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Consumer Decision-Making Styles
Consumer decision-making styles are clearly important in order for marketers to understand consumer purchasing behavior. Olshavsky (1 985) discussed the idea that in order to understand consumer behavior in purchasing products, it would be necessary to integrate two separate streams of research. The first is that in which a consumer's preference for an alternative good is based upon the perception of product quality, as defined by extrinsic factors. The second stream of research is a consumer's preference for an alternative that is based upon some kind of evaluation process or decision-making process, defined by intrinsic factors. Combining intrinsic and extrinsic factors can give researchers and marketing practitioners a better understanding of consumer purchasing behavior. In this study, the Consumer Styles Inventory (CSI) was used to examine consumers' decision-making styles, defined by intrinsic factors for consumers' purchasing behavior in Taiwan.
Identifying basic characteristics of decision-making styles is central to consumer-interest studies. When businesses attempt to predict the chances of success for products and services, it is important to understand how consumers make their decision. The Consumer Styles Inventory (CSI) was first developed by Sproles and Kendall (1 986) and defined as mental orientation characterizing a consumer's approach in making consumer choices. There are eight mental characteristics of the consumer decision-making style in the CSI. These characteristics are (a) the perfectionist and high-quality conscious consumer, (b) brand conscious and price-equals-quality consumer, (c) novelty, fashion conscious consumer, (d) recreational, hedonistic consumer, (e) price conscious consumer, (f) confused by over choice consumer, (g) impulsive and careless consumer, and (h) habitual, brand-loyal consumer.
Sproles and Kendall(1986) assumed that consumer behavior can be explained with the help of eight central decision-making dimensions that influence a consumer's decision-making behavior. These eight dimensions were originally identified in a literature review carried out by the same two researchers mentioned above.
In 1992, Hafstrom, Chae, and Chung continued the work and generalized the research across the country. The purpose of the research was to identify decision-making styles of young consumers in Korea and to find out if these styles were similar to those of young U.S consumers. The research indicated that decision-making is more complex and even more important for consumers today than in the past. However, the finding of this research also indicated that there was reason for cautious optimism because the CSI has elements of construct validity and has potential use across international populations. Moreover, the research conducted by Durvasula, Lysonski, and Andrews (1 993) indicated that consumer affairs specialists should not assume that instruments validated in the United States are immediately applicable to other countries. Researchers were encouraged to develop a more robust decision-making style inventory to account for the variation in findings as reported in their study.
Durvasula, Lysonski, and Zotos (1 996) indicated the same problem. From their study, they pointed out that searching for a universal instrument that can describe consumers' decision-making styles among a wide domain of cultures is problematic. For these researchers, additional effort was clearly needed to establish an instrument with psychometric properties that permit it to be applied in multiple countries.
Based on the research by Durvasula, Lysonski, and Andrews (1 993) and Durvasula, Lysonski, and Zotos (1996), researchers who used the Consumers Styles Inventory (CSI) started to modify the model to fit different cultures. Fan and Xiao (1 998) modified the CSI and adapted it to the Chinese culture. From their study, they proposed that the following dimensions be included in the CSI as the most basic mental characteristics of consumer decision-making: (a) brand consciousness, (b) time consciousness, (c) quality consciousness, (d) price consciousness, and (e) information utilization.
Mitchell and Bates (1998) used the CSI to examine consumers' decision-making styles in the UK. The result of the study showed that most of the original US traits were found in the UK, with the addition of store-loyalty and time-energy saving traits. However, some problems were encountered with the CSI's reliability and validity. The study also suggested that it may be that any universal cross-cultural measures were impossible to achieve and that future studies should develop scales which are culture specific.
The study, conducted by Walsh, Mitchell, and Thurau (2001) tested the generalizability of consumer decision-making styles in different countries and with non-student samples, prompted an investigation of German shoppers. The study showed that the original U.S. eight-factor model could not be confirmed completely, but support was found for six factors. These elements included brand consciousness, perfectionism, recreationalism/hedonism, confusion by over choice, impulsiveness, and novelty-fashion consciousness. Furthermore, Siu, Hiu, Wang, and Chang (2001) validated the study by Fan and Xiao (1 998) and adapted the original CSI scale to fit the Chinese culture. Both an exploratory factor analysis and confirmatory factor analysis were adopted to validate the CSI inventory. The results were an eighteen-item and seven-factor solution.
After fifteen years of research on CSI, a study by Walsh, Thurau, Mitchell, and Wiedmann (2001) led them to suggest that researchers and practitioners use the consumer decision-making styles model as a basis for market segmentation. This study indicated that understanding consumers' buying-related decision-making behavior is important for companies in designing effective strategies for marketing activities. Consumer decision-making styles are relatively stable over time and determine the consumer's purchasing behavior. To use consumer decision-making styles as the basis for market segmentation is a new trend in marketing research. The applicability of the CSI has been investigated across several cultures by several authors and replications have been carried out in South Korea, New Zealand, Great Britain, Germany, Hung Kong, United State, and China. The original structure of decision-making styles, by and large, was confirmed in all seven countries.
Consumer styles inventory (CSI) Characteristics. This study was intended to examine consumer decision-making styles in Taiwan. For culture specific study, Fan and Xiao (1 998) first conducted a study in China, and their modified model contains five factors: (a) brand consciousness, (b) time consciousness, (c) quality consciousness, (d) price consciousness, and (e) information utilization. These five factors that determine consumer decision-making styles were tested and found effective in the Chinese Culture. Later, the study conducted by Siu, Hui, Wang, and Chang (2001) modified the original CSI and found their eighteen-item scale to be more parsimonious and more stable when applied to Chinese consumers. The research only dropped impulsive and careless consumer factor from the original CSI. The findings were similar to the results of the research conducted by Fan and Xiao (1998) so this research confirmed again that the use of the Consumer Styles Inventory (CSI) in the Chinese culture was effective. The research defined that consumers in the Chinese culture can be divided into seven decision-making styles categories. They are namely:
• Perfectionism-is characterized by a consumer's search for the highest or very best quality in products. Respondents scoring high on this dimension could be expected to be careful, systematic or comparative shoppers.
• Brand-consciousness-consumers who are oriented towards buying the more expensive, well-known national brands, believing that a higher price means better quality. They also prefer best-selling, advertised brands.
• Novelty-fashion consciousness-characterizes novelty seekers, who find seeking out new things pleasurable. Novelty seekers are likely to shop less carefully and more impulsively, and are less price sensitive.
• Recreational shopping consciousness-consumers who view shopping as recreation and entertainment. These consumers find shopping a pleasant activity and shop just for the fun of it.
• Price-value consciousness-those scoring high on this dimension look for sale prices, appear conscious of lower prices in general, and are likely to be comparison shoppers. They are also concerned with getting the best value for their money.
• Confused by over choice-this trait characterizes consumers who are confused about the quality of different brands and by the information available. High scorers on this characteristic have difficulty in making choices.
• Brand-Loyal, habitual-consumers who have favorite brands and stores and have formed habits in choosing these repetitively (Siu et al., 2001).
Based on these two studies, it was believed that the Consumer Styles Inventory (CSI), which was modified by Siu et al. (2001), would be reliable for examining consumers' decision-making styles in Taiwan.
Consumers 'Perception
Teas and Agarwal(2000, 2001) indicated that consumers use extrinsic cues to infer product quality. The role of extrinsic product cues is important for marketers and scholars to enhance consumers' perceptions of product value and willingness to purchase. Perception refers to the manner in which a person selects, organizes, and interprets the stimuli to which he or she is exposed (Reibstein, 1985). In other words, each day our senses are bombarded with stimuli in the form of sights, smells, sounds, tastes and so on. Meaning is assigned to the stimuli according to the individual's beliefs and feelings. This is stimulus interpretation (Schutte & Ciarlante, 1998). Consumers are influenced by their perceptions of a product when they make a purchase.
• Moreover, as defined by Loudon and Della (1993), consumer perception is the brain's ability to process information. However, since this ability is limited, consumers are extremely selective about what they pay attention to. The two key elements in perception are exposure and attention.
• Exposure-is the degree to which people notice a stimulus within their environment. People notice some stimuli and either are unaware of or ignore others. Personal experience and preferences are important variables in exposure.
• Attention-is the degree to which consumers focus on stimuli within their range of exposure.
Furthermore, Reibstein (1 985) found that the two aspects of perception that have been identified as being of particular importance to marketers are perceptions of price and perceived risk. These were defined in the following terms:
• Perception of price-there is a positive relationship between consumer perceptions of price and quality. The price serves as an indicator when it is difficult for consumers to evaluate quality.
• Perceived risk-Reibstein (1 985) mentioned four types of risk which consumers may perceive in a buying situation. Performance risk is the type of perceived risk that goes beyond the possibility of a product not working properly. Second, a buyer may recognize a psychosocial risk with the possibility of looking foolish or feeling stupid for having made a wrong decision. The third type of risk is financial risk. The more expensive a product, the greater the effect of financial loss from making a wrong choice. The last type of risk, physical risk, is when a product has the potential to cause actual physical harm to a buyer. In the case of certain types of medicines or medical procedures, the buyer will spend more time searching for information and evaluating alternatives before purchasing the product, because of the possibility of getting harmed physically.
Consumers often judge the quality of a product or service on the basis of a variety of informational cues associated with the product. According to Schiffman and Kanuk (1994), consumers perceived the quality of products by using the physical characteristics of the product itself, such as size, color, flavor, or aroma. In the absence of any actual experience with a product, consumers often evaluate quality based on its external elements, such as price, and the image of the store carrying the product.
There are several researchers who have developed and tested models of consumers' perceptions of value with particular emphasis on consumers' use of extrinsic cues (such as price, product quality, and brand names) as indicators of quality and value (Dawar & Parker, 1996; Dodds & Monroe, 1985; Teas & Agarwal, 2000; Zeithaml, 1988). Dodds, Monroe, and Greawal(1991) specified a model in which perceived quality and perceived sacrifice mediate the linkage between extrinsic cues (brand name, store name, and price) and perceived value. Moreover, they suggested that these three extrinsic cues are associated with quality and value perceptions. Dodds et al. (1991) also added another extrinsic cue, which is country of origin. In their study, consumer perceptions of value are used as a trade-off between perceived quality and perceived sacrifice that results in a positive linkage between perceived quality and perceived value. At the same time, this trade-off led to a negative linkage between perceived sacrifice and perceived value. These results were similar to the studies by Hauser and Urban (1986) and Zeithaml(1988). Both studies suggested that perceived quality mediates the linkages between extrinsic cues and perceived value; while perceived sacrifice mediates the linkage between price and perceived value.
In the study conducted by Sweeney, Soutar, and Johnson (1 999), they attempted to integrate the two frameworks by proposing that perceived risks mediated the relationship between perceived quality and perceived value. In their study, they specified two dimensions of perceived risk (performance and financial risks), which allowed for the examination of the unique roles of these two risk dimensions in mediating the relationship between the extrinsic cues and perceived value.
Mowen and Minor (2000) indicated that consumers' perceived quality and perceived price combine together to influence the perceived value of a brand. Thus, the perceived value can be defined as the trade-off that consumers make between perceived quality and perceived price when evaluating a brand.
On the other hand, there are several researchers, who developed models to explain how perceived risk is important to consumers' willingness to purchase products. Perceived risk is defined as a consumers' perception of the overall negativity of a course of action based on an assessment of the possible negative outcomes and of the likelihood that those outcomes will occur (Dowling, 1986). Dowling and Staelin (1 994) indicated consumers' perceptions of risk are considered to be central to their evaluations, choice, and behaviors. So consumer researchers have defined perceived risk in terms of uncertainty and consequences; perceived risk increases with higher levels of uncertainty and the chances of greater association with negative consequences (Oglethorpe & Monroe, 1994).
In 2001, Teas and Aganval proposed an integrated model based on past studies and reported the results of two experiments designed to test the role of perceived quality, perceived sacrifice, and perceived risks on consumers' perceptions of product value. The results of their study indicated that perceived performance risk and financial risk mediated the relationships that perceived quality and perceived sacrifice have with perceived value. The model can make it possible to effectively examine the consumers' perception on product value within a high-risk market.
The findings of this last study also suggested that both performance risk and financial risk can be reduced if perceived quality is high. In this way, companies have an incentive to increase consumers' quality perceptions through improved extrinsic cues (brand name, store, country of origin, and price).
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