Market Segmentation by Exploring Buyer Lifestyle Dimensions and Ethnocentrism Among Vietnamese Consumers: An Empirical Study

ABSTRACT

Studying consumer lifestyles and ethnocentrism is a unique way of finding out buyer behavior and market segmentation. This paper identifies consumer market segments existing among Vietnamese consumers by using lifestyle patterns and ethnocentrism. Data for the study was collected through personal interviews in two main cities in Vietnam, Ho-Chi Min City and Hanoi, which attract growing urban industrialization and population migration rapidly degrading places. Survey findings indicated that ten lifestyle dimensions among the Vietnamese consumers had an influence on their ethnocentric tendencies and buying behavior. The findings provide some implications to marketers who currently operate in or are planning to enter into the Vietnamese market in the near future.     

Television ad-skipping,consumption complementarities and the consumer demand for advertising

Endogenous consumption of advertising is common. Consumers choose to change channels to avoid TV ads, click away from paid online video ads, or discard direct mail without reading advertised details. As technological advances give firms improved abilities to target individual consumers through various media, it is becoming increasingly important for models to reflect the endogenous nature of ad consumption and to consider the implications that ad choice has for firms’ targeting strategies. With this motivation, we develop an empirical model of consumer demand for advertising in which demand for ads is jointly determined with demand for the advertised products. Building on Becker and Murphy (The Quarterly Journal of Economics, 108(4), 941–964 1993)’s ideas, the model treats advertising as a good over which consumers have utility and obtains demands as the outcome of a joint utility maximization problem. Leveraging new data that links household-level TV ad-viewing with product purchases, we provide empirical evidence that is consistent with the model: ad-skipping is found to be lower when a household has purchased more of the advertised brand, and purchases are higher when more ads have been watched recently, suggesting that advertising and product consumption are jointly determined. Fitting a structural model of joint demand to the data, we evaluate consumer welfare and advertiser profitability in advertising targeting counterfactuals motivated by an “addressable” future of TV. We find that targeting on the predicted ad-skip probability is an attractive strategy, as it indirectly selects consumers that value the product. Reflecting the positive view of advertising in the model, we also find that net consumer welfare may increase in several targeting scenarios. This occurs because under improved targeting, firms shift advertising to those who are likely to value it. At the same time, consumers that do not value the ads end up skipping them, mitigating possible welfare losses. Both forces are relevant to assessing advertising effects in a world with improved targeting and ad-skipping technology.     

Vulnerable consumer engagement: How corporate social media can facilitate the replenishment of depleted resources

Technology may facilitate health and wellbeing consumer engagement. When there is scant public health provision and socio-cultural norms marginalize consumers stigmatized from cancer, we reveal how a brand’s corporate social media campaign can support vulnerable consumers with resource constraints. Drawing from a transformative consumer research lens, we investigate five years of computer-mediated communications facilitated by the Indian brand Dabur Vatika. Through a grounded theory and an abductive reasoning approach, we unveil how vulnerable consumers directly or indirectly affected by cancer leverage brand's social media to replenish resources. First, we identify how vulnerable consumers engage to replenish depleted emotional and social support resources. We further expand consumer engagement scholarship by offering a preliminary definition of “vulnerable consumer engagement”. Second, we provide a nascent classification of vulnerable consumers in a consumer-producer role, Principal Vulnerable Consumers and Associate Vulnerable Consumers, distinguished by their proximity to the vulnerable context. Lastly, we reveal how brands may perform a transformative role, to replenish social, emotional and operant resources at the micro level through the engagement of vulnerable consumers with corporate social media. This insight is informative for policymakers, advertising practitioners and transformative consumer research academics.     

Consumer–retailer love and attachment: Antecedents and personality moderators

Because loyalty to services remains elusive and unpredictable, there is a need to study consumer relationships with firms apart from the established satisfaction–loyalty chain approach. To that end, the present paper investigates feelings of attachment and love through two empirical consumer studies of two different grocery retailer brands. The findings of the current study imply that retail store image, perceived transactional value, and corporate social responsibility (CSR) associations positively influence consumer–retailer love levels. Furthermore, we find that for consumers scoring low on the value of warm relationships with others and for consumers characterized by an avoidant attachment style, the effect of consumer–retailer love on re-patronage intentions is less salient. Interestingly, in the case of highly avoidant individuals, the effect of consumer–retailer love is negative. Managerial implications for building consumer-firm love in the context of grocery retail, as well as future research perspectives, are provided at the end of the paper.     

Accounting for heterogeneity and dynamics in the loyalty-price sensitivity relationship

Marketers have been interested in the relationship between brand loyalty and price sensitivity for many years and have examined whether loyalty reduces consumer price sensitivity. The results, to date, indicate that loyalty does indeed raise the price that consumers are willing to pay for a brand. Other than this broad finding, however, there has been little research in the literature regarding whether and how this relationship varies across consumers and product categories and, within consumers, over time. This is the issue that we investigate in this paper. Specifically, we examine whether the price sensitivity-loyalty relationship is heterogeneous and dynamic. We propose an approach wherein the price sensitivity parameter of a brand choice model is specified as a function of loyalty with three parameters. The first parameter of this function represents the maximum possible reduction in price sensitivity due to loyalty. The second parameter affects the type and shape of the relationship between price sensitivity and loyalty. In particular, depending on the value of this parameter, the relationship could be non-existent, follow a concave shape, indicating decreasing response to increases in loyalty, or be S-shaped to capture the case of increasing response initially followed by decreasing response subsequently. Finally, the third parameter captures the rate at which price sensitivity falls as loyalty increases.We use the proposed approach to investigate the relationship in four frequently purchased categories. In each category, we select a sample of households and calibrate the model on the choices of all the households in the sample. We next employ an Empirical Bayes approach to obtain household-level estimates of all the parameters. These parameters are then used to assign each household in each category to a no response or concave or S-shaped response groups. Within each of these three groups, we assign each household to one of four different response level and rate segments, that is, high response-high rate, high response-low rate, low response-high rate, and low response-low rate. Each of these segments differs in the response level, that is, the maximum reduction in price sensitivity as loyalty reaches a maximum—and the response rate, that is, how quickly price sensitivity falls with increases in loyalty.Following the assignment of each household to a segment in each category, we pool the households across all four categories and calibrate a membership function. This function explains households’ membership in different segments in terms of product category characteristics, household demographics, the household’s responses to price, display, and feature promotions and the evolution of loyalty of the household.Our findings suggest that the nature of the loyalty-price sensitivity relationship does vary across consumers as well as over time. Specifically, the concave response is more likely than the S-shaped response or the absence of a response. We find that the S-shaped response is not related to responsiveness to in-store promotions. It is, however, associated with a slower growth in loyalty to a brand as it is purchased. The concave response, on the other hand, is associated with responsiveness to feature promotions but is unrelated to how loyalty to brands evolves with their purchases.We also find that demographic characteristics are related to the behavior of the concave and S-shaped responses. Specifically, for the S-shaped response, household demographics are related to both the maximum level of the curve as well as its rate of growth. In particular, the curve grows faster with age and its maximum increases with the weekly working hours of the household. In the case of the concave response, high income and more working hours raise the maximum level that the curve achieves. Its rate of growth, however, is unaffected by demographics.We also provide several managerial implications for loyalty and promotional programs based on our findings. Specifically, our first finding—that the loyalty-price sensitivity relationship is dynamic—suggests that, rather than having promotional programs, where the value of the price promotion is fixed and some consumers are targeted with the promotion while others are not, managers should have an entire schedule of price promotions with each level of promotions targeting consumers at a different loyalty level.Our second finding that the nature of the loyalty-price sensitivity relationship is heterogeneous across consumers suggests that designing loyalty programs on the basis of crude classifications such as loyals and non-loyals is not appropriate. Instead, households that are identified as loyal, need to be further divided based on how the loyalty affects their price sensitivity. Promotional programs should then be based on the specific type of relationship that a household exhibits.The third finding that the reductions in price sensitivity to loyalty can exhibit an S-shaped or a concave pattern also has an interesting managerial implication. Specifically, given the differences between the two patterns in how long it might take a consumer to reach a point where s(he) is willing to purchase a brand due to loyalty rather than due to a price promotion, and hence be a profitable customer, it may be preferable for managers to invest more in consumers who exhibit a concave rather than an S-shaped response.Finally, our result that different categories may exhibit different patterns of the relationship between price sensitivity and loyalty implies that each category needs to be analyzed by itself for what the nature of the loyalty-price sensitivity relationship is likely to be so that the most appropriate program for that category can be developed.     

Consumer Preferences for Food Label Information: A Basis for Segmentation

Analysis of consumer reactions to food labeling alternatives using conjoint measurement raises questions concerning policy proposals to provide consumers with information. Conjoint measurement permits analysis of components of consumer perceptions without tedious data collection and analysis procedures. The study indicates that consumer preferences for information vary widely and an optimal policy should provide different labels for different market segments. Increasing the amount of information may reduce its effectiveness among the low income consumers it is intended to help.     

Beyond explicit measures in marketing research: Methods,theoretical models,and applications

Whereas traditional self-report procedures and methods mainly tap into consumers explicit attitudes, the implicit cognition paradigm provide researchers and marketing practitioners with a unique tool to uncover consumer implicit attitudes, choices, decisions, and action tendencies. By means of the sheer extent and validated models and empirical studies in cognitive psychology, the application of implicit measures and techniques in marketing and consumer studies is in its infancy; thus, this special issue focuses on theories, tools and approaches for examining consumers unconscious attitude and sustainable consumption patterns. The objective of this special issue is to illustrate theoretical and methodological application of implicit consumer cognition paradigm in marketing and consumer studies. This special issue of Journal of Retailing and Consumer Services highlights the implicit cognition approach as a greater alternative in measuring consumer attitude and tendencies where scientist and marketers are impotent to capture.     

Industry demand characteristics and the structure-performance relationship

Theoretical models of industrial profitability have included the price clasticity of demand among the structural elements that explain profitability. Empirical studies have accounted for variations in demand characteristics across industries by sample partition or use of broadly defined dummy variables.Variations in demand characteristics across industries can be modeled directly, by including among the variables that explain industrial profitability the share of industry sales going to different classes of consumers, for example, final consumer demand and different segments of the public sector.In empirical tests, inclusion of such demand share variables improves the explanatory power of the model, especially for consumer goods industries.     

When the purpose lies within: Maximizers and satisfaction with autotelic choices

Are maximizers less satisfied with their choices than satisficers? This research provides a novel perspective on this question by distinguishing between two types of consumer goals: autotelic, when choice is a goal in itself, and instrumental, when a choice is a means to achieving other goals. Study 1 showed that maximizers value autotelic experiences more than satisficers. Study 2 experimentally manipulated the choice goal and found that maximizers compared to satisficers experience higher choice satisfaction when the choice goal is autotelic rather than instrumental. Additionally, evidence is provided for the underlying mechanism (perceived ease of choice) as well as downstream consequences (consumers’ willingness to pay for their chosen option). These findings advance a conceptualization of maximizers as consumers seeking self-contained meaning in choice and provide new insights into the relation between maximizing and choice satisfaction. Theoretical and practical implications for consumer decision-making are discussed.     

Brands and religious labels: a spillover perspective

Abstract

With different religions mixing in many societies, religious consumer groups receive increasing attention as target segments. Trying to appeal to such religious segments, companies differentiate food products by adding religious labels (e.g. kosher or halal) to packaging. But while this makes the products more attractive to the consumers of the focal religion, adding a religious label may also impact the brand evaluation by consumers with no religious beliefs or a different religious orientation. Drawing upon social identity theory to explain the psychological basis of inter-group discrimination, and taking account of information integration theory to analyse how religious labels affect product and brand evaluations, this article aims to assess the spillover effects between religion and brand among consumers who are not part of the religious communities addressed by these labels. The findings indicate that the perception of religious labels on food packaging is influenced by the attitudes towards the religion and the brand, while the relative importance of both antecedents is dependent upon several consumer characteristics. The theoretical and managerial implications of our findings, the limitations of our work and directions for future research are discussed.     

The role of Swedish retailers in food innovations

Innovations should create value for increasingly individualistic consumers with varying demands and for other stakeholders. Today, retailers have the power in the supply/value chain. This research investigates how Swedish food retailers view innovations, their role and that of customers and suppliers in the development process and how they see future development. The study is based on open-ended interviews. The results show that Swedish retailers regard food product innovations as something to provide to consumers rather than achieve with consumers. Retailers want more collaboration with packaging suppliers to differentiate. Retailers are successful in establishing their own brands, in becoming brands themselves and in competing with producer brands. This follows the UK model and may result in fewer alternatives in stores and fewer product – or new technology-based innovations by Swedish producers. Service innovations can still occur for retailers to retain consumer loyalty. Consumers demand more than new products; they want to be excited by the shopping experience. More innovations will require deeper insight about consumers, efforts from the value chain and from outsiders. Collaboration is needed to establish trust among supply chain actors.     

Helping You to Waste Less? Consumer Acceptance of Food Marketing Offers Targeted to Food-Related Lifestyle Segments of Consumers

ABSTRACT

Consumer households and consumer behavior have been identified as the major cause of food waste in the supply chain. Food marketing might offer products and services that help consumers to reduce their food waste or reduce the consumer-related food waste at the consumer–retailer interface. However, such strategies require consumer acceptance and targeting the right customers. Through an online survey of 800 Danish consumers and a measure of food-related lifestyle, four clusters of consumer segments are identified. The segments are compared with regard to their acceptance of a number of actions consumers can take to reduce food waste or their acceptance of food marketing services they would need to pay for. Acceptance differs with food involvement and the role of the price criterion, as well as with gender, education and age. The findings show how food marketing can help consumers to reduce food waste, through actions targeted to specific segments of consumers characterized by food-related lifestyle differences.     

The impact of advertising on consumer price sensitivity in experience goods markets

In this paper we use Nielsen scanner panel data on four categories of consumer goods to examine how TV advertising and other marketing activities affect the demand curve facing a brand. Advertising can affect consumer demand in many different ways. Becker and Murphy (Quarterly Journal of Economics 108:941–964, 1993) have argued that the “presumptive case” should be that advertising works by raising marginal consumers’ willingness to pay for a brand. This has the effect of flattening the demand curve, thus increasing the equilibrium price elasticity of demand and the lowering the equilibrium price. Thus, “advertising is profitable not because it lowers the elasticity of demand for the advertised good, but because it raises the level of demand.” Our empirical results support this conjecture on how advertising shifts the demand curve for 17 of the 18 brands we examine. There have been many prior studies of how advertising affects two equilibrium quantities: the price elasticity of demand and/or the price level. Our work is differentiated from previous work primarily by our focus on how advertising shifts demand curves as a whole. As Becker and Murphy pointed out, a focus on equilibrium prices or elasticities alone can be quite misleading. Indeed, in many instances, the observation that advertising causes prices to fall and/or demand elasticities to increase, has misled authors into concluding that consumer “price sensitivity” must have increased, meaning the number of consumers’ willing to pay any particular price for a brand was reduced—perhaps because advertising makes consumers more aware of substitutes. But, in fact, a decrease in the equilibrium price is perfectly consistent with a scenario where advertising actually raises each individual consumer’s willingness to pay for a brand. Thus, we argue that to understand how advertising affects consumer price sensitivity one needs to estimate how it shifts the whole distribution of willingness to pay in the population. This means estimating how it shifts the shape of the demand curve as a whole, which in turn means estimating a complete demand system for all brands in a category—as we do here. We estimate demand systems for toothpaste, toothbrushes, detergent and ketchup. Across these categories, we find one important exception to conjecture that advertising should primarily increase the willingness to pay of marginal consumers. The exception is the case of Heinz ketchup. Heinz advertising has a greater positive effect on the WTP of infra-marginal consumers. This is not surprising, because Heinz advertising focuses on differentiating the brand on the “thickness” dimension. This is a horizontal dimension that may be highly valued by some consumers and not others. The consumers who most value this dimension have the highest WTP for Heinz, and, by focusing on this dimension; Heinz advertising raises the WTP of these infra-marginal consumers further. In such a case, advertising is profitable because it reduces the market share loss that the brand would suffer from any given price increase. In contrast, in the other categories we examine, advertising tends to focus more on vertical attributes.

A two-stage model for forecasting consumers’ intention to purchase with e-coupons

E-coupons (electronic coupons) have been a mainstay of online marketing to attract consumers and promote them to repeat purchase, distributing right e-coupons to right consumers is of critical importance. In big data era, analyzing consumers preferences for e-coupons by their online behavior and the impact of data imbalance caused by low active consumers are rarely studied. Thus, we propose a two-stage hybrid model. Firstly, consumer segmentation is implemented to analyze behavioral characteristics for each segment and distinguish low active consumers, then models are constructed for different consumer segments. The proposed model is applied to a real online consumption data. Consumers are aggregated into four segments: potential e-coupons user, low discount sensitive user, high discount sensitive user (including discount preference and fixed preference). The first one is defined as low active consumer segment and others are high active consumer segments. Isolation forest model and logistic regression model are respectively constructed for them. Result shows that data imbalance is effectively relieved, prediction performance is also significantly better than the traditional approaches. Finally, e-coupons’ usage characteristics for each consumer segment are summarized, according to that, companies can increase sales and improve consumer satisfaction as well.     

Supply Chain Transparency as a Consumer or Corporate Tool: The Case of Nudie Jeans Co

Outsourcing has led both to the embedding of questionable sustainability practices in opaque supply chains and to anti-sweatshop challenges demanding more transparent supply chains. Previous research has argued that supply chain transparency can be both a consumer tool empowering consumers to pressure disclosing firms to improve sustainability conditions and a corporate tool for increasing revenues. Based on a study of the transparency project of Swedish company Nudie Jeans, the authors demonstrate that consumers do not leverage transparency but that transparency improves consumer willingness to buy. In doing this, the authors contribute to the literature in two important ways. First, the authors provide one of the first, if not the first, studies of whether consumers in practice leverage increased supply chain transparency, challenging the previous research claim that supply chain transparency is a useful consumer tool. Second, the authors move beyond studies of purchasing intentions and willingness to buy in experimental settings and confirm that supply chain transparency is a useful corporate tool in practice. The authors conclude by discussing the policy implications of companies being able to use transparency to increase sales without subjecting themselves to increased consumer pressure.     

The nature of informal food bazaars: Empirical results for Urban Hanoi,Vietnam

This paper aims to study the interesting phenomenon of informal food markets in urban areas, which have been neglected in the past research. Based on an empirical study of consumer choice between informal and formal markets (markets built-up by street hawkers vs. government-planned markets), this paper provides a basis for understanding the nature of informal markets in the Vietnamese context. The results show that cheap price and convenience (proximity) are important in shaping the choice by consumers for informal markets for food, while close relationship with sellers or services provided by sellers are not. Shoppers with higher concern for freshness and safety of fresh food are more likely to shop at formal markets. Additionally, low-income shoppers are found significantly inclined toward informal markets, while higher-income shoppers tend to shop at formal markets. Therefore, these two types of market should be viewed as two marketplaces to serve two segments of consumer groups, rather than two markets competing for a share of the business.     

Unlocking competitiveness through scent names: A data-driven approach

Naming a product’s scent is a key decision. The same scent can be interpreted differently when different names are assigned to it. Thus, choosing the right scent name can increase competitiveness by successfully appealing to desired consumer segments. We propose that such decisions should be data driven (i.e., on the basis of competitors’ offerings and consumers’ preferences) and provide guidelines on how to assign scent names to products in home care and personal care product categories, focusing on capturing market segments. Based on a large web-based dataset of scented products across multiple brands and categories, this article is the first to construct a typology of scent names empirically: unscented, concrete, abstract, and proprietary. After examining firms’ assortments of scented products with different names across 12 categories and comparing them with consumers’ preferences concerning such assortments, we identify major gaps. Overall, consumers demand far more unscented products and products with abstract names than currently offered; however, preferences for products with proprietary names are mostly aligned. Strategic recommendations center on naming scented products to better align supply and demand in the scented product market and capture new market opportunities.     

Perceived assortment and consideration of customized products

Customization in the marketplace has become much more commonplace as information technology and flexible manufacturing systems continue to evolve. Consumer research into customization decisions has subsequently examined the implications of customization as compared to traditional assortment product offerings, finding that customization yields both positive implications for consumer preference matching as well as higher evaluations of retailers, chosen products, and even the process itself. The present research examines the implications that customization of products has on consumers’ decision processes, and on their perceptions of assortment and how they consider products. Two experimental studies suggest that customization decisions may negatively affect consumers’ perceptions of assortment, while also reducing the number of alternatives they consider, and that this in turn may have implications for their evaluation of, and willingness-to-pay for, customized products.     

Consumer response to and choice of customized versus standardized systems

Recent research on customization suggests that a need exists to examine conditions under which selling customized versus non-customized offerings will be more beneficial to vendors. To this end, this paper empirically evaluates consumer response to and choice of customized systems (offerings that are integrated and customized) in relation to standardized systems (offerings that feature integration but not customization). Through a series of studies, we demonstrate that the relationship between a buyer's systems purchase strategy and their future repurchase intentions toward the seller is moderated by a buyer characteristic (that is, a consumer's insight into his/her own preferences, or the degree to which a consumer can confidently and consistently express his or her true preferences) as well as a seller characteristic (retailer reputation). Given that consumers who are experts have greater insight into their own preferences than novices, our work also suggests that this greater insight into one's own preferences is a plausible explanation for why experts are more likely to choose a customized system. The main practical implication of our research is that it prompts managers to challenge the contention in some mass customization writings that customized offerings have universal appeal. Although the participants in our studies also tended to be more attracted to customized systems in general, this proclivity was lower for consumers with less product category expertise. This is important because our results convey that repurchase intentions towards a vendor will be higher after the purchase of a non-customized system by those consumers who lack insight into their preferences. As such, firms should try to propose customized systems only to those prospective buyers who possess strong preference insight, and propose standardized systems to those buyers who do not.     

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.