Price? Quality? Or Sustainability? Segmenting by Disposition Toward Self-other Tradeoffs Predicts Consumers’ Sustainable Decision-Making

Abstract

Current research suggests consumers trade off price, quality, and sustainability attributes when making choices. Prior studies have typically focused on product attribute dyads, rather than multiattribute decision-making in the sustainability context. For scholars and practitioners, understanding which attributes are more important to consumers in tradeoff contexts has been a challenge. Self-other orientation may play a significant role in predicting consumers’ sustainable choices. We use prior research on equity sensitivity to demonstrate that segmenting consumers by their disposition to self-other tradeoffs (i.e., their self-other orientation) helps predict price–quality–sustainability tradeoffs. We hypothesize and test how members of these equity sensitivity segments tradeoff price, quality, and sustainability attributes in consumption decisions. Through four conjoint studies featuring diverse product assortments and sustainability issues, we find that price provides high utility for Entitled consumers, while sustainability provides high utility for Benevolent consumers. When product attributes are combined, Benevolents are more likely than Entitleds to purchase sustainable products. We also demonstrate that, in the absence of product choices, Equity Sensitives are more willing to choose a sustainable option over a conventional option, even when prices are high. In light of these findings, we discuss the implications for scholars looking to broadly predict consumers’ sustainable choices and for firms looking to target consumers with consumer-centric sustainability strategy.

Appendices

Appendix 1: K-Means Cluster Analysis Details

We reference Ross and Kapitan (2018) for the rationale for using segmentation procedure, which validated the use of K-means resulting in a 3-cluster solution. Use of K-means is useful when the number of clusters is known, which is the case of the application here. The K-means cluster analysis was used to assign individuals into one of three segments (Entitled, Equity Sensitive, and Benevolent) based on their score on the equity sensitivity index. Scores for the Equity Sensitive Index range from 0 to 50, where 0 is very entitled, and 50 is very benevolent.

There are known limitations of K-means cluster analysis including being sensitive to scaling issues across variables, outliers, and initial seed selection. However, in our analysis, these were not an issue. Our analysis segmented one variable (equity sensitivity index score), so no scaling issues were involved. The initial seeds for the clusters were set as the theoretical minimum (0), average (25), and maximum (50) levels. Additionally, since this variable is normally distributed in a bounded range, there were no outliers.

In both study 1 and study 2 we conducted the cluster analysis on the entire sample prior to individual-condition analysis. For both studies, initial seeds for the clusters were set at the theoretical minimum (0), average (25), and maximum (50). The K-means procedure achieved convergence in 5 iterations. For study 1, differences in the means (M_ENT = 13.88, M_EQS = 25.19, M_BEN = 37.38) were statistically different [F_(2,1140) = 1863.46, p = 0.000]. The threshold of scores on the equity sensitivity index were 0–19 as Entitled, 20–32 for Equity Sensitive, and 30–50 for Benevolent segments. For study 2, differences in the means [M_ENT = 15.60, M_EQS = 26.29, M_BEN = 36.62] were statistically different [F_{(2, 244)} = 372.82, p = 0.000]. The threshold of scores on the equity sensitivity index were 0–20 as Entitled, 21–31 for Equity Sensitive, and 32–50 for Benevolent segments.

Appendix 2: Sports watch Study Product Stimuli

Product Description [Low Price, High Quality, Conventional]

This Horlogio Analog Watch has a classically casual style, features a white dial face, which is embellished with stand-out Arabic numerals and minute indexes, and comes protected by a durable sapphire glass dial window. A black silicone band is equipped with a sturdy buckle clasp. Other details include a steel-toned, stationary bezel, 35-mm ceramic case, and waterproofing to 300 ft. Sleek and dependable, this handsome timepiece brings an easy functionality to your fast-paced lifestyle.

Price: $29.

About Horlogio

Horlogio entered the wristwatch market at a time when the watch industry had just discovered digital technology. As a company with cutting-edge technology, Horlogio entered this field confident that it could develop timepieces that would lead the market. Recently, Horlogio launched a series of smartwatches that sync to the user’s cell phone to automatically update the time. Horlogio: Always moving time forward.

Product Description [High Price, Low Quality, Sustainable]

This Horlogio Analog Ecowatch has a classically casual style, features a white dial face, which is embellished with stand-out Arabic numerals and minute indexes. A black plastic band is equipped with a buckle clasp. Other details include a black-toned, stationary bezel, 35-mm plastic case, and a solar cell battery. Sleek and sporty, this handsome timepiece brings an easy functionality to your fast-paced lifestyle.

Price: $149.

About Horlogio

Horlogio entered the wristwatch market at a time when the watch industry had just discovered digital technology. As a company with cutting-edge technology, Horlogio entered this field confident that it could develop timepieces that would lead the market. Recently, Horlogio launched its Ecowatch line, made from sustainably-sourced materials and working to improve living conditions in manufacturing communities around the world. Horlogio: Watching out for a better planet.