International Management Review Vol. 7 No.

1 2011

Impact of Utilitarian and Hedonic Shopping Values on Individual’s

Perceived Benefits and Risks in Online Shopping
Abhigyan Sarkar
Marketing Management at ICFAI University-Dehradun, India

[Abstract] An individual’s overall perceived shopping value has two dimensions – utilitarian and
hedonic. Utilitarian shopping value relates to the functional aspects of the shopping context. Hedonic
shopping value is derived from the perceived fun or playfulness of the shopping. An individual also
assumes some benefits and risks in any shopping context. The e-shopping tendency is increasing
rapidly among buyers across the world, which is the focus of this study. This study investigates how
the individual buyer’s perceived benefits and risks in e-shopping are influenced by his or her perceived
utilitarian or hedonic shopping values.
[Keywords] online shopping; utilitarian shopping value; hedonic shopping value; perceived benefits in
online shopping; perceived risks in online shopping

Introduction
Traditional research in the field of consumer behavior have been started by drawing concepts from the
field of cognitive psychology and the concepts of utilitarian shopping value, which came from the
research conducted mainly in the field of micro-economics and classical decision theory (Holbrook
and Hirschman, 1982 a). The utilitarian perspective assumes the buyer as a logical problem solver.
However, a group of researchers have analyzed shopping from a different perspective. They focused
on the emotional and irrational aspects of individual buying behavior. Ernest Dichter (1947) pioneered
this research tradition, which is known as motivation research (Sheth et al., 1988; pp.109-126). The
basic assumption underlying this research tradition is that consumers made product or brand choices
for emotional reasons deeply rooted in their psychology. This motivation research stream heavily
relied on "Freudian psychology" (Sigmund, 1953). This stream of research was strongly criticized by
the scholars who advocated rational buying behavior models.
During the decades of 60s and 70s, research in emotional and irrational buying was ignored to a
certain extent (Sheth et al., 1988; pp.109-126). Again, this research tradition emerged in the decade of
80s, as Zuckerman invented the scale to measure individual sensation seeking in 1979. An individual’s
overall attitude towards any brand has distinct hedonic and utilitarian dimensions (Batra & Ahtola,
1990). However, they have stated that the relative dominance of either of the dimensions varies across
brands.
Today, one can find two basic formats of shopping: store format and non-store format. Nowadays,
more and more shoppers are purchasing online in order to save time and maximize their convenience
instead of physically visiting a store (Dholakia et al., 2002). The internet has become a significant
means for carrying out commercial transactions. Today, more than one-half of the airline reservations
are made through the internet, and online sales reached $30 billion during the 2005 holiday session, up
30% from 2004 (Pew Internet, 2005; Nielsen & NetRatings, 2005). The objective of the present study
is to investigate the impact of these individual shopping values on an individual’s perceived benefits
and risks in the online shopping context.

Literature Review
Utilitarian and Hedonic Shopping Values
Utilitarian buying motives include convenience-seeking, variety seeking, searching for quality of
merchandise, and reasonable price rate, etc. On the other hand, hedonic buying motives are related to
emotional needs of individuals for enjoyable and interesting shopping experiences (Bhatnagar &

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Ghosh, 2004). Holbrook & Hirschman (1982a) have stated that in traditional information processing
buying model the buyer is a rational decision maker wanting to maximize utility by focusing on
tangible benefits of the product. According to this model, purchasing has been viewed as a problem-
solving activity in which consumer moves through a series of logical steps. Hedonic consumption
involves emotional arousal taking place while purchasing or consuming (Holbrook & Hirschman,
1982 b). In hedonic consumption, different types of emotional feelings, which are both physiological
and psychological, play major roles. Hopkinson & Pujari (1999) have explained how hedonic
consumption takes place in a high-involvement situation, where an individual is deeply involved in
experiencing a consumption event. This research points out that the level of hedonism varies across
products or brands depends on the changing levels of involvement. In high- involvement consumption
situations, the level of hedonism is expected to be higher. A little research has been conducted to
explore this aspect of consumption.
The traditional buying decision model (utilitarian) and modern experiential model (hedonic)
differs in four substantive areas: “mental constructs, product classes, product usage and individual
differences” (Holbrook and Hirschman, 1982a). In several buying instances, emotional desires
dominate the utilitarian motives. The intensity of emotive arousal largely depends on the capacity and
desire for spending emotional resources on the part of the buyer, and this capacity and desire vary
within one consumer over time.
Batra and Ahtola (1990) have examined the composition of the overall consumer attitude towards
four different brands: Pepsi, Listerine, Comet Cleanser and Cadillac. In all the cases, a two-factor
structure emerged: utilitarian and hedonic. This finding reinforces the fact that any brand has both
utilitarian and hedonic attributes, and their relative proportions vary across brands. Holbrook and
Hirschman (1982 a) have stated that any product, however mundane it might be, carries some
symbolic meanings. The above findings suggest that in the cases of most of the products or brands, the
total consumer attitude is composed of at least two dimensions, utilitarian and hedonic. Online
shopping is a mode of shopping where both utilitarianism and hedonism are likely to persist.

Perceived Benefits in Online Shopping

Consumers make online purchases for both convenience and enjoyment (Childers et al., 2001, pp. 421-
422). Forsythe et al. (2006) developed a scale to measure perceived benefits and risks in online
shopping. Their study shows that convenience, ease of shopping, and product selection (which are
utilitarian benefits) account for larger variance explained in total perceived benefits in online shopping,
compared to the perceived hedonic benefit while shopping online. Hence, it can be inferred that an
individual with higher utilitarian shopping motive is likely to perceive greater benefits in online
shopping compared to another individual having lower utilitarian shopping motives.
The hedonic perspective includes emotive arousals accompanying a consumption act (Holbrook
& Hirschman, 1982b). The authors have stated that hedonic arousal mainly takes place when the
consumer is using the product. "Dynamic interaction between product and consumer" (Holbrook &
Hirschman, 1982b, p 97) is an especially important requisite for hedonic arousal to take place. Apart
from a few exceptional cases, like, online movie watching, game playing, hearing songs, etc., an
individual is unable to interact directly with a product online. While choosing any brand online for
purchasing, the individual can see only those attributes of a brand which can be expressed through the
picture on the screen. The consumer cannot touch, smell, or taste a product online (Childers et al.,
2001, pp. 421-422). Consumers place an order online, but actual usage of the product takes place after
it is delivered. Looking from this point of view, the scope of hedonic arousal is limited in case of
online shopping, and the individual with high hedonic shopping value is expected to perceive a lesser
benefit in online shopping.
A few researchers have also stated that hedonic motives play positive roles in shaping the
attitude towards online shopping. For example, Childers et al. (2001) have concluded that both
functional and hedonic motives are important predictors of online shopping attitude. Parsons (2002)

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found that some social motives are applicable for online shopping, but these types of conclusion are
relatively few in number. The majority of researchers state that a buyer’s utilitarian motives dominate
non-store shopping as it provides convenience by the way of saving time and effort (Forsythe et al.,
2006). The hedonic shopping motive is dominant in the case of store-shopping where buyers can
directly interact with the sales person or can feel the products on the spot.

Perceived Risks in Online Shopping

There are broadly three types of perceived risks in online shopping: financial risk, product risk and
convenience risk (Forsythe et al., 2006). Financial risk is the perceived net loss of money and
consumers’ perceived insecurity (like, the feeling of insecurity regarding online credit card usage).
Product risk is associated with the expected future non- performance of the product (as in case of
online buying, the consumers are unable to directly examine the product while making choices) or
perceived delay in actual delivery. Convenience risk includes buyers’ perceived inconvenience while
placing order online, like, technological complications faced. Bhatnagar and Ghosh (2004) have stated
that the product performance risks and financial risks are very much associated with any online
shopping. A potential financial risk associated with online buying is the consumer’s sense of insecurity
regarding online credit card usage, which has been found to be a potential obstacle to online shopping
(Maignan & Lukas, 1997). Therefore, the prior literature shows that all these major types of perceived
risks in online shopping (financial risk, product risk, convenience risk) are primarily utilitarian in
nature or related to time and cost. So, it is likely that an individual with higher utilitarian shopping
motive is likely to perceive greater risk in online shopping compared to another individual with lower
utilitarian shopping motive.
According to Holbrook and Hirschman (1982b), in order for the hedonic arousal to be present in
any shopping context, dynamic interaction between the buyer and the product should be present.
According to Alba et al. (1997), the departmental and specialty stores give the buyers the opportunity
to touch and feel the merchandise and to obtain information directly from sales persons. On the other
hand, the online shopping environment doesn’t offer the buyer the opportunity to touch, feel, or smell
the product while buying (Childers et al., 2001). Hence, it is likely that an individual having a high
hedonic shopping motive will tend to prefer more direct interaction and go for store shopping. By
directly interacting with the merchandise, he/she will be able to reduce his/her perceived risks in
shopping. Therefore, in the online shopping context, the individual’s perceived risk is likely to be high
if his/her hedonic shopping motive is high.

Literature Gap
Limited research has been conducted investigating the impact of an individual’s perceived shopping
values on his/her perceived benefits and risks in online shopping. Prior literature postulates that in any
shopping context, both hedonic and utilitarian shopping values coexist (Batra & Ahtola, 1991; Babin
et al., 1994). Therefore, it is of prime importance to investigate how the perceived shopping values
influence the perceived benefits and risks in online shopping.

Hypotheses Formulation
Based on the above literature review, the following hypotheses are formulated:
H1: Consumers’ perceived utilitarian shopping value has significant positive impact on their
perceived benefits in online shopping.
H2: Consumers’ perceived hedonic shopping value has significant negative impact on their
perceived benefits in online shopping.
H3: Consumers’ perceived utilitarian shopping value has significant positive impact on their
perceived risks in online shopping.
H4: Consumers’ perceived hedonic shopping value has significant positive impact on their
perceived risks in online shopping.

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The following theoretical framework is developed based on the above hypotheses. In the framework,
arrow flows from predictor construct to dependent construct. Positive and negative signs denote
positive and negative relationship, respectively. A survey has been conducted to test the framework
empirically (see the figure below).

Methodology

Measurement Items
Perceived benefits in online shopping have been measured using 16 items taken from the scale
developed by Forsythe et al. (2006). Perceived risks in online shopping have been measured using 16
items taken from the scale developed by Forsythe et al. (2006). Eleven items to measure hedonic and
four items to measure utilitarian shopping values have been adopted from the scale developed by
Babin et al. (1994).

Sampling Technique
A convenient sampling was done among the adult customers of computer game parlors located in various
cities across India. A total 525 completed questionnaires was considered for final analysis. The response
rate was 72%, in which 28% of the respondents didn’t fill up the complete questionnaire and were excluded
from the study. The age range of the respondents was 21 to 60 years, and 62 % of the respondents were
male. Only those respondents who had made at least one online purchase of any good or service during the
last month were eligible for participating in the study. For participating in the survey, each respondent was
given an amount of Rs 100.

Statistical Tools Employed

Principal component factor analysis with varimax rotation has been done to test the discriminant validity of
the four constructs. In order to test the above hypothesized relationships, the multiple regression technique
has been used. The coefficient alpha values have been computed for examining the reliability of the
constructs in Indian context. Multiple regression analysis has been done to investigate the linear
relationships hypothesized between the constructs.

Data Analysis and Findings

A total of 47 items were in the questionnaire. Principal component factor analysis with varimax
rotation has been done to examine the discriminant validity of the constructs. Only factors with an
eigen value 1 or greater than that were retained for rotation. The set criteria were to retain the items
with loading greater than or equal to 0.5. However, all items met the criteria and were retained. The
rotated component matrix revealed four factors with eigen values greater than 1. All the items loaded
highly (> 0.5) on their respective latent constructs on which they were supposed to load. There was no
cross-loading (see Table 1 below for factor loadings). The four factors were clearly interpretable as

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perceived risks in online shopping, perceived benefits in online shopping, utilitarian, and hedonic
shopping values. Therefore, discriminant validity was established.

Table 1. Loadings after Varimax Rotation

Items Benefit Risk Factor Utilitarian Factor Hedonic Factor
Factor
I can shop in privacy of my home 0.791
while shopping online.
I don’t have to leave home if I shop 0.801
online.
I can shop whenever I want when I 0.722
shop online.
I can save the effort of visiting stores if 0.688
I shop online.
In online shopping the items from 0.701
everywhere are available.
I can get good product information 0.712
online.
I get broader selection of products 0.601
while shopping online.
While shopping online, I can have the 0.604
access to many brands and retailers.
If I shop online I don’t have to wait to 0.796
be served.
There is absolutely no hassles in online 0.724
shopping.
I don’t get embarrassed if I don’t buy. 0.682
I don’t find any busy signal in online 0.602
shopping.
I get the chance to try new experiences 0.851
while shopping online.
It is exciting to receive the package 0.766
after placing order online.
I can buy on impulse in response to ads 0.655
while shopping online.
I can custom design products while 0.601
shopping online.
I can’t trust the online company 0.869
I may not get the delivery of the 0.861
product.
I may end up in purchasing something 0.779
by accident.
My personal information may not be 0.722
kept secret.
I may not get what I want. 0.692
My credit card number may not remain 0.679
secure.
I might be overcharged. 0.674
I can’t examine the actual product. 0.854
Size may be a problem with clothes. 0.842
I can’t try on clothing online. 0.778
I am unable to touch and feel the items. 0.711
I have to pay extra for shipping 0.678
and handling.

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Items Benefit Risk Factor Utilitarian Factor Hedonic Factor

Factor
It is too complicated to place order 0.832
online.
It is difficult to find appropriate 0.770
website.
Pictures of merchandise on the 0.556
website take too long time to come
up.
I just accomplish what I want to 0.82
while shopping.
While shopping I cannot buy what -0.64
I really need.
While shopping I find just the 0.79
items I look for.
I feel disappointed if I don’t get all -0.54
I need on a single store, and I have
to visit many stores.

Shopping to me is truly a joy. 0.79

I shop not because I have to, but 0.71
because I want to.
Shopping is like an escape from 0.78
my daily routine life.
The time spent in shopping is truly 0.81
enjoyable to me.
I enjoy being immersed in exciting 0.75
new products while shopping.
I enjoy shopping for its own sake 0.69
and not because of that I need to
purchase something.
While shopping, I am able to act 0.65
on the spur of the moment.
While shopping I can feel the 0.74
excitement of the hunt.
While shopping, I am able to forget 0.72
my other problems.
While shopping I feel a sense of 0.71
adventure.
Any shopping is a very nice time 0.70
out to me.

Coefficient alpha values for the four latent constructs were all within the range of 0.81 and 0.85 (see
Table 2) exhibiting good reliability of the constructs in Indian context.

Table 2. Coefficient Alpha Values

Principal Components Cronbach’s Alpha
Perceived Benefits in Online Shopping 0.82
Perceived Risks in Online Shopping 0.83
Utilitarian Shopping Value 0.81
Hedonic Shopping Value 0.85

Regression analysis has been done, taking the mean score of each construct for each respondent. For

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each respondent, the summated score of all items representing a construct has been divided by the
number of items. A mean score has been taken, as all the constructs achieved good reliability.
Cronbach’s Alpha values were all greater than 0.8. Two regression models have been estimated. In the
first regression model, perceived benefit was regressed on utilitarian and hedonic factors. In the
second regression model, perceived risk was regressed on utilitarian and hedonic factors.
Both the regression models achieved statistical significance. The F-value of the first regression
model was 134.45 and 153.29 for the3 second. Both were significant at 10% level. The adjusted R2
values were 0.337 and 0.367 for the first and second regression models, respectively. In the first
regression model, the coefficients of both utilitarian factor (coefficient= 0.81, p-value= 0.08) and
hedonic factor (coefficient= - 0.72, p-value= 0.09) emerged as significant. The impact of hedonic
factor on the perceived benefit was negative and the impact of utilitarian factor on perceived benefit
was positive, as expected.
In the second regression model, the coefficient of the hedonic factor (coefficient = 0.77, p value =
0.04) was statistically significant and positive, as expected. In the second model, the coefficient of
utilitarian factor (coefficient = 0.84, p-value = 0.05) was also significant and positive. Therefore, H1,
H2, H3, and H4 were empirically supported. In the case, no regression model heteroscedasticity
problem has been found. The multicolinearity problem was, also, not significant, as all the VIF values
were less than 4.

Discussions
The findings of the above study show that consumers with high hedonic shopping values tend to avoid
online shopping. They perceive more risks and lesser benefits in online shopping. They are likely to
avoid online shopping, as they cannot touch the product or interact with the salespeople directly while
shopping online. A customer with high hedonic shopping values tends to prefer direct interaction with
the product or salespeople, which become stimuli in creating the hedonic arousal. A hedonic customer,
therefore, is likely to make most of the purchases by visiting brick, rather than click stores. This
finding has a very important implication in the context of e-marketing management. In order to be
successful, an e-marketer must try to increase the hedonic or entertainment value of its website. The
website design should be such that it provides fun to the customers. This fun element is necessary to
attract and retain online customers.
The results of this study also reinforce the fact that the customers with high utilitarian shopping
values perceive greater benefits in online shopping. Most of the online stores provide the utilitarian
benefits to their customers by saving their time and costs. Customers primarily make online purchase
in order to get greater convenience. Another provocative finding of this study is that a customer with
high utilitarian shopping value is also likely to perceive greater risks in online shopping. This finding
has strong implication for the e-marketers. E-marketers must provide the assurance to their target
customers that the risks inherent in any online shopping in terms of credit card fraud, leakage of
personal and confidential information, delay in delivery or delivering defective items, etc., are
minimized. This perceived security is very important to attract and retain the online customers.

Conclusion
Today, many customers across the globe are purchasing online. The competition is increasing rapidly in this
sector. In order to be successful in online marketing, the marketers must do two things: increase the hedonic
or entertainment value of the sites and increase the level of perceived security in online shopping. By
increasing the hedonic value, the marketers will be able to attract those customers whose hedonic shopping
value is high and who normally purchase from brick stores. By improving the security provisions, the e-
marketers will be able to mitigate the risks perceived by the consumers in online shopping. Security
provision must be stricter when an individual is paying using credit or debit card online. As a whole, fun,
and security are two key benefits that are desired by online consumers.

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