EXPLORING THE INFLUENTIAL FACTORS TO THE PERCEIVED VALUE AND PURCHASE INTENTION OF ONLINE LUCKY BAGS

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1 EXPLORING THE INFLUENTIAL FACTORS TO THE PERCEIVED VALUE AND PURCHASE INTENTION OF ONLINE LUCKY BAGS Wann-Yih Wu Chinese Culture University & National Cheng Kung University, Taiwan No. 1, University Road, Dept. of Business Administration, National Cheng Kung University, Tainan City 701, Taiwan. Meng-Kuan Lai National Cheng Kung University, Taiwan No. 1, University Road, Dept. of Business Administration, National Cheng Kung University, Tainan City 701, Taiwan. Shin-Jen Wu National Cheng Kung University, Taiwan No. 1, University Road, Dept. of Business Administration, National Cheng Kung University, Tainan City 701, Taiwan. Chen-Su Fu* National Cheng Kung University, Taiwan No. 1, University Road, Dept. of Business Administration, National Cheng Kung University, Tainan City 701, Taiwan. *Corresponding Author: Chen-Su Fu Add: No. 1, University Road, Dept. of Business Administration, National Cheng Kung University, Tainan City 701, Taiwan. Abstract This study based on bundling theory, attribute model, and appraisal theory aims to examine the factors influence consumers buying decision to online lucky bags. Consumers perception of product composition controllability, discount, perceived risk, and hope are adopted as possible factors to influence consumers perceived value and purchase intention toward lucky bags. The reason why consumers are willing to purchase uncertainty merchandise is not realized for sure, and previous studies regarding lucky bags on the website are limited. This is the first paper to discuss the factors that influence consumers purchase intention toward online lucky bags. An empirical test is conducted to identify how those factors impact consumers buying decision. The analytical results of this study indicated that discount makes consumers to perceive higher value and more intention toward buying luck bags for high level of perceived controllability. Hope moderates the effects of perceived controllability, discount and perceived risk on consumer s perceived value and purchase intention, so marketers should try to increase consumer s hopes for increasing consumer s perceived value and arousing consumers willingness to purchase. Keywords: Online lucky bags, bundling, perceived controllability, discount, hope, perceived value, and purchase intention COPY RIGHT 2012 Institute of Interdisciplinary Business Research 1

2 1. Introduction Lucky bags in Asia are one of the special promotion activities that are made with grab bags filled with unknown random contents sold by department stores or other marketing channels at a special discount during the beginning days of the New Year (Wikipedia, 2007). Originally, lucky bags are a way for stores to dump excess merchandise from the previous year. So far, lucky bags are sold as a lavish New Year's event rather than a way for stores to clean out remainder products (Wikipedia, 2007). Department stores hope to increase sales, draw people s attention, and attract customers patronage with lucky bag. In the recent years, this promotion tactic has been extended in different ways. Not only department stores sell lucky bags, apparel stores also sell its own lucky bags for promotion, even electric consumer product companies may offer lucky bags for specific events. For example, for the opening of the Apple store in San Francisco in 200, Apple Inc. sold lucky bags containing a mix of software, audio accessories, and a type of ipod at 20 USD (Wikipedia, 2007). Along with the popular of trading online, lucky bags are also adopted as a promotion tactic by an online retailer. As far as online retailers concerned, lucky bag is usually sold during a sales period for clearance sale purpose. The reason why consumers are willing to purchase uncertainty merchandise is not realized for sure, and previous studies regarding lucky bags on the website are limited. This research intends to focus on discussing the reasons influencing consumers perceptions toward lucky bags on the website. The purposes of this study are three folds: (1) to explore the elements that directly influence consumers perceived value and purchase intention toward lucky bags; (2) to understand the interaction effects influencing consumers perceived value and purchase intention toward lucky bags, and () to reveal the moderating effects of hope on the influence of consumers perceived value on purchase intention toward lucky bags. 2. Theoretical Background and Hypotheses Development 2.1 Perceived Controllability of Product Composition Product composition refers to the products bundle in the same package; in this research, it is the products containing in the lucky bag. Online retailers who sell lucky bags have two opposing formulas to decide product composition, one formula is letting consumers request the product attributes such as color, style, material etc. and the retailers will commit to do their best to meet their requests, while the other is rejecting consumers requisition and the retailers will emphasis the randomness of product composition. When considering different ways to compose product composition of lucky bags, consumers perceive different levels of controllability. Lunardo and Mbengue (2009) posit that perceived control has great impacts on shopping behaviors. According to the two-level hierarchical model of perceived behavioral control suggested by Ajzen (2002), controllability is defined as the actor s perceived control level over the behavior. Consumers perceived controllability of the product composition of lucky bags may have some influence on their buying decision since product composition is an important attribute of bundling. The advantage of bundling compare to unbundling is that consumers have higher evaluation on one of the product composition so that the overall evaluated value is higher than the aggregated price (Guiltinan, 1987). Naylor and Frank (2001) indicated that bundling goods would reduce consumers time or psychic cost (non-price costs) and result in higher perception of value. Different types of product composition would affect consumers evaluation (Nguyen et al., 2009). For example, Guiltinan (1987) explained the complementary product effect with the economic theory. Under the condition of complementary relationship, the reservation price of one product will be increased if the other is also purchased (RPa/b>RPa or RPb/a>RPb; a and b are two separate products; RP presents the reservation price) and the reservation price of the bundling will be more than the bundling of independent products (RP(a+b)=RPa/b+RPb/a>RPa+RPb). The raising reservation price implies that complement products would probably enhance current consumer surplus (the difference between reservation price and real price); when consumer surplus on the bundle composition increase, the chances for consumer to buy the bundling increase (Guiltinan, 1987). In addition, the completeness of the product composition raises consumer s perceptions of value in service industry because consumers prefer an all-inclusive bundling to separate products to prevent extra problems (Naylor & Frank, 2001). Ha (2006) further examined the e-reverse bundling sold online and found that consumers can choose separate products as a bundle and have an additional discount for different product amount. Such e-reverse bundling offers new benefits and arouses more perceived value than traditional bundling. The variety of the assortment and product choice of the composition offers enjoyment to consumers (Ha, 2006). 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3 Especially, by lowering non-monetary cost or giving consumers flexible composition choices, the more the product composition can correspond to consumers expectation, the higher will be the probability to raise consumers evaluation toward the bundling. Likewise, researchers suggest that perceived controllability affect consumers behavior (Choi & Mattila, 2008). Consumers perceived controllability influences the adoption and usage intention of e-commerce (Hsu & Chiu, 200; Huang, 2008). According to previous discussions, we infer that when consumers can influence the product composition through giving requests to retailers (the controllability of product composition is high) they will perceive higher value toward the lucky bags and have higher willing to buy. Thus, we hypothesize that: H1: Consumers may have higher perceived value when consumers perceived controllability of lucky bags product composition is high. H2: Consumers may have higher purchase intention when consumers perceived controllability of lucky bags product composition is high. 2.2 Discount When marketers adopt a price bundling strategy, a combination of their products is offered as a bundle at a lower price (Kotler & Armstrong, 2009; Kotler & Keller, 2006). The same situation happens to lucky bags. Yadav (199) adopted Thaler s (198) proposition to explore consumers overall perceived value formed by their evaluation of a bundle discount offer, and suggested to investigate buyer s overall utility by two components, acquisition utility and transaction utility. Acquisition utility depends on the value received compared to the pay out; it is the net utility from the actual price and the value equivalent of the product (Thaler, 198). Transaction utility depends on the perceive merit of the deal; it is measured by the comparison between the actual price and the reference price (Thaler, 198). According to Thaler (198), low price could enhance both acquisition utility and transaction utility that contributing to the overall value and purchase intention. Hence, we infer that when evaluating lucky bags, higher discount could enhance the overall value and purchase intention of lucky bags. On the other aspect, in consumers sacrifice components of perceived value, the price is an essential component which includes monetary price and non-monetary price (Grewal et al., 1998). For consumers who view monetary price pivotal, whatever reduces the monetary sacrifice will increase the consumers perceived value (Zeithaml, 1988). Perceived value can be defined as the consumers assessment of the utility of a product based on the consumers perceptions of what they give and receive in return (Ha, 2006; Naylor & Frank, 2001; Zeithaml, 1988). In other words, consumers perceived value is a trade-off between perceived benefit and cost (Chiou, 200; Lin & Wang, 2006). Grewal, Krishnan, Baker, and Borin (1998) inferred that higher discount of product price will positively influence consumers perceived value and purchase intension because the presentation of a discount forms a perception of saving. Accordingly, if the marketer set higher discount for lucky bags, the consumers monetary cost will be reduced, and the perceived value and purchase intention will be expected to increase. Thus, we propose that: H: Consumers may have higher perceived value toward Lucky bags when a higher discount of lucky bags is offered. H: Consumers may have higher purchase intension toward Lucky bags when a higher discount of lucky bags is offered. 2. The Perceived Risk of Lucky Bags Researchers consider that shopping at home (e.g., telephone shopping, television shopping or online shopping) may lead to higher perceived risk than in-store shopping, since the product cannot be touched or examined before purchasing (Cox & Rich, 196; Huang et al., 200; Kim & Lennon, 2000; Soo, 1999). This situation may also result in higher perceived risk when consumers buy the lucky bags from the website. Two features of online lucky bags including purchase through internet and random product composition generate perceived risk of online lucky bags. Perceived risk is regarded as a part of non-monetary sacrifice that consumers may perceive but it is the least studied element of perceived sacrifice (Snoj et al., 200). Agarwal and Teas (2001) adopted the concept that consumers consider the future uncertainty such as the use or repair of the purchased product as a component of risk and generate their perceived value including this risk. As a part of cost component of the perceived value, the perceived risk should show a negative effect on perceived value. Researchers had already examined the effect that the lower COPY RIGHT 2012 Institute of Interdisciplinary Business Research 17

4 the perceived risk, the higher the perceived value can be generated (Agarwal & Teas, 2001; Snoj et al., 200). This negative relationship is also expected while evaluating lucky bags. Furthermore, individuals risk perception and tolerance are different because of individual s characteristics. Soo (1999) indicated that only people with higher degree of risk tolerance will have high intention to shopping online. Those online shoppers usually pay attention to the sellers brand and performance in a mature e-commerce setting (Yen & Lu, 2008). On the other hand, Laroche et al. (1996) proposed that consumers confidence about a brand will positively influence their intention to buy. Park et al. (200) further suggested that confidence is the inverse of perceived risk; since confidence contribute to consumers purchase intention, the researchers inferred that there is a negative relationship between perceived risk and online apparel purchase intention. Accordingly, the negative relationship between consumers perceived risk and the perceived value and purchase intention of lucky bags are predicted, and the hypotheses are generated. H: Consumers may have higher perceived value toward lucky bags when their perceived risk is lower. H6: Consumers may have higher purchase intension toward lucky bags when their perceived risk is lower. 2. Interaction between Perceived Controllability and Discount From previous inference, product composition can be controlled or not is very critical for consumers to evoke different level of value perception and purchase intention; higher discount could enhance higher perceived value and purchase intention. However, when consumers evaluate the merchandises, consumers may not have the plan to buy all the products composing in the bundling, so the marketer must offer substantial enough savings for consumers to buy the bundling (Kotler & Keller, 2006). In other words, if the perceived controllability of product composition provides more incentive for consumers to purchase, even though the discount is lower, consumers are still willing to buy. Thus, we infer that if the product composition is controllable, the level of discount make less influence on perceived value and purchase intention. Oppositely, if the product composition is not controllable, consumers may evaluate the composition less and the discount level could effect more on consumers value and purchase intention. Using the inference, perceived controllability and discount of lucky bags may have interaction effect toward the perceived value and purchase intention of Lucky bags. H7: There may be an interaction between perceived controllability and discount on perceived value of lucky bags. When the product composition is not controllable, the impact of high discount on perceived value can be greater. H8: There may be an interaction between perceived controllability and discount on purchase intention of lucky bags. When the product composition is not controllable, the impact of high discount on purchase intention can be greater. 2. Interaction between Perceived Controllability and Perceived Risk Unless consumers can reduce the perceived risk, they are unlikely to make a purchase decision with uncertainty (Cox & Rich, 196; Park et al., 200). Consumers typically keep searching product information in uncertain situations until they feel comfortable to make a decision by ensuring that the consequence of making a decision is less risky (Chu et al., 200; Park & Stoel, 200). For Lucky bags, product composition is a cue for consumer to evaluate. When the product composition can be controlled by consumers themselves, the confidences for them to make the purchase will be stronger and the uncertainty will be reduced. Since the uncertainty may be reduced from promising consumers to control product composition, the impact of perceived risk on perceived value and purchase intention may be improved. In addition, Roselius (1971) suggested that consumers perceive higher risk would be more interested in strategies that can reduce risks. Accordingly, we infer that consumers with higher perceived risk will consider controllable product composition has greater effect on perceived value and purchase intention. Thus, we hypothesize that: H9: There may be an interaction between perceived controllability and perceived risk on perceived value of lucky bags. When consumers perceived risk is high, the impact of controllable product composition on perceived value can be greater. H10: There may be an interaction between product composition and perceived risk on purchase intention of lucky bags. When consumers perceived risk is high, the impact of controllable product composition on purchase intention can be greater. COPY RIGHT 2012 Institute of Interdisciplinary Business Research 18

5 2.6 Interaction between Discount and Perceived Risk The higher product discount implies a lower selling price. Sarin et al. (200) referred that a bundle discount offers a risk-return tradeoff to consumers who purchasing the bundle and lower the financial risk. As the price is lower, the perceived risk of an incorrect purchase may be lower. White and Truly (1989) indicated that price has a positive relationship with financial risk (price increases resulted in financial risk increases), but has no significant effect on performance risk. Roselius (1971) claimed that consumers perceive higher risk would be more interested in risks reducer such as price discount. Thus, discount and perceived risk may have an interaction effect toward perceived value and purchase intention. We assume that discount has greater impacts on perceived value and purchase intention for consumers with higher perceived risk, so the hypotheses are generated as below. H11: There may be an interaction between discount and perceived risk on perceived value of lucky bags. When consumers perceived risk is high, the impact of discount on perceived value can be greater. H12: There may be an interaction between discount and perceived risk on purchase intention of lucky bags. When consumers perceived risk is high, the impact of discount on purchase intention can be greater. 2.7 Hope According to appraisal theory, people appraise the environment along five dimensions: goal congruency, personal agency, certainty, normative/moral compatibility, and importance (Maclnnis & Mello, 200). Dimensions including goal congruency, certainty, and importance are relevant to the evoked positive emotion-hope (Maclnnis & Mello, 200). O'Shaughnessy and O'Shaughnessy (200) explained that hope is derived from an uncertainty but possible and desired outcomes. The importance of the goal-congruent consequences to consumer forms a main element of hope which is the intensity of hope, or yearning (Maclnnis & Mello, 200). Since hope is a positive emotion that can be aroused by stimulate, marketers can adopt marketing tactics on advertisement to vary consumers hope (Maclnnis, 200). O'Shaughnessy and O'Shaughnessy (200) further indicated that advertising promises and therefore raises hope. In this study, hope is taken to realize how marketers online can operate advertisement of lucky bags to vary consumers hope and influence the impact of perceived controllability, discount and perceived risk. People who are hopeful act as if they believe the desired outcome will occur although it has not happened yet (O'Shaughnessy & O'Shaughnessy, 200). Likewise, people who are hopeful for lucky bags may act as if they believe that what they want will be obtained through purchasing lucky bags. With hope, consumers will evaluate the advertising information differently. When hope is strong, the yearning components of hope will alter the information processing, and people will tend to attend messages that suggest the goal-congruent outcome is possible because they are more motivated to process these messages (Maclnnis & Mello, 200). The attributes including discount and perceived controllability of product composition are supposed to induce consumers perceived value and purchase intention and suggest the goal-congruent results that consumers want to obtain low cost and favorite products is possible. Since hope will be the moderator to influence the advertising messages effect on consumers attitude (Maclnnis & Mello, 200), hope may also moderate the advertised attributes effect on perceived value and purchase intention. Thus, we hypothesize that: H1: When hope is high, the impact of product composition perceived controllability on perceived value can be enhanced. H1: When hope is high, the impact of product composition perceived controllability on purchase intention can be enhanced. H1: When hope is high, the impact of high discount on perceived value can be enhanced. H16: When hope is high, the impact of high discount on purchase intention can be enhanced. Consumers mood state can influence the perceived risk; people in positive moods assume risks less threatening than in negative moods (Ding et al., 200; Park et al., 200). As a positive emotional state (Wakefield & Baker, 1998), hope could be inferred to reduce the consumers perceived risk. Maclnnis and Mello (200) indicated that the negative impact of advertising risk on choice is diminished while consumers with strong hope. Moreover, the yearning associated with hope will shift consumers evaluation about risks and make them underestimate risks; also, the yearning and uncertainty components of hope may reduce the importance of the risky consequence (Maclnnis & COPY RIGHT 2012 Institute of Interdisciplinary Business Research 19

6 Mello, 200). As a result, hope may moderate the relationship between perceived risk and perceived value and purchase intention. H17: When hope is high, the impact of perceive risk on perceived value can be reduced. H18: When hope is high, the impact of perceive risk on purchase intention can be reduced. Based on the above research hypotheses, a research framework is developed as shown in Figure 1.. Methodology.1 Research Design [Insert Figure 1 about here] A 2 (perceived controllability: controllable or not controllable) x 2 (discount: high or low) x 2 (perceived risk: high or low) factorial design is used to empirically test the research hypotheses. Perceived controllability and discount are between-subjective design while perceived risk that different form of consumers perception is withinsubjective design. Consumers perceived risk is divided into two groups according to the calculated scores of measuring items. In this research, eight experimental conditions are adopted..2 Research Product Selection Lucky bag is widely used in apparel category online shop. According to MIC survey (2006), apparel and accessory is the top one category that purchased by female online shopping users. In addition, male users are also increasing their purchase in apparel online. The major components of this vendee group are students and fresh person who just graduate within age range from 20 to 29 (MIC 2006). Considering the most popular category of internet shopping and the acceptable product price by main internet users, apparel is the most common and affordable category for most online shoppers. As a result, apparel is adopted as the survey product.. Experimental Materials In this study, four experimental advertising web pages are created. To collect data through internet, the materials are edited through questionnaire website. Fictitious web pages are created according to the Yahoo! bidding pages which actually sell lucky bags. The information of product composition and discount are derived from the makeup web pages. Four types web pages are manipulated in terms of perceived controllability (controllable vs. not controllable) and discount (high vs. low), and other information including product photos, product descriptions, and so on are exactly the same as the Yahoo! bidding pages.. Questionnaire Design The questionnaire includes the manipulation checks of perceived controllability and discount and the measures of perceived risk, perceived value, purchase intention and hope. Besides, respondents are asked to rate one question regarding their attitude toward the advertising: I like these clothes that shown on this webpage. If they do not like the presented clothes, the photos will need to be replaced to prevent a bias result. All the questionnaire items are shown in Appendix. A 7-point Likert scale is adopted for all questionnaire items ranged from 1=extremely disagreement to 7=extremely agreement. In the last section of the questionnaire, respondents need to state their personal information including gender, age, income, and their desire of buying new clothes recently. Independent Variables The perceived controllability of lucky bags is discussing whether the consumers can control the composition inside Lucky bags or not. Ha (2006) presented two different product composition conditions to respondents. According to lucky bags online purchasing websites, two extreme conditions including consumers can not make any request and consumers can make requests that retailer will try to accomplish are adopted in reality. Hence, these two conditions are adopted and examined in this study to understand the influence of perceived controllability. Discount refers to the discount level that lucky bags retailers offer on the online purchasing websites. The discount level is also searched on the online shops to know the range of discount levels that is really offered. Former researchers determined the research price based on pretest, and set different price levels that are distinguishable but still within respondents acceptable price range (Dodds, Monroe,& Grewal 1991). Following the manipulation procedures as proposed by Dodd s et al. (1991), high level discount and low level discount is set according to the real discount level and different discount levels that can be distinguished among respondents. COPY RIGHT 2012 Institute of Interdisciplinary Business Research 20

7 Perceived risk toward lucky bags may occur when consumers purchase lucky bags online. Financial risk, performance risk, social risk and psychological risk are generally adopted as risks of product purchases. When consumers purchase on the Internet, they would further concern the security and privacy risk (Miyazaki & Fernandez, 2001). Combining risks from product purchasing and risks from purchasing online, consumers may confront these five facets of perceived risks when buying online lucky bags. Two components of perceived risk are chance and danger aspects which mention probability and severity of unfavorable consequences (Peter & Tarpey Sr 197). Each facet of perceived risk scores is computed by multiplying the scores of two components and the score of overall perceived risk is measured by summation of each perceived risk scores. Ten questions from Peter and Tarpey Sr (197) are used in this study..6 Dependent Measures The perceived value is the difference between the benefits of lucky bags given to consumers and the costs consumers have to pay. Five questions are adopted from Dodds et al. (1991) and modified to suit the context of lucky bags. As shown in Appendix, the third question is described as a reverse item to check the effectiveness of the response. Purchase intention in this study is consumers willingness to buy Lucky bags. Five measurements are adopted from the research of Dodds et al. (1991) and modified for Lucky bags..7 Moderator Measures: Hope The direct effect of perceived controllability, discount and perceived risk on perceived value and purchase intention could be moderated by some factors. To measure hope, questionnaire items are designed from two indicators: uncertainty/possibility and yearning (Maclnnis & Mello 200), each including three questionnaire items. The score of hope is counted from the sum of the questions regarding uncertainty/ possibility multi sum of items regarding yearning (Maclnnis & Mello 200)..8 Pretest The pretest is mainly tested for the effectiveness of manipulation of perceived controllability and discount. The improvements of experimental web pages and questionnaire are completed before formal data collection according to the results of pretest. To access the potential consumers of online lucky bags, the data are collected through online questionnaire website. The questionnaire and experimental advertising web pages selling lucky bags are designed for online data collection. Four kinds of virtual web pages that designed for the 2 (perceived controllability) x 2 (discount level) conditions are assigned to respondents when they connect to a particular link. After reading the virtual web page, respondents are asked to answer the self-administered questionnaire. To prevent respondents from omitting any questions, they can only submit the answer sheet after fulfilling all the questions. In the pretest, 219 respondents participated in the study through a convenience sampling on internet. A total of 19 valid samples were collected. Paired t-test was adopted to check the effectiveness of the manipulations of perceived controllability and discount. The analytical results shows that the manipulations of perceived controllability (t=.18, p=.000) and discount (t=.608, p=.000) are satisfied. Through factor analysis, the results show that the internal consistency with Cronbach s alpha 0.7 and t h e reliability of e a c h construct measurement with the item-to-total correlation 0. are acceptable. Consequently, the questionnaire is suitable for formal data collection..9 Participants and Procedure Respondents of formal data collection are accessed through Internet and given linkage to the questionnaire by or information from Bulletin Board Systems. Four virtual online lucky bags selling pages are designed according to actual web pages with some modifications of wordings to correspond with manipulation conditions. Respondents are requested to answer the questionnaire after reading the assigned web page of lucky bags. A total of 826 respondents were accessed through Internet and 79 responses were valid.. Results and Discussions.1 Sample distribution Among the 79 valid samples, female occupied 6.8%. Most respondents are aged between 20 and 29 (79.%) which is corresponding to the major age components of online vendee group suggested by MIC (2006). COPY RIGHT 2012 Institute of Interdisciplinary Business Research 21

8 Furthermore, 0.81% respondents have monthly income under NT$,000. The income distribution is consistent with the supposed low income of the major components of vendee group who are students and fresh person. Especially, 76.07% of respondents desire to buy new clothes, thus they may have higher intentions to realize the information of lucky bags..2 Reliability and Validity As shown in Table1, the Cronbach s α of hope, perceived value and purchase intention are all greater than 0.7, which shows acceptable reliability and factor internal consistency. The item-to-total correlations of each item are all greater than 0. showing that the measurement is reliable. [Insert Table 1 about here] The factor structure is confirmed by confirmatory factor analysis to obtain discriminate validity. For perceived value, the one factor model of perceived value shows good model fit (χ 2 =2.92, df=, RMR=.027, GFI=.98, AGFI=.91). Likewise, the one factor model of purchase intention shows good model fit (χ 2 =12.21, df=, RMR=.08, GFI=.91, AGFI=.822). Two factors, uncertainty/possibility and yearning, are extracted from the six items measuring hope according to the results of factor analysis. The two factors model of hope is better (χ 2 =11.897, df=8, RMR=.1, GFI=.98, AGFI=.862) than one factor model (χ 2 =72.1, df=9, RMR=.2, GFI=.77, GFI=.09).Therefore, this study demonstrated good discriminate validity..2 The Measuring Index of Variables For perceived controllability and discount, the indexes of each variable were counted by the average of manipulation item scores and transferred in to low and high level groups by mean (.07,.7). The index of the other independent variable, perceived risk, is generated as the summation of the possibility component multiply important component for five facets of perceived risk. The index is also divided into low perceived risk and high perceived index by mean. The moderate variable, hope, was generated by the following function which is according to the suggestion of research (Maclnnis & Mello 200): Hope= (uncertainty/ possibility * yearning *.82)/7.60 The weights of factors are the explained variance of the factors. The index of hope is further classified into two groups (low and high level of hope). The medial 0% data are omitted in testing moderator effect of hope. Respondents are regarded as the high level of hope on lucky bags if their score of hope is above 6%. Likewise, respondents are regarded as the low level of hope if their score of hope is below %. The scores of perceived value and purchase intention are both counted by the average of all items measuring the variables.. Hypotheses Testing: The Direct Effect of Independent Variables The direct effect of perceived controllability is significant on perceived value (F=.760, p=.000) and purchase intention (F=119.81, p=.000). As shown in Figure 2, respondents have higher perceived value and purchase intention when perceived controllability is high (M perceived value =.; M purchase intention =.2) than product composition is low (M perceived value =.98; M purchase intention =.7). From the results, H1 and H2 are supported. Therefore, the effect of perceived controllability on perceived value and purchase intention is examined in the application of lucky bags. In term of discount, the direct effect is very significant on perceived value (F=90.06, p=.000) and purchase intention (F=2.0, p=.000) toward lucky bags. Respondents tend to have higher perceived value (Mean=.78) and purchase intention (Mean=.) when discount of lucky bags is high than discount is low (M perceived value =.6; M purchase intention =.19) as illustration in Figure 2. Therefore, H and H are supported. Furthermore, through MONOVA, the direct effect of perceived risk is significant on purchase intention toward lucky bags (F=8.97, p=.00), while the effect on perceived value is significant at p 0.1 significant level (F=.296, p=.070). Figure 2 presents that respondents have higher perceived value and purchase intention when their perceived risk of lucky bags is low (M perceived value =.28; M purchase intention =.00) than their perceived risk is high (M perceived value =.1; M purchase intention=.71). As a result, H is weakly supported and H6 is supported. [Insert Figure 2 about here] COPY RIGHT 2012 Institute of Interdisciplinary Business Research 22

9 . Hypotheses Testing: The Interactive Effect of Independent Variables Through MANOVA, the interactive effect of perceived controllability and discount is significant on perceived value (F=6.082, p=.01). Figure (a) shows the interactive effect of perceived controllability and discount on perceived value. Based on the figure, when product composition is controllable, the slope of the line is less. On the other word, when perceived controllability is high, the effect of discount on perceived value is less; however, when perceived controllability is low, the effect of discount on perceived value is greater. Hence, high level discount can make less favorable product composition (not controllable) more acceptable and evaluated better. The effect of discount on perceived value is greater when perceived controllability is low and H7 get supported; the interaction between product composition and discount on perceived value is confirmed. [Insert Figure about here] Oppositely, the interactive effect of perceived controllability and discount is not significant on purchase intention (F=1.688, p=.19). As illustration in Figure (b), when product composition is controllable, high discount brings out higher purchase intention. When product composition is not controllable, high discount also improve similar level of purchase intention. No matter the perceived controllability is high or low, discount shows similar effect on purchase intention. As a result, H8 is not supported and the interaction between perceived controllability and discount on purchase intention is not confirmed. The interactive effect of perceived controllability and perceived risk is weakly significant on perceived value (F=.28, p=.068). When product composition is controllable, the effect of high perceived risk is offset more and respondents perceived value is close to the perceived value of respondents with low perceived risk as shown in Figure (c). Thus, the effect is not very clear. According to the results, H9 is supported at p 0.1. The interactive effect of perceived controllability and perceived risk is significant on purchase intention (F=11.1, p=.001). Figure (d) shows that when product composition is controllable, the effect of high perceived risk is offset more and respondents purchase intention is close to the purchase intention of respondents with low perceived risk. As a result, H10 is supported. As shown in Figure (e), when discount level is high, the effect of high perceived risk is offset effectively and respondents perceived value is close to and even a little bit higher than the perceived value of respondents with low perceived risk. Thus, H11 is supported. Furthermore, the interactive effect of perceived controllability and perceived risk is significant on purchase intention (F=12.07, p=.000). Figure (f) shows that when discount level, the effect of high perceived risk is offset effectively and respondents purchase intention is close to the purchase intention of respondents with low perceived risk. As a result, H12 is supported.. Hypotheses Testing: The Moderating Effect of Hope Through two-way MANOVA, the moderating effect of hope on perceived controllability to perceived value is not significant (F=.22, p=.70), while the moderating effect of hope on perceived controllability to purchase intention is significant (F=.70, p=.017). Figure (a) shows that the moderating effect of hope on perceived controllability to perceived value is not significant. No matter product composition is controllable or not, high hope lead similar increasing amount of respondents perceived value toward lucky bags. High hope people seem to be optimistic for the lucky bags value even though the product composition is randomly assigned. Hope does not significantly moderate the effect of perceived controllability on perceived value. Thus, H1 is not supported. Oppositely, the moderating effect of hope on perceived controllability to purchase intention is significant and shown in Figure (b). When product composition is controllable, high hope leads to higher increasing level of purchase intention. On the other perspective, when hope is high, the effect of controllable product composition on purchase intention is greater. That is, the effect of perceived controllability on purchase intention is enhanced by hope. As a result, H1 is supported. [Insert Figure about here] Furthermore, the moderating effect of hope on discount to perceived value (F=.61, p=.08) is weakly significant, but there is a significant moderating effect of hope on discount to purchase intention (F=17.66, p=.000). Figure (c) shows that high level of hope enhances the effect of discount on respondents perceived value toward lucky bags more. Also, when hope is high, the effect of discount on perceived value is greater. However, the moderating COPY RIGHT 2012 Institute of Interdisciplinary Business Research 2

10 effect is not very distinguishable and H1 is only supported at p 0.1. Figure (d) shows that respondents with high hope have larger increasing amount of purchase intention when discount is high. Especially, when hope is high, the effect of discount on purchase intention is greater. The effect of high level discount on purchase intention is enhanced by hope, so H16 is supported. According to the results of H and H6, when perceived risk is low, respondents perceived value and purchase intention is higher. The moderating effect of hope on perceived risk to perceived value (F=1.06, p=.000), and to purchase intention are significant (F=2.19, p=.000), respectively. As Figure (e) shown, when perceived risk is high, high level of hope moderates respondents perceived value toward lucky bags more. In addition, when hope is high, the effect of perceived risk on perceived value is totally offset. The negative effect of perceived risk on perceived value is improved and H17 is supported. Likewise, the moderating effect of hope on perceived risk to purchase intention is also significant and shown in Figure (f). When perceived risk is high, respondents with high hope have higher purchase intention than respondents with low hope. On the other side, when hope is high, the effect of perceived risk on purchase intention is totally offset as well. Therefore, the effect of high perceived risk on purchase intention is influenced by hope and H18 is supported. Based on the results as shown above, three independent variables including perceived controllability, discount, and perceived risk have direct effect on perceived value and purchase intention, except the effect of perceived risk on perceived value is not strongly significant. When respondents consider the product composition of lucky bags is controllable by giving online seller some requirements, they perceive higher value and are more willing to purchase. As well as perceived controllability, high discount is another important attribute of lucky bags. In this research, discount is proved to be an important reason that makes consumers perceive value and have intention to buy lucky bags on the Internet. Additionally, high level discount increases higher perceived value and purchase intention to buy lucky bags. However, respondents perceived risk of online lucky bags has negative effect on perceived value and purchase intention. Although in this study, the effect of perceived risk on perceived value is only weakly supported, the tendency also corresponds with our hypothesis. If consumers have low perceived risk of lucky bags, their perceived value and purchase intention of lucky bags will be higher. Furthermore, most interactive effects are significant except the interactive effect of perceived controllability and discount on purchase intention. When product composition is not controllable, the effect of discount on perceived value is significant. In term of hope, the results show that there is no significant difference on the direct effect of perceived controllability to perceived value when respondents hope changes. Oppositely, hope moderates the effect of perceived controllability on purchase intention, the effect of discount on purchase intention, and the effect of perceived risk on perceived value and purchase intention. Simultaneously, hope moderates the effect of perceived controllability and discount significantly. When discussing perceived risk, hope inhibits the negative effect of perceived risk significantly.. Conclusion and Suggestion Lucky bags are known as invisible and random bundling packages that consumers can not know exactly content before purchasing. In this research, online lucky bags are examined to reveal how to increase consumer s perceived value and purchase intention. As we expected, most of the hypotheses are supported and listed in Table 2..1 Managerial Implications [Insert Table 2 about here] First, since perceived controllability, discount, and perceived risk are factors that direct influence consumers perceived value and purchase, online venders could offer lucky bags based on consumers expectation to draw their attentions. Venders can adopt controllable product composition to make consumers more pleasure and interest of the lucky bags. Higher level discount is also an attractive incentive for consumers making decision because they can save money from the discount. Also, any methods that can reduce consumers perceived risk is essential for venders to execute. Many studies posit that venders should build up a store brand, keep good vender reputation and provide product and service in good quality and price for buyers to spread positive WOM (Xu and Kim 2008). Nowadays, vendees can give appraisals of venders after trading through online bidding platform such as Yahoo! bidding. So that, venders could easily set up brand loyalty, good reputations and positive WOM by giving each consumer great shopping experience such as providing fast transportation, nice service, professional suggestion of picking products, COPY RIGHT 2012 Institute of Interdisciplinary Business Research 2

11 and appropriate product quality. By this way, consumers may have stronger confidence and less perceived risk of lucky bags when trading with those trustworthy venders. Second, as the analytical results of this study, venders should offer lucky bags with controllable product composition and high discount to enhance consumers willingness to buy. Although high discount can compensate the influence of uncontrollable product composition and still let consumers perceive high value of Lucky bags, it can not arouse consumers purchase intention. To arise consumers willing to buy, both controllable product composition and high level discount should be adopted by venders selling lucky bags. However, both controllable product composition and high level discount have interaction effects on the influence of perceived risk on perceived value and purchase intention. Hence, especially for venders who have not yet cumulated brand familiarity, store reputation, or provided other hints for consumers to lower perceived risk, adopt both controllable product composition and high level discount can be helpful to reduce consumers perceived risks. Third, hope has significant moderating effects on the influences of perceived controllability, discount, and perceived risk on perceived value and purchase intention, venders, thus, can provide information for consumers to increase their hope. According to Maclnnis and Mello (200), some tactics can be used on advertisement to enhance consumers hope. So that, advertisement should suggest the possibilities in the product to turn impossibility into possibility (eg. emphasis the possible outcome of lucky bags) or enhance consumers perceived importance and goal congruity of the outcome (e.g. suggest the benefits of lucky bags) (Maclnnis & Mello 200). Through using such tactics on advertisements or selling web pages of lucky bags, venders can increase consumers hope and further enhance the effects of perceived controllability, discount and reduce the influences of perceived risk on consumers willingness to purchase..2 Limitations and Suggestions for Future Research Although the results of this study are promising, several limitations may have to be handled with cautions. First, there are still other variables which may influence consumers perceived value and purchase intention of Lucky bags. For example, WOM on internet may also influence consumers interest of specific lucky bags, because many online vendees are used to exchange their experiences on BBS and by which may induce or reduce other consumers impression of online venders and their products. Additionally, certain venders on internet already have used loyalty customers through successfully operating their business. Consumers who are familiar with those venders may have higher purchase intention of their lucky bags. Obviously, the relationships between venders and customers are extremely important in online marketplaces (Fink et al. 2008). The impact of those variables on purchase intention toward lucky bags can be examined in future research. Second, data was collected through internet and the possibility to reach male and female respondents should be indifferent. In this study, most respondents are female, because the chosen product may influence some respondents intention to fill out the questionnaire. The collected data may adequate to discuss lucky bags containing apparels, while the results of this study may be limitary applied to lucky bags of other product categories such as electric and hi-tech products. To understand how lucky bags work in other product category, a comparison of product categories may be interesting to discuss. Third, the quality of the response data is hard to control. The topic of this study discusses lucky bags selling on internet. It is reasonable to access samples through internet, while the questionnaire is in self-administration form and hard to prevent respondents from giving tricky answers. Although there is an inverse question (item third for perceived value: The online lucky bag is considered not to be a good buy.) in this questionnaire for sieving out invalid data, some respondent randomly choosing answers are hard to pick out. More skills such as putting a sleeper (a fake answer) between real questions can be adopted if it is suitable for future research (Sudman & Bradburn 1991). COPY RIGHT 2012 Institute of Interdisciplinary Business Research 2

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