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WHAT KIND OF DISCOUNT OF ONLINE GPT PRODUCT WILL ATTRACT
TOURISTS TO CLICK IN?
Shao-Cheng Cheng
Graduate School of International Trade
Chinese Culture University
Pei-Yen Tsung
Graduate School of International Trade
Chinese Culture University
and
Hsueh-Ching Wang
Graduate School of International Trade
Chinese Culture University
ABSTRACT
Nowadays the competition between the agency websites and commercials are
getting hotter, how to attract tourists’ and browsers’ interest to click into a firm’s
website has been a tough theme. How can a discount catch people’s intention to click
in and to desire more about the travel products? In this study, we investigated how a
discount type and a discount depth will influence consumers to click into website and
to buy travel products. Results show that a discount depth can influence click-in
intention. Furthermore, the main influence is a corporate image. Research
implications and management implications are also discussed as below.
Key Words: discount type, discount depth, GPT (group package tour products)
INTRODUCTION
When the e-commence and cyber eras are coming, how people can get travel
information and where people can purchase travel products are becoming more
convenient and easy. As we know, the Internet using rates have been raising faster
than ever. Internet has become to a roll of a supplier who supply from daily consumer
goods to all kind of products to meet of everybody’s demand.
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Prior studies have indicated that most of travelers during this generation are
demand more information of travel services, products, and prices by internet. The
Internet serves have became as a communication and distribution channel for online
travel shopper and firms of travel services and products (Law, Leung, and Wong,
2004). One research from “ACNielsen Global Online Consumer Confidence Study
“ in 2005 found that over 86 million consumers made hotel and/or tour bookings and
Close to 135 million people made plane reservations in this world in 2005. The most
popular items purchased on the Internet are books (34%), airline tickets or room
reservations (21%) and clothing or shoes (20%).
With the important of the Internet, the process of fast information transmission
can be addressed effectively in a short time and make firms or tourists’ cost down. For
instance, travelers can receive timely, relevant and comprehensive discount price or
any other relevant information in a virtual place to assess if they want to know more
about this product (Law et al., 2004). It’s says travel industry is growing faster and
faster, also many firms have started to use website to contact or attract potential
customers via websites’ commercial advertisement , and even make business through
Internet.
Group Package Travel (GPT) is a very popular product in Asia; lots of Asian will
chose Internet to purchase GPT from travel agency websites. But it seems like a little
attention has been given to the influence of discount type and discount depth on
tourists choosing travel websites.
RESEARCH BACKGROUND
Numerous attempts have been made by scholars to show the impact of sale
promotion on retail industry (Dickson and Sawyer, 1990; Gendall, Hoek, Pope, and
Young, 2006; DelVecchio, Krishnan, and Smith, 2007). As we know discounts can
make people spend more and shop more on their one-way shopping trip. However the
prices of groceries are cheap and they can be always or often used in their daily life.
The average prices of online group package tour products are normally higher than
groceries; the using rate is less than our daily products (Kim, Lehto, and Morrison,
2007; Rao and Smith, 2006). As more people are buying products online and the
travel business is developing, the Internet has had a profound impact on all facets of
people’s shopping behavior and their life style, especially on shopping online (Caspar,
Chorus, Arentze, and Timmermans, 2007). The travel business no matter in Western
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countries or in Asia has been identified as a industry likely to be most influenced by
Internet from now and ever.
Previous research on retail industry has shown that monetary value of the sale
promotion (like discount depth and discount type) influences choice during the
promotion period in the grocery store on daily or durable products (Kalwani and Yim,
1992; Raju and Hastak, 1983; Shoemaker, 1979). According to the product
characteristics, a sales manager may need many different discount framings to win the
consumer’s awareness on price. When the percentage discount type with the deepen
discount depth, first it can get customers’ attention, furthermore it can stimulate and
increase consumer’s willing to buy; On the contrary, it may cause risk of quality
decreasing that the consumers refuse to purchase (Chen, Monroe, and Lou 1998;
Gendall et al., 2006; Heath, Chatterjee, and France, 1995; DelVecchio et al., 2007).
How on-line discount types and on-line discount depths can get people to click in,
browse, and know more about product information, when travel agents offer special
discounts for their group package tour products?
RESEARCH HYPOTHESIS
According to the pass research in retail industry, the firm used to transport price
promotion message by labeled price or a tag promotion messages, offering the
different discount type and discount depth to lure consumers’ response and to make
companies’ economic benefit in the store (Folkes and Wheat, 1995).From now,
searching for the best price discount is the online shopper’s main motivation to
browse websites (Korgaonkar and Wolin, 1999). The prospect theory of Kahneman
and Tversky (1979) can explain when consumer deal with discount information, they
would editing and evaluation by themselves to confirm this choose is gain or loss then
effect their perception of this message.
Today, searching for the best price discount profit is the motivation of online
shoppers browse websites (Korgaonkar and Wolin, 1999). The prospect theory of
Kahneman and Tversky (1979) can explain when a consumer deal with discount
information, they would editing and evaluate by themselves to confirm this choose is
gain or loss then effect their perception of this message.
Gendall et al. (2006) concerned that discount framing by cash-off or
percentage-off between the different kind of goods and brands can make a different
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purchase effecting. For example, percentage-off can be used in bread or cake which
belong to stock-up categories; cash-off can be used in cans which belong to
non-stock-up categories. For dairy products, consumers are like the deeper discount is,
the higher purchase intention will be. It can bring out a positive effect. However, it
also can bring a negative effect like increasing perceived risk, decreasing brand value.
At the end the negative effects can damage the reputation and customers refuse to
purchase from online. (Drozdenko and Jensen, 2005; Harlam et al., 1995; Monroe,
1990).
When these discount information explored in websites, a deep discount depth
may attract website browsers to click into this discounting advertisement. The
exploring of advertising in discount depth and price cuts is just having positive effect
to consumer’s perception and purchase intention (Gupta and Cooper, 1992). Before
they decide to buy it, they may have the click intention to this advertisement to know
more about the product information.
In tourism research, the effectiveness of travel advertisements has focused on the
extent of a promotional campaign which stimulates tourists visit some particular
destinations (Kim, Hwang, and Fesenmaier, 2005). As we know the GPT product are
most including accommodations, meal, transportation, and sightseeing. This is a
popular travel type in Asia. But most of GPT product or traveling are unexpected and
intangiblable. Therefore, pricing and display information on the website are very
important when internet browsers surf on websites to searching for discount messages
(Rao and Smith, 2006).
According to the researcher of website browser perception, Singh, Dalal, and
Spears (2005) thought the internet surfers need the information to be introduced by it
not by internet surfers themselves. It seems they care about website designs and
construct. Actually they don’t care much about the website design and features.
Because consumers need the benefits coming from the product itself (Haley,
1968).Consequently, this study proposes two hypotheses as follows:
Hypothesis 1: for GPT advertisements, percentage-off as the main discount type can
attract more internet users to click in than cash off.
Hypothesis 2: for GPT advertisements, a higher discount depth would have a better
click-in intention than low.
RESEARCH DESIGN
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Our study examined the discount messages on travel websites by Experimental
Design to control two types and two depth levels: cash and percentage, low and high.
We also consider the corporate image may influence the subject’s perception, thus we
used a well-know and an unknown travel agency in our design. There are four
different experiment grids to show different types of discounts in this research.
Assumed they are visiting the agency’s website and viewing discounting information.
After the respondents read the contents of some travel products and discounts, we
asked them to answer the click intention. We designed 7-point scale from “Strongly
agree” and “Strongly disagree” to be selected and to show how the respondents feel in
each question after they received those information.
The interview was taken place from January to February, 2009. The participants
in this study were at the age of 18-25 years old, undergraduate and graduate students
in the north of Taiwan, enrolled in the course of marketing of the Chinese Culture
University. We divided them into eight groups, and each group had 80 students. They
were assigned to fill in the questionnaires according to how they felt about the
discount advertising. 640 questionnaires were distributed, 570 were returned, and
totally 495 valid questionnaires were collected.
Our study examined the discount messages on travel websites by Experimental
Design to control two types: cash and percentage and two depths level: low and high.
We also consider the corporate image may affect the subject’s perception, thus we use
a well-know and an unknown travel agency in our design. There are four different
experiment grids to show different type of discounts in this research. Assumed they
are visiting the agency’s website and viewing discounting information. After the
respondents read the content of the travel product and discounts, asking them to
answer the click intention. We use 7-point scale from “Strongly agree” and “Strongly
disagree” to be selected how the respondents feel in each question after they read
different discounts.
The participants in this study were at the age of 18-25 undergraduate and
graduate students in the north of Taiwan enrolled in the course of marketing of the
Chinese Culture University in the period January to February 2009. We divided them
into eight groups, and each group had 80 students. They were assigned to fill in the
questionnaires according to how they felt about the discount advertising. 640
questionnaires were distributed, 570 were returned, and totally 495 valid
questionnaires were collected.
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FINDINGS
This research aimed at the perceptions toward traveling website discount. The
respondents were the undergraduate and graduate students in the marketing class in
Taiwan of Chinese Culture University. A total of 640 questionnaires were released,
570 were returned and 495 valid copies were collected with overall response rate at
86.84%.The percentages of male and female respondents are respectively 50.71% and
49.29%. In terms of age distribution of the age range 20 and below is 30.10% and 21
to 30 is 69.90%.The education degree, over to 93.13% of the respondents have
received undergraduate degrees. Experience of going abroad is 65.66% (Table 1).
Table 1
Demographic characteristics
Variable
Category
Gender
Male
215
50.71
Female
244
49.29
20 and below
149
30.10
21-30
346
69.90
Professional school
3
0.61
University or College
461
93.13
Graduate school and above
31
6.26
Go abroad
experience
None
170
34.34
Yes
325
65.66
How many
times go
abroad
None
170
34.34
1-3 number of times
194
39.19
4-6 number of times
80
16.16
7-9 number of times
21
4.24
More than 10
30
6.06
How many
None
277
55.96
times go
abroad by
GPT
1-3 number of times
193
38.99
4-6 number of times
18
3.64
7-9 number of times
2
0.40
More than 10
5
1.01
Age
Education
Number Percentage
The main point of this study is to examine the influence of discount type and
discount depth on click intention, the statistics result is as follows:
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Table 2
Descriptive Statistics
Discount type
IV/DV
Cash off
Percentage off
4.68
4.73
Click intention
Discount depth
IV/DV
Click intention
High
Low
4.82
4.51
Table 2 reveals that percentage off has higher preference to cash off under the
dimensions of click intention (4.73; 4.68), and that high discount depth has better
preference to low discount depth of click intention (4.82; 4.51). Furthermore we can
learn from the descriptive statistics, discount type preference under the dimensions of
click intention is much closed. Moreover, T-test is conducted to check whether the
differences achieve the significant. The result is shown in table 3.
Table 3
T-test
IV
Discount type
Discount
depth
Dependent
variables
Click
intention
T-value
d.f
-0.36
2.46
493
Significant
level
(two-tale)
Mean
difference
Standard
error
0.720
-0.046
0.128
0.014*
0.335
0.135
Table 3 reveals that discount type in percentage off or cash off is not significant
in this study, the T-value is -0.36, and significant level is P=0.720 > 0.05. Discount
depth T-value is 2.46, significant level is P=0.014 < 0.05, it means discount depth can
affect the click intention.
RESULT
Table 4 is the result of this study’s hypotheses. Through the statistics methods in
this research we found that discount type can’t attract or increase click intention since
the difference between discount types is not achieved the significant level (t=-0.36;
P=0.720). It represented that the discount type is not the effective factor to attract
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consumers’ intention on the agency’s website’s promotion for GPT. We also found
that discount depth can attract click intention in the website’s advertising since the
difference between discount depths is achieved the significant level (t=2.46; P=0.014).
It means the deeper discount depth is, the higher click intention to the GPT products
will be. This result represented that the higher discount depth can increase the
purchase intention, because consumers want more price cut or benefit from the
website’s promotion. Also, they need stimulation of lower price when they see the
advertising on website, before consumers have intention to buy products online.
Table 4
The result of hypotheses
hypotheses
H1
H2
contents
for GPT advertisements, percentage off as the main discount
type can attract more internet users to click than cash off.
for GPT advertisements, a higher discount depth would have a
better click intention than low.
results
Reject
supported
CONCLUSIONS
The results from the analysis first have showed that deeper discount depth can
increase the click intention and attract more people to search other products on the
website. Because searching for the best price is what the online shoppers most wants
and they will pay more attention and spend more time to make a right decision
(Korgaonkar and Wolin, 1999). Sales promotion advertisements delivered by Internet
aimed to address different effective and cognitive processes, and therefore difference
of consumes price perception (Kim et al., 2007).
Secondly, tourist behavior patterns have changed in this century. Most of online
shoppers may not know their precise attributes in terms of travel times, cost and
destination. But they display low levels of loyalty to any website and appear to be
motivated by the search for better price/offer (Stockdale, 2006). That may represent
why the discount type wouldn’t make any effect to the click intention in this time.
However deeper discount depth can increase the intention of internet surfers to know
more about GPT products and to stimulate their willing to browse the agency’s
website then attract them to buy the products by the price or promotion.
FUTURE RESEARCH
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In this study, we focused on the click intention and how consumers feel about
discount of a GPT Product. In order to proceed our investigation, we have interviewed
many students from Chinese Culture University in Taiwan. Hereby I would like to
thank them for their best support and great help. In our further research we may take
different samples of consumers to discuss different issue. Such like company
employers, retired people or pensioners who are traveling by GPT to abroad. The
theme will be related to the effect of AD attitude, loyalty and bargains behavior. We
will keep focusing on the travel website or extend to the auction online. I am sure it
will be an attractive theme and excited study.
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