The Effect of Extrinsic Cues of Products on Brand Preference and Customer Purchase Intentions: The Moderating Effect of Social Factors

Author Name: Dr. Abdollah Naami, Klara Sheykhaghaee*, Ali Ghanbarzad
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Abstract

The present study aims to review the role of extrinsic cues of products in brand preference and customer purchase intention and the mediating effect of social factors. The statistical population of the study is comprised of customers demanding foreign automobiles in the city Tehran. There are infinite number of these customers. The simple random sampling method has been used in this study. The standard survey was distributed among 400 customers but 310 surveys were returned and analyzed. The structural equation modeling has been used in order to analyze the information using AMOS18 software. The obtained results indicate that the relationships between all of the research variables have been confirmed. Conversely, the moderating role of social factors has not been confirmed.

Keywords

Extrinsic Cues of Products/Brand, Brand Preference, Brand Purchase Intention

Introduction

With the globalization of economy and development of international business over the past few decades, consumers have been exposed to a wide spectrum of foreign products (Aayed Qasem, et al. 2016). The rise of globalization has led to a strong growth in the internationalization of consumer and industrial markets. It is because of the growth of world markets that the country of origin and brands have risen. Generally, customers rely on both intrinsic and extrinsic cues of the products and services in order to judge or forecast their quality (Nazari and Rezayi, 2014). Today, with the increase in the number of brands, there are two groups of intrinsic and extrinsic cues. The role that extrinsic factors, as factors that do not depend on actual cues of products, play in the understanding of the level of quality of products and consumers purchase intention are more important than ever. Customers’ judgment is an indication of their understanding of various dimensions of intrinsic and extrinsic cues of products. Intrinsic cues of a product are its fundamental and basic cues which cannot be managed or changed without changing the physical cues of products. Extrinsic cues are the nonphysical cues of the products (Olson, J. C. and Jacoby, 1972). For example, about car-related products, durability, engine capacity and function are the essential and intrinsic cues; whereas, price, country of origin and market brand are their extrinsic cues which influence the understanding of the customers of the car (Aayed Qasem, et al. 2016). Researches have shown that consumers are often not able to accurately evaluate these cues and the cues that can cueificantly affect the product quality might be neglected by them. Research literature showed that in general, intrinsic cues are usually more reliable; unless enough intrinsic cues in the minds of consumers cannot be forecasted or the consumers are not confident enough in their ability to evaluate the intrinsic cues (Kardes, F. R., Cronley, M. L., Kellaris, J. J. and Posavac, S. S. (2004). Other studies have also shown that customers are not always able to accurately evaluate these cues; in which case the product quality is judged post purchase not prior to it. Perhaps the most important reasons behind this inability are misunderstanding, lack of self-confidence and inability to obtain information (Veal, et al. 2006). In fact, there are a number of researches who have been attracted to the theory of extrinsic cues (Ching, F. C. and Chang, 2008). On the other hand, some of the extrinsic cues have a cueificant effect on the evaluation of quality and function of the product. Some of these cues are the country of origin, brand and price (Kalicharan, 2014). Given the limitations that consumers face in terms of time and cost, they have been deprived of the ability to accurately evaluate the quality of products and they won’t have an accurate understanding of the product cues; thus, the customers attempt to estimate the quality level of various brands based on the extrinsic factors of the products. Understanding the quality level of products is a mental process which differs from one person to another (Alhabab, 2007). Given the increase of the informational asymmetry in the market, in addition to the intrinsic cues of the product, the producers must also take into consideration the extrinsic ones. Firms that produce high-quality products use the extrinsic cues in order to enable the buyers to detect their products and don’t confuse them with low-quality ones (Nazari and Rezayi, 2014). Recently, numerous studies have investigated the effectiveness of price and brand image of various source countries on the customers’ understanding of the product and using it for evaluating its brand and quality. By taking into account the globalized business environment and the enhancement of consumers’ choice and purchase power in addition to the importance of the aforementioned cues in the process of selecting a product, it is clear that there isn’t a single study that focuses on a population in Iran. By reviewing the literature, it becomes evident that the understanding of consumers from third-world countries of foreign business brands has not been reviewed in any research.

Therefore, this study aims to review the role of intrinsic and extrinsic cues of imported automobiles and the products associated with them on brand preference and customer purchase intention by taking into consideration the moderating effect of social factors.

In order for a consumer to have an opinion about the quality of a product, they need to use intrinsic and extrinsic cues.

Conclusion

This study aims to review the role of extrinsic cues and characteristics of products on brand purchase intention and brand preference and the role of social factors in the relationship between brand preference and purchase intention has been investigated. As the research results showed, all of the relationships between research variables have been confirmed and the brand preference variable, as the moderating variable, has been able to increase the effect of the extrinsic cues of products on purchase intention. In this field, Qassim, et al. (2016) conducted a research on automobile production in Oman and came to the same conclusion. Harichand, et al. (2004) conducted a study in America and obtained similar results. By accurately recognizing the perception process and consumers’ behavior, the consumers will become more satisfied. In this respect, the marketing sectors of the firms must recognize the products quality cues and increase their products’ chance to be selected by considering them in the marketing and production programs. Therefore, the cues that consumers use for recognizing the quality level of various products are different as well. Using cues for detecting the quality of a product is rather logical and will lead to the creation of a balance between supply and demand forces at various levels of price (Nazari, et al. 2014). The results obtained from identifying the quality cues can be used for implementing processes such as pricing, market segmentation and product positioning (Verma and Gupta, 2004).

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