The Impact of Relative Deprivation on Consumer
Brand Preferences
Evangelia Pappa
Master Thesis MSc. Marketing Management
The Impact of Relative Deprivation on Consumer Brand
Preferences
By: Evangelia Pappa
S3790827
University of Groningen Faculty of Economics and Business
Department of Marketing
Completion date: 17/06/19 First supervisor: Dr. Sumaya Albalooshi
Second supervisor: M.T. van der Heide
Evangelia Pappa S3790827 Lijnbaanstraat 8
9711RV, Groningen, the Netherlands Ph: +30 6948640288
Abstract
This thesis is reviewing the impact of the feelings of relative deprivation due to financial dissatisfaction on brand preferences. Specifically, we focused our research on two brand types, namely, topdog brands and underdog brands. The literature framework considers the social comparison to be the mediator in this relationship. The central hypothesis is that consumers who are experiencing feelings of relative deprivation will sense the social comparison feeling and will have a higher preference for topdog brands as compared to underdog brands. The results showed that the impact of relative deprivation on the brand type (topdog vs. underdog) is not significant. Social comparison, the hypothesized mediator for this relationship was tested and found to be insignificant. Additionally, this paper considers possible explanations and limitations for these results and concludes with suggestions for future research. Therefore, this research contributes by providing more knowledge regarding the influence of relative deprivation on consumer behavior.
Keywords: relative deprivation, financial dissatisfaction, social comparison, topdog
Acknowledges
This thesis constitutes the final step of my Master program in Marketing Management at the University of Groningen. By taking this step, an enchanting year of studies will conclude as well. Hence, I want to take the opportunity to thank my thesis supervisor Dr. Sumaya Albalooshi, for her patience, her invaluable feedback, and her full support from the beginning of this procedure until the very end. Also, I want to thank my second supervisor, M.T. van der Heide, for taking the time to evaluate and grade my thesis. After, I would like to thank my family, Lefteris, Katerina, Barbara, and my friends, Olga and Christoforos, for constant support. Special thanks to my father Alexandros who is always on my side supporting me in every single decision that I am taking, and my brother Dimitris who is always there to remind who I am and what I am capable of. Likewise, I would like to thank the real survivor of this master, my boyfriend, John, who is always there to support me and believe in me.
Last but not least, I want to thank all the fantastic friends that I made this year, my personal “Marketing Team” who managed to make this year so fascinating for me. Notably, a big thank you to my library roommate, my friend Alberto, for his continuous help and support. It has been a very challenging and demanding year, but all of you have transformed the impossible to possible. Thank you.
TABLE OF CONTENTS
INTRODUCTION ... 6
THEORETICAL FRAMEWORK ... 8
Personal Relative Deprivation ... 8
Social Comparison ... 11
Topdog brands (vs. underdog brands) ... 13
Conceptual model ... 14
METHODOLOGY & DESIGN ... 15
Manipulation of Personal Relative Deprivation ... 16
Manipulation of Topdog brands vs. Underdog brands ... 17
Measurement of Social Comparison ... 18
RESULTS ... 19
Main Analysis ... 19
Moderated Mediation Analysis ... 21
DISCUSSION ... 23
Limitations and future research ... 24
INTRODUCTION
“A house may be large or small; as long as the neighboring houses are likewise small, it satisfies all social requirement for a residence. But let there arise next to the little house a palace, and the little house shrinks to a hut. The little house now makes it clear that its inmate has no social position at all to maintain, or but a very insignificant one; and however high it may shoot up in the course of civilization, if the neighboring palace rises in equal or even in greater measure, the occupant of the relatively little house will always find himself more uncomfortable, more dissatisfied, more cramped within his four walls”
Marx, Wage, Labour, and Capital (1942)
THEORETICAL FRAMEWORK
Personal Relative Deprivation
Personal relative deprivation (henceforth, PRD) demonstrates a condition of anger, dissatisfaction, and resentment that arises from the assumption that one is deprived of a desired and deserved outcome, compared to others who already possess it (Kim, Callan, Gheorghiu, William, and Matthews, 2017; Callan, Shead, and Olson, 2011; Bernstein and Crosby, 1980). In addition to this, Kim et al. (2017) have stated in their research that the feeling of relative deprivation results from a process where the individual engages in a comparative situation, where he or she perceives that he or she is unjustly underprivileged, among relevant others, and this leads to an angry resentment. Therefore, we can realize that the main point of view of relative deprivation is the comparisons that individuals produce in order to experience these unfavorable feelings.
theory, with the equity theory, and with the social comparison theory (Bernstein and Crosby, 1980).
One of the most notable expansions of the model of relative deprivation happened when Sweeney et al. (1990), use the relative deprivation theory to give a reason for satisfaction or dissatisfaction, among individuals, with income and pay level. In fact, in their research, they accomplished to find a direct link between income and satisfaction through relative deprivation. This link became even stronger when the individuals felt that they deserve more money than they already earned, or more money, compared to similar others (Sweeney, Mcfarlin, and Inderrieden, 1990). As a result, we can understand the significance of financial dissatisfaction on people's behavior and how this is directly associated with relative deprivation and can lead individuals to many outcomes. First of all, the dissatisfaction and entitlement that arise from PRD are directly connected, with the pay level and financial (dis)satisfaction (Sweeney, Mcfarlin, and Inderrieden, 1990). Furthermore, monetary dissatisfaction may be the result of risk-related attitudes, like the use of drugs, and other criminal outcomes, such as violent behavior (Baron, 2004). Besides that, when people feel relatively deprived due to financial constraints, an immediate need to change this disparity gap arises. For example, research has shown that people who want to improve their financial position and their degree of satisfaction engage in self-improvement actions, such as the request for better job opportunities (Olson, Roese, Meen, Robertso,1995; Zoogah, 2010). On the other hand, as Callan et al. (2011) had shown in their study, individuals who experience PRD due to monetary dissatisfaction are feeling a higher urge to gamble, as a way to gain instant rewards and narrow this disparity gap. So, individuals enter in delay discounting and prefer to acquire smaller rewards immediately, instead of waiting for more immense future rewards. This finding is very substantial, as it shows how relative deprivation due to financial constraints, results in the vulnerability of individuals.
and ambiguity. Hence, they value more extrinsic goals (vs. intrinsic), such as money, status, and appearance, as a way to reduce the feeling of relative deprivation. Besides this, Tully et al. (2015) have shown that people who feel financially deprived, purchase more material goods than experiences. In addition to this, former studies have shown that individuals with materialistic tendencies value more items that own a public meaning and consumed in public settings (Kamineni, 2005), build substantial connections with brands (Rindfleisch, Burroughs, and Wong, 2008) and that materialistic individuals identify themselves with powerful and successful brands, since they pay more attention to status (McGinnis, Gao, Jun, and Gentry, 2017). In fact, McGinnis et al. (2017) attempted to identify consumers’ motives for underdog brand preferences, and they found materialism to have a negative impact on underdog brands, with a possible explanation of the fact that people with materialistic values have an affection towards winners and not unprivileged brands. Besides that, individuals under the self-threat consume status-related products to restore their psychological condition (Sivanathan and Pettit, 2010). In the current study, we propose, that individuals, who will experience the feeling of relative deprivation, will also experience the social comparison feeling, higher materialistic tendencies, and, all of the negative emotions that we mentioned above. Consequently, they will show a higher preference for topdog brands -market leader brands- in order to mitigate these feelings and restore their adverse psychological condition.
Social Comparison
“Comparison is the thief of joy.” Theodore Roosevelt.
they basically compare themselves with similar or better-off relevant others and that upward comparisons happen faster (Wood, 1989; Ordabayeva and Pierre Chandon, 2010).
Social comparison leads to a plethora of consequences. For example, social comparison with a successful referent can lead individuals to feel more jealousy (Salovey and Rodin, 1984), or more envy (Smith, 2004). Furthermore, social comparison can lead to miserable psychological conditions. Ellaway et al. (2004), have associated social comparison with higher anxiety, higher depression, and lower-self-esteem. Additionally, research has shown that social comparison leads individuals to be less empathic towards others (Yip and Kelly, 2013). However, this is not always the case. Research has also identified positive aspects of social comparisons, such as a hope for better self-enhance (Collins, 1996).
Topdog brands (vs. underdog brands)
Brands are widely accepted as one of the most valuable intangible assets of a company’s long-term success. From a consumer’s perspective, research has shown that people build meaningful relationships with their brands (Fournier, 1998) and that brands offer the opportunity to the consumer to show who she or he is, or who she or he would like to be (Park and John, 2010). From this perspective, consumers use the brands to “construct or sustain their self-concept” (Freling and Forbes, 2005). As such, people do not buy products only for their utilitarian motives but also for their symbolic purposes. Topdog brands are market leaders’ in their product category. They are companies with a plethora of resources that possess strong brands in the market. On the other hand, underdogs, lack the resources of the topdogs and are trying to acquire the position of topdogs in the market.
Underdog brands have gained much importance the recent years in the scientific domain, and there have been many studies that highlight their impact on consumer behavior. Specifically, there are a plethora of studies that argue that consumers prefer underdog brands, out of empathy or as a way of anti-consumption to keep the “weak player in the game” of the market (McGinnis and Gentry, 2009). Moreover, individuals who were primed with feelings of compassion demonstrate a higher preference for the underdog brand (Staton, Paharia, and Oveis, 2012). By contrast, topdog brands have not been investigated to the same extent. Research suggests that people often distance themselves from losers, and associate with winners, known as the tendency, to bask in reflected glory or BIRG (Cialdini, Borden, Thorne, Walker, Freeman, and Sloan, 1976; End, Dietz-Uhler, Harrick, and Jacquemotte, 2002), which can be linked with preferences for topdog brands.
a characteristic that is associated with underdog brands. As such, we argue that the social comparison theory will increase even more their preferences for market-leading brands, which provide status and safety - the topdog brands.
Hypothesis 2: Consumers experiencing high levels of personal relative deprivation (vs. low levels) will show a higher preference for topdog brands (vs. underdog brands), which is mediated by the social comparison experience (Mediation effect).
Conceptual model
Figure 1: The conceptual model
METHODOLOGY & DESIGN
Manipulation of Personal Relative Deprivation
Manipulation of Topdog brands vs. Underdog brands
Measurement of Social Comparison
RESULTS
Main Analysis
A 2 (Personal Relative Deprivation: low vs. high) x 2 (Brand Type: topdog vs. underdog), between-subjects factorial analysis of variance was performed to test our main hypothesis. The statistical analysis was conducted twice to check if there were differences using two dependent variables, namely Brand Attitude and Behavior Intention. First, we conducted the analysis for the dependent variable of Brand Attitude. Contrary to the predictions, the results for the main effects were not significant. Specifically, the main effect of PRD was not significant (F (3,194) = 1.380, p = .242, η2p = .007) and the same was found for the main effect of brand type (Topdog vs Underdog) (F (3,194) = .456, p = .500, η2p = .002). Moreover, the interaction effect of PRD and brand type failed to reach significance on the dependent variable of Brand Attitude (F (3,194) = .120, p = .729, η2p = .001).
Furthermore, the same condition was held for the main effects of PRD and brand type for the dependent variable of Behavior Intention. Specifically, the main effect of PRD was F (3,194) = .010, p = .919, η2p = .000 and the main effect of brand type was F (3,194) = .070, p = .791, η2p = .000. In addition to this, the interaction effect of PRD and brand type failed to reach significance (F (3,194) = .045, p = .833, η2p = .000). Thus, H1 was not supported.
In line with the previous results, the inspection of the means for the dependent variable of Brand Attitude showed no significant differences between the groups. In detail, the means of topdog brand type in low PRD condition (M = 5.43, SD = 1.50) are slightly lower for the high PRD condition (M = 5.56, SD = 1.04). A related situation was also held for the underdog brand type. Particularly, in low PRD condition M = 5.48, SD = 1.15, and, in high PRD condition M = 5.74, SD = .95. However, the total means of PRD indicate a slight difference for low levels of PRD (M = 5.46, SD = 1.30) and high levels of PRD (M = 5.65, SD = .99)
These results also indicate that our main hypothesis is not supported. Different levels of PRD did not influence the participants to brand attitude towards topdog or underdog brand types. The results can be visually seen in the graphs below.
Figure 2: Levels of Brand Attitude
Figure 3: Levels of Behavioral Intentions
Moderated Mediation Analysis
Since our first hypothesis is rejected, and there is no main effect of the relative deprivation on the topdog brand preferences, we suspected that our second hypothesis will be rejected. However, we conducted the moderated mediation analysis using Andrew Hayes’ PROCESS model 15 to confirm our assumption and to test if there are other non-predicted effects. First, we tested the hypothesis for the dependent variable of the Brand Attitude. The Personal Relative Deprivation was the independent variable in our model, the suggested mediator was Social Comparison, and the moderator was the Brand Type (topdog vs. underdog).
Moreover, the model summary of the Brand Attitude as the dependent variable was not significant (F (5,192) = .7844, p > 0.001, R2 = .0200). Also, the main effects of PRD, social comparison, and brand type were found to be not significant (β = .1969, t (196) = 1.1863, p = .2370, 95% CI [ -.1305, .5243]; β = .0922, t (196) = 1.4360, p = .1526, 95% CI [ -. 0344, .2187]; β = -.0822, t (196) = .4916, p = .6235, 95% CI [ -.4122, .2477]). Furthermore, the interaction effect of the PRD and the brand type was not significant, (β = -.1352, t (196) = .4071, p = .6844, 95% CI [ -.7904, .5199]), and the same condition was held for the interaction effect of Social Comparison on brand type (β = -.0039, t (196) = .0301, p = .9761, 95%, CI [-.2571, .2494]).
Lastly, we conducted a moderated mediation again for the dependent variable of the Behavior Intentions. The results indicated no significance. Specifically, the main effect of PRD on Behavior Intentions was β = .0247, t (196) = .1121, p = 9109, 95%, CI [ -.4107, 4602], and the main effect of brand type on Behavioral Intentions was, β = .1289, t (196) = .5795, p = 5630, 95%, CI [ -.3099, .5677]. However, the main effect of social comparison on Behavior Intention found to be significant with β = 2125, t (196) = 2.4901, p = .0136, 95%, CI [ .0442, .3809]. But the interaction effects of PRD on brand type, (β = .0480, t (196) = .1087, p = 9136, 95%, CI [ -.8234, .9194] and, of social comparison on brand type, failed to reached significance β = -.0647, t (196) = .3790, p = .7051, 95%, CI [ -.4015, .2721]).
DISCUSSION
The goal of this research was to investigate how participants that are possessed with relative deprivation feelings respond to different brand types, namely topdog and underdog brands. Topdog brands are market leader brands, which symbolize status and success. On the other hand, underdog brands are small brands that express passion, and consumers are feeling sympathy towards them. Regarding our study, we hypothesized that participants who are facing the feelings of personal relative deprivation would have a higher preference for topdog brands. Our assumption arose from the fact that the individuals who experience relative deprivation, tend to be more materialistic and as a result, favor positively status products. Moreover, since topdog brands are market leader brands that signal status, participants will have a superior inclination to them, as a way to reduce the conflicting emotions that were experiencing. In addition to this, we hypothesized that social comparison is the mechanism that motivates respondents to behave in this specific way since it is a fundamental mechanism for the feelings of relative deprivation.
Specifically, the hypotheses were as follows: H1: Consumers experiencing high levels of Personal Relative Deprivation (vs. low levels) will show a higher preference for topdog brands (vs. underdog brands) and H2: Consumers experiencing high levels of Personal Relative Deprivation (vs. low levels) will indicate a higher preference for topdog brands (vs. underdog brands), which is mediated by the social comparison experience.
Limitations and future research
Manipulation of Personal Relative Deprivation
Manipulation of the topdog vs. underdogs
Measurement of Social Comparison
After the manipulation of personal relative deprivation, either high or low, respondents were presented with the social comparison scale, in order to test our second hypothesis. It is widely accepted that people have a deep-rooted tendency to compare themselves with others. In addition to this, participants who feel deprived engage in social comparison, since it is a prerequisite for relative deprivation feelings (Kim, Callan, Gheorghiu, William, and Matthews, 2017). However, the results of our survey did not prove this relationship.
CONCLUSION
The current research investigated the impact of relative deprivation due to financial dissatisfaction on specific brand types, namely topdogs and underdogs. Our hypothesis stated that individuals who feel relative deprived would have a higher preference for topdog brands as a way to restore their feelings. In addition to this, we hypothesized that the underlying mechanism for this relationship is the social comparison feeling, which constitutes a prerequisite for relative deprivation feelings. As such, individuals who feel relative deprived compare themselves with better-off others, and their inclination towards topdog brands will be even higher, as a way to rebuild their status and surpass their negative feelings. To test these hypotheses, a survey was conducted. The participants were gathered through Amazon’s Mechanical Trunk, and they were United States residents.
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APPENDICES
Appendix A
Insert Income for Low Personal Relative Deprivation Condition
Appendix B
Low Personal Relative Deprivation Condition
“Our online calculator compared your information and income with a large, representative database of individuals who have a similar profile as you do. Based on the information you provided, our calculator identified you as an individual who is financially adequate, relative to others; that is, someone who, relatively, has adequate and sufficient financial resources (i.e., money). We would like you to take a few minutes to reflect and write on how it feels to be in a relatively adequate financial position and to know that, on average, you have sufficient money to use at your will or when required in daily life, relative to those who are financially more constrained. Consider carefully and vividly how your life is with a relatively adequate amount of money and what the consequences of having sufficient money to live a stable life are.”
High Personal Relative Deprivation Condition
Appendix C
Underdog Brand Biography
Delight is a relatively small and new corn flakes brand. Even though they had smaller marketing and distribution budgets, the founders always believed that their dedication and passion would help them overcome the odds and bring their high-quality product to market. Though still relatively less know compared to powerful competitors, they are regarded by critics to be a high-quality corn flakes brand.
Topdog Brand Biography
Delight is a corn flakes brand that is well-resourced and has done well in the cereal industry. The founders have significant experience in the food industry and are known to maintain quality in every step of the production process. As a well-known and powerful brand, Delight is currently the market leader and has been able to maintain its leading position in the market.
Appendix D
Appendix E
Using a seven-point Likert scale participants indicate how much agree or disagree to the following items:
1) I often compare how my loved ones (boy or girlfriend, family members, etc.) are doing with how others are doing
2) I always pay a lot of attention to how I do things compared with how other do things 3) If I want to find out how well I have done something, I compare what I have done with how others have done
4) I often compare how I am doing socially (e.g. social skills, popularity) with other people
5) I am not the type of person who compares often with others (reversed)
6) I often compare myself with others with respect to what I have accomplished in life 7) I often like to talk with others about mutual opinions and experiences
8) I often try to find out what others think who face similar problems as I face 9) I always like to know what others in a similar situation would do
10) If I want to learn more about something, I try to find out what others think about it 11) I never consider my situation in life relative to that of other people (reversed)
Appendix F
- Based on your honest judgement, how attentive were you when completing this survey? Not attentive at all - Extremely attentive
- What is your favorite TV sport? Most people like to watch television programs. Recently, sports television programs have seen a major increase in ratings. Many sports start with the letter 'B'. However, we ask that from the list below you select a sport that does not start with the letter 'B' but starts with the letter 'H'. 1 = Baseball, 2 = Basketball, 3 = Soccer, 4 = Bowling, 5 = Hockey, 6 = Other
