Impacts Of Precautionary Saving Motives On Purchasing Behavior

Insufficient domestic demand has been the major problem in China's economic performance. After the recent financial crisis occurred, it has become most obvious that China should solve this problem immediately. Even though scholars and government agencies have given priority to reducing residential deposits and stimulate consumption, after 10 years'efforts, domestic demand is still insufficient in reality and still a serious problem. It's never been solved. Why? And where are the solutions?This author believes that the fundamental reason lies in the facts that economic studies run parallel with those done in subjects such as management, psychology, and sociology and that scholars pay attention only to high research quality, technical sophistication, and theoretical edges leaving the perspective of solving realistic problem at nowhere. Therefore, errors come out, namely, data issues, methodology and theoretical framework being poorly targeted, results and policy advice being not coherent, taking broadly as goals and means reducing residential deposits, neglecting business'responding strategies.This paper puts forward some ways to correct the errors, include taking precautionary motives as the core while incorporating the unique methods and perspectives adopted typically by management, psychology, and sociology studies, focusing on the study on purchasing behavior, and using micro level survey data.Based on the above analysis, this author developed a set of scales and then sent out questionnaires to 450 parents of college students. 243 out of this survey are the valid samples that used for qualitative and quantitative analyses. The analyses depict the features of contemporary Chinese consumers and examine the micro foundations of precautionary saving motives. The application of statistical methods such as cluster analysis, factor analysis, and regressions shows not only the degree of the motives as well as the distribution of such motives among consumers, but also to what extent they are influenced by culture and values, education, family size, and life style. Moreover, this paper also studies, with great attention, the impact of such motives on brand preference, price sensitivity, and product involvement of consumers using regressions. Results of above analyses will help understand purchasing behavior under precautionary motives, and gain better understanding of the sources of insufficient domestic demand, and how Chinese business should react facing the consumers whose behavior is dominated by the motives.Conclusions and findings include, firstly, precautionary saving motives have significant effect on consumer behavior only in the context of brand preference, not for price preference neither buying frequency; secondly, culture and values, family size, and life styles affect precautionary saving motives only to a minor degree, and uncertainties in medical cares and education costs are the major components for precautionary motives, and thirdly, facing the consumers whose behavior is dominated by the motives, Chinese businesses should improve their credibility, reputation of product quality, and construct their brands with persistent efforts.Some innovative points in the paper are as follows, 1. It studies Chinese consumer's purchasing behavior from the perspective of precautionary saving motives; 2. It integrates methodology adopted in the studies of management, psychology, and sociology with that in economic studies; 3. It develops independently a set of scales suitable for studying purchasing behavior under precautionary saving motives.Limitations are, 1. The sample size is not large enough to discover the precise behavior under precautionary motives. 2. The quality of the questionnaire needs to be improved for further studies. 3. Some analysis requires more sophisticated psychological backgrounds.Directions for future studies include, 1.Discover the linkages between nationality and culture backgrounds and implication of current literature on consumption values. 2. Increase the sample size. 3. Improve the quality of the questionnaire. 4.More work needs to be done in understanding the mechnism of purchasing behavor.