The video rental market is essentially flat, with few seasonal peaks apart from the Easter holidays. Demand-drivers tend to cancel each other out - with good weather in the summer (bad for video) being compensated for by the presence of children on school holidays (good).
It is also volatile - consumers are likely to dip in and out of the market, with little indication as to why. This all makes it difficult for video rental companies to predict and manage demand.
Because of this, rental chain Blockbuster has implemented a data-driven direct marketing programme, Premier, to make the switch away from generic, new release-led marketing, to customer-focused promotions. These aim to find, and hang on to, its top renters, driving them in-store more often and increasing their average monthly spend.
The programme, run through marketing agency Armadillo Associates, began a little over two years ago, when Blockbuster realised the need to improve the quality and quantity of data it held on its five million-strong customer base. Based as it was on the information customers give when they take out membership, it was limited to basic communications details such as name and address.
"We actually only finally started to capture basic demographic data, date of birth, and gender last autumn, believe it or not," says Blockbuster head of marketing Geri Birt. "The problem was our point of sale system, which, as with most retailers, was never designed for marketing applications, so we've had to upgrade it."
In addition, Blockbuster now captures e-mail addresses and mobile phone numbers with a view to opening up other communications channels.
"Before Premier, our mailing programme was less about the consumer and their needs, and instead centred around the new Blockbuster releases," she adds. "They were quite successful, but they didn't form part of a CRM programme."
In order to reach out to its high-value customers, the company scored the data it held to enable segmentation. Scoring was based on transactional history and expected future revenue potential. The focus was on its most active customers - defined as three-month active - and split into deciles.
This work was outsourced to statistical management specialist Results.
The focus was on the top scoring cell, based on present and future value, calculated over an initial three-month period. Their behaviour over the following three months ratified the scoring process.
"You see people who naturally drop out of a certain cell, and people who migrate upwards," notes Birt. "We may not understand why it happens, but at least we know that our scoring is relevant and accurate and it lets us attach a value to them."
The aim was to move more customers up to the highest renting cells, and to retain more of those who are already there. Blockbuster used a card-based benefits programme, the Bonus Card, which allowed the recipient unlimited 'rent-one-get-one-free' offers during a six- or eight-week period.
"When we switch this kind of activity on it really does drive significant frequency," she says - with a concomitant increase in sales for other products, such as Blockbuster's useful sideline in cinema-style treats like Doritos, Haagen-Dazs ice cream and Coca-Cola.
Transactional information is the most valuable. "We capture everything at line level," she says. "We know exactly what you're spending, what's in your basket, what movie you've rented, whether you've bought a bottle of Coke. We can also use the database to add value to our third-party partners. It means that Coca-Cola, which doesn't have a database of its own, can use the relationship to deliver direct messages to our customers."
This transactional data helps Blockbuster to mail to its high-spending customers by preference (DVD or VHS, or games rather than movies) and potentially by genre preference, which adds another lifestyle element to the project.
"We've yet to be wholly convinced of the value of the lifestyle data, however," she admits, "although we continue to explore it."
Five major mailings took place during the first iteration of the Premier programme, involving 3.9 million pieces. The numbers speak for themselves - more than two million additional transactions (see box, left).
It's clearly a programme that will stay the distance and Birt stresses that Blockbuster will not rest on its laurels.
"We're very focused on where we want to take CRM. It's an ever-evolving process, and we are currently updating it. We still have a long way to go - there's a lot more to do in the way of testing and modelling that we'd like to achieve."
- In a flat market where video rental is usually driven by product-driven marketing campaigns and consumer demand is volatile, Blockbuster wanted to develop its consumer database to build a relationship with high-spending video renters and keep them coming in-store.
- To reduce rental churn, build relationships with top customers and provide stability and growth for the business - and deliver substantial ROI.
- By analysing and modelling its five million-strong database, Blockbuster targeted the top 20 per cent of its members - some 900,000 consumers - with a series of five mailings between April 2001 to March 2002. The offer was an unlimited rent-one-get-one-free "Bonus Card", aimed to lock in rental behaviour and drive footfall. No-mail control cells aided evaluation.
Over the course of the campaign, non-responsive customers were deselected, while customers moving up into the high-value group were added.
- Over a 60-week period, the Blockbuster Premier programme generated an uplift in visits from targeted customers of 15.9 per cent, representing precisely 2.07 million transactions. This gave the Premier campaign a return of some 1,000 per cent on the initial investment. Ongoing returns are in the region of 600 per cent, including the value of credits given away.
This study was conducted to determine the consumer preferences of international brands over local items. This research is design to find out the buying behavior of young consumers. This paper examines consumer preferences and attributes of decision making in segment of respondent in Vehari, Pakistan. A number of factors affect the consumer purchase decisions. The results suggests, that group of consumer prefer the attributes like, Quality, Price, Social Status, Design of products. It also suggests the preferences for foreign products over local products. The research was conducted in Vehari and the sample selected 65. The data collected for research was through a questionnaire and was conducted in CIIT Vehari Campus since the target audience was largely the youth.
Preferences of international brands, Quality of products, Price of products,
Social status, Design of the products.
This research is proposed to the consumer preference of international brands over local production. The biggest factor that changes the consumer purchasing decision is quality when they prefer international brands over local brands. Consumers are more information about other culture, lifestyle and brand. On the other hand electronic sources are available to access international brand information in seconds. In last few years increasing of globalization had made intensely impact on market and also on consumer choice. Through globalization companies have advantage to participate in international market and approach to new consumer markets.
The main purpose of this study is to find the factors that are influencing consumer’s living in Vehari and their choices of purchasing international brands over local brands. The main objective of this study is to learn about how country of origin effect and change the choices and willingness of the consumer. This research will investigate the purchasing behavior of Vehari consumers towards international brands over local products.
Country of origin of any product tells the reputation of the specific country. It also shows the national characteristics, economics, political background, social system, tradition and history of any particular region. In short country of origin is overall perception of the consumer about particular country. It is necessary to establish parameters to measure the consumer attitude toward consumer preference on international brands rather local brands.
However, for some products and services “the tastes and preferences of consumers in different nations are beginning to converge on some global norms” (Holt, 2002). Consumers seem to value and admire global brands and regard such brands as a status symbol, from a consumer perspective brands may vary (Ismail, Masood, & Tawab, 2012). The preference of brand depends on best alternatives among availability (Tversky & Shafir, 1992).
One goal of consumer is accurate selection results in value satisfaction (Bettman, Luce, & Payne, 1998) it is not just depends on judgment of any single attribute of a product (Elliot & Cameron, 1994).
In other context, scholars argue that local cultures are yet very powerful force shaping consumers preferences and but some identify a tendency in consumers “hybridize” (Holton, 2000), “glocalize” (Ritzer, 2003) or “creolized” as a way to combine global and local cultural forces have impact.
International and global brands can be defined as the multi market approach in consumer markets (Johansson & Ronkainen, 2005) while local brands defined as the local manufacturing’s approach to consumer markets. Today is ages of globalization so business are become international and cross national that why customers mostly recommended and preferred the international brands due to their top quality, user friendly and customer oriented products (Netemeyer, 1991).
Purpose of the Study
The main purpose of our study is to find the factors that are influencing consumer’s choices of youth of purchasing international brands over local brands in Vehari, Pakistan. There are many factors which influence consumer decision. Such as quality of products, price of products, social status, design of products. The study is also designed to find out the buying behavior of young consumers, attitudes towards international brands and local items and preference for international brands.
Hornsby (2010) was saying that the purchasing process of consumer mostly depends on the attributes and features of the product. In many situations consumers search alternatives of the products and these alternatives and substitutes are foreign made so consumer decide that he or she use foreign products and these products can fulfill their needs and wants. In foods items there are few attributes which affecting the purchasing decision of the consumer, like appearance and price of the food. If foods items are fresh and their appearance is nice so consumer easily influence and want to purchase these food items. On the other hand price is another factor which influences the perception of the consumers. Price of the product made either good or bad impact on consumer. If product is expensive but its attributes and features is quite different rather than other product and also fulfill the demand of the consumer than consumer will be satisfy by that product and purchase it again and again.
He also described that some consumers are very conscious about the manufacturing of the product. Made in image deep and strong impact on consumer purchase decision. If any product which is foreign made that easily influence the consumer rather the domestic product, that’s why now a day’s labeling or made in Japan, made in U.S.A and made in U.K is liked by consumer and prefer over the local manufacturing because foreign products have high quality, new technology and very durable and reliable. Past studies and survey are mostly based on above three attributes (price, appearance and county of origin). These are key features of the any product which affect the consumer choice and willingness. In different survey participants highly ranked these three attributes about their purchasing decision and shopping habits.
Al-Mamun & Mahmud (2011) were saying that consumer behavior can be easily influenced by the factor of country of origin because in domestic and international markets foreign products are dominated by their high quality and new technology. This is true facts that every consumer evaluates domestic and foreign products through quality and features of the product. Previous research shows that such characteristics as quality, durability, appearance, prestige, safety, price, availability and risk affect consumer evaluation of product quality and has a significant impact on consumer’s purchase preferences.
Shah and Khattak (2011) said that consumer preference is directly relate to the economic growth of the country of origin. The concept of good quality is the sign of economic development that is the reason consumers of developing country prefer more foreign products rather the local brands because good quality is the sign of developed countries. Because consumer not compromise on quality the consumer may pay for local product which are of high quality rather foreign products ignoring prices. It is an empirically improved that if a foreign brand with its original producer become weaker with the passage of time as the brand started to be produced locally. In developing countries like Pakistan, India and Saudi Arabia foreign brands are not prefer only because of quality but are preferred for status quo, ego. It is also proved that education, life style also in favor of imported products.
Merino & Gonzales (2008) said that many organizations have changed their strategy by knowing trends of globalization which focus on global brands rather multi marketing approach. Global brands have not one line definition, but previous studies define as multi market reach of products that are perceived as a same brand worldwide by customer. However brand is a communication of information, a consumer perceived to identify it. Communication stimulates active knowledge of the brand presence, relevance, performance, advantages and bonding (Consumer feel the brand is only one that offer key advantages).
Previous research proved that understanding the differential advantage, which global brands may have on loyalty drivers in context of Latin American markets. The consumer recognizes advantage of global brand by differentiation and enhanced quality, in other hand local brands are perceived by customer in term of fair price and popularity. That is why Brazilian seem to be more open to global brands rather than Mexican and Argentinean customers prefer local brands.
Ismail, Masood & Tawab (2012) said that the most important factors that influence a consumer’s final decision are the price and quality of the product. Because the consumers usually relate the price of the product with its quality, a brand priced too costly is generally perceived as a high quality product. Similarly, a product priced too low affordable by many but perceived quality is low. Globalization also contributes to enable worldwide organization in one single market. Other factors which influence on the consumer preference include; consumer ethnocentrism, country of origin, social status, price relativity with the competing brands and family and friends. Study exposed that the quality of the product has more impact on purchase decision of the customer to buy global brands. In practice, our people, especially the females were found to be extremely prone to the global brands to meet current fashion and trends. Status symbol is also a factor influencing on customers to buy imported products.
Ho, Teik, Ing, Phing & Peng said that customers influence to buy global brands in search of status and perceived quality. While globalization is the success factor of many large organizations, local companies can also obtain competitive advantage through profound understanding globalization. Global brands are more likely to be preferred by consumers as they have the ability to associate status, wealth and prestige with the self-identity of a consumer and further enhance social standings in a social class. Perceived quality is the subjective judgment of consumers towards a product or brand superiority and distinction. The most influential factor among social motives for consumer shopping and purchasing decision is the enveloping desire for social status. Malaysian customers overall perceived quality of Toyota automobiles were found to have significantly higher perceived quality and status than Perodua automobiles.
The dependent variable “preferences of international brands” can be explained by four independent variables; (1) quality of the products (2) price of the products (3) social status (4) design of the products. Consumers of developing countries wants to purchase the products of developed countries because they thing the products of developed countries has high quality. Consumes relate the price of product with its quality, they thing that the product of low price has the low quality and a product which has a high price has a high quality. Products of developed countries are measured as indication of high social status. Consumers are also prefers the design of the products if the design of the product is good than consumer purchases it regularly.
Schematic Diagram for the Theoretical Framework
➢ Quality of the products
➢ Price of the products
➢ Social status
➢ Design of the products
➢ Preference of international brands
H1: There is a positive relationship between consumer purchasing attitude and quality of the products. If the quality of a product is high than the attitude of consumer toward a product is positive and if the quality of a product is low than the consumer response is negative to purchase the product.
H2: There is a negative relationship between price of the product and consumer purchasing attitude. If the price of product is high than the consumer attitude towards a product is negative and if the price of the product is low than the consumer attitude towards a product is positive.
H3: Consumers prefer the international brands because it adds to the social status of consumers. Consumers will prefer the products manufactured by a foreign owned company because it adds to the social status of consumers.
H4: Design of products has also positive relationship with consumer behavior. The design of a product made impact on consumer purchasing design. If the design of a product is good then customer purchases it frequently.
This research is conducted through regression analysis. In this research it is needed to understand the consumer perception of international brands over local items. The tool of our research is questionnaires; this is primary research because this is firsthand knowledge or information. The research is conducting on why consumers prefer the international brands over local items of Vehari, Pakistan. The data has been collected through questionnaires and each questionnaire contains nineteen (19) statements and the questionnaire have distributed in CIIT Vehari Campus. The sample for this research included 65 consumers. Simple random sampling is used for this research for data collection.
Results and Analysis:
Table # 01:
|Model Summary | |Model |R |R Square |Adjusted R Square |Std. Error of the | | | | | |Estimate | |1 |.527a |.278 |.230 |.90372 | |a. Predictors: (Constant), design, social status, quality, price |
From model summary of regression analysis it is evaluated that all independent variables (quality, price, social status & design) affect dependent variable (preferences of international brands) 52.7% as mentioned in table 1.
Table # 02:
| |Model |Sum of Squares|Df | |b. Dependent Variable: preferences of international brands | | |
The results of this research are more significant. Data used in this research providing accurate results as shown as .001 in ANOVA (table 2).
Table # 03:
| | |Coefficients | |Model |Unstandardized Coefficients |Standardized |t |Sig. | | | |Coefficients | | | | |B |Std. Error |
Finally regression analyses describe the relationship between dependent variables and independent variables. It also describes their relation structure, whether they have positive relation or negative. Regression analyses show that quality, social status and design have positive relation with preferences of international brand, with the increase in one unit of all there become positive change of .662, .120 and .100 occur respectively in dependent variable. The quality have positive relation with consumer preferences because the consumer perceived that the international brand have more quality rather than local items. The social status has positive relation with consumer’s preferences of international brands because consumers perceived that they increase their social status in society through the use of international brands. The price of products has also positive relation with consumer’s preferences because consumers perceived that the design of international brands is better than local items.
On the other hand price has negative relationship with dependent variable, with the increase in one unit of price there become -.275 changes occur in preferences of international brand. The price of products has negative relation with consumer’s preferences because consumers are not preferred the international brand if it has same price as local item.
Recommendations and Suggestions
Our local brands have not so good quality, their design is not well and there is no much variety in our domestic products that’s why our customer goes to purchase the international brand so frequently. Local companies charge more price because government of Pakistan charge value added tax and other type of taxes from domestic companies so companies increase their prices that’s why customer mostly purchase international brands due to their good quality, designs and lot of variety.
This research is an important contribution consumer’s preferences literature. This research concluded that consumers of Vehari, Pakistan have a stronger and positive image about the international products. The feel a personal pride when have the international products.
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