Culture influences consumer habits

Dubai: Dubai being home to multiple nationalities across the globe has set path-breaking trends when it comes to analysing purchasing habits of consumers. These habits are predominantly influenced by the cultures they come from.

Prof Janakiraman, Director, IMT Dubai, lighting the lamp during the inauguration ceremony as Dr V. Kumar, Dr Bibek Banerjee and others look on. — Supplied photo

This was stated by a group of experts in a recently released research in Dubai on the sidelines of the 3rd Academy of Indian Marketing-American Marketing Association (AIM-AMA) Sheth Foundation Doctoral Consortium and Emerging Markets Conference 2015.

Based on the theme ‘Marketing Communication Strategies and Consumer Financial Decision Making: The Role of National Culture,’ the research empirically tested both the direct effect of national culture on consumer’s financial decision making and its moderating effect on the link between a firm’s marketing efforts and a consumer’s decision making.

The experts empirically tested their hypotheses using a customer database from a multinational financial services firm based in the UAE, with customers from 34 countries. They found that national culture directly affects consumer’s financial decision making and moderates the impact of marketing efforts by the financial services firm, which suggests that financial services firms should account for national culture when managing customers.

Dr V. Kumar, Georgia State University, USA and co-founder of AIM, said: “The research indicates that consumers frequently make important financial decisions that have short-term and long-term impacts on their welfare. Consumers’ financial decisions are based on their past experiences, interactions with financial services firms as well as their long-term priorities.”

The research determines how three cultural dimensions (long-term orientation, uncertainty avoidance, and masculinity) and marketing communication type (promotion focused versus prevention focused) affect three key consumer financial decisions: (1) savings rate, (2) use of credit, and (3) spending pattern.

Firms can leverage consumers’ national culture, thereby increasing the effectiveness of marketing efforts on consumer financial decision making.

According to the research, customers from countries that are higher in long-term orientation (LTO) are more likely to have a higher savings rate, whereas customers from countries that are higher in uncertainty avoidance are less likely to use credit. It states that customers from countries that are higher in masculinity are more likely to spend more relative to their income level.

sandhya@khaleejtimes.com