An Empirical Study on the Factors Influencing the Buying Behavior of the Consumers: LCD Televisions

Sunil Bhardwaj* and Indrani Palaparthy**

The Indian market for entertainment devices like television has been expanding in the last two decades. Several players are introducing not only several features to the existing products but also new products like LCD (Liquid Crystal Display) TV and Plasma TV to capture various segments of the market. Consumers now have a wide choice for the selection of televisions. The present study is an empirical research done on factors influencing the buying behavior of the customers of LCD Televisions of a selected brand. A random sample was selected from the companys database and techniques like exploratory factor analysis and logistic regression are used to analyze the data. The main findings reveal that physical features, operational features, promotional features and word of mouth are the main factors which tend to influence the buying decision in a positive mannerto increase the sales of the product, whereas the price and brand name have a negative influence on the behavior.

Introduction
In the current business scenario, organizations are facing heavy competition in attracting and retaining customers. Major factors like brand name, physical appearance, price, promotional aspects, after sales service, availability and offers/gifts are playing a very important role on the buying behavior of the customers. Keeping different buying situations of the customers like minor/major new purchases and re-purchases in mind, the organizations need to adopt different marketing strategies. Different internal influences, such as the information known to the customer about the product, attitude of the customer, and different external influences like culture, social class, family, and reference groups also affect the consumers buying behavior. Customers are also becoming more critical and feel less attached to brands. Whilst the current economic tide is urging the customers to buy less expensive products and brands, a gap has been created between the supplier and the consumer which are needed to be fulfilled by a better service and ability to respond quickly to the requirements (Nowlis, 2000). With promotions and new product introductions, the industry needs to understand the consumer and the organizational buying behavior better than ever before (Dibb and Simkin, 1993). In this current scenario, companies are required to change their approach and implement new procedures quicker than the speed at which they are actually managing (Clemons, 1999). The Indian market is deluged with new products like LCD (Liquid Crystal Display) and Plasma TV especially at the start of the decade. However, the acceptability and
* Assistant Professor, The Icfai Business School, Hyderabad, India. E-mail: sunilbhj@yahoo.com * * Senior Lecturer, The Icfai Business School, Bangalore, India. E-mail: ipalaparthy@gmail.com 72 2008 The Icfai University Press. All Rights Reserved. The Icfai University Journal of Brand Management, Vol. V No. 3, 2008 ,

popularity of LCD TV in the Indian households is still not catching up as it has been there with the traditional TV sets. The study undertaken is an attempt to elicit insights into the phenomenon. It is believed that the findings will be useful for the corporate who are trying to make a place in the market and also equally useful for the academicians as it tends to enrich the knowledge of the consumer behavior towards relatively new products like LCD TV.

Literature Review
New Technology-Oriented Products: Corporate and Consumers In todays fast paced competitive markets, corporate identity requires moving beyond the traditional marketing mixs four Ps, especially in case of new technology products. Balmer (1998) and Kapferer (1997) described a brand-based view of uniqueness, which was built upon by Chernatony (1999) in relation to corporate brands. Authors like Simkin (2000) feel that in most of the traditional and established marketing departments, the sales-oriented customs are so ingrained that companies have not provided a basis for suitable operational controls to ensure the successful implementation of marketing activity concerning the new products which are heavily based on technology. According to Doyle (1998), for many products involving new technology, the required unique positioning concept and associated marketing communication campaigns are lacking substance, longevity and the sheer emotion of consumer brand building activity. In the case of new technology-oriented products, researchers like Verkasalo (2006) feel that studies should go a step beyond to analyze the interactions between applications of new technology products among certain user segments. Studies should capture consumer usage awareness, usability bottlenecks, feelings and sensitivity, experiences and other issues which directly relate to the immediate usage of a new product or a new service. There exists a gap when it comes to consumer buying behavior and a new technology oriented product.
An insight into the buying process of a product can yield a better understanding of the new technology product sales. Several authors (Thackston, 2003; and Berkowitz et al., 2000) have identified different stages in the consumer buying process which can be summarized as: Need/Desire to be recognized; Search for information about the products which can fulfill the need; Evaluating the set of options available in the market; Deciding to purchase a product; and Evaluating their decision after purchase The corporate sector has been trying to influence the process in order to increase the probability of selling their products through several strategies. According to Engel et al. (1990), demographic variables have significant importance in targeting and personalizing the products and offerings for consumers and can have a significant effect on the final
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decision of the purchase. Raman (2003) found that higher income consumers are more time-constrained and less price-sensitive than the lower income consumers. Payne (1982) established a cost/benefit framework which underlines the fact that consumers make decisions after they weigh the effort (cost) and accuracy (benefit) of the decision rule.

The Liquid Crystal Display (LCD) Technology and TV

The Liquid Crystal Display (LCD) is a form of display technology more common in digital watches and portable computers. The technology uses two sheets of polarizing material filled with a solution between them known as liquid crystal solution. Passing of electric current results in different alignment patterns which create an illusion of the image seen on the screen. The technology took shape in the mid-1960s in research labs but was not available for commercial usage till the last three decades (Heilmeier and Zanoni, 1968). Now-a-days Thin Film Transistor Liquid Crystal Display (TFT LCD), which has sandwich-like structure with liquid crystal filled between two glass plates, is used. The plates are made of color filter glass, which generates specific colors according to the flow and voltage of electric current. The resulting image is generally of a good quality when compared to the traditional televisions which have a Cathode Ray Tube (CRT) technology (Stephan and Kamineni, 1999). A series of articles and texts available in the manuals of LCD TV state that the major advantages of the technology are sharper picture quality, less power consumption, space saving capability and lifetime service without maintenance. The TV can be hung on a wall as it has a flat and thin rectangular shape just like any other decorative wall hanging. Another advantage is less radiation emission and weaker generation of electro-magnetic fields which result in less eye discomfort and fatigue (Lenovo, 2007). One disadvantage that can be attributed to the technology is that it limits the angle of viewing. If watched from sideways the picture tends to get blurred unlike the traditional TV. Another disadvantage is a longer response time compared to the plasma and CRT counterparts, which leads to the doubling of images or ghosting when images change rapidly. In India, LCD TV has shown its presence and LG, Samsung, Sony and Onida are some of the available brands.

Parameter Influencing Buying Behavior

It is generally believed that a complex set of parameters involving cultural, personal, socio-economic and psychological factors influence the buying behavior of the customers (Britanica Online, 2007). Several researchers (Dash et al., 1976; Lumpkin et al., 1985; Bell et al., 1998; and Tang et al., 2001) have established the importance of perceived quality, price-consciousness, pre-purchase information, perceived utility, positioning and advertisement in influencing the buying behavior of the consumers. In a report on the buying behavior by Unit Marketing Inc. (2007), stress is laid on the role of demographic and psychographic parameters in influencing the consumer buying behavior. McGoldrich and Douglas (1983), Nilsson and Hst (1987), and Sheth (1981) have done substantial work in studying the factors that influence the retail buying
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behavior. Hansen (2000) found that well-known foreign brands, country-of-origin, broad product range, competitive prices, terms of payment, marketing promotion and financial support are the significant factors influencing buying behavior. Also various studies observe that quality, shape, size, color, price and convenience are the factors that influence the customer buying behavior. Numerous studies have suggested various parameters which can influence the consumer buying behavior while going for electronic items. In a study done by Foret (2006) on the consumer buying behavior with regard to electronic items, it was found that price, product parameters, quality, curiosity and an effort to try an innovation, package, advertisement, brand and recommendation of other people are significant factors that affect the buying process. Engel et al. (1990), Raman (2003) and Payne (1982) have also established the effect of demographic and income related factors on the buying of electronic goods. Verkasalo (2006) has stressed the importance of awareness, experience and feeling while studying the buying behavior of high-tech electronic goods.

Methodology
Based on the literature survey and discussions with the industry experts, a list of parameters was prepared and used for the study. The initial list had 29 variables, but they were later brought down to 20, as some of the variables were confusing for the respondents during the pilot test. The variables which were finally selected were: brand name, size of the TV screen, shape of the TV, technology involved, promotional offers, ads by the company, sales personnel behavior, after sales services, guarantees/warrantees offered, power consumption, aesthetic appeal, comfort in watching, family influence, peer group influence, price, convenience in handling, picture quality, supporting features, accessories and compatibility with other gadgets. A questionnaire carrying statements based on the above constructs was prepared. The first part of the questionnaire elicits general information of the respondents, their current type of TV and probability of buying an LCD TV in the near future (if they dont possess one). Perceptions of respondents about the purchase of LCD TV were measured in the second part of the questionnaire on a five-point likert scale with one as strongly disagree and five as strongly agree. The data was collected from a group of about 250 customers of a leading TV brand in India. Mail survey covered the major portion. A small group of respondents were visited personally. In the end a total of 103 responses were used for analysis.

Data Analysis
Exploratory Factor Analysis
Exploratory factor analysis was performed to reduce the number of variables and to avoid multi-collinearity. The value of Kaiser-Meyer-Olkin (KMO) came out to be 0.76 which means that the factor analysis would yield reduced number of factors. Principal components method with a varimax rotation of the 20 variables revealed six underlying factors with
An Empirical Study on the Factors Influencing the Buying Behavior of the Consumers: LCD Televisions 75

Eigen value of greater than one. These six factors explained 83% of the variability in the 20 variables. Table 1 presents the rotated component matrix with factor loadings. From Table 1, it is clear that Factor 1 loads with the variablesconvenience, size, comfort in watching, picture quality, aesthetic appeal and shape. Since these variables are related to the physical aspects of the product, it is labeled as Physical features. Factor 2 loads with variablessupporting features, compatibility with other gadgets, and accessories and power consumption. Since these variables tend to cover operational characteristics of the product, they are labeled as Operational features. Factor 3 loads highly with variablespromotional offers, after sales service, advertisements, salesman behavior and warrantees offered. This variable is labeled as Promotional features. Factor 4 loads with family and peer group influence and is termed as Word of mouth. Factor 5 loads with Brand and Factor 6 loads with Price.
Table 1: Rotated Component Matrix with Factor Loadings
Variables 1 Convenience Size Comfort in Watching Picture Quality Asthetic Appeal Shape Supporting Features Compatibility with other Gadgets Assessories Power Consumption Brand Promotional Offers After sales Service Advertizements Sales Man Behavior Warrantees Offered Price Family Influence Friends Influence 0.962 0.960 0.943 0.921 0.885 0.846 0.080 0.038 0.042 0.008 0.158 0.368 0.025 0.058 0.232 0.270 0.013 0.013 2 0.048 0.031 0.071 0.035 0.037 0.077 0.922 0.864 0.860 0.772 0.405 0.205 0.101 0.327 0.165 0.282 0.059 0.013 0.013 3 0.148 0.177 0.183 0.184 0.184 0.128 0.124 0.189 0.188 0.111 0.421 0.828 0.769 0.720 0.715 0.555 0.270 0.015 0.015 Factors 4 0.012 0.020 0.038 0.051 0.045 0.010 0.004 0.099 0.033 0.111 0.018 0.030 0.062 0.720 0.715 0.555 0.301 0.998 0.998 5 0.012 0.020 0.038 0.051 0.045 0.184 0.184 0.128 0.124 0.189 0.780 0.300 0.300 0.015 0.064 0.047 0.055 0.118 0.128 6 0.012 0.020 0.038 0.051 0.045 0.184 0.184 0.128 0.124 0.189 0.780 0.300 0.300 0.015 0.780 0.300 0.880 0.015 0.180

A confirmatory factor analysis was performed on the data to analyze the constructs validity on the units remaining after discarding the items disturbing the homogeneity
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of the set. The confirmatory factor analysis indicated that the factors generally satisfied the validity of the evaluation standards. Later on, the decision to buy an LCD TV was taken as a dependent variable with two possible outcomes (No or Yes). The factor scores of the six factors were taken as independent variables and the results of discriminant analysis are discussed below.

Discriminant Analysis Discriminant analysis is used to model the different effects of the above factors on the final buying decision of an LCD TV. Factor scores were used as independent variables, and the dependent variable was the response to the question regarding decision in the first part of questionnaire. The following equation can be made for the given context. The wilks has a value of 0.21 suggesting the appropriateness of the following model.
Buying Decision = 54.8 + 24.17 (Physical features) + 57.82 (Operational features) + 70.266 (Promotional features) + 71.22 (Word of mouth) 26.12 (Brand) 94.12 (Price)

Conclusion
It is clear from the model that physical features, operational features, promotional features and word of mouth are the main factors which tend to influence the buying decision in a positive mannerto increase the sales of the product. Physical features and aesthetics have become the main influencing factors along with the quality and quantity of the operational features available. The physical features have become very important as modern consumers feel that a good product, in addition to fulfilling their needs should also look good so that it can be displayed in their homes, work places and organizations, as part of the decor. The consumers are also more concerned about the quality and number of the operational features. They are not satisfied with the minimum required number of features, but start comparing with the other competitors and immediately switch to other brands if they come up with new/extra features. The quality of components and sub-components used in the product has a great impact on the quality of the operational features. Interviews with selected dealers revealed that the quality of sub-components imported by the company are not of outstanding quality and this may be the cause for quality related issues, thereby leading to improper brand image. Promotional offers also have great positive impact on the consumer buying behavior. It is observed that promotional offers offered during festival times and on other occasions have drastically increased the sales. However, two variables brand names and prices, act as deterrents to the positive buying decision. The fact was validated by reinterviewing some of the respondents, and it was found that the respondents not opting for LCD TV consider its price to be too high. Similarly, further insights reveal that a particular company does not have a good
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brand image in LCD TV segment due to a history of maintenance problems. It is advisable to offer some price discounts and certain steps to boost the brand image. By doing so, the company may see a surge in the sales of LCD TV.

Limitations
The data was collected from two major Indian cities, Delhi and Hyderabad. For deeper insights, data can be collected from a large number of cities. Since only one company was considered, the model has a low generalizibility and cannot be used to make comments on LCD TV market on an overall basis. The analysis did not take into consideration the influences of gender, age, local culture and peoples tastes; excluding these factors might have had some effect on the overall results of the study.

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Appendix
Total Variance Explained
Initial Eigenvalues Component Total 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 6.394 3.676 2.033 1.983 1.231 1.012 0.720 0.592 0.436 0.349 0.322 0.240 0.221 0.140 0.104 0.032 0.027 0.006 4.92E-016 % of Variance 33.653 19.345 10.699 10.435 4.942 4.140 3.790 3.117 2.296 1.837 1.695 1.261 1.162 0.738 0.548 0.167 0.142 0.033 2.59E-015 Cumulative % 33.653 52.997 63.697 74.131 79.073 83.213 87.003 90.120 92.416 94.253 95.948 97.209 98.371 99.110 99.658 99.825 99.967 100.000 100.000 Extraction Sums of Squared Loading Total 6.394 3.676 2.033 1.983 1.231 1.012 % of Variance 33.653 19.345 10.699 10.435 5.143 3.143 Cumulative % 33.653 52.997 63.697 74.131 79.073 83.213

Note: Extraction Method: Principal Component Analysis.

Reference # 25J-2008-09-04-01
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