Why do consumers purchase goods and services in the informal economy?

To evaluate critically the dominant discourse that consumers acquiring goods and services in the informal economy are rational economic actors seeking a lower price, the results of a 2007 Eurobarometer survey involving 26,659 face-to-face interviews in 27 European Union member states form the basis for analysis. The finding is that achieving a lower price is the sole motive for just 44% of informal economy purchases, one of several rationales in 28% of transactions, and not a rationale in 28% of acquisitions. Consumers also use the informal economy to circumvent the shortcomings of the formal economy in terms of the availability, speed, and quality of goods and services provision, as well as for social and redistributive reasons, with multilevel mixed-effects logit regression analysis revealing how the prevalence of these rationales significantly varies across populations. The paper concludes by discussing the theoretical and policy implications of the findings.     

The effectiveness of coupons on the restaurant consumers’ purchase decision

Coupons have been used as promotional and marketing campaigns with the key objective of boosting sales through new customers or bringing back existing ones (Venkatesan & Farris, 2012). Coupons are distributed to consumers through digital formats, smartphone applications, and print formats (Restaurant Business, 2015). The focus of this research is to examine the effectiveness of coupons as a marketing contrivance on the restaurant consumers’ purchase decision including the most efficient mode of transfer. A cross-sectional survey⁴ was used and collected from 247 participants. Frequency distributions, cross-tabulation, chi-square, and independent sample t-tests were used to assess consumer motivations, behaviors, and attitudes toward coupons.     

What influences consumers’ intention to purchase organic personal care products? The role of social reassurance

Green and organic markets have grown rapidly in recent times, thanks to the increasing global popularity of having a healthier lifestyle. Rising consumer awareness of the risks of synthetic chemicals for humans as well as the environment have boosted the demand for organic personal care products (PCPs). To better understand the micro-mechanisms guiding the organic PCPs buying process, this study builds on the social proof theory by examining the drivers leading this process in two different national contexts. Partial least squares structural equation modelling was used to conduct a multigroup analysis on a sample of 473 consumers (n = 266 from Spain, n = 207 from Italy). Findings reveal the significant role of environmental value, product knowledge, convenience & quality, and information adoption. Furthermore, the study introduces and validates the new construct ‘social reassurance’ explaining the psychological mechanisms leading the organic PCPs buying process.     

Are nutrition labels useful for the purchase of a familiar food? Evidence from Chinese consumers�� purchase of rice

Nutrition labeling has been accepted by Chinese consumers as an information source to learn about food quality and safety. This paper uses Chinese consumers’ rice purchase as an example to study how consumers use food nutrition labels to make purchase decision of a familiar food product. The goal is to understand how consumers seek information from the labels to make purchase when extensive experience with the food has been developed. Survey data from 400 random respondents in Beijing were analyzed using an empirical framework and a Mont Carlo integral econometrics model. We find that more than 50% of the consumers in Beijing have heard of food nutrition labels in general, 36.50% carefully use label information even if they are familiar with the food, and nearly 70% consider mandatory food nutrition labels as beneficial. Those who are more knowledgeable about rice nutrition labels are more likely to use the labels when purchasing rice, no matter how familiar they are with the product. Frequent users of nutrition labels are more likely to consider food mandatory nutrition labels as beneficial. This study suggests that consumers still use the label information to reassure the quality and safety of food despite a history of consumption.     

How does face influence the purchase of imitative new products? Moderating roles of product design characteristics

Face plays a profound role in consumption, but the question of how it impacts the purchase of imitative new products remains unanswered in the current literature. Imitative new products, which are legitimate innovations bearing similarities to existing products, are prevalent in many markets. This study investigates how two dimensions of face consciousness—the desire to gain face and the fear of losing face—influence consumers' purchase intentions regarding imitative new products by considering three product design characteristics (new product imitation locus, new product imitation scope, and product hedonism) as boundary conditions. We find through experiments carried out with adult Chinese consumers that the desire to gain face strengthens, but the fear of losing face weakens purchase intention. Moreover, the positive effects of the desire to gain face are weakened by imitation locus (form vs. function imitation) but enhanced by imitation scope (either form or function imitation vs. both form and function imitation); whereas the negative effects of the fear of losing face are strengthened by imitation locus but weakened by imitation scope. Product hedonism enhances the positive effects of the desire to gain face and augments the negative effects of the fear of losing face. This study thus contributes to the face literature by differentiating the roles of two dimensions of face consciousness in affecting consumption of imitative new products. In addition, this study contributes two important constructs—new product imitation locus and new product imitation scope—to the literature on imitative new products.     

Why do consumers purchase biodegradable plastic? The impact of hedonics and environmental motivations on switching intention from synthetic to biodegradable plastic among the young consumers

Human concern for the environment has grown in tandem with recent economic development, particularly in emerging nations. This paradigm change has led Malaysians to pay more attention to synthetic plastics challenges, particularly in Malaysia. This study aims to determine the attitudes of young Malaysian consumers on the usage of biodegradable plastics to minimize the use of synthetic plastic in the country. Generally, two motivations—hedonic and environmental motivations toward switching intention from synthetic to biodegradable plastic among the young consumers were examined in the study. Environmental motivations (environmental concern, environmental knowledge), as well as hedonic motivations (adventurous spirit, novelty-seeking), are used in this study to broaden the theory of consumption value (TCV) into four additional factors that may positively impact the young consumer's attitude and increase switching intention towards biodegradable plastics. The data was collected utilizing an online survey approach and a standardized questionnaire. The data of 386 young Malaysian customers were analyzed using structural equation modelling (SEM) using SmartPLS 3. The study's significant findings indicated that hedonic motivations, environmental motivations, and attitudes all impact switching intentions toward biodegradable plastics. This study also found that attitude is a mediator between hedonic and environmental motivations regarding switching intentions. These findings might aid the government in developing a new policy that encourages residents to adopt biodegradable plastics while also lowering pollution.     

What drives consumers to customize products? The mediating role of brand experience

Brands are increasingly seeking ways to engage consumers in deep and meaningful brand experiences. As technological advances have developed, brands have an increasing arsenal to draw on in creating brand experience. One increasingly common tactic is product customization, whereby consumers are provided the ability to create their own products from a set of options. With this study, we seek to understand the mediating role of brand experience in consumer decisions to customize products. Specifically, we investigate the interplay of non-brand drivers (those intrinsic to the consumer) and brand drivers (those extrinsic to the consumer) in the context of customization. In doing so, we develop an understanding of consumers' intention to use a customization toolkit and their subsequent intention to purchase customized products. We find brand experience drives intention to use a customization toolkit, mediating the relationship between individual factors and usage intentions. A customer's prior experience and their intention to use a customization toolkit are also direct drivers of customized product purchase intention.     

When does an ethical attribute matter for product evaluation? The role of warm-glow feelings for low-rated products

Research on the effects of ethical attributes has recently gained traction. However, limited research has addressed consumer response to ethical attributes in the current context where product ratings have become of primary importance to make decisions. Specifically, this study examines the relative effect of ethical attributes on product evaluations across different product ratings. Building on cue consistency theory and the negativity bias, we suggest that ethical attributes gain weight when consumers evaluate a low-rated product. This process leads consumers to anticipate more warm-glow feelings, generating better evaluations for such low-rated products featuring an ethical attribute (vs. another type of attribute). Two experiments provide consistent empirical support for this prediction, and demonstrate that, compared to other attributes or no attribute, an ethical attribute increases product evaluations to a larger extent when the product received low (vs. higher) ratings. We show that this effect occurs because of warm-glow feelings: when product ratings are low, consumers anticipate more warm-glow feelings from purchasing a product with an ethical attribute (vs. another type of attribute), leading to better product evaluations. These findings have direct managerial and ethical implications for practitioners.     

The examination of the relationship between experiential value and price fairness in consumers’ dining experience

Consumers enjoy sharing meaningful consumption experiences with others. The purpose of this study is to better understand this behavior by identifying the specific aspects of experiential value that motivate word of mouth behavior. To these ends, this study tests a model that proposes relationships among four types of experiential value (aesthetics, escapism, service excellence, and efficiency), satisfaction, price fairness, and word of mouth. The results indicate that, among the four types of experiential value, service excellence and efficiency are the most important determinants of post-consumption word of mouth. Accordingly, this research contributes a better understanding of experiential value and its effects on motivating favorable post consumption word of mouth promotion. Managerial implications providing a holistic perspective of consumer cognition, emotion, and motivation are provided.     

How does the theory of consumption values contribute to place identity and sustainable consumption?

The importance of consumers’ role in sustainable consumption is reflected in the vision of the Sustainable Development Education Panel: To educate consumers to make informed consumption decisions, to take responsibility for their actions and to realize the impact of consumption decisions on future generations. However, educating and informing consumers alone is unlikely to change deeply entrenched unsustainable consumption behaviour. A multi‐faceted approach is required – enforcing sustainable development initiatives through legislation, promoting corporate social responsibility programs on the part of business, and (most importantly), supporting communities that engage in sustainable consumption. This study examines the proposition that individuals who identify with their community (i.e. the residential suburb or a locality where identity is understood geographically) are more likely to engage in sustainable consumption. Specifically, it examines how consumption value (i.e. the perceived value of living in a particular residential suburb) contributes to place identity and to environmental attitudes and sustainable consumption behaviour. Structural equation modelling is used to verify the conceptual model using data from a telephone survey of 561 residents from two inner city suburbs in Auckland, New Zealand. The results support the proposition that environmental attitude and sustainable consumption behaviour is enhanced by consumption values through place identity. Residents who enjoy living in their community, value a clean and healthy environment and believe their suburbs are unique tend to develop a stronger identity with their residential suburb, and are more positive towards sustainable consumption. The results have important implications for social marketers, property marketers and city councils who strive to encourage sustainable consumption among its citizens.     

Social media or shopping websites? The influence of eWOM on consumers’ online purchase intentions

This study empirically tests and compares the influence of friends’ recommendations on social media and anonymous reviews on shopping websites in the context of online purchase intention. For this purpose, we analyse the impacts of these two platforms based on the components of information adoption model (IAM) which are borrowed as information quality, information credibility, information usefulness and information adoption. We conduct a survey and find anonymous reviews as more influential on consumer’ online purchase intentions than friends’ recommendations on social media. However, as this result was contrary to that expected, we conduct another study through in-depth interviews in order to enlighten our results found in the first study. In Study 2, we find the reasons why consumers prefer anonymous reviews rather than friends’ recommendations. Information quantity, information readiness, detailed information and dedicated information are factors which make shopping websites superior than social media in terms of the impact of electronic word of mouth (eWOM). Academic and managerial implications are discussed.     

What drives brand love and purchase intentions toward the local food distribution system? A study of social media-based REKO (fair consumption) groups

Local food is gaining increasing popularity among consumers due to its association with sustainable consumption. However, for a product to be commercially successful, such growing popularity should translate into high purchase intentions and positive associations with the product post-consumption. Although this success has not yet been reflected for local food consumption, research in this area has remained limited. The present study addresses this gap by examining the antecedents of brand love for both the local food distribution system and the local food it distributes. The study thus employs the stimuli-organism-response (SOR) theory, which indicates that certain environmental stimuli influence the consumers' internal state or organism and shapes their behavior, in turn. Specifically, this study uses altruism as the stimulus, supporting local producers, transparency, satisfaction with labeling, and desire for labeling as the consumers’ internal state (organism), and purchase intentions and brand love as the response. Cross-sectional data were collected from 2045 local food consumers associated with Facebook-based REKO (fair consumption) groups in Finland. Findings indicate that altruism is associated with internal state, i.e., desire for labeling, supporting local producers, and satisfaction with labeling. These variables, in turn, are associated with brand love for the local food distribution system. Furthermore, purchase intentions positively mediate the association of the four internal states with brand love.     

1 + 1 does not always equal value creation: The case of YouTube

Early services literature and the original service-dominant logic (SDL) work of Vargo and Lush (Journal of Marketing 68(1):1–17, 2004a) have suggested a dyadic customer and company relationship in the value creation process. While extant literature increasingly acknowledges more complex relationships between provider and customer networks to create value, we show that widely used e-services such as YouTube are based on relationships in which such provider and customer roles can vary significantly. However, we also assert that in the case of e-services, value is created primarily between and among customers rather than by the provider, as had been the case in earlier goods-dominant logic literature. Reflecting the research context, this paper seeks to extend various SDL foundational premises to the experience of e-services, discussing their generalizability and concluding with recommendations for further research.     

Why does the effect of new business formation differ across regions?

We investigate regional differences in the effect of new business formation on employment growth in West Germany. We find an inverse U-shaped relationship between the level of start-up activity and employment change. The main variables that shape the employment effects of new businesses in a region are population density, the share of medium-skilled workers, the amount of innovation activities as measured by the proportion of research and development (R&D) employees, and an entrepreneurial character of the regional technological regime. In contrast, a high share of small-business employment has a negative influence on the employment effect of start-ups. Other indicators for education, innovation activity, and labor productivity do not prove to be statistically significant.     

Can conscious consumption be learned? The role of Hungarian consumer protection education in becoming conscious consumers

The purpose of this research is to examine how consumer consciousness can be defined, along what dimensions it might be measured and, according to these dimensions, how conscious Hungarian university students are. In addition, it is also discussed how their consumer protection education might contribute to their consumer consciousness. Two hypotheses have been proposed concerning factors potentially affecting conscious consumer behaviour (gender; participation in consumer protection education). To test these hypotheses, a questionnaire survey has been conducted with a total of 280 respondents, whom are undergraduate students of a Hungarian university. It is found that different aspects of consciousness dominate the consumer decisions of females and males. Female respondents appear to be characterized more by hedonistic consumption but they are more price sensitive than males. Veblen effect is stronger for males, and they have greater trust in well‐known brands. Although the survey revealed that both research variables might affect consumer behaviour (not only gender but the participation in consumer protection education as well), the role of education cannot be unambiguously identified in the process of establishing consumer consciousness. On the one hand, the results show that the behaviour of ‘trained’ consumers is mainly characterized by price sensitiveness, while the other (‘non‐educated’) group is more reliant on marketing and brands. However, on the other hand, it might also be concluded that young adults participating in the survey already have their own consumer habits and preferences; therefore, their consumer behaviour is more difficult to be formed by means of education during their university years. These findings are nevertheless limited to Hungarian university students and cannot be generalized to the entire society or other countries.     

Does impact of campaign and consumer guilt help in exploring the role of national identity and purchase decisions of consumers?

Extant research emphasized the role of consumer guilt and the importance of campaigns in consumers' willingness to buy domestic-made products. The antecedents of willingness to buy domestic-made products have not been well understood in literature. This is because the experience of national identity vis a vis the understanding of the consumers' guilt feeling has partly been explained. To address these concerns, we developed a survey in the context of Indian cities. We note that consumers' experience with foreign-made products is negative when they feel uncomfortable buying them, and thereby develop a feeling of guilt. Marketing managers are more likely to prepare consumers' experiences with their products by emphasizing the high or low impact of the campaign on consumers’ willingness to buy domestic-made products.     

Does aid for trade diversify the export structure of recipient countries?

The importance of aid for trade as a tool for facilitating trade, economic growth and social development has received attention since the concept was introduced in 2005. While one of the main targets of aid for trade is export diversification, reflecting the fact that the exports of many developing countries are concentrated in a small range of items, there have not been many efforts to measure the effect of aid for trade on export structure. This study, therefore, attempts to trace the relationship between aid for trade and 133 aid recipients' export structure between 1996 and 2013. Using the Herfindahl–Hirschman Index to measure the degree of export concentration, the findings suggest that total aid for trade has reduced the concentration level in the short run. In the long run, on the other hand, aid for trade has had no significant effect on export structure of recipient countries. Only aid for building productive capacity, which is one of the three categories of aid for trade, contributes to lower concentration. Yet, this change is not caused by an increase in export diversity but by the redistribution of shares of existing products of a similar sophistication level.     

Flag backlash: Why does the presence of the American flag reduce product evaluation?

The American flag is often incorporated into product branding. However, little research has investigated how the use of American flag imagery as a marketing tool for products influences consumer behavior. The present research examines (1) whether the presence of the American flag on a product affects consumers’ evaluation of products and (2) the social cognitive mechanisms underlying the effect of the flag on product‐related judgments. This research provides evidence that the presence of the American flag on a product induces negative product evaluation (Study 1). This negative effect is found to be moderated by participants’ trait level of psychological reactance (Study 2) and mediated by participants’ outrage (Study 3a) and perceived persuasion (Study 3b). When the American flag's link with the product is broken, its negative impact on product evaluation disappears (Study 4).     

The potential of African trade integration – Panel data evidence for the COMESA-EAC-SADC Tripartite

ABSTRACT

The COMESA-EAC-SADC Tripartite FTA, formed in 2011, is supposed to be a milestone towards Africa's continental trade integration. This study analyzes the impact of regional integration among the Tripartite countries on their bilateral imports before that date to evaluate the latest integration efforts. We estimate an extended gravity model on a large panel of 51 African countries using yearly observations from 1995 to 2010. We proxy existing formal trade barriers by sample average tariff data on imports from the world as well as indicator variables for the membership in regional FTAs. We consider different estimation techniques and discuss distinct sets of fixed effects. The PPML regression results indicate that remaining tariffs are significantly negatively correlated with imports throughout the preferred multiplicative models. An FTA status does not show a clear-cut import enhancing effect. In the specifications that control for country-year effects, the EAC coefficient is positively correlated with imports, and the COMESA and SADC FTA membership show a positive relation to imports within some reduced-sample robustness checks.