Advantages and disadvantages of on-line shopping - Dissertation Example

?Another issue to examine, besides the advantages and disadvantages of on-line shopping verses high street shopping is the issue of branding. This isa necessary issue to examine because branding might also influence if a person shops on-line or shops in the stores. Branding might cause a person to shop on-line because that person is looking for specific brands that might not be available in stores. On the other hand, branding might work to encourage people to shop high street shops, because these shops do a more effective job of branding then do on-line stores. Therefore, it is necessary to examine what branding is. Branding began with the modern age. Modern consumption is also driven by the choices that were being offered in modern society, choices that were not offered in earlier societies, before mass production of goods became the norm (Gabriel & Yang, 1995). This mass production had a side effect as well, one that would influence the post-modern individual’s obsession with labels and designers – branding became essential, as there were so many goods flooding the market, that companies needed to distinguish their goods from the multitude of other goods that were coming into existence. According to Naomi Klein (2000), this led to competitive branding and, ultimately, to the rise of designer labels, such as Calvin Klein and Ralph Lauren (Klein, 2000). Because brands are essentially the same – Coke is not really that much different from Pepsi, Reebok is not much different than Nike, Apples are not appreciably different from PCs – companies must find a way to differentiate themselves from their competitors. Goldman & Papson (1996) argue that this has led to a rather cluttered landscape for the world of advertising, as each brand tries to get a leg up on their competitors by branding themselves as somehow different from the rest. One way is by attacking and counterattacking – such as when MCI named AT&T in their advertisements for friends and family, thereby gaining market share away from AT&T, AT&T went on the defensive, deriding MCI's friends and family program as a “manipulator of personal relations” because the program involved giving MCI a person's information without that person's knowledge. Another way is by showing what a product is not – such as when Pringle's potato chips transposed an image of their light chip with that of a guy eating greasy chips that dripped on his shirt (Goldman & Pappas, 1996). Because brands have a hard time saying that their product is better than the other guys, they instead seek to raise their symbolic image value – LL Bean's flannel shirts may be the same in quality as Wal-Mart's, but the image of wearing an LL Bean's shirt makes the value more than Wal-Mart. It is all about the image that has been carefully cultivated in the advertisements for these brands, where the product and the image coming together is known as a “commodity sign”. This is what is meant when somebody says that one is “paying for the name” (Goldman & Pappas, 1996). Identity became a construct of consumption, in that people, both men and women, started using consumption not as a way to express one's identity, but to construct it - “brands are how we figure out who we are.”(Kacen, 2000). This reflects the fluidity of an individual's identity, and reflects that gender identity is also a fluid concept, as opposed to a fixed attribute (Kacen, 2000). Part of this was made possible by the Nikes and Tommy Hilfigers of the world who are not just selling products, but the image that their brand connotes. Therefore, mere manufacturing has been replaced by marketing (Klein, 2000). Price discounting may to differentiate one’s brand from other brands because of the problem of brand similarity. There is some indication that price discounting may actually hurt a store’s image and the brand image, and that it might not build sales (Grewal et al., 1998). Therefore, whether or not it actually works depends on other factors. One factor is known as the perceived discount. According to Gupta & Cooper (1992), retailers will commonly inflate the price of the item before “discounting” it, which distorts the perception of the savings that are offered. This may lead to problems with price discounting, as the public becomes aware that they are being deceived, which would ultimately backfire on the retailer. Gupta & Cooper states that a customer will perceive deception in this regard more if the retailer is less reputable than another retailer. So, a high-end store will be more successful in discounting items, as individuals will be less suspicious that they are being deceived, then would a low-end store (Gupta & Cooper, 1992, p. 402). So, a discount at Saks Fifth Avenue would carry more weight then a discount offered at JC Penney. Price discounting is also more effective when used on a name brand then a store brand. Gupta & Cooper (1992) states that if a brand name has a high amount of equity, this brand is generally not harmed by discounting. In other words, a consumer will not think that a Kate Spade purse is of inferior quality just because it happens to be on sale. On the other hand, a discounted store brand is more likely to be perceived to be less credible then the discounted name brand. Therefore, consumers are more likely to be suspicious of a discounted store brand, and believe that they are not getting a good deal, then when they are dealing with a discounted name brand (Gupta & Cooper, 1992, p. 403). There are other factors which affect how a consumer perceives the value of the discount. According to Blattberg et al. (1995), there are a number of empirical generalizations which can be applied to the act of price discounting. Among these is that, if a certain brand discounts its products frequently, then this backfires, as it lowers the consumer’s reference price for the brand. Correspondingly, if the brand discounts frequently, then the height of the deal spike is lowered (Blattberg et al., 1995). Marketing is another issue that should be examined in determining why somebody might prefer on-line shopping over High Street shopping. The Four Ps of marketing might be a factor in whether a person decides to shop on-line or shop in high street stores. The four Ps are product, price, promotion and place (Vargo & Lusch, 2004, p. 1). These are all factors that might influence a person to choose one product over another, and one mode of shopping over another. As for the product part of the four Ps, it is important for one product to differentiate itself from another product, and this is where branding comes in. Price is self-explanatory, and if a consumer can get a better price on-line then in high street stores, or vice-versa, this would be an advantage for one of the other. Promotion is the third marketing P, and this would be another factor, in that the promotion that an on-line site uses might appeal to certain groups of people – such as promotions on social networking sites might reach younger people as opposed to senior citizens, or promotions shown during certain older-skewing shows might appeal to older people, etc. Place is the fourth P, and this refers to how the product is connected with the customer and how accessible it is. This is an important factor, as people might choose brick and mortar stores because the product is readily accessible, as opposed to having to wait for products from on-line stores. Thus, the research talks about the importance of branding and marketing, and how a brand can be disrupted by price wars and price discounting. It is therefore important to understand the mechanisms of branding and marketing, and how these two interact and how individuals react to each. According to the research, brands have to look at credibility as a major issue when discounting their brands. If a customer suspects that the original price was inflated, then the customer will put less credibility on the discount. This is more pronounced with lesser known brands and brands with lesser equity then with better known brands with higher brand equity. Moreover, it is clear from the research that a brand cannot do multiple discounts, because that destroys brand equity. It destroys brand equity by lowering the value of brand, as the customer gets used to the brand being discounted, so the discount value of the brand essentially becomes the price point that the customer expects. What the research does not talk about, however, is exactly how price discounting works when one compares on-line shopping to High Street shopping. In particular, there should be research that investigates how much more likely an individual is to buy on-line verses buying in brick and mortar store if one discounts products more than another. If the same brand is available on-line discounted from High Street, will an individual buy the product on-line, or will they still buy the product from High Street, or vice-versa? What effect does price discounting have upon a person's decision to buy one brand or another? When is the price discounting effective in motivating a person to buy one brand over another brand, and how does this interact with the tension between on-line and High Street? For instance, if a brand repeatedly offers an item on-line for a discount, does this harm the brand the same as if High Street is offering this same item for a discount? The research indicates that repeatedly offering a discount on an item in the store will hurt the brand, is it the same with doing this on-line? The research indicates that high-end brands will be hurt less by repeatedly discounting items in the store – is this true, and is it the same for the on-line discounts? And how does all of this interact with the marketing of the items – does marketing influence people buying one brands over another, regardless of whether or not there is a discount for this brand? In other words, how effective is marketing on-line - does it negate the need for price discounting for lesser-known brands? How effective is regular marketing for High Street stores? Research Rationale Research Questions 1. What effect does price discounting have on brand equity? 2. If a product is available on-line, discounted from a brick and mortar store, are individuals more motivated to buy this product on-line? 3. If a brand is repeatedly offered on-line for a discount, does this affect its brand equity, the same as if the High Street stores repeatedly offered it on-line? 4. How does the quality of the brand affect the brand discounting with regards to on-line or High Street stores? 5. To what extent does marketing affect the above questions? Aims & Objectives 1. Aims – to fill in the gaps in the literature regarding this question. To understand how brand discounting works with regards to on-line and High Street stores. 2. Objectives – to provide retailers with information about discounting, and how brand discounting affects them with regards to their on-line stores or their High Street stores. Also, to provide retailers with marketing ideas to overcome any kind of problems that may be encountered with brand discounting, as well as provide marketing ideas that may substitute for brand discounting, in that they may not have to discount their brands if they market their products correctly. Methodology There are many types of research, and this submission will examine each type of research, their flaws and why they are right or not right for this particular project. The first type of research that will be examined will be that of primary research, which consists of qualitative and quantitative research. While these types of research have much in common, in that data must be collected by the researcher from individual participants, they are also different in many different ways. Where quantitative research consists of mere data collecting, and marked by detachment from research participants and the viewing of research with a mechanical eye, qualitative research seeks to build a relationship with the participants of the studied phenomenon. (Langelett, 2003, p. 7). The researcher accomplishes this by making friends with his or her subjects by spending time with them and gaining their trust. The questions in qualitative research are open-ended, and geared towards the focus of the inquiry, which is set by the researcher. The raw data that is collected from the qualitative study is then analysed for patterns. Once a pattern is discerned, more data is collected to flesh out these patterns, while reconfirming the earlier themes and topics. (Langelett, 2003, p. 8). There are various kinds of qualitative research. One is case study research, and this is a type of research in which one person, group or event is analysed. Other kinds of qualitative research include grounded theory, where the theory develops during the data collection process, or is built by, and grounded in, the data, and is used to develop new theories; phenomenology, in which “the researcher identifies the essence of human experiences concerning a phenomenon as described in a study” (Hossain, 2008, p. 10); ethnography, which is grounded in cultural anthropology, and describes a culture or way of life in the eyes of a native, and seeks to understand the cultural patterns and perspectives of that culture in a natural setting; and narrative, which is examined fully in this paper. (Hossain, 2008, p. 10). Data collection in qualitative research can take the form of focus groups, which brings together a small group to talk about an area; direct observation, in which the researcher observes the subjects in a natural setting by becoming a part of the setting, such as becoming the part of a staff who performs normal duties around the subjects; and in-depth interviews, in which subjects are interviewed individually, with the aim of producing broad ranging, penetrating issues, without preset questions. (Hossain, 2008, p. 11). Qualitative research seeks to build a relationship with the participants of the studied phenomenon. (Langelett, 2003, p. 7). The ultimate goal of qualitative research is to provide depth to a given subject, as opposed to breadth. This is accomplished by acquiring in-depth and intimate information from a small group of participants. An equally important goal is to the how and the why about how people think, behave and make meaning, as opposed to simple observation about these same factors. (Ambert et al., 1995, p. 880). One of the advantages of qualitative research is its function in discovering phenomena, which is in opposition to simply confirming an already existing phenomena. The qualitative researcher gathers new information that may reflect new behaviours and practices, new ways of structuring or organizing socially, and new ways of thinking. Thus, existing ideas may be modified, redirected or added to, and, in the process, new ideas are found. (Ambert et al., 1995, p. 880). It also provides investigative depth to a particular problem or phenomenon, by delving below the surface of current awareness to find matters and issues that only are revealed by careful scrutiny. (Shank & Villella, 2004, p. 48). Because qualitative research is good at discovering new phenomenon, it is the most appropriate type of research for this particular project. The reason for this is because the literature about this topic does not specifically address the effect of price discounting of brands with regards to on-line verses High Street. Therefore, it is important that qualitative research is used so that the reasons how individuals are affected with regards to brand discounting on-line verses brand discounting with High Street. There might be alternative reasons why specific groups of people have preferences, and these reasons have not yet been discovered by previous researchers. The data collection that will be used will be surveys, with some open-ended questions. These are appropriate, because it allows individuals to respond to open-ended questions with their own ideas. The human participants will be two different focus groups of 10 individuals. The first focus group will be 5 women and 5 men ages 65-75. The second focus group will be 5 women and 5 men ages 15-25. The groups will be found by issuing random questionnaires at malls, with the request that the person fill them out. The participants will not be paid or get any kind of compensation, so it is hoped that there will be enough individuals who will want to participate in this study because they are opinionated and like to have their voices heard, and this is the kind of participant that this study will seek out. I will analyze the data using coded utterances. This will be helpful, as it will allow me to categorize the different utterances that the participants give, which will be helpful in ascertaining patterns of the responses. For instance, responses that are geared towards security issues can be categorized as such, responses geared towards reliability issues the same, etc. Proposed Project Plan Including Research Ethics The timeline for this project is two months. The reason why this timeline is two months is because there needs to be time to hand out the initial questionnaires, which will not be used in the data results, but, rather, will be used to identify individuals who are interested in being in this focus group. The problems that might be encountered is On the ethical considerations reading human subjects, the study is guided by the respect that is inherent in dealing with human participants. Of primordial importance is the continued recognition and respect for the dignity, autonomy, freedom and humanity of the participants (Golafshani, 2003, p. 599). This is clearly manifested through (a) asking permission from the participants (b) respecting the privacy and individuality of the participants via allowing them to lead the discourse and not drawing from them experiences and stories that they are not comfortable in sharing (c) by showing to them the notes of the interview so that they themselves can check the validity of the data (Probert, 2007, p. 66; Golafshani, 2003, p. 597). Moreover, the participants were guaranteed that their anonymity will be respected all throughout the research. The reason behind this was due to the sensitivity of the topic discussed. As such, prior to the actual conduct of the interviews, the consent of the participants was first secured and the time and date of the interview were set at the convenience of the participants. Furthermore, all the participants were briefed regarding the purpose of the research, how it is to be conducted and they were told that if they were not comfortable with the procedures they were free to inform the researcher and if necessary they could withdraw from the research anytime (Creswell, 2007, p. 245). 1. Voluntary Informed Consent All participants will be involved in the informed consent process which is made up of three dimensions: 1) all information was disclosed to the participants; 2) I will be sure to ascertain that they understand what has been disclosed to them, and 3) ensuring that they are voluntarily and that they do not have to agree to participant in the research if they would prefer not to. The disclosure of information will however be sufficient enough ‘such that persons can decide whether they wish to participate in the furthering of knowledge’ (National Commission 1979, 11). 2. Anonymity and Confidentiality This plays a central role in gaining willing participants to take part in this piece of research. As a result of this my research design follows that of the “Belmont Report of Respect for Persons,” which asserts that the participants should be treated autonomously to allow them to “make the deliberate decisions about whether to participate in the research” (Cozby, 2004 p. 39). 3. Right to Withdraw The participants, in response to the Belmont report’s findings signed a informed consent form that provided them with information and giving them the opportunity to withdraw from participating in the study at any time. Furthermore, information that was included on the consent form stated that they were giving me permission to record the focus group and interview audibly which had to meet section 8.03 of the Ethical Principle of Psychologist and Code of Conduct, better known as the Ethics Code requirement to audibly record (Cozby, 2004). Bibliography Cozby, P. 2004. Methods III: Behavioral Research. New York: McGraw-Hill. Creswell, J. 2007. Qualitative research designs. The Counseling Psychologist, vol. 35, no. 2: pp. 236-264. Golfshani, N. 2003. Understanding reliability and validity in qualitative research. The Qualitative Report, vol. 8, no. 4: pp. 597-607. National Commission for the Protection of Human Subjects of Biomedical and Behavioral Research. 1979. Regulations and ethical guidelines. Web accessed 19 September 2011. Probert, N., Malik, A. & Lovell, M. 2007. Surgery for fractured neck of femur – are patients adequately consented? Annual Royal College of Surgery, vol. 89, no. 1: pp. 66-69. Ambert, A., Adler, P., Adler, P. &Dentzner, D. (1995) “Understanding and Evaluating Qualitative Research” Journal of Marriage and the Family 57.4: 879-893. Hossain, D. 2008, “Qualitative Research Process,” pp. 1-15, web accessed 18 September 2011, available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1287238 Langelett, G. 2003, The Qualitative Tradition: A Complimentary Paradigm for Research in Economic Education, web accessed 18 September 2011, available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=377000 Vargo, S. & Lusch, R. (2004) Evolving to a new dominant logic for marketing. Journal of Marketing, vol. 68: pp. 1-17. Gabriel,Y. and Lang,T. (1995) The Unmanageable Consumer, Sage: London Goldman, Robert & Stephen Papson (1996). Sign Wars: The Cluttered Landscape of Advertising. New York, NY: Guilford Press. Klein, Naomi. No Logo: No Space, No Choice, No Jobs. New York, NY: Picador USA, 2000. Grewel, D., Krishnan, R., Baker, J., Borin, N. (1998) The effect of store name, brand name and price discounts on consumers’ evaluations and purchase intentions. Available at: http://digitalcommons.calpoly.edu/cgi/viewcontent.cgi?article=1010&context=mkt_fac&sei-redir=1&referer=http%3A%2F%2Fwww.google.com%2Furl%3Fsa%3Dt%26source%3Dweb%26cd%3D1%26sqi%3D2%26ved%3D0CDAQFjAA%26url%3Dhttp%253A%252F%252Fdigitalcommons.calpoly.edu%252Fcgi%252Fviewcontent.cgi%253Farticle%253D1010%2526context%253Dmkt_fac%26rct%3Dj%26q%3Dthe%2520effect%2520of%2520store%2520name%2520brand%2520name%2520and%2520price%2520discounts%26ei%3D0r-STuPxDMW5tgfZp9ihDA%26usg%3DAFQjCNHzseY4mjeMhl1BVXExeC3CkzW5qA#search=%22effect%20store%20name%20brand%20name%20price%20discounts%22 Gupta, S. & Cooper, L. (1992) The discounting of discounts and promotion thresholds. Journal of Consumer Research, 19: 401-411. Read More