To Buy Or Not To Buy

Furniture manufactures often perform customer satisfaction analyses after purchase, but performing a research before designing and producing the furniture can reap many benefits. By Branko Liker, University of Ljubljana

It is generally accepted that socioeconomic development greatly depends on investment and, therefore, long-term development can only be achieved through investment, because well targeted investment activity is the primary assumption for all aspects of competitiveness.

Furniture companies are facing strong competition in the contemporary global market. They must continually strive to improve or at least maintain their market share. Consumers are nowadays very demanding and they require as much as possible information about the product to be sure about its quality.

Therefore, all producers are forced to continually revise their marketing and production strategies to satisfy their customers and ease their buying decision. To meet these goals, companies must take interest in customer’s desires, perceptions and predispositions and use this information to develop more successful products, search for new marketing channels, to determine appropriate prices and create more effective marketing communication.

Marketers must be familiar with the buying decision process to be able to understand customer demands. There is a sequence of stages buyer pass through when they decide which article to buy.

A number of factors influence this process; most important among these are motivation, social and environmental demands, and the company’s marketing activities.

The buying process starts long before the actual purchase takes place and continues for an extended period afterward. Throughout the course of the process, buyers pass through five stages: problem recognition, information search, evaluation of alternatives, purchase decision and post-purchase behaviour.

To effectively analyse the buying process, the buyer’s activities before and after purchase must be examined, as well as the customer’s reasoning at the time of purchase. Understanding the buying decision process in the furniture market enables furniture companies to influence the customers at each phase of the process.

The company can influence the decision or even change it, if it understands how the customer reaches his/her buying decisions, if it is familiar with the factors influencing customer behaviour and if it knows how to convince the customer that his/her best choice is exactly the product the company is offering.

It is crucial for furniture companies to understand the buying decision process. The company must establish how the customers will behave at each stage and determine the factors the company can use to influence the customers at each stage.

Any furniture company that is driven by the needs and wants of customers have to understand consumer behaviour. In many cases, customers might not even be aware of their motivations or behaviours. Understanding consumer behaviour is essential for the success of any organisation. Furniture companies must understand consumer wishes, inclinations and behaviour in order to generate products that will be accepted and purchased.

It is, therefore, necessary to know the factors that are most decisively influencing the buying decision-making.


Conjoint Analysis

Furniture manufacturers area constantly developing new products and consider several factors during product design. They perform various analyses in order to yield better sales results. Classical research methods usually do not provide the desired results, since they are unreliable for establishing customer’s needs. 

The reason for inaccurate outcomes of such analysis lies in the fact that research usually focuses on each decision factor separately and, therefore, overlooks various circumstances of the buying process, most significantly the interdependencies and interactions between influencing factors.

The conjoint analysis is often used in marketing research and is by far the most often employed research method for marketing use with regard to customer’s needs. 

In the early 1980s, conjoint analysis was used for the examination of more than 400 commercial cases. Conjoint analysis enables researchers to explain how people decide between products and services, allowing companies to design new products or services that fulfil the core needs of the consumers. It is an exceptionally powerful tool for determining which product attributes drive people to buy a specific product and what the consumer actually values in a specific product.

Conjoint analysis is superior to other methods for determining consumer preferences, since other methods evaluate consumer preferences for each product attribute individually, while the conjoint analysis take a more holistic view of the product.

In conjoint analysis, each product is defined by a selection of attributes, and then the relative importance of each attribute is determined based on the respondents’ rating of the product. The consumer gives his/her preference to a specific selection of attributes as an evaluation of the whole product. This approach reflects the consumers’ real life situation more closely than examining individual product attributes.

A study was conducted to determine buyer preferences regarding three aspects of wooden kitchen furniture: manufacturer type, price level and design. Potential kitchen buyers were surveyed at two largest kitchen retailers in Croatia and Slovenia, and online.

We determined the number of factors and their levels that best represent common attributes that buyers consider when choosing kitchen furniture. There are many kitchen brands on the market, which is covered by the factor ‘Manufacturer’.


Decision-Making Factors

This factor was then divided into three levels: Domestic, Foreign and Carpenter (custom made). In regard to the factor ‘Price’, only the wooden parts of the kitchen were included in the study. Although kitchen appliances can be included along with the purchase of a kitchen, they were not considered in the research.

With these constraints, the average price of €4,000 was determined for the wooden part of the kitchen. In practice, the price for a kitchen is calculated by length. However, respondents were instructed to disregard space concerns when considering the price.

In this matter, the respondents were placed in a situation where they had to decide how much they were willing to spend on new cabinets for the kitchen and not how much space they had in their apartment. It was assumed that a lower price represented higher relative utility to the buyer than a higher price. 

Since the design or style is subject to personal interpretation, we collected images of individual styles and presented them to the respondents in order to assure consistent evaluation.

The ‘Classic’ kitchen differs from the ‘Modern’ one with regard to the material used and the design aesthetic. In the ‘Classic’ kitchen, wood and stone are mostly used in natural colours and rounded elements. They provide a homely, comfortable feeling and a sort of country mood. Their design is timeless.

The ‘Modern’ kitchen is characterised by a minimalistic appearance. Various materials are used, like glass, metal, plastic, laminated timber and straight lines. Typical are large drawers that have replaced cabinets with shelves common in the ‘Classic’ design.

The ‘Rustic’ kitchen features typical furniture with vintage form and appearance. The main materials are natural—wood being one of the primary materials for construction and interior equipment.

The ‘Design’ factor had a neutral relative utility value. 


Utility Estimates

The assumption of a discrete relationship between levels for the factors ‘Manufacturer’ and ‘Design’ means that higher partial utilities correlate to higher preference. However, because of the linear relationship assumed between price levels, an inverse relationship between utility scores for the factor levels ‘Price’ was found.

In this case, the more negative utility estimate correlates to lower preference. The inverse relationship is the result of the linear correlation for the price and the assumption that a lower price represents a higher utility for the buyer with a higher price.

In general, these results reveal that respondents generally prefer domestic or craftsman kitchen furniture for foreign made kitchen furniture. As expected, respondents preferred lower priced kitchen furniture. The modern designs presented were greatly preferred over rustic designs with the classical designs falling between the other types.

The socio-demographic characteristics included in the questionnaire reveal several interesting preferences within each category. We considered it neither necessary nor appropriate to combine individual demographic characteristics, since the small sample size could lead to unreliable data.

We assumed that the chosen factors (Price, Manufacturer and Design) were statistically significantly related to the chosen socio-demographic attributes. Opinions regarding manufacturer varied between groups. 

The groups ‘Female’, ‘Above 45 years’, ‘Gymnasium or vocational school, ‘Employed’, ‘Retired’, income ‘Below €1,000’ and income ‘Above €2,000’ as well as living ‘In city’ and ‘In countryside’ would choose a domestic manufacturer. Only the group ‘Elementary school or less’ would choose a foreign manufacturer. The groups ‘Male’, ‘Under 35 years’ and ’35 to 45 years’, ‘College or university’, ‘Unemployed’, ‘Pupil or student’ and income of ‘€1,000 to €2,000’ preferred the carpenter manufacturer option.

All groups would prefer to pay less than €4,000 for the wooden parts of the kitchen. This is mostly due to the fact that the respondents had the choice of all possible combinations.

It is logical that, for example, everyone would rather buy a kitchen from domestic manufacturer with classic design that costs less than €4,000 than a kitchen from domestic manufacturer with classic design that costs more than €4,000. In regards to kitchen design, the analysis shows that the buyers in general prefer the modern design option.

Competitiveness in the furniture market is an important reason for performing consumer preference research and analysis. Companies use research to stay current with the latest trends. However, furniture manufacturers most often perform customer satisfaction analysis after the purchase. Very few of them decide to perform a research before designing and producing the furniture.

The study used conjoint analysis to analyse customer preferences for three different kitchen furniture factors: manufacturer, design and price. The results demonstrated the suitability of conjoint analysis for analysing customer purchasing behaviour, even though it is somewhat more complicated as it requires defining the factors of interest as well as their levels and performing surveys, compared to other simpler methods.

Significantly though, conjoint analysis allows the researcher to examine multiple aspects of the buying process simultaneously. The customers are placed in a realistic buying situation, since they compare and evaluate a spectrum of kitchen attributes and utilities tougher, where they rate the important of each combination.

Using conjoint analysis, we determined that the buyers give most important to design, followed by manufacturer, and the lowest importance to the price. Based on our experience, the conjoint analysis should be used for investigating the buying process and analysing the influencing factors. 

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