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CHAPTER TWO
LITERATURE REVIEW
2.1. Introduction
This chapter focused on relevant literature review for this study based on the research
objectives highlighted in chapter one. The section is divided into four major parts; the first part
looks at how product influence consumer buying behaviours; the second part looks at how price
influence consumer buying behaviours, the third section looks at how place influence consumer
buying behaviours, and the fourth part looks at how promotion influence consumer buying
behaviours. The chapter then concludes with a chapter summary.

2.2. Influence of Product on Consumer Buying Behaviour

According to Stanton, Etzel and Walker (2014), a product is a set of attributes assembled in an
identifiable form. However, consumers are not really buying a set of attributes but rather
benefits that satisfy their needs. Kotler and Armstrong (2013) stated that product is anything
that can be offered to a market for attention, acquisition, use, or consumption hence satisfying
customers want or need. Ferrell (2015) assert that product is a marketing mix strategy in which
organizations offers consumers symbolic and experiential attributes to differentiate products
from competitors.

2.2.1 Product Quality

Perceived product quality is defined as an assessment that customers have about the product
excellence (Poh, Ghazali & Mohayidin, 2013). Flynn, Schroeder, and Sakakibara (2014) noted
that quality is an important element in the design and manufacture of products which are
considered superior to those of competitors. According to Hitt and Hoskisson (2015),
customers increasingly expect products to be of high quality. Therefore, product quality is often
considered to be a major contributor to the development of a firm’s competitive advantage.
Product quality is extent to which a product succeeds to meet the needs of its customer. Product
quality shapes reputation of the retailer and influences consumer purchase decision at stores
(Fetscherin, Boulanger, Gonçalves, & Quiroga, 2014). Chaudhuri and Ligas (2015) suggest
that product value is positively correlated to both purchase behavior and customer loyalty in
the retail industry. Ferrell and Hartline (2013) described the qualities of a good product and
emphasized that, product characteristics that customers associate with quality include
reliability, durability, ease of use, a trusted brand name and ease of maintenance.
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Gbolagade, Adesol and Oyewale (2013) researched on impact of marketing strategy on

business performance a study of selected small and medium enterprises (SME’s) in Oluyole
local government, Ibadan, Nigeria. It was established that there was a significant influence
between product and business performance. This is supported by Owomoyela, Oyeniyi and Ola
(2013) in their study on the impact of marketing mix elements on consumer loyalty where the
findings revealed that product has an influence on customer loyalty hence increase in
performance.

Since consumers buy satisfaction in form of the benefits they expect to receive from the
product, to design effective marketing programmes, organizations need to know what kinds of
products they are offering consumers. The idea of product as potential customer satisfaction or
benefits is very important. Baker (2014) argues that the basic point about any product is that it
is a bundle of attributes. Producers assume that small differentiating features will be perceived
when they won't, with the result that greater emphasis is given to creating subjective differences
between competitive products through service and promotional efforts.

Mahmood and Fatimah Hajjat (2014) did research on the effect of product quality on business
performance in some Arab Companies. A model was developed to illustrate the product
development stages from conception to distribution. The research analyzed data using
structural equation modeling techniques. Findings revealed that product extrinsic value
influences external performance while product intrinsic value influences internal performance.
Nirusa (2017) conducted research on the mediating role of perceived product quality. Survey
was used to 105 firms. Findings revealed that there is a relationship between organizational
capability and perceived product quality. Gnanapragasam, Cole, Singh, and Cooper (2018) did
a study on Consumer perspectives on longevity and reliability: a national study of purchasing
factors across eighteen product categories. The research established that most consumers
consistently place emphasis on the importance of longevity and reliability when purchasing
new products.

The assessment of consumer on a product based on quality is very essential characteristic in

buying processes and consumers are conscious of the quality difference of all products
(Nugroho & Wihandoyo, 2009). Sometimes the consumers go for better quality brand rather
than considering the price factor of the product. These consumers are most likely to purchase
famous but better-quality brands in the market instead of less known brands. Also, they are
ready to pay higher prices for renowned brands (Boonlertvanich, 2009). Saleem, Ghafar,
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Ibrahim, Yousuf, and Ahmed (2015) found a positive direct effect of perceived quality on
purchase intentions. The literature suggests that there is a significant role of product quality in
buying behavior, but it may vary from culture to culture.

2.2.2 Product Packaging

Product package contains visual and sensual attributes which communicate to consumer. A
product package is a container that has a direct contact with the product, protects, preserves,
and identifies the product (Ampuero & Vila, 2016). According to Simmonds and Spence
(2017), good package design requires knowledge of the materials, their properties,
manufacturing methods as well as conversion process. Package design not only increases the
visibility of the product, but it also helps the consumer to easily recognize the product.
Improvements in product packaging revitalize brands leading to increased sales (Delilampou,
2018).

Packaging plays an important role in containing the content of the product, hence preserving,
and maintaining its quality. Biji, Ravishankar, Mohan and Gopal (2015) states that when
consumers find a highly functional packaging of a popular branded product in a new packaging
system that answers their needs for easy opening, convenience, portability, etc., their reaction
is, why didn’t they think of that before? This is the power of consumer smart packaging where
the design and function of the package is ‘smart’. With the increase in competition and faster
diffusion processes, Product life cycles becomes shorter, hence new product launches must be
thoroughly planned. Test marketing and packaging also play an important role (Majumdar,
2016).

According to Kotler (2014), product packaging is used to attract attention, describe the product
and clutter on retailer shelves therefore motivating customers to buy a product. Imiru, (2017)
suggested that packages should be safe, of high quality and exciting. In addition, colours used
on the package is perceived and associated with quality attributes. Edward (2013) did research
on the influence of visual packaging design on perceived food product quality, value, and brand
preference. It was established that attitudes toward visual packaging directly influence
consumer-perceived food product quality and brand preference.

Kamotho (2011) conducted research on influence of packaging and labelling on consumer

perception of hair care products quality. The research used descriptive research design. 60
hairdressers and 60 salon customers were sampled. It was established that icon, symbols, font
size and patterns, usage instructions, country of origin and information are examples of package
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label attributes that customers look for when purchasing a product. The researcher
recommended that hair care companies should put more emphasis on the product, package
appearance and colours they use on their package. Through this, hair care companies will be
able to attract customer’s attention and influence buying decision.

Rizwan, Vishnu, Raheem, and Muhammad (2014) did a study on the impact of product
packaging on consumer’s buying behavior. Findings revealed that product packaging
influences consumer buying decision. It was concluded that packaging elements such as colour,
design of wrapper, packaging material are factors consumers consider before buying a product.
Saeed, Lodhi, Mukhtar, Hussain, Mahmood and Ahm (2013), conducted research on impact of
labelling on customer buying behavior in Sahiwal, Pakistan. Quantitative research was used.
Data was collected through survey. The study sampled 100 customers. The findings established
that product labelling influences consumer purchase behavior. Vinayak (2015) argues that the
product has always been the key component of marketing mix. The demand of the product can
be influenced by making the product appropriate, attractive, and easily available.

2.2.3 Branding

According to American Marketing Association’s (2010), brand is a name, term, sign, symbol
or design, or a combination of name, term, sign, symbol, or design to differentiate goods and
services from competitors. Andreani, Taniaji, and Puspitasari (2012) noted that brand is a
name, a word, letter, or a combination of all these terms that are used to differentiate
organizational products from its competitors. Branding is an integral part of a product. It is
difficult for a consumer to identify a product without a brand name or brand identity. The brand
promise should always be aligned to the brand performance. It makes no sense to have a poorly
branded high-quality product or a superior branded poor-quality product as the customer will
end up being disappointed by either one or them. Therefore, it is important that the branding
should be aligned with the product to build brand equity and product credibility (Smithson,
2015).

Deborah (2016) did research on the effect of branding on organizational performance in the
retailing of pharmaceutical products, on the mediating role of customers. Findings revealed
that branding has a positive significant effect on organizational performance. According to
research by Narteh (2018) on the effect of consumer-based brand equity on firm’s financial
performance, it was established that brand quality has a negative effect on financial
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performance whereas brand loyalty, awareness and image has a significant positive effect on
profitability.

Musibau, Choi and Oluyinka (2014) did a study on the impact of sales promotion and product
branding on company performance. The study sampled 60 employees. Data was collected using
survey questionnaires. The data was analyzed using chi-square. It was revealed that sales
promotion and product branding influence organizational growth. Kalembe (2015) researched
on contribution of branding in enhancing performance of tourism sector in Rwanda. Findings
revealed that there is a relationship between branding and tourism performance in Rwanda.

Buzdar, Janjua and Khurshid (2016) conducted research on Customer-based brand equity and
firms' performance in the telecom industry. The findings revealed that customer-based brand
equity has an impact on firm performance. However, a study done by Mei (2013) on brand
identity, brand equity, and Performance revealed that brand equity, perceived quality, brand
awareness and brand loyalty, do not have a significant effect on a firm’s performance. Product
strategies may include concentrating on a narrow product line, providing a product-service
package containing unusually high-quality service or developing a highly specialized product
or service. Also emphasized are innovation strategies, coming up with a range plan to create
product variety as well as branding of products to differentiate them from competitors.

Loureiro, Sarmento and Bellego (2017) did a study on effect of corporate brand reputation on
brand attachment and brand loyalty. It was revealed that brand reputation had a positive
influence on the brand’s loyalty. However, it was also established that brand reputation had no
significant influence on the firm’s performance. Park, Pol, and Eisingerich (2013) conducted
research on the role of brand logos in firm performance. It was revealed that brand logo had no
significant influence firm’s performance. Sometimes the consumers go for better quality brand
rather than considering the price factor of the product. These consumers are most likely to
purchase famous but better-quality brands in the market instead of less known brands. Also,
they are ready to pay higher prices for renowned brands (Boonlertvanich, 2009).

2.3. Influence of Price on Consumer Buying Behavior

Price is the amount of money needed to acquire a product. As an allocator of resources, price
determines what will be produced and who will get the goods and services produced (Stanton,
el at., 2014). According to Kinoti and Kibeh (2015), Price refers to what a consumer gives up
(measured in monetary terms) to obtain a desired good or service. They suggest that price is
the most important consideration for the average consumer when buying products.
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Groucutt, Leadley and Forsyth (2014) states that price is the only variable of the marketing mix
that is considered purely for revenue generating. However, just like all the other marketing mix
variables, it cannot be considered purely independent and must relate to the rest of the mix.
According to Kotler (2014), companies use pricing strategies such as penetration pricing,
premium pricing, cost plus pricing, competitive pricing, value pricing, price skimming,
geographical pricing, going rate pricing, psychological pricing, segmented pricing, product mix
pricing and discriminatory pricing. Kagira and Kimani (2010) states that price is one of the
most flexible elements of the marketing mix, in that it can be changed quickly, unlike product
features, promotion and distribution channels. Hence, it can be used as a competitive tool. The
prices attributes that were studied in this research included psychological pricing, penetration
pricing and competitive pricing. The study concluded that consumers were very sensitive to
price and would easily change from one brand to another with changes in prices.

2.3.1 Value Based Pricing

Value-based pricing refers to the process of setting price based on customer perceived value of
a product or service (Nagle & Singlton, 2011). According to research done by De, Milan,
Saciloto and Larentis (2017), it was established that value-based pricing is the most profitable
pricing strategy. Agyekum et al., (2015) state that value pricing is the price of a customer’s
next best alternative plus the value of differentiating features. Value based pricing is product
driven and price is based on perceived product value.

Andreas (2018) did a study on customer value-based pricing strategies and why companies
resist it by adopting a two-stage empirical approach. It was revealed that deficits in value
assessment; deficits in value communication; lack of effective market segmentation; deficits in
sales force management; and lack of support from senior management are obstacles that hinder
implementation of value-based pricing strategy.

Ingenbleek, Debruyne, Frambach and Verhallen (2013) conducted a study on successful new
product pricing practices The research conducted an empirical survey of 77 marketing
managers in two business‐to‐business industries (electronics and engineering) in Belgium.

Findings revealed that value‐based pricing is positively correlated with new product success.
Füreder, Maier, and Yaramova (2014) conducted research on Value-based pricing in Austrian
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medium-sized companies. It was established that use of value-based pricing enables a firm to
generate more returns and create a competitive advantage.

Price affects a firm's competitive position in the market and its market share hence it has a
considerable bearing on a company's revenues and net profits. Kabiru (2014) argues that price
is a perception of value and that is never constant. His challenge therefore is to always position
a product with the value going up. I.e., either lower the price, increase benefits, or increase
benefits more than the increase in price. Sarwar, Aftab and Iqbal (2014) stated that the influence
of consumer psychographics on their tendency to purchase retailer brands, must be reliable and
valid so the consumers are more price conscious and prefer to purchase retailer brands.

Stanton (2014) observes that although non-price factors have become relatively more important
in buyer purchase behavior in recent decades, in developing nations, for majority of the people
especially with commodity type of products, price has remained the major determinant of buyer
choice. He argues that every marketing activity pricing included, should be directed towards a
goal. The firm’s management should decide on its pricing objective before determining the
price itself. To be useful, the pricing objective that management selects must be compatible
with the overall goals set by the company and the goals for its marketing program.

Companies in the retail industry aiming to remain competitive and be considered for any
proposal should always set market-determined prices. Companies that set their prices for
maximum sales and maximum profit must ensure that they can differentiate their products to
reduce the price sensitivity of the consumers. Agyekum, Haifeng and Agyeiwaa (2015) found
that most of Vietnamese supermarket consumers perceive high price as an indicator of product
performance.

2.3.2 Penetration Pricing

Baker (2014) defines penetration pricing as when the firm decides to set the price below the
service value to the customer, thereby ensuring a larger customer base. This happens when a
company trades-off higher revenue against higher margins to sell more volumes. According to
Nagle and Müller (2017), penetration pricing strategy is the process of charging a low price to
product or services hence penetrating the market. Vikas (2015) state that penetration pricing is
the process of setting a price at a lower price for new products or service hence breaking even.
This technique can also be used by firms to look for new market for an existing product. Griffin
(2019) noted that penetration pricing is used to support the launch of a new product, and when
a product enters a market with little product differentiation and where demand is price elastic.
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In a very crowded retail landscape, it can be very difficult to entice new customers and increase
a firm’s market share. Relying on better customer service may not be enough when
discriminating customers are always on the lookout for the lowest prices. In such a competitive
business world, one method for increasing sales is to use penetration pricing to attract
customers to new products (Ward, 2018). Kahsay (2018) in his study on factors affecting tea
prices at the Mombasa tea auction in Kenya, it was established that higher sales volume leads
to low unit costs and higher profits in the long run. Firms price their products at a lower price
assuming that the market is price sensitive and that many companies price their products higher
to “skim” the market.

According to Matan (2016), retail companies use penetration pricing strategy to price their
products lower than its normal price. Through this, an organization can gain market acceptance,
increase its market shares, or discourage new competitors from entering the market. Füreder et
al., (2014) postulated that use of very low price will make companies forego the potential
revenues and give customers a perception that the product is of low quality hence making it
difficult for companies to increase price of a product. In addition, products or services charged
very low makes it difficult for products to take-off in the market (Golder & Mitra, 2018).
According to Baker (2014), organizations can use penetration pricing as a competitive strategy
to increase sales and reach a wider market share. Njomo and Margaret (2016) conducted
research on market penetration strategies and organizational growth: a case of soft drink.
Stratified random sampling was used, and a sample of 160 respondents was selected from
simple random sampling. Correlation was used to determine the relationship between variables.
It was revealed that penetration pricing has a negative impact on organizational growth. Use of
penetration pricing may lead to increase in sales volume and market share. Also, Penetration
pricing strategy is also used by organizations to promote complementary products.

2.3.3 Price Discount

According to Cummins and Mullin (2010), price discounts include money-off coupons, pence-
off flashes, buy one get one free and extra fill packs. In today's supermarket environment,
consumers are frequently exposed to temporary price discounts. Consumers then form
expectations about future price discounting, based on their previous exposure to such activity
at the point of buying. This expectation is the reference price discount for the brand. When
consumers encounter frequent discounting on a given brand, they may come to think of it as a
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discounted brand and expect to find it regularly offered at a discount (Shamout, 2016). In
addition, price sensitive customers are more aware of promotional activities these days and are
more active in searching for price promotional offers (Matan, 2016). However, increase in use
of price discount may lead to reduction of customer repeat purchase rate. Price promotions
have a strong effect towards customers. It influences customers to buy one brand instead of
another and to also purchase it in greater quantities (Shimp, 2018).

Moslehi and Haeri (2016) conducted research on effects of promotion on perceived quality and
repurchase intention. The research used a descriptive survey approach in terms of performance.
Simple random sampling was done to select a sample of 230 customers of coffee shops in 5
districts of Isfahan. It was concluded that price promotion had a significant impact on perceived
product and service quality. Ajan (2015) conducted a study on the effects of sales promotion
on purchasing decision of customer in Baskin Robbins Ice Cream Franchise, Thailand. The
research targeted customers in Bangkok and greater Bangkok area. The sample was made up
of 300. Findings revealed that price discount, free sample and in store display influence product
trial.

Santini, Sampaio, Perin and Vieira (2015) conducted research on influence of discount sales
promotion in consumer buying intent. It was established that price discounts, free samples,
bonus packs, and in-store display are associated with product trial. This is supported by a study
conducted by Familmaleki, Aghighi and Hamidi (2015) analysing the influence of sales
promotion on customer purchasing behavior. The study sampled 150 respondents. Systematic
random sampling was used, and self-administered questionnaires used to collect data. Findings
revealed that there was a significant relationship between attitude towards price discounts
coupons, free samples and “buy-one-get-one-free” with buying behavior.

Glullana, Lerulo, Anlee and Perfil (2012) conducted a study on the influence of discount price
announcement on consumer behavior. The study used two experiments with a sample of 158
participants and SPSS was used to analyse data. The findings revealed that quality perception
could be a possible moderator of purchase intention since it is closely linked to the pricing
structure.

Lee and Chen-Yu (2018) conducted research on the effects of price discount on consumers’
perceptions of savings, quality, and value for apparel products: mediating effect of price
discount affect. Participants were recruited by a research firm in the United States, and an
online survey was used for the data collection. A total of 209 usable responses were collected.
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The results in this study showed that the direct and indirect influences of price discounts on
perceived apparel quality were both significant, but opposite in direction, resulting in an
insignificant total effect.

2.4. Influence of Promotion on Consumer Buying Behavior

Kotler (2014) defines promotion as the activities that communicate the merits of the product
and persuade target customers to buy it. Today’s consumer faces richer information
environments than ever before. According to Haider and Shakib (2018), advertisements shape
the behaviours of the people through cognition. It is the perception of the person towards the
information communicated through the advertisements. An individual observes these
cognitions through his senses, attention, perception, reasoning, language, memory, etc.
Therefore, the best way to attract the customers is to understand the psychological cognitive
aspects of the same consumers.

Chukwu, Kanu and Ezeabogu (2018) found that, advertising and sales promotion together with
the image of a company influence the consumer buying decision. They added that, the quality
and price of a product also influences a consumer’s purchase of a good. Wijesekara (2016)
suggest that quantity sold will depend on the number of dollars the company spends on
advertising that product. In another study conducted on the impact of advertising on consumer
buying behavior, a sample of 120 respondents was taken, and findings revealed that creative
and well executed advertisement has always a great impact on the buying trends or purchasing
behaviours of the consumers (Ahmed & Ashfaq, 2013). According to Kotler (2014),
promotional mix includes advertising, sales promotions, personal selling, and public Relations.

2.4.1 Sales Promotion

Chukwu et al., (2018) stated that sales promotion may be good for well promotion prone
consumers for reasons beyond price savings. Additionally, many consumers shift brands so
that they can receive greater deals that replicate and increase their smart buyer self-perception.
These consumers are positively promotion prone. These consumers always attempt to try a new
product or service that have been promoted. Discount also play an important role in today's
markets and its application among retailers has been increasing during the last years and much
empirical evidence confirm the use of temporary decrease of price to increase short term sales
(Martınez, 2016). The reduction in product prices play a key part in persuading customer’s
product test behavior and through this, the new customer can be paying attention (Blackwell,
Miniard & Engel, 2015). This is supported by Barat and Ye (2014) who states that a coupon
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has direct influence on increase of sales through which consumer’s tendency towards the
product increases.

A Chinese study by McNeill (2016) established that consumers pay great attention to sales
promotion (e.g., gift, sampling, loyalty programs, discounts, and coupon) when selecting
stores. This finding is extended by Familmaleki et al., (2015) who demonstrates that
promotional tools such as print advertisements, direct mail, customer loyalty and discount are
likely to attract consumers to retail stores, leading to their purchase. Interestingly, Maruyama
and Trung (2017) find that in-store advertising (e.g., panel, billboards, and flyers) has strong
potential in affecting Vietnamese consumers’ purchasing decision toward food products.

Phan and Vu (2015) conducted a study on the impact of marketing mix elements on food buying
behavior: a study of supermarket consumers in Vietnam. This study employed a deductive and
quantitative approach. The multiple regression analysis confirms a significant positive
relationship between marketing mix variables and consumers’ actual purchase of frozen food.
Interestingly, Vietnamese supermarket consumers are less concerned about promotion.

According to research done by Pembi, Fudamu, and Adamu (2017); Pacheco and Rahman
(2015), it was revealed that use of flash sales as sales promotion strategies will enable retailers
and manufactures to attract more customers and encourage them to try their products and
services hence achieve their objectives. Amusat and Ajiboye (2013) conducted a research on
impact of sales promotion on consumer buying behavior. The study used simple random
sampling and a sample of 80 respondents was selected. Data was collected using structured
questionnaires. It was revealed that sales promotion activities such as bonus, coupons, free
samples, price promotion and premiums affect buying behavior of consumers.

Shamsi and Khan (2018 did research on the impact of sales promotion on consumer behavior:
an analytical study of readymade garments and footwear segments. The research employed a
combination of exploratory as well as descriptive research design. Self-administered close
ended questionnaire was used to collect data from consumers. A total of 396 questionnaires
were filled. The findings revealed that Sales promotion techniques are effective for influencing
consumer purchase decision and that different promotional tools influence consumer decisions
in varying trend.

Huynh (2016) studied the effect of sales promotion on consumer behavior based on culture.
The study employed different cross-cultural models to analyse the effect. It was found that
culture as well as sales promotion has a strong effect on consumer behavior. However, sales
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promotion can independently influence consumer behavior. Gilbert and Jackaria (2017) studied
the efficiency of sales promotion with respect to UK supermarkets. The study compared
coupon, sample, price discount and buy-one get one free. The efficacy of these tools was
analyzed towards brand switching, brand loyalty, stockpiling, product trial and purchase
acceleration. A sample of 160 was studied through questionnaire survey. The influence of
different sales promotion tools was found significantly different from each other. Buy-one get-
one free was found to be the most preferred promotional tool followed by discount, sample,
and coupon.

2.4.2 Personal Selling

Personal selling is defined as a face-to-face contact process between buyer and seller to achieve
planned goals, which are sales, and build long-standing relations with consumers (Kotler &
Armstrong, 2013). The successful firms in the business world are those that can successfully
study consumer behavior and determine the factors that affect the development of marketing
strategies, which enable them to reach the target consumers through the process of personal
selling. The process of direct contact between buyer and seller plays an active role in
strengthening the relationship between both. This in turn, is reflected, in the decision to
purchase products displayed in retail stores. Hence, organizations are giving a great
consideration to hiring salespersons because they are aware that they represent a key element
in the achievement of personal selling in contact with consumers and in creating a good
impression about the firm and its products.

Bachleda, Fakhar and Hlimi (2012) indicated that staff in personal selling work to convince
consumers to make a purchase decision and that the personal characteristics, which are
characterized by a person showing great personal strength and confidence, and the ability to
persuade and negotiate. These are instrumental in winning consumers, influencing purchasing,
guiding decision about replacement of items, and even trying to help the customers get
unavailable commodities they are seeking to buy. Azam, Hussain and Fiaz (2016) revealed that
salespersons’ credibility, commitment to the promises, patience in dealing with customers and
their appearance have a great impact on customer buying decision. They add that retail
merchants in direct sale stores have a fundamental role in gaining customers, providing them
with relevant information that affects their purchase decision.

The impact of personal selling on the purchasing behavior towards clothes: a case study on the
youth category. Questionnaires were distributed to a sample of 289 youth. It was established
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that Personal sale has an impact on youth buying behavior towards clothes. The employers in
personal sale can affect the clothes-buying behavior of customers when they are aware of all
information concerning the commodities they are selling and their competitors. In addition,
when they listen to customers, dialogue with them, and identify their needs, all these will make
them complete the selling process (Ghazi, 2016). In a study done in Nigeria, findings from the
study established that personal selling is more persuasive among the marketing mix elements.
It aims at consolidating customers and maintaining the buyer seller exchange relationship.
Personal selling helps representatives of a company to explain to their customers how well the
products can satisfy their needs. Therefore, organizations should focus more on the customer
by adopting personal selling as a marketing strategy (zoltanpolla, 2017).

2.4.3 Public Relations

Customer purchases of various products are on the rise. Alongside, newer products are also
entering the market hoping to gain a good share of the market. Today, there is cutthroat
competition in all markets, and the challenge lies heavily with firms to create and maintain a
cordial relationship with customers. This is so they can increase and maintain their market
share. Public relations are one tool to achieve this (James & Rajendran 2013). Public relations
are responsible for constructing and promoting the news and information that will be published
for being read by the public, including the consumer. Therefore, since the state of mind of the
consumer is an important variable in the buying action process (Saliagas & Kellaris, 2015). It
is essential to understand how public relations act and prepare the information, in addition to
how the publishers present it to the readers.

Ali, Gafar and Akbar (2013) in their study on impact of promotional strategies within retail
companies in Malaysia, found that the four independent variables that had been used
(advertising, internet marketing, public relation, personal selling) contributed to only 31.5
percent of the buying decision by the target consumers. Nour, Almahirah and Freihat (2014)
studied the degree of promotion mix elements used by Jordanian shareholding ceramic and
glass production companies. The results of the study indicated that the degree of promotion
activities used in Jordanian shareholding ceramic and glass production companies, which has
ranked according to their importance are as followed: Advertising, personal selling, sales
promotion, followed by publicity, and finally public relations.
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Rahi (2016) carried out a study on the effects of brand image and perceived public relation on
customer loyalty. A proportional stratified sampling was applied. A total sample of 385 was
used and 246 valid questionnaires were collected. It was found that the effect of public relations
on customer loyalty is stronger and more that is, public relations have a positive influence on
customer loyalty. When consumers are loyal to a certain brand, they give it priority when
deciding what brand of a particular product to buy at the store.

2.4.4 Advertising

Haider and Shakib (2018) states that advertising seeks to promote products by means of
publicizing them through different kinds of media e.g., print, and electronic. This is based on
the grounds that messages can reach large numbers of people and make them aware of the
product, persuade and remind them about the firm’s offerings. Over the past two decades, the
internet has altered the quantity and quality of information available to consumers. The internet
contains all the information that was available from traditional media and, when used together
with personal devices such as tablets and smartphones, consumers are able obtain information
anywhere, anytime (Woo, Ahn, Lee & Koo, 2015). Alongside this evolution in information
and communications technology, corporate advertising strategies and consumer purchasing
behavior have also changed. Consumers can now gather information through various media
channels at each stage of their buying decision making process.

Sama (2019) did a study focusing on the effects of television, radio, newspapers, magazines
and the Internet advertisements on awareness, interest, conviction, purchase, and post-purchase
behavior of consumers. The online survey method was utilized for the study. Data was
collected from 529 respondents comprising students in India. The results established that
newspapers advertisements affect all the five stages of consumer behavior. The impact of TV
and the Internet for creating awareness, interest and conviction among the consumers is
statistically evident. The results also revealed that magazines and newspapers are effective
media in influencing purchase and post purchase behavior of consumers. Advertising managers
therefore can should enhance the objectivity of advertisements by investing in appropriate
media.

Recent research demonstrates that such consumers tend to accept the advertising positively if
they have trust in the advertisers e.g., Izquierdo, Olarte and Reinares (2015). Contrary to this,
Drossos, Giaglis, Vlachos, Zamani, and Lekakos (2013) and Dix, Jamieson, Shimul (2016)
studies did not find any positive relationship between consumers’ intentions to receive
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advertisements and their behavioural response to those advertisements. This happen may be
due to the excessing advertising that consumers receive all the time.

2.4.5 New Media

New media is a modern means of communication using digital technologies such as the
internet. There are various mediums that firms are using to communicate to their existing and
potentials customers about their products and services. These includes Word of Mouth, social
media, Sponsorship, experimental marketing etc. These tools allow for the creation,
publication, modification, and distribution of information (Dimmick, Chen, & Li, 2004).

Kyule (2017) investigated the influence of social media on consumer behaviours. From a target
population of 2000 customers, a sample size of 95 respondents was selected. The findings
showed no significant relationship between influence of social media marketing and consumer
behavior. This is in contrary to Hajli (2014) who did a study on the impact of social media on
consumers. The results indicated that social media marketing facilitates the social interaction
of consumers, leading to increased trust and intention to buy. The results also show that trust
has a significant direct effect on intention to buy.

Word of mouth is becoming a strong tool for building a brand in present time. Hossain, Kabir
and Rezvi (2017) conducted research on the influence of word of mouth on consumer buying
decision: evidence from Bangladesh market. 500 respondents’ data were collected, and
Microsoft excel used for analysis. The findings revealed that word of mouth has an influence
on consumer buying behavior. The results suggested that word of mouth was built by trust and
loyalty. This agrees with Wafula (2017) who did a study on the effect of online word of mouth
on businesses and organizations in Kenya. A sample size of 72 respondents was selected and a
survey in form of a questionnaire was shared to the participants through hard copies and online
via Google docs. The data collected from the survey revealed that online word of mouth affects
the sales and revenue. There was a clear indication that it influences sales as many of the
consumers are tech savvy and are on social media and Internet.

According to Kotler (2008), experiential marketing is a way of making the customers live an
experience through the creation of emotions. The use of experiential marketing as a
communication tool is growing within companies as it is believed to provide a competitive
advantage in comparison to traditional communication. A study was conducted by Snakers and
Zajdman (2010) to determine whether experiential marketing affect the behavior of luxury
goods' consumers. The research was conducted by administrating questionnaires to 95
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respondents in the different stores using convenience sampling. The findings revealed that there
is a relationship between the level of emotions felt and the purchase intention of the consumer.

Sponsorship is another way that firms use to market themselves. Akhtar, Nawaz, Rizwan,
Akhtar, and Ahmed (2016) did a study on the impact of sponsorship on consumer purchase
intention, brand image and brand publicity. Collection of data was through questionnaires on
five-point Likert scale, from 100 respondents by using convenience sampling techniques. It
was established that purchase intention and brand image had a strong positive relationship with
sponsorship, while brand publicity had a weak negative relationship with sponsorship.

2.5. Influence of Place on Consumer Buying Behavior

Distribution (also known as the place variable in the marketing mix) involves getting the
product from the manufacturer to the ultimate consumer. Distribution is often a much-
underestimated factor in marketing (Majumdar, 2016). Many marketers fall for the trap that if
they make a better product, consumers will buy it. The problem however is that retailers may
not always be willing to devote shelf-space to new products. Retailers would often rather use
that shelf-space for existing products have those proven records of selling. Manufacturers need
intermediaries and we call it as a supply chain. They may be one or more levels between the
manufacturer and customer. Renner (2018) explains that the economic reason for the existence
of intermediaries is that it is more efficient.

Mena, Bourlakis, Ishfaq, Defee, Gibson and Raja (2016) explain that the decision of where a
firm should sell its products is the question raised under the P of place in the marketing mix.
Place strategies can be classified as intensive, exclusive and selective. These are connected to
what kind of image a firm would like to have. Intensive strategy is just a matter of being visible
and available everywhere and is most used by high price/low-price strategies. Exclusive means
fewer places and selling only one brand. Selective is the middle way, where the products are
sold at selected places that could be outside the company, but with high collaboration between
the two parties.

2.5.1 Distribution Channels

A distribution channel, according to Kotler (2013) is a set of interdependent in the process of

making a product or service available for use or consumption by the consumer or business user.
Mohamud (2018) conducted research on the Influence of marketing mix on consumer
preference: A case study of Nairobi County. The research adopted a descriptive research design
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and used 95 households as the sample size. The study acknowledged that indeed place and
distributions are essential tools in enhancing customer preference. Further the study
recommended that, companies should use strategic channels of distribution to reduce the degree
of uncertainty and increase product availability. They should come up with strategically located
distribution stores in the estates so as customers are able to source their products more
conveniently and with ease. It is important that the distribution channels be both physically
close and be in the emotional proximity as well (Mena et al., 2016). If a business draws
customers to a store location, the site must be easily accessible, must be convenient to the
customer and provide the customer with a feeling of safety upon their arrival and exit.

Chikweche and Fletcher (2012) while examining the African market, established cases where
distribution channels were so much related to the development of unconventional channels. In
those cases, the use of informal channels was applied besides the traditional or formal ones.

By formal channels, Chikweche and Fletcher (2012) refer to family-owned supermarkets, local
grocery shops, and wholesalers while the informal channels are buying clubs, women’s group,
and open market stalls. Prahalad (2012) indicated that firms should think about new ways to
reach the consumers, instead of just thinking about places to sell. Ali and Ahmad (2016) also
made it clear that among the major challenges of serving markets is the need to ensure
availability of products and services all over the country and not just in cities.

2.5.2 Geographical Location

McHugh (2014) conducted a study to determine whether location influence consumer behavior,
comparing rural and urban use of online shopping in Wales. Data collection was conducted
through the use of quantitative questionnaires. This study found that online shopping frequency
is not affected by location. The results further understanding of the impact the internet can have
on rural consumer behavior.

According to Onstein, Damme, Tavasszy, Weijers and Kraan (2015), marketers need to be very
keen when it comes to usage of distribution locations to increase the availability of their
products. It means that if the distribution channel is applied poorly, chances are very high that
there will be a decrease in the availability of products. This is in agreement with Kumar and
Rajan (2012) who states that products that are convenient to buy in a variety of stores increase
the chances of consumers finding and buying them. Having the right product available at the
right place and with the right price is important in influencing consumer buying decision. The
concept of place is having the right products available in the right quantities and at the right
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location when the customer needs them, and the location is accessible for them to reach the
product with much ease. Ali and Ahmad (2016) avert that consumer are likely to prefer
purchasing from a firm whose product availability is assured.

Another study done by Phan, et al., (2015) revealed that location of the product influence
consumer purchase decision. The results are consistent with findings in studies of buying
behavior in USA (Castro, Majmundar, Williams, & Baquero, 2018), in India (Wani, Ali, &
Farooq, 2016) and Malaysia (Nasermoadeli, Ling & Maghnati, 2013). Bohl (2012) did a study
to determine the effects of store atmosphere on shopping behavior. It was established that
shopping convenience (convenient location, long opening hours, accessibility, and large
parking area) and store atmosphere (cleanliness, colour schemes, music, lighting, and scents)
increase consumers’ purchase frequency and money spent on products.

Choosing the actual geographical location for the business contributes to the bottom line.
Consider traffic patterns and accessibility for both customers and employees. Consider too that
even if a location does not have specific zoning, there may be covenants and deed restrictions
on the chosen location. "Bloomberg Business week" writer, Peter Coy, expresses that while
Houston, Texas, for instance, has no formal zoning code “the separation of land used is
impelled by economic forces rather than mandatory zoning. Developers employ widespread
private covenants and deed restrictions, which serve a comparable role as zoning.

It is worth noting that shoppers may become “loyal” to a location where a retailer may have a
store, but not be particularly loyal to any retailer within that location. This can occur when a
variety of retailers inhabit a small area, each providing the shopper with similar offerings. The
wealth of options available to the shopper in this compact zone could result in them becoming
loyal to an area, while they may not become particularly loyal to any individual retailer’s store
location. In all these cases, it is up to the retailer to develop a combination of desired
atmospherics, service, and reliability that provide the maximum value for their shoppers. When
these in-store elements are properly maintained, they can promote a preferential status with
shoppers, which results in a desire to shop at that store location. This preference can be so
strong that not only will they pass several competitors, but they may also even pass alternate
locations of the same retailer, to buy from that store (Renner, 2018).

2.5.3 Stock Availability

According to Kotler and Armstrong (2013) product availability is a major factor when it comes
to customers’ buying decision. Sometimes there are supply hiccups that result in shortages in
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supplies or even complete runouts. Complete runouts cause inconveniences and lack of trust in
loyal customers when they fail to get stocks of their requirements. Product and service
availability is therefore a measure of supplier or retailer reliability.

A study was done to determine the customer preference based on the availability of retail store.
It was established that income and the young age customers have a favourable effect on the
choice of the retail store, apart from occupation and the adult customers (Revelational & Devi,
2012). This implies that the organized retail stores need to analyse the customer database
thoroughly so as to determine the type of customers who prefer the store and monitor their
buying behavior.

There is also a fact that gender is a vital factor in the choice of retail trade. While men prefer
to save time, which is more possible in traditional outlets, women prefer to go to organized
retail outlets (Ravilochanan & Devi, 2012). This is because women are choosier, look for other
items that are on display, and take time to compare various items – this would vary from textiles
and garments to handbags, shoes, etc. The organized retail trade can take advantage of these
women’s buying behavior and review their shop layout to attract women customers to the items
of their liking by positioning this section nearby the entrance.

Research was done by Chishty, Loya, Ismail and Zaidi (2015) on consumer response in out-of-
stock situation at a retail store. Sampling technique was applied, and questionnaires were
distributed to a sample size of 200 respondents. Findings revealed that consumers who had
limited time to shop and were not able to find the preferred brand were more likely to leave the
store or delay purchase, and hence blocking the revenue stream of the retail store. Customers
using brands for less than 1 or 2 years substitutes the product immediately, but a brand loyal
person who had used the product for more than 6 years was ought to delay or leave the store.

2.5.4 Efficiency

Companies’ goal is to get their products to the retail stores faster and more cost effectively than
the competitors. This is a key factor to top-line growth and competitive advantage of the firms.
In India, like many other developing countries, they are yet to update their distribution models
to keep up with the world’s competitive and connected markets. The cost of distribution can
run as high as 18 to 25 percent of sales. This makes it the second-largest line item after raw
materials. As a result of these costs putting pressure on margins, channel partners want better
returns and faster growth. Rethinking distribution, then becomes the ticket to improved sales
and top-line growth (Kearney, Coughlan & Kennedy, 2012).
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One of the key factors in retail distribution channels from manufacturers to distributors to
retailers is the return on investment. However, many industries fear compromising the needs
of other stakeholders, but if these worries are put aside, then a “win-win-win” distribution
model is developed. This is determined by three dimensions; coverage of retail outlets by
channel partners (direct versus indirect), channel productivity (more sales, lower costs), and
the pay-out (total retail expenditures) (Kearney et al., 2012). Using intermediaries comes
several benefits. The key benefits are improved efficiency, which results from adding
intermediaries in the channels of distribution, improved transaction systems, a better
assortment of products, and easier search engines for goods as well as customers.

According to Miriti (2016), intermediaries also help to reduce the cost of distribution of the
manufacturers when they take up the transactions and it becomes routine to them. The
intermediaries help both buyers and sellers in the search processes when producers are to
determine their customers' needs, while customers are searching for certain products and
services. This helps producers make some of their commonly used products more widely
available by placing them in many different retail stores, so that consumers are more likely to
find them and at the right time.

2.6. Chapter Summary

This chapter reviews literature on the influence of marketing mix on consumer buying behavior
focusing on the research questions of this study including how product influence consumer
buying behavior; how price influence consumer buying behavior; how promotion influence
consumer buying behavior; and how place influence consumer buying behavior. The next
chapter discusses the research methodology that was used in this research including overall
design, population and sampling, research procedure, data collection and analysis.