Consumers' Intrinsic and Extrinsic Valuation in Retail Channels - Research Paper Example

Consumers' Intrinsic and Extrinsic Valuation in Retail Channels May 13, 2006 [Insert [Insert [Insert Consumer values in their purchases often have both hedonic (pleasurable) and utilitarian (necessary) traits in various channels of retail, and consumption delivers contentment on both a utilitarian and hedonic scale through various retail channels. To better understand both hedonic and utilitarian constructs, first the research by Babin and Darden is explored to draw conclusions for further research throughout the following research paper. The following research uses semi-structured interview method. This was chosen because it allows for the respondents to describe their subjective and empirical of their shopping experience. The semi-structured interview research method was chosen because it allows for the qualitative and emotional constructs of the consumers regarding their purchases to be examined. This research examines how hedonic versus utilitarian consumption can vary in typical purchase situations, depending on the decision context, and the manners in which consumers justify their purchases with their own values of time, money and method. Key Words: Hedonic; Utilitarian; Consumer Value; Retail Chain; Consumption; Interview Hedonic and Utilitarian Consumer Values Babin and Darden's article "Work and/or Fun: Measuring Hedonic and Utilitarian Shopping Value" focuses on the dimensions of hedonic and utilitarian consumer purchases, with the "shopping as work" and the "shopping as fun" consumer experiences. The shopping experience is an activity in which both the utilitarian based need and the hedonic based desire are important dimensions of the consumer's shopping experience because shopping involves more than the economics of supply and demand, there is also the social and psychological aspect. These dual dimensions are scaleable to recognize "formally that a shopping experience can be valuable, or valueless, in more than one way" (Babin and Darden p 644 1994). The statement 'in more than one way,' as it approaches the valuation of consumption is the theoretical view that consumers have scaleable utilitarian and hedonic desires in a psychological and physical sense, as well as the fact that customers have behavioral responses to these senses. Hedonic and Utilitarian Concepts The traditional concepts of cost and benefit values are perceived as having characteristics of exclusively product and price, the standard economics of supply and demand where the consumers experience is exclusively based on the products quality and price evaluations to control consumption choices and demands, and yet this does not define the reasoning of consumers emotional connections, where "A fourth definition equates value with an overall assessment of subjective worth considering all relevant evaluative criteria" (Babin and Darden p 645 1994), in a sense the overall assessment is the consumers emotional constructs, the sociological and psychological desire to feel rewarded in more than the physical sense of achievement. Babin and Darden analyze that shopping has both utilitarian and hedonic traits, where a methodology only encompasses the consumable and its dimensional and monetary values lacks the ability to fully measure the shoppers' experience, a concept expressed as having importance in other research, although "Far less research has been conducted to examine whether contrast effects occur among hedonic experiences (i.e., experiences of pleasure or pain)" (Novemsky and Rattner p 507 2003). Babin and Darden's research recognizes the empirical and "experiential perspective," with the value of the experience being the key outcome variable as described by Holbrook. The researchers reveal Holbrook statement on value as having "an interactive relativistic preference experience," meaning that the experience and value are relative to one another in the sense of importance the consumer places on those as well as on the actual purchase. The initial conclusion is that both utilitarian and hedonic behaviors are measurable by experiential and empirical methods to gain an understanding of both the intrinsic and extrinsic rewards, such as the feeling one gets when buying the last pair of shoes that fit just right, not only have you acquired the shoes over another shopper, but you have also gained an internal 'good' emotion. To this account, Babin and Darden state explicitly that: This view does not preclude participation in these activities by those who do not find competition pleasurable. However, it does suggest that these people may participate in competitive behaviors only for utilitarian value. In a sense, not all consumers will shop simply for the reason to get something before someone else with the spirit to win at a participation and challenge, but these people may do so simply for the product to fill a need. A consumer who makes a purchase simply for the task of need, such as buying the shoes because they are on sale and there is a hole in the other pair, is utilitarian, yet this design may "depend on whether the particular consumption need stimulating the shopping trip was accomplished" (Babin and Darden p 646 1994), the valuation is regarding a 'work mentality' where the activity is considered a chore, where the shopper may "find value only if the shopping chore is completed successfully," and Babin and Darden's research group discuss the success and failures in shopping trips, and the researchers note the stress involved in shopping as a chore as being the 'dark side' of shopping, where it is often describes as having traits associated with being 'an errand' or 'work' (Babin and Darden p 646 1994). Consumption and Value Where the utilitarian view is used to describe a methodical and task based approach to purchasing consumables, the hedonic view is indicative of the emotional constructs of shopping, the feelings of arousal and titillation, even the fulfillment of an ego and desire. Consumption, in some instances, allows for contentment from the consumers observation of the proposed purchase, as Babin and Darden note in their research. This is a 'perceived enjoyment' that is just as involved as the actual construction of a purchase, because the consumer maintains an air of emotional-if not monetary-involvement from recreational shoppers who still gain a hedonic value. Babin and Darden also note through their research that shoppers, in contrast to the 'work' orientation noted above, find themselves excited with the prospects of shopping, using comments such as 'a kid in the candy store,' and these hedonic values are also expressed when a shopper finds a particularly new or involving experience of a store that is described as not being a 'run of the mill store.' For those participants who have a hedonic mindset as opposed to viewing shopping as a chore, often the newer and more intrinsic an experience is, the more a sense of special accomplishment is gained. Babin and Darden also explain that in the hedonic orchestration, the purchase itself "may serve as the climax" of the experience, where the item is of less consequence as far as "tangible attributes," but in the case of impulse purchases, there is a need to purchase rather than a need to use a purchase (p 646 1994). Okada (p 43 2005) states that there is a need to fulfill more than the physical necessity of consumption: By nature, people are motivated to enjoy themselves. However, having fun also raises such issues as guilt and need for justification. Therefore, people will be more likely to consume hedonic goods when the decision context allows them the flexibility to justify the consumption. This research examines how hedonic versus utilitarian consumption can vary in typical purchase situations, depending on the decision context. This raises an important concept in hedonic theory, Babin and Darden note that in gaining an intrinsic value of a purchase, there is a presence of self-enhancement, a justification of the emotional factors, such as when a shopper 'wins' a good bargain. The purchase, even in its hedonic state, has some justification because: The price-quality literature portrays value as a function of a products transaction utility, the difference between a product's selling price and a consumer's internal reference prices. The hedonic responses associated with bargain perceptions, however, extend beyond an addictive measure of transaction utility. (Babin and Darden p 647 1994) Conclusions In understanding the methods by which consumers create a value of a purchase, or a value of a shopping experience, it is important to divulge a comprehension of the extrinsic utilitarian values as well as the intrinsic hedonic values. The theory for continuous research then leans toward the method of the purchase in a qualitative approach. A consumer may feel 'like a kid in a candy store,' and have a unique shopping-even window-shopping-experience with the possible winning feeling that comes from having found or haggled for a good bargain. Or, a consumer may feel controlled by the shopping experience, and fall prey to the crowds and force of the chore, even that the entire experience is void of any fulfillment and exists only to serve a utilitarian purpose. To that effect then, with the inventions of choices and options for their shopping experiences via the internet and mail order, as well as the traditional street shopping centers, consumers still maintain the values of utilitarian and hedonic organizations in their experience. The Research Method In divulging information regarding student consumers' perceptions and subjective data towards shopping methods and the intrinsic and extrinsic involvement in their shopping experience, qualitative data was collected from interviewees. This allows for an evaluation of the results to be made on the consumers conclusions using a random interview survey. The survey method allows for new information to be gathered in a timely and inexpensive manner where other methods are based on information that is already in existence. Unfortunately, there are few studies that gain any type of relative information towards the hedonic and utilitarian views of shoppers across the retail chains and methods of shopping. The Research The research method of semi-structured interview surveys was used with five student participants in the young adult age group, 18 through 25 years old, although other methods were considered. This allows for the consumers' behavior to be interpreted based on their own biases, and not those of the researcher. The survey goal was to gather baseline information with the objective to formulate an action plan from a random sample of interviewed students in a scientifically valid manner by a random sampling of student consumers who had made a recent purchase and have internet access. The Survey Method The survey method was used because of the need to gather new information, there is little information that already exists in this area, so a historical research method was not applicable, and in the survey method we are not constricted by what already exists. Furthermore, there is a need to gain an understanding of the values consumers place on their shopping method, where it can not be assumed by previous quantitative research that all internet ordering is a 'good' experience or that all store oriented shopping experiences are a 'bad' experience. The survey allows for flexibility in reacting to participants' replies according to their experience. An observational research method would have been restricted by the researcher's viewpoint, whereas in this survey, we are restricted by the consumers' replies. The consumers were not interactive with one another as in a focus group to allow for interviewer and interviewee reactions, and so that the responses can be arranged with a clear fixation on the interviewees' singular responses. The case study method was not used, although this is a powerful method that allows for the researcher to cross examine and compare experiences and cases in the interviewees' experiences, but because the information exists only in tincture as far as case studies that are available, it has been decided that direct interviews with student consumers would be the best overall approach. The Interview Method The interview was conducted via a face to face using an in-depth semi-structured interview with each participant separately. The interview technique focused on five questions directed towards the participants regarding their most recent purchase and the hedonic and utilitarian values of those. These interviews are not expected to measure quantitative outcomes such as dollar amounts to define common purchase outcomes, it is expected to gain a qualitative understanding of the valuation consumers place on the retail methods. This semi-structured method was chosen because it allows for the qualitative and emotional constructs of the consumers regarding their purchases to be examined where other methods, such as quantitative questionnaires would only divulge specific metrics regarding a purchase and not allow for responses to be gauged according to the consumers' experience. Furthermore, questionnaires are often categorized based on a logical presumption that one activity is inherently a cause or an effect of another. The research wants to remove any presumptions of cause and effect to focus on the subjective evidence of hedonic and utilitarian values in consumption. The interview method allows for the evaluation of individual motivations to describe the process by which consumers shop and the inherent characteristics of that shopping experience. The focus is on the intrinsic values of an individual and the differences that can be explored by their experiences. The semi structured interview is designed to understand the meaning participants place on their shopping experiences and methods The sequence of questions led from the most recent shopping experience to the emotional involvement and 'special' characteristics of the shopping experience by first asking for factual information, as in 'tell me about your last purchase' and 'what preferences do you have about purchases made online, through the mail, or in the store' followed by 'What was necessary about that purchase' with the goal to maintain respondent engagement as the interview continues by asking open-ended questions. The interview was conducted with one questions asked at a time, and 'why' questions were avoided to remove and implication of cause and effect. Conclusion In conclusion, we can surmise the advantage to be that we allow for the participant to respond according to there purposeful value without being restricted, this allows for the interviewee to remain flexible in their responses, also for the interviewer to remain flexible in the direction of the questions to probe for further details into unexpected responses and themes. Also, this method allowed for new information to be gathered where there is not an existing outcome of the specific demographic in this regard. A caution is given to the personalities and moods of the interviewers in analyzing and interpreting the information. Furthermore, it is important to understand that the base consideration of this research is to gather participants' subjective data, and that this evidence is influenced by personal opinion and experience, where in objective research, the information would be gathered based on specific quantities. However, it remains the goal of this interview survey method to discuss and understand the consumers' subjective and empirical approach to shopping, as it relates to hedonic and utilitarian values across the retail channels in the market as street shops, the internet, and mail order methods are concerned. Consumer Values Analysis The scope of the research is to cover specific qualitative responses from semi-structured interviews with student consumers in an informal environment. Consumer values are defined as the attributes of a shopping experience that the consumer holds to have an emotional or physical purpose within their domain of shopping experience. In shopping, consumers show both hedonic and utilitarian traits. Consumers have both hedonic and utilitarian values in the various consumer channels, however, it is noted that consumers will justify a purchase, regardless of its hedonic or utilitarian nature. Scope and Background The interviews were conducted with a range of five questions aimed at the pragmatic observations the participants as identified in Table 1.0 identifies the participants: Background Table 1.0 Age Gender Field Current Job Participant A 22 Female Business Fast food B 19 Female Biology Waitress C 24 Female Business NA D 23 Male Computer NA E 19 Female Business Coffee Shop The participants were asked six consumer related questions, with the related keyword in parenthesis: 1. Tell me about the last time you made a purchase. (CHANNEL) 2. What preferences do you have about purchases made online, through the mail, or at the store (PREFERENCE) 3. Why did you make that purchase (VALUE) 4. How did you feel about the purchase (JUSTIFICATION) 5. Was there anything you would consider special about that purchase (HEDONIC/UTILITARIAN) 6. What kind of feelings did you have about the store itself, if any (EXPERIENCE) Interview Response Analysis The responses that are indicative of some value the consumer places each of the concerns above are notated in Table 2.0: Responses Table 2.0 Retail Channel Consumer and Values Respondent A, B and E prefer retail chain channels. These shoppers exhibit various values in there shopping experience. Respondent A shows hedonic values, with some utilitarian justification, as 'needed,' which allows her to make an accommodation regarding what most would consider a hedonic purchase, with her justification being very appearance based in valuation. Respondent A prefers retail stores that have a wide variety, and receives an emotional value from her purchases, stating that" I am buying things for myself, and that feels good," but she also states that she enjoys shopping even when she does not complete a purchase, where the participant will "find it almost relaxing just to walk around and think about the things I might buy, and the stuff I want to buy," and Respondent A places a value on her time during shopping because she enjoys finding all of her purchases in one store. Respondent B and E prefer retail shopping, but find that shopping takes time away from their lives. Their experience is defined as being utilitarian, citing comments such as " I just had to buy the stuff," and "I was in a hurry and don't like to spend a lot of time fooling around in the stores," with the justification being a physical need for the items purchased, such as laundry soap and school supplies. Furthermore, Respondent B notes that she purchases "a lot of clothes online, because I don't really have time or a big desire to go shopping," and Respondent E states that she prefers the "self-check out lane" because she does not "have to compete to get out of the store," citing the values these Respondents place on their time over the value they place on shopping for utilitarian items. Of interesting note in this analysis is that while Respondent A made a hedonic purchase, citing that she 'splurged,' the respondent justified this with a utilitarian comment, and the other retail shopping respondents also placed value on the utilitarian ideals, and all retail shoppers in this research used forcible comments of 'need' and 'had too,' however, as Respondent C notes, there is sometimes not a true 'need' of an item, but a spiritual justification of the purchase. Catalog Channel and Consumer Values Respondent C prefers mail order catalogs that market specifically to the customized and designer oriented consumer, she states that "I like picking things out of a catalog that are tailor-made." This shows a unique desire to be 'special' in her purchases, and while she will shop all retail channels, Respondent C places strong emphasis on "that special experience I don't get anywhere else," reflecting that the experience and the value of a purchase are strongly related. Furthermore, Respondent C holds an emotional value to her purchases that approaches spirituality, stating that: So whenever we [mother and I] get the catalogs together, we call each other and talk about what would look better on either of us. So, it's kind of like, our connection. It's really almost spiritual for us; it is a mother-daughter ritual we have had since I was a kid. This notes a strong significance in Respondent C's valuation of her purchase; it is justified as a means of communication between mother and herself, a way of connecting emotionally, regardless of the necessity of an item. Respondent C places stronger emphasis on her intrinsic desires and valuations than on the extrinsic values of time and money. Online Channel Consumer Values Respondent D places value on his time and on his money, with a strong preference to internet bargains, such as found on E-Bay, purchasing music as well as games, stating that "I rarely have time to shop at an actual store." Respondent D values his time for his hedonic purchases via the internet stating that "Music, movies and games are pretty much my hobbies; so it is fun to buy those things." Importantly, Respondent D has a strong value to a bargain or competition factor of shopping: Honestly, it was fun comparing the prices to narrow down just the right buys from the right seller-and he took half off the shipping from all of my purchases! Here, the Respondent shows that his value is not inherently placed on the price of a purchase, but also on the 'bargain hunting' aspect of shopping. He feels 'good' and 'excited' about the purchase because he got a bargain, and this is Respondent D's justification-as well it being a 'hobby'-of his purchase. Also, Respondent D comments about his online shopping experience as "It is instant gratification, and I can buy anything from anywhere." This shows the consumer has strong hedonic values in his online shopping experience, but also proves that while he is shopping for 'gratification,' he also finds it 'fun' to bargain hunt online. Conclusions Limitations The limitations of the research can be identified as those connected with subjective and qualitative data. There is always the possibility of limitation regarding face to face interviews. The interviewer may be overbearing, or not maintain enough force to carry through the questions, creating standoffish or disinterested response from the interviewee. Furthermore, the interviewee may be limited by their impression of the qualitative questions as far as the structure and order in which they were presented, and this could possibly create a bias. The interviewees are limited by the language of the research in their understanding of the qualitative questions, and the interviewer is limited by the comprehension of the language in the conversation. It has been said that studies drawn from cognitive capacities are often limited by that capacities ability to understand the information before them (Siedel and Pinto 2005). The research is open to interpretation of the researcher, because the information gathered is qualitative and has no mathematical value for statistical analysis. The gathering of purely qualitative data does allow for the subjective view of the participants to be molded within the researcher's domain of expertise. However, it stands that a main concern is that the research was limited to a small count of student consumers with internet access. So, there are limits on the extent to which findings from this study can be generalized to any population of consumers. This means that while the research is applicable for the specified field of study noted above, it is not applicable on any social or demographical scale for distribution; however, it does allow for a glimpse into the consumer's psychology, as previously theorized by Babin and Darden. Implications The implications of the scope of this research apply to marketing strategy as well as pricing structure and consumer values. It has been shown that retail store consumers place a strong value on the connotation of 'need,' even if that need is inherently hedonic. The consumer who shops at a retail store holds their time as a value, and the larger base will not over-shop because of time constraints. This means that while the hedonic store shopper may spend time 'window shopping,' she values that ability to purchase her items at one store without confusions. The hedonic shopper uses utilitarian statements to justify her purchase. This implies that a hedonic item may be marketed as a need, especially in appearance related consumables, such as make up. The utilitarian shoppers' preferred the retail chain that was easiest to navigate; again, this is a marketing opportunity to play on the values of time and money, especially with the self-checkout lanes as noted by one respondent. The catalog shopper cited entirely hedonic values, including 'spiritual,' 'ritual' and 'unique' as her values over time and money. This could be highly indicative that catalog marketing can play on the values of social status and the unique offers of that catalog which separate it from other shopping avenues. Also, the ideal of creating a 'ritual' of purchasing is important to catalog sales, implying that the catalog offers a consistency of quality for the consumer. The hedonic internet shopper does purchase utilitarian items from the grocer, yet the importance of his statements are regarding finding 'bargains' and 'wholesale prices' which seems to be specific to the purchase made. Seemingly, the psychology of this particular shopper is indicative that he is highly competitive and that 'winning' a 'bargain', whether implied or real, delivers an emotion of conquest and achievement as part of the male psyche, where "The outcomes for which men strive in the marketplace can all be described as achievement-oriented" (Otnes and McGrath p 129 2000). Conclusion This research paper has examined the research of Babin and Darden in the analytical constructs of hedonic and utilitarian consumer values. Babin and Darden's article "Work and/or Fun: Measuring Hedonic and Utilitarian Shopping Value" defined "shopping as work" and the "shopping as fun" consumer experiences, two traits seen in the subsequent research conducted herein to analyze the consumer's values as they move through the retail channels. The research project examined student consumers' perceptions and subjective data towards shopping methods and the intrinsic and extrinsic involvement in their shopping experience through qualitative interviews. The research analysis defined the attributes of a shopping experience that the consumer holds to have an emotional or physical purpose within their domain of shopping experience. In shopping, consumers show both hedonic and utilitarian traits. It was discovered that consumers have both hedonic and utilitarian values in the various consumer channels. It is noted that consumers will justify a purchase, regardless of its hedonic or utilitarian nature, where a hedonic consumer may justify their purchase with utilitarian emotions. Utilitarian consumers value time as having the greatest influence on their shopping experience. It can be stated by the above research that catalog shoppers view their experience as ritualistic with a unique spiritual property, while the internet shopper prefers to hunt for the best bargain. Recommendations for Future Research We can therefore recommend further research into the justifications retail shoppers make towards hedonic purchases. This will allow for marketing managers to advertise against the desires of consumers while promoting purely hedonic purchases as needs based desires. Secondly, further research should involve the utilitarian consumers values of time and ease, some possible integrations of technology such as the key chain credit card as well as pre-ordering items online for pick up or delivery to save time for the utilitarian consumer-a niche often missed by marketers. Catalog sales tend to be largely hedonic in their nature; research into the emotional connections as well as the patterned behaviors of hedonic catalog consumers may yield important connotations for catalog marketing. Lastly, it can be said that while research into the hedonic and utilitarian nature of consumers is sparse at best, it is of importance to note that there is even less research into the male population of consumers, especially as internet shoppers. This niche has been overlooked by many researchers, and is possibly an untapped and viable market. It is highly recommended that marketing strategies begin to include the hedonic male internet consumer. To provide further impressions of the mannerisms in which consumers shop, it would be recommended to use several avenues of investigation. Quantitative surveys as well as historical research into strategies along retail chains will yield a greater impression of the significance multi-media chains in retail has had on consumer's mindset. Furthermore, interviews with male participants who purchase hedonic 'hobby' items online on a regular basis will offer a better understanding of the drive behind internet 'bargain hunting' as it relates to goal oriented behaviors (Schau et al. 2001). References Babin, Barry J. Darden, William R.(1994) Work and/or fun: Measuring hedonic and utilitarian shopping value. :Journal of Consumer Research; Vol. 20 Issue 4, p644 [online] [Accessed May 13, 2006] Available from EbsoHost Research Database Novemsky, Nathan. Ratner, Rebecca K.(2003) The Time Course and Impact of Consumers' Erroneous Beliefs about Hedonic Contrast Effects. Journal of Consumer Research; Vol. 29 Issue 4, p507-516 [online] [Accessed May 13, 2006] Available from EbsoHost Research Database Okada, Erica Mina (2005) Justification Effects on Consumer Choice of Hedonic and Utilitarian Goods Journal of Marketing Research (JMR); Vol. 42 Issue 1, p43-53 [online] [Accessed May 13, 2006] Available from EbsoHost Research Database Otnes, Cele , McGrath, Mary Ann (2001) Perceptions and Realities of Male Shopping Behavior :Journal of Retailing; Vol. 77 Issue 1, p111 [online] [Accessed May 13, 2006] Available from EbsoHost Research Database Schau, Hope Jensen, Wolfinbarger, Mary, Muniz, Albert (2001) Qualitative Research Perspectives in Computer Mediated Environments Advances in Consumer Research; 2001, Vol. 28 Issue 1, p326-326 [online] [Accessed May 13, 2006] Available from EbsoHost Research Database Seidel, Victor. Pinto, John P.(2005) Social Science Strategies for User Focused Innovation and Design Management. Design Management Review; Vol. 16 Issue 4, p73-79 [online] [Accessed May 13, 2006] Available from EbsoHost Research Database Read More