Factors affecting Consumer's Decision to Purchase Digital Marketing Services at GCO company
Ho Tan Tuyen1,2*, Le Thi Khanh Ly3,2, Nguyen Mau Duy Lam3,2
1Faculty of Business Administration, Duy Tan University, Da Nang 550000, Vietnam.
2Institute of Research and Development, Duy Tan University, Da Nang 550000, Vietnam.
3International School, Duy Tan University, Da Nang 550000, Vietnam.
*Corresponding Author E-mail: letkhanhly@dtu.edu.vn
ABSTRACT:
This study determines the factors affecting consumer’s decision to purchase digital marketing service at GCO company. The thesis uses qualitative research methods (group discussion) and quantitative research methods. The research shows that there are three positive impact on client’s decision to purchase digital marketing service. Specifically, “Price” has the most positive effect, followed by “Staff quality”, and the least influential factor is “Reputation”.
KEYWORDS: Consumer's Decision, Purchase, Digital Marketing Services.
INTRODUCTION:
Realizing the development of technology along with the explosion of Internet users in Vietnam, businesses began to pay attention to Digital marketing to attract, reach more clients and increase brand awareness of me. Forms of online sales, sales through social networking sites, e-commerce floors, ... are increasing day by day. However, it is not easy to implement marketing campaigns on digital platforms, requiring human resources in charge of communication to have high professional skills and technical skills. An effective solution that businesses can choose is to use Digital marketing services provided by agency companies (advertising media service companies providing advertising marketing services to other companies).
The research results will help GCO Company to better understand the level of factors that affect clients' decisions to purchase Digital marketing services, from which the company will grasp psychology, behavior of our clients to advise clients more effectively, and at the same time will get the direction to develop their services.
LITERATURE REVIEW:
Digital Marketing:
Philip Kotler et al. (2011)1 argued that Digital marketing is the process of product planning, pricing, distribution and promotion of products, services and ideas to meet the needs of organizations and individuals. based on electronic means and the Internet. According to Neeti (2020)2, Technological advancement enables marketers to reach, interact and engage with customers directly no matter where they are and what they are doing. In a more modern approach, Chaffey et al. (2019)3, digital marketing is the management and implementation of marketing activities using electronic means such as website, email, iTV, wireless media combined with digital data about customer characteristics and behavior. Digital marketing is the more convenient way for companies to convey its messages to customers more efficiently and effectively (Ravikumar et al. 2018)4
Thus, it can be understood that Digital marketing involves all the relationships between marketing activities with digital media. Today, with the strong development of technology and the Internet, online marketing or Internet marketing is a trend for businesses and organizations to access and exploit a huge number of Internet users.
Consumer behavior:
According to Bennet et al. (1988)5, consumer behavior is “the behaviors that consumers demonstrate in finding, buying, using, and evaluating products and services that they expect to satisfy their needs. their individual needs”. Lamb et al. (2011)6 argued that consumer behavior is "a process that describes how consumers make decisions about choosing and rejecting a product or service". Naderian et al. (2015)7 showed that corporate social responsibility as new concept involves many firms and industries which can take advantage of corporate social responsibility and make better view of their organization. As a result, being socially responsible as a firm can lead to keep more customers satisfy and loyal. According Sharma (2017)8, when then customers have the positive attitude towards the banking service, they will be satisfied and when they recommend the same baking channel to others, loyalty can be generated. The all pervasive factor of change characterized basically by forces of external market brought alterations in the ways and means of treatment of the new empowered king. The customers now exercise their power and question each and every offering of the sellers and choose only those products and services which are best suited to their need (Jha et al. 2016)9. Rapid advances in information and communication technologies provide greater opportunities for the companies to establish nurture and sustain long-term relationships with their customers than before and customer relationship management practices and their expected advantages like customer satisfaction, customer loyalty, repurchases and positive references are required to be studied further (Lalitha et al. 2010)10. Joseph (2011)11 argued that now it is very difficult to find customers, serve them and retain them, the insurance companies have now stated using technology to engage customers and satisfy them.
In summary, consumer behavior can be understood as a set of actions and reactions that consumers express in the process of making a decision to buy a product or service.
Previous Studies on Factors Affecting Consumer's Decision to Purchase Services:
The problem of Consumer's decision has also been studied by many scholars around the world.
Hasan et al. (2020)13 showed that the reason of the consumer behaviour, while purchasing the smart phone. The various factor, the customer see or search in any particular smart phone before purchasing it. Total 21 items or features of smart phone was identified the customer prefer, while he/she purchases the smart phone. The most important and least important factor have been figure out in the study. As the product mobile in the earlier time was used for only means of communication apart from it, there was no use of mobile phone had been carried out, but in the present time in which we all are using modern technologies and start multiple use of mobile i.e, for communication, as camera, for e-mail, video calling, as a mini computer etc.
Research of Ha (2020)14 on factors affecting the decision to use accounting services of small and medium-sized enterprises through a survey of 360 employees and business leaders in Dong Nai province. The results show that the study has identified a 27-scale sytem of 6 factors affecting the use of accounting services of SMEs in the province in the following order: (1) Service quality, (2) Price, (3) Reputation, (4) Staff quality, (5) Facility, (6) SMEs Characteristics.
Kanthe (2010)15 indicated that fun shoppers tend to be more tolerant of price, this study finds indications that low cost shoppers are more tolerant of price. They seem to accept high prices in exchange for the convenience of shopping for all their purchases under the same roof and thus save on shopping time. Safe and effective shoppers enjoy hunting for bargains and see it as part of the shopping experience.
Deshmukh et al. (2012)16 concluded that no doubt there exist social class differences in purchase, but the difference exist across cities which needs to be taken care by the marketers in order to market their products and services In order to increase the sale of high involvement products the marketers need to use appropriate marketing mix with respect to product, price, promotion, distribution, people etc., so that it fits with their needs and desires and motivate them to take their purchase decisions.
Consumer's decision to purchase services have been mentioned in previous studies, which have made a positive contribution to finding out the factor effecting Consumer's decision to purchase services. However, these studies did not define the classification of Consumer's decision to digital marketing purchase services.
RESEARCH MODEL AND HYPOTHESES:
Based on the researches of a conceptual model was developed which consisted of the determinants of Consumer's decision to digital marketing purchase services, the hypotheses are proposed:
Hypothesis H1: Reputation has a positive impact on Decision to purchase Digital marketing services.
Hypothesis H2: Price has a positive impact on Decision to purchase Digital marketing services.
Hypothesis H3: Reference has a positive impact on Decision to purchase Digital marketing services.
Hypothesis H4: Service quality has a positive impact on Decision to purchase Digital marketing services.
Hypothesis H5: Staff quality has a positive impact on Decision to purchase Digital marketing services.
Figure 1: The study’s Proposed Theoretical Framework
RESEARCH METHODOLOGY:
The research was carried out through 2 phases: Preliminary research and formal research. The preliminary research was carried out by group discussion with 10 people working in different departments at GCO company, including the customer service department, sales department and public relations departments to explore the factors that influence the Decision to purchase digital marketing. Based on combining with observed variables in previous studies on Decision to purchase digital marketing that the author has synthesized, proceed to build a draft scale, based on a draft scale, the author conducts a discussion with a group of staff to discover additional new variables and remove the ones that do not agree, and unify the composition of the preliminary scale. In the quantitative research phase, the survey questionnaire method is used with a valid number of observations of 250. The quantitative analysis methods that will be used for the data analysis part include:
Testing the reliability of the scale by Cronbach's Alpha: This test reflects the degree of correlation between the observed variables in the same factor. The standard to test the reliability of the scale is that the measurement variables have the total correlation coefficient of Corrected Item - Total Correlation ≥ 0.3, then the variable meets the requirements.
Exploratory Factor Analysis (EFA): This method helps to evaluate two important types of values of the scale: convergent value and discriminant value. The condition for exploratory factor analysis is to satisfy the following requirements: Factor loading > 0,5; KMO (Kaiser-Meyer-Olkin) in the range 0,5 ≤ KMO ≤ 1, Bartlett test has statistical significance (Sig. < 0,05).
Confirmatory factor analysis (CFA): is one of the techniques that allow testing how well the measured variables represent the factors. The CFA method is used to confirm the univariate, multivariate, convergent, and discriminant validity of the factor scale.
Multiple Regression Analysis: Multiple regression analysis is a statistical technique that used to analyze the relationship between the dependent variable and multiple independent variables, in which more than one independent variable is assumed to affect the dependent variable. In this multiple regression analysis, multiple independent variables of the study will be entered into the same types of regressions equation. A separate regression of each variable will calculated to define the relationship with the dependent variable. The relationship that occurs between each dependent variable and independent variable is linear. All the variables of the questionnaire are measured by likert scales. Multiple regressions will be calculated using the proposed formula to study the relationship between the independent variables and dependent variables..
RESULTS:
Testing The Reliability of Scale by Cronbach's Alpha:
After testing Cronbach's Alpha for 5 independent variables and 1 dependent variable in the research model (Table 1), all factors have Cronbach's Alpha coefficients that meet the requirements (>0,5) and no observed variables were excluded. The results of testing the reliability of the scale are summarized in Table 1. After testing the reliability coefficient of Cronbach's Alpha, all observed variables meet the requirements for EFA analysis.
Table 1: Cronbach's Alpha test results
|
Concept |
Factor |
Number of observed variables |
Reliability |
|
|
Reputation |
4 |
0.787 |
|
|
Price |
4 |
0.850 |
|
Reference |
4 |
0.800 |
|
|
Service quality |
4 |
0.735 |
|
|
Staff quality |
4 |
0.770 |
|
|
Decision to purchase Digital marketing |
|
3 |
0.812 |
Source: Processing results from survey data, 2021
Exploratory factor analysis (EFA):
The results of EFA analysis are shown in Table 2 with the KMO coefficient = 0.698; the Bartlett test value is significant (Sig < 0.05), all observed variables have factor loading coefficients greater than 0.5 so no variables are excluded.
Table 2: EFA results of the scale
|
Items |
Factors |
|||||
|
1 |
2 |
3 |
4 |
5 |
6 |
|
|
PR3 |
0.836 |
|
|
|
|
|
|
PR4 |
0.819 |
|
|
|
|
|
|
PR1 |
0.797 |
|
|
|
|
|
|
PR2 |
0.784 |
|
|
|
|
|
|
REF 2 |
|
0.869 |
|
|
|
|
|
REF1 |
|
0.808 |
|
|
|
|
|
REF4 |
|
0.710 |
|
|
|
|
|
REF3 |
|
0.704 |
|
|
|
|
|
REP1 |
|
|
0.804 |
|
|
|
|
REP2 |
|
|
0.757 |
|
|
|
|
REP4 |
|
|
0.712 |
|
|
|
|
REP3 |
|
|
0.632 |
|
|
|
|
STA1 |
|
|
|
0.790 |
|
|
|
STA3 |
|
|
|
0.766 |
|
|
|
STA4 |
|
|
|
0.714 |
|
|
|
STA2 |
|
|
|
0.698 |
|
|
|
SQ1 |
|
|
|
|
0.813 |
|
|
SQ4 |
|
|
|
|
0.748 |
|
|
SQ2 |
|
|
|
|
0.685 |
|
|
SQ3 |
|
|
|
|
0.623 |
|
|
STA3 |
|
|
|
|
|
0.742 |
|
STA2 |
|
|
|
|
|
0.887 |
|
STA1 |
|
|
|
|
|
0.854 |
Source: Processing results from survey data, 2021
Testing the correlation coefficient (R value):
The Multiple Regression Analysis is used to determine the significant relationships between independent variables and dependent variable.
Table 3: Model Summary
|
Model |
R |
R Square |
Adjusted R Square |
Std. Error of the Estimate |
Durbin- Watson |
|
1 |
0.720a |
0.518 b |
0.508 |
0.48650 |
1.927 |
Source: Processing results from survey data, 2021
Based on the Model Summary Table 3, the correlation coefficient (R value) for this research is 0.720. This means that the dependent variable strong positively affects independent variable because R value is positive value and 0.720 is fall under coefficient range ±0.71 to ±1.
Testing the ANOVA
Table 4: ANOVA
|
Sum of Squares |
Df |
Mean Square |
F |
Sig. |
||
|
1 |
Regression |
62.127 |
5 |
12.425 |
52.497 |
0.000b |
|
|
Residual |
57.751 |
244 |
0.237 |
|
|
|
|
Total |
119.878 |
249 |
|
|
|
Source: Processing results from survey data, 2021
In the Anova table 4, it shows that the F value of 52.497 greater than 5 and the p-value is 0.00 which is less than 0.05 (p< 0.05) so significant at the 0.05 level. The significance value was-is less than 0.05, an indication that the model was-is significant. In overall the regression model with those five independent variables is suitable for explaining the variation in Decision to purchase digital marketing.
Develop regression equation with standardized coefficients:
The standardized coefficients predict the influence level of independent variables on Decision to purchase digital marketing in GCO company. We can be determined by the following regression equation with standardized coefficients as below:
Y = 0.412*PR + 0.287*STA + 0.186*REP
Or:
Decision to purchase digital marketing = 0.412 Price + 0.287 Staff quality + 0.186 Reputation
DISCUSSION:
The research model is designed to study the factors affecting consumer's decision to purchase digital marketing services at GCO company. The proposed model includes 1 dependent variable and 5 independent variables including: Reputation, Price, Reference, Service quality and Staff quality. Based on theories and qualitative research results, the scale of 5 independent variables and 1 dependent variable is built with 20 observed variables. Data were collected from 250 survey forms analyzed using SPSS 20 software. Testing the reliability of Cronbach's Alpha scale is done with the results that all observed variables are satisfactory. Next, we performed an analysis of the discovery factor of EFA and the results obtained was that there was no type of variable, the adjusted model consisted of 1 dependent variable and 5 independent variables as initially. Based on the standardized Beta coefficients, the factor that has the strongest impact Consumer's decision to purchase digital marketing services is price (0.412). The factors that have a decreasing impact are: Staff quanlity (0.287) and Reputation (0.186).
Price is always a matter of the client in general when deciding to purchase a service. In the difficult economic context caused by the COVID-19 pandemic, many businesses have to tighten costs, price becomes the top factor to consider when making decisions to purchase Digital marketing services of businesses. For Digital marketing agencies, the staff is the face of the company, especially with the position of account executives. Account executives are the bridge between clients and the company, they will call clients or meet in person to receive information and advise clients on reasonable solutions, directing them to the right service. with their situation. Excellent account executives will bring in many clients and great sales for the company. So this is the position that the company needs to focus on improving quality. Finally, Building reputation is a long process with constant endeavor. With 10 years of experience, GCO GROUP has a foothold in the industry with the slogan "Trust for bussiness", the company always emphasizes the client’s experience, becomes where clients can trust. However, the reality is that the reputation of a big brand can still be seriously affected by a small mistake. Therefore, GCO always has to maintain the brand image, further improve the trust of clients.
REFERENCES:
1. Kotler, P. (2011). Re-inventing marketing to manage the environmental imperative, forthcoming. Journal of Marketing, 75(July)
2. Gupta, N. (2020). Digital marketing: Trends, opportunities, and challenges. Asian Journal of Management, 11(4), 434-440. Doi: 10.5958/2321-5763.2020.00066.9
3. Chaffey, D., and Ellis-Chadwick, F. (2019). Digital Marketing: Strategy, Implementation and Practice. Pearson uk.
4. Ravikumar, J. S., Ghouse, S. M., and Reddy, T. N. (2018). A Study on Effectiveness of Google Virtual Tour on Business Promotions. Asian Journal of Management, 9(1), 548-554. Doi: 10.5958/2321-5763.2018.00086.0
5. Bennett, P. D., Lamm, R. P., and Fry, R. A. (1988). Marketing (pp. 630-640). New York: McGraw-Hill.
6. Lamb, C. W., Hair, J. F., and McDaniel, C. (2011). Essentials of marketing. Cengage Learning.
7. Naderian, A., and Baharun, R. (2015). Corporate Social Responsibility and Consumer Behavior. Asian Journal of Management. DOI: 10.5958/2321-5763.2015.00036.0
8. Sharma, R. L. (2017). The Study of Customer Behaviour and Its Impact on Customer Satisfaction, Loyalty and Service Quality Perception in E-Banking Services in Jammu Division. Asian Journal of Management, 8(2), 241-245. DOI: 10.5958/2321-5763.2017.00037.3
9. Jha, A. K., Deshmukh, G. K., and Joseph, S. (2016). Customers Intention to Switch towards Mobile Number Portability in Chhattisgarh–A Study. Asian Journal of Management, 7(3), 213-218. DOI: 10.5958/2321-5763.2016.00032.9
10. Lalitha, S., and Prasad, V. M. (2010). A Study of CRM Practices and Customer Satisfaction in Telecom Sector. Asian Journal of Management, 1(2), 47-54.
11. Joseph, S. (2011). Customer Engagement Practices of Insurance Companies: A Study in Raipur City. Asian Journal of Management, 2(3), 138-140.
12. Kumar, N. S. (2015). An empirical study on the influence of independent marketing variables on the purchasing decision of selected personal care products. Asian Journal of Management, 6(2), 128-134. DOI: 10.5958/2321-5763.2015.00019.0
13. Hasan, R., and Verma, P. (2020). A Study of Factors Influencing Consumer’s Behaviour Towards Purchasing a Smart Phone in Raipur City. International Journal of Advances in Social Sciences, 8(3), 87-95. DOI: 10.5958/2454-2679.2020.00008.0
14. Le Vu Ha (2020). Nghiên cứu các yếu tố tác động đến quyết định sử dụng dịch vụ kế toán của doanh nghiệp nhỏ và vừa tỉnh Đồng Nai. Tạp chí Kế toán and Kiểm toán (4), 84-89.
15. Kanthe, R. (2010). Consumer Buying Behavior and Non-Prescriptive Drugs Shopping in Sangli. Asian Journal of Management, 1(2), 55-60.
16. G. K. Deshmukh, R. P. Das. (2012). Consumer Buying Behaviour for High Involvement Products -A Study. Asian J. Management 3(3): July-Sept., 2012 page 153-157
Received on 14.03.2022 Modified on 28.04.2022
Accepted on 26.06.2022 ©AandV Publications All right reserved
Asian Journal of Management. 2022;13(3):181-185.
DOI: 10.52711/2321-5763.2022.00033