Proceedings of the Asia Pacific Industrial Engineering & Management Systems Conference 2014

A model for improving the customers purchase willingness

considering their latent intentions and media contacts
Keisuke Korenaga
Graduate school of Science and Engineering
Aoyama Gakuin University, Japan
Tel: (+81) 90-1770-0981, Email: k.kx329@gmail.com
Satoshi Kumagai
Industrial and Systems Engineering
Aoyama Gakuin University, Japan
Tel: (+81) 42-759-6312, Email: kumagai@ise.aoyama.ac.jp
Hiroki Nakano
SmartPlatform, NIFTY Corporation, Japan
Tel (+81) 3-5471-4923, Email: h_nakano_0109@nifty.com
Abstract: Due to advertising budget limitations and the diverse nature of customer purchase values,
advertisements need to focus on the most effective customers, that is, the customers most likely to make purchases.
The effectiveness of advertising varies depending on customer purchase values. The purpose of this study is to
construct a model that quantifies the extent to which customer values and frequency of media contact influence
customer purchase willingness. We used single source data that connected customer attribute data, media contact
data, and buying behavior data for particular customer IDs. Using the example of two beverage products, we
constructed a model through factor analysis and structural equation modeling. The analysis consisted of three
steps. First, we extracted seven kinds of latent intentions from the available customer value data. We named these
as High-quality, Consideration, Lifestyle, Design and Trend, Economical, Brand, and Ecological intentions.
Second, we divided consumers into three segments according to the frequency of media contact. Finally, we
analyzed those segments simultaneously, using multiple analysis in structural equation modeling. Thus, we
quantified the effect of each latent intention on purchase willingness, also keeping frequency of media contact in
view. The results indicate that the Design and Trend intention of the customer group of the second segment of the
three.
Keywords: Single source data, Structural Equation Modeling, advertising effectiveness, purchase willing
ness

1. Introduction

Figure 1 shows the movements in total advertisement

costs in Japan from 2006 through 2011. These costs fell sharply
after the bankruptcy of Lehman Brothers in 2008. Figure 2
shows the component ratios of advertising costs in that period.
Television advertising accounted for about 30% of all
advertising costs. Television was therefore the primary
advertising medium before Internet advertising became
widespread. However, according to Figure 3, costs for
television advertising also fell in 2008 as a result of the
Lehman Brothers bankruptcy,
Companies have to utilize limited costs effectively, and it
is therefore necessary for them to increase product recognition
and sales. Understanding the effect of advertising and the

Promotion activity is aimed at increasing product

recognition and sales. Because advertising reaches many
unspecified customers, it is one of the primary means of
business promotion. However, advertising is very expensive.
Therefore, it is essential to measure the effectiveness of the
substantial advertisements costs incurred in a promotion
strategy. On the other hand, the values according to which
customers make purchases are very diverse. Therefore, it is of
critical importance to construct a model that measures
advertising effectiveness while keeping in view the values of a
variety of consumers.

Korenaga, Kumagai and Nakano

manner in which it influences customer purchase decisions

helps in building a strategy for placement of advertisements.

Figure 1: The transition of total advertisement costs.

2. Purpose of study
This study closely examines the factors that influence
customer purchase willingness. Purchase willingness is the
level of a customers desire to buy a specific product. Figure 4
shows the AIDMA model, a typical advertising
communication model. The AIDMA model illustrates the
entire process, from a customers awareness of an
advertisement to final buying behavior. Purchase willingness
corresponds to Desire in the AIDMA model. Purchase
willingness is the most important part of the purchasing
process, so company promotion activities aim to generate
purchase willingness. In terms of the AIMDA model, our study
focuses on how to move the customer from the Attention stage
to the Desire stage.
This study assumed that a primary factor to improve
customers purchase willingness is customer values and media
contacts. This study used single source data (from the Nomura
Research Institute, Ltd. INSIGHT SIGNAL) that connected
the attribute data of customers, media contact data, and buying
behavior data by specific customer ID. Based on this data, and
focusing on television, we constructed a model to quantify the
effects of advertising in the context of diverse customer
purchase values and frequency of media contact.

Figure 2: The component ratio of advertisement costs.

Figure 4: AIDMA model.

3. Approach
3.1. Summary of Single Source Data
Table 1 shows a summary of the single source data used
in this study. Breaking down this data, we investigate purchase
willingness and buying behavior of one product and several
individual customers for March and April 2012. The data set
enables us to analyze how media contact brought about
changes in buying behavior during this period.
Figure 3: The transition of advertisement costs of television
media.

Table 1: Summary of the Single Source Data

Customers attribute, customers value, and buying
behavior.

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Korenaga, Kumagai and Nakano

some of these items. The number of variables is very high,

given that we had to take 32 value items into consideration. We
have assumed that certain latent factors influence customer
values, and have therefore extracted these latent factors
through factor analysis.

Frequency of television viewing and listening

(From March 1, 2012 to April 30, 2012)
Frequency of magazine reading
(From February 25, 2012 to April 27, 2012)
Frequency of internet access
(From March 1, 2012 to April 30, 2012)
Frequency of ad placements on television
Frequency of ad placements in magazines
3.2. Approach
We constructed our model through the following process:
Step 1: Choice of products for analysis
Step 2: Extraction of details on customers whose purchase
willingness improved from March to April 2012
Step 3: Extraction of latent intentions by factor analysis of
customer values data
Step 4: Quantification of the effect of latent intentions on
purchase willingness (through structural equation modeling)
Step 5: Classification of customers according to the frequency
of contact with televisions advertisements for the target
products
Step 6: Quantification of the factors that increase purchase
willingness, using multiple analysis in the structural equation
modeling

4. Construction of the model considering latent

intentions

Table 2: Questionnaire items on customer values

Variables Questionnaire items
S5
Have a brand of regular purchase
S6
Color and design is first priority rather than
easiness of use
S7
Color and design is first priority even for TVs
and PCs
S11
Trend is important for selecting products
S14
Uniqueness is important for selecting products
We analyzed each customers purchase values through
factor analysis. Based on individual values, a variety of factors
or combinations of factors can influence customer purchase
willingness. We used maximum-likelihood estimation and
normalized varimax as analytical methods for factor analysis.
We extracted seven latent factors pertaining to both beverages.
These latent factors were named to be based on the variables
that factor loading is high. Table 3 shows these factors, which
we labeled as latent intention factors.

This study uses two beverage products, Orangina and

Ihoras, as examples. We focused on increases in purchase
willingness, and sought to quantify the effects of customer
values and media contact on purchase willingness. We
therefore started by extracting the names of customers whose
purchase willingness increased from March to April.

Table 3: The latent intention factors

Orangina
Irohas
High-quality intention
High-quality intention
Consideration intention
Consideration intention
Lifestyle intention
Lifestyle intention
Ecological intention
Ecological intention
Design and Trend intention
Trend intention
Economical intention
Economical intention
Brand intention
Brand and Design intention

4.1. Extraction
willingness improved

purchase

4.3. Construction of the model considering latent

intentions

The questionnaire item on purchase willingness included

the following options: Not willing to buy Unknown,
Willing to buy, and Highly willing to buy. The consumers
whose purchase willingness changed were those who changed
their responses to this question between March and April. The
attitude change was from Not willing to buy or Unknown to
Willing to buy or Highly willing to buy.

We constructed a model to quantify which of the latent

intentions influences customer purchase willingness and how
it does so. The model has been constructed for both drinks.
While it deploys factor analysis, this model is constructed so
as to also take account of factor correlation, which is not
possible in the case of factor analysis alone.
Table 4 shows the degree of goodness of the fit for each
model. GFI and AGFI are examined, and the fit is deemed to
be good if each indicator is at 0.9 or over. CFI how long shows
goodness of fit was improved as compared with an
independent model. We judge the model fit to be good if the
CFI is around 1. RMSEA shows estrangement with the
distribution of the model and the true distribution for quantity

of

customers

whose

4.2. Extraction of latent intentions through factor

analysis
One purposes of this study is to quantify the influence of
customer values on purchase willingness. The data set obtained
had 32 questionnaire items on customer values. Table 2 shows

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Korenaga, Kumagai and Nakano

per 1 degree of freedom. RMSEA values at or below 0.05

imply a good fit. Each indicator level obtained from the data
set was judged good in terms of fit.
Table 4: Goodness of fit.
Indicator
GFI
AGFI
CFI
RMSEA

Orangina
0.927
0.904
0.833
0.047

Irohas
0.851
0.817
0.811
0.049

Table 4 and Table 5 show the path coefficients to quantify

which latent intentions influence customer purchase
willingness in each model.
First, we examined the Orangina path coefficient. Here,
the Design and Trend intention and the Economical intention
were shown to be highly effective factors. Customers desire to
be seen as trendy or buy well-designed products and their
preference for cheap products significantly improve purchase
willingness. On the other hand, the Brand intention appeared
to have a negative effect; the tendency to prefer big-name
brand products appears to decrease purchase willingness in the
case of the two drinks.
Next, we examined the Irohas path coefficient. Here, the
Brand and Design intentions showed negative effects. Thus, in
this case, the customer preference in favor of both big-name
brands and well-designed products greatly decreases purchase
willingness.
Table 5: Orangina Path coefficient
Latent intentions
Path coefficient
High-quality intention
0.47
Consideration intention
-0.12
Lifestyle intention
-0.47
Design
and
Trend
1.09
intention
Economical intention
1.13
Brand intention
-1.27
Ecological intention
-0.57
Table 6: Irohas Path coefficient
Latent intentions
Path coefficient
High-quality intention
0.14
Consideration intention
-0.30
Lifestyle intention
-0.55
Brand
and
Design
-3.07
intention
Economical intention
0.22
Trend intention
-0.45
Ecological intention
0.13

5. Construction of the model considering latent intentions

and frequency of media contact
In this section, we add frequency of media contact to the
factors included in the model so far. We focus only on
Orangina in this section. Because we dont have enough data
of customers whom purchase willingness improved in Irohas,
we couldnt construct the model of Irohas.
5.1. Segmenting customers according to level of media
contact
To construct our model, we segmented customers
according to level of media contact. Figure 5 shows the
relationship between frequency of contact with television
advertisements and purchase willingness. We categorized
customers into five grades, and we graphed the ratio of
improvement in purchase willingness based on frequency of
media contact. We named this indicator the Improvement rate
of purchase willingness. The results indicate that when contact
with the relevant television advertisements occurs 0-5 times
and 6-10 times, the Improvement rate of purchase willingness
grows. The rate is at the maximum after 11-15 incidents of
contact, but tends to stagnate above 16 incidents.
We divided the customers into three segments according
to the tendency of Improvement rate of purchase willingness
and frequency of contacts with advertisements on television.
Customers whose contact with television advertisements
occurred 0 to 10 times have been placed in segment 1. Their
Improvement rate of purchase willingness is high. Customers
whose contact occurred 11 to 15 times have been placed in
segment 2. Their Improvement rate of purchase willingness is
the highest. Customers whose contact occurred over 16 times
have been placed in segment 3. Their Improvement rate of
purchase willingness has leveled off.

Figure 5: Improvement rate of purchase willingness.

5.2. Construction of the model considering latent
intentions and frequency of media contact

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Korenaga, Kumagai and Nakano

5.2.1. Multiple analysis by SEM

Structural equation modeling involves a method called
multiple analysis. The purpose of multiple analysis is to
analyze multiple populations simultaneously. This enables
comparison between different models for calculation of the
goodness of fit and for selection of the optimal aggregate
model for multiple populations. Multiple analysis also enables
researchers to examine the homogeneity and heterogeneity of
the model in respect of multiple populations. The process of
construction is displayed below:
Model 1: Arrangement Constant model
This model has equal variables for each factor between
populations. Therefore, the path diagram is identical between
all populations.
Model 2: Weakly Measurement Constant model
This model involves equal factor loadings for each factor.
Model 3: Measurement Constant model
In addition to model 2, this model involves equal variance and
covariance for each factor.
Model 4: Strong Measurement Constant model
In addition to model 2, this model involves equal error variance
for each variable.
Model 5: Equal Population Parameter model
This model involves equal parameters.
These five models strengthen restrictions as we advance
from model 1 to model 5. We determine what model should be
adopted according to goodness of fit.
5.2.2. Construction of the model through multiple
analysis in the context of latent intentions and frequency of
media contact
We postulate that the effect of customers latent intentions
on purchase willingness varies according to the frequency of
media contact. We therefore used multiple analysis to quantify
the effect of each latent intention on customer purchase
willingness based on the categorization into three segments in
section 5.1.
First, we constructed the arrangement constant model,
where the shapes of the models are identical. The arrangement
constant model enables comparison of the path coefficients
between segments of customers according to identical model
shapes.
Table 7 shows the goodness of fit of the arrangement
constant model constructed according to each latent intention.
The GFI and AGFI are over 0.9 in all models; hence, we judged
the model fit is good. The RMSEA and CFI levels also
indicated the acceptable goodness of fit. Thus, we judged the
path diagram is identical according to all latent intentions
between three segments.

Table 7: Goodness of fit in the Arrangement Constant model

AGFI
GFI
RMSEA
CFI
High-quality
0.953
0.984
0.047
0.979
intention
Design
and
Trend
0.965
0.985
0.000
1.000
intention
Economical
0.908
0.960
0.087
0.765
intention
Brand
0.914
0.963
0.087
0.890
intention
Lifestyle
0.965
0.991
0.036
0.986
intention
Consideration
0.941
0.986
0.079
0.926
intention
Ecological
0.997
1.000
0.000
1.000
intention
Table 8 shows the path coefficient pertaining to the
influence of latent intentions on purchase willingness. We
observed a significant gap between the influence of the Design
and Trend intention on customers in different segments. There
does not appear to be a similar gap as regards other intentions
across segments.
Table 8: Path coefficient in the Arrangement Constant model.
Segment 1
Segment 2 Segment 3
High-quality
0.16
0.14
0.15
intention
Design
and
Trend
-0.55
1.41
0.36
intention
Economical
0.22
0.05
0.36
intention
Brand
0.16
0.09
0.28
intention
Lifestyle
0.15
0.29
0.20
intention
Consideration
0.21
0.21
0.09
intention
Ecological
-0.33
-0.71
-0.14
intention
Figure 6 shows the constructed arrangement constant
model. We observed that the shape of the path diagram is the
same in each segment. However, each path coefficient is
different.

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Korenaga, Kumagai and Nakano

Table 10 shows the path coefficient of the influence of

five latent intentions on purchase willingness in the weakly
measurement constant model. The path coefficients are
identical between each segment in the weakly measurement
constant model. Moreover, each path coefficient is small.

Figure 6: Arrangement Constant model considering media

contacts and latent intention
Next, we constructed a weakly measurement constant
model to correspond to model 2 described in section 5.2.1. The
weakly measurement constant model enables us to argue
whether or not the path coefficient is same between segments
of a population.
Table 9 shows the goodness of fit of the weakly
measurement constant model. Ecological intention greatly
degraded the goodness of fit here as compared with the
arrangement constant model. Thus, we chose to adopt the
arrangement constant model. The other latent intentions
examined that goodness of fit is good. However, Design and
Trend intention has a path coefficient which latent intention
influence to purchase willingness has distinguished gap in the
Arrangement constant model.

Table 9: Goodness of fit in the Weakly Measurement Constant

model.
AGFI
GFI
RMSEA
CFI
High-quality
0.960
0.980
0.030
0.987
intention
Design
and
Trend
0.949
0.970
0.041
0.938
intention
Economical
0.922
0.954
0.075
0.749
intention
Brand
0.916
0.951
0.085
0.856
intention
Lifestyle
0.968
0.984
0.033
0.979
intention
Consideration
0.962
0.983
0.050
0.944
intention
Ecological
0.693
0.898
0.328
0.000
intention

Table 10: Path coefficients in the Weakly Measurement

Constant model.
Segment 1 Segment 2
Segment 3
High-quality
0.16
0.16
0.16
intention
Economical
0.17
0.17
0.17
intention
Brand
0.15
0.15
0.15
intention
Lifestyle
0.24
0.24
0.24
intention
Consideration
0.11
0.11
0.11
intention
Table 11 integrates the path coefficients of each latent
intention between each segment. In the case of the Highquality intention, Economical intention, Brand intention,
Lifestyle intention, and Consideration intention we adopted the
weakly measurement constant model, while for the Design and
Trend intention and the Ecological intention we adopted the
arrangement constant model.
Table 11: Path coefficient of the model considering latent
intentions and frequency of media contact
Segment 1

Segment 2

Segment 3

High-quality
intention

0.16

0.16

0.16

Consideration
intention

0.11

0.11

0.11

Lifestyle
intention

0.24

0.24

0.24

Economical
intention

0.17

0.17

0.17

Brand
intention

0.15

0.15

0.15

-0.55

1.41

0.36

-0.33

-0.71

-0.14

Design and
Trend
intention
Ecological
intention

The results show that the influence of latent intentions on

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Korenaga, Kumagai and Nakano

purchase willingness is identical for the five latent intentions

where the weakly measurement constant model was adopted,
even when the frequency of media contact varied. On the other
hand, the two latent intentions for which the arrangement
constant model was adopted showed different path coefficients
in each segment. That is to say, the influence of latent
intentions on purchase willingness varies according to the
frequency of media contact. When we focused on the Design
and Trend intention, the path coefficient of segment 2 was
large. The Design and Trend intention of segment 2 therefore
has a substantial effect on purchase willingness, judging by the
path coefficient of 1.41. Our analysis suggests that the media
contact frequency that shows the best results in terms of
increase in purchase willingness is between 11 to 15 times.

Structural Equation Modeling: Question (in Japanese),

Asakura Publishing Co, Ltd., Tokyo, Japan, 2003
[8] Hideki Toyoda, Covariance Structural Analysis
Structural Equation Modeling: Case study (in Japanese),
Kitaooji Shobo Co, Ltd., Kyoto, Japan, 1998
[9] Hiroshi Kumakura, Advertising Effects: Concepts and
Methods, Management systems: a journal of Japan Industrial
Management Association 18(1), 19-25, 2008-04-15
[10] Nomura Research Institute, Ltd. INSIGHT SIGNAL
https://www.is.nri.co.jp/

6. Conclusion and challenges

This study uses structural equation modeling to quantify
how customers latent intentions and the frequency of media
contact influence purchase willingness. Analysis based on the
model constructed in this study reveals that the effect of latent
intentions on purchase willingness varies according to the
frequency of media contact.
As regards future challenges, since forms of media have
become increasingly diverse and complex in recent years, there
is need for a model that separates and quantifies the effects of
different media such as magazines, newspapers, the internet,
and social networking sites. Moreover, this study focused
only on increasing purchase willingness, that is, on one part of
the purchase process. We also need to construct a model that
enables quantification of the kind and frequency of media
contact that influence the entire purchase process and hastens
its movement towards the Attention to Purchase stage
illustrated in the AIDMA flowchart.

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