Critical Appraisal of Moosmayer (2012) on Ethical Consumer Behavior

This report presents a critical review of Dirk C. Moosmayer's 2012 article, "Negative Bias in Consumer Price Response to Ethical Information," published in Business Ethics: A European Review. The review meticulously appraises the research objectives, assessing how the article fits within existing literature on consumer ethics and price sensitivity. It examines the research methodology, including the experimental design, questionnaire approach, and sampling techniques employed. The report critically evaluates the research conclusions, particularly the concept of negativity bias, and its contribution to the academic understanding of consumer behavior. Furthermore, it addresses the limitations of the study and suggests avenues for future research, offering a comprehensive analysis of the article's strengths and weaknesses, and its implications for the field of business ethics and consumer behavior.

RESEARCH APPLICATION IN
GLOBAL BUSINESS

TABLE OF CONTENTS
A. Critical appraisal of research objectives and including an assessment of the way in
which this article fits into existing literature on this subject..................................................3
B. Critical appraisal of research methodology and methods used by the authors..................5
C. Critical evaluation of the research conclusion and applicability of conclusion to
academic understanding in this area of search.......................................................................7
D. Critically evaluating the limitation of study and suggestions for further work.................8
REFERENCES.........................................................................................................................10

INTRODUCTION
Customers are the key sources for success of any organization and it helps them in
enhancing their market share as well as profit margin. It is quite essential for firms nowadays to
follow appropriate business ethics to get positive response from consumers. There is direct and
increasing consumer willingness towards ethically produced goods. This study is based on the
article of Mossmayer (2012): Negative bias in consumer price response to ethical information:
Business Ethics. In this concern, the present study gives critical appraisal of the research
objectives as well as research methodology to asses that how this article fits into the existing
literature on this subject. Further, the overall discussion is based on the critical evaluation of the
given article as well as limitations of the study and appropriate on further work that could be
carried out.
A. Critical appraisal of research objectives and including an assessment of the way in which this
article fits into existing literature on this subject
Within current research and practices, the ethicality of company’s behaviour and various
related concepts are discussed in a deep manner. There is a significant question rises in the mind
set of several authors that whether customers are willing to reward and punish on the basis of
ethicality or not. Different authors have given distinct researches about the negative bias in
consumer price response to ethical information. Many authors have discussed their viewpoints
about increasing corporate ethics. They claim that such type of related activities might lead to
decrease the cost of companies and increase the turnover. The paper presented by Moosmayer
(2012) determines that there are various activities of company which targets social and
environmental aim. In this concern, most of the firms are attaining these goals under the label of
corporate ethical performance. However, consumers’ needs are changing day by day and they are
becoming more demanding with the changing time. According to Moosmayer (2012), most of
the customers respond towards the corporate ethical performance by selecting their particular
brand. However, it helps them in buying greater quantities of paying more. It increases the
turnover rate of companies. There are only fewer and limited studies and investigations on the
negativity bias in consumer willingness to pay.
Moosmayer (2012) in his study found the impact of CEP on consumers’ willingness to
pay. The present study gives appropriate reasoning as if there is any negativity bias in consumer
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response towards CEP, it has been identified that their willingness positively increases with
positive CEP whether it decreases with negative CEP or not.
This present articles fits into the existing literature of Lee, Mark and Cho (2015) which
stated that there are different purposes of customers for purchasing different products. On the
basis of their demand and selection of products, they can decide whether they are ready to pay
the existing amount or not (Cotton and Croucher, 2011). This article is associated with the
investigation of customer choices for purchasing organic coffee by applying approach of Theory
of planned behaviour (TPB). Authors stated that consumer choices are highly influenced by
different degrees of ethical concern and price sensitivity. It is the best way through which better
understanding can be gained about the consumer behaviour related to the growing demands of
this organic coffee or any other latest product. Findings for this study presented that ethical
concern and price sensitivity documented as significant moderating roles upon organic coffee
purchasing behaviour. However, people nowadays are highly attentive for the use of latest
services as well as products. This clearly fits with the present situation and the present study as
consumers are highly aware about the ethics related to the products.
Moosmayer (2012) says that price sensitivity is defined as a product related ethical
information that is explored in an experiment dealing with environment as well as social issues.
This study allows author to identify the customer’s individual bias and their willingness to pay as
per their expectations.
Carrigan and Attalla (2001) presented his literature findings on the basis of myth of
ethical consumers. He has given appropriate findings on the basis of research objective that do
ethical information matters in purchase behaviour? In his study, researcher argues about whether
or not consumers care about the ethical behaviour. This research gives a perception of consumers
as per their changing nature day by day. Author clearly fits with the present study and given a
just opposite perception by stating that “however, consumers are more sophisticated today, but
this does not necessarily translate into behaviour which favours ethical firms and punish
unethical firms” (Peng, 2013). By presenting this concept, it can be determined that this study
fits with the present article and defines that companies may take several measures in order to
segment the consumers based on their individual negativity bias. With the help of this,
companies are able to better understand that consumers might find an ethical product offering. It
may attract huge base of customers and help in enhancing the customer base by attracting them.
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Hiller (2010) found the response of consumers towards ethicality of production. At this
time, appropriate measures have been determined which stated that there are three different
perspectives that are needed to corporate the ethical performance. In this regard, first is
philanthropic action and it helps the firms in reducing their net profit. Second is an internal factor
which helps in reducing the increasing profit of companies by decreasing cost. Last and third
factor is market analysis which determines the major emphasis about the effects of market side
on consumer response. These are different perspectives which presented the appropriate
measures.
According to Moosmayer (2012), poor corporate ethicality might be punished from
consumers although punishment behaviour differs across culture. However, customer satisfaction
and increasing loyalty can be easily measured with the ethicality of company. In this concern, it
can be determined that companies are required to go through appropriate strategies through
which they can maintain the ethicality with their firm and produce high quality goods as well.
According to Trudel and Cotte (2009), ethics may add value to the products and it can be
determined as an ethical product feature. However, companies are using different ethics for
appropriate management and enhancing consumer base. According to Trudel and Cotte (2009)
consumers expect to demonstrate the related commitment from company’s side in order to fulfil
their purchase decisions. While going through consumer responses, it is being determined that if
company behaves ethically then consumers are willing to pay higher prices for the products.
Even though they might buy products from companies acting unethically, they would expect to
pay less in the latter case (Arsenault and Castells, 2008). At the time of analysing survey results,
appropriate findings have been made through different products such as Fair trade coffee. This is
a product where fairness has been proven to be so important from consumer’s viewpoint. It is
being determined that in this product, 10% shows their willingness to pay price premium of 27%
that fair trade coffee attracted.
Carrigan and Attalla (2001) also determined the negativity bias with respect to consumer
shopping and their purchase experience. Researcher observed that negativity in human behaviour
shows that humans tend to overvalue the negative information and relative to position
information when going through the appropriate combination both into one judgement.
Moosmayer (2012) suggested various new approaches for measuring the negativity bias.
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B. Critical appraisal of research methodology and methods used by the authors
Research methodology is the most vital section of entire research. It is concerned with the
application of research tools and techniques which help in achieving the research aim and
objectives. These tools also state the manner in which primary and secondary data is collected
for the research. Application of appropriate tools and techniques is important because it tells
whether outcomes are attainable or not.
Approach
For this research study, experimental research design has been adopted. This design is
very effective in terms of putting control on variables. It also identifies the cause and effect
relations effectively. Design has the potential to produce better results in research. The control
under this design is higher as compared to the other research types of methods. Due to control set
up from the researcher and strict conditions, the achievement of better results is expected.
However, critically, it can be said that this design fails to do any experiment. This is because;
researcher cannot bring manipulation in the independent variables due to practical or ethical
reasons. It also controls irrelevant variables as sometimes, this leads to emergence of artificial
situations. The design is also subjected to manual error and this may impact the efficiency and
quality of research. Personal biasness, unreliable sample and artificial results are also some of the
drawbacks of experimental design. It is possible that results of experimental design may not be
generalized into real life scenarios. There are possibilities where experiments cannot be utilized
due to ethical and practical considerations.
Questionnaire approach
Two versions of questionnaire have been used in the research. The first version consists
of a positive social Ethical Information related to the production of athletic shoes and negative
environmental Ethical Information about the production of mobile phones as experimental
manipulations. Asking information twice and for two different product scenarios can increase the
sensitivity of respondents towards investigated issue. However, this approach might also
overestimate responses in WTP (Willingness to Purchase) and PE (Price Expectation). Keeping
two questionnaires in the research process can create different types of confusion and chaos for
the researcher. It can hamper the quality of study as the results of two can be intermixed. Further,
the questionnaire is a time consuming process because it will take a long period of time to
analyse the collected information.
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Sampling
It is an activity which makes the data collection work easier and simpler. It is performed
to identify the representative sample of study. For the purpose of sampling, researcher has
distributed 379 questionnaires in a marketing lecture to undergraduates at a German state
university. Out of them, a total of 315 responses were used for the purpose of evaluation. 12
were incomplete and 33 had respondents who indicated no buying intention for at least one of the
two experimental products. These were excluded because the objective of research was to
explore the price response of potential buyers. The sampling process was very effective and was
relevant with the study. Filtration was performed in an unbiased manner without any constraints.
It also contributed well towards the achievement of research goals and objectives. However, it
takes time to perform the filtration process because the results of questionnaire are to be
compiled in an appropriate manner.
Descriptive statistics
It is an innovative tool for the researchers. In this study, descriptive statistics have been
used for the purpose of evaluation. Confidentiality is the primary weakness of descriptive
research. Often the subjects are not truthful as there is a need to tell the researcher what they are
thinking. The participants may also refuse to answer the questions which they think are
irrelevant. It also presents the possibility for error and subjectivity. This can hamper the quality
of study. The research may contain some errors as it may not match with the objectives. Further,
overcoming the biasness is another difficulty level for researchers and this has to be taken care
of.
C. Critical evaluation of the research conclusion and applicability of conclusion to academic
understanding in this area of search
From this whole study, consumer response to ethical information has been analysed. It
has given an appropriate solution towards the the willingness to pay of consumers (WTP). From
this whole study, it has been concluded that consumers are highly willing to reward the corporate
ethical performance. However, there are certain areas by which researcher is able to explore the
level of biasness among customer’s perception. In this concern, it can be determined that
consumers are having negative bias in their response and it has been explained by CDT. This is
totally based on the assumption of people. Carrigan and Attalla (2001) in his study concluded
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that customers are price sensitive and they are highly attentive towards their purchasing
decisions.
From this whole study, roots of negativity bias have been presented that customers are
willing to pay for the product that breaches their ethical standards.. In this concern, it has been
found that particularly in the case of athletic shoes; rejection contributes to the occurrence of
negativity biasness. However, the total figure and hypothesis presented in the study shows that
there still remains a substantial bias among those who do not boycott the products being
produced unethically. Majority of findings presented that customer’s decisions might change
with respect to punish and reward them. They can take such decisions on the basis of ethicality
of firms (Arsenault and Castells, 2008). Further, it has been concluded that negativity bias is
based on the economic argument that reward good corporate practices. However, it is very
expensive and requires huge efforts to punish such behaviours of company. In addition to this, it
has been articulated that consumers are used to quoting prices or the prices which have been
mentioned in the product. In this concern, they usually decide whether or not to buy product at
an offered price. It creates a certain threat to measure the accuracy and it is not plausible to come
out of it.
With this respect, the whole study gives appropriate results and significance of consumer
perception towards the ethical behaviour and ethicality of firms. Here, negativity biasness has
been found in the consumer ethics related to the price response. In this concern, it has been
defined that consumers overvalue the financial losses as compared with gains. However, at the
time of evaluating organizations and their behaviour, the negativity bias has proved to be valid.
This study also investigates the influences of positive as well as negative information on
consumer attitude towards companies. In this regard, it can be stated that positive and negative
information on consumers ‘attitudes towards companies has been shown that unethical actions
performed by associations are more likely to negatively influence the consumers’ attitudes. In
this aspect, these ethical actions require to be taken and it may influence the positive perception
of people. However, in this context, it can be determined that some of the major sources due to
which consumer’s perception might lead to change is all related to the unethical practices of
firms. Further, from the hypothesis and findings presented in the study, it indicates that
customers are willing to reward ethical practices of company. However, they must have
appropriate information regarding the ethics of firms. Moreover, they are willing to punish the
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ethical performance with negative ethical information (Hill, Cronk and Wickramasekera, 2013).
It is the major source due to which companies might lead to decrease their market share as well
as their costs. In this respect, firms are required to adopt various effective strategies through
which they can easily go through higher consumer base and attract them towards their store. It
helps in enhancing the cost as well as market share of company. Further, it can be determined
that following ethicality is the major and prime responsibility of company within global business
era. Consumers are highly price sensitive and they go through ethical information of products in
order to deal with the social issues in sportswear and environmental issues in consumer
electronics. Moreover, it has been concluded that corporate ethical practices highly affect the
consumer’s willingness to pay.
D. Critically evaluating the limitation of study and suggestions for further work
The study which is conducted on the topic of negativity bias in consumer price response
to ethical information possesses some limitations. Among all, one of the biggest limitations that
have been explored from this study is getting responses from the entire selected sample for study.
In this context, it is assessed that among 379 respondents, only 360 respondents have given
answer to the asked question. The given type of thing will lead to cause a significant impact upon
the results of respective study. This is because; a small variation in the sample of study will lead
to cause major impact upon the result of study. However, it has been evaluated that the
researcher of given study has made significant efforts with regard to overcome the impact of
given limitation of study. In this context, it has made efforts with regard to draw an appropriate
conclusion from the responses as being given by the respondents of study.
In addition to this, for the researcher, it has become difficult to collect the actual
responses from the sample of given study. In this context, it is identified that some respondents
behave immorally while making their purchasing decision. . But, while filling questions with
regard to the given study, these people have acted morally. The given thing has impacted the
results of specific study. This is because; some different types of results would have been
obtained by the scholar if respondents have given their responses in an effectual way.
The researcher of present study has an objective with regard to assess the negative and
positive responses of sample at equal intensity. However, in the actual practices, it has become
difficult for the buyers with regard to comply with the given approach. This is because, here, in
the present study, majority of buyers have given negative response with regard to the asked
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question. Thus, in the present study, scholar has not maintained the equal intensity of both
negative and positive response.
Besides this, in the given study, researcher has applied PRQ measure with an aim to
assess the responses of its sample. But, with an aim to ensure the validity of PRQ measure,
scholars have the opportunity to apply given method in the pretested situation which includes
manipulation checks. Through this way, comparison can be carried out between actual and
pretested results. However, it has been critically evaluated that the effectiveness of PRQ measure
will be assessed when comparison is being carried out between two or three results. Furthermore,
the scholars also have the opportunity to apply given measure to diverse consumer characteristics
and attitudes. By complying with the given type of activity, a different result will be found by the
researcher of given study. Thus, aim and objectives of the given study will also be met
effectively.
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REFERENCES
Arsenault, A. and Castells, M., 2008. Switching Power: Rupert Murdoch and the Global
Business of Media Politics A Sociological Analysis. International Sociology. 23(4). pp.488-
513.
Carrigan, M. and Attalla, A., 2001.The myth of the ethical consumer – do ethics matter in
purchase behaviour. Journal of Consumer Marketing. 18(7). pp.560 - 578
Cotton, E. and Croucher, R., 2011. Global unions, global business: global union federations
and international business. Libri Publishing.
Hill, C.W., Cronk, T. and Wickramasekera, R., 2013. Global business today. McGraw-Hill
Education (Australia).
Hiller, J. A., 2010.Challenges in researching consumer ethics: a methodological
experiment.Qualitative Market Research: An International Journal. 13(3). pp.236 –
252.
Lee H. K., Mark A. and Cho.M., 2015. Consumer motives for purchasing organic coffee:
The moderating effects of ethical concern and price sensitivity. International Journal of
Contemporary Hospitality Management. 27(6). pp.1157 – 1180
Moosmayer, D.C., 2012. Negativity bias in consumer price response to ethical information.
Business Ethics: a European Review. 21(2). pp.198-208.
Peng, M., 2013. Global business. Cengage learning.
Trudel, R. and Cotte, J., 2009. Does it pay to be good.MIT Sloan Management Review.
50(2).pp.61-6
Vogel, D., 2008. Private global business regulation. Annu. Rev. Polit. Sci.,11, pp.261-282.
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