Well being marketing

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Well-being Marketing: An Ethical Business
Philosophy for Consumer Goods Firms
M. Joseph Sirgy
Dong-Jin Lee
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
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
responsibility–socially 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
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).
Journal of Business Ethics (2008) 77:377–403 � Springer 2007
DOI 10.1007/s10551-007-9363-y
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
stakeholders—customers, 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
safely—to 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 byother 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
378 M. Joseph Sirgy and Dong-Jin Lee
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
high levels of consumer�s quality of life—higher
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
TABLE I
The measurement constructs involved in the ACSI
1. Expectation
• Customer expectation about overall quality
• Customer expectation about reliability
• Customer expectation about customization
2. Performance
• Perception of overall quality
• Perception of reliability
• Perception of customization
3. Value
• Price given quality
• Quality given price
4. Consumer satisfaction
• Overall satisfaction
• Satisfaction against expectation
• Satisfaction against the ideal
5. Customer loyalty
• Repurchase likelihood
• Price tolerance (increase) given repurchase
• Price tolerance (decrease) to induce repurchase
6. 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), 7–18.
An Ethical Business Philosophy for Consumer Goods Firms 379
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 living—the 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-dimensions—satisfaction 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
380 M. Joseph Sirgy and Dong-Jin Lee
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.
An Ethical Business Philosophy for Consumer Goods Firms 381
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
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
Experts� assessment that
• the product is high quality and the price is fair
and affordable, and
• the purchase experience is safe to the pur-
chasers, the sales person/facility, the general
public, and the environment
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
Experts� assessment that the product is
• easy (or convenient) and
• safe to prepare or assemble to the preparer, the
general public, and the environment
Product consumption Consumersatisfaction with the use of the
product in a manner contributing to the
consumer�s quality of life
Experts� assessment that the consumption of the
product is
• significantly beneficial to consumers and
• safe to consumers, the general public, and the
environment
Product ownership Consumer satisfaction with the ownership of
the product in a manner contributing to the
consumer�s quality of life
Experts� assessment that the ownership of the
product
• has appreciable value and
• is safe to the owners, the general public, and
the environment
Product maintenance Consumer satisfaction with product mainte-
nance and repair in a manner contributing to
the consumer�s quality of life
Experts� assessment that the maintenance of the
product is
• easy (or convenient),
• not costly (affordable), and
• safe to the repair person/facility, the general
public, and the environment
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 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
382 M. Joseph Sirgy and Dong-Jin Lee
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 taxation—the 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. 30–34; 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
An Ethical Business Philosophy for Consumer Goods Firms 383
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 typicallyclassified as
external stakeholders, internal stakeholders, and
distal stakeholders (e.g., Sirgy, 2002). Internal stake-
holders are other functional departments and business
units within the firm—other 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 survival and growth
of the firm indirectly through external stakeholders
(e.g., legal groups, consumer advocacy groups,
government agencies).
One can argue that the ethics of relationship mar-
keting can be justified by stakeholder theory. A firm
serves society well by establishing positive relation-
ships with its various stakeholders. The firm does this
by meeting the demands of stakeholders leading to
trust and commitment. By the same token, if the
primary stakeholders of marketing are customers and
distributors, then stakeholder theory advocates that
the marketing department within the firm should
make every effort to cater to customers and distribu-
tors in ways to elicit their trust and commitment.
Doing so necessitates ethical marketing practice,
which in turn serves society as a whole. Relationship
marketers focus on developing long-term relationship
with customers. Relationship marketing concentrates
on generating repeated sales from customers by pro-
viding satisfaction and establishing trust.
Although one can argue that relationship market-
ing is considered to be on a higher ethical plane than
transaction marketing, it still falls short. Establishing
positive relationships with customers based on trust
and commitment does not ensure that the firm�s
marketing decisions enhance consumer and society
well-being. Consider the automobile industry. Many
automobile manufacturers do a good job trying to
establish positive relationships with customers. Cus-
tomers are happy with their cars and the service pro-
vided by the warranty and dealer network. Customers
end up trusting their automobile manufacturers and
their dealers. They feel a sense of loyalty and com-
mitment to manufacturers and dealers. Paradoxically,
the same automobile manufacturers might design
their cars by cutting corners on safety measures. The
same manufacturers might design more fuel-efficient
cars to minimize toxic gas emissions and air pollution
but choose not to. Relationship marketing based on
stakeholder theory fails to guide marketing decision-
making in areas concerning consumer safety, the
safety of other publics, as well as the safety of the
environment (see Table II).
The ethics of well-being marketing
Drucker (1969) has long maintained that business
has a significant impact on society. Therefore,
384 M. Joseph Sirgy and Dong-Jin Lee
T
A
B
L
E
II
I
W
el
l-
b
ei
n
g
m
ar
k
et
in
g
v
is
-à
-v
is
tr
an
sa
ct
io
n
al
m
ar
k
et
in
g
an
d
re
la
ti
o
n
sh
ip
m
ar
k
et
in
g
T
ra
n
sa
ct
io
n
al
m
ar
k
et
in
g
R
el
at
io
n
sh
ip
m
ar
k
et
in
g
W
el
l-
b
ei
n
g
m
ar
k
et
in
g
S
tr
at
eg
ic
p
la
n
n
in
g
E
th
ic
al
p
h
il
o
so
p
h
y
•
C
o
n
su
m
er
so
v
er
ei
g
n
ty
•
S
ta
k
eh
o
ld
er
th
eo
ry
•
D
u
ty
o
f
b
en
efi
ce
n
ce
an
d
n
o
n
-m
al
ef
-
ic
ie
n
ce
M
aj
o
r
st
ra
te
g
ic
o
b
je
ct
iv
es
•
F
in
an
ci
al
g
o
al
s
(s
h
o
rt
te
rm
)
•
F
in
an
ci
al
g
o
al
s
(l
o
n
g
-t
er
m
)
•
F
in
an
ci
al
an
d
so
ci
e
ta
l
g
o
al
s
(l
o
n
g
-
te
rm
)
S
tr
at
eg
y
•
D
ev
el
o
p
in
g
m
ar
k
et
in
g
p
ro
-
g
ra
m
s
d
es
ig
n
ed
to
en
h
an
ce
b
ra
n
d
p
re
fe
re
n
ce
an
d
p
u
r-
ch
as
e
•
D
ev
el
o
p
in
g
m
ar
k
et
in
g
p
ro
-
g
ra
m
s
d
es
ig
n
ed
to
en
h
an
ce
cu
st
o
m
er
sa
ti
sf
ac
ti
o
n
,
tr
u
st
,
an
d
co
m
m
it
m
en
t
•
D
ev
el
o
p
in
g
m
ar
k
et
in
g
p
ro
g
ra
m
s
d
e-
si
g
n
ed
to
en
h
an
ce
co
n
su
m
er
w
el
l
b
ei
n
g
T
ar
g
et
m
ar
k
et
•
F
o
cu
s
o
n
d
ev
el
o
p
in
g
b
ra
n
d
p
re
fe
re
n
ce
an
d
p
u
rc
h
as
e
in
te
n
ti
o
n
s
o
f
n
ew
cu
st
o
m
er
s
•
F
o
cu
s
o
n
d
ev
el
o
p
in
g
sa
ti
s-
fa
ct
io
n
,
tr
u
st
,
an
d
co
m
m
it
-
m
en
t
o
f
cu
rr
en
t
cu
st
o
m
er
•
F
o
cu
s
o
n
d
ev
el
o
p
in
g
w
el
l
b
ei
n
g
o
f
co
n
su
m
er
s
w
h
o
se
q
u
al
it
y
o
f
li
fe
ca
n
b
e
si
g
n
ifi
ca
n
tl
y
en
h
an
ce
d
th
ro
u
g
h
p
ro
d
u
ct
ad
o
p
ti
o
n
,
an
d
d
o
in
g
th
is
sa
fe
ly
to
co
n
su
m
er
s,
o
th
er
p
u
b
li
cs
,
an
d
th
e
en
v
ir
o
n
m
en
t
C
o
n
su
m
p
ti
o
n
/p
ro
d
u
ct
li
fe
cy
cl
e
•
P
ro
d
u
ct
p
u
rc
h
as
e
•
P
ro
d
u
ct
p
u
rc
h
as
e,
p
re
p
ar
a-
ti
o
n
,
u
se
,
o
w
n
er
sh
ip
,
m
ai
n
te
n
an
ce
,
an
d
d
is
p
o
sa
l
•
P
ro
d
u
ct
p
u
rc
h
as
e,
p
re
p
ar
at
io
n
u
se
,
o
w
n
er
sh
ip
,
m
ai
n
te
n
an
ce
,
an
d
d
is
-
p
o
sa
l
P
ro
d
u
ct
d
ec
is
io
n
s
F
ac
to
rs
co
n
si
d
er
ed
in
p
ro
d
u
ct
d
es
ig
n
,
p
ac
k
ag
in
g
,
w
ar
ra
n
ty
,
et
c.
•
C
o
n
su
m
er
p
re
-p
u
rc
h
as
e
ex
p
ec
ta
ti
o
n
s
•
C
o
n
su
m
er
p
re
-p
u
rc
h
as
e
ex
p
ec
ta
ti
o
n
s
•
C
o
n
su
m
er
p
re
-p
u
rc
h
as
e
ex
p
ec
ta
ti
o
n
s
•
C
o
n
su
m
er
p
o
st
-p
u
rc
h
as
e
ex
p
ec
ta
ti
o
n
s
•
C
o
n
su
m
er
p
o
st
-p
u
rc
h
as
e
ex
p
ec
ta
ti
o
n
s
•
S
af
et
y
co
n
ce
rn
s
(c
o
n
su
m
er
s,
o
th
er
p
u
b
li
cs
,
th
e
en
v
ir
o
n
m
en
t)
•
P
ro
d
u
ct
im
p
ac
t
o
n
th
e
q
u
al
it
y
o
f
li
fe
o
f
th
e
co
n
su
m
er
P
ri
ci
n
g
d
ec
is
io
n
s
F
ac
to
rs
co
n
si
d
er
ed
in
p
ri
ci
n
g
d
ec
is
io
n
s
•
C
o
st
s
•
C
o
st
s
•
C
o
st
s
•
P
ro
fi
t
g
o
al
s
•
P
ro
fi
t
g
o
al
s
•
P
ro
fi
t
g
o
al
s
•
W
h
at
th
e
m
ar
k
et
ca
n
b
ea
r
•
W
h
at
th
e
m
ar
k
et
ca
n
b
ea
r
•
W
h
at
th
e
m
ar
k
et
ca
n
b
ea
r
•
C
o
m
p
et
it
io
n
•
C
o
m
p
et
it
io
n
•
C
o
m
p
et
it
io
n
•
C
u
st
o
m
er
p
er
ce
iv
ed
v
al
u
e
•
C
u
st
o
m
er
p
er
ce
iv
ed
v
al
u
e
•
C
u
st
o
m
er
o
b
je
ct
iv
e
v
al
u
e
•
P
ri
ce
af
fo
rd
ab
il
it
y
•
S
af
et
y
an
d
re
m
ed
ia
ti
o
n
co
st
s
An Ethical Business Philosophy for Consumer Goods Firms 385
T
A
B
L
E
II
I
co
n
ti
n
u
ed
T
ra
n
sa
ct
io
n
al
m
ar
k
et
in
g
R
el
at
io
n
sh
ip
m
ar
k
et
in
g
W
el
l-
b
ei
n
g
m
ar
k
et
in
g
D
is
tr
ib
u
ti
o
n
d
ec
is
io
n
s
F
ac
to
rs
co
n
si
d
er
ed
in
d
is
tr
ib
u
ti
o
n
d
ec
is
io
n
s
•
S
al
es
•
S
al
es
•
S
al
es
•
M
ar
k
et
sh
ar
e
•
M
ar
k
et
sh
ar
e
•
M
ar
k
et
sh
ar
e
•
P
ro
fi
t
•
P
ro
fi
t
•
P
ro
fi
t
•
C
u
st
o
m
er
ac
ce
ss
&
co
n
v
en
ie
n
ce
•
C
u
st
o
m
er
ac
ce
ss
&
co
n
v
en
ie
n
ce
•
C
u
st
o
m
er
ac
ce
ss
&
co
n
v
en
ie
n
ce
•
R
ep
ea
t
p
u
rc
h
as
e
&
cu
st
o
m
er
tu
rn
o
v
er
•
R
ep
ea
t
p
u
rc
h
as
es
&
cu
st
o
m
er
tu
rn
o
v
er
•
A
cc
es
s,
co
n
v
en
ie
n
ce
,
an
d
p
le
as
an
t
en
v
ir
o
n
m
en
t
to
re
p
ea
t
cu
st
o
m
er
s
•
A
cc
es
s,
co
n
v
en
ie
n
ce
,
an
d
p
le
as
an
t
en
v
ir
o
n
m
en
t
to
re
p
ea
t
cu
st
o
m
er
s
•
C
o
n
su
m
er
sa
ti
sf
ac
ti
o
n
,
tr
u
st
,
&
co
m
m
it
m
en
t
•
S
af
et
y
an
d
et
h
ic
al
co
n
ce
rn
s
•
C
u
st
o
m
er
sa
ti
sf
ac
ti
o
n
,
tr
u
st
,
&
co
m
m
it
m
en
t
•
A
cc
es
s
&
co
n
v
en
ie
n
ce
to
cu
st
o
m
er
s
m
o
st
li
k
el
y
to
b
en
efi
t
th
e
m
o
st
P
ro
m
o
ti
o
n
d
ec
is
io
n
s
F
ac
to
rs
co
n
si
d
er
ed
in
p
ro
m
o
ti
o
n
d
ec
is
io
n
s
•
B
ra
n
d
aw
ar
en
es
s
•
B
ra
n
d
aw
ar
en
es
s
•
B
ra
n
d
aw
ar
en
es
s
•
P
re
-p
u
rc
h
as
e
ex
p
ec
ta
ti
o
n
s
•
P
re
-p
u
rc
h
as
e
ex
p
ec
ta
ti
o
n
s
•
P
re
-p
u
rc
h
as
e
ex
p
ec
ta
ti
o
n
s
•
B
ra
n
d
p
re
fe
re
n
ce
•
B
ra
n
d
p
re
fe
re
n
ce•
B
ra
n
d
p
re
fe
re
n
ce
•
P
u
rc
h
as
e
•
P
u
rc
h
as
e
•
P
u
rc
h
as
e
•
P
o
st
-p
u
rc
h
as
e
ex
p
ec
ta
ti
o
n
s
•
P
o
st
-p
u
rc
h
as
e
ex
p
ec
ta
ti
o
n
s
•
S
at
is
fa
ct
io
n
,
tr
u
st
,
&
co
m
-
m
it
m
en
t
•
S
at
is
fa
ct
io
n
,
tr
u
st
,
&
co
m
m
it
m
en
t
•
R
ep
ea
t
p
u
rc
h
as
e
•
R
ep
ea
t
p
u
rc
h
as
e
•
S
af
et
y
co
n
ce
rn
s
•
U
se
o
f
th
e
p
ro
d
u
ct
to
m
ax
im
iz
e
q
u
al
it
y
-o
f-
li
fe
im
p
ac
t
386 M. Joseph Sirgy and Dong-Jin Lee
business managers should accept the responsibility
to preserve and enhance consumer and society
well-being. The concept of well-being should be
built into the firm�s mission and mindset of senior
executives. This is most significant for large cor-
porations since they tend to impact society more
significantly than small firms. Drucker argued that
executives should incorporate the concept of well
being in their mission statement, business strategies,
and daily operations for three reasons. First, the
society�s costs for neglecting to do this are very
high. Second, business is part of society, and not
doing something about the preservation and
enhancement of quality of life in society will
ultimately affect business in adverse ways. That is,
healthy business and a sick society are not com-
patible. Third, improving consumer and society
well-being should be a tremendous business
opportunity. Many marketing scholars followed the
lead of Drucker in calling for the kind of mar-
keting that enhances both consumer and society�s
well-being (e.g., Fisk, 1971; Kelly, 1974; Kotler,
1979).
For example, Kotler (1979) referred to ‘‘societal
marketing’’ as a concept equating well-being mar-
keting. The societal marketing concept calls for a con-
sumer orientation backed by integrated marketing
activity aimed at generating consumer satisfaction and
long-run consumer well-being as key to achieving
long-run profitability. He developed a set of axioms
for societal marketing. Examples include ‘‘Outside
parties should be represented in seller decision-mak-
ing’’ and ‘‘Sellers will be effective to the extent that
they attempt to serve consumers� interests in addition
to their desires.’’ Kotler (1986) defined marketing
effectiveness in terms consumer and society well-
being: ‘‘The organization�s task is to determine the
needs, wants, and interests of target markets and to
deliver satisfaction more effectively and efficiently
than competitors in a way that preserves or enhances
the consumer�s and society�s well-being’’ (p. 16).
Kotler (1987) also suggested three stages of evo-
lution of marketing. The first stage is the marketing
concept. He argued that the marketing concept had
emerged as a result of movement from a product
orientation to a sales orientation to a marketing
orientation. The marketing concept focuses on
consumer wants. Marketers adhering to the mar-
keting concept make no judgments about whether
consumer wants are consistent or inconsistent with
society�s well-being. The second stage of marketing
evolution is the humanistic marketing concept. This
concept posits that marketers consider both con-
sumer wants and consumer interests. Thus,
humanistic marketers do not tell people what they
should have. Instead they market ‘‘better’’ goods and
services and subsequently attempt to ‘‘educate’’
consumers about the benefits of the new and
improved ‘‘products.’’ The third stage of the evo-
lution of the marketing concept is societal marketing.
This concept is designed to address the concerns of
the humanistic marketing concept (i.e., some mar-
keting practices may serve consumer wants and
interests and yet hurt society�s interests).
So what is a good definition of well-being mar-
keting? We define well-being marketing for con-
sumer goods firms as a business philosophy that
guides the development, pricing, promotion, and
distribution of consumer goods to individuals and
families for the purpose of enhancing CWB at a
profit (in the long run) in a manner that does not
adversely affect the public, including the environ-
ment. Because customers are considered to be the
primary external stakeholder, marketers� primary
responsibility is to meet the demand of their cus-
tomers safely and enhance their quality of their life.
But, because the firm�s marketing decision may ad-
versely impact the well-being of other external
stakeholders, it is vital that marketing decisions are
made in ways to minimize possible adverse effects
impacting the well-being of employees, distributors,
suppliers, stockholders, etc. (Sirgy, 2001).
Well-being marketing is grounded in duty ethics,
especially the duty of beneficence and non-malefi-
cence. Well-being marketing focuses on the
enhancement of CWB. This is the essence of the
beneficence component of well-being marketing (e.g.,
Beauchamp, 1999). The principle of beneficence
refers to a general group of duties that include a
positive injunction to assist customers. The principle
of beneficence judges the ethical nature of an action
based on the criteria that one ought to promote to
good (Frankenna 1973, p. 47). The duty of benefi-
cence is one of the Ross� (1930) prima facie duties in
ethics–the duty that one recognizes at first sight as
being obligatory when all other things being equal.
Duty of beneficence is the sense of obligation we
feel that there are people in the world whose
An Ethical Business Philosophy for Consumer Goods Firms 387
situations we can improve. For well-being market-
ers, it is a duty to improve the well-being of con-
sumers by meeting their needs fully over the entire
span of the consumer/product life cycle.
Well-being marketing also focuses on preserving
the well being of stakeholders. This is the essence of
the moral duty of non-maleficience. The principle of
non-maleficience refers to injunction not to inflict
harm to others (Beauchamp, 1999; Fisher, 2001).
The duty of non-maleficence is the sense of obli-
gation that we should not harm others. Besides not
inflicting harm, one ought to prevent or remove
harm (Frankenna, 1973).
Thus, well-being marketing is grounded in the
ethics concepts of duty of beneficence and non-
maleficence in that the focus is not only on serving
consumers safely in a manner that contributes to
their quality of life but also the preservation of well
being of the firm�s other stakeholders (see Table II).
We believe that the ethics of well-being marketing
is on placed a higher plane than transaction and
relationship marketing. Well-being marketing is
more comprehensive in the way it accounts for both
consumers� and society�s well-being. In the next
section of the article, we analyze how the concepts of
well-being marketing guide marketing decision-
making. We will contrast marketing decision-making
guided by well-being marketing with decision-
making guided by transaction marketing, and
relationship marketing.
Implementing the concept of well-being
marketing in the context of consumer goods
firms
In this section, we will further expound on well-
being marketing by describing how, as a business
philosophy, it guides both strategic and tactical
marketing decisions.
Marketing strategy guided by the well-being principle
The strategic objectives of transaction marketing are
short-term financial goals. Most firms, driven by a
transaction philosophy, focus on quarterly sales and
profit to assess the financial health of the firm and to
set new goals for the coming quarter. The focus is
short-term. Thus the impetus lies in recruiting new
customers and making new transactions. Competi-
tiveness is the state of mind of the transaction mar-
keter. The goal is to gain more market share, to
make customers belonging to competitors switch to
the firm�s brand. Marketing performance is judged in
terms of sales, market share, and profit. Much of the
science and technology that helps the firm recruitnew customers is grounded on the psychology of
brand preference and choice. Transaction-oriented
firms focus on understanding the psychology of
purchase to create marketing programs that entice
new customers to purchase the firm�s product (see
Table III).
The marketing strategy of relationship-marketing
firms is significantly different from transaction-ori-
ented firms. The strategic objectives of relationship-
marketing firms are more long term. The time
horizon is not restricted to quarterly sales and
profit. Marketing performance is assessed through
financial and behavioral measures. The firm is said
to be doing well not only when the financial
numbers look good but also research shows that
current customers are satisfied with the firm�s
product, they have trust in the firm�s ability to
deliver on its promises, and they are committed to
doing business with the firm in the foreseeable
future. Thus, relationship firms invest a great deal
of resources in understanding the psychology of
satisfaction, trust, and commitment, and develop
marketing programs to increase customer satisfac-
tion, trust and commitment. Furthermore, rela-
tionship firms do not focus on enhancing customer
satisfaction only through purchase. The focus of
their marketing programs is post-purchase experi-
ences—marketplace experiences related to product
preparation, consumption, ownership, maintenance,
and disposal (see Table III).
In contrast to transaction and relationship firms,
the strategic objectives of well-being firms involve
both financial and societal goals. Marketing perfor-
mance of a well-being firm is judged in terms of
sales, profit, customer-life satisfaction, customer
safety, employee safety, and safety to the environ-
ment. The time horizon of well-being firms is long-
term and multidimensional. Well-being firms invest
in the science and technology related to quality of
life studies; they develop marketing programs to
enhance the quality of life of customers through the
entire spectrum of marketplace experiences: product
388 M. Joseph Sirgy and Dong-Jin Lee
purchase, preparation, consumption, ownership,
maintenance, and disposal (see Table III).
Product decisions guided by the well-being principle
Product decisions (product design, packaging,
labeling, branding, warrantee, technical assistance,
etc.) guided strictly by transaction marketing may
lead to short-term profitability, yes, but also may
contribute to ill being. Of course, product decisions
in that vein are guided by the goal of maximizing
sales and reducing costs. In doing so, many of the
product decisions are guided by an understanding of
consumers� pre-purchase expectations. The product,
the package, the warranty, etc. are all designed to
meet consumers� purchase expectations. The goal is
to deliver a product mix that would result in high
brand preference and choice over competitor
brands.
In contrast, a relationship-marketing firm makes a
host of product decisions to meet or exceed cus-
tomer expectations, ultimately to ensure repeat
business and brand loyalty. To reiterate, the goal
here is to maximize customer satisfaction, trust, and
brand loyalty. To do so, the marketer has to have a
good understanding of not only pre-purchase
expectations but also post-purchase expectations.
Product decisions, guided by the well-being
principle, focus on developing and marketing
products that are significantly beneficial to con-
sumers with little or no negative externalities. In
other words, a firm guided by a well-being philos-
ophy makes a host of product decisions in ways to
significantly enhance the quality of life of individual
consumers or families without adversely affecting
employees, the local community, the environment,
and the general public. Well-being marketing fo-
cuses on maximizing consumer satisfaction across all
six stages of the consumer/product life cycle
(product acquisition, preparation, consumption,
possession, maintenance, and disposal) with little or
no negative externalities. Thus, the goal of a well-
being firm is to enhance consumers� and society�s
well-being—a concept above and beyond sales/
profitability and customer satisfaction/brand loyalty.
Product decisions guided by the well-being principle
are shown in Table III and described in some detail
in the sections below.
With respect to product decisions designed to
enhance wellbeing in relation to product purchase, a
transaction-oriented firm typically designs the
product in units that are most sellable, making the
transaction easy and convenient, and therefore
marketable. In contrast, a relationship-oriented firm
designs the product not only in units most sellable
but also in volume and mass to make the transpor-
tation logistics of the product easy and convenient to
the customer. Transaction-oriented firms may not
care about making transportation logistics easy and
convenient for customers because they may feel that
their job is done once the sale is consummated.
Relationship marketers care much about post-pur-
chase transportation logistics because not doing so
may adversely affect customer satisfaction and repeat
business. Well-being-oriented firms go two steps
beyond what relationship marketers do. First, they
make a concerted effort to ensure that product de-
sign is not only guided by market demand and
customer satisfaction/trust/commitment goals but
also by safety concerns—the product is designed in
such a way to ensure the purchase experience is safe
to consumers, the general public, and the environ-
ment. This is because safety is an important goal of
well-being marketers. For example, in relation to
transportation and shipping logistics, well-being
firms are likely to make every attempt possible to
ensure that the product package is safe to transport
and safe to the transporter, the general public, and
the environment. That is, the well-being oriented
firm takes additional precautionary measures to de-
sign a package for the product that, if damaged
during transport, the contents would not spill and
harm the customer (or transportation personnel),
those in the vicinity of the spill, as well as the
environment in terms of land, water, and/or air
pollution (cf. Jacobs, 1988). Again safety issues re-
lated to packaging are not likely to be viewed as
important if guided by relationship marketing.
Relationship marketing guides the firm to focus first
and foremost on customer satisfaction, trust, and
loyalty assessments. Furthermore, one can argue that
packaging safety assessments are best captured by
expert assessments, not customer perceptions and
evaluations of safety issues related to shipping,
transportation, and product logistics. Emphasis of
safety issues during shopping reflects the non-
maleficence component of well-being marketing.
An Ethical Business Philosophy for Consumer Goods Firms 389
Second, well-being firms attempt to design the
product in ways to make the purchase experience
satisfying to the customer, not only in the sense that
this satisfaction would lead to purchase but also
satisfaction in the quality-of-life sense. It is the kind
of satisfaction that makes a contribution to life sat-
isfaction. This dimension of product strategy reflects
the beneficence dimension of well-being marketing.
Consider the example of Nextel and the way they
make the purchase of their cell phones an exciting
event at NASCAR-related events. Nextel sets up a
playground at a racing event or more like a huge
arcade. In that arcade, consumers are invited to play
a variety of car racing simulation videos. This is an
environment that is pleasant and exciting for con-
sumers. It is an environment that enhances the
purchase experience. For consumers whose lifestyle
reflects NASCAR�s activities, interests, and opin-
ions, the satisfaction generated in the context of a
NASCAR event is highly involving, enduring, and
adding to lifesatisfaction.
With respect to product decisions designed to
enhance well-being in relation to product preparation,
transaction marketers attempt to maximize sales by
ensuring that the product can be easily assembled or
prepared for consumption. Many consumers do not
have the necessary skills, patience, or stamina to
assemble or prepare purchased products for con-
sumption. This situation can be very frustrating for
many customers, resulting in product returns. Most
companies are contractually obligated to accept
returns, which can significantly cut into profit.
Product returns are averted by designing the product
for easy assembly or preparation. The case in point is
Ikea, the world�s largest home furniture manufac-
turer. The firm produces home furniture with sim-
ple design, modular interchangeable parts, and easy
to assemble (Kumar et al., 2000). Furthermore, to
ensure that the product is not returned, many
transaction-oriented firms make a concerted effort to
provide technical assistance to customers. Most firms of
consumer goods provide technical assistance (in the
form of customer service) to assist consumers in
product assembly or preparation. Relationship-ori-
ented firms also design the product for easy assembly.
They also provide technical assistance to assist with
product assembly. However, to ensure that cus-
tomers are highly satisfied with the product (and feel
trust and commitment toward the company), they
go beyond what transaction firms do. They offer free
product assembly, or they may charge a nominal fee
for the assembly. Doing so, not only minimizes
product returns, but also serves to enhance customer
satisfaction, trust, and commitment.
Well-being marketers do what relationship mar-
keters do and go beyond relationship marketing in
two ways. First, they design the product in such a
way to avoid the possibility of customer injury while
assembling the product and to ensure safety to others
as well as the environment. In other words, safety is
an important criterion in product assembly and
preparation. Safety in product preparation is
important, not only to customers, but also to the
general public and the environment. Again, as pre-
viously mentioned, this is the essence of the non-
maleficence component of well-being marketing.
Second, well-being marketers attempt to make the
product assembly/preparation experience as satisfy-
ing and meaningful as possible. Consider the fol-
lowing example: the USA television channel has a
movie program hosted by two anchor guests who
during movie breaks comment about the movie
while showing the audience how to cook a recipe.
The recipe, of course, has food ingredients and/or
cuisine utencils sponsored by specific manufacturers.
The focus is to show how the manufacturer’s
‘‘product’’ can be prepared, and this demonstration
is done in ways that is highly entertaining. Those
watching the movie learn how to prepare the recipe.
Imagine implementing this concept to help con-
sumers prepare a host of products and things, from
cooking with certain grocery items to assembling
computers. The goal is to make the preparation
experience fun, exciting, and meaningful to target
consumers. This is the essence of the beneficence
component of well-being marketing.
With respect to product decisions designed to
enhance well being in relation to product consumption,
a good transaction firm designs a product by study-
ing consumer purchase expectations. Understanding
what consumers expect out of a product when
consumed is important in designing the product to
generate those benefits. Once the product is
designed guided by purchase expectations, the
transaction marketer promotes the product to tout
those benefits. Doing so enhances the marketability
of the product. For example, an automobile com-
pany studies young adults� expectations used in
390 M. Joseph Sirgy and Dong-Jin Lee
making car purchase decisions. The company finds
out that these consumers seek cars that are sporty
looking, equipped with nice CD/stereo system, and
have power. As a result, the company designs a car to
meet these expectations and targets this car to young
adult consumers in a promotion campaign. Note
that the product is designed to generate consump-
tion utility guided by purchase expectations. In con-
trast, a relationship marketing car manufacturer,
targeting young adults, designs a car guided by pre-
and post-purchase expectations. In other words, to
generate consumption utility that leads to customer
satisfaction, trust, and commitment, the relationship
marketer takes into account how young adults
evaluate the car after purchase and consumption, and
how these evaluations lead to feelings of satisfaction
or dissatisfaction. The goal is to design a car for these
consumers in such a way to generate customer sat-
isfaction after purchase and use. In this instance,
post-purchase expectations may not only involve
driving a sporty looking car equipped with nice CD/
stereo system, and having power, but also driving a
car that is reliable, low on gas mileage, roomy en-
ough to haul stuff, and reasonable in price not to
hurt the pocketbook. In other words, the product is
designed to generate utility guided by pre- and post-
purchase desired expectations (cf. Park et al., 1986;
Sheth et al., 1991; Sweeny and Souter, 2001). Again,
the goal is to design a product to generate con-
sumption utility in such a way leading to customer
satisfaction, trust, and commitment.
A car manufacturer guided by the well-being
concept goes beyond the design standards of the
relationship marketer. In addition to incorporating
pre- and post-desired expectations into the design of
the product, the well-being marketer is guided by
safety concerns during consumption and a consump-
tion experience that is most meaningful and enriching.
With respect to safety concerns, both transaction and
relationship marketers would include safety only if the
research uncovers the fact that consumers do make
pre-and post-purchase decisions based on car safety.
Only then do car manufacturers design cars to ensure
consumer safety. Manufacturers of consumer goods
guided by a well-being philosophy design their
products to ensure consumer safety (when the product
is consumed) and safety of employees, the general
public, and the environment (in the manufacturing
and shipping of the product) (cf. Jackson and Morgan
1988). In other words, well-being firms feel obligated
by a sense of social responsibility to ensure that their
products (when consumed) will not adversely hurt
others (others than the consumers) and not harm the
environment by polluting the air, water, and/or land.
Transaction- and relationship-marketing firms may
focus on safety, but if so, they do this from the vantage
point of the consumer (e.g., Bettman et al., 1986), not
society at large.
With respect to the design of the product to
generate a meaningful and enriching consumption
experience, well-being firms conduct research to
identify pre- and post-purchase expectations that are
linked with life satisfaction, not just customer satis-
faction. How can the product be designed to max-
imize the quality-of-life impact of the product? For
example, in relation to personal transportation,
marketing research is conducted to identify utilitar-
ian, symbolic, and aesthetic features that would lead
to positive affect in various life domains of the
consumers (e.g., work life, family life, social life,
leisure life, and travel life). A car designed to max-
imize positive affect in the driver�s various life
domains is the kind of car that is likely to play an
important role in enhancing the well being of the
driver, not the kind of customer satisfaction that is
short-term, ephemeral, transient, or non-enduring.
Therefore, well-being marketing prompts marketing
researchers to use methods that go beyond customer
satisfaction, methodsgrounded in quality-of-life
research (see Sirgy�s [2001] Handbook for Quality-of-
Life Research for research methods and measures).
With respect to product decisions designed to
enhance well being in product ownership, many
products depreciate their market value very rapidly.
Many companies design their products with prod-
uct obsolescence in mind. A case in point is com-
puter hardware. One can argue that transaction-
oriented firms design products to maintain (or
possibly enhance) their market value. However,
they do so if, and only if, aspects of product
appreciation/depreciation are identified as criteria
in purchase decision-making. Sometimes consumers
use criteria such as product obsolescence, durability,
market value after purchase and use, and product
appreciation/depreciation in purchase decision-
making. If so, a transaction marketing firm has to
design the product in such a way to convince
consumers that their brand is better than competitor
An Ethical Business Philosophy for Consumer Goods Firms 391
brands on durability and market-resale value.
Relationship-marketing firms place emphasis on
product durability and market-resale value too.
However, they do so, when their market research
indicates that durability and resale value are not
only criteria in purchase decision-making but also
customer satisfaction, trust, and commitment. The
underlying assumption is that customers who are
happy with the resale value of the brand are likely
to remain loyal to that brand in future buying
occasions.
Well-being marketing does not only equate with
relationship but also extends it in two significant
ways: safety concerns and subjective well-being.
With respect to the safety issue, well-being firms
design a product to ensure that the ownership of
the product is not associated with safety prob-
lems—safety to the owners and their families, safety
to the local community, the environment, and the
general public. Consider the case of gun ownership
or the ownership of rifles, assault weapons, and
other lethal weapons. There are many consumers
who collect weapons for a variety of reasons. Some
do so for the monetary value as collectible items;
some do so because consumers use them for
hunting purposes; and so on. Social critics have
long accused the gun industry for failing to ensure
that gun owners are sufficiently educated to store
these collectibles in a manner to avoid accidents to
self and others. Well-being firms are very sensitive
to safety concerns. In the case of gun ownership,
they are likely to design weapons with high quality
safety systems such as safety locks and storage bins
that are highly secure.
Furthermore, the well-being firm is motivated to
design the product in such a way that its ownership
becomes a part of an overall constellation of products
and services signifying a lifestyle, a passionate hobby
or vocation, or leisure activity. For example, some
people are avid readers of mystery novels. Their
reading activity reflects a lifestyle of sorts. Buying a
mystery novel is not simply an end goal. Buying a
mystery novel allows the reader to add that novel to
his or collection of mystery novels, which partly
defines consumer�s identity. Adding to one�s col-
lection of mystery novels does not simply generate
customer satisfaction with the purchased item but
also the kind of satisfaction that is linked with one�s
overall personality and self-concept. This satisfaction
can be viewed as life satisfaction, happiness, or
subjective well being.
What about product maintenance? Many transac-
tion-oriented firms provide their customers a
product warranty. A warranty helps the customer
when the product is in need of service or repair (cf.
Dunne et al., 2002; Udell and Laczniak, 1981).
These firms provide a good warranty to enhance
the sale potential of their products. In contrast,
relationship-marketing firms do the same to
increase brand loyalty and enhance the chances of
repeat business. In doing so, they go beyond the
traditional warranty. A good warranty offered by a
relationship-marketing firms focuses on both pre-
ventative and reactive maintenance (e.g., Chonko,
1985). That is, the warranty is designed to (1) help
the customer periodically service the product to
prevent malfunctioning, and (2) help the customer
repair the product when it malfunctions. Such a
warranty develops customer trust and reinforces
brand loyalty (Thurau and Hansen, 2000). A
product that is more reliable and durable decreases
the product�s need to be serviced and repaired
frequently. Reliability and durability are typically
product attributes desired by consumers, and
therefore these attributes are manifested in the kind
of research conducted by consumer goods firms.
Transaction firms typically make engineering deci-
sions concerning product quality improvements by
assessing consumers� perception of reliability and
durability. These firms make reliability and dura-
bility improvements to the product only if mar-
keting research shows that product reliability and
durability are important criteria in purchase deci-
sion-making. In contrast, relationship-marketing
firms are motivated to make reliability and dura-
bility improvements to the product when market-
ing research shows these product attributes are
important in the development of customer satis-
faction, trust, and commitment.
Well-being firms are very conscientious about
safety concerns. The maintenance warranty offered
by the firm is safe-proof. That is, the warranty
program has been tested and re-tested to ensure that
no aspect of reactive or preventative maintenance is
likely to jeopardize the safety of customers,
employees, the environment, as well as the general
public. In addition to the safe-proof warranty pro-
gram, well-being firms do not hesitate to recall their
392 M. Joseph Sirgy and Dong-Jin Lee
products when evidence arises concerning lack of
safety. Well-being firms also are likely to provide a
maintenance program that can induce feelings of
subjective well-being. For example, there are many
car owners that are emotionally involved with their
cars. The car reflects their identity, their status, and
the image they project to others. These customers
read much about cars. They pay attention to ads about
cars. They are opinion leaders in that they talk to
others about cars. These people are likely to take care
of their cars in a manner that feeds their subjective
well-being. In other words, they spend much time,
energy, and money to take care of their cars. These
maintenance activities meet a variety of needs across
several life domains contributing to life satisfaction.
Car manufacturers and dealers have an opportunity to
further enhance life satisfaction to consumers highly
involved with their cars by offering them a mainte-
nance program that can induce feelings of subjective
well-being. For example, the car dealer may offer a
maintenance course to their customers. They may
allow customers to bring their cars into the shop and
have them conduct reactive and preventative main-
tenance themselves, with the professional auto
mechanics lending a hand only if and when needed.
Finally, we have product decisions related to
product disposal. Transaction-oriented firms are likely
to use environmentally-friendly product ingredients
and/or packaging if consumer research uncovers that
consumers do indeed consider environmental-
friendly dimensions of the product in purchase
decision-making (e.g., Wasik, 1996). The rationale
is to deliver what consumers want; otherwise, the
product will not sell. Relationship-marketing firms,
on the other hand, attempt to find out the role of
environmentally-friendly product ingredients and
packaging in developing customer satisfaction, trust,
and commitment. If research were to indicate that
customers feel more satisfied (feel more trusting and
committed to the brand) becauseof its environ-
mentally-friendly ingredients and packaging, the
firm acts to design its product with more environ-
mentally ingredients and packaging.
Well-being firms are motivated by corporate so-
cial responsibility and environmental stewardship.
This means that the product has to be designed
keeping in mind that it will be disposed after con-
sumption, and the disposal of that product should
not contribute to environmental degradation. In
addition to the design of the product with envi-
ronmentally-friendly ingredients and packaging, the
well-being firm makes every effort to ensure that the
disposal activity is not only safe to the environment
but also to those involved in the act of disposal,
whether they are consumers or disposal service
personnel. Furthermore, well-being firms are likely
to offer their customers the opportunity to trade-in
their consumed product with newer and upgraded
ones. This could be in the form of continuously
developing a product line with new upgrades or new
features that can serve peripheral needs. For exam-
ple, a consumer whose cell phone is damaged sends
it back to the manufacturer, and the manufacturer
sends back an upgraded model. This exchange may
be part of the product warranty. Thus, the disposal
experience becomes an exciting event in which the
customer experiences subjective well-being by
exchanging his old product with an upgrade.
Pricing decisions guided by the well-being principle
Pricing decisions guided by a well-being philosophy
are very different from pricing decisions guided by
either transactional or relationship marketing. Typ-
ically, a transaction-oriented firm makes pricing
decisions guided by factors such as cost-plus (plus a
margin to achieve a desired profit level), what the
market can bear, and competition. Relationship-
marketing firms also price their products using cost-
plus and market demand methods. Additionally,
their pricing decisions are guided by customer per-
ceptions of value (e.g., Sweeny and Souter, 2001;
Woodruff, 1997; Zeithaml and Bitner, 2000). Doing
so ensures higher levels of profitability in the long
run, mostly through repeat business.
In contrast, well-being firms make pricing deci-
sions guided by additional factors such as experts�
assessment of product value, price affordability, and
cost of safety and remediation (cf. Kotler et al., 2002).
A well-being firm tries to balance societal goals with
the firm�s financial goals (Kotler, 2003). Pricing
decisions guided by the well-being principle are
summarized in Table III and described in some detail
in the sections below.
With respect to the purchase stage of the con-
sumer/product life cycle, well-being firms are gui-
ded by other factors in addition to cost, profitability
An Ethical Business Philosophy for Consumer Goods Firms 393
goals, what the market can bear, competition, and
customer perceived value. First, well-being market-
ers are likely to use both subjective and objective
assessments in determining value. In other words,
well-being marketers do not strictly rely on cus-
tomer perception of value; they take into account
experts� assessment of value. Consumer Reports value
ratings are an example of what we mean by
‘‘objective assessment of value.’’ Taking into
account experts� evaluation of value is important
because in many instances consumers do not have
knowledge or ability to assess product performance
in relation to price. Second, well-being marketers
take into account price affordability. Their goal is
not to maximize profit in the short run as is typical
for transaction firms. Their goal is not to maximize
profit in the long run as is typical for relationship-
marketing firms. Their goal is to place the product
with as many consumers who need the product as
much as possible. This means consumer affordance
of the product�s price. Consider the flowing case
involving Tata Motors in India. This is a large auto
maker that recently developed a $2,200 passenger
car, distributed in a kit and assembled at point of sale.
Thus, making a ‘‘people�s car’’ affordable to a vast
segment of the population in India is the primary
motive driving this venture (Kripalani, 2005). Third,
well-being firms are typically safety-conscious in
their pricing decisions. For example, if their product
is determined to degrade the environment in certain
ways, then the cost of environmental restoration is
included in the price of the product.
The same additional factors (objective value, price
affordability, and safety/remedial costs) are equally
involved in pricing decisions involved in product
preparation, use, ownership, maintenance, and dis-
posal. Specifically, in product preparation, marketers
have to price parts and tools necessary to prepare or
assemble the product or for providing technical
assistance (in the form of customer service) to assist
customers in the product assembly or preparation.
Consider the case of a furniture retailer selling
inexpensive furniture to working class families. The
retailer allows the furniture to be assembled at the
store�s warehouse with the assistance of warehouse
personnel at no extra charge.
With respect to pricing decisions designed to
enhance well-being in product consumption, there are
many consumer products in which consumers not
only pay for the purchase of the product but also
every time the product is used. Many examples
involve the telecommunications industry (e.g.,
wired telephone, cellular telephone, Internet access,
satellite television, and cable television). Consider
the case of cellular service provider targeting the
poor by providing very low prices. A family is given
five cell phones for free; the service plan is very
affordable; and poor families end up saving money
by disconnecting their hard-line phones.
With respect to pricing decisions designed to
enhance well-being in product ownership, many firms
help consumers assume ownership of high-ticket
items (e.g., automobiles). Ownership of certain
consumer goods (e.g., car, house, furniture, and
household appliances) has been shown to contrib-
ute significantly to life satisfaction (e.g., Belk, 1985;
Lee and Sirgy, 1995; Leelakulthanit et al., 1991).
Material possessions bring about feelings of power,
control, and exclusivity. Also, possessions allow
consumers to express their identities to significant
others. Consumers gain social approval by doing so.
Similarly, well-being firms help consumers assume
ownership of high-ticket goods. Well-being mar-
keters� pricing of credit is guided by additional
factors such as experts� assessment of value, con-
sumer affordance, and other costs related to safety.
Consider the case of housing. A developer in a
community finds out that there is a significant
segment of the poor and disabled elderly needing
better housing. The challenge is not to simply build
low-income housing for that market segment but
also to help those consumers assume ownership of
their homes. To do so, the developer joins forces
with a mortgage company to facilitate ownership of
affordable homes.
With respect to pricing decisions designed to
enhance well-being in product maintenance, many
consumer goods companies offer repair services
from the manufacturing site. Customers ship their
malfunctioned product, and the manufacturer re-
pairs the product and charges for replacement parts
and labor (minus what was guaranteed by the
product warrantee). Well-being firms strive to
price repair services affordably. Consider a com-
puter company that offers special computers for
the disabled who are supported by entitlement
programs. Through marketing research, the com-
pany finds out that these consumers cannot afford
394 M. Joseph Sirgy and Dong-Jin Lee
to spend more than 5% of their annual income on
computers and computer repairs. The 5% amounts
to approximately $3,000. The computer manu-
facturer strives to price the special