2015 How religiosity influences consumption: The impact of consumer religiosity on perceptions of psychological and social risk Submitted in fulfilment of the requirements for the degree of Doctor of Philosophy in Marketing at QUT Business School Thamer Ahmad Baazeem MSc Advanced in Marketing, QUT Business School BSc in Business Administration, King Abdul Aziz University This thesis is dedicated to Allah, the almighty and then, to my parents Ahmad & Huda, the love of my life Hadeel, my two children, Ahmad and Mahmood, my supervisors, Larry and Gary, and all people who, in any way, have contributed to my knowledge and experience; this includes uncles, aunts, teachers, academic professors and friends. I Key words Marketing, consumption, consumer religiosity, perceptions, psychological risk, social risk, moral potency. II Acknowledgment First, I give thanks to Allah, the Creator, for his endless favours. I wish to recognise King Abdul Aziz University (KAU) in Saudi Arabia for funding this PhD. I dedicate this work to KAU and I look forward to pursuing an active career and contributing to develop a world class educational environment there. Thanks to the Royal Embassy of Saudi Arabia in Australia and its Cultural Attaché for all their support during my stay in Australia. Thanks also to QUT for giving me this opportunity to complete my PhD and to be part of this great community. Thank you to the staff of School of Advertising, Marketing and Public Relations and to the staff of the Research Support Office at QUT Business School for their unfailing friendliness and support. Thank you to the panel members of my confirmation of candidature and my final seminar, Professor Rebekah Russell-Bennett, Associate Professor Gavin Nicholson and Dr Peter O’Connor. Your feedback has been invaluable as I reached these important milestones. To Professor Scott Vitell, Chair of the Department of Marketing, University of Mississippi, USA. Thank you for your advice and feedback on my conceptual development at the beginning of my PhD. Thank you to Dr Sayed Fazal E Hasan for helping me to understand the philosophy behind choosing the appropriate techniques for data analysis. Thank you to Dr Paula Dootson for your invaluable support throughout this process. To my friends Ivano Bongiovanni, Kara Burns, Dr Charmaine Glavas, Dr Kate Letheren, Chris Mahar, Emma Karanges, Kathleen Chell, Rachel Sato, Rory Mulcahy and Tiffany Susilo; one of the greatest things in my PhD is your friendship, thank you, you were always around to lend me your support and encouragement. To Dr Ursula Bougoure, for always believing in me and taking an active interest in my PhD and my family. I still remember the first time I attended your lecture and was inspired by your style of teaching. I am very thankful to you. III To my supervisor, Dr Gary Mortimer, I will never be able to express what I feel towards you. It has been the greatest pleasure for me to be your student. Your mentorship always encouraged me to work harder and act smarter. I always appreciated your feedback, even if I scowled or whinged at the time you were giving it to me – it always helped me achieve better outcomes. To my supervisor, Associate Professor Larry Neale, you cannot imagine the scope or importance of the contribution you have made to my entire life. Your charisma, refinement and professionalism directed me in my own self-development and in my preparation for my future life as a young academic. Your feedback and your challenging critiques always encouraged me to focus more on the details related to the given situation. Last, but by no means least, I thank my parents for their constant support and love. I give my very special thanks to my wife, Hadeel Mahmood Bagrane. Words cannot convey the extent of her help and support during my time in Australia and I would need to write another entire thesis to do so. IV Glossary Noted below is a list of the most important terminologies and abbreviations used throughout this thesis which are deemed most important: Extrinsic religiosity: considering religion as a social convention, a self-serving instrumental method shaped to suit oneself (J. W. Clark & Dawson, 1996; Donahue, 1985a). Intrinsic religiosity: considering religion as a meaning-endowing framework through which all of life is understood (J. W. Clark & Dawson, 1996; Donahue, 1985a). Moral courage: a commitment to moral values, an awareness of the danger involved in supporting those values, and a willingness to endure that danger (Kidder, 2003). Moral efficacy: an individual’s belief in their capability to organise and mobilise the motivation, cognitive resources, means, and the required actions in order to attain moral performance within a given moral domain, whilst persisting in the face of moral danger (Hannah et al., 2011). Moral ownership: the sense of psychological responsibility people feel over the nature of their own actions and those of others around them (Hannah, Avolio, & May, 2011). Psychological risk perception: the risk that the selection of a particular product or service will have negative influences on the consumer’s peace of mind or self-perception (Garner, 1986; Taylor, 1974). Social risk perception: the risk that the selection of a particular product or service will negatively affect others’ perceptions of the consumer (Garner, 1986; Taylor, 1974). Religious scholars: In this thesis, the term will refer to those Islamic religious scholars who are recognised as having leading knowledge of Islamic learning and theology. They issue fatāwā (new religious rulings; singular: fatwā) that allow or prohibit Muslims from consuming particular brands, goods or services (Muhamad & Mizerski, 2013). An example of a famous and greatly revered religious scholar is the Grand Mufti of Saudi Arabia. FM: FRIEND MAKER, a fake brand name for a fictional social media website that is going to be used in the fictional scenarios throughout the thesis. V TL: THE LIFE, a fake brand name for a fictional dancing school that is going to be used in the fictional scenarios throughout the thesis. VI Abstract Religion remains a significant influence in many people’s lives. It affects human behaviour in terms of the demarcation of thoughts, values, moral standards and attitudes. In the literature, religiosity has been shown to affect consumer decision making, ethical beliefs and judgments. However, due to the sensitivity of religion and problems related to theoretical conceptualisation and measurement, religiosity as it relates to consumer behaviour has been under-researched (Cleveland & Chang, 2009; Swimberghe, Flurry, & Parker, 2011). This means that there is still a need to develop a more robust theoretical understanding of how individual religiosity impacts consumer behaviour (Vitell, 2009). This thesis contributes to that knowledge by helping to explain the influence of religiosity on consumers’ perception of risk. Perceived risk is a critical factor in the adoption of new products. In religious societies, newly introduced products may undergo further scrutiny if the offering contains any religiously questionable attributes that may be perceived as potential threats to the religious order. Religious scholars often take positions for or against new products citing religious values and norms. The rulings of these religious scholars often influence the process of adoption of these new products. Nevertheless, with the passage of time, the power of these rulings tends to diminish as the product grows in popularity and is accepted by others. Literature examining the relationship between marketing and intrinsic and extrinsic religiosity has confirmed the impact of religiosity on consumer risk perception by focusing on perceived performance risk. This thesis examines the effect of religiosity on perceived psychological and social risk in a consumption setting. Based on insights from Hunt-Vitell’s general theory of marketing ethics, this thesis conducted two studies using fictional scenarios to address three research questions. Consumer religiosity was conceptualised using the concept of religious motivation (intrinsic religiosity, social extrinsic religiosity and personal extrinsic religiosity). The results confirm that religiosity significantly impacts perceived psychological and social risk. Specifically, Study One examined the direct relationships between each of the religious motivation dimensions and perceived psychological and social risk (RQ1). Through a survey design method, Muslim participants (n = 947) from Saudi Arabia, Australia, Canada, New Zealand, the United Kingdom or the United States answered questions measuring their level VII of religiosity. They were then presented with a fictional scenario about a new product containing a religiously questionable attribute. This was followed by questions measuring their risk perceptions. After that, subjects received another scenario with a different product from a different category to control for any impact of product preference. Scenarios were randomised to control for order effects. A path analysis using structural equation modelling (SEM) was performed to examine the relationships between constructs in Study One. Results confirmed the positive relationship between intrinsic religiosity and both psychological and social risk perception. However, the impact of intrinsic religiosity on perceived psychological risk was stronger than its impact on perceived social risk. Social extrinsic religiosity was negatively associated with perceived psychological risk whereas