You are on page 1of 17

Journal of the Academy of Marketing Science

http://jam.sagepub.com The Evolution of Consumer Knowledge and Sources of Information: Hungary in Transition
Robin A. Coulter, Linda L. Price, Lawrence Feick and Camelia Micu Journal of the Academy of Marketing Science 2005; 33; 604 DOI: 10.1177/0092070305278512 The online version of this article can be found at: http://jam.sagepub.com/cgi/content/abstract/33/4/604

Published by:
http://www.sagepublications.com

On behalf of:

Academy of Marketing Science

Additional services and information for Journal of the Academy of Marketing Science can be found at: Email Alerts: http://jam.sagepub.com/cgi/alerts Subscriptions: http://jam.sagepub.com/subscriptions Reprints: http://www.sagepub.com/journalsReprints.nav Permissions: http://www.sagepub.com/journalsPermissions.nav Citations http://jam.sagepub.com/cgi/content/refs/33/4/604

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009

JOURNAL OF THE A CADEMY Coulter 10.1177/0092070305278512 etOF al. MARKETING / CONSUMER SCIENCE PRODUCT KNO WLEDGE

ARTICLE

FALL 2005

The Evolution of Consumer Knowledge and Sources of Information: Hungary in Transition


Robin A. Coulter Linda L. Price
University of Connecticut

University of Arizona

Lawrence Feick
University of Pittsburgh

Camelia Micu

University of Connecticut

The authors research in Hungary during the period of transition to a market economy provides an opportunity to examine the evolving relationships between consumer product knowledge and its antecedents, including advertising, personal search, interpersonal sources, and brand experience. Their findings, based on survey data collected in Budapest in 1992 and 1998, indicate that the market information variables explain more variance in consumer knowledge later rather than earlier in the transition. Advertising is an important predictor of consumer knowledge later but not earlier in the transition, personal search is important at both times, and interpersonal sources are not important in either time period; brand experience is negatively related to knowledge earlier in the transition and positively related later in the transition. This study allows one to begin to understand the boundary conditions associated with studies conducted in developed economies. Managerial implications for firms investing in transitional economies are presented.

Keywords: product knowledge; information search; advertising; transitional economies; Hungary

Journal of the Academy of Marketing Science. Volume 33, No. 4, pages 604-619. DOI: 10.1177/0092070305278512 Copyright 2005 by Academy of Marketing Science.

Consumer knowledge is of central importance to examining and understanding consumer behavior. Much attention has focused on the assessment and calibration of knowledge, as well as the antecedents of knowledge (Alba and Hutchinson 1987, 2000; Park, Mothersbaugh, and Feick 1994; Ratchford 2001). Research in developed market economies consistently has established that product knowledge derives from multiple information sources, including advertising (Arndt 1968; Coulter, Zaltman, and Coulter 2001; Hoch and Ha 1986), personal search (Alba and Hutchinson 1987; Beatty and Smith 1987; Srinivasan and Ratchford 1991), influential others (Dichter 1966; Feick and Price 1987), and product experience (Hoch and Deighton 1989; Hoch and Ha 1986; Kempf and Smith 1998). Even though consumer researchers have devoted much time and effort to understanding product knowledge and its antecedents, research has not focused on the evolution of these relationships over time. Our research in Hungary in the 1990s affords us a unique opportunity to examine the evolving relationships

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009

Coulter et al. / CONSUMER PRODUCT KNOWLEDGE 605

between consumer product knowledge and its antecedents. Hungary, along with seven other former communist countries of Central Europe, joined the European Union in May 2004, in some sense defining the dnouement of their transition to a market economy. Since the late 1980s, these countries have undergone massive economic, political, and social transformations that included the introduction of a globalized consumer culture (Friedman 1999; Humphrey 1995; Miller 1987; Waters 1995). The transformation included a deluge of Western advertising and marketing activities aimed at informing consumers about the existence of new products, as well as their social and cultural meanings (James 1995). Consumers had access to a marketplace with new product and brand choices, and their reactions to this new cultural order included a mixture of desire, ambivalence, skepticism, and confusion (Belk 1999; Coulter, Price, and Feick 2003; Feick, Higie, and Price 1993; James 1995; Lascu, Manrai, and Manrai 1993). As participants in this transitional economy, businesses and consumers faced challengesbusinesses in learning to compete and to understand consumer preferences (Batra 1999; Verdery 1996), and individuals in learning about products and brands, and more generally, learning to be consumers (Ger, Belk, and Lascu 1993; James 1995; Kligman 1996; Tavassoli, Block, Schmitt, and Holbrook 1993). The purpose of this article is to examine the evolution of the relationships between antecedents of product knowledge (i.e., advertising, personal search, interpersonal sources, and product experience) and product knowledge in Hungary, as the country underwent the transition to a market economy. In the next section, we discuss our specific cultural and product contextsHungary and cosmetics. Then, we develop propositions about the evolving impact of information sources on product knowledge in this transitional economy. In so doing, we draw on multiple sources: (1) existing literature regarding the links between product knowledge and these antecedents (which as we have noted is based in the United States, a developed market economy); (2) secondary data on the advertising, cosmetics and retailing industries, and general marketplace activities in Hungary during the 1990s; and (3) participant observation and depth interviews with industry representatives during the period of interest. We examine our propositions using survey data collected from women in Budapest in Summer 1992 and Fall 1998 and employ qualitative data (i.e., focus groups and depth interviews with consumers) collected prior to the surveys to provide context and illustrations for our quantitative results. Our findings contribute to understanding the applicability of existing consumer behavior research to the evolving nature of the relationship between product knowledge and its antecedents in developing and transitional economies, as well as the evolution of the relationships between these variables and choice confidence.

CULTURAL AND PRODUCT CONTEXTS Hungary was and is at the forefront of much of Central Europe in developing a consumer culture (Braun 1999; Braun and Barany 1999; Money and Colton 2000) and thus represents a natural venue for examining how a changing marketplace can affect consumption attitudes and behaviors. Our product context is cosmetics, chosen for several reasons: (1) throughout the 1990s, Western cosmetics brands became increasingly available, (2) cosmetics alternatives varied in price from very inexpensive to very expensive and hence were accessible to women interested in buying them, and (3) although an optional nondurable product category, cosmetics are an important aspect of womens consumer culture and one of the imperatives of contemporary life (Mussey, Bowes, Ruzicka, and Olges 1991). Prior to 1989, there were limited numbers and types of cosmetics products available in Hungary. Most were produced by Central and Eastern European firms, and typically of low quality. Only a few higher-end brands, such as Hungarian produced Helia-D and German-owned Nivea, were available generally (Vegh 1997). During this time, cosmetics were sold in small state-owned shops, but as with many consumer goods, their availability on retail shelves was uncertain because of inconsistent supply from producers and distributors. A broader array of products was available in the state-owned hard currency stores, but the lack of hard currency made these products inaccessible to most consumers. In the earliest year or two of the transition, increasing numbers of types and brands of Western cosmetic products were available at open-air markets and in small shops (Feick et al. 1993). Hungarian households began to have access to cable television stations from Western Europe and the United States that promoted cosmetics products and brands that were unavailable or just being introduced. A few Hungarian womens magazines (e.g., Nk Lapja, Kiskegyed, and Frge Ujjak) were available and featured sewing patterns and articles on womens political and family issues, but very little advertising. Also at that time, most women were ambivalent about looking feminine or sexy because of the lack of availability of cosmetic products, historically rooted social norms, and the requirement to focus on more basic needs. Drakulic (1993) concluded, Look at usWe dont even look like women (p. 27). She suggested, Real consumerism was impossibleexcept as an ideabecause there was little to consume. Trying to be beautiful was always difficult; it involved extra effort, devotion perhaps. But most women didnt have the time or the imagination enough to try. (p. 27) During the 1990s, the cosmetics and toiletries market in Hungary grew rapidly, increasing 40 percent from 1991 to

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009

606

JOURNAL OF THE ACADEMY OF MARKETING SCIENCE

FALL 2005

1995, and cosmetic imports increased 50 percent between the early 1990s and 1997 (Vegh 1997). In 2000, the cosmetics market (not including a very active black market that accounted for as much as 30% of Hungarys GDP) amounted to more than 300 million U.S. dollars, and foreign cosmetics producers accounted for more than half of the market (Cosmetics Industry in Hungary 2001). By the mid- and late 1990s in Hungary, cosmetics products were available in open-air markets, drug stores (e.g., Azr, Drogerie Markt and Rossman), discount stores, and specialty boutiques (e.g., Nature Blue and Clinique), and from multilevel direct marketing firms (e.g., Avon and Oriflame). Many multinational companies (e.g., Unilever, Procter & Gamble, LOral), and retailers marketing health, beauty, and fashion products perceived the new Hungarian consumer as having the money and time to care about appearance (Mussey et al. 1991; Nicholls, Kapoor, and Cook 1998; Ready to Shop 1998). Vegh (1997) commented on the impact of the infusion of cosmetics on Hungarian women: Previously limited only to products produced by Hungarian manufacturers, and based on simple East-European standards, consumers are now confronted with thousands of productsanywhere from relatively inexpensive no-name nail polishes to designer fragrances (p. 3). The privatization of television and radio markets in the mid-1990s in Hungary provided consumers access to many international channels and cosmetics advertising. Multinational companies engaged in vigorous marketing campaigns and began distributing free samples (Ready to Shop 1998; Vegh 1997). Much cosmetics advertising did portray a western lifestyle and imply that cosmetics are integral to that lifestyle (Vegh 1997:3). In addition, Hungarian womens magazines (including GYNGY, Elixr, JOY, and Nk Lapja) and Hungarian versions of Western womens magazines (e.g., Cosmopolitan and Glamour) promoted the importance of appearance, beauty, and fashion, as well as the proper use of cosmetics, to women in Hungary. Product availability and media attention brought to the fore greater focus on womens issues, cosmetics, personal grooming, and femininity in Hungary in the 1990s. Women, previously discouraged from using cosmetics and even stigmatized for putting emphasis on their appearance, now had opportunities to redefine their identity through new lifestyles and product purchases (Breslauer 1996; Kligman 1996). A Procter & Gamble brand manager in Budapest (industry informant, August 1998) reflected on how the changing cultural context and marketplace had affected Hungarian women over the decade of the 1990s, They have learned a lot [about cosmetics], but basically they dont know much. And when asked, Are [Hungarian women] confident, do they feel like they know a lot? She replied, Umm, no, I dont think so.

EVOLVING RELATIONSHIPS BETWEEN SOURCES OF MARKET INFORMATION AND CONSUMERS PRODUCT KNOWLEDGE As noted, research has documented that consumers in developed market economies rely on multiple sources, including advertising, influential others, personal search, and brand experience to obtain product-relevant information. Our premise is that these relationships are contingent on cultural, market, and personal factors that heretofore have not been considered in the literature. In this section, we develop propositions regarding the evolving relationships between sources of product information and consumer knowledge, from the earlier to the later 1990s, based on cultural and market factors during that time. Advertising and Product Knowledge The importance of advertising as a transforming market force in the United States has been well established (Goodrum and Dalrymple 1990; Laird 1998; Norris 1990). Moreover, although some consumers are ambivalent about advertising, it serves as a significant source of product knowledge and brand information in consumer decision-making in mature market economies (Coulter et al. 2001; Pollay and Mittal 1993; Shavitt, Lowrey, and Haefner 1998). In the early 1990s, advertising in Hungary was in its infancy. Consumers in post-Communist societies reported strong skepticism about advertising, which often had been viewed as government propaganda intent on unloading low-quality, outdated goods on consumers (Feick and Gierl 1996; Vegh 1997). Perhaps not surprisingly, these relatively low levels of advertising, coupled with consumer skepticism, resulted in little reliance on advertising as an information source in the early 1990s in Hungary (Feick et al. 1993). Thus, we expect a weak association between advertising and product knowledge early in the transition. In the later 1990s, both market and cultural factors suggest a stronger association between advertising and product knowledge. First, there was an explosion of advertising generally in Hungary throughout the 1990s; in constant dollars, overall expenditures increased dramatically from 1990 to 2000advertising expenditures on TV were 34 times greater, radio was 9 times greater, and outdoor was 195 times greater (see appendix). Specifically, media alternatives related to cosmetics increased in the 1990s Hungarian consumers had greater access to satellite TV, as well as more privatized stations, and more domestic and foreign fashion magazines had come on the market (Cosmetics Industry 2001; Vegh 1997). These media alternatives provided international firms the ability to introduce cosmetics to a broader market and to create advertising designed to inform consumers about important attributes and

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009

Coulter et al. / CONSUMER PRODUCT KNOWLEDGE 607

provide advice on how to use cosmetics. A 32-year-old shop manager for Arzenl Diszkont (a discount store in Budapest stocking cosmetics and household cleaning products) summarized the increased importance of media in informing customers: Television, radio, magazines. All the major newspapers and magazines are advertising. It is, of course, a big help for the merchants. Customers see it often and then they hear about itsee it on billboards and so on. They come in, they buy it. . . . A professional cosmetician comes here . . . this is very popular. . . . People are often, thanks to the advertising and TV, trying many things. (1998 industry informant; onsite translation) Consequently, we argue that consumers perceived advertising as providing valuable product information later in the 1990s, suggesting a stronger relationship between advertising and self-reported product knowledge. In summary: Proposition 1: The positive association between attention to advertising and self-assessed product knowledge will be stronger in the late 1990s than in the early 1990s. Interpersonal Sources and Product Knowledge The seminal work of Katz and Lazarsfeld (1955) focused attention on word-of-mouth communications as a significant source of market information. Many noted that a critical factor of the influencer was having product or marketplace knowledge that served to ensure the information they conveyed was accurate and reliable (Burt 1999; Feick and Price 1987; King and Summers 1970; Myers and Robertson 1972). Recently, the idea of actively harnessing word-of-mouth to diffuse market information has received heightened attention as a powerful marketing tactic (Gladwell 2000; Godin 1999; Rosen 2000). In the early 1990s, there were few cosmetic products available, and companies engaged in minimal advertising about those goods. Women perceived that relatively few individuals had good information about cosmetics and hence had little incentive to solicit information about cosmetics from friends and sales representatives (Feick et al. 1993). The unprecedented influx of new cosmetic products and brands, and the extensive marketing efforts by firms in the late 1990s, suggest that more women would have become more knowledgeable about cosmetics and therefore would be useful as information sources (Coulter, Feick, and Price 2002; Dawar, Parker, and Price 1996; Feick, Price, and Higie 1986). In addition, the marketing manager for Azr and the shop manager for Higinia zlethz (personal interviews conducted in Budapest, Hungary, 1998) indicated that both domestic and foreign

firms had instituted programs to develop the expertise and customer service skills of their salespeople. These market changes suggest that the acquisition of information from friends and salespeople would be more important as a source of product knowledge in the later than in the early 1990s. Thus, we expect: Proposition 2: The positive association between use of interpersonal sources and self-assessed product knowledge will be stronger in the late 1990s than in the early 1990s. Personal Search, Product Trial, and Product Knowledge In addition to attending to advertising and influential others, the literature substantiates that consumers often engage in external search, accessing other marketer-supplied information (e.g., reading labels) and engaging in product and brand trial (Hoch and Deighton 1989; Hoch and Ha 1986; Ratchford 2001). In the early 1990s, with low relative knowledge, a lack of trusted marketer-originated information, and few friends and acquaintances knowledgeable about cosmetics, Hungarian women invested their own time and effort in seeking cosmetics information (James 1995). These results suggest a strong positive association between personal investment in information seeking and self-reported product knowledge in the early 1990s. As the decade progressed, women were exposed to more cosmetics products and brands, witnessed an increased presence of marketing tactics such as advertising, had access to greater numbers of individuals who were informed personal sources, and developed heuristics in choice (Coulter et al. 2003). Hence, we expect that Hungarian women in the later 1990s will have a reduced need to carefully examine products and their contents, having substituted less time-costly sources of information. Thus, we expect that the relationship between personal search and product knowledge would be weaker later in the transition. To summarize, we propose: Proposition 3: The positive association between personal search and self-assessed product knowledge will be weaker in the late 1990s than in the early 1990s. Alba and Hutchinson (1987) posited that familiarity or accumulated product experience serves as a major component of consumer knowledge, and an empirical study by Park et al. (1994) demonstrated that product experience was the most important predictor of consumers assessments of their own knowledge. Research has repeatedly acknowledged the critical role of product or brand experience in affecting consumer knowledge in developed market economies, particularly with regard to new products (Hoch and Deighton 1989; Hoch and Ha 1986).

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009

608

JOURNAL OF THE ACADEMY OF MARKETING SCIENCE

FALL 2005

In the transitional economy context, product experience as a source of information is particularly complicated. Under Communism, consumers had few alternatives in most product categories. A promotions manager for Hungarian Promotion Services (1998, industry informant) reported about the Hungarian cosmetics market in the early 1990s, There were no international companies. The customers had . . . no choice. Thus, during the early part of the decade, if one asked consumers about repeat purchasing (i.e., buying products used in the past), it typically meant repeat purchase of relatively lowquality Central and Eastern European products. Women bought these products not because of high commitment but because of lack of choice (Feick, Coulter, and Price 1995; James 1995). Thus, in the early 1990s, we should expect that buying brands used in the past would not necessarily be linked to consumers assessments of greater product knowledge. In the later 1990s, however, with increased product and brand availability, and intensive marketing campaigns, industry representatives report on Hungarian womens interest in trying new cosmetics: So consumers are very interested in trying everything thats new (Procter & Gamble brand manager, Budapest, Hungary; industry informant, 1998) and There are brandloyal people. But the housewives, they like to try many things (shop manager, Arzenl Diszkont, Budapest, Hungary, industry informant, on-site translation, 1998). We argue that as Hungarian women tried and repeat-purchased cosmetic brands, by the later 1990s, buying brands used in the past took on a new meaning, that is, one more about commitment to the brand than about habitual purchasing. Women had the opportunity to try brands and learn about which brands best met their needs. Thus, we anticipate that by the later 1990s, there would be a positive relationship between buying brands used in the past and womens assessments of their own knowledge. To summarize, we propose the following: Proposition 4: There is no relationship between brand experience and product knowledge in the early 1990s and a positive relationship in the late 1990s. Sources of Market Information, Product Knowledge, and Confidence in Choice Because of marketers interest in developing consumer loyalty, research has attempted to understand how consumers become more confident in their product and brand choices (Alba and Hutchinson 1987, 2000; Fournier and Yao 1997; Verlegh and Steenkamp 1999). Perhaps not surprisingly, more knowledgeable consumers are more confident consumers; in other words, the more one knows, the more confident one is in product and brand choices (Alba

and Hutchinson 1987, 2000; Bettman and Park 1980; Biswas and Sherrell 1993; Patton 1984). Thus, we expect: Proposition 5: In both 1992 and 1998, product knowledge will mediate the effects of the information sources on consumers confidence in choice. METHOD AND MEASUREMENT Survey Data Collection We used survey data collected in Budapest in June 1992 and in October 1998 as the primary means to examine our propositions. The data were collected via structured personal interviews with adult women; the survey focused on the cosmetics product category. The survey questions were written in English, translated into Hungarian, back translated, and pretested on Hungarian women. We assessed womens perception of their cosmetics knowledge and their confidence in choosing cosmetics. Measures of these constructs as well as their measures of association are detailed in Table 1. Respondents also answered questions (5-point scale items; 1 = strongly disagree, 5 = strongly agree) related to information sources that asked, When choosing a cosmetics product, I rely on the advice of salespeople, try to get advertised brands, read the labels of several brands, get the advice of a friend, and buy products that I have used in the past. Additional questions included a standard battery of demographics: age, income, education, marital status, household size, and employment, as well as home access to cable television or satellite TV, and media use. For both data collection efforts, we used multistage area sampling in which the neighborhoods of Budapest were included in the sampling frame in proportion to their relative population within the city. Interviewers made at least three attempts to contact addresses included in the sample before substituting a replacement address (additional details of the sampling procedures are available from the authors). Trained women interviewers indicated the information would be used by university researchers and offered assurances of confidentiality. In 1992, 357 households contacted yielded 300 completed interviews, with a refusal rate of 19 percent. We report data on the 291 (of 300) respondents who completed the questionnaire in its entirety. In 1998, 547 attempted contacts yielded 340 completed interviews. Of these attempted contacts, 57 were ineligible (a bad address, the person moved, etc.), and 68 refused to participate, thus the refusal rate was 13.9 percent (68/[547 57]). Table 2 provides sample survey characteristics for both data collections. With the exception of age, our sample statistics reflect the 1992 and 1998 population characteristics of Budapest (CIA 2003 Statistical Yearbook of Hungary, 2001 2002); weighting the data

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009

Coulter et al. / CONSUMER PRODUCT KNOWLEDGE 609

TABLE 1 Knowledge and Choice Confidence Measurement: 1992 and 1998


1992 Cosmetics product knowledge How much do you know about cosmetic products? How much do you know compared to your friends? How much do you know about the important things to consider when buying these products? a Confidence in choice of cosmetics In general, I am confident that I make good choices when I buy cosmetics. Im confident that I buy good cosmetics for the money I pay.
a,b

1998 a = .88

a = .86

r = .50

r = .47

a. Items are 5-point Likert-type items, with 1 = strongly disagree and 5 = strongly agree. b. Park, Mothersbaugh, and Feick (1994).

discussed aspects of the transition, cosmetics preferences, information search, purchase, and use. The first focus group was conducted with six English-speaking Hungarian women; the second group included five women and was conducted in Hungarian with the assistance of a translator. During the second time period, August 1998, we interviewed and then went shopping for cosmetics products with three women in Budapest and one in Miskolc (a city of 100,000 in northeastern Hungary described as less urban and more red than Budapest with higher levels of unemployment, fewer economic opportunities, and smaller numbers and variety of imported products and retailing options) (Timr 2001). We first met each woman in an informal interview setting and used preset questions to learn about her personal history as well as cosmetic knowledge, purchases, brand preferences, and related issues. All interviews, shopping trips, and field notes were transcribed and scrutinized by hand and with the aid of a computer-based text analysis package, NUD*IST. FINDINGS

TABLE 2 Demographic Characteristics of the 1992 and 1998 Samples


Demographic Characteristics Age (percentage) 18-29 30-39 40-49 50-59 60 and older Marital status (percentage) Married Divorced/separated Widowed Single Currently employed (percentage) Education (percentage) Grade school Some to completed high school Some to completed college Graduate degree Average household size (people) Average years living in Budapest a Average household income per month 1992 10.7 19.1 21.0 11.8 28.0 53.3 18.4 15.3 13.0 59.8 31.8 48.0 16.9 4.3 2.7 36.9 14,341 HUF 1998 20.6 12.1 19.4 17.8 30.3 49.4 14.6 19.3 16.7 38.5 22.2 55.3 21.9 0.6 2.8 39.1 71,801 HUF

Assessing Product Knowledge and Choice Confidence To examine across-time (1992 versus 1998) measurement invariance for our focal constructs, product knowledge and choice confidence, we used confirmatory factor analysis. We first examined the measurement model to ensure configural invariance (Steenkamp and Baumgartner 1998) and found a very good fit, c 2(8) = 2.65, p > .95; all specified factor loadings (ranging from .57 to .93) were significantly greater than zero. The discriminant validity between the constructs is indicated by correlations well below unity (r92 = .28, r98 = .42). Second, we constrained factor loadings to be equal for each measure across the two time periods. The fit of the constrained measurement model (measured by the chi-square difference test, c 2diff (3) = 4.65, p > .19) did not change significantly, indicating that the factor loadings between the two time periods are invariant. Thus, we conclude that the measures of the constructs of knowledge and confidence in choice are equivalent between the two time periods in the study. Recall the quote from the Procter & Gamble brand manager in 1998, who stated that Hungarian women have learned a lot [about cosmetics], but basically they dont know much. While Hungarian women consumers undoubtedly know more about cosmetics in 1998 than they did in 1992, consistent with the brand managers perspective, our survey data suggest that womens perceptions of their cosmetic knowledge remain low (M92 = 2.63 vs. M98 = 2.68 [on a 5-point scale, 5 reflecting greater

a. HUF = Hungarian Forints. At the time of the 1992 data collection, 77 HUF = US$1; at the 1998 data collection, 222 HUF = US$1.

by age, however, did not alter our findings. Our results are based on analyses of unweighted data. Qualitative Data Collection We elaborate on our survey findings by drawing on qualitative data acquired during two time periods in Budapest. The first qualitative data collection, December 1991, involved two 1.5-hour focus groups during which women

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009

610

JOURNAL OF THE ACADEMY OF MARKETING SCIENCE

FALL 2005

TABLE 3 Mean Values for Information Sources: 1992 and 1998


1992 When choosing cosmetics products, I . . . Advertising a . . . try to get advertised brands. Interpersonal sources a . . . usually get the advice of a friend or acquaintance. a . . . rely on the advice of salespeople. Personal search a . . . usually read the labels of several brands of cosmetics products. Brand experience a . . . usually buy brands that I have used in the past. M 2.23 2.18 2.41 3.99 3.01 SD 1.19 1.39 1.35 1.19 1.41 M 1.88 2.06 1.95 3.37 3.61 1998 SD 1.17 1.33 1.15 1.54 1.39 t-Value 3.66* 1.03 4.64* 5.61* 5.33*

a. Five-point Likert-type item, with 1 = strongly disagree and 5 = strongly agree. *p 01.

knowledge], t604 = .54). This nonsignificant difference between the 1992 and 1998 means is likely explained by the change in the reference point. With so much information about cosmetics available on the Hungarian market, women surely are more knowledgeable about cosmetics in 1998 than they were in 1992. However, undoubtedly the abundance of products and new information on the market makes them feel as if they still do not know much about cosmetics. As we have noted, the Procter & Gamble brand manager, when asked, Are [Hungarian women] confident . . ., answered, Umm, no, I dont think so (1998; personal interview). Our survey data indicate that Hungarian women are not exceedingly confident in their choices but that they are becoming more confident. The mean score on the confidence scale increased significantly from 1992 (M = 3.27) to 1998 (M = 3.81) (on a 5-point scale, 5 reflecting greater confidence; t591 = 6.02, p .001). Thus, although we found that self-perceptions of knowledge did not change during the period of study, confidence in choice did increase. Sources of Market Information In our 1992 and 1998 surveys, we assessed the importance of five sources of market information (i.e., advertising, friends, salespeople, personal search, and brand experience) to women when buying cosmetics. Table 3 presents the items (e.g., for advertising, participants responded to, When choosing cosmetics products, I try to get advertised brands [5-point Likert-type item with 5 = strongly agree]), item means for 1992 and 1998, and the t-test results designed to assess a difference in importance between 1992 and 1998. Our results indicate that women did not find advertising as particularly important in either year yet reported more importance in 1992 than in 1998. Advice from interpersonal sources also was low in both years. Interestingly, advice from a friend was not significantly different between 1992 and 1998, whereas advice from a

salesperson significantly declined over the period. Reading labels was the highest rated information source, but it, too, declined in importance from 1992 to 1998. Only brand experience increased significantly in importance from 3.01 in 1992 to 3.61 in 1998. Table 4 includes intercorrelations of the importance of sources of market information as well as the correlations of these sources with a set of respondent characteristics. In both 1992 and 1998, younger women in larger households, having cable TV, and exhibiting more extensive media use reported greater importance of advertising. In both years, the importance of salespeople was linked only to media use, whereas the importance of friends was associated with being younger in both years and media use only in 1992; in 1998, employed women in larger households reported greater importance of friends as an information source. In 1992, younger, employed, better educated women who paid more attention to the media reported greater importance of personal search; in 1998, in addition, higher income and being connected to cable or satellite TV were also associated with increased importance of personal search. Finally, in 1992 (but not in 1998), older, less educated women with lower incomes living in smaller households reported an increased importance of brand experience. Tests of Propositions Propositions 1-4 focused on over-time change in the relationship between Hungarian womens self-reported product knowledge and their assessment of the importance of advertising, interpersonal sources, personal search, and brand experience in choosing cosmetics. To test these propositions, we ran regressions for both 1992 and 1998 that examined self-assessed knowledge as the dependent variable and the independent variables discussed previously. We also included the demographic variables age and education, as well as media access (whether the consumer had cable TV or a satellite dish) and media use

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009

Coulter et al. / CONSUMER PRODUCT KNOWLEDGE 611

TABLE 4 Correlations Between Information Source Importance and Respondent Characteristics: 1992 and 1998
Advertising 1992 Respondent Characteristics Age Average household size (people) a Marital status b Currently employed Education Average household income/month c In-home cable TV c In-home satellite TV d Media use Information source Interpersonal: salespeople Interpersonal: friends Personal search Brand experience .25** .14* .05 .00 .08 .02 .15** .12* .33** .30** .24** .19** .29** 1998 .27** .15** .08 .03 .09 .12 .12* .01 .26** .26** .20** .30** .21** Interpersonal: Salespeople 1992 .08 .08 .03 .05 .08 .00 .03 .08 .18** .16** .11 .16** 1998 .10 .01 .06 .01 .02 .00 .01 .03 .21** .30** .22** .04 Interpersonal: Friends 1992 .17** .04 .04 .11 .01 .05 .13* .00 .26** 1998 .25** .13* .08 .13* .03 .09 .03 .09 .03 Personal Search 1992 .31** .11 .04 .14* .16** .06 .10 .02 .13* 1998 .32** .22** .09 .20** .15** .26** .12* .04 .32** Brand Experience 1992 .20** .14* .04 .11 .15** .13* .13* .01 .02 1998 .05 .01 .04 .03 .09 .10 .00 .08 .04

.07 .10

.30** .05

.19**

.02

a. Coded as 1 = married, 0 = all other categories. b. Coded as 1 = employed, 0 = all other categories. c. Coded as 1 = subscriber, 0 = not a subscriber. d. Coded as 1 = not at all likely, 5 = very likely that media (TV, radio, magazines, outdoor) would be a way to find out about new cosmetics products. *p .05. **p .01.

(womens self-report about the extent to which TV, radio, outdoor, and magazines were sources of new product information) as control variables in the regressions. Although relevant, we did not include income as a control variable because of a high refusal rate on the income question and resultant reduction in the sample size. Perhaps because of incomes relatively high correlation with education (.52), including income in the analyses does not change any of our conclusions. We compare the regressions between 1992 and 1998 using either an omnibus Chow (1960) test for the set of coefficients or a single degree-of-freedom Chow test to examine propositions about a particular coefficient. For both 1992 and 1998, we ran two regressions with product knowledge as the dependent variable. The first regression included only the independent variables (i.e., advertising, friends, salespeople, personal search, and brand experience), and the second regression included the independent variables and added the control variables (age, education, media access, and media use). The R2s for the regressions including only the independent variables were .09 and .25, respectively, for 1992 and 1998. When the control variables were added, R2 increased to .20 and .39, respectively. Overall, the regressions explain more variance in consumer knowledge in 1998 than in 1992, and a Chow test supports the conclusion that the regression coefficients as a set (including the independent and control variables) are different between the two years, F(11, 535) = 3.12, p < .01. Table 5 presents our hypothesized relationships, as

well as the standardized beta coefficients for the 1992 and 1998 regressions. Proposition 1 proposed a positive relationship between attempting to buy advertised brands and perceived product knowledge that would increase in strength as the decade progressed. In 1992, the relationship between trying to get advertised brands and product knowledge was positive, although nonsignificant (b 1992 = .08, p > .05). Comments during the 1991 focus groups reflected ambivalence about advertising. Several members reported on their skepticism with regard to advertising and/or the high prices of advertised products. For example, Suzie (translated) says, She doesnt believe in advertisements, and Elena (translated) says, She cannot afford advertised products. Others complained that they would see advertisements for cosmetics that were not currently available in Budapest. In 1998, survey results indicated that the relationship between attempting to buy advertised brands and product knowledge was positive (b 1998 = .16, p < .01) and significantly greater than in 1992, F(1, 556) = 12.84, p < .01. Our 1998 depth interviews with shoppers revealed advertisings increased role in educating consumers about new cosmetic products, brands, and attributes. For example, in response to the question, How do you learn about cosmetics? va said, I read the magazines, the newspapers. . . . Now, magazines advertise the cosmetic products; that helps us very much. Ester reported that Maybelline really just started to advertise on TV on local Hungarian channels, but that she had not had a chance to try it yet. I

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009

612

JOURNAL OF THE ACADEMY OF MARKETING SCIENCE

FALL 2005

TABLE 5 Propositions and Regressions on Product Knowledge: 1992 and 1998


Proposed Association a with Product Knowledge 1992 When choosing cosmetics products, I . . . b Advertising . . . try to get advertised brands. (Proposition 1) b Interpersonal sources . . . usually get the advice of a friend or acquaintance. (Proposition 2) . . . rely on the advice of salespeople. (Proposition 2) b Personal search . . . usually read the labels of several brands of cosmetics products. (Proposition 3) b Brand experience . . . usually buy brands that I have used in the past. (Proposition 4) Individual characteristics Age Education c In-home cable TV c In-home satellite TV d Media used 2 R 1998 Standardized b Coefficient 1992 1998

Positive Positive Positive Positive No association

More positive More positive More positive Negative Positive

.08 .02 .01 .15* .17** .04 .25** .00 .00 .11 .20

.16** .04 .08 .33** .07 .09 .25** .18** .05 .03 .39

NOTE: The variance inflation factor ranges from 1.08 to 1.4. a. For scale items, see Table 1. b. Five-point Likert-type item, with 1 = strongly disagree and 5 = strongly agree. c. Coded as 1 = subscriber, 0 = not a subscriber. d. Coded as 1 = not at all likely, 5 = very likely that media (TV, radio, magazines, outdoor) are used to find out about new cosmetics products. *p .05. **p .01.

[need to] find the color I like. Alexandra is cautious about cosmetic products that she tries, and if she hasnt seen them advertised, she says, I dont dare try them. She pays attention to Cosmopolitan and prefers the English to the Hungarian versionalthough you cannot get [the English version] in Miskolc, I am lucky because [a faculty member] at the University . . . subscribe[s] to this magazine, and I can read it. And there are fashion models as well, and cookery advice, and so on. So, it is much nicer. Thus, our results support an increased importance of advertising in the development of product knowledge during the 1990s. Proposition 2 proposed that a positive association between use of friends and salespeople and cosmetics product knowledge would increase in strength as the decade progressed. Our survey results, however, indicate no significant association between the use of friends and product knowledge in either 1992 or 1998 (b 1992 = .02, p > .05; b 1998 = .04, p > .05), and similarly, no significant association between the use of salespeople and product knowledge in the two time periods (b 1992 = .01, p > .05; b 1998 = .08, p > .05). Although our survey data do not indicate that friends and salespeople are important sources of product knowledge, our qualitative data suggest that women and sales representatives familiar with cosmetics existed in 1992 and may have been more accessible in 1998. In a 1991 focus group, several women indicated reliance on friends who used cosmetics and friends who

worked with cosmetics (e.g., one a shop keeper and the other an Avon representative) to provide them with information about cosmetics and opportunities to buy products, yet another woman reported most women didnt have special expertise, everybody is lost. In 1998, all of our consumer shoppers discussed other womens roles in introducing them to cosmetic brands and products, and educating them in the use of cosmetics. For example, Judit informed us that her daughter and friends were key sources of information about cosmetics, a product category about which she is not knowledgeable and is mostly ambivalent. Judits friends were very instrumental in introducing her to California Fitness, a multilevel organization that offers cosmetics, health products, and exercise facilities, to which she is very loyal. We also found that some Hungarian women have been important resources in their roles as Avon, Amway, and Oriflame sales representatives. Alexandra thinks they are ubiquitous, There is everywhere a person who sells Avon. Alexandras Avon rep, one of her students, tells her what is on sale, [and] if I ask whether [the product] is good or not, if she tried it, she will say. Thus, even though there is no support for Proposition 2 in the quantitative results, the qualitative data are less clear. Proposition 3 proposed that the positive association between personal search and knowledge would become weaker as the decade progressed. We asked women about the extent to which they read labels of alternative brands

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009

Coulter et al. / CONSUMER PRODUCT KNOWLEDGE 613

before choosing cosmetic products and found a significant positive relationship between this aspect of personal search and product knowledge in 1992 and in 1998 (b 1992 = .15, p < .05; b 1998 = .33, p < .01). In contrast to our expectations, however, the coefficient increased significantly from 1992 to 1998, F(1, 556) = 15.13, p < .01. Our qualitative data support our survey results. During our trips and extended visits to the region during the decade, we observed women standing in aisles reading labels to a much greater extent than we have observed in developed market economies. In a 1991 focus group, Alison emphasized the importance of window shopping in Budapest to know what was available and what to buy (translated), She has a walk in the city. And shes watching the window displays. And then she sees something, then she goes and buys it right away because it may not be there a week later. Elicia visits regular shops and supermarkets and a flea market to find out about cosmetics products. Moreover, during our 1998 consumer shopping trips, we were privy to the womens attention to reading labels; commenting on contents, packaging, and price; and making selections based on seeing the products and brands on the shelvesall contributing to their cosmetics knowledge base. For example, Ester commented on various lipsticks on display, I like lipstick and the lip liner . . . I dont know the color I use. She selected one from the shelf and admiringly said,I was thinking about using this sparkling one. I might try this one. While shopping with va, she carefully looked at the hand and nail creams, discussing the qualities of Hungarian-branded Caomilla , Germanbranded Nivea, and French-branded LOral. Alexandra picked up a new cream by Nivea and reading the label described why she would like to buy it, This is a new product. It saves the quality of the skin. It doesnt only give fat to your skin, but it keeps it in good quality. Later, she mentioned, I just saw [the face cream] at the shop window, and I read [the label], and I said, Oh, that would be nice to try. Thus, both our survey and qualitative data indicate that Hungarian women in 1992 and 1998 expend their time and effort in personal search, attempting to learn more about the cosmetics products newly available to them. Proposition 4 focused on the relationship between brand experience and product knowledge. We expected to find no relationship in 1992 and a positive relationship in 1998. Instead, we found a significant negative relationship between brand experience and knowledge in 1992 (b 1992 = - .17, p < .01) and a positive (although nonsignificant) relationship in 1998 (b 1998 = .07, p > .05). The Chow test results indicate that the difference between the 1992 and 1998 coefficients is significant, F(1, 556) = 16.52, p < .01, indicative of change in the relationship between buying brands used in the past and product knowledge. Although different in specifics than our prediction, the change in the relationship is movement in the direction we expected: toward a more positive link between knowledge and brand

experience. Our qualitative data are illustrative. In 1998, Ester reflected that the market is different than the early 1990s when we didnt have many [cosmetic products] . . . now . . . there are so many brands you can choose from. Cosmetic brands everywhere you want. She went on to report that I bought this [brand] last time. It is a game. . . . It seems alright now. . . . I also look at [another brand] . . . I think I tried it a long time ago. And in seeing a brand new to the market, she laughingly comments, Maybe [Ill buy that one] next time. va concurs, I didnt get cosmetics in Hungary in 1990 . . . and suddenly we can buy everything, and also reports trying different brands, contradicting herself as she spoke, I use LOral every time . . . sometimes I try others . . . and I come back to LOral. Finally in Proposition 5, we expected to find that after controlling for demographic characteristics, the effect of the information sources on choice confidence would be mediated by consumer knowledge. Following Baron and Kenny (1986), we estimated three regressions (see Table 6) for each year: choice confidence with the information sources as predictors (Regression 1), knowledge as a predictor (Regression 2), and the information sources and knowledge as predictors (Regression 3). For both years, knowledge was a significant predictor of choice confidence (see Regression 2). In 1992 Regression 1, only advertising had a significant direct effect on choice confidence. This coefficient did not decrease in size after including knowledge in the model, hence knowledge did not mediate the effects of advertising (or the other independent variables) on choice confidence. For 1998, brand experience and media use were significant predictors of choice confidence. The coefficients did not change with the inclusion of knowledge; thus, the results indicate that knowledge did not mediate the effects of either brand experience or media use on confidence in choice. Proposition 5 was not supported. DISCUSSION Our historical approach provides a unique perspective to consider the evolution of the effects of advertising and other sources of information on product knowledge in Hungary. We have focused on cosmetics, a product category that has become increasingly important to Central European women in the postsocialist period, and our article uses qualitative data to provide greater understanding of the relationships we observed in the quantitative results. Substantial research on developed market economies has reported that marketing and advertising tactics (e.g., Kempf and Smith 1998; Pollay and Mittal 1993; Shavitt et al. 1998) are useful in creating product and brand awareness, as well as informing consumers about product attributes and benefits. Our findings in the early 1990s, at the

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009

614

JOURNAL OF THE ACADEMY OF MARKETING SCIENCE

FALL 2005

TABLE 6 Mediation Analyses for Choice Confidence:a 1992 and 1998


1992 Regressions 1 When choosing cosmetics products, I . . . b Advertising . . . try to get advertised brands. b Interpersonal sources . . . usually get the advice of a friend or acquaintance. . . . rely on the advice of salespeople. b Personal search . . . usually read the labels of several brands of cosmetics products. b Brand experience . . . usually buy brands that I have used in the past. Individual characteristics Age Education c In-home cable TV c In-home satellite TV d Media used a Knowledge 2 R 2 3 1 1998 Regressions 2 3

.18** .08 .04 .06 .09 .03 .12 .02 .00 .00 .07

.17* .09 .04 .03 .13* .04 .07 .01 .01 .03 .19** .10

.04 .03 .05 .07 .39** .06 .07 .01 .01 .17** .20

.05 .03 .07 .06 .41** .02 .02 .05 .05 .15* .32** .31

.22** .05

.33** .11

NOTE: The variance inflation factor (VIF) ranges from 1.04 to 1.51 for Regressions 1 and 3; because there is just one predictor in Regression 2, VIF = 1.0. a. For scale items, see Table 1. b. Five-point Likert-type item, with 1 = strongly disagree and 5 = strongly agree. c. Coded as 1 = subscriber, 0 = not a subscriber. d. Coded as 1 = not at all likely, 5 = very likely that media (TV, radio, magazines, outdoor) are used to find out about new cosmetics products. *p < .05. **p < .01.

onset of the transition, indicate that advertising was not related to product knowledge. Later in the 1990s, as the Hungarian marketplace became more like that of Western market economies (with the increased presence of advertising and promotion, for example), advertising became an important antecedent of self-assessed knowledge. Thus, as the decade progressed, the relationship between advertising and product knowledge in the Hungarian cosmetics market began to look more like the relationship expected in developed market economies. Interestingly, we found that advertising was predictive of confidence in choice in the early 1990s and that its effect was not attenuated by consumer knowledge. By the late 1990s, advertising was not a significant factor in consumers choice confidence, whether or not we controlled for their knowledge. In combination, the results suggest that although consumers may not have learned from advertising in the early 1990s, advertising (which was quite limited) acted as a quality signal enhancing choice confidence, a finding that is inconsistent with an argument that consumers were skeptical about advertising during this time period. By the late 1990s, increased advertising may have enabled consumers to learn from advertising (hence the strong positive relationship to product knowledge in 1998) but diminished advertising per se as a quality signal. Consistent with findings in developed market economies (e.g., Alba and Hutchinson 1987, 2000; Bloch, Sherrell, and Ridgway 1986; Gregan-Paxton and John

1997), our research documents that personal search shopping and looking for products and carefully reading product labels and considering product ingredientsis positively related to product knowledge. Although we anticipated that personal search would decrease in importance as alternatives such as advertising became more viable sources of information over time, we found personal search to be strongly related to product knowledge throughout the decade. Based on our qualitative work, the most likely explanation of the sustained impact of personal search is the continued introduction of new products in the market and consumers desire to personally observe and/or try products. In addition, this period saw increased involvement in appearance and cosmetics, potentially contributing to higher levels of personal search (Coulter et al. 2003; Ratchford 2001). Finally, this period also saw the deterioration of other favored choice heuristics such as packaging and country-of-origin as quality signals possibly contributing to the sustained importance of personal search (Coulter et al. 2002; Coulter et al. 2003). In general, our findings are consistent with what we would expect in a stable market economysearch contributes to consumer knowledge, and knowledge enhances choice confidence. We can speculate that high levels of market turbulence combined with the lack of a vocabulary for evaluating cosmetics products helps explain why personal search did not significantly contribute to consumers choice confidence in 1992 (West, Brown, and Hoch 1996).

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009

Coulter et al. / CONSUMER PRODUCT KNOWLEDGE 615

Surprisingly, the use of interpersonal sources, strongly influential in providing product-related information in developed Western markets (e.g., Arndt 1968; Burt 1999; Dawar et al. 1996; Feick et al. 1986), are not predictive of Hungarian womens cosmetics knowledge in either 1992 or 1998. A plausible explanation from our data is that women do not believe that friends and acquaintances or even salespeople have enough information about cosmetics and personal care to be credible, and this limits reliance on them. Another explanation for the lack of effect of salespeople, however, is tied to trust. Salespeople were for years, in essence, government employees who were unfriendly and unhelpful and there to sell whatever goods (authentic or inauthentic) that were on the shelves. Trust in (and then reliance on) salespeople may develop in time, but the years since the beginning of the transition may be less time than is required for this trust to develop. Furthermore, we find no relationship between interpersonal sources and choice confidence in either 1992 or 1998. Thus, our study marks a useful boundary condition for the impact of interpersonal sources. Literature focused on developed market economies has reported a positive relationship between brand experience and product knowledge (e.g., Fournier and Yao 1997; Hoch and Deighton 1989; Hoch and Ha 1986; Oliver 1999). Our findings illustrate a change in the relationship between these two variables over timemovement from a negative association in the early 1990s to a positive relationship by the late 1990s. Our qualitative data help to give meaning to these findings, that is, in the early 1990s, women purchased the same East European products that they had bought before because they were available, not because they had determined they were higher quality products. In fact, it has been reported that consumers were aware of the low quality of products (Drakulic 1993). Our results suggest that at the beginning of the transition, sticking with the brands bought in the past was a characteristic of individuals who had little knowledge about cosmetics. With the emergence of a more developed market economy by the late 1990s, knowledgeable consumers were engaging in repeat purchasing of a brand. Thus, early in the transition, repeat purchasing represents a mechanism to navigate a confusing marketplace and perhaps a way to reduce perceived risk (e.g., I know that the product I have been using is bad, but I dont know how much better will be the new, more expensive alternatives.). Later in the transition, we find the expected link between repeat purchasing and knowledge. Our findings help us to understand how the evolution of a transitional economy can call into question wellestablished relationships between product knowledge and sources of market information. Our examination suggests that throughout Hungarys first decade of transition to a market economy, advertising has increased in importance, whereas interpersonal sources remain relatively

inconsequential. We found that personal search was strongly related to product knowledge throughout the decade and that brand experience took on a different meaning from the earlier to the later 1990searlier associated with buying lower quality Central European brands and later associated with buying higher quality Western brands. FUTURE RESEARCH AND MANAGERIAL IMPLICATIONS We demonstrated that our hypothesized antecedents of knowledge developed through our understanding of the literature of developed market economies explained greater variance in the late 1990s when the Hungarian marketplace began to resemble that of a developed Western economy. Thus, our research contributes to literature that seeks to understand the applicability and boundary conditions of consumer behavior relationships established in Western literature. The transitional economies of Central and Eastern Europe are assuming an ever more prominent role in the European Union and the expansion plans of multinational companies. On the basis of our findings from Hungary reported herein as well as our research in the Czech Republic, Poland, Slovakia, and Romania, we speculate that consumer behavior relationships involving individual characteristics (e.g., personal search and product knowledge, and product knowledge and confidence in choice) may be more stable over time, whereas relationships that are affected by marketplace activities (e.g., product knowledge and marketing tactics, and confidence in choice and branded products) may be more sensitive to turbulence in the marketplace and therefore more changeable over time. As a point of comparison, future research might seek to examine the relationships between other individual characteristics, for example, product involvement and product knowledge, and/or product involvement and confidence in choice. Our results suggest that relationships between consumer skepticism toward advertising and marketing tactics, consumer knowledge, and choice confidence warrant further investigation. Ironically, despite documented high levels of consumer skepticism about advertising in Hungary, buying advertised brands had a direct positive effect on choice confidence in 1992, but no noticeable impact on product knowledge. We might anticipate that skeptical consumers would scrutinize advertising and engage in counterarguing such that effects on choice confidence in both periods would be fully mediated through product knowledge, rather than only in 1998 (Brown and Krishna 2004). Moreover, we might expect that if skepticism was higher in 1992 than 1998, the relationship between trying advertised brands and choice confidence would be lower in 1992 than 1998, rather than the reverse, as we found.

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009

616

JOURNAL OF THE ACADEMY OF MARKETING SCIENCE

FALL 2005

Future research should directly examine consumer skepticism, advertising effects, product knowledge, and choice confidence. Our results indicate that consumers are quite willing to spend time searching for product information and that product trial is important in providing credible evidence for future purchases. This finding that personal search has a strong, sustained relationship to product knowledge in both periods has important implications for management practice. For example, this result suggests the value of enhancing and complementing personal search strategies at the point of purchase as a mechanism for building product knowledge, rather than employing heavy advertising. Several aspects of our findings regarding reliance on personal sources remain perplexing and worthy of additional attention. In particular, future research should examine under what conditions consumers rely on personal sources, paying particular attention to differential access to opinion leaders and potential discrepancies in reported versus actual behavior. Additional effort should be expended to investigate under what conditions the use of interpersonal sources contributes to enhanced product knowledge versus conditions where use of interpersonal sources substitutes for acquiring additional product knowledge. Finally, future research should examine under what conditions the use of interpersonal sources enhances choice confidence either directly or as mediated through enhanced product knowledge. The positive value of informed interpersonal sources for enhancing product knowledge and choice confidence has been implicit in much research in developed market economies. In Budapest, in the early 1990s, there was a dearth of cosmetics, and cosmetic usage was discouraged in the years of socialism. Marketers dealing in product categories for which consumers have had little or no experience

will need to think creatively about how to familiarize consumers, encourage trial, and minimize consumers perceptions of financial risk. Advertising and product trial are obvious mechanisms to employ, and our results as well as information provided by industry informants (increased sales volume associated with advertising and promotional campaigns) indicate that consumers are sensitive to advertising efforts, even though they may not openly admit it. In addition, in Budapest, industry informants noted the difficulty of changing frontline employees mindsets from a sales-attendant mentality to a customer servicerepresentative mentality. Marketers are well-advised to invest in sales training programs designed to develop customer service personnel, as many multilevel marketers, e.g., Avon and Oriflame, have done. Personable and knowledgeable employees will be key to assisting and informing less knowledgeable, apprehensive consumers with their buying decisions. Furthermore, presenting product and brand information at point-of-purchase is likely to be effective particularly in light of the strong reliance on personal search and the potentially limited reach of other media. Finally, marketers might also work toward generating positive word of mouth, particularly among strong influencer groups, for example, opinion leaders and market mavens (Coulter et al. 2002). In new product categories, manufacturers and retailers might work together to encourage shopping with friends or acquaintances who have either product category or marketplace expertise. As we consider the boundary conditions for this research, we focused on Budapest, the largest city in Hungary, which accounts for about 20 percent of the countrys population. Because Budapest is a well-connected, metropolitan European city, our findings may not be nationally representative. Smaller cities and towns in Hungary are making the transition at a slower pace.

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009

APPENDIX Advertising Expenditures in Hungary by Medium, 1987-2003 a


1989 11.38 2.44 23.6 0.03 0.17 16.58 3.45 29.54 0.05 0.38 24.39 4.83 36.76 0.07 0.93 35.29 8.13 46.24 0.13 1.89 52.8 9.96 57.1 0.17 5.77 73.94 13.31 73.18 0.45 8.85 83.93 18.67 96.89 0.54 14.74 130.57 28.18 128.89 1.24 27.41 221.82 31.22 167.79 2.3 33.04 1990 1991 1992 1993 1994 1995 1996 1997 1998 371.5 33.94 208.62 2.04 43.24 1999 423.24 45.83 256.03 3.67 49.45 2000 577.8 53.69 288.36 4.8 74.36 2001 710.96 58.42 326.82 5.11 88.02 2002 897.92 65.49 348.22 6.2 109.15 2003 1,114.48 70.69 438.98 7.15 131.7

1987

1988

TV Radio Print Cinema Outdoor

5.31 1.24 15.09 0.01 0.03

7.76 1.74 18.87 0.02 0.07

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009

SOURCE: Euromonitor International (2003). a. All numbers in constant U.S. dollars times 1,000,000.

617

618

JOURNAL OF THE ACADEMY OF MARKETING SCIENCE

FALL 2005 Postsocialist Central Europe. Journal of Consumer Research 30 (September): 151-169. , Gerald Zaltman, and Keith S. Coulter. 2001. Interpreting Consumer Perceptions of Advertising: An Application of the Zaltman Metaphor Elicitation Technique. Journal of Advertising 30 (Winter): 1-22. Dawar, Niraj, Philip M. Parker, and Lydia J. Price. 1996. A Cross-Cultural Study of Interpersonal Information Exchange. Journal of International Business Studies 22 (September): 497-516. Dichter, Ernest. 1966. How Word-of-Mouth Advertising Works. Harvard Business Review 44 (November/December): 147-166. Drakulic, Slavenka. 1993. How We Survived Communism and Even Laughed. New York: Norton. Euromonitor International. 2003. Global Market Information Database: Advertising Expenditures in Hungary by Medium, 1987-2003. Retrieved from http://www.gmid.euromonitor.com Feick, Lawrence and Herbert Gierl. 1996. Skepticism About Advertising: A Comparison of East and West German Consumers. International Journal of Research in Marketing 13 (3): 227-235. , Robin A. Higie, and Linda L. Price. 1993. Consumer Search and Decision Problems in a Transitional Economy: Hungary, 1989-1992. Working paper. Marketing Science Institute, Cambridge, MA. , Robin Higie Coulter, and Linda L. Price. 1995. Consumers in the Transition to a Market Economy: Hungary, 1989-1992. International Marketing Review 12 (October): 18-35. and Linda L. Price. 1987. The Market Maven: A Diffuser of Marketplace Information. Journal of Marketing 51 (January): 83-97. , , and Robin A. Higie. 1986. People Who Use People: The Other Side of Opinion Leadership. In Advances in Consumer Research. Vol. 13. Ed. Richard J. Lutz. Provo, UT: Association for Consumer Research, 301-305. Fournier, Susan and Julie L. Yao. 1997. Reviving Brand Loyalty: A Reconceptualization Within the Framework of Consumer-Brand Relationships. International Journal of Research in Marketing 14 (5): 451-472. Friedman, Thomas L. 1999. The Lexus and the Olive Tree: Understanding Globalization. New York: Farrar, Straus & Girouz. Ger, Gliz, Russell W. Belk, and Dana Lascu. 1993. The Development of Consumer Desire in Marketizing and Developing Economies: The Cases of Romania and Turkey. In Advances in Consumer Research, Vol. 20. Eds. Leigh McAlister and Michael Rothschild. Provo, UT: Association for Consumer Research, 103-107. Gladwell, Malcolm. 2000. The Tipping Point: How Little Things Can Make a Big Difference. New York: Little, Brown. Godin, Seth. 1999. Unleashing the Ideavirus. New York: Hyperion. Goodrum, Charles and Helen Dalrymple. 1990. Advertising in America: The First 200 Years. New York: Harry M. Abrams. Gregan-Paxton, Jennifer and Deborah Roedder John. 1997. Consumer Learning by Analogy: A Model of the Internal Knowledge Transfer. Journal of Consumer Research 24 (December): 266-285. Hoch, Stephen J. and John Deighton. 1989. Managing What Consumers Learn From Experience. Journal of Marketing 53 (April): 120. and Young-Won Ha. 1986. Consumer Learning: Advertising and the Ambiguity of Product Experience. Journal of Consumer Research 13 (October): 221-233. Humphrey, Caroline. 1995. Creating a Culture of Disillusionment: Consumption in Moscow, a Chronicle of Changing Times. In Worlds Apart. Ed. Daniel Miller. London: Routledge, 43-68. James, Beverly. 1995. Learning to Consume: An Ethnographic Study of Cultural Change in Hungary. Critical Studies in Mass Communication 12:287-305. Katz, Elihu and Paul F. Lazarsfeld. 1955. Personal Influence. New York: Free Press. Kempf, DeAnna S. and Robert E. Smith. 1998. Consumer Processing of Product Trial and the Influence of Prior Advertising: A Structural Modeling Approach. Journal of Marketing Research 35 (August): 325-338. King, Charles W. and John O. Summers. 1970. Overlap of Opinion Leadership Across Consumer Product Categories. Journal of Marketing Research 7 (February): 43-50. Kligman, Gail. 1996. Women and the Negotiation of Identity in PostCommunist Eastern Europe. In Identities in Transition. Ed. Victoria E. Bonnell. Berkeley, CA: University of California, 68-91.

ACKNOWLEDGMENTS We greatly appreciate financial support for this research from the Marketing Science Institute, the University of Connecticut Research Foundation, the Center for International Business Education and Research at University of Connecticut, and the International Business Center at the University of Pittsburgh. REFERENCES
Alba, Joseph W. and J. Wesley Hutchinson. 1987. Dimensions of Consumer Expertise. Journal of Consumer Research 13 (March): 411454. and . 2000. Knowledge Calibration: What Consumers Know and What They Think They Know. Journal of Consumer Research 27 (September): 123-156. Arndt, Johan. 1968. A Test of the Two-Step Flow in Diffusion of a New Product. Journalism Quarterly 45 (August): 457-465. Baron, Reuben M. and David A. Kenny. 1986. The Moderator-Mediator Variable Distinction in Social Psychological Research: Conceptual, Strategic, and Statistical Considerations. Journal of Personality and Social Psychology 51 (December): 1173-1182. Batra, Rajeev. 1999. Marketing Issues in Transitional Economies. Boston: Kluwer Academic Publishers. Beatty, Sharon E. and Scott M. Smith. 1987. External Search Effort: An Investigation Across Several Product Categories. Journal of Consumer Research 14 (June): 83-95. Belk, Russell W. 1999. Leaping Luxuries and Transitional Consumers. In Marketing Issues in Transitional Economies. Ed. Rajeev Batra. Boston: Kluwer, 39-54. Bettman, James R. and C. Whan Park. 1980. Effects of Prior Knowledge and Experience and Phase of the Choice Process on Consumer Decision Processes: A Protocol Analysis. Journal of Consumer Research 7 (December): 234-248. Biswas, Abhijit and Daniel L. Sherrell. 1993. The Influence of Product Knowledge and Brand Name on Internal Price Standards and Confidence. Psychology and Marketing 10 (January/February): 31-46. Bloch, Peter H., Daniel L. Sherrell, and Nancy M. Ridgway. 1986. Consumer Search: An Extended Framework. Journal of Consumer Research 13 (June): 119-126. Braun, Aurel. 1999. Introduction: The Continuing Dilemmas of Transition. In Dilemmas of Transition: The Hungarian Experience. Eds. Aurel Braun and Zoltan Barany. Lanhan, MD: Rowman & Littlefield, 1-30. and Zoltan Barany. 1999. Dilemmas of Transition: The Hungarian Experience. Lanhan, MD: Rowman & Littlefield. Breslauer, George W. 1996. Identities in Transition: An Introduction. In Identities in Transition. Ed. Victoria E. Bonnell. Berkeley: University of California, 1-12. Brown, Christina L. and Aradhna Krishna. 2004. The Skeptical Shopper: A Metacognitive Account for the Effects of Default Options on Choice. Journal of Consumer Research 31 (December): 529-539. Burt, Ronald S. 1999. The Social Capital of Opinion Leaders. Annals of the American Academy of Political and Social Science 566 (November): 37-54. Chow, Gregory C. 1960. Test of Equality Between Sets of Coefficients in Two Linear Regressions. Econometrica 28 (3): 591-605. CIA. 2003. The World Factbook 2002. Retrieved from http:// www.cia.gov/cia/publications/factbook/geos/hu Cosmetics Industry in Hungary. 2001. Retrieved from http:// w w w. m a c . d o c . g o v / e e b i c / c o u n t r y r / h u n g a r y / r e s e a r c h / HUcosmetics.htm Coulter, Robin A., Lawrence Feick, and Linda L. Price. 2002. Cosmetics Opinion Leadership Among Women in the New Hungary. European Journal of Marketing 36 (11/12): 1287-1308. , Linda L. Price, and Lawrence Feick. 2003. Rethinking the Origins of Involvement and Brand Commitment: Insights From

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009

Coulter et al. / CONSUMER PRODUCT KNOWLEDGE 619 Laird, Pamela Walker. 1998. Advertising Progress: American Business and the Rise of Consumer Marketing. Baltimore: Johns Hopkins University Press. Lascu, Dana-Nicoleta, Lalita A. Manrai, and Ajay K. Manrai. 1993. Marketing in Romania: The Challenges of the Transition From a Centrally-Planned Economy to a Consumer-Oriented Economy. European Journal of Marketing 27 (November/December): 102-121. Miller, Daniel. 1987. Material Culture and Mass Consumption. Oxford, UK: Basil Blackwell. Money, R. Bruce and Deborah Colton. 2000. The Response of the New Consumer to Promotion in the Transition Economies of the Former Soviet Bloc. Journal of World Business 35 (2): 189-205. Mussey, Dagmar, Elena Bowes, Milan Ruzicka, and Nancy Olges. 1991. P&G Eyes Europe for Always; P&G Sets Up E. Europe Units. Advertising Age 24 (June): 62. Myers, James H. and Thomas S. Robertson. 1972. Dimensions of Opinion Leadership. Journal of Marketing Research 9 (February): 41-46. Nicholls, Ana, Michael Kapoor, and Joe Cook. 1998. Friendly Invaders. Business Central Europe, May, pp. 43-54. Norris, James D. 1990. Advertising and the Transformation of American Society, 1865-1920. New York: Greenwood. Oliver, Richard. 1999. Whence Consumer Loyalty. Journal of Marketing 63 (Special Issue): 33-44. Park, C. Whan, David L. Mothersbaugh, and Lawrence Feick. 1994. Consumer Knowledge Assessment: The Importance of Product-Related Experiences in Judgement of Self-Assessed Knowledge. Journal of Consumer Research 14 (June): 71-82. Patton, W. E., III. 1984. Brand Choice and Varying Quantity of Information. Journal of Business Research 12 (March): 75-85. Pollay, Richard W. and Banwari Mittal. 1993. Heres the Beef: Factors, Determinants, and Segments in Consumer Criticism of Advertising. Journal of Marketing 57 (July): 99-114. Ratchford, Brian. 2001. The Economics of Consumer Knowledge. Journal of Consumer Research 27 (March): 397-411. Ready to Shop Until They Drop. 1998. Business Week 22 (June): 104-116. Rosen, Emanuel. 2000. The Anatomy of the Buzz: How to Create Word-ofMarketing. New York: Doubleday. Shavitt, Sharon, Pamela Lowrey, and James Haefner. 1998. Public Attitudes Toward Advertising: More Favorable Than You Might Think. Journal of Advertising Research 38 (July/August): 7-22. Srinivasan, Narasimhan and Brian T. Ratchford. 1991. An Empirical Test of a Model of External Search for Automobiles. Journal of Consumer Research 18 (September): 233-242. Statistical Yearbook of Hungary, 2001. 2002. Budapest: Hungarian Central Statistical Office. Steenkamp, Jan-Benedict E. M. and Hans Baumgartner. 1998. Assessing Measurement Invariance in Cross-National Consumer Research. Journal of Consumer Research 25 (June): 78-90. Tavassoli, Nader T., Lauren G. Block, Bernd H. Schmitt, and Morris B. Holbrook. 1993. Perceptions of Western Products in Transforming Socialist Countries: The Moderating Role of Political Orientation. In European Advances in Consumer Research, Vol. 1. Eds. G. J. Bamossey and W. F. van Raaij. Provo, UT: Association for Consumer Research, 226-231. Tima!r, Judit. 2001. Some Geographical Aspects of Changing Conditions of Women in Postsocialist Hungary. Retrieved from http:// www.mona-hungary.org/mona/gender.htm Vegh, Csilla. 1997. Hungary-Cosmetics Industry-ISA. Washington, DC: U.S. & Foreign Commercial Service and U.S. Department of State. Verdery, Katherine. 1996. What Was Socialism and What Comes Next? Princeton, NJ: Princeton University Press. Verlegh, Peter W. J. and Jan-Benedict E. M. Steenkamp. 1999. A Review and Meta-Analysis of Country-of-Origin Research. Journal of Economic Psychology 20 (5): 521-546. Waters, Malcolm. 1995. Globalization. London: Routledge. West, Patricia M., Christina L. Brown, and Stephen J. Hoch. 1996. Consumption Vocabulary and Preference Formation. Journal of Consumer Research 23 (September): 120-135.

ABOUT THE AUTHORS


Robin A. Coulter (robin.coulter@business.uconn.edu) is Ackerman Scholar and an associate professor of marketing in the School of Business at the University of Connecticut. She received her Ph.D. from the University of Pittsburgh. Her research interests include branding, cross-cultural consumer behavior, advertising, and research methods. Her work has appeared in the Journal of Consumer Research, the Journal of Consumer Psychology, the Journal of Applied Psychology, and the International Journal of Research in Marketing. Linda L. Price (llprice@email.arizona.edu) is Soldwedel Professor of Marketing in the Eller School of Management at the University of Arizona. She received her Ph.D. from the University of Texas at Austin. Her research combines qualitative and quantitative methodologies to examine the active, emotional, imaginative aspects of consumers decisions and activities, and the social and cultural context of marketplace behaviors. Her work has appeared in the Journal of Consumer Research, Journal of Marketing, and other leading marketing, management, and social science journals. Lawrence Feick (feick@katz.pitt.edu) is a professor of business administration in the Katz Graduate School of Business at the University of Pittsburgh. He received his Ph.D. from Pennsylvania State University. His current research focuses on cross-cultural consumer behavior, consumer word-of-mouth, and referrals. His work has appeared in the Journal of Marketing, the Journal of Marketing Research, the Journal of Consumer Research, Psychological Bulletin, and Public Opinion Quarterly. Camelia Micu (camelia.micu@business.uconn.edu) is a marketing doctoral candidate at the University of Connecticut. Her research interests include advertising and product trial and crosscultural consumer behavior.

Downloaded from http://jam.sagepub.com by cristina leovaridis on April 28, 2009