Study Of Factors Influencing Customer’s Purchase Decision Of Gold Jewelry In Myanmar

Abstract

In Myanmar, demand for gold jewelry has been increasing throughout the year. People buy gold jewelry due to their preference and some for displaying their self-image. Some people are willing to buy gold jewelry for their innovative design whereas some only buy gold jewelry in expectation of future value of gold. Trust in gold jewelry retailer plays a role in purchase decision of gold jewelry and some buy gold jewelry when they can bargain price discount from the jewelry retailer. This study aims to understand which factors have more influence on the purchase decision of gold jewelry. The objective of this study is to investigate which factors have an influence on the purchase decision of gold jewelry. This research was conducted by performing the quantitative analysis achieved in a form of online questionnaires to collect all data required. The target respondents for this study is people living in Myanmar and who have plans to purchase gold jewelry. After screening all the survey, there are totally —– respondents from Myanmar. Convenience and Snowball sampling methods are used to collect the data. Then the data analysis was done by multiple linear regression.

Keywords: gold jewelry, buyers’ preferences, self-image, product design, trust, expected future value, price discount, purchase decision

Chapter 1: Introduction

Among the luxurious items, gold jewelry has a long history and has many different uses in different cultures for many years. Danziger (2004) found out that gold jewelry is seen as a symbol of status in most cultures except Christian and Buddhist. People purchase gold jewelry for various purposes like bridal jewelry such as for engagement, wedding and anniversary, or fashion jewelry for daily wear and for business purpose as a financial investment (Mimnun & Parag, 2015). In Myanmar, most women and teenage girls wear gold jewelry like rings, necklaces, earrings and bracelets daily. Purchasing gold jewelry is common for Myanmar people, especially in the occasion of birthday, marriage ceremony and religious ceremonies. In addition to these occasions, there are many other factors influencing people in Myanmar to purchase gold jewelry.

What influences the customer to buy gold jewelry? What dictates their choices of gold jewelry to buy and how much money and time to spend? Graeff (1996) suggested that purchase decisions are influenced by psychological factors such as self-concept and self-image. The importance of displaying certain social image among one’s peers has become of greater significance and has influenced the purchase decision of gold jewelry as gold creates an emotional attachment to the consumers because they consider gold as a precious metal or as a symbol of purity, luxury, wealth, status, prestige, beauty and affection (Asha & Christoper, 2014). Dempster (2006) stated that ancient women wear gold jewelry as a symbol of status and dignity.

Gold can be separated in two forms: physical gold and paper gold. Physical gold is gold jewelry purchased for its design and for displaying self-image whereas paper gold is gold jewelry purchased for the financial investment for long-term benefits (Paul, n.d.). Lakshmi (2016) noted that people are influenced to purchase gold because of their growing prices with the intention of long term investment and prefer to buy quality marking. For the past centuries, people in Myanmar considered gold purchase as a future investment. With the absence of reliable banking system in Myanmar, local people depend on gold as a form of physical cash and purchase gold jewelry as a hedge against inflation.

Solomon (2004) stated that there are a number of internal and external factors influencing the purchase decision of gold jewelry. It can be either be because people want to enhance the quality of life, reward hard work (Danziger, 2004a), gain extra feeling of confidence, get memorable experiences, to be more special and unique, to express their personality, as a status symbol, or to fulfil their psychological needs (Danziger, 2004b). Increasing price of gold price, financial securities, symbol of social status, trust in the brand, celebrity endorsement, promotion, product design might be some influential factors to purchase decision of gold jewelry.

As a result, this study aimed at exploring the factors which influence the purchase decision of gold jewelry in Myanmar and to find out which of the independent variables, buyers’ preferences, self-image, product design, trust, expected future value and price discount has more influence on the dependent variable, purchase decision of gold jewelry.

Chapter 2: Literature Review

Self-Image

Self-Image refers to how individuals perceive themselves (Sirgy, 1982). Graeff (1997) defines self-image as individuals’ perceptions of their personal qualities, including appearance. Self-Image is strongly related to a consumer’s perception of his or her public appearance and other personal qualities (Rosenberg, 1979). Zinkhan and Hong (1991) found out that people are concerned about how they appear to the public. Landon (1974) conceptualize self-image into two dimensions – actual self and ideal self. Actual self refers to how a person sees themselves and Ideal self refers to how they aspire to see themselves and Sirgy (1982) illustrates how the actual self is different from the ideal self and how customer is motivated to associate themselves with products whose image boosts their self-image. Purchase decisions by the consumer depends on whether the product matches one’s self-image (Tepeci, 1999). Phau and Lo (2004) found out that consumers behave consistently with their self-image to maintain their self-esteem and accept that self-image alone can direct specific purchase behavior. Consumers seek to purchase products that match their self-concept and these purchases allow consumers to project their preferred self-image into their social group interactions (Dolich, 1969). Jokinen (2011) noted that the gold jewelry always come to people’s attention when people evaluate each other as gold jewelry is a tool to build and reflect self-image.

Product Design

Product design can play a key role in favorable consumer response towards purchase decision. Individuals who are fashion conscious are attracted to designs with appealing styles. Packaging, product design and merchandise display can stimulate a sale immediately (Landwehr, Wentzel & Herrmann ,2012). Product design is an essential aspect of the process of innovation (Aubert, 1982; Walsh, 1996) and can also be seen as the distinct importance it has in improving competitiveness and business performance (Roy & Potter, 1993; Trueman, 1999). Lorenz (1995) noted that nobody has been able to develop a clear way of characterizing design so as to achieve something like an equivalent of the four P’s in marketing. Crilly, Good, Matravers, and Clarkson (2008) noted that product design is regarded as a way of communicating product meaning to consumers and Noble and Kumar (2010) regarded as a source of competitive advantage to firm strategy and market success. Product design can influence purchase decisions of consumers (Homburg, Schwemmle & Kuehnl, 2015) and improve their loyalty (Chitturi, Raghunathan & Mahajan, 2008), and thus increase firm performance (Candi, 2010). Peters (2005) suggested that design is the only thing that differentiates one product from another in today’s competitive market and serves as a brand identifier (Bednall, Gendall, Hoek & Downes, 2012). Ramachandran and Karthick (2014) stated that the main attraction towards the gold jewelry items is its unique design style.

Trust

Jon (2019) acknowledged trust as a focal ideal for understanding economic behavior and organization. Rousseau (1998) defined trust as “a mental position including the goal to acknowledge affectability dependent on uplifting desires for the expectation of the buyer’s purchase decision. Trust received attention of numerous marketing practice and it can be more or less easily influenced by marketing management to drive sales because it might have some distinctive influence on buying behavior (Peter, 2008). Trust is crucial to develop a long-term, lasting interaction between a retailer and his customers and has a positive influence on purchasing decision due to its ability to reduce uncertainty and some are even willing to pay a premium price for it (Luhmann, 2000). People consider gold as a precious metal representing luxury, wealth, status and prestige so people make purchase decision of gold only when they trust the retailer.

Expected Future Value

Expected future value refers to the belief in the future value of the investment increasing and that the investment will provide security for the future. People purchase gold jewelry as an investment for the future (Wang, Ying, Sun, Shaojing, Song & Yiping, 2012) and as a security for future needs because gold can be easily converted to money (Ertimur, 2003). Rao, Sahu, Sathyapriya and Tholath (2014) found out that some people purchase gold for dual benefits (adornment and security for future needs). People in myanmar purchase gold jewelry in order to protect currency fluctuations as it can be used as an investment propositions and a global standard currency (Paul, n.d.).

Price Discount

Price is the amount of cash that must be paid by the consumer to get the product. Tversky and Kahneman (1991) noted that actual prices are discounts or surcharges relative to price expectations. Price is a principal factor for a purchaser when selecting a product and purchasers dependably compared the price of past purchases and future purchases (Kotler, 2000). Price importantly affect consumer’s purchase decision. In gold jewelry, purchasers are price sensitive and like to bargain for discounts (Aiello, Donvito, Godney & Pederzoli, 2009).

Purchase decision

Dowling (1986) defined purchase decision as a selection of two or more options to complete purchases. Purchase decision is especially significant when there are numerous alternatives with similar function or capacity for the goods and services (Monroe, 2002). The purchasing decision made by the buyers depends on various motives and specific motivations. The stronger the customer’s motivation, the stronger the decision to purchase a specific product (Chang & Wang, 2011). Customers purchase goods that meet their expectations and motives. Purchase decision is influenced by trust (Alwi, Nguyen, Melewar, Loh & Liu, 2016) and product quality and price (Beneke, Flynn, Greig & Mukaiwa, 2013).

Buyers’ Preference

David (2018) defined buyer’s preference as the abstract tastes of individual shoppers, estimated by their fulfillment with those items after purchasing them. Buyer’s preferences affect whether people is willing to purchase a good. Solomon (2004) noted that people belong to a society or group and group influence becomes a significant external factor influencing the purchase decision of the consumers as consumers seek suggestions and information in regard to the products. In many situations, the purchase decision of the people is influenced by their family, friends and needs. Consumers use social information exchange so as to make purchase decisions and they required somebody to enable them to settle on choices (Hofstede, 2004). However, some European shoppers are progressively individualistic when they decide (Hofstede, 2004). Berad, Agarwal, Vaity, Khan, Bhujbal and Deshpande (2015) concluded that factors like design, price, purity, image, variety, display, service, promotion, family and friends influence the customer to purchase gold jewelry. Some people purchase gold jewelry on special occasions (Wang et al., 2012), as a gift for themselves (Ertimur, 2003) and as a gift for others due to social connection, image and friendship (Navarwan & Prattana, 2016).

Chapter 3: Conceptual Framework

3.1 Conceptual Framework

The framework using in this research is adopted from a theoretical framework from research on a study of factors influencing customers’ purchasing behaviors of gold ornaments (Navarwan & Prattana, 2016) to find the factors influencing the customers ‘purchase decision of gold jewelry. The investigated factors consist of buyer’s preference, product design, trust, expected future value and price discount. The hypothesis in this research are,

• H1 – Buyers’ Preference has a significant influence on customer’s purchase decision of gold jewelry.
• H2 – Self-Image has a significant influence on customer’s purchase decision of gold jewelry.
• H3 – Product Design has a significant influence on customer’s purchase decision of gold jewelry.
• H4 – Trust has a significant influence on customer’s purchase decision of gold jewelry.
• H5 – Expected future value has a significant influence on customer’s purchase decision of gold jewelry.
• H6 – Price Discount has a significant influence on customer’s purchase decision of gold jewelry.

3.2 Research Methodology

This research was conducted by performing the quantitative analysis of factors influencing the purchase decision of gold jewelry among people living in Myanmar through a survey method. The survey was achieved in a form of online questionnaires to collect all data required. The survey consisted of three parts such as screening questions, questionnaires on studied variables using a five-points Likert scale and demographic factors. The screening questions were asked in order to categorize respondents who are living in Myanmar and have plans to purchase gold jewelry. Five-point Liker scale, ranging from 1 as “strongly disagree” to 5 as “strongly agree”, was used to measure how much influence each variable has on the dependent variable. Demographic factors were assigned to gather respondent’s personal information such as gender, age, income, occupation. Non-probability sampling such as convenience and snowball sampling techniques are used for data collection. In analyzing data, multiple linear regression (MLR) was used to determine the significant influence each independent variable has on the dependent variable.

3.3 Measurement of variables

The target respondents are Myanmar citizens who have plans to purchase gold jewelry.

3.4 Population and Sample size

The target respondents for this study focus on the respondents living in Myanmar and have plans to purchase gold jewelry. Therefore, the researcher will determine the sample size of consumer who have plans to purchase gold jewelry in Myanmar that define the confidence level that is equal to 95 % and the level sampling error is equal to 5% as the formula of Cochran (1977).

Estimating sample size technique

n = Z2 4e2

Which:

n is the sample size

e is the level of precision = 0.05

Z is the statistic for a level of confidence Z = 1.96

Hence:

n = (1.96)2 4(0.05)2

n = 384.16 ≈ 400 This sample size requires at least 400 respondents with 95% confident level to represent 53 million Myanmar population size (Krejie and Morgan, 1970). Using convenience and snowball sampling method, online survey questionnaires are distributed to target respondents who live in Myanmar and have plans to purchase gold jewelry. The total number of respondents who participated in the survey were —— from various demographic background profile. After screening questions, there are only —– respondents who are qualified for continuing the questionnaires.

3.5 Reliability Test

To test the reliability and validity of the questionnaires, reliability test was performed using Cronbach’s Alpha Coefficient at the pilot stage when the number of respondents reached 30. Cronbach’s Alpha Coefficient is used to determine whether the questionnaires are reliable and the questionnaires of each variable are consistent with each other and valid when the Cronbach Alpha value is greater than 0.6 (Cronbach, 1951). With reference to table below, Cronbach Alpha value of each variable falls in the range between —— and ——, which is greater than 0.6 indicating that the questionnaires for this study meets the standard required for reliability test and is acceptable to proceed the research forward.

Table 1: Consistency of scales test (N=30)

Variables

No. of items

Cronbach’s Alpha

Self-Image

4

Product Design

4

Trust

3

Expected Future Value

3

Price Discount

3

Buyers’ Preference

6

Purchase Decision

5

Chapter 5: Questionnaires

Variables

Questionnaires

Strongly disagree

(1)

Disagree

(2)

Neutral

(3)

Agree

(4)

Strongly agree

(5)

Self-Image

I wear gold jewelry for adornment myself to look better.

Gold jewelry is for body adornment.

I buy gold jewelry for my status appearance.

I feel confident when I wear gold jewelry.

Product Design

I am willing to pay for the design of the gold jewelry I like.

I buy gold jewelry because I like the design.

Gold jewelry should represent current fashion.

Gold jewelry should be fashionable.

Trust

I purchase gold jewelry when I trust the gold jewelry retailer.

Salesperson can influence me to buy gold jewelry.

I buy gold jewelry most likely when there is a pleasant atmosphere in the store.

Expected future value

I buy gold jewelry because I believe their values will increase in the future.

Gold jewelry is a way of investment for me.

I buy gold jewelry because it can easily convert to money.

Price discount

I like to bargain for gold smith charges and discount.

I buy gold jewelry when I am satisfied with price discount

I buy gold jewelry whenever there is a price discount.

Buyers’ Preference

I buy similar gold jewelry design with my friend.

My friends’ opinions affect my gold jewelry purchase behavior.

I always ask my friend opinion before I buy gold jewelry.

I buy gold jewelry for special occasions.

I buy gold jewelry as a gift for others.

I buy gold jewelry as a gift for myself.

Purchase Decision

I feel good about my decision to purchase gold jewelry.

I will positively recommend other people to purchase gold jewelry.

I frequently purchase gold jewelry.

I intend to purchase gold jewelry again in the future.

I am satisfied whenever I purchase gold jewelry.

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