Class Topic: Current Issues in Consumer Behavior

Team Topic: Chapter 4 Title: Consumer Motivation

Based on Schiffman, L., and L. Kanuk, Consumer Behavior, !
th
"dition, #$rentice
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Team (ame /u0ois
1h2te, 3ahvena /eon, Senior, Marketin4
5acult2 Sponsor:
/r. K. 3oonas
6ssociate $rofessor of Marketin4
/epartment of Mana4ement and Marketin4
6pproved 02 Center for Business Communications
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$rint name Si4nature /ate
This research paper 8as su0mitted in partial completion of the re9uirements of
Sprin4 &!& M:KT ****.$! Consumer Behavior
eCourse Supported
Colle4e of Business
$rairie ;ie8 6<M =niversit2
Su0mitted on /ate: 5rida2, March &, &!&
Citation
Yoon, K., & Tran, T. V. (2011). Revisiting the relationship between
consuer lo!alt! an" price sensitivit!# The o"erating role o$ "eal%
proneness. Journal of Marketing Theory and Practice, 19(&), 2'&%&0(.
Retrieve" $ro http#))search.pro*uest.co)"ocview)+,-.(2&(+/
accounti"0,0(2
6rticle 1ord Count: >>-+
$urpose of the 6rticle) $a4e &,*
The purpose of this article is to explore the relationship between consumer loyalty and
the sensitivity of prices by expanding their understanding for the different types of
customers as in the loyal and non-loyal type. The researchers have expanded their
knowledge on the different consumer groups with in each of the segments and also the
different levels of price sensitivity.
Theor2?Model?5rame8ork used) $a4e &,*)&,>
The researchers believe that when companies offer promotional incentives for their
existing and new customers that they have a wholesome understanding for how changes
to the price will get a response from the various types of consumers. However, there is
abundance of studies that are focused on price sensitivity and the relationship between
customer loyalties. The researchers also have beliefs that the difference in price
sensitivity and non-sensitivity is distinctively obvious between the loyal consumer and
the non-loyal consumers. The consumers are catalogued in two different frameworks
HCL hard-core loyal! and "#" proportion-of -purchase! that they are put into based off
of the history of their purchases. The researchers are digging into the motivations that
affect the consumer purchasing decisions. $t is said that the outcome of the two studies
conducted during this research period will help managers better segment their target
markets.
Stud2 Settin4 and =nit of 6nal2sis) $a4e &,>)&,-
The study was broken up into two parts so that the researchers could contest the
conventional wisdom theory% they felt it might have disregarded the probability that with
differentiated market segments that those consumers might have separate motivations for
when they make purchasing decisions. &sing the '($) scanner panel of *.C. +ielsen
were able to combine the two studies after some time of them running independently.
&sing specified product categories for the studies study , had all five and study - only
used two of the products for its study.
S2nopsis and Conclusions) $a4e &,.)*!&
This study that the researchers conducted was to explore how to identify the ideal cutoff
level by being a fit according to the model. The first hypothesis is suggesting that the
current figures are not ideal for loyal and non-loyal customers to segmented by. The
second hypothesis is suggesting that there should be a universal cutoff level when you are
segmenting for the loyalist. The finding for study one is in line with the first hypothesis
because with those such high numbers for the cutoff it leaves a lot room for tension for
the price sensitivity side of things, biases will mostly likely form during estimates based
off the marketing covariates. .tudy two examines the relationship between price
sensitivity and the loyalist. This study will reveal the behaviors of the loyalist exposing
their motivations and behaviors once the promotional incentives are given out. The
second study also supports the hypothesis by revealing all of the purchase groups and
also showing who is most and least sensitive. #verall, these studies together reveal how
loyalist is giving off some type of response in regards to changes in price. +on-loyalist
actively responds to deals or change brands because of pricing sensitivity or of they /ust
want to try something new.
Contri0ution of the 6rticle to the Bod2 of Literature) $a4e *!&
This article has addressed a couple very important disputes and cleared up and clarified
up the misconceptions that people might have had before reading this article. The
findings of the studies will provide a lot of useful for managers to help them segment
their target markets in more control manner to better represent their companies standards
and product positioning efforts. 0ith clarity of the HCL and "#" managers can tailor
their products to the needs of their existing loyal and non-loyal customers and their able
to attract new customers.
Limitations of the Stud2) $a4e *!4
This study has a few limitations% the framework for instance pro/ected in study one
emphasis on the identification of cutoffs levels without considering others reasons that
may influence the cutoff levels when loyal customers are making purchasing decisions or
even the non loyal or price sensitive customers might have to consider certain factors
when they are out shopping. *lso the study models are only concerned with the brands
that the consumers1 are purchasing, instead of considering 2uantity or if it is bad timing
for the customer to purchase at that time.
/irections for 5uture :esearch) $a4e *!4
3uture research is suggested so that researchers are able to extend and elaborate on future
findings. $f other studies were to be conducted then all purchase decisions could be
examined in respect of the consumers1 behavior. #ther studies could be held so that
researchers and organi4ations could have a better understanding how the results of
advertising perished on the consumers1 three purchase decisions and how they are
different from the different types of consumers1.
@rade out of !
$ can honestly say this article was very interesting and it is not that hard to understand it
is very clear. However, there were some supper obvious grammatical errors, but that did
not stop you from getting the knowledge that it was intended for so $ would honestly give
everyone an 5 out of ,6. This article has been interesting it reveals the motivations of
consumers on a mathematical statistical standpoint but without being confusing.
6rticle Summar2 1ord Count: ,!*