Consumer Behavior and Marketing Implications

While marketers and consumers behavior researchers generally agree that the consumer behavior of blacks differs from that of whites, there appears to be no consensus on the causes of the differences. One study suggests that black / white variations in consumer behavior may be attributable to socialization processes that operate differently among the two subcultures.

Now let us examine some specific consumer behavior findings regarding this market. We shall look at the most important elements and see how they relate to marketing strategy variables.

Product purchase patterns: Blacks and whites differ in where their money comes from and where it goes. Since white house holds have significantly more money than black households, they spend more. However the spending patterns for typical white households are similar. When comparable income blacks and whites are compared do emerge in purchasing patterns. These consumption differences are accounted for by reasons that range from the obvious to those that are more subtle. For example, lower black ownership of major home appliances appears to be primarily related to low income substandard housing, and lack of proper utility connections. Another reason behind the different black and white consumption patterns is the blacks’ narrower spectrum of choice due to their history of being discriminated against. That is, blacks have had less selection in the purchase of homes, vacations, travel, dining, entertainment an so on, which has resulted in a greater expenditure per unit on other things that are available to them. However, today blacks are spending more for such things as housing, recreation, travel, and education. Effective marketing and public relations campaigns by such companies as American Airlines, PepsiCo, and Greyhound have both influenced and benefited from such changing patterns.

Nevertheless some of the purchasing patterns which often were rooted in discrimination have survived even in the face of increasing opportunity such that a significant gap exist between middle class blacks an whites. For example although blacks and whites earnings $ 24,000 –$48,000 are about equally likely to own cars (91 percent versus 97 percent, respectively), only 9 percent of blacks (versus 24 percent of whites) owns stocks or mutual funds, 4 percent (versus 11 percent of whites) own equity in a business; 11 percent (27 percent for whites) have Individual Retirement accounts or Keoghs; 59 percent (74 percent or whites) own houses, and 11 percent (versus 20 percent) own investment real estate. Consequently blacks median net worth assets minus liabilities is $17,627 compared to whites $ 54,644.

Another factor that may cause different consumption patterns is thought to be the tendency by minority groups to engage in compensatory consumption, that is, an attempt to purchase the material goods that are reflective of their achievement of full status in American society. Results of product usage research in fact support this general pattern and suggest that blacks spend more on specially visible products than do whites of the same income class. A black editorial writer observes that one of the reasons for the black / white wealth gap is that middle income blacks tend, far more than their counterparts, to spend their income not on wealth producing assets but on things that start depreciating the day they are purchased clothes, cars, another items calculated to impress.

Studies have consistently shown that blacks are prone to buy brands that are nationally advertised, those that have a prestige connotation and those about which they can feel; confident. In fact, as prices increase, the movement of black consumers toward private labels and generics is slower than it is for the general population. It has been found that blacks in some shopping situations remain loyal to some national brands even when prices are raised 45 percent or more.