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Mathematical Problems in Engineering
Volume 2013 (2013), Article ID 710981, 15 pages
http://dx.doi.org/10.1155/2013/710981
Research Article

Analyzing Lifestyle and Consumption Pattern of Hire Groups under Product Service Systems in Taiwan

1Graduate School of Design Doctoral Program, National Yunlin University of Science and Technology, Yunlin 64002, Taiwan
2Department of Business Administration, Dayeh University, Changhua 51591, Taiwan
3Graduate School and Department of Creative Design, National Yunlin University of Science and Technology, Yunlin 64002, Taiwan

Received 14 September 2013; Accepted 20 October 2013

Academic Editor: Teen-Hang Meen

Copyright © 2013 Jui-Che Tu et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This study explores the characteristics of rental goods, integrates the green concept in the design and development, and introduces the concept of product service into the rental consumption trend in Taiwan. This study takes the questionnaire survey to collect various opinions of the consumers to rental consumption and also classifies the Taiwanese consumers into five clusters based on the life styles, and the names of clusters are simple financial management cluster, environment and taste cluster, fashionable and flexible cluster, careful purchase cluster, and smart consumption cluster. Finally, conclusions are as follows. (1) The green consumption cognition and attitude of the consumers to the environmental goods can help to master the factor of green consumption property for developing the rental commodities. (2) The market segmentation of the rental consumption market can be enhanced by the variables of available life styles. (3) The applications with product service rental characteristics should take the opinion feedback of the consumers into the sustainable product development conditions and expand the service property of the product. (4) As the cost of cradle-to-cradle recycling pattern is high, the support and promotion of the government can help to construct the business model of product service rental consumption and develop the rental economy.

1. Introduction

Human plunder and the destruction of nature are closely related to consumption patterns. The purpose of consumption is to satisfy needs; however, in a society of capitalism, in order to sell more products, capitalists stimulate need through the use of various kinds of marketing measures that result in unnecessary consumption [13]. With the rise of environmental consciousness, green consumption has been proposed in response to unsustainable crisis in economic development. According to Marx, consumption is not only the end but also the start of production. Consumption both fulfills and enhances production. It also influences exchange and distribution [48]. Critical positions of consumption suggest that, in order to avoid the crisis of unsustainable development, human beings must change the current consumption model, which is destroying the environment [9, 10]. Leasing changes the consumption habit of manufacturers and consumers. Purchase has changed into leasing. The sold products are changed as services [11, 12]. Consumers benefit from functions of products, but the ownership still belongs to manufacturers. Thus, manufacturers not only satisfy customers’ needs of product functions, but also reduce product output and sales by services provided [1315]. It will decrease resource consumption and pollutant output and control the total volume.

According to WRAP of the UK, in 2009, every year in the UK 143 billion GBP of usable goods are disposed. Using clothing as an example, the current average utilization rate is only 66%. If goods can be fully used until the end of product life, it will save 47 billion GBP for consumers every year. According to the data, with environmental protection, by means of rental, hire groups are becoming the new green consumption group [11, 13, 14].

When consumption trends change from buying-selling consumption to that of rental consumption, rental behavior will enhance the circular consumption. It will not only save their product resources but also their social public resources. Leases can be divided into capital leases and operating leases. Capital leases are financial leases. The lessees authorize the purchase of new machines and equipment to the lessors and then rent the equipment from the lessors. All depreciation is paid by the lessees’ accounting in different periods. During the period of the lease, the lessees have the usage right of the goods [11, 15].

Thus, the risk should be particularly evaluated and guaranteed. An operating lease refers to a noncapital lease. With an operating lease, the lessors (leasing firms) have the ownership of the leasing subjects (machines and equipment), while the lessees (enterprises) have the usage right of the leasing subjects. Once the lease term expires, ownership of the leasing subjects remains with the lessors. During the rental period, the lessors must undertake the expenditures of renewal, maintenance, and prevention of leasing subjects [11, 12].

Rentals change the consumption patterns of manufacturers and consumers. As purchase has changed into rental service, the original sold product is changed into a service, where consumers can benefit from product functions while ownership belongs to the manufacturer. The manufacturer can meet customer demands of product functions, and reduce product output and sales by providing a service. In this way, the resource consumption and pollutant output can be decreased to achieve the effect of total amount control [1115].

In modern society, people are concerned about enjoyment and have developed new lifestyles using the rental concept to enjoy lives that are limited by money. New lifestyle groups known as hire groups have thus been constructed. Hire groups enjoy renting items, and they only care about possessing the items for a period of time instead of for the life of the product. With limited cash, consumers can experience unlimited rentals [1618]. Leasing firms sell services and consumers spend money to satisfy temporary needs instead of receiving ownership. Some products are used rarely during the year. For these products, customers can pay a small amount of money for usage rights that last a few days. They do not need to pay a large amount of money [68]. In addition, the same products can be repeatedly used and rented. Thus, rentals are not only good for finance; they also decrease the waste of resources and help protect the environment [1, 1315].

Such a model of meeting the “environmental protection” demand by “selling service” is in line with the concept of “PSS (product service system).” “PSS” is based on environmental protection and economic considerations [1922]. It combines product and service to satisfy the consumption demand in order to realize the purpose of dematerialization of the product [2326]. The system is usually operated by rentals, shared use, or pricing by unit of use. Consumers purchase the product “service,” as provided by this system, rather than the product “substance” [2731]. Hence, this study introduces the product service concept into the rental development trends of Taiwan, conducts a survey on consumer preferences of rental commodities, and plans to create “Taiwan’s environmentally friendly rental life.” It is expected to develop products inline with consumer demands and implement the sustainable development of the environment in order to usher in a new era of environmental protection in Taiwan. The purposes of this study are as following.(1)Using the above literature review, this study probed into time and the influence of rental consumption groups. Through the investigation on lifestyle, this study explored the life and characteristics of hire groups in Taiwan and analyzed their cognition of rental consumption, behavior, and attitude.(2)Through in-depth interviews and questionnaire surveys, this study probed into the rental patterns and product service systems preferred by Taiwan consumers, as well as consumers’ views and expectations of the rental industry.

2. Materials and Methods

2.1. Research Framework

In order to probe into lifestyle of rental consumption groups in Taiwan from the perspective of product service systems, this study adopted a literature review, a questionnaire survey on consumer lifestyles, factor analysis, and clustering analysis, in order to recognize the needs of rental consumption groups in Taiwan and generalize the important factors, as shown in Figure 1.

710981.fig.001
Figure 1: Research framework.

Through a literature review, this study explored theories related to product service systems, rental consumption, sustainable product development, and lifestyles. The first stage of interviews was conducted. Using a questionnaire survey, this study analyzed the types and patterns of rental consumption accepted by the Taiwanese, factors of the leases and lifestyles of rental consumption preferred by different groups, and recognized Taiwanese consumers’ expectations and thoughts about the rental industry.

2.2. Research Subjects

This study aimed to probe into Taiwanese consumers’ views of the rental industry and generalize the lifestyle of potential rental consumption groups in Taiwan. The subjects were consumers with the cognitive and purchasing capability. Subjects include age 18~55 years old, college educational level, annual income 0.3~1.2 million NTD, occupation respectively labor industry, professional personnel, student and service industry, and residential places from northern, central, and southern of Taiwan. The questionnaire survey was conducted to screen potential hire groups in order to explore their lifestyles.

2.3. Research Design

This study used a questionnaire survey and the investigation included demographics and the subjects’ personal basic information. The subjects’ consumption behavior of rental goods demonstrated their purchases, consumption cognition, and consumption attitude, as well as factors of their selection of rental consumption. There were five parts in the questionnaire survey.

First, the demographic variable of the subjects mastered the structure of samples and provided enough information for analysis of problems and interpretation of abilities.

Next, rental consumption behavior of the subjects was used to understand the preference of Taiwanese consumers’ rental consumption.

Third part, the awareness of the subjects’ rental consumption used the Likert scale five forms on the questionnaire survey. Each question had “strongly agree,” “agree,” “average,” “disagree,” and “strongly disagree” with selection of 5~1 points. The contents of the questionnaire included the leasing concepts, the environmental sustainability, and the sustainable rental consumption.

Fourth part, the subjects’ attitudes of rental consumption primarily tried to understand the impact factors of rental consumption.

Finally, this study investigated the subjects’ rental of goods in the product service system. The questions were designed according to the dimensions of attitude, interest, and Opinion (A.I.O.) to investigate the consumers’ lifestyles. By clustering, the subjects’ lifestyle types were clustered to analyze the reactions of different lifestyle and demographic groups in order to find if there were significant rental consumption differences among the groups.

3. Result and Discussion

3.1. Investigation and Analysis on the Lifestyles of Hire Groups
3.1.1. Factor Analysis and Reliability Test of the Lifestyles

In order to analyze the subjects’ different types of lifestyle, by factor analysis, this study simplified 31 questions on the subjects’ lifestyles and adopted principal component analysis and varimax in factor analysis for orthogonal rotation, in order to extract the main factors. As to the reliability of the scale of the questionnaire, after reliability analysis, the total reliability was , which was higher than 0.7. Thus, the scale of this study was reliable (see Table 1):

tab1
Table 1: Analysis of the total reliability of the lifestyle scale.

Factor analysis aims to extract common factors of numerous variables in order to simplify the number of variables. The purpose is to represent a great number of variables using few factors while keeping most of the information in the original variables. Before the extraction of factor analysis, this study conducted the KMO measure of sampling adequacy and Bartlett’s test of sphericity in order to find if the data is suitable for factor analysis. Kaiser suggested that when the KMO value is higher, it is more effective after factor analysis [32]. A value of at least 0.9 means the effect is extremely appropriate, at least 0.8 means the effect is appropriate, at least 0.7 means the effect is acceptable, and at least 0.6 means the effect is normal. Below 0.5 means the effect is inappropriate. According to Table 2, the and the significance of Bartlett’s test of sphericity is , indicating that the data were proper:

tab2
Table 2: KMO and Bartlett’s test of lifestyle scale.

After the test, principal component analysis was conducted to extract the common factors. A total eigenvalue 1 is the standard. The total explained variance was 58.896%, which matched the standard of being 40%. The least eigenvalue was 1.416, which matched the standard eigenvalue of 1, as shown in Table 3.

tab3
Table 3: Eigenvalue of factors, explained variance after rotation, and cumulative explained variance of the lifestyle scale.

Using Varimax , this study conducted orthogonal rotation and reduced 31 questions into eight factors. According to the significance principle of factor loading proposed by Hair et al. [33], a factor loading that reaches 0.3 is acceptable. The questions used for the factors in this study are shown in Table 4:

tab4
Table 4: Component matrix of the lifestyle scale of principal component analysis after rotation.

The principles for deleting the items were items with a low factor loading; items that included three common factors; factors that only included two or fewer than two items; and items with low reliability [34]. According to the component matrix after rotation in Table 4, Factor 7 and Factor 8 only included one and two items, respectively. The comparison revealed that the factor loading of Factor 7 was lower than that of Factor 8. Thus, Factor 7 was deleted.

By deleting factors having one or fewer than one item, the researcher obtained seven factors. According to the meanings of the items in the factor coefficients shown in Table 4, the factors were named as fashionable, stable and cautious, unique taste, strict budgeting, environmental, interactive consumption, and economic and flexible, as shown in Table 5.

tab5
Table 5: Meanings of the names of factors.
3.1.2. Lifestyle Clusters and Difference Analysis

The analysis in this section was conducted according to the lifestyle items of the questionnaire. Consumers were divided into different clusters. At the first stage, Ward’s method, also known as the minimum variance method , was adopted. According to the interval of the squared Euclidean distance, this study judged the maximum increase of total variance and the stage in order to recognize the number of clusters [35]. As shown in Table 6, when the percentage of the coefficient of concentration was reduced from three to two clusters, the change was the most significant. Thus, there should be three clusters:

tab6
Table 6: Coefficient of concentration of Ward’s method.

After the three clusters were decided using Ward’s method, this study conducted k-mean clustering analysis and allocated 198 consumers into three lifestyle clusters. According to the results of the three clusters of k-mean clustering analysis, in one cluster, there was only one subject. With the division of six clusters, two clusters only had one subject. Thus, this study tried to adopt two, four, and five clusters. However, the clustering precision rate needed to be validated by judgment analysis. Based on Table 7, significance , and the judgmental capability was significant. This study probed into differences of the factors of the groups and the lifestyle groups using one-way ANOVA , , and validated the clustering result, as shown in Table 8. According to the result of ANOVA, when there were five clusters, the values of all factors were . Thus, five clusters are significantly different for seven factors. The different groups were effectively segmented:

tab7
Table 7: Validation result of clustering by judgment analysis.
tab8
Table 8: ANOVA clustering significance test of 2, 4, and 5 clusters.

Finally, the seven factors were divided into five clusters by k-mean clustering, as shown in Table 9. According to the figures, Factor 1 (fashionable) had a significantly positive relation with Cluster 3 and had a significantly negative relation with Cluster 5. Cluster 1 had a positive correlation with Factor 2 (stable and cautious) and Factor 4 (strict budgeting). It had a negative correlation with Factor 1 (fashionable), Factor 3 (unique taste), Factor 5 (environmental), Factor 6 (interactive consumption), and Factor 8 (economic and flexible). Thus, Cluster 1 was more practical and not fashionable, as the subjects did not have unnecessary expenses. Based on the above, Cluster 1 was named simple financial management.

tab9
Table 9: Factors of the lifestyle clusters and means of coefficients.

According to Table 9, this study used one-way ANOVA to determine the differences among the groups and factors. According to the characteristics, the clusters were named as follows: Cluster 1: simple financial management; Cluster 2: environment and taste; Cluster 3: fashionable and flexible; Cluster 4: careful purchase; and Cluster 5: smart consumption. After clustering analysis, the cross analysis and chi-square test were conducted to find the significant differences of the groups. The distribution between the group demographics is shown in Table 10.

tab10
Table 10: Distribution of the demographics of different groups.

According to the result of the chi-square test, the lifestyle groups in this study showed a significant difference in age and annual income. The chi-square values of the rest of the items were above the significance level of 0.05, indicating there was no significant difference. In other words, the clusters were not significantly different, as shown in Table 11.

tab11
Table 11: Significance of the Pearson chi-square test.

According to the result of the clustering analysis, the demographics of different groups shown in Tables 9 and 10 were compared, as shown in Table 12.

tab12
Table 12: Names and descriptions of clusters.
3.2. Investigation on Rental Consumption in the Product Service System

Using the questionnaire survey in the first stage, this study screened potential rental groups. The items of the questionnaire were generalized according to the literatures and included rental consumption behavior, rental consumption cognition, rental consumption attitude, and a lifestyle AIO questionnaire. After integrating the related data, this study treated the result as the criterion of the expected goals. The subjects were consumers with cognitive and purchasing capability. This study focused on consumers above 18 years of age. At the first stage, 206 questionnaires were distributed and 198 valid questionnaires were retrieved. The majority of the questionnaires were online questionnaires, followed by paper-based questionnaires. The aim was to find the rental patterns and types that could be accepted by consumers in Taiwan, as well as the lifestyle factors of the groups that could accept the rental model.

3.2.1. Analysis of the Rental Consumption Behavior in the Product Service System

According to the figures shown in Table 13, 181 subjects had engaged in rental behavior (91.41%). However, 8.59% subjects had never engaged in leasing behavior. According to the responses for the items of the products, common real estate, publications, and transportations had long been associated with the rental business. At least 80% of the subjects had rental experience. Only 20% of the subjects had rented clothing, outdoor items, and cards, which can be rented in many different places. As to the rental of furniture, 15.66% of the subjects had experience. It was inferred that the furniture in rented rooms was considered to be rented furniture, and this was common for the public in Taiwan. As to various assistive devices, which are expensive and rental of the devices is promoted by the government, only 10.61% subjects had rented them. As to baby items that are renewed frequently, only 8.08% of the subjects had rented them. This shows that the subjects were used to purchasing instead of renting such items, not to mention the rental of electric appliances, daily articles, and live objects, which are rare in the market. The above indicated that Taiwanese consumers are not used to renting goods for short-term usage. The implementation of rental business should be significantly improved.

tab13
Table 13: Scale cross table of the subjects’ rental consumption behavior.
3.2.2. Analysis of Rental Consumption Cognition of the Product Service System

According to the figures shown in Table 14, the subjects agreed with the green effectiveness of leasing and they had a positive attitude. Thus, the development of leasing in a product service system could be a new green consumption model.

tab14
Table 14: Scale cross table of the subjects’ rental consumption cognition.
3.2.3. Analysis on Rental Consumption Attitude of the Product Service System

According to the figures in Table 15, the most significant conditions for consumers to accept rental consumption were low use frequency and high prices of goods. There should be a clear rental contract and process. Renting is not the traditional consumption model in which ownership changes in trading. There are many extended situations. Thus, the subjects worried that the rented goods would not always be used privately and the conditions were uncertain. They questioned the cleanness and compensation after damage. Leasing firms should be extremely careful about the quality of the rented goods. Clean goods in good condition should not be easily damaged by consumers’ common use.

tab15
Table 15: Scale cross table of the subjects’ rental consumption attitude.
3.3. Difference Analysis of Different Lifestyle Groups on Rental Consumption in the Product Service System

This section explored different groups’ rental intention, prices, use frequency, matching of goods, goods propriety, goods renewal, leasing process details, goods exclusiveness, damage of goods, cleanness of goods, and additional services. Regarding the content of the items, this study conducted cross analysis and chi-square test to find the significant differences among the groups.

According to the figures of the 11 items of different lifestyle groups shown in Table 16, the chi-square test result showed that the chi-square value was below the 0.05 significance level. The items that reached a significant difference were item 2 (prices), item 4 (matching of goods), and item 5 (propriety of goods). The rest of the items were not significantly different and were therefore not discussed.

tab16
Table 16: Distribution of figures of 11 items in different lifestyle groups.

According to the figures of item 2 (prices), all the clusters agreed that the prices of goods were a factor of choosing to rent. There were two meanings of the result. One was that when the goods are expensive, they are more likely to be rented. The other was that the prices of the rented goods should be advantageous in order to attract the consumers. Noticeably, among Cluster 4, up to 20% of the subjects stated they disagreed. It was inferred that they mostly did not have economic advantages and were supported by their families. They did not have economic pressure. Besides, they were concerned about taste, they did not save all their extra money, and they were more likely to spend money on goods that they liked or needed. After careful consideration, they would pay for certain types of products.

Based on the figures of item 4 (matching of goods), all the lifestyle clusters agreed that they would consider obtaining the usage rights of products by renting them when they had to use (or match) different products in different occasions. This showed that they could rent more expensive goods or products that are changed frequently (such as luxury bags) to demonstrate their identities.

According to figures of item 5 (propriety of goods), this study realized that more than half of Cluster 4 and Cluster 5 agreed with careful purchases and being concerned about taste and that they did not mind using second-hand goods. They were careful about using trials before purchasing. Cluster of smart consumption is pragmatic when selecting goods and they obtained products by the most economic measures. They did not mind obtaining the usage rights of goods by renting them. Thus, if the products of the rental firms match the characteristics of these two groups, they can treat the groups as the subjects.

4. Conclusions

Due to the importance of consumption, the only way to get rid of the unsustainable development crisis for us is to start from changing the consumption pattern of resource exhaustion which can destroy our living environment. Rental is a consumption pattern which can make the goods used repeatedly. As purchase has been changed into rental service, consumers can benefit from the product functions, but the ownership still belongs to the manufacturer. The manufacturer can not only meet the customer demands of the product functions, but also reduce the product output and selling by providing service. In this way, the resource consumption and pollutant output can be decreased. Selling service can achieve the pattern of environmental appeal, which is exactly the way of product service system. This study explores the characteristics of rental goods, integrates the green concept in the design and development end, and introduces the concept of product service into the rental consumption trend in Taiwan. As a result, the sustainable product can be developed for the rental consumption to maximize the green effect. This study takes the questionnaire survey to collect various opinions of the consumers to rental consumption and also classifies the Taiwanese consumers into five clusters based on the life styles, and the names of clusters are simple financial management cluster, environment and taste cluster, fashionable and flexible cluster, careful purchase cluster, and smart consumption cluster. Furthermore, this study details the product service rental patterns and types preferred by each cluster, as well as their opinions and expectations of the rental industry. Finally, the following conclusions are obtained from the phenomenon showed in the statistics and research data.

4.1. According to Consumers’ Green Consumption Cognition and Attitude toward Environmental Goods, Control the Green Consumption Factors of Rental Goods Development

Green consumption and environmental goods influence each other. In the use of rented goods, environmental effectiveness can be enhanced by increasing the use rate. Thus, if goods are consumed using a rental model, such action can be seen as green consumption. Consumers agree with this concept; thus, rental goods have environmental implications for consumers. However, consumers have different market characteristics. At the early stage of development of rental products, surveys must be conducted in order to recognize the different subject preferences for goods. At present, consumers in Taiwan worry about situations related to the change of ownership of rental consumption. Thus, if the rental characteristics of goods can be reinforced at the stage of development and if the development of rental goods is guided by the extracted factors, the total value of rented goods can be effectively upgraded.

4.2. In a Rental Market, Market Segmentation Can Be Reinforced by Lifestyle Variables

According to interviews with the enterprises, leasing firms suggested that an important measure to develop rental goods is product market segmentation. This study focused on consumers with purchase capabilities and extracted lifestyle factors by factor analysis in AIO to find 31 items. Through clustering analysis, the factors were divided into five clusters. It was found that the public is willing to acquire the usage rights of products by rental consumption. Thus, rental consumption in Taiwan can be economically effective. Difference analysis of the lifestyle survey in this study indicated the different cluster preferences in detail. Thus, lifestyle surveys could help probe into rental consumption groups’ preferences, could serve as a reference for market segmentation, and allow firms to easily deal with marketing.

4.3. In Development of Rental Consumption Characteristics of Product Service System, Consumers’ Opinions Should Be Included in Development Conditions and It Must Reinforce Product Service

As to sustainable goods developed upon rental consumption of product Service System, the main concerns are extension of the product life cycle of components and processed waste returned to the development end. Besides, users’ feedback after using the products is also important for the development of the next stage. From consumers’ perspective, users use rental goods more frequently, in comparison to goods purchased. It is difficult to predict users’ usage. Thus, when developing products, design engineers should be concerned about the new lifestyle of rental goods groups in order to reinforce services of the products. This study generalizes sustainable product development principles of rental consumption of product service system as new rules for developing rental goods. Recycling and usage are particularly critical. Consumers’ feedback can be provided by information platform.

4.4. Cost of Cradle-to-Cradle Recycling Pattern Is High: Governmental Assistance and Promotion Will Help Construct Sustainable Consumption Model of Rental Consumption in Product Service System and Influence Consumers’ and Enterprises’ Selection of the Rental Business Model

According to expert interview and analytical result, in overall green regulations, rental consumption model should particularly modify usage stage and waste recycling stage. It is the result of the change of ownership. However, not all types of firms can accomplish cradle-to-cradle recycling model. Using Aurora Office Furniture as an example, cradle-to-cradle recycling is a huge burden for the enterprise and it will not adopt it. However, the implementation of sustainable goods development of rental consumption of product service system should be assisted by the government and led by large enterprises. It must establish a model rental economy in Taiwan and indirectly influence product selection and operation of consumers and small and medium enterprises in the future.

Acknowledgment

The authors are grateful to the Environmental Protection Administration of China for supporting this research.

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