What are the 4 different types of psychological science of consumer behavior?

Internationalization and Culture-Specific Consumption Preferences

Consumer behaviour theory assumes that consumers usually do not focus on the product as a whole, but on a combination of different product characteristics or attributes, which can be either concrete or abstract. Concrete product attributes are defined as being measurable in physical units (e.g., colour), whereas abstract attributes are an aggregation of several concrete attributes. Because of the consumers’ selective and subjective allocation of cognitive resources, abstract attributes are perceived differently by each consumer. Thus, the main element of abstract attributes is that they are subjective in nature, as with style or taste (Olson and Reynolds, 1983; Reynolds and Gutman, 1984).

Whether the consequences brought about by attributes are positive (benefits) or negative (risks) depends on the consumers’ personal values, which are defined as enduring beliefs that specific modes of conduct or end-states of existence are personally or socially preferable to opposite modes of conduct or end-states of existence. The expectation of achieving a personal value through the usage of a certain product is the actual buying motive (Grunert, 1994; Reynolds and Gutman, 1979).

Therefore, the formation of several preferences for certain products depends on values which people acquire during the process of socialization. Through this process, which starts within the family and continues through school and then throughout life, people develop their values, motivations and habitual activities. Furthermore, humans learn through imitation and by observing the process of reward and punishment to discover which values and what kind of behaviour is approved by a society (Engel et al., 1995). This process of socialization usually takes place against the cultural background, so that socialization also is the process of absorbing a culture (Kroeber and Kluckhohn, 1952).

The cultural level includes all kinds of different manners people learn while being brought up in certain society (e.g. the language, the physical distance from other people we keep to feel comfortable, the kind of food people eat, the drinks that people pair with food, how the food is prepared and the way food is eaten at a particular time of the day) (Hofstede, 1984; Hofstede and Hofstede, 2005). Hence, consumers from varying cultural backgrounds perceive food differently (Osinga and Hofstede, 2004).

Even if, through the globalization of markets, migration and worldwide web usage, cultural differences seem to decrease, culture-specific consumption patterns still exist (Craig et al. 2005; Watson et al., 2002). One extreme example of culture-specific consumption patterns is that of ethnocentrism. This behaviour is often motivated by patriotism and apparently rational, economic reasons in that the purchase of domestic products stimulates the economy and creates jobs, whereas purchasing foreign made products is viewed as harmful to the local economy and causes domestic unemployment (Orth and Firbasová, 2003). The recent OIV data (2015) indicates that more Chinese wine is drunk, possibly replacing imports.

All in all, consumers’ respective cultural backgrounds have some impact on market entry strategies as more or less all marketing instruments are affected by culture. For example, consumers’ willingness to pay is especially affected by their cultural background (Rewerts and Hanf, 2009a). The willingness to pay represents the valuation of products. Because consumers learned during the process of socialization which products they should approve of and which they should not, the socialization and thus the transmission of culture influences the appreciation of certain products as well as the willingness to pay (Rewerts and Hanf, 2009b). Another example is that culture can have an effect on the choice of certain types of wines which are preferred due to (religious) beliefs. Therefore, culture-specific preparations of food and culture-specific usage situations generally have to be considered in product development (Rewerts and Hanf, 2009a).

11 Empirical Validity

Do data on consumer behavior reflect the properties that theory postulates? In the case of demand functions for a single good the properties of interest are the negativity in the response to a change in the own price for the good in question and the homogeneity condition, implying no response to an equiproportional change in income (budget) and the prices. Usually negativity does not create serious problems and the demand equations in estimated form readily display this property.

Statistical tests tend to be less lenient for the homogeneity condition. This is somewhat puzzling because of the plausibility of this property, which is sometimes interpreted as the absence of a monetary veil. Homogeneity justifies the proposition that allocation of means is based on relative prices rather than on absolute ones, which is a central issue in microeconomics. Many reasons have been advanced to explain away this dilemma such as inappropriate data, specification errors (absence of explicit dynamics, for instance), and the use of incorrect test statistics. Correction of some of these shortcomings appears to have achieved some success.

In the case of systems of demand equations explaining demand for a set of goods simultaneously, negativity does also not create a serious validity problem, but homogeneity is less easily accepted. Additional properties of empirical interest here are Slutsky symmetry and separability. Symmetry appears to agree with the data. This may be more a matter of the wide confidence intervals of the estimates of the estimated Slutsky coefficients than of the truth of the symmetry hypothesis itself. Separability of preferences has such attractive properties for applied work that it is frequently used in spite of its demonstrated lack of empirical validity.

Also in consumer analysis, theory and application are being handled in a balanced way, reflecting doubts about both theory and facts and about the procedures to reconcile them.

Behavioral Economics: Nudges

The economic understanding of consumer responses to prices and income and the policy proposals for new subsidies or taxes and supply interventions all rely on an economic theory of consumer choice. A lively body of current economic research investigates situations where consumers do not behave rationally, perhaps leading to opportunities for ‘nudging’ consumers toward more healthful choices (Thaler and Sunstein, 2008).

Neoclassical theory predicts that consumers will eat less when the marginal cost of an additional unit – the price to the consumer – is higher. They will tend to overeat at an all-you-can-eat restaurant, because the marginal cost of additional food is zero, no matter what the entry price of the meal. Yet, surprisingly, recent research found that consumers of an all-you-can-eat pizza meal actually consumed more pizza if the price of the meal was higher (Just and Wansink, 2011).

These differences between actual consumer behavior and traditional economic assumptions about rational behavior do not mean consumers are irrational or foolish in the everyday sense of the term. Instead, these behaviors may show that consumers need to simplify the cognitive burden of difficult decisions by following predefined heuristics or ‘rules of thumb.’ Some of these heuristics are the subject of considerable research:

Default offerings may affect consumer choices. For example, if a quick service restaurant chain includes milk by default in children's meals, customers may agree to purchase the milk with the meal. Yet, if the chain includes soda by default, the customers may more frequently keep the sugar-sweetened beverage rather than make a special effort to request milk.

Distractions also may affect consumer choices. For example, it has been found that consumers who were required to make other decisions at the same time were more likely to choose cake over fruit salad, whereas consumers who were not distracted were more likely to choose the healthier offering (Shiv and Fedorikhin, 1999). Hunger or time stress also may affect people's decisions.

This new approach to behavioral economics has raised some hopes for inexpensive nutrition improvements, by making subtle changes to the setting or environment in which choices are made. For example, some suggest that students in school meals programs might make better decisions if the location of the salad bar were altered, or if a different tender (cash or school meals program card) were required for different products. This approach also has generated renewed scrutiny of the empirical evidence for other health policy proposals, such as taxes on less healthy food or new labeling rules for restaurants (Loewenstein, 2011). Of course, many of the same lessons can also be used by food marketing professionals to promote food options with any health profile. Future research will determine whether these new tools of behavioral economics make a small or big difference for consumer choices. And, if the effect is big, future developments in both social and commer cial marketing will determine whether the changes are helpful for dietary quality. In either case, the willingness to scrutinize assumptions and follow the empirical evidence in new directions is entirely good news for future research on the economics of nutrition.

3 Social Movements and Green Parties

Environmental concern and green consumer behavior do not directly engage the individual in the political process. This is different where people support particular pressure groups and parties, or join in protest activity, to campaign for specific environmental policies or for a general green worldview. The analysis of environmental politics thus includes environmental political behavior at the individual level, but it also focuses on the behavior of groups and parties.

The politicization of the environment in Western Europe was chiefly the role of a new generation of protest movements that started to emerge in force in the 1970s. This new phenomenon attracted the academic attention of a fairly wide range of social scientists. At first, descriptive case studies of specific incidents of protest or environmental conflict were the main approach. But by the late 1970s and early 1980s, the notion of ‘new social movements’ had emerged as the dominant paradigm. The 1980s and 1990s saw a very substantial development of this field. The cross-national comparison of environmental social movements became a major focus; the reception of key elements of US social movement theory, in particular the ‘Resource Mobilization’ approach, led to more sophisticated research designs and theoretically informed empirical studies.

Methodologically, the study of protest events became a very influential approach, particularly for cross-national comparisons. Another key feature of empirical research was the study of individual movement participants and group members, their social backgrounds and motivations. Studies of environmental groups as organizations, based on national and cross-national surveys of such groups, focused inter alia on network formation and interrelationships with other political actors (Dalton and Kuechler 1990, Della Porta and Diani 1999, Rootes 1999, Rucht 1991).

One of the most significant aspects of the politicization of the environment is the rise of ecological and green parties. After party formation in the 1970s and 1980s, such parties entered parliament in most West European countries during the 1980s and 1990s (the main exceptions being Norway, Denmark, and Spain); by the late 1990s, green parties had entered national government in Italy, Finland, France, Germany, and Belgium.

Green parties have attracted substantial research efforts, both in the form of major national case studies and cross-national comparisons. Much of the cross-national analysis has focused on the influence of aggregate factors such as electoral systems and economic conditions on the green parties' development. There is also a wealth of empirical national and cross-national studies on green ideology, the internal structure of green parties, their members and activists, and green voting (Delwit and De Waele 1999, Kitschelt 1989, Richardson and Rootes 1995).

Introduction

Since the inception of the economic reforms in 1978, China has become one of the world’s fastest growing economies. According to China’s National Bureau of Statistics, it has experienced economic growth with an average GDP of 9 per cent every year since 1990. Its GDP per capita doubled to $6100 (38,354 yuan) from 2009 to 2012, confirming its status as a middle-income nation, according to the World Bank’s standards set in 2011. In 2012 its GDP reached 51.93 trillion yuan (US$8.28 trillion) – the second largest in the world (China National Bureau of Statistics).

After years of rapid growth generated by investment and exports, more recently China has been looking to restructure its economy. In May 2012, the government shifted its top priority from taming inflation to stabilizing growth by encouraging domestic spending and consumption. The focus on domestic economic growth has driven a dramatic rise in consumer spending. Retail sales for 2012 increased to 20.7 trillion yuan (US$3.3 trillion). Urban residents spent 17.9 trillion yuan in 2012 while rural residents spent 2.8 trillion yuan (China National Bureau of Statistics).

This rapid economic growth has resulted in a transformation of consumer behaviour, and the subsequent rise of consumerism in China has garnered worldwide attention, particularly from business and marketing. The world’s leading research and consulting companies have released a number of reports on China’s rising consumerism, particularly on China’s newly emerged middle class.1 These reports highlight China’s growing middle class and expanding consumerism, suggest potential strategies for global corporations to tap into the Chinese market, and predict sales growth in China. The middle class is hailed as the new and growing market force for both Chinese and global markets. According to a PriceWaterhouseCoopers (PWC) report, China was the world’s second-largest online retail market, after the United States, in 2011, with sales totalling $120 billion (MGI, 2013). Meanwhile, the term ‘middle class’ has become ubiquitous in popular media, with discussions of ‘being middle class’ primarily focusing on the economic aspirations of the middle class themselves. The media and business sector’s fascination with China’s middle class has also constructed it on economic grounds.

A small number of studies about Chinese consumer behaviours have noted that professional middle-class status and identity are increasingly shaped around a new set of collective interests related to access to resources and modes of consumption.2 This chapter examines consumer behaviour among the middle class from the findings of a survey initially conducted by the author in Beijing in 2005 and continued in subsequent years.3 It discusses how consumption of commodities and cultural products enables the display of a middle-class identity. The study does not argue that consumerism is the sole factor in defining cultural and social practices and the attributes of middle-classness; rather it explores how middle-classness is constructed through rising consumerism and middle-class consumption of specific commodities.

The primary concern of this chapter therefore is the role consumerism plays in the lives of the middle class through everyday practices and experiences. Consumerism is used as a lens through which to interpret middle-class identity, culture, and values. Following this broad line of inquiry, this chapter specifically raises the following questions: What factors decide the consumption of middle-class consumers? What particular patterns do they show in consumption? Has a consumer culture formed among the middle class? If so, will consumerism allow middle-class individuals and groups to create their identities? Though consumption is not the sole factor through which to interpret and understand China’s middle class, it sheds light on everyday practices and experiences that shape people’s culture. Ultimately, through discussions of middle-class consumption of print media, cultural productions (e.g., television programmes, films, exhibitions), commodities, and housing, this chapter intends to understand how consumerism (in addition to family, cultural, social, and economic values) shapes the collective identity of the middle class and their articulation of middle-classness. How is middle-classness realized through consumerism alongside cultural practices and everyday life? How does access to global goods and commodities shape discourses on middle-class ways of life? And how and why has being middle class become desirable and possible?

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