Theories on consumer’s behavior

Overview on consumer’s behavior

The consumer’s behavior is a process in which consumers form reactions toward a need. This process includes two stages: awareness and action. Thus, the study of consumer’s behavior covers all aspects of spirit, feelings, actions that consumers display during the process of awareness, choosing, buying, using – consuming and removing the dissatisfactory products or service. The scale of consumer’s behavior study can be shown through the figure 2.1

Figure 2.1:Factors influencing purchasing behavior (Source: Nguyen, 2008)

External factors

CONSUMERS

(awaring, choosing, buying, consuming, removing)

Motivation Learning Perception Life style Attitude

Family Role & Status Reference Culture Social class

Internal factors

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Consumer behavior in economics and psychology.

The first consumer behavior model was built based on the belief that people try to maximize their benefit with a limited budget. Hansen et al. (2007) said that “consumers in the market should be sovereign and that they are indeed sovereign, at least partly. Prerequisites for consumer sovereignty are freedom of consumption, on the demand side and (perfect) competition, on the supply side. Given their preferences, consumers can decide which goods they want to purchase at what price” (p.447)

HerbertSimon(1957) introduced the theory of bounded rationality as a replacement for the mathematics model of decision making. He suggested that the decision making process is limited by the amount of information and the length of time an individual has to make a decision. According to Brohmann (2009), the length of time and the amount of information can be counted as the cost of making decision. The information can be seen as a positive cost as it helps customers to make decision. Brohmann (2009) concluded that the model of bounded rationality can come in par with the idea of consumer sovereignty. Thus, the maximization of information cost depends on each individual.

The energy consumption behavior is a behavior that largely depends on the habit or routines of consumers. Jager (2008) made a distinction between reasoned behavior and automated behavior. He pointed out that the behaviors and decisions of each individual are less likely to be affected by other behavior, but they seem to depend on the social observation. Table 2.1 shows the four-fold typology of behavior.

Table 2.1: Four-fold typology of behavior

Automated Reactions Reasoned Reactions

Individually

Social learning/normative conduct

Social comparison

• Relative deprivation/social comparison

(Source: MARTISKAINEN, 2007, p. 19) 5

There are also many studies on the consumer behavior from the psychology field.

Some of the notable theories are shown in Table 2.2

Table 2.2: Theories on consumer behavior

Theories

Behavioral Approach Behaviorism

(B.F.Skinner, 1979)

Cognitive Approach Problem solving with cognitive structure and learning experience

(De Young, 1990)

Attitude – Behavior Model Theory of Reasoned Action (TRA) (Fishbein and Ajzen 1975);

Theory of Planned Behavior (Ajzen 1985; 2002)

(Corbett 2005) Social Cognitive Theory Observational Learning

Bandura (1986) Value – Belief –

NormTheory

VBN (Stern 2000)

Reasonable Person Model Kaplan 2000

(Source: Heiskanen et al.,, 2006)

Behavioral research is used to analyze individual reactions to different initiatives;

experimental (or cognitive) research is used to analyze the “social meaning of the costs and benefits of current energy use” ( Heiskanen et al., 2006). Attitude behavioral models analyzing behaviors, attitudes, norms are frequently used in social psychology research. The ethical aspects of the behaviors, norms and values are analyzed using the Social Cognitive Theory or Value Belief Theory (pro-social attitudes and personal moral norms are predictor of pro-environmental behavior). The Theory of Reasoned Action considers that individual aspect certain benefits from the outcome of their behavior

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Energy Saving Behavior

Barr et al. (2005) suggested that the energy saving behavior can be divided into two types: behavior by habit and behavior by purchasing energy saving devices.

The behavior by habit, which was mentioned in many researches as energy saving choices (Stern, 1992), curtailment (Black et al, 1985), is the behavior that focuses on reducing the daily amount of energy use without changing the energy consuming device structure.

The behavior by purchasing energy saving devices, which was called in different names such as “technology choices” (Stern, 1992), “conservation action” (Dillman et al., 1983), “purchase-related behavior” (Van Raaji&Verhallen, 1983), “energy efficiency improvements” (Black et al., 1985), is the behavior related to changing the structure of energy consuming devices.

Besides, researches also propose some other factors that may affect the energy saving behavior including: (1) socio-economic and demographic characteristics; (2) attitude, awareness and concern about environment and energy saving (Hori et al., 2013; Mills

&Schleich, 2012; Sardianou, 2007;Ščasný& Urban, 2009; Ščasný& Urban, 2012; Wang et al., 2011)

According to Abrahamse&Steg (2011), there are two theories that are usually used to explain the relationship between attitude, awareness and concern: Theory of Planned Behavior (TPB) and Theory of Value – Belief – Norm (VBN).

According to the Theory of Planned Behavior (Ajzen, 1985), the factor that influences the behavior is the intention to implement that behavior. The intention is, in turn, decided by three factors: attitudes, subjective norms and perceived behavioral control.

According to the theory of VBN (Stern et al., 1999; Stern, 2000), value is the principle that guide the behavior of an individual. Value is usually evaluate through the New Environmental Paradigm Index (NEP) – the mean value of variables of individuals’

agreement toward common awareness of the environment (Dunlap et al., 2000). Belief is the individual awareness of the behavior impact on the environment. The higher belief will lead to the higher individual responsibility toward environment. The responsibility will lead to personal standard which has positive relationship with environment friendly behavior.

In fact, many evidences show that attitudes, awareness and environment concern doinfluence the energy saving behavior (Black et al., 1985; Brandon &Lewies, 1999; Hori et al., 2013; Sardianou, 2007; Ščasný& Urban, 2009; Ščasný& Urban, 2012; Wang et al., 2011)

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Sardianou (2007) assessed the attitude and environmental concern through (i) whether the respondents have information on the world environment or not, (ii) whether the respondents aware of their contribution to environmental issues. The result shows that the energy saving behavior is higher when the respondents have information on the world environment and aware of their contribution to the environmental issues.

According to Ščasný& Urban ( 2009), the energy saving behavior in using electricity devices is positively related to the index of environmental concern by asking questions related to environmental issues such as energy wastes, air pollution, noise pollution, climate change, etc. Ščasný& Urban (2012) also found the positive impact of environmental concern on energy saving behavior when using electricity devices or investing in energy saving devices.

Wang et al. (2011) found that the awareness of electricity saving (understanding how to save electricity, understanding energy saving icons or policies) has positive influence on the willingness to save electricity.

Using energy efficiently and effectively

Using energy efficiently and effectively means reducing the consumption of energy and the energy cost of devices in a way that still satisfies the need of energy. The efficient and effective use of energy plays a significant role in the energy development plan of a country. It brings benefits to a country in various such as saving budget, protecting environment and saving materials. Research shows that if the energy consumption growth/GDP growth index decreases from 1.46 to 0.8 in 2020, Vietnam can save 500 million USD in 2020.

2.2 Theories of consumer behavior