Dinkum Journal of Economics and Managerial Innovations (DJEMI).

Publication History

Published: March 01, 2023

Identification

D-0038

Citation

Yuning Zhang, Wang Hexian, and Zhubai Li, (2023). Impact of economic factors on consumer perception: a partial least square approach on the consumer buying behaviors. Dinkum Journal of Economics and Managerial Innovations, 2(03): 151-162.

Copyright

© 2023 DJEMI. All rights reserved

Vol. 2 No. 03 (2023)

151-162

Impact of Economic Factors on Consumer Perception: A Partial Least Square Approach on the Consumer Buying BehaviorsOriginal Article

Yuning Zhang1 Wang Hexian 2, and Zhubai Li,*

  1. School of Management and Economics, Beijing Institute of Technology, China; yzhangg@gmail.com
  2. School of Management and Economics, Beijing Institute of Technology, China; w4wangh@gmail.com
  3. School of Management and Economics, Beijing Institute of Technology, China; li_ zhubai@gmail.com

*             Correspondence: li_ zhubai@gmail.com

Abstract: Catalog marketing is one of the common tools used by marketers for marketers. It is one of the oldest ways of direct marketing. In modern marketing, marketers involve the concept of enjoyment and entertainment factors that builds a positive image in the minds of consumers. It builds stronger consumer engagement that builds the perception of using a particular product. The consumer’s perception of a product, which in turn drives buying behavior, has been significantly influenced by catalogs, which have played a significant role in this process. In this study, the consumer’s perception works as a direct part of building consumers’ behavior toward purchase. The data was collected by conducting a survey in China with a total of N=525 respondents, which included both males and females. The purpose of the survey was to investigate people’s general perceptions of catalogs. Out of N=525 respondents, 509 respondents filled the form questionnaire correctly. The technique of sampling at a convenient time was used, and the results were analyzed using the partial least square method with the Smart PLS software. The analysis of the data shows that customers place a greater emphasis on economic and efficiency factors in their consumer perception, which in turn leads to customer purchasing behaviors while they are experiencing catalogs. Consumers have given less importance to entertainment/enjoyment, visual appeal, and service excellence in watching catalogs. This article provides assistance to marketers in making efficient use of catalogs in order to improve their ability to persuade consumers. Catalogs should be created by businesses with careful consideration given to the nature of the products being sold and the information requirements of the target audience. They need to place a greater emphasis on economic information and the features of products that maximize efficiency. It has the potential to boost sales and develop a more positive brand image, both of which are necessary to accomplish the company’s goal.

Keywords: economic factor, efficiency factor, visual appeal, consumer perception, consumer purchase behavior

  1. INTRODUCTION

Catalog marketing is one of the common tools used by marketers for marketers. It is one of the oldest ways of direct marketing. Most companies have used catalog marketing since the 1880s to make aware of their products to consumers [1]. The catalogs are of various types, i.e., print catalogs, online catalogs, single-company catalogs, and multiple-company catalogs. Catalogs, in general, are a source that can be used to establish a connection between a consumer and a product’s manufacturer [2]. The production of a useful catalog that contributes to increased sales requires the completion of five distinct steps. 1. Select target audience 2. Visualize your company’s goods or services 3. Select the company with which to affiliate the brand 4. Describe the characteristics and information in question. 5. Determine how successful the catalog has been [3]. In the course of this study, an attempt is made to investigate every aspect of catalogs. A successful catalog assists customers in more accurately perceiving a product in their minds, which in turn leads customers to consider making a purchase of that product. The successful catalog possesses qualities such as effectiveness, economics, enjoyment or entertainment, superior service, and aesthetic appeal. All of these things were compiled into a stronger and more convincing catalog from the customer’s point of view. Direct marketing, of which catalog marketing is a type, is the type of marketing that makes up the majority of what marketers do [4]. In catalog marketing, the consumers typically derive fundamental information that assists in perceiving the quality and all attributes of the products, which ultimately leads to consumer purchases. Catalog marketing is a form of direct marketing. A consumer’s perception is a feeling that they have about a product or service after forming their initial opinion about it [5]. Building up a consumer’s perception of a product in order to sway their decision to buy that product can be accomplished through catalog marketing. The direct connection that can be made with a consumer through catalog advertising is beneficial to that consumer when it comes time to make a purchase decision. Whenever a consumer decides to adopt any product or service after making a payment, they engage in what is known as consumer purchase behavior. After developing a perception of a product or service, the next step is to determine whether or not you intend to make a purchase [6]. The primary objectives of this research are to investigate the impact of various aspects of catalog marketing, specifically the economic factor, the efficiency factor, the enjoyment/entertainment factor, the visual appeal factor, and the service excellence factor, on the perceptions that consumers have of catalogs, which in turn motivates consumers to make purchases.

  1. LITERATURE REVIEW

Economic factors always play a key role when it comes to developing the consumer perception of catalogs; specifically, internet buying behavior is an important economic factor in ease of buying [7]. It is also read and found that factors are an important part that consumer perception is dependent on. There are different factors that influence the consumer perception of buying intentions, i.e., economic factors, social factors, cultural factors, personal factors, etc. [8]. Previous studies used to promote change in consumer purchasing behavior have shown that the retail price and promotion costs retailers more often. Constantly keeping the benefits received by users, there are several ways for retailers to promote a negotiated price [9].

2.1 Efficiency Factor

There have been numerous discussions about the effectiveness of catalogs; consequently, it has a more significant influence on customers who walk into stores in search of catalogs. The effectiveness of catalogs is impacted by factors such as competitive pricing and the way the catalogs are presented [10]. The efficiency factor in catalog marketing refers to how much the catalog contributes to creating a positive brand perception among consumers, which in turn influences consumers to make purchases. When it comes to engaging specific customers, catalog marketing is still and always will be an effective method for marketers. It is beneficial to the consumers because it assists in the development of an efficient relationship between the consumer and the company [11].

2.2 Enjoyment/Entertainment Factor

In modern marketing, marketers involve the concept of enjoyment and entertainment factors that builds a positive image in the minds of consumers. It builds stronger consumer engagement that builds the perception of using a particular product [12].

2.3 Visual Appeal

Visual appeal is a thing that is seen in how it influences consumer behavior and attitudes toward different purchases they are going to make. Visual terms are always helpful while looking for a product [13]. While placing a product into the market, there are different aspects that are kept in mind by the manufacturer and the retailer regarding the vision of the visual appeal [14]. The visual appeal affects the subconscious level in the minds of consumers; it evokes emotions and builds brand perception so that it can motivate a consumer toward purchase [15].

2.4 Service Excellence

The term “service excellence” refers to the job that the catalog does and how well it performs its duties in the process of building the perception of the brand. Can the catalog be built well enough to provide information that is accurate and useful, thereby fostering a positive image of the brand in the minds of potential customers? The company demonstrates its ability to go above and beyond for the benefit of the clientele in the area known as service excellence [16]. The excellence in customer service was achieved through the completion of four steps: the core value proposition, the management of complaints, individual service, and supporting service. These various services are guaranteed in the catalog according to the character and classification of the product [17]. This study expands our knowledge of the various service quality dimensions that are present in the content of online commerce from the various prospective groups. Additionally, this study investigates the ways in which services can affect the way customers perceive those services. Because the customer requires services of high quality, the service itself is the first thing that influences the customer’s perception [18]. Customers’ satisfaction with waiting time buyers by management concepts service businesses can be crucial to the company’s overall success. It is essential to cut down on the amount of time customers have to wait, as managers may view this as an excessively long period of time. Literature pertaining to architecture, environmental psychology, psychology, physiology, surgery management, sociology, and marketing, how to construct a conceptual model of how the service environment can affect and influence the result, and waiting time perception [19] are all included.

2.5 Consumer Perception

The consumer always perceives after visualizing some product. The catalog is an effective way to build a relationship between the consumer and the marketer so that a consumer builds a purchasing intention. The customers build trust while experiencing a catalog and build pre-association with a particular product. The consumer’s positive perception always motivates them to purchase. Consumer perception is about judgment, so it can be either negative or positive [20].

2.6 Consumer Buying Behavior

The consumer purchase decision is a very delicate process. Different factors are in the process of affecting the decision of a customer while purchasing a product on the basis of visual perception. There are also some additional factors, like visual merchandising have a strong effect on the consumers buying decisions. It helps the consumer to better analyze the difference between the different products; special display in the stores creates a strong effect on the consumers’ mind [21]. Different studies and different experiments have shown that visual displays are always creating a powerful impact on the consumer [22]. Consumers are more attracted if companies pursue their product catalogs because it gets impact consumers’ mind, which motivates them to purchase. Consumers motivate to purchase if companies send catalogs offering their products [23]. It was surveyed that two third of catalogs were opened and read. It is probably the most watched tool by consumers compared to other marketing tools [24].

H1: There is a significant change in consumer perception due to a change in the economic factor of the catalog.

H2: There is a significant change in consumer perception due to the change in the efficiency factor of the catalog.

H3: There is a significant change in consumer perception due to the change in the enjoyment/entertainment factor of the catalog.

H4: There is a significant change in consumer perception due to a change in the visual appeal of the catalog.

H5: There is a significant change in consumer perception due to a change in the service excellence of the catalog.

H6: There is a significant change in consumer purchase behavior due to a change in consumer perception of the catalog.

Figure 01: Conceptual Model

  1. MATERIALS AND METHODS

In this research, the survey was conducted by a questionnaire to know about the catalog’s impact on consumers’ perception of consumer buying behavior. The questionnaires were filled with N=525 respondents from both males and females from China. Out of N=525 respondents, N=509 provided correct data about the consumer’s perception of catalogs that leads to consumer buying behavior. This convenience sampling technique was used and analyzed by using the Partial Least Square approach through SMART PLS software [25].

Table 01: Reliability Analysis

   

Cronbach’s Alpha

 

Composite Reliability

Average Variance Extracted (AVE)
Consumer Perception (CP) 0.912 0.934 0.740
Consumer Purchase Behavior (CPB) 0.866 0.917 0.788
Economic Factors (ECOV) 0.834 0.900 0.750
Efficiency Factors (EEFV) 0.894 0.934 0.826
Enjoyment/Entertainment Factors (EntV) 0.880 0.926 0.807
Service Excellence (SE) 0.855 0.933 0.874
Visual Appeal (VA) 0.838 0.902 0.754

Cronbach’s Alpha and composite reliability shows the reliability and goodness of data. Both values should be greater than 0.7 [26]. All the variables are greater than 0.7, which shows that the data is reliable. The average Variance extracted shows the reliability in the context of convergent validity. Its value should be greater than 0.5. In our research, the values for the entire constructs met the requirement.

  1. RESULTS AND DISCUSSION

4.1 Convergent Validity

Convergent validity is described as questions that ask the respondent for a response that is valid for a specific construct [27]. It can be tested by AVE value and correlation between the indicators of a construct; if the coefficient of correlation is above 0.7, then it is suggested by the researchers that it is considered convergent validity according to the standard [28]. The standard value of AVE is 0.5.

Table 02: Fornell-Larcker Criterion

CP CPB EcoV EEFV EntV SE VA
 

CP

 

0.860

CPB 0.824 0.887
EcoV 0.871 0.794 0.866
EEFV 0.881 0.817 0.850 0.909
EntV 0.735 0.723 0.723 0.750 0.898
SE 0.711 0.950 0.704 0.766 0.681 0.935
VA 0.872 0.825 0.837 0.959 0.870 0.774 0.868

It measured the discriminant validity, which shows that it has a distinct concept of questions with their variables. The threshold criteria of Fornell Larcker is that the value should be greater than 0.6. In the above table, all the constructs have greater value than which shows all questions measure the good distinct of a variable.

4.2 Discriminant Validity

It is a difference between the construct with respect to the responses of respondents. The difference can be verified by outer loading [29]. The correlation between the construct is comparatively high than the correlation with indicators of other constructs, so the construct is discriminately valid. In the given below table, the cross-loading values in Figure 02 should be maximum with its own construct and less with other constructs.

Table 03: Cross Loading

  CP CPB EcoV EEFV EntV SE VA
CP1 0.854 0.672 0.850 0.829 0.641 0.603 0.815
CP2 0.831 0.709 0.747 0.786 0.735 0.627 0.802
CP3 0.843 0.727 0.618 0.695 0.541 0.644 0.669
CP4 0.887 0.720 0.754 0.751 0.640 0.603 0.734
CP5 0.886 0.716 0.763 0.721 0.598 0.581 0.723
CPB1 0.837 0.887 0.778 0.739 0.651 0.698 0.747
CPB2 0.647 0.869 0.657 0.711 0.616 0.931 0.710
CPB3 0.681 0.907 0.660 0.721 0.657 0.938 0.735
EFFV1 0.790 0.755 0.793 0.934 0.662 0.728 0.842
EFFV2 0.802 0.723 0.790 0.902 0.648 0.672 0.877
EFFV3 0.809 0.748 0.733 0.889 0.733 0.688 0.893
EcoV1 0.725 0.747 0.867 0.737 0.531 0.698 0.690
EcoV2 0.710 0.620 0.878 0.651 0.625 0.509 0.667
EcoV3 0.816 0.691 0.853 0.807 0.709 0.619 0.804
EntV1 0.645 0.674 0.647 0.683 0.923 0.656 0.833
EntV2 0.630 0.611 0.669 0.656 0.870 0.576 0.711
EntV3 0.702 0.663 0.634 0.682 0.902 0.605 0.797
SE1 0.647 0.869 0.657 0.711 0.616 0.931 0.710
SE2 0.681 0.907 0.660 0.721 0.657 0.938 0.735
VA1 0.645 0.674 0.647 0.683 0.923 0.656 0.833
VA2 0.802 0.723 0.790 0.902 0.648 0.672 0.877
VA3 0.809 0.748 0.733 0.889 0.733 0.688 0.893

The upper table shows that cross-loading values of all questions are more reliable with their own construct and less reliable with other constructs. The threshold value should be greater than 0.7, which shows all constructs are reliable.

4.3 R-Square

The R squares show how well a regression model predicts our data set. The upper table shows that consumer perception is measured by 83.4% by independent variables. The consumer purchase behavior is measured by 67.8% by all the independent variables.

4.4 PLS Path Model

The upper model shows the path model in which the factor loading values of all the variables are greater than 0.7, which means that all the questions are reliable and well-measured. The inner loading values show that Economy Factor has the most impact on consumer perception, i.e., 41.6%.

Figure 02: PLS Path Model

The visual appeal has 17.7%, the Entertainment/ Enjoyment Factor has 2.6%, the efficiency value has 33.1%, and service excellence has 1.0% [30]. Consumer perception has a 27.8% impact on consumer purchase behavior.

 

4.5 PLS-SEM Path Analysis

Figure 03: PLS SEM Path Analysis

Table 04: Hypotheses Statistical Result

Hypotheses Sample Mean (M) Standard Deviation T Statistics (|O/STDEV|) P

Values

Impact of Consumer Perception on Consumer Purchase Behavior  

0.825

 

0.022

 

36.766

 

0

Impact of Economic Factors on Consumer Perception  

0.414

 

0.059

 

7

 

0

Impact of Efficiency Factors on Consumer Perception  

0.318

 

0.118

 

2.795

 

0.005

Impact of Enjoyment/Entertainment

Factors on Consumer Perception

 

0.023

 

0.09

 

0.292

 

0.77

Impact of Service Excellence on Consumer Perception  

0.014

 

0.057

 

0.172

 

0.864

Impact of Visual Appeal on Consumer Perception 0.191 0.168 1.051 0.294

In hypothesis testing, we consider the P-Values and T-Statistics values for the acceptance and rejection of the results. P-values should be less than 0.05, while T- the value should be greater than 1.96 [31]. There were six hypotheses made to evaluate the result. H3, H4, and H5 are rejected because it shows a weaker relationship with consumer perception. H1, H2, and H6 are accepted because they show a significant relationship because consumer perception builds a positive relationship with consumer purchase behavior, economic factors, and efficiency factors.

Table 05: Hypotheses Result

SR HYPOTHESIS Supported
 

H1

There is a significant change in consumer perception due to the change in the economic factor of the catalog.  

Yes

 

H2

There is a significant change in consumer perception due to the change in the efficiency factor of the catalog.  

Yes

 

H3

There is a significant change in consumer perception due to the change in the enjoyment/entertainment factor of the catalog.  

No

 

H4

There is a significant change in consumer perception due to the change in the visual appeal of the catalog.  

No

 

H5

There is a significant change in consumer perception due to a change in the service excellence of the catalog.  

No

 

H6

There is a significant change in consumer purchase behavior due to a change in consumer perception of the catalog.  

Yes

  1. CONCLUSIONS

This research investigates the hypothesis that consumers’ mental processes are significantly altered by catalogs. When a consumer experiences a product through a catalog, they form perceptions about the product based on three factors: the economic factor, the visual appeal, and the enjoyment factor. The consumer is motivated to make a purchase after perceiving the various elements contained within catalogs. Consumers place a greater emphasis on the pricing or cost factor, as well as the effectiveness of its usage. They place less of an emphasis on the aesthetic appeal of the product, the services it provides, or any entertaining features it may have. It demonstrates that the majority of a buyer’s purchases are motivated by a need and that the search scenario in a catalog is driven both by an economic factor and by the useful features of the product. From the perspective of the marketer, they need to concentrate on the Paid benefits and provide more features that are proportional to the cost. Consumers place a lower priority on visual appeal, follow-up services, and entertainment attractions when they are shopping for what they require, and as a result, they are constantly looking for the best available alternatives in the market to satisfy their requirements. The catalog is a direct marketing tool, and it always floats toward the target audience. Therefore marketers should build a catalog according to customers’ demands.

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Publication History

Published: March 01, 2023

Identification

D-0038

Citation

Yuning Zhang, Wang Hexian, and Zhubai Li, (2023). Impact of economic factors on consumer perception: a partial least square approach on the consumer buying behaviors. Dinkum Journal of Economics and Managerial Innovations, 2(03): 151-162.

Copyright

© 2023 DJEMI. All rights reserved