Consumption Behaviour of Students
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1.1. BACKGROUND OF THE STUDY
1.1.1 Consumption Behaviour Definition
If it is said that marketing in true sense is the conclusion of social culture of post modern consumer culture (Firat, 1993) then an immense burden and responsibility has been imposed to determine the conditions and meanings of life for the future (Firat and Venkatesh, 1993). This life which is dealing with meeting unlimited demands with limited resources in hand and planning to secure future by making savings. So keeping this in view the consumption by individuals is really critical to full fill the needs and to secure the future. So in view of this consumption is definitely a focal point of present social and economic world. And that consumption in return definitely triggers a primary marketing concern of probability to repurchase a product regardless of its type (Peter & Olson, 1990). Although consumption is as old as human history and has passed through plenty of phases but even in today's world the repurchase of items is the core priority of sellers. No matter that repurchase is of basic necessity item or luxury product or whether it is matter of mobile connection or someone is talking about E-Banking or it is making flight reservation, every company tried its level best that a consumer should repeatedly purchase its product.
The definition of consumption given by Peter and Olson (1990) is “use of product.” Peter and Olson (1990) are also of the opinion that it is not easy to define or to comprehend the meaning of consumption as there is a vast difference in the nature of various products and services. Even in this age of Information Technology and Globalization era the meaning of product (includes both goods and services) varies from culture to culture and it keeps on changing from one country to another. If a commodity or service is considered as necessity in one region, in other part of the world it may be categorized as luxury. But despite all these limitations researchers and authors still gave some comprehensive and compact definition of consumption.
The idea of consumption defined by Webb (1993) in the following words
“Consumption is the evaluating, buying, using and disposing of products and services.”
But like other fields of study this topic also remained under debate by variety of scholars and researchers in all parts of the world. The word of consumption attracted the attention of researchers and marketers who kept on trying to comprehend the meanings of this idea of “consumption”. While reviewing books and literature another good and wide-range definition of consumption given by Caru and Cova (2007) in the following words
“Consumption is an activity that involves a production of meaning, as well as field of symbolic exchanges.”
The author elaborates this definition by mentioning that consumers do not consume products but they consume the image and meanings associated with the product and they think that it is mandatory that an object or services should fulfil certain functions. Those functions should meet and better to exceed customer's expectation. If it failed to meet their anticipation then they will drop the idea of repurchase of that particular product or in case of services they will avoid to consume or avail that particular service.
Simultaneously it is also said that consumption behaviour also refers to single use of a product like a soft-drink can or one can consume a product repeatedly like mobile phone or automobile. This concept of consumption behaviour also covers the issue of disposing off a product ( (Noel, 2009). Like in case of soft drink can or other single used items a general trend emerged over a period of time is that customers prefer those products whose packaging is reusable or can be recycled. But in case of mobile, automobiles, computers customers often sell those products after making multiple use of it.
Consumption deals with the variety of question as it is mentioned by Schiffman and Kanuk (2007) like what to buy, when to buy, why to buy, from where to buy, how frequently they should buy, and the question of evaluation that purchase. Simultaneously the impact of evaluation on future purchase and disposing it off are also two important concerns of consumer.
1.1.2 Types of Consumption
Schifman and Kanuk (2007) also highlighted two different kinds of consuming entities which deal with the consumption behaviour. The first term is personal consumption which can be defined as when good or services are bought for personal use , for household consumption or to exchange it with someone in shape of a gift. In the mentioned contexts the products are brought for final use by individuals who are referred as end users or ultimate consumers. The second category of consumers is termed as organizational consumption. It includes purchases made by profit and non-profit businesses, government agencies, and institution, all of which must buy products, equipment and services in order to run their organizations.
Although both mentioned categories are of great importance but in this writing my main objective will be personal consumption. As consumption by end user is the most pervasive of all types of consumer behaviour as it involves every individual, of every age and background, in the role of either customer or user or both (Schifman and Kanuk 2007).
It has been revealed from prior consumer spending studies that individuals consume in a specific way and that particular consumption behaviour is in practice due to certain factors like life style, self-image, upbringing and family structure (Martin & Bush, 2000; Penman & McNeill, 2008). There are some other factors which influence the Consumption Behaviour of young consumers which are parents and grandparents (McNeal 1997), parent's income (Page & Ridgway, 2001) and parent's decision making style (Jay 2005; Elder, 1969). The mentioned factors highlighted the multi-dimensional role of parents. But the role of brands (Page & Ridgway, 2001; Doston & Hyatt, 2005; Bacca, 2005), consumer socialization (Razak 2003; Gil 2007; Gronhoj, 2007) and advertising (Bacca, 2005; Spero, 2004) may also not be neglected.
1.1.3. World Consumption Statistics
The word “consumption” is synonym to “spending” or “expenditure”. So using this synonym, in order to quantify the consumer consumption into US $ following table best explains consumption in different parts of the world. The mentioned figures are for the year 2009.
Consumer Consumption in US $
Middle East and Africa
Source: Euromonitor International 2010
From the above table it can be easily inferred that consumers spend US $ 34,050 billion on mentioned below categories. This amount when converted in trillion it becomes almost US $ 34 trillion. This huge spending is almost 11 times more than USA total budget figure which was exactly 3.1 Trillions (http://www.whitehouse.govt, 2009). So this huge consumption creates my interest to study the factors which are reason of this huge spending.
From the above table it is evident that consumer consumption in Asia Pacific is at number 3. Such a high consumption is of great interest for not only academicians but also for marketers.
1.1.4. Malaysian Public university student's Consumption Behaviour
According to Ministry of Higher Education website (accessed on 2011) there are total twenty public and twenty four private universities in Malaysia. The total enrolment according to MOHE (2007) in public universities is 382,997 Out of this total number 247,881 students which becomes almost 65% registered in undergraduate degree programs. It is consensus by Li, Jiang, An, Shen and Jin (2009) Komarraju, Karau and Ramayah (2007), Penman and McNeill (2008) and Feltham (1998) all are agreed that Young Consumers who are also called as Geberation Y are students. It is also agreed that young consumers fall within the age bracket of 18-24 years. As fas as Malaysia is concerned the total population of Malaysian Youngsters in 2007 was around 5 million which was almost 19% of total Malaysian population (Euromonitor International, 2010). Zainurin, Ahmed and Ghingold (2007) focus on the Malaysian young consumer's attitude towards shopping malls. It is highlighted by the authors that Young Malaysians spent a significant proportion of their monthly expenditures in shopping malls. The sources of income highlighted by Zainurin et. al. (2007) are scholarship or study loan, sponsored by parents, self sponsored and others.
But Kamaruddin and Mokhlis (2003) mentioned that the major proportion of spending by young consumers is on clothes, make-up, food, sports equipment and entertainment. In the same article Kamaruddin and Mokhlis (2003) discussed young consumer's consultation with parents and concluded that Chinese young consumers as compare to Malay are less likely to interact with their parents. But in case of Indians they are more likely to interact with their parents and less likely to interact with peers in consumption matters.
But it will be of great interest to find out that what is consumption behaviour of Malaysian young consumers. As it is mentioned in a report compiled by PricewaterhouseCoopers (2004/2005) Malaysian households spent their high percentage of income on food, groceries and personal care items. But less had been researched on consumption behaviour of young consumers in Malaysia.
The Malaysian young consumers is now well aware of products as they are more exposed to Information Technology. Their information due to frequent use of internet along various other factors like socialization, advertising, etc. establishes good awareness of marketing strategies among them. This trend of spending by Malaysian young consumer needs to be further explored.
1.2. Problem Statement
As it is mentioned earlier that according to Euromonitor International 2010 the Malaysian Generation Y is about 5 million in 2007. This is also evident from above discussion that Generation Y has more disposable income (Eisner, 2005; Hongjun, 2006; XU, 2007; Henrie & Taylor, 2009) to spend on variety of products. So keeping in view, the above mentioned facts Generation Y is a lucrative market for producers. Obviously their consumption behaviour is influenced by different factors and variables.
It should be interesting to explore the main contributors towards consumption behaviour of Malay Generation Y. The industry like electronics, telecom, consumer products etc. whether fulfil their requirements or do they still fail to meet this Malay Generation Y expectations. It is really of great concern to study that the consumer skills or knowledge which they acquire during their childhood and teenage whether lasts with them for long time or does it keeps on changing during their adulthood.
So through this study, I intend to highlight the factors and variables that influence the consumption behaviour of Malay Generation Y, which is relatively under-researched in Malaysia.
1.3. Study Objectives
The general objective of this research proposal is:
- To identify general consumption behaviour of Malaysian public university students registered in undergraduate degree program. Whereas under the light of primary objective following are other objectives which will be achieved:
- To explore differences in the consumption behaviour among the three communities Malay, Chinese and Indians.
- To determine factors that influence consumption behaviour of Malaysian public university undergraduate students.
- To prepare recommendation for developing marketing strategies for Malaysian public university students.
1.4. Research Questions
RQ. 1. What is the consumption behaviour of Malaysian public university students registered in undergraduate degree program?
RQ. 2. What are the differences in consumption behaviour among all three communities i.e. Malay, Chinese and Indians?
RQ. 3. How significant each factor in influencing consumption behaviour of Malaysian public university students?
RQ. 4. What are good recommendations to develop marketing strategies for Malaysian public university students?
1.5. Significance of the Study
It has been estimated by US Census Bureau (2010) that more than 17 % of total world population falls within the age bracket of 15-24 years. This age bracket is about 1.14 billion and it was mentioned by Xu (2007) that this age bracket is wealthiest group. As far as Malaysia is concerned, according to Euromonitor International (2010) the population among this age bracket was 5 million in 2007 which became almost 19% of total population. This age bracket normally are part of universities. It is mentioned by Walsh and Mitchell (2005) that education improves analytical skill so through this study I intend to study the students registered in variety of educational degrees from certification/diploma to PhD programs so that their consumption behaviour can be explored.
This particular group has more disposable income (Eisner, 2005; Hongjun, 2006; XU, 2007;Henrie & Taylor, 2009) as compare to the generation of parents and grandparents. Simultaneously they have less saving spirit as compare to Generation X. To study the consumption behaviour of Generation Y is of great interest as most of the Malaysian studies conducted in shopping malls and authors always studied the way this age group shop. In addition to this they are always studied by combining with teensor tweens. So through this study I will solely study consumption behaviour of Malaysian Generation Y.
1.5.1. Academic Perspective
So far lot of studies had been conducted about the behaviour and attitude of Malaysian consumers in shopping malls like grocery shopping by Miranda and Jegasothy, a study of Malaysian's behaviour in shopping malls conducted by Zainurin et. al. (2007) etc. But I failed to find any study which is solely targeting Malaysian young consumers.
There are studies where main focus was exploring single variable like television viewing by Ghani (2004), culture studied in context of service quality by Kueh and Voon (2007), ethics in consumption studied by Chai and Lung (2009).
In the light of above mentioned facts the main focus of this study will be consumption behaviour of Malaysian young consumers. The study will be a food for thought for academicians which will further enhance the existing body of knowledge on the consumption behaviour of young Malaysian consumers. The significance of factors that influence consumption behaviour of young consumers definitely opens new horizons and helps the researchers to broaden the scope from studying attitudes of young consumers in shopping malls to the general consumption of Malaysian young consumers.
1.5.2. Industry Perspective
Young consumers are always a great mystery for producers of products. It is really challenging to fulfil their fast changing taste, needs and choices. This study will definitely give a more coherent and clear picture of the factors that influence young Malaysian consumer's consumption behaviour. Through this study it will be explored that how Malaysian Generation Y undergo the four steps mentioned in the definition of consumption behaviour which are pre-purchase evaluation, finalizing and making purchase of product, using of product and disposing off product.
Through this study the consumption behaviour among three ethnic groups of Malaysia will be explored so that a clear and specific distinction of consumption behaviour among these three groups can be researched which will definitely useful for marketers for developing marketing strategies.
2.1. Literature Review
For this study I would like to start my discussion by highlighting the importance of marketing.
2.1.1 Marketing and its Importance
In Forbes it is mentioned by Trout (2006) that it has been long ago that Peter Drucker, the father of business consulting, made a very profound observation that has been lost in the sands of time which is:
"Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business."
This concept of marketing is far beyond offering and creating of products and services. It's a matter of customer creation. It deals that how relationship can be established with customer and the ways through which these relationships can be strengthen. It also addresses to certain other critical issues like; How a loyal customer can be created? How product inclusive of goods and services can be innovated?
Before discussing this concept in detail it is better to present certain definitions of marketing:
Marketing in the words of Kotler, Armstrong, Ang, Leong, Tan, & Hon-Ming (2009):
“The process by which companies create value for customers and build strong customer realtionships in order to capture value from customers in return.”
Another definition of Marketing given by American Marketing Association mentioned by Cooper and Schindler (2006) is:
“It is an organizational function and a set of processes forcreating, communicating and delivering value to customers and formanaging customer relationships in ways that benefits the organizationand its stake holders”
Aaker, Kumar and Day (2001) define marketing in the following words:
Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives. The marketing concept requires customer satisfaction rather than profit maximization.
It is evident from all mentioned definitions that customer is the main focus of each producer and service provider. As it is highlighted by Levitt in 1960 that industry should focus customer- satisfaction process rather than a goods producing process. He emphasized that all producers should understand this philosophy as industry begins with the customers and his/her needs not with the patents or copyrights, neither it starts with raw material or a selling skill. The idea which was presented around 50 years back is still valid and nowadays this main issue is a core concern by all the companies.
The Drucker's philosophy about business enterprise is very well comprehend by saying that marketing and innovation are two basic functions of business. The idea of marketing keeps on emphasizing that how customer's confidence can be won. The companies from USA to Australia, the organizations operating in Africa, the enterprises offering their products in Asia Pacific and regardless of product variety as well as geographic location all are trying hard to satisfy the fast ever changing consumer needs, wants and requirements.
Peter and Olson (2008) highlighted that companies are making changes to serve their customers. They have highlighted three reasons of these changes. The first reason of bringing the changes is the dramatic success of Japanese companies such as Toyota and Sony who give ample attention to their consumers and give them value-laden  products. This idea spurred other companies philosophies and influence them to prioritize customer's taste, needs and wants.
The second major reason is the dramatic increase in the quality of consumers and marketing research. In the past although companies conduct surveys and receive feedback from customers which was occasional and not so frequent. But today Information Technology made it easy for retailers and manufacturers to keep the track of customer reactions towards product and services.
The third main reason of prioritizing customer's taste is the development of internet as marketing tool. As internet is a tool to through which information about products can be shared with vast majority.
2.1.2. Consumer Behaviour
Variety of writers like Kotler (2008), Engel, Black and Miniard (1995), Mclver and Naylor (1986), mentioned that understanding and adapting to customer motivation and behaviour is not an option but it is life blood for the survival of companies in this modern world. And this term or subject bring tremendous change in organizational set up.
According to McNeal (1982, p. 8)
“consumer behaviour is the preparation for purchase, the purchase act and the use and disposal of those things purchased.”
McNeal (1982) also highlighted the three stages for the act of consuming which are (1) pre purchase behaviour, (2) purchase behaviour, (3) post purchase behaviour. The author mentioned that most of the time researchers or writers overlook pre purchase behaviour but that is the stage which cannot and should not be overlooked. While defining “consumer” author elaborated that consumer is the person who undergo through all mentioned three stages for his benefit or for the benefit of others. So in consumer behaviour the three stages mentioned by McNeal (1982) are integral. And whenever a consumer spends money whether on good or on services he/she has to undergo these three stages.
Another definition of consumer behaviour given by East (1997)
“consumer behaviour is about human responses in a commercial world; how and why people buy and use products (include both goods and services), how they react to prices and other promotional tools and what underline mechanisms operate to help and hinder consumption.”
2.1.3. Consumer Behaviour: Bridge the Gap between Producer and Consumer
Above mentioned definitions, considered the discipline of Consumer Behaviour as a bridge between producers and customers/consumers. Like commercial world where producers advertise and share the information about the products they are offering to the market and response shown by the customers or consumers can be positive or negative. The positive response of the customer or consumers resulted in the shape of increasing sales, revenue for the company, satisfaction and trust on a particular or all products by a company. But a negative attitude can be like not purchasing the product of a company, shown distrust or sharing negative beliefs about a company's product to others. Simultaneously, the definition also shed light on another important aspect help to study the mechanisms, behaviour or attitude of customers or consumers under the influence of which they stop buying the product or any change in the attitude of customers/consumers towards a product.
After discussing the definitions of Marketing and Consumer Behaviour one thing is evident that creation of value for producers and marketers are of core concern. This creation of value is integral and most critical phenomenon for marketers. Value is defined by the customer not by the supplier in the factory or it can also be defined that value is not what the producer puts in but what the customers get out (Khalifa, 2004). So this creation of value should be addressed and deal professionally as if it fail to meet or exceed customers' satisfaction than he/she will jump to alternate or competitor.
2.2. Consumption Behaviour in Different parts of The World
Consumption is lifeblood of each individual. Consumption can be termed as a process or a phase through which each and every individual of each nation has to undergo (Raijas, Lehtinen, & Leskinen, 2010; Kamaruddin & Mokhlis, 2003) or consumption is a mean to express and create self identity (Phau & Woo, 2008) or consumption is ruled by sports celebrities (Dix, Phau, & Pougnet, 2010). So a lot of factors that influence consumption are researched, studied and comprehended in variety of studies. How individuals undergo consumption in different parts of the world are mentioned below:
2.2.1. Consumption Behaviour: American and Canadian Perspective
It is highlighted by Moschis and Churchill (1978) that early sociologists speculated that young people learn most of the basics of consumption from their parents. It is interestingly a very valid fact even in this age of information technology and in this world which is called as global village. Parents are still considered as the most valuable, reliable and modest source of knowledge regarding consumption behaviour. Even young consumers not only consider them as ready source of knowledge but even when young consumers start living alone they still consult their parents whenever they have to make any purchases. It was highlighted by Feltham (1998) that primary groups have stronger influence on consumption. Parents are one of the most strongest part of this primary group. Generally it has been observed, researched and mentioned that generally parents are considered as strongest and comprehensive source of knowledge and they have greater influence on the consumption behaviour of their descendents. Feltham's (1998) finding that males are less likely to discuss about consumption with parents and if they do they receive lesser reinforcement but this trend is quite opposite in case of females where they openly and comfortably discuss about consumption with parents and simultaneously they receive positive feedback as well. This finding of Feltham (1998) is consistent with Moschis, Moore and Smith's (1983) results.
It is mentioned by Clark, Martin and Bush (2001) that parents are role models for their children in consumption and the way parents educate their children about consumption, brand and other spending activities it lasts with them for quite a long time.
2.2.2 Consumption Behaviour: European Perspective
It is highlighted by Rolfe (2005) that young consumers in UK are living with their parents and they are provided with all the necessities but the parents of this Generation Y has more disposable income as compare to the generation of 1960s and 1970s. On the basis of this factor Generation Y are more interested in Branded and expensive items. This fact is highlighted and mentioned by Gronhoj (2007). Both positive and negative experiences teach young people how to direct their future decisions on spending. At the same time, they learn that good intentions can be lost to temptation, and consumer goods and/or services may not be rationally controllable.
According to Gil, Andres and Salinas (2007) repetitive consumption of brand establish a loyalty of brand among children and it last with them even when they start living alone. They stick to that brand and loyal to its features. It also mentioned that memories associated with that brand also stopped them from switching the brand. It is fact mentioned by Gil, Andres, and Salinas (2007) that when young consumers start living alone they carry the experience of consumption with them which they learn while living with their parents. They take the same learned consumption behaviour with them which is shown by their parents and which they experience during their stay with their family.
As per Gronhoj (2007) young consumers not only spend increasing amounts of money on consumer goods but they exert considerable influence on the consumption choices of the rest of the family. Media through advertisement also shape up the consumption behaviour of these young consumers.
Bravo, Fraj and Martinez (2007) highlighted that whenever young consumers faces some new consumption situation which they never encounter earlier they contact their parents. In most of the cases parents kept on giving them suggestions even when they start living alone. It is also realised that young consumers consult their parents more frequently when they start living alone than during their cohabitation. Even the product quality is also dependent of the parents usage, suggestion and recommendation.
Schloffer, Maloles III and Chia (2009) mentioned that Generation Y is very well informed generation. They start using computer, internet and other electronic gadgets from the early part of their lives which not only enhance their knowledge for products but also it polishes their thinking capabilities. Internet is a tool for them who helped them in making purchase decisions. They are brand conscious and fashion oriented generation. But simultaneously they are criticised as poor financial planner and considered as they have very low financial skills.
In Finland it has been noted and written by Raijas, Lehtinen and Leskinen (2010) that technological and economical institutions facilitate and encourage consumption by offering credit to consumers. These financial institutions are offering credit cards, mortgages, personal loans, etc. Young consumers are availing these credits facilities mainly for two reasons: one is for setting up their own homes and secondly they want to raise their social status. Consumption on mentioned factors leads this Generation Y towards increase their consumption and in some cases this consumption is more than their income which becomes critical and have adverse impact of the country's economy.
Bouzaglo and Moschis (2010) mentioned that in some countries and culture the show off becomes trend and people especially young consumers showed it in their consumptions. They purchase products which are classified as speciality products so that they can have separate identity and considered as status oriented and fashion driven. But in countries like France it is the culture that money and possessions should be kept in secrecy. It is also mentioned by Bouzaglo and Moschis (2010) that in case of dislocated families young consumers heavily rely on peer communications and media. In this case the important role of parental communication about consumption is missing and these young inexperienced consumers may lead towards excess consumption.
2.2.3. Consumption Behaviour: Asian Perspective
According to Hongjune (2005) young consumers always try to experience new things. They are very experiential and innovative. When they are associated to a group of friends then their liking and disliking should be aligned with their peers. If they failed to do so then they have feeling that they will be dropped by their peers. Even in purchasing products they are very careful about the group's opinion with regard to the brand, colour, and features of product. Simultaneously in Singapore it is mentioned by Hongjune (2005) that Generation Y of Singapore has seven pockets. Parents, grandparents from maternal and paternal side and now part time work is also considered as respectable source of income. The income from part time work is sometimes saved but most of the time it has been observed that they kept of spending and the saving spirit is not like their parents or grandparents.
Hsu and Chang (2006) on the basis of findings by Moschis and Churchill (1978) mentioned that socialization has an enormous impact on the consumption behaviour of individuals. There are three important and integral socialization agents which are parents, peers and media. Among these three parents are considered as one of the most critical and important factor of socialization. Generation Y considered them as most reliable source of product information. Parental communication with their children has an enormous impact on their consumption behaviour. Hsu and Chang (2006) also agree with the statement by Martin and Turley (2004) that Generation Y is considered as wealthiest generation and they have more disposable income as compare to baby boomers or their parents. So that's why marketers are concentrating on this segment.
It is finding of Penman and McNeill (2008) that young consumers showed a very relaxed and casual attitude towards consumption thorough debt. According to them consumption of disposable goods such as fashion and entertainment items are mandatory to please themselves. This finding is quite similar to others scholar's results through which they concluded that this generation only want to spend and consume and they are unaware of saving for future or to invest in some assets. Their consumption most of the times lack planning and thats the reason they are termed as “want it now” generation.
Ebren (2009) has mentioned that Turkish Generation Y in most of the cases due to their age likes to purchase beautiful and attractive products. This beauty and attraction may be in term of packaging, product shape or any other factor that may enhance the outlook of product. It is also finding of Ebren (2009) that friends also play a vital role in purchase of a product. Fashion and customer services also tried to motivate the consumption of young consumers.
Sahay and Sharma (2010) also agree with the scholars that parent are main source of consumption skills and expertise but this important factor of socialization lose their control on young consumers with the passage of time. This strong influence of consumption on young consumers start shifting from parents to peers when young consumers start living away from their homes either in hostel or either in independent houses. Peer influence is also stronger where there is weak family communication or unstable family environment.
2.4. Theory of Planned Behaviour
By analyzing definition of Marketing, Consumer Behaviour and consumption behaviour it can be inferred that individuals irrespective of their nationality, race, gender, education and age have to play their role as consumers and while spending money on products they have to undergo a process of consumer decision in which various available alternatives are evaluated. To further understand the consumption behaviour of Generation Y I am using theory of planned behaviour.
The model of theory of planned behaviour can be observed below:
Theory of Planned Behaviour (Ajzen, 1991)
The Theory of Planed Behaviour (TPB) is an extension of the Theory of Reasoned Action (TRA) which was presented by Fishbein and Ajzen in 1975. The TPB is extension of the TRA by introducing perceived behavioural control (PBC). This inclusion of PBC was done as TRA failed to explain behaviours in which a person does not have volitional control over it (Fen & Sabaruddin, 2008).
The TPB also attempts to predict behaviours that are not completely volitional by incorporating perceptions of control over performance of the behaviour (Ajzen, 1991). Perceived behavioural control (PBC) is the individual's perception of the extent to which performance of the behaviour is easy or di¬ƒcult, and is conceptualized to capture perceived/actual skills, resources, and opportunities (Ajzen, 1991). In this write up Theory of Planned Behaviour is used as it is a fact and finding by Ajzen (2002) that TPB is well known theory for predicting social behaviours. It is also mentioned by Bansal and Taylor (2002) that TPB has the capacity to explain consumer behaviour.
2.4.1.Behavioural Attitude: Behavioural attitude in connection with behaviour can be explained as the degree to which performance of the behaviour is positively or negatively valued (Ajzen I. , Icek Ajzen: Homepage, 2010). Attitudes are actually instrumental evaluations of performing the behaviour by the individual (Rhodes, Courneya, & Jones, 2005).
2.4.2.Subjective Norms: Subjective norm deals with the social pressures on the individual to perform or not to perform a particular behaviour (Rhodes, Courneya, & Jones, 2005). According to Lee, Murphy and Neale (2009) norms originated from reference groups which can be parents or peers that shape up the values, norms or perspectives.
2.4.3.Perceived Behavioural Control:Perceived behavioural control can be defined as to people's perceptions of their ability to perform a given behaviour (Ajzen I. , Icek Ajzen: Homepage, 2010).
2.4.4.Intentions: Intention is an indication of a person's readiness to perform a given behaviour, and it is considered to be the immediate antecedent of behaviour. The intention is based on behavioural attitude, subjective norm, and perceived behavioural control, with each predictor weighted for its importance in relation to the behaviour and population of interest (Ajzen I. , Icek Ajzen: Homepage, 2010).
2.4.5.Behaviour:Behaviour is the manifest, observable response in a given situation with respect to a given target. Single behavioural observations can be aggregated across contexts and times to produce a more broadly representative measure of behaviour. In the TPB, behaviour is a function of compatible intentions and perceptions of behavioural control. Conceptually, perceived behavioural control is expected to moderate the effect of intention on behaviour, such that a favourable intention produces the behaviour only when perceived behavioural control is strong. In practice, intentions and perceptions of behavioural control are often found to have main effects on behaviour, but no significant interaction (Ajzen I. , Icek Ajzen: Homepage, 2010).
2.5. Factors that Affect Young Consumer's Consumer Behaviour
2.5.1. Consumer Socialization
Consumer Socialization is defined by Ward, 1974 in the following words:
“It is the process by which young people acquire skills, knowledge, and attitudes relevant to their functioning as consumers in the market place.”
This definition is quoted by many authors like Gavish, Shoham and Ruvio (2010), Hsu & Chang (2008), Alice Gronhoj (2007) and Page and Ridgway (2001), and consisdered this definition as complete and most appropraite as compare to other definitions.
The three main components of definition are skills, knowledge and attitude. Skill refers to the idea that how smart or intelligent a person is in spending his/her money on a particular product which include both goods and services. That skill should be polished and mature enough that the consumer can get the optimal benefit of his or her money by spending it on any thing. But when the issue of knowledge is there than this concept deals with the information about the product and the services . More knowledge gives immense confidence while spending the money. The price, features, warranty, guarantee, after sales service, maintenance and many more come in the definition of knowledge. The third important pillar of definition is atitude which deals with that whether someone believes in branded or unbranded items, color choices, shape, aesthetics and all those things which can sperate the individuals from others.
According to Moschis and Moore (1980) and Ward (1974), there are three major socialization agents which are family, peer and mass media.
220.127.116.11. Consumer Socialization:
American and Canadian Perspective
Family: Parents serve as socialization agents to their children through consumer learning (Caruana and Vassallo, 2003; Moschis and Churchill, 1978). According to Moschis (1985) family influence on consumption patterns and attitudes often overrides any other form of influence. The family influence is significant from consumer socialization perspective, as a lot of consumer behaviour is learned and adopted as a child. Therefore, much information and attitude development concerning products and services is based on the influence of the family. An important finding mentioned by Ward, Robertson, Klees and Gatignon (1986) that parents while satisfy children's requests encourage children to be attentive to advertising and to ask things more frequesntly; while parents who discuss children's requests encourage them to develop skills in selecting and interpreting product information. The traditional paradigm in marketing views parents as role models for their descendants in the consumption domain (Clark, Martin, & Bush, 2001). It is speculated that young people learn basic "rational" aspects of consumption from their parents (Moschis and Churchill, 1978; Caruana and Vassallo, 2003).
The family is a great source of information and responsible for subsequent development of attitudes during the consumer's early years through continued exposure to or use of a product (Feltham, 1998). This information is considered as first step to brand awareness. Feltham (1998) reported that males have less brand correspondence with parental choice as compare to females. He has mentioned that males are less likely to communicate overtly with parents about consumption and are less likely to receive positive reinforcement. But in case of females, they may possess a more developed sense of brand preferences than males and therefore, their brand choices would correspond more with those of their parents.
According to Neeley (2005), parents usually have primary role in consumer socialization. They educate their descendants through both direct and indirect means. Direct consumer learning is the intentional instruction by the parent for the purpose of teaching some aspect of consumer behaviour, while indirect learning is the unintentional instruction of some aspect of consumer behaviour that is usually initiated by the descendants through direct observation or participation (McNeal, 1987). However it is observed that most of the consumer instruction between parents and children does not take place directly. Parents place their children in consumer situations simply because the parent and child are together when the activity takes place, often referred to as co-shopping (Neeley, 2005).
Friends: To interact with like-minded friends and to be a part of social network is priority of young consumers (Stock & Tupot, 2006). Peer groups are strong source of consumption among young consumers (Moschis & Churchill, 1978). Moschis & Churchill (1978) highlighted that parent's influence continue to decrease as consumers passes through different phases of age. They start inspired and influenced by their peers as they grow up. As Erbring and Young (1979) argue, group-level characteristics often affect or influence the individual-level characteristics of group members. Moschis and Churchill (1978) mentioned that peer communication influences consumers' behaviour and motivation in relation to consumption and attitude toward products and advertising. Peer informative influence is especially critical to young adult consumers who actively seek new information from a variety of sources when making informed market decisions (Hirschman 1980).
Mass Media: As it is already mentioned that mass media is the third important aspect of socialization. It is mentioned by Moschis and Churchill (1978) that mass media influence on the consumption behaviour comes mainly from programming and advertising. It has been highlighted by them that television viewing is positively related with the consumption. Simultaneously, it is also one of the important finding that consumption is also directly related with the number of television advertisements viewed by consumers. Moschis and Churchill (1978) also mentioned that media helped consumers in enhancing their information about products. The features, attributes and many more are known by the consumers through media.
According to Eisner (2005) that the Generation Y is changing its priorities. They are less interested in listed TV Programs. They are more inclined towards games and DVDs . Even when they came home after coming from college they love to live in virtual world. By living in virtual world they are connected with their peers or friends and that social circle keep on updating about modern inventions particularly in electronics. And in order to make this bond more stronger they always try to use the brand suggested by peers as well as consumption behaviour liked and shaped up by the friends group.
Stock and Tupot (2006) mentioned that now even for companies they have to be very careful about selecting celebrity for their programs or advertisement. In this age of information Generation Y is very well informed. So producers have to go for that celebrity which is acceptable by majority. If that celebrity is not known to majority then they may not attract the attention of Generation Y and they might lose a sizeable market.
But advertising in this high-tech age become challenge for advertisers as now Generation Y are most of the time expose to more than one commercial media exposure at one point of time. This phenomenon is known as multitasking (Rohm, Sultan & Bardhi, 2009). This particular trend make the advertisers job more critical and challenging. As they have to show their presence on TV, internet and print media as well. All have different demands with variety of challenges.
18.104.22.168. Consumption Behaviour: European Perspective
Family: Family has been considered as a powerful influencer in consumer behaviour (Gil, Andres & Salinas, 2007). Caruana and Vassallo (2003) highlighted that among all socialization agents, parents are the most pervasive and significant agent for young consumers. They have great influence on their buying. The process of shaping a child into a consumer is to greater extent determined by parents who spend more time with their progeny and who buy them more products (Sowa & Burgiel, 2009). According to Gronhoj (2007) mentioned that young consumers when start living alone means when they are separated from their parents, even then in purchasing consumer durables and electronics they always consult their parents. Even in case of acquiring financial services like banking they always go for heard brands as they have strong perception that this brand names which they are hearing from their childhood carry quality.
According to Rolfe (2005) young consumers are considered as wealthy generation. As most of them in United Kingdom are living with their parents and they have huge disposable income when they are compared with their elders. Rolfe (2005) also mentioned that China's Little Emperor Syndrome' is replicated in UK and now number of children per female is dropped down to 1.5 which was earlier 2.4. This reduction in children population compel parents to keep the child with themselves. Although experts suggest that too much restriction or extra care of child may restrict his/her capability. Older ‘kids' are getting innumerable perks by staying at home. Their parents are covering their rent, bills, food, toiletries and travel, and are also acting as a live-in chauffeur, cleaner, cook and laundry service. Young adults want to leave home because of the lack of independence but their bedrooms are now like in-house apartments, overflowing with technological equipment purchased by their parents; many even have their own fridges.
Rolfe (2005) also elaborated that today's youth don't pester their parents to buy them stuff. Parents actually try to anticipate what they want. ‘Pester Power' has given way to a new phenomenon, ‘Guesster Power'. In fact, 20% of all purchases for children are made without any request from descendants.
Bravo, Fraj and Martinez (2007) mentioned that young adults have a higher disposition to gather information from their parents once they have left the family home than during their cohabitation. From the family perspective, there is also a sense of protection, and then, parents frequently try to make suggestions to their children on what to buy. These suggestions can be made before leaving their family home or after leaving home. It is also highlighted by Bravo, Fraj and Martinez (2007) that most of the times young consumers memorize the attribute of the product rather than brand name. Along product attribute it is also highlighted that at times young consumers are emotionally associated with brand names and they recall those associations of childhood or any other occasion, which is due to their parent's high loyalty with a particular brand. It is also inferred by Bravo, Fraj and Martinez (2007) that products received as gifts by children are used and experienced by children. These experince are long lasting and simultaneously the use of product is closely observed by children and on the basis of these experiences and observation a product is liked or disliked by these young consumers. It is also mentioned that whenever young consumers made first purchase of any product by themselves, most of the time it is same brand which is purchased by their parents but after certain period of time they establish their own criterias on the basis of numerous experiences they came across and then they try some other brand.
Friends: It is mentioned by Bouzaglo and Moschis (2010) that in case of family disruption like divorce or parents are more committed towards their careers, friends and media have strong influence on the consumption behaviour. Normally in the mentioned scenario young consumers treat their friends more trust worthy and knowledgeable about goods and services. They not only ask advice from their peers but heavily rely on their brand choice.
Young consumers treated friends after parents as reliable source of information. They have strong perception that friends can fill in the information gap and they have higher influence in purchase decisions (Gronhoj, 2007). According to Gronhoj (2007) in addition to the information at times friends are also considered as good source of money or they also provide financial aid. It has been also mentioned by Gronhoj (2007) that when young people start living alone then a very comprehensive help is provided to them by friends followed by parents. This help is in term of information sharing and sometimes in monetary terms as well. Gronhoj (2007) mentioned that young consumers heavily rely on their friends for electronics. They consider that friends have greater electronic product information which should be used.
Even King (2006) mentioned that even some cases young consumers give value to their friends more than their family. This scenario leads immense reliability on the friends. And from a minute product to highly sophisticated item, peer's opinion matters a lot.
Even Tank and Tyler (2005) mentioned that friends play a vital role followed by parents. And strategists should realize this fact and should design their strategies by offering discount and services so that they can capitalize the strong influence of friends and family.
Mass Media: Young consumers are totally dependent on media. Young consumers have TVs, computers, Laptops and now they have 3G phones, blackberry through which they not only SMS and call their peers but also use internet so that they kept on updating themselves about variety of products. Even now Generation Y use internet banking, read music reviews and many more. The message they repeatedly receive from all these mediums by reading blogs, product reviews or through social networking sites they are inclined towards the products or the brands which are frequently advertised thorough all this media (Rolfe and Gilbert, 2005).
It is mentioned by Kremhelmer and Zenger (2007) that there are many products which are not target group specified. The example given by authors is tennis rackets. The authors highlighted that for these products authors have to rely on mass media like TV so that message can be conveyed to large population.
According to Schloffer, Maloles III, Chia (2009) it is ascertained that the skills of getting information from media like advertising, Television, internet etc. are marvellous. Although they are more brand conscious and fashion-conscious but Generation Y has poor financial skills and they may not be able to save.
22.214.171.124. Consumption Behaviour: Asian Perspective
Family:Consumer socialization process begins at home; young consumers see brands which are consumed in the family and are likely to give first preference to the use and purchase of those brands. Even though young consumers start consuming and developing relationships with the new brands they get exposed to but the impact of the brand exposure from their families is likely to be strong. In the Indian context, family has traditionally played a strong role in influencing choices of their descendants. This family influence on the consumption behaviour of young consumers sometimes at its peak and young consumers start believing about certain brands that there is no substitute available in the market. It happens due to high visibility and exposure to that brand at home (Sahay & Sharma, 2010).
In terms of product quality, Family also influences young adults' perception. This perception is highly related to experiences of family. But an important aspect is that young consumers first start buying the brand that is used at home, but they might later on try other brands also and usage would then depend upon their experience with that brand (Sahay & Sharma, 2010). It is also highlighted by Sahay & Sharma (2010) that parental influence may vary by age and the status of the young consumer. This influence is highly related with the dependence or independence on the family.
According to Andersone and Gaile-Sarkane (2010) family has greater impact on consumpotion behaviour of young consumers as compare to peers and colleagues.
According to Penman and MCNeill (2008) part time earning is considered as main source of income for most of the young consumers. This part time income is followed by student loans and family contribution towards their income. This reliance on parent's contribution is sizeable but with the fact that at times parents raise questions on the lifestyle of their children.
Chinese parents are frugal and spending on luxurious goods is discouraged . So people spend a lot on branded goods will be seen as wasteful. Chinese parents play a dominant role in discouraging materialistic values and teach young consumers that abundant possessions of branded goods are linked with wastefulness (Chan, 2006).
Peers:It has been found by Sahay and Sharma (2010) that as teenagers moved from teen age to the age of young consumers their interaction with friends and peers will increase. And they are strongly influenced by the brand choices and consumption behaviour of the peers. In order to be the active member of the group they keep on trying to adopt the recommended brands and the same consumption behaviour.
It is mentioned by Li, Jiang, An, Shen, Jin (2009) that due to interdependent self-views and peer pressure, it is important for young consumers to purchase products and brands to impress their peers.
It is mentioned by O'Cass (2004), that younger people place more emphasis on their appearance than older people, since they are starting to have a more active social live and need to show their look to friends. It is also revealed that younger people are more careful about their physical appearance because they want to be accepted in a reference group and they like to be praised and admired in the group or social circle to whom they belong. According to O'Cass (2004), peers and friends are one the main source of product knowledge.
Mass Media: Lee and Tai (2006) found out that due to the increase contact with western culture, people and product through the mass media young consumers are more prone to imported and western products. They appreciate more global brands as compare to local manufactured products. This trend is becoming more stronger when celebrities appear in certain advertisements and advocates a particular product. These celebrities are well known by Generation Y as nowadays internet and social networking are good source of spreading and sharing news and achievements by celebrities.
Chan and Zhang (2007) come up with a conclusion that young consumers are highly motivated to use the products which are endorsed by celebrities. These celebrities no matter whether they use that product or not in their lives but their appearance in advertisements wins the confidence of many and particularly Generation Y who are living in this consumer society and they start purchasing and use that commodity which is endorsed or recommended by their favourite celebrity.
Lee, Murphy and Neale (2009) highlighted that youth dominated media such as social networks has an enormous impact on their consumption behaviour. The brands and products which are projected by the groups to whom they belong are always in high demand. They always try to associate themselves with a group by using the recommended product and brand.
2.5.2. Money Attitudes
The understanding about money usually established at very early age. For children's money understanding is like this is something through which one can have everything or can purchase variety of items. But researchers, authors and experts said that its meaning is quite subjective. It means that the meaning and understanding about money is always in the phase of development since childhood till the end of one's life. But still researchers shed light on the meaning, understanding and people's perception about money.
Mitchell and Mickel (1999) mentioned that “money” is an object—an inert thing. If someone need to digout the history of money then its roots are lying in the concept and idea of barter. That barter system gave the idea of “money” which arose as a convenience to facilitate trade. Later on attitudes and behavioural tendencies towards money developed by people. Everyone has his/her our own understanding rather definition of money. Social rules and regulations along with norms guide and dictate the use of money (Belk & Wallendorf, 1990).
As per Tatzel (2003) the word of money deals with variety of concepts like power, security, achievement and it deals with love and affection on the one side but on the other side it is treated as evil. Simultaneously, people deal with money in variety of ways like they make budget to use the money, they spend it once they get it, debt burdens pile up on the people, they also tried their best to hoard it. So conclusively it can be inferred that money has variety of understandings which seems to be difficult to comprehend.
According to Rose and Orr (2007) there are multiple meanings of money. These meanings are personal, subjective, and linked to notions of the self in a modern consumer society. It is also considered as source of prestige, longing, and anxiety.
According to Durvasula and Lysonski (2010) money can permit extravagances and new identities to develop for consumers since money can signify prestige. In effect, money has more than just an economic meaning; it has a social meaning that allows consumers to emulate each other in their choice and use of consumer goods.
In order to study the money attitudes and beliefs following are some scales: Money Ethic Scale (MES) developed by Tang and Kim in 1999, Money Beliefs and Behavioural Scale by Furnham in 1984 whereas Money Attitude Scale (MAS) was developed by Yamuchi and Templer in 1982. MAS got the attention of authors throughout the world as it is considered as best conceptualization and measurement of money attitudes (Darvasula and Lysonski, 2010). I am using MAS as it was developed in a more ethnically diversified region of the United States of America (i.e., Los Angeles and Fresno, California) (Medina, Saegert and Gresham, 1996). So this scale suites my study as my one of the objective is to explore the consumption behaviour difference among Malay, Chinese and Indians in Malaysia. Another good reason of using MAS was given by Medina, Saegert and Gresham (1996) that MAS scale has been more consistent in its result than the more widely used MBBS (Money Beleifs and Behaviors Scale) which usually show unstable result. According to Darvasula and Lysonski (2010) MAS captured the essence of the various meanings of money.
The core factors discussedin MAS are explained below:
Power Prestige: As per Medina, Saegert and Gresham (1996) power prestigedeals with status seeking, competitiveness, external recognition and acquisition of material goods. According to Roberts and Jones (2001) for many people main source of power is money. They do not buy cars, clothes, houses or food they always try hard to acquire status, domination, control and authority. A group of people always consider that money is a status symbol. This status consumption is considered as a part and parcel of power which deals with respect, consideration and envy from other people. This status consumption allows consumers to feel socially more powerful and prestigious. This is the reason that people who have high score on power dimension they use money as a tool to impress others. According to those people money is a symbol of success which they achieve over the period of time (Durvasula and Lysonski, 2010).
Distrust: According to Yamauchi and Templer (1982) this factor of MAS refer towards price of goods and services. A better label for this factor suggested by Roberts and Jones (2001) is “price sensitivity”. Another label for this distrust mentioned by Medina, Saegert and Gresham (1996) is “consumer competency”. The reason given for this label is due to the fact that the items focus on the consumer's sensitivity to the price paid for products. This distrust/anxiety dimension also refers to lack of faith in the ability to make efficient purchase decisions (Medina, Saegert and Gresham, 1996). Whenever there is a situation when someone has to spend money if he/she feels hesitant, suspicious and doubtful he/she has high score for this factor.
Anxiety: Anxiety is a feeling that provokes a spontaneous action and pushes the consumer to reduce the tension (Edward, 1992). The people who score high in anxiety they see money as a source of anxiety as well as a source of protection from anxiety (Durvasula and Lysonski, 2010).
Retention Time: According to Medina, Saegert and Gresham (1996) retention time measure attitudes which require planning and preparing for the future. Parsimony, hoarding and obsessive personality traits. According to Roberts and Sepulveda (1999) retention time is more concerned about financial planning and careful use of money. The people who have high score for retention timethey kept on closely monitor their financial matters and keep an eagle eye on money matters (Durvasula and Lysonski, 2010).
From the above mentioned factors researchers like Robert and Jones (2001) and Durvasula and Lysonski (2010) researched only three which are power-prestige, distrust and anxiety. The reason of dropping and eliminating retention time given by them is that young consumers do not consider items of retention time dimension (e.g. I save now to prepare for my old age).
So I am also going to study the three actors of Money Attitude Scale which are power prestige, distrust and anxiety.
126.96.36.199. Money Attitude:
American and Canadian Perspective
Power Prestige: According to Yamuchi and Templer (1982) power prestige is treated as use of money to impress and influence others. In this case authors further elaborate that money become a symbol of success and people tend to spend more so that other get inspired by their consumption and spending of money. According to Roberts & Jones, (2001) money is important for most of the students who raised in a credit card society. It is mentioned by Roberts and Jones (2001) that most of the students mentioned that they want to study or to get higher education so that they can earn more money. According to Roberts and Jones (2001) power prestige is significantly related to compulsive buying behaviour.Power prestige as
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