Usage-Situational Influences on Perceptions of Product-Markets: &Nbsp; Theoretical and Empirical Issues

Rajendra K. Srivastava, University of Texas at Austin
ABSTRACT - Cognitive approaches for the modeling of consumer choice and product-market structures have generally been based on the perspective where product-markets may he defined as consisting of those products that are purchased by the same consumers who presumably desire the same benefits/costs that products may offer. However, products and consumers are embedded in an environment which may influence choices. This paper reviews the affect of environmental (in particular, usage-situational) conditions on perceptions of product-markets and raises a number of research issues.
[ to cite ]:
Rajendra K. Srivastava (1981) ,"Usage-Situational Influences on Perceptions of Product-Markets: &Nbsp; Theoretical and Empirical Issues", in NA - Advances in Consumer Research Volume 08, eds. Kent B. Monroe, Ann Abor, MI : Association for Consumer Research, Pages: 106-111.

Advances in Consumer Research Volume 8, 1981      Pages 106-111

USAGE-SITUATIONAL INFLUENCES ON PERCEPTIONS OF PRODUCT-MARKETS:   THEORETICAL AND EMPIRICAL ISSUES

Rajendra K. Srivastava, University of Texas at Austin

ABSTRACT -

Cognitive approaches for the modeling of consumer choice and product-market structures have generally been based on the perspective where product-markets may he defined as consisting of those products that are purchased by the same consumers who presumably desire the same benefits/costs that products may offer. However, products and consumers are embedded in an environment which may influence choices. This paper reviews the affect of environmental (in particular, usage-situational) conditions on perceptions of product-markets and raises a number of research issues.

INTRODUCTION

Deterministic brand preference/choice models are generally based on the premise that products are valued for the attributes they possess and that customers seek to maximize their "utility" by choosing/purchasing desired combinations of attributes. Thus products/brands offering similar combinations of (levels of) attributes are likely to be more substitutable/competitive. This perspective is widely maintained in consumer/marketing research as evidenced by the formulation of multi-attribute attitude/preference models (see Wilkie and Pessemier 1979) and associated methodologies such as perceptual mapping (see Shocker and Srinivasan 1979). These models/techniques portray differences in preference among consumer segments by means of their objectives (ideal-points) and/or trade-offs (importance weights) for the benefits/costs associated with the dimensions of the attribute space. Though the conceptualization is intuitively appealing, the validity of the approach has been questioned by several researchers who have noted the discrepancy between attitude/preference and actual behavior/choice.

First, the proponents of the notion that customer choices are the result of multiple stabs choice processes (Bettman 1979, Wright and Barbour 1977, and Payne 1976) would contend that the importance weights, and indeed the set of items under consideration for usage or purchase, would depend on the stage of information processing. In the initial stages of information processing, the emphasis is on screening alternatives in order to minimize information overload, there is a tendency for individuals to use lexicographic rules. In subsequent stage(s) there is an increasing tendency to employ compensatory strategies. The implication of this notion is that the attribute weights and ideal points that are derived could be a function of items included in the preference elicitation task (structured by the research) and the subsequent modeling of these data as a single-stage choice process could be misconceived.

Second, there is the contention that the first choice (most preferred item) attitude or preference models used for predicting customer behavior fail to recognize that customers often choose multiple items from a product class. For example, if a subject furnishes a preference ranking of Coke, Pepsi and Seven-up, yet purchases only Coke and Seven-up for consumption, the discrepancy between preference and choice could be explained by the notions of: (1) dominance--Coke dominates Pepsi but not Seven-up on all attributes (see Huber and Reibstein 1977), and/or (2) attribute satiation--where customers are seen as seeking balance among the attribute levels of a set of items (Farquhar and Rao 1976, McAlister 1979).

Finally, recent research has clearly illustrated the importance of environmental influences in determining consumer choice (Belk 1974, 1979, Srivastava. Shocker and Day 1978, Srivastava 1979, 1980, Kakkar and Lutz 1975). At a conceptual level, situational influences may be seen as moderating the importance of benefits that customers seek. For example, within the broad markets for "beverages," the usage context "at a picnic" may make the attribute "refreshening ability" more salient than in the usage context "after dinner."

The concepts of environmental influences, multiple choice and multistage processing appear to be quite consistent. In the initial stage(s), simplifying strategies may be used to reduce the number of alternatives to be examined at subsequent stages. A customer may first develop consideration sets of products based on their functional attributes, i.e., those characteristics that are in some sense "required" in the environmental context. Subsequently, they may examine this reduced set of alternatives on the basis of attributes still considered important, but along which the alternatives in the reduced set vary in terms of the "level of attribute'' present in order to determine their final choice (see the concept of "determinant" attributes--Myers and Alpert 1968). Different environmental contexts are likely to lead to varying consideration sets and consequently multiple choices. Thus, rather than merely contend that customers seek a balance among attributes presumably due to either variety seeking or satiation, an alternative (and perhaps more explanatory) perspective is that environmental requirements dictate the importance of product attributes, and that consumers develop a product portfolio that reflects the set of situations they expect to encounter.

Though environmental influences seem to provide a vital link between preference and choice, there are unfortunately numerous types of such factors that could be relevant (e.g., physical and social surrounding, task definition, antecedent conditions, and temporal perspective; see Belk 1975). This paper attempts to provide a conceptual framework where the purpose of the research, or the decision context within which product market structure is to be used, is seen as moderating the importance of the types of environmental variables.

A CONTINGENCY MODEL FOR MARKET RELATIONSHIPS

The derivation of product market structures is dependent on two considerations: (1) the choice of a measure of the degree of competition, or its surrogate substitute ability, between products (for example, perceived similarity between product-pairs), and (2) the choice of an appropriate data-reduction technique for analyzing the inter-product similarities (for example, multidimensional scaling, cluster analysis). In their comprehensive review of customer-oriented (based on demand, rather than supply considerations) approaches for identifying pro-duct-markets, Day, Shocker and Srivastava conclude that "the suitability of different methods (measure-technique combination) is strongly influenced by the character of the market environment" (1979, p. 18, words within parentheses, ours). Further they conclude that "tile questions of how to identify product-market boundaries cannot be separated from the way results are to be used."

Exhibit 1 presents a framework that relates the market environment (types of environmental influences) and the way results are to be used (strategic versus tactical decisions) to the concept of the product hierarchy (Lunn 1972). This framework is partially adapted from Arndt's (1976) conceptualization of the relationship between competition at various levels (brand, product-variants, product types) of the product hierarchy, specificity of customer needs, and types of situational influences.

EXHIBIT 1

A CONTINGENCY MODEL FOR MARKET RELATIONSHIPS

The "decision frame" (column 1) is related to the breadth of market that is likely to be of managerial interest. Very narrowly-defined boundaries appear adequate for short-run, tactical decisions (Day, Shocker, and Srivastava 1979) for which management is mostly concerned about the current and direct competition from the brands of rival firms. On the other hand, the long-run strategic decisions, management is concerned not only about the current and direct competition from very similar brands but also the potential, less direct competition from other product-variants/types which may be more substantial threats in the future due to changed economic conditions, regulations or shifts in consumer needs. Therefore, for strategic decisions, broader market definitions would appear to be more appropriate.

Columns 2 and 3 reflect the relationship between the levels of the product hierarchy and the specificity of consumer preferences. It must be emphasized that these levels are not discrete but represent points along i continuum such that the extent of direct competition decreases as one comes down the hierarchy (from brands to product categories). Totally different product-types exist to satisfy significantly different purposes in different situations. For example, in the market for hoc beverages, coca and coffee may serve purposes such as nutritional value and keeping awake. Product-variants are available within the same overall product type and are likely to be more competitive in the short run. For example, ground and instant coffee can be expected to compete more directly. Finally, brands within the same product variant compete even more directly. For example, brands of instant coffee are very similar in the purposes they serve. The specificity of customer preferences may be related to the notion of the product hierarchy via the conceptualization that consumer decision-making may be a hierarchical or multi-stage process where simplifying strategies (rules of thumb) may be utilized to eliminate product types, variants, and brands sequentially. For example, a person considering the choice of a beverage may discard cocoa since his primary objective might be to stay awake, then ground coffee, as it may require too much effort to prepare and finally choose among various brands of instant coffee on the basis of flavor. This example is quite simplistic, yet it serves to illustrate the process that is likely to occur in a more subtle manner.

Though environmental factors influence customer choice, different types of situational factors are likely to affect competition at various levels of the product hierarchy through their influence on the customer choice process (specificity of preference). For example, adopting Hansen's (1972) categorization of the types of environmental influences again considering the beverage example, social influences (peer pressure) and cultural norms may affect the choice between tea and coffee. If the coffee route was chosen, the consumption or usage-situation (e.g., while entertaining guests versus grabbing a quick cup) may determine the choice between instant and ground coffee. Finally, if instant coffee were the chosen route, communication (advertisements, word-of-mouth communication regarding flavor) or point-of-purchase factors (coupons, displays) may influence the choice among brands of instant coffee. This is not to say that the different types of environmental influences affect discrete levels of the hierarchies. Column 4 depicts the likely domains of influence of the various types of environmental influences (column 5). Further, it is important to realize that the distinctions drawn in the previous paragraphs do not categorically imply, for instance, that cultural factors do not shape brand preferences. Though cultural factors primarily affect competition between product types, their influence at the higher (e.g., brand) levels of the product hierarchy will be indirectly based on: (1) the sequential conversion of diffused goals/preferences into more specific ones, and (2) the dependence of the less stable factors on the more stable ones (for example, cultural norms may determine the relevance of usage-situations as well as the frequency with which they arise for different individuals).

The relationship in Exhibit 1 may appear to represent an "all-encompassing" model of customer behavior and certainly cannot be verified within the scope of a single research. However, scattered pieces of previous research verify portions of the framework. For example, Miller (1975) and Srivastava, Shocker and Day (1978) observe that anticipated usage situations appear not to affect preferences at the brand level.

PERCEPTIONS OF PRODUCT MARKETS: RESEARCH ISSUES

Response Homogeneity and Deterministic Choice Models

Belk (1979), Srivastava, Shocker and Day (1978) and Srivastava (1979) observe a high degree of response homogeneity among subjects when the effects of the usage-situation are controlled for, while previous researches which ignore situational influences note the discrepancy between preference and choice ("error variance") as well as the differences among individuals ("heterogeneity"). Some of the error variance and heterogeneity may be due to the fact that choices are situation-specific (while the elicited preferences were not obtained as such), and different individuals may have given their preferences with varying usage or consumption situations in mind. For example, if a respondent is provided several brands of instant and regular coffee and asked to rank order preferences, she/he may do so keeping "flavor" in mind and provide higher ranks to the regular coffee brands. Another respondent may perform the task with "ease of preparation" in mind and provide relatively higher ranks to the instant brands. However, both may actually use instant coffee when in a hurry and regular coffee while entertaining. The above self-serving and somewhat simplistic example illustrates that both error variance and respondent heterogeneity may be attributable to the ambiguity of the response task. Accordingly, as argued by Rokeach and Kliejunas, we must elicit attitudes toward objects within a situation if we are interested in predicting situation specific behaviors (1972).

The adoption of situational influences in consumer choice models is equivalent to contending that the usage situations affect importance weights and/or ideal points (Srivastava 1979, Hagerty 1980, Miller and Ginter 1979, Pekelmen and Son 1976). It is much less likely that perceptions of attribute levels would be affected. The specification of the situational variables may be expected to more clearly define the attributes that customers seek, and further, simplify the Judgmental task. Consequently one may expect greater homogeneity between respondents and less error variance. That is, the explicit consideration of situational influences should allow for a more deterministic view of customer behavior (Srivastava 1980). Bass notes that "it will never be possible to prove conclusively that behavior is fundamentally deterministic since it will never be possible to measure all the variables which influence choice" (1974, p. 2). While it is hard to dispute this statement, the explicit consideration of situational influences enables a more deterministic (and correspondingly more explanatory) view of customer behavior.

Situational Taxonomies

Though this deterministic conceptualization is appealing in terms of its ability to account for discrepancy between preference and choice, the estimation of the distribution of attribute weights remains a very real problem. Additionally, even if the distributions were estimable, we would not know the relationship between attribute weights and different types of situational influence. This kind of understanding is more probable if a taxonomy of situational influences (which enables the explicit, systematic consideration of environmental factors) is developed.

In general, two approaches have been followed in an attempt to develop situational taxonomies. Neither is totally satisfactory. The first has sought to classify situations by the nature of the psychological processes which they lead to. For example, Kakkar and Lutz (1975) attempt to classify situations in terms of Mehrabian and Russell's (1974) dimensions of pleasure, arousal and dominance. The advantage of this approach is that the focus is on the situation as perceived by the individual, and that is parsimonious and general (applies to all product contexts). Unfortunately, the psychological taxonomic dimensions appear to have little systematic effect on preferences (Kakkar and Lutz 1975).

The concept of a general taxonomy of situational influences for the moment appears unlikely to be realized. This is because situational influences that affect some consumer behaviors (e.g., the choice of "high-involvement'' products such as automobiles) could be entirely different from those that affect other behaviors (e.g., the choice of "low-involvement" products such as soft drinks) (Balk 1979). However, product-specific taxonomies based on objective situations (factors external to consumers that may lead to differences in elicited behavior) may be easily constructed by following procedures outlined in Fredriksen's (1972) article and as implemented by Srivastava, Shocker and Day (1978) in the "breath freshener" market and Belk (1979) in the "clothing'' market. While the objective taxonomies appear to be better descriptors of consumer behavior compared to psychological taxonomies, they present a major drawback in that situations may have to be defined in great detail to the point where the number of variables is massive enough to make reliable measurement and meaningful analysis impossible (Lutz and Kakkar 1975, Russell and Mehrabian 1976). However, the efforts devoted to developing objective situational taxonomies (Belk 1975, 1979, Srivastava, Shocker and Day 1978, Srivastava 1979) have generally resulted in two or three taxonomic dimensions that are adequate for explaining most of the situational variance.

The key point is that in the creation of situational taxonomies we ate interested in those aspects of the environment that affect consumer behavior. Although the total number of situations that persons encounter is enormous, and each situation is unique and the likelihood of exact replication is exceedingly small, it is undoubtedly also true that people do not behave differently under all such changed circumstances. Prior learning and usage experience are integrated into relatively routinized responses (Howard and Sheth 1969) in many of these instances. Many authors have argued that humans have relatively limited capability for processing information and problem solving (see Slovic 1972, Bettman 1979). They develop heuristic or simple rules of thumb that enable them to deal with complex situations. They appear to categorize prior learning and experience in memory and base choices and decisions on such categorizations (Rosch 1978). Consequently, respondents may evoke similar categorizations or stereotyped uses that are represented in a simple way in memory.

Situational/Lifestyle Segmentation

The apparent homogeneity of consumer response when situational influences are controlled for suggests the possibility of situational segmentation. That is, pro-duct-markets and competitive effects can be examined within "situational submarkets". This line of inquiry may lead to interesting research issues as certain situational types are likely to occur with differing frequencies for different consumer segments. Subsequently, the identification of lifestyle, cultural, demographic or other factors which effect the frequency of occurrence of situational types can offer better opportunities for targeting marketing efforts to those people who experience relevant (for use of specific products/ brands) with greater frequency.

Measures of Substitutability

Traditionally, marketing researchers have focused their attention towards examining competition between brands, perhaps partially due to the demands placed by the utilizers of research who may be besieged with the more immediate (tactical) decision-contexts. Within these contexts, where narrowly-defined markets (e.g., brands of instant coffee may be adequate, the traditional focus on point-of purchase (display, shelf-level/space) and communication (advertising, promotional activities) influences certainly encompass the primary environmental factors affecting customer choice. Moreover, these brands are likely to be very similar (in terms of physical characteristics/functions served/benefits provided) and are likely to be used for the same usage/consumption situations(s) by the same customers (with similar social/cultural backgrounds). In this context, one cannot question the adequacy of the mere familiar measures of inter-product similarity (a surrogate for substitutability) such as: (1) similarity of brand attributes - correlation or "matching" coefficients between brands across attributes, (2) overall perceived similarity - as measured by similar-dissimilar brand-pair ratings (Jain and Etgar 1975) or by sorting brands into groups and subsequently obtaining a similarity measure based on the proportion of times brand-pairs were sorted into the same group (Bourgeois and Haines 1975), and (3) direct measures of substitutability - such as Pessemier's (1975) "dollar-metric" measure or other measures eliciting the degree of substitutability between brand-pairs on a rating scale.

However, when the interest lies in developing market structures for strategic decisions, it is desirable to not only understand the immediate competition (i.e., at the brand level) but also the nature of the competition between product variants/types that may be potentially competitive. When the interest lies in examining the competition between product variants/types, usage-situational influences begin to play an important role because: (1) products may be substitutable under some circumstances (usage situations), yet may not compete under others, i.e., products may have multiple uses which may not overlap completely between product pairs and the appropriateness for use of a product may depend on the "match" between product benefits and the requirements of the usage-situation (Belk 1974, 1979, Stefflre 1971, Srivastava, Shocker, and Day 1979), and (2) customers may develop "assortments" or collection of products in order to be prepared to meet the future contingencies across diverse, anticipated usage occasions (Wind 1977).

It would appear from the previous paragraph that for strategic marketing decision-making where broader market structures are desirable, "substitution-in-use" or the similarity of product usage patterns would provide a managerially relevant measure of inter-product substitutability. Further, since product variants/types need not have all attributes (benefits/characteristics) in common, the more traditional measures (e.g., similarity of product attributes) may be "discontinuous" when applied to study competition at the lower levels of the product hierarchy (this problem can be alleviated To some extent by the use of discrete multivariate methods to analyze the data). This does not imply that the more traditional measures are irrelevant but merely that substitution-in-use appears to be better-suited for developing broader market structures. Indeed, it may be useful to adopt a two-stage methodology where substitution-in-use is first used to develop the broader market structure and to identify the discontinuities in this space. Then, within each situationally defined submarket, the traditional measures may be employed to obtain a better understanding of the more direct competitive relationships (Shocker and Srinivasan 1974, 1979). Additionally, if the relative frequencies of taxonomic cells are obtained it should be feasible to predict the assortment of products that individuals are likely to purchase to serve their needs across anticipated usage-situations. As mentioned earlier, this offers an alternate explanation to attribute satiation for modeling multiple choices.

DISCUSSION

Throughout this paper there has been an emphasis on the matchings between situational requirements and product benefits/attributes. This interaction is to be expected and indeed has on occasion explained more variance than some main effects (see Kakkar and Lutz 1979 for details). However, the close correspondence between situational factors and product attributes leads to the question: "What are situational factors?" Belk (1974, 1975) proposes that environmental factors should include all variables not included in the description of persons or products. This exclusion rule is debatable, especially given the differences in training of researchers. For example, social norms may be seen as an environmental influence by sociologists, yet modeled as person factors in the prediction of behavioral intentions (Fishbein and Ajzen 1975). However, as long as relevant influences are included, no matter how they are modeled, we should develop a better understanding of consumer behavior.

The response homogeneity between individuals under situational control appears to indicate the absence of the person-situation interaction. This may be an artifact of the research samples (primarily students) which may a priori have been expected to be homogeneous. Other evidence suggests that individuals may be expected to respond differently to the same situation. For example, "Internals" may be expected to be influenced less by environmental circumstances compared "Externals" (Rotter 1966).

In summary, this paper has provided a review of environmental influences on consumer behavior. Situational influences were seen as moderating consumer choice. A contingency model showing the dependency between the specificity of competition (direct to less direct, based on the level of the product hierarchy) and the types of situational influences was proposed. This was used to suggest that usage-situational influences were likely to directly affect non-brand competition. However, if consumer choices were indeed made through multi-stage processes, usage situations may indirectly affect competition at the brand level. A variety of implications of usage situational influences were discussed including response homogeneity across persons, multiple choice or variety seeking, measures of product substitutability, deterministic choice models, segmentation, and types of situational taxonomies. The validity of each of these implications is researchable. It is hoped that this paper will lead to further exploration of environmental factors in consumer/marketing research.

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