Customer satisfaction: review of literature and application to the product-service systems

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Customer satisfaction: review of
literature and application to the
product-service systems



Final report to the Society for Non-Traditional Technology,
Japan


Oksana Mont
Andrius Plepys

Research Associates
International Institute for Industrial Environmental Economics
at Lund University <
P. O. Box 196 Tegnersplatsen 4
SE- 221 00 Lund Sweden
Phone: +46 46 222 0200
Fax: +46 46 222 0230





Lund, February 28 2003

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Acknowledgments





The authors would like to thank the National Institute for Advanced Industrial Science
and Technology in Japan and the Ministry of Economy, Trade and Industry (METI) of
Japan for financially supporting this study and for useful comments on the drafts.

We would like to thank our supervisor, Prof. Thomas Lindhqvist for valuable
guidance and challenging comments.




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Executive summary
This feasibility study commissioned by the National Institute for Advanced Industrial Science
and Technology in Japan (AIST) and supported by the Sustainable Consumption Unit
(UNEP) provided an overview of approaches used in different disciplines for evaluating
consumer behaviour. The study analysed the applicability of existing research concepts,
theories, and tools for evaluating consumer satisfaction with product-service systems (PSS).
It included a discussion of their strengths/weaknesses.
BACKGROUND
It has been recognised that eco-efficiency improvements at production and product design
level can be significantly reduced or totally negated by rebound effect from increased
consumption levels. In line with this problem factor 10 to 20 material and energy efficiency
improvements have been suggested (Factor 10 Club 1994; Schmidt-Bleek 1996; Bolund,
Johansson et al. 1998; Ryan 1998). The improvements, however, if not carefully done, may
still lead to rebound effects through changes in resource prices.
As a potential solution to the factor 10/20 vision, system level improvements have to be
made, contrary to redesigning individual products or processes (Weterings and Opschoor
1992; Vergragt and Jansen 1993; von Weizsäcker, Lovins et al. 1997; Ryan 1998; Manzini
1999; Brezet, Bijma et al. 2001; Ehrenfeld and Brezet 2001).
The product service system (PSS) concept has been suggested as a way to contribute to this
system level improvement (Goedkoop, van Halen et al. 1999; Mont 2000). Here the
environmental impacts of products and associated services could be addressed already at the
product and service design stage. Special focus should be given to the use phase by providing
alternative system solutions to owning products.
A number of examples in the business-to-business (B2B) area exist that confirm the potential
of PSS for reducing life cycle environmental impact. It is, however, increasingly evident that
business examples are difficult to directly apply to the private consumer market. Private
consumers, contrary to businesses, prefer product ownership to service substitutes (Schrader
1996; Littig 1998). Even if accepted, the environmental impacts of “servicised products”
offers depend to a large extent on consumer behaviour.
To address this problem, either behavioural or service system design changes are needed.

Changing human behaviour and existing lifestyles contributes to the vision of sustainable
development, but at the same time, it is an extremely difficult and time-consuming process. A
potentially easier way is changing the design of the product-service system to reduce
behavioural pitfalls. In order to change system design, it is necessary to understand how
consumer acceptance of more sustainable solutions is formed, influenced or changed, what
are the influencing factors and what are the leverage points for best results with lowest costs.
Understanding consumer perceptions and behaviour in this context is crucial.
CONSUMER RESEARCH IN DIFFERENT DISCIPLINES
A considerable body of literature in a range of different disciplines exists on consumption,
consumer behaviour, and consumer decision-making process. Research in economics,
business, marketing, psychology and sociology domains studies consumer behaviour from
different theoretical premises: “for economists, consumption is used to produce utility; for
sociologists, it is a means of stratification; for anthropologists – a matter of ritual and symbol;
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for psychologists – the means to satisfy or express physiological and emotional needs; and for
business, it is a way of making money”(Fine 1997).
For more than a decade now, a range of studies that address environmentally sound consumer
behaviour, e.g. car use, waste sorting, minimisation and recycling practices, have been
conducted. However, few studies evaluated consumer acceptance of the PSS concept – a
consumption based on non-ownership of physical products, see, for example, studies on car
sharing schemes (Schrader 1999; Meijkamp 2000), ski rental and washing services (Hirschl,
Konrad et al. 2001).
One reason explaining the lack of studies in the area could be that, there are still not many
PSS schemes in place to serve as test grounds. Another reason could be uniformity of
research focus. Most of consumer research focused on adopter categories, habits, attitudes
and intentions, rather than on actually measuring the satisfaction level with the service. The
reason is probably that PSS ideas have been promoted by researchers from the environmental
management, marketing, design, and engineering fields, and to a lesser extent by sociologists,
who hold the banner of research in customer satisfaction.
CONSUMER SATISFACTION PROCESS

The paramount goal of marketing is to understand the consumer and to influence buying
behaviour. One of the main perspectives of the consumer behaviour research analyses buying
behaviour from the so-called “information processing perspective" (Holbrook and Hirschman
1982). According to the model, customer decision-making process comprises a need-
satisfying behaviour and a wide range of motivating and influencing factors. The process can
be depicted in the following steps (Engel, Blackwell et al. 1995):
• Need recognition – realisation of the difference between desired situation and the current
situation that serves as a trigger for the entire consumption process.
• Search for information - search for data relevant for the purchasing decision, both from
internal sources (one's memory) and/or external sources.
• Pre-purchase alternative evaluation - assessment of available choices that can fulfil the
realised need by evaluating benefits they may deliver and reduction of the number of
options to the one (or several) preferred.
• Purchase - acquirement of the chosen option of product or service.
• Consumption - utilisation of the procured option.
• Post-purchase alternative re-evaluation - assessment of whether or not and to what degree
the consumption of the alternative produced satisfaction.
• Divestment - disposal of the unconsumed product or its remnants.
Besides the information processing perspective, marketing analyses consumer behaviour by
employing a psychologically grounded concept of attitudes (Balderjahn 1988; Ronis, Yates et
al. 1989; Luzar and Cosse 1998). It is consumer attitudes that are usually named as the major
factor in shaping consumer behaviour and a wealth of studies is available on the topic of how
attitudes can predict behaviour.
INTER-DISCIPLINARITY OF CONSUMER RESEARCH
Different research disciplines diverge in their presuppositions about human nature, factors
influencing consumer behaviour, market response, etc. Therefore, they naturally employ
different research approaches. However, despite that seemingly insurmountable abyss
between disciplines, we see that many research topics and methods overlap, and that there is
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no clear-cut line between different domains of consumer research. Many consumption-related

issues are being increasingly addressed from interdisciplinary or multidisciplinary
perspectives.
Many interdisciplinary concepts and factors are of interest for research on consumer
satisfaction with eco-efficient services and PSS. Contrary to the suggestions from many
traditional neoclassical theories, consumption patterns are very flexible and prone to various
influences. Today consumer behaviour is increasingly dynamic as the choice of alternatives
increases with the growth of global markets. The complexity of the decision-making process
and a large number of influencing factors suggest that changing consumer behaviour towards
more sustainable consumption is a challenging process, which requires coordination at
individual and societal level.
The area of PSS and eco-efficient services is still developing. Further efforts are required in
order to understand relations between the functional and emotional needs of customers.
DIFFERENT LEVELS OF COMPLEXITY
When evaluating satisfaction with a product, customers initially assess tangible features of
the product. In the service context, the features, though observable, are considerably less
tangible and are thus more difficult to assess. A product service system comprises four
components (products, services, infrastructures, and networks), rendering the evaluation
process of consumer satisfaction even more complex (Mont 2000). Here the part of the
system, with which the customer comes into direct contact, is larger than in the case of a pure
product or service, which has implications for customer evaluation process. In the case of
PSS or eco-services, customers are exposed to both dimensions: product and service. In
addition, due to closer relations with the service provider, customers can even become
exposed to infrastructure and networks that support PSS delivery. Therefore, in the PSS
context, an evaluation of all four PSS components becomes relevant:
• Product evaluation is conducted by assessment of products or technologies.
• Person-based or other types of services (technical, information and knowledge services)
that are included into PSS may be evaluated.
• Infrastructure can be evaluated when the customer comes into contact with enabling
supporting technology, or by evaluation of ambient conditions, spatial layout or by
evaluating signs and artefacts of the PSS.

• Networks, are not usually exposed to the customer, but in some cases may be evaluated
when they come into contact with customers.
RESEARCH FRAMEWORKS AND METHODS
A great variety of methods and frameworks for understanding and evaluating consumer
acceptance and satisfaction are used in different disciplines. The study has discussed the
following frameworks: Kano model of customer satisfaction, the Innovation diffusion of
Rogers, the service quality model of Grönsroos, and SERVQUAL model by Parasuraman.
The study has also surveyed a range of tools used for evaluating and measuring consumer
satisfaction. These included surveys, in-depth interviews, focus group interviews,
observations, mystery shopping, and psychographic portrait of customers. A number of
drawbacks and benefits pertaining to the tools have been pointed out and discussed. Both the
research models and the tools, while diverse to a different extent, were found to be useful for
application in the PSS research area.
CONCLUSIONS
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The environmental impacts of ever increasing consumption throughout the world have been
recently recognised. Many solutions have been proposed to combat the rising levels of
consumption. One of the concepts suggested as a potential solution to reduce consumption
levels is the concept of product-service systems (PSS).
The concept proved to be viable in the business-to-business context. However, in the private
consumer markets, it has been less successful, both in terms of economic viability and
environmental impact reduction. User behaviour has been named as the primary reason for
this situation.
To address this problem, either behavioural or service system design changes are needed.
Changing human behaviour and existing lifestyles contribute to the vision of sustainable
development, but it proves to be an insurmountable task over a short period of time.
Alternatively, changing the design of product-service system to reduce the behavioural
pitfalls could be a potentially easier way towards sustainable development. Changing system
design requires understanding how consumer acceptance of more sustainable solutions is
formed, influenced or changed, what are the influencing factors and what are the leverage

points for the best results with lowest costs. Understanding consumer perceptions and
behaviour in this context is crucial.
However, the consumer decision-making process is much more complex and intricate than
just a simple decision about shifting from owning a product towards paying per use of it.
Throughout this study we demonstrated that products are not seen purely for their functional
features, but rather products are complex combinations of various attributes, which, together
with functionality, also bring status, serve as a key to a certain social class, reinforce self-
esteem, and much-much more.
Therefore, the goal of this study was to take a step towards a better understanding of the
complexity of the phenomena we are aiming to change. We did that by looking at how
different disciplines perceive the consumption process in general and the consumer decision-
making process in particular. We saw the wealth of theories and frameworks being developed
trying to solve this puzzle. We then looked closer at the potentially most promising models,
which could prove useful in understanding the consumer decision-making process in the
context of ownerless consumption.
We also found some useful tools, which can be employed for collecting information about
and from consumers. Identified frameworks and tools were then evaluated for suitability in
the PSS context. We also provided some suggestions and examples for how several presented
models could be operationalised in the PSS context.
Some important lessons were learned from this study:
• The consumer is a moody creature – swinging between rationality and emotional
behaviour.
• All disciplines we looked at addressed consumption from some perspective. This
perspective may be unique to this discipline, or may share common premises with other
disciplines. Cross-fertilisation and learning is the key to success.
• The challenge is not in the availability of analysis tools, but in analysis frameworks,
which would allow us to speak the same language as our system and understand it better.
• We can probably employ just one tool to measure customer satisfaction with our system.
But it is multifaceted and thus a combination of tools is more promising.
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• PSS is a system, comprised of products, services, infrastructures, and networks. The
criteria we want to evaluate this system against should include attributes of each
dimension.
• PSS is a multi-disciplinary area and initiating system level change will require system
level effort. Researchers with various backgrounds need to be involved in developing
ideas and methods for measuring customer satisfaction with PSS. “Non-social” PSS
practitioners should learn methods of social sciences.

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Table of content
EXECUTIVE SUMMARY.....................................................................................................3
1 BACKGROUND..............................................................................................................10
2 METHODOLOGICAL FRAMEWORK AND GOAL OF THE STUDY.................12
2.1 GOAL...........................................................................................................................12
2.2 METHODOLOGY...........................................................................................................12
2.3 LIMITATIONS ...............................................................................................................12
2.4 OUTLINE OF THE REPORT .............................................................................................13
3 CONSUMER RESEARCH IN DIFFERENT DISCIPLINES ....................................14
3.1 BUSINESS AND MARKETING DOMAIN............................................................................14
3.2 ECONOMICS DOMAIN ...................................................................................................19
3.3 SOCIAL STUDIES DOMAIN.............................................................................................21
3.4 PSYCHOLOGY DOMAIN.................................................................................................22
3.5 ENVIRONMENTAL STUDIES...........................................................................................24
4 FRAMEWORKS AND TOOLS FOR EVALUATING CUSTOMER
SATISFACTION.............................................................................................................27
4.1 FRAMEWORKS FOR EVALUATING CUSTOMER SATISFACTION WITH PRODUCTS .............27
4.1.1 Kano Model of Customer Satisfaction.................................................................27
4.1.2 Innovation framework..........................................................................................28
4.2 FRAMEWORKS FOR EVALUATING CUSTOMER SATISFACTION WITH SERVICES ...............29
4.2.1 Why measure services with different measures? .................................................29

4.2.2 Service Quality Model..........................................................................................30
4.2.3 The SERVQUAL model........................................................................................31
4.3 TOOLBOX FOR MEASURING CUSTOMER SATISFACTION.................................................32
4.3.1 Surveys.................................................................................................................33
4.3.2 In-depth interviews...............................................................................................34
4.3.3 Focus group interviews........................................................................................35
4.3.4 Observations ........................................................................................................35
4.3.5 Mystery shopping .................................................................................................36
4.3.6 Psychographic portrait of customers...................................................................36
5 ANALYSIS OF FRAMEWORKS AND THEIR APPLICABILITY FOR PSS .......38
5.1 USEFULNESS OF FRAMEWORKS FOR PSS......................................................................38
5.1.1 Marketing model for creating customer satisfaction...........................................38
5.1.2 Kano Model of Customer Satisfaction.................................................................39
5.1.3 Innovation framework of Rogers .........................................................................40
5.1.4 Service Quality Model..........................................................................................40
5.1.5 SERQUAL model..................................................................................................41
5.2 TOWARDS A FRAMEWORK FOR EVALUATING CUSTOMER SATISFACTION WITH PSS......41
5.2.1 Identifying PSS attributes ....................................................................................42
5.2.2 What tools to use for evaluating PSS?.................................................................45
6 CONCLUSIONS..............................................................................................................47
7 SUGGESTIONS FOR FURTHER WORK..................................................................49
8 APPENDIX ......................................................................................................................51
9 REFERENCES ................................................................................................................52
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List of abbreviations

B2B Business-to-business
B2C Business-to-customer
PSS Product-service system
TRA Theory of Reasoned Action

TPB Theory of Planned Behaviour
SERVQUAL Service Quality model
QFD Quality Function Deployment


List of Figures
Figure 1 Three levels of approaches for evaluating consumer acceptance of products...........12
Figure 2 Disciplines that study consumption and consumer behaviour ..................................14
Figure 3 Customer satisfaction process (adopted from (Engel, Blackwell et al. 1995), p. 143-
154, 177) ..........................................................................................................................15
Figure 4 The hierarchy of effects models ................................................................................18
Figure 5 The Kano model (Kano, Seraku et al. 1996) .............................................................27
Figure 6 Adopter categorisation on the basis of relative time of adoption of innovations
(Rogers 1995)...................................................................................................................29
Figure 7 The Service Quality Model (Grönroos 1982)............................................................30
Figure 8 The Total Perceived Quality (Grönroos 1988)..........................................................31
Figure 9 Service Quality model (Parasuraman, Berry et al. 1985)..........................................32
Figure 10 Different data collection methods for different type of attributes (Edvardsson,
Gustafsson et al. 2000).....................................................................................................40
Figure 11 PSS dimensions that can be exposed to customer judgement .................................43
Figure 12 Service Attribute Dual Importance Grid (Jacobs 1999) ..........................................46


List of Tables
Table 1 Some attributes for tool library...................................................................................44
Table 2 Customer satisfaction measures for new products in financial services (Edgett and
Snow 1997)......................................................................................................................51


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A dissatisfied customer will tell seven to 20 people about their
negative experience. A satisfied customer will only tell three
to five people about their positive experience (Kan 1995).
1 Background
It has been recognised that eco-efficiency improvements at production and product design
level can be significantly reduced by ever increasing consumption levels (Khazzoom 1980),
(Brookes 2000; Binswanger 2001; Haake and Jolivet 2001; OCSC 2001). While companies
are struggling to reduce material intensity of each production unit and each product, the total
environmental impact of the economy is growing. In order to address this problem, some
authors suggest that for long-term sustainability, we need a factor of 10 or even 20 in
materials and energy efficiency use improvements (Factor 10 Club 1994; Schmidt-Bleek
1996; Bolund, Johansson et al. 1998; Ryan 1998). As a potential solution to the factor 10/20
vision, some authors propose that system level improvements have to be made, instead of
just having products redesigned (Weterings and Opschoor 1992; Vergragt and Jansen 1993;
von Weizsäcker, Lovins et al. 1997; Ryan 1998; Manzini 1999; Brezet, Bijma et al. 2001;
Ehrenfeld and Brezet 2001).
Sustainable consumption has been highlighted as an important constituent of sustainable
development in Rio de Janeiro, 1992 at the United Nation Conference for Environment and
Development and by the World Summit on Sustainable Development in Johannesburg, ten
years later in 2002. One of the generally accepted definitions of sustainable consumption is
the following: “sustainable consumption is the use of goods and services that satisfy basic
needs and improve quality of life while minimizing the usage of irreplaceable natural
resources and the by-products of toxic materials, waste, and pollution” (Sierra Club 2002). It
highlights the need to provide value to people, while reducing the environmental impact
associated with producing and delivering this value. In other words, there is a need to de-link
consumption of goods and services from material consumption. Many authors call for
simplifying lifestyles and reducing consumption, associating the management of consumption
with the so-called sufficiency revolution
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, which considers how much is enough for a good

life. Our comprehension of this approach is still in its initial stage (Sachs 1999), but what is
clear already is that it is a challenging task to reduce consumption levels, as the entire
economic system is based on presumption of economic growth linked to the increased use of
material resources and products. What is needed instead is consumption that is based on
economic growth, which is decoupled from material resources. We propose the following
definition of sustainable consumption: sustainable consumption is consumption that provides
value by decoupling material-based growth from economic growth and environmental
impact. Following this definition, more value needs to be provided with fewer materials
involved and less environmental impact associated with the production and total delivery of
that value.
The product service system (PSS) concept has been suggested as a way to contribute to the
system level improvement that tries to de-link economic and environmental growth
(Goedkoop, van Halen et al. 1999; Mont 2000). The concept proposes that the environmental

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Sufficiency solutions refer to organising activities in more intelligent ways, in which the need for product is
eliminated (see Heiskanen, Eva and Mikko Jalas. (2000) Dematerialization Through Services - A Review and
Evaluation of the Debate. Ministry of Environment: Helsinki, no. 436, p. 12)
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impacts of products and associated services should be addressed already at the product and
service design stage, with special focus on the use phase by providing alternative system
solutions to owning products.
A number of examples (mainly from the business-to-business area) exist that confirm the
potential of PSS for reducing life cycle environmental impact. It is, however, increasingly
evident that these examples are difficult to directly apply to the market of private consumers,
mainly because business customers often prefer services to product ownership (Alexander
1997), while according to some studies it is a formidable challenge for private customers to
adopt “ownerless consumption” (Schrader 1996; Littig 1998). In addition, the environmental
impacts of such offers depend to a large extent on user behaviour. To address this problem,
changes are needed in consumption behaviour; consumption patterns and levels; and

ultimately a change in lifestyles towards more sustainable patterns. Many authors recognise
that “the health of our planet is inextricably dependent upon human behaviour” (Geller 1995),
and therefore changing human behaviour may foster and maintain sustainability (Gudgion
and Thomas 1991; McKenzie-Mohr, Nemiroff et al. 1995; Oskamp 2000). An increasing
number of studies have been conducted in search for instruments that can potentially help
facilitate the shift toward more sustainable patterns of consumption, e.g., (Goodwin,
Ackerman et al. 1997); (OECD 1997); (Stern, Dietz et al. 1997); (Thøgersen and Ölander
2002).
In order to initiate the change process, it is necessary to understand how consumer acceptance
of more sustainable solutions is formed, influenced, or changed, what the influencing factors
are and what the leverage points for best results with lowest costs are. A considerable body of
literature exists on consumption, consumer behaviour, and consumer decision-making
process. The range of disciplines that address these questions from different points of view is
quite broad - economics, business and marketing, social, and psychological studies of
consumer behaviour, to name just the major ones. According to Fine (1997), “for economists,
consumption is used to produce utility; for sociologists, it is a means of stratification; for
anthropologists, it is a matter of ritual and symbol; for psychologists, it is the means by which
to satisfy or express physiological and emotional needs; and for business, it is a way of
making money”(Fine 1997).
There is a range of studies that address consumer acceptance and attitudes towards more
environmentally sound consumer behaviour, mostly coming from studies of car use, waste
sorting and minimisation practices, recycling and other similar industries, see for example
Steg, et al (1995), Aragón-Correa and Llorens-Montes (1996), and Guerin (2001) (Steg, Vlek
et al. 1995; Aragón-Correa and Llorens-Montes 1996; Guerin 2001). For more than a decade
now, this wealth of literature has also been applied to studies of consumer acceptance of
environmentally sound products and services, e.g. Gatersleben (2001) and Rowlands, et al
(2002) (Gatersleben 2001), (Rowlands, Parker et al. 2002).
However, very few studies evaluated consumer acceptance of the concept of product service
systems, i.e. consumption that is not based on ownership of goods, see, for example, studies
that investigated consumer acceptance of car sharing schemes (Schrader 1999; Meijkamp

2000), ski rental and washing services (Hirschl, Konrad et al. 2001). The lack of studies that
measure customer acceptance of PSS depends on two main reasons. First, there are still not
many PSS schemes being developed that could serve as test grounds. Second, some of the
research that studied consumer acceptance, focused on adopter categories, habits, attitudes
and intentions, rather than on actually measuring the satisfaction level with the service. The
reason is probably that eco-services and PSS ideas have been promoted by environmental
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management researchers, engineers and designers, environmental marketing researchers, and
to a lesser extent by sociologists, who hold the banner of research in customer satisfaction.
This report is a result of the feasibility study that is a part of the project on Life-Cycle
Approach to Sustainable Consumption, initiated and funded by the National Institute for
Advanced Industrial Science and Technology in Japan (AIST) and supported by UNEP,
Sustainable Consumption Unit.
2 Methodological framework and goal of the study
2.1 Goal
The goal of the study is to provide ideas and suggestions for how customer satisfaction with
PSS can be evaluated. This goal will be reached in a number of steps. We will first provide an
overview of existing concepts and schools of thought from different disciplines that try to
explain consumer behaviour and consumption patterns. The overview will be followed by the
presentation of frameworks and tools that are used for understanding consumer satisfaction
with products and services. These frameworks will then be evaluated as to whether they
could be used for estimating customer satisfaction with PSSs and what kinds of adjustments
are necessary. Some elaboration on how these tools could be used in the PSS context will be
provided. The study results should be treated as indicative for future more in-depth studies in
proposed areas.
2.2 Methodology
Based on the presented perspectives that are of importance for understanding and evaluating
consumer behaviour, the following framework for this study is suggested.

Disciplines

Attitudes
Behaviours
Acceptance
Methods
Techniques

Figure 1 Three levels of approaches for evaluating consumer acceptance of products
This feasibility study is a desk-top study that includes analysis of academic journals with the
use of several databases ELIN, Lovisa, Science Direct, Emerald, ABI Inform available at
Lund University and through national Swedish library database LIBRIS. A number of
interviews with experts in academic circles and in European and Swedish research
institutions were conducted with regard to the questions about consumer behaviour and
consumer acceptance of eco-efficient services and latest updates in the PSS area.
2.3 Limitations
The study is limited by time and no deep analysis of consumer behaviour from a specific
discipline point of view has been performed, as the goal of the study is to evaluate
applicability of the most often used methods for understanding and measuring consumer
acceptance and satisfaction.
No sensory and taste ratings and preferences that do not directly translate into the purchase,
consumption, or market success of a product were included into this study.
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The overview of tools for measuring customer satisfaction excluded practical advice on how
to develop these tools and how to analyse collected data, due to the general nature of these
tools and availability of sources, which can provide help in these respects.
2.4 Outline of the report
An overview of the sections of the report is presented below.
Section 1 provides the background and the rationale for engaging in the research of consumer
behaviour. Section 2 provides the methodological framework for carrying out the study.
Section 3 provides an overview of some concepts and theoretical groundings from different
disciplines that study consumer behaviour, such as economics, business and marketing

studies, social studies, psychological research, and the environmental field. The section
identified differences in studying consumer behaviour and consumption. It also highlights the
linkages between the disciplines in their approach towards understanding consumer related
decision-making processes and draws attention to the relevant current contributions to the
discussion from each discipline.
Section 4 provides an overview of the major frameworks and techniques for understanding
and evaluating consumer acceptance and satisfaction, which are used in many different
disciplines. The described frameworks are Kano Model of Customer Satisfaction, Innovation
framework of Rogers, Service Quality Model of Grönsroos, and SERVQUAL model by
Parasuraman. The specific tools for evaluating and measuring consumer satisfaction include
surveys, in-depth interviews, focus group interviews, observations, mystery shopping, and
psychographic portrait of customers.
Section 5 analyses presented frameworks and tools for their usefulness for the area of eco-
efficient services and PSS. Some suggestions are provided as to how to choose the salient
attributes on offer, how to blueprint the service process and provides some hints on how to
evaluate customer satisfaction by operationalising the Kano Model of Customer Satisfaction.
A relevant example of tool library service attributes is presented. The section discusses
whether new tools are needed for evaluating the acceptance of PSS or what kind of
adjustments need to be done to suit existing techniques for the new application area.
Conclusions are drawn and directions for future research are discussed in section 6.

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3 Consumer research in different disciplines
The study of consumption is increasingly enriched by a growing number of contributions.
The purpose of this section is to provide a selective sampling of literature that deals with
issues or methods, which might be applicable for studying the field of product-service
systems. It is far from an overview of how consumption has been studied by different
disciplines. Instead, the intention is to select useful sources and draw methodological and
theoretical lessons, rather than to provide a thorough literature analysis.
This section provides a selective presentation of how consumption and consumer behaviour is

studied and explained by economics, business and marketing studies, social, and
psychological research. The disciplines differ in their presuppositions about the human
nature, influencing factors of consumer behaviour, and market response. They also employ
different research methods, some of which will be described in the following sections.
Despite that seemingly insurmountable abyss between disciplines, we will see that many
research topics overlap, and that obviously there is no clear-cut line between different
domains of consumer research. In addition, a lot of consumption related issues have been
addressed from an interdisciplinary or multidisciplinary perspective. As Ackerman puts it, “a
new interdisciplinary area of research on consumption has emerged in the last 10-15 years,
drawing contributions and participants from sociology, anthropology, history, philosophy,
literature, and marketing - even, on occasion, from economics” (Ackerman 1997).
Consumer
behaviour
Environmental
studies
Business
management
& marketing
PsychologyEconomics
Social
studies

Figure 2 Disciplines that study consumption and consumer behaviour
3.1 Business and marketing domain
This section provides a summary of the current understanding of consumer behaviour based
on the overview of the existing body of business literature on the subject. Special focus is
given to the formation of consumer needs and attitudes, information processing and the
decision-making process within the purchasing decision. The ultimate goal of this decision-
making process is satisfaction of consumer needs. This section helps the reader understand
different stages in the consumer decision process and distinguish between the notions of

customer acceptance and customer satisfaction. It provides background to the following
sections, which analyse consumption and consumer behaviour from the point of view of
different disciplines.
Business management and marketing are concerned with ways of satisfying and retaining
customers for the purpose of generating profits, improving companies’ competitiveness and
securing market share. Some of the major themes in the business management domain
include studies of customer relationship marketing, which analyses how customer satisfaction
15
relates to competitiveness and profits, methods for measuring customer satisfaction
(Thomson 1995), and approaches that can help transfer customer satisfaction data into
strategies for improvement of customer relations and their retention (Reidenbach and
McClung 1998), (Johnson and Gustafsson 2000), (Schellhase, Hardock et al. 2000).
The paramount goal of the marketing domain is to understand the consumer and to influence
buying behaviour. One of the main perspectives of the consumer behaviour research analyses
buying behaviour from the so-called “information processing perspective” (Holbrook and
Hirschman 1982). The basic concept is derived from the model of the consumer’s decision-
making process, suggested by Dewey (1910) and adapted by Simon (1955), that includes the
following major steps: problem recognition, search, alternative evaluation, choice and
outcomes (Dewey 1910), (Simon 1955). Later this model was expanded to include other steps
and add more details. One of the models, which will be used in this study as a basis for
understanding the consumer buying behaviour, is the model suggested by Engel et al. (1995),
because it combines the consumer decision process with the influencing factors (Figure 3).

At or above threshold Below threshold
No need
recognition
Degree of discrepancy
Actual state Desired state
Dissatisfaction
Satisfaction

Internal
search
External
search
Stimuli
•
Marketer
dominated
•
Other



Memory
Environmental
influences
•
Culture
•
Social class
•
Personal influence
•
Family
•
Situation
Individual differences
•
Consumer resources:
time, money,

information
processing
•
Motivation
•
Knowledge
•
Attitudes
•
Personality, values,
and lifestyle
Exposure
Attention
Comprehension
Acceptance
Retention
Need
recognition
Information
search
Pre-purchase
alternative
evaluation
Purchase
Post-purchase
alternative
evaluation
Consumption
Divestment
Variables

The need recognition process

Figure 3 Customer satisfaction process (adopted from (Engel, Blackwell et al. 1995), p. 143-154, 177)
According to the model, the customer decision-making process comprises a need-satisfying
behaviour and a wide range of motivating and influencing factors. Consumer decision-
making process has the following steps:
1. Need recognition – realisation of the difference between desired situation and the current
situation that serves as a trigger for the entire consumption process.
16
This process depends on the difference between the desired and the current state of affairs.
Several factors can influence this process: changed circumstances, time, new product
purchase, and consumption that trigger the need for other products. Once a certain threshold
of this discrepancy is exceeded, the need is recognised. However, to trigger the action, the
need should be considered as important and the need satisfaction should be within a person’s
resources (e.g. time, money, etc.).
2. Search for information - search for data relevant for the decision, both from internal
sources (one’s memory) and/or external sources.
The search for information usually begins with the internal search for any sort of information,
memory, or experience with a product or service. The outcomes of this stage depend on the
actual existence of internal knowledge about the subject and on the ability of the individual to
retrieve this information. If the internal search does not produce expected results, the
individual turns toward external information sources. The external searches differ in scale
(how comprehensive the search for information is), in the direction (advertising, brands, in-
store information, information received from sales people, or social contacts) and in the
sequence of the research (brand or attribute processing). The major determinants that
influence a search are product determinants, situational determinants, retail, and consumer
determinants. The consumer determinants comprise knowledge, involvement, attitudes,
beliefs, and demographic features.
The extent of the information search depends on the degree of importance of the purchasing
decision to the customer. For example, people seek information more actively than in cases of

more expensive products (Engel, Blackwell et al. 1995). The relevance of product
information presented to consumers also affects the purchasing decision. It has been shown
that irrelevant information weakens consumers’ beliefs in the product’s ability to deliver the
outcome and satisfy the need (Meyvis and Janiszewski 2002).
3. Pre-purchase alternative evaluation - assessment of available choices that can fulfil the
realised need by evaluating benefits they may deliver and reduction of the number of options
to the one (or several) preferred.
In this step, a number of alternatives are evaluated and the final option, which is believed to
be able to satisfy consumer need, better than the other options, is chosen. A number of
evaluative criteria, which represent product or service attributes or particular dimensions of
their delivery, are used for the evaluation. The criteria can be functional or expressive in
nature, for example, price, brand name, colour, smell, environmental attributes, etc., which
have different importance to various individuals (Mittal, Ratchford et al. 1990). Ratchford
(1975) posits that consumers may often choose products for the status and image attributes
and less for their functional features (Ratchford 1975).
Differences in product attributes are also reflected in the way the consumer knowledge about
a product can be measured. Functional attributes are more likely to be measured objectively,
while expressive /status/ and image attributes can primarily be measured through subjective
experiences of consumers with products (Park, Mothersbaugh et al. 1994). It has been
demonstrated that these image or intangible attributes are important in customer evaluations,
especially when their tangible features are difficult to evaluate (Olson 1977).
In addition to the choice of criteria, consumers also choose which alternatives they will
evaluate. The set of alternatives for the evaluations process is called the consideration or
evoked set. Research on the evoked set (number of alternatives that are considered in the
evaluation process) has focused on both explaining the process in which close substitutes -
alternatives sharing the same attributes (usually within the same product category, but of
17
different brands) – are being evaluated and on the choice of alternatives from different
product categories - noncomparables, so called across-category choice alternatives (Johnson
1989), (Park and Smith 1989). The difference in the choice process between close substitutes

and alternatives from different product categories has been shown. The choice process
between close substitutes is a top-down process, in which consumers start from comparing
general information about product categories, narrowing it down to concrete choices among
brands of products (Park and Smith 1989), (Johnson 1988). The choice process between
alternatives from different product categories is the opposite. It starts from concrete features
of alternatives and widens the comparison to more abstract characteristics, based on which
the alternatives are being compared (Johnson 1989). Knowledge from these studies is useful
for analysing consumer acceptance of PSS, because in the PSS context, the consumers have
to compare service alternatives to products, which resembles comparing non-comparables
from different product and service categories. Following Johnson’s logic, the evaluation in
this case will also be a bottom-up process.
The information processing capabilities about product characteristics are shown to depend on
how well individuals are informed about a product, brand and entire product category
(Beattie 1982), (Bettman 1979). It is demonstrated that well-informed customers focus more
on objective information and particular product attributes, while less informed customers rely
on general information about the entire product category (Bettman and Sujan 1987) and use
more subjective information and recommendations of social contacts (King and
Balasubramanian 1994). Furthermore, studies report that well-informed customers are willing
to pay more for the quality brand than were lower-knowledge customers (Cordell 1997).
An important part of the pre-purchase alternative evaluation is acceptance - whether the
consumer accepts and believes the information provided and trusts the sources of that
information.
4. Purchase - acquirement of the chosen option of product or service.
The purchase step is associated with a number of decisions that individuals have to make.
Even if the alternative is already chosen, the purchasing may still not be made, because
motivations and circumstances can change, new information can become available, or there
could be no such alternatives available at that particular place. The decision also depends on
when and where to buy, and/or how to pay for the purchase. Thus, at the purchasing stage,
the final decision can be fully planned, partially planned, or totally unplanned.
5. Consumption - utilisation of the procured option.

After the product or service is bought, consumers can use it directly, in a period of time or
could even abort the consumption process all together. Research distinguishes between sacred
and profane consumption, as well as impulsive consumption.
6. Post-purchase alternative evaluation - assessment of whether or not and to what degree
the consumption of the alternative produced satisfaction.
The result of this step can be either satisfaction or dissatisfaction. Satisfaction is the result of
a post-consumption evaluation if a chosen alternative met or exceeded expectations of the
customer.
According to Oliver’s expectation-disconfirmation model, consumers have three levels of
expectations about the product or service performance: equitable performance (what the
customer has to receive in return for money and effort spent), expected performance, and
ideal performance (Oliver 1980). The model states that individual’s expectations are either
confirmed if a product performs as expected, negatively disconfirmed when the product
18
performs more poorly than expected, or positively disconfirmed if a product performs better
than expected. A negative disconfirmation results in dissatisfaction, and consumption of the
product is likely to be discontinued. Confirmation or positive disconfirmation results in
satisfaction and the continued use of the product or service.
7. Divestment - disposal of the unconsumed product or its remnants.
Divestment became a focus of customer research relatively recently because of growing
environmental concerns. Most of the research has been focusing on final disposal and
recycling, but recently the secondary use of a product, such as reuse and remarketing, is
gaining more and more attention.
Besides “information processing perspective” presented above, marketing analyses buyer
behaviour by employing a psychologically grounded concept of attitudes. Attitudes are
usually named as the major factor in shaping consumer behaviour and a wealth of studies is
available on the topic of how attitudes can be used to predict consumer behaviour (Balderjahn
1988; Ronis, Yates et al. 1989; Luzar and Cosse 1998). Katz’ functional theory of attitudes
explains the role of attitudes in shaping social behaviour (Katz 1960). People form attitudes
toward products, brands, advertisements, stores, themselves, and other people based on four

underlying reasons: utilitarian function (based on rewards and punishments), value-
expressive function (consumer’s central values or self-concept), ego-defensive function
(serves to protect the person from internal feelings of threat), and knowledge function (need
for order, meaning, and structure). Underlying dimensions of attitude include: affect
(feelings), behaviour (do), and cognitions (learning and beliefs). These dimensions can be
combined into three hierarchies of effects models, which try to explain a different kind of
consumer decision-making process.
• The Standard Hierarchy or High Involvement Hierarchy perceives the consumer as a
rational problem solver and suggests the following order of consumer responses:
cognition, affect, and behaviour (learn-feel-do).
• The Low-Involvement Hierarchy applies to low-involvement purchase situations where
both motivation and risk are low e.g. trial purchases and suggests the following order of
consumer responses: cognition, behaviour, and affect (learn-do-feel).
• The Experiential Hierarchy highlights the importance of consumers’ emotions (impulse
purchases) and situations in which consumer are highly involved with outcome and
suggests the following order of consumer responses: affect, behaviour, and cognition
(feel-do-learn).
Beliefs
Behaviour
Affect
Beliefs
BehaviourAffect
Affect Behaviour Beliefs
Attitude based
on cognitive
information
or knowledge
Attitude based
on behavioural
learning

Attitude based
on hedonic
expereince
Sales
Customer satisfaction
Positive word-of-mouth
Matrix
Environmental factors
High involvement
Low involvement
Experiential
Inputs Outputs
Beliefs
Behaviour
Affect
Beliefs
BehaviourAffect
Affect Behaviour Beliefs
Attitude based
on cognitive
information
or knowledge
Attitude based
on behavioural
learning
Attitude based
on hedonic
expereince
Sales
Customer satisfaction

Positive word-of-mouth
Marketing mix
Environmental factors
High involvement
Low involvement
Inputs Outputs
Beliefs
Behaviour
Affect
Beliefs
BehaviourAffect
Affect Behaviour Beliefs
Attitude based
on cognitive
information
or knowledge
Attitude based
on behavioural
learning
Attitude based
on hedonic
expereince
Sales
Customer satisfaction
Positive word-of-mouth
Matrix
Environmental factors
High involvement
Low involvement
Inputs Outputs

Beliefs
Behaviour
Affect
Beliefs
BehaviourAffect
Affect Behaviour Beliefs
Attitude based
on cognitive
information
or knowledge
Attitude based
on behavioural
learning
Attitude based
on hedonic
experience
Sales
Customer satisfaction
Positive word-of-mouth
Marketing mix
Environmental factors
High involvement
Low involvement
Inputs Outputs
Beliefs
Behaviour
Affect
Beliefs
BehaviourAffect
Affect Behaviour Beliefs

Attitude based
on cognitive
information
or knowledge
Attitude based
on behavioural
learning
Attitude based
on hedonic
expereince
Sales
Customer satisfaction
Positive word-of-mouth
Matrix
Environmental factors
High involvement
Low involvement
Experiential
Inputs Outputs
Beliefs
Behaviour
Affect
Beliefs
BehaviourAffect
Affect Behaviour Beliefs
Attitude based
on cognitive
information
or knowledge
Attitude based

on behavioural
learning
Attitude based
on hedonic
expereince
Sales
Customer satisfaction
Positive word-of-mouth
Marketing mix
Environmental factors
High involvement
Low involvement
Inputs Outputs
Beliefs
Behaviour
Affect
Beliefs
BehaviourAffect
Affect Behaviour Beliefs
Attitude based
on cognitive
information
or knowledge
Attitude based
on behavioural
learning
Attitude based
on hedonic
expereince
Sales

Customer satisfaction
Positive word-of-mouth
Matrix
Environmental factors
High involvement
Low involvement
Inputs Outputs
Beliefs
Behaviour
Affect
Beliefs
BehaviourAffect
Affect Behaviour Beliefs
Attitude based
on cognitive
information
or knowledge
Attitude based
on behavioural
learning
Attitude based
on hedonic
experience
Sales
Customer satisfaction
Positive word-of-mouth
Marketing mix
Environmental factors
High involvement
Low involvement

Inputs OutputsInputs Outputs

Figure 4 The hierarchy of effects models
19
These models suggest that there are three ways to change attitude: via changing belief, affect
or via behavioural change. Theoretical frameworks dealing with beliefs are described in
section 3.4.
This section described the step-by-step model of the customer satisfaction process stemming
from the “information processing perspective” and the hierarchy of effects models, which are
based on a psychologically construct of attitudes. These two models in a way provide
opposite views of the consumer decision-making process.
The next section will explore the economic theory of consumer behaviour in the last decades.
3.2 Economics domain
“There was once a man who lived in a Scarcity. After many
adventures and the long voyage in the Science of Economics,
he encountered the Society of Affluence. They were married
and had many needs” (Baudrillard 1988), p. 35.
Consumption plays a central role in economic theory. The most popular theories and models
in economic consumer research portray consumers as somewhat passive rational decision-
makers and assume that well-defined and insatiable desires for goods and services drive
consumer behaviour in the market. Traditional neoclassical economists posit that these
desires are not affected by culture, institutional frameworks, social interactions, or the
consumption choices and lifestyles of their social contacts. Furthermore, these desires or
preferences for certain goods are stable by nature and consumers maximise their own utility
in the world of perfect information and market competition. They identify three major
influencing factors that affect consumption - prices, incomes, and personal tastes. As personal
tastes fall outside the realm of economics, most often, traditional economists restrict
themselves to the role of income and prices in determining consumption choices.
Other presuppositions of economic theory of consumer demand are that desires are not
diminishing as more of them are satisfied and that the origin of desires is in the consumers

themselves. In response to these traditional views, Galbraith argued that we need to realise
that there are limits to desires and that expressions of these desires in specific wants are
created by industrial systems, implying that consumer sovereignty is an empty concept
(Galbraith 1958). Here he implies that only physiological needs have limits. He critiques the
present consumer societies, which exploit the fact that psychological needs are insatiable, and
which employ great amount of resources to discover and create urge for more and more
desires, all in order to sustain the growth drive of industry.
After Galbraith, the narrow scenario of reality drawn by neoclassical economists has been
heavily criticised on several grounds and a shift towards new foundations in microeconomics
has taken place (Lancaster 1966), (Lancaster 1966), (Lancaster 1971), (Michael and Becker
1973). A modern consumer theory regards consumers as full members of the market who
create their utility in the context of the household. The fundamental prerequisite of this
approach is that goods and services are simply inputs to the consumption process, and their
utility is being extracted by consumers, who spend time and other resources, in the
household. The notion that needs and outcomes is really what consumers want is at the centre
of this new approach. Needs may be fulfilled by putting market-provided goods through
consumption process, in which time and skills of the consumers are employed. The end result
could be a great variety of ways consumers can produce utility. This vast amount of
alternatives makes the consumer decision process a complex task, which consumers face
every day. Taking into account the concept of bounded rationality with lack of information
and cognitive limitations, it is clear that consumers cannot be efficient in their choices and
20
that neoclassical economics failed to provide sufficient explanation of consumption
processes.
A different approach to the consumer decision process comes from the studies by prominent
economists who explored the effects of tastes and preferences on consumption choices
(Scitovsky 1992), (Becker 1996). It is been argued that life would be impossibly complex if
we were to go through the entire decision-making process every time we are faced with a
choice. It is suggested instead that our lives are deeply routinised and the decisions about
familiar daily situations are made automatically, as a matter of habit. Habits are formed based

on changes in tastes, and our preferences depend on experiences in past consumption. This
discussion stems from the psychological learning theory, according to which habits are
formed in the process of continuous reinforcement of influencing factors. Once people are
satisfied with their choice and situation, their behaviour becomes routinised and they do not
tend to search for new solutions, until new signals and influences come that can trigger the
search for better alternative.
These ideas built the foundation for an extensive debate on economic implications of habits
(Pollak 1970), (von Weizsäcker 1971). Economists suggested looking at individual costs as
an explanation of the habitual behaviour. Stigler and Becker (1977) explain stability of habits
with a certain capital, consisting of skills, information and experiences, that was acquired
during consumption of a particular object or service. Triggers for change reduce this
accumulated capital (Stigler and Becker 1977). This discussion is interesting from
environmental point of view as well, as routines and habits often offset sustainable patterns of
consumption.
Another interesting reason for habit stability comes from Leibenstein (1950), who suggested
taking into consideration the desire of people to consume certain goods in order to be
accepted by a social group. As a result, people can be trapped by the desire to adopt to the
most accepted or prestigious way of living (Leibenstein 1950). This mechanism implies that
if the prestigious way of living is unsustainable, it might be difficult to change it, as non-
members will always struggle for being accepted into the prestigious circle. The contrary is
also true: if it is possible to make prestigious life style more sustainable, then it will be easier
to solicit more followers into it.
The work of Sen brings us closer to the area of product-service systems in that Sen argued
that in order to evaluate a person’s well-being it is not sufficient to look at one’s possessions
and at the characteristics of these possessions, but at what functioning these possessions
provide (Sen 1985). Sen defines functioning as “an achievement of a person: what he or she
manages to do or to be. It reflects, as it were, a part of the ‘state’ of that person. It has to be
distinguished from the commodities, which are used to achieve those functionings. It has to
be distinguished also from the happiness generated by the functioning” (p.10). Later he
summarised the conceptualisation of the processes of how utility is realised (Sen 1997):

goods (e.g., a bike)àcharacteristics (e.g., transport)àfunctioning (e.g., moving)àutility
(e.g., pleasure) (p.10). This conceptualisation reminds very much the direction of the current
discussion in the environmental filed about product ownership versus buying functions of
products.
Examples of economic research provided here demonstrate clear links between
psychological, social and marketing research. There is a lot to learn from economic research
in terms of knowledge and methods, for example, for evaluating consumer willingness-to-pay
and willingness-to-accept. Incorporation of economic methods into customer acceptance and
satisfaction techniques could greatly contribute to this line of research.
21
In the next section, the explanation and construct of consumer behaviour will be built on
social and sociological studies.
3.3 Social studies domain
Social institutions, collective behaviour, and constraints of consumption environments enable
and affect consumer behaviour. Social studies focus on identifying and studying parameters
of external environments that influence consumption patterns. The major themes that are
studied by sociologists with regard to consumption behaviour are culture, social class,
personal influence, ethnic influence, family and household, and situational influences. Engel
(1995) shows the scope of individual and environmental influences and this distinction is
used in this study for the narrowing down and distinguishing between the two research areas:
sociology and psychology.
There is a substantial body of literature on consumer culture that analyses cultural differences
and looks into reasons for consumption in a cultural context (Featherstone 1991); (Cross
1993); (Lury 1998). Culture affects the entire structure of consumption. Sociology studies
why people buy products and find various answers to that simple question: products provide
function; products should comply with people preferences about the form in which product
function could be delivered; products become symbols of meaning in society (Solomon
1983). The importance of values is described by a theory of consumption values (Sheth,
Newman et al. 1991). The authors propose that consumer choice is influenced by functional
value, conditional value, social value, emotional value, and epistemic value. Changes of

values are usually explained from a life-cycle perspective (people grow older and their values
change) or from a generational perspective, suggesting that values of all generations are being
replaced by values of the “leading” generation.
Another line of sociological research on consumption analyses institutional influences on
consumption patterns. The main institutions in focus are family, religion, and the education
system. Consumption patterns to a large degree are also affected by social class, because
people who belong to the same class share similar values, lifestyles, and interests.
Sociologists study the role different goods play in distinguishing between different classes
and reinforcing identity within a certain class. Marketing segmentation is also often based on
marketing products to a specific social class by using special language, symbols, and appeal,
which triggers associations of a particular social class (see for example, (Williams 2002), or
(Henry 2002).
At the heart of the sociological view is the role played by goods in marking the distinction
between different social groups and classes and strengthening identity within the group.
Several sociologists investigated how people belonging to the same class use the construct of
taste to choose particular goods. For example, Pierre Bourdieu (1984) maintains that
consumption patterns develop based on taste that is specified by a certain cultural location
(habitus), and that people consume in order to distinguish themselves in the social arena. He
analysed how consumers classify goods in accordance with their taste and how the taste
indicates belonging to a certain social class (Bourdieu 1984).
Personal influence on the consumption patterns is studied by investigating the meanings that
consumers attach to the process of consumption, as part of the dimension of identify
construction. Consumers create themselves and are created by products, services, and
experiences. Four different types of meanings can be distinguished: utilitarian meaning
(perceived usefulness of a product in its ability to perform functional tasks), hedonic meaning
(specific feelings the products evoke or facilitate), sacred products that are very important to
people, and social meanings (products and services are seen as “media for interpersonal
22
communication” and for statements about people’s positions and statuses in social groups)
(Engel, Blackwell et al. 1995).

Status is considered as one of the constructs of conspicuous consumption and was studied
among many by Torsten Veblen, who pointed out that achieving a certain status in a social
group stimulates consumption of so-called “status goods” (Veblen 1902). Baudrillard notes
an interesting phenomena – on the one hand, marketing tells us to buy goods to be different,
on the other hand, we need to buy because everyone else has already bought it (Baudrillard
1998). There is an important status element in this: we want to be different, but not too
different from our social group.
The discussion on the formation of habits in section 3.1, can also be enriched by the
sociological studies on the topic. The major question raised was how habits are formed and
how they can be changed to stimulate habitualisation of more sustainable consumption
patterns. Sociology provides several insights about that. First of all, behavioural stability is
explained by social interdependence of consumption. Consumers are seen as being embedded
into, influenced and enabled by institutions (North 1981), (Hodgson 1988). Secondly,
consumers are also part of social groups, from which they can learn through interaction.
Again, status and the desire to be accepted and treated as part of the group is an important
need (see next section of Maslow’s hierarchy).
Social institutions, social groups, ideologies, and behaviours mutually reinforce each other
and shape the development of society. Economic instruments and technological innovation
alone will not provide desired change. Equally important are accepted norms and moral
principles that should go together with changing techno-economic framework and should
provide new grounds that would shape and determine more sustainable consumer choices.
As it will be shown later, sociologists can directly contribute to the development of eco-
efficient services and PSS with their knowledge of socio-technical frameworks and processes
that shape household and individual consumption.
The next section will provide some insights into consumer behaviour from a psychological
perspective.
3.4 Psychology domain
The major part of psychological research, besides social psychology, studies individual
processes. The domain of psychology research on consumer behaviour focuses on identifying
and studying personal human qualities that influence consumer behaviour. Another line of

research focuses on studying how various stimuli from the surrounding world affect
consumer behaviour.
Psychology is interested in learning how the urge of need is created, how different
stimulators influence the personal decision-making process, and how the satisfaction
sensation is created and confirmed. It seems that the focus is given to four major topics:
consumer resources (time, money), motivation, knowledge, attitudes, personality, values, and
lifestyle (Figure 3). Alongside these, three major processes are being studied by
psychologists: information processing, influencing attitudes and behaviour, and learning
processes (Engel, Blackwell et al. 1995).
Several schools of thoughts can be distinguished in psychology. Representatives of the
operant conditioning view of consumer learning investigate the role of rewards and
punishment in consumer decision-making process. Behaviourists are concerned with the role
surrounding conditions have on learning and the decision-making process. Behaviourists that
support a classical conditioning view study how consumers respond to brand names, scents,
23
colour, and other stimuli when making purchasing decisions based on knowledge they have
gained over time. On the other hand, cognitive learning theorists are concerned with studying
internal brain processes.
Psychological studies analyse the influence of the emotional state of consumers on
purchasing decision (see for example (Gardner 1985)). Psychological processes such as
attention, comprehension, memory, and cognitive and behavioural theories of learning,
persuasion, and behaviour modification constitute an integral part of marketing studies on
consumer behaviour and have been outlined in section 3.1. Needs for social appreciation and
status that were discussed before are well grounded in the psychological theory of Maslow
(1954), who postulates that human behaviour could be explained by the universal motivation
to satisfy a hierarchy of needs, and that self-realisation and social acceptance are as important
as the basic needs of food and shelter (Maslow 1954). Some needs are pre-potent and need to
be satisfied before higher order needs. He argues for a development of a society, which
would encourage higher order needs and in such way create a more liberal society that allows
its members to reach full potential. He argues that the system of needs must be protected

from powerful social forces, as higher order needs may totally disappear as a result of such
forces, such as unemployment for instance.
The lifestyle concept comprises a formal process of integration of social practices, through
which actors express their individual identity. Practices of our society are closely linked to an
economic and market system based on the notion of consumption. Therefore, in Bauman’s
opinion, “lifestyles boil down almost entirely to styles of consumption” (Bauman 1990).
According to him, people’s individual identity expressed in their lifestyles can be read almost
entirely from the package of goods and services people surround themselves with.
Recently a new field of “psychology of sustainability” or “new ecological psychology” was
launched to address theoretical and empirical studies that strive to better understand the
psychological processes underlying and triggering the development of environmental
awareness and concerns with sustainability issues (Jones 1996), (Bonnes and Bonaiuto 2001).
The emphasis of this field is on emotional bonds with our planet, application of
environmental issues to psychotherapy, even search for an environmentally acceptable
standard of mental health.
In the context of sustainable consumption and lifestyles, it is worth looking at what kind of
theories the psychology provides to aid in making the shift towards more sustainable
consumption patters. At the individual level, the psychology has to offer two theories that aim
at explaining cognitive processes behind individual decision making, connecting such
constructs as intentions, attitudes, subjective norms, and perceived behavioural control. These
theories provide some input to the discussion held above about social relevant actors and the
importance of belonging to a group.
The Theory of Reasoned Action (TRA) suggests that behaviour depends on the intention to
perform the behaviour – the most important determinant of a person’s behaviour is
behavioural intent. It is a linear correlation between the strength of a person’s intention, a
person’s willingness to try to act accordingly, and the likelihood that such behaviour is
actually being performed (Fishbein and Ajzen 1975). The theory defines two independent
determinants of intention. The first determinant is the personal factor named “attitude
towards the behaviour”, which refers to the individual beliefs that there will be outcomes and
evaluation of these outcomes. The second determinant is the so-called subjective norms,

which comprise an individual belief that relevant social actors think she should or should not
perform a behaviour and an individual’s intention to comply with this behaviour (Ajzen and
Fishbein 1980). To conclude, according to the theory, the behaviour is performed as a
24
rational decision by the individual, which is in a position to make a decision. It then depends
on the situation whether the attitude or the subjective norms takes over in shaping the
intention.
The Theory of Planned Behaviour is an extension of the Theory of Reasoned Action (Ajzen
1988), (Ajzen 1991). It includes the concept of perceived behavioural control, which is the
person’s belief about feasibility of using the provided opportunity. Individual abilities and
opportunities can affect control over the intended behaviour. The main idea is that the greater
the perceived behavioural control, the stronger a person’s intention is to try to perform the
relevant behaviour. However, the perceived behavioural control can also affect behaviour by
making it impossible to perform a certain behaviour despite one’s positive intentions towards
it.
The literature search on psychology, consumption and environment revealed many
psychological studies on the general environmental behaviour of people (see for example(von
Borgstede and Biel 2002), (Iwata 1996)), social and ethical norms that affect it (von
Borgstede, Dahlstrand et al. 1999), or on studying particular behavioural patterns and
behaviours, for example recycling behaviour (Guagnano, Stern et al. 1995), waste sorting
behaviour, or energy-saving behaviour (Poortinga, Steg et al. 2003). An important line of
psychological research is the formation of habits and the environmental consequences of
changing everyday behaviours.
Summing up the previous sections of chapter 3
Overall, the preceding sections showed that consumption patterns are first of all much more
flexible and prone to various influences than was suggested by traditional neoclassical theory.
Further, it was shown that current consumption behaviour is not a stable preference of
consumers but rather one choice of a great number of alternatives generated by the industrial
machine. Economists and psychologists tend to assume and subsequently study consumer
behaviour in isolation from other consumers, while sociologists perceive consumption as

being socially grounded. The importance of the social context is also recognised and widely
used by businesses in their marketing strategies.
The complexity of the decision-making process and a large number of influencing factors
suggest that changing consumer behaviour towards more sustainable consumption is a
challenging process, which requires coordination at individual and societal level. The
strength and range of forces that seduce and urge consumers into conspicuous consumption
might appear discouraging for sustainability pursuit. Luckily, there are also other
considerations that might help to divorce happiness from commodities. Some studies showed
that the most valuable things for people have low economic, but high emotional value, such
as family photos, memorable events, souvenirs, etc (Grafton 1993). Furthermore, it was also
shown that people attach sacred meanings to different products and objects, such as cars,
flags, stars, collections, etc. (Belk, Wallendorf et al. 1989).
The previous chapters provided a selective overview of concepts and factors of consumer
behaviour that are of interest for the following sections, in which an overview of the studies
about eco-efficient services and PSS and consumer attitudes towards these schemes will be
provided.
3.5 Environmental studies
Environmental studies on consumer acceptance build upon results of aforementioned
disciplines in their research on consumption. They apply existing knowledge to a particular
case of environmental problems stemming from consumption. The studies are concerned with
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what the environmental consequences of consumer purchasing decision could be, how they
can be influenced to reduce the associated impact with economic methods, or by changing
social and psychological contexts, technological solutions and political frameworks.
Beside individual-level research of environmental behaviour, problems with and solutions to
environmentally damaging consumption patterns are also studied at a more aggregate level.
This field is broadly called sustainable consumption and is an interdisciplinary area that
builds upon economic research, socio-technical and socio-psychological explanations, and
policy studies. Consumer behaviour models are being developed (Hansen and Schrader 1997)
and the environmental impacts of various scenarios of consumption have been modelled

(Jager 2000). Material- and energy-intensive consumption patterns have been analysed and
suggestions for addressing over-consumption have been provided (Røpke 1998), (Røpke
1999), (Brown and Cameron 2000).
An important part of the sustainability discourse focuses on the ways of involving various
stakeholders in the process towards more sustainable lifestyles, including consumers, see for
example Jenkinson (1997) (Jenkinson 1997). The role of raising environmental awareness of
consumers and the importance of streamlining environmental communication and
information provision has also been addressed by a vast number of studies (Zimmer, Stafford
et al. 1994), (Palm and Windahl 1998), (Björner, Gårn Hansen et al. 2002), (Palm and
Windahl 1998), (Niva, Heiskanen et al. 1997), (Imkamp 2000). Another important
development step towards sustainable consumption is the recent acceleration of work on
product-related environmental policies (Niva and Timonen 2001), including extensive work
on Integrated Product Policy, and especially the application of life-cycle thinking to product
policies (Dalhammar 2002).
One of the approaches for dealing with ever increasing consumption is the so-called
dematerialised consumption that is based on the utilisation value of products. Consumers can
extract the utilisation value during the product use and do not necessarily have to own the
material product. However, studies in the area of eco-efficient service and PSS conducted so
far, show that this utilitaristic idea is not that simple to implement in practice, as consumer
behaviour is a much more complex process.
One of the first studies that analysed acceptance of car sharing and apartment launderettes
was conducted by Schrader (1999) (Schrader 1999). Schrader applied the innovation
diffusion concept of Rogers to evaluate relative advantage of the services. He also created a
portrait of potential users of these services, looking particularly at the level of education,
gender influences, apartment size, and household size. As a result, the study provided insights
into potential factors that can stimulate acceptance of eco-efficient services. As crucial
success factors he identified: increase knowledge about the services; guarantee and
communicate the advantages, avoid or reduce disadvantages, and address the target group of
customers. Following the preliminary study, a comprehensive research into customer
acceptance of eco-efficient services was conducted, which resulted in comprehensive

empirical work and theoretical developments (Schrader 2001).
The research of Rens Meijkamp offers a comprehensive analysis of reasons for people to
become members of car-sharing organisations, provided potential user profile, and
investigated factors that stimulate decision-making process towards adoption of the new
service (Meijkamp 2000). He used the innovation diffusion framework of Rogers (1995) for
conceptualising and structuring the research and specifically for identifying the main steps of
car-sharing adoption. The purpose of the study was to test the feasibility of the eco-efficient
services with regards to acceptance by customers, employment by producers and