Qual Quant DOI 10.1007/s11135-012-9707-2

Factors affecting high-involvement product purchasing behavior Wen-Bao Lin

© Springer Science+Business Media B.V. 2012

Abstract This study integrates the theory of planned behavior and theory of perceived value to discuss the effects of brand valuation, subjective norm, and promotion on perceived value. It also employs linear multivariate analysis integrated with fuzzy neural network techniques to validate the hypotheses. The population of this study is the consumers who have purchased luxury goods in three major metropolitan areas in Taiwan (Taipei, Taichung and Kaohsiung). Questionnaires are distributed in department stores and boutique stores in those metropolitan areas by convenience sampling. This study also explores the purchase of highinvolvement products, including the luxury goods. The empirical results are as follows: brand valuation has a significant positive effect on perceived value; promotional method has a significant positive effect on purchasing behavior; high price promotion causes brand valuation to have negative effects on perceived value; the brand valuation and perceived value relationship is affected by non-price promotion; perceived value has a significant positive effect on purchasing behavior. Management implications and suggestions for the future study are also proposed. Keywords

Brand valuation · Subjective norm · Perceived value

1 Introduction Aaker (1991) investigated 250 American business managers, asking them what is the main asset, in their opinion, that supports the sustainable competitive advantages of their businesses. The most frequent answer was perceived quality, followed by brand awareness and customer loyalty. All these intangible assets as a whole are the brand equity. Raghubir and Corfman (1999) used consumers’ perceived product quality as the brand valuation dimension to study the effects of price promotion on brand valuation as well. The results indicated that consumers would have different deductions about product

W.-B. Lin (B) National Kaohsiung Normal University, Kaohsiung, Taiwan, ROC e-mail: [email protected]

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quality with or without discount promotion. They also studied the interference effects of factors such as industrial customary practices, past sales promotion on the relationship between discount promotion and brand valuation, and found that the effects of discount percentage on customer evaluation would be affected by sales promotion situations. It thus can be seen that promotion situations would affect discount promotion and the consumer- brand valuation relationship. Therefore, this study aimed to discuss the relationship between brand valuation and sales promotion methods (price promotion and non-price promotion). In addition, past studies on the purchasing behavior of involvement products mainly covered purchasing behavior of general consumer goods (Lichtenstein and Bearden 1989; Lichtenstein et al. 1991; Jones et al. 2003; Holzwarth et al. 2006). However, in recent years, a new luxury wave has emerged in the world, as well as, Taiwan. This study also explored the effects of luxury goods’ brand valuation on consumer perception. Generally speaking, consumer awareness of luxury brands, not only represents a lifestyle, but also a value system. Therefore, the most valuable asset of a business is consumers’ recognition of its brand. Thus, the strength of the linkage of consumer awareness and the brand, as well as the ability of consumers to response, will determine the brand value. Higher product brand awareness usually represents that consumers are more familiar with the image and characteristics of the product and have higher internal reference price of the product (Alba and Hutchinson 1987). In addition, consumers have higher brand attitude and purchasing intention towards more well-known brands (Kamins and Marks 1991; Punniyamoorthy and Raj 2007). Many past studies suggested that higher brand valuation results in higher perceived value of consumers, and consequently, stronger purchasing intention of consumers (Dodds et al. 1991; Grewal et al. 1998). Therefore, the second purpose of this study is to explore the relationship between brand value and perceived value, as well as its impact on purchasing behavior. The current promotion on the market is still focusing on consumers as the main object; promotional strategies are inevitable when faced with fierce competition of numerous domestic and foreign manufacturers. However, in order to win consumers in short-term competitive market, price promotion is one of the indispensable methods as discount promotion requires less preparation time, no change of products or less adjustment of product packaging. Therefore, the third purpose of this study is to explore whether price promotion will affect the purchasing behavior of consumers. The theory of planned behavior (TPB) developed from the theory of multiattribute attitude and theory of rational attitude mainly illustrates that the resources and opportunities for personal behavior should be coordinated except in case of voluntary personal behaviors. Hence, subjective norm’s effects on behavior (including two sub-factors of normative belief and obedience motivation) are significant (De Pelsmacker and Janssens 2007; Schepers and Wetzels 2007). The so-called subjective norm refers to the social pressure that an individual perceives as to whether taking a specific behavior, such as norms and beliefs (referring to the individual perception of the pressure from important others or groups as to whether taking a specific action). The obedience motivation refers to individual willingness to obey the expectations of such important people or groups as to whether taking a specific action. As far as the psychological phenomena of purchasing luxury goods is concerned, possible compliance with peer pressure to buy is also the fourth purpose of this study. This study also uses the non-linear fuzzy neural network techniques to verify the hypotheses in addition to the linear multivariate analysis. This the fifth purpose of this study.

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2 Literature review Raghubir and Corfman (1999) defined brand valuation as consumer feelings about and recognition of the brands being promoted, including brand preference, reference price and perceived quality. Brand preference refers to the favorite level of consumers about the target brand; reference price refers to the price consumers are willing to pay when re-purchasing the target brand product; perceived quality refers to the judgment of overall excellence or superiority of a product. They studied the effects of price promotion on brand valuation defined as consumer awareness of product quality, and found that consumers would have different inferences as to product quality with or without discount promotion (Grewal et al. 1998; Raghubir and Corfman 1999). Monroe’s (1990) theory of perception points out that consumers’ purchasing option is determined by the relationship between the product benefits and the price paid for the product. In other words, consumers’ perceived value of a product is determined by the product benefits and the price paid for the product. The perceived benefits are the function of perceived quality, which is directly proportional to price, and the perceived price is directly proportional to price. When consumers are willing to buy a product, price would be an indicator measuring the monetary cost. When the perceived benefits are more than the perceived price, the consumers’ perceived value would become bigger. The purchase intention or willingness is directly proportional to the perceived value, namely, larger consumer perceived value would result in stronger purchase intention. Many studies have suggested that perceived value is a trade-off of perceived benefits and perceived value when purchase intention is formed by consumers. In other words, consumers do not necessarily pursue the highest quality as they recognized when purchasing products. Instead, they would like to obtain the highest perceived value with price they were willing to pay (Zeithaml 1988; Dodds et al. 1991; Grewal et al. 1998). Monroe and Krishnan (1985), according to the concept of perceived value, proposed the relations between price, perceived quality, perceived price, perceived value and purchase intension, and suggested that consumer purchase intension is determined by consumers’ product perceived value. Therefore, when consumers have higher quality evaluation of the product, the product perceived value would be higher. Grewal et al. (1998) indicated that consumers’ purchase intension would be affected by perceived value, and the two have a strong and direct proportional relationship. Therefore, when consumers have a positive product brand valuation, the perceived value of the product by consumers would be relatively enhanced. On the contrary, when consumers have negative product brand valuation, the brand valuation would be reversely reduced. According to the weighing dimensions of brand valuation as reconstructed by Aaker and Keller (1993), this study employed internal reference price, perceived quality and perceived value as dimensions to weigh brand valuation. However, as perceived value and purchasing behavior have direct significant relationship with each other; this study separated perceived value from brand valuation to discuss the effects of perceived value on brand evaluation in the market of expensive luxury goods. H 1 Brand valuation has a significant positive effect on perceived value. Despite the wide varieties of promotional methods, they can be roughly divided into price promotion and non-price promotion. The price promotion refers to lowering the price of certain product or service or giving more products or services for the same price (Raghubir and Corfman 1999). Price promotion is a frequently used short term sales incentive tool designed to stimulate consumers or dealers to produce more or faster purchase or services (Raghubir and Corfman 1999). Berkowitz and Walton (1980) applied the experimental design

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method to study the situational effects on consumer price response by using varying discount, reference price semantic clue and store type (discount store, department store) as independent variables, and discussed the effects on consumers’ price acceptance, perceived value and purchase intension. They found that consumers’ perceived value and purchase intension would be enhanced when the discount increases (Berkowitz and Walton 1980; Grewal et al. 1998). Aaker (1995) also proposed that “perceived quality” differed from “actual quality” mainly because of the following reasons: (1) perceived quality would be affected by past impressions, and consumers would no longer believe new appeals relating to the product if they have an impression of poor quality of that product (Kardes et al. 2002); (2) consumers’ understanding and recognition of the importance of quality dimensions are different from those of the manufacturers; (3) consumers are unable to get full information due to information asymmetry between the buyer and the seller, which makes it impossible for consumers to have a full picture of the product. Holbrook and Corfman (1985) suggested that perceived quality is comparative, individual and situational, and thus it is a concept of relativity as it would be affected by many factors, such as competitive products, past experience, educational level, and cognitive risks. In recent years, promotional methods continue to increase with not only new price promotional methods, but also a number of non-monetary promotional methods. Many non-price promotional methods focus on the psychological level to avoid the damage to brand equity done by price promotion. In practice, many non-monetary promotional activities are used in marketing strategies to increase sales in a short span of time, while avoid the damage directly done by product price to the brand equity. The studies have proved that different promotional methods have significant effects on the price awareness of consumers. Engel et al. (1995) indicated that the consumer purchasing behavior could be defined as “various activities directly involved in the acquisition, consumption and disposal of products and services in addition to the decision-making process before and after the behavior. Therefore, consumers can finish transaction through a continuous decision-making process (Engel et al. 1995). In the competitive environment, manufacturers strive to use various promotional methods, such as price promotion or non-price promotion ones, to attract consumers. When promotion is introduced, consumers are attracted, and thus, consumers’ purchase intension would be enhanced. When executing the purchasing behavior, consumers would gain benefits that are divided into acquisition benefits and transaction effectiveness. When these two types of benefits become larger, consumers’ purchase intension would increase (Thaler 1985). Therefore, when the discount percentage is larger, the real price of the product would drop and the acquisition benefits and transaction effectiveness would consequently increase. The integrated benefits of the two would of course increase, resulting in increasing purchase intension of consumers. Alford and Engelland (2000) discussed the relationship between advertising reference and consumer decision-making options, and found that the presentation of a single reference object in advertising would effectively increase the purchase intention of the consumer. Therefore, the hypothesis, regarding the relationship between promotional method and purchasing behavior, is as follows: H 2 Promotional method has a significant positive effect on purchasing behavior. Generally speaking, when promotional activities are introduced, the relationship between brand valuation and perceived value will be affected by the promotional method. When price promotion is adopted for the product, consumers may doubt about product quality, leading to a decline of perceived value. However, it may also make consumers feel the product is above the money’ worth. Similarly, the same occurs to non-price promotion. Grewal et al. (1998) proposed that the discount percentage is reversely proportional to internal reference price and

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perceived quality, which means that higher discount percentage would result in lower internal reference price and perceived quality. Raghubir and Corfman (1999) studied the effects of price promotion on brand valuation defined brand valuation as consumers’ awareness of product quality, and found that consumers would have different inference about the product quality with or without discount promotion. Pennington (2002) suggested that the success of promoting a product is determined by the type of value it gives to consumers. The meaning of an object in terms of value is not only the formative meaning, but the psychological satisfaction is more important. Thus, consumers’ perceived value would be larger than the effectiveness value of the product. It thus could be inferred that the purchasing behavior of the luxury goods in an affluent society not only pursues material satisfaction, but more importantly, the indication of self-realization or attraction. Hence, regarding such expensive goods, if price promotion is not done carefully, consumers’ perceived value of brand valuation may be lowered. Many non-price promotional methods (e.g. combination promotion, mixed-leader bundling, mixed-joint bundling) focus on psychological level to avoid damage to brand equity by price promotion. In practice, many non-price promotional activities used in marketing strategies can increase sales within short period, and avoid the adverse effects of price product on brand equity. Studies have proved that various promotional methods have significant effects on perceived price (Folkes and Wheat 1995) or purchase intension of consumers (Chen et al. 1998). H 3 The relationship between brand valuation and perceived value is affected by price promotional methods H 3-1 High price promotion enhances a reverse relationship between brand valuation and perceived value H 3-2 The positive relationship between brand valuation and perceived value is affected by low price promotion. H 4 The relationship between brand valuation and perceived value is affected by non-price promotion. Biswas and Blair (1991) defined reference price as any relevant price to evaluate a certain price level. The reference price can be divided into two types, one is the external reference price and the other was the internal reference price. The reference price in this study refers to the type of internal reference price that is easiest to be found; it is the perceived price that occurs naturally to consumer and is used to judge whether the commodity price is relatively high, relatively low or reasonable (Biswas and Blair 1991). Biswas and Blair (1991) suggested that consumers would initially collect price information about certain specific products, and estimate the possible highest and lowest market price by forecasting to form a range of internal reference price. However, Rajendran and Tellis (1994) indicated that context clue would affect the consumers’ internal reference price. Context clue refers to the price information about other products or brands the consumers obtain at the place of purchase, while time clue refers to the price memory of the consumers who have purchased the products (Lichtenstein and Bearden 1989; Rajendran and Tellis 1994). Although scholars differed in their views, the judgments were subjective from the aspect of consumers (Kumar 1998; Alford and Engelland 2000). This study defines the internal reference price as “consumers will produce a product price range as the basis for future judgment according to all the price information they have”. Zeithaml (1988), Dodds et al. (1991) and Grewal et al. (1998) proposed that perceived value is the trade-off of the perceived benefits and perceived value price as a result of the

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purchase intension of consumers. In other words, when buying a product, consumers do not pursue the highest perceived value; instead, they want to obtain the highest perceived value at the price they are willing to pay. The higher the perceived value in the minds of consumers is, the larger the effects on product purchasing behavior are. H 5 Perceived value has a significant positive effect on purchasing behavior Bearden and Etzel (1982), and Jonathan (1996) suggested that consumers would be influenced by others in the decision-making process. Such external influence could be further divided into information and normative influence. The normative influence is defined as: a group influenced the behavior of its members by establishing a set of norms. Gould (1993) proposed that “self-consciousness” could represent consumers’ response toward social influence. The self-consciousness can be divided into two types: (1) public self-consciousness: people of this type care about their appearance and are prone to social influences (Santee and Maslash 1982); (2) private self-consciousness: people of this type care more about internal emotions and feelings, and would have no big response to normative influences. Vigneron and Johnson (1999) reported that consumers would produce different perceived values as influenced by others in case of luxury products. And such normative influence was very popular in consumer behavior, in particular, the trend-related industries (Vigneron and Johnson 2004). As luxury brands had been regarded as representatives of trends, such normative influence would be more apparent when consumers buy the luxury goods of luxury brands. The main theoretical premise of TPB is to modify the generalization of the theory of rational behavior that behavior occurs due to controllable factors based on personal willpower, overlooking the importance of the uncontrollable personal factors (Ajzen 1989). In other words, TPB underlines the individual behavioral tendency, the “attitude” toward the actual behavior and the external subjective norm influencing the use of certain behavior of individuals. Therefore, this study applies two major perspectives of the breakdown TPB: (1) attitude: refers to the preference of consumers about the luxury goods, and it is included in the construct of brand valuation in this study; (2) subjective norm: originally refers to the dependence on others or group opinions when taking a specific action by an individual. Opinions of consumers’ family members or peers as well as the previous consumption experience of consumers are the main variables of this study. The core viewpoints of TPB underlines that norms affect attitude and attitude affect behavioral intention and actual behavior. Bhattacherjee (2000) studied the effects of e-brokerages information equipment on users’ behavioral intention. The empirical study found that the variable of “subjective norm” would affect the behavioral intention of e-brokerages users. Chau and Hu (2001) applied distant medical science and technology on medical equipment use, and found that variables including attitude has positive effects on behavioral intention. Moon and Kim (2001) also applied science and technology acceptance mode to discuss the effects of users’ recognition of applying Internet on the use behavioral tendency, and proved that users’ perception, attitude and behavioral intention have significant positive relationships. In addition, De Pelsmacker and Janssens (2007) proposed the speeding behavior model built on the relevance of personal, descriptive and normative norms and the affective attitude toward speed limits. In terms of the consumer social class proposed by Veblen (1931) and Simmel (1903), consumers of conspicuous goods, noble manners and lifestyle are indispensable items of conspicuous consumption. Therefore, the psychological satisfaction of present day consumers when purchasing luxury goods not only arises from envying others, namely, the perceived values of theirs are not presented by high taste material consumption, but also comes from their own “normative beliefs” and “obedience motivations”—the individual perceived pressure that whether other important individuals or groups would take a specific behavior.

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Promotional method H2

Price High

Non-price

Low

High

Low

H3 H4

Perceived price Internal reference price

Subjective norm

H5

Purchasing

H1

Perceived value

Brand valuation

H6

Fig. 1 Research framework

Solomon (1999) proposed that the conspicuity of the product is direct proportional to the influence of reference groups. Pure consumers obtain satisfaction from purchasing behavior, instead of the financial or the practical value of labor. The response from the audience of the wealth-displaying behavior is the purpose of the conspicuous consumption of the consumption. H 6 Subjective norm has a significant positive effect on perceived value. 3 Research design 3.1 Research framework: Through the above literature inference and hypothesis establishment, the research framework of this study is as shown in Fig. 1 3.2 Conceptual definition and weighing of research variables Conceptual definition and relevant references to the research variables are listed in Table 1. 3.3 Research subjects and sampling method This study conducts a questionnaire survey on buyers of the luxury goods from three major metropolitan areas (Taipei, Taichung, and Kaohsiung) in Taiwan. The questionnaires are sent out in department stores, boutique stores and other solid sales channels in three major metropolitan areas in Taiwan, by convenience sampling. A total of 950 questionnaires are sent, 178 invalid samples are eliminated, and 772 valid samples are returned; the valid return rate is 81 %. Among the valid samples, most of them are from northern of Taiwan (332, 43 %), since the metropolitan areas in northern Taiwan is the most populated area with the highest average annual income. In terms of other factors, the subjects are mostly self-employed, in the business industry, and are aged from 45 to 55.

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W.-B. Lin Table 1 Conceptual definition and weighing of the research variables Research variables

Conceptual definition

References

Brand valuation

Consumers’ feelings about brands being promoted including: brand preference, reference price and quality perception. Contents of items are as follows: I am very much concerned about the quality, content label and display of the luxury goods; I am very much concerned about the brand awareness of the luxury goods; luxury brands with high prestige have better product quality; the luxury goods with brand awareness should be priced higher; I do not think price adjustment will affect brand valuation; my purchase intension will increase when my brand valuation of the luxury goods are positive. As I have certain recognition of brands of high prestige, my purchase intension and product brand recognition are highly related Consumers’ overall positive and negative recognition of brand value when faced with various promotional methods. The item contents are as shown as follows: information regarding past market transaction price, which is also the reference price when buying the luxury goods; I will consider actual effectiveness when buying the luxury goods; I will care more about psychological satisfaction when buying the luxury goods; despite price promotion, my overall feelings about this product cannot change; despite numerous promotion discount, my overall feelings about the product will not change

Refer to viewpoints and contents of the items designed by Grewal et al. (1998) and Raghubir and Corfman (1999)

Perceived value

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Refer to viewpoints and contents of items designed by Zeithaml (1988), Dodds et al. (1991) and Grewal et al. (1998)

High-involvement product purchasing behavior Table 1 continued Research variables

Conceptual definition

References

Promotional method

When faced with short-term inducement (price promotion and non-price promotion), whether consumers will change in terms of the relations of the original brand valuation, perceived value and purchasing behavior. The item contents include the following: (1) price promotion items include: I will be attracted by installment payment for the luxury goods; I will have a sense of being above the money’s worth when the luxury goods VIP card program is introduced; cash repayment program for the luxury goods can increase my purchase intention; my purchase intension will be higher when the discount percentage increases, varying degrees of discount will affect my preference about the brand; (2) non-price promotion items include: service surroundings and ambience will affect my purchase decision; I will increase the purchase amount when attracted by free gifts; my purchase intention will be influenced by friendly sales clerk; comfortable, spacious and bright purchasing environment will strengthen my impression about the shopping mall; the specific individual reception, consulting and services provided by the service provider are purchase inducements to me; decoration, colors and product display are attractive to me; the offer of complete product information makes me spend more time and energy in the search of product information

Refer to viewpoints and contents of the items designed by Raghubir and Corfman (1999)

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W.-B. Lin Table 1 continued Research variables

Conceptual definition

References

Subjective norm

Mainly composed of “normative belief” and “obedience motivation”, it originally refers to the social pressure an individual feels regarding whether taking a specific action or not. Focusing on discussions about consumer behavior, this study defines it as the effects of the family or peers of consumers on consumption decision. It includes four items for weighing including: the pressure on decision-making due to opinions of the family members, the impact on decision-making of affinity degrees of the family members, the impact on the decision-making behavior of the financial support of the family, the peer pressure on decision-making. The possibility of impact on purchase intention of various promotional methods and the previously determined brand concept. The item contents are as shown below: I will take purchasing actions by referring to product information as published in professional luxury goods magazines; I will read carefully DM articles about the luxury goods published by the manufacturers; I will pay attention to the product trends when buying the luxury goods; I care about the consumption rights when buying the luxury goods; I will learn the latest related information about the product from the manufacturer before buying the luxury goods

Ajzen (1991), Taylor and Todd (1995b)

Purchasing behavior

Refer to viewpoints and contents of items designed by Engel et al. (1995)

All the items were measured by the Likert five-point scale

This study focuses on luxury products purchased by the public. The luxury goods include product categories as defined by GICS (Global Industrial Classification Standard) developed by Morgan Stanley, which distinguishes textile products from the luxury goods. The proposed

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luxury goods include: couture ready-to-weary, accessories (purse, briefcase, handkerchief, and leather belt), jewelry and expensive watch. Consumers usually spend more time and energy in comparing brands and characteristics of these products, and therefore, the product involvement degree is relatively higher. 3.4 Data analysis method 3.4.1 Factor analysis To reduce perspectives, this study carries out factor analysis in terms of brand valuation, perceived value, promotional method, subjective norm, and purchasing behavior. All the analyses are principal component factory analysis. The analysis results are then extracted for perspective factors after revolving by varimax. The extraction characteristics value is above, and the factor load is above 0.5 while the difference between factors is above 0.3 (Hair et al. 1998).

3.4.2 Reliability and validity analyses According to Nunnally (1978), reliability above 0.7 indicated relatively high reliability. Cuieford (1965) also believed that Cronbach’sα value above 0.7 indicated high reliability, and those <0.35 should be rejected. As the reliability of various perspectives of this study is at least above 0.7, results of this study have certain level of reliability. As to validity, the validity of the expected verification content can be observed in terms of cited literature and factor load. Regarding the construct validity, the item-total correlation method underlined by Kerlinger (1986), namely, the correlation coefficients of the hypothesis total validity and the individual item validity are the indicator to measure the construct validity. The item validity and the total-item correlation coefficients of various perspectives of this study are all above 0.5, indicating the results have certain level of construct validity (as shown in Table 2).

3.4.3 Fuzzy neural network model Fuzzy neural network framework This study employs the fuzzy neural network technology to convert the data collected into fuzzy quantity expressed by membership and fuzzy sub-sets. Thus, the internal relation between the original input/output data and the description of the system input/output (accurate mathematical model) can be converted into a corresponding if (input metalinguistic variable Fuzzy sub-sets)-then (output metalinguistic variable Fuzzy sub-sets) conditional clause to express the fuzzy relationship, and thus completing the fuzzy model of the system. In addition, the metalinguistic variables can be categorized by degree into low, medium and high variables, and even finer variables to achieve more accurate effects. In a fuzzy system, “fuzzification”->“rule layer” ->“fuzzy judgment” is the basic framework. A fuzzy neural network can be obtained when the fuzzy system is expressed as a connecting network structure. Such fuzzy neural network is exactly the same in effectiveness with the fuzzy system in input/output port while its internal weights or node parameters can be modified by l earning. In addition, the appropriate pattern and fuzzy rules of the membership functions can be automatically produced through certain algorithm. After completing the modification of these membership functions and fuzzy rules, the non-linear model of this system can be obtained.

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W.-B. Lin Table 2 various perspectives’ factor analysis, validity and reliability analysis Perspective

Factor load

Brand valuation 1. I am very much concerned about the luxury goods quality 2. I am very much concerned about the luxury goods content label 3. I am very much concerned about the various display opportunities of the luxury goods 5. I am very much concerned about the luxury goods’ brand awareness 6. Luxury brands with high prestige have better product quality 8. The luxury goods with brand awareness should be priced higher 10. I do not think price adjustment will affect brand valuation 12. My purchase intension will increase when my brand valuation of the luxury goods is positive 14. As I have certain recognition of brands of high prestige, my purchase intension and product brand recognition are highly related. Perceived value 1. Information regarding past market transaction price is also the reference price when buying the luxury goods 2. I will consider actual effectiveness when buying the luxury goods 3. I will care more about psychological satisfaction when buying the luxury goods 4. Despite price promotion, my overall feelings about this product will not change 5. Despite large-scale promotion discounts, my overall feelings about the product will not change. Promotional [Price promotion] method

0.836

0.825

0.828

0.806

0.715

0.703

0.831

0.821

0.854

0.806

123

0.829

Characteristic value

Item-total Accumu- Croncorrelation lated inter- bach’s value value pretation variation

Factor and variable

5.817

0.753

0.762

0.752

0.728

0.773

2.935

64.63 %

0.815

0.811

0.806

0.795

0.802

0.764

0.789

0.729

0.764

0.784

0.749

0.719

0.698

58.7 %

0.768

0.819

α

High-involvement product purchasing behavior Table 2 continued Perspective

Factor and variable

Factor load

Characteristic value

Item-total Accumu- Croncorrelation lated inter- bach’s value value pretation variation

1. I will be attracted by installment payment for the luxury goods 2. I will have a sense of being above the money’s worth when the luxury goods VIP card program is introduced; 3. Cash repayment program for the luxury goods can enhance my purchase intention 5. My purchase intension will be higher when the discount percentage increases 7. A discount more than NT$ 500 will affect my brand preference 8. Varying degrees of discount will affect my brand preference. [Non-price promotion]

0.855

4.05

0.826

9. Service surroundings and ambience will affect my purchase decision 10. I will increase purchase amount when attracted by free gifts 11. My purchase intention will be influenced by friendly sales clerks 12. Comfortable, spacious and bright purchasing environment will strengthen my impression about the shopping area 13. The specific individual reception, consulting and services I receive are purchase inducements to me 15. Decoration, colors and product display are attractive to me 16. The offer of complete product information makes me spend more time and energy in the search of product information. Subjective norm 1. The pressure on decision-making due to opinions of the family members

0.816

0.818

0.826

0.789

0.804

0.813

0.789

0.755

0.762

0.803

0.759

4.358

0.816

0.823

0.807

0.769

0.811

0.806

0.795

0.825

0.815

0.784

0.806

0.702

0.724

0.834

0.815

α

31.15 %

64.67 %

0.834

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W.-B. Lin Table 2 continued Perspective

Factor and variable

Factor load

Characteristic value

Item-total correlation value

2. The impact on decision-making of affinity degrees of the family members 3. The impact on the decision-making behavior of the financial support of the family 4. The peer pressure on decision-making.

0.816

2.716

0.806

0.795

0.798

0.819

0.765

CronAccumulated inter- bach’s value pretation variation

α

67.9 %

Purchasing behavior

0.808 1. I will take purchasing actions by referring to product information as published in professional luxury goods magazines 2. I will read carefully DM articles about the luxury goods published by the manufacturers 3. I will pay attention to product trends when buying the luxury goods 5. I care about consumer rights when buying the luxury goods; 6. I will learn the latest related product information from the manufacturer before buying the luxury goods.

0.798

3.156

0.785

0.802

0.774

0.823

0.795

0.786

0.684

0.705

0.698

63.1 %

A fuzzy neural network framework of two inputs and one output is used for illustration. Other patterns of multiple inputs/outputs can be expanded from this model. The framework is shown as in Fig. 2. 1.

Layer 1: (Input layer) (1)

Input units: I1 Output units: 2.

= X 1 , i = 1, 2

(1) Oi j

(1)

= Ii , i = 1, 2; j = 1, 2, , n

Layer 2: (Linguistic term layer)

This layer employs the first layer inputs to infer relevant membership function degree by Gaussian function (1)

(2)

Input units: Ii j = − (2)

(Oi j − ai j )2 bi2j

, i = 1, 2; j = 1, 2, , n (2)

Output units: Oi j = μAi j = exp(Ii j ) , i = 1, 2 ; j = 1, 2, , n

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High-involvement product purchasing behavior

µ (1) 11

X1

µ

µ1

11

(2) 12

12

(3) 1

µ2 W1

µ3

µ

µ4

1n

µ5

µ (1) 21

X2

21

µ

u*

m

∑ p 1

(3)

(4)

p

=

µ7

22

Wm

µ m-1

2n

(3) m

µm

(1) (Input Layer)

1

4

µ6

(2) 22

µ

I

Σ

(2) (Linguistic term layer)

(3) (Rule Layer)

(4) (Output Layer)

Fig. 2 fuzzy neural network framework

where ai j and bi j are, respectively, the center and the width parameters of the Gaussian function 3.

Layer 3: (Rule layer)

This layer is to infer the fitness degree of each rule from the rule bank (3)

(2)

(2)

Input units: I( j−l)n+l = Oi j O2l , Output units: 4.

(3) Oi

= μi =

(3) Ii

,

j = 1, 2, , n ; l = 1, 2, , n i = 1, 2, , m(= n 2 )

Layer 4: (Output layer) Input units: I (4) =

m 

O (3) p Wp

p=1

Output units: O (4) = μ∗ = m

I (4)

p=1

(3)

Op

According to the above framework that, typical rules can be expressed as if X1 is μA11 then W1 = K 1 K 1 = Constant(zero-order Sugeno fuzzy model) or K 1 = p × X 1 +q × X 2 +r (first-order Sugeno fuzzy model, p, q, r are constants)(ai j bi j ) As to the membership function’s learning algorithm, the steepest descent method of the back propagation model is used, while the least squares estimation is adopted for the learning algorithm of rule bank (K ).

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Research steps (1) (2) (3)

Preparation of a total of 772 pieces of data collected from questionnaires. Define hypothesis input/output variables, and determine the number of corresponding membership function of each variable. Carry out fuzzy neural network training with each of the 772 pieces of data as an epoch. Update parameters to get optimal membership function patterns and rule banks.

After training, the fuzzy neural network model is obtained. The effects of input variables on the output variables can be tested at this time. Since it is the effect of a certain input variable on the output variables, other input variables are all fixed values (use the average ones of the 184 pieces of data to minimize the impact of these variables). Reasons to use the fuzzy neural network model This study uses the non-linear fuzzy neural network model to reduce variables for the convenience of inputting the neural network initial values. Meanwhile, using the non-linear method can understand the reactive relationship between the variables more accurately. White (1989) stressed that neural network has capabilities to identify data type and relations, and thus could be applied in the multivariate statistical analysis. Secondly, the main reason to use the fuzzy neural network model is that the model is applied most widely and it is the most developed one that is not only suitable for prediction and categorization, but also uncertain behavior system with following advantages: (1) able to adequately approach any non-linear function; the samples in this study are represented as a highly non-linear function; (2) all the quantitative or qualitative information is evenly distributed and stored in the neurons of the network, and thus it has very strong error tolerance and strong tenacity; (3) the parallel distribution processing method is adopted to make fast large amount calculation possible; it is suitable for the non-linear system of the relatively complex behavioral science in business management; (4) require less preparation and request only the input layer and output layer data, input system to work out the relationships among variables; (5) it is applicable to empirical examples that do not need to understand the relationships among variables and sampling methods through learning cycles. Its range of application is wider than that of the traditional statistical methods.

4 Empirical results Regarding H1, this study discusses whether brand valuation is significantly related to perceived value. As for the empirical results of the fuzzy neural network model, each variable has two membership functions: the low and high one while the rule bank adopts the zeroorder sugeno fuzzy model. After about 125 epochs, the average testing error is 0.1238 with testing results as shown in Fig. 3. It represents the input variable testing data while Table ♦ represents the output data as inferred from the fuzzy neural network model. As seen, the scalar points of “brand valuation” and “perceived value” are very close, indicating that the two are significantly related. Therefore, H1 is supported. As or H2, each input variable has two membership functions: the Low and High one, and zero-order sugeno fuzzy model is adopted for the rule bank. After about 156 epochs, the average testing error is 0.1124 with testing results as shown in Fig. 4. From the distribution of the input variables and fuzzy neural network model output variables, it can be seen that the scalar points of “promotional method” and “purchasing behavior” are very close, indicating the two are significantly related. Therefore, H2 is supported. To verify H3, 3-1 and 3-2, this study applies the hierarchical regression analysis in the following verification steps: first, input the independent variable (brand valuation) and

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Fig. 3 Various input variables and membership functions of “brand valuation ” and “perceived value”

Fig. 4 Various input variables and membership function of “promotional method” and “purchasing behavior” Table 3 The effects of brand valuation on perceived value after adding price promotion (high price and low price promotions) disturbance variable

* p < 0.05, ** p < 0.01, p < 0.001

Dependent variable

Perceived value

Independent variable and disturbance variable Brand valuation (a) High price promotion (b1 ) Low price promotion (b2) Interactions ab1 ab2 R2 R2 F value

0.94*** 0.53** 0.09 −0.28** 0.13 0.63 11.8 % 16.49**

disturbance variable (low, high price promotion) into the regression equation with perceived value as the induced variable; next, input the interaction terms of independent variable and disturbance variable into the regression equation. If the interaction has significant standard regression coefficients, then the disturbance variable of the item has the disturbing effects. Otherwise, it has no disturbing effects. As shown in Table 3, the effects of the interactions between brand valuation and different price promotion types on perceived value are significant (F = 16.49, p < 0.01). Therefore, H3 is supported. Similarly, to verify H3-1 and 3-2, this study also applies the hierarchical regression analysis with perceived value as the induced variable as well: first, input the independent variable (brand valuation) and the disturbance variable (high and low price promotions) into the

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W.-B. Lin Table 4 The effects of brand valuation on perceived value after adding the disturbance variable of non-price promotion

∗ p < 0.05, ∗∗ p < 0.01, p <

0.001

Dependent variable

Perceived value

Independent variable and disturbance variable Brand valuation (a)

0.85***

Non-price promotion (b)

0.47**

Interaction ab

0.12***

R2

0.59

R2

15.9 %

F value

8.07***

Fig. 5 Various input variables and membership functions of “perceived value” and “ purchasing behavior”

regression equation in order, then input the interaction terms of the independent variable and the disturbance variable into the regression equation. As shown in Table 3, the effects of the interactions between brand valuation and high price promotion on perceived value are negatively (coefficient is −0.28) significant (F = 16.49, p < 0.01), therefore, H3-1 is supported. However, as shown in Table 3, the interactions of the brand valuation and low price promotion has no significant effect on perceived value, therefore, H3-2 is not supported. Similarly, to verify H4, this study applies the hierarchical regression analysis with perceived value as the induced variable as well: first, input the independent variable (brand valuation) and the disturbance variable (non-price promotions) into the regression equation in order, then input the interaction terms of the independent variable and the disturbance variable into the regression equation. As shown in Table 4, the effects of the interactions between brand valuation and high price promotion on perceived value are positively (coefficient is 0.12) significant (F = 8.07, p < 0.001), therefore, H4 is supported. For H5, each input variable has two membership functions: the Low and High one, and zero-order sugeno fuzzy model is adopted for the rule bank. After about 189 epochs, the average testing error is 0.1036. The test results are shown in Fig. 5. From the distribution of the input variables and fuzzy neural network model output variables, it can be seen that the scalar points of “perceived value” and “ purchasing behavior” are very close, indicating the two are significantly related, therefore, H5 is supported. For H6, each input variable has two membership functions: the Low and High one, and zero-order sugeno fuzzy model is adopted for the rule bank. After about 209 epochs, the average testing error is 0.1024. The test results are shown in Fig. 6. From the distribution of

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Fig. 6 Various input variables and membership functions of “subjective norm ” and “perceived value”

the input variables and fuzzy neural network model output variables, it can be seen that the scalar points of “subjective norm” and “perceived value” are very close, indicating the two are significantly related, therefore, H6 is supported.

5 Conclusions and suggestions Most of the empirical results from this study support the proposed hypotheses, and the following conclusions can be drawn. Firstly, H2 and H5 indicate that the value disseminated by the product to consumers is an important basis for the purchase of the product, which is consistent with Pennington (2002). However, the empirical results from this study also support that promotional activities have positive effects on purchasing behavior, which is opposite from his viewpoint that “it is more important to underline the significance of being the owner of the product”. Secondly, H3-2 of this study is not supported by empirical results, namely, the positive relationship between brand valuation and perceived value is not affected by low price promotion. However, as H3-1 is supported, it can be proved that the psychology of buying luxury goods is subtle. In other words, high-priced products enjoy higher prestige to consumers as value of such products may be undermined by high percentage discount. Based on the three characteristics of conspicuous consumption proposed by Campbell (1995), namely, such consumers will judge level of luxury by price, and the social status value will be negative in the minds of consumers if promotion methods are used to sell such goods. Thirdly, from the empirical results of H3 and H4, when carrying out price promotion for luxury goods, everything should be taken into account, namely, the characteristics of the target market consumers and the overall external environment must be taken into consideration for success. Fourthly, as H6 is supported by empirical results, it indicates that the consumption of prestige type products will be affected by normative influence of others, as proposed by Vigneron and Johnson (1999), despite the different categorization of luxury goods in this study. In terms of practical operation, the marketing strategy for such luxury goods should consist of different strategy groups or primary or peer groups, that is, public self-consciousness has certain effects. In addition, the characteristics of this study are as follows: (1) the empirical comparative results integrating linear statistical model and non-linear fuzzy neural network model is rare in previous studies; (2) this study integrates TPB and TPV to discuss the psychological characteristics of consumer behavior, and employs Taiwanese consumers’ purchasing behavior as the empirical study objects. It is different from past studies that emphasized on consumer

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behavior in the Western society (Vigneron and Johnson 1999; O’Cass and Frost 2002) or cultural aspect (Horiuchi 1984; Hoyer and Brown 1990). Future studies can focus on the following directions: (1) compare factors of influence from perspectives of viewpoints of different times or varying types of luxury goods to possibly accurately weigh factors affecting consumer purchasing behavior and trends; (2) add other variables relating to factors affecting consumer purchasing behavior such as: consumption motivation, cross-cultural factors to complete the purchasing behavior model; (3) expand the comparison of different purchasing environment, such as difference from perspectives of consumers of different consumption environments may produce different management implications; (4) apply different research methods such as structural equation model to compare the empirical results of different research methods, so as to make greater academic contribution.

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