CHAPTER III

3.1THEORETICAL CONCEPT

MARKETING:

Marketing is the study and management of exchange relationships.The American Marketing

Association has defined marketing as "the activity, set of institutions, and processes for
creating, communicating, delivering, and exchanging offerings that have value for customers,
clients, partners, and society at large."

The techniques used in marketing include choosing target markets through market analysis
and market segmentation, as well as understanding methods of influence on the consumer
behaviour.

From a societal point of view, marketing provides the link between a society's material
requirements and its economic patterns of response. This way marketing satisfies these needs
and wants through the development of exchange processes and the building of long-term
relationships.

In the case of non-profit organization marketing, the aim is to deliver a message about the
organization's services to the applicable audience. Governments often employ marketing to
communicate messages with a social purpose, such as a public health or safety message, to
citizens.

Customer:

A customer is an individual or business that purchases the goods or services produced by a

business. Attracting customers is the primary goal of most public-facing businesses, because
it is the customer who creates demand for goods and services. Businesses often compete
through advertisements or lowered prices to attract an ever-larger customer base.

Customers in opposition to two other classes of people: not-customers and non-customers:

Not-customers are either past customers who are no longer customers or potential
customers who choose to interact with the competition.
Non-customers are people who are active in a different market segment entirely.
In the field of customer service more often categorizes customers into two classes:

An external customer of an organization is a customer who is not directly connected

to that organization.
An internal customer is a customer who is directly connected to an organization, and
is usually (but not necessarily) internal to the organization. Internal customers are
usually stakeholders, employees, or shareholders, but the definition also
encompasses creditors and external regulators.
Preference:
Preferences could be conceived of as an individuals attitude towards a set of objects,
typically reflected in an explicit decision-making process (Lichtenstein & Slovic, 2006).
Alternatively, one could interpret the term preference to mean evaluative judgment in
the sense of liking or disliking an object (e.g., Scherer, 2005) which is the most typical
definition employed in psychology. However, it does not mean that a preference is
necessarily stable over time. Preference can be notably modified by decision-making
processes, such as choices (Brehm, 1956; Sharot, De Martino, & Dolan, 2009), even
unconsciously (see Coppin, Delplanque, Cayeux, Porcherot, & Sander, 2010).
Consequently, preference can be affected by a person's surroundings and upbringing in
terms of geographical location, cultural background, religious beliefs, and education.
These factors are found to affect preference as repeated exposure to a certain idea or
concept correlates with a positive preference.
 3.2 REVIEW OF LITERATURE

1)James M. Lattin and Randolph E. Bucklin, Journal of Marketing Research,Vol. 26, No. 3
(Aug., 1989), pp. 299-310
1)James M. Lattin(1989),in this study, consumers are exposed to pricing and promotional
activity by frequently purchased packaged goods, they may develop expectations that are
used as points of reference in evaluating future activity. The authors build a model to test for
the presence of these reference effects on brand choice behaviour. The findings suggest that
promotional activity has significant reference effects on consumer response.

2)Dodds, W. B., Monroe, K. B., & Grewal, D. (1991, August). Effects of price, brand, and
store information on buyers product evaluations. Journal of Marketing Research, 28, 307-
319.

Dodds, W. B (1991), In this report, a study of the effects of price, brand, and store
information on buyers' perceptions of product quality and value, as well as their willingness
to buy. Results indicate that price had a positive effect on perceived quality, but a negative
effect on perceived value and willingness to buy. Favourable brand and store information
positively influenced perceptions of quality and value, and subjects' willingness to buy.

3)Haemoon Oh(2000) , The Effect of Brand Class, Brand Awareness, and Price on Customer
Value and Behavioral Intentions. Journal of Hospitality & Tourism Research 24(2):136-162
3) Haemoon Oh (2000),The author introduces a comprehensive customer value framework
and tests an extended value model with lodging products. The extended value model in this
study newly incorporates the concepts of brand awareness, as compared to brand or product
class, and price fairness. Based on Baron and Kennys guideline for mediation analysis, this
study found the traditional customer value process to be useful for lodging research and
marketing. In addition, brand awareness and price fairness concepts were found to play
significant roles in the customer value process. The article includes discussions on both
managerial and research implications

4)Anil Mathur (2001) A Study of Changes in Brand Preferences Asia Pacific

Advances in Consumer Research Volume 4, Pages 133-139

4) Anil Mathur (2001, This paper presents a study of changes in brand preferences. Theory
and research is used to propose and test a model based on the proposition that changes in
brand preferences and their development are the result of life events that serve as markers of
life transitions. Changes are viewed to be the result of adjustments to new life conditions and
changes in consumption lifestyles that reflect consumer efforts to cope with stressful life
changes.

5) SIMON KNOX Institute for Advanced Research on Marketing, Cran eld School of
Management, Cran eld University, Cran eld, Bedford, MK43 0AL, UK ,DAVID
WALKER Synectics Europe, 10 Wyndham Place, London W1H 1AS, UK(2001) Measuring
and managing brand loyalty, JOURNAL OF STRATEGIC MARKETING 9 111128 (2001)

5) SIMON KNOX (2001), In this empirical study of grocery brands, such a measure was
developed in which both brand commitment and brand support were found to be necessary
and sufficient conditions for loyalty to exist. Based on this measure, four consumer
purchasing styles were identified and characterized as loyally, habitual, variety seekers
and switchers.

6)Ming H. Hsieh (2002) Identifying Brand Image Dimensionality and Measuring the Degree
of Brand Globalization: A Cross-National Study. Journal of International Marketing: Summer
2002, Vol. 10, No. 2, pp. 46-67
The author aims to answer two questions related to brand globalization: (1) whether the
pattern of brand image dimensionality is similar across international markets and (2) how
cohesive a brand image perception is in a global market. Results from a 20-country, 70-region
study provide concrete evidence that supports the applicability of the proposed benefit-based
multidimensional image structure that corresponds to consumers sensory, utilitarian, and
symbolic and economic need at both the global and the national level. On the basis of the
identified image dimensions, the author proposes an alternative approach to measuring the
degree of global brand image cohesiveness as an indicator of brand globalization. Global
brand image cohesiveness is calculated on the basis of the summation of Euclidean distances
between the column score of image dimensions of the home country (i.e., initial market) and
that of foreign countries. Furthermore, nations are clustered on the basis of these column
scores, and the resultant clusters correspond approximately to groups of countries that share
similar levels of economic development, cultural dimension, or geographic distance, which
suggests that national characteristics affect brand image perceptions. The findings provide
implications for the practice of global brand image management.

7)Peter C. Verhoef (2003) Understanding the Effect of Customer Relationship Management

Efforts on Customer Retention and Customer Share Development. Journal of Marketing:
October 2003, Vol. 67, No. 4, pp. 30-45

7)Peter C. Verhoef (2003), In this, author investigates the differential effects of customer
relationship perceptions and relationship marketing instruments on customer retention and
customer share development over time. The results show that affective commitment and
loyalty programs that provide economic incentives positively affect both customer retention
and customer share development.

8)Sagoff, M. (2003),On the relation between preference and choice,

Journal of Socio-Economics, 31, 587-598.

8)Sagoff, M. (2003),in this paper contends that the relation between preference and choice is
also stipulate. Both preference and choice exist in the eye of the beholder, so neither can
provide data for welfare economics.

9) Ball, D. Coelho, P.S. & Machas, A., 2004, The role of communication and trust in
explaining customer loyalty, European Journal of Marketing 38(9/10), 1275 1293.

9) Ball(2004),in this study investigate the impact of packaging, price and brand
awareness on brand loyalty. The marketing success of businesses depends on their
ability to continuously enhance their products packaging with competitive pricing and
brand awareness strategies in order to improve brand loyalty. Packaging, price and
brand awareness showed significant positive relationships with brand loyalty, which
implied their significant predictive influence on brand loyalty.

10)Werner Reinartz, Manfred Krafft, Wayne D. Hoyer (2004) The Customer Relationship
Management Process: Its Measurement and Impact on Performance. Journal of Marketing
Research: August 2004, Vol. 41, No. 3, pp. 293-305.

10) Werner Reinartz(2004),In this study, the authors (1) conceptualize a construct of the
CRM process and its dimensions, (2) operationalize and validate the construct, and (3)
empirically investigate the organizational performance consequences of implementing CRM
processes. As the result is that the implementation of CRM processes has a moderately
positive association with both perceptual and objective company performance.

11)Horsky, D., Misra, S. and Nelson, P. (2006),Observed and unobserved preference

heterogeneity in brand-choice models, Marketing Science, 25(4), 322-335.

11)Horsky, D., Misra, S. and Nelson, P. (2006), This paper extends the scanner-based choice
literature by explicitly incorporating individual-level brand preference data .as the result,
brand choice basically based on price.Price sensitivities are inflated because the average
preference-based consumer is implicitly assumed to be more willing to switch from his
preferred brand than is the real preference based consumer..

12)Malte Friese, Michaela Wnke and Henning Plessner (2006) Implicit Consumer
Preferences and Their Influence on Product Choice Psychology & Marketing, Vol.
23(9): 727740

12)Malte Friese(2006),In this article tested explicit and implicit preferences regarding
generic food products and well-known food brands were incongruent were more likely to
choose the implicitly preferred brand over the explicitly preferred one when choices were
made under time pressure. On the basis of these results, stresses the importance of impulsive
behaviour.
11)Gourville T John And Soman Dilip : Extremes Seeking when and why buyers or
consumers prefer Extremes: May 31 2007

11)Gourville T John (2007), in this research indicates that in certain predictable cases ,
adding more alternatives to an assortment leads buyers to choose either the most basic or the
most fully loaded product. Thus when a dealer or a buyer has to buy a bulk of paper rolls
from the industry the go on analysing on the quality and the promotional offers which they
are given by the different sellers of the paper industry. This leads to a choice for the product
which they have to buy.
12) O Amir, Jonathan Levav (2008) Choice Construction Versus Preference Construction:
The Instability of Preferences Learned in Context. Journal of Marketing Research: April
2008, Vol. 45, No. 2, pp. 145-158.

12) O Amir, (2008), In contrast, repeated choices of the people to learn their subjective
attribute weights, yielding preferences that are consistent across contexts. The difference
between choice construction and preference construction is of importance to marketing
managers because repeat purchase is typically interpreted as a signal of customer preference.
Author suggested preference might just be a learned solution to the choice problem and that
as soon as the competitive context changes, so will consumers' preferences.

13)Tolba, A., & Hassan, S. (2009). Linking customer-based brand equity with brand
market performance: a managerial approach. Journal of Product & Brand
Management, 18(5), 356-366.

13)Hassan, S. (2009), In this paper is to test the relationships between customerbased

brand equity and brand market performance. At their findings,loyalty and satisfaction
level were strongest predictors of brand preference and intention to purchase. Correlation
analyses supported the hypothesis that customer-based equity constructs are correlated
with brand market performance.

14)Nikolaus Franke, Peter Keinz, Christoph J. Steger (2009) Testing the Value of
Customization: When Do Customers Really Prefer Products Tailored to Their Preferences?.
Journal of Marketing: September 2009, Vol. 73, No. 5, pp. 103-121.

14)Nikolaus Franke(2009), t he authors conduct two studies in which they find that products
customized on the basis of expressed preferences bring about significantly higher benefits for
customers in terms of willingness to pay, purchase intention, and attitude toward the product
than standard products. This suggests that customization has the potential to be a powerful
marketing strategy. The firms willing to serve heterogeneous customer preferences need to
adapt their customization systems in such a way that they explicitly address the customers'
inability to provide valid preference information.

15)Annamalai Solayappan, Jothi Jayakrishnan (2010) on their article Customer

Preference for Branded Computers with Special Reference to Post Graduate Students
15)Annamalai Solayaappanv(2010),noted that purchase decision making is a complex
amalgam of needs and desires. It is influenced by factors such as consumer's societal role,
social and cultural environment, aspiration and inhibitions. According to this study, Quality,
Specification / Configuration, Reasonable price, Credit, Service, Experience person, Offers,
Style, Guarantee, Warrantee and Product availability are the inducing factors for the purchase
of branded computers among post graduate students of Chennai
16) Chen, M. K. & Risen, J. L. (2010). How Choice Affects and Reflects Preferences:
Revisiting the Free-Choice Paradigm, Journal of Personality and Social Psychology, 99(4),
573-594.

16 ) Chen, M. K.(2010), In this perspective, that choice affects preferences with the
perspective that choice reflects preferences. Thus, the empirical study of choice-induced
attitude change has not been able to control for the information revealed by choice. When
controlling for revealed preferences, however, psychologists have the right tools to study the
behaviour-induced construction of preferences. . The results suggest a reassessment of the
free-choice paradigm and, perhaps, the conclusions that have been drawn from it.

17)Kaberi Bhattacharyya (2011) in his study The Role of Media in Influencing

Customers Brand Choice.
17)Kaberi Bhattacharyya (2011) this study about the role of media in influencing the
customer brand choice toward the product. As the result, creating awareness and familiarity
about the brand and inducing customer to buy those product.

18)Attiya Kanwal (2011) Consumer preference of International brands over local brands
Field research U.P. Technical University, Lucknow
18)Attiya Kanwal (2011) this study determining consumer preference of international brands
instead if national or local brands. The price of a brand plays a fundamental role in the
consumers choice of brand. Consumers are seen to give preference to international brands.
Consumers regard international brands to be of better quality, more durable and reliable.
Local companies need to emphasize on the quality of their products .

19)Ghose, S. & Lowengart, O. J Market Anal (2013) Consumer choice and preference
for brand categories 1: 3. doi:10.1057/jma.2012.1

19) Ghose, S (2013), In this study, explore how the entrance of new international brands
affects market dynamics in a market where national, international and private brands are
present. Findings provides managerial interest especially with respect to what kinds of
product attributes differentially affect choice probabilities of different categories of brands
the international, the national and the private.

20)Effect of Brand trust, Brand affect and Brand Image on customer Brand Loyalty and
consumer Brand extension attitude In fmcg sector. Nischay K. Upamannyu, Garima Mathu ,
PRIMA: Practices and Research in Marketing, Volume 3 Issue 2, Published: 2013 New Delhi
3.2 (2013): 1-14.
20) Nischay K. Upamannyu (2013),In this research article, examined the Effect of Brand
Trust, Brand Affect and Brand image on Custo mer brand loyalty and also cause and effect
relationship is established between customer brand loyalty and consumer brand extension
attitude in context of FMCG sector .Results are analyzed through Multivariate analysis
(MANCOVA). Linear regression was also applied between independent variable and
dependent variable.

21)Effect of Customer Relationship Management on Customer Satisfaction

Rana Saifullah Hassan, Aneeb Nawaz , Maryam Nawaz Lashari , Dr. Fareeha Zafar

21) Rana Saifullah Hassan(2014),In the research study shows that customer relationship
management has significant effect on the customer satisfaction and both variables have
positive relation. The study concluded that CRM is playing a major role in increasing the
market share, customer loyalty, company knows that what are their customers, what are their
needs, and what will make them more satisfied.
22)Leonard Lee, Michelle P. Lee, Marco Bertini, Gal Zauberman and Dan Ariely. (2015)
Money, Time, and the Stability of Consumer Preferences. Journal of Marketing
Research 52:2, 184-199.

22)Leonard Lee (2015) , The authors propose that the money and time resources activate
qualitatively different modes of processing and influences the stability of consumer
preferences. These two factor influence with each other. Finally, cognitive noise associated
with the analytical processing that money consideration triggers could be reduced, resulting
in more consistent preferences.

24) Reham Ebrahim, Ahmad Ghoneim, Zahir Irani and Ying Fan. (2016) A brand preference
and repurchase intention model: the role of consumer experience. Journal of Marketing
Management 32:13-14, 1230-1259.

24)Reham Ebrahim(2016),This study seeks to develop a model that provides an

understanding of how brand knowledge and brand experience determine brand preference
and to investigate its impact on brand repurchase intention. The findings provide insights into
the relative importance of consumer perceptions on different brand knowledge factors in
shaping brand preferences. It also demonstrates the significance of consumers experiential
responses towards brands in developing their brand preferences that in turn influence brand
repurchase intention.

25) Geetha. M , Bharadhwaj .S Impulse Buying Behaviour In India, Asian Journal of

Business Research ISSN 2463-4522, Volume 6 Issue 1 2016.

25)Geetha. M(2016), Deliberate non- planning is an integral part of contemporary shopping

and impulse buying is an important hedonic behavior exhibited by consumers. Impulse
buying was looked at from various antecedents, underlying process, characteristics and
outcomes. Retailers should aid impulse buying inside the store by making it attractive. This in
turn would increase the time spent and also consumers plan for longer time when they decide
to shop in that store and also design strategies that prevents them using the list and aid them
on embarking on an open list for shopping.

26) Sheik Meeran, Semco Jahanbin, Paul Goodwin and Joao Quariguasi Frota Neto. (2017)
When do changes in consumer preferences make forecasts from choice-based conjoint models
unreliable?. European Journal of Operational Research 258:2,512-524.
26) Sheik Meeran (2017), This paper aims to address the prevalence of lability for consumer
durable products and its potential impact on the accuracy of forecasts. There are reasons to
expect that lability may be particularly evident where a product is subject to rapid
technological change and has a short product life-cycle. CBC model established for both
functional and innovative products and vary significantly over time, indicating changes in
consumer preferences and causes large differences.

1)James M. Lattin and Randolph E. Bucklin, Journal of Marketing Research,Vol. 26, No. 3
(Aug., 1989), pp. 299-310
2)Dodds, W. B., Monroe, K. B., & Grewal, D. (1991, August). Effects of price, brand, and
store information on buyers product evaluations. Journal of Marketing Research, 28, 307-
319.

3)Haemoon Oh(2000) , The Effect of Brand Class, Brand Awareness, and Price on Customer
Value and Behavioral Intentions. Journal of Hospitality & Tourism Research 24(2):136-162
4)Anil Mathur (2001) A Study of Changes in Brand Preferences Asia Pacific
Advances in Consumer Research Volume 4, Pages 133-139.

5) SIMON KNOX Institute for Advanced Research on Marketing, Cran eld School of
Management, Cran eld University, Cran eld, Bedford, MK43 0AL, UK ,DAVID
WALKER Synectics Europe, 10 Wyndham Place, London W1H 1AS, UK(2001) Measuring
and managing brand loyalty, JOURNAL OF STRATEGIC MARKETING 9 111128 (2001).

6)Ming H. Hsieh (2002) Identifying Brand Image Dimensionality and Measuring the Degree
of Brand Globalization: A Cross-National Study. Journal of International Marketing: Summer
2002, Vol. 10, No. 2, pp. 46-67
7)Peter C. Verhoef (2003) Understanding the Effect of Customer Relationship Management
Efforts on Customer Retention and Customer Share Development. Journal of Marketing:
October 2003, Vol. 67, No. 4, pp. 30-45

8)Sagoff, M. (2003),On the relation between preference and choice,

Journal of Socio-Economics, 31, 587-598.

9) Ball, D. Coelho, P.S. & Machas, A., 2004, The role of communication and trust in
explaining customer loyalty, European Journal of Marketing 38(9/10), 1275 1293.
9) Ball, D. Coelho, P.S. & Machas, A., 2004, The role of communication and trust in
explaining customer loyalty, European Journal of Marketing 38(9/10), 1275 1293.

10)Werner Reinartz, Manfred Krafft, Wayne D. Hoyer (2004) The Customer Relationship
Management Process: Its Measurement and Impact on Performance. Journal of Marketing
Research: August 2004, Vol. 41, No. 3, pp. 293-305.

11)Horsky, D., Misra, S. and Nelson, P. (2006),Observed and unobserved preference

heterogeneity in brand-choice models, Marketing Science, 25(4), 322-335.

12)Malte Friese, Michaela Wnke and Henning Plessner (2006) Implicit Consumer
Preferences and Their Influence on Product Choice Psychology & Marketing, Vol.
23(9): 727740

13)Gourville T John And Soman Dilip : Extremes Seeking when and why buyers or
consumers prefer Extremes: May 31 2007

14) O Amir, Jonathan Levav (2008) Choice Construction Versus Preference Construction:
The Instability of Preferences Learned in Context. Journal of Marketing Research: April
2008, Vol. 45, No. 2, pp. 145-158.

15)Tolba, A., & Hassan, S. (2009). Linking customer-based brand equity with brand
market performance: a managerial approach. Journal of Product & Brand
Management, 18(5), 356-366.

16)Nikolaus Franke, Peter Keinz, Christoph J. Steger (2009) Testing the Value of
Customization: When Do Customers Really Prefer Products Tailored to Their Preferences?.
Journal of Marketing: September 2009, Vol. 73, No. 5, pp. 103-121.

17)Annamalai Solayappan, Jothi Jayakrishnan (2010) on their article Customer

Preference for Branded Computers with Special Reference to Post Graduate Students .
18) Chen, M. K. & Risen, J. L. (2010). How Choice Affects and Reflects Preferences:
Revisiting the Free-Choice Paradigm, Journal of Personality and Social Psychology, 99(4),
573-594.
19)Kaberi Bhattacharyya (2011) in his study The Role of Media in Influencing
Customers Brand Choice.
20)Attiya Kanwal (2011) Consumer preference of International brands over local brands
Field research U.P. Technical University, Lucknow
21)Ghose, S. & Lowengart, O. J Market Anal (2013) Consumer choice and preference
for brand categories 1: 3. doi:10.1057/jma.2012.1

22)Effect of Brand trust, Brand affect and Brand Image on customer Brand Loyalty and
consumer Brand extension attitude In fmcg sector. Nischay K. Upamannyu, Garima Mathu ,
PRIMA: Practices and Research in Marketing, Volume 3 Issue 2, Published: 2013 New Delhi
3.2 (2013): 1-14
23)Effect of Customer Relationship Management on Customer Satisfaction

Rana Saifullah Hassan, Aneeb Nawaz , Maryam Nawaz Lashari , Dr. Fareeha Zafar

24)Leonard Lee, Michelle P. Lee, Marco Bertini, Gal Zauberman and Dan Ariely. (2015)
Money, Time, and the Stability of Consumer Preferences. Journal of Marketing
Research 52:2, 184-199.

25) Reham Ebrahim, Ahmad Ghoneim, Zahir Irani and Ying Fan. (2016) A brand preference
and repurchase intention model: the role of consumer experience. Journal of Marketing
Management 32:13-14, 1230-1259.

26) Geetha. M , Bharadhwaj .S Impulse Buying Behaviour In India, Asian Journal of

Business Research ISSN 2463-4522, Volume 6 Issue 1 2016.

27) Sheik Meeran, Semco Jahanbin, Paul Goodwin and Joao Quariguasi Frota Neto. (2017)
When do changes in consumer preferences make forecasts from choice-based conjoint models
unreliable?. European Journal of Operational Research 258:2,512-524.