Consumer Purchase Intention Analysis

This management report is abased critique of an article which is known as “consumer purchase intention for organic personal care product”. The shows that the overall summary of this management report which is based on the environmental awareness towards the Impact on US consumers activities actually there is huge no selling of this organic personal care product which is extensively focusing to the marketing strategy but lacking care in customer behaviour. To avoid lacking customer behaviour author has based his research on TPB which also known as theory of plan behaviour. And also the entire report based on research of US consumer buying behaviour, attitude, values, norms and intention of purchasing past experience overall data analysis and so on. Here in this management report I have put few my effort to critique this article.
Introduction:
“Consumer purchase intention for organic personal care products” is an article written by Hee Yeon Kim and fae-Eun chung. Both authors’ are from department of consumer science, from the Ohio State University from Columbus, Ohio, USA. Author’s has raised the awareness of environmental protection which is also known as “green consumerism”. (Moisander, 2007)
The article is based on growing huge amount of US consumers’ activities that has been impacted by the variety of green products which has gained high popularity in a US market (organic trade association, 2006). And problem with highly growing organic personal care industry is that they are focusing on marketing strategy instead of having consumer behaviour and it is says that organic product industry will sink sooner if this industry will not understand focus on consumer behaviour. And this article is mainly based on organic personal care products which are covered outside of the US market. And author’s says that the purpose of this article is to research by using “theory of planned behaviour” in order to investigate the customer behaviour and values, norms and to know the previous experience of consumer purpose while buying organic personal care products. With a response group of 207 online members and with many ignorance was used for study the relationship in the variables. And through this result it was found that awareness of environment were positively manipulate with this industry and it was also founded that the relationship between previous experience of having buying purpose consumer and behavioural control was surrendered pretty good on the TBP model. It says that with this research retailer can have a great marketing strategy by advertising its product is safe and gives beautiful look and can offer consumer the affordable prices in order to develop the buying purpose of customer through organic personal care product. And these researches give US consumer approaches analysis towards the intention of buying purposes of consumer queries through organic personal care product which had manipulate consumers attitude. This article of research has been elaborated to TBP by investigating the relationship between previous experience of having buying purpose consumer and behavioural control. (Kim,H ;chung,f, 2012)
Conformance with principal of scientific investigation:
Purposiveness: Here Michael K. Green (1998, p.165) states that “the purposiveness of company consist in conceiving of a goal and plan of action for realizing it, and then carrying this plan into action”. Here in article the researcher has used theory of planned behaviour in order to analysis the consumer buying behaviour through organic personal care product which will also help in achieving the intention of consumer buying behaviour past experience and consumer attitude towards the company and consumer values and norms. In this article the researcher has choose such types objectives in order to achieve their goals therefore it can be said that it is purposiveness.

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Rigor: Mentzer, John T (2008, p.72-77) states that “rigor is the constant examination of whether research can actually support and justify the claims it makes”. And it uses appropriate theories and methods which will regret the final part of something that research did not exposed. This means in this article the researcher has used theory of plan behaviour (TPB) analysis to research customer buying behaviour, past experience values and norms and then over all online participation was recruited in which 207 team members were participated which has helped to evaluate for the multiple regression relationship among the variables and then consumers attitude towards buying organic personal care product which has positive influence overall consumer buying shows that the research hence research is rigor.
Testability: According to Binder, Robert V (1994, p.15) ” the testability terrain for object -oriented development is mapped in order to find shorter and cheaper paths to high reliability”. He says that includes 6 factors which are representation, implementation, built-in test, the test suite, test support environment and process capability. This mean the researchers has developed hypothesis testing sample in order to perform the examination of relationship between consumer attitude and consumer values towards buying behaviour through organic shampoo and body lotion. Therefore the research can be said testability.
Replicability: Clive Seale (2012) states that “replicability is the extinct to which a re-study is made by feasible by the provision of sufficient information about research procedure in the first study”. He says that if the research meets the quality the closeness will be placed in the fact of determining. This means while testing sample consumer attitude and consumer values towards buying behaviour through organic shampoo and body lotion. The evaluation data shows that most of the time similarities results were found in attitude and intention between organic shampoo and body lotion hence, it can be said that the research is replicable.
Precision and confidence: Quiroz, Jorge (2012) states that “confidence interval is usually constructed to assess the level of precision in the method validation studies”. It shown that the finding this research may not be suitable for other organic product which shows in confidence in statistics and no closeness found during the evaluation this may not be precision and confidence in my opinion.
.Objectivity : Business Wire(2006, New York) states that ” objectivity is used for real time processing of complex information, documents and process management, scientific computing and complex defense and security application”. And it also says that objectivity also increase the solution based on Data base such as government, telecommunications, internet infrastructure, manufacturing, bio technology, financial services, scientific and IT market. That means in the hypothesis sample which has stated that consumer values and norms and past experience intention in buying towards the organic product were positively influenced which means although price of product un affordable there lots of appealing towards this organic personal care industry hence the research could said it is objective.
Generalizability: Lee, Allen S (2003, p.221) states that ” it is major concern to those who do and use research”. It means that the research shows analysis of two products are not applicable to other product categories of organic personal care product and it is also says that there may be needs of further study with diversity of product types to achieve highest generalizability.
Parsimony: Maj, S P; Veal, D. (2010, p.3) state that ” parsimony is used for defining structural knowledge with in field of research”. Hence the research is structural and well presented with simple explanation therefore it is parsimony.
Aims and Rationale
According to bryman and bell (2007) “statement should be open and needs to be resulted which should highlighted to be accomplished and then it should reflect the aspiration and expectation of the research topic which will not need to be numbered”. He says that after making aims there should be the objectives that needs to achieved aims and objectives of research should be specific task that will accomplish the goal of the project which should be analytical to accomplish that aims. And it should be feasible and focused which means to be addressed the more urgent project to be resulted.
Objectives:
Here in this article author has made his objective based on examine the US consumer buying behaviour towards the organic personal care product based on theory of plan behaviour which means to analysis the consumer buying behaviours, attitude, values, and norms from the past experience which are being highlighted by the researcher of this article in order accomplish the research aim. That means objectives of research are clearly mentioned above.
Questions:
Researchers have made their questions targeting to organic shampoos and body lotions. And then question were related to the consumer values, TPB constructs, and consumer past experience which were measured in seven scale. Whereas demographic and socioeconomics were also related. Such as health consciousness, environmental consciousness, appearances consciousness, attitude, subjective norms, perceived behaviour control, past experience and purchase intention with in online survey only few members could have participated and many of them have regression during question and answer because of price being unaffordable. This means has been clearly stated.
Hypothesis:
Hypothesis was made on the basis of sample of product such as organic body lotion and shampoo in order to evaluate the regression of differences between consumer attitude and consumer intention in between those two products. Data of hypothesis found to be little complicated and bias of organic product.
Rationalise:
Emly R. (2013) states that “Rationale is done before starting the research project. And the rationale is the reason for researcher conducting their research in the first place.”
The research is based on the awareness of US consumers through the environmental consciousness and here what the different authors say is “US consumers’ activities had an impact on environmental protection. (Kangun et al, 1991).as the green product has been popular in US market the more consumer focused on greener product. (Nimse et al, 2007). Although the green product has earned so much popularity in US market there is only focused on marketing strategy instead of focusing to consumer behaviour so to understand the consumer behaviour the research done on the basis of consumer attitude, intention, values and norms of buying behaviour towards the organic personal care product. Research clarified that if the organic product will not understand consumer behaviour soon the company will be in lose. So the research is based on how the organic product is going to be sustained with in the US market. ((Kim,H ;chung,f, 2012)
Design and methodology:
Design:
AQR (2013) states that “The importance of research project that includes factors such qualitative approaches or the sample that is targeted in order to interview or observed, numbers of interviewed, research location, questioners outline, and task and material to be introduced”.
That means the research is design on the basis developing some questioner based on sample of organic shampoos and body lotions targeted to consumers that uses the organic personal care product were interviewed within US. Out of 202 were responded where 53.5% of them were females and others remaining were 44.3 age male some of them argued their view regarding on environmental consciousness and other respondent positively. And investigation of questioners includes question such as consumers value, norms, TBP constructs and consumer past experience. Such types question was interviewed through the source online panel. Which means it is clearly research clearly designed.
Methodology:
Tutor India (2010) states that “it is the data collecting system for research which may be collected for either theoretical or practical research. Research methodology important factor could be validity of research data”. It also says that research methodology is followed by the research design which maid is experimental or theoretical.
This mean the researchers conducted online investigation with 207 group of member in California which means multiple regression were used for analysing the data of relationship among the variables. In this research shows verification in each and every term of analysis of the article therefore there is no question regarding through this article. Therefore it can be said the research is methodologically clear at all.
Limitation:
USC library (2013) states that “the data analyses which are directly being impacted by characteristics of design and methodology is limitation of the study which controls generalizability and utility of finding”. It is says that the data will be chosen to design the study and method which are used for creating internal and external validity.”
This mean the research has evaluate no such applicable analysis comparing to other organic product according to the data and it says that to have greater generalizability organic personal care product should have other varieties of product.
Finding:
AQR(2013) states that ” The main conclusion of the research project which suggest the project to be indicates or usually refers to the result somewhat the recommendation drawn from”.
The result of analysis which indicate over all environmental consciousness and appearance consciousness are being positively influenced attitude through the organic personal care product which means according to the data analysis in the research consumer relationship of attitude and intention found to be similar between two product. Hence finding is clear.
Conclusion:
Over all it can be concluded the research is based on Impact of US consumer activities towards the environmental awareness. Here author has done research in understanding US consumer buying behaviour towards the organic personal care product. Hence over all consumer buying behaviours towards environmental consciousness, appear consciousness and health consciousness are seems to be positively influenced. Consumption organic product care product can be seen that of consumed more by females then male And data analysis shows that evaluation of regression in relation of attitude and intention seems to be similar between two products. Therefore the author seems to be having a successful research of organic personal care Product Company. And also the author have suggested the retailer can have great marketing strategy by focusing on more of ecology of beauty, product safety and by providing affordable prices attracting to the customer towards the buying behaviour through organic personal care product.
 

Purchase Behaviour Analysis: Perfumes

Ajmal Perfumes is a family owned business, based Dubai, United Arab Emirates. It was founded by the Haji Ajmal Ali in the early 1950’s, in India and has grown from a modest trading house into a multimillion dollar corporate entity. Through 60 years of experience it acquired rich heritage and know how in the intricate art of perfumery and carved a niche for itself in the perfume industry as an innovator in perfume making and a pioneer in the marketing of perfume products to a global clientele (Ajmalperfume.com, 2011).

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It is a corporate entity with a vast portfolio of over 300 of the finest and most captivating fragrances and has over 140 exclusive retail outlets across the GCC. Ajmal also has a presence on the international front, currently exporting their exquisite range of products to 30 countries across the world and exclusive presence through select Duty Free locations and Airlines (Ajmalperfume.com, 2011).
(Source: http://www.ajmalperfume.com/our_philosophy-pcident-1)
Statement of the problem
Due to current market conditions, which is highly competitive and dynamically changing, especially in the location of this particular store, Ajmal Perfumes is concerned about the situation around it. Hence this study aims to outline the attributes influencing purchase behaviour Ajmal Perfumes customers.
Objective of the Study
The main objective of this study is concerned in outlining the factors which influence the buying behavior of Ajmal Perfumes customers in their retail store located in Murshid Bazaar, Deira, Dubai, UAE.
Scope and Limitation of the Study
Main limitation of this study was the privacy issue, as the store where data collection was held provided limited access to its customer base and information. Hence the study did not covered the demographics of the respondents, which if used could bring a change in the final results in our opinion.
Also due to limited resources and lack of time the research was limited only to the branch of Murshid Bazaar located in Deira and its results cannot show the situation in other branches of Ajmal Perfumes in UAE.
Significance of the Study
The study of consumers buying behaviour as such is an important aspect, as consumers are the main factor of any successful business. It was observed that the importance of predicting the attributes influencing the consumer purchasing behaviour in retail outlets is important.
This particular study explores the different aspects that have impact on consumers buying behaviour in the retail outlet of Ajmal Perfumes. The results of which can help to take according actions against weak sides of the business, understand and implement the necessary attributes to increase the satisfaction of customers of Ajmal Perfumes.
Definition of Terms
Confidence level. A percentage or decimal value that tells how confident a researcher can be about being correct (Zikmund, 2003).
Descriptive research. A research designed to describe characteristics of a population or a phenomenon (Zikmund, 2003).
Likert scale. A measure of attitudes designed to allow respondents to indicate how strongly they agree or disagree with carefully constructed statements that range from very positive to very negative toward an attitudinal object (Zikmund, 2003).
Population. A group of entities sharing some common set of characteristics (Zikmund, 2003).
Research instrument. A data collection form such as questionnaire or other measuring device (Zikmund, 2003).
Theory. A coherent set of general propositions used to explain the apparent relationships among certain observed phenomena (Zikmund, 2003).
Variable. Anything that may assume different numerical or categorical values (Zikmund, 2003).
Review of Related Literature
Literature review gives a clear display of the related research and or the work which is already done by someone in the similar area of research. This chapter outlines the theories which would help in understanding buying behavior of customers by focusing on the factors influencing it.
Theoretical Literature
The knowledge of consumer shopping behaviour is an important aspect in developing an effective and successful business. Past researches and theories in consumer behaviour compared to the theoretical and empirical work on brand choice behaviour, suggested that consumers are using shopping strategies rather than brand strategies (Darden and Howell, 1987).
Defining shopping behaviour is difficult, because it is a complex and multidimensional concept with several variables. Although the concept shopping orientation is described by researchers from various perspectives, certain major variables are repeated in the different descriptions (Prasad and Aryasri, 2011; Nielsen, 2011). The definitions of shopping orientation reflect a view of shopping as a complex personal, economic, social and recreational phenomenon (Darden and Howell, 1987; Shim and Kotsiopulos, 1993). The behaviour of shoppers differs according to the place where they are shopping and their involvement level with the act of shopping (Berman and Evans, 2005).
Cardoso and Pinto (2010) examined hedonic and utilitarian shopping motivations among Portuguese young adult consumers and identifies seven shopping dimensions: pleasure and gratification shopping, idea shopping, social shopping, role shopping, value shopping, achievement shopping and efficiency related shopping.
Related Studies
Review of the related literature has shown that different researches have stated that customer behavior is influenced by many factors including store image, brand preferences, their budget and etc. Rhee and Bell (2002) stated that shoppers typically have a primary affiliation to a “main store” that captures the majority of their purchases. Taher et al. (1996) and Sirohi et al. (1998) emphasise that it is important for retailers to systematically seek information of the retail patronage experience and then plan to build store loyalty based on augmented services, including their financial implications. Research conducted processing of store attributes by means of which consumers decide which will be their primary store. It is empirically examined that retail store attributes affect store choice and purchases (Leszczyc and Timmermans, 1997).
Store choice and patronage studies have focused on shoppers’ tendency to concentrate on the same store. The existing models share a set of common variables to predict consumer buying behaviour and patronage behaviour. In this section, those previously established patronage models are briefly reviewed, and then the important constructs are compared and discussed to build a conceptual foundation of the study. The first comprehensive model to illustrate the structural relationships among influencing variables of store choice behaviour was introduced by Monroe and Guiltinan (1975). In their preliminary model of store choice, Monroe and Guiltinan (1975) proposed that consumers store patronage behaviour in changing context is explained by sequential effects of different constructs: shoppers characteristics, strategies for planning and budgeting, importance of store attributes and perception of stores. Finally, the researcher recommended separation of store perceptions and attributes importance, because of the relative endurance and generality of the store perception compared to the importance of store attributes. They additionally suggested the importance of experience with a store in the formation of store choice strategies (Laaksonen, 1993; Monroe and Guiltinan, 1975).
Monroe and Guiltinan’s (1975) retail patronage model was refined by Darden and Howell (1987) who emphasized the importance of enduring and stable shopping orientation determining a shoppers store choice. Darden et al. (1980) developed the patronage model of consumer behavior, which gave a comprehensive picture of patronage behaviour. Terminal values, lifestyles, social class, and family were antecedents to shopping orientations. These antecedents with media habits and instrumental values also affected store attributes importance and the evoked store set. The second part of the model was triggered by stimuli that set needs queue in motion and started the information search that led to the evoked store sort. The evoked store set then influenced store attribute importance leading to patronage intentions and patronage behaviour.
Schematic Diagram
The following diagram shows that product attribute is independent variable, where the purchase behaviour is dependent variable.
Attribute
Purchase behavior
Synthesis
When the employees of an organization are facing stressors situations than this will be affecting their job involvement and pushing the organization to the lower level of the productivity. The job involvement is linked to the importance of the work in individual’s routine life, which means that if one is giving importance to his/her work certainly he/she is being loyal to his/her work as well as to the organization itself.
Effects of employee stress on the job involvement according to the researcher and theorist in the review of related literature has given the picture that stress is affecting the job involvement that causes low efficiency, low productivity, low interest in working, lack of concern for the colleagues and loss of the responsibility, which is slowly pushing organization to the track of loss.
Research Methodology
Research methodology is a discussion within the body of a research report of the research design, data collection methods, sampling techniques, fieldwork procedures, and data analysis efforts (Zikmund, 2003).
Research Design
Research design is a master plan specifying the methods and procedures for collecting and analyzing the needed information. It is a framework or blueprint that plans the action for the research project. The objectives of the study determined during the early stages of the research are included in the design to ensure that the information collected is appropriate for solving the problem. The researcher must also specify the sources of information, the research method or technique (survey or experiment), the sampling methodology, and the schedule and cost of the research (Zikmund, 2003).
This particular study was based on descriptive research design, focused on describing the characteristics of customer attributes on purchasing behaviour. It used both primary data and secondary data. After the data was gathered, it was coded (Table 2 and 3, Appendix, Page 8) summarized and conclusions were made according to the final results of the study.
Respondent of the Study
The population for this study was the customers from one of the retail outlets of Ajmal Perfumes mentioned above. For data collection purposes, the intercept technique was used on population elements which had purchased items from the shop and leaving it at a day of data collection.
Data was collected using a questionnaire and 64 customers were surveyed, where 14 customers refused to take a part in the survey. Out of those 64 questionnaires 53 were valid, 11 respondents did not completed the questionnaire.
Research Instrument
In order to determine the factors affecting buying behavior of customers, the researcher used a questionnaire with questions in prearranged order and Likert scale. The questionnaires were given to the customers of Ajmal Perfumes Murshid Bazaar branch located in Deira, Dubai.
Validity of the Research Instrument
Validity is the accuracy of a measure or the extent to which a score truthfully represents a concept (Zikmund, 2010). Since the researcher has used a questionnaire which has already been used by proper scientific research study (References, Page 6) the survey did not required a validation. But the questionnaire content has been examined for reliability before the actual survey process and was found usable.
Data Collection Procedure
The data for this study was collected through primary and secondary sources. The primary data for this research design was gathered by distributing questionnaires among the customers of Ajmal Perfumes Murshid Bazaar branch located in Deira, Dubai. The secondary sources of data were theoretical books, research articles, and related research studies.
Statistical Tool Analysis
The study used statistics in order to analyze the gathered data by using the percentage in order to determine the magnitude of the responses to the questionnaire. The data was coded (Table 2 and 3, Appendix, Page 10) and the appropriate data analytic techniques were used to find out the attributes of the purchasing behavior of store’s customers.
Descriptive study is undertaken for the purpose to determine and be able to describe the characteristics of the variables of the interest in a situation (Uma Sekaran, 2006).
Analysis and Interpretation of data
From Table 1 (Appendix, Page 8) and Figure 1 (Appendix, Page 8) which illustrates the outcomes of the study, we can see that the overall results of the study were neutral in general. There was no specific peak in any of the attributes given in the questionnaire.
The means for the question 2, question 1, and question 3 with attributes of low price of the products, advertisement of production, and convenient location of the store had the highest means in between 3.32 to 3.21 from overall results.
The means for the question 7, question 9, question 4, and question 5 with attributes of credit facility for purchasing our production, recognition of our brand, wide assortments availability and promotional offers by our store were the follow up with the means in between 3.04 to 3.00 from the overall results.
The means for the question 10, question 8, and question 6 with attributes of trust on our brand and our production, attractive image of the store, and easy return policy were the lowest with the means in between 2.92 to 2.53 from the overall results.
Findings, Conclusions and Recommendations
The results of this study shows that the customers rate the attributes almost equally, as the results show the neutral position in almost all the questions, with a small lead in the question 2, question 1 and question 3 accordingly.
Conclusions
According to the results of the study, we can state that the store’s consumers buying behaviour is mostly influenced by the attributes like low price, advertisement and convenient location of the retail outlet of Ajmal Perfumes.
Recommendations
The recommendations out of this particular study for the managers which concerned at discovering the buying behaviour of consumers would be the following. It is suggested that organise retailers should exercise caution in serving the needs, wants and preferences of potential and existing consumers in order to acquire and retain.
The result of the present study will help managers streamline their thoughts to the factors affecting apparel buying behaviour of the consumers before marketing their offerings through organized retail outlets, because the attributes affecting the buying behaviour still remains unknown in most of the cases.
References
Ajmal Perfumes, Company Profile. Web, 2011 .
Berman B, Evans J (2005). Retail Management: A Strategic Approach, Pearson Education, Asia, Singapore.
Cardoso PR, Pinto SC. Hedonic and utilitarian shopping motivations among Portuguese young adult consumers, Intl journal of retail, 2010.
Darden WR, Howell RD. Socialization effects of retail work experience on shopping orientations, J. Acad., 1987. Mark.
Leszczyc Peter TLP, Timmermans HJ. Store Switching Behaviour, Marketing Letters, 1997.
Monroe KB, Guiltinan JP. A path analytic exploration of retail store patronage influences. Journal of Cons, 1975.
Nielsen AC. India’s affluent consumers prefer larger pack sizes to combat inflation, 2011. http://in.nielsen.com/news/20111010.shtml.
Prasad Ch. JS, Aryasri AR. Effect of shopper attributes on retail format choice behaviour for food and grocery retailing in India, Intl journal of retail, 2011.
Prasad Y. Ramakrishna. A study on attributes influencing the purchasing behaviour of apparel consumers in organized outlets. African Journal of Business Management Vol.6 (45), 2012.
Rhee H, Bell DR. The inter store mobility of supermarket shoppers, Intl journal of retail, 2002.
Taher A, Leigh TW, French WA. Augmented retail services: the lifetime value of affection, Intl Journal of Bus. Res, 1996.
Uma Sekaran. Research Methods for Business, 4th Edition. John Wiley & Sons Inc, New York, 2003.
William G. Zikmund, Barry J. Babin, Jon C. Carr, Mitch Griffin. Business Research Methods, 8th Edition. South Western Centage Learning, 2010. ISBN-13: 978-1-4390-8070-2.
William G. Zikmund. Business Research Methods, 7th Edition. South Western Educational Publishing, Canada, 2003. ISBN-13: 978-8131500293
 

Factors Affecting Customer Purchase Decisions in Restaurants

Introduction

The concept of buyers’ decision has received much attention from consumers, representatives, and sellers in the recent past. Consumers have to make the right purchase decision depending on the nature of the goods and the needs they have to satisfy. Various factors such as personal attributes, economic, culture, psychological marketing mix, functional and economic factors. The nature of goods and services plays an essential role in determining the behavior and action of buyers throughout the purchase process. However, despite the difference like products, the steps of purchasing are standards and they apply in the buying process. Moreover, the phases include problem identification, searching information, evaluating alternatives, purchasing decisions and post-purchase behavior (Frasquet, Mollá, & Ruiz, 2015) However, the steps do not apply uniformly across all products and to enhance understanding the buying behavior involved in three items will be considered.

                                                Category One

Soft drinks are fast foods that are needed to serve a short term, and thus it does not require much information search or evaluation of alternatives. Many soft drink brands are routine commodities that are known to consumers. A buyer is aware of the various brands of soft drinks and is loyal to one depending on taste and preference. For example, consumers are particular when it comes to Coke and Pepsi and does not require any background search to determine which item to buy. Therefore, in purchasing the soft drink, I do not involve many pre-purchase activities since only a choice depending on personal taste and preference needs to be made in this category(Lay-Yee, Kok-Siew, & Yin-Fah, 2013). In making the purchase decision, I did not take much time comparing prices or in serving for other information regarding quality and meeting customer expectation. I am conversant with the type of soft drink I consume, and thus I just paid the correct amount in the vending machine. Subsequently, I am used to consuming favorite beverages, the taste has not changed and it has been working well for me in the past, hence, I did not carry out any post-purchase activities regarding expectation, quality and meeting specifications.

                                                  Category Two

Buying dinner in a nice restaurant requires preparation since it has to meet the expectation of friends. For example, it is essential to evaluate among alternative restaurants regarding interior décor, space, price of food and drinks, classification, review status, and location of the restaurant. The choice of a restaurant will depend on the purpose of dinner with a friend. Accordingly, if it is a business meeting we might need a quiet environment in which we can facilitate decisions, but in my case, it was a graduation preparation event and thus we chose Sweetgrass restaurant, great food, good background music, and fantastic atmosphere that could meet the mood of the people. Sweetgrass is located in Biloxi, Mississippi, and it is easily accessible and met the needs of all of the participants. In making the purchase decision, I compared the prices of various restaurants in the area and settled on the one that maximized the value of the team that was organizing the graduation ceremony. The motivations and belief of the consumers were core in making the purchase decisions (Mirabi, Akbariyeh, & Tahmasebifard, 2015). Subsequently, the satisfaction of my friends was core, I later asked them about their perception of the restaurant regarding the quality of food, and services offered. The aim was to establish whether they received the value for their money to guide in making future purchase decisions’ found that they were excited as the experience surpassed their expectations.

                                                  Category Three

A high-end fridge is a sensitive gadget since it has to meet the need of the users regarding durability, functionality, and longevity. As a result, I made a consultation with third parties regarding the favorable brand in the market. It is recommended to seek advice from third parties and thus read a lot of product review from affiliate marketers’ blogs. I used the marketing research information to compare different brands of the refrigerator before I settled on the best one that met my specifications to avoid purchasing a refrigerator that did not meet my required specifications or one that had bad reviews. Accordingly, when making the actual purchase, I scrutinized all the details to make sure that it matched the description I read on product reviews (Jang, Prasad, & Ratchford, 2012). Moreover, I also checked for warranties and guarantees to ensure that I was paying for the right commodity and that its quality and safety is assured. In the post-purchase activity, I closely monitored the functionality of the refrigerator to detect any deviation from descriptions and expectations. However, the refrigerator functioned properly, and I ended recommending the brand. The final decision and purchase was the KitchenAid KRMF706EBS, 36 Inch Wide 25.8 Cu. Ft. Multi-Door Refrigerator with In-Door-Ice System and Platinum Interior Design, priced at $ 3,394.30.

                                                      Conclusion

The factors affecting purchase decision differ depending on the nature of goods or services being consumed. Personal factors such as taste and preferences affect the purchase food such as soft drinks. On the other hand, psychological attributes and economic factors affect the decision to seek services in restaurants. Accordingly, people require a serene environment that aligns to the theme and atmosphere being discussed by the team members. Moreover, the buying of durable commodities requires extensive market research to ensure that the good has the right features to serve the intended purpose. It is important to consider the various phases of decision making to ensure that the correct item is selected and to guide future purchases.

References

Frasquet, M., Mollá, A., & Ruiz, E. (2015). Identifying patterns in channel usage across the search, purchase and post-sales stages of shopping. Electronic Commerce Research and Applications, 14(6), 654-665.

Jang, S., Prasad, A., & Ratchford, B. T. (2012). How consumers use product reviews in the purchase decision process. Marketing Letters, 23(3), 825-838.

Lay-Yee, K. L., Kok-Siew, H., & Yin-Fah, B. C. (2013). Factors affecting smartphone purchase decision among Malaysian generation Y. International Journal of Asian Social Science, 3(12), 2426-2440.

Mirabi, V., Akbariyeh, H., & Tahmasebifard, H. (2015). A study of factors affecting customers purchase intention — Journal of Multidisciplinary Engineering Science and Technology (JMEST), 2(1).5

 

Family Decision Making Purchase of Vehicle

1.0 Introduction.
Interviewing 3 family to identify the decision maker in the family. The decision maker of a family is important. The way the decision made during a buying process involves of few factors such as information, purchasing ability and quality of product. Decision makers do make decision based of the price , product, promotions and place the product and service available.

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The way the decision maker makes the decision can affect the way the family members to purchase goods. This is because the behaviour and attitude to purchase become the example for family members as guide. The memory of from external influences the individual habit and beliefs. This can create the culture of consumption in a country. Decision makers are the purchaser who will provide the financial towards purchasing items. The decision maker will search for information before purchasing and relate the purchase to be beneficial for family members.
Family (A) purchase of a vehicle.
The decision maker of this purchase in Family A, is made under the father of the family. The father as the decision maker is the influence of the family. The car which was bought by Family A is a Honda City. The father who made the decision, relates that the purchase of this car is beneficial for the family and worth the price. The reason to this decision is, father belief that the car is big and can give comfort to the family if they are taking a vacation.
The case shows that the family’s decision maker is making a decision base on belief and perception of the product. The product identity has given the decision maker a positive affirmation towards the company brand.
The father is the decision maker in this purchase because, the paying amount is made by the father. Although the decision maker makes the purchase, before the purchasing the individual do seek information before purchase. The search of information is together with his elder son and sales person, who actually accompanied the purchaser towards the vehicle at the Honda car showroom. The information search is basic towards the purchasing price, the post purchase of the vehicle, the time period of car processing, the insurance and colour of selections by the Honda company.
Family (B) purchase of family groceries.
The purchase of food and home supply in Family B is made under the mother and brother of this family. The decision made from the mother of this family is towards the benefits of foods and appliances to be purchase for use at home. The nutrients factors and cost of food supply will be determined by the mother who does the groceries shopping at the supermarket.
Information gathered from this mother of the family will determine the final purchase of the supply. However the brother played the role of giving income to the Family B. Therefore the purchase of food supply in family is also from the elder brother who provides the income.
The factors from promotion of food supply and income will change the perception of mother in family to purchase the food. Shopping market like Tesco Ipoh which produces the promotions and Tesco brands will divert the mother of Family B in regarding the income to choose and buy the Tesco brands product. Example of product such as paper rolls, detergents and necessary goods. The factor that affected the decision making is from the promotions provided by the Tesco Choice and income.
The location of the department store also is convenient for this family B , who lives nearby. Therefore purchasing goods and food supply from place has become a decision towards the family groceries .
Family (C) purchase of Insurance.
The insurance plan for the Family C is made purchase under the decision of the father and mother. The parent of this Family C made the purchase of the insurance for this family base of few consideration. The consideration of family protection of financial assist of the insurance. The decision is made with assist of specialized sales person towards the different plans available. The decision was made under the perception of safety.
The plan bought of this Family C is the third party insurance for the vehicle for emergency purposes. The plan and price to purchase this insurance was reasonable due the perception and exposure of the importance of issuing insurance from socially.
Therefore the purchase was made. Factors that affected this family towards the decision making was the promotional ,price and perception of social recommendation. The ability for the family purchase the insurance plan is flexible and promising towards the family.
1.1 Income affects the decision making.
Product, Price ,Promotion and place can affect the decision made in the family. The product innovations with reasonable price do trigger the consumer interest to purchase. Family will then consider with information from the market place during the decision making process. Finally making the final purchase base of the income available from the family to support the decision.
The income also become the factor to affect the family decision making process. The purchase of vehicle of in Family A is strongly affected by the family income. The capability to purchase with final decision was made by the father. Family B who also affected by income to purchase goods and home appliance base of income. The mother as housewife who depending on his son to support the living of family in order to purchase the goods. Finally the purchase of insurance for vehicle in Family C.
Income will affect the final decision of purchasing even though the price ,promotion and product is attractive for the family. Therefore the income earn by family can change the behaviour of the family to purchase goods and service.
1.2 Product, price ,promotions and place as influence to purchase.
1.2.1 Product.
The family who made decision towards the purchase are influence by thius factor. The product innovation and creditability. The purchaser is more attracted towards the innovation of product with the ability to purchase from income. For example the Honda car and Tesco choice brands in Family A & B.
1.2.2 Price
The reasonable price of Honda car comparing to a Proton Inspira. The price is more attractive purchasing the Honda with the creditability of the company and brand. Therefore the Family A was influenced by the price factor. The price of goods sold from the Tesco choice was reasonable in according with income of Family B toward home appliance and food supply. Therefore the price has influence the family to make decision.
1.2.3 Promotion.
The promotional of goods especially of the department store of Tesco choice have influence the Family B to purchase goods and being brand loyal to the product. The sales that created by company give opportunity for the family to finance their income and give the consumer the comfort to keep selecting the brand of the company. For example in Family B purchasing the goods from Tesco department store.
1.2.4 Place.
The location of organization can influence the consumer to make the decision. The location which is strategic can give the consumer the access to the business easily. For example Family C Who purchase the insurance . The insurance company are located near to the banking of this family. Therefore the processing and enquiries are more easily for this Family C.
The department store Tesco, which located at a strategic point between Medan Ipoh and Ipoh garden, has given the opportunity for Family B to choose the company products and promotions.
1.3 Decision makers influence towards family.
The decision maker who made the decision towards purchasing goods can affect the family decision making process. The decision maker is a major role because the final purchase are made under their authority.
The ability to search for information and gathering them will become a example for their children. Comparing the products from brand to brand and selecting the choice of product can influence the family members in demand for goods and services.
The Family A , who experience the post purchase will allow the children to understand that post purchase is part of a purchasing process. These behaviours can affect to educate the younger consumers to be knowledge able towards consumption needs from the market. The family’s decision maker have indirectly showed examples and probably become a memory for the family member to understand the purchasing behaviour and condition of products and services from the market place. Therefore the behaviour of consumption in family is careful towards purchasing. The perception and belief of consuming a product in market place will be learnt from family members.
1.4 Conclusion
Consumption needs are different from family to family. The way the family purchases are unique. Information and accessibility to purchase are important for family. The decision maker is a major role because the final purchase are made under their authority. Decision makers do make their decision base of the factors from product quality, price, promotions and place to access the product.
The influence the decision maker in family will educate and provide the example for the family members. The behaviour of consumption in family will be influenced by the decision makers. The ability to search information, comparing and contrasting the product and services and finally purchasing the item.
Question 4.
Friends and society opinion on products and services are always one of the factor influencing individual buying behaviour, comment on how Facebook enhance the impact from friends and society towards buying behaviour.
2. 0 Introduction.
Facebook is a social network from the internet. It is one of a facility for users to connect with friends and develop a society from the internet world. The Facebook allows users to be expose to a few factors that can influence an individual consumption behaviour.This is because of the opinions and comments from Facebooks friends and society can change the individual perception to purchase a product initially.
The usage of Facebook which become a important usage in this millennium will impact consumers. This is because Facebook do not only provide a connection for friends and society to connect together, but also to business entrepreneurs to advertise their products and service using this facility. Therefore the communication from business to audience are wide in Facebook. The individual will be expose to the business advertisements.
2.1 Friends and Society impact towards individual buying behaviour.
The friends in the society is a part of the influence impact towards an individual in a buying behaviour. The factors to this mostly come from the belief and perception of friends which give affirmation towards the product an individual wishes to buy. Friends with similar interest towards the product can affect the product of a company. The belief and perception as a factor in the social is crucial. Therefore the product features are important towards the consumer. The society consist of the expert and novice consumer. The expert consumer are the consumer who are knowledgeable towards the particular product and services. Therefore this mean that, this category of consumer are consider the tester of products and services before the novice. The impact happen when the novice seeks the information from peers. Thus this acts as the influence towards the interested individual.
The example of purchasing the soft drinks. The novice user in a social enviroment is interested in purchasing the soft drink of few selections, but with consideration, the search of information from the peers happen. The expert user as the peers can be a user of the product which suggest the novice user to which class of product to purchase. Therefore the individual make the purchase base of this social influence factor. The impact is positive and negative impact. With the negative reviews will change the decision made by the individual. Whereas the positive will persuade the individual to purchase.
Emotional consumers.
The impact of emotion towards consumer can affect the consumers rationality to consume a product and service. Therefore consumers are not always rational because they are driven by their emotions. Environment and persuasion can affect the consumer to make a decision. Friends and society is one of the influences which can affect a potential purchaser to make a decision to purchase other than the information available from the product.
2.2 Perception exposure through Facebook
Facebook the world famous social network is one of the influence towards a consumer purchasing behaviour. This is because , the usage of Facebook have allow consumers to share their experience of particular product or services among their friends. The experiences from users who have tried the product may experience a good or negative experience. Therefore may allow other friends to notice the particular brand or product as a critic of precaution for other users.
Base on the ability of the social network of Facebook which allow user to share their thoughts. It has allow the tester to voice out. Novice user will develop a belief and perception towards the particular brand or product. The novice user may purchase those product base of the belief developed and experience shared by experience users. These is the external influence on the consumer’s purchasing behaviour. Therefore the purchasing behaviour is influenced by the usage of Facebook. The exposure of Facebook with the information shared through different users and friends in this society will create the consumer to be knowledgeable towards the particular product and service on the market.
Among of various purchasing behaviour such as, contrasting and comparing, information search, and post purchase of product will be learnt and practiced by the consumer.
Example of how consumer shares their perception to other potential consumers.
ALL about Ipoh.jpg
Diagram: Consumer Andrew Chin trying to advise other users to avoid base of experience.
2.3 Facebook as a business tool.
The usage of Facebook is not only the influence factor toward an individual belief system and perception but acted a tool for business owner to sell and network their services and product. Information will be shared and given out to subscribers of the account. Certain groups and social friends may own business related accounts. Therefore, the business owner have opportunity to market their product and service using this internet facility.
The business owner will use the facility and provide information to the potential users who have subscribed to their group. The information will be given out from the business owner to their potential consumer. Consumer will then be gathering the information before they make a decision and finally towards the purchasing of the product or service. An example of this activity is the advertising of the company. The data not just will be reaching to selected group but almost everyone who uses this internet facility.
Advertising ability from the Facebook, will give the consumer the information they seek. Some of the information will be needed some are newer information which consumers do not know. Therefore, the consumer will have the memory towards the product and services intended for sale.
Example of business organization , uses the Facebook facility to reach the consumer.
 
2.4 Change of attitude towards purchasing behaviour.
The Facebook usage can change the attitude to purchase a good and service in a consumer. The habit and memory shared among other users and organization will allow the individual to purchase using the Internet. Purchasing from the internet is a way to buy and shop for consumers.
Consumer will divert the habit to go to the retail stores and begin to purchase directly from the recommendations of organization with their business webpage, with accredited merchants. Therefore the habitual form of going to retail will be limited. Organization have intelligently market the product towards the potential consumers.
Consumer will be expose to organization brand and knowledgeable towards the product the organization have produced to supply for consumers. The merchandised sold to consumer this way will allow the consumer to experience a different purchasing behaviour thus, the post purchasing of merchandize from a webpage are more legal with the paper works. Comparing towards purchasing from a retail store, the sales person may not be attending to job at different hours of time. The conflict of merchandise from organization and consumer will be limited from the purchasing behaviour.
 
2.5 Consumer’s memory impact from Facebook.
Although purchasing from the internet as an option, consumer also do purchase from regular store. The purchase process which consist of encoding , strorage and retrieval of memory before a purchase is made is within the consumer. The consumer who often expose to the updates of the information may have stored the memory of information given and proceeds to purchase the merchandise . The usage of the memory as information will assist the consumer to make a decision. A purchase will take place due to the decision made during encoding the information given.
The habit and attitude of consumer will adapt towards how the consumer perception and experience as a memory to purchase goods. The memory can turn into a long term memory for the consumer.
3.0 Conclusion.
Exposure to information can change the decision make by an individual. The positive or negative review towards a product can influence the consumer to either purchase and not. The negative review may not only make the purchaser to not purchase but is bad for business. The users of Facebook are more expose to free information provided by business owners individually through Facebook. It is very efficient.
The Facebook can impact and change the consumer purchasing behaviour. The regular purchasing behaviour from the store can change and persuade the individual to experience the internet purchase. Facebook as a tool for business is beneficial. The user of Facebook can be knowledge able consumers and create healthy consumption behaviour in the society.
 

Driving factors of Consumer Purchase Intention in Shopping Mobile Apps

Abstract

As mobile application rises, it raises concerns towards how the new digital context will be studied. However, existing literatures on factors that affect m-commerce purchase have created a false dichotomy between the external environment (e-servicescape) and internal responses (consumer behavior). Therefore, this paper is synthesizing the two pathways of study to determine the factors influencing purchase intention within retail shopping apps. E-servicescape factors such as layout and functionality and aesthetic appeal, as well as consumer behavior factors such as hedonic and utilitarian value have been argued to positively affect purchase intention. Therefore, this contribution is aimed for academics and marketers to consider a more wholesome perspective to explore the factors driving a purchase intention within a shopping app.

Introduction

Mobile applications or ‘apps’ are software programs that are installed in a mobile device to display an identity of a brand (Kumar et al., 2018). As the numbers of app users have increased significantly, scholars realize the need for its study, especially in the mobile shopping app context. Several fields have explored the use of apps by either its environmental elements (e-servicescapes) or its consumer behavior. Therefore, a conceptual question arises on the possibility of exploring the factors that encompass both internal and external factors to drive purchase intentions within shopping apps. This contribution will not only extend theories to a new digital context of shopping apps, but also by synthetizing and integrating them into a wholesome model. This paper will discuss and compare the literature studies and explore the significant factors that shares the same dependent variable of purchase intention.

Literature Review

Past research on mobile applications

Kannan & Li (2017) developed a framework for digital marketing and its touch-points in the marketing process, in which mobile phones are inherently becoming ‘smaller’ and ‘personal’. Hence, future research should explore how these technologies can build consumer loyalty and consumption in this specific context (Kannan & Li, 2017). Only few studies have identified the key factors that influence app adoption behavior that have significant implication for marketers (Kannan & Li, 2017). Several studies have examined mobile apps, in which they either discuss them on an element and situational context (servicescapes) or on an individual context (consumer behavior).

E-Servicescapes

Ballantyne & Nilsson (2017) consider how the servicescape would be interpreted in new digital settings, as some attributes still hold up symbolically to describe digital virtual spaces for interaction and value creation. Therefore, the e-servicescape model suggests environmental factors to exist that influence customers’ perception in digital services: aesthetic appeal, layout and functionality and financial security (Harris & Goode, 2010). The e-servicescape model suggests that these factors should establish trust to the service, which eventually leads to purchase intentions in an online environment (Fusaro et al., 2002).

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Firstly, aesthetic appeals refers for the customer interface elements in digital context which elicits perceptions of fun and excitement to their customer (Hopkins, 2009). When consumers perceive the aesthetic appeal positively, their perceptions towards the e-service quality (Montoya-Weiss et al., 2003) and satisfaction (Szymanski & Hise, 2000) will be stronger. Layout and functionality also influence the trustworthiness of an e-commerce platform. Similar to the classical model, layout is utilized to facilitate service provision, minimize confusion and provide convenience to the users (Hopkins, 2009). A study by These are aspects of the servicescape that explicitly or implicitly communicate about the app to users (Hopkins et al., 2009). Therefore, an optimal mix between aesthetic value and a coherent layout can lead to purchase intention towards an app.

Lastly, the last e-service variable is online financial security, which refers to the extent in which consumers perceive the payment and policies to be secure and safe. Studies have argued that perceived security is critical in an online exchange (Szymanski & Hise, 2000).

Consumer Behavior in Apps

In the context of apps and e-servicescapes, many studies have explored the antecedent in the perspective of consumer behavior. According to Parker & Wang (2016), factors including previous experience in shopping influences decision-making in online apps. There is a higher tendency to shop using m-app if consumers have prior experience with the brand or the product. (Hsiao, Chang & Tang, 2016).

Several studies suggest that perceived value and motivation, such hedonic and utilitarian, drives customer’s intention to purchase on a mobile app (Parker &Wang, 2016; Hsu & Lin, 2015). Hedonic motivation, such as social and gratification drives the motivation to purchase in mobile apps, such as pleasure from purchasing the product (Hsu & Lin, 2015). On the other hand, utilitarian value proposes that consumer’s is motivated by the need of efficiency and convenience to purchase at m-apps (Parker & Wang, 2016).

Studies have used different mediator variables in order to establish their factors to the purchase behavior of apps. Firstly, it is argued these perceived value and habitual behavior will result in a certain attitude towards the app (Hsu & Lin, 2015). Attitude is the positive or negative feelings of an individual to perform the target behavior, which is the tendency of purchase made within the app (Kim, Yoon & Han, 2016).

On the other hand, Kim, Wang & Malthouse (2015) argues that stickiness of an app influences purchase behavior. Stickiness refers to the repeated use of the app and the relational concepts such as trust, commitment and loyalty, which will positively influence purchase tendencies to consumers. (Kim et al., 2015; Harris & Goode, 2007; Hsu & Lin, 2016). Satisfaction is also an arguable variable towards buying behavior of app users (Hsiao et al, 2016; Hsu & Lin, 2015; Kim et al. 2016). It is posited that satisfaction from an app is a positive enjoyment that can influence user consumption activity choices (Kim, Kim & Watcher, 2013). 

Ultimately, it is identifiable by various studies in the context of servicescapes and consumer behavior are aimed to examine the dependent variable of customer’s purchase intentions and loyalty towards the app. (Harris & Goode, 2010; Hopkins et al. 2009; Hsu & Lin, 2016).

Theoretical Development

The literatures discussed have introduced many factors that may influence the purchase intentions in apps. The classical model of servicescape by Bitner (1992) exhibits the environmental dimensions, such as ambience, function and signs, as well as the internal responses made by the customers. However, the literatures discussed seemed to have created two separate pathways to study the antecedent of customer purchase intention. The aim of this paper aims to fill this gap, to summarize and integrate the antecedent factors in both aspects of e-servicescape and consumer behavior.

In order to develop this concept, a comparative literature study was made in order to observe which variable are more significant towards the purchase intention of apps. Therefore, only significant variables across studies are constructed in order to create a coherent and wholesome model. The reason why e-servicescape and consumer behavior can be integrated is due to the overlapping of the theories, as it has the same dependent variable of purchase intention.

As the studies are compared, there are prevalent factors within both contexts that ultimately influences the purchase intentions. Aesthetic appeal is a dominant and consistent factor across all of the e-servicescapes studies (Harris & Goode, 2010; Hopkins et al., 2009; Kumar et al., 2018). Therefore, there is an implication that the aesthetic appeal of an app may influence purchase intention. In addition, there is a noteworthy discussion on layout and functionality within the two e-servicescape (Harris & Goode, 2010; Hopkins et al., 2009). Thus, the layout and functionality of an app may also be a significant direct factor towards purchase intention and will be included in this study.

Furthermore, in the context of consumer behavior, the most significant factors are hedonic and utilitarian value, as they encompass significant components argued in different studies. Hedonic is repeatedly discussed as values and motivation that are subjective aimed for pleasure of use (Hsu & Lin, 2016; Kim et al, 2015; Hsiao et al., 2016; Parker & Wang., 2016), emotional value (Hsiao et al., 2016) and entertainment (Kim et al., 2016) within an app. On the other hand, utilitarian value and motivation towards an app is also significantly based on rational consumer behavior (Hsu & Lin, 2016; Kim et al, 2015; Hsiao et al., 2016; Parker & Wang., 2016), performance, good price (Hsiao et al., 2016), and perceived usefulness (Hsiao et al., 2016; Kim et al., 2016).

Hedonic and utilitarian values dimension is important in predicting outcomes such as purchase intention. Depending on the purchase context, both values will interchange to become a primary driver to user affect. Modern digital products and services such as apps work for multiple purpose because they contain hedonic and utilitarian components (Hsiao et al., 2016). However, each construct cannot be integrated because both are equally important and independently influence app usage and purchase (Kim et al., 2014). As some studies have mediating variables in their proposed model (i.e.) attitude, their arguments do not highlight the significance of its mediating variable but rather the independent variable. Therefore, this conceptual model will not carry any mediating variable to create a concise proposition.

Conceptual Model and Propositions

Based on the conceptual development, the study is able to outline that major factors that influence the consumer’s purchase intention in a mobile shopping app; utilitarian value, hedonic value, aesthetic appeal and layout and functionality. Therefore, four propositions will elaborate on how each of the factors will ultimately influence purchase intention in a shopping app.

Proposition 1: Utilitarian value influences purchase intention

Customer value is an important predictor of customer purchase decision based on the individual’s experience and interaction with a product or service (Hsu & Lin, 2016). Firstly, Utilitarian values are beliefs that focus on increasing a user’s task performance (Hsu & Lin, 2016). According to motivation theory, utility represent an extrinsic motivation, which emphasizes on performing a behavior to achieve specific goals/rewards (Hsiao et al., 2013). Models such as the Technology Acceptance Model (TAM) along with its studies suggest that high utilitarian values will increase the adoption of the technology (Kim et al., 2013). Hence, it can be assumed that if the shopping app can achieve a specific goal or improve their task performance, it will influence their purchase intention within the app. Parker & Wang (2016) suggests that in an m-commerce context, efficiency (saving time obtaining product information the cost to travel to shop is an important motivator for purchase.

Hsiao & Chen (2016), a study on purchase intention on gaming apps indicate that perceived performance/quality values such as access flexibility influence purchase intention. This can be applied to the context of shopping apps as the goal of such apps is to provide the ability to shop ‘on the go’. Consequently, when consumer view shopping apps to be more convenient and cost effective, they will develop a more positive attitude towards buying using the app (Hsu & Lin, 2016). Utilitarian value such perceived cost also played an important role towards purchase intention. If user perceive the product to be in good price, it will increase their positive attitude to purchase intention (Hsiao & Chen, 2016).

Proposition 2: Hedonic value influences purchase intention

Hedonic are the intrinsic values that focus on increasing a user’s pleasure experiences and satisfaction from performing a certain behavior (Hsu & Lin, 2016). The TAM model illustrate the hedonic influence as perceived enjoyment, which is the degree user experiences fun and enjoyment while using the app (Kim et al., 2013). Another study has also identified hedonic motivational factors to have a positive relationship with attitude and purchase intention (Hsiao et al., 2015; Kim et al., 2013).

Parker & Wang (2016) indicated the dimensions of hedonic values that occur during the purchase on m-commerce apps such as gratification shopping (seeking good feelings on their shopping experiences), social shopping (influences from interpersonal relationships) and idea shopping (shop and browse products for information collection of new trends and fashion). Hsiao & Cen’s (2016) study on mobile game apps suggests that hedonic values such as rewards which have an influence on price has a strong effect to purchase intention. Therefore, this can be applied to shopping apps gratify shoppers using points and promotion that can influence their perceived costs and price will influence their purchase behavior. Ultimately, hedonic ultimately drives repurchase and intention to use products or services (Parker & Wang, 2016), particularly in a shopping app.

Proposition 3: Aesthetic appeal influences purchase intention

Aesthetic appeal that include the originality of design, visual appeal and entertainment value can influence customers’ trust and purchase intentions. (Harris & Goode, 2010). A study by Kumar (2018) suggests that consumers evaluate features of an app like color, graphic and texts compositely rather than as an individual component. Kumar et al. (2018) find that there is a significant influence of design aesthetic, perceived usefulness and ease of use to loyalty to mobile apps. Therefore, an appealing visual aesthetics of an app can play a significant role in adoption and purchase intentions.

Harris & Goode (2010) argues that the modernity of design is a crucial component in online context for online shoppers. This is also supported as it is argued that ambient conditions (i.e. aesthetic appeals) had the greatest influence towards customer’s attitude towards a purchase (Hopkins, 2009). E-consumers reflexively evaluate and highly value the level of emotionality and entertainment of online environments, which can generate a positive attitudinal effect regardless of the utilitarian nature that the app provides (Kumar, 2018). Harris & Goode (2010) indicated that online shopping experience is highly linked to the aesthetic appeal of the online service environment. Therefore, the visual appeal in the design of a shopping app is highly crucial towards creating a positive attitude and evaluation and will ultimately influence purchase intention.

Proposition 4: Layout and functionality influences purchase intention

Layout refers to the arrangement, organization, structure and adaptability of the app, while functionality is the extent in which it can facilitate the service (Harris & Goode, 2010). Hopkins (2009) implied that the key dimensions of layout and functionality of a website is the organization (how easy to use and navigate) and informative-ness (the factual content that it provides). Consumer’s opinion is strongly linked to the navigability and usability of a digital environment (Harris & Goode, 2010). Therefore, this factor is applicable towards other e-servicescape like shopping apps. In addition, there is a positive relationship between layout organization of a e-service and purchase intention (Loiacono, 2002)

Hopkins (2009) argued that signs, symbols and artifacts, such as the useful and informative content of a website drives positive purchase behavior. Hence, a strong information component is important aside from how the app layout is organized to influence purchase. Information such as availability, price and features are a primary component of why consumers are motivated to use online resources, and as a predictor of purchase intention (Loiacono, 2002). If the app is nicely laid out but lacks the information needed, a purchase response will be unlikely (Hopkins, 2009). In the context of apps, antecedents like usability of the app is a driver towards customer’s loyalty (Kumar, 2018).

Overall, the model (Figure1) is constructed in order to illustrate the relationships between the independent variable and how it influences the dependent value of purchase intention.

Figure 1: Constructed Model of Antecedents of Purchase Intention in Shopping Apps

 

Discussion

The theoretical implications that stems from this work is to discuss further on the antecedents of purchase intention within a shopping app. As mobile apps are becoming a prominent within the digital context, studies on how it affects purchase intentions are still severely lacking. The classical model of servicescape by Bitner (1992) managed to encompass both environmental and human aspects of marketing interaction. However, there is a separation between the study of the environmental elements and the consumer behavior, as each context are explored independently. Therefore, this study provides more wholesome perspective on how both contributes to the same dependent variable of purchase intention. Secondly, it can be observed that the literatures of e-servicescapes are still discussing on website commerce (Harris & Goode, 2010; Hopkins et al., 2009). Therefore, this literature is also aimed to extend the theory towards a new context.

This paper contributes to provide more consideration for marketing practitioner in making an app. The factors that are proposed as factors are inherently related to each other. Therefore, marketing practitioner should consider all these factors regardless of their product context. For instance, if the brand focuses on luxury products (hedonic values), it will still have to consider its utilitarian values, such as functionality of the app as the basic that are inherent in operating with their phones (Kim et al., 2013).

The limitation of this conceptual model is that there are still an ample room of research towards purchase behavior in mobile shopping apps. This study depends of past literatures and therefore some require interpretations on how it applies to digital context of shopping apps. In addition, this study only discusses significant variables. However, there are probably more variables that should be considered but unable to due to the limited format. Therefore, future research should investigate the variables deeper and more extensively to better understand the purchase behavior in shopping apps.

Conclusion

To conclude, this paper is aimed to summarize and integrate the studies between servicescape and consumer behavior within mobile shopping apps. As literatures are studied and compared, there are several significant factors which are layout and functionality and aesthetic appeal of the app, as well as the hedonic and utilitarian value. Each propositions constitutes each independent variables and it positively influences purchase intention. Therefore, the conceptual question is answered as the two fields of studies ultimately share the same dependent variable of purchase intention, creating a more wholesome model that constitute the internal and external antecedent of purchase intention in a retail shopping app.

References

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Impact of Advertising on Consumer Purchase Behavior

It can be said that advertising is a subset “promotions” in the marketing mix decisions and promotions put simply involves the mass communication of the product offering to the target market (Jobber and Ellis-Chadwick, 2013). Other than the obvious reason of persuading customers to make purchases, it is imperative to promote the product offering in order to create an image of the product which becomes one of its differentiating factors (Doyle and Stern, 2006). Furthermore the promotion of a product offering is important to reinforce the information the customers already have about the product (Doyle and Stern, 2006). As mentioned earlier, advertising is one of the components of promoting a product offering and thus it is defined as “the paid presentation and promotion of products or services through mass media such as television, radio, newspapers and the internet”(Doyle and Stern, 2006).

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Traditionally, advertising is carried out on the television, radio and in newspapers however disruptive technology like the internet and the phenomena it has made possible has changed advertising and the effect it can have on consumers particularly where it concerns their purchasing decisions (Jobber and Ellis-Chadwick, 2013). Illustrating this point, Google and Facebook have created new environments which are part of the networks to which the planet belongs and which operate at break-neck speed (Jobber and Ellis-Chadwick, 2013). Furthermore, the internet and social networks have also changed the way individuals communicate such that advertisements do not inherently have to be paid – a good review from one consumer to a group of others can be all the advertisement that a company would need (Jobber and Ellis-Chadwick, 2013). In addition to this, advertisements can now be interactive in such a way that the information on the product passed on to the consumer is more targeted and customised (Jobber and Ellis-Chadwick, 2013). Thus this paper will be exploring the impact of online advertisements on consumer purchasing behavior first by outlining the theories of how advertising works, then examining the effects online advertisements on consumer purchasing behaviour .
How Does Advertising Work?
There has been considerable debate on how advertising works however the general consensus has been that there can be no single all embracing theory that explains how all advertising works because they have varied tasks (Jobber and Ellis-Chadwick, 2013). For example advertising that attempts to make an instant sale by incorporating a return coupon that can be used to order a product is very different from corporate image advertisements that is aimed at reinforcing attitudes (Jobber and Ellis-Chadwick, 2013). Nevertheless, the competing views on how advertising works are the strong theory of advertising and the weak theory of advertising (Jobber and Ellis-Chadwick, 2013)– both theories are based on how they affect customers and their end results.
The strong theory follows that a customer passes through the stages of AIDA – awareness, interest, desire and action. This theory argues that advertising is strong enough to increase public’s knowledge and change their attitude and as a result it is capable of persuading new customers to purchase a brand (Jobber and Ellis-Chadwick, 2013)). This is called the conversion theory of advertising: non-buying customers are converted to buyers(Jobber and Ellis-Chadwick, 2013). The product has been criticised on two grounds; one there is little evidence that consumers experience a strong desire before making a purchase because in cases of inexpensive product a customer could very well purchase a brand on a trial basis without any strong conviction that the brand is superior (Jobber and Ellis-Chadwick, 2013). The second criticism is that the theory ignores what happens after action as advertisements in mature markets also targets already established customers of the brand (Jobber and Ellis-Chadwick, 2013).
The weak theory follows that a customer passes through awareness, trial and reinforcement – ATR (Jobber and Ellis-Chadwick, 2013). This ATR model or theory is widely supported in Europe with Ehrenberg (cited by Jobber and Ellis-Chadwick, 2013) explaining that advertising can work exactly the way the ATR model theorises as there is no need for strong emotions like desire and conviction before a first purchase is made. It could simply be a purchase for trial followed by reinforcements.
Consumer Purchase Behavior Theory
“Consumer behavior is the study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas or experiences to satisfy needs and desires” (Solomon and Bamossey, 2006, p6). Schiffman and Kanuk (2007, p3) also take a similar approach defining consumer behaviour as the “behavior that customers display in searching for, purchasing, using, evaluating and disposing of goods and services they expect will satisy them”.
Early economists led by Nicholas Bellouni, John von Neumann and Oskar Morgenstern started to scrutinise the foundation of consumer making decisions (Richarme 2007). They approached the topic from an economic standpoint and focused only on the act of purchase and the most predominant model from this viewpoint is the “Utility Theory” (Richarme, 2007). The Utility Theory viewed consumers as entirely rational and self interested making their purchase decisions based upon the ability to maximise their use of their desired product whilst expending minimum effort (Richarme 2007). Another approach to consumer purchase theory is the psychodynamic approach which; the key tenet is that consumer behavior is determined by biological drivers rather than individual cognition or environmental stimuli (Bray 2008). Perhaps the most widely cited is the cognitive approach which views the consumer as an information procession (Ribeaux and Poppleton, 1978) who actively seeks and recieves environmental and social stimuli as informational inputs which subsequently aids decision making (Bray 2015).
Sheth et al (1991) propose that there are five consumption values influencing consumer purchase choices. The values are functional value, conditional value, social value, emotional value and epistemic value (Sheth et al, 1991). Three fundamental propositions are obvious in the proposed theory and these are:

Consumer choice is a function of multiple consumption values (Sheth et al, 1991).
The consumption values make different contributions in any given consumer purchase choice (Sheth et al, 1991).
The consumption values are independent (Sheth et al, 1991).

Online Advertisements and Its Impact on Consumer Purchasing Behavior
The beginning on online advertising was in 1994 when Hot Wire sold the first ad banner on their company’s website (Bakshi and Gupta, 2013). By year 2000 online advertising spending in the United States had reached $8.2 billion dollars with these numbers increasing to $12.7 billion as more people are connected to the internet and spend more time online (Bakshi and Gupta, 2013). This is a clear sign that online advertising has developed quickly in the last decade. Some of examples of online advertisements includes floating ads, expanding ads, wallpaper ads, trick banners, pop-ups and pop-unders (Bakshi and Gupta, 2013). Now these are the ones instigated by marketers or producers themselves. This paper however puts forward that if advertising (online advertising being no different) is a method of mass-communicating product benefits then online word of mouth or reviews may be considered as an additional method of online advertising albeit the marketers or producers would have very little control as to how such reviews are presented.
Online Reviews
Research has shown that consumer opinion and recommendations actually count towards purchase decision because product review allows consumers to get a feel for the product without making a trial purchase (Murphy, 2015). Recommendation sources according to Andreasen (1968) have a typology as follows: impersonal advocate (mass media), impersonal independent (consumer reports), impersonal advocates (sales clerk) and personal independents (friends) (Senecal and Nantel, 2004). Sencal and Nantel (2004) also report that consumers indicated that for their next purchase of durable goods they would be using first their personal independents as sources of recommendation.
This plays directly to customers’ need for information. Whilst customers could research products through search engines such as Google and Bing. It is never quite like having a first hand account from an unbiased user of the product. Statistics have shown that 80% of online shoppers would change their minds based on online reviews (Murphy, 2015). Supporting this is the fact that in a study carried out in India of the influencers of online purchase decisions, 93% of the respondents indicated that they considered online word of mouth much more reliable than all the other sources of information including the typical online ads (Bakshi and Gupta, 2013).
Thus it would logically follow that having bad reviews would correlate with poor sales whereas good reviews would mean good sales (Murphy, 2015). A case in point is the sale for a t-shirt on Amazon which shot up a staggering 2300% in 2009 after a joke review for the T shirt went viral on the the internet (Murphy, 2015). Till date the t-shirt which features three wolves howling at a full moon has garnered over 2000 reviews (Murphy, 2015). Another example is a study which showed that the biggest influencer for holiday shopping recommendations was from friends and family on social media with 63% swayed by Amazon reviews and 24% were from blogger endorsements (Morrison, 2014).
Social Media/Social Networks
Directly related to online reviews where it concerns online advertising are social networks which could be considered as the platform through which online reviews are exchanged albeit they should be considered separate elements and influencers (Morrison, 2014). Social network platforms such as Facebook which grew by 22% between October 2011 and November 2011 and Youtube which grew 67% percent between the same time frame are the new age medium of online advertising reaching millions of people at a go (Darban and Li, 2012). A study carried out between 2013 and 2014 found that 64% of respondents were convinced of what holiday gift to purchase by a social medium. Social media appears to be so effective that there is at least one social medium guiding consumers through their path to purchase. For example, 58% of respondents to the aforementioned study used Pinterest to find ideas and inspiration, 60% use Facebook to seek promotion whilst 48% share the the purchases they have made on Facebook inspiring others to also make purchases (Morrison, 2014). To this end, 11 out of 12 respondents confirmed that they have made purchases as a result of interacting with the producers on social media or interacting with their peers on social media and getting a sort of first hand advertisement of the product online (Darban and Li, 2012). In addition consumers have also indicated that they are able to communicate directly with producers via social media thus speeding up the purchase process as they also indicated that the length of time it sometimes takes to get the information they need from producers can put them off buying the product in the first instance (Darban and Li, 2012).
General Online Advertisements
In a study carried out on the effects of online advertisements on consumer buying behaviour of branded garments in Pakistan(Afzal and Rabbani Khan, 2015), it was interestingly discovered that there is no direct effect of online advertisements on the buying decisions of branded garmets whereas it was found that there is a significant indirect effect of online advertisements on consumer buying decisions because of advertising characteristics and consumer attitudes (Afzal and Rabbani Khan, 2015). Conversely, in another study carried out it was found that contrary to the the discovery of the study in Pakistan there was a direct link between online banner advertisements and the making of purchases or purchase decisions (Li and Leckenby, 2004) . Interesting another study showed that revenue garnered as a result of online banner ads (which attracted the most revenue) were on a high from 1998 when 56% of revenue made by the respondent company were from online banner ads. However, by the year 2001 these numbers had began falling until 2003 when it was only at 21% (Li and Leckenby, 2004). These studies did not give the reason as to the decline banner ads generated revenue. However the study in Pakistan had reported that consumers seemed to place more stock on word of mouth such as online reviews and a large percentage of the revenue generated by the participating companies were from loyal customers and refferrals (Afzal and Rabbani Khan, 2015). These go back to reiterate the points of discussion in the previous section of this paper as to the effectiveness of social media platforms and online reviews as a method of marketing. Thus it would appear that other methods or forms of online advertisement do not perform as well as social media platforms and online word of mouth it terms of being revenue generators.
The logical question to ask then is why this is so? The answer is not far-fetched and probably lies in the results of a study carried out on consumer perception of online advertisements (Priyanka, 2012). The options provided were entertaining, informative, irritation, credibility, interactivity and purchase. The respondents to these study were further adjusted for age in order to get a clear picture as to the age range of consumers and their perspective (Priyanka, 2012). Of the 100 respondents to the study, irrespective of age, 22 found online advertisements informative, 18 found them irritating whilst 18 respondents have made purchases because of online advertisements (Priyanka, 2012). Of those the respondents who made purchases 6 were between the ages of 41-50 whilst 5 respondents were of the older than 50 age group (Priyanka, 2012). In addition a very small percentage of this age group found online adverts credible which could mean that perhaps if they percieved online adverts as more credible they could be looking to making more purchases (Priyanka, 2012). Surprising this age group also found online adverts less irritating but also less informative (Priyanka, 2012). This could logically be reasoned to be as a result of the fact that most purchasers of this age actually want more information before they make purchases and are willing to suffer through online advertisements perhaps because they are not skilled in surfing social media platforms to gain more information of the product (the study also showed that only a very small percentage of the above 50 age group do not surf the internet or engage in online window shopping) (Priyanka, 2012).
Thus it would appear that forms of advertisement other than social media and online word of mouth walk a tight rope of being irritating and putting the consumer off thereby having a negative impact on consumer purchasing decisions.
Other Forms of Advertisements and its Impact on Consumer Purchase Behavior
In a study of 175 respondents carried out by Iqbal et al (2013) to determine the relationship between brand perception, advertising and consumer purchase behavior. Their findings, analysis and results showed that advertisements had a positive effect on brand perception and consumer purchase behavior, particularly in teenage consumers (Iqbal et al, 2013). Similarly Mel et al (cited by Malik et al 2014) argues that over time, advertisement plays a major role in influencing the consumer such that they become less price sensitive. In the same vein, Ackerbergm (cited by Malik et al, 2014) also argues that advertising is a great source of product learning for consumers. However image advertising and prestige advertising appears to have less significance in creating or instigating a learning process about the product (Malik et al, 2014). In other words, advertisements have a more positive effect on consumer purchase behavior if the advertisement includes informational content (Malik et al, 2014). Added to this is the fact that, it has been discovered that the more interactive an advertisement is the more it captivates the attention of the consumer and the more impact it actually has on consumer decision (Iqbal et al, 2013).
In comparison to online advertisements, the general consensus amongst scholars about traditional methods of advertisements appears to be that there is some positive impact on consumer purchase behavior ranging from product learning, to a decrease in price sensitivity and an increase in actual purchases (Kumar and Raju, 2013). This paper argues that perhaps this is due to the fact that producers or marketing managers have more control over traditional methods of advertisements. Wheresas with online advertisements, consumers are able to ignore the advertisements, pro-actively initiate the product learning process themselves thus controlling what they learn about the product which could be positive or negative.
Conclusion
This paper focused on the impact of advertisements (with a focus on online advertisements) on consumer purchase decisions. The strong and weak theories of advertisement were examined in order to determine the way in which advertisements work. Furthermore, some key elements of online advertising such as word of mouth by way of online reviews on social media platforms were examined in detail as well as their impact on consumer purchase decision. Finally online advertisements in general and how they influence consumer purchase decision was also examined. From the aforementioned examination and analysis, it can be concluded that online advertisements in whatever form can have either a positive or negative impact on consumer purchase decisions. Marketing managers appear to have very little influence on how the advertisements will impact consumer purchase behavior. Thus making the results inconsistent. Perhaps this is because the internet is such a fast-paced and volatile environment. In sharp contrast, it was discovered that traditional methods of advertisements have consistent (across various studies) positive impact on consumer purchase behavior. It can also be concluded that of all the forms of online advertisement, online reviews are perhaps the most volatile and prone to resulting in a negative impact on purchase decisions. Nevertheless, it is also quite likely to bring on the most amount of sales within a short period of time. It was discovered that consumers find some online adverts annoying which also influences their decision to allow the engagement of their attention and consequently their money in making the final purchase. In addition, it was also found that there are positive correlations between online adverts and consumer purchase behavior in that the online adverts triggers the customer’s interest in a product and eventually leads to a purchase.
References
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Bakshi, G. and Gupta, S. (2013). Online Advertising and Its Impact on Consumer Buying Behaviour. International Journal of Research in Finance and Marketing, 3(1), pp.21-30.
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Purchase decision of apartments in metropolitan India

Factors affecting the purchase decision of apartments in metropolitan India
Abstract
Purpose – The purpose of this paper is to provide an insight into the motivation behind Indian buyers when looking to purchase an apartment. The factors driving demand preferences for apartments are not well established and are difficult to measure, and often builders may not have an insight into what buyers are looking for.

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Design/methodology/approach – The research in this paper is based on telephonic interviews and internet based survey with recent purchasers, who bought a home in the past 1 year and prospective purchasers looking to buy an apartment in the coming one year. They belonged to number of locations across all metropolitan cities of India – Delhi, Mumbai, Bangalore, Kolkata and Chennai. The data were analysed using factor analysis to identify the criteria in an apartment that buyers value the most. This research was done across all ages and irrespective of their intention of why they bought or if this was their first purchase. Further, Cluster analyses was used to determine clusters and one way Anova was used to determine the factors that hold different value to different clusters of people. Discriminant Analysis was used to determine any difference in behaviour of first time purchasers with others.
Findings – The findings in this paper revealed that issues signifying “affluence” accounted for approximately 27 percent of the choice of housing by Indian buyers to purchase apartments in metropolitan India. Also, Cluster Analysis revealed that demographically different set of buyers differ significantly in their attitude towards “Financial” factors. Discriminant analysis revealed that first time buyers give significantly more importance to “Financial” factors like “House price”, “Income” where they give much lesser importance to “Builder reputation” and “Status of neighbourhood”.
Research limitations/implications – The research in this paper is aimed specifically at Indians living in metropolitan cities only which may be very different from the rest of India. The majority of the respondents belong to Delhi, which may also bias the results. The majority of the data has been collected from an online survey which may reduce the validity of the findings.
Practical implications – If due consideration is given to the factors that buyers are most concerned about, builders of new apartment housing would be better equipped to meet this demand and maximise their profits. Builders will also be able to target buyers better by knowing the difference in preference of first time buyers to others.
Originality/value – This paper provides an invaluable insight into Indians’ concept of a suitable apartment in metropolitans. While important decision factors were determined for the entire population, further analysis was done to determine difference in issues felt important to first time buyers. Also, the most important factors were determined for different demographic clusters. Thus in this way, the transaction of purchasing an apartment was analyzed from several points of view.
Keywords Consumer behaviour, Purchase, Apartment, India
Paper type Research paper
INTRODUCTION
The Real Estate sector is important to the Indian economy. In terms of employment generation, it is second only to the agricultural sector. The housing sector contributes nearly 5% to India’s GDP. It is expected to rise to 6 per cent in the next five years.
Property markets in India are recovering faster than those in the US and the UK. The sector is expected to attract around US$ 12.11 billion of investments in the next five years. Residential space comprises almost 80% of the real estate developed in the country. There is a shortage of 22.4 million dwelling units according to the Tenth Five Year Plan. 80 to 90 million housing units will have to be constructed over the next 10 to 15 years to rectify this, with the majority of them for the middle- and lower-income groups. It is for this reason that residential properties in India, particularly in Mumbai and Delhi, are viewed as very good investments as per a study by PricewaterhouseCoopers (PwC) and Urban Land Institute, a global non-profit education and research institute.
In the 2009-10 budget, a tax holiday on profits was granted to developers of affordable housing (units of 1,000-1,500 sq ft). This exemption was instituted for projects that started from 2007-08 onwards with a deadline of completion of March 1, 2012. US$ 207 million was also allocated to grant a 1% interest subsidy on home loans up to US$ 20,691 with the caveat that the cost of the home should not be more than US$ 41,382. This was expected to further help the housing sector.
An apartment is a residential unit that forms a division of a building. It can be either owned or rented. Some people own their apartments together where each owns a part of the corporation which owns the flat. In condominiums, dwellers own the individual apartments and share the public environment.
Living in apartments is gaining popularity in India. 217 townships across India are in the building plans for the Sahara Group. Their allure lies in the convenience that they offer in terms of safety and security and maintenance of utilities like electricity and water. A central maintenance system obviates the need for hiring outside help for minor problems like leaking taps or electric short circuits. Stand-alone homes also require incurring additional costs like buying/leasing land, licensing, duties, etc. Apartments enable maximization of space utilization and reduce demand on public resources. People are also able to avail of additional amenities like gymnasiums, swimming pools, etc. at affordable prices.
There is a gap in the literature, however, with regard to the value drivers that dictate purchase decisions of residential property in the country. Similar studies exist for other countries but were found wanting in the Indian context, especially when it comes to apartments. Through this paper, we aim to do the very same, i.e. establish which factors dictate purchase decision and to what extent. We will also correlate these preferences with the demographic profiles and characteristics of our respondents and hence arrive at a greater and much deeper understanding of these issues. We see immense utility for our paper, especially for builders and property dealers who can use our findings in structuring their own business activities.
RESEARCH BACKGROUND AND HYPOTHESIS
Even though consumer behaviour is generally assumed to be an important part of real estate valuation, buyer preferences are generally not considered during the valuation process. It is basically reduced to the confirmation of a bid price which may or may not be met by the buyer. Efforts are being made to address this fault and many papers have been written on the analysis of motivations of residential property purchasers, attempting to explain them using models such as bounded rationality and hedonic pricing. Hedonic Pricing, or Hedonic Demand Theory as it is also known, decomposes the item of interest into constituents and evaluates the importance of each of them and their contribution to the overall valuation. These factors can be both internal characteristics of the good or service and external factors. In the case of real estate valuation, internal characteristics include layout, structure, etc of the property while status of neighbourhood, proximity to schools, etc are the external factors. Factor Analysis enables us to do just that. It is a statistical method that reduces the number of variables by grouping two or more of them into unknown or hidden variables known as factors. Further analysis is then conducted by looking at the variation among these factors and evaluating their relative performance. These factors are taken to be linear combinations of the original variables plus error terms (Richard L. Gorsuch, 1983).
“Factor analysis seeks to do precisely what humans have been engaged in doing throughout history – that is to make order of the apparent chaos of the environment” (Child, 1990). It has great use in evaluating consumer behaviour. Charles Spearman is credited with its invention. He used it in the formulation of the ‘g Theory’ as part of his research on human intelligence (Williams, Zimmerman, Zumbo & Ross, 2003). Over the years it has found uses in fields as diverse as psychometrics, marketing, physical sciences and economics. It can be used to segment consumers on the basis of what benefits they want from the product/service (Minhas & Jacobs, 1996). It has evolved as a technique over the years, with many researchers working on fine-tuning and improving the analytical process. Bai & Ng (2002) developed an econometric theory for factor models of large dimensions. It focused on the determination of the number of factors that should be included in the model. The basic premise of the authors was that a large number of variables can be modeled by a small number of reference variables.
Marketing strategies based on customer preferences and behaviour often make use of this technique during the market research phase (Ali, Kapoor & Moorthy, 2010) and while devising and changing the marketing mix (Ivy, 2008). Factor Analysis has also been used in ground water management to relate spatial distribution of various chemical parameters to different sources (Love, Hallbauer, Amos & Hranova, 2004).
The facility of segmentation that factor analysis offers has been extended to the real estate sector and all studies thereof. Regression analyses are subject to aggregation biases and segmented market models yield better results. This segmentation is done using factor analysis Watkins, 1999). Property researchers have also dedicated a lot of attention to researching the preferences of property buyers and identifying the drivers of property value. A study in Melbourne, Australia (Reid & Mills, 2004) analyzed the purchase decisions of first time buyers and tried to determine the most influential attributes that affect the purchase decision using factor analysis. The research findings of the paper indicated that financial issues explain about 30% of the variance in the purchase decisions of first time house-owners. This related to timing, the choice of housing, and the decision to buy new housing. Apart from that the choice of housing is dependent on Site Specific factors (Location) and the decision to buy new housing is dependent on Lifecycle factors, such as family formation, marital status or the size of the existing house. Another study determined that brand, beauty and utility play a defining role in property value (Roulac, 2007). The findings of the paper explain why certain properties command premium prices, relative to other properties. It came to the conclusion that for value determination of high priced properties the overall perception of the brand is the most important factor followed by utility and beauty. Brand names are also very important especially in metropolitan markets as they add to the appeal, distinctiveness of the property. Another way to attract buyer’s attention is through the mix of neighborhood amenities offered (Benefield, 2009). Neighborhood amenities like tennis courts, clubhouses, golf courses, swimming pool, play park and boating facilities significantly impact property values. Xu (2008) used a hedonic pricing model to study the housing market of Shenzhen, China. He operated under the assumption that buyers consider property specifics and location attributes separately when they buy a home. The findings suggest that the marginal prices of attributes are not constant. Instead, they vary with the household profile and location.
Cluster analysis involves the grouping of similar objects into distinct, mutually exclusive subsets known as clusters. The objective is to group either the data units or the variables into clusters such that the elements within a cluster have a high degree of natural association among themselves while the clusters remain relatively distinct from one another. Mulvey and Crowder (1979) presented and tested an effective optimization algorithm for clustering homogenous data. Punj and Stewart (1983) reviewed the applications of cluster analysis to marketing problems. They presented alternative methods of cluster analysis to evaluate their performance characteristics. They also discussed the issues and problems related to use and validation of cluster analysis methods. Ketchen and Shook (1996) chronicled the application of cluster analysis in strategic management research. They analyzed 45 published strategy studies and offered suggestions for improving the application of cluster analysis in future inquiries. They believed that cluster analysis is a useful tool but the technique must be applied prudently in order to ensure the validity of the insights it provides.
Since Marketing researchers were introduced to discriminant analysis half a century ago, it has become a widely used analytical tool since they are frequently concerned with the nature and strength of the relationship between group memberships. It is especially useful in profiling characteristics of groups that are the most dominant in terms of discrimination. Morrison (1969) explained how discriminant analysis should be conducted using canned applications and how the effect of independent variables should be determined. However, care must be taken when applying discriminant analysis. The potential for bias in discriminant analysis has long been realized in marketing literature. Frank, Massy and Morrison (1965) showed that sample estimates of predictive power in n-way discriminant analysis are likely to be subject to an upward bias. This bias happens because the discriminant analysis technique tends to fit the sample data in ways that are systematically better than would be expected by chance. Crask and Perreault (1977) looked at the validation problems in small-sample discriminant analysis.
Various research papers have studied the features that are evaluated while purchasing a home, how these features factor in terms of pricing the residences and how the home owners rate the various scales on importance. Such studies, however, were found lacking in the Indian context. This paper aims to understand the value drivers of apartments in Indian metros using factor analysis. The initial variables that we have considered are as follows –
Ø House Price – This refers to the price/rent that is being charged for the apartment. The real estate market is often segmented using this variable.
Ø Availability of Gymnasium, Swimming Pool and other sports facilities – Many apartment complexes and housing societies offer recreational facilities to the residents to service their lifestyle needs.
Ø Traffic – This variable refers to the density of vehicular movement in the location in which the apartment is located.
Ø Size of Individual Rooms – The size of the rooms within the apartment is also an important factor. Some buyers prefer big, airy rooms while others might want smaller rooms.
Ø Proximity to City – This refers to the location of the apartment relative to the city boundaries, i.e. whether it is within the city proper or on the outskirts.
Ø Ability to obtain Loans – This variable stands for the ease with which the buyers can get loans, either through the builder or on their own.
Ø Parking Space – The availability of parking space is considered important by some consumers.
Ø Exterior Look of the Apartment – This refers to the façade of the apartment, i.e. whether its attractiveness is a strong enough motivation.
Ø Household Income – The total income of the household often dictates the purchase decision of families.
Ø Perceived Safety of Locality – This is a big concern for some customers, especially single women and old people and may significantly influence the purchase decision.
Ø Branded Building Components – Some consumers may value an apartment more if it has branded fittings, furnishings, etc.
Ø View from the apartment – This can be an important variable for some customers.
Ø Preference for Ground Floor – This variable refers to the customers’ preference for the ground floor relative to other floors.
Ø Water Supply – This variable means to measure how important it is for the consumers that there is continuous, guaranteed and good quality water supply.
Ø Structure – This refers to the layout of the apartment – whether it is a 2BHK or 3BHK, etc.
Ø Status of Neighbourhood – For some consumers, the reputation and social standing of the locality that they live is very important.
Ø Proximity to Shops and Parks – This seeks to measure whether proximity to these places is an important criterion for buyers or not.
Ø Interior Design – This refers to interior features of the apartment like flooring, lighting, balcony, etc.
Ø Availability of Domestic Help – This can be important consideration, especially for working couples.
Ø Proximity to Schools and Offices – This seeks to ask how important such proximity is to the buyer.
Ø Builder Reputation – Many buyers are heavily influenced by the brand name and reputation of the builder.
Ø Monthly Living Costs – Certain average monthly expenditure is incurred as living expenses. We seek to gauge the relative value of this variable.
Ø Proximity to Public Transport, Major Roads, etc – This refers to the accessibility of the apartment with regard to public transport and roads.
Ø Power Backup – Full power backup in case of power outages is frequently advertised by builders. Whether this actually influences buying behavior needs to be examined.
Ø Proximity to friends’/relatives’ homes – This can be a big variable that dictates consumers in their decision-making process.
Methods
Sample
The questionnaire was sent to people residing in Indian metropolitan cities. Out of the 172 responses received, 13 were rejected since the respondents had not purchased a property in a metropolitan city. Another 13 were rejected because either the respondents had not purchased the apartment in the last one year or were undecided as to when to purchase the property. Finally out of all the respondents 146 (84.9%) were identified.
Measures
The 25 variables were measured by a Likert scale with responses ranging from 1 (Very Low Importance) to 5 (Very High Importance).
Analysis
This study uses four tests to analyze the factors involved in purchase of an apartment. The first test conducted is the factor analysis which is used to club the variables in order to determine the purchase criteria of apartments. Thus, in this analysis the broad set of variables will be constricted to determine the smaller set of factors that can explain what home owners look for when purchasing an apartment. After this, a cluster analysis was conducted to determine the various clusters (groups) that exist within the demographic population. On the above said factor analysis and cluster analysis, a one way ANOVA was conducted in order to determine the order of preferences of each factors amongst such clusters. Finally, a discriminant analysis was conducted to identify factors that best differentiate the first time purchasers with others.
Results
The first test conducted was the factor analysis. Under this test, we followed the Principal Component Analysis method on the 25 variables to combine the correlated variables into factors. The KMO value calculated is 0.799 is above the suggested value of 0.5 which indicates that it is good idea to proceed with Factor Analysis. On the basis of the computations as represented in the Rotated Component Matrix (Table 1), the following factors were received: Affluence, Financial, location, lifestyle, Site-Specific. The variables were classified into a factor if their loading for the respective factor was greater than 0.4. Also, two other unnamed factors were received which remained so due to the fact that no factor can be formed between two variables. We have followed the Kaiser criterion (1960) of retaining only those factors that are greater than one. The initial research on 25 variables was reduced as the variables on domestic help, floor and proximity to friends/relatives was removed after the factor analysis was done. Domestic help was removed because it loaded on three factors (Financial, Location and Lifestyle) equally. Preference of Ground Floor was removed from the analysis as it showed a positive loading and negative loading on each of two factors which means that while some considered ground floor to be in consideration other considered the penthouse to be better. Proximity to friends/relatives was removed as it was the only variable in factor 6 (unnamed) and thus no factor can be made by one variable.
The results of the Factor Analysis are as under:

Rotated Component Matrix

Variable Name

Affluence

Financial

Location

Lifestyle

Site-Specific

Unnamed

Unnamed

Factor 1

Factor 2

Factor 3

Factor 4

Factor 5

Factor 6

Factor 7

Traffic

0.768

Gym/Pool/Sports Facility

0.755

View from Apartment

0.721

Builder Reputation

0.644

Parking Space

0.568

Status

0.513

Monthly Cost of Living

0.764

Household Income

0.735

Availability of Loan

0.691

Availability of Domestic Help

0.498

0.414

0.435

Proximity to Schools/Office

0.778

Proximity to Transport

0.607

Proximity to City

0.575

0.424

-0.401

Proximity to Shops/Parks

0.546

Interior Design

0.768

Branded Components

0.712

Power Backup

0.594

Structure

0.741

Size

0.580

0.598

Safety

0.549

Preference of Ground Floor

-0.415

0.423

Proximity to Friends/Relatives

0.845

Water Supply

0.410

0.652

House Price

0.405

0.508

Exterior Look

0.426

0.405

-0.464

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.

Rotation converged in 21 iterations.

Table 1
Factor Loadings- Purchase of an Apartment
Table 2
Factor Analysis

Factor No.

Factor Name

Eigen Values

Total Variance (%)

Cumulative Variance (%)

1

Affluence

6.826

27.306

27.306

2

Financial

2.9

11.600

38.906

3

Location

1.835

7.342

46.248

4

Lifestyle

1.504

6.016

52.264

5

Site-Specific

1.447

5.788

58.052

6

1.129

4.516

62.568

7

1.059

4.236

66.804

The second test that was conducted was the Cluster analysis and has done to segment the respondents on demographic variables of Age, Gender, City and Number of members in the family. Squared Euclidean distance and average linkage hierarchical clustering method was used. At fusion coefficient value of 1.0, two distinct clusters were evident. On conducting a One way ANOVA to compare means with the demographic variables we observe that the two clusters are differ on the mean age with a significance of 0%. The first cluster consists of a younger population with an average age of 37 approximately and the s
 

How does Southeast Asian Cultural Background Affect House Purchase Decision in Australia?

RESEARCH METHODOLOGY

The research methods using are mainly quantitative methodology as the main research method, while qualitative analysis is the supplementary research method. First method will be used is the online self-completion questionnaire (SCQ) to investigate the criteria or factors that would attribute to property purchase for Southeast Asian owners, among the questionnaires, it will provide different weights towards the ranking factor as well. Based on the information and response from the SCQ, these data can be transformed by ways of graphs and charts, then using the software of IBM SPSS and linear regression, the correlation could be found to identify the relationship between the two variables to further determine the quantitative impact of cultural factors on the purchase of the house. The second method will be used is focus group and semi-structured interview as supplementary methods. In addition, secondary data will be getting as well as supporting evidence.

RESEARCH METHODS AND DATA SOURCES

Self-completion questionnaires-SCQ

The research will first use online self-completion questionnaire (SCQ) to investigate the property purchase factors .The main method for collecting data would be using close ended questions for SCQ and work with southeast Asian real estate agencies, such as Colliers, JLL, and ask them to help to send out the questionnaires to their database purchaser clients. The questionnaire will be carried out within 5 countries and each country would have 200 copies. Among all the factors which include cultural factors, it will ask the respondents to select those factors attributing for property purchase decision in Australia and then among all the factors selected, ranking those factors from 1-5 from least important, not very important, important, quite important to most important for those factors. It will be conducted by way of email questionnaire and will involve minimal costs. The expected time frame is about one to three months as sometimes it will take longer time for respondents to respond. The strength of this method is quick, with minimal costs involved and can provide greater anonymity. However, limitations would be the questions will be more abstractive and respondents might have different views on culture which may affect result analysis. After receiving the information from the questionnaire, the data will be transformed into Excel and graphs. Although the SCQ may be a not very deep data collection method but the information can reveal the ranking weights towards cultural factors. Then the variables can be displayed on a XY charts and then using the IBM SPSS software and Excel Linear Regression tool to identify the quantitative relationship between two variables. The method in the end can be summarized as a formula and bring up the correlation figure. Based on the figure and the sign for correlation, it can tell the relationship. If the correlation is positive, which means an increasing relationship for the variables, and vice versa. Besides, if the absolute figure is close towards one, which means a stronger relationship between the cultural factors and the property purchase decision.

Focus group and semi-structured interviews

Focus group is expected to last for one week and will involve certain costs to pay for participants. The data looking for is consensus that is agreed by all participants, namely, textual data. It will be carried out via open-ended question, bring up cultural factor one by one and seek for where does it come from, then observe and record the information getting from focus group.  It will invite sociologist, economist, historian, developer, buyer to attend the focus group and these participants are with expertise. The analysing tool would be transcription and analysis of the arguments. The strength is that it can be used as a backup method to supplement literature review, but the shortcoming is that the result can be affected by other respondents’ review significantly. It is expected that the potential outcome will be the consensus that agreed in the focus group should be in line with relevant journal articles.

Semi-structured interview is another supplementary method and it will take about 15 days, it will need to pay to the participants with an hourly rate of $20 and it is expected to invite 30 potential buyers by way of interviewing the owners from Southeast Asian backgrounds with open and closed questions. Each session will run about 20 minutes for one person. The information received will be mainly the transcription from the interviewees. For open ended question answers, the data can be analysed to check if it will in line with relevant journal articles or not. For close ended questions, the data can be transformed into graphs which are easier to comprehend. The strength is to increase the chance of successful data collection and improve the accuracy of data. However, the limitations would be time wasting and difficult to replicate. Potential outcome will be to verify and support the data gathered from quantitative method and providing qualitative evidence.

Secondary data

This paper will also be looking at some secondary data as supporting information, it is expected to look at the foreign investments review board annual report 2017-2018 financial year. It will mainly focus on the amount of dollar invested in real estate industry and the country sources. According to the annual report 2017-2018, the leasing two countries are USA and China for foreign investments and in real-estate industry, China invested $12,667.7 million in this past financial year, which is the biggest percentage in this sector. It on the other side would support the main question in this topic. The data could only be a supporting data, although they are factual numbers, they still have limitations to provide evidence directly.

CONSLUSION

Based on the literature findings at this stage and the expected research design methods, it is expected that the findings will show a positive strong correlation between cultural background and property purchase decisions. Consequently, this hypothesis will be tested in the Australian property market for people from Southeast Asian backgrounds and it is important to understand its implications.

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