Marketing and Consumer Well-being – summary
Lecture week 1:
Van Ittersum K. (2015), Marketing and Consumer Well-being, Inaugural speech
https://www.rug.nl/staff/k.van.ittersum/oratieengels.pdf
Marketing often does not have a very great reputation. But marketing also has some facets that could contribute to
consumer well-being.
Marketing: the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners, and society at large.
- Within marketing academia there is a growing call to move beyond mere value creation and aim for the creation of
shared value by adopting “policies and operating practices that enhance the competitiveness of a company while
simultaneously advancing the economic and social conditions in the communities in which it operates”
- Instead of optimizing short-term financial performance and going beyond corporate social responsibility programs
that tend to be only peripherally related to the actual business, companies should take a broader perspective to
doing business and acknowledge the relevance of the well-being of their customers: creating economic value by
creating social value.
Why is the shift from marketeers contributing to consumer well-being happening?
Pareto optimum: every individual wants to strive for their best own well-being, and in doing so, the total social
welfare will be optimized. The total social welfare is optimal when no further redistribution of resources can produce
an increase in benefit to one individual without a larger offsetting loss to someone else. So, the individual welfare
cannot increase by offsetting loss to someone else.
- Problem: some people are better of then others. Because of two flawed assumptions:
o It assumes that all individuals have freedom of choice—an unconstrained access to market offerings from
which an individual gets to choose.
o It assumes that individuals are fully capable of making informed choices.
Marketing—marketing academics as well as practitioners—can play a critical and profitable role in helping reduce the
inequalities by explicitly addressing both flawed assumptions by increasing the freedom of choice and the capabilities
of consumers to make informed choices.
Freedom of choice: There are places where freedom of choice is lacking, because of various factors, there is not
enough availability and better options are hard to access. Also, healthier, and sustainable options are less affordable.
- Actual availability & accessibility.
o Food desert: areas where the availability of healthy food is lacking. Poverty areas. Tons of fast-food
restaurants, but not a lot of healthy food options.
- (perceived) affordability.
o Often, non-healthy foods are seen as more expensive.
o In food desert places: grocery stores are more expensive. Because of the products being more expensive,
there is more stealing so a higher crime rate in this neighbourhood. Also, more non-chain small grocery
stores offering limited assortment. Even if you know the cause of the problem, a solution could not turn out
well.
Capability of making informed choices: Why do good intentions not translate into behavior? people want to make
the most sustainable and healthy choices. But people can have this intention, but they do not do it.
- Intention-behavior gap: gap between intention and actually doing it.
- Value-action gap: people value sustainability but actually doing it is not likely.
Sustainable purchase intentions are high, but the market share of the sustainable products is very low.
Why do we have an intention-behavior gap:
- Mindless consumers: With a lot of decisions we take, we do automatically. We don’t have mental capacity, time to
make well thought out choices every time. We don’t think a lot about what we purchase, how much, what am I
going to eat, we do not think what to do with leftovers. We cannot process all the pros and cons and make a
perfect choice; we are not capable of doing that. Taking these shortcuts can turn into problems.
- Environmental factors: where to put a product. Study where the placement of cheese in the salad bar influences
choosing the product. So, the difference in choosing when you need to reach for the product or if it is easy to grab.
Likelihood dropped by 15% if the cheese was further away. Plate size, cup size. You don’t think about this. Also,
economic development.
- Psychological factors: different theories. Explained below.
What is consumer well-being:
a state of flourishing that involves health, happiness, and prosperity. Two perspectives:
1. Hedonic perspective: focuses on happiness and defines consumer well-being in terms of pleasure attainment
and pain avoidance.
, 2. Eudaimonic perspective: focuses on the actualization of human potentials and defines consumer well-being in
terms of the degree to which people are realizing their true nature.
How acknowledging inequalities in terms of the freedom of choice and consumers’ ability to make informed
choices may yield win-win opportunities for companies and consumers: example of obesity.
When people are obese, they cost a lot for the society. How do we empower these people?
- Freedom of choice: people must be able to freely choose healthy foods, universally. Healthy food is less available
in low socioeconomic neighbourhoods. So, accessibility is limited. Also, higher price for healthy food.
- Capability to make informed choices: consumers frequently run out of cognitive resources while shopping, putting
them at risk to purchase unhealthy food. Also, when eating, plate size can influence.
Win-win solutions
So, when marketers only focus on profitability and ignoring consumers, they may contribute to the obesity problem
(or any other societal issue). Firms that improve consumers’ freedom of choice and choice-making capabilities in the
marketplace may indeed benefit by attracting more and new customers.
- Acknowledging the limitations of freedom of choice could offer opportunities for companies, such as introducing
new food options or lowering the price.
- Understand limited cognitive capability could be influenced for example by using smaller plates, because then less
food gets wasted (better for company), or help people budget better, so they are more satisfied (better for the
company).
Burroughs, J. E., & A. Rindfleisch (2011). What welfare? On the definition and domain of consumer research
and the foundational role of materialism. In D.G. Mick, S. Pettigrew, C. Pechmann, & J.L. Ozanne (Eds.),
Transformative consumer research for personal and collective well-being (pp. 249-266). NY: Routledge.
Transformative consumer research:
A movement for enhancing consumer welfare. There is more interest.
4 categories:
1. Suboptimal decision making: A lot of (often cognitive) deficiencies (tekortkomingen) that lead consumers to make
poor consumption choices, either because they forego a better choice or should have chosen to not consume at all.
All normal consumers experience deceptions, choice biases, social pressures etc.
2. Consumption-related disorders: Psychological afflictions (aandoeningen) that manifest in various consumption
settings. For example, compulsive consumption, addiction, or dependency.
3. Macro social concerns: institutional structures that dictate access to material resources and services: poverty,
economic development, health care access. Research can focus on these topics to empower consumers.
4. Materialism: the importance or value placed on the acquisition and ownership of material objects, as opposed to
other important sources of meaning (family, community). How do these values influence consumer welfare,
mostly negative influence on consumer well-being. Key elements of consumer welfare.
These topics can overlap and influence each other and therefore they can also be researched together.
Consumer welfare:
- Universal definition is lacking. This could cause that different researchers interpret it differently.
- A state of flourishing that involves health, happiness, and prosperity. Seven dimensions: emotional, social,
economic, physical, spiritual, environmental, and political.
Individual and psychological perspectives on consumer welfare
- Individual well-being is view through rational choice theory: individuals carefully select and consume products
because they expect to benefit from these purchases. But sometimes, people choose wrong things due to
deceptions or biases. So, they do not benefit maximally from these purchases.
- Because of the limitations of the rational choice theory, there is a lot of focus in research in understanding the
psychological aspects of consumer welfare.
- Most research on materialism: bad for both mind and body.
Economic and societal perspectives on consumer welfare:
- Societal: poverty, overconsumption, sustainability.
- Social welfare function: welfare as the sum of the total wellbeing of all the citizens that comprise a society. The
goal is to maximize the total wellbeing.
- This maximization is like the pareto principle explained above and can not be satisfied because of the two flaws:
freedom of choice and capability to make informed choices.
Material trap:
How a materialistic orientation unknowingly traps consumers into a set of behaviours that hurt to both themselves and
society. Material values are formed at a young age and are adaptive responses to developmental, economic, social, or
existential insecurity. So mostly nurture, but part of it is innate in our brain.
- It is difficult to avoid materialism because it develops so early.
- Research has shown that materialism decreases life satisfaction, even though a lot of people think they would be
happier when they have just a little more money, this is not the case.
, - Materialism can also be harmful to collective well-being; our economic system is predicated on continually
expanding cycles of growth and consumption, which is hurting the planet. We are in the material trap: a situation
in which the short-term payoffs of consumption undermine the longer term personal and societal benefits of
moderation and restraint.
Escaping the material trap:
Humans have three powerful endowments for escaping the material trap in the forms of our mental capacities for
social organization, future thinking, and analogical reasoning. The solutions are:
- Aligning individual and collective interests
Humans have a propensity to make decisions that weigh individual benefits but discount societal costs. But there are
institutional arrangements to overcome these divergences, like conventions, rules, laws, that are designed to elicit
mutually beneficial behaviours.
- Narrowing the conceptual distance between micro motives and macro consequences.
Humans have the unique capability to think and plan about the future. When we concretize the macrosocial
consequences of micromotivated decisions before these consequences become irresistible, we could escape the
material trap. The distance between these two motives needs to be smaller.
- Framing behaviours to raise saliency of their impact.
Analogical thinking to escape the material trap.
o For example: it is difficult to think about there have … people died because of this issue, but it is easier to
comprehend there are … dying every hour because of this issue. By leveraging our capacity for analogical
reasoning, statistical reframing can raise the saliency of the material trap.
o Provide alternative sources of meaning and security because people do need it.
Failure to escape the material trap:
Currently, there are a lot of problems that are happening and causing us to stay in the material trap and drain the
resources of our earth.
Reynolds, Thomas J., and Jonathan Gutman. "Laddering theory, method, analysis, and
interpretation." Journal of Advertising Research 28.1 (1988): 11-31.
There is more and more attention given to researching personal values in marketing. Two perspectives: macro (broad
societal viewpoint) and micro (individual psychological perspective).
- The macro approach involves classifying consumers into predefined groups using surveys, such as the VALS
methodology. This approach targets products towards these general groups. However, it lacks insight into how
specific product features fit into consumers' lives, missing the personal relevance of products.
- The micro approach, based on Means-End Theory, emphasizes the connections between product attributes, the
consequences these attributes offer, and how they relate to personal values. This perspective suggests that
consumers select products based on attributes that help achieve desired consequences aligned with their values.
Laddering:
Laddering is a specialized interviewing technique that aims to uncover connections between consumers' perceptions of
product attributes (A), the consequences (C) these attributes offer, and their personal values (V). These connections,
known as perceptual orientations or "ladders," form the basis for distinguishing between products in a category.
- uncovers connections between key elements like product attributes, consequences, and personal values. This
technique helps create a more direct understanding of consumers' perceptions and their relationship with products.
- For instance, the technique involves asking questions like "Why is that important to you?" to understand why
certain attributes or consequences matter to consumers. The data collected from such interviews is then analysed
by summarizing key elements and creating a hierarchical value map (HVM) to visually represent the connections
between attributes, consequences, and values.
- This qualitative information helps understand consumers' underlying motivations regarding a product category.
Each path from an attribute to a value represents a potential way consumers perceive the product.
- Crucial for marketing strategies: image positioning, how are we in the brain of the consumer.
Doing a laddering interview: interview environment
- Create a non-threatening setting so that people can introspect about their perceptions. Emphasize there is no
wrong or right. Make sure that the environment is not biased and without judgement so that people express their
true feelings.
- Interviewers act as facilitators, guiding the discovery process, and must initially create a sense of vulnerability to
establish rapport. While maintaining control, they employ an unstructured format with direct yet open-ended
questions like "Why is that important to you?" to delve deeper into respondents' motivations.
Laddering methods:
Three general methods to extract key distinctions from consumers:
1. Triadic Sorting: Involves presenting sets of three products to elicit distinctions. Respondents compare and
contrast, focusing on similarities and differences within the triads.
