CHAPTER 2
THEORITICAL FOUNDATION
2.1
Consumer behavior
The field of consumer behavior is the study of process that individuals, groups or
organization use in order to select, use, and/or dispose products and services that satisfy
the wants and consumers needs. Consumer behavior needs to be studied to learn all
about providing product and service that can satisfy consumers’ wants and needs. It
teaches how consumers behave, so that marketers can know how to deal with the
consumers professionally. There are two factors that can affect consumer behavior; there
are internal factors and external factors. Internal factors mainly are emotion, personality,
experience, while external factors consist of friends, family, culture, environment, and
social. There are many things need to be consider in consumer behavior, for example:
each country, even in each region of a country has their own culture. Understanding
their culture and not to insult other culture is one of consumer behavior study. (McGrawHill. Consumer behavior; building marketing strategy, tenth edition).
2.2
Consumer decision making-styles
Learning is a part of decision making process (Sproles and Sproles, 1990). Appropriate
decision making involves three logical steps which are identifying problems, searching
for alternatives and last step is choosing best alternative. Previous research done by
Baxter Magolda, and Porterfield 1988 about decision-making said that appropriate
6
7
decision-making needs abstract thinkers, considering multiple alternatives. In fact, there
are many consumers think as absolute thinkers (they believe that there is only one right
answer and one wrong answer) and as they get older, they become more abstract thinkers
(they believe that there are more than one right answer and more than one wrong
answer).
As there are many types of people, each of their behavior should be different. Their
thinking toward decisions will also different. Study done by Sproles and Kendall in 1986
was to provide marketers a tool to better understand consumer’s decision purchasing
style, so Consumer Styles Inventory known as CSI was developed, to analyze the
decision making styles of consumers in the marketplace.
From the empirical study done, the CSI identified there are eight consumer decisionmaking styles:
•
Perfectionist, high quality conscious: a consumer considers the product quality
and the consistency of its product quality. Some consumers tend to seek perfect
choice for their fashion. They have high awareness to what they want to buy, in
which they have specific ideas in what they should buy in term of quality.
Quality is one important factor in decision making style. From previous research
done by Kim and Shim 2002, it was found that 40 percent shoppers are quality
oriented shoppers.
•
Brand conscious, price equals quality: a consumer assumes high quality need
higher price. Some consumers desire well-known brand, higher price brand, such
as: GUESS. Brand conscious shoppers believe that these product brands have
8
higher quality than other lower brands product. This becomes one important
consideration in decision making.
•
Novelty-fashion conscious: a consumer likes to update their fashion to the
newest model. Fashion conscious consumers tend to search information about the
newest and most exciting product.
•
Recreational/ Hedonistic shopping conscious: a consumer feels happy and enjoy
their shopping moments and experience. Many consumers enjoy shopping in
their holiday, or free time. Bellenger and Kaogonkar 1980 found that 70 percent
of consumers enjoy shopping in their free time. Therefore window display may
become one of way to attract consumers.
•
Price conscious, Value-for-money: a consumer likes discount products, such as:
sales, vouchers, bargains. Price conscious shoppers seek lower price for same
beneficial product. When there many alternatives with same level of product
benefit, this type of consumers will choose lowest price product (Janiszweski and
Lichtenstein, 1996). Kim and Jin 2006 found that this type of consumers is more
frequently than other type of consumers. So this becomes one of the most
important factors in decision making styles.
•
Impulsive, careless: a consumer often not planning shopping trips and do not
count the amount of money spent. Bellenger, Robertson, and Hirschman 1978
found that almost 40 percent of consumers are impulsive buyers and around 3060 percent shoppers are unplanned. And age group under 35 and over 65 years
old has a larger impulsive percentage.
9
•
Confused by over choice: a consumer confused with outrageous amount of
product choices available. There are many brands produce clothing, and in that
same brand also produce many kinds of clothing. These varieties of size, color,
model, price, quality, brands make consumers confuse to purchase specific
product.
•
Habitual, Brand-Loyal: a consumer tends to buy same product brand
consistently. Brand attractiveness, quality and image, make consumers enjoy
their product. When consumers happy to a specific brand, this consumers will
buy this product brand consistently
“Consumer decision-making styles is defined as the way consumer mentally (or
cognitively) approaches marketplace choices.” (Sproles and Kendall, 1986)
2.3
Cognitive component
Cognitive component is belief of consumer towards an object. For example: an individual
may believe that Massimo Dutti is use high quality materials of clothing, expensive
brand, and fashion oriented. There are two most famous types of cognitive styles:
adaptive and innovative (Kirton, 1976). Adaptor tends to seek new model without altering
previous decision and behavior decision making, and innovator tends to seek newest and
changing decision patterns. There are four ways to change the cognitive components.
There are change beliefs which a strategy shifting customers’ beliefs towards the
performance of the brand, shift importance is enhancing a product attribute, add beliefs is
adding another beliefs toward the product, and change ideal is changing
the ideal perceptions towards the brand.
10
2.4
Brand
The word brand came from the Old Norse word brandr, which means “to burn”, that used
by owner livestock to identify their animals. Meanwhile, according to AMA which stands
for American Marketing Association, a brand is a “name, term, sign, symbol, or design,
or a combination of them, intended to identify the goods and services of one seller or
group of seller and to differentiate them from those of competition”. A brand is used to
identify a product and/or services, so that it can be well known by others. It is to build
awareness, status and reputation in the market for customers can easily identify the
product or services they purchase (Kevin Lane Keller. Strategic brand management
book; Building, measuring, and managing brand equity; Second edition). It is important
to maintain the product and services they offer, so that customers keep purchasing same
brand. For example: GUESS, a brand name from America that sold variety of products,
from clothing, watch, accessory, jeans, etc. Many customers already know brand name
GUESS, the reason why many customers like GUESS is they keep maintaining good
quality of product and service. If, by some reason one of GUESS disappointed a
customer, it will have effect on GUESS brand as a whole. Imported Brand clothing is
brand clothing that came from outside country (outside Indonesia), and domestic brand
clothing is brand clothing that came from its country (Indonesia).
2.4.1 Quality conscious and Brand conscious
Marketing can influence quality consciousness, sometimes “what you see is not what
you get” it is because consumers always have inference towards product or services.
Inference can go beyond what is showed, stated, or given. Consumers often retrieve
11
information and interpret it with their own thinking to make conclusion about the
products or services.
Quality signals, some inferences about product quality attach to consumers mind
consistently. Consumers receive quality inferences from their experience and knowledge
which some of them not reliable.
•
Price-perceived quality. There is popular belief that price equals quality, so when
the price is high, the quality will also high and when price is low, the quality will
also low. Discounts make product price lower and it can be a signal for lower
quality, therefore many companies carefully use discount strategy.
•
Advertising intensity. Consumers tend to believe that company who advertise
their brand more is selling high quality product or service. The reason is more
advertising mean more cost needed, and it need more effort to do it. More effort
indicates more success.
•
Warranties. With longer warranties, consumers believe that it give better quality.
Companies will not give long warranties, unless they confident to their product
quality.
•
Country of Origin. Consumers’ response positively on product which they
consider good in term where they manufactured.
•
Brand conscious. Brand name also has effect on quality signals. Well-known
brand is believed, having higher brand than unknown brand.
(Kevin Lane Keller, Strategic brand management book; Building, measuring, and
managing brand equity; Second edition).
12
2.6
Country of Origin
Country of origin is the place where product is manufacture or produce. Developed
country tends to have lower effect on country of origin (Elliot and Comoron, 1994). In
developed country, people tend to buy domestic product over imported product, as they
are sure of the product quality. While in less develop or developing country, it has
higher effect on country of origin. They prefer foreign brand which they believe it has a
high quality product. For example: GUESS from US, Massimo Dutti from Spanish, and
Ted Baker from London.