The Household: the &Quot;Proper&Quot; Model For Research Into Purchasing and Consumption Behavior

John F. Grashof, Temple University
Donald F. Dixon, Temple University
ABSTRACT - The value of the general body of literature resulting from research into "consumer behavior" is limited, in part, by a failure to relate research to the proper unit of analysis. This paper argues that the household is the appropriate model for research into consumer behavior. A comprehensive model is offered which views household purchasing and consumption as a three stage production process. Implications of the model are discussed along with suggestions for future research.
[ to cite ]:
John F. Grashof and Donald F. Dixon (1980) ,"The Household: the &Quot;Proper&Quot; Model For Research Into Purchasing and Consumption Behavior", in NA - Advances in Consumer Research Volume 07, eds. Jerry C. Olson, Ann Abor, MI : Association for Consumer Research, Pages: 486-491.

Advances in Consumer Research Volume 7, 1980     Pages 486-491

THE HOUSEHOLD: THE "PROPER" MODEL FOR RESEARCH INTO PURCHASING AND CONSUMPTION BEHAVIOR

John F. Grashof, Temple University

Donald F. Dixon, Temple University

ABSTRACT -

The value of the general body of literature resulting from research into "consumer behavior" is limited, in part, by a failure to relate research to the proper unit of analysis. This paper argues that the household is the appropriate model for research into consumer behavior. A comprehensive model is offered which views household purchasing and consumption as a three stage production process. Implications of the model are discussed along with suggestions for future research.

INTRODUCTION

"Modern" consumer behavior research is about three decades old, commencing with the motivation and personality research of the early 1950's. During the intervening years a large portion of research efforts in marketing have been focused on consumer behavior. Further, other disciplines including psychology and communications have focused part of their attention on this area.

Despite the relatively large amounts of effort and talent focused on consumer behavior research the results are discouraging. In a 1971 review Kassarjian observed that, "A review of these dozens of studies and papers can be summarized in the single word, equivocal" (p.415).

Wind also has pointed out difficulties with the transferability of research results as well as the lack of substantive findings. Re suggests further that "a real-world orientation" to consumer behavior research would imply shifts in emphasis away from the current focus upon (1) the individual as the unit of analysis, (2) the product or brand, as the object of analysis, (3) static analysis, which ignores the time dimensions, and (4) the purchase decision as the domain of interest (Wind 1977, p. 57).

Other writers have raised similar issues. For example, in the summary section of the synthesis Selected Aspects of Consumer Behavior it was noted that "One of the recurring themes in considering future progress in consumer behavior is the overemphasis on the individual as the unit of analysis" (p. 544). Kassarjian, in his review, went on to comment that, "What is amazing in not that there are many studies that show no correlation between consumer behavior and personality, but rather that there are any studies at all with positive results" (1971, p. 416). Kassarjian laid part of the blame on the researchers who "much too often ignore the many interrelated influences on the consumer decision process... (1971, p. 416).

It is the contention of the authors of this paper that the disappointing results of consumer behavior research stems from an improper, or at least incomplete, model. Sheth, in evaluating the state of consumer behavior research concluded that the discipline needs more research on household and organizational buyer behavior (1979). Purchase and consumption behavior takes place within the context of a household; examining such behavior out of context dooms such research to low levels of explanation. It further limits the potential contribution of such research to the theoretical understanding of purchase and consumption behavior.

Others have also suggested a shift to the household as the unit of analysis. In Selected Aspects of Consumer Behavior the authors commented that, "It is becoming increasingly apparent that the household (or family), not the individual, is the appropriate unit of study in consumer behavior" (p. 521). Wind argued that four changes were required (1977, p. 57):

1.  the unit of analysis: shift to the buying center.

2.  the object of analysis: shift to product assortment, including the order and positioning of items within the assortment.

3.  the time dimension: shift to dynamic analysis.

4.  the domain of interest: shift to purchase, usage, maintenance, and product disposal.

There has been an increasing interest in research focusing on the household as the unit of analysis. A review article by Davis includes a bibliography of over one hundred items, most of which relate to behavior within the household (1976). Most recent texts in consumer behavior include more discussion of household behavior than do earlier versions.

However, there exist "no overall theories or well-defined concepts" organizing the literature, and presumably therefore the research, relative to household behavior (Davis 1976, p. 241). This paper is an attempt to develop a "well-defined concept" which can provide an organizing scheme for work, mot only in household decision making, but consumer behavior in general.

The choice of the household as the relevant unit of analysis requires the construction of an appropriate household model. Such a model was suggested by Cairncross (1958), who visualized the household as "a small factory" in which various productive services are utilized to produce the desired output. Subsequent work which viewed the household as an organization engaged in production include Becker (1965) and Lancaster (1966). It is upon this work that the model suggested below is based.

THE ELEMENTS OF THE MODEL

[This analysis concerns instrumental behavior. It is true that some behavior leads to intrinsic satisfaction; indeed the behavior becomes pathological in the "workaholic'' or "compulsive shopper". But the existence of intrinsic satisfaction derived from instrumental behavior no more invalidates an analysis of the household as a productive unit, than a wage earner's enjoyment of work invalidates the analysis of the firm.]

The household is viewed as a social system consisting of a set of individuals organized into defined roles and responsibilities. The activities in which these individuals engage may be viewed as production processes. The production processes utilize resources as inputs to provide the outputs required to meet the needs of the household.

More formally a relationship between inputs and outputs is defined as a production function. The production process of a household include a set of six functional relationships and one constraint, time. These are listed in Table 1.

TABLE 1

THE ELEMENTS OF THE MODEL

The ultimate output of the system, from the point of view of the participants is satisfaction [Eq. 1] defined as the fulfillment of expectations or requirements which are specified as objectives. Activities, conscious human productive actions, when combined with other productive services (household resources) effect changes in material objects, knowledge, or contractual obligations. It is these changes which in turn lead to satisfaction.

Satisfaction is derived from commodity characteristics. The usual object of analysis in consumer behavior is a single product, and often a specific brand of a product. Researchers have disaggregated products or brands into attributes but the attributes are usually physical or psychological properties perceived by the consumer. For example, an attribute of lipstick would be its color (hue and intensity). However, color, per se, has little meaning for the consumer in terms of satisfaction. Rather it is the color as it compliments skin tone, hair color, and dress that has meaning and value. This aspect, the way a property contributes to satisfaction, is termed a characteristic following Lancaster (1966). A characteristic may be considered an intrinsic property which provides a service in or is used during a productive process. Thus, characteristics are properties of goods and services to be acquired by the household, then held in the household inventory for use in the commodity production function [Eq. 2].

Goods, services, and commodities are combinations or assortments of characteristics which have value for consumption, and are thus recognizable by consumers. Goods, services, and commodities, per se, do not possess value except "through the characteristics they possess" (Lancaster 1966, p.135). Thus, buyers and/or consumers do not have preferences for goods, but rather for assortments of characteristics. Since most goods have more than one characteristic, and most characteristics are possessed by more than one good (Lancaster 1966), a particular assortment of characteristics can be created by various combinations of goods. This gives rise to the situation of alternative production functions, for the same output, within a household. Thus, one decision faced by the household is the selection of which production function to use in a particular situation.

The assortment of characteristics in the household inventory results from acquisition activity utilizing as inputs time, skill, and financial resources [Eq. 3]. The characteristics to be acquired must exist in the environment either in the form of market goods or nonmarket goods.

The next three relationships [Eqs. 4, 5, and 6] deal with the resources utilized in Equations 1,2, and 3. Income provides the funds for market acquisitions but does not enter the other relationships.

The skills necessary for the productive processes are part of household technology. These skills are utilized through flows of information. Information acquisition, utilizing some of the household resources, augments the stock of household technology.

The ultimate constraint upon human action is time. All activities, including consumption, require a non-zero amount of time, and only one set of activities can be performed during the same period of time. Households make decisions regarding the allocation of time just as with other resources (Becker 1965, Hawes 1977, and Hawes, Gronmo, and Arndt 1978). For example, time can be devoted to acquiring skills in one period thus reducing the time needed for other activities, such as consumption or purchasing, in future periods. It is further recognized that households can elect to reduce the time required for one type of activity by utilizing other resources, thus providing more time for other activities.

It should be recognized that income and time are undifferentiated -- a dollar is a dollar and a minute a minute -- whereas the contents of the household inventory and household technology are differentiated resources. Thus, households must be concerned with the nature of the contents of the inventory and the nature of the information and skills available and make decisions regarding these. With time and income the concern need only be with allocation of the available quantity.

Underlying Assumptions

There are two interrelated assumptions concerning the nature of human activity. First, it is assumed that the household has free choice. Within the limits of available resources, the household may make such purchase and consumption choices as it wishes. Second, it is assumed that these choices are rational. That is, the household will make choices so as to achieve its goal, given knowledge of the alternatives available and their consequences, according to an implicit or explicit set of objectives. Because information and ability to process information will always be limited, we do not postulate optimum choices. Rather, it is assumed that the household can be analyzed as if it had a set of procedures which are effectively utilized to choose within its circle of awareness. That is, we postulate procedural rationality, which is embodied in a Household Plan.

It is also assumed that households make decisions regarding desired changes in financial assets, household inventory, and available skills (Beutler 1976). During any planning period, a household may choose to maintain, increase, or reduce any stock of resources, except time. These decisions will have an impact upon the proportion of current income available for purchasing, the time available for production of commodities and for consumption, and the skills available.

Thus there is a logical hierarchy of decisions. Some decisions, termed "strategic", establish constraints upon other decisions. [One could argue, presumably, that a household makes its consumption decisions first and other, what we have defined as strategic decisions later. Thus, the decision to save or add to the household inventory would be based on resources remaining after consumption. This may well take place occasionally but does not seem to be the usual (across households and over time) pattern. Many decisions have long term impacts, such as having children, obtaining additional training, and buying capital equipment, and thus suggest a more planned approach to allocation of time and other resources.] The decisions at various levels of the hierarchy are not totally under the control of the household. For example, the decision to choose a particular form of employment carries with it a commitment to devote a number of hours which is determined by the employer. Further, there are many factors, such as social influences, which constrain choices. Consumption decisions are made in the context of such constraints. The way in which households make these decisions and the assignment of roles to individuals within the household varies but is usually well organized (Shaffer 1971).

The objective of household behavior is assumed to be an improvement in the "state" of the household as a unit. While many terms could be employed (happiness, well-being, and others), "the term satisfaction has the advantage of being widely used the philosophically neutral" (Leavitt 1976, p.252). Therefore, the term satisfaction will be used to identify the output of the final stage of the household production process. More formally, the objective is to maximize the discounted stream of satisfactions during current and future planning periods.

THE MODEL

The interactions among the elements of the model are shown in Figure I. Within the household there are three productive activities - Purchasing, Commodity Production, and Consumption. These activities utilize skill, information, time, and, in purchasing, income to convert market goods into bundles of characteristics held in the household inventory. In turn these are transformed into the commodity characteristics utilized in consumption.

Consumption - The Production of Satisfaction

The output of the model is satisfaction which results from, and only from, consumption. [This view differs slightly from that of Lancaster who argued that consumption is the production of a collection of characteristics (1966, p.135). The difference lies in that what Lancaster called consumption includes what we call commodity production. That is, we are disaggregating to separate household production from consumption.] The inputs to the consumption production function are time, consumption information, and commodity characteristics.

The nature of the satisfaction desired determines the commodity characteristics and time required, given a particular production function. The choice of production function is dependent on the preferences of the consumer, and the current skill level of the household. Assuming the required time is available, once the production function is selected, it is the assortment of commodity characteristics which must be made available, that is, produced within the household.

FIGURE 1

A GENERAL MODEL OF HOUSEHOLD PRODUCTION

Again note that a commodity is not a good or service but rather an assortment of characteristics. The term commodity is derived from the French commoditT referring to opportunity, particularly opportunity for comfort or convenience, and it is this sense in which it is used here. The nature of the comfort or convenience to be derived by the consumer is determined by the characteristics of the commodity, that is the essential qualities which have meaning to the consumer in relation to the consumer's requirements. These characteristics refer to subjective evaluations - ideas, thoughts, feelings -within the consumer's mind. The assortment of characteristics associated with a commodity combine to form a general sensation of satisfaction or happiness which is valued by the extent it matches the consumer's requirements.

An output of consumption in addition to satisfaction is information which results from the learning aspect of consumption, indeed from all productive processes. The learning takes two forms: 1) how to consume, and, 2) how satisfying was the consumption. The information regarding how to consume enters the household's stock of consumption skill and that regarding the degree of satisfaction helps form preferences for types of satisfaction in the future.

The Production of Commodity Characteristics

The required commodity characteristics are produced within the household using the commodity production function. This process is prior to and separate from consumption. Over a planning period a number of different commodities will be desired. Further, the household will generally have alternative methods for the production of a particular commodity. The commodity production function is, therefore, a set of production functions. One task of the household is to select the specific production function to be used.

The inputs to a household's commodity production function include time, production information, and bundles of characteristics from the household inventory. The outputs include information and the desired commodity or an intermediate good to be returned to inventory. The selection of the particular household production function used will depend upon the time available, the characteristics available from the household inventory, and the commodity or intermediate product required.

Of particular interest are the goods in the household inventory. Again it is not the goods themselves which are important but the characteristics of the goods. Each good is an assortment of characteristics. The commodity production function, in combining goods, is combining assortments of characteristics to produce a new assortment of characteristics called a commodity.

The nature of goods in inventory is somewhat unique. The characteristics of inventory goods are important because of the way they combine with the characteristics of other goods to produce a commodity. Also, the characteristics of each good are not normally determined by the household but rather the source from which the good was acquired. While it is true that the household determines what goods will be in its inventory, it can not pick and choose from the characteristics of each good but must take a complete good with its total set of characteristics.

It is assumed that only goods in the household inventory can be utilized in the household production process. When a commodity is to he produced, the goods with the desired characteristics are extracted from the household inventory. If not all the required characteristics are present then they must be acquired.

The household inventory plays an important role in addition to being the storehouse for characteristics. It acts as a boundary between the household and its environment, thus, is the dividing point between acquisition and consumption.

Purchasing

The goods which a household will purchase during a period are those whose characteristics are perceived to match most closely those sought in the market place. The characteristics to be sought are derived from the following relationship:

Characteristics sought = Characteristics required for the planned production of commodities minus the characteristics in the current inventory plus the characteristics the household desires to add to its inventory minus the characteristics to be acquired via non-market transactions.

The "shopping list" of the household buyer, therefore, consists of a set of characteristics desired, not a list of products or brands. The market goods purchased will not be those with the most characteristics but rather those whose characteristics most closely match the characteristics to be added to the household inventory.

DISCUSSION AND IMPLICATIONS

The view of goods, services, and commodities as combinations or assortments of characteristics suggests an approach for understanding the general nature of the productive activity that takes place within the household. Alderson, throughout much of his writing, placed a great deal of emphasis on the concept of assortments (1957, 1965). He discussed household purchasing as efforts to increase the "potency of the assortment" in the household inventory, that is the potential for satisfying the needs of the household (1957, p. 182).

Alderson further viewed the nature of marketing effort as relating to a sorting process -- a continual effort to increase the value of assortments by bringing the assortment of goods available into agreement with the assortment desired by the household (1957, pp. 195-215). Following this conceptual approach and adding the concept of characteristics the productive activity of the household can be viewed as a set of efforts aimed at changing the assortments of characteristics from what exists to what is required to produce satisfaction.

The household makes planning decisions including desired changes in real and financial wealth, skills, the contents of the household inventory, and the amount of time devoted to work (i.e. income) for a period. The household then plans for desired satisfactions reflecting the preferences of the household as a unit. The plans may not maximize the satisfaction of any one member but rather seek to maximize the total satisfaction of the household (Shaffer 1971, p. 153).

The particular satisfactions desired determine the required assortment of commodity characteristics. These will differ from time to time within a household and across households. Each variation requires a different (assortment of) commodity (characteristics). The selection of the specific production function to be used is a joint decision with the selection of items from the inventory since the characteristics available in the inventory may affect the choice of the production function.

Once the production function has been selected the consumer must allocate the required time and draw items from the household inventory with the appropriate characteristics. In the selection processes it is not the characteristics of a particular item that are important but rather the assortment of characteristics selected.

The consumer tries to obtain the closest match between the assortment of characteristics selected and required. "Extra" characteristics the consumer will try to avoid since this would result in undesired characteristics or waste.

If some required characteristics are not in inventory the consumer must either: 1) acquire the needed characteristics, 2) change the production function, or 3) change the planned satisfaction. The first option may be accomplished through non-market or market transactions with the environment. An acquirer may go to a neighbor, a community institution, or some other agency to seek the needed characteristics. A buyer, a special type of acquirer, will enter the market to search for and acquire the desired characteristics.

In either case the acquirer will seek only the specific assortment needed for the production task not the most characteristics available. "The creative shopper is able to visualize constructive relationships between new products offered for sale and the goods she already possesses. The possibility of enhancing the potency of her assortment is something she can grasp imaginatively, whether she is looking at a really novel product or seeing an old one for the first time in a new light" (A1-derson 1957, p. 182).

Concepts Within the Model

There are several concepts within the model of special interest. One of these is the Lancaster-type view of goods as bundles of characteristics. This view provides a conceptual Base which can be applied across situations to define the object under study. It also emphasizes how assortments of characteristics are combined to form new assortments. Most previous work has assumed the benefits or attributes of one good were largely independent of other goods.

A related concept is the view that the characteristics have value only as inputs to a production process. As inputs the important aspect is the matching with the production process rather than the characteristics, per se.

The view of consumption as a production process has an impact on the nature of consumer choice. Within the model there are three consumption-related choices: 1) the nature of the satisfaction desired, 2) the consumption process to be used, and 3) the commodity production function to be used. These choices are critical for it is the nature of the consumption process which specifies the required commodity characteristics. Similarly, it is the commodity production function chosen which determines the characteristics that will have to be withdrawn from the household inventory. Finally, it is the assortment of characteristics needed that determines the characteristics the household will seek to acquire.

By explicitly recognizing the inputs of time and specialized skills, the model provides for a fuller understanding of the nature of household behavior. As skill levels and time available change, the importance of various characteristics changes also. Thus, critical new variables are introduced into the process of research into consumer behavior.

SUMMARY

This paper is an attempt to provide a mechanism to overcome some of the criticism of the efforts in consumer behavior research over the past thirty years. There is a growing feeling that this research, while valuable, has not reached its potential because it has had too narrow a focus and has lacked a comprehensive model.

The approach suggested here is consistent with the elements of a relevant, real world orientation suggested in the Wind article cited in the introduction of this paper. The shift in the unit of analysis from the individual, in the context of a set of undifferentiated social influences, to the concrete framework of the household, logically brings shifts in the other elements. The domain of interest becomes the entire set of activities in which members of the household participate, rather than simply purchasing activity. Further, the object of analysis shifts to the entire assortment of goods and services and other resources utilized by the household. No single brand, or product, has meaning in the model when it is isolated from the assortment within which it makes a joint contribution to household objectives. Finally, since the household must allocate effort among a series of production functions, and choose the particular form of each production function, the use of time, as a resource, must be considered.

The model provides a structure within which most of the extant research can be incorporated. Further, re-examination of existing research within the context of this model should make it more meaningful since there is a structure through which it can be related to other research and the general tasks of purchasing and consumption. If nothing else, the model might help to overcome the "Lack of creativity and relevance ... evident in most of the standard consumer behavior texts" (Wind 1977, p. 57).

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