Väitöskirja:CONSUMER PRE-PURCHASE DECISION TAXONOMY Paperikirjana

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Doctoral desertation

Consumer Pre-purchase Decision Taxonomy

Harri Karkkila

  • Department of Industrial Engineering and Management,
  • University of Oulu
  • Supervised by Professor Pekka Kess
  • Reviewed by Professor Josu Takala Associate professor Kongkiti Phusavat
  • Oulu Finland 2008

Abstract

A high level of customer perceived value is the key to customer loyalty and to the profitability of customers and companies. It is not enough to meet the customer’s needs in order to win customer loyalty. Instead the aim for companies should be to try to delight customers. Customers are delighted when they feel that the product or service not only fulfils their needs and expectations, but also gives them unexpected additional value.

Value has been studied widely and there are several different models and theories to describe customer perceived value. In the main, they tend to be too general or insufficient or they do not provide a useful guide for management practices. Therefore the aim of this thesis is to generate a theory for consumer perceived value which could be useful for managements trying to develop superior value so as to improve their customer loyalty.

Pre-purchase consumer value was examined applying Grounded Theory methodology and by synthesizing the existing research results. The resulting theory from this synthesis consists of three main stages namely, gaining, sacrifice and purchase factors. The gaining stage has three sub elements: substance, reputation and interaction. All these sub-elements have the same four subcategories: emotional, social, functional and economical elements.

What is novel about this research is its treatment of customer perceived value firstly, from the perspectives of the companies – based on three functionally different factors: substance, reputation and interaction – and secondly from the perspective of the customers based on the identified subjective outcomes (i.e. emotional, social, functional and economic factors). Based on this approach companies can develop products based on a better understanding of consumer perceived value.

The theory is described both in mathematical and schematic forms.

Keywords: consumer perceived value, gaining, interaction, pre-purchase, reputation, sacrifice, substance

Acknowledgement

During my work over many years in different companies, and even nowadays in my work as a Consultant helping numerous companies both large and small, I have noticed that the customers are all too often forgotten. The companies’ daily operations indicate that they do not become involved in the world of the customers, nor do they know their customers’ decision-making processes. I have heard the managements complain so often that the customers are only after lower prices and do not understand anything about quality.

This observation aroused my interest in the factors and processes behind customer decisions – ‘whether it is possible to find a model or description of the customer’s decision criteria’. This curiosity led me to choose my research subject ‘The Consumer Pre-Purchase Decision Taxonomy’.

However, to determine the focus of the research was no easy process – instead it demanded a lot of speculation before the research focus was crystallized. Already in the beginning of my research, my supervisor, Professor Pekka Kess, supported my quest by guiding, questioning and greatly encouraging my efforts. I thank him for his ongoing and generous support and tutoring, which certainly must have often seemed hopeless.

During my research, I had the opportunity to be a member of a post-graduate group expertly shepherded by Professor Kess. The group meetings motivated us and helped us deal with our doctoral frustrations and dilemmas. I would especially like to thank other members of that group, Annukka Oiva and Jukka Teräs, for their astute comments and questions and active support through those times.

My comprehension of the reviewing process was in the beginning one of eternal optimism that my research would somehow blossom some fine day. However, it soon became clear that a garden to blossom will need some fine gardeners and my reviewers, Professors Josu Takala and Kongkiti Phusavat, were able to gamely delve into my research to bring forth valuable aspects which had passed me by, but which enabled my research to truly blossom and generate a comprehensible theory. Therefore I thank them for their fine work, and their constructive and invaluable comments.

I froze with terror when I heard that the work should be written in English, but then along my path came Hilary Keller who was not scared off by the challenge of turning my English into presentable academic English. My greatest thanks to Hilary.

The one who bore the heaviest burden was the one nearest to me, my wife Merja, who endured unending speculation, yet managed to keep me on track and was always ready to help at every turn, even though we had to abandon many common moments and interests along the way because all the time ‘I had to write the thesis’. My deepest thanks to Merja to whom I dedicate this thesis.

Hyvinkää 15.4.2008

Harri Karkkila

 

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