Effects of culture on consumer utility

• Main Authors: Sng, Han Xiang, Nah, Zhi Wei, Yang, Daniel Zhilong
• Other Authors: Goh Kim Huat
• Format: Final Year Project
• Language: English
• Published: 2012
• Subjects: DRNTU::Business::Marketing::Consumer behavior
• Online Access: http://hdl.handle.net/10356/48315
• Institution: Nanyang Technological University

Transaction utility theory argues that consumers do not just consider only the value of the goods and services in respect to the price paid; they take into account their own perception of the quality of the transaction made as well. This has led to further investigation of this theory on its effects on consumers. Since then, marketers have effectively utilized this knowledge to offer promotions and discounts to entice their audience. However, there seems to be a lack of cultural studies on consumer purchasing behavior in relation to their transaction utility and the transaction utility theory by Richard Thaler does not have adequate provision for it. In this paper, we seek to fill the gaps through an examination of the concept of transaction utility and culture. We conducted experiments where we first used priming to prime the participants towards the cultural norms of either the Eastern or Western culture. Priming was done by showing the participants a range of pictures that was closely associated with the culture. For example, in the Western context, participants were shown images such as the Statue of Liberty, Captain America whereas in the Eastern Context, the images were those of Great Wall of China, Mooncake Festival etc. The use of priming is known to have a salient effect (Tulving, Schacter, & Stark, 1982). Further research have also proven that bicultural people who are exposed to iconic images of one culture temporarily display characteristics biases of that culture (Hong, Morris, Chiu, & Benet-Martinez, 2000). The results we gathered showed that easterners generally have a steeper utility curve than westerners and easterners get more aroused in promotional deals than westerners. Our study will hope to provide relevant stakeholders such as marketers in gaining better insights to reach their target segments through a more effective use of price and promotions.