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CHAPTER 2

THEORITICAL BACKGROUND

This chapter contains the background theoretical framework of this study. This

chapter will define and discuss theory in regards to the variables that is used in this

research. Furthermore, this chapter includes varies opinions on the understanding of

each variables based on the experts opinion and previous studies gathered from

books, journals, and other supporting statements.

2.1. Consumer Decision Making Process

Since the main aspect of this research is about consumer purchasing a

product, first of all understand the Consumer Decision Making Process.

According to Blackwell, D’Souza, Taghian, Miniard, and Engel (2007) the

decision making process consists of Need Recognition, Search Information,

Pre-Purchase Evaluation of Alternative, Purchase, Consumption, Post

Purchase Evaluation, and Divestment.

Figure 2.1 Consumer Decision Making Process (CDM)

Source: Blackwell, D’souza, Taghian, Miniard, & Engel, A. (2007). Consumer Behavior (2nd ed.). Thompson.

Divestment

Post Purchase evaluation

Consumption

Purchase

Pre-Purchase Evaluation of Alternative

Search Information

Need Regonition

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2.1.1. Need Recognition

According to Blackwell, D’Souza, Taghian, Miniard, and Engel (2007)

Need recognition is a situation occurs “when an individual senses a

differences between what he or she perceives to be the ideal versus the

actual state of affairs”. The first thing that consumer does before

wanting to purchase a product is to be in a situation of a problem, the

need recognition comes along as consumers need to solve the problem.

Consumers will likely to purchase or buy things if consumers believe

that the product ability to solve a problem is worth more than the cost of

the product making need recognition the first step towards the consumer

purchasing decision.

2.1.2. Search and for Information

After recognizing the problem before purchasing the product, the second

stage of the decision making process is the search for information.

According to Blackwell, D’Souza, Taghian, Miniard, and Engel (2007)

search information occurs after the need for the product actually occur,

the consumers will eventually look for information and solutions to

solve their problems and satisfy the needs. The search maybe internal or

external, when consumer search information internally they would

retrieve knowledge from memory or genetic tendencies or maybe

externally collecting information from other references.

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2.1.3. The Pre-purchase Evaluation of Alternative

The third stage of the decision making process is the pre-purchase

Evaluation of alterative. After gathering information internally and

externally then evaluate option consideration of which product the

consumer willing to purchase. In this particular stage consumer consider

the salient attribute as potentially the most important attribute in

purchasing a product, such as price and reliability. Considering which

product, service, or brand to choose consumers compares and make

decision based on the new or pre-existing evaluation stored in the

memory and also each consumer has different evaluation criteria; each

consumer will have different consideration, standards, and specifications

in order to compare brands and products.

2.1.4. Purchase and Consumption

The next stage is the actual purchase and consumption, after undergoing

the first three stages of the decision making process, consumers go

through the actual purchase itself the purchase can be through many

things such as, direct purchasing, catalogue, advertising on television or

online purchase. However, the consumer purchasing may be influenced

by in-store choices that influenced by sales person, point-of-purchase

advertising, product displays, and electronic media. What it is intended

from the previous- previous stages might differ during the choice stages.

After acquiring the product comes a stage where consumer consumes

the product. Consumption make occur immediately or even delayed.

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Satisfaction in this stage are affected by many things such as the how

the consumer consumes the product or how long will the product last

until the next purchase.

2.1.5. Post-consumption evaluation.

In this stage of the decision making process, the consumer evaluate the

product after experiencing the product itself. The experience evaluation

will be between dissatisfaction and satisfaction that will be explained

later on in this chapter. The outcomes of the evaluation is important

because consumers will incorporate the evaluation in the future decision

and the future decision making process are shorter.

2.1.6. Divestment

The last stage of the decision making process is the divestment. In this

particular stage the consumer has several options whether to dispose,

recycle, or remarket the product. Decision will be based on the nature of

the product and each individuals environmental concern.

According to Schiffman & Kanuck (2004) satisfaction and brand loyalty

play a factor in influencing Consumer Decision Making Process when

consumers repeat purchase. Blackwell, D’souza, Taghian, Miniard, & Engel,

A. (2007) argues that if the outcome of post-consumption evaluation is

satisfaction the decision making process would be shorter. They stated that if

the consumer is highly satisfied subsequently the consumer would not go

through the three initial stages of Consumer Decision Making Process and

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directly start at the pre-purchase evaluation stage. Also Schiffman & Kanuck

(2004) implied that brand loyalty is a result of satisfactory in initial

purchases called “instrumental conditioning”. Brand loyal consumers do not

typically go through an attribute assessment at the pre-evaluation of

alternative stage. On the consumer will eventually pick the same familiar

brand based on previous positive feeling.

2.2. Theoretical Framework

2.2.1. Consumer Satisfaction

Oliver (1997) defines satisfaction as “the consumer’s fulfillment

response, the degree to which the level of fulfillment is pleasant or

unpleasant” (p. 28). It is well known from many studies that consumer

satisfaction is an important phenomenon. Leingpibul, Thomas, Broyles,

and Ross implied that it is essential to understand satisfaction even

further especially the idea that satisfaction has a predictive relationship

towards (re)purchasing, it is assumed based on the awareness that there

are already many studies who study the outcomes of satisfaction

(Szymanski and Henard 2001; Pappu and Quester 2006). These

outcomes would lead to many beneficial aspects towards companies, for

example a study by Reichheld (1994) captured the essence that

satisfaction is a critical element to the increase of sales and profitability,

he state that a decrease of defection rate would lead to a higher income

to the company. Another study implied that a satisfied consumer will

give companies ability to extend its brand(s) and its products, which

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allows the company to reduce cost on launching new products. (Reast

2005, Thamariselvan and Raja 2008).

Satisfaction leads to word-of-mouth it ease company to acquire new

customers (Soderlund and Ohmand 2003; Golicic, Broyles and

Woodruff 2003, Lymperopoulos and Chaniotakis 2008). Due to

satisfaction companies could also charge higher price because customer

who is satisfied would likely tolerate higher prices (Reichheld 1996;

Oliver 1997). The outcome of satisfaction has already been proven to be

very beneficial to many companies.

There are many phenomenons to the idea of satisfaction; however two

variables that the researcher is going to use for this research are meet

expectation and Affective feeling state.

2.2.2. Meet Expectation

Satisfaction in this phenomenon could be referred to as the cognitive

evaluation of one’s outcome whether a product meets the pre-usage

expectations (Oliver, 1980). Similarly with Tolman (1932) implied that

meet expectation is a notion that consumer’s belief on certain desired

attributes, eventually after the post-purchase that the consumers receive

the actual performance and evaluate with the expectations held prior to

purchase. Tolman (1932) implies that Positive disconfirmation is

expected to occur if product performs better than the desired

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(expectation). On the other hand, negative disconfirmations occur if

product performs less than the desired (expectation).

The affective disconfirmation consists of two process. According to

Miller (1977) the expectation is affected by several aspects of marketing

stimuli such as prior experience, word-of-mouth and advertising. On the

other hand, the disconfirmation comes from the usage experience.

2.2.3. Affective feeling state

Oliver (1997) refers affective feeling state as psychological

interpretations of products performance levels that is tied to one’s

internal frame of mind. Most studies imply that consumer satisfaction

comes from consumer’s cognitive judgment; however recent studies

argue that the phenomena of affective feeling (emotional) also play an

important role in consumers’ post-purchase responses. Cohen and Areni

(1991) argues the same thing, affective feeling could also be a primary

motive to post-purchase judgment thus giving a richer understanding of

consumer satisfaction. Furthermore, Westbrook (1980) note that

consumers satisfaction is directly influence by the affective experience

and individual determination that independent positive and negative

affection.

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2.2.4. Consumer Loyalty

Oliver (1999) defines loyalty as a commitment of customers to make

(re)purchase towards product or services despite the situational factors

or competitors attraction. In marketing literature, Consumer loyalty was

originally a behavioral perspective, as what Cunningham (1956) defines

loyalty as behavioral perspective for consumer to repeat purchase

product. However, further research suggested that instead of just

behavioral approach loyalty consist of more than one construct, instead

loyalty compose of the attitudinal towards the brand (attitudinal loyalty)

and one’s repeat purchase on the brand (behavioral loyalty) (Day, 1969;

Jones and Susser 1995)

2.2.5. Attitudinal Loyalty

Oliver (1997) mentioned that loyalty entails upon four aspects which

consist of cognitive, affective, conative and action. He state that

Cognitive loyalty is consumer’s feeling compelled on one brand over

another. Oliver (1997) implies that consumer becomes attitudinally

loyal if the consumer experience cognitive loyalty towards a brand.

Similarly to what Day (1969) mention that attitudinal loyalty is based on

cognitive loyalty, due to situational constraints consumer would isolate

purchases product based on their strong attitude.

Consumer who has strong attitudinal loyalty is committed to a brand or

company and would repeat purchase based on strong internal

disposition. Research by Rauyruen and Miller (2007) implies that

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attitudinal loyalty could also be viewed as an extension towards

consumer’s psychological attachments and attitudinal advocacy towards

the organization. They imply that attitudinal loyalty not only could lead

to repurchase intention but also could lead to positive word-of-mouth

intentions as well as recommend others to purchase use the products of

that particular company (Rundle-Thiele, 2005a; Zeithaml et al., 1996).

2.2.6. Behavioral loyalty

A research from Powers and Valentines (2008) denote that behavioral

loyalty aspects comes from consumer’s frequency and regularity of

one’s repurchase of the company’s product. Similarly to what Dick and

Basu (1994) state that behavioral loyalty focus only on the outcomes of

the being loyal such as repeat purchase. So therefore, instead of focusing

on cognitive aspects, behavioral loyalty entails upon the action aspects

(Oliver (1997).

These two compositions of loyalty are two distinct construct. According

to studies behavioral loyalty can convert loyalty into actual purchase, on

the other hand attitudinal loyalty shows loyalty not through purchases

but instead, through positive word-of-mouth and recommendation to the

brand, product or company. (Kumar and Shah, 2006; Lam et al. , 2004;

Fullerton, 2005).

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2.2.7. (Re)purchasing Intention

Purchase intention could be defined as the tendencies of personal action

relating to a product (Bagozzi et al. 1979; Ostrom 1969). Similarly with

Spears & Singh, S.N. (2004) statement, they defines purchase intention

as individual’s plan to purchase a product or services. Purchase intention

occurs if the consumer motives match with the characteristic or

attributes of the product or services under consideration. On the other

hand, repurchasing intention does not occur prior to initial purchase of

the product. Many studies implied that repurchasing intention is a great

indicator to an actual purchase (Fishbein and Ajzen 1995; Jones and

Sasser 1995; Keller 2003).

2.3. Research Framework

This research is a replication based on the journal of a previous research by

Leingpibul, Thomas, Broyles, and Ross (2009) titled “Loyalty Influence on

the Consumer Satisfaction and (Re)purchase Behavior Relationship” (2009).

The model for their research is as follow:

Figure 2.2: The model from the Journal “Loyalty Influence on the Consumer Satisfaction and

(Re)purchase Behavior Relationship”(2009) by Leingpibul, Thomas, Broyles, and Ross.

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As it is shown from the figure 2.2 the model from the previous study by

Leingpibul, Thomas, Broyles, and Ross indicates variables of satisfaction

(meet expectation and affective feeling state) has influence on

(Re)purchasing intention variable (repurchasing intent). However, it is

mediated by loyalty variables (attitudinal loyalty and behavioral loyalty).

Proposed Model

The previous study intended to measure the indirect influence of loyalty in

between satisfaction and (re) purchasing intention. However, there are minor

changes to the framework of this study since researcher intention of this

research is to test the direct influence of loyalty upon satisfaction and (re)

purchase intention. Therefore, the recommended framework is divided into

three Sub Section.

Figure 2.3 Sub Section 1

Based on the model from the above the hypotheses are as follows:

Many study implied that satisfaction would lead to (re)purchasing behavior.

However, from the previous study it is shown that satisfaction and

Attitudinal Loyalty

Meet Expectation

Affective Felling

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(re)purchasing behavior is mediated by loyalty. One of the phenomenon of

satisfaction like meet expectation will lead to attitudinal loyalty, because

customers are loyal if customers are satisfied Therefore, meet expectation

has a positive impact on attitudinal loyalty. (Jones and Sasser 1995; Oliver

(1999); Soderlund and Ohman (2005).

H1: Meet expectation has a positive impact on attitudinal loyalty on the

isotonic drink brand

As it is mention before many study implied that satisfaction would lead to

(re)purchasing behavior. It is assumed that satisfaction and (re)purchasing

behavior is mediated by loyalty. Another phenomenon of satisfaction like

affective feeling will lead to attitudinal loyalty, because note that consumers

satisfaction is directly influence by the affective experience and individual

determination that independent positive and negative affection. Therefore

affective feeling has a positive impact on attitudinal loyalty. (Westbrook

1980; Oliver 1997).

H2: Affective feeling has a positive impact on attitudinal loyalty of the

isotonic drink brand

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Figure 2.4 Sub Section 2

Based on previous study it is assumed that attitudinal loyalty would lead to

repurchasing intention. It Is because many studies has indicate that consumer

who has strong attitudinal loyalty is committed to a brand or company and

would repeat purchase based on strong internal disposition. Therefore,

attitudinal loyalties and (re) purchasing has a positive impact on repurchase

intent (Oliver 1997; Rauyruen and Miller, 2007).

H3. Attitudinal loyalty has a positive impact on repurchase intent of the

isotonic drink brand.

Figure 2.5 Sub Section 3

Study from Jacoby and Kyner (1973) suggest that attitudinal loyalty and

behavioral loyalty should be merged into macro construct. Similarly to what

Attitudinal Loyalty

(Re)purchasing

Intention

Behavioral Loyalty

(Re)purchasing Intention

Attitudinal Loyalty

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East et al. (2005) implies that loyalty should be a combination of relative

attitude as well as repeat purchases. However, different study suggested that

loyalty instead of being one construct, attitudinal loyalty should lead to

behavioral loyalty (Liska 1984; Russell Bennett et al. 2007). Furthermore,

East elt al.’s (2005) argues that attitudinal and behavioral interaction

between loyalty’s construct. Therefore, there is a predictive path between

attitudinal loyalty and behavioral loyalty.

H4. Attitudinal loyalty has a positive impact on Behavioral Loyalty of the

isotonic drink brand.

Based on previous study it is assumed that behavioral loyalty would lead to

repurchasing intention. According to many studies behavioral loyalty can

convert loyalty into actual purchase and would repeat purchase based on

strong internal disposition. Therefore, attitudinal loyalties and (re)

purchasing has a positive impact on repurchase intent (Kumar and Shah,

2006; Lam et al. , 2004; Fullerton, 2005).

H5. Behavioral loyalty has a positive impact on repurchase intent on the

isotonic drink brand.