An expanded price/brand effect model ‐ A demonstration of heterogeneity in global consumption

Abstract

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.

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