Can you determine what a consumer will buy and how much they will spend based solely on their political views? Yes you can, researchers at one of the world’s most exclusive business schools have claimed.
David Dubois, associate professor of marketing at INSEAD – one of the world’s most highly regarded MBA schools – found distinct spending patterns and shopping behaviours between people with conservative political views compared with those on the opposite side of the political spectrum.
Together with Jeehye Christine Kim of Hong Kong UST Business School and Brian Park of J. Mack Robinson College of Business Georgia State University, Mr Dubois found that conservative shoppers are much more concerned with their social status than liberal ones.
As such, conservatives are much more inclined to buy “luxury” goods.
“This is because conservatives – but not liberals – tend to view these goods as strengthening the stability of their position,” the researchers said in their paper, recently published in the international periodical Journal of Marketing.
As part of their research, the group examined 21,999 car purchases across 51 American states between October 2011 and September 2012, and found a definitive correlation when comparing them with voting intentions.
“We found that Republicans (conservatives) with high social status were 9.8 per cent more likely than high-status Democrats (liberals) to buy a luxury car,” said Mr Dubois.
“Intrigued, we dug a little deeper and discovered that while high-status Democrats spent $29,022 on average, their Republican counterparts were spending $33,216 on cars. For luxury car sellers, that meant a median difference of 14.45 per cent increase in sales to conservative customers.”
In another experiment, a group of 403 Republican and Democrat voters were shown one of three ads for the same eyewear. One of the ads pushed the message of maintaining social status, another was about enhancing status, while the third made no mention of status at all.
While people on both sides of the political spectrum displayed a greater willingness to pay for the eyewear connected to social status, Republicans were much more interested in the ad maintaining their existing status, rather than enhancing it.
“This also indicates that conservatives’ greater desire for luxury goods does not stem from ‘keeping up with the Joneses’ but rather from a strong urge to maintain their social standing,” the paper said.
According to the researchers, the implications of this finding are vast for businesses selling products or services labelled with the luxury tag.
“This is a very accessible tool for luxury brands. Political affiliations can be determined along geographical lines – and there are tons of granular data easily accessible that enable brands to enact a segmentation based on political ideology,” said Mr Park.
Mr Dubois added: “External shocks like economic crises or a threat to status can produce a surge in interest for conspicuous consumption, in particular, beauty and appearance products – a phenomenon referred to as ‘the lipstick effect’.”
“These findings suggest that the lipstick effect may be stronger among Republicans than Democrats.
“Republican consumers are susceptible to economic or political uncertainty because conservative ideology naturally tends towards the conservation of the hierarchy and the preservation of status,” he said.
- Opinion: Why do so many claim to represent small businesses?
By Adam Zuchetti
- Opinion: House prices not all doom and gloom
By Adam Zuchetti
- Analysis: How can SMEs realistically stay competitive?
By Adam Zuchetti