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Impulsive Buying in Relation to In-store Communication and Personality Traits Thesis by Elizaveta Guzhavina Submitted in Partial Fulfillment of the Requirements for the Degree of Bachelor of Science in Business Administration State University of New York Empire State College 2016 Reader Tanweer Ali Acknowledgment I would like to express the deepest appreciation and gratitude to Professor Ali for his time, helpful comments, valuable input and his patience while answering my questions. I am also very grateful to my family and friends, who supported me in this endeavor. Table of Contents Abstract…………………………………………………………………..………...….…4 Introduction………………………………………………………………....…...………5 1. Chapter 1. The Impulsive Buying Behavior………………………..…..…..……….8 1.1. The Concept of Impulsive Buying Behavior…………………....……..….…...8 1.2. The Definition of Impulsive Buying…………………………..…..…...….…...9 1.3. The Study of Impulsive Buying………………………………..…..…...……..15 1.4. Impulsive Buying Explained…………………………………..….…...………17 1.5. Theoretical Models of Impulsive Buying Behavior ………….……....….……19 1.6. The Classification of Buying Decisions……………….……….…….………..30 1.7. The Types of Impulsive Buying………………………………….……………32 2. Chapter 2. Factors that Trigger Impulsive Buying Behavior…………...………….34 2.1. The Classification of Triggering Factors……………………………………...34 2.2. The External Factors…………………………………………………………..36 2.2.1. The Product………………………………………………….………....36 2.2.2. Situational Factors Inside the Store…………………………………....41 2.2.3. Environmental Factors………………………………………………….41 2.2.4. Personal Factors………………………………………………………...44 2.3. The Internal Factors…………………………………………………………...46 3. Chapter 3. The Summary of Research……………………………………………...50 4. Conclusion………………………………………………………………………….56 5. Bibliography………………………………………………………………………..61 Abstract Impulsive buying is a very important concept for many researchers and professionals in several fields – retailing, marketing, psychology and even sociology. Impulsive buying is an act of purchasing something without any prior intention or plan. The phenomenon is wide spread in many developed and developing countries. For more than 70 years many scholars and professionals around the world have been studying the concept and its applicability in business from the different perspectives. One of them is psychological. Scholars single out impulsive buying tendency (IBT) and several personality traits associated with it, which have a substantial impact on impulsive buying behavior, making shoppers very susceptible to the sudden urge to buy. From the marketing point of view, impulsive buyers are an enormous opportunity to increase sales and market share. Knowing how to get into people's minds and what can be a stimulus for a purchase, retailers use various POS (point of sale) materials, creative product design, tempting promotions and arrange merchandise in a very attractive way to trigger the customers' desires to buy. This work is aimed at investigating what impulsive buying behavior (IBB) is, how the concept has been developing in the course of time, and what the theoretical models of it are present these days. Besides, tt will introduce the triggering factors, which have a significant impact on IBB, and with the help of the research summary will finally constitute how big the influence is. Introduction The concept of impulsive buying is not a new one. Already in 1950s, marketing experts started to assess the importance of impulse purchases and its effect on sales in retail stores. At the beginning, there was no clear definition of this concept, since different experts had different opinions on it. To say more, some experts actually doubted if impulse purchases indeed had some significance for the managers of retail stores. They believed that the concept was not reliable enough to have some certain weight in a decision-making process. Obviously, during those times shoppers were not influenced to such an extent by the external factors, such as advertising, like they are now, so probably it was the reason why the concept of impulsive buying was sometimes considered to be irrelevant. But at this day and age, the situation is totally different. Only in the US the amount of impulsive sales is almost 4 billion dollars, making up 80 percent of all purchases from certain product categories (Abrahams, 1997). Moreover, Ruvio and Belk in their study estimated “that about 62% market sales in super markets and around 80% sales in luxury goods can be attributed to impulsive purchase” (2013). No doubt, the numbers will only keep increasing, thus attracting even more attention to the concept. When we go into the store, we as shoppers become a very easy pray for retailers and advertisers. We smell freshly baked bread, notice colorful exotic fruits, fall victims to big price promotions and are tempted to buy a second pack of juice, because it is cheaper together. All the above-mentioned things that we witness on a daily basis are the certain techniques, used by retailers to make us buy impulsively, without considering 5 alternatives or consequences. The in-store communication at present is a highly influential factor, affecting our desires and urging us to purchase something we haven’t planned, before we walked into the store. Marketing stimuli are controlled in such a way as to quickly lure the shoppers to the cash desk. When it comes to impulse, caused by in-store communication, every little detail matters. Smells, music, colors, layouts and point of sale materials – all these incentives are aimed at grabbing customer’s attention and arousing the stimulus in the brain. That’s why retailers and producers have become so inventive nowadays. They must come up with new techniques and cues, in order to engage shoppers into impulsive buying behavior. Impulsive buying nowadays is a very important concept. Such a behavior pattern is present not only in developed nations like US, UK, Germany, but also in the developing ones. Recently there have been a lot of studies dedicated to the phenomenon, conducted in India, Algeria, Malaysia, Taiwan and China to name a few. The scope of the impulsive buying is huge – almost all categories of goods can be bought impulsively, thus presenting retailers, producers and marketers with ample opportunities to directly attract and win customers inside the store. The same applies to the place – impulse purchase can happen anywhere – grocery store, apparel shop, convenience store and of course, online. Though online impulsive buying is a completely different story, it is necessary to point out that this concept gained a bulk of attention in the era of e-commerce, because modern online people are easy targets for businesses, though to trigger an impulse to buy is more complicated online, since a shopper cannot be influenced to the same extent as inside the store. 6 Speaking about demographics, all people can buy impulsively, although some certain age groups or genders tend to be more susceptible to the urge of sudden purchase. For example men are likely to engage into the impulsive buying of leisure and instrumental items, while women fall victims of clothes and other goods, which help them to express their nature and character (Dittmar et.al, 1996). The thesis statement of this work is impulsive buying behavior is significantly influenced by in-store communication techniques and personality traits. In order to support it, the following research questions will be answered: 1. What is impulsive buying? 2. What are the factors, triggering impulsive buying behavior? 3. What impact do external and internal factors have on impulsive buying behavior? Our work consists of three chapters. First chapter is dedicated to the impulse buying concept – we will introduce various definitions, proposed by different researchers, starting from 1950s up to the present day. Together with this, we will discuss the nature of impulsive behavior, contrasting opinions and studies of this phenomenon, the types of impulsive buying and its classification. Second chapter will scrutinize the factors and techniques, influencing the impulsive buying behavior – in-store communication, which includes external factors (situational and personal factors) and internal factors (IBT and personality traits). All these factors will be discussed in detail, as well as their impact on impulsive buying behavior. The third chapter consists of the summary of conducted studies from different cultures and countries. Finally, the conclusion will summarize all research findings based on the surveys, its 7 correlation to the research questions and hypothesis, and subsequently make all the necessary conclusions about the study, as well as proposing recommendations for further research. Chapter 1. The Impulsive Buying Behavior 1.1. The Concept of Impulsive Behavior We would like to start with an introduction of the impulsive behavior concept, since it explains the impulsive behavior of people in general, giving useful insights into the problem of impulsive buying behavior. Pundits in general have studied impulsive behavior for many years. A lot of research was conducted to investigate the correlation between impulsive behavior and social status, age, education and even the presence of father at home (Rook, 1987). Sociologists claimed that the lack of self-control and inability to resist impulses is an attribute of lower classes (Hollingshead, 1949; Whyte, 1943). Freud also emphasized the necessity to control the impulses, since the failure to do that could lead to severe psychological problems. He describes it as a competition between the pleasure principle and the reality principle. In brief, these two forces always compete with each other, and it is highly important for a person to fight the sudden desire for gratification and be aware of the reality and the consequences of his/her choice (Freud, 1920). The problem of impulsive behavior in general is that the impulse is so strong and promising of some immediate pleasure, that only a highly developed human can control himself and assess the consequences of the behavior. Freud claims that it is an indispensable part of the human development, and though the transition from the pleasure principle to the reality principle can be painful, without it a human faces serious internal problems and ambivalence (Freud and Brill, 1949). 8 In general, impulsive behavior is seen as something really bad, detrimental, and disruptive. Impulses are perceived as destructive agents, breaking the normal behavior patter of a person, driving him/her to instant, irrational and spontaneous decisions, which do not take into account consequences. 1.2. The Definition of Impulsive Buying Although the concept of impulse buying is quite old, there are various definitions, trying to explain what it is. Since 1950s the definition of impulsive buying has been continuously developing. Many scholars have made an attempt to come up with the right definition, which would perfectly explain the phenomenon. Applebaum saw impulsive buying as “buying which presumably was not planned by the customer before entering a store, but which resulted from a stimulus created by a sales promotional device in the store.” (1951) Engel and Blackwell, experienced and well known marketing professors from the USA, explained impulse buying as “an action undertaken without previously having been consciously recognized or a buying intention formed prior to entering the store” (Piron, 1991). They believed that before 1968 there was a big number of problems in consumer research, and thus, they aimed at solving them in order to pave the way for future success. Before 1987, when Rook introduced his research on this phenomenon, focus was put primarily on the product and the fact of purchase, disregarding the consumer and his/her personality, emotions or thoughts. Most of the definitions explained the concept from the retailer’s point of view, making it very one-sided and not really helpful. The impulsive buying was seen as a simple formula: “Impulse Purchasing = Unplanned Purchasing + Exposure to a Stimulus” (Piron, 1991). 9 Meanwhile, Dennis Rook in his study shifted focus on the consumer and what was the antecedent for impulsive behavior from the person’s perspective. Speaking about Rook, he specializes in consumer behavior and published a lot of articles and researches on the topic of consumer behavior, and impulse buying in particular. He is a renowned author and consultant in the field. He tackled people’s emotions, thoughts, and moods during the process of impulsive purchase. He believed that it was not only the product itself, which caused the impulse, but a person’s cognition too. His formula was the following: “Impulse Purchasing = a "Hedonically Complex" Experience” (Piron, 1991). Dennis Rook defined impulsive buying in the following way: it occurs when “a consumer experiences a sudden, often powerful and persistent urge to buy something immediately”. Rook mentioned the “the impulse to buy is hedonically complex and may stimulate emotional conflict. Also, impulse buying is prone to occur with diminished regard for its consequences” (1987). Before he came with this definition, Rook had conducted a complex study of 202 adults together with Stephen Hoch in 1985. Professor Hoch is internationally a well-known scholar, who dedicates his time to study consumer behavior, merchandising and price strategies. Together they developed a new way of looking at the impulsive buying behavior definition and explained it with the help of a psychological perspective. He believed that previous studies were extremely limiting and took into account only products and their qualities, completely forgetting about the fact that the impulsive behavior comes from a shopper, not from a product on the shelf, and thus, people’s personality traits must be considered as well. In 1985 two scholars conducted a research, involving 202 adults and developing a “consumer impulsivity scale”, which was used to compare 10 different shoppers’ behavior patterns (Rook and Hoch, 1985). The scholars came up with their own definition on the basis of 5 major elements, which made a clear distinction between non-impulsive and impulsive buying behavior (Rook and Hoch, 1985): 1. A sudden and spontaneous desire to act – this element is characterized by an instant change in the behavior. Such sudden psychological impulse replicates the nature of neurological impulse. Conscious and unconscious mental processes trigger it and the response is more complex (Rook and Hoch, 1985). The behavior of shopper changes indeed very rapidly and demonstrates completely different result at the end. A usual consumer inside the store simply feels an urge to buy something now, without giving it a second thought. 2. Psychological disequilibrium - this feature highlights the psychological state of a shopper when it comes to impulse purchase. Basically, a person doesn’t control his/her emotions and impulses and is totally guided by unconscious mind. Like it was mentioned above, Freud considered an ability to control impulses and abstain from indulging into various pleasures to be of the utmost importance in the process of socialization. Thus, buying something impulsively, an inability to refuse quick gratification and simply having no will power may pose a serious threat to a person. It may detrimentally affect budget, reputation and, of course, psychological health afterwards, since person will inevitably feel quilt and regret after impulse purchase. Such misbalance may deepen a person’s troubles and trigger other types of undesirable behavior. 3. Psychological conflict – this element goes in hand with the previous one. 11 Freud mentioned the struggle between the pleasure and reality principles as a key feature of impulsive behavior, hence a shopper at the moment of impulsive buying behavior engages into this struggle and finds him/herself in a complex psychological conflict. A person has to ponder over the benefits and flaws of the purchase in the long-term, taking into account possible outcomes and consequences. But the easier it is to satisfy the purchase impulse, the harder it gets to say no. And since the nature of impulse is so powerful and overwhelming, a person is caught in a trap, and torn between hard choices of either satisfying the sudden desire or refusing tempting gratification that is so close and real. 4. The reduction of consumers’ cognitive evaluations of the product attributes - this element explains impulsive buying behavior as a low in control behavior, when a shopper gets in an affected and trans rational state (Weinberg and Gottwald, 1982). Shopper’s cognition is switched off and he/she acts unconsciously. The impulse is so strong that a person is not able to think rationally and determine a real benefit or utility of a product. All the attention and determination are now aimed at satisfying the sudden urge and getting the immediate gratification from the purchase, disregarding the real attributes of a product. 5. Consumption with no regard to the consequences - speaking about consequences, this aspect of impulsive buying implies that shoppers, when buying impulsively, tend to close their eyes on the consequences in the long run. David Kipnis, well-known American physician, in his book Character Structure and Impulsiveness (Personality & Psycho-pathology Monographs) mentioned that it may be a cheap chocolate bar or a nice expensive jacket, but 12 if bought on an impulse, without considering the consequences, such behavior may lead to serious “destructive character disorders” as well as health problems (1971). Indeed, while making an impulse purchase, people think only about immediate satisfaction, but later on, when they are back to reality, it may backfire on them quite severely. Howard Wishnie, a famous American psychiatrist, noted that people with impulsive personality "seem to be living in a state of constant but stable chaos (with) little perspective about the future consequences of their current behavior” (1977). Beatty and Ferrell said that “impulse buying relates to immediate purchases, which happen without any pre-shopping objective either to purchase the specific product category or to fulfill a specific need” (1998). They elaborate on the fact that there is no reflection process in impulsive buying, which actually makes it really impulsive. Besides, they distinguished two different concepts - “impulsive buying” and an “urge to buy impulsively”. They believed that an urge to buy precedes the buying behavior, thus it is very closely attributed to the latter. The more urges shoppers face inside the store, the bigger probability of impulsive buying is (1998). Geoff Bayley and Clive Nancarrow, renowned UK scholars, saw impulse buying as a “sudden, compelling, hedonically complex buying behavior in which the rapidity of an impulse decision process precludes thoughtful and deliberate consideration of alternative information and choices” (1998). As well as Rook, they pointed out the hedonic part of the behavior – pleasure from the purchase, gratification and happiness. This vision of impulsive behavior shows how it contrasts with rational behavior, when a shopper carefully assesses the utility of a product and ponders over its benefits in the 13 long run. An American professor, from Washington University, Veena Parboteeah has been interested in the phenomenon as well, and in his PhD research in 2005 presented his comprehensive definition of impulsive buying as “Impulse buying is a purchase that is unplanned, the result of an exposure to a stimulus, and decided on-the-spot. After the purchase, the customer experiences emotional and/or cognitive reactions” (2005). Again, he elaborates on the fact that impulse purchase is always unplanned, so the urge to buy appears suddenly and unexpectedly, without any prior recognition of a problem. At the same time he acknowledges the importance of stimuli in the process of impulse purchase. So, after the exposure to the stimuli, a shopper reacts instantly, without thinking of the consequences, which again depicts a truly impulsive nature of such behavior. Besides, in his definition Parboteeah doesn’t forget the aftermath of an impulsive purchase, pinpointing the presence of emotions or cognitive reactions, such as guilt, frustration or happiness. Badgaiyan and Verma defined impulsive buying as an “individual's desire for abrupt ownership of the product” (2014). They also agreed on the importance of distinguishing between “impulsive buying” and an “urge to buy impulsively” (2014). Such diversity in definitions and their depth can be explained by the fact that over time the whole environment has been changing - consumers, retailers, marketing technologies and other spheres were constantly developing, thus providing the scholars with new challenges and opportunities. Innovations and technologies have also had a great impact on the phenomenon, since consumers are facing new stimuli now and 14 becoming more exposed in general, therefore forcing marketers and retailers to be more inventive and convincing. 1.3. The Study of Impulsive Buying Impulsive behavior is a general concept and can occur in any situation, whereas we focus on impulsive buying behavior that happens inside the store. Taking into account the sudden nature of impulses and human’s irresistible desire for immediate gratification, retailers and marketers have developed an extensive interest in the impulse buying phenomenon. A large-scale research on impulse buying started in 1950s, aiming at investigating how shoppers’ decisions are made inside the store, after the in-store environment affects them. The pioneers in this were The DuPont Consumer Buying Habits Studies. Exactly the DuPont research defined impulsive buying as an “unplanned” purchase (Rook, 1987). By “unplanned” it is meant the difference between the intended purchase list before entering the store, and the actual one at the checkout. After this, an extensive research was held to see the correlation between different products categories and various store environments and the frequency of impulse purchases and in different retail settings (Applebaum, 1951; Clover, 1950; Katona and Mueller, 1955; West, 1951). Further, the studies extended to investigate what particular in-store stimuli are influential enough to make people buy impulsively. For instance the research sought to see the link between certain store merchandise and the frequency of impulsive behavior. Such factors as the number of shelf facings and location turned out to be important for triggering the sudden buying impulse (Patterson, 1963). 15 Certainly, the sociologists and psychologists also sought to find the correlation between demographics, personality and buying impulse. Recognized lifestyle features, gender, societal status and personality traits explained the susceptibility of some people to impulsive buying (Kollat and Willett, 1967). Nevertheless, some experts cast considerable doubts on the concept of impulsive buying. There were several reasons for that. First, the taxonomical research approach was aimed to divide products and services into two categories – impulse and non-impulse, thus directing attention to the fact that not everything can be bought impulsively (Kollat and Willett, 1969; Stern, 1962). Basically they believed that impulsive buying is possible only when it comes to low-price and low-involvement products – snacks, drinks, magazines – all these do not require a lump sum of money to be spent or thorough thought, that is why people are eager to buy them impulsively. Second, there was a problem to come up with an adequate theoretical framework to guide empirical work (Rook, 1987). For example Nesbitt (1959) proposed that a consumer concludes his/her shopping list already in-store, and thus it is mistakenly seen as an “unplanned” purchase. Also, the very term “unplanned” was seen too unclear and indefinite. Pollay pointed out that it is actually difficult to measure how unplanned the purchase really is (1968). Probably one of the most prominent contributions to the study of the phenomenon was made in 1962. It was Stern, who came up with the four types of impulse purchases: planned, pure, reminder and suggestion. He was the first scholar, who managed to 16 classify impulse purchases and thus greatly improving the understanding of the concept. He wanted to divide two concepts – unplanned purchase and impulsive purchase, putting to an end the ambiguity and confusion. For example, he indicated that impulsive purchase involves instant decision combined with a sudden urge to buy, whereas unplanned buying is simply the one, which is not considered prior to visiting the store. In 90s the world saw drastic geopolitical changes, the borders started falling down and globalization processes influenced a lot of people. With the free movement of people and mixing of cultures, scholars took the next step in analyzing impulsive buying – cross-cultural. That is why this phenomenon was studied in many countries – Taiwan, India, and African and Middle East states. The scientists have collected enormous amounts of data from numerous surveys. After analyzing it, they could make necessary comparisons and make interesting conclusions. For instance, South African people were less affected by impulsive buying than citizens of the US (Abratt and Goodey, 1990). In 1998 Beatty and Ferrell put emphasis on situational factors – time and money in particular. They dedicated their studies to find the correlation between person’s emotional cues and time and money availability. In their works the scholars proved the fact that these situational factors have an impact on individual’s personality, triggering the impulse to buy (1998). 1.4. Impulsive Buying Explained So how the mechanism of impulse buying works? How and where it begins? The human behavior is driven by various stimuli or impulses. So those are external agents that influence a human’s behavior pattern. 17 It is important to define a psychological impulse first. It can be described as "a strong, sometimes irresistible urge: a sudden inclination to act without deliberation" (Goldenson 1984. p. 37). The interesting thing about impulse is that it is never planned or consciously considered. On the contrary, it occurs spontaneously, and a person cannot explain the reason for it. When a person is facing some stimulus, the impulse in the brain reacts to it and leads to some action; in our case it is an impulse purchase. The power of impulse is so strong that it maybe extremely difficult to fight the urge and overcome the sudden desire to buy a product. People may react to visual stimuli in store instantly. Spotting discounted juice or ice cream will quickly make you reconsider your initial shopping list. Suddenly, you feel like buying it, so the item ends up in your cart. Or when you are in an apparel store, the suit or dress looks so gorgeous and flattering that the excitement you feel overwhelms the sense. The brain starts working in a wild way – you already cannot imagine yourself without the item, which ends up in your wardrobe consequently. Some people take it to extremes – they animate impulse purchases, somehow shifting the blame on it, as if it were not them who made a decision to buy. For example, one 26 years old male respondent in impulse buying study said: “I was standing in the grocery store checkout line, and the candy bar was staring there at me” (Rook, 1987). Dennis Rook in his consumer behavior studies carried out numerous experiments and collected hundreds of responses from people of different age groups and gender in order to see what triggered the impulsive buying behavior and what cognitive reactions a shoppers experienced during the sudden desire to buy. He did not neglect the importance of psychological aspect in his research, for this reason he was successful in 18 his endeavor. Other scholars from psychology and marketing have been trying to explain the phenomenon as well, using various frameworks and models, striving for a comprehensive explanation. The six following models will be presented in the next section. 1.5. Theoretical Models of Impulsive Buying Behavior The Reference Point Model In 1991 Stephen Hoch together with a behavioral science professor George Loewenstein developed a theoretic model based on reference points in order to investigate why consumers have a sudden impulse of buying something. They wanted to explain why shoppers tend to behave irrationally, rejecting to see the consequences of their impulse purchase. For this reason, the scholars had to study the connection between rational and hedonic motives of a shopper and integrate those two different sides into one model. Apart from this, the professors presented certain consumer tactics used to fight that sudden urge and regain control over the emotions. The concept of reference point can be explained by the fact that when a shopper is exposed to a product, he/she is overwhelmed by the urge to buy it. As soon as a shopper feels it, a shift in his reference point takes place. With this shift a shopper imagines him/herself in a positive state of owning the product and enjoying all its benefits, thus making it really hard to reject this immediate gratification. So, with the shift in a reference point a consumer is torn between two totally different states – the pleasure of owning a product and deprivation after the failure to acquire it (Hoch and Loewenstein, 1991). What are the situations that lead to a shift in reference point, subsequently causing 19 impulsive purchase? Hoch and Loewenstein describe the first situation as a consumer’s proximity, which can be physical, temporal or social comparison (1991). The physical proximity speaks for itself – the closer the product to a consumer the stronger the desire to buy it. Indeed, if the product is well-placed on the shelf, perfectly visible and easily accessible, there is a high probability of impulsive purchase occurrence (Dholakia, 2000). Nothing should distract a shopper from the possibility of impulse purchase, thus convenient setting and attractive design of product placements will lead to a shift in a consumer’s reference point. Temporal proximity implies that together with the attractive setting or placement of a product, a shopper may be overwhelmed by a strong anticipation of immediate reward, connected with owning a product. Such feeling greatly increases the shift in a reference point, leading to impulsive purchase (Parboteaah, 2005). Social comparison effect on a shopper is well-known, because the desire of a person to be as cool as their friends, relatives or even enemies is really strong, and consequently a person shifts his/her reference point and indulges in impulsive buying to order to look no worse or better than people around (Dittmar et al., 1995). This model perfectly describes what shifts a consumer’s reference point and why consumers buy products impulsively after all. It highlights the way consumers see products, their perceptions and struggles while making such a purchase and the possibility of regret and feeling of guilt after impulsive purchase. Nonetheless, the model doesn’t show the reasons for one product being bought impulsively, while the other is not. Dittmar and his colleagues revised this limitation in 1995, by proposing their own model of impulsive buying. 20 The Model of Impulsive Buying In this model Dittmar and his colleagues attempted to investigate why some products are bought impulsively, while other do not fall into the category of impulsive products. They based their model on the theories of material possession and social constructionist. The model is characterized by the idea that products have symbolic meanings, apart from their functional utilities. A product that has certain attractive symbolic attributes helps the owner to indicate a lot of things – wealth, social status, etc. Basically, people tend to buy products to show or strengthen their social standing, thus opting for products with more attractive meanings. The scholars created the model of meaning dimensions which is shown below: Figure 1. Meaning Dimensions in Impulse Purchases (Dittmar et al., 1995) After conducting numerous personal interviews with adult students and men and women in general, the scholars validated their assumptions of the model. On the whole, the difference between products bought on impulse and those that were not, is that products, purchased impulsively much better showcase a person’s identity, status, etc. The studies also showed that women tend to buy impulsively such products that brightly 21 express their appearance and emotional interests and concerns. At the same time men buy impulsively products with more functional utility. This model explains the impulsive buying nature from a very interesting perspective – from the perspective of a product. It also gives a useful insight into the differences of meanings for women and men – offering a lot of opportunities for producers and advertisers to attract shoppers and make them buy products impulsively. The Theoretical Model of Impulsive Buying One year later Dittmar together with his colleagues went further and introduced a new theoretical model, which became a more comprehensive version of their previous model of impulsive buying. As a basis for the research, the scholars took the symbolic selfcompletion theory by Wicklund and Gollwitzer (1982), materialism tendency from Richins and Dawson (1992) and self-discrepancies notion of Higgins (1987). The notion of self-discrepancies implies that the way people see themselves differs from the way they would like to be ideally. So, there is a conflict, discrepancy between the actual self and ideal self (Higgins, 1987). Such discrepancies tend to be very stressful and damaging for a consumer, and as a result he or she will try to compensate for it through making a sudden purchase (Wicklund and Gollwitzer, 1982). The anticipation of a very quick gratification and the illusion of enjoyment from owning the product combined, makes a very strong mix, triggering the impulse purchase. In brief, the bigger discrepancy a consumer has, the stronger is an impulse to buy something, which is believed to mitigate the missing feature. Richins and Dawson explained the concept of materialism as a self-completion strategy through product owning (1992). They claimed that in the modern world people tend to place material things and attribute on top of everything, and the acquisition of material possessions is seen to be the primary 22 goal and a measure of success in life. As it was mentioned in the previous model, consumers attach special attributes and symbols of products to their ideal selves, in order to compensate for something missing and improve their social standing in the eyes of others. Though there are many other ways to compensate for discrepancies, people simply indulge into impulsive buying, as it seems to be the fastest and easiest way of getting gratification, without making any effort. Figure 2. The Theoretical Model of Impulsive Buying (Dittmar et al,. 1996) As it is seen from the figure above, people may exit from self-discrepancies and compensate in such a way as doing sports - a great strategy, or even overeating, which is definitely not the most desirable way out. Basically, consumers buy impulsively different products, depending on what social status they have, and then the process goes down to the extent his/her actual self is different from an ideal one they wish to have. And if a person is prone to materialism and sees products acquisition as the only 23 possible compensation strategy, he or she will be more inclined to impulsive buying inside the store. This model provides professionals with highly useful awareness of consumer behavior and its weaknesses in particular. With the help of this theoretical model, it is possible to predict what kind of products can be bought impulsively and what groups of consumers may be motivated to impulse purchase easier. Despite such a comprehensive approach in those two studies, Parboteaah claims that doesn’t take into consideration the certain situations that make people buy impulsively (2005). The Two-Factor Cost-Benefit Accessibility Framework It was not a long time since a new model was introduced to address the abovementioned drawback. In 1996 a two-factor cost-benefit accessibility framework was developed by Puri. The new model was based on the studies of impulsiveness, time inconsistent preferences and self-control, and was built on a hedonic framework (Parboteaah, 2005). It means that when a shopper is exposed to a product inside the store, he or she is overwhelmed by a tempting urge to buy it immediately. When it comes to time inconsistent preferences, as it was mentioned before, it describes the situation when the benefits of quick enjoyment prevail over the reason and possible consequences. The main assumption of this model is that a buying situation plays a crucial role in consumer impulsivity. Depending on what kind of feelings and perceptions a particular situation emphasizes, and of course an individual’s inclination to impulsive behavior, a particular outcome inside the store can be expected – either an exposed person will buy impulsively, being unable to fight the urge, or a person will resist the sudden desire and the probability of impulsive purchase will significantly diminish. Basically, when a 24 person in a certain situation feels that benefits outweigh costs, an impulse purchase is likely to happen and visa versa. In this model situation is the main determinant of the probability of impulsive purchase, because it may either emphasize costs or benefits of impulsive buying behavior. Figure 3. The Two-Factor Cost-Benefit Accessibility Framework (Puri, 1996) Puri also divides consumers into two groups, depending on what chronic values they have – hedonics and prudents (1996). In his view hedonics by nature are prone to considering only benefits of a purchase, thus it makes them more susceptible to impulsive buying behavior. Prudents, on the contrary, do not engage into impulsive behavior, because they are used to concentrate on costs. So, an individuals’ propensity to impulsivity and a situation they happen to be, influence the probability of an impulse purchase. 25 The Model of Environment-Shopper Relationships In 1999 McGoldrick and his colleagues presented their own model of impulsive buying, based on the influence of two factors during sales seasons - customer’s sociodemographic characteristics and his or her cognitive characteristics (Economics and management, 2012). Socio-demographic characteristics describe what kind of reaction a shopper has towards the environment in the store. This factor also determines the probability of an impulse purchase. What are these factors? It can be for example age, gender, money availability and others. Obviously men and women have different propensity to impulsive purchases, and thus their perceptions and reactions will be different as well. Cognitive characteristics determine what perceptions and beliefs a shopper has towards the environment. In this model, the environment was limited – sales season, so people will not have the same beliefs about this period – some may like it, the others not. They believed that exactly those two factors affect the occurrence of impulsive behavior inside the store. Figure 4. Conceptual Model of Environment-Shopper Relationships (McGoldrick et al. 1999) Looking at the figure above, we can follow the logic of how environment influences the 26 response from a shopper inside the store, and then, combined with two factors, leads to a certain behavior. The mentioned propensity to avoid dissonance behaviors serves as a moderator between a shopper’s response and behavior. Taking sales shopping as an example, it can be said that a shopper tries to avoid thinking about the after-math of an impulse purchase. In such a way he or she concentrates only on the positive implications of sales – reduced price. Despite the fact that this model is very interesting and helpful when it comes to explaining how and why impulsive purchases are made, this study is limited because of its applicability to sales season only. It would be wrong to think that the same model of consumer behavior applies to everyday shopping situation. The Integrated Model of Consumption Impulse Formation and Enactment Finally in 2000, Dholakia presented his model of impulsive buying behavior, which seems to be one of the most comprehensive. Dholakia claims that there are certain processes, which comprise impulsive buying behaviors: volitional, motivational and cognitive (2000). With the help of the model, he explains the psychological mechanisms behind the impulsive buying behavior. 27 Figure 5. The Integrated Model of Consumption Impulse Formation and Enactment (Dholakia, 2000) As shown above, there are three foregoing factors of impulsive buying: impulsivity trait, marketing stimuli and situational factors. The presence of at least one factor is already enough to feel a sudden urge to buy something. Impulsivity trait describes how a shopper is inclined to an impulsive purchase. Marketing stimuli is a very significant factor, because marketers, retailers and advertisers effectively manipulate shoppers, by using exactly this one. Store atmospherics, visual merchandise and promotions trigger consumer behavior into the direction of an impulsive purchase. Situational factors, which are divided into environmental and personal, will be discussed in detail later, but they also play a big role in the process of incentivizing impulsive buying. For example a shopper’s money and time availability may greatly affect the likelihood of an impulse purchase inside the store. 28 When these factors merge together, a consumption impulse occurs. At that time constraining factors emerge in order to respond to the sudden impulse. Dholakia identified three of them: current impediments, consideration of long-term deleterious consequences, and anticipatory emotions (2000). Current impediments may be the lack of time and money, which in turn negatively affect the flow of impulse buying process (Beatty and Ferrell, 1998). Being pressed for time means that a consumer does not have enough time for making the right choice and grabbing a product from the shelf. He or she simply will not notice promotional POS materials or special deal. The lack of money will disrupt the flow even worse – it will be just impossible to buy something impulsively. Consideration of long-term consequences means that a shopper will think about the possible negative effects of an impulse purchase that in turn may avert him or her from that purchase. Finally, negative anticipatory emotions, which are closely connected with consequences. A shopper may reconsider an impulsive purchase, if he or she anticipates guilt or regret after purchase. Such constraints put a shopper into the state of serious conflict between his sudden, irresistible urge and possible consequences or other impediments. In contrast, if a shopper doesn’t feel anything negative, considers benefits of an impulse purchase bigger than costs, and is not limited by situational factors, he or she will purchase a product “on-the-spot” (Rook, 1987). Basically, a shopper has two ways out of this situation – behavior, which is impulsive buying, and non-behavior, which is resistance to an impulsive purchase. If a consumer switches on his or her self-control mechanism and thoroughly considers the costs and 29 consequences of impulsivity, he or she resists the stimuli and deters the purchase inside the store. 1.6. The Classification of Buying Decisions Kollat and Willet in 1967 after recognizing the importance of lifestyle features and customs came up with their conceptualization of buying decisions as well as the definition of impulsive buying. They believed that demographics and personal traits indeed had an impact on impulsive buying behavior. Thus, they decided to compare the difference between prior intentions and purchase outcomes of shoppers. Knowing what the intentions were before entering the store and comparing them with the outcomes, gave the researches a great insight into the classification of impulsive behavior. They started with the typology of shoppers’ intentions. The following are the intentions, arising before going into the store and prior to the exposure to in-store stimuli (Kollat and Willet, 1967, p.21): 1. Product and brand – consumers know brand and product they want to buy before entering the store. 2. Product only – consumers know what type of product they want to purchase, but have no brand preference. For example, there is a plan to buy low-fat milk, but not of a certain producer. 3. Product class only – consumers know only what class of a product they want to buy, but not exactly what product. For instance, a shopper needs milk, but has not decided yet which concretely – low-fat, lactose free, etc. 4. Need recognized – consumers know that there is some certain need to buy something (for breakfast for example), but they have not made a decision which product, product class or brand they are looking for. 30 5. Need not recognized – consumers have no need to buy something before entering the store and facing the stimuli inside. Kollat and Willet went further, developing the typology of the most frequent shopping outcomes (p.22, 1967): 1. Product and brand purchased; 2. Product and brand not purchased, i.e., no purchase; 3. Product purchased, brand not purchased, i.e., brand substitution; After pairing the above-mentioned typologies, the researches developed the following intensions-outcomes matrix with 15 possible types of impulsive buying (1967, p.22): Outcomes Intentions Product and brand mentioned Product only mentioned Product class mentioned Need recognized Need not recognized Product and brand No purchase purchased Product, not brand purchased 1 2 3 4 5 6 7 8 9 As a result, category 9 became the definition of impulsive purchase in this study – the product and brand are bought when the need is not recognized. Another classification is provided by POPAI (Point of Purchase Advertising International), dating from 1965: 1. Specifically planned – these are the purchases that shopper specifically identified in pre-shopping interview. 2. Generally planned – purchases that were generally mentioned in pre-shopping interview. 31 3. Unplanned – purchases that were not mentioned in the pre-shopping interview and customer bought on an impulse. 4. Substitutes - Purchases that were specifically identified by name in the pre-shopping interview, but the actual purchase was a different brand or product. It is necessary to highlight that unplanned purchases hit the highest frequency in POPAI’s 2014 shopper engagement study – 65 % of all purchases (2014). Needless to say that seeing such high percentage of impulse purchase, retailers and scholars realize the crucial importance of studying and mastering the phenomenon of impulsive buying. To say more, due to the high pace development of ecommerce and online shopping as a whole, the possibilities and reach of retailers seem to be unlimited, and the scope of their influence is getting greater. In regard to online stores, shoppers have become more exposed to various stimuli, but their opportunities to buy have transformed as well, and nowadays, online shoppers may be even more impulsive in comparison to in-store visitors. 1.7 The Types of Impulsive Buying As was shown previously, different researchers have developed quite diverse definitions of the concept. The same can be said about the classification of impulsive buying. Over time the classification was changing, when each scholar introduced his own view on the issue, based on his definition. The one and only viable classification belongs to industrial economist Hawkins Stern. Stern identified four kinds of impulsive buying as an “Impulse Mix”, based on the level of will power experienced by a consumer (1962). He believed that different situations 32 and environment, combined with other factors like budget, personality, culture and customs, might have different impact on the same customer and, therefore, lead to different impulsive outcomes. 1. Pure Impulsive Buying – the name speaks for itself; this type involves a very high level of impulsivity. Such buying pattern is very rare, since it is based on high emotional and spontaneous decisions. It is characterized by some novelty, which is very different from a person’s usual shopping pattern. 2. Reminder Impulsive Buying – such pattern occurs when shopper is faced with a product and out of the blue it reminds him/her about the necessity of purchasing it. It may be the low stock or the absence of some certain product at home. So before entering the store, shopper didn’t intend of buying anything like that. In this regard, successful and memorable commercial or attractive promotion may trigger impulse to buy. Previous experience plays a crucial role too – if customer was satisfied before, it will buy it again easily, following the impulsive behavior. On the contrary, if the experience was negative, person will hardly buy anything like that again, despite sales promotions. 3. Suggestion Impulsive Buying – this pattern is characterized by the sudden feeling of trying the product for the first time. It happens when shopper sees something for the first time and suddenly is overcame with the desire to buy it, as he/she imagines the feeling of having an item. It is important to note that no previous experience is involved here, hence product itself or its promotion must be very powerful to spark the impulse inside the store. 33 4. Planned Impulsive Buying - though the word planned sounds strange, this pattern happens to be the most frequent. It occurs when shopper doesn’t have any particular preferences in brand, size, color, etc. of a product, and plans to make a decision already in the store. For retailers and advertisers this is an extremely important type of pattern. Atmospherics, packaging, and promotions - all these must aim at luring the customer. Stern’s typology is widely used by many researches and marketers nowadays and gets applicable to many markets – from food, snacks and drinks up to fashion clothes and shoes. His typology is universal and can be easily adjusted to meet the certain needs of studies. CHAPTER 2. Factors that Trigger Impulsive Buying 2.1 The Classification of Triggering Factors Together with the development of the concept of impulsive buying and its more comprehensive study approach, a major facet has been examined as well – triggering factors. Factors, influencing impulsive buying can be divided into two big groups – external as a way of in-store communication and internal (Wansink, 1994). External factors are those, which are controlled externally – by producers, retailers, marketers and so on. Marketers put a lot of effort into creating and implementing various POS materials, promotion activities and sale events, and other marketing cues to communicate effectively and lure shoppers into impulsive behavior inside the store (Youn and Faber, 2000). A shopper himself does not have any control over such factors. The presence of certain external stimuli greatly increases the likelihood of impulsive purchase, since such behavior is triggered by an impulse (Iyer, 1989). It is necessary to 34 add that external stimuli help not only to lure new customers, but also promote up and cross selling to the existing ones, by offering complimentary or better items (Dawson and Minjeong, 2009). Internal factors are those directly connected with an individual – his/her personal characteristics and cues that make them buy impulsively. Kacen and Lee enumerate the following internal cues: impulsive buying tendency (IBT), emotional states and moods, demographic factors and the consumer’s normative evaluation of impulse buying engagement (2002). Indeed, person’s emotional state, feelings and moods can be very powerful when it comes to impulsive buying. The former factors constitute an individual’s affective state (Youn and Faber, 2000). The outcome of internal cues processing can be either affective – resulting in impulsive buying; or cognitive – leading to non-impulsive behavior (Karbasivar and Yarahmadi, 2011). Since the business environment is constantly changing as well as shoppers themselves and their behavior, recent researches are quite different from the ones mentioned before. Taking into account that sociologists and psychologists have started taking interest in the impulsive buying phenomenon, more and more factors triggering such behavior appear. It is not only because shoppers have become more sophisticated and educated about their shopping choices and decisions, and probably more aware of the tricks retailers and advertise use to lure them. Technology and progress also play crucial roles in shaping the retail environment and people’s buying behavioral patterns. Due to globalization nowadays we can witness how buying behavior is being changed across many developing nations and what is more important, the valuable studies presented on their example. In this context, the sociological factors are indeed very influential and 35 deserve to be studied further to keep getting new insights into the impulsive buying behavior. 2.2. The External Factors 2.2.1. The Product Firstly, a product itself is a very attractive object, and the way it is designed or packed, priced and placed is very important when it comes to impulsive buying. That is why producers and retailers pay particular attention to the details of a product, in order to make it more appealing to a customer inside the store and make it stand out on the shelf. There are several product features that may be used in order to lure a customer into impulsive buying (Stern, 1962): Low price – it sounds obvious and logical, because low priced or discounted products are generally attractive for a customer, but when it comes to impulsive buying, low price makes a product even more tempting and irresistible to buy. Price reductions, cost savings, or sales promotions can trigger an unintended purchase (Laroche, Pons, Zgolli, Cervellon, and Kim, 2003). In such a way low prices trigger planned impulsive purchase. For example, a person has 2 bottles of milk on the shopping list – planned purchase, but when coming into the store, a consumer sees that buying 3 bottles will save him/her 0,5 dollar, and thus a shopper gets the third bottle impulsively, basing his/her decision on the reduced price. Also, impulsive buying of something cheap serves as a certain excuse for a consumer. After the impulse purchase, a customer may feel guilt or frustration, but if a product was really cheap, the situation does not seem so bad. The damage to the budget is not substantial, thus a person does not think about it in a 36 negative way. Such little impulsive purchases happen very often, and exactly because of its little money loss, people do not consider it as something important or negative. The feeling of acquiring something for a low price makes a person feel like a winner. It is mistakenly taken as a great bargain, with no regards to consequences. Subsequently, such purchases will continue in the future, bringing a big amount of profit to the retailers and producers. At the same time, low price can influence impulse purchase in a different way. Thaler describes it as a “dollar store phenomenon”, when everything costs one dollar, but at the end the total amount of money spent is bigger than in comparison with any other equivalent store (1999). It shows that low prices indeed encourage a consumer to buy products, and that a higher price may have restricted an impulse purchase (Thaler, 1999). Low marginal need for an item – this feature relates to the degree that a shopper needs or requires an item. Different product categories have different marginal need. Such things as bread and water have a high marginal need. But it may vary from person to person. Some people do not eat meat very often, thus it will have a low marginal need for them, while vegetables will be of a high one. As a result, goods of a high marginal need are always in demand, they are planned and every time a person goes shopping, these items are on the list of planned purchases. Contrary to that, items of low marginal need are not considered to be vitally important, and usually they are not planned in advance. They are not intended or planned to be bought when a person goes shopping. Consequently, exactly these kinds of items may be bought impulsively, since prior to that they were not on the shopping list. Chewing gums, chocolate bars, different sweets and other little things are bought only when being encountered 37 already in the store. Before seeing them, a consumer usually does not think of purchasing one, thus the impulse arises only when a person is exposed to an item inside the store – which makes it an impulse purchase. Thus, items with low marginal need are usually bought on an impulse. Mass advertising – advertising in general plays a very significant role in promoting the product, as well as providing information about the company, brand and its benefits. Kotler said that mass advertising leads to impulse purchases because it creates consumer knowledge about an item or brand, which increases the chances of the product being recognized and chosen on impulse by the consumer (1991). For example, a shopper buys a new chocolate bar, while strolling around the shop, because he/she remembers an advertisement that recalls some positive emotions or unique taste of it. A shopper has never bought it before, but when he/she recalls the commercial, seeing the product, he decides to buy it. Such kind of purchase is truly impulsive, because a shopper did not plan it, so the purchase is made only when a shopper is exposed to the product and reminded of an advertisement on the spot. Mass advertising is closely connected with the marginal need for item, hence it is essential for explaining to consumers why it is worth buying as well as providing them with the necessary knowledge about a product. Prominent store displays - it is a very important feature, regarding impulsive buying. For most people shopping, especially a grocery one, is nothing special and is generally a part of some routine. Shoppers go inside the store, knowing what they want to buy, and taking into account modern lifestyle, they simply may not have enough time for strolling between the aisles. Obviously, consumers are not interested in any unplanned purchases, and that is why 38 merchandisers must be very creative and inventive in order to catch attention of shoppers and make them buy an item impulsively. Displays, obviously, must be prominent and eye-catching so the consumer sees the product immediately. Point-of-sale materials are getting more and more sophisticated nowadays, as customers already have strong immunity towards all the amount of information and tricks inside the store. Nevertheless, there are two things, which help to grab a shopper’s attention and trigger an impulse purchase: prominence and location of a display. Bright, animated or interactive displays will definitely grab attention from shoppers and will make them stop by and look closer at products. Marketers use a great deal of fantasy and creativity when it comes to making POS materials. It must be memorable and easily recognizable to make it stand out from the competitors. For example, a point-of-sale display was created for the Guinness World Records book that held 100 books, was covered in graphics from the book, and lit up with chaser lights at the head of the unit. Such point-of-sale strategy resulted in substantial sales increases for the annual Guinness World Records book (Miller at al., 2010). The interesting thing about this example in connection to impulse buying is that Guinness book is not marketed anywhere or anyhow at all, thus, the strong increase in sales resulted from the impulse purchases of shoppers who stopped by the display and felt a sudden desire to acquire it. The great prominence and a well-thought location of the display in chosen shops helped to spark the interest and a buying impulse in consumers. Short product life – it accounts for those items, which are consumed quickly 39 and, thus, need to be bought again soon. Such items have a short buying cycle and consumers do not usually plan in advance the purchase of them. On the contrary, they simply go into the store and hope to see them there and buy it on an impulse, without any prior plan or thought (Stern, 1962). Such high frequency of shopping for these items makes a person less sensitive to buying. As a result, a shopper, making such purchases so often, does not feel any responsibility for planning in advance, and obviously has no fit of conscience after impulsively buying a certain item with a short life cycle. Basically, a shopper does not even consider such purchases to be impulsive, simply because of the high purchase frequency. Such purchase is seen to be completely normal and even necessary for a shopper. Small size and light weight – when it comes to incentivizing impulsive purchases, size of an item and its weight really matters. A product must be convenient in any sense, otherwise, a sudden impulse will disappear facing possible difficulties with transportation, handling, etc. As it was mentioned before, there should not be any additional effort from the side of a shopper, thus producers must think thoroughly how easy it is for a perspective customer to take an item and pay for it at the cash desk. Any inconvenience, associated with purchase or transportation of a product, will be detrimental to an impulse, because it will outweigh the desire to have it. Hence, relatively small and light items are more prone to be bought impulsively, since they do not discourage a sudden impulse. Ease of storage – this feature is closely related to the one, mentioned above. If a shopper realizes that the difficulty or inconvenience of storing an item far overrides the anticipated benefit of having it, the impulse will curb. For instance, 40 a shopper spots something he/she has been looking for a long time on sale, but understands that there is no room for it already at home. Obviously, due to the storage limitations, he/she will not buy an item, exactly because storage problem outweighs the desire of having an item. 2.2.2. Situational Factors Inside the Store A prominent contribution was made with the pinpointing of situational factors in relation to impulsive buying. Dholakia defined them as “environmental and individual factors that have influence on impulsive buying (2000). Situational factors were studied by many experts, giving more and more useful insights into the impulsive buying phenomenon. The attractiveness of the situational factors lies in the fact that they are closely bound with impulsive behavior. Most of the factors can be controlled or changed by the retailers, thus being extremely valuable for the decision-making process as well as sales magnitude (Badgaiyan and Verma, 2014). The situational factors were divided into two groups – personal and environmental. 2.2.3. Environmental Factors Environmental (in-store) factors are: Sales promotion – it seems to be obvious that discounts are famous triggers for impulsive purchase. The implementation of sales promotions is aimed at fast incentivizing of shoppers wants and needs. Then it stimulates the immediate purchase of a product or service (Etzel et al., 2001). Numerous studies have proven the strong correlation between sales promotions (cash discounts, free products) and impulse buying. Store environment – this aspect has a strong influence as well. Shelf arrangements, space, colors, lightning and smells – only a few factors that tend 41 to attract customers and trigger the impulse to buy a product. It seems a common sense that in a clean, light, smartly arranged and pleasant store people will be more tempted to spend time and subsequently to make a purchase. The use of special lighting and colors may greatly encourage impulsive purchases, since visually it will be more appealing and with have a bigger impact on the consumer (Babin and Kim, 2001). Apart from visual attraction, store environment affects emotional state as well. Only a few people would prefer to do shopping in a dirty store. Exactly nice and pleasant atmosphere positively affects shoppers’ emotions and perceptions of the store, thus greatly increasing the chance of impulse purchase. In-store displays - retailers must understand their customers and their habits according to Terrazas (2006). Only after understanding the behavior of people, in-store displays become successful and effective in luring customers into impulsive behavior. There are numerous ways how to spark the impulse inside the store. Terrazas describes one strategy as to identify the commonality of purchased goods and then attractively display complementary products next to these common products (2006). Displaying the most popular products in the back of the store is another method of triggering the impulse - this forces the client to walk past and be exposed to other items first. It is also widespread practice to separate popular items. Bread and milk, for example, will most likely be displayed at the two most opposite ends of the store which will force the consumer past a long aisle of products triggering impulsive buying on the way to the other essential product (Tendai and Crispen, 2009). Behavior of employees in store – almost everybody will agree that friendly and helpful staff in a store is one of the keys to successful sales. So many times 42 people face irritation or even rudeness from the salespeople that being friendly is seen as something extraordinary. Indeed, helpful and nice attitude towards customers may greatly increase the occurrence of impulsive purchase (Yu and Bastin, 2010). This connection was shown in many researches, and needless to say, nice employees tend to convince shoppers much faster. By providing useful advice, explaining pros and cons of a particular product, asking right questions, and being attentive to customer’s mood shop assistants make a big difference in sales performance. Well-trained and professional employees may not only trigger impulsive purchase at some particular moment, but also promote a positive image of a brand or store in general, converting customers into loyal ones and driving sales up. Store music – this factor may not be so obvious, but nonetheless, plays a significant role in people’s lives as a whole. People in general like listening to music, because it helps to relax, to escape from stress and gives a lot of pleasant emotions, changing the mood for the better. When it comes to music as a retail tool, nice melody will not irritate or annoy customers, making them leave a shop as soon as possible. On the contrary, the use of good music aims at providing shoppers with soothing and de-stressing effect that in turn may lead to a greater probability of impulsive purchase. Catchy tune can positively influence customer’s mood and make him or her more susceptible to impulse purchase. For example, Morrison in his 2011 research highlighted the positive connection between impulse buying behavior and pleasure levels, increased by music and aroma inside stores. Earlier in 1993, it was revealed that carefully chosen “music along with lighting is an important trigger that creates an urge to purchase impulsively” (Eroglu and Machleit, 2001). 43 2.2.4. Personal Factors Among the personal (individual) factors were pointed out the following (Badgaiyan and Verma, 2014): Money availability – the amount of funds a person is willing to spend. This factor is important in fact not only for impulsive purchases, because without budget a person will not buy even something planned. Hence, some extra money will definitely “increase the likelihood of impulsive purchase” (Luo, 2004). The availability of extra funds also means that the purchasing power of a buyer is higher, therefore facilitating the impulsive buying behavior in the store. Economic well-being – it is considered to be a financial health of a person (Badgaiyan and Verna, 2014). While money availability is short-term, overall financial health tends to be long-term. Why is it an important factor when it comes to impulsive buying? The answer is obvious – those shoppers, who have sound financial health in the long run, are considered to be more susceptible to impulsive purchases, since they do not usually regret spending money impulsively. Family influence – as it was mentioned before, friends and relatives may have a big impact on people, even when it comes to shopping. This factor was recognized in many studies: for example Underhill already in 1999 pinpointed a positive and strong correlation between couples or groups of shoppers and better sales at the end. In more recent research Lin and Chen draw attention to the fact that increased susceptibility to family influence leads to greater tendency to buy on impulse (Parboteeah, 2005). But not only parents or older relatives have significant impact on impulsive buying. Surprisingly enough, children can 44 trigger the impulse to buy in their parents as well: the presence of children and recognition of their wants and needs can be a powerful stimulus. Time availability – it is also a very significant factor in terms of impulse purchase. And the explanation of it seems very logical, since shoppers who are pressed for time are likely to take exactly what they planned before entering the store. They obviously do not have so much time to wander around the shelves and look for something. On the contrary, people who are not in a hurry are more susceptible to all the things they see inside the store – sales alerts, shelf placements, special promotions sign and etc. They simply have time to spot it and stop by, that may result in a sudden purchase. Credit card use – it is not surprising that the feeling of having “extra” money on the credit card gives a wrong, illusional and dangerous feeling of freedom. Feinberg in 1986 carried out four experiments and reported that the availability of credit card “increased the probability, speed, and magnitude of spending” (Parboteeah, 2005). People tend to forget that spending money over the limit and going into debt is a slippery slope. It is a very effective tool of making people spend more than they can afford and even buy something they do not want. As a result, people with credit cards tend to go way above their means and commit impulse purchases more often, than those who have a “real” amount of money on the debit card. Convenience and easy of credit card usage urges consumer to overspending and likely triggers the likelihood of impulse buying. To say more, various consumer studies claim that frequent credit card users have been found to be less price sensitive, and that credit card possession is “related to buying higher priced items” (Parboteeah, 2005). 45 2.3. Internal Factors Theorists and researchers have been paying closer attention to internal cues for a long time: some studies have tried to examine if people, who are constantly engaging into impulsive buying have certain common personality traits; the others have embarked on developing and verifying scales to measure impulsive buying tendency (IBT). When speaking about the internal cues and characteristics that influence impulsive buying, different scholars have different opinions and areas of interests. We are going to look closer at IBT – impulsive buying tendency and personality traits, which are connected with it. IBT is described as the “degree to which an individual is likely to make unintended, immediate, and unreflective purchases” (Jones et al., 2003, p. 506). Some researches believe that certain personality traits have a strong correlation to IBT and thus, have a direct impact on impulsive behavior. Youn and Faber in their study aimed at investigating the relationships between IBT and 3 personality traits, which are potentially correlated with impulsive buying: lack of control, stress reaction and absorption (2000). Firstly, it is important to explain where these traits come from and why they are considered to be related to impulsive buying behavior. Auke Tellegen, a psychology professor from Minnesota University, developed a personality test - Multidimensional Personality Questionnaire (MPQ), intended to measure normal personality. Based on 276 true-false items, the test gives scores on 11 primary personality dimensions: wellbeing, social potency, achievement, social closeness, stress reaction, alienation, aggression, control, harm avoidance, traditionalism, and absorption (Tellegen, 1982). Youn and Faber singled out 3 traits (lack of control, stress reaction and absorption) to conduct their research, since they were linked to the concept of impulsive buying. 46 Lack of Control – control in this regard is related to the cognitive ability of a person to monitor a purchase impulse. People are split into two bipolar categories – controllers and impulse-ridden. Simply put, controllers are those, who prefer to plan they are activities and are characterized to be cautious, rational and sensible; they are able to overcome the impulse and delay the gratification (Tellegen, 1982). On the contrary, impulse-ridden people are careless and spontaneous, and do not think twice about purchase - they simply buy something, without any consideration of consequences. Such personality trait greatly contributes to impulsive buying, because people with this trait fail to control their desires and strive for immediate gratification. They are easily led and prone to external stimuli, which makes them a great target for retailers. Stress Reaction – this trait reflects systematic individual differences and shows how frequent and intense the person’s response is to situational cues with negative emotional states (i.e., anxiety, anger, distress, and guilt) (Youn and Faber, 2000). Such negative emotional states arise from everyday life of an individual – problems at work or home or disappointment with living conditions. Basically, people with such trait tend to be very vulnerable and highly prone to stress, they may overreact and exaggerate the scale of a problem; they are easily hurt and upset, as well as troubled by a certain sense of guilt. As a result, such people look for some relief, and impulsive buying seems to them an easy way of getting gratification and some amount of happiness. Even in 1988 researches found out that such people felt much better after they had impulsively purchased something (Rook and Fisher, 1995). Impulsive purchase offers them a quick way to gratification and also helps to escape from everyday stress. An immediate gratification after an impulse purchase substitutes the negative state 47 to some extent. The interesting thing about this trait is when such people try to control an impulse and refuse to buy something, it may make things even worse, because their disappointment with life and overall negative state is deepened by the delay and refuse of the gratification. So, impulsive buying becomes a very primitive solution for stress-reactive people. Absorption – the final trait constitutes a person’s tendency to become engaged in self-involving experiences triggered by appealing external and imaginative stimuli (Tellegen and Waller, 2008). Such trait makes a person very sensitive to environmental cues not only inside the store, but also in life in general. They get “absorbed” by the surrounding sounds, lights and smells. Obviously, this trait makes people be an easy target for marketers and advertisers, because any entrancing or engaging stimuli such as promotions, gifts or eye-catching POS materials will grab the attention of such shopper and may trigger the buying impulse inside the store. It was proposed that people with high-absorption levels are easier to be lured into impulsive buying. To support their hypothesis, the scholars conducted a survey of 135 students, aged between 18 and 25, mostly females. They were given an MPQ and had to indicate each statement either true or false. The tendency to engage in impulse buying was assessed by the "buying impulsiveness scale" developed by Rook and Fisher (1995). As a result, the correlation analysis showed that a lack of control had the highest correlation with IBT, followed by stress reaction and absorption (Youn and Faber, 2000). All together, three traits accounted for 20 % of the variance in IBT. After examining the triggering cues, Youn and Faber showed that both external 48 (environmental and personal) and internal factors have a significant impact on impulsive buying behavior: money availability, which accounts for external factor scored the highest rating – 60 %. Among other cues associated with shopping situation were: receiving money (45.9%), money (40.0%), and credit cards (36.3%). Interesting to note that credit card availability did not appear to be very influential, even among young female students, while the general concept of “having money” had the strongest impact in that study. Speaking about feeling states (internal factors), the scholars found out that cues connected with them also scored quite high: the state of feeling happy, for example, was the highest score among the internal factors - 51.1 %, next come wanting something (45.9%) and feeling selfindulgent (40.0%), feeling good about yourself (37.0%), and feeling hungry (35.6%) (Youn and Faber, 2000). They also managed to compare what cues are different in their impact on high and low impulse shoppers. They took the lowest and the highest scores on buying impulsiveness scale, and made a t-test for each cue. They chose the following factors (both external and internal): "positive feelings," "advertisements," "visual elements," "feeling fat," "clothing and looks," "food," "depressed feelings," "price," "promotional gifts," "holidays," "music," "painful feelings," "new products," "alcohol," and "gambling." (Youn and Faber, 2000). High impulse shoppers turned out to be more sensitive to "advertisements, "visual elements", "promotional gifts", "clothing and looks", than low impulse buyers on this scale (Youn and Faber, 2000). In general, high impulse buyers were proven to be more sensitive to external and internal cues. 49 Finally, Youn and Faber investigated the correlation between the above-mentioned personality traits and the cues, which triggered impulsive buying. The results were very interesting and unexpected to some extent. For instance, “lack of control” trait turned out to be linked only to one cue – price. The negative association was explained in a way that people with higher levels of control tend to be the ones, who are likely to respond to reduced prices – sales, bargains, promotions (Youn and Faber, 2000). “Absorption” trait did not surprise researchers and logically had positive association with such external cues as store atmospherics: music and visual elements. People with more absorptive nature fall victims of impulsive buying more due to the effect of store atmospherics. Eventually, a “stress reaction” trait proved to be more positively associated with such internal cues as negative feeling states: "depressed feelings", "feeling fat", and "painful feelings". Nevertheless, stress reaction was also associated with positive feelings, which was explained in a way that stress-reactive shoppers are more sensitive and vulnerable to their feeling states (both positive and negative), thus tend to be more inclined to impulsive buying (Youn and Faber, 2000). Chapter 3. The Summary of Research In their 2011 research Karbasivar and Yarahmadi decided to check the positive correlation between credit card use (internal factor), sales promotion, window display (external factors) and impulsive buying of apparel. After taking a sample of 280 people from Iran and distributing 19 questions surveys to them, the scholars started analyzing the data. In this study, impulse buying behavior served as dependent variable and four factors (Credit Card, Window Display, Promotional Approaches (Cash Discount), Promotional Approaches (Free Products)) served as independent variables. After certain 50 statistical tests, the researches have presented the results, where such external factor as a window display scored the maximum points, thus having the biggest influence on impulsive behavior of a chosen sample. The next come cash discount and free products promotion. Surprisingly enough, credit card use proved to be the least effective when it comes to impulsive buying in Iran (Karbasivar and Yarahmadi, 2011, p. 180). Seeing such results, it was recommended to retailers to provide customers with ATM inside the store, in order to make it easier for consumer to spend money. Since free items also have an impact on impulsive purchase, marketers can trigger impulse by offering and promoting free things as complimentary products (Karbasivar and Yarahmadi, 2011, 180). Earlier in 2009, Tendai and Crispen aimed at investigating the connection between such external factors as store environment, in-store displays, behavior of staff, as well as price and atmospherics and impulsive buying. 320 shoppers in South Africa were taken as a representative sample. 55 % of respondents were young (21-30 years) and 60 % turned out to be from low-income background. 51 Figure 6. Consumer responses to the influence of various in-store factors on impulsive buying in supermarket shops (Tendai and Crispen, 2009). As seen from the results, 8 out of 9 factors proved to have an impact on impulsive buying from the taken sample. The most prominent factor is price, since most of the sample has low income. Politeness of staff plays a very significant role as well as advertisements, store displays and coupons. The mentioned factors can be associated with promotional and economic effect. Meanwhile, store atmospherics like scent, music and ventilation did not show major influence on impulsive buying – such factors were claimed to have an atmospheric, entertaining, experiential and hedonic effect. This study showed very well the comparison of different factors in regard to impulsive buying and what is more important – the separate influence of each. 52 Taken into account the demographics, it can be concluded that the majority of population of young age and with low income tends to buy impulsively for economic reasons – since the price factor is the strongest. They do not pay so much attention to hedonic factors – music, smell, etc. As the scholars explained, such price induced impulsive buying can be interpreted by the mental accounting activity concept, which says that an increase or decrease in the amount of money spent for an essential item on a given shopping trip (e.g., an unexpected increase in the price of milk) would increase or decrease the amount that is perceived to be available to spend on other goods, producing a congruent spillover effect (Tendai and Crispen, 2009). Nonetheless, we cannot exclude the importance of in-store shopping environment with its hedonic, entertaining effects, because it affects impulsive buying, but young and poor shoppers tend to buy for economic reasons more. Atmospherics proved to have an impact when it comes to enhancing the stay of shoppers and making it longer, but not directly triggering the impulsive purchase. Undoubtedly, the time a customer spends inside the store will increase the probability of an impulse purchase. One more study comes from Pakistan. In 2013 the researchers Vishnu and Raheem aimed at investigating the influence of separate factors on impulsive buying behavior of Pakistani people in nice shopping malls. They distributed 384 questionnaires among men (the majority of respondents – 73 %) and women to see what factors influence them when it comes to impulsive purchase. The majority of the sample (282) was aged between 18 – 25, had bachelor’s degree and the income level was above average with the most respondents. The research showed that income level and visual merchandise inside the store had the biggest impact on impulsive buying, windows displays and store environments influence less, whereas credit cards did not show any positive association 53 inside the sample at all. People in Taiwan were also studied in terms of their buying behavior in retail stores. Lan-Ying Huang and Ying-Jiun Hsieh in 2012 conducted a comprehensive study of instore stimuli and impulsive buying, basing it on environmental psychology. They use Mehrabian and Russell’s framework of emotional responses to environmental stimuli, in which emotional states fall into three dimensions: pleasure (happy or sad), arousal (to feel stimulated or uninspired to take action), and dominance (ability to control a situation or be submissive) (1974). The mentioned responses will make people either engage into impulse buying or withdraw from it. When taking into account triggering factors, the scholars included in-store ones (merchandise, price, service, environment) and personal (time, money and emotions). Surprisingly, in Taiwan retail environment such factors as price and environment do not affect negative or positive emotions, which is contrary to the similar studies in the Western retail environment. The results showed that there was a positive correlation between negative emotions and impulsive buying, whereas money availability had no effect on the arousal of positive emotions (Lan-Ying Huang and Ying-Jiun Hsieh, 2012). This interesting point can be explained in a way that Taiwanese people are more conservative in their spending and may not feel the gratification from a purchase the way other cultures do. Also, merchandise and service are seen as an essential part of shopping and in case of absence it may lead to some dissatisfaction from a shopper’s side, but at the same time its presence does not guarantee some increase in positive emotions – so its influence on impulsive buying is not that big. Contrary to that, price and environment inside a store are the factors that arouse positive emotions, and increase the probability of an impulse 54 purchase. The study showed the positive relation between negative affective state and impulse buying, meaning that Taiwanese engage into impulsive purchases in order to alleviate stress or some other negative emotions. Social effects such as family or friends’ influence were studied in 2014 by Chomvilailuk and Butcher. They conducted interview with two different groups of respondents – university staff and students, most of them were women. It is important to bear in mind that in Thailand culture women take over all responsibility for house, cooking and of course shopping for groceries, that’s is why the majority of females was chosen for the study. The results showed that a certain list of shopping items was prepared before going into a store, but nevertheless, unplanned purchases happened as well. University staff had such a list written, while students had it only in mind. The most important factors for impulsive purchase were economic ones – lower price and sales promotion. Nonetheless, social influence of friends or family has also effect on a shopper. After hearing a positive feedback from a close person, a shopper is likely to buy it on the spot. The same accounts for a negative review of the product, which may avert a shopper from it inside a store (Chomvilailuk and Butcher, 2014). 55 Conclusion This work aimed to look at the impulsive buying and its triggering factors inside the store in order to see what impact external and internal factors have on a consumer. The significance of customer’s impulsive buying behavior is documented by many scholars as well as professionals all over the world; and remained a crucial part of marketing and psychological investigations over many years and since being comprehensively studied in many countries. It is impossible to deny the fact that impulsive buying behavior has been in the spotlight for many years in different countries around the globe. The first problem that deserved immediate attention was the definition of the concept itself. At the very beginning, the researchers put emphasis on the product itself and looked at the phenomenon from the retailer’s point of view. As a result, buying behavior impulsivity stemmed from the product’s qualities – pundits divided items into impulse and nonimpulse. Since those times, the whole marketing industry was working hard in order to promote the items’ attractiveness thorough the massive usage of in-store communication: POS materials, sales, promotions, etc. More than that, researchers believed that only certain product categories could be eligible for impulsive purchase – snacks, for example or anything else that was cheap. Only in 1980’s the researchers started to shift the emphasis on other dimensions of the impulsive buying behavior. That was the time when psychological aspects began to be taken into account, and people’s behavior patterns got a lot of attention. Not only psychologists started investigating it, but also marketers saw a great potential in a new behavioral dimension of the concept of impulsive buying behavior. In 1987 Dennis Rook introduced the concept of impulsive buying as a “hedonic experience” and together with Hoch made a prominent breakthrough in the study of the concept of 56 impulsive buying behavior. They included various behavioral elements into the definition, making it more comprehensive. They showed that impulsive buying behavior is a complex process, which is influenced not only by products’ features, but also by a shopper’s emotions, traits and moods. Also, a very important aspect of impulsive buying was brought to light - a diminished regard for consequences. Such an implication is very important for understanding the concept and its mechanism. It shows a truly impulsive nature of such buying behavior, as well as what kind of consequences impulsive buyers face after conducting a sudden purchase on an impulse. The power of immediate gratification in the concept of impulsive buying is indeed huge, and according to some researchers, may lead to certain clinical disorders. While making a sudden impulse purchase, a shopper is torn between “good” and “evil” and such a strong psychological disequilibrium leads to serious inner conflicts. That is why psychological dimension is indispensable when it comes to studying impulsive buying behavior. As a result for our work we chose the following definition of the impulsive buying behavior: “a hedonically complex experience that stimulates emotional conflict and occurs with a diminished regard for its consequences” (Rook, 1987, p. 191). After defining what impulsive buying was and what types of it existed, we proceeded to deeper theoretical foundations of the impulsive buying mechanism in order to see why and how the stimuli and impulses made impulsive purchase happen. Overall six theoretical frameworks were reviewed, highlighting their advantages as well as limitations. Dholakia in his “Integrated Model of Consumption Impulse Formation and Enactment” perfectly explains the mechanism of impulsive buying behavior, by 57 comprising such triggering factors as situational ones, personality traits and marketing stimuli. By providing such a comprehensive approach to the mechanism of impulsive buying, it was possible to understand what kind of processes are happening inside a shopper’s head when he/she is in a store. At least one from the above-mentioned factors is responsible for the consumption impulse, which signals about a sudden desire to buy something. When constraining factors occur together with other stimuli, a person has only two ways out of the situation – behavior when the consumption impulse is enacted, which is basically engaging into an impulse purchase; and non-behavior, when the consumption impulse is dissipated and a person resists to a purchase, considering all the costs and consequences. Such integrated model clearly shows the importance of various factors in the process of impulsive buying, and does not limit it only to one group. Speaking about triggering cues in the process of impulsive buying, their amount also was evolving together with the concept itself. The more comprehensive approach to impulsive buying became, the more influencing factors were discovered and studied in relation to it. Speaking about factors that influence impulsive buying behavior, in this work we chose two different groups – external that appear to be inside the store (product itself and situational factors) and internal, which are connected with a shopper’s personality (IBT and personality traits). According to the summary of studies, consumers are affected by both of the factor groups; the only difference is that different cultures, nationalities, income and age groups tend to buy impulsively for different reasons – either economic or hedonic. Such in-store communication cues as price in different researches has proven to be a 58 very important factor, especially when it comes to impulsive buying among poor and young people. Discounts and free gifts promotions appear to be crucial as well, and their presence in the store increases the likelihood of an impulse purchase. For people with the above-average level of income such external factors as store atmospherics can be very powerful, because such customers buy impulsively for hedonic reasons. External marketing cues are very powerful as the researches have shown and a shopper’s exposure to them inside a store triggers the urge to buy on an impulse. Product itself is also a very convincing tool for making customers buy impulsively. Such characteristics as size, weight or price tend to dramatically influence the outcome of the shopping trip. A smartly designed, advertised and placed product can easily avoid all the constraining factors inside a shopper’s mind and lead him/her to an impulse enactment and impulse purchase as a result. Finally, IBT in connection with three personality traits have constituted a strong correlation with impulsive buying behavior. It was shown that shopper’s emotions and feelings as well as perceptions of the situation indeed have a direct impact on impulsive buying inside the store as an IBT. People tend to buy impulsively because of stress, happiness, sadness or other affective states. Shoppers, who lack self-control in general are more susceptible to impulsivity, thus, fall victims of such purchases more often. 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