A tale of two marketplaces: Consumption restriction, social comparison, and life satisfaction
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A tale of two marketplaces: Consumption restriction, social comparison, and life satisfaction Ronald Paul Hill & Kelly D. Martin & Lan Nguyen Chaplin
Published online: 27 April 2012 # Springer Science+Business Media, LLC 2012
Abstract Analysis with reports from more than 56,000 consumers across 38 countries reveals that social comparison (upward/downward) moderates the relationship between consumption restriction and life satisfaction. Specifically, insufficient access to goods and services combined with the likelihood of making upward social comparisons lowers life satisfaction—this negative consequence also is exacerbated by poverty. Most studies focus on wealthier consumers given importance of material abundance to affluent lifestyles; this investigation suggests that materialism also influences lives of impoverished consumers. Challenging our conventional wisdom, these results reveal that social comparisons are significantly more powerful determinants of life satisfaction for people in much poorer, developing societies than for people in more affluent societies. Specifically, compared to their affluent counterparts, impoverished consumers experience greater decreases in life satisfaction when their access to goods and services is lower than others within their societies. Keywords Life satisfaction . Global consumption . Poverty and restriction . Hierarchical linear models
1 Introduction Traditionally, marketing to the world’s poorest people was considered uneconomical and unprofitable by most corporations. However, there has been increasing interest in understanding market potential of impoverished communities worldwide (e.g., Prahalad 2006; Dhobal 2006; Subrahmanyan and Gomez-Arias 2008). According to a 2007 R. P. Hill (*) : L. N. Chaplin Marketing and Business Law Department, Villanova University, 800 E. Lancaster Ave., Villanova, PA 19085, USA e-mail: [email protected] K. D. Martin Marketing Department, College of Business, Colorado State University, Fort Collins, CO 80523, USA
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report by the IFC (private sector arm of the World Bank Group) and World Resources Institute (WRI), the poorest among us and referred to as bottom-of-the-pyramid (BOP) consumers have a purchasing power of $5 trillion. This BOP segment is not to be ignored—in fact, in developing countries, more than 50 % of purchasing power resides in this subpopulation (Guesalaga and Marshall 2008). Subrahmanyan and Gomez-Arias (2008) have found that despite income and resource constraints, BOP consumers are sophisticated and creative. They are motivated by survival and physiological needs, but surprisingly they are also motivated to fulfill higher order desires to build social capital for cultural reasons or as a compensatory mechanism (Hill 2001). As such, multinational enterprises seeking growth and sustainability are carrying products and brands to new and diverse markets in emerging economies, under the assumption that it holds promise as well as strategic advantage over competitors (Prahalad 2006). So
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