Relationship between consumer behavior and AR based marketing campaigns

compared to traditional marketing campaigns

Literature Review
Sometimes augmented reality (AR) is inappropriately interchanged with the idea of
virtual environment or virtual reality (Milgram and Kishino, 1994). Both of them
constitute to the modern trend in digital technology and belong to mixed reality such
as merging and consolidation of virtual and real worlds. However, virtual and physical
objects interact, support and complement to each other (Ohta and Tamura, 2014). AR
enhances a interaction of user with reality via a simulated circumstance even though it
is being associated with virtual reality. Alternatively, virtual reality technology
involve user in an artificial environment completely (Fuhrt, 2014). AR enables users
to associate continuously with the surrounding world along with additional sounds
and sights that are coordinated to the right location compared to 3D orientation of a
user to a geographic locale (Pavlik and Brideges, 2013). AR is assumed as a
component of mixed reality continuum as shown in figure below. AR aims aims on
amplifying the real world with additional digital information rather than employing
real-world data into virtual worlds (Azuma, 1997). Hence, AR focuses to augment the
real world instead of generating a synthetic environment entirely in which peoples
engage themselves and forget the sense of space and time (Olsson, et al., 2011).

Figure 1 Mixed reality continuum (Source: Milgram & Kishino, 1994)

They key initializing point for AR arises in the year 1990 when scientists created for
the first time called augmented reality. A high-tech advancement decrease of
associated expenses spread over the worldwide due to internet, presence of GPS,
portability of technology and raised mobility have lead to raise both importance and
utility of AR. The evolving trend of AR gets backing by data of Google Trend that
observes around a more than 400% interest in the last decade as shown in below
figure.

Figure: Augmented reality in Google Trends (Source: Google Trends)

The modern trending term of the digital world which improves the physical world
with digital data called AR. Its evolving ubiquity is broadcast in the developing media
coverage such as business magazines (Forbes, 2017; Business Insider, 2016; Wall
Street Journal, 2016), trade papers (Handley, 2013) and national newspapers
(Süddeutsche Zeitung, 2017; NY Times, 2016; Corriere della Serra, 2016). Once the
mobile application such as Snapchat and Pokeman Go become success among the
masses of consumer globally that was developed using AR,the brands as well as the
media and venture capitalists from all types of sector took into account. Firms as
diverse as Wayra, Disney, Alphabet, Facebook and Apple are funding millions into the
formation of advance AR applications for getting a new entry on Business Insider
(2016) i.e. getting entry to the next level in evolution of platform. Venture capitalists
such as Presence Capital, Y Combinator and Rothenberg Ventures have also
identified the capability of AR and have started obtaining many promising start-ups
related to AR (Recode, 2017). In reality, Digital Capital (2016) predicted the funding
into AR to increase the earning to $90bn by the year 2020. This means surpassing the
funding into virtual world which builds up a digital world completely by shutting off
the physical world by $60bn approximately. Few experts have asserted that the
growing hype in AR in the current years is because of the capability it develops when
integrated with mobile accessories (Yaoyuneyong, 2016; Craig, 2013). Nowadays,
most of technologies needed for application of AR have become inherent to modern
user devices.For example, the most conspicuous device that have become inherent is
camera which serves as a portable window enabling consumers to access virtual data
entrenched into the real world via a software interface (O’Mahony, 2015). Once AR
applications become restricted to ad hoc contexts broadly in which environmental
factors were regulated, domestic location sensors such as GPS integrated with a
communication capacity that of high bandwidth facilitate the adoption and growth of
mobile AR systems (O’Mahony, 2015; Takacs, 2011; Kangas,2002). Moreover,
consumers are not required to obtain more tools for executing an AR system as most
of consumers have their own mobile devices nowadays. This might raise the
possibility of their implementation considerably. Actually, Juniper Research estimated
the AR system market to create turnover of $6bn by the year 2012 (MarketWired,
2016).

Unlike the environment, medical and educational sectors, marketing has only become
an major interest for AR experts currently. Companies like BMW, who was the first to
conduct AR marketing campaign in 2008 to grab attention of consumers have now
started researching with AR applications (Berryman and Hoy, 2012). After BMW
started investigation, experts then started to examine how efficient the AR for
marketing is. Bulearca and Tamarjan (2010) who was the first to investigate AR in the
field of marketing explored how experimental marketing of AR could increase brands
by raising word-of-mouth and brand loyalty. On the other hand, Spreer and Kallweit
(2014) determined how AR could enhance the assessment of information during the
point of sale. However, Javornik (2016) investigated how users acknowledged to AR
media features. Huang (2015) researched with user in terms of AR through online
descriptive consumer behaviour. Other experts suggested to consider heuristics when
forming an AR advertising campaign (Scholz and Smith, 2016; O’Mahony, 2015).
Ultimately, Yaoyuneyong (2016) observed that customers like AR print marketing
compared to conventional print marketing. Dacko (2016) provided insights about how
mobile AR devices can facilitate the user with additional value in the retailing sector.
Javornik et al. (2016) observed reactions of users on an AR I.e. magic mirror in a
retail outlet. Finally, it can be concluded that four different strategies to experiment
AR have evolved in AR marketing study. Few experts proposed the theory from an
perspective of an operational marketing who try to explore the observational value
stimulated by AR (Dacko, 2016; Yaoyuneyong, 2016; Bulearca and Tamarjan, 2010).
Alternatively, other experts aimed to analyse the behavior of consumers based on AR
(Javornik, 2016; Poushneh and Vasquex-Parraga, 2017; Javornik, et al., 2016).
Further, AR study has focused on how marketers must implement AR (Scholz and
Smith, 2016; O’Mahony, 2015). On the other hand, how users perceived AR (Kallweit
and Spreer, 2014). Though AR plays significant role with respect to behaviour of
customer, but only few evidence is known about the impact of AR on decision making
of consumer. Though the purchase decision refers to the ultimate objective of all
marketing events and contributing in turnover for the brand. This gap was filled by
determining the impact of AR on the investigation and assessment behaviour of
customers at the time of decision making procedure of consumer. It was also argued
that during assessment and investigation,consumers are highly susceptible to
observational and informational impacts. This means the time in which consumers set
up their minds about a brand and product (Kollat, et al., 1970; Shocker, et al., 1991).
Alternatively, it was argued that the effect of AR would be strongest at the time of
decision making procedure in which consumers actively investigate and consider
information related to brand. Thus, this paper focus to explore how the
implementation of AR in marketing campaign effects the investigation and assessment
of consumer during decision making procedure.

Expanding Reality and Self Confirmation: The impact of Augmented Reality on

the Psyche

As per research paper which implemented a control group and an observational group
of consumers, it was found that AR has an significant influence on the hedonic
behaviour of consumers. The augmented idea of a product in relation to holographic
communications had impacted the hedonistic view of augmenting people.
Watching a video or observing a product are external catalyst. Expectations cannot
experience how consumer feels after having the product in their hands, to implement
it and to observe it in their house among other decoration and furnishings. Hence,
consumers cannot build an emotional relation with the product.
Alternatively, a simple AR experience of putting a holographic armchair in their
drawing room would favorably influence the decision of consumer to purchase the
product.

Filling up the Gap between Actual and Intention Purchase

Another research concerning the impacts of AR on behaviour of consumer observed
that higher number of people who practically attempted on a product decided to
purchase it compared to consumer who were exposed to conventional marketing
approaches.
More precisely, the research observed that AR is most efficient at the time of
evaluation and search phases of the purchasing process. Conventional marketing
approaches consists of written product testimonial and descriptions. AR marketing
practically places the product in the hands of prospects by enabling them to determine
it and build their own conclusions on its quality and benefits.

Key Influences of AR on the Purchasing Decision

By provoking an emotional feedback to the product and providing them logical data
about it, AR generates a propitious immersive surrounding. This surrounding
encourages:
1. Product Education
The logical part of the purchasing decision is favorably effected by having a
experiential involvement with the product. Customers can explore the product (I.e.
makeup, clothes, furniture, etc) by dealing it with personally i.e. how simple it is to
implement a product, what advantages it facilities and how good the product in terms
of looks.

2. Brand Perception
People purchase the products from brands which they trust. Nowadays, trust has
become a difficult problem which includes good reputation and the capability of a
brand to facilitate consumers a higher degree of shopping experience. AR is the most
significant way to employ a product and become friendly with it while determining
the right color, size and other customizations.
3. Emotional Attachment through Experience
The reason why the purchasing decision have become faster after employing a
product in AR was that customers build an emotional bonding with it. They observe
its advantages and anticipate how much simple their life could become if they
purchase the product. Hence, AR is a best friend of marketer in accelerating up users
on the conversion medium. In the mean while, it is a beneficial device for users to
build their own concepts about a product both emotionally and logically. For this
reason, AR is considered as one of the most frequently implemented marketing
devices for retail and other sectors.

Consumer Attitudes and Behavior

Consumers are ordinary peoples who like to be involved in activities associated with
the purchase of goods or services. Thus, the psychology of the customers refers to
the similar types of problems as psychology in general such as cognition and
memory, emotion and affect, decision and judgement and group dynamics. It is
evident that customer psychologists implement the findings, theories and concepts
of general psychology particularly of social psychology to describe the behaviour of
the customers.
Consumer Behaviour
There is general definition that behaviour of consumers refers to first and foremost
to the act of purchasing a product or service. However, this does not refers to the
behaviour of interest towards customer psychologists. Based on information
associated to a buying decision, choosing of service provider or retail outlet and
other activities performed are refers to a service of purchase. For instance, the act of
purchasing a washing machine. Based on purchase, customers might search for
suitable information through online, consult coworkers and friends, read customer
reviews and interact with their spouse or partner about the options. The information
accessed might confined the decision of brands and manufacturers to a certain point.
At this point, the customers might visit other local showrooms to see the various
brands and discuss with the sales representatives about the replacement of old
washing machine, delivery times, installation, warranty, prices and so on. Ultimately,
the customer choose a particular brand and place an order.
Customer psychology is related to all factors of the purchase decision of customers
but limit the focus during the investigation due to some practical reasons. Hence, the
factors of behavior are chosen based on the interest of behaviour of consumer. Each
of the behavior consists of a choice even if the alternative option is not considered
and hence regulating the status quo. Nevertheless, it is relevant to differentiate the
behaviors that aims on a single choice and behaviors that comprise of a option
among two or more individual alternatives. As the example of washing machine
explains, majority of purchase decisions consists of both forms of behavior such as
decision to purchase or not to purchase a new washing machine aims on a single
alternative. In the other hand, the decision to purchase a particular brand of washing
machine out of multiple choice refers to selecting a option among multiple options.
However, behavior consisting of multiple options are ultimately minimized to a single
alternative decision. After reviewing the initial stage, the customer either purchases
or does not purchase a particular brand of product. Thus, this study will first aim on
single-option behavior and then involve additional issues associated with the
estimation and determination of purchase decisions based on multiple alternatives.

Single Option Behaviors

Any particular example of a behavior refers to an observable activity that occurs in a

certain situation and at a specified point of time. Additionally, buying behaviors are
also supervised at certain target particularly a brand or product. Thus, it is relevant to
consider purchase behavior that comprises of four components such as the action
conducted (searching for relevant information), the goal at which the action is
supervised ( brand or the product classification), the situation in which it is
conducted (online retailer) and the time at which the action is conducted. Each of
component of purchase behavior can be refers to varying degree of specificity or
generality. If the author decide to gather information about to what extent does the
the consumer search for information (action) about a particular product (target)
through online (context) on a specified point of time (time), all elements refers to a
high level of specificity. In such case, the behavior refers to be a less significant
theoretically. A more relevant criterion might aim on searching for information online
about any type of product within the next two weeks. Here, the action component
i.e. searching for information and the context component (online) remain constant
but the time component i.e. two week duration has been expanded and the target
component have been widely generalized to consider all categories of product.
Alternatively, the author might be interested in exploring for information about
automobiles for the next six months. In this case, the action component i.e.
searching for information remain same but the target component is based on
automobiles which is narrowly described, the context component is not restricted
only for online search but also involves visiting to showrooms, reading automotive
magazines or consulting Customer Reports and the time component has been
extended to six months. The important point to be noted is that observed behavior
might vary based on the specified definition that is being implemented. Hence,
customers might act individually when they search for automobiles over life
insurance policies and varied models of information search might take six months of
time to make a purchase decision. To investigate a wider classification of behaviors
such as information search, the author need to obtain information that generalizes
the time, context and target components. This requires that the author obtain or
observe self reports of information search in relation to various types of products
using various media for an expanded period of time.
Choice Behaviors

Numerous studies observed that the single option behaviors can be investigated at a
higher degree of generality. In reality, objectives of theoretical implication are usually
developed at a fair level whether customers will opt for the decision to purchase or
not to purchase a product. Objectives based on behaviors that consist of a option
among two or more alternatives are usually investigated at a low degree of
generality. Hence, the author might be interested to determine why consumer
purchase one brand of product compared to the customers who select one option
among multiple alternatives. However, the author should clearly explain the target,
time, context and target components of the behavioral options. The decision to buy
products from one brand instead of another can be influenced by the target
component.

DETERMINANTS OF CONSUMER BEHAVIOR

A purchase decision challenges the customer with a host of potential confronts. Most
significant is the structuring of problem that happens before making a purchase
decision such as becoming aware of the requirement or accessibility of a new
product, gathering information about the choices, determining possible future
activities and other contexts appropriate to the buying decision and involving likely
outcomes probable on the decision. Once structuring of problem is done, the
customers requires to execute the gathered information, opt a preferred course of
action and employ the decision at an relevant opportunity. Ultimately, customers can
implement feedback appearing from a purchase to reconsider their decision I.e. by
returning a purchased product to the outlet. This information might be valuable
while making purchase decision in future.

MULTIATTRIBUTE DECISION MODELS

One approach to consumer behavior is grounded in behavioral decision theory (for

reviews of this
literature, see Goldstein & Hogarth, 1997; Shafi r & LeBoeuf, 2002; Slovic et al.,
1988). With its roots
in economics and statistics, the starting point of this approach is a rational model
of choice behavior.
Th e decision maker is likened to an intuitive statistician who carefully considers
the alternatives
and makes full use of all available information in accordance with normative
principles of
probability and logic (Peterson & Beach, 1967). When faced with a choice among
competing brands
or products, consumers are assumed to fi rst identify the attribute dimensions
relevant to the decision.
Each option is then evaluated on these attributes to reach a decision.
Consider, for example, consumers trying to decide whether to buy a picture tube
(CRT) or a
fl at panel (LCD) television set. Certain attributes, such as the dimensions of the
display, warranty
period, and location of dealer may be irrelevant as they are the same for the two
products. Th e
comparison may therefore rest primarily on such attributes as picture quality,
price, reliability,
and visual appeal. Imagine that in a particular consumer’s eyes, CRT sets are
relatively inexpensive
with proven reliability, moderate picture quality, and low visual appeal whereas
LCD sets are
expensive and without proven reliability, but have high picture quality and high
visual appeal. To
make a decision, the consumer must derive an overall evaluation of each product
category in terms
of the combination of attributes that characterize it. In the basic multiattribute
model, this overall
evaluation is assumed to be a weighted average of the subjective values or
utilities associated with
the individual attributes. Th at is, each attribute dimension is given a weight
representing its subjective importance to the decision (with the restriction that
weights add to one) and the product
is given a value for each attribute.1 Th e subjective utility of each product is
obtained by summing
the weighted attribute values for that product, and the product with the highest
subjective utility is
chosen (see W. Edwards & Fasolo, 2001).

Research Methodology

In this chapter, the different types of techniques implemented for explaining how
consumer behaviour can be influenced by AR will be discussed. First, the section
begins with research philosophy followed by research design and approach. Then, this
section will talks about how data will be collected, types of statistical analysis used
will be discussed.

Research Philosophy

The research philosophy is a initial component for constructing a research as it

underpins the assumptions of authors. As per Saunders, et al (2007), the research
philosophy can be classified into six types such a pragmatism, objectivism,
subjectivism, interpretivism, realism and positivism. Out of six philosophical strategy,
the researcher can implement only one strategy in their study.
In this study, positivism philosophical strategy will be implemented as it enables the
researcher to implement existing theory for formulating hypotheses.These hypotheses
will then accepted or rejected based on analysis. The key aim of using this strategy
under marketing research is to develop causalities that facilitate the estimation and
description of the AR marketing concept.

Research Design

As per Malhotra and Briks (2007). a framework for performing a marketing study
refers to research design. This can be categorized as conclusive or exploratory or
casual. For this study, casual design will be implemented. From the name itself, it can
be implied that the study will be based more on cause and effect associations. This
design is relevant to explore the behaviour of relation among AR and consumer
behaviour. This design is often implemented to examine hypotheses (Malhotra and
Birks, 2007).
The design can be classified based on the time horizon as longitudinal or cross-
sectional. Though the study is based on time-constrained, the cross-sectional will be
appropriate form. It includes the gathering of data from a given sample (Saunders, et
al., 2007).

Research Approach

Research strategy can be divided into two form i.e. induction and deduction. In case
of deduction form, first theory and hypotheses are formulated and then a research
approach is constructed to examine the hypotheses. In case of induction form, first
primary information are retrieved and then the theory is formulated. In this study,
deductive approach will be employed as the deductive is related with a positivism
philosophy and follows the theoretical process to collect data.
Another characteristic of deduction form is generalization of information. The results
of this study will presents regularities in behaviour of consumer can be statistically
interpreted for the specified sample. Thus, it is essential to choose a larger sample for
this study. Ultimately, an significant feature of deduction is that theories required to be
operationalized and then the methodological procedure is systematized. This
facilitates facts to be estimated quantitatively.
The quantitative strategy to gather primary data varies from the qualitative in various
way that it seeks to measure data and needs some kind of statistical analysis.
Alternatively, the qualitative strategy contributes to be unorganized and generally
employing an exploratory design on the basis of small samples. The qualitative study
must facilitate deep insights about a selected topic (Malhotra and Birks, 2007). This
study is categorized as a muti-technique quantitative strategy as this study uses a mix
of quantitative methods to gather data such as a questionnaire that are share by hand
to group called experimental group and the same questionnaire that are share online to
group called control group. The term multi-method itself signifies that it is
combination of one or more data collection method which is implemented with related
analysis techniques. Questionnaire is considered as an relevant technique for
determining deeply the purpose of study. Further, the quantitative strategy facilitates
appropriate outcomes compared to qualitative as it consolidates outcomes of a bigger
sample size.

Data Collection Procedure

This study will implement primary sources to collect data. Primary data will be
collected by conducting survey. This data signifies the original data retrieved by the
experts to get appropriate information for the objective of research (Saunders, et al.,
2007). The gathered data facilitates researchers to access the information about
determinants that influence the behavior of customer. It also facilitated discoveries
that would not be possible through secondary sources.

Experimental Setup

The main motive of casual design is experimentation. Thus, this research approach is
considered more appropriate for meeting the objective of study which talks about the
needs of this methodological technique. The purpose of an experimentation is to
investigate casual connections between change in predicted variable and change in
predictor variable. To study the causality among AR and consumer behaviour, two
groups needs to be developed and respondents are allotted to them respectively. Once
the data is collected from both groups, the predicted variable (consumer behavior)
should be associated with independent variable (AR).
In experiment group, the respondents were exposed for the implementation of AP app.
Using the AR app, respondents can visualize many products that needs inside their
house. Customers can also visualize the products in appropriate size along with right
colors while making a purchase decision. The experimental group was then asked to
examine the ability of AR on the tablet with products of their preference to know
insights of this technology and how it works. Afterwards, the respondents were given
a questionnaire to give their feedback based on their experience with the AR app.
Alternatively, an online self-administered questionnaire was given to control group
without giving any intervention for sharing their feedback about AR app. The
efficiency of AR will be mostly observed by respondents compared to their current
shopping routine. Though many consumers like to gather all information through
online before going to store to buy a product. Thus, the researcher decided to
determine whether the AR app can substitute the online buying process of consumers.
Malhotra and Birks (2007) talks about the significance of other determinants in the
study. The other factors such as brand awareness and brand loyalty were controlled by
using the same experimental and control group.

Sampling

The samples for this study would be the stakeholders of marketing campaigns. The
different samples that would be considered for this study would be end customers,
marketeers involved in AR based campaign and marketeers involved in traditional
campaigns.

Methodology
A mix of qualitative as well as quantitative analysis will be done for this study.For
qualitative analysis, focus group discussion will be conducted with participants
comprising of end customer, marketeers involved in AR based campaigns as well as
marketeers involved in traditional marketing campaigns.
Focus Group Discussion
During the focus group discussion, participants were asked subjective questions on
their experiences with AR based campaigns and how that fared with traditional
campaigns.
Few of the questions that were asked during focus group discussion were:
 How did AR based marketing campaigns influenced consumer behavior?
 Did the AR based marketing campaigns had higher ROI as compared to
traditional marketing campaigns?
 Did the brand experience consistent rise in sales post AR based marketing
campaigns or the revenue increase was short lived post the initial excitement?
 What target segment of the customers were the highest influenced by the
marketing campaigns.
 Did the customer found the AR based campaigns much more relevant and useful
as compared to traditional campaigns?
 Did the customer made a purchase after the AR based campaigns?
 Did the loyalty of the customer improved after AR campaigns as compared to
traditional campaigns?
 Did the AR based campaigns increased brand recall as compared to the traditional
campaigns?

Questionnaire based Survey

For the quantitative analysis, the responses from the respondents were collected via a
web based questionnaire. The questionnaire was designed and circulated with the
respondents for capturing the responses.The data collected from questionnaire was
analyzed using SPSS statistical package. Both uni-variate analysis(descriptive
statistics) as well as bi-variate analysis(Regression) was used for this study.

Research Tools
The data from the questionnaire was converted to SPSS data format and loaded to
SPSS statistical package.

Variable Definition
Dependent Variables
The below would be the dependent variable that would be used for this study:
Effectiveness of AR based campaigns(E): This variable would capture if the AR
based campaigns were effective in positively impacting consumer behavior.
Independent variables
The below would be the independent variables that would be used for this study:
 Brand awareness(BA): This variable would capture if the AR based campaigns
helped to increase brand awareness and educating customer about the product
features.
 Purchase decision(PD): This variable would capture if the AR based campaign
lead the customer to make a purchase decision.
 Brand Loyalty(BL): This variable would capture if the AR based campaign
would help to improve the brand loyalty.

Regression Equation
The relationship between the dependent and independent equation would be modeled
as below:
E= C + m1*BA +m2*PD + m3*BL
Where C is the constant term
m1, m2 and m3 are the coefficients of the independent variables.

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Appendix
Appendix 1: Questionnaire
1. Please identify yourself
 End customer
 Marketeer

2. Please specify which of the below you believe in?

 AR based marketing campaigns
 Traditional marketing campaigns

3. What do you think are the key benefits of AR based campaigns?

 More brand connect
 Better education of customers on brand and products
 Helps the customer to virtually try out products before making product decisions
 More brand loyalty
 All of the above

4. Do you think AR based campaigns lead to higher conversion of leads as compared

to traditional campaigns?
 Yes
 No

5. Do you think AR based campaigns also lead to repeat purchase as compared to

traditional campaigns?
 Yes
 No

6. Do you think AR based campaigns lead to higher brand loyalty as compared to

traditional campaigns?
 Yes
 No

7. Do you think AR based campaigns lead to higher brand education as compared to

traditional campaigns?
 Yes
 No
8. What do you think is the average conversion rate in AR based campaigns?
 Less than 10%
 Between 11-20%
 Between 21-30%
 More than 30%
9. What do you think is the average conversion rate in Traditional marketing
campaigns?
 Less than 10%
 Between 11-20%
 Between 21-30%
 More than 30%
10. Do you think AR based campaigns are effective marketing campaigns to
positively impact consumer behavior?
 Yes
 No