Consumer Behavior Towards Decision Making And Loyalty To .

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International Review of Management andMarketingISSN: 2146-4405available at http: www.econjournals.comInternational Review of Management and Marketing, 2016, 6(S4) 43-52.Special Issue for “Asia International Conference (AIC 2015), 5-6 December 2015, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia”Consumer Behavior towards Decision Making and Loyalty toParticular BrandsAdunola Oluremi Oke1*, Parinda Kamolshotiros2, Oluwamayowa Yewande Popoola3,Musibau Akintunde Ajagbe4, Olusola Joshua Olujobi5Department of Business Management, Covenant University, Ota, Nigeria, 2University of Bath, Claverton Down Road, Bath, NorthEast Somerset BA2 7AY, United Kingdom, 3Department of Business Management, Covenant University, Ota, Nigeria, 4Departmentof Management, Ritman University, Ikot Ekpene, Nigeria, 5Department of Business Management, Covenant University, Ota,Nigeria. *Email: remioke@hotmail.com1ABSTRACTCurrently, consumers pay more attention to their health; there is a growing awareness of health benefits of healthy drinks such as the green tea. Greentea is a popular healthy drink that helps prevent many deadly diseases. There are increasing numbers of green tea manufacturers around the worldespecially in Thailand. This industry has overwhelmingly expanded due to high consumers demand and purchases. Previous studies show that themarket of green tea beverage in Thailand is worth nearly 9000 million baht. The most popular green tea brand in Thailand known as “Oishi” accountsfor over 50% of the total market share and as a result of the growing demand for this product, its market worth and benefits to the consumers, thereis need to look at the consumers’ behavior towards the product. Hence, the purpose of this study is to explore the determinants of consumer behaviorand decision making towards loyalty to Oishi green tea. A survey method using well-constructed questionnaire was administered to 50 consumers.The researchers utilized the Statistical Package for Social Sciences (SPSS version 19.0) as data analysis tool to run the analysis such as the Chi-squareand correlation analysis. The findings of this study shows that the factors influencing Thai consumer decisions toward Oishi beverage green tea areperception values (brand awareness, brand association and brand loyalty) and perceived quality. In addition, there is a positive link between decisionmaking and consumer loyalty behaviors which are re-purchasing and word-of-mouth behavior. This study discovered that apart from the four mainfactors well-thought-out in the literature review, there are other numerous factors (such as convenience to buy, taste, flavors, price and packaging) thatinfluence consumer decision to buy and consume the Oishi green tea. Based on these findings, this study provides consciousness for further marketingresearch development and also the strategies for planning an efficient marketing strategy in responding to consumer needs.Keywords: Consumer Behavior, Brand Loyalty, Marketing Strategy, Repeat PurchaseJEL Classifications: C91, M31. INTRODUCTIONThe health benefits of teas are recognized not only in Asia butworldwide. The black and green teas are the two popular typesof teas that have gained recognition in contemporary times. Bothtypes of teas originate from the same plant known as “Camelliasinensis” (Atilgan et al., 2005; Kamolshotiros, 2012; Wei, 2012).Notwithstanding their origin from common source, the differencesbetween the black tea and the green tea are noticeable. First, theblack tea was produced in Sri Lanka, Indonesia and South Africabut the green tea was produced in Japan and China. Second, thegreen tea has less production methods than the black tea and itdoes not go through fermentation like the black tea. According toKamolshotiros (2012), the green tea is more beneficial to humanhealth than the black tea because it contains more antioxidantswhich can prevent some diseases such as cholesterol and cancer.This is according to a research association in biochemistry atBoston University School of Medicine, which discovered thatthe green tea contains high levels of antioxidant flavonoids suchas epigallocatechin-3-gallate which can block inflammationand cancer. Green tea beverage market is growing intensely.Tsai et al. (2007) reports that the market worth of green teaInternational Review of Management and Marketing Vol 6 Special Issue (S4) 201643

Oke, et al.: Consumer Behavior towards Decision Making and Loyalty to Particular Brandsbeverages in Thailand is over 9000 million baht. Oishi green teaproduced by Oishi Group Public Limited Company, own morethan half the market regardless of the fact that this brand is notthe first to produce green tea. In recent years, consumers arenow becoming more conscious about their health (Wei, 2012;Kamolshotiros, 2012; Ajagbe et al., 2014). Therefore, consumers’behavior towards products and services concomitant with healthycomponents and substances is important to be studied. For Thaiconsumers (particularly those living in the city), products andservices connected with health benefits have a significant effecton consumption behavior.The healthy living culture has encouraged the growth of businessessuch as fitness centers, spa treatment centers, healthy food anddrinks particularly in the beverage green tea market (Sanchezet al., 2006; Kotler et al., 2003; Ajagbe et al., 2011; Kamolshotiros,2012). The success of the Oishi green tea company and the needfor the company to adjust and develop its product and brand touphold its position in the market has necessitated the need for thisstudy. Ajagbe et al. (2015) opined that many factors in the literaturehave been exposed that influence consumer decision making, someof them are; stimulus-response model, buyers’ decision makingprocess, buyers’ characteristics, perception value and marketingmix centering on promotional activities.As a result, there are several advantages to study consumerbehavior in order to appreciate their decision making for theirconsumption. Blackwell et al. (2006) expressed that it is valuablefor the firms to study consumer buying behavior, buying motivesand habits so as to create marketing strategies to respond tothe needs of the consumers. Prior studies examining consumerbehaviors and marketing mix in the marketing area exist butto explore the consumer behavior towards the Oishi green tea.Therefore, this study would explore the factors influencingconsumer decision making for Oishi green tea in Thailand whichhas led to consumer loyalty. The particular study focused on theperception value, perceived quality and sales promotion, as wellas the relationship between decision making and consumer loyaltybehaviors as the determinant factors.2. LITERATURE REVIEW2.1. Consumer BehaviorIn the literature, there are several existing consumer behaviormodels used to explain the significance for firms and marketersto appreciate and be able to create valued products or serviceswith a view to respond to the wants of customers. Blackwell et al.(2001) revealed that consumer behavior is an activity that involvespeople obtaining, consuming and ordering of products or services.Schiffman and Kanuk (2000) opined that consumer behavior refersto the way people make their choice on their personal or householdproducts by using their available resources such as money, timeand effort. Gabbott and Hogg (1998) and Blackwell et al. (2006)further elucidated that consumer behavior in an all-inclusive viewas the activities and the processes in which people choose to buyor dispose of the products or services based on their experiencesand ideas. Frederick and Salter (1995) posited that consumers aresatisfied because of the value package of their perceptions such as44the price, product quality, service quality, corporate image and soon. They further contended that if consumers receive the actualoutcome of the value package as they expected, they will be happy.Some theorists like Fredericks and Salter (1995), Rowley (1988)and Blackwell et al. (2001) advocated that the uniqueness of theproduct is significant in order to create, maintain and comprehendthe factors influencing consumer satisfaction. However, to becomesatisfied, consumers should understand the product and accept thestandard offered by the company. In addition, consumer behaviorcan be evaluated from two perspectives: The decision-makingprocess with consumer buying and the determinants affectingthe buying process.2.2. Stimulus-response Model of Buyer BehaviorIt is of huge significance for marketers to respond to consumerneeds in planning their marketing strategies. Oh (2003) positedthat in order to adequately satisfy the needs of the consumers, itis crucial to understand the consumer behavior, their demandspattern, as well as the factors that stimulates the consumers.Kotler et al. (2005) utilized the stimulus-response model to studyconsumer behavior. According to them, the model indicatedhow consumers react to each stimulus and how each individualcharacteristics and decision making process has a huge influenceon decision to buy. There are external factors and marketing miximpacting on consumer decision. Keegan et al. (1992) statedthat consumers will respond in different ways depending on theeffect of stimuli to them. The stimulus-response model is dividedinto four interactive components namely the stimulus input, thecommunication channels, the buyer characteristics associatedwith decision process and the purchase outputs. Kotler (1988)investigated on the significant effect of a company on the consumerbuying behavior process by using communication mechanismsand relationship between the stimuli and consumer responses.Kotler and Armstrong (2008) argued that the marketing stimuliconsist of product, price, place and promotion that the businessowners provide to the consumer. Bristow et al. (2002) and Clemons(2008) added that the environmental stimuli encompass socialfactors, based on the economical, technological, political andcultural circumstances of a society. These entire stimuli influencethe organization’s decision to produce certain goods in responsesto consumer needs.Buyers’ black box contains buyer characteristics and decisionprocesses. Lamb et al. (2004) emphasized that buyer characteristicscould be personal, psychological, cultural and social. Thesecharacteristics have an effect on the buying decision process whichis namely the need recognition, information search, evaluationof substitutions, purchase decision, and post-purchase. Cornelis(2010) described buyers search for both internal and externaldata through several ways such as personal, commercial, publicsources and personal experiences. The author proposes thatbuyers’ black box turns into a set of buyer responses such asproduct choice, brand choice, dealer choice, purchase timing, andpurchase amount. DeVellis (2003) insisted that it is apparent whenconsumers compare and appraise products or brands which occurto their minds before their responses. Delong (2004) mentionedthat though the stimulus-response model illustrates consumers’International Review of Management and Marketing Vol 6 Special Issue (S4) 2016

Oke, et al.: Consumer Behavior towards Decision Making and Loyalty to Particular Brandsresponses resulting on their awareness and rational decisionprocess, yet consumers may not be aware of the attendant problemswhen they make a decision in actuality. A number of approacheshave been used in studying decision making. For example, Sanchezet al. (2006) model enlightened the limited capacity of consumercollected for treating information. In other words, they apply asimple decision making approach.2.3. Factors Affecting Consumer Buying DecisionsKotler et al. (2005) posited that it is of great significance fororganizations and marketers to consciously recognize andconsider their consumer behaviors and the characteristicsinfluencing buying behaviors. Lamb et al. (2004) stated thatthere are four main factors influencing consumer buyingbehavior. First, cultural factor such as the culture and value,subculture and social class of the consumers. Culture createsa basic value, perception, demands and behaviors influencedby the consumer’s family, friends and the society. Differentcountries have diverse cultural influences which take a crucialrole whenever people decide to purchase products. Hence,consumer buying decision differs conspicuously from one cityto another (Aaker, 1996; Malhotra and Peterson, 2006; Qureshiet al., 2015; Atilgan et al., 2005). Within a culture, there aresubcultural groups or entities that share the same customs,values, and norms. Subcultures can be divided into nationalities,religious affiliations, geographical regions, and racial groups. Thesecond factor is the social factor which consists of peer groups,family members, opinion leaders, colleagues and friends. Thisfactor is imperative as every society has a form of social classconfiguration. Bigne et al. (2001) explained that these factorshave a significant impact on consumer behavior because peopleconstantly interact with one another. Moreover, consumers arelikely to ask opinions from others so as to save time and effortsfor product search and evaluation. These social factors have adirect and indirect impact on customers purchasing attitudes andbehaviors. The third factor is the individual factor. Individualshave different characteristics such as age, gender, family lifecycle stage, lifestyle and self-concept and so on. These individualcharacteristics bring about personal motivation, perceptionand preference (Kotler, 1988; Brassington and Pettitt, 2000;Macdonald and Sharp, 2000). Naturally, individuals consumedifferent products and services which changes throughout theirentire lifespan. Differences and changes in their tastes of clothes,foods, furniture, refreshment products or services vary amongchildren, teenagers, adults, and old people. Esterby-Smith et al.(2002) stressed that an individual’s personality is considered tobe a self-concept and self-perception which influences on hischoice to purchase an item. Attitudes, perceptions, beliefs, andself-evaluation define their interests, activities, and opinions. Thelast factor is the psychological factor which is the perception,motivation learning, attitudes and beliefs. This factor is regardedas an instrument for consumers to interact in the society. Byrecognizing their feelings, scrutinizing the information andarticulating their thoughts and opinions, firms and marketerscan take actions to satisfy the consumer’s intense needs. Lambet al. (2004) suggested that the changes in consumer behaviorscome from customers’ learning procedure which contributesto their experience and practices toward products or services.Kotler et al. (2005) illuminated that many learning theorists’view customers learning through the interaction among stimuli,drives, cues, reinforcement, and responses. As a consequence,people take action with their beliefs and attitudes. Figure 1 showthe consumer decision making process model.2.4. Consumer Decision Making ProcessConsumer decision making models in the literature have thefollowing three stages in common: The pre-purchase, thepurchase and the post-purchase stages (Murphy, 1998; Rayportand Jaworski, 2003). However, the most cited of these modelsis the consumer decision-making process model developed byEngel et al. (1968) as cited in Blackwell et al. (2006). In themodel, they recommended that consumers will need to go throughfive main stages of decision making before making their finaldecisions when purchasing an item. These are need recognition,search for information both internally and externally, appraisal ofalternatives, purchase decision and post-purchase. These stagesof decision making are further clarified below:2.4.1. Need recognitionThis has been established to be the first stage in the decisionmaking process. It is the stage where a consumer is encounteredwith the difference between perception and the tangible satisfactionlevel (Solomon et al., 2006). The authors amplify that a consumerbuying decision process will begin when a person’s unsatisfiedneeds are recognized. These unsatisfied needs can be furtherdivided into functional needs and psychological needs. Whilstthe former refers to the performance of the product or service, thelatter is concerned with the consumers’ feelings about the productor service they purchase.2.4.2. Internal and external information searchThis second stage is about the consumer searching forinformation about the product or service. Moorthy et al. (1997)mentioned such factors as personality, income, social class,size of purchase, prior brand perception, past experiences, andcustomer satisfaction can influence consumer decision making.During this second stage, the consumer searches for informationboth internally and externally. When searching for informationFigure 1: Consumer decision making processSource: Lamb et al. (2004)International Review of Management and Marketing Vol 6 Special Issue (S4) 201645

Oke, et al.: Consumer Behavior towards Decision Making and Loyalty to Particular Brandsinternally, the consumer will remember relevant information onone hand from previous experiences of the use of the productsor services. On the other hand, external information search ismainly about seeking information in the external environmentfrom other consumers, commercial sources, and public sources.Moreover, Solomon et al. (2006) recommended a compositionsearch of information which includes pre-purchase searchand on-going search. Pre-purchase search is when customersidentify a need and look for more information about that needwithin the market, while the on-going search is mostly basedon personal interest that one has for a specific brand. At thesame time, consumers are more likely to keep up with the latestupdated information about the brand they are pursuing (Tsaiet al., 2007).2.4.3. Evaluation of alternativesStage three emphases on the evaluation of alternatives. Kolter etal. (2005) suggested that the pre-purchase evaluation period iswhen consumers make an assessment between different productsand brands before they make a choice on purchase. Generally,their decision making processes are based on the qualitieswhich are related to their needs. Kotler et al. (2005) opined thatcustomer buying decision is therefore based on several qualitiessuch as size, quantities, quality, and prices. Porter (2004) furtherstressed that a firm builds its value by offering lower prices aswell as having a differentiated character to compete with itscompetitors.2.4.4. Purchase decisionStage four is based on purchase decisions. It usually starts afterconsumers have already evaluated the various products or servicesoffered by all expected retailers. Oh (2003) argued that theseretailer and in-store selection are the main factors customers use tomake their final buying decisions. Blackwell et al. (2006) positedthat after this stage, the next step will be when customers decidewhich retailers they want to purchase the item from. They willbase their decisions on the product attributes from the previousstages. The customer assistants, visual exhibitions of merchandiseand the point-of-purchase can also influence the consumer buyingdecision processes.2.4.5. Post-purchaseThe final stage of the consumer-decision process model can bedivided into three steps. The first step, customers consume theproducts or service. The second step, customers will evaluatetheir consumption and it may be noticed here that the customersatisfaction level could be higher than their perceived performanceand vice versa (Aaker, 1996; Blackwell et al., 2006). During thelast step, divestment takes place. At this point, consumers arelikely to dispose of or recycle the product. This is the point thatmost organizations now pay attention to and a result they are nowconcerned with being environmentally friendly due to the factthat they feel almost

behaviors and marketing mix in the marketing area exist but to explore the consumer behavior towards the Oishi green tea. Therefore, this study would explore the factors influencing consumer decision making for Oishi green tea in Thailand which has led to consumer loyalty. The particular study focused on the

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