Millennial Consumer Behavior and perception towards technology

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Frame of Reference

This chapter aims to provide an overview of relevant literature and theories. As explained by the author below the Theory of consumption values will be applied and explained in correlation to AI. Furthermore, it additionally provides a literature on Millennials and their consumer behavior.

Artificial Intelligence (AI)

The period we are in at this present time living in is being described as an industrial revolution in regards to AI (Brougham & Haar, 2017). We are living in a world increasingly used to the rate of change in regards to technology, AI new technology rather than it being role based, this technology will be operating more enigmatic than the performance of a human mind (Sterne, 2017). AI is the branch of computer science involving the development the capability of machines performing human type intelligence (Official Document System of the United Nations, n.d.) These computers are evolved as a human’s brain, yet our brains do not work the same way as a computer, we are approaching an era of robo-humanity (Shnaps, 2016). In comparison to what was humans in tasks i.e. auto complete in Microsoft Word, for the word “hate” when typed “hte” (Platt,2017). Today these more advanced softwares; AI does not only run on code written commands by their developers, the machines are developing their own behaviors, by the means of processing data, modifying it, and hopefully improving themselves, if and when a mistake is made, all of this in the aims of not being controlled by their human developers (Platt,2017). One of the world’s leading auditing companies predicts that by the end of 2016 more than 80 of the world’s 100 largest software enterprises will have integrated AI technologies, this was an increase of 25% to their previous year (Shnaps,2016). These robots use a trial and error algorithm that lets them “remember” experiences they have collected over their lifetime, this helps them find optimal compensating behaviors one can call instinct in which they have learned from (Adami,2015). AI works on three D´s that which are; detect, decide, and, develop (Sterne,2017).

Theory of consumption values

Values are a fundamental underlying of orientation such as patterns in basic beliefs, the influence attitudes and may affect one’s behavioral intentions and/or our behaviors (Vaske & Donnelly, 1999), therefore the foundation of this research will be based on “The Theory of Consumption Values” Sheth et al. (1991). As the purpose of this thesis is to explore millennial’s thoughts on AI the Theory of Consumption will be chosen to further analyze its five consumption values; functional, emotional, conditional, social, and epistemic values. Values have the power to influence an individual’s attitude and or behavior as defined by Rokeach (1973) a value is “an enduring belief that a specific mode of conduct is personally or socially preferable to an opposite or converse mode of conduct or end state of existence.”
The theory of consumption values is a model devised by Sheth et al. (1991). This model explains the reasoning as to why consumers make the choices they do through the recognition of five key of its values influencing a consumer’s choice behavior, furthermore these values may be used in order to prognosticate a consumption behavior and additionally describe and explain the reasoning for it (Sheth et al. 1991). This model was chosen for this research as it is used as a base regarding the values that lead to consumption. As mentioned by Sweeny and Soutar (2001) the model developed from the Theory of Consumption values (Sheth et al. 1991) was the pedestal to provide a powerful foundation to build on this perceived value scale, in other words, the original model is a base which allows future research to extend from. Moreover, this theory gives researchers an explanation as to why consumers choose to buy, not to buy or to use or not to use, and may be applied to any product, good, or service, it can also be applied to brand usage or consumption (Sheth et al., 1991).
This theoretical model showcases three key points along to the theory which are, consumer choice is a result of the various consumption values, the consumer values partake dissimilar contributions to any of the given choices or situations, and these five consumption values are independently joint or independent to one another (Sheth et al., 1991). The theory of consumption values identifies the five consumption values influencing consumer choice behavior to be; functional value, emotional value, conditional value, social value, and epistemic value (Sheth et al., 1991) moreover, it is implied that these five values may influence a decision solitarily or independently. This theory also acquires varied different disciplines, academic disciplines from different branches such as; economics, sociology, types of psychology, and marketing and consumer behavior (Sheth et al., 1991). This theory of consumption values displays a strained scope specifically designed for the effect of consumptions when buying decisions arise in consumer choice behavior, meanwhile it has also been debated due to the perception of seen value from a cognitive stance, it may consequently impact the effect of other behaviors; loyalty, satisfaction, attitude, usage, and contentions (Yang & Peterson, 2004). Moreover Altaf, Perumal, and Hussin (2017) have further argued the original theory of consumption model to be lacking the testing of consumption values against a cognitive construct, consumer attitude, in their study functional, social, and conditional values are what played the most crucial role when formulating positive consumer attitude. As also mentioned by Williams and Soutar (2009) a value is more complex in some industries which will require a multidimensional concept for some of Seth et al. (1991) independent values. Below Figure 1 presents the model and its five values; functional value, conditional value, social value, emotional value, and epistemic value.
The functional value is defined as “the perceived utility acquired form an alternative’s capacity for functional, utilitarian, or physical performance.” (Sheth et al., 1991). It is perceived that this functional value is the primary driver that influences  consumer choice (Sheth et al., 1991). As found by Marshall (1890) and Stigler (1950) this value underlies with their economic utility theory. It is also seen as the value one receives from said product in exchange of money (Williams & Soutar, 2009). In other words a functional value can be further defined as a recognized capability that satisfies the functionality or utilitarian or physical needs of an individual when consuming a product.
This includes the performance of said product, brand or service and its exchange of value to a consumer. For AI, a functional value can for example, arise from utilitarian attributes depending on the product, and the consumer’s value for said performance, capacity, or brand.
The conditional value is defined as, “The perceived utility acquired by an alternative as the result of the specific situation or set of circumstances facing the choice maker.”(Sheth et al., 1991). Meaning that this alternative utility as described, will depend in the situation the consumer faces and also depending on the certain time they face said situation. As Sheth et al. (1991) explains some of these conditional utilities derive from specific situations such as; seasonal (Christmas cards), life events (wedding gowns), emergency situations (ambulances), and products such as popcorn at the movies. These said temporary factors affect the consumer’s choice based on the moment. Furthermore, Sheth et al. (1991) explains consumer behavior may not be predicted merely from attitude alone, and therefore investigated this circumstantial ability of situational factors. Examples of these can relate to the availability of a product moreover, these situational factors regarding AI can be the time it will be consumed or used. This value defines the possible existence of additional eventualities that may help or hinder a consumer’s decision (Altaf et al., 2017).
“The perceived utility acquired from an alternative’s association with one or more specific social groups.” is how the social value is defined (Sheth et al., 1991). In other words this value is seen as the connection the consumer makes with the product, service, etc, in relation there being a need of belongingness within social aspects. Choices of objects to be highly visibly seen such as jewelry and clothing or goods shared with others such as gifts and or entertainment products are often what is driven by the social value (Sheth et al., 1991), moreover even products to be thought for its functionality are customarily selected by the basis of social factors for example this is seen in the automobile industry. The social stereotypes a consumer bonds with regarding a product can be the relation or the means of consuming said product. Such influences can come from different examples such as media, commercials, or family and friends. For example if an individual’s family is accustomed to consuming or doing a certain thing and individual is likely to follow in this. Celebrity endorsement is another example where a consumer might take the importance of the endorser and value that more than the functionality of a product, due to the social belongingness. Both of these examples may be applied to AI and the value a consumer might fore take in consumption.
The emotional value is defined as “The perceived utility acquired from an alternative’s capacity to arouse feelings or affective states. An alternative acquires emotional value when associated with specific feelings or when precipitating or perpetuating those feelings.” (Sheth et al., 1991). Meaning this value is connected to the emotions or feeling an individual relates to a product or service of interest. These emotions can be positive or negative and may be characterized by anger, joy, nostalgia, relieve, etc. Additionally, Sheth et al. (1991) exemplifies goods and services which are commonly kindred to emotional responses i.e. romance to candle light dinners, and fear to scary movies. These values are often measure with pleasing alternatives such as religion and, or charities (Sheth et al., 1991). This brings a social-psychological dimension to the model (Williams & Soutar, 2009). In AI experiences linked to emotions or relations that may cause emotions can for example be as previously mentioned the different opinions of individuals as AI advances, some are positive towards it while others are not (Shnaps, 2016).
Lastly, the epistemic value as stated by Sheth et al. (1991), “The perceived utility acquired from an alternative’s capacity to arouse curiosity, provide novelty, and/or satisfy a desire for knowledge.” This describes the good’s ability to invoke an individual’s curiosity, making the consumer desire the requirement to fulfill or gain more knowledge from the product. Sheth et al. (1991) further explains coming across new experiences invokes curiosity as well as a divergent experience in variation to a change in pace can also arouse an epistemic value. This exploratory varieties motive of variety seeking can be in result of a consumer becoming bored with a brand such as trying the same type of coffee or curiosity to visit a new place like a restaurant, as well as learning of a new, for example, culture (Sheth et al., 1991). In his study Berlyne (1970) expresses the thought of individuals constantly having a desire to maintain a constant level of stimulation. Rogers and Shoemaker (1971) also explain the desire of a consumer along with their property for the adoption of new products. For AI this can come from the fact that this is new technology and for example arouse a sense of curiosity.
These values can affect an individual directly some of the values more than the others, an individual might be affected through one value directly or more than one (Sheth et al., 1991). As these values will be explored on a technological field such as AI will further give an understanding on what consumers or possible consumers expect and or experience regarding AI. This will also give an understanding to what values can be applied and further looked at on this field to understand these millennial consumers. Technology has flourished and invoked many new opportunities that fulfill consumer needs which were not able to be fulfilled before and has been able to create new consumer needs (Legris, Ingham, & Collerette, 2003). Values of this technology are its usefulness and ease of use, which are connected to the values a consumer gains from behavior and attitude towards a certain product or service (Legris et al., 2003).

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Functional and AI

Functionality is an important aspect for consumers nowadays; as times are changing products adapt to our everyday needs and help us with our day by day tasks. Things will also change in regards to marketing this technological revolution will change things for marketing as for example computational systems will manage more tasks in marketing and advertising, this optimization of human like machine intelligence will be the next step of technology marketing (Sterne, 2017). AI in marketing is considered to be a form of direct marketing that combines the techniques of traditional database marketing along with AI, machine learning (Rekha, Abdulla, & Asharaf, 2016). As mentioned by Rekha et al. (2016)marketing is becoming more personalized and rigorous due to economic factors and consumer privacy issues, through AI this direct marketing can help direct the efforts towards the right consumer. As these authors mention AI can become a tool marketers will have to work along with as it is a revolution a people will adapt to this change. This can be seen as the introduction of computers and people adapting to them in their everyday lives, or jobs, nowadays computers are part of our everyday lives and carry out many tasks rom our day, they indeed are an essential part of marketing. While some authors believe AI will also be a tool aiding marketers in the future, others such a Wood and Evans (2018) believe it may replace many jobs in the future.

1. Introduction
1.1 Background
1.2 Problem
1.3 Purpose
1.4 Research Questions
1.5 Definition of Key Terms
2. Frame of Reference
2.1 Artificial Intelligence (AI)
2.2 Theory of consumption values
2.3 Functional and AI
2.4 Social and AI
2.5 Epistemic and AI
2.6 Conditional and AI
2.7 Emotional and AI
2.8 Millennial Consumer Behavior and perception towards technology .
3. Method
3.1 Research Design
3.2 Philosophy of Science: Interpretivism
3.3 Scientific Research Method: Abductive Approach
3.4 Qualitative Research Method
3.5 Data collection, Sampling, Analysis
3.6 Research Ethics
3.7 Trustworthiness of research
3.8 Research Limitations
4. Empirical Data 
4.1 Interviews
4.2 Functional values
4.3 Emotional values
4.4 Conditional values
4.5 Social values
4.6 Epistemic values
4.7 Important values
4.8 Additional Values
5. Analysis 
5.1 RQ1 Regarding the Theory of Consumption Values, how and what were millennials’ values towards artificial intelligence?
5.2 RQ2: Which values did millennials emphasize on the most? .
5.3 RQ3: What were the most important value(s) for millennial consumers regarding artificial intelligence?
5.4 RQ4: Are there any additional values from millennials towards AI consumption?
6. Conclusion .
7. Discussion of Limitations and Strengths of the study, Managerial Implications of the findings, and Future Research Suggestions 
7.1 Limitations and Strengths
7.2 Managerial Implications
7.3 Suggestions for Further Research
References 
Appendix 
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