FOREIGN PRODUCT INFORMATION SOURCE PREFERENCES IN GEORGIA

Ali Riza Apil

The article aims to assess the product information usage habits of consumers. Advances in communication, the newly developing advertising sector and other promotional efforts reshaped the consumers’ habits for getting and using the product information after the USSR period lacking commercial usage of media.

The article aims to find an answer to the questions how this changing trend influenced consumers’ habit for using information and whether it differs across demographic segments. Nine sources of information for evaluating products sourced from different countries were reported by Georgian consumers, these being: Experiential knowledge, friends’ opinions, shop displays, television, information on packaging, radio, newspapers and magazines, salespeople, billboards. Of these, the source used most frequently was the knowledge gained through personal experience closely following was the opinion given by friends, thus underscoring the role of personal influence in formulating COO perceptions. Television was observed as the most influential commercial media and newspapers/magazines and billboards were used to a lesser extent. Finally, salespeople and radio were found to have a much weaker influence. Results exhibited significant variations on the information sources preferences among age groups. Education, gender, marital status, and consumer ethnocentrism played differentiating role in preferences among information sources. Key words: Information sources, Georgia, advertising media, demographic differences Introduction The past 15 years have witnessed the growth of foreign product existence in the market and advertising and promotional efforts. These promotional efforts were the new means of consumers’ information sources. Consumers face advertising, the ignored sector of former USSR. Promotion was not developed enough under the socialist system. It was used primarily as a propaganda tool to promote the achievements of the system or to direct public consumption toward the desired goals (Samli and Jermakovicz 197 , Oleson 198 ). Quelch et al (1991) states in their article published in Sloan Management Review that though communications media in the country was abundant, advertising was used rarely as a means to inform, remind or persuade consumers about various issues concerning the enterprise and its offerings, due to the lack of brand differentiation, the fixed pricing system and the unreliable distribution network. The same was also true of other promotional tools, namely sales promotions, public relations and personal selling, which were virtually non-existent under the socialist regime (Leonidou and Katsikeas, 1996). However, during the past decade, with advances in communication, increased wealth and travel, introduction of satellite TV, infusion of free market economy principles, privatization efforts and liberalization in these countries have created distinct consumer market segments. These ‘New consumer segments’ are very discerning in their selection and purchase of products and services as well as patronizing stores ( Kaynak and Kara, 2001). Classical product information usage habits of consumers mainly were depending on using own experience, friends’ opinion, shop displays, sales people and information on packages. The newly developing advertising sector and other promotional efforts reshaped the consumers’ habits for getting and using the product information. How did this trend influence consumers’ habit for using information? And What is the place of the commercial information channels in the consumer decision process? Does information source preferences vary across different demographic segments? These three questions were the impulse for the present research. It is hoped that this research will help both foreign and indigenous company managers to plan their promotional efforts. Background Studies for informativeness of advertising have been focusing on comparing various media vehicles (King, Reid, Tinkham, and Pokrywczynski, 1987; Larkin, 1979; O’Keefe, Nash, and Liu, 1981; Pasadeos, 1990). Newspapers tended to rank higher than other media especially on informativeness measures specific to local or retail advertising. Television was ranked higher on informative scales for national advertising (King et al., 1987) and for new product information (Larkin, 1979, Oskam and Hudson, 1999). Soley and Reid (198 ) found magazine advertising was rated higher than television by consumers as a source of market information. Although all studies reported informativeness mean scores near the theoretical mean, only Soley and Reid noted that “respondents were not completely satisfied with information value of advertising sciEntifi in either media” (pp. 29- 0). Oskam and Hudson (1999) found that with regard to source of advertising, the majority of respondents reported they relied on newspapers for most of their advertising information, followed by television, radio, and magazines. Younger respondents depended more on newspapers for their advertising, older participants used television for their advertising information. Ozsoy and Apil (2005) reported that the most popular and effective advertising channels in Georgia are TV and newspapers. Also available for purposes of trade promotion: exhibition, marketing, and special sales facilities (e.g. universal shops) located in Tbilisi, Batumi, Kutaisi and other cities. Billboards became popular advertising tools in larger cities, due to electricity shortages observed in previous years (18). Among the promotional tools used by Georgian companies are lottery, a premium sign placed on products, and sponsoring radio/ video shows. Unfortunately, winners of big premiums are never announced via mass media and thus consumers do not believe that the lottery works. Sponsoring radio/video shows are the most widely used promotional tool. The majority of companies using this method are foreign, although there are also Georgian companies that use this tool, especially during interactive radio programs (17). Leonidou et al (1999) surveyed 1 5 Bulgarian consumers’ perceptions of products from five Asian Pacific countries. The most common source of information for evaluating these products was experiential knowledge, coupled with opinions from friends. Information obtained from television, primarily through advertisements and other commercial programs and information contained on the packaging was used fairly moderately in evaluating products made in Asian Pacific countries, while radio and newspapers/magazines were used to a lesser extent. Advertising and media usage literature provides some demographic information about usage of informational sources. Burnett and Paul (1996) surveyed 298 disabled and 71 nondisabled consumers in US and reported that catalogs were first to learn about new products/services, followed by TV and newspapers. In terms of specific media, Shiffman (1971) studied th source of information for elderly and discovered that the elderly rates newspapers as the most important source whereas younger persons rate television as most important. Phillips and Sternthal (1977) researched age differences in information processing and reported that elderly consumers may spend more of their leisure time in media consumption activities than younger persons. However, the elderly prefer media that provide information over entertainment. Methodology The study was conducted among 1 consumers, from Tbilisi, Batumi, and a few in Kutaisi and Rustavi in May and June of 2005. Respondents selected through convenience sampling. 665 questionnaires were distributed and 1 of them returned and response rate is 40 percent. Students from several universities (IBSU, Marketing Department of TSU and ESM, CSB, Faculty of Economics and Business of BSU) took part in the survey and get the questionnaires filled. Eligible respondents were individuals aged 17 and above. Information sources for imported product were only one part of a larger survey which originally designed to assess the country of origin perceptions of Georgian consumers. Data were collected by means of self-administered questionnaires. The questionnaire was first developed in English and then translated into Georgian by a group of university students who have proficiency in both languages. Then, a business professor and a Georgian language professor who are also fluent in English checked the Georgian translation. Finally, Georgian translations of the questionnaire retranslated back to English by another group of students in order to ascertain that it was conveying the exact meaning as originally designed. The questionnaire explored the information sources mostly the customers use for learning about products and the demographic profile of the consumer in terms of gender, age, and income. To evaluate the data Microsoft Excel, SPSS software used. Demographic differences in usage of information sources were determined with a Independent samples t-tests. Research Findings and Evaluations In our survey respondents indicate the usage of various source of information for foreign sourced goods. Table 1 displays the preference for information usage and reliance of Georgian consumers. Note: Mean scores are based on a five-point scale ranging from 1= Usually to 5=Not used at all Nine sources of information for evaluating products sourced from different countries were reported by Georgian consumers, these being: Experiential knowledge, friends’ opinions, shop displays, television, information on packaging, radio, newspapers and magazines, salespeople, billboards (See Table 1). Of these, the source used most frequently was the knowledge gained through personal experience – regular or experimental – with foreign products (1.829). Closely following was the opinion given by friends about these products (2.44), thus underscoring the role of personal influence in formulating COO perceptions. Third in terms of usage frequency was information obtained from television, primarily through advertisements and other commercial programs (2.907). Information contained on the packaging was used fairly moderately in evaluating imported products ( .0 ), while shop displays, newspapers/ magazines and billboards were used to a lesser extent ( .41, .58 and .68 respectively). Finally, salespeople and radio were found to have a much weaker influence on Georgian consumers’ opinions about goods sourced from foreign countries ( .901 and 4.075 respectively). In chart 1 mean scores were inverted from the scale of 1 to 5, to a scale of 5 to 1 to display effect size. The formula used; Usage rate = 5 – ordering score. In examining the effect of certain demographic parameters on the selection of specific information outlets, it was revealed that age played a serious discriminating role (See Table 2). Specifically, older consumers make greater use of experience, information on packages, newspaper/magazines, and salespeople, younger consumers use radio, and billboards more frequently in evaluating foreign goods; four of these information sources showed significant variations between age groups over 5 and below 5, these being friends’ opinion (t = -2. 05, p < 0.05), radio(t = 1.918, p < 0.10), billboards (t = .9 7, p < 0.01), and salespeople (t = 2.166, p < 0.05). Note: Mean scores were inverted from the scale of 1 to 5, to a scale of 5 to 1 to display effect size. ( The formula; Usage rate=5-ordering score.) To discover the difference between younger and older consumers’ usage of information sources, t-test was run on consumers younger than 24 and older than 5. Results exhibited significant variations on five of the information sources for the indicated age groups, these being friends’ opinion (t = 2.9 2, p < 0.01), information on packages (t = 1.774, p < 0.10), radio (t = -1.85 , p < 0.10), billboards (t = 4.040, p < 0.01), and salespeople (t = 2.586, p < 0.01). Education level did play serious discriminating role in information sources usage, too. Consumers with lower level of education tended to rely on friend’s opinion, shop displays, television, radio, newspaper and billboards more highly than university graduates. University graduates expressed more frequent usage of experience, information on packages, and salespeople information. Among them three of these information sources showed significant variations between the ones with university graduates and lower level of education, these being experience (t = -2.0 8, p < 0.05), television (t = 1.612, p < 0.10), and billboards (t = 1.77 , p < 0.10). When examining the effect of gender on information usage, female respondents were found to make greater use of all sources compared to males, the only exceptions being radio; nevertheless, statistically significant differences were observed only in the case of information obtained from friends (t = 1.769, p < 0.10), and shopping displays (t = 2.049, p < 0.05). Interestingly, marital status exhibited significant differences on four information sources, these being information on packages (t = 1.672, p < 0.10), radio (t = 2.060, p < 0.05), billboards (t = 1.914, p < 0.10), and salespeople (t = .81 , p < 0.01). While, information on packages and sales people are applied more often by married consumers, radio and billboards were used by unmarried consumers. . Finally, Income exhibited a significant differentiating effect on only one information source, namely that of television (t = 1.674, p < 0.10) which used more often by lower income consumers. Chart 1 Georgian Consumers Usage Level of Information Sources Note: Mean scores are based on a fivepoint scale ranging from 1= Usually to 5=Not used at all Based on a two-tail two independent samples t-test test for equality of means (Equal variances assumed; where *,**,and ***represents statistical significance at 0.10, 0.05 and 0.01 respectively. Conclusions and marketing implications Findings of the present research in Georgia resemble the findings of Leonidou et al (1996) in Bulgaria. Consumers in both countries give more importance to experience and friend’s opinion. This can be explained with a similar historical process they have undergone. The fact that Georgian consumers rely primarily on experiential knowledge in assessing imported products implies that managers in the region should adapt their marketing strategies, not only to give the consumer the opportunity to experiment with their products through give-aways, eye-catching displays, and free trials, but at the same time to form the best possible image of their products. Moreover, the heavy reliance on the opinion of friends as product information sources necessitates the identification of opinion leaders in Georgian society who will be the target of suitable communication strategies stressing the positive aspects of imported goods. Power of word of mouth communication can accelerate product adoption and the experience of first users of the products will be communicated faster toward majority consumers. Further, despite its moderate impact as an information outlet, the role of television should not be underestimated, since it is gaining momentum as a communication medium in Georgia. Marketers are recommended to use TVs and newspapers for advertising because of the effectiveness of these two tools. Billboards availability and consumers usage rate make them another attractive advertising medium. Advertising targeting low income consumers should focus particularly on flea markets, outdoor farmers’ markets, public transportation, direct contact and leaflet distribution in residential blocks, and TV commercials, soap operas, news, and sporting events. Advertising for relatively rich customers should focus on supermarket presentations, the sponsoring of TV and radio programs, advertising banners in the streets, direct contact in restaurants, distribution using fax and e-mail messaging, and advertising on the internet. References 1. 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