Consumption Behaviour of Students

Chapter One: Introduction

1.1. BACKGROUND OF THE STUDY

1.1.1 Consumption Behaviour Definition

If it is said that marketing in true sense is the conclusion of social culture of post modern consumer culture (Firat, 1993) then an immense burden and responsibility has been imposed to determine the conditions and meanings of life for the future (Firat and Venkatesh, 1993). This life which is dealing with meeting unlimited demands with limited resources in hand and planning to secure future by making savings. So keeping this in view the consumption by individuals is really critical to full fill the needs and to secure the future. So in view of this consumption is definitely a focal point of present social and economic world. And that consumption in return definitely triggers a primary marketing concern of probability to repurchase a product regardless of its type (Peter & Olson, 1990). Although consumption is as old as human history and has passed through plenty of phases but even in today’s world the repurchase of items is the core priority of sellers. No matter that repurchase is of basic necessity item or luxury product or whether it is matter of mobile connection or someone is talking about E-Banking or it is making flight reservation, every company tried its level best that a consumer should repeatedly purchase its product.

The definition of consumption given by Peter and Olson (1990) is “use of product.” Peter and Olson (1990) are also of the opinion that it is not easy to define or to comprehend the meaning of consumption as there is a vast difference in the nature of various products and services. Even in this age of Information Technology and Globalization era the meaning of product (includes both goods and services) varies from culture to culture and it keeps on changing from one country to another. If a commodity or service is considered as necessity in one region, in other part of the world it may be categorized as luxury. But despite all these limitations researchers and authors still gave some comprehensive and compact definition of consumption.

The idea of consumption defined by Webb (1993) in the following words

“Consumption is the evaluating, buying, using and disposing of products and services.”

But like other fields of study this topic also remained under debate by variety of scholars and researchers in all parts of the world. The word of consumption attracted the attention of researchers and marketers who kept on trying to comprehend the meanings of this idea of “consumption”. While reviewing books and literature another good and wide-range definition of consumption given by Caru and Cova (2007) in the following words

“Consumption is an activity that involves a production of meaning, as well as field of symbolic exchanges.”

The author elaborates this definition by mentioning that consumers do not consume products but they consume the image and meanings associated with the product and they think that it is mandatory that an object or services should fulfil certain functions. Those functions should meet and better to exceed customer’s expectation. If it failed to meet their anticipation then they will drop the idea of repurchase of that particular product or in case of services they will avoid to consume or avail that particular service.

Simultaneously it is also said that consumption behaviour also refers to single use of a product like a soft-drink can or one can consume a product repeatedly like mobile phone or automobile. This concept of consumption behaviour also covers the issue of disposing off a product ( (Noel, 2009). Like in case of soft drink can or other single used items a general trend emerged over a period of time is that customers prefer those products whose packaging is reusable or can be recycled. But in case of mobile, automobiles, computers customers often sell those products after making multiple use of it.

Consumption deals with the variety of question as it is mentioned by Schiffman and Kanuk (2007) like what to buy, when to buy, why to buy, from where to buy, how frequently they should buy, and the question of evaluation that purchase. Simultaneously the impact of evaluation on future purchase and disposing it off are also two important concerns of consumer.

1.1.2 Types of Consumption

Schifman and Kanuk (2007) also highlighted two different kinds of consuming entities which deal with the consumption behaviour. The first term is personal consumption which can be defined as when good or services are bought for personal use , for household consumption or to exchange it with someone in shape of a gift. In the mentioned contexts the products are brought for final use by individuals who are referred as end users or ultimate consumers. The second category of consumers is termed as organizational consumption. It includes purchases made by profit and non-profit businesses, government agencies, and institution, all of which must buy products, equipment and services in order to run their organizations.

Although both mentioned categories are of great importance but in this writing my main objective will be personal consumption. As consumption by end user is the most pervasive of all types of consumer behaviour as it involves every individual, of every age and background, in the role of either customer or user or both (Schifman and Kanuk 2007).

It has been revealed from prior consumer spending studies that individuals consume in a specific way and that particular consumption behaviour is in practice due to certain factors like life style, self-image, upbringing and family structure (Martin & Bush, 2000; Penman & McNeill, 2008). There are some other factors which influence the Consumption Behaviour of young consumers which are parents and grandparents (McNeal 1997), parent’s income (Page & Ridgway, 2001) and parent’s decision making style (Jay 2005; Elder, 1969). The mentioned factors highlighted the multi-dimensional role of parents. But the role of brands (Page & Ridgway, 2001; Doston & Hyatt, 2005; Bacca, 2005), consumer socialization (Razak 2003; Gil 2007; Gronhoj, 2007) and advertising (Bacca, 2005; Spero, 2004) may also not be neglected.

1.1.3. World Consumption Statistics

The word “consumption” is synonym to “spending” or “expenditure”. So using this synonym, in order to quantify the consumer consumption into US $ following table best explains consumption in different parts of the world. The mentioned figures are for the year 2009.

From the above table it can be easily inferred that consumers spend US $ 34,050 billion on mentioned below categories. This amount when converted in trillion it becomes almost US $ 34 trillion. This huge spending is almost 11 times more than USA total budget figure which was exactly 3.1 Trillions (http://www.whitehouse.govt, 2009). So this huge consumption creates my interest to study the factors which are reason of this huge spending.

From the above table it is evident that consumer consumption in Asia Pacific is at number 3. Such a high consumption is of great interest for not only academicians but also for marketers.

1.1.4. Malaysian Public university student’s Consumption Behaviour

According to Ministry of Higher Education website (accessed on 2011) there are total twenty public and twenty four private universities in Malaysia. The total enrolment according to MOHE (2007) in public universities is 382,997 Out of this total number 247,881 students which becomes almost 65% registered in undergraduate degree programs. It is consensus by Li, Jiang, An, Shen and Jin (2009) Komarraju, Karau and Ramayah (2007), Penman and McNeill (2008) and Feltham (1998) all are agreed that Young Consumers who are also called as Geberation Y are students. It is also agreed that young consumers fall within the age bracket of 18-24 years. As fas as Malaysia is concerned the total population of Malaysian Youngsters in 2007 was around 5 million which was almost 19% of total Malaysian population (Euromonitor International, 2010). Zainurin, Ahmed and Ghingold (2007) focus on the Malaysian young consumer’s attitude towards shopping malls. It is highlighted by the authors that Young Malaysians spent a significant proportion of their monthly expenditures in shopping malls. The sources of income highlighted by Zainurin et. al. (2007) are scholarship or study loan, sponsored by parents, self sponsored and others.

But Kamaruddin and Mokhlis (2003) mentioned that the major proportion of spending by young consumers is on clothes, make-up, food, sports equipment and entertainment. In the same article Kamaruddin and Mokhlis (2003) discussed young consumer’s consultation with parents and concluded that Chinese young consumers as compare to Malay are less likely to interact with their parents. But in case of Indians they are more likely to interact with their parents and less likely to interact with peers in consumption matters.

But it will be of great interest to find out that what is consumption behaviour of Malaysian young consumers. As it is mentioned in a report compiled by PricewaterhouseCoopers (2004/2005) Malaysian households spent their high percentage of income on food, groceries and personal care items. But less had been researched on consumption behaviour of young consumers in Malaysia.

The Malaysian young consumers is now well aware of products as they are more exposed to Information Technology. Their information due to frequent use of internet along various other factors like socialization, advertising, etc. establishes good awareness of marketing strategies among them. This trend of spending by Malaysian young consumer needs to be further explored.

1.2. Problem Statement

As it is mentioned earlier that according to Euromonitor International 2010 the Malaysian Generation Y is about 5 million in 2007. This is also evident from above discussion that Generation Y has more disposable income (Eisner, 2005; Hongjun, 2006; XU, 2007; Henrie & Taylor, 2009) to spend on variety of products. So keeping in view, the above mentioned facts Generation Y is a lucrative market for producers. Obviously their consumption behaviour is influenced by different factors and variables.

It should be interesting to explore the main contributors towards consumption behaviour of Malay Generation Y. The industry like electronics, telecom, consumer products etc. whether fulfil their requirements or do they still fail to meet this Malay Generation Y expectations. It is really of great concern to study that the consumer skills or knowledge which they acquire during their childhood and teenage whether lasts with them for long time or does it keeps on changing during their adulthood.

So through this study, I intend to highlight the factors and variables that influence the consumption behaviour of Malay Generation Y, which is relatively under-researched in Malaysia.

1.3. Study Objectives

The general objective of this research proposal is:

1. To identify general consumption behaviour of Malaysian public university students registered in undergraduate degree program. Whereas under the light of primary objective following are other objectives which will be achieved:
2. To explore differences in the consumption behaviour among the three communities Malay, Chinese and Indians.
3. To determine factors that influence consumption behaviour of Malaysian public university undergraduate students.
4. To prepare recommendation for developing marketing strategies for Malaysian public university students.

1.4. Research Questions

RQ. 1. What is the consumption behaviour of Malaysian public university students registered in undergraduate degree program?

RQ. 2. What are the differences in consumption behaviour among all three communities i.e. Malay, Chinese and Indians?

RQ. 3. How significant each factor in influencing consumption behaviour of Malaysian public university students?

RQ. 4. What are good recommendations to develop marketing strategies for Malaysian public university students?

1.5. Significance of the Study

It has been estimated by US Census Bureau (2010) that more than 17 % of total world population falls within the age bracket of 15-24 years. This age bracket is about 1.14 billion and it was mentioned by Xu (2007) that this age bracket is wealthiest group. As far as Malaysia is concerned, according to Euromonitor International (2010) the population among this age bracket was 5 million in 2007 which became almost 19% of total population. This age bracket normally are part of universities. It is mentioned by Walsh and Mitchell (2005) that education improves analytical skill so through this study I intend to study the students registered in variety of educational degrees from certification/diploma to PhD programs so that their consumption behaviour can be explored.

This particular group has more disposable income (Eisner, 2005; Hongjun, 2006; XU, 2007;Henrie & Taylor, 2009) as compare to the generation of parents and grandparents. Simultaneously they have less saving spirit as compare to Generation X. To study the consumption behaviour of Generation Y is of great interest as most of the Malaysian studies conducted in shopping malls and authors always studied the way this age group shop. In addition to this they are always studied by combining with teensor tweens. So through this study I will solely study consumption behaviour of Malaysian Generation Y.

1.5.1. Academic Perspective

So far lot of studies had been conducted about the behaviour and attitude of Malaysian consumers in shopping malls like grocery shopping by Miranda and Jegasothy, a study of Malaysian’s behaviour in shopping malls conducted by Zainurin et. al. (2007) etc. But I failed to find any study which is solely targeting Malaysian young consumers.

There are studies where main focus was exploring single variable like television viewing by Ghani (2004), culture studied in context of service quality by Kueh and Voon (2007), ethics in consumption studied by Chai and Lung (2009).

In the light of above mentioned facts the main focus of this study will be consumption behaviour of Malaysian young consumers. The study will be a food for thought for academicians which will further enhance the existing body of knowledge on the consumption behaviour of young Malaysian consumers. The significance of factors that influence consumption behaviour of young consumers definitely opens new horizons and helps the researchers to broaden the scope from studying attitudes of young consumers in shopping malls to the general consumption of Malaysian young consumers.

1.5.2. Industry Perspective

Young consumers are always a great mystery for producers of products. It is really challenging to fulfil their fast changing taste, needs and choices. This study will definitely give a more coherent and clear picture of the factors that influence young Malaysian consumer’s consumption behaviour. Through this study it will be explored that how Malaysian Generation Y undergo the four steps mentioned in the definition of consumption behaviour which are pre-purchase evaluation, finalizing and making purchase of product, using of product and disposing off product.

Through this study the consumption behaviour among three ethnic groups of Malaysia will be explored so that a clear and specific distinction of consumption behaviour among these three groups can be researched which will definitely useful for marketers for developing marketing strategies.