TWO APPROACHES IN HAGGLING: A KOREAN MARKET PERSPECTIVE

서지정보

ㆍ발행기관 : 글로벌지식마케팅경영학회(GFMC) ㆍ수록지정보 : GFMC Session1
ㆍ저자명 : Kyoung-Nan Kwon, Yoo Jin Kwon

영어 초록

Bargain shopping provides financial benefits and psychological pleasure to shoppers. Bargain shopping is fundamentally responsive behavior in that shoppers respond to various deals offered by retailers or manufacturers in the form of coupons, in-store discounts, or rebates. No matter how actively shoppers search, there are no deals available unless manufacturers or retailers offer them. This type of bargain shopping is found in most countries in the world that adopt market economy system. Haggling is another form of bargain shopping, which involves a process of direct and active price negotiation between a shopper (i.e., buyer) and a seller. Haggling is rarely found in institutionalized retail systems of Western countries. In Asian countries such as South Korea, it is customary to negotiate for lower price not only with street vendors or in free-standing stores in traditional market places but also in the conventional retail stores located in metropolitan shopping areas. In Korea, even foreign travelers are often advised not to buy at the initial offer price. The travelers experience difficulties negotiating with sellers because they rarely have such haggling experience in their own cultures. We view haggling as another form of bargain shopping that is uniquely observed in Asian cultures. However, it has been hardly researched in mainstream marketing literature. The purpose of our study is to explore the nature of haggling experience from a shopper’s perspective. Uncovering the underlying dynamics of the haggling process will provide rich insights into the understanding of retail markets of Asian countries. A qualitative interview was conducted with eighteen individuals who were known as or who reported to be a good haggler. Ten participants were male and the rest were female. Participants’ age raged from 20 to 27 years old. Fourteen were college students and all but one were Koreans. Interviews were conducted in Korean except for the one international exchange student. Semi-structured interviews were conducted for about an hour with each individual. Data included their experiences of shopping including haggling, strategies to obtain good deals, and feelings of bargaining. Interviews were audio-recorded and transcribed verbatim. Data were analyzed with open coding and a focused coding method. Participants reported they haggled over the price of various goods including clothes, consumer electronics, and mobile phone in various retail shops except for department stores and high-end brand stores. Even the foreign participant mentioned they haggled with sellers otherwise she would have felt being ripped off. The first theme emerged is that haggling is grounded on consumer’s shopping capital. It seems natural for Korean participants to engage in the price negotiation. They had informally learned effective haggling from their parents and older siblings during their childhood and from peers and friends after they grew up. They reported that they learned to haggle otherwise they would be overcharged. They develop various skills based on their own and other shoppers’ experiences. This learning process reflects the role of shopping capital in haggling, context-specific form of human capital (Kwon & Kwon, 2007; Ratchford, 2001). Consumers hold various levels of shopping capital. Shoppers employ different shopping strategies to maximize their shopping value depending on the degree of the possession of shopping capital (Kwon & Kwon, 2013). Likewise, haggling is bargain shopping that utilizes their holdings of shopping capital for financial benefits. Hagglers negotiate for better prices using the knowledge and skills that they obtained, accumulated, and updated over time. Hagglers hold a set of skills, such as pretending not to have much interest, or starting from an unreasonably low price and going upward rather than downward in negotiation. The shopping capital applied in this type of haggling is considered as general, including product knowledge, retail system, and price and promotion information, which is transferrable to other shopping contexts. Competitive disposition was observed in haggling drawing upon shopping capital. These hagglers stated that they felt a sense of accomplishment and had a pride of having expertise and control over the negotiation process. One participant mentioned haggling as a “zero-sum game.” Haggling is to buy at the lowest possible price and win over the seller or other shoppers. The second theme emerged is that haggling is grounded on consumer’s relationshiporiented disposition. The focus of relationship-oriented haggler was less on their expertise and shopping knowledge. They pursued good deals drawing upon the relationships established over time and/or the feelings of closeness and relatedness with the sellers at the point of sales. This type of hagglers makes conscious efforts to build and maintain good relations with the sellers of the stores that they patronize. Participants stated that they sometimes stop by the store just to say hi. The recommended the store to friends and brought it up to the sellers on their next visit. In the case of shopping at a new store, they tried to make good impressions by smiling, having good manners, or talking kindly to the seller. One participants stated that he tried to create a sense of connection with the seller by asking personal questions: “where are you from?” “What high school did you go to?” “Where do you live now?” “Do you watch X drama?” This feeling of connection provides the foundation for friendly negotiation and makes it difficult for the seller to say no to their request for discount. Cooperative disposition was observed in relationship-oriented haggling. These hagglers view the negotiation process as a way of obtaining the outcome that benefits both parties (i.e., shoppers and sellers). The lowest possible price is not the goal of their negotiation. Their goal is to reach the optimal price point that is cheap enough for the shopper and, at the same time, that yields a reasonable profit to the seller as well. Seeking for the mutual interest is the most distinctive aspect of this deal shopping, in contrast to the competitive disposition of shopping capital-based hagglers. Relationship-oriented hagglers emphasized the importance of trust. Even in the stores that they visit first time, the hagglers determine whether they can trust the seller based on their appearance and manners of conversation. Feelings of trust appear to be the necessary condition to proceed to the negotiation process in pursuit of reaching at the price point that benefits both parties. This cooperative disposition of haggling reflects the value of Asian culture emphasizing the harmony and interdependence among the members of a social system. The two types of haggling discussed above, the competitive shopping capital-based and the cooperative relationship-oriented haggling, should not be understood as mutually exclusive categories. Although some participants showed a strong tendency of one or the other category, a good number of participants appeared to take hybrid approaches of a goal-driven competitive disposition and, at the same time, being considerate of the seller’s interest. The findings present implications for understanding the intertwining nature of global and local consumption. The former type of haggling is based on the human capital that is applicable in the global consumption context as well as in multi-shopping channels. Savvy shoppers from any corner of the world would shop at global shopping sites (e.g., Amazon.com) based on their shopping capital. They also adeptly shop while traveling abroad. On the other hand, the latter type of haggling is based on performance of interpersonal communication in the local shopping context, mostly at brick-and-mortar retail stores that adopt free-price system. Because this distinctive type of haggling requires face-to-face contact, it is mainly applicable to local shopping experience. However, some online shopping sites began allowing price negotiation through chat rooms, we believe that the utility of relationship-oriented haggling would be more extensive in the global context in the future, which warrants further studies. Our study is one of the first scholarly efforts that attempt to explore the nature of price haggling in retail contexts. The two distinctive approaches of price negotiation appear to utilize different sources of expertise and have different assumptions based on and goals to achieve. These findings of Korean retail market can provide a foundational understanding toward more broad explorations of unique haggling behaviors in various Asian cultures. More future research is suggested in other Asian countries related to this topic.

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