Evaluating Status Consumption: The Relationship Interpersonal Influence And Technology Consciousness

Yeşim Can ,
Oya Erdil

Abstract

With the increasing competition in the global smartphone market, to attract the attention of the consumer and raise consciousness compared with competitors has become important factor for sustainable competitive advantage. On the other hand, continuing sales is among the goals of brands. Brands in the smartphone market are striving for creating technology consciousness in consumer mind by adding new technological features to their smartphones in line with this goal. In this research, the relationship between interpersonal influence, technology consciousness, and status consumption was investigated. A survey was conducted on 273 university students, as its’ usage is more common among university students. The result of the analysis indicated that normative influence has a positive effect on technology consciousness and a meaningful relationship exists between technological consciousness and status consumption. Another finding is that informative influence does not have a significant relationship with technology consciousness. The research’ theoretical and practical implications were also given.

Keywords: Interpersonal influencestatus consumptiontechnology consciousnesssmartphone

Introduction

In recent years, with globalization, there has been a dramatically escalation in usage of smartphones. Smartphone market is one of the booming segments of telecommunications (Kim, Chang Park & Lee, 2015). According to Washington-based Pew Research Centre, Turkey is among the countries where smartphone usage rates are rising fastest. At the same time, this rapid increase in smartphone usage has also provided many benefits for individuals. The smartphone not only enables quick and easy spreading of information, but also saves time for individual (Anshari et al., 2016). Individuals use smartphone to satisfy practical needs (such as searching), as well as hedonic needs (such as personal use, entertainment purposes) (Petruzzellis, 2010).

In terms of businesses, the rapid spread in the use of smartphones has become in the spotlight of brands and many brands have emerged in the global competition. The comprise of many brands in smartphone market also brought with them increasing competition conditions. To become a judge in the market and to increase sales, brands have searched for ways to make a difference against their competitors. Apart from creating brand resonance, comprise consciousness is gaining importance. Smartphone brands have created different features or customization in their products (Keller, 2013). Some brands have made efforts to raise consciousness in consumer through augmenting novice technological properties to their product. Striving to profit growth via raising sales by adding varied technological innovations to brands' products have attracted the attention of the consumer. A new technological feature creates technology consciousness, just like fashion consciousness in the changing fashion. Technology consciousness, which tends to follow changing technology, has opened up opportunities for more sales to brands.

When looked at buying behavior of individuals, it can be said that smartphone is being bought for how good it looks or for to what extent it is a status indicator. These reasons also fall within the scope of hedonic needs (Filieri & Lin, 2016). In addition to individual's needs and consciousness of new technology, it is also concluded that buying behavior is exhibited for reaching status or prestige. Consumption behaviour is not only influenced by prestige or status, but also by the social effect. Interpersonal influence is the subject of social effect that is being worked on in many ways. The effect of interpersonal influence on fashion consciousness and status consumption has been examined and positive relationships have been found in previous research (Lertwannawit & Mandhachitara, 2012). The relationship between technology consciousness, consumer’s this status consumption and interpersonal influence is one of deficiencies in the literature. Therefore, there are two main purposes of this research in order to fill this gap in the literature;

This research is intended to be applied younger generation consumers in the smartphone market. Turkey is among the top fifteen countries in smartphone usage in the world and its usage rate shows a rapid increase compared to the years (e-Marketer, 2014). Technological adherence is more common among younger generation (Vishwanath & Goldhaber, 2003). For this reason, this research has been carried out on younger generation and students who are enrolled in universities have been identified as the sample.

Literature Review and Theoretical Framework

Status Consumption

Consumption is a social process that provides communication information as a demonstration of status and prestige (Brooks & Wilson, 2015). In order to understand consumer behavior, firstly it is necessary to understand environmental and structural elements that motivate individual consumption. According to the theory of needs, human needs are unlimited and can be examined in two categories: material needs (like protection, survival, etc.) and social or psychological needs (like respect, desire to belong etc.). After the material needs are met, modern communities feel more social or psychological needs (Jackson, 2005).

Consumers purchase products for various reasons. In 21st century the thinking of status and prestige has become widespread and the concept of status consumption has emerged (O'Cass & McEwen, 2004; Goldsmith, Flynn, & Kim, 2010; Kim & Jang, 2014). Status consumption is a type of consumption based on products, which are visible, by environment. Visibility is important for status consumption. For this reason, status consumption researches have focused on luxury products or fashion products (Lertwannawit & Mandhachitara, 2012). Consumers perceive use of prestigious products as a sign of status and wealth. Brands, which are prominent and distinctive, are preferred to obtain visible status by consumers (Vigneron & Johnson, 1999). According to Verhallen and Robben (1994), if product is available with a limited number in the market, this increases demand for product with popular, unique and expensive perception. This perception results in increasing product status in the consumer's eyes. Moreover, products, which have low prices, are conceived as low status (Sadalla & Krull, 1995) and socially it does not have importance (Welte & Anastasio, 2009).

Social comparison theory proposed that, individuals incline to compare themselves with other people. This comparison affects individual's willingness to something (Festinger, 1954). It also motivates individual status consumption by influencing his/her attitude towards objects, and object evaluation (Roberts & Jones, 2001).

Status is an important indicator of societal existence (Winkelmann, 2012) and status indicator varies based on individual's socio-economic background. From a marketing standpoint, meaning of the status as a concept for brands is based on interaction with people (such as the desire to be included in a group), product characteristics (such as best quality) and hedonic value (perceptual beauty). (Vigneron & Johnson, 1999). Brands are engaged in marketing activities for status consumption with branding strategy, which is a status indicator, considering values that individuals give to the status (Andrus, Silver, & Johnson, 1986). In this study, in an attempt to better comprehend status consumption, the antecedents of status consumption will be examined.

Susceptibility to interpersonal influences

Interpersonal influences are based on mutual influence, whether or not individuals are aware. Previous research indicates that the direct effects of individuals on each other can be seen clearly in complex purchasing behaviors and brand preferences (Lascu et al., 1995). Interpersonal influences have a direct impact on attitudes, values, norms, purchase desires and behaviours of individuals. Prior research has assessed interpersonal influences as a general feature that exist in each individual (Bearden, Netemeyer & Teel, 1989).

Researchers working on interpersonal influences deal with this concept as social influence. Social influence is a symbolization and interpretation of other people’s behaviour (Hohenschwert & Geiger, 2015). Interpersonal influences, also known as social influence, is examined in two categories as normative and informative influence (Mangleburg, Doney, & Bristol, 2004).

The relationship between interpersonal influences and consumption of luxury products (both normative and informative effect) has been investigated in previous research (Shukla, 2011; Kastanakis & Balabanis, 2012). Although a lot of research exists about the effect of interpersonal influences on status consumption (Lertwannawit & Mandhachitara, 2012; Jamal & Shukor, 2014), there is not much research about the direct effect of normative and informative influence on status consumption (Clark, Zboja, & Goldsmith, 2007).

Technology Consciousness

Today, technology is rapidly changing and competition is global. Thanks to technological possibilities that are evolving, consumer expectations and desires are also rapidly changing. Brands are trying to adapt at changing market structure. To maintain their lives, they innovate their products and raise consciousness compared to their competitors (Ince, Imamoğlu, & Türkcan, 2016). Technological innovation that brands make in their products provides a sustainable competitive advantage to the brand (Guan & Ma, 2003). Technological innovation can provide a new market for the brand both by increasing product profile and by existing segment of the market (Sharma, Davcik, & Pillai, 2016).

Technology has a flexible construction just as fashion. Individuals receive the latest product model to pursue the agenda (Miller, Cowan, Cowan, & Hetherington, 1993). In recently, fashion sector has gained a strong momentum in the direction of growth. The reason for this momentum could be based on consumers’ evolving attitudes towards fashion. It can be seen that consumer's fashion awareness is higher when compared to the past and they are keeping up with the fashion of the day (Casidy, 2012). Constantly changing fashion arouses curiosity in the consumer mind. They always want the latest model. If they could not reach the latest model, they feel unhappy (Lertwannawit & Mandhachitara, 2012; Firat, 1991).

Consumers are aware of technological innovations that technological product brands are making in their products, and their curiosity about this innovation is increasing. In this study, technology consciousness refers to awareness of the individual towards changing and renewing technology and tendency to follow it. Today technology is changing rapidly. This changing technology is increasing consumption of individual products. In this study, technology consciousness is considered as a sensitivity of an individual to take on a new product that emerge with changing technology.

Figure 1: Conceptual Model of the Study
Conceptual Model of the Study
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Conceptual Framework and Hypotheses

Normative Influence and Technology Consciousness

Normative social influence indicates the tendency of the individual to conform positive expectations of others. Others may be either a person or a group (Deutsch & Gerard, 1955). According to previous research, consumers' consumption habits are influenced by interaction with others and social environment. (Bearden et al., 1989). Consumers are influenced by other people and prefer differentiated products (Ariely & Levav, 2000). In addition, consumers can change their preferences in order to make a positive impression on others (Ratner & Kahn, 2002). Filieri and Lin (2016) examined the effect of subjective norms on re-purchase intention in smartphone marketing. Subjective norm is another name used for interpersonal influence. Filieri and Lin have preferred using the holistic norm as a whole, without discriminating between informative and normative. According to findings of their study, subjective norm has an important influence on repurchase intention.

In the process of consumer purchasing behavior, consciousness is very important (Keller, 2013). The impact of interpersonal influence on status consumption is well known from previous studies (Lertwannawit & Mandhachitara, 2012; Clark et al., 2007; Jamal & Shukor, 2014). Lertwannawit and Mandhachitara (2012) examined fashion market and the effect of interpersonal influence on fashion consciousness and status consumption in dress sector. When looked at the smartphone market, fashion consciousness is turning into technology consciousness. Individuals are becoming sensitive to changing and renewing technology, and this technology, which renews itself, increases desire of individual for consumption. In addition, previous research indicates that there is a direct relationship between normative influence and consumption (Clark et al., 2007; Shukla, 2011). Therefore, we developed the hypothesis that expresses the relationship between normative ınfluence and technology consciousness:

H1: Normative influence is positively related to technology consciousness.

Informative Influence and Technology Consciousness

Informative social influence is the tendency to accept knowledge acquired from others as correct and reliable. (Bearden et al., 1989). A number of studies have shown that interpersonal influence has an important effect on decision-making process (Mourali et al., 2005). Interpersonal influence depends on willingness of the individual to accept knowledge, which they receive from others (Kelman, 1961). According to Park and Lessing, individuals acquire information in two ways: by consulting people who have knowledge or by observing behavior of individuals (Shukla, 2011).

When consumers buy a product, they consider the idea that is more common than their own thoughts (Ratner & Khan, 2002). According to the social effect theory developed by Argo, Dahl and Manchanda (2005), other consumers in the consumption process directly affect consumers. Since consciousness is directly affecting consumption, marketers' efforts to raise consciousness in order to increase consumption are becoming increasingly important. In the smartphone market, brands are trying to create technology consciousness in order to catch consumer’s attention and multiply their sales. We have established the following hypothesis to determine whether there is a relationship between technology consciousness and informative influence that expresses the tendency to correctly accept knowledge acquired from others in technology consciousness:

H2: Informative influence is positively related to technology consciousness.

Technology Consciousness and Status consumption

Because market is a constantly self-renewing dynamic structure, individuals follow change and motivate themselves to adapt at changing structure (Miller et al., 1993). This change in fashion leads consumers to become fashion conscious. Just as consumers are fashion conscious, technology conscious is emerging for self-renewing and changing technology products. Making technological innovation in products for brands have become inevitable in a competitive environment (Wu, Pangarkar, & Wu, 2016). Brands are creating consciousness for consumers by adding a new feature to technological product and trying to increase demand for their products. Lertwannawit and Mandhachitara (2012) have examined the effect of fashion consciousness on status consumption. In their study, they found that there is a significant positive correlation between fashion consciousness and status consumption. Goldsmith et al. (2010) have indicated that fashion involvement has a mediator effect on the relationship between price sensitivity and status consumption. Similar to these studies, it has been suggested that technology consciousness has a mediator effect on the relationship between interpersonal influence and status consumption:

H3: Technology consciousness is positively related to status consumption.

H4: Technology consciousness mediates the relationship between normative influence and status consumption.

H5: Technology consciousness mediates the relationship between informative ınfluence and status consumption.

Research Methodology

Measurement Development

We conducted a survey to test the research model and hypotheses. All scales used in the research have been adapted from past studies. All questions were measured with a five-point Likert scale (1. Strongly disagree ... 5. Strongly agree).

Normative influence refers to tendency of individual to adhere for positive expectations of other persons and informative influence refers to accept information obtained from others as correct and reliable. Susceptibility to interpersonal influences questions, consisting of a combination of normative and informative influences, have been adapted from the study of Bearden (1989) and Shukla (2011), where normative influence is measured with four items, informative influence with three items. Technology consciousness represents individual's sensitivity to changing technology. It has been adapted from the fashion consciousness scale included in the research of Lertwannawit and Mandhachitara (2012). Technology consciousness scale consists of five items. Status consumption has been adapted from the study of Eastman, Goldsmith, & Flynn, (1999). It refers to consumption of status or specific used products. The status consumption scale consists of five items. Table 1 shows scales and related studies in the research model.

Table 1 -
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Sample

Pew Research Center has conducted a survey to determine smartphone usage rates. The use of smartphones is quite high among people aged 18 and 34 in Turkey. Moreover, this ratio is about 93%. This result revealed that in general, most young people use smartphones. All the students who are educated at the university as well as who use smartphones have selected as a research sample. The reason for this choice is that the majority of young people use smartphones in general. Students who are undergraduate, graduate and doctoral education participated in this research. As a result of research, we obtained 273 data from students. When looked at the result, it can be seen that majority of the participant (roughly 44%) uses IPhone. Samsung comes in second rank (30.4%) and LG (10.3%) as a third rank. Table 2 demonstrates demographic characteristics of the participants.

Table 2 -
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Result and discussion

Measurement validity and reliability

Exploratory factor analysis was applied after data were collected. Bartlett’s Test of Sphericity, which shows the existence of an adequate correlation between the values ​​of Kaiser-Meyer-Olkin and variables for factor analysis, is also significant at p <.001. Total explained factor was 62.422%. Moreover, confirmatory factor analysis was performed to assess the scales obtained after the exploratory factor analysis. All questionnaires were evaluated using AMOS 23 (Analysis of Moment Structure) package program and four variables were analyzed with a single CFA model (N = 273). Research model was found to be compatible with data set, and each of items was significantly loaded into its own variable. The values ​​have been found as: CFI = 0.88, IFI = 0.95, TLI = 0.93, χ2 / df = 1.85 and RMSEA = 0.05. In addition, PNFI is calculated as 0.72, which is greater than the cutoff point of 0.70.

Table 3 shows variable correlations with the reliability of scales. When we look at Table 3 , we see that all reliability estimates of each variable, including Alpha coefficients and composite reliability (CR) calculated by AMOS 23, are close to or above the limits of what is suggested by Fornell and Larcker (1981). Analysis result shows that square root of the AVEs of each variable is higher than correlation of the implicit variables between the variable pairs. It can be seen that results of the research scales, convergence and decomposition were sufficient for the analysis. Table 3 shows correlations estimates and reliability, validity analysis results.

Table 3 -
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Analysis of The Research Model

We tested the first three research hypotheses with the structural equation model (YEM). Table 4 shows the relationships between normative influence, informative influence, technology consciousness and status consumption.

Table 4 -
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Table 4 shows that the conceptual model is in consistence with data. Incremental compliance and comparative compliance indices are close to 0,9, which is considered as the threshold value. The ratio of chi-square and degree of freedom is a small value from 5 (χ2 / df = 2.82) as suggested. Moreover, RMSEA value of 0.07 is acceptable because it is lower than threshold value of 0.08. When the relationship between normative influence and technology consciousness is examined (β = 0.74 p <0.01), it is obvious that there is a positive relationship between them. For this reason, hypothesis H1 has been accepted. When we look at the relationship between informative influence and technology consciousness, findings imply that hypothesis H2 is not supported. For the relationship between technology consciousness and status consumption (β = 0.30, p <0.01), it is possible to say that there is a positive relationship between them and hypothesis H3 is accepted.

The procedure of Baron and Kenny (1986) was followed to test the mediator effect of technology consciousness between normative and informative influence and status consumption. In order to test the mediating effect, three different YEM models were developed as shown in Table 5 . According to this;

  • Model 1, which explores the direct effect of interpersonal influence on status consumption, shows that the normative influence (β = 0.46, p <0.1) is positively associated with status consumption but there was no significant relationship between informative influence (β = 0.03, p <0.1) and status consumption (R2 = 0.38).

  • Model 2, which investigates the direct effect of interpersonal influence on technological consciousness, shows that the normative influence (β = 0.45, p <0.1) is positively associated with technology consciousness but there was no significant relationship between informative influence (β = 0, 02, p < 0, 1) and technology consciousness (R2 = 0.20).

  • As seen in Model 3, it has been found that there is a positive correlation between technology consciousness and status consumption (β = 0.32, p <0.1) after the interpersonal influence sensitivity variables are controlled (R2 = 0.46). Furthermore, technology consciousness has increased the influence of interpersonal influence components on status consumption.

Table 5 -
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According to Table 5 , the effect of normative influence on status consumption is mediated by technology consciousness. Therefore, H4 is supported. However, since there has no relationship between informative influence and status consumption, there have not found mediating effect of technological consciousness on the relationship between informative influence and status consumption. Therefore, H5 is not supported.

Discussion

The findings of this study have important theoretical contributions. The fundamental insight is about the varying effect of normative and informative interpersonal influence and technological consciousness on status consumption. Although status consumption has become more common among consumers, there is little understanding regarding their relative importance. The role of fashion consciousness on status consumption has been examined by previous research. However, when we look at the smartphone marketing, technological consciousness, which is derived from fashion consciousness, has not been investigated yet. Therefore, this study aimed to understand the relationship between technological consciousness and status consumption, which is a gap in literature. Hence, an important theoretical contribution of this study is determining the relationship between technological consciousness and status consumption. According to the path analysis results, there is a positive relationship between technological consciousness and status consumption. This finding shows that, fashion consciousness turns into technological consciousness in technological marketing. Brands who sell technology products should increase technology consciousness of the consumer in order to increase their sales. Moreover, ıf they want to make a difference in competition, they must strive for establishing technology in an up-to-date manner. Findings of this study demonstrates empirical results that technology consciousness has direct effect on status consumption. Furthermore, it also demonstrates that technological consciousness has a positive mediator effect on the relationship between normative influence and status consumption.

According to Lertwannawit and Mandhachitara (2012) there is a positive relationship between susceptible to interpersonal influence (both normative influence and informative influence) and status consumption. In this study, susceptible to interpersonal influence was examined separately as normative influence and informative influence. On the other hand, according to Clark et al. (2007) normative influence has an impact on status consumption rather than informative influence, which is consistent with our understanding of the nature of status consumers. Parallel with these studies, we found that there is a positive relationship between normative interpersonal influence and status consumption. However, our results indicated that there is no relationship between informative interpersonal influence and status consumption, which is inconsistent with previous research. This result may be due to the fact that studies are applied to different consumer groups. For example, consumer group in this study may be those who are less sensitive to informative influences. Less sensitivity to informative influences may have led to such a result.

The results indicate that the model is effective in explaining status consumption of university students in smartphone market. Most respondents in this research were younger generation and they have seen familiar with technological changes in their life, and they closely follow technology (Yeh, 2016). Therefore, our hypothesis proposing technology consciousness are supported. Younger consumers are more likely to benefit from new technology (Barutçu, 2007) and younger generation’s consciousness is fairly high. Therefore, some advice can be generated for brands from this point of view. New product development is a long process for brands. If brands want to raise consciousness in consumer-mind, they can add new features to their technological products by taking advantage of these findings. In this way, they can increase their sales by creating technology consciousness on younger generation. However, it should not be forgotten that these new features brought to their products must be introduced to the consumer effectively and the consumer should be informed about these features.

Theoretical and practical implications

To predict younger generation’s status consumption in smartphone marketing, we have tested a different model. Several limitations exist in this study. Firstly, this study was applied on Turkey’s smartphone users. In order to generalize the results, this study should be applied to users in different countries with different cultural effects, because interpersonal influence could vary from culture to culture.

Secondly, the proposed model should be adapted to other type of technological products. When the model is adapted to other type of technological products, especially technology consciousness is expected to become a more important factor in predicting another type of consumer behavior.

Third, this study was applied to university students who use a smartphone. Therefore, sample of this study was almost young generation. But other age groups may behave differently when they purchase a smartphone. For example, status consumption couldn’t be such an important factor for adult consumers. Because of this reason, adult consumers’ purchase behavior should be examined with different perspectives. Future research could add new factors and evaluate their influence on smartphone consumption. Moreover, future research could compare users in different age-groups and educational levels.

Fourth, this study oversampled highly educated individuals, who are bachelor, master and doctor students. The result of this study can change when it is applied to low-educated individuals.

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Publication Date

28 January 2019

Article Doi

https://doi.org/10.15405/epsbs.2019.01.02.57

eBook ISBN

978-1-80296-053-2

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Future Academy

Volume

54

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1st Edition

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1-884

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Business, Innovation, Strategic management, Leadership, Technology, Sustainability

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Can, Y., & Erdil, O. (2019). Evaluating Status Consumption: The Relationship Interpersonal Influence And Technology Consciousness. In M. Özşahin, & T. Hıdırlar (Eds.), New Challenges in Leadership and Technology Management, vol 54. European Proceedings of Social and Behavioural Sciences (pp. 674-687). Future Academy. https://doi.org/10.15405/epsbs.2019.01.02.57

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