Investigating the Effect of Income in the context of Economic
Inequality on Consumers’ Preference for Partner or Servant Brand
Relationships.
University of Groningen Faculty of Economics and Business
MSc Marketing Management Master Thesis
Completion date: 12 January 2019 First supervisor: Dr. Sumaya Albalooshi
Second supervisor: Dr. J.C. Hoekstra
Stylianos (Stelios) Matsagkos S3466388
Theodorus Niemeyerstraat, 1 9726 BR, Groningen, The Netherlands
Abstract
Economic inequality impacts every aspect of our daily lives. It can produce health and economic problems but also problems on a societal level. Previous research has shown that only with the mere exposure of inequality consumers’ behavior can change dramatically. However, there is not much known about the specific preferences and consumer attitudes that formed when people are influenced by high levels of inequality. This research relies on previous literature in order to map consumers’ behavior as a result of inequality. Economic inequality has direct impact on the social behavior of members of various social groups within the societal hierarchy. Inequality creates a sense of insecurity and uncertainty therefore it is assumed that this is also the central motivation for people to change their behavior. The most common brand relationships that can be found in the context of high inequality are the servant and partner relationships among social groups. Because consumers also form relationships with brands it was hypothesized that those relationships are the most salient for our research. Our first hypothesis assumes that high income individuals are searching for servant-like brand relationships while low income individuals search for partner-like brand relationships. Those at the top of the social hierarchy are expected to give directions to those at the bottom to complete an assignment, forming servant-like relations within the different hierarchical levels. The results from our first study reveal that income does not play a significant role in our relationship but there is a preference for servant brands in high inequality context and a preference for partner brands in low inequality context. Furthermore, this research hypothesizes that the underlining mechanism that drives the whole relationship of consumer behavior in this context is the fear of status loss. For our second analysis status is incorporated into the research model because income inequality forces people to seek for status. However, the results of this analysis do not reveal that status can play a role in this relationship but this comes with great limitations from our side.
Preface & Acknowledgments
I hereby present you my thesis, the final work for the Master of Marketing Management at the University of Groningen. The research begun from September 2018 it took approximately five months to complete and finished in January 2019.
I would like to personally express my sincere gratitude to dr. Sumaya Albalooshi for her patience, the time and support that she showed me. Also, I would
like to thank in advance my second supervisor dr. J.C. Hoekstra for reading and grading my thesis.
Finally, I would like to thank my friends for their support but especially I would like to thank my family and Kyriaki Timosidou because without their valuable help and
Table of Contents
1. Introduction………5
2. Theoretical Framework………...7
2.1 Inequality and Desire to Maintain Status Among High-Income Individuals………7
2.2 The Threat of Status Loss in the Context of Inequality………..8
2.3 Relationships in the context of inequality………...10
2.4 Consumer Brand Relations and their Effects on High-Income Groups…...11
3. Hypotheses………...13
4. Conceptual Model………13
5. Methodology………14
5.1 Manipulation of Inequality……….14
5.2 Marketing Communication Framing………...…...15
5.3 Sense of Status………16
5.4 Mood………..16
5.5 Comprehension & Attention Check………17
6. Results………..17
6.1 Attention & Comprehension Check………17
6.2 Reliability Analysis………17
6.3 Manipulation Check………...18
7. Main Analysis………..19
7.1 Mood………..22
8. Discussion………22
9. Theoretical & Practical Implications………26
10. Limitations and Suggestions on further research………..26
11. References………28
1. Introduction
Economic inequality has been escalating since the 1960s and now research shows that in the western societies it has already reached a new peak, with no sign of slowing down (Newman, Johnston & Lown, 2015; Keister & Moller, 2000; Davies, Sandström, Shorrocks & Wolff, 2009). High inequality is often connected with increased homicide rates (Daly & Wilson, 2001), lower expectancy of life (Wilkinson & Pickett, 2009a) mortality (Zheng, 2012) and negative economic repercussions (Lansley, 2011). In the same tenor, Kawachi and Kennedy (1999) found that economic inequality is connected with increased death rate, illnesses and governmental corruption.
From the evidence available in the literature, we can easily infer that high economic inequality can produce health, and economic problems but also problems on a societal level. These societal problems caused by economic inequality appear both between different societies and between social groups (Rajan & Lines, 2010). These issues can be translated in reduced social mobility and opportunities, but also the fragmentation of society into smaller subgroups (Jetten, Wang, Steffens, Mols, Peters & Verkuyten, 2017a; Andrews & Leigh, 2009).
Despite the extensive available research on inequality in relation to consumption, less is known about it in regards to consumer behavior. That is why this research focuses on the impact of economic inequality on consumer – brand relationships. The connection of these concepts may seem irreconcilable at first, but it makes more sense when you examine it within the framework of inequality. Specifically focusing on how inequality inspires a sense of threat to the people and how it subsequently shapes consumers’ perceptions of their relationship with brands. Because of the significant impact of economic inequality, the realized consumer – brand relations can vary in nature. Therefore, this research will concentrate on the relationship with brands as servants or as partners (Fournier, 1998), in order to avoid generalizations.
2. Theoretical Framework
2.1 Inequality and Desire to Maintain Status Among High-Income Individuals
Apart from the negative economic repercussions and instabilities that economic inequality may elicit at a societal level, it also evokes different reactions from people within different social groups (Jetten et al., 2017a). When talking about economic inequality, we can make a polarized distinction between two main levels. Those who possess more material resources and greater income and occupy the top ranks of the societal levels, also known as high class individuals and those people that come from a lower class, the lower rank, and have fewer opportunities and scarce resources (Kraus, Piff, Mendoza-Denton, Rheinschmidt & Keltner, 2012; Piff & Robinson, 2017). Surprisingly, inequality can have a great impact on high-class individuals, because it inspires a tendency to make comparisons between themselves and others, at the expense of the latter (Newman et al., 2015). These comparisons result in a feeling of superiority towards others and in the end, they believe that because of their high incomes they are more prominent individuals in unequal societies (Campbell, Bonacci, Shelton, Exline & Bushman, 2004). This entitlement that they feel, makes the high-income classes believe that they are more important than the others and therefore they legitimately deserve more opportunities and resources (Zitek, Jordan, Monin & Leach, 2010).
We can infer from the above that in the context of inequality, people have the tendency to seek status so as to avoid the negative consequences of loss of status. High status people feel entitled to have wealth, and in an effort to protect their status, they legitimize inequality to a certain extent (Hays & Blader, 2017). This tendency is also suggested by the findings of Corak (2013), who shows that the bigger the income differences the more important the pursuit of status becomes (Corak, 2013). As the income differences become bigger, the significance of status is amplified. (Corak, 2013). The findings of Wilkinson and Pickett (2017) are also in consistency with this notion. The found that when inequality arises people set an importance on their social position and status (Wilkinson & Pickett, 2017). And that is because economic inequality limits perception of social mobility (Andrews & Leigh, 2009) and therefore the importance of maintaining status is amplified (Corak, 2013). Thus, individuals not only strive for status (Buss, 2008), but they also try to secure it (Hays & Blader, 2017). On a societal level nothing is unchangeable. High-status people can earn the admiration of the others but they can also lose it (Marr & Thau, 2014). Findings indicate that for those people even the possibility of losing their status poses a threat. (Marr & Thau, 2014).
2.2 The Threat of Status Loss in the Context of Inequality
Werfhorst, 2013). In general income inequality forces people to seek status and generates status anxiety because of the potential negative implications that come from it (Paskov et al., 2013).
The two strands of the social ladder, the high and low status groups, behave differently in the context of inequality. On the one hand the low status individuals try to gain status and on the other hand high status individuals try to preserve the already achieved status (Ellemers, Doosje, Van Knippenberg & Wilke, 1992; Harvey & Bourhis, 2012). This behavior from the side of the high-status groups can be explained by the feeling of entitlement which characterizes them and from the desire to be respectful and distinguished (Hays & Blader, 2017; Loughnan et al., 2011). In the same line Newman et al. (2015) found that the negative feelings and threats, that high-income individuals may experience, urge them to preserve their status. Ehrenreich (1990), talked about the so-called “fear of falling”; in other words, the fear that someone can experience when they decline in hierarchy. For high status groups the fear exists due to the instabilities of the economy (Jetten, Mols, Healy, & Spears, 2017b). They feel that they will lose their “occupied ground” together with their status quo and finally their whole status (Jetten et al., 2017b; Minescu & Poppe, 2011). The aforementioned literature suggests that people at the top of the hierarchy are more worried for their social status than the low status groups (Marr & Thau, 2014).
2.3 Relationships in the context of inequality
In the context of inequality, money can relief the status anxiety of high-income individuals due to the attribution of status that usually comes with it. Though, what happens to the low-status groups in similar economic conditions is not so clear. This is mostly because of the difficulty and the costs that they face in order to keep holding on to their already depleted status (Côté, House & Willer, 2015). This situation might act as a trigger for high-income individuals and raise concerns regarding the potential loss of their already occupied status (Côté et al., 2015). As a result, people who belong in the upper social levels act more selfishly and do not share resources with others in situations of inequality (Côté et al., 2015). Inequality alienates people (Lancee & Werfhorst 2012) and has an effect in interpersonal relationships (Wilkinson & Pickett, 2010). More specifically, inequality provokes comparisons among social levels and as a result there is a reduction in cooperation among people (Nishi, Shirado, Rand & Christakis, 2015). Literature also reveals that inequality fragments society into smaller groups (Jetten et al., 2017a), people have fewer interactions and forming strong relations becomes rare (Rothstein & Uslaner, 2005). At the same time, a drop-in trust levels and cooperation among people in society can also be observed (Elgar, 2010; Oishi et al., 2011; Rothstein & Uslaner, 2005).
on these results one could argue that the interpersonal relationships that people form under conditions of high-inequality could spillover and have an impact on the kind of relationships consumers wish to have with brands.
2.4 Consumer Brand Relations and their Effects on High-Income Groups
Research shows that consumers can create relationships and connections with brands with the same ease that they can form relationships with others in a social context (Fournier, 1998). The relationships consumers build with brands are numerus, and can vary from general and vague to more specific ones (Fournier, 1998). For instance, some consumers view brands as partners or even servants among others (Fournier, 1998).
Kim and Kramer (2015) focused on the relationships between consumers and brands and how partner and servant roles insinuate social and hierarchical differences in social stratification. With that in mind this paper will only focus in those two roles since hierarchical differences are salient and observable in the context of inequality because of the larger income differences. Inequality provokes social comparisons, status competition and challenges the stability of hierarchical structures (Bowles & Park, 2005; Walasek & Brown, 2015; Wilkinson & Pickett, 2009a). Hierarchies make social ranks more salient and they can also imply the type and load of work that people in each level are expected to do (Yukl & Fu, 1999). More specifically, the people at the top of the hierarchy are expected to give directions on how to complete an assignment to those at the bottom, forming servant-like relations within the different hierarchical levels (Yukl & Fu, 1999). The same thing is happening precisely for the relationships between consumers and their brands (Dong & Aggarwal, 2016).
& Thau, 2014). This fear triggers feeling of insecurity among them, in regards to the potential loss of their superior standing (Scheepers et al., 2009). Insecurity drives people to look for dominance and power in their relationships with others (Bartholomew & Horowitz, 1991). High-income individuals feel that their status quo is threatened and they experience feelings of insecurity and fear (Marr & Thau, 2014; Scheepers et al., 2009) and search for servant-like relationships (Cole, 2004). That is because servant relationships include dominance and entitlement (Cole, 2004).
Another noteworthy point is that inequality harms intergroup relationships (Wilkinson & Pickett, 2010) and this paper suggests that this can also have an effect on brand relationships. Evidence have shown that high status individuals in general have the tendency to behave selfishly (Dubois, Rucker & Galinsky, 2015). It has also been suggested that “status and power can be causally related” (Magee & Galinsky, 2008). Meaning that status can lead to power and vice versa (Magee & Galinsky, 2008). In the same vein, the findings of Ridgeway (2014) pinpoint that “social status is an indirect route to power”. In response to previous observations, power can diminish the reliance to others and thus people who possess power are able to satisfy their desires and needs without depending or cooperating with others (Keltner, Gruenfeld & Anderson, 2003). Partners by nature are the “co-producers” which means that there is an inherent cooperation with these types of relationships (Aggarwal & McGill, 2012). In contrast to partner relations, the servant roles depict better the characteristics that people who possess status are searching for, because those roles indicate that the external agent provides the benefit (Aggarwal & McGill, 2012).
relationships and social life to prefer them over partner-like brand relationships (Kim & Kramer, 2015). Consequently, this paper also argues that only with the mere exposure to high inequality high income individuals will prefer servant like relationships with their brands.
3. Hypotheses
Taking into consideration the reviewed literature we can form two hypotheses. We expect that high-income people, when exposed to the context of high inequality, become status conscious and in order to protect their statue they will choose brands as servants. Also, we can hypothesize that only with the mere exposure in the context of high inequality high-income individuals will prefer brand relationships as servants. More formally:
H1: High income individuals (vs. low-income) when exposed in the context of inequality (vs. low inequality) they prefer servant-like (vs. partner-like) relationships with their brands.
H2: High income individuals (vs. low-income) when exposed to the context of high inequality (vs. low inequality) they try to protect their status and thus they prefer servant-like (vs. partner-like) brand relationships.
5. Methodology
This study aims to prove that high income consumers in the context of high inequality will try to maintain and protect their status through identifying brand relationships. More specifically, it is argued that high income individuals in the context of high inequality will choose servant-like relationships with brands in order to maintain their status. Furthermore, this research will try to shed light on the preferences of high-income individuals in regards to brand relationships without taking into consideration the status factor, but only with the mere exposure of the people in conditions of high inequality. More precisely, the paper argues that high income individuals only with the mere existence of high inequality will choose servant-like relationships with brands.
In total 200 participants (84 males, 115 females and 1 other, Mage = 35.5) were
recruited from Amazon Mechanical Turk to take part in this study in exchange for a monetary compensation of 1.2 US Dollars. Participants were randomly assigned to a 2 (Income: high vs. low) x 2 (inequality: high vs. low) x 2 (brand relationship: servant vs. partner) between-subject factorial design.
5.1 Manipulation of Inequality
wealth and Wealthiest fifth of the population owns 81% of private wealth) and some others a pie chart with low inequality and more equal distribution of the wealth (Poorest fifth of the population owns 11% of private wealth, Second poorest fifth owns 15% of private wealth, Middle fifth owns 18% of private wealth, Second wealthiest fifth owns 21% of private wealth) which corresponded to the state which was declared as their home state (Appendix A). To make the data more realistic and increase the robustness of the study, the survey indicated that those data were retrieved by the US Census Bureau’s 2018 Economic Census that gather their data from a representative number of US-households.
In the following step, the survey checked if the participants understood what they saw in their pie chart. There were questions about the interpretation of the pie chart that they were shown (Appendix B). This step operated as an attention and interpretation check of the manipulation. Next, we checked if the manipulation had had the desired results with the follow-up questions. The questions were about their understanding of inequality levels in their home state, to what extend they felt that indeed they lived in an unequal state and finally how satisfied they were form the current situation of their states.
5.2 Marketing Communication Framing
(partner, servant and control) remained unchanged except from the message. The messages being displayed, clearly embodied servant characteristics (Low Battery? Enka works for you to ensure that you are never out of reach. Leave it to us to charge your mobile devices anywhere at any time. – Enka: At your service with portable charger solutions) (Appendix C) and partner characteristics (Low Battery? Enka works with you to ensure that you are never out of reach. Together we can charge your mobile devices anywhere and anytime) (Appendix D). After the participants read the ads they completed a small survey according to the procedure of Aggarwal, (2004). They answered questions related to their attitudes toward the advertised brand and were measured on seven items with a seven-point likert scale (Unfavorable – Favorable, Negative – Positive, Bad – Good, Unappealing – Appealing, Do not like at all - Like very much, Unpleasant – Pleasant, Not Likeable – Likeable). The participants then rated to what extent the brand that they had seen, inspired servant-like, partner-like or neither of those relationships as a manipulation check (Appendix E).
5.3 Sense of Status
After the random assignment in the conditions of servant and partner advertisements. We measured the desire to maintain status of the respondents with the three following questions “Obtaining the portable charger from Enka enables me to express my social status”, “Obtaining the portable charger from Enka enables me to differentiate myself self from others”, “Obtaining the portable charger from Enka enables me to express my dominant advantage” in a 7-point Likert scale.
5.4 Mood
5.5 Comprehension & Attention Check
In the end of the survey the participants were exposed to a question that had to do with their focus and attention during the whole procedure of the survey. More specifically they were asked to answer the following question: “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'.” and we provided the below answers (Baseball, Basketball, Soccer, Bowling, Hockey, Other). The final question was to check if they had drawn the proper attention for the whole survey.
6. Results
6.1 Attention & Comprehension Check
The 200 respondents had to answer questions about comprehension and attention which allowed us to check if they understood clearly all the parts of the survey. More specifically in the first part of the survey respondents answered questions about the comprehension of the pie chart of inequality (high or low) that we projected to them. The pie chart was combined with a question in order to check their attention in the end of the survey. Fourteen respondents were excluded because they failed to comprehend or pay attention to the question check.
6.2 Reliability Analysis
Attitude was measured by means of 7 items. All the items were in a seven-point Likert scale (Unfavorable – Favorable, Negative – Positive, Bad – Good, Unappealing – Appealing, Do not like at all - Like very much, Unpleasant – Pleasant, Not Likeable – Likeable). We aggregated the items and the reliability analysis revealed that the scale was highly reliable (α = .97)
the advertisement inspires. The items were measured on a scale from 1 (Not at all) to 7 (Extremely Likely). After the aggregation of the 3 components the reliability analysis revealed that the scale was reliable (α = .88)
6.3 Manipulation Check
To test if the manipulation of economic inequality worked, three t-tests were conducted. First, their perceptions of inequality was tested by their random exposure to the pie chart. In other words, the pie chart tested if the participants who were exposed to high inequality conditions, perceived the wealth allocation in their state of residence less equally distributed (M = 1.24, SD = 2.17) compared to those who were exposed to the low inequality condition (M = 3.84, SD = 2.88). From the results we can infer that indeed those who were exposed in the high inequality condition perceived the wealth allocation less equally distributed (t (184) = 6.91, p < .001).
Additionally, participants were asked to evaluate the extent to which they felt that their state of residence is suffering economically. Participants in the low inequality condition felt that their state is suffering less economically (M = 5.75, SD = 2.48) compared to those in the high inequality condition (M = 6.81, SD = 2.39). Those results are seemingly believable but they are not significant (t (184) = -2.97, p = .721). At last participants in the high inequality condition indicated that they were less satisfied with their state of residence (M = 2.65, SD = 2.37) compared to those in the low inequality condition (M = 4.49, SD = 2.68). Those results also seem to comply with our manipulation check but they are not significant (t (184) = 4.95, p = .217). Overall, because the first check was significant we can assume that the manipulation worked. The other two measures (Suffering and Satisfaction) were merely additional measures.
(184) = -9.45, p = .832). Subsequently, we asked participants to indicate if the projected advertisement elicited partner brand roles. The respondents who were exposed to the partner stimuli found that the ad elicited servant-like relationships (M = 5.43, SD = 1.51) compared to those who were exposed to the servant stimuli (M = 4.04, SD = 1.67). Again, the results are seemingly compliant with what was expected, but they are not significant (t (184) = 5.93, p = .254). Lastly, the participants had to specify to what extend they believe that the advertisement does not elicit a relationship, neither servant nor partner. Participants who were exposed to the partner stimuli (M = 2.69, SD = 1.63) had almost the same response with those who were exposed to the servant stimuli (M = 3.31, SD = 1.78). They both agreed that the advertisement elicited some kind of relationship. Yet once again, the results seem to not be significant (t (184) = -2.44, p = .286).
7. Main Analysis
To test the first hypothesis (H1) that the high-income individuals have higher preference for servant relationships with their brands in the context of high inequality we subjected the respondents to a 2 (income: high vs. low) x 2 (brand relationships: partner vs. servant) x 2 (inequality: high vs. how) between-subjects factorial design. The Hayes model 3 was used to test this 3-way interaction between inequality, personal income and brand roles. The interpretation of the results shows that the main interaction between the income, inequality and brand relationships is not significant, b = .00, SE = .00, t(178) = 0.95, p = 0.34, 95%CImean-differences [.0000, .0000]. The obtained results revealed insights about the two-way interactions. More specifically we found that the interaction between inequality and income b = .00, SE = .00, t(178) = -.33, p = 0.74, 95%CImean-differences [.0000, .0000] and the interaction between income and brand relationships b = .00, SE = .00, t(178) = -1.44, p = 0.14, 95%CImean-differences [.0000, .0000] were not significant. However, we found an unexpected two-way interaction between inequality and brand relationships b = 1.12, SE = .32, t(178) = 3.42, p < .01, 95%CImean-differences [.4749, 1.7654] which is significant.
the interaction between inequality and brand relationships is significant (M = 13.34, F(1,182) = 11.03, p = .001, η2p = 0.57). The contrast analysis in two-way ANOVA revealed that in low inequality condition participants evaluated the Partner-like brand relationships more favorably (M = 5.98, SD = .159) than the Servant-like brand relationships (M = 5.35, SD = .160, F(1,182) = 7.6, p = .006, η2p = 0.40, 95%CImean-differences [.178, 1.069]). In the condition of High Inequality is the analysis revealed the opposite relationship between the two groups. Participants evaluated the Servant-like brand relationships more favorably (M = 5.92, SD = 0.166) than the Partner-like brand relationships (M = 5.48, SD = .160, F(1,182) = 3.7, p = .05, η2p = 0.20, 95%CImean-differences [- .904, .007]) which was marginally significant. Figure 1 displays the relationships between the two conditions.
Figure 1: Levels of estimated marginal means of attitude per condition
than they preferred a servant brand. While in the high inequality condition they preferred a servant brand significantly more than they preferred a partner brand.
The results of the first analysis do not confirm our first hypothesis. We had predicted that the personal income moderated by inequality would play a role in the preference of brand relationships. Therefore, the personal income did not play a role in our model. Instead we found that there is an interaction between inequality and brand roles, which was an unexpected but meaningful result. Inequality, affects people’s preference for brand roles regardless of people’s income.
Initially the second hypothesis (H2) presented the assumption that high Personal Income moderated by high Inequality and mediated by the desire of high-income people to maintain their sense of status would eventually drive people to choose servant-like relationships with their brands. But given the unexpected results of the two-way interaction between inequality and brand relationship from our first analysis we wanted to run a mediation analysis to see whether the effects of inequality are driven by a sense of status, regardless of people’s personal income. It is already known from the results of the first experiment that the personal income does not play a role in the relationships of our model. For that reason, personal income was excluded from the second experiment and instead a moderated mediation with Hayes model 7 was conducted. The respondents were subjected to 2 (inequality: high vs. low) x 2 (brand relationships: partner vs. servant) between-subjects factorial design mediated by the sense of their status.
7.1 Mood
A growing body of research shows that mood can play a significant role on people’s attitude. Research suggests that positive mood can increase the attitude towards a brand (Barone, Miniard & Romeo, 2000). Moreover, the presence of inequality can affect mood because both of them are related with income levels. Oishi et al., (2011) found that low levels of income combined with high levels of inequality make people unhappy. Additionally, another research has shown that high income individuals feel happier when they perceive that they experience high levels of inequality (Graham & Felton, 2005). Additionally, depressed or unhappy people consume more products than relatively happier consumers (Garg, Wansink & Inman, 2007).
In order to see if the variable of mood is significant for our analysis we aggregated the three components of mood into one variable (How do you feel right now? : Sad – Happy, Stressed – Relaxed, Angry – Calm). The results of the Reliability analysis revealed that the scale was reliable (α = .88).
To test the impact of mood in our model we conducted a two-way ANOVA between inequality and brand relationships but this time we incorporated also the mood variable in the model. The results of the ANOVA revealed that mood (M = 18.2, F(1,181) = 16.3, p = .000, η2p = 0.83) is significant. Even if mood is significant, it does not have an impact on the interaction. However the interaction between inequality and brand relationship (M = 13.5, F(1,181) = 12.1, p = .001, η2p = 0.63) remains significant. The above analysis has shown that even after controlling the effects of mood the interaction between inequality and brand role remains significant.
8. Discussion
people to form specific directional relationships with each other. Wilkinson & Pickett (2010) similarly found that inequality has an effect in interpersonal relationships. While Fournier (1998) indicated in his study several similarities between the way people formulate social and brand relationships. That drove us to search for the brand relationships being formed in the context of inequality. Status differences which are prominent inside the inequality, trigger individuals at the top of the hierarchy to give instructions to those at the bottom of the hierarchy on how to carry out tasks, forming servant-like relations within the different hierarchical levels (Yukl & Fu, 1999). This study guided our decision on which two relationships, namely servant and partner, are more preferable for this study. At a later stage this research explored if status worked as an underlining mechanism that drove this interaction, taking into account income, inequality and brand relationships. These elements were selected because as the income gap increases, so does people’s anxiety for their social position and as a consequence high income people search for different ways to maintain their status (Paskov et al., 2013).
important role in in the context of inequality but it is not always the factor that will drive people to consume or to form relationships with their brands.
From the analysis of our data we may not have found an indication that income plays a role, but we found an unexpected and meaningful interaction between inequality and brand relationships. People in high inequality condition showed a preference for servant relationships with their brand while people in the low inequality condition showed a preference for partner relationships with their brands. The fact that respondents had that preference only with the mere exposure to inequality or equality but independently of their level of personal income it was also probably because of the nature of the brand relationships that they were exposed to. High-income individuals feel insecure, and they search for dominant relationships (Cole, 2004). But seemingly insecurity is not a feeling perceived only by high-income individuals. Inequality creates the feeling of uncertainty when it comes to people’s social position (Wilkinson & Pickett, 2017). Also, individuals experience higher levels of stress and anxiety in the context of great inequality (Pickett & Wilkinson, 2010) which results to the feeling of insecurity. This feeling of insecurity drives people to look for dominance and power in their relationships with others (Bartholomew & Horowitz, 1991). These findings do not specify neither the social position of individuals nor their level of personal income. In other words, one explanation of people’s preference is the feeling of insecurity that it is embodied in conditions of high inequality. Thus, from the results of this study we can infer that the position in the social strata and additionally the income, which functions as a motor to upgrade our social position, does not play a role in the formation of brand relationships. Inequality triggers the feeling of insecurity in every societal level and not only the high-income individuals. It is apparently perceived by all individuals to the same extent.
et al., 2013). Also, the gap between income differences is maximized in conditions of high inequality and the significance of status is amplified. (Corak, 2013). We concentrated especially in the high-income individuals because inequality acts as a trigger for high-income individuals and raises concerns regarding the potential loss of their already occupied status (Côté et al., 2015). However, the results of our second study clearly indicated that there is no relationship between status and brand relationships. Previous research indicates that status is a crucial factor in the context of inequality. In our study, status does not play a role probably because the product that we used for our manipulation was a portable charger. The respondents were presented with a product that seemingly does not give status to its owner. There is a wide range of prices and types of portable chargers and usually they tend to be a cheap gadget. In general, this is not a product that can easily give status to an individual particularly considering that there is no indication of the price of the product. People who seek status are willing to pay higher prices in order to achieve it (Goldsmith, Flynn & Kim 2010).
someone is in that position, they have the desire to exert control. The nature of the brand relationships that they had to choose from, was such that they probably felt they can exert control on a servant brand, but not on a partner brand. For the condition of low inequality, we speculate that the preference for partner brands is higher because those people do not feel that they lack control and thus they do not want to exert any control on others. All these suggestions require further investigation and they can function as food for thought for the next researcher.
9. Theoretical & Practical Implications
This research has also theoretical and practical implications. First of all, this research comes to add another insight in the growing body of research in the impact of economic inequality in people’s lives but also in their daily decisions. Also, it gives further knowledge for marketeers about understanding people’s preferences inside the context of inequality.
Furthermore, the research has practical implications. We show that “people who were exposed in the context of high inequality prefer servant like relationships with their brands and the people that were exposed in the condition of low inequality prefer partner like relationships with their brands.” In other words, this study shows that people form brand relationships in the same way that they form social relationships when they are operating in the context of inequality. Marketeers can take an advantage of this knowledge and use it for better and more targeted marketing strategies in areas with economic inequality.
10. Limitations and Suggestions on further research
been sufficient. It could be interesting to explore the results of a similar study, for a larger sample and draw conclusions based on their comparison. Additionally, the results suggested in multiple occasions that even though the manipulation check created the intended tendency, it was not found significant. This could be due to the product depicted in the advertisement or the tagline used. A different advertisement could potentially offer more significant results regarding the interaction between inequality and brand relationships. From the manipulation check questions related to Inequality, only one was found significant. The questions were focused on determining the conditions of inequality on a state level. Maybe including manipulation checks that address the issue on a personal level could prove to be more effective. Furthermore, the limitations regarding the timing of the survey should also be mentioned. The survey was conducted after the Thanksgiving holiday and before Christmas. These two holidays are very important for the majority of the population in the US and are associated with overconsumption and relatively positive mood among consumers. It could be interesting to explore and compare the results of a similar research conducted on a different time period. Future research can account for all the cited limitations and potentially run an analysis for a different country other than the US.
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12. Appendix
Appendix A
- Low Inequality Pie Chart
Appendix B
Manipulation Check
Appendix C
Appendix D
Appendix E
