Consumers with Functional Purchase Motivation Are More Focused on Marketing Activities than Word of Mouth as the Most Useful Information Source 1

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1 Consumers with Functional Purchase Motivation Are More Focused on Marketing Activities than Word of Mouth as the Most Useful Information Source 1 Hyeyoung Oh, Dept. of Consumer Information Science, Keimyung University, Daegu, Korea. ohhy55@kmu.ac.kr Sungsook Kim, Dept. of Consumer Information Science, Keimyung University, Daegu, Korea. kssch@kmu.ac.kr Abstract While word of mouth(wom) is regarded as a key ingredient in product success, little is known about the given content of WOM. At the point of purchase, consumers can be affected more by advertisements than WOM. So, we expected that the most useful information sources can affect the consumer s purchase motivation (functional vs. emotional) and these attitudes may be related to cultural differences based on the country. The results confirmed our expectations that consumers with emotional purchase motivation prefer WOM over advertisements as the most useful information source, but consumers with functional purchase motivation prefer advertisements at the point of purchase. Key words: purchase motivation, WOM, information searching, information resource, cultural differences 1 The authors gratefully acknowledge support for this survey data was provided by Samsung s Global Marketing Institute 182

2 1. Introduction For decades, word of mouth (WOM) has been recognized as a key influencer in consumer s purchase decision-making, with studies showing its impact on individuals to be greater than advertising (Nguyen and Romaniuk 2014). Receiving positive WOM was considered to be superior to marketing activities from the company side, like sales talk, due to its trustworthy nature(buttle, 1998; Nguyen and Romaniuk 2014). When people are faced with the purchase of a new technology product, at that moment, is the most influential information source is still WOM? Previous research paid attention to WOM as a strongly neutral and trustworthy information source. However, when information searches through the Internet and web sites became more common, researchers keenly felt the necessity of a distinction between trustworthy sources of information and trustworthy information resources. In the past, consumers trusted WOM completely when compared to marketing activities from the company side, including sales talk, because marketing activities were considered to be too commercialized sweet talk. In the case of recent new products based on scientific technology, sometimes WOM is something less trustworthy. In this case, one of the most accurate information sources is commercial advertisements from the company side because marketing communication goals focus on newly developed product details and functions together with demonstrations of the new features. Since searching for information via the Internet on web sites has become mainstream, studies for WOM enlarged to online word of mouth (e-wom), but marketers can easily influence major e-wom sources of information, like power bloggers, SNS and content providers for commercialized web sites. With this background, this study aims to investigate the effects of WOM for technologybased products when consumers are faced with the decision making for the purchase of new products, and which factors influence their decision making process. 2. Theoretical Background and Research Questions 2.1. Consumer s Information Search Behavior During the consumer s purchase decision-making process, information search is one of the most important factors. The studies of information search were developed from the studies of decision theory of information search amounts (Stigler, 1961) to the studies of information search behaviors (Engel, Blackwell, and Miniard, 1986), and these previous studies proved information searching affect product purchase decision making. When consumers think they enough experience purchasing similar products or enough knowledge about the products, they just reflect on internal information to make the optimal choice, but when consumers do not have enough knowledge related to the product they would 183

3 like to purchase or feel the risk of failure in their decision making, they search for additional information externally. Also, when consumers consider purchasing highly technical products like electronic goods, to make an optimal choice external information searching needs to be increased more. As per the study of Beatty and Smith (1987), the consumer s searching of information is affected by previously acquired knowledge and by their involvement level. Otherwise, the variables influenced by the amount of information consumer s searched were marketing environmental factors, purchasing situation factors, underlying benefits recognized by consumers, the consumer s level of knowledge, purchase experience history of success or failure, personality factors, situational conflicts, price issues, and so on. Actually consumer s information searching behaviors were classified by the resources of information, not the amounts of information. Previous studies show that consumers selectively choose information sources based on the various purchasing situations, not considering all of the possible information resources. The factors affecting consumer s characteristics for selecting information resources is age, educational status, income levels, occupation, and other demographic characteristics (Newman and Staelin 1972) and the study of Choi & Ra(2012) distinguished between the factors influencing information search amounts and influencing the choice of information resources. They asserted that the consumer s propensity to make purchases based on emotional or functional motivating factors affected the amount of information searching, and demographic characteristics affected the consumers preference when selecting information sources. In the case of re-purchase, the consumer s information searching behaviors may depend on the perception of product experience related to cognitive values about the product because consumers perceived product values based on their own experiences (Steenkamp & Geyskens, 2006). Holbrook (1996) asserted that consumer s perceived values were made by consumption experience not purchase history. Consumption experience can separate utilitarian experience from functional view and practical and cognitive view, and hedonic experience from emotional view. This consumption experience influenced motivations to purchase (Bayllys, 1958; Holbrook & Hirschman, 1982; Steenkamp & Geyskens, 2006). Especially, emotional experiences affected the building of core consumption experiences and utilitarian experiences affected the support of functional consumption goals as tools (Shankar, Smith, & Rangaswamy, 2003). This study wanted to prove that purchase motivation (functional direction vs. emotional direction) affects consumer s behavior for selection of information sources. 184

4 2.2. Information Sources at the Point of Purchase Consumers information sources can separate WOM by family, friends or other personal relationships; commercial resources from the company side like advertisements and, sales talk; and neutral information sources like consumer reports (Westbrook & Fornell, 1979; Engel et al., 1982). WOM occurs when consumers informally discuss products, services and brands (Arndt, 1967; Charlett et al., 1995). The research of East and Lomax (2005) showed that the most frequently used information resources were WOM (31%) and advertisements (14%) among twenty three product categories. Product information from WOM is not always correct because it based on the consumer s personal experience with bias and is not controlled by the manufacturer. So, comparing advertisements together with exact product information like sales talk, brochures, and demonstration of use; WOM is not focused on the product itself but focused on the information providers. WOM as product information is not perfect and a limited information resource. The study of Jang et al (2012) classified consumer s purchase decision making process into two stages. The first stage is searching for information focused on general information related to e-wom like comments after purchase and consumer reviews, but the second stage is focused on in-store commercial recommendations including sales talk as product expertise. Jang et al (2012) asserted e-wom and in-store commercial marketing activities from the company side are used sequentially, but it is very difficult to distinguish between general information searching and crucial information searching. Our study focused on the consumer s purchase motivation based on their own personal characteristics such as the information resources that affected their decision when they want to purchase something. Consumers who have emotional purchasing motivation were moved by WOM which focuses on information providers they consider trustworthy, but others who have functional purchasing motivation were moved by advertisements from the company side as objective information for highly technical products. Our research hypotheses are below: H1. Consumers who have emotional purchase motivation prefer WOM compared to advertisements as the information sources prior to the point of purchase. H2. Consumers who have functional purchase motivation prefer advertisements over WOM as the information sources prior to the point of purchase The Effect of Cultural Difference by Country Cultural differences by country affect how people feel regarding purchase motivation (Morris and Peng, 1994; Menon et al.,1999) and their reactions to marketing activities from the company side(chun-tung and Corkindale, 1998). 185

5 Cultural differences by country have been shown to be associated with differences in perceptions and attitudes towards purchase decision making processes together with advertising and marketing activities (Chun-Tung and Corkindale, 1998). Generally Asian countries with oriental cultural backgrounds reveal more emotional motivation than Western countries since Asian people are more focused on relationships. According to Michon and Chebat(2004), both utilitarian and hedonic shopping behaviors are affected by cultural differences and personal traits. The effects of cultural difference by country on purchase motivation and information searching attitudes towards WOM or advertisements in purchase decision making processes have not been studied yet. We anticipate cultural differences in several regions, but hesitate to specify further. Our study advances whether purchase motivation (emotional vs. functional) affects the selecting of information sources at the point of purchase, but the effect of cultural differences by country can influence that effect. So, our study can provide evidence that cultural differences by country have a strong influence on information searching attitudes. H3. Cultural difference by countries moderates the effect of purchase motivation and selection behavior for information resources at the point of purchase. 3. Collecting the Data 3.1. Respondents Support for this research data was provided by Samsung s Global Marketing Institute as the Global U&A Study for air conditioners among the general population. It included data from three countries: Russia, Thailand and Australia. Participants aged 20 to 55 in all countries were purchase decision makers or influencers in purchasing their digital devices and home appliance. Sample balancing at the country level by census demographics based on age and gender. The method for data collection in Australia was via an online panel survey, and in Russia and Thailand data was collected during face-to-face interviews. The total respondents by country were 500 participants from Russia, 509 participants from Thailand, and 550 participants from Australia. The data was collected by TNS which is a multinational market research institute. All participants had air conditioners but for more accurate analysis, we focused on the participants who had recently purchased air conditioners within the past two years only. So, finally we used a total of 725 valid samples: 123samples from Russia, 235 samples from Thailand and 367 samples from Australia. They had all purchased air conditioners within the past two years. 186

6 3.2. Procedure All participants received constructive questionnaire which is tested previously by their language. First of all, participants checked owned electronic products and after that, they were asked about their own air conditioner which had recently purchased air conditioners within the past two years only. They answered about usage and attitude questions for air conditioner and for information searching behavior when they choose that product. After that, they marked about their consumption attitude related purchase motivations Key Variables The research design was 3countries (Russia, Thailand, Australia) X 2 purchase motivations (functional vs. emotional) full factorial between subject designs. Participants response all information sources when they purchase air conditioner and check the most useful information source too. We recoded all information sources based on the two different analysts by separately and double check again. Purchase motivation and useful information sources were asked of participants and recoded as below in table1. Table1: Recoded Key Variables Purchase Motivation Functional Emotional recode The previous one stopped working (broken) The previous one was not working well Change in family or situation I wanted to have one with better performance The price decreased enough I wanted one with bigger capacity Etc., It was an impulse purchase After I saw it in an advertisement via media (TV, Internet, magazine, etc.,) I wanted to have a brand new one that just came out I didn t like my appliance and wanted to buy a new one My appliance didn t fit well into the intended space design Etc., Information Source WOM Ads recode Friends or family recommendation Product expert s recommendation Consumer reports Web blog/social networks Online discussion forum Newspaper/magazines articles or editorial Mass media advertisement Sales person s recommendation Brochures/leaflets in store Product displays or demonstration at store Shopping/retailer web page Product specific web page Advertisement on Internet, etc., 187

7 4. Results and Discussion As expected, the participants who had emotional purchase motivation preferred to select WOM as the most useful information source and participants who had functional purchase motivation preferred to select advertisements, and these results were significant (χ 2 =20.022, p=.000). Participants who had functional motivation selected advertisements more (52.4%) than WOM (47.6%), but others who had emotional motivation selected WOM(64.5%) over advertisements(35.5%). Table 2: The Most Useful Information Sources by Purchase Motivation N (%) WOM Ads Total χ 2 Functional 207(47.6%) 228(52.4%) 435(100.0%) (p=.000) Emotional 187(64.5%) 103(35.5%) 290(100.0%) Also, the most useful information source by country was different as per hypothesis3. Russia and Thailand had very similar preferences in selecting the most useful information source. These countries preferred WOM over advertisements as the most useful information source, but Australia preferred advertisements more at the point of purchase as shown in table3. The difference was significant (χ 2 =13.445, p=.001). Table 3: The Most Useful Information Source by Country N (%) ================================================================== WOM Ads Sum χ Russia 77(62.6%) 46(37.4%) 123(100.0%) Thailand 142(60.4%) 93(39.6%) 235(100.0%) (p=.001) Australia 175(47.7%) 192(52.3%) 367(100.0%) By the way, the results about purchase motivation by country are quite interesting because they show different patterns of motivation construction and these differences were significant (χ 2 =12.685, p=.002) as shown below in table

8 Table 4: Purchase Motivation by Country N (%) ================================================================== Countries Motivation. Total χ 2 Functional Emotional Russia 87(70.7%) 36(29.3%) 123(100%) Thailand 122(51.9%) 113(48.1%) 235(100%) (p=.002) Australia 226(61.6%) 141(38.4%) 367(100%) By country, purchase motivation affected the selection of useful information sources as expected, but the direction is not clear. The two-way interaction is significant regarding Country by Motivation ( F(2, 719)=5.211, p=.006) as shown below in table5. It confirms that our hypothesis3 is accepted. Table 5: The Most Useful Information Source by Purchase Motivation and Country ================================================================== Country Functional Motivation Emotional Motivation. Case WOM Ads Case WOM Ads Russia % 43.7% % 22.2% Thailand % 38.5% % 40.7% Australia % 63.3% % 34.8% Total % 52.4% % 35.5% We expected that the most useful information sources can be affected by the consumer s purchase motivation and these attitudes may be related to cultural differences based on the consumer s nationality. The results confirmed our expectations. In summary, consumers with emotional purchase motivation prefer WOM over advertisements as the most useful information source, but consumers with functional purchase motivation prefer advertisements prior to the point of purchase. Based on the previous researches, consumers hesitated to use commercial information sources which have persuade intention to purchase but actually our research findings were little bit different when the consumers who have functional purchase motivations. They prefer commercial information sources such as advertisements, sales talk at store over WOM as per product expertise s recommendation especially for technological products. Also, these findings were different by the country. We think that these differences were based on the 189

9 cognition about expertise information. When consumer faced on the new innovated products, they need more specified information and demonstration in store and some kinds of information were depended on manufacturer because of technology base. So, in the future study, we should develop different information search behaviors when consumers faced on the innovative products or not. Another interesting finding was difference between regions. We think that this result was based on the area culture but still research more. 5. Limitations and Future Research Based on these results, we can find quite interesting marketing implications for the point of purchase. Until now, previous research focused on the consumer s information search for trustworthy sources, but actually advertisements can more strongly affect consumers with functional purchase motivation at the point of purchase. It means that if in-store marketing activities can more expertise in information support, it can be a more powerful driver when persuading customers to make the purchase. Even though there are quite interesting marketing implications, the limitations of this study are based on the survey data, not the controlled conditions of the experiment. Also, we cannot separate the consumer s decision making process from their information searching behavior. In the near future, we can launch more precise research in other countries to prove the hypothesis again. References Arndt, J., (1967), Word of Mouth Advertising and Informal Communication Risk Taking and Information Handling in Consumer Behavior, Harvard University, Boston. Pp Beatty, Sharon E. and Scott M. Smith (1987) External Search Effort: An Investigation across Several Product Categories, Journal of Consumer Research 14 (1), Buttle, F., (1998), Word of mouth: understanding and managing referral marketing, J. Strateg. Mark. 6, Charlett, D., Garland, R., Marr, N., (1995) How Damaging is negative word of mouth? Mark. Bull. 6, Choi, A-young and Jong-Youn, Rha (2012), How do Consumers search for information in Multi-channel Environment?: Consumer typology based on their choice of information channel, Journal of Consumer Studies 23(2),

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