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Anexploratorystudyon consumerbuyingbehaviorinPakistaniperspective

1 2 3 MumtazAli ,JingFengjie ,NaveedAkhtarQureshi 1 Researchscholar,PhDMarketingScholar,SchoolofManagement,HuazhongUniversity ofScienceofTechnology,Wuhan,P.RChina 2 ProfessorinMarketing,SchoolofManagement,HuazhongUniversityofScienceof Technology,Wuhan,P.RChina 3 Lecturer,SukkurInstituteofBusinessAdministration,Pakistan

ABSTRACT The mainpurposeofthisstudy istofindoutthereasonswhycustomerbehavingdifferentlyat the time of purchasing goods/services. The factors such as family structure, country of origin, age,culture,andadvertisinghaveanimpactonanindividualswayofthinkingandultimatelyon consumersdecision makingprocess,whereasprice isassociatedtoproduct.Furthermorethis study will provide a detail view of the consumers way of thinking and will investigate the degree of association of five factors i.e. family structure, country of origin, age, culture and advertisingonbuyingbehavior.Theallpreviousstudiesonconsumerbehaviourmainlyfocused on finding out the cultural influence on buying behaviour. But this research will in depth evaluate all those factors such as price, family structure, country of origin, age, culture, and advertisingincontextofPakistaniconsumersbuyingbehavior.Thesefactorshavebeenstudied toagreatextent,butverysmallnumbersofmarketingresearchershaveappliedAHPapproachin context of consumer buying behavior. For this purpose a survey was conducted based on personalinterviewsandfocusgroups.AfterthatAHPAnalyticalHierarchyProcesstechnique hasbeenappliedtoinvestigatetheinteractionofonefactoroveranother.Thesefactorsarealso prioritizedtoseethepriorityofonefactoroveranother.Theresultsofstudyindetailshowthat onlythepriceisafactorassociatedwithproductwhileallremainingfactorshavegreatdegree of association and impact on consumer psychology and ultimately on consumers decision makingprocess. Keywords:AHP,Buyingbehavior,Culture,MCDM,Pakistan 1.Introduction Themainfocusofthisstudyistoknowtheinteractionandimpactofallthesefactorsoverone anotherandthedegreeofassociationwithconsumerbuyingbehavior.Thefactorsconsideredfor this study are price, family structure, country of origin, age, culture, and advertising. Further morethisstudywillmainlyaddresstheissuesrelevanttohowprice,familystructure,countryof origin,age,culture,andadvertisingaffectconsumerpsychologyandpossiblechange in buying behavior. For this purpose AHP Analytical Hierarchy Process which is a multicriteria decision making (MCDM) approach has been applied to identify the interaction of one factor over another. These factors are also prioritized to see the priority of one factor over another. AHPhasbeenwidelyusedbyresearchersandpractitionersinaMCDMwhereyouhaveamulti criteriafordecisionmakingandprioritizingtheallrelevantfactorsunderstudy. ASIAN JOURNAL OF MANAGEMENT RESEARCH 216

AHP, developed by Satty in 1980 (Saaty, 1980), is a simple and feasible multiobjective evaluationmethodwidelyusedformultiobjectevaluationactivities.Itisdesignedforsubjective evaluationofasetofalternativesbasedonmultiplecriteriaorganizedinahierarchicalstructure. Atthetoplevel,thecriteriaareevaluatedandatthelowerlevels,thealternativesareevaluated by each criterion. The decisionmakers assess his evaluation separately for each level and sub levelsubjectively.Bycreatingapairwisecomparisonmatrix,hissubjectiveevaluationforevery pairofitemsisassessed(Dyer,1990).AHPisakindofmulticriteriadecisionmakingtechnique. Incomplexmulticriteriadecisionmaking,AHPisusuallyusedtodealwithadecisionmaking problem with several assessment criteria and in an uncertain situation and can systematize a complexproblembyresolvingtheproblemintoseverallevels,conductingquantitativejudgment, identifying factors needing priority attention and then making a comprehensive assessment, so thatdecisionmakerscanhaveenoughinformationandcontroltheriskindecisionmaking(Saaty, 1980). AHP can solve unstructured problems concerning economy, society and managerial science.Facingaproblem,thedecisionmakershallfirstsetageneralobjective,andthendevelop criteria, subcriteria and criteria at the bottom level. After this step, pair wise comparison is conducted with a scale of 1 to 9 andthen Eigen vectors are workedout as weighted values of criteria and finally the overall priority vector is determined (Kamal, 2001 Lipovetsky and Michael,2002Mohammed,2002). Tosome,consumerbehaviorissynonymouswithmarketing.RobertsonandKassarjian(1991), for example, define consumer behavior as the scientific study of consumer actions in the marketplace(p.vii).However,othersviewconsumerbehaviorasindependentofmarketingor any particular discipline. Jacoby (1976), for example, defined consumer behavior as the acquisition,consumptionanddispositionofgoods,services,timeandideasbydecisionmaking units....(p.1).Arndt(1976)suggestedthatconsumerbehaviorencompassesthetheproblems encounteredbymembersofsocietyintheacquisitionandrealizationoftheirstandardofliving (p. 213). More recently, Holbrook (1995) defined consumer research as the study of consummation in all of its aspects. Holbrook explained, Consummations of one sort or another are what all humans and therefore all consumers seek. Consummationattaining customer value or achieving satisfactionthereby designates the central core of the concept of consumer research (Holbrook, 1995, p. 88). As a field, consumer behavior represents the intellectual meeting ground for investigators from economics, marketing, applied psychology, sociology, anthropology, philosophy, family sciences, and related disciplines. In Pakistan there are four types of price indices Consumer Price Index (CPI), Wholesales Price Index (WPI), Sensitive Price Index (SPI) and GDP Deflator, which are used to calculate inflation. Among theseindicators,themajoremphasisisonCPIasameasureofinflation,whichcovers375items in 71 markets of 35 cities of the country (Economic Survey, 200607). Conventional wisdom holds that the emotional cultural differences between countries will significantly impact on crossnationalbusinessrelationshipsbetweenfirmsfromdifferentcountriesandcultures.Studies from boththe fieldofanthropologyand managementscience haveconcludedthatmosthuman behaviour is mediated by culture (eg, Hofstede, 1984). The psychologists developed the hierarchy of effects model, which proposes that behavior is composed of three dimensions: cognitive,affectiveandconative(LavidgeandSteiner,1961).Thecognitivedimensioninvolves developingawarenessandknowledge,theaffectivecomponentrelatestodevelopingfeelingsand attitudes,andtheconativedimensioninvolvesdevelopmentofconvictionorintentionandactual behaviour,suchaspurchase(LavidgeandSteiner,1961).

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2.LiteratureReview In the marketing literature, individuals with a high need for cognition have been shown to process and evaluate advertising information more thoroughly than those with a low need for cognition.Theytendtobe influenced by messagerelevantthoughtsratherthanperipheralcues such endorse attractiveness (Haugtvedt and Petty, 1992), spokesperson credibility (Petty and Cacioppo,1986),humour(Zhang,1996)orthenumberofargumentspresented(Cacioppoetal., 1983). In an extensive literature review of the subject, Cacioppo et al. (1996) found that individuals with a high need for cognition tended to process information more thoroughly and tendedtoengageinmoreextensiveinformationsearchthanthosewithalowneedforcognition. This suggests that individuals with a high need for cognition might use a wide range of information sources, which reduces their relative preference for interpersonal sources. On the other hand, individuals with a low need for cognition are less motivatedto gather and process extensiverawinformationandaremorelikelytoacceptalreadyprocessedinformationgivento thembytrustedpersonalsources.MurrayandSchlacter(1990)definedperceivedriskasamulti dimensionalconstruct.Itrepresentsconsumersprepurchaseuncertaintyrelatedtothetypeand degreeofexpectedlossresultingfromthepurchaseandtheuseofaproductorservice.Possible loss categories are financial loss, performance loss, psychological loss, social loss and convenience loss (Arndt, 1967b Bansal and Voyer, 2000). Past research has consistently recognized perceived risk as a fundamental concept in consumer information search (Arndt, 1967bChaudhuri,2000MurrayandSchlacter,1990).Arndt,forexample, foundthattocope with the hazards of buying, consumers tend to develop riskhandling strategies. One such strategy . . . would be to seek additional information from a number of sources (1967b: 303). BansalandVoyer(2000)foundanegativeinfluenceofproductexpertiseonperceivedrisk,anda positive influenceofperceivedriskonwordofmouthinformationactively sought.Inaddition, Murray(1991)proposedthatwordof mouthisthe mostimportantsourceof informationwhen thegoalistoreducetheperceivedrisk.Hearguesthatthisisbecausewordofmouthoffersgreat opportunitiesforclarificationandfeedback.Cultureisconsideredasanebulousconstructthatis difficult to define (Triandis et al., 1986) and is positedto be subjectto change over periods of time. This has led to the phenomenon being defined as . . . those beliefs and values that are widelysharedinaspecificsocietyataparticularpointintime(Ralstonetal.,1993)[emphasis added].Cultureisthoughtofasbeinglearned(Hofstede,1984)andismanifestthroughhistory, religion and education which act as strong factorsthat define and shape a nations or societys character and culture (Harris, 1979). Culture is also considered to influence all human activity (Rosaldo,1989,citedinMonaghanandJust,2000).However,onecannothopetoknowallthere isaboutculture.GeertHofstede(1984),theauthorofoneofthemostcitedstudiesofcultureon work values, admits thatthere may be shifts in culture evidentover long periods oftime. This forcesaconstantreconsiderationandreevaluationofthenatureandinfluenceofculture. The literatureisdividedconcerningthe influenceof nationalcultureoncrossnational business ventures. Traditionally, the literature has accepted that fundamental beliefs can differ greatly between cultures (Hall, 1960). It is, however, complex to understand how these culture differences translate into influencing international business relationships. Scholars have called for markets with different cultures to be treated differently (eg, Solberg, 1995), while offering little in the way of empirical evidence to support such notions. The literature abounds with studies warning the reader thatthe success of any international marketing strategy depends on attemptingtoconformtocustomerculturenorms(DeshpandeandWebster,1989).Perhapsthe most often cited study advocating cultural differences concerning the workrelated values of ASIANJOURNALOFMANAGEMENTRESEARCH 218

individualsbetweencountriesistheworkofGeertHofstede(1984).Hofstedesworkresultingin the creation of five indices of culture (uncertainty avoidance, power distance, individualism, masculinity and long term orientation), upon which the workrelated values of individuals of different countries are purported to differ, has been received as seminal in the crosscultural literature. Collectivist individualist values are Eastern and Western cultures (largely based on religious ideology).Countries(andindeedregions)havedifferentattitudestowardsIDVandcollectivism. Countries such as the Peoples Republic of China (PRC) consider the value of tradition as paramount: The traditional Chinese person . . . hardly thinks of himself as an individual (Riesman et al., 1953: 33) as the . . . Western concept of personality does not exist in the Chinese tradition (Hofstede, 1984: 150). Economic and political systems also enforce individualism(IDV)orcollectivism.ThecapitalistmarketeconomyphilosophyemphasisesIDV and the achievement of the individual, whereas socialist forms of economic control and state planning encourage collectivism. Of the five indices of culture developed by Hofstede, the individualism collectivism index is considered to be the . . . most pervasive difference associatedwiththeculturesofvariouscountries(Williamsetal.,1998:136). Despite the obvious impact of lifestyle, life stage, income and age on consumers behaviour within each of these, essentially, men and women have an interest in, talk about, and show a fondness for, different products (Slama and Williams, 1990). Despite calls for more research focusingongenderdifferences(egOtnesandMcGrath,2001Hansen,U.&A.Emmerich(1998), relatively few studies have been conducted (Carsky and Zuckerman, 1991) and these studies have focused on relatively narrow areas, such as impulse buying, or have been very product specific,eghousepurchasing.Evidencesuggeststhatgenderdifferencesexistintheaidsusedto arrive at buying decisions (egMueller, 1991 Wiedmann and Walsh,2000) as well as in the decisionsthemselves(egHelmig,1997Wood,1998).However,mostofthesatisfactionstudies have focused on low involvement and nondurable products (Patterson, 1993). Relative AdvantageandValueBarrierRelativeadvantageispositivelyrelatedtoadoptionandrepresents the degree to which an innovation is being perceived as better than the idea it supersedes (Rogers, 1995: 212). Often this may be a price advantage and is therefore consistent with the value barrier of innovation resistance theory which represents the perceived performanceto pricevalueoftheinnovationcomparedwiththeproductorserviceitsubstitutes(RamandSheth, 1989). Countryoforigineffectcanbedefinedasanyinfluencethatthecountryofmanufacturehasona consumers positive or negative perception of a product (Cateora and Graham, 1999). With increasingavailabilityof foreigngoodsin mostnational markets,thecountryoforigin cue has become more important as consumers often evaluate imported goods differently than they do competing domestic products. (Bilkey and Nes, 1982). Consumer behavior can be seriously impacted by country of origin factor in three distinct ways: Firstly, buyers may simply use the country of origin as one of the many attributes employed to engage in product evaluation (Johansson et al, 1985 Hong and Wyer, 1989). Secondly, the country of origin may create a halo effect whereby consumers attention and evaluation of other product dimensions are affected(Ericksonetal.,1984Han,1989).Overthepastthreedecades,theeffectofaproducts country of origin on buyer perception and evaluation has been one of the most widely studied

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phenomena in international business, marketing and consumer behavior. In a study, Tan and Farley (1987) concluded that the potential impact of the country of origin of a product is the most researched international aspect of consumer behavior. The analysis of the country of origin focuses on the consumers opinion regarding the relative quality of goods and services based on the country where a particular product is manufactured. With the increasing pace of globalization and the diversity of manufacturing activities internationally, more studies are needed to guide marketers to have a better insight into buyers attitudes and behavior with respecttoglobalproducts. Crosscultural management researchers have traditionally used Hofstede's (1980, 1997) definition of culture, which equates cultureto ``the collective programming of the mind which distinguishesthemembersofonegrouporcategoryofpeoplefromanother''(Hofstede,1997,p. 5). Culture influences behavior through its manifestations: values, heroes, rituals, and symbols (Hofstede, 1997). These are the forms in which culturallydetermined knowledge is stored and expressed. Thus, each cultural group possesses different cultural manifestations. Hofstede's (1980)landmarkstudyofthedimensionsofculturecanconsideredaneticapproachtothestudy of cultural values. Culture has been defined as the underlining factor of peoples stereotyping othergroupsofpeople(BoissevianandInglott,1979Brewer,1978PiSunyer,1977).Culture, which could be seen as group personality (Litvin & Kar 2003), is one of the factors distinguishinggroupsfromoneanother,especiallyphysicallydistantgroupsthus,itisseenasan importantagentofbias,especiallyinformationofcountryimages. Priceistheamountofmoneyaconsumermustpaytoobtaintherighttouseaproduct(Hawkins, Best and Coney 2001). As a major competitive tool in meeting and beating close rivals and substitutes,pricecanserveasameansofcommunicationwithbuyers(e.g.,listprice,discounts, allowances,creditterms,paymentperiod,etc.)byprovidingabasisforjudgingtheattractiveness of the offer. Becker (1980) summarized the international pricing situations as pricing for new market entry, changing price, either as aggressive strategy or to contend with evolving competition, and multipleproduct coordination, in case of related demand. General price strategies employed by international marketers include the standardization of prices around world,dualpricing(i.e.,differentiatingdomesticandexportprice),anddifferentiatedpricesfor differentinternationalmarkets(Robinson1984).Intermsofpricingstrategies,pricingchallenges should be considered the same when encountered in both domestic and international markets. Furthermore,thescopeofglobalpricingstrategieswillvaryaccordingtothedegreeofforeign involvementandthetypeofmarketencountered.Therefore,thisstudywillexamineinternational pricestrategiesintermsofstandardizationversuslocalizationapproach. 3.Methodology AHP proposed in this research in order to handle both tangible and intangible factors and sub factors that have impact on buying behavior. The selection methodology is based on the characteristics of the problem and the consideration of the advantages and drawbacks of other methodologies. The decision maker judges the importance of each criterion in pairwise comparisons. A survey has been conducted to know the effect of these factors on buying behavior. This survey was comprised of interviews, and carefully selected focus groups. To avoid the problem of data biasness equal number of male and female participants were maintained.Inadditionprofessionalinterviewsof3045minutesofsomehighlyknowledgeable individualswereconductedtofurtherstrengthenthevalidityofdataandstudy.Anothermethod

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ofdataanalysisi.e.Focusgroupswereselectedfromthetotalparticipants(200)onthebasisof their knowledge and level of expertise to further help in making the research results more transparent.Theeachfocusgroupwassupposedtoworkonamechanismoffiveparticipantsper focus group and in total eight focus groups participated in the session. The total number of participants forthis study was forty. Thetotal time allocated for session was 200 minutes or 3 hoursand20minutes.OnthebasisofparticipantsresponseamatrixwasformulatedandAHP techniquewasutilized.Forthisreasonallsixfactorsi.e.price,familystructure,countryoforigin, age, culture, and advertising have been prioritized by assigning them a specific number after receivingthefeedbackfromsurvey.TheoutcomeofAHPisaprioritizedrankingorweightingof each decision problems by intermediate levels. Finally the decision alternatives or selection choicesarelaiddownatthelastlevelofthehierarchy. 4.Factorsforresearchstudy Factors 1.Price 2.Familystructure 3.Countryoforigin 4.Age 5.Culture 6.Advertising Table1:ConsumerPreferences,surveyedrequirementmatrix Price Price Family structure Countryof origin Age Culture Advertising 1 5 7 4 3 1/2 Family structure 1/5 1 1/3 1/2 1/2 1/7 Countryof origin 1/7 3 1 1/4 2 1/6 Age Culture Advertising 1/4 2 4 1 1/2 1/5 1/3 2 1/2 2 1 1/5 2 7 6 1/2 5 1

Note. With the help of above filled matrix we can apply AHP technique whichwill help us to prioritizethesefactorsandtheirassociationwithbuyingbehavior.Furtherpriceisnotrelevantto other five factors. Because price is associated with the product while other five parameters are directlyrelevanttoconsumerbehavior. 5.Results The results from figures below reveal that that the surveyed individuals preferred the family structureasthemostinfluencingfactorforbuyingbehaviorwhiletheadvertisementwasratedat the lowest.Furtherthefigures indicatethatcountryoforiginwith scoreof0.238 isthesecond most influential factor,culturewithscoreof0.188 isthethird most influential factor,agewith scoreof0.133isthefourthmostinfluentialfactor,andadvertisementwithscoreof0.066isthe

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fifth most influential factor affecting the buying behavior respectively. The remaining factor pricewithlowestscoreof0.054isassociatedwithproduct.

Table2:ScaleofPreferencesproposedbyThomasSaaty

Preferenceweights/ levelofimportance 1 3 5 7

Definitions Equally preferred Moderately preferred Strongly preferred Verystrongly preferred

Explanation

2,4,6,8 Reciprocals

Twoactivitiescontributeequallyto theobjective Experience&judgmentslightly favoroneactivityoveranother Experience&judgmentslightly favoroneactivityoveranother Anactivityisstronglyfavoredover anotheranditsdominance demonstratedinpractice Extremely Theevidencefavoringoneactivity preferred overanotherisofthehighestdegree possibleofaffirmation Intermediate Usedtorepresentcompromise preferred betweenthepreferenceslistedabove Reciprocalsforinversecomparison

Synthesiswithrespectto:Goal:consumerbehaviour OverallInconsistency =.21 Price Familystructure Countryoforigin Age Culture Advertising .054 .321 .238 .133 .188 .066

Figure1:Prioritizationoffactorsinfluencingbuyingbehavior

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Figure2:Prioritizationoffactorsinfluencingbuyingbehaviorinprioritizedfashion 6.Conclusion The study concludes that AHP is a very useful technique to know the buying behavior of consumers when they are going to make a purchase decision about a product. In this regard a survey was conducted based on personal interviews and focus groups. On the basis of the respondents feedback a matrix was formulated. That matrix table was filled with the input provided by these respondents. After that the application of AHP approach has been used to evaluate the interaction of one factor over another factor and their effect on buying behavior. AHPwhichisaMCDMapproachindicatesthatthefivefactorsi.e.familystructure,countryof origin,age,culture,andadvertisingareassociatedwithbuyingbehavior:whereastheremaining onei.e.ispriceisassociatedwithproduct.AHPapproachenablesthedecisionmakerstomake anappropriatedecisionandminimizetheerrorsthatmakeoccuradecisionistakenonintuition andexperience.SoforasverysmallnumbersofmarketingscholarshaveappliedAHPapproach to analyze the buyer behavior therefore in future for similar type of research issues the AHP approachwillbehighlydesirable. References Arndt,J.(1967)Roleofproductrelatedconversationsinthediffusionofanewproduct.Journal ofMarketingResearch,4,pp 291295. Ashmore,RichardD.,MichaelR.Solomon,andLauraLongo(1996),"ThinkingAboutFemale Fashion Models' Looks: A Multidimensional Approach to the Structure of Perceived Physical Attractiveness,"PersonalityandPsychologyBulletin,22(November)11,pp 10831104. Bansal,H.S.,Voyer,P.A.,2000.WordofMouthProcesseswithinaServicesPurchaseDecision Context.JournalofServiceResearch,3(11), pp 16677. Becker, Hulmut (1980), "Pricing: An International Marketing Challenge," in International MarketingStrategy,HansThoreliandHelmutBecker,eds.,Oxford:ButterworthHeinemannLtd. ASIANJOURNALOFMANAGEMENTRESEARCH 223

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