LINKING CUSTOMERS AND PRODUCTS BY MEANS-END CHAIN ANALYSIS

Abstract

When making purchasing decisions, customers evaluate products from the perspective of the benefits they provide and values that they hold. Means-end theory implies that the efficiency of marketing strategies and promotional activities are based on the solidness and consistency of linkages between product attributes, benefits and values. To analyze these linkages with customers of Slovenian furniture products, a laddering methodology was applied. The results show that nine dominant chains exist which link the most important attributes with the desired benefits and values. The findings of the laddering analysis were also used as a basis for an assessment of Slovene furniture company advertisements. This assessment shows that furniture advertisements in the Slovene market are still mainly product focused and they fail to emphasize the desired benefits and/or values. [PUBLICATION ABSTRACT]

Headnote

When making purchasing decisions, customers evaluate products from the perspective of the benefits they provide and values that they hold. Means-end theory implies that the efficiency of marketing strategies and promotional activities are based on the solidness and consistency of linkages between product attributes, benefits and values. To analyze these linkages with customers of Slovenian furniture products, a laddering methodology was applied. The results show that nine dominant chains exist which link the most important attributes with the desired benefits and values. The findings of the laddering analysis were also used as a basis for an assessment of Slovene furniture company advertisements. This assessment shows that furniture advertisements in the Slovene market are still mainly product focused and they fail to emphasize the desired benefits and/or values.

1. INTRODUCTION

In marketing, the importance of thinking about products in terms of their consequences, not just attributes, is often emphasized (Peter & Olson, 1999). Instead of treating products as a bunch of physical attributes, they must be considered, developed and promoted in terms of the consequences or benefits they provide to customers. Marketers must, therefore, develop and offer product characteristics in a way that will correspond to the benefits sought.

From the customer's point of view, the preferred benefits determine the importance of a particular product attribute. This gives rise to the question: "What goal is behind a particular benefit?" Besides practical and functional benefits, customers specifically expect certain psychological benefits as well; leading to another question: "Are there any final goals that are superordinate to all others?" Values are often suggested as such broad motivational goals in the customer decision-making process, hence, their associations with product attributes and benefits can enable us to better understand customer product knowledge and purchasing motives. Such an approach, termed means-end chains, can be used for different purposes like improved segmentation (Botschen et al., 1999), or development of advertising strategy (Peter & Olson, 1999, Reynolds & Craddock, 1998).

The purpose of this paper is to apply a means-end approach to the Slovene furniture market with an aim to provide suggestions for improvements in segmentation and advertising strategies. The Slovene furniture market is now fully open to foreign competition, yet Slovene furniture producers lack marketing expertise due to the legacy of the former (socialist) economic system. Due to their stable and unthreatened positions in the relatively uncompetitive Yugoslav market in past decades, they did not put much emphasis on marketing efficiency and effectiveness. However, today, they are facing some important challenges. In the global economy, they encounter strong competition from countries that are mainly competing with low prices due to their low cost workforce. On the other hand, they are facing increasing competition from strong international producers and retailers in the furniture sector such as IKEA, which are not competing solely on the price attribute. Additionally, they are encountering rapid and significant changes in customer preferences resulting from new lifestyle patterns. Slovene furniture producers, therefore, need better insight into product-customer linkages for the development of their competitive strategies.

2. THEORETICAL BACKGROUND

The means-end theory is based on the notion that customers buy products because of their benefits and meaning, not because of their attributes. Product attributes, therefore, serve as a means to some ends. However, a particular customer may prefer particular product attributes for different reasons, as a particular attribute can provide different benefits to different customers. Additionally, a particular benefit is important because it helps customers to achieve other important benefits and goals which differ among customers. Customers, therefore, evaluate product attributes through their various consequences and each product can be described as a bundle of attributes, but also as a bundle of more or less abstract benefits. Customers develop associative networks of product knowledge connecting link attributes with their subjective consequences and serving as the basis for purchase decision-making (Gutman, 1982, Peter and Olson, 1999). According to this theory, three basic knowledge structures exist that are hierarchically organized: attributes, consequences and values.

In addition to the basic model - called the ACV model - different authors suggested other, more complex means-end chains, with more levels. Peter and Olson (1999) suggest a four-level model consisting of: attributes, functional consequences, psychological consequences and values. Wilkie (1994) suggests a six-level model (Figure 1) that makes further distinctions among attributes (physical and abstract), and values (instrumental and terminal). Through these associative knowledge networks, the means-end theory links products with customers and reveals an interpretation of why certain product attributes are desirable to them (Botschen et al., 1999).

This enables better benefits segmentation based on "true", causal benefits, as opposed to descriptive (attribute) segmentation criteria. Reynolds and Craddock (1988) suggest that the means-end framework has important strategic implications for advertising strategy development, as it helps to: (1) identify perceptual orientations of the segments in the market, (2) specify the current strategic position of the product and (3) integrate consumer perceptual information and the current strategic position into alternative strategies and communications. Understanding of means-end linkages is especially useful for positioning decisions. If a particular product or brand is successfully positioned on the basis of benefits or values, competitive imitation is harder to achieve than when the focus is on an attribute basis (Vriens & Hofstede, 2000). Companies should, therefore, decide whether to emphasize the link between product attributes and product benefits, what is called informational positioning, or to use transformational positioning, which concentrates on links between product benefits and values (Evans et al., 1996). To achieve this, any company should know the types and the strength of attribute-benefit-value linkages among various market segments. According to Korenini (2001), positioning should be based on the strongest means-end chain which separates a particular product from the competing ones.

Although theoretically clear, research of means-end structures is not an easy task. It requires the identification of various chain elements which encompass objective product entities (attributes), but also highly subjective constructs such as psychological benefits and values. Secondly, identified elements should be correctly assigned to hierarchically structured categories. Also, derived categories should be adequately linked and their structural characteristics should be analyzed. For these purposes, the means-end approach developed a laddering research methodology which combines different qualitative methods and principles with graphical presentation of hierarchical means-end knowledge structures. The basis for identification of these elements and links among them on various levels is an interview, through which a series of probing questions of "why is this attribute (or benefit, or value) important for you?" are asked. Hofstede et al. (1998) identified three steps of laddering methodology which correspond to the requirements mentioned above:

1. Defining important attributes of a particular product. Reynolds and Gutman (1988) suggest that these attributes are those which differentiate between products; hence, customers should be asked which attributes are 'decisive' for their relative preferences of a particular product.

2. Establishing linkages between attributes, benefits and values with in-depth interviews. Important attributes identified in the first step serve as the input for in-depth interviews in the second step where a series of probing "why" questions are asked, moving customers up a ladder, until a final benefit or value is revealed.

3. Analysis of laddering by in-depth interviews. This step requires the classification of derived answers into three basic categories (attributes, benefits and values). On this basis, an "implication" table is developed. The fields of this table contain information about the frequency of associations between particular categories. This table serves as the basis for the graphical presentation of the results in the form of a network called a hierarchical value map.

3. EMPIRICAL STUDY

The empirical study presented in the following sections demonstrates how the means-end theory and a corresponding laddering research methodology can be applied to a particular industry sector - the Slovene furniture market. Research goals of our study were:

* to understand the motivational background of purchasing furniture,

* to identify furniture attributes that are important for customers,

* to identify key benefits and personal values sought when purchasing furniture, linked to key furniture attributes,

* to identify the most frequent chains which result from identified attributes, benefits and values,

* to apply key elements of means-end chains (attributes, benefits and values) for the analysis of advertisements of slovene furniture producers.

3.1 Methodology

In order to obtain empirical information on means-end chains for customers in the Slovene furniture market, a laddering methodology was applied. Laddering is basically a qualitative type of research; however, it enables some quantitative analysis which enables counting frequency and comparison with different segments in larger samples. Consequently, sample selection and structure was an important element to define prior to data collection. Still, collecting data and revealing means-end chains were not the final goals of the study. As the application of means-end structures for analysing advertisements was one of the research goals too, this required additional research activities. As a result, the research was organized in three steps:

1. telephone survey,

2. personal in-depth interviews and

3. advertising research.

In our case, the prime concern in the sample selection was related with the need to cover a broad enough population that had relatively recent experiences with purchasing different types of furniture. To assure this, we included in the sample interviewees of all suitable age groups which bought furniture within the last three years. Under the term furniture, we understood complete "systems" (kitchens, bedrooms) or single bigger units of furniture (tables, etc.). A sample size of 40 was estimated to be adequate for the research goals. A telephone survey was performed to select appropriate interviewees and to ask them to participate in the in-depth laddering interviews.

For personal in-depth interviews, a short guide was prepared consisting of four groups of questions. The first group was introductory questions which served as reminders to the experiences with the last furniture purchase. In the second and most important part, questions regarding important furniture attributes were asked. Each furniture attribute named was followed by a "Why is this important for you?" type of question. These questions gradually led to more abstract levels of benefits and values. If more than one answer (i.e. more benefits) was provided on a particular level, ladders were "built up" for each of them. To help interviewees when they had difficulties to identify or express their true motives, some additional probing questions were prepared, following the "third person method" or negative laddering principle (suggested by Reynolds and Gutman, 1988). The third group contained some additional questions regarding the (possible) impact of important others (friends, family members) on means-end chains. The fourth group consisted of questions regarding basic demographic variables.

After completion of the in-depth interviews, answers were coded in order to provide meaningful categories which could be assigned to three basic levels: attributes, benefits or values. Afterwards, the answers were put in an implication table containing (frequency of) linkages between means-end chain elements and serving as a basis for the identification of dominant chains and the graphical presentation of them. Identification of means-end chains was followed by the analysis of Slovene furniture advertisements. For that purpose, printed advertisements of 11 leading Slovene furniture producers were collected, all of which had been published between September 2001 and September 2003. Key communication elements of each advertisement (slogans, text/information and visual/symbolic elements) were analyzed and associated with corresponding means-end level.

4. RESULTS

4.1 Dominant means-end chains

The results show that furniture customers perceive more benefits on the functional level than on the psychological level; nonetheless, most of the benefits have links with the value level. This shows that most of the derived attributes have some deeper psychological meaning that is present in purchasing furniture. As a relatively large sample for this type of study yielded a large amount of answers on the attribute level, here only the most frequent answers, with a frequency of six or more, will be presented. These elements are considered to be key attributes and serve as the basis for the most frequent (dominant) means-end chains. Firstly, elements of these dominant chains are listed and afterward all nine dominant chains which link them are presented.

Key furniture attributes are:

* price,

* visual appearance (color, etc.),

* design details (edges, etc.),

* quality (in details and as a whole),

* material (real wood, etc.),

* brand,

* functional elements (slide doors, etc.),

* roomy inside,

* modularity and flexibility,

* ergonomics.

Key furniture benefits are:

* saving money,

* healthy sleep,

* lasts longer,

* purchasing for longer,

* good use of space,

* more things in limited space,

* keeping many things,

* easy access to things,

* practicality,

* less necessary walking,

* ease of work,

* saving time,

* more time for other things,

* more time for family,

* easy maintenance,

* does not hurt anyone,

* more space for decoration,

* surrounded by beautiful things,

* beautified home,

* accordance with surroundings,

* enjoying my time at home,

* following your needs/wishes,

* no unnecessary elements.

Key values linked to furniture benefits are:

* thriftiness,

* health,

* personal satisfaction,

* family (happiness),

* safety,

* home (enjoyment of).

The first dominant chain (Figure 2) follows the price attribute and leads through the "saving money" benefit toward the value of thriftiness. This chain provides the answer to the question: Why do customers value low prices? The ultimate end which links customers with the price attribute is therefore thriftiness, which is expected and logical. The price attribute was most frequently preferred in the segment with lower education associated with lower incomes.

The second dominant chain (Figure 3) starts with an abstract attribute - quality - which links to healthy sleep and is, therefore, associated with bedrooms. It shows that customers increasingly link quality with their state of health, and consequently, associate this attribute of health as a value.

The third dominant chain (Figure 4) is more complex than the first two. It also starts with the quality attribute and continues toward "lasts longer" and "purchasing for longer" benefits, where it splits into two different paths. The first path leads to the "saving money" benefit and thriftiness value, whereas the second path leads directly to the personal satisfaction value. It looks as if Slovene customers, on the one hand, value quality furniture because of the expected durability, meaning that they will not need to buy new furniture soon, while on the other hand, durability leads directly to deep personal satisfaction.

The fourth dominant chain (Figure 5) is even more complex than those previous and starts with the "design details" attribute. It explains why design details (such as smooth surfaces, rounded edges, etc.) are important to customers. According to this chain, their importance can be explained by a practical and functional benefit - easy maintenance - leading to a time-saving benefit. Saving (maintenance) time is important for two reasons (values); it releases additional time for other, more important, things and hence, provides personal satisfaction (which was frequently mentioned by interviewees who are single) or, it enables spending more time with the family.

The fifth dominant chain (Figure 6) starts with the "functional elements" attribute and continues to the functional benefit of "good use of space" which is important because of the subsequent functional benefits - firstly, because of the opportunity to store "more things in limited space", and later to "keep many things" (that come into our homes during the years). This chain stops at the functional benefits level and does not continue to the value level showing that customers do not necessarily link furniture attributes to some deeper (or higher) psychological meanings - some of the benefits which they perceive stop at the functional level. This chain is particularly more frequent in the segment of customers living in apartments and who, therefore, have less available space than those customers living in houses.

The sixth dominant chain (Figure 7) is the most complex chain and unlike the fifth chain, it shows that functional elements of furniture can be linked with psychological benefits and values. Personal satisfaction and family happiness are such values and both are "provided" through "more time" benefits. The functional benefit that links these values with the attribute level is "easy access" - it, therefore, seems exceptionally important that furniture design and its functional elements provide fast and easy access.

The seventh dominant chain (Figure 8) starts with the "visual appearance" attribute, which is important because of the psychological benefit of being "surrounded by beautiful things" and afterward having a "beautified home" finally leading to "enjoyment at home" as a value. The seventh chain, therefore, "skips" functional benefits and builds on the "pure aesthetic" benefits that provide enjoyment at home. All interviewees in this chain were females confirming that beauty is within a "women's domain" for home equipment too.

The eighth dominant chain (Figure 9) also starts with the "visual appearance" attribute which continues to another psychological benefit - namely "accordance with surroundings", which is linked with a beautified home and enjoyment at home. Unlike the seventh chain, this chain "contains" male interviewees too and provides somewhat different answers to the question: "Why do customers value the visual appearance of the furniture?" The seventh chain specifically suggests that the enjoyment of visual appearance results from the "intrinsic beauty" of the furniture (i.e. preferred colour). The eighth chain, however, suggests that the key link connecting visual appearance with enjoyment at home is "accordance with surroundings", meaning that beauty and enjoyment is a result of the "relation" between different furniture elements.

The ninth dominant chain (Figure 10) starts with the "modularity and flexibility" attribute and continues to the psychological benefit of being able to "follow your needs or wishes". This benefit leads to another benefit - that of having "no unnecessary elements" at home, which is ultimately linked with enjoyment at home as a value.

Interestingly, "no unnecessary elements" is apparently a functional benefit and it looks illogical that it follows the psychological benefit. However, a more thorough look at the complete answers reveals that this sequence is sensible. Customers specifically understand this benefit in terms of simplifying their life and keeping only those things that are essential to them ("For me, it is important that the combination of furniture elements suits my wishes. There shouldn't be any spare drawer I don't need. That makes me feel good in my home.").

4.2 Slovene furniture producers advertisements

Analysis of printed advertisements of Slovene furniture producers was of a qualitative nature aimed at the question: At what level are advertisements focused and which particular elements among attributes, benefits and values are most strongly emphasized? Due to the limited space available, here, only the summary findings will be presented; as this (advertisements) analysis serves primarily as an illustration of the practical application of known means-end structures. The advertisements analysis shows that Slovene producers are primarily focused on the attribute level in their promotion efforts, albeit not exclusively, as the benefit and value level can also be noted. From a standpoint of dominant chains, advertisements most frequently use elements of the first chain, as they often emphasize the "saving money" benefit and thriftiness value. Advertisements also often utilize the "quality" attribute, which is rarely associated with the further benefits present in the second and third dominant chain. Some elements of the seventh dominant chain can also be often found in advertisements - particularly, a beautified home. However, most advertisements do not link the mentioned attributes or functional benefits to higher levels - be it psychological benefits or values. Among values, "home" appears to be an exception, as it is frequently mentioned in advertisements. However, home is emphasized mostly in slogans, while other elements (text, visual elements) rarely communicate it as an important value. The visual part of advertisements, specifically, most frequently shows images of furniture parts - isolated and excised from an image of an authentic and pleasant context, with family members present in it. From a theory standpoint, we can, therefore, conclude that Slovene furniture producers predominantly utilize attribute based positioning or informational positioning instead of transformational positioning.

5. DISCUSSION AND RECOMMENDATIONS

The results obtained in the empirical study are normally input for strategic decisions of particular producers or brands. In our case, they represent "state of the art" in their linkages between products and customers in a particular (furniture) market. For this reason, the results presented need some additional discussion regarding their implications. Normally, the strongest - dominant chains are suggested to be the basis for positioning. In our case, these are the third and eighth chains. To get closer to their customers, Slovene producers should, therefore, position their products on the basis of either the "quality - durability - thriftiness/satisfaction" chain, or "visual appearance - beautiful home - enjoyment at home" chain. While Slovene producers are moving toward the quality attribute and home value, they also still pretty much adhere to the first ("price - saving - thriftiness") chain. Does this mean that their strategies are wrong and that they should replace them entirely - with the third and/or eighth chain based strategies? Are all other chains, therefore, "wrong" and should they be abandoned? Not necessarily, but from the means-end approach, some elements of their marketing strategy should be reconsidered. This approach is focused on linking products with customers on various levels and it helps to understand why particular attributes are important for customers. The implications of this are manifold and, according to the advertisements analysis, insufficiently applied. We specifically found that Slovene producers stay at the product attributes level and that they do not attempt to establish closer connections with their customers on the basis of these links. Instead of this, they should communicate on all three ACV levels, hence, seek to establish "bridges" with customers on the level of attributes, the level of benefits and the level of values. In addition, communication should be consistent with chains perceived by customers. This could, for instance, mean that a low price cannot be associated with quality, durability or aesthetic promises.

Besides these general and universal implications of a means-end approach, there are some points of strategy development that depend upon different factors. One such factor is the competitive position of the company/brand. Instead of following the dominant chain which is interesting for the strongest producers with the biggest market share, differentiation is often suggested as an alternative position that is easier to defend. Instead of the dominant chain, Slovene producers should perhaps consider chains which better suit the purpose of their competitive differentiation. They would, for instance, hardly be able to compete with low cost producers from abroad, yet at the same time, they do not have the distinctive design capabilities that are needed for differentiation in "visual appearance" attributes. Accordingly, they should probably seek for differentiation in quality, modularity, functionality and flexibility attributes. Another alternative could be a "niche" marketing approach based on small and specific segments of the market. In terms of a means-end approach, this would mean concentrating on "seldom" chains instead of dominant ones.

However, these strategic alternatives could be considered from the standpoint of a particular producer/brand for which a means-end approach is even more useful. The furniture market specifically encompasses a very broad set of different "products", and particular furniture types or categories can have specific chains. A good example of this is the second dominant chain that is valid primarily for beds. What then are the most useful applications of means-end chains from the perspective of individual producers? As we saw, empirical results are useful for segmentation purposes, as different segments prefer different dominant chains. According to Botschen et al. (1999), a means-end approach to segmentation is superior to an ordinary (descriptive) benefit approach, as the former provides an explanation as to why a particular benefit is important and hence it could be considered as causal, leading to a "true" benefits (as opposed to a descriptive / attribute) approach. Another possible function of means-end chains application is positioning analysis. A particular producer/brand can locate its (and its competitor's) position in a hierarchical value map (HVM) consisting of all means-end chains. Afterwards, the HVM enables the assessment of different strategic options that are available for competitive positioning. With the help of a HVM presentation, a company can better understand who "owns" a particular attribute or chain, how strong and unique someone's position is and which chains are neglected. Finally, means-end chains can provide inspiration and a source of new ideas for innovation and development, as they enable a deeper insight into customer reasoning and motivation for purchasing. For that purpose, not only the dominant chains, but also particular, rare or unexpected chain elements and their links should be considered.

6. CONCLUSION

This paper explores strategic implications of a means-end approach in the Slovene furniture market. With the help of a laddering methodology, the most important furniture attributes were identified and, afterwards, nine key chains linking furniture products with their customers on various levels were revealed. The obtained means-end structure shows that key furniture attributes are important for customers mostly because of the functional benefits they provide, and that they are linked with relatively few values, among which "enjoyment at home" is most common. Means-end structures enable various strategic and tactical applications and their use for analyzing printed advertisements provides a practical example of that. Advertisements analysis leads to a conclusion that Slovene furniture producers are still product, instead of customer, focused. They should establish links with customers on various ACV levels in order to accomplish better identification of customers with their products/brands. In this aim, understanding means-end structures can help them at different elements of strategy development, particularly in segmentation and competitive positioning decisions.

Sidebar

POVEZIVANJE KUPACA I PROIZVODA UZ POMOC ANALIZE UZROÈNO-POSLJEDIÈNOG LANCA

Sazetak

U donosenju kupovnih odluka, potrosaèi evaluiraju proizvode iz perspektive prednosti koje im pruzaju, ali i iz perspektive svojih osobnih vrijednosti. Teorija uzroèno-posljediènog lanca implicira da ce uèinkovitost marketinskih strategija i promotivnih aktivnosti ovisiti o solidnosti i konzistenciji poveznica izmedu obiljezja proizvoda, prednosti koje oni pruzaju kupcima, te vrijednosti kupaca. U ovom je radu spomenuti oblik analize primijenjen na kupce slovenske industrije namjestaja, temeljem èega je identificirano devet dominantnih uzroèno-posljediènih lanaca, koji povezuju najvaznije karakteristike proizvoda s percipiranim prednostima i vrijednostima. Takoder su analizirani i oglasi slovenskih proizvodaèa namjestaja, pri èemu se doslo do zakljuèka da se i dalje oglasavaju karakteristike proizvoda, umjesto naglasavanja zeljenih prednosti i/ili vrijednosti.

References

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