Technology Product Markets”, discussed: The authors developed a demand model for
technology products that captures the effect of changes in the portfolio of models offered by a brand as well as the influence of the dynamics in its intrinsic preference on that brand’s performance. In order to account for the potential correlation in the preferences of models offered by a particular brand, researcher’s used a nested logic model with the brand (e.g., Sony) at the upper level and its various models (e.g., Mavica, FD, DSC, etc.) at the lower level of the nest. Relative model preferences were captured via their attributes and prices. Researcher’s allowed for heterogeneity across consumers in their preferences for these attributes and in their price sensitivities in addition to heterogeneity in consumers’ intrinsic brand preferences. Together with the nested logic assumption, this allows for a flexible substitution pattern across models at the aggregate level. The attractiveness of a brand’s product line changes over time with entry and exit of new models and with changes in attribute and price levels. To allow for time-varying intrinsic brand preferences, the researcher’s used a state-space model based on the Kalman filter, which captures the influence of marketing actions such as brand-level advertising on the dynamics of intrinsic brand preferences. Hence, the proposed model accounts for the effects of brand preferences, model attributes and marketing mix variables on consumer choice. First, researcher’s carried out a simulation study to ensure that their estimation procedure is able to recover the true parameters generating the data. Then, the researcher’s estimated their model parameters on data for the U.S. digital camera market. Overall, it was found that the effect of dynamics in the intrinsic brand preference was greater than the corresponding effect of the dynamics in the brand’s product line attractiveness. Assuming plausible profit margins, researcher’s evaluated the effect of increasing the advertising expenditures for the largest and the smallest brands in this category and find that these brands can increase their profitability by increasing their advertising expenditures. Researcher’s also analyzed the impact of modifying a camera
model’s attributes on its profits. Such an analysis could potentially be used to evaluate if product development efforts would be profitable.
Denford Chimboza and Edward Mutandwa (2007) in their article titled, “Measuring the determinants of brand preference in a dairy product market” discussed: Branding is
increasingly being used as a strategy for managing markets in developed countries while developing countries still lag behind. The objective of the study was to assess the level of brand awareness and factors underlying brand preference of dairy brands in Chitungwiza and Harare urban markets in Zimbabwe. A total of 90 respondents who included individual and institutional consumers were selected using judgmental and simple random sampling respectively. Primary data was collected using structured interview schedules developed for each category of consumers. Consumer product awareness indices, cluster analysis and factor analysis were the main tools used in the analysis. The findings of the study showed that 52% of the respondent consumers were aware of ARDA dairy brands despite having come across few ARDA DDP advertisements. Four factors were identified as key determinants of dairy product choice namely promotion, price and availability of product, attractive packaging and product quality.
Adeolu B. Ayanwale, Taiwo Alimi and Matthew A. Ayanbimipe (2005) in their article titled, “The Influence of Advertising on Consumer Brand Preference” discussed: The
proliferation of assorted brands of food drinks in the country has led to cut-throat competition for increased market share being witnessed among the operators in the food drink industry. When competition is keen and the consumers are faced with brand choice in the market, it becomes imperative for the manufacturers to understand the major factors that can attract the attention of buyers to his own brand. These then form the basis for marketing planning and action. The study, which was based on a survey of 315 randomly selected consumers of food drinks in Lagos, Ibadan and Ile-Ife, cities in Southwestern Nigeria, examined the role played by advertising in influencing consumers’ preference for Bournvita, which is one of the leading food drinks in the Food and Beverage industry in Nigeria. Results revealed that both male and female and different age groups were equally influenced by advertising in their preference for the brand. 38.73% of the consumers showed preference for Bournvita out of the various brands of the food drink studied. The major reasons advanced for the preference
are its captivating advertising (42.62%) and rich quality (40.16%). TV advertising was most preferred by 71.43% of the respondents of all the media used in advertising Bournvita.
The need for high preference to advertising is therefore highlighted for companies that want to not only retain their market but take positive steps to increase their market share.
Dr. G.Sridhar, Dr. N.Ramesh Kumar and Dr. G. Narasimha Murthy (2010), in their article
titled, “Susceptibility to reference group influence among rural consumers”, discussed: The diversity in the reference group influence on consumer purchase in general and with reference to rural consumers was examined. The literature on reference groups’ influence on rural consumer behavior reveals the role and importance of opinion leaders and the susceptibility of consumers on reference groups for any purchase. Many findings in rural marketing domain concur with the literature on the reference group influence construct done elsewhere. Consumers who are susceptible to interpersonal influence will try to satisfy reference groups' expectation by complying with groups' norms. Reference groups in all had been found to have profound influence on consumers' decision making. This influence is different for several sub cultures and situations. Consumers may accept a reference group influence because of its role in providing informational, utilitarian and value expressive influences.
Factors affecting brand preference
Brand adoption or preference has been receiving increased attention in extant literature. Cooper (1993) noted that most new innovations come with high risks as most of them failed in the marketplace creating the need for marketers to have a clear understanding of success factors in brand adoption. Theories of adoption have often been used to explain how consumers form preferences for various goods and services (Rogers, 1995; Tornasky and Klein, 1982; Mason, 1990; Charlotte, 1999). Generally, these theories emphasize on the importance of complexity, compatibility, observability, triability, relative advantage, risk, cost, communicability, divisibility, profitability, social approval, and product characteristics in brand preference (Wee, 2003). The relative importance of each factor depends on the nature of industry under consideration, location and social characteristics of the consumers of the different brands.
Consumer choice behavior has also been studied using the five-step process step (need– information search–evaluation of alternatives– purchase–post-purchase evaluation) problem
solving paradigm or through the progression of consumer choice from a product class to brand choice (Dorsch et al., 2000).
Discrete choice models (Chintagunta, 1999; Bockenholt and Dillon, 2000) or neural networks to model selection decisions (Papatla et al., 2002) have also been used in brand choice research. Wee (2003) conducted a study to identify the factors affecting adoption of new product innovations in the consumer electronic industry of Singapore using qualitative (focus group discussions) and quantitative research techniques (survey with 151 respondents in the 16 - 35 year age group). The researcher considered two brands, the Mini Disc and the MP3 Portable player. Using factor analysis, seven factors were identified as critical in effecting adoption of a player: relative advantage, perceived risk, complexity, compatibility, observability, image and trialability. Of these factors, relative advantage conferred by the player was the most important factor that consumers valued in their adoption decisions. Li and Houston (1999) employed a sample of 1200 consumers in Taiwan to determine factors underlying choice of market innovations. Price level, product variety and marketing communications factors were identified as promoters of choice. The promotional (marketing communications) mix has various elements – advertising, sales promotion, direct marketing, exhibittions, sponsorship, personal selling, word of mouth, merchandising, public relations, relationship marketing, corporate image and reputation etc.
Karjaluoto et al. (2005) investigated the consumer choice in the context of the mobile phone industry in Finland using a sample of 196 respondents. Twenty-four questions were used to assess consumer motivations in mobile phone choice. Seven estimated factors influencing mobile phone choice were Innovative services, multimedia, design, brand and basic properties, outside influence, price, and reliability explain and these accounted for about 70% of the total variance. Some of the important product decisions in any marketing context are product, variety, product performance, product features, product design, product presentation, sizes etc (Doyle, 2002).
Consumer surveys often reveal that quality is one of the most important decision factors for consumers, if not the most important (Keller, 2000). Product quality stands for the ability of a product to perform its functions (Kotler, 2003).
Consumer Behavior Analysis
Proctor et al. (1982) noted that the principle aim of consumer behavior analysis is to explain why consumers act in particular ways under certain circumstances. It tries to determine the factors that influence consumer behavior, especially the economic, social and psychological aspects which can indicate the most favored marketing mix that management should select. Consumer behavior analysis helps to determine the direction that consumer behavior is likely to make and to give preferred trends in product development, attributes of the alternative communication method etc. consumer behaviors analysis views the consumer as another variable in the marketing sequence, a variable that cannot be controlled and that will interpret the product or service not only in terms of the physical characteristics, but in the context of this image according to the social and psychological makeup of that individual consumer (or group of consumers).
Source of Influence
Zacharias et al. (2009) found that irrespective of the occupation, respondents of their study felt that friends and relatives strongly influence a consumer decision.
Erda (2009) found those personal sources; especially family and friends' influence consumer decision making in rural markets. He found that about 29% of the sample was influenced by family and 18% by friends while taking a decision to purchase products.
Dhumal et al. (2009) observed that peer group has a significant effect on the purchasing pattern of rural consumers especially branded products.
Gupta and Mittal (2009) observed that head of the family has the highest influence on the purchase of products followed by retailers, family members and relatives.
Velayudhan (2009) found that the influence of personal sources of information is higher in rural areas when compared to urban areas. He also found that informal referent groups largest sources of information in rural markets. Incidentally, more educated consumers also used informal referent groups.