Consumer Behavior Analysis

(A) Rational Approach to Consumer Choice

Donald A. Hantula, Victoria K. Wells, Donald A. Hantula, Victoria K. Wells

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781317850755
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Consumption is the primary economic activity in our post-industrial society. We are consumers, not producers. Consumer behavior analysis is leading heterodox marketing scholarship and innovative applied behavioral work, with much to offer both constituencies. This volume shows how consumer behavior analysis fits within a larger-scale approach to marketing, consumer psychology, behavior analysis and organizational behavior management. Describing both theoretical analyses and empirical studies including laboratory experiments in e-commerce, in-store experiments in grocery shopping, and an analysis of the counterfeit goods market, this book is a working example of translational research. It contains tools and studies to help understand contemporary consumer behavior, particularly for those in marketing. Scholars will appreciate the theory and real-world applications evident in each chapter when considering their own research direction. All students of marketing theory, behavior analysis and consumer choice will find this collection a thought-provoking tool for further understanding of a new behavioral approach to marketing strategy, consumer decisions and marketing firms.

This book comprises articles originally published in the Journal of Organizational Behavior Management.

Introduction: The Analysis of Consumer Behavior

Victoria K. Wells

Durham University Business School, Durham University

Donald A. Hantula

Temple University, USA

The chapters in this book reflect the development of, and current thinking in Consumer Behavior Analysis (CBA) which stands at the intersection between behaviour analysis, consumers and organizations. First presented in a special issue and in a later special section of the Journal of Organisational Behavior Management in 2010, the papers reproduced as chapters in this volume alongside three other relevant recent papers also published in the Journal of Organisational Behavior Management (JOBM) are a collection of contemporary research and theory in CBA. This volume represents an expansion of the Organizational Behavior Management (OBM) model from its largely management-centered employee behavior focus to include explicitly the behavior of consumers of the goods and services that these employees make and provide.

Behavior analysis and consumer behavior share a long history since the first applications of behavioral psychology in industry, as exemplified by Watson’s work in the early 20th century (DiClemente & Hantula, 2000) and more contemporaneously the application of behavior analytic principles to marketing, consumer choices. Changing individual consumer behavior has long been part of applied behaviour analysis (DiClemente & Hantula, 2003). Indeed, some of this behavior analytic work has appeared in the pages of a number of marketing journals over the years such as the Journal of Advertising Research (Lindsley, 1962), Journal of Marketing (Nord & Peter, 1980; Peter & Nord, 1982), Journal of Consumer Research (Janizewski & Warlop, 1993) and Psychology & Marketing (Till, Stanley, & Priluck, 2008).

Organizational Behavior Management emerged in parallel, with initial studies in the 1960s and 1970s establishing it as a discipline in its own right by the 1980s and developing further in the ensuing years (Dickinson, 2000). OBM is an applied science that recognizes that “behaviour is an import element of what ultimately counts as performance in organizations” (Mawhinney, 2000, p. 7). OBM applies psychological principles of organizational behavior and the experimental analysis of behavior to organizations to improve individual and group performance and worker safety. A review of JOBM articles published from 1987–1997 point noted that the top three problems addressed were productivity and quality, customer satisfaction, and training and development (Nolan, Jarema, & Austin, 1999), with customer satisfaction being of most interest to the present edited collection.

Consumers are an important part of the organization, and hence fall under the realm of OBM. While customer satisfaction has been of interest to those in OBM, a more comprehensive approach, taking into account a wider appreciation of this has not been championed. A range of journal articles have been published bringing together OBM and consumer behavior analysis and include work on brand preference (Martinko, 1987), the use of prompts and suggestive selling (Ralis & O’Brien, 1986; Martinko, White, & Hassell, 1989; Johnson & Masotti, 1990; Ebster, Wagner, & Valis, 2006; Milligan & Hantula, 2005 (the latter is reproduced in this volume)), performance feedback and social reinforcement (Weisman, 2006), theft reduction (Carter & Holmberg, 1992) and sales management (Martinko, Caset, & Fadil, 2001).

However, a thoroughgoing behavioral analysis of consumer choice, behavior, and marketing was lacking until a number of researchers turned their attention to developing Consumer Behavior Analysis (CBA) from the late 1990s. Those new to the area may find a definition of CBA useful. Consumer Behavior Analysis is a synthesis of behavioral economics and psychology with the real world complexities of consumer choice in a marketing-oriented economy (Foxall, 2001). CBA adds to work in behavioral economics by combining it with marketing science, the empirical study of patterns of consumer choice in affluent, marketing oriented economies. Studies of choice inspired by Herrnstein’s (1961) matching law and Hursh’s (1980) extension to analyses of substitutability and complementarity within behavioral economics provided firm grounding for a theoretically rich behavioral analysis of consumer behavior. An article by Foxall (1998b) offered a radical behaviorist interpretation of consumer behavior called the Behavioral Perspective Model (BPM). A chapter by Hantula, DiClemente, and Rajala (2001) introduced the Behavioral Ecology of Consumption and brought concepts and methods from work in Foraging Theory (Stephens & Krebs, 1986) and matching theory into the analysis of consumer behavior. Further theoretical grounding was also provided in an inaugural essay at the beginning of the Millennium (Foxall, 2001), and research to that point was extensively reviewed in the three volumes of Consumer Behaviour Analysis: Critical Perspectives in Business and Management (Foxall, 2002). These initial forays into CBA were then followed by a number of articles expanding the scope of the area (for example see Foxall & James, 2001, 2003; DiClemente and Hantula, 2003; Romero, Foxall, James, & Schrezenmaier, 2006; Foxall, Oliveira-Castro, James, & Schrezenmaier, 2006, 2007). These supplied a solid conceptual foundation for the more complex empirical and theoretical analyses presented in these pages.

While the synthesis of OBM and consumer behavior noted above has touched upon some aspects of marketing science it covers only a small range of its applications theories and approaches. Consumer Behavior Analysis has sought to explore and explain a much wider range of marketing theory and strategy. Marketing uses the analogy of the 4Ps or the marketing mix (first developed by McCarthy, 1960): Product, Price, Place and Promotion to highlight the four key controllable factors that marketers have at their disposal and which must be determined taking into account the uncontrollable factors such as the existing business situation and external influences (for example: government policy and social and cultural elements). Consumer Behavior Analysis has explored all 4Ps, to differing extents. The majority of its work has concentrated on the P of product, the central focus of marketing, as without the product there is no need for any of the other elements. Aspects of product that have been studied from a product perspective include brand and product choice, multibrand purchasing, substitutes and complements, product formulation, repeat purchasing, product differentiation (Foxall & James, 2003; Foxall, Oliveira-Castro, James, & Schrezenmaier, 2006; Oliveira-Castro, Foxall, & Schrezenmaier, 2006; Oliveira-Castro, Foxall, James, Roberta, Pohl, Dias, & Chang, 2008) and brands and branding (Oliveira-Castro, Foxall, Yan & Wells, in press). The effects of price have been studied by the exploration of retail prices (Oliveira-Castro, Foxall, & Schrezenmaier, 2007; Oliveira-Castro, Foxall, & James, 2008; Sigurdsson, Foxall, & Saevarsson, this book; Smith & Hantula, 2008). Place and Promotion have been explored more recently including work exploring retail choice (James, 2009; James & Foxall, 2010), situational influences (Foxall, Yan, Wells, & Oliveira-Castro, 2012), online environments (Fagerstrøm, this book; Hantula, Brockman, & Smith, 2008) and point of purchase display (Sigurdsson, Engilbertsson, & Foxall, this book).

CBA also seeks to go beyond the 4Ps conceptual framework and has explored different types of marketing including social marketing (Foxall, Oliveira-Castro, James, Yani-de-Soriano, & Sigurdsson, 2006), services marketing (Wells & Foxall, 2011), marketing strategy (segmentation in particular, see Wells, Chang, Oliveira-Castro, & Pallister, this book) and consumer mis-behavior (the purchase of counterfeit products in particular, see Xiao & Nicholson, this book).

Consumer behavior analysis represents a truly interdisciplinary approach to consumer choice and marketing science, as can be seen by the author affiliations contained in this book which include business schools, psychology departments and technology schools. CBA also celebrates a diversity of viewpoints. It is not, and has not been developed to be, an attempt to assert the importance of behavioral psychology to the exclusion of cognitive or other perspectives on consumer choice which are considerably more common in the marketing science literature. In fact, Foxall (2001) states that a central component of CBA and in particular the BPM, is to use competing concurrent theories of behavior as standpoints from which to critique one another. Recent theoretical work has emphasized this broader theoretical perspective (Foxall et al., 2007; Hantula, 2012). Indeed a number of the chapters within the volume also actively and directly compare, contrast and in some cases integrate with existing conventional wisdom in their respective areas.

The majority of the chapters within this book come directly from, or were inspired by, the 1st International Symposium on Consumer Behavior Analysis which was held in Cardiff, UK in September 2007 and organized by the Cardiff Business School Consumer Behavior Analysis Research Group (CBARG). Behavior analysts and marketing scientists came together to share perspectives, methodologies and data. What emerged from this meeting was a clear consensus that Consumer Behavior Analysis is at the leading edge of innovative behavioral work and heterodox marketing scholarship, with much to offer both constituencies. As noted, the papers were then published as a special issue and a special section of JOBM in 2010 (Volume 30, 2/3). These papers are reproduced as chapters in this volume. Three other papers, all also published in JOBM, are also included within the volume to widen the scope of the book and to highlight other research currently taking place within the OBM and CBA intersection. These papers are interspersed in the relevant sections below.

Theoretical and Conceptual Advances in Consumer Behavior Analysis

The first four chapters of the book explore current theoretical and conceptual approaches to the area of consumer behavior analysis. The first full chapter in this volume provides a background and introduction to the underpinning, evolution and extension of the BPM, a model of consumer behavior based initially on radical behaviorism and asks whether this approach is a feasible and acceptable alternative to the cognitive stance taken by the majority of consumer psychologists and researchers. It explores facets of the research programs, many of which are taken further and studied conceptually and empirically in chapters within the book and have been discussed briefly already.

The second chapter by Fagerstrøm, Foxall and Arntzen, extends Agnew’s (1998) analysis of the establishing operation in OBM by integrating Motivating Operations (MO) with the consumer behavior setting aspect of the BPM. The chapter continues in the Watsonian tradition and provides a behavioral approach to the understanding of motivation of consumers and distinguishes between many different types of MOs, and aligned areas (for example discriminative stimuli, value and behavior altering effects, conditioned MOs and rule governed behavior), many of which have not been explored fully in relation to consumer research.

The third conceptual chapter by Nicholson and Xiao draws on evolutionary psychology and behavioral-ecological frameworks in order to interpret both general reinforcement and the bifurification of reinforcement suggested by the BPM. In keeping with the grounding in evolution advanced by the Behavioral Ecology of Consumption (Hantula, et al., 2001), they advocate a consumer behavior analysis informed by evolutionary theory, expanding inquiry beyond proximal causes to more distal causes of behavior.

The fourth conceptual chapter by Tosti and Herbert was published in JOBM in 2009, as the special issue on which this book is based, was being created. This chapter highlights an assessment of the relationship between consumer and organizational practices. It applies a behavioral systems approach building on the work of Krapf and Gasparotto (1982) and Brethower (2000) to discuss the behavioral characteristics of a customer centered organization with the consumer as an important stakeholder.

Empirical Research in Consumer Behavior Analysis

Field research has been a hallmark of both organizational behavior management and consumer analysis from their inceptions and is also a vital part of the consumer behavior analysis stream of research. Empirical research in general can utilize many different methodologies. This is no difference in the study of consumer behavior analysis where a number of approaches have been used and are reflected in the chapters of this section.

The first chapter within this section includes a paper from JOBM published in 2005. This paper (Milligan & Hantula, 2005) experiments with suggestive selling through a simple prompting procedure in a small business. By modifying a key employee behavior the study had a significant effect on customer behavior within the store resulting in a fourfold increase in sales by the end of the year and became one of the earliest papers to test the realm of OBM research and application within a consumer environment. This paper represents an early ‘full circle’ approach of managing and measuring both employee and consumer behavior within the OBM paradigm, and using consumer behavior as the dependent variable to index the effects of changes in employee behavior in a live store environment.

The next three chapters in this section utilize secondary consumer panel data building on a range of earlier studies (e.g. Foxall & James, 2003; Romero, Foxall, Schrezenmaier, Oliveira-Castro, & James, 2006; Oliveira-Castro, Foxall, James, Roberta, Pohl, Dias, & Chang, 2008). The first of these uses matching theory which represents perhaps the most well-developed and quantitatively sophisticated research stream in behavior analysis. Foxall, Wells, Chang and Oliveira-Castro in their chapter on substitutability and independence use a matching analyses approach to explore the behavior of consumers with regards choices at product and brand level and their reactions to price, extending earlier work in the area. In the second chapter based on secondary data Oliveira-Castro, Foxall and Wells also utilize the matching law but adapt its parameters including the three types of consequences (utilitarian, informational and aversive) proposed by the BPM. The third chapter based on secondary data extends into marketing strategy and one of its central concepts of segmentation. Wells, Chang, Oliveira-Castro and Pallister present a consumer behavior analytic approach to segmentation incorporating aspects of the BPM. The chapter segments consumers via their choices of products that demonstrate differing levels and combinations of utilitarian and informational reinforcement. The proposed segmentation base of the BPM is also contrasted with and explored alongside more traditional demographic variables. All three chapters use a very large sample of consumers buying fast moving consumer goods, those products purchased often and generally in a supermarket environment, for example with as many as 75,847 single purchases for cookies within the dataset. The first and last chapters in this section use the purchase of cookies as their focus ...