rm final thesis

7/30/2019 Rm Final Thesis

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Abstract

The aim of this study is to determine the impact of Experts,

experienced and impartial recommenders effect on sale of skin

care product by word mouth recommendation.The population of

study includes students and staff of Iqra University and

friends and colleagues in our nearest surroundings. A sample

size of 150 consumers was taken randomly through simple

sampling method. The data of study is acquired via

questionnaire, interviews, and published material on subject

study.A Generalized Regression model is used to find out the

results. The model is estimated for the 2011 only. Hypothesis

was upheld as sale of skin care products significantly depend

on recommendations of study variables. Finally, study made few

recommendations and suggested needed research.


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Introduction

Background

Today the world is a consumer driven world. The vast amount of

information obtainable today has made considerable changes and

variations in balance linking companies and consumers. Since

the consumers have become over full, they are now more

doubtful about typical marketing and advertising of companies

and do not completely rely in companies say or write about

their products. This power shift shows that how consumers

these days are making any buying decisions about any product.

The main emphasis in marketing has shifted from captivating

new customers to the retention of current ones. For this

retention purpose it is necessary for the companies to create

awareness in the consumer mind and the best way to get it done

is by means of effective advertising that have an influence inthe mind of the consumer and affects the decision making

during buying behavior process.The globalization of saturation

of markets, competition and growth of information technology

have improved customer awareness and formed a situation where

long-term sensation is no longer achieved by means of

optimized product qualities and price. Instead, companies

build their achievement on a long-term retention of customer

relationship. Hence, the raise and retention of loyal

customers has turn out to be a key success factor for long-

term achievement of the companies (Nedungadi, 1990).

A consumer is defined as a rational thinker and intelligent

individual who evaluates and stores sensory stimuli to make a

logical decision. For example, customers tend to or in mainly

cases try to evaluate and analyze the motivation according totheir ability, and then they accumulate the information either


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for an immediate decision or future evaluation. The extent to

which customers analyze and evaluate stimuli depends on their

strength of involvement with the stimuli and how greatly

information they are able to regain. Information is

consequently stored in remembrance and then recalled with

other comparable episodes. The inevitable reaction is then

developed by the customer to a particular stimuli or situation

depending on the affair termed as consumer behaviour. It is

also eminent that a consumer is able to produce a deeds based

on a set of action or set of different activities, such as

those concerning multiple information processing and just a

simple product evaluation (Biehal and Chakravarti, 2006).

Word of mouth is an indication to the transient of information

commencing person to person. The term referred exclusively to

oral communication but now comprises any form of human

communication like telephone, email, face-to-face and text

messaging. Word of mouth is the unpaid spread of a marketing

message and it can take place using the human voice or else

can be transmitted by means of any communicative way for

instance through the internet or text message. Word of mouth

is considered as a powerful promotional tool and considered as

part of nearly every business marketing strategy.

Objective:

The objective of study is to know the impact of expert,

experienced and impartial users recommendation (i.e word of

mouth) on sale of skin care products.

Importance:

The importance of study can be well measured by the results

obtained so far. As the results are significant, as sale of

the skin products significantly depend on word of mouth

(recommendations) of variables under study.


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METHODOLOGY

To test the hypothesis that sale of skin care products dependon recommendation of expert, experienced and impartial users

recommendations by word of mouth. The population / scope of

study are recommendation of expert, experienced and impartial

users of skin care products in Iqra University and in its

surrounding. A sample of size 150 taken at random from

students of Iqra university, or consumers that we know as

friends or colleagues in our nearest surrounding. The sale of

skin care products under study is amount in 1000s. Whereas

recommendation of expert, experienced and impartial users is

taken as yes or no. Yes, being recommend and no being do

not recommends. A generalized regression Model is framed to

test the model.

Hypothesis:

H1: There is a positive effect of experts recommendation on

consumer acceptance the sale of skin care product by word of

recommendation.

H2:There is a positive effect of experts recommendation onconsumer acceptance the sale of skin care product by word of

recommendation.

H3:The Impartiality of recommender has positive effect on

consumer acceptance of skin care product by word of mouth.

Data collection:

The primary sources includes questionnaire and secondary

resource includes past research, journals, internet and books.

A sample of size 150 taken at random from students of Iqra

university, or consumers that we know as friends or colleagues

in our nearest surrounding. The sale of skin care products

under study is amount in 1000s. Whereas recommendation of

expert, experienced and impartial users is taken as yes or no.

Yes, being recommend and no being do not recommends. A

generalized regression Model is framed to test the model.


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Variables.

Variables Name Units Co-efficient

Sale SCP Sale of Skin Care ProductRs. Thousand

Intercept Constant

REXPRT Experts Recommendation 0/1 1

REXPRD Experiends Recommendation 0/1 2

RIMPUSR Impartial Users Recommendation 0/1 3

The causal relationship is as follow:

Y = f(X1, X2, X3)

Y (Sale SCP) = f (REXPRT, REXPRD, RIMPUSR)

The Regression equation

Sale SCP = + 1 (REXPRT) +2 (REXPRD)+3 (RIMPUSR)+ . (a)

Equation a) elaborates the relationship between sale of skin care products and factors that causes it.

This shows that sale of skin care products is caused by Expert, Experienced and impartial usersrecommendations. The values of Beta being the coefficient of predictors and are error term to

capture the other independent variables.

Empirical Findings

SPSS results are as follow:


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Dependent Variable : Sale SCP

Independent Variables: REXPRT, REXPRD, RIMPUSR.

Method : Generalized Regression Model.

Included Observation : 150

Levene's Test of Equality of Error Variancesa

Dependent Variable:salescp

F df1 df2 Sig.

11.281 8 141 .000

The overall model is fit. As result of Levens Test

is significant. Which indicate the predictors are

better predicting the variation in dependent

variable.

Variable Coefficient

4.982

REXPRT- .982 (0), 0 (1)

REXPRD -.92 (0), 2.85 (1)

RIMPUSR -.889 (0), 1.2 (1)

0 and 1 in small brackets indicate do not recommend and recommend respectively.

Analysis of Findings

Since, the dependent variable in model is SCALE and all

predictors are being Categorical (nominal) in type. So, the

generalized regression model is used. The overall model is fit

since all results are significant for each predictor.


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Section - III

CONCLUSION AND RECOMMENDATION

Since overall model is fit. So, predictors better explain the

variation in sale of skin care products. But, since the scope

of the study is very narrow, as , it only include the staff

members, students and residents of near surrounding of Iqra

University, so results cannot be generalized.

References:


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Appendix

Q u e s t i o n n a i r e

PART-I

Situation I

1. Last time when you/some one close to youwanted to go to a high class expensiverestaurant, who was consulted first in thismatter? (Tick only one)

1.1. Family member (specify Relationship)

__________________________

1.2. Relative

1.3. Friend1.4. No idea or You were never involved(If

no idea then skip to Question No.3)

1.5. Neighbor

1.6. Any Other,please specify:___________________________

2. Why did the above mentioned personwasspecificallyconsulted?(Tick all that apply)

2.1. Because he/she has been to manysuch restaurants and knows them verywell.

2.2. Because he/she is an expert in suchcases (being a Professional chef,Restaurant owner etc)

2.3. Because you and the above mentionedperson share similar interest.

2.4. Because he/she will not benefit fromyour decision.

2.5. Because he/she is the one who givesyou advice all the time and he/she is rightmost of the time.


Situation II

3. Last time when you/some one close to youpurchased a car, who was the first person,consulted in this matter? (Tick only one)


__________________________

3.2. Relative


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3.3. You dont know or you were neverinvolved (If dont know then skip toQuestion No. 5)

3.4. Friend

3.5. Neighbor


4. Why did the above mentioned personwasspecificallyconsulted?(Tick all that apply)

4.1. Because he/she had experience ofhandling similar situations and/or knowswhere the best deal can be found.

4.2. Because he/she is an expert in suchcases (being a Mechanic, Mechanicalengineering etc)

4.3. Because he/she shares similar interest

with you/the person close to you.4.4. Because he/she will not benefit from

your decision.



Situation III

5. Last time when you/some one close to you

felt the need to purchase an expensive orlatest cell phone, who was consulted first inthis matter? (Tick only one)


__________________________

5.2. Relative

5.3. Friend

5.4. Neighbor


6. Why did the above mentioned personwasspecifically consulted?(Tick all that apply)

6.1. Because he/she has experience ofhandling similar situations

6.2. Because he/she is an expert in suchcases (being a sales person, working fora company that makes such items, etc)

6.3. Because he/she shares similar interest.

6.4. Because he/she will not benefit withyour decision.



Situation IV

7. Last time when you/some one close to youwanted to get a credit card, who was the

first person, consulted in this matter? (Tickonly one)


__________________________

7.2. Relative

7.3. Never wanted a credit card. (If No thenskip to question No. 9)

7.4. Friend

7.5. Neighbor

7.6. Any Other,please specify:

___________________________8. Why did the above mentioned person was

specificallyconsulted ? (Tick all that apply)

8.1. Because he/she has many cards andknows their benefits and flaws.

8.2. Because he/she is an expert in suchcases (being a Bank employee or creditcards department, etc)

8.3. Because he/she shares similar interest.

8.4. Because he/she will not benefit withyour decision.

8.5. Because he is the one who gives youadvice all the time and he/she and is rightmost of the time.


Situation V

9. Last time when you/some one close to youexperienced a medical emergency or had tovisit a hospital or consult a physicianurgently who was consulted first in thismatter? (Tick only one)


__________________________

9.2. Relative

9.3. Friend

9.4. Neighbor

9.5. No one

9.6. Any Other,please specify:


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__________________________

10. Why did the above mentioned personwasspecifically consulted?(Tick all that apply)

10.1. Because he/she has experience ofhandling similar situations

10.2. Because he/she is an expert in suchcases (being a Doctor, medical student,etc)

10.3. Because he/she shares similar interestwith you/some one close to you.

10.4. Because he/she will not benefit fromyour decision.




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PART-IIDemographic Information

Please provide the following demographic information. It will not be used for anything other than statistical

purposes nor will it be used for any kind of solicitation. Also, the information you provide will neither be given norsold to anyone under any circumstances.

1. Your name

1.1. ____________________________

2. Gender

2.1. Male

2.2.

Female

3. Your age? (Tick only one)

3.1. 20 years or less

3.2. 21 30 years

3.3. 31 - 40 years

3.4. 41 50 years

3.5. 51 years or more

4. Where do you live? (Tick only one)

4.1. Defence/Clifton4.2. KDA/Bahadurabad/PECHS

4.3. Nazimabad/North Nazimabad

4.4. Gulshan-e-Iqbal/Gulastan-e-Jahur

4.5. Any Other, please specify:

__________________________

5. Your Education (Tick only one)

5.1. Intermediate or less

5.2. Bachelor or equivalent

5.3. Masters or Equivalent

5.4. Any Other Please specify:

___________________________

6. Your household average income per monthin Pak Rupees? (Tick only one)

6.1. Rs. 20,000 or less

6.2. Rs. 21,00040,000

6.3. Rs. 41,00060,000

6.4. Rs. 61,00080,000

6.5. Rs. 81,000100,000

6.6. Above Rs. 100,000

7. May we contact you again for a follow-upsurvey?

7.1. Yes

7.2. No

8. A phone number where you can becontacted?

8.1. __________________________

Thank you.


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rm final thesis

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