Equality-Embracing Consumers Shop More Impulsively

October 22, 2009

This article is included in these additional categories:

Analytics, Automated & MarTech | Asia-Pacific | CPG & FMCG | Europe & Middle East | Retail & E-Commerce

Americans who philosophically believe in equality among individuals are more impulsive shoppers and are more likely to make a spur-of-the-moment purchase than those who believe in power disparities, according to a new multi-country study from Rice University‘s Jones Graduate School of Business.

The study, “Power-Distance Belief and Impulsive Buying,” was authored by Rice management professor Vikas Mittal, et. al. and recently was accepted for publication in the American Marketing Association’s Journal of Marketing Research.?

Power-Distance Belief Measurement

The focus of the study, Power-distance belief (PDB), is the degree of power disparity the people of a culture expect and accept, according to Mittal, who measures it on a scale of zero to 100. The higher the PDB, the more a person accepts disparity and expects power inequality.

The research found that consumers’ PDB levels vary by the country in which they live and the socio-economic and political climate in that country. For example, Americans have a low PDB score relative to people in more restrictive countries such as China and India.

The study then correlated the PDB scores with shopping-related behaviors and found that those with higher PDB scores tended to exhibit more self-control and are less impulsive when shopping.

“In our studies, people with low PDB scores spent one-and-a-half times the amount spent by high-PDB individuals when buying daily items like snacks and drinks,” Mittal said.

More Pronounced Effect for Vice Goods

This effect was even more pronounced for “vice goods” – tempting products such as chocolate and candy – than for “virtue goods” like yogurt and granola bars, the study found. The researchers hypothesized that people with low PDB scores – who also should have lower self-control – would show even stronger impulsive buying for vice goods because of their desire for immediate gratification. Indeed, the researchers found low-PDB people spent twice as much on vice goods as high -PDB people spent.

Mittal added that though these findings apply to everyday consumables such as candy, they may have even more striking implications for even bigger-ticket items. “We know that 80% of luxury-good sales in the US are impulsive,” he said.

How Americans Stack Up

On the PDB (Geert Hofstede’s Cultural Dimensions), the US scores at a low 40 compared with Russia (93), the Philippines (94), Singapore (74), China (80) and India (77).

Austria (11), Germany (35) and New Zealand (22) also score low, whereas Japan (54), Vietnam (45) and South Africa (49) score more in the middle.

“We should emphasize that even within a single country or culture, you will find that individuals differ in terms of their PDB and self-control tendencies,” Mittal noted, adding that firms dealing with multicultural markets can apply knowledge about consumers’ cultural background of PDB or a chronic measure of PDB to adapt their advertising, promotions and displays.

“Marketers need to ascertain whether their products or brands are viewed by different consumer segments as virtue or vice products,” he said. “Our study shows that vice products will be more susceptible to impulsive buying among low-PDB consumers.”

About the research: For the study, the Mittal and the research team conducted multiple experiments and surveys. In one large-scale survey, they asked 901 Americans to provide measures of their PDB, or their attitude toward equality. The average annual income of the survey participants was $50K. Then, the researchers observed the participants’ online shopping behavior by giving them $10 to purchase a selection of items and telling them they could keep any unspent money.The study was co-authored by Karen Page Winterich, assistant professor of marketing at Texas A&M University, and Yinlong Zhang, assistant professor of marketing at the University of Texas, San Antonio.

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