• Journal of Global Scholars of Marketing Science
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• v.19 no.2
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• pp.68-79
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• 2009

The interplay between hedonic and utilitarian attributes has assumed special significance in recent years; it has been proposed that consumption offerings should be viewed as experiences that stimulate both cognitions and feelings rather than as mere products or services. This research builds on previous work on hedonic versus utilitarian benefits, regulatory focus theory, customer satisfaction to address two question: (1) Is the shopping goal at the point of purchase different from the shopping value? and (2) Is the customer loyalty after the use different from the shopping value and shopping goal? We surveyed 345 peoples those who have bought the electronic-goods within 6 months. This research dealt with the shopping value which is consisted of 2 types, hedonic and utilitarian. Those who pursue the hedonic shopping value may prefer the pleasure of purchasing experience to the product itself. They tend to prefer atmosphere, arousal of the shopping experience. Consistent with previous research, we use the term "hedonic" to refer to their aesthetic, experiential and enjoyment-related value. On the contrary, Those who pursue the utilitarian shopping value may prefer the reasonable buying. It may be more functional. Consistent with previous research, we use the term "utilitarian" to refer to the functional, instrumental, and practical value of consumption offerings. Holbrook(1999) notes that consumer value is an experience that results from the consumption of such benefits. In the context of cell phones for example, the phone's battery life and sound volume are utilitarian benefits, whereas aesthetic appeal from its shape and color are hedonic benefits. Likewise, in the case of a car, fuel economics and safety are utilitarian benefits whereas the sunroof and the luxurious interior are hedonic benefits. The shopping goals are consisted of the promotion focus goal and the prevention focus goal, based on the self-regulatory focus theory. The promotion focus is characterized into focusing ideal self because they are oriented to wishes and vision. The promotion focused individuals are tend to be more risk taking. They are more sensitive to hope and achievement. On the contrary, the prevention focused individuals are characterized into focusing the responsibilities because they are oriented to safety. The prevention focused individuals are tend to be more risk avoiding. We wanted to test the relation among the shopping value, shopping goal and customer loyalty. Customers show the positive or negative feelings comparing with the expectation level which customers have at the point of the purchase. If the result were bigger than the expectation, customers may feel positive feeling such as delight or satisfaction and they would want to share their feelings with other people. And they want to buy those products again in the future time. There is converging evidence that the types of goals consumers expect to be fulfilled by the utilitarian dimension of a product are different from those they seek from the hedonic dimension (Chernev 2004). Specifically, whereas consumers expect the fulfillment of product prevention goals on the utilitarian dimension, they expect the fulfillment of promotion goals on the hedonic dimension (Chernev 2004; Chitturi, Raghunathan, and Majahan 2007; Higgins 1997, 2001) According to the regulatory focus theory, prevention goals are those that ought to be met. Fulfillment of prevention goals in the context of product consumption eliminates or significantly reduces the probability of a painful experience, thus making consumers experience emotions that result from fulfillment of prevention goals such as confidence and securities. On the contrary, fulfillment of promotion goals are those that a person aspires to meet, such as "looking cool" or "being sophisticated." Fulfillment of promotion goals in the context of product consumption significantly increases the probability of a pleasurable experience, thus enabling consumers to experience emotions that result from the fulfillment of promotion goals. The proposed conceptual framework captures that the relationships among hedonic versus utilitarian shopping values and promotion versus prevention shopping goals respectively. An analysis of the consequence of the fulfillment and frustration of utilitarian and hedonic value is theoretically worthwhile. It is also substantively relevant because it helps predict post-consumption behavior such as the promotion versus prevention shopping goals orientation. Because our primary goal is to understand how the post consumption feelings influence the variable customer loyalty: word of mouth (Jacoby and Chestnut 1978). This research result is that the utilitarian shopping value gives the positive influence to both of the promotion and prevention goal. However the influence to the prevention goal is stronger. On the contrary, hedonic shopping value gives influence to the promotion focus goal only. Additionally, both of the promotion and prevention goal show the positive relation with customer loyalty. However, the positive relation with promotion goal and customer loyalty is much stronger. The promotion focus goal gives the influence to the customer loyalty. On the contrary, the prevention focus goal relates at the low level of relation with customer loyalty than that of the promotion goal. It could be explained that it is apt to get framed the compliment of people into 'gain-non gain' situation. As the result, for those who have the promotion focus are motivated to deliver their own feeling to other people eagerly. Conversely the prevention focused individual are more sensitive to the 'loss-non loss' situation. The research result is consistent with pre-existent researches. There is a conceptual parallel between necessities-needs-utilitarian benefits and luxuries-wants-hedonic benefits (Chernev 2004; Chitturi, Raghunathan and Majaha 2007; Higginns 1997; Kivetz and Simonson 2002b). In addition, Maslow's hierarchy of needs and the precedence principle contends luxuries-wants-hedonic benefits higher than necessities-needs-utilitarian benefits. Chitturi, Raghunathan and Majaha (2007) show that consumers are focused more on the utilitarian benefits than on the hedonic benefits of a product until their minimum expectation of fulfilling prevention goals are met. Furthermore, a utilitarian benefit is a promise of a certain level of functionality by the manufacturer or the retailer. When the promise is not fulfilled, customers blame the retailer and/or the manufacturer. When negative feelings are attributable to an entity, customers feel angry. However in the case of hedonic benefit, the customer, not the manufacturer, determines at the time of purchase whether the product is stylish and attractive. Under such circumstances, customers are more likely to blame themselves than the manufacturer if their friends do not find the product stylish and attractive. Therefore, not meeting minimum utilitarian expectations of functionality generates a much more intense negative feelings, such as anger than a less intense feeling such as disappointment or dissatisfactions. The additional multi group analysis of this research shows the same result. Those who are unsatisfactory customers who have the prevention focused goal shows higher relation with WOM, comparing with satisfactory customers. The research findings in this article could have significant implication for the personal selling fields to increase the effectiveness and the efficiency of the sales such that they can develop the sales presentation strategy for the customers. For those who are the hedonic customers may be apt to show more interest to the promotion goal. Therefore it may work to strengthen the design, style or new technology of the products to the hedonic customers. On the contrary for the utilitarian customers, it may work to strengthen the price competitiveness. On the basis of the result from our studies, we demonstrated a correspondence among hedonic versus utilitarian and promotion versus prevention goal, WOM. Similarly, we also found evidence of the moderator effects of satisfaction after use, between the prevention goal and WOM. Even though the prevention goal has the low level of relation to WOM, those who are not satisfied show higher relation to WOM. The relation between the prevention goal and WOM is significantly different according to the satisfaction versus unsatisfaction. In addition, improving the promotion emotions of cheerfulness and excitement and the prevention emotion of confidence and security will further improve customer loyalty. A related potential further research could be to examine whether hedonic versus utilitarian, promotion versus prevention goals improve customer loyalty for services as well. Under the budget and time constraints, designers and managers are often compelling to choose among various attributes. If there is no budget or time constraints, perhaps the best solution is to maximize both hedonic and utilitarian dimension of benefits. However, they have to make trad-off process between various attributes. For the designers and managers have to keep in mind that without hedonic benefit satisfaction of the product it may hard to lead the customers to the customer loyalty.

• Journal of Global Scholars of Marketing Science
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• v.19 no.4
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• pp.32-43
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• 2009

Trust has been studied extensively in psychology, economics, and sociology, and its importance has been emphasized not only in marketing, but also in business disciplines in general. Unlike past relationships between suppliers and buyers, which take considerable advantage of private networks and may involve unethical business practices, partnerships between suppliers and buyers are at the core of success for industrial marketing amid intense global competition in the 21st century. A high level of mutual cooperation occurs through an exchange relationship based on trust, which brings long-term benefits, competitive enhancements, and transaction cost reductions, among other benefits, for both buyers and suppliers. In spite of the important role of trust, existing studies in buy-supply situations overlook the role of trust and do not systematically analyze the effect of trust on relational performance. Consequently, an in-depth study that determines the relation of trust to the relational performance between buyers and suppliers of business services is absolutely needed. Business services in this study, which include those supporting the manufacturing industry, are drawing attention as the economic growth engine for the next generation. The Korean government has selected business services as a strategic area for the development of manufacturing sectors. Since the demands for opening business services markets are becoming fiercer, the competitiveness of the business service industry must be promoted now more than ever. The purpose of this study is to investigate the effect of the mutual trust between buyers and suppliers on relational performance. Specifically, this study proposed a theoretical model of trust-relational performance in the transactions of business services and empirically tested the hypotheses delineated from the framework. The study suggests strategic implications based on research findings. Empirical data were collected via multiple methods, including via telephone, mail, and in-person interviews. Sample companies were knowledge-based companies supplying and purchasing business services in Korea. The present study collected data on a dyadic basis. Each pair of sample companies includes a buying company and its corresponding supplying company. Mutual trust was traced for each pair of companies. This study proposes a model of trust-relational performance of buying-supplying for business services. The model consists of trust and its antecedents and consequences. The trust of buyers is classified into trust toward the supplying company and trust toward salespersons. Viewing trust both at the individual level and the organizational level is based on the research of Doney and Cannon (1997). Normally, buyers are the subject of trust, but this study supposes that suppliers are the subjects. Hence, it uniquely focused on the bilateral perspective of perceived risk. In other words, suppliers, like buyers, are the subject of trust since transactions are normally bilateral. From this point of view, suppliers' trust in buyers is as important as buyers' trust in suppliers. The suppliers' trust is influenced by the extent to which it trusts the buying companies and the buyers. This classification of trust using an individual level and an organization level is based on the suggestion of Doney and Cannon (1997). Trust affects the process of supplier selection, which works in a bilateral manner. Suppliers are actively involved in the supplier selection process, working very closely with buyers. In addition, the process is affected by the extent to which each party trusts its partners. The selection process consists of certain steps: recognition, information search, supplier selection, and performance evaluation. As a result of the process, both buyers and suppliers evaluate the performance and take corrective actions on the basis of such outcomes as tangible, intangible, and/or side effects. The measurement of trust used for the present study was developed on the basis of the studies of Mayer, Davis and Schoorman (1995) and Mayer and Davis (1999). Based on their recommendations, the three dimensions of trust used for the study include ability, benevolence, and integrity. The original questions were adjusted to the context of the transactions of business services. For example, a question such as "He/she has professional capabilities" has been changed to "The salesperson showed professional capabilities while we talked about our products." The measurement used for this study differs from those used in previous studies (Rotter 1967; Sullivan and Peterson 1982; Dwyer and Oh 1987). The measurements of the antecedents and consequences of trust used for this study were developed on the basis of Doney and Cannon (1997). The original questions were adjusted to the context of transactions in business services. In particular, questions were developed for both buyers and suppliers to address the following factors: reputation (integrity, customer care, good-will), market standing (company size, market share, positioning in the industry), willingness to customize (product, process, delivery), information sharing (proprietary information, private information), willingness to maintain relationships, perceived professionalism, authority empowerment, buyer-seller similarity, and contact frequency. As a consequential variable of trust, relational performance was measured. Relational performance is classified into tangible effects, intangible effects, and side effects. Tangible effects include financial performance; intangible effects include improvements in relations, network developing, and internal employee satisfaction; side effects include those not included either in the tangible or intangible effects. Three hundred fifty pairs of companies were contacted, and one hundred five pairs of companies responded. After deleting five company pairs because of incomplete responses, one hundred five pairs of companies were used for data analysis. The response ratio of the companies used for data analysis is 30% (105/350), which is above the average response ratio in industrial marketing research. As for the characteristics of the respondent companies, the majority of the companies operate service businesses for both buyers (85.4%) and suppliers (81.8%). The majority of buyers (76%) deal with consumer goods, while the majority of suppliers (70%) deal with industrial goods. This may imply that buyers process the incoming material, parts, and components to produce the finished consumer goods. As indicated by their report of the length of acquaintance with their partners, suppliers appear to have longer business relationships than do buyers. Hypothesis 1 tested the effects of buyer-supplier characteristics on trust. The salesperson's professionalism (t=2.070, p<0.05) and authority empowerment (t=2.328, p<0.05) positively affected buyers' trust toward suppliers. On the other hand, authority empowerment (t=2.192, p<0.05) positively affected supplier trust toward buyers. For both buyers and suppliers, the degree of authority empowerment plays a crucial role in the maintenance of their trust in each other. Hypothesis 2 tested the effects of buyerseller relational characteristics on trust. Buyers tend to trust suppliers, as suppliers make every effort to contact buyers (t=2.212, p<0.05). This tendency has also been shown to be much stronger for suppliers (t=2.591, p<0.01). On the other hand suppliers trust buyers because suppliers perceive buyers as being similar to themselves (t=2.702, p<0.01). This finding confirmed the results of Crosby, Evans, and Cowles (1990), which reported that suppliers and buyers build relationships through regular meetings, either for business or personal matters. Hypothesis 3 tested the effects of trust on perceived risk. It has been found that for both suppliers and buyers the lower is the trust, the higher is the perceived risk (t=-6.621, p<0.01 for buyers; t=-2.437, p<0.05). Interestingly, this tendency has been shown to be much stronger for buyers than for suppliers. One possible explanation for this higher level of perceived risk is that buyers normally perceive higher risks than do suppliers in transactions involving business services. For this reason, it is necessary for suppliers to implement risk reduction strategies for buyers. Hypothesis 4 tested the effects of trust on information searching. It has been found that for both suppliers and buyers, contrary to expectation, trust depends on their partner's reputation (t=2.929, p<0.01 for buyers; t=2.711, p<0.05 for suppliers). This finding shows that suppliers with good reputations tend to be trusted. Prior experience did not show any significant relationship with trust for either buyers or suppliers. Hypothesis 5 tested the effects of trust on supplier/buyer selection. Unlike buyers, suppliers tend to trust buyers when they think that previous transactions with buyers were important (t=2.913 p<0.01). However, this study did not show any significant relationship between source loyalty and the trust of buyers in suppliers. Hypothesis 6 tested the effects of trust on relational performances. For buyers and suppliers, financial performance reportedly improved when they trusted their partners (t=2.301, p<0.05 for buyers; t=3.692, p<0.01 for suppliers). It is interesting that this tendency was much stronger for suppliers than it was for buyers. Similarly, competitiveness was reported to improve when buyers and suppliers trusted their partners (t=3.563, p<0.01 for buyers; t=3.042, p<0.01 for suppliers). For suppliers, efficiency and productivity were reportedly improved when they trusted buyers (t=2.673, p<0.01). Other performance indices showed insignificant relationships with trust. The findings of this study have some strategic implications. First and most importantly, trust-based transactions are beneficial for both suppliers and buyers. As verified in the study, financial performance can be improved through efforts to build and maintain mutual trust. Similarly, competitiveness can be increased through the same kinds of effort. Second, trust-based transactions can facilitate the reduction of perceived risks inherent in the purchasing situation. This finding has implications for both suppliers and buyers. It is generally believed that buyers perceive higher risks in a highly involved purchasing situation. To reduce risks, previous studies have recommended that suppliers devise risk-reducing tactics. Moving beyond these recommendations, the present study uniquely focused on the bilateral perspective of perceived risk. In other words, suppliers are also susceptible to perceived risks, especially when they supply services that require very technical and sophisticated manipulations and maintenance. Consequently, buyers and suppliers must solve problems together in close collaboration. Hence, mutual trust plays a crucial role in the problem-solving process. Third, as found in this study, the more authority a salesperson has, the more he or she can be trusted. This finding is very important with regard to tactics. Building trust is a long-term assignment; however, when mutual trust has not been developed, suppliers can overcome the problems they encounter by empowering a salesperson with the authority to make certain decisions. This finding applies to suppliers as well.