As it has been mentioned throughout the previous sections, the literature review represents the research conducted through secondary sources. The information is divided into six distinct sub-sections as follows:
2.1. Consumer behaviour
2.2. Maslow's hierarchy of needs
2.3. The product brand
2.4. Elements in the coffee purchase decision
2.5. The coffee industry and the coffee market in Thailand
2.6. The ability of advertising and marketing to stimulate coffee purchase
2.1. Consumer behaviour
Customer behaviour can be understood through two different lenses. At the first level, there is the actual reaction of customers in response to a certain product or service. At a secondary level, there is the analysis of the customer behaviour in order to better understand the clients. A highly comprehensive overview of customer behaviour is offered by (Perner, 2010). He stated that the official definition of customer behaviour states that the concept refers to the "study of individuals, groups, or organisations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society" (Perner, 2010).
According to Perner (2010) there are four major applications of consumer behaviour, as follows: marketing strategy, public policy, social marketing and consumer beliefs.
a) Marketing strategy
Knowledge of customer behaviour allows the companies to better understand the behavioural mechanisms of the customers' decisions, which in turn allows the company to develop marketing strategies tailored to customer behaviour. Two examples are relevant in this sense. The first is given by the realisation that people respond better to foods advertisements when they are hungry. Due to this, the company will air its advertisements for snacks products late in the afternoon.
The second example is given by the realisation that whenever a new product is launched onto the market, customer purchases will tardy until the clients are convinced of their necessity for the product or of the product quality and functionality. The company will as such recognise the following:
The necessity to satisfy the initial customers due to their ability to influence future purchases
The necessity to own additional financial resources on which to fall back until the sales of the new product pick up.
b) Public policy
This application refers specifically to the reactions of consumers in regard to a certain product or service. In a context in which an item causes threats upon the health of the population, it is most likely that policies would be created to better manage the sale of the respective product. A most relevant example in this sense is constituted by Accutane, an acne product with great results, but with great side effects on fetuses. Policy was issued to ensure that the product labels contained graphic representations of the side effects.
c) Social marketing
Social marketing refers primarily to the passing of important information to the customers, rather than convincing them to purchase a specific item or to cease a specific behaviour, when these two solutions are not feasible. One relevant example in this sense is constituted by the situation of illegal drug use and the rooted practice of needle sharing, which led to the propagation of illnesses. As Marty Fishbein, marketing professor at CDC (the Center for Disease Control and Prevention), realised that the stoppage of the situation was impossible, he created a strong marketing campaign which encouraged users of illegal drugs to clean the needs in bleach before sharing them. The solution was deemed more realistic.
d) Consumer benefits
Finally, the ability to understand customer behaviour leads to a series of consumer benefits, such as an enhanced ability to assess several elements of the purchase. Perner (2010) stated that:
"Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you should pay less per ounce than if you bought two 32 ounce bottles. In practice, however, you often pay a size premium by buying the larger quantity. In other words, in this case, knowing this fact will sensitize you to the need to check the unit cost labels to determine if you are really getting a bargain."
2.2. Maslow's hierarchy of needs
A specific means of assessing customer behaviour is offered by the lenses of motivation. In other words, reputable members of the academic community argue that consumer behaviour is directly linked to motivation. Mowen and Minor (n.d.) suggested that the decision to purchase -- either studied or impulse -- is determined by the motivation of the individual to own possessions that ensure his ability to meet his physical needs, to feel safe, to belong to a group, to improve his self-esteem and to support his self-actualisation. In other words, each purchase decision can be linked to a specific level in Maslow's hierarchy of needs.
The motivation refers to an internal state within the individual and this internal state will convince him to make a purchase or not. The motivation commences with the realisation of a need, which will eventually determine the behaviour of the customer. The need can be innate or developed, but it is never fully satisfied. Additionally, the need is associated with emotions, which can be exploited by economic agents to stimulate a purchase decision (Mowen and Minor, n.d.).
According to MacNeill (1993) is also one of the authors to support the theory of the strong link between motivation and purchase decision. She argued that Maslow's hierarchy of needs constitutes the most effective starting point in the analysis of customer behaviour. The image below presents the five distinctive categories of needs as they were identified by Maslow:
Figure 2.1: Levels of need in Maslow's hierarchy (Lebon, 2006)
At any given time, the individual consumer can find himself at any of the five levels in the hierarchy and his position can change based on economic, personal, cultural or otherwise forces. As a general specification, the behaviour of the individual is influenced by the closest need. From the specific standpoint of the customer, the following elements are noteworthy at each level:
a) Physiological needs
At this level, the consumer is concerned about the following:
The retail price of the product or service, in the meaning of their fairness and reasonability
The durability of the goods considered for purchase
The warranties or guarantees associated with the product -- their existence and features
The potential damaging effect of the product onto the individual or his family
b) Safety and/or security needs
The location of the business in a safety place
The availability of parking places
The ability to access the business during conventional working hours
The approach to be taken in case the customer needs to contact a company representative outside the working hours
c) Social needs:
The quality of the services
The politeness and friendliness of the staff members
The product's impact on the customers' ability to make and/or retain friends
The popularity of the product / service within the peer group
d) Esteem needs:
The individual treatment of the customers by the company employees
The recognition of the purchase as an intelligent one
Employee appreciation for the customer's patronage
The status gains from the purchase of the respective item
e) Self-actualisation needs
Finally, at the level of self-actualisation needs, the customers are concerned about the following:
The ability of the product / service to help the individual gain a better understanding of the world
The openness and flexibility of the firm to customize the item so that it fits the specific needs of the customer (MacNeill, 1993).
2.3. The product brand
Despite the fact that specialised opinions vary in most circumstances -- the differences in opinion may vary due to different standpoints taken, the usage of different variables and so on -- the members of the academic field tend to agree on the great role played by brand in the customers' purchase decision. The brand is the image of the company or the product; it represents the guarantee of high quality and commitment to customer satisfaction. The organizational brand is a major component in the attraction and retention of customers. Additionally, a strong brand will allow the company to increase its palette of loyal customers, and as such its revenues. To better explain, loyal customers -- once they are formed -- are easier to satisfy and attract. This virtually means that the company does not have to spend large sums of money on aggressive marketing campaigns to attract new customers, but it can reinvest these sums in other profit generating endeavors (Dacko, 2008).
Aside reducing the advertising costs, a well developed and implemented loyalty program generate a series of other advantages, such as the following:
The generation of additional sales through world of mouth
The values of the sales, as well as the volume, increases
Supports the development of fruitful business partnerships (Loyalty Lock, n.d.).