Home Lighting: Moving beyond Low Involvement - Research Paper Example

Home lighting: moving beyond low involvement in the evolving lightscape? 7. Interpretation and Analysis The Level of Involvement in Home Lighting Low involvement buying decision simply means that the target consumers for lighting nonchalantly purchases and consumes the product, tries new products, switches brands, obliviously ignores promotional activities. This is normally observed in fast moving consumer goods like food and basic commodities which are necessary for sustaining life. Even though the selling of lighting products is commonly seen as low involvement due to the fact that the presence of light is a significant part of our lifestyle, the research findings prove that it is a mistake to consider lighting products as something that has low involvement in consumers’ behaviour. Contrary to fast moving commodities, products like incandescent bulbs, energy saving light bulbs and decorative lighting are not categorized as fast moving items due to the fact that most people would purchase light bulbs only between two to three bulbs each year. In line with this, majority of the people in HK normally purchase light bulb products only when their existing light bulbs are broken. In other words, the purchase of a new light bulb occurs only when there is a need to replace the broken light bulb. With a total of 76% of the research respondents, seldom would buyers purchase more than one bulb just to keep stock at home. (Refer to Part I – Question # 9 – Buy lamps when broken and Question # 10 – Buy more than 1 bulb at a time) Abraham Maslow’s concept of hierarchy of needs particularly the theory of human motivation suggesting that people are motivated to buy consumer goods as a way of fulfilling the basic human needs. This concept may no longer be applicable in today’s society. Due to the presence of different light bulbs including the incandescent bulbs, energy saving light bulbs and decorative lighting in the market, consumers could easily purchase based on the product’s market price and quality. In fact, the availability of the LED offers the consumers a wide-range of decorative lighting that will suite their personal taste and style rather than solely purchasing a light bulb for its main function. Contrary to the concept of low involvement, high involvement often occurs in slow moving items in the sense that the market consumers will have to take quite some time before they purchase expensive products. Given that lighting products are slow moving items and that consumers have a lot of issues to consider before purchasing a light bulb, the question as to whether or not the lighting category is moving from a low involvement to high involvement category arises. Although as much as 53% of the lighting consumers are consciously trying to use green products such as in the case of the energy saving light bulbs and that 80% of the consumers acknowledge that energy efficiency is one of the most important purchasing factor that affects their buying behaviour, it remains a fact that only few consumers with 16% of the research respondents are aware of the LED technology which offers them not only the benefit of low energy but also a better quality bulb that comes in different shape and colour that could fit their individual personality. It simply means that consumers of light bulbs are more concerned with the energy efficiency that the light bulb could offer them rather than the shape and colour of the bulb. (Refer to Part I – Question # 3 – Awareness of LED technology; Question # 4 – Conscious use of green products; and Question # 13 – Energy efficiency is important) The research survey results revealed that the following: (1) only 22% of the research respondents view lighting as an important part of home décor; (2) only 13% of the research respondents agree that lighting is innovative category; (3) only 20% of the research respondents are aware that they can become creative with the use of new lighting technology such as what LED can offer; and (4) only 24% of the research respondents are aware that they could personalize their environment with the use of lighting. (Refer to Part I – Question # 1 – Important part of home deco; Question # 2 – Lighting is an innovative category; Question # 5 – Creative with lighting; Question # 6 – You can personalize your environment with lighting; and Question # 12 – Design of light is very important) Not all buyers of light bulbs are very much particular with the design of light. One of the most obvious reasons why consumers are not moved by the different shape, size, and colours of bulbs is due to the fact that most of them do not have sufficient knowledge with regards to the LED technology. With regards to purchase decisions made at the point of sale, majority of those individuals who purchase the incandescent bulb with 78% of the total respondents make their decision at the point of sale. With regards to more high-tech bulbs such as the energy saver bulb and those that are made of LED technology, consumers take longer time to decide on which item to buy as compared to the incandescent bulbs. In line with this, the research study findings revealed that 33% of the consumers who purchase LED or decorative lighting bulbs are going out of their way to search for more information regarding some product information that is offered by each manufacturer. (Refer to Part I – Question # 3 – Awareness of LED technology; Question # 5 – Creative with lighting; and Question # 12 – Design of light is very important on page ; Part II - Question # 1 – Purchase decision made at point of sale; Question # 4 – Search for more information in the same segment) Similar to the explanation of Heath 2001 stating that low consumer involvement do not feel the need to find out more about the product information, the research findings confirmed that consumers who are price sensitive and would purchase the incandescent bulbs as compared with higher quality lighting bulb are more likely to be dictated by the price alone. With a total of 58% of the research respondents, the research study findings revealed that consumers who purchase the LED or decorative lighting bulbs are more likely to compare the product features with the similar product offered by other lighting manufacturers. Between the selling of the incandescent bulbs and the energy saving bulbs, the research study findings revealed that 13% of the research respondents who purchase the energy saving bulbs are more likely to compare the product features with the similar product offered by other lighting manufacturers as compared to those who purchase the incandescent bulbs. (Refer to Part II – Question # 6 – Comparing features with the same competitor lamp) To sum it up, the longer time needed for consumers to purchase high-tech bulbs such as the energy saver bulb and those that are made of LED technology are signs of high involvement decision. Given that light manufacturers could effectively introduce the LED technology to HK consumers, the research findings strongly suggest that there are clear evidences showing that the lighting category would slowly be moving from a low involvement to high involvement category. This is possible since most of the light consumers in HK particularly those who are between the age brackets of 36 to 60 years old are more likely to purchase energy saving bulbs or those that are made of the new LED technology bulbs. Consumer Behaviour and Factors that Significantly Influence the Buying Behaviour of Lighting Consumers Age Factor Consumers of light bulbs do not behave in the same way. Based on the research findings, the age of the consumers and the energy efficiency factor of lighting bulb seem to have a direct correlation with their decision when purchasing either incandescent bulb, energy saving light bulb or decorative lighting bulb. (Refer to Part I –Question # 1 – Important part of home deco; and Question # 13 – Energy efficiency is important) The research study findings revealed that consumers between the age group of 25 – 35 years old are more likely to purchase the cheapest light bulb which is the incandescent bulb as compared to 7% of consumers that belongs to the age bracket of 36 – 45 years old and 46 to 60 years old respectively. The research study findings revealed that the annual income of 93% of the research respondents within the 3 age brackets used in this study reflects that consumers are earning less than HKD 400,000 per year. In line with this, a total of 60% of research respondents between the age group of 25 – 35 years old are earning less than HKD 200,000 each year. Contrary to the income of the youngest age group, consumers who belong to the age brackets of 36 – 45 years old and 46 – 60 years old are more likely to earn more than HKD 200,000 each year. Because of the differences in the annual income, consumers who belong to the age brackets of 25 – 35 years old are more likely to purchase the incandescent bulbs as compared to older consumers. (Refer to Part I – Question # 7 – Buy the cheapest brand bulb; Part III – Question # 1 – Total Income of Research Respondents in Each Group) Aside from the differences in the annual income in each of the 3 age groups, the research study findings revealed that more research respondents between the age brackets of 36 – 45 years old (73%) and 46 – 60 years old (87%) own their own home as compared 40% of research respondents who belongs to the age bracket of 25 – 35 years old. Since the number of consumers who are more than 36 years old own their own home, this group of consumers are more likely to purchase more expensive light bulbs that is fit to their own style and personality. (Refer to Part III – Question # 2 – Home owners total respondents) Aside from the fact that consumers within the 25 – 35 years old group are using the incandescent bulbs, the research findings revealed that consumers in the age bracket of 46 – 60 years old with 73% of the research respondents are more concerned with the use of the energy saving bulbs whereas more consumers in the age bracket of 36 – 45 years old with 27% of the research respondents are more likely to purchase the LED or decorative lighting bulb. (Refer to Part III – Question # 3 – Total users of the incandescent bulb, energy saving bulb, and LED or decorative lighting bulb) Price Factor Although consumers’ purchasing behaviour on lighting has something to do with age, the research study results prove that HK consumers of lighting products are not always motivated by price. In line with this, majority with 58% revealed that they do not buy the cheapest lighting brand. Only 11% of the research respondents would purchase the cheapest bulb brand. The remaining 36% of the research respondents would ‘sometimes’ purchase the cheapest bulb brand. (Refer to Part I – Question # 7 – Buy the cheapest brand bulb) There are some lighting consumers who are not price sensitive. In line with this, the research findings revealed that consumers who purchase the incandescent bulbs (60%) are more sensitive to price as compared to those who purchase the energy saving bulbs (38%) and decorative lighting bulbs (36%). Even though consumers who purchase the energy saving bulbs or the decorative lighting bulbs are less sensitive with regards to price issue, most of these consumers are likely to compare the price of different brands that offers similar quality, shape, and colour of bulbs. This is concept is applicable unless the lighting manufacturer has successfully established a strong brand name which enables the company to demand a premium price from its target consumers. (Refer to Part II – Question # 3 – Price is very important in decision making) Importance of Product Design Between the use of incandescent bulbs, energy saving bulbs, and LED or decorative lighting bulbs, the research study reveals that 80% of HK lighting consumers are using the incandescent bulbs as compared to energy saving bulbs with 58% and LED or decorative lighting bulbs with 16% of the total research respondents. Since most of the research respondents are highly dependent on the use of the incandescent bulbs, product design among price sensitive consumers may not be as important as compared to individuals who prefer to purchase decorative lighting bulbs. (Refer to Part III – Question # 3 – Total users of incandescent bulbs, energy saving bulbs, and LED or decorative bulbs) Although product design is not really important for consumers who purchase the incandescent bulbs, the research findings show that 38% and 36% of the consumers who purchase the energy saving bulbs and LED or decorative lighting bulbs are more likely to consider the importance of product design. This is possible since the consumers of incandescent bulbs are more concerned with the price of the product rather than buying more expensive lighting bulbs such as the energy saving bulbs and the LED or decorative lighting bulbs. Likewise, manufacturers of lighting bulb has long time ago positioned the incandescent bulbs to have a standard bulb shape which all manufacturers are producing. (Refer to Part II – Question # 5 – The product design is very important) Strong Brand Factor Brand is a major factor that affects the buying behaviour of the lighting consumers in HK. Based on the research findings, as much as 42% of the research respondents revealed that they strongly agree that brand is an important buying factor when purchasing a light bulb whereas 47% of the research respondents view brand as somewhat important. In line with the importance of brand name within the lighting industry, 60% and 53% of the research respondents consider brand as an important factor when purchasing bulbs that are made of LED technology and those that are energy saver respectively. With regards to incandescent bulb, energy saving bulb, and decorative lighting bulb, brand is less significant for consumers who purchase the incandescent bulbs. (Refer to Part I – Question # 14 – Brand is very important when buying a bulb; Part II – Question # 2 – Brand is very important in decision making) In line with the importance of establishing a strong brand, Rossiter & Percy (2005) suggest that the application of brand communication strategies must confirm as to whether consumers’ buying behaviour requires high or low involvement. Likewise, the use of brand communication should also determine the ways on how the HK lighting consumers are motivated in purchasing items that could make them feel good. Significance of Brand Loyalty Oliver (1997) defines brand loyalty as “a deeply held commitment to re-buy or re-patronize a preferred product or service consistently in the future, despite situational influences and marketing efforts having the potential to cause switching behaviours”. In other words, brand loyalty is all about good emotional experiences that consumers receive when using the same product or brand. With regards to brand loyalty, the research findings revealed that majority with 49% of the research respondents would never switch to other brands frequently. In line with having a strong brand loyalty, Aaker (1991) explained that having a strong brand loyalty is about having a strong brand which is often created when the consumers are satisfied with their previous experiences with the use of a particular brand. Basically, some ways of determining a strong brand loyalty includes the practice of constant repurchase of the same brand. (Refer to Part I – Question # 8 – Switching brands frequently) Impact of Peer Recommendation Another significant factor that could strongly affect the consumers’ buying behaviour is peer recommendation. In line with this, the research findings revealed that as much as 44% of the research respondents revealed that they would buy a light bulb or a particular bulb given that it was highly recommended to them by someone who a significant part of their life. Only 16% of the research respondents would not accept peer recommendation when purchasing a light bulb or brand. (Refer to Part I – Question # 11 – I would buy a bulb/brand if it was recommended to me) Relationship between Product Segment and Involvement Product segmentation is referring to the act of “dividing the broad market based on the products offered by a manufacturing or retailing company” (Gorman 2003, p. 251). In line with this, product segmentation for more expensive lighting bulbs such as the LED or decorative lighting bulbs would target the middle- and upper class market and individuals between the age brackets of 35 – 45 years old who are willing to spend more money for artistic light bulbs that is not limited to energy saving but also provides them the access to having light bulbs that comes in different colours and shapes. On the other hand, product segmentation for purely energy saving bulbs would target the consumers between the age brackets of 45 – 60 years old who are less concerned with arts and style. With regards to the incandescent bulbs, energy saving bulbs, and the LED or decorative lighting bulb, it is safe to conclude that the incandescent bulbs as a product has low involvement decision as compared to the energy saving bulbs and the LED or decorative lighting bulb. Between the energy saving bulbs and the LED or decorative lighting bulb, the LED or decorative lighting bulb has higher involvement decision as compared to the energy saving bulbs. (See Figure I – Relationship between Product Segment and Involvement below) Figure I – Relationship between Product Segment and Involvement Promotional Opportunities that Awaits the Light Manufacturers The lighting consumers in HK have strong brand loyalty. In line with the importance of developing brand loyalty, Kim, Morris, & Swait (2008) identified the two distinct types of brand loyalty as: true brand loyalty and spurious brand loyalty. Basically, a true brand loyalty is based on brand commitment whereas the spurious brand loyalty is based on inertia. A true brand loyalty consumer insists on buying the same brand next time when he needs to buy the same product again. A spurious brand loyal consumer does not commit to his brand and might buy the same brand next time or might also buy a different brand easily. Because of the presence of true brand loyalty and spurious brand loyalty, the lighting manufacturers should focus on satisfying the specific needs and wants of its target consumers rather than creating products that could trigger only a short-term or spurious brand loyalty from its target consumers. By strengthening the customers’ long-term brand loyalty, lighting manufacturers will be able to increase their market value in several ways like: (1) reducing the overall marketing costs; (2) practice leverage trading; and (3) attract new customers which is necessary in creating brand awareness (Aaker, 1991). Given the fact that 80% of the research respondents agree that energy efficiency of the light bulb is one of the most important factors that could affect their buying decision, light manufacturers should concentrate on developing more energy saving light bulbs and the LED technology. By focusing on advertising the benefits of using energy saving bulbs and the LED or decorative lighting bulbs, lighting manufacturers will be able to gradually convince the HK target consumers to shift from the use of the traditional incandescent bulbs to new lighting technology such as the energy saving bulbs and the LED or decorative lighting bulbs. Although consumers who purchase the energy saving bulbs or the decorative lighting bulbs are less sensitive with regards to price issue, most of the light consumers in HK are likely to compare the price of different brands that offers similar quality, shape, and colour of bulbs. In order to increase the competitive advantages of light manufacturers, each business organization should keep it a point to sell their products within the accepted market price range and effectively communicate the advantages of using the decorative lighting bulbs over the use of the energy saving bulbs and the incandescent bulbs. Consumer involvement is one of the major development strategies as part of customer relationship marketing. In line with this, marketing managers should maintain good communication line with its target consumers to allow them to gather information which will be useful in delivering lighting products that will meet the specific needs of the HK lighting consumers (Dholakia, 2001). 8. Conclusion and Recommendations There is a significant relationship between product segmentation of lighting products with the levels of involvement such that the levels of involvement are expected to increase when the lighting products offer the consumers a wider range of products to choose from. Even though the selling of lighting products is commonly seen as low involvement due to the fact that the presence of light is a significant part of our lifestyle, the research findings prove that it is a mistake to consider lighting products as something that has low involvement in consumers’ behaviour. Low involvement buying decision simply means that the target consumers for lighting nonchalantly purchases and consumes the product, tries new products, switches brands, obliviously ignores promotional activities. On the other hand, high involvement buying decision often occurs in slow moving items in the sense that the market consumers will have to take quite some time before they purchase expensive products. Considering the possibility that lighting manufacturers would eventually focused on the product promotion of the energy saving bulbs and the LED or decorative lighting bulbs, the involvement levels for lighting products within the HK consumers is more likely to increase. From the use of the traditional incandescent bulbs which has low involvement, it is possible that the future lighting bulbs will have a much higher involvement than what HK consumers are experiencing when buying cheap light bulbs in a retail store. With regards to the basic functional radar, consumers of light bulbs are more likely to purchase the incandescent bulb due to the fact that the market price of these bulbs is less expensive as compared with the energy saving bulbs and decorative lighting bulbs. Based on the emotional radar, consumers of light bulb may tend to go away from the functional purpose of a light bulb to light bulbs that offer additional benefits such as the energy saving technology up to the use of different shape, style, and colour of light bulbs. Up to the present time, HK consumers do not seem to be aware of the benefits they could receive when purchasing LED or decorative light bulbs. In line with this, HK consumers are already knowledgeable with the importance of using energy saving bulbs but not those that are made of LED technology. In general, HK consumers will be able to receive the energy saving quality of the light bulb on top of the different shapes, colour and sizes that are common in decorative lighting bulbs. Since not many of the HK consumers are familiar with the benefits of using decorative lighting bulbs, more people in HK are still heavily relying on the use of the energy saving bulbs. It remains a challenge on the part of the lighting manufacturers to persuade the HK consumers to shift to the use of LED or decorative lighting bulbs. To be able to effectively persuade the HK consumers to become more comfortable with the use of energy saving and LED or decorative lighting bulbs, lighting manufacturers should be aware that HK consumers are willing to spend higher price on these products but would more likely compare the market prices of similar products. For this reason, lighting manufacturers should continuously search for new strategic ways on how they could offer the LED or decorative lighting bulbs to its target consumers at a reasonable price and competitive designs. Likewise, lighting manufacturers and retailers should be able to promote and make the product readily available to its target consumers. As a way of empowering the marketing managers who are currently working for lighting manufacturers, there is a need for this group of professionals to have a good understanding of the marketing mix. By carefully studying the product design, pricing, packaging, place, and promotion, the marketing manager will be able to have more power to grab a bigger market shares as compared to those companies that failed to apply the marketing mix in their promotional activities. Considering the fact that LED or decorative lighting bulbs can be a little more expensive than the use of a pure energy saving bulb, marketing leaders should be able to find new ways to convince the target consumers to shift from the use of energy saving bulbs to decorative lighting bulbs. In line with this, lighting manufacturers may consider lowering down the market price of decorative lighting as a temporary promotional activity. Once the target market in HK is able to feel more comfortable with the use of decorative lighting bulbs, there is a higher chance that the target consumers may continuously use decorative lighting bulbs. When this happen, the market competition within the lighting industry may eventually occur among the lighting manufacturers that produces identical products. Consumers of light bulbs do not behave in the same way. Among the factors that could significantly affect the consumer behaviour within the lighting market includes the age of the target consumers, price factor, significance of product design particularly with regards to the use of the LED or decorative lighting bulbs, the impact of peer recommendation, and the ability of lighting manufacturers to establish a strong brand. Given that these factors could significantly affect the buying behaviour of the consumers, marketing managers of lighting manufacturers should consider these issues when developing a marketing strategy that is effective in increasing the sales of the energy saving bulbs and the LED or decorative lighting bulbs. Brand equity is a set of brand assets and liabilities that are linked to a brand, its name and symbol, which add to or subtract from the value provided by a product or service to a firm and to that firm’s customers. (Aaker, 1991) In general, brand equity is considered a multidimensional concept due to the fact that brand equity is consist of brand loyalty, brand awareness, perceived quality, brand association, and other proprietary brand assets (Yoo, Donthy, & Lee, 2000). As a common knowledge, branding is an important component of an effective marketing. In order to increase the brand equity of a lighting manufacturer, marketing managers should improve the product packaging, the store image, offer competitive market price, and develop effective advertising campaigns. In line with this, the use of expensive advertisement may not always be effective in increasing the light manufacturers’ profitability since the lighting products are slow moving products. Given the fact that lighting products is a slow moving item which require each household to purchase only 2 to 3 lighting bulbs each year, marketing manager should carefully choose advertising campaigns which is suitable in persuading the HK target consumers to shift from the use of the traditional incandescent bulbs to energy saving bulbs and LED or decorative lighting bulbs. One of the most effective marketing advertisement campaigns for this particular product is for local lighting manufacturers to be able to tie up with the local energy distributor and/or the HK government. With the use of government advertisement, lighting manufacturers will have a better chance of being heard by its target audiences. One of the main concerns of the local energy distributor is to make the use of the available energy resources wisely. Since energy saving bulbs and LED or decorative lighting bulbs could solve problems related to maximizing the use of electricity, lighting manufacturers should enter into collusion to convince the HK government and/or the local energy distributor to work together towards one goal. This particular marketing strategy is effective in terms of creating a reason for satisfied incandescent bulb users to shift to the use of energy saving bulbs or the decorative lighting bulbs. A competitive lighting product offers the target consumers a high level of product performance, a wide selection of product features including the style and design, conformance with the standard quality, reliable, and durable. Lighting manufacturers need to focus on increasing the value of perceived quality product to enable its marketing personnel to create ‘reason-to-buy’, differentiate and position the new lighting product effectively, sell the product at a premium price, and develop new business opportunity to create a brand extension. (Aaker, 1991, p. 86) A customer often lacks the motivation to obtain and sort out information that might lead to an objective determination of quality in a given application. In some cases, product information may not be available to motivate HK consumers to try using energy saving bulbs or decorative lighting bulbs. It is also possible that HK consumers may not have the ability or resources to purchase the product. Regardless of the case, perceived quality becomes important since perceived quality is linked to purchase decision. In case the lighting products’ perceived quality is high, advertising and promotional campaigns is more likely to be effective. Perceived quality can provide the marketing manager of lighting manufacturer an important basis for product differentiation. Differentiation can be a key competitive advantage. In case a brand is well positioned in HK market with respect to other group of competitors, competitors will have difficult time trying to break the brand loyalty which a pioneer lighting manufacturer may have successfully established over the years. Not all consumers who purchase lighting bulbs are price sensitive. In line with the ability of lighting manufacturers to create a strong brand, the perceived quality advantage of a brand could enable the company to charge a premium price for their lighting products. Also related to the ability of lighting manufacturer to create a strong brand image, it is possible for the lighting company to take advantage of using brand extensions when introducing new product categories in the HK market. Aside from saving more money associated with the advertisement costs, it becomes possible for the new product introduced in the market to sell on its own. For this reason, establishing strong brand equity with respect to perceived product quality will enable the marketing managers to have more competitive advantages as compared to the weaker brands. References Aaker, D. A. (1991). Managing Brand Equity, New York: The Free Press. Gorman, T. (2003). The complete idiots guide to MBA basics. 2nd edition . Alpha. Kim, J., Morris, J., & Swait, J. (2008). Antecedents of true brand loyalty. Journal of Advertising , 37(2):99 - 117. Oliver, R.L. (1997). Satisfaction: A Behavioural Perspective on the Consumer. New York: McGraw-Hill. Yoo, B., Donthu, N., & Lee, S. (2000). An examination of Selected Marketing Mix Elements and Brand Equity. Journal of Academy of Marketing Science , 28:195 - 211. Total Number of Words: 5,005 Read More