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Chapter 1


This chapter introduces the topic of the research and explains the research questions and theories.
The research questions are also indicated in this chapter. Motivation of the research is explained
to ensure that the readers understand why this particular product was selected. Independent and
dependent variables are then identified. The same is followed by the methodological framework
followed in the research. The major terms are then defined, and the same are delimitation and
limitations of the study are then analyzed.
1.1 Introduction and Background
We all have heard the fact that the customer is the king. The reason for this statement is because
it is the customers choice which decides whether a product will sell or not. But how does the
customer decide what product to purchase? This is one question which forms the basis of all
marketing activities across the worldbe it the advertising and promotion, the placement of the
product, product type itself or the price of the product. Each marketer perceives the answer to
this question in their own manner and then decides upon the features of marketing accordingly.
A lot of research has been done in answering this question for various products which are
available in the market, but the research in the area of high technology product is lacking. The
problem becomes more aggravated in case of the high technology based product. There are two
reasons for this major lack of research in the marketing of the high technology products:

The first and foremost reason for this is the product itself. In the current market where
the scientific discoveries and inventions happen every day, the product specifications
keep on changing. While earlier the high technology products were developed solely
for the utilitarian purpose of fulfilling a single need, the products in current days are

more advanced. They provide the multiple solutions to various issues associated with
the products, and like humans, are more prone to multitask. Thus caging them in a

simple product framework is not entirely feasible.

The second reason for this is the marketing practices. The current marketing practices
are more likely to focus on the generalization of the product. If not the generalization,
the current practices try to simplify the technical details associated with the product
so much that the product end up being an abstract version of itself in the promotions.
Moreover, rarely does the marketing focus on the applicability of the product in
different kind of areas. This means, the product, even if marketed will lack the
detailed specification needed to market the product.

Thus it can be clearly seen that to rightly market the high technology products, there is a need to
develop a specialized system which focuses on the product itself, rather than focusing on the
features suitable for non-technical or general products. Even though the theories behind
development of marketing will be same, there is a strong need to develop a specialized marketing
system for such product. This need has also been recognized by many researchers as well who
believe that focused marketing plans need to be developed for different industries.
The first step of developing such kind of tailor-made marketing program is to understand the
customer selection procedure, especially in case of high technology products where the research
in this area is quite limited. Earlier the purchase used to be a decision to satisfy the need, but in
the current time the reasons for making the purchase are many. The purchase, apart from the
need, is guided by the brand, by the prestige associated with the product, and by the social value
of the product as well.

Customers purchase decision is the result of two kinds of impetusthe first impetus is the
marketing practices and the second is the impetus of the external environment like the political
environment, the economic environment, the family conditions etc. These impetuses are then
analyzed by the customers before making the final purchase decision. These impetus are defined
by the different factors like the culture, perception of the customers, motivation, social groups,
and social classes. The customers are also influenced by various issues like normative influence,
information influence, and value expressive influence. The customers purchase decision is also
made through different steps which involve recognition of the problem, searching the
information, evaluation of alternative, purchase decision and post purchase behavior. The
customers undergo through the process and decide the products based on these attributes.
The second factor which influences the customers decision is the attributes of the products. Thus
it is imperative that the companies find the attributes that dictate the selection of the product
among the customers so that the product marketing can be tailored according to these selection
procedures. Knowing these key attributes will help the companies in developing the program
which will educate the people and emphasize on these key points so as to appeal to the
customers. Knowledge of these attributes will help in developing the bundles of attributes
corresponding to the key specialties of the product for the targeted consumers and to educate
customers accordingly. Such an approach to evaluate the groups of attributes from a comparative
perspective would help marketers to laser focus their efforts on developing and executing
marketing plans and making them valuable to their targeted audiences. Such an approach to
evaluate the groups of attributes from a comparative perspective would help marketers to laser
focus their efforts on developing and executing marketing plans and making them valuable to
their targeted audiences.

This is what this paper tries to achieve. The paper tries to find the bundle of attributes that
influence the purchase decision of the consumers. These bundles will be studied by the
interpretation of the results of the analysis performed in the study itself. Such a model will
guarantee the sustainability of the value perceived by the consumers and to help differentiating
the product offerings from the competitors actively operating in the same product category. Last
but not least, such a framework is intended to contribute to the assessment of prospective and
accredited and/or qualified attributes throughout the process of establishing the product offering.
The value of bundling the attributes and evaluating the product offerings accordingly is not only
important due to the critical role in the fast changing market of high technology products but also
their significant catalyst function in developing innovative auxiliary products and services. The
knowledge of the customer preference can guide the innovation process in the companies and
help in development of the product which has the features that the customers want.
1.2 Statement of Problem
The focus of this research is to develop the set of attributes which help the customers in the
purchase decisions. Thus the statement problem of the research can be stated as investigation of
the purchasing behavior of the customers with respect to the high technology products and
establishment bundled attribute relationships which affects these purchase decisions of these
high technology products. This investigation is done with the case study of the smart phones
which are then further extended to the other high technology products. It is believed that the
process of selecting a high technology based phone will be similar to that of the purchase of
other high quality products. In order to simplify the research process, the main problem
statement is divided into the research question. Further research is carried out in order to find the
answers to the question. The selection of right research question is essential as these questions

only will present the answer to the statement problem indicated above. Thus keeping the
importance of research question and enormity of the statement problem in mind, the research is
divided into a few research questions. The research will focus on the following research

What is the process of decision making in case of the customers purchase of high


technology products?
What are the various attributes which guides the customers purchase decision?
Can these decisions stand the sustainability test and help in deciding the future


marketing strategy of the product?

Are there certain attributes which are more important than the others for the


Does these factors or attributes change with the change in the customers experience


with the past technological products?

Is there any sequence which can guide the marketing process in terms of the
customers preference of the attributes?

With the above question as the guiding compass for the research, the objectives of the research
can be listed as:

To find the attribute bundle which impacts the purchase decision of the customers in


terms of the high-technology products.

To find out the sustainability of this attribute bundle over the period of time.
To find the variations in the importance of the attributes as per the experience of the


customers with the handling of the high technological products

To understand if these bundles can be utilized for development of future product.

1.3 Motivation of Research

The motivation of the research comes from one of the discussions with a friend of the researcher
who is planning to start a new business of developing the lathe machines and is unable to find the
solution for the marketing concerns associated with the business.
During the course of the discussion, it was found that there were no specialized papers available
over the attributes or the marketing philosophy of the high tech products. While product
marketing management and product development are widely practiced by these firms and other
profit-oriented organizations, the implementation of these marketing practices in the industries,
where high technology sets the rules of the game for product and service experience offerings, is
not commonly exemplified due to the absence of a comprehensive framework supported with
empirical data and analyses with well-defined parameters entwined to this framework. Existing
research explains the criteria to measure and assess the purchasing behavior of consumers for the
product categories from a conventional perspective. But in case of high tech product that alone is
not valid because there is a factor of risk involved in the process. The risk is not only Inherited
Risk, but the risk perceived by the customers and risk associated with the specific product
(Dowling &Staelin, 1994)1. Therefore, the focus in this study will be on product level instead of
the category. During the course of the research, the analyses are performed at the level of product
attributes, bundling them under the classes of search, experience, and credence as defined within
SEC paradigm; and investigating the relationship with the constructs of purchase behavior.
This perspective facilitates positioning of all attribute formations for a product offering in
relation with each other while taking consumers evaluations as the only reference point.
1Dowling, G. R., &Staelin, R. (1994).A model of perceived risk and intended risk-handling activity. Journal
of consumer research, 119-134.

Accordingly the product offering is represented by a balanceable collection of attribute

formations, each element of which can be repositioned by considering both the assessment
results and the opportunities and risks that emerge in the environment and/or brought in by that
element per se. By decomposing the product into its attribute classes and investigating the
purchasing behavior across these bundled attributes the aim is to perform an indepth analysis of
the relationship between these constructs and provide useful insights on it to help marketers drive
to better focused activities to their targeted audiences. Especially, strategies needed to aid
consumers in decision making when a product is high in experience or credence attributes.
Since it is not possible for the researcher to delve into all the high technology products available
in the market, the focus of the current research is on smartphones. The phones have changed a lot
from their past counterparts. While earlier the phones used to be utilized only for the purpose of
communication, the connection with network and camera has changed the game. The phones
have become smarter as smartphone and camera phones. This digital convergence of
intermingling of two or more assets has resulted in development of smartphones2. Smartphones
are the high tech devices which are common among public, and hence it is easier to find the
research data for the same. Moreover, these are the devices which are well-marketed, and hence
it is easier to find the associated past research on the subject. Thus case study of smart phones is
further conducted in this research thesis.
In serving the aim of investigating the purchasing behavior and bundled attribute relationships of
high technology products over the case studied as smartphones; the fundamental inquiry within
the study is directed towards extending the grouping of various attributes of a high technology
2Mohr, J. J., Sengupta, S., & Slater, S. F. (2009). Marketing of high-technology products and
innovations.Pearson Prentice Hall.

product offering concept and identifying the strength and effectiveness of these groups of
attributes on the sub-processes of purchasing starting with the investigation of the alternatives,
continuing with the decision making on purchasing, and finalized with the experiencing, using
and promoting the high technology product offering.
1.4 Independent and Dependent Variables Associated with Research
The research involves the study if independent and dependent variables to understand whether
the relationship between the two variables can be inferred through the research or not. The
independent variables used in the process are:

Customers Associated Factors: These factors does not have any relation with the
product and are mainly associated with the consumers only. The factors include the
following major sub factors for the purpose of the research.
a. Demographic factors: The age, profession, marital status, children, employment,
income group and social status are considered within this factor.
b. Usage factors: The second subfactor which the research considers is the usage.
The questions regarding the usage of mobile are asked. Different activities are
listed and the users have to identify what is their most preferred work on the
mobile phones. The second set of lists indicates the list of activities that can be
performed using the smart phone and instructs the respondent to identify if the
same has been performed by the respondent or not.
c. Social Media Responses: The third set of the questions focus on social media
engagement of the respondents.
d. Technology Adoption Attitude: The next step focuses on the understanding how
easily are the respondents ready to adopt a new technology in the market and what
is the customers attitude towards this new technology.

e. Smartphone Usage: The last section of the survey focuses on the current brand of

the phone and the customers loyalty towards the current brand.
Attributes: The second set of independent variables considered in the questionnaire is
the attributes of the phone. The different attributes are divided based on search,
experience and credence.

Thus the independent and dependent variable chart for the same can be indicated as follows:

nt Factors



Figure 1: Research's Independent and Dependent Factors

1.5 Research Hypothesis

In order to answer the questions, the study and analysis is carried out with the help of the
hypothesis. Following hypothesis are used to test the attributes choice of the customer regarding
the high tech product, with the case study of the smart phone.

H1. At least three distinct classes of product attributes will be found in consumers response to
whether or not they can evaluate attributes before and after consumption. One of these classes
will represent search attributes, another experience attributes and the last credence attributes.
It is generally believed that the consumer selects the product after the selection of the attributes
of the products. SEC or the Search, Experience and Credence theory is one of the theories
associated with the product classification. This hypothesis believes that the product attributes
play an important role in the purchase decision of the consumers. The hypothesis believes that at
least three products attributes help the consumer in making the decision about the product. These
attributes belong to each of the search, experience or credence inputs.

H2. Consumers consider credence attributes more important than experience attributes, and
experience attributes more important than search attributes.
This hypothesis believes that credence attributes play a bigger role than the experience attributes
while making the purchase decision. In the same way experience attributes are more important
for the consumer as compared to the search attributes.

H3. In future purchase decisions, credence attributes have stronger (more) positive/negative
effect than experience attributes, and experience attributes have more impact than search
This hypothesis believes that the purchase decision varies from the repurchase decision. During
repurchase decision, the credence attributes play a more important role than the experience

attributes. Similarly the experience attributes play a more important role than the search
attributes during the repurchase decision.

H4a. Consumers who are less familiar with technology consider a great number of attributes as
credence attributes than consumers who are more familiar with technology.
The consumers who know technology are more dependent upon the experience and search
attributes as compared to the people who are less familiar with the technology. Thus these
consumers are less dependent on the credence attributes.

H4b. Consumers who are less familiar with technology consider a smaller number of attributes
as search attributes than consumers who are more familiar with technology.
Another hypothesis based on the past hypothesis is that customers who are unfamiliar with the
technology are not aware about the search attributes as compared to the people who know the
technology. The people who know technology can easily find the replacement of the other
products as compared to those unknown with the technology.

H5a. For consumers who are less experienced with technology, search attributes will have the
strongest effect on future purchase decisions.
Search attributes become more important for the people who are less experienced with the
technology while making the purchase.

H5b. For consumers who are more experienced with technology, credence attributes will have
the strongest effect on future purchase decisions.
Credence attributes are perfect choice of the purchase decision for the people aware with
technology and play more important role than the search or the experience attributes.
H6. The level of importance increases from search to experience and to credence attribute
bundles in purchasing decision of consumers for smartphones.
This hypothesis assumes that the SEC attributes can be ranked in terms of importance. The order
for the same during the purchase decision ranges from search to experience to credence.
1.6 Methodological Framework in Brief
Data are collected in three phases. The first two phases were performed for identifying attributes
while the last phase has utilized the most representative attribute bundles for investigating the
relationship between the purchase intention and these bundles obtained by categorizing the
attributes under search, experience, and credence.

In the first phase, smartphone product attributes are listed through secondary
research. Smartphone packaging, advertisements, technology forums, blogs, expert
sites, and magazines are investigated and interviews had been done with the experts


within this phase. As a result, an initial list of attributes is generated.

In the second phase, smartphone product attributes are discussed with focus groups to
understand which attributes matter to consumers when they make purchase decisions.
Accordingly, the list from the first phase is updated and expanded.


As a third step, a card sorting exercise has been performed. In this exercise, each
product attribute is listed on a separate card and participants are asked to sort these
cards into search, experience, credence, and other categories.

For the classification to be based on the SEC framework, below given definitions drawn from
the literature are used (Nelson, 1970; Darby & Karni, 1973; Nelson 1974; Ford et al., 1988;
Srinivasan & Till, 2002):

Search attributes are the ones that can be accurately evaluated and verified by the
consumer prior to purchase using prior knowledge, through direct inspection, or
information acquisition from normal channels and/or readily available sources with

reasonable effort.
Experience attributes are the ones that can be accurately evaluated and verified by the
consumer only after the use of the product for a period of time that is relatively short

in comparison to its total usage life.

Credence attributes are the ones that can only be verified by the experts and difficult
to validate for the consumer even after the actual use of the product since the lack of
technical expertise and/or very high costs associated with obtaining such knowledge.

In order to avoid order bias, the definitions for the attribute bundles are presented in a random
order of credence, search, and experience. By the means of this exercise, some attributes are
eliminated and a classification is obtained with a smaller list of attributesleft. Participants are
also asked to rank the importance of each attribute card they sort based on their purchase
decisions. By doing so, insights on the importance of each attribute sorted are also gained.
The respondents are also asked questions about their sex, age, marital status, income, occupation
and industry, education, and ownership of a smartphone for the time being in order to gather

demographic information and investigate if the personality, demographics and use variables can
also be related. The sampling design for the last phase had follow the non-random/nonprobability principle of snowball, where the sample was selected using network starting with a
relatively small group of individuals then asking the group to identify and invite other people
into the study
1.7 Implications of the Study
Though several studies seeking to explain the relationship between the product classification
based on SEC framework and purchasing of products categorized, a research that concentrates on
the attributes of high technology products identifying and comparing the effects of these
attribute within groups formed based on the SEC framework on evaluating the purchase intention
of consumers for such product offerings specifically the exceedingly convergent ones like
smartphones is not available.
From managerial perspective, findings of the research will extend the knowledge and add to the
understanding of the subject of high technology product management and its application to
marketing practices. The outcomes of this study will be useful in planning and execution of
advertising with regards to the role loaded to it as appropriately informing consumers about the
products by the information economists. It is important to note that among the numerous models
for the product classification, the selection of SEC framework is intentional corresponding to the
referrals made in the literature for it being the most intensifying framework for advertising-asinformation perspective (Ford et al., 1988; 1990) and its operability to the product attributes.
Another managerial implication of the study will be in the area of product positioning.
Considering the difficulties arising in positioning and placement of the continuously evolving

high technology products (i.e. smartphones) for the relevant target audiences, the outcomes of
the in-depth analyses of the relationship between the bundled attributes of the product and
consumers purchasing behavior will be providing valuable insights on where to put emphasis in
positioning plans and focus on the factors that have impact and contribution to the successful
representation and enrichment of the perceived value of the high technology products in channel.

1.8 Definition of terms

1) Marketing: AMA defines marketing as the process of planning and executing the
concept, price, promotion and distribution of the product, including both goods and
services, to satisfy the customers and meet the objectives set by the organization.
Thus this definition identifies that there are four aspects of marketing: the price, the
product itself, the promotion and the way it is distributed. The main aim of the marketing
is to satisfy the customers by providing them sufficient information and to meet the goals
which the organization has set(Murphy & Enis, 1986). 3
2) Product: Product can be defined as any physical product like bread, TV, refrigerator etc.
that can be offered to public for consumption. For the purpose of the paper, we will be
using Phillip Kotlers definition of the product, where he defined the product as
something that can be offered to the customers for attention, consumption, acquisition or
use in order to satisfy their wants or needs. 4


3) Consumer: Dictionary defines consumer as someone who purchases the goods or services
for his or her own personal use5. A consumer can be an individual or an organization.
a) Personal Consumers: The personal consumers are those who purchase the products for
their personal usefor themselves, for their home or as a gift for the friend.
b) Organizational Consumers: The organizational consumers are those businesses which
buys product for smooth running of the organizations. These include the government
organizations, the profit and non-profit organizations as well. 6
4) Consumer Buyer Behavior: Kotler defined the consumer buying behavior as the way the
final consumer behaves before buying the products. These consumers are the people who
purchase the goods and services offered for their own use. Together, these consumers
make the market for the product and the service7.
5) Consumer Purchasing Decisions:. The marketing strategy is successful if the customer
sees the product/service The consumer purchasing decision is the final decision the
consumer makes before making the purchase of the offered goods and service. Hawkins
defined it as the process which is the pathway between the market strategy adopted by the
firm and the final output of that marketing strategyas something to satisfy his needs and
understands the product capabilities and features. Purchase decision is when after
comparing all the features, the consumer decide to purchase the product and in the end be
satisfied by it.8



7Kotler, P., & Armstrong, G. (2010). Principles of marketing.pearson education.

6) Minor New Purchase - these purchases represent something new to a consumer but in the
customers mind is not a very important purchase in terms of need, money or other reason
(e.g., status within a group).
7) Minor Re-Purchase - these are the most routine of all purchases and often the consumer
returns to purchase the same product without giving much thought to other product
options (i.e., consumer is brand loyalty).
8) Major New Purchase - these purchases are the most difficult of all purchases because the
product being purchased is important to the consumer but the consumer has little or no
previous experience making these decisions.
9) Social Media: Social media refers to the computer related tools and platforms that help in
creating, developing and sharing the information, ideas, pictures, videos, etc. to ones
friends and followers.
10) Marketing Mix: In order to fulfill the objective desired from marketing, the firm adopts
the set of 4Psthe product, price, place, and the promotion. This is termed as marketing
mix. The decision regarding these 4Ps influences the consumer purchasing behavior and
establishes the brand image the company wants to pursue. The 4Ps involved are the
products offered themselves, the price at which the products are offered, the place and
distribution channels adopted for the sale of the product, and lastly, the kind of
promotional techniques adopted to reach the consumers. 9
11) Product Attributes: As explained above, the consumer purchases the product to satisfy
some of his needs. The product attributes are the tangible or intangible features of the
8Quester, P., Neal, C., Pettigrew, S., Grimmer, M. R., Davis, T., & Hawkins, D.
(2007). Consumer behaviour: Implications for marketing strategy. McGraw-Hill.

9http://dspace.siu.ac.th/bitstream/1532/268/1/SIUTHESOM-MBA-2007-02.pdfKotler, P., & Keller, K.

(2011). Marketing management 14th edition.Prentice Hall.

products that fulfill these needs of the customers. They are mainly of five types: the
quality level, the features, the styling, brand name and packaging of the product. 10
12) High Technology Products: High Technology Products are the products which use the
latest cutting edge technology and uses extensive Research and Development Activities
to develop the product. The high tech products are those which are either used for
technology intensive functions or are developed by technology intensive functions.11
13) Smartphones: Oxford Dictionary defines smartphones as phones which are
technologically advanced and those which can perform various functions of the computer
as well. These smartphones are mainly touchscreen and have internet access allowingthe
downloaded applications to run smoothly during the process12.
14) Culture: Culture can be defined as a set of values, preference, beliefs and tastes followed
by a certain group of people at any given period of time.
15) Motivation: Dictionary definition of the motivation is the reason for acting in one
particular way. Motivation in case of marketing can be defined as that internal need that
propels the consumers to make the purchase.
16) Perception: Merriam Webster dictionary defines the perception as the way in which one
notice or understand something using one of your senses. In terms of marketing, it is
defined as a way in which the customer might take the meaning out of the information
presented to them by the company.
Strydom, J. (2005). Introduction to marketing.Juta and Company Ltd.



17) Social Group: A social group is something with which an individual interacts and share
the attitude and beliefs which becomes the common point in uniting the groups.
18) Social Classes: The various factors like income, profession, education, family
background and place of residence etc. give a rise to the social classes in a society. The
social classes are mainly of three types: the Upper class, middle class, and the lower
19) Product Life Cycle: The product life cycle is the term introduced by Levitt to show how
and why the sales of the products vary in the different stages of the product life. The
product life cycle has four phases: Introduction, Maturity, Growth and Decline.
a. Introduction: The introduction phase refers to the phase when the product is new
to the market.
b. Growth Phase: During this phase, the sales of the products increases rapidly and
the product starts establishing itself in the field.
c. Maturity: Maturity occurs when the product has established itself in the market
and its sales have settled down with the customers being all aware about it.
d. Decline: The decline occurs when the products life has dried out and the sales
start dropping.
20) Marketing Mix: The marketing mix refers to the integrated marketing practices followed
throughout a company with the aim of developing mix suitable to get the attentions of the
customers and to achieve the marketing goals set by the company13.
21) Product Classification: Product classification can be defined as the method to divide the
products into meaningful categories and structured portfolio on the basis of their


22) Product Classification: Product classification can be defined as the method to divide the
products into meaningful categories and structured portfolio on the basis of their
characteristics (Brassington & Pettitt, 2006).
23) Tangibility: The tangibility as defined by the dictionary is the ability to touch or discern
a product.
Durability: Dictionary defines durability as the ability to withstand wear, pressure and
24) FMCG: FMCG or Fast moving consumer goods are non-durable goods that satisfy the
need of the consumers only once
25) Convenience Goods: Convenience goods are the products which the customer purchases
without perceiving much about the risk associated with the purchase.
26) Shopping Goods: Shopping goods are the ones for which consumer compares differing
product characteristics across items.
27) Specialty Goods: Specialty goods represent the products with unique features that attract
the consumers to the stores where they are available and ensure the purchasing without
shopping and beyond the price.
28) Unsought Products: Unsought products are the products which customers are not aware
of or if they are aware of, they never think of buying these products.
29) Brand: Brand is the name, unique design, symbol or a combination of these which is used
to develop an image associated with a product and is further used to differentiate one
product from the others.
30) Convenience: The convenience refers to the ease. In the current case, convenience is used
to define the ease with which the product is available in the market.
31) Replacement rate This rate refers to the rate at which the product is consumed and the
rate at which the product purchase will be need.
32) Gross margin This refers to the amount the customer has to spend the product for the
final product.

33) Adjustment This factor refers to the amount of customization the product might need as
per the requirement of the customers and the amount of adjustment the customer will
have to make for the same.
34) Time of consumption This measures the time it takes to consume the products.
35) Searching time This refers to the efforts the consumer might have to add for the
purchase of the products.
36) Raw materials: Materials and parts are goods that enter the manufacturers product
completely. Capital items: Capital items are long-lasting goods that facilitate developing
or managing the finished product, such as machinery (installations and equipment), and
37) Business Supplies and Services: Supplies and business services are short-term goods and
services that facilitate developing or managing the finished product; maintenance and
repair and operating supplies are included here.
38) Generic Product: The dictionary definition of the offering aiming to serve the basic
utilitarian benefit. Practically, it is what comes in the box covered by the purchasing
contract (Moore, 2002, p.108).
39) Expected Product: The minimum expectations of the consumer from the product offering.
40) Augmented Product: The value added to the offering, above and beyond the minimum
41) Potential Product: The products auxiliaries being introduced based on the consumerdemanded, specific enrichments and it is this product that constructs the brand loyalty
and drives the growth of the product (Levitt, 1981; Moore, 2002).
42) Search Attributes: These are the attributes of the products which can be understood and
analyzed before making the purchase.
43) Experience Attributes: These are the attributes of the products which can be verified only
after the purchase of the product.
44) Credence Attributes: This refers to the attributes which cannot be validated any time
during the purchase.

1.9 Delimitations and Limitations of the study

1.9.1Delimitations of the Study
The study is carried out in order to understand the customers perception towards the high
technology products. For the same purpose, smart phone is selected as the case study. Hence the
research is limited to the study of the smartphones. The research can be expanded to other high
technology products, but it cannot be guaranteed whether the results will be same or not.
The study is geographically limited to the Turkish market. It is possible that the cultural
influence might change the results during the expansion in the other geographical areas.
However the scope is limited only to the survey of the Turkish consumers, or the people present
during that time in the area of Turkey.
Moreover, the study is made with respect to the selected attributes only. The selection although
is made with the input from large number of sources, it is entirely possible that some of the
attributes are missed. Once selected, further addition of attributes is not made.

Limitations of the Study

The study, like every other study, suffers from multiple limitations. One of the limitations of all
the studies associated with the customers purchase behavior is that the research believes that the
decision of the customers is rational and can be defined by certain attributes or characteristics,
which might or might not be true in all the cases. Apart from this ubiquitous limitation, other
limitations associated with the products are as listed below:

The first and the biggest limitation of the study is that it is carried while keeping the
smartphones as the base. Smart phone is a high technology device known to all.
While this indeed improves the chances of receiving the informed answer from larger

sample base, extending the results of research based on smartphones to other

technology product has its own limitations. There are many other high technology

products which are lesser known to the public and might suffer from other limitations.
Focus group discussions and surveys are utilized as the method to obtain the response
for the survey. Since the surveys are conducted for the product like mobile phone
which has high social value and is a product identified by social status, it is entirely
possible that the respondents have changed the data to suit social expectations. The
researcher has tried to solve this dilemma by taking the responses of a large number


of respondents to get the right results.

The random sorting order is another limitation. There is no way to ensure that the
respondents have consciously participated in card sorting exercise. Although attempt
was made to select the willing participants for the exercise along with the large
number of respondents in order nullify this factor, it is still possible that the same may


have been acted out.

Confidentiality of the information is promised to all the respondents, but since the
surveyor was present while collecting the results, there is a possibility that the results


have been influenced by the presence of the researcher in the vicinity.

Last but not the least; the current research is limited to the Turkish consumers only.
Since the culture plays an important in the customers purchase decision and their
perception of the product, there are chances that the purchase scenario displayed by
Turkish respondents might be different from the responses for the survey in some
other part of the world. Thus extending the survey to the world might present this


Ethical Considerations

The report does not suffer from any ethical dilemma. The only ethical issue expected to arise are
because of the confidentiality of the information shared through the survey. To maintain the
same, the respondents are assured that the information provided by them will be kept
confidential and will not be disclosed to any third parties. The answers obtained are not stored by
the name, but are instead listed out as the number assigned to each respondents. The original
questionnaires, once the answers are listed out, will then be suitably destroyed.

Chapter 2:

Literature Review

The purpose of this chapter is to understand the various theories and lessons associated with the
customer behavior that guides the product marketing. The idea is to understand what kind of
attributes decides the customers preference in any of the purchases, with special focus on high
technology purchase of the smartphones. The literature review will focus on product
classification and customer purchase behavior and will try to present the attributes that matter to
the customers while making the purchase.
The chapter discusses the consumer behavior in terms of how the purchase decisions about the
products are taken and what the different models of the purchase decision are. The chapter also
discusses the various influences that affect the choice of the consumer front. On the product
classification front, the chapter describes the different product classification. With a small
description on each of the classification, the search-experience-credence theory is explained. In
the end the chapter discusses the various factors that influences the customers purchase behavior
with respect to the customer characteristics as well as the product characteristics.

2.1 Customers Purchase Behavior

The focus on studies based on consumer behavior is to understand the individuals choices and
influences which help them in making the decision and spend the money on certain goods and
services. Thus consumer behavior involves study of the answers to the questions like what the
consumers purchase, where the purchase is made from, the reason why the purchase is made and
the frequency of the purchase in a certain time period. For example, a product like internet
modem is launched in the market with additional features. The consumer researchers will like to
focus on the customers who are going to make the purchase and their expectations with the
product. This will help the marketer in planning the product and marketing in such a manner that
it is accessible to the potential customers and is as per the needs of the potential customers.
Kotler defined the consumer buying behavior as the way the final consumer behaves before
buying the products. These consumers are the people who purchase the goods and services
offered for their own use. Together, these consumers make the market for the product and the
service14. He further explained that most of the time the consumers are even unaware about what
factors have influenced their decision.
Solomon defines consumer behavior as the study of the processes through which each of the
individual group selects or disposes of the product, service, experience or idea which has been
developed to satisfy some his needs and desire15.

14Kotler, P., & Armstrong, G. (2010). Principles of marketing.pearson education.


Still a third definition is on by William L. Wilkie (1998) who defines consumer behavior as The
mental, emotional, and physical activities that people engage in when selecting, purchasing,
using and disposing of products and services so as to satisfy needs and desires.1617
Thus it is essential to study the consumer behavior to understand how they will respond to the
different marketing practices associated with the products. The individuals vary in terms of the
culture, attitude, and thought all over the world. The above definitions make it clear the
customers can respond differently to the different marketing activities. Thus it is essential to
understand the kind of consumer behavior the customer might exhibit. This consumer behavior is
also exhibited by the two different consumers.
c) The personal consumers are those who purchase the products for their personal usefor
themselves, for their home or as a gift for the friend.
d) The organizational consumers are those businesses which buys product for smooth
running of the organizations. These include the government organizations, the profit and
non-profit organizations as well. 18
The marketing strategy is successful if the customer sees and purchases the offered
product/service of the company. The consumer purchasing decision is the final decision the



consumer makes before making the purchase of the offered goods and service. Hawkins defined
it as the process which is the pathway between the market strategy adopted by the firm and the
final output of that marketing strategyas something to satisfy his needs and understands the
product capabilities and features. Purchase decision is when after comparing all the features, the
consumer decide to purchase the product and in the end be satisfied by it.19

Type of Consumer Purchase Behavior

Consumers are faced with purchase decisions nearly every day. But not all decisions are treated
the same. Some decisions are more complex than others and thus require more effort by the
consumer. Other decisions are fairly routine and require little effort. In general, consumers face
four types of purchase decisions:

Minor New Purchase - these purchases represent something new to a consumer but in the
customers mind is not a very important purchase in terms of need, money or other reason

(e.g., status within a group).

Minor Re-Purchase - these are the most routine of all purchases and often the consumer
returns to purchase the same product without giving much thought to other product

options (i.e., consumer is brand loyalty).

Major New Purchase - these purchases are the most difficult of all purchases because the
product being purchased is important to the consumer but the consumer has little or no
previous experience making these decisions. The consumers lack of confidence in
making this type of decision often (but not always) requires the consumer to engage in an
extensive decision-making process.

19Quester, P., Neal, C., Pettigrew, S., Grimmer, M. R., Davis, T., & Hawkins, D.
(2007). Consumer behaviour: Implications for marketing strategy. McGraw-Hill.

Major Re-Purchase - these purchase decisions are also important to the consumer but the
consumer feels confident in making these decisions since they have previous experience
purchasing the product.

For marketers it is important to understand how consumers treat the purchase decisions they
face. If a company Is targeting customers who feel a purchase decision is difficult (i.e., Major
New Purchase), their marketing strategy may vary greatly from a company targeting customers
who view the purchase decision as routine. In fact, the same company may face both situations at
the same time; for some the product is new, while other customers see the purchase as routine.
The implication of buying behavior for marketers Is that different buying situations require
different marketing efforts.20

Influences to the Purchase Decision

An individuals decision to purchase any product is defined by three different influences:


Normative influence: Such an influence occurs when the customers decisions are
influenced by the need to conform themselves to a groups desire or need. This can be
done either to gain some reward or avoid some punishment. More than the product
itself, the individuals satisfaction arises from conforming to group demands and
being within the boundaries of the social group norms. Example of such behavior can
be purchase of latest fashion trends to fit in the society or watching the latest TV


series to be the part of water cooler chatter21.

Value expressive influence: This influence arises when the members of the group try
to follow other members because of the competitive yard stick. The reason behind


this influence is the need for the similarity and because of this need, the whole group
accepts certain norms, values, attitudes, or behaviors,even though the members may
have no motivation except to work for the image in the eyes of the others, or in order
to identify with the certain group of people. The products which give ego trip or have

high social values are generally adopted here.

Information influence: This influence occurs when the customer tries to procure the
knowledge about the product from other people. Most of the time this occurs when
the product is not that easily accessible or the brand characteristics are not fully
known. In such cases, the individuals will look for the recommendation of the product
from other users like their family and friends, and will utilize this information in
making the decision (Blackwell, Miniard, & Engel, 2004).22

The following figure clearly indicates all the three behaviors along with the basic of this



Figure 2: Reference Groups influencing the consumers' Purchase behavior


Model of Consumers Purchase Behavior

The purchase decisions discussed above are made every day by the consumers. Before making
the purchase the consumer decides the answers to basic question of purchasewhat, why, how
much and where (Armstrong &Kotler, 2003). These decisions are influenced by many factors
past decisions, events of the current time like ageing, change in job, illness etc. (Neal, Quester, &
Hawkins, 2002).
Many attempts have been made to understand the consumer buying behavior. Kotler compared
the customer behavior with the purchase model indicated in the figure below.

The Environment

Buyers Black Box


Stimuli of
Product, Price,

Place and
Figure 3: Consumer Behavior Model

Buyers Decision
Making Process

Buyers Responses

Buying Attitudes
& Preferences
Brand and

The above figure explains how the information and stimuli presented by the marketing process
enters the consumers black box and generates the purchasing behavior response as well as the
relationship between the brand and the customers. The stimuli of the market is composed of the
following factors: Products, Price, Place and Promotion. These interact with the other stimuli like
economic, technological, social and cultural stimuli. These stimuli then enter the black box of the
customers where these are processed. The processing of these stimuli results in final purchase
decision of product about the product selection, brand selection, time of purchase and the price to
paid. The black box of the consumer is the major interest area for marketing because this is
where it is decided whether the stimuli will be converted into results. This black box mainly
consists of two parts. First part is associated with the buyer ad focuses on the characteristics of
the buyer. The second part of this black box is the response of the customer to the marketing
stimuli and the environment (Armstrong &Kotler, 2003).
Thus the major characteristics of the buyer that affects the consumer purchase decisions are as

Culture can be defined as a set of values, preference, beliefs and tastes followed by a
certain group of people at any given period of time. The cultural is a very strong and

influential factor affecting the purchasing decision of the consumers. For examples,
certain culture does not allow the consumption of some products, and the marketer
has to change their offerings according to the culture of the place. Like in India,
MacDonalds changed their traditional American beef based burger to the lamb based
burger as Indian cultural demands did not favor the consumption of beef and
considered it as a reverential product. Similarly purchasing behavior also varies from
region to region. In some regions like America, some of the products are purchased
after the detailed discussion with friends and families, while the same purchase might
be entirely different in Africa. These examples clearly indicate that the companies
have to be aware about the cultural preferences of the consumers as these cultural
preferences can make the difference in whether or not the marketing stimuli appeal to
the customers.

Perception :
Perception is the process through which an individual processes the stimuli presented
to them. A meaningful picture is created out of the different marketing stimuli used by
the companies. Not every customer perceives the thing in the same manner. Neither is
the perception always same as the company expect. This is not a collective process,
but a personal way of stimulating the events for every individual. But despite the
company needs to take care about how their product will be perceived by the
customers, and to take into account the chance that the perception of the customers
might not be the same as expected by the company.


Motivation in case of marketing can be defined as that internal need that propels the
consumers to make the purchase. It is important to understand why the consumer
purchases the product as it is the answer to the question of what are the needs of the
customers that justify the purchase of the product. Once a customer knows what he or
she needs, a state of tension comes where in consumer selects the products to
purchase the product and remove the tension. For example, a person with the higher
weight might realize the health effect of higher weights and might be motivated to
exercise, go on diets, join the gym etc. Maslows need theory pyramid used in
psychology and human resource management can also be used to identify the
individual needs that need to be met through the product purchase. Depending upon
what pathway the customer is in, he or she might make the purchase.


Social groups or Reference groups:

We discussed about the normative influence on the purchase choice above. This is
what the social group or reference group means. Each individual is connected with
one or the other kind of group and this group influences the behavior of all the
members of the group. The purchase can be normative in which the customer wants to
fit in the group or the purchase can be made because of the perceptions that are
formed according to the group. Boone and Kurtz (2005) explains that group
influences each individual in a different manner in terms of purchase and there are
various factors which influence the members choice to make the purchase even
within the group as well. The first condition will be that the product purchased should

be easily identifiable and it might stand out as something different and unusual which
everybody does not have and hence can be used to boast within the group.

Social Classes:
The various factors like income, profession, education, family background and place
of residence etc. give a rise to the social classes in a society. The social classes are
mainly of three types: the Upper class, middle class, and the lower class. Sociologist,
W. Lloyd Warner unearthed six classes in the United States namely, the upper-upper
class, lower upper class, upper middle class and the lower -middle class followed by
the working class and lower class. Depending upon the class, the purchases of the
consumer varies. There are certain purchases a consumer of certain class might make,
but the other classes might decide to go for an alternative. For example, the Upper
class might go for a product which is priced higher, while the lower class might
search for the another suitable alternative of the same product which is priced much
lower and satisfies the similar need.

The consumers overall behavior can be divided into three parts:

i) Pre-Purchase behavior: This behavior occurs before the customer plans to buy the
product. In this behavior, a problem is identified and the need is felt by the consumer.
The customer then goes into the internal information search mode wherein he
searches the options available with him for making the decision. Past experience and
the available knowledge are the two major sources which help the consumer decide
the answer for the same.

ii) Purchase behavior: After the pre-purchase decision has been made and the customer
has felt the need, next comes the purchase behavior where customer searches for the
alternatives and evaluates the same.
iii) Post purchase behavior: The last step in the process if the post-purchase behavior
where the customer judges the purchased product with respect to the expectations and
the perceived performance. The product is also judged in terms of the customer
service and warranty like features offered with the product. This post-product
behavior lays down the foundation for the next purchase or the repurchase of the
product. 23

Stages of Customers Purchase Decision

As discussed above, the impetus of the environment and marketing stimuli interact with each
other in the black box of the customer. These stimuli are then processed during the purchase
decision of the consumer. This subsection explains the different stages of the consumer purchase
making decision. Different stages for the process are as indicated below:
Problem Recognition
The first step in the decision making process of a consumer is the identification of the problem.
The paper above discussed the motivation of the purchase. This is the step where the motivation
of the purchase becomes known to the consumer. During this stage, the consumer identifies that
there is some problem in the current situation and the apparent situation is vastly different from
the desirable situation. The consumer feels the need and want to solve the problem of that need
by making a purchase. The needs can be simple or complex. For example, if one is hungry one
23 https://books.google.co.in/books?

will need food, that is a basic problem recognition. But it may so happen that one does not like
certain brand of fast food chains, say MacDonald, or maybe one is looking to change the taste
from ones usual fare. This will give rise to another problem which will help in identifying what
options that customer must make in order to solve the problem. This is where the opportunity for
the business is created.
Information search
The second stage of the consumer purchase decision is the search of the information related to
the problem identified in the first stage. This search of information can be extensive or intensive
information search. Most of the information is gathered by the customers from the within. This is
the information stored in the mind or sub-conscious of the customer owing to the marketing
stimuli. The information is stored in the mind of the customers in the form of images,
advertisements, and other activities. Information provided by the others who have faced the
similar needs also contribute the information stored in mind. The external information can also
come from the friends, families and the reference groups one is associated with.
Evaluation of alternatives
The next step in the process of making the purchase is the evaluation of the alternatives. The
previous step of information search results in generation of many alternatives the consumer can
go for in order to satisfy the need. This step focuses on evaluating the alternatives in different
manners. The needs and the features of the alternatives are compared. This evaluation does not
follow the fixed steps but is more dependent upon the need. Sometimes it might happen that the
consumer might not take little to no evaluations, while sometimes the consumer might be extra
careful and use the logical thinking to make the final selection. Various product attributes and

consumers factors discussed above help in the evaluation process. Sometimes, impulse
purchases are also made.
Purchase decision
Once different alternatives are evaluated, the next step is to make the final purchase decision.
Kotler(2009) has identified two major factors which decides whether the purchase intention will
become a purchase decision or not. Firtst of the factor is how the other treats the purchase as . If
the consumer encounters someone important to the consumer who believe the selected brand is
not good enough for any reason, the customers purchase intention will not solidify. The second
factor relates with the environment or the change in the environment. For example if a customer
plans to purchase a car and sudden economic meltdown happen. This will change the consumer
purchase intentions and will affect the final decision as well.
Post purchase act
The relation between the product and the brand does not end once the purchase is made, but
continues after the purchase as well. This last stage involves two kind of scenarios. The first
scenario is that the customer is satisfied with the purchase made by the customer, and products
expected performance before the purchase is comparable with the performance delivered by the
product after the purchase is made. If the delivered performance exceeds the customers
expectation, the customer is delighted, and if it falls short of the customers expectation, the
customer will be dissatisfied.
2.2 Smart Phones and Customers Purchase Behavior
The purchase behavior of the customers is influenced by a lot many factors. The following are
the major factors identified from the past research:


Demographic profile: A research conducted in Finland on the purchase of mobile

phone indicates that the demographic profile indeed affects the choice and purchase
of the product. The study concluded that gender and income are important deciding


factors in terms of the smartphone selection24.

Customers Usage Pattern: Another of the research indicated that the customers
choice of smartphones was based on the usage of the customers. They highlighted
that they utilize the products that they can use. However, as the Finland research
indicated that the choice might not be an information based choice, but a choice based
on the information presented in the advertisements and the promotion of the


Influence of Social Media: Social media has become quite important in current times
and is ubiquitous. It also influences the purchase decision of the consumers by
exposing them to the product as well as the influences associated with the product
purchase decision. The people who are more exposed to social media are more likely
to be educated about the product features and hence are more likely to make the
informed purchase26.

24http://sci-hub.bz/10.1300/J037v14n03_04Karjaluoto, H., Karvonen, J., Kesti, M., Koivumki, T., Manninen,

M., Pakola, J., ... & Salo, J. (2005). Factors affecting consumer choice of mobile phones: two studies from
Finland. Journal of Euromarketing, 14(3), 59-82.

25http://questjournals.org/jrbm/papers/vol3-issue2/B320611.pdfOh, L. B., & Xu, H. (2003). Effects of

multimedia on mobile consumer behavior: An empirical study of location-aware advertising. ICIS 2003

26Powers, T., Advincula, D., Austin, M. S., Graiko, S., & Snyder, J. (2012). Digital and social media in the
purchase decision process. Journal of advertising research, 52(4), 479-489.

2.3 Product and Technology Life Cycle

Although the product life cycle does not make the direct impact on the consumer, this is one of
the impetuses of the purchases. The product life cycle is the term introduced by Levitt to show
how and why the sales of the products vary in the different stages of the product life. The product
life cycle has four phases: Introduction, Maturity, Growth and Decline. The marketing activities
are planned according to which phase the product is going through in the period of time27.
But in case of high tech products, the product life cycle alone is not a sufficient guide because
the technology life cycle also becomes important in that case. A new product in the mature
technology market will give different results than a new product in the new technology markets.
The customers choices about adoption of the product and purchase of the same will also vary
based on the technology life cycle28.
The technology life cycle is different from that of the product life cycle, not only in
characteristics, but also in terms of the theories. Most of the scholars believe that the technology
life cycle follows an S-curve relationship between the development and growth of technology
and the output of the product sales. If we take a look at the product life cycle and technology life


cycle, the product life cycle can easily be contained inside the technology life cycle. As per this
curve there will come a time when the old technology will be available at the same time when
the newer technology is being introduced to the market. At the time, unless the old technology
phases out, there will be direct competition between the new and the old technology.

Figure 4: Technology and Product Life Cycle and the Customer Adoption model29

The above figure indicates that different type of customers will purchase the product at different
times in the product and the marketing life cycle. Thus whether the customer warms up to the
new technology to make the purchase or not is dependent on their features alone, but also


depends upon the customers as well. Moore has divided the customers into different parts to
explain this idea:
iv) Innovators: Innovators are the customers who are interested in using the products
based on new technology. They might even seek out the products even before the
marketing plan for the same has been launched.
v) Early Adopters: These people are not as aggressive as innovators, but they understand
the features of the products and hence adopt them early.
vi) Early majority: These are the people like early adopters who are interested in the
product and the newer technology on the block, but they wait until the technology has
proven itself among the early adopters before adopting the technology.
vii) Late Adopters: While early adopters are comfortable with the technology, the late
adopters are not. The late adopters adopt the product when the same become the
standard enough in the market.
viii) Laggards: Last but not the least are the laggards who adopt a technology in the
end when they are forced by the market to adopt this new technology in one or the
other way.30
If we take a look at the percentage of customers in each of the range, we will find that the
maximum number of the customers lie in the range of early to late majority. But different
companies have developed their niche by focusing on the different sections of the customers in
these ranges.


Figure 5: Technology Diffusion Diagram Among Customers31

2.4 Marketing Mix

The marketing mix refers to the integrated marketing practices followed throughout a company
with the aim of developing mix suitable to get the attentions of the customers and to achieve the
marketing goals set by the company32.
The marketing mix generally consists of 4Ps of the marketing. These 4Ps are described as




Product: The customer purchases the product and hence product is the basic thing that
matters to the customers. The marketing mix related to product decides whether the
company wants to develop a new product or wants to focus on the existing product.
The company may also decide to enter the market through strategic partnership by
borrowing part of the technology from some other company. The important part here
is to develop the product which satisfies the needs of the customers and are equally


compelling for the customers.

Price: The price of a high technology product plays an important role in the purchase
decision of the consumer. Hence special care needs to be taken while making the
purchase decision of the product. The companies should ensure that the price selected
is decided after keeping in mind the price in the market of the competitors product.
The price shall also take into account the other factors like the goals of the company,
the niche market targeted through the price, the margins paid to the distributor and the


price the customer might be ready to pay for that technology.

Promotion: The previous sections indicated the difficulties in finding the right
channel for the promotion of the high technology products as the information might
be too difficult to be summed up in the simple language and concise layout of the
promotion. But nevertheless, promotion is an important factor that needs to be taken
care of during the marketing mix development to ensure that the information about
the product reaches the maximum potential customers. The promotion includes
activities like advertisements, sales promotion, personal selling of the product and
public relations. The companies can utilize various available platforms for
development of the best promotional mix suitable for the products offered by the


Place: It is important to get the right product to the right customers at the right time.
This marketing mix feature focuses on the development of the supply chain
management mix which will be utilized to distribute the product through different
distribution channels. The good strategy for the selection of place is to select a
channel which allows the products to reach the right customers easily in a costeffective manner33.

Apart from the traditional 4Ps of marketing, there is a 5th element that also needs to be
included in the marketing mix of the high technology product because this is one factor
which influences the purchase decisions of the consumer.

Assistance and Informational Assistance: This element is not very much applicable
for the products other than high technology products. High technology products
means that a lot of information might be unknown for the customers, especially if the
product belongs to the new or upcoming technology. In that case, the companies need
to provide the information to the customers about the kind of technology the product
uses and how the product can benefit the customers as well. The purpose of this
assistance not only the sales, but it is the exposure of the customer to the product and
associated technology. The idea is to form the long term relationship with the
customers beforehand so that when the need arises the customers are aware about the
choice of technology they have during the process.
The following three are the major assistance provided to the customers as a part of
this element:



Advice and help before the purchase of the product by providing them with


the required technical specifications and solutions based on their needs.

The services associated with the setting up of the product or associated with


the other parts of the products.

The after-sales services including the routine maintenance and the repair
services, the warranty services etc.34

There is no fixed formula for selecting the right marketing mix for the products, especially the
high technology product. Even the new element of informational and the assistance will be
dependent upon the difficulty level of the product and the complexity of the technology used.
But it is estimated that the use of the right kind of marketing mix is the major step in achieving
the place in the customers purchase decision. As seen in above section, the marketing mix
processed by the customers in their black box is the only way the purchases are generated. Thus
the care needs to be taken to develop a marketing mix which suits the product and technology
and is in line with the expectations of the customers regarding the product, technology and the
company itself.

2.5 Product Classification

As it has been explained earlier, the product attributes play an important role in the decision of
the consumers as the decision of the marketing executive. Product classification can be defined
as the method to divide the products into meaningful categories and structured portfolio on the
basis of their characteristics (Brassington & Pettitt, 2006). Product classification plays a vital

role in devising the whole product marketing strategy embracing the management of the products
through introduction, growth, maturity, and decline stages of their life-cycles; as well as the
development of the new ones (Levitt, 1965). Past researches have indicated that the kind of
behavior a customer shows while searching, purchasing or evaluating the product is dependent
upon the kind of product the customer wants to purchase. Thus understanding the product
classification is essential for understanding the customers. Because of this, several models on
product classification have been proposed by many researchers for decades. With the amount of
research focused towards the product classification, the two different schools of the thoughts
have emerged:

Information oriented Classification : Information oriented classification is done on the

basis of the product features which can be collected via information by customers.
The information-oriented classifications include the classifications like the search-


experience-credence frameworks.
Transaction Oriented Classification: Transaction oriented classification of the product
is done based on the process of acquisition of the products and the transaction process
associated with the product (Kiang, Ye, Hao, Chen, & Li, 2011). Search-expereincecredence scheme can be explained as the transaction oriented classification of the

The above two group of classifications further house the different classification conducted for the
Basic Product Classifications
The basic classification of the product as defined below. These basic classification forms the
basis of the further classification done by different researchers.


Product Tangibility
On the basis of the tangibility of the products, the products can be defined as the
tangible and intangible products. The tangibility as defined by the dictionary is the
ability to touch or discern a product. Thus tangibility serves as one measure of
classification. The products which are tangible in nature are called goods, while the
products which are intangible in nature are called services.


The second kind of classification basis is the durability of the product. Dictionary
defines durability as the ability to withstand wear, pressure and damage. This feature
of the products defines how long the product can be used to satisfy the needs of the
consumers. The durable products can satisfy the needs of the consumers for a long
period of time for example cars, refrigerators etc. On the other hand non-durable
products satisfy the need of the consumers only once. That is why they are also
known as fast moving consumer goods or FMCG.


The products can also be classified on the basis of who are the end users or the
consumers of the product. This classifies the products as industrial or Consumer
products. The consumer products are purchased by the consumer to satisfy their
personal needs, while the industrial products are purchased by the businesses or
industries as an input to their production or for further sales from the companys end.

Many products can fulfill both the criteria and this characterization is utilized by the
companies as the marketing strategy35.






Figure 6: Basic Product Classification

Copelands Product Classification

In the rich field of research on classification of goods, the very first comprehensive classification
system for the commodities, which is still accepted as a valid approach and being endorsed by
both the American Marketing Association and the UK Chartered Institute of Marketing
(Mityko, 2012, p. 452), has been developed by Copeland (1923). Copeland (1923) classifies

35 https://books.google.co.in/books?

goods into three groups of convenience, shopping, and specialty based on the travel effort, brand
comparison effort, and degree of brand insistence dimensions from the consumers perspective
(Murphy &Enis, 1986; Girard & Dion, 2010; Mityko, 2012). According to the ConvenienceShopping-Specialty (hereinafter referred to as CSS) Model, the goods are classified into the
following major sections:
Convenience goods
Convenience goods are the products which the customer purchases without perceiving much
about the risk associated with the purchase. The price of such goods is mostly on the lower side
and consumer does not spend much time in making the purchase. Branding is not importantfor
these products and these are purchased by consumers on a regular basis. Examples of the
convenience good include toothpaste, light bulbs, crackers, etc. Consumer goods can be further
subdivided into the following categories:

Staple Products: Staple products are the products which are purchased by the
customers on the regular basis. Not much thought or consideration is given while
making the purchase. The example of such product is toothpaste or milk. These
products are generally stored at the locations which are convenient to the


Impulse Products: These are the products which are purchased by the consumers
without any plan. No search is done for such products, but is purchased because
of the sudden impulse to make the purchase. For example, when the ice-cream
vendor rings the bell, the children are tempted to make the purchase because of


the impulse.
Emergency Products: Emergency products are the products which are purchased
because of the emergency situation. No search is made for the product, but the

easiest and the most convenient option selected. In such cases, even price is the
less of the deterrent. For example the ambulance or the services of a car
breakdown services are utilized mostly in the emergency situations36.
Shopping Goods
Shopping goods are the ones for which consumer compares differing product characteristics
across items. In such cases, before making the purchase, the customer does a search and
compares the price, brand, quality and suitability of the products. Then only the purchase is
made. These products are more durable than the convenience products and hence are purchased
less frequently. The major product in this list includes the products like clothes, furniture,
computer etc. These products can be further divided into the following products:

Homogenous Shopping Products: These are the products which are similar looking in
nature and hence the customers try to get the lowest price for these products. Example


for such product will be a television set which is considered similar by many people.
Heterogeneous Shopping Products: These are products which are different from each
other and customer likes to compare them on the features like durability and
suitability before making the purchase. These products include the products

Specialty goods
Specialty goods represent the products with unique features that attract the consumers to the
stores where they are available and ensure the purchasing without shopping and beyond the
price. These specialty products include products like mens suits, special furniture, etc.
36 http://www.unilorin.edu.ng/publications/adeotijo/PRODUCT%20CLASSIFICATION%20STRATEGY.pdf

Unsought Products
Unsought products are the products which customers are not aware of or if they are aware of,
they never think of buying these products like cemetery plots, coffins, encyclopedias etc. These
products need a lot of marketing effort and personal selling. The unsought products are further
divided into two parts:

New unsought products: New unsought products are those which are innovative in
nature and represent the newer ideas which the customers are unaware about. These


products call for huge amount of marketing efforts.

Regularly unsought products: These regularly unsought products are those products
which the customers are aware of but rarely sought. The customers motivation for
purchase of these products is not sufficient for the purchase, and hence personal
selling is required. An example of such product is the gravestone.

Copelands classification was a welcome for all the scholars and academicians as it gave an
insight into the marketing strategies that could be followed for these products. This policy
provided the solution to the questions about the product development and product distribution
that plagued all the marketers. Probably that is the reason the classification is still established and
accepted in the current times as well (Chamberlin, 1933). The biggest disadvantage of this
theory is that it is old and outdated and does not take into account the consumers also thinks
about the perception, style and status, which are quite important in current times. Social
characteristics of the customers also play an important role in the customers decision as does the
status of the customers. These factors are key factors which aid the customers purchase decision
and these are not considered here.37
37Mason, R. (2005). Missing links: Product classification theory and the social characteristics of
goods. Marketing theory, 5(3), 309-322.

Bournes Product Classification

In 1956, another product classification approach was suggested by Bourne, yet it has not been
favored widely. This classification focused on the degrees of social and brand conspicuousness,
Bournes classification can be explained with the help of the following figure:

Figure 7: Bourne's Product Classification

Buying is not always an individual decision, but the choice is influenced by the reference groups
as well. The choice of the customers, as explained above, is very much influenced by the people
they compare themselves with. Bournes matrix focus on the impact of this reference goods

Product-minus, brand-minus
This category includes the products where the brand and the product are not socially
conspicuous. In such cases, the purchase is made based on the attributes of the product. This
group of product refers to those products and brands, where the reference groups influence
neither the product category decision nor the brand decision. Personal influence might still affect
the decision of the consumers, but the impact of this influence will not be much. Example of
such product is soup, soap etc.
Product-minus, brand-plus
This group refers to those products which are used by a large number of group for example the
clothes, which everyone wears. The choice of such products is highly influenced by the reference
groups. They are the product where the reference groups influence the brand decision but do not
influence product category decision.
Product-plus, brand-minus
This group refers to those products and brands where the reference groups influence only the
product category decision and not the brand decision. For example instant coffee is served in any
place only when the server decides that the coffee she is serving as per her reference goods and
perception is suitable for consumption or not. Brand really does not matter in this case.
Product Plus, brand plus
These products are the products where the product itself and the brand as well is the socially
conspicuous and can be influenced by the reference group. For example a car is a product where
not only the brand is influenced by the reference group, but the product is also affected by the

influence of the reference group. 38 For completing Bournes model, it is also important to note
that in some cases, and for some products, reference groups may influence both a persons
product category and brand (or type) choices. Such products are called product-plus, brand-plus
items (Prasad, 2009, p.61).
Holtons Product Classification
Holtons work emerged in 1958 and was based on the product classification given by Copeland.
Holton tried to fill the shortcomings in the definition of the convenience, shopping, and
specialty classification. He explained that the convenience and shopping class product can vary
according to the individual. He further elaborated that whether a product is a convenience
product or the shopping product, the decision is based on gain resulting from price and quality
comparisons relative to searching costs of individual consumer (Murphy &Enis, 1986, p. 27),
As per Holton, Convenience goods are those goods where the gain achieved by comparing the
brand and the price does not give much gain. These products are easily replaceable.
For shopping goods, the individual perceives the cost of searching to be less than the cost that
will be saved by comparing the alternative brands and products.
He also addressed the existence of an endeavor element in the purchase of specialty goods
stemming from the limited volume of demand (Mityko, 2012). He explained that the speciality
goods are those goods for which the customers are ready to put in some kind of extra effort from
their end for making the purchase. This special effort can be by the choice of the consumer or
because of the need of the consumer. Keeping this in mind, it can be fairly inferred that Holton
believed that both the convenience goods and shopping goods could turn into the specialty goods
38 http://www.psc.isr.umich.edu/dis/infoserv/isrpub/pdf/Groupinfluence_2686_.PDF

in the absence of the product in the market or in any such case which would call for extra effort
on behalf of consumer.39
As a follow-up on this distinctive dimension addressed by Holton (1958) for specialty goods,
Luck (1959) extended the argument with the claim that for purchasing special brands the
consumer is willing to make a special expenditure of physical or mental effort.
Aspinwalls Model of Product Classification
The next remarkable model of product classification was developed by Leo V. Aspinwall (1961)
who focused on the five factors which varies as per the customers usage and preference.

Replacement rate This rate refers to the rate at which the product is consumed and the

rate at which the product purchase will be need.

Gross margin This refers to the amount the customer has to spend the product for the

final product.
Adjustment This factor refers to the amount of customization the product might need as
per the requirement of the customers and the amount of adjustment the customer will

have to make for the same.

Time of consumption This measures the time it takes to consume the products.
Searching time This refers to the efforts the consumer might have to add for the
purchase of the products. This includes the distance the customer might have to travel for
the purchase or the ease of availability of the product.

The above feature gave the scale of the red, orange and yellow goods which was then used to
identify which table the product belonged to. This resulting model is indicated in the figure
below. As indicated in the figure, this scale of products is continuous in nature.

39 http://www.jstor.org.sci-hub.bz/stable/1248017?seq=1#page_scan_tab_contents

Figure 8: Aspinwall's Classification Theory40

Although replacement rate, gross margin, and adjustment dimensions are applicable to high
technology products, time of consumption and searching time would be of no use in terms of
diversifying them. The reason behind is that within the same category, all high technology goods
show similar characteristics in terms of possessing relatively shorter life cycles compared to
other products and requiring approximately the same amount of time and travel distance to the
channel where they are available for purchase. Apart from the applicability in high technology
products concept, this model also lacks considering other types of costs and efforts by taking
only search time in that sense.
Bucklins contribution to the Product Classification
In 1963, Bucklin (1963) extended the CSS model by emphasizing the dimensions of degree of
shopping effort and degree of preference formation prior to the purchase. He said that sometimes
40 https://books.google.co.in/books?id=6WMJAAAAQBAJ&pg=PA198&lpg=PA198&dq=Red+goods,

the customers are truly aware about what product they want to purchase and what brand they
want to focus on before leaving the house. These products do not call for any kind of special
search or extra efforts. On the other hand there are products for which customer does not know
which brand to purchase. These products call for search, effort and time on consumers part
before making the final decision. Also, it is not necessary that the brands be searched every time.
Sometimes, the customers take the help of the past decision as well before making the purchase.
Thus he defined the new definitions of the CSS as the following:

Convenience products: These are the products where the consumer has a preferred
brand of the product he wants to purchase along with the associated substitutes for the
same. This reduces the amount of the work the customer has to perform during the


purchase decision.
Shopping goods: The shopping goods are those for which the customers try to find
the new solution to the problems every time the purchase is made. Every purchase
decision calls for efforts on from customers side in terms of search of the suitable


product for his needs.

Specialty products: These are the products for which the consumer favors only one
particular brand and is ready to bypass even the easily available brands, calling for
extra effort for the consumers side.

Miracles Product Classification Model

In 1965, Miracle extended the above model with the nine characteristics to classify the products
as compared to the five characteristics of Aspinwall41. Miracle used nine different characteristics

41 https://archive.ama.org/archive/ResourceLibrary/JournalofMarketing/documents/5004322.pdf

and divided the products into the group of five , i.e. Group I, Group II, Group III, Group IV and
Group V. These nine characteristics are explained below:

The product characteristics of unit value,

Significance of each individual purchase to the consumer,
Time and effort spent purchasing by consumers,
Rate of technological change,
Technological complexity,
Consumer need for service,
Frequency of purchase
Rapidity of consumption
Extent of usage (Miracle, 1965).

The classification of the products is shown in the figure below.

Figure 9: Miracle's Product Classification

As per this model, the high technology products cannot be defined because there is no group
where the characteristics can be valued in the range of medium to very high. The products can
only be ranged from the low or high priority and there is no middle or extra high range. This is
not true for technology, for example in the case of current research the smartphones are selected
which have medium to very high value for all the given nine dimensions. Thus this view cannot
be used for high tech products.

Development of CSS model in the coming years

The attention attracted onto the effort is continued in the work of Kaish (1967). Revisiting the
CSS model, Kaish identifies two distinct dimensions for the effort as physical and mental again
from the perspective of the consumer (Kaish, 1967). Then the later work of Mayer, Mason, &
Gee (1971) on the CSS model of Copeland (1923) emerges, remarking that the product
classifications can consist of the combinations of the formerly stated three groups (CSS) such
as convenience store-convenience goods, convenience store-shopping goods, convenience storespecialty goods, shopping store-shopping goods, and specialty store-specialty goods based on
the dimensions of locational convenience, merchandise suitability, value for price, sales effort
and store service, congeniality of store, and post-transaction satisfaction (Mayer et al., 1971;
Murphy &Enis, 1986).
Shopping goods category within the CSS model is divided into two sub-categories of high and
low intensity with referral to the degree of brand similarity and degree of uncertainty of the
consumer in making a choice (Bucklin, 1976). Yet the introduction of the preference goods is
accepted as the most important elaboration to the CSS model. The preference goods are argued
to be the expanding category, where advertising efforts are also being concentrated, characterized
with high brand preference association in contrast to requiring low shopping effort and weak
connections to the ego and self-confidence of the consumer (Holbrook & Howard, 1977). It is
this high brand preference, namely the brand loyalty, and social likes or dislikes that
differentiates preference goods from the convenience goods. Beer, toothpaste, a tea of a
particular brand, and soft drinks are blatant examples of preference goods.
Further development of the CSS model is highly driven by the concentration of efforts on what
the product is. Initial work within this scope proposes that a product is a total bundle of

benefits as seen by the buyer (Enis&Roering, 1980) and positions the perception of a
consumers benefits as the identifying element based on which the strategic marketing decisions
are to be aligned (Murphy &Enis, 1986).
Kotlers Classification
A different classification was provided by Kotler in 1972. This classification differentiated the
services and moved the orientation of the classification to the manufacturers perspective. The
products here are identified on the basis of the industrial perspective. The classification groups
the products based on the cost to the manufacturers (Murphy &Enis, 1986). Hence the
classification consists of three groups of goods as follows:
(1) Materials and parts are goods that enter the manufacturers product completely. Raw
materials (farm and natural products) and manufactured materials and parts (component
materials and component parts) compose this group,
(2) Capital items are long-lasting goods that facilitate developing or managing the finished
product, such as machinery (installations and equipment), and
(3) Supplies and business services are short-term goods and services that facilitate developing or
managing the finished product; maintenance and repair and operating supplies are included here
(Kotler, 2006).
Levitts Classification of Product
Within the scope of classification of goods, a different conceptualization is introduced by Levitts
work (1981) where the product is defined based on the perceptions of the consumers on four
different levels as generic, expected, augmented, and the potential products (Moore, 2002;

Mityko, 2012). Aiming to fill the gap between the promise of marketing and the shipped product,
the roots of this model is very similar to the work of Enis&Roering (1980). Frequently
referred in the high technology marketing literature, this notion is called the whole product
concept and originally diagrammed as seen in Figure 1. Based on the model, layering definitions
of products from core to crust are provided as follows:

Generic Product: The dictionary definition of the offering aiming to serve the basic
utilitarian benefit. Practically, it is what comes in the box covered by the purchasing

contract (Moore, 2002, p.108).

Expected Product: The minimum expectations of the consumer from the product offering.
Augmented Product: The value added to the offering, above and beyond the minimum

Potential Product: The products auxiliaries being introduced based on the consumerdemanded, specific enrichments and it is this product that constructs the brand loyalty
and drives the growth of the product (Levitt, 1981; Moore, 2002).

Search Experience-Credence Model of the Product

The first effort in the search-experience-credence model was made by Stigler in 1961. Stigler
suggested a search theory which explained that the customers are liable to search for the products
until the marginal expected cost of search exceeds the cost of marginal expected returns.

Further based on the Stiglers theory and driven by the efforts to explain the consumers
perception of and information about the quality of a product, Nelson (1970, 1974) established a
new model of search and experience goods.

In this model, the goods about which the consumer has clear information about the
characteristics and established knowledge on how to reach them, such as milk, are classified as
ordinary goods. On the contrary, if the characteristics were not well-known, then the quality of it
is needed to be considered and evaluated by the consumer while making the purchasing decision.
The basic claim was that the quality has profound effects upon the market structure of consumer
goods (Nelson, 1970, p.311). In the model, an important dimension was also introduced as time
referring to the time of quality evaluation of the consumer either prior or after the purchase.
Accordingly, Nelson claimed that if the quality of a product can be evaluated prior to purchase
by the consumer, then it can be considered and classified as a search good (e.g. cloth).

On the other hand, (1) if there is an absolute need to directly experience the product to attain
information about its attributes or (2) in cases where searching for the information about the
main attributes of a product is either highly costly or hard to achieve compared to directly
experiencing it, then the product is to be classified as an experience good (e.g. wine for
experience-1 and house for experience-2). This classification scheme is not dependent upon the
buyers perception, but this is more dependent upon the quality or internal attributes of the

Developing the model further, Darby & Karni (1973) introduced the concept of credence goods
out of the experience goods that has been contrasted to the search goods formerly by Nelson
(1970). They claimed that the main attributes for credence goods cannot be evaluated in normal
use and the evaluation of their quality requires additional costly information (Darby &Karni,
1973). The reason behind calling these products as credence goods was explained as the

fact that the consumers evaluation of the quality was depending entirely on the trust given to
the product manufacturer (Jourdan, 2001, p.168) like in vitamin supplements and many forms
of services (e.g., medical treatment, car repair, and education).

In order to clarify the Search, Experience, and Credence (hereinafter referred to as SEC)
classification groups, Figure below provides more examples for each of them based on the work
of Girard & Dion (2010).
Thus the SEC attributes of the product can be defined as follows:
a) Search Attributes: These are the attributes of the products which can be understood
and analyzed before making the purchase.
b) Experience Attributes: These are the attributes of the products which can be verified
only after the purchase of the product.
c) Credence Attributes: This refers to the attributes which cannot be validated any time
during the purchase.

Figure 10: SEC Product Examples

After its establishment by Nelson (1970, 1974) and development by Darby & Karni (1973), SEC
framework has been widely used and extended by other researchers. Among those who

contributed to the development of the SEC classification to its current form, Norton and Nortons
(1988) introduction of distinction for experience goods as non-durable and durable based on the
frequency of purchase as an added dimension to the model as extention; and Kleins (1998)
illustration on the shifts from one category to the other after certain conditions are met (i.e.,
branding and detailed product specifications transforming an experience good into a search
good) are the ones that are significant (Mityko, 2012).

Further, the experience products was divided the experience goods in two partsexperience 1
and experience 2 products. Experience 1 products are same as the experience products.
Experience-2 products are the products for which the search characteristics cost more than the
experience cost itself42.

Among the several models on product classification, the relatively new SEC framework has been
applied to many modern research settings (i.e., services marketing, e-commerce, m-commerce,
etc.) exploring the consumer behavior which is changing with the newly emerged conveniences
for searching and purchasing products. Though these contemporary studies, which are After its
establishment by Nelson (1970, 1974) and development by Darby & Karni (1973), SEC
framework has been widely used and extended by other researchers. Among those who
contributed to the development of the SEC classification to its current form, Norton and Nortons
(1988) introduction of distinction for experience goods as non-durable and durable based on the

42 https://books.google.co.in/books?

frequency of purchase as an added dimension to the model as extension; and Kleins (1998)
illustration on the shifts from one category to the other after certain conditions are met (i.e.,
branding and detailed product specifications transforming an experience good into a search
good) are the ones that are significant (Mityko, 2012).

However, the focus of this research will be on the work of information oriented approach since
the model that will be utilized during data analysis is an explicit example of this approach. It is
also important to emphasize that the study will be focusing on the attributes of the product and in
doing so concentration will be on the commodity approach of marketing, which is concerned
with the goods in comparison to the functional and institutional schools investigating the
activities and organizations-as-actors respectively, within the three competing approaches of
marketing (Skln, Fougre, &Fellesson, 2008).
Search-Experience Credence Theory and Smart Phones: Current Research Framework
With the purpose of increasing the probability of generating valid results, the focused research
object of this study is narrowed down to and clearly defined as the smartphones within the wide
range of high technology products. Smartphones, as the most commonly used high technology
products, are formed to provide various convergent features and functionalities to their target
customers in the fast changing environment of information and communication technologies, and
are undoubtedly associated with the idea of technological progress, transforming the daily life
radically. A smartphone is a mobile device distinguished from the contemporary feature phones
with their advanced capabilities, computer like functionalities and abilities to run applications.
Kenney &Pon (2011) describe smartphones as products offering a convenient user experience

and embodying key gadgets for accessing the mobile Internet while highlighting the capabilities
of running various services such as Internet-based messaging, social networking, content,
and location as well as the advanced computing power of these devices. Initially formed as an
amalgamation of a mobile phone, personal digital assistant (PDA) and a camera; smartphones are
continuously evolving into devices with added functionalities and enhanced capabilities (Park
and Chen, 2007). The clear evidence for the continuous evolution of the smartphone concept can
be found in the fact that several features and functionalities, which are becoming the standards of
a smartphone of the present-day, used to be the distinctive capabilities of the cutting-edge
technological devices for not more than 3 years ago like high-resolution touch screens that
provide full web surfing, portable media players, pocket video cameras, and GPS (global
positioning system) navigation devices. In addition to amalgamating such features and
functionalities, smartphones also embody the most accelerated technological developments in
consumer products with the highest patent activity, which is also a strong proof of evolution.
While the smartphone concept is evolving continuously, the extremely competitive global
smartphone market is recording high growth rates i.e. more than 60 per cent year-on-year
growth for the last three years. Research companies agree upon the prediction that by the year of
2015, annual smartphone sales will reach one billion globally. Specifically, IDC (2011)
expects total smartphone sales to reach 982 million in 2015; whereas IMS Research forecasts this
figure getting over one billion in 2016 representing half of the global mobile handset market.
Finally, the figures published by Canalys in 2012 show that the shipments of smartphones had
exceeded those of PCs with 73 million more units being sold in 2011 for the first time ever,
signifying a very important milestone. Data shows that in 2011, 487.7 million smartphones were
shipped, compared to 414.6 million PCs marking a 62.7 percent increase on shipments of

smartphones for 2011. While commenting on the figures in the press release, Canalys VP and
principal analyst Chris Jones says that in the space of a few years, smartphones have grown
from being a niche product segment at the high-end of the mobile phone market to becoming
a truly mass-market proposition. The greater availability of smartphones at lower price points has
helped tremendously, but there has been a driving trend of increasing consumer appetite for
Internet browsing, content consumption and engaging with apps and services on mobile

As proven with data and deductions of the analysts, smartphone has already become an
irrevocable product of the modern life-styles of consumers to the extent of emerging a consumer
group who starts a day with smartphone and wraps up with smartphone (Lee et al., 2012,
p.27). Accompanied with the sustained need consumers have for upgrading their smartphones as
a result of the products shortened life-cycles due to the fast-changing nature of the
supplemented high-technology based capabilities; it is this perception of consumers setting
smartphones as must-have products that explains the shift towards smartphone manufacturing of
all major consumer electronics and ICT companies (Tseng et al., 2011). Additionally, this
reasoning also elucidates why manufacturers persistently improve their products and compete
with each other in feature and functionality wars. On the other hand, combining unique
mixtures of established and advanced technologies (Millman& Wall, 1992); smartphones as
high-tech products signify high levels of perceived risk for consumers. It is basically the higher
uncertainty about features introduced with the means of these advanced technologies that cause
higher levels of perceived risk in smartphones and other high technology products alike.

Attributes Affecting the Purchase Decision Regarding Hi-Tech Products Especially Mobiles
For the high technology products, the customer purchase behavior has been utilized by the
marketers. The same difference is elaborated in the diagram below. The sections already
discussed the early adopters and the early majority earlier. The difference between the early
majority and the early adopters is termed as the chasm. The companies try to move from the
early majority to early adopters through the overcoming these chasm by segmenting, targeting
and positioning of the product.
Another phase with the time and the high technology products is the time. The time is quite an
important factor which impacts the decision of the consumer. The upgradation of the previous
equipment or the purchase of new technology in case of high technology products are highly
dependent on the timing when the product when they are making the purchase.

Figure 11: Customer Purchase Decision43

Based on the past research and the above discussed product attributes, following can be
considered as the major attributes that can affect the purchase decision:

Product understanding: This section talks about how much of the knowledge the
customer has about the product and whether the customer is aware about the features
of the product or not. High technology products are difficult to market precisely for
this reason only. The kind of specifications the product has plays an important role in
the end decision of the customers. Customers might even be ready to pay the extra
price if they are aware about the kind of features they are buying into. Thus it is quite
important for the customers to be aware about the products and their features.



Shopping experience: Shopping experience refers to the how easily the product is
available to customers. The product which are not easily available or which calls for
travel and search. As explained above, the products which are not easily available are
termed as specialty products which do not have very strong market unless the desire
of the customer is very strong. Thus the customers shopping experience play an


important role in the customers purchase decision.

Customer service: One of the factors of the consumer purchase decision was the postpurchase behavior. Post purchase behavior consists of various factors like the
performance of the product itself, the warranty of the product and the customer
service. Past research has indicated that the customer service after the purchase of the
product is another important factor which influences the purchase decision. The good
customer service ensures that the customers prefer the products of the brand, whereas
bad customer service may sometimes even overlook the performance of the product


Consumers Perceived risk: Perceived risk is considered the major factor that affects
the purchase of the products. For the high technology products, the consumer does
not have sufficient knowledge of the products. In case the products are new, the risk
taking will always be high irrespective of the benefits of the product. The consumer
are more prone to buying the products the risk for which is lower and the chances of
losing the money is less (Jarvenpaa and Tedd, 1996-97)44. Thus for every new
product, the customers will try to averse the risk. An example of this behavior will be


the postponement of the product purchase or the unwillingness to pay the high price

of the products. 45
Role of Perceived Usefulness: The customers are more likely to buy the product they
find more useful even in terms of the high technology products. Since these products
are relatively on the higher side of price range, this factor is quite an important factor
for the customers to base their decision on. The use of smartphones can be
multifaceted. While earlier the usefulness of the phone was limited to the calls and
messages, the phone is used for multiple factors these days. These uses involves
checking the email, web surfing, watching movies and videos, social media usage etc.


along with the usual features of the phones.

Social Influences: The chapter above already discussed the social influences on the
customers purchase decision. Smartphone purchase is highly influenced because of
these social factors. The response of the family, friends, and reference group is


considered as one of the big contributor for the purchase decision of the smartphones.
Brand Perception: Social influences are also affected by the brand of the product.
Like all the other features, brand perception plays an important role in final purchase
decision of the product, especially the smartphones.

Thus out of all the methods available, SEC felt the best fit for analyzing the consumer purchase
behavior for the high technology product. This literature review is conducted in order understand
the development of the questionnaires and to find the tools for analysis of the data obtained
through the survey. Thus for the purpose of the research, Search-Credence Experience attributes
are selected as the sorting criteria for the research. During the due course of research,
45 http://www.anzmac.org/conference_archive/2008/_Proceedings/PDF/S05_/Pandit%20Karpen

questionnaire will utilize the theories developed above to form a questionnaire and utilize all the
available information available. In the survey, customer behavior will be analyzed especially
with respect to the demographic, the social engagement and other such factors which can
influence the customer purchase decision. The chapter took look at the various available theories
about the product classification and the customers behavior in order to find the right balance
between the two. The card sorting exercise will utilize the search-experience-credence theory
utilized in the chapter.
Thus the literature review will provide with the much needed information for the further

3.1 Introduction This chapter explains the research methodology; issues related to the research
instrument are addressed in the light of developing a research technique. The background of the
empirical studies is given and, finally, an appropriate research procedure is discussed and
established. Graziano and Raulin (1997) consider that the major goal and objective of surveys is
to learn about the feelings, opinion, attitudes, ideas, desires, knowledge and self-reported
behaviour of a defined population of people by directly asking them. The answers obtained
through a structured questionnaire give the exact information desired from respondents. In
addition, Graziano and Raulin (1997) explain that surveys, typically, include all types of items
demographic information, opinions, attitudes and behaviours; such information is useful in
searching and examining the relationships between different variables, either in groups or in a
single-step model. The current research is based on quantitative data analysis. For this research,
primary data was collected and only one method was used to collect it. The data was collected
through an intercept survey using a judgmental sample. The criteria used for the sample
population was firstly, students who are computer literate and who know the basics about
computer usage and secondly, that respondents must be planning to buy a computer, specifically
a laptop. From the literature review, it did not appear that any research in this specific area of
marketing had been undertaken previously. The research was designed to develop an
understanding of, and define, the importance of relational orientation and retail store image along
with other variables like trust of the salesperson, commitment to the retail store and involvement
leading to the purchase of high-tech products. The research outcomes were expected to provide
some answers to marketers about effective marketing strategies to persuade customers to buy
from a particular retail outlet by identifying the perception of consumers in terms of various

attributes while making purchase decisions, and the personality of consumers in terms of their
product purchases in the marketplace.
3.2 Sample Size and Population The research survey was conducted in six different countries;
viz., India, Australia, New Zealand, Fiji, Hong Kong and Indonesia; the sample population was
restricted to students in each country. Considering the time limit and budget, the student segment
was selected as a convenience sample and because students tend to be technologysavvy and
regular uses of computers. The total sample group for the study was 370 respondents from the six
countries. The conduct of the survey in the selected countries was undertaken personally by the
researcher in India, Fiji and Australia. However, in New Zealand, Hong Kong and Indonesia the
survey was distributed by means of an independent contractor. The contractor was given basic
training on how to conduct the survey to meet the requirements of the study, including
information on the structure and intent of the survey questions. For Indonesian students the
implementation of the survey was critical inasmuch as their native language was not English.
Initially, there was consideration of the value of having the survey translated from English to
Indonesian language; however, the contractor assured the researcher that data would be collected
from students who were well-versed with the English language. Based on this arrangement, no
translation of the questionnaire was considered necessary and the contractor was able to conduct
the survey with students who were quite competent with the English language and were studying
a degree programme in English. 3.3 Demographics of Sample The sample selected for the study
comprised students who were judged to be a convenience selection. Technology-savvy dare-devil
students not afraid to try new things, reasonably literate, well educated, ambitious, dynamic and
ready to face future challenges were chosen as respondents for the study as being the right
sample representation. The sample was selected, using a general male/female ratio, from the six

above-mentioned countries. The objective of selecting different countries was to check potential
variations in purchasing intention; e.g., based on aspects such as their culture, ethnicity,
profession, purchasing power parity.
3.4 Location and Geographical Context The primary data was collected from geographical
regions that were diverse in terms of purchasing power, education, culture and religion, which
would help in developing a comparison of regional purchasing habits. Primarily, the survey was
aimed at students and professionals such as retailers, retired people, working employees and
housewives. However, in this study no regional comparison was done; the data was treated as
normal and no country-wise comparison study of the student sample was considered, though, in
future, the data may be used for further research papers. 3.5 Questionnaire Approach The
questionnaire in the study was a well-structured, multi-choice questionnaire using the range of 1
to 10 on a Likert-type scale. The questionnaire was handed to students personally and they were
requested to complete them immediately. Not a single respondent was given the opportunity to
take it home or to the office and complete it at their leisure. According to Czaja & Blair (1996,
p.56), the questionnaire is based on the desire to collect specific information about a well
defined population. The questionnaire typically contains a number of questions aimed at this
well-defined population, in most cases the questions being closed questions, in which a set of
numbered response alternatives is mentioned. The questionnaire is available in the Appendix at
the end of the thesis. The structured questionnaire was designed based on the conceptual model,
hypotheses and research questions. To make the study simple and more accurate, the
questionnaire was designed based on a Likert-type scale. In order to distinguish the method of
survey and data collection from that of other strategies and to identify its characteristics, it is
further defined below. According to Sudman and Blair (1998, p.85), there are various advantages

and disadvantages with questionnaire research methods; for example, 1. The use of a structured
questionnaire means that all respondents are asked the same questions in the same order, which
facilitates data analysis; 2. The use of structured questionnaire allows the researcher to control
the interview without being present physically; 3. The use of a structured questionnaire allows
survey interviews to be done by mail or telephone, which is cost effective; 4. The use of mail or
telephone, plus the lower cost per interview, makes it possible to do a large number of interviews
with a broader crosssection of the market. Apart from advantages, the questionnaire format has
its disadvantages, such as: structured interviews reduce flexibility, deep feelings and hidden
motivations cannot be probed very well and questions are best limited to items that have short,
direct answers. These advantages and disadvantages highlight the fact that questionnaires are
used to gain facts rather than in-depth insights into stream-of-consciousness thinking (Sudman &
Blair 1998). Survey questions were developed from the review of extant literature described in
Chapter 2. It was carried out via a range of sources such as Business Source Premier, Journal of
Marketing, Journal of Academic Science, Harvard Business Review, the Internet, marketing
textbooks, computer hardware magazines, and the Australian Statistics website. More relevant
information on secondary data was included with proper reference to information quoted in the
3.6 Designing the Questionnaire The questionnaire was designed using multi-items on a scale
from 1 to 10 using a Likert-type scale. The scale used in the questionnaire ranges from 1 (very
little influence) to 10 (very high influence). The respondents were asked to complete their
answers for all the questions in the questionnaire, and it was described as mandatory to do so
otherwise there was no point in starting the survey if it was to be left half done or incomplete;
i.e., there would be a negative impact in not getting the information in full. In addition, there

were descriptive questions where respondents needed to write answers in more detail.
Respondents either circled or ticked in front of their answers. According to Sudman and Blair
(1998, p.207), there are various stages in designing a questionnaire. They are as follows in Table
Table 3.1: Formation/ Development of Questionnaire Stage 1 Planning questionnaire content
Stage 2 Ordering the questionnaire Stage 3 Administering the questionnaire Stage 4 Formatting
the questionnaire Stage 5 Testing the questionnaire These suggested stages were followed in the
current study. The first stage of designing a questionnaire involved planning in which were
considered the research objectives, conceptual model and the hypotheses for designing questions.
According to Czaja and Blair (1996, p.122), at this stage we must decide the goals of the
research and determine how best to accomplish them within the available time and resources.
The first part of the questionnaire related to three questions based on the general expectations of
the respondents. The first question was based on the physical characteristics of laptops and what
respondents were looking for before purchasing. 18 different items were included in the physical
characteristics question (Q1). The next question (Q2) was based on the product life-cycle, where
theory was based on the strategy used by the organisation. Respondents were given eight
different items in this question and had to identify why the product life-cycle was getting shorter.
Respondents answered using the 1 to 10 Likert-type scale to help answer whether organisations
are changing the product life-cycle because of consumer strategy, market-driven strategy,
business strategy, sudden decline in sales, increased speed and reduced space of new models,
innovations, competitive pressure or new entrants into the marketplace. Though this area was not
in the conceptual model, answers to these questions helped to get a general feel of the market and
consumer opinion on the dynamic changes in the product life-cycle of different models and

technology product items. The theory of diffusion data is collected through Q3 in the
questionnaire, where respondents needed to identify their personality in terms of purchase
intention; the question had five major items and one further item. Attributes like innovator,
opinion leader, willing to accept change, sceptical and conservative were simplified and explored
with simple, non-academic language so that respondents could understand the meaning of the
questions and answer them using the same 1 to 10 Likert-type scale. However, it was decided not
to consider this section (physical characteristics, product life-cycle and diffusion of adoption
theory (Q1, Q2 and Q3) in the research because of a potential for losing focus on relationship
marketing which was the major research area. Nevertheless, the inputs and results from these
questions helped with the literature review, managerial implications and general understanding of
the study. The data collected for these questions were available for use in further study and more
research papers can be drawn using the data from those questions. The second part of the
questionnaire (Q4 to Q10) consisted of the major variables established for the study; viz., retail
store image, salesperson likeability, relationship orientation, salesperson trust, commitment to
retail store, involvement of consumer in purchasing process and, finally, purchasing intent.
Various articles and scales have been used to measure retail store image (RSI-Q4). However, in
this study, the concept of Joyce and Lambert (1996, p.24) was used; viz., memories of the way
stores were and retail store image was the first dependent variable of the conceptual model.
However, while testing the variable for reliability and validity of the scale, the desired
meaningful average mean and alpha were not achieved. It was decided to skip this item and
measure the ones which respondents could identify very clearly as separate items, and group like
factors. Relationship orientation (RO-Q5) was based on the dependent variable relationship
orientation. The scale used was from Neng, Weng and Yi (2003) in Relational Bonds and

customer trust and commitment; A study on the moderating effects on web site usage. There are
three parts to the question, with factors like social, financial and structural bonds. Twenty-one
different items were used. In the current study, all the scales used by Neng, Weng and Yi (2003)
were used, and they worked perfectly well in data analysis.
Commitment to retail store (COMRS) was measured with Q6. There were 14 different items in
the question, representing trust and commitment. However, while doing the factor analysis, the
loading was not grouped perfectly so a few items such as trust and commitment were removed
from the analysis. Another reason to remove trust from the question was that trust was measured
as an independent variable in the model. The scale used for this variable was that of Putrevu and
Ratchord (1997) in A model of Search Behaviour with an Application to Grocery Shopping.
Involvement (INV) was measured with Q7, having 14 different items from the scale used by
Gilles and Kapferer (1985); Measuring Consumer involvement Profiles. Details of the alpha
and mean and other factors will be explained in more detail in the latter part of this chapter.
Involvement of consumers is highly regarded in all technology products because of the specific
technological knowledge required to purchase high-tech products. Purchase intent (PI-Q8) was
measured using the scale from Aaker and Day (1980) in Marketing Research: Private and Public
Sector Decisions. The question had eight items in which respondents completed their answers
on a 1 to 10 scale. This was the independent variable based on the remaining six dependent
variables. The results of purchase decision explain the intentions of consumers and whether they
are happy with the retailer relationship marketing strategy and willing to move further to actually
buy the product. Salesperson likeability (SPL) was a major dependent variable for this study
(Q9). The question had 23 different items and used the scale of Brown, Gene, Widing II and
Coulter (1991), Kelley, Scott and Hoffman (1997), Michaels and Day (1985) and Saxe and Weitz

(1982). The items are based on the characteristics of salespeople desired by consumers. There are
a few items which are in reverse order in order to reduce bias and initiate respondents to think of
the answer from the right perspective. Also, this helps respondents to identify clearly the
attributes they need from the salesperson with whom they are dealing. In the retail industry, the
salespersons professional characteristics play a crucial role; therefore, the results of the question
will be discussed at more length and will determine most of the study so as to understand
whether salespeople are working on relationship-building tactics in their sales transactions. 133
Pre-satisfaction of consumers while going
Pre-satisfaction of consumers while going through the process of purchasing is measured in
question Q11. There were 22 items in this question which identified the pre-satisfaction level
views of respondents of the product, store and salesperson in general. The scale used for this
variable was from Ganesh, Arnold and Reynolds (1985) in Understanding the Customer Base of
Service Providers: An Examination of the Differences between Switchers and Stayers. However,
the analysis of the question is not mentioned in Chapter 4 because it was decided to remove it
from further analysis because the focus on the main business problems and research questions set
for the study would be lost. However, using AMOS structural equation modelling, a comparative
analysis could be undertaken by keeping the pre-satisfaction variable and labelling the analysis
as a rival model; then, by removing the variable from analysis again and labelling it as a
proposed model. The result without presatisfaction was taken for the proposed conceptual model.
The demographics of the respondents form the third part of the questionnaire. The demographics
include age, gender, education, place of residence and profession. The demographic question was
put last because of the general understanding that the respondents would feel relaxed in
answering the simple questions and would feel that the survey was nearly over. The most

important questions in the study were kept in the first two parts, when it was considered that
respondents general motivation to answer the questions accurately and without any bias was
All questions in the questionnaire were designed as closed-end questions. Multichoice questions
were used to allow respondents to choose the one most appropriate answer; different options
were measured using the Likert-type scale. According to Sudman and Blair (1998, p.255), a
closed question is defined as a question with response categories. The closed-end question is a
question in which respondents must choose the answer from a pre-defined set of responses.
Closed-end questions are efficient and reliable for getting exact answers from a group of people.
According to Sudman and Blair (1998, p.267) closed end questions force respondents to choose
the option that researchers desire to get. Respondents dont need to think too much in writing
their opinion. Closed-end questions reduce the cost of coding as well as the time taken to
complete; they also reduce the amount of probing. Respondents just need to choose an option
from among those they have been given.
3.7 Pilot Study A pilot study was performed with a convenience sample of 20 respondents in
order to investigate the scales. The goals in the pilot study were to investigate the reliability of
the scales and to check the scales face validity. Items were generated from the literature review
and with the involvement of marketing academics. Respondents indicated that the questionnaire
was too extensive and that they felt uncomfortable answering the same statement three or four
times. Cronbachs alphas, item-to-total correlations and exploratory factor analyses were used to
reduce the number of questions. Finally, marketing academics were asked to judge the
constructs content validity; they indicated that the selected items closely represented the

underlying constructs. After the pilot study, when no more abnormalities or errors were found,
the formal survey was organised for distribution in the six different countries.
3.9 Procedure The research was cross-sectional in nature and targeted at retail customers
intending to purchase laptop products from retail outlets. The research instrument was pre-tested
prior to the full-scale fieldwork. Pilot testing was conducted with a small representative sample
of 20 retail consumers within the Perth metropolitan area in 137 Western Australia. The main
purpose was to ascertain the relevance of the items in all the scales, as well as the general level
of understanding and ease of completing the questionnaire. As stated earlier, however, given that
four of the six scales had been previously used and validated in contexts similar to the current
research setting, particular impetus was placed upon the items and wording that constituted
relationship orientation and salesperson likeability. Given that the empirical literature within the
customerfirm context confirms the development of a psychological contract in close
relationships, it was anticipated that the construct also would be manifest within marketing
relationships that were more expansive in nature than market-based relationships. The sample
frame was chosen principally because the products and services offered by retailer firms were
specialised and technical in nature. Therefore, respondents would need to adopt a more proactive
role in nurturing the relationship with their retailer and, thus, increase the likelihood of the
prevalence of a psychological contract within the relationship. Therefore, the most appropriate
personnel to target within the retailer firms were salespeople who played a major hands-on role
within the relationship. This was critical given that the central aspect of the research was to
understand trust and commitment promised by the salesperson and, eventually, the retailer within
the relationship. The intercept survey, therefore, was addressed personally to gather more factual
information from consumers who were experiencing the purchase process within a particular

retail store. For convenience in the current research, tertiary business students were selected to
complete the questionnaire and, so that consumers could not make excuses on the basis of lack of
time, it was requested that they complete the questionnaire immediately. In making the initial
contact, respondents were shown an introduction letter developed for the pilot study during the
intercept survey. The purpose was to inform them about, and invite them to participate in, an
important research project related to technology products and the purchasing process. It was
realised that mail surveys would take too long to complete. Therefore, it was decided not to use
mail surveys but to restrict the survey method to the intercept surveys where respondents were
requested to complete their answers immediately. Initially, a survey population of 500 was
planned; however, the number of respondents was reduced to 400 for the intercept survey. The
final valid sample size in the research was 370.