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Contemporary Issues in Consumer Research

Final Assignment: Ethical Decision-Making and its Relevance

to Marketing Practitioners.

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Submitted to Dr. Michael Coulburn

(Professor)

Salford Business School

Date 30th Aug 2015

Type of Assignment Individual

Submitted by

Name of Student Sanjay Vaid

Roll No 00436743

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Table of Contents

CONTEMPORARY ISSUES IN CONSUMER RESEARCH........................................................... 1

FINAL ASSIGNMENT: ETHICAL DECISION-MAKING AND ITS RELEVANCE....................................... 1

INTRODUCTION.................................................................................................................... 5

HOWARD-SHETH MODEL....................................................................................................... 6

A) INPUT VA RIABLE: ........................................................................................................... 6

B) PROCESSING OF INPUTS: ................................................................................................ 7

C) OUT PUT: ...................................................................................................................... 7

ENGEL-KOLLAT-BLACKWELL – (EKB) MODEL (1972) ................................................................... 7

DECISION PROCESS STAGE: .................................................................................................. 8

INFORMATION INPUT ............................................................................................................. 9

INFORMATION PROCESSING: ................................................................................................. 9

VARIABLE INFLUENCING THE DECISION PROCESS ..................................................................... 9

STRENGTH AND LIMITATION OF THE MODELS ......................................................................... 9

STRENGTH OF HOWA RD-SHETH MODEL: ........................................................................................10

STRENGTH OF EKB MODEL:........................................................................................................10

WEAKNESS OF HOWARD-SHETH MODEL.........................................................................................10

WEAKNESS OF EKB MODEL:.......................................................................................................10

ALTERNATIVE THEORIES FOR GREATER UNDERSTANDING OF ETHICAL CONSUMER DECISION-

MAKING .............................................................................................................................11

SHETH-NEWMAN-GROSS MODEL OF CONSUMPTION:.........................................................................11

THE FIRST VALUE: FUNCTIONAL VALUE: .................................................................................13

THE SECOND VALUE: SOCIAL VALUE: ....................................................................................13

THE THIRD VALUE: EMOTIONAL VALUE: ..................................................................................13

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THE FOURTH VALUE: EPISTEMIC VALUE: ................................................................................13

THE FIFTH VALUE: CONDITIONAL VALUE .................................................................................14

CONCLUSION ......................................................................................................................14

WORKS CITED .....................................................................................................................15

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Introduction

Marketer continuously wants to understand the variables that influence consumer

behavior. The point of interest for marketers is how these variables intermingle.

These variables can be internal, external, observable, latent and ethics based. Given

these complex set of variables the different set of permutation and combination to

determine the different form of outcomes, models have been formulated. These

models are very useful to understand how consumer behaves in the marketplace.

(Mukherjee, 2012)

Modelling behavior

To better understand the underlying constructs of the consumer choice decision and

the extent to which they contour the choice process, marketer relies on established

models of consumer behavior. “Models are sometimes designed by verbal

illustration, by portraying with the help of diagrams or mathematical symbols, or by

the description of some physical process.” (Mukherjee, 2012). The consumer

behavior model can be divided into two different schools, the traditional model and

the contemporary model.

The Traditional models are as follows:

Microeconomic Model:

Learning Model

Psychoanalytic Model,

Sociological model. (T, 2014)

Contemporary model, on the other hand, includes following models:

Andreason Model (1965).

Nicosia Model (1966)

Howard-Sheth Model (1969),

Engel-Kollat-Blackwell Model (1972).

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Sheth-Newman-Gross Model of Consumption Values (1991)

And Stimulus- Response Model.

Howard-Sheth Model

This model has been widely used consumer behavior model. The model was

formulated by Professor John A. Howard and Jagdish Sheth in 1969. This model is

distinct from other models as it puts emphasis on input to the consumer buying

process and comment on the way in which the consumer organizes and interprets

these inputs before arriving at a final decision.

Figure 1.1 Howard-Sheth Model

Source: (S, 2004)

The model is constructed in three level of decision making.

• Input Variable.

• Process Variable – Perception contrast a Learning Constructs.

• Output variables.

a) Input Variable:

The input construct are phase comprises of Significative stimuli, Symbolic

stimuli, Social Stimuli. The marketer at this phase usher customer with

product or brand related in terms of Physical characteristics like. Quality,

Distinctiveness, availability, price, etc., referred as Significative stimuli). And

verbal or visual traits of the product referred as ‘Symbolic Stimuli'. Also, the

social environment of the customer referred as ‘Social stimuli’. Together,

Input Stimulus display Perception construct Learning Construct Out Put

Intention Purchase

Over reach Confidence

Intention

Attitude

Stimulus

ambiguity Attitude

Brand

Compreh

enstion

Social a. Family b.

Reference groups c.

Social class Motives

Choice

criteria

Brand

Comprehen

stion

Information FlowAttention

Perceptual

bias Satisfaction Attention

Feedback effect

Significative a. Quality

b. Price c.

Distincitveness d.

Service e. Availaibility

Symbolic a. Quality b.

Price c. Distinctiveness

d. Service e.

Availaibity

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these three stimuli provide input to customer relating to the traits of product

class as well as brands.

b) Processing of inputs:

The Input process can be classified – Perpetual constructs and learning

constructs. The perpetual variable determines how the consumer interprets

the information from the input stimuli. An Improper comprehension of the

environmental stimuli results in ‘stimulus ambiguity’. That can lead to

‘perpetual biases. The learning construct includes confidence on the product,

brand, intention to purchase, motives behind the choice, choice criteria, brand

comprehension and level of perceived satisfaction from the brand/product.

Some exogenous variables are not directly part of the decision-making

process pose some influence on the importance of the purchase, consumer’s

personality traits, religion, time pressure, etc.

c) Out Put:

The output is the resultant behavior of the consumer exposed in the

marketplace based on their interpretation of the received environmental

stimuli through the interface of perpetual and learning contracts. The five

output mentioned on the right side of figure 1.1 are attention, purchase, brand

comprehension, brand attitude and buyer intention.

Engel-Kollat-Blackwell – (EKB) Model (1972)

The Engel-Kollat-Blackwell model is problem-solving and learning model of

consumer behavior. This model has gone through various changes, and the latest

version was Engel-Kollat –Miniard (EKM) Model that principally portrayed following

stages:

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Figure 1.2 Engel –kollat –Blackwell Model (1972)

Source: (S, 2004)

Figure 1.2 Engel-Blackwell-Miniard Model (1986)

Decision process stage:

The model has 5 stage basic decision process- problem recognition, searches for

alternatives, alternative evaluation, purchase, and outcome. However, the customer

is not passed through all five stages in all the cases. They got through the five

Outcome

Informati

on Input

Information

Processing

Decision

process

stages

Product

brands

evaluation

General

motivation

influences

Internalized

enviromental

influences

Exposure

Attention

Search Beliefs Motives

Perception

Attitudes

Choice Intention

Anticipated

circumstances

Satisfaction

Search Dissonance

Evaulation

criteria

Cultural

norms and

values

Alternative

evaluation

Outcome

Unanticipated

circumstances

Normative

compliance

Reference

group family

Personality

lifestyle

Stimuli

Mass

Personal

General

Marketer

Dominat

Information and

experience

Problem recognitionMEMORY

Input

Information

Processing

Decision

Process

Enviromental Influences

Exposure Culture

Social Class

Attention

Internal

Search Search Personal influence

Belief Family

Comprehension Situation

Attitude

Acceptance Memory Indivitual Differences

Intention Consumer Resources

Retention Motivation & inolvement

Purchase Knowledge

Attitude

Personality

Outcomes Lifestyle

Demographics

Disactisfaction Satisfaction

Stimuli 1

Marketer

Dominat

ed

Need

Recognition

Alternative

Evalutation

External

Search

Variables Influencing

Decision Process

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stages only in the extended problem-solving situation. An example can be in the

case of choice of hi-tech and hi-end products like smartphones.

Information Input

This stage is quite similar to stimulus input stage mentioned in the Howard-Sheth

model. At this stage, consumer tries to recollect the brand/product related

information from his memory, which is referred as ‘internal search’. In case the

consumer finds his internal search is not sufficient, in that case, searches information

from outside. He obtains information from various marketing and non-marketing

sources. At times, the situation can be another way round as well. The external

stimulus generates the problem reorganization stage of the decision-making

process.

Information Processing:

At this stage consumer decision making goes through following stages: the

consumer is exposed to marketing stimuli inform of advertisement etc. attention - in

case of the product has relevance to the customer.

Perception – in case the marketing communication fall in customer perpetual

threshold,

Acceptance of information and retention of the perceived and accepted information

in the memory.

Variable influencing the decision process

At the fourth stage, the individual and environmental influences are on all five stages

of the decision process. Like the Howard-Sheth model, individual characteristics like

motives, values, lifestyle, and personality. And Social influences like. Culture

reference groups, family and situation factor influence decision process.

This Model hence incorporates many important individual and social parameters,

which considerably influence consumer decision making.

Strength and Limitation of the models

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Strength of Howard-Sheth Model:

The model serves as an fundamental model to understand the complexity of

consumer behavior. The model covers the complexity of many buying situations

which is quite useful. This gives markers insight into the fact that many decision to

buy by the consumer are not purely based on economical consideration, but different

non-rational factor also influence consumer buying decision. The model emphasizes

of the essence of marketing concept viz., to supply good and services designed to

meet the consumer need, study benefit that consumer seek to obtain through

consumption habit. And to offer them acceptable solutions to their problem of

acquiring satisfaction at economic and emotional, social, cultural and environmental

needs.

Strength of EKB Model:

The model takes into consideration may variables that influence consumers; it has a

high focus on consumer’s involvement and the emphasis on the decision-making

process. The model flow is very flexible. The model emphasizes the factor that

influence behavior and specifically the ones which can be powerful in buying

situation. The influences of environmental factors have been very well covered. The

other strength of the model is that it has evolved with time since its introduction in

1968. The model has accommodated new findings related to consumer behavior.

(Sheth, 1974)

Weakness of Howard-Sheth Model

The model over emphasis on Material aspects such as price and quality while

explained in significative and symbolic stimuli. On Social Stimuli aspect the model

does not cover the different social variable that covers different societies, geographic

region and how these factors influence the decision-making process. Also, the

influence religion and ethnicity been taken into account that also influences

consumer behavior. Also, the model cannot be generalized.

Weakness of EKB Model:

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‘The environmental and individual variables mentioned in the model have been

ushered with severe criticism due to the vagueness of their definition and their role in

the decision-making process.’ (Loudon & Bitta, 1993)

The model eludes the personality traits resulting in consumer choices.

The role of individual purchase motives is only considered to be constructive for

need recognition, and, thereby, this crucial theoretical aspect seems to be

undervalued in analyzing the decision-making process. (Bagozzi, et al., 2002)

Weakness of EKB Model:

The environmental and individual variables mentioned in the model have been

ushered with severe criticism due to the vagueness of their definition and their role

within the decision-making process. (Loudon & Bitta, 1993)

The model eludes the personality traits resulting in consumer choices.

The role of individual purchase motives is only considered to be constructive for

need recognition, and, thereby, this crucial theoretical aspect seems to be

undervalued in analyzing the decision-making process. (Bagozzi, et al., 2002)

Alternative theories for greater understanding of ethical

consumer decision-making

Sheth-Newman Gross Model is an alternative model to EKB model and Howard-

Sheth model.

Sheth-Newman-Gross Model of Consumption:

Much After the acclaimed Howard-Sheth model formulation in 1969, Prof. Sheth

along with Newman and Gross developed another advanced and comprehensive

model of consumer behavior comprising of five consumption values influencing

consumer choice behavior. These are Functional, social, conditional, emotional, and

epistemic in nature.

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Figure 1.4 the five values influencing consumer behavior

Source: (Sheth, et al., 1991) (Abdallat & EL- Emam, n.d.)

Function Condition Social

Consumer Choice Behaviour

Epistemic

Value

Emotional

Value

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The first value: Functional Value:

Sheth et al. claimed that functional value is the most important fact behind customer

choice and requires special attention.

They have defined four specific functional values based on the particular attitudinal

parameter of customers. These functions are mentioned below:

1. Utilitarian function: Utilitarian function is based on the basic proposition of

reward and punishment.

2. Value-expressive function: The customer response to a product or service are

often influenced by their core value, ethical beliefs or even extended-self. Hence can

be stated that value-expressive function, sometimes or the other, outweighs the

objective benefits a person might derive from the use of the product.

3. Ego-defensive function In order to protect oneself, either from external

environment embarrassments or internal feeling, some consumer resort to an ego-

defensive function.

4. Knowledge Function: Certain attitude is formed by need-driven for order,

structure, or meaning. The knowledge function is presented when a person is in an

ambiguous situation or wants to use a new product.

The Second Value: Social value:

The Social value looks at all primary and secondary reference groups that drive the

concept of ‘Social Imagery’ and subsequently the use of the product.

The third value: Emotional value:

The emotional feeling a consumer feels or their reaction to the usage of a product or

a nostalgic feeling, when they come across a specific product or advertisement of

the product, is accounted as emotional value.

The fourth value: Epistemic value:

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This Epistemic value is set of values that could enhance consumer perceived

satisfaction level obtained from usage of a product by fulfilling curiosity, knowledge

and exploratory needs.

The fifth value: Conditional value

Seth, Newman and Gross's model refers that the consumer may value a product

utility based on the situation. The same customer might be ready to pay even a

premium for a product depending on the occasion usage utility of the product.

This five consumption value model is a more recent model and even help determine

the ethical decision-making factors of the consumers.

Similarly, we marketers can consider following model and theories for consumer

research specifically considering the ethical decision-making.

• Solomon Model of Comparison process.

• Psychodynamic Approach.

• Behaviorist Approach,

• Cognitive Approach.

• Theory of Planned Behavior

• Humanistic Approach

• The theory of Trying

• The model of goal-directed behavior

• The Hunt and Vitell Model.

Conclusion

“It can be concluded that a common concern of all the ‘analytic’ model principally

underlies with the latent nature of many of the variables.” (Loudon & Bitta, 1993).

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Neither the Howard-Sheth model or the EKB model can be conclusively said to

represent the complete pragmatic process of consumer decision-making in the

marketplace. It seems to be difficult to predict with accuracy if the ethical or the

accurate values of all the observable and latent variables are considered to judge

consumer behavior. However the model does give considerable insight into

consumer behavior.

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