Literature Review : Coffee Experience and Consumers Buying Behavior
Today’s market is characterised by highly competitive organisations which are all vying for consumer’s loyalty. Firms are faced with the challenge to maintain their own competitive edge to be able to survive and be successful. Strategies are carefully planned and executed to gain the ultimate goal of all i.e. company growth. However, external factors are not the only elements which influence growth. There are also internal factors, components working within the organisation which shape the direction of the company.
Despite the economic and technological conditions that make it possible now to promote products and services in a larger consumer market, there are other factors that still need to be considered for a business organisation reach out easier to their target market. Looking into the characteristics and thought processes of the people still holds as the most significant factor to be looked into by the individuals in the field of sales and marketing. The large scope of market can pose a hindrance to a successful marketing strategy in terms of over generalised definition of the target or niche market.
According to Kotler and Armstrong (2001), consumer buying behaviour refers to the buying behaviour of the individuals and households who buy the goods and services for personal consumption. Consumers around the world are different in various factors such as age, income, education level and preferences which may affect the way they avail of goods and services. This behaviour then impacts how products and services are presented to the different consumer markets. There are many components which influence consumer behaviour namely: cultural, social, personal and psychological (Kotler & Armstrong, 2001). These characteristics cannot be controlled by the companies; therefore, a need to assess these elements in order to create an effective marketing plan.
For the business people and the people in the field of advertising and marketing, the product or service being offered could be a good start in planning and executing an effective campaign. Let say in coffee business, knowing the product and its demands in the market as well as the people who will likely avail and take advantage of the offer will open the possibilities for a campaign that will be most ideal in the market. The manufacturers of coffee products and the advertisers should be conscious enough to know the characteristics of their product and its demand. There are products and services that are only utilised in a particular location because of the unique lifestyle of the people. The character of the product, if properly studied, could be made and taken as an advantage rather than a drawback in gaining a larger number of target market.
Consumer behaviour and consumer decision-making have become prominent research topics in the various fields of consumer science in recent years (Fullerton, 2005; Stern, 2000; Anurit et al, 1999). Generally, consumer behaviour is defined as the behaviour or activities that consumer engage in when selecting, purchasing, and using products and services so as to satisfy needs and desires. Such activities involve mental and emotional processes, in addition to physical actions (Schiffman & Kanuk, 2004, p.8).
The important of consumer behaviour is deeply rooted in the marketing strategy. Virtually, all decisions involved in developing an effective marketing mix for a product or service rely on thorough knowledge of the consumers who comprise the target market (Mullen & Johnson, 1990 p.16).
Understanding buyer behaviour is one of the more perplexing tasks confronting every business owner. The difficulty arises from the heterogeneity of buyers, from their brand loyal or being groups of individuals who differ from one another. But differences notwithstanding, consumers do share attitudes, opinions, reactions, and desires at various times. Business experience, marketing research, theoretical constructs and models, and trial-and-error methods help to find some of the common denominators. This study aims to identify a pattern of behaviour among its chosen respondents.
Consumer Brand Loyalty
Brand loyalty is widely understood to be the ultimate goal a company set for a branded product. In today’s highly competitive environments brand loyalty is being a key factor to make a critically valuable contribution to organisation. It is defined by Wilkie (1994) as “a favourable attitude toward, and consistent purchase of, a particular brand”. Repurchase is not sufficient evidence of brand loyalty as it has been described as a behavioural response and as a function of psychological processes (Jacoby and Kyner, 1973). Brand loyalty is a function of both behaviour and attitudes.
In order to understand the factors to drive consumer brand loyalty, it is necessary to understand the basic of consumption relationships. Douglas (2006) suggested that consumers who more involved with a particular brand are also more committed and therefore more loyal to that brand. Loyalty level to brand, Lau et al (2006) cited from Evans et al 1996 that there are four categories of consumers: Hard-core loyal consumers – buy this particular brand name; brand switchers – choose and buy the products or brands depending on pricing, situational factor and others, new users and non-users. But the last two groups, especially non-users, tend not to be loyal to any brand. Therefore the two types: hard-core loyal buyer and brand switching buyer will be the main focus in this paper. Additionally, brand switchers are the most interesting group in today marketing perspective.
Customers are considered to be a significant part of a corporation’s rise to success, especially due to their critical decisions of either using or declining the services that a particular company gives. Consumer behaviour has often be assessed by corporations to help predict their possible demands and therefore also change and improve their products and services. Several factors can help with the decisions made by the corporations, which includes their demands as well as the ability of the corporation to advertise the product or service. Chung and Kim (1997) have stated that culture and beliefs are large influences with regards to the decisions of the consumers. This does not only refer to the advertising but also with regards to the actual brand itself and what it serves. By knowing the expectations of the majority of the people within the culture that the product is being sold to, the company is also showing that they have enough ties with the particular group that they already know what they want and therefore have managed to offer it to them.
Actually, the term “brand loyalty” is not necessarily confined on the use for products but also the services that they offer to the other people who are considered their clients and customers. However, for this study, it will only refer to coffee brand loyalty unless specifically specified. As also mentioned, several factors can also influence brand loyalty, especially regarding the choice of the clients, which includes culture. Advertising of the corporation is also a great factor for the choice of the clients.
Loyalty for a particular brand or name has also evolved over the years, mostly basing itself from the behaviours of the consumers themselves. Johnson and Mullen (1990: 120) have identified the difference between brand loyalty and habitual buying or patronisation, which focuses on the trust of the person with regards to a particular brand to deliver the quality service that they expect from a particular name. This usually involves that the client themselves have had practice or experience with other products but consequently found it lacking and therefore have managed to continue staying with their choice.
Consumer behaviour and brand loyalty are also very often attributed to each other; consumer behaviour can highly predict brand loyalty therefore giving the corporations the break that they can get when their customers have high expectations or disregard a particular service or product, thus letting them know their reactions concerning the improvements or changes. The decisions that the people make involve several cognates that can affect their pattern of thinking and also their behaviour; by studying this, the corporation may also be able to predict the direction that their product and services may be headed (Kardes, Muthukrishnan & Pashkevich 2004) therefore giving the corporations the advantage when it comes to maintaining an edge against their rival corporations.
The phenomenon of the consumer behaviour and loyalty has also continued to baffle many researchers. Baldinger and Rubinson (1996) have pointed out that despite the many studies concerning the subject, there are still some inconsistencies on the studies on the reasons for consumers’ switching their brands, mostly due to too numerous and varied reasons. The authors also proposed that while consumer behaviour and brand loyalty is mostly seen as cause and effect, the relationship of the two is very close and therefore more pronounced. For example, behaviour and attitude can help shape the choices and the decisions of the person, therefore giving the person a sense of their own demands and expectations. In finding a brand that can give them their expectations, then there is also the high possibility that they will continue to use that particular brand. At the same time, the human mind is rarely stagnant, therefore continuously changing and remaking viewpoints and decisions; because of this, the brand must also continue to be dynamic while still maintaining the core of their beliefs and their ideas. The attitude of the corporation when handling their corporations must also be accounted for, especially due to the methods in which they continue to uphold the expectations of their consumers.
This is attested by Langer (1997) in the discussion concerning the attitude of the people regarding brand loyalty. The relationship of the corporation and the consumers must be examined in order to gain a clearer assessment of the expectations of both parties, therefore giving the corporation the idea on how they will be able to improve their services. In line with this, it is important to point out that while there is the high possibility of consumers trying out new brands, it still important to continue focus on the brands that they grew up with or the brands they are familiar with. Actually, Langer (1997) justified that the need for the consumer to establish a constant in their life which may include the brand, which they may also associate with a previous event or even a memory that will help them in deciding which they believe is the best brand. At the same time the brand must also deliver the promise to the consumers in order to ensure that they will continue to familiarise themselves with the service, yet it is through the connection with the memories of the consumers that the corporation as well as the continued better services that they can give to their clients that will give the corporation hope that they will continue to be a part of the lives of the consumers Langer (1997).
A weakness to all these studies, however, is that they primarily focus on the brand of the product and not the service itself. While the studies have given examples of the reaction of the consumers concerning the brand, services is not given much attention; this can cause some problems due to the diverse methods of choices that the consumers may follow based on the market. On the other hand, there may also be some similarities with the marketing of the two and therefore some of the conclusions of the researches may also apply to them. Despite all this, it should be remembered that coffee businesses has a different set of strategies that organisations of companies are following. Some brand loyalists may not apply the same method when deciding if they would rather go in a coffee shop let say Starbucks, and therefore may have to apply another tactic when deciding based not on emotion but on convenience or availability of the products that they are also loyal to.
Factors Affecting Consumer Buying Behaviour
The consumers’ perception of a product highly affects its decision on what product to buy. The decision process is influenced by the information available to the consumer and the way in which the consumer processes that information. The decision process is also influenced by the consumer's beliefs, attitudes, and intentions as well as many other individual characteristics.
Product characteristics include the extent to which the product's probable performance can be assessed by visual inspection and its complexity, that is, the number of decisions the consumer is required to make about it. Consumer characteristics include experience with purchasing the product, and the kinds of criteria the consumer uses in judging the product. The evaluative criteria are shaped by the consumer's beliefs, attitudes, and perception of risk in the purchase.
Research on sensation and perception, product attribute, product quality, service quality, categorisation, information search, memory, attitude and behaviour, attitude formation and formation and satisfaction have been undertaken to understand consumer behaviour (Kivela, 1997; Jacobs, Latham & Lee; 1998, Andaleeb & Conway, 2006). As stated by (Karjaluoto et al, 2005; Hsu& Hung, 2005; Lau et al 2006; Ankomah & Yiridoe, 2006), attitudes towards purchase behaviour are believed to be shaped by many factors such as direct experience with the product, information acquired from others, price, nature of business, satisfaction, exposure to mass media and etc.
In this study, to identify the factor influence the consumer motivation and decision in buying behaviour, EKB model: Problem recognition, Search, Alternative evaluation and choice which originally developed by (Engel and Blackwell, 1982) is a framework of reference. Factors which are being investigated under EKB model are as followings;-
Ø Problem recognition
- Situational Factor: i.e. Fashion-conscious (Being sociable), Stay awake or to increase work efficiency, motivated by thirst, etc.
Location: Location and number of shops are crucial in buying decision.
Ø Alternative evaluation
3. Brand name: The prestigious brand name and their brand image are easily able to attract consumers to purchase the products
4. Taste: Each customer has their own preference on different taste and aroma
5. Service Quality: Service quality will directly affect customer satisfaction.
6. Price: Consumers are willing to pay a premium price for their favoured brand
7. Promotion: Effective communication can persuade and motivate the buying behaviour.
Hence, the framework used is in Figure 1:
Figure 1. Research Model of Factor Affecting Consumer Behaviour
This study aims to identify the presence of such factors using the case of coffee brand and experience of top three coffee brands in Hong Kong.
In the current business era, the value and importance of customers is not something that should be set aside by companies. Marketing plans and strategies would be incomplete without paying much consideration to the customers. Customers will and should always be a part of the agenda in any marketing plan of any company. Because of the implications for profitability and growth, customer retention is potentially one of the most powerful weapons that companies can employ in their fight to gain a strategic advantage and survive in today's ever increasing competitive environment (Lindenmann, 1999).
Basically, consumers can either be subjective or objective, testing the persuasiveness of brand names. Coffee shops selling the coffee products also play an important role in swaying the decisions of university or college consumers. The whole package or visual appeal of the coffee outlet can determine sales, or the service of the sales ladies or the crews. Furthermore, consumers not only in coffee business but also to other retail businesses may choose particular products/brands not only because these products provide the functional or performance benefits expected, but also because products can be used to express consumers’ personality, social status or affiliation (symbolic purposes) or to fulfil their internal psychological needs, such as the need for change or newness (emotional purposes) (Kim et al, 2002). These are just some of the factors that affect consumer behaviour. They have been the subject of consumer research for years, for instance, linking them with customer service and customer satisfaction, or the efficacy and persuasiveness of advertisement, etc.
Which means that consumers buy products for the benefits they reap out of it, the study of consumer behaviour investigates the steps, or the processes involved regarding the decisions made by the consumer. Most consumers regard the purchase of real estate to be ‘high involvement goods' that require complex decision-making,’ in purchasing real estate, such as houses, apartments or units, consumers usually go through three key processes before they consider buying, and these are: information search, evaluation of alternatives and decision rules.
Cynthia Huffman, S. Ratneshwar and David Glen Mick (2000), emphasised that “consumer behaviour is best understood as problem-solving behaviour.” Consumer behaviour is related to certain motivational behaviours that are aimed towards attaining a certain goal at the end. Goals, according to developmental psychologists are “cognitive representations of desired-end status which serve as standards in the control of behaviour. Research on sensation and perception, attention, categorisation, inference making, information search, memory, attitude and behaviour, attitude formation and formation, conditioning and satisfaction have been undertaken to understand consumer behaviour. In the area of sensation and perception and attention, most works are confined primarily to visual or auditory processes. Among the studies on this area include those of Russo and Leclerc (1994) who examined attention to packages on store shelves, as measured by eye fixations.
Based on the integrated model, culture influences behaviour through its manifestations: values, heroes, rituals, and symbols (Luna and Gupta, 2001). The combination of both etic and emic perspective on the manifestations, can basically reveal culture’s strong relation with customer behaviour. The etic philosophy is based on the definition of culture as “the collective programming of the mind which distinguishes the members of one group or category of people from another’’ (Hofstede, 1997). Conversely, the emic philosophy pointed out that upon evaluating issues from the viewpoint of the variables being studied (Luna and Gupta, 2001). As cited from McCracken (1988), this philosophy determines the coordinates of social action and productive activity, specifying the behaviours and objects that issue from both.
Values are basically the basis of one’s attitude or restriction in attitude. Some examples of values include freedom, pleasure, inner harmony, and happiness. Heroes, on the other hand, refer to icons in the society that may have an impact on people of different levels. Examples of heroes are sports figure or pop culture figures. Luna and Gupta (2001) stated that heroes may influence consumer behaviour through their association with certain products and brands. The same goes with rituals, or symbolic activities commonly performed over and over, such as bathing, tooth brushing, attending to mass, to school, etc. Their involvement on the consumption of consumer products makes them important for consumer behaviour. Finally, symbols are equally important because different cultures have different symbols that they favour i.e. language, logos, signs, etc (Luna and Gupta, 2001).
Coffee Experiences in Hong Kong
Aside from the local coffee shops and restaurants that offer traditional coffee experience among people, international coffee brands are present among business streets in Hong Kong. The popularity of brands is seen to be the most compelling factor that contributes to the emergence of contemporary coffee experience.
Starbucks, according to its business website “made its debut in Hong Kong in May 2000 with the first store launched at Central's Exchange Square, followed by Hysan Avenue in Causeway Bay. By the end of 2000, there were nine Starbucks coffee houses and the store count reached 24 by the end of 2001 and 60 by end of 2005. Starbucks now has opened near to 65 stores in Hong Kong. Starbucks coffee shops are now located at commercial, shopping & entertainment and residential areas across Hong Kong”. The brand is a joint venture between Starbucks Coffee Company International and Maxim's Caterers Ltd., a premier catering conglomerate in the region.
Similarly, Pacific Coffee’s mission “to provide the perfect cup, anywhere, anytime” is proudly Hong Kong. This is said to be the answer to the Starbucks challenge with almost 40 outlets in the city. The first outlet opened in 1992 and was located in the Bank of America Tower in Central, Hong Kong. The group is owned by Chevaleir Pacific. With its inviting environment with comfortable seating, wireless internet access, enjoyable music, a broad array of food, and coffee beverages, it was awarded the Best Coffee in Hong Kong.
The culture of coffee brands and experience is an interesting area of empirical exploration. Thus, this research case study hopes to explore deeper on the coffee buying behaviour among university students. As stated, its main goal is to identify the most important factors consumers have in mind when buying coffee (i.e. brand name, taste, price, location, convenient, atmosphere, and others) in either of the mentioned brands.
Marketing of Products
Despite of the current status of coffee products around the globe, the marketing of products has also continued to evolve with regards to the store itself. Peterson (1992) wrote that technology has become one of the most important parts of marketing especially in the U.S. Technology has been used not only for the consumers’ method of purchasing but also with regards to the improvement of services, thus developing the quality and also allowing the consumers to gain easier methods of accessing the information that they may wish to give. Moreover, it has also been easier to manage programs around the country and even internationally, which allows for wider range of programs for the people especially when it comes to customer loyalty programs; consumers who are wide-travellers can now continue to avail of the program despite not being in the same place at any given time. Moreover, the chance of consumer loyalty may also grow along with the success of the company through acquisition or partnerships with other coffee markets in other parts of the world as part of the expansion program through globalisation. While acquisitions and partnerships have different procedures, these usually involve a company that wishes to expand but would rather also take advantage of an already known market in a particular country, therefore entering into a partnership that will help the market in acquiring new methods of services to be offered for the consumers, while control may also be based on the parent company or the sub-company. These consumers may then continue to patronise their chosen coffee shop despite having some differences with the acquisition or the partnership with the parent company.
Benefits for the consumers are also considered by other markets, as noted by Coyles and Gokey (2002) in which programs are developed. The authors note that the company must ensure that their weaknesses will be fixed immediately and that to ensure the continued patronage of the consumers, there must be a note for the behaviour patterns of the consumers while also noting the products that are often bought. Understanding the value of the consumers need to be established to ensure that the consumers will be taken care of and thus the well-structured programs must be considered and given assessment; moreover, the target consumers must also be established. Value of the products can be given, such as discounts, gifts, and promotions for the consumers. The authors also emphasise that communication is an important part of the building and therefore there must also be deliberated to help the organisation head to gain information on how they will be able to improve based on the desires and needs of the consumers. Familiar and continued efforts of promotion that will show group inclusion must also be considered especially when it comes to the benefits that the consumers may take advantage of. As was the above mentioned studies, the research has also found that while the group that constructs of emotionally tied consumers may be small, the organisation may continue to focus on building the emotional ties that other consumers may have on their company and their services; to ensure this, some of the insurances are the coordinated set of actions and brand communication, and delivery in which the company highlights the unique quality of the product or their service. At the same time, because of the dynamic nature of the customers, the company may also continue to try in meeting these expectations while also retaining part of their charm and efforts to include those who may prefer the original service. Marketing can meet these demands by knowing the expectations of the consumers, developing their programs and their benefits, and also delivering quality service to the consumers through the various strategies that they may use.
Marketing of coffee products with respect to the buying behavior of consumers has undergone several changes over the years, especially considering the changes with the demands of the consumers. In addition to this, technological change has also widely contributed to the changes in the primary method of purchase, which now includes credit cards and cashless purchases that rely on information exchange rather than the actual act of purchasing in a store. From this, development of marketing of coffee products has already continued to evolve way into interactive marketing of the products based on one source (Bailey & Schultz 2000) as different methods of ensuring the consumers’ interests are being considered for their patronage. The marketplace has also grown to become more competitive, all vying for the attention of the average consumer, thus their loyalty has also continued to increase over the years as they are now the source of the companies that rely on their abilities to choose which they may wish for their own needs and demands.
From the discussion of previous literatures, it is discovered that while coffee product and company brand loyalty may have some similarities, there are essentially some considered differences especially with regards to the strategies that the companies may use to endorse their services and products. Such actions will help the company to ensure the loyalty of their consumers, thus giving them the allowance of knowing how they will be able to improve their services.
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