In this study, the homogeneity versus heterogeneity of global consumption is tested in a cross‐cultural price/brand effect model. Middle‐class consumers in two countries are compared: the USA, an established consumer society, and India, a recently developing consumer society. Focus groups demonstrate the tremendous importance of brands in India, but survey data suggest that, compared to Americans, Indians actually have a lower perception of brand quality. They need to be convinced of standardized quality. Indians are, in addition, more positive than Americans about economizing. This implies that they feel guilty about consumption. These differences between Americans and Indians influence how price and brand affect their different purchase decisions: the Indian is a much tougher consumer to whom to sell. The results suggest that consumption, while it is becoming global, is still heterogeneous. It is being interpreted and implemented differently in different cultures.
Although cluster analysis is the procedure most frequently used to define data-based market segments, it is not without problems. This research addresses one of its major problems: the selection of the "best" subset of variables on which to cluster. If this selection is not made carefully, "noisy" variables that contain little clustering information can cause misleading results. To help isolate potentially noisy variables prior to clustering, the authors discuss a new algorithm, the Heuristic Identification of Noisy Variables (HINoV). They demonstrate its robustness with artificial data. In addition, the authors illustrate the potential of HINoV to yield more managerially useful market segments (clusters) when applied to two real marketing data sets. Implementation of HINoV is straightforward and will help avoid a major problem in using K-means cluster analysis for market segment definition, as well as for other similar types of research.
Social norms have been recognized as an important influence in long‐term relational exchange between firms. It is here argued that social norms are equally important in short‐term discrete exchange that takes place between firms and consumers. The norms of consumer exchange are, however, of a different kind. To clarify the difference, a classification system is presented. Based on the classification, the social norms of discrete consumer exchange are defined and a method of quantifying these norms is proposed. This method should help in the ongoing effort to understand how the social macro‐environment influences individual behavior in dyadic exchange.Gundlach, Achrol, and Mentzer (1995)) note a recent shift in the marketing research paradigm toward a concern for the social determinants of economic exchange behavior. As they point out, this shift requires the analysis of often ambiguous concepts. One of these concepts is that of the social norm. Marketing researchers have recognized that social norms are a valuable explanatory variable. Their influence has been depicted in marketing models (e.g., Bagozzi 1978: Kalapurakal. Urbany, and Dickson 1992), tested in relational exchanges (e.g., Dant and Schul 1992; Heide and John 1992; Kaufmann and Stern 1988), and cited in the marketing orientation literature (e.g. Hurley and Hull 1998: Slater and Narver 1995).The focus here is on the social norms of economic exchange, a subset of the social norms of a given society. In economic exchange, the investigation of social norms has considered primarily the norms of long‐term, relational transactions common in inter‐firm exchange. Little‐research has considered the social norms of the more short‐term, discrete transactions common in exchanges between businesses and consumers. However, Kaufmann and Stern (1988: 535) suggest that norms “exist in all exchange behavior, from very discrete transactions to highly relational exchange.”The identification of the social norms of discrete consumer exchange is important to the understanding of the social structure of markets. On a practical level, it also helps marketers minimize consumer hostility. For example, consumers were outraged when Merck distributed its AIDS drug through a channel that charged a 37% markup (Wall Street Journal,May 7, 1996: B1). Merck did not consider the social norms that evidently sanction a 300% markup by consulting firms but not a 37% markup by distributors of pharmaceuticals. To avoid such blundering infractions of social norms. it behooves sellers to understand the social norms of discrete consumer exchange.
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