Citation
(2015), "Executive summary “Can you do something about the price? – Exploring the Indian deal and bargaining-prone customer”", Journal of Consumer Marketing, Vol. 32 No. 5. https://doi.org/10.1108/JCM-08-2015-037
Publisher
:Emerald Group Publishing Limited
Executive summary “Can you do something about the price? – Exploring the Indian deal and bargaining-prone customer”
Article Type: Executive summary and implications for managers and executives From: Journal of Consumer Marketing, Volume 32, Issue 5
This summary has been provided to allow managers and executives a rapid appreciation of the content of this article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefits of the material present.
Small neighborhood outlets play a major part in India’s total retail market. Such stores are referred to as “kirana” stores and are expected to drive much of the expected retail growth in the Indian market to 2020.
Different researchers point out that marketers must be cognizant of this format and the customers it attracts to gain proper understanding of the retail context within India. For example, neighborhood stores will often pass on to the customer any benefits afforded to them by manufacturers. Such gestures appeal to the typical Indian consumer, who is driven by a desire to obtain value for money in their transactions. In addition to being attracted by deals, consumers also engage in haggling as a means to negotiate a favorable price.
The practice of bargaining is steeped in history. However, the advent of fixed prices has led to its disappearance in the majority of product categories within Western contexts. Only in a few sectors which include insurance, automobiles and travel services does it continue to prevail. A contrasting picture is evident within many other cultures. Bargaining remains a normal practice and helps create longer-term associations between buyer and seller. Among the various tactics used by participants hoping to strike a bargain in India are polite negotiations, a show of disinterest or simply walking away.
Extant literature distinguishes between bargaining proneness and deal proneness. Where bargaining is concerned, individuals haggle to try and secure the best outcome for themselves. Deals differ in the fact they are generally available to others, such as in the form of coupons and flyers. Researchers note that consumers can be disposed toward deals in general or to specific types of promotion. The focus here is on generalized deal proneness, which relates to an increased inclination toward buying products offered at an attractive price. Deal proneness is described as being active or passive, depending on whether a consumer intentionally seeks out a deal or simply responds to an in-store offer that he or she encounters.
To build a profile of consumers inclined toward deal proneness and/or bargaining proneness, the current study examines certain types of consumer characteristics:
Value consciousness: Such individuals seek economic benefits by obtaining quality products at lower prices. Perception of value increases as the price falls. Evidence suggests that deal-prone consumers are especially conscious of achieving value. Being aware of price is likewise seen as a trait of those eager to haggle with a seller to increase the value obtained by purchasing the product;
Price mavenism: This is linked to the acquisition of hedonic benefits. Consumers identified as price mavens are those who are knowledgeable about price information and where to obtain the lowest prices. They enjoy imparting their expertise to other consumers and talking about their shopping experiences. Having such knowledge enables mavens to evaluate deals and bargains;
Distinctiveness: People rating high in this personality trait like to feel individual and unique. Being given certain privileges and special treatment therefore helps to create these feelings of being exclusive. Given this propensity, Dawra et al. contend that consumers of this type will be more associated with bargain proneness than deal proneness. The rationale is that deals are widely available, whereas a bargain is secured through one-to-one negotiation or haggling. Achieving their objective through such means can prompt the desired sense of uniqueness. No link is anticipated to deal proneness in general, although it is acknowledged that certain individuals who need to feel special might be prompted to actively seek out coupons or other deals; and
Play orientation: This relates to those who might be described as fun seeking. A desire to play is strong and shopping is regarded as an activity which brings enjoyment. Bargaining affords them that fun element. The anticipation and excitement prior to obtaining a deal functions similarly. As with bargains, it is suggested that consumers with an outgoing nature are further attracted to deals because of the social interaction involved.
Dawra et al. examine these issues further in a study involving Indian consumers recruited online and at a local shopping mall. A total of 218 usable responses were obtained from respondents whose age ranges from below 25 years old to above 50 years old. Males account for 61 per cent of a sample that is largely representative of urban literate Indian consumers.
Various analyses were conducted and results showed:
Value consciousness positively relates to both bargaining-prone and deal-prone consumers in India.
A positive association between price mavenism and both bargaining-prone and deal-prone consumers in India.
No relationship between distinctiveness orientation and the Indian deal-prone consumer.
Play orientation is positively related to the Indian bargaining-prone consumer.
Contrary to expectation, no connection was found between play orientation and the deal-prone Indian consumer. Similar predictions that distinctiveness orientation would positively relate to bargaining proneness were also not supported.
The lack of connection between distinctiveness orientation and deal proneness was attributed to the fact that generalized deal proneness was the focus of this work. Such an approach was undertaken because the likes of coupons and special sales events are as yet relatively uncommon in India.
Findings here support previous beliefs that attitude toward bargaining is heavily determined by culture. Such practices are the norm in places like China and the Middle East relative to the USA and other Western nations. Relationship building is part of the motivation in some places where bargaining is customary practice. On the contrary, consumers in the West often find it an awkward and embarrassing experience.
It would appear that bargaining-prone consumers in India are most strongly characterized by value consciousness, price mavenism and play orientation. The latter trait is one which distinguishes them from deal-prone individuals, who typically score highly in value consciousness and price mavenism. Consumers in India engage in bargaining because they consider it a fun and enjoyable experience. However, that it is not evidently associated with distinctiveness is perhaps explained by the practice not being unique. In the kirana stores, it is something that all customers are expected to do; therefore, individuals do not feel they have achieved anything special.
The link between mavensim and both types of consumer suggests that people need to feel they possess adequate price-related knowledge and information to successfully haggle or secure the most advantageous deals. According to Dawra et al., the significance of value consciousness could be partly explained by peculiarities within the Indian context. Packaged goods are legally bound to incorporate the maximum retail price (MRP) on the product. As retailers can sell below this price ceiling, the MRP serves to increase concern for price among both deal-prone and bargaining-prone consumers.
Marketers should be able to use the insight into how discounting strategies impact on different Indian consumers to appropriately tailor their pricing policies. Additional work into haggling could examine the issue of whether consumers trust the retailer involved. Another suggestion is to ascertain consumer feelings after obtaining a bargain and if it is an activity they relish or would rather avoid.
Replicating the work to examine differences between different Indian consumers such as urban, rural and bottom of pyramid (BOP). Such work might also help to determine the effect of demographics on deal proneness and bargaining proneness.
To read the full article enter 10.1108/JCM-09-2014-1158 into your search engine.
(A précis of the article “Can you do something about the price? – Exploring the Indian deal and bargaining-prone customer”. Supplied by Marketing Consultants for Emerald.)