Journal of Business Ethics (2008) 77:377403 _Springer 2007
DOI 10.1007/s10551-007-9363-y
Well-being Marketing: An Ethical Business Philosophy for Consumer Goods Firms
ABSTRACT. In this article we build on the program of research in well-being marketing by further conceptual-izing and refining the conceptual domain of the concept of consumer well-being (CWB). We then argue that well-being marketing is a business philosophy grounded in business ethics. We show how this philosophy is an ethical extension of relationship marketing (stakeholder theory in business ethics) and is superior to transactional marketing (a business philosophy grounded in the principles of consumer sovereignty). Additionally, we argue that well-being marketing is based on duty ethics concepts, specif-ically the duty of beneficence and non-maleficence. Subsequently, we show how the well-being concept guides marketing decisions for consumer goods firms.
KEY WORDS: well-being marketing, marketing and quality of life, societal marketing, marketing ethics, social responsibility in marketing
Introduction
Much of the literature in corporate social responsi-bility has focused on six aspects of citizenship behavior: (1) corporate cause promotions, (2) cause-related marketing, (3) corporate social marketing, (4) corporate social philanthropy, (5) community vol-unteering, and (6) socially responsible business practices (Kotler and Lee, 2005). Corporate cause promotions involve corporate activities to increase awareness and concern for social causes (e.g., The Body Shop promoting a ban on the use of animals to test cosmetics). Cause-related marketing involves
M. Joseph Sirgy is Professor of Marketing and Virginia Real Estate Research Fellow at Virginia Tech (USA). Dong-Jin Lee is Professor of Marketing at Yonsei University (Korea).
corporate efforts designed to induce consumers to make contributions to causes based on product sales (e.g., Comcast donates $4.95 of installation fees for its high-speed Internet service to Ronald McDonald House Charities). Corporate social marketing involves corporate campaigns that support behavior change intended to improve public health, safety, the environment, or community well-being (e.g., Home Depot and a utility promoting water con-servation tips). Corporate philanthropy involves a firm making a direct contribution to a charity or cause in the form of cash grants, donations, and/or linked services (e.g., WaMu awards cash grants to fund professional development of teachers). Com-munity volunteering refers to incentives a firm provides its employees to volunteer their time to support local community organizations and causes (e.g., employees of a high-tech company tutoring youth in middle schools on computer skills). Socially responsible business practices involve business prac-tices designed to support social causes, improve community well-being, and protect the environ-ment (e.g., Starbucks working with Conservation International to support farmers to minimize nega-tive impact on their local environment).
Well-being marketing, the focus of this essay, can be viewed as a contribution to the literature involving the sixth aspect of corporate social responsibilitysocially responsible business practices. In that context, much has been written on socially responsible marketing practices in the marketing ethics literature. Much of the literature in marketing ethics can be grouped in two major camps: descriptive (positive) versus prescriptive (normative) models of marketing practice.
Descriptive or positive models of marketing ethics focus on explaining actual behaviors in an ethical situation (e.g., Hunt and Vitell 1986, 2006; Ferrell
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and Grasham, 1986; Trevino, 1986; Wortuba, 1990). The focus of these models is to describe how marketers behave in ethical dilemmas. These models attempt to capture the ethical decision-making process and all the organizational, social, cultural, situational, and personality related factors that influence the various components of the decision-making process.
Normative marketing ethics, on the other hand, is designed to advocate and establish guidelines for ethical marketing practice rather than attempt to report what practitioners say or do (Smith, 2001). Much has been written about prescriptive or nor-mative models of marketing. However, the vast majority of what has been done in this camp has focused on narrow topics such as design and man-ufacture of poor quality products, failure to ensure product safety, misleading advertising, among others (e.g., Cespedes, 1993; Mattsson and Rendtorff, 2006) and the prescriptive standards that marketers should adhere minimize the damage. With respect to general or overarching models of normative marketing ethics, Dunfee et al. (1999) found only four models that are distinctively normative. These are: Laczniak (1983), Williams and Murphy (1990), Reidenbach and Robin (1990), and Smith (1995). More recently, Laczniak and Murphy (2006) developed seven normative perspectives for ethically and socially responsible marketing.
Although much of the work in normative mar-keting ethics is indeed commendable, the emphasis so far has been on the non-maleficence aspect of mar-keting practice. That is, the focus has been on devel-oping a set of guidelines to ensure that marketers decisions are not likely to create damage to the firm s stakeholderscustomers, employees, distributors, suppliers, the environment, the local community, etc.
The work presented in this article focuses on normative marketing ethics by integrating two aspects of marketing ethics: marketing beneficence and non-maleficence. Thus, what we attempt to do here is to develop a more comprehensive perspective of normative ethics. We call this perspective well-being marketing.
The concept of well-being marketing
Marketing has the potential to enhance consumer well-being in significant ways by providing con-
sumers with goods and services that not only can enhance their overall quality of life but also do it safelyto the consumers themselves, to other pub-lics, and the environment. Reflecting this need, Kotler et al. (2002) emphasized marketing s impact on the quality of life by stating that marketers should determine the needs, wants, and interests of target consumers and deliver satisfaction more effectively and efficiently than competitors in a way that pre-serves or enhances consumer well-being. The firm should deliver superior value to customers in a way that maintains or improves the customer s and the society s well-being. The traditional marketing concept overlooks possible conflicts between con-sumer short-run wants and consumer long-run welfare (Armstrong and Kotler 2002). Our concept of well-being marketing is grounded in societal mar-keting as introduced by Kotler (1979, 1986, 1987).
Specifically, well-being marketing is a business philosophy that guides managers to develop and implement marketing strategies that focuses on enhancing consumer well-being through the con-sumer/product life cycle (acquisition, preparation, consumption, possession, maintenance, and disposal of consumer goods) and to do so safely in relation to consumers, other publics, and the environment. We define consumer well-being (CWB) as a desired state of objective and subjective well-being involved in the various stages of the consumer/product life cycle in relation to consumer goods. By providing need satisfaction over the entire consumer/product life cycle, well-being marketing guides the firm to establish long-term relationships with target con-sumers. Thus, the long-term objective of well-being marketing is the enhancement of CWB. In addition to enhancing CWB, well-being marketing pre-scribes that enhancement of CWB should not come at the expense of adverse conditions experienced by other organizational stakeholders (e.g., employees, the local community, the general public, and the environment).
Although much has been discussed about well-being marketing and its implications to CWB (e.g., Sirgy 2001), we still have a limited understanding regarding its ethical basis, strategic implications, and implementation (4 Ps). More specifically, we ask: how different well-being marketing is from other philosophic concepts of marketing such as the marketing concept and relationship marketing in
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guiding managerial decision-making? We answer the question by conceptualizing the domain of the well-being marketing construct and identifying its dimensions in terms of specific marketing mix decisions directly related to consumers marketplace experiences: product acquisition, preparation, con-sumption, possession, maintenance, and disposal. Understanding well-being marketing should help marketers use this philosophic concept that is con-sistent with both organizational and societal goals.
Consumer well-being (CWB)
In this section, we review various circumscribed attempts to conceptualize CWB and then present in more detail our own conceptualization of CWB. However, before we describe the various concep-tualizations of CWB, the reader should be aware of the distinction between the concepts of consumer satisfaction and CWB.
We view the American Consumer Satisfaction Index (ACSI) as highly representative of consumer satisfaction conceptualizations and measures. Much of consumer satisfaction research is guided by the theoretical notion that consumer satisfaction plays a major role in customer loyalty, repeat purchase, and positive word-of-mouth communications (e.g., Fornell, 1992; Fornell et al., 1996; Oliver, 1997; Szymanski and Henard, 2001). The goal is to enhance customer satisfaction for the purpose of ensuring higher levels of repeat patronage, ergo sales, market share, and profit.
The ACSI measure is based on the notion that customer satisfaction is determined mostly by per-ceived value, perceived quality, and customer expectations. It is based on a survey of actual users of major brands in various product categories. The survey includes questions capturing customer expectations, perceived quality, value perceptions, satisfaction, customer complaints, and customer loyalty (Fornell, 1992; Fornell et al., 1996). The exact measurement constructs are shown in Table I.
In contrast, the concept of CWB is inherently guided by a different meta-level concept, namely the link between consumer satisfaction and quality of life. In other words, the conceptualizations of CWB we review in this section are grounded on the implicit or explicit assumption that high levels of CWB reflect
TABLE I
The measurement constructs involved in the ACSI
· Expectation
Customer expectation about overall quality
Customer expectation about reliability
Customer expectation about customization
· Performance
Perception of overall quality
Perception of reliability
Perception of customization
· Value
Price given quality
Quality given price
· Consumer satisfaction
Overall satisfaction
Satisfaction against expectation
Satisfaction against the ideal
· Customer loyalty
Repurchase likelihood
Price tolerance (increase) given repurchase
Price tolerance (decrease) to induce repurchase
· Customer complaints
Source: Fornell, Claes, Michael D. Johnson, Eugene W. Anderson, Jaesung Cha, Barbara Everitt Bryant (1996), The American Customer Satisfaction Index: Nature, Purpose, and Findings, Journal of Marketing, 60 (October), 718.
high levels of consumer s quality of lifehigher levels of life satisfaction, overall happiness with life, absence of ill being, societal welfare, etc.
The acquisition model of CWB
The acquisition model posits that CWB is deter-mined by satisfaction with acquisition of consumer goods. For example, Meadow (1983) generated a measure of CWB based on the consumer s experience with retail institutions in purchasing food, housing, household operations, household furnishings, cloth-ing and accessories, personal care, medical care, rec-reation, transportation, and education. To reiterate, this approach focused on measuring overall acquisition or shopping satisfaction in one s local area. Based on the theoretical notion of satisfaction hierarchy (e.g., Andrews and Withey, 1976; Aiello et al., 1977), the author used a sample of 249 elderly consumers to demonstrate that life satisfaction can be predicted
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significantly from satisfaction with a host of retail establishments in the community.
The possession model of CWB
Others have focused on material possessions to capture CWB. For example, Nakano et al. (1995) examined consumers overall satisfaction with their material possessions and standard of living. As part of a larger investigation of consumer socialization, Nakano et al (1995) used a two-question measure to capture CWB, namely: How do you feel about your standard of livingthe things you have like housing, car, furniture, recreation, and the like? and How do you feel about the extent to which your physical needs are met? CWB is conceptualized as the composite of these items. In sum, CWB is construed in terms of satisfaction with one s ownership of consumer durables and other material possessions. Sirgy et al. (1998) found that satisfaction with material possessions influences overall life satisfaction especially for those consumers who are highly involved with material possessions.
The two-factor model of CWB
Day (1978, 1987) and Leelakulthanit et al. (1991) conceptualized CWB as consumer satisfaction with acquisition and possession of consumer goods (durable goods). Acquisition satisfaction refers to con-sumer satisfaction with experiences related to the purchase of consumer goods in traditional retail establishments in one s community. Examples include the assortment, quality, and price of goods available in local stores, the attractiveness of the stores, the courtesy and helpfulness of store person-nel, and after-purchase service provided by local stores (e.g., warranty policies). In contrast, the pos-session satisfaction focuses on subjective experiences related to material possessions (e.g., house/apart-ment, furniture, car/truck, clothing/accessories, savings, etc.) and overall satisfaction with those possessions. Leelakulthanit et al. (1991) found a significant relationship between acquisition/posses-sion satisfaction and life satisfaction, especially for older and low-income people.
The consumer/product-life-cycle model of CWB
Lee et al. (2002) argued that the dimensions of the consumer life domain are most appropriately con-ceptualized in terms of five stages of the consumer/ product life cycle: acquisition, possession, con-sumption, maintenance, and disposal (cf. Wilkie and Moore, 1999). They cited research evidence sug-gesting that consumers experience satisfaction and dissatisfaction across the entire consumer/product life cycle, and that consumer satisfaction with all the stages of the life cycle spills over onto other life domains affecting overall life satisfaction (e.g., Andrews and Withey, 1976; Campbell et al., 1976; Day, 1987; Lee and Sirgy, 1995; Meadow, 1983, 1988; Nakano et al., 1995). Specifically, acquisition satisfaction was defined as consumer satisfaction with respect to shopping and other activities involved in the purchase of consumer goods. Specifically, the authors identified seven factors of the acquisition experience that play a significant role in consumer satisfaction with shopping experiences, such as sat-isfaction with the quality, prices, hours, and services of stores in the local area. Possession satisfaction was defined as satisfaction that results from the owner-ship of major classes of consumer goods such as house or condominium, consumer electronics, and private transportation. Consumption satisfaction was defined as consumer satisfaction resulting from the use of consumer goods. It is closely related to but distinct from possession satisfaction, the difference being that possession satisfaction focuses on positive affect that flows from ownership per se, whereas consumption satisfaction focuses on satisfaction that flows from the actual use of the product. Maintenance satisfaction was defined as satisfaction consumers experience when they seek to have a durable product repaired or serviced. The authors concep-tualized maintenance satisfaction as having two major sub-dimensionssatisfaction with mainte-nance and repairs provided by service vendors in the community (i.e., repair services), and satisfaction with services that facilitate maintenance and repair by the owners themselves (i.e., do-it-yourself support services) such as satisfaction with price of replacement parts and tools and availability of necessary parts and tools in the local area. Disposal satisfaction refers to the degree of satisfaction consumers feel with the disposability of durable goods (e.g., satisfaction with
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the convenience and ease of disposal and the envi-ronmental friendliness of the product at the time of disposal).
There have been several empirical studies devel-oping and testing the validity of CWB measures in relation to several product categories such as per-sonal transportation and housing. With respect to personal transportation, Sirgy et al. (2006) found that consumer s perceived quality-of-life impact of cur-rent vehicles is largely determined by satisfaction with purchase, preparation for personal use, own-ership, use, and maintenance (i.e., various experi-ences across the consumer/product-life-cycle with a particular product). In relation to housing, Grzesko-wiak et al. (2006) developed and tested the validity of a CWB measure based on the consumer/product life cycle model. The CWB measure captured home resident s cumulative positive and negative affect associated with house purchase, use, maintenance, ownership, and selling.
Our definition of CWB
We define CWB as a state of objective and sub-jective well-being involved in the various stages of the consumer/product life cycle in relation to a particular consumer good. The consumer/product life cycle deals with various types of marketplace experiences a consumer has with a product from purchasing the product to its disposal. Specifically, the stages of the consumer/product life cycle are: product acquisition (purchase), preparation (assem-bly), consumption (use), ownership (possession), maintenance (repair), and disposal (selling, trade-in, or junking of the product). See Table II.
The distinction between objective and subjective well-being is important. Subjective well-being refers to feelings of satisfaction/dissatisfaction the consumer experiences in a manner that contributes to his or her quality of life. What we are talking about here is consumer-life satisfaction or the link between con-sumer satisfaction and life satisfaction (overall hap-piness in life, overall sense of subjective well-being, or the perception of life quality). In contrast, objective well-being refers to an assessment by experts (e.g., engineers, scientists, consumer economists, safety experts) regarding consumers costs and benefits as well as safety assessments (safety to consumers, others
that come in contact with the product, and the environment). Specifically, in relation to product acquisition, subjective well-being translates into con-sumer satisfaction with the shopping for and the purchase of the product in a manner contributing to the consumer s life satisfaction. In contrast, objective well-being in relation to product acquisition means experts assessment that the product is high quality and the price is fair and affordable; also that the purchase experience is safe to the purchasers, the sales people and facilities, the general public, and the environment.
With respect to product preparation, subjective well-being reflects consumer satisfaction with the preparation or assembly of the product in a manner contributing to the consumer s quality of life (life satisfaction). Objective well-being in relation to product preparation means that the preparation or assembly of the product is assessed by experts to be easy (or convenient) and safe to the people who elect to prepare or assemble the product, the assembly facility, the general public, and the environment.
In regards to product consumption, the subjective well-being dimension captures consumer satisfaction with the use of the product in a manner contributing to consumer s quality of life. In comparison, the objective well-being dimension captures experts assessment that the consumption of the product is significantly beneficial to those who use the product, and that the product is safe to consumers, the general public, and the environment.
Focusing on product ownership, subjective well-being means consumer satisfaction with the owner-ship of the product in a manner contributing to the consumer s quality of life. In contrast, the objective dimension captures experts assessment that the ownership of the product has appreciable value and is safe to the owners, the general public, and the environment.
Focusing on product maintenance, subjective well-being reflects consumer satisfaction with product maintenance and repair in a manner contributing to the consumer s quality of life. Objective well-being associated with product maintenance reflects experts assessment that the maintenance of the product is easy (or convenient), not costly (affordable), and safe to the people who are doing the maintenance, the maintenance or repair facility, the general public, and the environment.
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TABLE II
Our conceptualization of consumer well-being
Subjective well-being (consumer satisfaction)
Objective well-being (experts assessment of
consumers and societal costs and benefits)
Product acquisition Consumer satisfaction with the shopping for
and the purchase of the product in a manner
contributing to the consumer s quality of life
Product preparation Consumer satisfaction with the preparation
or assembly of the product for use in a
manner contributing to the consumer s
quality of life
Product consumption Consumer satisfaction with the use of the
product in a manner contributing to the
consumer s quality of life
Product ownership Consumer satisfaction with the ownership of
the product in a manner contributing to the
consumer s quality of life
Product maintenance Consumer satisfaction with product mainte-
nance and repair in a manner contributing to
the consumer s quality of life
Product disposal Consumer satisfaction with product disposal
(or trade-in or re-selling) in a manner con-
tributing to the consumer s quality of life
Experts assessment that
1 the product is high quality and the price is fair and affordable, and
2 the purchase experience is safe to the pur-chasers, the sales person/facility, the general public, and the environment
Experts assessment that the product is
easy (or convenient) and
safe to prepare or assemble to the preparer, the
general public, and the environment
Experts assessment that the consumption of the product is
significantly beneficial to consumers and
safe to consumers, the general public, and the environment
Experts assessment that the ownership of the product
has appreciable value and
is safe to the owners, the general public, and the environment
Experts assessment that the maintenance of the product is
6. easy (or convenient),
7. not costly (affordable), and
8.safe to the repair person/facility, the general public, and the environment
Experts assessment that the disposal of the product is
easy (or convenient),
not costly (affordable), and
safe to the disposal person/facility, the general public, and the environment
Finally, in relation to product disposal, subjective well-being signifies consumer satisfaction with the disposal (junking, trading-in, or re-selling) of the product in a manner contributing to the consumer s quality of life. On the other hand, objective well-being means experts assessment that the disposal of the product is easy (or convenient), not costly (or affordable), and safe to the person doing the disposal, the disposal facility, the general public, and the environment.
We will discuss those aspects of subjective and objective well-being of CWB in greater detail in the
remainder portions of the article. Therefore, the reader should expect greater clarity of the CWB concept and how it guides well-being marketing decisions as we move along into the article.
Comparing the ethics of three marketing concepts: transactional, relationship, and well-being marketing
Throughout the remainder part of the article, we will describe well-being marketing in terms of the
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traditional elements of the marketing mix (i.e., the four Ps). In doing so, we contrast well-being mar-keting with two other forms of marketing, namely transactional marketing and relationship marketing. We do so to show how well-being marketing can be distinguished from traditional marketing (as captured in transactional and relationship marketing). We argue that well-being marketing is based on a busi-ness ethics philosophy that is more adapted to con-temporary society. To make this argument, we do the following in this section. We argue that the ethics supporting transaction marketing is based on the concept of consumer sovereignty of business ethics. We then argue that consumer sovereignty falls short in several ways, and thereforeit is not well-suited to contemporary society. Then we focus on the rela-tionship marketing and argue that this approach to marketing is grounded in stakeholder theory of busi-ness ethics. We then argue that stakeholder theory serves society better than transaction marketing, but nevertheless it also falls short. Finally, we define well-being marketing and show how this approach to marketing is grounded on business ethics concepts of duty of beneficence and non-maleficence. Our goal is to convince the reader that well-being marketing is most ethical in serving the business community, consumers at large, and society overall.
The ethics of transaction marketing
Transaction marketing is marketing guided by neo-classical economic theory. It focuses on profit max-imizing by recruiting more and more customers to purchase the firm s product. Sales reflect the notion that the firm serves society by marketing a product that consumers need or want. A firm meeting market demand for consumer goods is a firm that serves society. Furthermore, the more sales, the more the firm prospers financially. Financial prosperity trans-lates into more jobs and economic security for the firm s employees. The firm s financial prosperity also benefits society through taxationthe more the firm sells, the more it is taxed, the more the tax revenues are used by government to provide public services that benefit society at large. Similarly, the more people are employed, the more tax revenues are generated through personal income taxation, which in turn serves society at large.
Competition among firms to generate higher and higher levels of sales is the motivating force that drives firms to develop higher quality products and selling them at low prices. Thus, the drive to sell serves society by motivating the business enterprise to innovate and develop new and better quality products, and market those products at lower prices than the competition. When consumers purchase high-quality products at low prices, they reward firms that develop better products at lower prices. Thus, firms that are able to meet consumers needs and wants for better products at lower prices sig-nificantly benefit (financially speaking), and those that cannot compete fall by the way side (e.g., Friedman, 1962, 1970; Scherer, 1971; Smith, 1776).
Consumer sovereignty theory posits that society benefits when consumers vote with their pocket-books (e.g., Nelson, 1970; Smith, 1995; Smith and Quelch, 1993, pp. 3034; Stigler, 1971; Thorelli and Thorelli, 1977). To do so, consumers have to be informed about the product s quality and price. Consumer behavior is based on the assumption that consumers shop around and buy the highest quality product at the lowest price. Consumer sovereignty reflects the idea that consumers can serve society by engaging in rational decision-making and exer-cising their economic votes wisely. By selecting products that provide best value, consumers reward manufacturers that best serve consumers. Much of today s business laws (e.g., anti-trust laws, con-sumer protection laws) are designed to ensure that consumers are well informed about their market choices. If they are well informed, they serve society by rewarding efficient firms that deliver a better mousetrap at a lower price and weed out inefficient firms that cannot deliver on the same terms.
Nevertheless, market inefficiencies do occur in the form of sales that do not reflect market demand and the fulfillment of consumer wants. For example, Galbraith (1956, 1973, 1977, and 1985) has argued that many firms survive and prosper not because they market higher quality products at lower prices. They survive and prosper because they have countervail-ing power. They overwhelm their competitors through massive advertising and marketing com-munications campaigns. They also may control the channels of distribution, thus restricting consumer access to competitors. Furthermore, it has been
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argued that consumer sovereignty is increasingly becoming less relevant in the age of high tech, and that it fails to sufficiently guide ethical marketing practice (Sirgy and Su, 2000). This is due to the fact that many consumers lack the opportunity to be exposed to objective information about the quality and prices of competing high-tech products, and consumers also lack the ability and motivation to process this information (see Table III).
The ethics of relationship marketing
Relationship marketing is an emerging paradigm in marketing thought that focuses on the development and maintenance of quality relationship between ex-change partners for mutual benefit. Relationship marketing refers to all marketing activities directed towards establishing, developing, and maintaining successful relational exchanges (Morgan and Hunt, 1994). That is, relationship marketing is an integrated effort to identify, maintain, and build up a network with customers for mutual benefit over a long time. The conceptual domain of relationship marketing includes concepts such as trust, commitment, and satisfaction (e.g., Dwyer et al., 1987; Ganesan, 1994; Parvatiyar and Sheth, 1994; Morgan and Hunt, 1994).
According to the stakeholder view of the firm (Freeman, 1984), a firm operates in a network of relationships. That is, a firm engages in various exchange relationships with many exchange partners including suppliers, customers, competitors, other functional departments within the organization, and various stakeholders in the society (e.g., Carroll, 1989; Evan and Freeman, 1988; Goodpaster, 1991; Morgan and Hunt, 1994; Robin and Reidenbach, 1987; Wheeler and Sillanpaa, 1997). Stakeholder theory is a grounded in the literature of business ethics and corporate social responsibility (e.g., Ca-roll, 1989). Stakeholders are typically classified as external stakeholders, internal stakeholders, and distal stakeholders (e.g., Sirgy, 2002). Internal stake-holders are other functional departments and business units within the firmother than the marketing department. External stakeholders refer to stakeholders outside of the firm, which survival and growth of the firm depends on (e.g., customers, shareholders, dis-tributors, and suppliers). Distal stakeholders refer to stakeholders that influence the surviva