Consumer Response to Marketing Communications

Pang Shell Lee

Bachelor of Commerce Curtin University of Technology (WA), Perth 2000

Submitted to the Graduate School of Business Faculty of Business and Accountancy University of Malaya, In partial fulfilment of the requirements for the Degree of Master of Business Administration July 2009

TABLE OF CONTENT ABSTRACT ACKNOWLEDGEMENT LIST OF TABLES LIST OF FIGURES 1

Page I II III IV

INTRODUCTION .............................................................................................5 1.1 Research Background ............................................................................5 1.2 Objectives of the Study..........................................................................8 1.3 The scope of the Study.........................................................................10 1.4 Significance of Study...........................................................................10 1.5 Limitations of the Study.......................................................................11 1.6 Organization of the Study ....................................................................11 LITERATURE REVIEW ................................................................................13 2.1 Consumer Response.............................................................................13 2.1.1 Brand Switching...................................................................................14 2.1.2 Purchase Acceleration..........................................................................16 2.1.3 Product Trial ........................................................................................17 2.2 Brand Attitude......................................................................................20 2.3 E-Communications ..............................................................................25 2.3.1 Short Messaging Service (SMS)..........................................................25 2.3.2 Internet forum ......................................................................................28 2.4 Word-of-Mouth (WOM)......................................................................30 2.5 Sales Promotion ...................................................................................33 2.5.1 Price Discount......................................................................................34 2.5.2 Buy-One-Free-One ..............................................................................36 2.5.3 Free Gift ...............................................................................................36 RESEACH METHODOLOGY .......................................................................38 3.1 Framework of the Study.......................................................................38 3.2 Development of Hypotheses ................................................................39 3.3 Research Method and Research Instrument.........................................48 3.4 Data Collection ....................................................................................54 3.5 Sampling Design..................................................................................55 3.6 Data Editing, Coding and Categorizing ...............................................56 3.7 Data Analysis Procedure......................................................................56 RESEACH RESULTS .....................................................................................57 4.1 Demographic Profile............................................................................57 4.2 Overview Finding ................................................................................60 4.3 Major Source of Information for Product Categories ..........................67 4.4 The Direct Effect of the Marketing Communications on Consumer Response ..............................................................................................70 4.5 Consumer Response to Marketing Communications: A Comparison of Age and Gender ...................................................................................71 4.6 Reliability Test.....................................................................................73

4.7 5

Hypotheses Testing..............................................................................75

CONCLUSION AND RECOMMENDATION...............................................81 5.1 Discussion ............................................................................................81 5.1.1 SMS Advertisement and Brand Attitude to Consumer Response (Brand Switching, Purchase Acceleration and Product Trial) .........................81 5.1.2 Internet forum and Brand Attitude to Consumer Response (Brand Switching, Purchase Acceleration and Product Trial) .........................83 5.1.3 WOM and Brand Attitude to Consumer Response (Brand Switching, Purchase Acceleration and Product Trial) ...........................................84 5.1.4 Price Discount and Brand Attitude to Consumer Response (Brand Switching, Purchase Acceleration and Product Trial) .........................84 5.1.5 Buy-One-Free-One and Brand Attitude to Consumer Response (Brand Switching, Purchase Acceleration and Product Trial) .........................85 5.1.6 Free Gift and Brand Attitude to Consumer Response (Brand Switching, Purchase Acceleration and Product Trial) ...........................................86 5.2 Managerial Implications ......................................................................87 5.3 Recommendation for Future Research.................................................89

REFERENCE APPENDIX 1 APPENDIX 2

CHAPTER 1

INTRODUCTION

Consumers are appealed to a massive type of advertisements, which goes beyond their information-processing abilities. As a result, consumers filter out access visual and aural marketing stimuli (Rumbo, 2002), which contributes to the uncertainty of marketers of obtaining the consumers response. However, research has indicated that creativity can attract the consumers attention and response. This chapter is divided into several sections. First is the background in section 1.1, this study then highlights the statement of problems, followed by the objectives of the study in section 1.2. Next, the scope of the study is presented in section 1.3 followed by limitation of the study in section 1.4. Lastly, the organization of the study is briefly explained in section 1.5.

1.1

Research Background

Marketers in the new era face an extensive and diverse choice of media through which to send marketing communications to customers. These include most recently and radically the mobile phone communications, such as text-messaging (SMS), and as well as Internet communications, such as Internet forum, blog, chat room and online-messaging. Mobile phones and Internet have become a vital communication channel in everyday part of the workplace and home lives of millions of people around the world. On the increase is another form of less explicit face-to-face

personal selling known as buzz marketing word-of-mouth (WOM). Brands that have invested in creating word-of-mouth advocacy include Converse, Nike, Boeing, Google, Napster and Microsoft, and the automobile makers Cadillac, Mercedes, BMW, and Audi (Kleinman, 2006). According to Sweeney et al. (2008), WOM is becoming increasingly recognized as an important form of promotion, particularly within professional services environments, where credence qualities play a critical role in consumers choices. Sales promotion as a key component of marketing mix has been broadly used as a major incentive tool to draw consumers to stores and increase short-run sales volumes. According to Liao et al. (2006), sales promotion includes all other forms of marketing communication activities apart from the ones associated with advertising, personal selling, and public relations. Consumer promotion and retail promotion are types of sales promotion that aim at final consumers.

Consumer promotions are short-term incentives targeted directly at consumers and include coupons, rebates, free offers, patronage rewards, and other incentives (Priya et al., 2004). In retail promotions, retailers also provide direct incentives to shoppers such as price cuts, displays, feature advertising, free gifts, store coupons, contest and premiums (Liao et al., 2006). Promotions are temporary offers to consumers, which are designed to achieve a specific sales objective. They represent an important fraction of marketing budgets of both manufacturers and retailer. Many studies have shown that promotions have a significant impact on consumers purchase decisions, increasing the promoted brand sales during the period of promotions (promotional bump); they may also induce a sales change after the promotion has finished due to stockpiling or brand switching (Marzia, 2005).

A constructive brand attitude possesses cognitiveaffectiveconative components and is prominent in the information processing and decision-making process (Lutz, 1975). Many studies identify the construct of attitude toward a brand as one of the most important determinants of consumers behavioural intentions (Fishbein and Ajzen, 1975). Some recent research has begun to address the area of brand and their relationship with consumers (Chauduri and Holbrook, 2001). Does consumption respond to promotion? Many studies have focused on the effects of promotion on brand switching, purchase quantity, and stockpiling and have documented that promotion makes consumers switch brands and purchase earlier or more (Guadagni and Little, 1983; Neslin et al., 1985; Mela et al., 1998 (a,b); Gupta, 1988;

Chintagunta, 1993; Krishna, 1994b; Chiang, 1995; Bucklin et al., 1998; Dekimpe et al., 1999; Paap and Franses, 2000; Nijs et al., 2001; Bell et al., 2002; Pauwels et al., 2002; Seetharaman, 2003; van Heerde et al., 2004 and Pauwels and Srinivasan, 2004). The brand switching from an economic perspective (price) promotions induce a brand switch by increasing the utility of a brand that otherwise would not have been purchased. Purchase acceleration means that a customer purchases a product at an earlier time (Shoemaker, 1979) as the result of a sales promotion. Product trial can be induced by promotions such as in-store demonstrations; because they lower the customers perceived risk (Blattberg et al., 1981). It is with the hope that each of the above research is able to shed some lights into different aspects of the effective marketing communication channels so that marketers are able to increase their organization profit and establish a dynamic and effective business strategy.

Previous researches have mainly investigated the effectiveness of traditional marketing communication channels of personal sales visits, voice-only telephone,

mail, mass media or print advertising in eliciting consumers response. There is limited study focus on the new wireless and electronic marketing communications like Electronics Word-of-Mouth (e-WOM), Internet forum, blog, or mobile advertising to draw out consumers attention. Hence, the types of marketing communications examined in this research are: E-communication (SMS advertising and Internet forum), WOM (Word-of-mouth) and sales promotions (price discount, buy-one-free-one and free gift). Besides that, this study also examines the relationship between brand attitude and consumer response (brand switching, purchase acceleration and product trial) after receiving marketing communications from the different media.

1.2

Objectives of the Study

Companies are becoming increasingly creative in the types of promotions that they are offering consumers. The range, variety, and depth of promotions flooding the marketplace today suggest that processing these is far from an easy task for consumers. Apart from the amount of money that companies are spending on these activities, the volume of sales promotions begs the question: How do consumers blitzed by promotional stimuli multiple times a day, 365 days a year, react to these promotional stimuli? The consumer is being bombarded by a range of promotions in almost every product category and in every media form- TV, radio, mail, point of purchase material, the internet, and e-mail (Priya et al., 2004). Despite the emerging challenge from new media, traditional channels of personal sales visits, voice-only telephone, mail, and mass media remain strongly in use (Barwise and Farley, 2005). However, the Internet is rapidly reaching up to some media. For example, in the U.S. and U.K., the expenditure for online advertising, now exceeds that of radio, consumer 8

magazines, and outdoor (Internet Advertising Bureau, 2006). As a result, the turmoil of transform is an appropriate description of the overall scene for marketing communication channels today. This study is focused on consumer response to a mixture of marketing communications channel choices for information. Which is the major source of information that customers prefer (specifically in the situation where WOM and sales promotion that will become the dominant marketing

communications)? Which is information source that direct effect in eliciting a response? What about SMS and Internet forum form of communications? The objectives are:

1. To examine the major sources of information that consumers rely on when making purchases decision for various product categories. 2. To test the direct effect of marketing communications: E-Communications, WOM and sales promotions on consumer response measured by brand switching, purchase acceleration and product trial? 3. To examine the relationship between the marketing communications and brand attitude. 4. To examine the relationship between brand attitude and consumers response (brand switching, purchase acceleration and product trial). 5. To conduct an age, gender, and educational level comparison with consumer response to marketing communications. 6. To analyze marketing implications and propose recommendations for marketers.

1.3

The scope of the Study

This study is to investigate the marketing communications that direct affect of brand attitude and inducing their responses. The three consumers responses segments identified are brand switching, purchase acceleration and product trial. The six types of marketing communications identified and selected for the framework are ECommunications (SMS and Internet forum), WOM, and sales promotions (price discount, buy-one-free-one and free gift). This study employs statistical method and statistical tools will be used to analyze the research results. Primary data will be obtained for this research which will be conducted on the respondents in Klang Valley. Self administered questionnaires and questionnaires via email will be distributed to respondents who visit hypermarkets, IT Malls and restaurants in within Klang Valley.

1.4

Significance of Study

Despite fairly extensive work on behavioural response to sales promotion tools that has been conducted in this field, the relationship between marketing communications, brand attitude and consumer response have not been extensively studied particularly in Malaysia in particular consumer response to marketing communications. This study examines communication electronic mode, i.e., SMS, and Internet Forum. In addition, it investigates the type of marketing communications that consumer rely on or purchase decision for a variety of product categories such as computer/notebook, digital camera, MP3 player, musical performance, movie, restaurants, groceries, household and personal care products. This study intends to give an indepth

information on the importance of marketing communications to consumer response and brand attitude that influence its value.

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1.5

Limitations of the Study

There are limitations related with this study. First, cross-sectional data is used rather than longitudinal data which limits tracing the changes in response to marketing communication over time. Nevertheless, moderate sample size were collected for the analysis, a total proportion of the respondents was from the convenient sampling of the college students, colleagues, hypermarkets and IT malls shoppers and as well as customers who are having their lunch or dinner in the restaurants in within Klang Valley. Perhaps if the sample size was increase and expands to other geographic areas in within Malaysia, it would b able to reflect a wider range and validated the finding in this study. We only examined SMS, Internet forum, WOM, sales promotion (price discount, buy-one-free-one and free gift), future research may choose to examine other types of marketing communications mode like e-auction, on-line shopping (i.e. eBay), e-mail advertisement, mobile banking or other types of sales promotions like contests, in-store display/ demonstration, coupon and refund on brand switching, purchase acceleration, stockpiling and product trial.

1.6

Organization of the Study

The organization of this study is divided into five chapters. The introductory chapter highlights the background of the study, objective of the study, scope of the study, limitation of the study and organization of the thesis. Chapter Two contain literature review of previous researchs examination on the consumers responses toward the different types of marketing communications: - i.e. E-Communications (SMS and Internet forum); WOM and sales promotions (price discount, buy-one-free-one and free gift). Besides that, chapter two also examines how the brand attitude will lead consumers response (brand switching, purchase acceleration and product trial) after 11

receiving marketing communications from the different media. The general framework derived describes the way of consumers response to marketing communications. In Chapter Three, hypotheses underlying the proposed model and methodology used to examine the hypotheses are discussed in detail. A justified research design is provided. The discussion of methodology focuses on the scaling and measurement techniques, questionnaires design and outline, data collection, sampling design, data editing, coding and analyzing procedures. Chapter Four describes the organizational of constructs focusing on structure measurement with validity and reliability assessment. Besides that, it explains the analysis processes and research result are discussed. Findings on the research questions are provided based on the results of the hypothesis analysis. Finally, in Chapter Five, the summary of the study, managerial implications of the results and recommendation for future research on the use and direct affect of marketing communications to consumer response.

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CHAPTER 2

LITERATURE REVIEW

This chapter reviews the importance of SMS, Internet forum, WOM, price discount, buy-one-free-one and free gift correlates to brand attitude and direct affect consumer responses (of brand switching, purchase acceleration and product trial). An overview of consumer responses on factors influencing the brand attitude is highlighted and the literature review of each factor is emphasized upon.

2.1

Consumer Response

Why do people buy; where (which store); which brand and what quantity they buy? How do people go about making decisions and choices in the market place and how can advertising promotions influence these decisions and choices? Promotional deals provide one means of increasing sales of product. Companies face the problem of allocating resources to promotional deals versus other activities aimed at increasing sales. In order to make optimal allocations, information is needed concerning the response of consumers to alternative promotional activities (Frederick, 1959). The different effect of promotional activities can have on consumer response (brand switching, store switching, purchase acceleration, repeat purchase and category expansion) are known as the possible promotional reaction mechanisms (Blattberg and Neslin, 1990). Three consumer responses are identified in the marketing promotion literature. These are brand switching, purchases acceleration and product

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trial. Each response is discussed with more detail in the following subsections, along with relevant theory and empirical evidence.

2.1.1

Brand Switching

The purpose of this study is looking at brand switching from literature on promotions and brand switching. Brand switching means that a consumer is induced to purchase a brand other than the one that would have been purchased. A simple theoretical explanation of why promotions induce brand switching is based on the theory of reasoned action developed by Fishbein (1975) and Ajzen (1980). This theory places behaviour, behavioural intentions, attitude and subjective norm in one framework, where behaviour is a function of behavioural intention, which in turn is a function of attitude and subjective norm. The attitude component consists of a weighted linear summation of beliefs about a product. Attitude is also considered as a predisposition to buy. A sales promotion (price cut, display, premium, etc.) could lead to a positive change in predisposition to buy the product, resulting for example in a brand switch. This theory provides an explanation for heterogeneity among households with respect to the concept of deal proneness. Some consumers attach great importance to price cuts, others to coupons. A third group might relate sales promotions to inferior products. This leads to different attitudes, different predispositions to buy, and ultimately different buying behaviour due to the presence or absence of sales promotions.

The immediate sales increase may be attributable to within-category brand switching (Gupta, 1988), as well as to a category-expansion effect of price promotions (Chintagunta, 1993; Van Heerde, 1999). The impact of a price promotion need not be 14

limited to its immediate effect. Purchases acceleration, for example, may cause a post-promotion dip, i.e., additional sales come at the expense of future purchases (Blattberg and Neslin, 1990). As suggested by Raju (1992), two components of promotional intensity in a product category are distinguished: (i) promotional frequency reflects the extent to which consumers are exposed to price promotions (e.g., the percentage of weeks with price promotion) and (ii) promotional depth specifies the average size of the promotions to which consumers exposed (e.g., cents off).

An essential finding, sale promotions influence consumer choice, they cause consumers to switch from Brand A to Brand B. Gupta (1988), Chintagunta (1993), Chiang (1995), Bucklin et al. (1998), and Bell et al. (1999) have examined the magnitude of the brand switching effect, at least relative to dynamic effects such as stockpiling, and have found that brand switching accounts for the majority of the current period promotion effect. Gupta (1988) concludes that more than 84% of the sales increase due to promotions is accounted for by brand switching, that is due to purchase acceleration elasticity is 14%, and that is due to quantity elasticity is 2%. Gupta worked with grocery coffee data. Chintagunta (1993) worked with yogurt data and the results from his study implied a percentage of 40% due to brand switching. Bucklin et al. (1998) also used yogurt data and they concluded that 58% of the sales increase was due to brand switching at the aggregate level. This suggests that sales promotions have a bigger impact on the brand choice decision for coffee than for yogurt, perhaps due to package size or perishability. Bell et al. (1999) offer an empirical generalization on promotional response. They concluded that brand switching varies systematically across product categories. Bucklin et al. (1998) also

15

investigate whether there exists heterogeneity among household with regard to the sensitivity in brand switch behaviour. The results show that the intersegment variation was substantial (brand switch percentages ranging from 38% to 64%). The research discussed above shows that brand switching varies across households and across product categories.

2.1.2

Purchase Acceleration

Purchase acceleration implies that a consumers purchase timing or purchase quantity is influenced by promotion activities. It has also been referred to as consumer stockpiling or mortgaged sales. Depending on the situations, managers might view purchase acceleration either as a favourable or an undesirable event. For example, management might try to induce purchase acceleration for its own brand in order to pre-empt the anticipated marketing efforts for a new competitive product (Webster, 1971). On the opposite, purchase acceleration may show that some consumers are simply loading up on the brand they would have bought anyway; thus the promotional expenditure was unnecessary. As Blair (1982, p.2) suggests that most coupons do not increase long-term sales. In some cases, they merely prompt loyal and occasional buyers to purchase earlier, but not more, resulting in short-term sales gain only. The economic theory as developed by Blattberg et al. (1981) provides one explanation for purchase acceleration and for differences between households. The consumer wants to minimize the costs of satisfying his or her households demand for the product. By buying on deal at a lower price, the consumer can decrease household purchase costs but may incur a cost of carrying more inventory of the product than is needed to satisfy immediate consumption. Some households, perhaps those with minimal storage space, have high holding costs and will not respond to price deals. 16

Other households have relatively low inventory holding costs and will potentially respond to deals.

A number of researchers (e.g., Wilson et al., 1979; Shoemaker, 1979; Neslin et al., 1985; Grover and Rao, 1988; Gupta, 1988; Schneider and Currim, 1991) have provided empirical evidence that promotions are associated with increased purchase quantity and adjusted inter-purchase times. Based on research on two product categories (bathroom tissue and instant coffee), Neslin et al. (1985) conclude that increased purchase quantity is more likely to be exhibited than shortened interpurchase times, but the specific effects were found to depend on the type of promotion. Gupta (1988) estimates that 14 percent of the increase in sales due to promotion is accounted for by accelerated purchase timing, and that 2 percent is accounted for by quantity. Bucklin et al. (1998) estimated that 20 percent of the increase in sales due to promotion is accounted for by accelerated purchase timing, and that 22 percent is accounted for by quantity. The empirical generalization offered by Bell et al. (1999) show that purchase acceleration (timing and/or quantity) differs across households and product categories. Gilbert and Jackaria (2002) examine four promotional tools (i.e. coupon, discount, sample and buy-one-get-one-free and result show that it has impact on reported buying behaviour (i.e. brand switching, brand loyalty, purchase acceleration and product trial).

2.1.3

Product Trial

Product trial involves actually trying or using a product (Kardes, 1999). As stated by Peter and Olson (1996), trial ability refers to the degree to which a product can be tried on a limited basis or divided into small quantities for an inexpensive trial. 17

According to Schindler (1988), a price promotion that is designed to evoke attributions of responsibility could be expected to appeal to consumers more than one that does not evoke suck attributions, and thus have a greater ability to create product trial among consumers. Product trial can be induced by promotions such as in-store demonstrations; they lower the customers perceived risk (Blattberg et al., 1981). Wayne (2002) finds a link between sales promotion and product trial. In order to justify how consumers will respond to new products or to promote sales of existing products marketers use several sales strategies including, free samples, coupons, discount, rebate, money-back guarantee and the (free) product trial. De Groot et al. (2008), with a product trial consumer are allowed to experience a product for a fixed period, the trial period. After the trial period they decide whether to buy the product or not. Product information thus becomes available before the purchase decision. Once a product has been bought the purchase normally cannot be undone. Product trail is the high reliability of direct experience. Information is accepted better when it is obtained from firsthand experience such as trial than when obtained by other indirect sources such as advertising (Smith and Swinyard, 1983; Wright and Lynch, 1995; Fazio and Zanna, 1981).

With reference to the above literature reviews, therefore, this study focuses on the studies of the more recent and frequently used influencing factor. The influencing factors are SMS advertising, Internet forum, WOM and sales promotion.

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Table 2.1: Summary on the recent and frequently used factors that are perceived to influence consumers response Year 2006 Author Su-Fang Lee, Yuan-Cheng Tsai and Wen-Jang (Kenny) Jih Barbara Bickart and Robery M. Schindler Research Area Mobile Advertising Consumers reaction to mobile advertising Behaviour, intention, attitude and belief Internet forum Frequency participate in Internet forum activities related to each topic Number of hours per week spend surfing the web Purchase likelihood Expected spending in category Knowledge about product category Thought about product category Interest in product WOM Behaviour Manipulation of satisfaction Manipulation of incentive program Manipulation of tie strength The likelihood to generate WOM The favorability or valence of the WOM generated The likelihood to make a purchase recommendation Deal proneness Sales promotion and Consumer response Price discount Coupon In-store demonstration Buy-one-get-one-free Sweepstakes/ games Brand switching Purchase acceleration Stockpiling Spend more Product trial Sales promotion and Consumer Behaviour Coupon Price Discount Free Sample Bonus pack In-store display Product trial (consumer buying behaviour) The role of awareness of promotional tool 19

2001

2002

Jochen Wirtz and Patricia Chew

2005

Yi-Zhing Shi, Ka-Man Cheung and Gerard Prendergast

2006

Nelson Oly Ndubisi and Chew Tung Moi

2.2

Brand Attitude

American Marketing Association (AMA) defines a brand as a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of seller and to differentiate them from those competition (Keller, 2003, p.3). Brand attitudes are defined in terms of consumers overall evaluations of a brand (William, 1990). Brand attitudes are important because they often form the basis for actions and behaviour that consumers take with the brand i.e. brand choice (Keller, 2003). Gardner (1985) claims that by given the importance of advertising in the marketing mix for many consumer goods, it is not surprising that many studies have focused on understanding how advertisements affect consumers attitudes toward advertised brands. Findings from past studies show that consumers brand-related beliefs affect brand attitude formation (Mitchell and Olson, 1981) and change (Lutz, 1975). The effects of brand related beliefs and attitude toward the advertisement on brand attitude may be mediated by the consumers processing set or task upon exposure to the advertisement (Gardner,1985). Processing sets may be classified broadly as directed toward evaluation sets or directed toward some other goal, such as enjoyment or evaluation of the ad for its own sake i.e., non-brand sets (Gardner, Mitchell and Russo, 1985). Marketing research reveals that attitudes toward advertising are strongly associated with the success of an advertising campaign (Gardner, 1985; Andrew, 1989; MacKenzie and Lutz, 1989). Research relates to mobile advertising has shown that this marketing instrument is very effective as a branding vehicle and in stimulating a response, thus increasing brand attitude and purchase intentions (Rettie et al., 2005). Brand strategy of a firm is important because of its critical impact on the firms financial and marketing performance. The marketers are now faced with an increasing 20

number of tactical options that must be efficiently and effectively applied to an increasing number of product variations for the brand. The concept of brand equity was identifies as having the potential to provide guidance of marketers to help them make those decision. Price premiums and market share have been closely associated with the increasingly salient concept of brand equity (Aaker, 1996; Bello and Holbrook 1995; Holbrook 1992; Park and Srinivasan 1994; Winter, 1991). These outcomes, which in turn drive brand profitability, depend on various aspects of brand loyalty. According to Chaudhuri (1995), the nature of brand loyalty affects the relationship of attitudes and habitual behaviour toward high or low priced brands. Research has traditionally posited that sales promotions erode brand equity (Vidal and Ballester, 2005). Lafferty et al. (2004) and Simonin and Ruth (1998) identify several factors that influence consumers attitudes toward the brand alliances, including pre-existing attitudes toward the individual brands, and how logical the alliances is in terms of brand fit and product fit. Attitude is a key variable of consumer behaviour which is highly relevant both from the marketing and the information systems perspectives. Chatterjee et al., (2003) and Davis, (1989) claimed that in IS research, the technology acceptance model (TAM) clearly indicates the strong impact of attitudes on intention to use and therefore to accept a technology

Consumer attitude toward mobile advertising is influenced by a number of antecedents (Okazaki, 2004). As Lee et al. (2006) point out, there is a strong relationship between the intention to receive mobile-advertising messages and the attitude toward them. Leppaniemi and Karjaluota (2005) investigate which factors impact consumers willingness to accept mobile advertising messages based on the design of the message and the related technology. The identified factors are the role

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of the mobile medium in the marketing mix, the development of technology, individualization, i.e., the character as a one-to-one marketing medium, and a regulatory framework. Barnes and Scornavacca (2004) investigate consumers acceptance of mobile advertising and identified user permission, wireless service provider control, and brand trust as key impacting factors.

Besides that, the increase in the globalisation of the worlds economies, coupled with the rise of the internet, new opportunities and challenges have emerged for marketing brands and products (Bellman et al., 2006). Cyberspace has become a new kind of social terrain, crowded with virtual communities (Rheingold, 2000). A corporate web site can allow the birth of a virtual community around a brand using different options (Dholakia et al., 2004), though the most common utilities are real time chat and asynchronous discussions that play out over days, weeks, and even months in discussion forums, bulletin boards or product review pages (Mathwick, 2006). Through the creation of a virtual space, the site will become a meeting point where members develop their relationships but always inside an environment where the brand is present (Sicilia and Palaz n, 2008). Sicilia and Palaz n (2008) define a virtual brand community as a group of individuals with common interests in a brand who communicate each other electronically in a platform provided by the company which supports the brand. Community members may establish a brand related discussion but they may also share opinions about any other topic of interest. Through the creation of a virtual space, the site will become a meeting point where members develop their relationships but always inside an environment where the brand is present (Sicilia and Palaz n, 2008). As an example of this type of virtual community, Cova and Pace (2006) show how consumers who belong to My Nutella Community

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share such enthusiasm. This is not the case of Coca-Cola. Consumers do not talk about their experiences with the product; their members are instead mainly friends sharing opinions and leisure activities in a virtual space supported by Coca-Cola. As McAlexander et al. (2002) state, the existence and meaningfulness of the community is in the customer experience rather than in the brand around which that experience revolves. Sicilia and Palaz n (2008) recover that Coca-Cola provides this experience through online games, sweepstakes and prizes. Games not only entertain consumers, but also reinforce consumers impressions about the products by appealing to the emotional and sensorial benefits experienced by participants. The values inherent in play create memorable experiences that strengthen relationship and influence consumer attitudes towards the site, as well as towards the brand (Mathwick and Rigdon, 2004).

Word of mouth (WOM) is oral person-to-person communication between an information receiver and a sender, who exchange the experiences of a brand, a product or a service based on a non-commercial purpose (Arndt, 1967). This means of communication serves as a crucial influencing role on consumer behaviours, such as buying, switching and diffusing (e.g. Arndt, 1967; Day, 1971; Sheth, 1971; Reingen, 1987; Brown & Peter, 1987; Murray, 1991). Roger (1976); Bearden and Etzel (1982) state that others opinions, such as reference groups and word-of-mouth of friends, have been shown to influence consumers evaluations. Research generally supports the claim that WOM is more influential on behaviour than other marketercontrolled sources. WOM has been shown to influence a variety of conditions: awareness, expectations, perceptions, attitudes, behavioural intentions and behaviour. Several studies have shown that WOM communications often exert a strong influence

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on judgments of products. For example, consumers frequently rely on WOM when selecting an automotive diagnostic centre, when choosing a physician or when considering the purchase of a new product or service (Herr et al., 1991).

Promotional efforts are recognized as a potent tool for managing brands, with in-store displays, feature advertising and temporary price reductions key components of a traditional promotional mix (Blattberg and Neslin, 1990). Promotions such as sales promotions have shown influence on consumers attitude to a brand which ultimately effect bottom-line prices. For example, pricing promotions could involve coupons or simply a reduction of price within the product category (Singh et al., 2005; Papatla and Krishnamurthi, 1996; Wagner and Taudes, 1986; Orth, 2005). Personality factors have shown an impact based on what brands consumers buy. Brand credibility has shown significance in determining brand choice as well (Erdem and Swait, 2004; Fry, 1971). Other areas such as purchase time, purchase order, and product name have been researched but have not been deemed to be main factors in determining a brand choice decision (Charlton and Ehrenberg, 1973). Previous research has shown that promotions generate high cumulative effects on brand choice and purchase quantity (Ailawadi and Neslin, 1998; Jedidi et al., 1999; Mela et al., 1998) and on category incidence (Pauwels et al., 2002, Van Heerde et al., 2003). These studies allow marketers to understand consumer switching behaviours and allow for market share penetration, which give marketers a better understanding of what elements affect a particular brand or product category (Chib et al., 2004; Wagner and Taudes, 1986).

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2.3

E-Communications

According to Kock, (2008), the e in e-communication stands for electronic. The term e-communication refers to, essentially, any form of computer-mediated communication and to more traditional forms of electronic communication like telephone or mobile. The term e-communication includes computer-mediated communication over the Internet as well as over other computer network infrastructures. The three example of e-communications medium are telephone, live text-based chat, and Web site (Kock, 2008).

2.3.1

Short Messaging Service (SMS)

Mobile marketing or wireless marketing is a subset of e-marketing and is defined by Dickinger et al. (2005, p.2) as using a wireless medium to provide consumers with time-and location-sensitive, personalized information that promote goods, services and ideas, thereby benefiting all stakeholders. Mobile retailers can send SMS advertisements to their potential customers. Many brands and media companies include text message numbers on their advertisements to enable interested consumers to obtain more information. This mode of advertising takes advantage of valuable channels of wireless communication to enhance customer relationships, and to carry put direct marketing and promotional activities (Frolick et al., 2004). Barwise and Strong (2002) suggest that mobile advertising works best for marketing simple and inexpensive products and services. Since mobile phones are very personal devices, mobile advertising can often be regarded as intrusive, although relevance and added value (e.g., discounts, special offers or free gift) can increase consumer acceptance (Patel, 2001).

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Barwise and Strong (2002) identify six ways of using SMS for advertising: brand building, special offers, timely media teasers competitions, polls/voting, products, services and information requests. Text message advertisements have been found to boost consumers inclination to purchase by 36 per cent, which partly explains its growing popularity among marketers (Enpocket, 2005c). According to Enpocket (2005a), text message campaigns also deliver a 15 per cent response rate, which they estimate is twice as much as direct mail or e-mail campaigns; apparently, text messages are 50 per cent more successful at building brand awareness than TV and 130 per cent more than radio (Enpocket, 2005c). Barnes and Scornavacca (2003) establish that mobile-marketing acceptance depends on users permission, WSP control, and brand trust. For a matter of brand trust there is a strong preference for the network operators to become the definitive media owners and permission holders (Enpocket, 2005b).

Andersson and Nilsson (2000), for example, evaluate location-sensitive SMS campaign effectiveness based on traditional communication effect measures, and show that SMS campaigns were effective and did have a positive impact especially on brand awareness and purchase intention. Individuals are interested in deriving some monetary benefit from direct marketing programs (Milne and Gordon, 1993). In a Nokia-sponsored survey, conducted by HPI Research Group, almost nine out of ten participants (86%) agreed that there should be a trade-off for accepting advertisements on their mobile devices (Pastore, 2002). Prior research proposes that price discounts are particularly effective in inducing effects, such as purchase acceleration and product trial (Shi et al., 2005). Mobile telephones allow

maintenance and development of virtual communities of family, friends, and other

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groups around common interests (Carroll et al., 2002). Mobile phones have become apparently ubiquitous; they are seen everywhere- from huge cities to remote villages. Short Message Service (SMS) has changed the mode people communicate. The latest mobile data services report which was conducted by Mobile Data Association (MDA) showed that the SMS usage is emerging. According to the statistic (Telecom Asia, 2006), UK mobile users had sent out six billion text messages in December 2007 which is almost five thousands SMS per second. According to the GSM Association, users send more than 10 billion SMS messages each month (Cohn, 2001). Mobile phone increasingly is becoming an essential medium of business and personal communications. Lee et al. (2006) claim the mobile phone users are being targeted by companies that seek to incorporate Internet-enable operation into their advertising approaches.

Today, the ubiquity of SMS-based mobile communications creates new opportunities for marketers to advertise, build, and develop customer relationships, and receive direct response from customers (Sultan and Andrew, 2005). Recently, a survey carried by IDC shows that more 90% of mobile users prefer SMS as their main communication tool. Malaysia has the second highest mobile penetration in South East Asia after Singapore (ChinaCCM, 2006). The total number of cellular phone subscribers in Malaysia is 21.52 million in 2006. This was up from only two million subscribers in 1998 (MCMC, 2006). The countrys mobile users have also been enthusiastic in their adoption of SMS, with the regulator reporting that Malaysians sent more than nine billion SMS during 2005 (ChinaCCM, 2006). This survey included 4,056 urban mobile users in Australia, Hong Kong, Malaysia, China, Singapore, South Korea and Taiwan (Nor Badrul et al, 2008). The report has

27

concluded that with the statistic of 65% of the mobile user sending text messages everyday, SMS will continue playing an important role as the most popular mobile data application (Mobile Data Association, 2008).

2.3.2

Internet forum

Discussion forums or message boards enable consumers to share their experiences, opinions, interest and knowledge with others on specific topics. Messages on discussion forums are believed to be very powerful in influencing consumer attitudes (Chiou & Cheng, 2003). Wang et al. (2000) propose that the web environment facilitates long-term relationship- building mechanisms because it provides consumers with an easy medium to communicate and interact with consumers and the web owner. As the number of blogs increases dramatically, these online forums have become important media people use to share feeling and information (Huang et al, 2008). Electronically based forums, bulletin boards, newsgroups and chat rooms all provide online users to share their experiences, opinions and knowledge with others on specific topic or interest. The popularity of these electronic exchanges is reflected in the vast number of exchange venues available as well as the number of postings on popular discussion forums (Barbara & Robert, 2001). Based on Forum One Report, 1997, the co-founder of ParentsPlace.com (www.parentsplace.com) claims that the average visit duration to the community spaces on this website (e.g., forums and chats) is approximately four to six times longer than visits to non-community areas on the same site. The Forum One Report (1997) differentiates consumer communities that focus on a specific topic (e.g., backpacking or gardening) from idea communities, where participants discuss broader issues (e.g., current events or parenting).

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The electronic Word-of-mouth (eWOM) phenomenon has been changing peoples behaviour because of the growth of the Internet usage. Dellarocas (2003) claims that, people often make offline decisions on the basis of online information; furthermore, they tend to rely on the opinions of others consumers when making decisions about matters such as which movie to watch or what stocks to invest in. In the online consumer review context, consumers can easily observe and measure the quantity and quality of positive and negative opinions because online consumer reviews are published in a written form (Lee, 2008). In traditional mass media, there is usually only a one-way message flow from sender to receivers (Flaherty, 1985; Williams et al., 1988; Wells et al., 1992, Cook, 1994; Rogers, 1995). In opposite, marketers deliver information to individual consumers with new interactive media and gather feedback from consumers. In the context of interactive advertising, this kind of interactivity can be illustrated as providing comments, feedback, and/or personal information to an advertiser, participating in a series of on-line discussions or forum, completing site or product surveys, writing new-product proposals, requesting on-line problem diagnostics, and so forth (Cho and Leckenby, 1999).

Salvatore and Patricia (2008) claim that most organizations to describe the importance of understanding the real-time customer and concept of the real-time customer is not new. McKenna (1997) introduces this notion with the premise of his work being that IT enables companies to conduct real-time dialogues with their customers. These conversations should then facilitate long-term relationships with current and potential customers. In addition, in an environment where consumers are presented with increasingly abundant product choices and information, it is becoming extremely challenging to anticipate customer reaction to a new product or changes to

29

an existing product. According to the digital marketing service company Doubleclick, Web sites and online advertising were social influencers primary source for researching a potential purchase (Salvatore and Patricia, 2008). Therefore, marketers could use rich on-line advertising to attract influencers (Row, 2006). Salvatore and Patricia (2008) add that companies could focus on finding online social influencers for a desired product category, and solicit these influencers to be part of an electronic focus group to provide feedback and ideas on current and future products; help create early buzz after provided with prototypes of new company products, and help promote and communicate/advertise company products through their personal blogs by writing opinions and reviews, linking to product materials such as articles and videos, and advertising through sponsored links.

2.4

Word-of-Mouth (WOM)

Beginning with Katz and Lazarsfeld (1955) nearly half a century ago, the impact of WOM on consumers actions, preferences and choices has been of great academic interest. Researchers such as Coleman et al. (1966); Arndt (1967); Engel et al. (1969) have corroborated the primacy of WOM as a key driver of firm sales. The importance of exchange opinions, interest, knowledge and beliefs among people about different things happen around our daily live have been widely researched during current year. Nowadays, the marketing tools for boosting publicity have been developed and much more instruments are employed to increase the demand for the companies product or services. An engine that has become more customary is WOM (Rosen, 2004). Silverman (2001) argues that WOM is a phenomenon that has existed since far back in time, but it is not until now that the phenomenon has attracted a lot of attention. He claims that [w]ord of mouth is THOUSANDS of times as powerful as conventional 30

marketing (Silverman, 2001, p.22). The Word of Mouth Marketing Associate (WOMMA) is the official trade association for the WOM industry is USA (WOMMA, 2007). According to WOMMA (2007), Word of Mouth marketing encompasses dozens of marketing techniques that are geared toward encouraging and helping people to talk to each other about products and services. Rosen (2002) defines WOM as buzz is all the word of mouth about a brand. Its the aggregate of all person-toperson communication about a particular product, service, or company at any point of time. WOM has for long been recognized as a powerful force affecting consumer choice, loyalty and switching (Wabgeheim and Bayn, 2004).

A monetary incentive (reward) can be used as a re-inforcer to shape behaviour (Buhler, 1992; Gupta and Shaw, 1998). In another word, incentives can function as an extrinsic motivator, and people may engage in more WOM behaviours when incited, and this motivation may increase as the incentive increases (Wirtz and Chew, 2002). Ferguson (2008) shares an example, Procter & Gamble (P&G), has launched its Tremor service in 2001 to help market products to teens through managed WOM techniques. Tremor has since grown to encompass over 225,000 teen agents, and the experience led P&G to launch Vocalpoint in 2005 as a vehicle to spread the P&G gospel to its other core constituency-moms. Vocalpoint now boasts over 600,000 connector moms who receive coupons and new product samples in the mail and then share their experiences with upwards of 25-30 other women a day (the average mom speaks to just five). According to a May 29, 2006 Business Week article, Vocalpoint promotions have seen unit sales in test locations double (Ferguson, 2008).

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Is a WOM marketing program an effective way to attract customers? This issue is addressed by Biyalogorsky et al. (2001) who investigate the optimality of customer referral programs, comparing them to another method of attracting customers: cutting prices. The literature on influence has strong predictions on how decision makers are affected by their peers. For example, Reingen et al. (1984) show that consumers brand choices within a social group are often congruent. Similarity may be especially important when new attitudes and beliefs are formed such as for a new product (Kardes, 2002) and for certain types of products, such as public luxuries (Bearden and Etzel, 1982). While the effectiveness of WOM may depend on the strength of the tie across which a message is communicated, this is not easily managed by the firm within the context of a WOM marketing campaign. This is an attractive criterion since it is relatively easy for the firm to select customers for inclusion in a WOM campaign based on loyalty. The former is typically characterized by repeat purchase behaviour while the latter includes a degree of dispositional commitment to the brand (Chaudhuri and Holbrook, 2001).

Word of mouth (WOM) is becoming increasingly recognized as an important form of promotion, particularly within professional services environments, where credence qualities play a critical role in consumers' choices (Sweeney et al., 2008). WOM can play a particularly important role for service organizations, as intangibility makes the pre-purchase trial of services impossible (Berry, 1980; Zeithaml, 1981; Zeithaml et al., 1985). WOM has a strong influence on product and service perceptions, leading to changes in judgments, value ratings and the likelihood of purchase (Arndt, 1967; Fitzgerald Bone, 1995; Peterson, 1989). Martilla (1971) finds that WOM was more

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important in the final stages of the purchase process as it reassured consumers and reduced post-purchase uncertainty.

2.5

Sales Promotion

Sales promotion is a short-term strategy to stimulate demand. There is ample evidence both in trade press (Abrams, 1980) and the academic literature (Massy and Frank, 1965; Sunoo and Lin, 1978; Schindler, 1992) that promotions can serve to strongly stimulate consumer sales. Promotion is defined as sales promotion, advertising, personal selling, public relations and direct marketing (Borden, 1984). According to Duncan (2005), promotion is the key to the market exchange process that communicates with present and potential stakeholders, and the general public. Hakansson and Alexandra, (2005) report that promotion appears as an issue of how to create an optimal mix of marketing communication tools, in order to get a product' s message and brand from the producer to the consumer. Promotions pertaining to price offers are important tactics used to influence consumer behaviour in retailing both with regard to retailer and manufacturers brands. Manufacturers of consumer goods spend millions of dollars annually for promotional media, including couponing, rebates, sweepstakes, price discount, free gift and other premium offers. According to Grunert et al., (2006), several empirical studies have shown that price information is important for the consumer decision-making process, and these consumers are very price conscious. Promotions such as price discounts and buy one get one free are effective promotional tools for encouraging consumers to buy more (Shi et al., 2005). Hung (2005) recommends that plans for promotions should be top-down strategy built plans with tactical bottom-up purchase analysis and that they should be monitored frequently. 33

In this sub-section, the study would look into detail the three identified sales promotions segments (price discount, buy-one-free-one and free gift) which are often use by marketers in Malaysia to induce consumer response.

Table 2.5: Description of various sales promotion types Sales Promotions Price discount/ cents-off Description Product is available at less than the normal price during the deal period only Objectives To stimulate consumers to try a new product, encourage immediate sales, build-up inventory at trade level, inventory clearance at trade level, counter competitive moves To encourage prolonged consumption period, trade-up consumers to purchase target quantity packs, more larger quantity from factory To encourage purchase of a product or service, build loyalty, promote products in off-season, encourage customers to try new product

Buy-oneget-one-free

More quantity of the same product is offered at no extra cost A gift/ reward given to customer for purchasing a product. Premiums are usually offered for free (but sometimes at a low cost also). Premium and promoted product may not be interrelated. Premiums may be: (1) package premium (2) banded premium (3) container premium (4) OTC premium (5) free-in-mail premium (6) selfliquidating premium (infrequent in India)

Free gifts with purchase (Premiums)

(Source: Quelch, 1989; Kotler, 2003; Kazmi and Batra, 2004).

2.5.1

Price Discount

Marketers often use sales promotions to enhance or improve consumers' perceptions regarding the value of their products, which will, in turn, increase sales volume (Lattin and Bucklin, 1989; Taylor, 2001). Companies often look forward that 34

consumers will consider their brands when making a purchase decision. Unfortunately, consumers only take into account a limited number of brands, included in their consideration set. Most brands are excluded from consumers' consideration set and are categorized in their hold or reject sets (Erdem and Swait, 2004; Laroche et al., 2005; Mitra, 1995). Therefore, companies are faced with the challenge of attracting consumer attention, and altering brand attitudes and purchase intentions towards their brands in order to move the brands from consumers' hold or reject sets to their consideration set. Price promotions are temporary price reductions offered to the consumer (Blattberg et al., 1995). An extensive body of literature has established the empirical generalization that price promotions result in a substantial initial sales increase at the brand level (Blattberg et al., 1995; Van Heerde, 1999). Price discounts offer economic benefits to consumers, influence consumers'beliefs about the brand, and arouse positive feelings and emotions within consumers, which will increase consumers'brand awareness and purchase intentions (Ailawadi et al., 2001; Heerde et al., 2003; Raghubir et al., 2004). Fraccastoro et al. (1993) suggest that price discounts may work by enhancing customers'perceptions of savings and value, and by improving attitudes towards the brand relative to competitors' brands. Promotions such as price discounts and buy one get one free are effective promotional tools for encouraging consumers to buy more (Shi, Ka-Man and Gerald, 2005). Price promotions (e.g. discounts, coupons) are believed to increase store traffic, generate sales, and induce brand switching. However, there are negative effects of price-oriented promotions, such as profit erosion, declining quality perceptions, and decreased brand equity (Mela et al., 1997; Darke and Chung, 2005).

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2.5.2

Buy-One-Free-One

Buy-one-get-one-free promotions may be offered to shoppers at the regular price, thus adding value to the product (Shi et al, 2005). Shi et al. (2005) claim that the additional amount is given free of charge, consumers may be persuaded to buy the product. This means they must compare and evaluate the additional quantity received with respect to any costs they may incur. For instance, storing the additional quantity may be inconvenient for the consumer due to a lack of storage space (Gilbert & Jackaria 2002). The literature examining the impact of buy one get one free on stockpiling by consumers is inconclusive: Helsen and Schmittlein (1992) find a significant link between buy one get one free and intention to stockpile. Sinha and Smith (2000) study consumer perceptions of transaction value (perceived savings) when presented with deals that are equivalent on a unit saving basis but worded differently. Three promotion frames manipulated in their studies were 50% off, buy one, get one free, and buy two, get 50% off. The 50% off promotion was perceived as providing the highest transaction value (perceived savings) among the three deal types, and the mixed promotion buy two, get 50% off was considered to have the least transaction value.

2.5.3

Free Gift

Banerjee (2009) defines freebies or free gifts as small items, usually having a fraction of the monetary value in comparison to the product they are bundled with. Freebies are the most popular promotion category used by marketers. Freebies have been used in sales promotions with great enthusiasm by marketing strategists, as they can be bundled to offer unique combinations. Freebies can be kitchen utensils to toothbrushes to toys and games. Freebies can also be used to draw attention of new 36

customers as well as new customer segments (Banerjee, 2009). In 1996, the reported sales volume of products used as premiums in the USA reached $9.5 billion. This represents a more than 18 per cent increase over sales reported in 1995 (Bertrand, 1998). The interest that marketers display in using premiums for promoting their products and service is exemplified in the growing number of annual trade show such as Premium Incentive Show (Goldsborough, 1988). Simonson et al. (1994) have argued that offering an unattractive premium (i.e. a premium that is perceived by customers as having little or no value) may negatively affect brand image and attitude toward the brand. In one of studies they reported, giving consumers the (fictitious) opportunity to get a free subscription to Audio/Video Interiors magazine for the purchase of a JVC CD player led to significantly less choice (22 per cent) of the brand compared to situation where no premium was offered (Astous and Jacob, 2002).

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CHAPTER 3

RESEACH METHODOLOGY

This chapter reports the research methodology including framework of the study, development of hypotheses, research design, questionnaire design and measurement of variables, data collection, sampling design, data editing, coding & categorizing and data analysis procedures.

3.1

Framework of the Study

This chapter investigates the marketing communications that directly affect brand attitude and inducing their responses. In this study, brand attitude is employed as the mediating variable that changes consumer response. Having brand attitude, they tend to process information selectively. When consumers read consistent information that fits with the associations in their mind, they should accept the information directly and reinforce these associations (Wilson and Peterson, 1989). For example a highevaluated (low-evaluated) brand name is expected to reduce the persuasiveness of negative (positive) reviews because impression-inconsistent information is typically deflected away from the brand and discounted (Hoch and Deighton, 1989). Park and Han (2008) study find those consumers responses to conflicting review evaluations differ depending on the target of message attribution and prior brand attitude. So, in another word, the marketing communications and consumer response is the indirect effect of brand attitude.

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The three consumers responses segments identified are brand switching, purchase acceleration and product trial. The six types of marketing communications identified and selected for the framework are E-Communications (SMS and Internet forum), WOM, and sales promotions (price discount, buy-one-free-one and free gift). Figure 1: Consumer Response to Marketing Communications

E-Communications -Short Messaging Service (SMS) - Internet forum

Word-of-mouth (WOM)

Brand Attitude

Consumer Response - Brand switching - Purchase acceleration - Product trial

Sales promotions: - Price discount - Buy-one-free-one - Free gift

Adapted from: Shi, Z.S., Cheung K. M., Prendergast G. (2005), Behavioural response to sales promotion tools: A Hong Kong Study, International Journal of Advertising, 24(4), 467-486.

3.2

Development of Hypotheses

Over the past twenty years, a variety of approaches have been undertaken in an effort to understand and measure consumer response to marketing communications. Early econometric research used consumer diary panels to determine the underlying

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demographic, socioeconomic, and personal characteristics of the deal prone consumer (Massy and Frank 1965, Webster 1965, Montgomery 1971). Many studies have focused on the effects of promotion on brand switching, purchase quantity, and stockpiling and have documented that promotion makes consumers switch brands and purchase earlier or more (Guadagni and Little, 1983; Gupta 1988; Bucklin and Lattin 1991; Chintagunta 1993; Chiang 1995; Bucklin et al. 1998; Bell et al. 2000 and Seetharaman 2003). Previous research has shown that sales promotion can encourage behavioural responses such as brand switching, stockpiling, purchase acceleration, product trial and spending larger amounts (Shi et al., 2005).

Prior research into short-term unavailability mainly considers the unavailability of items (Breugelmans et al., 2006; and Sloot et al., 2005), though Verbeke et al. (1998) study consumer responses when all items of a preferred brand temporarily are out of stock. When consumers switch to other stores they probably buy other items in other categories as well, leading to additional sales and gross margin losses. For this research, literature on assortment reductions as well as on temporary unavailability of items can offer valuable insights. Retailing studies focus continuing attention on this issue; Sloot et al. (2005) provide an extensive overview. Within this research stream, one study investigates stock-outs of all items of five high-share brands (Verbeke et al. 1998). In an experimental study, they show that more than 40 percent of consumers postpone their purchase or visit another store to buy their preferred brand. Thus, a brand delisting of a high-share brand can have serious consequences for store sales and store loyalty (e.g., Campo et al., 2000). Therefore, the brand switching is chosen in this study is to gain a deeper understanding on in order to employ an effective promotional strategy to induce consumer response. Do different types of promotion

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vary in their abilities to encourage purchase acceleration? For example, do the acceleration effects of coupons differ from that of price discount, or from local advertising? To the extent that this occurs marketers should utilize different promotional tools depending on the desirability of inducing purchase acceleration? Hence, the purchase acceleration is elected in this study to look at the fitting types of marketing communications tools to inspire consumer respond. In a marketing research domain, consumers are often asked questions about their intentions to try or purchase products (Moritzt and Fitzsimons, 2004). In present Shenge (2008) studies has employed frequent and infrequent advertisement presentation modalities to assess consumers impact on product trial intentions. In reality, we know that consumers like to try new products or services that are newly launched and but there is lack of indepth study on how and what types of marketing communication promotional strategy that effectively induce or reliable source of information stimulate consumers mind in trying a new product or service. Thus, the product trial is selected in this study to examine the insight of marketing communications strategy to stimulate consumer response.

Three mechanisms, by which and what type of marketing communication promotions strategy may affect consumer response, are identified in the promotion literature. These are three types of dependent variables of consumer responses were chosen for the purpose of this study: brand switching, purchase acceleration and product trial. The study of Fader and Lodish (1990) imply a positive relationship between high frequency of purchase and promotional elasticity. Based on Bawa and Shoemaker (1987), Narasimhan et al. (1996) hypothesize that shorter consumer inter-purchase time result in more brands switching because the consumer must live with the

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consequences of buying a less preferred brand for a shorter period. Purchase acceleration means that a customer purchases a product at an earlier time (Shoemaker, 1979) is from a sales promotion. Neslin et al. (1985) have developed a framework which is concerned with purchases by an individual household of the elapsed time (or inter-purchase time) between the current purchase occasion and the previous purchase occasion. For example, consider the case of a given household on a routinized shopping schedule, buying in the category every two week. If this household purchases a larger than average quantity and hence accrues a larger than average inventory, the subsequent purchase occasion will be of a smaller quantity (Neslin et al., 1985, p. 155). Product trial can be induced by promotions such as instore demonstrations, because they lower the customers perceived risk (Blattberg et al., 1981). According to de Groot et al. (2008) for product trial consumers are allowed to experience a product for a fixed period, which is the trial period. After the trial period they decide whether to buy the product or not. De Groot et al. (2008) hypothesize that in a product trial people have interacted with, and experienced (either positively or negatively) the product for a fixed period. Also, during the trial period people have been able to consume the product. Hence, willingness to pay may be affected by consumption, negative, and positive experiences.

There are six independent variables of direct response marketing communications i.e. E-Communications (SMS and Internet forum); WOM and sales promotions (price discount, buy-one-free-one and free gift) selected in this study which are believed that these information channels is better than others at getting consumers response. Mobile marketing (SMS advertising) can also be seen as: all activities required to communicate with customers through the use of mobile devices in order

42

to promote the selling of products or services and the provision of information about these products and services (Ververidis and Polyzos, 2002).

As a popular Internet platform, Internet forum, blogs, chat room may affect the daily lives of many people. Interaction intention represents another important response in that blogs provide space for bloggers to share information or feelings with other people, and blog readers can easily post their own comments. Interactivity therefore is an important characteristic of blogs and should have positive impact on attitude toward the Web site (Thorson and Rodgers, 2006). The interactive nature of a blog may prompt users to publish their opinions, which in turn influences how people assess the Web site. By reading blogs may influence WOM intentions. HennigThurau and Walsh (2003) employ electronic WOM as a crucial response after people have read online opinions. Thus, Internet forum is one form of communication and interaction of participants to generate consumer response. But how effective is Internet forum in inducing consumers to react? So, Internet forum is chosen in this study to understand the consumer response to marketing communication.

Early studies suggested that WOM is nine times as effective as traditional advertising in converting unfavourable or neutral predispositions into positive attitudes (Day, 1971). Arndt (1967) and Dichter (1966) develop a list of factors to explain why people engage in WOM. These factors include dissonance reduction, product involvement, self-involvement, concern for others, to show connoisseurship, and to use WOM to develop and enhance relationships. Wirtz and Chew (2002) empirical study focuses on the effects of incentives, deal proneness, satisfaction, and

43

relationship strength on WOM behaviour. Numerous studies in the service sector have empirically validated the link between satisfaction and behavioural intentions and behavioural such as retention (Mital and Kamakura, 2001) and WOM (Reichheld and Sasser, 1990). All examples shown above studies are for many years back, thus it is important to study the effect of WOM today in inducing consumer response.

Price promotions (e.g. discounts, coupons) are believed to increase store traffic, generate sales, and induce brand switching (Jason and Moore, 2006). The major strategic goal of a price discount is to discriminate between informed and uninformed consumers or between loyal users and switchers (Shi el at., 2005). Research suggests those price discounts are particularly effective in inducing purchase acceleration and product trial (Gilbert and Jackaria, 2002). Empirical knowledge into consumer use of price as a market cue within the discount format as well as other retail environments is currently underdeveloped. The limited work on consumer behaviour within the discount format suggests equivocal findings related to the role of price within this environment (Fox et al., 2004; Moore and Carpenter, 2006). Pack with buy-one-getone-free may be offered to the shopper at a regular price thus adding value to the product. Gilbert and Jackaria (2002) claim that such packs do not increase brand awareness before trial purchase because the customer will only come across the product once in the store (unlike samples or coupons). For example, the best-selling AAs were boosted by Energizers buy-four-get-two-free, and Rayovacs buy-nineget-three-free packs. Good Humor-Breyers Ice Cream executives found bonus packs to be extremely successful (Reiter, 1994).

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Free sample or free gift is another important promotional tool of technique used by marketers. Marketing managers recognize the importance of product trial and direct behavioural experience with a product (Nelson and Chiew, 2005). They often mail free samples of products to consumers so that consumers can try the products for themselves, rather than just hear about the products (Kardes, 1999). Price discount, buy-one-free-one and free gift are selected in this study to examine why and how these information channels is better than others at getting consumers response.

The aforementioned discussion leads to the following hypotheses:

H1 There is a positive relationship between SMS advertisement and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial.

H2 There is a positive relationship between participation in Internet forum and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial.

H3There is a positive relationship between WOM information and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial.

H4 There is a positive relationship between price discount and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial.

H5 There is a positive relationship between buy-one-free-one and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial.

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H6 There is a positive relationship between free gift and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial.

The hypotheses for brand attitude which acts as the mediating variable was also developed. According to Aaker (1990), consumers overall attitude toward a brand is the basis of brand associations as well as the core of many conceptualizations of brand strength. Marketers use brand associations not only to differentiate, position, and extend brands, but also to create positive attitudes and feelings toward brands. Chaudhuri and Holbrook (2001) propose that brand trust and brand effect are each related to both purchase and attitudinal loyalty. This proposition stems from both the emerging theory and brand commitment (similar to brand loyalty) in relationship marketing (Fournier, 1988; Gundlach et al., 1995; Moorman et al., 1992; Morgan and Hunt, 1994; Webster, 1992). Many studies identify the construct of attitude toward a brand as one of the most important determinants of consumers behavioural intentions (e.g., Fishbein and Ajzen, 1975; Laroche et al., 1996). There some previous studies show that there are positive relationship between marketing communications and brand attitude: Barutu (2007) investigates consumers attitudes towards mobile advertising, entertainment, discount coupons and shopping. The results of this survey indicated that apart from mobile shopping, consumers have positive attitudes towards mobile advertising, entertainment and discount coupons. Ko et al. (2005) conclude that consumers who engage more in human-human interactions evaluate the website more positively leads to positive attitude toward the brand and purchase intention. Astous and Jacob (2002) also support that the more positive the consumer attitude toward the brand, the more consumer reactions to a premium-based promotional offer. The hypothesis is:

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H7 There is a positive relationship between SMS, Internet forum, WOM, price discount, buy-one-free-one and free gift and brand attitude.

Oliver (1997, p. 392) defines brand loyalty as a deeply held commitment to re-buy or re-patronize a preferred product or service consistently in the future, despite situational influences and marketing efforts having the potential to cause switching behaviour. Rajagopal (2008) indicates that both the affective and cognitive component of corporate identity significantly influence consumer attitudes toward the brand use, which in return leads to more positive company attitudes and purchase intentions among consumers. According to the theory of reasoned action (Ajzen and Fishbein, 1980; Fishbein and Ajzen, 1975), behavioural intentions are predicted by attitudes and subjective norms, while actual behaviour, in its turn, is predicted by intentions. This allows for the assumptions that attitudes could lead to performing behaviour in the past, just they lead to behavioural intentions, thus affecting the performance of the product trial experience. Based on past studies, it is found that if the consumer concludes that he or she bought the brand (brand switching) because of the promotion rather than brand preference, and then consumers underlying attitudes toward the brand is discounted, or weaken (Dodson et al, 1978). Over time, the consumers preference for the brand is reduced. Promotion has undermined brand loyalty. Thus, this example clearly shows that there is a positive relationship between brand attitude and brand switching. Whereas, purchase acceleration effects can result from direct effect of advertisement or alternatively, from an interaction between advertisement and brand attitude whereby advertising serves to illuminate the brand attitude experience (Neslin, 1985). Kempf and Smith (1988) find that exposing to an advertisement before a negative product experience resulted in a more positive

47

attitude and/or stronger brand beliefs than the negative product experiences alone. For example, Olson and Dover (1979) find that subjects exposed to advertisement-likemessage for a new brand of coffee rated the coffee less bitter after trial than did subjects who were not exposed to the pre-trial message, even though the coffee was quite bitter. With reference to the literature review where several researchers have shown that there is an association of consumers attitude toward the brand with consumer response. This study further investigates whether there is a significant relationship between brand attitudes with consumer responses.

H8 There is a positive relationship between brand attitude and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial.

3.3

Research Method and Research Instrument

The current research is a quantitative approach. The survey instrument is a selfadministered questionnaire, which was developed after a few consultations with the research supervisor. The questionnaire consists of six pages and carries seven questions. A pilot test was conducted by pretesting on ten respondents. Then the questions were refined after the pre-test mainly in the areas of the question clarity.

The questionnaire comprises of two sections, each of which provides instructions to guide the participants to complete the questions. The questionnaire has two major sections. Section A consists of seven questions. Section B, the seven demographic constructs namely, gender, year of birth, marital status, race, educational level, number of family and household monthly income are measure on category and scale.

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These questions were developed on the basis of the existing research literature and the complete questionnaire is presented in Appendix 1.

Table 3.3 highlights the summary of questionnaire design used in this study.

Table 3.3: Summary of Questionnaire Design Construct E-Communications: SMS Items Reference

1. Mobile advertisements are interesting to me. 2. Receiving mobile advertisements is enjoyable. 3. Mobile advertisements are a great Lee et al., 2006 source of timely information. 4. Mobile advertisements are trustworthy. 5. Looking forward to receiving SMS advertising. 6. I usually make purchase decision based on SMS advertising. 7. I like to send SMS about a product or Author service if I believe in the advertised message. 1. Internet forum allows me to learn about unknown things. 2. Internet forum allows me to keep up with whats going on. 3. I would sign in at the site for information that I need. 4. I would like to visit the Web site again. 5. This is a good place to spend my time. 6. Internet forum provides reliable information. 1. This person mentioned some things I had not considered. 2. This person provided some different ideas than other sources. 3. This person really didnt change my mind about buying the product. a 4. This person helped me make a decision about buying the product. 5. The opinion of this person will

Internet forum

Ko et al., 2005

Author

Ko et al., 2005 Author

WOM

Mary et al. , 1988

49

6.

7. 8. 9.

continue to influence my choice about buying the product. How much influence do you think this person will have on whether or not you purchase the product/service? How much influence do you think this person will have on the product/service you actually buy? How much influence do you think this person will have on the features you look for in this product/service? How much influence do you think this person will have on the brand/provider of this product/service you buy?

Mary et al. , 1988

Sales Promotion: Price discount

1. If a product is on sale, that can be a reason for me to buy it. 2. I have favourite brands, but most of the time I buy the brand that' s on sale. 3. One should try to buy the brand that is Lichtenstein et al., on sale. 1997 4. I am more likely to buy brands that are on sale. 5. Compared to most people, I am more likely to buy brands that are on special discount. 1. I enjoy buying a brand that offers a "buy-one-get-one-free" deal. 2. When I buy a product on a "buy-oneget-one-free" offer, I feel that I am getting a good deal. 3. I enjoy buying a product that offers a "2 for 1" deal, regardless of the Lichtenstein et al., amount I save by doing so. 1997 4. I have favourite brands, but if I see a "2 for 1" offer, I am more likely to buy that brand. 5. When I take advantage of a "buy-oneget-one-free" offer, I feel good. 6. I don' t believe that "2 for 1" deals save you much money. a 1. I enjoy buying products that come with a free gift. 2. I have favourite brands, but when I encounter a free gift offer, I am more

Buy-one-free-one

Free gift

Lichtenstein et al., 1997

50

Brand Attitude: Brand trust

likely to buy the brand that comes with the free gift. 3. Seeing a brand that comes with a free gift has influenced me to buy brands I normally would not buy. 4. Beyond the money I save, buying a brand that comes with a free gift gives me a sense of joy. 5. Compared to most people, I am more likely to buy brands that come with free gifts. 1. 2. 3. 4. I trust this brand. I rely on this brand. This is an honest brand. This brand is safe.

Lichtenstein et al., 1997

Brand affect

1. I feel good when I use this brand. 2. This brand makes me happy. 3. This brand gives me pleasure. 1. I will buy this brand the next time I buy. 2. I intend to keep purchasing this brand. 3. I am committed to this brand. 4. I would be willing to pay a higher price for this brand over other brands. 1. Mobile advertising (SMS) has led me to buy another brand which I do not regularly buy. 2. Internet forum information has led me to buy another brand which I do not regularly buy. 3. WOM information from a family member/ friend/colleague/ neighbour has led me to buy another brand which I do not regularly buy. 4. Price discount has led me to buy another brand which I do not regularly buy. 5. Buy-One-Free-One has led me to buy another brand which I do not regularly buy. 6. Free Gift has led me to buy another brand which I do not regularly buy.

Chaudhuri and Holbrook, 2002

Brand commitment

Consumer response : Brand switching

Author

Shi et al., 2005

51

Purchase acceleration

1. Mobile advertising (SMS) has led me to buy more quantities of the same product. 2. Internet forum information has led me to buy more quantities of the same product. 3. WOM information from a family member/ friend/colleague/ neighbour has led me to buy more quantities of the same product. 4. Price discount has led me to buy more quantities of the same product. 5. Buy-One-Free-One had led me to buy more quantities of the same product. 6. Free Gift had led me to buy more quantities of the same product. 1. Mobile advertising (SMS) has led me to buy a product which I have never tried before. 2. Internet forum information has led me to buy a product which I have never tried before. 3. WOM information from a family member/ friend/colleague/ neighbour has led me to buy a product which I have never tried before. 4. Price discount has led me to buy a product which I have never tried before. 5. Buy-One-Free-One has led me to buy a product which I have never tried before. 6. Free Gift has led me to buy a product which I have never tried before.

Author

Author

Shi et al., 2005

Product trial

Author

Shi et al., 2005

Measured on a reverse scale.

Question 1 is about opinion on the use of SMS as a mean of communication. For measuring of SMS advertising Lee et al.s (2006) use six items to measure SMS advertising and the last item is created by author. Question 2 is about Internet forum which has become an important platform for people to use to share information. For the measurement for Internet forum, Ko et al. (2005) employ four statements about reasons for using the Internet and third the last item is created by author. 52

Question 3 to measure of episodic influence of sources on seekers was developed, a definition and instruction described briefly. First, a short description of WOM is given and an instruction is specified as: You will likely have the occasion to ask someone (a family member, friend, colleague, neighbour, etc.) about a product or service you are considering purchasing. Thinking about any of such incidents in the part, answer the following by circling the number statement suits your opinion. Mary et al, 1988 use nine statements were modified phrasing to measure the influence of WOM. Question 4 is the measure of sales promotion that induces consumer response. In the research, three types of sales promotions were selected (price discount, buyone-free-one and free gift). The reason of choosing these three types of sales promotions, mainly because these are the most common sales promotions strategic used by marketers in hypermarket in Malaysia nowadays. Lichtenstein et al. (1997) use sixteen items to examine the deal proneness across sales promotion types. Question 5 is about the measure of brand attitude which consists of four items of brand trust, three items of brand effect and four items of brand commitment selected in this study. These rated items are adopted from Chaudhuri and Holbrook, (2002) to study the relational exchanges to consumer markets using brand as the units of analysis.

Question 6: This question is asked respondent about some products that they are considering to purchase and the information that they tend to rely on. There are nine types of products: i. Computer/ notebook ii. Digital camera iii. MP3 player

53

iv. Musical performance i.e. Mamma Mia Musical, Cats, etc v. Movie vi. Restaurant vii. Groceries product i.e. soft drink, potato chips, etc. viii. Household are products i.e. detergent, toilet rolls, etc. ix. Personal care products i.e. shampoo, shower gel, etc. Respondent is allowed to select only one product based on one of the sources of information as in SMS/Internet forum, WOM, sales promotion or have never purchased/ not intend to purchase.

Question 7: This question is focuses on examining which marketing communications are most effective in inducing consumer responses (brand switching, purchase acceleration and product trial). There are nine items adopted from Shi et al. (2005) and nine others item is created by author on consumers response to different types of marketing communication.

3.4

Data Collection

This subsection firstly discusses the data collection method used in the current study. It then explains how participants would be selected for the survey, followed by a description of the procedures of collecting data. A non-probability sampling technique: - convenience sampling is used in this study. Field data collection was accomplished by hypermarkets, IT Malls and Restaurants- questionnaire survey in between 28th February 2009 to 21st March 2009. The interview locations were Tesco Hypermarket in Puchong and Cheras, Giant Hypermarket in Puchong, Cheras, Kelana

54

Jaya, Econsave Hypermarket in Cheras, IT Malls in Petaling Jaya, Sunway and Restaurants in Cheras and Petaling Jaya. The questionnaire attached with a cover letter describing the purpose of the study was handed to the respondents with emphasis to the confidentiality not to disclose information.

3.5

Sampling Design

This is a quantitative research, studying relationship of the stated variables and is cross-sectional in its time dimension. This study employs statistical method using primary data. This study would use multiple regression analysis to examine the relationship between the three dependent variables, five independent variables and one mediating variable on consumer responses. A large sample size was required for this multivariate technique. Roscoe (1975) proposes the rules of thumb for determining sample size. Firstly, a sample size larger than 30 and less than 500 are appropriate for most of the research. Secondly, where samples are to be broken into subsamples; (males/females, races, etc.), a minimum sample size of 30 for each category is necessary. In multivariate research (including multiple regression analyses), the sample size should be several times (preferable 10 times or more) as large as the number of variable in the study. Therefore, the sample size would be 550 in this study. A total of 650 questionnaires were distributed and via email among college students, colleagues, hypermarkets and IT Malls shoppers and as well as customers who are having their lunch or dinner in the restaurants in the mentioned earlier locations.

55

3.6

Data Editing, Coding and Categorizing

This section describes briefly three steps to deal with the data before they were input into computer. The steps are data editing, coding and categorizing. Data was directly keyed into the SPSS Data Editor by using the actual scores marked by the respondents. Two negatively worded items were also recoded. There are item 3 under measurement of WOM communications and item 6 under measurement of buy-onefree-one question. The processes for scanning the data are described in the following section.

3.7

Data Analysis Procedure

This study employs statistical methods and statistical tools. Responses to the questionnaire were analyzed using SPSS 15.0 and the results reported in written form.

56

CHAPTER 4

RESEACH RESULTS

This chapter focuses on presenting the detailed analysis of the data collected and the statistical results for the study. Multiple regression analysis is adopted as the main multivariate technique to test the relationship between marketing communication channels and brand attitude to consumer responses. In this chapter, the findings of the research are presented.

4.1

Demographic Profile

This section provides the response rate obtained from the survey. A total of 650 survey questionnaires were distributed through convenience sampling method. From this, 578 questionnaires were returned and 28 questionnaires were rejected from analysis due to incomplete answers, as a result 550 questionnaires were retained. The response rate was 85%. Numbers of the response rate are summarized in Table 4.1.

Table 4.1a: Response Rate Survey Participation Incomplete response Total number of questionnaires returned Total number of questionnaires distributed Questionnaires completed and retained Response rate Number of response 28 578 650 550 85%

This section describes the characteristics of the respondents. In this survey, seven personal characteristics were obtained from the respondents, namely, gender, age,

57

marital status, race, educational level, number of family members and household monthly income. Among these respondents (46%, N=251) were females and 54%, N=299 males. Respondents aged 25 or less (32.7%, N=180), 26 to 35 years old (40.5%, N=223), 36 to 45 years old (19.5%, N=107) and 46 and above (7.3%, N=40). The mean age is 30.8 and Standard Deviation is 8.78. In terms of marital status, the single adults accounted for 62.4%, N=343; this was followed by married adults (37.6%, N=207). The Malays comprise 19.8%, N=109 of the samples whereas the Chinese consist of 57.3%, N=315 and followed by India as (18.4%, N=101). The remaining 4.5%, N=25 falls under others category-Filipino, Iranian, Sri Lankan, Indonesian, Eurasian, Singh, Sudanese, Indian Chinese, Indian Muslim, Bumiputra (Sungei and Melanau).

In term of educational levels, the majority 63.8%, N=351 of the respondents had university level educations. The PMR/ LCE or below consist of 3.1%, N=17,

SPM/MCE (12%, N=66), Certificate/Diploma (10.7%, N=59), Postgraduate (10.4%, N=57). The largest proportion of the respondents lived in a family unit of five or more people (47.5%, N=261) for almost half of the total sample. Those living in a family size of less than five accounted for 37.3%, N=205. There are only 8.9%, N=49 of the respondents who have a family size of two and 6.4%, N=35 are living alone. As for household monthly income, 8.9%, N=49 of the respondents earn below RM 1,000. Household monthly income between RM 1,001 to RM 3,000 comprise of 23.8%, N=131, 31.6%, N=174 respondents earn between RM 3,001 to RM 5,000. There are some respondents who are enjoying household monthly income between RM 5,001 to RM 7,000 and RM 7,001 to RM 9,000 accounted 12.4%, N=68 and 7.8%, N=43, respectively. 15.5%, N=85 of the respondents that earn RM 9,000 and above for their

58

household monthly income. A detailed description of the respondents for this study is illustrated in Table 4.1b. Table 4.1b: Demographic Profile of Respondents
Demographics Gender Female Male Age 25 or less 26-35 36-45 46 and above Mean age: 30.8 years old, (SD=8.78) Marital Status Single Married Race Malay Chinese Indian Others Education Level PMR/LCE or below SPM/MCE Certificate/Diploma Degree/Professional Certification Postgraduate Number of Family Members One Two Less than five Five and more Household Monthly Income (RM) Below 1,000 1,001-3,000 3,001-5,000 5,001-7,000 7,001- 9,000 9,001 and above

Demographics Profile of Respondents, N= 550

N 251 299 180 223 107 40 343 207 109 315 101 25 17 66 59 351 57 35 49 205 261 49 131 174 68 43 85

% 46 54 32.7 40.5 19.5 7.3 62.4 37.6 19.8 57.3 18.4 4.5 3.1 12 10.7 63.8 10.4 6.4 8.9 37.3 47.5 8.9 23.8 31.6 12.4 7.8 15.5

59

4.2

Overview Finding

The scales used to measure the direct effect of the marketing communications on consumer response are tested for the descriptive and frequencies analysis. From Table 4.2, show the results of the direct effect of the marketing communications on consumer response. In the overall perceptions toward SMS, results show that Mean= 3.09 and Standard deviation= 0.33. Results show that mobile advertisements are not interesting to respondent (53.5%, N=294), Mean=3.36 and Standard deviation= 1.79, mobile advertisements is enjoyable (62%, N=341), Mean= 2.70 and Standard deviation=1.66, mobile advertisements are not a great source of timely formation (44%, N=242), Mean=3.70 and Standard deviation=1.70, mobile advertisements are not trustworthy (59.8%, N=329), Mean=3.05 and Standard deviation=1.52, they are not looking forward to receiving SMS advertising (62.9%, N=346), Mean=2.89 and Standard deviation=1.65, respondent do not usually make purchase decision based on SMS advertising (67.8%, N=373), Mean=2.55 and Standard deviation=1.63 and 58%, N=319 (Mean=3.11 and Standard deviation=1.75) of the respondents do not like to send SMS about a product or service if believing in the advertised message.

In the overall perceptions toward Internet forum, results show that Mean= 5.20 and Standard deviation= 0.28. Results show that Internet forum allows respondent to learn about unknown things (82.9%, N=456), Mean=5.53 and Standard deviation=1.25, Internet forum allows respondent to keep up with whats going on (83.3%, N=458), Mean=5.45 and Standard deviation=1.17, respondent would sign in at the site for information that needed (78%, N=429), Mean=5.35 and Standard deviation=1.21, respondent would like to visit the Web site again (79.2%, N=436), Mean=5.31 and Standard deviation=1.21. 61.7%, N=339, (Mean=4.82 and Standard deviation1.31) of

60

the respondents find that Internet forum is a good place to spend time and 63.3%, N=348, (Mean=4.78 and Standard deviation=1.29) of the respondent feel that Internet forum provides reliable information.

In the overall perceptions toward WOM, results show that Mean= 4.49 and Standard deviation= 0.23. Results show that majority of the respondents agreed with that person who mentioned some things that not considered (61.9%, N=340) Mean=4.74 and Standard deviation=1.30, respondent also feel that the person provides some different ideas compared to other sources (68.4%, N=376), Mean=4.92 and Standard deviation=1.20, 51.8%, N=289, (Mean=4.52 and Standard deviation=1.22) of the respondents agreed with that person really did change respondent mind about buying the product. 59.7%, N=328, (Mean=4.66 and Standard deviation=1.25) of the respondents agree that person helped in making a decision about buying the product. 54%, N=297, (Mean=4.48 and Standard deviation=1.28) of the respondents choose to agree with the opinion of that person who would continue to influence respondent choice about buying the product. There are about 39.4%, N=216, (Mean=4.30 and Standard deviation=1.19) who think that person will have influence on whether or not when purchase the product/service. 41.1%, N=226, (Mean=4.29 and Standard deviation=1.19) think that the person will have influence on the product/service respondent actually buy, 41.7%, N=229, (Mean=4.30 and Standard deviation=1.16) think that person will have influence on the features respondent look for in that product/service, and 41.5%, N=228, (Mean=4.28 and Standard deviation=1.21) think that the person will have on the brand/provider of this product/service respondent buy.

61

In the overall perceptions toward price discount, results show that Mean= 4.73 and Standard deviation= 0.08. Results also show that if a product is on sale that can be a reason for respondent to buy it (69.8%, N=384), Mean=4.90 and Standard deviation=1.51), respondents have favourite brands, but most of the time respondent buy the brand that' s on sale (60.2%, N=331), Mean=4.58 and Standard deviation=1.45, respondent feel that should try to buy the brand that is on sale (60.3%, N=332), Mean=4.66 and Standard deviation=1.35), respondents are more likely to buy brands that are on sale (61.4%, N=338), Mean=4.71 and Standard deviation=1.40, respondent agree that compared to most people, respondent are more likely to buy brands that are on special discount (64.1%, N=353), Mean=4.80 and Standard deviation=1.40.

From the overall perceptions toward buy-one-free-one, results show that Mean= 4.49 and Standard deviation= 0.14. Results show that respondent enjoy buying a brand that offers a "buy-one-free-one" deal (56%, N=308), Mean=4.75 and Standard deviation=1.41, when respondent buy a product on a "buy-one-free-one" offer, respondent feel getting a good deal (60%, N=330), Mean=4.62 and Standard deviation=1.42, respondent enjoy buying a product that offers a "2 for 1" deal, regardless of the amount save (47.7%, N=262), Mean=4.23 and Standard deviation=1.46, respondents have favourite brands, but if seeing a "2 for 1" offer, respondents are more likely to buy that brand (49.1%, N=270), Mean=4.31 and Standard deviation=1.42, when respondent take advantage of a "buy-one-free-one" offer, respondent feel good (60.9%, N=335), Mean=4.66 and Standard deviation=1.37, respondent do believe that "2 for 1" deals save much the money (59.10%), Mean=4.58 and Standard deviation=1.37.

62

In the overall perceptions toward Free gift, results show that Mean= 4.35 and Standard deviation= 0.20. Results show that respondent enjoy buying products that come with a free gift (62.8%, N=345), Mean=4.73 and Standard deviation=1.29, respondents have favourite brands, but when encounter a free gift offer, respondent are more likely to buy the brand that comes with the free gift (49.7%, N=274), Mean=4.38 and Standard deviation=1.35, seeing a brand that comes with a free gift has influenced respondent to buy brands normally would not buy (41.1%, N=226), Mean=4.07 and Standard deviation=1.38, compared to most people, respondent are more likely to buy brands that come with free gifts (47.1%, N=289), Mean=4.36 and Standard deviation=1.40. Beyond the money respondent save, buying a brand that comes with a free gift gives respondent a sense of joy (52.5%, N=259), Mean=4.23 and Standard deviation=1.42.

In the overall consumer response (brand switching), results show that Mean= 4.15 and Standard deviation= 0.59. Results also show that mobile advertising (SMS) has led respondent to buy another brand which they do not regularly buy (62%, N=341), Mean=2.92 and Standard deviation=1.56, Internet forum information has led respondent to buy another brand which they do not regularly buy (42.5%, N=234), Mean= 3.96 and Standard deviation= 1.49, WOM information from a family member/ friend/colleague/ neighbour has led respondent to buy another brand which they do not regularly buy (66.1%, N=364), Mean=4.73 and Standard deviation= 1.27, price discount has led respondent to buy another brand which they do not regularly buy (61%, N=336), Mean= 4.57, Standard deviation= 1.21, buy-one-free-one has led me to buy another brand which I do not regularly buy (54.7%, N=301), Mean= 4.44,

63

Standard deviation= 1.29, free gift has led respondent to buy another brand which they do not regularly buy (47.2%, N=260), Mean= 4.30, Standard deviation= 1.26.

For consumer response (purchase acceleration), results show that Mean= 4.11 and Standard deviation= 0.50. Mobile advertising (SMS) has led respondent to buy more quantities of the same product (57.6%, N=317), Mean= 3.18, Standard deviation= 1.53, Internet forum information has led respondent to buy more quantities of the same product (32%, N=176), Mean= 3.74, Standard deviation= 1.44, WOM information from a family member/ friend/colleague/ neighbour has led respondent to buy more quantities of the same product (47.6%, N=262), Mean= 4.30, Standard deviation= 1.36, price discount has led respondent to buy more quantities of the same product (62.7%, N=345), Mean= 4.67, Standard deviation= 1.24, Buy-one-free-one has led me to buy a product which I have never tried before (56.1%, N=309), Mean= 4.49, Standard deviation= 1.24, free gift had led me to buy more quantities of the same product (48%, N=264), Mean= 4.31, Standard deviation= 1.34.

For consumer response (product trial), results show that Mean= 4.14 and Standard deviation= 0.46. Mobile advertising (SMS) has led respondent to buy a product which they have never tried before (56.3%, N=310), Mean= 3.19, Standard deviation= 1.59, Internet forum information has led respondent to buy a product which they have never tried before (43%, N=237), Mean= 4.03, Standard deviation= 1.44, WOM information from a family member/ friend/colleague/ neighbour has led respondent to buy a product which they have never tried before (63.8%, N=351), Mean= 4.67, Standard deviation= 1.25, price discount has led respondent to buy a product which they have never tried before (55%, N=303), Mean= 4.43, Standard deviation= 1.31,

64

buy-one-free-one has led respondent to buy a product which they have never tried before (51.2%, N=282), Mean= 4.34, Standard deviation= 1.32, free gift has led respondent to buy a product which they have never tried before (46.5%, N=256), Mean= 4.21, Standard deviation= 1.37.

Table 4.2: Summary of the Direct Effect of the Marketing Communications on Consumer Response Source of Information N= 550 Mean 3.09 3.36 2.79 3.70 3.05 2.89 2.55 3.11 5.20 5.53 5.45 5.35 5.31 4.82 4.78 4.49 4.74 4.92 4.52 4.66 4.48 4.30 4.29 4.30 SD 0.33 1.79 1.66 1.70 1.52 1.65 1.63 1.75 0.28 1.25 1.17 1.21 1.18 1.31 1.29 0.23 1.30 1.20 1.22 1.25 1.28 1.19 1.19 1.16

Perception toward SMS Mobile advertisements are interesting to me. Receiving mobile advertisements is enjoyable. Mobile advertisements are a great source of timely information. Mobile advertisements are trustworthy. Looking forward to receiving SMS advertising. I usually make purchase decision based on SMS advertising. I like to send SMS about a product or service if I believe in the advertised message. Perception toward Internet forum Internet forum allows me to learn about unknown things. Internet forum allows me to keep up with whats going on. I would sign in at the site for information that I need. I would like to visit the Web site again. This is a good place to spend my time. Internet forum provides reliable information. Perception toward WOM This person mentioned some things I had not considered. This person provided some different ideas than other sources. This person really didnt change my mind about buying the product. a This person helped me make a decision about buying the product. The opinion of this person will continue to influence my choice about buying the product. How much influence do you think this person will have on whether or not you purchase the product/service? How much influence do you think this person will have on the product/service you actually buy? How much influence do you think this person will have on the

65

features you look for in this product/service? How much influence do you think this person will have on the brand/provider of this product/service you buy? Perception toward price discount If a product is on sale, that can be a reason for me to buy it. I have favourite brands, but most of the time I buy the brand that' s on sale. One should try to buy the brand that is on sale. I am more likely to buy brands that are on sale. Compared to most people, I am more likely to buy brands that are on special discount. Perception toward buy-one-free-one I enjoy buying a brand that offers a "buy-one-free-one" deal. When I buy a product on a "buy-one-free-one" offer, I feel that I am getting a good deal. I enjoy buying a product that offers a "2 for 1" deal, regardless of the amount I save. I have favourite brands, but if I see a "2 for 1" offer, I am more likely to buy that brand. When I take advantage of a "buy-one-free-one" offer, I feel good. I dont believe that "2 for 1" deals save you much money. a Perception toward free gift I enjoy buying products that come with a free gift. I have favourite brands, but when I encounter a free gift offer, I am more likely to buy the brand that comes with the free gift. Seeing a brand that comes with a free gift has influenced me to buy brands I normally would not buy. Beyond the money I save, buying a brand that comes with a free gift gives me a sense of joy. Compared to most people, I am more likely to buy brands that come with free gifts. Brand Switching Mobile advertising (SMS) has led me to buy another brand which I do not regularly buy. Internet Forum has led me to buy another brand which I do not regularly buy. WOM information from a family member/ friend/colleague/ neighbour has led me to buy another brand which I do not regularly buy. Price discount has led me to buy another brand which I do not regularly buy. Buy-one-free-one has led me to buy another brand which I do not regularly buy.

4.28 4.73 4.90 4.58 4.66 4.71 4.80 4.49 4.57 4.62 4.23 4.31 4.66 4.58 4.35 4.73 4.38 4.07 4.36 4.23 4.15 2.92 3.97 4.73 4.57 4.44

1.21 0.08 1.51 1.45 1.35 1.40 1.40 0.14 1.41 1.42 1.46 1.42 1.37 1.37 0.20 1.29 1.35 1.38 1.40 1.42 0.59 1.56 1.49 1.27 1.21 1.29

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Free gift has led me to buy another brand which I do not regularly buy. Purchase Acceleration Mobile advertising (SMS) has led me to buy more quantities of the same product. Internet forum information has led me to buy more quantities of the same product. WOM information from a family member/ friend/colleague/ neighbour has led me to buy more quantities of the same product. Price discount has led me to buy more quantities of the same product. Buy-one-free-one had led me to buy more quantities of the same product. Free gift had led me to buy more quantities of the same product. Product Trial Mobile advertising (SMS) has led me to buy a product which I have never tried before. Internet forum information has led me to buy a product which I have never tried before. WOM information from a family member/ friend/colleague/ neighbour has led me to buy a product which I have never tried before. Price discount has led me to buy a product which I have never tried before. Buy-one-free-one has led me to buy a product which I have never tried before. Free gift has led me to buy a product which I have never tried before.

4.30

1.26

4.11 3.18 3.74 4.30 4.67 4.49 4.31 4.14 3.19 4.03 4.67 4.43 4.34 4.21

0.50 1.53 1.44 1.36 1.24 1.24 1.34 0.46 1.59 1.44 1.25 1.31 1.32 1.37

Measured on a reverse scale.

4.3

Major Source of Information for Product Categories

The table 4.2 shows the results of the major source of information for the various types of products included in the study. The major source of information that consumers relied on/ are using for the products:-such as computer/ notebook, digital camera, MP3 Player, musical performance (Mamma Mia Musical, Cats, etc.), movie, restaurant, groceries product (soft drink, potato chips, etc.), household products (detergent, toilet rolls, etc.) and personal care products (shampoo, shower gel, etc). 67

From the list, it is clear that both high- and low-involvement products are included since the sources of information consumers rely on may differ according to products. Computer/ notebook, digital camera and MP3 player are classified as high involvement product. Lastovicka (1978) claims that less frequently purchased, and more brand differentiated product classes, such as automobiles or stereo equipment are often given examples of high involvement product classes. Whereas, musical performance, movie, dinning in an restaurant, groceries, household and personal care products are classified as low-involvement product. Lastovicka (1978) defines that frequently purchased; commodity-like goods such as toothpaste or canned peas are examples of what have become referred to as low involvement product classes. Following Lastovicka and Gardner (1978), a low involvement product class is one in which most consumers perceive little linkage to their important values and is a product class where there is little consumer commitment to the brands. Both high and low involvement products that are selected in this study mainly to examine the sources of information that consumer rely on when making purchase decision on some product categories. Furthermore, it would be the best indication for marketers in strategy planning when promote or sell both high and low involvement product in the market place. A summary of the sources of information by product categories is illustrated in Table 4.3.

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Table 4.3: Sources of Information by Product Categories

SMS/Internet forum Type of Products Computer/Notebook Digital Camera MP3 Player Musical performance i.e. Mamma Mia Musical, Cats, etc. Movie Restaurants Groceries products i.e. coffee, soft drink, potato chips, etc. Household care products i.e. detergent, toilet rolls, etc. Personal care products i.e. shampoo, shower gel, etc. N 177 144 97 87 136 62 33 33 42

Source of Information
WOM

Sales Promotions N 205 194 210 115 118 110 316 348 315 % 37.3 35.3 38.2 20.9 21.5 20 57.5 63.3 57.3

% 32.2 26.2 17.6 15.8 24.7 11.3 6 6 7.6

N 127 135 112 177 253 338 164 125 165

% 23.1 24.5 20.4 32.2 46 61.5 29.8 22.7 30

Have Never Purchased/ Not Intend to Purchase N % 41 7.5 77 14 131 23.8 171 31.1 43 40 37 44 28 7.8 7.3 6.7 8 5.1

Majority of the products like computer/notebook (37.3%, N=205), digital camera (35.3%, N=194), MP3 player (38.2%, N=210), groceries (57.5%, N=316), household care (63.3%, N=348) and personal care (57.3%, N=315), consumer find sales promotions are the major source of information that they relied heavily on before they have purchased or about to purchase on the products listed above. The second most important source of information they relied on are WOM recommendations by a family member, friend, colleague, neighbour, etc., when they have purchased or about to purchase product like musical performance (32.2%, 117), movie (46%, N=253) and restaurant (61.5%, N=338).

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4.4

The Direct Effect of the Marketing Communications on Consumer Response

On the linkage between the direct effect of Marketing Communications and Consumer Response are tested by using correlation analysis. The correlation coefficient among SMS, Internet forum, WOM, price discount, buy-one-free-one, free gift, brand attitude, brand switching, purchase acceleration and product trial are showed in the table 4.6.1. The results reveal that there are significant correlations existing between marketing communications and consumer response. There are a strong positive correlation found in between SMS, Internet forum, WOM, price discount, buy-one-free-one, free gift, brand attitude, brand switching, purchase acceleration and product trial at 1% level.

Table 4.4: Summary the Direct Effect of Marketing Communications and Consumer Response
Correlation SMS Internet forum WOM Price Discount BuyOneFreeOne Free Gift Brand Attitude Brand Switching Purchase Acceleration Product Trial

SMS Internet forum WOM Price Discount Buy-OneFree-One Free Gift Brand Attitude Brand Switching Purchase Acceleration Product Trial

1.00 0.15** 0.22** 0.13** 0.26** 0.25** 0.13** 0.34** 0.37** 0.30**

1.00 0.24** 0.28** 0.17** 0.13** 0.26** 0.25** 0.12** 0.18** 1.00 0.25** 0.25** 0.26** 0.24** 0.30** 0.29** 0.29** 1.00 0.55** 0.44** 0.19** 0.32** 0.22** 0.16** 1.00 0.66** 0.14** 0.44** 0.48** 0.39** 1.00 0.16** 0.41** 0.48** 0.41** 1.00 0.16** 0.12** 0.10* 1.00 0.61** 0.60** 1.00 0.66** 1.00

** Correlation is significant at the 0.01level (2-tailed) * Correlation is significant at the 0.05level (2-tailed)

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4.5

Consumer Response to Marketing Communications: A Comparison of Age and Gender

Cross tabulation tables were generated to compare the demographic profile of consumers; responses of marketing communications particularly on promotion strategy. A t-test was conducted to determine whether there is a relationship between demographic profile and marketing communications. The conventional ruling is that the marginal total of the independent variables should be used as the based for computing the percentages. In this case, the age (35 and below and 36 and above) and gender (female and male), were used in the calculation. A summary of the demographic and consumers response to marketing communications is illustrated in Table 4.5.

Table 4.5: Summary of the Consumer Response to Marketing Communications: A Comparison of Age and Gender Categories SMS Internet forum WOM Price discount Buy-one-freeOne Free Gifts Age (N) 35 and below 36 and above 35 and below 36 and above 35 and below 36 and above 35 and below 36 and above 35 and below 36 and above 35 and below 36 and above Age: 403 147 403 147 403 147 403 147 403 147 403 147 Mean 21.5 21.8 31.7 29.8 40.4 40.6 23.9 22.7 27.1 26.3 21.9 21.2 SD 9.5 10.2 5.4 7.2 7.5 10 5.5 6.4 6.8 7.5 5.5 5.8 t-test -0.3 3.3 -0.2 2.1 1.2 1.2 Sig. ns p<0.05 p<0.05 p<0.05 ns ns

A t-test will indicate if perceived differences are significantly different for age group. Given that Levenes test has a probability less than 0.05 and assumption of the population variances is relatively equal. Therefore, the use of t-value, df and two tail

71

significance for the equal variance estimated to age differences exist. The two-tail significance for Internet forum indicated that p<0.05 and therefore is significant. The two groups must come from the same population because is it significant differences exist- t (548) =3.3, p<0.05. The results show that the difference in the means of 31.7 and 29.8 with standard deviations of 5.4 and 7.2 for 35 year old and below and 36 year old and above on Internet forum, is significant. The two-tail significance for WOM indicated that p<0.05 and therefore is significant. The two groups must come from the same population because is it significant differences exist- t (548) =-0.2, p<0.05. The results show that the difference in the means of 40.4 and 40.6 with standard deviations of 7.5 and 10 for 35 year old and below and 36 year old and above on WOM, is significant. The two-tail significance for price discount indicated that p<0.05 and therefore is significant. The two groups must come from the same population because is it significant differences exist- t (548) =2.1, p<0.05. The results show that the difference in the means of 23.9 and 22.7 with standard deviations of 5.5 and 6.4 for 35 year old and below and 36 year old and above on price discount, is significant. Whereas, the two tailed significant for SMS, buy-one-free-one and free gift indicated that p>0.05 and therefore is not significant Gender: Gender (N) Mean Female 251 22.5 Male 299 20.8 Female 251 31.1 Male 299 31.3 Female 251 40.9 Male 299 40 Female 251 24.6 Male 299 22.8 Female 251 27.4 Male Female Male 299 251 299 26.5 21.8 21.7

Categories SMS Internet forum WOM Price Discount Buy-One-FreeOne Free Gift

SD 9.9 9.5 5.6 6.3 7.9 8.5 5 6.3 6.8 7.1 5.5 5.7

t-test 2 -0.3 1.2 3.5 1.3 0.1

Sig. ns p<0.05 ns p<0.05 ns ns

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A t-test will indicate if perceived differences are significantly different for female and male. Given that Levenes test has a probability less than 0.05 and assumption of the population variances is relatively equal. Therefore, the use of t-value, df and two tail significance for the equal variance estimated to gender differences exist. The two-tail significance for Internet forum indicated that p<0.05 and therefore is significant. The two groups must come from the same population because it is significant differences exist- t (548) =-0.3, p<0.05. The results show that the difference in the means of 31.1 and 31.3 with standard deviations of 5.6 and 6.3 for female and male on Internet forum is significant. The two-tail significance for price discount indicated that p<0.05 and therefore is significant. The two groups must come from the same population because it is significant differences exist- t (548) =3.548, p<0.05. The results show that the difference in the means of 24.61 and 22.85 with standard deviations of 5.07 and 6.33 for female and male on price discount is significant. Whereas, the two tailed significant for SMS, WOM, buy-one-free-one and free gift indicated that p>0.05 and therefore is not significant.

4.6

Reliability Test

The reliability of a measure indicates the extent to which it is without bias (error free) and hence ensures consistent measurement across time and various item in the instrument (Sekaran, 2003). The internal consistency of measures is an indication of the homogeneity of the items which measure the same construct (Sekaran, 2003). Thus, to obtain a high reliability of a measure, the items should be highly correlated with one another to independently measure the construct.

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Validity is the extent to which a set of measuring variables were tapped by the items in the measure (Sekaran, 2003). In other words, this test confirms if the multiple variables developed for a construct rightly measure that construct. In this analysis, Cronbachs alpha, was used to test reliability of the interval-scaled variables. Cronbachs alpha is the most frequently used and has the most utility for multi-item scales at interval level of measurement (Cooper and Schindler, 2003). Cronbachs alpha point of view, the closer the coefficient From

is to 1.0, the higher the is 0.7 (Hair et al.,

internal consistency reliability. In general, the cut-off of reliability 1998). It means that only the reliabilities

0.70 are acceptable. Since wording or

phrasings of some items were changed for this study, the reliability of the each measure is assessed. The results showed that all ten sets of variable obtained are acceptable reliabilities. Whereby, they were the variables measuring SMS, Internet forum, WOM, price discount, buy-one-free-one, free gift, brand attitude, brand switching, purchase acceleration and product trial. These ten sets of variables had Cronbachs alphas larger than 0.70. Therefore, it is said that the variables used in the questionnaires for the survey is highly correlated and reliable for the research. The results of reliability testing are shown in Table 4.6. Table 4.6: Reliability Test Scale Perception toward SMS Perception toward Internet forum Perception toward WOM Perception toward Price Discount Perception toward Buy-One-Free-One Perception toward Free Gift Brand Attitude Brand Switching Purchase Acceleration Product Trial (N= Items) 7 6 9 5 6 5 11 6 6 6 Cronbachs Alpha ( ) 0.925 0.897 0.903 0.878 0.908 0.879 0.931 0.824 0.823 0.822

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4.7

Hypotheses Testing

Figure 2: Consumer Responses to Marketing Communications with hypotheses

E-Communications -Short Messaging Service (SMS) - Internet forum

H1, H2

Word-of-mouth (WOM)

Brand Attitude

H7

H8

Consumer Response - Brand switching - Purchase acceleration - Product trial

Sales promotions: - Price discount - Buy-one-free-one - Free gift

H3, H4, H5,H6

Adapted from: Shi, Z.S., Cheung K. M., Prendergast G. (2005), Behavioural response to sales promotion tools: A Hong Kong Study, International Journal of Advertising, 24(4), 467-486.

In this study, several hypotheses were developed to test the direct effect of marketing communication channels on consumer response which is measured by asking respondents to state the opinion if the use of SMS advertisement a mean of communication, participation in Internet forum as an importance platform to share information, to ask someone about a product or service that the respondent is considering to purchase, opinion about sales promotion and how do the respondent reacts to marketing communication.

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H1 There is a positive relationship between SMS advertisement and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial.

Pearson Correlation showed that SMS advertisement has a positive significant relationship with brand switching (r=0.347, F=74.88, p<0.01), purchase acceleration (r=0.370, F=87.09, p<0.01) and product trial (r=0.307, F= 57.06, p<0.01). Thus, the research findings support H1.

H2 There is a positive relationship between participation in Internet forum and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial.

Pearson Correlation showed that Internet forum has a positive significant relationship with (i) brand switching (r=0.258, F=39.07, p<0.01), (ii) purchase acceleration (r= 0.127, F=9.01, p<0.01) and (iii) product trial (r=0.188, F=19.96, p<0.01). Thus, the research findings support H2.

H3There is a positive relationship between WOM information and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial.

Pearson Correlation showed that WOM has a positive significant relationship with (i) brand switching (r=0.301, F=54.78, p<0.01), (ii) purchase acceleration (r= 0.298, F=53.24, P<0.01) and (iii) product trial (r=0.298, F=53.35, p<0.01). Thus, the research findings support H3.

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H4 There is a positive relationship between price discount and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial.

Pearson Correlation showed that price discount has a positive significant relationship with (i) brand switching (r=0.322, F=63.46, p<0.01), (ii) purchase acceleration (r= 0.220, F=27.74, P<0.01) and (iii) product trial (r=0.162, F=14.69, p<0.01). Thus, the research findings support H4.

H5 There is a positive relationship between buy-one-free-one and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial.

Pearson Correlation showed that buy-one-free-one has a positive significant relationship with (i) brand switching (r=0.443, F=133.58, p<0.01), (ii) purchase acceleration (r=0.483, F=166.92, p<0.01) and (iii) product trial (r=0.396, F= 102.18, p<0.01). Thus, the research findings support H5.

H6 There is a positive relationship between free gift and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial.

Pearson Correlation showed that free gift has a positive significant relationship with (i) brand switching (r=0.419, F=116.40, p<0.01), (ii) purchase acceleration (r=0.487, F=170.54, p<0.01) and (iii) product trial (r=0.410, F= 110.72, p<0.01). Thus, the research findings support H5.

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Linear Regression showed that six independent variables (SMS, Internet forum, WOM, price discount and free gift) were significantly related to three dependent variables: (i) brand switching with multiple R= 0.558, R= 0.311, F-Ratio of 40.88 at 6 and 543 degrees of freedom, (ii) purchase acceleration with multiple R= 0.599, R= 0.359, F-Ratio of 50.73 at 6 and 543 degrees of freedom and (iii) product trial with multiple R= 0.525, R= 0.276, F-Ratio of 34.47 at 6 and 543 degrees of freedom is statistically significant at the p<0.001 level.

H7 There is a positive relationship between SMS, Internet forum, WOM, price discount, buy-one-free-one and free gift and brand attitude.

Pearson Correlation showed that SMS, Internet forum, WOM, price discount and free gift has a positive significant relationship with brand attitude (r=0.346, F=12.27, p<0.01). Therefore, the research findings support H7.

H8 There is a positive relationship between brand attitude and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial.

Multiple Regression Analysis was conducted and the results of regressing the six independent variables and one intervening variable against (i) brand switching show (R=0.558, R=0.311) is the correlation of the six independents and one intervening variables with the dependent variable are taken into account. The F-Ratio of 35.00 at 7 and 542 degrees of freedom is significant at the 0.001 level. Thus, the research finding supports H8 (i). Among the six independent variables, buy-one-free-one is the most influence in brand switching. Results show that the highest number in beta is

78

buy-one-free-one (0.206), which is significant at the 0.001 level. The summary of multiple regression analysis shows the results of regressing the six independent variables and one intervening variables against to brand switching can be seen in Appendix 2 Table 4.7a.

Multiple Regression Analysis was conducted and the results of regressing the six independent variables and one intervening variable against (ii) purchase acceleration show (R=0.599, R=0.359) is the correlation of the six independents and one intervening variables with the dependent variable are taken into account. The F-Ratio of 43.41 at 7 and 542 degrees of freedom is significant at the 0.001 level. Thus, the research finding supports H8 (ii). Among the six independent variables, buy-one-freeone is the major influence in purchase acceleration. Results show that the highest number in beta is buy-one-free-one (0.283), which is significant at the 0.001 level. The summary of multiple regression analysis shows the results of regressing the six independent variables and one intervening variables against to purchase acceleration can be seen in Appendix 2 Table 4.7b.

Multiple Regression Analysis was conducted and the results of regressing the six independent variables and one intervening variable against (iii) product trial show (R=0.526, R=0.276) is the correlation of the six independents and one intervening variables with the dependent variable are taken into account. The F-Ratio of 29.55 at 7 and 542 degrees of freedom is significant at the 0.001 level. Thus, the research finding supports H8
(iii).

Among the six independent variables, free gift generally

influences the most in purchase acceleration. Results show that the highest number in beta is free gift (0.235), which is significant at the 0.001 level. The summary of

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multiple regression analysis shows the results of regressing the six independent variables and one intervening variables against to purchase acceleration can be seen in Appendix 2 Table 4.7c. Table 4.7: Summary on Hypotheses Test
Hypotheses Result Supported

H1 There is a positive relationship between SMS advertisement and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial. H2 There is a positive relationship between participation in Internet forum and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial H3 There is a positive relationship between WOM information and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial. H4 There is a positive relationship between price discount and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial. H5 There is a positive relationship between buy-one-free-one and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial. H6 There is a positive relationship between free gift and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial. H7 There is a positive relationship between SMS, Internet forum, WOM, price discount, buy-one-free-one and free gift and consumers attitudes towards the brand. H8 There is a positive relationship between brand attitude and consumer response: (i) brand switching (ii) purchase acceleration (iii) product trial.

Supported

Supported

Supported

Supported

Supported

Supported

Supported

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CHAPTER 5

CONCLUSION AND RECOMMENDATION

This chapter includes a summary of the present study and with a discussion of the findings drawn from these findings that answer the research problems. Subsequently, implication for researchers and marketing practitioners and limitations of the study are examined. Suggestions for future research are highlighted and this study is closed with conclusion of the thesis.

5.1

Discussion

This study investigates the consumer responses to marketing communications. The results of this study suggest that SMS, Internet forum, WOM, price discount, buyone-free-one and free gift do lead to brand switching, purchase acceleration and product trial.

5.1.1

SMS Advertisement and Brand Attitude to Consumer Response (Brand Switching, Purchase Acceleration and Product Trial)

Although results show there is a positive relationship in between SMS advertisement with brand attitude, brand switching, purchase acceleration and product trial but SMS advertisement is not a highly interactive source of information. Lee et al. (2006) find that mobile advertising was not receiving an enthusiastic welcome from the cellular users. This lack of consumer interest could be witnessed from the low average scores on motives, attitudes, intentions and actions (Lee et al., 2006).

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Barutu (2007) investigates consumers attitudes towards mobile advertising, entertainment, discount coupons and shopping. The results of this survey indicated that apart from mobile shopping, consumers have positive attitudes towards mobile advertising, entertainment and discount coupons. Barutu (2007) claims that priceconscious customers have more positives attitudes towards mobile advertising, discount coupons, banking and mobile marketing tools overall. Mobile marketing is a branding tool, it can use to generate brand loyalty or trust to consumers. For example, Wella, a leading seller of hair cosmetic and fragrances in over 150 countries, conducted a campaign that sent a message with a kiss to all their clients that gave permission to receive SMS message from Wella (Dickinger et al. 2004, p.4). The customers liked the Wella kiss so much that they forwarded it to their friends (Dickinger et al. 2004). Warner Brothers Movie World in Germany, for example, invited customers to send a certain message to three friends as quickly as possible, asking them to forward the message to Warner brothers. The first five teams to complete the cycle received free ticket to Warner Brothers Movie World entertainment park (Mind Matics, 2001). These two examples from previous research strongly support that SMS advisement has led consumers to brand switch, accelerate their purchase and try a new product. Furthermore, results show no significant influence consumer response between respondents gender, age, educational level and household monthly income to marketing communication. This findings also supported by Barutu (2007); SMS advertising has no significant differences between respondents gender, age, income, education, employment, shopping orientation toward mobile advertising.

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5.1.2

Internet forum and Brand Attitude to Consumer Response (Brand Switching, Purchase Acceleration and Product Trial)

Results show that Internet forum has a positive relationship in between brand attitude, brand switching, purchase acceleration and product trial. Ko et al. (2005) conclude that consumers who engage more in human-human interactions evaluate the website more positively leads to positive attitude toward the brand and purchase intention. Because the virtual community can enhance participants sense of belonging and loyalty toward a brand or corporation, more and more marketers are actively participating in the establishment of chat rooms, message boards and discussion forums to promote their brand or corporation (Chiou and Cheng, 2003; Wellman and Gulia, 1999). This strongly support that Internet forum has led consumers to brand switch, accelerate their purchase and try a new product. In this study, results explain that Internet forum is a highly interactive source of information consumers relied on/ are using for decision making before or have purchased computer/ notebook and digital camera. Wu (2002) discovers that the high involvement degree cluster often purchased books via the Internet; the low involvement degree clusters purchase rate for groceries purchased through Internet marketing. Moreover, in this study results show age (17 to 26 years old- 36.7% and 27 to 36 years old- 38.5%) of the respondents do influence the consumers response to Internet forum. Slack et al. (2008) prove that respondents in the age group of 26 to 40 years old use more of the festival website and online forum to purchase theatre ticket.

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5.1.3

WOM and Brand Attitude to Consumer Response (Brand Switching, Purchase Acceleration and Product Trial)

In this study, results also indicate that WOM has a positive relationship in between brand attitudes, brand switching, purchase acceleration and product trial. In the modern age, marketers start to use viral marketing (WOM marketing) to create brand awareness for example a quick-service restaurant chain Burger King launched www.subservientchicken.com a site that allowed users to issue commands to a guy dressed in a chicken suit and enjoyed 20 million hits. Nobody knew if Burger King tied the chicken to a sales increase, but it did wonders for brand awareness (Ferguson, 2008). Wirtz and Chew (2002) find that high deal prone consumer were more likely to generate WOM. This could be because high deal prone consumers tend to buy more brands, and they switch brands more frequently (Webster, 1965). Results reveal WOM is a highly interactive source of information consumers relied on/ are using for decision making before or have purchased on musical performance, movie or restaurant. Slack et al. (2008) prove that, by far the most used channel of awareness, information, choice and even purchase of theatre ticket is Word-of Mouth. Another example claims that WOM factors used to influence customers within restaurant business (Ibraimovska and Weremko, 2007). Besides that, results show that age (17 to 26 years old- 36.7% and 27 to 36 years old- 38.5%) of the respondents do influence the consumers response to WOM in this study.

5.1.4

Price Discount and Brand Attitude to Consumer Response (Brand Switching, Purchase Acceleration and Product Trial)

Results reveal that Price Discount has a positive relationship in between brand attitude, brand switching, purchase acceleration and product trial. Research on price promotion has consistently reported high sales effect and high price elasticity for brands which 84

are on promotion (Blattberg et al., 1995). Studies have shown that price promotions significantly affect stock piling and purchase acceleration (Blattberg et al., 1981; Neslin et al., 1985). Shi et al. (2005) report that price discount was rated more effective in inducing product trial. Similarly, Yoo et al. (2000), base on structural equation model, suggests that frequent price promotions, such as price deals are related to low brand equity, where as high advertising spending, high price, good store image and high distribution intensity are related to high brand equity. Results verify that price discount is a highly interactive source of information consumers relied on/ are using for decision making before or have purchased on computer/ notebook (37.30%), digital camera (35.30%), MP3 player (38.20%), groceries, household and personal care products (57.50%, 63.30% and 57.30% respectively). Likewise, results show that gender does influence the consumers response to price discount. In this study, male show greater used of price discount. Kwon and Kwon (2007) find that women use coupons more, while man show greater use of rebates.

5.1.5

Buy-One-Free-One and Brand Attitude to Consumer Response (Brand Switching, Purchase Acceleration and Product Trial)

Results show that buy-one-free-one has a positive relationship in between brand attitude, brand switching, purchase acceleration and product trial. Shi et al. (2005) prove that buy-one-get-one-free offers are most in inducing purchase acceleration. Gilbert and Jackaria (2002) also confirm that two of the variables, brand switching and purchase acceleration were found to be significantly influence by buy-one-getone free offer. According to Gilbert and Jackaria (2002), pack with buy-one-get-onefree may not increase brand awareness before trial purchase because the customer will only come across the product once in the store, however, if the promotion is

85

noticeable it will facilitate brand recognition and brand recall for future purchases. Results show that buy-one-free-one is also a highly interactive source of information consumers relied on/ are using for decision making before or have purchased on computer/ notebook (37.30%), digital camera (35.30%), MP3 player (38.20%), groceries, household and personal care products (57.50%, 63.30% and 57.30% respectively).

5.1.6

Free Gift and Brand Attitude to Consumer Response (Brand Switching, Purchase Acceleration and Product Trial)

Results show that free gift has a positive relationship in between brand attitude, brand switching, purchase acceleration and product trial. In the previous study, Datta and Dastidar (2008) show that free gift with purchase (premium) will encourage purchase of product (brand switching and purchase acceleration), build loyalty, promote products in off-season, and encourage customers to trial new product. With regard to free sample, another important promotional tool often used by firms, marketing managers recognize the importance of product trial and direct behavioural experience with a product; hence they often mail free samples of products to consumers so that consumers can try the products for themselves, rather than just hear about the product (Kardes, 1999). The results were consistent with Simonson et al. (1994) proposition that the attractiveness of the premium is an important factor in predicting brand choice in sales promotion. Astous and Jacob (2002) also support that the more positive the consumer attitude toward the brand, the more consumer reactions to a premium-based promotional offer. Results show that free gift is a highly interactive source of information consumers relied on/ are using for decision making before or have purchased on computer/ notebook (37.30%), digital camera (35.30%), MP3

86

player (38.20%), groceries, household and personal care products (57.50%, 63.30% and 57.30% respectively).

Lastly, the findings of the research show that majority of the respondents find Internet forum, WOM, sales promotion (price discount, buy-one-free-one and free gift) have a highly interactive source of information. Most of the respondents find that sales promotions are the major source of information that they relied heavily on before they have purchased or about to purchase on computer/notebook, digital camera, MP3 player, groceries, household care and personal care products. Follow by WOM is the second highly interactive source of information for consumers to rely on before they have purchased or about to purchase on musical performance, movie and seek for restaurants. The Liner Regression results show that buy-one-free-one is the most influence in brand switching and purchase acceleration. Whereas, results also reveal that free gift is the most influential in product trial.

5.2

Managerial Implications

Marketers can use the findings from this thesis to develop better understanding of consumer response to marketing communications channels particularly in sales promotions and perhaps indirectly to develop more profitable and effective promotion strategies and mode of promotions. Interesting finding are the following:

Results show that SMS advertisement significantly less affect than all other media such as Internet forum WOM, perception of price discount, buy-one-free-one and free gift. This mainly because a number of issues have continued to plague the digital communications, such as fraud, invasion of privacy, spam and a proliferation 87

attributes of annoying/objectionable and disruptive advertising messages. In another word, traditional media have retained many of their historically favoured attributes, notably trust and reliability. Therefore, in order to have a successful digital communications advertisement (SMS), marketers should consider the attributes that it should be informative, appropriate (i.e., properly targeted), difficult to ignore, but not annoying.

It is generally believed that the adoption and use of the Internet forum and mobile phones are more prevalent among younger people. If this is the case, it might be expected that younger people in both the consumer and business segments are more likely to act on an offer sent by SMS or exchanging information via Internet forum. However, this study does not find this. This could be due to the target group, which is limited to those that have Internet access and a mobile phone. This has the effect of capturing respondents that are tech-savvy. Hence, the sample is more homogenous with respect to usage of digital technology, which is the likely reason we do not see any differences across the age range. But this makes the findings even more remarkable: if such a tech-savvy group is so conservative in their preferences of media for marketing communications, favouring mass media and printed direct media, the likelihood is that the general population is even more conservative in their tastes.

Internet forum, WOM and sales promotions (price discount, buy-one-free-one and free gift) are highly effective in producing immediate and positive impacts on consumer response. Sales promotions are the highly interactive source of information consumers relied on/ are using for decision making before or have purchased on computer/ notebook (37.30%), digital camera (35.30%), MP3 player (38.20%),

88

groceries, household and personal care products (57.50%, 63.30% and 57.30% respectively). WOM is a highly interactive source of information consumers relied on/ are using for decision making before or have purchased on musical performance, movie or dining in a restaurant. Higher levels of purchase quantity per consumer (buy-one-free-one) may favour sales value and Free Gift is best promotional tools to introduce new products and product trial.

5.3

Recommendation for Future Research

The limitation discussed above suggests several areas for future research. This study takes a close look at the effects of marketing communications channels especially on promotion strategy toward consumer response. These effects are studies across six marketing communications channels with different types of promotions and types of consumer responses. This in-depth approach has led both to a number of new and interesting insights, as discussed previously. But, as most studies, this study also has limitation.

Firstly, the number of respondents, other mode of marketing communication medium and the number of product categories. Perhaps if the sample size was increased and carried out in diverse geographic areas in Malaysia, it would be able to reflect a wider range of regional economic and validated the finding in this study.

Furthermore, there is still an urgent need to investigate the impact of other promotional tools on brand switching, purchase acceleration and product trial because in this area it is still inconclusive. Therefore, beside the six specific types of marketing communications channels on promotion that were examined in this study, 89

future research may choose to examine other types of marketing communications mode like e-auction, on-line shopping (i.e. eBay), e-mail advertisement, mobile banking or other types of sales promotions like contests, in-store display, coupon and refund on brand switching, purchase acceleration and product trial. In addition, studies that utilize data compiled by retailers or service providers that track buying and sales promotion participant habits across various tools would add much value since it is based on factual data rather than perceptions.

As Malaysia is a multi-racial country, a study on whether there are differences in influencing factors emphasized by different races could be interesting and enlightening for marketers in Malaysia.

Finally, further research could use longitudinal data to examine the relationships between consumers response and marketing communications-choice decision. This longitudinal approach could enhance the understanding of the impact of consumer perception and attitudes as well as demographics on their response. The approach can help reveal how these factors may change in the evolution of the type of marketing communications channels success.

90