How Online Retailing Satisfies the Needs of Hedonic and Utilitarian Customers - Essay Example

? How Online Retailing Satisfy The Needs Of Hedonic And Utilitarian s? Hedonic & utilitarian consumption Research reveals that consumers are often faced with various types of choices between hedonic and utilitarian alternatives. The choices are recognized to be driven partly by emotional desires. The kind of choices made is identified as representing domains within consumer decision making. However, theory on behavioral decision focuses largely on cognitive aspects of decision making without much focus on emotional perspective. According to standard economic theory, consumers are known for maximization of utility driven by cognitive values. However, emotional desires can at times direct functional motives in the process of choosing products. Goods are often chosen and consumed at times for purposes of pleasure hence making consumers achieve some instrumental purpose. Such are categorized as; luxuries and necessities, hedonic and utilitarian goods, affect-rich and affect-poor products. The major distinction used on goods is based on necessity and luxury items, where necessary items are considered essential for minimum standard of living. Conversely, luxurious items focus on providing condition of abundance, pleasure as well as comfort. Hedonic versus utilitarian goods Luxuries according to researchers are consumed primarily to satisfy hedonic pleasure contrary to necessities which are consumed for the purposes of providing utilitarian goals. Hedonic goods provide consumers with multisensory dimensions such as fun, pleasure as well as excitement. On the other hand, utilitarian goods are considered instrumental making their purchase motivated by product’s functional aspects. These include products such as Kitchen appliances, personal computers and home security systems. Hedonic and utilitarian consumption are considered discretionary hence their differences based on degree and consumer’s perception. Products differ in the degree of hedonic and utilitarian attributes, making most evaluations on consumption to be based on the extent to which various alternatives satisfy utilitarian and hedonic goals. When purchasing products, consumers usually evaluate functional and hedonic features i.e. durability and design respectively. Purposes which an item serves, either for usage or consumption is central in determining whether the item is primarily hedonic or utilitarian. For instance purchasing a cell phone for emergency purposes qualifies it to be called utilitarian product, and is contrary when the same cell phone is purchased for pleasure of chatting with friends. Purchasing the cell phone for pleasure makes it a hedonic product. At the same time goods consumed for hedonic purposes are majorly inclined towards affecting the rich than those consumed for utilitarian purposes. The various distinctions have important implications on the way consumers make decisions based on particular context. The various distinctions as applied do not give any implications of good or bad, however consumer’s choice between the groups is majorly based on whether justification can be drawn from preference for items otherwise referred to as hedonic. The need for justification can either be increased or decreased depending on response modes. There are various examples where evaluation on preferences gives reversible results depending on whether evaluation process takes separate or joint process. According to Okada (2005), customers frequently visiting restaurants preferred hedonic desert in situations where only single kind of desert was offered. However, in cases where there was variety, customers preferred more utilitarian dessert. Nature of choices made in such instances was based on the kind of difficulty encountered in justifying a hedonic option. Discretionary nature of various hedonic items increases chances of customers making a choice to purchase it. There is difficulty involved in making choices between utilitarian and hedonic goods since hedonic products appear more popular on prizes while utilitarian’s popularity is on purchases (O'Curry and Strahilevitz 2001). There is the issue on passive reception and active purchasing of same rewards based on justification. Hedonic products can be made attractive through marketing strategies, hence providing necessary attractive qualities. At the same time, research revealed that higher requirements of effort in frequency programs led to shifting on people’s preferences towards, hence preferred luxury to necessity. The nature of work involved towards obtaining products creates an impression that hard work is entitled to luxury rewards. However, in cases where hedonic products are attached to charitable donations, consumer preferences usually seem to shift towards them. Products attached to charity donations are easily used in promoting frivolous luxuries compared to practical necessities. Khan and Dhar (2005) practically proved the fact that preferences on hedonic products increased especially after charitable act. They based their explanation on the fact that charitable inclinations attach positive attributes which easily attracts the public towards such products. However, there can also be negative experiences on the same, especially on the event that goods used for charitable acts are attributed to certain violations. This shows importance of positive self attributions in the process of selling such products to consumers. According to research by Kahneman et al. (2000), consumers usually show more range insensitivity in the process of determining goods for high-end and low-end consumers. Products recognized as affecting only the rich are known to evoke valuation through distinctive feelings while on the other hand, products affecting more of the poor are valued through calculation. Relying on sensible feelings makes consumers be sensitive on value than variations in range. However, those relying on calculations are basically sensitive towards variations in range. Majority of consumers tend not to pay much attention on prices in the process of purchasing goods with hedonic characteristics as opposed to products’ functionality. Consumers are not usually sensitive to saving cash when it comes to consumption of luxurious goods especially based on decisions. Infrequent consumption of hedonic items makes people be more willing to purchase such items. Donations of hedonic goods are normally accompanied with low sensitivity as compared to frivolous products. How online retailings satisfy the needs of hedonic and utilitarian customers Online retail stores enable marketers to satisfy entire range of customers with different products and services within one-stop shop. Marketing mix differentiation involves provision of marketing mix that is distinct and better than what competitors offer. It includes fine-tuning all the elements of marketing mix to specific needs for the purposes of satisfying distinctive target market. The process of differentiation in a convenience store can be ensured through product pricing, packaging and features. However, differentiation within such stores is basically focused on services owing to similarity in standardized product and low prices irrespective of the location. The service determines to a larger extent the willingness of customers to switch from one place to another. Thus differentiation plays a key role in building of relationships between brand and consumers. Most consumers currently turn to internet for various shopping needs. This is referred to as online shopping. This concept has contributed towards opening of e-business opportunities. Consumers are capable of accessing and purchasing hedonic products due to their distinctive nature as displayed online (Keegan and Green, 2002). The process is of great benefit to consumers hedonic goods based on costs, since they no longer need to scramble for parking spaces at shopping malls. However, several barriers accompany online shopping which include security of search engines, privacy as well as trust. The online trend has brought complete changes within businesses based on distribution channels used. According to Keegan and Green (2002), international marketing involves processes where companies define their goals and objectives based on extensive investments on resources within various market segments. In such cases companies focus on effective marketing strategies capable of utilizing current technological wave brought by internet. Research has been done on online brand trust based on consumer interests within textile products market. Business online transactions can only be complete in the event that there is existing trust between customers and company’s brand. This makes online brand trust a very important aspect since it assist in creation of favorable attitude towards suppliers. It also helps in prolonging exchange relationships and at the same time increases competitiveness making trustworthy brands benefit more. This is much related to online trust which presents important model in business-to-business transactions. Many challenges are encountered in the process of establishing and maintaining online trust. Majority of the companies do not trade online with un-trustworthy clients. In a similar case online consumers feel reluctant to trade online since they do not trust most web providers with their personal information. This calls for online brands to establish some level of trust with customers for the purposes of engineering business processes (Xiling, 2005). Trust is paramount for maintenance of customers within electronic market. Steady growth experienced in the number of online users creates some optimism within business field concerning consumer purchasing power. Internet presents a large audience which makes every company to take into account issues based on consumer perception on online brand trust (Goodwin, 1996). Online retails emphasizes on nature of branding attached on hedonic goods this is used to reinforce attraction consumer attaches to specified product. This assists in establishment of long-term relationship based on the benefits and qualities obtained in delivery processes. Brand trust on hedonic goods enables easier development of consumer’s commitment towards such online products as variety of shoes and clothing. Retail products brand extensions provide consumers with variety of options making it possible for customers to share information concerning their preferences, tastes and behaviors (Ha, 2004). Reliability is one of the first dimensions of brand trust, since it involves technical capabilities considered in the process of assessing extent to which the brand can satisfy consumer needs. Then there is attributes of good intentions based on consumer interests and welfare and in cases of uncertainties with range of products offered. Presence of value should be felt by consumers on the range of products offered based on development process, line of sales used and even in nature of advertisement. Despite many advantages, online branding of products operates in relation to some crucial purchase related factors which determines ultimate outcome. These include; status of security, privacy on personal details, and nature of information conveyed as well as past experiences. Word-of-mouth is one of the most known purchase-related factors used in building consumer trust. At the same time, factors affecting online branding of hedonic products can be categorized as web-site and consumer factors which apparently are related to various components of trust such as credibility of website and quality based on emotional comfort (Ha, 2004). Drivers of online branding on hedonic products General expectancy on the products helps in reinforcing belief on their brand qualities which makes the website consistent, competent and responsible for every posting on its wall. Dispositional attributes determines consumers’ intentions and behavior towards product quality which makes it mandatory for companies to identify various attributions which forms d trust. The idea of trust and attractiveness assists in bridging the gap between determinants and consumer reactions towards product attributes. Website related factors influencing consumer online brand trust includes such processes as navigation across websites, dealing with privacy information, signing of trust seals and improved presentation. On the contrary, consumer factors include self-confidence, shopping experiences through the internet, level of entertainment as well as past behaviors. Low level of online purchases can be attributed to lack of trust between consumers and companies. Dayal et al (1999), focuses on the security issues, merchant legitimacy as well as fulfillment as some of the most important factors influencing online trust. At the same time Shankar et al. (2002), made distinctions based on broad conceptual framework of online trust which incorporates such constructs as; web site characteristics and user characteristics. Then there is inclusion of crucial characteristics such as application of appropriate online medium, level of consumer confidence towards the firm, various brand qualities based on firm’s size, performance within the market as well as communication mix. External and internal factors influencing Retail online branding on hedonic products There are a number of factors both external and internal of which external included nature of products and culture within target regions. Internal factors comprises of consumer characteristics, experiences, perceptions, website qualities and legislations. The nature of consumer’s perceived risk may affect brand trust since it originates from economic and performance risks. Customers are capable of anticipating the kind of monetary loss they would incur in the process of transacting purchases online. At times they risk in terms of performances whereby the kind of products shown in Company’s website do not meet their expectations as shown in the website pictures. Such perceived risk affects negatively the level of trust on particular brands (Salo and Karjaluoto, 2007). Online branding has got highly visible nature of advertising which plays major role in the development of company’s brand image. The kind of messages used, including consumer comments conveys strong messages towards clothes, shoes and handbags based on functional abilities while at the same time brands accompanied by aesthetic meaningful values portrays some level of relevance to online purchasers (Hofmeyr, 2001). Evidently, there are pop-up adverts within the website accompanying products. This helps in reinforcing brand image since communication through company websites influences strong brand memories which ultimately can be linked to consumers’ past experiences with the products (Hofmeyr, 2001). Such memories passes through the mind in line with real structuring which enables real interactions between consumers and products based on expectation levels. Online branding is basically action oriented with more appealing decorations of which at times can deceive online buyers. Level of brand trust determines how fast brand images fade from minds of consumers since it is dependent on competitive nature and functions of other related products. Most consumers are normally inclined towards nature of information accompanying products inclusive of price tags (Hofmeyr, 2001). Strategies implemented on the website seem important since the target market is defined based on the shoe and clothes sizes. This should basically be based upon identification of relevant market segments based on age, preferences and social classes. Planning done concerning various marketing strategies is basically aimed at improving level of organizational performance which would ultimately yields higher returns. Process of organizing brands used in e-business involves great allocation of resources for the purposes of attracting grater traffic based on satisfied needs. In the case of product brands, the nature of plan used on the site assists only in the identification and fulfilment of various consumer desires. In the process of posting customer comments alongside brands, creates strong desire within other buyers willing to try same products. Such comments create referral opportunities since they are always convincing based on the rating, which at times reflects true level of consumer satisfaction based on quality and expectations. There are many competitors within the textile industry, making each company to develop unique online strategies capable of driving higher traffic to their websites hence easily winning consumer trust. The kind of shoes and clothes displayed should enable consumers identify level of safety required based on weather conditions. However, the nature of display incorporates all the four P’s of marketing which includes identification of various prices and discounts attached suitable buyers and target markets. Proper utilization of marketing elements leads to realization of strong consumer base within the e-market. The level of online brand trust reveals the level of achievement attained by the current branding technique used by the company. Availability of online communities has provided consumers with opportunities of sharing experiences, opinions as well as various dimensions of knowledge with others. Online communities appear in-form of internet forums, bulletin boards as well as newsgroups. Such instances have enabled participation between the media and audiences, since consumers have the rights of creating media contents through texts, uploading of videos and pictures of products and services available in the market. Large percentage of Word of Mouth communication takes place offline, however, online communication is on the growing trend since consumers currently consider internet to be a reliable source of information. Online communications enable consumers to create fully formed impressions of products, services and people using both written and pictorial content. Theory of social comparison and that of reasoned action are used to elaborately explain effects of eWOM and the extent to which it influences purchase intentions of various designer products. The following diagram shows a frame work used in identifying blog opinion leaders within the social sites. There has been significant advancement in technology and enhanced availability of online resources in the last few years, allowing for lower costs on public relations; communication and advertising. Thus many companies are now finding novel ways to enhance their intellectual properties and sale of products at lesser costs. A major advantage of implementing and utilizing Instagrams within marketing network is for the purposes of achieving synergy, whereby the combined knowledge of all employees proves to be greater than individual knowledge levels of different employees. Specific programs providing marketing and communication skills development opportunities are known to have succeeded in the provision of employment within Thai’s fashion apparel industry. In comparison, countries of Latin America, such as Honduras, Peru, Dominican Republic, Colombia, Chile and Argentina, the Joven programs that were created to address employment problems faced by young people resulted in the creation of positive economic outcomes for them. The same results were produced in the US, primarily because training and vocational education was very helpful in widening opportunities, particularly for young females. This was because women are generally reluctant to join programs providing training and skills enhancement in male dominated areas such as technological disciplines. Instead, when provided opportunities to train in female dominated areas such as sewing, beauty care and secretarial work, many women are found to be forthcoming. However, such initiatives can at best be initiated by the government in fulfilling social duties by making citizens self dependent and appropriately qualified to do well paid jobs. These initiatives by the government are welcomed since they remove the actual as well as perceived discrimination in the labour markets. On the other hand, the initiatives of employers in skills enhancement through creation and execution of such programs goes a long way in achieving better results for all including those that believe they are being discriminated against. This is because they get the required opportunities to hone their capabilities and perform better while advancing their careers (Adams, 2011). According to Adams (2011), people in the lower economic strata tend to demonstrate higher returns on investments since they intend to have higher purchasing power in comparison with people belonging to higher income levels. In other words, when fashion apparel industry provides for training and communication skills development, boost within economic cycles will be experienced based higher level of on-line purchases. This also presents a boost to the economy in terms of growth and higher standards of living as more disposable income come in the hands of the lower classes. Adams (2011) has cited research outcomes in which students pursuing vocational courses were found to contribute much more to the economy than students pursuing purely academic courses, meaning that there is a strong case for the government to introduce more skills development courses. The author concluded that the cost benefit ratio for skills enhancement programs was much higher because increased demand for such courses was directly associated with increasing demand for high skills. In different countries, there are diverse communication skills development programs, but their fundamental goal remains the same in terms of creating a skilled working force with advanced knowledge and experience achieved through a particular period of training or by participating in several months’ courses or diplomas. The trained employees can then get higher ranking by way of salaries and benefits than other workers. It is apparent that enhanced financial benefits of the trained employee would facilitate them in enjoying higher standard of living in the concurrent recessionary economy. In addition, the improved skills of the employees would positively generate smooth and timely production than before, while workers efficiency would improve at all levels of the national economy. Moreover, the flows of foreign direct investment would increase in that country and the promotion of the trained employees at superior levels would generate new vacancies at entry level that ultimately create new employment opportunities in the economy. Conclusion Well-designed company websites usually provides potential capabilities in conveying timely information to online purchasers. This provides the intended satisfaction levels hence reinforcing brand online trust. Quality information helps in increasing consumer knowledge and awareness concerning online products making it easier for them to make concrete decisions concerning brands. At the same time online brand trust is based on product reputation whereby consumer’s level of trust is based upon level of brand reputation within the market. However, understanding consumer perceptions based on online brand trust proves a little difficult task capable of creating challenging situations to retailers hence the need for effective e-marketing strategies. 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