Country-Of-Origin Influence on Consumer Behavior of (British Airways)
Table of Contents
CHAPTER ONE……………………………………………………………………………………………………………….. 3
1.0 INTRODUCTION……………………………………………………………………………………………………….. 3
1.0 Introduction…………………………………………………………………………………………………………….. 3
1.2 The problem statement……………………………………………………………………………………………… 3
1.3 Significance of the Study…………………………………………………………………………………………….. 6
1.4 Aims and Objectives of the Study…………………………………………………………………………………. 7
1.5 Research Questions…………………………………………………………………………………………………… 7
1.6 Theoretical Framework………………………………………………………………………………………………… 8
CHAPTER TWO…………………………………………………………………………………………………………….. 12
2.0 LITERATURE REVIEW…………………………………………………………………………………………….. 12
2.0 Introduction……………………………………………………………………………………………………………. 12
2.1 Consumer Behaviour and the Buying Process………………………………………………………………… 12
2.2 Country-of-origin effect……………………………………………………………………………………………. 18
2.3 Regional in comparison to national labelling………………………………………………………………….. 19
2.4 Consumer behaviour toward imports………………………………………………………………………….. 20
2.5 Impact of Marketing Mix on Consumer Decision Making…………………………………………………. 21
2.5.1 Pricing and Consumer Buying Behaviour…………………………………………………………….. 22
2.5.2 Promotion and Consumer Purchase Decisions………………………………………………………. 23
2.5.3 Effect of Branding on Consumer Purchase Decision……………………………………………… 24
2.5.4 Culture Influence on Customer Behaviour……………………………………………………………. 27
CHAPTER THREE………………………………………………………………………………………………………….. 29
3.0 RESEARCH METHODOLOGY…………………………………………………………………………………… 29
3.0 Introduction……………………………………………………………………………………………………………. 29
3.1 Research Strategy……………………………………………………………………………………………………. 29
3.2 Data Collection Methods…………………………………………………………………………………………… 33
3.2.1 Questionnaires…………………………………………………………………………………………………. 33
3.2.2 Interviews……………………………………………………………………………………………………….. 34
3.3 Research Procedure…………………………………………………………………………………………………. 34
3.4 Sample and Sampling Procedure…………………………………………………………………………………. 35
3.5 Data Analysis…………………………………………………………………………………………………………… 36
3.6 Informed Consent and Privacy Measures……………………………………………………………………… 37
3.7 Chapter Summary……………………………………………………………………………………………………. 38
CHAPTER FOUR:…………………………………………………………………………………………………………… 39
RESULTS AND ANALYSIS…………………………………………………………………………………………….. 39
4.0 Empirical Investigation: Results and Analysis…………………………………………………………………. 39
4.1 Restatement of Aims and Objectives of the Study…………………………………………………………. 39
4.2 Descriptive Statistics…………………………………………………………………………………………………. 40
4.2.1 General Response Rate……………………………………………………………………………………… 40
4.2.2 Demographic Profile and Attributes of the Sample………………………………………………… 40
4.2.3 Knowledge about the Country:…………………………………………………………………………… 46
4.3 Inferential Statistics………………………………………………………………………………………………….. 47
CHAPTER FIVE:……………………………………………………………………………………………………………. 50
5.0 CONCLUSION AND RECOMMENDATIONS………………………………………………………………. 50
5.1 Conclusion……………………………………………………………………………………………………………… 50
5.2 Recommendations…………………………………………………………………………………………………… 52
5.0 Bibliography…………………………………………………………………………………………………………….. 54
CHAPTER ONE
1.0 INTRODUCTION
1.0 Introduction
Country of origin of a product or a company is important in the decision making of consumers (Shirin, 2011). Products from different countries in most cases have labels showing the countries where they are manufactured. Consumers will therefore, judge the products based on the country of origin of the products (Moore, Fernie, & Burt, 2000). The country of origin in has a significant impact on the success or failure of a company in market (Fan, 2002). British Airways has gained significant access to the Chinese market mainly because of the Influence of the country of origin of the airline (Johny, & Ilkka, 2005). The research study is aimed at determining how the country of origin has influenced the consumer behaviour towards British Airways in China.
1.2 The problem statement
Consumer behaviour is a subject that has been studied over the years with an objective of developing a better and profounder understanding of how consumers behave given different circumstances. Generally, studies that have been conducted to explore consumer behaviour have established that consumer behaviour and impacted by a number of factors within the customer-business relationship and some of which go beyond this relationship. While there are many factors that consumer behaviour responds to including branding, positioning, customer care among other aspects, placed of origin has recently come to be one of the factors that research studies are turning to in the bid to bring out an even deeper understanding of the consumer behaviour subject. For instance a recent study by Shirin (2011), observed that Country of origin of a product or a company is important in the decision making of consumers. In fact, it is not uncommon to see that products from different countries in most cases have labels showing the countries where they are manufactured.
Consequently, according to Moore et al (2000), consumers will therefore, judge the products based on the country of origin of the products. These observations provide considerable evidence indicating that the country of origin is a key factor that can provide information on whether a business will be successful or not. As supported by the view of a study conducted by Fan (2002), as a significant impact on the success or failure of a company in market, country of origin therefore becomes an important factor that deserves to be studied (Fan 2002). British Airways has gained significant access to the Chinese market mainly because of the Influence of the country of origin of the airline (Johny & Ilkka 2005). The research study is aimed at determining how the country of origin has influenced the consumer behaviour towards British Airways in China. Globalization of business operations since the turn of the last few decades has made business competition to be a complex affair and business organisations must do all it takes to ensure they understand how the target customers feel about the product presented in the make to them and how they feel the level of satisfaction they get when they use the products. In the airlines industry, it is even more complex with the industry currently facing technical financial problems.
The intricate mode of behaviour of the consumer during the buying process shows that understanding consumer behaviour and “knowing customers” is never simple (Kotler 2004). Customers may say one thing but do another. They may not be in touch with their deeper motivations. They may respond to influences that change their minds at the last minute. Large multinational companies like British Airways stand to profit from understanding how and why their customers buy.
Focus on country of origin as an important determinant of consumer behaviour began to take foothold in 1965 with the first study conducted by Schooler (in Klein 2003), which established that the effect of country of origin actually exists. However, this study did not point out or investigate the strength of the factor and its directional relationship with consumer perceptions about products (Klein 2003). During this time, it had become accepted that most consumers found some non-US made products to be good alternatives to the US-produced goods. Schooler therefore followed the 1965 study with another study in 1969, which took a slightly different approach in a longitudinal approach study that investigated consumer perception about products with national labels versus those that bore regional label. The numbers of studies that have specifically focused on country of origin as a factor in consumer decision making have been building up though very slowly. Nevertheless, so far the studies that have been conducted clearly show that the image of the country of origin of a product is instrumental in helping consumers to make their purchase decisions since the consumers may attach a negative or positive image to the country hence the products from the country as well. However, while a number of studies have attempted to investigate the incorporation of country of origin as a factor in the consumer behaviour model of branded and imported products as well as other general products, especially within the American internal market settings, no study attempted to focus on incorporation of this concept into British Airways or any airlines company and focus on China given that China is an emerging economy that has the brunt of both positive and negative attributes.. The study therefore, endeavours to establish the specific effects that country of origin of British Airways as an air travel brand has on the consumers in the Chinese airline industry.
1.3 Significance of the Study
Behavioural scientists the world over have in the past mainly concentrated their efforts to studies of consumer behaviour by concentrating on the effects of price, cultural factors, gender of buyers, advertising, branding and positioning on the perception of consumers about the products and their intentions to purchase. Most studies have been on the effect of these factors on the consumer purchasing decisions and how businesses can use this information to better their interaction with the customers and survive in the competitive business world. However, a few decades ago, businesses started going global with the advent of globalisation and the global business environment and this has made the concept of country-of-origin effect even more important. Therefore, by the turn of the 1980’s scholars were getting more interested in focusing on the country-of-origin as an important area that requires scholarly attention in the field of behavioural science, and more specifically the area of consumer behaviour.
The findings of this study may provide resource material to be considered for inclusion by the airline companies in their arrangements and appropriations of consumer perceptions and needs as part of their business decision making to be used in bettering the business-customer interactions. Besides providing a contribution to the existing body of knowledge by expanding and renewing the understanding of consumer perceptions about the country of origin, this study may also provide a scientific understanding on how country of origin impacts on consumer choices of air travellers in the modern highly competitive air travel business world. The findings of this study may be useful in tracing the historical growth and development of the understanding of the country-of-origin effect from the early studies carried out in the early days of the birth and development of the idea in 1970’s to this modern world where most business aspects are highly complex.
1.4 Aims and Objectives of the Study
The main objective of the dissertation is to explore the influence of country of origin on the consumer behaviour and focus on British Airways in China as the focus case for the study. The following are the aims and objectives of the research study.
- To explore and examine consumer behaviour of British Airways customers with respect to its country of origin effect.
- To examine the perception and attitudes of consumers in China towards the United Kingdom where British Airways originates.
- Identify how consumer’s perception and attitudes of the United Kingdom are related to their behaviour towards British Airlines in China.
- Identify the impact of the country of origin of British Airways to its growth in China.
1.5 Research Questions
The study attempts to investigate the topic and achieve the objectives by answering the research questions below:
- How does country of Origin affect consumer behaviour of British Airways customers?
- What are the consumer behaviour trends of British Airways customers with respect to country of origin effect?
- What are the implications of country of origin on consumers of British Airways products?
- How does country of origin lead to growth of British Airways in China?
- What are the important factors that consumers consider when choosing British Airways?
1.6 Theoretical Framework
This research study employs the conceptual framework developed and used by Niels and Harzing (2003), which provided a clear view of the connection between the consumer and the product where they intersect at a point that is characterized by the country-of-origin effect. The model can be illustrated by the figure below, which takes a triangular shape with the consumer and the product being at the base of the triangle while the country of origin as a determinant of the perception the consumer would have about the product being at the top of the triangle as shown below.
Looking at the above model, it is imperative to note that country of origin is brought out and seen as a sign by the product consumer. This semiotic methodology is also used by Brijs (2003) to evaluate the country-of-origin effect as an important cue in determining the perceptions consumers have on the products produced from Europe and marketed kin Asian countries such as Japan and South Korea. This study is therefore well suit to use the semiotic model to develop a better and thorough understanding of the country-of-origin effect on the perceptions of consumers toward British Airways as a product from or “Made In” Europe and sold or marketed in China. This approach is even further supported by the fact that many researchers who have opted to study the effect of country of origin on consumer perceptions have demonstrated dissatisfaction with the standard traditional approaches that were previously developed and used since such models, as it is pointed out in the literature review below, had been based on many assumptions that could not stand vigorous scholarly scrutiny.
Based on the above illustrations, this study hence uses the developed frameworks to achieve the set objectives founded on the evidence that products communicate meanings that are decoded by the consumers by information, not intrinsic in the products alone, but extrinsic and generated by other attributes, which the consumer associates with the product image as an understandable sign. These image attributes of the products are used by the consumers to create particular perceptions that relate to quality, emotional feelings, symbolic affiliations and hence influence the consumer to make purchase decisions. It is this relationship that creates a three-way correlation among the consumer, the product and the country of origin sign. As observed by Niels and Harzing (2003), some scholars extended this model and adopted it to create the product perception process where the product plays the function of being seen as an object translated from the Morris’ sign theory (Niels and Harzing 2003). Similarly, the country-of-origin effect operates as a cue that reminds the individual of the product attributes. The product attributes could thus have an attachment with specific utility measure to the consumer or could just have a social or psychological attachment with the consumer (Niels & Harzing 2003). The consumer is the equivalent of the interpretant from the Morris’ sign theory model. In the opinion of the researcher in this study, the model is best suit for this dissertation because it offers a better methodological approach to the study of how consumers derive meanings from country of origin as a coo-label on foreign products and specifically British Airways in the Chinese airlines market. Therefore, the model provides a better approach to understanding how consumers in the Chinese air travel industry signify British Airways as a product made in Europe or Britain.
CHAPTER TWO
2.0 LITERATURE REVIEW
2.0 Introduction
This chapter presents an extensive review of literature as it traces the conceptual advancement of the of the country-of-origin construct as an important aspect that determines consumer behaviour. Generally, the value of literature review depends on its ability to provide a critical appraisal of the available research on a topic. Through the demarcation and evaluation of the existing knowledge base of a specific area, a review of the body of literature not only marks out the most important themes and concerns in the subject area but also points out and builds avenues for follow up studies.
In the specific perspective of the country-of-origin field, there has been an increased level of interests from the scholars who are interested in exploring the effects and impact of the aspect as an important cue thereby making the literature review timely and helpful for this study and future studies. This study may not have an extensive review of the literature based on the level of the study relevant and the expansive nature of the topic. However, all attempts are made to make sure that every relevant detail that can aid in achieving the objective of the study is included.
2.1 Consumer Behaviour and the Buying Process
Kotler (2010) undertook an extensive research and concluded that it is an important aspect of the business interaction, which is not only complex and diverse due its connection with the subject of human behaviour is also very important for businesses to understand how customers respond to the various mechanisms and marketing attempts so that they can make proper decisions in the marketing exercises. The study by Dada (2007) argues that the consumer buying process in the global airlines industry can be described in a five-stage process. At the first stage, consumers recognize a problem; for which a solution is needed to solve it via a perceived need. Continued or incessant marketing and advertisements efforts can arouse curiosity in target consumers and trigger decision making process (Dada, 2007). The second stage in the buying process involves information search. Here, the consumer seeks value through a number of ways; which include: scanning one’s memory to recall previous experiences with the particular airlines company, products or brands and inquiry from other sources such as other consumers. The risk of making wrong purchases is increased if the knowledge acquired during this stage is insufficient or if the past experience with the product is not sufficient. There are three basic sources of external information for consumers at this stage: public sources like exhibitions, personal sources like friends, and marketer-dominated sources, such as advertising, company websites, and salespeople or the airline ticketing agencies. With the advent of the internet technology, the sources of information have expanded to include the World Wide Web.
The third stage of the buying process is the alternative evaluation stage where the consumer assesses value in the particular product by using information gathered at stage two. The consumer’s evaluative criterion is governed by both subjective factors like prestige and objective attributes of a product. The consumer then moves to the decision making stage where the consumer chooses any of the three possibilities. The first possibility is choosing whom to buy from. Factors for the consumer to consider include; terms of sale, past buying experience with the seller or return policy. Another option that the consumer considers is when to buy the product under consideration. The last stage in the consumer buying process is the post-purchase stage where the consumer evaluates the value in consumption of the bought product or in use of a service.
Another study that extensively analyzed the consumer buying behaviour is the study conducted by Huang and Radder (2008), which observes that when a consumer wants to make decision, the consumer goes through the consumer buying process by first establishing the problem that needs to be solved. Previously, a study by Bryant and Zelman (1999) had also observed that the consumer may also develop a perception of his ideal situation and actual position which may consequently trigger a decision (Bryant and Zelman 1999).
Since the airline travel is generally a high involvement product, the process of scanning ones memory may not be adequately sufficient and hence the consumer must seek for sources of information to curb the risk of making the wrong purchase decision. He therefore moves to the external sources for more information concerning the hybrid car. In the external sources, the consumer may consult personal sources like friends and family (Huang and Radder’s 2008). Product-rating organizations may also be helpful as external public sources for the consumer. The consumer also seeks information from among marketer-dominated sources such as advertising, salespeople and company websites.
The next stage in the purchase decision process is for the consumer to evaluate the alternatives through value assessment (Huang and Radder 2008). At this point, the consumer finds the information search to be important when it suggests the criterion to be applied in making the purchase of the hybrid car, the information yields brand names that might meet the suggested criteria and then it helps in developing the consumer’s value perception.
The consumer now moves to determining or making the real purchase decision so that he buys the values he desires. At this point therefore, the consumer must decide where he gets to buy the hybrid car. The choice of whom to buy from is depended on such issues as terms of sale (for instance if one seller offers discounts while the other offers after sales services), past experience of the consumer buying from the seller and then return policy (McDuffie & Helper 2000). The consumer also decides when to buy the high involvement product depending on time pressure, how pleasant the travelling experience was and the general airline’s atmosphere; probably how customer friendly it is.
The consumer lastly carries out a post-purchase value in consumption evaluation where he makes a comparison of the product with the expectations he had before purchase. Consumers are likely to experience the post purchase cognitive dissonance. The decision to purchase a product is likely to be affected by the family influence, culture and sub-culture and the social class in which an individual consumer belongs.
Perceptions of airlines customers on the value of air travel have affected the performance of the industry. Advanced technology and the introduction of the internet and web-based ticketing have enabled consumers of airlines products to put a lot of emphasis on price rather than travel time. Customers are in position to book flights for themselves ends are able to find lowest fares. This forces most airlines companies to reduce fare which in turn leads to low profits in the organization. Moreover, airline industry has for long experienced retarded market growth due to low returns because of the very factors discussed above. The factors put forward by Porter are directly attributed to the retarded growth of airline industry. Overhead and labour costs in this industry are more than the revenue earned hence affecting the shareholders wealth hence many potential investors run away from investing in this sector. This also has a far reaching influence ion the expansion programs of the company. Any strategic move towards development in the airline industry has been limited by poor returns from the investments made (Greenbelt, 2000).
2.2 Country-of-origin effect
Prior to the 1965 study conducted by Schooler, there was no literature in the country of origin as a factor in the consumer purchase decision making process. In this pioneering study, Schooler found that the country of origin is a key factor that can have an impact on the consumer purchase decision making process and hence concluded that this significant aspect of the consumer behaviour should be put to more academic investigation (Frazier & Anta 2001). The studies that followed have cemented the observation that the country of origin is a key factor that modifies the opinion of the consumer about the product (for instance, Klein 2002). This implies that there are products that might be viewed as either positive or negative based on the country from which they originate. Nevertheless, most of the initial studies did not focus on exploring or establishing the direction of the relationship between the consumer perception and the country of origin of the products in question. The main objective of the studies was basically inclined on establishing whether the country-of-origin effect existed or not. Some scholars have argued that it is important to take into account the country stereotypes that exist before or when conducting a study that targets exploring the country-of-origin effect because this can significantly affect the ability of the study results to be generalised to other settings. For instance, in an extensive review of the literature carried out by Dinnie (2003) indicated that when country stereotypes and the nature of the stereotypes are not considered during the research study, then the results drawn from the entire study might be flawed.
In their model, Niels and Harzing (2003) argue that globalization cannot be ignored when developing the point of convergence between cultural, political and economic aspects of the life in the countries under consideration because these factors create a point of convergence that multinational companies such as British Airways sail in and therefore the multinational company is prone to be seen as a harbinger of the global customs and traditions. In addition, knowledge in the modern business environment moves extremely fast across organizational limitations and restrictions such that it is expected that a multinational organization can easily adapt to the new operating environments in the foreign country and know exactly how the consumers in the destination country perceive the organization and parent country of the multinational. However, organizational culture is an important factor in the day-to-day operation of the multinational and therefore it can’t just be assumed that given the complexity intermarried with internal differentiation of the multinational it would be a simple endeavour that has no difficulty at all.
Looking at the above model, it is imperative to note that country of origin is brought out and seen as a sign by the product consumer. This semiotic methodology is also used by Brijs (2003) to evaluate the country-of-origin effect as an important cue in determining the perceptions consumers have on the products produced from Europe and marketed kin Asian countries such as Japan and South Korea. This study is therefore well suit to use the semiotic model to develop a better and thorough understanding of the country-of-origin effect on the perceptions of consumers toward British Airways as a product from or “Made In” Europe and sold or marketed in China. This approach is even further supported by the fact that many researchers who have opted to study the effect of country of origin on consumer perceptions have demonstrated dissatisfaction with the standard traditional approaches that were previously developed and used since such models, as it is pointed out in the literature review below, had been based on many assumptions that could not stand vigorous scholarly scrutiny. Due to the biases that were identified by later studies, the previous models were found to be insufficient in establishing a conceptual framework that would be used to better understand the consumer’s product evaluation process (Brijs 2003). It is therefore not coincidental that the semiotic model is chosen to be used in this study as the most appropriate model for understanding the consumer perceptions of products based on the effects of the country of origin. It is not coincidental because even the research study carried out in the 1990’s by Denzin established that human beings attach meanings to specific signs and hence develop their own perception constructs of the objects based on how they perceive the objects (Denzin 1992). Similarly, another follow-up study by Holbrook and Hirschman (1993), reiterated the findings established by Denzin (1992) and further argued that products carry and transmit meaning to the consumers and potential customers hence marketers must be wary of this fact. Moreover, both studies by Brijs (2003) and Niels and Harzing (2003) use the sign theory developed by Charles Morris inn early 1940’s that has become an instrumental illustration of the use of semiotics in understanding human behaviour.
Based on the above illustrations, this study hence uses the developed frameworks to achieve the set objectives founded on the evidence that products communicate meanings that are decoded by the consumers by information, not intrinsic in the products alone, but extrinsic and generated by other attributes, which the consumer associates with the product image as an understandable sign. These image attributes of the products are used by the consumers to create particular perceptions that relate to quality, emotional feelings, symbolic affiliations and hence influence the consumer to make purchase decisions. It is this relationship that creates a three-way correlation among the consumer, the product and the country of origin sign. As observed by Niels and Harzing (2003), some scholars extended this model and adopted it to create the product perception process where the product plays the function of being seen as an object translated from the Morris’ sign theory (Niels and Harzing 2003). Similarly, the country-of-origin effect operates as a cue that reminds the individual of the product attributes. The product attributes could thus have an attachment with specific utility measure to the consumer or could just have a social or psychological attachment with the consumer (Niels & Harzing 2003).
2.3 Regional in comparison to national labelling
The studies that were conducted prior to 1990’s were very instrumental in developing a profound conceptual framework for investigating and comprehending how the consumers perceive the international products by comparing regional and national labelling of the products (Klein 2003). According to Klein (2003), some of the breakthroughs in understanding the consumer perception of the international products made it more appealing for companies to give a general label to their products so that the goods would not be identified with a particular country but rather a general region such as the Latin America, Asia, Africa among other regionally appealing labels. This implied that based on this notion, a product made in Singapore, for instance, would be labelled as “Made in Asia” and a product made in Brazil would be more appealing if it is labelled as “Made in Latin America.” Nevertheless, according to further investigation done by Klein (2003) the studies that followed did not establish if either regional labelling or national labelling was more superior to the other. Moreover, Klein found that when the consumers were categorised on the basis of their level of education, those who are well educated were found to be more inclined to opt for the foreign products than fellow consumers who have lower levels of education. On the basis of gender of the participants of the studies, female participants were found to evaluate foreign products better than the male participants. Additionally, the younger consumers were found to have a higher evaluation of the foreign products than the older consumers.
The perceptions of consumers are dynamic and diverse and so is the nature of the country image. This, according to the study by Klein (2002), in a departure from the normal focus of research studies conducted in a particular time and place, another approach that can be taken is the longitudinal profiling. In the analysis, Klein evaluates the approach taken by Nagashima (1970) when investigating (through a comparative study between Japanese and American) consumer attitudes about the foreign products (Klein 2002). In the study, the researcher used semantic as a major profiling factor and found that there was a difference between the two groups of interviewees based on the stereotypes of “Made In” of the products.
2.4 Consumer behaviour toward imports
A number of studies have attempted to investigate the perceptions of consumers on imports. While the original studies used students as the samples for the studies, it was found that students do not provide the best sample as their perceptions are biased and therefore provide biased results (Klein 2003). The studies mainly aimed to establishing any diversity of the consumer perceptions of imports based on the specific countries, if these perceptions depended on the product classes of the imports, or if the perceptions would differ among consumers based on the socio-economic characteristics. However, these studies were criticized by some scholars who argued that the study objectives could be failed on the views that too many incongruent aspects were being tackled making the studies to have little focus or lack focus at all (Klein 2003).
Nevertheless, these studies were very instrumental in contributing to the vast body of literature about foreign products and the general trends of consumer behaviour or perceptions about the products with foreign origins. During that period, a common trend had been observed that foreign goods in the US markets were growing increasingly more competitive than the US products with the products from Japan or with labels “Made in Japan” being considered as substitutes to the US made products. This observation is supported by the study and analysis done by Olsen, Nowak and Clarke (2002), who argued that there was a general trend among consumers that made different connections of various products and identified them with a particular country, for instance Japan for electrical equipment and Mexico for wine while Germany being identified with mechanical products. Olsen and Olsson (2002) carried out a follow-up study about the consistency of the country-of-origin attitudes and found that male and female respondents did not have any diverse perceptions about the country of origin of the foreign products even though the researchers established that when the level of education of the respondents increased, their perceptions for imports became more favourable. This study therefore clearly established a positive correlation between the level of the respondents’ education and their perceptions about the imports. Besides just having a consumer perception based on the country of origin of the foreign product, Ballington (2001), observes that it is important to establish a country-product link because this helps in generating constructive data was that can further provide more information about the purchase intentions among various consumers. When a study was conducted by Shrimp and Sharma in 1987 that profiled countries based on their performance levels and attributes, it was established that consumer purchase intentions are significantly affected by the universal attributes that relate to the products and the country while at the same time also affected by the specific attributes of the products in question.
2.5 Impact of Marketing Mix on Consumer Decision Making
Mullin et al (2007) advise that the marketing mix is still a very important tool for the modern marketing manager or business in general to enable the business to flow with the drastic changes. This implies that the marketer should have the ability to vigilantly bring together these ingredients into a selection of activities that shunt an array of consumers up the ladder. The objective is to make decisions that centre the four Ps on the clientele in the target market. This is done in order to create perceived value and generate a positive response by presenting the product with the best strategy to capitalize on sales and brand constancy.
2.5.1 Pricing and Consumer Buying Behaviour
When discussing the factors that influence, it is almost impossible to do it without discussing the 5 P’s as the most known factors that influence the consumer decision making during the purchase decision making process. For instance, Hollensen (2003) argues that pricing is one of the most important marketing mix decisions, and it is the only marketing mix variable that generates revenues because it directly targets the potential customer and works to retain the existing ones (Hollensen 2003). Pricing is not a solitary idea, but a multidimensional one with diverse connotations and connotations for the business organisation, the intermediary business stakeholders and the final buyer. According to Holland (1998), pricing strategy is of significant value since it affects both returns made by the business from the product and buyer behaviour. Pricing entails the establishment (and adjustment) of a price standards and price levels. Additionally, pricing also encompasses price change decisions that have short-term implications for the product or company brand. A more successful, purpose-inclined approach to pricing is required and should explicitly take into consideration the function played by price as a marketing mix device and as a profit generator. This results to a framework for effectual, goal-orientated pricing, and helps highlight the major aspects and factors of the pricing decision (Hollensen, 2003).
Determining the price for various consumer products is frequently a function of the cost of manufacturing the products added to the determined level of profit. Price determination using this determined amount of profits is often called to as cost-plus pricing. It can also be referred to as mark-up pricing or full-cost pricing. Luxury goods and high-end goods and services often demand a margin which exceeds the determined mark-up (Holland, 1998).
Ellickson & Misra (2008) draw attention to the fact that even though business organisations compete along many platforms, pricing policy is evidently one of the most significant. In many retail sectors, pricing policy can be regarded as a choice between offering comparatively unwavering prices across an extensive range of products (this is often known as low pricing) or putting emphasis on entrenched and regular discounts on a smaller array of goods- this is often known as promotional pricing (Ellickson & Misra 2008).
The argument by Shank (2001) provides a deeper understanding about the influence of the traditional marketing mix and its relationship with the consumer decision making. Shank (2001) argues that just like any other marketer, the sport marketer is faced with a challenge of presenting the sport products to the customer with the best strategy so as to maximize on sales and a brand loyalty. Even though the author mainly focuses on the sports marketer, one important element that comes out is that the objectives of the marketer should be focused on gaining the consumer loyalty to the brand being marketed (Shank 2001). In the conventional model, the seller is more focused on presenting the product in the correct manner, at the best place, with the best price tag and pays attention to what product to take to what market. Ellickson and Misra (2008) support this perspective by stating that for this reason, the marketer is deeply concerned about the best style of integrating product with positioning, pricing, promotion, and place to achieve the main objective of making a sale on the product. By coming up with an effectual marketing strategy, Ellickson and Misra (2008) further argue, the marketing manager is capable of cautiously bringing together all the 5 P’s into an assortment of activities that shunt a range of customers up the ladder. One of the main objectives of a typical marketer is to have a satisfied customer so that the business can have repeat purchases.
2.5.2 COO Effects on Promotion and Consumer Purchase Decisions
Advertising and other forms of promotional market approach mechanisms also create extra effect on the consumer decision making process since these efforts implant the signals of the brand from a specific country hence creating long term memory of the products by the customers. Kirchhof (2009) recognises the significance of advertising as a factor that creates a construct on tghe consumer buying decision making and goes to provide a definition for advertising as the employment of various product attributes and characteristics to spark consumer interest. The recognition of the American Marketing Association recognises that advertising is a non-personal presentation of the various product attributes by a specific sponsor. The definition of the American Marketing Association also makes it clear that it is a paid endeavour. Kirchhof (2009) add that besides sparking consumer interest in the products or services, advertising allows businesses to promote products or burnish corporate reputations. Advertising can perk up market effectiveness by availing the right information to the consumers and businesses about products or services that amplify competition and lessen prices.
The Marketing Research (2009) identifies product positioning as another important factor that determines how customers or consumers respond to the product presented in the market. In the case of a service-based business organisation, it would be related to the positioning of customer service offices, the ticketing agencies or offices and any other customer-contact centres ( Mullin et al 2007). Based on the findings of Mullin et al (2007), customers who are categorised as loyal due to the convenience of the location of the customer care centres and purchase points are likely to be influenced positively to make purchase decisions whenever the purchase points are conveniently located.
2.5.3 Effect of Branding on Consumer Purchase Decision
Branding is another aspect that creates an influence to the consumer behaviour and impacts consumer perceptions during the purchase decision making process. Ambler (1992) provided a precise consumer-oriented approach in assessing the role played by branding in influencing consumer decision making process. Ambler (1992) takes a consumer-oriented approach in defining a brand as: “the promise of the bundles of attributes that someone buys and provides satisfaction. The attributes that make up a brand may be real or illusory, rational or emotional, tangible or invisible” (Ambler 1992). According to the American Marketing Association’s definition of a brand, it can be “a name, term, sign, symbol or design, a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.” A brand is thus a product or service that brings more dimensions that make the product distinct somehow from other products or services designed to satisfy the same need (Marketing Power 2010). The objectives that a good brand will achieve include: clear delivery of the intended communication, substantiates the organisation’s credibility, connects the organisation’s target prospects emotionally, provides the buyer with the right motivation to make purchase decision or positive association with the brand and cements user loyalty. To be successful in branding the business organisation must understand the needs and wants of the customers and prospects. It’s important to realize that packaging always either has a negative or positive influence on the purchaser. A negative perception about the product can detour a prospective customer, just as a positive reaction can influence a customer to make a purchase. A time to pay particular consideration to the packaging is when companies are in the launch of a “new” brand (PAR marketing Services, 2010). Aaker (1996) further highlights the strategic importance of understanding brand as it can help brand strategists by enriching their understanding of people’s perceptions of and attitude about the brand, contributing to a brand identity that differentiates the specific brand identity, guiding the communication effort and creating brand equity.
According to Kotler (2000), successful brands must identify an unmet need/desire, advertisers may not have even recognized these themselves, but they can immediately see the potential benefits when the idea is put before them; create a product that is different, relevant and appealing; the whole organization from top to bottom must be committed to the success of the new idea and give the required support: marketers must synchronize advertiser’s perception and attitudes towards brand imagery. The king of positioning and the image a brand seeks may be based on rational and tangible differences based on product performance, or may be more symbolic, emotional and intangible based on brand aspirations or what the brand represents. The latter criterion is mainly influenced by advertisers’ mind-sets, perceptions and values and represents supplementary significance or value that brands provide beyond the core products. Marketers often use such differentials to position their products in the advertiser’s perceptual mind. Customer satisfaction occurs after and sometimes during customer experience (Kotler, 2000).
Keller (2004) adds that a brand element is visual or verbal information that serves to identify and distinguish a product. The most common brand elements are: Brand names, Logos, Symbols, typescript and fonts, wrapping and signage and catchphrases. These elements can be chosen to augment brand responsiveness or facilitate the generation of strong, favourable, and distinctive brand affiliations. The ultimate test of the brand-building contribution of brand elements is what consumers would perceive about the product if they only knew about its brand elements. Therefore selecting the appropriate brand aspects according to these criteria can help to contribute to brand equity by boosting awareness and the generation of a positive brand image. Because different aspects have different benefits, ordinarily a subset or even all of the possible brand attributes should be employed.
2.5.4 Culture Influence on Customer Behaviour
A number of scholars have indicated that culture is an important influence to the way consumers perceive products and how they react to them. It therefore becomes a very important factor that impacts consumer behaviour. A culture is the system of shared beliefs, values, customs, behaviour, and artefacts that the members of society use to cope with their world and with one another (Bates, 1999). Cultural factors exert the broadest and deepest influence (Kotler 2004). Culture, sub culture, and social class are particularly important in consumer purchase decision making. According to Bates (1999), culture is the elementary determinant of an individual’s wants and actions. The growing child acquires a set of values, perspectives, preferences and behaviour through his/her family and other key institutions. Every culture comprises of minor sub-cultures that grant more specific recognition and socialisation for their members. Sub-cultures incorporate nationalities, their religions, racial groups and geospatial regions. The subcultures create more pressure on companies and other organisations for consideration in marketing efforts when they have grown larger and more prosperous in terms of wealth possession or potential. This, according to Bates (1999), makes them to attract specialised marketing programmes that must consider the established cultural aspects of the target market.
Such specialised marketing initiatives are referred to as ‘diversity marketing’ since cultural and demographic strata do not always react positively to mass marketing advertising. This is because practically all human societies demonstrate social stratification which occasionally takes the shape of a social order system which takes the form of social classes, comparatively uniform and enduring partitions in a society which are hierarchically regimented and whose members share analogous values, concerns and behaviour. Social classes exhibit not only income but other parameters such as profession, education and district of residence. Social classes have several attributes; there are those within each class who tend to behave more alike than persons from two social classes. A social class is indicated by a cluster of factors that include an individual’s occupation, their income and wealth, levels of education and value orientation- rather than by any single variable. Kotler (2004), points out that social classes show distinct product and brand preferences in many areas; including clothing, leisure activities and eating habits.
Moxey (2008) posits that business environment has been changing dramatically over the last decade and to be strategically placed in the rapidly changing business environment, business must adapt the new marketing strategies accordingly (Moxey 2008). Marketing mix is known elements that make up the marketing process. These include price, product, place and promotion. For the globalized business or organisations to flow with the dynamic nature of the global business atmosphere, the business should have the ability to vigilantly bring together these ingredients into a selection of activities that shunt an array of consumers up the ladder. The objective is to make decisions that centre the four P’s on the clientele in the target market in order to create perceived value and generate a positive response by presenting the product with the best strategy so as to capitalize on sales and brand constancy.
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
CHAPTER THREE:
METHODOLOGY
3.0 Introduction
This chapter entails a designation of the manner in which data for analysis is collected, arranged, sorted and analysed in order to generate information for formulation of conclusions and recommendations. Data relevant to the aspects of customer perception about country of origin and other control factors are collected and analysed to help in evaluating various aspects of customer behaviour toward British Airways as a product originating from or “Made In” the UK. These models are deemed sufficient to ensure reliability of the responses and the outcomes of analysis.
3.1 Research Strategy
The study takes both qualitative and quantitative approaches to achieve the desired objectives. The qualitative approach helped in the examination of the current market elements that would impact the consumer buying exercise in the airline industry in China and any other country while exploring the various factors that may act as drivers to the consumers’ perception about the country image where British Airways. By evaluating the aspects in this format, it possible to come up with or propose marketing strategies to be adopted by British Airways to ensure utmost satisfaction of the customers that is founded on strong grounds of understanding of the consumer perception. This mixed method is appropriate because initially, this research aims to examine the extent to which country of origin influences customer buying behaviour in the airline industry then constrict this enquiry to the customers of British Airways in the Chinese airline industry. This is achieved by assessing the array of variables that are related to country of origin cue and which are likely to influence customer decision making during their buying experience in the airline industry while using qualitative means to explore the perceptions that drive the consumers to make their buying decisions when they choose to buy British Airways tickets over any other option of their choosing. This is followed by a quantitative inquiry whereby the study examines the relationship of influence between various factors such as demographic, price of goods, among other variables on the purchase decisions such as frequency of purchase. This is important because it helps in eliminating other potential factors that are known to influence consumer buying behaviour.
The research design for this study is of the case study type, and British Airways is the subject of the case with the Chinese airline industry being the setting of the case study. Ayelet et al (2008) state that the principal objective of such studies should be to find out the conditions that are fit for an individual setting or case under the specified circumstances. By conducting the consumer perception research, the study attempts to assess the best method of serving the consumers and customers to ensure maximum satisfaction and repeat purchases and also ensure that there is continuous flow of understanding of consumer perceptions toward country of origin in the airline industry.
Qualitative research strategies applied in the study are used to introduce the social aspects of analysis in the data. Analysis based on existing theory is performed, with elements of past experiences playing a role in the analysis of data. For instance, the research study asks the respondents whether they have used British Airways services in the past or if they collect information about the country of origin of products before making purchase decisions. In addition, qualitative research offers in-depth analyses on opinions from participants measured against existing theories and information drawn from the literature review, with this information originating from assertions in the questionnaires and interviews. According to Dawson (2002), use of the two models should contribute to comprehensiveness of the analysis as opposed to contradictions in assertions. Due to the adoption of the mixed-method approach in the study, the table below provides the philosophical rationale to support the choice of the methodology.
|
Quantitative Research Study |
Qualitative Research Study |
| Merits |
- Allow for a broader study and enhancing the generalization of the results
- Allow for greater objectivity and accuracy of results.
- employs prescribed procedures
- Personal bias can be avoided
- Provides depth and detail
- Creates candidness: allowing respondents to expand on their responses can open up new topic areas not initially considered
- simulate people’s individual experiences
- Attempts to avoid pre-judgments
|
|
| Demerits
|
- Gather a much narrower dataset
- The context of the experiment is ignored
- The results are limited
- Should involves a large sample of the population, this can cost more.
- Easily leads to ‘structural’ bias and false representation due to standard questions
- More difficult to generalize
- Systematic comparisons are not easy to make
- There may be more subjectivity concerned in analysing data and the researcher may have more influence over the results.
- Not easy to conclude the reliability and validity of data
- Data overload may need a lot of time to analyse!
- Recorded interviews would cost more time and money
|
|
Source: Adopted from http://www.learnhigher.ac.uk/analysethis/main/quantitative1.html
3.2 Data Collection Methods
Data collection is a primary aspect of any research project. Data collected for the research provides the basis for assertions and conclusions since it represented the views and perceptions of the sample on the subject matter of the study. Data for research project can either be primary or secondary. Primary data is collected essentially for the current project. Collection of such data occurs through questionnaires and other forms of data collection method, involving the direct or indirect contact with the respondents. Since it is collected for the current study, it is the most relevant form of data. In essence, the parameters and provisions for collection of this data are aligned with aims and objects of the study.
This research study employs two main methods of data collection to ensure comprehensive data collection exercise given the mixed methodology approach that requires rigorous data.
3.2.1 Questionnaires
The questionnaires were used to get information from clients of British Airways. The questionnaires were distributed to large groups of people in the country. The questions in the questionnaire were simple, easy to understand and close-ended in format. This makes data processing easier to carry out (Denzin & Lincoln 2000). The table below provides further information on how the sample size was demarcated among the respondents.
| Group |
Population |
Percentage of the total Population |
| Selected regular customers |
200 |
Not Sure |
| Total |
200 |
Assumed at least 5% of Daily Carriage |
3.2.2 Interviews
Interviews were also used to gather information from a few identified customers of British Airways in China and part of the employees of the airline company. Open ended questions were used in the interviews to allow in the collection of comprehensive information from the target respondents and allow for a comprehensive qualitative analysis that would back up the quantitative analysis. Senior employees of British Airways were interviewed in the part of employees. Identified stakeholders of the British Airlines were also interviewed in the study.
3.3 Research Procedure
The research process was designed to be carried out in two steps. First a pilot study was to be undertaken in order to establish the suitability of the questionnaire in collating the necessary data from the actual sample. This pilot study was also to test the perceived success of the study, by testing whether responses would actually be forthcoming. After the pilot survey, the questionnaires were mailed out to various individuals through online facilities, with responses filled out in the surveymoney.com facility. Through this facility, the number of individuals who responded was drawn from the travellers who had used or were using British Airways for their air travel services, making it possible for the views from individuals to be sought. Questionnaires were sent to two hundred individuals with responses forthcoming from while the interviews involved 10 individuals.
3.4 Sample and Sampling Procedure
Convenience sampling technique is applied in the study for the research to help in arriving at two hundred respondents from British Airways customer base in the Chinese air travel industry. This approach is proposed with an advantage that it allows the researcher to select a sample that has the desired characteristics.
Most research studies have shown that a good sample size should be 10% or more of the target population (for instance, Hinton 2004; Gupta, 2011; Ayelet, Lingard & Levinson 2008). Implications of a small sample size or reducing the estimated sample are manifold. First with respect to the standard error, a small sample size increases the possibility of a large standard error since the standard error is a function of the sample size. What this implies is that if a sample that is needed should give a proper representation of the target population, it should be as large as possible to represent the population with more precision. Hinton (2004) gives an important point to discourage small sample sizes, especially in non-experimental designs where the target population is large. However, most studies and population distribution types with the various methods of analysing the sample parameters show that sample sizes of 200 and above are sufficient for proper statistical analysis (Israel 2012). For instance, Israel (2012), advices that with descriptive statistics to be used, any sample size would be sufficient but it would be important to be 200+ if the analysis involves other methods such as regression and ANOVA. Since this study is mixed (implying the use of descriptive and measures of significance for this matter), a sample size of 200 respondents is used. Therefore this sample size is chosen because it fits the objectives of the study and allows the various analysis techniques to be carried without the fear of creating statistical bias. The respondents are selected among those who book their tickets online for British Airways.
Gupta (2011), admonitions that small samples should be avoided because in addition to increasing the standard error, they have an impact on how the results of the study can be generalized to other settings or time. Therefore, the targeted sample size is justified on the point of being large enough to represent the target population as much as possible.
3.5 Data Analysis
The data analysis is performed in order to transform the collected data into information for decision-making. Tabulation and presentation of data is performed through the use of statistical packages such as Excel, with analysis through SPSS 16.0. Data is tabulated into graphs and tables in order to enable analysis to be performed, and the analysed data presented through numerical, graphical and explanatory models.
All categorical items with reference to customer perception toward country-of-origin effect were converted to an ordinal scale ranging from the smallest value (for instance, “Strongly Disagree”) to the maximum value (for instance, “Strongly Agree”). Items or questionnaires that did not receive response were coded as missing values. Scale values were therefore to be calculated as the average or mean of the single items. All items are assumed consistent with characteristics of a normal distribution. Nevertheless, all questionnaires were successfully filled.
The qualitative data is coded appropriately to allow for possibility of handling it using quantitative techniques. For this reason, appropriate segments are demarcated within the qualitative data and then coded. Highly structured data (for example, open-responses from respondents) were coded without subjecting it to any further segmentation. Open responses were witnessed in the recorded interviews. This makes such data analysable using both qualitative and quantitative techniques (Denzin & Lincoln, 2000).
Descriptive statistics and correlation analysis were performed to evaluate whether there is significant relationship between customer satisfaction behaviour and the various consumer attributes. The relationship between the various variables was measured through the Pearson product-moment correlation coefficients (Grinnell & Unrau, 2007). The questionnaire used in the study used simple correlation analysis in the interpretation of the interview transcript and the questionnaires. Graphs and charts were also used in the analysis of the information gathered as they convey a clear picture during the interpretation of data (Koschate-Fischer, et al, 2012). All p-values were two-tailed. P-values less than 0.05 are considered significant given that the significance level will be 0.05 or 5%. The values will be given as mean and standard deviation and the data will be calculated using SPSS Version 16 and Microsoft Excel.
3.6 Informed Consent and Privacy Measures
Data collection was performed through online means, thus eliminating the face to face contact with the respondents. However, assurances were made to ensure that the identity of the individuals were not revealed, since the names and other demographic aspects were based on general limits, such as age groups. Similarly, the responses to the questionnaire were to be used for academic purposes and for this survey only. The responses to the questions were also based on the perceptions of the individuals and not a representation of the views and reality at British Airways. As a result, any assertions based on this study should be considered under the existing parameters in order to validate their reliability. All this information was clearly communicated to the respondents that comprised the customers of British Airways. It was also communicated to British Airways as an organisation since issues of business intelligence are sensitive and informed consent from the organisation as entity is warranted.
3.7 Chapter Summary
The chapter has provided an extensive description of the approach taken in achieving the objective of the study by noting that a mixed methodology is used, with both qualitative and quantitative techniques applied. The sampling technique used is highlighted, which is random with an assumed normal distribution of the consumers of cookies. Administration of questionnaires and the use of interview are the two methods applied in the collection of data from the respondents. In data analysis, the demographic variables are described using frequency, percentage, and other measures of central tendency like mean and standard deviation. One sample or independent T-test is used in examining the significance of the relationship, if there is any, between the dependent variable and the independent variables, the respondents (Scott, 2005). Other statistical analysis methods are also used. All inferential statistics are reported at p-values of 0.05 as the benchmark.
CHAPTER FOUR:
RESULTS AND ANALYSIS
4.0 Empirical Investigation: Results and Analysis
The results and findings of the study presented in this chapter with a critical evaluation of the findings about consumer behaviour toward country of origin of British Airways as a product made in or originating in the UK.
4.1 Restatement of Aims and Objectives of the Study
The main objective of the study was to explore the influence of country of origin effect on the consumer behaviour and focus on British Airways in China as the focus case for the study. For this reason, the study analysis was carried out with a specific focus of fulfilling this aim and all the objectives of the research study. In order to explore and examine the consumers’ behaviours toward British Airways based on the country of origin as the main cue; descriptive statistics are used to explore the demographic profile of the respondents. The examination of the perception of the consumers and their attitudes also takes a notch higher and includes the use of other tools such as frequencies and inferential statistics. In order to have an image of the impact of the country-of-origin effect on the growth of British Airways in China, growth trends of the company and prospects are also explored and the main source of this information is the company’s financial records and other secondary sources of information. The study also aimed at establishing whether the consumers’ behaviour towards British Airways was or is influenced buy their perception toward the United Kingdom.
The analysis of results was hence focused on answering five main questions that had earlier been formulated to aid the research study. Besides the questions that had been formulated prior to conducting the study, there are also other aspects of respondent characteristics that were collected and which help in providing the demographic attributes of the sample hence the population represented. The following is an empirical, investigation and analysis of the results as drawn from the interviews and the questionnaires filled by the respondents.
4.2 Descriptive Statistics
4.2.1 General Response Rate
A total of 200 questionnaires were sent to selected individuals of the sample. The response rate was 97% with 194 questionnaires being filled out completely hence qualifying for the inclusion in the data analysis process. The questionnaires that were either filled half-way or not filled at all were excluded from the analysis to mitigate the problem of having extreme outliers. With the 97% response rate, the study was successful and therefore the filled questionnaires were able to represent the sample and be used in data analysis. Out of the six questionnaires that were eliminated from the analysis, 4 were filled half-way though they were eliminated altogether after being recorded as missing marks. Including them would increase outliers. The other two were not filled at all and no further communication was received from the respondents.
4.2.2 Demographic Profile and Attributes of the Sample
Male respondents represented 46.5% of the total 200 target respondents registering a crude frequency count of 93 individuals. The female respondents however represented 53.5% of the 200 target respondents registering a crude frequency count of 107 individuals. However, it was imperative to refine these figures because some questionnaires were not answered to hence the descriptive statistics needed to be compared to 194, since this is the number of filled questionnaires that were analysable. When refined in this sense, the male respondents represented 47.9% of the total response with a count of 93 responses while the female respondents represented 52.1% of the total response with a count of 107 responses. The table below provides supplementary information about gender representation in the sample and responses received.
| Gender |
|
|
Frequency |
Percent |
Valid Percent |
Cumulative Percent |
| Valid |
Male |
93 |
46.5 |
47.9 |
47.94 |
| Female
missing |
107
6 |
53.5
0.03 |
52.1 |
100.0
|
| Total |
200 |
100.0 |
100.0 |
|
With respect to the age ranges of the respondents, it was established that a majority of the respondents were individuals falling between the ages of 36 and 55 years of age. This is because the respondents who fell between 36 and 45 years represented 31.4% of the total response with a frequency count of 61 while those between 46 and 55 years represented 29.4% with a frequency count of 57 responses. This means that combining respondents in the two age categories makes them represent 60.4% of all the respondents. The least represented group of respondents was the one comprising the individuals between 18 years and 25 years of age. The table below provides further illustration to the findings.
| Age Bracket |
|
|
Frequency |
Percent |
Valid Percent |
Cumulative Percent |
| Valid |
18-25 |
17 |
8.8 |
8.8 |
8.8 |
| 26-35 |
25 |
12.9 |
12.9 |
21.7 |
| 36-45 |
61 |
31.4 |
31.4 |
53.1 |
| 46-55 |
57 |
29.4 |
29.4 |
82.5 |
| Above 56 |
34 |
17.5 |
17.5 |
100.0 |
| Total |
194 |
100.0 |
100.0 |
|
Another question in the questionnaire was put forth to determine the place of birth of the consumers and whether this place of birth determines their use of British Airways products or services.
The table above provides information on how the sample was distributed with respect to the place of birth based on region or continent. The majority of those interviewed indicated Europe as their region of birth and this number was represented by 44.85% of the respondents representing 87 responses. This was followed by those who indicated Asia as their region of birth and they had a frequency of 54 individuals and this represented 27.85 of the total responses. While Africa had 6 hits as place of birth representing 3.1% of the responses, Australia and New Zealand had 16 individual responses accounting for 8.2% of the total responses.
The fourth question endeavoured to investigate whether the place of birth of the respondents as indicated in their responses to the region of birth has any influence on their choice of British Airways for air travel. In their responses, 63.4% of the responses indicated that their place of birth has an influence on the choice of British Airways services. Nevertheless, the questionnaire did not probe further to establish the reason for the influence. Moreover, those who indicated that their place of birth had no influence on the choice of the Air carrier represented 36.6% with a frequency of 71 individual responses. It is important to note that even though the research study questionnaire did not put in place any mechanism to establish how the place of birth might influence the choice of British Airways, a number of factors can play a role in the influence. However, the interviews incorporated this in order to collect more information about the kind of influence the region or place of birth had on the consumer choices. For instance, the desire to have a new experience might make an individual to choose British airways over the air carrier of birth country or region. The interview carried out was very instrumental in bringing out this fact as some of the interviewed customers indicated they chose the air carrier for the desire of having a new experience.
| Influence of place birth |
|
|
Frequency |
Percent |
Valid Percent |
Cumulative Percent |
| Valid |
Yes |
123 |
63.4 |
63.4 |
63.4 |
| No |
71 |
36.6 |
36.6 |
100.0 |
| Total |
194 |
100.0 |
100.0 |
|
The pie-chart below provides a better graphical illustration of the way the respondents perceived their place of birth to influence the choice of British Airways for the air travel services.
Another question required to state the frequency of travelling with British Airways or using the products of the air travel carrier. The results of the responses are represented by the pie-chart below.
4.2.3 Knowledge about the Country:
There was no doubt that all the respondents believed that the country of origin of British Airways is a developed country as the response rate indicated 100% (representing 194 responses) for those who strongly agreed that to their opinion the country is a developed country. In addition, most respondents had familiar knowledge of the country from which British Airways originates indicating they were well familiar with the country and its culture, the location, economy and such country attributes. This represented 54.1% of the respondents further representing a frequency count of 105 responses. Those who had some knowledge of the country represented 44.8% of the responses and this accounted for 87 participants. The proportion of those who had no knowledge of the country represented 1.1% accounting for 2 participants only. The graph below provides graphical illustration of the representation of the outcome developed using excel from SPSS data output.
It is therefore justified to conclude that the greatest proportion of the participants of the study had knowledge about the country of origin of British Airways and which was essential in making decisions when making purchase choices.
4.3 Inferential Statistics
Tests of distribution trend of the sample were not carried out on the collected data because the analysis was based on the assumption of normal distribution of the target population and hence the sample was deemed to follow characteristics of the Gaussian distribution model. All the inferential statistical analyses were based on this fundamental assumption. As already laid out in the methodology chapter, the significance level is accepted or rejected based on 0.05 standard value. One-way analyses ANOVA are carried out in the inferential statistical analysis. Correlation analyses are also carried to determine if there is any correlation between the consumers’ behaviour toward British Airways and other determined factors such as demographic characteristics and other aspects.
Part of the research study sought to investigate the willingness of the participants to use products offered by British Airways when the prices of the two air travel carriers changed in different ways. The participants were required to indicate their willingness to buy by choosing one of four options, which were coded 1 to 4 to aid in easier analysis. All the supplementary information about the options and other information are provided in the appendix in the attached questionnaire.
There was a strong positive correlation between the consumers’ choice of British Airways and their knowledge of the country of origin. From the correlation tests, it is clear that there exists a positive correlation between the consumer knowledge of the UK and the choice of the national carrier for airline services from all aspects of consumer characteristics, with statistical significance in all the factors measured. With a high level of correlation established between the country development status and the country of origin being an important factor that influences the consumer choice (.944, p<.001), indicating that a high number of respondents were keen on the fact that the country of origin is important when making purchase choices and the influence is even more positive when the country is developed. Willingness and the ability of the consumers to purchase a product when they do not have knowledge of the country of origin of the product seems to diminish since there is a strong positive correlation between the consumers’ feeling that the country of origin influences their choices and the fact that they would refuse to make any purchases if they don’t have knowledge of the country of origin of the product on offer. With a Pearson Correlation coefficient of 0.794 and p= 0.042, it shows that this relationship is strong, positive and statistically significant. Moreover, when correlation analysis was conducted for the relationship between consumer attachment of quality to the country of origin and country of origin influence, there was still more evidence indicating a statistically significant correlation between the two aspects (with Pearson correlation coefficient = .842 and p= 0.048). This provides more evidence that country of origin effect is instrumental in determining consumer perceptions about British Airways.
Correlations
|
Country Developed |
Refuse to purchase when no Knowledge |
Attach quality to country of origin |
| Country Influence choice |
Pearson Correlation |
.944 |
.794 |
.842 |
| Sig. (2-tailed) |
.001 |
.042 |
.048 |
| N |
194 |
194 |
194 |
| Quality & Country of origin |
Pearson Correlation |
.744 |
.681 |
1.000 |
| Sig. (2-tailed) |
.034 |
.056 |
.000 |
| N |
194 |
194 |
194 |
|
|
|
|
|
|
|
|
Using a one-way ANOVA, it was tested whether there would be a change of the consumer perceptions about British Airways if the prices of its products or the prices of the products offered by another carrier of the consumers’ choosing changed either through price increase or price reduction. To achieve this, the null hypothesis tested was that there is no relationship between willingness to buy and the price changes. This hypothesis was accepted at the significance level of 0.05 (F=3.12, p=.08). The analysis revealed that there was no statistically significant difference between the interviewees’ willingness to buy British Airways products and their motivation to buy products of any other carrier when the two carriers are from the countries with similar attributes.
CHAPTER FIVE:
5.0 CONCLUSION AND RECOMMENDATIONS
5.1 Conclusion
The main aim and objective of the study was to establish the existence of or lack of existence of the country-of-origin effect in impacting consumer behaviour and choices in British Airways in China. Alongside this aim and objective, the study explored the various factors that enhance or might influence the type of decisions made by consumers when choosing a product, which in this case are British Airways products. Through a creational study based on the responses of the selected sample, the findings of the study were analysed in order to determine the specific factors that contributed to consumer perceptions toward British Airways products as a product made in the UK. Consumer behaviour, especially the buying behaviour, is a product of a multiplicity of factors related to marketing, customer care at the point of sale and product attributes, thereby, making it possible for the consumers’ purchase decisions to be influenced by the interplay of many factors, and most of them are tackled under the literature review. Some of the factors reviewed, and which influence the consumer purchase decisions, include the price of the products, advertisement, branding and placement or positioning of the customer care centres.
The sample used in the study targeted individuals of male and female genders from the age of 18 and above. With regard to the aspects of consumer perception toward the country of origin of British Airways among consumers, a number of instrumental factors were identified. First, the consumers’ place of birth was identified as one of the factors that played a non-invigorating role in influencing the consumers’ choice of British Airways carrier. In contrast, there was no statistically significant relationship between the gender of the respondents and their perception toward British Airways based on the coo cue.
There was a strong positive correlation between the consumers’ choice of British Airways and their knowledge of the country of origin. From the correlation tests, it is clear that there exists a positive correlation between the consumer knowledge of the UK and the choice of the national carrier for airline services from all aspects of consumer characteristics, with statistical significance in all the factors measured. With a high level of correlation established between the country development status and the country of origin being an important factor that influences the consumer choice (.944, p<.001), indicating that a high number of respondents were keen on the fact that the country of origin is important when making purchase choices and the influence is even more positive when the country is developed. Willingness and the ability of the consumers to purchase a product when they do not have knowledge of the country of origin of the product seems to diminish since there is a strong positive correlation between the consumers’ feeling that the country of origin influences their choices and the fact that they would refuse to make any purchases if they don’t have knowledge of the country of origin of the product on offer. With a Pearson Correlation coefficient of 0.794 and p= 0.042, it shows that this relationship is strong, positive and statistically significant. Moreover, when correlation analysis was conducted for the relationship between consumer attachment of quality to the country of origin and country of origin influence, there was still more evidence indicating a statistically significant correlation between the two aspects (with Pearson correlation coefficient = .842 and p= 0.048). This provides more evidence that country of origin effect is instrumental in determining consumer perceptions about British Airways.
The one-way ANOVA was used to test whether there would be a change of the consumer perceptions about British Airways if the prices of its products or the prices of the products offered by another carrier of the consumers’ choosing changed either through price increase or price reduction. The analysis revealed that there was no statistically significant difference between the interviewees’ willingness to buy British Airways products and their motivation to buy products of any other carrier when the two carriers are from the countries with similar attributes.
5.2 Recommendations
The study was a successful investigation into the effect of the country-of-origin cue on the perceptions of consumers in making their purchase choices based on their knowledge and perceptions toward the country from which the products originate. While the study has established that there is evidence suggesting presence of the country of origin effect, consumer perceptions and behaviour are highly dynamic and changing based on many other environmental factors. This research paper recommends that future studies should focus on a number of areas to enhance the knowledge and understanding about the country of origin effect on consumer perceptions. First, the studies should focus on integrating the coo cue into the vast arena of other factors to shed light on how the various factors would act together to influence consumer choices and perceptions. This would be very essential in boosting the understanding of how other factors such as culture, promotion, branding, geopolitics and price among other factors may act together or collaboratively to create influence on the consumer and to what degree they are likely to do this. Probably if a way is devised that can help in quantifying the effect, for instance through multiple regression models, it would be key to bettering the understanding of consumer behaviour in general. Secondly, in the willingness to make a purchase based on the consumer perception toward the target country, this study allowed the participants to choose another carrier of their choosing and indicate their perceptions toward British Airways based on various changes that would happen to both the carriers. Future studies should therefore focus on comparative approaches that would bring out how consumers perceive different countries of similar or almost similar attributes.
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