John Sum , Mario W.T. Liao

1. John Sum, Mario W.T. Liao A SEM for the Purchase Intention of Video Game Consoles Institute of E-Commerce, National Chung Hsing University, Taichung 40227, Taiwan

2. Outline • Introduction • Objective of study • Methodology • Background Survey • Conceptual Model • Analysis • Preliminary analysis • Competitive models • Model Identification • Findings • Conclusions Purchase Intention Model for VGC

3. 1. Introduction • Popular home video game consoles (VGC) • Microsoft XBOX360 • Sony PlayStation 3 • Nintendo Wii Purchase Intention Model for VGC

4. “*” Source: Interbrand.com. Purchase Intention Model for VGC

5. 1. Introduction Source: http://www.vgchartz.com/ Purchase Intention Model for VGC

6. 1. Introduction Price Product Char. Purchase Intention Compatibility Brand WoM Objective of Study Theory Development Purchase Intention Model for VGC

7. Model Conceptualization Literature survey for factors influencing purchasing intention Professional games players opinions Preliminary Analysis In prior to Step 3 Small sample size Pilot study on the research model Model Validation In Step 5 Competitive analysis with other possible models Based on GFI and related indices

8. 2. Survey • Price • Limited budget on purchase intention (Gray M. Erickson and Johansson 1985) even in intrinsic attribute information (Mitra 1995). • Acceptable range when consumers purchase products (Dodds, 1991) • Product characteristics • A measure for purchase intention (Lyman E. Ostlund 1974; Susan L. Holak 1988; Rosemary R. Seva, Henry Been-Lirn Duh et al. 2007) • Specialized product characteristics can be more attractive and influences purchase intention (Dhar and Sherman 1996) • Compatibility • Associated with how the product fit with consumers’ behavior patterns, life-styles and values (Rogers 1983). • A measurable indictor on purchase intention for durable and non-durable technology products (Peter C.R. 1979, Labay and Kinnear 1981). Purchase Intention Model for VGC

9. 2. Survey • Word-of-mouth communication • Communicate the product (and services) information among consumers (Robert East, Kathy Hammond et al. 2007) • Purchase intention is governed by WOM recommendation sources is (Patricia A. Goering 1985). • NWOM will generate negative messages about product through interpersonal channels (Herr, Kardes et al. 1991, Maheswaran and Meyers-Levy 1990) • Brand • Brand is a substantial effect on purchase decision making when product quality is uncertainty (Chu;, Choi; et al. 2005). • The brand is a collection of name, term, and symbol representing producer and is determined as being distinguishable from other corporations (Kolter 1999). • Brand image is associated with brand. It has been recognized as an important concept in marketing (Gardner and Levy; 1955). Purchase Intention Model for VGC

10. 3. Research Model exogenous latent variables endogenous latent variables Purchase Intention Model for VGC

11. 3. Research Model Notations ξ1 : Price ξ2: Product Char. ξ3: Compatibility η1: Brand η2: WoM η3: Purchase intention Purchase Intention Model for VGC

12. 3. Research Model Purchase Intention Model for VGC

13. 4. Analysis Purchase Intention Model for VGC

14. 4. Analysis • Preliminary analysis – 100 Samples • Scale Measure • Composite Reliability (CR) • To measure items whether to be internal consistency on the variable. • The value of items above 0.7 is an acceptable. • Average Variance Extracted (AVE) • To measure the total variances in the indicators which estimated by latent variables. • The value of items above 0.7 is an acceptable. Purchase Intention Model for VGC

15. Standardized factor loading, internal composite reliability and average variance extracted of the scale Purchase Intention Model for VGC

16. 4. Analysis Preliminary test result (GLS, 100 Samples) Price  Purchase Intention (Not Sign.) Price  Brand (Not Sign.) Compatibility  Purchase Intention (Negative Impact) Purchase Intention Model for VGC

17. Purchase Intention Model for VGC

18. 5. Model Identification • Model fit indices • Goodness-of-fit index (GFI), • Adjusted goodness-of-fit index (AGFI), • Parsimoniousgoodness-of-fit index (PGFI), • Root mean residual (RMR) • Root mean squared error of approximation (RMSEA), • Comparative fit index (CFI), • Normed fit index (NFI), • Significant determinant • Explanatory power • Squared multiple correlation (SMC), Purchase Intention Model for VGC

19. 250 samples Gender Male: 162 Female: 99 Age < 20: 25 21-30: 190 31-40: 35 Experience on VGC < 1: 34 2-5: 46 6-10: 115 >11 : 55 Occupation Student: 172 Private sectors: 26 Govt. agencies: 10 Freelance: 36 Professional players: 6 5. Model Identification Purchase Intention Model for VGC

20. 5. Model Identification The structural model results for Model 1ML • Results: • All hypotheses are significant except H8a. • The brand is affected extremely through WoM communications. Purchase Intention Model for VGC

21. 5. Model Identification The structural model results for Model 1GLS • Results: • The results is the same as Model 1ML. • The model performance is the poor in the relative to model 1ML. Purchase Intention Model for VGC

22. 5. Model Identification The structural model results for Model2ML • Results: • The model performance is well but its explanatory power of purchase intention is somewhat poor in comparison to Model1ML. Purchase Intention Model for VGC

23. 5. Model Identification The structural model results for Model2GLS • Results: • The residuals are somewhat higher in relative to Model1ML and Model2ML except for GFI. • The explanatory power of word-of-mouth communication is poor for predicting purchase intention. Purchase Intention Model for VGC

24. 5. Model Identification The structural model results for Model3ML The structural model results for Model3GLS • Results: • In either model, its significant impact are not found except for H1a • Both performance of model are extremely poor. Purchase Intention Model for VGC

25. 5. Model Identification The structural model results for Model4ML The structural model results for Model4 GLS • Results: • In either model, the residuals are poor above the average. • Both explanatory power on purchase intention are better in comparison to Model3. (Model4ML:SMC (PI)=20%; model 4GLS: SMC (PI)=13%) Purchase Intention Model for VGC

26. 5. Model Identification Purchase Intention Model for VGC

27. 5. Model Identification Purchase Intention Model for VGC

28. 5. Model Identification Yet another alternative Purchase Intention Model for VGC

29. 5. Model Identification For example, The direct effect of price toward purchase intention is 0.26 and the indirect effect through brand is calculated by multiplying an effect the price on brand and an effect the brand on purchase intention: 0.22*0.22=0.05. Consequently, the total effect between price and purchase intention is 0.26+0.05=0.31. Purchase Intention Model for VGC

30. 6. Findings Purchase Intention Model for VGC

31. Conclusions • Brand • Perceived quality of a VGC • Word-of-Month Communication • Professional players opinion • No direct impact on the purchase intention • Compatibility should not be a focus on marketing strategy • Professional opinions (blogs) should be adopted as a strategy to boost the sales of a VGC. Purchase Intention Model for VGC

32. Conclusions • Evaluation copies should be released for professional players to assess. • Official forums or blogs should be set up for them to discuss and feedback on those VGCs being evaluated. Purchase Intention Model for VGC

33. Further questions: John Sum, pfsum@nchu.edu.tw THANK YOU!