Chapter two: Literature Review
2.1 Introduction
The purpose of this chapter is attempt to let people understand the importance of store choice to retailers and the main issue in this area, also, through these literature, finding the gap in this area.
2.2 price and store patronage
In the past years, numbers of researchers investigate various factors on customer store choice (Bucklin, 1966; Williams and Dardis, 1972). Comparing all the influencing factors, many researchers consider price as one of the most important elements to influence customer store choice (Seiders and Costley, 1994; Dawar and Parker, 1994). Donald et al. (1993) hold the same view; they argue that price is one of the most important elements to customer store choice decision. According to this view, most researchers hold the point that price is playing the central role in all purchase situations; therefore, how price impact customer store choice has been an interested issue for past researchers, they have done many studies to find out the relationship between price and patronage. (Mitra, 1995; Rao and Monroe, 1988). Among a series of researches, most of them support the price-store choice relationship, Yavas (2003) considered price is the motivation of customers store patronage, it means customer patronize the store because of the price provided by the stores. Seiders and Costley (1994) hold the similar view, they found price is the main decisive factor to customer store patronage, they support whether consumers patronize the store largely influenced by the prices that store offers.
At the same time, a number of researchers point out that price is one of the most important elements for customers taking into considered when they are shopping. (Biswas et al., 2002; Urbany et al., 1998), they argue that, customers suggest price represents the money they must be sacrifice during the purchase process. In the past, many researchers have spent much time to measure what are the elements of price influence customers store choice (Bell and Lattin, 1998; Fox et al., 2004). Among of these researchers, Fox et al. (2004) consider price is just a money cost, consumers change products what they want by sacrifice equal money, Finn and Louviere (1996) suggest that price is an intangible concept such as store image while Sweeney and Soutar (2001) relate price to consumer value in some extent. Donald et al. (1993) launch that without doubt, price is one of the most important factors to customer purchase decision, at the same time, they mention in all purchase situation, price as the expenditure they must sacrificed customer should to considered as well (Donald et al. 1993).
Because there have many factors link price to customer store choice, thus, there have some different findings among these researches. According the research by Yavas (2003) suggests that price is a very important element for customers store choice and is the major motivation for consumer shopping; in other words, consumers store patronage is driven by price. While Seiders and Costley (1994) got the similar result, they argue that price is the determinant factor in customer store choice and it to be the major element to customer shopping decision, and they consider customers are sensitive and have the accurate concept to the price. While Fox et al. (2004) hold the different view with Yavas and Seiders and Costley, he found that compared with promotions and store assortment, price play less important role to driving customer purchase.
According to M. Moore et al. (2006 value to use part two) research, they support that customers take low price as their major driver in purchasing situation, that means price consciousness is positively related low price strategies implemented by stores while price consciousness is negatively related high price strategies implemented by stores. (M.Moore et al. 2006) at the mean time, sale proneness is positively related price reduction strategies implemented by stores while ne
