Building Global Textile and Apparel Brand Image Strategies: A Cross-National Model

This year we focused on identifying the imapct of tangible performance attributes; intangible image attributes and price on overall perception of value and intention-to-buy US branded apparel products. We developed a conceptual framework for understanding the impact of apparel attributes on consumers’ value perceptios and intentions-to-buy and examined the effectiveness of the developed model in forcasting brand loyalty and purchase behavior. RELEVANCE TO NTC MISSION: This research is intended to provide enhance industry responsiveness to consumer demand in the global marketplace by providing a framework that will result in a better understanding of online consumer behavior and thus more effective use of the Internet as a marketing tool. Due to the unique ability of the Internet to attract worldwide consumers in an efficient and timely manner, online marketing -if properly developed and implemented -has tremendous potential as a strategy to enhance the image of U.S. textile and apparel products among rapidly growing online consumer markets worldwide. Effective marketing, via the Internet, could enhance consumer preference for (and purchase of) U.S. textile and apparel products, thereby allowing U.S. firms to capitalize on global market opportunitities and providing a sustainable non-price advantage to U.S. firms. OBJECTIVES: 1. To provide a conceptual and emperical framework for understanding the impact of apparel attributes on consumers’ value perceptios and intentions-to-buy. 2. To examine the effectiveness of the developed model in forcasting brand loyalty and purchase behavior. INTRODUCTION: In 1999 the U.S. imported $67.7 billion in textiles but only exported $16.8 billion. The apparel industry has been described as "a $300 billion fragmented and inefficient industry" that is slow to apply new technologies (Braunstein, 2000). To provide value for apparel consumers' worldwide, it is essential to understand what motivates them to purchase online and what prevents online purchasing. While a good deal of work has examined consumer motivations for shopping in traditional retail formats, almost no National Textile Center Annual Report: November 2001 I98-A06 1 work has examined online shopping from a scientific theoritical perspective. The emperical work on shopping in traditional retail environments has shown that "consumers select retail outlets that meet their expectations on dominant shopping motives" (Eastlick & Feinberg, 1999). Based on these findings in traditional retail environments, we expect that consumers' shopping motives would similarly impact purchase behaviors in the virtual shopping environment. SUMMARY OF RESEARCH TO EXAMINE THE POTENTIAL EFFECTIVENESS OF THE INTERNET AS A STRATEGIC TOOL TO ENHANCE THE GLOBAL COMPETITIVENESS OF THE U.S. TEXTILE AND APPAREL INDUSTRY In order to examine the potential effectiveness of the Internet as a strategic tool to enhance competitiveness, the research team has undertaken several related research projects during the passt three years. Initial research resulted in the development of a model of the online shopping process categorizing site visitors into one of two groups based on their shopping intentions: shoppers (those who intend to make an immediate purchase) and browsers (those who do not intend to make an immediate purchase). We identified seven barriers to online shopping: credit card security concerns, privacy concerns, lack of web site credibility, inability to judge quality, no real-time interaction opportunities, site navigation concerns and lack of loyalty. This phase of the research concluded that actions to reduce barriers to purchase by effectively addressing visitor concerns in these areas should lead to increased confidence in the online purchase process and a greater likelihood of online purchase. Because shoppers who have had a satisfying shopping experience are more likely to make repeat purchases, a satisfactory initial purchase experience will lead to increased likelihood of repeat purchases and increased loyalty, thereby resulting in increased online sales (Figure 1). The second study investigated the barriers to online purchasing from a perceived risk theoretical framework, examining the anteceedents to perceived risk, the types of risk perceived, and the effect of percieved risk on consumers' search behaviors and online spending (see Figure 2 for the conceptual framework). Consumers may perceive different types of risk depending on product category or retail medium. This research examined three major barriers to Internet shopping that reflect three types of perceived risk financial, product performance, and time/convenience risk. Several hypotheses regarding (1) the types of risks perceived risk by Internet shoppers, (2) factors influencing perception of each risk, (3) the impact of each perceived risk on online search behavior, and (4) the impact of search on the amount spent online were generated and tested using the 10 GVU WWW User Survey data set. Results of the path analysis (see Figure 3) showed that all the perceived risks were significantly related to online search behavior and that search behavior was significantly related to shopping behavior. In the third study, we developed a model, based on the utility maximization framework of consumer decision-making (where consumers make value tradeoffs to maximize perceived utility), and on the broadly understood and applied theory of shooping motivation (as outlined by Sheth, 1983) to examine both the benefits and the barriers assoicated with Internet shopping. Web site visitors may be relactant to purchase online due to unresolved concerns about the online shopping experience. Others may choose to purchase online in spite of some reservations (perceived risks) due to the strengths of perceived benefits derived from shopping online. Thus, actions to reduce shoppers' risk pereptions and/or increase perceived benefits (value) of online purchase may lead to greater motivation to purchase on the Internet. We examined the simultaneous effect of perceived risks and benefits to online shopping as illustrated in the following conceptual model of propensity to shop online (Figure4). Although several conceptual frameworks have been used to examine the motivational determinants of shopping behaviors and the role of perceived risks (Bauer, 1960, Cox, 1967) in traditional contexts, these concepts have not been extended to online shopping envirnments. The utility-based model developed here (based on these frameworks) was tested among apparel consumers to determine the effectiveness of the proposed framework in National Textile Center Annual Report: November 2001 I98-A06 2 predicting purchase behavior in online environments and expand our fundamental understanding of consumer behavior in online environments. In addition to examining the positive and the negative motivation for shopping online, we also examined the role of gender in online shopping (study 4). Consumer behavior literature focusing on the diffusuion of innovations has paid little attention to the role of gender differences in the adoption of new technology. Because women are the primary purchasers of apparel products in traditional retail environments, there is a compelling need for apparel firms to understand the online decision-making process among women to enhance online apparel purchases among this group. The overall objective of this project was to explore gender differences in the online consumer decision-making process (focusing primarily on information search and purchase behaviors) that may lead to a better understanding of the factors that influence Internet shopping, and greater insight into effective online marketing strategies, particularly for women. Specific objectives included: (1) identify gender related consumer attributes that are most likely to affect online shopping behaviors based on consumer decision-making theory and previous emperical research, and (2) determine the relative impact the consumer attributes (identified in objective 1) have an apparel purchase decisions among female Internet shoopers and browsers worlwide. Using the database of the 10 GUV's WWW User Surveys, we examined gender differences in several shopping attitudes and behavior. Department variables measured by dichotomous methods were crosstabulated with gender and examined by suing chi-square tests of significance. Dependent variables measured by a Likert scales were analyzed using ANOVA to test for significance followed by post hoc comparisons. Results indicated that men were more comfortable purchasing online (F=93.34, p<.001); had a higher Internet use skill level (p<.001 for 11 of 12 Internet activities); were more likely to purchase online (χ=11.32, p<.05);but were no more likely to use web as their information source (χ=7.05, p<.316). Men were more likely to search for price information (χ=8.37, p<.01) whereas women were more likely to search for location of stores (χ=6.45, p<.05); men purchased different items online than women [e.g. computer hardware (χ=24.87, p<.001), software (χ=16.35, p<.001), investment choices (χ=10.36, p<.001), stock market quotes (χ=8.82, p<.01)]; were more likely to purchase online as compared to in-store shopping for six of eight categoried (χ=10.74 to 26.80, p<.001) and spent more online in the lat six months than did women (χ=11.69, p<.05). Although some gender dichotomization is currenly breaking down (new Internet users are gender balanced with women representing just over half of new users), much of it remians surprisingly resilient to change. This research was intended to enhance effectiveness of the apparel industry in harnessing the potential of the Internet to market textile and apparel products/brands, paticulary to women. A better understanding of the way gender affects online search and purchase behaviors is necessary to develop Internet marketing strategies that will facilitate online apparel purchases among women. The final study, completed this year, focused on identifying the imapct of tangible performance attributes; intangible image attributes and price on overall perception of value and intention-to-buy US branded apparel product in online environments. Brand loyalty has a direct and obvious impact on corporate profitability and marketing efficiency because strong brand loyalty leads to improvements in the acquisition and retention of profitable customers and improves profit margins and market share. The purpose of this final study was to provide a rational and fucntional framework for understanding brand loyalty and testing a model which is predictive of loyalty in online environments. For any product category, consumers choose specific branded products as a direct outcome of their estimate of the relative values of products in their consideration set. Normally, consumers will purchase the product that they perceive to give them the highest value (utility) of those products available at the time of purchase. Each branded product delivers a bundle of tangible as well as intangible branded National Textile Center Annual Report: November 2001 I98-A06 3 product attributes to the consumer. These product attributes represent value to consumers. Consumers trade off the value of the bundles of tangible and intangible branded product attributes against perceived price to attain total value for each product in their competitive set (Neal, 1997). Therefore, a product's relative value drives consumer choice. The total value of a product for the consumer is a function of its tangible performance attributes (usually referred to as symbolic attributes) and its perceived price. The degree to which these three factors contribute to the overall perceived value may vary for different product categories, and varies as well at the individual consumer level. This study assessed the impact of a branded product's tangible attributes and intangible image attributes on consumers' product evalutions and intetion-to-buy in four apparel product categories. This research used an experimental design, which enabled the components of perceived value (branded product performance, branded product image and price) to be manipulated in a controlled fashion. It would be very difficult and even impossible to impelement these controlled experiments in the actual marketplace. Therefore, the research used an experimental design whereby the motivations or drivers of brand choice and brand loyalty could be studied. The experimental design allowed the researchers to examine how product price, product performance, and brand image contributes to consumers' perception of branded product value and intention-to-buy. Based on the pretest and literature review, scales were designed to elicit participants' perception of branded product performance, branded product image, price. perceived value and intention-to-buy for examined apparel products. To conduct the experiment, a computer mediated market environment was used to stimulate the actual marketplace. Web sites were designed to allow brand name, performance characteristics, (e.g. style) and price under the study to be manipulated. Three brands were chosen for each product, with two styles (performance attributes) and two price ranges for each brand. This resulted in a 2(2X3X2) factorial research design. There were a total of 48 experimental web sites, 12 experiemntal web sites for each item of the four apparel product categories. Web sites were developed to show each item at each experimental price, brand and style. The experimental online survey closely reflected the actual information processing activities a consumer goes through to arrive at a value-based prefernce hierarchy, and finally make a brand choice. The Brand Loyalty Model decomposed perceived value into ito component parts, so that the contributions of every part of the model represented a value. This way the impact of branded product attributes, branded product image and price on consumers' branded product evaluation and intention-to-buy for each product could be examined. The result of path analysis showed that product performance, quality, social, emotional, and price had a positive direct effect on consumers' perceived value (p<.001). The Brand Loyalty Model developed in this research can be used to measure (product attributes, brand image and price) loyalty motivations. Each arrow in Figure 5. represents the relationship between variables as measured by Beta coefficient. Beta coefficients indicate the level of importance purchasers put on each element of the value model for that specific product category. These coefficients show how purchasers evaluate products in the specific category and thus, depict purchasers' preference hierarchy. Because purchasers seek to maximize relative value, they will normally choose the brand or branded product they evaluate to offer the highest total relative value from the competing branded products available. So overall perceived value and ultimately purchase decisions are a function of the consumer’s perceptions of product attributes (product performance, product quality), brand image (social value and emotinal value), and price. Measurements of the relative importance of each product attribute an lead to a better understanding of brand loyalty and better prediction of consumer purchase decisions in the online marketplace. National Textile Center Annual Report: November 2001 I98-A06 4 Figure 1. OVERCOMING BARRIERS TO ONLINE PURCHASES: BEHAVIORAL MODEL Improved Security Perceptions Implementation of industry best practices to reduce barriers to online purchase Lower Barriers to Purchase Real-time Interaction Opportunity Better Quality Assessment Increased Credibility in Site Better Privacy Assurance Potential Barriers to online purchase Lack of Loyalty Site Navigation Concerns No Real-Time Interaction Opportunities Inability to Judge Quality Lack of Web Site Credibility Privacy Concerns Credit Card Security Concerns Improved Site Navigation Increased Loyalty Increased Likelihood of Purchase Increased likelihood of Repeat Purchases Increased Online Sales Revenue Figure 2. Conceptual Framework for Demographics, Perceived Risk in Internet Shopping, Online Search and Shopping Behavior DEMOGRAPHICS PERCEIVED RISKS IN INTERNET SHOPPING ONLINE SEARCH BEHAVIOR ONLINE SHOPPING BEHAVIOR