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Decision Making Styles Of Young South Indian Consumers Marketing Essay

Introduction

This exploratory study investigates the decision -making styles of young South Indian consumers. The data for this study were collected from two institutions of higher education in the city of Coimbatore, India in the fall of 1995 utilizing the Consumer Style Inventory (CSI). The results of this study were compared to similar studies where data from the United States, Korea and China were analyzed. Factor analysis statistical procedures were followed to determine 1) the dimensions considered by young South Indian consumers in their transactions in the market, and 2) the differences and similarities among young consumers from different countries in their decision — making styles. Five reliable factors and their corresponding decision — making styles were identified.

As we move from a local to a global economic paradigm the role of consumers in these global economies cannot be neglected. The Guidelines on Consumer Protection adopted by the UN General Assembly in 1985 have prompted the adoption of consumer protection statutes in many countries in Asia, Latin America and Europe. However, one area of concern that needs further attention is the behavior of consumers in different cultures and economies at different levels of development.

A free market economy, assumes informed, educated consumers with the power to influence the market through their rational decisions when confronted with choices in the market. Consumer decision — making, thus, is of great interest for consumer educators and marketers interested in serving the consumer. Several researchers in the field of consumer economics have concluded that consumers follow different styles or rules in making decisions when confronted with choices in the market (Sproles, 1985; Sproles & Kendall, 1986; Kendall & Sproles, 1990; Hafstrom, Chae, & Chung, 1992; Fan, Xiao, & Xu, 1997; Richmond, McCroskey & Roach, 1997; Fan & Xiao, 1998; Dollinger & Danis, 1998; Kang & Kim, 1998). Sproles & Kendall (1986) define a consumer decision -making style as “a mental orientation characterizing a consumer's approach to making choices”. These studies have further suggested that external factors such as culture may influence the way consumers develop those styles.

Sproles & Kendall (1986) developed the Consumer Style Inventory (CSI) to determine the basic characteristics of consumer decision-making styles among young consumers in the United States. They identified the following eight consumer styles: 1) perfectionist, high quality conscious; 2) brand conscious; 3) novelty and fashion conscious; 4) recreational or shopping conscious; 5) price conscious; 6) impulsive, careless; 7) confused by over choice; and 8) habitual, brand loyal. According to Sproles & Kendall (1986:267) identification of these characteristics among consumers “helps to profile an individual consumer style, educate consumers about their specific decision making characteristics, and counsel families on financial management”. They recommended using the inventory with different population groups to determine the generality of its applicability.

Hafstrom, et al. (1992) used the CSI to identify the decision-making styles of Korean students. Fan & Xiao (1998) also used a modified CSI with Chinese students. There are several differences among young Chinese, American, and Korean consumers despite the similarities with respect to the major dimensions and item loading (Fan & Xiao, 1998). For example, the “novelty and fashion conscious consumer” identified by Sproles & Kendall (1986) was not confirmed as present in the Korean study (Hafstrom, et al., 1992). Hafstrom et al. (1992) recommended further research investigating the decision-making styles of other young consumers from different cultures under different macroeconomic conditions.

The rapid transition of India to a market economy has increased the choices of products and services available to consumers, thus increasing their confusion and need for consumer education. At the same time, businesses in a global economy need to know more about consumer behavior in different societies in order to effectively market their products and services. This is very evident in India, the second most populated country in the world and the number one contributor to world population growth of potential consumers (Population Reference Bureau, 2000). A better understanding of Indian consumers for educational and marketing purposes would contribute to meeting the needs of Indian consumers.

The implementation of the India Consumer Protection Act of 1986 is an example of the increased awareness of consumers as an important force in the Indian economy. However, Mummadi (1996) recognizes that there is insufficient research about consumer behavior that can be used for the development of consumer education curricula and for consumer counseling. With the proliferation of goods and services in the past decade, decision-making is more important than ever for consumers in India. It is not clear yet if Indian consumers follow the same behavioral patterns identified for other consumers in Asia and the United States or if they exhibit unique characteristics when confronting choices in the market.

As suggested by Fan, et al. (1997), comparing decision-making styles of consumers from different countries will contribute to the understanding of the effect of market environment as well as cultural factors on consumer decision-making styles. This study contributes to the consumer decision-making literature and consumer education efforts in India and other Asian countries. Moreover, it provides information to marketers interested in decision-making profile of India customers so that they may gear their efforts accordingly.

This study presents data collected from young South Indian consumers analyzed to determine the decision-making styles of this population. The objectives of this study were:

 To determine the decision-making styles of young South Indian consumers in the market.

 To compare the decision-making styles identified in this study with the results of similar studies in other countries.

Methods

Data and Sample

The data for this study were collected during fall, 1995 from a convenience sample of 173 college students from two institutions of higher education in the city of Coimbatore, South India. The author was at that time on sabbatical leave teaching in one of the institutions making it convenient to collect the information from the students. The second institution was chosen based on the proximity to the first one and to increase the number of observations. Data were collected using the Consumer Styles Inventory (CSI) developed by Sproles & Kendall (1986) and modified by Haftrom, et al. (1992). Thirty-eight Likert scale items measured the consumer decision-making characteristics under study. Students responded to the 38 statements using a scale from 1=strongly disagree to 5=strongly agree during regular class time. Additional sociodemographic information was collected.

The sample consisted of male (22.5%) and female (77.5%) students mainly of sophomore and senior status with mean age of about 20 years. They were likely to belong to middle class families and their parents had education levels beyond high school. Most of these young consumers (75%) lived in a nuclear family structure as opposed to an extended or joint family.

Analysis

Descriptive statistics including mean, percentages and standard deviation identified characteristics of the sample and their responses to each item. A principal component Factor analysis with varimax rotation identified characteristics of consumer decision-making. Cronbach's alpha analysis assessed reliability for each factor (Kim and Mueller, 1989).

Findings and Interpretation

The factor analysis shows that the items included in the questionnaire can be grouped in eight factors with Eigen values between 1.39 to 4.10 (see Table 1). However, the Cronbach alpha reliability coefficients show that factors 5, 7, and 8 cannot be considered reliable factors in the identification of decision-making styles of young south Indian consumers (Alpha< .4). These five factors explained 35% of the variance in the correlation matrix compared to 35% in Fan & Xiao (1998), 47% in Hafstrom et al. (1992), and 46% in Sproles & Kendall (1986) for Chinese, Korean, and United States young consumers respectively.

The five reliable factors identify the following style characteristics: Brand Conscious, High Quality Conscious / Perfectionist, Confused by Overchoice, Impulsive / Brand Indifferent, and Recreational Shopper. Similar factors were identified by studies done in China (Fan & Xiao, 1998), Korea (Hafstrom, et al., 1992) and the United States (Sproles & Kendall, 1986)

Interpretation of the Factors

Factor 1 — Brand Conscious Style— Young South Indian consumers scoring high in this factor consider highly advertised and more expensive brands to be superior to other brands. They prefer nice department and specialty stores where they buy well-known brands to keep their wardrobes up- to -date with the very newest clothing styles.

Factor 2 — High Quality Conscious / Perfectionist Style — These consumers exhibit the perfectionist trait identified by Sproles & Kendall (1986) for U.S. students and by Hafstrom et al. (1992) for Korean students. These consumers take the time to shop carefully for the very best quality or for the best value for their money. They have high standards and expectations for the products that they buy. Comparison-shopping is important for them.

Factor 3 — Confused by Overchoice Style — Too many choices in the market tend to confuse these young south Indian consumers. Complex and hard to understand information about unfamiliar products may complicate consumer decisions (Coupey & DeMoranville 1996). The price of the product represents a way to evaluate these different choices.

Factor 4 — Impulsive / Brand Indifferent Style — Contrary to the brand conscious consumer, those students that scored high in factor 4 consider all brands to be similar in overall quality. Their purchases are usually impulsive. However, they may choose those items whose brands have been recommended by a consumer magazine or choose low priced products as possible strategies to facilitate their market decisions.

Factors 5 — Recreational Shopper Style — These consumers tend to enjoy shopping. They consider buying a fun activity. Nevertheless, they tend to stick to a certain product or brand they like as part of their buying strategies.

Comparison With Other Studies

The “Brand Conscious” style is number one in the list of factors for the Korean, the Chinese and the Indian students and second for the U.S. sample (see table 3). The “Perfectionists” or “High Quality Conscious” consumer is also identified among the top three factors for all four samples. However, a factor such as “Confused by Overchoice” is relatively more common among the Indian young consumers than it is for the Korean, the Chinese or the U.S. samples. It should be noted that for the Chinese sample (Fan & Xiao, 1998), the components of the “Confused by Overchoice” are similar to what the authors identified as “Information Utilization” style. Furthermore, it seems that the “Price/ Value Conscious” style is more important for U.S. and Chinese students than for Indians and Koreans as a factor, it did not reach a significant alpha level in the analysis.

The “Impulsive / Careless” factor for the Korean sample included some of the components that loaded in the “Dissatisfied / Careless” for the Indian sample. It seems for Korean students who score high in this factor, there is an association between being careless and being impulsive. It may be that those young consumers with high scores in a similar factor in India, on the other hand, make careless decisions, not out of impulsiveness, but out of brand indifference. The Indian consumers identified carelessness as a factor in itself, a trait with which they are dissatisfied, rather than one that makes them buy on impulse.

The “Fashion Conscious” style, reported for U.S. consumers by Sproles & Kendall (1986) and not found by Haftrom et al. (1992) for the Korean students, loaded some of the items in the “Recreational Shopper” style for the Indian sample. It could be interpreted that young Indian consumers who are fashion conscious derive pleasure from their shopping trips and devote time to such activity that they consider recreational. Similar correlation between “Time Conscious” style components and those of the “Fashion Conscious” style were reported by Fan & Xiao (1998) for Chinese students.

Conclusions and Implications

This exploratory study, of young South Indian consumers adds evidence to the international applicability of the Consumer Style Inventory (CSI) developed by Sproles & Kendall (1986) and used with modifications by Hafstrom, et al. (1992) and Fan & Xiao (1998). Several identifiable consumer decision-making styles were consistent across cultures. Moreover, some cultural differences were also identified.

Among the five reliable factors, the sample of south Indian students tends to be mainly perfectionists in their market decisions. They look for high quality products and they also enjoy shopping. However, they can be confused by too many choices and to a lesser degree these consumers tend to be brand conscious.

Despite the limitations of the sample, consumer educators in India and marketers interested in Indian consumers can adapt some of their strategies to meet the needs of these young consumers that follow different styles when making their decisions in the market. Students can use their own scores in the CSI to identify the decision — making style that they exhibit in market decisions. Those that score high in the components of the “Perfectionist” style, for example, need to look for “real” measures of quality in goods and services rather than their “perceived” quality based on price or brand. How to use and identify relevant information will also be an important lesson for young Indian consumers confused by market choices.

Marketers aware of the “recreational shoppers” among young Indians can provide pleasant environments that will attract these type of consumer without neglecting quality products that are highly valued by the “perfectionists”. Also they can convey information about their products or brands in such a way that will make it easier for consumers to do their own comparison shopping without feeling overwhelm by useless information.

Limitations and Recommendations

The Indian sample was not representative of all consumers in India. It is a convenience sample that share some characteristics such as age and education with the samples used in previous studies on this topic (Sproles & Kendall, 1986; Hafstrom, et al., 1992; Fan & Xiao, 1998). A study with a larger sample from different parts of India and representative of their diverse population is recommended for further research.

The author thanks Dr. Saramma Royce and Dr. Rajammal Devadas, Professor of Family Resource Management and Chancellor of Avinashilingam University respectively for facilitating the collection of the data used in this study. The author's appreciation also goes to the faculty and students of Dr. G. R. Demodaran College of Science and Avinashilingam University, both located in the city of Coimbatore, South India.

Table 1 Young Indian Consumer Decision Making Style Characteristics

Legend for Chart:

A - Style Characteristics and Items

B - Factor Loadings[1]

A B

Factor 1 — Brand Conscious Style

The more expensive brands are usually my choices. .71

The higher the price of the product, the better its quality. .70

Expensive brands are usually the best. .67

Highly advertise brands are usually very good. .55

I usually buy the very newest style. .52

The well-known national brands are best for me. .52

Nice department and specialty stores offer me the best products. .48

I usually buy well-known national or designers brands .47

I keep my wardrobe up to date with the changing fashions. .46[2]

Factor 2 — High Quality Conscious/ Perfectionist Style

I make a special effort to choose the very best quality products. .68

I carefully watch how much I spend. .64

I usually compare at least three brands before choosing. .63

I take the time to shop carefully for best buys. .56

I look carefully to find the best value for the money. .50

When it comes to purchasing products I try to get the very best or perfect choice. .49

My standards and expectations for products I buy are very high. .42

Factor 3 — Confused by Overchoice Style

There are so many brands to choose from that often I feel confused .74

All the information I get on different products confuses me. .71

I consider price first. .61

Factor 4 — Impulsive / Brand Indifferent Style

I am impulsive when purchasing .68

The lower price products are usually my choice. .63

All brands are the same in overall quality. .60

A brand recommended in a consumer magazine is an excellent choice for me .41

Factor 5 — Time Conscious Style

I go to the same stores each time I shop. .58

I only shop stores that are close and convenient to me. .57

Sometimes it is hard to choose which stores to shop.

.56

I have favorite brands I buy over and over.

.40

Factor 6 — Recreational Shopper Style

I enjoy shopping just for the fun of it.

.66

It's fun to buy something new and exciting.

.56

Once I find a product or brand I like I stick with it.

.48

I keep my wardrobe up to date with the changing fashions.

.40

Factor 7 — Price / value Conscious Style

I usually compare advertisements to buy fashionable

products.

.60

Shopping the stores wastes my time.

−.60

I cannot choose products by myself.

−.57

I buy as much as possible at sale prices.

.42

Factor 8 — Dissatisfied / Careless Style

I should plan my shopping more carefully than I do.

.71

Often I make careless purchases that I later wish I had

not.

.58

 Only items loading higher than .4 were included

 Item loads on Factors 1 and 6.

Table 2 Reliability Coefficients for Five Consumer Decision Making Styles Among Young Indian Consumers

Legend for Chart:

A - Consumer Style (Factor)

B - Cronbach's alpha

C - # of items

A

B C

Factor 1 — Brand Conscious Style

.77 8

Factor 2 — High Ouality Conscious/ Perfectionist Style

.70 7

Factor 3 — Confused by Overchoice Style

.63 3

Factor 4 — Impulsive / Brand Indifferent Style

.59 4

Factor 6 — Recreational Shopper Style

.47 4

Table 3 Consumer Decision-Making Styles (India, China, Korea, and United States)[3]

Legend for Chart:

A - India

B - China (Fan and Xiao (1998)

C - Korea (Hafstrom, et al (1992)

D - United States (Sproles and Kendall (1986)

A

B

C

D

Brand Conscious

Brand Conscious

Perfectionistic

High Quality Conscious/Perfectionist

Time Conscious

Perfectionist

Brand Conscious

Confused by Overchoice

Quality Conscious

Recreational/Shopping Conscious

Novelty / Fashion Concious

Impulsive/Brand Indifferent

Price Conscious

Confused by Overchoice

Recreational / Shopping Conscious

Time Conscious[a]

Information Utilization

Time / Energy Conserving[1]

Price / Value Conscious

Recreational Shopper

Impulsive

Impulsive

Price / Value Conscious[a]

Habitual / Brand Loyal[1]

Confused by Overchoice

Dissatisfied / Careless[1]

Price / Value Conscious[1]

Habitual Brand Loyal

 Factors with Cronbach alpha levels bellow .4

 Factors appear in the order presented by the authors.


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