Exploring the role of hope on indebtedness

and risk perception related to consumer purchasing behaviour

Lucia BarrosFundação Getúlio Vargas / Centro Universitário FIEO

Delane BotelhoFundação Getúlio Vargas

April, 2011.

INTRODUCTION

Hope is an important construct in marketing, once it is an antecedent of a number of important marketing variables, such as trust, expectation and satisfaction (MacInnis & de Mello 2005, Almeida, Mazzon & Botelho 2007).

Hope is an important element in the purchase of personal credit. The process of idealizing and the wish of a better future play important roles, allowing one to imagine himself enjoying a different future situation (Fleming 2008).

It is suggested that high hope can lead to lower risk perception, which can lead consumers to harmful behaviours (MacInnis & de Mello 2005).

RESEARCH PROBLEM

This research aims to investigate the influence of hope on risk perception and on propensity to indebtedness.

HOPE

THEORETICAL BACKGROUND

HOPE

Congruent and

Positive Goal

Importance

Perceived Possibility

Uncertainty

HOPE AND PURCHASE BEHAVIOUR

THEORETICAL BACKGROUND

• The purchase and consumption of goods and services are part of people’s goals.

• Consumption can be either the goal per se or the means to achieve a greater goal.

• Hope encourages consumers’ action, which can be the evaluation, choice and purchase of several products.

• When with high hope, people tend to systematically look for congruent information, which increases their belief that their goals are possible.

• Hope was said to be an antecedent of attitude, trust, expectations and satisfaction.

HOPE AND RISK PERCEPTION

THEORETICAL BACKGROUND

• When searching for congruent information, people may ignore information pointing to the likelihood of negative consequences (MacInnis and de

Mello 2005).

• Thus, high levels of hope increases the perception that the congruent outcome can happen;

• Lower the perception of the possibility to occur negative consequences;

• And of their severities;

• Besides increasing the perception that the risk-return relation is worthwhile (MacInnis and de Mello 2005).

HOPE AND PROPENSITY TO INDEBTEDNESS

THEORETICAL BACKGROUND

• The purchase decision of financial products involves a number of psychological, physic and social values (Vitt 2004), which can diminish precautions to maintain financial balance.

• Hope is an emotion capable of generating this kind of behaviour.Consumers may get indebted in order to achieve a goal which wouldallow a dream to come true. (Fleming 2008).

• If risk perception is affected by hope; high hope can increaseconsumer’s propensity to indebtedness.

METHODOLOGY

• The chosen method was individual in-depth interviews throughopen and non-structured questions;• Seven consumers were interviewed. Four of them recently gotindebted, while the other three were about to do it.• Below is the profile of each interviewee.

Code Codename Age Gender Professional Activity

I1 Zezé 27 Female Public Relations

I2 Binho 31 Male Lawyer

I3 Amy 27 Female Fashion Designer

I4 Cacá 31 Male Lawyer

I5 Suzi 28 Female Travel Agent

I6 Sérgio 29 Male Economist

I7 Lara 27 Female English Teacher

METHODOLOGY

• The chosen interview script was the one used by Fleming (2008),based on the method of narrative interview, in which the intervieweetells a story as an improvised narrative (Flick, 2004).

• Specifically, the interviewees were asked to tell a story about themoment they got or decided to get indebted. More details were askedthrough open questions, and because of the non-structured script, newquestions were added throughout the interviews.

• These interviews were analyzed through the method of contentanalysis, in which interviewees’ speech were recorded, coded andcategorized according to their similarities.

RESULTS

I called the first common category which arouse from the interviews as “Goals”. When telling their stories about a situation in which they became (or planned to become) indebted, all interviewees claimed to have a major goal which they pursuit.

“The advantage is mobility... it is the possibility of not depending on other people or on public transportation to come and go. It is a major change in my possibility to commute.”(Zezé)

“I am in a new phase now, changing jobs and I am a very anxious person and I end up eating and drinking too much. So, I decided to get this treatment to become motivated, to fit my clothes again and to feel better, to feel good about myself.”(Amy)

“To leave my mother’s house, to live with my boyfriend, to have our own place.” (Lara)

• According to the literature, goals are produced when current life circumstances are unsatisfactory, involving some kind of privation.

RESULTS

Unsatisfactory current situation

Goals

These unsatisfactory situations were found in the interviewees’ stories and, consistently, they were the reason for the goals to be generated.

“It is insane that the public transportation is the way it is and doesn’t guarantee my mobility with comfort… for instance, if I have to work in Brooklin (a neighborhood in São Paulo) or even in Itaim (another neighborhood in São Paulo), I will need three to four buses to get there and the same to go back.” (Zezé)

RESULTS

• Snyder (2000) explains that when one has an important goal, he/she produces pathways. The interviews showed that purchasing a product can become an important pathway. Here, these products were expensive, so being able to purchase them has become another goal for the interviewees. I call it a “purchase goal”.

• “I intent to buy a car…” (Zezé)

• “Recently I purchased an aesthetic treatment…” (Amy)

• “I decided to buy a motorcycle.” (Sérgio)

• “An apartment. I still don’t know where, it will depend on the job I will find.” (Lara)

RESULTS

• Consistent to Snyder (2000), to achieve these purchase goals, the interviewees’ stories showed that they produced a number of pathways. Because these goals were related to products they perceived as expensive, getting indebted showed to be a common strategy, in agreement with Fleming (2008).

Unsatisfactory Current

Situation

Pathways =

Purchase Goal

Important

and Uncertain

Goal

RESULTS

• According to Snyder (2000), one will only follow the pathways produced to achieve his goals when s/he has a sense of agency, which means that s/he believes s/he is able to do so. This sense of agency was also found in the interviewees’ stories.

“I don’t think about this possibility (not being able to pay the installment) because it’s a question of planning, organizing and compromising with that amount every month…” (Binho)

“I think that from the moment we buy it, we compromise to pay it. It’s a commitment, an amount we have to pay every month. If there is any emergency and we can’t pay, we have to renegotiate, but keep on paying it.” (Lara)

RESULTS

• This sense of agency seems to reduce their risk perception. In other words, because they see getting indebted as a pathway to buy the products they want and they have enough agency to pursue this pathway, the risks involving indebtedness seem smaller. The interviewees rarely talked about risks before being asked about it. When asked, they remembered that risks could occur.

“Yes, I think about them (the risks), but on this case, I didn’t worry because I was sure I could pay it.” (Binho)

“No, (I haven’t thought about the risks) because I know I’ll pay it. I’ll pay it. Different from other people who may think “no problem, I’ll think about it later.” (Sérgio)

RESULTS

• In addition to the sense of agency, positive images about the expected goal accomplishment also seemed to influence a reduction on risk perception, consistently to MacInnis and Price (1987). All interviewees showed positive images when they talked about their goals.

“At the coffee shop. I know I’ve never done it, but this image had come to my mind. I was having a coffee at Starbucks, near my house: “Ah, I wish I could have my notebook here. Using it, feeling comfortable, having a Frapuccino…” I haven’t done it yet because… I don’t know.” (Suzi)

“I imagine how I am going to decorate it, what it’s going to have, what I need to buy. I need to buy a lot of things. Now, I’m worried only with the essential, like stove, fridge, bed, bathroom, that’s all.” (Lara)

• Because goals, agency, pathways, importance and uncertainty were found on the interviewees’ speeches, it is presumable that when a consumer decides to get indebted, it is because there is hope.

“It is a certainty that things are going right, you rush in order to make sure things go the way you want.” (Zezé)

“I believe I will either get close to my goal or achieve it. I think it will be difficult to go beyond it. But if I reach my goal or get close to it, it’s already fine.” (Amy)

“I lack an easier income. I lack a more secure job, which pays me better. I believe that at the moment, I just have to look for it. We were talking about risks, right? What I think is that because the amount is large, there is always a risk. I’ll spend some years to pay it. Hope everything goes right…” (Lara)

RESULTS

RESULTS

• Finally, it could be noticed that when goals were achieved, hope gave place to satisfaction, in accordance with the literature (MacInnis and de Mello 2005, Almeida, Mazzon and Botelho 2007, MacInnis and Chun, 2007).

“It’s what I was expecting.” (Binho)

“I felt great satisfaction. It seems it’s a new child, say, for me to take care of because it was a good acquisition. It was worth buying it.” (Suzi)

“It was very good. Speeded things up, as I wanted it. It made my weekends easier as well. So, it was great.” (Sérgio)

DISCUSSION

Unsatisfactory Current

Situation

Pathways =

Purchase Goal

Important

and Uncertain

Goal

Agency +

Agency

+

Risk Perception

Hope

=

Satisfaction

• Hope exists when there is an important and uncertain goal caused by an unsatisfactory current situation, and there are pathways and agency to pursue this goal (Hamilton 1978, Clotfelter and Cook 1989, Lazarus 1999,

Snyder 1994, 2000, 2002, MacInnis and de Mello 2005, Bruininks and Malle

2006, Fleming 2008).

• This sense of agency can make a person underestimate the risks involving the goal and getting indebted appeared as a pathway to achieve it. At the end, when consumers achieved the desired goal, hope gave place to satisfaction.

• These results expand the current literature in two ways: (1) they integrate concepts from different theoretical schools, and (2) they integrate three constructs (hope, risk perception and propensity to indebtedness) in one theoretical model. They also corroborate to the linkage between hope and satisfaction, what has already been proposed by the literature (MacInnis and de Mello 2005, Almeida, Mazzon and Botelho

2007, MacInnis and Chun, 2007).

DISCUSSION

Presented at the International conference on

Qualitative Consumer Research & Insights

7 & 8 April 2011, Malta

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