The new middle class in emerging markets: How values and demographics influence discretionary consumption

Abstract

The rise of new middle-class consumers in rapidly transforming emerging markets has attracted the attention of Western business executives. What they know about this growing segment of customers will determine whether they succeed or fail in these markets. The present study examines the factors that drive the discretionary consumption of this new middle class, including the effects of consumerist values, religious values, occupation, education levels, and ownership of fixed assets. The study draws its insights from data gathered from 391 new middleclass consumers in Ankara, the second-largest city in Turkey. The findings provide important implications for businesses, both indigenous and foreign. An overall implication is that managers ought to understand and qualify the new middle class in emerging markets not simply by their access to disposable income but by deeper attitudinal and behavioral characteristics. K E Y W O R D S consumerist values, emerging markets, Iceberg Model, new middle class, religious values, Turkey

Impact of the new middle class on consumer behavior: a case study of Delhi-NCR

“…Our study's main contribution is that increase in AI after the economic reform resulted in a transformation of the MC to the bourgeois class and shifted their consumption behavior to discretionary items. The rapidly expanding radius of the NMC in EEs such as India has been attracting Western companies' focus (Belbağ et al , 2019; Kardes, 2016), which are well prepared to grab this augmented class to give tough competition to domestic companies. The positive factor with domestic companies is that they have the advantage of already established relations with local consumers and an understanding of their nature, which international companies might lack.…”

“…Income, wealth, social class differences, education, employment, possession of assets, attitude and preferences are the major players which influence discretionary consumption (Ahmed et al, 2016;Belba g et al, 2019;Cavusgil and Kardes, 2013;Durmaz and Durmaz, 2014;Gilbertson, 2014;Isozaki et al, 2017) and saving behavior of the NMC households in EEs (Avadhani, 1968;Das and Kumar, 2016;Snyder, 1974). The NMC, with good jobs, prefer to invest in healthcare and save for their children's education (Banerjee and Duflo, 2008).…”

“…They are often considered consumerist and politically anti-poor groups (Fadaee, 2014; Nijman, 2006). Most EEs are characterized by their educated, growing new middle-class households, which have experienced significant enhancements in living standards and economic situation (Belbağ et al , 2019). They play a vital role in economic growth, wealth creation (Goodman, 2012) and entrepreneurial development in EEs (Cavusgil and Kardes, 2013).…”

“…In this study, we took variables used in analyzing consumer behavior, including annual disposable income, investment habits, buying/spending habits and lifestyle. These variables are also relevant in assessing emerging markets' economic growth (Belbağ et al , 2019; Cavusgil and Kardes, 2013; Cavusgil et al , 2018). Furthermore, income is one of the demographic factors which has a direct bearing on consumption patterns of different social classes (Ahmed et al , 2016; Durmaz and Durmaz, 2014; Isozaki et al , 2017) and directly influences the living standards and decisions whether to spend or save for the future good (Avadhani, 1968; Bishnoi, 2014; Kumarasinghe, 2017).…”

Conspicuous consumption and hospitality at a wine festival in China

“…While private hospitality space initially functioned for CC and display, commercial venues later incorporated cultural values, beliefs, and norms of behavior as mechanisms for attracting capital and upper-income people to reclaim space for conspicuous consumption. Values, beliefs and behavior such as personal fulfillment and self-indulgence came to be linked to hospitality spaces in more individualized, western societies rather than values such as kinship and friendship (Belbağ et al 2018).…”