Introduction and Background
A common trend in marketing is to advertise “retailer exclusive” products that cut across various products and all types. However, few researchers have focused their attention on the idea and existence of an advertised retailer exclusive productive. Thus, this raises the critical research question of the consumer perception of such advertising and its impact. However, most of the existing literature related to exclusivity often deals with exclusive distribution, luxury goods, brand/product prestige, and even scarce products. Thus, a discussion of luxury products and goods alongside related concepts of prestige, pricing, and scarcity is always provided. While exclusivity is always associated with luxurious goods, other factors such as conspicuous consumption, the need for prestige, and other related factors affect the consumer purchase intention and behavior towards such as a good. According to Shaw and Bagozzi (2018), exclusivity is becoming a common trend associated with products that are available for spontaneous purchases, convenience goods, and even with products with no luxury connotations. Yet, at the moment, there is little research that has been conducted on the consumer perception and behavior towards exclusivity, more so as this related to the non-luxury products (Trudel, 2019). Thus, while the impression of scarcity and uniqueness might be a common feature in both luxury and in goods labeled as being exclusive, there is a need for a deeper investigation into the existence of non-luxury goods.
Furthermore, the way exclusive goods are designed, advertised, and even priced represent an innovative retailer behavior that has been scarcely researched within the literature. While some exclusive goods and products are advertised in the traditional media (i.e., through print ads, television, etc.) and some are labeled with stickers on the market, the prices of goods and products marked as exclusive are often higher than non-exclusive products (Sima et al. 2019). Furthermore, the consumer perception of the advertised exclusivity is mainly unknown.
Theoretical Background
Black Box Model
The black box model functions by identifying the source of stimuli that is responsible for the specific action by the buyer, such as the advertisement and other existing forms of promotion that will be able to make an individual buy a given product (Jiang and Yang, 2016). The marketer always presents these options, and the environment through which this occurs is dealt with in the buyer’s black box. The black box contains two main components: the buyers’ characteristics and the decision-making process by the buyer. This model is a popular method that is mainly used to describe the psychology of the buyer and the influencing factors that make the buyer buy given products. In contrast, it is not possible for marketers to open a mind, the art of understanding the human psyche regarding the stimulus and how they can respond to given stimuli.
The black box model is a theory of mental consciousness that states that the mind is fully understood through the inputs and the outputs that are well defined and how this is bound by the radical skepticism that exists in regards to the existing possibilities of describing the structure that exists, the mechanism and the dynamics of the state of mind. The working of the black-box model can be explained through the use of two examples (Kotler, 1965). Put, the most effective way to predict whether people will act is to know their will, that is, to predict whether people will act by knowing their will. The above theories can be used in understanding the impact of celebrities on consumers’ behavioral intention. The exclusivity of a product influences the subconscious mind of a given individual into buying a given product. Exclusivity influences the buying decision and the will of a given consumer to buy a product. When they perceive the celebrity to be credible and thus trustworthy, they will be able to change their minds and buy given products without looking at the price.
Engel, Kollat, and Blackwell model of consumer decision
Engel et al. (1968) developed a comprehensive model that could be used to understand the consumer decision-making process. This model is mostly abbreviated as the EKB model. This model is used to understand the decision-making process of the consumer, and they can make decisions given a variety of choices that exists within their domain. The model is built on the field of consumer psychology and is used to understand how the various factors within the domain of the consumer influence the process of decision making. Within this model, the environmental factors influence the decisions that are being made by the consumer and how the same influences the decision-making process. This model is considered to be the most important theory in understanding consumer behavior.
The EKB Model consists of five steps in which influence the decision making a beginning from the information making to the ultimate decision making. The first stage is the information input stage and the recognition of a given need. At this stage, the consumer gathers information from the marketing and the non-marketing sources that will influence problem recognition and the ultimate decision-making. At this stage, if the consumer has not reached a given decision when dealing with particular goods, then the search for the other external goods will be activated for a given decision to be arrived at, or in some cases, the given consumer will be able to create dissonance towards the same since the selected products offer less satisfaction than the expectations that were given.
The second step is the information processing stage, which involves consumer exposure, the attention that the given consumer gives to a particular product, the acceptance of such, and how one can retain information about the product, taking into count the pricing and the discounts that are given. In this case, the consumer should first be exposed to the messages of the retail pricing, should be able to interpret the given stimuli, and even be able to retain the given messages by transferring the same input into the long-term memory space. The third stage is the decision making which focusses itself on the five basic decision making stages such as the problem recognition, the search of alternatives, the alternative evaluation, which takes into account the beliefs that will be able to determine the formation of the attitudes and how the above will be able to impact and affect the after purchase intention and the given outcome. This third stage recognizes the fact that the consumer has many choices and will be able to choose the given product that gives him the highest level of utility. Utility, in this case, refers to the pricing of the product and how the consumer perceives value as well as satisfaction. In the out-of-town retail stores, the decision to either buy by the given consumer depends on how the product is well advertised and even endorsed and how the given consumers will be able to weigh the possible alternatives and how they can make the decisions on the same.
The fourth stage is the variables that influence decision-making. The variables that influence the decision-making by an individual include the individual and the environmental factors that will be able to impact and influence all the five steps in the decision-making. The individual characteristics of the given consumer will refer to the factors such as the motives, the values that are attached with these motives, the lifestyle, and the personality while on the other hand, the social factors will include factors such as the culture, the family set up and the reference groups. Further, the situational factors within reach of the consumer, such as the financial position, condition, and ease of getting the money, will largely affect the process of decision making.
Figure; Model of consumer behavior Engel et al. (1968)
The model has undergone revision and modifications since its early release and has now been modified into the Engel, Blackwell, and Miniard Model developed in 2001. This revised model consists largely of the above variable. The variables and the working relationship in the revised model are the same as the EKB model but have been, in essence, modified. For instance, in the new model, consumption and divestment are some of the new variables that have been added. The model, however, is not without criticism since its inception (Engel, Kollat, and Roger, 1973). In line with the theory of learned behavior, the main setback that exists in the mo0del is the lack of a clear definition of the functional relationships that exist between the various constructs. The above model largely fails to explain how the variables under the study influence the decision making by the consumer is to be made. In essence, the individual and the environmental factors in the model have been criticized as a result of the vagueness and the role that this plays in the eventual decision making. Further, the model has been criticized for being restrictive in accommodating other factors and variables that influence the decision-making process.
Problem Statement
The role played by marketing strategy on consumer behavior in marketing is immense. Various studies have identified the problem of exclusivity, yet many of these studies have conversely given a mixed review of the impact of exclusivity on consumer behavior. There is a need for research that would be able to examine how exclusivity impacts the consumer behavior of would-be consumers. Previous studies viewed many models and theories that play an essential role in target marketing and social media in particular. However, these studies have shown that there is a weakness in the study of models, as the focus of these studies has been mostly on luxury goods rather than on consumer goods. The use of exclusivity is also faced with a lot of risks and uncertainties. Thus, there exists a need to examine the role and impact of exclusive marketing on the consumer’s perception and attitudes.
Literature Analysis
To this very date, the term exclusivity has often been used in legal, marketing, and economics literature while discussing various concepts. Sima et al. (2019) note that most obviously, exclusivity in product and goods markets is often a term used to refer to products that are valuable and are rare. For a long, exclusivity has always been a reserve of studies related to art and clothing industries, while in some cases, studies have used the term exclusively to refer to the promotions or prices or products that are customized to the taste of the consumer. In a study discussion between consumer choice of hedonic and utilitarian goods, Shin et al. (2018) do assert that utilitarian and hedonic motives doe drive all the consumer choice and their consideration. While citing Hamilton (2019), they do describe hedonic goods as being those goods that have consumption motivated by h “an affective and sensory experience of aesthetic or sensual pleasure, fantasy, and fun .”With this in mind, exclusive items doe offer a variety and mix of ways that enhance the product value. The clearest example of this would be in terms of the volume of addition, the unique content, and packing. In a study by Shaw and Bagozzi (2018), they establish that a broad sampling of targeted exclusivity marketing does appeal hedonic rather than in practical nature.
Some researchers within the literature have focused on the shopping experience with exclusive goods. Sima et al. (2020) identify that exclusive goods have the tendency to differ in terms of greater enjoyment in the shopping experience as a unique assortment can give a retailer a unique image in the market. In another study, Wagner, Schramm, and Steinmann (2020) argue that some consumers are often attracted to the unique retailers that offer “a run of the mill kind of store.” That is to say, their attitude towards a given retailed shopping can be enhanced if the retailer is seen as being unique.
Managerial Implications
While the benefits of products exclusivity and leveraging products to amass competitive advantage has been mentioned by various researchers within the context of innovative retailer business models, the full and wider benefits of such a strategy and the impact of how consumers would respond to exclusivity and how consumers would respond to it is largely unknown. This dissertation thus seeks to add literature on this field by addressing the common practice of advertising and labeling of products as being exclusive to a given or specific retailer. However, in addition to discussing a retailer’s reason to pursue an exclusive product strategy, this study would place an important emphasis on how consumers would react to a product being termed as being exclusive and advertised. Since retailers would often employ exclusive products in avoidance of price competition, gain customer lock-in and gain various competitive benefits, this research will attempt to measure consumer relation to the exclusive good and thus draw a conclusion on its efficacy as a sales strategy.
In terms of academic and theoretical contributions, this thesis would be imperative in analyzing a concept that is widely used by marketers but has received little empirical research in the academic jargon. In comparison, the term exclusivity is often associated with scarce goods or luxury goods, moreso with the non-luxury goods acting as a promotional technique in a relatively new paradigm. Within the academic literature, scholars such as Shaw et al. (2020) have labeled exclusive items as being a promotional technique that is relatively innovative. Due to the recency of this marketing strategy in the marketplace, researchers have not had time to properly assess their impact on the market. Thus, this dissertation hopes to fill a gap in the existing literature and thus answer a call for research into “Innovations in Retail Business Models” in marketing. What’s even more is that the relationship between scarcity, exclusivity, and luxury is heavily examined and tied with the theory related to exclusivity discussed. While the idea of perceived exclusivity and its impact on non-luxury products can lead to an even broader understanding of exclusivity in the minds of consumers, this concept of exclusivity would then be expanded beyond the realm of prestige goods and luxury goods.
Summary
There exist many studies on consumer behavior and exclusivity, yet many of these studies have only focused on luxury goods. At first, consumer behavior is the set of activities and behaviors that consumers do while searching for the goods and services they need to satisfy their needs and desires. Consumer behavior does refer to the individual’s mental and physical activity that is involved in the assessment of goods and services and compares them to obtain the best for their use (Furaiji, Łatuszyńska & Wawrzyniak, 2012). Consumer behavior is sequential steps that involve the presence of inputs and outputs controlled primarily by the consumer’s motivations. Consumer behavior is direct and indirect actions by the consumer to obtain a service or commodity. It is worth noting that many factors affect this behavior, and these factors are divided into internal and external factors. Thus, there is a need to examine the problem of exclusivity, not only on luxury goods but on all product categories within the realm of a consumer.
Reference
Bleier, A., Harmeling, C. M., & Palmatier, R. W. (2019). Creating effective online customer experiences. Journal of Marketing, 83(2), 98-119.
De Mooij, M. (2019). Consumer behavior and culture: Consequences for global marketing and advertising. Sage.
Furaiji, F., Łatuszyńska, M., & Wawrzyniak, A. (2012). An empirical study of the factors influencing consumer behavior in the electric appliances market. Contemporary Economics, 6(3), 76-86.
Hamilton, R., Thompson, D., Bone, S., Chaplin, L. N., Griskevicius, V., Goldsmith, K., … & Zhu, M. (2019). The effects of scarcity on consumer decision journeys. Journal of the Academy of Marketing Science, 47(3), 532-550.
Koch, B., 2017. Business Case E-Invoicing/E-Billing.
Kotler, D (2018). Barriers to higher and faster adoption of e-Commerce. In Proceedings of3rd International Scientific Conference Contemporary Issues in Economics, Business and Management–EBM (pp. 697-716).
Kotler, D (2018). Barriers to higher and faster adoption of e-Commerce. In Proceedings of3rd International Scientific Conference Contemporary Issues in Economics, Business and Management–EBM (pp. 697-716).
Kotler, P., 1965. Behavioral models for analyzing buyers. Journal of Marketing, 29(4), pp.37-45.
Krasonikolakis, I., Vrechopoulos, A., Pouloudi, A., & Dimitriadis, S. (2018). Store layout effects on consumer behavior in 3D online stores. European Journal of Marketing.
Kunkel, T., & Biscaia, R. (2020). Sport brands: Brand relationships and consumer behavior. Sport Marketing Quarterly, 29(1), 3-17.
Shaw, S. D., & Bagozzi, R. P. (2018). The neuropsychology of consumer behavior and marketing. Consumer Psychology Review, 1(1), 22-40.
Shin, Y. H., Im, J., Jung, S. E., & Severt, K. (2018). The theory of planned behavior and the norm activation model approach to consumer behavior regarding organic menus. International Journal of Hospitality Management, 69, 21-29.
Sima, V., Gheorghe, I. G., Subić, J., & Nancu, D. (2020). Influences of the industry 4.0 revolution on the human capital development and consumer behavior: A systematic review. Sustainability, 12(10), 4035.
Trudel, R. (2019). Sustainable consumer behavior. Consumer psychology review, 2(1), 85-96.
Wagner, G., Schramm-Klein, H., & Steinmann, S. (2020). Online retailing across e-channels and e-channel touchpoints: Empirical studies of consumer behavior in the multichannel e-commerce environment. Journal of Business Research, 107, 256-270.
write