Understanding the Purchasing Environment - Case Study Example

Labeled discussion Name Institution Tutor Date Labeled discussion This research was done to test the hypothesis mentioned. Out of 12 hypotheses, six hypotheses were accepted. This research was done to test the hypothesis H01 that cultural value is positively related to the loyalty of gold buying behavior. The findings found out that this hypothesis is supported. Several communities with different cultures use gold to maintain their identity. Huma et al. (2013) in their research found out that in India, the expatriates use gold artifacts to sustain their culture and show that they have not diverged from their original culture. The research further illustrates that the expatriates valued gold due to the link it has to their cultural community. Then it can be seen that gold possession constitute culture and the role it has in various societal rituals sustains the culture. According Douglas and Craig (2006), these cultural rituals include the customer behavior as well as other occasions such as marriages, religious holidays and festive seasons. However, gold does not have a similar status in other cultures other than the Indian culture. In other cultures, gold does not have a considerate value as inculcated in the cross- generational relationships and tradition. Thus, generalization to other consumer societies and cultures is limited without accuracy and depth of comparison across various situations and contexts (Douglas and Craig, 2006). The relationship of gold purchasing within the culture and the consumers behavior suggests that gold buying is a ritualistic activity. Gold buying is social actions that engage various individuals with consumption. Apparently, gold reinforces cultural values through the meanings it brings to the society. The gold purchase is not limited by price and other related issues due to its important role in the society. This research set out to test hypothesis H02, which states that economic Value is related to the product loyalty of gold buying behavior. The findings of this study show that the hypothesis is supported. Most individuals purchase gold as a means of investment. They would rather buy gold when the prices are low and sell it when the price goes up. However, most individuals purchase gold at a larger quantity when their prices go down, but this demand is not reduced when the gold prices increase particularly in Cochin. As to this, it is clear that gold is price sensitive at a low cost but it is also insensitive to the increase in prices. This notion possesses a lot of challenge to various authorities formulating various policies curbing gold consumption (CPPR, 2013). A study conducted by CPPR (2013) in Delhi and Cochin shows that most individuals are of the opinion that the government needs to reduce the import duty on gold since gold is an essential product for making jewelry and for investment. Through this, the consumers believe that the gold prices are likely to go down and make it easy for the lower and middle-class consumers to obtain gold. Most individuals in countries like India attach more value to Gold due to various purposes it offers in their societies. As to this, the prices should be reduced at all cost to improve the consumers’ loyalty. From the study, it can be concluded that most individuals in Delhi and Cochin take gold to be a significant investment. Economic value is the primary determining factor for the consumers while deciding to buy gold. This research set out to test hypothesis H03, which states that Purchasing Environment is positively related to the product loyalty of gold buying behavior. The findings of this study support the hypothesis. The environment of purchase is a very significant factor in making a purchase of products. Individuals need easy access to the sales stores for them to make secure purchases. Marketing professionals should take into consideration various physical factors such as the store’s layout and design when deciding for gold stores. Presumably, the more one wanders around a store, the more they spend (Chartered Institute of Purchasing & Supply, 2010). Chartered Institute of Purchasing and Supply (2010) disclose that Customers’ loyalty is also influenced by the store location. The gold store should be located in a free and direct environment where individuals can have easy access. This makes individuals make easy gold purchases and boost their morale. Other environmental factors that can be controlled by the stores such as loud music, temperature, lighting and smells should be controlled within the gold stores. Free and conducive environment makes individuals make purchases freely. A research has found out that strategic fragrance makes customers stay long in the stores, buy more products and leave with a positive impression of the store, products, and services. There exist other environmental factors such as adverse weather conditions. This affects sale and purchase of gold. For instance, during the rainy season, individuals find it difficult and expensive to move to the gold stores. The gold stores should in turn improve the consumers’ loyalty by providing discounts to the customers. This enables them to save on transport cost and boost their purchase morale. Consequently, crowding in the sales stores also poses a challenge to most consumers. When one leaves a store without purchasing gold just because it was overcrowded. Retailers should take it a responsibility to control overcrowding within their premises (Chartered Institute of Purchasing & Supply, 2010). Thus, purchasing environment is positively related to the loyalty of gold buying behavior. This research set out to test hypothesis H04 which states that Consumer’s gender moderates the relationship between cultural value of gold and product loyalty of gold buying behavior. This study supports the above hypothesis. Indian women buy gold at given times of events or happenings such as weddings, religious events and holidays. A study conducted showed that the Indian women purchased gold during important occasions such as weddings. It is a must for all the women to have gold artifact during wedding ceremony. In addition, the study further found out that the gold purchases of women depended on their financial budget. Some women claimed that they buy gold once and use it for various occasions. The next purchase depends on their mood and their visit to the gold stores (Huma et al., 2013). Study conducted by CPPR (2013) found out that, most women in India claim that neither do sales period influence their purchasing behavior, nor Dubai Shopping Festival occasions. They claim that they buy gold before visiting their relatives over the festive vacations. This shows that the cultural events that are celebrated within the society have a greater significance and that gold forms an integral part of the societal traditions and customs. Alternatively, the women do not go around buying gold when festive season are approaching when promotions are all over. Thus, women are mostly involved in gold purchase to celebrate the cultural events. They buy for other women jewelry made of gold during wedding ceremonies. Men also buy gold for specific cultural values. For instance, the study reveals that men buy gold for future investments. Their gold purchase is partly related with the investment purpose. They purchase gold items to pass to their children as security. Consequently, they purchase gold is also purchased by men at a personal level for religious purposes. This is because the Hindu festivals are always linked to the worshiping of Gods. Men’s purchase behavior is different with that of women. Thus, gender moderates the relationship between cultural value of gold and product loyalty of gold buying behavior (Huma et al., 2013). The research set out to test hypothesis H05 that states that Consumer’s gender whether it was female or male does not moderate the relationship between the economic value of gold and product loyalty of gold buying behavior. This study does not support the above hypothesis. Customers have different attachments to the value of gold depending on their gender. . A study conducted showed that the Indian women purchased gold during important occasions such as weddings. It is a must for all the women to have gold artifact during wedding ceremony. In addition, the study further found out that the gold purchases of women depended on their financial budget. Some women claimed that they buy gold once and use it for various occasions. The next purchase depends on their mood and their visit to the gold stores. (CPPR, 2013). Apparently, most male customers purchase gold as a means of investment. They would rather buy gold when the prices are low and sell it when the price goes up. The government regulates the import duty on gold since gold is an essential product for making jewelry and for investment. Through this, the consumers believe that the gold prices are likely to go down and make it easy for the lower and middle-class consumers to obtain gold. Most individuals in countries like India attach more value to Gold due to various purposes it offers in their societies (CPPR, 2013). As to this, the prices should be reduced at all cost to improve the consumers’ loyalty. The economic value of gold essentially in the U.A.E has always been influenced by external factors; such as the global economy, politics and the sentiments of the buyers (Maceda, 2014). There is a relationship between the economic value of gold and product loyalty in the sense that shifts in the economic value of gold may actually affect product loyalty either positively or negatively depending on the economic status of the buyer. The concept of gender moderates this relationship. Therefore, the hypothesis is not surported. This research set out to test hypothesis H06 that states that Consumer’s gender whether it was female or male moderates the relationship between purchasing environment and product loyalty of gold buying behavior. This study does not support the above hypothesis. The customers need a sustainable and conducive environment for purchasing gold. The gender of the consumer cannot moderate the relationship between purchasing environment and the product loyalty. Being a male or a female cannot make a customer purchase in a poorly structured gold store. The retailers should structure their stores in a way that can win the hearts of more customers regardless of their gender. Moreover, overcrowding in the purchasing stores also influence the customer’s loyalty despite their gender. Both males and females find it difficult to shop in a crowded environment. Their gender cannot make they purchase in stores that are heavily crowded. They need time to bargain and purchase the right quantity of gold. Both the genders need a surrounding free from excessive noise from music and adequate lighting. The stores should also be located in open places where both the genders can easily access. Hidden stores cannot be accessed by both the genders lowering the loyalty and the morale of the consumers. The purchasing environment is very significant to all the genders. There is no gender that can accept to shop in a poorly structured purchasing environment. For the retailers to increase the loyalty of the consumers, they should provide a sustainable purchasing environment that can be easily accessed by all the genders. As highlighted by the study conducted by Geeta and Ramesh (2012) gender as a demographic factor has minimal influence on the purchase behavior of gold. This study underpins the idea that consumer’s gender moderates the relationship between purchasing environment and product loyalty of gold buying behavior. This research set out to test hypothesis H07, which states that Consumer’s nationality (UAE and other nationalities) moderates the relationship between the cultural value of gold and product loyalty of gold buying behavior. This study supports the above hypothesis. Different individuals in the various nation have diverse cultures. For instance, in India, gold is widely used in ritualistic activities. Luna et al. (2010), suggests that rituals performed within the environment of a given culture do not reflect the culture of that host country. When the expatriates from India are taking gold buying ritual in another country like the UAE, the ritual is just reinforcing the culture of India and has no effect on the Arab environment. Due to this, gold buying can be seen to be a ritualistic behavior when well explored, it can further the understanding of the society of the consumer as it contributes to the knowledge of how the culture is sustained and constituted. Different countries have various cultures that do not need gold to perform the ritualistic festivals, in such nations; individuals are not compelled to obtain gold as compared to India. The morale of customers in such nations is low and their behavior towards the purchase of gold is negative as compared to that of consumers in India who see it a responsibility to have gold as a sign of identity and for investment (Huma et al., 2013). Thus, consumer nationality moderates the relationship between the cultural value of gold and product loyalty of gold buying behavior. India is the highest consumer of gold due to its cultural values. This research set out to test hypothesis H08, which states that Consumer’s nationality (UAE and other nationalities) does not moderate the relationship between the economic value of gold and product loyalty of gold buying behavior. This study does not support the above hypothesis. The nationality of the customer moderates the relationship between the economic value of gold and product loyalty of gold buying behavior. Even though the price of gold may be high in India, they are compelled to buy it since they use it for various cultural events. Individuals in India have a positive purchase behavior when the economic value of gold is low and maintains the same positive behavior even when the economic value or prices increases. They believe that the prices may onetime go even higher than the current prices (CPPR, 2013) On the other hand, individuals from other nationalities like the United Arab Emirates have little or no attachment to gold. They view gold as a form of luxury. Individuals in this country do not feel the pinch of not having gold at their homes. They attach no or less value to gold. When the gold prices increase, the customers opt for other options. They develop a negative consumer behavior towards the purchase of gold. Other nations have different cultural activities that do not use gold artifacts for various festivals and occasions (CPPR, 2013). Hence, it is faithful to conclude that Consumer’s nationality (UAE and other nationalities) does not moderate the relationship between the economic value of gold and product loyalty of gold buying behavior. This research set out to test hypothesis H09, which states that Consumer’s nationality (UAE and other nationalities) does not moderate the relationship between purchasing environment and product loyalty of gold buying behavior. This study does not support the above hypothesis. All consumers regardless of their nationality need a sustainable purchasing environment. Individuals from every nation need to shop in a store that is well structured. There is no customer who can comfortably shop in a store that is poorly structured. The retailers should cater for the needs of the consumers and provide good purchasing environment (Chartered Institute of Purchasing and Supply, 2010). Moreover, overcrowding in the purchasing stores also influence the customer’s loyalty despite their nationality. Customers from various nations would wish to shop in an environment that is not overcrowded. They can quickly access gold from the shelves. Due to the low gold prices and various festivals like marriages, many individuals crowd the stores. This limits the loyalty of other customers since they take much time shopping in the stores. For the retailers to corporate the rising number of consumers, they should construct larger stores that can comfortably contain many customers without congesting the store. The purchasing environment is very vital to all customers from various nationalities. All the customers need to shop in a free environment that is conducive to them. The retailers should prevent excessive noise within the retail store; they should ensure they are adequate space to control congestion. The retailers should provide proper layout of the store to accommodate all customers from diverse nationality. Also, the stores should be located in places where the customers can easily access. A study conducted by Chartered Institute of Purchasing and Supply (2010) suggest that, during adverse weather conditions, the retailers should offer credit facilities to the customers to help them cut down the cost of transport. This can help boost the customer’s morale and have a positive buying behavior. Thus, it is false to conclude that nationality does not moderate the relationship between purchasing environment and product loyalty of gold buying behavior. This research set out to test hypothesis H10, which states that Consumer’s personal income (high, low-medium) does not moderate the relationship between the cultural value of gold and product loyalty of gold buying behavior. This study supports the above hypothesis. Gold is a valued possession in maintaining the culture of the society like in India. All individuals no matter the economic class is supposed to have it. From the study by Huma et al. (2013), it is evident that gold is given artifact status by virtue of its cross-generational and traditional significance. This suggests that gold buying is a ritualistic activity in the Indian culture and cannot be influenced by the economic status of the consumers. Societal values provide a link between ritual and artifacts. With the society, buying gold is considered a must activity. Individuals buy gold and give it to the upcoming generations as an age old custom within the Indian culture. Mothers give their daughters, and women give other women. This is a clear indication that gold can be used by women to look after one another within the society. Gold is an essential part of the community, and all must have it to be identified as members of the society (Huma et al., 2013). The expatriates going to other countries must have gold in the foreign land to show their loyalty to the community. Thus, the morale and loyalty of the customers is high in purchasing gold. Individuals with low or middle income must have gold as a sign of identity. Thus, consumer’s personal income does not moderate the relationship between the cultural value of gold and the product loyalty of gold buying behavior. This research set out to test hypothesis H11, which states that Consumer’s personal income does not moderate the relationship between the economic value of gold and product loyalty of gold buying behavior. This study does not support the above hypothesis. Consumer’s income affects the relationship between economic value and product loyalty of gold buying behavior. Consumers with a high level of income can purchase gold even if the price is high. They feel they can pay for the gold due to their high income. Such customers have high attachment to gold even when the prices go up. A study conducted by CPPR (2003) indicated that the consumers who are high-income earners purchase gold even with the increasing prices. This is not true for those customers who are low and middle-income earners. They feel the pinch of the increased value of gold. In their study, CPPR (2003) found out that the customers with low and middle income would buy more gold when the price declines and then sell when the prices increase. This clearly shows that such consumers possess a negative behavior towards gold when its value increases. But when the prices decline, they tend to have a positive buying behavior. Thus, Consumer’s personal income moderates the relationship between the economic value of gold and product loyalty of gold buying behavior. This research set out to test hypothesis H12, which states that Consumer’s personal income does not moderate the relationship between purchasing environment and product loyalty of gold buying behavior. The study does not support the above hypothesis. The customers need a conducive environment for purchasing gold. Having high, low or middle income cannot change the consumer’s notion of the buying environment. Customers may possess a high level of income but due to poor purchasing environment, they are compelled to change their buying style and develop a negative attitude towards the gold store. On the other hand, consumers with low-income purchasing gold in the conducive and sustainable environment can shop freely (Chartered Institute of Purchasing & Supply, 2010). Moreover, overcrowding in the purchasing stores also influence the customer’s loyalty despite their personal income. Customers may have a high income, but due to a large number of individuals within the store, they find it difficult to shop. This affects their buying loyalty and behavior. On the other hand, individuals with low or middle income can have a positive buying behavior if the purchasing environment is less crowded. Easily accessible stores also provide a direct link to all class of customers (Chartered Institute of Purchasing & Supply, 2010). A store that cannot be easily accessed lowers the moral and loyalty of all the customers. This creates a negative customer behavior. Thus, the hypothesis that consumer’s personal income does not moderate the relationship between the purchasing environment and product loyalty of gold buying behavior is not true since both the customers need friendly shopping environment. List of Hypotheses Tested in this Research Hypotheses Status H01: Cultural value is positively related to the product loyalty of gold buying behavior. H02: Economic Value is related to the product loyalty of gold buying behaviour. H03: Purchasing Environment is positively related to the product loyalty of gold buying behaviour. H04: Consumer’s gender moderates the relationship between the cultural value of gold and product loyalty of gold buying behaviour. H05: Consumer’s gender whether it was female or male does not moderate the relationship between the economic value of gold and product loyalty of gold buying behaviour. H06: Consumer’s gender whether it was female or male the relationship between purchasing environment and product loyalty of gold buying behaviour. H07: Consumer’s nationality (UAE and other nationalities) moderates the relationship between the cultural value of gold and product loyalty of gold buying behaviour. H08: Consumer’s nationality (UAE and other nationalities) does not moderate the relationship between the economic value of gold and product loyalty of gold buying behaviour. H09: Consumer’s nationality (UAE and other nationalities) does not moderate the relationship between purchasing environment and product loyalty of gold buying behaviour. H10: Consumer’s personal income (high, low-medium) does not moderate the relationship between the cultural value of gold and product loyalty of gold buying behaviour. H11: Consumer’s personal income does not moderate the relationship between the economic value of gold and product loyalty of gold buying behaviour. H12: Consumer’s personal income does not moderate the relationship between purchasing environment and product loyalty of gold buying behaviour. Supported Supported Supported Supported Not supported Not supported Supported Not supported Not supported Supported Not supported Not supported References Chartered Institute of Purchasing & Supply. (2010). Understanding the purchasing environment: The official CIPS course book. Maidenhead: Profex. CPPR. (2013). Gold and consumer behavior. Retrieved from: http://www.cppr.in/wp- content/uploads/2013/12/goldstudymaryhoney-131121055002-phpapp02.pdf Douglas P and Craig C. (2006) Beyond national culture: implications for cultural dynamics for consumer research, International Marketing Review, 23(3), 322-342 Huma T, Donelda S., Grant, J. and Janice P. (2013). Shopping for gold. A Ritualistic experience. Retrieved from https://www.google.com/ Luna, Gupta, Forquer S. (2010). An integrative framework for cross-cultural consumer behavior, International Marketing Review, 18(1), 45-69 Maceda, C.(2014). Gold prices will stabilize this year expert’s say. Gulf News Read More