CHAPTER 5 CONCLUSION AND RECOMMENDATION. 5.1 Conclusion The objectives of this study to explore the understanding of consumer propensity

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1 81 CHAPTER 5 CONCLUSION AND RECOMMENDATION 5.1 Conclusion The objectives of this study to explore the understanding of consumer propensity to observe and revealed the underlying factors in Jakarta and surroundings were fulfilled. The notion of this study was to acquire the understanding and discover the influencer of propensity to observe among undergraduate students in Jakarta and surroundings. The original research identified four specific factors which were essential to influencing propensity to observe. They were brand choice overload, self-confidence, propensity to conform, and risk aversion. Furthermore, brand choice overload, consumer self-confidence, and propensity to conform were found to directly affect the propensity to observe. Insignificant interaction was found on need for cognition. Consumers with high need of cognition were did observation and used other s consumer brand choice as helpful information. On the contrary, consumer propensity to minimize risk had no significant effect on propensity to observe. This study also indicated that even consumers with high self-confidence tended to observe others when facing brand choice overload. The current study done in Jakarta and surroundings using 330 samples of undergraduate students from 4 different universities had found three factors that were crucial to influence propensity to observe. They were consumer self confidence, need for cognition, and propensity to conform. In general, all the scales developed by previous study did have influence on the propensity to observe in Jakarta and surroundings, yet

2 82 the influences were mostly insignificant and weak. Therefore, itw as concluded that the factors were not appropriate for indicating its further association to propensity to observe. Against the expectation, the propensity to observe was found to increase in line with higher consumer self-confidence. It happened when consumer were facing excess of brand choices. However, the brand choice overload did not have direct association with propensity to observe. Furthermore, consumer self-confidence slightly affected the propensity to conform. Interestingly, the highly self-confidence consumer tend to conformed by observing other s consumer choice of brand. Consistent with previous study, highly cognitive consumers were associated with propensity to observe. Once again, it is significantly related to excess of brand choices. When there are so many brands too choose from, consumer with high need for cognition tends to observe other s consumer choice as reference. The available brands and the other s consumer brand choices represented information prior to making decision. This finding was identified during analysis of the overall 330 respondents in general. However, when the analysis was done to respondents from each university, there were some differences and similarities found. It happened because of different characteristic and preference of every segment. In summary, the current study had obtained the understanding of consumer propensity to observe in Jakarta and surroundings. The study also had done assessing the crucial factors of propensity to observe in this scope of research. However, statistical result indicates that only a small percentage of variance of propensity to observe could

3 83 be explained by the influencing factors. This indicates that there were other factors influencing consumer propensity to observe in Jakarta which was not covered in this research. Prior research done by Frontier Consulting Group and the Researcher indicated typical Indonesian s consumer charateristics, such as short term thinker, unplanned, technology illiterate. Those charateristics in some way were lead to low propensity to observe. When individuals were unplanned and had short term thinking, further observation were tend to be unnecessary. In addition, lack of capability in utilized the technology for some consumers was becomes a challenge as one way to observe. 5.2 Managerial Implication Based on the conclusion above, the findings indicate the importance of propensity to observe for all consumers under a condition of brand choice overload; given that number of brand is continue to expand. In case of Indonesia, according to Department of Intellectual Property, the numbers of new brand are keep increase from year to year in average of 3.5%. Consequently, the firm may want to tailor several strategies to deal with this situation. The firm has to concern on consumer propensity to observe. Furthermore, the strategy formulate has to be adjust to particular factors of propensity to observe. Propensity to observe is driven by the consumer self confidence, propensity to conform and need for cognition. This is mostly happen related to excess of brand choice. For retailer, utilizing in-store channel could be one way to deal with this issue. In-store channel could help the firm satisfy the consumer propensity to observe. In-store channel used by consumer for browsing, touch and feel the product, and social interaction. Thus, retailer can put some sign (e.g. best seller, no 1 product, etc) to

4 84 indicate particular brand within product category. Moreover, attractive layout of merchandising (e.g. lighting, color, etc) could be used to stimulate the consumer decision making while reduce the observation period. These strategies could be fit for the consumer with propensity to conform. The sign that indicated particular brand could help them in conforming confirming such an uncertain choice that they were about to decide. Firm could also make use of the community to influence the consumer. Observation represents the way of consumer to search more information about the brand or product. During this process, influencer is quite impactful even when consumer is highly cognitive and tends to conform. Highly cognitive consumers tend to related themselves with certain image or figure, therefore the community influence was essential for them. Firm can involve in certain community group to promote the benefit of the brands and build top of mind awareness. Prior research shows that Jakarta consumers like to socialize informally, therefore community influencer will be good channel to attract the consumer. As it mentioned before, some highly self-confidence consumer still look for observation to conform as they facing brand choice overload. Just as it stated that in-store channel help to consumers to build social interaction, thus creating shopping advice centre could be an option. For both of staple and fashion goods, retailers can have specific job task in each merchandise category for consumer to consult about their choice. For example, in department store, retailers can have shopping advice centre for cosmetic category, where consumer can ask more information about their product and suggest particular brand without seems to be an aggressive sales person. As well as in hypermarket, too many brands within one product

5 85 category increase consumer need for cognition through observation. Then, retailer can address someone to help the consumer in acquiring information related to certain brand or product. Furthermore, it also can be a way to do personalization that would increase consumer satisfactory level. Most of all of that strategy, human resource is the most crucial part. As the consumer is get smarter in their way, the firm must equip the human resource with enough knowledge and skill. As the sales people who will be mostly interact with consumer, understanding the consumer propensity to observe is essential. For highly self-confidence consumer, observing is the way to conform the choice, thus sales people have notice it and know how to deal with it. Firms may want to train the sales people with both of soft skill and hard skill in dealing with consumer. For example, sales people have to be able to read the consumer behavior and adjust to their needs. For uncertain consumer, sales people may help to suggest any brand mostly choose by other consumer. For highly cognitive consumer, sales people may show the advantages of certain brand that can relate them to certain image. However, the strategy may be somewhat different when it comes to segmented market. Every segment has its own characteristic and preference so it will need different strategy Recommendation for BINUS International In BINUS, propensity to observe was associated with consumer self-confidence. This type of consumer usually has unique thinking. This research indicated the higher consumer self-confidence lead to higher propensity to observe and it was the other way round compare to original research. It was happened consequently with the characteristic of Indonesian consumer which was unplanned. They were did not prepared for to avoid

6 86 the poor decision effect in the future. Instead, pride was the concerned. As a result, when the individual was highly self-confidence, they were seeking to adjust with the community to avoid social embarrassment. Then, recommended way to approach was using the third party influence. The firm can utilize the community as well as virtual community, since most of the BINUS students were seemed to be technology literate. Community was also a part of social interaction as social outcome was part of consumer self-confidence. Community opinion could lead to certain degree of individual confidence. This type of consumers happened to be looked for satisfying their interest as well as make them connect with their relative. Then, firm have to train the sales people that can show them the benefit of product that match their interest while connect them to their relative s circle Recommendation for UPH Since, UPH student was affected by the brand choice overload, and then differentiate the brand or product would be good approach. The retailer can highlight the benefit of certain brand through the visual merchandising. By showing the significant benefit or advantage of the brand would help consumer in indentify the brand. Retailer can put attractive sign on particular product like No 1 best seller in Japan, etc. It would seem more appealing for this type of consumers Recommendation for UNTAR For UNTAR students need of acceptance by other or related to certain image was essential. Therefore, community or social group could be used as a channel to attract this type of consumer. The community group can be a form of interest group where they will share about particular product. Through this community, it will lead them to highly need of cognition by their group. Creating a buzz within a certain community would also

7 87 affect their behavior. It would stimulate them to have higher need for cognition. Furthermore, the firm also has to show the connection of the certain brand with certain image or reputation. The used of endorser would be help in creating certain image Recommendation for UI The situation of students in UI was quite similar with UNTAR. Students of UI were a consumer that tends to looking for the way to get accepted on certain group or image. Therefore, making decision, connection with certain image or others was considered. The retailer can put some endorser on the advertisement that can stimulate their need for cognition. Then it would lead them to do an observation. During this stage, the firm has to make the look of product convincing to certain image as in the advertisement. As the brand choice overload was associated with this type of consumer, then highlighting the superior brand or particular brand was importance. Put the uniqueness of the brands could also help this type of consumer in observing. 5.3 Limitations The author found some limitations in this research. The statistical result shows this research model is inapplicable in Jakarta and surroundings. Limitation also come from sample used in which are undergraduate students and not well represent the population. Consequently, the findings may not reflect the behavior of consumer form mix occupations. Furthermore, the questionnaire was quite lengthy which may affect the respondent responses. 5.4 Future Research Recommendations The followings are the author s recommendations for future research:

8 88 1. The current study was done in general overview of consumer purchase behavior. The author recommends focusing on certain industry to have more specific findings on the consumer characteristics. Therefore, the result may have specified and greater implications on particular industry. 2. The usage of broader and diverse range of sample size. The current study use sample of 330 undergraduate students from 4 universities. Future research should use the more sample with mix occupations so it can well-represent the population. 3. The study indicates inapplicability of the research model. Therefore, the future research should re-assess the items used as the measurement to make the model more applicable.