Processing Theory of Consumer Choice - Essay Example

Processing Theory of Consumer Choice Increasing public awareness of environmental issues should settle the debate over ecolabelling. Increasing numbers of consumers are intent on adopting a more environmentally responsible lifestyle and, this includes limiting their purchases to environmentally-friendly goods. For them to do so, however, goods/products have to have ecolabels with the required information printed on it. Ecolabelling should, therefore, be mandatory, as per consumer requirements and demands. Added to that, and considering that the information printed has to be both understandable, relevant and accurate, ecolabelling should fall under governmental regulations. The following argument will establish a correlation between ecolabelling and consumer behaviour and argue for the regulation of these labels by governmental institutions. According to the Green Gauge Report, which is published annually by Roperstarch Worldwide, society's concern about environmental issues is currently at, or near, historically high levels (Green Gauge Report, 2002). As a result, in the last 20 to 30 years the concept of environmental marketing has materialized. This concept is defined as satisfying consumer wants and needs, but doing so in a way that minimizes impacts on the natural environment. This form of marketing has been popularized in both the marketing literature and by companies seeking a strategy that enables them to market their products in a socially responsible, sustainable manner (Esty and Wilson, 2006). Australia has embraced ecolabelling, in direct response to consumer demands. Indeed, studies on ecolabelling indicate that Australia leads all other countries in the provision of environment-related information on its products (Case Study). The rationale for doing so directly emanates from the very concept of consumer market demands and consumer behaviour therein. Accordingly, in order to establish a correlation between ecolabelling and consumer behaviour, the latter will be briefly overviewed. Consumer behaviour (CB) may be defined as the scientific study of the processes consumers use to select, secure, use, and dispose of products and services that satisfy their needs (Esty and Wilson, 2006). Its development is linked with both psychology and sociology. For example, concepts such as attitude, values, motivation, personality, perception, cognition, social influence, and cultural influence have all played a major role in explaining consumer behaviour (Esty and Wilson, 2006). Most view the field as a science dedicated to creating theory, which explains CB. Robertson and Kassarjian (1991) identify two approaches, which have formed the basis of CB theory generation. First, the micro approach has focused on the individual and the cognitive and psychological factors that affect their consumer decision-making. Examples include specific constructs such as variety seeking, risk, uncertainty, or expertise. Robertson and Kassarjian (1991) characterize this type research as insightful, but the specificity of the research construct limits the comprehensiveness of the resulting consumer behaviour models. For example, Folkes and Kiesler (1991) describe Bettman's (1979) information processing theory of consumer choice as a micro approach because it emphasizes a specific buying situation where the focus is on variables such as product attributes (quality and price), the characteristics of the decision-making task (information format), and the task-related characteristics of the decision maker (expertise and involvement). Thus, the model largely ignores sociological and cultural influences on consumer behaviour. The macro approach, on the other hand, has focused on the influence of others and the socio/cultural environment, so that discoveries hold across different times and places. Within this approach, the goal is the same - understanding consumer behaviour, but it is expanded to include the meaning of product purchase and ownership in a social and cultural context. Examples include Nicosia's (1966) Consumer Decision Processes, Engel et. al's (1968) Consumer Behaviour, and Howard and Sheth's Theory of Buyer Behaviour (1979). The relation between increasing environmental awareness and concern levels and consumer behaviour is clear. As a result of an increased awareness and understanding of environmental issues, consumers are determined to act in an environmentally responsible way and to make the necessary lifestyle adjustments. At the same time, they have assumed the responsibility of enforcing respect for the environment on producers and of evaluating the extent of the latter’s compliance, themselves. As Esty and Wilson (2006) argue, the outcome of this concern is that consumer trends have moved towards the direction of ecolabelling as a factor affecting the purchase decision. Environmentally friendly and green labels on products are no longer satisfactory, not because consumers assume that manufacturers are misleading them but, because they believe that they possess the requisite level of understanding to comprehend more detailed ecolabels and to evaluate, on the basis of these information labels, a company’s position on environmentalism and the extent of its compliance with sustainability (Esty and Wilson, 2006). The adoption of ecolabelling can be interpreted from micro and macro consumer behaviour theory. From the micro-economic approach, ecolabelling refers to the attributes of a product. These attributes are the extent to which the product manufacturing process complied with environmentally responsible guidelines and the effect of its use on the environment. For the environmentally conscious consumer, these attributes are important factors in the purchase decision. From the macro-economic perspective, the adoption of ecolabelling is a marketing imperative as a result of socio-environmental pressures. As Esty and Wilso (2006) point out, increasing numbers of consumers/society members have identified environmental issues as a leading public concern and, accordingly, it factors into the global consumer’s purchasing decision. The implication here is that ecolabelling have become as important as are product information/ingredient labels. In direct relation to ecolabelling, consumer behavioural theorists argue the importance of global brands adopting ecolabels. The adoption of ecolabelling is not only important as a marketing strategy but as a means of avoiding consumer resistance. In recent years, consumer research and marketing studies have shown a growing consumer resistance to both global brands which have not adopted ecolabelling and to brands which display unclear, vague and/or difficult to comprehend ecolabels (Kozinets, 2002; Thompson and Troester, 2002; Holt, 2002; Thompson and Arsel, 2004). These studies, maintaining that resistance assumes either an organised or disorganised/spontaneous form, hold that the former is incited by perceptions of companies/brands as environmentally unfriendly and the latter by either the absence of an eco-label or inability to comprehend the contents of the labels (Kozinets, 2002; Thompson and Troester, 2002; Holt, 2002; Thompson and Arsel, 2004). This means that that producers who ignore the global consumer demand for ecolabelling run the risk of inciting consumer resistance to their brands. As a result of increased environmental awareness and environmental responsibility, global consumers have imposed the adoption of ecolabels upon global brands. Numerous companies, with Australian ones topping the list (Case study), have complied and, given that increased penetration into the global market is partially contingent upon compliance to the aforementioned demand, many more are likely to follow suit. To date, however, on the official level, ecolabelling remains voluntary (Case study). Its voluntary nature is, in itself, problematic insofar as it implies inconsistent application, both in the sense of label content and label adoption. Therefore, it is important that the ecolabelling scheme not only be regulated but that it adhere to an internationally accepted and recognised standard. Voluntary ecolabelling is problematic on two fronts, as may be inferred from several researchers. In the first place, the absence of a requirement to ecolabel global brands does not simply imply inconsistency but gives rise to the question of unfair competition, insofar as those who do adopt ecolabels have to incur the added cost of doing so, subsequent to which they transfer the stated cost onto the price of the product. Added to that, the adoption of ecolabelling implies adherence to environmental friendly practices, in itself a practice which adds to the cost of production and, accordingly, price per unit. Within the parameters of the stated, therefore, the absence of regulations means that compliant global brands incur high production costs than do non compliant ones (Anderson, 2005; Gulbrandsen, 2005; Clift, 2005; Gertz, 2004). The second problem is that the absence of regulations implies that there is no single format for ecolabels as in the information they need convey and the manner/method of conveyance. Studies show that the absence of an established and uniform labelling scheme has led to a situation in which labels contain too much information, too little information or are not stated in terms which the consumer can easily digest/comprehend. In other words, even as regards global brands which have ecolabels, consumers run into the problem of comprehensibility (Gulbrandsen, 2005; Clift, 2005; Gertz, 2004). On the basis of the aforementioned, therefore, it is possible to affirm that in the absence of regulations, ecolabels are neither as informative nor as comprehensible/consumer friendly as they should be. The problems discussed lead to the conclusion that the regulation of ecolabelling is necessary. The question, however, is who should be responsible for the regulation of ecolabelling. Several industrialised countries and regions, including the United States and the European Union have established a framework and scheme for ecolabelling although not their regulation per se (Clift, 2005; Hagstrom, 2003). Australia has not. Furthermore, in all instances, ecolabelling is largely voluntary, even within the context of the mentioned schemes. If they are to become mandatory, as indeed, they should, their implementation and regulation should not be left to the companies in question, given the factor of possible bias and should not be awarded to non-governmental agency considering that they may not have the resources for implementation and regulation. Instead, regulation need be awarded to a governmental agency. The proposal that regulations be by governmental agencies does not settle the problem because this is a global consumer issue. Within the context of globalisation, it is imperative that the standards/regulations in question adhere to internationally agreed upon ecolabelling requirements. What this means that one country, or group of countries cannot impose ecolabel regulations on their own producers even as they allow the entry of non-labelled goods into their markets. The standards and requirements need to be uniform and it is because of the imperatives of uniformity, implying fair competition, that the standards in question need to be international in scope. Following the articulation of an international standard for eco-labelling, the mechanisms for regulation should assume legal form. The implication here is that compliance will be enforced through sanctions with that, in itself, determining that enforcement mechanisms be awarded to governmental regulators/agencies. The latter, in comparison to industry regulators and/or NGOs, have both the requisite resources for implementation and enforcement authority. It is, thus, that the selection of governmental regulation mechanisms constitutes the only logical option. In final commentary upon the above argued, ecolabelling is a global consumer demand, born of increasing concern over and awareness of environmental issues. The adoption of ecolabels is, this, an imperative imposed upon companies by consumer behaviour and, a response justified through consumer behaviour theory. The largely voluntary nature, however, of labelling is problematic and the problems identified in the preceding can only be negated and resolved through the imposition of uniform global requirements for ecolabelling. The mechanisms for the implementation of these requirements should be awarded to governmental agencies, rather than industry regulators or NGOs simply because the selected institution has the resources requisite for implementation and enforcement of regulations. It is, thus, that not only has consumer behaviour identified the imperatives of ecolabelling but also governmental regulation pf the stated. References Anderson, R. et al. (2005) `Price premiums in the mist.’ Forest Products Journal, 55(6), 19-22. Bettman, J.R (1979) An Information Processing Theory of Consumer Choice. Reading: Addison- Wesley. Clift, R. (2005) `Eco-labels and electric monks.’ Journal of Industrial Ecology, 9(3), 4-7. Engel, J.F. et al. (1968) Consumer Behaviour. New York: Holt, Rinehart, &Winston. Esty, D.C. and Winston, A.S. (2006) Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage New Haven: Yale University Press. Fokes, V.S. & Kiesler, T. (1991) `Social cognition: Consumers' inferences about the self and others.’ In: Handbook of Consumer Behaviour. Eds. Robertson, Thomas S., & Kassarjian, Harold H Prentice-Hall Inc., New Jersey. Gertz, R. (2004) `Access to environmental information and the German Blue Angel -- Lessons to be learned?’ European Environmental Law Review, 13(10), 268-275. Green Gauge Report (2002) Roper ASW. Retrieved 7 May 2007 http://www.windustry.com/conferences/november2002/nov2002_proceedings/plenary/greenguage2002.pdf Gulbrandsen, L. H. (2005) `Mark of sustainability.’ Environment, 47(5), 8-23. Hagstrom, J. (2003, Sep. 11) `... As Europeans Push For Geographic Indicators Program.’ CongressDaily, 7-9. Holt, Douglas B. (2002) Why do brands cause trouble? A dialectical theory of consumer culture and branding. Journal of Consumer Research, 29. Howard, J.A. and Sheth, J.N. (1979) The Theory of Buyer Behaviour. New York: Wiley. Kozinets, R. V. (2002) Can consumers escape the market? Emancipatory illuminations from Burning Man, Journal of Consumer Research, 29. Nicosia, F. (1966) Consumer Decision Processes. Englewood Cliffs, NJ: Prentice-Hall. Robertson, T.S. & Kassarjian, I. (1991) Handbook of Consumer Behaviour. Prentice-Hall Inc., New Jersey. Thompson, C. J. and Troester, M. (2002) Consumer value systems in the age of postmodern fragmentation: The case of the natural health microculture. Journal of Consumer Research, 28. Thompson, C. J. and Arsel, Z. (2004), The Starbucks brandscape and consumers' (anticorporate) experiences of glocalization. Journal of Consumer Research, 31 (3). Read More