Well-being Marketing: An Ethical Business

Philosophy for Consumer Goods FirmsM. Joseph Sirgy

Dong-Jin Lee

ABSTRACT. In this article we build on the program of

research in well-being marketing by further conceptual-

izing and refining the conceptual domain of the concept of

consumer well-being (CWB). We then argue that well-

being marketing is a business philosophy grounded in

business ethics. We show how this philosophy is an ethical

extension of relationship marketing (stakeholder theory in

business ethics) and is superior to transactional marketing

(a business philosophy grounded in the principles of

consumer sovereignty). Additionally, we argue that well-

being marketing is based on duty ethics concepts, specif-

ically the duty of beneficence and non-maleficence.

Subsequently, we show how the well-being concept

guides marketing decisions for consumer goods firms.

KEY WORDS: well-being marketing, marketing and

quality of life, societal marketing, marketing ethics, social

responsibility in marketing

Introduction

Much of the literature in corporate social responsi-

bility has focused on six aspects of citizenship

behavior: (1) corporate cause promotions, (2) cause-

related marketing, (3) corporate social marketing, (4)

corporate social philanthropy, (5) community vol-

unteering, and (6) socially responsible business

practices (Kotler and Lee, 2005). Corporate cause

promotions involve corporate activities to increase

awareness and concern for social causes (e.g., The

Body Shop promoting a ban on the use of animals to

test cosmetics). Cause-related marketing involves

corporate efforts designed to induce consumers to

make contributions to causes based on product sales

(e.g., Comcast donates $4.95 of installation fees for

its high-speed Internet service to Ronald McDonald

House Charities). Corporate social marketing

involves corporate campaigns that support behavior

change intended to improve public health, safety,

the environment, or community well-being (e.g.,

Home Depot and a utility promoting water con-

servation tips). Corporate philanthropy involves a

firm making a direct contribution to a charity or

cause in the form of cash grants, donations, and/or

linked services (e.g., WaMu awards cash grants to

fund professional development of teachers). Com-

munity volunteering refers to incentives a firm

provides its employees to volunteer their time to

support local community organizations and causes

(e.g., employees of a high-tech company tutoring

youth in middle schools on computer skills). Socially

responsible business practices involve business prac-

tices designed to support social causes, improve

community well-being, and protect the environ-

ment (e.g., Starbucks working with Conservation

International to support farmers to minimize nega-

tive impact on their local environment).

Well-being marketing, the focus of this essay, can

be viewed as a contribution to the literature

involving the sixth aspect of corporate social

responsibility–socially responsible business practices.

In that context, much has been written on socially

responsible marketing practices in the marketing

ethics literature. Much of the literature in marketing

ethics can be grouped in two major camps:

descriptive (positive) versus prescriptive (normative)

models of marketing practice.

Descriptive or positive models of marketing ethics

focus on explaining actual behaviors in an ethical

situation (e.g., Hunt and Vitell 1986, 2006; Ferrell

M. Joseph Sirgy is Professor of Marketing and Virginia Real

Estate Research Fellow at Virginia Tech (USA). Dong-Jin

Lee is Professor of Marketing at Yonsei University (Korea).

Journal of Business Ethics (2008) 77:377–403 � Springer 2007DOI 10.1007/s10551-007-9363-y

and Grasham, 1986; Trevino, 1986; Wortuba,

1990). The focus of these models is to describe how

marketers behave in ethical dilemmas. These models

attempt to capture the ethical decision-making

process and all the organizational, social, cultural,

situational, and personality related factors that

influence the various components of the decision-

making process.

Normative marketing ethics, on the other hand, is

designed to advocate and establish guidelines for

ethical marketing practice rather than attempt to

report what practitioners say or do (Smith, 2001).

Much has been written about prescriptive or nor-

mative models of marketing. However, the vast

majority of what has been done in this camp has

focused on narrow topics such as design and man-

ufacture of poor quality products, failure to ensure

product safety, misleading advertising, among others

(e.g., Cespedes, 1993; Mattsson and Rendtorff,

2006) and the prescriptive standards that marketers

should adhere ‘‘minimize the damage.’’ With respect

to general or overarching models of normative

marketing ethics, Dunfee et al. (1999) found only

four models that are distinctively normative. These

are: Laczniak (1983), Williams and Murphy (1990),

Reidenbach and Robin (1990), and Smith (1995).

More recently, Laczniak and Murphy (2006)

developed seven normative perspectives for ethically

and socially responsible marketing.

Although much of the work in normative mar-

keting ethics is indeed commendable, the emphasis so

far has been on the non-maleficence aspect of mar-

keting practice. That is, the focus has been on devel-

oping a set of guidelines to ensure that marketers�decisions are not likely to create damage to the firm�sstakeholders—customers, employees, distributors,

suppliers, the environment, the local community, etc.

The work presented in this article focuses on

normative marketing ethics by integrating two

aspects of marketing ethics: marketing beneficence

and non-maleficence. Thus, what we attempt to do

here is to develop a more comprehensive perspective

of normative ethics. We call this perspective well-

being marketing.

The concept of well-being marketing

Marketing has the potential to enhance consumer

well-being in significant ways by providing con-

sumers with goods and services that not only can

enhance their overall quality of life but also do it

safely—to the consumers themselves, to other pub-

lics, and the environment. Reflecting this need,

Kotler et al. (2002) emphasized marketing�s impact

on the quality of life by stating that marketers should

determine the needs, wants, and interests of target

consumers and deliver satisfaction more effectively

and efficiently than competitors in a way that pre-

serves or enhances consumer well-being. The firm

should deliver superior value to customers in a way

that maintains or improves the customer�s and the

society�s well-being. The traditional marketing

concept overlooks possible conflicts between con-

sumer short-run wants and consumer long-run

welfare (Armstrong and Kotler 2002). Our concept

of well-being marketing is grounded in societal mar-

keting as introduced by Kotler (1979, 1986, 1987).

Specifically, well-being marketing is a business

philosophy that guides managers to develop and

implement marketing strategies that focuses on

enhancing consumer well-being through the con-

sumer/product life cycle (acquisition, preparation,

consumption, possession, maintenance, and disposal

of consumer goods) and to do so safely in relation to

consumers, other publics, and the environment. We

define consumer well-being (CWB) as a desired state of

objective and subjective well-being involved in the

various stages of the consumer/product life cycle in

relation to consumer goods. By providing need

satisfaction over the entire consumer/product life

cycle, well-being marketing guides the firm to

establish long-term relationships with target con-

sumers. Thus, the long-term objective of well-being

marketing is the enhancement of CWB. In addition

to enhancing CWB, well-being marketing pre-

scribes that enhancement of CWB should not come

at the expense of adverse conditions experienced by

other organizational stakeholders (e.g., employees,

the local community, the general public, and the

environment).

Although much has been discussed about well-

being marketing and its implications to CWB (e.g.,

Sirgy 2001), we still have a limited understanding

regarding its ethical basis, strategic implications, and

implementation (4 Ps). More specifically, we ask:

how different well-being marketing is from other

philosophic concepts of marketing such as the

marketing concept and relationship marketing in

378 M. Joseph Sirgy and Dong-Jin Lee

guiding managerial decision-making? We answer the

question by conceptualizing the domain of the well-

being marketing construct and identifying its

dimensions in terms of specific marketing mix

decisions directly related to consumers� marketplace

experiences: product acquisition, preparation, con-

sumption, possession, maintenance, and disposal.

Understanding well-being marketing should help

marketers use this philosophic concept that is con-

sistent with both organizational and societal goals.

Consumer well-being (CWB)

In this section, we review various circumscribed

attempts to conceptualize CWB and then present in

more detail our own conceptualization of CWB.

However, before we describe the various concep-

tualizations of CWB, the reader should be aware of

the distinction between the concepts of consumer

satisfaction and CWB.

We view the American Consumer Satisfaction

Index (ACSI) as highly representative of consumer

satisfaction conceptualizations and measures. Much

of consumer satisfaction research is guided by the

theoretical notion that consumer satisfaction plays a

major role in customer loyalty, repeat purchase, and

positive word-of-mouth communications (e.g.,

Fornell, 1992; Fornell et al., 1996; Oliver, 1997;

Szymanski and Henard, 2001). The goal is to

enhance customer satisfaction for the purpose of

ensuring higher levels of repeat patronage, ergo sales,

market share, and profit.

The ACSI measure is based on the notion that

customer satisfaction is determined mostly by per-

ceived value, perceived quality, and customer

expectations. It is based on a survey of actual users of

major brands in various product categories. The

survey includes questions capturing customer

expectations, perceived quality, value perceptions,

satisfaction, customer complaints, and customer

loyalty (Fornell, 1992; Fornell et al., 1996). The

exact measurement constructs are shown in Table I.

In contrast, the concept of CWB is inherently

guided by a different meta-level concept, namely the

link between consumer satisfaction and quality of life.

In other words, the conceptualizations of CWB we

review in this section are grounded on the implicit or

explicit assumption that high levels of CWB reflect

high levels of consumer�s quality of life—higher

levels of life satisfaction, overall happiness with life,

absence of ill being, societal welfare, etc.

The acquisition model of CWB

The acquisition model posits that CWB is deter-

mined by satisfaction with acquisition of consumer

goods. For example, Meadow (1983) generated a

measure of CWB based on the consumer�s experience

with retail institutions in purchasing food, housing,

household operations, household furnishings, cloth-

ing and accessories, personal care, medical care, rec-

reation, transportation, and education. To reiterate,

this approach focused on measuring overall acquisition

or shopping satisfaction in one�s local area. Based on

the theoretical notion of satisfaction hierarchy (e.g.,

Andrews and Withey, 1976; Aiello et al., 1977), the

author used a sample of 249 elderly consumers to

demonstrate that life satisfaction can be predicted

TABLE I

The measurement constructs involved in the ACSI

1. Expectation

• Customer expectation about overall quality

• Customer expectation about reliability

• Customer expectation about customization

2. Performance

• Perception of overall quality

• Perception of reliability

• Perception of customization

3. Value

• Price given quality

• Quality given price

4. Consumer satisfaction

• Overall satisfaction

• Satisfaction against expectation

• Satisfaction against the ideal

5. Customer loyalty

• Repurchase likelihood

• Price tolerance (increase) given repurchase

• Price tolerance (decrease) to induce repurchase

6. Customer complaints

Source: Fornell, Claes, Michael D. Johnson, Eugene W.

Anderson, Jaesung Cha, Barbara Everitt Bryant (1996),

‘‘The American Customer Satisfaction Index: Nature,

Purpose, and Findings,’’ Journal of Marketing, 60

(October), 7–18.

An Ethical Business Philosophy for Consumer Goods Firms 379

significantly from satisfaction with a host of retail

establishments in the community.

The possession model of CWB

Others have focused on material possessions to

capture CWB. For example, Nakano et al. (1995)

examined consumers� overall satisfaction with their

material possessions and standard of living. As part

of a larger investigation of consumer socialization,

Nakano et al (1995) used a two-question measure

to capture CWB, namely: ‘‘How do you feel

about your standard of living—the things you have

like housing, car, furniture, recreation, and the

like?’’ and ‘‘How do you feel about the extent to

which your physical needs are met?’’ CWB is

conceptualized as the composite of these items. In

sum, CWB is construed in terms of satisfaction

with one�s ownership of consumer durables and

other material possessions. Sirgy et al. (1998)

found that satisfaction with material possessions

influences overall life satisfaction especially for

those consumers who are highly involved with

material possessions.

The two-factor model of CWB

Day (1978, 1987) and Leelakulthanit et al. (1991)

conceptualized CWB as consumer satisfaction with

acquisition and possession of consumer goods

(durable goods). Acquisition satisfaction refers to con-

sumer satisfaction with experiences related to the

purchase of consumer goods in traditional retail

establishments in one�s community. Examples

include the assortment, quality, and price of goods

available in local stores, the attractiveness of the

stores, the courtesy and helpfulness of store person-

nel, and after-purchase service provided by local

stores (e.g., warranty policies). In contrast, the pos-

session satisfaction focuses on subjective experiences

related to material possessions (e.g., house/apart-

ment, furniture, car/truck, clothing/accessories,

savings, etc.) and overall satisfaction with those

possessions. Leelakulthanit et al. (1991) found a

significant relationship between acquisition/posses-

sion satisfaction and life satisfaction, especially for

older and low-income people.

The consumer/product-life-cycle model of CWB

Lee et al. (2002) argued that the dimensions of the

consumer life domain are most appropriately con-

ceptualized in terms of five stages of the consumer/

product life cycle: acquisition, possession, con-

sumption, maintenance, and disposal (cf. Wilkie and

Moore, 1999). They cited research evidence sug-

gesting that consumers experience satisfaction and

dissatisfaction across the entire consumer/product

life cycle, and that consumer satisfaction with all the

stages of the life cycle spills over onto other life

domains affecting overall life satisfaction (e.g.,

Andrews and Withey, 1976; Campbell et al., 1976;

Day, 1987; Lee and Sirgy, 1995; Meadow, 1983,

1988; Nakano et al., 1995). Specifically, acquisition

satisfaction was defined as consumer satisfaction with

respect to shopping and other activities involved in

the purchase of consumer goods. Specifically, the

authors identified seven factors of the acquisition

experience that play a significant role in consumer

satisfaction with shopping experiences, such as sat-

isfaction with the quality, prices, hours, and services

of stores in the local area. Possession satisfaction was

defined as satisfaction that results from the owner-

ship of major classes of consumer goods such as

house or condominium, consumer electronics, and

private transportation. Consumption satisfaction was

defined as consumer satisfaction resulting from the

use of consumer goods. It is closely related to but

distinct from possession satisfaction, the difference

being that possession satisfaction focuses on positive

affect that flows from ownership per se, whereas

consumption satisfaction focuses on satisfaction that

flows from the actual use of the product. Maintenance

satisfaction was defined as satisfaction consumers

experience when they seek to have a durable

product repaired or serviced. The authors concep-

tualized maintenance satisfaction as having two

major sub-dimensions—satisfaction with mainte-

nance and repairs provided by service vendors in the

community (i.e., repair services), and satisfaction with

services that facilitate maintenance and repair by the

owners themselves (i.e., do-it-yourself support services)

such as satisfaction with price of replacement parts

and tools and availability of necessary parts and tools

in the local area. Disposal satisfaction refers to the

degree of satisfaction consumers feel with the

disposability of durable goods (e.g., satisfaction with

380 M. Joseph Sirgy and Dong-Jin Lee

the convenience and ease of disposal and the envi-

ronmental friendliness of the product at the time of

disposal).

There have been several empirical studies devel-

oping and testing the validity of CWB measures in

relation to several product categories such as per-

sonal transportation and housing. With respect to

personal transportation, Sirgy et al. (2006) found that

consumer�s perceived quality-of-life impact of cur-

rent vehicles is largely determined by satisfaction

with purchase, preparation for personal use, own-

ership, use, and maintenance (i.e., various experi-

ences across the consumer/product-life-cycle with a

particular product). In relation to housing, Grzesko-

wiak et al. (2006) developed and tested the validity

of a CWB measure based on the consumer/product

life cycle model. The CWB measure captured home

resident�s cumulative positive and negative affect

associated with house purchase, use, maintenance,

ownership, and selling.

Our definition of CWB

We define CWB as a state of objective and sub-

jective well-being involved in the various stages of

the consumer/product life cycle in relation to a

particular consumer good. The consumer/product

life cycle deals with various types of marketplace

experiences a consumer has with a product from

purchasing the product to its disposal. Specifically,

the stages of the consumer/product life cycle are:

product acquisition (purchase), preparation (assem-

bly), consumption (use), ownership (possession),

maintenance (repair), and disposal (selling, trade-in,

or junking of the product). See Table II.

The distinction between objective and subjective

well-being is important. Subjective well-being refers

to feelings of satisfaction/dissatisfaction the consumer

experiences in a manner that contributes to his or her

quality of life. What we are talking about here is

consumer-life satisfaction or the link between con-

sumer satisfaction and life satisfaction (overall hap-

piness in life, overall sense of subjective well-being,

or the perception of life quality). In contrast, objective

well-being refers to an assessment by experts (e.g.,

engineers, scientists, consumer economists, safety

experts) regarding consumers� costs and benefits as

well as safety assessments (safety to consumers, others

that come in contact with the product, and the

environment). Specifically, in relation to product

acquisition, subjective well-being translates into con-

sumer satisfaction with the shopping for and the

purchase of the product in a manner contributing to

the consumer�s life satisfaction. In contrast, objective

well-being in relation to product acquisition means

experts� assessment that the product is high quality

and the price is fair and affordable; also that the

purchase experience is safe to the purchasers, the sales

people and facilities, the general public, and the

environment.

With respect to product preparation, subjective

well-being reflects consumer satisfaction with the

preparation or assembly of the product in a manner

contributing to the consumer�s quality of life (life

satisfaction). Objective well-being in relation to

product preparation means that the preparation or

assembly of the product is assessed by experts to be

easy (or convenient) and safe to the people who elect

to prepare or assemble the product, the assembly

facility, the general public, and the environment.

In regards to product consumption, the subjective

well-being dimension captures consumer satisfaction

with the use of the product in a manner contributing

to consumer�s quality of life. In comparison, the

objective well-being dimension captures experts�assessment that the consumption of the product is

significantly beneficial to those who use the product,

and that the product is safe to consumers, the general

public, and the environment.

Focusing on product ownership, subjective well-

being means consumer satisfaction with the owner-

ship of the product in a manner contributing to the

consumer�s quality of life. In contrast, the objective

dimension captures experts� assessment that the

ownership of the product has appreciable value and

is safe to the owners, the general public, and the

environment.

Focusing on product maintenance, subjective well-

being reflects consumer satisfaction with product

maintenance and repair in a manner contributing to

the consumer�s quality of life. Objective well-being

associated with product maintenance reflects experts�assessment that the maintenance of the product is

easy (or convenient), not costly (affordable), and safe

to the people who are doing the maintenance, the

maintenance or repair facility, the general public,

and the environment.

An Ethical Business Philosophy for Consumer Goods Firms 381

Finally, in relation to product disposal, subjective

well-being signifies consumer satisfaction with the

disposal (junking, trading-in, or re-selling) of the

product in a manner contributing to the consumer�squality of life. On the other hand, objective well-

being means experts� assessment that the disposal of

the product is easy (or convenient), not costly (or

affordable), and safe to the person doing the disposal,

the disposal facility, the general public, and the

environment.

We will discuss those aspects of subjective and

objective well-being of CWB in greater detail in the

remainder portions of the article. Therefore, the

reader should expect greater clarity of the CWB

concept and how it guides well-being marketing

decisions as we move along into the article.

Comparing the ethics of three marketing

concepts: transactional, relationship, and

well-being marketing

Throughout the remainder part of the article, we

will describe well-being marketing in terms of the

TABLE II

Our conceptualization of consumer well-being

Subjective well-being (consumer satisfaction) Objective well-being (experts assessment of

consumers� and societal costs and benefits)

Product acquisition Consumer satisfaction with the shopping for

and the purchase of the product in a manner

contributing to the consumer�s quality of life

Experts� assessment that

• the product is high quality and the price is fair

and affordable, and

• the purchase experience is safe to the pur-

chasers, the sales person/facility, the general

public, and the environment

Product preparation Consumer satisfaction with the preparation

or assembly of the product for use in a

manner contributing to the consumer�squality of life

Experts� assessment that the product is

• easy (or convenient) and

• safe to prepare or assemble to the preparer, the

general public, and the environment

Product consumption Consumer satisfaction with the use of the

product in a manner contributing to the

consumer�s quality of life

Experts� assessment that the consumption of the

product is

• significantly beneficial to consumers and

• safe to consumers, the general public, and the

environment

Product ownership Consumer satisfaction with the ownership of

the product in a manner contributing to the

consumer�s quality of life

Experts� assessment that the ownership of the

product

• has appreciable value and

• is safe to the owners, the general public, and

the environment

Product maintenance Consumer satisfaction with product mainte-

nance and repair in a manner contributing to

the consumer�s quality of life

Experts� assessment that the maintenance of the

product is

• easy (or convenient),

• not costly (affordable), and

• safe to the repair person/facility, the general

public, and the environment

Product disposal Consumer satisfaction with product disposal

(or trade-in or re-selling) in a manner con-

tributing to the consumer�s quality of life

Experts� assessment that the disposal of the

product is

• easy (or convenient),

• not costly (affordable), and

• safe to the disposal person/facility, the general

public, and the environment

382 M. Joseph Sirgy and Dong-Jin Lee

traditional elements of the marketing mix (i.e., the

four Ps). In doing so, we contrast well-being mar-

keting with two other forms of marketing, namely

transactional marketing and relationship marketing.

We do so to show how well-being marketing can be

distinguished from traditional marketing (as captured

in transactional and relationship marketing). We

argue that well-being marketing is based on a busi-

ness ethics philosophy that is more adapted to con-

temporary society. To make this argument, we do

the following in this section. We argue that the

ethics supporting transaction marketing is based on the

concept of consumer sovereignty of business ethics. We

then argue that consumer sovereignty falls short in

several ways, and thereforeit is not well-suited to

contemporary society. Then we focus on the rela-

tionship marketing and argue that this approach to

marketing is grounded in stakeholder theory of busi-

ness ethics. We then argue that stakeholder theory

serves society better than transaction marketing, but

nevertheless it also falls short. Finally, we define well-

being marketing and show how this approach to

marketing is grounded on business ethics concepts of

duty of beneficence and non-maleficence. Our goal is to

convince the reader that well-being marketing is

most ethical in serving the business community,

consumers at large, and society overall.

The ethics of transaction marketing

Transaction marketing is marketing guided by neo-

classical economic theory. It focuses on profit max-

imizing by recruiting more and more customers to

purchase the firm�s product. Sales reflect the notion

that the firm serves society by marketing a product

that consumers need or want. A firm meeting market

demand for consumer goods is a firm that serves

society. Furthermore, the more sales, the more the

firm prospers financially. Financial prosperity trans-

lates into more jobs and economic security for the

firm�s employees. The firm�s financial prosperity also

benefits society through taxation—the more the firm

sells, the more it is taxed, the more the tax revenues

are used by government to provide public services

that benefit society at large. Similarly, the more

people are employed, the more tax revenues are

generated through personal income taxation, which

in turn serves society at large.

Competition among firms to generate higher and

higher levels of sales is the motivating force that

drives firms to develop higher quality products and

selling them at low prices. Thus, the drive to sell

serves society by motivating the business enterprise

to innovate and develop new and better quality

products, and market those products at lower prices

than the competition. When consumers purchase

high-quality products at low prices, they reward

firms that develop better products at lower prices.

Thus, firms that are able to meet consumers� needs

and wants for better products at lower prices sig-

nificantly benefit (financially speaking), and those

that cannot compete fall by the way side (e.g.,

Friedman, 1962, 1970; Scherer, 1971; Smith, 1776).

Consumer sovereignty theory posits that society

benefits when consumers vote with their pocket-

books (e.g., Nelson, 1970; Smith, 1995; Smith and

Quelch, 1993, pp. 30–34; Stigler, 1971; Thorelli and

Thorelli, 1977). To do so, consumers have to be

informed about the product�s quality and price.

Consumer behavior is based on the assumption that

consumers shop around and buy the highest quality

product at the lowest price. Consumer sovereignty

reflects the idea that consumers can serve society by

engaging in ‘‘rational decision-making’’ and exer-

cising their economic votes wisely. By selecting

products that provide best value, consumers reward

manufacturers that best serve consumers. Much of

today�s business laws (e.g., anti-trust laws, con-

sumer protection laws) are designed to ensure that

consumers are well informed about their market

choices. If they are well informed, they serve

society by rewarding efficient firms that deliver ‘‘a

better mousetrap at a lower price’’ and weed out

inefficient firms that cannot deliver on the same

terms.

Nevertheless, market inefficiencies do occur in

the form of sales that do not reflect market demand

and the fulfillment of consumer wants. For example,

Galbraith (1956, 1973, 1977, and 1985) has argued

that many firms survive and prosper not because they

market higher quality products at lower prices. They

survive and prosper because they have countervail-

ing power. They overwhelm their competitors

through massive advertising and marketing com-

munications campaigns. They also may control the

channels of distribution, thus restricting consumer

access to competitors. Furthermore, it has been

An Ethical Business Philosophy for Consumer Goods Firms 383

argued that consumer sovereignty is increasingly

becoming less relevant in the age of high tech, and

that it fails to sufficiently guide ethical marketing

practice (Sirgy and Su, 2000). This is due to the fact

that many consumers lack the opportunity to be

exposed to objective information about the quality

and prices of competing high-tech products, and

consumers also lack the ability and motivation to

process this information (see Table III).

The ethics of relationship marketing

Relationship marketing is an emerging paradigm in

marketing thought that focuses on the development

and maintenance of quality relationship between ex-

change partners for mutual benefit. Relationship

marketing refers to all marketing activities directed

towards establishing, developing, and maintaining

successful relational exchanges (Morgan and Hunt,

1994). That is, relationship marketing is an integrated

effort to identify, maintain, and build up a network

with customers for mutual benefit over a long time.

The conceptual domain of relationship marketing

includes concepts such as trust, commitment, and

satisfaction (e.g., Dwyer et al., 1987; Ganesan, 1994;

Parvatiyar and Sheth, 1994; Morgan and Hunt, 1994).

According to the stakeholder view of the firm

(Freeman, 1984), a firm operates in a network of

relationships. That is, a firm engages in various

exchange relationships with many exchange partners

including suppliers, customers, competitors, other

functional departments within the organization, and

various stakeholders in the society (e.g., Carroll,

1989; Evan and Freeman, 1988; Goodpaster, 1991;

Morgan and Hunt, 1994; Robin and Reidenbach,

1987; Wheeler and Sillanpaa, 1997). Stakeholder

theory is a grounded in the literature of business

ethics and corporate social responsibility (e.g., Ca-

roll, 1989). Stakeholders are typically classified as

external stakeholders, internal stakeholders, and

distal stakeholders (e.g., Sirgy, 2002). Internal stake-

holders are other functional departments and business

units within the firm—other than the marketing

department. External stakeholders refer to stakeholders

outside of the firm, which survival and growth of the

firm depends on (e.g., customers, shareholders, dis-

tributors, and suppliers). Distal stakeholders refer to

stakeholders that influence the survival and growth

of the firm indirectly through external stakeholders

(e.g., legal groups, consumer advocacy groups,

government agencies).

One can argue that the ethics of relationship mar-

keting can be justified by stakeholder theory. A firm

serves society well by establishing positive relation-

ships with its various stakeholders. The firm does this

by meeting the demands of stakeholders leading to

trust and commitment. By the same token, if the

primary stakeholders of marketing are customers and

distributors, then stakeholder theory advocates that

the marketing department within the firm should

make every effort to cater to customers and distribu-

tors in ways to elicit their trust and commitment.

Doing so necessitates ethical marketing practice,

which in turn serves society as a whole. Relationship

marketers focus on developing long-term relationship

with customers. Relationship marketing concentrates

on generating repeated sales from customers by pro-

viding satisfaction and establishing trust.

Although one can argue that relationship market-

ing is considered to be on a higher ethical plane than

transaction marketing, it still falls short. Establishing

positive relationships with customers based on trust

and commitment does not ensure that the firm�smarketing decisions enhance consumer and society

well-being. Consider the automobile industry. Many

automobile manufacturers do a good job trying to

establish positive relationships with customers. Cus-

tomers are happy with their cars and the service pro-

vided by the warranty and dealer network. Customers

end up trusting their automobile manufacturers and

their dealers. They feel a sense of loyalty and com-

mitment to manufacturers and dealers. Paradoxically,

the same automobile manufacturers might design

their cars by cutting corners on safety measures. The

same manufacturers might design more fuel-efficient

cars to minimize toxic gas emissions and air pollution

but choose not to. Relationship marketing based on

stakeholder theory fails to guide marketing decision-

making in areas concerning consumer safety, the

safety of other publics, as well as the safety of the

environment (see Table II).

The ethics of well-being marketing

Drucker (1969) has long maintained that business

has a significant impact on society. Therefore,

384 M. Joseph Sirgy and Dong-Jin Lee

TA

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An Ethical Business Philosophy for Consumer Goods Firms 385

TA

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f-life

impac

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386 M. Joseph Sirgy and Dong-Jin Lee

business managers should accept the responsibility

to preserve and enhance consumer and society

well-being. The concept of well-being should be

built into the firm�s mission and mindset of senior

executives. This is most significant for large cor-

porations since they tend to impact society more

significantly than small firms. Drucker argued that

executives should incorporate the concept of well

being in their mission statement, business strategies,

and daily operations for three reasons. First, the

society�s costs for neglecting to do this are very

high. Second, business is part of society, and not

doing something about the preservation and

enhancement of quality of life in society will

ultimately affect business in adverse ways. That is,

healthy business and a sick society are not com-

patible. Third, improving consumer and society

well-being should be a tremendous business

opportunity. Many marketing scholars followed the

lead of Drucker in calling for the kind of mar-

keting that enhances both consumer and society�swell-being (e.g., Fisk, 1971; Kelly, 1974; Kotler,

1979).

For example, Kotler (1979) referred to ‘‘societal

marketing’’ as a concept equating well-being mar-

keting. The societal marketing concept calls for a con-

sumer orientation backed by integrated marketing

activity aimed at generating consumer satisfaction and

long-run consumer well-being as key to achieving

long-run profitability. He developed a set of axioms

for societal marketing. Examples include ‘‘Outside

parties should be represented in seller decision-mak-

ing’’ and ‘‘Sellers will be effective to the extent that

they attempt to serve consumers� interests in addition

to their desires.’’ Kotler (1986) defined marketing

effectiveness in terms consumer and society well-

being: ‘‘The organization�s task is to determine the

needs, wants, and interests of target markets and to

deliver satisfaction more effectively and efficiently

than competitors in a way that preserves or enhances

the consumer�s and society�s well-being’’ (p. 16).

Kotler (1987) also suggested three stages of evo-

lution of marketing. The first stage is the marketing

concept. He argued that the marketing concept had

emerged as a result of movement from a product

orientation to a sales orientation to a marketing

orientation. The marketing concept focuses on

consumer wants. Marketers adhering to the mar-

keting concept make no judgments about whether

consumer wants are consistent or inconsistent with

society�s well-being. The second stage of marketing

evolution is the humanistic marketing concept. This

concept posits that marketers consider both con-

sumer wants and consumer interests. Thus,

humanistic marketers do not tell people what they

should have. Instead they market ‘‘better’’ goods and

services and subsequently attempt to ‘‘educate’’

consumers about the benefits of the new and

improved ‘‘products.’’ The third stage of the evo-

lution of the marketing concept is societal marketing.

This concept is designed to address the concerns of

the humanistic marketing concept (i.e., some mar-

keting practices may serve consumer wants and

interests and yet hurt society�s interests).

So what is a good definition of well-being mar-

keting? We define well-being marketing for con-

sumer goods firms as a business philosophy that

guides the development, pricing, promotion, and

distribution of consumer goods to individuals and

families for the purpose of enhancing CWB at a

profit (in the long run) in a manner that does not

adversely affect the public, including the environ-

ment. Because customers are considered to be the

primary external stakeholder, marketers� primary

responsibility is to meet the demand of their cus-

tomers safely and enhance their quality of their life.

But, because the firm�s marketing decision may ad-

versely impact the well-being of other external

stakeholders, it is vital that marketing decisions are

made in ways to minimize possible adverse effects

impacting the well-being of employees, distributors,

suppliers, stockholders, etc. (Sirgy, 2001).

Well-being marketing is grounded in duty ethics,

especially the duty of beneficence and non-malefi-

cence. Well-being marketing focuses on the

enhancement of CWB. This is the essence of the

beneficence component of well-being marketing (e.g.,

Beauchamp, 1999). The principle of beneficence

refers to a general group of duties that include a

positive injunction to assist customers. The principle

of beneficence judges the ethical nature of an action

based on the criteria that one ought to promote to

good (Frankenna 1973, p. 47). The duty of benefi-

cence is one of the Ross� (1930) prima facie duties in

ethics–the duty that one recognizes at first sight as

being obligatory when all other things being equal.

Duty of beneficence is the sense of obligation we

feel that there are people in the world whose

An Ethical Business Philosophy for Consumer Goods Firms 387

situations we can improve. For well-being market-

ers, it is a duty to improve the well-being of con-

sumers by meeting their needs fully over the entire

span of the consumer/product life cycle.

Well-being marketing also focuses on preserving

the well being of stakeholders. This is the essence of

the moral duty of non-maleficience. The principle of

non-maleficience refers to injunction not to inflict

harm to others (Beauchamp, 1999; Fisher, 2001).

The duty of non-maleficence is the sense of obli-

gation that we should not harm others. Besides not

inflicting harm, one ought to prevent or remove

harm (Frankenna, 1973).

Thus, well-being marketing is grounded in the

ethics concepts of duty of beneficence and non-

maleficence in that the focus is not only on serving

consumers safely in a manner that contributes to

their quality of life but also the preservation of well

being of the firm�s other stakeholders (see Table II).

We believe that the ethics of well-being marketing

is on placed a higher plane than transaction and

relationship marketing. Well-being marketing is

more comprehensive in the way it accounts for both

consumers� and society�s well-being. In the next

section of the article, we analyze how the concepts of

well-being marketing guide marketing decision-

making. We will contrast marketing decision-making

guided by well-being marketing with decision-

making guided by transaction marketing, and

relationship marketing.

Implementing the concept of well-being

marketing in the context of consumer goods

firms

In this section, we will further expound on well-

being marketing by describing how, as a business

philosophy, it guides both strategic and tactical

marketing decisions.

Marketing strategy guided by the well-being principle

The strategic objectives of transaction marketing are

short-term financial goals. Most firms, driven by a

transaction philosophy, focus on quarterly sales and

profit to assess the financial health of the firm and to

set new goals for the coming quarter. The focus is

short-term. Thus the impetus lies in recruiting new

customers and making new transactions. Competi-

tiveness is the state of mind of the transaction mar-

keter. The goal is to gain more market share, to

make customers belonging to competitors switch to

the firm�s brand. Marketing performance is judged in

terms of sales, market share, and profit. Much of the

science and technology that helps the firm recruit

new customers is grounded on the psychology of

brand preference and choice. Transaction-oriented

firms focus on understanding the psychology of

purchase to create marketing programs that entice

new customers to purchase the firm�s product (see

Table III).

The marketing strategy of relationship-marketing

firms is significantly different from transaction-ori-

ented firms. The strategic objectives of relationship-

marketing firms are more long term. The time

horizon is not restricted to quarterly sales and

profit. Marketing performance is assessed through

financial and behavioral measures. The firm is said

to be doing well not only when the financial

numbers look good but also research shows that

current customers are satisfied with the firm�sproduct, they have trust in the firm�s ability to

deliver on its promises, and they are committed to

doing business with the firm in the foreseeable

future. Thus, relationship firms invest a great deal

of resources in understanding the psychology of

satisfaction, trust, and commitment, and develop

marketing programs to increase customer satisfac-

tion, trust and commitment. Furthermore, rela-

tionship firms do not focus on enhancing customer

satisfaction only through purchase. The focus of

their marketing programs is post-purchase experi-

ences—marketplace experiences related to product

preparation, consumption, ownership, maintenance,

and disposal (see Table III).

In contrast to transaction and relationship firms,

the strategic objectives of well-being firms involve

both financial and societal goals. Marketing perfor-

mance of a well-being firm is judged in terms of

sales, profit, customer-life satisfaction, customer

safety, employee safety, and safety to the environ-

ment. The time horizon of well-being firms is long-

term and multidimensional. Well-being firms invest

in the science and technology related to quality of

life studies; they develop marketing programs to

enhance the quality of life of customers through the

entire spectrum of marketplace experiences: product

388 M. Joseph Sirgy and Dong-Jin Lee

purchase, preparation, consumption, ownership,

maintenance, and disposal (see Table III).

Product decisions guided by the well-being principle

Product decisions (product design, packaging,

labeling, branding, warrantee, technical assistance,

etc.) guided strictly by transaction marketing may

lead to short-term profitability, yes, but also may

contribute to ill being. Of course, product decisions

in that vein are guided by the goal of maximizing

sales and reducing costs. In doing so, many of the

product decisions are guided by an understanding of

consumers� pre-purchase expectations. The product,

the package, the warranty, etc. are all designed to

meet consumers� purchase expectations. The goal is

to deliver a product mix that would result in high

brand preference and choice over competitor

brands.

In contrast, a relationship-marketing firm makes a

host of product decisions to meet or exceed cus-

tomer expectations, ultimately to ensure repeat

business and brand loyalty. To reiterate, the goal

here is to maximize customer satisfaction, trust, and

brand loyalty. To do so, the marketer has to have a

good understanding of not only pre-purchase

expectations but also post-purchase expectations.

Product decisions, guided by the well-being

principle, focus on developing and marketing

products that are significantly beneficial to con-

sumers with little or no negative externalities. In

other words, a firm guided by a well-being philos-

ophy makes a host of product decisions in ways to

significantly enhance the quality of life of individual

consumers or families without adversely affecting

employees, the local community, the environment,

and the general public. Well-being marketing fo-

cuses on maximizing consumer satisfaction across all

six stages of the consumer/product life cycle

(product acquisition, preparation, consumption,

possession, maintenance, and disposal) with little or

no negative externalities. Thus, the goal of a well-

being firm is to enhance consumers� and society�swell-being—a concept above and beyond sales/

profitability and customer satisfaction/brand loyalty.

Product decisions guided by the well-being principle

are shown in Table III and described in some detail

in the sections below.

With respect to product decisions designed to

enhance wellbeing in relation to product purchase, a

transaction-oriented firm typically designs the

product in units that are most sellable, making the

transaction easy and convenient, and therefore

marketable. In contrast, a relationship-oriented firm

designs the product not only in units most sellable

but also in volume and mass to make the transpor-

tation logistics of the product easy and convenient to

the customer. Transaction-oriented firms may not

care about making transportation logistics easy and

convenient for customers because they may feel that

their job is done once the sale is consummated.

Relationship marketers care much about post-pur-

chase transportation logistics because not doing so

may adversely affect customer satisfaction and repeat

business. Well-being-oriented firms go two steps

beyond what relationship marketers do. First, they

make a concerted effort to ensure that product de-

sign is not only guided by market demand and

customer satisfaction/trust/commitment goals but

also by safety concerns—the product is designed in

such a way to ensure the purchase experience is safe

to consumers, the general public, and the environ-

ment. This is because safety is an important goal of

well-being marketers. For example, in relation to

transportation and shipping logistics, well-being

firms are likely to make every attempt possible to

ensure that the product package is safe to transport

and safe to the transporter, the general public, and

the environment. That is, the well-being oriented

firm takes additional precautionary measures to de-

sign a package for the product that, if damaged

during transport, the contents would not spill and

harm the customer (or transportation personnel),

those in the vicinity of the spill, as well as the

environment in terms of land, water, and/or air

pollution (cf. Jacobs, 1988). Again safety issues re-

lated to packaging are not likely to be viewed as

important if guided by relationship marketing.

Relationship marketing guides the firm to focus first

and foremost on customer satisfaction, trust, and

loyalty assessments. Furthermore, one can argue that

packaging safety assessments are best captured by

expert assessments, not customer perceptions and

evaluations of safety issues related to shipping,

transportation, and product logistics. Emphasis of

safety issues during shopping reflects the non-

maleficence component of well-being marketing.

An Ethical Business Philosophy for Consumer Goods Firms 389

Second, well-being firms attempt to design the

product in ways to make the purchase experience

satisfying to the customer, not only in the sense that

this satisfaction would lead to purchase but also

satisfaction in the quality-of-life sense. It is the kind

of satisfaction that makes a contribution to life sat-

isfaction. This dimension of product strategy reflects

the beneficence dimension of well-being marketing.

Consider the example of Nextel and the way they

make the purchase of their cell phones an exciting

event at NASCAR-related events. Nextel sets up a

playground at a racing event or more like a huge

arcade. In that arcade, consumers are invited to play

a variety of car racing simulation videos. This is an

environment that is pleasant and exciting for con-

sumers. It is an environment that enhances the

purchase experience. For consumers whose lifestyle

reflects NASCAR�s activities, interests, and opin-

ions, the satisfaction generated in the context of a

NASCAR event is highly involving, enduring, and

adding to life satisfaction.

With respect to product decisions designed to

enhance well-being in relation to product preparation,

transaction marketers attempt to maximize sales by

ensuring that the product can be easily assembled or

prepared for consumption. Many consumers do not

have the necessary skills, patience, or stamina to

assemble or prepare purchased products for con-

sumption. This situation can be very frustrating for

many customers, resulting in product returns. Most

companies are contractually obligated to accept

returns, which can significantly cut into profit.

Product returns are averted by designing the product

for easy assembly or preparation. The case in point is

Ikea, the world�s largest home furniture manufac-

turer. The firm produces home furniture with sim-

ple design, modular interchangeable parts, and easy

to assemble (Kumar et al., 2000). Furthermore, to

ensure that the product is not returned, many

transaction-oriented firms make a concerted effort to

provide technical assistance to customers. Most firms of

consumer goods provide technical assistance (in the

form of customer service) to assist consumers in

product assembly or preparation. Relationship-ori-

ented firms also design the product for easy assembly.

They also provide technical assistance to assist with

product assembly. However, to ensure that cus-

tomers are highly satisfied with the product (and feel

trust and commitment toward the company), they

go beyond what transaction firms do. They offer free

product assembly, or they may charge a nominal fee

for the assembly. Doing so, not only minimizes

product returns, but also serves to enhance customer

satisfaction, trust, and commitment.

Well-being marketers do what relationship mar-

keters do and go beyond relationship marketing in

two ways. First, they design the product in such a

way to avoid the possibility of customer injury while

assembling the product and to ensure safety to others

as well as the environment. In other words, safety is

an important criterion in product assembly and

preparation. Safety in product preparation is

important, not only to customers, but also to the

general public and the environment. Again, as pre-

viously mentioned, this is the essence of the non-

maleficence component of well-being marketing.

Second, well-being marketers attempt to make the

product assembly/preparation experience as satisfy-

ing and meaningful as possible. Consider the fol-

lowing example: the USA television channel has a

movie program hosted by two anchor guests who

during movie breaks comment about the movie

while showing the audience how to cook a recipe.

The recipe, of course, has food ingredients and/or

cuisine utencils sponsored by specific manufacturers.

The focus is to show how the manufacturer’s

‘‘product’’ can be prepared, and this demonstration

is done in ways that is highly entertaining. Those

watching the movie learn how to prepare the recipe.

Imagine implementing this concept to help con-

sumers prepare a host of products and things, from

cooking with certain grocery items to assembling

computers. The goal is to make the preparation

experience fun, exciting, and meaningful to target

consumers. This is the essence of the beneficence

component of well-being marketing.

With respect to product decisions designed to

enhance well being in relation to product consumption,

a good transaction firm designs a product by study-

ing consumer purchase expectations. Understanding

what consumers expect out of a product when

consumed is important in designing the product to

generate those benefits. Once the product is

designed guided by purchase expectations, the

transaction marketer promotes the product to tout

those benefits. Doing so enhances the marketability

of the product. For example, an automobile com-

pany studies young adults� expectations used in

390 M. Joseph Sirgy and Dong-Jin Lee

making car purchase decisions. The company finds

out that these consumers seek cars that are sporty

looking, equipped with nice CD/stereo system, and

have power. As a result, the company designs a car to

meet these expectations and targets this car to young

adult consumers in a promotion campaign. Note

that the product is designed to generate consump-

tion utility guided by purchase expectations. In con-

trast, a relationship marketing car manufacturer,

targeting young adults, designs a car guided by pre-

and post-purchase expectations. In other words, to

generate consumption utility that leads to customer

satisfaction, trust, and commitment, the relationship

marketer takes into account how young adults

evaluate the car after purchase and consumption, and

how these evaluations lead to feelings of satisfaction

or dissatisfaction. The goal is to design a car for these

consumers in such a way to generate customer sat-

isfaction after purchase and use. In this instance,

post-purchase expectations may not only involve

driving a sporty looking car equipped with nice CD/

stereo system, and having power, but also driving a

car that is reliable, low on gas mileage, roomy en-

ough to haul stuff, and reasonable in price not to

hurt the pocketbook. In other words, the product is

designed to generate utility guided by pre- and post-

purchase desired expectations (cf. Park et al., 1986;

Sheth et al., 1991; Sweeny and Souter, 2001). Again,

the goal is to design a product to generate con-

sumption utility in such a way leading to customer

satisfaction, trust, and commitment.

A car manufacturer guided by the well-being

concept goes beyond the design standards of the

relationship marketer. In addition to incorporating

pre- and post-desired expectations into the design of

the product, the well-being marketer is guided by

safety concerns during consumption and a consump-

tion experience that is most meaningful and enriching.

With respect to safety concerns, both transaction and

relationship marketers would include safety only if the

research uncovers the fact that consumers do make

pre-and post-purchase decisions based on car safety.

Only then do car manufacturers design cars to ensure

consumer safety. Manufacturers of consumer goods

guided by a well-being philosophy design their

products to ensure consumer safety (when the product

is consumed) and safety of employees, the general

public, and the environment (in the manufacturing

and shipping of the product) (cf. Jackson and Morgan

1988). In other words, well-being firms feel obligated

by a sense of social responsibility to ensure that their

products (when consumed) will not adversely hurt

others (others than the consumers) and not harm the

environment by polluting the air, water, and/or land.

Transaction- and relationship-marketing firms may

focus on safety, but if so, they do this from the vantage

point of the consumer (e.g., Bettman et al., 1986), not

society at large.

With respect to the design of the product to

generate a meaningful and enriching consumption

experience, well-being firms conduct research to

identify pre- and post-purchase expectations that are

linked with life satisfaction, not just customer satis-

faction. How can the product be designed to max-

imize the quality-of-life impact of the product? For

example, in relation to personal transportation,

marketing research is conducted to identify utilitar-

ian, symbolic, and aesthetic features that would lead

to positive affect in various life domains of the

consumers (e.g., work life, family life, social life,

leisure life, and travel life). A car designed to max-

imize positive affect in the driver�s various life

domains is the kind of car that is likely to play an

important role in enhancing the well being of the

driver, not the kind of customer satisfaction that is

short-term, ephemeral, transient, or non-enduring.

Therefore, well-being marketing prompts marketing

researchers to use methods that go beyond customer

satisfaction, methods grounded in quality-of-life

research (see Sirgy�s [2001] Handbook for Quality-of-

Life Research for research methods and measures).

With respect to product decisions designed to

enhance well being in product ownership, many

products depreciate their market value very rapidly.

Many companies design their products with prod-

uct obsolescence in mind. A case in point is com-

puter hardware. One can argue that transaction-

oriented firms design products to maintain (or

possibly enhance) their market value. However,

they do so if, and only if, aspects of product

appreciation/depreciation are identified as criteria

in purchase decision-making. Sometimes consumers

use criteria such as product obsolescence, durability,

market value after purchase and use, and product

appreciation/depreciation in purchase decision-

making. If so, a transaction marketing firm has to

design the product in such a way to convince

consumers that their brand is better than competitor

An Ethical Business Philosophy for Consumer Goods Firms 391

brands on durability and market-resale value.

Relationship-marketing firms place emphasis on

product durability and market-resale value too.

However, they do so, when their market research

indicates that durability and resale value are not

only criteria in purchase decision-making but also

customer satisfaction, trust, and commitment. The

underlying assumption is that customers who are

happy with the resale value of the brand are likely

to remain loyal to that brand in future buying

occasions.

Well-being marketing does not only equate with

relationship but also extends it in two significant

ways: safety concerns and subjective well-being.

With respect to the safety issue, well-being firms

design a product to ensure that the ownership of

the product is not associated with safety prob-

lems—safety to the owners and their families, safety

to the local community, the environment, and the

general public. Consider the case of gun ownership

or the ownership of rifles, assault weapons, and

other lethal weapons. There are many consumers

who collect weapons for a variety of reasons. Some

do so for the monetary value as collectible items;

some do so because consumers use them for

hunting purposes; and so on. Social critics have

long accused the gun industry for failing to ensure

that gun owners are sufficiently educated to store

these collectibles in a manner to avoid accidents to

self and others. Well-being firms are very sensitive

to safety concerns. In the case of gun ownership,

they are likely to design weapons with high quality

safety systems such as safety locks and storage bins

that are highly secure.

Furthermore, the well-being firm is motivated to

design the product in such a way that its ownership

becomes a part of an overall constellation of products

and services signifying a lifestyle, a passionate hobby

or vocation, or leisure activity. For example, some

people are avid readers of mystery novels. Their

reading activity reflects a lifestyle of sorts. Buying a

mystery novel is not simply an end goal. Buying a

mystery novel allows the reader to add that novel to

his or collection of mystery novels, which partly

defines consumer�s identity. Adding to one�s col-

lection of mystery novels does not simply generate

customer satisfaction with the purchased item but

also the kind of satisfaction that is linked with one�soverall personality and self-concept. This satisfaction

can be viewed as life satisfaction, happiness, or

subjective well being.

What about product maintenance? Many transac-

tion-oriented firms provide their customers a

product warranty. A warranty helps the customer

when the product is in need of service or repair (cf.

Dunne et al., 2002; Udell and Laczniak, 1981).

These firms provide a good warranty to enhance

the sale potential of their products. In contrast,

relationship-marketing firms do the same to

increase brand loyalty and enhance the chances of

repeat business. In doing so, they go beyond the

traditional warranty. A good warranty offered by a

relationship-marketing firms focuses on both pre-

ventative and reactive maintenance (e.g., Chonko,

1985). That is, the warranty is designed to (1) help

the customer periodically service the product to

prevent malfunctioning, and (2) help the customer

repair the product when it malfunctions. Such a

warranty develops customer trust and reinforces

brand loyalty (Thurau and Hansen, 2000). A

product that is more reliable and durable decreases

the product�s need to be serviced and repaired

frequently. Reliability and durability are typically

product attributes desired by consumers, and

therefore these attributes are manifested in the kind

of research conducted by consumer goods firms.

Transaction firms typically make engineering deci-

sions concerning product quality improvements by

assessing consumers� perception of reliability and

durability. These firms make reliability and dura-

bility improvements to the product only if mar-

keting research shows that product reliability and

durability are important criteria in purchase deci-

sion-making. In contrast, relationship-marketing

firms are motivated to make reliability and dura-

bility improvements to the product when market-

ing research shows these product attributes are

important in the development of customer satis-

faction, trust, and commitment.

Well-being firms are very conscientious about

safety concerns. The maintenance warranty offered

by the firm is safe-proof. That is, the warranty

program has been tested and re-tested to ensure that

no aspect of reactive or preventative maintenance is

likely to jeopardize the safety of customers,

employees, the environment, as well as the general

public. In addition to the safe-proof warranty pro-

gram, well-being firms do not hesitate to recall their

392 M. Joseph Sirgy and Dong-Jin Lee

products when evidence arises concerning lack of

safety. Well-being firms also are likely to provide a

maintenance program that can induce feelings of

subjective well-being. For example, there are many

car owners that are emotionally involved with their

cars. The car reflects their identity, their status, and

the image they project to others. These customers

read much about cars. They pay attention to ads about

cars. They are opinion leaders in that they talk to

others about cars. These people are likely to take care

of their cars in a manner that feeds their subjective

well-being. In other words, they spend much time,

energy, and money to take care of their cars. These

maintenance activities meet a variety of needs across

several life domains contributing to life satisfaction.

Car manufacturers and dealers have an opportunity to

further enhance life satisfaction to consumers highly

involved with their cars by offering them a mainte-

nance program that can induce feelings of subjective

well-being. For example, the car dealer may offer a

maintenance course to their customers. They may

allow customers to bring their cars into the shop and

have them conduct reactive and preventative main-

tenance themselves, with the professional auto

mechanics lending a hand only if and when needed.

Finally, we have product decisions related to

product disposal. Transaction-oriented firms are likely

to use environmentally-friendly product ingredients

and/or packaging if consumer research uncovers that

consumers do indeed consider environmental-

friendly dimensions of the product in purchase

decision-making (e.g., Wasik, 1996). The rationale

is to deliver what consumers want; otherwise, the

product will not sell. Relationship-marketing firms,

on the other hand, attempt to find out the role of

environmentally-friendly product ingredients and

packaging in developing customer satisfaction, trust,

and commitment. If research were to indicate that

customers feel more satisfied (feel more trusting and

committed to the brand) because of its environ-

mentally-friendly ingredients and packaging, the

firm acts to design its product with more environ-

mentally ingredients and packaging.

Well-being firms are motivated by corporate so-

cial responsibility and environmental stewardship.

This means that the product has to be designed

keeping in mind that it will be disposed after con-

sumption, and the disposal of that product should

not contribute to environmental degradation. In

addition to the design of the product with envi-

ronmentally-friendly ingredients and packaging, the

well-being firm makes every effort to ensure that the

disposal activity is not only safe to the environment

but also to those involved in the act of disposal,

whether they are consumers or disposal service

personnel. Furthermore, well-being firms are likely

to offer their customers the opportunity to trade-in

their consumed product with newer and upgraded

ones. This could be in the form of continuously

developing a product line with new upgrades or new

features that can serve peripheral needs. For exam-

ple, a consumer whose cell phone is damaged sends

it back to the manufacturer, and the manufacturer

sends back an upgraded model. This exchange may

be part of the product warranty. Thus, the disposal

experience becomes an exciting event in which the

customer experiences subjective well-being by

exchanging his old product with an upgrade.

Pricing decisions guided by the well-being principle

Pricing decisions guided by a well-being philosophy

are very different from pricing decisions guided by

either transactional or relationship marketing. Typ-

ically, a transaction-oriented firm makes pricing

decisions guided by factors such as cost-plus (plus a

margin to achieve a desired profit level), what the

market can bear, and competition. Relationship-

marketing firms also price their products using cost-

plus and market demand methods. Additionally,

their pricing decisions are guided by customer per-

ceptions of value (e.g., Sweeny and Souter, 2001;

Woodruff, 1997; Zeithaml and Bitner, 2000). Doing

so ensures higher levels of profitability in the long

run, mostly through repeat business.

In contrast, well-being firms make pricing deci-

sions guided by additional factors such as experts�assessment of product value, price affordability, and

cost of safety and remediation (cf. Kotler et al., 2002).

A well-being firm tries to balance societal goals with

the firm�s financial goals (Kotler, 2003). Pricing

decisions guided by the well-being principle are

summarized in Table III and described in some detail

in the sections below.

With respect to the purchase stage of the con-

sumer/product life cycle, well-being firms are gui-

ded by other factors in addition to cost, profitability

An Ethical Business Philosophy for Consumer Goods Firms 393

goals, what the market can bear, competition, and

customer perceived value. First, well-being market-

ers are likely to use both subjective and objective

assessments in determining value. In other words,

well-being marketers do not strictly rely on cus-

tomer perception of value; they take into account

experts� assessment of value. Consumer Reports value

ratings are an example of what we mean by

‘‘objective assessment of value.’’ Taking into

account experts� evaluation of value is important

because in many instances consumers do not have

knowledge or ability to assess product performance

in relation to price. Second, well-being marketers

take into account price affordability. Their goal is

not to maximize profit in the short run as is typical

for transaction firms. Their goal is not to maximize

profit in the long run as is typical for relationship-

marketing firms. Their goal is to place the product

with as many consumers who need the product as

much as possible. This means consumer affordance

of the product�s price. Consider the flowing case

involving Tata Motors in India. This is a large auto

maker that recently developed a $2,200 passenger

car, distributed in a kit and assembled at point of sale.

Thus, making a ‘‘people�s car’’ affordable to a vast

segment of the population in India is the primary

motive driving this venture (Kripalani, 2005). Third,

well-being firms are typically safety-conscious in

their pricing decisions. For example, if their product

is determined to degrade the environment in certain

ways, then the cost of environmental restoration is

included in the price of the product.

The same additional factors (objective value, price

affordability, and safety/remedial costs) are equally

involved in pricing decisions involved in product

preparation, use, ownership, maintenance, and dis-

posal. Specifically, in product preparation, marketers

have to price parts and tools necessary to prepare or

assemble the product or for providing technical

assistance (in the form of customer service) to assist

customers in the product assembly or preparation.

Consider the case of a furniture retailer selling

inexpensive furniture to working class families. The

retailer allows the furniture to be assembled at the

store�s warehouse with the assistance of warehouse

personnel at no extra charge.

With respect to pricing decisions designed to

enhance well-being in product consumption, there are

many consumer products in which consumers not

only pay for the purchase of the product but also

every time the product is used. Many examples

involve the telecommunications industry (e.g.,

wired telephone, cellular telephone, Internet access,

satellite television, and cable television). Consider

the case of cellular service provider targeting the

poor by providing very low prices. A family is given

five cell phones for free; the service plan is very

affordable; and poor families end up saving money

by disconnecting their hard-line phones.

With respect to pricing decisions designed to

enhance well-being in product ownership, many firms

help consumers assume ownership of high-ticket

items (e.g., automobiles). Ownership of certain

consumer goods (e.g., car, house, furniture, and

household appliances) has been shown to contrib-

ute significantly to life satisfaction (e.g., Belk, 1985;

Lee and Sirgy, 1995; Leelakulthanit et al., 1991).

Material possessions bring about feelings of power,

control, and exclusivity. Also, possessions allow

consumers to express their identities to significant

others. Consumers gain social approval by doing so.

Similarly, well-being firms help consumers assume

ownership of high-ticket goods. Well-being mar-

keters� pricing of credit is guided by additional

factors such as experts� assessment of value, con-

sumer affordance, and other costs related to safety.

Consider the case of housing. A developer in a

community finds out that there is a significant

segment of the poor and disabled elderly needing

better housing. The challenge is not to simply build

low-income housing for that market segment but

also to help those consumers assume ownership of

their homes. To do so, the developer joins forces

with a mortgage company to facilitate ownership of

affordable homes.

With respect to pricing decisions designed to

enhance well-being in product maintenance, many

consumer goods companies offer repair services

from the manufacturing site. Customers ship their

malfunctioned product, and the manufacturer re-

pairs the product and charges for replacement parts

and labor (minus what was guaranteed by the

product warrantee). Well-being firms strive to

price repair services affordably. Consider a com-

puter company that offers special computers for

the disabled who are supported by entitlement

programs. Through marketing research, the com-

pany finds out that these consumers cannot afford

394 M. Joseph Sirgy and Dong-Jin Lee

to spend more than 5% of their annual income on

computers and computer repairs. The 5% amounts

to approximately $3,000. The computer manu-

facturer strives to price the special computers, to-

gether with the warranty, below $3,000. Although

most of the disabled are likely to purchase these

special computers at higher prices, this well-being

firm is guided by consumer well-being. Pricing

the computers with the warranty at higher levels

would result in having their customers consider-

ably tighten their financial belt in relation to other

living expenses that can undermine their quality of

life.

With respect to pricing decisions designed to

enhance well-being in product disposal, one can ar-

gue that many transaction- and relationship-mar-

keting firms price their products without taking

into account environmental concerns. Well-being

firm do. For example, many beverage bottling

companies charge a little extra for the glass bottle

and promise a small refund when the customer

returns the consumed bottle for recycling. Paint

products and other chemical toxins are priced by

taking into account the cost of programs designed

to neutralize the environmental effects of these

toxins on the environment. Computer companies

offer a computer recycling program by covering the

costs of shipping (to help and encourage consumers

to ship their surplus computers to a recycling

facility). In other words, well-being firms take into

account the cost of product disposal, the environ-

mental consequences of disposal as well as the cost

of programs designed to reduce environmental

degradation caused by the disposal of the product

in question.

Distribution decisions guided by the well-being principle

Distribution decisions guided by a well-being phi-

losophy are very different from distribution decisions

guided by transactional and relationship marketing.

A firm guided by transactional marketing makes a

distribution decision guided by the goal of sales,

market share, and profitability. To accomplish sales,

market share, and profit goals, marketers design the

channel and select channel members with those

financial goals in mind. In most cases, the type

of channel and channel members that provide

consumers access and convenience in purchasing are

likely to meet the firm�s financial goals. Relation-

ship-marketing firms also consider factors such as

sales, market share, profit, and consumer access and

convenience as important criteria in distribution

decisions too. However, they also consider the

extent to which the channel type and members are

likely to generate repeat purchases through customer

satisfaction, trust, and commitment. Thus, relation-

ship firms focus on the extent to which a channel

type or members is able to provide access to the

product to repeat customers.

Firms guided by the well-being concept make

distribution decisions guided by both firm and

societal goals. Thus in addition to all the outcome

and process goals of transaction and relationship

firms, the well-being firm considers social and

societal factors such as safety (safety to consumers,

other publics, and the environment) and the extent

to which the channel can effectively reach target

consumers—those likely to benefit from the product

the most. Distribution decisions guided by the well-

being principle are summarized in Table III and

described in some detail below.

Let us examine how distribution decisions made

in relation to product purchase. In the context of

indirect channels, transaction firms tend to distribute

their product extensively—channels in high market

demand location—thus generating the highest level

of sales, market share, and profit. In contrast, a

relationship-marketing firm does not rely exclusively

on traffic flow and market demand but also data

related to repeat business. They tend to be selective.

A well-being also is likely to select exclusive distri-

bution outlets—more selectively than relationship-

marketing firms—especially in relation to products

that are likely to be misused or abused. Consider the

distribution of diet pills. This product can be dis-

tributed through discount stores, drug stores, or

medical clinics. The safest way to distribute this

product is through medical clinics, because physi-

cians and other healthcare professionals can educate

consumers about the safe use of this product.

In addition to making distribution decisions about

whether the channel should be extensive, selective,

or exclusive, manufacturers of consumer goods tend

to select specific distributors or agents. Transaction

firms tend to select distributors guided by the agent�sability to push the product (generating high levels of

An Ethical Business Philosophy for Consumer Goods Firms 395

sales, market share, and profit). Thus, agents that

have a demonstrated record of high selling are typ-

ically selected. Relationship-marketing firms select

agents not only because of good selling skills but also

because of ability to care for and retain customers.

Well-being firms also select agents based on the

agents� ability to sell, service accounts, and also the

agents� record of ethical conduct and social respon-

sibility. In other words, the agent�s reputation as

being an ethical person becomes part of the selection

equation.

In the context of an indirect channel, transaction-

oriented firms are motivated to create a shopping

environment that would facilitate purchase. For

example, a publisher of, let us say, romantic novels

targeting women, may have a website that makes it

convenient for women interested in romance novels

to enter the site, browse through the site, identify a

few good titles, and facilitate the payment process

through the use of a shopping cart procedure and

credit card transactions. Now let us consider another

publisher of romance novels but guided by a rela-

tionship marketing philosophy. The website is likely

to be not only convenient but also pleasant—pleas-

ant enough to ensure that the customer would have

a pleasant experience finding and purchasing a few

titles and coming back for more. Perhaps that pub-

lisher may have images of each novel capturing the

essence of the story, or perhaps a video clip in which

the author describes the novel in his or her own

words. In other words, the indirect channel is

designed to maximize both convenience and a

pleasant shopping experience. Now let us consider

another publisher of romance novels guided by a

well-being philosophy. That publisher is likely to

have a website characterized as convenient, pleasant,

as well as safe. That publisher may have safeguards to

ensure that personal information provided by the

customer is not shared or likely to be stolen by

computer hackers (as in identity theft). In other

words, that publisher attempts to maximize benefi-

cence and minimize maleficence.

Now let�s focus on product preparation. Transaction

firms do not pay much attention to issues dealing with

product preparation; some firms pay some attention

to customer concerns about product preparation only

to the extent that customers express these concerns.

However, to ensure that the product is not returned,

transaction firms do provide incentives to stock and/

or order inventory of parts, tools, manuals, assembly

instructions necessary to prepare or assemble the

product successfully. These firms also develop train-

ing programs to help distributors with product

installation. Relationship firms are concerned with

repeat business. Therefore, they do what transaction

firms do to help distributors with product preparation

and beyond. In addition to providing incentives to

stock or order parts and tools and developing training

programs, they actively engage in training customer

service personnel at the retail level to assist customers

in responding to questions about product assembly or

preparation. Well-being firms also do what relation-

ship-marketing firms do and beyond. These firms are

motivated by safety and ethical concerns too. They

ensure that the professionals hired to install the

product are certified for performance and safety

reasons. Thus, these firms attend to product prepa-

ration concerns to ensure customer satisfaction and

safety as well as the safety of the general public and the

environment.

With respect to product consumption, most trans-

action firms do train their distributors on how to

demonstrate the use of the product to custom-

ers—the goal is to implement the legal requirements

of the transaction contract or warranty, especially

given that the customers expect such demonstration

at the point of purchase. Relationship firms go be-

yond transaction firms in that they are interested in

generating a high level of customer satisfaction that

may lead to customer trust and commitment. To

ensure customer satisfaction, trust, and commitment,

many firms train retailers not only on how to

demonstrate the use of the product but also how to

use the product safely. Safety concerns do enter into

the picture here because customers� perceptions of

manufacturer as a caring company do affect cus-

tomers� satisfaction, trust, and commitment. Well-

being firms, on the other hand, train their distribu-

tors on how to demonstrate the use of the product to

customers with a different goal in mind—consumer

safety as well as the safety of the general public and

the environment.

With respect to product ownership, transaction firms

tend to select retailers that can provide lease versus

buy options to their customers. Again, the motive is

to ensure the sale. Providing options to own or lease

facilitates the transaction. For example, a number of

automobile manufacturers offer lease versus buy

396 M. Joseph Sirgy and Dong-Jin Lee

options indirectly through selected automobile

dealers. In contrast, relationship firms not only

provide lease versus buy options but also train

retailers to help their customers understand and

appreciate the value of the product if leased versus

owned. Ensuring that customers perceive product

value is important in customer satisfaction, trust, and

commitment. Well-being firms go beyond what

relationship firms in the way they train retailers to

provide services to customers to help protect the

investment value of the product. Consider a furni-

ture manufacturer that provides training to furniture

distributors on how to educate customers to enhance

the durability of the furniture. Of course, such

efforts do not only reflect relationship building but

also customer care.

In relation to product maintenance, transaction firms

make replacement parts available at the retailers to

honor the warranty requirements, and they do so at a

profit. Relationship-marketing firms go one step

further by helping retailers develop their own war-

ranty program that allows customers to service and

repair the product through the retail outlet instead of

shipping the product to the manufacturer�s site.

Well-being firms go even one step further. These

firms train retailers how to help customers on how

to maintain the product themselves to save money.

For example, some lawn mower companies (e.g.,

Caterpillar) provide detailed and reader-friendly

manuals on how to periodically service the product

to avoid costly repair services.

One can argue that transaction firms do not pay

much attention to issues of product disposal. This may

be due to the fact that most consumers tend to focus

on aspects of consumption; aspects of disposal do not

arouse much involvement. However, many trans-

action firms typically develop programs that allow

customers to trade-in the product for a newer model

at retail outlets. Of course, automobile manufactur-

ers are a good case in point. Relationship firms may

do what transaction firms do in terms of offering a

trade-in program but also help customers dispose of

their ‘‘old’’ product at convenient locations in the

community at reasonable or no cost. Doing so

ensures customer satisfaction, trust, and commit-

ment. Computer companies (Dell and Gateway)

have such programs in many communities in the

U.S. Well-being firms are typically much more in-

volved in issues related to environmentally-friendly

disposal. They assist their distributors develop

product trade-in/disposal programs that allows cus-

tomers to turn in the consumed product for proper

and environmentally friendly disposal. For example,

a number of printer manufacturers (e.g., HP, Canon)

have recycling programs at many large and medium-

size companies throughout the U.S. to collect

printer cartridges to minimize environmental

degradation.

Promotion decisions guided by the well-being principle

Promotion decisions guided by a well-being phi-

losophy are very different from promotion decisions

guided by a transactional or relationship-marketing

orientation. A transaction firm makes promotion

decisions guided by four goals: to create maximum

brand awareness, to inform prospective customers

that the brand matches their expectations, to gen-

erate maximal brand preference and purchase. With

a slightly different twist, relationship marketing firms

do the same but pursue additional goals of informing

customers of product and other service benefits that

matches their post-purchase expectations, which in

turn should lead to high levels of customer satisfac-

tion, trust, and commitment, and repeat purchase. In

contrast, the well-being firm pays attention to

additional goals related to product safety and quality-

of-life impact of the product. Promotion decisions

guided by the well-being principle are summarized

in Table III and described in some detail below.

Let us first consider promotion decisions in rela-

tion to product purchase. To reach their sales, market

share, and profit goals, transaction firms tend to

develop their marketing communications campaign

to generate maximal brand awareness. Once brand

awareness is achieved, transaction firms attempt to

inform target consumers of certain product bene-

fits—those matching their purchase expectations.

Consumers who become aware of the brand and

perceive the brand as providing benefits they expect

of the product class are likely to judge the brand as

preferable and purchase it. Relationship firms pursue

the additional goal of generating high levels of cus-

tomer satisfaction, trust, and commitment that leads

to repeat purchase. To do this, the relationship

firm tries to understand not only consumers� pre-

purchase expectations but also their post-purchase

An Ethical Business Philosophy for Consumer Goods Firms 397

expectations. Doing so allows them to inform their

customers of their product has those benefits and

features that they expect after having purchased the

product. Again, the goal is to generate customer

satisfaction, trust and commitment. In contrast, well-

being firms go beyond what relationship marketing

firms do in terms of promoting the product for

purchase. They provide much more information not

only in relation to the product benefits but other

costs-related concerns that affect well being of

consumers, the general public, and the environment.

In other words, well-being companies are more

willing (than transaction- and relationship-marketing

firms) to share information about their product�spotential hazards. They are more willing to discuss

safety concerns (safety to consumers, the general

public, and the environment). Another point of

distinction is the notion that well-being firms at-

tempt to inform target consumers about how their

product can enhance their quality of life. In other

words, their promotion campaign focuses sometimes

on how the product contributes to life satisfaction.

How about promotion in relation to product

preparation? Transaction-oriented firms tend to focus

on educating customers how to assemble or prepare

the product for consumption. For example, many

instances manufacturers of consumer goods (e.g.,

bicycle manufacturer) provide easy-to-comprehend

instructions with images and possibly videos.

Transaction firms also tend to inform customers

about the availability of technical assistance to help

in product assembly or preparation. They may do so

because customers may expect such information as a

pre-requisite to purchase. Not providing this infor-

mation to consumers may prevent the company

from turning these consumers into customers. In

addition to what transaction firms do, relationship-

marketing firms do more. Relationship marketing

firms tend to inform customers about the availability

and cost of installation services from selected retail

outlets, and they inform customers about the avail-

ability of replacement parts and tools needed for

product assembly or preparation. Even so they may

not financially benefit from these additional trans-

actions, such information may be part of post-pur-

chase expectations that may influence customer

satisfaction, trust, and commitment. Well-being

firms go several steps further. They attempt to

educate customers how to assemble or prepare the

product in a manner safe to themselves, the general

public, and the environment. They may also develop

and disseminate an educational program designed to

enhance the preparation experience.

In relation to product consumption, transaction firms

inform their customers about the availability of

product use manuals, how to purchase them, and at

what price. Such information may be part of con-

sumers� expectations that may influence their pur-

chase decision. Relationship firms go one step

further by informing their customers how to effec-

tively use the product in ways to meet customers�post-purchase expectations. Such information is

likely to enhance customer satisfaction, trust, and

commitment. Firms guided by a well-being philos-

ophy go several steps further. They provide their

customers with information on how to use the

product safely and in ways to derive the maximal

quality-of-life benefits. In many instances, the

manufacturer may offer educational and training

videos and seminars about that topic.

How about promotion decisions related to product

ownership? Firms guided by a transaction philosophy

typically inform targeted consumers about incentive

programs to trade-in their current product for a new

model. They may inform consumers about financing

programs to help customers assume ownership of the

product. They may inform consumers of availability

of retailers in the local area that can provide lease

versus buy options. In each of the aforementioned

case, the motive is to facilitate new sales transactions.

Relationship firms go one step further by informing

customers about any financing deals. The goal is to

ensure customer retention. For example, customers

that bought their cars from a dealership through an

auto maker financing program may switch to an-

other financing program because the rates are better.

To enhance customer satisfaction, trust, and com-

mitment, an auto maker may take pre-emptive

measures by contacting customers and informing

them of the availability of new refinancing programs

at lower interest rates. Similarly, some home builders

do express customer care by identifying mortgage

companies willing to refinance at low interest rates.

These builders then communicate to their customers

about these lending institutions willing to refinance

at lower rates. Well-being firms go further by edu-

cating their customers on how to maintain the

market value of their product. For example, some

398 M. Joseph Sirgy and Dong-Jin Lee

automakers (e.g., Honda) disseminate information

through their dealership to Honda owners about

how Honda cars tend depreciate less than other

brands. To help maintain the car�s market value,

customers are advised to service their cars periodi-

cally by engaging in certain maintenance-like

activities.

With respect to product maintenance, manufacturing

firms guided by a transaction philosophy do very

little in terms of communicating to customers much

about product maintenance. The reason is simple:

they do not have a financial, short-term stake in

doing so. Much of the maintenance-type promotion

is done by dealerships and retail facilities. Dealerships

and retail establishments are the ones that financially

benefit in the short run from product maintenance

programs. If and when they do, they may focus on

the renewal of product warranty. That is where they

can make extra money. Relationship firms are

motivated to foster customer goodwill. Thus they

engage in promotion that can generate customer

satisfaction, trust, and commitment. They may do so

by informing their customers about how to service

the product to enhance its reliability and durability.

Such firms may also inform their customers about

the availability of customer service from selected

outlets in the local area and the price of that service.

Well-being firms go further than that. These firms

may inform their customers about preventative

maintenance. They may educate their customers on

how-to-do-it repairs in a manner that can enhance

the customers� quality of life. They may also instruct

customers on how to do their own repairs safely—to

ensure their own safety, bystanders and others, as

well as the environment.

Finally, with respect to promotion decisions

dealing with product disposal, one can argue that

transaction firms engage very little in disposal-type

promotion. However, there are instances in which

manufacturers have a financial, short-term stake in

product disposal (e.g., trade-in programs). Much of

the promotion focuses on informing customers of

the availability of any trade-in programs and the

market value of the trade-ins. In contrast, relation-

ship firms do well in the area of communicating with

their customers about product disposal issues. The

goal, of course, is to generate customer satisfaction,

trust, and commitment. Well-being firms inform

their customers about how to dispose the product

safely, safely to the customers and their families,

safely in relation to the general public and the

environment. Examples include motor oil, paint,

gasoline, computers, printer cartridges, refrigerators,

among others. Well-being firms emphasize recycling

and the benefits of recycling. For example, beverage

bottling companies (e.g., Coca Cola) communicate

with local residents about recycling programs to

encourage environmentally-friendly disposal of

beverage bottles and cans.

Conclusion

We strongly believe that firms engaging in well-

being marketing are likely to prosper in the long run

than firms practicing transactional marketing. Well-

being marketing serves to help establish long-term

relationships with customers and develop company

goodwill (cf. Collins, 1993). Studies have identified

that long-term relationships and positive corporate

image help business firms achieve higher financial

performance (e.g., Collins, 1993; Kalwani and

Narayandas, 1995; Jap, 1999; Naidu et al., 1999).

But then the reader would say: and so do firms

guided by relationship marketing. The difference, of

course, is that well-being marketing is a business

philosophy grounded in business ethics. That is,

consumer goods companies are urged to practice

well-being marketing not only because this philos-

ophy translates into a business strategy that leads to

higher financial returns in the long run; companies

should practice well-being marketing because it is

the right thing to do. It is the moral thing to do. It is

most ethical.

One can argue that marketing paradigms have

evolved to culminate in well-being marketing. At

early stages of marketing thought and practice,

marketing performance was judged in terms of sales

and profit. Much research was generated focusing on

competition and marketing performance was judged

mostly by market share. In time, the competition

paradigm was overshadowed by much research on

customer satisfaction. That research has shown that

customer satisfaction leads to brand loyalty and

repeat purchase, and therefore high levels of profit-

ability. Much of the research dealing with the

marketing concept, customer orientation, and mar-

keting orientation seem to be embedded in that

An Ethical Business Philosophy for Consumer Goods Firms 399

paradigm. The focus of customer relationship mar-

keting here has been on how establishing long-term

relationships with customers to secure repeat busi-

ness and therefore ensure the survival and growth of

the firm. Satisfying customer needs is the key to

satisfying the needs of the marketer. We believe that

well-being marketing is the next paradigm in this

evolution and progression of paradigms. Well-being

marketing builds on relationship marketing by

bringing marketing and business ethics into the

picture. Well-being marketing strives to enhance the

quality of life. Thus, well-being marketing can be

regarded as an ethical extension of relationship

marketing.

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M. Joseph Sirgy

Department of Marketing

Virginia Tech

Blacksburg, VA, 24061-0236, U.S.A.

E-mail: sirgy@vt.edu

Dong-Jin Lee

Yonsei University

Seoul, Korea

An Ethical Business Philosophy for Consumer Goods Firms 403

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