I Volume 8, Number 1, 2009 p; k > '

"

ADVANCES IN

MANAGEMENT A publication of

The Department of Business Administration; University of /Iorin, /Iorin, Nigeria.

Advances

In

Management

Journal of

Department of Business Administration University of Ilorin, Ilorin, Nigeria.

A Publication of The Department of Business Administration

University of florin, Jlorin, Nigeria.

ISSN: 0795-6967

•

I

Advances in Management ii

Editor-in-Chief: Dr Jackson 0. Olujide

Deputy Editor-in-Chief: Dr. (Mrs.) S. L. Adeyemi •

Associate Editors: Prof. I. 0, Taiwo, Dr. J. A. Adeoti,

Prof. P. H. Oribabor, Dr. K. S. Adeyemi,

Dr. R. A. Olowe, Dr. M. L. Nassar,

Dr. P. Adeleke

Business Manager: Dr. J. A. Bamiduro

SUBSCRIPTION INFORMATION

. NIGERIA FOREIGN

- Naira Dollars Pounds Deutschmarks

Individual N500 $30 £25 35

Librarv N600 $35 £30 40

Students N400· .$25 £20 30 - L. __ ____ _

Subscription Procedures:

.All Subscribers should send certified bank cheques or bank draft to

THE BUSINESS MANAGER, Department of Business Administration

University of I Iorin, llorin, Nigeria.

Ad\'ances in Manage

NOTE FOF

1. Advances in M articles in any <

2. Article should

review articles

3. An abstract (in

4. Two hard copiE

be produced u

Please keep a

5. The cover pa~ which proof arE

6. As much as pc

be numbered c

7. References sh•

article. The pre

Hostage, 0 . M. (1! pp. 98-106.

Green. P. E. & Technique~

Liechty, M. B. & 1

satisfactior

8. Author publish•

review

9. All contributor

article appear!

Chief of any ct 10. All manuscript

ThE

Ad· De) P.f\

For advertisemen1

ThE Ad De, P.A

~deoti,

S. Adeyemi,

lassar,

N

utschmarks

35

40

30

bank draft to

ii Advances in Management iii

NOTE FOR FUTURE SUBMISSION OF MANUSCRIPTS

1. Advances in Management, a Journal of Unilorin Business School, publishes

articles in any area of Management. 2. Article should normally he about 4000 to 5500 words. Book reviews or

review articles should not be more than 1000 words. 3. An abstract (in English) not exceeding 200 words should be included. 4. Two hard copies and a disc copy are to be submitted. The disc copy should

be produced using Microsoft word or word perfect for window programme.

Please keep a copy of your paper. 5. The cover page should indicate the title, author's name and address to.

which proof are to be sent 6. As much as possible, footnotes should be avoided. Very crucial note should

be numbered consecutively and placed at the end of the article. 7. References should be arranged alphabetically and placed at the end of the

article . The preferred format is exemplified below. Hostage, 0. M. (1975): "Quality Contro~ in a Service Business" HBR. July-Aug.

pp . 98-106. Green. P. E. & Carmone, F. 1.: Multidimensional Scaling and related

Techniques. Boston: A. Ally & Bacon 1970. Liechty, M. B. & Churchill. 0. A., (1979): Conceptual insights into consumer

satisfaction with services, AMA proceedings pp. 509-515. 8. Author publishers are invited to send any book they would like the Journal to

review 9. All contributor will receive a free copy of the issue number in which their

article appears. They should therefore endeavour to inform the Editor-in­

Chief of any change in their address. 10. All manuscript for publication consideration should be sent to,

The Editor-in-Chief Advances In Management Department of Business Administration University of /Iorin. P.M.B. 1515, form, Nigeria.

For advertisement rate please contact:

The Business Manager: Advances In Management Department of Business Administration University of !Iorin,

P.M. B. 1515, /Iorin, Nigeria .

Advances in Management iv

CONTENT

Paae

1. Assessment of financial sector reform drivers on bank credit supply

Akinleye G. T. and H. T. lwarere ... .... ..... ............. .. .. . .. ... .

2. Environmental Factors of Business in Nigeria: An Analysis of

Strengths, Weaknesses, Opportunities and Threats (SWOT Analysis)

DGE. Mbaegbu and M. I. Ogbeifun....................... . ... ... 16

3. · The effect of humor and goal setting on individual brainstorming

performance - M.A. Adegboye ...................................... 30

4 . .,..,... Equity Theory: Another precursor of ·;quality of life marketing

Rowland E. Worlu ... , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . 40

5. Entrepreneurship Education in Nigerian Universities:

Implementation and W<;Jy Forward - Dr. (Mrs.) R. 0. Oduwaiye ... 60

6. The impact ot customers service management in Nigerian

Banking Industry - Mrs. Aremu, Moriam Ad eye mi.... .......... . 68

7. Concepts and Issues in Strategic Planning

Sofoluwe, Abayomi Olu. ...... ..... ... .. . .. .. . . ... ... .. . . .. .. . .. . . . .. 83

8. An Evaluation of Products Innovation among Nigerian

Commercial Ban.ks- Abdulraheem Abdulrasheed & Fatima Etudaiye-Muhtar...... .. . . . ... . .. . . ... 94

9. Corporate Governance and Productivity growth of Listed

Non-Financial Firms in Nigeria. Obembe, 0.8. (Ph.D), Adebisi, A.S & Olofin O.P. ..... .. . ... 102

10. Economic Analysis of Household food demand in South Western

Nigeria- Olorunfemi Sola, P.hd... .. . .. . ... .. . . . . . .. . .. . .. . .. . . .... 119

11. Product Quality, Cost Position and Business Performance:

A Test of some key hypothesis O.U.Y. Omeiza & F. Olawore....................................... 138

12. Th,e effect of unemployment on economic growth in Nigeria

Dr. O.U.Y. Omeiza & G.N. Atoyebi. .... ................ ... ... .. .. . '165

Advances in Management

ASSESSMENT 01 DRIVERS ON BJ

AKINLEYE G.T. Af' Department of Accountinf

1:::::::::::::,:::::::::::;:;:;:;:;:;:::::::::::

Abstract

The study a implemented betv.

supply. It utilized

the period 1986 tc exchange rate, ca

obtained from thE of Nigeria (CBN).

examined using ;

the reforms driv

Vector Error Com

The findings variables examin behind changes i exhibited some d significant (t =7.9 0.05) respectively

The cone/usia economic policy 1

often, failed to W•

countries /ike N adopted with rr prevailing socia1 country.

ADVANCES IN MANAC Vol. 8, No. 1 (2009) (A Journal of Departmem

.·1dl'Unces in Managellll!lll 40

EQUITY THEORY: ANOTHER PRECURSOR OF QUALITY OF LIFE MARKETING

ROWLAND E. WORLU Department of Business Studies Covenant University, P.M. B. 1023, Ota, Ogun State, Nigeria. E-mail worlurek@yahoo.com

1:::;:;:;:;:;:;:;:;:;:;:;:;:;: ::;:;:;:;:;:;:;:;:;:;:;:;:;:;:; :;: ;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:;:; :;: ;:; :;:;: ;:; :;: ;:;:;:::1

Abstract

Lee and Sirgy (2004) noted that Quality of Life (QOL) marketing is a concept originating from a set of philosophical foundations in marketing thought. These foundations, according to them, are societal marketing, relationship marketing, and stakeholder theory. But our present study captures "Equity Theory" as another critical foundation of QOL marketing. Confirmatory factor analysis and structural equation modeling are used to substantiate the relationship between Equity! Theory and QOL marketing. The research findings, which are based on a survey of over 300 QOL marketers, suggest that Equity theory explains a significant proportion of the variance of the degree of QOL marketing programme implementation. The paper concludes with the implications of these findings with respect to the explanatory power of the equity theory in the context of QOL marketing strategy.

Keywords: Philosophical Foundations, Quality of Life Marketing , equity theory, precursor.

Introduction

In view of the profound impact of marketer's decisions on the well-being of consumers and other stakeholders , it is important for firms to have specific guidelines to develop and implement marketing strategies in socially responsible ways (Robin and Reidenbach 1987). This paper therefore builds on the research dealing with the concept of QOL marketing . QOL marketing has been defined as marketing practice designed to enhance customer well-being while preserving the

ADVANCES IN MANAGEMENT Vol. 8, No. 1 (2009) . (A Journal of Department of Business Administratton, University of !Iorin, !Iorin, Nigeria .)

E(jllitr TheOJy: Anotlu

well-being of othe1 employees , the local

The concept variety of contexts . product development in social marketing discussed how the cc

Guided by th Sirgy and Su (1998)' (an individual-level <

make decisions gui construct.

The major ot QOL marketing by ~

structure of QOL ma1 marketing in a nom• empirical studies in practical guidelines 1

marketing programm being of the firm's otr

THEORETICAL FRAJ

QOL marketi foundations in mark (e.g. Kotler 1986;201 and Oh, 1987; Sh stakeholder, theory 1

we can now considE turn .

QOL MARKETING J

Kotler 2002 t of fundamental ma1 concepts: productior marketing orientatior

The producti' that are available ar energy to improving posits that "consurr performance, and fe<

Therefore th

..to

F QUALITY

'a. Ogun State,

'rketing is a 1dations in

them, are /der theory. ther critical 1alysis and :mtiate the '<eting. The er 300 QOL

significant marketing with the

atory power egy.

ng, equity theory,

the well-being of to have specific ICially responsible ; on the research , been defined as ile preserving the

/Iorin, Nigeria.)

Equity The01y Another Precursor oj"Qualit\ · ofL(j"e /1/orketing ..fl

well-being of other stakeholders (e.g. stockholders, distributors, suppliers. employees, the local community and the environment) (Sirgy 2001 ).

The concept of QOL marketing has been described and discussed in a variety of contexts. For example, Sirgy: Samli. and Meadow (1982) proposed a product development model guided by the notion of QOL marketing. It was applied in social marketing (Singy, Morris and Samli; 1985). Sirgy and Lee (1995) discussed how the concept of QOL marketing evolved in marketing thought.

Guided by the concept of QOL marketing, Lee and Sirgy (1995): and Lee, Sirgy and Su (1998) developed the concept of International quality of life orientation (an individual-level construct describing the marketing manager's disposition to make decisions guided by a QOL marketing philosophy) that validated this construct.

The major objective of this article is to build on the research dealing with QOL marketing by proposing the inclusion of 'equity theory' in the philosophical structure of QOL marketing. The ultimate goal is to understand the concept of QOL marketing in a nomological sense. This perspective is expected to guide future empirical studies in QOL marketing. In addition, it should provide marketers with practical guidelines on how to facilitate the development and implementation of marketing programme that enhance customer well-being while preserving the well­being of the firm's other stakeholders .

THEORETICAL FRAMEWORK

QOL marketing is a concept that originated from a set of philosophical foundations in marketing thought. These foundations include societal marketing (e.g. Kotler 1986;2002). relationship marketing e.g. McNeil 1980: Dwyer. Schurr. and Oh, 1987; Sheth and Parvatiyar 1994; Morgan and Hunt. 1994) and stakeholder, theory (e.g. Carroll 1989; Evan and Freeman 1988; Freeman 1984 ). we can now consider the-substance of each of these philosophical foundations in turn.

QOL MARKETING AS A CONCEPT EMBEDDED IN SOCIETAL MARKETING

Kotler 2002 has long argued that marketing thought can be viewed in terms of fundamental marketing strategies. He described the following philosophical concepts: production orientation, product orientation, the selling orientation. the marketing orientation, customer orientation . and societal marketing orientation.

The production orientation holds that "consumers will favour those products that are available and affordable; and therefore the organization should devote its energy to improving production and distribution facilities" The product orientation posits that "consumers will favour those products that offer the most quplity, performance, and features.

Therefore the organization should devote its energy to making product

A d\'(11/Ces in Management 42

improvements. The selling orientation holds that 'consumers will not buy enough of the organization's products unless the organization undertakes a 'substantial selling and promotion effort". The marketing orientation holds that "the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors'. The customer orientation is a management orientation which requires firms to shape separate offers, services and messages to individual customers (Kotler 2002).

Kotler further defined societal marketing as management orientation which holds that firms should act in the long-run best interests of consumers and society.

This definition is in terms of quality of life and requires the organization to determine the needs, wants and interests of target markets and to deliver satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer's and the society's well being.

In the opinion of Lee and Sirgy (2004 ), the societal marketing orientation posits that marketing success is likely to be mostly based on serving the many stakeholders of the firm and balancing their demands. The societal marketing concept calls upon marketers to consider the ethical ramifi~ation of their marketing decisions. Today consumers increasingly look for signs of corporate citizenship and expect that business firms conduct themselves ethically and responsibly in order to preserve or enhance the consumer's and society's well-being (Kotler, 2002).

The focus here is the well-being of consumers and various stakeholders of the firm. This is where QOL marketing fits in (Sirgy and Lee, 1995). QOL marketing is a strategy that focuses on enhancing the well-being of target consumers while preserving the well-being of all other stakeholders of the firm that are affected through the process and/or outcomes of serving target consumers.

Marketers adopting a QOL strategy attempt to maximize the welfare of their customers without adversely affecting the well-being of the stockholders. distributors, suppliers, employees and the local community in significant ways (Sirgy and Lee 1995, 1996). QOL marketing is therefore a marketing strategy founded on the philosophical concept of societal marketing.

QOL MARKETING AS AN ETHICAL EXTENSION OF RELATIONSHIP

MARKETING

Relationship marketing is a paradigm in marketing thought that focuses on the development and maintenance of a quality relationship between exchange partners for mutual benefits. Relationship marketing refers to all marketing activities directed toward establishing, developing, and maintaining successful relational exchanges (Morgan and Hunt, 1994 ). In other words, relationship marketing is an integrated effort to identify, maintain, and build up a network with customers and various stakeholders for mutual benefits over a long time.

l:"!JIIill lhcmy. :lnothL

The conceptt trust, commitment. t Ganassan 1994: ShE

QOL marke relationship with vari• conce rn s into marke long-term relationshi the delivery of prod1 and satisfaction.

Examples of ethics for the organi organizational cultur criterion. setting me: (Sirgy and Lee 1996

It is imperat concept, whereas economic dimensic marketing argues th profitability (e.g Col al , 1999). In contra~ focused exclusively effects resulting fro1 that integrates the , does this by combin

The focus c relati onship with ct survival and grov. relationship markel marketing can be n

QOL MARKETING

The stakeh relationships . This with many exchar functional departrr society (e.g . freen 1991: Morgan and 1997). StakeholdE corporate social rE

A firm's m To this end . mar~

42

JY enough of tantial selling to achieving rget markets iciently than 1ich requires 11 customers

1tation which nd society.

Janization to j to deliver a way that

J orientation g the many tl marketing ir marketing zenship and yin order to 02).

<eholders of L marketing Jmers while 3re affected

!fare of their :ockholders. ways (Sirgy founded on

focuses on 1 exchange 1g activities 11 relational <eting is an tamers and

I:"!Jllill Iheorr. :lnothcr Pn·cunor o/Quu!itl n{/.ij~· .\!urkl·ting -L\

The conceptual domain of relationship marketing includes concept such as trust, commitment, benevolence. and satisfaction (Dwyer. Schurr. zmd Oh. 1987: Ganassan 1994 : Sheth and Parvat1yar 1994: Morgan and Hunt 1994 )

QOL marketing focuses on establishing and reinforcing lonS,J-tcrm relationship with various stakeholders by integrating ethical and socially responsible concerns into marketing programmes. QOL marketi ng guides the f1n11 to establish long-term relationships with target consumers by enhancing quality of life through the delivery of products. QOL marketing fosters trust . commitment. benevolence, and satisfaction.

Examples of QOL marketing efforts include the development of a code of ethics for the organization. the integration of ethical values and guidelines into the organizational culture, inclusion of ethical behaviour as a performonce evaluation criterion, setting marketing objectives guided by ethical concerns. among others (Sirgy and Lee 1996; Sirgy. Samli and Meadow 1982, Worlu, 2006).

It is imperative to note that relationship marketing is largely an economic concept, whereas QOL marketing is a moral concept that incorporates the economic dimension of relationship marketing. put otherwise , relationship marketing argues that customer satisfaction, trust. and commitment are essential to profitability (e.g Collin, 1993: Kalwani and Narayandals. 1995; Jap, 1999: Naidu et al, 1999). In contrast, QOL marketing argues that the goal of QOL marketing is not focused exclusively on the firm's financial performance but also on the societal effects resulting from such practice. Therefore. QOL marketing is a moral concept that integrates the economic concerns of the firm with society's broader concerns. It does this by combining elements of societal marketing and relationship marketing.

The focus of relationship marketing has been on how to establish long-term relationship with customers to secure repeat husinc~s ;md therefore ensure the survival and growth of the firm. In other v;ords. OOL m<1rk 1 ·t1ng builds on relationship marketing by bringing in business cthcs mt<J the p1cturc. Tl1us. QOL marketing can be regarded as an ethical extension of rel<1t1 ons hip lll<lrkcting.

QOL MARKETING IS A CONCEPT EMBEDDED IN STAKEHOLDER THEORY

The stakeholder view of the firm holds that the firm operotes in a network of relationships. This means that the firm engages in v mous ex .h~m rJc relatiOilSilips with many exchange partners including suppliers. customers. competitors, other functional departments within the organization. and various stakeholders in the society (e.g. freeman 1984, Carrol 1989, Evan and Freeman. 1988 Good Paster 1991; Morgan and Hunt 1994: Robin and Reidenbach 1987: Wheeler and Sillanpaa 1997). Stakeholder theory is grounded in the literature of business ethics and corporate social responsibility (Carroll 1989: Frederick, Davis. and Post 1988).

A firm's marketing decisions affect the wEll-being of v8rious stakeholders. To this end. marketing's stakeholders. can be c!ass1fied as external stakeholder.

. ·/d\'(/nccs in ,\/anagcment 4-l

internal stakeholders, and distal stakeholders (Sirgy 2002). Internal stakeholders are other functional departments and business units within the firm-other than the marketing department. External stakeholders refer to stakeholders outside of the firm, upon which the survival and growth of the fir{l'l depend (e.g customers. shareholders, distributors 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 and advocacy groups. government agencies). For marketing, customers are considered to be the primary external stakeholders. Marketers' primary responsibility is to meet the demand of their customers and enhance their quality of life. But because the firm's marketing decision may adversely affect the well-being of other external stakeholders, it is important that marketing decisions are made in ways to m1nimize possible adverse effects influencing the well-being of employees, distributors. suppliers. stockholders, and so on.

In other words. the primary stakeholder of OOL marketing is customer group. QOL marketing focuses on the enhancement of customer well-being, and the preservation of the well- being of the firm's other stakeholders.

EXPLAINING EQUITY THEORY

Equity theory holds that the feeling of satisfaction by an employee may arise from the belief that he has been equitably rewarded for his labour and services.

The mechanism for arriving at this feeling is given by Adams ( 1972) and Jacques (1961) in their equity theories of pay. According to the equity theory, an employee is not so much concerned with the absolute amount of money paid out to him but with perceived relationship of what he gets vis-a-vis what others (i.e his equals or counterparts) receive.

The feeling is that if an employee receives the same salary with his referent who possesses the same job in-puts (e.g. education. skills, and experience) and achieves the same amount of .output. he is most likely to feel a sense of equity. In other words, if the ratio of his outputs to inputs is equal to the ratio of output to the inputs of the relevant other, he will feel satisfied if he receives the same amount of pay with the relevant other, i.e. have a sense of equity.

This can be shown thus:

Equity = 0~- = 0~ "" "(i)

Where

A

B

lA 18

= The employee

= The Relevant Other

On the other hand, if the ratio of outputs to inputs of Mr. A is higher than that

.

Equity Theory: Anothe .

of Mr. B, and they are

~ = Qg

lA Is

(Feeling of dissatisfac

Here, Mr. A is though the ratio of hi~ of inequity in pay can

Though the e between the emplo] extrapolated to enhar incidences of cogniti'Y (Worlu, 2006).

Equity theory, with absolute of amo1 the perceived relation similar product at the

The feeling is referent others in thl time, atmosphere, etc if the ratio of his deri utility to the buying c sense of equity) and

Equity - =

Where:

DUA =Derive

BCA = Buyin£

DUs =Derive

BCs = Buyin~

Conversely, higher than that of M

DU~ >

BCA

(Cognitive dissonanc

As Worlu (2C price. Such percepti

'). Internal stakeholders 1 the firm-other than the eholders outside of the epend (e.g customers, rs refer to stakeholders rectly through external :y groups. government 1e the primary external !t the demand of their e the firm's marketing ~rna! stakeholders, it is 1imize possible adverse suppliers , stockholders,

marketing is customer stomer well-being, and lders.

an employee may arise bour and services.

by Adams ( 1972) and J the equity theory, an nt of money paid out to ris what others (i e his

salary with his referent , and experience) and ~I a sense of equity In 1e ratio of output to the :;s the same amount of

r. A is higher than that

Equity Theory: Another Precursor of Quality of Life Marketing 45

of Mr. B, and they are paid the same salary Mr. A will feel dissatisfied i.e.

...... (i)

lA Is

(Feeling of dissatisfaction occurs)

Here, Mr. A is dissatisfied because he receives the same pay as Mr. B even though the ratio of his output to input is greater than that of Mr. B. Such perception of inequity in pay can lead to serious tension (Banjoko, 2002).

Though the equity theory is originally intended to improve the relationship between the employer and employee in matters of compensation, it can be extrapolated to enhance the quality of the QOL marketing practice and reduce the incidences of cognitive dissonance among customers after a purchase experience. (Worlu, 2006).

Equity theory, in this context, shows that a buyer is not so much concerned with absolute of amount of money paid out as a price of a product/service but with the perceived relationship of the utility he derives vis-a-vis that of others who bought similar product at the same price or within the same purchase context.

The feeling is that if a consumer derives the same amount of utility with his referent others in the same buying context (e .g. price, seller, product, attributes, time, atmosphere, etc), he is most likely to have a feeling of equity. This means that if the ratio of his derived utility to his buying context is equal to the ratio of derived utility to the buying context of the relevant other, he will feel satisfied (i.e. have a sense of equity) and this means cognitive consonance:

Equity ' = DU~ = DU~~ ...... (iii)

Where:

BCA BCs

DUA = Derived utility of consumer A

BCA = Buying context of consumer A

DU8 = Derived utility of consumer B

BC8 = Buying context of consumer B

Conversely, if the ratio of the derived utility to buying context of Mr. A is higher than that of Mr. Bon a product/service, B will feel dissatisfied i.e

DU~ > DU~~ ....... (iv))

BCA BCe

(Cognitive dissonance occurs).

As Worlu (2006) indicated, this is even worse when Mr. B has paid a higher price. Such perception of inequity in buying outcomes lead to serious tension. The

;/dl'(mces in Management 46

question then is: How can such tension be resolved? The solution lies in his creating an equitable situation for himself. This can assume any of the following dimensions:

a. avoiding a repeat purchase of the product

b. dissuading others from buying the product

c. creating an image problem for the seller

d. canvassing for a mass action against the seller and his product.

Thus QOL marketing focuses on the enhancement of cognitive consonance of the consumer by ensuring that customers are equitably treated in every marketing situation.

THE RELATIONSHIP BETWEEN EQUITY THEORY AND QOL MARKETING STRATEGY

The importance of QOL marketing in the increasingly turbulent market place is evident from the attention devoted to studying this phenomenon in the last two decades (Sirgy, 2001; Sirgy, Samli, and Meadow, 1982; Sirgy, Morris, and Samli, 1985; Sirgy and Lee, 1995; Lee, Sirgy and So; 1998; Sirgy 1996; Lee and Sirgy, 2004; Worlu, 2006). The development of optimal programmes for QOL marketing is considered of vital interest to marketers who view QOL marketing operation as a means of improving competitive position to ensure the firm's survival and long-term viability in a highly dynamic market place. Thus, in order to survive the threats of consumerism in today's highly competitive business environment, the marketer must design QOL Marketing Strategies and overcome market threats (Worlu, 2006).

The contentious issue in the marketing literature concerns the extent to which the elements of the marketing programme (i.e. product, promotion , price, and distribution) which Lee and Sirgy (2004) identified as the marketing beneficence should be equitably handled to fit the characteristics of the various markets and create satisfaction for the customers.

The other aspect of the marketing programme concerns the preservation of the well-being of the firms other stakeholders (i.e. employees, stockholders, distributors, suppliers, local community, and the local environment). Lee and Sirgy (2004) called this marketing nonmaleficence.

These two aspects have been reflected in the definition of QOL marketing. For the avoidance of doubt, QOL marketing is the business mechanism that plans, prices, promotes, and distributes consumer goods for the purpose of enhancing customer well-being (i.e marketing beneficence) while preserving the well-being of all other stakeholders (i.e. marketing nonmaleficence).

To reiterate, the philosophy of QOL marketing calls for the development and implementation of marketing programmes designed to enhance customer well -

Equity Tlleot}': Anotlu

being whi le preservir capture the relations! to identify specific c show how equity th (product, price, dist dimensions of QOL

46

1lution lies in his { of the following

duct.

1itive consonance treated in every

lRKETING

lent market place m in the last two lorris, and Samli, 5; Lee and Sirgy, )OL marketing is 19 operation as a val and long-term ive the threats of nt, the marketer lts (Worlu, 2006).

·ns the extent to notion, price, and ~t i ng beneficence Jus markets and

e preservation of :s, stockholders, t). Lee and Sirgy

f QOL marketing . anism that plans, >se of enhancing the well-being of

development and ~ customer well -

Equity Theory: Another Precursor o(Qualir_v of Life Marketing 47

being while preserving the well-being of all the affected stakeholders. Thus, to fully capture the relationship between QOL marketing and equity theory, we will attempt to identify specific dimensions of beneficence and nonmaleficence marketing to show how equity theory interfaces with the four marketing mix decision areas (product, price, distribution, and promotion). Within each cell, we identify specific dimensions of QOL marketing.

EQUITABLE DECISION AREAS IN MARKETING ::t.. 3-§

1 Oomensoon

Market beneficence

marketing Nonmaleficence

I Source:

CD N X 0 {i)O ::I 0> ..... ';-'

(J) (J) -:J ~0 CD C :J-

- oc. -;Jil-OJ 0 c. ..... -. CD Ul CD -. -· X Ul 'gOJ(D -· 3 . ~"£~ ~_CD Q =-::4. ~-

O"I CD 0 cr~ OJ CD -< OJ CD ::I -. (') -CD Ul c. co

E;;

Product Pnce Distnbution Decision Decosoon Decosoon

F1rm makes eqUitable deCISIOn to

Des1gn and develop pr1ce products D1stnbute products in Products that can afford ably channels of d1stnbut1on significantly enhance to max1m1ze access1b1l1ty quality of life target to consumers consumers w1thout

Promotoon Decosoon

Engage 1n providing target get consumers w1th qual1ty and quant1ty mformation about product costs and benefits , and

'"' ~ :-:

>

~ Ct:;

~ ~

1eopardizmg the1r health Engage m providmg target consumers and safety w1th qualoty and quant1ty information

about how to use the product to denve max1mum benefits and mmomoze health risks

Des1gn and develop AVOid hurt11 ,g Mmim1ze health Educate non-consuming products that are safe stock holders. and safety nsks to publ1c abc Jt health to non-consuming m1n1m1ze logistiCS and and safety publ1cs and f1nan c1al loss to transportation nsks assoc1ated I manufacture products d1stnbutors due employee and m1n1m1ze with consumpt1on m ways that mmomize to lower marg1ns. damage to loca l (assummg there are health health and safety avood hurtmg competition d1stnbutors . retailers and and safety nsks to nsks to employees unfaorly that may be commun1ty that may nonconcum1ng public) ,

predatory pncing, and occur as a result of and commun1cate in a avood hurtmg compet1t1on establ1sh1ng the form 's manner that does not remforce to the extent that own channel of negat1ve stereotypes busmess failure would distribution and matenal1sm result m s1gn1ficantly decreasmg the quality of life on local commun1t1es

- ------- ----· -· -

Adapted from Lee and Slfgy (2004)

.L­::.0

OJ ::I OJ (') :T ::I 0 ::I c OJ c.-c.Ul-'(J)crro ::;· CD CD 3

tO OJ CD CD '< cr· -. - - _. (J)

0.. OJ I :T -o (') 3 (f) s· :T :J :::!1 _.. c )> :T :T 3 (') c 3 CD _. -o c. t:., CD~~ CDOCOJC(')CDCD

3-. CD::J(QCDCDOJ O::JOJC. co-.0 CD ~ ::J"' .. Ul~-,-- OJ co=.OJ ::JUl_, co(') :;:

-.:::· :-i - ;::+ 0 ;;:o;- C - Ul- W - -· '< .0 ;;:o;- Ul (') ;;:o;- CD 0> C. (ii" -.

NCDm­o-coCD o 0 mce ~(J)-·

._,CD

~

ct> ~ :::,- Q_ :;::· 3 CD _. C. 8 5 ':-' ,.... _::J C. C CD c -. CD CD - . C -· ~ o..~cn o~CD (i)coCD ::::1 OJ ::J i5 o OJ OJ 3.§ (i)3 (l)~g :--3 o- ct> 3 ~ '< -. (il ~ :T Ul ::I g :J '< 00 ;::;: C. 0 CD C C. s· --i c~r Ul Ul )> ~ '-<:::Q'o ::;--.Ul ··CDcc.,, 3'<=i:OCilootn:J'<::T (J) ~ S -, (i3 tO ~ OJ 5· - ~- Ul 8 ~ ~ r OJ 0 CD r -· C < < ~ OJ OJ ~ Ul ~

-. en o- "' :J ~ (J) ,... S: ::;· ::J ~ Ul OJ CD 3 ~ ::: CD 3 ::J (J) ~ Q?.. CD ::J ..... (') o ::ro . CD o-... '<CD ~CD3tOCD .......... OJ"'::;; OJ c

Ul Ul (') .._ .0 ""0 C. ~ CD ::I • ,.... O o· -. -. CD ::I ' OJ ::I 3 ,.... c OJ C. OJ - ~ ::t.. g- -o ~ ::r c: o CD Ul CD Ul -o '< 3 ::::1 ~ "' S!1 . £ -. '< OJ i5 CD CD r ::J c. ::::1 ::s CD .._ .._ ;:::;: - 0 = cO. N "' C -, CD OJ CD tO 0 ;;:o;- < -. - CD Ul C

!:._ (') 0 ::::; OJ ::r CD "' 0" -· -. 0 =. =. ::I - -· CD <: ;;:o;- '< 0 CD -· 0" 5· S.

-:J CD

-~ ::;· ;::;: 3 ::r

C. ,.... 3 Ct> Q:: ~ :T ~ :!. Ul 3 = ~ Ul < ::I 5 ""0 ::I §f OJ S. CD - OJ · '§ CD C1:> -= · "' -~ m a Ct> • CD ::I - -o (') Ul - 3 CD tO (') CD ""0 ,,... ':< CD OJ :J -'- -· -· --i "'I

'" to ru ,..... ...,. OJ O _ co ...... , ::~ _ (jl CD ::::1 <D_ ;il ::I OJ ~

'""' 0 QJ

~~ c:

c: :J

;;; E "= E -o 0 0

ClJ g 0 (/)

Equity Theory: Another Precursor of Quality of Life Marketing 49

As shown in Table 1, the QOL marketing philosophy dictates that product decisions should be in a manner that encourages firms to design and develop products that can significantly enhance the quality of life of target consumers (Sirgy, 1996; Sirgy and Lee. 1996; Sirgy, Samli and Meadow, 1982, Worlu, 2006).

There are a number of products in the market that have absolutely redeeming value to the consumers some pharmaceutical products developed and marketed over the years do not work, for example, flour is packaged as capsules by unscrupulous marketers. These products fail to enhance the quality of life of consumers in any way. They are 'product frauds'.

QOL m?rketing calls for the development and marketing of products that make a difference in people's lives, i.e these products should significantly enhance the quality of life of people. Firms are required to test these products to ensure that they do make significant contribution to the quality of life of target consumers. Again, QOL marketing concept admonishes marketers not to release their product? until they are relatively certain about the safety of their products (cf. Menezes 1993).

In relation to making product decisions that preserve the well-being of the firm's non-customer stakeholders, we assert the following: it is important to study health and safety risks associated with product consumption not only in relation_ to the consuming public but also in relation to the non-consuming public. These include the firm's employees who are exposed to these products (Lee, Sirgy, and Su, 1998; Menezes, 1993). Accordingly, the degree .of equity exhibited by marketers in designing and developing products that enhance the well-being of customers as well as preserving the well-being of other stakeholders should be positively related to the amount of utility derivable from the product. Thus, we state the following hypothesis:

H1 : The more equitable the marketers are in designing and developing products that are safe for both the consuming and non-consuming public, the greater the utility derived by the customer.

With respect to pricing decisions, enhancing customer well-being means that the firm should make every effort to make the price affordable to target customers (e.g. Mandell, 1975; Maynes 1976; Ortmeyer, 1993; <6irgy - 1996; Sirgy and Lee, 1996; Kotler, 2003). If the price were non-affordable, then the firm would not be able to serve the maximum number of consumers in the target market (Lee

and Sirgy, 2004 ).

However, setting a price affordable to the majority of the target consumers should be balanced with the need to preserve the well-being of the firm's affected stakeholders (e.g. Ortmeyer, 1993; Sirgy, 1996, 2001; Sirgy and Lee, 1996; Worlu, 2006). For example, the shareholders may feel hurt if the firm lowers prices to the extent that significantly reduces returns on investment. Again, the pricing system

Advances in Management 50

should not reduce the distributor's chances of fair profit. This means that the degree of equity exhibited in pricing the firm's product should be positively related to the well-being of customers and other stakeholders. This leads us to the following hypothesis:

H2 The more equitable the prices of the prosucts are to both customers and other stakeholders, the greater the utility derivable from the product.

In the case of distribution decisions, the QOL marketing concept encourages marketers to distribute the firm's products as widely as possible. The goal is to maximize target consumer's accessibility to the firm's products (Sirgy, 1996; Sirgy and Lee, 1996). Making the product easily accessible increases the likelihood that the product will be bought and consumed by those consumers who can derive the greater benefits from it (Lee and Sirgy, 2004 ).

On the other hand, the QOL concept sensitizes marketers to the fact that distribution decisions have to be tempered by considering the effects of those decisions on the health and safety risk of the firm's employees involved with logistics and transportation (Sirgy. 1996, 2001; Lee, Sirgy, and Su. 1998). The more extensive the channel, the more likely accidents would occur in shipping, threatening the health and safety of those logistics employees (Cespedes, 1993 ). Also, the more extensive the channel, the more likely that local retailers are likely to be displaced affecting the quality of life of the communities in question. The smaller the community, the greater the impact of displacement on the community quality of life (Cespedes, 1993). Consequently, the degree of equity exhibited in making decisions on the distribution of the firm's products should be positively related to the well-being of customers and other stakeholders. This leads to the following hypothesis:

H3: The more equitable the distribution decisions of the firm's products are to both customers and other stakeholders, the greater the utility derivable from the product.

With respect to promotion decisions, the QOL marketing concept reinforces the notion that customer's well-being can be enhanced if they are provided with both quality and quantity information about the firm's products, costs and benefits (Sirgy, 1996 2001; Sirgy and Lee, 1996). Customer's well-being can be enhanced further if they are provided with quality and quantity information about how to use the product to derive the maximum benefits from the product as well as knowing how to avoid harm and injury.

Doing no harm is part of the spirit of QOL marketing. Consistent with that spirit, marketers are advised to make a concerted effort to educate the nonconsuming publics about any potential adverse effects resulti~g from product consumption (health and safety risks, environmental pollution, etc) (e.g . Drumwright, 1993; Sirgy, 1996, 2001; Sirgy and Lee, 1996; Smith and Quelch 1993). Finally, marketers are encouraged to communicate the information in ways

Djuit\' Theory: Ana:

that would be le Murphy, 1993). A product should be stakeholders. This

H4. The mo customer and othe

EQUITY T

Figure 1: The'

RESEARCH METH

The result: actively engaged I serve as a repres Nigerian industrial

Nine partie units and departri departmental inpu the interface of eq

Further to from the 10 majo1 Benin, Enugu , Cal

Development of

To measL studies (Klein anc 2001; Jain, 1989: respondent's und1

The meas were chosen on Montgomery, 20( Shoham, 1999). different) was usE

50

that the degree

1 related to the o the following

customers and

:eting concept ; possible. The roducts (Sirgy, increases the

onsumers who

to the fact that fects of those

involved with ~98). The more

r in shipping, >pedes, 1993). ~rs are likely to 1n. The smaller

unity quality of ted in making { related to the

the following

-:;ts are to both n the product.

~ept reinforces provided with

s and benefits 1 be enhanced

'ut how to use ~II as knowing

stent with that educate the

1 from product n, etc) (e.g. 1 and Quelch 1ation in ways

Djuitr Theory: Another Precursor of Quality of Life Marketing 51

that would be least damaging to the public (Drumwright. 1 993; Laczniac and Murphy, 1 993). Accordingly, the degree of equity exhibited in promoting the firm's product should be positively related to the well-being of the customers and other

stakeholders. This leads us to the following hypothesis:

H4. The more equitable the promotion of the firm's product is to both the customer and other stakeholders, the greater the utility derivable from the product.

I I 1 Product decision

H 2+ I 1----------j p . d .. I nee eCISIOn I

EQUITY THEORY H 3+ I I

f----------~ Distribution decision

H4+ I L _________ j-------~ p t' d .. I ramo iOn eCISIOn I F1gure 1: The conceptual Model.

RESEARCH METHODOLOGY

The results reported here are based on a study of Nigerian companies actively engaged in QOL marketing, 50 of these firms were purposively selected to serve as a representative sample from the list of 79 'Gold Award Winners' of the

Nigerian industrial and Exporters Directories (2001 , 2002)

Nine participating manaoers' were selected from ench of the 50 companies' units and departments. This selection process was designed to reflect uniquely departmental input, identification and evaluation of OOL marketing philosophy, and

the interface of equi ty theory .

Further to the above. a sample of 424 consume rs was 1·andomly selected

from the 10 major cities in Nigeria (i.e. Kana. Kaduna. Jos, Abuja lbadan. Lagos.

Benin, Enugu , Calabar. and Port Harcourt).

Development of Measures

To measure equity theory. a seven-item measure adapted from previous

studies (Klein and Roth, 1990; Theodosiou and Katsikeas, 2001; Clark and Pugh , 2001; Jain, 1 989) was used to capture the perception of differences between the

respondent's understanding of equity and QOL marketing.

The measures used to assess the equitability of OOL marketing programme were chosen on the basis of the literature surveyed (Styles. 1998; Lages and Montgomery, 2004; Cavusgil and Zou, 1 994; Zou . Andrus and Norvell, 1 997; Shoham, 1 999). In both cases a five-point scale from (very similar) to 5 (very

different) was used. See Table 2 below ·

Advances in Management 52

Table 2: Confirmatory factor Analysis

Constructs Regression Standard ized t -value

and Items Weights . Load ings

Product {CR* = .92; VE ** = .70

Products qual1ty 0 870 0.793 15.329

Product dcs1Dn 0 958 0.845 16 538

Product w.~rrant1es 0.945 0.883 17.777

Product labcl1ng 0.885 0.810 15.534

Products brand name (set to 1) 0.837

Price {C R = .83; VE = .55)

Price discount pol1cy 0.897 0.728 10.917

Margins 0 921 0.773 11 693

Cred1t concession 0 941 0.755 11 .352

Payment security (set to 1) 0.720

Promotion {CR - .95; VE - .81)

Advertising theme/message 1 .149 0.935 18.461

Advert1s1ng & promot1on content 1.171 0.942 18.661

Advertising med1a strategy 1.173 0.949 18.835

Sales promotion tools 1.028 0.855 16.171

Advertising & promotion budget s1ze (set to 1) 0.804

Distri buti on {CR = 91 ; VE ::::;. .72)

Channels of distribution 1.156 0.848 15.843

Control over distribution channels 1.163 0.887 16.747

Transportation strategy 1.040 0.824 15.211

Budget for distribution (set to 1) 0.828

Equity Theory {CR = .87; VE = .50)

Economic conditions 0 981 0.649 10.980

Purchasing power of customers 0.68 1 0.693 11 .815

Lifestyles 0.751 0.723 12 .354

Consumer preferences 0.807 0.715 12.167

Level of literary & education 0.866 0.744 12 .720

Language 1.004 0.646 10.937

Cultural values, beliefs, attitudes

and traditions (set to 1) 0.758

Model f it Indexes are as follows : chi-square = 616.133; df=265 (p=O.OOO);

CF1 =0.981; TL 1 =0.977 ; lfl =0.981; RMSEA=0.066

Equity Theory: Anothec

KEY: * composite reliab\

** Variance extracted (V,

Table 3: Correlatio

Construct

1. Product

2. Price

3. Promotion

4. Distribution

5. Equity Theory

Note: Diagonal is the s1

INSTRUMENTATION

In view of the f01 50 participating marketi equity theory applies to significantly the level of firm's products. A total complete and usable r

constitutes a fairly hi management survey re~

Bharadwaj and Howell, study with a large popul< (Douglas and Craig, 198

The questions u ~

the four hypotheses pn collectivist cultural conh obtaining in-depth narrat firm's application of equi t

VALIDITY AND RELIAB

The possibility of

description of the QOL grounded on the concep1

lardized t-value

in s

15 329

16 538

17.777

15.534

10.917

11.693

11.352

18.461

18.661

18.835

16.171

15.843

16.747

15.211

10.980

11 .815

12.354

12.167

12.720

10.937

52

133; df=265 (p=O.OOO);

Equity Theory. Anothet: Precursor of Quality of Life Marketing

KEY: *composite reliability (CR) = p:: standardized loadinq)2

(2:: standardized loading + l::L)

**Variance extracted (VE) = 2:: (standardized loading2)

[2:: (standardized loading2) + l::L;)

(Hairetal, 1998)

Table 3: Correlation Between constructs

Construct 1 2 3 4

1. Product 0.836

2. Price 0.496 0.742

3. Promotion 0.466 0.561 0.900

4. Distribution 0.399 0.544 0.534 0.549

5. Equity Theory 0.399 0.610 0.505 0.345

Note: 0Jagona/Js the square root of the average vanance extracted.

INSTRUMENTATION

53

5

0.707

In view of the foregoing. 874 copies of questionnaire were distributed to the 50 participating marketing companies to confirm from their experience whether equity theory applies to their marketing operations, and if it is capable of improving significantly the level of customer patronage as well as result in high utility from the firm's products. A total of 315 questionnaires were returned, of which 301 were complete and usable resulting in a net response rate of 34.4%. This result constitutes a fairly high response rate, considering that the average top management survey response rates are in the range of 15% and 20% (Menon. Bharadwaj and Howell, 1996), and that collecting data for such a country-wide study with a large population is dtfficult due to the numerous obstacles encountered

(Douglas and Craig, 1983).

The questions used in this research represent a quantitative adaptation of the four hypotheses proposed in this study in a 5 item Iikert scale n Nigeria's collectivist cultural context. This method is chosen because it is well suited for obtaining in-depth narrative responses, especially for providing broad insight into a firm's application of equity theory in its dealings with customers (Worlu, 2006)

VALIDITY AND RELIABILITY MEASURES

The possibility of threat to validity in this study was reduced by presentin~ ;1

description of the QOL marketing construct and explicative equity theory model grounded on the concept of utility as well as other philosophical foundations.

./d\'([nces in Management 54

The proposed model illustrated external and internal validity and assumptions guiding overall research reliability and potential for generalizability. Trochim (2001) refers to this as "wanting the measure to reflect the construct, the whole construct, and nothing but the construct" This study assumed that there is an explanatory relationship between equity theory and QOL marketing practice. This relationship was captured in our explicative equity theory model , and in operationalzing the QOL marketing components while focusing on consumers .

By also assuming an explanatory relationship between equity theory and cognitive consonance within the construct of marketing benefiCence and nonmaleficence, the conclusion of this study can , in specific instance of high proximal similarity, be used for extending theory based analytic generalization of equity theory in every marketing situation.

Result s

The returned questionnaires constitute a high response rate and provides confidence that nonresponse is not an issue (Weiss and Heide, 1993). Responses can be aggregated as follows:

Table 4: Relevance of Equity theory to QOL Marketing

S/No Responses Frequencv Percentaqe

1 Yes 301 100

2 No - -

Total 301 100%

Source : Survey Data , 2007

Table 4 above shows that all the respondents were of the opinion that QOL marketing should be premised on equity theory.

THE TESTING OF HYPOTHESES

The overall chi-square for the model exhibited in figure 1 is significa nt (chi­square = 735 .790, df = 27 , p<0 .001 ), as might be expected given the si ze of the sample, such that tests involving large samples will generally lead to the rejection of the model even if it is appropriate (Bagozzi and Baumgartmer, 1994; Arbuckle and Wothke 1999) We therefore consider other structural diagnostics for relati ve global fit suggested by Bollen (1989) and Byrne (2001 ).

Equizr Theory: Anothe1

EQUITY THEORY

Chi-square-73 5.790,

CF1 =0.975;TL 1 =0.97(

IF1 =0 .975; RMSEA=O

Figure: Final model in•

Note: Standardized lines

Other measur Tueker-Lewis fit index square error of apprOJ inside conventional Cl

1998 ). The relationsh Table 5).

Hypotheses H and the level of utility price, distribution , anc and the level of utility indicated by a paran significant parameter decision (H2), 0.664 1

0.428 (P0.01) for eqt hypotheses are strong

54

rnal validity and or generalizability. • the construct, the 1ed that there is an !ting practice. This 1 model , and in 1 consumers.

equity theory and beneficence and instance of high

:; generalization of

rate and provides 1993 ). Responses

'centage

00

)0%

opinion that QOL

I is significant (chi­ten the size of the :l to the rejection of 994; Arbuckle and s for relative global

Equity Themy: A1.other Precursor of Quality ofLifc Marketing

EQUITY THEORY

Chi-square-73 5.790, df=271

CF1 =0.975;TL 1 =0.970

IF1 =0.975; RMSEA=0.076

Figure: Final model involving the marketing mix elements

Price Decision

Distribution Decision

Promotion Decision

55

Note: Standardized parameter estimate above the lines and t-values below the lines

Other measures of model fit were comparative fit index (CF1 = 0.975) Tueker-Lewis fit index (TL 1 =0.970), incremental fit index (IF1 =0.975) and root mean square error of approximation (RMSEA = 0.076). Given that all the fit indexes were inside conventional cut-off values, the model was deemed acceptable (Hair et al , 1998). The relationships proposed in the model are examined next (figure 2 and Table 5).

Hypotheses HI to H4 propose a positive relationship between equity theory and the level of utility derivable from each of the marketing mix elements (product , price, distribution, and promotion). The positive relationship between equity theory and the level of utility derivable from product decision (HI) is strongly supported as indicated by a parameter estimated of 0.461 (P0 .01 ). similarly, the statistically significant parameter estimates of 0.568 (P0.01) for equity theory and price decision (H2), 0.664 (P0.01) for equity theory and distribution decision (H3) , and 0.428 (P0.01) for equity theory and promotion decision (H4) indicate that all four hypotheses are strongly supported .

.-1dmnces in Manage111ent

Table 5: Model parameter estimates and t-values

Dependent Independent variables

Variables

S.P

Product 0.461

Price 0.568

Distribution 0.664

Promotion 0.428

Key: S.P - Standardized parameter estimate

**P<0.01

t-value

6.505**

7.520**

8.059**

5.863**

5(J

R2

0.21

0.32

0.44

0.18

With regard to the proportion of variance of the marketing mix elements that is explained by the equity theory, the results were quite acceptable concerning product decision, an R value of 0.21 was re-ported, indicating that 21% of the variation in product decision is explained by equity theory. Similarly, the proportion of variance of price decision, distribution decision, and promotion decision that is explained by the equity theory is 44%, 32% and 18% respectively.

DISCUSSION, IMPLICATIONS FOR MANAGEMENT AND CONCLUSION.

Discussion

A systematic investigation into the relationship between equity theory and OOL marketing has not been reported in the literature, yet, the results reported above suggest that OOL marketing decisions are strongly influenced and conditioned by equity theory. Accordingly, this study demonstrates the value of the equity theory construct as an important determinant of OOL marketing strategy.

!

Hypothesis 1 stated that equity theory is positively related to the degree of consumer patronage due to high utility. The results strongly support this assumption, i.e, product decisions appear to be premised on the desire to be equitable to all classes of customers (or markets), even where differences exist in terms of culture, language, economic condition, customer values and life style. (Diamantopoulos, Schlegelmilch and Du Preez, 1995; Johnson and Arunthanes, 1995; Czinkota and Ronkainen, 1998; Akaah, 1991; Wind, 1986; Terpstra, 1985).

Concerning the link between pricing decisions and equity theory, the results indicate that the basis of the firm's pricing strategies is the equity theory. This is consistent with Hb. This corroborate previous studies which indicate that firms set prices based on what the market can bear (Reid, 1986; Shoham, Rose and Albam,

1995).

Ftjllitr /Jit'IIIT: :lnothcr

Hypothesis 3 equity theory and distr findings which reveal tt accessible, the higher this stance.

The role play underscored in OOL r positively related to thJ and Wong, 1998; Agra,

Managerial lmplicatio

It may be diffit presented in this stu1 complex interface bet findings indicate that C well as other philosc themselves to be infl decisions.

Managers can informally as well as significant cultural di understanding that c increase the degree of

Conclusion

The overriding nexus between equity of these two construct little or no research at1

In the light of testable research mo marketing strategy. A what determines 001 equity theory is an irr determinant of QOL rr

Despite the explanatory power re! there are certainly ot environmental factors our theoretical frame' factors to explain the

I r R2

0.21

I 0.32

0.44

0.18

ng mix elements that ;ceptable concerning ing that 21% of the nilarly, the proportion otion decision that is ely.

:ONCLUSION.

:en equity theory and , the results reported ngly influenced and ,rates the value of the arketing strategy.

lated to the degree of ;trongly support this

on the desire to be re differences exist in values and life style. \Son and Arunthanes, 86; Terpstra, 1985).

uity theory, the results equity theory. This is indicate that firms set

1am, Rose and Albam,

Eljllil\' TlieliiT.' .·lnollier Precursor of(!ualit\ of !.if~· .\larketing 57

Hypothesis 3 indicated that there exists a positive relationship between equity theory and distribution decision. This is confirmed by the present research findings which reveal that the more equitable the firms are in making their products accessible, the higher the utility derivable. Lee and Sirgy (2004) also corroborated

this stance.

The role played by managers in the selection of promotion strategy is underscored in QOL marketing. The results strongly support that equity theory is positively related to the promotional strategy of the firm (Solberg, 2000, 2002; Tai

and Wong, 1998; Agrawal, 1995).

Managerial Implication It may be difficult to generalize from a single study. However, the results

presented in this study help managers to enhance their understanding of the complex interface between equity theory and QOL marketing phenomenon. Our findings indicate that QOL marketing operations are conditioned by equity theory as well as other philosophical foundations. As a result, managers should allow themselves to be influenced by equity theory when making strategic marketing

decisions . Managers can establish open communication channels both formally and

informally as well as accepting cross-cultural training to be aware of the most significant cultural dimensions of the customers. This will increase cultural understanding that could be factored into the marketing decision process to

increase the degree of equity.

Conclusion The overriding objective of this study is to draw s.cholarly attention to the

nexus between equity theory and QOL marketing strategy. Despite the importance of these two constructs in the literature , the relationship between them has received

little or no research attention.

In the light of the above, we illustrated the equity theory and proposed a testable research model to test the relationship between equity theory and QOL marketing strategy. A paramount task in the marketing strategy literature is to clarify what determines QOL marketing strategy and these results clearly indicated that equity theory is an important construct that should not be ignored as an important

determinant of QOL marketing strategy.

Despite the fact that equity theory demonstrated a relatively high explanatory power regarding the variance of the QOL marketing strategy variables , there are certainly other influential factors that were not considered such as the environmental factors, organizational factors and individual factors. By building on our theoretical framework, further research should explore the relevance of other factors to explain the interface between marketing strategy of the firm and equity

Admnces in Management 58

theory .

Further work should also test this frame-work in other countries since the present study was based in Nigeria .

References Agrawal, M. (1995) Review of a 40 year debate in International advertising: practitioner and

academician perspectives to the standardization/adaptation issue. International Marketing Review 12(1 ), 26-48.

Alashban, A. A., Hayes, L. A. Zinkham, G. M. and Blazes, A. L. (2002) International brand-. name standardization/adaptation: antecedents and consequences. Journal of

International Marketing 1 0(3 ), 22-28 Arbuckle, J. L. and Wothke, W. (1999) Amos 4.0 User's Guide, Chicago, IL: Small Waters

Corporation. Armstrong, J. S. and Overtoil, T. S. (1977) Estimating, non-response bias in mail surveys.

Journal of Marketing Research 14 (August), 396-402 Baalbaki, I. B. and Malhietra, N. K. (1993) Marketing Management bases for international

market segmentations: an alternate look at the standardization/customization debate. International Marketing Review 1 0(1 ), 19-44.

Bagozzi, R. P. and Baumgartner. H. (1994) The evaluation of structural equations models and hypothesis testing. In R.P. Bagozzi (ed) Principles of Marketing Research, pp 386-422, Cambridge, M.A:

Basic Blackwell. Banjoke. S. (2002) Human Resource Management: Pumark Nigeria Ltd,

Lagos. Bollen, K. A. (1989) Structural Equation with Latent Variables , New York Wiley and Sons.

Brouthers, L. E. and Xu, K. (2002) Product Stereotype, Strategy and Performance Satisfaction: the case of Chinese exporters. Journal of International Business

Studies 33(4), 657-77 Byrne, B. M. (2001) Struttural Equation Modeling with AMOS Basic concepts , Applications

and Programming. New Jersey, Lawrence Eribaum Associates. Inc. Cespedes, Frank v. (1993) Ethical Issues in distribution In Ethics in Marketing, edited by

N.C. Smith and J. A. Quelch, 473-490 Curry Jay and Curry Adam (2000). The Customer Marketing Method. The free press and

Colophone. New York. First Edition. Diamantopoulos, A. Schlegelmilch, B. B. and Du Preez J. P. (1995) Lessons for Pan

European Marketing? The role of consumer preferences in fine-tuning the product­market fit. International Marketing Review 12(2), 38-52.

Douglas, S. P. and Craig, C. S. (1989) Evolution of global marketing strategy: Scale, scope and Synergy. Columbia Journal of World Business 24 (Fall), 47-59.

Edewor, P. A. (2004) Toward Enhancing the Quality of Life in Africa, in Challenges of Qualities of Life in the Contemporary World Kluwer Academic Publication

Netherlands. Evans J. and Mavondo, F. T. (2002) Psychic distance and organizations performance: on

empirical examination of international retailing operations. Journal of International

Equity Theof);: Anol

Business Studt Hair, J. Anderson, E.

1 Jersey Prentice Kotler P. (2003) Mark Laczinak, G. R. and

Boston: Allyn an Lee, Dong-Jin and

Antecedents al Menezes, M. A. J. (1

W. C. Smith and Menon, A. Bjaradwa

consequences ~ Morgan, N. A. Rale

performance: a 68 (January) 90i

Ortmeyer, G. K. (199: and J. A. Quelch

Robin, Donald P. a Marketing Strait Marketing 57 (J

Sirgy, M. Joseph (19 concept" Journ<

Sirgy, M. Joseph (: perspective. Dor

Sousa, C. M. and Br< of Strategic Marl

Worlu, R. E. et al (20 Economies: A ~ Held at covenan

Worlu, R. E. (2006) '( Journal of Marl

58

r countries since the

·tising: practitioner and issue. International

)2) International brand­IUences. Journal of

cago, IL: Small Waters

e bias in mail surveys.

bases for international /customization debate.

tural equations models rrketing Research, pp

t: Pumark Nigeria Ltd,

r York Wiley and Sons.

gy and Performance International Business

concepts , Applications nc. 1 Marketing, edited by

od. The free press and

995) Lessons for Pan ne-tuning the product-

strategy: Scale , scope 17-59. ca, in Challenges of • Academic Publication

ations performance: on 1rnal of International

Equity Theory: Another Precursor of Quality ofL({e Marketing 59

Business Studies 33(3) 515-32

Hair, J. Anderson, E. Tatham, R and Black W. (1998) Multivariate Data Analysis, New Jersey Prentice Hall International.

Kotler P. (2003) Marketing Management (II ed) Prentice Hall Inc.

Laczinak , G. R. and P. E. Murphy (1993) Ethical Marketing Decision : The higher road , Boston : Allyn and Bacon.

Lee, Dong-Jin and M. Joseph Sirgy (2004) Quality of Life (QOL) Marketing: Proposed Antecedents and Consequences: Journal of Macro-Marketing 24 (June) 44055

Menezes, M. A. J. (1993) Ethical Issues in product policy. In Ethics in marketing, edited by W. C. Smith and J. A. Quelch, 283-301 Homewood , IL: Irwin

Menon, A. Bjaradway. S. G. Adidam P. T. and Edison, S. E. (1999) Antecedents and consequences of marketing strategy making: Marketing 63(2), 18-40

Morgan, N. A. Raleks, A. and Kartiskea C. S (2004) Antecedents of export venture performance: a theoretical model and empirical assessment. Journal of Marketing 68 (January) 90-108

Ortmeyer, G. K. (1993) Ethical Issues in Pricing in Ethics in Marketing, edited by N. C. Smith and J. A. Quelch, 389-404 Homewood, IL; Irwin.

Robin, Donald P. and R. Eric Raidenbach (1987) Social Responsibility, ethics, and Marketing Strategy: closing the gap between concept and application. Journal of Marketing 57 (January): 44-58.

Sirgy, M. Joseph (1996) "Strategic Marketing Planning guided by the quality of life (QOL) concept" Journal of Business Ethics 15 (March): 241-59

Sirgy, M. Joseph (2001) Handbook of quality of life research: An ethical marketing perspective . Dordecht, the Netherlands Kluwer

Sousa, C. M. and Bradlay F, (2005) Global Markets. Does psychic distance matter? Journal of Strategic Marketing

Worlu, R. E. et al (2004) Marketing as a tool of Quality of Life Enhancement in Developing Economies: A paper delivered at the International Conference on Human Development Held at covenant University, Ota, Nigeria.

Worlu, R. E. (2006) 'Curbing the influence of consumerism through quality of life marketing' : Journal of Marketing 1 (3) 58-73.

.f..,.