in reducing consumer risk perceptions of the products
and thus developing trust.
3) Organization-based determinants. The requirement for strict standards of control appears
to be an important factor to build trust towards OFPs. In addition, respondents who lack
expertise in assessing products’ reliability prefer to rely on competent institutions to establish
the authenticity of the product’s organic character.
Product traceability/transparency, government involvement in assuring food safety, are also
identified as other determinants associated with trust. Authors argued that in general,
consumers seem unaware about production and processing methods and ask for more
information. Thus, a better communication and more transparent control and certification
91
systems could foster their trust (Naspetti and Zanoli, 2006). Hence, organization-based
determinants constitute the institutional facet of trust.
Previous studies indicated that determinants of trust (in b2b and b2c contexts) could be
entailed by institutional arrangements such as government, certification, etc. (Pichon, 2006;
Truninger, 2006). Moreover, the importance of people and organizations related determinants
of trust might signal a need for a level of generalized trust to build trust in OFPs.
Respondents search for reassurance and for establishing voluntary and conscious friendship
with farmers, retailers, producers operating in the organic field as well as the expressed need
for control systems, organization and government support, give evidence to the later claim.
4) Marketing-mix based determinants. Findings highlight four main factors: product based
determinants, price, communication, and the store. First, product based determinants appears
to be the main important factor that foster trust towards OFPs. This is in line with Sirieix
(2001) who argues that trust can be oriented to several quality indicators (label, brand,
etiquette, etc.). The findings also support the crucial role of the brand in developing trust
toward OFPs, unlike Sirieix’s (2004) findings, which indicate a lesser importance of brand as
a source of trust. This result can be explained by the newness of the OFPs commercialization
in Tunisia, especially the packaged ones.
The origin of OFPs is an important trust determinant too. Its importance highlights the
consumer willingness to have more knowledge about the farming and production methods as
well as the control process. Although imported products were evoked in the respondents’
discourses, most of them prefer limited food transportation. Trusting local organic foods may
be seen as a way to support the small farmers.
Moreover, the intrinsic indicators are shown to be very important to gain consumer trust in
organic food. An OFP is perceived trustworthy if it is small-sized, tastes better than other
products and dark-coloured. Not surprisingly, the Tunisian organic consumer appears to be
more familiar with well-known brands. Thus, trusting organic brands seems to have an effect
on consumer trust in the OFP. Besides, nutrient content (wholesome content), clear
information about the ingredients and healthy package appear to enhance the credibility of
OFPs and then affect trust among consumers.
The relative poor effect of label and certification on trust towards OFPs is also to be
mentioned. The embryonic nature of the market, the limited number of suppliers and labels of
OFPs for the local market and the lack of an “organic consumption culture” could explain
92
such result. Thus consumers seem to rely more on more controllable variable to assess OFPs
trustworthiness. In this regard, respondents appear to trust control organisms more than the
displayed logo (label) on OFPs. They also trust high prices as indicator of quality and
nutritious content.
The sales store appears to be another factor that affects trust. Nevertheless, this study shows
mixed results regarding the impact of the store size (small farmers, large corporation), its
country of origin (international shop signs versus local ones), the category of OFPs sold
(farming products, manufactured and packaged products) and its relevance compared to the
role played by people working in the field (distributors, farmers, etc.) in building and
maintaining consumer trust towards OFPs. This raises many questions. Are Tunisian people
more personal contact oriented and that a cultural effect is to be considered when dealing
with trust towards OFPs? In this regard, Dion and Bonnin (2004) and Skandrani et al. (2011)
qualified Tunisia by a high contact culture. Should we consider these variables, as
moderators/mediators of trust building in future research? Is there any interaction effect
between these variables?
Implications of the Study:
The study has a number of practical implications for the OFP marketers including the need to
provide Tunisian consumers better access to the OFPs information. Since consumers place a
very high level of importance on people they are in contact with (organic sellers, distributors,
etc.), their trustworthiness level seems to be crucial. Trust in people could be fostered by
some institutional mechanisms e.g. guarantees, regulations, promises, legal recourse
(Shapiro, 1987, Zucker, 1986). Organic food producers/sellers should also offer of quality
products and reliable services that consumers can trust; they have to be honest, sincere and
fulfil their promises.
Besides, as organic consumers seem to rely on product origins and to be sensitive to
information provided about the ingredients, organic food suppliers should encourage visits to
farms, make their production processes transparent and should clearly indicate the origin and
the ingredients for packaged products. Institutions could also be a guarantor of product
tractability and promoter of OFPs sellers’ trustworthiness by setting up standards and
enforcing regulation.
93
Organic food producers/sellers have also to develop their brand equity, build a product image
based on health concerns, provide traceability information and inform about their control
process, as these factors are considered very important sources of OFPs trustworthiness’.
References:
Andrews, L. and Boyle, M.V. (2008). Consumers' accounts of perceived risk online and the
influence of communication sources, Qualitative Market Research, 11, 1, 59-75.
Arnould, E.J & Epps, A. (2006). Deep engagement with consumer experience: Listening and
learning with qualitative data. In R. Grover & M. Vriens (Eds.). The Handbook of Marketing
Research: Uses, misuses, and future advances, 54-82. London: Sage publications.
Berg, L. (2004). Trust in food in the age of mad cow disease: A comparative study of
consumers' evaluation of food safety in Belgium, Britain and Norway, National Institute for
Consumer Research, Lysaker, Norway.
94
Cart Vs E-Cart: A Study on the Influencing role of Retail Service
Quality on Customer Satisfaction in emerging Indian Food and
Grocery Multi Channel Retailing
Mr.M. SivaKoti Reddy 1, Dr.M.Kishore Babu2 , Mr.M.Naga Bhaskar3 and Dr.Sheela
Srivastava4
1
Department of Management Studies, Vignan University (Deemed), Guntur, (A.P.) India
2
KLU Business School, KL University, Vaddeswaram, Guntur, (A.P.) India
3
Department of Business Administration, Guntur Engineering College, Guntur, (A.P.) India
4
Jawaharlal Business School, Jawaharlal College of Engineering and Technology
Jawahar Gardens, Lakkidi, Palakkad, Kerala, India
Email: shiva.manukonda@gmail.com / kishore@kluniversity.in / mbabhaskar2@gmail.com /
sheelasrivastava@gmail.com
Introduction:
It was expected that the emerging markets like India and China are going to play a prominent
role as they together contribute for 40 percent in the world’s growth (The Legatum Prosperity
index, 2016). In the last decade, Indian retailing industry become very dynamic and attracting
the global retailer’s attention to enter in to this market due to the economic liberalisation and
demographic profile set of its customers (KPMG Report, 2014). The landscape of the Indian
retailing industry is quite interest as its lion share (92%) is falling under unorganised sector
and existing in such a forms of traditional family run mom and pop stores and corner stores.
In India it is estimated that approximately over 14 million outlets are family owned operated
stores and out of them 4 percent only are larger than 500 sqft in size it resulted that 11 shop
outlets for every one thousand people. Though the organised retailing sector’s portion is only
8 percent but it has been performing well as it generated currently USD 41.4 billion revenue
and is expected to be USD 94.8 billion by 2019 (SivakotiReddy.M, 2015).
The potential demographic factors of Indian market such as youth population, growing
working inhabitants, extending rural consumer’s market share, raising household income
levels of the middle class and increasing number of millionaires are grabbing the attention of
the international retail players attention and penetrated into the Indian market in addition to
the existing players resulted in growing competition. This poses a big challenge to the
modern retail formats to acquire and retain the existing customers (Sinha, P. K. and Banerjee,
A., 2004). Hence the modern retailers are coming forward to provide the wide diversity of
95
choice in retail formats, wide ranging products and various brands with utmost service quality
(Ganesh et al, 2007; Carpenter et al, 2006; Fox et al, 2004 and Schoenbachler et al, 2002).
The potential youth population of the Indian market is also an added advantage for the
expansion of e-retailing India. According to the census of 2011 about 500 million Indians are
under the age of 25 years. These millennial customers have access to more money than before
and have zeal of demand for variety of products A phenomenal growth has been observed in
E-commerce of retail channels (Crisil Research estimates, 2014). In order to survive in the
prevailed extensive competition, the modern retailers don’t want to confine themselves not
only to over the counter (OTC) business but also transforming themselves into multi channel
retailing with the best of their service quality. The depicted conditions created a big challenge
to the retailers to survive and sustain even in the e-business also made them to give the equal
priority for both traditional retailing and e-retailing.
Research Gap and Research Problem:
The delivery of high service quality has been treated as basic retailing strategy (Berry, 1986)
and service quality is considered as a tool for the retailers to enhance the value of the
customer, so that to positioning themselves in a competitive environment (Mehta et al.,
2000). The existing research revealed that, the service quality is useful to raise the
satisfaction among the customers and further may lead to be loyalty to the retail organisations
(Wong and Sohal, 2003; Sivadas and Baker-Prewitt, 2000). The properly maintained service
quality in the retailing make the customers to retain and to be loyalty to the retail service
providers (Yavas, Bilgin and Shemwell, 1997).
Research on service quality on the service quality perceptions is scant and ambiguous results
(Jain and Gupta, 2004) more over the results were differed from country to country. The
studies of Thorpe and Rentz (1996) stated highly encouraging results for the retail service
quality and customer satisfaction in the context of department stores, speciality stores and
hypermarkets of United States. Furthermore Lalwani and Han (200) also found the positive
results in examining the supermarket customers towards the retail service quality and
customer satisfaction among the retail customers of Singapore. On contrary the studies of
Angur, Nataraajan and Jahera (2005) expressed that, significant association was not found
between the retail service quality and the customer satisfaction.
96
This milieu made the researchers to think of the influencing role of service quality on
customer satisfaction. More over all the existing research was confined to test either the
service quality applicability or the impact of service quality on customer satisfaction only in
the modern retailing/over the counter business. No much study were found to assess the
impact of retailing service quality over customer satisfaction which may further provoke
retention, repatronage and loyalty feelings among the retailing customers. Hence this study
considered this as a research gap and to test the impact of retailing service quality on
customer satisfaction in the context of multi channel retailing by using five dimensional
model proposed by Dabholkar, Thorpe and Rentz (1996).
Objectives of the study:
The present research attempts to answer these questions.
1. To examine the impact of retail service quality on customer satisfaction in modern
retailing (Over the counter Business).
2. To examine the impact of retail service quality on customer satisfaction in online
retailing.
To address said questions, we constructed hypothesised conceptual model (shown in Fig.1)
based on extant literature on retailing service quality and customer satisfaction in multi
channel retailing.
Fig.1 Hypothesized conceptual model
97
Research methodology:
The primary data was collected by using the shopper intercept survey technique (Srinivasan
and Ratchford, 1991) from 560 adult food and grocery shoppers. Research team approached
supermarkets (n=30) and hypermarkets (n=10) in Guntur and Vijayawada cities of Andhra
Pradesh. Researchers approached the food and grocery shoppers with a structured and self
administered questionnaire and requested to fill the questionnaire. The data collection was
done during all times of the day while the customers before leaving the retail outlet.
Requested every third customer to participate in the survey to maintain the randomness in the
data. To measure the retail service quality we adopted Dabholkar’s scale (Dabholkar, Thorpe
and Rentz (1996)) consist of 28 items was used to measure the retail service quality of the
modern retailing. Enough precautions were taken to measure the service quality of the online
retail service quality we considered the physical aspects variable as website design and
personal interaction variable as responsiveness, rest of the variables were taken without any
modifications. Measures related to customer satisfaction were developed based on the scales
that are used in the previous studies Oliver and Swan (1989); Dowling and Uncles (1997).
The items of retail service quality and customer satisfaction were measured on a 5-point
Likert scale.
Data Analysis and Results:
Stepwise multiple regression approach (MLRA) was used to test the hypotheses of H10a –
H10e and H20a – H20e. The five evolved regression models for modern retailing customer
satisfaction (Offline customer satisfaction) contributed significantly and predicted 65.3
percent variation with physical aspects and total 86.8 variation with all independent variables.
The five emerged regression models indicated that all independent variables were related to
dependent variable (Customer satisfaction) with their respective significant (p=0.000)
ANOVA and β coefficients. The five evolved regression models for modern retailing
customer satisfaction (Online customer satisfaction) contributed significantly and predicted
56.8 percent variation with physical aspects and total 76.9 variation with all independent
variables. The five emerged regression models indicated that all independent variables were
related to dependent variable (Customer satisfaction) with their respective significant
(p=0.000) ANOVA and β coefficients. Therefore the hypotheses H10a – H10e and H20a – H20e
were proved valid.
98
Implications of the study:
The findings provide valuable insights to food and grocery retailers for reinforcing their
retailing service quality more effective, particularly in balancing their over the counter
business and online business. Findings related to consumers' perceptions of customer
satisfaction underline the level of consumers' attitudes and knowledge about retail service
quality. Knowledge obtained from customer satisfaction both offline and online customer
satisfaction enables retailers better understand what factors are more vital in evoking the
satisfaction among the food and grocery shoppers. So that the retail operators will be able to
take the appropriate measures to sustain the good service quality to give the satisfactory
experience to their customers. Further it is helpful to retain the existing customers and to
make them loyal for the retail stores by providing the superior feeling of customer
satisfaction. Undoubtedly the current research adds knowledge to our understanding of
customers attitude towards retail service quality and customer satisfaction by providing
empirical insights.
99
References:
Berry (1986). Retail Businesses are service Businesses. Journal of Retailing, 62(1) Spring:
3-6.
Carpenter, J., and Moore, M. (2006). Consumer demographics, store attributes, and retail
format choice in the US grocery market. International Journal of Retail and Distribution
Management; 34(6): 434-452.
The Legatum Prosperity Index. (2016). Retrieved from http://www.prsperity.com/feed/chinaand-india-two-biggest-drivers-global-prosperity-over-last-decade, Pp. 1
Fox, E., Montgomery, A., & Lodish. L. (2004). Consumer shopping and spending across
retail formats. The Journal of Business; 77(2): S25-S60.
Ganesh, Jaishankar., Kristy E. Reynolds and Michael E. Luckett., (2007). Retail patronage
behavior and shopper typologies: a replication and extension using multi-format, multi
method approach. Journal of the Academy of Marketing Science; 35: 369 – 381.
Piyush Kumar Sinha, Arindam Banerjee, (2004). Store choice behaviour in an evolving
market. International Journal of Retail & Distribution Management, 32(10): 482-494.
KPMG Report. (2014). Retrieved from https://www.kpmg.com/IN/en/ Issues And Insights/
ArticlesPublications/Documents/BBG-Retail.pdf , Pp. 02.
Piyush Kumar Sinha, Arindam Banerjee, (2004). Store choice behaviour in an evolving
market. International Journal of Retail & Distribution Management, 32(10): 482-488.
Schoenbachler, D. D., & Gordon, G. L. (2002). Consumers, food and convenience: the long
way from resource constraints to an actual consumption patterns. Journal of Economic
Psychology, 26(1): 105-128.
SivakotiReddy,M.,, Jayasankara Prasad,Ch., and Kishore Babu, M, (2015). An Overview on
Indian Food and Grocery retailing loyalty programmes and the Impact of Loyalty cards on
Consumer Purchase Behaviour. Asia Pacific Journal of Marketing and Management Review.
4(7): 33-44.
100
Young Consumers buying behavior towards Clothing
SuchitaJha*
Assistant Professor- Marketing
Symbiosis Institute of International Business,
G. No. 174/1, Rajiv Gandhi Infotech Park,
Phase I, Hinjewadi, Pune 411 057
*suchita.jha@siib.ac.in
Abstract:
In India as well as globally the usage of fashion apparel is an integral part of college-goers
lifestyle. The present study tries to explore the buying behavior pattern of clothing of students in
India with respect todemographic factors like gender and income .The study is conducted among
the post graduate studentsstudying in Pune. From the sample data collected it was noticed that
buying behavior of clothing is same across the different income and social classes of teenagers.
The data collection is done with structured questionnaire and focus group interview. Analysis of
the data suggested the fact that there is significant difference in behavior noted with various
demographic factors.
Key Words: Clothing, College-goers, Buying behavior
The opinion, figures and estimates are the responsibility of the authors and should not be
considered as reflecting the views or carrying the approval of SIIB. Any remaining errors are the
responsibility of the author.
101
Introduction:
Today in this consumer-based society, fashion has become a necessitous part of us.Every day we spend a
lot of time to decide about clothes we should wear. And selecting and purchasing clothes consumes more
time. It is very important to study clothing purchase behavior of teenagers and college-goers not only
because they are the trendsetters and opinion leaders for dress and living styles (Axford, 1970).
Consumers in the age group 15-14 represents 35% of the total population & it is expected that 300 million
more youth will join the workforce by 2025. Indian apparel industry is projected to grow at 15% CAGR
(Euromonitor, 2016).The youth or Generation Y is considered a major consumer segment receptive
towards globalization trends and is thus the focus of much attention from marketers. Recent years have
seen the intermingling of traditional Indian values with western values and Indians are adopting global
brands as a symbol of global value-system. Indian consumers’ aspirations and values are group dominated
and social acceptance is given high priority
Research Gap and Research Problem:
Younger people generally prefer a higher number of low quality, cheap and fashionable clothes,
compared to the older generation which prefers to purchase a fewer number of higher quality clothes. The
older consumers will see fast fashion as a waste since it means buying several garments of low quality
and then throwing away older clothes as soon as the new ones hang in the closet. (Bhardwaj&Fairhurst,
2010).
Piacentini& Mailer et al. (2004) indicated that teenagers from wealthier families having more disposable
money are less likely to be involved in status consumption. On the other hand, teenagers from the lower
and middle social classes are more likely to be involved in status consumption to display their “wealth”.
Consistent with studies (Eastman, 2011; O'Cass& Frost et al. 2002) status seeking consumers can come
from any income or social class level. On the contrary, Cha &Schor, (1998) demonstrated in a study on
cosmetics that the status seeking consumers are mostly Caucasian, higher in education and income, and
live in urban communities. Further, Deeter-Schmelz, Moore &Geobel, (2000) ascertain that consumers'
income have minimal impact on prestige concept.
The above researches suggested that buying behavior of clothing by teenagers depends on their income
and social class and there are no studies which represent that clothing buying behavior is irrespective of
income and social class.The present study focusses on this gap and finds that status consumption towards
cloth have consumers from any income and social class.following hypotheses were set on the basis of
papers discussed earlier
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H1: There is significant association between income and purchase behavior towards buying behavior of
clothing.
H2: There is no significant association between gender and purchase behavior towards buying clothes.
H3: There is no significant association between fashion consciousness and brand purchase
Objectives of the Study:
Evaluating the relationship between social class/ income on youngsters purchase behavior towards
clothing
To find the factors which are affecting the behavior of teenagers towards purchasing of clothes.
To find the differences between gender preferences towards buying of clothes.
Research Methodology:
The methodology for the present study used an online and offline survey method among young (18-35)
respondents. Online survey was selected as the method since the main study was related to the
youngsters’ behavior towards fashion so online survey method was considered to be more advantageous
in the current research set up (Evans and Mathur, 2005). Young audience was selected as the target
audience since the young consumers (mostly generation Y) have been found to be more prone towards the
fashion purchase. Consumers in the age group 15-14 represents 35% of the total population & it is
expected that 300 million more youth will join the workforce by 2025. As such Indian apparel industry is
also projected to grow at 15% CAGR (euromonitor,2016) which justifies the target population & country
of study,as the study is more towards understanding behavior so focus group has also been considered
asthe method of survey.
Questionnaire Design
The questionnaire was designed using established scales to measure each construct. The modified version
had seven items in sematic differential scales (Refer to questionnaire). Before administering the
questionnaire to the entire sample, it was initially administered to a group of 20 students as a part of the
pilot study. Based on the response and further discussion with this group, necessary changes were made
in the final questionnaire for wording issues and comprehensibility.
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Sampling and Data Collection
The population for the current study was considered to be students studying in the city of Pune enrolled
either under PG programs. For the sampling purpose, one college under Symbiosis International
University offering PG program were selected. The target groups of respondents were the students in the
age group of 21-30 years. Care was taken to ensure that the respondents represented all regions and
gender in order to maintain the heterogeneity in the data. An invitation mail was floated in the university
mailer which requested prospective students to take part in a survey on their behavior towards fashion
apparel Out of the total of 264 filled questionnaire, 195 usable responses were used for analysis as the
remaining questionnaires were incomplete in their response. Exploratory factor analysis was done to
evaluate the various factors affecting the college goer’s behavior towards fashion.
Conclusion & Discussion:
From the sample data collected it was noticed that males and femalesstudents’behavior towards
purchasing clothes differ. In the previous study done by Handa, M., &Khare, A. (2013)Young men and
women differ with respect to their involvement with fashion clothing and even more with regard to their
involvement with the purchase of fashion clothing, with women reporting a higher level of involvement .
Our study also supported the same research that women are more involved toward clothing
purchase.However, the gender roles have become fluid and flexible and fashion clothing holds similar
significance to both gendersthis study don’t accept this fact & talks that gender do have different
involvement level among Indian youth. Youth especially is extremely price-sensitive and are dependent
upon their parents for financial assistance. The Indian youth starts shopping independently while studying
in University and are governed by the peer groups in their purchase decisions. The purchase of global
luxury clothing by the Indian youth echoes the sanction they have received from their parents for pursuing
their goal of self-enhancement. Wicklund and Gollwitzer suggest that individuals self-symbolize through
products and the evaluation by the members of society about their success may be based on the physical
possession they own, and fashion clothing connotes success to the youth (Khare, A., &Rakesh, S.,2010).
Present study also found out that youth in general gives more importance to quality, durability, style and
aesthetics over brand of the clothes as brands means more price . It was also noticed that influence of
difference in income and social classes of teenagers and college-goers don’t have much involvement in
deciding the buying behavior of clothes.The status consumption is same in this demographic age and
income group.
Implications of the study:
The research findings indicate that in a developing economy, where income levels are still not very high,
and demographic profiles of the consumers indicate a greater percentage of middle-class homes, fashion
products are perceived as items of social recognition and individual enhancement. The Indian youth is
affected by global brands and perceive it to symbolize style and fashion trends.
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The involvement of the Indian youth with fashion clothing suggests that fashion clothing is accepted as an
important purchase item that is supposedly improving the overall image of the individual in groups
The study has come with certain consumer insights, which can be used by the clothing brands for young
generation to design an effective marketing strategy.
The determined factors are coming in a big way to help the clothing brand marketers to understand how
Indian teenagers perceive clothing
Our study has provided an insight about the relationship between clothes buying behavior and income and
social class of students. This finding is providing a consumer insight to develop the effective media
campaigns to influence the buying behavior of students. So irrespective of social class they want to do
similar kind of dressing so this gives an indication to brands to work on lowering the price for Indian
market and youth predominately dominates the clothing market in India.
Reference:
Handa, M., &Khare, A. (2013).Gender as a moderator of the relationship between materialism and
fashion clothing involvement among Indian youth.International Journal of Consumer Studies, 37(1), 112120.
JoveyWai Kwan Leung, Gail Taylor, (2002) "Fashion buying criteria of X Generation consumers in Hong
Kong", Journal of Fashion Marketing and Management: An International Journal, Vol. 6 Iss: 1, pp.63 –
76
Jung‐ImSeo, Jan M. Hathcote, Anne L. Sweaney, (2001) "Casualwear shopping behaviour of college men
in Georgia, USA", Journal of Fashion Marketing and Management: An International Journal, Vol. 5 Iss:
3, pp.208 – 222
Karthikeyan, S. (2011). An investigation on consumer behavior and preferences towards apparel,
purchase by Indian consumers age 15–25.
Khare, A., &Rakesh, S. (2010). Predictors of fashion clothing involvement among Indian youth.Journal
of Targeting, Measurement and Analysis for marketing, 18(3-4), 209-220.
Kumar, R. V., & Sarkar, A. (2008).Psychographic segmentation of Indian urban consumers. Journal of
the Asia Pacific Economy, 13(2), 204-226.
Mathews, S., & Nagaraj, H. (2011).An Analytical Study of VALS of Youth–Implication to
Marketers.Management convergence, 1(1), 11-23.
Narang, R. (2011). Examining the role of various psychographic characteristics in apparel store selection:
a study on Indian youth. Young Consumers, 12(2), 133-144.
O'Cass, A. (2004). Fashion clothing consumption: antecedents and consequences of fashion clothing
involvement. European Journal of Marketing, 38(7), 869-882.
105
Roy, S., & Goswami, P. (2007). Structural equation modeling of value-psychographic trait-clothing
purchase behavior: a study on the urban college-goers of India. Young Consumers, 8(4), 269-277.
Sarah Giovannini, YingjiaoXu, Jane Thomas , (2015) "Luxury fashion consumption and Generation Y
consumers: Self, brand consciousness, and consumption motivations ", Journal of Fashion Marketing and
Management, Vol. 19 Iss: 1, pp.22 – 40
Sudas Roy, Paromita Goswami, (2007) "Structural equation modeling of value‐psychographic
trait‐clothing purchase behavior: a study on the urban college‐goers of India", Young Consumers, Vol. 8
Iss: 4, pp.269 – 277
106
Clustering green customers for creating a
movement towards sustainability
Mahamaya Mohanty, Ravi Shankar
Department of Management Studies, IIT Delhi,
Vishwakarma Building, Shaheed Jeet Singh Marg, New Delhi 110 016. (INDIA)
Email: mahamayamohanty@gmail.com
Introduction:
The basic concern of this article is to identify the green customers as the primary enabler of
sustainability. The basic intent of sustainability is to establish an interaction among economy,
ecology, and societal related factors. Various governments have been promoting the concepts
of the immediate need of carbon reduction and energy saving through various advertisements.
Consumer durables are the basic need of the consumers for their day-to-day livelihood. The
manufacturing, production, storage, their transportation to different locations all include
energy usage and various noxious emissions (Sundarakani et al., 2010). Hence suppliers,
manufacturers, distributors, retailers and customers all play an important role in minimizing
the energy consumption and noxious emissions. This article is based on greening the
outbound logistics, so it is important to start with the manufacturers who should know who
are the customers for them so that they can produce green products (Zhu and Sarkis, 2004).
So for manufacturers, targeting the right customers play a key role which includes the
retailers or end-to-end customers.
Research Gap and Research Problem:
Logistics is an important element of any business venture. There is an urge of evolution of
moving materials/products from the conventional distribution to logistics management and
then to the present day integrated logistics supply chain system. A vast literature from past
studies has very few scopes on the issues related to green customers and green logistics.
Logistics cluster is an emerging avenue for the growth in logistics services and serve a
multitude of manufacturers, retailers and distributors and are not depended on any one
industry. The problem is specified to cluster the retailers and the customers for increasing
sustainability by optimizing transportation and warehousing system thus increasing
107
operational efficiency of the supply network. Sometimes the customers directly consume the
recyclable products from the manufacturers by disintermediation between the channels which
also has to be targeted by the manufacturers. So it is required to design a green logistics and
identifying the green consumers for building a sustainable supply chain. A combination of
seven elements required by green logistics has been shown in Figure 1.
5. Green
Transportation
6. Green
Warehousing
& storages
4. Green
Marketing
Green
Logistics
7. Green
Consumers
1 .Green
Suppliers
3. Green
Products
2. Green
Manufacturers
Figure 1: Elements of Green Logistics
Objective of the Study:
The objectives to understand the importance of adopting environment protection behaviours
and green actors at different level of green logistics positively contributes to the sustainability
of the environment. This is possible when the targeted customers are identified by the
manufacturer so that he can produce and promote green products. It is also essential to
develop a green logistics for preserving sustainability.
Research Methodology:
First of all a questionnaire was designed which constitutes the characteristics of green
consumers. The questionnaire focuses on awareness of green consumption and behaviour of
green products which should meet the 5R directives of reverse supply chain for consumer
durables that should have the ability to be recycled, remanufactured, redesigned, recovered,
and reused. The questionnaire is divided into four parts which includes commodity
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preference, environmental awareness, economy Vs environment, and purchasing behaviours.
Two issues considered before the survey includes sampling method and size after data
collection and data cleaning and proceeds with cluster analysis. The significance of different
clusters and their classification was carried out by ANOVA test. Over all other two major
concerns for the manufacturers is to use an efficient evaluation for green logistics focusing
mainly on the economy, which includes a minimized cost of transportation and warehousing
and environmental related issues so as to reduce the unwanted emissions especially carbon
emissions and negative externalities. Finally the study is carried to obtain optimisation
analyses where the methodology of clustering is used in a multi-echelon retail network that
involves manufacturing of raw materials to finished products and its faciliation to the various
retail stores in a retail chain and finally to the customers. The further analysis is done by using
Kohonen Self Organizing Map(KSOM), based on calculation of Euclidean distance, which is
one of the efficient clustering method. It is fast, robust, and visually efficient for carrying out
an effective distribution to various locations thus maintaining sustainability. Kohonen Self
Organizing Map (KSOM) algorithm is an unsupervised neural network learning to achieve
better group technology efficiency measure of similar item formation as well as a measure of
SOM quality.
Data analysis and results:
Data is collected using Internet through e-mails and social media, personal interviews and
post mails. Population have been sampled with an effective usage of statistical analysis based
on questionnaire survey which shows the importance of green products, green consumption
behavior, environmental protection attitude, and degree of greenness adopted by the
manufacturers. Both the demographic and psychographic characteristics were included in the
survey. Demographic characteristics include gender, income, age, qualification, and other
factors. Psychographic characteristics include green consumption behavior, environmental
concerns, negative externalities, and noxious emissions. Factor analysis helps in determining
the significant factors. The significant difference between the clusters was determined using
ANOVA and accordingly the clusters were classified and targeted customers were
determined. The analysis also depicts all the required processes for greening the outbound
logistics services for carrying the durables both in forward and backward directions. As
Kohonen maps (or Self Organizing Maps, SOMs) is one of the most popular learning
strategies among the several Artificial Neural Networks algorithms proposed in the literature.
The vectors considered in the study are devoted to the various location regions of the
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manufacturers, retailers and customers and assigned weights are the distances between source
i to destination j between various retailers and customers. Kohonen map describes about
variations in the information of the input data, and the topology of the original data is
preserved on the Self Organization Map (SOM) through the connection of the input vectors
which shares common features of the similar or neighbouring neurons. This objective help in
achieving green multi-echelon supply chain pattern and hierarchical cluster analysis using
KSOMs helps manufacturers to determine the prioritized customers.
Implications of the Study:
The study aims to provide an optimal supply chain solution for quality-driven distribution
functions with lowered costs and improved operational efficiency by an integrated
warehousing and transportation system. Supply chains can now be designed and operated to
be more sustainable by managing carbon emissions, noxious gases and adapting practices of
green supply chain as multiple initiatives are considered to promote sustainable
manufacturing through several bodies as the design of sustainable logistics highly contributes
towards economic, environmental, and social requirements. Understanding customer
perceptions of service will prevent manufacturers from developing myopic green product
fulfillment goals, damaged product, wrong product, or wrong quantity, any of which can
adversely affect retailer perceptions of the manufacturer.
References:
Amir A. (2006) . Designing a distribution network in a supply chain system: formulation and
efficient solution procedure. European Journal of Operational Research;171:567_76.
Khazoom, J. D., (1996). An Econometric Model of the Regulated Emissions for FuelEfficient New Vehicles. Journal of Environmental Economics and Management Vol. 28, pp.
190-204.
OECD (2001e). “Information and Consumer Decision-Making for Sustainable Consumption”
(ENV/EPOC/WPNEP(2001)16).
Srivastava, S. K. (2007). Green supply-chain management: A state-of the-art literature review,
International Journal of Management Reviews, 9, 53–80.
Sundarakani, B., De Souza, R., Goh, M., Wagner, S. M., & Manikandan, S. (2010). Modeling
carbon footprints across the supply chain. International Journal of Production
Economics, 128(1), 43-50.
Uster H, Easwaran G, Akcali E, Cetinkaya S. (2007). Benders decomposition with alternative
multiple cuts for a multi-product closed-loop supply chain network design model. Naval
Research Logistics;54:890_907.
110
Walker, H., Di Sisto, L., & McBain, D. (2008). Drivers and barriers to environmental supply
chain management practices: Lessons from the public and private sectors. Journal of
purchasing and supply management, 14(1), 69-85.
Williams, B. D., Waller, M. A., Ahire, S., & Ferrier, G. D. (2014). Predicting retailer orders
with POS and order data: The inventory balance effect. European Journal of Operational
Research, 232(3), 593-600.
Zhu, Q. and Sarkis, J. (2004). Relationships between operational practices and performance
among early adopters of green supply chain management practices in Chinese manufacturing
enterprises, Journal of Operations Management, Vol. 22, No. 3, pp.265-289.
111
Influence of Family and Social Media on the consumer decision
making of high involvement products
Ms. Mahasweta Das Saha1 and Dr. Sangeeta Sahney2
1
Assistant Professor, Deptt. Of Business Management, Tripura University, Suryamaninagar,
Tripura West, Agartala, Tripura 799022, & Research Scholar, Vinod Gupta School of
Management (VGSOM), IIT Kharagpur
Phone: +91-9612526229/ 0322-283866
Email: mahasweta_saha@tripurauniv.in / sahney@vgsom.iitkgp.ernet.in
2
Associate Professor, Vinod Gupta School of Management (VGSOM), IIT Kharagpur,
Kharagpur, West Bengal 721302
Introduction
The desired goal of any business should be to maximize consumers. According to Ward
(1974) “consumer socialization refers to the process, by which individual consumers learn
skills, knowledge, and attitudes from others through communication, which then assist them
in functioning as consumers in the marketplace”. Moschis and Moore (1979) state that
“socialization agent may refer to a person or organization directly involved in socialization
that have great influence because of their frequency of contact, primacy, and control over
rewards and punishments given to the individual”. Further, Moschis and Churchill (1978)
have identified parents, teachers, peers and media as important socialization agents.
According to different studies, it has been found that the influence of parents decreases with
adolescence (Koester and May, 1985) but teens do consult their parents while purchasing
clothing (Koester and May, 1985; Frances and Bums, 1992; Mascarenhas and Higby, 1993).
However, Bearden and Randall (1990) have found that during making purchase decisions,
adolescents tend to consult peer groups significantly. It is clearly evident that there is a
contradiction between the choices of selection of socialization agents by adolescents. Further,
Moschis (1985) has discussed that the “effects of family communication on the development
of decision-making patterns appear to vary across stages of the decision-making process and
type of product. A cross-sectional study of the development of adolescents' decision-making
patterns suggested that parental influence may vary by stage of the decision-making process,
with greater likelihood of influence at the information-seeking stage than at the productevaluation stage (Moschis and Moore 1979a).
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Today, the Internet plays a prominent role among young people in so far as learning is
concerned. Teenagers in urban Indian households get a lot of product and consumption related
information from the Internet and this learning affects their role in family purchase decisions.
This study mainly focuses on the role of parents and social media which influence consumers
for purchasing decision.
“The Internet and especially social media have changed how consumers and marketers
communicate (Hennig-Thurau et al. 2004; Nambisan and Baron 2007)”. Consequently, it is
important to analyze the influence of social media in consumer socialization process.
According to Mangold and Faulds (2009), “social media has amplified the power of
consumer-to-consumer conversations in the marketplace by enabling one person to
communicate with literally hundreds or thousands of other consumers quickly and with
relatively little effort”. They discuss certain methods to keep the conversations consistent with
organization’s mission and performance goals, “Provide networking platforms, Use blogs and
other social media, Use both traditional and Internet based promotional tools to engage
customers, Provide information, Design products with talking points and consumers’ desired
self images in mind, Support causes that are important to consumers, Utilize the power of
stories, Provide exclusivity, Be outrageous”.
Muratone (2008) has found that social media such as blogs, instant messaging and
social networking sites provides act as communication tool which makes socialization process
convenient. Consumers communicates with others through various social media websites and
find information which helps them in taking consumption related decisions (Lueg et al. 2006).
Social media educates consumers because it provides communication with friends and peers
who provide huge information faster (Gershoff and Johar 2006; Taylor, Lewin, and Strutton
2011).
Wang et al. (2012) conclude that “peer communication through social media
influences purchase intentions by direct influence through conformity and an indirect
influence by reinforcing product involvement” which implies that combination of peer
communication through media positively influences purchase intention of a consumer.
Further, Singh et al. (2005) have found that local websites of different countries such as India,
China, Japan, and the United States differ in cultural aspects which imply that peer
communication through social media will vary from one country to other.
Dominantly, Internet usage is mostly characterized by men but recent studies indicate
that gender difference in Internet use is rapidly decreasing (Weiser 2000; Youn et al. 2003).
113
According to a comScore (2010) report, “globally, 45.7 percent of women are using the
Internet, whereas for men this figure is 54.3 percent” (Abraham, Mo¨rn, and Vollman 2010).
According to Tanuri (2010), marketers are trying to use social media in their
marketing strategies and campaigns to reach out to customers. “Promotions, marketing
intelligence, sentiment research, public relations, marketing communications, and product and
customer management are sub-disciplines of marketing that may use social media”. Different
social media platforms such as blogs, online discussion forums, and online communities has
an effect on marketing performance so, it is vital to understand their relative importance and
their interrelatedness (Stephen and Galak 2009).
Research Gap and Research Problem
Different research papers indicate that social media is becoming one of the advanced
technology tools providing product related information, educating consumers, probably acting
as active socialization agent and subsequently influencing consumers towards purchasing
decision. However, there is minor work being done to measure the impact of social media as a
socialization agent. No study has been done so far that provides a comparative analysis of
social media and traditional socialization agent such as family (parents) for Indian markets.
Objectives of the study
To study the influence of family across the different stages of consumer decision making
process.
To study the influence of social media across the different stages of consumer decision
making process.
Research methodology
The idea of a research design is to specify methods and procedures for collecting and
analyzing the data. It needs to be designed in such a way that it minimizes bias and maximizes
the reliability of data collected and analyzed.
Refrigerator and car were selected as high involvement products for conducting the study. A
conceptual model was developed after extensively reviewing the literature. Furthermore, a
structured questionnaire was developed, followed by data collection for purifying the
114
questionnaire. This data was further checked for reliability and construct validity before
collecting data on a larger scale.
The study was conducted in the select states of East India (West Bengal & Tripura),
comprising of males and females in the age group of 21 to 50 years. The sample consisted of
312 respondents who were mostly computer literate, pursuing bachelors or masters’ degree or
working executives.
Structured interviews and questionnaires were used for data collection. After data collection,
structural equation modelling was used; specifically confirmatory factor analysis was
performed for checking construct validity and other relevant measures. Path analysis was
performed to check whether the data fits the hypothesized measurement model.
Data analysis and results
The data consisted of 312 respondents comprising of 163 males and 149 females in the age
group varying between 21 years to 50 years. The data was tested using SPSS 17 and IBM
AMOS 20. Maximum likelihood model estimation is used to test the hypothesized
relationships. The model exhibits good fit to the data. (Chi-square= 193.92, df= 63,
GFI=0.933, CFI= 0.933, RMSEA=0.082).
All the hypotheses were supported (p<0.01). Regarding the main effects, influence of family
was found to be highest during pre-purchase stage. Furthermore, it was found that there is a
strong positive influence of social media while evaluating the alternatives for high
involvement products such as refrigerator and car. Consequently, respondents tend to use
social media for evaluating their alternatives before purchase decision.
Implications of the Study
The desired goal of any business should be to maximize consumers. In this era of
globalization and heightened competition, marketers are struggling and fighting hard to
increase their consumer base, and consequently maximize profits and retain market shares.
This study will provide a conceptual framework for marketers to design communication
strategy. The study would help the marketers to understand the growing role of family
(parents) and social media and its impact on the consumer socialization process, and will help
business organizations in designing communication strategies in an effective manner for
increasing the consumer base.
115
References:
Bearden, W. O., and Rose, R. L. (1990), “Attention to Social Comparison
Information: An Individual Difference Factor Affecting Consumer Conformity,”
Journal of Consumer Research, 461-471.
Gershoff, A. D., and Johar, G. V. (2006), “Do you know me? Consumer Calibration of
Friends' Knowledge,” Journal of Consumer Research, 32(4), 496-503.
Hennig-Thurau, T., Gwinner, K. P., Walsh, G., and Gremler, D. D. (2004), “Electronic
Word-of-Mouth via Consumer-Opinion Platforms: What Motivates Consumers to
Articulate Themselves on the Internet?” Journal of Interactive Marketing, 18(1), 3852.
Higby, M. A., and Mascarenhas, O. A. (1993), “Media, Parent, and Peer Influences in
Teen Food Shopping.” Journal of Marketing Management (10711988), 3(2).
Koester, A. W., and May, J. K. (1985), “Profiles Of Adolescents' Clothing Practices:
Purchase, Daily Selection, And Care,” Adolescence, Vol 20(77), 1985, 97-113.
Lewin, J. E., Strutton, D., and Taylor, D. G. (2011), “Friends, Fans, and Followers: Do
Ads Work on Social Networks,” Journal of Advertising Research, 51(1), 258-275.
Moschis, G. P. (1985), “The Role of Family Communication in Consumer
Socialization of Children and Adolescents,” Journal of Consumer Research, 898-913.
Moschis, G. P., and Moore, R. L. (1979),“Decision Making among the Young: A
Socialization Perspective,” Journal of Consumer Research, 101-112.
Moschis, G. P., and Moore, R. L. (1979),“Family Communication and Consumer
Socialization,” Advances in Consumer Research,6(1),359-363.
Muratore, Isabelle (2008), “Teenagers, Blogs and Socialization: A Case Study of
Young French Bloggers,” Young Consumers, 9, 2, 131–42.-CASE STUDY
Stephen, A. T., & Galak, J. (2010), “The complementary roles of traditional and social
media publicity in driving marketing performance”, Fontainebleau: INSEAD working
paper collection.
Wang, X., Yu, C., and Wei, Y. (2012), “Social Media Peer Communication and
Impacts on Purchase Intentions: A Consumer Socialization Framework,” Journal of
Interactive Marketing, 26(4), 198-208.
116
The influence of Brand Awareness, Brand Personality and
Customer Satisfaction on Brand Loyalty towards a leading cosmetic
brand in Al Buraimi Region, Sultanate of Oman.
Mrs. Maya Manoj and Mrs. Elizabeth Philippe
Al-Buraimi University College, Al-Buraimi, Sultanate of Oman, PO Box: 77 PC: 512
E-mail: maya@buc.edu.om, elizabeth@buc.edu.om
Introduction
To position itself as triumphant in the mind of the customer is very critical for a brand
especially when there are lots of substitutes or alternatives available. In the consumer product
market, with the advent of internet and online shopping the customers are flooded with wide
variety of products to choose from. Competing with brands having similar characteristics’ and
qualities and to acquire a distinct position is not very easy. In this study the relationship between
Brand Awareness, Brand Personality, Customer Satisfaction on Brand Loyalty towards a leading
cosmetic brand in Oman was analyzed. The brand with its distinct creativity and ability to
understand the requirements of their customers has grown into a successful one operating in
Oman. The cosmetics market is an area where brand loyalty plays a major role in the triumph of
products. This study focuses on the loyalty level of working women in Al Buraimi, Oman
towards a leading cosmetic brand all over GCC and especially in Oman.
Brand awareness is defined as the consumers’ ability to recollect or distinguish a brand,
or in other words whether the consumers are familiar with a brand (Keller, Parameswaran, &
Jacob, 2011). Brand Personality is defined as the human characteristics’ associated with the
brand. Brand personality is considered as the third dimension of the brand after the physical and
functional attributes of the brand(Engel, Blackwell, & Miniard, 1995). Customer Satisfaction is
defined as a final outcome in the decision making process by the consumer starting from
problem recognition to satisfaction(Engel & Roger, 1978).
117
Research Gap and Research Problem
There have been many studies conducted on brand loyalty towards cosmetic products.
But studies are scarce in this area among the Gulf Cooperation Council (GCC) Countries.
Especially Oman is a country where the population is high and income is not very high when
compared with other GCC countries. Since the Arab ladies are more inclined and focused on
cosmetics, the researchers proposed the idea to conduct the study in this area. Hence this study
was initiated.
Objectives of the Study
The main objective of the research is to analyze the relationships between the variables
used in this study i.e. Brand Awareness, Brand Personality, Satisfaction, and Loyalty towards a
popular cosmetic brand among the employed Omani women in Al Buraimi area, Oman.
Specific objectives of the study are
To examine the influence of Brand Personality on Customer Satisfaction
To examine the influence of Brand Awareness on Customer Satisfaction
To examine the influence of demographics on Customer Satisfaction
To examine the influence of Customer Satisfaction on Brand Loyalty
To examine the moderating influence of Demographics in the relationship between
Customer Satisfaction and Brand Loyalty.
Research Methodology
The research followed a descriptive pattern and used structured questionnaire. The
sample size was 200. Convenient sampling method was used. Data was scrutinized for missing
values, outliers, extreme values and normality. Both primary and secondary data was used.
Data Analysis and Results
Cronbach Alpha and KMO measure of sampling adequacy were calculated and found to
be significant and valid. The population for the study constituted of Omani working women in
Al-Buraimi. Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy was found to be 0.722
118
which ensures adequacy of the sample to carry out factor analysis. Cronbach Alpha for the
sample was 0.864 which ensures reliability and acceptability of the questionnaire.
The findings of the study clearly indicate that Brand Awareness, Brand Personality and
Customer Satisfaction influenced Brand Loyalty. Majority of the sample belonged to the income
level 450-550 Riyal Omani which meant a lot to this brand. About 70% of the sample had
Diploma as their qualification. Sixty Five percent of the sample was married with kids. The
calculated VIF’s were less than 4 which indicated that there is no multicollinearity and tolerance
levels were less than 1. The Durbin Watson statistic was calculated to be 1.826 which ruled out
the presence of autocorrelation.
The calculated R squared value between Brand Awareness and Customer Satisfaction
was 0.64, between Brand Personality and Customer Satisfaction was 0.60. The R squared value
between Brand Awareness and Brand Loyalty was calculated to be 0.78, between Brand
Personality and Brand Loyalty was found to be 0.80 and customer satisfaction with Brand
Loyalty is 0.65. Hence it was concluded from the analysis that the variables had strong positive
relationship and influenced the loyalty towards the brand.
Implications of the Study
The personality and appearance of the stores of this brand appeals highly to the women
customers. Since there is strong competition in the cosmetic field this brand has to concentrate
more on providing variety products with attractive offers and benefits to the customers. This
brand is preferred more by the Omani women because of its reasonable price, high quality and it
is affordable to them within their limited income level. It is highly important for this brand to
sustain this advantage. Different offers and loyalty programs combined with latest offerings to be
provided.
The findings of this study pertain only to the Al Buraimi area. Future research could be
done on a more elaborate scale by comparing the cosmetic preferences of Omani and expatriate
working women in Al Buraimi region and all over Oman which will provide more knowledge in
this area.
119
References
1. Aaker, D. A., & Equity, M. B. (1991). Capitalizing on the Value of a Brand Name. New
York.
2. Engel, J. F., Blackwell, R. D., & Miniard, P. W. (1995). Consumer behavior, 8th. New
York: Dryder.
3. Engel, J. F., & Roger, D. (1978). Blackwell, and David T. Kollat, Consumer Behavior:
Hinsdale, Illinois: The Dryden Press.
4. Keller, K. L., Parameswaran, M., & Jacob, I. (2011). Strategic brand management:
Building, measuring, and managing brand equity: Pearson Education India.
5. Sheth, J. N. (1973). A model of industrial buyer behavior. The Journal of Marketing, 5056.
6. Tellis, G. J. (1988). Advertising exposure, loyalty, and brand purchase: A two-stage
model of choice. Journal of marketing research, 134-144.
120
Exploring Prominent Social Cognitive Determinants of
Environmentally Sustainable Consumption Behavior in Children
Meenakshi Sharma and Dr.Leela Rani
Department of Management
Birla Institute of technology and Sciences, Pilani Campus, Pilani, India
Email: meenakshi.sharma@pilani.bits-pilani.ac.in
Introduction:
Environmentalism emerged as a global phenomenon in the late 1960s and early 1970s. The last
decade has witnessed a steady increase in global warming i.e emission of greenhouse gases. In
Millennium Development Goal 2010, UN declared sustainable consumption as one of the
important pillars of environmental sustainability. As consumption activities majorly contribute to
environmental problems, progress on environmental sustainability requires that people change
their consumption activities. It could be done for example by purchasing environment friendly,
local products and by reusing, donating or recycling items of consumption. Sustainable
consumption has been a topic of interest within applied research. Primary school children (age
group of 8 to 10 years) constitute an important target group. The focus lies in the fact that
consumption patterns in young consumer have changed and continue to change rapidly due to the
breakdown of geographic boundaries and higher disposable income (Hume, 2010). Additionally,
this group represents a new generation of consumers with a strong potential to affect the type of
goods and service offered in a future market and who have the potential to become future leaders
responsible for environmental sustainability. This is supported by Asmuni’s (2012) statement
that the development of stance, obligation and ability to sustain and look after the environment
starts at an early age. Within Asia, India is a major market with strong economy and presence of
many international companies which makes it worth to explore such issues here.
Research Gap and Research Problem:
Social Cognitive Theory (SCT) postulates that behavior change is influenced by a complex
interaction, called ‘reciprocal determinism’, that occurs between personal factors or cognitive
121
factors, environmental factors, and one’s past behavior (Bandura, 1986). Several studies
(Hessami, 2013; Lee, 2008; Lin, 2013) have experienced the influence of self efficacy, outcome
expectations, social influence variables found in SCT framework on sustainable behavior or
environmental behavior and have found significant relationships. This paves the way for
expecting that SCT could be an appropriate theory for explaining ESCB. The present research
work focused on 5 important determinant variables from the SCT framework for an empirical
investigation regarding their influence on ESCB amongst primary school children. These
variables are namely self efficacy (how well an individual can perform the behavior (Bandura,
1997)), Hanss, 2010 explored the perceived personal control that consumers experience with
respect to influencing sustainable development by their purchase decisions. Various cross
sectional studies have investigated self-efficacy with regard to environmental outcomes and also
in connection to consumer behavior. These studies suggest that self-efficacy are related to
sustainable consumption behavior. Therefore, it necessitates an investigation into the relationship
between self-efficacy and ESCB among children.
outcome expectancies (how much the
individual values the outcomes of performing the behavior (Bandura,1986)), outcome
expectation
(social,
physical,
and
self
evaluative
outcomes
expected
of
behavior
(Bandura,1986)), self regulation (it involves skills for planning, organizing, and managing
(Bandura, 2001)) and social influence (the perceived support for ESCB from important others,
such as family and friends (Bandura,1986)) Empirical findings suggest that children’s affiliation
with friends and parents who engage in environmental behavior is a strong predictor of the
child’s own behavior, or at least for some of it (Lee,2011). Studies by various researchers such as
Mc Neal and Ji, 1999; Lee2008, 2009, 2011 have shown influence of peer and parent among
adults, which necessitate an investigation into the relationship between peer and parental
influence with respect to ESCB.
The proposed work aims to fill this gap by examining ESCB differences amongst Indian primary
school children with respect to the SCT factor
Objectives of the study:
• To identify the influence of SCT factors on ESCB amongst Indian primary school
children
Hypothesis:
122
H1: Primary school children self-efficacy will show significant influence with respect to ESCB.
H2: Primary school children outcome expectation will show significant influence with respect to
ESCB.
H3: Primary school children outcome expectancies will show significant influence with respect to
ESCB.
H4: Primary school children self-regulation will show significant influence with respect to ESCB.
H5: Primary school children social influence will show significant influence with respect to
ESCB.
Research methodology:
A 36 item refined questionnaire derived from existing literature was administered to 630 primary
level students of private and government school in Bhiwadi town of Alwar district in Rajasthan,
(India). Scales based on previous research were used to measure independent variables (selfregulation, peer influence, parental influence, outcome expectation, outcome expectancy and selfefficacy) and the dependent variable (ESCB). The research instrument (Table 2) was prepared
from adapting the scales proposed by researchers i.e Self-regulation by Branscum (2004, 2013)
measured by three point likert scale 1= ‘Never’ to 3= ‘Always’ Similarly peer and parental
influence from PPI scale given by Wilson,2000 (1= ‘Disagree’ to 3= ‘Agree’), Outcome
Expectation and expectancy was adopted from Branscum (2011), Sharma(2006) (1= ‘Never’ to
3= ‘Always’) and Self Efficacy by Bandura (1986) (1= ‘Cannot do at all’ to 3 = ‘Certainly can
do’. In order to measure the dependent variable (ESCB), the questions were based on the model
proposed by Muderrisoglu (2011) (1= ‘Never’ to 3= ‘Always’). The questionnaire was originally
in both Hindi and English. After pretest and pilot test the scale were improved and data were
collected on 5 independent variables and one dependent variable. Results supported the reliability
of all scales used. The reliability of the questionnaire was 0.879 and it took around 20 minutes to
complete.
Data Analysis and Results:
123
Principal Component Analysis with varimax rotation was performed to examine whether the
data in the current study could be reduced to the meaningful factors. Correlation between ESCB
and SCT constructs were accessed using multivariate regression technique. Based on the
descriptive analysis we reveal the current situation of primary school children’s ESCB and the
influence of five chosen social cognitive determinants on ESCB. The model containing all six
variables was significant: R= .626, R2= .69, F(6,642)= 68.94, p< 0.05. The R value represents the
simple correlation and is 0.62, which indicates a high degree of correlation. Among the six
variables, outcome expectancy (β = .008, p > 0.05) was found to be non-significant predictors of
sustainable consumption behavior among primary school children. The predictability of the
remaining five variables were thus in descending order: Self-regulation (β=.264, p<.05), Peer
Influence (β= .179, p<.05), Parental Influence (β= .163, p<.05), Outcome expectation (β= .154,
p<.05), and Self Efficacy (β= .113, p<.05). The direct effect of certain variables on ESCB can be
observed from the weights given to the coefficient, which indicates the relative change in the
dependent variable for any change in the independent variable.
The regression equation can be stated as
Y= .764 +. 264SR+.179PI +.163PAI+.114OE+.113SE
Where Y= ESCB, SR = Self-Regulation’, PI = Peer Influence, PAI = Parental Influence, OE
= outcome expectation and SE= Self-Efficacy.
The current study was designed to provide marketers dealing in green products with information
about Indian’s primary school children’s sustainable consumption behavior.
Implication of the Study:
An in-depth enumeration of findings and subsequent discussion on investigated relationships,
discloses how social cognitive theory offers a useful framework for understanding social
cognitive implications on ESCB in children. Additionally, which of the social cognitive
determinants investigated in this paper have most profound influence on ESCB in children could
guide teachers, policy makers and researchers. Such implications have been also discussed in
brief.
124
References:
1. Asmuni S., Khalili J.M., Zain Z.M (2012). Sustainable Consumption Practices of
Students in an Urban Setting: A Case in Selangor. Procedia - Social and Behavioral
Sciences, 36, 716 – 722
2. Bandura A (1986). Social Foundations of Thought and Action: A Social Cognitive
Theory. Engelwood Cliffs, N.J: Prentice-Hall.
3. Bandura, A. (1997). Self-efficacy: The exercise of control. New York: Freeman.
4. Bandura, A. (2001). Social cognitive theory: An agentic perspective. Annual Review of
Psychology, 52, 1–26.
5. Hume M (2010). Compassion without action: Examining the young consumers
consumption and attitude to sustainable consumption. Journal of World Business, 45,
385–394
6. Hessami, H.Z., &Yousefi, P. (2013). Investigation of major factors influencing green
purchasing behavior: Interactive approach.European Online Journal of Natural and
Social Sciences, 2(4), 584–596 .
7. Lee, K. (2008). Opportunities for green marketing: Young consumers.Marketing
Intelligence & Planning,26(6), 573–586.
8. Lee, K. (2009). Gender differences in Hong Kong adolescent consumers’ green
purchasing behavior. Journal of Consumer Marketing, 26 (2), 87–96.
9. Lee, K. (2011). The green purchase behavior of Hong Kong young consumers: The role of
peer influence, local environmental involvement, and concrete environmental knowledge.
Journal of International Consumer Marketing, 23, 21–44.
10. Lin, H. Y., & Hsu, M. H. (2015). Using social cognitive theory to investigate green
consumer behavior. Business Strategy and the Environment, 24(5), 326-343.
11. McNeal, J. U., &Ji, M. F. (1999). Chinese children as consumers: An analysis of their
new product information sources.Journal of Consumer Marketing, 16 (4), 345–365.
12. Muderrisoglu, H., &Altanlar, A. 2011. Attitudes and behaviors of undergraduate students
toward environmental issues.InternationalJournal of EnvironmentalScience and
Technology, 8(1), 159–168.
125
The differential impact of brand origin and expert advisor
on brand trust and perceived risk
Neha Srivastava and Satya Bhusan Dash
Indian Institute of Management Lucknow, India
Email: fpm8004@iiml.ac.in / satya@iiml.ac.in
Introduction:
Marketers consider brand trust as critical element in generating intense customer-brand
relationship (Elliott and Yannopoulou, 2007). Viewing brand trust as the important driver of
consumer buying behavior, lot of academic research has established its relationship with brand
loyalty (Ballester and Aleman, 2001; Herrera and Blanco, 2011; Matzler et al., 2008), brand
equity (Ballester and Aleman, 2005; Ambler, 1997), brand commitment (Morgan and Hunt,
1994; Ha, 2004; Wang, 2002) and purchase intention (Sichtmann, 2007; Zboja and Voorhees,
2006; Herrera and Blanco, 2011). However, brand trust can be seen as an effective antecedent of
perceived risk. Moreover, it is surprising that majority of studies on brand trust have focused
more on commonly purchased low inherent risk products such as books, perfume, shampoo,
watch (Sung and Kim, 2010; Chaudhuri and Holbrook, 2001; Ballester and Aleman, 2005; Lau
and Lee. 1999) and research in high inherent risk product context has been ignored considerably.
When customers perceive high risk in a product category, they are often reluctant to purchase the
product brand. Brand trust is perquisite in such conditions of risk where chances of incurring loss
are high (Molm et al., 2000; Paulssen et al., 2014) and acts as an important contributor towards
consumer’s attitude formation (Okazaki et al., 2007). Unlike earlier works on brand trust, this
paper has empirically tested the relationship between brand trust and perceived risk. Also the
significant role played by two less researched constructs of brand origin and expert advisor in
developing brand trust and their relationship if any, with perceived risk has been assessed.
Research Gap and Research Problem:
126
Extant literature demonstrate that brand choice for high perceived risk products are determined
by price, quality, promotion, advertising and packaging (Yee and Chin, 2007; Broadbridge and
Morgan, 2001; Ballester and Aleman, 2001; Chen et al., 2004; Beattie, 2004). However, it is to
be noted that alone marketing mix variables cannot contribute for the formation of brand trust in
high perceived risk product contexts. During brand trust development process, customers are not
only concerned about the quality, price and reputation of the brands but also with other nonmarketing mix factors such as the brand origin image and the professional expert advise (Yasin
et al., 2007). Brands with favorable origin image are readily accepted by customers (Lim and
O’Cass, 2001) and enhance overall customer confidence for a brand. Most of the previous
studies have focused on establishing relationship of brand origin image with purchase intention
(Souiden et al., 2011; Ahmed et al., 2004), brand equity (Yasin et al., 2007), brand personality
perceptions (Basfirinci, 2013) or attitude (Batra et al., 2000). Relationship of brand origin image
with brand trust and perceived risk have been relatively ignored. Similarly, another significant
non-marketing mix factor, professional expert advise which has been considered as an important
determinant for risk reduction with respect to technological innovations (Costa-Font and Gil,
2012) and considerably mentioned in behavioral studies (Bonaccio and Dalal, 2010) is less
researched construct in the field of marketing and requires considerable attention for its
relationship with brand trust formation in the context of high perceived risk products. To
accomplish this goal, the present study attempts to examine relationship of brand origin image
and professional expert opinion with brand trust and perceived risk. The result of this research is
expected to make substantive contribution in the domain of brand trust with respect to high
perceived risk context.
Objectives of the study:
Specifically, our study on brand trust addresses following objectives:
(i)
To identify and test the impact of brand origin on cognitive and affective brand trust.
(ii)
To identify and test the impact of professional expert advisor on both cognitive and
affective brand trust and also on perceived risk.
(iii)
To identify and test the relative importance of perceived risk as consequence of brand
trust.
127
Research Methodology:
To accomplish objectives of this study, research has been structured in two phases, viz.
exploratory and descriptive. Integrating past literature, the study has developed a model
examining brand origin and expert advisor as antecedents of brand trust and perceived risk as its
consequence. In the descriptive study, a survey with structured instrument has been developed.
Questionnaires were administered on 680 respondents resulting in 507 usable data points. The
survey data analysis was conducted in two stages. The first step involved establishing the
reliability
and
validity
of
measurement
items
measuring different variables through
confirmatory factor analysis. Then path analysis was performed using structure equation
modeling to test the relative importance of the antecedents and consequence of brand trust.
Data analysis and Results:
The result provide clear evidence that brand origin image only has an indirect effect on perceived
risk, and the relationship is mediated by cognitive and affective brand trust. On the other hand,
expert advisor has both an indirect and also a direct effect on perceived risk, bypassing brand
trust as a mediator. Further, the study supports that both cognitive and affective brand trust are
inversely related with perceived risk.
Implications of the Study:
Positive direct effect of brand origin image on brand trust and indirect effect on perceived risk is
in line with findings of Han (1989) who explained that when consumers are less familiar with a
product, the country image acts as ‘halo’ that directly affects consumers’ beliefs about the
product and indirectly affects its overall evaluation through these beliefs (Erickson et al., 1984;
Johansson et al., 1985; Ahmed et al., 2004). This suggests that brand origin image serves as a
quality halo for customers as a source for building brand trust and baseline for reduced perceived
risk in the context of less familiar product categories. This means that the marketers should take
extra care to educate the customers through communication campaigns that emphasize the
brand’s origin as this might offer a more favorable brand positioning. Such a positioning can be
seen as an opportunity in emerging markets such as India, where foreign products are perceived
to be of higher quality and are usually preferred by customers. Findings related to positive
influence of professional expert advisor on both brand trust and perceived risk further augment
128
the viewpoint that where, the customers have little knowledge, high importance is paid to
professional expert advisor role in not only building trust for the product brand but also reducing
risk associated with the category. Findings of this result can be helpful to marketing managers in
considering and approaching professional expert advisors for dissemination of product, brand
and usage related information to customers, for whom the brand choice is relatively complicated
process. Moreover, results also imply that marketers should aim to balance affective and
cognitive brand trust initiatives for effective reduction of perceived risk in high-consequentiality
perceptions.
References:
Ahmed, Z.U., Johnson, J.P., Yang, X., Fatt, C.K., Teng, H.S. & Boon, L.C. (2004). Does
country of origin matter for low-involvement products? International Marketing Review,
21, 102-120.
Ballester, E.D. & Aleman, J.L.M. (2001). Brand trust in the context of consumer loyalty.
European Journal of Marketing, 35, 1238-1258.
Ballester, E.D. and Aleman, J.L.M. (2005). Does brand trust matter to brand equity.
Journal of Product and Brand Management, 14, 187-196.
Batra, R., Ramaswamy, V., Alden, D.L., Steenkamp, J.-B.E.M. & Ramachander, S.
(2000). Effects of brand local and nonlocal origin on consumer attitudes in developing
countries. Journal of Consumer Psychology, 9, 83-95.
Broadbridge, A. & Morgan, H.P. (2001). Retail brand baby products: what do consumers
think?. Journal of Brand Management, 8, 196-210.
Chaudhuri, A. and Holbrook, M. B. (2001). The chain of effects form brand trust and
brand effect to brand performance: the role of brand loyalty. Journal of Marketing,
65, 81-93.
Ha, H.Y. (2004). Factors influencing consumer perceptions of brand trust online. Journal
of Product and Brand Management, 13, 329-342.
Han, C.M. (1989). Country image: halo or summary construct? Journal of Marketing
Research, 26, 222-229
Matzler, K., Krauter, S.G., & Bidmon, S. (2008). Risk aversion and brand loyalty: the
mediating role of brand trust and brand affect. Journal of Product & Brand Management,
17, 154-162.
Molm, L.D., Takahashi, N. & Peterson, G. (2000). Risk and trust in social exchange: an
experimental test of a classical proposition. The American Journal of Sociology, 105,
1396-1427.
129
Morgan, R.M. and Hunt, S. (1994). The commitment-trust theory of relationship
marketing. Journal of Marketing, 58, 20-38.
Zboja, J.J. and Voorhees, C.M. (2006). The impact of brand trust and satisfaction on
retailer repurchase intentions. Journal of Services Marketing, 20, 381– 390.
130
The relationship between the antecedents of luxury consumption
and the attitude towards luxury consumption among the young
Indian luxury buyers
Nikita Sharda1, Anil K. Bhat1, P.K. Sinha2
1
3
BITS-Pilani, Vidyavihar, Pilani, Jhunjhunu, Rajasthan (India) 333031
Indian Institute of Management, Ahmedabad, Vastrapur, Gujrat (India) 380015
E-mail: nikita.sharda@pilani.bits-pilani.ac.in / anilkbhat@pilani.bits-pilani.ac.in/
pksinha@iimahd.ernet.in
Introduction:
The luxury market heavily depends upon emerging markets as a backup during a shortfall in
mature market. The drivers of growth of luxury are- growing number of High Net worth
Individuals, rising tourism, disposable income, increasing brand awareness among the youth.
It is expected that the increasing GDP give rise to higher number of HNWIs present in a
country and increased travel and tourism supports the growth of luxury market
(BernsteinResearch, 2013).
The number of HNI households are expected to triple to over 329,000 in the next five years
(Kotak Wealth Management and Crisil Research, 2013). The total number of these
households and their total net worth is expected to increase by five times from 65 trillion to
318 trillion (BusinessWorld, 2013). “Irrespective of the continued global economic
slowdown, the luxury market in India is pegged to grow at 25% in 2013 till 2015 and likely
to touch US$ 15 billion from the current level of US$ 8 billion” (ASSOCHAM, 2014). Thus,
the Indian luxury consumer landscape is experiencing a change in terms of consumer profile
and the way the luxury players are operating in the market.
The proposed model of Indian luxury consumption is tested with respect to the moderating
effects of luxury value perceptual dimensions (viz. financial, functional, individual, and
social). These luxury value perceptual dimensions are the perceived value of products or
131
brands that which can ultimately guide the evaluation or the behaviour of the consumers
towards luxury (Wiedmann, Hennigs, & Siebels, 2007).
The results confirm that different luxury perceptual dimensions yield different outcomes. The
study forwards an understanding of the two contrasting consumer segments in the Indian
luxury market.
Research Gap and Research Problem:
The Indian luxury consumer landscape is experiencing a change in terms of consumer profile
and the way the luxury players are operating in the market. Although the enormous potential
of Indian luxury market has begun to grab the attention of marketing researchers and
practitioners, there is a dearth of literature in understanding the underlying factors leading to
luxury consumption in India. Moreover, the past studies have not sufficiently explored the
key influences that affect the Indian consumers’ attitude and intentions toward luxury
consumption.
The present research intends to fill these gaps by identifying and understanding the
relationship between the antecedents of luxury consumption and attitude towards luxury
consumption among the young Indian luxury buyers in the sector of luxury
apparel/accessories and watches/jewellery.
Objective of the study:
The objective of this study is to assess the moderating effect of the luxury value perceptual
dimensions on the relationship between the antecedents of luxury consumption and attitude
towards luxury consumption in India. The figure 1 below represents the proposed model of
the study:
Figure 1: The proposed model
132
The above model posits that the brand consciousness, materialism, need for uniqueness,
vanity, social comparison, conformity and status orientation are the antecedents of luxury
consumption leading to the attitude towards luxury. In this study, we propose that the
dimensions of luxury value perceptions are moderating the relationship between the
antecedents of luxury consumption and the attitude towards luxury consumption.
Following are the dimensions of luxury value perceptions (Wiedmann et al., 2007)
a. Financial dimension of luxury value perception
b. Functional dimension of luxury value perception
c. Individual dimension of luxury value perception
d. Social dimension of luxury value perception
Research methodology:
To collect the primary data through self-administered, closed ended, structured questionnaire.
The sample population mainly comprises the respondents within the age group of 25-34. The
sample population has 52% female and 48% male.
An initial set of questionnaire was developed and a pilot study was conducted. Using Factor
Analysis on a sample of 550 responses of the scale items, we have developed a valid
questionnaire for Indian luxury consumers.
In order to test the relationship, a composite score for all the constructs were calculated by
averaging the scale items. Split sample testing was carried out to test the relationship between
the antecedents and the attitude towards luxury consumption.
Data analysis and Results:
Split sample: Based on luxury perceptual dimensions
The sample was split into two parts based on luxury perceptual dimensions. Respondents who
skewly agreed or strongly agreed on how they perceived luxury on a particular dimension
were classified from those who skewly disagreed or strongly disagreed.
Sub group regression analysis: With luxury perceptual dimensions as control variables
The regression analysis was carried out for both the groups taking financial, functional,
individual and social dimensions as control variables.
133
The financial dimension strengthened the relationship between the antecedents and the
attitude R Square= 0.545 (p<0.01) in the group where respondents disagreed that the luxury
brands are highly priced.
The individual dimension strengthened the relationship between the antecedents and the
attitude significantly R Square= 0.124 (p<0.05) in the group where the respondents agreed
that the luxury brands are beautiful, provides pleasure and provokes desire.
Only the effect of financial and individual dimensions was significant in predicting the
relationship between the antecedents and the attitude towards luxury consumption.
The results confirm that different luxury perceptual dimensions yield different outcomes.
When we investigate the relationship between the antecedents and the attitude towards luxury
consumption moderated by price, we see that there is a strong relationship between them. The
antecedents in the study explain 55% of the variance in attitude when it was moderated by
price. Among all the independent variables, the need for uniqueness alone explains 27% of
the variance in the attitude. The results show that perceptual price of a luxury brand acts as an
important moderating variable while buying luxury brands.
Many studies have identified price as a key factor for understanding luxury consumer
behaviour (Goldsmith, Flynn, & Kim, 2010). With the increasing disposable income,
consumers buy more status-laden products often known as the Veblen effect (Veblen, 1899).
In this group, the young and wealthy Indian cosmopolitans are not necessarily bothered about
the price. They are willing to pay high prices to acquire and display the material possession in
order to establish a distinctive personal image. The impetus for buying luxury brands is to
distinguish themselves from the others (Tepper, Bearden, & Hunter, 2001). In the literature,
this desire to possess unique products is referred to as the snob effect (Leibenstein, 1950).
However, price was not an important moderating variable in explaining the relationship in the
other group. Taking individual perceptual dimension as a moderating variable, the
antecedents explained 12% of the variance in the attitude towards luxury consumption.
Among all the independent variables, brand consciousness, conformity and status orientation
explains 10% of the variance in the attitude. The motivation is the possession of a luxury
brand that they think others will approve of. This segment exhibits the behaviour of
conformists. They are conscious about the brands because they use these well-known and
expensive luxury brands as a vehicle to confer status and success to their environment.
134
Typically, if they want to be like someone, they will purchase the same brand showcasing the
bandwagon effect (Leibenstein, 1950). Thus, we can perhaps say that the Indian luxury
market embraces snobs as well bandwagoners.
Implications of the Study:
The study forwards an understanding of the two contrasting consumer segments in the Indian
luxury market. This research has important implications, as the marketers cannot assume
homogeneity among the luxury consumers in the diverse and immature Indian luxury market.
For the customer segment who is seeking uniqueness, the luxury brand managers can devise
marketing strategies that tends to enhance their distinctiveness. As this segment departs from
being similar to the majority, the challenging task will be to maintain the perceived rarity of
their brands even when the demand will soar with time. This however, is an implied strategy
for all the luxury brand managers but a special attention has to be paid because once the
product is diffused among the aspirers, it will lose its value for this segment.
Similarly, for the segment where the consumers are brand conscious, status oriented and
conformists, the marketers must highlight the popularity of the status-laden products. This
segment chooses to buy brands that are most advertised as they look for an association with
the majority by consuming popular luxury brands. The luxury marketers can be skilful in
projecting the ability of the luxury brand to help these consumers to identify with the rich.
Thus, consumers can have different motivations for consuming the same luxury brand but
understanding these differences in the perceptions of luxury among consumers can help the
marketers to design the marketing activities for each segment.
So far, the studies have only taken demographic variables like age, gender, education,
occupation etc as control variables in understanding the consumer behaviour. The novelty of
this study lies in the complex investigation of the Indian luxury consumer behaviour, as this
is the first study that has attempted to understand the relationship between the antecedents
and the attitude towards luxury consumption by controlling the dimensions of luxury value
perceptions.
135
References:
ASSOCHAM. (2014). Luxury market in India may touch US$ 15 billion in next two years.
http://www.assocham.org/prels/shownews-archive.php?id=3887. Accessed 1 April 2015
BernsteinResearch. (2013). The Luxury Sector Will Continue to Sparkle and Shine.
BusinessWorld. 2013. THE MARKETING WHITEBOOK 2013-2014. India
Goldsmith, R. E., Flynn, L. R., & Kim, D. (2010). Status Consumption and Price Sensitivity.
The Journal of Marketing Theory and Practice, 18(4), 323–338.
http://doi.org/10.2753/MTP1069-6679180402
Kotak Wealth Management and Crisil Research. (2013). Top Of The Pyramid India:
Decoding the ultra HNI. http://www.crisil.com/Crisil/research/research-report-uhni2013.html. Accessed 31 March 2014
Leibenstein, H. (1950). Bandwagon , Snob , and Veblen Effects in the Theory of Consumers ’
Demand. The Quarterly Journal of Economics, 64(2), 183–207.
Ortelli, M. D'Ath, S. 2013. Black Book-The Luxury Sector Will Continue to Sparkle and
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Wiedmann, K., Hennigs, N., & Siebels, A. (2007). Measuring Consumers ’ Luxury Value
Perception : A Cross-Cultural Framework. Academy of Marketing Science Review,
2007(7), 1–21. http://doi.org/10.1111/j.1470-6431.2007.00596.x
136
Title: A study of the factors influencing the consumer perception
towards choice of the Mall
Ms. Pooja Tiwari1, Dr. Mohit Kumar Jindal2, Dr. R K Singhal2
1
2
Gautam Buddha University
Department of Management, ABES EC, Ghaziabad
Email: pooja2017@gmail.com / mohit.jindal@abes.ac.in / hodmba@abes.ac.in
Introduction:
In the present context of competitive era the concept of retail sector is flourishing and it is
contributing towards Indian economy. The emergence of mall has an important impact on the
psychology of the consumer and has led to change in the lifestyle of the people. Last few decades
have witnessed the significant and accelerated growth in the retail sector and it is expected that
this trend will continue for the next two to three decades. This accelerated growth has attracted
the huge amount of customers and it is likely to do so in future as well. According to FICCI,
“India's retail market is expected to grow at 7% over the next 5 years, reaching a size of US$ 850
billion by 2020 and the Indian retail sector accounts for 22 per cent of the country's gross
domestic product (GDP) and contributes to 8 per cent of the total employment”. The numbers of
shopping malls in NCR has increased over the recent years, as well as the turnover of the mall
has also improved, it signifies that customers are attracted to the offer that shopping malls are
providing. Aspects like indoor shopping as well as outdoor shopping mall like Opulent, where
the design of the shopping mall is under an open roof, has created the need of several various
stores gathered in one place and could be what drives customers to visit shopping malls. The
total retail spending is estimated to double in the next five years. There are many factors which
have changed the psychology of the customer and people have moved from the traditional
shopping style towards modern shopping style i.e shopping under one roof. The assortment of
services and products, spatial ambience and amusement facilities target the „shopper-tourist‟
(Robertson, 1995). Shopping malls have become a part of a contemporary consumer shopping
137
culture (Van Eden, 2006) where the diverse shopping behavioral needs are addressed (Ahmed et
al., 2007). Malls presage more than stores and selling (Gottdiener, 1995) and promote a different
lifestyle and buying phenomenon. This has increased the curiosity of the authors to understand
the various factors influencing the decisions for choice of mall to visit and in turn its impact on
the footwall in the mall. To attract more customer‟s shopping malls have taken initiative and now
they are also offering other sources of entertainment such as theatre, movies, fitness, spa etc.
Research Gap and Research Problem:
Many researches has been conducted in the retail sector regarding the mall to judge the consumer
buying behavior and the various factor influencing the shopping behavior of Mall consumer. In
addition various studies have discussed regarding diverse shopping need (Ahmed et al., 2007),
assortment of services and products (Robertson, 1995), gender and social shopping behavior
(Arpita, 2011) but still the factors affecting the choice of mall is unexplored. But the authors
wanted to investigate that how the different factors like variety, brand visibility, store staff,
security also impact the preference of the customer. So the research question is to understand the
impact of different factors such as security, store staff etc influence the preference of the
customer in selecting the mall.
Objective of the study:
The main purpose of this paper is to understand the various factors influencing the people choice
that determines the selection of mall. The purpose of this paper is to get an understanding of
what drives customers towards shopping malls. Gershman (1988) states that malls are attractive
locations which facilitate social interactions and entertainment. The fascination towards malls is
driven by convenience, entertainment, and assortment. It was really motivating for the authors to
explore that how the concept of shopping mall has built an image in the mind of the customer
and which is providing the space to other brands which has already created the brand.
Research Methodology:
To conduct the study quantitative study has been conducted. Data has been collected by the help
of structured questionnaire and 200 individuals were considered as target respondents and
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expressed their perception regarding the same. The questionnaire has been given to the 200
people but only 173 people have expressed their views regarding. So the survey response rate
was 74%. Among 173 responses only 148 respondents have completely filled the form and other
responses were either incomplete or missing. Reliability and validity of the questionnaire has
been checked and the value of chronbach alpha is 0.78. It has been hypothesized that there are
different factors which are influencing the consumer perception and which in turn influences the
choice of the Mall.
Data Analysis and results:
Data has been analyzed by factor analysis to identify various factors influencing the consumer
decision to select the mall. There are various factors which have been identified by the factor
analysis. Four major factors has been identified which determines the people choice of mall.
Ambience & security is the most important factors having a variance of 19.5, then Brands have
variance of 13.5, customer & services offered have variance of 13 and the last factor is staff
behavior having a variance of 9.043. After factor analysis, reliability test of factors has been
conducted and based on which two factors were considered important; these factors are
ambience & security having a reliability of .675 and availability of brands having a reliability of
.604. The ambience and security includes variety of outlets, display of stores, washrooms,
cleanliness, security in the mall and Brand includes visibility and availability of Brand
Implication of the study:
To understand the factors impacting customer preference and choice of mall is determined by
many factors, so it becomes imperative for the malls to explore and understand the various
factors that is preferred by customer and it is equally important for the different brand to enter
into mall that customer prefer in the mall and that influence his buying behavior. So this study
will be quite useful for the malls that will help them understand the different factors through
which
they
can
increase
the
footfall
ration
in
the
shopping
mall.
Limitations and Future Research: This is research is related to Ghaziabad so the findings of this
study cannot be generalized hence, the same study can be replicated with larger sample size and
139
in different area. Furthermore, future research can be conducted to understand each factor in
detail and more related factors in the same area.
References
Ala'Eddin Mohammad Khalaf Ahmad (2012). Attractiveness Factors Influencing Shoppers‟
Satisfaction, Loyalty, and Word of Mouth: An Empirical Investigation of Saudi Arabia
Shopping Malls. International Journal of Business Administration Vol. 3, No. 6; 2012,
http://dx.doi.org/10.5430/ijba.v3n6p101
ArpitaKhare (2011). Mall shopping behaviour of Indian small town consumers. Journal of
Retailing and Consumer Services 18 (2011) 110–118, www.elsevier.com/locate/jretconser
Charles Dennis, John Murphy, David Marsland, Tony Cockett and Tara Patel (2012). Measuring
Brand Image: Shopping Centre Case Studies. International Review of Retail, Distribution and
Consumer Research (2002) 12 (4): 353-373
Dr. Anil Kumar Singh, Satish Kumar Singh, PratyushTripathi (2012). Consumer Buying
Behavior and Brand Perception in Shopping Malls- a study of DB City Mall, Bhopal. Current
Trends in Technology and Science, ISSN: 2279-0535. Volume: 2, Issue: 2
KekhrietshunuoKire (2014). Understanding Consumer Behaviour towards Shopping Malls in
Chennai. Eduved International Journal of Interdisciplinary Research. ISSN 2348-6775
(Online)
P. LalithaPraveena (2015). A Study On Consumer Buying Behaviour Factors In Shopping Malls
In Hyderabad City. International journal of engineering and management science I.J.E.M.S.,
VOL.6 (4) 2015: 211 - 214 ISSN 2229-600X
Rasa Gudonaviciene, Sonata Alijosiene (2013). Influence Of Shopping Centre Image Attributes
On Customer Choices, Economics And Management: 2013. 18 (3) ISSN 2029-9338,
http://dx.doi.org/10.5755/j01.em.18.3.5132
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A Qualitative Enquiry of Consumer Empowerment with reference
to High Involvement Products
Ratan Kumar and Dr. Vibhava Srivastava
Management Development Institute (MDI) – Gurgaon.
Email id – fpm15ratan_k@mdi.ac.in
Introduction
Since last decade, a lot of research has been done about consumer empowerment (CE). From
2000 to 2016, there are 505 research papers which contain ‘consumer empowerment' or
‘customer empowerment' word in their title (Ref. Google Scholar). These studies were carried
out worldwide in different context, be in online buying, virtual communities, healthcare, organic
food consumption, responsible communities, families etc. to find out what are the enablers of
consumer empowerment (CE), what are its constituents and what are the outcomes of CE for
consumer, for the firm, for the society and for other stakeholders. However, none of these studies
have taken CE in a holistic integrated approach, taking enablers, constituents, and outcomes in
one context. This study is aimed at filling this research gap by establishing enablers, constituents
and outcomes of CE in high involvement products as these products require the consumer to be
knowledgeable, technologically skillful and have the ability to take an informed decision, means
the consumer is an empowered consumer (McGregor (2005).
Hjalager (2001) found that mandatory information declaration due to government's or institutions
rules or policies enables the consumer to empower themselves. In the online context, Midha and
Nemati (2004) stated that consumers feel empowered if they are given options and rights to
control the nature and content of data collected from them. Also, in such scenario, CE increases
the trust of consumers in the organization. In 2005, Sue Mcgregor conceptualized constituents of
CE as external factors (access to information & competition) and internal factors (knowledge,
confidence, assertiveness, and self-reliance). Pires et. al. (2006) found that Information and
141
communication technologies (ICT) enable consumers by enhancing quality and numbers of value
propositions offered by the companies, enhancing market knowledge of the customer, increased
ability to search and increased ability to get advantages of market offerings. The physical
environment of the store also acts as an enabler as it enhances the mood of the customer which
leads to a better appraisal of quality and increased stay which translates into increased spending
(Wright et. al. 2006). Working on the outcome of CE, Hunter and Garnefeld (2008) stated that
CE directly leads to satisfaction and indirectly influences satisfaction by increasing the
involvement of consumer. In another study, Fuchs et. al. (2010) found that empowerment leads
to increased psychological ownership which leads to increased sales.
Going further, Fuller et. al. (2010), in a large-scale empirical study found that Internet-based cocreation activities in new product development projects empower the customers. In another study
focused on outcomes of CE, Fuchs and Schreier (2011) established that increased empowerment
leads to increased customer orientation, better behavioral intentions (loyalty, word of mouth,
purchase intention) and increased favorable attitude towards the company. In a study in
responsible consumption communities (RCCs) context, Papaoikonomou and Alarcon (2015)
found freedom from market forces, information transparency and participation in decisionmaking and control of the processes, as the constituents of CE.
Recently in 2016, with an experimental study in virtual online activities, Yuksel et. al. found that
empowerment led to increased positive consumer responses towards online & offline activities
through psychological empowerment. Exploring the role of CE on marketing performance of the
firm, Ibrahim Bozaci (2016), in an empirical study in Furniture industry, found that CE
(measured by Information & Capabilities; autonomy; Complaints & cooperation; Participation)
has a positive impact on marketing performance. In a large-scale empirical study to develop a
scale to measure psychological aspects of CE, Prentice et. al. (2016) found that customer
psychological empowerment is a second-order factor model, with three sub-dimensions: service
choice; information attainment and impact.
Overall, these studies found that consumer empowerment is enabled by self, firm, political and
social environment, market competitions and information & communication technologies (ICTs).
CE had a role in the increase in service innovation, better responsiveness to marketplace
142
changes, increased consumer spending, increased consumer loyalty & satisfaction and protection
of rights of consumers.
Research Gap and Research Problem:
In past, researchers have studied enablers, outcomes, and constituents of CE separately in
different contexts. There is no study which had researched CE from holistic perspective taking
an integrated approach i.e. there is no empirical study which has researched the enablers,
determinants and outcomes together in one context. So, there is a need to study integrated view
of CE, to find its enablers, determinants, and outcomes in one context.
Purchase of high involvement goods requires a complex and informed decision making. So,
consumers of these products have to be knowledgeable (knowledge of the product, competitors
etc.), technologically skillful (know the use of product technology) and have the ability to take
informed decisions (Vincent Cho, 2010), means there is some level of empowerment of
customers has happened before or during purchase of high involvement products. So, a study of
customers of high involvement products will help to establish an integrated view of CE, with its
enablers, constituents, and outcomes.
Objective of the Study:
To determine the enablers, determinants & outcomes of Consumer Empowerment and to
establish an Integrated model of Consumer Empowerment in the context of high involvement
products.
Research Methodology:
As the study is exploratory in nature, so the qualitative approach has been taken. 14 semistructured in-depth interviews have been conducted. The average duration of each interview is 35
minutes. Participants were, students, govt. employees and housewives; all customers of high
involvement products. Sampling was convenient and purposive. Analysis has been done using
Axial coding, Content Analysis (Patton 1995), and Constant Comparative Method (Lincoln and
Guba, 1985) to arrive at the themes to find enablers, constituents, and outcomes of CE in high
involvement category products.
143
Data Analysis and Results:
Our study has reconfirmed some of earlier findings of studies in CE and also has found some
new constructs which acts as enablers, determinants and impacts of CE. Study finds that Self;
Market Place; ICT; Peer group; Physical Settings/Environment; Purchase process; the Brand and
the organization as the major enablers. Determinants are knowledge; self-esteem;
skills/capabilities; freedom; purchasing power. Outcomes of CE are Informed decision making;
Customer Satisfaction; Customer Loyalty; Improved Negotiation; Increased Trust in
organization; Balance of Power relationship and Customer recognition. Study has found
‘Purchase process and the Brand' as new enablers; ‘purchasing power' as new determinants and
‘Negotiation, Balance of power relationship and Customer recognition' as the new constructs.
Implications of the Study:
This is the first study which provides a holistic view of consumer empowerment. New
constructs: ‘Purchase process and the Brand' as new enablers; ‘purchasing power' as new
determinants and ‘Negotiation, Balance of power relationship and Customer recognition' as the
new impacts of CE, will enrich the existing consumer empowerment literature. Also, it will
encourage researchers to find the further relationships and linkages between different constructs
of enablers, determinants, and outcomes of consumer empowerment. This study will help
managers to understand what are the major enablers and outcomes of consumer empowerment,
especially in high involvement product categories. It will also help them to understand what the
employees and the organizations need to do to empower their customers to take informed
purchase decisions which will finally benefits to all stakeholders.
References:
Cho, V. (2010). The endorser's persuasiveness on the purchase intention of high-involvement
products: a comparison between a newly launched product and a mature one. Journal of Global
Marketing, 23(3), 226-242.
Conger, J. A., & Kanungo, R. N. (1988). The empowerment process: Integrating theory and
practice. Academy of management review, 13(3), 471-482.
144
Fuchs, C., Prandelli, E., & Schreier, M. (2010). The psychological effects of empowerment
strategies on consumers' product demand. Journal of Marketing,74(1), 65-79.
Fuller, J., MüHlbacher, H., Matzler, K., & Jawecki, G. (2009). Consumer empowerment through
internet-based co-creation. Journal of Management Information Systems, 26(3), 71-102.
McGregor, S. (2005). Sustainable consumer empowerment through critical consumer education:
A typology of consumer education approaches. International Journal of Consumer
Studies, 29(5), 437-447.
Pires, G. D., Stanton, J., & Rita, P. (2006). The internet, consumer empowerment and marketing
strategies. European Journal of Marketing, 40(9/10), 936-949.
Prentice, C., Han, X. Y., & Li, Y. Q. (2016). Customer Empowerment to Co-Create Service
Designs and Delivery: Scale Development and Validation. Services Marketing Quarterly, 37(1),
36-51.
Tiu
Wright,
L.,
Newman,
A.,
&
Dennis,
C.
(2006).
Enhancing
consumer
empowerment. European Journal of Marketing, 40(9/10), 925-935.
Yuksel, M., Milne, G. R., & Miller, E. G. (2016). Social media as complementary consumption:
the relationship between consumer empowerment and social interactions in experiential and
informative contexts. Journal of Consumer Marketing, 33(2), 111-123.
Wathieu, L., Brenner, L., Carmon, Z., Chattopadhyay, A., Wertenbroch, K., Drolet, A., & Wu,
G. (2002). Consumer control and empowerment: A primer. Marketing Letters, 13(3), 297-305.
145
Emerging Market for Organic Food Products:
Role of Trust and Fear in Buying
Heerah Jose1, Vijay Kuriakose1, Moli P. Koshy1
1
School of Management Studies, CUSAT, Thrikkakara, South Kalamaserry, Kochi-682022,
E-mail: heerahjose@yahoo.co.in / vijaythuruthel@gmail.com / mollypkoshy@cusat.ac.in
Introduction:
Organic food products are those which avoid or largely exclude the use of synthetically
compounded fertilisers, pesticides, growth regulators and livestock feed additions at the time of
production (Lampkin, 1990). Producer‟s gluttony for increasing sales has brought in pesticide
residue in food products, adulteration, unhygienic food manufacturing conditions etc. In 2009,
National centre for Disease Control, reported that 51% of food commodities in India are
contaminated with pesticide residues (Srivastava, 2009). Further, in 2014, Council for Food
Research and Development reported that 10 out of 44 vegetables found in Kerala contains
organo chloro residue. These reports on the growing amount of food contamination create a fear
among the consumers to buy conventional food products. Thus the market for organic food
products started to grow in India and around the world. However, many researchers have stated
that lack of trust on the claims made by the products act as a barrier for an individual to buy
organic food products (Krystallis & Chryssohoidis, 2005).
Even though few organic producers have the true intention of preserving the environment and
feeding the individual with goodness of nature, consumers previous experience with the food
scandals make them skeptic. Hence, it is time to replace the age old marketing strategies like
mass production and market segmentation with „relationship marketing‟ where the relationship
between the customer and retailer is intensified (Nwakanma, Jackson & Burkhalter, 2007). For
the fulfillment of this strategy, trust is a key ingredient.
According to “India Organic Food Market Forecast & Opportunities, 2019” India‟s revenue
from organic market is expected to grow at a Compound Annual Growth Rate (CAGR) of
146
around 25% during 2014-19. Even though India has the largest number of organic producers in
the world, the total certified production is 29.50 lakh tons, out of this 99,000 tons (3.36%) is
been exported and domestic sale amounts to 3.0 lakh tons (10%) and the rest is sold as
conventional products (Yadav, 2013). Thus making the domestic retail sale of organic confined
to .13 billion euros whereas the largest market for organic food products is in United States
(27.1billion euros), Germany (7.9 billion euros), and France (4.8 billion euros). Thereby, the
global retail sales of organic food products have reached 80 billion US dollars in 2014 (Willer &
Lernoud, 2016). Thus India has the potential to tap this market by understanding and overcoming
the consumers fear.
Research Gap and Research Problem:
Even though there is a high amount of fear among the consumers regarding the pesticide residue
in food products, the global share of organic food products compared to total food sale is just 1%
in most countries. This disparity is a matter of high concern. Thus, by undertaking this study
researcher tries to understand the percentage of influence which the fear and trust can exert on an
individual‟s intention to buy organic food products.
Objectives of the study:
From the literature above the researcher tries to fulfill the following objectives:
1. To study the importance of fear in motivating an individual to buy organic food products.
2. To analyse the impact of trust on the buying intention of consumers.
Research methodology:
Data Collection and Samples
The Survey was conducted in Ernakulam district, Kerala. Data were collected through
structured questionnaire administered via offline and online. Samples were collected from
individuals above 20 years, who buys household items at exclusive organic shops, supermarkets
and also from other convenient stores. Thus samples are a mix of consumers who buy organic
food products and also who are interested in it. A total of 275 valid responses were used for this
study. The data was collected during the period of May 2016 and August 2016.
147
Measures
The scales of three constructs used in this study are adapted from existing validated scales. Fear
is measured using a six- item scale adapted from Scarpa & Thiene, 2011, to access the degree of
threat which motivates individual to buy organic food products. The moderating variable trust is
measured with a three-item scale adaped from Krystallis & Chryssohoidis, 2005. Finally, the out
come varibale intention is measure using a three item scale adapted from Ajzen (2002). All these
scales were measured using a seven-point likert agreement scale.
Data analysis and results:
In order to fulfill the objective of the study, data was analyzed by means of structural equation
model (PLS). Before conducting any analysis, reliability of scales used in this study was tested
and the scales were found to meet the general reliability criterion which is greater than
0.7(Cronbach, 1951). Findings of this result suggest that fear has a vital role to play in
motivating an individual to buy organic food products. However, people who are fearful are also
skeptic on the claims made by the organic producers, thereby moderating the direct relation
between fear and intention to purchase, i.e. when consumers are able to trust the logo/certificates
and claims made by the producers their intention to purchase increased and when trust decreases,
even though they are fearful towards conventional food products, they will be hesitant to buy
organic food products.
Implications of the Study:
Market for organic food products is emerging in India and around the world. With respect to
domestic and foreign market, India has a great potential to tap this market. However
understanding the concern of customers is utmost important. Though this study, it is certain that
there is a high amount of fear among the consumers with regard to conventional food products
which is motivating the consumers to have a positive intention towards organic food products. If
the marketers are able to tap this fear by eliminating the distrust factor, the market for organic
products can flourish in India.
148
References:
Ajzen, I. (2002).Constructing a TpB Questionnaire: Conceptual and Methodological
Considerations. http://www.people.umass.edu/aizen/pdf/tpb.measurement.pdf
Cronbach, L. (1951). “Coefficient alpha and the internal structure of tests. Psychometrika , 16
(3), 297-334.
Krystallis, A., & Chryssohoidis, G. (2005). Consumers‟ willingness to pay for organic food:
Factors that affect it and variation per organic product type. British Food Journal, 320-343.
Lampkin, N. (1990). Organic Farming. Farming Press Books, Ipswich, UK.
Nwakanma, H., Jackson, A.S., & Burkhalter, J. N. (2007). Relationship Marketing: An Important
Tool for Success in the Marketplace. Journal of Business & Economics Research, 5 (2).
Scarpa, R., & Thiene, M. (2011). Organic food choices and Protection Motivation Theory:
Addressing the psychological sources of heterogeneity. Food Quality and Preference, 532-541.
Srivastava, R. K. (2009). Food-Borne Diseases. New Delhi: National Centre for Disease Control.
Willer, H., & Lernoud, J. (2016). The World of Organic Agriculture. Statistics and Emerging
Trends 2016. Frick, Bonn: Research Institute of Organic Agriculture (FiBL) and IFOAM Organic International.
Yadav, A. K., 2013. Organic Policy and Developments in India. Banglore, International
Conference on Two-pronged Strategy for Organic Movement- for Sustainability and For
Markets.
149
Nutracueticals: Key to Healthy Living- Understanding Customer
Preference and their Profile
Dr. Richa Chaudhary, Pooja Kamthe, Abhinay Jain and Nikita Nirmal
IES Management College and Research Centre, Mumbai
Vishwakarma M D Lotlikar Vidya Sankul,
791, S K Marg, Bandra Reclamation, Mumbai 400050
Phone: 09920997877
E-mail: c.richa2012@gmail.com
Introduction:
Integrative healthcare is a new emerging paradigm of healthcare, which aims at prevention as
well as cure. To prevent disease in the first place and, when the need to treat the disease arises, to
start treatment by addressing the underlying cause(s) or origin(s) of the disease, not the disease
symptoms. At this intersection, we are discovering a new appreciation for nutrition
that s what
we put into our bodies (or fail to put into our bodies) on a routine basis, can have lasting effects
on health and wellness. Although many people think that food and nutrition mean the same
thing, they d“n t. F““d refers t“ the ”―ants and ani‖a―s we c“nsu‖e. These f““ds c“ntain the
energy and nutrients our body need to maintain life and support growth and health. Nutrition, in
contrast, is a science. Specifically, it is the science that studies food and how food nourishes our
bodies and influence our health.
Nutraceuticals are products that provide health and medicinal benefits, including the
prevention and treatment of diseases in addition to the basic nutritional value found in
foodstuff. Nutraceuticals are particularly of interest to the present generation because
they have the potential to substantially reduce the expensive, high-tech, disease treatment
approaches presently being employed in healthcare.
Currently, consumers are much more conscious and aware about health and many share
the perception that the onset of many chronic diseases can be prevented with the proper
intake of nutritious diet. Food supplements are not only being consumed for just meeting
the recommended dietary allowance but also as a mechanism for performance
150
enhancement and disease prevention.
In addition to the above-‖enti“ned changes, c“nsu‖ers ”reference has n“w underg“ne a
paradigm shift from synthetic ingredients toward natural and organic foods, beverages
and su””―e‖ents. Present day s c“nsu‖ers are ‖“re inf“r‖ed, and this c“u―d be
attributed to current day media, which keeps consumers abreast of the latest scientific
developments in health and wellness. Consumers are now moving towards food products
that are obtained from natural s“urces and d“n t have adverse effect “n their hea―th in
long run.
Although the term nutraceuticals are in vogue, there is no universally accepted definition
of the term. Broadly put, nutraceuticals can be defined as foods or food- derived
substances in extracted form, which claim to provide medicinal and health benefits. In
fact, the term is so broad that functional foods/beverages, dietary supplements, and any
other type of food that provides health benefits fit into the nutraceutical category.
However, the term becomes too broad and needs to be differentiated. Thus, for the
purpose of this study , the term nutraceutical is restricted to dietary supplements.
Research Gap and Research Problem:
Due to the changing lifestyle pattern, people have moved towards consumption of supplements
to prevent themselves from contracting to any major health issues. Seeing the potential in the
segment, the study aims at exploring the nutraceutical market, particularly the dietary
supplements segment, in Mumbai. It drives to get an insight of the demographic and the
psychographic profiles of people using dietary supplements, in some or the other form.
The study was undertaken in two phases; first phase of the study was exploratory in nature
wherein unstructured interviews, followed by focus group discussions were held to understand
151
the factors responsible to choose a dietary supplement. For the second phase of the research, a
self-structure questionnaire was designed and piloted.
The findings of the study aim at getting in depth insight about the real market of dietary
supplements by understanding the demographics and the lifestyle of the people consuming them.
Knowing your customer is the key to success today, without understanding your customers very
closely no business can be successful. Also it is imperative for any industry to constantly track
and monitor consumer trends and its products are often direct responses to such demand.
So this study will explore the consumers motivation and the reasons for the consumption of
dietary supplements and also burst myths which might be associated with the same. It will aid in
the development of right marketing strategies and provide new understanding about the subject
to pharmaceutical sector, various institutions and organizations.
Objectives of the study:
Considering the numerous health benefits dietary supplements offer, this research was targeted
towards understanding the reasons why people prefer dietary supplements- either due to present
ailments or future orientation. To achieve this, following objectives were adopted to give the
study a linear and an appropriate direction.
i.
To identify the demographic profile of people consuming dietary supplements.
ii.
To explore the perception of people towards dietary supplements in India.
iii.
To study the factors taken into consideration while choosing a dietary supplement.
iv.
To understand the psychographic profile consisting of lifestyle and consumption patterns
adopted.
Research Methodology:
At the outset, to develop the preliminary understanding of the research area, personal interviews
were conducted followed by focused group discussions targeting respondents of all the age
152
groups. At the second stage, self- structured questionnaire was designed and administered to
gather data on the various factors that motivate consumption of dietary supplements.
Stratified random sampling technique was used to identify the right set of respondents in the
sample studied. Questionnaire was rolled out among 350 respondents consuming dietary
supplements or have some experience of the same in past, in various parts of Mumbai.
Satisfactory response rate of 91.7 per cent was achieved, leaving 321 responses for the analysis.
The raw data was captured in a Microsoft excel database to ensure accuracy. The spreadsheet
was then imported into statistical software package (SPSS). Factor analysis was used to find out
important factors that motivate consumers to consume dietary supplements. Cr“nbach s A―”ha
reliability test to check the internal consistency of the statements designed. Cluster analysis was
used to identify clusters of similar types of lifestyles and to determine the one important aspect
of consumption of dietary supplements.
Also, One-way ANOVA was used to find the significant difference in the importance of choice
parameters for male and female customers consuming dietary supplements.
Data analysis and Results:
Out of a total of 321 individuals surveyed: 54 % were males and 46% females. A good 59.2 per
cent res”“ndents thin— that A dietary supplement is a product intended to add further nutritional
value to the existing diet . 33.3 ”er cent carry a ”erce”ti“n that Dietary su””―e‖ents cure
ailments faster than traditional home recipes. Whereas only 5 per cent think that dietary
supplements can replace nutritious food.
A principal components factor analysis with Varimax rotation was conducted to extract the
factors why consumers are moving towards the dietary supplement as the part of there changing
lifestyle. A total of 5 factors emerged and were named as follows: Future Well Being (FWB),
Revitalize (REV), Remedy (REM), Healthy eating (HEAT), and Preventive Approach (PRECH),
wherein future well being came out to be the strongest driver for opting driver supplements in
their daily diet.
153
Cluster analysis was applied to understand the psychographics of the consumers, it was found
that out of the 41 lifestyle parameters chosen for the study, 3 clusters were formed. Cluster 1
comprises of the people who are modern, liberated and free spirited yet very connected to their
roots. Cluster 2 comprises of the people who respect their rich culture and prefer trying out home
remedies before approaching doctors. It was found that the consumption of dietary supplements
to keep themselves fit was very prevalent among the respondents in Cluster 1 and Cluster 2
Cluster 3 formed, was of the kind of people who are traditional and have resistance for change.
This cluster comprises of people above the age of 50, who feel that they have lived their life and
believe in working hard towards achieving anything in life without focusing much on their health
and fitness.
Secondary and primary research both indicates that nutraceutical industry is ready to see a big
change. With increasing health awareness, shift towards preventative health care and increased
regu―at“ry c―arity, India s future in nutraceutica―s industry ―““—s ”r“‖ising, f“r b“th
manufacturers and consumers. Nutraceutical consumers are opting for natural nutraceutical
ingredients as they believe the bioavailability of these ingredients is higher, while the risk of side
effects is significantly lower.
While interviewing customers, it was found that understanding of health and fitness was very
different from individual to individual. Out of the five factors considered, FWB, REM, REV,
HEAT, PRECH, first two factors emerged as the most important ones.
Implications:
India is currently a nascent market for nutraceuticals, without a concrete business model in place.
With the increasing consciousness for healthy lifestyle, Indian consumers are attracting towards
hea―thier “”ti“ns in ter‖s “f what they eat and drin—. It s been f“und that f“r ‖a–“rity “f the
parameters like information contained on label, brand availability, quality of supplements,
reliability of supplements etc., males and females have different views except for parameters like
supplements have natural elements, form in which its available, expert/doctor recommendation,
where males and females have similar views.
154
Therefore the main task for Nutraceutical making companies is to build appreciation of the
benefits of this category and drive penetration amongst consumers. So the success of the
marketers is centered on making consumers aware of the category, clearly communicating the
benefits and driving trials through sampling, and the potential is huge.
References:
G―“ba― Nutraceutica― Industry: Investing in Hea―thy Living -Frost and Sullivan , FICCI
2016 Report.
Bhowmik, D., Gopinath, H., Kumar, B. P., Duraivel, S., & Kumar, K. S. (2013).
Nutraceutical A Bright Scope and Opportunity of Indian Healthcare Market. The
Pharma Innovation, 1(11).
http://trace.tennessee.edu/cgi/viewcontent.cgi?article=1873&context=utk_gradthes
http://www.assocham.org/newsdetail.php?id=5370
http://www.news-medical.net/health/What-are-Nutraceuticals.aspx
http://www.worldwidejournals.com/indian-journal-of-applied-research
https://en.wikipedia.org/wiki/Dietary_supplement
https://en.wikipedia.org/wiki/Nutraceutical#cite_note-fda1-10
https://ods.od.nih.gov/HealthInformation/DS_WhatYouNeedToKnow.aspx
https://www.techsciresearch.com/report/india-dietary-supplements-market-by-producttype-protein-supplements-vitamins-minerals-herbals-probiotic-others-forecastopportunities-2021/754.html
https://www.kpmg.com/ID/en/industry/CM/Documents/neutraceuticals-the-future-ofintelligent-food.pdf
PR Newswire, Aug12, 2016, www.prnewswire.com/news-releases/india-dietarysupplements-market-forecast--opportunities-2021-techsci-research-report589986211.html
155
Why do shoppers stop at Shoppers Stop? An analysis of influencers
Sharad Gupta and Anuj Pal Kapoor
Research Scholars, FMS, Delhi University, Delhi
Phone: +91 9910850111/ +91-9818004312
Email: sharadgupt@gmail.com / anuj.kapoor_phd@fms.edu
Introduction
Multi product retail chains have become almost like a norm of today’s shopping. Consumers
consider these retail chains for buying variety of product categories like apparels, home décor
products, handbags, cosmetics, jewelry, shoes, and many other accessories. There are
different Indian players like Shoppers Stop, Lifestyle, Westside, and Pantaloons operating in
this channel. With the entry of foreign players like Zara and H&M, this distribution channel
is getting good attention from the Indian metro consumer. Organized retail sector is growing
rapidly and consumers are shifting to shopping in organized retail stores. Shopping habits of
Indian customers are changing due to their growing disposable income, relative increase in
the younger population, and the change in attitudes towards shopping.
There are unlimited prospects in the Indian economy for high growth in the organized retail
sector. The Indian organized retail industry has the competence to grow with the rising
affluence of the Indian middle class due to their growing disposable income (CII- AT
Kearney, 2006). The last decade saw a great boom in the organized retail industry in India
which is attributed to the changing demographics, international brands foraying in India,
infrastructure developments, credit availability, usage of latest technology and a world class
shopping experience (Choudhary and Tripathi, 2012).
Research Gap and Research Problem
Shopping orientation intends to capture the shoppers' motivations, their desired shopping
experiences, and the goals they seek when they shop. Previous research also found that
shopping orientation influences consumer behaviors in terms of different preferences for
information sources, store choices, and store attributes (Gutman and Mills, 1982; Lumpkin,
1985; Shim and Kotsiopulos, 1993). Shopping orientation would be very useful to understand
ever-changing demands and demographic information of multi-channel shoppers due to
social, economic, and cultural changes in the modern society. The existing Indian players
have widened their operations to smaller cities with the burgeoning Indian middle class that is
156
demanding latest products in these cities. Understanding behavior of consumers in a multiproduct retail chain becomes still more interesting especially in the presence of online
channels and new entrants in the sector.
Objectives of the study
In this research, we analyzed the buying behavior of consumers of the leading multi-product
retail chain Shoppers Stop. We also analyzed factors that distinguish whether the consumer
will prefer Shoppers Stop over other multi-product retail chains. The objectives of this study
are as follows:
o Studying the shopping parameters/attributes adopted by consumers for selecting
Shopper's Stop.
o Study the engagement and loyalty levels of consumers towards Shopper's Stop.
o Identifying the factors making Shopper's Stop unique and popular amongst its customers.
o Studying the preferences of respondents in terms of products and brands.
Research methodology
We conducted a survey on the Buying Behavior of the consumers at Shoppers Stop. The
target audience was primarily college students and working professionals in and around
Delhi. Questionnaire included three sections focusing on demographic variables, how
consumers behave, and which out-of-store & in-store factors influence buying behavior of
consumers. We explored Shoppers Stop visitors and non-visitors’ opinions about the entire
products and services, their preferences over the competitors’ products, and their suggestions
to retail store for improving their satisfaction. Primary data was collected through a survey
conducted on students at the University of Delhi.
Data analysis and results
The questionnaire was sent to 150 respondents, out of which we received 120 responses
(Response Rate: 80%). Out of the 120 responses, 29 responses were not complete resulting in
91 valid and complete responses. Respondents included 51% females and 85% consumers of
Shoppers Stop. 70% of shoppers stop visitors (and 65% of non-visitors) were from 18-25
years age group. This was followed by 19% of visitors (and 14% of non-visitors) in 25-35
years age group. This data was further analyzed using relevant bivariate and multivariate
analysis techniques in excel and SPSS.
157
Results show that Family members accompany about 50% of visitors and also influence 50%
shoppers in final decision making. Friends are next most significant sets of people (with 2 out
of 5 visitors) accompanying shoppers in the store and influencing them in decision making (2
out of 5 shoppers). Thus, those accompanying shoppers have greater influence on their
decision making.
Irrespective of the age, females spent a considerable amount of time shopping as compared to
the male counter parts. These attributes were identified as important for respondents while
shopping at a retail store - Variety (60%), Quality (47%), Customer Satisfaction (45%), and
Offers & Promotions (43%). Shopper's Stop has variety of products for a particular brand but
does not have all major brands under its Umbrella. Brands like Zara, Jack and Jones, AND
etc. have their standalone shops which is the reason why most of the respondents had
mentioned Variety as one of the attributes, which Shopper's Stop lack.
Results show that a consumer mostly visits multi product retail chains for apparels and
accessories. The consumer visits Shoppers Stop due to three important factors - quality, instore promotions and brand name. Consumer still prefers to buy in a physical store over
online stores. Customer purchase behavior changes positively with price of the product and
availability of products. Consumer purchase behavior changes negatively due to poor quality
of products.
Implications of the Study
Results have important implications for marketers especially in metro cities, to design their
stores and product offerings. The study provides important insights about the consumer
preferences towards offline retail brand specially Shopper's Stop. The study indicates that
offline retailing is still a preferred choice as compared to online retail and people still prefer
to buy products at physical stores rather than purchasing online. Shopper's Stop is a
prominent retail chains which is favored by consumers in different age groups especially the
college going students. Shopper's Stop should focus on bringing more variety in their
apparels section by adding a few more famous brands like Jack and Jones, AND, and Zara, if
possible. Banerjee & Saha (2012) also corroborate that apparel section in particular has great
opportunity of growth in Indian organized retail industry. Shoppers Stop has been able to
sustain its business due to their Omni-channel presence and variety in products. Future
studies can focus on comparing consumer behavior and shopping experience of multi-product
retail chain with online multi-product store.
158
References
1. CII- AT Kearney (2006), Retailing in India: Getting organized to drive growth
Retrieved September 15, 2011 from A T Kearney https://www.atkearney.com/
consumer-products-retail/ideas-insights/featured-article//asset_publisher/KQNW4F0xInID/content/retail-in-india-getting-organized-to-drivegrowth/10192.
2. Choudhary H., Tripathi G. (2012), An Analysis of Inventory Turnover and its Impact
on Financial Performance in Indian Organized Retail Industry. Journal of Services
Research, Vol. 12 (1), pp. 43-64.
3. Gutman, H. and Mills, M.K. (1982), "Fashion life style, self-concept, shopping
orientation and store patronage: an integrative analysis", Journal of Retailing, Vol.
58(2), pp. 63-86.
4. Lumpkin, J.R. (1985), "Shopping orientations segmentations of the elderly
consumer", Journal of the Academy of Marketing Sciences, Vol. 13, pp. 271-89.
5. Shim, S. and Kotsiopulos, A. (1993), "A typology of apparel shopping orientations
segments among female consumers", Clothing Textile Research Journal, Vol. 12(1),
pp. 73-85.
159
Social Media and its Impact on Consumers Buying Behavior with
special reference to apparel Industry in Bareilly region"
Swati Gupta1 and Ajay Chauhan2
1
Research Scholar, Ansal University, Gurgaon
Phone: 9997856040
Email-id- proffswati@gmail.com / ajay77chauhan@gmail.com
2
Assistant Professor, IMT Ghaziabad
Introduction
The growth of internet is as rapid and pervasive as any technological breakthrough in the last
century. Internet is becoming a part of more and more Indian lives across the spectrum of online
activities. Social media is a phenomenon that has drawn a lot of attention both to companies and
networking landscape . Social media has increasingly become a constant in our lives.
Social media is defined as ―a second generation of Web development and design, that aims to
facilitate communication, secures information sharing, interoperability, and collaboration on the
World Wide Web (Paris, Lee, & Seery, 2010, p. 531). The term Social media refers to the
collection of technologies that capture communication, content, and so on across individuals,
their friends and their social networks. Example of social media include social networking sites
like Facebook and Twitter, blogging technologies like typepad and word press, crowd sourcing
products like Wikipedia, photo and video sharing like Flickr and Youtube and others. These
technologies help users easily create content on the internet and share it with others. Social
media is the infrastructure that helps users become publishers of content that is interesting to
them and their friends (Chris Treadway and Mari Smith, Facebook Marketing).
Social Media, today, is among the „best opportunities available‟ to a brand for connecting with
prospective consumers. Social media is the medium to socialize. These new media win the trust
of consumers by connecting with them at a deeper level. Social media marketing is the new
mantra for several brands since early years. Marketers are taking note of many different social
media opportunities and beginning to implement new social initiatives at a higher rate than ever
before.
160
Research Gap and Research Problem
The article titled, “Expand your Brand Community Online” states that social media is important
for marketers because it allows them to dialogue directly with consumers, which in turn engages
consumers directly with company brands (Hanlon, Patrick, Hawkins, & Josh, 2008). Many
companies, such as Audi and Dunkin‟ Donuts have used social media very effectively to reach
consumers. According to Wasserman (2011), out of all other brands on Facebook, Audi‟s fans
are the most engaged of all major corporate brands on Facebook. The study conducted on the
influence of brand equity on consumer responses(Martı´nez Eva and Buil Isabel et al.,2013).The
study found that Results indicate that brand equity dimensions inter-relate. Brand awareness
positively impacts perceived quality and brand associations. Brand loyalty is mainly influenced
by brand associations
The study done by (Wirtz Jochen et al., 2013) provides a synthesis of the extant online brand
communities (OBC) literature to further our understanding of OBCs, and also puts forth future
priorities for OBC research. The findings of study found that a conceptual framework is provided
that extends our understanding of online brand communities and consumer engagement. Four
key of online brand communities (OBC) dimensions (brand orientation, internet-use, funding and
governance) are identified and three antecedents (brand-related, social and functional) are
proposed of consumer-OBC engagement.
Though number of research has been conducted use of social media for advertisement and
promotion, none of the research so far has talked about the consumer buying behaviour in
reference to apparel industry on social media in the Indian context. Hence the research gap exists
here.
Objectives of the study
The main objective of the research is to analyze the customer buying behavior towards brand
promotions of products through social media networking sites.
161
Research methodology:
The research design of the research study is Empirical study
The Sampling Design will be Simple Random and Convenience Sampling
The Sample Size will be 100
The research study includes the people having their accounts on social media networking sites in
Bareilly region . Primary as well as secondary data will be collected.
Data analysis and results: The study will be done on the basis of responses collected from the
target audience. The primary data will be analyse using factor analysis & confirmatory data
analysis for result and influences. All the data will be used thorough SPSS for analysis
Implications of the Study: Internet is a new medium to sell the products, there are different
demands of the consumer; therefore, it is crucial for online-retailers to know that what factors
influence the purchase decision of a consumer. The study will help to understand the behaviour
of customer towards social media .
References
1. A Annie Jin-Seung (2011) The potential of social media for luxury brand management,
Marketing Intelligence & Planning Vol.30,No.7 Pg no.687-699
2. Alwi Sharifah and Ismail Azwan Shahril(2013) A framework to attain brand promise in an
online setting, Marketing Intelligence & Planning , Vol. 31 No. 5, pp. 557
3. Assaad Waad and Gómez Jorge Marx (2011) Social Network in marketing Opportunities
and Risks, International Journal of Managing Public Sector Information and
Communication Technologies (IJMPICT) Vol. 2, No. 1
4. Astous Alain d and Gargouri Ezzedine(2001) conducted the study on Consumer evaluations
of brand imitations, European Journal of Marketing,Vol. 35 No. 1/2, pp. 153-167.
5. Bajpai V, Pandey S and Shriwas S(2012) Social media marketing: strategies & its impact,
International Journal of Social Science & Interdisciplinary Research,Vol.1 Issue 7, ISSN
2277 3630
6. Ballester Elena Delgado and Espallardo Miguel Herna´ndez(2008) Building online brands
through brand alliances in internet , European Journal of Marketing ,Vol. 42 No. 9/10, pp.
954-976
162
7. Barreda Albert et al.(2013) conducted the study on Developing a brand structure pyramid
model for travel-related online social networks, Tourism Review Vol. 68 No. 4 2013, pp.
49-70, ISSN 1660-5373
8. Bolotaeva V and Cata T (2011) Marketing Opportunities with Social Networks, Journal of
Internet Social Networking and Virtual Communities, Vol. 2011 (2011), Article ID 409860,
8 pages
9. Bruhn M. Schoenmueller V and Schafer D (2012). Are social media replacing traditional
media in terms of brand equity creation? Management Research Review Vol.35, No.9, 2012
10. Davis Robert,Piven Inna and Breazeale M. (2014) Conceptualizing the brand in social
media community: The five sources model , Journal of retailing and consumer services
21,Pg no.468-481
11. Dou W and Krishnamurthy S2007) Using brand websites to build brands online: a product
versus service brand comparison, Journal of Advertising Research, pp.193-207
12. Edosomwan S. et al. (2011) The history of social media and its impact on business, Journal
of applied management and entrepreneurship, Vol.16, No. 3
163
‘What is beautiful is good':
Impact of Celebrity Attractiveness on Advertising Effectiveness
Tijo Thomas and Dr.Johney Johnson
School of Management and Business Studies
Mahatma Gandhi University, Priyadarsini Hills P.O, Kottayam, Kerala(India) 686 560
Emails: tijothomaschal@gmail.com/ j.johney@gmail.com
Introduction
The marketers always use attractive celebrities to attract new customer for their product with the
belief that the respondents might think „what is beautiful is good‟. According to Miller, (1970) a
person's level of attractiveness may evoke in a perceiver a consistent set of expectancies about
the traits by the process of trait inference. According to Erdogan, (1999) attractiveness does not
mean simply physical attractiveness but includes any number of virtuous characteristics that
consumers might perceive in a celebrity endorser like intellectual skills, personality properties,
lifestyles, or athletic skill. Judson & Aronson, (1965)in their study evaluating the effect of
communicator‟s attractiveness in communication effectiveness found that when the
communicator is very attractive, an openly stated desire to influence the views of the audience
will increase the effectiveness of his communication. In the study by Chaiken, (1979) the effect
of physical attractiveness on persuasion was evaluated in a field setting. The findings revealed
that communicator attractiveness affected respondent‟s agreement towards the message
communicated. In an extensive review of literature in the field of physical attractiveness by
Joseph, (1982) suggested that physical attractiveness is not particularly important or robust
source of interpersonal influence. In a study by Debevec & Kernan, (1986)it was found that
attractive models enhance persuasive efficacy, but only in a mediated fashion. Bower & Landreth,
(2001)suggests that the model product match-up influences advertising effectiveness product
evaluations through its effect on beliefs about model expertise and not due to any direct effect on
product evaluations. Considering the vast usage of celebrity endorsement strategy among Indian
companies, only one product considered for the study. Friedman & Friedman, (1979) suggested
that celebrity endorsement is most effective for jewellery endorsing.
164
Research Gap and Research Problem:
Celebrity endorsement is one of the most highly used marketing strategies by the jewellery
industry in Kerala. According to Geevarathna, (2013)celebrity influence is so strong among
jewellers, that every brand has its own celebrity ambassador to communicate their unique sales
proposition. According to Bower & Landreth, (2001) attractiveness of the celebrity will enhance
the effectiveness of attractiveness relevant product. It was also found in the literature that
jewellery as a product is considered as an attractiveness-enhancing product. So it can be
concluded that the attractiveness of the celebrity will influence the effectiveness of celebrity
endorsed jewellery advertisement. No studies in India have evaluated this effect of celebrity
attractiveness on purchase intention of jewellery products. So this study evaluates how the
perception of respondents about celebrity attractiveness influences their purchase intention of
jewellery product.
Objectives of the study
The specific objectives that we intend to meet are as follows
To study the impact of celebrity attractiveness on advertising effectiveness.
To study the impact of celebrity attractiveness on celebrity brand fit.
To study the impact of celebrity brand fit on advertising effectiveness.
Research methodology
The study used area sampling technique for selection of samples. The area selected for the study
was P D Hills, Kottayam. The stimuli for the study were selected based on the recall test
conducted among 61 post graduate students of Mahatma Gandhi University, Kottayam.
Respondents recalled 35 combinations from which Manju Warier and Kalyan Jeweller
Combination was selected for the study. The questionnaire used for data collection contained two
sections for measuring demographics of respondents and perception of the respondent about
celebrity, brand and advertisement. A total 120 questionnaires were distributed and collected
back. Eleven questionnaires were rejected due to incomplete answers, and 109 fully filled
questionnaires were processed for analysis. Path analysis method was used to test the hypothesis
formulated in the study.
From the literature reviewed following hypothesis was formulated
H1: - Celebrity attractiveness positively and directly influence celebrity brand fit.
165
H2: - Celebrity attractiveness positively and directly influence attitude towards
advertisement.
H3: - Celebrity attractiveness positively and directly influence attitude towards brand.
H4:- Celebrity brand fit positively and directly influence attitude towards advertisement.
H5: - Attitude towards Advertisement positively and directly influence attitude towards
brand.
H6: - Attitude towards advertisement positively and directly influences purchase
intention.
H7: - Attitude towards brand positively and directly influences purchase intention.
Figure 1: Hypothesised model
Celebrity brand
fit
Celebrity
attractiveness
Attitude towards
Brand
Purchase intention
Attitude towards
Advertisement
Data Analysis and Results
From the literature review, a model was developed, and path analysis was used for testing the
model. As it can be seen from the table 2, the path analysis showed an X2 value of 1.522
(P=.677), Goodness of Fit Index (GFI) of .994, Adjusted Goodness of Fit Index (AGFI) of .972,
Normed Fit Index (NFI) of .993, Comparative Fit Index of 1.000 and Root Mean Square Error of
Approximation of .016. The model‟s fit as indicated by these indices was deemed satisfactory.
Table 2:- Model testing
Hypothesis
Hypothesized path
Regression
no
weight
C.R.
Supported /
nonsupported
166
1
Celebrity
<---
brand fit
2
Attitude
Celebrity
0.336
5.031
Supported
0.282
2.56
Supported
0.186
2.509
Supported
attractiveness
<---
towards
Celebrity
attractiveness
Brand
3
Attitude
<---
towards
Celebrity
attractiveness
Advertisemen
t
4
Attitude
<---
Celebrity brand fit
0.532
5.53
Supported
<---
Attitude towards
0.836
6.571
Supported
0.328
3.774
Supported
0.35
6.334
Supported
towards
Advertisemen
t
5
Attitude
towards
Advertisement
Brand
6
Purchase
<---
intention
7
Purchase
intention
Attitude towards
Advertisement
<---
Attitude towards
Brand
Chi-square
1.522
Df
3
P
0.677
GFI
0.994
AGFI
0.972
NFI
0.993
CFI
1
Source:- Survey
The estimated value for hypothesis one was 0.336 with a critical ratio of 5.031 (P<0.05)
indicating that celebrity attractiveness influenced celebrity brand fit perceptions. This finding
was in accordance with the findings of Kamins, (1990).
167
Hypothesis two and three evaluated the effect of celebrity attractiveness on attitude measures.
The estimated value for hypothesis two was 0.282 with a critical ratio of 2.56 (P<0.05) indicating
a good positive relationship attractiveness and attitude towards brand. The estimated value for
hypothesis three was 0.186 with a critical ratio of 2.509 (P<0.05) indicating a positive and direct
relationship between celebrity attractiveness on attitude towards advertisement .
The estimated value for hypothesis four was 0.532 with a critical ratio of 5.53 (P<0.05)
indicating a positive relationship between celebrity brand fit and attitude towards advertisement.
These findings were in accordance with the findings of Asha, K., (2011)who suggested that
celebrity‟s congruence influenced attitude towards advertisement.
The estimated value for hypothesis five was 0.836 with a critical ratio of 6.571 (P<0.05)
indicating a positive influence of Attitude towards Advertisement on Attitude towards Brand.
This finding is in line with the findings of MacKenzie, Lutz, & Belch, (1983) which indicated a
direct relationship between attitude towards advertisement and attitude towards brand.
The
estimated value for hypothesis six was 0.328 with a critical ratio of 3.774 (P<0.05) indicating a
positive influence of attitude towards advertisement on purchase intention.
Hypothesis seven was accepted with an estimated value of 0.35 and a critical ratio of 6.334
(P<0.05) indicating a direct relationship between Attitude towards Brand and purchase intention.
This finding is in accordance with earlier findings of MacKenzie et al., (1983).
Table 3: - Total effect analysis
Celebrity brand fit
Attitude towards
advertisement
Attitude towards
brand
Purchase intention
Celebrity
Celebrity
Attitude towards
Attitude towards
Attractiveness
brand fit
Advertisement
Brand
.336
.365
.532
.587
.445
.836
.325
.330
.621
Source: - Survey
168
.350
On an overall, the influence of celebrity attractiveness on purchase intention is mediated by
celebrity brand fit, attitude towards advertisement and attitude towards the brand. For further
evaluation, the effect of each variable on purchase intention was analysed. As it can be seen from
the table three, attitude towards advertisement (.621) had the highest impact on purchase
intention followed by attitude towards brand (.350), celebrity brand fit (.330), and celebrity
attractiveness (.325). The celebrity attractiveness created the highest influence on attitude
towards brand (.587). These findings show that when an advertisement uses an attractive
celebrity, then the respondent will have more positive attitude towards the brand.
The findings of the study suggested that celebrity attractiveness influenced purchase intention
indirectly through celebrity brand fit, attitude towards advertisement and attitude towards brand.
The study also found that celebrity brand fit produced a considerable direct effect on attitude
towards advertisement and indirect effect on attitude towards brand and purchase intention.
These findings were in line with the findings of Asha, K., (2011) in the field of jewellery
marketing. The study hypothesised the influence of attitude towards advertisement and brand on
purchase intention based on ELM model and dual mediation model. The analysis found these
hypotheses to the statistically significant in the population.
Implication of the study
The study found that celebrity attractiveness has got a very significant influence on purchase
intention indicating that the practitioner should focus on celebrity‟s attractiveness before
deciding on the endorsement. The study found that match between celebrity and product
influenced attitude towards advertisement and brand, which indicates that when the marketers are
choosing a celebrity for the jewellery products they should consider an attractive celebrity.
The literature in the field of celebrity endorsement considers jewellery product as a product high
in psychological and social risk. So the findings of the study can be applied to other products
which have high psychological and social risk. Some studies also consider jewellery as an
attractiveness-enhancing product so that this finding can be applied to that product category also.
Both this generalisation should be made with caution since the study does not evaluate these
aspects.
169
References
Asha, K., M. (2011). A Study on the Impact of Marketing Strategies in the Gold Ornament
Market of Kerala. M G University.
Bower, A. B., & Landreth, S. (2001). Is beauty best? Highly versus normally attractive models in
advertising. Journal of Advertising, 30(1), 1–12.
http://doi.org/10.1080/00913367.2001.10673627
Chaiken, S. (1979). Communicator Physical Attractiveness and Persuasion. Journal of
Personality and Social Psychology, 37(8), 1387–1397.
http://doi.org/10.1037/0022-3514.37.8.1387
Debevec, K., & Kernan, J. B. (1986). Physical attractiveness, message evaluation,. Psychological
Reports, (58), 503–508.
Erdogan, B. Z. (1999). Celebrity Endorsement: A Literature Review. Journal of Marketing
Management, 15(4), 291–314. http://doi.org/10.1362/026725799784870379
Friedman, H. H., & Friedman, L. (1979). Endorser Effectiveness by Product Type. Journal of
Advertising Research, 19(5), 63–71. Retrieved from
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scope=site
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Among Women In Bangalore, And It’s Impact On Buying Decisions. Bharathiar University.
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170
Antecedents and Consequences of Perceived Brand Credibility: An Empirical
Investigation in Children’s Packaged Food Category
Satyabhusan Dash1, Madhu Mandal1 and Ghazal Masrrat2
1
Indian Institute of Management Lucknow
Off Sitapur Road, Prabandh Nagar, Lucknow, U.P. (India) 226013
Emails: satya@iiml.ac.in/ madhumandal@iiml.ac.in/ ghazal.iiml@gmail.com
2
Syscoms College, UAE
Introduction:
Children in India constitute 19% of the world‟s children population. Given the country's
favourable birth rate and the good economic forecasts, opportunities are bound to rise to
make India, the world's largest market for children's products in the coming years. Companies
all over the globe are focusing diligently on the mantra of „Consumer is the King‟, and in this
race, they haven‟t left the young „Princes‟ and „Princesses‟ behind. The word “Children”
today has multiple synonyms as addressed by marketing companies. Pepsi calls them
“Generation Next”; Barbie propounds the tag of “Everything Girl”. The group formerly
known as “children” today is a large, thriving “consumer market segment” for business
practitioners.
Children, all over the globe, are expanding their role from merely a passive recipient of
products, given to them by their parents, to „active consumers‟. They have taken over the
roles of „initiators‟ and „influencers‟ in the family purchase decision making. Although the
kinds of products marketed to kids have remained much the same, their buying power has
increased exponentially over time. Children have learnt to use “pester power” or “nag factor”
(Marshall, Donohoe & Kline, 2007; McDermott et al, 2006) to pursue what they want. Also,
with rise in double-income families, the share of children‟s pocket money has seen a hike.
Moreover, affluent parents demand the best for their children, right from high quality clothes
and footwear to toys and accessories. Hence, all these factors cumulatively result in making
today‟s children a „conscious choice making entity‟. Their increasing affluence has made kids
market eminently worthy of pursuit by businesses.
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Excessive media exposure and technology based socialization have led to brand awareness
among kids more than ever. Kids, as young as two to three years old, can recognise eight out
of twelve brands (Valkenburg and Buijzen, 2005). With such existing pattern, children‟s
market has plenty of headroom for expansion and thus presents massive opportunities for
retailers. However, with proliferation of brands, it is challenging for a brand to make its mark
in the minds of these young consumers and make them loyal towards themselves. Hence
existing and emerging brands needs to take special care while delving in kids segment. The
benefits and values sought by adult consumers are different from those of young consumers.
The marketing brands need to understand the changing mind-sets and fragile approach of
children while engaging with them. In order to establish expertise in kid‟s segment and create
trust worthiness, brands need to sensitize themselves of children‟s preferences, likes, dislikes,
and all those things that make kid a kid. Marketers need to understand more about kids‟
ecosystem to engage him/her as consumer in the contemporary dynamic market place. This is
how brands can establish their credibility in children‟s market. Since brand credibility
increases probability of inclusion of a brand in the consideration set (Erdem and Swait,
2004), brands must make efforts in developing perceived brand credibility among children.
Emerging economies, like India, are witnessing increased urbanization, growth in organized
sector, rise in disposable income and improved lifestyle. Euro monitor International presents
that with this evolving trend, there has been a rise in the packaged foods. According to
findings of an ASSOCHAM study, packaged food industry is increasing at a CAGR of 35%
in India. There is a gradual shift of Indian markets towards convenience foods and
apparently, this shift has also had considerable impact on children‟s consumption pattern. The
survey reveals that in urban households, 76% parents, usually both working, are preferring to
serve easy-to-prepare meals to children 10-12 times a month. Because of this changing
pattern, kids are permitted to have growing access to packaged foods. This pose an
opportunity for the packaged food brands to create their space in the children‟s market.
Especially when, with the increased purchasing power, children these days are buying
packaged food products like biscuits, chips, chocolates and soft drinks etc. on their own. Now
that kids have also become „buyers‟, food brands need to understand children‟s motives to
purchase, beliefs, values, attitudes and their store interactions in order to create perceived
credibility, which in turn will lead to positive word-of-mouth and will reduce brand switching
behaviours among children (Sweeney and Swait, 2008).
172
Research Gap and Research Problem:
Literature (Baek, Kim and Yu, 2010) reveals that brand credibility positively influence brand
purchase intention. More credible a brand‟s signal of its product positioning, the lower is the
consumers‟ perceived risks and the less information gathering and processing costs
consumers need to incur during decision making (Srinivasan & Ratchford, 1991). However, it
can be argued that young consumers make their risk assessments and process information
differently. There is a huge difference in the way how adult consumers react to a stimuli from
how young consumers respond to a similar marketing stimuli. This necessitates the
requirement for studying how children translate perceived benefits of a brand to perceived
brand credibility, which in turn leads to satisfaction, loyalty and word-of-mouth. This
becomes all the more important since there is hardly any brand credibility study carried out in
the children‟s segment.
Also, in order to establish universally applicable theories, it is required to take on perceived
brand credibility studies across industries (Erdem, Swait and Louviere, 2001). Since,
packaged food category is gearing up to meet the ever expanding demands of consumers and
is relevant with respect to children segment, it should be studied in depth to understand how
packaged food brands create their perceived credibility among children segment and what
effects does perceived brand credibility creates.
Objectives of the study:
The study was designed to gain insights on children‟s understanding of brands and gauge
their involvement with brands by:
RO1: Identifying the antecedents of perceived brand credibility in children‟s packaged food
category.
RO2: Determining the consequences of perceived brand credibility in children‟s packaged
food category.
Research methodology:
A qualitative research study was conducted in the first phase of the study where 4 Focussed
Group Discussions (FGD) were administered. Each group had 6-8 children between the age
group 8-14 years. The children belonged to upper most segment of the consuming class- SEC
A1, A2 and B1 and middle segment- SEC B2 and C from various cities: Delhi, Surat and
Indore. A conceptual research framework was developed taking insights obtained from
173
qualitative study and review of literature. A quantitative survey questionnaire was prepared
and administered on 1000 respondents to validate the findings of qualitative research.
Data Analysis and Results:
The survey questionnaire was administered for 1000 respondents. However, 71 responses
were not complete resulting in 929 valid and complete responses. After data cleaning, it was
analysed using SPSS to run factor analysis. There were nine dominant factors which emerged
significant, namely: Health, Convenience, Variety, Price, Sensory Appeal, Self-Gratification,
Celebration, Conformity and Impression as important drivers of credibility. These 9 factors
can be grouped under three benefit domains, depending on the literature, namely Utilitarian
benefits (Health, Convenience, Variety and Price); Hedonistic benefits (Sensory Appeal,
Self-Gratification and Celebration) and Social benefits (Conformity and Impression).
Confirmatory factor analysis (CFA) was used to verify validity factor structure followed by
path analysis to examine the relative effects of antecedents and its consequences. Overall
goodness of fit indicies stats indicated the model holds good for both CFA and Path analysis.
Path analysis findings suggested that Hedonistic followed by utilitarian and
benefit(s) are more important in determining brand credibility.
emotional
Brand credibility in turn
significantly influenced brand loyalty and positive word-of-mouth.
Implications of the study:
The findings of this research study will be relevant for many packaged food companies as it
is going to unveil various aspects of children‟s motivations, preferences and attitudes towards
consumption of branded packaged food products. This study may also provide lessons to food
brands to emphasize on the formulation of different marketing programmes and engagement
strategies in order to improve their perceived brand credibility, which in turn will generate
brand loyalty and positive word of mouth. The study will help marketers to view children as
an active consumer while giving a comprehensive understanding of the motives and ways in
which kids interact, respond and engage with marketing related activities of brands.
Moreover, the study will also be fruitful for researchers who seek to understand the role of
perceived brand credibility in translating the benefits sought by young consumers and
generating consumer satisfaction. The finding of the study will provide valuable contributions
in understanding kid as consumers. The study will address the issue of development and
socialisation process of kids as consumer in the marketplace. The study will also contribute
174
issues on children‟s abilities as consumers and their influence on own and other household
purchases.
References:
Baek, T. H., Kim, J., & Yu, J. H. (2010). The differential roles of brand credibility and brand
prestige in consumer brand choice. Psychology & Marketing, 27(7), 662-678.
Erdem, T., & Swait, J. (2004). Brand credibility, brand consideration, and choice. Journal of
consumer research, 31(1), 191-198.
Erdem, T., Swait, J., & Louviere, J. (2002). The impact of brand credibility on consumer
price sensitivity. International journal of Research in Marketing, 19(1), 1-19.
Marshall, D., O'Donohoe, S., & Kline, S. (2007). Families, food, and pester power: beyond
the blame game?. Journal of Consumer Behaviour, 6(4), 164-181.
Srinivasan, N., & Ratchford, B. T. (1991). An empirical test of a model of external search for
automobiles. Journal of Consumer research, 18(2), 233-242.
Sweeney, J., & Swait, J. (2008). The effects of brand credibility on customer loyalty. Journal
of retailing and consumer services, 15(3), 179-193.
Valkenburg, P. M., & Buijzen, M. (2005). Identifying determinants of young children's brand
awareness: Television, parents, and peers. Journal of Applied Developmental Psychology,
26(4), 456-468.
175
TRACK II
176
Evaluation of Service Quality of Indian Banking in Respect of
Customer Satisfaction
Ankit Agarwal1, Dr. Raj Kamal2
1
Research Scholar, Uttarakhand Technical University, Dehradun, U.K (India)
2
Professor, MJP Rohilkhand University, Bareilly, U.P (India)
Email: ankitagarwal343@gmail.com
Introduction:
Bank plays a vital role in the growth of country economy. In these highly competitive & global
financial services, banks find out competitive advantage by providing better service quality. As
usual quality is always considered to be issues in the growth of banking sector. By offering better
quality service banks can keep up customer’s loyalty or can enhances it. Customer service and its
quality are major driving forces in the business area. The quality of product is the ability to
satisfy the needs and expectations of the customer whatever it’s having towards the services.
Service quality is a classification how well delivered services conforms to the customer
expectations. Service quality is a measurement phenomenon that reflects the customer’s
perception of specific dimension of services which reflects several attributes of the services like:
reliability, responsiveness, assurance, empathy, tangible, satisfaction on another hand is more
inclusive, having greatest important in the path of development. It is influenced by perception of
service quality, product quality and price as well as conditional factors and personal factors of
the customers as well as bank. Service quality is a general opinion the clients from regarding its
delivery which is a series of successful and unsuccessful experiences. Service quality affects
customer satisfaction by providing the real benefits or vice – verse which enables the banks more
market oriented and customer friendly.
The present study evaluates the customer perceptions of service quality in selected public &
private sector banks. So keeping in mind the above issue, the present study focuses on customer
satisfaction & service quality gap relate to customer’s perception & expectation and their
measurement between public & private sector banks in Rohilkhand Region of Uttar Pradesh. The
177
study also examines the applicability of alternative measures of service quality in the developing
economy of India and assesses related issues in that context. The study conducted among four
banks of the state, namely State Bank of India (SBI) & Punjab National Bank (PNB) in public
sector banks, HDFC Bank & Axis Bank in the private sector banks. The SERVQUAL model
(Parasuraman et a1. 1985, 1988, 1991) was begging used & descriptive statistics as well as
inferential statistics analysis was in evaluating the level of quality of banking in India.
Research Gap and Research Problem:
After banking reform some of the variables towards the service quality are found unsuited while
some was absent. Some measures are found very necessary to be implementing for the
improvement of efficiency and effectiveness of commercial banks for providing required service
quality. The study are conducted on the various gaps between the performance of both, private
and public banks in India with regard to their service quality, customer satisfaction, customer
loyalty, competence, social responsibility, assurance, reliability, empathy and tangibles.
There had been very little research carried out in the Indian banking sector relating to service
quality gap between employee and customer. Therefore, it can be said that literature on Indian
banking service quality is scarce and there are few empirical and non-empirical studies covering
the subject of the study.
The problem that has been noticed while finalizing the topic for research is detrimental to the
fact that ‘service quality’ in the banks has yet not reached up to the satisfaction level of the
customers. The entrance of various players in the banking industry have enhanced the
expectations of the customers in respect of ‘Service Quality’ and developed a big challenge for
the entire banking sector to satisfy the expectations of the customers by serving them at the best.
Banks are trying their best to meet the expectations of the customers with their perceived values
by offering desired customer service with the use of innovative marketing mix and technology.
But still the problem remains unresolved as the provision of excellent customer service does not
evaluate the degree of customer satisfaction .The customer satisfaction relative to the ‘service
quality’ is difficult to analyze as ‘service quality’ is an abstract phenomena based on the post
experience of the customers that vary from individual to individual. Therefore banks find it
challenging to execute their management strategies before the blurring challenges that are
discussed below:
178
• Rising competition and customer expectations.
• Proliferation.
• Escalating attacks on customer information.
• Ever changing consumer behavior.
• Capitalizing on the changing dynamism of the market.
Objective of the Study:
1. To study the impact of demographic variables.
2. To study the gap that exist between the expectations of customers towards the banking service
provider and the perception they draw regarding the various service quality factors with respect
to public and private sector banks.
3. To analyze the dimensions of service quality with respect to their relations with each other.
4. To make suggestions for improvements in service quality.
Research Methodology:
1. Diagnostic / Exploratory Research: Research is mainly about the discovery of insights and
ideas.
2. Descriptive research: Research is focusing on describing the attitudinal and behavioral
characteristics of a particular group.
3. Causal Research: Research is concerned with identifying and determining the exact cause
and effect of particular relationships.
Sampling Method & Tools
Random sampling procedure is used to obtain primary data by structured questionnaire (based on
SERVQUAL Modal followed by Likert Scale) from customers of banks in Rohilkhand region.
To be more specific first 10 customers has been taken from opening the branch each day,
irrespective to the demographics. 350 questionnaires were administered randomly to the
customers out of whom 300 questionnaires were used to carry out the research.
179
Data Analysis and Results:
This whole study has been completed in five phases.
1. Descriptive Statistics
2. Inferential Statistics
3. Reliability Analysis
4. Gap Analysis
5. Hypothesis Testing's
The levels of service quality provided by private banking sector to their customers with regard to
all service quality dimensions are high, while the levels of service quality provided public
banking sector to their customers with regard to all service quality dimensions were low. The
results highlight the concept of ‘service quality’ in banks depicting the fact that the customer’s
expectations and perception for a particular service vary due to the service gap that creates a
failure to reach the desired objective of the customer and having no relationship in respect to
demographic variables.
The result shows that the dimension of service quality such as Empathy and Accessibility has
more gap, as the customer expectations are high to their perceived service. The result also
indicates that Empathy-Reliability-Assurance positively influences the service quality. The study
implies that bank should reduce the service gap to deliver superior quality of service to retain
existing customers as well as to attract new customers.
Implications of the Study:
These research findings provide interesting insights and generated few implications:
1. Theoretical implications: This study has demonstrated that the dimensions of the
SERVQUAL model which were used to measure the perceived service quality of public
and private banking sectors are characterized by a good level of validity and reliability; it
is therefore appropriate for measuring the perceived level of service quality in Indian
banks.
180
2. Managerial implications: it was found that public and private sector bank Expressed no
difference in the service quality with respect to all dimensions though a GAP has been
registered in the customer’s expectations and perceptions regarding the different
dimensions of service quality in both public and private sector banks of India.
3. Implications
for
marketing
management
practices
and
human
resource
management: It is recommended that Indian banks should work on improving their
marketing strategies and policies to enhance the levels of service quality, and this may
include the following:
1. Monitoring customer perceptions of service quality
2. Application of the service quality instrument
3. Managing CRM
4. Service quality improvement process
References:
Chakrapani, A. (2014). Customer Relationship Management in Indian Banks”, International
Journal of Research in IT, Management & Engineering, 4(3).
Tondon, A. (2014). An Analysis of Service Quality - A Comparison of Public and Private Sector
Banks, Submitted Thesis: MJP Rohilkhand University, Bareilly, India.
Babakus, E., and Boller, G.W. (1992). An empirical assessment of the SERVQUAL scale,
Journal of Business Research, 24(3): 253-68.
Gronroos, C. (1984). A service quality model and its marketing implications, European Journal
of Marketing, 18(4): 36-44.
Mishra U.S, Sahoo, K. K, Mishra S., and Patra S.K. (2010). Service Quality Assessment in
Banking Industry of India: A Comparative Study between Public and Private Sectors. European
Journal of Social Sciences, 16(4): 653.
Mehta, P. (2012). Measuring Service Quality in Retail Banking in Context of Gujrat, Ninth AIMS
International conference on Management, 38-46.
Parasuraman, A., Zeithaml, V., and Malhotra, A. (2005). E-S-QUAL: a multiple-item scale for
assessing electronic service quality. Journal of Service Research, 7(3): 213-33.
Zeithaml, V. A., Berry, L. L. and Parasuraman, A. (1988). Communication and control processes
in the delivery of service quality. Journal of Marketing, 52(4): 35-48.
Zeithaml, V. A. (1988). Consumer perceptions of price, quality and value: a means-end model
and synthesis of evidence. Journal of Marketing, 52(3): 2-22.
181
E-CRM SCALE DEVELOPMENT AND VALIDATION IN
INDIAN E-COMMERCE SECTOR
Dr Anuja Agarwal1, Dr Arun Kumar2
1
ICFAI Business School (IBS): A Constituent of IFHE, Hyderabad
Room No. 112, C-Block, ICFAI Business School (IBS), Dontanpally, Shankerapally Road,
Hyderabad, Telangana- 501203
Email: anuja.iiitm@gmail.com
2
Birla Institute of Technology & Science (BITS) Pilani
6068 G, New Academic Block, BITS Pialni, Pilani Campus, Rajasthan-333031
Email: arunagariya@gmail.com
Introduction:
Organizations struggling to gain and maintain market share are constantly looking for innovative
and sustainable ways to beat competition. This, though, is becoming increasingly difficult to
attain such ways. Also the marketing activities of corporations are becoming more and more
transparent because of quick and rapid progression of internet and technology, thereby making it
challenging for companies to achieve sustained and continual differentiation (Kimiloglu and
Zarali, 2009).
In the present scenario, e-commerce players are observing tremendous growth potential in India.
This can be verified by the increased number of private investments in various e-commerce and
related internet businesses by Indian as well as foreign venture capital and private equity players.
According to Internet and Mobile Association of India (IAMAI) and IMRB International, the ecommerce market is expected to grow by 2000 billion by December, 2016 (Alawadhi, 2016).
There is 30% market growth from December, 2011 to December, 2015. This growth indicates
increase in number of internet users as well as increase in online purchases over the past few
years which has added to the belief that India is soon to become one of the world’s largest online
market.
182
E-commerce companies are in a constant rat-race to acquire more and more users because of the
growing market. A lot of money is being shed on advertisement, marketing and discounts to
attract potential customers. However, to thrive in such a competitive environment especially
when there isn’t any tangible barrier to entry to the industry itself, engaging in fruitful Customer
Relationship Management (CRM) and Electronic Customer Relationship Management (E-CRM)
practices will go a long way into building customer trust and ensuring customer loyalty.
Studies and research conducted on the subject have shown that economic profitability of a
company is a direct function of customer loyalty (Reichheld, 1995; Kelley, 2003). Even many
researchers have explained that to maintain competitive advantage and to prevent customers
from switching over to competitors, companies need to continuously engage in CRM techniques
(O’Toole, 2003; Kimiloglu & Zarali, 2009). The importance of CRM is only exemplified in case
of e-commerce businesses since it is harder to win and retain customers trust in this industry.
Therefore, a necessity to study the factors essential to build effective customer relationships to
enhance customer loyalty in online market environment has come into picture.
E-CRM can be understood as a web centric approach to build and maintain customer
relationships. But neither all E-CRM practices are same, nor all contributes equally to attain the
desired result. Identifying those practices that have the most impact and focusing on them will
not only help save cost but also lead to faster realization of company’s goals, leading to a higher
customer satisfaction and retention rate within the same period of time (Feinberg et al., 2002;
Luck and Lancaster, 2003).
Research Gap and Research Problem:
A number of studies were studied and identified that E-CRM encompasses all CRM functions
with the use of intranet, extranet and internet. These studies mainly included evaluating
performance of E-CRM practices; analyzing quality of relationships of various businesses,
ranging from library to hotel with its customers, taking into account the B2B relations as well;
estimating how technological innovations have enhanced E-CRM; exploring the possible
operational problems that may occur because of the use of E-CRM practices; identifying E-CRM
183
strategies and implementations that would lead to higher levels of success for e-business (Luck
and Lancaster, 2003; Kimiloglu and Zarali, 2009; Lipiainen, 2015).
Objective of the Study:
Based on the literature review on E-CRM and growing status of Indian e-commerce industry, the
aim of this paper is to create and validate an E-CRM Scale (quantitative model) that analyses the
customers’ perception towards Indian e-commerce organizations’ E-CRM efforts. Through the
scale, the gap in the e-commerce sector companies’ CRM efforts and the customers’ perceptions
of those efforts can be identified, which quantitatively need to study and hence, strategically can
be bridged.
Research Methodology:
A total of 42 scale items have been derived from 48 research papers to identify the appropriate
E-CRM constructs in the Indian E-Commerce domain. Those scale items that had a minimum of
5 citations in the research papers or were explicitly mentioned as E-CRM constructs were taken.
Experts from the field of Indian e-commerce domain were consulted and based on the interaction
and their recommendations 11 dimensions were found to be irrelevant in the current market
scenario. The list was pruned to 31 dimensions.
Next, a depth interview was conducted with 11 frequent e-commerce users and consumers from
all across India. The interviews had a duration of 20 to 30 minutes. The list of the 31 E-CRM
dimensions with their description were presented to each of the interviewees and were asked to
identify those that they considered relevant to their experience of making purchases through ecommerce portals. A final list of 23 dimensions was pruned based on the modal value of 6.
A pilot survey having 23 questions (one for each dimension) was conducted to check the
respondents’ understanding of the survey questions. Two questions were found to be similar and
hence were joined into a single question.
The final questionnaire survey consists of a list of 22 dimensions. The revised questionnaire has
the following structure:
184
Section 1: Demographic Information
Section 2: Questionnaire on E-CRM Dimensions to measure the respondent’s opinion about
various attributes of the CRM process
Each of the candidates were asked to choose that response that best reflected their opinions and
experiences for each statement – from a 5 point Likert-type scale (from 5 = “strongly agree” to 1
= “strongly disagree”).
Data Analysis and Results:
Responses to the final questionnaire survey received online from e-commerce customers from all
across India. Standard procedure of scale development was followed, comprising of exploratory
(EFA) and confirmatory factor analysis (CFA). A total sample size of 246 was collected from the
respondents and with half of the sample 123, EFA was performed. The Cronbach-alpha value
was found as .795, which is in quite an acceptable range (>.7) (Nunnally, 1978). The KMO value
was found as .689 which is also in the acceptable range (>.5) for conducting exploratory factor
analysis. A total of 4 factors (Table-1) were extracted contributing towards 67% of the variance.
Component
CFA
CFA1: Security & Privacy
TCS
EOU
MEB
0.625
TCS1: Recommendations from Friends & Family
0.68
MEB1: Gifts, Rewards & Loyalty points
0.619
TCS2: Complete Customer Service & Support
0.612
CFA2: Product Highlights & Product Information
0.777
CFA3: Quick Processing & Delivery
0.571
MEB2: Recommendations based on purchase history
CFA4: Efficient Channel Partners
0.738
0.668
EOU1: Simple, Interactive UI
0.609
TCS3: Competence & Responsiveness of Employees
CFA5: Multiple Payment Options
0.721
0.511
TCS4: Reliability of Ecommerce Player
0.531
CFA6: Track Order Status
0.592
EOU2: Filtered Product Search Capability
0.556
EOU3: Add to Cart Functionality
0.559
EOU4: Information Storing & Immediate Checkout
0.663
MEB3: Notifications on Wishlisted Products
Notes: CFA: Core Funtional Attributes, TCS: Trust & Customer Support, EOU: Ease of Use, MEB:
Membership benefits
Extraction Method: Principle Component Analysis. Rotation Method: Varimax & Kaiser
Normalization.
a. Rotation Convergent in 23 iterations.
Table- 1: Rotated Component Matrix (EFA)
185
0.722
After EFA, CFA was performed to validate the findings of EFA. The first model (measurement
model- Figure-1), which presents the covariance among different constructs and sub constructs.
The statistics of the measurement model (Table-2) shows an acceptable model fit (Anderson and
Gerbing, 1988). The fit indices values indicate a realistic fit of model 1, the measurement model,
with the sample data (Byrne, 2001). All the indicators have been found to show significant
loadings on to their respective sub constructs (values between 0.45 and 0.79).
Sno
Model 1
Model Fit
2
x
304.754
2
x /df
2.697
Absolute Measures
RMR
0.06
GFI
0.867
Incremental Fit
AGFI
0.831
CFI
0.85
Parsimonious fit
TLI
0.819
Table-2: Calculated Statistics for Model 1 (Measurement Model)
186
PCFI
0.706
RMSEA
0.07
Figure-1: Model-1: Measurement Model
The composite reliability (Table-3) of the identified E-CRM constructs (CFA, TCS, EOU and
MEB) indicates values greater than 0.60, which is acceptable and is one of the conditions to
assess the validity of the model (Carmines and Zeller, 1988).
Construct
Composite Reliability
CFA
TCS
EOU
MEB
0.67
0.73
0.62
0.69
Table-3: Composite Reliability
187
In the second model (Figure-2), the E-CRM model is validated using structural equation
modelling. The statistics of the structural model (Table-4) shows an acceptable model fit
(Anderson and Gerbing, 1988). The fit indices values indicate a realistic fit of structural model,
with the sample data (Byrne, 2001). Both the measurement and structural models confirm the
four factor structure of E-CRM.
Sno
Model 2
Model Fit
2
x
307.098
2
Absolute Measures
x /df
2.67
RMR
0.05
GFI
0.89
Incremental Fit
AGFI
0.83
CFI
0.88
Parsimonious fit
TLI
0.839
Table-4: Calculated Statistics for Model 2 (Structural Model)
Figure 21: Model 2 – Structural Model (4 factor model)
188
PCFI
0.718
RMSEA
0.07
Strategic Implications of the Study:
The analysis establishes the age old belief that E-CRM is a multidimensional construct. The
factors that constitute E-CRM in the Indian e-commerce sector are as follows:
Core Functional Attributes (CFA)
It consists of a range of services and features that form the backbone of the functioning of an ebusiness. Results indicate that an e-commerce company must focus on Security & Privacy;
Product Highlights and Complete product information; Quick processing and delivery; Efficient
Channel Partners; Multiple Payment Options; Track Order Status to provide complete customer
experience and satisfaction.
Trust and Customer Support (TCS)
It takes time to build trust, especially for e-businesses, since there is limited human interaction
with customers. One bad experience can ruin months and years of effort added in building
reputation. That is where excellent customer support and service comes in. It includes
recommendations from friends and family; Complete Customer Service and Support;
Competence and Responsiveness of Company’s employees; Reliability of the E-commerce
player (guarantee, warrantee, money back).
Ease of Use (EOU)
How easy and intuitive it is for the customers to navigate and operate the e-tailer’s website has a
long standing impact on customer’s overall experience. This can be achieved by implementing
the following: Simple, Interactive UI; Filtered product search capability; Add to cart
functionality; Information storing and immediate checkout facility.
Membership Benefits (MEB)
With too many generic discounts and flash sales on offer, customers expect and are more
influenced by rewards specifically customized for them. Therefore, customers’ loyalty can be
augmented by the following practices: Gifts, rewards and loyalty points; Recommendations
based on purchase history; Notifications on wishlisted products.
189
Conclusion
One of the most prominent ways to gain competitive edge and win customers for e-businesses is
to engage in impactful E-CRM practices that result in enhanced customer loyalty and increased
profitability over the long run.
Hence, this research paper catering to the Indian e-commerce domain identifies such impactful
E-CRM constructs by developing an E-CRM scale, based on primary research findings, to give a
quantitative representation to qualitative E-CRM attributes. Through the findings of the research,
it is validated that E-CRM is indeed a multi-dimensional construct. Four constructs namely, Core
functional attributes, trust and customer support, ease of use and membership benefits have been
identified to have a significant impact on consumers in the Indian e-commerce domain. From
management’s perspective this proposed scale will help e-commerce players to identify critical
factors pertaining to E-CRM and help them manage relations with their customers much more
effectively. This in turn will lead to enhanced customer satisfaction, thereby increasing customer
loyalty, which will affect the profitability of the company for years to come.
References:
Alawadhi, N. (2016). India's e-commerce market expected to cross Rs 2 lakh crore in 2016:
IAMAI. Economic Times, News Article: http://economictimes.indiatimes.com/articleshow/
52638082.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Anderson, J.C. and Gerbing, D.W. (1988). Structural equation modeling in practice: A review
and recommended two-step approach. Psychological Bulletin, 103 (3): 411-423.
Byrne, B. M. (2001). Structural equation modeling with AMOS: Basic concepts, applications
and programming (2nd ed.). Madison Avenue, NY: Routledge.
Carmines, E. G., and Zeller, R. A. (1988). Reliability and validity assessment. Reverly Hills,
California: Sage.
Feinberg, R. A., Kadam, R., Hokama, L. and Kim, I. (2002). The state of electronic customer
relationship management in retailing. International Journal of Retail & Distribution
Management, 30(10): 470-481.
Kelley, G. M. (2003). How E-CRM can enhance customer loyalty. Marketing Intelligence &
Planning, 21(4): 239-248.
190
Kımıloğlu, H. and Zarali, H. (2009). What signifies success in e‐CRM?, Marketing Intelligence
& Planning, 27(2): 246-267.
Lipiäinen, H. S. M. (2015). CRM in the digital age: implementation of CRM in three
contemporary B2B firms. Journal of Systems and Information Technology, 17(1): 2-19.
Luck, D. and Lancaster, G. (2003). E‐CRM: customer relationship marketing in the hotel
industry. Managerial Auditing Journal, 18(3): 213-231.
Nunnally, J. C. (1978). Psychometric theory (2nd ed.). New York, NY: McGraw-Hill
O'Toole. (2003). E-Relationships - emergence and the small firm. Marketing Intelligence and
planning, 21(2): 115-122.
Reichheld, F. (1995). Loyalty and the Renessaince of Marketing. Marketing Management, 2(4):
10-21.
191
Investigating the Role of Customer Engagement
in Hospitality Sector
Jyoti Sharma1, Raouf Ahmad Rather2
Email id: reachedjyoti@yahoo.co.in /r.raouf18@gmail.com
1
2
Assistant Professor, Kathua Campus, University of Jammu, Jammu& Kashmir.
Research Scholar, The Business School, University of Jammu, Jammu, Jammu& Kashmir
INTRODUCTION
In an increasingly networked society where customers can interact easily with other customers
and firms through social networks and other new age media, non-transactional customer
behaviour is likely to become more important in near future (Verhoef, Reinartz&Krafft, 2010).
The growing popularity of internet has among other things,provided hotels with new
opportunities to connect with their customers through interactions other than the service
experience (e.g. writing/reading, reviews, joining facebook communities or blogging). Internet
empowers the hospitality operators and consumers to share information, opinions and
experiences not only from business to customers but also from customers to customers (Litvin,
Goldsmith & Pan, 2008). Such interaction emphasises on the importance of engaging the
customer to ensure competitive advantage in the highly competitive hospitality industry.
Customer engagement (CE)has emerged as a growing phenomenonamong marketers as well as
practitionersmostly because of its potential to influence customer behaviour (Brodie et al.,
2011).Role of organisations in engaging customers is recognized as a catalyst for increasing
future consumption and to generate enduring sustainable business relationships (Vivek, et al.,
2012). For developing and building competitive benefits, CE is considered to be an effective
acquisition and retention strategy (Hollebeek et al., 2014).
Customer loyalty is fundamental to marketing research and is also one of the most important
assets possessed by service companies. From organisationperspective, customer loyalty is
contemplated as a crucial marketing issue as loyalty leads to business solidity and bigger
192
earnings, decreased costs of marketing, maximum word of mouth, lesser receptivity of price and
reduced degrees of consumers switching.In various industries, loyalty has been regarded as a
major indicator of marketing achievements of companies including hospitality sector.
RESEARCH GAP AND RESEARCH PROBLEM
Despite the growing interest which has been created among marketing researchers, as well as
practitioners, little empirical work has addressed the concept ofcustomer engagement. Vivek et
al. (2012) conducted a qualitative study involving executives and customers, to analyze and
explores the nature and scope of customer engagement from a range of industries, involving
services and goods.Relevant literature pertaining to customer engagement has been more
prevalent in developed countries, thus there is a need to analyze the status of customer
engagement in developing countries especially examining the engagement practices adopted for
Indian customers. Since limited researchhas been conducted in customer engagement with
respect to hospitality sector like (Bowden, 2009 and So et al. 2014), further understanding of this
concept is essential with respect to Indian hospitality sector.
OBJECTIVES OF THE STUDY
The present study aims at empirically exploring the customer engagement in hospitality
sector.Secondly, it aims to further investigate the influence of customer engagement on customer
loyalty.
RESEARCH METHODOLOGY
The scale for measuring customer engagement and loyalty were based on the previous work of
the author’s viz., (So, et al., 2012, 2014). Appropriate adjustments were madeaccording to the
present research framework and purpose. The questionnaire consisted of three sections; section
one included precoded questions regarding the demographic information and travel behaviour
like age, gender, education, income, customer status etc. of the respondents. Section second
consisted of customer engagement scale followed by third section of questionnaire that was on
customer loyalty.All the constructs weremeasured on 7 point Likert scale (1 for strongly disagree
and 7 for strongly agree). Pretesting of the questionnaire was done with 25 respondents randomly
selected from 10 four star and five star hotels to ensure that they understood the questionnaire.
This was helpful in achieving content validity.The geographical area for data collection was
193
Jammu and Kashmir, India. A self-administered survey was conducted in four star and five star
hotels. The study used random sampling technique to collect the data in four star and five star
hotels. Out of 320 questionnaires, 310 (96.8%) completely filled questionnaires were received. A
list of four star and five star hotels operating in Jammu & Kashmir wasprocured from the
Tourism Department.
DATA ANALYSIS AND RESULTS
Engaging the customers has been receiving lot of attention in hospitality sector. It reflects the
relationship of the brand with the customer even after the purchase is done. Reliability and
validity for the paper was established and confirmed in a five dimensional customer engagement
construct indicating that the multidimensional measurement of customer engagement is reliable
and valid.Data were analyzed using the two-step structural equation modeling (SEM) approach.
A 25-item, five-dimensional confirmatory factor analysis (CFA) on the overall sample data (n =
310) was performed first by using AMOS 20.0 to confirm the dimensions of customer
engagement. The overall goodness-of-fit indices of CFA indicate that all the fits of the
measurement model are acceptable (χ2 = 825.179, df = 413, χ2 /df= 1.998, p <.000, CFI = 0.95;
TLI = 0.95, NFI = 0.92, GFI = 0.86, RMSEA = 0.057, SRMR = 0.57). A five factor was
investigated and achieved angood fit χ2 = 536.438, df = 266, χ2 /df= 2.017, p < .001, that
confirm the five-factor model was the more appropriate conceptualization of customer
engagement. Therefore, the results revealed that five dimensions comprising of enthusiasm,
absorption, attention, identification, and interaction represents customer engagement strategies in
the service area especially in the hospitality sector.It also suggests the dimensions influencing
customer engagement in hospitality sector and their relative significance in strengthening and
building loyalty. Structural Equation Modelling was applied to investigate the hypothesis.The
overall model fitness indices χ2 = 886.617, df= 422, χ2/df= 2.101, p < .05, CFI = .95, TLI = .94,
NFI = .91, RMSEA = .060, and RMR = 0.74 reflect good model fit.The hypothesis second (H2)
that is, customer engagement is positively related to customer loyalty, produced (β = 0.85, R2 =
0.72, t = 12.55), hence accepted.Result of study revealed customer engagement had positive and
significant influence on loyalty. Thus, the findings indicate that customer engagement plays an
imperative role in the success of hospitality industry.
194
IMPLICATIONS OF THE STUDY
The research adds to literature of hospitality by conceptualizing and examining the relationship
of CE with underlying construct of customer loyalty.Thepaper offers an instrument designed for
hospitality executives of emerging nations to evaluate the efficacy of marketing practices
adopted for engagingthe customers. The five dimensions werefound to be importantin
demonstrating customer engagement. Thus, managers need to emphasizeon all the five customer
engagement components, particularly on enthusiasm, absorption and attention because of
therehigher standard loadings. The findings of this study shows that four star and five star hotels
need to integrate different engagement practices for ensuring customer loyalty such as future
staying intentions, willingness to recommend, encourage friends and relatives, positive word of
mouth etc.As CE is exhibited beyond the service transaction, enthusiasm provides superior
service offerings and features that delight customers, and generate a positive brand image.In
circumstances wherever the customers are engaged, companies and their associated networks
facilitate the absorption of the engaged customers. Absorption goes a step more than attention, as
it is a suggestive of the incapability to detach oneself when interacting with the offering/brand
(Dessart et al., 2016). Moreover, service provider requiresto establishpossibilities for interactions
and incentives, for example recognition and reward schemes to enhance participation of
customer. Customer interactions with service provider/brands are an elementary characteristic of
customer engagement that should be envisaged as a sort of value in use for example, offering
enjoyable and engrossing interactions (Dwivedi, 2015). Finally in developing strong customer
identification, hotel managers have to generate an exclusive and apparent identity which is
preferred by target customer groups to allocate a sustainable differentiation of the offering and
facilitatesincreased customer’s identification with provider. From managerial perspective, the
resultsadvocates
evaluations/loyalty
that,
besides
management
hoteliersshouldassign
of
resources
customer
experiences,
effectively in
promoting
customer
customer
engagement by generating positive customer identity, induce customer attention, increase
customer interactions, generate customer enthusiasm and customer absorption derived from
engagement enabled strategies to enhance customer loyalty with its patrons.
195
References
Bowden, J. L. (2009). The Process of Customer Engagement: A Conceptual Framework. Journal
of Marketing Theory and Practice, 17(1): 63-74.
Brodie, R. J., Hollebeek, L. D., Juric, B., &Ilic, A. (2011). Customer Engagement: Conceptual
Domain, Fundamental Propositions, and Implications for Research. Journal of Service Research,
14(3): 252-271.
Dessart, L., Veloutsou, C., & Morgan-Thomas, A. (2016).Capturing Consumer Engagement:
Duality, Dimensionality and Measurement. Journal of Marketing Management, 2, (5-6): 399426.
Dwivedi, A. (2015). A Higher-Order Model of Consumer Brand Engagement and its Impact on
Loyalty Intentions. Journal of Retailing and Consumer Services, 24:100-109.
Hollebeek, L. D., Glynn, M. S., &Brodie, R. J. (2014). Consumer Brand Engagement in Social
Media: Conceptualization, Scale Development and Validation. Journal of Interactive Marketing,
28(2): 149-165.
Litvin, S. W., Goldsmith, R. E., & Pan, B. (2008). Electronic Word-of-Mouth in Hospitality and
Tourism Management,Tourism Management, 29: 458-468.
So, K. K. F., King, C., & Sparks, B. (2012). Customer Engagement with Tourism Brands: Scale
Development and Validation,Journal of Hospitality & Tourism Research, 38(3): 304-329.
So, K. K. F., King, C., Sparks, B., & Wang, Y. (2014). The Role of Customer Engagement
inBuilding Consumer Loyalty to Tourism Brands,Journal of Travel Research,1-15.
Verhoef, P. C., Reinartz, W. J., &Krafft, M. (2010). Customer Engagement as a New Perspective
in Customer Management, Journal of Service Research, 13(3): 247-252.
Vivek, S. D., Beatty, S. E., & Morgan, R. M. (2012). Customer Engagement: Exploring
Customer Relationships Beyond Purchase,Journal of Marketing Theory and Practice, 20(2):
127-145.
196
Determining the antecedents of the 'brand loyalty'-A case of the
tourism destination zone "Golden Triangle (Delhi, Agra & Jaipur)"
Kirti Singh Dahiya1, Professor Dr. D.K Batra2
1
Department of health and hospital management, JamiaHamdardHamdard Nagar,
Tughlakabad institutional area, New Delhi, Delhi 110062
2
B-10, Qutab Institutional Area, Tara Crescent, New Delhi, Delhi 110016
Email: kirti6359@gmail.com / dkbatra@imi.edu
Introduction
Today, a brand is a million dollar term, organizations competes with each other based on the
brand value. Brand value is derived from the term brand equity. Thus, managing the brand
equity has become prime concern for all the brand managers including the destination brand
managers. In present competitive scenario, the tourist destinations are being managed as a
brand to create and sustain their brand equity, and it can be achieved by obtaining destination
brand loyalty among the tourists. Brand loyalty is a significant contributor of brand equity
(Kayaman and Arasli, 2007; Konecnik and Gartner, 2007)
The research study by Pike (2010) identified brand loyalty, brand resonance, brand
association and brand salience as component of consumer based brand equity. Brand equity is
defined as "the added value endowed on products and services. It may be reflected in the way
consumer think, feel and act with respect to the brand as well as in the prices, market share,
and profitability the brand commands" (Keller; 2008) adopted from Kotler et al. (2013).
Brand loyalty for the tourist destination has three major elements, first, destination image,
second, perceived value and third, the service quality (Haque and Khan, 2013).
Azzam & Khanfar (2014) conducted a research study to examine the relationship of brand
promotion, perceived value, and brand quality with the brand loyalty. All the three elements
were found to be significantly contributing towards the brand loyalty of the destination.
Perceived value is defined as the tourist overall evaluation of the destination regarding cost
benefit analysis. Perceived value acts as a competitive advantage for the destination. This
197
study was conducted in Jordan; this may not be same in Indian context.Gartner and Ruzzier
(2011) classified destination market as renewal and repeat market. Renewal market is defined
as the new tourists coming to the destination, and they replace those tourists who will never
come again. Repeat market includes the regular visitors to the place.
Chi (2015) proposed a gradation destination brand loyalty model. The model consisted of
three stages. The stages are initial stage, incubation stage, and reflection stage. Initial stage
refers to first visit of the tourist at the destination and formation of behaviour and attitudes for
the destination brand. Incubation stage involves repeat visitation of the tourist at the same
destination. Reflection stage includes self development and self reflection of the tourist on the
basis of past experience.
Creation of brand loyalty is the biggest challenge for any destination brand manager as this
involves the answer to the question-how to influence the tourist to spend their money again
on the same destination over other competing destinations? This research is addressing the
issue of determining the antecedents of destination brand loyalty in Indian context, for the
destination tourism zone like 'golden triangle.'
Research Gap and Research Problem
Research gap: Most of the studies especially with regards to tourist destination's brand
equity have been conducted outside India. There is not much evidence from the literature,
where the concept of brand loyalty has been studied; for a tourism destination zone like
'golden triangle' in India. Therefore, it was essential to examine the existing literature in
Indian context. 'Golden triangle' is one of the most popular tourism circuits in India therefore,
it was chosen for the study.
Research Problem:Examining the relationship between various antecedents of brand equity
and how they contributes in creation of brand loyalty
Objectives of the study
1. To examine the influence of the independent variables (brand awareness, brand image and
brand experience) on the destination brand loyalty
2. To ascertain the variable that is most significant in determining destination loyalty
Research Methodology
198
Based on the study destination characteristics and the variables extracted from the literature
review, questionnaire was formulated. Questionnaire consisted set of twenty nine questions.
Five questions were measured on nominal scale and twenty four questions were measured on
interval scale (7 point Likert) scale. Among the statements measured on Likert scale, eight
statements were formulated for the variable 'brand image', six statements were under the
variable brand loyalty, and brand awareness was measured by the two statements. Remaining
eight statements were measuring the variable brand experience and satisfaction. The values of
interval
scale
are
1="strongly
disagree",
2="disagree",
3="somewhat
disagree",
4='undecided", 5="somewhat agree", 6="agree", 7="strongly agree."
Judgemental sampling was adopted to ensure the suitability of the respondents. Respondents
of the study were the tourists who have been on 'golden triangle' trip. Data collected from the
tourists outside the tourist destinations of the 'golden triangle'. The total sample size for the
study was 100.
After obtaining values, multiple linear regressions were conducted to achieve the study
objectives. All the assumptions of multiple linear regressions were also satisfied.
Demographic profile of the respondents was also collected through the questionnaire. The
demographic profile includes the information like education level, age, travelling pattern,
travel purpose, & nationality of the respondents.
Data analysis and results
The data analysis has been done through regression and correlation analysis. The result
reflected that 'brand awareness' and 'brand experience and satisfaction' are the major
contributors of brand loyalty. Good quality brand experience is the core essence in formation
of the 'brand loyalty'.
Implications of the study
The study has determined the antecedents of the tourist destination brand loyalty, which is of
the prime importance for the DMO's (Destination marketing organizations). In Indian context
the DMO are the respective tourism departments of the three cities of the 'golden triangle';
Delhi, Agra and Jaipur.
199
Tourism departments should direct their working towards increasing the brand awareness of
their tourist destination because it is one of the contributing factors of brand loyalty. To be a
brand loyal, first it is required that tourist should visit the destination once, followed by the
repeat visits. Therefore, tourist first visit is essential which is influenced through brand
awareness. If a person is aware about any tourist destination, then only he/she may visit the
destination, and after the tourist visit the destination, the quality experience at the destination
during the trip influences the tourists to become brand loyalby repeat visitations. Good
memorable experience of the tourist is based on the working of various stakeholders in
tourism industry.
Various stakeholders in tourism industry are restaurant owners, hoteliers, transporters, tour
operators etc..., they are the people who work in front of the tourist and their behaviour at
every touch point forms the experience of the tourist. Therefore, tourist must get the feeling
of warmth and comfort at every touch point. However, all of them work independently, so it
is a challenging task for the DMO's to integrate the activities of various stakeholder's
focusing towards one objective of providing memorable experience to the tourists so that first
time visitors should become brand loyal. As every destination wants to increase the footfalls,
therefore, creation of brand loyalty is retaining the existing tourist and may attract new ones,
through word of mouth by the loyal tourists.
Therefore, the present research is helpful for the DMO's to work for the creation of brand
loyalty by considering the antecedents of brand loyalty that have been tested in this research
in Indian context.
References
Al-Azzam, A. F., & A.A.Khanfar, I. (2014). Antecedent and mediator of destinaiton brand
loyalty amongst international tourists in Jordan. International Journal of Marketing,
Financial Services & Management Research, 3(6), 212-229.
Gartner, W.C, &Ruzzier M.K, (2011). Tourism Destination brand equity dimensions:
Renewal versus repeat market.Journal of Travel Research, 50(5), 471–481.
Ahsanul, H., &Highe, K.A. (2013).Factors Influencing Of Tourist Loyalty: A Study on
Tourist Destinations in Malaysia. Proceedings of 3rd Asia-Pacific Business Research
Conference 25 - 26 February: Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1.1.
200
Ruchan, K.&Huseyin, A. (2007).Customer based brand equity: evidence from the hotel
industry.Managing Service Quality, 17(1), 92-109.
Maja, K., & William, G.C. (2007).Customer-Based Brand Equity for a Destination.Annals of
Tourism Research, 34(2), 400–421.
Kotler, P., Lane, K.K.,Abraham, K. & Jha, M. (2013).Marketing Management- A South Asian
Perspective, pp263, 14th edition: India, Pearson Education Inc.
Steven, P. (2010). Destination branding case study: Tracking brand equity for an emerging
destination between 2003 and 2007. Journal of Hospitality & Tourism Research, 34(1), 124139.
Chi, S.J. (2015).The Tourist-based Formation of Destination Loyalty from the Perspective of
Qualitative Research Approach. Tourism Travel and Research Association: Advancing
Tourism Research Global.1-14. Retrieved from Paper
8.http://scholarworks.umass.edu/ttra/ttra2015/Qualitative_Research_Methods/8
201
Impact of Relationship Quality on Retention – A study with
reference to Bank Customers in Chennai.
Mr. Nataraj B1, Dr. Rajendran R2
1
Lecturer, Great Lakes Institute of Management, ECR Road, Manamai – 603102, Chennai, India.
2
Assistant Professor, Annamalai University, Chidambaram – 621008
Email: nataraj.b@greatlakes.edu.in
Introduction:
In today’s competitive environment, losing a customer is very costly. Service industries
especially banks are now facing heavy competitionin which retaining the customers is part of
their core strategy to gaincompetitive advantage. Previous researchers has identified that it costs
more to acquire a new customer than to retain one (Amy Gallo, 2014). Service quality is one
among the existing measures that is used to analyze the performance of banks. The service
quality can be viewed as the customers’ belief or attitude about the degree of service excellence
(Al-Hawari, Ward, & Newby, 2009). Service quality is measured using the scales Reliability,
Assurance, Tangibles, Empathy and Responsiveness (RATER Model) as proposed by
Parasuraman et al., 1988. Another dimension used to measure the performance of service
industry is relationship quality. The relationship quality can be defined as the quality of
interaction between the organizations and the customers (Apostolos Giovanis and Pinelopi
Athanasopoulou, 2015). Relationship quality is measured with the help of the latent variables
trust, commitment and satisfaction of the customers towards the service industry. Previous
researches has proved that relationship quality can replace service quality and customer
satisfaction. (Apostolos Giovanis and Pinelopi Athanasopoulou, 2015). When customers
maintain quality relationship with the organization they tend to spend more towards buying
products from the organization, talk positively to others about the organization and thus becomes
advocates of the organization. Hence relationship quality can be viewed as a vital factor for
determining customer retention in an organization.
202
Research Gap and Research Problem:
Retention is the dependent variable in this study and retaining the customers is treated as a core
issue. Amy Gallo (2014) states that it cost approximately twenty five times more to acquire a
new customer than to retain an existing onedepending on the type of industry and adds that
increasing customer retention rate by 5% increases profits by 25% to 95%. Since the banks are
facing severe competition customer retention is a prime issue. Retention in this article is
measured not only as willingness of the customers to stay with a particular bank for a longer
period of time but also with the help of critical measures like positive word of mouth, cross
buying, intention to switch banks and perception of the customers about the efforts taken by the
bank to retain them.
Al-Hawari et al., (2009) highlighted the impact of service quality on retention. It was found that
traditional service quality has a significant impact on customer retention and automated service
quality has no positive significant influence on customer retention. Amy wang and AmrikSohal,
(2002) identified that there is a direct impact of service quality on relationship quality in a person
to person level (sales person) and person to firm level. Byron Keating Robert Rugimbana Ali
Quazi, (2003)explored the difference between relationship quality and service quality.Wong,
Hung, & Chow(2007) identified that relationship quality acts as a mediator between information
sharing and willingness to refer the services to others.
There are several research studies in the field of service marketing that measures the relationship
between service quality and retention. Very few research studies explored the association of
service quality with relationship quality. The literature lacks to cover the association between
relationship quality and retention and the current study attempts to measure the same.
Objectives of the study:
The objectives of the study is to design a scale for relationship quality with trust, commitment
and satisfaction as antecedents and to investigate the impact of relationship quality on retention.
The research hypothesis includes,
H1–Affective Commitment has a positive impact on retention.
H2 –Calculative commitment has a positive impact on retention
H3 – Satisfaction has a positive impact on retention.
203
H4 – Trust has a positive impact on retention.
H5 –Relationship quality has a positive impact on retention.
Research methodology:
Descriptive research was carried out in this study. A well-structured questionnaire was
developed using established scales and the survey was conducted among the existing bank
customers. The study population includes the customers of scheduled commercial banks. Eight
schedule commercial banks were selected for the study. Individual copies of the questionnaire
were mailed to the branch managers and relationship managers who are responsible
formaintaining relationshipwith the customers. The potential respondents were identified by the
bankers. A total of 600 questionnaires were mailed to the bankers and 413 completed
questionnaires were selected for the study, with effective collection rate of 68 percent.
The latent variables used for measuring relationship quality are Trust, Commitment and
Satisfaction. The literature review supports the statement that the cost effective way to retain
customers is through improving trust and implementing switching barriers (ChaturaRanaweera &
AndyNeely, 2003). In this article perceived level of trust was measured using a four item scale.
Commitment is measured with the help of a five item scale. Commitment is broadly classified in
to calculative commitment and affective commitment. Calculative commitment refers to
relationship between organization and the customer, in which customer decides to stay in the
organization because of high switching cost, customer inertia or the lack of market alternatives
(Kalyani Menon & O’Connor, 2007).
Affective commitment measures the relationship between the customer and organization in
which customers decide to stay in the organization because of shared values. Affective
commitment is due to the emotional attachment between customer and the organization.
Satisfaction in this article represents relationship satisfaction.The level of relationship
satisfaction was measured using a two item scale. Relationship quality is measured as a second
order construct in which trust, commitment and satisfaction acts as antecedents.
The dependent variable retention is measured with the help of five item construct, in which
positive word of mouth, cross buying, intention to switch banks, frequency and volume of
transactions are considered as determinants to measure retention.
204
The reliability of the constructs was measured by Cronbach alpha. As suggested by Fornell and
Larcker 1981, for the latent constructs to have internal consistency the Cronbach alpha value and
composite reliability value should exceed 0.70. All the latent variable constructs has Cronbach’s
alpha vale greater than 0.70 and hence it is confirmed that the reliability is established.
Data analysis and Results:
In the measurement model of Partial Least Squared- Structural Equation Modelling(PLS- SEM),
the cross loadings of the individual items were tested and all it was found that all the items has
factor loadings greater than 0.70 which shows that the items are having convergent validity. Also
the square root of the average variance extracted was found to be greater than the corresponding
values of inter correlation between the constructs, thus discriminant validity is established.
The measurement model output (Figure 1) shows that the factor loadings of the individual items
are greater than 0.70, which means that internal consistency is maintained in the model. (Joseph
Hair, 2014) To measure the significance of the model, bootstrapping was done and the calculated
t-values of the path model was found to be greater than the critical value 1.96. The individual
impact of trust, commitment and satisfaction on retention was analyzed using PLS-SEM and the
R2values were found to be 0.32 for trust, 0.31 for commitment and 0.44 for satisfaction.
The combined impact of trust, commitment and satisfaction is measured as relationship quality.
The impact of relationship quality on retention was analyzed and the output supports the stated
hypothesis (H5) that relationship quality is associated positively with retention. The R2 value or
the coefficient of determination for retention was found to be 0.509 which means that 50% of the
variance explained in retention is due to relationship quality.
Table 1: Table showing path coefficients, standard deviation and t values of the proposed model.
(O)
STDEV
STERR
T statistic
P VALUE
SIGNIFICANT/NOT
SIGNIFICANT
AC -> RETENTION
0.394
0.0573
0.0573
5.8724
0.000*** Significant
CC -> RETENTION
0.235
0.0606
0.0606
4.5294
0.000*** Significant
SATISF->RETENTION
0.259
0.0317
0.0317
20.8917
0.000*** Significant
TRUST ->RETENTION
0.392
0.032
0.032
17.932
0.000*** Significant
RQ -> RETENTION
0.714
0.0264
0.0263
27.0211
0.000*** Significant
205
(O) - Regression Coefficient, (STDEV) Standard Deviation, (STERR) Standard Error,
AC- Affective Commitment, CC- Calculative Commitment, RQ- Relationship Quality, *** P<0.001
Figure1: Figure showing factor loadings and regression coefficients of the proposed model
AC- Affective Commitment, CC- Calculative Commitment, RQ- Relationship Quality
The objective of the article isto investigate the interactions between trust, commitment and
satisfaction with relationship quality and their combined effect on customer retention.From the
model it is clear that trust, commitment and satisfaction acts as latent variables for measuring
relationship quality and there is a direct positive relationship between relationship quality and
retention.
Conclusion:
The findings support the results of the previous studies that relationship quality is a function of
trust, commitment and satisfaction. The bootstrapped t-statistic value for the path model
relationship quality to retention was found to be 27.02 and it was significant at 1% level. This
shows that there is a strong positive relationship between Relationship Quality and Retention.
206
Further the research can be extended to analyze the combined impact of service quality and
relationship quality on retention. As suggested by ApostolosGiovanis (2015) the research can
analyze whether relationship quality can replace service quality.The banks to have a competitive
advantage started investing in quality relationship with the customers. When the relationship
between customers and organization is maintained properly, the customers can become
advocates of the organization and will involve in spreading positive word of mouth.
Implications of the study:
The findings of the research has implications for both academicians and banks. The study is of
interest to policy makers, bank managers and customers by helping them understand the
importance of trust, commitment and satisfaction in banks and how the customers are willing to
maintain relationship with the bank. Since the service industry is evolving at a rapid phase,
individual attention is required especially in highly service oriented industries like banks.
Focusing on individual customers by enhancing their relationship quality will provide a
competitive advantage for the banks.
References:
Al-Hawari, M., Ward, T., & Newby, L. (2009). The relationship between service quality and
retention within the automated and traditional contexts of retail banking.Journal of Service
Management, 20(4), 455–472. http://doi.org/10.1108/09564230910978539.
Amy Gallo, A., (2014). The Value of Keeping the right customers. Harvard Business
Review,Available at: https://hbr.org/2014/10/the-value-of-keeping-the-right-customers
Wong, A. &Sohal, A. (2002).Customers’ perspectives on service quality and relationship quality
in retail encounters.Managing Service Quality: An International Journal, 12(6), 424 – 433.
Giovanis,A. &PinelopiAthanasopoulou, E. T. (2015). The role of service fairness in the service
quality – relationship quality – customer loyalty chain.Journal of Service Theory and
Practice.http://doi.org/http://dx.doi.org/10.1108/JSTP-11-2013-0263.
Byron Keating Robert Rugimbana Ali Quazi, (2003),Differentiating between service quality and
relationship quality in cyberspace.Managing Service Quality: An International Journal, 13(3),
217-232.
Ranaweera, C.,& Neely, A. (2003).Some moderating effects on the service quality-customer
retention link.International Journal of Operations & Production Management, 23(2), 230-248.
207
Joseph Hair, T. H., (2014). Assessing PLS SEM Results Part I. In: V. Knight, ed. A Primer on
Partial Least Squares Structural Equation Modeling (PLS- SEM). Los Angels: SAGE, 95-98.
Kalyani Menon, Aidan O’ Connor (2007). Building customers’ affective commitment towards
retail banks: The role of CRM in each ‘moment of truth.Journal of Financial Services
Marketing, 12(2), 157-170.
Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1988), SERVQUAL: a multiple item scale for
measuring consumer perception of service quality.Journal of Retailing, 64(1), 12-37.
Palmatier, R.W., Dant, R.P., Grewal, D. and Evans, K.R. (2006). Factors influencing the
effectiveness of relationship marketing: a meta-analysis.Journal of Marketing, 70(4), 136-153.
Rauyruen, P. and Miller, K.E. (2007).Relationship quality as a predictor of B2B customer
loyalty.Journal of Business Research, 60(1), 21-31.
Wong, Y. H., Hung, H., & Chow, W.K. (2007). Mediating effects of relationship quality on
customer relationships: an empirical study in Hong Kong. Marketing Intelligence & Planning,
25(6), 581–596. http://doi.org/10.1108/02634500710819950.
208
Customer Life Time Value for Private Labels: A case of
Apparel Category in India
Pankaj Priya1, Gokulanand Patel1,Amarnath Bose1
1
Birla Institute of Management Technology, KnowledgePark-2, Greater Noida.(U.P.)
pankaj.priya@bimtech.ac.in/gn.patel@bimtech.ac.in/amarnath.bose@bimtech.ac.in
Introduction
Private Labels or Store brands have grown at an impressive rate since the advent of modern
retailing in India. Apparel is the second largest category, after food and groceries, for
Indianretailers,constituting 10% of the $ 37 billion market in India (A T Kearny report 2011).
Additionally private labels account for nearly 40% of the total private labels sale in India (Indian
Retail Industry 2010). The apparel market was expected to grow to the tune of $8 bn by 2016
with a CAGR of 8.5% (Technopak report 2011) with a wide retail presence among the modern
retailers. Hence, there is ample scope for private labels in this category. The growth of private
labels has been commensurate with the increase in the number of studies being conducted in
India and across the globe. A comprehensive review of articles published on or with reference to
store brands in various scholarly and non-scholarly journals and magazines, appearing on just
one of the electronicdatabase namely, ABI/Inform, since 1986, further strengthens the relevance
and the implications of the phenomenon „Store Brands‟. Number of studies published in this
domain pre-1986, stood at nominal 31, but has increased exponentially to 153 in each time span
of 4 years period till 2010 ( Gooner& Nadler 2012). Over the past two decades there has been
considerable improvement of PLBs image and quality across the globe (Au-Yeung& Lu 2009)
resulting in retailers targeting upscale customers exclusively with private labels.
Grewal and Levy (2008) in their editorial remarks of Journal of Retailing had commented that
more number of studies are required in the area of loyalty towards private labels. As retailers
tend to earn more from their private labels programme, hence acquisition and subsequently
209
retention of these customers is of prime importance to the retailers. Moreover, the genesis and
success of any private label programme depends on its ability to customize and customization is
crucial for retention. Though majority of the studies in this domain have focused on purchase
intention while acquiring the customers, very few studies have delved on retaining the customers
for private labels by the modern retailers and specifically those customers who would generate
high Customer life time Value (CLTV).
Research Gap and Research Problem
Retention is a reflection of the loyalty of the customers and has been considered as itsproxy
measure (Kumar & Reinartz 2012). Yet, there would be a variation in the degree of loyalty
across categories (Pappu & Quester 2008). Retailers have experimented with various loyalty
programmes and tools. For e.g. Gap Inc. introduced Private label Credit Card (PLCC) in 2004 as
an innovative brand loyalty tool, later followed by many others, leading to its decreasing
efficacy. The prime reason was the failure to analyse and interpret plethora of data captured for
the spending pattern of the customers (Ferguson 2006). Moreover research has proved that
customers who are loyal may not necessarily be profitable for the marketer and vice versa
(Kumar & Reinartz 2012).Therefore the concept of providing the same loyalty benefits to
customers exhibiting a certain level of loyalty needs a revisit.
Though the apparels considered in this study are premium priced, but being marketed on the
plank of fashion, the inter purchase cycle is reduced considerably resulting in greater
opportunities for customers to indulge in price comparison between purchase cycles and hence
increasing their price sensitivity (Ailawadi et al. 2003). Hence customers‟ loyalty over a time
period may have been significantly influenced by price led promotions of the retailer in response
to the aggressiveness of competitors to wean away these customers from the retailer‟s fold or a
decrease in customers‟ switching cost due to macro environmental forces. This aspect would
cover both aspects of loyalty –behavioural and attitudinal (Kumar & Reinartz 2012). Yet, studies
prove that reduced customer inertia for trying out new offers by the marketer based on a price led
promotion may boomerang due to increased probability of the customer exploring similar offers
by the competitors. Customer loyalty without resulting in enhanced profitability has low
consequence for marketer. Hence quantifying the customer relationship makes sense. As brand
210
loyalty may likely (and not certainly) result in increased profit for retailers (Ailawadi 2001), it
would be more fruitful to focus on those customers who would be generating high customer
lifetime value (CLTV) for the retailers. Therefore it is imperative to target the right segment with
the right marketing interventions rather than focusing on “suboptimal” customers to increase
their profitability and avoid any adverse impact.With the variation in customers‟ loyalty and their
contribution to firm‟s profitability how can the firm identify those customers who exhibit greater
customer life time value (CLTV)?
Though most of the studies have considered the services sector for comprehending customer
retention issues, this study has attempted to understand the same for Indian retailers dealing in
private label apparels. Though Indian retailers are capturing customer data they are not able to
leverage this information for their customer relationship management exercise. This study can
guide them to increase their ROI by taking right marketing decisions for retention as well as
reacquisition of defected customers through better second life time experience and enhanced
profitability from second lifetime value (Kumar et al. 2015)
This exercise demands an in depth understanding of customers‟ repeat purchase behavior. As the
retailers are in the best position to gather customer level behavioural data, these metrics can aid
them in better understanding and implementation of customer relationship management
metrics.The captured metrics may not always exhibit observable heterogeneity (e.g.
demographics), therefore the unobserved heterogeneity of the customers can be accounted for by
developing a latent class segmentation approach (Kamakura & Russell 1989).
Objectives of the Study
The purpose of this study is to:
a) Identify and segment the customers of private labelsapparels on the basis of „degree of
loyalty‟ and „profitability to the retailer‟. Therefore four broad segments would emerge- I) high
on loyalty and profitability, II) high on loyalty but low on profitability, III) low on loyalty and
high on profitability and IV) low on loyalty as well as profitability.
b) To prioritize them on the basis of the segment‟s ability to deliver various gains for the retailer.
This exercise would also help in probing the customers in low loyalty quadrants toobserve their
status during their first life time as well as probable reasons for their defection.
211
c) To show the impact of price based promotions on the purchase behavior of the customers in
these segments.
d) CLTV for each customer segments and the retailer‟s present customer equity can be predicted
at the present marketing cost. Retailers can accordingly offer customized solutions to different
customer segments for increased retention rate and / or enhanced profitability. The results would
also aid in prioritizing the efforts of the retailer in servicing different segments. This would
culminate in generating higher CLTV and hence, customer equity, in a category characterized by
„fashion and fad‟.
Research Methodology
Study has been conducted on the database of over 6000 customers, extracted from the POS
database of a known Indian retailer exclusively dealing in premiumprivate label apparels. They
market their labels through their exclusive brand outlets (EBOs) as well as their online vertical.
Therefore this study is considering sale through only two channels. The database spans over a
period of 4 years and would provide an acceptable insight as the lifetime duration in this sector
last on an average for 5 to 10 years (as per industry standards). Customer activity measurement
would cover measuring average inter purchase time, retention rate, survival rate and lifetime
duration for each segment. The tool used are -a) Sensitivity analysis on two variables- retention
rate and monetary value generated over three years time period, b) Recency, Frequency and
Monetary value (RFM) analysis, as it has proved to be a reliable time variant predictor for future
purchases even in cases of non-contractual customers(Braun et al. 2015) using evolutionary
algorithm (Winston 2014).
Assumptions: a) Industry benchmark of having a gross margin of minimum 30% on premium
western style apparels has been considered as the bench mark for defining the level of
profitability generated through that customer. Accordingly customers purchasing items having
gross margin greater than 30% are considered has highly profitable customers and below it
designated as those generating low profitability.
High - profitability :>= 30%
Low - profitability :< 30%
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b) Referring to Objective 2, One cycle of purchase refers to purchases at regular intervals of
maximum three months. A break between two purchase incidence > 3 months to be counted
in next cycle.
Data Analysis& Results
Figure 1
Profitability/ Loyalty Grid
Profitability / Loyalty →
↓
H
L
H
L
I
II
30%
32%
III
IV
22%
16%
Figure 1 depicts a disconnect between the profitability and loyalty status of the customers. What
is interesting to observe is the generation of high profitability by 32% of the customers who are
low on loyalty status. Hence customers falling in this segment require equal, if not greater
attention than those falling in the first segment.
213
Figure 2
Revenue generated from various percentage of customers
Revenue %
% Generated( marginal
Lakhs) increase
customers
5
10486
10
13285 0.789311
15
15848 0.838276
20
17033 0.930429
25
19157 0.889127
Fig 2reflecting the finding from the sensitivity analysis depicts a dip in the marginal increase of
revenue generation when serving more than 20% of customers. Therefore following Pareto‟s
principle, identifying and serving these 20% customers showcasing their greater customer life
time value would enhance the profitability of the organization.
Implications of the Study
As this study is restricted to only one category- apparels, it would aidIndian apparel retailers to
develop an adequate proactive plan(s) to retain profitable customers as well as win back (the
profitable) defected customers through valuable insight about repeat purchase behavior and
segmentation of customers on behavioral (loyalty) and profitability basis.
Keywords: Private Labels, RFM, Sensitivity Analysis, CLTV
214
References:
Ailawadi, K. (2001). The retail power-performance conundrum: What have we learned? Journal
of Retailing, 77, 299-318.
Ailawadi, K.L., Lehmann, D.L. and Neslin,S.A. (2003). Revenue premium as an outcome
measure of brand equity. Journal of Marketing, 67(4), 1-17.
Au-Yeung, A.Y.S. and Lu, J. (2009). Development of retailers‟ own label products in Taiwan.
Asia Pacific Journal of Marketing & Logistics, 21(4), 540-554.
Braun, M., Schweidel, and Stein, E. (2015).Transaction attributes and customer valuation.
Journal of Marketing Research, LII, 848-864.
Broyles, S.A., Ross, R.H., Davis, D. and Lengpibul, T. (2011). Customers‟ comparative loyalty
to retail and manufacturers‟ brands. Journal of Product & Brand Management, 20(3), 205-215.
Ferguson, L. (2006). Using private labels credit cards as loyalty tool. Journal of Consumer
Marketing, 23(7), 374-378.
Gooner, R.R. and Nadler, S.S. (2012).Abstracting empirical generalisations from private label
brand research, Journal of Marketing Theory and Practice, 20, (1), 87-104.
Grewal, D. & Levy, M. (2008). Retailing research: past, present, and future. Journal of Retailing,
83 (4), 447–464.
Kamakura, W.A. and Russell, G. (1989). A probabilistic choice model for market segmentation
and elasticity structure. Journal of Marketing Research, 26 (November), 379-390.
Kumar, V. and Reinartz., W.J. (2012).Customer Relationship Management- A data based
approach. Wiley India Pvt. Ltd. Delhi.
Kumar, V., Bhagwat, Y. and Zhang, Xi. (2015). Regaining lost customers: The predictive power
of first life time behavior, the reasons for defection and nature of win back offer. Journal of
Marketing, 79(4), 34-55.
Pappu, R. and Quester, P.G. (2008). Does brand equity vary between department stores and
clothing stores? Journal of Product & Brand Management, 17(7), 425-435.
Winston, L. W. (2014). Marketing Analytics -Data driven Techniques with Microsoft Excel. John
Wiley & Sons, Inc. NJ.
215
Understanding Antecedents of Customer Engagement Behaviour
and Its Relationship with Marketing Metrics
Harmeen Soch1,Priyanka Kaushik2
Department of Management
I K Gujral Punjab Technical Univeristy
Kapurthala, Punjab, India
Email id: harmeensoch@yahoo.com, kaushik.priya90@gmail.com
Understanding Antecedents of Customer Engagement Behaviour
and Its Relationship with Marketing Metrics
Introduction:
In the marketing literature, customer engagement (CE) is considered to be an important
concept defined with a strong behavioural focus (So, King, Sparks and Wang, 2014). Engaged
customers play a vital role in the development of a new product/service (Hoyer et al. 2010),
superior competitive advantage (Van Doorn et. al 2010), and profitability (Brodie et al. 2011).
Customer engagement is specified as a key research priority by the Marketing Science
Institute for the period 2010-2012. Van Doorn et al. (2010) defined “customer engagement
behaviour (CEB) as a customer’s behavioural manifestations that have a brand or firm focus,
beyond purchase resulting from the motivational drivers”. Thus CEB is studied on
behavioural aspects in a customer-to-firm relationship. CEBs encompass value co-creation,
which involves customer participation in the creation of the core offering such as making
suggestions to improve the consumption experience, helping and coaching service providers,
and helping other customers to consume better (Kumar et al. 2010), cognitive, behavioural
and attitudinal consequences for the customers who are engaging in them (Doorn et al. 2010).
Kumar et al. (2010) states that highly engaged customer is more valuable for the company and
provides improved profitability.
The present study proposes that CEB have positive relationship with customer influence value
(CIV) and customer knowledge value (CKV) which have a direct impact on the firm’s value.
Through extensive literature review and primary qualitative research a model has been
conceptualized examining antecedents of customer engagement behaviour and its relationship
216
with marketing metrics namely CIV and CKV. Additionally, the impact of CEB through
metrics on firm’s profitability has also been examined.
Research Gap and Research Problem
Past literature was reviewed and analyzed to find appropriate research gaps for the study.
Theliterature related to various variables examined in the study is discussed as follows:
Customer Engagement Behaviour (CEB) and Customer Characteristics
CEB result in cost advantages for the firm by integrating feedback from the customers for
service improvement (Hoyer et al. 2010). They also affect the attitudinal and behavioural
formation of the customers towards the firm by spreading word-of-mouth (WOM) (Gupta &
Harris 2010). Brodie et al. (2011) emphasized that in order to improve the effectiveness and
efficiency of firm’s efforts, a better understanding of CEB is essential.
Employee Interactions
Previous research depicts that those employees who are in direct contact with customers play
an active role in making customers enthusiastic to become engaged customers (Paswan,
Pelton, and True, 2005). The level of customer engagement is positively influenced by the
attitude of frontline employees (Cambra et al. 2014).
Value Co-Creation
“The customer’s value creation process is defined as a series of activities performed by the
customer to achieve a particular goal.” (Payne et al. 2008). Hoyer et al. (2010) states that cocreation may strengthen consumer-firm relationships and thereby improve customer equity
through delivery of increased value and by increasing the number of connection points
between the firm and consumers.
Word of Mouth
Word of mouth is a non-transactional behaviour depicted by a customer that does not directly
influences the firm’s profitability (Van Doorn et al. 2010). Researchers propound that a series
of delightful experiences may motivate a customer to set up a brand community or engage in
positive WOM which should affect purchase behaviour of focal as well as other customers
and consequently customer equity.
217
Incentives
Customers can also contribute indirectly to profitability through several ways. One such
popular option is by promoting through customer referrals (Kumar, Petersen & Leone, 2007).
Incentivizing existing customers to bring in new customers through customer referral works
well in determining the engagement and profitability of a customer. This is because
incentivizing an unprofitable customer is likely to bring in customers of similar profit
potential who would severely undermining the company’s bottom line.
CEB and Marketing Metrics:
Customer Influence Value (CIV)
Customer influencer value (CIV) is corresponding to customer influencer behaviour through
which customer’s influence on other acquired customers as well as on prospects (Kumar et al.
2010). Kumar et al. 2010 states that CIV stems from intrinsic motivations and can be positive,
negative, or zero due to spread of positive, negative, or no WOM. This reinforces that CIV is
an important determinant in marketing metrics that should be considered by the companies in
formulating strategies that fosters the customer influencer behaviour and expand into
generation of service experiences (Verhoef et al. 2009).
Customer Knowledge Value (CKV)
Customer knowledge value (CKV) is defined as the behavioural manifestation corresponding
to customer knowledge behaviour through feedback which is provided to the firm for
contributing to knowledge development and is motivated extrinsically or intrinsically (Kumar
et al. 2010). Researchers found that CKV is not limited to new product / service creation and
innovation, but also vital to quality / service improvement efforts (Kumar et al. 2010). The
present study proposes to analyze how CIV and CKV are influenced by levels of CEB and
further impacts the firm value.
Customer Engagement Behaviour (CEB) and Firm Value
CEB is a significant variable that has direct bearing on valuation of customers, marketing
metrics and firm values (Kumar et al. 2010). The influence of CEBs on the firm and its
218
components is conceptualized in terms of intensity of impact, breadth of impact, immediacy
and longevity of the impact (Van Doorn et al. 2010). However to the best of researcher’s
knowledge no study has investigated the impact of CEBs measured through CIV & CKV in
context of value co-creation on the firm’s value.
Objectives of the Study:
The objectives of the present study include the following:
1. To examine the impact of customer characteristics (identity, perceived costs and
perceived benefits) on the CEB.
2. To investigate the impact of CEB on the firm’s profitability through marketing
metrics.
3. To examine the moderating role of incentives on the relationship between customer
characteristics and CEB.
Research Methodology:
Data will be collected from 500 respondents using a pre-defined well structured questionnaire
on 5-point likert scale ranging from “strongly agree” to “strongly disagree”. The sample will
be drawn through convenience and judgement sampling. The sample will include the
customers of the retail industry. The survey questionnaire will consist of items that will
measure antecedents of customer engagement behaviour. These items will be based on the
current scales from previous studies. Item analysis will be used to refine the scale items. The
reliability of the scale will be accessed using cronbach alpha. The analysis will be done using
exploratory factor analysis (EFA) followed by confirmatory factor analysis (CFA).
Hypothesis
On the basis of the conceptual framework, we propose the following hypothesis:
Hypothesis 1a: Customer identity has a positive relationship with the CEB.
Hypothesis 1b: Perceived costs and perceived benefits have a direct and significant impact on
the CEB.
Hypothesis 2: The relationship between customer characteristics and CEB is moderated by
incentives.
219
Hypothesis 3a: CEB has a positive relationship with the firm’s profitability
Hypothesis 3b: The customer knowledge value (CKV) and customer influence value (CIV)
have a direct impact on the firm’s profitability.
Conceptual Framework:
Incentives
Customer
Characteristics
Customer Engagement
Behaviour
Marketing Metric
Customer identity
Employee Interactions
Perceived Costs
Value Co-creation
Customer Knowledge
Value (CKV)
Perceived
Benefits
Word of Mouth
Firm’s
Profitability
Customer Influence
Value (CIV)
Findings:
The existing literature provides a thorough grounding for examining the role played by the
antecedents of customer engagement behaviour in influencing the value of the firm. It is
proposed that the various customer characteristics such as perceived costs and perceived
benefits have a significant impact on the customer engagement behaviour. This relationship is
influenced by the incentives that are provided to the customers for enhancing the existing
customer base. Thus, highly engaged customers tend to be more loyal and can be retained.
This implies that incentivising the customers in a right manner would lead to a profitable
customer base.
Implications of the Study:
From a managerial perspective, the research results demonstrate the importance of
understanding how CEB is related to customer knowledge value (CKV) and customer
influence value (CIV). This model provides a means by which firms can strengthen their
relationships with the customers by engaging them with their brand / product / service.
220
Moreover, the model draws attention to the behavioural state of customers through which
customers spread word-of-mouth and create value for the firm and for them also. The present
study will be a unique contribution both for practitioners as well as academicians since it
would help in creating maximum value for the firmby understanding of the phenomenon of
CEB.
References:
Brodie, R. J., Hollebeek, L. D., Juric, B., and Ilic, A. (2011). Customer Engagement:
Conceptual Domain, Fundamental Propositions, and Implications for Research. Journal of
Service Research, 1094670511411703.
Cambra-Fierro, J., Melero-Polo, I., & Vázquez-Carrasco, R. (2014). The Role of Frontline
Employees in Customer Engagement. Revista Española de Investigación en Marketing
ESIC, 18(2), 67-77.
Gupta, P., and Harris, J. (2010). How e-WOM Recommendations Influence Product
Consideration and Quality of Choice: A Motivation to Process Information
Perspective. Journal of Business Research, 63(9), 1041-1049.
Hoyer, W. D., Chandy, R., Dorotic, M., Krafft, M., and Singh, S. S. (2010). Consumer
Cocreation in New Product Development. Journal of Service Research, 13(3), 283-296.
Kumar, V., Petersen, J.A., and Leone R.P., (2007). “How Valuable is Word of Mouth?”
Harvard Business Review, 85(10), 139-146.
Kumar, V., Aksoy, L., Donkers, B., Venkatesan, R., Wiesel, T., and Tillmanns, S. (2010).
Undervalued or Overvalued Customers: Capturing Total Customer Engagement
Value. Journal of Service Research, 13(3), 297-310.
Marketing Science Institute (2010), “Top 2010-2012 MSI Research Priorities”.
Paswan, A. K., Pelton, L. E., and True, S. L. (2005). Perceived Managerial Sincerity,
Feedback-Seeking Orientation and Motivation among Front-line Employees of a Service
Organization. Journal of Services Marketing, 19(1), 3-12.
Payne, A. F., Storbacka, K., and Frow, P. (2008). Managing the Co-creation of
Value. Journal of the Academy of Marketing Science, 36(1), 83-96.
So, K. K. F., King, C., Sparks, B. A., and Wang, Y. (2014). The Role of Customer
Engagement in Building Consumer Loyalty to Tourism Brands. Journal of Travel Research,
0047287514541008
221
Van Doorn, J., Lemon, K. N., Mittal, V., Nass, S., Pick, D., Pirner, P., and Verhoef, P. C.
(2010). Customer Engagement Behavior: Theoretical Foundations and Research
Directions. Journal of Service Research, 13(3), 253-266.
Verhoef, P. C., Lemon, K. N., Parasuraman, A., Roggeveen, A., Tsiros, M., & Schlesinger, L.
A. (2009). Customer Experience Creation: Determinants, Dynamics and Management
Strategies. Journal of Retailing, 85(1), 31-41.
222
TRACK III
223
The Role of Signals in the Success of Products in Auxiliary
Channels of International Markets: The Case of Motion Picture
DVDs
Ashish Sinhai and Renu Emileii
1
Associate Dean Research, UTS Business School, Sydney Australia
(email: ashish.sinha@uts.edu.au)
2
O.P Jindal University, Sonepat, India
Introduction:
In case of ‘experience products’ like movies where there are considerable asymmetries in the
market for information, studios for instance use stars as signals to influence perceptions of
quality and viewership. Extant literature has not only shown the impact of these signals on
box office success but also the varying impact of these signals based on national culture,
thereby pointing to the entertainment industry due to its short product life cycles and highly
skewed information asymmetries to be a fertile ground for understanding the impact of
signals on success of a movie. While significant advancements have been made in
understanding the consumption of motion pictures in both theatrical and auxiliary channels,
the role of signals in the success of motion picture in auxiliary channels of international
markets has not received adequate attention.
Our study combines the recent advances in the cross-cultural research with the literature on
movies to develop and test a novel theoretical framework that provides insight into the role
cultural values play in shaping consumer behavior in this category. Of specific interest is the
relationship between theatrical and non-theatrical channels in the international market context
and the impact of culture on the performance of auxiliary channels. Using movie industry
data from six international markets, we examine the impact of cultural and economic
variables on the international auxiliary channel diffusion process. Borrowing concepts from
the signaling theory literature in marketing, we demonstrate the moderating effect of countryspecific culture on the success-breeds-success effect that is commonly observed in the
primary-auxiliary channel relationships. Finally, we discuss the implications of this research.
224
Background:
Sequential distribution is the process by which products are made more accessible to
consumers via their release in different markets and auxiliary channels sequentially
(Lehmann and Weinberg 2000). Auxiliary channels and sequential markets tend to increase
the product lifecycle (Hennig-Thurau et al. 2006), providing a greater revenue base for the
same product line for an extended period of time.The motion picture industry has widely
adopted the strategy of sequential distribution, particularly in the context of international
markets (Elberse and Eliashberg 2003; Eliashberg et al. 2006). Several studies have
investigated the drivers of the success of movies released in international markets (Elberse
and Eliashberg 2003; Neelamegham and Chintagunta 1999) and auxiliary channels (Lehmann
and Weinberg 2000; Luan and Sudhir 2010). However, studies dealing with auxiliary
channels (e.g., DVDs) have normally focused on US markets and the timing of the product
release (Hennig-Thurau et al. 2006), and the auxiliary sales for international markets have
previously received no attention. Moreover, research has shown that sales of hedonic product
categories such as movies react more sensitively to cultural impacts as well as to contingent
economic conditions (Millan and Reynolds 2011). Surprisingly, however, empirical research
efforts to explore these cultural impacts have been sparse. The cultural elements have been
missing in the studies of auxiliary channels, through which a hedonic product (e.g., DVDs) is
distributed.
Our study focuses on this void of previous research—international auxiliary product
markets—and tries to address some important but yet-to-be resolved issues and questions
from the literature on auxiliary channels for hedonic products. For example, we investigate is
the success-breeds-success phenomenon also present in the international auxiliary channel?
If so, does culture accentuate or attenuate this relationship? Does cultural distance between
the home country (United States) and host countries play a role in the success of the product?
Given the limited understanding about the release of products through international auxiliary
channels such as these, we focus on the impact of cultural variables on motion picture DVD
sales, using unique data across six countries and four continents.
Theoretical Development:
In a sequential distribution system, the channel through which the product is released initially
is defined as the main channel (theatrical channel), whereas the auxiliary channel (DVD) is
the one through which a variant of the product is released after a time lag. To predict the
225
performance of products in an international auxiliary channel, two diffusion processes are
identified: the first process is the diffusion of new products from home to host countries, and
the second process is the diffusion from main to auxiliary channels. Previous literature on the
diffusion of products in international markets posits the effect of the success of a product in
the home country on the success of the same product in the host country (Hennig-Thurau et
al. 2006; Johnson and Tellis 2008; Kogut and Singh 1988). Researchers believe that adopters
in lag markets learn from adopters in lead markets about the performance and quality of the
products (Ganesh and Kumar 1996; Ganesh et al. 1997). Because DVD release follows
theatrical release, consumers of motion picture DVDs can obtain valuable information from
the success of the same movie in the theatrical channel. For an experiential product such as
movies, such information effectively signals the quality of the movie and potentially
influences a consumer’s decision to buy a motion picture DVD. This effect is known as the
success-breeds-success effect; more specifically, the success of products in the home country
leads to the success of the product in host countries, whereas the success of products in the
main channel leads to the success of the product in auxiliary channels. In line with previous
studies (Akdeniz and Talay 2013), we posit the cultural impact, implemented using
Hofstede’s dimensions, on cross-country and cross-channel learning effects (success-breedssuccess).We use the literature in the area of brand equity, specifically the literature on brand
signals, and in particular the consruct of brand credibility (Erdem and Swait 1998; Erdem et
al. 2006) to inform the expected moderating effect of culture on the relationship between box
office revenues and DVD sales. We provide below some examples of the hypotheses that are
tested in the study.
H1(a) Individualism has a negative moderating effect on the relationship between box office
revenues and DVD sales.
H1(b) Uncertainty avoidance has a positive moderating effect on the relationship between
box office revenues and DVD sales.
H1(c) Power distance has a negative moderating effect on the relationship between box
office revenues and DVD sales.
H1(d) Masculinity has a negative moderating effect on the relationship between box office
revenues and DVD sales.
In a similar vein, the hypothesis for the moderating role of cross country success-breedssuccess effects are provided below:
226
H2(a) The greater the cultural distance between home and host country, the lesser the
positive effect of home-country box office revenue on host-country DVD sales.
H2(b) The greater the cultural distance between home and host country, the lesser the
positive effect of home-country DVD sales on host-country DVD sales.
Data and Results:
Data used to calibrate our model and to test the suggested hypotheses set out in the section
above are of DVD markets of Hollywood-based movies from six different countries:
Australia, Japan, Germany, the United Kingdom, the United States, and France. For each of
the countries, OTX research, which is now a part of the IPSOS group, provided us with data
pertaining to the sale of motion picture DVDs in the year 2005 with box office revenues,
genre, distributor, special edition, and the time lag between theatrical and DVD release. The
data set comprises a total of 104 Hollywood movies.
We use a mixed log-log model to test the hypotheses. Our model development is based on the
earlier work by Luan and Sudhir(2010), in which the demand for a particular movie is
modeled as a function of a set of different factors. We model the cumulative unit sales in a
week as a function of certain exogenous and endogenous factors.
The results show that the moderating effects of three of the four cultural dimensions,
individualism (
= -.216, t-values = -2.14), uncertainty avoidance (
1.83), and masculinity (
=.147, t-value =
= -.257, t-values = -3.57), were in the expected direction,
implying that countries that have higher scores for individualism and masculinity and lower
scores for uncertainty avoidance tend to give relatively less credibility to the box office
success of a movie when purchasing DVDs. These results support H1(a), H1(b), and H1(d).
However, the effects of power distance are not significant, showing a lack of empirical
support of H1(c). Our results also show support for H2(a) and H2(b).The coefficients for
success-breeds-success effects across countries are also significant (
2.94). Cultural distance between two countries moderates this effect (
=.316, t-value =
= -.151. t-value = -
2.95), implying that the greater the cultural distance between home and host country,the
lesser the effect of home-country channel success on host-country DVD sales.
227
Discussion and Conclusion:
Our findings paint a picture of moderating effects of culture impacting the success-breedssuccess effects between geographic regions and channels. Cultures that score high on
individualism and masculinity but low on uncertainty avoidance are less likely to be
influenced by the box office success in the host country in their purchase of motion picture
DVDs. Power distance does not have a significant influence on the success-breeds-success
effect between channels. Lastly, the greater the culture distance between the home country
(the United States) and the host country, the less likely the host country’s consumers are to
use the box office and DVD success in the United States as signals of quality. Therefore, we
conclude that culture strongly moderates the cross-country and cross-channel success-breedssuccess effects in the auxiliary channel of the motion picture industries.
References:
Akdeniz, M Billur and M Berk Talay (2013), "Cultural Variations in the Use of Marketing
Signals: A Multilevel Analysis of the Motion Picture Industry," Journal of the Academy of
Marketing Science, 1-24.
Elberse, Anita and Jehoshua Eliashberg (2003), "Demand and Supply Dynamics for
Sequentially Released Products in International Markets: The Case of Motion Pictures,"
Marketing Science, 22 (3), 329-54.
Eliashberg, Jehoshua, Anita Elberse, and Mark AAM Leenders (2006), "The Motion Picture
Industry: Critical Issues in Practice, Current Research, and New Research Directions,"
Marketing Science, 25 (6), 638-61.
Erdem, Tulin and Joffre Swait (1998), "Brand Equity as a Signaling Phenomenon," Journal of
Consumer Psychology, 7 (2), 131.
Erdem, Tulin, Joffre Swait, and Ana Valenzuela (2006), "Brands as Signals: A CrossCountry Validation Study," Journal of Marketing, 70 (1), 34-49.
Ganesh, Jaishankar, V Kumar, and Velavan Subramaniam (1997), "Learning Effect in
Multinational Diffusion of Consumer Durables: An Exploratory Investigation," Journal of the
Academy of Marketing Science, 25 (3), 214-28.
228
Ganesh, Jaishankar and Vipin Kumar (1996), "Capturing the Cross-National Learning Effect:
An Analysis of an Industrial Technology Diffusion," Journal of the Academy of Marketing
Science, 24 (4), 328-37.
Johnson, Joseph and Gerard J. Tellis (2008), "Drivers of Success for Market Entry into China
and India," Journal of Marketing, 72 (3), 1-13.
Kogut, Bruce and Harbir Singh (1988), "The Effect of National Culture on the Choice of
Entry Mode," Journal of International Business Studies, 411-32.
Luan, Y. Jackie and K. Sudhir (2010), "Forecasting Marketing-Mix Responsiveness for New
Products," Journal of Marketing Research, 47 (3), 444-57.
i
ii
Associate Dean Research, UTS Business School, Sydney Australia
O.P Jindal University, Sonepat, India
229
Luxury Value Perceptions in the Indian Market –
A Sub Cultural Context
Authors
Dr. Bikramjit Rishi1, Poulomi Banerjee 2, Sourabh Singh3
1
Associate Professor – Marketing
Institute of Management Technology (IMT)
Raj Nagar, Hapur Road
Ghaziabad – U.P.
India – 201001
Email: brishi@imt.edu
2
Student – PGDM
Institute of Management Technology (IMT)
Raj Nagar, Hapur Road
Ghaziabad – U.P.
India – 201001
Email: ft15poulomibanerjee@imt.ac.in
3
Student – PGDM
Institute of Management Technology (IMT)
Raj Nagar, Hapur Road
Ghaziabad – U.P.
India – 201001
Email: ft15sourabhsingh@imt.ac.in
230
Introduction:
In India, ever since the luxury brands decided to focus on associating their luxury products as
means to seek out feelings of accomplishment, the fad has caught up different ethnic groups
with varied extent. The consumption of luxury products in India is increasing at exponential
level and apart from metros even tier two cities are fuelling up its growth. India is now host
to nearly all the major luxury brands in the world and their portfolio in the Indian market is
now rapidly increasing.
Euromonitor International forecasts that India will achieve the fastest real growth in luxury
goods sales of all emerging markets between 2014 and 2018. The major influencing factors
of this growth are brand awareness, young demographics, rise of income and growth beyond
the metros.1
Wealthy Indians represent a source of enormous potential for global luxury brands. India
would have more than double the number of HNIs to 403,000 by 2015 from 153,000 in 2010
and communication media have put luxury in the public eye. India's luxury market is
expected to reach $14.72 billion by 2015 from an estimated $8.21 billion this year, with about
30% of the customers coming from smaller cities, according to a recent report by
ASSOCHAM and Yes Bank.2
Research Gap and Research Problem:
Weidmann et al. (2009) concluded that word luxury refers to the products or services of a
very high value; however, the researchers indicate that there is no clear understanding due to
the strong involvement, value recognition from others and contextual effects. The perception
of luxury goods depends upon how these goods are perceived by the buyer and significant
others. Vigneron and Johnson (2004) pointed out that purchase and exposition of luxury
goods bring status and esteem to the owner, over and above the functional utility.
Shukla and Purani (2012) perception of luxury is influenced by cross cultural variations.
They also highlight that since developing countries are very sensitive to local differences
managers should take into consideration differences in culture of various ethnic groups.
Apart from the basic factors of individualism (self-directed and other-directed), functionality,
cost and social factors there is another factor namely uniqueness that was found to influence
the perception of luxury. Teah and Phau (2012) found that uniqueness influences the
perception of luxury value.
231
Hennings et al. (2013) there are four factors that can be used to measure cross-cultural
difference in perception of luxury namely financial, functional, individual and social. They
divided the entire population in four clusters each having distinct characteristics based on the
above mentioned values. They found that when country-wise perception is taken into account
there are significant communalities.
Majority of the previous research in the luxury category focused on acquisition of luxury
products (O’ cass and Frost, (2002); Cheah et al (2015)), luxury brand typology (Vigneron &
Johnson, (2004); Christodoulides et al. (2009)), cross cultural comparison of luxury brands
(Dubois et al. (2005), Shukla et al. (2009)) and counterfeits (Teah & Phau, (2012), Doss &
Robinson (2013)).
On the basis of review of literature it is evident that Indian sub cultural context have not been
studied in context to the luxury value perceptions. So this study makes an attempt to
understand the luxury value perceptions from the sub cultural context with a focus on Bengali
consumers.
Objectives of the Study:
The objective of this study is to design and empirically validate a conceptual framework of
luxury value perceptions in sub cultural context of the Indian market.
Research Methodology:
The extensive literature review helped us to design a conceptual framework for the study.
The conceptual framework is shown in Figure 1.
Financial Value Dimension
Functional Value Dimension
Overall luxury
value perceptions
Individual Value Dimension
Social Value Dimension
Figure 1: The conceptual framework for empirical validation
Questionnaire design
232
Design of the questionnaire is based on review of literature. The scaled items to develop the
different constructs have been borrowed from Hennings et al. (2013) and Shukla and Purani
(2012). Each statement was presented on a five point likert scale question where 1 stands for
the strongly disagree and 5 stands for the strongly agree. A forwarding letter duly signed by
the researchers was send with the questionnaire giving the respondent an idea of research
being conducted and requesting the respondents to give full cooperation in filling the
questionnaires.
Sampling
The primary data has been collected by administering the questionnaire to the Bengali
respondents living anywhere in India. Population has been defined by keeping the income
level more than Rs. 15 Lakh per annum which is indicative of the fact that people start
thinking of buying luxury products and services when they have more income or savings.
Bengalis are selected for this study as they are intellectuals, having an eye for quality, many
of them are living abroad and believe in displaying their status.3
The sample population has slightly more males (52%) than females (48%). In terms of age
youth (21 -29) dominates the sample constituting 60% of the total sample population
followed by the age group (30 – 39) with the percentage of 20%. Almost 68% of the sampled
respondents have annual household income between 2 million – 4 million.
Table 1: Demographic Profiling of the Sample Characteristics Summary (N = 325)
Gender
Age
Annual Household
Income
Female
156
Male
169
Total
325
20 or below
NIL
21-29
195
30-39
65
40-49
35
50-59
24
60 or older
6
Total
325
Below 2 Million
26
233
2 Million - 4 Million
221
4 Million and Above
78
Total
325
Data analysis and results:
Reliability test has been carried out to know that the selected constructs are measuring what
they aim to measure. The constructs are identified with the help of factor analysis. For all the
constructs it has been observed that Cronbach Alpha values are well above 0.6 as
recommended by Cavana et al. (2001). The results of the study are presented in Table 2. The
highest value of Cronbach Alpha has been observed for ‘Social Value Dimension’ and the
least Cronabach alpha value has been observed for ‘Overall luxury value perceptions’. The
reliability test has established the internal consistency of the constructs used in this study.
Table 2: Reliability Measures of the constructs
Construct
Cronbach Alpha Value
Financial Value Dimension (FII) – 4
0.763
statements
Functional Value Dimension (FVD) – 4
0.821
statements
Individual Value Dimension(IVD) – 7
0.682
dimensions
Social Value Dimension (SVD) – 7
0.834
statements
Overall luxury value perceptions (LVP) – 5
0.760
statements
We have applied confirmatory factor analysis to validate the model. Statistic minimum was
achieved with a Chi-square value of 256.456 and 231 degrees of freedom. Goodness of fit of
the model is indicated by a high GFI and AGFI score (GFI = 0.943, AGFI = 0.926).Baseline
comparison values also confirmed the model fit (NFI = 0.959, RFI = 0.951, IFI = 0.996 and
CFI = 0.996). Root Mean Square Error of Approximation (RMSEA) value at 0.018 is much
less than the limit of 0.50. These multiple indices establish that the proposed model is a valid
one. The study has found out five factors.
234
To validate the conceptual model we applied the regression analysis. The results of the
coefficient analysis are shown in Table 3:
Table 3: Coefficients
Model
Unstandardized
Standardized
Coefficients
Coefficients
B
(Constant)
1.058
.242
.033
.068
-.106
SVD
IVD
FVD
1
Std. Error
FII
t
Sig.
Beta
4.378
.000
.023
.482
.630
.056
-.095
-1.882
.061
.644
.066
.587
9.760
.000
.174
.055
.201
3.172
.002
a. Dependent Variable: LVP
From the above table it can be concluded that social value dimension and individual value
dimension is having a significant influence on luxury value perceptions of the Bengali
consumers. At the same time financial value dimension and the functional value dimension
do not have an influence on the luxury value perceptions of the Bengali consumers.
Implications of the study:
This research has provided an evidence to understand luxury value perceptions in the Indian
sub cultural context. The findings of the study can help the luxury brand marketers to design
effective marketing strategies to influence luxury value perceptions of the sub culture group
which has been studied in this research. The study also points out that Functional value
dimension and Financial Value dimension are not important. This may be due to the reason
that luxury brands are costly and any consumers who is having the enough money to buy the
same does not perceive the value from the functional and financial angle.
Social value dimension and individual value dimension play the significant role in
determining the luxury value perceptions. It means that Bengali consumers are interested in
displaying their luxury products and they also feel self-gratification from the luxury products.
Marketers can use these findings to design effective communication strategies to
communicate the value of their luxury brands.
End Notes
235
1
http://blog.euromonitor.com/category/luxury-goods, accessed September 23, 2016
http://www.assocham.org/newsdetail.php?id=4848, accessed September 28, 2016
3
http://www.mouthshut.com/blog/dfdiortsr/The-Traits-of-A-Bengali, accessed October 01, 2016
2
References
1. Cavana, R. Y., Delahaye, B. L., & Sekaran, U. (2001). Applied business research:
Qualitative and quantitative methods. John Wiley & Sons, Australia.
2. Cheah, I., Phau, I., Chong, C., & Shimul, A. S. (2015). Antecedents and outcomes
of brand prominence on willingness to buy luxury brands, Journal of Fashion
Marketing and Management, 19(4): 402-415.
3. Christodoulides G, Michaelidou N, Li CH. (2009). Measuring perceived brand
luxury: an evaluation of the BLI scale, Journal of Brand Management, 16(5–6):
395–405.
4. Doss, F., and Robinson, T. (2013). Luxury perceptions: luxury brand vs
counterfeit for young US female consumers, Journal of Fashion Marketing and
Management: An International Journal, 17(4): 424-439.
5. Dubois B, Czellar S, Laurent G. (2005). Consumer segments based on attitudes
toward luxury: empirical evidence from twenty countries, Marketing Letters,
16(2): 115–28.
6. Hennigs, N., Klaus-Peter, W., and Christiane K. (2013). Consumer value
perception of luxury goods: a cross-cultural and cross-industry comparison,
Luxury Marketing, 77-99.
7. O'cass A, Frost H.(2002). Status brands: examining the effects of non-productrelated brand associations on status and conspicuous consumption, The Journal of
Product and Brand Management, 11(2): 67–88.
8. Shukla P, Shukla E, Sharma S.(2009). Conspicuous consumption in cross-national
context: psychological and brand antecedents. Paper presented at the Asia-Pacific
Advances in Consumer Research. Duluth: MN.
9. Shukla, P., & Purani, K. (2012). Comparing the importance of luxury value
perceptions in cross-national contexts, Journal of Business Research, 65(10):
1417-1424.
10. Teah, M. and Phau, I. (2012). Influence of Consumers' Need for Uniqueness on
Attitudes Towards Counterfeiting of Luxury Brands, in Bogomolova, S. and Lee,
R. and Romaniuk, J. (ed), Australian and New Zealand Marketing Academy
Conference, Dec 3-5 2012. Adelaide, South Australia: Australian and New
Zealand Marketing Academy.
11. Vigneron F, Johnson LW. (2004). Measuring perceptions of brand luxury, Journal
of Brand Management, 11(6): 484–508.
12. Wiedmann KP, Hennigs N, Siebels A. (2009) Value-based segmentation of luxury
consumption behavior, Psychology and Marketing, 26(7): 625–51.
236
Conceptualising Cross-Category Brand in Emerging Country
Context: Merging Associative Network Memory Model and
Resource Based View
Ediz Edip Akcayi, Kaouther Kooliii and Elvira Bolatiii
Email: 1ediz.akcay@gmail.com / 2kkooli@bournemouth.ac.uk /
3
ebolat@bournemouth.ac.uk
Bournemouth University
EB501, Executive Business Centre, 89 Holdenhurst Road, Bournemouth, BH8 8EB
Introduction:
Brand alliances between the brands from different categories are increasingly becoming popular
(Smarandescu, Rose and Wedell, 2013). This is particular relevant to the emerging countries
context where multinational brands due to strong impact of cultural and country-specific political
and economic governance policies are establishing cross-category brand alliances with local
brands to gain brand success and customer loyalty. Existing studies investigated cross-category
brand alliances according to the aspects of brand order, consumer ethnocentrism, the country of
origin and brand familiarity. However, these studies primarily incorporate end-user impact
factors in measuring and understanding the cross-category brand alliances performance. Brands
as business perspective is required to understand the impacts of brand resources and attributes on
the cross-category brand alliance. This study focuses on the cross-category brand alliances and
attempts to develop a framework to measure the performance of cross-category brand alliances.
The framework constructs are derived from Associative Network Memory (ANM) Model and
Resource Based View (RBV) theories. The framework is developed by evaluating the interviews
with the marketing managers of brands in the brand alliance case studies from an emerging
country, Turkey.
237
Research gap:
Brand alliances are increasingly investigated by the researchers because of their competitive
advantage potential, complexity and variety of branding considerations. Majority of the articles
focus on the evaluation of brand alliances from the consumer impact perspective measuring brand
order and consumer ethnocentrism (Li and He, 2013), brand familiarity, brand fit and country of
origin fit (Bluemelhuber, Carter and Lambe, 2007). Other studies look into relationship
management aspects of the cross-category brand alliances studying manager’s intentions toward
the alliance (Cavazos and Varadarajan, 2012) and relational conflicts between alliance partners
(Taek, Lee and Dubinsky, 2010). However, these articles do not attempt to develop a model for
the performance of the brand alliance accounting each brand’s holistic contribution to forming
alliance in the form of individual portfolios of resources as well as consumers’ reactions with the
cross-category brand alliance overall.
Aim of the study:
The aim of this study is to explore brand attributes and resources in order to design a model to
show how brand attributes and resources impact the performance of cross-category brand
alliances.
Exploratory field study:
To develop the framework to measure the performance of cross-category brand alliances, the
constructs from ANM model and RBV literature are considered. In order to elaborate and extend
review of the literature, we selected three cross-category international brand alliance examples
(Vodafone, BP and Fiat) in Turkey as cases for this study. Multinational brands from different
categories are chosen as the main partner in the brand alliances for the universality and external
validity of examples. To understand the intentions of building cross-category brand alliances we
conducted face-to-face in-depth interviews and a focus group with marketing managers of the
brands in the alliances. To analyse, consolidate and frame interview results we used NVivo 10.1
software and the framework was developed after the thematic analysis of qualitative narratives..
After preliminary interviews and focus group with the 8 marketing managers from the brands
which formed cross-category brand alliances in Turkey, we found that the practice calls to
238
establish a framework which will measure the performance of the cross-category brand alliances
holistically accounting both business and consumer impacts. Conceptual model below integrates
themes, which occurred in narratives given by our research participants, as well as themes, which
derived from the review of existing research.
Conceptual framework:
Companies use brand extensions, line extensions and different product strategies in order to
decrease the risk of brand development and increase market share (Smarandescu, Rose and
Wedell, 2013). Mundt, Dawes, and Sharp (2006) point that brands have two major marketing
strategies for market share growth: the brand can improve the revenue share of existing
consumers or they can attract new customers from the market which are already buying other
brands. Instead of extensions within the brand family, companies turn to brand alliances which
are defined as “the short or long term association or combination of two or more individual
brands, products and/or other distinctive proprietary assets” (Abratt and Motlana, 2002, p. 43).
Different than new brand introduction or brand extensions, there are various benefits of brand
alliances like quality and image endorsements and brand association partnership for new products
(Li and He, 2013).
Brand alliance can be in the form of co-branding, ingredient branding, brand collaboration, comarketing alliances (Ahn, Kim and Forney, 2009) or basic advertising alliances (Bluemelhuber,
Carter and Lambe, 2007) and cross-category advertising brand alliances (Smarandescu, Rose and
Wedell, 2013). Ahn, Kim and Forney (2009) investigates the harmony in the co-marketing
alliances between heterogeneous industries. They point that co-operation of two equal and
independent brands in a co-marketing alliance is different than the usual brand extension or
alliance. The alliance between different industry brands gives the chance to enhance the brand
image, brand awareness and commercial success of the companies. The transnational comarketing alliances between global and local companies can be used to increase opportunities for
global brands in local markets while they provide the local companies access to technology and
foreign investment. In addition to expected benefits such as quality signal, transnational brand
alliances help the international brands to enter new markets easier (Li and He, 2013). Despite the
prospects of success, choice of wrong partner can lead to negative association, misunderstanding
and even corrosion of original brand image (Ahn, Kim and Forney, 2009). The alliance strategy
239
should be executed carefully to avoid hurting brands. As a result, brand fit and category fit
between the partner brands are important characteristics that influence the success of the alliance.
Brand alliance is a strategic tool in achieving development and growth targets, increasing brand
awareness and knowledge thanks to the leveraged strengths of partners and shared costs (Samu,
Krishnan and Smith, 1999). RBV brings traditional strategy insights into reasons why brands are
forming alliances. Companies continuously seek the rate of return and try to create a competitive
advantage to generate above standard rates of return (the differences in information, luck and
capabilities lead to the generation of rates of return). The brands can increase the chances of
competitive advantage by forming an alliance (Hao, Hu, Bruning and Liu, 2013) to share
information and capabilities. Hence, integrating RBV perspective into examining the crosscategory brand alliances is paramount to ensuring holistic understanding of what brands gain
from forming this type of alliances.
From the ANM model perspective a set of nodes with relational links constitute consumer
memory (Ozsomer and Altaras, 2008). Nodes represent product categories, brand names,
attributes and product benefits. A unique name identifies the connection and the relationship
between nodes. A person establishes a link between two nodes when information is processed in
a meaningful way. Direct or indirect stimulus can activate the link between two nodes by
stimulating the node from a state of rest (Samu, Krishnan and Smith, 1999). In the brand alliance
perspective product categories, brand names and attributes are symbolised as network model
nodes (Samu, Krishnan and Smith, 1999). According to brand extension literature, the
consumer’s current knowledge about a parent brand can be extended to new products with the
identical brand name through an associative network process. There are no clear assumptions in
brand extension research if the linked brands in a marketing communication have the same
associative network model implications for their separate memory nodes (Smarandescu, Rose and
Wedell, 2013). Thus, the brand associations that are created in a cross-category brand alliance
should be examined to understand the implications on the value, image and equity of the brands
in the alliance.
For instance, according to Bluemelhuber, Carter and Lambe (2007) consumer attitude toward
cross-border brand alliance is influenced by country of origin fit varying on the conditions of
brand familiarity. In addition, Li and He (2013) found that consumer ethnocentrism and brand
240
order in the alliance moderate the impact of consumer attitude towards the brand alliance. They
also point that future research should examine their model on real brand alliances for external
validity and realism (Li and He, 2013).
As a result of the above discussion and analysis of pilot set of interviews and focus group
discussions, in the conceptual framework (Figure 1) we have integrated (1) the brand attributes of
credibility, brand image and awareness, derived from ANM model, and (2) market share of the
brand, taken as the variables that constitute the resource portfolio of the partner brands from
different categories. When the brands come together for the brand alliance their combined
resources comprise the cross-category brand alliance resource portfolio. The success and
performance of the alliance depend on the relations of brand resources on the alliance portfolio.
Brand fit and category fit are the variables that moderate the performance of cross-category brand
alliance.
Figure 1: Conceptual Framework
The propositions below have derived from the literature review and analysis of exploratory field
study of marketing managers of case study brands.
P1: Credibility, brand image, brand awareness and market share of the partner brands
have impact on the performance of cross-category brand alliance.
241
P2: Brand fit between the partner brands moderate the success of cross-category brand
alliance.
P3: Category fit between the partner brand categories moderate the success of categorybrand alliance.
Research implications:
The research contributes to existing literature by proposing a model that incorporates associative
network memory model and resource based view theories to explain the factors that have impact
on the cross-category brand alliances. Case study examples from Turkey will help to examine
real life examples of brand alliances rather than using hypothetical brand alliances as in previous
researches. Also, previous research did not attempt to develop a model to measure the success of
cross-category brand alliances by using brand attributes and brand resources. The model will help
marketing managers to decide on the resources and partners they facilitate for the success of their
brand alliances.
References:
Abratt, R., & Motlana, P. (2002). Managing co-branding strategies: Global brands into local
markets. Business Horizons, 4543-50.
Ahn, S., Kim, H., & Forney, J. A. (2009). Co-marketing alliances between heterogeneous
industries: Examining perceived match-up effects in product, brand and alliance levels. Journal
Of Retailing And Consumer Services, 16, 477-485.
Bluemelhuber, C, Carter, L, & Lambe, C. (2007). Extending the view of brand alliance effects.
International Marketing Review, 24, 4, pp. 427-443.
Cavazos, C., & Varadarajan, R. (2012). Manager's intentions toward entering into strategic
marketing alliances: an empirical investigation. Journal of Strategic Marketing, 20(7), 571-588.
Hao, A. W., Hu, M. Y., Bruning, E. R., & Liu, X. (2013). The Impact of Congruity and Country
Image on Global Brand Alliance Evaluation. Journal Of International Consumer
Marketing, 25(2), 107-123.
Li, Y., & He, H. (2013). Evaluation of international brand alliances: Brand order and consumer
ethnocentrism. Journal Of Business Research, 66, (1)Thought leadership in brand management
(2)Health Marketing), 89-97.
Mundt, K., Dawes, J., & Sharp, B. (2006). Can a brand outperform competitors on cross-category
loyalty? An examination of cross-selling metrics in two financial services markets. Journal Of
Consumer Marketing, 23(7), 465-469.
Ozsomer, A., & Altaras, S. (2008). Global Brand Purchase Likelihood: A Critical Synthesis and
an Integrated Conceptual Framework. Journal Of International Marketing, 16(4), 1-28.
242
Samu, S., Krishnan, S., & Smith, R. E. (1999). Using Advertising Alliances for New Product
Introduction:
Interactions
Between
Product
Complementarity
and
Promotional
Strategies. Journal Of Marketing, 63(1), 57-74.
Smarandescu, L., Rose, R., & Wedell, D. H. (2013). Priming a Cross-Category Brand Alliance:
The Moderating Role of Attribute Knowledge and Need for Cognition. Psychology &
Marketing, 30(2), 133-147.
Taek Yi, H., Lee, J., & Dubinsky, A. J. (2010). An Empirical Investigation of Relational
Conflicts in Co-Marketing Alliances. Journal Of Business-To-Business Marketing, 17(3), 249278.
Bournemouth University, Bournemouth
Bournemouth University, Bournemouth
iii
Bournemouth University, Bournemouth
i
ii
243
Cultural Symbolisms in Brand Names
Hui Gaoi, Chunlin Duanii
1
Email:37686808@qq.com
1
South China University of Technology, Higher Education Mega Center, Guangzhou, China
2
South China University of Technology, Higher Education Mega Center, Guangzhou, China
Introduction:
In current marketing literature, there is a stream of research, which examines the effects of
foreign branding versus local branding (Harris et al. 1994, Leclerc et al. 1994, Thakor &
Pacheco 1997). Foreign branding refers to branding a product with a name that sounds or
looks “foreign” in light of local languages or local branding practices, while local branding
refers to branding a product with a name in compliance with local language characteristics or
local branding practices (Li & Murray 1998). The notion of foreign branding and local
branding is to trigger cultural stereotypes by brand names. Leclerc et al. (1994) showed that
the French pronunciation of a brand name affected the perceived hedonism of products and
attitudes toward the brands despite the presence of direct sensory experience.
Like Western brands in Chinese markets, some Chinese brands have both an English name
and a Chinese name translated according to its English name‟s pronunciation. Gu (2007)
investigated 146 Chinese clothing brands and found 46.6% of them having Western brand
names. In contrast to those foreign branding practices, some Chinese brands choose to look
more traditional, with names and logos representing traditional Chinese culture, e.g. usually
have positive or auspicious meanings and contain 3 Chinese characters. Figure 1 shows some
examples of two kinds of brand names. One of them is Yangshengtang (top right), established
in 1993, successfully “emphasized the Chinese cultural values of filial loyalty, care for family,
and respect for the elderly, thus created a strongly emotional positive image” (Zhou & Belk
2004).
Figure 1. Examples of Western Branding and Traditional Chinese Branding
244
Western branding
traditional Chinese branding
Research Gap and Research Problem:
Based on the same notion of triggering cultural stereotypes through brand names, Western
branding employs Western cultural meanings, while traditional Chinese branding uses
traditional Chinese cultural meanings. But how those cultural meanings affect consumers‟
reactions? What is the underlying psychological mechanism? This article argues that Chinese
consumers make different inferences from cultural values conveyed by brand names to
address their basic needs for nurturance and security. Their orientations and motivations are
related to two distinct goals highlighted in regulatory focus theory.
Objectives of the study:
Because most global businesses originated in Western developed countries, global brands
often embody Western social-moral values such as individuality, freedom, immediate
gratification and hedonism (Chiu et al.,2011). For consumers in developing or transitional
economies, such as in China, foreign or Western products are associated not only with images
of high quality but also with symbolic and status-enhancing values (Batra et al., 2000).
Research has shown that Western cultural symbolisms represent higher perceived quality
(Steenkamp et al., 2003), higher prestige and status (Kapferer, 1997), modernity and fashion
(Friedman, 1990; Eckhardt & Houston, 2002), strong ideals (Wilk, 1990), and the
membership of an international consumption culture (Dawar & Parker, 1994).
245
Although Western culture has a great impact on Chinese consumers, local culture is not
replaced but exists as a ubiquitous variable influencing consumers‟ preference (Ger et
al.,1993). Ger (1999) proposed that by using local culture, local brands could provide
authentic and credible products. Zhou & Belk (2004) found that both Western and traditional
Chinese cultural symbolisms have parallel attractions to Chinese consumers. In Chinese
traditional culture, Confucianism puts emphasis on the values of responsibilities and
obligations, while Taoism focuses on the values of health-preserving, self-protection, and
human and nature. These values combined convey the notion of avoiding negative effects,
addressing Chinese consumers‟ needs for obligations and safety. Chinese consumers have
both needs for dreams and safety (Doctoroff, 2008), which could be addressed according by
Western and traditional Chinese cultural symbolisms in brand names.
Regulatory Focus Theory (Higgins, 1997, 1998) distinguishes between two major categories
of desired goals: promotion goals that relate to attaining positive outcomes such as ideals,
achievement, and aspirations, and prevention goals that relate to avoiding negative outcomes
such as responsibilities, obligations, and duties. According to regulatory focus theory (Higgins
1997, 2000), individuals with a prevention focus regulate their attitudes and behaviors to
attain safety and security, whereas those with a promotion focus regulate their attitudes and
behaviors to attain growth and achievement. Thus, we propose that for Chinese consumers,
H1: Chinese consumers make different associations with Western and traditional Chinese
cultural symbolisms in brand names. Comparatively speaking, Western brand names will give
brands a sense of a shorter history but also an image of modernity and fashion; while
traditional Chinese brand names will give brands a sense of a longer history but also a more
traditional and classic image.
H2: Regulatory focus will moderate the brand name effects on Chinese consumers‟
perceptions and attitudes toward brands. More specifically, Promotion-focused Chinese
consumers will have more positive perceptions and attitudes toward the brand names with
Western cultural symbolisms. In contrast, prevention-focused Chinese consumers will have
246
more positive perceptions and attitudes toward the brands names with traditional Chinese
cultural symbolisms.
Cultural symbolisms in brand names are also involved with the construct of ethnocentrism,
which describes the tendency to reject people who are culturally dissimilar and at the same
time to favor those who are more like themselves (Batra et al., 2000). Research in the US,
Western Europe and China showed consumers who scored high on ethnocentrism were indeed
more favorably biased toward buying local products and more opposed to buying products
manufactured in other countries (e.g. Shimp & Sharma,1987; Netemeyer et al., 1991; Wang,
2003). Wang (2003) found that ethnocentrism were positively related to Chinese consumers‟
attitudes and purchase intention for domestic products, and were negatively related to their
attitudes and purchase intention for foreign products. Thus, the article will also test whether
Consumer Ethnocentrism Tendency (CET) contributes to the brand name effects. The article
argues that it is impossible for CET to moderate brand name effects as regulatory focus could
possibly do, since CET can only predict a main effect that Chinese consumers high on CET
would prefer traditional Chinese brands, while consumers low on CET would prefer Western
brands. Thus, the article produces a hypothesis as such,
H3: CET will not moderate the brand name effects on Chinese consumers‟ perceptions and
attitudes toward the brand.
Research methodology:
A 2 (regulatory focus: promotion- focused vs. prevention-focused) × 2 (brand name: Western
vs. traditional Chinese) between-group experiment was run. Sixty college students (53.3%
men, average age 21) participated in for a pay of 10 yuan. Subjects were told to start with a
survey on college students‟ attitudes toward life followed with a taste test for a purified water
brand. No subject had any doubt about the relations of the two tests. The first survey was a
regulatory focus priming process as Higgins et al. (1994) primed subjects with either a
promotion or a prevention focus. Participants in promotion- focused prime were asked to
write three hopes and aspirations while participants in prevention-focused condition were
247
asked to write three responsibilities and obligations. After that, every subject drank a cup of
purified water while they read a piece of colored advertisement. And then they were asked to
evaluate the product on taste and quality, product liking; evaluate advertisements on liking;
and evaluate brands on history, modernity, familiarity, price and class. Finally, they responded
to some miscellaneous questions, including 4 items measuring their degree of ethnocentrism
used by Batra et al (2000).
Data analysis and results:
The article continued free association analyses. Words such as “tradition”, “history” were
coded as -1, while words such as fashionable” or “modern” were coded as 1 (Kappa =0. 91,
disputes resolved through consultations). The following ANOVA analysis showed there was a
significant main effect of brand names on perceptions (F(1,58) = 31.05, p<0.001). Yunfutang
was more associated with words related to tradition (M =-0.59) and 62.1% subjects had such
associations; while EVS was more associated with words related to fashion (M =0.23) and 29%
subjects had such associations. Then a 2(regulatory focus) ×2(brand name) ANOVA analysis
on brand perceptions of history and modernity showed there was a significant main effect that
traditional Chinese brand had a longer brand history (M=3.26 vs. M=2.13, F(1,56)=7.80,
p<0.01), while Western brand was thought more modern (M=3.78 vs. M=2.40, F(1,56)=26.70,
p<0.001).
A 2(regulatory focus) ×2(brand name) ANOVA analysis on taste and product preference
showed no significant differences, F<1. The results made sense because subjects had a similar
feeling toward the same water they drank. But interestingly, there were significant interactions
of regulatory focus and brand names on product perceived quality(F(1,56)=5.55, p< 0.05),
advertisement attitude(F(1,56)=3.13, p<0.1) and brand familiarity(F(1,56)=3.88, p=0.05).
Contrasts showed that prevention-focused subjects felt traditional Chinese brand had a higher
perceived quality than Western brand (M=4.64 vs. M=3.75, t(56)=2.08 , p<0.05);
promotion-focused subjects showed a reverse pattern for two brands(M=4.07 vs. M=4.60),
but the result didn‟t reach significance (p=0.22). As for ad attitude, there was a marginally
significant main effect (F(1,56)=2.94, p<0.1) with Western brand advertisement better
248
evaluated (M=3.46 vs. M=2.94). But the main effect was corrected by a significant interaction.
Contrasts showed that promotion-focused subjects thought Western brand ad was better
(M=3.80 vs. M=2.73,t(56)=2.46,p<0.05); but prevention-focused subjects had no difference
on preference for the two ads, t<1. For brand familiarity, contrasts showed that although two
brand names were not real, but promotion-focused subjects still felt Western brand more
familiar (M=1.87 vs. M=1.33,t(56)=1.74,p<0.1); though prevention-focused subjects had a
reverse pattern (M=1.57 vs. M=1.25), the result wasn‟t significant. For brand price and class
perception, there was no significant main effect or interaction. But promotion-focused
subjects thought Western brand had a higher price and a higher class (M=4.27 vs. M=3.40
t(56)=1.78,p< 0.1). Four measures of CET were averaged into an index (α=0.80). There was
no significant difference of regulatory focus on the index (M = 3.10 vs. 2.98; F<1).
Implications of the Study:
The study gave evidence that Western and traditional Chinese names did induce
culture-related associations and affect consumers‟ perceptions and attitudes, especially on
perceptions of brand history and modernity. The study also supported the hypotheses on the
underlying psychological mechanism of brand name effects. Though subjects knew that they
were having the same water (no differences on taste evaluations and product attitudes), the
interactions of brand names and regulatory focus on perceived quality, ad attitude and brand
familiarity were still significant. This showed a very strong moderating effect of regulatory
focus on brand name effects.
References:
Batra, R., Ramaswamy, V., Alden, D. L., Steenkamp, J. B. E. M., & Ramachander, S. (2000).
Effects of brand local and nonlocal origin on consumer attitudes in developing countries.
Journal of Consumer Psychology, 9, 83-95.
Doctoroff, T. (2008). Hundreds of Millions of Markets: Insights into China's Emerging
Consumers. Shanghai: Oriental Publishing Center
Eckhardt, G. M., & Houston, M. J. (2002). Cultural paradoxes reflected in brand meaning:
McDonald‟s in shanghai, china. Journal of International Marketing, 29, 68-82.
249
Ger, G. (1999). Localizing in the global village: local firms competing in global markets.
California Management Review, 41, 64-83.
Higgins, E. T. (1997). Beyond pleasure and pain. American Psychologist, 52, 1280–1300.
Leclerc, F., & Dubé, L. (1994). Foreign branding and its effects on product perceptions and
attitudes. Journal of Marketing Research,31, 263-270.
Li, Z. G. & Murray, L. W. (1998).Should you use foreign branding in china? an exploratory
study. American Marketing Association,9, 233-241.
Shimp, T. A., & Sharma, S. (1987). „Consumer ethnocentrism: construction and validation of
the CETSCALE‟. Journal of Marketing Research, 24,280-289.
Steenkamp, J. B. E. M., & Alden, D. L. (2003). How perceived brand globalness creates
brand value. Journal of International Business Studies, 34, 53-65.
Wang, H. (2003). Consumer ethnocentrism: an empirical test in china and its marketing
managerial implications. Nankai Business Review, 6, 31-36.
i
ii
South China University of Technology, Higher Education Mega Center, Guangzhou, China
South China University of Technology, Higher Education Mega Center, Guangzhou, China
250
Moderating Influence of Face-Work on Culture and Behavioral
Intention towards Counterfeit Products
Dr.Sunpreet Kaur Sahni, 1 and Laxmi Roy Singh2
1
Guru Nanak Institute of Management Technology Ludhiana
Gujar Khan Campus,Gujarkhan Road, Model Town,
Ludhiana,Punjab. (India) 141002
E-mail id: sunpreetkaursahni@gmail.com
2
I.K Gujral Punjab Technical University
Near PushpaGujral Science City,Ibban, Kapurthala, (India) 144603
E-mail id: laxmi2007roy@gmail.com
Introduction:
The term „counterfeit‟, denotes as manufacturing and trade of imitation products that are replica
of the original brand of product, has emerged as a growing problem in global business over the
past years (Penz and Stottinger, 2008). Prior studies have revealed that incomprehending
consumer behavior, culture plays a pivotal role (Jiang, 2014). Nevertheless, majority of the
documented literature has investigated various dimensions pertaining to the attitude towards
counterfeit products (Sharma and Chan 2010; Mir 2012; Koklic 2011; Hanzee and Taghipourian
2012; Michaelidou and Christodoulides 2011), personality factors facilitating in the willingness
towards purchase (Swami, et al 2009), effect of materialism (Cheung and Prendergast 2008;
Furnham and Valgeirsson 2007). It has been witnessed that there has been an augmented
attention, where there has been a substantial influence of the culture on the consumer behavior,
in the recent years. (Mooji and Hofstede, 2011).
Research Gap and Objectives of the Study:
The usage of counterfeit products can be found all around the world. The trade of counterfeit
products has grown with a massive change in figures and covers various products. However,
251
scant literature has focused pertaining to the moderating impact of face-value on the cultural
dimensionsin the purchase intention towardscounterfeit products.Lack of empirical evidence
related to the association between counterfeit products and culture, face-value acting as an
external variable, especially in the Indian setting, has given a probable reason to explore further.
The conceptual framework is outlined by exploring extant literature, where numerous
independent and dependent variables are assumed to be the rationale behind the framework. The
study will investigate the following research questions:
1) To explore how the dimensions of uncertainty avoidance, power distance, collectivism
and masculinity/ femininity are moderated by face-work leading to behavioral intention
towards counterfeit products.
2) To investigate the inter-relationship of aforementioned dimensions.
3) To identify the probable research gaps existing in the literature.
Conceptual Framework:
Culture establishes the widest impact on the human behavior. Mole (2003) opines that culture is
a system that aids individuals as well as groups in dealing with each other and the external
world.Hofstede (1991) delineates culture in terms of four dimensions: power distance,
individualism
versus
collectivism,
masculinity
versus
femininity,
and
uncertainty
avoidance.Hofstede‟s cultural dimensions have been referred for the study. The model introduces
the dimensions of power distance, collectivism, masculinity versus femininity, and uncertainty
avoidance being moderated by face work and eventually leading to the establishment of
behavioral intention towards counterfeit products.
The dimensions are discussed below:
Behavioral intention: The term behavioral intention is defined as the perceived probability of a
person to get indulged in a given behavior. Intentions symbolizean individual‟s drive while
struggling to show a certain behavior. According to Penz and Stottinger (2005) intentions have
an impact on the behavior of an individual. Thus, it becomes imperative to locate the factors
influencing theconsumers‟ intention.
252
Power distance:It refers to the extent by which the less powerful associates of organization
accepts and expects that there is an unequal distribution of power (Hofstede, 1991).Large power
distance societies easily accept the open trade of illicit goods and the flaunting of capital (Ribeiro
and Santos, 2006).
Collectivism:Is defined as “people belonging to a clan that take care of them in exchange of
faithfulness” (Mooji and Hofstede 2011). Teah and Phau (2007) regard collectivism to be one of
the major factors in the Asian societies, contributing in forming a positive attitude among
consumers towards counterfeit products. Collectivist societies are predicted to be users of these
products, in order to convey the status of group memberships (Ribeiro and Santos, 2006).
Masculinity /Femininity: Masculine society is delineated as one, with achievement and success,
as their dominating values. In contrast, feminist society is demarcated with the values of caring
for others and quality of life as their ruling values (Mooji and Hofstede 2011). Whereas, Ribeiro
and Santos (2006) opine that the main focus of masculine societies is on assertiveness,
domination and high performance, while, feminists are more concerned about people rather than
money.
Uncertainty avoidance: is characterized as the degree of threat felt by people for the uncertainty
and ambiguity,and thus, attempt to avoid these situations (Mooji and Hofstede, 2011). Countries
with high uncertainty avoidance buy products to retain affiliation with the group and views
innovations as an outcome from powerful and wealthy people (Ribeiro and Santos, 2006).
Face-work:It viewed as an individual‟s public self-image (Merkin, 2006). Ting-Toomey (1988)
define face is an identity which is jointly defined by the participants involved and the settings.
However, face-work is termed as the activities done by people to keep their actions constant with
face (Goffman, 1967). In addition, Taormina and Chong (2010) established a positive
relationship of face-work with the purchase of counterfeit products.
253
Figure 1: Conceptual framework pertaining to the behavioral intention towards counterfeit
products
Research Methodology:
As our study is in the nascent stage, a theoretical framework has been designed on the basis of
the documented literature. The data will be analyzed using various methods of reliability and
validity techniques. The conceptual model will be further empirically tested by using regression
analysis, where - power distance, collectivism, masculinity/ femininity and uncertainty
avoidance will be taken as independent variables, moderated by face work and the behavioral
intention towards counterfeit products will be taken as a dependent variable. The extant literature
has been referred and the prior literature has been integrated below:
254
Assimilation of the Documented Literature:
S.No. Author
1.
Year
Hwang,
Francesco
and 2003
Kessler
Dimension
Outcome of the Study
Individualism/
It
collectivism
face-work
was
found
that
as
usual
and individualism was having a positive
relationship with face. However, the
relationship between collectivism
and fear of losing face was showing
mirror effect.
2.
Wang,
Zang
Zhang, 2005
Collectivism
and
influence
Ouyang
3.
Santos
Research results show appositive
of
collectivism
on
consumers‟ attitude.
and 2006
Ribeiro
Power
distance, The study examined the influence
uncertainty
of Hofstede‟s dimensions on the
avoidance,
attraction
masculinity/
counterfeiting among countries of
femininity
collectivism
of
and European
union.
international
Low
power
distance, low uncertainty avoidance
and
low
identified
individualism
as
the
were
characteristic
profile of counterfeiter country.
4.
Ki, Chang and 2006
Individualism and It was found that individualism and
Khang
collectivism
collectivism, as an influential factor
on music piracy rate, was not found
to be supported in this study.
5.
Merkin
2006
Uncertainty
The
study
analyzed
whether
avoidance and face Hofstede‟s uncertainty avoidance
work
dimension of culture in pivotal
predictor of national difference. The
results elucidates that uncertainty
avoidance has a positive influence
255
on
face
work
communication
strategies.
6.
Teah, Min and 2007
Collectivism
Phau
As per the results, collectivism was
found
to
have
relationship
no
with
significant
purchase
intention.
7.
Merkin
2007
Power distance and Research results elucidates that
face work
members of large power distance
culture uses more strategies of face
work in order to manage face
threats than those of small power
distance culture.
8.
Merkin
and 2010
Face
work
Hofstede‟s
Ramadan
dimensions
culture
and The study investigated the influence
of culture on face work used in
of response
to
embarrassing
face
threats in Syria and US. It was
evident from study that US uses
more direct strategies of face work.
Also, US face work strategies
corresponds to more individualistic,
weak power distance, masculine
and
low
uncertainty
avoidance
culture.
9.
Taormina
and 2010
Face work
Chong
As per the results of study face
work have a significant positive
correlation with the purchase of
counterfeits.
10.
Sabir,
Ahmed 2013
Collectivism
and Razzaq
The study revealed that collectivism
significantly influences consumer
complicity.
256
Implications of the Study:
This study is aninimitable initiative as no study has explored the dimensions in
totality,particularly in the Indian context, thus, creating research gaps. This study will facilitate
the marketers to comprehend the degree of face-value having an influence on the cultural values,
resulting to purchase intention. From a theoretical perspective, the research contributes in
enlightening the marketers, will offer a platform to frame their targeting, positioning and
marketing communication strategies, from the Indian perspective.
References:
Hofstede, G. H. (1991). Cultures and organizations: software of the mind.McGraw Hill,London.
Hwang, A., Francesco, A. M., and Kessler, E. (2003) The Relationship Between IndividualismCollectivism, Face, and Feedback and Learning Processes in Hong Kong, Singapore, and The
United States. Journal of Cross-Cultural Psychology; 34(1): 72-91.
Jiang, L. (2014). Call for Copy- The culture of counterfeit in China. Journal of Chinese
Economics; 2 (2): 73-78.
Ki,E.J., Chang, B.H and Khang, H. (2006), “Exploring Influential Factors on Music Piracy
Across Countries, Journal of Communication; 56(2): 406-426.
Merkin, R, S. (2006) Power Distance and Facework Strategies. Journal of Intercultural
Communication Research; 35(2): 139-160.
Merkin, R., and Ramadan, R. (2010) Facework in Syria and the United States.A cross-cultural
comparison. International Journal of Intercultural Relations; 34(6): 661–669.
Merkin R, S. (2006) Uncertainty avoidance and facework: A test of the Hofstede model.
International Journal of Intercultural Relations; 30(2): 213–228.
Mooij, M.D., and Hofstede,G. (2011). Cross-Cultural Consumer Behavior: A Review of
Research Findings.Journal of International Consumer Marketing; 23(3-4):181-192.
Sabir,R.I., Ahmad, W. andRazzaq, A.S. (2013). Factors Affecting Consumers‟ Complicity
Towards Counterfeit Mobile Phones in Pakistan. Middle-East Journal of Scientific Research; 18
(1):68-74.
257
Santos, J.F., and Ribeiro, J.C. (2006). An exploratory study of the relationship between
counterfeiting and culture. Polytechnical Studies Review; 3(5-6): 227-243.
Taormina. R, J., and Chong, K., Y. (2010) Purchasing Counterfeit and Legitimate Products in
China: Social and Psychological Correlates and Predictors.Journal of East-West Business; 16(2):
118-145.
Teah, M., and Phau, I. (2007). The influence of information susceptibility, normative
susceptibility and collectivism on attitudes towards counterfeiting of luxury brands, in Maree
Thyne, Kenneth Deans and JuergenGnoth. Australian and New Zealand Marketing Academy
Conference;1136-1143.
Zhang, H., Zang, H., and Ouyang, M. (2005) Purchasing Pirated Software: An Initial
Examination of Chinese Consumers Fang Wang. Journal of Consumer Marketing; 22(6): 340–
351.
258
Tracing the Retail Transition in India
Madhu Mithai and Shivendra Kumar Pandeyii
1
Contact- fpm02.005@iimrohtak.ac.in
2
Contact- sk.pandey@iimrohtak.ac.in
Indian Institute of Management, Rohtak
1
2
Indian Institute of Management, Rohtak
IntroductionAs of 2016, Indian retail is estimated to be 630 Billion USD (Singhi, Mall, & Puri, 2016).Retail
sector revenues are around 25% for India, while for most developed markets, it is only 15-20%
of overall GDP (Singhi et al., 2016). India has over 1.6 crore retail shops- one for every 15
families, and employs around 2.7 crore people (Varma, 2016) and is the most over retailed
country in the world.
The retailing scenario is slowly changing in India from unorganized retail to organized retail. An
unorganised retail store is defined as an organization of one or more stores which are small in
size, offer mostly behind the counter service, manned by the sole proprietor, encompassing a
range of formats- from semi-permanent or mobile infrastructure at one end to permanent shops at
the other end. It includes push carts, kirana stores, wet markets, paan shops etc. Organised retail
stores are retail stores which are large-scale chain stores and are corporatized, apply modernmanagement techniques and are very likely to be self-service in nature.
According to the 2016 Global Retail Development Index, India ranks second among 30
developing countries on the ease of doing business (Press Trust of India, 2016a). This makes
India an attractive site for global retailing giants.
259
Research gap and research problem:
Despite India’s ability to attract global retailers, FDI in retail has not been opened until recently.
Though most South Asian countries are undergoing similar transitions, they remain understudied
despite their significance. On the contrary, relatively more attention has been paid to Southeast
Asian countries like Malaysia (Ahmad et al., 2008), Thailand (Gorton, Sauer, & Supatpongkul,
2011), Indonesia, and Philippines. Studying the evolution of FDI in India is necessary to obtain a
historical perspective aiding in a holistic point of view and its detailing impact on the
stakeholders aids the government in informed policy making.
Objectives of study:
The objectives of this study are twofold. Firstly, this study aims to shed light on the highly
significant yet understudied phenomenon of retail transition in India. Secondly, this study details
the impact of retail transition on various stake holders and suggests recommendations to regulate
organized trade with minimal adverse impact on the stake holders.
Research Methodology:
A historical perspective on India’s retail transition is obtained from extant literature. Based on
the impact of retail transition on stakeholders in Southeast Asian countries (such as Thailand,
Malaysia, Indonesia etc) the possible impact on the stakeholders in India is also indicated.
Data analysis and resultsObjective 1- Evolution of FDI in Retail in India:
FDI was first allowed in India in the cash and carry, wholesale format in 1997 by the United
front government (ET Bureau & Agencies, 2011). After this, 51% FDI was allowed in single
brand retail in January, 2006 by the United Progressive Alliance (UPA), a coalition headed by
the Indian National Congress.
The government put a discussion paper in the public domain in 2010, to engage the public and
other stake holders and create an environment in which FDI in retail was possible. It proposed
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FDI in multi brand retail subject to conditions such as investment in backend infrastructure like
warehousing and cold storage (Hindu 24). Despite the willingness of the opposition party to
engage in a discussion, the paper was met with opposition by state level trade associations.
The union Cabinet approved 51% FDI in multi brand retail in 2011. FDI in multibrand retail was
subject to many conditions such as minimum investment of $100 million out of which 50% has
to be invested in back end infrastructure such as cold chain, ware house etc and procurement of
30% of products from small scale industries (Mehdudia, 2011). After intensified protest, the
government called for a rollback of its decision.
In September 2012, government allowed FDI in multi brand retail with the decision to allow FDI
in multibrand retail left to the state.In June 2013, 12 states and union territories agreed to allow
FDI in multi brand retail, despite which no proposals were received by the government.
A change in government was seen in 2014 from the leadership of Indian National Congress led
UPA to Bharatiya Janata Party led NDA government. The government reiterated its agenda of
not allowing foreign direct investment (FDI) in multi-brand retail. However, the government had
decided to continue with FDI policies laid by its predecessor.
India received lukewarm response in the single-brand retail segment, getting only USD 135
million of FDI in about nine years and one proposal in multi-brand retail attracting an investment
of USD 140.3 million. In 2015, the center decided to relax sourcing norms in case of state of art
and cutting edge technology, subject to government approval. Also, it allowed a single entity to
function both as wholesale and single brand retail.
In 2016, the government allowed 100% FDI in multibrand food processing, thus paving way for
global retailers like Wal-mart and IKEA to enter multibrand retailing. In a bid to placate small
shopkeepers, an amendment to the Shop and Establishment Act was proposed to enable small
shops to remain open 365 days (Bailay & Jain, 2016). By the end of March, the government
allowed 100 percent FDI through automatic route in e-tailing
In June, the local sourcing norms of single brand retailing were relaxed for 3 years. 89 proposals
for FDIin single brand retail trading and one in the multi-brand sector were approved by the
government.Despite allowing 100% FDI in multi brand retail, Commerce and industry minister
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stated that FDI in multibrand retail would not be allowed in India until small traders are
empowered and can face market competition (Press Trust of India, 2016b). The process is
depicted diagrammatically in Figure 1.
Objective 2- Impact of FDI on various stakeholders:
Though FDI in retail has come a long way in India, it has been noticed that the initial causes for
opposition in 2006 still continue to persist a decade later. While the proponents of FDI in retail
focus only on the positive aspects of FDI in retail, small traders, who form a majority of the retail
market, fear for their livelihood. The impact of FDI in retail on the stakeholders is discussed in
this section.
Impact on Farmers-
The proponents of FDI in retail argue that farmers will benefit from this move by removing
exploitative middlemen and giving better prices to farmers. Also, enhanced infrastructure
wouldgreatly improve the productivity of farmers. Investment in backend infrastructure is touted
to greatly reduce wastage, especially in the farm produce sector.
However, it is observed even in developed countries that a small number of retailers secure
produce from a large number of farmers. When these retailers dominate the market, they use
their monopolistic power to pay extremely low prices to farmers causing them to go out of
business- as in the case of the Royal Association of British Dairy Farmers. Despite increasing
margins on fresh milk, extremely low prices are paid to farmers causing a loss of money for each
litre of milk produced.
Impact on unorganized retailers-
After introduction of FDI in single brand retail, a study conducted by India FDI Watch and
Action Aid (India) in Mumbai, Delhi, Bangalore, Chennai and Bhubaneswar showed that 85 per
cent of the respondents reported a decline in business.. Small retailers indicated that they had no
other options to “fall back on in the event of a crisis such as a closure” (Special Correspondent,
2009).
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If unorganized retailers were to be stripped of their livelihood, it would adversely impact the
economy by leading to widespread unemployment as organized retail cannot provide
employment in proportion to the amount it displaces, in the short run.
In Thailand, 5 years after the introduction of FDI in retail, around 60% of kirana stores were
closed down (Press Trust of India, 2012). In fear of a similar future and concerned for their
livelihood, In India, small retailers are currently protesting FDI in retail.
Impact on domestic organized retailers:
Domestic organized retailers may initially lose their existing market share and face increased
competition due to the entry of foreign players. However, domestic organized retailers also stand
to benefit from the technological advancements and knowledge that foreign retailers bring with
them, especially in the case of partnerships.
Impact on Consumer-
With the advent of FDI in retail, the consumer will be exposed to a greater number of choices at
more affordable prices. The number of brands in the market will increase. The consumer will
benefit from the move due to a better shopping experience. In 2012, the Supreme Court
welcomed the move to introduce FDI in retailing due to its focus on benefitting the customer.
Implications of the studyDespite the far reaching consequences of retail transition in India, a very limited amount of
research has been done on it. This study takes a step in the direction of addressing this gap.
Recommendations for the government- It is noticed that while all the stakeholders stand to
benefit from the entry of foreign retailers, in at least a small way, unorganized retailers are the
ones who will bear the brunt of this move as they will incur heavy losses and be pushed out of
the market. However, progress is inevitable and it is in the best interests of the nation to take
advantage of the capital and technology that FDI in retail has to offer. The following steps have
to be taken
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1. Improve financial access to domestic organized and unorganized players so that they can
upgrade their existing stores
2. Give training to displaced retailers to make them employable
3. Stipulate that foreign traders have to recruit at least a part of their labor force from the
displaced retailers
4. Set up a committee to keep predatory pricing and anti competitive acts as stipulated by
the competition commission in check
5. Encourage retailers to directly procure goods from suppliers
6. Set up a procurement committee to ensure that fair prices are paid to farmers
References1. Ahmad, A. H., Mohd Nor, S., Rahman, I. H. A., Moen, J. A., &CheWel, C. A. (2008).
Small retailers and entrepreneurs’ perceptions on the departmental store development: A
Malaysian case study. International Review of Business Research Papers, 4(1), 1-10.
2. Bailay, R., & Jain, V. (2016, March 01). Budget 2016: Retailers like Walmart, Tesco to
gain as govt allows 100% FDI in multi-brand processed food retailing. The Economic
Times.
Retrieved
from
http://economictimes.indiatimes.com/industry/services/retail/budget-2016-retailers-likewalmart-tesco-to-gain-as-govt-allows-100-fdi-in-multi-brand-processed-foodretailing/articleshow/51202128.cms
3. ET Bureau & Agencies, (2011, November 21). FDI in multi-brand retail: Will 15-year
journey
end
today? The
Economic
Times.
Retrieved
from
http://articles.economictimes.indiatimes.com/2011-11-21/news/30424814_1_multibrand-multibrand-retail-sector/2
4. Gorton, M., Sauer, J., & Supatpongkul, P. (2011). Wet markets, supermarkets and the
“big middle” for food retailing in developing countries: evidence from Thailand. World
Development, 39(9), 1624-1637.
5. Mehdudia, S. (2011, November 24). Cabinet approves 51 per cent FDI in multi-brand
retail. The Hindu. Retrieved from http://www.thehindu.com/business/Industry/cabinetapproves-51-per-cent-fdi-in-multibrand-retail/article2657113.ece
6. Press Trust of India, (2012, September 23). FDI in retail not a threat to kirana shops:
Montek. The Hindu. Retrieved from http://www.thehindu.com/business/Economy/fdi-inretail-not-a-threat-to-kirana-shops-montek/article3929250.ece
264
7. Press Trust of India, (2016a, June 06). India ranks second on retail ind index on ease of
doing business: study. The Hindu. Retrieved from http://www.thehindubusinessline.com/
economy/india-ranks-second-on-grd-index-on-ease-of-doing-businessstudy/article8696425.ece
8. Press Trust of India, (2016b, September 07). Nirmala apprehensive on FDI in multi-brand
retail. The Hindu. Retrieved from http://www.thehindu.com/business/nirmalasitharaman-apprehensive-on-fdi-in-multibrand-retail/article9080836.ece
9. Special Correspondent, (2009, March 26). Opening up of retail sector hits small
players. The Hindu. Retrieved from http://www.thehindu.com/todays-paper/tpnational/tp-karnataka/opening-up-of-retail-sector-hits-small-players/article340395.ece
10. Singhi, Abheek; Amitabh Mall, Rachit; Mathur, and Parul Bajaj (2015), “Retail 2020Retrospect, Reinvent, Rewrite,” The Boston Consulting Group & Retailers Association of
India.
11. Singhi, Abheek, Amitabh Mall, and Namit Puri (2016), “Retail Transformation :
Changing Your Performance Trajectory,” The Boston Consulting Group & Confederation
of Indian Industry, (January).
12. Varma, S. (2016, September 11). With about one shop for every 15 families, retail sector
outguns
every
other. The
Economic
Times.
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from
http://economictimes.indiatimes.com/small-biz/entrepreneurship/With-about-one-shopfor-every-15-families-retail-sector-outguns-every-other/articleshow/54274902.cms
Fellow (Marketing), IIM Rohtak, email- fpm02.005@iimrohtak.ac.in
Assistant Professor (Marketing), IIM Rohtak
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The Impact of Credibility of Foreign Celebrity
on Customer Engagement
Pantea Foroudii, Suraksha Guptaii, Mohammad Miii. Foroudi and Naresh K. Malhotraiv
1
The Business School, Middlesex University London, UK.
P.foroudi@mdx.ac.uk
2
Kent Business School, University of Kent, Kent, UK.
S.Gupta@kent.ac.uk
3
4
Foroudi Consultancy, London, UK.
Mohammad@foroudi.com
Georgia Institute of Technology, US.
Naresh.malhotra@mgt.gatech.edu
Introduction:
Today the concept of credibility of foreign celebrity plays a fundamental role in societies and
creates some impact on the brand awareness and brand trustworthiness. Companies using
celebrities to create exclusive advertisements to increase their brand awareness. Every year
the corresponding cash flows raised and at the same time also the usage of celebrity
endorsements has increased. Credibility of foreign celebrity and celebrity endorsement
become popular since media overloads society with celebrity photographs and news and
giving them an entertainment function. It also gives a brand a touch of glamour, added appeal
and name recognition among the audience. The advantage of celebrity endorsement is mutual
where the company and the celebrity will get the benefit with this collaboration. The
company will get the profit from the high sales while celebrity will get worthwhile sources of
income. For instance, David Beckham earned approximately $37 million from endorsements
in 2012. Sponsors are eager to choose Beckham, particularly after he was chosen to be
ambassadors of the London Olympics 2012 (Forbes 2015).
Celebrity endorsements are very popular tools for marketers to endorsing many types of
brands or product. Authors believe that by using the celebrity as their model or spoke person,
it could arouse public awareness in easy way. Companies willing to invest huge amount of
money to align its products with popular celebrities in the belief that they will transfer image
266
values to their products and draw attention to the endorsed products. Moreover, celebrity
endorsement is a contemporary subject in the marketing field. This topic is considered as a
marketing communication tool that has been used globally; therefore it is significant and
relevant in the competitive fashion industry. Consumers are over-exposed to the media
nowadays. Every day, consumers exposed with too many advertisements, and most of the
times they tend to forget within a day. Therefore, companies use celebrity endorsement to
strengthen the marketing message.
Research Gap and Objectives of the Study:
The aim of this study is to explore the voids in knowledge about credibility of foreign
celebrity and its influences on customer engagement. Particularly, this study investigated to
determine (i) the effects of factors such as attractiveness of website, trustworthiness of
website, expertise of website influences on credibility of foreign celebrity (ii) the relationship
between credibility of foreign celebrity, brand awareness, brand trustworthiness, and
customer engagement (Figure). This study sheds light on the relative significance of a
number of branding elements that can help an organisation’s outcome. A large body of
research, in domains ranging from credibility and celebrity endorsement, celebrity
endorsement has tried to understand and delineate how companies, or the ‘people behind the
brands’, can create stronger relationships with customers and brand. Though, such
relationships are likely to remain indefinable for marketers without a more ‘precise
understanding of when and why consumers respond favourably and strongly to companies’
relationship-building efforts, entering volitionally into the kinds of consumer–company
relationships that transform them into fervent supporters of the companies and their
products’.
Research Methodology:
This study adopts a hybrid methodology with dominant qualitative and quantitative
components and consisted of two phases. The first phase (exploratory phase) involving 9 indepth interviews with marketing and advertising managers and 5 focus groups conducted
with 21 master students and doctoral researchers at a British Business School. Qualitative
data collection was used to generate uncovered hypotheses and purify measures for the
questionnaire. A key understanding of the constructs in the conceptual framework and the
generation of their domains and measurement items are the focus of this research. For
qualitative data analysis, the NVivo software was used to code and extract information from
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the interview and focus group data. In the second phase the framework was tested by means
of a survey of 356 British customers to examine their perceptions of the influences of the
credibility of foreign celebrity on brand awareness, brand trustworthiness, and customer
engagement.
The obtained data support the interpretation and discussion of findings. A statistical package
for social science (SPSS) was used in the early stages to refine and purify this study
measurement scales. For example, Cronbach alpha, KMO tests and Sphercity test and
exploratory factor analysis were examined. The data are analysed using multivariate data
analysis techniques such as the exploratory factor analysis (EFA), Cronbach-alpha,
confirmatory factor analysis (CFA) and structural equation modelling (SEM). These
statistical techniques are adopted for the development of scales, to determine the validity and
reliability of the measurement and the relationships between the constructs. The application
of CFA provides robust support for construct validation. The application of SEM enables the
examination of hypotheses between the constructs as well as analyse the survey responses.
The structural model showed a very good fit to the data and good convergent, nomological
and discriminant validity and reliability stability. The proposed conceptual model achieves
acceptable fit and the hypothesised paths are all valid.
Implications of the Study:
This research contributes to the growing research on consumer–company relationships by
extending the notion of credibility of foreign celebrity as a form of advertising campaign or
brand that includes a famous person using their reputation to support and promote the brand.
Marketers usually use individuals who have achieved some form of celebrity status to serve
as spokesperson for their brand such as popular, television stars, movies actors or famous
athletes. Many Fashion companies frequently used celebrity endorsement as their strategies to
promote the brand, thus enhance sales and ultimately increase market share. Celebrities are
frequently perceived as highly fashionable and become trendsetter of the fashion trend.
Therefore, the celebrity endorser’s credibility is able to increase the persuasiveness in
celebrity endorsement. Also, consumers are more likely to purchase a product or brand if it is
endorsed by a credible source.
The findings of this research are generates a number of implications and have a value for
advertising, communication, and retail managers suggesting that brand can create strong
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customer engagement via employing credibility of foreign celebrities on their advertisements.
Also, the findings identified three main factors which influence on credibility of foreign
celebrities favourability; i.e. attractiveness of website, trustworthiness of website, and
expertise of website. Additionally, the study found that brand awareness and brand
trustworthiness have mediating role in the relationship between credibility of foreign
celebrities and customer engagement.
A key contribution of this study is presenting a robust model that describes the hopeful
phenomenon of credibility of foreign celebrities and representing that perceptions has a
definite positive impact on customer engagement. Furthermore, this research adds novel
perspective to the growing body of advertising, branding, and retailing literature and suggests
directions for future study. Finally, this research supply managerial implications for retail
managers to identify and design the favourable advertisement and website. It is hoped that
future research will build on these results so that further avenues can be explored.
Figure: The Research Model
The Business School, Middlesex University London, UK.
Kent Business School, University of Kent, Kent, UK.
iii
Foroudi Consultancy, London, UK.
iv
Georgia Institute of Technology, US.
i
ii
269
RETAILARCH: A Multiple-Item Scale for Measuring Consumer
Perceptions of Retail Architecture
Mohammad M. Foroudii, Pantea Foroudiii, Suraksha Guptaiii and Naresh K. Malhotraiv
1
2
Foroudi Consultancy, London, UK.
Mohammad@foroudi.com
The Business School, Middlesex University London, UK.
P.foroudi@mdx.ac.uk
3
Kent Business School, University of Kent, Kent, UK.
S.Gupta@kent.ac.uk
4
Georgia Institute of Technology, US.
Naresh.malhotra@mgt.gatech.edu
Introduction:
In recent years, research in the architecture and environmental design areas has demonstrated
that developing a favourable architecture can help customers to focus on the retail store, what
it stands for, what it communicates, delivers, and it allows the retailer to send a more reliable
message, which can be transmitted to stakeholders and improve identification with the place.
Architecture lies at the heart of retail identity. Modern architecture is an integration of
industry, art and contemporary social needs.
Architecture involves buildings that are designed to express an idea or an emotion of a
retailer’s purpose, position in time, and intention of its creators (Vischer, 2007). Architectural
design is defined as the preparation of instructions for the manufacturer of artefacts to create
an image of corporate identity (Alessandri, 2001). Academic studies have focused on the
design aspect of architecture and have neglected the strategic aspects. Architectural design
helps transcend barriers due to the reason of its visual character. Retailers and organisations
spend substantial amounts of money on the construction of an effective building (Ellis and
Duffy, 1980). Effective modern architecture is an integration of industry, art and new social
needs that is designed to convey an idea or an emotion about a company’s purpose, its
position in time, and its creators (Myfanwy and Cornelius, 2006). The concept of architecture
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is not only related to the physical, but also to the social and cultural aspects of buildings
(Saleh, 1998). Architecture is technical and sociological (Alessandri, 2001). Theorists agree
that well-designed architecture should be recognised and have a positive effect.
Architecture requires visibility, tangibility, and consistency with other aspects of retailer
identity (Balmer and Gray, 1999) that can be dictated by their aesthetic attractiveness.
However, the aesthetic aspect of architecture is essential for organisations, since it expresses
an increase in desire among corporate managers to promote the physical expression of the
building as a means of enhancing corporate image and identification (Becker and Steele,
1995). The structure and design of its buildings influences the image of the organisation and
creates a feeling of identification among stakeholders (Gray and Balmer, 1998).
Research Gap and Objectives of the study:
The notion of architecture has been recognised as a significant area of research in marketing
and design literature. This study aims to develop a comprehensive understanding of the key
effect of architecture on consumers’ engagement and excitement which can impact on their
perception. Research within the current spectrum of the concept of ‘architecture and
environmental design’ has evolved as an imperative area of research within the marketing
discipline. Despite its significance and the positive attention the concepts have received
during the last few years, the explanation of architecture and its relation to customer
perception has remained vague and lack a thorough theoretical underpinning. The paper
creates a preliminary investigation of architecture and its relation to retailer identity and to
facilitate better understanding of the concept of ‘architecture, engagement, excitement,
customer perception and its antecedents and consequences from the customer perspective that
aims to address a number of research gaps noted in the literature.
Research methodology:
As a result, this research employed a mixed-method research design was adopted and
consisted of two phases. The first phase draws on the literature and on primary data,
including an exploratory research involving semi-structured interviews (with 8 respondents)
and focus groups (5 focus groups, with 21 respondents), which the information from the
semi-structured interviews and focus groups is used to describe the relationships, found in
this study and from this a conceptual framework was developed (Figure). In addition, the
proposed conceptual model is developed on the basis of social identity theory, attribution
271
theory. In the second phase, a pilot survey (67 respondents) was employed to collect data for
the development of measurement scales. Afterwards, the main survey (with 427 respondents)
was conducted in order to examine the developed framework and research hypotheses by
means of a survey of consumers to examine their perceptions with high-end retail stores in
London, UK. The quantitative method concentrates on testing theoretical hypotheses and
generalises the findings in a broader population.
In particular, this study will focus on the new building of the high-end retail stores in London
as an in-depth case study, which is the most applicable and suitable methodological
framework for explaining the interaction between architecture and customer perception. The
research should be concluded ‘by the notion of fitness for purpose’ and used to expand
knowledge in the specific field of study. The evidence that were collected was completed by
a selection of visitors, employees and managers to examine the links between the respondents
and their perceptions of the research constructs. The different methods of data collection were
employed to ensure a method of triangulation is used to examine the validity of the data. This
methodology will strengthen this research by focusing on a contemporary phenomenon
within a real-life context.
The resulting sample of 427 allowed multivariate analysis to be undertaken. The data analysis
involved the use of exploratory factor analysis (EFA) and chronbach-alpha, confirmatory
factor analysis (CFA) and structural equation modelling (SEM). The structural model showed
a very good fit to the data and good convergent, nomological and discriminant validity and
reliability stability. The application of CFA provided robust support for construct validation
and SEM enabled the examination of hypotheses between constructs.
Data analysis and results:
Based on the statistical findings, in-depth interviews and focus groups (qualitative study) and
the related literature, the relationship between the architecture, consumers’ engagement,
excitement, customer perception and were evaluated as the main objective of this study and
the relationships were significant. Furthermore, this study found the key factors which are
influence on the favorability of architecture are symbolic artifatcs/decor and artifacts,
physical structure/spatial layout and functionality, and physical stimuli /ambient conditions.
Overall, this study presents the architecture as a complex phenomenon.
272
Implications of the Study:
The key contributions stem from this research is to identify architecture, consumers’
engagement, excitement, customer perception dimension and the development of a validated
conceptual framework that explains the antecedents of architecture and its impacts upon
customer perception within the retail sector. The outcome of this research adds novel
perspective to the growing body and hoped that future research will build on these results so
that further avenues can be explored.
References:
Available upon request
273
Research conceptual framework
Spatial layout and
Foroudi
Consultancy, London, UK. Physical stimuli
functionality
ii
The Business School, Middlesex University London, UK.
iii
Layout
Kent Business
School, University of Kent, Kent, UK.
iv
Georgia Institute of Technology, US.
i
Light/Aroma/Music/noise/
Temperature
Location (outdoor)
Symbolic artifacts
Art
Interior Design
Location (Entrance)
Security/ Privacy
Special comfort
Engagement
Excitement
Customer Perception
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Influence of Intra-cultural ethnic diversity (ICED) on satisfaction
formation process
Prithvish Bose1 and Sanjeev Varshney2
1, 2
Xavier School of Management, XLRI,
Circuit House Area (East), Jamshedpur – 831001, Jharkhand, India
Emails: 1r10012@astra.xlri.ac.in/ 2sanjeevvarshney@xlri.ac.in
Introduction:
Over the past few decades, both academics and practitioners have identified consumer
satisfaction as one of the four key ingredients needed to create and sustain a competitive
business (Mayo and Brown, 1999). Indeed, failure to achieve acceptable satisfaction among
foreign consumers is an important reason (Nakata and Shivakumar, 2001) for western firms
failing to meet performance expectations while entering foreign markets (Homburg et al.,
2002).
One key pointer for such failure comes from Fournier and Mick (1999), who describe
satisfaction as a „multi-model, multi-modal blend of motivations, cognitions, emotions and
meanings‟, „embedded in sociocultural settings‟. Thus, culture becomes an important context
for understanding consumer satisfaction. Unfortunately, Western cultural settings have
dominated most satisfaction research (Ross et al., 2008) and there is thus a need to examine
other cultural settings for a fuller understanding of the phenomenon. In large multi-ethnic
countries such as India, major ethnic groups (e.g. based on language) are as large as many
small nations and should merit the same attention as for national cultures.
Research Gap and Research problem:
Although researchers have shown increasing interest in cross-cultural studies (Engelen and
Brettel, 2011), there is a disparity (Poulis et al., 2013) in the coverage of within-country
cultural differences i.e. intra-cultural ethnic diversity (ICED). In particular, none of the
studies on ICED have examined the dilution of cultural values through acculturation and
formation of generational cohorts. If we consider the example of the current study, out of the
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total of thirty one research papers on cultural studies analysed, only three relate to ICED, and
none at all in the context of consumer satisfaction.
The research question emerging therefore is „in a multi-ethnic nation, does consumer
satisfaction vary among its different ethnic groups and if so in which ways? Conversely, has
acculturation and formation of generational cohorts diluted the effect of ethnicity?‟
Objectives of the study:
The research question translates into the following research objectives:
To determine whether the satisfaction formation process for consumers varies:
a) With ethnic cultural backgrounds,
b) With the degree of acculturation to host culture,
c) With different generational cohorts
and
d) Whether there is an interaction effect between acculturation and generational
cohorts.
Research methodology:
Considering the requirements, a Sequential Mixed method design was conceptualised to
collect and analyse qualitative data in the first phase and quantitative data separately in the
second phase, and finally interpreting them together. The second phase of quantitative data
collection built on the results of first qualitative phase to the extent of narrowing down the
variables, themes and subject group of the confirmatory study.
The study addressed the impact of ethnicity, acculturation and generational cohorts on
consumer satisfaction.
The preliminary qualitative study explored the interplay of these forces among ethnic
Bengalis and non-Bengalis settled in West Bengal, India using informal interviews.
The experimental study focussed on the effect of acculturation on the satisfaction formation
process of non-Bengali‟s (specifically Punjabi Sikhs) from the Integrator generation and
Generation Y settled in West Bengal. Subjects were culturally primed between host (Bengali)
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and receiving (Sikh) cultural situations and three variables: expectations, desires and
performance, were manipulated in alternate high-low scenarios, modelled on the process
followed by Spreng et al. (1996).
Data analysis and results:
For the qualitative study, after the transcription and coding of interviews, we grouped the
responses for each variable for each subject and analysed it based on the logic developed
during the course of the study. The results from the qualitative study suggest that for ethnic
Bengalis, as well as highly acculturated non-Bengalis, meanings and emotions expressed
through desires carry more weight in the overall satisfaction judgment. This indicates the
possible existence of a key differentiator in the form of the pre-eminence accorded to the
cognitive or affective parts of the satisfaction formation process by subjects from different
ethnicities.
For the confirmatory study, we used structural equation modelling (SEM) employing
WarpPLS software to analyse the data from 448 interviews. This study too found the desires
congruence route to be significant for higher acculturated Sikhs, thus supporting the findings
of the qualitative study. The study also unearthed critical differences in the satisfaction
formation processes of the two generations. Firstly, it found the desires congruence path to be
significant for Sikhs belonging to Generation Y but not for the Integrator generation.
Secondly, acculturation moderated the effect of expectations for the Integrator generation
while leaving the Generation Y unaffected.
Implications of the Study:
The study suggests the possible existence of a key differentiator in the form of the preeminence of desires for the Bengalis despite the effect of prolonged acculturation. It thus
addresses the main research question about the effect of ethnicity on consumer satisfaction,
and points to the critical role of cultural norms in an individual‟s value system. This should
provide a strong impetus to studies exploring intra-cultural ethnic diversity (ICED) which has
mostly been neglected by the research community.
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The Integrator generation displaying more utilitarian drives while Generation Y displayed
higher hedonic drives may imply that expanding consumer choice and economic growth
creating higher disposable incomes are leading to hedonic drives gaining ground over
utilitarian ones. The effect of globalisation and rising consumerism may be strengthening it.
It points to the need to pay greater attention to the role of affect in consumption related
studies involving younger generations (Y and Z in this study) as well as marketing strategies
used by industry.
The greater incidence of dissatisfaction among younger generations, as well as their tendency
to assign its locus to the seller should exercise the mind of marketing practitioners since the
negative impact of dissatisfaction could be far more potent than the positive impact of
satisfaction. Thus organisations will do well to spruce up their grievance handling,
satisfaction measurement and other related processes when handling the younger generations.
The study also suggests that ethnic groups may not in reality be homogeneous markets, but
submarkets of different acculturation levels with differing consumption patterns. More
importantly, these subgroups constantly change with time. It improves our understanding of
how marketing efforts to ethnic groups will be impacted by the existence of these submarkets of different acculturation levels. At the same time, it helps us identify opportunities
for addressing homogeneous platforms across such diverse ethnic sub-groups which may
arise due to existence of cohorts.
A clear understanding of the dynamics associated with this triad of ICED, acculturation and
generations could be critical in marketing strategy formulation in terms of uncovering hidden
needs, designing new product platforms, drawing up communication strategies, forecasting
future trends and devising consumer care strategies, among others. Overall, the study offers a
fresh viewpoint for market segmentation and strategy-making in countries having multiple
ethnic groups.
278
References:
Engelen, A. and Brettel, M. (2011), “Assessing cross-cultural marketing theory and
research”, Journal of Business Research, 64: 516–523.
Fournier, S. and Mick, D. G., (1999), “Rediscovering Satisfaction”, Journal of Marketing, 63
(October): 5–23.
Homburg, C., Krohmer, H., Cannon, J. and Kiedaisch, I. (2002), “Customer satisfaction in
transnational buyer-seller relationships”, Journal of International Marketing, 10(4): 1-29.
Mayo, M.C. and Brown G. S. (1999), “Building a competitive business model” Ivey Business
Journal; 63: 18– 23.
Nakata, C. and Sivakumar, K. (2001), “Instituting the marketing concept in a multinational
setting: the role of national culture”, Journal of the Academy of Marketing Science, 29(3):
255-75.
Poulis, K., Poulis, E., and Yamin, M., (2013),"Multicultural markets and acculturation:
implications for service firms", Journal of Services Marketing, 27(7): 515 – 525
Rokeach M. (1973), The nature of human values. London: Free Pres; 1973.
Ross, R. H., Broyles, S.A. and Leingpibul, T., (2008),"Alternative measures of satisfaction in
cross-cultural settings", Journal of Product & Brand Management, 17(2): 82 – 91
Spreng, R. A., MacKenzie, S. B. and Olshavsky, R. W., (1996), “A re-examination of the
Determinants of Consumer Satisfaction”, Journal of Marketing, 60:15-32
279
Management of Brand Identity Impressions in Cross
Cultural Contexts: A study on a global chain of coffee shop stores in
Poland and India
Ritu Srivastava1
1
Assistant Professor, Birla Institute of Management Technology, Greater Noida e-mail:
ritu.srivastava@bimtech.ac.in
Introduction:
The following research is based on the brand identity and recognition of a chain of global coffee
shop stores in Poland and in India. It mainly tries to bring to light the different marketing
strategies based on the culture that the Coffee brand is using to attract its customers. Even though
factors like product, place, promotion and properties are some of the main building blocks of
brand recognition, cultures imbibed by people over the years have also added an emotional and
sentimental factor in the way they associate different brands. They might also give more
preference to key products drawing them to their culture rather than their personal choices when
making buying decisions. Every brand needs to have a strong sense of identification with its
customers.
Brand identity is an exclusive label to which a consumer self-associates and feels the brand is
amenable to a clear picture of what the person of that category looks like, feels and does things.
The way a brand makes an identity and a mark on the customers involves a series of processes of
identity Salience, association, relevance and verification. Thus a customer first gets associated
with an identity most salient to himself/herself and then the association grows with multiple
exposures to brand especially in relevant contexts followed by the customer justifying the
association to oneself in the end. Cultural values and beliefs embedded in the customer’s
psychology play an integral role in the entire process.
1
Assistant Professor, Birla Institute of Management Technology, Greater Noida
280
In case of a fast-food industry, four main elements contribute to a brand identity (Schmitt, B., &
Simonson, A., 1997; Witkowski, 2003). They are-includes the ambience of the restaurant starting from the lighting and decor to
arrangement of indoor ordering and dining areas.
-the names and portion of food items available. Its appearance, taste and smell and
nutrition value is always a major concern for the customers
-in-store place settings, appearance of the employees and helpers, the efficiency
with which they do their job, being polite and courteous, and the attractiveness of the packaging
for take-outs.
-advertisements, in-store promotions and characters of the trade.
All the above elements are associated with sensory and aesthetic components like colour, taste,
smell, style that influence and enhance what the customers experience. It is especially
challenging for the companies to manage their brand identity internationally since one or more of
the four elements needs to be adjusted to maximize local consumer response and yet needs to be
done in such a way that it does not hamper the advantages or the expectations of the global
image. Hence, the ultimate goal of the company is to form positive identity impressions in the
minds of the native consumers even if it requires some changes in the global expressions of the
company. On the other hand, this might not be enough as the customers have a tendency to
reinterpret the brands through its global products and services even after the brands adapt
themselves to the local market to fit their own local mind frames of cultural practices and
reference.
Research Objective:
The main objective of doing this study is to identify the determinants of the coffee shop chain
store in effective management of the brand identity globally. The consumer’s ranking of different
components of marketing strategy i.e. property, product, presentations and publications towards
their contribution in building brand identity is measured in India and Poland.
281
Research methodology:
The research is based on the primary data collected from the questionnaires administered in
Warsaw and New Delhi respectively. A total of 140 questionnaires were shared in the two cities
(seventy in each). The respondents were management students who were heavy consumers of
coffee and fast foods. They are relatively homogeneous across cultures in terms of important
demographics (age, education) but differ in terms of cultural frames of reference.
Major results:
Customer Satisfaction based on property: cleanliness (i.e. kept clean inside, clean restrooms,
smells good) plays a significant role when it comes to satisfaction based on the state of the
property element in reference to the brand identity in Poland. It also increases the likelihood of
them visiting the place again. Meanwhile in India, the fact that the property looks clean and
attractive (i.e. clean inside, smells good, painted in nice colours and looks inviting from outside)
catches the attention of the customers. Hence satisfaction and the likeliness of visiting again not
only depends of cleanliness but also the place and attractiveness of the property.
Customer Satisfaction based on product: In Poland, brand identity based on the product’s value
depends upon its taste and the quality of coffee beans used (i.e. looks appealing, tasty and
different, uses fresh coffee beans). Since snacks is one major compliment to coffee in India,
‘variety of food items’ is the most important determinant. Other factors like ‘tasty and different’
and ‘looks appealing’ holds major proportion of the product based Brand Identity
Customer Satisfaction based on presentation: The top three factors in the Presentation elements
that ranked high for satisfaction of the customers in Poland were ‘efficient filling of orders’,
‘courteous employees’ and ‘attractive packaging’. Whereas, in India, the three factors that
formed the major portion of satisfaction were ‘employees wearing neat clothes at work’,
‘courteous employees’ and ‘efficient filling up of orders’.
282
Customer Satisfaction based on publication: In Poland, the three main factors contributing to
satisfaction based on publication are ‘name has a pleasant sound to it’, ‘attractive name and easy
to read’ and ‘attractive advertising’. While in India, the three main factors contributing to
satisfaction based on publication are ‘name has a pleasant sound to it’, ‘attractive name and easy
to read’ and ‘trademark is appealing with coffee beans on it’.
Managerial implications: This research provides evidence of both globalization and localization
by clearly telling the similarities and differences across cultures in brand identity impressions
and in their relationship with satisfaction and future patronage intensions.
References:
Witkowski, T. H., Ma, Y., & Zheng, D. (2003). Cross-cultural influences on brand identity
impressions: KFC in China and the United States. Asia Pacific Journal of Marketing and
Logistics, 15(1/2), 74-88.
Schmitt, B., & Simonson, A. (1997). Marketing aesthetics: The strategic management of brands,
identity, and image. Free Press.
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Modeling the social and cultural environment
of the international logistics
Supachart Iamratanakuli
1
Kasetsart Business School, Kasetsart University
50 Ngamwongwan Road, Jatujak, Bangkok (Thailand) 10900
Emails: fbussci@ku.ac.th
Introduction:
Globalization also offers increasing demand from customer around the globe to purchase
products or material from global firms (Daugherty, Stank, & Rogers, 1996). International
logistics provide global firms with global operations in both sourcing and delivery. The
rational for global firms to operate globally, particularly for sourcing and manufacturing is
only to obtain lowest cost. There are other reasons as well those global firms operate global
logistics. Those reasons include increasing revenue, achieving economies of scale, reducing
direct cost, advancing technology, enhancing sustainability, etc. However, many cases
confirmed that the major reasons for global firms operating global logistics are for finding
low-cost resources and labor and accessing to rapidly growing markets (Fawcett, Stanley, &
Smith, 1997).
The increasing in global trade during the twenty-first century becomes the signal for
researchers to pay attention on international logistics. The value of world trade grew from
approximately $6.2 trillion in 2000 to $16.2 trillion in 2008 according to the international
trade statistics from the world trade organization (Christopher, Peck, & Towill, 2006). As
such, the ratio of the gross domestic product (GDP) of all countries grew from approximately
14 percent in 2000 to 26 percent in 2008 (Brewer, Button, & Hensher, 2001). The improving
GDP create many opportunities for logistics. The opportunities include more manufacturing
alternatives and offer a wider range of resource advantages. Such advantages can gain from
economies of scale in some regions that have lower wages and from flexibility from other
regions that have expertise (Mentzer, DeWitt, Keebler, Min, Nix, Smith, & Zacharia, 2001).
Research Gap and Research Problem:
International logistics operating either directly or indirectly are increasing popular for most
firms since global sourcing and marketing enhance firm’s performance (Rao, & Young,
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1994). For example, low-cost production sources in South East Asia can develop cheaper
products for developing markets, which improve revenue, volume, and market share for
global firms. Domestic logistics is essential for successful sourcing, manufacturing and
marketing, but operated in a relatively controlled environment (Robeson, 1994). International
logistics is different, which requires more supporting operations in a variety of different
national, political, and economic settings. A variety of macro-environmental settings increase
uncertainty in terms of the distance, demand, diversity, and documentation of international
commerce (Rushton, & Walker, 2007).
International logistics corporations recognize the need to integrate natural environmental
issues to their operations plans (Wood, 2002). Logistics companies often work with different
kinds of equipment and machinery with chemical-producing products. As such, a business’
day-to-day operations can pose an ongoing threat to the natural environment. To reduce the
likelihood of damage to the environment, government regulations require business consider
certain natural environmental factors in their overall operations plans.
Objectives of the study:
The specific objectives that we intend to a). identify the macro-environmental factors in the
international logistics, b). establish relationships among the factors, and c). discuss the
managerial implications of this research.
Research methodology:
The research design employed for the present study is basically done on the literature review
and content analysis. The opinion of expert panel from both industry and academia also took
into account for choosing the environmental factors that influence international logistics and
developing the relationship matrix in the interpretive model.
We utilized the bibliometrics to analyze the content of literature in conjunction with the
opinion of experts for identifying factors. Later, the technique known as interpretative
structural modeling (ISM) was applied to study a relationship among factors. Basically, the
bibliometrics are the approach to measure scientific and analyze the content. The large
amount of textual information can systematically identify the factors for this study.
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Data analysis and results:
The study has simplifies the complex problems under study into a diagraph model with word
explanations. The results of the study provide the systematic model that explains the
relationship among six environmental factors on international logistics. The contexts on the
model leverage the understanding of macro-environmental influences on international
logistics. The six influences also provide significant challenges for international logistics.
The analysis shows that the political, economic, and cultural influences become the most
challenge that international trade specialists should be concerned vigilantly. The other three
influences can set lower priority from top management due to their dependency on the top
three challenges.
Implications of the Study:
The present study is successful to the extent of insight for practicing managers and leverage
chances for success of managing international logistics. Different factors drive other factors.
Management of strategic factors helps to manage tactical factors; management of tactical
factors enhances operational factors and effectively makes an organization fit for deployment
of international logistics.
Managers can use the study to create context-specific framework for solving their
environmental influences on international logistics. In this research, there are some factors
having higher driving power in the ISM, which need more consideration from trading
specialists because there are a few other dependent variables being affected by them.
Variables emerging with high dependence contribute to productivity and performance of
international logistics.
286
References:
Brewer, A., Button, K. J., & Hensher, D. A. (2001). Handbook of Logistics and Supply-Chain
Management: Emerald Group Publishing.
Christopher, M., Peck, H., & Towill, D. (2006). A taxonomy for selecting global supply
chain strategies. International Journal of Logistics Management, 17(2), 277-287.
Daugherty, P. J., Stank, T. P., & Rogers, D. S. (1996). Third-Party Logistics Service
Providers: Purchasers’ Perceptions. Journal of Supply Chain Management, 32(2), 23-29.
Fawcett, S. E., Stanley, L. L., & Smith, S. R. (1997). Developing a logistics capability to
improve the performance of international operations. Journal of Business Logistics, 18(2),
101-127.
Mentzer, J. T., DeWitt, W., Keebler, J. S., Min, S., Nix, N. W., Smith, C. D., & Zacharia, Z.
G. (2001). Defining supply chain management. Journal of Business Logistics, 22(2), 1-25.
Rao, K., & Young, R. R. (1994). Global Supply Chains: Factors Influencing Outsourcing of
Logistics Functions. International Journal of Physical Distribution & Logistics Management,
24(6), 11-19.
Robeson, J. F. (1994). The Logistics Handbook: Simon and Schuster.
Rushton, A., & Walker, S. (2007). International Logistics And Supply Chain Outsourcing:
From Local to Global: Kogan Page Publishers.
Wood, D. F. (2002). International Logistics: Book News, Inc.
i
Kasetsart Business School, Kasetsart University, 50 Ngamwongwan Road, Jatujak, Bangkok
287
Linking Group Norm And Status Seeking Preferences: Insights
From A Field Experiment On Charitable Giving
Dr Quang Nguyen, Senior Lecturer in Consumer Behavior, Middlesex University Business
School , The Burroughs , Hendon, London, , NW4 4BT, UK. Q.Nguyen@mdx.ac.uk
Minh Hoang, Researcher, Vietnam Economics Institute, Lieutrai, Hanoi, Vietnam,
trinhhoangminh821@gmail.com
Dr. Helen ( Huifen) Cai , Lecturer of Management , Middlesex University Business School ,
The Burroughs , Hendon, London, , NW4 4BT, UK ,h.cai@mdx.ac.uk
Dr Len Tiu Wright, Professor of Marketing, Huddersfield University Business School,
Queensgate, Huddersfield, HD1 3DH. UK l.t.wright@hud.ac.uk
Introduction
Donation is a socially desirable consumption behavior. It implies a willingness to give up
one’s own money and/or time to help improve the welfare of others. In Vietnam, sharing own
resources to help those in need is a communal act, long acknowledged by popular Vietnamese
sayings such as “Whole leaves wrap torn leaves” or “Less torn leaves wrap more torn leaves.”
Philanthropic contributions come from a variety of different sources – including social groups,
sports and art groups, service organizations and groups of individuals with similar concerns
(The Asia Foundation, 2011). In the US, charitable organizations received about $316 billion
annually, which was equivalent to 2% of the GDP in 2012.1 Most of this comes from the
contributions of individuals. Given its importance, numerous economics studies have
1
Information is from this website:
http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=42#.Ule3vOXA0d4
288
addressed the primary determinants of charity giving. Many of these studies focus on income
and amount of donation (Feldstein and Clotfelter, 1976). Yet, studies in psychology,
sociology, and marketing have found other motivating factors. In a comprehensive crossdisciplinary literature review on charitable giving, Green and Webb (1997) broadly
categorized the factors into three groups: intrapersonal, social, and economic. In most cases,
charitable behavior cannot be solely attributed to a single motivating factor.
Research gaps:
1. Studies on charitable giving in emerging market economies are still under-represented;
2. There lacks of studies exploring the role of ethnic norms on charitable giving;
3. Using a lab-in-the-field experiment to explore the determinants of charitable giving at
the community level - where individuals have a high level of social interaction – is
still lacking.
Objectives of the study:
The specific objectives that we intend to meet are as follows:
1. To explore the effect of ethnic norms on charitable giving.
2. To explore the effect of status seeking on charitable giving.
3. To explore the interactive effect of ethnic norms and status seeking on charitable
giving.
To achieve these objectives we build upon two strands of literature. The first strand is related
to the effect of status on donations in which most studies explore the differences between
improving status, exerting influence, and donating due to existing status (Bracha, Heffetz, and
Vesterlund, 2009). The second strand of literature focuses on group identity – which has been
blossoming in economics after an influential paper by Chen and Li (2009). Shang et al.,
(2008) find that gender identity congruency influences charitable contributions. They also
suggest future studies to explore how different identities might trigger various identity-based
processes that influence individual behavior. Along this line, we believe that ethnicity and
income level play a crucial role in understanding the link between status seeking preferences,
ethnic group norms, and charitable giving behavior.
289
Research methodology:
The research design employed for the present study is basically a field experiment in the
context of an emerging economy. While most literature focuses on Western economies little is
known about charitable giving in the emerging economies. Furthermore, we conduct the
experiment in nearly natural environments. Our research participants, from different ethnic
groups, live in the same communes with a high level of daily interaction both before and after
the experiment. The charitable decision during the experiment would have effect on future
interaction with people in the commune. Hence, our participants have incentive to make
decision seriously. This aspect enhances the external validity of our study.
We jointly integrate income, group norm of donation, and ethnicity into a single framework
of analysis. The core of our study is a lab-in–the-field experiment, hereafter we refer to as
field experiment, with Vietnamese participants from varying ethnicities and income levels.
The experiment consists of two scenarios. In the first experiment, participants make
contribution to charity according to standard donation experiment – in which all contributions
are anonymous. In the second experiment, participants with highest charitable giving are
publicly recognized. We then combine the experimental data to an existing household survey.
Doing so enables us to estimate the link between income, status seeking preferences, group
norm, and donation behavior.
Data analysis and results:
Overall, our findings show evidence of status seeking behavior. Regardless of income level,
participant made higher donations when the highest contributors in the experiment were
acknowledged and applauded in front of other participants. In addition, we find a novel result
on the role of ethnic group norms of donation in moderating the link between status seeking
and charitable behavior. Simply put, norms of an ethnic group play an important role in
determining the extent of an individual’s status seeking behavior by inducing a necessity to
conform. In the context of our study, we find that ethnic norms of chartable giving may
influence status seeking behavior of individuals in that group. For example, Chinese
participants make more donations than those of other ethnics to conform to the community’s
expectation of their higher contribution. Furthermore, when behaviors are socially visible, the
290
influence of group norm conformity on individuals will be stronger (Bearden and Etzel, 1982).
Likewise, Shang and Croson (2009) show that due to social influence, individuals conform
only to relevant (or appropriate) norms. A charitable giving that is too high might easily be
seen as irrelevant or inappropriate. The results are consistent with a model of income, status,
and group norms we propose in the paper.
Our study, thus, gives further insight into
understanding of how status seeking preferences and group norms interactively influence
charitable giving.
Implications of the Study:
Our study’s findings have important implications for donation raising strategies: an efficient
strategy considers both status seeking and group norm of donation contribution. In a society
where the population is composed of various ethnic identities, charitable organizations can
classify donors and recipients not only by income but also by ethnicity. In the US, for
example, donors can be classified into upper and lower income class, as well as by ethnicity
(Caucasian, Asian, African-American, etc.). Our study implies that using a popular strategy
such as “public recognition of the greatest contributors” is likely to induce status competition
among donors who are perceived as having a high status in their respective communities. On
the other hand, other groups can play the role of a reference group - that may have less
incentive to donate. Doing so, members from each group conform to their group norm of
donations.
Our study also provides insight into donating behavior within the context of corporates. A
donation from a firm manager may serve as a reference point for other employees. Being
perceived as “high status” within the firm, the manager may consider contributing a higher
donation to preserve his reputation as a leader. Employees, on the other hand, are likely to
expect to play the role of followers – they might like to conform to the corporate norm by not
making a higher contribution than the managers. As such, making the donation visible may
not be the optimal strategy because it doesn’t encourage employees to contribute as much as
they can.
291
To sum up, by exploring donations in Vietnam our study makes a theoretical contribution to
the perceived gap in the literature. It also makes a practical contribution through its consumer
behavior research and analysis in an emerging economy. Doing so, it provides opportunities
for Western firms to gain better insight into consumer behavior in emerging economies.
Key References
Bracha, A., Heffetz, O., &Vesterlund, L. (2009). Charitable giving: The effects of exogenous
and endogenous status. University of Pittsburgh Working Paper.
Bearden, W.O. and Etzel, M.J., 1982. Reference group influence on product and brand
purchase decisions. Journal of consumer research, 9(2), pp.183-194.
Chen, Y. and Li, S.X., 2009. Group identity and social preferences. The American Economic
Review, 99(1), pp.431-457.
Feldstein, M. and Clotfelter, C., 1976. Tax incentives and charitable contributions in the
United States: A microeconometric analysis. Journal of Public Economics, 5(1-2), pp.1-26.
Green, C.L. and Webb, D.J., 1997. Factors influencing monetary donations to charitable
organizations. Journal of Nonprofit & Public Sector Marketing, 5(3), pp.19-40.
Shang, Jen, Americus Reed II, and Rachel Croson (2008), "Identity Congruency Effects on
Donations," Journal of Marketing Research, 45, 351-61.
Winterich, Karen Page and Mittal, Vikas and Aquino, Karl, 2013 “When Does Recognition
Increase Charitable Behavior? Toward a Moral Identity-Based Model” .Journal of Marketing:
Vol. 77, No. 3, pp. 121-134.
292
TRACK IV
293
Consumer Decision-making in Buying Fruits and Vegetables
across Online and Offline Channels
Surendra M. Dixit1, Moutusy Maity2, Sunitha Ratnakaram3
1, 2
Indian Institute of Management Lucknow
B-1, Institutional Area, Sector 62 Noida, Uttar Pradesh – 201307
3
Indian Institute of Management Lucknow
Off Sitapur Road, Prabandh Nagar, Lucknow, U.P. (India) 226013
Emails: 1surendradixit@gmail.com, 2mmaity@iiml.ac.in, 3fpm13011@iiml.ac.in
Introduction
Over the past couple of decades, Internet marketing has come of age and has received
considerable attention as a field of research. Yadav and Pavlou (2014) synthesize the vast
body of research and classify current and possible future research avenues into four broad
categories – consumer-firm interactions, firm-consumer interactions, consumer-consumer
interactions and firm-firm interactions. In the space of firm-consumer interactions,
multichannel marketing has been identified as a potential area of research. The study
investigates consumer channel choice in a multichannel environment.
It has been contended that multichannel environment throws up completely new
challenges in consumer research as new channels – predominantly Internet-based retailing –
deploys tools like recommendation systems and social media messaging that affect important
consumer-related attributes like memory. Therefore multichannel consumer behavior cannot
be considered an extension of current consumer research with a mere change in context
(Dholakia et al. 2011). While consumer access to multiple channels leads to changed
behavior, product type too has an impact on channel choice. Girard and Dion (2010) validate
294
the search, experience and credence product classification framework and further show that
the classification influences the risk perceptions and purchase intentions for online and
physical stores. While there have been studies on search and experience products in the space
of multichannel consumer behavior, not much research has been conducted in the context of
credence products.
Credence products are defined as products for which the quality cannot be ascertained
after immediate use/consumption, but through continued use/consumption over a period of
time, constitute a significant proportion of consumer products (Darbi and Karni 1973). Some
examples of credence products include financial products, real estate, education, healthcare,
and food. Therefore, studying credence products from a multichannel perspective is
important and yet, has not received as much attention as it probably deserves.
This study aims at identifying various antecedents that drive channel choice for
credence products. Grocery, in particular, fruits and vegetables (F&V), which fall under the
category of credence products (Moser, Raffaelli and Thilmany-McFadden, 2011), constitute
the context of this study.
Grocery retail is an evolving sector in emerging markets. Newer sales channels are
being introduced even before traditional channels are completely evolved (Kervenoael,
Hallsworth & Elms, 2014), and India is a case in point with the number of online grocery
retailers increasing from 14 to 44 between 2013 and 2014 (USDA Report on Indian Grocery
Retail). In India, the market size for fresh produce is a whopping USD 22.5 billion
(Technopak Report on India’s Food Sector, 2014). Thus understanding the drivers of
consumer’s decision on channel choice is of significance.
Research Gap and Research Problem
From the retailer’s stand point, a grocery retailer can survive in the long term only if
there is repeat purchase (Hansen 2006). Some of the early work done in this area had almost
written off online grocery purchase attempting to identify reasons for failure of online
grocery retail in developed markets (Ring and Tigert, 2001). However, we see a number of
players in the online grocery space today and even big players like Amazon and Flipkart in
India, an emerging market, have made it public about their intentions to foray into this sector.
Thus it becomes pertinent and imminent to understand how the consumer reacts to the same
product – fruits and vegetables (F&V) being made available across multiple channels.
Extant literature considers grocery as a single category, but F&V and packaged food
products have different characteristics. A packed grocery product purchased online or offline
295
is not very different because even if it is purchased offline, the actual product cannot be seen,
touched and felt. Hence, such a product may be considered as a search product. But in the
case of F&V buying online and offline have different implications. If purchased offline, the
consumer usually makes the final decision about the product (F&V) after due examination
(i.e., physical inspection). But if purchased online, the consumer has no opportunity for
physical inspection of the item. Hence, there is a need to understand channel choice behavior
for F&V separately keeping in mind this distinction from grocery purchase as a whole.
Extant channel choice studies have considered situational variables, demographic and
psychographic drivers, and product and channel characteristics (Hansen 2004, 2007, 2008;
Rafiq et al. 2012, Ramus et al. 2008, Yeung, 2001). However, the question we attempt to
address is one of how a consumer, who has already accepted and adopted online buying
choose a channel for F&V, which are credence products. Therefore, this study also
contributes to the limited literature on channel choice for products with credence attributes.
Thus the research objectives that this study aims to address can be broken down into the
following questions:
1. How do consumers, who have already adopted online buying, choose a channel for
buying credence products (F&V being representative of credence products)?
2. What are the various antecedents that drive channel choice?
Based on the literature reviewed, we arrive at the following propositions which we
intend to test using qualitative research.
P1: The drivers of channel choice can be categorized into four categories of variables
namely situational variables, individual difference variables, product characteristics and
channel characteristics.
P2: Specific individual difference variables affect online channel choice.
P3: Specific product characteristic variables affect online channel choice.
P4: Specific channel characteristic variables affect online channel choice.
Research Methodology
Fourteen depth interviews are conducted in an urban setting with respondents
belonging to SEC A. Participants of the study have already adopted the Internet as a channel
for undertaking purchases (not necessarily grocery/F&V).
Qualitative research is used as a first step to obtain a better understanding of the way
in which the variables identified as part of the literature review play out, and help us in
testing the propositions that we have arrived at as part of the literature review. Also, this step
296
enables us to find out if some new variables that are not part of literature, emerge and might
need consideration.
Data Analysis and Results
A content analysis of the data collected through the qualitative interviews indicates
that the specific variables may be categorized into the four categories of variables –
situational, individual difference, product, channel characteristic – that are identified on the
basis of extant literature (Figure 1). Thus, we find support for P1.
Figure 1: Four Categories of Variables are Uncovered through the Depth
Interviews
A critical incident technique was used to identify critical incidents associated with
online and offline purchase of F&V (for each of the specific variables reported in Figure 1). A
total of 128 incidents were found constituting positive and negative experiences for various
variables across the 4 categories identified. Our findings indicate that the need for
sustainability emerges as an important factor for offline purchase, and not for online purchase
of F&V.
Shopping enjoyment forms an important driver of channel choice. F&V has credence
attributes and there are concerns regarding the long-term nutritional impact of consuming
these products, and hence consumers choose the offline channel. Thus there is support for
297
credence attributes being an important driver of channel choice. Highly involved consumers
tend to choose the offline channel and consumers with low involvement are seen to choose
the online channel. Product range is an important factor for choosing the offline channel over
the online channel. Thus, we find support for P2, P3 and P4.
Implications of the Study
Our study findings indicate that high involvement with F&V (as a product category)
leads to a choice of the offline channel and low involvement leads to the choice of online
channel. We also find evidence in that the need for sustainability compels individuals to get
involved with the product, thereby impacting the decision of channel choice. There is
evidence in the study that indicates that if an online retailer provides confidence to the
consumer about being eco-conscious, consumers do choose the online channel. Thus, the
implications of the need for sustainability on involvement and hence channel choice can be
considered to be the major contribution of this study. Also, this study validates that credence
attributes of products tend to drive the consumer to the offline channel.
Online retailers need to focus their efforts on enhancing convenience whereas offline
retailers’ emphasis should be to further work on providing convenience and at the same time,
provide avenues for enjoyment, sustainable practices while maintaining a sizeable product
range and product quality. These variables further buttress the idea that a retailer should
address these issues by being present across the online and offline channels so that a larger set
of consumer needs that drive channel choice can be addressed especially in the case of F&V
in particular, and in the case of credence products in general.
298
References
Dholakia, U. M., Kahn, B. E., Reeves, R., Rindfleisch, A., Stewart, D., & Taylor, E. (2010).
Consumer behavior in a multichannel, multimedia retailing environment. Journal of
Interactive Marketing, 24(2), 86-95.
EY India Report – “Pulse of Indian Retail Market”, 2014
Goldsmith, R. E., & Emmert, J. (1991). Measuring product category involvement: a
multitrait-multimethod study. Journal of Business Research, 23(4), 363-371.
Girard, T., & Dion, P. (2010). Validating the search, experience, and credence product
classification framework. Journal of Business Research, 63(9), 1079-1087.
Hansen, T. (2005). Consumer adoption of online grocery buying: a discriminant analysis.
International Journal of Retail & Distribution Management, 33(2), 101-121.
Hansen, T. (2006). Determinants of consumers' repeat online buying of groceries.
International Review of Retail, Distribution and Consumer Research, 16(1), 93-114.
Jayasankara Prasad, C., & Ramachandra Aryasri, A. (2011). Effect of shopper attributes on
retail format choice behaviour for food and grocery retailing in India. International Journal
of Retail & Distribution Management, 39(1), 68-86.
Konuş, U., Verhoef, P. C., & Neslin, S. A. (2008). Multichannel shopper segments and their
covariates. Journal of Retailing, 84(4), 398-413.
Kushwaha, T., & Shankar, V. (2013). Are multichannel customers really more valuable? The
moderating role of product category characteristics. Journal of Marketing, 77(4), 67-85.
Ramus, K., & Asger Nielsen, N. (2005). Online grocery retailing: what do consumers think?.
Internet Research, 15(3), 335-352.
Yadav, M. S., & Pavlou, P. A. (2014). Marketing in computer-mediated environments:
Research synthesis and new directions. Journal of Marketing,78(1), 20-40.
Zhang, J., Farris, P. W., Irvin, J. W., Kushwaha, T., Steenburgh, T. J., & Weitz, B. A. (2010).
Crafting integrated multichannel retailing strategies. Journal of Interactive Marketing,
24(2), 168-18.
299
Interrelation among sources of power in distribution channel: An
empirical analysis of North-eastern part of India
1
1
Pradip Sadarangani, 1Sushant Kumar
Indian Institute of Management, Shillong RGIIM, Mayurbhanj Complex,
Nongthymmai, Shillong-22, Meghalaya
Introduction:
Studies on Human’s thirst for power have been attracting increasing attention among researchers.
The most obvious reason for so much of extensive research is to understand and control the
behavior of different members. A stronger power position is viewed to empower a firm to
appropriate more of the available value in a business relationship (Cox, Watson, Lonsdale, &
Sanderson, 2004). Consequently, the power position is anticipated to be associated to firm
performance (e.g. Farris and Ailawadi, 1992, Ailawadi et al., 1995, Ailawadi, 2001, and
Messinger and Narasimhan, 1995).
The concept of power is considered vital to understanding the methods by which one channel
member can impact on the behavior of another member within its channel of distribution.
Although power should be clearly differentiated from influence strategy (Pradip Sadarangani
2013), the phenomena of power and influence, include a dyadic relation between two agents
(French & Raven 1959). In any distribution channel, Managing the conception and utilization of
the power is of great significance because integration of various activities of a different group of
independent organizational entities (a typical distribution channel) is an astounding task.
Although many researchers have studied the behavioral aspect of distribution channel
relationship in Individualistic developed nations (Stern and Reve 1980; Kale 1986), few
researchers have given attention to investigating the channel members’ behavior in collectivistic
emerging nations in South Asia. This is the motivation to study the interrelation among channel
power entities in a different contexts. This study has both theoretical and practical implication.
300
Regarding theoretical implication, this study contributes to literature by exploring the
interrelation of different power sources in a distribution channel in Indian context. It also studies
the assessment of the Trust and Satisfaction of channel members. Regarding practical
implication, this study explores to what extent members of a distribution channel may exert
sources of different power for an impactful change. This is the first study of its kind to explore
sources of power in north-eastern part of Indian subcontinent.
The five power sources of channel power namely, coercive, reward, expert, referent and
legitimate have been found to be independent of western context (Gaski 1986) but interdependent in Indian context (Pradip Sadarangani 2013). The relationship among five power
sources has not been studied in the North-eastern part of India.
In a channel context, the channel leader may offer a reward to a channel member on performing
certain work. A fresh state of the system is tempted by a promise of reward. For instance, an
increase in dealer’s motivation is induced by a promise of getting perks and incentive. Other
activities such as providing advertisement support, trade allowances, training or advice are an
example of exercising reward power. Reward power is non-coercive power source and is
considered to produce a better result than coercive power (Pradip Sadarangani , 2013).
(b) Coercive power- It is based on P's perception that O has the ability to mediate punishments
for him (French and Raven, 1959).
In a channel context, the channel leader can bring changes in the behavior of a channel member
by applying coercive power. This application of coercive power may include a delay in
supplying materials, reduce the quantity of supply, refusal to sell, charge a higher price or deliver
unwanted products. The power is considered effective in bringing desired change in behavior.
But there are some negative outcomes of exercising this power which may give rise to
resentment, conflict and may lead other members to form countervailing power (Pradip,
Sadarangani, 2013).
(c) Legitimate power- It is based on the perception by P that O has a legitimate right to prescribe
behavior for him (French and Raven, 1959).
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In a channel context, the channel leader may demand change in the certain behavior of a channel
member. The demand of leader has more than one of the bases of using legitimate power (Pradip,
Sadarangani, 2013). The legitimate power is the non-coercive power that is considered in
changing behavior. But if the attempted use of legitimate power which is outside the range of
legitimate power will decrease the legitimate power of that channel leader. It will also reduce the
attractiveness of channel leader.
(d) Referent power- It is based on P's identification (feeling of oneness) with O (French and
Raven, 1959).
(e) Expert power- it is based on the perception that O has some special knowledge or expertness
(French and Raven, 1959).
In a channel context, the channel leader is considered expert or possess some special knowledge
that is valued by other members. But the expert power fades away as soon as the other members
also acquire the special knowledge (Pradip, Sadarangani, 2013). In order to use the expert power,
the channel leader needs to innovate constantly and develop new expertness that can be valued
by other members.
Research Gap and Research Problem:
The study of interrelation between various power sources is very important to understand the net
impact of power sources. The impact of power sources on power, and other channel phenomena
may be more complex than has been considered empirically. In other words, each power source
may not only directly affect power, conflict, and satisfaction but also through the intermediation
of its effects on other sources of power. For example, though the direct impact of the reward
power source on power may be positive, if it acts to decrease other power sources (perhaps by
reducing the perception of expertness or legitimacy) its net effect may be weakened or even
negative. As an illustration, a manufacturer that grants rewards beyond a reasonable level may
appear foolish to dealers and hence less expert. Similarly, the use of coercion clearly could
reduce one's likeability or referent power source. (Gaski 1986). If O offers to reward P for
performing an impossible act, this will reduce (for P) the probability of receiving future rewards
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promised by O. Gaski (1986) described threats and promises are the communication variables
that may assist in the development of coercive and reward power sources.
Gaski (1986) first attempted to study the relationship among different power sources in western
context. The study concluded that (1) use of reward power source will have positive impact on
the expert, referent and legitimate power source and (2) use of coercive power source will have
an inverse impact on expert, referent, and legitimate power sources.
However, there are limited empirical researches to study the relationship among different power
sources in a distribution channel. We could find only one study by Pradip Sadarangani (2013)
that explore the relationship among power sources in Indian context. While acknowledging the
contribution made by Pradip Sadarangani (2013), we would like to highlight the major
differentiation in our study and other study. First, this study will use the dataset of North-eastern
part of India, in which culture is different than rest of India whereas other study used the data set
of southern part of India. Second, we suggest practical implications of the study that will support
channel members to design strategies accordingly.
Objective of the study:
This paper tries to analyze the interdependence between 5 power sources as identified by French
& Raven. Based on literature review, we can propose the following hypothesis:
H1: Reward power source and Coercive power source are significantly related.
H2: Reward power source and legitimate power source are significantly related.
H3: Reward power source and Referent power source are significantly related.
H4: Reward power source and Expert power source are significantly related.
H5: Coercive power source and legitimate power source are significantly related.
H6: Coercive power source and Referent power source are significantly related.
H7: Coercive power source and Expert power source are significantly related.
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H8: Legitimate power source and Referent power source are significantly related.
H9: Legitimate power source and Expert power source are significantly related.
H10: Referent power source and Expert power source are significantly related.
Research Methodology:
This study explores the possibility of establishing the relationship among different power sources
in a distribution channel. Although power and its sources in distribution channels are a relatively
well-researched topic, we could find only a few studies about the power sources and their
interdependence in distribution channels, especially in Indian context. Power is a complex
construct, and it is difficult to measure it objectively, and since it is our view that determinants of
power are multi-faceted, there is a need for an in-depth understanding of the practices among the
involved actors. The study uses the methodology that is adopted by researchers in past (e.g.,
Fraizer and Summers 1984; Rosenberg and Stern 1971; Pradip Sadarangani 2013) who studied
the relationship among power sources in a distribution channel from a dyadic relationship. The
continued validity of earlier studies and a suitable method to establish a relation with the latent
variable, we have used Structure Equation Model to establish the relationship. Data is collected
from the distribution channel of a public sector unit IOCL (Indian Oil Corporation Limited). All
the channel members are located in north-eastern part of the India.
Data Analysis and Results:
All the five scales have good internal consistency. Cronbach’s alpha coefficient is adequately
high for all the five scales. There is partial evidence of discriminant validity as correlation is
higher than the corresponding alpha coefficient in three cases. The result shows that sources of
power are inter-dependent in north-eastern-Indian context. It also suggests that five power
sources are not independent as suggested by French and Raven (1959).
Implications of the study:
The results of this study suggest that a possible way of balancing power in the distribution
channel relationship is to use a blend of coercive and non-coercive power resources. The power
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holder may exercise the coercive and non-coercive power sources to influence the behavior of
channel member and guide the distribution channel to act accordingly. It is also important for
both the power holder and the retailer to understand how the market offerings of the power
holder entity help achieve the goals and purposes of the retailer. Also, if the retailers delegate
some of their activities and responsibilities (power) to power holder, the retailer must see the
benefit in doing so. Power holder should exercise the power sources accordingly. The lack of
transparency in a distribution channel widens the gap among the channel entities. Power holder
may be required to bridge the gap so as to get the desired output of power exercise. For example,
the supplementary services offered by supplier require an integration of the supplier-retailer dyad
in certain activities. For this to be beneficial, the supplier must possess resources that make it
better suited to performing these activities and taking on these new responsibilities. The literature
on resource complementarity suggests that, by merging the resources of the firms or the entities
of a distribution channel to form an alliance, performance can be improved (Harrison, Hitt,
Hoskisson, & Ireland, 2001; Lin, Yang, & Arya, 2009). The paper also suggests exploring the
cultural aspect to understand the influencing factors of power sources. Depending on the changes
made to the way in which a firm exercises its power sources, the improvements, measured in
terms of higher performance, may benefit the supplier-retailer dyad to differing extents.
References:
French, J. R., Raven, B., & Cartwright, D. (1959). The bases of social power. Classics of
organization theory, 311-320.
Sadarangani, P. (2013). INTERRELATIONS AMONG A CHANNEL ENTITY’S POWER
SOURCES–EXPLORATORY STUDY IN INDIAN CONTEXT. Review of Strategic and
International Studies, 121.
Gaski, J. F. (1986). Interrelations among a channel entity's power sources: Impact of the exercise
of reward and coercion on expert, referent, and legitimate power sources. Journal of Marketing
Research, 62-77.
El-Ansary, A. I., & Stern, L. W. (1972). Power measurement in the distribution channel. Journal
of Marketing research, 47-52.
Ailawadi, K. L., Borin, N., & Farris, P. W. (1995). Market power and performance: a crossindustry analysis of manufacturers and retailers. Journal of retailing, 71(3), 211-248.
305
TRACK V
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CENTRALITY OF SOME SALIENT VARIABLES IN
CREATING ONLINE BRAND EQUITY
Arunima Rana, Anil Bhat and Leela Rani
Department of Management, BITS Pilani-Pilani Campus, Rajasthan-333031, India
Emails: arunima.rana@pilani.bits-pilani.ac.in / anilkbhat@pilani.bits-pilani.ac.in /
leela_rani@pilani.bits-pilani.ac.in
Introduction
Branding in digital age has changed drastically as the fundamentals of brand-consumer
connection are not the same. The consideration phase for any online purchase is complicated as
there is a myriad of information available to create awareness (Edelmann, 2010). Similarly,
loyalty, trust and association with a brand are created differently. This is an attempt to study
whether traditional way of building brand equity holds true for the online marketplace too and to
identify the crucial conventional elements and the new evolving factors that may drive online
brand equity.
Marketing mix elements that are also termed as the marketing activities of a firm are the roots to
create brand equity. These elements help customer in forming an opinion about a brand. The
opinion is formed at different levels; awareness association, trust, and loyalty (these are termed
as sources of brand equity). As the online market place is different from traditional market
place, a different set of marketing mix elements or marketing activities replaces traditional
marketing elements. Such elements can be termed as e-marketing mix elements. But the sources
of online brand equity remain unchanged as they are the individual perceptual measures.
Therefore, there are two set of antecedents to brand equity. One is e-marketing mix elements and
the other is sources of online brand equity. From the traditional frameworks available for offline
or traditional brand equity studies available, we have developed the following framework (refer
fig 1). The framework is based on Aaker‟s conceptual model and Yoo, Donthu and Lee‟s (Yoo,
Donthu, & Lee, 2000) systematic examination of marketing mix elements in creating brand
307
equity. Marketing activities significantly affect the brand equity dimensions (sources of brand
equity) and thus strengthen the brand equity.
Figure 1: Schematic representation of the online brand building process
Research Gap and Research Problem
Although many research studies have been conducted to understand how brands create revenue
for companies in the packaged goods industry, little is known about the way in which brand
equity is created and measured on the internet (Rios & Riquelme, 2010). Few researchers tried to
extend the model of packaged goods brand equity from offline to the online space while still
fewer researchers have tested that how internet marketing activities affect online brand equity. A
systematic approach to identify and understand sources of brand equity is largely lacking.
Exploration of the antecedents of brand equity and their relationship with the sources of brand
equity is the need of the hour.
Objectives of the Study
The purpose of this paper is to study whether traditional way of building brand equity holds true
for the online marketplace and to identify the crucial conventional elements and the new
evolving factors that may drive online brand equity. The study investigates the relationships
between e-marketing mix elements and sources of online brand equity. Though the relationship
between the marketing mix elements and sources of brand equity for offline or traditional brand
are well established in the literature but its trace is missing for the online brands.
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Research Methodology
To track this whole process of online brand equity formation, we have first identified the emarketing mix elements and then their relationship with the sources of online brand equity. The
first phase of the study that is an extensive literature review is done to identify the e-marketing
mix elements with the help of content analysis (Rana, Bhat, Rani 2015). The next phase consists
of reducing & confirming the list of e-marketing mix with the help of exploratory and
confirmatory factor analysis. We also attempt to confirm & explore existing/new relationships
with structure equation modelling.
The methodology for this study can be divided into two stages (refer fig 2). In the first stage,
expert survey has been done to identify the major e-marketing mix elements. The e-marketing
mix elements are the objective measures or the factual marketing activities and therefore are
captured using the help of experts. Experts are the consumers with more than 4-5 shopping
frequency per month selected using snow ball sampling and given a self-administered
questionnaire. The questionnaire contained fifty-seven items pertaining to thirteen e-marketing
mix variables. A total of one hundred and fifty responses collected. Exploratory factor analysis
using IBM SPSS 20 reduced the list of thirteen e-marketing mix variables and further we
confirmed the final list using confirmatory factor analysis. For confirmatory analysis we
collected a random sample of two hundred online shoppers from a university pool of four
thousand students. Convergent validity, indicator reliability and variance extraction estimates are
the other parameters that are measured. The confirmatory factor analysis and reliability-validity
measures are calculated using SAS university edition.
309
Figure 2: Schematic diagram depicting the methodology stages
In the second stage of the study, five hundred and eight random sample with replacement are
collected from the same university pool. Out of which four hundred and six responses are used in
this stage of the research. This time the questionnaire had two parts. One-part pertaining to the emarketing mix elements and the other part recording the sources of online brand equity. The emarketing mix element questionnaire had seventeen items reflecting six factors derived from the
first stage viz.
Customer relationship, customer value & benefit, content of the website,
Interactivity feature of the website, security-privacy and speed of navigation. The measures are
collected in a ten-point rating scale. On the other hand, the sources of online brand equity
questionnaire had twenty-four items pertaining to brand awareness, brand association, brand
trust, brand loyalty and brand equity. The responses are captured in a seven point likert scale. All
the questions are asked with respect to the top of the mind recall brands. Finally, we run structure
equation modelling using IBM SPSS AMOS 20.
The hypothesis pertaining to the relationships among e-marketing mix variables and sources of
online brand equity are organized in the second stage of the study.
310
Data Analysis and Results
The final model depicts direct and indirect relationships between the e-marketing mix variable,
sources of online brand equity and online brand equity. The derived e-marketing mix elements
are the structural attributes of a retail website. These are the objective measures or the actual
marketing activities performed by a retailer to form a perception in the mind of the customer
regarding the brand. The perceptual measures are the sources of online brand equity and can also
be called the subjective measures.
E-marketing mix element „customer support feature‟ evolved as a central structural element that
mediates the effect of e-marketing mix elements and the sources of online brand equity. Other
elements are content of the website, navigation speed, security-privacy, customer relationship
management and interactivity feature. Among the sources of online brand equity, brand trust
emerged as an important element that helps in building online brand equity.
Implications of the Study
This study has contributed in terms of giving an insight into the centrality of some selected
variables; customer care and relationship, content of the website, customer support feature,
interactivity feature, navigation speed and security-privacy in creating online brand equity. Also
the interaction effect among the sources of online brand equity suggests an incremental process
of brand equity formation in the online market place.
The proposed model is only limited to online retailers, it can be further modified or tested for
online travel-tourism websites and online banking websites.
311
References
Aaker, D. a. (1996). Measuring brand equity across products and markets. California
Management Review, 38(3), 102–120.
Bart, Y., Shankar, V., Sultan, F., & Urban, G. L. (2005). Are the Drivers and Role of Online
Trust the Same for All Web Sites and Consumers? A Large-Scale Exploratory Empirical Study.
Journal of Marketing, 69(4), 133–152.
Bertea, P. (2010). Investigating the Role of Brand Awareness in Reducing the Perceived Risk
Associated to Online Buying of Tourism Services. In International Conference “Marketing-from
information to decision” (pp. 9–19).
Christodoulides, G., & Chernatony, L. De. (2004). Dimensionalising on- and offline brands‟
composite equity. Journal of Product & Brand Management, 13(3), 168–179.
Christodoulides, G., & Chernatony, L. (2010). Consumer Based Brand Equity Conceptualization
& Measurement: A Literature Review. International Journal of Market Research, 52(July), 44–
53.
Edelmann, D. C. (2010). Branding in the Digital Age: You‟re Spending your Money in All the
Wrong Places. Harvard Business Review, 8.
Rana, A., Bhat, A., Rani, L., Boschetto, A., & Bottini, L. (2015). Journal of Research in
Interactive Marketing A classificatory scheme for antecedents of the sources of “ online brand
equity .” Journal of Research in Interactive Marketing, 9(6), 262–298.
Rumbull, D., Gay, G., & Mazur, J. (1992). Students‟ Actual and Perceived Use of Navigational
and Guidance Tools in a Hypermedia Program. Journal of Research on Computing in Education,
24(3), 315–328.
Tsao, H. Y., Pitt, L. F., & Berthon, P. (2006). An experimental study of brand signal quality of
products in an asymmetric information environment. Omega: The International Journal of
Management Science, 34(4), 397–405.
Winch, G., & Joyce, P. (2006). Exploring the dynamics of building, and losing, consumer trust in
B2C eBusiness. International Journal of Retail & Distribution Management, 34(7), 541–555.
Yoo, B., Donthu, N., & Lee, S. (2000). An Examination of Selected Marketing Mix Elements
and Brand Equity. Journal of the Academy of Marketing Science, 28(2), 195–211.
312
Influence of Facebook engagement on Car Sales –
Indian Case Study
Balamurugan A.1 and Prof. Sanjeev Varshney1
1
Xavier School of Management (XLRI)
Circuit House Area (East), Jamshedpur, Jharkhand-831001
Ph: +91-657-6653333/Fax: +91-657-2227814
Emails: bala@astra.xlri.ac.in / sanjeevvarshney@xlri.ac.in
Introduction:
The rise of internet has given way for the rapid proliferation of social media platform that
provide avenues for user engagement by sharing content, opinion and networking with other
users. Such opinions, regarding a product or a service, voice the associated customer
sentiment and get shared in the online platform to reach the wider audience rapidly as it is not
bounded by time and space. This spread of word of mouth on online platform is referred to as
electronic word of mouth (eWOM) communication and is facilitated by social networking
sites like Facebook and Twitter, where the users connect and engage to share their opinion.
The prospective customers seek such opinions during information search to aid the purchase
decision. Hence marketers have adopted online platforms as a potential channel to promote
the brands and communicate with the consumers. This enables the marketer to not only
communicate to the consumer as in the case of traditional media but also hear the consumer‟s
opinion and act accordingly to boost the product performance. So we attempt to find the
predictive ability of eWOM communication on sales, which will aid marketers to gauge and
predict future product performance.
Research Gap and Research Problem:
Existing studies predict sales with eWOM using twitter data for low involvement products
like books (Dijkman, Ipeirotis, Aertsen, & van Helden, 2015) and movie ticket sales (Asur &
Huberman, 2010) as well as high involvement product like iphone (Lassen, Madsen, &
Vatrapu, 2014) in the context of developed countries. Voortman (2015), in studying the
correlation of car sales and Google trends, recommends to focus on variables like Facebook
313
posts that has higher amount of information than Google trends for better prediction.
Similarly, another research (Mukkamala et al., 2013) shows a positive correlation between
Facebook measures- likes and comments and quarterly revenue. Therefore, this calls for
research to be done on Facebook wherein the volume of engagement is the highest and
second to no other platform. As of May 2016, the top twenty Indian brands have on an
average of about 7.8 million fans interacting 0.46 million times in Facebook where most
users interact through reactions (previously “likes”) for the marketer generated posts.
Facebook is used to create the required hype to introduce the product and this contributes
towards deeper penetration of the marketing activity which in turn affects sales. So it would
be interesting to understand the influence of Facebook customer engagement on sales over a
product‟s lifecycle. As the Indian auto industry has the third highest fan base in Facebook
with a total count of about 94 million fans following Ecommerce and electronic industry, our
work funnels down to study the influence of Facebook customer engagement on car sales in
India.
Objectives of the Study:
The objective is to study the influence of eWOM on sales with reference to its change points
for varying product performance. For this, we review about change points with respect to
word of mouth (WOM) communication and sales. These change points are the „strategic
inflection points‟ (Brown, 2005) beyond which the current trend changes drastically. One end
of this change is defined by the concept of tipping point (Barash, Cameron and Macy, 2012)
and the other end by the concept of tripping point (Brown, 2005). From the various studies,
one shall conclude that the tipping and tripping point are strategic inflection point from which
the diffusion increases or decreases drastically to a level and sustains at that level. Existing
research claim that word-of-mouth communication influences the diffusion (Arndt, 1967) to
happen rapidly and reach the tipping point. And a brand‟s failure to adapt with the changes as
the cause for decreased sales beyond tripping point (Brown, 2005). Our study investigates the
impact of eWOM through customer engagement in Facebook on sales with respect to the
change points in the lifecycle stages of car brands in Indian context. Hence we posit, for
Tipping Point:
H1: eWOM through FB engagement leads sales during initial growth phase
H2: eWOM tipping point will lead to sales tipping point.
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Similarly, the decrease in sales is influenced by the increase in negative WOM
communication (Lee, Park and Han, 2008). Hence we posit for Tripping Point:
H3: eWOM through FB engagement leads Sales for products with declining sales
H4: eWOM tripping point will lead Sales tripping point during declining phase
Research Methodology:
Facebook users engage through likes, comments and shares. The user expresses positive
feeling about a post content by liking it or sharing it with others. Users also share opinion by
commenting on the post. The comments can be loaded with positive, negative and neutral
sentiments that reflect one‟s opinion. These metrics are looked individually and in
combination using BuzzRank Interaction (Peters et al., 2013) and P-N ratio (Speriosu et al.,
2011). The BuzzRank Interaction is calculated as the sum of likes, twice the comments and
thrice the shares. While the P-N ratio is calculated as the ratio of number of positive and
negative comments. The user engagement data from Facebook is extracted using Netvizz
application and the associated comment sentiment is obtained using SentiStrength, a lexiconbased sentiment analysis tool that is used to study the Facebook engagement. The tool assists
in segregating the positive sentiment and the negative sentiment of each text, with the help of
in-built pre-defined set of words, by assigning scores in the range of -5 to -1 for negative, 0
for neutral, and +1 to +5 for positive sentiment words in the comment.
We consider three Indian car brands based on sales pattern, Maruti Swift reflecting the
tipping point, Maruti Alto with stable sales having only change points and Tata Nano
reflecting the tripping point. The chosen brands has to be either introduced or introduced with
incremental innovation after 2010, as Facebook engagement was not pronounced earlier.
Though we intended to choose brands across car segments, the higher priced segment like
sedan and SUV had limited engagement on Facebook. Thereby, directly excluding the
influence of Facebook engagement on the sales of high end category cars. The sales data of
the entire product life cycle of a brand is considered to find the significant change points. The
engagement data happening at a time gap of one year before and after the sales change point
is only considered, as 91% of car purchasing decision happens within one year of purchase
intention (Putsis and Srinivasan, 1994).
315
Data Analysis and Results:
The hypotheses were tested using cross correlation function of time series as a simple
correlation is not sufficient to capture the effect (Dijkman et al., 2015). If there is a
significant cross correlation between the series, then the series were further analysed for
structural break points using change point analysis. Using the structural break points and the
lead/lag effects obtained from cross correlation function, we identify the significant change
points occurring in the eWOM and sales series. However, as the sales data of 2 out of the 3
brands did not turn out to be stationary, further analysis could not be performed. And for the
brand that had both sales and FB engagement metrics stationary, the null hypotheses failed to
be rejected. This is in contrast to the expected results that Facebook engagement will lead
sales throughout the product life cycle, though the associated causal sentiments will vary.
Therefore, our study finds that Facebook engagement has no influence on car sales in India
during the considered period. The acceptance of information in social media depends on the
quality, credibility, usefulness, need of information and attitude towards information (Erkan
and Evans, 2016). We observed that the overall Facebook engagement was less pronounced
for higher priced car segments like sports utility vehicle and sedan, showing that the
prospective buyer is not influenced by Facebook engagement while resorting to multiple
sources of information during decision making. This might possibly trickle down to relatively
lower priced car segments as well where one or more characteristics of information
acceptance for purchase decision may be absent.
Implications of the Study:
Though the study based on literature presumed Facebook engagement as a factor to influence
in crossing the tipping point of sales, the findings could only factor out the influence of
tipping and tripping point and the dependence on brand life cycle stages. .This calls for
research to be done on the components of eWOM (especially through Facebook) that helps in
predicting product sales. Though the research does not intend to propagate the idea of
ignoring the Facebook fan page users and their sentiments, the result suggests that the
practicing managers need to look at the effectiveness of the social media strategy and adapt
with respect to their brand and industry.
316
References:
1. Arndt, J. (1967). Role of product-related conversations in the diffusion of a new
product. Journal of marketing Research, 291-295.
2. Asur, S., & Huberman, B. A. (2010, August). Predicting the future with social media.
In Web Intelligence and Intelligent Agent Technology (WI-IAT), 2010
IEEE/WIC/ACM International Conference on (Vol. 1, pp. 492-499). IEEE.
3. Barash, V., Cameron, C., & Macy, M. (2012). Critical phenomena in complex
contagions. Social Networks, 34(4), 451-461.
4. Brown, S. (2005). Tripping Point The. Marketing Research, 17(1).
5. Dijkman, R., Ipeirotis, P., Aertsen, F., & van Helden, R. (2015). Using Twitter to
predict sales: a case study. arXiv preprint arXiv:1503.04599.
6. Erkan, I., & Evans, C. (2016). The influence of eWOM in social media on consumers‟
purchase intentions: An extended approach to information adoption. Computers in
Human Behavior, 61, 47-55.
7. Lassen, N. B., Madsen, R., & Vatrapu, R. (2014, September). Predicting iphone sales
from iphone tweets. In Enterprise Distributed Object Computing Conference (EDOC),
2014 IEEE 18th International (pp. 81-90). IEEE.
8. Mukkamala, R. R., Vatrapu, R., & Hussain, A. (2013). Towards a formal model of
social data. IT-Universitetet i København.
9. Peters, K., Chen, Y., Kaplan, A. M., Ognibeni, B., & Pauwels, K. (2013). Social
media metrics—A framework and guidelines for managing social media. Journal of
interactive marketing, 27(4), 281-298.
10. Putsis Jr, W. P., & Srinivasan, N. (1994). Buying or just browsing? The duration of
purchase deliberation. Journal of marketing research, 393-402.
11. Speriosu, M., Sudan, N., Upadhyay, S., & Baldridge, J. (2011, July). Twitter polarity
classification with label propagation over lexical links and the follower graph.
In Proceedings of the First workshop on Unsupervised Learning in NLP (pp. 53-63).
Association for Computational Linguistics.
12. Voortman, M. C. (2015). Validity and reliability of web search based predictions for
car sales.
317
DIGITAL INTERVENTIONS TO REACH THE
FARMERS’ SEGMENT
Dr.B.Poongodi and Dr. Mary Cherian
1
KCT Business School
Chinnavedampatti, Coimbatore, PIN-641 049, India.
Email : poongodi@kctbs.ac.in / marycherian@kctbs.ac.in
Introduction
With the diffusion of technology in every field, use of ICT tools has a great scope in marketing
of agricultural inputs and produces too. Paddy farmers in South India, especially in TamilNadu
are the major consumers of seeds, major and minor fertilizers, pesticides, etc where a number of
government, quasi government and private companies operate. This paper attempts to examine
the diffusion of selected ICT tools viz., Voice Messaging Services, Cable TV among the paddy
growers in TamilNadu. Though agriculture is the mainstay, the rural population is still lagging
behind in the usage of modern ICT tools in India. Paddy is the principal crop extensively
cultivated in almost all the districts of state of Tamil Nadu. With the rising demand in the global
market, the adoption and diffusion of Information and Communication Technology (ICT),
System of Rice Intensification (SRI), Integrated Pest Management (IPM) practices have major
role in increasing the productivity. This study examines the effective use of modern ICT tools in
dissemination of information presently, with special reference to Voice SMS.
Research Gap and Research Problem
With the diffusion of technology in every field, use of ICT tools has a great scope in marketing
of agricultural inputs and produces too. A significant portion of Indian population is farmers and
agricultural labors which was 22% in 2014 and another study in the same year by the center for
study of developing Societies, Delhi reveals that mobile phone penetration among south Indian
farmers was 77 %. Paddy farmers in South India, especially in TamilNadu are the major
consumers of seeds, major and minor fertilizers, pesticides, etc where a number of government,
quasi government and private companies operate. This paper attempts to examine the diffusion
318
of selected ICT tools viz., Voice Messaging Services, Cable TV among the paddy growers in
TamilNadu. The study area comprises of the three major rice producing districts from the three
selected National Agriculture Research Project (NARP) agro-climatic zones of the state, viz.,
Cauvery Delta zone, Southern High Rainfall zone and North Eastern zone that covers all the
major areas of paddy cultivation in this state. Though a vast research on ICT in Agriculture has
been done in the past decade, there is limited research done on the penetration of mobile usage
and mobile based services in agriculture. Crop specific study viz. Paddy of ICT applications,
particularly voice SMS in agriculture has also been less covered. To address this research gap,
the study was taken up and primary data was collected by administering a structured
questionnaire.
Mobile phones are becoming an essential device for all types of users irrespective of the
occupation. In India mobile technology has unleashed a paradigm shift in the communication
medium to reach out to the masses. Voice based mobile services has been in the use to reach the
farming community as it can easily reach the even people those can‟t read or write. As paddy is a
major cereal crop that contributes significantly in agricultural production and the study is
restricted to paddy farmers across the state of Tamil Nadu. Tamil Nadu is one among the top ten
rice-producing states in India. The study aims at estimation of Voice SMS services, Cable TV
Services introduced by RFIS for the paddy farmers across different agro-climatic zones. A
primary survey was conducted using questionnaire among the randomly chosen 1000 paddy
farmers. Notable ICT tools that include Cable television, radio, mobile phones, Voice SMS,
social media, landline, computer, online information services were studied across these 3
different districts in various agro-climatic zones. where paddy is extensively cultivated.
Objectives of the Study
1. To study the age and gender profile of the Paddy Growers
2. To compare the usage pattern of Voice SMS, Cable TV and Whatsapp across age groups
and gender
3. To evaluate the impact of Voice SMS in terms of Savings
4. To measure the diffusion of „WhatsApp‟ Instant Smart Messaging across gender
5. To estimate the penetration of Voice Messaging Services across the Age Categories.
319
6. To measure the impact of message attributes on the perceived relevance of the advisory
services.
7. To classify the number of variables into a few factors.
Research Methodology
The research design adopted was descriptive aiming at describing the characteristics of the
population and the diffusion of the Voice SMS. The universe is all the paddy farmers who
received the services of voice SMS in the state of TamilNadu for Agricultural Purposes.
Approximately 10 per cent of the population is fixed as the sample size. The sample size is 1000
farmers are identified for data collection using purposive sampling method. A sample of 1000
farmers was chosen for the study based on various age groups of the farmers. Interval and
ordinal scales were used besides a few open-ended questions for data collection by interview
method and appropriate statistical analytical tools were used. The study has analyzed and
interpreted the data pertaining to the objectives stated here that includes the use of simple bar
charts, cross tabulation, descriptive analysis, ANOVA and Regression Analysis. The Cronbach‟s
alpha score of 0.931 showed high reliability.
Data Analysis and Results
The study has revealed that the age variable influences the adoption of technology by the paddy
farmers. Farmers of the age group 40-50 years value the VMS more than their other age
counterparts. The receipt of Voice SMS advisory services has made a positive impact on the
savings on almost all the paddy farmers. However, one third (29 %) of the farmers are not
satisfied with the length of the message received by Voice SMS. This finding clearly reveals the
need for advisory services among the Paddy Farmers. It was a surprise to note that only less than
5 % of the paddy farmers use whatsapp which could be attributed to two reasons viz., Ownership
of Smart Phone and Internet Services. Though, it could be also interpreted that 4 % usage is a
beginning for mobile based social media. Around 42 % of the farmers of the Paddy farmers have
expressed interest to receive advisory services for other crops too. An investigation into other
crops normally sown by Paddy farmers will help agro-input companies to develop crop specific
services to this population. Communication through Cable TV seems to have highest reach for
320
age group 40-50 years (39%) age category when compared to other age groups. Cable TV
viewership is slightly higher among the female farmers than male farmers. Exploratory factor
analysis has grouped the variables as given in the next page.
Implications
The present study has brought relevant findings to the marketers of agricultural-input and agrobased companies by means of digital interventions. Though digital marketing tools comprise of
digital technologies mainly on the internet, it also include mobile phones, display advertising and
other digital medium. In this context, the study has focused on estimating the penetration of
voice messaging services among the paddy farmers and measuring the impact of message
attributes on the relevance of such services. Farmers and agriculture labors constitute 22 per cent
of Indian Population and majority of them use mobile phones. As consumers of agricultural
inputs such as seeds, pesticides, fertilizers, agricultural implements, farmers are the major
consumers. Nevertheless not all modes of digital marketing effectively reach the farmers‟
segment. Specific digital communication such as voice short messaging services for the farmersconsumer segment is an effective and handy tool to reach. Though, whatsapp is popular among
the general consumer population it has its own constraints to penetrate the farmers‟ segment.
Major constraints include possession of smart phone and affordability to internet services.
Marketers can promote their product/service offers, follow-up, advisory services, etc. through
voice message to reach the farmers segment.
321
References
1. B.C.Barah, (2009), “Economic and Ecological Benefits of System of Rice Intensification
(SRI) in TamilNadu”, Agricultural Economics Research Review, Vol.22 July-December
2009, 00209-214
2. Mugwisi, Tinashe, Mostert, J., Ocholla, D.N., (2015), “Access to Utilization of
Information and Communication Technologies by Agricultural Researchers and
Extension Workers in Zimbabwe”, “Information Technology for Development”, Vol 21
Issue 1, PP 67 – 84.
3. Directorate
of
Economics
and
Statistics,
Ministry
http://mospi.nic.in/Mospi_New/upload/SYB2015/ ch8.html
of
Agriculture,
4. Sanjay Kumar, et al, (2014), “State of Indian Farmers – A Report”, Centre for the Study
of Developing Societies (CSDS), Delhi.
322
Role of electronic word of mouth content and valence in
influencing online behavior and digital marketing strategy –
applying deductive analysis approach
Gobinda Roy1, Dr. Biplab Datta1*
1
Vinod Gupta School of Management, Indian Institute of Technology Kharagpur,
West Bengal, Pin Code- 721302.
Phone: 91-3222-283888/ Fax: 91-3222-278027
Emails: gobinda.roy@gmail.com / bd@vgsom.iitkgp.ernet.in
* Corresponding Author
Introduction
Along with increasing popularity of Internet and mobile services, the ambitious “Digital India”
plan (MYGOV, 2016) creates a nationwide initiative to bring more people on online platform.
This impetus would help people not only use internet as an information source, but also
encourages them to use internet as popular shopping media. Recent research indicates that
customer gave more importance to online reviews websites (52%) than review from
family/friends (49%) and company staffs (12%) (Floyd, Freling, Alhoqail, Cho, & Freling,
2014). Thus electronic word of mouth (eWOM) popularly called online review becomes an
aiding tool for online users to evaluate and purchase a product online. Hence, firms are investing
more in marketing budget for generating and managing eWOM as a marketing tool for products
sales (You, Vadakkepatt, & Joshi, 2015). Lately many marketers have been using eWOM
communication medium in the formulation of digital strategy for brand building (Kim &
Johnson, 2016).
Research Gap and Research Problem
Earlier research studied how various eWOM characteristics such as valence (type of online
review), volume (number of reviews), and digital platform affected purchase behavior (Cheung
323
& Thadani, 2012). Previous research mainly focused on analyzing roles of positive and negative
WOM valence on consumer behavior and sales (Chevalier & Mayzlin, 2006). Limited focus was
given to understand roles of neutral WOM valence in online context in India. Neutral WOM
could be of two types: first type called mixed neutral WOM (MNWOM) which contains both
pros and cons details of a product/service; second type called indifferent neutral WOM
(INWOM) which contains only product/service detail. There is a gap in analyzing how mixed
neutral WOM valence consisting of both positive and negative voice (review) of customer
affects customer attitude towards eWOM credibility and adoption.
Similarly, eWOM valence becomes credible when reviews are presented with useful and relevant
information. Extant research mostly focused on text based online reviews (Daugherty &
Hoffman, 2014). However, limited research has been conducted to study the roles of rich eWOM
content on purchase intention and customer engagement. Similarly, extant research studies are
yet to examine how to use eWOM valence and content in formulating digital strategy.
Hence, against the backdrop of above discussion following research questions remain largely
unexplored in Indian context:
Research question 1: How does eWOM valence (mixed neutral) affect eWOM credibility and
adoption?
Research question 2: How do different types of rich eWOM content influence eWOM credibility,
adoption, and purchase intention?
Research question 3: How does eWOM (especially valence and content) help in formulating
digital marketing strategies?
Objectives of the study
Mixed neutral WOM
It has been found that pros and cons detail in online review make eWOM more trustworthy as
compared to only positive or only negative review. In fact, mixed neutral WOM (MNWOM)
positively affects consumer motivation to process online review information (Tang, Fang, &
Wang, 2014). Thus, these recent studies lead to testing the following research objective:
324
Research objective (RO) 1: To study how mixed neutral eWOM affect eWOM credibility and
adoption.
Rich eWOM content
Online review content presented in a clear format was found to enhance purchase intention of
online consumers (Bahtar & Muda, 2016). Recent research examined that the “electronic
window dressing (EWD)” features such as external links, images, and embedded technology in
eWOM content improved entertainment value of message. Thus, these recent studies also lead to
test the following research objective:
Research objective (RO) 2: To study the effect of eWOM content on eWOM credibility,
adoption, and purchase intention.
eWOM for Digital marketing strategy
Careful analysis of eWOM valence and related comments can help marketers in forming
marketing strategies. Hence, marketers can delve into eWOM content for analyzing users’
requests, product usage experience and critical comments on new products launches, and this
helps in implementing service/product innovation (Andreassen & Streukens, 2009) and selecting
right digital content and media channel.
Research objective (RO) 3: To study the effect of eWOM content and valence in forming digital
marketing strategy.
Research methodology
In this study, qualitative research method was used in two phases. In the first phase, inductive
approach (Bryman & Bell, 2013) was used to conduct in-depth unstructured and semi-structured
interview of experts from different fields. Unstructured interview was used to gather expert
views on two new constructs such as roles of mixed neutral WOM and rich eWOM content.
After few unstructured interviews, rest of the interviews was conducted in semi-structured mode.
In this phase, “Grand Tour Questions” and “Prompts” were used to engage experts to share their
real life experience and knowledge about the constructs (Leech, 2002). It was found that
325
deductive approach helps in building a foundation with strong validity and reliability. Hence, in
the second phase, deductive approach was used with prior formation of research questions and
objectives for qualitative analysis of interview data.
Sampling and sample size
In this case, an individual (expert) representing a small organization was considered as unit of
analysis. Selection of sample unit was based on accessibility, resource and time availability.
Research has been designed to confirm reliability, variability, and generalizability.
Many social researchers advised small sample size for conduction expert interview. This helps in
maintaining close interaction and engagement with small number of respondents in a natural
setting. Hence, in this study, purposive sampling was used to select 14 experts from diverse
fields, and interviews were conducted in in-person and telephonic mode.
Demographic details of experts
Items
Description
Number of experts from Education institution
3
Number of experts from IT companies
3
Number of experts from online retail
4
Number of experts from Legal field
2
Number of experts from Telecom domain
2
Data collection
Data collection protocol ensures that data should be collected by using various methods and
sources in order to confirm triangulation. Researchers have used expert interview, observation,
and archival data from leading e-commerce platform.
Field data collection was done using
a) Field note
b) Audio transcription
326
Data analysis and results
Data have been analyzed using a framework representing how customers’ voice in the form of
eWOM valence and content helps firms in developing digital marketing strategy.
During interviews, questionnaire were asked to each respondent for detailed views on eWOM
valence and volume. Major questions focused on how they analyzed online reviews to generate
more insights about customer attitude towards eWOM. Experts also shared their views on
marketing tactics in order to engage customers for eWOM generation and propagation (See
Table 1).
Table 1. Customers’ perception about eWOM and strategic response of firms
eWOM Valence (Mixed neutral)
eWOM content
Customer
1) Too many positive or negative 1) Customer perceives that review with
perception
reviews affect credibility of online texts and images improve their awareness
review. Customer feels many positive for proper decision making.
reviews
may
be
generated
by 2) For technology products, video reviews
marketing efforts (not actual customer are more helpful.
voice).
3) Video or image review should be short
2) Customer generally perceives that and relevant as they don’t have time to
many negative may be generated by watch for long time.
competitors.
4) Reviews presented with clear format
3) Review with pros and cons details helps them to evaluate the product/service.
enable
them
to
make
purchase
decision.
Marketers'
1)
Highly
satisfied/dissatisfied 1) Firm should allow customer to upload
tactics
customer generally leaves feedback. video and image reviews. In that case,
Marketers should encourage large customers would feel their voices are
number
of
moderately
satisfied honored and prospects would feel contents
customers to leave mixed feeling about are genuine.
the
products/firms.
Theses
mixed 2) Firms should analyze the video and texts
feedback (voice) improves platform contents and especially look for negative
327
and product credibility.
comments and customers suggestions. This
2) Firms should make standard and helps service innovation.
clear valence format which requires 3) Firms should not censure quality
customer to share both pros and cons negative and mixed neutral review content.
details. This encourages customers to In fact, their presence would improve
leave their voice online.
platform credibility.
Content analysis of expert views has revealed the fact that 75% people feel that review is
genuine when it shared positive and negative facts with proper justification. Similarly, customers
become interested in reviews when they find reviews are discussed with suitable image and
video. However, 60% experts (see Table 2) feel that video of product review should be short and
relevant.
Table 2. Experts' views on customers’ perception towards MNWOM and eWOM content
Description
Score
% of experts feel that firm should analyze online reviews
(online voice) for service innovation
80%
% of experts feel that customers expect video reviews from firm
should be short and relevant
60%
% of experts feel that should encourage customers through
incentive for leaving detailed and useful feedback.
65%
% of experts feel MNWOM is important in influencing eWOM
75%
credibility and adoption
% of experts feel rich eWOM is important in influencing
67%
eWOM credibility and adoption
Implications of the Study
Research findings from the above qualitative analysis confirmed the fact that both mixed neutral
WOM and rich eWOM content positively affect eWOM credibility, adoption and purchase
intention. Above findings suggest that marketers should continuously monitor and analyze the
328
customer online voice for service and product innovation. Since mixed neutral WOM with
detailed review content from actual users enhanced eWOM credibility, company should
encourage repeat customers to write detailed online review through incentive programs. This will
helps firm in brand building. This study presents the important role of content for eWOM
generation and customer engagement. Hence, this finding helps marketer to develop digital
content marketing strategy for engaging clients.
Theoretical implication: This study highlighted importance of mixed neutral WOM and rich
content in Indian context. However, these new factors are yet to be explored with the help of new
marketing theories. This can lead to the development of new market related theories for
explaining new eWOM characteristics.
References
Andreassen, T. W., & Streukens, S. (2009). Service innovation and electronic word-of-mouth: is
it worth listening to?. Managing Service Quality: An International Journal, 19(3): 249-265.
Bahtar, A. Z., & Muda, M. (2016). The Impact of User–Generated Content (UGC) on Product
Reviews towards Online Purchasing–A Conceptual Framework. Procedia Economics and
Finance, 37: 337-342.
Bryman, A., & Bell, E. (2013). Business Research Methods: Oxford University Press.
Cheung, C. M., & Thadani, D. R. (2012). The impact of electronic word-of-mouth
communication: A literature analysis and integrative model. Decision Support Systems, 54(1):
461-470.
Chevalier, J. A., & Mayzlin, D. (2006). The effect of word of mouth on sales: Online book
reviews. Journal of marketing research, 43(3): 345-354.
Daugherty, T., & Hoffman, E. (2014). eWOM and the importance of capturing consumer
attention within social media. Journal of Marketing Communications, 20(1-2): 82-102.
Floyd, K., Freling, R., Alhoqail, S., Cho, H. Y., & Freling, T. (2014). How online product
reviews affect retail sales: A meta-analysis. Journal of Retailing, 90(2): 217-232.
Kim, A. J., & Johnson, K. K. (2016). Power of consumers using social media: Examining the
influences of brand-related user-generated content on Facebook. Computers in Human
Behavior, 58: 98-108.
Leech, B. L. (2002). Asking questions: techniques for semistructured interviews. Political
Science & Politics, 35(04): 665-668.
329
MYGOV.
(2016).
Digital
India.
https://www.mygov.in/group/digital-india/
Retrieved
10/08/2016,
2016,
from
Tang, T., Fang, E., & Wang, F. (2014). Is neutral really neutral? The effects of neutral usergenerated content on product sales. Journal of Marketing,78(4): 41-58.
You, Y., Vadakkepatt, G. G., & Joshi, A. M. (2015). A meta-analysis of electronic word-ofmouth elasticity. Journal of Marketing, 79(2): 19-39.
330
Mobile devices for shopping: A Case of Multisided Platform
Rakhi Thakur
S. P. Jain Institute of Management & Research, Inside Bhavans College Campus,
Munshi Nagar, Dadabhai Road, Andheri West, Mumbai - 400 058,
Phone: +912261454300
Email: rakhi.thakur@spjimr.org
Introduction:
The twenty-first century has seen a paradigm shift in the retail industry by rapid diffusion
of web-based technologies. Brick and mortar retailers venturing into e-retail followed by the
emergence of pure-play e-retailers changed the retailing landscape in the first decade. The
second decade is witnessing the emergence of mobile retailing as the new avatar of e-retailing.
Online retailers are increasingly targeting avid users of smartphones to expand their reach
effectively by making huge investments in promoting mobile shopping. Mobile shopping is an
advanced m-service that allows customers to browse or purchase products and services from
retailers via mobile devices anywhere, anytime (Groß, 2015; Yang and Kim, 2016). Unique
features including ability to gather information on the spot from multiple sources, check on
product availability, special offers etc. to make purchase decision led to fast adoption of mobile
shopping (Lai et al., 2012). In Indian marketplace model mobile retail is a case of multi-sided
platform where retailers provide a platform to merchants, advertisers and shoppers to interact and
make fruitful transactions.
Research Gap and Research Problem:
Initial adoption of mobile shopping and similar technologies have received considerable
attention from researchers across the world (Agrebi and Jallais, 2015; Wang et al., 2015; Yang
and Kim, 2012). With the base level already achieved in understanding the drivers of initial
adoption, the focus for practitioners as well as academicians is now shifting towards customer
loyalty. With increasing focus on post-adoption continuance and advocacy towards the Internet
and mobile channels, there is a need to develop new conceptual models in this space.
331
1
Objectives of the study:
This study is aimed at exploring role of satisfaction and self-efficacy in building loyalty to
mobile shopping with specific focus on fashion and lifestyle retailers. Towards this aim, the
study develops and validates an empirical model to investigate role of satisfaction and selfefficacy in building customer loyalty.
The focal constructs of the model are satisfaction as the affective component (Oliver,
1980), and self-efficacy as the cognitive component (Bandura, 1982, 1997) acting as predictors
of loyalty. Usability of the mobile interface (studied through aesthetics and navigability), trust in
retailer and fulfilment service experience act as antecedents while loyalty is captured through
continuance intention and word of mouth as consequences.
Research methodology:
The study employed multi method research for development and validation of proposed
research model. To augment the available literature, interviews were conducted with four
industry professionals working with leading online retail organisations and two academicians
with research interests in the areas of e-commerce, and mobile commerce. A research model was
then developed based on the review of related literature and in-depth interviews. The proposed
model was empirically validated by administering the research instrument to current users of
mobile shopping applications. A set of 421 complete and usable responses were received out of
the total 1,500 questionnaires distributed. The qualified respondents were current users of mobile
devices for shopping (31% female; 66% below 30 years of age; 82% with professional
experience of over 5 years). This sample size exceeds the recommended minimum for such
research (Bentler and Chou, 1987; Hair et al., 2010).
Data analysis and results:
Based on the relevant literature, the proposed conceptual model for this study is depicted in
figure 1.
332
2
The proposed model was empirically tested by administering the research instrument
developed for the study using survey method to existing users of mobile shopping applications.
The items used in the research instrument were adapted from previous studies published in peerreviewed journals. The proposed research model was tested by partial least squares regression
(PLS). This study used SmartPLS software for data analysis. The measurement model was first
tested by conducting validity and reliability analysis followed by assessment of structural model.
Self-Efficacy and Satisfaction
The results show that self-efficacy is significantly affected by aesthetics, navigability and
fulfilment service experience, while it is not significantly affected by trust. There results thereby
support hypothesis H1, H2, and H5 while rejecting hypothesis H7. Further, the results show that
customer satisfaction increased with navigability and fulfilment service experience, whereas it
was not significantly affected by aesthetics and trust. Therefore hypothesis H4, H6 are supported
while hypothesis H3, H8 are rejected.
Continuance Intention and Word of Mouth
333
3
The results validate that post adoption continuance intention is significantly affected by
customer satisfaction as well as with self-efficacy, thereby supporting H9 and H11 respectively.
Further, the results show that word of mouth was significantly affected by self-efficacy, however
the same was not significantly affected by customer satisfaction thereby supporting H12.
Implications of the Study:
The findings of the study provide a better understanding of the factors likely to influence
loyalty among customers using mobile shopping applications. Findings also provide valuable
insights into the factors that e-retailers need to focus to build self-efficacy among their customers
using mobile interface. The contribution of the paper lies in eliciting the differences between
customer choice model at pre-adoption and post-adoption stage for mobile shopping. Further, the
study demonstrated the role of cognitive factor of self-efficacy in loyalty at post adoption stage
that is pre-dominantly researched with affective factor of satisfaction.
References
Agrebi, S. and Jallais, J. (2015), “Explain the intention to use smartphones for mobile shopping”,
Journal of Retailing and Consumer Services, Vol. 22, pp. 16–23.
Bandura, A. (1982), “Self-efficacy mechanism in human agency.”, American psychologist,
American Psychological Association, Vol. 37 No. 2, p. 122.
Bandura, A. (1997), Self-efficacy: The exercise of control, Macmillan.
Groß, M. (2015), “Mobile shopping : a classification framework and literature review”,
International Journal of Retail & Distribution Management, Vol. 43 No. 3, pp. 221–241.
Lai, J.Y., Debbarma, S. and Ulhas, K.R. (2012), “An empirical study of consumer switching
behaviour towards mobile shopping: a Push-Pull-Mooring model”, International Journal of
Mobile Communications, Vol. 10 No. 4, pp. 386–404.
Oliver, R.L. (1980), “A Cognitive Model of the Antecedents and Consequences of Satisfaction
Decisions.”, Journal of Marketing Research (JMR), American Marketing Association, Vol.
17 No. 4, pp. 460–469.
Wang, R.J.H., Malthouse, E.C. and Krishnamurthi, L. (2015), “On the Go: How Mobile
Shopping Affects Customer Purchase Behavior”, Journal of Retailing, Elsevier Ltd, Vol. 91
No. 2, pp. 217–234.
Yang, K. and Kim, H. (2016), “Mobile shopping motivation : an application of multiple
discriminant analysis”, Vol. 2016, doi:10.1108/09590551211263182.
Yang, K. and Kim, H.-Y. (2012), “Mobile shopping motivation: an application of multiple
discriminant analysis”, International Journal of Retail & Distribution Management, Vol. 40
No. 10, pp. 778–789.
334
4
Small-town Consumers’ Online Engagement: Evidence from Pilani
Ramandeep Singh and Leela Rani
Birla Institute of Technology and Science, Pilani (BITS-PILANI)
Vidya- Vihar, Pilani, Distt. Jhunjhunu, Rajasthan (India)- 333031
Emails: ramanbitsp@gmail.com/ leela_r@pilani.bits-pilani.ac.in
Introduction
E-commerce
can be a beneficial channel to reduce transaction costs as well as ameans of offering
certain goods at a price lower than the traditional market (Santarelliand D’Altri, 2003). Most
benefits derived from e-commerce are different factors such asmarket development, efficiency of
sales and promotion, ease of accessibility and costreductions (Kaynak et al., 2005).According to
the latest report by ASSOCHAM e-commerce market in India is likely to touch $38 billion mark
in 2016, a huge 67 per cent jump over the $23 billion revenues for 2015. Without a doubt ecommerce is now a regular part of an Indian digital consumer. The report by ASSOCHAM cites
increasing internet and mobile penetration, growing acceptability of online payments and
favorable demographics as the key drivers that provide a unique opportunity to companies to
connect with their customers. Although, the sector is burgeoning in the urban cities yet it is
interesting to note that a huge share of traffic is coming from the tier 2 and tier 3 cities as well. It
would therefore be a matter of scholastic interest to decode the small town consumers’
disposition and participation with online shopping. This study takes a meaningful step towards it.
Research Gap and Research Problem
In some recent press reports, it was revealed that on an average, almost 50 – 55% of online
business comes from the tier 2 and tier 3 cities. With urban markets reaching the point of
consolidation and saturation, experts believe that tier 2 and 3 cities are going to be the biggest
drivers for ecommerce businesses in India in the near future as the demographic dividend is
essentially aspirational out there. Furthermore, mobile technology is also revolutionizing the
Tier-II and Tier-III markets. Half the shoppers in Tier-III cities are already on mobile, as
compared to the one third from Tier-I cities, according to the Forrester’s report(November 2014).
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Amidst such aspirational and lifestyle changes coupled with technological advancements it
becomes imperative for online marketers to explore small town consumers’ attitude and behavior
with respect to online shopping. Academic studies can lend support in this direction. Although
there exists an impressive body of work on online consumer attitude and behavior in the west; it
is in a nascent stage in India. In particular, studies based on lower income segment, bottom of
pyramid segment or small town consumer segments are conspicuously absent. Given that a vast
majority of Indian population is beyond the metropolitan and Tier 1 cities; it is vital to explore
the consumption behavior of small town consumers to rightly formulate the offline/online
marketing mix. In times to come, it is expected that for the online marketers the rural and upcountry markets will be increasingly relevant across several products and service categories. In
fact, this emerging new segment has been referred as ‘Rurban’ displaying a hybrid characteristic
of urban and rural consumer markets. It is for these reasons that this study may be deemed timely
as it focuses on a promising segment such as this and provides insights for online marketers.
Objectives of the study
Customer purchase behavior has been an important issue for academics andpractitioners for
decades. Customers’ behavior often provides important informationassociated with their
purchase patterns and thereby delivers critical consumption messages to retailers (Berger and
Nasr, 1998). Therefore, the primary objective of this research is to develop insights in to the
online engagement of small town consumers. Accordingly the following research questions are
examined in this study.
RQ1. What is the frequency of online purchase?
RQ2.What are the favored product categories?
RQ3.What is the preferable mode of payment?
RQ4.Which sources of information that influences online decisions?
RQ5. Do they hold a positive attitude for online shopping?
Research methodology
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Pilani ,a small town situated in the Shekhawati region of Rajasthan, India was chosen as the
subject (destination) for this study.As of the 2011 Census of India, Pilani has a population of
29,741 of which 51% are males and 49% females. The average literacy rate is 72%. Male
literacy is 80% and female 63%. It can be typically categorized as a small town segment and
therefore considered apt for this study. A set of structured questionnaire was used for
datacollection. The constructs and number of questions were based upon the researchquestions
and the formulated hypotheses. The questionnaire consists of three sections - socio-demographic
information, statements on online shopping attitude, information on -frequency of online
purchase,favored product categories,preferable mode of paymentand sources of information. The
sampling frame included those consumers who – were literate and shopped online at least once
in two months. Convenience sampling was employed whichresulted in a sample size of 190. The
measure for online shopping attitude wad adopted from the extant literature (Forsythe et al.,
2006, Karayanni 2003 and Swinyard& Smith, 2003).Responses were collected on a five-point
likertscale with 5 = strongly agree and 1 = strongly disagree.The data were coded and run using
the Statistical Package for Social Sciences version 22.0. Cronbach alpha was adopted as an
internal consistency measure for online shopping attitude scale and was deemed reliable.
Descriptive and inferential statistics such as – Friedman ANOVA and one way ANOVA were
carried out to examine the research questions.
Data analysis and results
The first area of enquiry was to assess the frequency of purchase in an online medium (RQ1).
Descriptive statistics revealed that – 42% shopped once in two months followed by 35% once a
month, 11% twice a month and 11% more than that. Friedman ANOVA was employed to assess
RQ2, RQ3 and RQ4. Responses were taken in ranking order across the categorical options. Table
1, 2 and 3 provide the results on the same. The results demonstrate significant difference with
respect to respondent behavior vis-à-vis product categories, preferable mode of payment and
sources of information. RQ 5 was assessed through the mean score of the respondents for the
online shopping attitude. It measured as 3.6 indicating a positive inclination for online shopping.
Furthermore, the results of ANOVA analysis indicated significant difference between the groups
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with respect to online shopping attitude based on gender, education and occupation. Table 4
presents these results.
Table 1 : Freidman rank score for Product categories
Product Category
apparel &
shoes
kitchen
aplliances
clothing
Rank in Favored product category 5
4.74
Friedman Mean Rank
7
5.7
books &
stationery
6
5.19
smart phones &
accessories
8
5.76
electronic
aplliances
Computer &
acessories
3
4.2
2
2.96
1
2.78
Beauty
& health products
4
4.67
Table 2 : Freidman rank score for Preferable Mode of Payment
COD
Preferable Mode
of Payment
Rank in of Payment Mode
Friedman Mean Rank
net banking
1
3.35
debit card
2
3.89
credit card
3
3.91
e-wallets
4
4.07
5
4.19
Table 3 : Freidman rank score for Sources of Information
work place
colleageus
Preferable Mode
of Payment
Rank in of Sources of Information
Friedman Mean Rank
friends
1
2.54
relatives
4
3.96
family members
6
5.59
5
4.96
TV adverts.
web adverts.
3
3.87
2
3.07
Table 4: ANOVA results on Online Shopping Attitude based on Demographics
Gender
Male
Female
Overall
Mean
3.66
3.57
3.61
F-Value
3.658*
Education
Graduate
Others
Mean
3.68
3.53
*p -value is significant at 5% level
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F-Value
3.601*
Occupation
Govt.Service
Private Service
Self employed
Mean
3.48
3.77
3.57
F-Value
5.019*
Implications of the Study
While one third of India’s 1.2 billion population lives in Tier-I cities, statistically only 8% of
these reside in Tier-I cities. This means that, an online seller cannot ignore the combined volume
of the more than 4,500 cities and hubs that make up the rest of India. This study can therefore be
deemed timely as results from this study can yield some meaningful insights for the online
marketers. For example, reward and loyalty programs can be framed around product categories
which are less favored by the small town consumers (like apparel and clothing in this case).
Further, as cash on delivery mode is the most preferable option for payment; it may inhibit some
online purchases for some products in these locations. It needs an operational intervention
together with banks and e-wallet providers to foster use of credit and debit cards. Similarly,
WOM programs can capitalize on the efficient use of the various sources of information which
influence the online consumer decision making. A noteworthy aspect of this study is the positive
inclination towards online shopping. Given, a difference of attitude basis some demographic
factors examined in this study one can conclude the need for segment specific marketing
approach. Although unexplored in this study, it is vital to understand the infrastructural gaps for
the growth of e-commerce in this region. The development of the local eco-system is critical to
realizing the full potential of the market, it is imperative for businesses to focus energies on
community, institutional and infrastructural development in India’s villages. There is still work
to be done here and is critical to opening up of the market potential of small town & rural India.
References
Berger, P. D., and Nada, I. N. (1998). Customer lifetime value: marketing models and
applications.Journal of Interactive Marketing, 12 (1):17-30.
Enrico, S., &Samuele, D.(2003).The Diffusion of E-commerce among SMEs: Theoretical
Implications and Empirical Evidence. Small Business Economics, 21(3):273-283.
doi: 10.1023/A: 1025757601345
Erdener, K., Ekrem, T., &Veysel, K. (2005).An analysis of the factors affecting the adoption of
electronic commerce by SMEs: Evidence from an emerging market.International Marketing
Review, 22(6): 623 – 640.
Forsythe, S., Liu, C., Shannon, D., & Gardner, L. C. (2006). Development of a scale to measure
the perceived benefits and risks of online shopping.Interactive Marketing, 20(2): 55-75.
339
Karayanni, D. A. (2003). Web-shoppers and non-shoppers: compatibility, relative advantage and
demographics. European Business Review, 15(3): 141-152
Meena, S.(2014, November 24).Women and mobile shoppers in tier 2 & 3 cities are driving
India’s online retail market. Retrieved from:http://blogs.forrester.com/satish_meena/
Swinyard, W. R., & Smith, S. M. (2003). Why people don’t shop online: a lifestyle study of the
internet consumers. Psychology and Marketing, 20(7): 567-597.
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CONSUMER CO-CREATION ON DIGITAL PLATFORM- THE
ROLE OF CONSUMER FEELING
Nilamadhab Mohanty
Thiagarajar School of Management,
Pambanswamy Nagar,Thiruparankundram, Madurai,Tamil Nadu, India 625015
Phone: 7708742224
Email: 4mohanty.nilu@gmail.com
Introduction:
A major concern for firms today is to develop appropriate strategy to use social media,
mobile, and C2C interactions to co-create products and services with customers and valuechain partners (Roberts and Adams, 2010). In an emerging economy like India, where the
adoption of digital technology is increasing and online transactions are growing faster, firms
have a greater potential to use the internet, online communities, and interactive platforms to
engage customers in the process of co-creation (Füller, 2010). Engaging customers in the
process of co-creation is one of the means to develop better relationship also. However, the
effect of co-creation is positive only if the experience of the engagement is satisfactory. So,
use of co-creation as a process to build the relationship with the customer depends on
customer experience and customer feelings during the process of engagement. Considering
this, it is important to understand the feelings of Indian customers with regards to their
engagement with co-creation process. In this backdrop, the proposed study intends to
understand the emotional response of consumers to co-creation during online shopping and
the impact of e-shopping experience on consumers’ intention to engage with.
Research gap and Research Problem:
Limited research has been attempted to understand consumers emotions associated with cocreation process. But emotion is an important factor influencing human behavior (Calne,
2000) and decision making (Damasio, 2005). Emotions shape experiences (Page and
Mapstone, 2010) and lead to action (Calne, 2000). Extant literature in marketing has studied
341
the impact of emotions in the context of responses to advertising (Derbaix, 1995), consumer
satisfaction (Phillips and Baumgartner, 2002), consumer complains (Stephens and Gwinner,
1998), consumer decision making (Han, Lerner, and Keltner, 2007) and service failures
(Zeelenberg and Pieters, 1999). However, the consumers’ emotion during co-creation process
is yet to be explored. Although attempts have been made to establish the relationship between
consumer experiences during co-creation process, but studies focusing on co-creation and
consumer emotion are sparse.
A major factor influencing consumer intention to co-create is co-creation skill/competence for
co-creation. Competence for co-creation is the capacity of consumers to make suggestions
and/or to customize products (or services) as per their own expectations. But co-creation and
its success depend on consumer’s internal motivation (Brüggen et al, 2011). Additionally,
value co-creation is influenced by the benefits perceived by those participating (Nambisan
and Baron, 2009). In this study the emphasis is on the experiential e-shopping motives, where
customers are motivated by hedonic benefits such as fun, entertainment, and uniqueness,
(Childers et al., 2001). Thus, this study aims to evaluate the competence and engagement in
co-creation of consumers who differ with regards to their experiential e-shopping motives.
Consumer emotions
Consumer emotions could be a mental state of readiness (Bagozzi, Gopinath,and Nyer, 1999)
or a subjective internal state (Bourne and Russo, 1998) consisting of subjective feelings and
physiological reactions (Desmet, 2003). The feelings are normally motivated by external
stimuli (Haksever, Render, Russell, and Murdick, 2000) or by cognitive thoughts (Bagozzi,
Gopinath,and Nyer, 1999). Likewise emotion has been described as physiological changes in
response to our perceptions (Bourne and Russo, 1998). These responses could be positive or
negative (Laros andnSteenkamp, 2005). Emotions are also considered to be context specific
(Page and Mapstone, 2010). Emotions experienced during consumption situation are distinct
form emotions experienced during non-consumption situations (Richins, 1997). Richins
(1997) identifies 13 emotions as consumptions emotion set (CES). This study builds on the
work of Richins (1997) and Laros and Steenkamp (2005)
Co-creation
Co-creation is a major marketing challenge for many managers (Roberts and Adams, 2010).
However, with the development of interactive platforms and advancement in digital
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technology potential to co-create with consumers is emerging as an opportunity (Füller,
2010). Companies now attempt to engage customers in the process of co-production
(Gambetti and Graffigna, 2010). A key attempt in this process is promotion of consumer
interactions, about consumption experiences (Vargo and Lusch, 2008), like posting a
comment, submitting ideas or participating in forums, etc. The interaction could also include
consumer involvement in the process of product or service creation (Von Hippel, 1986).
However, marketers still struggle to get active participants who not only view content but also
modify and create content as well (Arthur, 2006). Motivating consumers by creating
opportunities for interaction among other consumers (Füller, 2010) and by reminding them
about the benefits of co-creation (Sawhney and Prandelli, 2000) was suggested to be one of
the means to overcome the challenge of consumer participation in co-creation. Nevertheless, a
major factor motivating participation in an activity is emotional experiences an individual
receives during the process. Besides in the context of co- creation consumers’ participation
depends on the challenge, fun, glory, competition or pleasure they experience during the
process of co-creation (Vernette and Hamdi-Kidar, 2013).
Through this research, the attempt is to explore the emotional experiences of consumer
associated with co-creation during online shopping and to establish a relationship between the
co creation competence and the feelings about the process of co-creation during online
shopping.
E-shopping motives and intention to co-create
Research notes experiential motives as ritualistic, hedonic, heuristic, and intrinsically
motivated (Sivaramakrishnan et al., 2007). This is why experiential motives influences
consumer’s information processing (Adaval, 2001). Consumers high with experiential
motives pay more attention to hedonic and peripheral cues and use less effortful process
(Petty and Cacioppo, 1986). Thus, people who seek pleasure and enjoyment from e-shopping
pay more attention to hedonic appeal, influenced by service quality and would have weaker
intention to engage in co-creation.
H1 : Experiential e-shopping motives moderate the effects of competence of consumers for
co-creation on intention to engage in co-creation so that consumers having high experiential
e-shopping motives exhibit weaker impact of competence of consumers for co-creation on
intention to co engage in co creation.
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Objectives of the study:
As stated the proposed study has two objectives; (1) to understand the emotional response of
consumers to the engagement in co-creation process during online shopping and (2) the
impact of e-shopping experience on intention to engage with.
Research Methodology:
The study examined feelings of Indian online shoppers associated with co-creation. It was
carried out in two phases. In the first phase 15 depth interviews were carried out to understand
consumers’ opinion regarding online shopping and co-creation process. The second phase
consisted of open end method and a survey.
Open ended method as used by Page and Mapstone (2010) was used to collect and analyse the
data. The shoppers described their feelings regarding the process of co-creation and the reason
behind such experiences in their own words. This was followed by content analysis and
response classification. The data analysis was guided by the work of Richins (1997) and
Laros and Steenkamp (2005). An open ended method to explore consumer responses was
adopted because emotion is a subjective experience of an individual (Bagozzi et al., 1999) and
open ended methods can help elicit consumer emotions without getting influenced by culture
or sample specificity ( Esses and Maio, 2002). Further open ended methods are considered as
the best method to generate affective induced responses (Dean et al., 2006). So, the study
adopted the open-ended method and asked online shoppers to describe in their own words,
“How co-creation made them feel?” The questionnaire consisted of questions on shoppers’
online shopping habits and co-creation habits along with questions on their feelings associated
with co creation. They were instructed that the objective of the question is to explore their
online behavior like posting comments online, submitting or assessing ideas on online
platforms, taking part in consumer forums and promoting products online. Then they were
asked to detail their response to the statements; “I like/ don’t like posting comments online
concerning a product or a service because it makes me feel ….” , “I like/ don’t like submitting
ideas or assessing ideas on a platform of idea exchange because it makes me feel….”, “I
like/don’t like helping other consumers by taking part in product forums, FAQs, etc. because
it makes me feel…”, “I like/ don’t like promoting a product online (by creating an
advertisement or sharing advertisement contents on the social network?) makes me feel …” in
this way the impact of instrument or researcher’s bias on respondents’ experience was
avoided.
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Data analysis and results
A purposive sampling was used to collect data from contacts over 10 locations across India.
The online questionnaire link was shared with the contacts using e-mail. In total 573 shoppers
belonging to different age groups, gender and socio-economic class were approached. Data
collection took place in July 2016. Till the time of writing this paper 45 responses had been
received. Preliminary analysis showed out of 43 responses, 23.3% (10) were female and
76.7% (33) were male, 100 % of participants were aged between 21 and 28.
All words, explanations, demographic details, social media use and online shopping behavior
were recorded for coding and analysis. Three independent coders were used to classify the
content. They used Laros and Steenkamp’s (2005) guidelines to categorize emotions as
positive or negative and Richins’ (1997) consumer emotion set to classify the emotions. In
this way the subjective meaning hidden in the content was explored.
The content analysis revealed over 13 emotions and 9 reasons associated with the process of
co-creation. Words used to express the emotions associated with co-creation were; interest,
boring, confusing, satisfaction, contentment. The coders used Laros and Stenkamp’s (2005)
guidelines to summarise the words into negative, positive or neutral categories. Overall 35%
of words were found positive, 45% words found negative, 20 % words were found neutral.
Most frequently used positive emotion was feeling good (being a part of the community).
Most frequently used negative emotion was found to be boring.
The coders also reported a few words unique to the co-creation process like laziness, makes
feel complete, atrocious. These words were found neither in Laros and Stenkamp’s (2005) list
of positive and negative emotions nor in Richins’ (1997) CES.
Following this classification of emotions the contents were analysed to explore the reasons
behind specific feeling. Major reasons associated with positive feeling were self-satisfaction,
responsibility toward community, gratification, helping others, helping the manufacturers
improve their product and service and getting a chance to interact with others. And the
reasons associated with negative feeling were laziness, fear of cheating others, having
inadequate information about the product, time consuming.
Study 2
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The objective is to analyse the impact of experiential e-shopping motives on the effect of cocreation competence on intention to co-create. Till the preparation of this abstract only 53
responses had been received.
Implications of the study
The study explores the negative feelings associated with the process of co-creation as major
barriers in the process of co-creation. Marketers can create facilitating conditions to overcome
these barriers and promote co-creation among consumers.
References:
Füller 2010 Füller, J. (2010) Refining virtual co-creation from a consumer perspective.
California Management Review, 52, 2, Winter, pp. 98–122.
Gambetti & Graffigna 2010 Gambetti, R.C. & Graffigna, G. (2010) The concept of
engagement. A systematic analysis of the ongoing marketing debate. International Journal of
Market Research, 52, 6, pp. 801–826.
Kozinets 2002; Kozinets, R. (2002) The field behind the screen: using netnography for
marketing research in online communities. Journal of Marketing Research, 39, 1, pp. 61–72.
Maklan et al. 2007; Maklan, S., Knox, S. & Ryals, L. (2007) New trends in innovation and
customer relationship management, a challenge for market researchers. International Journal
of Market Research, 50, 2, pp. 221–240.
Nambisan & Baron 2009 Nambisan, S. & Baron, R.A. (2009) Virtual customer environments:
testing a model of voluntary participation in value cocreation activities. Journal of Product
Innovation Management, 26, pp. 388–406.
Prahalad, C.K. & Ramaswamy, V. (2004) Co-creation experiences: the next practice in value
creation. Journal of Interactive Marketing, 18, 3, pp. 5–14.
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Evaluation of Functionalities of Mobile Apps and their
impact on the Consumer
Priyanka Chadha1, Shirin Alavi2, Vandana Ahuja1
1
Jaypee Business School (JIIT, Noida)
Phone: 9873104591/ 9818221913
Emails: priyanka03chadha@gmail.com / shirin.alavi@jiit.ac.in / vandana.ahuja@jiit.ac.in
2
Jaypee Institute of Information technology
Introduction:
Technological progress in the sphere of information, communication and technology is encouraging the use and
development of new updated methods leading to rapid growth in online retail outlets, where customers can buy
without having to travel to retail stores, physically. This growth of online platforms has facilitated the
introduction of electronic marketing and promises to provide new ways of impacting, and servicing costumers
(Sharma and Seth, 2004). The marketing landscape is changing across the world and organisational mind-sets
are shifting from product based marketing systems to customer based marketing systems. Wireless Internet via
Mobile Devices (WIMD) is leading the world into another spectrum of communications and means of
conducting day to day business and life activities (Lu et al, 2003).
As organisations realise the importance of communicating with their customers, contemporary tools like mobile
apps are becoming popular and provide excellent deals and solutions to customers at their convenience.The
spontaneity, mobility, convenience and collaboration offered by smartphones has made them a ubiquitous tool
that has empowered the customers, who with a few simple clicks can become a quick source of revenue for an
organisation.
The Technology Acceptance Model (Venkatesh, 2000) proposed that user training can have an important
influence on technology acceptance. This further leads to consumer convenience. Consumer acceptance is a
function of intrinsic motivation (activity done for self-enjoyment and opportunity to explore, learn and actualise
our potential) and extrinsic motivation (activity done to adopt material gain for external reinforcement i.e. to
gain discounts, best deals).According to TAM, perceived usefulness was also influenced by perceived ease of
use, because, the easier the system is to use, the more easily it is adopted by customers.
As per data released by the Internet and Mobile Association of India, in mid-2015, India had 352 million
internet users, of which over 60 percent were accessing the internet by using their mobiles. E-commerce is
increasingly attracting customers from tier 2 and 3 cities, where people have limited access to brands but have
high aspirations. Based on research studies in the Indian E-Commerce sector, Ahuja et al., proposed another
model for the adoption of mobile apps for shopping from E- commerce sites, in an Indian context. This study
also discussed why extant models pertaining to online consumer behaviour did not work in an Indian context, in
present times. This model included the following determinants which influence the app usage of customers
(Ahuja et al., 2016).
347
(i)Convenience: Ease of usage of tool, which enhances the daily activities of individuals and allows them to
easily complete a shopping task, saving time and energy which is required for the shopping process.
(ii)Collaboration: Several functionalities make the online shopping experience more social for the consumer,
by allowing a dimension of interactivity viz. adding friends from the user’s phone book, sending invites to
friends through social apps, have one to one conversations, create groups and conversation threads, share
product listings, wish lists and share pictures from the phone gallery.
(iii)Habit: Habit reflects automatic behaviour tendencies developed during the past history of the individual
when behaviour is repeated and becomes habitual, it is guided by automated cognitive processes, rather than by
elaborate decision. This implies that users end up plugging onto a specific app sometimes, merely because they
have a mobile in their hand and want to do something with it.
(iv)Degree of Internet Saviness and Individual Internet Worth: Degree of Internet Savviness and Individual
Internet Worth are moderating variables which impact the effect of convenience and collaborationon App
Usage. If an individual is internet savvy, as in, comfortable with the internet environment, his experience of
traversing the internet is much more pleasurable and his perception of how comfortable,easy and value adding
the experience was, is greater than a person who is not at ease in using the internet environment.
Research Gap and Research Problem:
Not enough work has been accomplished in the field of mobile apps. There is a significant research potential
for exploring the usage of mobile apps across diverse industry verticals.This research paper explores the ability
of mobile apps to impact consumer convenience and collaboration to stimulate the adoption of an app as a
shopping tool.
Objective of the study:
Each mobile app performs certain functions for its brand or organisation. Each function further solves a
customer problem or responds to a specific customer need. For example, the Search functionality may allow a
consumer to search for possible product options and the Ping feature may allow customers to chat with their
friends and solicit their views while shopping. The Search functionality caters to the customer need for
Convenience, while the Ping functionality caters to the customer need for collaboration.
The purpose of this research study is to
(i)
Identify the functionalities offered by mobile apps.
(ii)
Identify the specific consumer needs satisfied by these mobile apps.
348
Research Methodology:
Ahuja et al (2016) proposed a new model for adoption of mobile apps by consumers shopping from E-commerce
sites in an Indian context. This study uses Ahuja et al’s model as the base and attempts to identify the functionalities
offered by mobile shopping apps and link these functionalities to the consumer needs they satisfy.Our study of 10
different E-Commerce Apps, viz. the online shopping apps from Myntra, Flipkart, Amazon, Quickr, Oyo, OLA Cab,
Make my trip, Snapdeal, Book my show, Jabong etc. enabled us to compile a comprehensive list of functionalities
offered by the apps.
A research instrument (questionnaire) was formulated and administered to 400 respondents. The respondent sample
comprised people who had made at least one purchase through a mobile app in the last one year.The respondents
were asked to link the respective mobile app functionality with the purpose it served for them.The data collected was
subjected to a factor analysis using SPSS, for data reduction.
Data Analysis and Findings:
E-commerce companies like Flipkart and Myntra in India are gradually transitioning to a mobile first approach as a
substantial volume (70-75%) of their total traffic is coming from their mobile app. Subsequently organisations are
constantly experimenting with various aspects of their services to create the best mobile app for their users by giving
them convenience and collaboration at one platform. Our study of different E-Commerce Apps, and their consumers,
enabled us to compile a comprehensive list of functionalities offered by the apps and link the same to the purpose
these functionalities serve for the consumer. Further our empirical analysis demonstrates that consumer needs have
evolved over time and app usage is hugely a function of the ability of the app to satisfy the two primary consumer
needs for convenience and collaboration.
Implications of the Study:
The immediacy of content availability through the usage of apps and consumption has contributed to the emerging
area of interactive advertising and presents fresh challenges for advertisers who have hitherto adopted an
interruptive strategy. Digital marketing involves multiple communication vehicles and platforms, and apps are now
clearly one significant vehicle (Jackson and Ahuja 2016). In the domain of new technology application, online
shopping seems to be promising in the context of the E-Commerce industry in India.
References:
Ahuja, V., & Khazanchi, D. (2016). Creation of a Conceptual Model for Adoption of Mobile Apps for
Shopping from E-Commerce Sites–An Indian Context. Procedia Computer Science, 91, 609-616.
Lu, J., Yu, C. S., Liu, C., & Yao, J. E. (2003). Technology acceptance model for wireless Internet. Internet
Research, 13(3), 206-222.
Sharma, A. and J. Sheth, (2004) "Web-based marketing. The coming revolution in marketing thought and
strategy, Journal of Business Research, Vol. 57: 696-702.
Venkatesh, V., & Davis, F. D. (2000). A theoretical extension of the technology acceptance model: Four
longitudinal field studies. Management science, 46(2), 186-204.
Jackson, G., and V. Ahuja. 2016. Dawn of the digital age and the evolution of the marketing
mix. Direct, Data and Digital Marketing Practice 17 (3):170–86.
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Research Methodologies in the domain of Online MarketingLiterature review and Marketing Applications
Radhika Sharma1, Dr.VandanaAhuja1, Dr.ShirinAlavi2
1
Jaypee Business School (JIIT), Noida
2
Jaypee Institute Of Information Technology, Noida
Emails: radhikasharma10.8.1993@gmail.com / vandana.ahuja@jiit.ac.in / shirin.alavi@jiit.ac.in
Introduction:
Facebook, Twitter, LinkedIn and other social networks are successfully engaging a large number
of consumers and subsequent to large volumes of consumer participation, a hub of unstructured
data have been created. According to Statista, the number of worldwide internet users is expected
to reach some 2.95 billion by 2020, which is around a third of the Earth’s entire population.
Social media has hence, emerged as a significant domain for organisations, which when
researched appropriately, can enable the conversion of the vast data resources, into actionable
information, which can be used for decision making. A series of research methodologies are fast
emerging to enable organisations to explore the humongous realm of the virtual world. This
paper traces the growth of a large amount of consumer generated and organisation generated data
on the internet, in the era of the read-write web, and studies the usage of two significant research
methodologies which can be used to extract meaningful information from the data on the
internet-Netnography and Social Network Analysis.
In this digital era, it is very important to have separate research tools to extract insights from the
virtual world. Ample amount of data is available in the blogging forums, social networking sites,
online groups, fan clubs, news groups, chat rooms, etc. which is a huge source of drawing
valuable insights. The difference between the data that we get from traditional marketing & the
data from online marketing is huge, because of which the evolution of research methodologies
like Social Network Analysis & Netnography (Kozinets,2002) took place.
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Netnography
Netnography is a stand-alone method used to study the behaviour of online communities
(Kozinets,2002).It is also complimentary with many other methods. This research tool should be
applied on those online communities which have a focused & research relevant group, higher
traffic of posts, large number of posters and availability of rich data (Kozinet,2002). In
netnography, information available on various online communities is used to understand the
consumer behaviour, factors influencing consumer decision-making& consumer patterns. It is
also beneficial in identification of lead users, (Belzbaumach,2010).It is one of the most important
research tools, as consumer to consumer influencing i.e the positive/negative word of mouth
plays a crucial role in consumer decision making. The marketers should aim on customers having
highest the network value, sell their product to them and then enjoy the ripple effect of positive
word of mouth (Domingos, 2005). Greater accessibility to a broader cohort of respondents, more
flexible for observation & analysis, economical & time saving and greater continuity in research
are some of the positive points of using netnography.
Social Network Analysis
Social networking sites are gaining so much hype these days, it has been found that these are a
popular way to share and disseminate content. According to Statista, Facebook has 1.71 billion
monthly active users till the second quarter of 2016.Social networking sites are a powerful tool to
share, organize, create content and contacts. These sites are a pool of data, specific techniques are
needed to extract insights from this data & Social Network Analysis is one of them. Social
networks play an important role in spreading the positive/negative Word-Of-Mouth, which is a
great factor in influencing the buying decision of the consumer.The study of social networks can
help marketers in building a brand by knowing consumer’s perception about a particular brand
and thereby converting them into brand evangelists by tapping on the right influential
consumer.Information processing, distributed search and diffusion of social influence are some of
the social processes because of which social networks have attracted great interest
(Kozinets,2009). The insights extracted can also be used by marketers for creating WOM
campaigns & viral marketing. Factors like characteristics of the actors, of the relationship and of
the situation of social networks are very important as they can have an impact on the network
analysis (Webster, 2006).
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Social Network analysis can be done by using many analytical tools. If the number of actors is
less, then graphs can be used for a visual representation of the structural and relational positions
of the network members. Two basic lines of inquiry in network analysis are that of cohesive
subgroups and actor positions and roles (Webster,2004). In Cohesion, density is one of the most
important measures. If a network is dense, it is assumed that members in the network are directly
influenced by each other and there is high degree of cooperation and collaboration. The location
of these actors in a network also has a large impact on their performance. Centrality and
structural equivalence are two factors on which we rely for inquiring position & role of members
in a network.
Research Gap and Research problem:
This research paper observes that many researchers have emphasized on the application of the
above discussed methodologies in a particular field and miss the importance of these
methodologies in the field of tracing marketing activities, knowing future patterns, and predicting
demand of a particular product in the market.
Objective of the Study:
The objective of this paper is to throw some light on the importance of using the right research
methodology, specifically Social Network Analysis & Netnography while dealing with the online
world. The authors attempt to streamline the views expressed in published literature, to throw
light onto the importance of using these research methodologies to study the new media.
Research Methodology:
This research paper is created by studying, conceptualizing and extracting findings of many
previous research papers. Published literature related to netnography and social network analysis
have been thoroughly analyzed to come up with the findings.
Data Analysis and Results:
As people are getting tech savvier day by day, the number of active members in online
communities has increased because of which it has become very important for organisations to
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understand the consumer’s opinions, choices, tastes & preferences pertaining to products and
brands. Organisations can use the above discussed methods to conduct research on their online
presence and consumer responses. It is very important that the choice of research method should
be in sync with research objectives & questions. These methods help in understanding
opportunities for Online Branding, Integrated Marketing Communication and Consumer
Behavior. Many meaningful insights can be drawn using these internet research methodologies,
which would have otherwise been lost because of the symbolic or unstructured form of data and
non availability of appropriate research methods.
This research paper attempts to contribute to marketing theory by linking these research
methodologies to relevant contextual environments and marketing applications.
Implications of the Study:
The Social Media Model proposed by consulting firm, Mckinsey, states that companies should
Monitor their brands in the online domain, Respond to consumer comments, Amplify positive
content for stimulating greater levels of consumer engagement and Lead consumers towards long
term behavioural changes. Both, Social Network Analysis and Netnography contribute to the
Monitor function and help organizations in successfully formulating their strategies for the
Respond, Amplify and Lead functions.
Netnography can also help companies in improving their innovation processes by
detecting user innovations and by studying user expectations (Belzbaumach, 2010) and
needs in regard to a particular product.
These research methodologies are of great importance as some of online consumers
express their dissatisfaction about a particular organization or brand freely on social sites
& online forums, i.e provide feedback for brands & products.
Netnography can be used for lead user identification (Belzbaumach, 2010).
Theses methodologies also help marketers to engage in engaging consumers in brand
communications (Brodie, 2011).
Study of social networks will help in understanding consumer patterns, their choices and
opinions. Moreover, it will also increase consumer engagement.
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This research shows marketers the need to use these methodologies to gain new insights
pertaining to consumer needs & preferences and will also help in predicting future
consumer purchasing patterns.
This study creates a framework for using the research methodologies of Netnography and Social
Network analysis to enhance the productivity of the Marketing function in organizations, by
achieving specific marketing goals in response to research objectives.
References:
Kozinets, R. V. (2002). The field behind the screen: Using netnography for marketing
research in online communities. Journal of marketing research, 39(1): 61-72.
Kossinets, G., & Watts, D. J. (2006). Empirical analysis of an evolving social network.
science, 311(5757): 88-90.
Webster, C. M., & Morrison, P. D. (2004). Network analysis in marketing. Australasian
Marketing Journal (AMJ), 12(2): 8-18.
Domingos, P. (2005). Mining social networks for viral marketing. IEEE Intelligent
Systems, 20(1): 80-82.
Kozinets, R. V., De Valck, K., Wojnicki, A. C., &Wilner, S. J. (2010). Networked
narratives: Understanding word-of-mouth marketing in online communities. Journal of
marketing, 74(2): 71-89.
Brodie, R. J., Ilic, A., Juric, B., &Hollebeek, L. (2013). Consumer engagement in a virtual
brand community: An exploratory analysis. Journal of Business Research, 66(1): 105-114.
Bowler Jr, G. M. (2010). Netnography: A method specifically designed to study cultures
and communities online. The Qualitative Report, 15(5): 1270.
Belz, F. M., &Baumbach, W. (2010). Netnography as a method of lead user identification.
Creativity and Innovation Management, 19(3): 304-313.
Xun, J., & Reynolds, J. (2010). Applying netnography to market research: The case of the
online forum. Journal of Targeting, Measurement and Analysis for Marketing, 18(1): 1731.
Mislove, A., Marcon, M., Gummadi, K. P., Druschel, P., &Bhattacharjee, B. (2007,
October). Measurement and analysis of online social networks. In Proceedings of the 7th
ACM SIGCOMM conference on Internet measurement (pp. 29-42). ACM.
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When Do Consumers Use Cash-on-Delivery
to Make a Purchase?
Moutusy Maity
IIM Lucknow
B1, Sector 62, Noida 201307
Email: mmaity@iiml.ac.in
Mayukh Dass
Texas Tech University
Lubbock, TX
Email: mayukh.dass@ttu.edu
Introduction
Emerging markets are growing rapidly and now represent about 40 percent of the global
economy and about 65 percent of the world’s population (Narasimhan, Srinivasan, and Sudhir
2015; Sheth 2011). For instance, the Indian retail marketing is now growing at a rate of 10% per
year, and estimated around $450B. Given such growth, retailers in emerging markets are trying a
variety of different approaches to attract consumers, and encouraging them to make a purchase.
For instance, retailers in these markets use all three channels, namely in-store, e-commerce, and
m-commerce, to engage customers. Similarly, they also provide a variety of payment types to the
consumers to make sure that they are satisfied with their purchase. One such payment type is
Cash on delivery (COD).
COD is a type of payment option where the consumer pays at the time of the actual
delivery of the purchased product. Given that consumers pay at the time of receiving the product,
COD is considered to be low risk, and therefore, has become very popular for e-commerce and
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m-commerce purchase in emerging markets like India, where the market is still developing, and
consumers trust on the market is still weak.
Research Gap and Research Problem
As e-commerce and m-commerce is becoming the cornerstone of the growth in emerging
markets, it is important to understand when consumers choose COD as the payment options.
Research on payment types is rich. To business-to-consumer (B2C) companies, finding
convenient and secure payment methods is crucial. While the most popular payment method in
the United States is the credit card, the common methods in many emerging markets are cash on
delivery, transfer of payment into bank accounts, and postal money order (among others)
(Ogawara, Chen and Chong 2002). Many consumers prefer cash-on-delivery over other payment
schemes for online purchases, as this method of payment allows customers to pay after their
orders are delivered safely without long delays as customers can refuse to pay for
undelivered/defective items or even cancel their orders if not delivered within a certain time
period, which avoids some of the most common risks in online shopping (Zhang and Zhang
2014).
Institutional context of emerging markets is different from the developed markets
(Burgess and Steenkamp 2006; Khanna and Palepu 1997). Research distinguishes three distinct
but interrelated “pillars of institutions” (pp. 341) that provide structure to society, though in
different ways — the socioeconomic, cultural, and regulative systems. Social theorists have
identified each of these systems as a vital ingredient of a country’s institutional context (Etzioni
and Lawrence 1991; Scott 2001). There are five key dimensions that can explain the differences
in emerging markets (EMs) from developed markets (DMs): heterogeneity in the market,
unbranded competition, sociopolitical governance, scarcity of resources, and poor infrastructure
(Sheth 2011). In a retail setting some of the differences include: (1) unlike consumers in DMs,
consumers in EMs do not consider online channels trustworthy; (2) consumers in EMs are more
sensitive to price than consumers in DMs (The Economist 2011). Given these differences among
the consumers from EM with respect to consumers from DM, we hypothesize that due to weak
regulative systems in emerging markets (Burgess and Steenkamp 2006), consumers are likely to
choose COD as a payment method across various purchase contexts (due to decreased trust with
the system).
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Objectives
Thus, the present study investigates the consumers’ choice of COD in emerging markets.
In particular, we investigate when consumers choose this payment type while making purchases
online (i.e., e-commerce, m-commerce), and examine how consumers’ choice of device affects
this choice. Therefore, the objectives of the study are twofold:
(1)
What are some factors in the purchase context that lead emerging market
consumers to choose COD as the method of payment?
(2)
How does choice of device by the consumers affect the COD choice?
Research Methodology
Consumer behavioral data for purchase across various product categories of apparel, was
obtained from an online retailer. A total of 9436 transactions were used in the analysis.
The dependent variable in our study is COD selection (1=Yes, 0= No) by the consumer at
the checkout.
We considered four types of factors that may affect consumers’ choice of COD in
emerging markets. The first set of factors relates to the purchase incident, including:
Promotion= Whether the consumers received price promotion during the purchase
incident.
Channel Path Length = The length of the channel path followed by the consumer to reach
the website.
Price = Price of the product
Number of items = Number of items purchased.
The second set of factors relates to the retailers’ engagement strategy that attracted the
consumer to their website:
Referral = Did the customer visit the website from a referral?
Facebook = Did the customer visit the website from a Facebook link?
Email = Did the customer visit the website from an advertisement link sent via email?
Loyalty = Did the customer visit the website through a link sent via email?
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The third set of factors relates to consumers’ device choice. They include:
Desktop = Did the consumer use a desktop to make the purchase?
Mobile = Did the consumer use a mobile device to make the purchase?
The fourth set of factor relates to gender of the consumer.
Given that our dependent variable is binary, we estimated a logistic regression model to
examine our research questions. The model is as follows:
logit(COD) 0 1 PROMOTION 2 CHANNEL _ LENGTH 3 Log ( PRICE )
4 # of Items +5 REFERRALS 6 FACEBOOK 7 EMAIL 8 LOYALTY
9 DESKTOP 10 MOBILE 11 GENDER e
Analysis
Results suggest that when consumers purchased without a promotion (β=-0.151, p-value
< 0.001), they tend to use COD as the payment method. Similarly, when the price paid during the
purchase is high (β=0.221, p-value <0.001), COD is used. When exploring the factors related to
retailers’ engagement strategy, we find that only engagement from Facebook has significant
positive effect on COD selection (β=0.253, p-value < 0.001). This is possibly due to low trust
regarding the links seen on Facebook pages. Finally, on exploring the types of device used by the
users, we find that consumers using desktop (β=-0.627, p-value <0.001) has lower propensity to
use COD than someone using a mobile device (β=0.579, p-value <0.001). This may be due to
the fact that when using a mobile device, consumers are less patient about entering their credit
card, or banking information than while using a desktop. Also, it may be that consumers perceive
mobile purchases as risky, and therefore use COD to reduce their purchase risk.
Implications
Through this research we are able to demonstrate that consumers in emerging markets
(specifically, India) prefer the use of COD under specific purchase contexts. Our findings lend
support to institutional context theory, whereby, we are able to demonstrate the use of COD by
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consumers (as compared to negligible use of COD in developed markets). Our findings indicate
that purchase through a desktop environment is less likely to lead to the choice of COD as a type
of payment, while that through a mobile environment is more likely to lead to choosing of COD.
Future studies may wish to investigate the underlying motivations of users, in emerging markets,
choosing COD over credit card.
References
Burgess, Steven Michael, and Jan-Benedict EM Steenkamp (2006), “Marketing Renaissance:
How Research in Emerging Markets Advances Marketing Science and Practice,”
International Journal of Research in Marketing, 23(4), 337-356.
Khanna, Tarun, and Krishna Palepu (1997), “Why Focused Strategies May Be Wrong for
Emerging Markets,” Harvard Business Review, 75, 41-54.
Narasimhan, Laxman, Kannan Srinivasan, and K. Sudhir (2015), “Editorial—Marketing Science
in Emerging Markets,” Marketing Science, 34(4), 473-479.
Ogawara, Sachiko, Jason C. H. Chen, P. Pete Chong (2002), “Mobile Commerce: The Future
Vehicle of E-Payment in Japan?,” Journal of Internet Commerce, 1 (3), 29-41.
Sheth, Jagdish N (2011), “Impact of Emerging Markets on Marketing: Rethinking Existing
Perspectives and Practices,” Journal of Marketing, 75(4), 166-182.
Zhang, Jie, and Rachel Zhang (2014), “Optimal Replenishment and Pricing Decisions Under the
Collect-on-Delivery Payment Scheme,” Operations Research Spectrum, 36 (2), 503-524.
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“Increasing efficiency and productivity through Internet of
Things (IoT) in Indian Public Sector Retail Oil Outlets - Key
Factors to be considered”
Sudip Das, Dr. Shailendra Kumar Pokhriyal and Dr. Geo Jos Fernandez
University of Petroleum and Energy Studies
Knowledge Acres, Vill. Kandoli, P.O Bidholi Dehradun: 248007
Phone: +91-7829915597/ +91-9886429142/9997033383/ 9411341059
Email: sudippdm2001@gmail.com / spokhriyal@ddn.upes.ac.in / gfernandez@ddn.upes.ac.in
Introduction
Physical objects are being connected today to the Internet through the Intenet of Things (IoT).
IoT helps to create a vibrant and successful ecosystem through the convergence of Operations
Technology (OT) and IT (Information Technology). Currently less than 1% of physical objects
are connected to the internet and the opportunity to make them connected is huge. Internet of
Thing (IoT) ranks third in terms of the estimated potential economic impact of 12 technologies
(Mckinsey). As per Cisco’s report ‘A New Reality for Oil and Gas’ (Robert Moriarty, 2015),
there is a 3.7% increase in consumer demand at Retail Oil Outlets due to adoption of IoT.
Literature Review has revealed that currently there is a substantial financial opportunity loss
without the adoption of IoT in the Indian PSU Oil Outlets. This paper has done a literature
review and survey to calculate the Opportunity Loss and also identify the 26 variables which
contribute to increase in employee productivity and operational efficiency through IoT in Indian
Public Sector Oil Outlets. Factor analysis was used to group these 26 identified variables under 9
factors based on their co-relations. Opportunity loss without IoT in Indian Public Sector Retail
Oil Outlets: The literature review revealed that there is an Opportunity Loss of Rs 1569 crores
for 2014-15 without the adoption of IoT in the Public Sector Retail Oil Outlets.
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Research Gap and Research Problem
People, Processes, Data and Things are not connected through Internet of Things (IoT) in Indian
Public Sector Retail Oil Outlets resulting in Financial Opportunity Loss. The entire literature was
unable to provide IoT enabling factors for enhancing employee productivity and operational
efficiency in Indian Public Sector Retail Oil Outlets. So the research question is What are the IoT
enabling factors that will help increase employee productivity and operational efficiency in
Indian Public Sector Retail Oil outlets?
Research Objective
To identify IoT enabling factors responsible for increased operational efficiency and employee
productivity in Indian Public Sector Retail Oil Outlets.
Research Methodology
The mode of inquiry used was ‘survey’ employing predominantly closed ended questions
therefore the quantitative research methodology was used for analysis.
1.1 Sampling Procedures
1.1.1 Target Population
The target population for the survey was employees and ex-employees of Bharat
Petroleum Corporation Limited (BPCL), Indian Oil Corporation Limited (IOCL) and
Hindustan Petroleum Corporation Limited (HPCL)
1.1.2 Sampling frame
The Sampling frame for the survey was the employees and ex-employees of BPCL,
IOCL and HPCL who were involved in the downstream business
1.1.3 Sampling unit
The sampling element was defined as those who are/were involved in the
Downstream Retail Oil Outlet business in BPCL, IOCL and HPCL
1.1.4 Sampling technique
Non Probabilistic Judgmental Sampling was used during the data collection process.
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1.1.5 Sample size – The sample size of 402 respondents was considered for this research
work. This number was determined through Yamane formula
Where
n - Sample size;
N – Population size;
e - Acceptable sampling error.
The population size (N) was taken as 150,000 and the acceptable sampling error (e)
was taken as 5%
1.1.6 Instrument design – Based on the published reports, case studies, research papers,
annual reports etc. the key IoT enabling variables for increased operational efficiency
and employee productivity in Global Retail Oil outlets were identified. A semistructured interview was conducted to finalize the list of variables by subjecting it to
15 respondents for designing the questionnaire. The enclosed questionnaire was sent
to the 1st respondent and based on his/her input, the questionnaire was modified.
Thereafter it was sent to the 2nd respondent and the same process was followed till the
saturation of the variables occurred. The questionnaire was handed over
predominantly in person. The following three variables were eliminated based on the
responses of the respondents.
Sensor and hardware producers
Mass Market
Market Share
1.1.7 Pilot testing
Based on the list of the finalization of the variables, a questionnaire was prepared and
pre-tested with 30 respondents for checking its reliability.
1.1.8 Administering of Questionnaire to the wider stakeholders
The questionnaire was then administered to a total of 402 respondents. The
respondents were asked to respond on a 1-7 likert scale. The responses to the
questionnaire were sought through email and also through in person.
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Data Analysis and Results
The responses of the 402 stakeholders were taken in a 7-point likert scale and subjected to Factor
analysis. The sampling adequacy was checked using the Kaise-Meyer-Olkin (KMO) test. The
KMO score was 0.715 which is adequate to proceed with Factor Analysis.
Factor analysis was used to group the 26 variables identified under 9 factors based on their corelations. The 9 factors obtained from statistical analysis are given below:
Variables grouped as different factors
1. (Factor 1) Customer focus
Customer experience
Customer Expectation
Customer Relationship
Brand value
Workforce at Outlets
Marketing
Process Optimization
2. (Factor 2) Increase in operational profit
Return on Investment
Automation of manual processes
Cost Optimization
3. (Factor 3) Differentiation
Generation of new revenue stream
Competitive advantage
4. (Factor 4) Value to Customer
Faster decision making
Business value
5. (Factor 5) Adoption of latest technology
Efficient new method for performing existing tasks
Cashless transaction
6. (Factor 6) Enabling IoT ecosystem
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Security risks
Connecting Customers’ mobile phones to petrol pumps
Increased in-store sales from formerly fuel-only customers
Asset Optimization
7. (Factor 7) Connected Objects
Wearables
Sensors
8. (Factor 8) Better usage of Customer data
Customer Insights
9. (Factor 9) Partnership with IT Service Provider
Convenience
Application Service Provider
Consumers expect the features of convenience, reliability and safety from products and services.
1. Customer Focus
IoT can help create more sustained value through moving from a one-time transaction focus
to a continuous, relationship focus with customers, suppliers, workers and assets. IoT
provides information on the nearest Oil Outlet and provides the shortest route to the Retail
Oil Outlet on the Customer’s Smartphone mobile app.
2. Increase in Operating Profit
IoT can enable to sell new products and services at Retail Oil Outlets thereby enabling fuel
retailers to gain new revenue streams. IoT can help generate higher profits at Convenience
stores through optimizing the inventory and merchandise, pricing and promotion. The Smart
pump can ascertain the mileage of vehicles which in turn enables an insurance company to
measure mileage and determines premium payments.
3. Differentiation
Automation and Innovation need to be vigorously embraced by the PSU Downstream
companies where they seem to be lacking as compared to the Integrated Oil and Gas majors.
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4. Value to Customer
Improved refueling experience, business outcomes, smarter discount offers at convenience
stores, cashless transactions using Smartphones are some of the attributes that the IoT can
provide to customers at Retail Oil Outlets.
5. Adoption of latest technology
Predictive Analytics coupled with Cloud enabled solutions can correlate the profiles of
consumers with the respective fuel purchases at Retail Pumps along with any in-store
purchases. Through analysis of the data, attractive discount offers can then be provided on
the user’s smartphone. IoT can also enable to provide dashboards on the customer’s
smartphone relating to the inventory of fuel, consumption rate, when to replenish fuel,
monitors tyre pressure and provides signals when to refill the tyres.
6. Enabling IoT Ecosystem
The refueling experience significantly increases at Retail Oil Outlets through IoT enabled
ecosystem. Personalized offers can bring more customers to Convenience stores who used to
formerly only refuel at the pump. Indian Public Sector fuel retailers can boost sales of their
convenience stores through connected marketing.
7. Connected Objects
Sensors collect information about physical assets to monitor status or behavior. They can
monitor inventory of lubricants and fuel stored at underground tanks on real time basis. IoT
enabled sensors can be used to monitor power use, tailor the operation of equipment to
business hours, provides information on customer traffic and even weather conditions at the
Retail Oil Outlets. Wearable watches can increase collaboration with workers at the pumps.
8. Better usage of customer data
Connecting the unconnected objects results in huge generation of data. IoT provides
customer insights through predictive analytics such as tracking the chain of past transactions
and payment modes. Predictive Analytics tools help generate actionable Customer insights
through churning of Customer data. These insights should be used to provide smarter
discount offers to customers at convenience stores associated with PSU Retail Oil Outlets.
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9. Partnership with IT Service Provider
The PSU Downstream companies need to leverage the partnership with their respective
Application Service Providers’ for effective implementation of IoT at their Retail Oil Outlets
for interpretation and analysis of generated data, it will also automate their business
processes.
Implications of the Study
The 9 IoT enabling factors identified were Customer focus, Increase in Operational Profit,
Differentiation, Value to Customer, Adoption of Latest Technology, Enabling IoT Ecosystem,
Connected Objects, Better Usage of Customer Data and Partnership with IT Service Provider.
These 9 factors can be leveraged by the Indian Public Sector Downstream Oil Companies for
implementation of IoT at their Retail Oil Outlets.
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References
(2013). Disruptive Technologies: Advances that will transform life, business, and the global
economy. McKinsey Global Institute.
Forrester. (2015). The Internet of Things has the potential to Connect and Transform Businesses.
Forrester.
Forrester Consulting. (2014). Internet-of-Things Solution Deployment Gains Momentum Among
Firms Globally. Forrester Consulting.
James Manyika and Michael Chui. (2013). Disruptive technologies: Advances that will
transform life, business, and the global economy . McKinsey Global Institute.
Jozef Glovaa, *. T. (2014). Business Models for the Internet of Things Environment.
ScienceDirect.
Luigi Atzori, A. I. (2010). The Internet of Things: A survey. ScienceDirect.
Osterwalder A, P. Y. (2010). Business Model Generation: A handbook for visionaries, game
changers and challengers. John Wiley & Sons.
R.M. Dijkmana, B. S. (2015). Business models for the Internet of Things. ScienceDirect.
Robert Moriarty, K. O. (2015). A New Reality for Oil & Gas. Cisco.
http://www.eia.gov/cfapps/ipdbproject/docs/unitswithpetro.cfm
(2015) Indian Petroleum & Natural Gas Statistics by Ministry of Petroleum & Natural Gas
Petroleum Planning and Analysis Cell
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MEASUREMENT OF WEBSITE PERSONALITY AND ITS
EFFECT ON CUSTOMER TRUST IN ONLINE SHOPPING
Sudipta Kumar Jana
Indian Institute for Production Management, Kansbahal, Odisha-770034
Email: sudiptajana82@gmail.com
Introduction:
Liberalization and globalization have already changed the business scenario of India.
Domestic companies are facing a tuff competition over their multinational counterparts. The
concept of anthromorphisation of brands is not very recent but has been at the Centre stage
and gained momentum in the last decade. The brand becomes a living person and is often
attached to a metaphor. In this way, the abstract intangible assets and characteristics can be
visualized in a tangible way, and customers interact with brands as if they were human beings.
It has been long believed that consumers perceive a personality for brands (Aaker,1997).
Research Gap and Research Problem:
In a digital world website plays a very vital role, where, website environmental design,
website interactivity (Lin and Lee,2012); online communications (Okazaki,2006) both
moderately negative and extremely positive reviews affect the behavioural in intentions of
customers. Poddar et al. (2009) revealed the importance of different personality traits of ecommerce brands, but there is merit in studying website personality because website helps to
build the personality of online shopping brands and this gap is identified in the review of
literature. Website quality will have an impact on consumer trust (Lowry et al,2008) but there
is merit in studying the impact of website personality on consumer trust.
Objectives of the study: The basic objective of this study is to explore the underlying
structure of the web site personality scale and how it effects customer trust.
Research Methodology: Although there are two types of study, qualitative and quantitative
and each one has its own merit and demerit. Qualitative study is employed when little is
known about the topic or subject. Qualitative study is also used when the information cannot
be quantified. The primary objective of the present study is to validate the website personality
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scale in the Indian context and also to study the hypothetical relationship among the different
constructs so quantitative approach is applied for the present study.
The convenience sampling method was used to collect primary data and the response rate was
very encouraging. The questionnaire method of survey is very popular in India.
Questionnaires were distributed and collected manually and we were not encouraged for
online survey due to various reasons. To mention a few like, higher response rate, more lag
time etc. furthermore during manual collection of questionnaires, there is a scope to interact
with the respondents and to clear out confusion, if any, in their mind. Although manual
collection of data by questionnaires method is time consuming as well as costly but still we
went for it. Finally collecting data manually by questionnaires method also solves the problem
of data security and participants were given an assurance, verbally, about the confidentiality
and non-misusage of data.
We have used Likert’s scale because it was appropriate for exploratory factor analysis,
confirmatory factor analysis as well as structural equation modelling (Clark and Wateson,
1995). Although the distance between for on a Likert’s scale are not equal, but are very close
to each other (Kennedy et al. 1996). Although Likert’s scale is ordinal but different authors
(Hair et al, 2009) have strongly supported it to be considered as interval scale. Garland
(1991), mentioned that the number of points in a Likert’s scale is a matter of choice of the
researcher. We have used odd number of points in the Likert’s scale as studies by different
authors (Cox, 1980; Weng 2004) have outlined its importance. Respondents may be “forced”
if even points on Likert’s scale is used, which is again unjustified. Participants are at ease
when odd number of points on Likert’s scale are used, because there is an opportunity for the
participant to adopt a neutral position. If neutral points are not there in a scale then, it may not
reflect the respondent’s exact answer. A five point Likert scale was anchored on the measures
to get the data from the respondents. As the different measures used in this study were
adopted from previous study, so item wording was not a challenge in our study. Six subject
experts were approached to ensure that the item wordings were clear, ambiguous, etc.,
because non-use of jargons will ensure its reliability.
369
Exploratory factor analysis and confirmatory factor analysis was employed in this study and
structural equation modelling method was employed to test the hypothesis.
Data analysis and results: The results of the study revealed a four component website
personality scale and uni dimensionality of customer trust scale. The average variance
extracted of all the factors achieved convergent validity as their values were above the cut of
value i.e. 0.5. Similarly, the measurement model revealed that the squared correlation
coefficient was less than the average variance extracted, hence the discriminant validity was
also proved. Accordingly, the reliability of the were tested by Cronbach’s alpha (Cronbach,
1951) method and all the constructs displayed appropriate reliability results. The different fit
indices of the structural model indicated that the model fit was appropriate. The results of the
hypothesis test indicated that website personality has a positive effect on customer trust.
Implications of the study: Understanding the different dimensions of website personality can
help e-retailers to win the trust of customers and trust is a very important factor in the case of
virtual marketing. Websites are the platform where customers react with the service
organization hence utmost attention be given to create a better experience for the customers.
Quality and Customer orientation of websites will lead to better purchase intention among
customers.
References:
Aaker, J (1997). Dimensions of Brand Personality. Journal of Marking Research, 34(3), 347356.
Clark, L. A., & Watson, D. (1995). Constructing validity: Basic issues in objective scale
development. Psychological assessment, 7(3), 309-319.
Cox III, E. P. (1980). The optimal number of response alternatives for a scale: A review.
Journal of marketing research,17(4), 407-422.
Cronbach, L. (1951). Coefficient
Psychometrika,16(3), 297-334.
alpha
and
the
internal
structure
of
tests.
Garland, R. (1991). The mid-point on a rating scale: Is it desirable. Marketing bulletin, 2(1),
66-70.
Hair, J.F., Black, B., Babin, B., Anderson, R.E., & Tatham, R.L. (2009). Multivariate Data
Analysis, Prentice Hall.
370
Kennedy, R., Riquier, C. & Sharp, B. (1996) Practical applications of correspondence
analysis to categorical data in market research. Journal of Targeting, Measurement and
Analysis for Marketing, 5(1), 56–70.
Lin, M. Q., & Lee, B. C. (2012). The influence of website environment on brand loyalty:
Brand trust and brand affect as mediators. International Journal of Electronic Business
Management, 10(4), 308-321
Lowry, P. B., Vance, A., Moody, G., Beckman, B., & Read, A. (2008). Explaining and
predicting the impact of branding alliances and web site quality on initial consumer trust of ecommerce web sites. Journal of Management Information Systems, 24(4), 199-224.
Okazaki, S. (2006). Excitement or sophistication? A preliminary exploration of online brand
personality. International Marketing Review, 23(3), 279-303.
Poddar, A., Donthu, N., & Wei, Y. (2009). Web site customer orientations, Web site quality,
and purchase intentions: The role of Web site personality. Journal of Business
Research, 62(4), 441-450.
Weng, L. (2004). Impact of the Number of Response Categories and Anchor Labels on
Coefficient Alpha and Test-Retest Reliability. Educational and Psychological Measurement,
64(6), 956-972.
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Visual Information Communication and Consumer Response:
Results from an Empirical Study
Anupriya kaur and Sufal Mahajan
Jaypee University of Information and Technology
Waknaghat ,Teh Kandaghat ,Distt. Solan,H.P.(India)173234
Phone :+91-1792-239217 / Fax: 01792-245362
Emails: kauranupriya@gmail.com /sufal.mahajan88@gmail.com
Introduction:
Internet usage has grown exponentially in recent years. Web-based technologies have augmented
organizations abilities to engage with their consumers. Amidst this, building customer
engagement in both business and consumer markets requires adaptation of the marketing mix to
take advantage of new technologies and tools to better understand and serve customers. Visual
marketing can be a fundamental element of marketing mix and particularly of communication
mix to elicit a desired response from the target group. Growing Trends in the usage of picture
based websites and social networking platforms like Pinterest, Instagram, Tumblr, Timeline
feature of Facebook justifies the fact that people want to believe what they see, and therefore, the
need for visual marketing is evident. Marketing persuades consumer's buying behavior and visual
marketing enhances that by factors of recall, memory and identity. In addition to verbal
information, consumers commonly seek visual information when purchasing products. It is for
these reasons that several internet shopping sites usually present product information in a
combination of visual and verbal forms to enhance consumers’ cognitive elaboration and
comprehensiveness of products. Internet marketers can utilize visual stimuli to improve consumer
perception about their brand/product and foster WOM and e-WOM behavior. This study extends
the line of visual marketing research by making an empirical investigation on the impact of visual
stimuli on consumer response.
372
Research Gap and Research Problem:
Customer engagement has entered the lexicon of managers in private as well as public sector
enterprises in the last few years as a concept that is critical to the success of their organizations
(Sashi, C. M., 2012.Its rise in the consciousness of managers has paralleled the emergence of new
web technologies and tools that enable greater interactivity among individuals and organizations.
Online customer engagement is qualitatively different from offline engagement as the nature of
the customer’s interactions with a brand, company and other customers differ on the internet. The
evolution of the internet and its enhanced ability to facilitate interaction between buyers and
sellers has captured the scholastic interest in discerning the impact of internet on several
marketing aspects such as – online consumer attitude (Na Li and Ping Zhang, 2002), online
pricing
(Efthymios
Constantinides,
2004), online
branding,
e-WOM
(Christy M.K.
Cheung, Matthew K.O. Lee and Neil Rabjohn, 2008) etc. Yet, much remains to be explored.
Researchers of e-commerce and interactive marketing have indicated that online atmospherics
(e.g. web site layout, color, and product visualizations) could have a significant influence on
consumer choice (Griffith, 2005; Mandel and Johnson, 2002; Malthouse and Shankar, 2009).It
implies that visual information of e-WOM might also play a crucial role influencing consumer
perception and purchase decision. Internet marketers should understand how to utilize visual
information appropriately to better communicate with consumers. However, prior studies focused
primarily on the conventional marketing communications and there is scant literature on
discovering the visual elements marketing communications (Alon and Brunel, 2006; Lin et al.,
2005). Similarly, although people are increasingly turning to YouTube to help them shop,
looking for advice, inspiration, or product reviews it (communication of this form) has largely
remained an unexplored research area. This study aims to bridge this gap.
373
Objectives of the study:
Connecting with customers establishes exclusivity in their experience, which will potentially
increase brand loyalty, word of mouth, and provides businesses with valuable consumer
analytics, insight, and retention (eMarketer, 2013; 2016). Customer engagement can come in the
form of a view, an impression, reach, a click, a comment, or a share, among many others. This
study aims to analyze the impact of visual stimuli on consumer response such as - WOM, eWOM and online information search behavior. Additionally, it seeks to examine the variance in
consumer response based on – gender and personality traits like consumer innovativeness and
opinion leadership. Accordingly the following research hypotheses are examined in this study.
H1: Visual Information provides an impetus for WOM activities
H2: Visual Information provides an impetus for e-WOM activities
H3: Visual Information provides an impetus for online information search
H4: WOM (consumer response) would vary on consumer characteristics (a) gender (b) consumer
innovativeness (c) opinion leadership.
H5: e-WOM (consumer response) would vary on consumer characteristics (a) gender (b)
consumer innovativeness (c) opinion leadership.
H6: Online search behavior (consumer response) would vary on consumer characteristics (a)
gender (b) consumer innovativeness (c) opinion leadership.
Research methodology:
Amazon Kindle was chosen as the product about which the visual stimuli would be provided to
the target respondents. It is a series of e-readers designed and marketed by Amazon.com.
Amazon
Kindle
devices
enable
users
to browse, buy, download
and read e-
books, newspapers, magazines and other digital media via wireless networking to the Kindle
store. India and China will together emerge as the biggest market for Amazon's Kindle e-book
reader this year, surpassing the USA. Given, its promise in the Indian market and its relevance for
the target group it made an apt choice for this study. Three videos downloaded from you tube
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were used as visual information medium. The surveys for this study were distributed to the
students of a private university in Himachal Pradesh. Researchers such as Kardes (1996) and
Lucas (2003) have argued that college students are appropriate research subjects when the
research emphasis is on basic psychological processes or the theory tested links to human
behaviors independent of sample characteristics, which is the case in this study. The videos were
run in the classroom and subsequently a total of 230 hardcopy surveys were distributed in the
class rooms. A week later they were collected back. The measures for WOM, e-WOM were
adopted from the extant literature (Goyette, et al.) and the measure for online information search
was self developed.
Data analysis and results:
The gender distribution of the survey respondents is 60 per cent males and 40 per cent females
and has age predominantly between 19 and 21. H1, H2, H3 were analyzed using one sample ttest. The cut off value was 2.5 (mid-point of the scale). A value equal or more than this value will
be indicative of a positive inclination toward this behavior/activity. H4 (a), H5 (a) and H6 (a) was
analyzed through one way ANOVA. The rest of the hypotheses were analyzed through linear
regression. Results of one sample t-test were found significant (p <.001) deeming the hypotheses
H1, H2 and H3 valid. Table 1 and 2 present the results of H4, H5 and H6. While H4 (a) is
supported, H5 (a) and H6 (a) do not find support in this investigation. Furthermore, except for H5
(c) the remaining hypotheses find support in this investigation.
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Table 1: ANOVA results on Consumer Response based on Gender
WOM
Gender
Mean
F-Value
3.62
3.81
3.72
5.658**
Male
Female
Overall
e- WOM
Mean
F-Value
3.61
3.63
3.62
Online search
Mean
F-Value
1.94
3.78
3.81
3.80
0.82
*p -value is significant at 1% level
Table 2: Model Statistics for WOM, e-WOM & Online Search
Consumer response
Consumer charachterstics
Constant
t -value
p-value
Aj. R2
Model Statistics
F
p-value
WOM
H4 (b) Consumer Innovativeness
H4 (c) Opinion Leadership
4.64
5.3
10.62
6.24
0.00
0.00
0.04
0.04
2.01
1.92
0.05
0.06
E-WOM
H5 (b)Consumer Innovativeness
H5 (c)Opinion Leadership
1.54
4.09
2.08
4.24
0.04
0.00
0.07
0.03
2.63
1.61
0.01
0.13
Online search
H6(b)Consumer Innovativeness
H6 (c)Opinion Leadership
2.93
1.36
3.8
2.09
0.00
0.04
0.11
0.14
3.51
4.64
0.00
0.00
Implications of the Study:
Harnessing the power of images and visuals can make a marketing plan more powerful and more
memorable. Yet, there has been little research in this area. The results of this study are indicative
that visual information stimulates consumer response such as WOM, e-WOM and online
information search about the product. Online marketers can therefore design and adopt strategies
based on visual elements and information which foster consumer engagement. In fact, such visual
information may be central to the complete consumer engagement cycle such as- awareness,
consideration, inquiry, purchase, and retention. Offline and online consumer to consumer
communications discuss and validate information and products in organic conversations and on
376
branded company pages. Hence, as the results of this study demonstrate that it would be in the
business’ best interest to streamline this kind of visual marketing campaigns to extend and further
validate positive consumer response and engagement.
References:
Alon, A.T. and Brunel, F.F. (2006), “Uncovering rhetorical methods of word-of-mouth talk in an
online community”, Advances in Consumer Research, Vol. 33, pp. 501-2.
Christy M.K. Cheung, Matthew K.O. Lee, Neil Rabjohn, (2008) "The impact of electronic
word‐of‐mouth: The adoption of online opinions in online customer communities", Internet
Research, Vol. 18 Iss: 3, pp.229 – 247.
Efthymios Constantinides, (2004) "Influencing the online consumer's behavior: the Web
experience", Internet Research, Vol. 14 Iss: 2, pp.111 – 126.
Goyette, I., Ricard, L., Bergeron, J., and Marticotte, F. (2010). e‐WOM Scale: word‐of‐mouth
measurement scale for e‐services context. Canadian Journal of Administrative Sciences/Revue
Canadienne des Sciences de l' Administration, 27(1), 5-23.
Griffith, D.A. (2005), “An examination of the influences of store layout in online retailing”,
Journal of Business Research, Vol. 58 No. 10, pp. 1391-6.
Mandel, N. and Johnson, E.J. (2002), “When web pages influence choice: effects of visual
priming on experts and novices”, Journal of Consumer Research, Vol. 29 No. 2, pp. 235-45
Malthouse, E. and Shankar, V. (2009), “Measuring and managing interactive environments”,
Journal of Interactive Marketing, Vol. 23 No. 3, pp. 207-8.
Sashi, C.M. (2012). Customer engagement, buyer-seller relationships,
media. Management Decision, 50(2), 253-272. doi:10.1108/00251741211203551
377
and
social
An Empirical Investigation of Brand, Category, and Country
Differences in the Engagement of Brand Communities on Facebook
Purushottam Papatla and Prashanth Ravula
Sheldon B. Lubar School of Business, University of Wisconsin-Milwaukee, Milwaukee, WI
Phone: (414) 229-4439/ (414) 229-2541
Email: papatla@uwm.edu / pravula@uwm.edu
Introduction
Social media brands like Facebook, Instagram and Twitter have attracted millions of
people who participate on the platforms. Facebook, for instance, is used by 1.65 billion people
on the average per month according to a recent report (CNN 2016) while Instagram and Twitter
have 400 million and 320 million users respectively (Ad Week 2016). Given the social nature of
these platforms, users not only consume, but also add their own, content on these sites through
conversations with others.
Some of these social interactions (Algesheimer, Dholakia, and
Herrmann 2005) may be about products and brands which could influence purchase decisions.
For instance, Kumar et al. (2013) suggest that “80% of global consumers across geodemographic
barriers” are “actively influencing preferences and purchase decisions through online social
networks and word of mouth (WOM)” (p. 194).
Findings in the literature suggest that the influence of social media conversations on sales
can, in fact, be substantial. Kumar et al. (2013), for example, report a 40% increase in the sales
of an ice cream brand, Hokey Pokey in India, due to a campaign by the brand to generate word
of mouth on Facebook and Twitter. Similarly, Petrova et al. (2016) find that Twitter campaigns
can increase political contributions by between 2% and 3% while Gong et al. (2015) find through
a field experiment that tweets on the Twitter-like site Weibo in China increase viewership of TV
shows. The significant influence of social media on consumer behavior has, therefore, been
demonstrated in diverse categories and geographic locations.
Research gap and Research Problem
Despite these recent advances in understanding and quantifying the benefits of social
media to businesses, surprisingly little is known about an important aspect of the relationship
378
between brands and their consumer communities. Specifically, there are few insights into the
question: how engaged are members of a brand‟s social media community with the brand and
how engaging are the brand‟s interactions through the media with its community? These two
related questions are important since the literature (Algesheimer, Dholakia, and Herrmann 2005,
Nambisan and Baron 2007, van Doorn et al. 2010), suggests that engaging members of a brand‟s
community can lead to several positive outcomes such as emotional attachment with the brand
(Chan and Li 2010) and increased value of the customers to the firm (Gruen et al 2006, Schau et
al 2009). As noted by Brodie et al. (2011, p.252), therefore, “within interactive, dynamic
business environments, customer engagement (CE) represents a strategic imperative for
generating enhanced corporate performance, including sales growth”.
The absence of any
findings on CE with brands within interactive environments like social media is thus a gap in the
literature.
Objectives of the study
We attempt to bridge the gap in the literature by investigating three questions related to
how engaged brands‟ communities, and how engaging the brands‟ interactions with those
communities, are on the social media platform Facebook. Our specific research questions are: (1)
Are there inherent differences between brands in their communities‟ engagement with them and
in their ability to engage those communities? (2) Are there inherent differences between product
categories in how engaged communities of brands in the categories are and how engaging the
brands in those categories are? (3) Are there differences between brands and categories in the
United States of America and those in India in the engagement of social media communities and
brands with each other?
Research Methodology
We investigate the above research questions by relating the differences between brands
and product categories to brand, category, and message characteristics. Our answers to questions
(1) and (2) can therefore provide actionable insights into how different types of brands in various
categories can increase the engagement of their brand Facebook communities. Results related to
question (3) can provide insights that multinational American brands operating in India can use
to increase the engagement of their Indian consumers and also to multinational Indian brands
379
operating in the American market on how to increase the engagement of their American
consumers‟ Facebook communities.
We rely on Brodie et al.‟s (2011, p.260) definition of customer engagement as “a
multidimensional concept subject to a context- and/or stakeholder-specific expression of relevant
cognitive, emotional and/or behavioral1 dimensions.” Of these three types of expressions of
engagement by community members identified in the definition, we focus on the emotional
component for our investigation. Specifically, our operational definition of a brand community‟s
engagement is the proportion of responses by that community‟s members to the brand‟s posts in
which, rather than just clicking the „Like‟ button, they express an emotion like happiness or
anger. Our rationale for this definition is that such an expression by members of the community
requires greater engagement than just Liking a post.
We collect the data for our investigation through custom software programs that visit the
Facebook pages of 157 brands across 20 product categories, with a major presence in the US
market. We select these brands based on two types of brand rankings: Interbrand which ranks
brands on their monetary value and fanpagelist.com which ranks brands in several categories on
the number of fans that they have on Facebook. We are currently in the process of adapting the
programs to also collect similar data for top Indian brands in the same 20 product categories
using lists such as those by Kantar Millward Brown.
Data analysis and results
We relate the proportion of community members‟ responses to each post by each brand to
brand characteristics (e.g., presence of the brand on the Interbrand 100 list), category
characteristics
(e.g.,
durable/non-durable,
tangible/service,
hedonic/utilitarian)
and
characteristics of the brands‟ posts on Facebook (e.g., length of the post and time between posts)
via a Hierarchical Bayesian Beta regression which also includes brand and category fixedeffects. The brand and category fixed-effects capture intrinsic abilities of brands and categories,
respectively, to engage consumer communities on Facebook. We rely on MCMC methods to
infer parameter values. Figures 1 and 2 below present preliminary results based on the fixedeffects for the American brands and product categories below:
1
The italicization is ours.
380
Implications of the study
The figures, thus, suggest that brands and product categories have significant differences
in how engaged their communities are and how engaging they are in their interactions with the
members of their communities. Interestingly, we find three brand-groups in Figure 1. Each
group differs from the others in the intrinsic abilities of the brands it includes to engage
community members. Further, rather than containing brands from the same or similar categories,
381
each of the three groups includes brands from diverse categories. The pattern thus suggests that
the ability to engage consumer communities on Facebook is inherent to brands and that they can
be more or less engaging regardless of the category they belong to.
Figure 2 suggests that categories also have their own intrinsic characteristics that differ
from category to category in how engaged communities of their brands are and how engaging
their brands are. We are continuing our collection of data for these brands and categories and for
the selected Indian brands and categories. We will present more detailed results related to all
three of our research questions for the American and Indian brands. Managerial implications of
our findings will also be discussed.
References
AdWeek (2016), “Here‟s How Many People Are on Facebook, Instagram, Twitter and Other Big
Social Networks,” April 4.
Algesheimer R, Dholakia UM, Hermann A (2005) “The social influence of brand community:
evidence from European car clubs” Journal of Marketing, 69 (July), 19–34.
Brodie, R. J., Hollebeek, L. D., Juric, B., & Ilic, A. (2011), “Customer engagement: conceptual
domain, fundamental propositions, and implications for research,” Journal of Service Research,
4(3), 252-271.
Chan KW, Li SY (2010), “Understanding consumer-to-consumer interactions in virtual
communities: the salience of reciprocity,” Journal of Business Research, 63:1033–40.
CNN(2016), “Facebook's reach gets even bigger: 1.65 billion monthly users,” April 27.
Gong, S., Zhang, J., Zhao, P., & Jiang, X. (2014), “Tweets and sales” Available at SSRN
2461370.
Gruen TW, Osmonbekov T, Czaplewski AJ (2006), “EWOM: the impact of customer-tocustomer online know-how exchange on customer value and loyalty,” Journal of Business
Research, 59(4):449–56.
Kumar, V., Bhaskaran, V., Mirchandani, R., & Shah, M. (2013), “Practice prize winner-creating
a measurable social media marketing strategy: increasing the value and ROI of intangibles and
tangibles for hokey pokey,” Marketing Science, 32(2), 194-212.
Nambisan S, Baron RA (2007), “Interactions in virtual customer environments: implications for
product support and customer relationship management,” Journal of Interactive Marketing,
21(2):42–62.
Petrova, M., Sen, A., & Yildirim, P. (2016), “Social Media and Political Donations: New
Technology and Incumbency Advantage in the United States,” Available at SSRN.
382
Schau HJ, Muñiz Jr AM, Arnould EJ (2009), “How brand community practices create value,”
Journal of Marketing,73 (September), 30–51.
Van Doorn, J., Lemon, K. N., Mittal, V., Nass, S., Pick, D., Pirner, P., & Verhoef, P. C. (2010).
Customer engagement behavior: Theoretical foundations and research directions. Journal of
Service Research, 13(3), 253-266.
383
TRACK VI
384
A Study of Gender Portrayal in the TV Advertisements: A
Stereotypical Marketing Communication Approach
Anjali Bansal1, Amrita Bansal1
1
MICA, Ahmedabad, Shela, Ahmedabad, Gujarat (India) 380058
Emails: anjalibansal.fms@gmail.com / anjali@micamail.in
Introduction:
There are noticeable studies done in the past that explain advertisements shown on different
media like TV, newspaper and magazines portray the relationship between genders and the
cultural values (Goffman, 1976). In the present scenario, although prima facie it seems that
the society is moving towards gender equality, however popular media is still struggling with
traditional gender roles of ‘men’ and ‘women’. According to different studies done in the
past, it has been found out that the women mostly have non speaking roles in the
advertisements, statistically have remained vocal four times lesser than the men, women are
mostly shown only in the home environment doing home chores. Additionally, women are
merely shown using variety of products rather they are portrayed using only household
products (Social Psych Online, 2015).
Research Gap and Research Problem:
Research has revealed that time to time a women in the advertisements is presented either as
a housewife, decorative element, sex object, and dependent on men (Ferguson, Kreshel, and
Tinkham, 1990); or as a housewife who is concerned with physical attractiveness, or who is a
sex object, career oriented, or neutral (Lysonski, 1983); or as an alluring object of sexual
gratification (Mayne, 2000); or finally may be as erotic and suggestive stimuli (Henthorne
and La- Tour, 1995). Interestingly we were not able to find any contrast study in the past
where research have conducted on the women projection in the advertisements of men
lingerie brands and automobile brands. The uniqueness of this research is that it is trying to
project an irony in the present scenario where the brands which are not used by women (men
lingerie) showcase more women in their advertisements in a stereotypical way (alluring
object of sexual gratification). At the same time, where women are 30% to 40% owners of
cars and are important in the process of buying this particular product are always shown in a
stereotypical way in the ads (housewife, dependent on men, non decision maker). Moreover,
385
very rarely women are shown driving the car. In this way this study is unique in its nature in
term of the irony of the advertisement world in the modern scenario.
Objectives of the Study:
The current study attempts to identify the unfair projection of women in the TV
advertisements.
Research Methodology:
The women portrayal is understood and discussed based on the models presented by Goffman
(1979), and then further studied and elaborated by Kang (1997). Overall women projection
was studied on following seven factors: relative size, feminine touch, functional ranking,
ritualization of subordination, licensed withdrawal, body display, and self assertiveness.
This study has adopted the exploratory research design where advertisements under study
were content analyzed. The population was composed of all the ads of men undergarments
and car brands which have aired in last 15 years. However, sample included 43 ads of the
four undergarments brands including- Lux Cozy, Amul Macho, Rupa Frontline, and Dollar,
and 91 ads of 17 models of Hyundai car series. The chosen ads were aired essentially
between January 2001 and July 2016, which provided an up to date picture of TV
advertisements, and reduced possible seasonal biases.
Data Analysis and Results:
It was obtained that the male lingerie category has presented the most obscene picture of
females in their ads. Out of the four studied brands, the 85% ads of brand- Dollar were found
to rate high on licensed withdrawal of women and their lowered functional ranking, however
in comparison to other brands, only 25% ads of brand- Lux Cozy shown improper and
indecent presentation of women in their visuals. In contrast, in more than 50% of automobile
advertisements women were not either picturized, or wherever women were pictured, they
were found rated high on lower functional ranking and ritualization of subordination.
The in-depth analysis of the advertisements revealed that the most distorted image of women
are presented in the advertisements of men undergarments and automobiles. Where, in the
first case, hardly women is required in the ads, they are given to play the most important
section of the ad where they are shown no more than the ones sexually appealed by their male
386
partners' undergarments, while in the latter one, for automobiles, they are either not shown in
the ad or are shown taking the backseat, as if automobiles are not a women's domain.
Implications of the Study:
This study has managerial, research and societal implications. This study can help managers
to understand the overall scenario of these specific industry advertisements. By understanding
the scenario they can bring out differentiation in their advertising strategies. As many brands
and industries are trying to un-stereotype such notions, hence remaining with the old and
traditional stereotypes are not favourable for the brand. For the research purposes, this study
helps in looking at the trends in advertisement in the 21st century. It showcases the journey of
advertisements and the stereotypes in this century and how they have not changed with the
change in economic and social scenarios of consumers. Further, for the societal implications,
advertisements are the cultural mirror of the society. It showcases the thought processes of
the people regarding the culture and its values from time to time. This study creates a need
for reflection and redoing the thought process where the society is still under the impression
of traditional gender roles.
References:
Ferguson, J., Kreshel, P., and Tinkham, S. (1990). In the Pages of Ms.: Sex Role Portrayals of
Women in Advertising. Journal Of Advertising, 19(1): 40-51.
Goffman, E. (1979). Gender advertisements. New York: Harper & Row.
Henthorne, T. and LaTour, M. (1995). A model to explore the ethics of erotic stimuli in print
advertising. J Bus Ethics, 14(7): 561-569.
Kang, M. (1997). The portrayal of women’s images in magazine advertisements: Goffman’s
gender analysis revisited. Sex Roles, 37(11-12): 979-996.
Lysonski, S. (1983). Female and Male Portrayals in Magazine Advertisements: A Reexamination. Akron Business And Economic Review, 14(3): 45-50.
Mayne, I. (2000). The inescapable images: gender and advertising. Equal Opportunities
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Available at: http://socialpsychonline.com/2015/08/culture-gender-stereotyping-advertising/
[Accessed 26 Sep. 2016].
387
Segmentation on the basis of Consumers’ Attitude toward
Advertising Music
Md Washim Raja1, Sandip Anand 1, and Ibha Kumar1
1
Xavier Institute of Management Bhubaneswar, Xavier University Bhubaneswar
Xavier Square, Jayadev Vihar, Bhubaneswar, Odisha (India) 751013
Emails: washim@stu.ximb.ac.in / sandip@ximb.ac.in / ibha@ximb.ac.in
Introduction:
Music in advertising means music employed in advertising. This includes all usage of music
in marketing communication, including various media settings such as radio commercials,
television commercials, web banners, websites, telephone waiting lines, stores, and online
advertising (Grakjaer, 2015). Neilsen (2015) reported that almost every television ad contains
music (as cited in Krishna, Cian, and Sokolova, 2016). Krishna, Cian, and Sokolova (2016)
emphasized that music is one of the most important elements of sensory marketing. Music in
advertising helps to persuade a consumer. Music has an influence on the attitude of the
consumers toward the advertising (Gorn, 1982; Shimp, 1981). Broad research portrays the
significant role of music in building consumers’ attitude toward brand (e.g., Allan, 2016;
Craton and Lantos, 2011; Krishen and Sirgy, 2016; Park, Park and Jeon, 2014) and increasing
brand recall (Ali, Srinivas and Bhat, 2012; Okes, 2007). Music in ad can increase purchase
intent of consumers (Alpert et. al., 2005; Johnson and Wagner, 2011; North et. al., 2004;
Okes, 2007) and may lead to product choice (Craton and Lantos, 2011; Gorn, 1982; Lantos
and Craton, 2012; Shimp, 1981).
For an advertiser, it is very important to identify the attitude of the ad consumers toward the
music incorporated in it. Craton and Lantos (2011) claimed that consumer develops an attitude
toward the music utilized in advertising. Attitude toward advertising music (Aam) is defined as
“a predisposition to respond in a favorable or unfavorable manner to an ad’s music during a
particular exposure occasion” (Lantos and Craton, 2012, p. 401). Different consumers may
have different attitudes to the same advertising music. Some consumers may become highly
enthusiastic while others may become negative toward specific advertising music. Thus,
advertisers may try to match music employed in advertising to existing attitudes of the
consumer toward advertising music. Consumers may have different Aam. To capture the
difference, this study attempts to segment young consumers based on their Aam. Aam can be
388
understood in terms of congruity, psychological process, and attitudinal impact. In this
context, we refer to an empirical work done by Washim-Raja and Anand (2016). WashimRaja and Anand (2016) validated three factors (congruity, attitudinal impact and
psychological processes) of Aam.
Research Gap and Research Problem:
Consumers in any market differ in terms of their buying attitudes and buying practices (Kotler
and Armstrong, 2016). Consumers based on their Aam are different from each other in their
preferences. In order to streamline the advertising designing process, the consumers of similar
characteristics should be grouped together in segments. Consumer segmentation based on Aam
may help the company to modify the advertising music to suit the different groups such that it
is well-understood by the group. A proper musical incorporation helps the marketers to design
advertising according to the target market.
Objectives of the study:
The specific objectives of this study were to explore and find out:
Do consumers vary in terms of their attitude toward advertising music?
How many consumer segments are there based on consumers’ Aam?
Research methodology:
This study attempts to segment young (age group between 17 to 25) consumers on the basis of
their Aam. We carried out a cluster analysis taking three factors (i.e., congruity, attitudinal
impact, and psychological processes) from a prior study conducted by Washim-Raja and
Anand (2016). We also conducted a discriminant analysis to predict differences among the
segments of market based on consumers’ Aam. We used the same data used in the previous
research (N=326). We carried out cluster analysis and discriminant analysis using SPSS
version 16.
Data analysis and results:
The cluster analysis presented a three-segment solution based on Aam. As indicated in table 1,
56.44% consumers constitute the first segment. This study finds out three segments. The first
segment is termed as Enthusiasts, the second segment as not-certain, and the third segment as
not-excited. Enthusiasts consumers prefer and appreciate the use of music in advertising.
These kinds of consumers feel fascinated toward the advertising music. Not-certain kinds of
consumers have moderate level of attitude toward advertising music. They like the music’s
association with advertising. However, these consumers may like that advertising music which
belong to their musical preference. Not-excited set of consumers are not sure about the
advertising music. These consumers are less likely to appreciate the use of music in
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advertising. However, if they listen to advertising music of their choice or/ and of their
favorite artist/s then they may build a positive Aam.
Musical preference of consumers among clusters
As indicated in table 2 at overall level, 9.5% consumers prefer western classical, 16% prefer
pop, 35.6% prefer favorite artist’s song, and 39% consumers prefer other music (Indian
classical, Sufi, Devotional songs, Ghazal). From the table 2 we found that consumers of the
not-certain consumers prefer western music which is highest (13.9 %) among all three
segments. 21.2% consumers who prefer pop music belong to enthusiasts. Not-excited contains
less number of consumers. However, 50.8% consumers who prefer their favorite artist’s songs
belong to not-certain which is highest among all the groups. 50.6% consumers who prefer
other music have their place in not-certain. With respect to consumers’ other music preference
there is a minimal difference found between enthusiasts and not-certain.
Attitudinal difference among clusters
Table 3 indicates that attitudinal differences are significant for the items of all three clusters.
Consumers of enthusiasts segment have highest mean score on all attitudinal items. Notcertain segment has scores in-between. Not-excited segment has the lowest scores on these
items.
Table 1 Cluster size based on Aam
Cluster Number of Case
Consumers (%)
Enthusiasts
56.44
Not-certain
24.23
Not-excited
19.32
Table 2 Musical preference of consumers among clusters
Music Preference
All
Enthusiasts
Not-certain
Not-excited
Figures in %
Western Classical
9.5
8.7
13.9
6.3
Pop
16.0
21.2
12.7
4.8
Favorite Artist’s song
35.6
35.9
22.8
50.8
Others
39.0
34.2
50.6
38.1
Pearson Chi-Square 22.629
Sig=.001
Table 3 Attitudinal Difference among Clusters
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Statements
All
Enthusiasts Not-
Not-
certain excited
Note: n = 326
(Mean Scores)
I like that music in ad which properly represents our
3.12 3.49
3.08
2.08
3.68 4.33
3.63
1.84
2.89 3.25
2.93
1.81
3.39 4.03
3.24
1.68
3.20 3.56
3.24
2.09
3.46 4.03
3.09
2.25
3.17 3.76
2.83
1.88
I prefer to enjoy ad with music. (Entertainment)
3.34 3.93
2.92
2.13
Music adds value to the ad. (Musical Significance)
3.88 4.49
3.39
2.72
Music in ad helps me to recognize the brand. (Brand
3.56 4.04
2.87
3.01
3.48 3.93
3.09
2.63
3.29 3.79
3.20
1.90
3.73 4.36
3.45
2.25
3.90 4.34
3.65
2.91
3.63 4.11
3.53
2.35
culture. (Cultural congruity)
I like that music which is specifically composed for
the ad. (Score Congruity)
I like those ads which highlight music artists.
(Musical artist message congruity)
I like those brands a lot which use good music in
their advertising. (Valance congruity)
I listen to the music in an ad only if it is highly
pleasurable. (Association incongruity)
Motivational/ inspiring songs in advertising give me
a positive feeling. (Mood Congruity)
I like usage of old filmy songs in advertising.
(Musical preference)
recognition)
Music in social ads has key role in spreading its
message. (Message communication)
Signature tunes in ads help me to identify the brand.
(Brand recall)
I can easily recognize signature tunes of some
popular advertisements. (Level and persistence of
attention to music)
Music in ad helps me to recall the advertising.
(Depth of processing of music)
Pleasant advertising music generates a positive
feeling toward the brand. (Feelings evoked by
music).
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Specific style of music used in an ad helps me to
3.56 4.09
3.29
2.36
3.67 4.12
3.38
2.74
3.67 4.25
3.29
2.45
identify the brand just by listening to the music.
(Music perceived as distinctive)
Sung message of an ad can be easily remembered.
(Remembered features of music available for
association)
The melody of certain ads mesmerizes me. (Mood
induced by music).
Table 4 Canonical Discriminant Function Coefficients
Statements
Function
1
2
I like that music in ad which properly represents our culture.
.200
-.044
I like that music which is specifically composed for the ad.
.254
-.472
I like those ads which highlight music artists.
.182
.079
I like those brands a lot which use good music in their advertising.
.269
-.245
I listen to the music in an ad only if it is highly pleasurable.
.142
-.223
Motivational/ inspiring songs in advertising give me a positive feeling
.241
.320
I like usage of old filmy songs in advertising.
.311
-.023
I prefer to enjoy ad with music.
.124
.240
Music add value to the ad..
.370
.130
Music in ad helps me to recognize the brand.
-.004 .679
Music in social ads has key role in spreading its message.
.200
.183
Signature tunes in ads help me to identify the brand.
.220
-.368
I can easily recognize signature tunes of some popular advertisements.
.323
-.072
Music in ad helps me to recall the advertising.
.264
.095
Pleasant advertising music generates a positive feeling toward the brand.
.258
-.300
Specific style of music used in an ad helps me to identify the brand just by
.278
.128
Sung message of an ad can be easily remembered.
.161
.213
The melody of certain ads mesmerizes me.
.198
.201
listening to the music.
Table 5 Segments’ Centroid on Aam Functions
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Segments
Function
1
2
Enthusiasts
2.128
.214
Not-certain
-.948
-.873
Not-excited
-5.027
.470
Cluster differences based on consumers’ Aam
Table 4 indicates coefficients of 18 attitudinal items on two functions.
Table 5 represents scores of three segments on two functions. Enthusiasts is affirmative on
both, function 1 and function 2. Not-certain has negative centroid on both the functions.
Not-excited has negative centroid on function 1 whereas positive loading on function 2.
Implications of the Study:
Music in ad works as a catalyst of ad if it is treated properly (Hacker, 1984). This study helps
practitioners to segment the market on the basis of Aam of the consumers. This process may
help advertisers to design effective advertising. This may help advertisers to make different ad
strategies for different segments of the market with respect to their attitude.
References:
Allan, D. (2016). Turn it up: That’s my song in that ad. International Journal of Music
Business Research, 3(1): 145-148.
Alpert, J. I., & Alpert, M. I. (1991). Contributions from a Musical Perspective on Advertising
and Consumer Behavior. Advances in Consumer Research, 18(1): 232-238.
Craton, L. G., & Lantos, G. P. (2011). Attitude toward the advertising music: an overlooked
potential pitfall in commercials. Journal of Consumer Marketing, 28(6): 396-411.
Craton, L. G., & Lantos, G. P. (2011). Attitude toward the advertising music: an overlooked
potential pitfall in commercials. Journal of Consumer Marketing, 28(6): 396-411.
Gorn, G. J. (1982). The effects of music in advertising on choice behavior: A classical
conditioning approach. Journal of Marketing, 46(1): 94-101.
Graakjaer, N. (2015) Analyzing music in advertising: television commercials and consumer
choice. New York, NY: Routledge.
Huron, D. (1989). Voice denumerability in polyphonic music of homogeneous timbres. Music
Perception: An Interdisciplinary Journal, 6(4): 361-382.
Lantos, G. P., & Craton, L. G. (2012). A model of consumer response to advertising music.
Journal of Consumer Marketing, 29(1): 22-42.
Oakes, S. (2007). Evaluating empirical research into music in advertising: A congruity
perspective. Journal of Advertising Research, 47(1), 38-50.
393
Park, H. H., Park, J. K., & Jeon, J. O. (2014). Attributes of background music and consumers'
responses to TV commercials: The moderating effect of consumer involvement. International
Journal of Advertising, 33(4): 767-784.
Washim Raja, M., Anand, S. (2016). Multi-item scale construction to measure attitude toward
advertising music. Paper to be presented at 7th IIMA Conference on Marketing in Emerging
Economies, India, 11-13 January 2017.
394
mHealth Effectiveness in Emerging Economies: a Study on
Factors Influencing Scope and Acceptability of mHealth Tools in
India.
Saikat Banerjee1, Sampada Kumar Dash2
1
Associate Professor (Marketing), Indian Institute of Foreign Trade-IIFT, (Kolkata Campus)
1583 Madurdaha, Kolkata, W.B. (India) 700107
2
DGM- Business Development & Strategy, Octavo Solutions Pvt. Ltd., G 27, LG Floor, Kailash
Colony, New Delhi (India) 110048
Email: saikat.iift@gmail.com / sampadadash@gmail.com
Introduction:
mHealth is defined as medical and public health practices supported by mobile devices such
as mobile phones, patient monitoring devices, personal digital assistants (PDAs), and other
wireless devices tool. mHealth is seen as a technology driven disease preventive and
diagnostic tool integrated in health and disease segment (WHO, 2011).mHealth is an
interactive tele-medical and tele-care system broadly integrate the use of mobile
telecommunication and multimedia technologies for mobile and wireless health care delivery
systems (Istepanian and Lacal 2003). Further, mHealth is a “mobile computing, medical
sensor, and communications technologies for health care” (Istepanian, 2004). mHealth is
seen globally as a diagnostic and treatment support system to improve health outcomes.
mHealth applications help in building health call centres, toll free emergency, appointment
reminders, maintaining patient records, patient monitoring, mobile telemedicine, community
mobilizations, treatment compliances, disease and epidemic outbreak tracking, conducting
health surveys, surveillance, awareness raising, and need based training for healthcare
workers (VW Consulting, 2009).
Research Gap and Research Problem:
Potential of mobile communication technologies are in line with huge expectations from
consumers to revolutionize healthcare service delivery in developing economies (Kahn,
Yang, and Kahn, 2010). Ford et.al.,(2006) stated mHealth can help counselling, diagnosis or
suggesting treatment through a remotely connected device. mHealth has a potential role in
improving disease management among certain groups in need; however, greater involvement
395
of health care providers may be important for realizing this potential. (Bauer, 2014).mHealth
helps to enjoy remote accessibility (Ford etal., 2006). Further, through mHealth, it is possible
to update information as per convenience that overcome resource limitations on supply side
of health care as well as structural barriers and behavioural limitations on the demand side
(Thirumurthy and Lester, 2012). Text message reminders through mHealth improves
attendance at health care appointments (Car J et al., 2013; Guy etal., 2012). Health systems
and relief organizations have used several kinds of mHealth applications to promote public
health and prevent disease at the households and health workers, administrators, suppliers,
and funders level, (World Bank,2011).Mobile users seeing mHealth programs as opportunity
as it gives them opportunity to see product information at their convenience
(MehreganyandSaldivar, 2012).According to WHO, mHealth technologies as tools that can
enhance delivery of life-saving interventions through improvements in health systems
performance, such as coverage, quality, equity, or efficiency, will resonate with health
decision-makers (WHO, 2000).It is an interactive communication tool which provides real
time information services with unique customization and personalized capabilities. Persistent
interactivity, personalization and engagement, potential to make healthcare more accessible
and scalable, cost-effective and more equitable are few advantages of mHealth solutions over
other health intervention delivery modes.(Mohr et al., 2013).mHealth is effective and useful
(Wu, Yang and Lin., 2007). Mobile based data collection improves promptness of data
collection, reduces error rates and improves data completeness and suggest that regular
access to health information via SMS or mobile-based decision-support systems may improve
the adherence of the frontline health workers to treatment algorithms (Agarwal et.al., 2015).
Physicians often associate information supplied over the internet as more credible (Trucco
and Amirkhanova, 2006). Banerjee and Dash (2011) viewed technological integrations is
becoming in-thing in the new-age communication system and E-communication
opportunities are being explored rapidly by organizations in India.
Rapid technology innovations in recent times has widened the scope of technology and
preventive health practice integration. Not much is known about mHealth concepts to the end
users and its acceptability as an application tool in an emerging economies like India.
mHealth service in an open network wireless communication, is susceptible to serious
security threats (Kotzetal., 2009). Additionally communication in mHealth applications are
scheduled in a virtual medium, and sometimes in a public place, reliability is an issue in
adoption of this healthcare system (Archer, 2007).
396
Though mHealth may increase understanding and awareness on preventive aspects of
diseases in both communicable as well as non-communicable disease segment, the concept is
not mainstreamed for various unexplored reasons. mHealth initiatives though supported
through schemes and programmes by Government of India, it is seen that there is a huge
barrier in terms of acceptance at end users, caregiver, care taker, consumer as well as at HCP
level.So, based on the issues raised from the secondary literature survey, following
hypotheses are proposed.
H1 : Ownership of smart phones are positively related to acceptability of mHealth
H2 : The number of mHealth programs used is positively related acceptability
H3 : Younger generations are more likely to adopt mHealth initiatives
H4: Frequency of doctors visit is positively related to acceptability of mHealth programs
H5 : Service type of participants is positively related to acceptability of mHealth
Objectives of the study:
The objective of this study is to understand the scope and acceptability of mHealth
applications recently started by mHealth enterprises in India by understanding the role of
demographic, social, behavioural and etc. The second objective of this study is to unearth
factors that influences acceptability of mHealth in India. An attempt will be made to identify
the gap between views of different stakeholders. At the end, a verbal conceptual model will
be proposed to offer strategic communication roadmap for the effective use of mHealth as an
application tool for improving health outcomes. As per knowledge, this is the first of its kind
proposed academic research study in India to evaluate the scope and acceptability of mHealth
concepts involving stakeholders from mHealth domain.
Research Methodology:
To capture views on mHealth a total 250 randomly selected samples are approached through
direct interview method.According to Kent (1999), a minimum sample size of 100 is needed
for any kind quantitative research to get a significant result.The questionnaire is structured
keeping in mind with variables like gender, age, qualifications, specialization, service type,
designation. The present study is based on primary data. Appropriate scales, tools and
techniques are used based on the questionnaires. The extant literature is examined for
previous scale used to measure the attitude towards mHealth applications. Based on the
literature
survey
and
scale
used
byHung
and
Jen
(2012),Kim
and
Garrison
(2009),Bhattacherjee and Hikmet (2007),Taylor and Todd (1995) andDagger et al.
(2007).Forty-three measurable characteristics are used to capture views of HCPs, mHealth
entrepreneurs and end user consumers about mHealth applications.To calculate the internal
397
consistency of the data and assess the quality of the instrument the coefficient alpha is
measured.Cronbach‟s coefficient alpha is calculated to measure the reliability of these scales.
The Cronbach‟s alpha value of respective variables was all above 0.60, which demonstrated
that the questionnaire used in this study meets a qualified level of reliability (Chow, 2004).
Respondents are asked to rate each of the characteristic, using a five-point Likert type scale,
ranging from „1=strongly disagree‟ to „5=strongly agree‟. The survey instrument is pre-tested
through pilot survey by interviewing 20 samples whose names are excluded from the
sampling frame of the main study. To analyze the data, an attempt is made to identify latent
factors that influencing various measurable characteristics. Gonzalez et al. (2002)‟s approach
is used in factor analyzing the responses from various measurable characteristics of variables
to identify prominent influencing factors behind effectiveness of mHealth applications as a
preventive health communication and data capture tool. Factor analysis identifies a relatively
small number of factors that represent relationships among set of many interrelated variables
under study (Norusis, 1994).The principal component extraction method is used with
Varimax rotation (Hair et al., 2006).The resultant factors are determined using an eigenvalue
of 1 or more. Statements are presented in a factor only if their factor loading is greater than
0.4. This value has been described to be a common factor loading default (Hair et al., 2006).
As a result, only variables with higher loading scores are highlighted with a clear
understanding of factors.
Data Analysis and Results:
Result shows that respondents have a positive view on mHealth. Moreover, there is a feeling
mHealth applications are informative, useful and good for the social well-being of
society.However, there is mix feeling about safety aspects of mHealth applications. It seems
that conveniences, quality of information, credibility are some major factors influencing
effectiveness of mHealth as an application and tool for communication. Stakeholders
primarily end user consumers are in the view that mHealth applications may add value in
building the marketing communication options. It is viewed that through mHealth apps
appropriate information to the public are disseminated through an ease of doing things. There
is a strong feelings that mHealth is useful and connects consumers and HCPs across
boundaries.
Implications of the Study:
Result from this study will help mHealth professionals, pharmaceuticals and healthcare,
organizations to understand factors influencing scope and acceptability of mHealth as a
marketing communication tool. mHealth may lower cost to improve public health outcomes
398
in devising a preventive health and social model strategies. The proposed verbal model will
help to chart mHealth as awareness tool in a strategically profitable way.
References:
Agarwal, S., Perry, H. B., Long, L. A., &Labrique, A. B. (2015). Evidence on feasibility and
effective use of mHealth strategies by frontline health workers in developing countries:
systematic review: Tropical Medicine & International Health, 20(8): 1003-1014.
Bauer, A. M., Rue, T., Keppel, G. A., Cole, A. M., Baldwin, L. M., and Katon, W. (2014).
Use of mobile health (mHealth) tools by primary care patients in the WWAMI region
Practice and Research Network (WPRN): The Journal of the American Board of Family
Medicine, 27(6): 780-788.
Gurol-Urganci, I., de Jongh, T., Vodopivec-Jamsek, V., Atun, R., and Car, J. (2013). Mobile
phone messaging reminders for attendance at healthcare appointments: Cochrane Database
Syst Rev, 12.
Guy R, Hocking J, Wand H, Stott S and Ali H. (2012) How effective are short message
service reminders at increasing clinic attendance? A meta-analysis and systematic review:
Health Serv Res 47: 614–632.
Istepanian, R., andLacal, J. (2003). Emerging Mobile Communication Technologies for
Health: Some Imperative notes on m-health: Proceedings of The 25th Silver Anniversary
International Conference of the IEEE Engineering in Medicine and Biology Society; Cancun,
Mexico September 2003.
Istepanian, R. (2004). Introduction to the Special Section on M-Health: Beyond Seamless
Mobility and Global Wireless Health-care Connectivity: IEEE Transactions on Information
Technology in Biomedicine, 8(4): 405-413.
Kahn, J. G., Yang, J. S., & Kahn, J. S. (2010). Mobile health needs and opportunities in
developing countries. Health Affairs, 29(2), 252-258.
Kay, M., Santos, J., and Takane, M. (2011). mHealth: New horizons for health through
mobile technologies: World Health Organization, 66-71.
Mehregany, M., & Saldivar, E. (2012). Opportunities and Obstacles in the Adoption of
mHealth: mHealth, 7-20.
Mohr, D. C., Cheung, K., Schueller, S. M., Brown, C. H., &Duan, N. (2013). Continuous
evaluation of evolving behavioral intervention technologies: American Journal of Preventive
Medicine, 45(4): 517-523.
Thirumurthy, H., & Lester, R. T. (2012). M-health for health behaviour change in resourcelimited settings: applications to HIV care and beyond: Bulletin of the World Health
Organization, 90(5): 390-392.
Qiang, C. Z., Yamamichi, M., Hausman, V., Altman, D., & Unit, I. S. (2011). Mobile
applications for the health sector. Washington: World Bank.
World Health Organization. (2000). The world health report 2000: health systems: improving
performance. World Health Organization.
399
1
Transliteration and its impact on Print Advertisements.
Susan Mathew & Joshy Joseph
Rajagiri Center for Business Studies, Kochi & Indian Institute of Management, Kozhikode.
susanmathew221@gmail.com
Introduction
Language is a means of communicating ideas and concepts. English as a global lingua franca is a
common contact language worldwide. It is the language of international business, politics and
popular culture. As an international language it evokes connotations associated with
professionalism, international appeal, prestige, high quality, confidence and practical use
(Haarmaan, 1989).
With markets becoming smaller and media influence increasing, the language in advertisements
must be more creative, complex, powerful, persuasive and attention getting. The language in
media is constantly changing as it comes in contact with other languages and cultures. The
message in ads are very dependent upon how effectively language and other symbolic
representations are used. For an advertisement to be liked the language used must affect the
consumer and mean something to him.
With more than three fourth of the children in the world are growing in a bilingual environment.
Advertisers think of several creative and persuasive ways of appealing to them. Increasing
number of global brands and marketing practices of multinational companies have led to the
mixing of foreign language in advertisements. Some of the linguistic techniques include pun,
personification, Metaphor etc. Multilingual advertising make use of borrowing, code switching
and now transliteration. Borrowing is incorporating a foreign word from one language to
another, Code switching is inserting a word or phrase from one language into another language.
Transliteration is writing the script of one using the script of another.
The linguistic diversity of India is quite akin to the Biblical reference of the Tower of Babel
(Bhatia, 2007). Code switched are widely used in Indian advertising. Nestle’s ‘ Taste bhi or
Health bhi’, Dalda oils- ‘Dabba kali Pet full’ are a few example of code switched ads in India.
Hindi in the Devanagri script has been the official language of India since Independence though
400
2
English continues to be used as the associate language. One of the reasons for popularity and
spread of English is that it freely borrows from all other languages and has made them a part of
its lexicon. Hindi has also borrowed words from English. In a culturally as well as a mother
tongue-diverse country like India, transliteration or code switching from an Indian language to
English provides a far better reach considering the popularity of English as a first language. This
could also be because the majority of Indians can neither read nor write the vernacular, but are
able to speak it (Rajeevan, 2009).
Marketers in India have seen using English when advertising luxury productions and Hindi for
necessity products. Mixed language was also used to promote products in the necessity category
(Krishna and Ahluwalia, 2008). Transliteration can be cited as a method for mixed language
promotion. Honda Amaze- ‘Badle Aapki Duniya’, Dhara oils- ‘Dhara Dhara, Shudh Dhara’, Surf
Excel- ‘Daag achhe hain’. The reason could be English aspires while Hindi relates.
Research Gap & Research Problem
Research in bilingual advertising have shown that when ads switch from first to second language
are better liked and aids in cognitive and affective process ability, cognitive ad involvement,
cultural sensitivity, persuasion and positive association of family, friends, Home and homeland.
Brand names in the second language help recall (Ahn & La Ferle, 2008;Bishop & Peterson,2010;
Noreiga & Blair,2008). Native language in ads also lead to higher comprehension among
bilinguals (Luna & Peracchio, 2001). English language could never be a substitute for foreign
language advertisements (Coffey, 2014). Research by Luna and Peracchio (2001) concludes that
it is preferable to advertise in the first/native language of the bilingual because second language
words are more difficult to process for bilinguals. Later research by Luna and Peracchio (2002,
2005) examine language effects from an affective perspective and argue that some words have
more emotional attachment when presented in the native language than second language and
switching from the second language to the native language lead to favourable responses to the ad
and also ad liking. A foreign language used in an ad for MNC marketing luxury goods and local
language for marketing necessity goods led to favourable attitude towards the ad (Krishna &
Ahluwalia,2008)
This could be due to the sociolinguistic differences between cognitively
401
3
equivalent words across two languages. The research associated with code switching has been
extended to transliteration and based on this we propose the following
1. Transliterated global language ads have a more positive attitude
towards the ad than global language ads
2. Transliterated global language ads lead to better ad liking than
global language ads
3. Transliterated global language lead to higher purchase
intention than global language ads
4. Transliterated regional language ads have a more positive
attitude towards the ad than regional language
5. Transliterated regional language ads lead to better ad liking
than regional language
6. Transliterated regional language ads lead to higher purchase
intention than regional language ads.
7. Regional language ads are better liked than global language ads
8. Regional language ads have a greater positive attitude than
global language ads
9. Regional language ads leads to higher purchase intention than
global language ads
Objectives of the study
The major objectives of the study is to find out if:
1. Ad liking, Attitude towards the ad and purchase intention is
greater for global transliterated ads or global language ads.
2. Ad liking, attitude towards the ad and purchase intention is
greater for regional transliterated language ads or regional
language ads.
3. Ad liking, attitude towards the ad and purchase intention is
greater for regional language ads or global language ads.
402
4
Research Methodology
730 students from a reputed Indian university participated in the study. 730 students participated
in the study (56 % females, average age 22.3 years) in exchange for a partial class credit. The
selected students were fluent in two languages-English and their regional language Malayalam.
We presented four scenarios where the participants were exposed to English Only, Malayalam
only, English written in Malayalam (EwM) and Malayalam written in English (MwE).
Participants were randomly assigned to one of these groups. We created ads for a fictitious brand
of hair shampoo named Glo and presented before them four situations. The participants were told
that they have to evaluate a brand of shampoo whose ad was given to them. They were given 5
minutes to read, process and understand the ad. Then a questionnaire was given to them to
measure ad liking, attitude towards the ad and purchase intention.
Data Analysis and Results
Transliterated ads where the headlines were transliterated from global language ads had a greater
ad liking (p<.000) than global language ads. These ads also had a more positive attitude towards
the ad (p<.000) compared to global ads. Purchase intention was also higher (p<.001) for
transliterated global language ads than global language ads.
Attitude towards the ad was more positive (p <.000) for regional language ads than regional
transliterated language ads. Regional language ads were better liked (p<.000) than regional
transliterated language ads. Purchase intention was also higher (p <.039) for regional language
ads than regional transliterated language ads.
Regional language ads had a more positive attitude (p <023) towards ads than global language
ads. Ad liking was more (p <.001) for regional language ads than global language ads. Regional
language ads lead to higher purchase intention (p <.121) than regional language ads.
Implications of the Study
The study brings to light and breaks the misconception that the global language is more
acceptable among consumers in a multilingual society. Managers have to think of customizing
their ads according to region of sales. A foreign language cannot be substitute for the regional
403
5
language. The positive emotions aroused by the regional language is reflected towards the ad.
The advantage of a transliterated ad is that it uses two language. For regional advertising
transliterated global language can be a good choice, and perhaps for a larger market global
transliterated ads could be more appealing.
References
Ahn, J. & La Ferle. C. (2008). Enhancing Recall and Recognition for Brand Names and Body
Copy. Journal of Advertising, 37 (3), 107-117.
Bhatia, T. K. (2007). Advertising & Marketing in Rural India. New Delhi: Macmillan Publishers
India.
Bishop, M.M, & Peterson, M. (2010). The Impact of Medium Context on Bilingual Consumers’
Response to Code-Switched Advertising. Journal of Advertising, 39 (3), 55-67.
Coffey, A.J (2014). The Power of Cultural factors in Spanish-Language Advertisements. Journal
of Advertising Research, 54 (3), 346-355.
Domzal, T. J., Hunt, J. M., & Kernan, J. B. (1995). Achtung! The information processing of
foreign words in advertising. International Journal of Advertising, 14(2), 95-114.
Haarmaan,H. (1989). Symbolic Values of Foreign Language Use; From the Japanese Case to a
General Sociolinguistic Perspective. Berlin: De Gruyter Mouton.
Krishna, Aradhna, & Rohini Ahluwalia (2008), ‘Language Choice in Advertising to Bilinguals:
Asymmetric effects for Multilingual versus Local Firms’. Journal of Consumer Research. 35(5),
692-70.
Luna, D.,& Peracchio,L. A. (2001). Moderators of language Effects in Advertising to Bilinguals:
A Psycholinguistic Approach. Journal of Consumer Research, 28(2),284-295.
Luna, D.,&Peracchio,L. A. (2002). Where There Is a Will....": Motivation as a Moderator of
language Processing By Bilingual Consumers. Psychology & Marketing, 19(7/8), 573-593.
Luna, D., & Peracchio.L. (2005). Advertising to Bilingual Consumers: The Impact of CodeSwitching on Persuasion. Journal of Consumer Research,31(4), 760-765.
Noriega, J. & Blair,E. (2008). Advertising to bilinguals: Does the language of advertising
influence the nature of thoughts? Journal of Marketing, 72(5), 69-83.
Rajeevan,T.P. (2009,June 7). English babus lord it over in god’s own country. The New Indian
Express.
404
Exploring Celebrity Associations through Brand Concept
Mapping: A Consumer Perspective
Mandeep Kaur Ghuman1, Yadvinder Parmar2 and Bikram Jit Singh Mann3
1
Assistant Professor, 2Research Scholar and 3Professor.
University Business School, Guru Nanak Dev University, Amritsar, Punjab, India.
E-mails: mandeepghuman@yahoo.co.in / yadvinderparmar@yahoo.com /
bikrammann@hotmail.com
Introduction:
A celebrity endorser is an individual who enjoys public recognition and uses this recognition
to endorse a brand in an advertisement (McCracken, 1989). Celebrities such as movie stars,
TV stars, sports stars, politicians, members of the royal family, chefs and CEOs are
commonly used as endorser in advertisements. Celebrities are instantly recognizable and
attract consumer interest to a product. Therefore, celebrity endorsement is an area of keen
interest for both the practitioners and the academic researchers.
Research Gap and Research Problem:
Although there is an extant research related to celebrity endorsements, certain gaps still
remain. The celebrity endorsement literature focuses on the ideal attributes a celebrity
endorser should posses and the impact of these attributes on consumer behavior. The most
commonly used celebrity endorser scale comprises of three dimensions namely Expertise,
Trustworthiness and Attractiveness (Ohanian, 1990). But, there has been no study which
identifies actual celebrity image associations residing in the minds of the consumers. Each
celebrity has various types of associations in the memory of the consumers that relate to their
personal, social and cultural characteristics such as profession, endorsements, age, gender,
personality, lifestyle etc. The associations inherent in celebrities are passed onto the brands
they endorse, and thus impact buying behavior of consumers (McCracken, 1989). Knowing
the actual associations that consumers link with celebrities would help us in understanding to
what extent consumers take interest in celebrities. This would further contribute to literature
by revealing the associations that act as the base for consumers when they evaluate celebrities
405
for their expertise, trustworthiness and attractiveness. Hence, it is important to explore the
associations that consumers link with the celebrities.
Previous research also states that the messages conveyed by the celebrity image and the
product should be congruent for effective advertising (Kamins, 1990). However, existing
research does not reveal what types of products and services are suitable and should be
endorsed by a celebrity having a particular set of associations.
There are also very few studies on celebrity endorsements that study the Indian consumers.
Now more than 50% of the ads in India feature celebrities. This may be due to the fact that
Indian consumers are characterized by holistic thinking which involves an orientation to the
context or a field as a whole. So, they pay more attention to celebrities endorsing the brands
rather than only focusing on the attributes of the products. Another reason for its success in
India could be that India ranks high on cultural dimension of power distance and
collectivism.
Objectives of the Study:
The objectives of the study are:
1. To investigate the various integrated sets of associations that Indian consumers link
with the celebrities.
2. To measure the human brand equity of the celebrities based on the relative strength,
favourability and uniqueness of the associations.
3. To identify the appropriate product categories and services that should be endorsed by
a celebrity having a particular set of associations.
Research Methodology:
A three stage survey was conducted. In the first stage, 30 post graduate students were asked
to mention 5 Indian celebrities whom they associated with endorsements in each of the two
categories - Movie Stars and Sport Stars. The most frequently mentioned Sport Stars were
Virat Kohli and M.S.Dhoni and the Movie Stars were Shahrukh Khan and Ranbir Kapoor.
The fifth celebrity, Baba Ramdev, was selected on the basis of researcher judgement
considering his popularity and the exponential growth of his company named Patanjali
406
Ayurved Ltd. In the second stage, another set of 58 post graduate students were asked to
identify associations related to the five celebrities on the basis of existing literature and word
association test.
Brand Concept Maps methodology, given by John et al. (2006), is used to analyze celebrity
associations. It comprises of three stages: Elicitation, Mapping and Aggregation. In the
elicitation stage, important associations are identified. In the mapping stage, these
associations are mapped onto individual maps constructed by the respondents. In the
aggregation stage, the individual maps are aggregated into a consensus map on the basis of a
set of rules. Frequencies were used to develop consensus maps which indicate core
associations and their interconnections. Therefore, in the third stage of data collection, one to
one interviews were conducted with another set of 50 respondents. The respondents were
asked to identify associations and construct Brand Concept Maps for the three celebrities Virat Kohli, Shahrukh Khan and Baba Ramdev.
This research also applies methodology provided by Krishnan (1996) for measuring human
brand equity of Virat Kohli, Shahrukh Khan and Baba Ramdev. Krishnan (1996) measures
strength, favorability and uniqueness of the associations to examine brand equity.
Another study was conducted to determine the product categories and services that consumer
deem fit to be endorsed by Virat Kohli, Shahrukh Khan and Baba Ramdev. A list of 30
products and services frequently endorsed by celebrities was provided to 115 post graduate
students and were asked to provide their opinion. On the basis of the frequency counts, the
product categories and services that are congruent with the selected celebrities were
determined.
Reliability Analysis
Split half reliability is used to determine how much the consensus BCMs are consistent with
the multiple administrations of the technique. Correlations were determined between the
consensus BCMs and the split half BCMs and were found to be significant at 0.01 level and,
except two, all meet the acceptable level of reliability.
Data analysis and results:
The findings show that various associations for the five celebrities can be classified into five
categories namely, professional associations, public image related associations, social
407
responsibility and ethics related associations, lifestyle associations and negative associations.
The professional associations are further categorized as profession, professional performance,
and professional skills and expertise. Results reveal that consumers are aware of various
primary as well as secondary career lines of celebrities. The consumers evaluate a celebrity
based on his professional success.
The examination of brand concept maps (Figures 1, 2 and 3) reveals that all the associations
are not equally significant to the consumers. The number of associations that appear on
BCMs are 15 (out of 32) for Virat Kohli, 19 (out of 33) for Shahrukh Khan and 19 (out of 32)
for Baba Ramdev. The associations related to celebrity profession, both primary and
secondary careers, are found to be the central associations for all the three celebrities. This
finding is consistent with Ilicic and Webster (2015) who find that the profession of the
celebrities is the most important association. Most of previous studies have evaluated
celebrities based on their expertise, trustworthiness and attractiveness and thus have ignored
the celebrity profession as an association. Our results show that celebrity profession is a
primary association and might have significant implications for brand endorsements.
Figures 1, 2 and 3
The comparison of the three celebrities shows that Baba Ramdev and Shahrukh Khan are
ahead of Virat Kohli in terms of number of associations. Further, Shahrukh Khan has
relatively more positive image than the other two celebrities. Shahrukh Khan and Baba
Ramdev overtake Virat Kohli in terms of unique associations suggesting that the former
celebrities have been more successful in creating their own unique image in consumer
memory. Overall, Shahrukh Khan is found to have more human brand equity than Virat Kohli
and Baba Ramdev.
Further, it is found that consumers perceive Virat Kohli to be fit for endorsing lifestyle
products such as clothing, footwears, watches; automobiles; personal care products such as
deodorants, shaving cream; beverages; telecommunication services and internet applications.
These categories are congruent with Virat Kohli‟s profession, public image and lifestyle
associations related to his style, aggressiveness and youthfulness. Shahrukh Khan is found to
be more suitable for endorsing consumer electronics, personal care products and services like
public service ads, banking, insurance, travel and tourism, e-commerce websites and aviation
services. Personal care products and Consumer electronics supports his image of a movie star
408
Figure 1: Consensus BCM for Virat Kohli
+Inspiring
+Hardworking
+Youth
icon
+Record
Breaker
+Best batsman of the team
+Cricketer
409
+Team
Player
-Controversy
-Anushka
Sharma
(Girlfriend)
Virat
Kohli
+Popular
Aggressive
-Abusive Behavior
+Stylish
+Endorsement
+Successful
Figure 2: Consensus BCM for Shahrukh Khan
+Cricket lover
+Funny
+Larger
than life
image
+Achievemen
t oriented
-Over the
top acting
+Romantic
+Known
wide
+Owner of Kolkata
knight Riders
world
+Expertise
+Movie star
+T.V. Shows
410
Shakrukh Khan
+Hardworking
+Businessma
n
+likes to
limelight
be
-Works for money
+Red Chilies Entertainment Pvt.
Ltd.
+Attractive
+Brand Ambassador
Note: The solid-line circle signifies core associations and the dashed-line circle signifies non-core associations
+Wealthy
in
Figure 3: Consensus BCM for Baba Ramdev
+Intelligent
-Controversial
+Leadership
+Experience
d
+Expert
+Skilled
+Physically
fit
-Involved in
politics
-Indefinite fast
at
Ramlila
ground
+Indian
+Yoga guru
Baba Ramdev
+Sanyasi
411
+Powerful
+Public
figure
+Taught
yoga
to
celebrities
+Medicines
+Founder
of
Patanjali Pvt. Ltd.
+Good
Products
(FMCG)
+Natural and
herbal
treatment
and businessman respectively and thus, making these products deemed to be fit to be
endorsed by him. The services require an element of trustworthiness, which is consistent with
Shahrukh Khan‟s positive and reliable image. The findings reveal that Baba Ramdev is the
most suitable celebrity for endorsing household products, beverages and food products. This
could be because of his profession as a yoga guru supports the health conscious mentality of
consumer and his Patanjali brand is also associated with all such household and food product
categories.
Implications of the study:
This research has important implications for academicians and marketing managers. The
findings reveal the various types of associations that consumer link with the celebrities. The
future research studies may use these associations while evaluating celebrities. The marketing
managers may use these celebrity associations while selecting their brand endorsers. The
findings further recommend that marketers should also consider the congruence between
celebrity associations and the product category and services. Further, brand managers can
themselves use BCM methodology in matching the image of the celebrity with the image of
their brand. These findings are also significant for celebrities themselves and celebrity
management companies. The findings put forth the criteria that consumers use to evaluate a
celebrity, and hence guide celebrities how they should behave in their professional and public
spheres.
References
Collins, A.M. and Loftus, E.F. (1975), “A spreading activation theory of semantic
Processing”, Psychological Review, Vol. 82, No.6, pp. 407-28.
Freeman, L.C. (1979), “Centrality in Social Networks Conceptual Clarification”, Social
Networks, Vol. 1, No. 3, pp. 215–239.
French, A.P. and Smith, I.G. (2010), “Measuring political brand equity: a consumer oriented
Approach”, European Journal of Marketing, Vol. 44, No. 3-4, pp. 460-477.
Ilicic, J. and Webster, C.M. (2015), “Consumer values of corporate and celebrity brand
associations”, Qualitative Market Research: An International Journal, Vol. 18, No.2, pp.164187.
John, D.R., Loken, B., Kim, K. and Basu Monga, A. (2006), “Brand Concept Maps: A
Methodology for Identifying Brand Association Networks”, Journal of Marketing Research,
Vol. 43, No. 4, pp. 549-563.
412
Kamins, M.A. (1990), “An investigation into the „match-up‟ hypothesis in celebrity
advertising: when beauty may be only skin deep”, Journal of Advertising, Vol. 19, No. 1, pp.
4-13.
Keller, K.L. (2008), Strategic Brand Management: Building, Measuring and Managing
Brand Equity, 3rd edition, Pearson Prentice Hall, NJ.
Krishnan, S. H. (1996), “Characteristics of memory associations: A consumer-based brand
equity perspective”, International Journal of Research in Marketing, Vol.13, pp. 389–405.
McCracken, G. (1989), “Who is the celebrity endorser? Cultural foundations of the
Endorsement Process”, Journal of Consumer Research, Vol. 16, No.3, pp. 310-321.
Ohanian, R. (1990), "Construction and validation of a scale to measure celebrity endorsers'
perceived expertise, trustworthiness, and attractiveness", Journal of advertising, Vol. 19,
No.3,pp. 39-52.
Thomson, M. (2006), “Human brands: investigating antecedents to consumers‟strong
attachments to celebrities”, Journal of Marketing, Vol. 70, No. 1, pp. 104-119.
Wyer, R.S. and Srull, T.K. (1989), “Person memory and judgment”, Psychological Review,
Vol. 96, No. 1, pp. 58-83.
413
A Strategic Marketing Communication framework for Small
Businesses: A Case Survey and Case Research Approach
Meenakshi P.1, Sanjeev Varshney1
1
XLRI Jamshedpur, Circuit House Area, Sonari, Jamshedpur, Jharkhand (India) 831001
Emails: r10011@astra.xlri.ac.in / sanjeevvarshney@xlri.ac.in
Introduction:
Marketing communication characterizes a substantial area of study investigated through
numerous perspectives (Thrassou & Vrontis, 2006). An important area of such research is
marketing communication strategy design in small businesses (Bell, Hendon & Parker, 2008;
Gabrielli & Balboni, 2010), especially in the view of their perceived importance in economic
growth, innovation and employment generation (Storey, 1994; Haynes, Becherer & Helms,
1998; Tse & Soufani 2003). Small businesses are often constrained by their financial, temporal
and human resources (Gilmore, Carson & Grant, 2001) and effective execution of marketing
communication strategies is thus a key element for survival and development of small businesses
(Popescu et al. 2013). Although several papers on small businesses indicate their marketing
communication
processes,
comprehensive
documentation
of
patterns
of
marketing
communication design strategies do not exist. Also, the database of papers on marketing
communication in small business context tends to be small. Thus, to fill this gap, this research
examines marketing communication strategy design in small business context and seeks to
develop typologies of marketing communication design based on two step research process,
namely case survey research and case study research.
Research Gap and Research Problem:
Fill (2009) viewed marketing communications as a management process through which a firm
contacts its various audiences while enabling them to respond to their messages. Rowley (1998)
presented marketing communication strategy design as a multi-staged domain which involves
functions such as: (1) targeting customer segments, (2) defining communication objectives, (3)
414
message design, (4) establishing promotional budget, (5) selecting communication channels, (6)
deciding on promotional mix, and (7) measuring promotional effectiveness. Independent
literature work has been done in each of them in the past, yet there remains a significant gap
towards study of marketing communication in totality within a small business context. This gap
arises given the ever-increasing importance of marketing communication respective to the size of
the business and there is a need for improved understanding of the same in totality. Review of
the literature gives some theoretical sensitivity on these seven stages of marketing
communication in small businesses in silos, but what actually lacks is the framework of strategic
marketing communication and identification of patterns in marketing communication. We intent
to fill this gap based on our research work.
Objectives of the study:
This research examines marketing communication design in the context of small businesses. The
objective of this research study is to understand the nature of strategic marketing communication
in small businesses and to understand their distinct patterns. Thus, the research objectives are to
(1) create a model of marketing communication in small businesses (2) and based on this model,
we aim to identify the patterns of marketing communication design in small businesses and
present typologies.
Research methodology:
We adopt a Critical Realist paradigmatic position in this research. This position enables us to
consider the information from extant literature and adopt a research methodology which
facilitates subtle dimensions to be discovered by probing and reflecting. The research
methodology is undertaken as following. First, based on a sample of 30 papers comprising
published journal articles, a tentative framework was derived, which mostly highlights the seven
stages of marketing communication design (Rowley, 1998). Next, using case survey research
(Yin & Heald 1975; Mintzberg, Raisinghani & Théorêt, 1976; Bullock & Lawler, 1984;
Shrivastava & Nachman, 1989; Larsson, 1993) on 30 published quality cases, the tentative
framework based on literature review is confirmed/ disconfirmed and primary elements related
415
marketing communication in small businesses are identified. This is presented as an exploratory
framework for understanding strategic marketing communication design in small businesses.
This conceptual framework is used an input to case study research in the next phase of case
research. We conduct 27 case studies till theoretical saturation (Eisenhardt, 1989; Yin, 2003;
Silverman, 2005) and analyse the findings using thematic analysis (Boyatzis, 1998; Fereday &
Muir-Cochrane, 2006). Based on emerging themes, we create a model of marketing
communication design and identify patterns in marketing communication design. Finally we
present a typology of marketing communication design based on the identified patterns.
Research Scope:
The primary scope of our investigation is to evaluate the marketing communication strategies in
small businesses. While conducting the case survey research, we focused on research published
case studies on small businesses from various databases. With respect to case studies, it was
decided to position the research within micro businesses in the consumable and creative sectors
as micro businesses play a significant role in employment generation and economic growth.
Data analysis and results:
This research addresses the absence of a holistic framework for strategic marketing
communication design in small businesses which can help us determine patterns of marketing
communication strategies. A review of the marketing literature reveals several approaches
regarding aspects of strategic marketing in small business such as marketing performance
assessment models (Carson, 1990; Gilmore, Carson & Grant, 2001), marketing decision process
model (Graham, 2004) or internationalization (Poon & Jevons, 1997). However, few articles
address the strategic marketing communication design, and none discussed patterns in marketing
communication in small businesses considering from behavioral perspective. This study not only
investigated the actions of owner-managers with respect to their actions but extracted patterns
from the analysis of research. The qualitative approach adopted by this study facilitated theory
building. Findings of this study reveal eight dimensions that should be addressed when
conceptualizing understanding of marketing communication design strategies. As the findings
416
indicate, these dimensions are interdependent, and firms position themselves on the eight
dimensions in an integrated way which leads to different patterns of strategies in the small
businesses. Based on these dimensions, we established a model constituting the nature and
meaning of these and causal relationships among them. Then we identified five distinct patterns
of marketing communication design by integrating the themes that emerged from analysis of
case studies and thus, we offered five typologies of marketing communication design in small
businesses. Previous studies have demonstrated marketing communication models which lacked
holistic approach or greater depth. This paper tries to close the research gap and shows the
relevance of marketing communication strategies to small firms which is a significant
contribution to the existing body of literature.
In summary, this research has provided a typology schema covering the subject of design or
marketing communication strategies in small businesses by presenting several new insights and
confirmed or disconfirmed a few insights from the past. These revelations add significant value
to the body of existing literature.
Implications of the Study:
Literature supporting marketing communication specific to small businesses have just begun to
emerge. However, the amount of available research data is insufficient compared to the potential
utility of marketing communication knowledge in small business context. The marketing
communication typology proposed herein provides marketers with a framework for effectively
leveraging the efficiencies and synergies of marketing communication, supported by new age
marketing communications strategies. To our knowledge, it is the first framework to integrate a
variety of marketing communication tactics from behavioral perspective. With the industry-wide
movement towards integrated marketing communication (IMC), this framework will provide
both marketers and academics with a clear prototype for efficiently and effectively organizing
communication strategies and interacting with stakeholders. Next, this study makes significant
methodological contribution. This research reports a successful, structured approach to case
survey research that meets rigorous academic standards. To our knowledge it is first such survey
in marketing communication domain which synthesizes extant literature. The research also
417
implements case study using a hybrid (inductive and deductive) qualitative approach. The
research illustrates how thematic analysis in both case survey and case research studies. In
conclusion, we presented successful marketing communication for small businesses with
significant implications.
References:
Bell, J. R., Hendon, J. R., & Parker, R. D. (2008). Marketing Communication: What Does It
Mean To Small Business? 1. American Journal of Entrepreneurship, 1(1), 45.
Boyatzis, R. E. (1998). Transforming qualitative information: Thematic analysis and code
development. Sage.
Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative research in
psychology, 3(2), 77-101.
Bullock, R. J., & Lawler, E. E. (1984). Gainsharing: A few questions, and fewer answers.
Human Resource Management, 23(1), 23-40.
Carson, D. (1990). Some exploratory models for assessing small firms' marketing performance (a
qualitative approach). European journal of marketing, 24(11), 8-51.
Centeno, E., & Hart, S. (2012). The use of communication activities in the development of small
to medium-sized enterprise brands. Marketing Intelligence & Planning, 30(2), 250-265.
Miller, W. L. Primary care research: a multimethod typology and qualitative road map. Doing
qualitative research. Edited by: Crabtree B, Miller WL. 1992.
Eisenhardt, K. M. (1989). Building theories from case study research. Academy of management
review, 14(4), 532-550.
418
Creating Image-Identity Congruence when Organizational Values
are Consciously Changed: A Performance Management Perspective
Dr. Caren Rodrigues (FPM, IIM Bangalore)1, Dr. Anup Krishnamurthy (FPM, IIM Bangalore)2,
and Archana Gorur3
1
Assistant Professor of Organizational Behavior and Co-Chair of the Center for Business
Research,
St. Joseph’s College of Business Administration (SJCBA),
18 Residency Road, Bangalore (India) 560025
Email: carenrodrigues@sjcba.edu.in
2
Assistant Professor of Marketing and Co-Chair of the Center for Business Research,
SJCBA, Bangalore (India) 560025
Email: anupkrishnamurthy@sjcba.edu.in
3
PGDM Student, SJCBA, Bangalore (India) 560025
Introduction
Our study deals with how an organization’s performance management (PM) systems can be used
as a marketing communications tool within the organization, to communicate and embed a new
set of values among the employees ofan organization.To do so, we considered an organization
that had consciously reformulated its espoused values in order to align with current strategic
considerations.
419
Values refer to preferable modes of conduct or states of existence and provide a framework for
those inside and outside the organization to understand why an organization does what it does
(Aust, 2000).
Theoretical Background, Research Gap and Research Problem
Rodrigues & Krishnamurthy (2016) synthesized extant image and identity literature to
differentiate between organizational image and organizational identity as follows. On one hand,
the Organizational Image is concerned with the impression that those external to the organization
have about it. It is two-dimensional. The first dimension is the Projected Image, that is, the
product of the aggregated communication of the organization about itself. The projected image is
usually deliberately crafted by top management (Hatch and Schultz, 2002). Customers process
the organization’s projected image alongside other sources such as media, to develop their own
opinion of the organization, which in aggregate, becomes the second dimension i.e. their
Perceived Image of the organization. On the other hand, Organizational identity is organizational
members’ collective understanding of the question, ‘What kind of organization is this?’ Thus,
organizational identity refers to members’ perceptions of what the features of their organization
are (Brown et al., 2006). As regards the difference between Image and Identity, Rodrigues &
Krishnamurthy (2016) paraphrased Gioia et al. (2000) as follows: the focus in the image view is
on the ways in which identity is communicated by the organization mainly to external audiences.
In contrast, identity scholars tend to focus on the internal communication of that identity
(Rodrigues & Krishnamurthy, 2016).
When an organization deliberately changes its values in response to strategic needs, it
communicates the new values to those outside the organization in order to create a new
Organizational Image. However, previous marketing and organizational behavior literature
caution that organizational image and identity interact with, and influence each other (Rodrigues
& Krishnamurthy, 2016).Therefore, we might expect that unless a new Organizational Identityis
embedded within the organization, elements from the old organizational identity will creep into
and distort efforts to market a new Organizational Image outside the organization. Identity
literature has emphasized message transmission and organizational values as core components of
organizational identity (Aust, 2009). It therefore becomes important to understand how a new set
420
of organizational values can be marketed to employees so as to embed them within the new
Organizational Identity.
Performance management systems provide a powerful means of embedding new values in an
organizational identity, because such systems communicate to employees what the organization
considers important to reward (Aguinis, 2013). The elements of a PM system are goal setting,
training and development, feedback and mentoring, performance appraisal, pay and incentives
(Cascio, 2012; Murphy & Cleveland, 1995; Varma et al., 2008). Further, unlike more traditional
processes, PM is concerned with aligning individual employee behavior and performance with
the strategic goals of the organization (Aguinis, 2013), and can therefore be used to bring about
employee internalization of new organizational values by managing the context in which
performance occurs (Gruman& Saks, 2011).
When all elements of a PM system are aligned with the new organizational values, the following
outcomes can be expected: (i) the organization’s PM system communicates the new values
consistently to employees, resulting in thenew values getting embedded in the new
organizational identity; (ii) the organizational identity will be in alignment with the new values
of the organization and its strategic orientation; (iii)when the organization engages in external
marketing communication of its new values by presenting an organizational image to those
outside the organization, the organizational identity inside the organization will be in alignment
with the organizational image projected to those outside, and hence no image-identity instability
ensues.
In the past decade, organizations have been using PM systems as a form of internal
communication, to inform employees of what values and behaviors are expected and rewarded
by the organization (Aguinis, 2013). Surprisingly, no study has examinedhow PM systems can
aid in internal communication to market new organizational values to employees, as a step
towards creating a new internal organizational identity that is aligned with the new
organizational image projected outside. Our paper therefore deals with how the various elements
of a PM system can ensure that employees are in line with the organization’s newly espoused
values.
421
Objectives of the Paper
The objective in this paper was to examine how each element of aPM system can be used as a
marketing communications tool within the organization, to signal and embed a new set of values
among the employees of an organization.
Research Methodology
Sample: We undertook our study in one of India's largest, most profitable IT consulting firms,
having its largest operations in India and major markets as the United States and Europe. The
organization was known for having a set of five strongly shared values, all of which were
employee oriented. While these values helped in retention and development of talented
knowledge workers in the early stages of the organization, top management realized that, as the
organization grew, the values were not consistent with expectations from the customers in the
industry. Thus, the old values were discarded, and three new values were formulated, each of
which described behaviors that were required to be consistent across the organization. Our
qualitative study involved 156 employees, at various levels of this organization (ranging from
levels 1 to 7), and across various locations, and our sample was roughly in proportion to the
distribution of employees in the organization across these levels and locations.
Method: We conducted in-depth semi-structured interviews with 76 employees, supplemented by
focus-group discussions with a distinct set of 80 employees. Such sampling and methods are in
line with previous research that is explorative and seeks to uncover the how and why (Patton,
2002). Through these discussions, we ascertained the following: whether the respondents were
aware of the new values and used them in their day to day working lives, and if not, in which
elements of the PM system were the marketing of the new values failing.
Data Analysis and results
Our aim in this study was to examine how the PM systems of an organization - goal setting,
training and development, feedback and mentoring, performance appraisal, pay and incentives can be used as a marketing communications tool within the organization, to communicate and
embed a new set of values among the employees of an organization. Accordingly, while the third
422
author had undertaken the data collection, the first two authors undertook the analysis; they
categorized the data as per the research questions, first independently, and then till agreement
was reached(Cho et al., 2013; Fischlmayr&Kollinger, 2010). Significant findings are presented
below.
Training and development
It was found that fresh joineeswho joined the organization after completing their education had
imbibed the new values far more than either older employees or employees brought laterally in
from other organizations. One reason for this was the selection process, as new joinees were
specifically hired based on their fit with the new organizational values, whereas lateral recruits
were hired based on their technical skills. Further, fresh joinees had systematic training sessions
in which the new organizational values were marketed to them. While there were some efforts to
market the new values to other sets of employees, it was minimal, and not supplemented by a
systematic training program regarding the new organizational values. As a result, freshly
recruited employees had a stronger understanding of the new organizational values than either
existing employees or lateral hires.
Goal setting, performance appraisal, pay and incentives
The new organizational values were not incorporated into the goals set for employees at the
beginning of the PM cycle, and therefore did not find their way into either the performance
appraisal criteria, or developmental plans. Consequently, whether or not an employee displayed
the new organizational values through appropriate behavior had no connection with the pay and
incentives he was indexed to. Thus, apart from the training program for fresh recruits, no other
internal marketing communication was used. Consequently, no other element of the PM system
communicated to the employees the importance of displaying the new organizational values.
Implications of the Study
In this study, we examined the role of PM systems as instruments to market new organizational
values to employees. In doing so, we identified why the new organizational values were not
423
imbibed by employees, and conversely, how the elements of the PM system can communicate
and embed the new organization values.
Managerial Implications
As mentioned, PM systems can align individual employee behavior and performance with
strategic considerations and values, because PM systems in an organization serve as a
communication tool (Aguinis, 2013). Minimal marketingabout the new values was done in this
organization PM system, however. For example, the goal setting process ignored the new
organizational values, and therefore, communicated to employees that it did not matter whether
or not they imbibed the new values. Similarly, no systematic training program regarding the new
values communicated to old employees and lateral hires that manifesting the new organizational
values was important. Because the performance appraisal criteria did not consider whether
employees had internalized the new values, pay and incentives were also independent of the
extent to which employees imbibed the new organizational values. Expectancy theory states that
employees will display only those behaviors that give them desirable rewards (Aguinis, 2013). If
employees are to display the new organizational values, all aspects of the PM cycle, including
goal setting, training and development, performance appraisal and pay and incentives should
consistently be used as internal marketing tools to communicate to employees that displaying the
new organizational values are important to the organization, and will be rewarded.
Theoretical Implications
When an organization - such as the one we studied - deliberately changes its values as a strategic
response to the customers in its environment, it communicates these new values to customers to
create a new Organizational Image. However, since organizational image and identity influence
each other (Rodrigues & Krishnamurthy, 2016), in order for the new image to be sustained
externally, a new organizational identity consistent with the new image is imperative. Note that
communicated values determine that new organizational identity (Aust, 2000). It is therefore
important that the new organizational values are effectively marketed within the organization,
and the PM systems of the organization provide a powerful and effective tool for such marketing.
If all the elements of a PM system consistently signal to employees the importance of
incorporating the new organizational values, a new organizational identity will emerge among
424
employees, which will be consistent with, and support, the new organizational image being
projected by the organization to its customers.
Key References only
Aguinis, H. (2013). Performance Management, 3rd Edition. Boston, MA: Pearson.
Aust, P. J. (2000). Communicated values as indicators of organizational identity: An
examination of the United Church of God, an International Association's first five years.
Doctoral dissertation, University of Oklahoma.
Hatch, M. J., & Schultz, M. (2002). The dynamics of organizational identity. Human relations,
55(8): 989-1018.
Rodrigues, C., & Krishnamurthy, A. (2016). Mirror, Mirror on the Wall: Identity‐ Image
Interactions for the Sales Force in High Threat Situations. European Management Review.
425
TRACK VII
426
Empirical Anecdote of Key Account Management’s Effectiveness on
Firm’s Performance
A.Mahesh.1, Dr.G.P.Dinesh2
1
Research Scholar, Visvesvaraya Technological University, Belgaum, Karnataka (India) 590018
2
Dean-Department of Management Studies, Ballari Institute of Technology & Management,
Ballari, Karnataka (India) 583104
Introduction:
In Industrial/B2B marketing, firms are dwindling in the warfare of dogmatic competitive antagonism.
They exhibit strategic dependence on few key customers who contribute about 40% of their sales
revenue; these key customers are main targets even for competitors; thus firm’s success depends on
developing and sustaining a long term mutually beneficial business relationship with key accounts
(e.g., Pegram 1972; Shapiro and Moriarty 1982; Stevenson and Page 1979). Prior studies have
identified that effectiveness of KAM program is influenced by many factors (Workman Jr., Homburg,
Jensen 2002) which have potential to affect the firm’s market performance; thus we focus on factors
affecting the effectiveness of KAM programs and their impact on firm’s performance.
Research Gap and Research Problem:
While there is a significant amount of research on determinants of selling effectiveness for individual
salespeople, there is a surprising lack of study of factors that affect selling effectiveness in teamselling situations. While there are conceptual articles about team selling (Moon and Armstrong 1994;
Narus and Anderson 1995; Smith and Barclay 1993), there is surprisingly little quantitative empirical
research on effectiveness of Key Account Management, factors influencing its effectiveness and
firm’s performance (Smith and Barclay 1993). In order to bridge this gap, we focus on the context of
key account management (KAM) and develop a conceptual model of factors that affect KAM
effectiveness, alongside evaluate the impact of KAM program effectiveness on firm’s performance;
eventually test model’s reliability and factorial validity.
Objectives of the study:
The objectives of this paper are to 1] identify and statistically explore the factors influencing the
effectiveness of Key Account Management program 2] develop and evaluate the reliability and
factorial validity of conceptual model of factors influencing the effectiveness of KAM program 3]
427
examine the impact of KAM program effectiveness on firm’s performance (financial and nonfinancial performance).
Research Methodology:
A review of the literature was carried out to determine the factors affecting the KAM program
effectiveness, on this basis, a conceptual model was developed with constructs comprising of factors
influencing the effectiveness of KAM programs; questionnaire was developed based on constructs of
conceptual model using likert’s 5-point scale; out of total 122 senior sales managers approached from
pharma industry, 86 accepted to provide information [n=86]. Questionnaires were administered
through e-mails.
Developing and Establishing Scales & Items
KAM effectiveness
With KAM effectiveness we mean the degree to which Key account management activities are
successful in achieving their objectives in terms of financial and non-financial performances.
Financial Performance / Non-Financial Performance
Financial performance include: sales, profitability, market share, return on investment etc; where as
Non-Financial Performance includes: reference value, know-how development, process efficiency,
internal communication etc.
Customer Knowledge
Knowledge of key account’s decision makers; purchase process; business processes, strategies, plans,
financial priorities, development projects, their target customers etc.
Account planning process
Business plan, budgets for each account, alignment of sales/marketing strategies/objectives with key
account plans, coordination of national and local key account activities, key customer’s involvement
in planning process, monthly review of KPI’s etc.
Account management process
Systematic identification, acquisition, retention and maintenance of sustained relationship with Key
Accounts; extended actions taken for key accounts over average accounts.
428
Customer relationship / “Partnering”
Joint planning and review with key accounts, simplifying conflict areas, joint business projects,
exploring new opportunities etc.
Customer service management
Information on key customer’s perception of value shared among every team member, established
service review process, efficiency in service delivery areas etc.
Executional excellence
Criteria for selecting key accounts, formal internal communication, SOP’s/policy guidelines to deal
with key accounts etc.
Performance measurement
ROI, share of business from key accounts, tracking promotional funds, measure of service
performance [such as delivery performance, invoice accuracy], etc.
Conceptual model of factors affecting the effectiveness of KAM program
429
Data analysis and results:
Reliability
Table 2 exposed concluding reliability results. Bland-Altman analyses exposed encouraging narrow
limits of conformity for each scale. ICC scores for all scales revealed outstanding rank order
repeatability ranging from 0.81 (situation) to 0.89 (self-efficacy, social support and outcome
expectancy). Similarly, the internal consistency reliability of all measures proved adequate;
Cronbach’s alpha values ranged from 0.65 (outcome expectancy) to 0.79 (situation).
Confirmatory factor analysis
CFA was conceded to inspect model fit for each of the scales. A non-significant chi-square result
(p>0.05) denoted good fit of the model being examined. A rejection of the conjecture model pointers
that chi-square is too sensitive (Bollen K, 1989), creates need for additional model-fit indices to be
scrutinized like chi-square index, RMSEA, GFI, AGFI and CFI. RMSEA scores ≤0.08, ≤0.06, and
0.0, indicate satisfactory, close, and precise fits, in that order. To understand GFI, AGFI and CFI
indices, scores ≥ 0.9, ≥ 0.95 or equal to 1 indicate sufficient, superior and precise fit of the model
correspondingly.
Reliability analysis
Table 2 exposed concluding reliability results. Bland-Altman analyses exposed encouraging narrow
limits of conformity for each scale. ICC scores for all scales revealed outstanding rank order
repeatability ranging from 0.81 (account management process) to 0.89 (customer knowledge,
customer relationship /”Partnering”, Customer service management). Similarly, the internal
consistency reliability of all measures proved adequate; Cronbach’s alpha values ranged from 0.65
(performance measurement) to 0.79 (account management process).
Table 1: Mean, SD, Item kurtosis values and Mardia’s co-efficient of Multi variate
kurtosis
Constructs of the
conceptualized model –
Description
Statistics
factors affecting the
effectiveness of KAM
programs
Participants were asked to rate Mean ± (SD)
4.05 ± (0.80)
confidence in their possession Item Kurtosis
- 1.05 to 2.36
Customer knowledge
of knowledge about key
4.93*
Mardia [z]
accounts.
Participants were asked to
3.14 ± (0.53)
Mean ± (SD)
indicate their opinion about
- 0.66 to 0.65
Item Kurtosis
Account planning process
effectiveness of account
4.83*
Mardia [z]
planning process
5.45 ± (0.58)
Account management
Participants were asked to
Mean ± (SD)
process
respond to statements about
- 0.17 to 2.55
Item Kurtosis
430
Customer relationship /
“Partnering”
Customer service
management
Executional excellence
Performance
measurement
Financial performance
Non financial
performance
KAM Effectiveness
process of managing key
accounts
Participants were asked to rate
the frequency with which key
accounts were considered as
valued partners rather mere
customers
Participants were asked to rat
confidence in their ability to
deliver superior customer
service.
Participants were asked to rate
confidence in executing the
KAM program with precision
Participants were asked to rate
confidence in object oriented
performance measurement of
KAM program.
Participants were asked to rate
confidence in their ability to
derive desired financial
performance.
Participants were asked to rate
confidence in their ability
derive desired non-financial
performance.
Participants were asked to rate
the extent to which the KAM
program was successful in
meeting its objectives
Mardia [z]
15.05*
Mean ± (SD)
Item Kurtosis
0.95 ± (0.00)
- 0.15 to 2.58
Mardia [z]
- 0.04
Mean ± (SD)
Item Kurtosis
4.27 ± (0.56)
- 0.36 to 6.06
Mardia [z]
15.15*
Mean ± (SD)
Item Kurtosis
Mardia [z]
Mean ± (SD)
Item Kurtosis
5.37 ± (0.56)
- 0.08 to 4.07
19.08*
3.45 ± (0.46)
- 0.75 to 1.58
Mardia [z]
4.34*
Mean ± (SD)
Item Kurtosis
3.14 ± (0.53)
- 0.66 to 0.65
Mardia [z]
4.83*
Mean ± (SD)
Item Kurtosis
4.27 ± (0.56)
- 0.36 to 6.06
Mardia [z]
15.15*
Mean ± (SD)
Item Kurtosis
3.14 ± (0.53)
- 0.66 to 0.65
Mardia [z]
4.83*
Table 2: Reliability Results, Model Fit Indices And Factor Loadings
Constructs of SCT
Constructs of
Acco
Cust
Conceptual
Accou
Custo
unt
omer Execu
model Custo nt
mer
mana
servi tiofactors
mer
planni
relatio
nal
geme
ce
affecting
knowl ng
nship /
nt
mana excelle
effectiveness
edge
proces
partne
proce
geme nce
of KAM
s
ring
ss
nt
programs
-0.03
0.08
0.04
0.06
0.15
-0.06
Ra
-0.88
-0.68
-0.71
-0.84 to
-0.70
95%
-0.80
to
to
Reliab
to 0.89
1.00
to 0.74
LOM
0.91
0.70
ility
Statist
0.89
0.83
-0.81
0.89
0.84
0.88
ICC
ics
(0.85
(0.77
(0.75
(0.85 (0.79
(0.84 to
[95%
to
to
to
to
to
0.91)
CI]
0.92)
0.87)
0.86)
0.92) 0.88)
431
Perfo
rmanc
e
meas
ureemen
t
0.03
-0.53
to
0.58
0.89
(0.87
to
0.92)
Fina
ncial
perfo
rmance
Nonfinan
cial
perfo
rmance
KAM
effect
ivene
ss
0.04
-0.88
to
0.91
-0.81
(0.75
to
0.86)
-0.07
-0.70
to
0.74
0.86
(0.79
to
0.88)
0.12
-0.68
to
0.70
0.88
(0.85
to
0.92)
Cron
bach
Alph
a
χ2 [p]
0.70
0.71
0.79
0.75
17.41
(0.40)
9.77
(0.08)
0.90
6.69
(0.64) (0.67)
0.71
0.72
0.723 14.67
(0.20) (0.01)
0.65
0.79
0.75
0.73
14.67 0.90
14.61 0.726
(0.54) (0.64) (0.01) (0.20)
RMS
0.07
0.08
0.00
0.00
0.05
0.11
0.00
0.00
0.13
0.06
EA
0.94
0.97
1.00
1.00
0.98
0.94
1.00
1.00
0.95
0.97
Validi CFI
0.97
0.98
1.00
0.99
0.98
0.97
0.99
1.00
0.94
0.96
ty
GFI
Statist AGF
0.92
0.93
0.99
0.97
0.95
0.90
0.97
0.99
0.93
0.97
ics
I
Facto
0.44
0.47
0.23
0.44
0.43
0.46
0.40 – 0.43 –
0.43 –
0.45 –
r
–
–
–
–
–
–
0.81
0.75
0.77
Load 0.73
0.86
0.70
0.71
0.86
0.79
0.72
ing
NOTE: a Bivariate correlations between the difference (E2-E1) and the mean [(E1 + E2)/2]; 95% limits
of agreement calculated as the range of differences falling within the mean of the difference ± 1.96 SDs.
ICC intra class correlation; CIs confidence intervals; χ2 = chi-square, p = probability; RMSEA root
mean square error of approximation; GFI goodness of fit index; AGFI adjusted goodness of fit index;
CFI comparative fit index.
The Endeavour of this study was to build and assess the reliability and factorial validity of factors
affecting the effectiveness of KAM program. The outcome pointed out each of the scales presented to
be dependable measure showing acceptable factorial validity. All measures confirmed minimum
satisfactory internal consistency dependability (α>0.60) (Sim J, Wright C, 2000) and outstanding rank
order repeatability (ICC>0.75) (McDowell I, 2006), and factor analysis exposed data to be sufficient
fit for hypothesized models. The measures presented may provide solution for researchers about
managing the key account management programs with high effectiveness.
Implications of the Study:
Study offered proof for reliability & factorial validity of scales designed to measure constructs
affecting the effectiveness of KAM programs. These scales provide prudent answer for
researchers/managers interested in understanding dynamics of Key account management; Furthermore
this research paper tries to contribute towards the literature with empirical enunciations of factors
affecting the KAM effectiveness and augment managers understanding of Key account management.
432
References:
Chatterjee, P. K., & Prasad, A. (2003). Strategic Issues for KAM Implementation in Industrial
Marketing. VISION: The Journal of Business Perspective , 25-35.
Colletti, J. A., & Tubridy, G. S. (2013). Effective Major Account Sales Management. Journal of
Personal Selling & Sales Management , 1-10.
Gounaris, S., & Tzempelikos, N. (2013). Key Account Management Orientation and Its Implications:
A Conceptual and Empirical Examination. Journal of Business-to-Business Marketing , 33-50.
Lambe, C. J., & Spekman, R. E. (1997). National Account Management: Large Account Selling or
Buyer-Supplier Alliance? Journal of Personal Selling & Sales Management , 17 (4), 61-74.
Nätti, S., & Palo, T. (2013). Key account management in business-to-business expert organisations: an
exploratory study on the implementation process. The Service Industries Journal , 1837-1852.
Ryals, L. J., & Humphries, A. S. (2007). Managing Key Business-to-Business Relationships - what
marketers can learn from supply chain management . Journal of Service Research , 312-326.
Salojärvi, H., Sainio, L.-M., & Tarkiainen, A. (2010). Organizational factors enhancing customer
knowledge utilization in the management of key account relationships. Industrial Marketing
Management , 1395-1402.
Schultz, R. J., & Evans, K. R. (2002). Strategic Collaborative Communications by Key Account
Representatives. Journal of Personal Selling & Sales Management , 22 (1), 23-31.
Sharma, A. (1997). Who Prefers Key Account Management Programs? An Investigation of Business
Buying Behaviour And Buying Firm Characteristics. Journal of Personal Selling & Sales Management
, 17 (4), 27-39.
Shi, L. H., Zou, S., & Cauvusgil, S. T. (2004). A conceptual framework of global account
management capabilities and firm performance. International Business Review , 539–553.
Storbacka, K. (2012). Strategic account management programs:alignment of design elements and
management practices. Journal of Business & Industrial Marketing , 259-274.
Tzempelikos, N., & Gounaris, S. (2013). Approaching Key Account Management from A Long-Term
Perspective. Journal of Strategic Marketing , 21 (2), 179-198.
Weilbaker, D. C., & Weeks, W. A. (1997). The Evolution of National Account Management: A
Literature Perspective. Journal of Personal Selling & Sales Management , 17 (4), 49-59.
Workman Jr., J. P., Homburg, C., & Jensen, O. ( 2003). Intraorganizational Determinants of Key
Account Management Effectiveness. Journal of the Academy of Marketing Science , 3-21.
433
TRACK VIII
434
Trust and Attraction towards MNC and Local Brands in Emerging
Economies
Pramod Iyer1, Audhesh Paswan2, and RetnoTanding Suryandari3
1
Department of Marketing
College of Business and Entrepreneurship
University of Texas at Rio Grande Valley,
1201 West University Drive, Edinburg,
Texas 78539-2999
2
Department of Marketing and Logistics, COB
University of North Texas, PO Box 311396
Denton, TX 76203-1396
3
Department of Marketing
FakultasEkonomidanBisnis
UniversitasSebelasMaret, Indonesia
pramod.iyer@utrgv.com / paswana@unt.edu/tanding0@yahoo.com
Introduction:
As developed markets saturate and emerging markets open up, multinational firms (MNCs)
make a beeline for emerging markets (Atsmon, et al., 2012), and often MNC brands tend to have
an upper hand in this battle in terms of consumer preference (Özsomer, 2012). However, recent
evidence from emerging markets indicate that local firms from emerging economies are catching
up (Bonaglia, et al., 2007; Özsomer, 2012). They are not only winningthe hearts, minds and
wallets of home market consumers, but also making their mark in the global arena (Dawar and
Frost, 1999; Özsomer, 2012), e.g., Patanjali and Sarvanabhavan from India (Rukhaiyar, 2016).
Given this dynamic phenomenon, understanding customer preferences for MNC brands versus
435
local brands and its drivers become important (Özsomer, 2012) for developing a better and more
appropriate brand management strategy.
Research Gap and Research Problem:
Despite some research attention given to emerging markets, development of marketing theory
applicable to emerging markets is somewhat scarce (Sheth, 2011). Given the unique
characteristics of emerging markets, the need to research in this area becomes very important
(Özsomer, 2012; Sheth, 2011). An understanding of the brand choices from a consumer
perspective will improve the chance of brand successes in emerging economies (Özsomer, 2012).
For example, several MNC brands still struggle to entrench themselves in emerging markets,
especially in the services category (Atsmon,et al., 2012).Perhapsthesuccess of service offerings
could be anchored in social networks with the customers, which MNCs may lack. On the other
hand, local brands face increasing competition from MNC brands who have deeper pockets and
more knowledgeable about brand management. We use the term high separation/association
between the brand and the firm to capture this idea.
Objectives of the Study:
The objective of this study is to understand the reasons why MNC brands are able to succeed in
some categories, while struggling to make inroads in other categories (Özsomer, 2012). We rely
on the knowledge based view of the firms (Cohen and Levinthal, 1990) and the literature on
intellectual capital (Bontis, 1998), brand management (Low and Fullerton, 1994), and locus of
brand impact (Brodie et al., 2009) to anchor our research model. We argue that for some product
categories such as fast moving consumer goods, where the locus of customer value and brand
impact is the product itself, MNC firms fare better at connecting their brands with consumers
because of their knowledge and capability in product management. Local firms from emerging
markets may be at a disadvantage in terms of knowledge base for product management (i.e.,
structural capital). However, because of their strong roots in the local environment, they may
have stronger relational or social capital (Özsomer, 2012), which may help them in product
categories where the locus of value and brand impact is beyond just the product. In other words,
value is created not just through the core product itself, but also through a social or market
network. This is not to say that both MNCs and local firms cannot overcome these initial
436
impediments. However, it may require significant mind-set change within the firm, not to
mention resources (for an analogy, see a historic perspective of brand management by Low and
Fullerton, 1994).Table 1 provides a visual representation of this line of thinking.
For outcome variable, we focus on the relationship between brand trust and brand
attractiveness, key determinants of consumer preference and loyalty (Atsmon, et al., 2012) and
investigate if this relationship differs across brands owned by MNCs and local firms.Relying on
the discussion so far, our hypotheses are as follows:
H1: For product categories where the locus of customer value is primarily embedded in the
product itself (like soaps, medicines, food & beverages), MNC brands will have a higher
association between brand trust and brand attractiveness, than local companies.
H2: For product categories where the locus of customer value is distributed between the product
and the service (installation, maintenance, after sales, etc.) local firms will be at least on par
with MNC brands on association between brand trust and brand attractiveness.
Table 1: Intellectual Capital (IC) of MNCs and Local companies in Emerging Economies
Company Type
Components of IC
MNCs
Local
Structural or
Relative advantage - More
More local, contextual and
Organizational
global; tried and tested; highly
relational; somewhat fuzzy and
Capital
structured; more explicit
tacit; more difficult to transmit
andeasier to transmit
Human Resource
Access to same human resources
Capital
pool that local firms have, but the pool that MNCs have, but the
Access to same human resources
training and development process training and development process
Relational Capital
may be more structured
may be somewhat unstructured
More distant; by the book; there
Relative advantage – better
may be a conflict between local
knowledge of local socio-cultural
values and norms and firm values norms and values; greater
and norms.
possibility of harmony between firm
and market place socio-cultural
values and norms.
437
Research Methodology:
We use the archival data for brand trust and brand attractivenessfor brands in India. This data is
published by Trust Advisory, an Indian market research company. Trust advisory releases the
ranking of brands on two dimensions, brand attractiveness and brand trust –for both local and
MNC brands. We used the data released for the year 2013, when both trust and attractiveness
data were published. The brand trust list included 1100 brands and the brand attractiveness list
had 1000 brands. Of these, 504 consumer brands had scores for both trust and attractiveness
dimensions. Using subjective judgment, these 504 brands were categorized into different
categories based on the product separation.
We use India as our research context because it is among the top emerging markets with a
robust economic growth, and is a part of BRIC countries. With a population of over 1.2 billion, a
growing middle class and a GDP of $1.877 trillion (World Bank, 2015), India is an appropriate
setting for this study. Also, since the opening of the economy in 1991, India has seen a surge of
MNCs in the last two decades. There has also been a strong growth of indigenous companies
which are competing head to head with MNCs.
Data Analysis and Results:
Spearman’s Rho between brand trust and brand attractiveness for each product category and
brand type – MNC versus localwas used for hypotheses testing because both trust and
attractiveness scores were ranking scores. In order to test the hypothesized relationship, Fisher
Z-test was used to check the degree to which correlations (between brand attractiveness and
brand trust rankings) differ between MNC and local brands.
The results of Fisher z test indicate that for high separation products (i.e., FMGC,
personal care, stationary, OTC; Branded Apparel and Accessories, and finally for cigarettes and
F&B) MNC brands have higher correlations between brand trust and attractiveness. In contrast,
for high association products (i.e., Durables, Personal Gadgets, Household Electricals;
Automobile, Lubricants; and Services) the correlations between brand trust and attractiveness
were statistically similar between MNC brands and local brands. In summary, both hypotheses
are supported.
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Implications of the Study:
Brands have existed in emerging markets for almost as long as it has existed in developed
markets. However, historically, most of the successful brands belonged to multinational firms,
although some local firms are catching up fast. This study contributes by focusing on the brand
management function, and uses a knowledge based and intellectual capital perspective to explain
why MNC brands do a better job of connecting with their consumers in emerging markets.
Further, a contingency based (high separation/association between the brand and the firm)
perspective of brand management is proposed and the associated hypotheses are tested. We
believe that this is a worthy attempt at addressing the calls for new thinking in marketing and
brand management in the context of emerging economies (Burgess and Steenkamp, 2006).A
knowledge-based perspective on brand management is relevant for effectively managing brands
in emerging economies because it focuses on utilizing appropriate knowledge or intellectual
capital for the different brand markets and product categories.
The study finds evidence that the extent to which brands and the firm are separated and
associated in consumer’s mind describe the relationship between two key brand management
metrics –brand trust and attractiveness. The results suggest that both local companies and MNCs
operating in emerging economies have their inherent strengths and weaknesses which influence
the success of brand management activities. When we look at all the brands together, local
companies have lower rank-order correlation between brand trust and brand attractiveness as
compared to MNCs. While this may portray a fatalistic perspective for local firm, i.e., they
cannot compete with MNC brands, a closer look gives a slightly different insight. We find that
local brands are able to hold their own against MNC brands in product categories that have
significant service component. Local companies benefit from their strong roots in the local
environment. However, if the local firms want to compete in other product categories, they need
to seriously look at how they manage their intellectual capital, i.e., absorptive capacity. With
local companies growing in stature and going global (Bonaglia, et al., 2007), it is important for
these firms to develop structural capital.
MNCs on the other hand tend to create stronger brands in emerging markets since they
can tap into their structural capital. However, it is important to note that not all MNCs succeed in
all local markets. For this, they may have to develop relational capital. The challenges faced in
emerging markets are distinctive as compared to developed markets and firms need to take a
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holistic approach to succeed (Sheth, 2011). To do well in emerging economies, firms need to
look at both the relational capital and the structural capital.
References
Atsmon, Y., Child, P., Dobbs, R., andNarasimhan, L. (2012). Winning the $30 trillion decathlon:
Going for gold in emerging markets. McKinsey Quarterly, 4: 20-35.
Bonaglia, F., Goldstein, A., and Mathews, J. A. (2007). Accelerated internationalization by
emerging markets’ multinationals: The case of the white goods sector. Journal of World
Business, 42(4): 369-383.
Bontis, N. (1998). Intellectual capital: An exploratory study that develops measures and models.
Management Decision, 36(2): 63-76.
Brodie, R. J., Whittome, J. R., and Brush, G. J. (2009). Investigating the service brand: A
customer value perspective. Journal of Business Research, 62(3): 345-355.
Burgess, S.M. and Steenkamp, J.B.E.M. (2006). Marketing renaissance: How research in
emerging markets advances marketing science and practice. International Journal of Research in
Marketing, 23(4): 337-356.
Cohen, W. M., and Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning
and innovation. Administrative science quarterly, 35(1): 128-152.
Dawar, N. and Frost, T. (1999). Competing with giants: Survival strategies for local companies
in emerging markets. Harvard business review, 77: 119-132.
Low, G.S. and Fullerton, R.A. (1994). Brands, brand management, and the brand manager
system: A critical-historical evaluation. Journal of Marketing Research, 31(2): 173-190.
Özsomer, A. (2012).The interplay between global and local brands: A closer look at perceived
brand globalness and local iconness. Journal of International Marketing, 20(2): 72-95.
Rukhaiyar, A. (2016). Patanjali Doubles Sales, Closes in on FMCG Biggies. Available at:
http://www.thehindu.com/business/Industry/Patanjali-doubles-sales-closes-in-on-FMCGbiggies/article14169461.ece
Sheth, J.N. (2011). Impact of emerging markets on marketing: Rethinking existing perspectives
and practices. Journal of Marketing, 75(4): 166-182.
World Bank (2015). India. Available at: http://data.worldbank.org/country/india
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E-tail brand experience and brand loyalty: The mediating role of
brand relationship variables
1
2
1
Imran Khan. , Dr. Mobin Fatma. , and Dr. Zillur Rahman.
1
Department of Management Studies
Indian Institute of Technology Roorkee, India- 247667
E-mail: imrankaifi@gmail.com, Contact: +91-9897674886
2
Asia Pacific Institute of Management, New Delhi, 110025, Contact: +91-9412911773
Introduction
The idea of creating and managing superior brand experiences has received increased attention in
the last one decade (Brakus et al., 2009). In fact, providing superior brand experience is now
becomes an effective aspect of retail management strategies because superior brand experiences
result into successful performance outcomes (Rose et al., 2012). Further, the advancements in
internet and related technologies have changed the landscape of retailing and given rise to online
retail brands (i.e., e-tail brands), which necessitates the need of managing customer experiences
with e-tail brands (Khan and Rahman, 2016).
This study is an attempt to examine the effect of e-tail brand experiences and brand relationship
variables(namely, brand trust, brand attachment and brand commitment) on brand loyalty. This
study also tested the mediation role of brand relationship variables in the relationship between etail brand experience and brand loyalty.This study collected primary data from 303 online
shoppers. Structural equation modeling (SEM) was employed for the analysis purpose. Based on
the findings, this study discusses implications for e-tail practitioners and academics.
Research Gap and Research Problem
Like an offline retail brand, an online retail brand (e-tail brand) also involves several brandrelated stimuli (e.g., ease of website navigation, visual imagery, ease of access to products,
441
among others) that evokes experiences (Rose et al., 2012). An e-tail brand creates an impression
through the affective and cognitive perspectives, necessitatingthe need of providing superior etail brand experiences (Khan and Rahman, 2016).Studies argued that creating and managing a
unique and memorable customer experience with the e-tail brands become a critical issue among
the e-tailers (e.g., see Lu et al., 2013). Despite of such significance, very few studies exists that
examined customer experiences with the e-tail brands. In fact, importance of studying customer
experience with the e-tail brandsalso stated in literature (Rose et al., 2012). Moreover,
customers’ less loyal behavior towards online brands, and the availability of large number of
choices in market forces e-tail brands to provide superior brand experiences (Reichheld and
Schefter, 2000).
Objectives of the study
To fill the above discussed void in literature, the present study investigates the role of e-tail
brand experiences in cultivating brand loyalty. Specifically, the purpose of the study is to
examine the relationship between e-tail brand experience and brand loyalty. In addition, the
study examines the mediating role of brand relationships variables, namely, brand attachment,
brand trust and brand commitment in the relationship that e-tail brand experience share with
brand loyalty.
The present study proposes a conceptual framework (Figure 1). The model includes the direct
influence of e-tail brand experience on the brand relationship variables, namely, brand trust,
brand attachment, and brand commitment, and the direct influence of these relationship variable
on brand loyalty. In addition, the direct effects of e-tail brand experience on brand loyalty and
the indirect effects (dotted line) via brand trust, brand attachment, and brand commitment on
brand loyalty are presented.
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H8a,b,c
Brand trust
H5
E-tail brand
experience
H1
H3H7
H2
Brand
attachment
Brand loyalty
H6
Brand
commitment
H4
Direct Effect
Mediating Effect
Figure 1.Conceptual framework
Hypothesis 1. E-tail brand experience has a positive effect on brand trust.
Hypothesis 2: E-tail brand experience has a positive effect on brand attachment.
Hypothesis 3: E-tail brand experience has a positive effect on brand commitment.
Hypothesis 4. E-tail brand experience has a positive effect on brand loyalty.
Hypothesis 5. Brand trust has a positive effect on brand loyalty
Hypothesis 6. Brand attachment has a positive effect on brand loyalty
Hypothesis 7. Brand commitment has a positive effect on brand loyalty
Hypothesis 8a: Brand trust mediates the relationship between e-tail brand experience and brand
loyalty.
Hypothesis 8b: Brand attachment mediates the relationship between e-tail brand experience and
brand loyalty.
Hypothesis 8c: Brand commitment mediates the relationship between e-tail brand experience
and brand loyalty.
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Data analysis and results
The study used field survey method to collect data. The survey comprises three sections. In the
first section we asked respondents whether they do online shopping or not. If they answer “yes”,
then we asked them to mention the name of an online e-tail brand to whom they purchase
recently (within 30 days) and complete the remaining questionnaire. Second section deals with
the measures of e-tail brand experience, brand trust, brand attachment, brand commitment and
brand loyalty. In the third section, demographic information was taken. Importantly, in order to
select respondents who have adequate e-tail brand experience, respondents that have less than
one year of purchasing experience with an e-tail brand were omitted. In addition researchers also
checked for the incomplete questionnaires. The above procedure resulted into a usable sample of
303 respondents. The demographic profile of the respondents is in the following manner, 52
percent (158) were females and 48 percent (145) were males, respondents were aged between 18
to 44 years with the mean age being 26 years.This study used confirmatory factor analysis (CFA)
and SEM for the data analysis purpose.
The study adapted empirically validated scales from previous studies. Some measures were
reworded to fit the e-tail brand context. To measure e-tail brand experience, five item scale was
adapted from the study of Morgan-Thomas and Veloutsou (2013). Morgan-Thomas and
Veloutsou (2013) used these five items for measuring online brand experiences. Brand trust was
measured using four items from the work of Chaudhuri and Holbrook (2001). Brand
commitment was measured with two items from the work of De Wulf et al. (2001). To measure
brand attachment four items were adapted from the work of Park et al. (2010). Finally, three
items measuring brand loyalty were taken from the study of Nysveen and Pedersen (2014). All
the measurement items were rated employing 7-point Likert scale (1 =“strongly disagree” to
7=“strongly agree”).
Before examining the hypothesized model, CFA was employed using AMOS 20.0 software. All
the measurement items loaded on their respective constructs significantly. It has been found that
all the Cronbach alpha’s exceeded the suggested value of 0.7 (Nunnally, 1978), which confirms
the internal consistency of the measures. In addition, we assessed the convergent and
discriminant validity of the constructs. All the AVE values are above the suggested value of
444
0.50, which confirm the convergent validity. And, the square root AVE values are greater than
the inter-construct correlations, which supports the discriminant validity among the constructs
(Fornell and Larcker, 1981).
The measures of overall fit: χ2/df=4.049, RMSEA =0.054, GFI =0.94, AGFI =0.91, NFI =0.95,
NNFI =0.93 and CFI =0.97, suggest that the structural model fits the data well. Standardized
coefficients for both the direct and indirect relationships are detailed in Table 1. The results show
that e-tail brand experience has a significant positive influence on all the three brand relationship
variables: brand trust (β =0.43; P<0.05), brand attachment (β =0.26; P<0.01) and brand
commitment (β =0.19; P<0.01), which provides support for the hypothesis H1, H2 and H3.
Supporting H4, the results show that direct effect of e-tail brand experience on brand loyalty is
significant (β =0.08; P<0.01), but form weak relationship. The effect of all the three brand
relationship variables on brand loyalty is also found significant (see Table 1) supporting
hypothesis H5, H6 and H7. Finally, to test the indirect relationships (i.e., hypotheses H8a,b,c)
overall model fit was tested including both the direct and indirect paths (as recommended by
Iacobucci et al. 2007).
Table 1. Standardized path estimates
Hypotheses
Direct effects
Hypothesis 1: E-tail brand experience
Brand trust
Hypothesis 2: E-tail brand experience
Brand attachment
Hypothesis 3: E-tail brand experience
Brand commitment
Hypothesis 4: E-tail brand experience
Brand loyalty
Hypothesis 5: Brand trust
Brand loyalty
Hypothesis 6: Brand attachment
Brand loyalty
Hypothesis 7: Brand commitment
Brand loyalty
Indirect effects
Hypothesis 8a: E-tail brand experience
Brand trust
Brand loyalty
Hypothesis 8a: E-tail brand experience
Brand attachment
Brand loyalty
Hypothesis 8a: E-tail brand experience
Brand commitment
Brand loyalty
Note: All standardized β are significant at p <0.05.
Standardized β
0.43
0.26
0.19
0.08
0.22
0.29
0.21
0.49
0.18
0.31
Implications of the Study
The results suggest that the e-tail brand experience and all the three brand relationship variables
influence brand loyalty. Importantly, the results show that the direct effect of e-tail brand
experience on brand loyalty is weak, whereas the indirect effect of e-tail brand experience on
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brand loyalty via all the three brand relationship variables is stronger. More specifically, among
the three brand relationship variables brand trust is the strongest mediator followed by the brand
commitment and brand attachment.
The present study has several implications. To generate demand for the products and services,
brand loyalty is always an important factor for the firms. Brand loyalty also enhances
performance of the firm by improving sales figures. The present study suggests e-tailers that
providing superior e-tail brand experience is not sufficient, extra efforts are required to build
consumer-brand relationship by improving brand relationship variables, namely, brand trust,
brand attachment and brand commitment. Marketers should look into providing e-tail brand
experience along with the improvement in brand relationship variables because the indirect effect
of e-tail brand experiences on brand loyalty through brand relationship variables is stronger than
the direct effect of e-tail brand experience on brand loyalty. E-tail managers should continuously
look into innovating and improving brand experiences on their websites by proactively seeking
feedbacks from their customers as well as suggestions from employees. Because the study
identified e-tail brand experiences as an important predictor of brand loyalty in the context of etailing. Managers should develop favorable brand relationship with the customers in a manner
that customer becomes loyal to their e-tail brand. Specifically, brand trust variable played the
most important role as a mediator between e-tail brand experience and brand loyalty, thus,
managers should focused more on building brand trust.
References
Brakus, J.J., Schmitt, B.H., and Zarantonello, L. (2009). Brand experience: what is it? How is it
measured? Does it affect loyalty? Journal of Marketing, 73(3): 52-68.
Chaudhuri, A., and Holbrook, M. B. (2001). The chain of effects from brand trust and brand
affect to brand performance: the role of brand loyalty. Journal of Marketing, 65(2): 81–93.
De Wulf, K., Oderkerken-Schroder, G., and Iacobucci, D. (2001). Investment in consumer
relationships: A cross-country and cross-industry exploration. Journal of Marketing, 65(4): 33–
50.
Fornell, C., and Larcker, D.F. (1981).Evaluating structural equation models with unobservable
variables and measurement error. Journal of Marketing Research, 18(1): 39–50.
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Khan, I., and Rahman, Z. (2016). E-tail brand experience’s influence on e-brand trust and ebrand loyalty: the moderating role of gender. International Journal of Retail & Distribution
Management, 44(6): 588 – 606.
Lu, L.C., Chang, H.H., and Yu, S.T. (2013). Online shoppers’ perceptions of e-retailers’ ethics,
cultural orientation, and loyalty: an exploratory study in Taiwan. Internet Research, 23(1): 47–
68.
Morgan-Thomas, A., and Veloutsou, C. (2013). Beyond technology acceptance: Brand
relationships and online brand experience. Journal of Business Research, 66(1): 21–27.
Nunnally, J. (1978). Psychometric methods.New York: McGraw-Hill.
Nysveen, H., and Pedersen, P.E. (2014). Influences of co-creation on brand experience The role
of brand engagement. International Journal of Market Research, 56(6): 807–832.
Reichheld, F.F., and Schefter, P. (2000). E-loyalty. Harvard Business Review, 78(4): 105-113.
Rose, S., Clark, M., Samouel, P., and Hair, N. (2012). Online customer experience in e-retailing:
an empirical model of antecedents and outcomes. Journal of Retailing, 88(2): 308–322.
Park, C., MacInnis, D.J., Priester, J., Eisingerich, A.B., and Iacobucci, D. (2010). Brand
attachment and brand attitude strength: Conceptual and empirical differentiation of two critical
brand equity drivers. Journal of Marketing, 74(6): 1-17.
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AN ANALYSIS OF CONSUMERS’ PERCEPTION TOWARDS
REBRANDING:
A STUDY OF HERO MOTOCORP
Dr. Joyeeta Chatterjee1 and Dr. Jayashree Dubey2
1
Professor, Marketing, IILM Institute for Higher Education, NewDelhi. / Research Scholar,Banasthali
University, Rajasthan.
2
Assistant Professor, Marketing, Indian Institute of Forest Management, Bhopal
Email:chatterjee.joyeeta@gmail.com, / joyeeta.chatterjee@iilm.edu /
jayashree@iifm.ac.in / joyss@rediffmail.com
Introduction
The one thing that will never change is the change itself that happens in different phases of
life. With this notion, even in the world of business, the popular brands practice change, in
terms of their logos and customer perception. There are some similarities in brands like
Airtel, Vodafone, Axis Bank, Hero MotoCorp, Videocon, Air India, Kodak, Snapdeal and
many more. All these brands have undergone rebranding exercise in the recent past with a
logo change.This trend has led many companies to rebrand and reposition their products or
services focusing on functional attributes to focusing on how they fit into a consumer‟s
lifestyle.
Research Gap and Research Problem
The term rebranding, which has cropped up in the last couple of decades or so is similar to
„giving birth.‟ It is an exercise of creating a new name illustrating the differentiated position
in the mind set of shareholders and occupying a different identity from its competitors
(Muzellec, Doogan, and Lambkin,2003). It is referred to as repositioning or rejuvenating of a
brand (Muzellec and Lambkin, 2008; Andrews and Kim, 2007 and Stern, 2006) defines
rebranding as name changing exercise of the company or its targeting and positioning, in an
448
attempt to attach new connotation to the corporate brand and communicate the same to the
stakeholders. Stuart and Muzellec (2004) notes that rebranding can be as a result of M&A,
whereby the company focuses on a new vision. Thus, rebranding is the creation of a new
name, term, design or a combination of them for a recognized brand with the intention of
developing a distinguished position in the mind of stakeholders and competitors (Muzellec
and Lambkin, 2006).
Osler (2004) addressed the reasons for name changes which include mergers and
acquisitions, changing business categories, an outdated name, changing brand perceptions,
legal necessity or for other international language considerations. In a study of small and
medium sized French organizations, Delattre (2002) presented a typology of the reasons for
name changes which were: an alteration of corporate image, a change of management, a
change of activity and a revision of legal status and technical scenario. When company‟s
name gets associated with a negative event, rebranding enhances the company to have a new
image and customer will have new perceptions of the company (Johnson, 2002). Perception
of customers towards business and logos of the corporate house play a vital role in
transporting business perceptions to product or service perceptions (Janiszewski and Meyvis,
2001; and Alshebil 2007).The rebranding exercise carried by Hero MotoCorp provides
interesting insights of the process of brand revitalizing which includes the makeover of
brand architecture, brand name, brand logo and the positioning with the theme of creation,
renewal and re-energizing the brand.
Hero MotoCorp (Erstwhile Hero Honda)
Hero Honda Ltd was set up in 1984 as one of the leading two wheeler manufacturers in
India, as a JV between Honda Motors, Japan and Hero Cycles Ltd., India. In 2010, Honda
Motors Company, Japan, decided to exit the JV after 26 years. Having more than 5 million
strong consumer base, Hero Honda was truly the “Desh Ki Dhadkan,” touching the hearts
of millions of Indians. Post the break-up of the JV, rebranding such a popular brand was a
mammoth task, especially when it is required to move out of the mould of Hero Honda. The
new logo and new jingle “Hum Mein Hai Hero” was revealed during the India Vs England
cricket series in August 2011 which aims to relate to the youth.
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Objectives of the Study
Study on rebranding is important not because many business houses are conducting this
exercise, but because of the tremendous cost involved in the process (Kaikati and Kaikati,
2003). The exercise of rebranding may occur intentionally through a deliberate change in
strategy or unintentionally from unplanned situations or evenafter an M&A, if the brand has
outgrown its identity or have been through any kind of scandal.This study was conducted to
understand the rebranding process exercised by Hero MotoCorp, post their break-up of the
JV; understand the perception of two-wheeler consumers towards the brand and learn its
impact on consumers post re-branding, specially in an emerging market like India.
Research Methodology
In this study, primary and secondary research were conducted. Judgmental sampling method
was used.Two focus group interviews were conducted with eight members in each group,
first phase with pre-rebranding scenario discussion and the second with post re-branding
scenario.Primary research was done to understand the effects of rebranding on the consumer
and the perceptual differences among the customers and non-customers. Factor analysis has
been used to identify the important factors that impact the major rebranding decision. The „ttest‟ of the hypotheses were conducted to determine the perceptions towards the „new
tagline‟ and „the colour of the new logo‟ of Hero MotoCorp.
Demographic details
Among the 160 respondents surveyed between 18 to 45 years, 91 percent were male and
nine percent female respondents; 57 percent were graduates, 41 percent post graduates and
two percent with intermediate degrees.The respondents comprised of 12 percent of selfemployed, 41 percent professionals and the remaining 47 percent were students. As far as
the income range is concerned 58 percent were in the category below INR 3 lakhs p.a., 39
percent in the category ranging between INR 6 – 9 lakhs p.a. and three percent were earning
above INR 9 lakhs p.a.
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Data Analysis and Results
To understand better, the respondents were divided into customers and non-customers.
Customers comprised of 68 percent of buyers of Hero MotoCorp and non-customers
comprised of 32 percent ofbuyers of competitor brands.It has been observed that the
perception of the consumers of tangibles has increased, post rebranding. All the respondents
were aware of the both, old and new logos of Hero.Brand recall was high, but it was not
necessarily due to rebranding. Brand trust is high and the legacy still continues.Brand name,
tagline and jingle were considered by the respondents as the most important parameters for
the brand recall.
As far as the impactis concerned, rebranding of Hero MotoCorp brought in mixed response.
Nineteen percent of the respondents agreed that rebranding made the brand „young‟ while 48
percent disagreed to this and 33 percent of them were indifferent. Likewise, 44 percent of
the respondents found that the new logo was well launched, 33 percent did not agree to this
while 23 percent neither agreed nor disagreed. As far as freshness is concerned, both
customers and non-customers were of the opinion that the new logo looked fresh. Majority
of non-customers found the new logo of Hero traditional, only a negligible percentage of
non-customers found the new logo contemporary.Regarding the tagline, 27 percent of the
respondents found the new tagline marginally better while 38 percent of them found it
significantly better than the older version. Nineteen percent of the respondents could not
differentiate between the old and the new tagline and the remaining 16 percent of the
respondents found the new tagline not good at all. Regarding the new jingle, 19 percent of
the respondents found it similar to the older version of the jingle. However, 21 percent of the
respondents found the new jingle significantly better and 17 percent found it marginally
better than the previous jingle of the brand Hero MotoCorp.
Efforts were made to understand whether revitalizing a brand had any impact on the sales
and buying decision of the respondents. Out of 68 percent of customers of Hero MotoCorp,
16 percent purchased Hero products post rebranding, 24 percent did not purchase after
rebranding and the remaining 27 percent purchased after the rebranding exercise, but were
not influenced by it‟s rebranding. The brand‟s existing trust played an important role.
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Efforts were made to comprehend the buying behavior of those customers who purchased
Hero products, post rebranding and also other set of customers who purchased after the
rebranding, but their purchase decision was not influenced by this rebranding exercise.Thirty
five percent of these set of customers purchased second two wheeler and 24 percent of them
purchased Hero products/services for family members and 41 percent of these set of
customers recommended Hero products/services to friends.
Attempt was also made to understand the behaviour of those customers who purchased Hero
products/services post it‟s rebranding, but their purchase was not influenced by rebranding.
Forty four percent of these customers purchased second two wheeler of Hero and the
remaining 19 percent purchased Hero products/services for family usage and other members
of the household. Thirty seven percent of customers of this category recommended Hero
MotoCorp to friends/ peers. Substantial portion of the buyers were influenced post
rebranding, to purchase Hero products. It shows that rebranding of Hero MotoCorp could
cause an increase in the sales figures. However, an interesting finding of the study is another
set of substantial portion of buyers also purchased Hero products after the rebranding
exercise of the company, but as pointed out, their purchase was not influenced by
rebranding. High brand recall and increased trust on the brand „Hero‟ are the important
reasons behind their purchase decision.
The non-customers of Hero, however, were not influenced by rebranding at all and the
rebranding exercise undertaken by the company did not impact their buying decision.
Implications of the Study
Regarding the overall perception, post rebranding, Hero MotoCorp definitely brought in
noticeable changes and value additions in their products and services. However, they need to
communicate well to the masses the new improvements introduced by Hero MotoCorp in
their products / services.Non-customers are not associated with the product and hence they
carried a withdrawn approach towards this rebranding exercise. If the communication is
done well by the company while conducting the rebranding exercise, it helps the masses,
both customers and non-customers, to build a better perception about the brand.They can
also highlight other crucial brand elements in their marketing communication program.The
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researchers also feel that the company may track the purchase behavior of the customers and
accordingly design an incentive oriented promotional scheme for the loyal customers or
repeat purchasers or even for those who recommend Hero products.
References
Alshebil, (2007). Consumer Perceptions of Rebranding: The Case of Logo Changes.
University of Texas.
Andrews and Kim, (2007). Revitalizing suffering multinational brands: an empirical study.
International Marketing Review, 24(3): 350-372.
Delattre (2002). Business Name Changes: The French Experience First published: October
2002 DOI: 10.1111/1540-627X.00063
Kaikati, J.G., and Kaikati, A.M. (2003). A rose by any other name: rebranding campaigns
that work. Journal of Business Strategy, 24(6): 17-23.
Janiszewski, C., and Meyvis, T. (2001). Effects of Brand Logo Complexity, Repetition, and
Spacing on Processing Fluency and Judgment. Journal of Consumer Research, 18-32.
Johnson, S.P. (2002). Building knowledge from perception in infancy. In Building Object
Categories in Developmental Time. (Gershkoff– Stowe, L. and Rakison, D., eds), Erlbaum
Muzellec, L. and Lambkin, M. (2006). Corporate Rebranding: Destroying, Transferring or
Creating Brand Equity? European Journal of Marketing, 40 (7/8): 803-824.
Lambkin, M., and Muzellec, L. (2008). Rebranding in the banking industry following
mergers and acquisitions. International Journal of Bank Management, 26(5): 328-352.
Muzellec, L., and Stuart, H. (2004). Corporate Makeovers: Can a Hyena be Rebranded?
Journal of Brand Management, 11(6).
Muzellec, L., Doogan, M., and Lambkin, M. (2003). Corporate rebranding-an exploratory
review. Irish Marketing Review, 16: 31-40.
Osler, R. (2004). Making the Case for a New Brand Name. Journal of Brand Management,
12(2): 81-92.
Stern, B.B. (2006). What does brand mean? Historical-analysis method and construct
definition. The Journal of the Academy of Marketing Science, 34(2): 216-23.
453
Measuring Consumers’ Response to Brand Scandals:
A Brand Love Perspective
KomalNagar1 ,Paramdeep Kour2
1
Assistant Professor, The Business School, University of Jammu.
2
Research scholar, The Business School, University of Jammu.
Phone: 9419194664/9906119020
Email: komalnagar@rediffmail.com / paramdeepkoursasan@gmail.com
Introduction
In recent years, brand scandals have become increasingly prevalent in the global marketplace (Li
and Wei, 2016) and have become the biggest threats that brands are facing today. Product-harm
crises, or brand scandals, significantly decreaseconsumer preferences and purchases for the
scandalized brands and their families (Ahluwalia, Burnkrant and Unnava, 2000, Dawar and
Pillutla, 2000) as well as their competing brands (Roehm and Tybout, 2006).Moreover, brand
scandals are now considered as a regular part of business and can be defined as ‘a complex
situation wherein products are found to be defective, unsafe, or even dangerous
(Vassilikopoulou, Siomkos, Chatzipanagiotou and Pantouvakis, 2009).Researchers in the past
have conceptualized brand scandals as having two broad types: Intrinsic brand scandals and
Extrinsic brand scandals. Intrinsic brand scandals refer to defective or dangerous products that
may reduce a brand’s perceived ability to deliver functional benefits (Dawar and Pillutla, 2000;
Lee et al., 2011). Extrinsic brand scandals, on the other hand, are those that do not directly
involve the product but involve social or ethical issues surrounding the values advocated by the
brand (Liand Wei, 2016). Although scandals have negative effects on brands, yet consumers who
have a loving relationship with a brand may be affected differently by brand scandals. Therefore,
consumers who love their brand can act as a shield against brand scandals.It has also been
acknowledged that brand love is deep and enduring and thus brand love is irreplaceable (Albert
and Merunka, 2013). Additionally, a consumer will defend the brand when someone makes a
454
negative remark about the brand and it will also be difficult to change their point of view (Batra,
et al., 2012).
The need to study brand scandals emerges due to the fact that negative information attracts
people’s attention more, compared to positive information (Fiske, 1980).Therefore, considering
the negative impacts of brand scandals, it is imperative to understand the effects of types of
brand scandals on consumers’ behavioral intentions.
Research Gap and Research Problem
Previous studies have examined the role of various factors in a brand scandal context, such as
brand commitment, familiarity, expectation, attitude certainty as well as reputation. However the
nature of brand scandal and brand love has scarcely been explored.Review of brand scandals
shows that it affects consumers’ attitudes, beliefs and future intentions about thebrand.
Researchers stress to know how consumers respond and attribute blame for product harm crisis,
role ofmedia, its spillover effect and how the managers analyze and respond to product harm
crises. Based on the review, itis concluded that the role of brand love in various aspects of brand
scandal is a neglected area. Acomprehensive research is needed to understand how the brand
love of consumers affects the reaction towards product harm crisis. Therefore, undertaking the
present study is justified in order to fill the existing gap in literature by examining the interaction
among these variables.
Objectives of the Study
The study aims to measure the effect of type of brand scandals on consumers’ attitude and
purchase intentions towards scandalous brand and explore the influence of brand love on
consumer’s attitude and purchase intentions towards scandalous brand. Next we investigate the
interaction effect between types of brand scandals and brand love onconsumers’ attitude and
purchase intentions towards scandalous brand.
Research Methodology
A pretest indicated that fast food would be an interestingproduct context for the participants in
the study.Another pretest revealed thatFood and Beverages wasawell-recognized category with
455
Noodles as the product line and participants recalled Maggi as the brand. Hence, Maggi was
selected as the scandalous brand for the final study. Proposed hypotheses are examined by
employinga 2 (Nature of Brand scandals: Extrinsic/Intrinsic) X 2 (Brand Love: High/Low)
between-subjects factorial design. Variables for behavioral intention include consumer’s attitude
and purchase intention towards scandalous brands.
Data Analysis and Results
It is shown from the study that consumers with high brand love are inclined to maintain their
attitude and purchase likelihoodand the synergistic effect between nature of brand scandals and
brandlove significantly influences consumer’s response for the scandalous brand. Furthermore,
the results from the study indicate thatthe two-way interaction effects with the types of brand
scandals (intrinsic and extrinsic) and brand love (high/low) on consumer’sbehavioral intentions
are significant. Specifically, consumers with strong brand love showed more favorableresponse
to brand scandals.
Implications of the Study
The results of this study contribute to the research area and marketingpractices related to brand
scandals by providing crucial insights for in-depthunderstanding of the consumer’s responsemechanism to brand scandals.Brand love influences consumer’s attitude and purchase
intentiontowards the scandalous brand implying that brandmanagers of the affected brandshould
develop communications that emphasize consumers’prior brand love with the product that they
have felt as a result of product usage,thereby balancing and eliminating possible negative
reactions.
456
References
Ahluwalia, R., Burnkrant, R. E., &Unnava, H. R. (2000). Consumer response to negative
publicity: The moderating role of commitment. Journal of marketing research, 37(2): 203-214.
Albert, N., andMerunka, D. (2013).The role of brand
relationships. Journal of Consumer Marketing, 30(3): 258-266.
love
in
consumer-brand
Batra, R., Ahuvia, A., andBagozzi, R. P.(2012). Brand love. Journal of Marketing, 76(2): 1-16.
Dawar, N., andPillutla, M. M. (2000). Impact of product-harm crises on brand equity: The
moderating role of consumer expectations. Journal of Marketing Research, 37(2): 215-226.
Fiske, S. T. (1980). Attention and weight in person perception: The impact of negative and
extreme behavior. Journal of personality and Social Psychology, 38(6): 889.
Lee, Y., Youn, N., andNayakankuppam, D. (2011).The content of a brand scandal moderating
the effect of thinking style on the scandal’s spillover.Building Connections, 39: 523.
Li, M., and Wei, H. (2016). How to save brand after crises? A literature review on brand crisis
management. American Journal of Industrial and Business Management, 6(2): 89.
Roehm, M. L., andTybout, A. M. (2006). When will a brand scandal spill over, and how should
competitors respond? Journal of Marketing Research, 43(3): 366-373.
Vassilikopoulou, A.,Siomkos, G., Chatzipanagiotou, K., andPantouvakis, A. (2009). Productharm crisis management: Time heals all wounds? Journal of Retailing and Consumer
Services, 16(3): 174-180.
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Factors influencing the Purchase Decisions of Organic Food
Products: An Empirical Analysis on Indian Food and Grocery
Retailing Customers.
Mr.M. SivaKoti Reddy 1, Dr.Sheela Srivastava2, Mr.A.NagaBhushan3, Ms.A.Sireesha3 and
Mr.D.Subba Reddy3
1
Department of Management Studies
Vignan University (Deemed), Guntur, (A.P.) India
2
Jawaharlal Business School, Jawaharlal College of Engineering and Technology
Jawahar Gardens, Lakkidi, Palakkad, Kerala, India
3
Research Scholar
Vignan’s University
Vaddeswaram, Guntur, (A.P.) India
E-mail: shiva.manukonda@gmail.com / sheelasrivastava@gmail.com /
nagabhushan_18@yahoo.co.in / asirishareddy@gmail.com /
sivasubbareddy.devireddy@gmail.com
Introduction:
Consumption of organic food products is an emerging trend in India, the changing lifestyle
and the growing health consciousness among the customers resulted in expanding the
marketing opportunities of organic food products in India (Su-Huey et al., 2010). Jolly (1996)
defined organic products which are grown up in an environmentally friendly manner,
produced with fewer herbicides and pesticides and to be considered as wholesome and
nutritious products. Currently the organic food products market in India is in budding stage
with only few active brands and low penetration and it is estimated that the market size is
US$100 million and expected to reach US$ 185 million by 2017 (Technopark’s report.,
2012).
India produced about 1.24 million metric tons of certified organic products and the potential
growth is witnessed as the demand is raising from the new demand pockets such as Tier – I
and Tier – II cities, more over it can be seen wide acceptance for the organic food products.
Furthermore the factors like willingness to spend more for qualitative food for health reasons
are making the customers to spend on organic food products (BioFach Report., 2015). The
458
promotions of the organic foods are considered as the alternative to the existing food products
in the market and be much good for their health, environment and animal welfare. As a result
now the market is inundated with a variety of organic foods which includes fruits, vegetables,
cereals, dairy products and baby foods (Batra et al., 2014). This phenomenon makes a room
for the retailers to think of the organic food and grocery shoppers and their shopping
behaviour to tap this emerging new segment to sustain and survive in this extensive
competitive environment.
Research Gap and Research Problem:
Growing interest towards organic food products is increasing worldwide in response to
concerns about food safety and health concerns (Gregory., 2000; Grossman., 1972;
Schifferstein et al., 1998). Hence it is required to understand these new emerging customers
in the marketing perspective. It is quiet important to understand conception of consumer
decision-making regarding organic foods and how to promote the organic products as this
phenomenon will change from country to country. For the marketing of organic food
products there is no a separate mechanism in India, usually the sales of the organic food
happens in the general retail formats along with the conventional food and grocery. Many
studies analysed that organic food products are credence goods (Andersen et al., 1998;
Nelson., 1970 Hansen., 2001 and Giannakas., 2002) and the characteristics of the credence
goods are difficult to understand and in some cases impossible to detect. Further more
consumers may not detect the presence or absence of organic properties even after purchase
and use and will know when they are informed.
Hence it is required to make an attempt to understand the influencing factors of organic
products for the better understanding of the customer perception, so that the retailers will
facilitate the organic food seekers in a smoother way. It is also required to understand
particularly the psychology of the Indian consumers as numerous studies have been
conducted in developed economies especially in the European Union and revealed and
emphasised the significance of customers attitude in predicting their behaviours. A study
conducted in Canada revealed that the customers had an attitude to pay more for the organic
food products (Laroche et al., 2002) and the recent past study of Hamzaoui et al., (2009)
explored that Canadian consumers are much interested to purchase organic foods rather than
the existing foods. This situation raised a condition to understand the customers perception
459
towards health and safety factors, knowledge and awareness factors, product related factors
and economic factors and to test their impact over organic product purchase decision.
Objectives of the study:
The present research attempts to answer these questions.
1. To explore the factors affecting the purchasing intensions of organic food in India.
2. To examine the impact of identified factors on organic products purchase intensions.
To address said questions, we constructed hypothesised conceptual model (shown in Fig.1)
based on extant literature on organic food products and their marketing strategies.
Fig.1 Hypothesized conceptual model
Research methodology:
The data was collected by using the shopper intercept survey technique (Srinivasan and
Ratchford, 1991) from 425 adult food and grocery shoppers. Research team approached
supermarkets (n=20) and hypermarkets (n=10) in Guntur and Vijayawada cities of Andhra
Pradesh. Researchers approached the food and grocery shoppers with a structured and self
administered questionnaire and requested to fill the questionnaire. The data collection was
done during all times of the day while the customers before leaving the retail outlet.
Requested every third customer to participate in the survey to maintain the randomness in the
data. The measures were adopted from the past research and all the items were measured on a
7-point Likert scale.
460
Data Analysis and Results:
Simple Linear Regression Approach (SLRA) was used to test the hypotheses from H10 to
H40. The results revealed that the predictor variable health and safety contributes significant
and had moderate impact on purchase decision and beta values (β=0.555, t=13.270, p=0.000)
shown significant association with purchase decisions. The predictor variable knowledge and
awareness factors contributes significant but had low impact on purchase decision
comparatively with other independent variables and beta values (β=0.288, t=10.571, p=0.000)
shown significant association with purchase decisions.
Implications of the study:
The findings of this study provide the basic insights to understand the perceptions of the food
and grocery customers towards the organic products purchasing. This study facilitates the
retail shoppers to make their marketing strategies more effective to sell the organic food
products. The study elicits the directions to the retailers sell the organic products too in the
retail formats without losing the balance between the conventional and organic food products
and adds an empirical insights to the existing research.
References:
Andersen, E.S., and Philipsen, K. (1998). The Evolution of Credence Goods in Customer
Markets: Exchanging ‘Pigs in Pokes’. Paper presented at the DRUID Winter seminar,
Middelfart, January 8-10.
BioFach Report., (2015):1
Giannakas, K. 2002. Information asymmetries and consumption decisions in organic food
product markets. Canadian Journal of Agricultural Economics. 50: 35-50.
Gregory, N.G. (2000). Consumer concerns about food. Outlook on Agriculture. 29(4): 251257.
Grossman, M. (1972). On the concept of health capital and the demand for health. Journal of
Political Economy. 80(2): 223-255.
Hamzaoui, L., and Zahaf, M. (2009). Exploring the decision making process of Canadian
organic food consumers: motivations and trust issues. Qualitative Market Research. 12(4):
443-459.
461
Hansen, L.G. (2001). Modeling Demand for Organic Products – Implications for the
Questionnaire. Working Paper #4. AKF, Danish Institute of Local Government Studies.
http://www.akf.dk/organicfoods/papers/wp4-lgh.pdf.
Jolly, D.A. (1996). Consumer profile of buyers and non buyers of organic produce. Natural
resource publication. 33(56): 121-126.
Laroche, M., Tmiuk, M. – A., Bergeron, J. And Barbaro Forllego, G. (2002). Cultural
differences in environmental knowledge, attitudes and behaviours of Candadian consumers.
Canadian Journal of Administrative Sciences, 19(3): 267-283.
Nelson, P. (1970). Information and consumer behavior. Journal of Political Economy. 78(2):
311-329.
Prerana Batra, Nisha Sharma, Piyush Gupta. (2014). Organic foods for children: Health or
Hype? Indian Pediatrics. 51: 349-353.
Schifferstein, H.N.J. and P.A.M. Oude Ophuis. (1998). Health-related determinants of
organic food consumption in the Netherlands. Food Quality and Preference. 9(3): 119-133.
Su-Huey Quah, Andrew K.G.Tan. (2010). Consumer purchase decisions of organic food
products: An ethnic analysis. Journal of International Consumer Marketing. 22: 47-58.
Technopark’s report. (2012) : 2
462
NEW LAUNCH ASSESSMENT BENCHMARK NORMS: A
SYNDICATED & QUANTITATIVE STUDY TO JUDGE THE
PERFORMANCES OF NEW LAUNCH BRANDS IN FMCG
SECTOR
Joydeep Mukherjee1 and Vinay Khamkar2
1
KANTAR WORLDPANEL, Kolkata
9 & 10 Floor, Nagaland House, 11 Shakespeare Sarani, Kolkata – 7000071
Phone: +91 33 44006200 / 6400; Email: joydeep.mukherjee@imrbint.com
th
th
2
KANTAR WORLDPANEL, Mumbai
A Wing, 1st Floor, Mhatre Pen Building, SenapatiBapatMarg, Dadar (W)
Mumbai- 400028. Email: vinay.khamkar@imrbint.com
INTRODUCTION
The current decade is the decade of innovation and new launches across all the sectors. The
FMCG sector, nevertheless, is not an exception. We all are now upgraded consumers keen on
experimenting new things in the day to day life. Be it a choco filled premium biscuit or an
incense stick mosquito repellent, an herbal toothpaste or a just a snack item, innovations and
new products are now a regular affair. However, these innovations and new launches involve
a lot of investments in terms of monetary capital, distribution development, retail chain
management, promotional campaigns and human resource. Therefore, from a marketer’s
standpoint there is a constant need for optimizing marketing investments as there is a
continuous fight between limited resources and unlimited stakeholders.
RESEARCH GAP AND RESEARCH PROBLEM
However, not all investments turn fruitful as all new launch products don’t sustain. Even after
strategizing & spending adequately, most products fail in generating trials. Even though some
are able to generate trials, lots of products fail as there are no sustainable repeats. Therefore,
it is important to monitor and compare the new launches in their infancy to identify and fix
issues for a healthy future.
Nevertheless, there are no such benchmarks in the market today that help the marketers to
understand whether their launched product is doing well or not. Also, there are no such tools
463
which will help to set targets in terms of trial numbers and also help to channel the
investments. The marketers don’t have the tool by which they can determine how much they
can invest to achieve the desired trial rate – and how much they are short to be the best.
Similarly, they don’t know how much trial / repeat rate they should aim in the next quarter/
half year/ year to continue the ongoing momentum and also how much they should target to
increase the momentum.
OBJECTIVES OF THE STUDY
Understanding the need for such a tool across almost all the FMCG clients of Kantar World
Panel India, the researchers had attempted to put forward a system which can be used as a
guidebook to categorize the new launches of the FMCG companies and sets certain norms for
the new launches to plan, set target and thereby, allocate optimum resources for their newly
launched products. Based on these norms theycan now understand how good their brand is
performing compared to the best in its class and thereby change their marketing mix if need
to be changed at an early stage.
RESEARCH METHODOLOGY
KWP India is the largest FMCG consumer panel in the world with a sample of 81,200
households. It’s a demographically representative sample and the data representation is
possible by zones, urban & rural, states, town classes and village classes. Every month it
tracks 97 categories of FMCG across Personal care, Household Care, Foods and Beverages in
India and conducts the fieldwork in more than 130 towns and 700 villages across India. The
researchers have considered KWP India’s Household Panel data to derive the trial & repeat
norms.
(a) Research framework
1. All new launches in the URBAN market (as per GOI definition) in last 3 years (2013,
2014, 2015) across 30 key FMCG categories tracked in KWP Household Panel have been
considered.
Completed minimum six months post launch (that is till June 2015)
Norms have been developed for Urban level National launch ONLY
National launch – Brands/ Variants launched in 5 or more states
(assumption)
464
2. The researchers have considered key 30 categories across personal care, Household Care &
Foods to develop the norms: Segregated by High/ Medium/ Low penetrated
3. Categories which have a large number of local players and are very fragmented like Bread,
Spices, etc are not considered
4. We have excluded Noodles also due to the category issue of last year
5. We also have excluded the categories which are having very low penetration in household
panel and are too personalized like Hand Sanitizers, Air Freshners, After Shave, Cosmetics,
Deodorants, etc.
(b) Selection criteria – What is a new launch?
The definition of new launch is as follows:
A new brand : Eg Dettol Dish Wash is a new brand launch as Dettol ventured
in the dish wash category for the 1st time
A brand extension: Eg. Harpic Bathroom Cleaner is the new brand extension
of Harpic Toilet Cleaner
A new variant launch: Eg. Dettol Sandal Glow is a new variant launch for
Dettol; Vivel Green Tea is a new variant launch for Vivel soaps
If a new SKU of an existing variant is launched, it’s NOT considered as a new
launch
Relaunches are NOT considered
If a brand has launched 4 new variants with one SKU each, all four SKUs are
considered 4 different brands
Outliers – Brands/ Variants with less than 0.1% half yearly trial excluded
(less than 50 sample size)
(c) Caveats
This is for National level launches ONLY (5 states or more)
This is for URBAN market only (Urban definition is as per GOI norms)
If a brand of National importance launches a variant in less than 5 states, it is NOT
considered
465
DATA ANALYSIS & RESULTS
The researchers have identified more than 700 new launches (as per the definition above)
across 30 key categories, out of which nearly 3/4th of the new launches fails as they are
identified ended up with a trial rate of less than 0.1%. The 30 key categories considered are
as follows:
1. Hair Oil
2. Toothpaste
3. Bar Soaps
4. Shampoos
5. Skin Creams
6. Biscuits
7. Edible Oil/Ghee
8. Salt
9. Atta
10. Washing Powders
11. Detergent Bar
12. Tea
13. Toothbrush
14. Talcum Powder
15. Hair Colour
16. Coffee
17. Soups
18. Milk Food Drinks
19. Utensil Cleaners
20. Insecticides
21. Toilet Cleaners
22. Salty Snacks
23. Face wash
24. Conditioners
25. Breakfast Cereal
26. Ketchups
27. Floor Cleaners
28. Hand Wash
29. Depilatories
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30. Jams
Here are a few key observations made as part of this project:
Of the remaining 1/4th stable launches, most new launches happened in the high
penetrated categories & in the Foods & Beverages space
Trial & repeat rates are higher for the much evolved categories - Launches in more
evolved categories are performing better
Trial and Repeat rates were higher for new variants compared to new brands
indicating the role of existing loyalty / equity
Huge difference between best and average trial rates across categories stressing the
key role distribution plays
Most of the new launches are brand extensions/ variants
Most new brand launch happened in Foods & Beverages
Out of 30, 11 categories contributed more than 80% of the new launches
Apart from this, from the detailed tables and works, the marketers of FMCG products can
now be benefitted in the following ways:
1. Setting penetration objective & tracking: Prelaunch & post launch
2. Activity bench marking: Against successful launches
3. A ready - Reconer: Useful for better & faster decision making
IMPLICATIONS OF THE STUDY
The norms for success can be customised for individual category and also by all category
types as following:
a. All FMCG, Personal Care, Household Care, Foods & Beverages
b. High/ Medium/ Low penetrated categories (High: 80%+ penetration; Medium:
30-80% penetration; Low: Less than 30% penetration)
c. Premium/ Popular/ Economy
d. Seasonal Vs non seasonal
e. National Vs regional (Regional means more than 80% of volumes coming
from less than 5 states)
f. Large Vs Niche categories (Niche More than 50% volume coming from SEC
A in 10 lakh plus towns)
467
Illustration:
468
Example:
In shampoo
category?
Is x% & y%
are “Good”?
In personal care
category?
In overall
FMCG?
Launched a new shampoo brand
and achieved x% trial & y%
repeat rate
How much
good?
Is x & y “Good”
for High
penetrated
category?
Is it better than
the best?
Is it falling in
top 10/25
launches?
It is better than
the average?
REFERENCES
The project has been done over the period of 6 months (Feb 2016 to July 2016) by using
household panel data of KANTAR WORLDPANEL for three years (2013, 2014, 2015)
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LAKSHYA: How a brand can find appropriate
goals via analysis of image data
Surbhi Minocha1, Vasudha Kumar1
1
Kantar IMRB, 08, Balaji Estate,
Guru Ravidas Marg, Kalkaji, New Delhi - 110019
Emails: Surbhi.Minocha@imrbint.com / Vasudha.Kumar@imrbint.com
Introduction
If we look back, we canfind many brands that once ruled the market, but have faded awayCampa Cola, HMT, Halo, Charmis, Cibaca, BPL, Nirula‟s- to name just a few.
Marketers know of this long term risk, and they are always worried as to whether they have the
right message to stay relevant. But equally, they are terrified of losing share in the short term:
whether it‟s to the latest, sophisticated entrant from abroad- or to the rustic champion from
Uttarakhand.
Research Gap and Research Problem
Marketers are interested in measuring and monitoring brand share and brand equity. There are
many possible measures of equity. We use an indigenously developed system which is simply
based on the overall opinion of a brand- with greater weight being given to those who are „more
familiar‟ with the brand (e.g. owners, users, triers)- on the grounds that such people are more
important- either because they are themselves important as prime customers (e.g. fmcg, telecom)
or because they are the major source of information for other customers (e.g. automotive,
consumer durables).
However, marketers are not satisfied with simply measuring equity. They want to know: what
can I do to improve or maintain my brand equity? Therefore, we also collect „diagnostic‟
information- image associations that are usually measured via 0/1 scale. The questions might
look a bit like this:
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FIGURE 1
Having collected this kind of data for a small set of 6-12 attributes ( or as so often happens, for a
large number of attributes, sometimes as many as 25 to 30), the challenge is to make sense of the
data- and produce conclusions that are useful, insightful.
A marketer wants to know:
o Is it better to be „modern/aspirational‟ or to be „value for money/everyday‟? In other words,
which of the attributes covered in the study are more important for this category?
o Let us suppose that to be modern/aspirational is generally important for the category. But my
brand is ahead of the curve on this aspect. Should I continue to focus on this, or should I work
on some other theme?
A clear direction is needed, because brands need to have focus in their communication. A single
theme, hammered home consistently, will work much better than communication which tries to
be all things for everybody or every occasion. In short: knowing „what not to do‟ is equally
important as knowing „what to do‟.
471
It‟s actually very difficult to work with this kind of image data described above and say what
should be done to improve the overall image/equity:
1. Image data measured in this way tends to be very „flat‟- respondents tend to repeat their
answers. So the same set of 2 or 3 brands might be picked every time by some
respondents- whether the image statement is for modern, traditional, Indian or
international.
This „flatness‟ or lack of discrimination, in turn, can be for various
reasons:
i.
In some cases, the lack of discrimination is genuine: respondents have a onedimensional view of brands- they‟re either good, okay or unacceptable
ii.
But more often, it‟s because the format of questioning encourages repetitive
answers. This gets worse when we have too many image statements, too many
brands, or image statements that do not make sense to a respondent.
2. Image data is highly correlated. For example, if a brand is considered „international‟, then
it will also be more „modern‟, and so on. Any method we use will have cut through the
maze of inter-relationships
3. There can also be two-way relationships between the dependent and explanatory
variables that will add to the confusion. For example, a brand‟s performance on „value
for money‟ may lead to a better outcome for „overall perception‟. However, a brand‟s
overall presence and strength can also lead to higher association with „value for money‟
Objectives of the Study
To find a technique capable of handling above mentioned imagery data problems i.e. able to:
- Work with less discrimination in data
- Handle inter-relationships/correlations
- Produce insightful results – not the same solution for every brand
To devise a framework to simultaneously show:
- Relative strengths and weaknesses of brand
- Image aspects that drive the category: these are important generally and especially
relevant for any brand that wants to make large strides forward
472
- Image aspects that drive incremental performance for a brand- relevant for any immediate
action, and in tune with the character of a particular brand
Research Methodology
There are a number of alternatives that could be used- such as structural equation modeling, the
method of Bayesian Belief Networks, as well as others.
In this paper, we would like to demonstrate a method that shows considerable promise- the
method of random forests. This is not a new technique- but what is of interest is the overall
framework that we have created.
Also known as random decision forests, the technique is like bootstrapping decision trees – it
bootstraps sample as well as predictors. Aggregation across trees reduces the instability in results.
Random sampling of variables gives several opportunities to a predictor to be the variable which
defines the variation in equity. Since there are often few predictors that dominate the decision
tree fitting process, on average they consistently perform better than their competitor predictors
and provide good accuracy rate in predictions. This also means that less human intervention is
required in defining the predictors as it already taken into account possible combinations of
variables and thus, reduces researcher bias.
FIGURE 2
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This algorithm is well suited for categorical independent variables - our data construct contains
brand association image (yes/no). Random forests run efficiently on large datasets and can handle
missing values as well.
Data Analysis and Results
We explain our approach using two datasets:
1. Survey conducted for soft drinks brands. Sample size was 766 respondents.
2. Survey conducted for telecom category. Sample size was 3600 respondents.
These datasets coverconsumer‟s response to all brands in the category e.g. overall opinion for
brand, their level of familiarity with brand; brand usage and association of brands with various
brand image and/or product attribute statements.
The surveys were conducted in countries outside India- in South Asia and in North Africa.
Case 1: Soft drinks (Brand names are disguised)
This category is dominated by Brand Fizz, a cola drink. Many other brands are present with
products such as orange sodas, lemon sodas and fruit flavored sodas. Our client, “Soda-pop” is a
relatively new player and has two new products – “Soda-pop Cola” which will compete with
category leader “Fizz” and “Soda-pop tonic” which is a premium plain soda drink with low
calories. Our client has been around for some years, but is unable to gain share. They want to
know what they should do in order to gain equity & thus, market share.
Current brand equity numbers: (ranging from 0-lowest to 100-highest; 50 is average equity)
Brand
Equity
Brand Fizz
66
Soda pop tonic (our client)
46
Soda pop cola (our client)
44
Orangino
30
TABLE 1
Both products of our client brand have below average equity.
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To find an answer to our client‟s question “what should they do in order to gain equity & thus,
market share”, we conduct the analysis in three major steps:
a. Step 1: Evaluate current performance of brand on various image & product attribute
statements relative to its competitors – we derive a relative measure of brand strength on a
particular attribute by removing the halo effect of brand and halo effect of attribute.
FIGURE 3
e.g. Figure 3 shows that Soda pop cola has a “youthful image” while tonic is “for the health
conscious” compared to other brands in the category.
Step 2: Use random forest technique to identify the attributes that are important for the category
as a whole i.e. what factors drive equity for a carbonated drink (colas, tonics, fruit flavored, etc.
since they all compete with one another).
Step 3: We use random forest technique to identify what attributes drive a particular brand‟s
equity. Using Step 2 & 3 we generate a plot (refer to figure 2& 3 below) and spot the four zones.
We believe that the area that is critical for both brand and category is most important („critical
zone‟) while another high priority zone is the things that are important for the brand.
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FIGURE 4
Our analysis gives a clear direction: the immediate priority for Soda-pop Cola should be to
improve product and perception on „carbonation‟, where the brand currently stands neutral. This
is consistent with everything we know about the brand in this market.
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FIGURE 5
Soda-pop tonic should work on the following:
a. Improving taste may not be feasible, but they should work on „uniqueness‟
b. A change of packaging could help - directly and indirectly via making their packaging
more „modern/trendy‟, and more unique
Why do we feel excited about these results? It‟s because
- The results make sense given what we know about the brand and category in this country
- The results are different for different brands
Case 3: MobiLead telecom operator
Our client‟s brand MobiLeadwas the first ever mobile service provider, has always been the
market leader and has the highest equity.They want to know what they should do in order to
maintain or improve their equity further.
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Brand
Equity
MobiLead (our client)
61
Konnect
44
CellLife
30
CityPhone
21
TABLE 2
FIGURE 6
Once again, the results are eminently sensible. The brand should continue to focus on „network‟
even though it‟s already an area of strength. However, they should also work on „value‟ which is
a weakness. Notice that the method does not tell us to rush into „everything‟- we are weak on
„connection cost‟- but this is not a major driver, since it‟s a one-time cost.
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Implications of the Study
Many marketers are not satisfied with simply measuring equity and they want to know what they
should do in order to improve their equity. As the typical market research brand image data
exhibits some problems such as less discrimination, inter-related responses to statements, in this
paper we explain a method based on random forests that can handle these problems and still
provide insightful results for each brand in the category (and not the same solution for every
brand). This has been worked out on numerous categories, but the paper illustrates the method for
two categories.
Implications for researchers and practitioners:
1. Random forest is capable of providing insightful actionable suggestions for a brand to
improve equity, despite the problems of less discrimination, inter-related responses to
imagery statements – compared to other techniques such as BBN and CHAID/CART.
2. This method provides a different action plan for different brands.
3. Practitioners can easily adopt this promising technique with freeware such as R.
Limitations
Our method currently assumes one-way relationship e.g. a brand‟s performance on „value for
money‟ may lead to a better outcome for „overall perception‟. However, our method does not
assume that a brand‟s overall presence and strength can also lead to higher association with
„value for money.‟
References
Ho, Tin Kam (1995). Random Decision Forests (PDF). Proceedings of the 3rd International
Conference on Document Analysis and Recognition, Montreal.
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TRACK IX
480
The Quest for the Holy Grail: Reinventing
the Segmentation Technique
Debjyoti Sen Sharmai and Abhinaba Neogiii
1,2
IMRB International
11 Shakespeare Sarani, Kolkata – 700071
Phone: +91-98360 29288 / +91-33-44006400
Email: 1debjyoti.sensharma@imrbint.com / 2abhinaba.neogi@imrbint.com
Introduction:
Market Segmentation, the holy grail of market research, is the art of finding out what people
want and giving it to them. The principles have been around since ancient times where
Aristotle talks about tailoring arguments to suit the audience, and has become all the more
relevant in the present day and age where brands are targeting consumers almost from cradle
to grave.
From simple demographic segmentation of the yester-years to classifying people basis their
lifestyle and attitudes to the current day segmentation based on the needs of different
individuals, the underlying philosophy of segmentation has evolved over time to keep pace
with how the consumers have themselves evolved. Similarly, the techniques of segmentation
have also evolved in the quest for stable and sharply discriminated consumer segments.
There are multiple techniques with varying degrees of statistical complexity which are
currently used for segmentation. Methods range from the extremely simple cross-tabulations
to slightly evolved methods like k-means and hierarchical clustering to more complex
methods like Latent Class Clustering (LCC). Of the above, k-means and LCC are the ones
which are the most prevalent. However, all the above clustering techniques are one
dimensional implying that they only take into account only the rating patterns of the
respondent and not relation between the attributes themselves. This paper proposes an
alternative approach using a technique called Singular Value Decomposition which addresses
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the issue of ‘uni-dimensionality’ and results in segments with higher discrimination. In the
following document the words ‘segments’ and ‘clusters’ have been used interchangeably.
The Research Problem:
The most important criteria of a good cluster solution are the clusters should be
heterogeneous across and homogeneous within. All the classical clustering techniques use the
similarity of rating pattern of the respondents to form the clusters. None of them take into
account the relative hierarchy of attributes across the respondents. This sometimes result in
consumers with similar hierarchy in attributes getting classified into different clusters. This
case would be best explained with the help of an example. Table 1 summarizes the responses
of 8 consumers who were asked to rate 4 attributes on a standard 5 point rating scale
Attribute 1
Attribute 2
Attribute 3
Attribute 4
Respondent 1
1
1
1
1
Respondent 2
1
2
3
4
Respondent 3
2
3
4
5
Respondent 4
3
4
3
3
Respondent 5
5
5
5
5
Respondent 6
2
4
2
1
Respondent 7
1
2
1
2
Respondent 8
4
5
Table 1: Summary of Ratings
4
5
Clearly the following pairs have same rating pattern in terms of attribute hierarchy:
Respondent 1 and respondent 5 – All attributes are equally important
Respondent 2 and respondent 3 – Attribute 4 preferred most and Attribute 1 preferred
the least
Respondent 7 and respondent 8 – Attribute 2 and 4 preferred over Attribute 1 and 3
Ideally, both the respondents in each of the above pairs should fall in the same cluster.
But when this data set was segmented using the standard techniques, none of them were
able to classify the pairs in the same cluster. The result is summarized in the below table
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K-means
Hierarchical
2-Step
LCC
Respondent 1
1
2
1
1
Respondent 2
1
1
2
1
Respondent 3
2
2
2
2
Respondent 4
1
1
1
1
Respondent 5
2
2
2
2
Respondent 6
1
1
1
1
Respondent 7
1
1
1
1
Respondent 8
2
2
2
Table 2: Summary of classification
2
Therefore there is a need to look beyond the traditional techniques of segmentation for
something that would not be uni-dimensional but would take into account both the aspects of
segmentation – the respondent ratings and the relative attribute hierarchy
The Proposed Technique:
Singular Value Decomposition (SVD) is primarily used in the fields of pattern recognition
and signal processing. It is particularly used in the field of image processing.
In principle, SVD tries to reduce a matrix with rank R such that it can be written as a linear
combination of K unique vectors. The working logic behind Singular Value Decomposition
would be best explained with the help of an example.
Consider the image alongside. This image has a resolution of
400 X 400 pixels, which means that the image contains 400
unique rows of pixels or row vectors. SVD would decompose
this 400 X 400 matrix into a linear combination of certain
unique vectors. Thus SVD can be used to represent a large
picture with 400 pixels with a reduced set of pixels, say 50 or
60. Given below are the image representations with varying
number of singular vectors.
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From the above figures, it can be inferred that taking the first 30 singular vectors gives back a
fairly accurate approximation of the original image. Extending the same logic, SVD can be
used to find the fewer representative respondents (clusters) who will represent the whole
market.
Singular Value Decomposition: How it works:
SVD can be used as a bi-clustering method i.e. it can classify respondents (rows) and
attributes (columns) simultaneously. In simple terms it classifies two respondents in the same
cluster if they have similar ratings and if their relative hierarchy of preference across
attributes is similar. This property is unique to SVD and does not hold true for any of the
other standard clustering methods.
When the 8 respondents whose ratings were summarized in Table 1 were clustered using
SVD, all the pairs of respondents who had similar attribute hierarchy got grouped into the
same cluster. The result is summarized in the below table.
K-means
Hierarchical
2-Step
LCC
SVD
Respondent 1
1
2
1
1
1
Respondent 2
1
1
2
1
2
Respondent 3
2
2
2
2
2
Respondent 4
1
1
1
1
1
Respondent 5
2
2
2
2
1
Respondent 6
1
1
1
1
1
Respondent 7
1
1
1
1
1
Respondent 8
2
2
1
2
2
Table 3: Summary of classification
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The working of SVD would be best understood with the help of the same 8 respondents
(Table 1). Like k-means or LCC, even in SVD, the required number of segments need to be
pre-specified. In case a two segment solution is required, SVD will calculate two unique row
vectors using the matrix multiplication and linear algebra properties. The number of row
vectors calculated will always be equal to the number of segments that have been prespecified. Each row vector corresponds to one segments.
Every row vector will contain as many elements as there are attributes that have been
included in the segmentation study, in this case, each row vector will have 4 elements. The
value of each element in the vector gives an indication of the relative hierarchy of attributes
in the cluster. Higher the value, more is the importance of the corresponding attribute.
The row vectors which were calculated for a 2 segment solution are given below,
Row Vector 1 (λ1) = [-0.54 0.56 -0.62 -0.10]
Row Vector 2 (λ2) = [-0.49 0.21 0.10 0.84]
Therefore, it can be inferred from the two row vectors above, that in segment 1, the relative
importance of attribute 2 will be the highest, whereas it will be highest for attribute 4 in the
2nd segment.
The ratings of each respondent can be expressed as a linear combination of the above two
row vectors. For example,
The 1st respondent who had rated [1 1 1 1] across the 4 attributes respectively can be
expressed as,
[1 1 1 1] = α1 + 0.98*[-0.54 0.56 -0.62 -0.10] -0.3 *[-0.49 0.21 0.10 0.84]
The 2nd respondent who had rated [1 2 3 4] can be expressed as,
[1 2 3 4] = α2 – 0.4 *[-0.54 0.56 -0.62 -0.10] +1.8 *[-0.49 0.21 0.10 0.84]
The 3rd respondent who had rated [1 2 3 4] can be expressed as,
[2 3 4 5] = α3 - 0.4 *[-0.54 0.56 -0.62 -0.10] +1.8 *[-0.49 0.21 0.10 0.84]
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Similarly, all the other respondent ratings can be expressed as a linear combination of the two
row vectors.
Classification into segments is basis the coefficient of the row vectors. If the coefficient of
vector 1 is higher than that of vector 2, then the respondent gets classified into Segment 1. If
we observe, respondent 2 and 3, both of whom had the same attribute hierarchy, they will be
classified in the 2nd segment since 1.8> -0.4.
Data Analysis and Results:
This methodology is applied in some recent studies across different FMCG categories
ranging from food and beverages to cigarettes. The results of a segmentation using K means,
LCC and SVD in a beverage category are given below,
Across clusters the variation of attributes are summarized in the following table;
Std Dev.
K means
LCC
SVD
Cluster 1
11
15
18
Cluster 2
20
17
20
Cluster 3
19
22
25
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Cluster 4
17
21
19
Cluster 5
23
22
19
Average
20
19
21
Range
Cluster 1
Cluster 2
Cluster 3
Cluster 4
Cluster 5
Average
K means
46
71
60
76
95
70
LCC
48
60
84
68
93
71
SVD
57
82
106
80
61
78
It can be inferred from the above tables that SVD gives fairly higher discrimination across
clusters than the other conventional segmentation techniques.
Conclusion:
In sum, Singular Value Decomposition (SVD) is an improvement over standard clustering
techniques like K-Means or Latent Class Clustering – a fact that has been proven empirically
by testing the method across multiple datasets of multiple categories.
Additionally, one more advantage of SVD is the fact that it gives a visual representation of
the clusters as well where a n-dimensional figure (n being the number of clusters) is plotted
on a Cartesian plane. The below figure is an example of how the representation of a 4
segment solution would look like. It becomes extremely easy to gauge internal homogeneity
and external heterogeneity of the segments from this diagram. For example, Segment 3
(represented by the black dots) is extremely homogenous since all the respondents are
grouped extremely close together whereas segment 1 (represented by the purple dots) are
more spread out.
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References:
Data Compression with the Singular Value Decomposition, The Stanford Exploration Project,
http://sepwww.stanford.edu/public/docs/sep73/ray1/paper_html/node3.html
Singular Value Decomposition (SVD) tutorial, Massachusetts Institute of Technology
http://web.mit.edu/be.400/www/SVD/Singular_Value_Decomposition.htm
i
ii
IMRB International, 11 Shakespeare Sarani, Kolkata – 700071
IMRB International, 11 Shakespeare Sarani, Kolkata – 700071
488
The Sharpest Knife to Cut the Edge: A Crowdfunding Approach
to Measurement of Innovative Idea Potential
Debjyoti Sen Sharmai
1
IMRB International
11 Shakespeare Sarani, Kolkata – 700071
Phone: +91-98360 29288 / +91-33-44006400
Email: debjyoti.sensharma@imrbint.com
Introduction:
Innovation is arguably the most used and abused word in market research. Everyone agrees
that to stay relevant, innovation is the need of the hour.
Ironically, however, MR is more liable to reject ‘innovative’ ideas. Facebook would have
bitten dust in traditional concept test. This paper introduces an alternative approach based
crowdfunding principles to check the potential of ‘original’ ideas, with the aim of addressing
the following limitations of traditional concept testing:
‘Innovation’ benefits are not always immediately apparent to an average consumer,
increasing its rejection probability in direct questioning.
Direct questions do not need respondent’s commitment. She can get away with saying
‘Definitely’ without actually meaning it
Consumer choice is likely to be influenced by what others do, something that cannot be
assessed in traditional setup
Crowdfunding – The Philosophy:
Crowdfunding is a collective effort by people who network and pool their money together,
usually over the internet in order to invest in and support efforts initiated by other people or
organizations (Ordanini, A., 2009, “Crowd funding: customers as investors). Crowdfunding
works on two basic principles
489
Investment is Intention Practised: People invest in ideas they are convinced about, making it
logical to assume that they would be interested in using the end product.
Momentum matters: People seek reassurance that they are making the right choice. If an idea
already has backers, chances are that it will get even more.
These principles are what the proposed approach on testing potential of innovative concepts
is based upon.
Developing the Approach:
This approach has been developed in collaboration with Dabur India Ltd. Dabur provided us
with a few test concepts:
Concept A (Health Bev): An innovation in the health beverage space.
Concept B (‘Cool’ Drink): An innovation in the ‘cool’ beverage space.
Concept C (Tech Grooming): An innovation in tech based personal grooming space.
Using these test ideas, we started to put our approach into action, which can be broken down
into 4 broad steps:
Step 1: Finding a crowdfunding partner
We partnered with one of India’s fastest growing crowdfunding platform to host the test ideas
on their website.
Step 2: Creating the crowdfunding project
To make sure the ideas were in no way different from any other idea on the crowdfunding
website, videos and write-ups were made for each to communicate to potential investors, the
benefits the idea would ultimately deliver.
490
Figure 1: The crowdfunding platform
The concepts were present alongside concepts from multiple categories. The rationale was
that since the consumer’s expenditure budget is limited, each product competes with other
products from the same category and with unrelated categories.
Figure 2 below is what a visitor to the website would see if she clicked on any of the
concepts.
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Figure 2: The concept page
Step3: Lure the investors
Invites were sent out to people to express their opinion on India’s next biggest innovation.
For the non-confidential concepts, invites can also be sent through social media websites like
Facebook. Facebook promotions help reach out to a relatively large number of people in a
short period of time and at costs lower than what would have been if recruited through
traditional routes.
Step4: No questions
In this approach to potential evaluation of concepts, instead of questions, end to end
behaviour of each visitor to the website was recorded. Performance was primarily evaluated
basis the visitor’s observed reaction to the idea.
The ‘Control’ Approach
When the reggae great Bob Marley says ‘you can’t forget your past’ (‘No woman, No cry’
lyrics), there is no option but to sit up and do what he asks you to do. The three test concepts
were also evaluated in the traditional method where ratings were taken on a standard 5 point
scale for a host of attributes for each of the concepts. Concept cards were made for each of
the concepts and were exposed in three matched panels.
Target Group and Coverage:
The invitations were sent out to people, both male and female, in the age group of 18-45
years residing in Delhi, Bangalore, Chennai and Mumbai. The traditional method of concept
testing was also done within a similar target group to maintain comparability between the two
methodologies.
Potential Evaluation:
We propose three metrics that will eventually feed into the potential estimation of the
concept:
1. Footfall: In the crowdfunding exercise this is the number of visitors to the concept page as a proportion of total website visitors.
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2. Investor Quotient: It is given as the number of people who contribute money for the
concept as a proportion of the Footfall count. The Investor Quotient is indicative of
people’s intention to spend on the concept.
3. Investment Quantum: It is not enough to have contribution to a concept; the amount
invested per investor is also important. However, instead of directly taking the quantum
of money invested, to make all metrics comparable, we use the proportion of people who
have invested higher amounts in the concept than most other people.
These three metrics can be mapped to two dimensions which together can be a barometer of a
concept’s success potential:
1. Initial Engagement: Whether the concept will generate interest among enough people or
not. The metric Footfall is mapped here. This dimension score will range from 0 to 100.
Higher it is, the better it is for concept’s chances for success in actual marketplace.
2. Action: It is a composite score derived from Investor Quotient and Investor Amount. It
also ranges from 0 to 100. Higher the number, better are the chances of the concept
performing well.
Footfall
(Range: 0-100)
Initial Engagement
(Range: 0-100)
Investor Quotient
(Range: 0-100)
Action
(Range: 0-100)
Investment Quantum
(Range: 0-100)
Metrics
Dimensions
Figure 3: The metric to dimension mapping
These two dimensions form a 2X2 Prospect Matrix, with each quadrant defined in Figure 4:
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Figure 4: Prospect Matrix
The matrix allows the marketer to understand the trajectory of the product once launched,
replacing single number from conventional testing which can dub an idea as success or
failure, rooted in the idea of only mass appeal.
Data Analysis:
To allow a more diverse competitive field for the three concepts of interest, we sent out
invites for evaluating other concepts on the crowdfunding site. However, for ease of
explanation in this paper, the table below gives the scores of only relevant concepts from both
the crowdfunding and the traditional method.
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Table 1: Key scores from crowdfunding and traditional research
Results:
Traditional 5-point scale indicated similar potential for both A (Health Bev) and B
(‘Cool’ drink), with Concept C (Tech Grooming) faring worst. The mean scores for A
and B were very close to 5, implying that both have almost universal acceptance.
However, neither Initial Engagement nor Action scores from crowdfunding, were
anywhere close to the maximum possible number scope of improvement for the
concepts.
The crowdfunding approach was able to differentiate between concepts when plotted
on the Prospect matrix
o Concept A was a borderline case between Champions and Middling. It evoked
quite a lot of casual interest and a reasonable level of investment, but the marketer
would need to define its USP with greater clarity to move people to Action.
o Concept B was a Slow Starter, with low Initial Engagement but firm conviction
among those interested, resulting in higher Action scores - probably due to its
positioning as a ‘cool’, innovative beverage with a proposition that appeals to
women looking to stay trendy
o Concept C (Tech Grooming): Slow Starter on the boundary with Laggards. It
would need far more work than other two concepts to attain any kind of critical
and sustainable mass in the market.
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Figure 5: Concepts mapped to the Prospect Matrix
Conclusion:
This construct has been tested across multiple FMCG categories with actionable insights
The working principles behind crowdfunding method to identify innovative ideas are
solid and as grounded as traditional methods
The reason why this works is because:
o There are no direct questions and hence no System 2 led, rational, by rote
responses All metrics are based on actual behaviour
o The responses are voluntary. The resulting data is therefore much more realistic
and plausible
The Prospect Matrix allows the marketer to understand what kind of path will the idea
follow in the market – an instant smash hit or a cult favourite – allowing even niche ideas
to be brought to the fore
Useful diagnostics like identifying the most amenable target group are a part of the
approach, enabling an understanding of who to speak to when launching the idea in the
market
There is no constraint – either minimum or maximum – for the number of concepts that
can be tested
However, this is merely the start. Currently we are working on integrating remote, devicefree eye tracking, voice modulation analysis and facial coding into this framework, enabling
deeper insights into consumer reaction.
496
To conclude, crowdfunding’s foundation built on the principles of natural human behaviour
make it the perfect platform to evaluate innovative marketing ideas.
References
Ordanini, A., 2009, “Crowd funding: customers as investors
Turning to the Crowd for Market Research, Indiegogo Blog, October 2015,
https://go.indiegogo.com/blog/2015/10/crowdfunding-market-research.html
497
Brand commitment: The roles of brand experience, brand
passion, brand ethicality perception and self-congruity
Geetika Varshneyai, Gopal Dasii, and James Agarwaliii
1
Indian Institute of Management Rohtak,
M. D. University Campus, Rohtak, Haryana (India), 124001.
Email: geetika.varshneya@gmail.com / gopal.das@iimrohtak.ac.in
2
University of Calgary, Haskayne School of Business, 2500 University Dr NW,
Calgary, AB T2N 1N4, Canada.
Email: 2james.agarwal@haskayne.ucalgary.ca
Introduction:
Now-a-days customers are more empowered to choose amongst various brand options
(Prahalad and Ramaswamy, 2003). Hence, achieving brand commitment is one of the
ultimate goals for brands, which decides a brand’s long term sustainability in the market
(Shukla et al., 2016). Therefore, brands need to constantly and promptly figure out unique
ways to enhance brand commitment (Singh et al., 2012). In this regard, several researchers
have theoretically argued that (i) providing stimulating, extra-ordinary brand experience; (ii)
building an ethical brand image in the minds of consumers and (iii) understanding target
customers and enhancing their self-congruence with the brand may result in long-term
commitment (e.g. Francisco-Maffezzolli et al., 2014; Swimberghe et al., 2014; Morhart et
al., 2015). Therefore, the present study aims to empirically examine the roles of brand
experience, brand passion, brand ethicality perception and self-congruity in enhancing brand
commitment.
Research Gap and Research Problem:
Brand experience plays a central role in brand building (Brakus et al., 2009). Intuitively, a
positive brand experience should result in brand commitment. But, there are contrary
arguments in the literature regarding their relationship. A few researchers (e.g. Brakus et al.,
2009) have argued a direct relationship. However, a few studies (e.g. Francisco-Maffezzolli
et al., 2014) indicated an indirect relationship through mediators like relationship quality,
498
affect and emotions between brand experience and brand commitment. The present study
aims to shed more light by assuming an indirect effect of brand experience on brand
commitment considering brand passion as mediator between the two constructs.
In an era of ethical consumerism, where brands’ conduct has come under public scrutiny,
consumers’ ethical perception (CEP) of brand plays an important role in the selection and
repurchasing of a brand (Brunk, 2012; Sudbury-Riley and Kohlbacher, 2016). The extant
literature revealed that no study so far has tested the influence of consumers’ ethical
perception of brand in influencing commitment. Hence, we argue that consumers tend to be
more passionate and hence, expected to be committed towards brands, which are perceived to
be more ethical than their competitors’ brands. Accordingly, we assume that brands having
low CEP will weaken the link and a high CEP will strengthen the link between brand passion
and brand commitment.
Another stream of literature has argued the significance of self-congruity (SC) in brand
repurchase (Huber et al., 2010). Limited attempts have been undertaken to understand the
role of self-congruity on brand commitment. Swimberghe et al. (2014) theoretically argued
that people tend to be more passionate about brands whose brand image matches closely with
their own self-concept. Accordingly, we assume that brands having low SC will weaken the
link and a high SC will strengthen link between brand passion and brand commitment.
Covariates
We controlled for a few variables that might influence brand passion and brand commitment,
but presently these are not a part of our conceptual framework. Brand attitude (BA) and
customer satisfaction (CS) which are known to influence the relationship of customers with
the brand (Mitchell, 1998; Kim et al., 2008; Roy et al., 2012; Shamim et al., 2015) were
included as covariates in the analysis. In figure 1, the path is depicted by dotted line.
Objectives of the Study:
Based on aforementioned research gaps, the objectives of this present study are (ia) to
examine the influence of brand experience on brand passion (ib) to investigate the influence
of brand passion on brand commitment, subsequently testing for mediating role of brand
passion; (ii) to test for the moderating role of consumer ethical perception on the relationship
between brand passion and brand commitment; and (iii) to test for moderating role of self-
499
congruence on the relationship between brand passion and brand commitment. To achieve
these objectives, four hypotheses (as depicted in figure 1) were formulated.
Insert Figure 1 here
Research Method:
Measures
Different scales (mentioned in Table 1) were adopted from the literature and modified to fit
the context of our study. All items were measured on a 7 point Likert scale (1 represented
“strongly disagree”, 7 “strongly agree”). Content/face validity of all the constructs was also
checked.
Insert Table 1 here
Sampling and data collection
The convenient sample of respondents (Indian consumers of age group 18 years and above)
answered a self-administered questionnaire based on apparel brands in English. Out of 305
responses, 273 were included for data analysis eliminating outliers and incomplete responses.
Data Analysis and Results:
The reliability of constructs (Table 2) indicates that for all the constructs the values met the
minimum cut-offs (Hair et al., 2012). The values of AVE extracted from two standardized
constructs were greater than the square of the correlation between the two constructs
indicating a strong discriminant validity of all constructs (mentioned in Table 2) (Das, 2014).
Insert Table 2 here
The model was tested with the help of Structural Equation Modeling using AMOS (version
19). First, we tested the model fit considering brand experience construct as reflective second
order construct. The results (reported in Table 3) indicated a fair fit model. The factor
loadings are reported in Table 4. Hence, we considered brand experience construct as
reflective second order construct. Further, the fit indices as reported in the Table 3 indicated
that the model fits the data satisfactorily for the measurement model as well as the structural
model (Byrne, 2013). The hypotheses were tested with structural model based on p-value.
The results are reported in Table 4.
Insert Table 3 and 4 here
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The results indicate the acceptance of H1 and H2. Amongst covariates, only brand attitude
has a positive influence on brand passion. Further, we also checked mediation with
bootstrapping using AMOS. The results are reported in Table 5. The findings indicated that
brand passion fully mediates the path between brand experience and brand commitment.
Next, we checked for the moderating roles of consumer-based ethical perception and selfcongruence separately by adopting same procedure i.e. first dividing the data into two groups
by median split technique and then testing the model. With median split technique we divided
the data into two groups based on consumers’ ethical perception (high ethical perception and
low high ethical perception) and self-congruence (high self-congruence and low selfcongruence). Next, we checked the difference between constrained and unconstrained model
based on χ2 and degrees of freedom. Based on this, p-value was calculated. For both
moderators (ethical perception and self-congruence), the p-value (p<0.05) indicated that the
two groups were different.
Further, we checked for the difference in the β value for BP→BC across two groups (high
and low levels) for both moderators. Based on the findings reported in Table 6, we accepted
H3 and H4.
Insert Table 5 and 6 here
Implications of the Study:
The study investigated and validated the moderating roles of consumers’ ethical perception
and self-congruity on brand passion and brand commitment. The results indicate that
consumers are more passionate about brands that have (i) high ethical perception and (ii) high
self-congruence. This further leads to brand commitment. The findings also show that brand
passion acts as a full mediator in the relationship between brand experience and brand
commitment. The results of this study may provide interesting insights for practitioners by
helping them to design strategies by highlighting the role of ethical image of brands.
References:
Ahn, T., Ekinci, Y., and Li, G. (2013). Self-congruence, functional congruence, and
destination choice. Journal of Business Research; 66(6): 719-723.
Brakus, J. J., Schmitt, B. H., and Zarantonello, L. (2009). Brand experience: what is it? How
is it measured? Does it affect loyalty?. Journal of Marketing; 73(3): 52-68.
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Brunk, K. H. (2012). Un/ethical company and brand perceptions: Conceptualising and
operationalising consumer meanings. Journal of Business Ethics; 111(4): 551-565.
Das, G. (2014). Impacts of retail brand personality and self-congruity on store loyalty: the
moderating role of gender. Journal of Retailing and Consumer services; 21(2): 130-138.
Francisco-Maffezzolli, E. C., Semprebon, E., and Prado, P. H. M. (2014). Construing loyalty
through brand experience: The mediating role of brand relationship quality. Journal of Brand
Management; 21(5): 446-458.
Hair, J. F., Sarstedt, M., Ringle, C. M., and Mena, J. A. (2012). An assessment of the use of
partial least squares structural equation modeling in marketing research. Journal of the
Academy of Marketing Science; 40(3): 414-433.
Morhart, F., Malär, L., Guevremont, A., Girardin, F., and Grohmann, B. (2015). Brand
authenticity: An integrative framework and measurement scale. Journal of Consumer
Psychology; 25(2): 200-218.
Shukla, P., Banerjee, M., and Singh, J. (2016). Customer commitment to luxury brands:
Antecedents and consequences. Journal of Business Research; 69(1): 323-331.
Singh, J. J., Iglesias, O., and Batista-Foguet, J. M. (2012). Does having an ethical brand
matter? The influence of consumer perceived ethicality on trust, affect and loyalty. Journal of
Business Ethics; 111(4): 541-549.
Swimberghe, K. R., Astakhova, M., and Wooldridge, B. R. (2014). A new dualistic approach
to brand passion: Harmonious and obsessive. Journal of Business Research; 67(12): 26572665.
Whan Park, C., MacInnis, D. J., Priester, J., Eisingerich, A. B., and Iacobucci, D. (2010).
Brand attachment and brand attitude strength: Conceptual and empirical differentiation of
two critical brand equity drivers. Journal of Marketing; 74(6): 1-17.
Williams, P., and Soutar, G. N. (2009). Value, satisfaction and behavioral intentions in an
adventure tourism context. Annals of Tourism Research; 36(3): 413-438.
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Figure 1: Conceptual framework
Table 1: Scales
Construct
Reference
Brand experience
Brakus et al. (2009)
Consumer perceived ethicality
Brunk (2012)
Brand passion
Swimberghe et al. (2014)
Brand commitment
Shukla et al. (2016)
Self-congruity
Ahn et al. (2013)
Customer satisfaction
Williams and Soutar (2009)
Brand attitude
Park et al. (2010)
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Table 2: Reliability and Validity of Constructs
Construct
CR
Cronbach
alpha
AVE
Brand experience
Sensory (SD)
0.74
0.75
0.80
Affective (AD)
0.89
0.95
0.76
Behavioural (BD)
0.90
0.96
0.77
Intellectual (ID)
0.77
0.84
0.76
Brand commitment
0.71
0.76
0.93
Brand passion
0.88
0.92
0.95
Brand attitude
0.75
0.74
0.81
Customer satisfaction
0.84
0.76
0.85
Discriminant validity
SD
AD
BD
ID
BP
BC
A
CS
a
SD
1 (0.75 )
AD
0.62b 1 (0.95)
BD
0.54
0.55 1 (0.96)
ID
0.53
0.58
0.64 1 (0.84)
BP
0.58
0.63
0.61
0.65 1 (0.92)
BC
0.54
0.60
0.50
0.53
0.84 1 (0.76)
A
0.26
0.21
0.28
0.20
0.32
0.30 1 (0.74)
CS
0.00
0.00
0.00
0.00
0.00
0.00
0.0 1 (0.76)
a
-AVE
-squared correlation
b
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Table 3: Fit Indices
Goodness of fit measures
Brand experience as a
reflective second
order factor
χ²/degrees of freedom=2.309 (p=0.000); NFI (0.938); GFI
(0.932); CFI (0.964); TLI (0.952); IFI (0.964); RMSEA
(0.063)
Measurement model
χ²/degrees of freedom=2.054 (p=0.000); NFI (0.900); GFI
(0.911); CFI (0.951); TLI (0.940); IFI (0.951); RMSEA
(0.062)
Structural model
χ²/degrees of freedom=1.818 (p=0.000); NFI (0.909); GFI
(0.900); CFI (0.923); TLI (0.917); IFI (0.924); RMSEA
(0.053)
Table 4: Hypotheses Testing
Factor loadings
p-value
BE→SD
0.948
p<0.05
BE→AD
1.010
p<0.05
BE→BD
0.980
p<0.05
BE→ID
1.013
p<0.05
Hypotheses
β-value
t-value
p-value
0.855
1.085
11.372
8.459
p<0.05
p>0.05
p<0.05
0.119
-
2.535
-
p<0.05
p>0.05
p>0.05
p>0.05
BE→BP
BE→BC
BP→BC
Covariates
BA→BP
BA→BC
CS→BP
CS→BC
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Table 5: Bootstrapping (mediation check)
With covariates
BC
Direct effects (p-value)
0.001*
0.017*
0.238
BE
A
CS
After adding brand
passion as a mediator
BE
A
CS
Indirect effects (p-value)
0.002*
0.040*
0.753
BC
Direct effects (p-value)
0.176
0.489
0.098
*p value significant at 0.05
Without covariates
BC
Direct effects (p-value)
0.001*
BE
After adding brand
passion as a mediator
BE
Indirect effects (p-value)
0.002*
BC
Direct effects (p-value)
0.213
* p value significant at 0.05
Table 6: Moderating Role of Consumer Ethical Perception and Self-Congruity
BP→BC
High ethical perception
Low Ethical perception
BP→BC
High self-congruence
Low self-congruence
β-value
t-value
p-value
1.185
1.075
3.877
7.395
p<0.05
p<0.05
β-value
t-value
p-value
1.472
1.036
3.2
7.208
p<0.05
p<0.05
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The Distorted Mirror: Refining Estimates of SocioEconomic Group Sizes
Javed Hazarikai
1
IMRB International
+91-9560049926
javed.hazarika@imrbint.com
Background:
This paper concerns the topic of under-representation of certain sections of the society and is
an important subject for the market research industry.
In a typical study, we are rarely hope to achieve a truly random sample of consumers.
Generally, we would set quotas (usually by age, gender, socio-economic class- and
sometimes other variables such as product/brand use). When the data comes in, we use
‘weights’ based on other sources to produce a result that we hope will be representative of the
population.
These ‘other sources’ are usually pan-Indian studies with a large sample size- which in turn
draw upon the Indian Census for some of the estimates, while the rest are based on the
survey. For example, age, gender, and rural- urban distribution come from the Census, while
the distribution by socio-economic class comes directly from the survey.
However, as will be shown, there is reason to believe that some kinds of people are underrepresented in these large scale surveys- including more affluent consumers, as well as those
at the bottom of the pyramid. This means that the weights being used are imperfect.
If this is happening, the true voice of the customer is getting lost and our results are being
distorted.
More about the problem:
In an earlier era (the 1980s), survey-based estimates of car ownership and two-wheeler
ownership were broadly consistent with estimates from secondary sources (e.g. cumulative
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vehicle production, vehicle registrations). If anything, survey estimates tended to be slightly
higher than the numbers emerging from secondary sources.
But today, most surveys consistently underestimate indicators such as car ownership. For
example, a recent survey (2015) estimated car ownership in Delhi at 17%. The 2011 census
puts the figure at 21%-which means the true car ownership at that time could have been a
little higher- which means a difference of at least 4 percentage points (probably higher, since
ownership would have risen in the 4 years since the Census).
We believe that we probably get it wrong due to under-representation of people at both ends
of the social affluence spectrum:
- The affluent are under-represented because they live in gated complexes, have higher
rates of refusal, or simply not contacted because the area is considered hostile to
research.
- The problem probably worsens with increasing affluence- and is also a function of
town class (the better off households are harder to contact in metros, and not so
difficult to contact in villages)
- We believe even the lowest levels of affluence are under-represented. This may be
because interviewers wish to avoid the lowest classes, or find them difficult to talk to.
In rural areas, the problem could arise because villages deep in the interior get
substituted with more accessible villages or because some villagers speak in
unfamiliar dialects
How can we solve the problem?
The Census now captures more information than it did in earlier times.
While earlier we had information about age, gender, literacy, we now also have information
about assets such as TV, vehicle ownership, access to electricity, toilet, and water. Any
solution that we can come up with should involve making more intensive use of all the
information that is available.
However, while making use of information about age, gender, distribution by region/townclass/rural is a fairly simple exercise, it is more difficult to layer in information about other
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aspects (ownership of assets, access to facilities) when combining data from a large scale
survey with the Census.
In this paper, we propose to discuss alternative methods for correcting survey data so that we
have a truer picture of the socio-economic composition of the consumer base. One such
method is described below which we have tested on data from a survey conducted in
Rajasthan (urban).
Brief Description of Methodology:
The steps involved are outlined below:
1. First, we have extracted data from the Census of 2001 and 2011, on indicators related to
households- such as ownership of cars, TV, two-wheelers, material of roof/walls, and
indicators related to individuals (literacy).
2. From our survey, each household is graded according to the level of affluence using item
response theory (IRT1). This is done by using around 10--13 indicators-such as consumer
durables, quality of housing, savings bank, etc. (Information on these indicators is
available in both our survey as well as the Census)
3. We explore alternative hypotheses about the ‘shape of the response function’ - how
participation/co-operation for a survey might vary by affluence level. Would it be a rising
curve- no-inclusion rates continuously increase with affluence? Would this rise at an
increasing rate? Or would response rates be U-shaped: i.e. low at both the lower and the
upper end? Through a process of trial and error, we determine the shape that best
reconciles observed data from the survey with the Census.
4. After correcting for differential response rates by affluence level, we re-weight the data to
produce new estimates of the incidence levels for durables and also size of various SEC
groups.
In psychometrics, item response theory, also known as latent trait theory, strong true
score theory, or modern mental test theory, is a paradigm for the design, analysis, and scoring
of tests, questionnaires, and similar instruments measuring abilities, attitudes, or other
variables. This concept can be applied to the problem of measuring social affluence by
gauging the importance/ status of various durables and how different affluent groups have
differential access to such durables.
1
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What could the response function look like?
The response rate could depend on affluence as well as population stratum (i.e. town-class).
It’s possible that that as we go down the population strata, the participation rate improvesand differences in participation by level of affluence comes down- but there are pockets of
resistance (or difficulty of contact) at both the high end and the low end. So the response
‘surface’ could look like the one shown below (Figure 1).
Figure 1: Response surface by affluence and pop-strata
In the simple case where we are trying to reconcile observations from sample surveys with
Census for a city, we need to estimate just two parameters (at most) - assuming we have
guessed the shape of the curve correctly (We don’t need the exact response rate either- just
how this varies by affluence level). The number of unknowns increases when we are trying to
make an estimate for the country as a whole, but we believe that the exercise is still feasible.
Results:
The survey data we have used has data on 11 consumer durables such as telephone/mobile,
income, literacy, material of roof/walls. All these were captured in the Census as well.
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Each household gets assigned a score based on the number as well as the rarity of the
durables owned by that household. This score represents the affluence level of the household.
We then incorporate the response function into our calculations.
Figure 2: Possible nature of the response rates by social stratum
We have tried two assumptions about the nature of response rates
i.
The polynomial (the red lines in Figure 2 above) to estimate the true response rate
curve based on our beliefs about its approximate inverted U-shaped structure.
ii.
A step wise approach ( blue lines in Figure 2) where we assume that the surveys get it
right for people in the middle, and drop off sharply by affluence level at both ends of
the social spectrum
We have not yet tried incorporating differential response functions by town-class. All results
have been derived using a function that depends only on affluence level and not on townclass.
As of now, the step-wise approach has worked better. Below is the table of incidence levels
of durables.
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Electricity
Bank account
Have Toilet
Wall of
brick/similar
Car/Jeep/Van
Two-wheeler
LPG
Census
Survey
Survey 2011- Error - pre Error - post
2011
2011
corrected
correction
correction
94
99
94
5
0
67
61
58
-6
-9
82
87
78
5
-4
75
93
90
18
15
10
45
69
5
49
85
8
47
76
Mean absolute
error
-5
4
16
-2
2
6
8.4
5.4
Table1: Summary of results
(*Census has data for ‘TV’)
As can be seen, we are able to bring down the differences vis-a-vis Census considerably.
What would the distribution of SECs (as used by market researchers) look like after the
correction for non-response? In Rajasthan, there is a small increase in SEC A2/A3 (and a
decline in SEC B/C) as well as a larger increase in SEC E
Socio Economic
Class
Survey 2011
A1
A2+A3
B
C
D
E
2
17
27
26
24
4
Survey 2011
corrected
3
23
19
18
24
13
Table 2: Distribution of new SEC- Preliminary results
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Conclusions and Implications
1. We think that there is a clear need for a method to reconcile Census data on indicators of
affluence
2. We think that our methodology holds promise. However, we do need to explore
alternative methods before reaching a clear conclusion.
3. Preliminary results suggest that correction for non-participation is not needed at all in the
middle- it is the extreme ends, i.e. both upper and lower classes that require correction.
This needs to be confirmed by examining similar data for other states in India.
4. We have a more plausible picture of the distribution of households by SEC. However, it’s
not perfect- and there could be multiple solutions that could be found, given the same set
of data
5. Our method will not work for socio-economic groups which have participation rates close
to zero.
References:
Census of India, 2001 & 2011
https://en.wikipedia.org/wiki/Item_response_theory
http://echo.edres.org:8080/irt/
i
IMRB International
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Investigating beyond category boundaries –
The continuum of Adjacency
K.N. Sriram1,
1
OMRC Consulting,
398, 7 Cross, Mico Layout, BTM 2 Stage, Bangalore – 560076. Phone: 41201441
Email: 1sriram@opinionresearch.in
Introduction:
This research develops and tests a conceptual framework for the practice of innovation in market
research methodology for brand positioning. The empirical testing introduces exhibited behavior,
to reveal brand positioning in a contextual continuum. The approach uses distance metric strategy
to explain degree of “connection between brands, across categories”. We illustrate that brands
show up contiguously on various aspects of examination. The research succeeds in measuring
this contiguity, offering marketers immense scope to sharply define brands. We plot the
intervening space on a real-time basis by adopting electronic data capture and dashboard plots.
The research establishes conterminous brands - Brands that share the same value, similar
attributes, same context, same meaning to the consumer.
Research gap and research problem Are conventional market research methods able to understand the consumer’s holistic view of
looking, interacting and experiencing multiple categories and sub categories in day-to-day brand
choices? Likely not. Generally, the conventional (traditional) market research methodology takes
into account the complete category context at best and not beyond that.
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However, in real-life, consumers interact and experience with multiple categories either
simultaneously or in succession. Hence, the needs from the brands, and, the perception about the
brands, would largely depend on all the categories that they interact with. Given this, it would be
much more appropriate to design research that covers adjacent categories.
How can marketing strategy teams build brand intelligence?
Why has the consumer preferred specific brands across categories / sub categories?
What are the values and attitudes which motivated and drove the consumers to buy
various brands across adjacent categories?
Finally, what are the trending and forecasting that can be built using this observed
consumer behavior through this case?
Key objectives of the study –
-
To understand the brand preferences and usage across the adjacent categories and sub
categories
-
To aid the brands to position appropriately in the consumer’s mind considering their
disposition towards various brands and actual behaviour that they exhibit in the category
adjacency
-
To utilize the data for the above mentioned understanding that are captured basis actual
behaviour of the consumers rather than claimed response through the traditional
methodology
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Research Methodology –
The study employs the twin methodologies of stated preference and revealed preference. The data
acquisition methods are entirely online using tablet devices. The methodology is a first of its
kind, as each data point is validated.
The analysis of adjacency uses the tested and validated distance metric. The distance metric
developed is both robust to offer comparisons across categories and brands within and outside the
category. The methodology enables continuous tracking to capture the movement and map the
actual market scenario and the category / brand landscape at any given point in time through the
consumer’s lens.
Data analysis and Results –
Post capturing the actual behavioral data, the data has been analyzed to understand the actual
distance between brands across categories through Euclidean distance using Ward’s squared
Euclidean calculation methodology.
Also, the brand imagery across categories as perceived by the consumers was then plotted against
the brand using the similar Euclidean distance.
This has clearly helped us in understanding the adjacent brands and the current positioning of
these as perceived by the consumers. This in turn helped us to get a clear understanding of the
current positioning and future opportunities.
Implications of the study –
The brand strategy must align with the consumer’s underlying emotive needs to achieve a long
term consumer brand relationship. This can be achieved only by understanding their current
behavior in terms of their brand choice across sub categories within the main category and
motivations behind choosing those brands. This would enable the brand manager to bring in
holistic perspective while brand building exercise…..be it strategic or a tactical initiative.
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The study helps in understanding;
-
Which all brands consumers are using across sub categories within the main category?
-
Why have they chosen specific brands across sub categories?
-
What is the overarching need that the consumers are trying to address through the product
/ brand selection across sub categories?
-
Where are they (which sub categories are they) compromising and where are they
satisfied with?
Thus the brand team is now enabled to;
-
To formulate the brand strategy aligned with the consumer’s inherent needs from the
holistic perspective with respect to the broad category level (helps to avoid the myopic
view on the sub category we operate and hence missing many critical aspects..)
-
To fine tune the brand positioning platform and own a clear distinct positioning in the
consumer’s mind
-
Align the communication strategy accordingly and choose the relevant media and
optimize the media mix - based on the brand’s communication in the adjacent categories
-
To have a better shelf display which would ease the consumers to choose the brands
appropriately
Leading to profitable growth by bringing in higher efficiency across product, brand, and
communication and promotion strategy.
References
Reference for Analysis - Deza, Elena; Deza, Michel Marie (2009). Encyclopedia of
Distances. Springer. p. 94.
Harary, Frank (1962), "The determinant of the adjacency matrix of a graph", SIAM
Review, 4: 202–210, doi:10.1137/1004057, MR 0144330.
https://hbr.org/2012/05/managing-your-innovation-portfolio
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Veiled Confessions - Beyond Skin-deep Need Elicitations
Pooja Agarwal1 and Debjyoti Sen Sharma2
12
Kantar IMRB
11 Shakespeare Sarani, Kolkata – 700071
Phone: +91-988320 3475 / +91-33-44006400
Emails: pooja.agarwal@imrbint.com / 2debjyoti.sensharma@imrbint.com
1
Introduction:
A lot has already been said about Vogue Empower’s #MyChoice video featuring Deepika
Padukone. The social media was abuzz with this video where she is talking about an Indian
woman’s prerogative of choice. While some have branded the video an elitist, ‘weak attempt’
to sell feminism, others think the video to be quite empowering. At the heart of this polarising
discussion is the question: is it really talking about Indian women?
Despite our culture becoming more outwardly expressive, Indian women still tend to have
an inherent tendency to become reticent and shy away when asked about their emotions
and innermost desires. The ‘Log kya kahenge’ syndrome (literal translation: ‘what will
people say’) still plagues the Indian society and plays a huge role in shaping the mindset and
attitude of an average Indian. The more one travels into India’s heartland, the stronger the
syndrome.
Therefore, when a major FMCG player asked us to help them understand the emotional need
spaces that define Indian women, we realized that using traditional quantitative
interviewing techniques was unlikely to elicit their real selves. We had tried it in the past and
never managed to scratch beyond the ‘fair’ surface. Additionally, we had to ensure that
whatever our findings were, they had to be brought alive in a rich and engaging fashion.
This paper details the approach that we finally adopted and successfully presented.
1
2
Kantar IMRB, 11 Shakespeare Sarani, Kolkata – 700071
Kantar IMRB, 11 Shakespeare Sarani, Kolkata – 700071
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Challenges faced:
1. Consumer Engagement: Indian women are usually not vocal about their deep seated
emotional desires and insecurities, especially in front of a stranger. The task at hand was
to simulate a situation where women would feel comfortable enough to express her
opinions and alleviate her fear of being judged socially.
2. Data Interpretation: While conventional clustering techniques yield segments based on
the rating pattern of the respondents, we needed a technique that could account for
relationship between attributes as well.
3. Insight Assimilation: We had to bring alive the emotional need states of Indian women in
a manner that resonated with the audience.
Research Answer:
1. Consumer Engagement
Our experience suggests that the primary reason for reticence among Indian women can be
attributed to the following factors:
a) Fear of being judged by people who would be privy to her answers
b) The culture dissuades them from talking about sex/ male-female attraction so
much so that even advertisements show admiration for a woman’s beauty coming
either from other women or from her husband. These are societal norms we operate in
and therefore the unwillingness to talk about beauty, sexual attraction etc.
Thus the traditional method of direct questioning would fail to suit the business requirements.
The answers obtained would be rational and therefore a camouflage.
We had to remove the spotlight from the woman and put it on the world at large, to get a
comprehensive understanding of the different motivations that drive Indian women.
‘Projective techniques’, which is commonly used in psychoanalysis and personality tests,
was used here. We adapted and modified it to suit the quantitative nature of our study. Instead
of directly asking, what are the primary motivators for using the products, we tweaked the
question so as to project the woman as an expert on the category/product. The underlying
assumption was that one’s opinions on others are an indirect manifestation of what they
believe, what they follow and who they are.
The projective technique was then incorporated in the max-diff questioning method to
elicit more discriminating responses (Figure1).
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Figure 1: Trade-off among 4 needs
Data Interpretation:
k-means for the longest time has been the simplest and the most popular clustering method.
However, since it was a distance based approach that only looked for proximities
between ratings without accounting for nature of data pattern, the resulting clusters or
segments tended to be based on high / low raters. This led to model based techniques like
Latent Class Clustering (LCC) which did not rely merely on distance between attributes but
also suggests optimal number of segments basis consistency and stability. However, today,
we have to move beyond data patterns and understand relationship between attributes.
Hence, we used a technique called Non-Negative Matrix Factorization (NMF), which
traditionally has not been used for clustering. It finds wide application in recommender
systems used by e-commerce websites like NetFlix, Amazon, MovieLens etc. The difference
has been explained through an example below (Figure 2).
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Figure 2: Example explaining NMF
Advantages of NMF over other clustering techniques:
1. NMF gives segments taking into account both the response patterns as well as the
relationship between attributes
2. Chances of forming a large segment with non-discriminating and lower order
attributes is significantly reduced
3. It also gives us the strength of association of each attribute within each cluster.
Hence, there is no need of doing a separate exercise for deriving the drivers
The utilities from max-diff for emotional needs were transformed to binary inputs to give
more discrimination and used for segmentation. Also, since needs of a teenager would differ
from that of a married woman, behavioural data like Life stage X Age was also used as an
input.
What we got? – The Output
Using NMF on data collated through projective framework and max-diff combination, we got
seven emotional need spaces. They were discriminating with little overlap between values.
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Statements on the more private and intimate emotions like ‘want to feel romantic’ and
‘want to feel sexy’ turned out to be one of the most discriminating across respondents.
Important drivers like these usually had very low standard deviation across segments and lost
out on possible positioning platforms when traditional questioning techniques were used
given the intrinsic reticence in the women’s responses to a standard question on needs.
Hence, we managed to elicit never seen before segments. When we spent time reading them,
they made intuitive sense. Once such segment belonged to the relatively newly married
small town ‘bahu’. In public she is shy, demure and respectful but is desirous of a playful
intimacy with her husband. She wants to be ‘sexy’ – something that she would have found
difficult to admit when standard interviewing questions is used.
Functional product benefits were overlaid on the emotional need spaces to provide the client
with product cues. Therefore, if a woman wants to be ‘sexy’ so that she can enjoy romance,
we also know the functional benefits that she seeks from the products.
Presentation of findings
Facts ‘tell’ but stories ‘sell’!
Taking inspiration from the above quote, we portrayed the emotional spaces using popular
characters present in media and communication that we see around us. The videos were a
collage of different advertisements, clips from popular movies or mainstream videos that
people – even the brand managers can easily relate to. The unique aspects of these videos
were that all the movies and advertisement clips that were taken had women as a
protagonist and depicted her different life-stages and the associated emotional desires and
insecurities (Figure 3).
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Figure 3: Segment snapshot*
To get the video content, we created a closed group on ‘Facebook’, wherein we posted
segment descriptors and asked the group members to post any advertisement, video,
character, link, etc. in the Indian context that came to their minds when they read the
description of the lady.
During the presentation, posters illustrating each need segment were unveiled as we spoke
about them. They now adorn the walls at the client’s office.
This helped the clients to grasp the essence of the segments at the onset and made it easier
for them to understand the nuances of the segments, thereby going beyond numbers and pen
portraits. It also aided in formulating the entire communication strategy for the need
segments by painting a picture of a woman in their minds.
Reasons for Submission:
1. The client is currently creating their brand and product portfolio based on the
insights generated
2. The videos defining each need space also served as a creative brief to the ad agency in
building their communication and positioning strategy for their brand/product
523
3. ‘Projective techniques’ has the potential in the following cases:
a) When articulation of emotions is difficult.
b) Respondents hesitate in voicing their true feelings like seen in this case study.
c) While this is useful in almost all scenarios, it is especially so when eliciting needs in
context of products or situations which might not always fit within the societal
parameters of good behavior. Categories where we are using it range from alcohol
to fashion to durables.
d) Capturing various other information like brand association, imagery etc.
4. NMF has been applied to other strategic studies as well and given actionable results. It
helps in giving more discriminating segments, driver scores for each of the segments
and also cuts on the time which was earlier spent on carrying out multiple iterations.
5. We received an appreciation mail from the marketing head, saying it is one of the best
insights works he had seen.
* Segmentation output and all findings have been masked to maintain client confidentiality
References:
Louviere, 1991, Best-worst scaling: A model for the largest difference judgments, Louviere,
Finn, & Timmermans, 1994, Retail Research Methods, Handbook of Marketing Research
Cohen, 2003, Maximum Difference Scaling: Improved Measures of Importance and
Preference for Segmentation
Magidson, J., & Vermunt, J. (2002). Latent class models for clustering: A comparison with Kmeans. Canadian Journal of Marketing Research, Volume 20.
Moskowitz, H. (n.d.). Segmenting Consumers by part-worth Utilities.
What is MaxDiff? Retrieved from http://www.sawtoothsoftware.com/.
How NMF works? Retrieved from http://joelcadwell.blogspot.in/
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TRACK X
525
Consumer Perspective for PLB purchase decision for select
Retailers: An Empirical Research in Indian context.
Ajay Singh1, Dr Debdeep De2
1
Research Scholar, 2Assistant Professor
Jaypee Business School , NOIDA, U.P. India.
Introduction:
India’s retail market is expected to double to $1 trillion by 2020 from $600 billion in 2015
driven by income growth, urbanization and attitudinal shifts (Retail 2020: Retrospect,
Reinvent, Rewrite. BCG & Retail Association of India, 2015) While the overall retail market
will grow at 12% per annum, modern trade will grow twice as fast at 20% per annum, and
traditional trade at 10%. Modern trade includes supermarkets, hypermarkets and other
organized retail outlets, while much smaller grocery stores are classified under traditional
channels. Modern trade is expected to grow three times to $180 billion in 2020 from $60
billion in 2015 and e-commerce at an even faster clip to quadruple in the same time to
become a $60-70 billion market, said the report.
By 2020, average household income will increase three times to $18,448 from $6393 in 2010.
Moreover, urbanization will increase to 40% from 31% and over 200 million households will
be nuclear, representing a 25-50% higher consumption per capita spend. Also, attitudinal
shifts will be seen as 75% of the population will belong to generation I, that is they were
below 14 years of age when the economy started opening and hence will have higher
consumption levels, said the report
Private Labels are taking the world by storm and are also flooding the Indian markets. This
research traces the origin and evolution of the retail industry along with private labels in
Europe and North America, and ends with a note on the evolution of private labels in India.
The emergence of retailing in India in an organized format has made private labels familiar
among Indians. Go to Shoppers' Stop outlet and you will find a brand called `STOP' which is
Shoppers' Stop's own brand. Similar is the case of the `Westside' brand of Westside from the
house of Tatas. In Pantaloons' food retail outlet, `Food Baazar' and the RPG counterpart,
`FoodWorld,' one can find packets of groceries marked with a `Food Bazaar' or a
`FoodWorld' stamp. So what is a Private Label? According to research scholar, Baltas (1997),
526
a private label is: "a consumer product produced by, or on behalf of, retailers and sold under
the retailers' own name or trademark through their own outlets"
Retailing in India is gradually inching its way toward becoming the next boom industry.
Retail industry in India is expected to rise 25% yearly being driven by strong income growth,
changing lifestyles, and favorable demographic patterns. Organized retail is on the threshold
of a boom in India. But as companies line up to grab a bigger and bigger slice of the retail
pie, another battle is likely to change the face of the industry, the one between the
manufacturer brands and the retail chains private label brands, which are far from being just
cheap generics. Private labels, or store brands, are those owned and sold by retailers in their
stores typically at a lower price because of minimal marketing and advertising expenses.
Worldwide experience shows that as retailers become more powerful, they have increasingly
focused on their own brands at the expense of manufacturer brands.
Research Gap and Research Problem:
Private label’s share in the modern retail in India is around 7% but it is much higher in
European countries which are approximately 40%. Though the growth of private label in
under all product category, but in the case of grocery it is around 15% in supermarkets and
nearly 30 % in hypermarkets of total value of sales. The current estimation of private label
market in India is around Rs 13 billion, which consists of 10 % to 12% of total organized
retail in India. Big retailers such as Pantaloon, Trent, Shoppers Stop and Spencer’s are giving
more focus on private label retailing. Out of the total sales the private label products sales
constitutes of 80% in Reliance, 75% in pantaloons and 90% in Trent’s. Aditya Birla group is
devising a strategy to increase the share of private label brand share from 10% to 35% in
coming 2 to 3 years (Images Retail Bureau, 2014).
There is no significant study on consumer perception of private label manufacturing in India.
In this light, the main research problem is to find which factors may have competitive
advantages of private label manufacturers.
Objectives of the study:
1. To explore the factors which influences consumer decision of buying Private Label
Brand (PLB) in food and grocery and apparel’s segment.
2. To study the impact of identified factors on PLB Purchase Decision.
3.
527
Research Methodology:
The research methodology is based on primary data collected of approximately 380
respondents of Top Retailers in NCR Region of India through structured questionnaire. The
study is limited to food & Grocery and Clothing & Apparel segment. To increase the validity
and reliability of the study, the questionnaire was based on previous empirically tested
questions. All questions, except those of demographic profile were based on a five-point
Likert scale, where respondents indicate their level of agreement to a statement. Initially
Exploratory Factor analysis was conducted to identify the key factors followed by multiple
regression analysis to study significant impact of explored factors on private label product
decision
Data analysis and Results:
The study explored the factors such as Price consciousness, Brand Image, Quality
Consciousness, Store Image and Self Perception by using exploratory factor analysis further
multiple regression analysis will reveal that brand awareness, price consciousness, quality
variability, store image have significant impact on PLB Purchase decision whereas self
perception is found insignificant in PLB purchase decision
Implications of the study:
Although private label products have been in existence for more than a decade, there is much
more to understand about retail business and the consumer’s needs and wants with regard to
private label products. The study is of continuous importance for the retailers who intend to
increase their store brands /private label brands acceptance in the market. This study
investigates whether retailers’ motives to market private label products are really realized
through analysing consumers’ attitudes, preferences and behaviour in India. As in the present
competitive market store brands act as a differentiator, giving companies a competitive edge,
most of the retailers have adopted to come with private label brand strategy.
References:
Ailawadi, K.L., and Harlam, B. (2004) .An empirical analysis of the determinants of retail
margins: the role of store-brand share: Journal of Marketing, 68(1):147-65.
Ailawadi, K.L., Neslin, S.A., and Gedenk, K. (2001) .Pursuing the value-conscious
consumer: store brands versus national brand promotions: Journal of Marketing, 65 (1):7189.
Ballester, E.D., Esparallardo, M.H., and Orenjuela, A.R. (2014). Store image influences in
consumers’ perceptions of store brands: the moderating role of value consciousness:
European Journal of Marketing, 48(9/10):1850 – 1869.
528
Baltas, G. (1997) .Determinants of store brand choice: a behavioral analysis: The Journal of
Product and Brand Management, 6(5):315-324.
Cotterill, R.W., and Putsis, W.P. (2000) .Market share and price setting behavior for private
labels and national brands: Review of Industrial Organization, 17(1):17-39.
Cuneo, A., Lopez, P., and Yague M.J. (2012). Measuring Private Labels Brand Equity: A
Consumer Perspective: European Journal of Marketing, 46 (7/8) :952 -964.
Cunningham, I.C.M., Hardy, A.P., and Imperia, G. (1982) .Generic brands versus national
brands and store brands: Journal of Advertising Research, 22 :25-32.
Dhar, S.K., and Hoch, S.J. (1998) .Why store brand penetration varies by retailer: Marketing
Science,16(3):208-27.
Diallo, M.F., Burt, S., Sparks, L. (2015) .The influence of image and consumer factors on
store brand choice in the Brazilian market: European Business Review, 5 (27): 495 – 512.
Diallo, M.F., Chandon, JL., Cliquet, G., and Philippe, J. (2013) .Factors influencing
consumer behavior towards store brands: evidence from the French market: International
Journal of Retail and Distribution Management, 41 (6): 422 – 441.
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Competitive Positioning Of Organised Apparel Retail Stores in
India: A Study Of Selected Apparel Retailers In National Capital
Region (NCR)
Arif Hasan1 Dr. Fayaz Ahmad Nika1
1
Research Scholar 2Associate Professor
Department of Management Studies, Central University of Kashmir ,
Srinagar, India
Introduction
With opening of economy for Foreign Direct Investment (FDI) in the retail sector, there has been
a vast transformation from traditional to modern retailing in India. Many of the leading giant
foreign retailers entered into Indian organised retail market by making tie ups with domestic
business groups like Tesco with Tata Trent and others. Domestic retail players like Reliance
industries and Mahindra retail group are forging ahead retail business after Big Bazaar (Future
Group), Pantaloon (Aditya Birla Group) and others. Therefore, these stores require competing
with rivals to distinguish themselves from others. Researchers try to find out apparel retail
players position in the light of store attributes, apparel attributes and their own psychographic
differences.
Research Gap and Research Problem
It is generally recognised in the literature that Indian consumers appear to be distinctively
different from western consumers in their perception, which has its own unique set of cultural
differences & retail dimensions(Mehta et al 2000; Siu and Cheung, 2001; Kim and Jin, 2002;
Ellis et al 2003). In the existing literature, it is evident that earlier studies have been unidimensional and have focused only on one aspect i.e. either store attributes or product (apparel)
attributes or individual (psychographic) differences to determine the store positioning; alignment
of all these three factors. Linkages (alignment) among these attributes are still not explored so far
in facilitating for positioning of retail store.
530
Further, there is a lack of validity and representation of RSQS in apparel stores. Items and
dimensions have not been addressed as per the Indian readymade apparel retail practices. Hence,
further investigation is undertaken through modified RSQS based on additional store as well as
apparels attributes, which were not used earlier by researchers. ‘Attribute-based perceptual
mapping’ technique has been used in various sectors, but inadequate research has been conducted
in perceptual mapping of shoppers towards organized multi-brand apparel retail stores. Hence
this study intended to map different apparel retailers using perceptual map from customer
perspective.
Hypotheses
Ho1: Store attribute dimensions (a) Store layout & ambiences; (b) Sales personnel services of
store; (c) Store promotional offers & discounts; (d) Auxiliary (supportive) services of store; (e)
Convenience facilities; (f) Problem solving and return policies; (g) Reliability do not positively
influence apparel store positioning.
Ho2: Product attribute dimensions (a) Physical comforts; (b) Exotic appearance and appeal; (c)
Representation and functionality of apparels do not positively influence apparel store
positioning.
Ho3: Individual psychographic characteristics(a) Personal values; (b) lifestyles; (c) fashion
involvements do not positively influence apparel store positioning.
The Proposed Research Framework (Model)
FIGURE 1: Proposed Research Framework
531
Objectives of the Study
1. To assess the effect of store attributes on select apparel retail store positioning.
2. To assess the effect of apparel attributes on select apparel retail store positioning.
3. To assess the effect of individual psychographic characteristics on select apparel retail store
positioning.
4. To suggest appropriate measures to organised apparel retailers for developing competitive
advantage and positioning in the market.
Research Methodology
Research Design
Considering the nature of the study, the design is descriptive. The descriptive study finds out the
effects of determinants on store positioning from shoppers perspective. The study type is crosssectional ‘one-shot’ study.
Sampling Design& Data Collection
The area of study was National Capital Region (NCR) and the respondents are within the age
group of 18-65 years. Cluster followed by systematic sampling was employed for data collection.
The primary sample units (PSU) were the six select apparel stores and the secondary sample units
532
(SSU) were the active shoppers of the stores. Researcher approached 600 respondents. The data
was thereafter collected and only 486 responses were found fit for analysis.
Researcher intercepted every tenth shopper (irrespective to their age, sex & socio-economic
class) who came out from the exit door of the selected apparel retail stores situated in malls or
independent (standalone) stores and thus minimize the non-sampling errors.
In addition to the primary sources, secondary data for the study has been collected from online
databases, retail consultancy reports and other publications. Self-designed structured undisguised
questionnaire has been employed to obtain information from shoppers of selected stores of NCR.
Data Analysis and Results
Researchers specify latent construct inter-relationship among the dependent (SP) and independent
(SA, PA & IC) constructs. Researchers tested measurement model results and revealed an
excellent fit between the data and the model through structural equation modeling (SEM).
Researchers estimated the structural model with the same sample yielding the model fit results.
FIGURE-1: Structural Model Showing Empirical relationships between the three Predictor
Dimensions and the Store Positioning
533
Model Fit Indices
Chi-square χ2=1.699
GFI=0.825, AGFI=0.811, CFI 0.938, NFI 0.863
RMSEA 0.038; RMR-0.034
TLI 0.935; PGFI 0.765; PNFI 0.825
Structural Equations
The value for store positioning (ŷsp) has been estimated using the equation:
Ŷsp= .0.07 (SA) + 0.78 (PA) + 0.21 (IC)
From the above it can be seen that, one unit change in SA increases by 0.07 times the level of
store position and one unit change in PA increases by 0.78 times the level of store position.
Similarly, one unit change in individual characteristics increases by 0.21 times the level of
position.
534
Hypotheses Testing Results
After satisfactory validation of measurement model and structural model, Hypotheses testing
results outcome to gauge positioning and its determinants using various tools and techniques has
been carried out and is presented below:
TABLE 1: Reporting Hypotheses Testing Results
Hypotheses Statement
(Consequences of Predictors)
Ho1:Store attributes do not positively
influence apparel retail store positioning
Ho1a:Convenience facilities do not influence
store positioning
Ho1b:Sales personnel services do not influence
store positioning.
Ho1c:Store layout & ambiences do not
influence store positioning.
Ho1d:Auxiliary (supportive) services of store
do not influence store positioning.
Ho1e:Store promotional offers & discounts do
not influence store positioning
Ho1f:Problem solving and return policiesdo not
influences store positioning
Ho1g:Reliability does not influences store
positioning
Ho2:Apparel attributes do not positively
influence apparel retail store positioning
Ho2a:Representation and Functionality of
apparels do not influence store positioning
Ho2b:Exotic appearance (self-image criteria) of
apparels do not influence store positioning
Ho2c:Physicalcomforts of apparels do not
influence store positioning
Ho3:Individual psychographic characteristics
do not positively influence apparel retail store
positioning
Ho3a:Fashion involvement of an individual do
Loading
Estimates
β
value
(Standardiz p-value
ed
Coefficient
estimates)
Results
(H0)
0.07
0.241
Accepted
.271
0.003
Rejected
.122
0.000
Rejected
.126
0.006
Rejected
.078
0.094
Accepted
.050
0.298
Accepted
.117
0.005
Rejected
.015
0.727
Accepted
0.78
0.000
Rejected
0.383
0.000
Rejected
0.396
0.000
Rejected
0.264
0.000
Rejected
0.21
0.025
Rejected
0.653
0.000
Rejected
535
not influence store positioning
Ho3b:Personal values of an individual do not
0.075
influence store positioning
Ho3c:Lifestyle of an individual do not influence
0.117
store positioning
0.022
Rejected
0.001
Rejected
Implications of the Study
The study reveals that the three determinants (SA, PA & IC) have an influence on store
positioning. Out of these three, two determinants (PA & IC) show significant influence on store
positioning and also critical for the growth of organised apparel store. While, store attributes on
the whole do not positively influence the store positioning.
Under dimension wise affect, it was found that those stores do well, who offer Convenience
Facilities; Store Layout & Ambiences; Sales Personnel Services; Problem Solving and Return
Policy in their stores. While other three constructs of SA viz. Auxiliary services; Promotional
offers and Reliability do not positively influence store positioning. Components of apparel
attribute (representation and functionality; exotic appearance-self-image criteria and physical
comfort in apparels) are also significant in the store positioning. Psychographic characteristics
dimension viz. personal values, lifestyle and fashion involvement are also significant in the store
positioning. The following suggestions are made in the light of the present study, not only for
deeper performance but also for shifting from the current position, to attain more market share.
•
All Indian retailers in apparel need to understand the perceptual mapping of their stores
through conduct of proper survey so that they can plan their strategy accordingly
•
The Indian retailers shall expand the product range to attract the buyers who visit the
stores annually and bi-annually.
•
Retailers must distinct themselves with unique merchandise through inclusion of PBs or
confined NBs that a retailer sells exclusively.
•
Resolving customer grievances with liberal return policy
•
Need to track shoppers past purchases to gauge their taste and recommended products. It
may assist retailers that what they could possibly buy next.
536
Limitations & Directions of Future Research
1. The study has geographical limitations as it covers only NCR (Delhi, Faridabad, Noida
and Gurgaon and Ghaziabad). More valid generalizations can be made if the universe is
expanded.
2. The study is limited to examining of three constructs i.e, store attributes, apparel attributes
and individual characteristics. Other variables can be included in further research.
3. This study is limited to only one product category (i.e. ready-to-wear apparel). Further
study might investigate additional categories, such as house wares, appliances, cosmetics,
and accessories.
4. Due to constraints of time and resources, this study is confined to specific six apparel
retail store chain stores only. Future research may broad-base the coverage of stores.
5. The study covered only brick-and-mortar organised retail chain stores. Therefore, the
results might not apply to other format such as non-store (online) retailing.
6. The respondents included only adult shoppers within the age group of 18 to 65; more
diverse age groups could be used in future studies.
References:
Dabholkar, P.A., Thorpe, D.I.&Rentz, J.O. (1996). A Measure of Service Quality for Retail
Stores: Scale Development and Validation, Journal of Academy of Marketing Science,Vol. 24,
No. 1, pp.3-16.
Ellis, J. H., Williams, D. R., &Zuo, Y. (2003). Cross-cultural influences on service quality in
Chinese retailing: A comparative study of local and international supermarkets in China. Asian
Business & Management, 2(2), 205-221.
Field, A. (2009). Discovering Statistics using SPSS. Sage: London.
Fowler, D. (1999). The attributes sought in sports apparel: A ranking. Journal of Marketing
Theory and Practice, 7(4), 81-88.
Hair, J. F. J., Bush, R. P., &Ortinau, D. J. (2000). Marketing research: A practical approach for
the new millennium. Singapore: McGraw-Hill.
537
Kaul, S. (2007). Measuring retail service quality: examining applicability of international
research perspectives in India. Vikalpa, 32(1), 15.
Kim, S., & Jin, B. (2002), Validating the retail service quality scale for U.S. and Korean
customers of discount stores, Journal of Services Marketing, 16 (2/3), 223-237.
Malhotra, N. & Dash, S.B. (2011) Marketing Research : An Applied Orientation (English) 6th
Edition
Mehta, S.C., Lalwani, A.K. & Han, S.L. (2000). Service quality in retailing: relative efficiency of
alternative
Siu, N. Y., &Tak-Hing Cheung, J. (2001). A measure of retail service quality. Marketing
Intelligence & Planning, 19(2), 88-96.
538
Risk Mitigation Strategy Used by Ecommerce Companies in
Emerging Economies: A Conceptual Model
Deepak Ranjan
Doctoral Student, Indian Institute of Management, Indore
Introduction:
In almost last five decades invent of the internet has brought revolutionary change in every
field. Internet has brought flow of information, news, financial, academic material,
transaction of goods etc. very easy. Also, it has permitted buyers to buy essentially anything
whenever, while giving makers easy to use direct access to an extensive wide range of
markets. In a very short period, it has become difficult for most of us to imagine a world
without instant and continuous access to the Internet.
The development of Internet marketing has inspired marketing researchers to look at how
traditional consumer behaviour theories and models are applied in the Internet context. There
are various risks associated which consumer perceived while doing online purchase. Despite
being various risk associated in online purchase over offline purchase, online purchase is
growing at a very faster rate. There are numerous players who are added in this industry year
on year basis. Nowadays almost all products are available online which one can think off.
Access to smart phone to a huge pool of customer has given a boost to this industry.
Research Gap and Research Problem:
Since the start of the Ecommerce, reliability of the websites is consistent and major issue that
will continue further. When a customer make a purchase online and don’t trust the website,
the buyer perceived several types of risks. There are lot of study which describes various
types of risk associated with online purchase but there are some unique features which are
associated to emerging economies which is a gap in the literature. To the best of my
knowledge there is no study which focuses on online purchase from Ecommerce websites in
emerging economies.
Objectives of the study:
The objective of this study, firstly is to develop a conceptual model through which customer
mitigate risk and convert their intention to purchase online. Secondly, to find out certain
unique features and policies which Ecommerce websites are using in emerging economies.
539
Research Methodology:
We use the extant literature in forming and supporting six propositions leading to the
conceptual model which reduces various perceived risk and increases intention to online
purchase. We use several concepts from the literature like risk, perceived risk, brand image
and intention to online purchase.
Though there are several definition which have been given by various author but initially,
Bauer (1960) described perceived risk as undesirable repercussion of ambiguity whenever
someone is going to make any purchase decision. Perceived risk means one’s subjective
conviction about potentially negative outcome from his/her decision. Cox and Rich studies
were related to shopping mode suggested that perceived risk is impacted not only by what
product is purchased but also by how the same is purchased. The past studies presumed that
buyers see all the more buying danger while purchasing a thing by phone or mail inventory
than when purchasing in a store or from a sales representative.
Propositions 1: Perceived risk is affected by what is purchased and how it is purchased.
From past studies it is very clear that there is very little agreement between the authors
regarding the strength of relationship between risk and purchase intentions of a consumer.
Among various types of perceived risk, product and financial risk has shown strong negative
influence on purchase intention in online shopping (Bhatnagar and Ghose 2004). Though
these two types of perceived risk was identified and supported by traditional channel but
privacy risk had been neglected in traditional channel. It has also been supported by other
authors that online shoppers perceive significant risk in sharing their credit card and personal
information while making a online purchase. Shopper feels that his personal information or
credit card information can be misused. Hence this study is focussing on these three major
categories of perceived risk and its negative influence on purchase decision of a consumer.
Perceived risk and purchase intention are negatively correlated.
Proposition 2: Financial Risk, Product Risk and Privacy Risk constitute Perceived risk
and impact negatively on online purchase.
Perceived risk is having strong relationship with the details or information sought by the
consumer before making online purchase. Especially, individual elements like personality
540
and self regard of a person and shopping inclination or experience of shopping online impact
what information will he seek and how he will use those information to make purchase (Cox
et.al 1964). Generally before making purchase consumer asks information on a product from
some known relatives or friends whom they trust on.
Proposition 3a: Consumer seeks information or relies on existing information available to
reduce risk
In spite of the fact that there was hardly any reasonable proof that if the risk perceived is high
then it prompted for exploring more information in online shopping. Consumers’ generally
seek information before making online purchase which is considered to be important risk
mitigation strategies to reduce dilemma, and also buyers consider on prior information
available about the product in before deciding to purchase a product. Online shoppers who
perceive higher risk are more likely to search for information, but less likely to purchase
products online”. Online customers with good positive self-perception might see higher
perceived risk and will probably look for data both online and offline, yet more averse to buy
on the online. Customers who are not very concerned about their positive image may have
very less involvement in making fashionable product purchase. He will be also least
concerned with overall look and will probably buy attire through non-store shopping channels
(Rosa et al., 2006). Consumers are faced with different sorts of uncertainty or loss,
particularly making purchase at home. Subsequently they attempt to take care of various
issues by obtaining and analysing of information of the product and additionally using
different risk mitigation strategies to reduce risk before making any decision to purchase
online. Buyers also uses money back guarantee to mitigate their risk for online purchase.
Various companies provide assurance of their product to their customer by providing moneyback guarantee if they don’t like their product they can get their money back on returning
their product.
Proposition 3b: Consumer use money-back guarantee to mitigate risk.
However, risk mitigation strategies generally aim to decrease the component of unpredictable
risk perceived by the consumer alternatively to bypass the negative outcome that one can face
while making an online purchase. Generally, while customer making a repetitive purchase
customer chose well known brand to avoid any adverse outcome and it also give customer
541
confidence in repeated selection of the product or brand (Sheth & Venkatesan, 1968). In this
process of repetitive purchase after some time customer tend to seek less information about a
product whereas brand loyalty increases. There are five factors which can contribute in
mitigating risk. They are basically brand and store image, government testing, free sample,
and word of mouth.
Proposition 3c: Consumer use Brand loyalty as risk mitigation strategy.
Touching and feeling the product as well as personal experience of the product also reduces
risk (Hawes et al. 1986). There are some studies in online shopping that have addressed the
effectiveness of risk reduction strategies. Cases (2002) found security of payment, return
back policy and exchange of the product were the most useful in mitigating risk while
purchasing a jacket online, proceeding by the likelihood of reviewing the jacket on internet.
Risk mitigation strategies for online shopping might focus more on enhancing tangibility of
product or service in the restricted online shopping environment (Eggert, 2006; Cases, 2002).
In spite of the fact that relative impact of intangibility on performance risks are weaker than
online shopping concerns (Eggert, 2006), virtual experience of transacting product online
increases tangibility of a product is turning out to be vital as an online risk reliever along with
direct experience offered by multi-channel shopping experiences (Cases, 2002). Most of the
Indian companies have understood the sentiments of the Indian market due to which they are
giving cash on delivery facility to the Indian consumers. Cash on delivery facility gives the
customer advantage of touching and seeing the product first before making payment for the
same. So, cash on delivery facility reduces the intangibility experience of the customer and
facilitating the need of touch and feel of the product. Customers also have the option of
returning or declining the product if they don’t like the product before making payment in
cash. Companies have also started giving facility to the customer to make payment through
debit or credit card. This facilitate customer of not carrying cash and make payment through
card.
Proposition 3d: Customer uses Cash on Delivery as risk mitigation strategy
Conceptual Model: Types of Risk leading to Perceived Risk and various Risk Mitigation
Strategy used by customer to convert their intention to Purchase.
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The above conceptual model clearly states various types of risk perceived by the customer.
And different types of risk mitigation strategy used by customer to reduce the risk. Finally all
these risk mitigation strategy used by customer to convert their intention to purchase online.
Nowadays most of the Indian ecommerce companies are also using Cash on Delivery option
also as risk mitigation strategy. To the best of our knowledge no studies has been discussed
so far about Cash on Delivery (COD) as risk mitigation strategy. But most of the Indian
Ecommerce website like Amazon, Snapdeal, Flipcart, Paytm etc are using COD so that
customer may have trust on the product. Many companies have also given too much leverage
on return policy like for garments companies are giving 30 days return policy. The earlier
studies in online apparel shopping has neglected recently developing risk mitigation
activities, for example, Cash on Delivery, virtual product encounter and various channel
shopping knowledge. Little is known about how individuals’ risk perceptions and risk
reduction behaviours in context with virtual product experiences and direct experiences
through multi-channels differ. This is first of its kind of study which deals with certain
policies like COD, Product Return Policy as risk mitigation strategy which is used by
companies in Emerging economies.
Implications of the Study:
This conceptual model can be used by the managers of Ecommerce companies to increase
their online purchase. Also Ecommerce companies from other than emerging economies can
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learn lesson and utilize certain features like COD to reduce perceived risk by their
consumers. COD can be one of the major risk mitigating strategies used by the customer that
can drastically increase sales of the Ecommerce companies as this also reduces intangibility
experience of the consumer. All the propositions can be empirically tested as part of future
studies.
References
Bauer, R. A. (1960). Consumer behavior as risk taking. Dynamic marketing for a changing
world, 398.
Bhatnagar, A., & Ghose, S. (2004). Segmenting consumers based on the benefits and risks of
Internet shopping. Journal of Business Research, 57(12), 1352-1360.
Cases, A. S. (2002). Perceived risk and risk-reduction strategies in Internet shopping. The
International Review of Retail, Distribution and Consumer Research, 12(4), 375-394
Cox, D. F., & Rich, S. U. (1964). Perceived risk and consumer decision-making: The case of
telephone shopping. Journal of marketing research, 32-39.
Eggert, A. (2006). Intangibility and perceived risk in online environments. Journal of
Marketing Management, 22(5/6), 553-572.
Hawes, J., & Lumpkin, J. (1986). Perceived risk and the selection of a retail patronage mode.
Journal of the Academy of Marketing Sciences, 14, 37-42
Li, H., Daugherty, T., & Biocca, F. (2003). The role of virtual experience in consumer
learning. Journal of Consumer Psychology, 13(4), 395-407.
Rosa, J. A., Garbarino, E. C., & Malter, A. J. (2006). Keeping the body in mind: The
influence of body esteem and body boundary aberration on consumer beliefs and purchase
intentions. Journal of Consumer Psychology, 16(1), 79-91
Sheth, J. N., & Venkatesan, M. (1968). Risk-reduction process in repetitive consumer
behavior. Journal o f Marketing Research, 5(3), 307-310.
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Consultation with Retail Salesperson: Influence of Subjective
Knowledge and Purchase Pal
Garima Saxena1 Sanjeev Varshney1
1
XLRI, Xavier School of Management, C.H Area (East), Post Box No. 222, Jamshedpur,
Jharkhand (India) 831001.
Introduction:
Customers‟ openness to retail salesperson‟s consultation has been found to be influenced by
various individual and situational factors (Haas & Kenning, 2014). One of the common
shopping situations is the presence of a „purchase pal‟ (Bell, 1967; Woodside and Sims,
1976) or „shopping pal‟ (Chebat, Haj-Salem, & Oliveira, 2014) in customer‟s shopping trip.
The term “purchase pal” refers to “individuals who accompany buyers on their shopping trips
in order to assist them with their on-site purchase decision” (Kiecker & Hartman, 1994).
Purchase pals can vary from acquaintances, colleagues, friends or family members who
become customer‟s companion for shopping (Bell, 1967). Purchase pals provide both
functional and socio-psychological benefits to customers during shopping process (Hart &
Dale, 2014; Kiecker & Hartman, 1994) which are also the benefits salespersons offer to
customers (Lindsey-Mullikin & Munger, 2011). Inspite of such an overlap in roles, existing
research has not examined the effect purchase pal on customer‟s preference for salesperson‟s
involvement in their shopping process.
Based on the extant literature, this study hypothesised that the effect of salesperson‟s efforts
to involve in customer‟s shopping-process is likely to vary with an individual‟s product
knowledge and presence of a purchase pal. A significant interactional effect of salesperson‟s
efforts, customer‟s product knowledge and purchase situation of shopping with a friend (or
alone) was expected and thereafter empirically tested.
Objectives of the Study:
This study attempts to explore the effect of customers‟ product knowledge and presence of a
purchase pal on their feelings about salesperson‟s involvement and intention to consult
salesperson. The research questions dealt by this study were –
545
a) How does the influence of salesperson‟s efforts on customers‟ feelings about
salesperson‟s involvement varies with customers‟ product knowledge and presence of
purchase pal?
b) How does the influence of salesperson‟s efforts on customers‟ intention to consult varies
with customers‟ product knowledge and presence of purchase pal?
Based on these objectives, the following hypotheses were formulated –
Hypothesis 1: Effect of salesperson‟s efforts to involve in shopping process on customers‟
feelings about salesperson‟s involvement is likely to depend on their subjective knowledge.
Hypothesis 2: Effect of salesperson‟s efforts to involve in shopping process on customers‟
intention to consult salesperson is likely to depend on their subjective knowledge.
Hypothesis 3: Effect of salesperson‟s efforts to involve in customers‟ shopping process on
their feelings about salesperson‟s involvement is likely to depend on the presence (or
absence) of purchase pal.
Hypothesis 4: Effect of salesperson‟s efforts to involve in shopping process on customers‟
intention to consult salesperson is likely to depend on the presence (or absence) of purchase
pal.
Research Methodology:
This study attempted to test causal effect of salesperson‟s efforts to involve in shopping
process, customer‟s subjective knowledge and presence of purchase pal on customer‟s
feelings about salesperson‟s involvement and intention to consult salesperson. Since, causal
relationships are best tested through experimental design (Malhotra 2008), a factorial
experiment with between-subjects design was employed in this study. Post-graduate
management students (sample size = 210) voluntarily participated in the experiment by
completing an online questionnaire sent to them through e-mails.
The study comprised of three independent variables – a) Salesperson‟s efforts to involve in
shopping process; b) purchase pal; and c) subjective knowledge whose effect on customer‟s
feelings about salesperson‟s involvement and intention to consult was tested. The experiment
was based on a 2 X 2 factorial design where two levels of salesperson‟s efforts to involve
(High/Low) and presence (or absence) of purchase pal were manipulated through design of
the scenarios presented before the respondents. Subjective knowledge was statistically
measured through an established scale (Flynn & Goldsmith, 1999) and later scores of the
546
respondents were median split into high or low product knowledge groups. Individual
scenarios were designed for each treatment group and each respondent received only one of
the four scenarios followed by a questionnaire measuring their feelings about salesperson‟s
involvement and their intention to consult the salesperson given the shopping scenario.
Literature review and initial exploratory studies indicated that product categories sold in retail
stores may significantly vary in the level of salesperson‟s involvement inherently required in
their selling process. In order to identify a product category for which customers do not have
an especially high or an especially low pre-conceived decision to involve salesperson, a
survey (sample size = 150) was conducted. The results of this survey confirmed a significant
difference in the level of salesperson‟s involvement in shopping process between various
retail products (clothes, watches, shoes, mobile phones, laptop/tablet, camera, electronic
appliances). Mobile phones category was found to have a medium level of customer‟s
likelihood to involve salesperson in their shopping process and hence was used in the design
of the scenarios.
Data Analysis & Results:
In order to analyse the data, ANOVA and ANCOVA techniques were applied after making
sure that the required assumptions were satisfactorily met. As hypothesised, a significant
interactional effect of salesperson‟s efforts to involve and presence of purchase pal on
customer‟s feelings about salesperson‟s involvement (F = 4.908, p = 0.028) and intention to
consult salesperson was found (F = 5.480, p = 0.020). Similarly, the effect of salesperson‟s
efforts on customer‟s feelings was also found to depend on customer‟s subjective knowledge
(F = 11.798, p = 0.001). However, only a marginally significant interactional effect of
salesperson‟s efforts and customer‟s subjective knowledge was found on customer‟s intention
to consult the salesperson (F = 3.322, p = 0.070). Hence, the results indicate that:
a) When shopping alone, customers with high subjective knowledge were found to strongly
prefer salesperson‟s low efforts to involve in their shopping process. When shopping with
a friend, they feel significantly more positive about salesperson‟s high involvement than
when shopping alone.
b) Whether shopping alone or with a friend, customers with low subjective knowledge feel
more positive about salesperson‟s high efforts to involve. However, when shopping with
a friend these customers feel significantly more positive about salesperson‟s high efforts.
547
Their feelings are lowest with salesperson‟s low efforts to involve when they are
shopping with a friend.
c) Presence of a friend in shopping significantly increases customers‟ intention to consult
salesperson. Salesperson‟s high efforts to involve in shopping process when customer is
accompanied by a friend are found to result in highest customer‟s intention to consult the
salesperson.
Implications of the Study:
The findings of this study brings to attention instances where customers may feel positive
about salesperson‟s involvement but still may not have a high intention to consult the
salesperson. In this way, it draws an important distinction between customer‟s feelings about
salesperson‟s involvement and customer‟s intention to consult salesperson and highlights the
difference in salesperson‟s role as an information provider versus a genuine advisor.
The study suggests that retail salespersons should wait for customers to indicate need for their
help because when they find customers shopping alone. On the contrary, salesperson should
initiate consultation and maintain an active participation in customers‟ shopping process
when they are seen accompanied by a friend. Salesperson‟s passive role in such a situation
may significantly dampen customer‟s feelings and intention to consult.
References:
Bell, G. D. (1967). Self-Confidence and persuasion in car buying. Journal of Marketing
Research, 4(1), 46–52.
Chebat, J.-C., Haj-Salem, N., & Oliveira, S. (2014). Why shopping pals make malls
different? Journal of Retailing and Consumer Services, 21(2), 77–85.
doi:10.1016/j.jretconser.2013.10.002
Flynn, L. R., & Goldsmith, R. E. (1999). A Short, Reliable Measure of Subjective
Knowledge. Journal of Business Research, 46(1), 57–66. doi:10.1016/S0148-2963(98)000575
Haas, A., & Kenning, P. (2014). Utilitarian and hedonic motivators of shoppers‟ decision to
consult
with
salespeople.
Journal
of
Retailing,
90(3),
428–441.
doi:10.1016/j.jretai.2014.05.003
Hart, P. M., & Dale, R. (2014). With or without you: The positive and negative influence of
retail companions. Journal of Retailing and Consumer Services, 21(5), 780–787.
doi:10.1016/j.jretconser.2014.06.004
Kiecker, P., & Hartman, C. L. (1994). Predicting Buyers ‟ Selection of Interpersonal
Sources : The Role of Strong Ties and Weak Ties. Advances in Consumer Research, 21, 464–
469.
Lindsey-Mullikin, J., & Munger, J. L. (2011). Companion Shoppers and the Consumer
548
Shopping
Experience.
Journal
doi:10.1080/15332667.2011.549385
of
Relationship
Marketing,
10(1),
7–27.
Malhotra, N. K. (2008). Marketing Research: An Applied Orientation, 5/e, Pearson Education
India.
Woodside, A. G., & Sims, J. T. (1976). Retail Sales Transactions and Customer “Purchase
Pal” Effects on Buying Behavior. Journal of Retailing, 52(3), 57–95.
549
Influence of Retailer’s Promotion on Shopping Motive of Hedonic
Shoppers: A Study
Pratibha Rai, Kabir, Dr. (Mrs.) B.B. Pandey
1
Guru Ghasidas Vishwavidyalaya,
(A Central University)
Introduction:
Shopping includes both hedonic and utilitarian aspects like availability of product, price,
quality, exciting and pleasurable experience (Dube and Morin, 2001). Promotional stimuli
like discounts, music, design, colour and loyalty programs generate a positive feeling towards
store. Tauber’s (1972) focused that consumers do shopping for fulfilling their personal and
social motives. Westbrook and Black (1985) suggested that there are mainly three reasons
behind shopping: to get a product, to get both a product and satisfaction with non-productrelated needs, or to attain goals not related to product procurement. The store visit happens
not only for purchasing of the required product but also for getting other values of shopping
like recreation, information about different products, socialisation, self pleasure, etc. (Sheth et
al. 1999; Babin et al.,1994). Arnold and Reynolds (2003) revealed that consumers also shop
to fulfil their hedonic, adventure-seeking motives. It can be observed from the above
statements that shopping is acquisition of good and services but at the same time it includes
factors like gathering of information, social activity, leisure time, fun making activity from
the point of view of shoppers and such shoppers are known as “Hedonic Shoppers” in retail
environment. This study examined influence of promotions offered by apparel retailers on
shopping motive of hedonic shoppers. So the retailer promotions is emerges as an important
factor of this study and it is quite justifiable to look whether these promotions actually
influence shopping behaviour of shoppers and converts the shoppers into actual buyers or not.
Sometime people go on shopping without any intention to buy anything at all. Utilitarian
motive of shopping provoke to obtain desired goods and services, but hedonic motives of
shopping wants some excitement and pleasure during shopping. Retailers need to understand
about the different shopping motive because motive affects how consumers evaluate different
aspects of their retail experience such as environment, promotional strategies etc.
550
Research Gap and Research Problem:
There are numerous studies available in the literature which focuses on evaluating impact of
promotion mix on the purchase decision of the customers. The main objective of these studies
is to know how much the purchase decision of unorganized and organized retail customers is
inspired by the various promotion tools like advertising, personal selling, sales promotion and
public relation etc. However current study is amongst the very few studies of its type which
focus on assessing the impact of promotions offered by apparel retailers on the shopping
motive of hedonic shoppers specifically. Another fact behind choosing the hedonic shopper is
that this type of shopper doesshopping for not just get acquired needed goods and services
butthey also want to get enjoyment, leisure, quality time while shopping. But by influencing
retailer’s different stimuli like promotions and pleasing atmosphere these window shoppers
turns into actual buyers.
The major research problem of this paper is to know whether there is any significant
relationship exists between the retailer’s promotion and shopping motive of hedonic
shoppers, and to know the preference level of shoppers towards these promotional schemes.
Objectives of the study:
We have conducted this study to meet following major objective:
1. To assess the influence promotions offered by apparel retailers on shopping motive of
hedonic shoppers.
2. To identify the preference level of shoppers towards different promotional schemes of
apparel retailers.
Research Methodology:
Research Design: A Research Design is a framework or blueprint of research work. This
study involves both Exploratory and Descriptive research design to fulfil objective of the
research.
Sampling: The sampling process consists of following steps:
•
Population: All the shoppers visited apparel retail outlets in shopping mallsmake the
population for the research.
•
Sampling frame: Inthis study sampling frame is little blurred because a shopping
mall can invite different customers from different city. So there is no concrete
information available about demographic of shoppers visiting shopping mall. So
broadly the apparels retail outlets in shopping malls defined as the sampling frame.
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•
Sampling unit: sampling unit is shopper, who comes to the retail outlet to shop.
•
Sample technique: Quota sampling method was used to target the customers.
•
Sample size: The research questionnaire filled by 300 respondents in various
shopping malls in Raipur.
Instrument Design: Questionnaire includes measures for age, gender, income level,
education, and marital status. Objective was to measure the influence of promotions offered
by apparel retailers in mall on shopping motive of hedonic shoppers. Different promotional
schemes are the independent variables and shopping motive (motivational construct) of
hedonic shoppers was dependent variable in this study. Item was identifying to measure the
attitude of shoppers towards these promotional schemes with the help of exploratory survey
and some item were drawn from existing literature. The items included retailer’spromotional
strategies like discount, loyalty program and visual merchandising. For measuring shopping
motive of hedonic shoppers, shopping values scales develop by Babin et al. (1994) were
used. This scale is used in this study because it has been used and validated in several studies.
So it is assumed that this scale will provide consistent result in this particular context also.
Construct validity and reliability: factor analysis using principal component analysis with
varimax rotation has been used for evaluating construct validity of instrument. In order to
measure reliability of instrument cronbach’s alpha has been used which show internal
consistency of scales.
Data collection: This study includes both primary and secondary data. The primary data for
the study collected with the help of a structured questionnaire by intercepting consumers at
exit of apparel outlets in shopping malls in capital (Raipur) of Chhattisgarh. The researcher
used the available secondary data in research journal, books, press release, newspapers and
websites pertaining to the research topic.
Data analysis and Results:
Demographic profile of respondent like age, gender, income level, education, and marital
status has been describe with the help of various graph and charts.Pearson correlations were
calculated to measure the correlations between four variables: shopping motive of hedonic
shoppers, discounts, Visual merchandising and loyalty program. The hypothesized
relationship between independent factors and dependent factor has been measured with the
help of multiple regression analysis.
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The results depict that shopping motive of hedonic shoppers is influenced by various
promotions offered by apparel retailers.
Hedonic shopper mostly influence by visual
merchandising and appeal of the store. The result pointed out that discount is the second
factor that significantly influenced hedonic shoppers. Results also confirmed that hedonic
shoppers give less importance to loyalty program of retailers. In conclusion it has been
confirmed in this study that promotional offers motivate and attract hedonic shoppers towards
the store and help in conversion of window shoppers into actual buyers.
Implications of the Study:
The finding of this study has added relevant knowledge in literature related to apparel
retailer’s promotion. This research explains the association of apparel retailer’s promotion
and shopping motive of hedonic shoppers. This finding can be helpful for retailers in
designing promotional strategies according to preferences of hedonic shoppers. The finding
of study proved to be helpful in devising promotional strategy as it is evident from the study
that retailer’s promotion actually influences the shopping motive of shoppers. And it can also
be helpful in determining the proportion of promotional activities to be undertaken based on
the preferences of the shoppers.
Reference:
Westbrook, R. A. and Black, W. C. (1985), “A Motivation-Based Shopper Typology”,
Journal of Retailing, Vol. 61(1), pp. 78-103.
Tauber, E.M. (1972), “Why do people shop?”Journal of Marketing, Vol. 36, pp. 46-49.
Arnold, J. and Reynolds, K.E. (2003), “Hedonic Shopping Motivations”, Journal of
Retailing, Vol. 79(2), pp. 77-95.
Babin, B.J., Darden, W.R. and Griffin, M. (1994), “Work and/or fun: measuring hedonic and
utilitarian shopping value”, Journal of Consumer Research, 20 March, pp. 644-654.
Dube, L. and Morin, S. (2001), “Background music pleasure and store evaluation intensity
effects and psychological mechanisms”, Journal of Business Research, Vol. 54, pp. 107-113.
Sheth, J. N., Mittal, B. and Newman, B. I. (1999) Customer behavior. Consumer behavior
and beyond, (Fort Worth: Dryden Press).
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Impact of In-store Category Management on Operational Efficiency
of a Retail Store
Prof. Dr Ravindra M Chiplunkar (Ph.D)
Assistant Professor, Welingkar Institute of Management Development & Research, Matunga
(Central rly.), Mumbai - 400019
Introduction:
Category management has assumed tremendous importance in the current scenario, wherein one
can see the way the number of categories proliferating either due to the differing formats of the
stores – each format bringing in its specializations in certain categories; new fashions, trends,
usages affecting the buying trends of consumers; new additional product features or new product
launches or substitutes getting added to the product categories by vendors and manufacturers.
Every new addition to the category bringing in new excitement and challenges for the category
managers.
“Quite simply category management involves organizing and managing promotions,
merchandising and distribution activity around the way consumers view and buy a product”
(Pradhan 2007).
Another definition of Category Management is “the distributors’/suppliers’ process of managing
categories as strategic business units, producing enhanced business results by focusing on
delivering consumer value” (Partnering Group 1990).
Category management has emerged as a strategy to aid retailers in successfully competing in
each retail category to enhance shoppers’ loyalty and profitability (Sinha and Uniyal 2007).
As a cornerstone of efficient consumer response (ECR) initiatives, category management is
designed to help retailers with the right mix of products, at the right price, with the right
promotions, at the right time, and at the right place (Gruen and Shah 2000)
In our study we have particularly focused on in-store category management activities which are
part of the store merchandising management process, and assume an important role in the overall
554
category management process. It is the in-store category management which represents the front
face of the store’s effective and efficient management of a particular category. It is this aspect of
in-store category management which is in direct interface with consumers of a category, brings
into focus the store management’s effectiveness in handling the category in the desired manner.
The aspects of in-store category management that brings consumer into direct contact with the
effective and efficient handling of a category are covered through following actions or attributes
related with in-store category management:
Location of the category
Ease of finding the category
Ease of moving around the category
Category/product signages
Availability of the product desired
Availability of Range/ variety in the category
Shelf presentation appeal
Arrangement of products/brands on the shelf
Ease of locating right products/brands/ price range on the shelf
It is important for professional and practitioners to understand how important is the role of instore category management actions including price management on influencing store loyalty as
reflected through duration of relationship with the store and frequency of visit to the store for
purchase of a category, and also in its direct relationship or impact on consumer’s overall
purchasing experience of a category.
Once we have premised or able to determine the effect of in-store category management on
loyalty and shopping experience (which has been done through a separate research work) the
next immediate concern is to know its effect on operational efficiency and profitability.
While looking at operational efficiency we have particularly looked at the efficient management
of inventory, as it is reflected in maintaining number of days stock on the floor and the stock
turnover ratio. Though there are other areas to consider for efficient operation management like
day-to-day expenses, man-power, energy usage, logistics etc., our focus is on stock management
555
on the shop floor, because the experience of well managed store has been its efficient handling of
inventory. It is the management of inventory both at the front end and the back end that decides
the profitability and long-term survival of the store.
The profitability is determined on two important aspects, first by maintaining right quantity of
inventory at the store that meets the requirement of the customers; and secondly by charging
right margins on products in a category at the store. Margins are again dependent on the
operational efficiency of the store and more particularly on the inventory management. The gross
margins earned by a store on per square feet of selling space gives the indication if a store will be
profitable or not.
The gross margin percentage on annual sales which is calculated by the formula shown below:
Gross margin percentage = Gross margin earned during a given period ÷ Net sales for a given
period
This parameter is the first indicator of store’s profitability. But, every businessman knows, that
just knowing if a store is profitable or not is not enough. For him it is the return on investment
(ROI) is most crucial, because through this parameter he comes to know if his returns are higher
than the opportunity costs. In this paper we have researched on the two important determinants
of ROII, i.e. return on inventory investment which is closely related to ROI in a retailing
scenario. As it will be noticed that operational efficiency as reflected through stock turnover ratio
has direct impact on ROI as shown herebelow:
Gross margin Return on inventory investment (GMROI) = Gross margin ÷ Investment in
average stock value at retail price;
GMROI = (Gross Margin ÷ Sales) × (Sales ÷ Average stock value);
GMROI = Gross margin Percentage ×Stock turnover ratio.
Hence, from the above working we can clearly state that the return on investment or more
specifically GMROI from a retail store perspective is dependent on gross margin charged by a
store on its different products or categories and the stock turnovers achieved with respect to
every category stocked in the store.
556
Hence, by establishing relationship or influence of in-store category management on this
parameter we would be able to conclusively predict the performance of the store through the
assessment of its in-store category management actions. More precisely from our study we
would be able to determine the lead indicator role played by category management actions on
improving the financial performance of the store.
Research Gap and Research Problem:
In the Indian retail scenario while most companies in the organized trade do make use of
category management principles at varying degrees, there is no definite empirical study to check
on its impact on operational or financial goals.
As rightly emphasized by Patricia Waldron, retail industry director at Cognos (Newswire 2007),
"The need for integrated strategic merchandise planning is becoming increasingly important. ...
retailers need to accurately and swiftly respond to inevitable fluctuations in merchandise supply
and demand that can have a profound impact on cash flow and profitability as well as other
operational areas like marketing and store operations". Retailers looking at long term survival,
needs to be constantly on watch of their stock turnover ratio, number of days stock, gross
margin, and return on inventory investment. This has been the focus of the present study while
determining the operational relationship with the in-store activities of category management.
Objectives of the study:
To check if category management of retail store has any impact on its operational efficiency.
Research methodology:
The research is of a descriptive type with a conclusive research study, as it proposes to define the
effect of in-store category management attributes on operational efficiency of the store.
The primary data was collected through questionnaire survey. 103 interviews were conducted
among the retailers of snacks and beverages categories, belonging to different formats Hyperstores, Supermarkets, General stores, and Kirana. These stores were contacted across
different parts of Mumbai during Oct-Nov 2014.
557
Data analysis and results:
Based on the analyses of data by use of mean difference test, it was established that the stores
which were rated higher on in-store category management activities were found to have
relatively higher stock-turnover ratio and lower gross margin vis-à-vis the stores rated lower on
in-store category management activities.
Implications of the Study:
The research proves that effective category management is the result of operational efficiency of
a store as reflected through an effective management of inventory operation at the store vis-à-vis
the consumer needs, thereby having impact on operational cost, which is reflected through retail
margin. The stores with comparatively higher stock-turnover ratio and lower gross margin for a
category are guaranteed of a long-tern survival, with a reasonably good profitability, in the
present fierce competitive retail scenario.
References:
Easterling, C. R., Flottman E., Jernigan M., Marshall S. (2003). Merchandising Mathematics for
Retailing, prentice Hall, New Jersey, USA.
Gaur, V. (2001). Essays in retail operations management, University of Pennsylvania,
ProQuest, UMI Dissertations Publishing.
Goldratt M. E., Eshkoli, I. Brown J. (2010). Isn‟t It Obvious, Productivity & Quality Publishing
Pvt. Ltd., Madras, India.
Hernant,M. Andersson,T. Hilmola,O. (2007). Managing retail chain profitability based on local
competitive conditions: preliminary analysis, International Journal of Retail & Distribution
Management. 2007, Vol. 35 Issue 11, p912-935.
Howell, D. (2002). 12 hot issues facing mass retailing--4: Store operations--margins put squeeze
on in-store efficiency, DSN Retailing Today 41.10 (May 20, 2002): 26.
Leathers, D. (2007). Casing the New Cases, Refrigerated & Frozen Foods Retailer. Jun2007,
Vol. 5 Issue 5, p45-46.
Pande, S., Patel, G.N.(2013). Assessing cost efficiency of pharmacy retail stores and
identification of efficiency drivers, International Journal of Business Performance Management.
2013, Vol. 14 Issue 4, p368-385.
Pradhan S. (2007). “The Methods of Merchandise Procurement”, „Retailing Management – Text
and Cases‟, Tata Mcgraw Hill Publishing Co. Ltd., New Delhi.
558
Sinha P.K., and Uniyal D. (2007).„Category Management‟, Managing Retailing, Oxford
University Press, N.Delhi.
Vedamani, G. (2003). Retail Management, Jaico Publishing House, Mumbai.
Wal-Mart Stores, Inc.; (2008). Wal-Mart Introduces Its Most Energy Efficient U.S. Retail Store,
Anonymous. The Business of Global Warming (Mar 31, 2008): 133.
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An Implicit Assessment of Consumer Price Perception: Exploring
the Psychological Pricing Effects
1
1
Santosh Kumar 2Mrinalini Pandey
Research Scholar
2
Assistant Professor
Department of Management Studies, Indian Institute of Technology (ISM) Dhanbad, Jharkhand
(India) 826004
Introduction:
The contemporary retail market of the global world is highly competitive and cutthroat. It is very
challenging for an organization working in the retail business to sustain and grow with leveraged
sales and profitability. To sustain and grow with the augmented sales and profitability, the
organization needs capital, which is a form of money, the money comes from the price of the
products and the services made available in the market by the organization. Price is the amount
of money charged from the customers for the products and services they purchase and avail from
the organization. The price is one of the 4 Ps of the marketing mix which generates revenue for
the organization while the others, such as product, place and promotion are expenses. Therefore,
it becomes very crucial for the organization to price its products and services using the right
pricing strategy. There are many pricing strategies, being used by the organization for pricing its
products and services based on the category of the products and the services. Now, here it
becomes highly vital to use a pricing strategy which would be the best in the retail-market.
Psychological pricing is a pricing strategy based on the assumptions that certain prices have
psychological influences on the customers’ buying behavior, and this strategy is one of the best
pricing strategies, has been used by the retail organizations to sustain and grow with increasing
sales and profitability in this extremely stiff and cutthroat business world.
The propensity of using psychological pricing is ubiquitous in today’s retail markets.
Psychological pricing is the practice of structuring and presenting prices to plea to consumers’
emotions and to persuade their decision making (Pride and Ferrel, 1997). This study examined
theoretically the impact of price perception of psychological prices on the consumers’ decision
560
making, and also explored, why consumers purchase the products and avail the services, priced
using psychological prices (Ex., Rs.299; Rs.134.99; Rs.345.95; Rs.29.98, Rs.640). The
psychological prices are also called odd prices, charm prices, magic prices, irrational prices,
intuitive prices, or rule-of-thumb prices as cited in (Holdershaw, Gendall and Garland, 1997).
According to Dunne, Lusch and Carver (2014) odd pricing is the practice of setting retail prices
that end in the digits 5, 8, and 9 (Examples, $29.95, $49.98, or $9.99). The psychological prices
are caused because of the price points. The price points are the prices at which the demand for
products and services is assumed to stay relatively high. According to Hackl, Kummer and
Winter-Ebme (2014), price points are the values with special endings that are often practiced,
i.e., ending in zero (also referred to as ‘even-ending prices’) and 9-ending prices (also referred to
as ‘just below prices’).
The psychological prices are structured a little less than an encircled number, such as Rs.3.99;
Rs.5.95; Rs.2.97; Rs.2.98 or Rs.999. The consumers have a propensity to perceive psychological
prices as being extensively lower than they actually are. Thus, prices such as, Rs.2.99 and
Rs.4.98 are assumed to spend Rs.2.00 and Rs.4.00 instead of considering to spend Rs.3.00 and
Rs.5.00. This happens because the consumers read Rs.2.99 and Rs.4.98 from the left side and
therefore, they round off the price near to the left digit, and because of this Rs.2.99 and Rs.4.98
are perceived as Rs.2.00 and Rs.4.00. This technique of perceiving the prices is called the left
digit-effect (Thomas and Morwitz, 2005), also level-effect (Gaston-Breton 2011). The 9-ending
price is perceived as a signal of a price discount, which is called ‘price-image-effect’, also the
consumers view the 9-ending prices as a signal of inferior quality, which is known the qualityimage-effect as cited in (Fortin, Cleland and Jenkins 2008). The 9 ending prices may also
communicate an unfavorable impression relating to the quality of the products and the services.
The possible reason for this may be that a negative impression of the store and/or the product
quality may come as a result of the 9-ending’s low price image (Schindler and Kibarian, 2001).
Perception is the psychological processing of information received by the senses (Pasricha,
2007). The way a consumer perceives and responds to prices of the products, services and the
advertising information in common, largely depends on how the consumer perceives them
through the senses and how they are interpreted through the mind. When a consumer gets into a
retail outlet, the consumer perceives the price tag of the product and determines what action
561
should be taken and how to relate it to the perception. The price sensitive buyer would perceive
the product either cheap or expensive and this biased perception and interpretation would
determine whether the buyer would purchase the product or avail the service or not. The
consumers’ price perception is also a cause of impulse buying. Marketers often agree that
consumers evaluate price information vigorously. They decode prices using their previous
buying experiences, formal communications (advertising and sales promotions), informal
communications (friends, colleagues and family members), and point-of-purchase or the online
resources (Kotler and Keller, 2005). The theories of the consumer behavior recommends that
consumers’ understanding of the right hand digits of the prices influences the demand curves and
this is what prompting the retail organizations to exercise psychological pricing strategy for
pricing their products and services.
Research Gap and Research Problem:
There is a dearth of study on the consumers’ price perception in India which can explore the
psychological pricing effect on them. The current study is entirely qualitative by nature.
Objective of the Study:
This research was aimed to assess the consumer price perception by exploring psychological
pricing effect.
Research Methodology:
This paper is exploratory in nature and follows the process of document analysis. The document
analysis is a systematic way of reviewing or evaluating documents, both printed and electronic
(i.e., computer based and internet transmitted) materials. Like the other analytical methods in
qualitative research, the document analysis requires the data which are examined and interpreted
in order to extract meaning, gain understanding and develop empirical knowledge (Bowen, 2009,
P.27). More than 150 research articles, journals, chapter of books have been studied and from
them more than 100 have been found appropriate for this study.
562
Data analysis and results:
Findings show that consumers’ price perception is vital for using the psychological pricing. The
consumers’ price perception and the psychology behind it have a greater influence on the
consumers’ buying behavior. Reviewing of research studies, books, journals, articles, and
working papers found that Psychological pricing does lay impact on consumer attitude and
buying behavior. The study also found the procedures through which the consumers perceived
the psychologically priced products and services. The procedures are known as level-effects and
image-effects. Perception is the capability to see, hear or become aware of something through the
senses. Also, the way something is regarded, understood or interpreted. Customers’ perception is
their experiences of exterior stimulus in the environment and processed input from the senses.
Price perception is a marketing strategy used by organizations to increase sales. The consumer
price perception is the procedure of recognizing and interpreting the given price of the products
and the services. Two factors that shape consumers’ price perception are the perceived value of
the products and the services and price comparison with organizations offering similar products
and services. The perceived value of a product and a piece of service is the worth that the
product or the service has in the mind of the consumers. The consumers’ perceived value of the
product or the service affects the price that they are willing to pay for it. The important part is
that the consumers are not aware of the true cost of production of the product they purchase and
the service they avail. Human behavior is such that the people strive to maximize the value while
to minimize the cost. When a consumer perceives that the utility derived from a product would
exceed the cost of the product, and then there is a high probability that the consumer would
purchase that product even if it were not in his or her plan. The customers are heterogeneous in
their preferences for 9-ending prices, i.e., the women are more prone to 9-ending prices
(Bamgartner & Steiner, 2007).
Implications of the Study:
This study unveiled the mystery why the customers go for products and services priced using
psychological price, which could have implications for retail-organizations, pricing managers,
researchers and our understanding of how the customers make inferences from the given price
information. The study made the concept of psychological pricing understandable which can
563
help the organizations increase their sales and profitability and at the same time the consumers
can know why do they purchase the products and avail the services priced using psychological
pricing.
The study is exploratory in nature and is based on the review evidences of the research studies
done overseas, because there is a dearth of study regarding psychological pricing in Indian
context.
References:
Bowen, G.A. (2009). Document analysis as a qualitative research method. Qualitative Research
Journal, 9 (2), Pp. 27-40.
Baumgartner, B., & Steiner, W. J. (2007): Are consumers heterogeneous in their preferences for
odd and even prices? Findings from a choice-based conjoint study: International Journal of
Research in Marketing, 24 (4), 312-323.
Dune, P. M., Lusch, R. F., and carver, J. R., (2014) Retailing.8th edition. National Retail
Federation, Cengage Learning India Private Limited.
Fortin, D. R., Cleland, S., & Jenkins, A. (2008, January). Effects of advertised pricing on brand
image for an on-line retailer. In American Academy of Advertising. Conference. Proceedings
(Online) (p. 263). American Academy of Advertising.
Gaston-Breton, C. (2011). Consumer Preferences for 99-ending prices: the mediating role of
price consciousness.
Holdershaw, J., Gendall, P., & Garland, R., 1997. The widespread use of odd pricing in the retail
sector. Marketing Bulletin-Department of Marketing Massey University, 8, 53-58.
Hackl, F., Kummer, M.E., & Winter- Ember, R., 2014. 99 cent: Price Points in E-Commerce.
Information economics and Policy 26, pp.12-27.
Kotler, P. And Keller, K.L., 2005. Marketing Management.12th Ed., Prentice Hall.
Pride, W.M. and Ferrell, O. C., 1997: Marketing Concepts and Strategies, (10th ed.), New York,
Houghton Mifflin Co.
Pasricha, S., 2007. Consumer Psychology. Deep & Deep Publications Pvt. Ltd. F-159, Rajouri
Garden, New Delhi-110027. P-13.
Schindler, R. M., & Kibarian, T. M. (2001). Image communicated by the use of 99 endings in
advertised prices. Journal of Advertising, 30 (4), 95-99.
Thomas, M., & Morwitz, V. (2005). Penny wise and pound foolish: the left‐digit effect in price
cognition. Journal of Consumer Research, 32 (1), 54-64.
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Examining the relationship between Service Quality and
Relationship Quality: A Study of selected restaurants in
Rajasthan
Kartik Dave1
Gaurav Tripathi2
1
School of Business, Public Policy & Social Entrepreneurship,
Ambedkar University, Delhi, India
Email: davekartik123@gmail.com, kartik@aud.ac.in
2
Birla Institute of Management Technology,
Greater Noida, Uttar Pradesh, India
Email: gaurav.tripathi@bimtech.ac.in
Introduction
The India economy is growing rapidly especially in the services sector. The restaurant
services are one of the most popular services subscribed by customer. The demand is
propelled due to variety available in terms of foreign cuisine and the busy lifestyle in the
urban regions has reduced the tendency to cook/eat at home. The urban lifestyle is incomplete
without the restaurants, which is also connected with socialization.
The restaurant industry has become very competitive not just within the same format but also
attract competition among different formats. In the end it is the share of the wallet which
matter to a service provider. The situation becomes more difficult for the full service
restaurants (FSRs) who face high servicing cost unlike the quick service restaurants (QSRs).
The FSRs need to focus on bringing down the price conscious which can be done by making
various service quality factors more relevant for the customers. Hence, a comparison of
different formats based on service quality and related factors would be useful in uncovering
more insightful information. In India the star rating concept based on Michelin star is not
present hence the distinction between different formats is unclear especially when it comes to
definitional issues. In their research on different restaurant formats in the Indian context,
Dutta et al (2014) have commented that the restaurant industry is highly fragmented in terms
565
of formats, which again clarifies the lack of clear understanding about different restaurant
formats in the minds of the consumer. Hence, in the present research work the focus is on two
broad formats viz., Quick Service Restaurants (QSRs) and Full-Service Restaurants (FSRs).
Service quality (SQ) is an important tool for measuring the customer‟s perception about the
strength of services. The extant literature suggests that the service quality assessment is
complicated due to lack of generalizability of any single model which could measure service
quality in all contexts. Hence, context specific scales are required to fit the specific needs of a
particular context. Assessment of service quality has strong implications because of its ability
to influence customer satisfaction (Han and Ryu, 2007) and customer satisfaction influences
loyalty and word-of-mouth intentions (Andreassen & Lindestad, 1998). The research on this
relationship is a gap in the extant literature. Various research works have focused on
restaurant industry in the last few years but bridging this gap has not found attention in the
Indian context (Dutta et al, 2014).
Relationship quality (RQ) is a package comprising of intangible aspects. This adds to
products/services. RQ is based on customers‟ perceptions on how the relationship
accomplishes expectations and desires the consumers have regarding the complete
relationship. The overall depth and climate of a relationship is described by relationship
quality and mutual benefits play key role in defining the strength of relationship between
individuals, communities, or organizations (Crosby et al., 1990).
The concept of Relationship Quality (RQ) is strongly embedded in the marketing literature in
various contexts and it is about 25 years old. The concept of RQ holds importance due to its
connection with the relationship marketing, which embarks on maintaining relationship with
the customers. RQ is an indicator of the strength of the long-term relationship (Crosby et al.,
1990). Using RQ the relationship between satisfaction of customers and their retention can be
examined (Hennig-Thurau and Klee, 1997). Trust, Commitment and Satisfaction are the most
commonly discussed factors which come under purview of RQ.
According to Anderson and Weitz (1989), Trust is defined as “one party‟s belief that its
needs will be fulfilled in the future by actions undertaken by the other party”. Trust provides
confidence and comfort to customers, thereby enhancing efficiencies and effectiveness in
566
relational exchanges. This is one of the main reasons for trust to be considered to be
associated with relationship quality (e.g., Hennig-Thrau and Klee, 1997).
In many studies, customer satisfaction has been regarded as an appraisal process for long
term relationships in a restaurant industry. Hunt (1977) explained satisfaction as “an
evaluation made that the experience was at least as good as it was supposed to be, and it is
not the pleasure of the (consumption) experience.”
Moorman et al (1993) suggested that commitment is an expression of customers‟ willingness
to keep in relationships with sellers. They also suggested that commitment is a lasting desire
to continue a valued relationship. The term „valued relationship‟ emphasized the belief that
commitment subsists only when the relationship is considered imperative. Later many studies
have focused on restaurant/food service industry considering RQ.
Research Gap and Research Problem
Interestingly, Loyalty is also a consequence of SQ. It is widely understood that SQ leads to
customer satisfaction which in turn impacts behavioral intentions (Ryu et al, 2012). The latter
encompasses Word of Mouth intentions and Loyalty (or repeat visits). Surprisingly, no
studies have focused on RQ in the Indian restaurant context.
It is worth noting that an increase in the SQ levels is understood as the basis for progress of
not only its aforementioned consequences but also on the dimension of trust. However, the
discussion of SQ in alongside RQ in the literature has been limited. Also, satisfaction is a
consequence of SQ and is a dimension of RQ. Hence, there is a possibility of overlap in the
two models or a relationship. Also, SQ leading to satisfaction leads to loyalty which is also
seen as a consequence of RQ hence an examination of the relationship among the factors
under the two models seems useful both theoretically and practically.
Although there had been a huge list of studies focussing on SQ and RQ separately, however
joint discussion of both the models and the analysis of relationship had been very limited in
the literature in the restaurant context. The study by (Rachjaibun, 2007) can be the closest but
was in the context of hotels websites. Most studies involving RQ and SQ together were in the
context of retail. The direction of the relationship is also addressed in the literature.
567
The purpose of present research work is to examine the relationship between service quality
factors and relationship quality factors Service quality scale items are derived from relevant
studies pertaining to restaurant service quality. In this regard, the study by Tripathi and Dave
is found useful as it is one of the very few studies which have focused on Restaurant Service
Quality in India. The relationship quality factors (RQ) mainly include Trust, Commitment
and Satisfaction as the key dimensions.
Objectives of the Study
To analyze the relationship between SQ and RQ in the context of restaurants
To examine specifically the relationship among the SQ factors and RQ factors in
restaurant context
Research Methodology
Data is collected from the restaurant customers in the major cities of Rajasthan state. The
cities are chosen in way that the respondents shall be able to largely represent the urban
population. The customers/respondents are contacted using the Mall intercept method which
is reasonably usefulness method in such studies in terms of time saving and selection of valid
respondents. The state provides a rich blend of cultural heritage and modern style restaurants
which makes it a strong case for investigation.
Data analysis and Results
The analysis is conducted at two levels. Firstly, confirmatory factor analysis is used to check
the structure of two models under study including their validity of underlying dimensions.
Thereafter, the envisaged relationship between SQ and RQ is tested using the structural
equation modeling. The result highlight the significant relationship among the dimensions of
the two models.
Implications of the Study
The analysis provides meaningful results which will help in inferring future course of action
for managers of the selected restaurant formats. For each category, focusing on specific
service quality factors will help in making the customer loyal to the category.
568
Academically, this study will provide a different way to envisage the RQ and SQ concepts
especially due to the different factors extracted and also due to the relationship between the
two which was examined. The study points towards the importance of the role of employees
who are at the center of everything in the restaurant. Since RQ looks at the strength of the
relationship between the store and the customer, it is obvious that it is the key to long-term
relationships. Therefore, the SQ and RQ factors sharing the relationship must be considered
with a greater focus.
Practically, the managers need to understand that it is not only the SQ, which influences
behavioural intentions, which also includes loyalty, but also the RQ factors in consonance
with SQ factors. Relationships in India hold greater importance because of the growing rate
of economy and cultural roots. In addition, a greater amount of training should be introduced
in an applied manner wherein the perception of customers shall be managed with higher
levels of SQ performances, which lead to a more positive RQ, and hence the long term
relationships.
References
Anderson, E., and Weitz, B. (1989). Determinants of continuity in conventional industrial
channel dyads. Marketing Science, 8(3), 10–23.
Andreassen, T. W., and Lindestad, B. (1998). Customer loyalty and complex services: the
impact of corporate image on quality, customer satisfaction and loyalty for customers with
varying
degrees
of
service
expertise. International
Journal
of
Service
Industry
Management, 9(1), 7-23.
Crosby, L. A., Evans, K. R., and Cowles, D. (1990). Relationship quality in services selling:
an interpersonal influence perspective. The Journal of Marketing, 68-81.
Dutta, K., Parsa, H. G., Parsa, R. A., and Bujisic, M. (2014). Change in Consumer Patronage
and Willingness to Pay at Different Levels of Service Attributes in Restaurants: A Study in
India. Journal of Quality Assurance in Hospitality and Tourism, 15(2), 149-174.
569
Han, H., and Ryu, K. (2007). Moderating role of personal characteristics in forming
restaurant customers' behavioral intentions: an upscale restaurant setting. Journal of
Hospitality and Leisure Marketing, 15(4), 25-54.
Hennig‐Thurau, T., and Klee, A. (1997). The impact of customer satisfaction and relationship
quality on customer retention: A critical reassessment and model development. Psychology
and Marketing, 14(8), 737-764.
Hunt, H. K. (1977). CS/D-overview and future research directions. Conceptualization and
measurement of consumer satisfaction and dissatisfaction, 455-488.
Mittal, V., and Kamakura, W. A. (2001). Satisfaction, repurchase intent, and repurchase
behavior: investigating the moderating effect of customer characteristics. Journal of
Marketing Research, 38(1), 131-142.
Moorman, C., Deshpande, R., and Zaltman, G.(1993). Factors affecting trust in market
research relationships. The Journal of Marketing, 57, 81–101
Rachjaibun, N. (2007). A study of antecedents of e-relationship quality in hotel
websites (Doctoral dissertation, Oklahoma State University).
Ryu, K., Lee, H. R., and Kim, W. Gon (2012). The influence of the quality of the physical
environment, food, and service on restaurant image, customer perceived value, customer
satisfaction, and behavioral intentions. International Journal of Contemporary Hospitality
Management, 24(2), 200-223.
570
TRACK XI
571
A Study of the Impact of Technology based Financial Inclusion
Initiatives by Indian Commercial Banks to reach out to Unbanked
Consumers of Delhi NCR, India
Deepika Saxena1, Dr. Shweta Anand1
1
Gautam Buddha University, Greater Noida, UP, India (Within Delhi/NCR)
Email: deepika.jims@gmail.com; deepika.saxena@jimsindia.org/
shweta.anand7@gmail.com; shweta.anand@gbu.ac.in
Introduction:
India has a vast unbanked population offering huge opportunities to Indian Commercial
Banks for market expansion by banking the unbanked. Moreover, financial sector play a
pivotal role in bringing the inclusive growth in an economy which is dependent on its
financial system. For achieving inclusive growth, the economy should have financial
inclusion, where each and every individual becomes a part of formal financial system and
contribute to the growth of the economy (World Bank, 2014). The challenge ahead is to bring
financial inclusion in the country. In India, the government has been facing multiple
challenges to achieve 100% financial inclusion. The Government of India has been
undertaking numerous initiatives (RBI, 2015); the Reserve Bank of India is providing support
and targets to the Commercial Banks (Kumar, 2013). However till recently banks were
finding the cost-benefit adverse since transactions costs were high as compared to the small
amounts of money being deposited by marginalized or poor customers. Banks tried to strike a
balance between financial viability and financial inclusion by adopting technological
advancements to reach the unbanked (potential) consumers and taking them under the
purview of formal financial system (Purkayastha, 2010). Technological based financial
inclusion uses internet based, mobile based, telephone based access to banking thus reducing
the banks overhead costs which was earlier incurred in branch based banking making
financial inclusion possible as well as profitable (Anand and Saxena, 2012).
Research Gap and Research Problem:
The problems and challenges are not limited to penetration only. Major challenge for banks is
that even after the penetration of banking services and providing access to banks accounts for
572
the people; it is still not being used by them. In India, there is certainly the problem of
unbanked (those who do not have bank accounts) and under-banked (those who have bank
accounts but do not use) (Sharma, 2009). Opening an account is not a big challenge for banks.
The Government of India has been taking multiple initiatives from time to time to open bank
accounts of unbanked consumers. But the questions arise: All those banks accounts which
banks have opened during the last decade are actually being used by bank account-holders for
banking transactions? Are the bank account-holders aware of the services being provided by
banks for doing banking transactions and are they using such services? So, the study focuses
on the above mentioned aspects and is trying to find the answers of these questions.
A detailed review of literature has been carried out with the reference of various published
reports, journals, newspapers, and websites. The review has been executed in order to study
concepts of financial inclusion, financial exclusion, informal finance, role of banks in
financial inclusion, barriers (demand side and supply side) to financial inclusion and various
initiatives being taken by banks for financial inclusion. The literature revealed the use of
various variables studied separately to understand financial inclusion in terms of its index and
impact viz. penetration, access, awareness, usage, frequency, comfort in usage, satisfaction
etc. However, no study has found out the level of awareness, usage, frequency of usage and
comfort in usage in a single study. So, the research gap has been found in the above
mentioned area. In the present study, impact of technology based financial inclusion
initiatives has been analysed using variables such as awareness, usage, frequency of usage
and comfort in usage.
Objectives of the Study:
1. To identify various technology based initiatives taken by Indian Commercial Banks
for Financial Inclusion.
2. To identify the benchmark for analyzing the impact of technology based Financial
Inclusion Initiatives taken by Indian Commercial Banks.
3. To analyze the impact of technology based Financial Inclusion Initiatives in NCR.
573
Research Methodology:
The present study has been divided into two phases: Qualitative Study and Quantitative
Study.
Qualitative Study: The first phase of the study is exploratory in nature. For the objectives of
this phase of study i.e. identifying the various technology based initiatives taken by Indian
Commercial Banks for Financial Inclusion and identification of benchmark for analyzing the
impact of these initiatives, primary as well as secondary data has been collected. Primary data
has been collected by taking interviews of various banking experts and senior officials of
technology providers. Various Senior Banking Officials have been interviewed using the unstructured questionnaire.
The Deputy Governor of Reserve Bank of India (RBI) has been interviewed and during the
interaction, discussion was held on various initiatives being taken for financial inclusion.
Various senior officials of RBI and Commercial Banks were interviewed and informal
discussions were held on one to one basis with them. Two senior officials of Banking
Technology Providers such as Director of Eko India Private Ltd. (Technology Provider to SBI
and ICICI Bank) and Head-India, Vodafone M-Pesa Limited, were interviewed to understand
the depth and functionality of technology based initiatives undertaken by commercial banks.
Secondary data has been collected through various reports of RBI, NABARD, Indian Institute
of Banking and Finance (IIBF), Indian Banks’ Association (IBA), Centre for Financial
Inclusion, World Bank, banking and finance journals, magazines, newspapers, conferences
and seminars, research papers and articles and various websites.
Quantitative Study: The second phase of the study is a quantitative study which is descriptive
in nature and having the objective of analyzing the impact of Technology based Financial
Inclusion Initiatives in NCR. Based on the objective of this phase, research hypotheses and
sub-hypotheses have been formulated. The sampling frame used for collection of data is the
bank accountholders in Delhi NCR. The Primary Data is collected through a well-designed
structured questionnaire with Judgmental Sampling Technique. Sample size of 752 has been
taken for analyzing of impact of technology based financial inclusion initiatives in Delhi
NCR. In order to create a sample which is the representative of varied demographic variables,
752 completely filled questionnaires were received out of 800 questionnaires. The tests of
normality, validity and reliability have been conducted. For the purpose of analyzing the
574
collected data, MS-Excel 2010 has been used. Data has been analyzed through various
functions and formulas available in MS-Excel 2010 and various statistical tests such as
descriptive statistics, comparison of means, one sample z-test for proportions, theory of
estimations have been applied on the collected data to test the hypotheses and arrive at the
results.
Data Analysis and Results:
Qualitative Study: There are numerous initiatives by the banks which are technology based.
However, four modes of banking transactions are found to be more popular among the people
viz. online banking, tele-banking, SMS banking and ATM. Online Banking is a system that
allows individuals to perform banking activities through the internet and enables customers to
perform all routine transactions, such as balance enquiry, bill payments, stop-payment
requests, funds transfer to own accounts, inter-bank funds transfer etc. Mobile has gained so
much popularity in the recent years among the people and its use has not restricted to calls
only, but for multiple other reasons as well. It is now being used for doing banking
transactions also. With the help of internet, mobile is acting like a computer and used for all
kind of banking transactions. Tele-banking is a system which provides certain banking
services such as account balance inquiry, funds transfer, information about products and
services etc. through telephone. This service uses the concept of Interactive Voice Response
System (IVRS) wherein a computerized pre-recorded voice interacts with the user based on
the entry of options asked. SMS Banking is another form of mobile banking. It is a facility
used by banks to send messages (also called notifications or alerts) to customers' mobile
phones using SMS messaging, and variety of service provided to them which enables
customers to perform some financial transactions using SMS. ATM (Automated Teller
Machine) is a computerized device that provides access to financial transactions in a public
space without the need for a cashier/ human clerk. Various types of ATM services have been
launched by banks in the recent years such as biometric ATM and mobile ATM.
The study also focuses on identifying the benchmark for analysing the impact of Financial
Inclusion Initiatives. Based on the discussion with the banking experts, the benchmark of 70%
has been identified which implies that if in an area 70% population is aware of the banking
services, it is considered to be highly aware population and the same holds true for usage
575
level also. The study has used same benchmark to verify the level of awareness and usage in
Delhi NCR.
Quantitative Study: The impact of various categories of technology based financial inclusion
initiatives such as online banking, tele-banking, SMS banking and ATM have been analysed
using impact variables such as awareness, usage, frequency of usage and comfort in usage.
Statistical tests results revealed that awareness and usage levels of population in case of
technology based initiatives are below 70%. Frequency of usage of various categories of
technology based initiatives has been found between ‘rarely and sometimes’. However, users
of the technology based initiatives have been found ‘comfortable’.
Implications of the study:
The awareness and usage levels of technology based initiatives are not found satisfactory. The
present study area i.e. Delhi NCR is considered to have a good per capita income and life
style compared to other areas in India. Even after having literacy rate of 86%, awareness and
usage of banking services is not even 70% which is very disappointing. The advancement of
technology has made the life of the people easier for doing banking transactions, however, the
people are not aware about the facilities which are provided to them and they can actually be
benefitted by using them. Although, the people who are using technology for doing banking
transactions are found to be ‘comfortable’. It is a positive sign for RBI and commercial banks
for approaching those who are still not using technology for banking transactions.
Convincing educated people to use technology based initiatives will not be very challenging if
proper trust is developed among the people for the technology with appropriate security
networks and systems. The present study will be beneficial for banks who have been working
in the direction of financial inclusion initiatives, and will also be beneficial to the general
public to make them aware about the steps/initiatives being taken for them and to spread out
the reach of banks through technological advancements.
576
References:
Anand, S., & Saxena, D. (2012). Technology based Financial Inclusion Initiatives by Indian
Commercial Banks towards Financial Inclusion”, Annual Conference ‘CSITM Conference on
Benefiting the masses profitably – An Opportunity for Indian Technology Industry’, Indian
Institute of Management (IIM), Bangalore.
Kumar, N. (2013). Financial Inclusion and its Determinants: Evidence from India. Journal of
Financial Economic Policy, 5(1): 4-19. doi: http://dx.doi.org/10.1108/17576381311317754
Purkayastha, S. (2010). Technology Driven Channels: Need to be More Customer Centric.
Journal: The Indian Banker, V (5).
RBI. (2015). Report of the Committee on Medium-term Path on Financial Inclusion,
December.
Sharma, P. (2009). Financial Inclusion by Channelizing Existing Resources in India,
Innovative Inclusion. The India Economy Review.
World Bank. (2014). Global Financial Development Report (Financial Inclusion). The World
Bank: Washington DC.
577
S-COMMERCE: AN EMPIRICAL STUDY FOR ON-DEMAND
HOME SERVICES.
Dr.Brijesh Sivathanu, Associate Professor, Symbiosis Center for Information Technology,
Symbiosis International University, Hinjewadi, Phase-I, Pune-411057.
E-mail: brij.jesh2002@gmail.com
Introduction:
Service Commerce (S-Commerce) is the newly emerging phenomenon which is increasingly
contributing to the economies worldwide. Today is the era of on-demand services. The digital
influence in every aspect of our modern lives has never been more profound. From retail to
transportation and from financial services to something like watching a movie, digital disruption
and creativity has given birth to an entirely new business models and the next generation of
companies.
Technological breakthroughs represent one of the most visible forces shaping the service
landscape (Rust & Huang, 2014). Leveraging the might of technology, the on-demand home
services sector has triggered considerable interest in the business community as it links local
home based services to the end consumers. Every day in any modern household there are a lot of
things to be taken care of. This might range from a clogged kitchen sink, to repair of electrical
wires, air conditioners, refrigerator, pest control and this list is unending. The repair of faulty
appliances, getting clothes washed, ironed and delivered to the doorstep or having a fitness
instructor provide personalized training at home are some of the routine tasks to be
accomplished. Given the busy lifestyles of modern families, people find little time in their busy
schedules to look after the various home needs and this is where the on-demand home services
comes to the forefront. Many firms and startups, in an attempt to organize this highly fragmented
sector, are offering these and many more services at the click of a button.
The on-demand service economy is defined as the activities created by technology companies
that fulfill consumer demand via the immediate provisioning of goods and services (Schmitt &
Zarantonello, 2013). Rather than simple demand aggregation, the goal for the on-demand home
578
service firms is to build services that provide quality, is reliable, trustworthy and economically
priced that fulfill the home based needs of the consumers. To get the proper fix and solutions for
these problems, a reliable team of highly skilled, knowledgeable and well trained professionals
are employed by these firms. They are currently focused only on the metro and Tier-I cities,
indicating the future scope of replicating this service business model in Tier-II cities to gain the
first mover advantage.
Research Gap and Research Problem:
The on-demand home services market in India has an estimated market size of about $50 billion
and is rapidly growing (Thomas, 2016). This indicates that there exists a huge potential in this
untapped market space. With an estimated 5,000 transactions a day along with funding and
backing from investors, the on-demand home services sector is witnessing a lot of business
activity. For a developing country like India, this is definitely a major boom for the services
sector. The key drivers for the growth in the on-demand home services sector is the highly busy
mobile urban demographic population that constitutes the initial target market along with the
increasing comfort level of customers with online transactions.
Contrary to the common perception of viewing service experiences as something exclusively
designed and produced by the firm for the customer, (McColl-Kennedy, Cheung, & Ferrier,
2015) conceptualize service experience as dynamic, experiential, relational activities and
interactions, thus highlighting the evolving and dynamic nature of service experience. Existing
studies focus mainly on customer service experience in the context of online shopping
environments (Bilgihan, Kandampully & Zhang, 2016). There are few studies extending the
concept of service experience in the rapidly changing service landscape (Ostrom et. al, 2015).
Hence the author attempts to address this problem by formulating and empirically testing a
research model of customer service experience in the context of on-demand home services.
Objectives of the study:
The context for this study is the on-demand home services based in Pune city in India. It has
three main objectives:
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1. To study the current challenges faced by the firms in the on-demand home services
sector.
2. To identify the factors that contributes to the customer service experience for the ondemand home services.
3. To understand the impact of these determinants on the customer service experience.
Research Methodology:
This study focuses on the emerging trend for on-demand home services and the customer service
experience in this context. For conducting this research, both primary and secondary data were
used. A primary survey was conducted using a structured questionnaire as the research
instrument among the 330 customers who have availed the on-demand home services in Pune
city. The self-administered questionnaire consisted of closed ended questions using a five point
Likert scale ranging from “Strongly Agree” to “Strongly Disagree”. The sample respondents
were selected based on the non-probabilistic convenience sampling method. The exploratory
factor analysis technique using the varimax rotation was deployed to identify the factors
contributing to the customer service experience. Multiple linear regression was subsequently
carried out to understand the impact of these antecedents on the customer service experience in
the context of on-demand home services.
Data Analysis and Results:
The collected data was coded and entered for statistical analysis using the SPSS software. The
data obtained for the study were analyzed using Exploratory Factor analysis for identification of
the antecedents contributing to the customer service experience in the context of on-demand
home services in Pune city. Factor analysis was conducted as a data reduction technique to
minimize the number of variables whilst simultaneously maximizing the amount of information
in the analysis. The results clearly shows that the on-demand home services in Pune is in its
nascent stage and are faced by challenges such as non-standardized approach in the pricing
model of services, availability and reliability of the service providers along with the quality of
the services provided. The findings show that, seven important factors emerge which contribute
to the customer service experience. These antecedents are „Type of service‟, „Perceived quality
of service‟, „Timeliness of service‟, „Pricing of service‟, „Promotion of service‟, „People/Staff
580
involved in service‟, „Process of availing service‟ which are the major drivers in contributing to
the customer service experience. The results of this research conform to many prior theories and
studies on service management and marketing.
Implications of the Study:
The present study makes both academic and practical contributions. From an academic point of
view, it contributes to the existing literature in the area of Services Management and marketing.
It can also be used by future researchers to study the role of various other factors not considered
in the present study to improve the customer service experience for on-demand home services.
The proposed model would help marketers and practitioners to formulate service marketing
strategies for on-demand home services to enhance consumer service experience.
This research was carried out only in the city of Pune in the state of Maharashtra. As with most
studies, it would be important to test these measures in other cities and parts of India to improve
the reliability and validity of this study. The proposed model is empirically tested with the
researcher‟s selected set of respondents and the results need to be further validated with varied
consumers and cultural contexts.
This study attempts to interweave the disciplines of services marketing and e-commerce. The
significant contribution of this paper is that it provides a basis for conceptualizing a model of
customer service experience in the context of on-demand home services.
References:
Bilgihan, A., Kandampully, J., and Zhang, T. (2016). Towards a unified customer experience in
online shopping environments: Antecedents and outcomes. International Journal of Quality and
Service Sciences, 8(1): 102 – 119.
Schmitt, B., and Zarantonello, L. (2013). Consumer experience and experiential marketing: A
critical review. Review of Marketing Research: 25–61.
McColl-Kennedy, J. R., Cheung, L., and Ferrier, E. (2015). Co-creating service experience
practices. Journal of Service Management, 26(2): 249–275.
Thomas, A. Article: Housejoy to dominate beauty, laundry categories under home services in
India: Saran Chatterjee - The Economic Times. Retrieved September 22, 2016, from
http://economictimes.indiatimes.com/small-biz/entrepreneurship/housejoy-to-dominate-beautylaundry-categories-under-home-services-in-india-saran-chatterjee/articleshow/51490552.cms
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EFFECT OF PERCEIVED DECEPTION ON WILLINGNESS TO
BUY AND INTENTION TO REPURCHASE: AN
EXPLORATORY RESEARCH
Ms. Ishpreet Kaur Virdi1, Prof. Kavita Sharma2
1
2
Research Scholar, Department of Commerce, Delhi University,
Head, Department of Commerce, Delhi School of Economics, Delhi University
Email:ishpreet2104@gmail.com, ksharma.dse@gmail.com,
INTRODUCTION:
Deception has existed for a long time and is now considered as a contemporary marketing issue
which poses challenges in the consumer oriented society. It influences consumers’ beliefs in a
dishonest way and can have negative consequences on their financial resources and their health.
Federal Trade Commission (FTC) defines deception as any “representation, omission or practice
that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer’s
detriment” (FTC, 1983).
Since, consumers are increasingly warned against such practices especially by consumers’
protection agencies, which leave them less vulnerable and increase their perception of deception.
The feeling of being duped influences the present and the future behavior of the consumer.
Researchers and analysts have emphasized that this phenomenon is a global issue and an indepth understanding on deceptive activities and its impact on consumer behavior is the need of
the hour.
Deception is considered as one of the major ethical issues being raised in advertising context
(Hyman, Tansey, & Clark, 1994)and this paper attemptsto find out the effect of perceived
deception on willingness to buy and intention to repurchase telecom and insurance products.
These two products were selected from ASCI (Advertising Standards Council of India)forum.
Based on the literature Consumer attitude towards advertising, knowledge about the product,
582
consumer awareness and product quality are found as factors effecting perception of deception
by the consumer.
RESEARCH GAP AND RESEARCH PROBLEM:
Deception has been tested in many previous studies along with its impact on repurchase
behaviour and other behavioural constructs such as loyalty. However, there are very scant studies
which have focused on implementing antecedents of perceived deception along with their
behavioural impact on consumers; also taking into account those five dimensions of perceived
deception as developed by (Gerbing & Anderson, 1988) and (Churchill, 1979). Also, Indian
consumer’s behaviour is an interesting area to work.
OBJECTIVES OF THE STUDY:
To analyze and understand the underlying behavioral changes among consumers as a
result of perceived deception.
To find out factors effecting perception of deception.
To draw strategic implications for advertisers and marketers.
RESEARCH METHODOLOGY:
This paper studies the impact of perceived deception in the context of advertising for telecom
and insurance products in the service sectors selected from ASCI complaint forum. The
hypothesized relationships developed on the basis of extant review of literature are used to
develop the theoretical model shown in figure 1.
Based on the studies of (Churchill, 1979) and (Gerbing & Anderson, 1988), perceived deception
was measured in terms of perceived veracity, perceived ethics, perceived vulnerability, perceived
consequences and perceived legal aspects. It offers the multi-dimensional measurement scale of
perceived deception in advertising.
These dimensions of perceived deception can be explained as follows:
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The first dimension “perceived veracity” is related to the degree of truthfulness estimated by the
person exposed to the ad. These items describe the extent to which consumers believe that the
content of the ad does not reflect the veracity.
The second dimension “ethic” reflects the extent to which deception in advertising is seen as an
unethical practice that may harm consumers and competitors. It consists items that refer to the
extent to which consumers believe that deception is an unethical act that may harm their interests
and those of competitors. (Chaouachi & Rached, 2012)
The third dimension “perceived vulnerability” also called Perceived susceptibility refers to
one's perception of the risk behavior or the chances of being deceived. It reflects an individual's
belief about the likelihood of deception in advertising .Perceptions of event likelihood are central
to both expectancy-value theory in social psychology and to subjective-expected utility theory in
economics. Perceptions of vulnerability are part of a "reasoned" path to risk behavior reflecting
the fact that some people who engage in risk behaviors acknowledge their vulnerability to the
negative consequences of these behaviors.
The fourth dimension “perceived consequences” reflects perceiving the consequences of
disclosure to deceptive advertisements, which harm the consumers either physically or mentally.
It creates a negative impact on the behaviour of consumers on perceiving deception. This leads to
negative consequences. Further in order to measure satisfaction, it is necessary to measure both
expectations at the time of purchase and reactions at some time after purchase. If actual
consequences equal or exceed the expected consequences, the consumer is satisfied; but if actual
consequences fall short of expected consequences, the consumer is dissatisfied. (Gilbert, 1986)
The fifth dimension “perceived legal aspects” is an indispensable part of a successful business
environment in any country. They reflect the policy framework and the mindset of the
Governmental structure of that country. They ensure that every company is functioning as per
the statutory framework of the country. Every organization has to follow various laws governing
the industry in which it operates. If it does not abide by the laws, it may create a negative image
in the minds of its customers who value good ethical behaviour.
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Using responses of 190 sample respondents selected from Delhi and NCR, the structural model
depicting relationships between perceived deception and other constructs was tested through
PLS-SEM. For testing the impact of perceived deception on consumer’s willingness to buy and
repurchase intention, taking consumer’s attitude as antecedent factor we developed second order
formative construct in structural equations modeling to get a more clear picture of the model and
develop relationships between the constructs.
FIGURE 1
MODEL OF EFFECT OF PERCEIVED DECEPTION ON WILLINGNESS TO BUY
AND INTENTION TO PURCHASE
CONSUMER ATTITUDE:
TOWARDS
ADVERTISING
KNOWLEDGE
ABOUT THE
PRODUCT
AWARENESS
PRODUCT QUALITY
PERCEPTION TO
DECEPTION:
PERCEIVED
VERACITY
CONSEQUENCES
ETHICS
VULNERABILITY
LEGAL ASPECTS
WILLINGNESS TO BUY
INTENTION TO REPURCHASE
DATA ANALYSIS AND RESULTS:
The results shows that perceived veracity, perceived ethics, perceived vulnerability, perceived
consequences and perceived legal aspects are appropriate measure of perceived deception. The
antecedents of perceived deception like; consumer’s knowledge and consumer’s awareness are
significant positive predictors of perceived deception. However, attitude towards advertising and
product qualityhave negatively effecton perceived deception. Further, perceived deception has
significant impact on willingness to buy and repurchase intention.
585
IMPLICATIONS OF THE STUDY:
This study helps managers to analyze the behavioural changes among consumers as a result of
perceiving deception in service sector (insurance and telecom industry). Also, marketers can tap
on the various antecedents of perceived deception covered in this study to expand their reach to
customers and improve their market image by overcoming the negative perception in the minds
of the public.
REFERENCES:
Chaouachi, S. G., and Rached, K. S. (2012). Perceived Deception in Advertising: Proposition of
a Measurement Scale. Journal of Marketing research and Case studies, 1-15.
Churchill, G. A. (1979). A Paradigm for developing better measures of marketing constructs.
Journal of Marketing Research, 16: 64-73.
FTC (1983). FTC, Retrieved May 21, 2016, from FTC:
http://ftc.gov/bcp/policystmt/addecept.htm/
Gerbing, D. W., and Anderson, J. C. (1988). An updated paradigm for scale development
incorporating unidimensionality and its assessment. Journal of Marketing Research, 25: 186192.
Gilbert, A. C. (1986). A paradigm for developing better measures of marketing constructs.
Journal of Marketing Research, 64.
Hyman, M., Tansey, R., and Clark, J. W. (1994). Research on Advertising Ethics: Past, Present
and Future. Journal of Advertising, 23(3): 5.
586
Determinants of Brand Loyalty in Technology
Facilitated Services
Neha Sadhotra1, S.B.Dash.1, K. Sivakumar2, Abhijit Bhattacharya1, Late Saji KB Nair1
1
Indian Institute of Management Lucknow
Off Sitapur Road, Prabandh Nagar, Lucknow, U.P. (India) 226013
2
Lehigh University, 621 Taylor Street, Bethlehem, PA (USA) 18015
Email: fpm11008@iiml.ac.in / satya@iiml.ac.in/k.sivakumar@lehigh.edu
Introduction
The ever-increasing pace of technological advancements and increasing competition are
opening up exciting opportunities for the services firms to benefit from new product
innovations. Technology-facilitated services (TFSs) are altering the ways in which consumers
interface with service providers and it often involves a significant behavior change in which
patterns that are ingrained must be altered. The services marketing firms are increasingly
looking for ways to develop loyalty amongst customers from the implementation of TFS. The
present study examines the determinants of Brand loyalty in one such technology intensive
service dominant setting, Kiosk banks. A conceptual framework incorporating technologyspecific factors and non-technology specific factors that influence the perceived credibility of
TFS, thereby, impacting the consumer brand loyalty has been developed and tested
empirically.
Research Gap and Research Problem
While trying to meet the consumer needs and wants by developing the technology-intensive
innovative services, the service firms face several difficulties to remain competitive (Zhu et
al., 2012; Meuter et al., 2000). Though the potential benefits of successful technology
infusion are enticing, the service firms won’t be able to realize the intended gains unless and
until their customers adopt and continually use the TFS (Meuter et al., 2005). The services
firms are now increasingly, becoming aware of the barriers to continued usage of TFS by the
customers (Dabholkar et al., 2003). The most prominent hurdle is about making the
consumers loyal to the new-to-the-world technology inherent in the TFS offer, which often
demands a significant behavioral change among the consumers (Venkatesh and Morris,
587
2000). Customers not only should alter their behavioral pattern in these situations, but also
become the co-producers of their service, with responsibility for delivery of the service and
for their own satisfaction (Meuter and Bitner, 1998).
Technology is enjoying popularity worldwide, but kiosks are still jockeying for space in
banks and financial services area. Financial Kiosks are a range of self-service banking kiosks
that give consumers choice and flexibility to carry out their transactions at a more convenient
channel. Both flexible and compact, Financial Kiosks provide a complementary banking
channel in branches or off-premise locations. As banking moves to an omni-channel world,
the future of the physical branch remains an open question. But two things have become
clear. First, too many routine interactions, like making a deposit, take place in the branch in
many countries. Banks can no longer afford the cost structure that supports such interactions,
which could go through lower-cost, self-service digital channels. Technology plays a key role
in providing excellent customer service, so banks need to delight their customers on every
interaction across every channel to get them to become brand advocates. Given the value of
advocacy, it is important to understand what a customer’s primary provider must do to turn
its customers into advocates. The understanding of the implications of distancing a consumer
from the close interpersonal interactions traditionally associated with a service encounter and
its impact on customer loyalty is indeed a requirement for the marketing practitioners who
are thinking of infusing TFS in their offerings. Knowledge about the factors impacting
loyalty in kiosk banking is required to gain a full picture of the value generation process for
TFSs.
Objectives of the Study
The lack of empirical investigations on the determinants of brand loyalty of kiosk bank might
reflect the constraint that many TFSs are still in their infancy, and performance takes time to
mature. There is a real need to have a comprehensive examination of the factors determining
the brand loyalty of kiosk bank. The research problem has, therefore been defined as
“identification of determinants of brand loyalty in technology facilitated services”. The
identification of the drivers of loyalty has been an important topic among researchers of
customer loyalty (Dick and Basu, 1994) but none of them focuses on the technology intensive
service dominant settings. The research related to TFS focuses on multimedia kiosks (Rowley
and Slack, 2003; Rowley, 1995; Moerloose et al., 2005), however, to the best of our
588
knowledge, past research has not examined how investments in kiosk set-ups improve the
brand loyalty in bank settings. Hence, the research objectiveTo identify the factors that affect brand loyalty in Technology facilitated services
Research Methodology
The study methodology involved a focused literature survey conducted specific to the domain
of TFS adoption and usage. The literature survey has resulted in the identification of the
research variables as well as the hypotheses, which would help explain the loyalty process in
technology intensive services setting. The study uses both qualitative and quantitative
research and hypotheses have been tested through structural equation modeling in AMOS.
Details on the measurements of the variables, pre-testing of the questionnaire, the data
collection and sampling method along with the techniques and procedures used for data
analysis have been discussed in the paper.
Data Analysis and Results
The results indicate positive influence of interface customization, perceived social prestige,
ambience, design, and external servicescape on perceived credibility; and negative influence
of security risk on perceived credibility.
Successful introductions of new services are beneficial in achieving higher revenues from
customers and can also attract customers from competitors. Failing to make your customers
stick to the services may lead to lower revenues, which in turn will slow down a firm’s
growth. This study increases our understanding of consumer’s decisions to continually use
TFS by giving a comprehensive framework of relationships among brand loyalty, perceived
credibility, interface evaluation, perceived risk, perceived social prestige, and servicescape.
Consumer can try the TFS several times, learn about the advantages and disadvantages of the
customer interface, and adjust their behavior accordingly. It influences the customers by
giving them a pleasant and smooth experience and adding to their experiential value.
Moreover, in a technology-facilitated service, interface plays a very important role in
enabling the customer to exert control over the situation. Based on our results, the question
that arises is how customization of interface can significantly impact perceived credibility,
and character has no significant effect? One possible explanation is that customers don’t get a
sense of trustworthiness or expertise with just the design features of the interface. More than
589
hedonic, they consider utilitarian features of the interface (customization) for evaluating the
expertise (credibility) of the service provider.
Further, our analyses revealed that perceived credibility was affected by security risk, but not
by privacy risk. A positive impact of perceived social prestige on perceived credibility of the
kiosk bank indicates that customers like to connect themselves with the kiosk bank. They get
a sense of image enhancement by visiting and using a digital/ kiosk bank.
Ambience, design and external servicescape have a positive and significant impact on
perceived credibility of the kiosk bank. The high- tech environment, sophisticated
environment and happening surroundings of the kiosk bank branch makes the bank credible
in the eyes of the customers thus, leading to continued usage and builds brand loyalty
Implications of the Study
The present study provides support to the proposed theory by including the important
impediments to the determinants of brand loyalty of TFS. This is the first study that attempts
to examine the notion of TFS brand loyalty in a service dominant setting.
This study has several implications for marketing managers. Successfully persuading
consumer innovators to adopt a TFS is a vital precondition for ultimate marketplace success.
The marketing practitioners have also increasingly started acknowledging the role of
technology in enlivening the service businesses; and they also recognize the need of
technology in getting the effectiveness of the service offer increased and thereby achieving
the much needed competitive advantage. This study would facilitate the understanding of
building loyal customers and thus, help the marketing practitioners in achieving the
effectiveness of their service offers. Further, the findings of the study would be useful to the
services marketing practitioners who consider the case of TFS implementation in their firms,
as well as those who are facing challenges with the management of existing technology
facilitated services. The issue of subsequent usage and loyalty in TFS is essential across
various service sectors, where firms have invested huge amounts in new service technologies.
Early disadoption of these TFSs and low usage levels may be unfavorable for the service
firms.
590
Banks need to focus on the interface design and features. High levels of customization and
interactivity can smoothen the customer experience with the interface at the kiosk bank.
Moreover, a poorly designed interface design would have an impact on the performance or
functional aspect of the kiosk bank. It is important for banks to enlighten customers about the
security features of their interface (kiosks, touch screen, tablets) and overall bank branch in
order to develop higher levels of credibility in the eyes of the customers.
Banks huge investments in the servicescape don’t go waste. Customers highly appreciate the
ambience, design and surroundings of the kiosk bank that is reflected in the attractiveness of
the kiosk bank, thus, leading to increase credibility levels. Banks need to build a soothing and
really high-tech environment for the service delivery.
References
Dabholkar, P.A., Bobbitt, L. Michelle, and Lee, Eun-Ju. (2003). Understanding consumer
motivation and behavior related to self-scanning in retailing: Implications for strategy and
research on technology-based self-service. International Journal of Service Industry
Management; 14(1): 59 – 95.
Dick, A., and Basu, K. (1994). Customer loyalty: Toward an integrated conceptual
framework. Journal of the Academy of Marketing Science; 22(2): 99-113.
Meuter, M.L., and Bitner, M.J. (1998). Self-Service Technologies: Extending Service
Frameworks and Identifying Issues for Research. In Marketing Theory and Applications,
Dhruv Grewal and Connie Pechman, Eds. Chicago: American Marketing Association; 9:
12-19.
Meuter, M.L., Bitner, M.J., Ostrom, A.L., and Brown, S.W. (2005). Choosing Among
Alternative Service Delivery Modes: An Investigation of Customer Trial of Self-Service
Technologies. Journal of Marketing; 69: 61–83.
Meuter, M.L., Ostrom, A.L., Roundtree, R.I., and Bitner, M.J. (2000). Self-Service
Technologies: Understanding Customer Satisfaction with Technology-Based Service
Encounters. Journal of Marketing; 64: 50-64.
Moerloose C., Antioco M., Lindgreen A., and Palmer R. (2005) Information Kiosks: the
Case of the Belgian Retail Sector. International Journal of Retail and Distribution
Management; 33(6): 472-490.
Rowley J., and Slack F. (2003). Kiosks in Retailing: The Quiet Revolution. International
Journal of Retail and Distribution Management; 31(6): 329-339.
Rowley, J. (1995). Multimedia Kiosks in Retailing. International Journal of Retail and
Distribution Management; 23(5):32-40.
591
Venkatesh, V., and Morris, M. G. (2000). Why don’t men ever stop to ask for directions?
Gender, social influence, and their role in technology acceptance and usage behavior. MIS
Quarterly; 24(1): 115-139.
Zhu, Z., Nakata, C., Sivakumar, K., and Grewal, D. (2012). Fix It or Leave It? Customer
Recovery from Self-service Technology Failures, Journal of Retailing.
592
Cultural Capital and Leader-Member Exchange: Profiling Patient
Service Delivery Behaviours in Health Care
Puja Dhawan
University of New South Wales, Canberra
Northcott Dr, Campbell ACT 2612, Australia
Emails: pujanet@gmail.com
Introduction:
The idea of a strong bond between culture and health, advocated by Bourdieu and his
colleagues from the 1960s, is explored in detail by investigating the role of Cultural Health
Capital in Internal Brand Building practices among leader and members working in healthcare
sector.
The concept of cultural health capital (Shim, 2010), based on cultural capital theories
(Bourdieu, 1986) helps to provide an insight that how doctor-patient interaction may generate
and sustain social stratification in health care industry. The social assets comprising cultural
health capital, is not the same across different social contexts. Given the diversities which
exists in cultural activities (Michalos and Kahlke, 2008), Indian healthcare system is different
and diverse comprising of large heterogeneous population belonging to various socioeconomic and cultural groups (Mavalankar and Ramani, 2005).
Internal branding emphasize on linking the corporate brand to the organization's values and
culture, and then link these values to employees’ values, in order to achieve the
organizational goals (Baldoni , 2004). The delivery of brand promise needs several strategic
processes, so that employees can communicate the brand promise or message in such a way,
that patients are satisfied. Indeed, if employees in healthcare industry are highly satisfied, the
patients in turn, will be treated with care and respect. Internal branding is explained, as the
set of strategic processes, which align and empower employees, to deliver the brand promise
in a consistent manner (Punjaisri and Wilson, 2007).
Leader–member exchange theory, has gained importance in empirical research in the
organizational sciences since its foundation (i.e., Dansereau et al., 1975; Graen and Cashman,
593
1975). Contrasting, prior leadership theories, only focuses on the leader’s individual attributes
(e.g., traits and styles), However LMX also focuses on the dynamic relationship between the
leader and the follower. Moreover, Graen and Uhl-Bien (1995) suggest, that leader-member
exchange, is a two way dyadic relationship based approach, between a leader and member.
In addition, Leaders behaviour towards their followers, depends upon, how followers respond
to their work related tasks and accordingly leaders develop different types of exchanges
with their followers (Rockstuhl et al., 2012). Therefore there is a need to understand what
influence high quality leader-member exchange. Baker and Dutton (2006) argue that highquality exchange and reciprocity exchange relationship are the key drivers of social capital
irrespective of the discipline.
Research Gap and Research Problem:
Organizations emphasize on delivering the brand promise and meet customer expectations
(Punjaisri et al., 2009; Xiong et al., 2013). While most of the internal branding research has
focused mainly on the outcomes of internal branding, insufficient consideration has been
devoted on what actually influence the internal branding activities and its outcomes (Xiong et
al., 2013; Löhndorf and Diamantopoulos, 2014; Xiong and King, 2015). The purpose of this
study is to explore what influence the relationship between leader-member, internal branding
(through building brand vision and communication) and patient service delivery behaviour.
Currently, limited research exists as to how Cultural Health Capital influences Internal
branding to achieve positive customer service delivery behaviour. It is, therefore, the focus of
the present study.
Objectives of the study:
The specific objective is to conceptually elaborate on the Cultural Capital through applying
leader-member exchange theory in the field of health. Research is needed that examines the
conditions that promote cultural capital among health care provider (employee), what kind of
cultural capital increases the patient service delivery behaviour and whether access to this
cultural capital varies by between healthcare sector. The purpose of this study is to understand
the affect of Leader-Member Exchange on Internal Brand Building behaviour and patient
service delivery behaviour for Health sector.
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Research methodology:
The research design employed for the present study is basically qualitative interpretative
research paradigm (Denzin and Lincoln, 2011) influenced by Crotty (1998) design, framed
by constructivist epistemology, a theoretical perspective of interpretive methodology of
ethnography, has been adopted along with the process of interviews, to understand
leaders/employees internal branding initiatives.
Data analysis and results:
The study has analysed 36 interviews and were audio recorded, as well as transcribed with
extensive field notes, because in some cases, transcribing was infeasible, due to language
translation problem. This process yielded 36 transcripts and over 180 single-spaced pages for
analysis. The analysis was carried out using the constant comparative method of qualitative
data analysis (Glaser and Strauss, 1967), and common techniques to code the data (Constas,
1992; Miles and Huberman, 1994). This process enabled to explore new themes, which
emerged in subsequent interviews.
Drawing on interviews with 36 respondents, the study finds that Cultural age and experience
gap, results in high quality leader-member exchange and exhibits positive patient service
delivery.The leader- member relationship is greatly affected by the personal factors, such as
age and experience of the leader and member. The data shows that a healthy and friendlily
relation exists, if the gap in age and experience, is less between leader and member. On the
other hand the relationship is more formal / authoritative, if the gap in age and experience
between is considerably wide.
Implications of the Study:
This study offers significant managerial implications. Especially in service industry,
employees as brand champions are the key to the accomplishment of branding strategy
(Löhndorf
and
Diamantopoulos,
2014).
In
healthcare
industry,
employees
(Doctors/Dentists/Nurses)' behaviour has a major influence on how external customer
(patients) perceives and experience the brand (Burmann et al., 2009; Punjaisri and Wilson,
2007).
595
References:
Burmann,C., Zeplin, S., and Riley, N. (2009). Key determinants of internal brand
management success: An exploratory empirical analysis. Journal of Brand Management,
16(4): 264–284.
Graen, G. B., and Uhl-Bien, M. (1995).The Relationship-based approach to leadership:
Development of LMX theory of leadership over 25 years: Applying a multi-level, multidomain perspective: Leadership Quarterly, 6 (2): 219–247.
Löhndorf, B., and Diamantopoulos, A. (2014). Internal Branding : Social Identity and Social
Exchange Perspectives on Turning Employees into Brand Champions. Journal of Service
Research, 17(3): 310-325.
Mahnert, K. F., and Torres, A. M. (2007): The Brand Inside: The factors of failure and
success in internal branding. Irish Marketing Review, 19(1): 54–63
Men, L. R., and Stacks, D. W. (2013). The impact of leadership style and employee
empowerment on perceived organizational reputation. Journal of Communication
Management, 17(2): 171–192.
Punjaisri, K., and Wilson, A. M. (2007). The role of internal branding in the delivery of
employee brand promise. Journal of Brand Management, 15(1), 57–70.
Punjaisri, K., Wilson, A., and Evanschitzky, H. (2008). Exploring the Influences of Internal
Branding on Employees’ Brand Promise Delivery: Implications for Strengthening CustomerBrand Relationships. Journal of Relationship Marketing, 7(4): 407-424.
Punjaisri, K., Wilson, A., and Evanschitzky, H. (2009). Internal branding: an enabler of
employees’ brand-supporting behaviours. Journal of Service Management, 20(2): 209-226.
Shim, J. K. (2010). Cultural health capital: A theoretical approach to understanding health
care interactions and the dynamics of unequal treatment. Journal of Health and Social
Behavior, 51(1): 1–15.
Vallaster, C, and Chernatony, L. D. (2006). Internal brand building and structuration: the role
of leadership. European Journal of Marketing, 40(7/8): 761–784.
Xiong, L., King, C., and Piehler, R. (2013). That’s not my job”: exploring the employee
perspective in the development of brand ambassadors. International Journal of Hospitality
Management, 35, 348–359.
Xiong, L., and King, C. (2015). Motivational drivers that fuel employees to champion the
hospitality brand. International Journal of Hospitality Management, 44: 58-69.
596
Reviewing the Recovery, for small restaurant brands: case study
from Dhaka, Bangladesh
Shamsul Huq Bin Shahriar1, Kashfia Farhin2, Mahbub-Ul-Islam1, Sayed Arafat1
1
Student, Department of Business Administration, East West University, Dhaka, Bangladesh
2
Project coordinator, Bangladesh Brand Forum
Emails: shahriarhuq002@gmail.com/ kashfiafarhin@gmail.com / mbidhk@gmail.com /
arafatahmed95@gmail.com
Introduction and Background of the case:
“Mistakes are a critical part of every service……………………..The fact is, in services,
often performed in the customer‟s presence, errors are inevitable.”(Hart et al., 1990).
Considering the exclusive nature of service; service failure and recovery have been important
issues for academic and managerial discussions. Certainly, previous researches also
confirmed that service failure or service related problems can cause customer dissatisfaction
(Parasuraman et al., 1985), recovery actions are suggested as the effective way to offset the
negative consequences of service failure (Gronroos, 1988) and moreover a process of
“getting customers back to business” (Mattila, 2004). However, managing the proper service
recovery is a matter of cost. In case of small restaurant brands; from the service providers‟
side, it turns out to be challenging to take proper or more accurately anticipated corrective
actions after each incident of service failure or getting complaint from the customers. It is not
only matter of managing relation with customers but about dealing with high competition in
the market; i. e. big restaurant brands, growing concept of service innovation in restaurant
industry and emergence of the foreign restaurant chains in the city. In case of small
restaurant brands for whom, cost is the prime concern; the recovery strategies are literally
different and somehow exceptional from the traditional strategies of big brands.
Purpose of the study:
The core purpose of this paper is to find the answer of “How small restaurants brands are
designing effective recovery strategies through customer engagement?” Authors have
considered three restaurant brands for the in-depth study.
Case Organizations context:
Three restaurant brands named „Khajwa Ajmerari Biriyani House‟ which is now known as
„Khajwa Ajmerari Restaurant and Biriyani House‟, sited in Kallyanpur, Dhaka. It was
established in 1999 and now it has 2 branches with a capacity of serving 60 customers in
each. Whereas the second case organization ‘Al-Kaderia Restaurant’ came into operation in
597
2005, now it is successfully operating business two branches in Rampuara Bazaar, Dhaka. On
the other hand, in 2012 when a well reputed private university relocated to a new campus in
Aftab Nagar the restaurant „Vojon Bilash‟ along with another competitor, came into
operation at the area to sized to the opportunity, for a crowed of ten thousand students and a
few other hundreds of staffs. However, faculty members and VIP‟s visiting the university
was not their target, the left the segment for the competitors. Nevertheless, managements and
service staffs are fairly aware of the unavoidable occurrences of service failure in their
everyday service delivery process, in both the ways e.g. core and process. Furthermore, they
also know that effective service recovery strategy is essential in order to maintain long term
relationship with customers (Stauss and Friege, 1999).
Methodology – In-depth case study:
In this research, qualitative case study approach was adopted. Whereas, Stake (1995) stated
that the role of a case study researcher as an interpreter. On the other hand, researchers such
Schein (2004) have recognized the case study research for its great contribution in
researchers‟ knowledge of the organizational culture. So complying with these views authors
found multiple case study method more appropriate to fully interpret the issue, as case study
it can provide expressive details as regards managerial functions and practices, and also can
enhance the understanding of a particular phenomenon. The study was occupied discovering
key service failures and recoveries of the restaurant brands, and also recovery actions the
recovery actions under the customers‟ insight regarding the particulars. In order to effectively
interpret the issue and increase quality of the researcher‟s engagement with the problem and
the arranged progression, researchers adopted multiple sources to collect the evidence. These
include interviews, participant observation and direct observation. As interview technique has
been recognized as the most effective method to acquire qualitative approach for interpreting
the consumption phenomenon from the perspective of customers (Thompson et. al, 1990), in
this case Qualitative data were collected in form of in-depth interview; form of conversation,
more specifically researchers adopted „Conversation with a purpose‟ (Merriam, 1998, p.71).
Interviews were taken on the both sides, customers on one side and the service provider
(Managers and service staffs) on the other.
Case analysis and findings:
Key findings of the study showed that these small restaurant brands are using customers‟
engagement in order to design effective recovery policies. Their first step for service recovery
strategy begins with prompt response to the customers‟ complain and unconditional
empathetic apology (in appropriate situation). Conversely, argument with customers may lead
towards critical consequences. The next step involves increasing customers‟ participation,
asking for their suggestions for improving the service and recovery strategy. Moreover,
customers‟ feedbacks regarding the perceived recovery can help service providers to handle
similar cases in future. It also helps to understand customers about their role in effective
service delivery. Scholars such (Binter et al, 1997) recognized the role and contributions of
customers in service delivery as a productive resource, contributor to quality, satisfaction and
value and as competitor to the firm. Another single case study on a restaurant brand also
598
confirmed that, in case of small restaurant brand customer involvement (suggestions,
feedback) can help in redesigning the recovery effectively (Shahriar et al., 2016). In this
research it was also found that customer engagement helps to create scope for continuous
development and critically consider those incidents where cost is an important issue for
proper recovery; i.e. replacing the dish in case of problem with the food, or complementary
gifts in case of important lost reservation. However, customers are engage with the designing
the recovery they sometimes blame (partially or totally) for inappropriate recovery actions so
there is a lack chance of dissatisfaction after the recovery. In many cases empathy and
apology better result than „replacing the dish’ or „complimentary dishes’; the traditional
myopic myths of service recovery.
Implications:
This study will help to understand customers‟ expectations regarding the service recovery in
the context of a small service firms, particularly small restaurant brands. Real life practices of
these small firms regarding customer engagement in service recovery will help academicians
to rethink about the involvement level of customer in service area. In addition, it will
facilitate service managers in developing effective recovery approaches through customer
engagement and maintaining low cost issue as well.
References:
Binter, M. J., Faranda W. T., Hubbert, A. R. and Zeithamal V. A. (1997). Customer
contribution and roles in service delivery. International Journal of Service Industry
Management, 8(3): 193-205.
Gronroos, C. (1988). Service quality: the six criteria of good perceived service quality.
Review of Business, 9 (Winter): 10-13.
Hart, C.W.L., Heskett, J.L. and Sasser, W.E.J. (1990). The profitable art of service recovery.
Harvard Business Review, 68 (July-August): 148-56.
Mattila, A.S. (2004). The impact of servive failure on customer loyalty. The moderating role
of affective commitment. International Journal of Service Industry Management, 15(2): 134149.
Merriam, S. B. (1998). Qualitative research and case study applications in education. San
Francisco: Jossey-Bass.
Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1985). A conceptual model of service
quality and its implication for future research. Journal of Marketing, 49. (Fall): 41-50.
Schein, E. H. (2004). Organizational culture and leadership. San Francisco: Jossey-Bass.
599
Shahriar, S. H. B., Arafat, S., Khan, M. F., Islam, M.U., Rahaman, B.M.M., Ahmed, M. R
(2016). Redesigning the Recovery Strategies: A Profitable Reckoning of Customers‟
Expectations. The International Journal of Business & Management, 4 (9): 257- 261.
Stake, R. E. (1995). The art of case study research. Thousand Oaks, CA: Sage.
Stauss, B. and Friege, C. (1999). Regaining service customers: costs and benefits of regain
management. Journal of Service Research, 1(4): 347-61.
Thompson, C.J., Locander, W.B. and Pollio, H.R. (1990). The lived meaning of free choice:
an existential-phenomenological description of everyday consumer experiences of
contemporary married women. Journal of Consumer Research, 17(3): 346-60.
600
APPLYING BALANCED SCORECARD TO HEALTHCARE
ORGANIZATIONS (A COMPARATIVE STUDY OF PUBLIC AND
PRIVATE SECTOR HOSPITALS IN UTTARAKHAND).
Tarun Nawani and R.C. Dangwal
Department of Commerce, HNB Garhwal University,
Srinagar, Uttarakhand – 246174
Email: tarunnawani@gmail.com / rameshdangwal@hotmail.com
Introduction:
Although better performance yields profits to the business and is the top priority, the customers
are the key to progress. The world of services marketing, like others, relies heavily on the
accounting results, projects a grim attitude expanding its influence on the people due to the dying
accounting systems(as they don’t reveal the fuller picture); a constant struggle in the form of
devising new systems to reveal the picture going on behind the screen is the need of the hour;
without it, it would have been just the reporting of the accounting results and would have
definitely contributed to having a view of the short-sightedness of the users of the information
and the persons involved in furnishing the information. Numerous attempts in the form of
SERVQUAL, ABC Analysis, TQM etc. were an attempt to dig deeper for better management of
business. The work in the direction of alleviating the plight was stated in the year 1992 in the
Harvard Business Review when Kaplan and Norton designed Balanced Scorecard(BSC) which
analysed a broad scenario prevailing in the organisations in addition to the just finance; it
searched and brought to light the answers to the questions that remained unanswered; the
approach in respect of this instrument was more logical due to the broad division of the overall
situation into four perspectives, viz.: Financial Governance, Customer Satisfaction, Internal
Business,& Learning and Growth (Kaplan R. S., 2008; Kaplan & Norton, 1996) with Employee
Satisfaction and Internal Environment being sub-parts in context thereof. Hospitals being the
central support of the economy play a greater role by caring for the well-being of the society
601
(Kaplan R. S., 2008; Kaplan & Norton, 1996). For the purpose of the study, the data was
collected from Base Hospital, Srinagar, Uttarakhand (Public Hospital) and, Himalayan Hospital,
Jolly Grant, Dehradun (Private Hospital) by taking a large sample and performing there on a
comparative analysis was using Balanced Scorecard & its components. The respondents in
relation to the study were In-patients, Doctors, Nurses, Paramedics and Technicians, chosen on a
random selection basis on a five-point Likert Scale, they were analyzed for Reliability and
Validity; the results were reported in respect of the Hypothesis formed after the Exploratory
Factor Analysis (EFA) and Confirmatory Factor Analysis (CFA) was performed. The study
revealed that all the components of BSC contributed significantly to the Organizational
Performance, which confirmed the sound footing of the theoretical base of Balanced Scorecard
i.e. the all the components of Balanced Scorecard -- Financial Governance (FG), Customer
Satisfaction(CS), Internal Business(IB), and Learning and Growth (LG), Employee
Satisfaction(ES) and Internal Environment(IE)give a combined effect in LG and all of the FG,
CS, IB, LG, ES, and IE contribute to the Overall Performance(OP) of the organisation.
Research Gap and Research Problem:
Although Balanced Scorecard is a tool for strategy management and performance measurement
in healthcare, it has been used in some studies in the foreign countries very few studies have
been done in India using Balanced Scorecard. A few companies that have adopted Balanced
Scorecard like GE Appliances Ltd, Infosys Technologies, Tata Consultancy Services, Taj Group
of Hotels etc. (Khanka, 2012). Financial Statements don’t depict the complete state of affairs of
the firm (Bose & Thomas, 2007). India has been adopting the Balanced Scorecard @45.28% in
the corporate houses compared to US at 43.90% which is a very positive sign (Khanka, 2012).
Despite of this fact, a few studies have been done in respect of Balanced Scorecard application to
the healthcare sector, the researcher finds that no study has been done on a comparative basis
between public healthcare unit and private healthcare unit in the state of Uttarakhand. The
present study proposes to fill the existing gap in this regard by making comparing public sector
and private sector healthcare units in Uttarkhand, viz.: Hemwati Nandan Bahuguna Government
Base Hospital, Srinagar, Pauri Garhwal, Uttarakhand and Himalayan Hospital, Jolly Grant,
Doiwala, Dehradun, Uttarakhand.
602
Objectives of the Study:
Objective 1:
To analyse the comparative level of satisfaction of the patients as well as
employees in the Public and Private Sector Hospitals.
Objective 2:
To measure the learning orientation of the employees of the Public and
Private Hospitals.
Objective 3:
To find the financial adequacy of Public and Private Hospitals.
Objective 4:
To ascertain robustness of model and that whether all the Perspectives
contribute equally towards Overall Organizational Performance at Public
and Private Hospitals
Research Methodology:
A descriptive study was carried out. The inpatients-Questionnaire covered three parts, viz:
Demographic
Profile,
IB
&
CS
whereas
staff-respondents-Questionnaire
comprised:
Demographic Profile, ES, IE, LG & FG. Response rate, complete in all details in respect of the
Base Hospital was 40%, and in case of Himalayan Hospitals it was 41.67%.
Questionnaires were distributed and a response rate of 41.67% was observed in case of Base
Hospital and it was 40%in case of Himalayan Hospital depicting a total of 250 respondents in
both the cases for two class of respondents—inpatients and staff. The time frame for data
collection spanned from June 2014 to December 2015.
Data Analysis and Results:
In case of Base Hospital, and Himalayan Hospital the Cronbach Alpha was reported at above 0.9
for the constructs taken individually. The data fulfilled the criteria of validity in respect of
content validity, Nomological Validity, and also in respect of Construct Validity, Convergent
Validity, Discriminant Validity & Nomological Validity.
In case of Base Hospital and Himalayan Hospital, Exploratory Factor Analysis (EFA) was
performed. KMO values were reported at 0.931& 0.929(fairly above the limit of 0.5) suggesting
603
that Factor Analysis can be used on the given set of data; Bartlett's Test of Sphericity rejected
Null hypothesis; correlation matrix of the variables is insignificant (p=0.000)(Chawla & Sondhi,
2011). The Total Variance Explained (Eigen values >1) was 72.543% &78.576%. Reliability of
final Scale using split-half method; Cronbach Alpha was reported at 0.947 (Sample 1) &
0.944(Sample 2) for Base Hospital and for Himalayan Hospital at 0.927 (Sample 1) &
0.891(Sample 2).
Thereafter, CFA was performed to confirm that the factors chosen on the basis of theory, refined
by EFA confirm as per model-fit in CFA. Some of the variables were dropped which were
disturbing the model-fit. All the dimensions in CFA had more than 1.96 Critical Ratio. The
model with CMIN/DF, CFI, RMSEA, Lo90, Hi90 values fall within the acceptable criteria of
threshold values &indicate that the model is a good fit (Table 1(a) & Table 1(b)).
Table 1(a): Regression Weight (RW), Mean of Construct, and Model-fit Indices
MEAN
Construct's
Variable
Reference
0.704
0.855
3.63
4.02
ES2
ES13
max
value
Construct's
Variable
Reference
min
value
ES13
max
value
Construct's
Variable
Reference
min
value
ES8
ES
3.81
RW
Construct's
Variable
Reference
mean of construct
details
Model-fit Indices: CMIN, DF, CMIN/DF,
CFI, RMSEA, Lo90, Hi90
234.485, 113, 2.075, 0.966, 0.060,
0.049, 0.071
0.808
0.946
3.56
4.32
IE1
IE3
IE1
IE
4.05
IE3
1.168, 1.000, 1.168, 1.000, 0.024,
0.000, 0.158
129.901, 51, 2.547, 0.980, 0.072, 0.057,
0.087
LG
0.706
0.975
3.49
4.25
604
LG7
LG14
LG10
LG15
0.816
0.986
4.13
4.59
FG6
FG10
FG16
FG
4.43
FG9
3.85
148.952, 74, 2.013, 0.990, 0.058, 0.045,
0.072
0.72
0.981
4.3
4.84
IB7
IB14
IB8
IB
4.58
IB2
165.908, 61, 2.720, 0.979, 0.076, 0.062,
0.090
0.778
0.909
3.98
4.31
CS5
CS17
CS5
CS
4.18
CS8
232.762, 99, 2.351, 0.971, 0.067, 0.056,
0.078
4161.924, 2741, 1.518, 0.945, 0.042,
0.039, 0.044
Overall Model
*ES2: Management concern towards staff, ES8: Instruments well-maintained, ES13: Work-incentive satisfactory,
IE1: Daily requirement management, IE3: Unbiased discipline, LG7: Use latest equipments, LG10:The staff uses
the internet for works, LG14: Study-leave is encouraged, LG15: Innovation is encouraged & patented, FG6: Free
specialized-test for poor don’t affect functioning, FG9: Financial-resources utilized efficiently, FG10: Proportionate
salary for services, FG16: Patents are a source of income, IB2: In emergency the doctor's visit is timely, IB7: The
wards have sufficient number of beds, IB8: The admission procedure is simple, IB14: No scarcity of medicines
encountered, CS5: Doctors are always approachable, CS8: Feeling of satisfaction prevails after talks with doctor,
CS17: Medical assistants keep complete record of patients
Table 1(b): Regression Weight (RW), Mean of Construct, and Model-fit Indices
mean of
construct
details
RW
min
value
MEAN
max
value
min
value
max
value
605
Model-fit Indices: CMIN, DF, CMIN/DF,
CFI, Lo90, Hi90
Construct's
Variable
Reference
Construct's
Variable
Reference
Construct's
Variable
Reference
Construct's
Variable
Reference
1.013
3.156
3.452
ES14
ES13
0.7
ES04
ES
3.22
ES06
69.405, 27, 2.571, 0.982, 0.971, 0.079,
0.057, 0.019
2.98
3.092
IE05
1.119
IE03
0.761
IE13
IE
3.03
IE09
67.963, 20, 3.398, 0.981, 0.974, 0.098,
0.073, 0.124
3.84
4.284
LG15
1.023
LG07
0.806
LG08
LG
3.98
LG14
56.648, 20, 2.832, 0.986, 0.979, 0.086,
0.060, 0.113
1.665
4.256
4.552
FG03
FG13
0.8
FG10
FG
4.39
FG11
43.454, 44, 0.988, 1, 0.978, 0, 0, 0.042
0.913
1.298
2.624
3.236
IB06
IB06
IB03
IB
2.91
IB03
83.323, 53, 1.572, 0.991, 0.975, 0.027,
0.067
0.835
1.011
4.208
4.512
CS11
CS29
CS12
CS
4.41
CS26
68.029, 19, 3.580, 0.989, 0.985, 0.076,
0.128
1955, 162, 1467, 1.333, 0.972, 0.898,
0.037, 0.032, 0.041
Overall Model
*ES04: Staff is competent & qualified, ES06:Hospital functioning satisfactorily, ES14: Satisfactory informal
communication, ES13: Work incentive satisfactory, IE03: Unbiased discipline prevails, IE05:Staff accommodation
606
optimum,IE09:Support affects performance, IE13:Parting indoor patient surveyed for services rendered, LG07:
guidance to personnel about latest equipments, LG08: Regular updatew.r.t. technology improvement, LG14:Study
leave encouraged,LG15: Innovation encouraged, FG03: Cost of ECG, X-ray minimum, FG10: Proportionate salary
w.r.t. services,FG11: Cost per patient minimum, FG13: sufficient funds to deliver good healthcare, IB03: Medical
issue looked upon quickly, IB06: staff works in harmony, CS26: Instruments ready at all times, CS29: X-ray and
ECG facility available for needy patients, CS11: Nurses live up to the patients’ satisfaction,CS12: Nurses work
graciously and with commitment.
Table 2(a): Model Summary, ANOVA & Coefficients table w.r.t. Base Hospital
607
Table 2(b): Model Summary, ANOVA & Coefficients table w.r.t. Himalayan Hospital
The results proved that in case of Base Hospital levels of satisfaction of inpatients and
employees were at 4.18&3.81 respectively, whereas it was at 4.41 & 3.22 in Himalayan
Hospital’s case.
The learning orientation of employees in case of Base hospital was at 3.85 compared to 3.98 in
case of Himalayan Hospital.
The financial adequacy in case of Base Hospital stood at 4.43, whereas it stood at 4.39 in case of
Himalayan Hospital.
The Regression Models are good fit at Base Hospital(R=.998558, R2= 99.7119%) as well as at
Himalayan Hospital (R=.998698, R2= 99.7356%).
Furthermore, F-values are significant
(sig.<5%) for both the cases meaning that null hypothesis of equal difference can’t be accepted.
Its noted that Standardised Beta value differ in both the cases, meaning that all components don’t
contribute equally towards Organisational Performance(Table 2(a), Table 2(b)).
Implications of the Study:
608
Management and employees of the hospital will be able to synergize the efforts after knowing
the areas in which they lack by understanding Balanced Scorecard results. Informed customers
will make better choices.
References:
Ahire, S. L., Golhar, D. Y., & Matthew, A. (1996). Development and validation of TQM
implementation constructs. Decision sciences, 27 (1), 23-56.
Bose, S., & Thomas, K. (2007). Applying the balanced scorecard for better performance of
intellectual capital. Journal of Intellectual Capital, 8 (4), 653-665.
Chawla, D., & Sondhi, N. (2011). Research Methodology: Concepts and Cases. New Delhi,
India: Vikas Publishing House Pvt Ltd.
Kaplan, R. S. (2008). Conceptual foundations of the balanced scorecard. Handbooks of
management accounting research, 3 , 1253-1269.
Kaplan, R., & Norton, D. P. (1996). The Balanced Scorecard: Translating Strategy into Action.
Boston, MA: Harvard Business School Press.
Khanka, S. S. (2012, February). Balanced Scorecard in Corporate India: From Philosophy to
Practice. The Chartered Accountant , 121-128.
609
Cultural influences on service quality expectations: Evidence
YingYing Liao1, Ebrahim Soltani1, Fanny Fong Yee Chan2
1
Hamdan Bin Mohammed Smart University, Academic city, Dubai, UAE
2
Hang Seng Management College, Hong Kong
Email: y.liao@hbmsu.ac.ae / e.soltani@hbmsu.ac.ae/ fannychan@hsmc.edu.hk
Introduction:
Over the last several decades, organizations have come to realise that the salient factor of
sustained competitive advantage is probably to understand, meet, exceed, and even anticipate
customers’ needs and expectations. Such paramount importance of meeting, exceeding, and
anticipating customers’ needs as a means of gaining competitive advantage is clearly evident in
most of universal quality awards, namely, EFQM, MBNQA, and Deming Prize, in which
customer satisfaction has been given the highest weight, and therefore the eligibility of the
applicant firm for the quality award. In particular the issue of customer satisfaction is the case for
service-oriented organisations not least because of the unique characteristics of a service – as
opposed to product (quality).
To this end, service operations and marketing management scholars have been trying to develop
frameworks and models to measure service quality, thereby finding out the strengths and
weaknesses of not only the service provider but also to help the service sector fulfil their
customers’ needs and thereby delight them. This was in particular the position taken by
Parasuraman and colleagues (1985) who developed the very oftcited five-gap model of service
quality and the SERVQUAL tool for service quality measurement. In simple terms, the model
defines the service quality gap as the discrepancy between customer expectations and customer
perceptions of how the service is performed – i.e. the difference between ‘what it is’ and ‘what it
should be’.
Although most companies recognize the paramount importance of satisfying customers’ needs
and boosting customer perceived values in local markets as a means of survival and long-term
success, most recent studies indicate that due to the fierce competition at local level, there is a
610
need on the part of businesses to operate and compete globally. The implication of this trend is
clear-cut: while on the one hand, firms’ primary objective would remain the same in that they are
in operations to serve customers, it also poses a real challenge to their management teams in
terms of how to serve heterogeneous global customers where each country and context has its
own unique and specific cultural norms and values (Keillor et al., 2007; Stauss, 2016).
Research Gap and Research Problem:
Due to current role and contribution of service sector to the economy and rapid pace of
internationalisation of service firms, it is difficult for businesses to establish a universal
marketing strategy which can be effectively used across a complex of diverse national cultures.
A review of the extant literature pertinent to the impact of culture on service quality and its
resultant implications for customer expectations and perceptions indicate that a majority of
aforementioned studies were conducted in the context of developed economies which share the
same homogeneous cultural backgrounds. Absent in thisdebate, though, has been sufficient
exploration of the impact of culture on service quality in less developed or developing
economies. Clearly, using specific, context dependent cultural values can reflect the reality of
social behaviour of a society (Fang, 2010), thereby fulfilling the ever-changing needs of its
people (i.e. customers). As Reimann et al. (2008) have pointed out, such lack of research on
culture and its implications for service quality dimensions highlight a need on the part of
organisational scholars to conduct empirical research on Asian cultures which may provide
different views of explaining the relationship between cultural values and service quality, and
their consequences for customers expectations and perceptions towards services.
Objectives of the study:
Such lack of research is clearly evident in the context of China (and of Chinese cultural norms)
(e.g. Hoare and Butcher, 2008) and more specifically in service-oriented sectors such as
hospitality industry. In doing so, this study attempts to fill in this gap and generates insights, and
develops greater understanding of the impact of Chinese cultural values on service assessment,
which is regarded as a major driver of customer satisfaction, customer perceived value for
money and subsequent customer’s behavioural intentions.
611
Research methodology:
In order to empirically unravel the influence of Chinese cultural values of ‘mien-tzu’, ‘guanxi’
and ‘Hé’ on hospitality customer behavior (Hofstede and Bond, 1988), a survey strategy was
employed so as to target Taiwan hospitality sector and collect appropriate empirical data from
customers of two types of restaurant: (i) five star hotel chain restaurants, and (ii) local chain
restaurants. Building on the theme of cross-cultural service experience, a theoretical framework
was developed, a number of hypotheses were drawn, and a survey instrument was designed,
validated, and data were collected from further empirical scrutiny and analysis (n = 525).
Data analysis and results:
Overall, the findings pose a challenge to the marketing and service research scholars in terms of
applicability of Western dominated cultural frameworks to study customer expectations of more
specific cultural contexts. For example, the results offer no support for the relationship between
gunaxi (personal relationship), and customer service expectations in the five-star hotel chain
restaurants. Instead, the positive impact of mien-tzu (face-giving) on service expectation of
tangible is significant. Findings also refute the significant relationship between perceived value
for money and customers behavioral intentions. Or they disprove a positive relationship between
perceived value for money and customer satisfaction in the local chain restaurants
Implications of the study:
This study makes a contribution to the advancement of Asian management research by diverting
its emphasis from primarily Western-dominated service management research context to the
more unique context of the Asian region so as to explore and examine the peculiarities of
Chinese cultural norms and values and its implications for customer expectations, perceptions,
perceived value for money, and resultant behavioral outcomes, thereby modification of existing
theoretical service quality models. The insights offered in this research suggest that academics,
practicing managers, and policy makers need to acknowledge the importance of cultural norms
and better understand the determinants underpinning a customer’s expectations towards service
612
offerings into their conceptualizations and practices of managing services and their customer
relationships.
References:
Fang, T. (2010). Asian management research needs more self-confidence: Reflection on
Hofstede (2007) and beyond. Asia Pacific Journal of Management, 27(1): 155-170.
Hoare, R. J., and Butcher, K. (2008). Do Chinese cultural values affect customer
satisfaction/loyalty? International Journal of Contemporary Hospitality Management, 20(2):
156-171.
Hofstede, G., and Bond, M. H. (1988). The Confucius connection: From cultural roots to
economic growth. Organizational dynamics, 16(4): 5-21.
Keillor, B.D., Lewison, D., Hult, G.T.M. and Hauser, W. (2007), The service encounter in a
multinational context.Journal of Services Marketing, 21(6): 451-461.
Parasuraman, A., Zeithaml, V. A., and Berry, L. L. (1985). A conceptual model of service
quality and its implications for future research. Journal of Marketing, 41-50.
Reimann, M., Lünemann, U. F., and Chase, R. B. (2008). Uncertainty avoidance as a moderator
of the relationship between perceived service quality and customer satisfaction. Journal of
Service Research, 11(1), 63-73.
Stauss, B. (2016). Retrospective: 'culture shocks' in inter-cultural service encounters? Journal of
Services Marketing, 30(4):377-383.
613
TRACK XII
614
Grocery Shopping Behaviour of Indian Consumer: Reference to
MobileApplications
Shiv Kumar Sharma1 , Anuja Shukla1
1
Dayalbagh Educational Institute (Deemed University), Dayalbagh, Agra-282005
Phone: 9412258180/ 9999172900
Emails: shivkumar_dei@yahoo.co.in/anuja.gshukla@gmail.com
Introduction
M-commerce has become an important topic, which has drawn attention in both industry and
academia . India is soon to become the second largest internet user’s base in the world and has
largest number of internet users in a free market democratic setup.The advancement of internet
in mobile has opened new avenues for the marketers to reach the consumers (m-commerce).
Research Gap and Research Problem
The number of smart phone owners using mobile apps of e-commerce companies has gone up
from 1,680 in 2014 to 4,320 in 2015 (Nielsen,2015). The users of internet on mobile are
expected to reach over 80% of the entire internet accessed in India by June 2016(IAMAI, 2015).
The various sectors like fashion industry, consumer durable, electronic items etc.have received
an overwhelming response, but m-commerce is at nascent stage in the grocery sector. With India
being the next big frontier for smartphone consumption these numbers point to a larger shift in
mobile consumption behaviour. 1/4th of global respondents are already ordering grocery products
online for home delivery and more than halfare willing to use it in the future (Neilsen, 2015).The
previous studies have shown that the research on m-commerce is conducted in several parts of
world, including USA, Taiwan, China and South Korea however the studies from other parts of
the world are rare (Groß, 2015).
615
Objectives of the Study
The purpose of the study was to examine the role of mobile applications (apps) in shopping for
grocery products and to evaluate the impact of demographical characteristics on m-shopping.
Research Methodology
Technology Acceptance Model (TAM) by Davis (1989) has successfully explained the adoption
of technology in various fields. Four variables of TAM (Perceived Usefulness, Perceived Ease of
Use, Behavioural Intention and Attitude)were used to analyse the impact of mobile applications
in the grocery shopping process.Perceived Usefulness is defined as “The extent to which
potential users expect that mobile app will benefit their grocery shopping”. Perceived Ease of
Use is defined as “The degree to which a consumer believes that using a mobile app would be
free of effort”.Behavioral Intention is defined as “How likely one is to buy grocery using mobile
application”. Attitude is defined as “An individual's positive or negative feelings about buying
grocery through mobile application”.The conceptual framework used for study is explained in
Figure 1.
Perceived
Usefulness (PU)
H1
H5
H3
H4
Perceived Ease of
Use (PEOU)
Attitude towards
Mobile App for
Grocery Shopping
(A)
Intention to use
Mobile App for
Grocery Shopping
(BI)
H2
Figure1. Conceptual Framework
The research design is descriptive in nature. The respondents were selected through purposive
and snowball sampling.Primary data wascollected through self-administered questionnaire. The
questionnairecontained questions about consumer’s demographic profile and items adapted from
standard scales to test the relationship among variables. Perceived Usefulness and Perceived
Ease of Use were measured by four items each (Fröhlke, M., & Pettersson, L., 2012), Attitude
towards mobile app for grocery shopping was measured by three items (Fishbein & Ajzen,1975)
616
and Intention was measured by four items (Al-Rahimi et al., 2013).The respondents were asked
to record their responses on Likert scale (1-strongly disagree to 5-strongly agree). The
questionnaire was pretested on 35 respondents. The overall Cronbach’s alpha was 0.952 which
was acceptable. The questionnaire was shared through Facebook page of grocery shopping apps,
email to colleagues and personal contacts. Total 102 responses were received. Only those
responses were considered where consumer agreed to own a smartphone with internet
accessibility resulting into 94 usable questionnaires. Missing values were less than 10%, so
treated using EM approach. The hypotheses were tested using Partial Least Squares Structural
Equation Modelling in SmartPls3, as this approach has less assumptionabout data (Hair et al.,
2011). The demographic analysis was done by cross-tabulation using IBM SPSS 22.
DataAnalysis and Results
PLS SEM tests the entire model at two levels- as discussed below.
Assessment of Outer Structure: The constructs were reflective in nature. The reflective
constructs are measured by determining indicator reliability, convergent validity, internal
consistency and discriminant validity. The Cronbach’s alpha ranged from 0.719 to 0.918 which
seem to be robust as these values are greater than 0.7. Composite reliability of constructs ranges
from 0.948 to 0.834 which are considered to be good. The convergent validity was evaluated as
suggested by Fornell and Larcker (1981). The AVE for all items show convergent validity as the
value exceeds 0.50. The factor loadings were found to be significant (greater than .5) except of
one item which was dropped.The square root of each construct's AVE was larger than its
correlations with any other construct supporting the adequate discriminant validity of the scales.
The above results show that the constructs fit well to the model and the reliability and validity is
firm. All the VIF values were less than 5 showing absence of collinearity (ref. Table 1).
Assessment of Inner Structure:The analysis on internal structure supported all five hypotheses.
The t- values were found to be significant(t>1.96) at bootstrapping of 5000 samples. The
strongest relationship was in support of first hypothesis (β= 0.683, p=0.000) that concludes if the
consumer finds the use of mobile phone easy for purchasing grocery, he is more likely to find it
617
useful as well. The second hypothesis (β= 0.365, p=0.000) and third hypothesis were also
supported (β=0.539,p=0.000). It indicates that if the consumer finds the mobile technologyeasy
to use and useful for his grocery shopping, he will develop a favourable attitude towards it. The
fifth hypothesis states that if user of mobile app perceives mobile app as useful, he will have
positive intention towards the purchase of grocery using mobile app; was supported (β= 0.683,
p=0.000). The fourth hypothesis was also supported (β= 0.284, p=0.050) indicating that if a
consumer develops a positive attitude for technology, he may intend to use it in future.
The study shows successful application of TAM in analysing acceptance of mobile applications
for grocery items in India. The results are in agreement with use of TAM in online grocery
shopping (Kurnia & Chien, 2003) and e-learning (Park, 2009). 90% consumers preferred to use
mobile apps for shopping but only 38% consumers agreed to shop for grocery using mobile apps.
These results show that shopping of grocery using mobile apps is not very well adopted by the
people although the technology is not a problem (ref. Table 2).
Demographical Analysis:
Females preferred to use mobile apps over males for doing mobile shopping but in case
of grocery shopping, males prefer to use mobile apps.
The younger generation (age 18-29) prefers shopping through mobile for both general
and grocery items in comparison to other age groups.
Tier II city consumers prefer to shop using mobile application in comparison to Tier I
consumers. This result is in with agreement to Neilsen Report, 2015 that time spent by
users in non metros (116 min/month) was found higher than in metros (109min/month).
The respondents engaged in private job constituted the largest segment of people
shopping using mobile, followed by students. However in case of grocery shopping, the
largest portion was constituted by students followed by housewife.
The consumers were indifferent of marital status for shopping through mobile apps, but
in case of m-shopping for grocery items, married people agreed to use it more as
compared to unmarried people.
The descending order of preference of shopping through mobile is summarized asUnmarrried Female->Married Male->Married Female->Unmarried Male
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The descending order of preference of grocery shopping through mobile is summarized
as- Married Female->Unmarried Male->Married Male->Unmarried Male
Implications of the study
This study will enrich the literature in the field of m-commerce enabled adoption of technology
using TAM which is currently limited (Gefen and Straub, 2000, Kurnia & Chien, 2003).The
study further extends the area of application of TAM in a new empirical context in terms of
country (India), population (sample is a mix of student, salaried and home makers), area (grocery
shopping) and technology (mobile). The study concluded that consumers are well adapted to use
of mobile apps for general shoppingbut influence of mobile application as a tool was found
limited in grocery sector in consistence to previous studies.This shows that there may be other
reasons that reduce the use of mobile applications for grocery shopping other than technology.
Figure 2: Path Analysis of constructs
PU
PU1
PU1
0.830
0.864
PU1
PU1
0.467
0.831
0.539
0.833
0.457
BI1
A1
0.683
0.884
0.908
A2
0.692
0.934
A3
PEOU2
0.365
0.820
0.767
PEOU3
PEOU4
0.749
0.866
0.494
0.937
A
PEOU1
0.284
PEOU
619
BI
0.583
0.882
BI2
BI3
Table 1: Assessment of Outer Structure
Construct
Mean
SD
Indicator
loading
t-value
Perceived Usefulness
PU1
PU2
PU3
PU4
3.340
3.521
3.755
3.543
1.027
1.079
1.235
1.059
0.830
0.864
0.831
0.833
17.802
21.001
15.844
27.145
Perceived Ease of Use
PEOU1
PEOU2
PEOU3
PEOU4
3.553
3.947
3.979
3.660
1.208
1.152
1.167
1.077
0.820
0.767
0.749
0.866
19.495
11.370
10.727
29.110
Attitude
A1
A2
A3
3.585
3.404
3.468
1.162
1.114
1.127
0.908
0.934
0.937
38.346
60.754
59.069
Behavioral Intention
BI1
BI3
BI4
3.213
3.851
3.383
1.071
1.120
1.177
0.884
0.583
0.882
34.039
4.970
34.343
CR
AVE
0.905
Cronba
ch’s
Alpha
0.861
0.878
0.823
0.643
0.948
0.917
0.858
0.834
0.719
0.633
0.705
Table 2. Assessment of Inner Structure
Hypotheses
t value
p value
Beta
H1
PEOU is positively related to PU
12.33
0.000
0.683
H2
PEOU is positively related to Attitude
4.34
0.000
0.365
Supported
H3
PU is positively related to Attitude
6.45
0.000
0.539
Supported
H4
Attitude is positively related to Intention
1.96
0.050
0.284
Supported
H5
PU is positively related to Intention
3.81
0.001
0.457
Supported
Hyp.
620
Result
Supported
References
Al-rahimi, W. M., Othman, M. S. and Musa, M. A. (2013). Using TAM Model To Measure The
Use Of Social Media For Collaborative Learning, International Journal of Engineering Trends
and Technology (IJETT); 5: 90–95.
Davis, F. (1989).Perceived usefulness, perceived ease of use, and user acceptance of information
technology.MIS Quarterly; 13 (3): 319-340.
Fishbein, M. and Ajzen, I. (1975). Belief, Attitude, Intention, and Behavior: An Introduction to
Theory and Research.Reading, MA: Addison-Wesley.
Fröhlke, M. andPettersson, L. (2012). What factors influence a consumer’s intention to use a
mobile device in the grocery shopping process? A quantitative study of Swedish grocery
shoppers, Lund University.
Gefen, D., Rigdon, E. E. and Straub, D. (2011).An update and extension to SEM guidelines for
administrative and social science research. MIS Quarterly; 35(2): IIIeXIV
Groß, M. (2015). Mobile shopping: a classification framework and literature review.
International Journal of Retail & Distribution Management; Vol. 43 (3): 221 – 241.
Hair, J. F., Ringle, C. M. andSarstedt, M. (2011). PLS-SEM: indeed a silver bullet. Journal of
Marketing Theory and Practice; 19(2): 139-151.
IAMAI Report. (2015). Retrieved January 26,http://www.iamai.in
Kurnia, S. (2003).The Acceptance of Online Grocery Shopping.A.-W. J. Chien (Ed.), 16th Bled
eCommerce.
Neilsen, A.C. (2015). The Future of Grocery E-commerce, Digital technology and Changing
shopping preferences around the world.
Park, S. Y. (2009). An Analysis of the Technology Acceptance Model in Understanding
University Students' Behavioral Intention to Use e-Learning. Educational Technology &
Society;12 (3): 150–162
Venkatesh, V. and Davis, F. D. (2000). A theoretical extension of the technology acceptance
model: Four longitudinal field studies. Management Science; 46(2):186–204
621
When does relationship marketing has the greatest impact on the
behaviour intentions in business relationships? Assessing the
moderating role of environmental uncertainty
Nektarios Tzempelikos1, Kaouther Kooli2
1
Anglia Ruskin University
Lord Ashcroft International Business School
East Road
Cambridge CB1 1PT
Room: Lab 322
E-mail: nektarios.tzempelikos@anglia.ac.uk
2
Bournemouth University
Faculty of Management
89 Holdenhurst Road
Bournemouth, BH8 8EB
Email: kkooli\‟bournemouth.ac.uk
Introduction
Over the last years, many studies have recognized the importance of adopting a relationship
marketing (RM, hereafter) approach in achieving superior results from buyer–seller
relationships. RM efforts build stronger customer relationships and improve financial
performance (Palmatier, Dant, and Grewal, 2007). However, many researchers have provided
evidence that RM can be ineffective in that the seller‟s RM investments lead to disappointing
results (Palmatier et al., 2007) and can have a negative impact on performance (De Wulf,
Odekerken-Schröder, and Iacobucci 2001; see also the emerging body of literature called
„dark side of relationships‟ c.f, Abosag, Yen, and Barnes, 2016). Palmatier et al. (2007)
argued that this inconsistency with regards to the RM performance is due to environmental
effects. Therefore, to design optimal RM strategies, it is essential for businesses to know in
which environmental characteristics does RM has the greatest impact on B2B relationship
performance.
Previous studies have identified environmental uncertainty as one of the most critical
contextual factor (Noordewier, John, and Nevin 1990; Slater, Hult, and Olson, 2010).
Environmental uncertainty makes it difficult for firms to predict the future and the
performance outcomes of a buyer/seller relationship cannot be specified ex ante. The general
622
assumption is that relationship performance is higher in high-uncertain environments mainly
because firms need to adapt and require relational-based exchanges (e.g. enhanced flexibility,
information sharing and negotiated solutions) to achieve competitive advantage in the market
(Cannon, Achrol, and Gundlach, 2000). The current study addresses this issue by focusing on
the role competitive intensity, technological turbulence and market diversity, three frequently
researched types of environmental uncertainty in B2B markets, have on the RM performance
(Achrol and Stern, 1988). Amongst the various aspects of RM performance that have been
proposed in the literature, the current study concentrates on the examination of behaviour
intentions of the customer, viewing RM performance from the customer perspective.
Research Gap and Research Problem
Researchers usually employ one of the two theoretical perspectives for modelling the
behaviour intentions of the customers in business markets: (1) commitment-trust, and (2)
relationship value (cf. Hutchinson, Wellington, Saad, and Cox, 2011). The first perspective
(commitment – trust) originated in the seminal work of Morgan and Hunt (1994) who argued
that commitment is a critical driver of improving behaviour intentions, and commitment and
trust are both crucial for the development of strong customer relationships because customers
act positively toward committed and trusted sellers. The second perspective is led by the
works of Eggert and Ulaga (2002) and Ulaga and Eggert (2005) who argue that the behaviour
intentions of the customers in the business markets are influenced by the relationship value,
which, is determined by the relationship benefits and relationship sacrifices. In contrast to the
commitment-trust perspective, their work suggests that relationship quality can only affect
behaviour intentions indirectly through relationship value.
Although many of the constructs used are similar each perspective suggests different
relational drivers as being the most critical in explaining relationship performance, and
thereby a different mechanism of generating desirable behaviour intentions is proposed. This
indicates that the only way to evaluate the relative impact of environmental uncertainty on
behaviour intentions is to compare the effects of each perspective‟s focal constructs across a
common environmental context (Hunt, 2002). The study of environmental uncertainty across
both perspectives is expected to resolve potential differences between them and will
strengthen our confidence on the applicability of the findings.
Thus, in line with Hutchinson et al. (2011), the current study uses the constructs of
behavioural intentions (BI), relationship quality (RQ), relationship value (RV), relationship
623
benefits (RB) and relationship sacrifices (RS) for assessing the two perspectives of modelling
behaviour intentions of customers in business markets (see Figure 1).
Figure 1: Theoretical perspectives of modelling behaviour intentions
Model 1: Commitment-trust
perspective
Relational Benefits
Behavioral intentions
Relationship Quality
Relational
Sacrifices
Market diversity
Competitive intensity
Technological uncertainty
Model 2: Relationship value
perspective
Relationship quality
Relational Benefits
Relationship value
Behavioral intentions
Relational
Sacrifices
Market diversity
Competitive intensity
Technological uncertainty
Objectives of the Study
Drawing on empirical evidence from 228 UK manufacturers the current study aims to
examine the moderating effect of environmental uncertainty on the relationship between focal
constructs (relational benefits, relational sacrifices, relationship quality and relationship
value) and behaviour intentions across the theoretical perspectives of commitment-trust and
relationship value.
624
The current study aims to contribute to the RM literature by providing insights into the main
research question: under which environmental factors RM is most effective for generating
customer-focused performance outcomes?
Research Methodology
Data were collected by means of a structured questionnaire among purchasing managers in
UK manufacturing firms. A random sample of 1000 companies was obtained from a
commercial list provider, ranging from small enterprises to multibillion companies. The
sample consisted of firms in a large variety of industries, such as machinery and equipment,
chemicals, metal products, food, mineral products, plastic products, and electrical equipment
(a more detailed description of our sample is provided on request). The study focuses on
senior-level managers as they are expected to have an overview of the firm‟s relationships
with the suppliers. A cover letter and questionnaire were sent to the head of the purchasing
unit. The cover letter and survey directions indicated that the survey should be answered by a
“VP/Director/Purchasing manager” or be forwarded to someone familiar with how the firm‟s
purchase decisions were made. The respondents were asked to compare their main supplier
with the second supplier. Firms not responding after three weeks were mailed a follow-up
letter and another questionnaire. A total of 228 completed and usable questionnaires were
returned, a 23% response rate.
Early and late respondents were compared to assess non-response bias via a t-test of
difference in means. No differences were found between the two groups, suggesting thus that
non-response bias was not a problem in our study. All measures used in the study were drawn
from previous studies and adapted for the content of this study. The measures were selected
from extant literature that has undergone prior psychometric scrutiny. All measures exhibit
satisfactory psychometric properties.
Data Analysis and Results
The structural models and the path coefficients were assessed using structural equation
modeling by means of Amos. The global goodness-of-fit statistics of the two structural
models indicate acceptable fit. All path coefficients are significant at the .05 level, which
indicates that both models have satisfactory predictive power.
625
Then, the potential moderating effect of environmental dynamism or market diversity on the
effects of the focal constructs on the BI across the theoretical perspectives is assessed. With
regards to the commitment-trust perspective (model 1), RQ has a more positive effect on BI in
conditions of high competitive intensity (b=0.25, p<0.01) than on those with low competitive
intensity (b=0.06, n.s.). The results show that neither market diversity nor technological
uncertainty significantly moderate the relationship between RQ and BI.
The findings show partial support for the moderating role of competitive intensity in the
relationship value perspective. Specifically, the impact of RQ on BI is greater when
competitive intensity increases (Δχ2 (1) = 5.8, p < .05), whereas RVs impact on BI is also is
not moderated by competitive intensity as its effect does not differ significantly between the
high and low competitive intensity groups. The moderating role of market diversity yields
mixed results. In particular, RQs impact on BI is moderated by market diversity, however the
impact of RV on BI is not significantly moderated. Finally, the results show that technological
uncertainty moderates neither the effect of RQ nor that of RV on BI.
Implications of the Study
The study has two main contributions to the business-to-business (B2B) marketing literature,
which is focused on buyer/seller relationships. First, an integrative examination of the
commitment-trust and relationship value perspectives - that have often been viewed in
isolation from each other- is proposed. Second, against our expectations, a large number of
hypotheses regarding the moderating effect of environmental uncertainty in the linkage
between focal constructs and BI were not supported. This indicates that focal theories (such as
commitment-trust and relationship value) in inter-firm relationships absorb or mitigate the
influence of environmental uncertainty. In other words, endogenous factors appear to be more
important than environmental effects when it comes to evaluating the reasons behind a
successful (or non-successful) relationship in business markets.
Further to the theoretical contribution, this study has some significant managerial implications
too. First, the study provides guidance on how decisions at a relational level can have the
greatest influence on behaviour intentions in business relationships and thereby provides
marketers with a framework that can lead to better RM strategies. In particular, RS are found
to influence RQ weaker than the RB. This indicates that RB displays stronger potential for
improving relationship performance in buyer–seller relationships than cost considerations.
626
Cost competitiveness is a necessary but not sufficient condition to relationship effectiveness
in business markets.
Second, the findings of the study indicate that RQ and RV are strong determinants of BI in
business markets, regardless of the uncertainty of the environment in which it operates.
Important to note that although the study failed to find strong moderating effects of
environmental uncertainty on BI, there are some evidence of environmental effects, mainly
with regards to the competitive intensity. In practice, it is the suppliers‟ role to set up the
relational mechanisms (i.e. investments, cooperation, information sharing, conflict resolution)
to achieve and sustain successful customer relationships. The potential environmental
uncertainty, although not to be ignored, appears to have a relatively smaller contribution in
determining relationship effectiveness.
References
Abosag, I., Yen, D. A., and Barnes, B. R. (2016). What is dark about the dark-side of business
relationships?. Industrial Marketing Management, 55: 5-9.
Achrol, R. S., and Stern, L. W. (1988). Environmental determinants of decision-making
uncertainty in marketing channels. Journal of Marketing Research, 36-50.
Cannon, J. P., Achrol, R. S., and Gundlach, G. T. (2000). Contracts, norms, and plural form
governance. Journal of the Academy of Marketing Science, 28(2): 180-194.
De Wulf, K., Odekerken-Schröder, G., and Iacobucci, D. (2001). Investments in consumer
relationships: A cross-country and cross-industry exploration. Journal of Marketing, 65(4),
33−50
Eggert, A., and Ulaga, W. (2002). Customer perceived value: a substitute for satisfaction in
business markets?. Journal of Business and Industrial Marketing, 17(2/3):107-118.
Hunt, S. D. (2002). Foundations of marketing theory: Toward a general theory of marketing.
ME Sharpe.
Hutchinson, D., Wellington, W. J., Saad, M., and Cox, P. (2011). Refining value-based
differentiation in business relationships: A study of the higher order relationship building
blocks that influence behavioural intentions. Industrial Marketing Management, 40(3): 465478.
Morgan, R. M., and Hunt, S. D. (1994). The commitment-trust theory of relationship
marketing. Journal of Marketing, 20-38.
627
Noordewier, T. G., John, G., and Nevin, J. R. (1990). Performance outcomes of purchasing
arrangements in industrial buyer-vendor relationships. Journal of Marketing, 80-93.
Palmatier, R. W., Dant, R. P., and Grewal, D. (2007). A comparative longitudinal analysis of
theoretical perspectives of interorganizational relationship performance. Journal of Marketing,
71(4): 172-194.
Slater, S. F., Hult, G. T. M., and Olson, E. M. (2010). Factors influencing the relative
importance of marketing strategy creativity and marketing strategy implementation
effectiveness. Industrial Marketing Management, 39(4): 551-559.
Ulaga, W., and Eggert, A. (2005). Relationship value in business markets: the construct and
its dimensions. Journal of Business-to-business Marketing, 12(1): 73-99.
628
Perceived Market Skepticism and Chasm in Market Development:
A study of High-tech Start-Up Firms
Kavita Pathak,
Jaipuria Institute of Management,
Vineet Khand
Gomti Nagar
Lucknow
Email: kavita.pathak@jaipuria.ac.in
Jay Weerawardena,
UQ Business School
University of Queensland
Brisbane Qld 4072 Australia
E-mail: j.weerawardena@business.uq.edu.au
Alastair Tombs
UQ Business School
University of Queensland
Brisbane Qld 4072 Australia
E-mail: a.tombs@business.uq.edu.au
Introduction:
High-tech start-ups are known to play a significant role in driving innovations and generating
increased income streams to the firm and to economy. However, their path to growth is cluttered
with failure, especially in early years since their inception. This has been attributed to the
difficulties the high-tech start-ups encounter in reaching mainstream customers who are sceptical
about adopting the new technology. This is cited in the literature as a critical ‘chasm’ that needs
to be crossed for continued survival and growth of start-ups which requires them to undertake
effective market development strategies addressing market expectations (Moore, 1991;
Easignwood & Harrington, 2002).The difficulties encountered by high-tech start-up firms in
reaching the mainstream market segments have received increased attention in recent high-tech
marketing literature.
629
Research Gap and Research Problem:
Though the body of knowledge on high-tech marketing has grown, the research specifically
examining the market development strategies adopted by successful high-tech start-up ventures
has been limited and fragmented. Broadly, the literature reflects the need for a well-founded
theoretical framework that can be operationalised to explain the preconditions needed for startups to successfully reach mainstream markets. The present study addresses this important
knowledge gap.Within this backdrop, the broader research problem guiding this study is:
How do high-tech firms reach customer segments that are critical for the viability of their
firm?
Objectives of the study:
The key objectives of this study are as follows:
Identify key dynamic capabilities that facilitate the development of effective market
development strategies
Identify the interplay between the technology-intensive of the product and the innovative
market development strategies in the start-up firm’s efforts to reach mainstream markets
Develop a well-founded conceptual model that can be successfully operationalised to
explain the market development process in high-tech start-up firms.
Research methodology:
The proposedconceptual model is presented in Figure 1.1. It was developed using inputs
literature review and interviews conducted with chief executive officers (CEO) and ownermanagers of high-tech start-up firms in Australia and India.
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The key sources for measure development were extant literature, particularly in high-tech
marketing and born global firm internationalisation, existing measures, andfindings of the
qualitative study that was undertaken prior to the survey development. The measures of
perceived market scepticism (Kheng& Al-Hawamdeh, 2002; Rao, Truong, Senecal& Le, 2007),
technology-intensive innovation (Chandy&Tellis, 1998) and firm performance (Morgan
&Berthon, 2008; Pla-Barber &Escriba´-Esteve, 2005) were suitably adapted after modification to
suit the context of this study. Measure for niche-focused market development was developed
afresh.Niche-focused market development was conceptualised as a firm’s approach of market
development by offering well-supported whole product/services, and engaging in intense
customer education and entrepreneurial marketing approaches.
The total design method (Dillman, 1978) guided the design of the study. In pilot testing, the
survey instrument was mailed to 10 owner-managers in high-tech start-up firms and they were
then approached via telephone and Skype. The refined conceptual model was tested in a large
mail survey of high-tech start-ups in India. The survey data was collected online and was fully
compliant to the UQ Business School Ethics Committee Guidelines. Participants in the survey
were founders/owner-managers of high-tech start-ups, and a sample size of 300 completed
responses was achieved with a response rate of nearly 40%.
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Data analysis and results:
The data collected was cleaned and prepared for analysis following the prescribed procedures
(Hair et al, 2010). All the survey responses included in the study were complete in all respects,
therefore missing data was not an issue in this study. The measurement models of the constructs
were having adequate model fit and all loadings were within the prescribed threshold, with the
exception of few which were marginally below the threshold. The scales used were having
adequate composite reliability, however niche focused market development had AVE and CR
value below the threshold. However, the literature suggests a slightly relaxed cut off of 0.45 as
reasonable for newly developed scales (Fornell&Larcker, 1981; Netemeyer, Bearden, & Sharma,
2003). As items in the scale were valid and had unidimensional measures, these lower cut offs
were acceptable (Veryenne, Hine, Coote & Parker, 2016).The complete structural model was
tested using AMOS based on SPSS.version 22. The measurement models were assessed using
confirmatory factor analysis (CFA). The diagnostic information, such as standardised residuals
(i.e. the difference between observed and estimated covariance) and modification indices (i.e.
calculation for very relationship not specified in the model), were used to identify possible issues
with the measures (Hair et al., 2010).
The three hypothesized relationship between technology intensive innovation and perceived
market scepticism (β=0.648); Perceived market scepticism and niche focused market
development (β=0.135) and niche focused market development and firm performance (β =0.554)
were supported. The final model (figure 1.2) emerged based on the suggested direct relationship
between technology intensive innovation and Niche focused market development, following
which a test of mediation was undertaken using bootstrapping with bias corrected confidence
interval method for testing the relationship of niche focused market development with perceived
market scepticism. This suggested relationship was statistically significant (i.e. p<0.01, lower0.507, upper-0.765 and zero not included in the range).
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Figure 1.2 the final model
Table 1.1: Model fit Indices
χ2
p
χ2/df
GFI
CFI
TLI
SRMR
RMSEA
0.998
0.319
0.998
0.998
1.000
1.000
0.010
0.000
The model had a good fit (table 1.1). The model χ2value of 0.998 was marginally below the
acceptable threshold of 1.00 to 3.00. While the associated p value (0.319) was insignificant
(>0.05). The GFI (0.998), CFI (0.998), were all above the acceptable thresholds; while SRMR
(0.010) and RMSEA (0.000) were below the acceptable cut-off of 0.05. The model therefore has
a good fit.
Implications of the Study:
The findings suggest that technology intensive innovations face consumer scepticism; which can
be effectively addressed if a niche focused market development strategy is followed.
Implications of the study for practise of high-tech marketing are fairly strong. High-tech start-up
firms are dually constrained by lack of resources and lack of legitimacy as a reliable marketer
and brand. Support for the hypothesised relationship between perceived market scepticism and
niche-focused market development suggests that high-tech start-up firms need to address the
issues arising from this scepticism. If left unaddressed, market scepticism has the potential to
create the much known vacuum in the firm’s sales i.e. the chasm.
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Similarly the study makes strong contribution to the policy planning on supporting high-tech
start-up initiatives. In comparison, to the nearest rival China and the region the average early
stage entrepreneurship rates in India still leave much more to be desired. The ecosystems
conducive to entrepreneurship and technology entrepreneurship need to be put in place. From
3,100 start-ups in 2014 to a projection of more than 11,500 by 2020 indicates a strong rise in
early entrepreneurial activity. However, in comparison to China’s 80,000 plus start-ups in 2014
(The Wall Street Journal, 23rd September, 2015), this appears to be on the lower side. The policy
planners face the dual challenge of improving the rate of overall entrepreneurial activity and
controlling for start-up failures. The findings of the study point towards the need for a niche level
marketing effort supported by policy planners; by way of providing targeted cluster-based
market knowledge and platforms of networking and engagement with prospective clients.
References:
Chandy, R., & Tellis, G. (2000). The incumbent’s curse? Incumbency, size and radical product
innovation. Journal of Management, 64(3), 1-17.
Dillman, D. A. (1978). Mail and telephone surveys (3). Wiley Interscience.
Easingwood, C., & Harrington, S. (2002). Launching and re-launching high technology products.
Technovation, 22(11), 657-666.
Fornell, Claes& David F. Larcker (1981), Structural Equation Models with Unobservable
Variables and Measurement Error: Algebra and Statistics. Journal of Marketing Research,
18 (August), 382-88.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis: A
global perspective. Upper Saddle River, NJ: Pearson Prentice Hall.
Kheng, C. B. & Al-Hawamdeh, S. (2002) The Adoption of Electronic Procurement in
Singapore, Electronic Commerce Research, 2(1-2), 61.
Netemeyer, R. G., Bearden, W. O., & Sharma, S. (2003). Scaling procedures: Issues and
applications. Sage Publications.
Moore, G. (1991). Crossing the chasm: How to win mainstream markets for technology
products.Harper Business, New York, NY.
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Morgan, R. E., &Berthon, P. (2008). Market Orientation, Generative Learning, Innovation
Strategy and Business Performance Inter‐Relationships in Bioscience Firms. Journal of
Management Studies, 45(8), 1329-1353.
Pla-Barber, J., &Escribá-Esteve, A. (2006). Accelerated internationalisation: evidence from a
late investor country. International Marketing Review, 23(3), 255-278.
Rao, S. S., Truong, D., Senecal, S., & Le, T. T. (2007). How buyers' expected benefits, perceived
risks, and e-business readiness influence their e-marketplace usage. Industrial Marketing
Management, 36(8), 1035-1045.
Verreynne, M., Hine, D., Coote, L. & Parker, R. (2016) Building a scale for dynamic learning
capabilities: the role of resources, learning, competitive intent and routine
patterning. Journal
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Business
Research, 6910:
4287-4303.
doi:10.1016/
j.jbusres.2016.04.003
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TRACK XIII
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Learning Co-Creation: Promoting Effort Exertion by Students
Praveen Aggarwal1 and Amiya Basu2
1
University of Minnesota Duluth, 1318 Kirby Drive, Duluth, MN 55812, USA
2
Syracuse University, 721 University Avenue, Syracuse, NY 13244, USA
Email: paggarwa@d.umn.edu / abasu@syr.edu
Introduction:
To better understand the factors affecting students’ satisfaction with their college experience, the
U.S. Department of Education sponsored a three-year long study, involving 12,000
undergraduate students from 40 different colleges and universities. A critical finding of this
massive study was that the best predictor of students’ satisfaction was the effort exerted by them
(Pace 1982). What students got out of their college experience was a function of how much
effort they put into it. As marketing educators make progress in incorporating the “voice of their
customer” in their teaching, they must not lose sight of the fact that the service context of
education is one of co-creation. Students are not mere consumers of education, they are partners
in its co-creation. Faculty must hold students responsible for exerting the effort to co-create the
learning experience. In this study, we examine the factors that promote student effort and
demonstrate that greater effort leads to higher satisfaction.
Research Gap and Research Problem:
Active participation of students has been shown to be a critical prerequisite for learning. Brown
and Peterson (1984) have shown effort to have a direct impact on satisfaction which is
independent of the performance or outcome. Effort creates a feeling of self-worth and selfdignity and feeds people’s desire to be viewed as diligent and industrious. Also, from a cognitive
dissonance theory perspective, one would expect that students would evaluate a course more
favorably if they expend more effort in it to justify the extra effort. In the context of patrons’
satisfaction with a gym, Aggarwal and Basu (2014) show that the effort exerted by the patrons
has a positive impact on their satisfaction with the gym. We propose that students should have a
637
similar experience as a gym’s patrons: what they get out of the service experience should be a
function of what they put into it.
Objectives of the Study:
The objectives of this study are twofold: first we examine the relationship between student effort
and satisfaction. Second, and more importantly, we examine the impact of three factors on
student effort: course relevance, quality of instruction, and instructor likeability. We also
examine a set of conditions that can enhance these three factors.
Research Methodology:
Student at a medium sized US university participated in the study. A survey questionnaire was
administered to six different undergraduate business classes. The classes were taught by six
different instructors. The study was conducted about one week before the last class session of the
semester to make sure the student had adequate opportunity to evaluate different aspects of the
course. A usable sample of 250 respondents was obtained. For data analysis, the scale items were
averaged for each of the constructs. Data were analyzed using a path analytic model.
Data Analysis and Results:
Of the three antecedent variables, perceived instruction quality had the largest positive impact on
student effort (standardized coefficient = 0.23, p < 0.01). Instruction quality was positively
influenced by the perceived knowledge of the instructor (standardized coefficient = 0.61, p <
0.01) as well as by the instructor’s organization (standardized coefficient = 0.60, p < 0.01).
To the extent that a course was personally relevant to a student, s/he invested greater efforts into
it (standardized coefficient = 0.19, p < 0.01). Course relevance, in turn, was positively affected
when a student had a better understanding of the course’s learning goals (standardized
coefficient = 0.57, p < 0.01). Interestingly, personal goal clarity did not have any impact on a
course’s personal relevance.
We expected an instructor’s likeability to have a positive impact on the amount of effort exerted
by students in that course. However, our results indicate a reverse relationship: the more likeable
an instructor is, the lower the amount of effort students put into that instructor’s course
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(standardized coefficient = -0.17, p < 0.01). We do find that an instructor’s likeability is
positively impacted by his/her responsiveness (standardized coefficient = 0.12, p < 0.01) and
perceived fairness (standardized coefficient = 0.75, p < 0.01).
Finally, our study shows that students who exert greater effort in a course would also be more
satisfied with that course. Student effort led to greater satisfaction with the course (standardized
coefficient = 0.21, p < 0.01).
Implications of the Study:
As noted by Astin (1984), student effort (time and energy) is a finite resource. Academic
institutions are competing against other realities of students’ lives that demand their time and
energy. The extra hours that a student might spend working in order to pay for the rapidly
increasing cost of college or the number of hours spent on social media have a direct impact on
the energy and time left to expend on academic endeavors. The results of our study show a clear
and positive relationship between student effort and their satisfaction with the course. This link
can be used by instructors to frame the educational context as one of service co-creation, where
students have a responsibility for being partners in the creation of a meaningful learning
experience. Instead of treating students as customers of higher education, we should view them
as patrons of a fitness center where they are held responsible for making an effort to get the best
possible outcome.
As suggested by our research, instructors can take specific steps to elicit greater effort from their
students. To the extent that they clearly articulate the learning objectives of a course and help
students understand the link between the course and their own personal and career goals, they
can enhance the course’s personal relevance to the students. Greater personal relevance will yield
greater effort on the part of the student. Similarly, high quality instruction also elicits greater
student effort. Both subject matter expertise as well as organization can help enhance a course’s
perceived quality. Finally, the negative relationship between instructor likeability and effort
needs further investigation. Studies have shown that higher instructor likeability is associated
with higher instructor rating. However, our study suggests that the relationship between
instructor likeability and student effort is negative. Easy instructors may be better liked than
639
demanding instructors (Brady 1988), but demanding instructors can get students to exert greater
effort, which ultimately results in greater student satisfaction.
In order to create a productive and wholesome learning experience for their students, instructors
need to incorporate not only the voice of their students in their teaching, but also include
strategies that encourage greater effort exertion on the part of their students.
References:
Aggarwal, P. and Basu, A. K. (2014), “Value Co-Creation: Factors Affecting Discretionary
Effort Exertion,” Services Marketing Quarterly, 35 (4): 321-336.
Astin, A. W. (1984), “Student Involvement: A Developmental Theory for Higher Education,”
Journal of College Student Personnel, 25 (4): 297-308.
Brady, P. J. (1988), The Effects of Course Demands and Grades on Anonymous Versus NonAnonymous Evaluation of Professors, Paper presented at the Annual Meeting of the American
Educational Research Association, New Orleans (April). Abstract ED293900.
http://www.eric.ed.gov.
Brown, S. P. and Peterson, R. A. (1993), “Antecedents and Consequences of Salesperson Job
Satisfaction: A Meta-Analysis and Assessment of Causal Effects,” Journal of Marketing, 30 (1):
63-77.
Pace, C. (1982), Achievement and the Quality of Student Effort. Report for the National
Commission on Excellence in Education, Washington, DC.
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Application of Design Thinking in Innovating Pedagogy in
Management Education
Dr.Vidya Suresh1 and Dr. M Selvalakshmi 2
1
Associate Professor, Thiagarajar School of Management
PambanSwamy Nagar, Thiruparankundram, Madurai - 625005
Email: vidyasuresh@tsm.ac.in
2
Associate Professor & Principal, Thiagarajar School of Management
Pamban Swamy Nagar, Thiruparankundram, Madurai - 625005
Email: selvalakshmi@tsm.ac.in
Introduction
Design thinking is a system that uses the designer‟s sensibility and methods to match
people‟s requirements with what is technologically feasible. It is also about what a viable
business can convert into market opportunity and customer value. It has a holistic approach
with end to end connectivity from the users to the inventors supported by timely interventions
of people like engineers, educators, designers, marketers, ethnographers, musicians, writers
etc. (Tim Brown, 2008). It is a methodology that covers the spectrum of innovation activities
that has a human centred approach. Design Thinking is seen as an answer to the current and
future challenges of an organization.
The paper is an outcome of practical application of design thinking model in an education
institution, “Thiagarajar School of Management”, which was ranked 15th by NIRF-2016,
Ministry of Human Resource Development, India (website of MHRD, India).
The first
insight was gained from the stated vision of the institution emphasizing on its emergence as
an “Academic institution of choice amongst management students and faculty and employers
alike” (TSM official website).
An important component of this paper focuses on pedagogy which was innovated and the
challenges in testing and implementing the same. The institute‟s motto of “Learn to Learn”
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was one of key driving force during the development of pedagogy. The team of researchers
made an attempt to explore the design thinking based approach to teach core management
subjects such as Marketing, HR, Economics and Finance to the budding managers. This
innovative pedagogy was named as “Integrative and Interactive Approach” (IIA). The
approach was tried and tested among the students of a particular batch. After examining the
results of the exercise and encouraged by the positive outcome, the pedagogy was extended
to entire class of first year students of the institute. Thus, it enabled the management to
incorporate the voice of the customers that is the students; the faculty members; placement
and the board members through model of design thinking.
This paper is organized in 4 sections. First section discusses about the concept and models of
design thinking. Review of literature to support the evolution and development of design
thinking fits in the second section. The third section elaborates application of design thinking
in management institution. This section also discusses about the process and methodology
that had gone into applying design thinking in the institution. Finally, in the last section, the
major results are summarized and some research questions are raised for further empirical
investigation. This section also has a discussion on the cost of running the pedagogy,
continuous evaluation of students and the challenges faced by faculty members and
management in implementing the same.
About Design Thinking
Tim Brown, CEO of Design and Innovation firm, IDEO states in an interview:
“Design thinking is all about upgrading within constraints.”
Design Thinking can be defined as a discipline using designer‟s sensibility and methods to
match people‟s needs with what is not only technologically feasible but also a viable business
strategy that can convert in to customer value and market opportunity. Thus, not particularly
limited to any specific area of expertise or industry, it is applicable to all walks of life which
are driven towards creating new and innovative ideas to solve problems (Tim Brown, 2008).
With growing complexities that today‟s business grapple with, solutions in silos prove to be
insufficient. Hypotheses about the future are a lot trickier to deal with than those about the
present (Hess and Liedtka, 2016). The VUCA (Volatile, Uncertain, Complex and
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Ambiguous) nature of the 21st century makes it all the more unnecessary for organisations to
look for path breaking ideas and strategies.
Today‟s business houses predominantly use analytical mode of thinking where the focus is on
diagnosing from what already exists. Design Thinking on the contrary has a rhetorical
approach which focuses on designing alternative futures. It has its origin from architectural
design and has extended to product design (Morin, 2016). “Innovate or perish” emphasizes
the relevance of giving up the old to make way for the new “Demo or Die” (which is the
motto of MIT Media Labs) recognizes the significances of prototyping for a pragmatic
approach. It endorses the fact that true innovation happens after several iterations and
promotes multiple stages of iteration-divergence and convergence to approach complex
business problems in a human centred way.
Many popular companies have committed to become leaders in design thinking approach,
due to the business competitiveness in the design and development of their products and
services (Dunne and Martin, 2006). It is recognized as a new paradigm for handling problems
in disciplines such as IT, Medicine, Business and Education (Dorst, 2011). According to the
Design Management Institute‟s study on the Design Value Index (DVI), a market
capitalisation- weighted index, design led companies such as Apple, Ford, Herman-Miller,
IBM, Intuit, Newell Rubbermaid, Nike, Procter & Gamble, Stanley Black & Decker,
Starbucks, Starwood, Steelcase, Target, The Coca- Cola Company, Walt Disney, and
Whirlpool Corporation Indicate 10- year returns of an astounding 219% over that of Standard
and Poor‟s 500 index(“S&P 500”) from 2004-14. On the contrary, Sobel and Groeger (2012)
in their study about the adoption of Design Thinking in Australia inferred that the benefits of
design and Design Thinking in the pursuit of innovation by business are poorly understood.
Several models of Design Thinking have been published and defended as the most
appropriate. Few well known models are the 3 I model by Brown & Wyatt (2010) and the
HCD model, both developed by the design agency IDEO. The Double Diamond model from
the British Design Council, the Design Thinking model of the Hasso-Plattner Institute and the
Service Design model, proposed by Stickdorn and Schneider (2010) also list amoung the
popular models.
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Application of Design Thinking in Education
Even after more than six decades of reforms in education, India is still about “cram, jam and
pass the exam”. Poor education cannot cultivate higher aspirations and career. Like black
money and corruption, there is no way to easily reform education in India. An intense
scholarly focus group debate about the value of MBA programs from multiple stakeholder
perspectives need to drive initiatives in improving the educational framework of MBA
programs. The current education system equates intelligence with analytical ability, considers
analytic thinking to be “good” thinking and fails to generate innovative divergence in
thinking pattern (Leavitt, 1989). Enhancing students‟ design thinking skills might help them
to have an understanding of the methods and means of designers approach to problems
thereby enabling them to face problems with more readiness, be more creative resulting in
better innovative solutions (Razzouk and Shute, 2012).
Sparks & Hirsh (2000) said:
“We cannot expect teachers to teach what they do not know, nor is to use yesterday
training to prepare today’s students for tomorrow’s future.”
While several models of Design Thinking are developed and deployed by organizations, the
3I Model developed by IDEO in 2001 has been chosen as appropriate to address the
challenges in teaching the core subjects to the students as it supports the context of social
innovation. The 3I‟s in the model indicate Inspiration, Ideation and Implementation
describing the three phases. In the inspiration phase, the focus is on identifying the design
problem or opportunity and elaborating on the brief based on close observation of the target
group and environment. The second phase, Ideation is about forming an interdisciplinary
team which brainstorms and comes out with creative ideas and it its visual representation
which tends to serve as possible solutions. The third phase of Implementation is when ideas
turn out to action plans through prototyping which are tried, tested and iterated based on the
feedback and ready for final communication to be propagated.
The exercise started with a positive note, when the Madurai based Management Institution
was rated among the top 15 institutions in the national level ranking and questions were
raised on the efforts needed to sustain and grow further. To cater to the requirements of all
the stake holders, management decided to embark on a unique curriculum designing and
delivery method which would set its students ahead of the competition. An exploratory study
644
was thus conducted to infuse and foster an Integrated and Interactive learning procedure
based on the Design Thinking approach. The exercise was aimed at enabling the institution
acquire a differentiator to position itself in the market place. This method was named as
Integrative and Interactive Approach (IIA).
References
1. Brown & Hyatt. (2010).The DT model of 3 I‟s. Available in
http://www.flickr.com/photos/9698909@ N02/, 02/05/2012).
2. Brown, T. (2008). Design Thinking. Harvard Business Review, September 2008.
3. Design Value Index Results and Commentary, DMI, 2014
4. Dorst, K. (2011). The core of „design thinking‟ and its application. Design Studies.
32[6]. doi:10.1016/j.destud.2011.07.006 521.
5. Dunne, D., & Martin, R. (2006). Design thinking and how it will change management
education: An interview and discussion. Academy of Management Learning &
Education. 5, 512–523. doi:10.5465/AMLE.2006.23473212
6. Hess, E.D., & Liedtka, J., M. (2016). The learning launch: How to grow your
business with the scientific method. Design Thinking, Entrepreneurship, Innovation
and Growth. June 2016, Thinking, Entrepreneurship, Innovation and Growth.
7. https://www.nirfindia.org/Ranking, last accessed 3October 2016.
8. Leavitt, H., J. (1989). Educating our MBAs: On teaching what we haven't taught.
California Management Review. 31[3], 38-50.
9. Louis Morin, 2016, An overview of Design thinking, Available at
http://www.dmi.org/?WhatisDesignThink, last accessed 3October 2016.
10. Marc, S., & Jakob, S.(Edts.) (2010). This is service design thinking. basic - tools cases. Amsterdam: BIS Publisher.
11. Razzouk, R., & Shute, V. (2012). What is design thinking and why is it important?
Review of Educational Research. 82[3], 330-348. Doi: 10.3102/0034654312457429
© 2012 AERA. http://rer.aera.net 330.
12. www.tsm.ac.in, last accessed 3October 2016.
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Incorporating Voice of Customer in Management Education
Ram Komal Prasad, Sanjeev Verma
National Institute of Industrial Engineering (NITIE), Mumbai, India
Prajapatikomal71@yahoo.com, sanjeevnitie@gmail.com
Introduction
Management studies have acquired a new dimension as a stream of education and training
during last two decades in India. It is significant branches of higher education where one can
observe the immediate results of experimentation or practice of management principles on
the overall business operations. The field of management education is constantly evolving,
which has made it practical and dynamic in nature with its principles acquiring new shapes as
per the changing business and economic environment (Verma and Prasad 2012, Prasad and
Jha 2013). Further, these new principles and techniques are being used in the management of
an organization to improve business performance, quality of services, overall productivity
and profitability.
The term voice of customer was popularised in 1980’s when the basic idea of new product
development as an outcome of product life cycle study took place in marketing management
literature. The basic understanding of how customer uses the product, level of satisfaction,
opinion about product performance enabled producers in modification and solid predictive
information on the success or failure of selling the product/services.
The voice of customer (VOC) is a process of capturing customers’ requirements in the
marketing and sales of products or services. It produces a detailed set of customers needs and
wants which may be organised into a hierarchical structure. There are four aspects of VOC
i.e. customer needs, hierarchical structure, priority and customers perceptions of
performance. A study on voice of customer typically consists of both qualitative and
quantitative that may generate important output and benefit to product developers and service
designers. VOC provides a detailed understanding of customers’ requirement, common idea
for products/ service development, key input for appropriate design and specification for new
products/ services which are catalyst for product innovation. Marketing is an integral activity
that attempts to design the product (physical features), influence customer perception,
identify the dimensions of customer needs and how customer form preference with respect to
those needs.
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Research Gap and Research Problem
•
Over the years few researches have been undertaken and published on voice of customer.
The focus of majority of them are health, IT, retailing, banking and finance etc. but due
attention has not been paid to management education.
•
There is few research papers published on voice of customer in Indian context on higher
education but there are sparse study available on management education.
•
There are generic scales available to measure service quality and customer loyalty but there
is a dearth of scientific scale to measure voice of customer in management education.
Objectives of the study
To access voice of customer and its’ impact on management education in private
management institutions in north India.
To identify important dimension/ factors that determines voice of customer in management
education in private management institutions north India.
To find critical success factors that may improve voice of customer positively in private
management institutions in north India.
To correlate the service quality and voice of customer in private management institutions in
north India.
Research methodology
The population of interest in the present study is registered students pursuing management
education (MBA) in private management institutions in north Indian states. The management
students are considered as subjects in this study because they are the immediate customers of
institutes who experience the service as provided by the institution. Stratified random
sampling method was used for selection of respondents in this study for two reasons, firstly,
it ensures representation of all important subpopulations and secondly, it increases the
precision of finding without increasing cost (Malhotra and Dash, 2011). From each of the
selected sample institutions, at least 10 students belonging to final year of the program were
randomly selected according to their availability in the institutes on the day of data
collection. In northern India the total number of private management institutions are 1013 out
of which 51 institutions were sampled and approx 10-12 respondents from each institutions
amounting 510 respondents ( 5% of the sample) Israel, G. D.(1992; 2009).
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Data analysis and results
From the present research study, we identified six most important independent
factors/variables that determine the VoC (dependent variable) on management education in
private institutions, which emerged as Academic Aspects(AA), Professional Assurance(PA),
Behavioral Responses and Supports(BRS), Industry Institute Integration(III), Nonacademic Aspects(NAA), and Physical Supports(PS).
Similarly, the researcher identified and included eight demographic factors: gender, parents’
occupation and income, geographical location, graduation background of respondents,
medium of education, mode of admission and work experience that influence the Voice of
Customer (VoC).
For private management institutions, it was found that the voice of customers showed the
highest mean response of their perception on Professional Assurance (3.76), followed by
Behavioral Response and Supports (3.74), Academic Aspects (3.68), Physical Supports
(3.55), Industry Institute Integration (3.47) and the lowest mean for Non-academic Aspects
(3.37) on five point Likert scale of questionnaire starting from highly disagree to highly
agree.
It appeared that the students valued Professional Assurance most important dimension for
achieving their career objectives, followed by Behavioral Response and Supports, Academic
Aspects, and Physical Supports. It also appears that they have ranked Industry Institute
Integration and Non-academic Aspects as the lowest.
However, the researcher found variance in the responses by conducting ANOVA. There was
a significant difference between the parents’ occupation and Physical Supports, geographical
location and Physical Supports, graduation background and Industry Institute Integration,
and medium of education and professional assurance.
The post hoc test revealed the exact group that laid significant difference between the
geographical location (Urban, capital city) and Physical Supports. There was a significant
difference within graduation background (Arts, Business management) and Industry Institute
Integration. Similarly, in the case of admission mode (centralized test and state test) had a
significant difference with Industry Institute Integration. Considering the factor of work
experience of students, it also displayed a significant difference (between no experience and
two and above years) with Behavioral Response and Supports.
The regression analysis revealed that out of six VoC parameters only four parameters viz.,
Behavioral Responses and Supports, Professional Assurance, Physical Supports and Industry
648
Institute Integration were the most important and significantly contributed for accessing
voice of customer (students). The other parameters, i.e., Academic Aspects and Nonacademic aspects had no significance as perceived by the respondents.
The R value of 0.714 indicated a good level of the prediction. The R2 value (0.510) showed
that the independent variables (BRS, PA, PS and III) explain 51% of the variability of the
dependent variable (Voice of Customer). This indicates there must be other variables that
have an influence on respondents. The difference between R2 and adjusted R2 is 1% (0.510–
0.506= 0.004). This means that if the model were derived from the population rather than a
sample it would account for approximately 0.4% less variance in the dependent variable
(VoC). Further, the value of F-ratio is 131.562, which is significant at p (sig.) value <.005,
i.e., 0.000< 0.005, A small value of F indicates that most of the variation in the dependent
variable is unexplained. There is less than 0.5% chance of F-ratio being this large. Therefore,
the regression model significantly enhanced the ability to predict voice of customer
(dependent variable).
The ß (Beta) values represent the relationship between VoC factors. According to the model,
Behavioral Responses and Supports, Professional Assurance, Physical Supports, and Industry
Institute Integration were found to predict 51% of the variance in VoC and the level of
significance was below 0.05, implying that the given independent variables worked together
to predict VoC. However, Behavioral Response and Supports was the highest predictor of
variance for VoC with the magnitude of Beta Coefficient = 0.301, and t=6.405, followed by
Professional Assurance (Beta = 0.268, t=6.123), Physical Supports (Beta = 0.204, t=5.558)
and Industry Institute Integration (Beta= .099, t= 2.463).
Students’ perception regarding VoC in institutions was mainly decided by BRS, PA, PS and
III. BRS comprising of grievance management needs concern of students, aid of supporting
staff and proper attention of teachers in learning and caring for students. Professional
Assurance comprises following the standards, just and fair internal evaluation, regular
conduction of classes, examination, placements, and record-keeping. Physical Supports
comprises of appealing infrastructure, state-of-the-art computer labs, libraries, spacious class
rooms, gardens and landscape, scope for future extension, medical and banking facilities, WiFi, and well-managed hostel accommodation. Industry Institute Integration focuses on issues
like inviting practicing managers from industry to deliver lectures and conduct training
sessions, students’ placements for on-the-job training, organization of seminars and
workshops regarding industrial and other relevant issues.
649
The competition among management institutions is high, so most of the private institutions
do maintain BRS, PA, PS and III in their institution. The other two VoC attributes were
eliminated from the model, i.e., Academic Aspects, and Non-academic Aspects. The
Academic Aspects was not up to satisfactory level as curriculum not being updated regularly,
lack of relevance of the pedagogy, ineffective lecture delivery, in-effective system of
examination, least scope of research, and insufficient study material. These institutions are
affiliated to some public university and are bound to practice the prescribed norms.
The Non-academic Aspects attributes include socio-cultural and sports events organized
along with soft skill and personality development programs. The private institutions have
small faculty strength and have neutrality towards non-academic activities due to office
power and politics. Private institutions have to manage their funds very strictly and have
primary concerns towards saving and reinvestment. It causes a serious gap in their perception
on VoC and may be the reason why AA and NAA were eliminated in private institutions.
Implications of the Study
The present research is aligned with regard to the effectiveness of different methods for
capturing the VoC. Originating from a quality debate by improving ‘precision’ on customer
needs, we have started to address that voice of customer which is mediated by few other
dimension/ factors (controlled or uncontrolled). In the process of research we developed a
scale and believe that it begins to deal with the gaps and anomalies in the existing research
into VoC methods. In our view, this model will help institutions to understand the way in
which they could perform and secure students interest in management education.
Management institutions will be able to use our model to design education delivery pitches
and pedagogy in a way that will improve their success rate with future academic interests.
Listening to and understanding the voice of the customer is crucial to restoring consumer
trust in businesses education and building loyalty, engagement and advocacy. Aside from
just creating an exciting brand, institutions today must be aligning their communications and
service delivery with higher values. They must also set up a formal VoC program and
actively be in collecting, managing and acting on students’ feedback. Ultimately, it will be
those institutions that truly listen to their students and recruiting companies that will not only
win students’ trust and set themselves apart from their other competitors too.
650
References
Israel, G. D. (1992). Determining sample size. University of Florida Cooperative Extension Service,
Institute of Food and Agriculture Sciences, EDIS.
Israel, G. D. (2009). Determining sample size, agricultural education and communication
department. Florida cooperative extension service, institute of food and agricultural sciences,
University of Florida, 1-7.
Malhotra N.K., & Das, S. (2011). Marketing Research: An applied orientation, 6 th Edition, Pearson
Education.
Prasad, R. K., & Jha, M. K. (2013). Quality measures in higher education: A review and conceptual
model. Quest Journals, Journal of Research in Business and Management, 1(3), 23-40.
Verma, S., & Prasad, R. K. (2012). Valuing Quality in Educational Services: An Empirical
Study. European Journal of Business and Management, 4(19), 129-140.
651
TRACK XIV
652
Cost Effective Interventions to Prevent Burden of Disease:
A Case of Indian Eye Care
Defining and calculating burden for eye-care, evaluating cost effective interventions
Venkataramanaiah Saddikuti1, Rahul Gope2, Abhishek Ekka3, Yujata Pasricha4, Sania Shankar Sawant5
1
1
IIM Lucknow, svenkat@iiml.ac.in
2
3
2
IIT Bombay, pnkj.gope@gmail.com,
3
IIT Bombay, abhishekekka29@gmail.com,
5
4
IIT Bombay, yujatanitj@gmail.com,
4
5
NIT Jalandar, sania.4.sawant@gmail.com
Introduction
Poverty and eye health, including vision disability from vision impairment and blindness, are
believed to be interrelated. The relationship between poverty and eye health can be interpreted as
being two-fold, in the sense that poverty may be a cause of poor eye health and poor eye health
may lead to or deepen poverty.
Blindness and eye disease impose a significant personal and economic burden on individuals and
society. Early intervention can prevent a substantial number of cases, resulting in improved
wellbeing and economic savings. This article is motivated by the gap between the growing
demand and available supply of high-quality, cost-effective, and timely eye care, a problem
faced not only by developing and underdeveloped countries but also by developed countries.
The empirical evidence to answer the questions—Does poverty perpetuate poor eye health? How
and why? Does poor eye health deepen poverty?—is sparse globally; especially from low and
middle income countries (LMICs). This article therefore aims to examine published information
and uses other secondary data sources to provide insight on the relationship between poverty and
eye health, including eye disability caused from vision impairment and blindness both
qualitatively and quantitatively and then analyses cost effective interventions.
653
Research Methodology
We begin with an extensive literature review to identify qualitative barriers to eye-care for the
poor and the economic impact of blindness. Then a detailed literature search was conducted to
identify local prevalence, costing and cost-effectiveness data and studies for India. Studies were
given preference if they were local population-based studies. Due to variable study quality and
availability of local data, extrapolation was used in some instances from one country to another.
A disease-cost burden analysis and assessment of intervention cost-effectiveness was then
conducted.
The prevalence of cataract, glaucoma and wet AMD has been estimated for those aged 50 years
and older, as these conditions are primarily age-related. DR prevalence has been estimated for
those aged 18 years and older, as both type 1 and type 2 diabetes and their associated
complications can occur in younger age groups. This was done in the following steps
1. Prevalence of Eye Disease: The total prevalence of eye disease (blind and non-blind) was
estimated for cataract, DR, glaucoma and wet AMD. The prevalence of cataract,
glaucoma and wet AMD was estimated for those aged 50 years and older, as these
conditions are primarily age-related. DR prevalence was estimated for those aged 18
years and older, as both type 1 and type 2 diabetes and their associated complications can
occur in younger age groups.
2. Loss of Well Being from Eye Disease: This was defined in terms of DALYs, which is
obtained by multiplying prevalence of disease with a disability score defined by WHO
3. Direct Cost and Indirect Cost for Eye Disease: The methods and sources used to estimate
direct health
care costs of eye disease for Cataract is described. The direct costs for
those who are blind with cataract were estimated by distributing the country-specific
estimated cost of cataract surgery by the country-specific prevalence shares between
blind and non-blind cataract. The direct costs of cataracts were estimated by multiplying
estimated country-specific per capita treatment of cataracts by the prevalence of cataracts.
We followed similar procedures for the other three. Indirect costs were calculated in
terms of productivity losses and informal care cost. Finally, total cost is calculated.
654
Data Analysis and Results
Blindness and visual impairment can be broadly defined as a limitation in one or more functions
of the eye or visual system, most commonly impairment of visual acuity (sharpness/ clarity of
vision), visual fields (the ability to detect objects to either side, above or below the direction in
which the person is looking), contrast sensitivity and color vision. The four eye diseases of
cataract, glaucoma, DR and AMD account for nearly three quarters of all blindness globally.
Blindness has also been recognized as an important public health problem in India. Cataract is
the leading cause of blindness, accounting for nearly half of all blindness (Resnikoff et al, 2004).
This is followed by glaucoma, which accounts for 9% of all blindness. However, causes of
blindness differ across different regions in the world, and between developing and developed
countries. A nationwide survey conducted by the National Programme for Control of Blindness
in order to assess the impact of the augmented national efforts for control of blindness over
fifteen large states estimated that prevalence of cataract and corneal blindness was higher in rural
areas (the coverage for urban and rural areas in the survey was in the ratio of 2:3), probably due
to the limited availability of medical facilities, while diseases of uvea, retina and optic nerve
were seen more amongst the urban population. The survey estimated that the prevalence of
economic blindness in India was 14 per 1000 population (Rural-15.44; Urban-11.14) and total
blindness was 5.40 per thousand (Rural- 5.99; Urban-4.43). A subsequent survey sponsored by
WHO in 1986 also provided a similar prevalence level.
A prevalence approach to costing measures the number of people with a given condition (in this
case, blindness) in a base period (in this case, calendar year 2013), and the costs of treating them,
as well as other financial and non-financial costs (productivity losses, career burden, loss of
wellbeing) in that year, due to the condition.
Prevalence of Blindness: According to Future of Ophthalmology conference, 2012 there are
24.1 million blind population in India, of which 1.15 million are children.
Loss of wellbeing from Blindness: ‘Burden of disease’ refers to the intangible costs of
disability and loss of wellbeing and blindness, which result in a reduced quality of life. A
disability weight of 0.43 for blindness from Stout hard et al (1997) was applied to total
prevalence of blindness to estimate total loss of wellbeing in DALYs.
655
Total DAYLs from blindness was estimated to be 3354000.
Direct (health care) costs of blindness: The direct financial costs of blindness are those
incurred within the health care system in each country, by the government or other payers
(including patients), as a result of treatment. The direct costs of blindness were estimated
specifically for the conditions of cataract, DR and glaucoma. The direct costs were estimated by
multiplying estimated country-specific per capita treatment costs of the disease by the prevalence
of disease.
We get the direct cost to be 642,386 Million INR i.e. 26,655.020 INR per blind person.
Indirect (health care) costs of blindness: Blindness imposes financial impacts on society more
broadly, outside the health care system. These impacts are referred to in this report as ‘indirect
costs’. In this study, the indirect costs of blindness due to productivity losses from reduced labor
market participation through lower employment associated with blindness; and the costs to
informal careers from providing care to someone with blindness were estimated.
Net productivity loss (GNP lost) is estimated to be 922,528 million INR and total informal cost
have been estimated to be 176,137.26 million INR. This means total indirect cost per blind
person is 45,587.77 INR.
Total (health care) costs of blindness: The total economic costs of blindness (i.e. the direct and
indirect costs combined) in 2015 in India are presented by cost component in the following table.
Direct
costs
Productivity
losses
Informal
care
Total costs
Direct cost per
blind person
Indirect cost per
blind person
Million INR
642,386
Million INR
922,528
Million INR
176,137.26
Million INR
1,741,051.26
INR
26,655.020
INR
45,587.77
Exhibit1: Total cost of Blindness in India (For Year 2013)
The above table shows that the total opportunity cost for attaining treatment is much higher than
the actual visible cost.
Several dimensions of poverty have a significant impact on the disabled, especially on those
individuals who have a vision disability. These dimensions of poverty include employment,
material wealth, education, health, poverty alleviation and development assistance, social
wellbeing and public cost.
656
The nature of eye care as a service or product is very complex and is characterized by a great
deal of variability, intangibility and imperfections. Also the poor cannot participate in the
benefits of globalization without an active engagement and access to products and services. This
perception is pretty much obvious due to the clinical, knowledge and financial barriers which
hindered the pathways for them in being active consumers. Handling the barriers discussed
above turning the poor into consumers without consideration of their role as active economic
agents. Hence developing an effective channel for eye-care requires health-care enterprises to
think beyond the conventional poverty alleviation initiatives and will require radical innovations
in eye care technology and business models centered on the poor.
We therefore explored the cost effectiveness of four interventions aiming to reduce the burden of
blindness i.e. screening for cataracts, screening for DR in people with Type 2 diabetes mellitus
(T2DM), glaucoma eye examination and treatment for predominantly classic AMD with
ranibizumab.
Findings shows that ranibizumab would avert between 3.72% and 20.8% of the total estimated
DALYs associated with vision impairment and blindness in India. Ranibizumab would generate
substantial savings. Screening for diabetic retinopathy in India would generate huge cost offsets
due to gaining between 6,819 and 24,047 vision years. The cost offsets represent up to 3.0% of
the total economic costs associated with the four eye diseases. For glaucoma screening,
notwithstanding the high level of uncertainty of cost-effectiveness estimates, it may generate
savings and avert DALYs, if an average of 24.2 days of vision years is gained through screening,
as estimated by Vaahtoranta-Lehtonen (2007). In India, glaucoma screening may avert up to
0.8% of the total economic costs associated with the four eye diseases.
Diabetic
Retinopathy24.2 B
65
64.8
0.37
B
20
65.07 B
65.2
4.03
B
Cost
25
Glaucoma
64.6
15
64.4
D.R
Glaucoma
Cost after Intervention
Actual Cost
Cost after Intervention
657
Actual Cost
This study has found that interventions to prevent and treat eye disease are cost-effective and
may result in averted DALYs and substantial economic savings from blindness prevention.
Table below presents mean ICERs and cost-effectiveness ratings for each intervention.
Country
Per
Capita
GDP
(INR)
India
1,02,702
Screening for
cataract
Screening for DR
Screening for
Glaucoma
Mean
ICER
CE
Rating
Mean
ICER
CE
Rating
Mean
ICER
1,95,076
HCE/CE
3,49,143
CE
12,14,859
CE
Rating
NCE
Treatment with
ranibizumab for wet
AMD
Mean
ICER
CE Rating
5,77,264
NCE
(a) Where ICER = cost € per QALY gained.
* Against WHO cost-effectiveness thresholds: CE = cost effective, HCE = highly cost effective and NCE = not
cost effective.
Implications of Study
Screening for cataract was found to be most cost effective. In developed countries like Mexico,
treatment for wet AMD is more cost effective due to relatively higher GDP. Thus interventions
cannot be adopted directly to Indian context. We need to follow a bottom up approach to develop
Taylor made solutions for Indian Context
Blindness and eye disease impose substantial lost wellbeing and economic costs, and should be a
public health priority. Cost-effective interventions should be explored and promoted to reduce
the burden on individuals and society. This study has found that the prevention of blindness
would result in significant benefits both in improved wellbeing and economic savings.
658
References
1. Organisation for Economic Cooperation and Development (OECD) 2013b, Stat.Extracts: Health
Care Utilisation, Surgical Procedures, http://stats.oecd.org/index.aspx?queryid=30167
2. World Health Organization. International Statistical Classification of Diseases and Related Health
Problems, 10th Revision (ICD10), Chap. 7; 2011. p. H53-4. Available from: http://apps.who.
Int/classifications/icd10/browse/2010/en.
3. Poverty and Eye Health: http://b.3cdn.net/orbis/75e8e70e98ab5b18b7_kwm6b0ieu.pdf
4. Dandona, R. and Dandona, L. (2001) Review of Findings of the Andhra Pradesh Eye Disease
Study: Policy Implications for Eye-Care Services. Current Ophthalmology, 49, 215-234.
5. Lee, P.P., Smith, J.P. and Kington, R. (1999) The Association between Self-Rated Vision and
Hearing and Functional Status in Middle Age. Ophthalmology, 106, 401-405.
http://dx.doi.org/10.1016/S0161-6420(99)90082-9
6. Resnikoff S, Pascolini D, Etya’ale D, Kocur I, Mariotti SP, Pokharel GP,
Pararajasegaram R, Mariotti SP (2004) ‘Global data on visual impairment in the year
2002’, Bulletin of the World Health organization.
659
Factors Affecting Digital Piracy and Green IT:
Testing the Norm Activation and the UTAUT Models
Moutusy Maity
IIM Lucknow
B1, Sector 62, Noida 201307
Email: mmaity@iiml.ac.in
Kallol Bagchi
College of Business Administration
University of Texas at El Paso, El Paso, TX, USA
E-mail: kbagch@utep.edu
Arunima Shah
IIM Lucknow
Prabandh Nagar, Lucknow
E-mail: fpm15004@iiml.ac.in
Ankita Misra
IIM Lucknow
Prabandh Nagar, Lucknow
E-mail: fpm16001@iiml.ac.in
660
Introduction
Two contexts of digital usage in the information technology (IT) or information
systems (IS) industry that are pertinent in the context of ethical and sustainable practices are
digital piracy (DP) and green computing or green IT/IS (GIT/GIS).
DP is defined as the illegal download of digital files, such as music, movies, and
software, from the Internet, and poses a significant threat to the industries producing digital
products (Goode 2012; Gopal et al. 2004; Taylor et al. 2009; Yu 2013). DP has increased
extensively in the past decade (Higgins 2007). Siegler and Gaughan (2008) refer to GIT/GIS
as information technology and systems initiatives that address the issues of environment
sustainability. Hanne (2011) points out that the carbon emission from information
communication technologies (ICT) is estimated to be equal to that of the aviation industry.
Research Gap and Research Objectives
Research into normative behavior has been undertaken in extant literature ((Lapinski
& Rimal, 2005; Schultz, Nolan, Goldstein, & Griskevicius, 2007; d’Astous, Colbert, &
Montpetit, 2005; Kwong & Lee, 2002; Gopal et al., 2004; Shang, Chen, & Chen, 2008);
Chiou et al., 2005; LaRose & Kim, 2007). However, very few studies investigate behaviors
that typify categorical rule and rule of prudence, applying the same theoretical tenet to
investigate these behaviors in the context of the same investigation.
Adoption and understanding of GIT has been studied mainly from an organization’s
perspective but studies on individual adoption and understanding are scarce (Khor et al.
2015).
The theoretical tenets that dominate the extant literature on digital piracy are the
Theory of Planned Behavior (TPB) (LaRose et al., 2005; Cronan and Al-Rafee, 2008;), and
ethical theories (Shang et al., 2008; Yoon, 2011 and Gopal et al., 1998) that explain attitude
and behaviour toward digital piracy. Extant research has also shown that digital piracy can be
explained by attitude theory (Rahim, Seyal, and Rahman 2001), theory of self-control
(Higgins 2005), deterrence theory (Gopal et al. 2004; Higgins, Wilson, and Fell 2005), and
social learning theory (Skinner and Fream 1997).
Our research is grounded on two theories: the Norm Activation model (NAM) and the
Unified Theory of Acceptance and Use of Technology Model (UTAUT). The objective of
this research is to investigate the two behaviours of DP (i.e., a behavior that follows the
categorical rule) and GIT (i.e., a behavior that follows the rule of prudence) of individuals
through the lenses of two models: a) the Norm Activation Model (NAM) (Schwartz 1977),
661
and b) an integrated model of NAM + UTAUT (that incorporate moral obligation, effort
expectancy, performance expectancy).
We test the two models (i.e., NAM and UTAUT) for DP and GIT to ascertain which
theoretical lens offers a better fit for the two behaviors.
Research Method
Separate pre-tested survey instruments were used to collect data from participants for
DP and GIT behavior. Data were collected from participants, who were working managers.
A total of 360 useable responses were obtained for DP and 374 useable responses
were obtained for GIT. Among the participants in the DP survey, 85% were males, and
68.6% were between 20 to 30 years of age. Among the participants in the GIT survey, 84.2%
were males, and 69% were between 20 to 30 years of age.
Data Analysis and Results
The data are analysed with structural equation modelling (SEM) technique using
AMOS 20.0 (Arbuckle 1999).
Digital Piracy. The two measurement models provide acceptable goodness of fit. The
Fornell and Larcker table is checked to determine reliability and validity of the items used in
the study. We obtain acceptable levels of average variance explained (AVE) (at least 0.6) and
composite reliability (CR) (at least 0.7) for all measures. Testing the structural model, we
find that the NAM+UTAUT model (CFI = .954; CFI = .944; RMSE = 0.050) provides a
better fit for the DP data than the NAM model (CFI = .949; TLI = .937; RMSEA= 0.065)
alone. Since the integrated model includes both altruistic and technology-related
explanations, it explains the phenomenon comprehensively.
Green IT. For this phenomenon, too, the two measurement models provide acceptable
goodness of fit, and we obtain acceptable levels of average variance explained (AVE) (at
least 0.6) and composite reliability (CR) (at least 0.7) for all measures. Testing the structural
model, we find that the integrated NAM + UTAUT model (CFI = 0.956; TLI = .945; RMSEA
= 0.050) and the NAM explains the adoption of GIT (CFI = 0.971; TLI = .962; RMSEA =
0.055) equally well. A possible explanation for this finding could be that since the use of
green IT involves being judicious and considerate towards the environment and is a prosocial behaviour based on personal norms and one’s own willingness, both the models are
able to provide a good explanation.
662
Research and Managerial Implications
This research makes several theoretical and managerial contributions. First, this
research contributes to the literature by integrating UTAUT (Venkatesh, Morris, Davis and
Davis 2003) and NAM (Schwartz 1977) to explain digital piracy and green IT from the
perspectives of technology perception and personal beliefs of pro-social behaviour. Second,
this research contributes to the understanding of the determinants of digital piracy (i.e., a
behavior that represents the categorical rule) and green IT (i.e., a behavior that represents
rule of prudence) within the NAM+UTAUT model. The study contributes to the existing
body of knowledge that attempts to understand the reasons behind DP and the profile of the
pirates.
Third, this research is one of the few studies that look at the practice of green IT by
individuals outside the boundary of an organization’s norms and policies. This investigation
adds to the literature of GIT/GIS with knowledge about the differences in adoption at
organization and individual levels. Fourth, the proposed model may be used to formulate
policies to reduce DP practices, and to encourage green IT practices.
663
References
Ang, S.H., Cheng, P.S., Lim, E.A.C. and Tambyah, S.K. (2001), “Spot the difference:
consumer responses towards counterfeits”, Journal of Consumer Marketing, Vol. 18 No.
3, pp. 219‐ 35.
Arbuckle, J. L., & Wothke, W. (1999). Amos 4.0. Chicago, IL: Smallwaters.
Cronan, T. P., & Al-Rafee, S. (2008). Factors that influence the intention to pirate software
and media. Journal of Business Ethics, 78(4), 527-545.
Goode, S. (2012). Initial findings of a gap analysis of the digital piracy literature: six
undiscovered countries. Journal of Research in Interactive Marketing, 6(4), 238-259.
Gopal, R. D., Sanders, G. L., Bhattacharjee, S., Agrawal, M., & Wagner, S. C. (2004). A
behavioral model of digital music piracy. Journal of organizational computing and
electronic commerce, 14(2), 89-105.
Gopal, R.D., Sanders, G.L., 1998. International software piracy: analysis of key issues and
impacts. Inf. Syst. Res. 9 (4), 380–397.
Hirschheim, Rudy, and Heinz K. Klein (2000), “Information Systems Research at the
Crossroads: External Versus Internal Views,” in Organization and Social Perspectives
on Information Technology, Eds. Richard Baskerville, Jan Stage and Janice DeGross, pp.
233-254.
Kant, I. The Critique of Practical Reason. New York: Harper Torch Books, 1929.
Kant, I. Groundwork of the Metaphysics of Morals, (translated and analyzed by H. J. Patton).
New York: Harper Torch Books, 1964.
LaRose, R., Lai, Y. J., Lange, R., Love, B., & Wu, Y. (2005). Sharing or piracy? An
exploration of downloading behavior. Journal of Computer-Mediated Communication,
11(1), 1-21.
Schwartz, S. H. (1977). Normative influences on altruism. Advances in experimental social
psychology, 10, 221-279.
Taylor, S. A., Ishida, C., & Wallace, D. W. (2009). Intention to engage in digital piracy a
conceptual model and empirical test. Journal of Service Research, 11(3), 246-262.
Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2003). User acceptance of
information technology: Toward a unified view. MIS quarterly, 425-478.
664
Product Liability under Consumer
Protection Laws in India
Dharmendra S. Sengar1
Introduction:
Today, industries are producing various kinds of goods and services for the use of consumers
in their day to day life. There has been a tremendous increase in the demand of consumer
goods and services all over the world, which were hitherto unknown to us two decades
before.2 In today’s constantly evolving market, new technological frontiers are witnessed at a
much higher pace as compared to the past. The industries are rigorously inventing or
improving upon the existing technologies to have an edge and business advantage over their
competitors. However, along with the rise in products and services, there has also been a rise
in misleading advertisements and unfair trade practices. Unlawful tactics are being adopted to
attract the customers, which many times lead to catastrophic outcomes endangering the life,
health or property of the consumers.
In the recent times, the media has been abuzz with several stories on defects in products and
cheating by manufacturers or service providers including the faulty batteries in Samsung cell
phones, higher than permissible amounts of Monosodium Glutamate in Nestlé’s noodles as
well as an electronically manipulated pollution figures by Volkswagen, the German car
manufacturer. Sometimes accidents and injuries also occur due to poor judgment or improper
and irrational behavior during the use of a product or service such as drunken driving or
removing a safety guard from a piece of industrial equipment. Accidents may also happen
when products are improperly used beyond their design limitation. These are some examples
which people are aware of the causes and in such cases it is easy to assess the liability for
harm. But there are certain technological processes which are too complex to understand and
in such case assessment of liability for harm caused due to its failure becomes a difficult task.
Rise in the use of software controlled manufacturing units is an addition to this challenge.
1
2
Professor, Indian Institute of Management, Lucknow
Gulam Ram (2015), A Comparative Analysis of International Consumer Protection Legislations: With Special
Emphasis On Indian Law & Practice In State Of U.P. Thesis Submitted To The University Of Lucknow.
Available at http://shodhganga.inflibnet.ac.in/bitstream/10603/72930/2/ram%20gulam%20thesis.pdf accessed on
21/10/2016.
665
Moreover, it is a matter of great concern that there is no effective tool available with the
Government or Judiciary to determine to fix the responsibility and assess liability for
defective products and services. There are a number of intermediaries besides the
manufacturer and service provider who are also involved in the process of delivery of
products and services to the ultimate user or customer. In such cases, determination of
responsibility and fixing the liability and seeking redressal for damage or injury is
increasingly becoming a contentious issue.
Thus, questions like how liability is to be
established /determined or who should be held liable for the defective products or services
and what defenses would be acceptable in the court of law need to be addressed on priority
basis.
Research Gap and Research Problem:
Product liability claims is an evolving concept in the Indian scenario. There is no specific
statute in India that regulates the product liability claims. However, the product liability
claims could be discerned under different Indian Statutes, such as, The Consumer Protection
Act, 1986; The Sales of Goods Act, 1930; The Indian Contract Act, 1872; The Indian Penal
Code 1860. There are also some specific statutes pertaining to product liability claims in case
of specific goods. The jurisprudence relating to product liability in India has been constantly
evolving by way of judicial interpretation and the amendments in the laws.3 In order to meet
the need of the present state of modern technological advancements and the emergence of ecommerce transactions, Government of India has tried to amend Consumer Protection Act,
1986 and drafted a Consumer Protection Bill 2015.4 The Bill which is pending for approval
has introduced a much needed concept of affixing liability on a manufacturer or producer and
even on a product seller. Though, the Bill, defines the product liability and provides the
process to deal with liability claims against manufactures but it is not without flaws, which we
will discuss ahead in this article in details.
In this world of globalization, where technology changes in a blink of eye and spread very
easily, the consumers, manufacturers, service providers, the legislature, and judiciary are
facing enormous challenges in dealing with product liability claims. In the recent times, the
3
Consumer protection Amendment Act 1993 and 2002 and now Consumer Protection Bill 2015.
4
See Chapter VI Product Liability, Consumer Protection Bill, 2015. Available at
http://www.prsindia.org/uploads/media/Consumer/Consumer%20Protection%20bill,%202015.pdf
accessed on 03/06/2016
666
Indian courts have decided several product liability claims and shaped the product liability
litigations5. The National, State and District Consumer Forums, have also delivered various
landmark judgments having tremendous implications on manufacturers, service providers and
general consumers. They have covered not only the industrial products and services but also
the cases of medical negligence.
As there are no specific Indian statute to deal with product liability claims, Indian courts have
adopted a pro-consumer approach while deciding such claims and shaped the product liability
regime in India. The Courts have very well applied the principle of product liability in the
areas of automobile, insurance, delayed possession and construction of flats etc. This paper
will analyze these and other cases with a view to find a solution to resolve the problems as
well as to make the product liability regime more effective and proactive.
Objectives of the Study:
For a better governance, there is need to remove the lacunae in existing legal framework and
frame new law with effective enforcement machinery for product liability regime for
manufacturers and service providers is the need of the hour. The course of effective action
against the violators should also be known to the customers for its use. Therefore, the specific
objectives that are intended to be meet through this paper are to:
1. Examine the constraints in existing legal frameworks and enforcement machinery
pertaining to product liability doctrine in the context of new market dynamics, multilayered delivery chains, innovative (and many times misleading) advertising and
marketing strategy in India.
2. Evaluate the Indian judicial pronouncements in dealing with product liability claims.
3. Assess of possible flaws in existing Indian Statutes from which we can discern the
product liability claims and also examine the relevancy of newly enacted Acts and Bill
such as Consumer Protection Bill, 2015 ; Food Safety and Standards Act, 2006 and
5
Though, In the absence of statutory or customary law applicable in a case, Indian courts guided by the
principles of justice, equity and good conscience, and often-English common law, especially the ratio contained
in Donoghue v Stevenson, which provided the principle of duty of care.
667
The Biotechnology Regulatory Authority of India (BRAI) Bill, 2013 with a view to
make them more effective and proactive.
4. Propose recommendations that may help the manufacturers, distributors, traders,
courts, policy makers, legislators and all those who are engaged in serving the
consumers, so that product liability regime and redressal mechanism must serve the
wider interest of justice and assure the customers quick remedy for any damage or
injury caused to them by defective products or services.
Research Methodology:
The research methodology employed for the present study involves a critical examination and
evaluation of primary sources, such as concerned laws, government reports, parliamentary
debates and decisions of courts and forums as well as secondary sources, such as, scholarly
writings, journals, reports, policies, news reports and online databases etc.
Implications of this Study:
The 21st century holds the prospects of the products of increasing technological intricacy
appearing on the world market. Indications are that the focus will be in the areas of
information and communication technology on the one hand and biochemical products on the
other hand. Mass production and trading across national boundaries will be part of the scene.
In such circumstances, customers will be exposed to these products, whether as buyers, users,
consumers or merely as bystanders. As they need to be protected against unsafe products, it is
necessary to have a strong legal regime that may ensure the consumers or bystanders that they
will receive adequate compensation in case an unsafe product causes damage or harm to him
or her. As India will become more and more involved in the import of products, design,
manufacture, distribution, selling and export of products, they need to have confidence in our
legal system for protection against trivial and inflated claims. The level of predictability of the
outcome of any claim will determine the community and parties' level of confidence in the
legal system governing products liability. The confidence driver may help to determine the
extent of the burden a party will have to bear to discharge duty and the evidences required to
succeed in his claim or to prevent liability.6
6
Johann Basson, THE SOUTH AFRICAN LAW ON "PRODUCTS LIABILITY" - QUO VADIS? Available at :
668
Thus, the study will contribute in making suitable enactments or amendments in existing laws
and policies pertaining to product liability to make them more effective and proactive. It will
also help in creating increased public awareness about their rights and the duties and liabilities
of manufactures and service providers for defective products and services.
http://sajie.journals.ac.za/pub/article/viewFile/357/302 accessed on 18/10/2016.
669
Assessment of Health Status (Quality of Life) of Patients with
Pacemaker Implantation
S Venkataramanaiah1, Mustafa Panbiharwala2, Swapnil Jain2 and Aparna Mishra2
1
Indian Institute of Management Lucknow, Noida Campus, svenkat@iiml.ac.in
2
Shri G.S Institute of Tech & Science, mustafa.shabbir10@gmail.com/
swapniljain135@gmail.com/ mishra.aparna2807@gmail.com
1. Introduction
Cardiovascular diseases (CVDs) are one of the most prevalent chronic diseases all around the
world [1]. CVDs was 10% of total mortality rate in 1910 and increased to 50% in 2000 and
predicted to increase to 75% by 2020 [2]. According to the statistics by World Health
Organization (WHO), mortality and disability resulted from cardiovascular diseases and
cerebrovascular accident kill more than 12 million people all around the world annually. Also
this organization estimates that if no measures are taken to improve cardiovascular health, there
will be a 25 percent loss in healthy life years due to the cardiovascular diseases by 2020 and the
main part of this loss will be in developing countries [3].
Artificial heart stimulation is a routine and a widely accepted treatment for patients suffering
from CVDs in many countries. A heart disease poses several restrictions to the lifestyle of the
suffering patients and deteriorates their QoL (Quality of Life).
One of most commonly cited definition of the QoLis the one coined by the WHO according to
which the QoL is “individual’s perception of their position in life, in the context of the culture
and value systems in which they live and in relation to their goals, expectations, standards, and
concerns” [4].
There are many instruments which have suggested assessing the QoL of patients. The most
widely used health status questionnaire is the SF-36 Health Survey, a generic measure of health
status, assessing health-related QoL outcomes, estimating the relative burden of different
diseases, differentiating the health benefits produced by a wide range of different treatments,
and screening individual patients [5]. For patients with pacemakers, we have used a Medical
Outcomes Study 36- Item Short- Form Health Survey (SF-36) questionnaire. In the past, many
numbers of studies have been carried out but they have not efficient to determine the effects
which a pacemaker therapy has on a patient’s quality of life. SF-36 questionnaire provided a
subjective evaluation of the patient’s view of his own life after the therapy. This subjective
evaluation is very critical; how they view their own situation, how they assert their role in the
family, society and working environments. Evaluation of pacemaker patient’s perception of his
own QoL helps direct the analysis of the treatment’s effectiveness, which is the basic objective
of the study.
670
2. Research Gap and Research Problem
The concept of QoL reflects the impact of chronic diseases and is necessary for its patients who
have contracted such diseases, where the physical health and the social and functional well being
are affected by the overall treatment of the disease including the post-treatment procedures.
Therefore, it is essential to calculate empirically the QoL of pacemaker patients for improving
the health status of the patients. Studies focusing on QoL of pacemaker patients are limited in
Indian context and no such evaluation has been done. Therefore, this study aims to voice the
factors that affect the QoL of a pacemaker patient and intends to act as reference for the doctors,
medical device suppliers and medical device manufacturers to better place their products in the
market.
3. Objectives of the Study
However, the implementation of QoL for patients having gone through pacemaker surgery has
not yet received much attention in Indian context. The aim of this work is to evaluate the QoL of
patient’s having undergone pacemaker implantation surgery:
1. Conduct the field study to understand the factors that affect the QoL of patients with
pacemaker
2. Help potential stakeholders (doctors, patients, device manufacturers, device suppliers) to
adopt to the pacemaker technology and act as a robust marketing mechanism as well as
spread awareness among the patients.
3. Help the stakeholders to objectively evaluate and customize their products and services
accordingly.
4. Act as a reference study in the context of Indian patients.
4. Research Methodology
A descriptive, quantitative, cross-sectional, observational study was carried out in patients with
pacemaker of a tier-2 city, Indore, of central India. Details of 100 patients were collected from
different cardiologists and pacemaker device suppliers and manufacturers. Clinically stable
patients of both genders over the age of 18 and having a minimum implantation span of 6 weeks
were chosen for the study. The patients were informed of the study and it was conducted only
after their consent. Some patients were excluded who did not understand the purpose of the study
or who did not wish to participate in the study. For collection of empirical data, SF-36 survey
tool was used and the data was collected in the form of interviews by the researchers, selfcompletion by the patients or by some close family member if the patient is physically disabled.
It includes multi-item scales measuring each of eight dimensions: physical functioning (PF), role
limitations caused by physical health problems (RP), bodily pain (BP), general health
perceptions (GH), vitality (VT) tapping energy levels and fatigue, social functioning (SF), role
limitations due to emotional problems (RE), and mental health (MH) [7].
671
Response scores were calculated using guidelines given in the literature for the questionnaire and
the domains were graded by a specific calculation ranging from 0 to 100. A low numeric score
reflects poor health perception, loss of function, and presence of pain whereas a high numeric
score reflects good health perception, preserved function, and absence of pain [8]. Therefore, a
cut-off point of 50 (mean score) was established to determine the best and worst domains.
Domains with scores lower than 50 represent worse QoL and those with scores 50 or over
represent better QoL [9].
5. Data Analysis
The research sample consisted of a total of 100 clinically stable patients with a permanent
pacemaker implantation, of whom 36 were women and 64 men. The patients were more than 18
years old and had an implantation timespan of more than 6 weeks (average 3±2.97 years). The
assessment included demographic factors of the patients, clinical data as well as QoL
questionnaire (SF-36). The association of QoL with age, gender, education level, occupation of
the patient, rate of adherence to follow up, place of residence and type of family were assessed
among the patients. Statistical analysis was conducted using ANOVA and Pearson’s Correlation
test with a significance level of 5%. Further, Tukey’s HSD test was conducted in conjunction to
ANOVA to find means which were significantly different from each other. Table 1 shows the
data from the evaluation from SF-36 questionnaire and its comparison according to age of the
patients.
Age
PF
RP
RE
VT
MH
SF
BD
GH
Full
Sample
22-50
years
51-75
years
76-95
years
P value
(ANO
VA)
r value
43.45 ±
27.09
35.83 ±
29.86
35.63 ±
21.76
61.45 ±
27.63
3.02E05*
54.25 ±
41.39
68.05 ±
40.04
59.82 ±
41.19
35.48 ±
38.06
0.0085*
74
±
39.32
94.44 ±
12.78
76.19 ±
39.03
51.61 ±
45.41
0.0006*
55.3 ±
10.69
58.88 ±
9.16
56.69 ±
10.32
50.64 ±
11.30
0.012*
66.2
10.54
67.33
9.33
67
9.92
64.25
12.04
0.45
± 79.50
17.37
± 85.41
12.31
± 79.46
17.74
± 74.19
18.52
0.089
± 79.3
20.31
± 77.08
24.43
± 83.16
17.46
± 72.98
22.20
0.076
± 68.8
17.35
± 76.66
19.02
± 69.82
15.60
± 62.41
17.36
0.015*
0.39
Signific
ant
-0.23
Signific
ant
-0.31
Signific
ant
-0.26
Signific
ant
-0.073
NonSignifica
nt
Table 1
6. Results
672
-0.24
NonSignific
ant
-0.051
NonSignific
ant
±
±
±
±
-0.27
Significa
nt
The lowest SF-36 score was in the physical functioning domain and the highest being in the
social functioning domain. There was no significant association of gender with the QoL.
However, with respect to age a significant association can be seen between the three groups with
respect to physical functioning, role limitation-due to physical health, role limitation-due to
emotional problems, vitality, and general health domains. Pearson’s Correlation test showed
moderate positive correlation between age and Physical Functioning domain of QoL. Role
Limitation due to Physical Health, Role limitation due to emotional problem, Vitality, Social
Functioning and General Health showed a weak negative correlation with age. Significant results
were obtained with respect to occupation of the patients in the physical functioning domain. The
education level of the patient had no significant impact on their QoL. Rate of Adherence to
follow up (casual or strict) had significant impact on patients’ QoL (Vitality, Mental Health and
Body Pain aspects). However, there was no significant association between the place of
residence of the patient and their QoL. Significant differences were also obtained with respect to
REP, REH, Pain, Vitality, GH and MH.
7. Findings
Higher QoL scores were found in Social functioning aspect and lower scores were found in the
Physical Functioning aspects of the patients. Males had higher QoL scores in the Body Pain
domain than females but females had a higher score in the Physical functioning domain. As age
increased the QoL in the physical functioning domain increased, which a counter-intuitive fact
was observed in the study. For other domains of QoL such as Role Limitation due to Emotional
Problems, Vitality and General Health had a weak negative correlation with age and thus the SF36 scores decreased as the population aged. In case of occupation of the patients significant
results were obtained in the physical functioning domain where the self-employed had the
poorest physical functioning score. The retired patient population reported the highest QoL
among all the other groups. Similar results were obtained for patients who were strict in followup treatment to the doctor. Age, occupation, rate of adherence to follow-up and type of family
influence the QoL; thus, these variables must be considered in strategies for the improving the
QoL of pacemaker patients.
8. Implications
From the analysis of the results, it is noted that the overall QoL of patients above 76 years is
better than other groups. This clearly shows the target group that needs focus to address the
needs of the patients which are different from other age groups. Further, the QoL of female
patients are varying among the eight parameters of SF-36 and hence they need to focus on those
elements which are at lower level. Doctors, device suppliers to consider the results and address
the specific needs of each segment. It is also noted the there is no significant difference in QoL
673
of patients from within the city and outside. However, it is noted that the patients from city are
more regular in follow up compared to outside patients. Device suppliers can devise suitable
financial schemes including EMI etc to make the implantation more affordable for different
groups of patients. Policy makers can also use these results in designing public health
interventions and the support required under various health schemes. Further, studies can focus
on various aspects of QoL of pacemaker patients and other categories like eye care, CVD
implants etc.
References:
1. Braunwald S (2005). Heart disease: a textbook ofcardiovascular medicines. 7th ed.
Philadelphia: WB Saunders.
2. Thompson J, McFarland G, Hirsch J, Tucker S (2002). Mosby’s Clinical Nursing. 5th ed. St.
Louis: St. Louis.
3. WHO Cardiovascular diseases 2010; Available from:
http://www.who.int/mediacentre/factsheets/fs317/en/index. html.
4. World health organization. Text of the Constitution of the World Health Organization. off.
Rec. who 1948.
5. Ware, J. E., Kosinski, M, & Gandek, B. (2003). SF-36 Health Survey: Manual and
interpretation guide. Lincoln: QualityMetric Inc.
6. Ware, J. E., & Gandek, B. (1998). Overview of the SF-36 Health Survey and the
International Quality of Life Assessment (IQOLA) project. Journal of Clinical Epidemiology,
51, 903-912. doi: 10.1016/S0895-4356(98)0008-X.
7. Oliveira BG (2003). Measurement of quality of life in patients with pacemakers: translation
and validation of a specific instrument .Belo Horizonte: School of Nursing. Federal
University of Minas Gerais;116p.
8. Servelhere KR, Fernandes YB, Ramina R, Borges G (2011).Application of the SF-36 scale in
patients operated on from tumors of the skull base. Brazilian Archives of Neurosurgery;
30(2):69-75
674
Service Innovation in Healthcare: Towards a Robust
& Sustainable System
Developing Innovations that transform the Healthcare Landscape
Venkataramanaiah Saddikuti1, Rahul Gope2, Abhishek Ekka3, Yujata Pasricha4 and Sania Shankar
Sawant5
1
IIM Lucknow, 1svenkat@iiml.ac.in,
IIT Bombay, 2pnkj.gope@gmail.com
3
IIT Bombay3abhishekekka29@gmail.com,
, 5IIT Bombay, 4yujatanitj@gmail.com
4
NIT Jalandar5sania.4.sawant@gmail.com
2
Introduction:
India is moving towards a healthcare system transformation. Over the last decade, Government has
introduced important structural reforms in order to increase access to healthcare. The Private sector
has also experienced unexpected growth during this time. Growth in the coming years would have a
strong correlation on nature and extent of reform. There are inspiring possibilities in the coming
years but also challenges. Many services are based on customer needs, preferences, and trade-offs,
whereas health care is a fundamental need.
Affordability of health care is not the only issue. Many people don’t have access to healthcare
facilities. In India large number of people living in rural areas or in slums is deprived of healthcare
services. Many developing countries are facing the challenge of improving awareness, affordability,
quality and accessibility of healthcare goods and services.
In most developing country private health sector have not fully engaged in harnessing innovation or
mitigating market failures. Many government initiatives, NGOs, social entrepreneurs, for profit and
not for profit private organizations have been working to improve healthcare sector but most of these
initiatives do not survive the “valley of death” hence are not sustainable. Better innovations and
strategies of private organizations could lead to tremendous improvement in healthcare sector.
Therefore a key motivation for this study was to identify innovative, healthcare delivery and
financing programs in the developing countries of the world that are led by or involve the private
health sector in the context of mixed health systems and to extract key elements and leanings from
these innovations which may be transferrable to other healthcare enterprise.
675
Methodology:
The purpose of study was to review the existing healthcare initiatives across the developing countries
of the world and extract important learning’s and key points of the initiatives in order to prepare a
framework.
The paper describes about 50 innovations from across the world. The innovations discussed in this
paper were identified through a thorough content analysis and literature review. The innovations
were classified into service delivery and risk pooling mechanisms. Service delivery mechanisms are
to improve quality of and access to healthcare service whereas risk-pooling mechanisms to improve
access to health services and strengthen financial protection.
Furthermore we also studied frameworks that decide sustainability of healthcare organization’s key
business strategies and models followed have been discussed. These help healthcare organizations to
benchmark themselves and also to identify what areas they must improve. This enabled us to gain
insights into the critical areas that other researchers had focused on.
Based on literarure review the initiaves and execution of service delivery and risk pooling programs
have been summarised. Different aspects of healthcare delivery system were studied. For analysis,
the key components of these programs were enlisted and classified. A total of seven parameters
(namely automation, attribute, reach, affordability, infrastructure, community participation and
product) were determined based on literature review. This was done in order to summarize all the
initiatives studied.
Fındıngs and Analysıs:
Findings indcate that almost all the initiatives could be classified under the seven dimensions
(namely automation, attribute, reach, affordability, infrastructure, community participation and
product). (Refer table.1).
Infrastructural initiatives encourage community participation which in turn enhance reach of the
innovation mechanism. Based on our study, we found automation and product are also interrelated,
as automation drives successful product based initiatives. Product based initiatives enhance
affordability, which in turn enhances the reach. Infrastructural initiatives like free-training,
improvement of working environment etc enhances quality based initiatives.
676
Table 1. Factors affecting the outcome
SERVICE DELIVERY
DIMENSIONS
IMPACT
• Integrated and strengthened preventive, curative, and
Automation
• Technology
and
emergency health services.
Innovation
• Advances in medical technology and expertise reach
• Process building
remote rural areas.
• Informatics
• Telemedicine
•
More trust in the health system as a whole and
Attribute
•
Quality pre-hospital greater interest in and uptake of health insurance by the
care
community.
•
Performance
•
Reduction in all-cause mortality and morbidity.
monitoring
•
Consistent availability of quality health products and
•
High-quality
reducing the average prices that families pay for them.
services
•
Customer
relationship management
•
Pre-screening
of
Doctors
Infrastructure
Strengthened health system on the whole through
•
Local
program
integrating of the four-tiered infrastructure of
management
healthcare provision already in place.
•
Free provider and
Improved quality and quantity of qualified and
public health training
accredited private sector health providers.
•
Public education and
communications
•
Distribution
and
monitoring
•
Profitable franchisee
product bundle
Affordability
Reduced cost of access to healthcare services (such
•
Below
market
as lost wages, travel costs, and the like).
pricing
Increased access to and affordability of healthcare
•
Rate standardization
and
family
planning
among
underserved
and subsidiary
communities.
Community Participation
•
Social
Entrepreneurship
•
Village-level
resources
•
Local partnerships
•
Community-level
ownership
Product
•
Targeted Product
•
Healthcare Plans
•
Network of private
providers
•
Health camps and
fairs
•
More trust in the health system as a whole and
generating greater interest in and uptake of health
insurance shown by community members.
Increased potential for expansion of the national
health insurance scheme by linking the community
and the scheme.
Community self-sufficiency established.
Strengthened links between public and private
sectors.
Strengthened national health system.
677
REGULATION
IMPACT
DIMENSIONS
•
Increased access to quality healthcare services for
Attribute
•
Effective
quality urban and semi urban communities.
assurance system
•
Reduced disease morbidity and mortality.
•
Better performance of health systems by
Reach
•
Public enlightenment increasing volumes
campaign
•
Improved communities’ access to affordable
•
Information
medicines.
dissemination
•
Better quality of service standards achieved by
Infrastructure
•
Provider training
close monitoring.
•
Improved
working •
Strengthened health system as a whole.
environment
•
Reliable employment and income-generating
•
Partnerships
opportunities.
Product
•
Micro-financing
Improved access to medicines.
scheme
•
Provider accreditation
program
•
Inspection directorates
•
Broad-based
stakeholder support
RISK-POOLING
IMPACT
DIMENSIONS
•
Reduced self-treatment, harmful use of medicine,
Automation
Sophisticated Information and delayed treatment by providing regular access to
innovative technologies.
Technology Platform
Reach
•
Marketing and branding
•
Multiproduct and high
quality coverage
•
Communitywide riskpooling
Product
•
Health micro-insurance
schemes
•
Product tangibility
•
Custom product design
Community Participation
Community ownerships
Affordability
Targeted Incentives
Compensation for lost
wages
Medicine cost reduction
•
Increased access to a large number of surgical
procedures, maternity and neonatal care.
•
Sense of appreciation and trust created in the
people.
Low and affordable premiums with providers
negotiated by leveraging the existing large
network of private providers
Control of significant resources in beneficiaries’
hands.
Improved health and awareness of underserved
communities.
Accessible healthcare services available at an
affordable cost.
Low cost of curative treatment through prevention
programs
Reduced financial burden of lost wages.
678
The above figure shows how different dimensions affect the success of healthcare innovation
mechanisms. We have labeled three axes as service delivery, risk pooling and regulations. Each
section of the larger pie thus generated represents a region common between any two healthcare
innovation mechanisms. For each section, we analyzed what dimension discussed above was most
influential. Based on the above tables, we calculated the number of similar features in each
dimensions for any two particular innovation mechanisms and thus determined the percentage of
Influence that particular dimension had on the corresponding section. For example, if an enterprise
were to focus on risk-pooling as well as regulation, it should focus more on reach based initiatives,
followed by product and infrastructure.,
Conclusions:
Health care is a mega concern facing the world at large. It is also a concern that is intimately
personal to every human being.
Thus the seven parameters (automation, attribute, reach, affordability, infrastructure, community
participation and product) discussed above have been classified into demand side and supply side
drivers. Automation in healthcare sector will lead better performance, quality and in some cases
might be cost effective. This boosts the supply side in economy thus is classified into supply side
driver. Similarly the other parameters namely reach, community participation and infrastructure are
supply side drivers and affordability, product and attribute are demand side drivers.
Based on learning’s from the initiatives, we propose the following framework outlining the short,
medium and long term goals associated.
679
Long Term
Outcomes
Middle term
Outcomes
Changes in Policy, Provider/system practice, System access and
Consumer behavior
Short term
Adoption of Best Practices at All Levels
Outcomes
Outputs
Improved prevention and control of diseases
Increased access to care Outcomes
Improved quality of life
Enhanced health promotion throughout all life stages
Translation and
dissemination of surveillance
and research findings
Implementation of programs,
policies and services and
Coordinated approach
Approach
Demand Side Drivers
Supply Side Drivers
Evaluate
intervention cost
effectiveness
Increase
Understanding of
health care services
Input
Develop public
health intervention
program
Modify health care
system
Automation, Community
Participation, Reach and
Infrastructure
Affordability, Product and
Attribute
Innovation-Approach-Outcome Framework
680
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Saddikuti, Mohan Gopalakrishnan, and Saji Gopinath
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Murphy (eds.) Berlin: Springer, pp. 83-88.
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Constructively Critical View of the State-of-the-Science. Journal ofOrganizational Behavior, 25:
147-173.
Govindarajan, V. 2007. The Importance of Strategic Innovation.http:/www.vijaygovindarajan.com/
2006/03/the_importance_of_strategic_in.htm.
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Business School Press.
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Aastrup, J. and Halldorsson, A. (2008), “Epistemological role of case studies in logistics –A critical
realist perspective”, International Journal of Physical Distribution & LogisticsManagement, Vol. 38
No. 10, pp. 746-63.
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Consumers’ Attitude and Intention towards Purchasing EcoFriendly Products: Analyzing the Role of Environmental Knowledge
and Environmental Concern
Rambalak Yadav1, Govind Swaroop Pathak2
1
ICFAI Business School
IFHE University, Hyderabad
Telangana-501203
India
Email id: rbyadav1988@gmail.com
2
Department of Management Studies
Indian School of Mines
Dhanbad
Jharkhand-826004
India.
Email id: gsppathak@gmail.com
Introduction:
In the last few decades, environmental protection has become important and issue of concern for
government, organization as well as society. Considering the importance of environment various
policies and technological implementation have been done by the government as well as the
industries to have a less detrimental impact on the environment. Although these technical
implementations have played an important role in providing an effective solution to the
environmental issues, it is very important to understand the individual attitude and intention
towards these behavior i.e. pro-environmental/ eco-friendly behavior. In the present research, the
focus is on consumers’ intention to purchase eco-friendly products.
The research related to the green consumption are few and far between in the Indian context and
understanding of consumer’s perspective towards their green purchasing is considered as very
1
2
ICFAI Business School, IFHE University, Hyderabad
Department of Management Studies, Indian School of Mines, Dhanbad
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important from a marketer’s point of view, as it help in suitable strategy formulation. Therefore,
the present paper attempts to understand the consumer’s intention to buy eco-friendly/green
products. In this research paper, the focus is mainly on environmental knowledge and
environmental concern. The research has attempted to understand the impact of environmental
knowledge and environmental concern on consumers’ attitude and intention to purchase ecofriendly/ green products.
Review of Literature and Hypotheses Development:
Behavioral intention is widely used in the field of consumer psychology due to the high
predictive power of intention on the actual behavior. Higher the consumer intention to buy a
product, more will be the chances that consumer will buy that product (Dodds et al. 1991). The
present study has also attempted to understand the consumer’s intention to purchase eco-friendly/
green products.
Attitude: Attitude can be defined as an individual's positive/negative evaluation of performance
of the particular behavior (Ajzen and Fishbein, 1980).
Environmental concern
Hines et al. (1987) stated that the individual concern for the environment is the fundamental to
environmental related research.
Several researchers in the past have reported that environmental concern among the individual
positively influence their attitude as well intention to purchase eco-friendly products.
Environmental Knowledge
Environmental knowledge in defined as “knowledge an individual is having about environmental
issues”. Stutzman and Green (1982) stated that individuals will not act positively toward a
particular behavior until they don’t have proper knowledge about the issue of concern; therefore
knowledge is prerequisite for forming any attitude. Consumer green purchase behavior is
generally associated with their knowledge of environmental issues (Bazoche et al., 2008).
On the basis of the discussion, the following hypotheses were formulated:
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H1: Environmental concern among consumers significantly influences their attitude towards
eco-friendly products.
H2: Environmental concern among consumers significantly influences their intention to
purchase eco-friendly products.
H3: Environmental knowledge significantly influences the consumer’s attitude towards ecofriendly products.
H4: Environmental knowledge significantly influences the consumer’s intention towards ecofriendly purchasing.
H6: Consumer’s attitude towards eco-friendly products significantly influence their eco-friendly
purchase intention
On the basis of the review of literature and discussed hypotheses, the conceptual framework for
the present research was developed (Refer to Fig.1)
Environmental
Concern
H2
H1
H3
Environmental
Knowledge
Attitude
H4
Fig 1: Proposed research framework
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H5
Purchase
Intention
Research Methodology:
Questionnaire development
In the present study all the constructs were adopted from the relevant literature. The details of the
constructs and their sources are mentioned in Table 1.
Table 1: Questionnaire and their measuring items
Constructs and Measuring Items
Sources
Attitude
To me buying green/eco-friendly product is:
Kim and
ATT1: Extremely bad (1)/ extremely good (7)
Han
ATT2: extremely undesirable (1)/ extremely desirable (7)
(2010)
ATT3: extremely unenjoyable (1)/ extremely enjoyable (7)
ATT4: extremely foolish (1)/ extremely wise (7)
ATT5: extremely unfavourable (1)/ extremely favourable (7)
ATT6: extremely unpleasant (1)/ extremely pleasant (7)
Environmental Concern
EC1: The balance of nature is very delicate and can be easily upset.
EC2: When humans interfere with nature, it often produces disastrous
consequences.
Mostafa
EC3: Humans must live in harmony with nature in order to survive.
(2009)
EC4: Mankind is severely abusing the environment.
EC5: Mankind was created to rule over the rest of nature*.
Environmental Knowledge
EK1: I know that I buy products and packages that are environmentally safe
EK2: I know more about recycling than the average person.
Mostafa
EK3: I am very knowledgeable about environmental issues.
(2007)
EK4: I understand the various phrases and symbols related to environment on
product package.
EK5: I know how to select products and packages that reduce the amount of
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waste dumping.
Purchase Intention
PI1: I will purchase green products for personal use.
Kim et al.
(2013)
PI2: I am willing to purchase green products for personal use.
PI3: I will make an effort to purchase green products.
Data Collection
The study has used questionnaire survey method for data collection using the convenience
sampling method. Initially, a pilot study was done with 25 samples to check whether the
respondents are able to understand the questions or not. Considering the pilot study, some
refinements were made in the questions to make it more understandable from the consumers’
perspective. Finally the questionnaire was distributed among 1300 respondents and 620 usable
responses were returned.
Data Analysis and Result:
Two steps structural equation modeling (SEM) was used for the data analysis, i.e. measurement
model and structural model.
Measurement model: Confirmatory Factor Analysis (CFA) was done for measurement model. At
initial the CFA result does not fit the data well. Further, one item from Environmental concern
(EC5) was deleted due to low factor loadings. This improved the overall model fit (χ2= 543.964,
χ2/df=4.217, GFI=0.908, TLI=0.909, CFI=0.923, IFI=0.923, RMSEA= 0.07).
The value of
Cronbach’s α ranges from .740 to .881, which is acceptable for internal consistency in case of
behavioral studies (Hair et al., 1988). Convergent validity was measured with factor loading and
AVE. The factor loading of all constructs was close to .6 and higher (Chin et al. 1997). The value
of AVE ranges from .51 to .72 which is well above the acceptable limit of .5 and higher (Hair et
al., 1988). Refer to Table 2 for detail.
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Table 2: Reliability and validity of the constructs
Variables
Factor
SMC
Loading
Cronbach’s
AVE
α
Attitude (ATT)
ATT1
.70
.49
ATT2
.79
.62
ATT3
.80
.63
ATT4
.66
.43
ATT5
.69
.48
ATT6
.73
.54
EC1
.89
.80
EC2
.71
.51
EC3
.63
.40
EC4
.56
.31
EK1
.60
.36
EK2
.80
.64
EK3
.86
.73
EK4
.78
.60
EK5
.71
.50
Environmental
.871
.53
.740
.51
.863
.57
.881
.72
Concern
(EC)
Environmental
Knowledge
(EC)
Purchase Intention (PI)
.
PI1
.85
.72
PI2
.88
.77
PI3
.81
.66
The square root of AVE of each construct was higher than its correlation value (Chin et al.,
1997) which ensures discriminant validity. Refer to Table 3 for discriminant validity.
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Table 3: Correlation among the constructs
ATT
EC
EK
PI
ATT
.724
EC
.388**
.714
EK
.335**
.176**
.754
PI
.588**
.439**
.363**
.848
MEAN
5.90
5.69
5.05
6.15
(S.D)
(.725)
(.891)
(.884)
(.746)
Structural Model
The goodness of fit indices of conceptual framework was assessed using structural model. The
results indicated that the present framework represents a good data fit (χ2= 563.872, χ2/df=
4.337, GFI=0.905, TLI=0.906, CFI=0.919, IFI=0.919, RMSEA= 0.07).
Hypotheses Testing
The hypotheses of the study and its details are mentioned in the Table 5.
Table 5: Result of Hypothesis testing
Path
β value
t-statistics
ρ value
S/NS
EC
ATT (H1)
.451
8.287
.01
S
EC
PI (H2)
.290
6.119
.01
S
EK
ATT (H3)
.140
3.242
.01
S
EK
PI (H4)
.064
1.779
.07
NS
ATT
PI (H5)
.537
10.827
.01
S
Note: S- Supported, NS-Not Supported. All values are significant at p < 0.01
Discussion and Implications:
The present study shows the importance of environmental concern and environmental knowledge
in influencing the consumer’s attitude as well as intention to purchase eco-friendly products. The
findings show that environmental concern significantly influences the consumer’s attitude as
well as their intention to purchase eco-friendly products.
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The findings may help the marketers to develop suitable marketing strategies for eco-friendly
products. The marketers need to focus on providing environmental related information about
their products among consumers. The marketers should emphasize on information about their
product to the consumers about the eco-friendly aspect of the product and how it is going to
benefit them as well as the environment in the long run. The increased awareness and knowledge
about the eco-friendly products among consumers may create concern for environment among
them, which may further motivate the consumers to buy eco-friendly products. Green labeling
and certification should be done for eco-friendly products and the information related to these
labels should be effectively communicated among the consumers.
Limitations of the Study:
The present research has focused only on the purchase intention of green products; there is no
measurement green purchase behavior. Future studies need to understand the consumer green
behavior also. Further, the study has used only subjective/ perceived environmental knowledge.
Therefore, future research may include both cases (subjective and objective) to measure
environmental knowledge.
References:
Ajzen, I., & Fishbein, M. (1980). Understanding Attitude and Predicting Social Behavior.
Englewood Cliffs, NJ: Prentice-Hall, Inc.
Bazoche, P., Deola, C., & Soler, L. G. (2008, August). An experimental study of wine
consumers’ willingness to pay for environmental characteristics. In 12th Congress of The
European Association of Agricultural Economics-EAAE.
Chin, W. W., Gopal, A., & Salisbury, W. D. (1997). Advancing the theory of adaptive
structuration: The development of a scale to measure faithfulness of appropriation. Information
Systems Research, 8(4), 342-367
Dodds, W. B., Monroe, K. B., & Grewal, D. (1991). Effects of price, brand, and store
information on buyers' product evaluations. Journal of Marketing Research, 28(3), 307-319.
Hair, J.F., Anderson, R.E., Tatham, R.L., & Black, W.C. (1998). Multivariate Data Analysis.
Upper Saddle River, New Jersey: Prentice-Hall.
Hines, J., Hungerford, H., & Tomera, A. (1987). Analysis and Synthesis of Research on
Environmental Behavior: A Meta Analysis. Journal of Environmental Education, 18(2), 1-8.
689
Kim, Y. J., Njite, D., & Hancer, M. (2013). Anticipated emotion in consumers’ intentions to
select eco-friendly restaurants: Augmenting the theory of planned behavior. International
Journal of Hospitality Management, 34, 255-262
Kim, Y., & Han, H. (2010). Intention to pay conventional-hotel prices at a green hotel–a
modification of the theory of planned behavior. Journal of Sustainable Tourism, 18(8), 9971014.
Mostafa, M.M. (2007) Gender differences in Egyptian consumers’ green purchase behavior: the
effects of environmental knowledge, concern and attitude. International Journal of Consumer
Studies, 31(3), 220-229.
Mostafa, M. M. (2009). Shades of green: A psychographic segmentation of the green consumer
in Kuwait using self-organizing maps. Expert Systems with Applications, 36(8), 11030-11038.
Stutzman, T. M., & Green, S. B. (1982). Factors affecting energy consumption: Two field tests
of the Fishbein-Ajzen model. The Journal of Social Psychology, 117(2), 183-201.
690
Does Pharmaceutical Price Regulation Result in Greater Access to
Essential Medicines? Effects of Drug Price Control Order in India
Saravana Jaikumari, Arvind Sahayii, Pradeep K Chintaguntaiii, Joseph T.iv and Bernice S. Lewisv
1
2
Marketing Area, Indian Institute of Management Calcutta, saravana@iimcal.ac.in
Marketing Department, Indian Institute of Management Ahmedabad, asahay@iima.ac.in
3
Chicago Booth School of Business, pradeep.chintagunta@chicagobooth.edu
Introduction:
Price regulation in the pharmaceutical industry can be a double – edged sword. While the
policymakers typically aim at making the drugs more affordable, price control on drugs may
have adverse effects on availability. Firms may exit a category under regulation due to low profit
prospects. Lesser profits may also act as a barrier to entry for new firms. Further, firms may shift
marketing focus from the drugs under price control, and reduce detailing and promotion efforts
for these drugs. These factors may eventually lead to a drop in sales volume for these drugs.
While prior studies have examined the impact of pharmaceutical price regulation on delay in
launch of new drugs (Danzon et al., 2005), pharmaceutical innovation (Vernon 2003) and
research and development investments (Vernon 2003), to the best of the authors’ knowledge, the
impact of price regulation on sales volume of regulated drugs has not been examined. Further,
while prior research on pharmaceutical price regulation has been concentrated on drug markets
in developed countries (eg. Abbott and Vernon 2007), no significant work has been done on
price regulation in an emerging economy like India - a ‘branded generics’ market.
Despite the theoretical attention on price regulation and few studies evaluating the impact on
pharmaceutical business and consequently, the welfare of the society (eg. Podnar et al., 2007),
there is a lack of strong empirical evidence linking price regulation and drug availability.
Examining the effect of price regulation on access and availability of drugs is of utmost
importance to both policy makers and managers in the pharmaceutical industry. This is also
691
particularly important in an emerging economy like India as the ostensible reason for price
regulation is to increase affordability and accessibility in a country that is considered a privatized
health economy (Duggal 2007) with around 80% of healthcare expenses being borne privately,
with majority being out of pocket expenses (Banerji 2013). In this paper, using a unique dataset
and an event study approach, we report the impact of pharmaceutical price regulation on sales
volume of drugs in India. We present the preliminary findings using the event study approach in
this paper, while empirical work (applying synthetic control methods, propensity score matching
and regression discontinuity) is still ongoing.
Price Regulation in India
India is considered a privatized health economy (Duggal 2007) and around 80% of healthcare
expenses are borne privately, with majority being out of pocket expenses (Banerji 2013); in this,
India is quite different from the USA where insurance pays for more than 90% of health related
expenditure and the UK, where a National Health Service covers majority of costs incurred. As
per capita income in India is also low ($1800 in 2014), and neither universal healthcare nor
universal insurance are available, affordable access to medicines is considered a key policy goal
of the Indian government. Given the low per capita income and the lack of universal health care
provision and the privatized health care access, the Drug Price Control order came into existence
to fulfill a key policy goal of the Indian government - to provide increased access to medicines to
people at an affordable price.
In May 2013, the Department of Pharmaceuticals (DoP) of India brought 348 medicines under
price control by the Drug Price Control Order (DPCO). These 348 formulations are considered
essential and lifesaving drugs (National List of Essential Medicines - NLEM), and address the
priority health needs of the country. The objective of the DPCO 2013 was to ensure availability
of essential medicines at affordable prices for the poorer masses, while still encouraging
innovation and growth in the pharmaceutical industry (DPCO 2013). The order set a price ceiling
for these drugs by averaging the existing market prices (of all brands that have a market share of
1% or greater). While the brands priced above the ceiling price were to reduce the prices, the
692
other brands had to maintain the prices at current levels. Further, the order restrained the price
increases (optional) to be in line with or below the wholesale price index in any one year period.
Methodology:
Data
The data used in this study are extracted from IMS Health (India) database. All the oral solids
(105 molecules) that come under the DPCO regulation are included in the analysis (few very low
volume oral solids that are under NLEM 2013 are not covered by IMS due to insignificant data).
We extracted monthly MAT (Moving Annual Total) sales volume (number of pills) for all these
SKUs from May 2009 to July 2014. The timeline of the event study is presented in Table 1.
Table 1. Timeline for the Event Study
Estimation period
Event (announcement of DPCO 2013)
Implementation period
Event Window
May 2009 to April 2013
May 2013
May 2013 to June 2013
July 2013 to June 2014
Empirical Strategy
We use a novel event study approach to examine the impact of DPCO 2013 on sales volume of
drugs. First, we estimate the best fitting SARIMA function (with or without drift) using historic
sales volume (number of pills) data. The specification of the seasonal ARIMA (p, d, q) (P, D, Q)
[m] process is presented in (1).
(1)
where
and
the unit circle),
are polynomials of orders P and Q respectively (both contain no roots in
and
are polynomials of order p and q respectively (both have no roots
for |z| <1), c is the drift term and if c ≠ 0, then it implies a polynomial of order d + D in (1). B
refers to the backshift operator,
denotes the white noise process and
refers to the time
indexed variable of interest. Applying the steps specified by Hyndman and Khandakar (2008),
we identify the appropriate values for p, d, q, P, D and Q for each of the 105 molecules.
693
Second, we create a baseline using the estimated SARIMA function for the period immediately
following the event (termed the event window). All the monthly point forecasts for each of the
105 molecules were tested for statistical significance. We eliminated 7 molecules from further
analysis as the point forecasts did not reach statistical significance (p>.05).
Finally, we compare the actual sales volume with the baseline (termed as ‘abnormal change’) to
isolate the impact of the event. We compute the difference for each of the 98 molecules for the
12 month period. The differences over the 12 month period is then added for each molecule to
arrive at ‘cumulative abnormal change’ (CAC) for that molecule. This value denotes the impact
of DPCO on that molecule’s sales volume in the 1 year period. The CAC values of 89 molecules
are found to be statistically significant (p < .0001). A summary of the results is presented in
Table 2.
Table 2. Results of Event Study: Effect of DPCO on Sales Volume of Molecules
Overall statistics
Mean CAC (Δ sales volume)a
-33,931,992
Median CAC
-3,936,971
Minimum CAC (Paracetamol)
-1,018,575,362
Maximum CAC (Metformin)
693,960,869
Molecules with increase in sales volume
No. of Molecules
37
b
Mean Increase
70,215,165
Molecules with decrease in sales volume
No. of Molecules
52
c
Mean Decrease
-108,036,700
- a,b,c: significant at p<.0001
-
CAC: Cumulative abnormal change due to DPCO (over 12 months)
Factors Affecting Change in Sales Volume
While the event study results clearly suggest a negative effect of DPCO on social welfare (in
terms of sales of essential medicines), the analysis does not shed light on the drivers for the
observed results. We use the results of the event study (CACs) of 46 of the molecules
(highlighted in Appendix A) and explain them using few market factors. These 46 molecules
form about 90% of the total value of the 105 molecules (in terms of sales value as of June 2014).
694
The CAC is converted into percentage change in sales volume (relative to total sales volume
recorded in the 12 month period). The percentage change in sales volume due to DPCO is then
expressed as a function of:
i) absolute price point as per DPCO 2013
ii) price reduction faced by the market - weighted average price cut of top 5 brands per molecule
with their market shares as weights,
iii) whether the molecule is prescribed for acute or chronic illnesses (dummy variable),
iv) percentage prescription from CP/GPs,
v) percentage sales from urban and semi-urban cities,
vi) a proxy for the overall detailing efforts for a molecule, and
vii) an interaction term between sales from urban and semi-urban cities, and detailing efforts.
Specifically, we estimate the coefficients of Equation (2).
(2)
where the subscript i refers to the molecule, %CAC refers to the percentage change in sales
volume due to DPCO, Pri refers to the price of the molecule as per DPCO 2013, PriRed refers to
the price reduction experienced by the market, Acu is the dummy variable indicating whether the
molecule i is prescribed for acute illnesses, CPRx refers to the percentage of prescriptions from
CP/GPs, T1T2 refers to the percentage of sales from urban (tier-1) and semi-urban (tier-2) cities,
Det refers to the relative detailing efforts for the molecule post DPCO and T1T2xDet refers to the
interaction between the last two terms.
We run a simple OLS (Ordinary Least Squares) regression followed by GLS (Generalized Least
Squares) regression. The results of the analyses are presented in Table 3.
695
Table 3. Analysis of CACs
Dependent Variable: % Change in Sales Volume
(Predicted-Actual)/Actual % (12 months)
Explanatory
Variable
OLS
GLS
NLEM Price
.002*
.002*
Price Reduction
.051
.051
Acute? (Yes=1)
-.026*
-.026*
CP/GP Rx %
-.047
-.047
Tier1-2 Sales %
-.407**
-.407**
Detailing Efforts
-.388**
-.388**
Tier1-2 x Detailing
.609**
.609**
Intercept
.270**
.270**
Overall Model
F=2.422 (7, 38)
AIC=-155.50
* p < .10, ** p < .05
Results and Discussion:
Our findings have the following policy implications. Since price control is actually decreasing
access to the list of drugs that the government considers as essential, it may be time for the
government to re-examine the design and operation of price control in India. It is worthwhile to
note here the drug prices in India are already amongst the lowest in the world and that profit
margins for Indian pharmaceutical firms are much lower than that of big pharma firms of the
west. Another implication is that GoI may want to consider whether there are other ways of
increasing access to drugs for patients in India than through price control. Indeed, whether there
are some positive incentive mechanisms that can be developed to increase access.
Our research also has the following marketing implications. As expected different town classes
react differently to price changes. As a corollary, therefore, it seems reasonable to state that sales
in the Indian pharma market in urban areas appears to be significantly a function of the
marketing effort and less a function of other variables and that the marketing effort elasticity of
price is high. Indeed, some firms are known to have exited from some product categories after
the price controls came into effect.
696
Key References:
Banerji, A. (2013), Review of Asia-Pacific's healthcare systems with emphasis on the role of
generic pharmaceuticals, Academy of Health Care Management Journal, 9(1/2), 53A.
DPCO (2013), Drug Price Control Order 2013 – National Pharmaceutical Pricing Authority,
http://www.nppaindia.nic.in/DPCO2013.pdf
Duggal, R. (2007), Healthcare in India: changing the financing strategy. Social Policy &
Administration, 41(4), 386-394.
Hyndman, Rob. J., & Khandakar, Yeasmin (2007), Automatic time series for forecasting: the
forecast package for R, Journal of Statistical Software, 27(3), 1-22.
Mrazek, Monique F. (2002), Comparative Approaches To Pharmaceutical Price Regulation In
The European Union, Croatian Medical Journal, 43(4), 453-461.
Vernon, J. A. (2002), Drug Research and Price Controls. Regulation, 25(4), 22.
Other references available on request
Assistant Professor (Marketing), IIM Calcutta
Professor (Marketing), IIM Ahmedabad
iii
Professor (Marketing), Chicago Booth School of Business
iv
Professor (Marketing), Chicago Booth School of Business
v
Professor (Marketing), Chicago Booth School of Business
i
ii
697
Emerging issues: Abortive Green Buying Behavior; WHY??
Ms. Harsh Tullani1. And Dr. Richa Dahiya2
SRM University, Sonepat
1
E-mails: 1harshtullani21@gmail.com,
SRM University, Sonepat
2
Email: 2richa_dahiya18@yahoo.co.in
Introduction:
The Market has modernized from past few decades towards updating in technology, living
standard, buying behavior & consumer preferences. Therefore, there is a gigantic opportunity to
sustain in the market. With the passage of time, people are more concerned about the
environment. Depletion of Ozone layer has given birth to Green Marketing, Ecological
Marketing or Environmental Marketing, Green Products and Green Purchasing. Green marketing
is modification of the product and procedure which can prevent environment. According to
Dahlstrom (2011) “it is the study of all efforts to, consume, produce, distribute, promote,
package and reclaim products in a manner that is sensitive or responsive to ecological concerns”.
Green Products are ecological, organic and natural products. Products which integrate with
recycled material, minimum effect on the environment, minimum harmful substances are termed
as Green Products. Modification in the product which does not cause any blemish environment
& people who are environmentally conscious or who buy those Green Products are known as
Green Consumer.
“Green purchasing is the behavioral factors which include environmental-
friendly behavior of the consumers (Dietz et al., 1998)” & it is termed as the buying, purchasing
of Green Products. Hughner (2007) found that “ many consumers showed a positive attitude
towards purchases of organic food products (67%), only a small number of consumers (4%)
actually purchased those products”. Similarly, In India also, consumer interest is also shifting
towards green products. Consumer, In India, show their concern & willingness for Green
Products but, when actual purchase decision comes, they dissuade from buying Green Products
So, Green Consumerism is still in puzzling; as consumers pay attention to Green Products,
698
generates interest & desire for purchase but doesn’t lead to action stage. So, it is important to
diagnose & understand those factors that lead to Abortive Green Buying Behavior of consumers.
So, this study is an attempt to analyze Why abortive Green Buying Behavior occurs?
Research Gap & Research Problem:
Gap lies between the influencing efforts by Marketers and the buying decision of the consumers.
According to Shrum, et. Al, (1995) “Product performance is an issue, other factors, such as a pro
environmental label, have a diminished impact on people’s inclination to buy green.” As there
are various factors which influence consumer to buy green products. As Panni (2006) says
“Availability of products and information on the Green products significantly influences buying
behavior of consumers.” Marketers need to educate and generate awareness about the products to
influence Green buying behavior. Hughner (2007) pointed out, “While many consumers showed
a positive attitude towards purchases of organic food products (67%), only a small number of
consumers (4%) actually purchased those products.” So, the consumer is concerned and they
want to buy the green products but they dissuade while make purchase decision why?? Ahmad
and Juhdi (2008) notified that “perception towards organic food, awareness on government
action and support, beliefs about product safety for use, belief about product friendliness to
environment, availability of product and product information are the most influential factors that
affect consumers’ pro-environmental behavior.” Mostafa (2009) - This study holds altruism,
environmental concern, environmental knowledge, skepticism towards environmental claims,
environmental attitudes to be the main factors that may affect consumers’ green purchasing
behavior. Papadopoulos et al., (2009)says that “It has been also found that the consumer distrust
on the environmental claims and the doubts about the existence of the environmental friendly
companies usually create a negative impact on the consumer pro-ethical or pro-environmental
behavior.” Phipps et al. (2013) has introduced reciprocal deterministic theory to be aware of
sustainable consumer behavior. This study focuses on the past behavior and consumer concern
for the green products which seems to be indicator for future purchases. This study suggests
various factors such as attitude, along with past sustainable behaviors and sociocultural
environments, affect future sustainable behavior of the consumer.
As evident from the various studies on green marketing, green purchase behavior, green buying
behavior & green consumers, there is a gigantic confront that even people are aware and
699
concerned about the green products but still they do not buy enough of the Green products.
WHY???
So, this study will be a step towards exploring and testing those factors which dissuade a
consumer from Green buying. The past literature supports many factors contributing to green
buying,
but only a few studies have been done on dissuading factors for green buying.
Analyzing and working on dissuading factors is equally important to get a complete view of the
phenomenon. To fill up this gap this study explores and tests factors for abortive green buying
behavior using the AHP analysis technique.
Objective of the Study
To find out the factors influencing customers for not buying Green Products.
To find out which factor is most influential for not buying Green Products.
To propose what the companies should do to gain the Customer.
Research methodology:
The study employs AHP Analysis Technique to find out the most influential factors for not
buying green products. For the purpose, expert views were taken from 5 companies (Samsung,
DELL, Panasonic, LG, Philips); to get all the factors rated as per the Saaty Rating criteria
(shown in Table:1). Responses on the Saaty Rating Scale were taken through a personally
administered Questionnaire from the experts of the companies and academia. A 9 point scale was
taken, including Factors that were elucidated from literature review and discussions with
company experts. Each point on the 9 point Saaty scale represents different criteria as given in
table 1.
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Table:1 The Saaty Rating Scale for AHP Analysis.
Data analysis & Result:
As per the responses from academicians and companies, factors are rated on the basis of the
Saaty Rating Scale.
Table:2 Average rating of all the responses.
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Eigen Vector
Table:3 Represents Eigen vector with percentage.
Results
Table:4 Factors Ranking for abortive Green Buying Behavior
The overall results of AHP analysis show that Low Availability of Green Products (18.3) is the
main cause for non purchase of Green Products. So, companies should focus on their distribution
network and wide availability of Green Products to ensure more purchases by the consumer. For
example, whirlpool was first to launch Mitticooler as their green product initiative, which will
not only save huge electric bills but also be benefitting health. But as the product was not widely
available in the market, consumers lost interest in the product. Likewise Brand Image (16.5) &
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usage (12.2) are ranked in 2nd & 3rd place. That means companies should pay more attention to
mass media channels to build up a Brand Image and induce more usage of the green products.
This is evident from the current practices of companies like Patanjali, who are educating
consumers about their product first and through that they are building their demand, they have
also strengthen their distribution network in the past couple of years. Further as shown in the
Results, Companies should pay attention to product quality Advertisements & perception of
people.
Implications of the Study:
This study results will help managers to formulate various strategies to gain & attract the
customer towards Green Products. The study results provides a ranked list of factors that are
leading to abortive green buying behavior. Working on factors that are already contributing to
green marketing will not add anything new; but working on factors that are obstructing
consumers to adopt green products will add enormous opportunities for the companies and also
fulfills the zest for environmental concern. So, study results will give an insight to the companies
and environmentalists also on how the marketers, strategists & Companies can make and
revamp their strategies to bring the consumer to the purchase stage from awareness stage.
Prctioneers and researchers can built up on this study to dignose more factors in different market
settings. The study could also be done with different product lines and different consumer
demographics to conclude a final model for abortive green buing behavior.
References:
Articles
Ahmad, S.R.B., and Juhdi, N. (2008). Consumer’s perception and purchase intentions towards
organic food products: Exploring the attitude among Malaysian consumers. [online] Available at
<http://www.pbfeam2008.bus.qut.edu.au/papers/documents/SitiNorBayaahAhmad_Final.pdf>
[Accessed 15 sept 2016].
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Dietz, T., Stern, P. C., & Guagnano, G. A. (1998). Social structural and social psychological
bases of environmental concern. Journal of Environment and Behavior, 30, 450 – 471.
Doorn, J.V., and Verhoef, P.C. (2011).Willingness to pay for organic products: differences
between virtue and vice foods. International Journal of Research in Marketing, Vol. 28 No. 3, pp.
167-180.
Hughner, R. S., McDonagh, P., Prothero, A., Shultz, C. J., & Stanton, J. (2007). Who are organic
food consumers? A compilation and review of why people purchase organic food. Journal of
consumer behaviour, 6 (23), 94-110.
M. Phipps, L.K. Ozanne, M.G. Luchs, S. Subrahmanyan, S. Kapitan, J.R. Catlin, T.
Weaver.(2013). Understanding the inherent complexity of sustainable consumption: A social
cognitive framework. Journal of Business Research, 66 (8) (2013), pp. 1227–1234.
Mostafa, M. ( 2009). Shades of green: A psychographic segmentation of the green consumer in
Kuwait using self-organizing maps. Expert Systems with Applications, 36(8), pp.11030-11038.
Panni, M.F.A.K. (2006). The Effect of Consumerism towards customer attitudinal behavior in
food industry in Malaysia. M.Phil. Multimedia University.
Papadopoulos, I., Karagouni, G., Trigkas, M. and Platogianni, E. (2009). Green marketing. The
case of timber certification, coming from sustainable forests management, promotion. In:
Euromed Research Business Institute, 2nd Annual Euromed Conference. Salerno, Italy, 26-28
October 2009. Salerno: Euromed Research Business Institute.
Shrum, L. J., McCarty, J. A., Lowrey, T. M. (1995). Buyer Characteristics of the Green
Consumer and Their Implications. Journal of Advertising 24 (2), 71-82.
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Predicting Ecologically Conscious Consumer Behaviour among
Indian Urban Consumers: An Exploratory Study
Khan Md. Raziuddin Taufiquei, Sridhar Vaithianathanii
1
2
BRAC Business Scholl, BRAC University, 66 Mohakhali, Dhaka 1212, Bangladesh.
E-mail: raziuddin.taufique@bracu.ac.bd
Institute of Management Technology, Hyderabad, Shamshabad Mandal, RR District, Hyderabad
501218, India.
E-mail: sridhar.v@imthyderabad.edu.in
Introduction:
As an emerging economy, India is also reportedly one of the fastest progressing countries in the
world in terms of addressing environmental issues and improving environmental quality (World
Bank, 2010). India was also ranked as the seventh most environmentally hazardous country in
the world in 2011 (UNEP, 2011). Increased, and sometimes irresponsible consumption activities
are a major source of environmental hazard. For example, vehicle emissions are responsible for
70% of India’s air pollution (Nittala, 2014). As the urbanization advances, the pollution and
other environmental hazards are expected to rise. One estimate suggests that India is expected to
top the world in car use by 2050 (Ramanathan, 2004). Experience in other countries suggest that
environmentally conscious consumer behaviour can play a vital role in curbing the
environmental deterioration, as 30% to 40% of environmental degradation has reportedly been
accounted for by consumption activities of private households (McDougall, 1993). Growth in
urbanization, change in lifestyle and increase in consumerism are claimed to complicate the
handling of solid waste in India (Vij, 2012). Thus, Indian (urban) consumers need to be made
environmentally responsible in their consumption behaviour in order for India to keep pace the
economic growth while minimizing the detrimental impact on environment, at least from
consumers’ end.
Research Gap and Research Problem:
Research on exploring the preparedness of consumers in adopting ecologically conscious
consumer behaviour is conspicuously scarce in Indian context (Datta, 2011; Jain & Kaur, 2004;
705
Nair & Menon, 2008). This research is based on the framework of Theory of Planned Behaviour
(TPB) model, which was previously proved to be valid in examining the connection between
environmental attitude and behaviours (e.g., Gotschi, Vogel, Lindenthal, & Larcher, 2009;
Kaiser, Wolfing, & Fuhrer, 1999).
This study applies the TPB framework that integrated
attitudes, subjective norms and perceived consumer effectiveness as the antecedents of
behavioural intentions. The model then links intentions to self-reported ecologically conscious
consumer behaviour.
Research Objective:
The study attempts to unfold the possible antecedents in predicting pro-environmental consumer
behaviours applying the TPB, one of the most predictive persuasion theories in understanding
behavioural intentions and behaviours, in Indian context.
Research Method:
Online survey was used in collecting the data. Respondents were selected using their personal
and official e-mail addresses. Survey invitations were sent to about 700 e-mail contacts. The
invitation guaranteed anonymity and confidentiality to the respondents and also informed them
that the gathered data would be published in academic or scientific publications. Data collection
period was from 10 June 2015 to 5 September 2015. Two follow up emails were sent in the gap
of fifteen days. Total 165 usable responses were received. A pre-test with 12 students was
performed. Subsequently, the questionnaire was slightly modified with respect to the level of
knowledge required and the wording of the questions. The majority of the respondents were from
Hyderabad (95). The number of responses from New Delhi and Kolkata were 51 and 19
respectively. Of the total respondents 59.4% were male, 61.8% had a graduate degree and 37.5%
had postgraduate degree. The age brackets of majority of the respondents were 18-24 years
(67.9%) and 25-34 years (23%).
Analysis and Results:
PLS-SEM (Partial Least Squares-Structural Equation Modeling) (Lohmoller, 1988; Wold, 1985)
was used to test the hypotheses using SmartPLS 3 software (Ringle, Wende, & Becker, 2014).
This approach is proved to be superior to CB-SEM (covariance-based structural equation
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modeling) in exploratory studies where sample size is relatively small (Chin & Newsted, 1999;
Reinartz, Haenlein, & Henseler, 2009). A priori reflective measurement models were analyzed to
test the reliability and validity of the constructs before proceeding with the analysis of the
structural model. The initial measurement model indicated that thirteen items needed to be
removed because they exhibited loadings below 0.708 (Hair Jr, Hult, Ringle, & Sarstedt, 2016).
This left 30 items for structural model to test the hypotheses.
A post-hoc power analysis was performed (Carbonell, Rodríguez, & Pujari, 2009) since our
sample size is relatively small (165 cases). This power analysis was implemented with the
statistical package G + Power 3 (Faul, Erdfelder, Lang, & Buchner, 2007), which allowed us to
determine that for our structural model and the sample, the power value is 0.99 (α = 0.05 and
f2 = 0.15), which exceeds the criterion of 0.80 recommended by Cohen (1988). This study
tested all of its hypotheses in the structural model using a bootstrap sample of 5,000 with biascorrected confidence interval method (α = 0.05).
When analyzing the hypothesized relationships in the proposed model, the results provide no
support for the hypothesis of direct relationship between subjective norm and behavioural
intention because the effect of subjective norm on behavioural intention is non-significant ( =
0.116, p=0.112). However, the results support all other hypotheses of direct relationships:
attitudes towards environment is positively related to behavioural intention ( = 0.325, p=
0.000) and ECCB ( = 0.281, p= 0.000); subjective norm has direct positive effect on ECCB (
= 0.178,
p= 0.005); perceived consumer effectiveness is positively related to behavioural
intention ( = 0.395, p= 0.000) and ECCB ( = 0.493, p= 0.000); and behavioural intention is
positively related to ECCB ( = 0.382, p= 0.000).
In order to better understand the results, we analyzed the indirect effects of attitudes, subjective
norms, and perceived consumer effectiveness on ECCB through behavioural intention. The
results suggest that two hypotheses of indirect effects are supported. That is to say, consumer
attitudes towards environment has significant positive indirect influence on ECCB through
behavioural intention and perceived consumer effectiveness has significant positive indirect
707
influence on ECCB through behavioural intention. However, the hypothesis indicating the
indirect effect of subjective norm on ECCB via behavioural intention was not supported.
Implications of the Study:
Although the study was exploratory in nature, there are some possible policy implications. First
of all, the study reveals that consumers’ attitudes towards environment and perceived consumer
effectiveness are strongly positively related to their pro-environmental behaviour. This indicates
that consumers of urban India could be encouraged to be more environmentally responsible in
their consumption behaviour through designing and promoting environmentally friendly
products. This is very vital for urban India as the country is one of the top in the region with
regards to environmental deterioration. Accordingly it is important for the policy makers
working towards improvement of environment to understand the behavioural aspects of the
consumption so that they could make people change and believe in certain aspect of their action
leading to betterment of the environment and ecology. As the results of the study suggest,
consumers at personal level believe that their individual effort can contribute to the protection of
environment and hence marketers and other policy makers should develop eco-friendly products
and promote pro-environmental consumption behaviour. Secondly, the insignificant relation of
subjective norms to pro-environmental behaviour suggest that marketers may have to move away
from the traditional way of managing marketing activities targeted exclusively on collectivistic
nature of Indian culture. That is to say, especially in the case of urban India, marketing efforts
might also need to be targeted from individualistic perspective. Hence the notion of perceived
consumer effectiveness shall be aligned accordingly by the marketers or policy makers while
designing their strategies for environmentally sustainable products.
708
References:
Carbonell, P., Rodríguez, A. I., & Pujari, D. (2009). Customer involvement in NS
development: an examination of antecedents and outcomes. Journal of Product Innovation
Management, 26(5), 536–550.
Cohen, J. (1988). Statistical power analysis for the behavioral sciences (2nd ed.). Hillsdale, NJ:
Erlbaum.
Chin, W. W., & Newsted, P. R. (1999). Structural equation modeling analysis with small
samples using partial least squares. In R.H. Hoyle (Ed). Statistical strategies for small sample
research (pp. 307-341). Thousand Oaks, CA:Sage.
Datta, S. K. (2011). Pro-environmental concern influencing green buying: A study on Indian
consumers. International Journal of Business and Management, 6(6), 124-133.
Faul, F., Erdfelder, E., Lang, A., & Buchner, A. (2007). G*Power 3: a flexible statistical power
analysis program for the social, behavioral, and biomedical sciences. Behavioral Research
Methods, 39(2), 175–191.
Gotschi, E., Vogel, S., Lindenthal, T., & Larcher, M. (2009). The role of knowledge, social
norms, and attitudes toward organic products and shopping behavior: Survey results from high
school students in Vienna. The Journal of Environmental Education, 41(2), 88-100.
Hair Jr, J. F., Hult, G. T. M., Ringle, C., & Sarstedt, M. (2016). A primer on partial least squares
structural equation modeling (PLS-SEM). Sage Publications.
Jain, S. K., & Kaur, G. (2004). Green marketing: An attitudinal and behavioural analysis of
Indian consumers. Global Business Review, 5(2), 187-205.
Kaiser, F.G., Wolfing, S., & Fuhrer, U. (1999). Environmental attitude and ecological behaviour.
Journal of Environmental Psychology, 19, 1–19.
Lohmoller, J. B. (1988). The PLS program system: Latent variables path analysis with partial
least squares estimation. Multivariate Behavioral Research, 23(1), 125-127.
McDougall, G. H. (1993). The green movement in Canada: Implications for marketing
strategy. Journal of International Consumer Marketing, 5(3), 69-87.
Nair, S. R., & Menon, C. G. (2008). An environmental marketing system–a proposed model
based on Indian experience. Business Strategy and the Environment, 17(8), 467-479.
Nittala, R. (2014). Green Consumer Behaviour of the Educated Segment in India. Journal of
International Consumer Marketing, 26(2), 138-152.
Ramanathan, S. K. (2004). India to top in car volumes by 2050. Retrieved from
http://www.rediff.com/money/2004/oct/23car.htm
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Reinartz, W., Haenlein, M., & Henseler, J. (2009). An empirical comparison of the efficacy of
covariance-based and variance-based SEM. International Journal of research in
Marketing, 26(4), 332-344.
Ringle, C. M., Wende, S., & Becker, J. M. (2014). Smartpls 3. Hamburg: SmartPLS.
United Nations Environment Programme (UNEP). (2011). World Conservation Monitoring
Centre. Retrieved from http://www.unep-wcmc.org
Vij, D. (2012). Urbanization and solid waste management in India: Present practices and future
challenges. Procedia-Social and Behavioural Sciences, 37, 437-447.
Wold, H. (1985). Partial least squares. Encyclopedia of statistical sciences.
World Bank. (2010). The little green data book. Retrieved from http://wwwwds.worldbank.org /
external/default/WDSContentServer/IW3P/IB/2010/07/06/000333038
20100706034730/Rendered/PDF/555420PUB0litt1PI19564496001PUBLIC1.pdf
i
Assistant Professor, BRAC Business Scholl, BRAC University, Dhaka, Bangladesh
Associate Professor, Institute of Management Technology, Hyderabad, India
ii
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Green Trust in Green Purchase intentions: A Study of Antecedents
and Consequents
Madan Lali, CS Sharmaii & Nitika Sharmaiii
1
Department of Commerce, University of Delhi. Email: madanfms@gmail.com
2
Integrated Campus, JRE Group of Institutions, Greater Noida, UP. Email:
cssharma.srcc@gmail.com
3
Department of Commerce, University of Delhi. Email : nitikasharma28@gmail.com
Introduction:
Recently, environmental consciousness among public at large as well as politics of ecological
issues have raised the environmental concern among Indian business organizations, leading to
creation of what has come to be known as green competitive advantage. Companies are trying to
underline the concept of green marketing to attract customers by undertaking sustainable
initiatives in their corporate goals, operations and management. Hence, green marketing by
companies is used by featuring “eco,” „„environmentally friendly,‟‟ „„green,‟‟ „„earth friendly,‟‟
and „„sustainable‟‟ (Chen & Chang, 2013). Similarly past studies in India elaborate the
increasingly environmental awareness among consumers (Sharma & Sharma, 2013).
The
variables of environmental consciousness include values, beliefs/knowledge, needs &
motivations, attitudes, and demographics. (Sharma & Kesharwani, 2015).
Environmental
knowledge manifests the relationship with green purchasing intentions (Sharma & Kesharwani,
2015). Moreover, perception of knowledge influences trust among customers (Peters et al 1997).
Therefore, to win and sustain their trust green claims and transmission of environmental related
product knowledge to target customers‟ needs to be clear, true, and accurate. (Chang, 2011). This
is because simply claiming “green” is not enough to stimulate consumers‟ green purchasing
behavior (Sharma & Sharma, 2013; Straughan & Roberts, 1999). The brand and product must
711
evoke „green trust‟ to stimulate green purchase because it has been shown that both purchase
decision (Gefen & Straub, 2004) as well as purchasing intention (Schlosser et al., 2006) are
influenced by consumer‟s trust. At times, certain firms attempt to make opportunistic gains by
camouflaging their products as green. In literature, employing the practice of misleading
consumers regarding the environmental practices of a company or the environmental benefits of
a product or service is described as
greenwash). Obviously, Greenwash
affects the trust of
consumers on green products adversely (Chen & Chan, 2013).
Green trust rather than greenwash is essential for green marketing because many studies asserted
that trust can be essential in developing competitive advantages particularly in the area of supply
chain management, employee empowerment and customer satisfaction (Ha et al, 2010). Since
green trust represents “willingness to depend on a product, service, or brand based on the belief
or expectation resulting from its credibility, benevolence, and ability about its environmental
performance” (Chen, 2010),it is often central to purchase intention as well behavior. There is a
need to explore and examine the variables that influence green trust in the context of purchase
intention, because trust related behavior helps consumers to overcome perception of uncertainty
and risk involved in purchase intention (McKnight et al, 2002). It is well accepted that greater
information reduces uncertainty. Therefore, companies engaging in green marketing should
reveal reliable information relating to the practices and products, if they have to win the trust of
consumers. Conceptually, trust comprises of several constructs such as honesty, openness,
reliability, competence, benevolence and predictability (Hoy & Morran, 1999). As such trust
owes its evolution in given contexts to the working of certain variables. In the context of
purchase intention, it has been found that if information regarding products includes perceived
competence, benevolence, and integrity it leads to emergence of greater trust. That is to say
hypothetically, perceived competence, benevolence, and integrity lead to green trust which in
turn creates positive condition for green purchase intention. It implies that to avoid greenwash
phenomenon and improve green trust competent, benevolent and integrate information should be
provided to potential customers.
Despite of pioneer studies of Chen & Chan, 2013 & Chen & Chan, 2012, which discussed that
green trust enhances the green purchasing intentions in connection with green perceived value,
712
green perceived risk, green perceived quality and green satisfaction, few attempts have been
made empirically to examine the impact of perceived competence, benevolence and integrity on
green purchasing intentions through green trust. Hence, the present study contributes to existing
literature by examining a framework of green purchasing intention influenced by green trust
which in turn is determined by perceived competence, benevolence and integrity. Therefore, it
may offer an important sight into the subjective way in which a consumers generates a green
trust through perceived competence, benevolence and integrity and leading green purchase
intentions. As such, in line with environmental research agenda that has gained prominence in
today‟s scenario, this paper aims to examine the facets of green trust via Perceived Benevolence
(PB), Perceived Integrity (PI), Perceived Competence (PC) and their impact on green purchasing
intentions.
Research methodology:
The current study summarizes the literature of five concepts namely perceived benevolence
(PB), perceived integrity (PI), perceived competence (PC) and green trust (GT) to develop a new
framework to enhance green purchasing intentions (GPI). A questionnaire was administered to
empirically verify the seven hypotheses. Subsequently, the descriptive statistics, reliability of the
measurement, factor analysis, correlation coefficients between the constructs, discriminant
validity, convergent validity and the results are done using structural equation modeling (SEM).
In the end, the present study draws the conclusions and mentions the discussions about the
findings, implications, research limitations, and possible directions for future research. Figure 1
shows the key relationships address in the paper.
Data Analysis:
As per Table -1 to study the impact of major trust attributes namely Perceived Benevolence (PB),
Perceived Integrity (PI) & Perceived Competence (PC) on green trust a questionnaire was
administered. Questionnaire included five items to measure the Perceived Benevolence (PB),
Perceived Integrity (PI) & Perceived Competence (PC) and each item was measured on likert
scale stating “Strongly Agree” to “Strongly Disagree”. Furthermore, to investigate the
713
association of green trust on green purchasing intention scales of Chen & Chan, 2010 are used
with likert scale stating “Strongly Agree” to “Strongly Disagree”.
Results:
The study found that attributes of trust positively and significantly affect the Green Purchasing
Intentions. In addition, the relationship between the antecedents and green purchase intentions
are partially mediated by green trust. The study elaborates direct & indirect effects of green trust
on green purchasing intentions. The past studies were not conclusive on the determination of the
attributes of green trust among consumers and how through these attributes green purchasing
intentions are mediated through green trust. Hence, this study provides an approach to design the
process of green trust through three determinants of trust namely Perceived Benevolence (PB),
Perceived Integrity (PI) & Perceived Competence (PC) and to study the mediating effect of green
trust on green purchasing intentions. This study develops a research framework of green trust
influencing GPI through its attributes. The empirical study shows that perceived benevolence
and perceived competence are positively related to green trust. However, our study depict that
there is a negative relationship between perceived integrity and green trust. In addition, it has
been observed that green purchasing intention is partially mediated by green trust. All proposed
hypothesis in the present study are supported
Implications of the Study:
Although researchers have been studying the role of green trust, particularly in the context of
green purchasing behavior, it may safely asserted that the boarder dimension of green trust and
its antecedents have been remained under-researched. This study proposes an original framework
to enhance green purchasing intentions via green trust and its precursors.
714
Figure 1
References:
Chang, C. H. (2011). The influence of corporate environmental ethics on competitive advantage:
the mediation role of green innovation. Journal of Business Ethics, 104(3), 361-370.
Chen, Y. S. (2010). The drivers of green brand equity: green brand image, green satisfaction, and
green trust. Journal of Business ethics, 93(2), 307-319
Chen, Y. S., & Chang, C. H. (2013). Greenwash and green trust: the mediation effects of green
consumer confusion and green perceived risk. Journal of business ethics, 114(3), 489-500
Gefen, David, and Detmar W. Straub. "Consumer trust in B2C e-Commerce and the importance
of social presence: experiments in e-Products and e-Services." Omega 32, no. 6 (2004): 407-424.
Ha, B. C., Park, Y. K., & Cho, S. (2011). Suppliers' affective trust and trust in competency in
buyers: Its effect on collaboration and logistics efficiency.International Journal of Operations &
Production Management, 31(1), 56-77.
Hoy, W. K., & Tschannen-Moran, M. (1999). Five faces of trust: An empirical confirmation in
urban elementary schools. Journal of School Leadership, 9, 184-208
Kim, Y., & Choi, S. M. (2005). Antecedents of green purchase behavior: An examination of
collectivism, environmental concern, and PCE. Advances in Consumer Research, 32, 592.
McKnight, D. H., Choudhury, V., & Kacmar, C. (2002). Developing and validating trust
measures for e-commerce: an integrative typology. Information systems research, 13(3), 334-359
Schlosser, A. E., White, T. B., & Lloyd, S. M. (2006). Converting web site visitors into buyers:
how web site investment increases consumer trusting beliefs and online purchase intentions.
Journal of Marketing, 70(2), 133-148.
715
Sharma, N., & Kesherwani, S. (2015). Encouraging Green Purchasing Behavior by Increasing
Environmental Consciousness. In J.K. Das; A. Zameer; A. Narula; R. Tripati (Ed.), Reinventing
Marketing for Emerging Markets. India: Bloombury Publishing, 288-301.
Sharma. N and Sharma. C.S (2013), “Encouraging green purchasing behavior through green
branding”, Business Analyst, 34(2), 65-76.
Straughan, R. D., & Roberts, J. A. (1999). Environmental segmentation alternatives: a look at
green consumer behavior in the new millennium. Journal of consumer marketing, 16(6), 558-575
Professor, Department of Commerce, University of Delhi
Director, Integrated Campus, JRE Group of Institutions, Greater Noida, UP
iii
Research Scholar, Department of Commerce, University of Delhi
i
ii
716
A Study on Effect of Consumer Awareness and Behavior on
Green Marketing of LED Lightning Products in India
Ruchika Singh Malyani and Dr. Lokesh Jindalii
1
Mewar University, Chittorgarh, Rajasthan
E-mail: singhruchika410@gmail.com
2
Maharaja Agrasen Institute of Technology, GGSIPU, New Delhi
E-mail: prof.lokeshjindal@gmail.com
Introduction:
In recent years, concern about environment is emphasized in the behaviour of various
business settings. Businesses have begun to adapt business practices to protect the depleting
resources for our future generation. Various corporations have also made several changes in
all organizational activities to address various environmental issues. Not only business
practices underwent a radical change, but also similar trend was seen in consumer behaviour
(Alwitt& Pitts, 1996). Because of increasing level of environmental awareness, consumer
behaviour showcased an increasing concern towards environmental related products. This
change in consumer behaviour is partly responsible for the advent of green revolution and
thus leading to green marketing. Green Marketing is the marketing which aims to reduce the
impact on its surroundings by providing green products (Delafrooz et. al, 2014). Various
companies have incorporated green products in their product lines to meet the demands of
green consumers. Many governments around the world have become so concerned about
green marketing activities that they have attempted to regulate them.
It has also been observed that consumers are willing to pay premium prices for products that
does not cause any harm to its surroundings. But when it comes to purchasing of LED
lightning products consumers are unwilling to pay premium price for premium quality,
inferior and costlier bulbs (Park &Lee, 2013).Therefore, in order to influence price-sensitive
consumers, about the benefits of green led products, leaders need to develop marketing
programs for overcoming the negative perceptions of the consumers explaining the benefits
that greener products. Companies are encouraging transitions to LED lightning from CFL‟s
to position their green products as more appealing one in the niche market.
717
Research Gap:
The current paper focuses upon the influence of consumer awareness, attitude and behavior
on purchase intention of LED lighting products. The concept of LED lights is new and not
much research has been conducted on this so far. Very few studies have been found in the
literature with respect to LEDs. As per the best of the research knowledge, no study has been
conducted to analyze consumer awareness and purchase intention towards LED lighting
products. The impact of consumer awareness on purchase intention of LEDs has also not
been studied.
Similarly, Green marketing for LED has not been discussed extensively in past studies. Also,
little efforts have been made to promote the lighting products which consume lesser amount
of energy such as LED lights. Consumers must be made aware of the green features of LED
lights and their purchase intentions towards LED products must be judged.
The current paper has discussed the influence of green marketing on consumer awareness and
hence purchase intention of LED lighting products which will be helpful for various
researchers and practitioners from the industry.
Research Problem:
To study the impact of consume behavior on green marketing of LED lightning product
Objectives of the study:
The specific objectives that we intend to meet in this study are:
1. To study consumer awareness about green products.
2. To study the consumer attitude towards green products
3. To study consumer behavior towards green products
4. To study the impact of consumer awareness, attitude and behavior towards purchase
intention of LED lighting products.
718
Research Methodology:
The study aims to investigate the influence of consumer awareness, behavior and attitude
towards purchase intention of green products. Descriptive Research methodology has been
followed in the study wherein first observations are made and thereafter preliminary
information is gathered. In the current study, initially customer attitude and behavior towards
purchase of LED is being observed. And based on these observations the study deduces
various concepts and relationships. Quantitative approach of data analysis has been used in
the following study because the study deals with statistical techniques in order to analyze the
objectives. The research is exploratory in nature because not much study has been conducted
nor concluded so far.
Data Analysis and Results:
Consumer Awareness about Green Products
Consumer perception of their awareness and knowledge of green products was also collected.
It was observed that majority of the consumers (95%) have heard about eco-friendly products
but they categorize their knowledge of LEDs to be medium. Majority of the consumers are
aware of the concept of eco-friendly products and their contribution to the sustainable future.
Consumers (77%) read eco-labels before buying green products and are also willing to pay
more for green products.
719
How do you categorize your
knowledge of LEDs?
1%
19%
37%
High
Medium
43%
Low
Not Aware
Have you heard about eco-friendly
products?
5%
Yes
95%
No
Figure 1: Knowledge of LEDs and Product heard
720
Are you aware of any such
products?
22%
Yes
78%
No
Are you aware that purchasing
eco-friendly products will
contribute to the sustainable
future?
23%
Yes
77%
No
Figure 2: Awareness of product and product benefits
721
Do you read eco labels before
buying the green products?
How much are you willing to pay
more for eco-friendly products?
23%
23%
Yes
Yes
77%
No
No
77%
Figure 3: Reading Eco Labels and willingness to pay more for Eco-friendly products
Consumer Attitude
The responses determine the consumer attitude towards green products such as LED lighting
products. It shows the concern of people towards environmental problems and their
willingness to be eco-friendly. It has been determined through the responses that majority of
the consumers (59%) disagree to the statement that we have much of electricity and we do
not have to worry about its conservation that means that they believe electricity is a scarce
resource and needs to be conserved. People disagree to the fact that pollution is spread out in
such a large country and they believe that pollution is a matter of concern. 31% of the
participants agree that earth is a closed system where everything returns to normal eventually
so there is nothing to worry about its present state. Overall, people understand the severity of
environmental problems and are concerned about the environment. But on the other hand,
they do not find convenience in buying and using eco-friendly products. Majority of the
respondents disagree to the fact that LEDs are easy to use and dispose, believe that recycling
is too much trouble and that trying to control pollution is not worth the efforts. It can be
concluded that although people are concerned about the environment yet are not making
much efforts to control the damage.
722
Severity of Environmental Problems
42%
32% 34%
32% 31%
26%
24%
22%
17%
12%
7%
5%
3%
In our country, we have so
much electricity that we do not
have to worry about its
conservation
6%
6%
The earth is a closed system
Since we live in such a large
country, any pollution that I where everything eventually
create is easily spread out and returns to normal, so I see no
need to worry about its
therefore of no concern to me
present state
Figure 4: Severity of Environmental Problems
Convenience in being eco friendly
41%
39%
34%34%
33%
27%
24%
26%
26%
23%
18%
13%
15%
16%
11%
5%
5%
5%
4%
1%
Eco friendly products LEDs are easy to use as
well as dispose
such as LEDs are easily
available
Trying to control
pollution is not worth
the efforts
Recycling is too much
trouble
Figure 5: Convenience in being eco friendly
Consumer Behaviour
Consumer behaviour towards green products can be assessed with the responses. Consumer
behaviour can be tested by knowing their level of concern towards environmental problems
723
and their preference for buying green products over regular products. It was observed that
consumers believe that daily purchase has an effect on the environment and therefore, prefer
to purchase from eco-friendly companies. Most of the respondents reported that they buy ecofriendly products than regular products available in the market. Overall, consumers have a
positive behaviour towards eco-friendly products and choose green products over regular
ones.
Concern for environmental issues
38%
33%
30%
28%
36%
33%
30%
30%
30%
26%
22%
22%
10%
10%
7%
7%
2%
3%
1%
2%
The product and its
Your purchase is
You refuse to buy The daily purchase has
package should be
correct from the
an effect on the
products from
designed to be
environmental point of
environment
companies who are
recycled
view
not eco-friendly
Figure 6: Concern for environmental issues
724
Preference for buying eco-friendly products
40%
38%
31%
26%
22%
20%
11%
11%
1%
1%
You buy eco-friendly products available in You prefer buying green products over
the market
regular products
Figure 7: Preference for buying eco-friendly products
Implications of the study:
The result of the study provides a basis for further studies by researchers. Researchers can
understand the impact of consumer awareness, consumer behaviour and consumer attitude on
purchase intention of green LED products. This combined impact has not been depicted in
previous studies in the literature which can prove to be quite helpful for researchers and
academicians. The research proposes the marketing strategy to be used by producers and
marketers and the willingness of people to pay a premium price for eco-friendly products.
Researchers will also gain insight about consumer attitude and behaviour towards green
products, their concern about environment issues and their awareness of benefits of green
products and its impact on their purchase intention of green products. This can enhance the
current knowledge about LEDs and consumer behaviour towards such products and provide
guidance to the researchers to further work upon these findings.
725
References:
Amyx D.A., DeJong, P.F., Lin, Chakraborty, G. and Wiener, J.L. (1994), ``Influencers of
purchase intentions for ecologically safe products: an exploratory study‟‟, in Park, C.W. et al.
(Eds), AMA Winter Educators’ Conference Proceedings, American Marketing Association,
Chicago, IL, Vol. 5, pp. 341-7.
Bhatia.M & Jain. A (2013), „Green Marketing: A Study of consumer perception and
preferences in India, Electronic Green Journal, 1 (36).
Bhattacharya, Saurabh. (2011). Consumer Attitude towards Green Marketing in India.The
IUP Journal of Marketing Management, 62-70.
Chen, Y. S. (2008). The driver of green innovation and green image–green core
competence. Journal of business ethics, 81(3), 531-543.
Howe, J., Bratkovich, S., Bowyer, J., Fernholz, K., and Stai, S. (2010). Green MarketingGrowing Sales in Growing Markets, Dovetail Partners INC.
Lee, K. (2008). Opportunities for green marketing: young consumers. Marketing intelligence
& planning, 26(6), pp. 573-586.
Maheshwari, S.P. (2014). Awareness of Green Marketing and Its Influence on Buying
Behavior of Consumers: Special Reference to Madhya Pradesh, India. AIMA Journal of
Management & Research, 8(1/4).
Manjunath, G. (2013). Green Marketing And Its Implementation In Indian Business
Organization. Asia Paci C Journal Marketing & Management Reveiw, 75-86
Ottman, J. A. 1998. Green Marketing: Opportunity for Innovation. Chicago: NTC Business
Books.
Pavan, M. P. S. 2010. Green Marketing in India: Emerging Opportunities and Challenges.
Journal of Engineering, Science and Management Education 3: pp.9–14.
Sudhalakshmi, K & Chinnadorai
K.M. (2014).“Green Marketing Mix- A Social
Responsibility of Manufacturing Companies”. Global Institute of Research and
Education.3(4), pp. 109-112.
i
ii
Research Scholar, Mewar University, Chittorgarh, Rajasthan
Associate Professor, Maharaja Agrasen Institute of Technology, GGSIPU, New Delhi
726
What is Environmentally Responsible Consumption
and How to Measure it?
Sudhanshu Gupta1 and Richa Agrawal2
Department of Management Studies, Indian Institute of Technology Madras – 600036,
1,2
Chennai, INDIA
1
Emails: sudhanshugupta2002@gmail.com/ 2richa@iitm.ac.in
Introduction:
Steg and Vlek (2009) noted that many of the environmental problems are rooted in human
behaviour. Of the various behaviours undertaken by human beings, none impact the
environment as seriously as the behaviours concerning consumption. Interestingly,
environmental problems can be corrected by changing or managing the very same behaviours
(Steg and Vlek, 2009) that give rise to the problems in the first place. It follows then that a lot
of our environmental problems can be resolved by managing and changing our current
consumption behaviours and ensuring consumption is done in an environmentally responsible
manner. To bring about the desired changes in consumption behaviour, it is important that –
1) current consumption behaviours be measured in terms of their environmental
responsibility, 2) differences between current consumption behaviours and environmentally
responsible consumption behaviours be mapped, and 3) deviations and disparities in current
consumption practices from those that are environmentally responsible be highlighted. Only
when all this is done, concerted effort can be made by individuals, citizens, governmental and
non-governmental bodies to target and correct all areas of current consumption that need
improvement. Having a psychometric measure of environmentally responsible consumption
behaviour that makes such a measurement and mapping possible, is thus crucial.
Research Gap and Research Problem:
While no scales exist that measure that specifically measures environmentally responsible
consumption, scales do exists, especially in marketing and social science literature, that
measure constructs similar to it (e.g., Kim et al., 2012; Larson et al., 2015; Roberts, 1995;
727
Sudbury-Riley and Kohlbacher, 2016; Webb, Mohr and Harris,
2008). Unfortunately,
existing scales are not good enough measure of environmentally responsible consumption
due to two major issues. 1) Most scales fail to include all relevant behaviours across the three
stages of the consumption process – acquisition, use and disposal, which makes them
incomplete measures of environmentally responsible consumption. 2) Quite often, available
scales tend to be specific to a product category, for example – detergent, paper, water,
electricity, etc., or capture specific behaviours, like – purchasing organic products, walking
or bicycling instead of driving car, etc., ignoring other product categories and behaviours,
completely. These limitations of the available measures limit their usability, utility and value
to measure environmentally responsible consumption. Given the lack of a scale that measures
one‟s consumption behaviour across all the three stages of consumption process and captures
behaviours more comprehensively than specifically; the question that remains unanswered is
– how to measure environmentally responsible consumption?
Objective of the Study:
Working towards the identified problem in existing literature, this study aims to develop a
standardised scale for measuring environmentally responsible consumption (ERC-Scale).
Environmentally responsible consumption is defined in the process as well.
Methodology, Data Analysis and Results:
The four step scale development procedure outlined by Netemeyer, Bearden and Sharma
(2003) was used for developing the ERC-Scale. The procedure outlined by the authors is
quite comprehensive and consistent with much of the existing literature on scale
development.
Step 1: Defining the construct and delineating its domain
Following a comprehensive review of pertinent literature, 27 depth interviews and analysis of
an online blog “wehatetowaste.com”, we define environmentally responsible consumption as
– any act of consumption - acquisition, use and disposal, that is undertaken with or reflective
of a concern for the environment and includes all such behaviours that help reduce the
negative impact of consumption on environment. Environmentally responsible consumption is
explored in this study in the context of one‟s day-to-day „consumption‟. Behaviours such as –
educating others about environmental issues, signing a petition about an environmental issue,
728
participation in a wildlife study, etc. (Larson et al., 2015) that are not related to one‟s day-today „consumption‟ do not fall within the purview of this study.
Step 2: Generating and judging measurement items
A total of 89 items were generated with the help of – depth interviews, analysis of online blog
“wehatetowaste.com” and existing literature on ERC. Items were checked for redundancy,
specificity, clarity and representativeness by – authors, 18 experts from industry and
academia, and 10 consumers, in order to ensure face and content validity of the scale. This
process led to deletion of 49 items and rewording of few.
Step 3: Designing and conducting studies to develop the scale
Two independent studies were conducted for item purification through exploratory factor
analysis (EFA). Sample for the two studies was drawn from the metro cities of – Chennai,
Bangalore and Mumbai in India. People were contacted at a variety of places such as
beaches, parks, railway and bus station, colleges, premium and non-premium housing
societies, etc. to get a good representation across demographics.
Study 1: Data was collected from 320 respondents for the remaining 40 items. For analysing
data and exploring underlying factors, Principal Component Analysis (PCA) was done with
varimax rotation. Bartlett‟s test of sphericity was significant at p<0.001 and the KaiserMeyer-Olkin measure (KMO) of sampling adequacy was 0.862, providing evidence for
appropriateness of factor analysis. EFA results revealed that the 40 remaining items loaded
onto eleven factors (Eigen value > 1, explaining more than 70% of the total variance) that
included –
Environment
friendly purchase
(PUR),
Purchasing
products
having
environmentally friendly packaging (PACK), Need based purchase (NEED), Collaborative
consumption (COLAB), Need based consumption, Complete consumption, Handling and
Care (HNC), Repair and Reuse (RNR), Give/Donate/Offer (GDO), Sell/Exchange/Trade
(SET) and Disposing waste (WAST). One of the items in PUR was reworded as it showed a
high cross-loading (more than 0.4) on another factor despite having an acceptable loading
(above 0.5). Four new items, one each in – PUR, PACK, GDO and SET, were added based on
the suggestions received from the respondents. No items were deleted at this stage.
Study 2: Data was collected from 299 respondents in Study 2 for all the 44 items. EFA was
performed using PCA and varimax rotation. Bartlett‟s test of sphericity was significant at
p<0.001 and KMO measure of sampling adequacy was 0.835. Four items were deleted due to
729
low loadings (less than 0.5) and high cross loadings (more than 0.4). No items were added or
modified in Study 2. EFA was done for the 40 remaining items. Surprisingly, ten factors
(Eigen value > 1, explaining more than 70% of the total variance) were identified through
EFA instead of eleven. Two factors – Need based consumption and Complete consumption
merged to form a single factor. Conceptually it made sense, such that consuming or taking
only what is needed, essentially means that one takes only as much as can be consumed,
which in turn helps ensure complete consumption. The new factor was named as Conscious
consumption (CC). Cronbach‟s alpha for all the ten factors was above 0.7. All the 40 items
had item-to-total correlation values above 0.3 and were hence, retained.
Step 4: Finalizing the scale
Two additional studies were undertaken to – confirm the factor structure (Study 3), and test
known-group validity of ERC-Scale and check ERC-Scale for social desirability bias (Study
4).
Study 3: Data was collected from 360 respondents (sample characteristics were similar to
Study 1 and 2) and subjected to confirmatory factor analysis (CFA). Standardized factor
loadings for two items did not meet the acceptable cut-off of 0.6, hence were deleted.
Composite reliability value for each of the ten factors was also found to be above 0.7. Fit
indices for the proposed CFA model revealed an acceptable fit – CMIN/DF = 1.734, GFI =
0.864, AGFI = 0.836, CFI = 0.942, NFI = 0.874, IFI = 0.942, TLI = 0.933, RMSEA = 0.045,
SRMR = 0.050. Average variance extracted (AVE) values for all the factors was found to be
greater than 0.50, establishing convergent validity. Inter-correlation values between the
factors were less than 0.6, and squared correlation value between all pairs of factors was
found to be less than the AVE value for the respective factors, providing strong evidence of
discriminant validity.
Study 4: Data was collected from 358 respondents in a manner similar to Study 1-3. For
known-group validity to exist, the measure should be able to differentiate groups that are
supposed to score low and high on a trait (Netemeyer, Bearden and Sharma, 2003). We
identified two groups of respondents on the basis of the responses given to the question –
“…do you work with any environmental organization, participate in various environmentally
related activities, events, etc., or are an active member of any environmental group, club,
association, etc.”. Group 1 (N=84) consisted of respondents who responded „Yes‟ to the
question while Group 2 (N=274) consisted of those who answered „No‟. Respondents who
730
did not provide any answer were assumed to be part of Group 2. To confirm known-group
validity mean score was computed for each of the 10 dimensions of the ERC-Scale and
Welch t-test was performed (variance and sample size were unequal for the two groups)
between Group 1 and Group 2. The difference in mean score for each dimension of the ERCScale across the two groups was found to be statistically significant (p<0.05), confirming
known-group validity.
Additionally, to assess whether or not respondents would misrepresent themselves by
responding in a socially desirable manner, we assessed the relationship between the ten
environmentally responsible consumption behaviours of ERC-Scale and a short version of
Marlow-Crowne social desirability scale, M-C 1 (Strahan and Gerbasi 1972). Results of the
correlational analysis revealed that four behaviours – PACK, COLAB, RNR and SET were
not significantly related to social desirable responding. The six remaining behaviours – PUR,
NEED, CC, HNC, GDO and WAST showed very low relative correlation with the social
desirability scale (correlation values ranged from 0.104 to 0.225). This suggests that the
ERC-Scale is not affected much by socially desirable responding (Webb, Mohr and Harris,
2008).
Considering acceptable values of various validity and reliability indicators, a 38-item and 10
dimensional ERC-Scale was finalized.
Implications of the Study:
ERC-Scale could be used by governmental and non-governmental bodies, policy makers and
environmental groups for – understanding current consumption behaviours, identifying
specific behaviour/s that need improvement, and targeting and tracking such behaviours, over
time. Once, behaviours that need improvement are identified (behaviours that score low on
the ERC-Scale) effective strategies can be formulated to create awareness about and to
promote environmentally responsible consumption. Interventions tailored for and targeted at
customer segments that need to correct or improve their consumption behaviours would
render such efforts, especially fruitful. Businesses too, could play an active role in promoting
environmentally responsible consumption by undertaking various activities (under corporate
social responsibility) to sensitize individuals about the impact of their day-to-day
consumption on environment. Businesses looking for new opportunities in green product
731
and/or service domain, such as – shared consumption (renting, leasing, pooling services, etc.),
waste management and disposal (waste segregation, recycling, etc.); can use the ERC-Scale
for segmenting the market and identifying profitable opportunities.
References:
Kim, S. Y., Yeo, J., Sohn, S. H., Rha, J. Y., Choi, S., Choi, A. Y., & Shin, S. (2012). Toward
a composite measure of green consumption: An exploratory study using a Korean sample.
Journal of family and economic issues, 33(2): 199-214.
Larson, L. R., Stedman, R. C., Cooper, C. B., & Decker, D. J. (2015). Understanding the
multi-dimensional structure of pro-environmental behavior. Journal of Environmental
Psychology, 43: 112-124.
Netemeyer, R. G., Bearden, W. O., Sharma, S. (2003), Scaling procedures: Issues and
Applications. Thousand Oaks, CA: Sage Publications.
Roberts, J. A. (1995). Profiling levels of socially responsible consumer behavior: a cluster
analytic approach and its implications for marketing. Journal of marketing Theory and
practice, 3(Fall): 97-117.
Sudbury-Riley, L., & Kohlbacher, F. (2016), Ethically minded consumer behavior: Scale
review, development, and validation, Journal of Business Research, 69(8): 2697-2710.
Strahan, Robert, and Kathleen C. Gerbasi (1972), “Short, homogeneous versions of the
Marlowe-Crowne Social Desirability Scale,” Journal of Clinical Psychology, 28(2): 191-3.
Webb, D. J., Mohr, L. A., Harris, K. E. (2008). A re-examination of socially responsible
consumption and its measurement. Journal of Business Research, 61(2): 91-98.
732
Frugality and green consumption value as a predictor of
environmentally responsible consumption behaviour: Evidence
from India
Sudhanshu Gupta1 and Richa Agrawal2
Department of Management Studies, Indian Institute of Technology Madras – 600036,
1,2
Chennai, INDIA
1
Emails: sudhanshugupta2002@gmail.com/ 2richa@iitm.ac.in
Introduction and Research gap:
Concern over the impact of consumption on environment has led many a scholars to
investigate consumer’ environmentally responsible consumption behaviours (e.g. Barr, 2007;
Kilbourne and Pickett, 2008; Carrete et al., 2012; Lee et al., 2014). Existing literature on
environmentally responsible consumption focuses primarily on investigating predictors
(mostly psychographic and demographic variables) of environmentally responsible
consumption behaviour. Unfortunately, these studies are confined to studying only few sets
of environmentally responsible consumption behaviours. Behaviours investigated are majorly
purchase related and non-purchase aspects of consumption, such as – product use and
disposal have often been overlooked or neglected in extant consumer behaviour literature
(Peattie, 2010). Also, most of these studies were however, undertaken in the context of
developed economies – especially United States and Europe. Scant research is available on
environmentally responsible consumption behaviours of consumers from the developing
world. Due to the difference in ‘context’, findings from the studies conducted in the
developed world can hence, not be true of consumers in the developing world (Guarin and
Knorringa, 2014).
Research Problem and Objective of the Study
Present study investigates consumers’ environmentally responsible consumption behaviours
in a context of a developing economy – India. Study of consumption behaviours in
developing markets is of great significance because of their growing economy which will be
three times faster than developed economies and will account for almost 65% of the global
733
economic growth, between 2013 and 2020 (Euromonitor International 2013). Also, according
to the same report, consumer spending in emerging markets has outpaced that of developed
countries every year, since 2000 and is expected to continue to do so. With the increasing
concern for the environment and growing consumer class in developing economies,
marketers in the green product and/or service domain, are looking to tap these markets.
Present study concentrates on Indian consumers, since India being one of the fastest growing
developing economies with one of the fastest growing consumer class population.
Specifically, present study examines the impact of green consumption value and frugality on
different types of environmentally responsible consumption behaviours. The question it is
trying to address is whether Indian consumers consume in an environmentally responsible
manner due to their inherent frugal nature or underlying values to protect the environment.
Conceptual Background:
The study defines ‘environmentally responsible consumption’ as any act of consumption
(acquisition, use and disposal) that is undertaken with or reflective of a concern for the
environment and includes all such behaviours that help reduce the negative impact of
consumption on environment.
Frugality refers to ‘degree to which consumers are both restrained in acquiring and in
resourcefully using economic goods and services to achieve longer-term goals’ (Lastovicka
et al. 1999). Frugal consumers have concern for consumption of resources not because of
consequences of the behaviour but because of the resources required for the behaviour i.e.,
mostly financial resources (Fujii 2006). However, frugal behaviour could be beneficial for the
environment as well. For example, a frugal person buying energy efficient products or
switching off appliances when not in use will certainly save on electricity bills. Such a person
will also end up being environmentally friendly since his consumption of electricity gets
reduced. Relationship between frugality and environmentally responsible consumption
behaviour has been found to be positive and significant (e.g. De Young, 1996; Haws,
Winterich and Reczek, 2014). For example, in three independent studies, De Young (1996)
found a positive and significant relationship between frugality and various environmentally
responsible consumption behaviours such as – source reduction, recycling, water
conservation, etc. Therefore, we posit that –
734
H1: Frugality will have a positive and significant impact on all 10 types of environmentally
responsible consumption behaviours
Green consumption value, on the other hand, may be understood as the tendency to express
the value of environmental protection through one’s purchase and consumption behaviours
(Haws, Winterich and Reczek, 2014). Environmental value orientations and its relationship
with environmentally responsible consumption behaviour have been studied by various
scholars in the past (Thompson and Barton, 1994; Haws, Winterich and Reczek, 2014).
Thompson and Barton (1994) found that anthropocentric and ecocentric value orientations
contribute to explanations of conservation behaviours, membership in environmental
organizations, and apathy toward the environment. In a more recent study, ‘GREEN’ (scale
measuring green consumption value) significantly predicted various environmental
behaviours such as – relative preference for green bag, willingness to pay for eco-friendly
detergent and likelihood to buy eco-friendly cleaner (Haws, Winterich and Reczek, 2014).
Thus we hypothesise that –
H2: Green consumption value will have a positive and significant impact on all 10 types of
environmentally responsible consumption behaviours
Methodology, Data Analysis and Results:
The data collection procedure for the study was paper-and-pencil self administered
questionnaire survey. The survey was administered to a sample consisting of individuals from
varying demographic backgrounds at public places such as parks, beaches, railway and bus
station, colleges, residential housing communities, etc., in Indian cities of Chennai,
Bangalore, Chandigarh, New Delhi, Lucknow and Kanpur. Data collection efforts led to a
total of 358 usable responses. Response format included 7-point Likert type scale with 1
indicating Strongly Disagree and 7 indicating Strongly Agree.
The questionnaire consisted of questions pertaining to three constructs, 1) Green consumption
value scale was adopted from Haws et al. (2014), 2) Frugality scale was adopted from
Lastovicka et al. (1999), and 3) Environmentally responsible consumption scale was
developed for the purpose of the study. It comprised of 38-items and ten dimensions –
Purchasing environmentally friendly products (include behaviours pertaining to purchasing
environment friendly products), Purchasing products having environmentally friendly
735
packaging (include behaviours pertaining to purchasing products having environment
friendly packaging), Need based purchase (include behaviours pertaining to purchasing
things based on one’s need), Collaborative consumption (includes sharing behaviours such as
renting, borrowing, pooling, etc.), Conscious consumption (include behaviours pertaining to
consuming things based on one’s need), Handling and Care (include behaviours pertaining to
handling things properly and taking care of them), Repair and Reuse RNR, include
behaviours pertaining to repairing and reusing things instead of discarding them),
Give/Donate/Offer (include behaviours pertaining to disposing of things by giving, donating
or offering them to others), Sell/Exchange/Trade (SET, include behaviours pertaining to
disposing of things by selling, exchanging and trading), and Disposing waste (WAST,
include behaviours pertaining to proper disposal of waste).
The reliability of the scales measuring the two independent variables – frugality and green
consumption value, was checked. Cronbach’s alpha value was calculated and found to be
0.875 for Lastovicka et al.’s (1999) frugality scale and 0.783 for Haws, Winterich and
Reczek’s (2014) green consumption value scale, suggesting that the scales were reliable
measures of their respective constructs. Since the scale for measuring dependent variable
(i.e., environmentally responsible consumption) was developed for the purpose of the study,
exploratory and confirmatory factor analysis (loadings above 0.5 for all items) was performed
to purify the measure and establish its dimensionality. Reliability of the dimensions was
checked using Cronbach’s alpha (above 0.75 for all 10 dimensions).
In order to test H1 and H2, a model was proposed, which was tested using SEM approach. Fit
indices suggested that the data fit the model really well (CMIN/DF = 2.374, GFI = 0.983,
AGFI = 0.912, CFI = 0.989, NFI = 0.981, IFI = 0.989, TLI = 0.950, RMSEA = 0.062, SRMR
= 0.037). Standardised regression weight was calculated for individual regression path
models (Table 1).
Table 1: Standardized Regression Estimate for All Relationships
Independent variable
Dependent variable
Green consumption value
Green consumption value
Purchasing environmentally friendly products
Purchasing products having environmentally
friendly packaging
Need based purchase
Collaborative consumption
Conscious consumption
Green consumption value
Green consumption value
Green consumption value
736
Standardized
regression estimate
0.586
0.309
p-value
0.395
0.178
0.442
***
***
***
***
***
Green consumption value
Green consumption value
Green consumption value
Green consumption value
Green consumption value
Frugality
Frugality
Frugality
Frugality
Frugality
Frugality
Frugality
Frugality
Frugality
Frugality
Handling and Care
Repair and Reuse
Give/Donate/Offer
Sell/Exchange/Trade
Disposing waste
Purchasing environmentally friendly products
Purchasing products having environmentally
friendly packaging
Need based purchase
Collaborative consumption
Conscious consumption
Handling and Care
Repair and Reuse
Give/Donate/Offer
Sell/Exchange/Trade
Disposing waste
0.168
0.077
0.157
0.039
0.163
0.077
0.228
***
0.136
***
0.470
***
0.084
***
0.388
-0.041
0.367
0.512
0.392
0.431
0.296
0.465
***
0.459
***
***
***
***
***
***
***p<0.01
From Table 1, it is clear that, in six out of 10 relationships, both frugal and green value had a
positive and significant impact on environmentally responsible consumption behaviours
(remaining four being – Purchasing environmentally friendly products, Collaborative
consumption, Repair and Reuse, and Sell/Exchange/Trade). Squared multiple correlation
values suggested that the model explains the variability in each of the ten response variables
(ten environmentally responsible consumption behaviours) due to the two predictor variables
(green consumption value and frugality) really well, with most of them explaining more than
20% of the total variance. In conclusion, both the hypotheses (H1 and H2) were partially
supported.
Implications:
The study is one of the first attempts to see if the participation of Indian consumers in various
environmentally responsible consumption behaviours is due to their inherent value for
protection of the environment (green consumption value) or due to the concern for saving
money (frugality) or both. Results of the study can provide interesting implications for
marketers in order to position their green offering effectively to their target segment. For
example, it was found that consumers buy green products due to their inherent green value
and not their frugalness and therefore the positioning of a green product should be around
eco-friendliness factor than monetary saving orientation. The results of this study can be
useful for public policy makers as well who are developing strategies to promote
environmentally responsible consumption behaviours among individuals. For example, if
policy makers want to promote selling or exchanging as an option for disposing old and
737
unused product, they should position their advertisement such that it convey monetary benefit
outcome than an environmental benefit outcome.
References:
Barr, S. (2007). Factors influencing environmental attitudes and behaviors A UK case study
of household waste management. Environment and behavior, 39 (4): 435-473.
Carrete, L., Castaño, R., Felix, R., Centeno, E., & González, E., 2012. Green consumer
behavior in an emerging economy: confusion, credibility, and compatibility. Journal of
Consumer Marketing, 29 (7): 470-481.
De Young, Raymond (1996), “Some Psychological Aspects of Reduced Consumption
Behavior The Role of Intrinsic Satisfaction and Competence Motivation,” Environment and
Behavior, 28 (3), 358-409.
Euromonitor International (2013). Reaching the emerging middle classes beyond BRIC.
Fujii, S. (2006). Environmental concern, attitude toward frugality, and ease of behavior as
determinants of pro-environmental behavior intentions. Journal of environmental psychology,
26 (4): 262-268.
Guarin, A. & Knorringa, P., 2014. New middle-class consumers in rising powers:
Responsible consumption and private standards. Oxford Development Studies, 42 (2): 151171.
Haws, K. L., Winterich, K. P., & Naylor, R. W. (2014). Seeing the world through GREENtinted glasses: Green consumption values and responses to environmentally friendly products.
Journal of Consumer Psychology, 24 (3): 336-354.
Kilbourne, W., & Pickett, G. (2008). How materialism affects environmental beliefs,
concern, and environmentally responsible behavior. Journal of Business Research, 61 (9):
885-893.
Lastovicka, J. L., Bettencourt, L. A., Hughner, R. S., & Kuntze, R. J. (1999). Lifestyle of the
tight and frugal: Theory and measurement. Journal of Consumer Research, 26 (1): 85-98.
Lee, Y. K., Kim, S., Kim, M. S., & Choi, J. G. (2014). Antecedents and interrelationships of
three types of pro-environmental behavior. Journal of Business Research, 67 (10): 20972105.
Peattie, K., 2010. Green consumption: behavior and norms. Annual Review of Environment
and Resources, 35 (1): 195-228.
Thompson, S. C. G., & Barton, M. A. (1994). Ecocentric and anthropocentric attitudes
toward the environment. Journal of Environmental Psychology, 14 (2): 149-57.
738
Social Impacts of Tourism – A Review
Pramod Sharmai and Dr. Jogendra Kumar Nayak2
Department of Management Studies, IIT Roorkee
1
Email id -pramodsharmaias1990@gmail.com
Department of Management Studies, IIT Roorkee
2
Email id- joginder.nayak@gmail.com
Introduction:
Tourism renders comprehensive social impacts on the life of host communities (Lee, 2013).
This social impact may have varying degree of benefits that depends on situations. This study
analyzes the social impacts of tourism literature and contributes a systematic understanding
of the research that is taking place in the domain of social impact study. It reviews the social
impact research that is predominated by quantitative techniques in the current field of study.
This paper analyses the key issues that evolved from past studies including the methodology
used. Highlighting, the paucity of qualitative researches this study point out the
predominance of quantitative researches. This has triggered the advancement in the list of
social impact research. The paper, at first, examines the significance of research on tourism
impact on social dimension together with present research status. Second, the paper presents
the phase of study in this research area, realizing the problems that researchers had overcome
in testing dependent variables as well as putting definitions. Third, it scrutinized the literature
that forms the key theme in the area and classifying the findings in concepts. Finally, an
advanced approach to research in social impact is suggested anatomizing research and
methods applied in the studies.
Research gap and problem statement:
There is lack of the systematic analysis of social impact of tourism literature as well as
absence of in-depth understanding of research in social impact domain. Social impact
research is mostly dominated by qualitative research. So there is more avenues to explore
with this domain using qualitative research tool. Lack of advancement in current research is a
739
great problem. The key theme of the social impact research is missing in many advanced
research which is disgracing the research on social impact of tourism.
Objectives of the study:
To analyzes the social impacts of tourism literature.
To contributes a systematic understanding of the research that is taking place
in the domain of social impact study.
To reviews the social impact research that is predominated by quantitative
techniques in the current field of study
To analyses the key issues that evolved from past studies including the
methodology used.
To examines the significance of research on tourism impact on social
dimension
To scrutinized the literature that forms the key theme in the area and
classifying the findings in concepts.
Literature Review:
Stages- A study on tourism and its social impacts have progressed through a various
development stages. The definitional issues which draws the boundaries of various concepts
is of ardent need and critical especially for emerging areas of research. Earlier, in tourism
impact research, economic impact was dominant but soon social impacts had overtaken it.
And in social impact research, the definitions that are continuously debated are attitude,
perception, social impact, residents. In the first stage of research, the social impact research
were largely descriptive and exploratory (Belisle et. al., 1980; Brougham et. al., 1981; Doxey,
1975 and Liu et.al., 1987). Second stage of research marked the beginning by developing
models within which research can be conducted (Doxey’s, 1975).
Definitions- The literature debates on the meaning of attitude (Gu et.al. 2008) and much of
the study revolves around this concept, in context of tourism impact research (Ryan et.al.,
1998). Attitude is defined as a verbal reaction to stimuli that provide insight into how people
behave in the real world (Ajzen et. al., 2005). Tourism impact researchers use the word
perception interchangeably with attitude (Dyer et. al., 2007; Sharma et. al., 2008).
740
Methodology:
Predicted Variables-The most debatable issue in the tourism impact study in social
perspective is the dependent variables. Many studies has measured the tourism impact on
quality of life (Fredline, Deery, & Jago, 2006; Tovar & Lockwood, 2008). Quality of life
includes both community and individual quality of life and it is measured in a range study.
The discussion in the literature of culture is within tourism impact literature on social
perspective as a dependent variable (Deshpande & Webster, 1989). Actually, the quality of
life is scrutinized when tourism impact on individual is examined (Kayat, 2002; Yen &
Kerstetter, 2009). Tourism development influences quality of life; therefore, quality of life
can be seen as a descendant of perception of tourism development.
Social Impact Constructs-The main construct found is examined in this section of literature.
In social impact of tourism research, the construct that are used is discussed in two
categories. The primary category includes the social impact like traffic, crime, overcrowding,
prostitution, alcoholism. And the other category involves the variables that have an effect on
resident’s perception of tourism impact like residency duration. In many study, it may act as a
moderating variable (Jago, Fredline, & Deery, 2006). The social impact that tourism can have
on community can be a unique construct like community pride. Researches explored that
pride at both individual and community level is improved by tourism (Gursoy et al., 2002).
Resident Perceptions of Tourism Impact as Moderating Variable-In social impact of
tourism literature, many moderating variables were identified as significant in its
measurement. Majority of variables emphasizes on demographic characteristics of hosts
including personal profile of residents (income, gender, and age) as well as the relation of
host and tourist including its place. There are many variables other than demographic
variables that may moderate or mediate the relation of social impact of tourism. Some
researches on social impact has examined that certain construct like community attachment,
political value also play a dominant role. Resident’s perception of tourism impact is
examined and found to be influenced by many variables.
Social Impacts- The social impact list is exhaustive and researchers from a long time are
trying to reduce the list to identify specific items as for example (Ap and Crompton, 1998)
began with 147 items and he reduced it to seven factors by the application of factor analysis.
741
In the study by (Fredline et al., 2006), the social impact items were forty and it were reduced
to fourteen by the use of statistical technique of factor analysis. Factor analysis is used in
social impact research like anything. Without the use of this technique it would have been
very much difficult to conduct tourism impact research and the review of literature on social
impact of tourism.
The Succeeding Stage in Social Impact Research-The research on organizational culture is
somewhat related to the issues in social impact of tourism research. And this area if
researched in context with social impact research, the result may be unique and interesting
(Jung et al., 2009). But earlier study dominated quantitative examination of culture.
Organizational culture has many elements which are common in social impact research. It is
very useful if study is done using the constructs like behavior, perception, attitude and value
in association with cultural variables. This issue is addressed using a research on
organizational climate which introduced a debate between culture and climate (Kuenzi and
Schminke, 2009).
Research on Organizational Culture-Similar to the social impact research, organizational
culture and culture studies advanced through the range of quantitative techniques to examine
the construct that have an effect on culture (Deal and Kennedy, 2000; Rousseau, 1990; Trice
and Beyer, 1993). Different cultural layer have been discussed in a study of organizational
culture and this work is used latter in conducting qualitative and quantitative research, it can
influence present research on social impacts of tourism (Rousseau, 1990).
Implication:
A literature review found that mainly there are four stages of research in social impact of
tourism. This was found from the debate on concept and definition development, to model
development, instrument design and development and lastly the testing of instrument. The
stages of research are highlighted by this study and it also gives a thorough understanding of
where the study on tourism impact on social facets outreached. Till now, the research found
that perception of residents are influenced by elements like distance of resident from tourism
activity, dependence on tourism, length of residence and demographic profile of residents.
Moreover, attachment to region, political preference, and resident value is found significant
in developing perception of residents. This also gives a base for future study on social impact
of tourism research. This intrinsic resident characteristics and values let tourism practitioners,
742
academicians and researches to completely understand the genesis issues concerning tourism.
There are several particular impacts that give artifacts for future study. These items are
needed to be examined in great detail using techniques such as observation, narratives and
storytelling. The relation between tourism impacts and personal characteristics can be
established using these research techniques. The application of qualitative and innovative
technique similar to that of research on organization culture is proposed as the succeeding
stage of social impact research on communities. The suggested research technique will not
only explain the social impact tourism items but also help in detail analysis of it. It aids in
formulating strategies for better management of tourism. For the success of any tourism, the
local residents support is the most essential element so it is much significant to monitor,
understand and administer tourism impact on residents as well as on community. Authorities
should kept in mind that the impact of tourism should not exceed a tolerable limit either it
will attract resentment on the part of host community. Knowing the cause as to why definite
activity, outcome or behavior of tourist impacts residents is necessary because it helps in
formulating and implementing appropriate strategy of management in the tourism destination.
This study will help researcher in achieving this results.
743
References:
Ajzen, I., & Fishbein, M. (2005). The influence of attitudes on behavior. The handbook of
attitudes, 173, 221.
Andereck, K. L., Valentine, K. M., Vogt, C. A., & Knopf, R. C. (2007). A cross-cultural
analysis of tourism and quality of life perceptions. Journal of Sustainable Tourism, 15(5),
483-502.
Andriotis, K. (2005). Community groups' perceptions of and preferences for tourism
development: Evidence from Crete. Journal of Hospitality & Tourism Research, 29(1), 6790.
Ap, J. (1992). Residents' perceptions on tourism impacts. Annals of tourism Research, 19(4),
665-690.
Ap, J., & Crompton, J. L. (1998). Developing and testing a tourism impact scale. Journal of
travel research, 37(2), 120-130.
Blau, P. M. (1964). Exchange and power in social life. Transaction Publishers.
Brougham, J. E., & Butler, R. W. (1981). A segmentation analysis of resident attitudes to the
social impact of tourism. Annals of tourism research, 8(4), 569-590.
Butler, R. W. (1980). The concept of a tourist area cycle of evolution: implications for
management of resources. The Canadian Geographer/Le Géographe canadien, 24(1), 5-12.
Carmichael, B. A. (2000). A matrix model for resident attitudes and behaviours in a rapidly
changing tourist area. Tourism management, 21(6), 601-611.
Choi, H. S. C., & Sirakaya, E. (2005). Measuring residents’ attitude toward sustainable
tourism: Development of sustainable tourism attitude scale.Journal of Travel
Research, 43(4), 380-394.
i
Ph.D. Research Scholar, Department of Management Studies, IIT Roorkee
744
A Study of Adaption of Digital Tools in Indian Tourism
V. Senthil1
1
Thiagarajar School of Management, Madurai, Tamilnadu- 625005
Email – veersenthil@gmail.com
Introduction:
The Digital and Social media is a new world where everyone has the ability to influence
purchase and where distances are down to zero and where voice has speed greater than light. The
World Bank has financed India with $150 million for national e-governance plan with an aim to
capitalize on public delivery of e-services. CEO of coca cola reported recently that 20% of their
total media spend was towards Social Media but there is no such a budget in Indian or State
Destination Marketing Organizations (DMOs). Tourist information search process has changed.
„Word of Mouth‟ has been replaced by „electronic word of mouth‟. According to e-Marketer,
Facebook is the number one Social Media (SM) tool for brands followed by Twitter. The future
could see 5 distinct trends - Co-option, Coopetition, Crowd funding, Countervailing, and
Community policing. If you are engaging in brand advertising in Social Media channels, then
the 3 metrics are conversation, amplification and applause. Ability to reach the right person at
the right moment with the right message is turbocharged by a combination of digital channels.
Also, Harris Interactive research survey found that 86% of customers will pay more for a
superior customer experience. The recent research reveals that tourists post negative comments
on social media sites if their complaints were ignored. Customers want to interact across all the
channels and devices such as Smart-phones, Tablets, Ultra-books and traditional web via PCs.
i.e. the new expectations are 24x7 availability of customers‟ service. The purchase history helps
service representatives about the buying preferences of individual customers, rather than treating
everyone generically. Mobile technologies are opening up more communications channels than
ever before, which challenges the business and organizations to sustain high degree of quality
service levels in a greater number of areas, whether that‟s on the web, in physical stores, or in
phone interactions.
745
Research Gap and Research Problem:
The strategies devised for the implementation of e-governance should be citizen-centric and
should follow multiple channels of communication for dissemination of e-services. (Beba Rakic
and Mira Rakic, 2014). The concepts and strategies of Online Travel Agent industries and
Selling Rooms Online are discussed (Alessandro Inversini and Lorenzo Masiero, 2014). How a
social medium link users to form a virtual community by using cross-platforms, and therefore
affects people's behaviours and real life. A destination image viewed as a mental projection of
tourism imaginary. The social networking sites offer new ways to market destinations and offer
diversified platforms to construct destination images (Benxiang Zeng and Rolf Gerritsen, 2014).
The motivations for sharing tourism experiences through social media, although tourists may
have a tendency to employ altruistic and community-related terms when explaining reasons for
their sharing behaviour, they may also be aiming at individual benefits such as strengthened
reputation or increased feelings of self-efficacy (Ana MaríaMunar and Jens Kr. Steen Jacobsen,
2014). One of the initial attempts to cross-pollinate the research streams of souvenir purchase
behaviour and social media usage (Bynum Boley, Vincent P. Magnini and Tracy L. Tuten,
2013). The conceptual framework of Web users‟ engagement in tourism information search for a
comprehensive understanding of their integrated online and offline search behaviour (ChaangIuan Ho, Meng-Hui Lin and Hui-Mei Chen, 2012). The five most important digital
communication sources of information about nature-based tourism were airline websites; search
engines; advertisements on the internet; tourism specific travel and vacation websites; and
government tourism websites (Louie A. Divinagraciaa, Maria Rochelle G. Divinagraciaa and
David G. Divinagracia, 2012). Integration of social media into a comprehensive marketing
strategy for each destination is discussed (Paris, 2012). The consequences of Generation Y‟s
social media usage and practical insights of Generation Y‟s use of social media (Ruth N. Bolton,
A. Parasuraman et. al., 2013). Technology Acceptance Model (TAM) has been validated as a
parsimonious model for predicting individual acceptance of Information Systems. The main
proposition of TAM is that user‟s acceptance of new technology is determined by his voluntary
intention to use that technology. The above similar studies are not adequate in the literature on
Indian context. The research problem is an empirical study that evolves since the Indian tourism
industry is economically important, grows rapidly and also Social Media is highly popular
746
among the youths.
The proposed study investigates whether the digital and social media
adaptation is really provides (or not) the better business.
Objective of the Study:
The digital and social media tool is an excellent source of information and is unavoidable in the
current competitive business scenario. The objective of this paper is an exploratory study of how
the digital media tools are adapted in Indian Tourism Business? And how these tools are helpful
for the growth of Indian Tourism business?
Research Methodology:
This study is based on secondary data such as annual reports, websites, online reviews, blogs,
online forums and information from social media are taken for a detailed data analysis. This
research first to verify and rank the presence of digital tools in the state and union territory
tourism websites, second, the social media frequency and interactions are analysed to verify the
business growth of state tourism. The assumption of this study is, more adaptation of tools and
interactions means more tourists are visiting and high growth in business. The Figure 1 depicts
the conceptual framework of our proposed study and null (H0) and alternate (HA) formulated
hypothesis are as follows,
Digital Tools
adaptation (Facebook,
Twitter, YouTube,
Pinterest, Flickr etc.,)
Social Media Interactions
(Likes, Talking about this,
Tweets, Followers, Following,
Views)
Indian Tourism business
(Growth rate, Number
of tourist visits, Foreign
Exchange Rate)
Fig 1. Conceptual Framework
H0 - The Digital Tools adaptations are not influences the growth of Indian tourism business.
HA - The Digital Tools adaptations are influences the growth of Indian tourism business.
747
Data Analysis and Results:
The Visa on Arrivals, Number of tourists visited (domestic and foreign), Foreign Exchange
Earnings, Aggressive advertisement campaigns on the tourist destinations and others are the
factors influencing the growth of tourism business. The number of Foreign Tourist Visited and
Foreign Exchange Earnings are variables taken for analysis in this study. Social Media Tools
used by 28 Indian States and Union Territories (UT) are analysed in this study. Around 5 states
(Chandigarh, Manipur, Nagaland, Sikkim and Tripura) and 2 UT (Daman and Diu, Lakshadweep
Islands) are not at all using any Social Media tools. Figure 2 shows the frequency of usage of
various Digital Media tools; Facebook is highest and twitter is second highest tool adopted by
the DMOs of Indian States. Figure 3 depicts the Foreign Tourist Arrivals to India; the numbers
are increasing in nature since the foreign tourists are willing to know about the rich culture and
heritage spans across in India. The Social Media tools are highly adapted by the southern state
DMOs comparing to other DMOs and also Kerala state DMO is best in the country to adapt the
Social media tools. Figure 4 shows the word cloud of tourist reviews from different countries.
30
25
20
15
10
5
0
28
25
18
8
6
6
2
2
Figure 2. Frequency of Social Media Adaptation by State DMOs
748
9000000
8000000
7000000
6000000
5000000
4000000
3000000
2000000
1000000
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
0
Figure 3: Foreign tourist arrivals to India
Figure 4: Tourist review on Kerala Tourism
Figure 5 shows the top ten states of Foreign Tourist arrivals in the year 2015. Since Tamilnadu
has more foreign tourist visitors, the tourist destination of “Madurai” is taken for further data
analysis (Madurai is an energetic, ancient city on the Vaigai River in the South Indian state of
Tamil Nadu). The sample period of two weeks are taken for field level survey in Madurai among
150 foreign tourists. As per our survey the tourists visited to Madurai are from several parts of
the world such as China, UK, Singapore, Switzerland, Australia, France, Italy, England,
Switzerland, USA, Canada, Sweden, Maldives, Sri Lanka, Nepal, Kenya and others.
749
Tamilnadu
Maharashtra
Uttar Pradesh
2.3
11.6
20.1
2.7
Delhi
West Bengal
4
4.2
Rajasthan
6.3
18.9
6.4
Kerala
Bihar
10.2
Karanataka
13.3
Goa
Others
Figure 5: Top 10 States of Foreign tourist arrivals
The questionnaire is circulated among the tourists and the findings are as follows. The highest
numbers of tourists are from USA, Australia, France, Singapore and Switzerland as shown in
Figure 6. Figure 7 shows how the various media are helpful to select “Madurai” as their
destination. The internet is top in the rank, Friends & Relatives, Media and others are next in the
list. Figure 8 shows the rating of accommodation facilities in Madurai, many tourists rated that
accommodation is Excellent, Very Good, Good and very few rated that accommodation is fair
and poor. Also safety is rated similarly by the tourists as shown in Figure 9. Since the city
Madurai is rich in Culture and Heritage, the tourist opinion also reflecting the same. Figure 10
shows the rating of tourist expectations over the city “Madurai”. An open ended question,
Suggestions to improve “Madurai” as a desired tourist destination?, the tourist suggestions are
represented by the word cloud as shown in Figure 11.
750
25
20
15
10
5
0
Figure 6: Foreign Tourists are visiting to “Madurai”
Fairs and/or
I already
exhibitions., 5
knew of it.,
5 agency.,
Travel
It was part of
the travel
package., 5
10
The Internet.,
40
Books and
guides., 20
Media., 30
Friends and
relatives., 35
Figure 7: Media usage to select “Madurai” as the destination
Excellent, 20,
14%
Poor, 20,
13%
fair , 35, 23%
Very Good,
35, 23%
Good , 40,
27%
Figure 8: Rating of Accommodation facility in “Madurai”
751
45
40
35
30
25
20
15
10
5
0
Excellent Very Good
Good
fair
Poor
No
Comments
Figure 9: Rating of Safety in “Madurai”
60
50
40
30
20
10
0
Completely
For the
greater part
Partly
Not really
Absolutely
not
Figure 10: Rating of Tourist expectations over “Madurai”
Figure 11: Suggestions to improve “Madurai” a better tourist place
752
Implications of the Study:
In this study, how the digital tools are adapted by the Indian tourism business are analysed. The
interactions based on the DMO Generated Content in Facebook, Twitter, YouTube, and User
Generated Content (www.tripAdvisor.in, www.mouthshut.com) are taken for analyse the growth
of Indian Tourism business. The state Tamilnadu is having less social media interactions
comparing to Kerala but it has highest foreign tourist arrivals in the year 2015, i.e. further
research analysis is required over the null hypothesis. The Indian DMOs are faster way to adapt
the social media facilities comparing to the European countries. Since the social media is low
cost medium of marketing channel and popular among the youths, the state DMOs should use
this opportunity to promote their business. This study offers valuable insights of digital tools into
the researchers and interactions within them are helpful to the tourists to select their destinations.
The word cloud or sentiment analysis of User Generated Content will be helpful to administrator
and to state DMOs to keep their destinations tourist friendly. The regular marketing channel is
not analysed in this study and further study is required over the DMOs budget and Return On
Investments.
753
References:
Alessandro Inversini, Lorenzo Masiero, "Selling rooms online: the use of social media and
online travel agents", International Journal of Contemporary Hospitality Management, Vol. 26
No. 2, (2014), pp. 272-292.
Ana MaríaMunar, Jens Kr. Steen Jacobsen, “Motivations for sharing tourism experiences
through social media” , Elsevier Journal of Tourism Management 43 (2014), 46-54.
BebaRakic, Mira Rakic, “ Integrated Marketing Communications Paradigm In Digital
Environment : The Five Pillars Of Integration”, Scientific review paper, Vol. II, No I, (2014)
187-204.
BenxiangZeng, Rolf Gerritsen, “What do we know about social media in tourism? A review”,
Elsevier Journal of Tourism Management Perspectives 10 (2014) 27–36.
Bynum Boley, Vincent P. Magnini, Tracy L. Tuten, “Social media picture posting and souvenir
purchasing behavior: Some initial findings”, Journal of Tourism Management 37 (2013) 27-30.
Chaang-Iuan Ho, Meng-Hui Lin, Hui-Mei Chen , ” Web users‟ behavioural patterns of tourism
information search: From online to offline”, Journal of Tourism Management 33 (2012) 14681482.
Louie A. Divinagraciaa*, Maria Rochelle G. Divinagraciaa, David G. Divinagracia, “Digital
Media-Induced Tourism: The Case of Nature-based Tourism (NBT) at East Java, Indonesia”,
Procedia - Social and Behavioral Sciences 57 ( 2012 ), 85 – 94.
Paris, C. M. (2012). Flashpackers: An emerging sub-culture? Annals of Tourism Research,
39(2), 1094–1115.
Ruth N. Bolton, A. Parasuramanet. al. "Understanding Generation Y and their use of social
media: a review and research agenda", Journal of Service Management, Vol. 24 No. 3, 2013, pp.
245-267.
754
The 4A framework at the BOP and its impact on access to markets
and people:
An empirical investigation across five Asian markets
Moutusy Maity
IIM Lucknow
B1, Sector 62, Noida 201307
Email: mmaity@iiml.ac.in
Ramendra Singh
IIM Calcutta
K-303 New Academic Block, D.H. Road; Joka; Kolkata 700104
Email: ramendra@iimcal.ac.in
755
Introduction
In the context of poor, low income customers, also popularly referred to as the base of the
pyramid or BOP, extant research suggests that marketers should focus on the 4As framework
(Prahalad 2012) that consists of acceptability, affordability, accessibility, and awareness (Sheth
and Sisodia, 2012). The concept of 4As is not very different from 4Ps of marketing, except that
it is focused on the customers, and is conceptually similar to Bartel‟s (1968) market separations
theory that mentions that producers and consumers often do not meet due to economical,
temporal, spatial, and informational dimensions, and that the purpose of marketing is, “…to
resolve or remove these separations and to cause or permit consumption to occur” (pp. 32).” The
4As framework is highly recommended for market development at the BOP. As explained by
Sheth and Sisodia (2012), each of the four “A”s stand for a characteristic of the
customer/consumer‟s context: (1) Acceptability implies exceeding the expectations of customers
on functional dimensions (e.g. capabilities, quality, reliability) as well as on psychological
dimensions (e.g. brand image, style, social and emotional value); (2) Affordability implies the
customers‟ economic ability and psychological willingness to pay for the offerings; (3)
Accessibility means the customers‟ ability to obtain and use the product and her/his dependency
on its availability (e.g., supply) and convenience (e.g., time and effort to acquire); and (4)
Awareness refers to product knowledge as well as brand awareness. Other studies have slightly
tweaked this model, such as using availability in place of accessibility (e.g., Anderson and Billou
2007; Sarkar and Pareek 2013), while Prahalad (2012) ignores the acceptability dimension and
adds availability together with accessibility, which has led to extensions of this model to the 5As
( Kamande and Jarhult 2013).
Research Gaps and Research Objectives
Although several scholars have provided anecdotal support and evidence of the 4A framework,
there is little empirical support that provides a solid foundation to the framework. More
specifically, there is a scant mention of how each of these 4As can lead to market development,
and other outcomes in the market. Even though the 4As framework has been popularly used by
marketers as well as researchers to evaluate the likely success of marketing actions, many
scholars have argued that it can be further leveraged to suggest more fine-grained outcomes in
the market (Anderson and Billou, 2007; Prahalad 2012; Sheth and Sisodia, 2012).
756
The objectives of this research include investigating whether each of the 4As leads to
value creation in monetary terms (Financial Value) as well in terms of relationships
(Relationship Value), and if these in turn lead to market access and access to people. Our
research model would help in determining the specific impact of the 4As in increasing access of
poor producers to markets and people, two important dimensions of market development at BOP
(Tarafdar et al., 2013).
Specifically, the research questions we address in this study are:
1.
Does Awareness, Affordability, Acceptability, and Accessibility each impact
Financial Value and Relationship Value at the BOP?
2.
Does Financial Value and Relationship Value at the BOP impact Market Access
and People Access?
We undertake this research in the context of the continued usage of mobile phones by
two groups of users (farmers and business owners) at the BOP from rural areas. We argue that
the adoption and continued use of mobile phones by specific groups of people, especially at the
BOP, empowers them by providing access to people and markets that are otherwise not
accessible to them. We choose the two user groups (i.e., farmers and business owners) such that
each group represents small business owners. Individuals in each group have to reach out to
users/consumers/businesses. Choosing such a setting allows us to investigate the 4As framework
in the context of market development. We expect the hypothesized model based on the 4As
framework to hold for the two user groups.
Research Method
The data used for testing the model proposed in this study is obtained from a large-scale
structured survey conducted to obtain telecommunication usage data from individuals who
belong to lower socioeconomic strata in rural areas across five countries in Asia (i.e.,
Bangladesh, Pakistan, India, Sri Lanka, and Thailand). Individuals included in this study were
unskilled/semi-skilled laborers and small shop owners/businessmen who have a maximum of
middle-school level education. The study used a multi-stage stratified cluster sampling by
Probability Proportionate to Size (PPS). The structured survey questionnaire was first created in
the English language and then translated to local languages. Back-translation and pre-tests were
conducted to modify any obscure questions and words. The survey was conducted face-to-face
757
by trained administrators who read out each question and marked the answers on behalf of the
respondents.
Usable data consists of 357 mobile phone owners who are farmers, and 238
mobile phone owners who are business persons. All participants were between 15 and 60 years
of age. Participants were approached at their households to take part in the survey. The mean age
and the gender information of the respondents included in this study for the two groups of
respondents were: Farmers: age: 38.32 years; males: 281; Business persons: age: 37.49 years;
males: 163. Existing literature was used as the source of measurement for most of the constructs
defined in the theoretical model. Specifically, awareness, affordability, and acceptability, were
measured using validated scale items. The measures for accessibility, financial value,
relationship value, access to market, and access to people were collected through items based on
their conceptual definitions obtained from existing literature. All items were measured on a five
point scale.
Data Analysis and Results
We run the analysis for the two groups of users of mobile phones: farmers (M1), and
business persons (M2).
We find acceptable goodness-of-fit measures for the measurement model for farmers [
RMSEA (.051), TLI (.927), CFI (.936)], as well as the hypothesized model for farmers [RMSEA
(.051), TLI (.926), CFI (.934)]. R2 values for the endogenous variables are: Financial Value:
0.153; Relationship Value: 0.110; Access to Market: 0.362.
We find acceptable goodness-of-fit indices for the measurement model for the business
owners [RMSEA (.062), TLI (.900), CFI (.917)]. The fit indices of the structural model present
good fit as well [RMSEA (.069), TLI (.879), CFI (.896)]. R2 values for the endogenous variables
are: Financial Value: 0.178; Relationship Value: 0.182; Access to Market: 0.290; Access to
People: 0.293.
Research and Managerial Implications
Our findings indicate that the 4As framework provides empirical support for access to
people and markets at BOP, for both farmers and business owners. For both the groups of users
of mobile phone, we find that both Financial Value and Relationship Value impacts access to
market. For the business owners, only Financial Value (and not Relationship Value) affects
758
access to people. The two types of value, in turn, are affected by some of the 4As each. Our
study contributes to theory, practice and public policy by identifying appropriate As that suggest
relevant market resource gaps and can help firms to use these gaps for co-creating customer
value by working on the various constituents of the Financial Value and Relationship Value
aspects to develop market access at BOP.
759
References
Anderson, J. and Billou, N. (2007) „Serving the World's Poor: Innovation at the Base of the
Economic Pyramid‟, Journal of Business Strategy 28(2): 14-21.
Bartels, R. (1968) „The General Theory of Marketing‟, The Journal of Marketing 29-33.
Byrne, B. M. (2004). Testing for multigroup invariance using AMOS graphics: A road less
traveled. Structural Equation Modeling, 11(2), 272-300.
Churchill Jr., G. A. (1979), “A Paradigm for Developing Better Measures of Marketing
Constructs,” Journal of Marketing Research,16(1), 64– 73.
Fornell, Claes, and David F. Larcker. "Structural equation models with unobservable variables
and measurement error: Algebra and statistics."Journal of marketing research (1981): 382388.
Kamande, S. and Jarhult, W. (2013) Reaching the Mass Market of the Base of the Pyramid –
using the Five A’s Concept. Master Thesis: Linnaeus University.
Podsakoff, Philip M., Scott B. MacKenzie, Jeong-Yeon Lee, and Nathan P. Podsakoff.
"Common method biases in behavioral research: a critical review of the literature and
recommended remedies." Journal of applied psychology 88, no. 5 (2003): 879.
Prahalad, C. K. (2012) „Bottom of the Pyramid as a Source of Breakthrough Innovations‟,
Journal of Product Innovation Management 29(1): 6-12.
Sarkar, D. N. and Pareek, G. (2013) „Rural Marketing Mix in Bhutan: An FMCG Perspective‟,
The IUP Journal of Management Research 12(3): 7-28.
Sheth, J.N. and Sisodia, R. (2012). The 4 A's of Marketing: Creating Value for Customer,
Company and Society. NY: Routledge.
Tarafdar, Monideepa, Ramendra Singh, and Prashanth Anekal (2013), “Impact of ICT–Enabled
Product and Process Innovations at The Bottom of the Pyramid: A Market Separations
Perspective,” Journal of Information Technology (special issue on ICT Innovations in
Emerging Economies), 28(4), 279-295.
760
Bridging the Healthcare Service Divide in India:
Learnings from Success Stories
In Search of a New Market, Optimizing the delivery channel and redefining the role of
stakeholders
Venkataramanaiah Saddikutii, Rahul Gopeii Abhishek Ekkaiii, Yujata Pasrichaiv, Sania
Shankarv Sawant5
1
1
IIM Lucknow, svenkat@iiml.ac.in,
2
3
2
IIT Bombay, pnkj.gope@gmail.com
3
IIT Bombay abhishekekka29@gmail.com,
5
4
, IIT Bombay, yujatanitj@gmail.com
4
5
NIT Jalandar sania.4.sawant@gmail.com
Introduction:
In today’s world, more globalized than ever, emerging markets are fuelling two thirds of the
world’s corporate revenue growth. The private health sector is growing rapidly in emerging
market countries. In India, where demand exceeds supply, people increasingly rely on private
health care organizations to address their health needs. This trend will continue due to the
fundamentals that drive demand – population growth, increasing life expectancy, growing
disease burdens, and patient’s demand for treatment. India with its massive and diverse
population of 1.311 billion (World bank, 2015) with a 1.2% annual growth rate and a GDP
of $2.074
trillion USD (World Bank,2015) provide immense opportunities for health
care sector which requires better operations to deal with the drivers of demand.
We hypothesize that focusing at BoP requires thinking differently for urban and rural poor.
This paper thus examines the Critical Success Factors for eyecare delivery and studies their
correlation with clinical and geographical demography. We also examine the effects of
economies of scale on eye-care.
Key Research Questions:
a) To determine the differences of Health care as a product in comparison to other goods
and determine if opportunities exist at the Bottom of Pyramid for Eye care.
761
b) To Determine the critical success factors for effective and profitable eye care delivery
at Bottom of the Pyramid
c) Study the correlation of risk factors with clinical & geographical demographics, and
social parameters
d) Can effects of scale be demonstrated at the production line level, by comparing
detailed data of cataract surgery from two hospitals?
Methodology:
We began our analysis by compiling list of eye care hospitals which focused on Bottom of
Pyramid Population. Problems related to eye affects people of all age groups, so choosing
hospitals related to eye care seemed better in order to cover a larger population set.
The Arvind eye hospital model has been well applauded and has been described as one of the
cheapest and most productive eye care model (Forbes, 2010). Since Arvind eye hospital
operated only in Tamilnadu, in order to see the correlations of success factors with
demography, we selected a hospital from Mumbai since there is a huge difference in rural
demography in the ―
slums‖ of Mumbai. Aditya Jyot was rated as 'the best eye hospital in
Mumbai' by Outlook, an Indian weekly news magazine in its July 2002 issue and also has a
dedicated wing for community outreach (Aditya Jyot Foundation for Twinkling Little Eyes)
thus satisfying our criteria.
The paper is based on the secondary data analysis research that presents findings from
structured interview of different stakeholders associated with eye care delivery including
Aditya Jyot Eye Hospital leadership, the community health workers working in slums of
Mumbai and residents of Dharavi (Asia’s largest slum who have been treated with any kind
of eye disease by Aditya Jyot Community Health Workers).
For Arvind Eye Hospital, we gathered secondary data from the internet source, financial
reports and articles.
We classified the entire scale-up journey of Aditya Jyot Eye Hospital (AJEH) and Arvind
Eye hospital into three stages- Ideation and Launch Stage, Infancy and Early Growth, Late
762
Growth and Expansion Stage and have used the following framework to compare initiatives
of AJEH and AECS (Arvind Eye Care System) across the three stages. This comprehensive
model covers the interrelation resources of Knowledge, Technology and Institution, delivery
mechanisms, stages of evolution as well as enablers of value creation required for initiatives
to create the desired impacts.
Figure 1: Framework for comparing AJEH & AEH
We then used the context, intervention, mechanism, outcome (CIMO) model of Evaluation
research for measuring scale performance. The unit of analysis is a production line - a patient
process that can deliver a solution to a medical problem within one clinical specialty. We
compared specific cataract surgery production lines of a very large and a smaller hospital.
Using detailed data we address the question; can effects of scale be demonstrated at the
production line level?
763
764
Blindness and poverty seems to have an interrelationship. Many of the linked dimensions of
poverty such as include employment, material wealth, education, health, poverty alleviation
and development assistance, social wellbeing, and public cost would be resolved if the vision
of those who are disabled are corrected.
The BoP population thus represent a ―
latent market‖ for services. There are wide
opportunities for eye-care industry to expand among BoP but it requires the service providers
to rethink in order include the underprivileged as their consumers and develop business
models that revolve around the approaches shown in Fig.2 in order to enhance BoP market
for eye-care service.
Comparison of the interactional resources and their configurations within and across the two
cases reveals two important patterns. First, all three interactional resources are important
during the entire process of evolution for both AECS and AJEH.
Second, the relative importance of different interactional resources changes across the
different stages in both cases. The differences are possibly due to contextual and geographical
and developmental differences between the two service innovation projects. The following
table summarizes our analysis.
765
AECS-Arvind Eye Care System, * Tripura Vision Centers in partnership with the government
of the Northeastern state of Tripura
AJEH-Aditya Jyot Eye Hospital
Table 2: Summary of Analysis
We observe that for both projects, knowledge is more important than technology and
institutions during the initial idea and launch stage. For late growth, while AECS uses
technology as the primary interactional resource in the third stage to scale up its operations,
AJEH leverages institutions in order to grow. Thus all the three interactional resources,
namely Knowledge, Technology and Institutions, are extremely essential for the launch and
expansion of any initiative with Knowledge being more fundamental in the initial stage and
the other two being instrumental in the subsequent stages depending on the clinical and
geographical demography. In case of urban poverty, Technology and Institutional resources
766
are more critical in comparison to Knowledge and technological resources in case of rural
poverty for later stages of scale-ups.
Based on calculations on the CIMO model, we observe that while the large hospital (AECS)
performed more surgeries per year then smaller one, in terms of total resource consumption
per patient it was less productive. The large hospital had a good efficiency advantage in OTs
but it was less efficient in ward care.
Conclusions:
Figure 3: 6A Framework
Due to intangibility, variability and low absorption of healthcare services in India, and based
on learning’s from AJEH and AEH we propose a 6A framework (awareness, accessibility,
affordability, adoptability, acceptability and appropriateness) i.e. we introduced two As:
Acceptability and Appropriateness to the existing 4A framework. The interrelationships
among different ―
A‖s in the political, economic, social, technological, environmental, and
legal environment (PESTEL) has been shown in the figure.3
Thus Empathy for patients leads to value creation for both the patient (service user) and the
firm (service provider). Belief in the use of ICT and innovations stimulates the effective
utilization of resource capabilities to efficiently serve the masses in an economically
sustainable method. Continuous recursive learning and adaptation helps to enhance the
quality and cost-effectiveness of the healthcare services delivered. Efficient network
767
development helps collaboration with partners and stakeholders leveraging their expertise and
sharing their resources to scale up the affordability and reach of the healthcare services.
Figure 4: Revised Framework for Resource Based Value Creation
Based on our research findings, we present a revised theoretical model (Figure 3) that can be
used as the point of departure for future research on service innovations. Also economies of
scale are not found at patient process level. Operating policies seem to assume more
importance than scale. Our model has several Practical and Theoretical implications.
Practical Implications:
Our study has clear practical implications for policy makers in emerging countries. In case of
urban poverty, Technology and Institutional resources are more critical in comparison to
Knowledge and Technological resources in case of rural poverty for later stages of scale-ups
which help policy makers to ensure equitable growth.
768
Theoretical Implications:
Our research contributes to the broad stream of literature on the healthcare service divide by
extending it to the context of urban and rural poverty which requires rethinking by healthcare
service providers.
We delineate three service-centric value creation mechanisms—resource exploitation,
resource combination, and value reinforcement—in which the three interactional resources
(knowledge, technology, and institutions) configure in different value-creating patterns. The
analysis also reveals three distinct stages of service innovation evolution (idea and launch,
infancy and early growth, and late growth and expansion), with a distinct dominant resource
for each stage, taking examples of two leading eye-care providers.
References:
World Health Organization. Elimination of avoidable visual disability due to refractive
errors. Geneva: WHO; 2000, WHO/ PBL/00.79.
Thylefors B, Negral AD, Pararajasegaram R, Dadzie KY. Global Data on Blindness. Bull
World Health Organ 1995; 73:115-21.
World Health Organization. International Statistical Classification of Diseases and Related
Health Problems, 10th Revision (ICD10), Chap. 7; 2011. p. H53-4. Available from:
http://apps.who. Int/classifications/icd10/browse/2010/en.
Santiaguel,
M.
The
Role
of
Cooperatives
in
Global
Poverty
Reduction.
http://www.cooperativeunionofcavite.com
Poverty and Eye Health: http://b.3cdn.net/orbis/75e8e70e98ab5b18b7_kwm6b0ieu.pdf
Gilbert, C.E., Shah, S.P., Jadoon, R.B., Dineen, B., Khan, A.M., Johnson, G.J. and Khan,
M.D. (2008) Poverty and Blindness in Pakistan: Results from the Pakistan National Blindness
and
Visual
Impairment
Survey.
British
Medical
Journal,
336,
29-32.
(http://dx.doi.org/10.1136/bmj.39395.500046.AE)
Poverty and Eye Health Jyoti Jaggernath1,2, Lene Øverland3, Prasidh Ramson, Vilas Kovai,
Ving Fai Chan, Kovin S. Naidoo
Bridging the Service Divide through Digitally Enabled Service Innovations: Evidence from
Indian Healthcare Service Providers, Shirish C. Srivastava, G. Shainesh
Innovative
Approaches
of
Affordable
Health
Care
in
Emerging
Economies;Venkataramanaiah Saddikuti, Mohan Gopalakrishnan, and Saji Gopinath
769
Kumar, A. S., Chen, L. C., Choudhury, M., Ganju, S., Mahajan, V.,Sinha, A., and Sen, A.
2011. ―
Financing Healthcare For All: Challenges and Opportunities,‖ The Lancet (377:9766),
pp. 668-679.
Aditya Jyot-Diabetic Retinopathy in Urban Mumbai Slums Study (AJ-DRUMSS): Study
Design and Methodology
Roglic G, Unwin N, Bennett PH. The burden of mortality attributable to diabetes: realistic
estimates for the year 2000. Diabetes Care 2005;28:2130–2135.
The Fortune at the Bottom of the Pyramid, C K Prahlad, Stuart L Hart.
IIM Lucknow
IIT Bombay
iii
IIT Bombay
iv
NIT Jalandar
v
IIT Bombay
i
ii
770
Improving Social Capital at the Bottom of the Pyramid: Which
Interventions Work Best?
Reetika Guptai
ESSEC Business School
5 Nepal Park, Singapore 139408
Email: reetika.gupta@essec.edu
Introduction:
In recent years, a number of authors (e.g., Ansari, Munir and Gregg, 2012; Vishwanathan,
Sridharan, and Ritchie, 2010) have proposed that organizations working at the Bottom-of-thePyramid (BOP) in emerging markets should aim to develop and nurture social capital in these
communities. For example, a group microfinance initiative may help build social capital by
bringing women in a community together (Pronyk et al, 2008). Social capital is “the ability to
secure benefits through membership and other social structures” (Portes, 1998) Researchers posit
that social capital yields positive economic (Knack and Keefer, 1997) and health (e.g., Hyppa
and Maeki, 2003) benefits. Thus, its development is much-needed in BOP settings, which are
characterized by high levels of scarcity and social exclusion, particularly exclusion from formal
markets (London, 2007; Prahalad and Hammond, 2002).
Research Gap and Research Problem:
Both academics and leading international organizations such as the World Bank and USAID
have invested in programs to increase social capital among lower income consumers in the
emerging markets; however, only a handful of research projects have formally evaluated
programs aiming to increase social capital in BOP settings, and results from those studies have
been mixed. Despite their tremendous potential, social capital building interventions have not
attained clear success. Some evidence even suggests that social capital may need to be developed
exclusively from within communities (Krishna, 2007). However, the extant research does not
771
examine the types of social capital interventions, the degree of reactance that may occur (Brehm,
1966), and the degree of situational power distance belief (Hofstede, 1984) that may be elicited.
We believe these factors are likely to have a more substantive impact on the effectiveness of
social capital interventions, and to enable us to provide prescriptive guidelines for policy makers.
Objectives of the Study:
In this research, we present a novel theoretical framework based on the mindset literature (e.g.,
Heckhausen and Gollwitzer, 1987), which incorporates variables (and their interplay) that are
inherent in the design of these types of social capital interventions. Specifically, we examine how
implementation versus deliberative thinking-based programs may differentially impact social
capital development in BOP communities. Implementation oriented programs involve a stepwise approach to accomplishing goals usually laid out by an external entity, while the
deliberative oriented programs are more organic in nature, where a group of BOP consumers
collaborate among themselves to attain the end-goal. We hypothesize that program activities that
are implementation (deliberative) oriented will generate greater (lesser) social capital, and that
this effect will be mediated by lower (higher) levels of psychological reactance (i.e., resistance to
the program). Furthermore, we posit that this effect will be moderated by levels of situational
power distance belief (i.e., participants‟ belief in inequality as inevitable), as triggered by aspects
of program design. We suggest that when situational power distance belief is low, there will be
no difference between implementation and deliberative thinking-based programs in terms of
impact to social capital, because there will be little psychological reactance. For moderate levels
of situational power distance belief, implementation thinking-based programs will have a greater
positive impact on social capital than deliberative thinking-based programs; this is because
psychological reactance will be greater in the latter than in the former case. Finally, for high
levels of situational power distance belief, there will be no difference between implementation
and deliberative thinking-based programs because in both cases psychological reactance will be
too high for the intervention to work.
772
Research Methodology and Results:
In the qualitative study, we tested two social capital interventions focused specifically on
growing social capital in the BOP community (i.e., community cleaning activity and building the
community club house). Each of these two initiatives was framed in an implementation (the
group was provided steps to achieve the task) and deliberative manner (the group could evaluate
the pros and cons of the task). The qualitative interviews were conducted in West Bengal, India
among BOP participants. From these qualitative findings and the extant literature, we concluded
that an intervention comprising an implementation (versus deliberative) orientation will increase
BOP consumers‟ attainment of their consumer goals, thereby increasing social capital and
building stronger communities. A follow-up field experiment was conducted to confirm the
above findings and to elucidate the role of psychological reactance in building social capital.
Specifically, 50 rural BOP participants in India were assigned to one of the two conditions
(deliberative thinking, implementation thinking programs) where they had to work in groups on
the respective mindset based tasks (deliberative or implementation oriented). Subsequently, they
individually responded to a series of questions related to social capital development, group
conflict and psychological reactance. Participants in the implementation-oriented program
reported a higher social capital than deliberative oriented program, mediated by lower levels of
group conflict and psychological reactance. Finally, a third study is underway that is examining
the moderating role of situational power distance belief.
Conclusion and Implications:
In conclusion, through this research we have begun an effort to reconcile seemingly disparate
findings from the literature on the effectiveness of interventions aiming to increase social capital
in BOP contexts. We have developed a novel framework positing that program designs based on
implementation versus deliberative thinking will differentially contribute to social capital. From
a methodological standpoint, this mixed methods approach, coupling qualitative methods with
quantitative (field experiment), is one of the first studies that employ dual methodologies to
examine BOP issues. In addition to these contributions, the research is of great practical
relevance, since it has been suggested that social capital should lead to positive health and other
outcomes in settings of absolute poverty (e.g., Vishwanathan et al., 2010) suggesting that policy
773
makers should consider implementation based programs that will help with poverty eradication
through social capital development. Identifying two mindset based social capital development
programs – and understanding the efficacy of these programs by examining the underlying
mechanisms – will play an important role in accelerating the efforts of social capital
development in BOP communities.
References:
Ansari, S., Munir, K., & Gregg, T. 2012. Impact at the „bottom of the pyramid‟: the role of social
capital in capability development and community empowerment. Journal of Management
Studies, 49(4): 813-842.
Brehm, J. W. 1966. A Theory of Psychological Reactance. New York: Academic Press.
Heckhausen, H., & Gollwitzer, P. M. 1987. Thought contents and cognitive functioning in
motivational versus volitional states of mind. Motivation and Emotion, 11(2): 101-120.
Hofstede, G. 1984. Culture's consequences: International differences in work-related values.
Thousand Oaks: Sage Publications Incorporated.
Knack, S., & Keefer, P. 1997. Does social capital have an economic payoff? A cross-country
investigation. The Quarterly Journal of Economics: 1251-1288.
Krishna, A. 2007. How does social capital grow? A seven-year study of villages in India.
Journal of Politics, 69(4): 941-956.
London, T. 2008. The base of the pyramid perspective: a new approach to poverty alleviation.
Paper presented at the Academy of Management Proceedings.
Portes, A. 1998. Social Capital: Its Origins and Applications in Modern Sociology. Annual
Review of Sociology, 24: 1-24.
Prahalad, C. K., & Hammond, A. 2002. Serving the world's poor, profitably. Harvard Business
Review, 80(9): 48-59.
Pronyk, P. M., Harpham, T., Busza, J., Phetla, G., Morison, L. A., Hargreaves, J. R.,
Social Science & Medicine, 69(8): 1157-1166.
Viswanathan, M., Sridharan, S., & Ritchie, R. 2010. Understanding consumption and
entrepreneurship in subsistence marketplaces. Journal of Business Research, 63(6): 570-581.
i
ESSEC Business School, 5 Nepal Park, Singapore 139408
774
Reflections from periodic markets in rural India: current issues and
implications
Satyam1, Rajesh K. Aithal1 and Harshit Maurya2
1
Indian Institute of Management Lucknow
Off Sitapur Road, Prabandh Nagar, Lucknow, U.P. (India) 226013
2
Department of Business Administration
University of Lucknow, Lucknow-226 021 (India)
Email Ids: satyam@iiml.ac.in / rajeshaithal@iiml.ac.in / harshitmaurya1@gmail.com
Introduction:
The rural markets are dynamic entities, and they evolve depending on the needs of the buyers
and sellers participating in them, the nature of competitive forces, and the external environment.
The presence of periodic markets in another distinct and important feature of rural markets
(Kashyap, 2012; Velayudhan, 2014). The Periodic marketplace is an authorized public gathering
of buyers and sellers of commodities at an appointed place at regular intervals. Periodic markets
will continue playing a significant role in rural India as 58 percent of the rural consumers prefer
to buy from periodic markets despite the product being available in village shop (Velayudhan,
2007). They perceive that products in periodic markets are better regarding both quality and
price. Such informal marketing systems which are partially or fully outside the government
regulation are growing in developing countries. The significance of periodic markets is pivoted
on a diversity of functions performed out of which the economic, social and political functions
have been identified as the major ones. Marketing companies want to make space into these
markets, but there is the lack of knowledge about these marketplaces. The research on periodic
markets within marketing literature is sparse, and the objective of this study is to fill this research
gap.
775
Periodic markets are part of the informal market economy and marketing exchange within such
market falls outside the formal market economy. The cost of reaching the outlets in rural areas is
higher for rural markets because of geographical spread. Moreover, the cost of reaching deep
pockets in rural areas is exorbitantly high. Hence periodic markets provide a very good
alternative to reach the interior rural markets. There are more than 47000 periodic markets in
rural India with an annual turnover of more than Rs 50,000 crores per year (Kashyap, 2012).
Exchanges in rural markets are sometimes thought of as only the process of buying and selling.
In reality, however, rural marketplaces are much more than merely buying and selling.
Subsistence Marketplaces, prevalent in rural regions, are characterized by intense social
relationships between buyers and sellers (Sridharan and Viswanathan, 2008). A market is
necessarily a place of a large number of the simultaneous person to person transactions. But apart
from being a point of economic contact they also serve as places of social and cultural
interactions. Periodic markets we describe in this study is an informal marketplace which
consists of small unincorporated businesses started by individuals or households primarily to
generate survival income and simultaneously cater to the need of poor for whom institutional
support is absent or scarcely available.
Research Objectives:
This paper has three fold objectives. First, the attempt is to provide a rich description of two rural
periodic markets, which are at different stage of evolution, in the capital city of North India.
Second, the paper also aims to identify the reasons of consumption and entrepreneurship in rural
periodic markets. Third, this paper also aims to highlight the major issues associated with rural
periodic markets, both from the consumers’ as well as sellers’ perspective. Findings of this
study will enhance the understanding of these markets so that product, services, and policies can
be designed to enhance the effectiveness and efficiency of rural periodic markets.
Methodology:
We conducted long interviews (McCracken, 1988) during multiple waves of market visits with
18 market participants including the village head and one of the founding members in the
776
ongoing exploratory study. Responses were categorized from the transcript. Recurrent themes
were further identified by looking for emerging concepts, phenomena, and variables. Then we
found and assembled verbatim from transcripts dealing with each recurrent theme. Looking at
the frequency of mention and using qualitative judgment, we retained or removed themes by
meaningfulness and substance (Miles and Huberman, 1994).
Findings and Discussion:
This study examines how a subset of market participants survive, negotiate, adapt and shape a
periodic market in the rural areas. In reality, most of the periodic markets are conducted
informally and were started as a community initiative in most of the cases. Most of the periodic
markets are not equipped with basic facilities like platforms for sale or auction, electricity,
drinking water, facilities for grading, sorting - to name a few. The participants in a periodic
market can be grouped into consumers, sellers, administrators, and bystanders. In the case of
periodic markets consumers are local people and some of the sellers move from one market to
another and return to their home base after doing business in one or more market in a week.
Majority people live away from the central place institutions. Therefore to minimize the efforts,
expenses and inconvenience in travel all these institutions are visited in one single journey. It is
observed in both the cases of periodic markets under study, the settlement is near the road
junction. In one case the periodic market is on the national highway. Periodic markets are located
near other central places such as religious places, administrative offices, and socio-cultural
institutions. In certain cases, periodic markets may be located in between two settlements
particularly near road junctions and river crossing.
One periodic market is organized on Thursday and Sunday whereas the other one is organized on
Monday, Wednesday, and Friday. Different lengths of market intervals have been identified, but
the bi-weekly schedule seems to be a very common phenomenon. When new markets are located
in areas which already have some markets, the new markets select their market days other than
those of the existing markets to avoid clashes. Markets as commercial institutions have some
functions to perform. They perform utility functions, exchange functions, and institutional
777
functions. The function of a periodic market is basically to provide a wide range of goods and
services to the population of the surrounding areas. The basic element of the periodic market as
the central place is its capacity to provide goods and services to an area, larger than itself.
Barriers at the macro level are the lack of access to capital, largely less educated, unskilled and
unorganized workforce, poor infrastructural support and dominated by informal governance
mechanism. Khanna and Palepu (2010) suggested the theory of institutional voids which act as
the barrier for the subsistence entrepreneurs.
We also try to study the usage of social ties on the seller side, entrepreneurial owners of microenterprises. It was observed that sellers rely more on their close friends and family as their
sources of information. It was also found that Individuals tend to establish and maintain close
ties with others as a means of coping with the constraints of poverty and low-literacy as observed
by Viswanathan et al. (2010). In the event of uncertainty and resources constraint, entrepreneurs
depend largely on the strong ties in their social network (Narayan and Petesch, 2002). It was
observed that initially sellers derive benefits from the knowledge available in their network ties.
The knowledge available in embedded communities directs the sellers towards recognition of
opportunities. As their understanding of the markets and customers improved, they also adopted
better ways and means of bridging the gap. On the other constraints, we observed low
educational levels and access to formal institutional mechanism being the major issues.
Concluding Remarks:
This paper has made an attempt to improve the understanding of rural periodic markets and
associated issues of infrastructure, information, etc. Some of the barriers to access to formal
institutions have also been brought out. And on the implications front, the paper also comes out
with suggestions for minimizing the effect of institutional voids by incorporating complementary
effects of the formal institutional environment. Findings of this research are expected to help
subsistence enterprises prosper and can be helpful in framing policy for periodic markets which
aim to look beyond economic value creation and help in creating a better entrepreneurial
ecosystem in periodic markets. Implications for businesses which are interested in having access
778
to rural periodic markets are also brought out. One of the limitations is that findings of this study
can’t be generalized as we are using qualitative methodology. Another limitation is related to the
research setting which is in North India, and cultural factors might have some effect which needs
to be investigated further.
Key References:
Kashyap, Pradeep (2012). Rural marketing. New Delhi: Pearson Education.
Khanna, Tarun and Krishna Palepu (2010), Winning in Emerging Markets: A Road Map for
Strategy and Execution. Boston, MA: Harvard Business School Press.
McCracken, Grant (1988), The Long Interview. Thousand Oaks, CA: Sage.
Miles, M. B., and Huberman, A. M. (1994). Qualitative data analysis: An expanded sourcebook.
Thousand Oaks, CA: Sage.
Narayan, Deepa and Patti L. Petesch (2002), Voices of the Poor: From Many Lands. New York:
Oxford University Press.
Sridharan, S., and Madhu Viswanathan (2008), “Marketing in subsistence marketplaces:
consumption and entrepreneurship in a South Indian context,” Journal of Consumer Marketing,
25(7), 455–462.
Velayudhan, Sanal K. (2007). Rural marketing: targeting the non-urban consumer. New Delhi:
Response Books
Velayudhan, Sanal K. (2014). Outshopping in rural periodic markets: a retailing opportunity.
International Journal of Retail & Distribution Management, 42(2), 151-167.
Viswanathan, Madhu, Rosa, Jose A., and Julie A. Ruth (2010), “Exchanges in marketing
systems: The case of subsistence consumer-merchants in Chennai, India,” Journal of
Marketing, 74(3), 1-17.
779
Economic Analysis of Marketing Channel of Grapes in
Maharashtra
1
1
Dr. Rachana Patil,
PGDM Rural Management
Prin. L. N. Welingkar Institute of Management Development & Research,
Lakhamshi Napoo Road, Near Matunga (Central Rly.), Mumbai- 400 019
Email: rachana.patil@welingkar.org
Introduction:
Many fruits and vegetables are good source for the nutritional security. Among them the
“Queen of fruits” grape is one. In India, grape is known over a long period and has been
mentioned by substrata and in their ancient medicinal treaties. It is stated that grape was
introduced into India in 1300 A.D by Muslim from Iran and Afghanistan. An Indian grape
shades of color, delicious taste and high nutritive value. In fact, 30 varieties of grape are
grown in India. (Shanmugavelue K.G. (1989).
The production of grapes all over the world is currently 69 million tonnes out of which India
accounts for 2.2 million tonnes of grapes making a share of 1.51 per cent of the total world
production and 3 per cent of the total fruit production in the country. The country has
distinction of achieving highest productivity in grapes in the world; with an average yield of
30 ton/ha. In India about 78 per cent of total production of grapes is used for fresh
consumption, about 17 to 20 per cent of grapes are used to produce raisins & 1 to 2 per cent
used for the wine making. The processing of this fruit in our country is very less as compared
to the traditional grape growing countries in the world where more than 80 per cent of the
production is processed in the form of wine, raisin and juice. There are 16 bi-products made
from grapes like raisin, grape juice, squash, syrup, jam, jelly, vinegar, wine, pickles,
chocolates, tartaric acid, oil, cattle feed, tannin, etc. The processed products viz. wine; raisins
and grape juice are the most popular products from the grape all over the world. Raisins are
the second most important product of the grapevine, wine being the first. The harvesting
season of grapes in India is from the month February to April. But it is clear that grapes
780
industry in India is facing several difficulties and problems such as climate changes, storage
facilities and marketing strategies.
Research Gap and Research Problem:
Grapes industry in India is facing several difficulties and problems such as climate changes,
storage facilities and marketing strategies (Gade A.D., Gaikwad S.B, Gaikwad N.S., 2014). In
this paper an attempt is made to study the marketing channel of grapes in Mumbai, India and
estimate the profit margins in the channel identified.
Objectives of the Study:
The specific objectives that we intend to meet are:
1. To study the marketing channel of grapes in Mumbai, India.
2. To estimate the marketing costs and the margins in the channel identified
Research Methodology:
Marketing Channel of Grapes
A simple statistical tool like averages and percentages were computed to interpret results.
Primary data have been collected from APMC, Vashi, Mumbai fruit market for the year 201415. The channels of distribution indicate the route through which commodity moves from
initial producer to end consumer. All important channels of distribution while marketing the
grapes have been observed under the study.
During the course of investigation it was observed that Channel III, i.e., Producer →
Commission Agent/Wholesaler → Retailer → Consumer is the major channel of distribution.
Almost all the sample farmers follow this channel for marketing of grapes.
Cost of Marketing
Total cost of marketing will was calculated as under:
C = CF + Cm1 + Cm2 +Cm3............+Cmn
Where,
C = Total cost of marketing
CF = Cost born by the farmers in marketing of grapes
Cm = Cost incurred by the middlemen in the process of buying and selling
781
n= 1, 2, 3..............n
n is the number of middlemen involved in the channels.
Producer’s Share in Consumer’s rupee: (R.N. Wankhade S.P. Dhanwate A.M. Bhende
(2009).
PF
Ps
= ------------ x 100
Pc
Where,
Ps = Producers share in consumer’s rupee
PF = Price of the produce received by the farmers
Pc = Price of the produce paid by the consumer.
Data Analysis and Results:
Marketing Cost incurred by Producer (Rs/q)
Marketing cost incurred by producer is presented in table below.
Table 1: Per quintal marketing cost incurred by Producer
S. No.
Particulars
Amount (Rs.)
Per cent (%)
1.
Transportation (Freight)
300.00
31.30
2.
Market fee @ 0.80%
50.00
5.22
3.
Loading
70.00
7.30
4.
Unloading
77.00
8.04
5.
Commission @ 10%
400.00
41.74
6.
Weighing charges
11.30
1.18
7.
Miscellaneous expenditure
50.00
5.22
Total Cost
958.30
100.00
782
Gross price received
: Rs 4958.30
Cost incurred
: Rs 958.30
Net price received
: Rs 4000.00
It was observed from the table that among out of total cost incurred by the producer,
commission was the major item in marketing of grapes contributing 41.74 per cent share in
total marketing cost. The next major item in marketing cost was transportation cost
contributing 31.30 per cent share in total cost of marketing. Unloading was third major item
having 8.04 per cent share in total cost of marketing whereas loading, miscellaneous items,
market fee and weighing charges had contributed 7.30, 5.22, 5.22, and 1.18 per cent,
respectively.
It could be concluded from the above results that the cost on account of commission is the
major item followed by transportation cost.
Marketing Cost incurred by Commission Agent/Wholesaler (Rs/q)
Marketing cost incurred by commission agent/wholesaler is given in table below.
Table 2: Per quintal marketing cost incurred by Wholesaler
S. No.
Particulars
Amount (Rs.)
Per cent (%)
1.
Transportation (Freight)
200.00
12.99
2.
Labor charges
140.00
9.09
3.
Godown charges
700.00
45.45
4.
Miscellaneous charges
500.00
32.47
Total Cost
1540.00
100.00
Purchase price
: Rs 4958.30
Cost incurred
: Rs 1540.00
Selling price
: Rs 6998.30
Net margin
: Rs 500.00
783
It was observed from table 2 that out of total cost incurred by the wholesaler, major share was
of godown charges contributing 45.45 per cent share in total marketing cost. The next major
items of marketing cost were miscellaneous charges and transportation charges each
contributing 32.47 and 12.99 per cent respectively followed by labor charges contributing
9.09 per cent.
Marketing Cost incurred by Retailer
The details of marketing cost incurred by retailer are given in table below.
Table 3: Per quintal marketing cost incurred by Retailer
S. No.
Particulars
Amount (Rs.)
Per cent (%)
1.
Transportation (Freight)
150.00
15.15
2.
Loading charges
70.00
7.07
3.
Unloading charges
70.00
7.07
4.
Miscellaneous charges
700.00
70.71
Total Cost
990.00
100.00
Purchase price
: Rs 6998.30
Cost incurred
: Rs 990.00
Selling price
: Rs 10000.00
Net margin
: Rs 2011.70
It was observed from the Table 3 that out of total cost incurred by the retailer, major share
was of miscellaneous charges contributing 70.71 per cent of in the total marketing cost. The
next major items of marketing cost were transportation charges contributing 15.15 per cent.
Loading charges and unloading charges each contributed 7.07 per cent of total marketing cost.
Price Spread in Grapes
The details about the price spread for grapes along with the producers share in consumers’
rupee are given in table below.
784
Table 4: Price spread of Grapes / Producer share in Consumer Rupee
S. No.
Particulars
Price Spread (Rs.)
Per cent (%)
1.
Producer
a)
Net price received
4000.00
40
b)
Cost incurred
958.30
9.58
c)
Gross price received
4958.30
49.58
2.
Commission Agent/Wholesaler
a)
Purchase price
4958.30
49.58
b)
Cost incurred
1540.00
15.40
c)
Net margin
500.00
5.00
d)
Selling price
6998.30
69.98
3.
Retailer
a)
Purchase price
6998.30
69.98
b)
Cost incurred
990.00
9.90
c)
Net margin
2011.70
20.12
d)
Selling price or price paid by
10000.00
consumer
100.00
Price spread in the case of channel III, where the produce was sold by producer to
commission agents/wholesalers to retailer in Mumbai market has been worked out and
presented in the Table 4.
It could be seen from the above table that the producer’s share in consumer rupee was 40.00
per cent. In the case of commission agents/wholesalers share in consumer’s rupee was 5.00
per cent. Lastly retailer’s share in consumer rupee 20.12 was per cent. It was revealed that
producers get maximum share in the consumer rupee.
785
Prominent Challenges faced by Grape Sector
Nature plays havoc with farmers.
Non availability of adequate storage facilities
Identifying the appropriate marketing channel to sell.
Availability of electricity is limited.
Implications of the Study:
The present study concluded that the producer’s share in consumer rupee was 40.00 per cent.
It means the producers get the maximum share in the consumer rupee. However, there is not
much significant growth in the grape industry over the years compared to demand. As it is
facing some challenges. Therefore, we suggesting following suggestions to an improve grapes
industry in India
Development of rural infrastructure facilities like, transportation, adequate water and
electricity.
Setting up cold storage & collaborate grape growers, grape processing industry.
Improvement in quality of the Indian grapes as per international marketing norms.
References:
Gade A.d., Gaikwad S.B, Gaikwad N.S,(2014) : Trends in Production and Exports of Grapes
in India. Indian stream Research journal Vol. IV, Issue, II/March-14, Pp-1 to 5.
Shanmugavelue K.G. (1989): Post harvest handling and marketing of grapes. Viti India, Pp 390.
R.N. Wankhade S.P. Dhanwate A.M. Bhende (2009): Production utilization & Marketing of
Pigeon pea in Akola. International Journal of Essential Sciences, Vol.3,No.2.
http://foodprocessingindia.co.in/state_pdf/Maharashtra/DraftAgroIndustrialPolicy2010.pdf
786
Exploring the Most Preferred Food Products among Indian
Consumers and Reasons for their Preferences
Kriti Bardhan Gupta
Indian Institute of Management Lucknow
Off Sitapur Road, Prabandh Nagar, Lucknow – 226013
Email: kriti@iiml.ac.in
Introduction:
There are several determinants of food choices like physiological, genetic, sensory,
experiential, affective, psychological, social, extrinsic, economic etc. Almost everything
influences food choice, at one time and place or another (Rozin, 2006). However, not all
parameters are likely to play equal role for consumers at different time, place and situation.
Young children might not have full reasoning abilities to process nutritional information
concerning food. Even economic constraints may also not play an important role in their food
choice decision (Nicklaus and Issanchou, 2007). However, as they grow over the years, their
preferences for different food are changed and criteria for selecting those food may also change
with their ages.
Research Gap and Research Problem:
There have been several studies on food consumption behaviour in national and international
context. The field of consumer behaviour for food products initially focused on sensory factors
with an aim to improve the quality of products and optimization of products on sensory factors
for the benefit of researchers and new food product developers. However, the field has evolved
beyond a straightforward product focus to incorporate investigation of the key determinants of
consumer decision-making and purchase behaviour in the market place (Frewer and H Van
Trijp, 2007). Although, over the period of time, the field is becoming much more multidisciplinary in nature, understanding of the behaviour of food consumers lies at the core of all.
Several researchers have proposed different food consumption behaviour models. They have
787
explored the various factors affecting food consumption behaviour including demographical
characteristics (Chambers, 2008 and Chernin, 2008). However, not much study has been
conducted in Indian context about consumers’ preferences for specific food products at
different stages of life. It is imperative to know not only what food items are mostly preferred
by the people, but also why they prefer the specific food items. The present study is trying to
fill up this gap.
Objectives of the Study:
The objective of the present study is to explore the type of food items that are mostly preferred
by the Indian people over the different stages of life till maturity. It also explores the reasons
behind such preferences for different food products at different stages of life.
Research Methodology:
The methodology adopted for the present study is exploratory and descriptive in nature. The
study was conducted in two different stages. In the first stage, questionnaire based survey was
conducted in which respondents were asked to list out their most favorite food(s) at different
ages i.e. 5-8 years, 8-12 years, 12-18 years and after 18 years along with reasons for the same for
each category.
The data was collected from three different batches of students of a prestigious management
school in North India during three years (2013, 2014 and 2015). The total number of respondents
are 88. The most favourite food choices indicated by the respondents were sub-categorized into
different product groups, to identify the trends in preferences of different food products across
different age categories. Chai-square tests and other suitable statistical techniques were used to
analyze the changes in most preferred food products across ages.
To supplement the questionnaire based survey, in-depth interviews were also conducted with 10
people to verify the findings of the quantitative analysis and also to gain further insights.
788
Data Analysis and Results:
The data analysis was performed at three different levels: a) individual respondent level, b)
different age categories level and c) different sub-categories of food products level.
Significant differences were found at individual levels in the types of food products reported as
the most preferred food products at different ages. The reasons for such preferences were also
very different for individual respondents at different age levels.
Taking all respondents as a whole, different age categories wise analysis helped to identify the
most preferred food products at different age levels and the associated reasons for their
preferences at different age levels.
Further, analysis was performed for different sub-categories of food products like beverages,
desserts, confectionary products, healthy foods, snacks and outside foods, vegetarian and nonvegetarian products, to point out about what age category people report these products as most
preferred ones and the reasons associated with such preferences.
While significant differences were found for some categories of food products (desserts,
confectioneries, snacks & outside foods, veg and non-veg foods), no significance difference for
some other categories of food products (beverages and healthy foods) were found across ages.
While the major reasons for preference of beverages as most favourite foods are taste, health,
energy needs and social influence, the preference for desserts are based on taste, parties and
celebration etc. Similarly reasons for preference of other categories of food products were also
identified in great detail.
Based on the qualitative analysis (based on in-depth interviews), it was confirmed that the
preferences for food changes with the change in age. One of the main reasons for these changes
is that in childhood people consume what are prepared at home or brought by parents. But this
scenario changes when they become the buyer. Even the preference for a specific category of
food may be same but the preference for food in that category is varying with age. It is also
observed that when they grow old, people consume more of those foods which were was
restricted during childhood. The other reasons identified by the respondents are prioritization
between taste and health, availability of food, disposable income, social influence, and lifestyle.
789
Implications of the Study:
The identification of different types of food products that are most preferred by people at
different stages of childhood and at reaching the age of maturity and reasons associated with
such preferences may help not only the food marketing firms to target their effort in a focused
manner, but may also provide insights to the policy makers and other stakeholders to take
suitable steps for developing a healthy consumption habit among people at early stages of the
life.
References:
Chambers, S., Lobb, A, Butler, L and Trail, W. (2008). The Influence of Age and Gender on
Food Choice: A Focus Group Exploration, International Journal of Consumer Studies, 356-365.
Chernin, Ariel (2008). The Effects of Food Marketing on Children’s Preferences: Testing the
Moderating Roles of Age and Gender, The Annals of the American
Frewer, L. and Trijp, H. Van (ed.). Understanding Consumers of Food Products, Wageningen
University, The Netherlands. Woodhead Publishing Series in Food Science, Technology and
Nutrition No. 137
Nicklaus, S and Issanchou, S. (2007). “Children and Food Choice” in Frewer L. and Trijp, H.
Van (ed.). Understanding consumers of food products, Wageningen University, The
Netherlands. Woodhead Publishing Series in Food Science, Technology and Nutrition No. 137,
Rozin, Paul (2006). The Integration of Biological, Social, Cultural and Psychological Influences
on Food Choice in Shepherd, R. and Raats, M. (ed.). The Psychology of Food Choice, Frontiers
in Nutritional Science, No. 3, University of Surrey, Guildford, UK, CABI, 19-40.
790
A Case of Success Story from the Street Market in Dhaka
Md. Jahed Hosen1, Kohinoor Biswas2 and M Sayeed Alam3
1.
Department of Business Administration
East West University, Dhaka, Bangladesh
2
Department of Business Administration
East West University, Dhaka, Bangladesh
Email: sayeed@ewubd.edu
Introduction and Literature:
The root of street markets goes back to as old as civilization (Edwards and Ogilvie, 2012).This
market is characterized with the prevalence of one type of entrepreneur who owns a small
business, such as hawkers, street vendors, artisans etc. and just took up for this life or business
due the lack of employment, tight labor market and the needs of survival (de Souza et al., 2013).
From the perspective of micro-entrepreneurs, and local consumers the importance of street
markets is indeed, significant (Dana, 1999).
Street market per se informal market is not outside the premise of marketing (de Souza et al.,
2013). According to the American Marketing Association (AMA, 2008) marketing is based on a
set of institutions and processes, of creation, communication, distribution and effecting
exchanges of offers that have value for customers, consumers, partners and suppliers, and society
as a whole. Mccarthy (1960) refers the 4 Ps of Marketing to the daily activities of the marketing
manager or the businessman that should be the cornerstone in the marketing dynamics of any
business. de Souza et al. (2013) connect the dot between marketing in the formal and informal
context and offer working definition for informal marketing as all activities of intuitive creating,
sensitive processing, empirical planning and execution of attitudes, oriented in an unstructured
manner, without specific technical foundation, carried to the completion of transactions;
characterized by processes of communication, distribution, pricing and promotion of products
and services.
791
While in the field of academic research micro and small businesses get good share street markets
are thinly visible. This paper will offer insight from a single unique case of success from the
street market of Dhaka.
Objective:
The purpose of this research is to scan through the success story of a micro-entrepreneur in the
street market following the established theory of marketing.
Methodology:
This is a single case study descriptive and explanatory or interpretive in nature with deductive
reasoning. We consider „Imam Chotpoti’ as a “cases of something” (Eisenhardt 1989) or “well
chosen” or “crucial” (Eckstein 1975) on the ground of the fact that a 32- year old street vendor
with a very little education up to class four earns a monthly revenue of Tk.0.25 million which is
far above the average turnover of „others‟ in the same cluster per se the street vendors.
According to (Eckstein, 1975) crucial cases can test theory in a “most likely manner” (a case
where the theory should apply but it turns out that it does not) or a “least likely manner” (the
theory is not meant to apply here, but still it does).
Case study offers understanding of complexity (Ragin, 1987). In order to break down at the
question „how‟; i.e. how Imam Chotpoti stood out in the street market we have compared the
marketing “insight” of the “actor” (Lijphart, 1971; Anderson, 1990); i.e. the micro-entrepreneur
to the predictions from the theory of marketing (Ragin & Becker 1992Yin, 1994).
Authors will apply positive comparative method via theoretical inference since this single case is
selected with an analytical view (Gomm, Hammersley and Foster; 2000).
Findings:
Imam got into Chotpoti/ Fuska vending business at 9, being forced by his family crises. His first
hand learning was through another veteran vendor under whom he worked in return of a meagre
pay. With eight years of sufficient experience of the product Imam set off with his own venture.
792
He declares the secret of his business success is the unique combination of nine spices that he
learned from his guru. This finding is supported by Drucker (2003) as he mentioned the primary
reason for the choice of products by micro-entrepreneurs, is “know well the product/service”,
which is a relevant variable in the management of various types of business.
Imam built his success on 3Cs: Consistency, Cleanliness and Communication. His long
experience backed by a burning desire to take on the stride for his family has made it possible to
offer every single serving standardized with no slight fluctuation in taste per se quality. While
street food suffers from the very common allegation of poor hygiene Imam is very alert on this
and committed to give the best in terms of cleanliness. Through this strength he capitalized
confidence from different segments across the social and income class. The consistency factor
earned his business a brand identity after his name as the shop is well known among the locals as
“Imam Chotpoti”. He had times of struggle as well. His business turnover was not much
impressive when he used to roam around with his cart. Managing a fixed attractive location was
a prime strategy that worked. Imam proves on „insight‟ factor as is documented in literature.
Insights of the micro-entrepreneur is at the root of value creation for customers (Peña, 1999;
Bosire and Gamba 2003).
With a fixed location and a visible sign board, it added to “demonstration of the product/service”
and resulted in “draw customer‟s attention” (Kulkarni, Kannan and Moe 2012). With an average
of 175 up to 200 customers to serve daily Imam has to struggle specially at peak business hours.
He never loses sight on the importance of manners with customers. He is acknowledged by his
customers for effective communication. Once a handful of police officials used to eat for free.
By now, the very-same police officials turn to Imam along with their family members, albeit on
payment.
The product basket of Imam is composed of 4 menu; namely: Chotpoti, Fuska, boiled potato
with spice and Halim. He has established a point of difference from other competitors by adding
Halim, available only during the holy month of Ramadan (fasting). Halimis available as take –
away as well. The strategic portfolio of Imam came up as immediate response as is supported by
literature. Small business owners mostly formulate strategies emphasizing the immediate issues
concentration in marketing activities only on sales of products and services available at the
moment (Doyle, 2000; Bosire and Gamba, 2003). The marketing strategies are rather random
793
and intuitive in nature for whichever the products, services, people, places, cause and
organization to achieve sales targets (Bosire and Gamba, 2003).
Imam intends to transform his business from informal in to formal and expand further in furflung areas of Dhaka. He attempted to obtain a trade license, but his attempt ended in vain since
he did not receive a positive response from the respective body.
Implication:
In theoretical interpretative studies, the case of Imam Chotpoti belongs to a class of successful
stories which adds to the established theory of marketing. Though, a single case yet it offers
implicitly comparative studies through analytical generalization using theories of marketing as
template (Jennifer, 2002).
References
Bosire, J., &Gamba, P. (2003). Measuring business skills cognition: the case of informal sector
entrepreneurs in Kenya. Eastern Africa Social Science Research Review, 19(2), 1-21.
Dana, L. P. (1999). Preserving culture through small business: government support for artisans
and craftsmen in Greece. Journal of Small Business Management, 37(1), 90-92.
Doyle, P. (2000). Value-based marketing. Journal of Strategic Marketing, 8(4), 299-311
Eckstein, H. (1975) Case Study and Theory in Political Science. In R. Gomm, M. Hammersley,
and P. Foster (eds) Case Study Method. SAGE Publications Ltd: London.
Edwards, J., & Ogilvie, S. (2012). What lessons for economic development can we draw from
the Champagne fairs? Explorations in Economic History, 49(2), 131–148.
http://doi.org/10.1016/j.eeh.2011.12.002
Eisenhardt, K.M. (1989), “Building theory from case study research”, Academy of Management
Review, Vol. 14 No. 4, pp. 532-550.
Gomm, Roger, Martyn Hammersley and Peter Foster (2000). Case Study and Generalization. Ch.
in: Gomm, Roger, Martyn Hammersley and Peter Foster (eds.), Case Study Method: Key Issues,
Key Texts. London: Sage.
794
Kulkarni, G., Kannan, P. K., & Moe, W. (2012). Using online search data to forecast new
product sales. Decision Support Systems, 52(3), 604-611.
Lijphart, Arend, “Comparative Politics and the Comparative Method,” American Political
Science Review 65(3), Cambridge: University of Cambridge Press, Sep., 1971, pp. 682-693.
Ragin, Charles C and Howard .S. Becker (red.) (1992). What Is a Case? Exploring the
Foundations of Social Inquiry. Cambridge: Cambridge University Press.
Souza, G. D. H. S. De, & Costa, A. C. S. (2013). Structures of Commercialization: Actions of
Informal Marketing from Brazilian Micro-entrepreneurs in a Street Market. Ijbcnet.Com, 2(9),
20–36. Retrieved from http://www.ijbcnet.com/2-9/IJBC-13-2902.pdf
Yin, R. (1994). Case study research: Design and methods (2nd ed.). Thousand Oaks, CA: Sage
Publishing.
795
Sustainable food consumption and public policy interventions:
Setting research agenda for South Africa
Neha Purushottami
Graduate School of Business Leadership,
University of South Africa (UNISA), South Africa
Email: purusn@unisa,ac.za
1
Introduction:
The world is becoming aware and concerned about the consequences of growing
unsustainable consumption in emerging market economies (Belz and Peattie, 2009). In
theseeconomies achieving sustainable consumption is challenging and complex due to (a)
their critical dependence oneconomic development; (b) growing overconsumption and
wasteful materialistic tendencies in emergent affluent class,(c) the prevalence of conventional
challenges of under-consumption and struggle for basic necessities, (d) history of outsourcing
of ecological costs by developed countries to these countries and (e) the presence of weaker
environmental policies and consumer protection laws (Akenji, 2014; World Economic
Forum, 2013; Schaefer and Crane 2005). Consumption of food and drink, housing, and
transportation are identified the most critical categories of unsustainable consumption (Belz
and Peattie, 2009).
Literature indicates that with growing understanding about the importance and the urgency to
address issues of unsustainable consumption, interventions are emerging from government
sector (Akenji, 2014; 2008; Schaefer and Crane 2005), business sector (Varey, 2011),
consumers (Belz and Peattie, 2009) and social institutions (Purushottam, 2016). Governments
are powerful organizations which promote sustainable consumption through public policies
initiatives and infrastructure that enables sustainable choices (Schaefer and Crane 2005). The
scope of public policy is very wide and includes rewards and penalties in form of subsidies,
taxes and regulations (Akenji, 2014; Stevens, 2010). The paper examines sustainable food
consumption and public policies interventions in emerging markets context with special
reference to South Africa.
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Research Gap and Research Problem:
From the review of related literature, it emerged that governments in emerging market
economies are facing duel challenge of under- and over-consumption. However,
conventionally, the focus of public policies in these economies has been on addressing underconsumption (Spangenberg, 2014). The rapid growth of affluence in these countries demands
governments to proactively invest in initiatives to address issues of over-consumption as well
(Belz and Peattie, 2009). This creates a difficult position for these governments as doing so
demands integration of diverse set of principles in an emerging market context (distinct than
developed countries context) without losing focus on addressing challenges of underconsumption. Similar to any other emerging market economies, South Africa has started to
address issues of over-consumption besides addressing issues of under-consumption.
However, these efforts are still at nascent stages and this necessitates further investigation of
sustainable food consumption and public policy initiatives.
Objectives of the study:
This article is written with an objective of the advancement of research through reviewing
sustainable consumption in South Africa and public policy instrumentswith respect to (a) the
distinctions, priorities, challenges, progress, opportunitiesand a way forward; (b) theoretical
domains of habitual behaviour and cultural context of sustainable consumption.
Methodology- A review based approach:
This paper is based on the review of interdisciplinary literature from the area of sustainable
consumption covering its economic, environmental and health aspects and public policies.
The paper examines the distinctiveness of sustainable food consumption in emerging market
economies with special focus on South Africa. It explores opportunities, challenges and
possible ways public policy initiatives facilitate sustainable consumption. The paper reviews
the ways government and its policies can go beyond their conventional role of regulation and
information by influencing social and cultural context of consumption (Jackson, 2005).
Results:
The review results in the emergence of research themes which proposes a coherent policy
framework and research agenda for South Africa and for emerging market context. The
policy interventions which are developed in consideration with contextual background and
current practice; which were developed considering integrative and interdependent nature of
797
food system (Reisch, Eberle and Lorek, 2013) have more chances of success. Some such
themes are:
Sustainable food consumption includes sustainable diets, nutritional value,food safety
and food waste prevention. It is observed that sustainable consumption is influenced
by contextual issues (Assadourian, 2010) and it would be interesting to explore what
are the priorities of sustainable consumption in South Africa and how they are
addressed by public policies over time? This research theme helps in understanding
the contextual priorities.
Propagation of sustainable consumption requires empowerment of consumers with
skills and knowledge to critically analyze consumption practices (Prothero et al 2011).
Therefore, researchers may identify areas where public policy instruments can
contribute empowering consumers in South Africa in this regard. Further a research
enquiry may help in understanding how trust can be built in environmental standards
through public policies (Schaefer and Crane, 2005).
In South Africa, food wastage at the household level is estimated at approximately
R21.7 billion per annum (Nahman and De Lange, 2013) and this requires intervention
at policy level. However government will need participation of other institutions like
private sector, consumer societies and other social institutions which makes it one of
the major emerging research themes.
South Africa has witnessed growth in consumption of convenience foods often with
low glycemic index, low in micronutrients, low in fiber and high in simple sugars and
salt due to less availability of cheap healthy alternatives (Nahman and De Lange,
2013). South Africa is dominated by large sector retailers and there is a need for
research to understand the impact that marketing on the food choices.A further
research on policy interventions on how to promote sustainable product sourcing in
retail can be important in addressing availability of sustainable food.
Ekins and Lemaire (2012) highlighted that sustainable consumption efforts can gain
by adopting ‘leapfrogging’ by developing countries. However, mode of the
application will depend on the country context. Therefore, how ‘leapfrogging’ can be
applied in the SouthAfrican context can be a valuable future research enquiry.
Literature indicates that South Africa like any other developing country is dominated
by younger population and social media has been identified effective on promoting
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sustainable consumption behaviour among youth (Prothero et al 2011). How public
policy can use social media in facilitating sustainable consumption can be an effective
line of research especially w.r.t. over-consumption in urban areas.
Social institutions can be helpful in changing dietary habits (Purushottam, 2016). It
would be interesting to explore possible wayspublic policies join hands with social
organizations in South Africa to facilitate process of standardization of products by
participating in the process and by educating public about it.
Integration of sustainable diet in everyday can be a challenging exercise for
consumer-citizens in developed county context (Prothero et al, 2011). There is a
possibility that this conflict is much more complex for South African consumers and
creates an interesting enquiry for the contribution of public policy instrument.
It would be interesting to examine if in a developing economy like South Africa,
possibilities for public policyto facilitate diversities of consumption options like
‘quality in limit’ for affluent groups and ‘sufficiency with quality’ for the poor classes
(Spangenberg, 2014).
Implications of the Study:
It is worthwhile to mention that as far as policy initiatives are concerned the scope of this
paper is limited to South African context. However, due to certain similarities in sustainable
consumption context w.r.t emerging market some research themes can be applied to other
emerging market economies as well.
References:
Akenji, L. (2014). Consumer scapegoatism and limits to green consumerism. Journal of
Cleaner Production, 63: 13-23.
Assadourian, E. (2010), Transforming cultures: From consumerism to sustainability. Journal
of Macromarketing, 30 (2), 186-191.
Belz, F.M.& Peattie,K. (2009). Sustainability marketing. Glasgow: JohnWiley& Sons.
Ekins, P. & Lemaire, X. (2012).Sustainable Consumption and Production for Poverty
Alleviation.United Nations Environment Programme. Retrieved July 1, 2015 from
www.unep.org/pdf/SCP_Poverty_full_final.pdf
Jackson, T. 2005. Motivating sustainable consumption. University of Surrey, [online]
Available at: <http://www. sustainablelifestyles.ac.uk/sites/default/files/motivating_sc_final.
pdf> [Accessed 2 February 2016].
799
Nahman, A. & De Lange, W. 2013. Costs of food waste along the value chain: evidence from
South Africa. [online] Available at: http://researchspace.csir.co.za/dspace/bitstream/
10204/7115/3/Nahman2_2013.pdf [Accessed 20 October 2016].
Prothero, A., Dobscha, S., Freund, J., Kilbourne, W. E., Luchs, M. G., Ozanne, L. K., &
Thøgersen, J. (2011). Sustainable consumption: Opportunities for consumer research and
public policy. Journal of Public Policy & Marketing,30, 31–38
Purushottam, N. (2016). Sustainable Consumption and Social Institutions: Setting a Research
Agenda for India (Chapter18). In A. Gbadamosi (Ed.), Handbook of Research on
Consumerism and Buying Behavior in Developing Nations (pp. 409-428). Hershey: PA.
Reisch, L., Eberle, U., & Lorek, S. (2013). Sustainable food consumption: an overview of
contemporary issues and policies. Sustainability: Science, Practice, & Policy, 9(2): 7-25.
Schaefer, A., & Crane, A. (2005). Addressing sustainability and consumption. Journal of
Macromarketing, 25(1): 76-92.
Spangenberg, J. H. (2014). Institutional change for strong sustainable consumption:
sustainable consumption and the degrowth economy. Sustainability: Science, Practice, &
Policy, 10(1), 62-77.
Stevens, C. (2010). Linking sustainable consumption and production: The government role.
Natural Resources Forum, 34(1): 16–23.
i
Graduate School of Business Leadership, University of South Africa (UNISA), South Africa
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Marketing Strategy for Emerging Markets of Medicinal and
Aromatic Plants
Pramod Chandra1, Vinay Sharma2 and Rajat Agarwal3
1,2,3
Department of Management Studies, Indian Institute of Technology, Roorkee Uttarakhand,
India 247667
1
Email: pckuniyal@rediffmail.com / 2vinayfdm@iitr.ac.in / 3rajatfdm@iitr.ac.in
Introduction:
Throughout the history the medicinal and aromatic plants (MAPs) have been used to cure and
heal the various health conditions of humans along with their livestock. And still today MAPs
form the basis for indigenous healthcare system in most of the developing countries (WHO).
Moreover, in present time about 30 percent modern drugs sold in the world market are also
derived from plant and plant component. As a result, the expanding interest in medicinal and
aromatic plants (MAPs) in the global markets is opening the opportunities for all the
stakeholders; especially for the initial most partners of the value chains the growers if
facilitated through specific and effective marketing strategy.
In the world trade of MAPs India holds the second largest position after China in the export of
the MAPs. The production and export of medicinal and aromatic plants of India is backed by
her States situated in Himalayan periphery, called Indian Himalaya Region (IHR). In IHR the
Uttarakhand, a Himalayan State, located in northwestern Himalaya region of India contributes
substantial share in the herbal legacy of India and is recognized as a treasury of valuable
medicinal and aromatic plants.
The biodiversity and flora of Uttarakhand includes 701 species (Bisht et al., 2016) of medicinal
and aromatic plants (about 40.10 percent of medicinal and aromatic plants found in IHR), of
those 31 % are native, 15.5 % are endemic, 14% are threatened elements (Dhar et al., 2000;
Bisht et al., 2016). Out of 701 species, 28 species of MAPs are categorized as Globally
801
Significant Medicinal Plants (GSMP) (Ved and Goraya, 2008; Kuniyal and Sundriyal, 2013,
Kuniyal et al., 2015) by the government of Uttarakhand with an objective of cultivation and
conservation from socioeconomic as well sustainability perspectives.
Research Gap and Research Problem:
Despite of the broad recognition for having a treasury of valuable medicinal and aromatic
plants in Uttarakhand, the medicinal and aromatic plants (MAPs) sector of Uttarakhand is
facing several challenges, which are the result of the absence of proper marketing infrastructure
and system for the trade and commercialization of MAPs specifically the marketing strategy
related to the same. As a result, the primary cultivators, harvesters and associated stakeholders
of medicinal and aromatic plants are marginalized in Uttarakhand and the vital resources of the
State have yet not achieved a strong position in the trade.
Moreover, in the absence of the proper marketing system, the MAPs of Uttarakhand are also
unlawfully traded, thus no one knows how much quantity of MAPs is traded or trading from
Uttarakhand. The unknown trade pattern of MAPs in Uttarakhand, at the same time, is also
creating serious threats for many valuable species of MAPs. Because without having the
information on the volume of the traded species the required conservational initiatives cannot
be initiated.
Objectives of the Study:
Therefore, this paper aims to highlight the role of marketing interventions in the trade and
commercialization of the medicinal and aromatic plants and demonstrates a reflexive research
based conceptual approach through which the marketing interventions could be initiated in
promoting the sustainable conservation, management and commercialization of the medicinal
and aromatic plants without compromising with the sustainability and existence of the MAPs.
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Research Methodology:
This research was conducted with the help of reflexive research methodology to know the exact
state and situation of the problem in Uttarakhand.
Data Analysis and Results:
We have conducted an extensive review of literature to identify the current scholarly
contribution in the area of trade and marketing of medicinal and aromatic plants in
Uttarakhand, followed by primary interview of some key persons related to the policy, planning
and conservation of medicinal and aromatic plants in Uttarakhand along with the interview of
the primary growers and harvesters. Further the findings of the literature have presented in the
paper based on the key conclusion of each paper in relation to trade and marketing of the
MAPs. And the interview script of some participants have also presented in the paper to
highlight the prevailing marketing issue of the MAPs sector.
This study explores the current marketing issue of the medicinal and aromatic plants sector of
Uttarakhand and offer a conceptual framework through which the sustainable conservation and
commercialization of the medicinal and aromatic plants of Uttarakhand could be initiated
without harming the biodiversity and the resources of the State.
Implications of the Study:
The emerging opportunities in the medicinal and aromatic plants sector is demanding added
commercialization of medicinal and aromatic plants, hence for the sustainability of these bioresources needs interventions from business perspectives. Therefore, this study exclusively
provide a marketing framework is applicable in the same direction for the conservation,
cultivation and management of the MAPs in the emerging market of medicinal and aromatic
plants.
803
References:
Bisht, V. K., Negi, J. S., & Bhandari, A. K. (2016). Check on Extinction of Medicinal Herbs in
Uttarakhand: No Need to Uproot. National Academy Science Letters, 1-3.
Dhar, U., Rawal, R. S., &Upreti, J. (2000). Setting priorities for conservation of medicinal
plants––a case study in the Indian Himalaya. Biological conservation, 95(1), 57-65.
Kuniyal, C. P., & Sundriyal, R. C. (2013). Conservation salvage of Cordycepssinensis
collection in the Himalayan Mountains is neglected. Ecosystem Services, 3, e40-e43.
Kuniyal, C. P., Bisht, V. K., Negi, J. S., Bhatt, V. P., Bisht, D. S., Butola, J. S., Sundriyal, R.C.
& Singh, S. K. (2015). Progress and prospect in the integrated development of medicinal and
aromatic plants (MAPs) sector in Uttarakhand, Western Himalaya. Environment, Development
and Sustainability, 17(5), 1141-1162.
Ved, D. K., & Goraya, G. S. (2008). Demand and supply of medicinal plants India (p. 216).
New Delhi, India: National Medicinal Plants Board.
World Health Organization (WHO), 2013. Traditional Medicine Strategy 2014–2023, Geneva.
804
Cognitive and Attitudinal Determinants of Consumer Heterogeneity
Influencing the Acceptance of Functional Foods in India
Rajesh P. Jawajala1 and Dr. Prafulla. Pawar2
1
Symbiosis Institute of International Business (SIIB), Affiliated to the Symbiosis International
University (SIU), Lavale, Pune.
rajesh.jawajala@siib.ac.in
Dr. Prafulla. Pawar2
2
Professor (Marketing)
Dept. of Management Sciences (PUMBA), Savitribai Phule Pune University (SPPU), Pune
mypumba@gmail.com
Brief Background and Rationale of the Study:
The “Food-Nutrition-Health-Wellbeing” paradigm has significantly changed in the last two
decades. A complex interplay of demographic, psychographic & socio-economic factors such as
rising incomes, consumer wellness trends, affluent lifestyles & desire for an improved quality of
life with higher life expectancy have influenced this paradigm. Other factors like increasing
incidences of life-style related diseases, stress & changing diet patterns & rising health care costs
have also influenced the above paradigm.
These factors have led to the development of the concept of food as medicine and medicine as
food, where food has both a nutritive as well as therapeutic function playing a central role in the
“Food-Nutrition-Health-Wellbeing” paradigm (Menrad, 2003; Roberfroid, 2000b, Hasler, 1998)
help enable prevent/delay the incidences of major diseases (Arai, 2002; European Food
Information Council, 2005).
Several global FMCG & Nutrition companies leveraging the above trends launched several
innovative foods with nutritional & therapeutic properties with health claims such as Probiotics,
805
Prebiotics, Fortified Cereals, Fortified Oils, Fortified Confectionery, and Fortified Snacks which
have witnessed the largest growth rates among the various food categories.
Definition - “Functional Food” term:
The term “functional” when applied to food means – A food, that provides an additional
physiological benefit beyond that of meeting basic nutritional needs, the concept was first
promoted in 1984 by Japanese scientists where a food category called FOSHU (Foods for
Specific Health Use) was established in 1991 to reduce the health-care costs. They are
technically defined as those foods that by virtue of the presence of physiologically-active
components, provide a health benefit beyond basic nutrition these include whole, fortified,
enriched or enhanced foods and should be consumed as part of a varied diet on a regular basis, at
effective levels (Hasler, 2000) distinguishing them from drugs, pills or capsule making them a
part of normal food consumed (Diplock et al., 1999; ILSI Europe, 2002).
Statement and Origin of the Research Problem:
The consumer acceptance of functional foods is not unconditional and is determined by a
complex interplay of a host of factors. Factors like primary health concerns, consumers‟
familiarity with the „„functional food‟‟ concept and the functional ingredients, the manner of
health effect communication, consumer demographics & psychographic variables like consumer
beliefs, perceptions, their knowledge, awareness & attitudes towards health and nutritional, their
lifestyles, their current diet patterns and health status, the health claims used in marketing of
functional foods, even the degree to which sensory properties meet customer expectations; the
price and availability of the food. (Bech-Larsen and Grunert, 2003; De Jong et al 2003; Frewer et
al., 2003) play a very critical role in the consumer acceptance of these foods, therefore
generalization of consumer characteristics is not valid.
806
Research Gap:
The main aim of this study is to investigate and analyze, how various demographic factors, like
age, gender, income & educational levels, combined with the differing levels of consumer
awareness and knowledge, consumer perceptions, beliefs, attitudes & interests about health and
nutrition, interplay and influence each other, to explain/determine the heterogeneity in consumer
preference/acceptance of functional foods across different Indian consumer segments.
Brief Overview: Indian Functional Foods & Beverages Market, Trends & Future Potential
In 2014, sales of fortified/functional foods rose by 15% to reach INR131 billion and forecasted
to reach INR 166 billion by 2019. The fortified beverages rose by 14% to reach total of INR 191
billion in 2014 and forecasted to reach INR 238 billion by 2019. Significant factors that attract
consumer‟s attention towards fortified/functional foods & beverages are the addition of nutrients
enabling to meet their daily nutritional requirements conveniently, increased availability, low
price differential between fortified/functional and regular products making the consumers to
switch from regular food, with the higher-income consumers generally ready to pay extra value
added benefits of these products.
Brief Review of Literature:
Functional Foods: Diet -Disease Relationship & Consumer Awareness, Beliefs & Attitudes
Consumer understanding, awareness and belief that nutrition plays a vital role in providing good
health & prevention of disease (IFIC, 2002) has increased due to several government, public
health and education campaigns (Childs, 1997). This has led to an increased demand for foods
which help reduce the risk of disease (Toner and Pitman, 2004) prevent, manage or treat a
condition. Most consumers today agree that eating healthfully is a better way to manage illness
than medications (Childs, 1997). The HealthFocus survey identified a “Food as Medicine”
segment of consumers aged between 35-64 years of age with a concern for long-term health,
better educated consumers (Childs and Poryzees, 1997) women, higher income groups, with
807
significantly higher beliefs in the health benefits of foods compared to the younger consumers.
The awareness of a relationship between diet and health (diet-disease relationship) coupled with
attitudes and beliefs play an important role in shaping eating behaviour (Frazao, 1999) with
attitudes being vital predictors with motivators of behaviourial change alongwith knowledge that
provides information essential for behaviourial change. Attitudes routinely studied by nutrition
surveys include belief in the relationship of diet and health, the importance of nutrition compared
with other food attributes, the importance of following specific dietary guidelines and perceived
barriers to dietary change (Frazao, 1999). Knowledge of diet-health relationships has led to
changes in dietary habits (Bhaskaran & Hardley, 2002). Beliefs about diet-disease relationship
and healthy eating vary across demographic groups with food eating choices based on the gender
of an individual (Saher et al., 2004) age, race group also influencing the beliefs & attitudes of
consumers.
Functional Foods: Gender and Age
Research shows that women as compared to men are strong believers in the health benefits of
foods (Childs & Poryzees, 1998), display a stronger purchase interest in food that helps prevent
disease (Childs & Poryzees 1997, 1998), are more reflective about food and health issues and
confident with uncritical and traditional view of eating (Beardsworth et al., 2002; Gilbert, 1997;
Teratanavat & Hooker, 2006; Verbeke & Vackier, 2004). This is perhaps because women being
the primary food shopper bear a greater responsibility for selecting, preparing food for the
household (Bech- Larsen & Scholderer, 2007). A study of adults and college students from
Belgium, France, USA and Japan, showed that the Americans generally associate food most with
health and least with pleasure, while the French group was high on food-pleasure orientation but
least on the food-health orientation (Rozin et al., 1999). In all four countries, women unlike men
showed a pattern of attitudes resembling more with the Americans, and less like the French
(Rozin et al 1999). A vital socio-demographic factor is the presence of young children in the
household (Maynard & Franklin, 2003) & the relatives‟ loss of good health influencing the food
choice decisions. With age the general health interest in food related matters increases (Saher et
al, 2004). The older age participants (> 55 years) demonstrated more awareness, switching
dietary behaviour to functional foods, were less sceptical of the manufacturer claims, making
food choices that were preventive, influenced by their perceived vulnerability to the risk of
808
chronic ailments compared to the younger individuals who choose food based on price, taste and
promotional offer & who preferred low fat products for weight loss compared to consuming high
fibre and calcium fortified foods and displayed resistance to shift to functional foods (Bhaskaran
& Hardley, 2002).
Study by (Childs & Poryzees, 1998) demonstrated that respondents with higher income &
education showed higher levels of the diet-health belief compared to those with lower income
Shepherd et al. (1996) state that positive attitudes towards eating a healthy diet are expressed by
people of all income levels, with income having a destabilising effect on food habits when there
is a decrease in income. A long-term income reduction, may lead to a greater proportion of
income being spent on food, contrastingly an increase in income does not necessarily lead to
increased expenditure on food nor improved diet quality overall.
Functional Foods: Health Claims, Trust & Communication
Healthiness being a credence attribute is not perceived directly by using the product itself but has
to be communicated (Nelson, 1970; Mixon, 1995; Oude Ophuis & van Trijp, 1995). Confidencerelated aspects strongly underlie the acceptance of functional foods (Poulsen, 1999; Verbeke,
2005) stressing a need to striking a balance between gaining the attention and trust of the
consumer (Lähteenmäki, 2004). Men and women display different interests and beliefs in
functional foods with men more interested in foods with energy boosting effects compared to
women (Saher et al, 2004).
Key Research Objectives:
With reference to the acceptance of functional foods among Indian consumers 1) To study the role, type, nature & the influence of demographic factors
2) To study, how the various demographic factors & different consumer awareness & beliefs
about health and nutrition explain/determine the heterogeneity in consumer preference and tastes.
809
3) To study the various sources of information of consumers about functional foods & the trust
enjoyed by them & their influence on the consumer
4) To study how the heterogeneity in consumer preference & demographics influence the
consumer‟s relationship between lifestyle, health & nutrition.
5) To enable the policy makers, food manufacturers and marketers to gain insights into the
behaviourial aspects of the Indian consumer
Research Methodology:
A thorough review of literature involving functional foods and its various dimensions was done
spanning atleast over a decade. A field survey using a structured questionnaire was conducted in
Pune city geographically divided into six different regions, categorized on various criteria like
location of population, in industrial clusters or pure residential clusters- upscale; working class
suburbs- middle-income localities etc.1222 completed questionnaires were selected out of total
1800 respondents surveyed. The questionnaire was divided into nine segments namely, consumer
demographics, consumer information & knowledge of nutrition and health, Consumer
Information & Knowledge of Functional Foods, Consumer Sources of Nutrition Information of
Functional Foods, Consumer Beliefs about Nutrition and Health, Consumer Health & Exercise
History, Current Consumption Habits & Purchase Patterns, Consumer Beliefs about Functional
Foods, Consumer Attitudes about Functional Foods (Buyers & Non Buyers section). Appropriate
scale testing & validation was done employing a 7-point Likert scale.
Interdisciplinary Relevance of the Study:
The major stakeholders like the food industry, consumers, the health sector, and governments
have differing but strongly interdependent interests (McConnon et al., 2002) with the trust
enjoyed by the health professionals, the consumers, government‟s legislative role, all of this
underscores the interdisciplinary relevance helping consumer‟s make informed dietary choices
essential to achieve success in the functional foods market where world‟s leading food
810
companies like Monsanto, Unilever, P&G, Nestle, Danone, etc. have invested huge resources in
health food innovations.
Originality/Value of the Study:
This is the first ever study to be conducted on Functional foods in an Indian context to
explain/determine the heterogeneity of consumer preference/acceptance of functional foods
(foods with health claims) across various demographic groups.
Tentative Expected Conclusions from the Study:
Findings of the paper tentatively show that women show greater levels of awareness &
knowledge compared to men across age groups perhaps because women bear a primary
responsibility for food selecting, purchasing & preparing food. The presence of young children
in the household, (Maynard & Franklin, 2003) an experience of relatives‟ loss of good health,
higher income and education levels also impacts/influences the diet –health belief & food
choices.
References:
Menrad, K. (2003) Market and marketing of functional food in Europe. Journal of Food
Engineering, 56, 181188 (Hasler, 1998)
Childs, N.M. 1997. “Functional Foods and the Food Industry: Consumer, Economic and Product
Development Issues.” Journal of Nutraceuticals, Functional and Medicinal Foods,1(2): 25-43
Toner, C. and S. Pitman. 2004. “Functional Foods: Educating Consumers About Foods with
Health Promoting Benefits in Today‟s Challenging Communications Environment.” Topics in
Clinical Nutrition, 19(1):71-78
Childs, N.M. and G.H. Poryzees. 1997. “Foods that Help Prevent Disease: Consumer Attitudes
and Public Policy Implications.” Journal of Consumer Marketing, 14(6):433-447
Bhaskaran, S. & Hardley, F. (2002) Buyers beliefs, attitudes and behaviour: foods with
therapeutic claims. Journal of Consumer Marketing, 19, 591606.
811
Saher, M., Arvola, A., Lindeman, M. & Lähteenmäki, L. (2004) Impressions of functional food
consumers. Appetite, 42, 7989.
Beardsworth, A., Bryman, A., Keil, T., Goode, J., Haslam, C. & Lancashire, E. (2002) Women,
men and food: the significance of gender for nutritional attitudes and choices. British Food
Journal, 104, 470491.
Poulsen, J.B. (1999) Danish consumers‟ attitudes towards functional foods. Working paper no
62, MAPP, Åarhus, Denmark.
Verbeke, W. (2005) Consumer acceptance of functional foods: sociodemographic, cognitive and
attitudinal determinants. Food Quality and Preference, 16, 4557.
Hasler CM. Functional Foods: Benefits, Concerns and Challenges – A Position Paper from the
American Council on Science and Health. Journal of Nutrition. 2002;132:3772-3781.
Bech-Larsen T, Scholderer J. Functional foods in Europe: consumer research, market
experiences and regulatory aspects. Trends Food Science & Technology 2007;18:231-234
812
Descriptor Labels On Food Packaging &
Their Impact On Consumption
Dr. Etinder Pal Singh1 and Ms.Sanchita Sabharwal2
1,2
Apeejay School of Management1
Sector-8, Institutional Area, Dwarka, New Delhi, 110078
Email: 1etinder.singh@gmail.com / 2sanchitasabharwal9@gmail.com
Introduction:
The food products we buy and consume are important to us and we are becoming more
conscious of our purchases. With the increasing consumer awareness, comes the tenacity to
consume healthier. Our study delves into the impact package labels have on consumption.
Usually there package labels can be divided into three categories, Nutritional labels containing
mandatory nutritional values as per food authority‟s guidelines, ingredient labels and the
descriptor labels such as “ real fruits, no sugar, low fat etc.”.
These descriptor labels often influence and persuade the consumers by providing prominent
space and also highlighted by the food marketers. After all, the essence of marketing is to
manipulate consumer purchase decisions either directly or indirectly through the use of productmix elements such as packaging, labeling and branding (Mutsikiwa et al., 2013).
Various studies have highlighted the impact of packaging on consumer buying behavior. Factors
like package elements, colors, shapes, sizes, and labels influence consumer to respond positively
(Zekiri, 2015). Connolly and Davidson, (1996) estimated that 73% of the purchase decisions are
made at the point of sale. The analysis of the impact of package elements on consumer's
purchase decisions, depending on the level of involvement correspond with those of theoretical
studies and that visual elements of package have relatively stronger influence on consumer‟s
purchasing behavior when they are in the level of „low involvement‟, in contrary to those who
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are in the level of „high involvement‟ category (Ahmed et al., 2014). An average supermarket
shopper can be exposed to as many as 20,000 or more products in a shopping visit that may last
less than 30 minutes and include many unplanned purchases (Keller, 2013). This is exactly
where the need for packaging arises; the right kind of packaging can create a right kind of appeal
on the store shelf. Packaging plays a pivotal role in marketing, it is often considered as the
„salesman on shelf‟ (Mutsikiwa et al., 2013). Chromatics have been known to contribute a lot to
consumer buying process, various companies use different colors to emphasize different mood,
for instance, black is used for power, blue is used for trust, red is used for energy, green is used
for organic and fresh. According to Zekiri (2015), Fiszman and Spence (2011) color has a strong
impact on buying behavior. So the colors along with other packaging elements makes the
marketing offer more eye-catching and attractive and has positive effect on consumption.
Research Gap and Research Problem:
Various studies have notably pointed the importance of package labeling and the impact it has on
buying decision of a consumer. A shift has been observed in consumer‟s focus towards labeling
and information provided on the packaging from solely the aesthetics. Silayoi and Speece (2007)
demonstrated that consumers are reading more and more labels for making their purchase
decisions and want the labels to be clear. They also suggested that the buying decision of the
product may rely on some valued information and not just solely on the product image. Labels
often act as cues for the purchase decision they help consumers spend less time while deciding
what to buy.
In this era of increasing health trends, where the world has been progressively moving towards
obesity from past 33 years, and where India ranks 3rd for the world‟s most obese people, it has
become an alarming cause of concern (The Lancet, 2014). Today, consumers have realized that
not all foods are healthy; they have begun to look for cues to help them determine whether a food
product is good for them or not (Northup, 2014). A.C. Nielsen (2015) points out the sales growth
of healthy food items have increased globally, depicting the awareness of consumers in 2 years
(2012-2014). Today, the labels have become a part of the heuristics, where in they ease the
habitual decision making process. Labels with health buzzwords prime the respondents to
believe the product is healthier, hence establishing an implicit link with those labels and health
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(Northup, 2014). In support to this study A.C. Nielsen traced the power of package labels on the
sales across the globe. Sales of Products with claims like “Natural” & “Organic” has increased
by 24% & 28% respectively in 2 years (2012-2014). Products with claim about reduced salt
content and real fruits added both grew by 7% during the research period. Products with reduced
or no fat content claims grew by 4%. With increasing sales, where labels act as health cues,
labeling chaos has also resulted in something known as „Snackwell Syndrome‟, under which
consumers have formed an impression that they can consume large portions of food products
with labels like, „ low fat‟ and „fat free‟ (Center of Science in the Public Interest, 2010) B.
Wansink and P. Chandon (2006) demonstrated consumption bias towards the low fat labels
where participants ate 28.4% more when the food was labeled as low fat than the regular label.
The study also highlighted that the overweight people tend to consume 16.7% more than the
normal weight people when they are psyched by labels such as, „low fat‟ or „fat free‟.
The research problem at hand is that how significantly the descriptor labels are impacting the
buying behavior.
Research Objectives:
The research tries to explore:
● The impact of Descriptor labels like, “Low Fat”, “Sugar free”, “All Natural”, etc. on
consumption.
● The impact of higher priced descriptor labeled food on consumption in non-primed
environment (uncontrolled).
● The impact of higher priced labeled food on consumption in primed environment
(controlled).
Research Methodology:
A total of number of 100 post graduates students were recruited from the college campus for
conducting the experiment. Convenient sampling was used for recruiting the experiment
participants. Sample lot selected is educated and will take more informed decisions when it
comes to consuming healthy.
815
Experiment design: A replica of the experience of online grocery shopping was created. The url
open with a list of various products like, bread, jam, cornflakes, yogurt, juices, etc. along with
their images and prices. For every product two images were formed one that appeared healthier
having descriptor labels like, “low fat”, “100% real fruits”, “organic”, etc. and the other image
of the identical product without these labels.
Two different sets of product images along with prices were developed. In the first set the price
remained same for both the products one with descriptor labels and one without them. In the
second set of survey, there were significant price differences between the two choices, say if
regular Vanilla ice cream costs Rs. 90, “Low Fat”, Vanilla ice cream would cost Rs. 120. The
products were identical just the labels were modified to appear healthier.
Study 1: The participant were asked to fill few questions about themselves and then they were
asked to choose one product amongst the two. They were to choose 15 products as they may
have incase they were doing online grocery shopping. In this case the prices of both the products
were identical.
Study 2: All things were similar like the above study but the prices of the healthier products were
significantly higher.
Study 3: The third set of the population was (control group) primed. The experiment started with
showing them a video (7:13 mins) on increasing obesity in our nation, before showcasing the
video, the participants were told that a memory test would be conducted in order to check their
retention of information shared in the video. The screening of the video was followed by an
online test. After this another facilitator came in the room and asked the participants to help in
the online grocery shopping (real intent). These participants were then asked to choose the
products from the set where the prices of the healthier products were significantly higher.
816
Three facilitators were appointed to conduct the experiment; it was a double blind experiment
where the facilitators were also unaware of the objective of research as well as the groups
assigned to them . This was done to eliminate any researcher bias.
Data Analysis and Results:
Study 1: It was found that when the prices of the labeled and unlabeled products were kept
similar around 80% of the participants chose the products with descriptor labels. Thereby,
indicating the strong impact of labels on consumption.
Study 2: The labeled products were priced higher than the unlabeled ones, and the responses
were recorded in an uncontrolled (non-primed) environment. It was observed that less than 50%
of the participants chose the labeled products. Remaining half of the participants chose the
unlabeled one as they were priced lower.
Study 3: The labeled products were priced higher than the unlabeled ones, and the responses
were recorded in a controlled (primed) environment. It was discovered that more than the 60% of
the participants chose descriptor labeled products, despite of them being higher priced.
Implications of the Study:
● Descriptor labels have a significant impact on consumption. They have become the
heuristics for the habitual decision making process. People directly relate these
descriptors as health cues while making their food choices.
●
In a primed environment, consumers tend to purchase the labeled products irrespective
of their higher prices. Marketers can use media to prime the consumers to help them
make healthier food choices.
●
The consumer‟s behavior changes towards the labeled products if they are priced higher,
but if prices remain same, most of the consumers tend to make healthier choices.
Marketers can use this opportunity to produce healthier products at lower prices in order
to make the world a healthier place.
817
References:
Ahmed, R., Parmar, V. and Amin, M. (2014). Impact of packaging on consumer buying
behavior, European Journal of Scientific Research ISSN: 1450-216X / 1450-202X.
B Piqueras-Fiszman and Spence C. (2011). Crossmodal correspondences in product packaging.
Assessing color–flavor correspondences for potato chips (crisps), Appetite 57 (3), 753-757.
Center of science in the public interest, (2010). Food labeling chaos, the case for reform.
Connolly, A. and Davidson, L. (1996). How does design affect decision at point of sale? Journal
of brand management, doi.10.1057/bm.1996.33, vol.4 No. 2, pp. 100-107.
Keller, K., Parameswaran, A. and Jacob, I. (2013). Strategic brand management: Building,
Measuring, and Managing Brand Equity, 4th edition, Page no. 143, ISBN: 9780132664257.
Mutsikiwa, M. and Marumbwa, J. (2013). The Impact of Aesthetics Package Design Elements on
Consumer Purchase Decisions: A Case of Locally Produced Dairy Products in Southern
Zimbabwe, IOSR, Journal of business and management, e-ISSN: 2278-487X.Volume 8, Issue 5.
Nielsen, (2015). We are what we eat, Healthy eating trends around the world.
Northup, T. (2014). Truth, Lies, and Packaging: How Food Marketing Creates a False Sense of
Health, Food Studies: An Interdisciplinary Journal, Volume 3, 2014, and ISSN 2160-1933.
Silayoi, P. and Speece, M. (2007). The importance of packaging attributes: a conjoint analysis
approach, European Journal of Marketing Vol. 41 No. 11/12, 2007 pp. 1495-1517.
The Lancet, Public Health (2013). Global, regional, and national prevalence of overweight and
obesity in children and adults during 1980–2013: a systematic analysis for the Global Burden of
Disease Study.
Wansink, B. and Chandon, P. (2006). Can “Low-Fat” Nutrition Labels Lead to Obesity?
Journal of Marketing research, Vol. XLIII (November 2006), 605–617.
Zekiri, J. and Hansani, V. (2015). The role and impact of the packaging on consumer buying
behaviour, Ecoforum, Volume 4, special issue 1.
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Reaching BoP Consumers through BoP Producers: Insights from a
Farmer Producer Company in Madhya Pradesh
Sandeep Rawat1 and Prof. Anita Basalingappa2
1
FPM Scholar, MICA, Ahmadabad
E-mail: sandeep_fpm14@micamail.in1
2
Professor (Marketing), MICA, Ahmadabad
E-mail: anita@micamail.in2
Introduction:
Base of the pyramid (BoP) as a strategy was introduced to provide innovative products and
services to billions of world poor (Prahlad & Hart, 2002; Prahalad & Hammond, 2002). Since
then, there has been a growing interest globally in this topic across the continents of Africa, Asia,
Europe and Americas (Follman, 2012). Although BoP have unserved needs for both consumers
and producers, the emphasis has largely been on the former (Hammond and Prahalad, 2004;
Karnani, 2007; Viswanathan et al., 2009). While we have many examples of how organizations
focus on BoP consumers through innovative products and services, how the same innovations
can help BoP producers hardly exist in the literature.
The potential of producers at BoP is largely undermined and has been taken up in very few
scholarly works (Karnani, 2007; Vishvanathan et al., 2009; London et al., 2010; McKague &
Siddiquee, 2014). One reason for it could be the constraints faced by small and marginal
producers which act as a barrier for their efficient collaboration with other actors. London et al.,
(2010) had classified these constraints faced by BoP producers as productivity and transactional
constraints which inhibit local value creation and value captured by BoP producers.
Since its inception, the debate on BoP has largely revolved around poor and marginal consumers
across the globe. Interestingly, India has been the centre of attraction for majority of the BoP
studies. Recent developments in India have shown the immense potential of producer groups and
their enterprises in fostering rural entrepreneurship among BoP producers (Singh, 2008; Trebbin
& Hassler, 2012; Abraham, 2015; Trebbin, 2016). Large number of government organizations,
819
NGO’s and development agencies are supporting the BoP producers’ ventures (PRADHAN,
2007; SFAC, 2016; Nayak, 2014). This subject is attracting scholars from variety of disciplines
to address the issues of producers, their organizations and how to make them more efficient
(Bijman et al., 2016; Shah, 2016; Singh, 2016).
Producer organizations and their role in minimizing BoP producers’ constraints have been
widely recommended in literature (Rondot & Collion, 2001; Bosc et al., 2002; Shiferaw et al.,
2006; Bernard & Spielman, 2009). Although these producer organizations are being recognized
by policy makers, scholars and practioners as viable solution to address small scale producers’
constraints, the understanding of how they are functioning, their impact and potential is still
limited. Also our understanding of these ventures and their role in sourcing from primary
producers at BoP is very limited (London et al., 2010).
Farmer producer companies (FPCs) in India are one such development which holds the potential
to extend the debate of creating a BoP producer ecosystem. They are one of the producer
organization format (POF) developed by Indian government to address the issues of small and
marginal producers (Abraham, 2016). These are the organizations primarily owned by their
primary producers and operated by professional management staff. They are also known as new
generation cooperatives (Singh, 2008) but primarily termed as producer companies as per the
Companies Act, 1956 amended in 2003 (Mahajan,2014). Their basic objective is to aggregate the
small and marginal primary producers into groups and magnify their collective strength which is
difficult otherwise. While producer companies primarily are engaged in agriculture and allied
activities, many of them are also involved in handicrafts and other such nonfarm based activities.
The legal structure of these farmer owned enterprises provide them with the freedom of
operation and choosing the business type with minimum government regulations unlike the
traditional cooperatives (Singh & Singh,2012).
More than 85% of total landholders in India have less than 2 ha land per household (Misra,
2008). Majority of them are the BoP producers with small production capacity which make it
unviable to transact on their own in markets. Thus the organizational support is important to
aggregate their efforts through collective actions. Along with this, the changing neo-liberal
820
tendencies of government towards more liberal market have opened the markets for big players
in India. These changes have led to ease of collaboration between the big ventures and primary
producers (Trebbin & Hassler, 2012). The debate around these producer companies becomes
even more important with these developments as these FPC’s can act as catalysts to develop the
capabilities of BoP producers in harnessing the local and external demand.
This study presents a case of one such farmer producer company (FPC) in Madhya Pradesh
which aggregates the collective efforts of its small and marginal members and connects them
with factor and output markets. This case brings the issues and challenges of this FPC and how it
has built the strong network of BoP producers which caters to the demand of local BoP
consumers. It attempts to connect the current case with the broader discourse of BoP marketing
from a producers’ perspective. It also aims to focus on harnessing the potential of BoP producer
and bring forward the challenges of enterprises while dealing these small and marginal
producers. The contribution of this study is at two levels. First, it brings forward producer side
debate of the BoP which requires attention to understand the challenges faced by enterprises
dealing with BoP producers. Second, it attempts to bring a unique case of rural enterprise,
primarily owned and governed by its primary producers where ownership towards the enterprise
is collective rather individualistic as commonly seen most private enterprises. This brings out the
new avenue of opportunities for creating BoP enterprises and shows the newer set of challenges
to cater the BoP consumers. How collective action can harness and tackle the BoP producers’
constraints is another contribution of this study. It brings out the insights of how a BoP producer
enterprise has created a competitive advantage for it through creating a network of BoP
producers closer to the BoP consumer markets.
Methodology:
Case study approach was used to collect data with a single case design. It was more appropriate
for the current study because it brings the uniqueness of the case, represents a critical case to test
a well established theory and is revelatory in nature (Yin, 2003). All these factors make single
case design appropriate for the study.
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Primary data was collected from a producer owned organization primarily engaging BoP
producers in the rural areas of Madhya Pradesh. Qualitative data was collected through in-depth
interviews and observations with primary producers, CEO, other management staff, village
supervisors, Board members, traders, retailers and final consumers. This data is corroborated
with a comprehensive secondary research on the scholarly literature available on farmer producer
companies (FPCs) from the peer reviewed journals, books, magazine articles, government
websites, conference proceedings and the policy level data available in relevant reports to justify
how a FPC can be a potential institution in future to promote and develop BoP producers and
their capabilities.
Findings and Conclusion:
The current study shows how a network of BoP producers and their organization have utilized
their rural reach in reaching the local BoP consumers. The positional advantage of BoP
producers by being located in the remote rural areas which is also closer to their BoP consumer
market has given them a competitive edge over others. This has been effectively handled by a
bridging enterprise under a cooperative model called as farmer producer company (FPC). The
current debate around BoP is majorly seen from a consumer’s perspective as constraints of BoP
producers make them unviable to deal with markets. This study extends the debate on BoP from
the producers’ perspective and how the new generation producer organizations can act as a
catalyst to build a BoP producer ecosystem. The study concludes that such progressive
organizations of primary producers can act as a bridging enterprise between the external markets
and BoP producers to effectively reach and cater BoP consumers. This can help in reducing the
BoP producers constraints listed in the literature. Secondary literature holds that majority of
these farmer producer companies are still at their nascent stage with only few in their formidable
stage are able to catalyze the BoP producer’s capabilities. They require external support from
other actors like government, NGO’s and private promoters to establish themselves in the longer
run as their role in harnessing the potential of BoP producers is immense. Future studies can be
done to study the viability, scale and market orientation of these producer organizations.
822
References:
Abraham, M. (2015). New Cooperativism: A Study of Emerging Producer Organisations in
India. Copenhagen Business School, Institute for International Økonomi og
VirksomhedsledelseDepartment of International Economics and Management.
Hammond AL, Prahalad CK. Selling to the poor. For Pol 2004;142:30–7.
Karnani A.Misfortune at the bottom of the pyramid. Greener Manage Int 2007;51:99–110.
London, T., Anupindi, R., & Sheth, S. (2010). Creating mutual value: Lessons learned from
ventures serving base of the pyramid producers. Journal of Business Research, 63(6), 582-594.
Mahajan, V. Farmers’ Producer Companies. State of India’s Livelihoods Report 2014.
Prahalad CK, Hammond A. Serving the world's poor, profitably. Harvard Bus Rev 2002;80
(9):48–57.
Prahalad CK, Hart SL. The fortune at the bottom of the pyramid. Strategy Bus 2002;26:2– 14.
Rondot, P., & Collion, M. H. J. (2001). Agricultural producer organizations: their contribution
to rural capacity building and poverty reduction. Washington, DC: Rural Development
Department, World Bank.
Singh, S., & Singh, T. (2012). Producer companies in India: a study of organisation and
performance. Draft report submitted to MoA, GoI. IEG, Delhi.
Trebbin, A., & Hassler, M. (2012). Farmers' producer companies in India: a new concept for
collective action?. Environment and Planning A, 44(2), 411-427.
Trebbin, A. (2016). Producer Companies and Modern Retail in India—Current State and Future
Potentials of Interaction. In Organised Retailing and Agri-Business (pp. 277-288). Springer
India.
Viswanathan M, Sridharan S, Ritchie R. Understanding consumption and entrepreneurship in
subsistence marketplaces. J of Bus Res in press. doi:10.1016/j.jbusres.2009.02.023.
823
A comprehensive framework for CSR, Experiential value and
Branding Consequences: An Exploratory Study
Ankur Jha1, Prof. S.B.Dash2
1
Doctoral Student, Indian Institute of Management, Lucknow
Email Id: fpm16002@iiml.ac.in
2
Associate Professor Indian Institute of Management, Lucknow
Introduction:
The Corporate Social Responsibility epitomize a high-profile notion that has strategic
significance to the corporate world in the today’s highly competitive environment (Luo &
Bhattacharya, 2006). The essence of Corporate Social Responsibility has been area of interest for
the researchers for more than half a century, but has received significant interest from both
practitioners and academia in last two decades. The unique feature of CSR activities is that,
unlike other marketing mix, the propositions offered by the corporation or firm benefits not only
transactional participants, the customer and company, but also the society at large by addressing
focal social issues (Bhattacharya & Sen, 2004). Brown and Dacin (1997) have proposed that the
corporate CSR associations affect the cognitive aspect of customer, which includes preference,
inference and belief towards a company, which in turn influence the overall evaluation of
company. Further, the notion of CSR can be viewed in terms of signaling theory which impact
institutional legitimacy, also the justification of the effect of CSR on consumer response
(Bhattacharya & Sen, 2004) and market value (Luo & Bhattacharya, 2006) has been established
in the study. Consequently, The impact of CSR in building the brand equity has been by Hoeffler
& Keller, 2002 (Peloza & Shang, 2011) have mentioned that a self-oriented value created
through CSR activity could act as source of differentiation for the customer.
Research Gap and Research Problem:
The multiple frameworks has been proposed in the literature to conceptualize framework, few of
the most cited are (Brown & Dacin, 1997; Carroll, 1979; Elkington, 1994). The dimension
824
suggest in these framework varies, the focus of Brown & Dacin has been on Society, whereas
Elkington suggested triple bottom line focused on environment (planet) and Carroll includes
stakeholders point of view. Consequently, the operationalization of CSR varies in the literature.
Multiple authors have taken different dimensions, for example (He & Li, 2010) have considered
social and environmental dimensions of CSR in there study, while (Hsu, 2011) has included
employee and (Hui‐ Ming Deanna Wang, 2010) have mentioned governance as additional
dimensions. Similarly, there is variation in the measurement of CSR across industry, (He & Li,
2010) has considered only Social & environmental dimension while studying service industry,
whereas to study same industry (Hsu, 2011) has included employee also as a dimension.
Consequently, while studying the dimensions for manufacturing, (Yaowalak Poolthong &
Rujirutana Mandhachitara, 2009) & (Pai, Lai, Chiu, & Yang, 2013) have stressed on local
community as an important stakeholder of CSR initiatives. It can be stated that the extant
literature doesn’t provide the exhaustive and consistent dimensions of CSR. Therefore it
provides an opportunity to operationalize the CSR dimensions for the holistic understanding of
construct.
The impact of CSR on consumer related consequence (He & Li, 2010) and brand related
consequence (Hsu, 2011) have been established. Consequently there have been multiple
evidence in literature about positive consequence on firm perception and performance in
literature. Further, (Currás-Pérez, Bigné-Alcañiz, & Alvarado-Herrera, 2009; Peter Magnusson,
Stanford A. Westjohn, & Srdan Zdravkovic, 2015; Singh, 2015) have proposed that the impact of
CSR on brand attitude is mediated by self-identity of customer, whereas (Hur, Kim, & Woo,
2013; Matthew Tingchi Liu, Ipkin Anthony Wong, Guicheng Shi, Rongwei Chu, & James L.
Brock, 2014) have proposed the direct impact of CSR on branding consequences. Therefore the
mechanism by which CSR dimension affect the branding consequences is not consistent.
In extant literature the impact of CSR dimensions on customer satisfaction (He & Li, 2010; Hsu,
2011) & customer loyalty (Matthew Tingchi Liu et al., 2014) has been proposed, but the value
proposition leading to these consequences are not described. Even though, (Peloza & Shang,
2011) have used (Holbrook, 2006) value model to signify relationship between CSR activities
and intrinsic and extrinsic values. The consumption value derived by consumer through CSR
perception which leads to positive brand outcome has not been conceptualized. The integration
825
of consumption value with CSR dimensions is important as consumption value determines the
choice for consumer. The attempt through this paper is to provide an exhaustive list of CSR
dimensions and its consequences.
Objective of Study:
Even though plethora research has been done on impact of CSR on attitudinal and behavioral
aspect of consumer behavior, the dimension of CSR considered in these studies are not
consistent. This niche area provides a new research opportunity, not only to operationalize
dimension of CSR perception, but also to examine CSR derived consumption value and its
consequences on brand, delineated most exhaustedly by consumer based brand equity (CBBE)
(Ravi Pappu, Pascale G. Quester, & Ray W. Cooksey, 2005). However, as per the extant
literature no prior research has comprehensively and conclusively examined the relationship
through a well-defined empirical and conceptual framework that explains relationship between
CSR perception to consumption value and Consumer based brand equity.
Through our framework we have conceptualized the process of consumer based brand equity
formation from CSR dimension as a sequential process, with the dimension of CSR perception
resulting in the consumption value, which subsequently has effect on the various dimension of
CBBE. The consumption value construct reflects the three unique values: Social Value,
Emotional Value & Altruistic Value. The proposed conceptual framework is theoretically
support by Mean End Chain (MEC) Theory, Hierarchy of effect framework, The psychological
egoism theory and Brand Equity Theory.
We next explore and provide the literature support to each of the proposed relationship in the
proposed framework. It is important to note that the although consumption value has been
identified as the higher order construct, individual relationship between CSR dimension and
social value, emotional value and altruistic value have also been explored.
The aim of this paper is to develop a framework with threefold objective:
1. Explore and propose different dimensions of CSR perception
2. Propose the relationship between various dimension of CSR perception and consumption
value
3. Understand the effect of CSR on the branding consequences
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Research Methodology:
We have done the comprehensive literature review on the topic and content analysis of literature
across various measures and consequences of CSR. The content analysis has been done to define
the research objectives and an integrative framework has been proposed defining the relationship
between the dimension of CSR perception and consumption value, leading to branding
consequences .The database of EBSCO, Ecolit, Jstor & Emerald have been use to get the
literature of the leading marketing journal along with leading journal of the domain, Journal of
Business Ethics. The literature review along with theoretical definitions have been used for the
justification of model.
Data Analysis and Result:
The paper is an attempt to provide the holistic dimension of CSR and consequent consumption
value leading to branding consequences. We proposed that the CSR perception is multidimensional in nature, consequently measure, nature and operationalization of dimension of CSR
perception across industries. The paper provides holistic approach which enables the
classification of dimensions of CSR perception as Social, Environmental, Governance, Internal
and external Stakeholders. The evidence from extant literature suggests that the dimensions of
CSR perception is not directly affecting the branding consequences but several values such as
satisfaction and self-identity accounts for the relationship between dimension of CSR perception
and branding consequences. Therefore we propose a theoretical framework that describes the
impact of CSR dimensions on consumption value, operationalized as Social value, Emotional
Value and Altruistic Value, which mediates the impacts of dimension of CSR perception on
dimension of Consumer based brand equity. The theoretical underpinnings to justify the relation
between dimensions of CSR perception and value proposition has also been explored through the
paper. The biophilia hypothesis explains the relation of dimensions of CSR perception with
Social value, Cost signaling theory with emotional value and theory warm glow with altruistic
value.
Implication
Though there has been plethora of research on impact of CSR on brand consequence and
customer consequences, the dimensions of CSR considered in these studies are not consistent.
827
The research provides an exhaustive list of CSR dimensions.
The impact of CSR on
consumption value has been proposed, which acts as a linkage between the CSR and brand
consequence. The whole framework can be empirically validated across industry and culture to
gain more insight on the topic. The marketing managers will get an idea through this research
how CSR creates a point of difference for the company by providing additional consumption
value to customer. It provides the marketing managers a motivation to enhance meaning full
CSR activities of the firm which impacts the consumption value.
References:
Bhattacharya, C. B., & Sen, S. (2004). Doing better at doing good: When, why, and how
consumers respond to corporate social initiatives. California Management Review, 47(1),
9–24.
Brown, T. J., & Dacin, P. A. (1997). The company and the product: Corporate associations and
consumer product responses. The Journal of Marketing, 68–84.
Carroll, A. B. (1991). The pyramid of corporate social responsibility: Toward the moral
management of organizational stakeholders. Business Horizons, 34(4), 39–48.
https://doi.org/10.1016/0007-6813(91)90005-G
Garriga, E., & Melé, D. (2004). Corporate social responsibility theories: Mapping the territory.
Journal of Business Ethics, 53(1–2), 51–71.
He, H., & Li, Y. (2010). CSR and Service Brand: The Mediating Effect of Brand Identification
and Moderating Effect of Service Quality. Journal of Business Ethics, 100(4), 673–688.
https://doi.org/10.1007/s10551-010-0703-y
Hoeffler, S., & Keller, K. L. (2002). Building Brand Equity through Corporate Societal
Marketing. Journal of Public Policy & Marketing, 21(1), 78–89.
Holbrook, M. B. (2006). Consumption experience, customer value, and subjective personal
introspection: An illustrative photographic essay. Journal of Business Research, 59(6),
714–725. https://doi.org/10.1016/j.jbusres.2006.01.008
828
Hsu, K.-T. (2011). The Advertising Effects of Corporate Social Responsibility on Corporate
Reputation and Brand Equity: Evidence from the Life Insurance Industry in Taiwan.
Journal of Business Ethics, 109(2), 189–201. https://doi.org/10.1007/s10551-011-1118-0
Luo, X., & Bhattacharya, C. . (2006). Corporate Social Responsibility, Customer Satisfaction,
and Market Value. Journal of Marketing, 70(4), 1–18.
https://doi.org/10.1509/jmkg.70.4.1
Peloza, J., & Shang, J. (2011). How can corporate social responsibility activities create value for
stakeholders? A systematic review. Journal of the Academy of Marketing Science, 39(1),
117–135. https://doi.org/10.1007/s11747-010-0213-6
Porter, M. E., & Kramer, M. R. (2002). The competitive advantage of corporate philanthropy.
Harvard Business Review, 80(12), 56–68.
Ravi Pappu, Pascale G. Quester, & Ray W. Cooksey. (2005). Consumer‐ based brand equity:
improving the measurement – empirical evidence. Journal of Product & Brand
Management, 14(3), 143–154. https://doi.org/10.1108/10610420510601012
829