The Journal of Applied Behavioral Science (JABS), peer-reviewed and published quarterly, is the leading international journal on the effects of evolutionary and planned change. Founded and sponsored by the NTL Institute, JABS is continually breaking ground in its exploration of group dynamics, organization development, and social change.
Is there such a thing as Rolex Republicans? In our new study, we say the answer is decidedly yes.
Our research team analyzed the luxury goods market, which notched $262 billion in sales in 2017, to understand an under-explored trend—how political ideology influences the purchase of high-end goods.
While marketers spend tens of millions trying to trigger aspirational buying, chances are they either don’t target consumers’ political aspirations or do so delicately. There’s a good reason—doing so could antagonize prospective buyers, with uncertain rewards. Witness athletic goods manufacturer Nike’s move to hire Colin Kaepernick as the face of its new campaign. While the company earned extensive media coverage and is experiencing a sales rebound, the move polarized other groups, such as investors.
Yet marketers may want to take note of our study, which investigates how political ideology, such as being conservative or liberal, affects buying patterns when individuals either want to maintain status or advance it. Since luxury goods is a hyper-competitive market, marketers are continually seeking ways to expand their customer base, engage with customers, and activate emotional buying triggers.
We hypothesized that since ideology shapes views about social hierarchy, it would also influence consumption behaviors related to social hierarchy. We further hypothesized that conservatives, who seek social stability, would have a greater desire for luxury goods when their status maintenance goals were activated. This study is different from past research that focuses on status maximizing as a single objective by recognizing that it has two parts: status maintenance and status advancement. However, it builds on prior research finding that conservatives differentiate themselves through products that signal they are better than others (vertical signaling), whereas liberals differentiate themselves through products that signal their uniqueness (horizontal signaling). In other words, Rolex Republican, meet Lululemon Liberal.
We conducted six studies in the U.S. market to test and validate our hypotheses. Key findings include:
– Conservatives view status maintenance as more important than liberals.
– Conservatives prefer luxury goods more than liberals when they seek to maintain social status (e.g., when their current status is high), but this behavior does not occur in the absence of a status goal or when a status advancement goal is activated.
– Conservatives with high-status positions increased luxury goods purchases, regardless of whether they attained the position via income or education.
– When conservatives are temporarily made to think about maintaining social status (e.g., via print ad message), they desired luxury goods more than liberals.
In the first study, we analyzed 21,999 consumers who bought luxury cars between October 2011 and September 2012. Of the buyers, 33% identified themselves as Republicans, 31% as Democrats, and 36% did not disclose their political affiliation.
Republicans with high socioeconomic status (SES) were 9.8% more likely to purchase a luxury car than their high-SES Democrat peers. Thus, a luxury car seller could expect to gain a 14.45% increase in sales targeting high-SES Republications than high-SES Democrats. Subsequent studies focused on different products, including high-fashion clothing, eyewear, and headphones, validating these overall findings.
Our research empowers marketers to target consumers by political ideology, deepening their segmentation strategies for higher sales and profitability. For example, brands could run targeted marketing campaigns on conservative media platforms (e.g., Fox News); in conservative geographies (e.g., Texas); or online, targeting consumers with conservative digital footprints. If brands do not currently emphasize status maintenance messages, they could change communications to resonate with high-SES conservatives. For example, a message such as Rolex’s “Class is forever,” might motivate high-SES conservatives more than Aston Martin’s claim that cars will “add value” to their lives.
Many brands will be willing to go all-in on their desired demographic. For example, Jeep, the car most desired by Democrats, only sponsors left-leaning media. Others will likely need to toe a more nuanced line to drive sales with key demographics, without alienating others. While it may be more profitable to sell luxury goods to Rolex Republicans, it is likely that Lululemon Liberals also contribute to the bottom line.
The slow pace of change in higher education curricula is inadequate in preparing students with the skills needed in a world where machines work alongside human professionals. Swiftly emerging digital innovations are transforming business relationships. Yet, the business community is far ahead of academia in considering & understanding how to embrace technological change. Businesses recognize that a very different talent base is needed to build competitive advantage with ongoing digitalization. Using a foundation of learning theories, we argue that college faculty need to facilitate, within students, the convergence of technologies with the needed people skills.
What specific external events influenced your decision to pursue this research?
Technological innovation & digital convergence will continue to lead to industry disruption. We believe college students need to gain exposure to such cutting-edge technologies and that they must ingrain the conceptual, inquiry, critical thinking, creativity, and integrative learning skills needed to add value in an ever-changing business environment.
In what ways is your research innovative, and how do you think it will impact the field?
We argue for greater embracing of technology in the classroom. Additionally, we provide a foundational introduction to several emerging technologies and offer current examples of how such digitalization is impacting business relationships. This first means faculty embracing greater use of technology as a learning tool. In this way, faculty will serve as role models. College students grow up in a digital world. Ready access to information and communication technology is integral to how they learn. Life-long learning is imperative to stay abreast in a digitally disruptive world. Second, it is important that classes introducing emerging digitalization so that students learn to think creatively & critically regarding how technology is changing business. Given the rapid rate of technology transformation, exposure to a specific technology, while in college, is less important than developing the skill set integral to adding value while working in conjunction with smart machines. Furthermore, we are hopeful that the institutions of higher education, professional associations, publishing companies, and technology companies will support and strengthen faculty efforts in embracing technology to continuously enhance learning. Although there are negatives associated with the use of some technologies in the classroom, we strongly believe the benefits are far greater. With regular use & exposure to technology, students will learn: how to accept responsibility for their learning, to develop self-control in their use of technology, appropriate inquiry capabilities, and how to synthesize and critically access large amounts of available information.
The U.S. government is the largest customer in the world, purchasing more than a half-trillion dollars’ worth of goods and services yearly out of its $4 trillion budget. So it’s no wonder that some 60% of Fortune 1000 customers sell to the government. But is this client one to go “all in” on? While a stable customer, the U.S. government market can prove challenging to navigate in other ways. For example, Lockheed Martin had to cut costs (and thus revenue) of the F-35 fighter jet in response to sudden political pressure, which prompted a 4% drop in its market value in 2017.
Despite the U.S. government’s buying power, there has been little research conducted on whether selling and serving this customer positively affects firm performance and profitability. A new study in the Journal of Marketing seeks to address this gap. Our research team developed a conceptual framework based upon qualitative in-depth interviews with 19 government contracting experts. We then used prime contract award data provided by the U.S. Government Accountability Office to assess revenue provided by the U.S. government to 1,360 publicly traded firms between 2000 and 2017. Finally, we developed a large empirical model to study the stock market’s response.
In our interviews, we learned that U.S. government business has unique characteristics that differ from commercial markets, including promoting diverse socioeconomic goals, allocating millions in set-aside contracts for historically disadvantaged firms, and sweeping upheavals accompanying political leadership changes. In addition, U.S. government customers often shun taking risks to acquire novel solutions and technologies and are under constant pressure to reduce spending. Firms that serve the government are subject to strict regulations and must follow specific rules and guidelines to bid for and execute work. However, the U.S. government’s purchasing power is enormous, contracts are large, and its agencies are less likely to have solvency issues than commercial firms.
Key findings include:
– Serving the Business-to-Government marketplace has pros (scale and reliability) and cons (high compliance and learning costs).
– Investors see value benefits accrue to those companies that do a large book of business with the U.S. government, typically over 30% of their yearly sales.
– However, investors also see risk concerns to serving the Business-to-Government marketplace.
– Executives should recognize that in order to reap full benefits from B2G relationships, they need to strategically manage their portfolio of government customers (both in terms of breadth and depth).
– Regulations may entrench market incumbents, rather than increasing market access to more participants, an unintended consequence.
So how can companies that serve the U.S. government seek to optimize both performance and risk? Our research team suggests that they should:
– Become “purists” rather than “tourists” by increasing government emphasis, rather than dabbling in this market, due to its cost and complexity of entry.
– Develop a concentrated portfolio of key accounts (i.e., agencies) and then build strong relationships with these customers to extract the most value from them. This will improve firm performance by increasing value and reducing risk.
Managers at firms can use this research to evaluate their government marketing and sales strategies to optimize performance and risk – or decide whether to pursue this market at all. Top executives of firms should consider whether increasing their government focus is key to future success or creates systemic financial vulnerability that could create significant future harm if political priorities change.
Policymakers should be cognizant that current regulations and procurement barriers entrench incumbents, making it harder for U.S. agencies to get new solutions and competitive prices. If so, current processes may need to be reformed to increase competition.
Seasonality is a protracted issue of tourism, and it is the most researched tourism subject. Due to continual changes arise by seasonality, tourism organizations face up and downsize in the market. Managers, marketers, and policymakers pay attention to seasonality since it influences return on investment and business’s sustainability in general. However, seasonality in tourism has still been a less known phenomenon. Theoretical and conceptual developments regarding seasonality in tourism remain limited. Although some studies have been provided to expand our understanding of seasonal tourism trends, seasonal patterns, and tourists’ choices or behaviors, little is known about how tourists respond to various seasonality factors. Without that understanding, tourism managers cannot establish specific marketing plans to deal with the issues of seasonal variations. In accordance with that research gap, we suggest that seasonality in tourism is associated with a number of factors that influence tourists across off, peak, and shoulder season. Therefore, we stood to conceptualize and develop a dualistic model to explain tourist reaction across seasonal variation by utilizing approach-avoidance and regulatory theories and examine marketing plans and strategies for targeting particular forms of tourism and purposes of travel, so that managers can cope with seasonal variations.
In what ways is your research innovative, and how do you think it will impact the field?
Existing studies focus on examining seasonality from the cause and impact approach and mostly based on case analysis specific to a particular area. Hence, tourism seasonality literature experience limited theoretical and conceptual development. In response to this, our study provides a fresh theoretical and conceptual approach to re-examine seasonality in tourism. To contribute to the literature on tourism seasonality, the purpose of this study is threefold. First, the study systematically evaluates the causes and impacts of seasonality in the tourism context. Second, the study examines the merits of approach–avoidance and regulatory focus theories for understanding seasonal variation in tourist behaviors. Third, the study develops a dualistic model to integrate approach–avoidance and regulatory focus theories in order to investigate the dimensions and factors that determine seasonal tourist variation. We categorized seasonality into fruition, structural, climate-based, and unforeseen factors, and that our dualistic model assessed these factors which create, accelerate, and/or prolong seasonal tourist flow. The model explains a number of circumstances in relation to seasonality such as crisis, school calendar, price, income and choice of destination as a signaling point contemplated with the above-mentioned factors. Practically, the dualistic model assists managers, marketers, and policymakers in their effort to cope with tourist demand in accordance with seasonal variations.
What advice would you give to new scholars and incoming researchers in this particular field of study?
We found out from our research that seasonality in tourism relates to economic, social, and environmental aspects, thus incoming researchers could investigate this topic from different approaches. First, empirical studies are crucial to further examine the dualistic model of approach–avoidance motivation and regulatory focus theory and ensure the validity and reliability of the four types of seasonal factors. Second, climate is currently a principal factor in seasonality, and it is likely to become more influential in the future. Seasonality is influenced by climate and weather-related variables that could determine managerial strategies and accelerate low-season demand. Moreover, the social and environmental aspects of seasonality should be examined to determine what positive and negative effects are associated with peak seasons and off seasons. Third, methodologies and advanced statistical analyses should also be given utmost consideration in method processes. The existing methodologies used are the coefficient of variation, the Gini coefficient, summary indices, correlation coefficients, panel data, and time series analysis. Future studies should be broadly applicable in analyzing seasonality in tourism in the context of market trends and management strategies. Lastly, existing seasonality studies have focused on tourists from developed countries or countries and regions located at high latitudes. Future researchers should pay more attention to tourists from developing countries and places with a variety of climates, such as tropical and desert environments, rural locations, and remote areas.
We first met in 2014 when Professor El Sawy was giving a talk as part of the Renowned Scholars Seminar Series at the Department of Digitalization at Copenhagen Business School, Denmark. Here, we connected and discovered a common research interest in studies of the impacts of digitalization on management. In February 2015, at the University of Southern California, our second conversation ended up as a philosophical brainstorming session lasting several hours. The research idea was born.
Our motivation was sparked by a general curiosity on time as a resource and the many assumptions that relate to real time management strengthened by Professor El Sawy’s profound knowledge on Time Issues, gained from his PhD dissertation, teachings of MBA class on fast response management for almost a decade, plus a new course on real-time management. We then embarked on answering the open question of “what is real-time in the minds of managers?”
Were there any specific external events—political, social, or economic—that influenced your decision to pursue this research?
The profound societal changes triggered by technological disruption also influence our relation to time. We noticed how real time becomes increasingly important for the value proposition of enterprises and their ability to develop and innovate technology-driven products and services. At the same time, we see how people and societies are challenged by this acceleration of time demands. The “faster is better” seems to have severe consequences for people and societies in general and apparently sometimes for the worse, not the better. Many people cannot cope with the accelerating pace of technology and risk suffering from stress and burnout, which eventually slows down business productivity. Thus, there seems to be a need for critically considering how we approach time and the value assessment of real time.
What has been the most challenging aspect of conducting your research? Were there any surprising findings?
Since this took of as an explorative study we did not know in advance what direction the study would take. Instead of defining hypotheses and using them as constraining light posts we decided to let the data speak to us, hoping that surprising findings would appear from the data. We tapped into the knowledge potential there is in the “go with the flow” of inductively conducting this type of research. Luckily we were rewarded with surprising empirical as well as theoretical findings. The results indicate that faster is not always better, and that flow is an alternative way to go.
This study embraces the product focus as well as the customer focus to address this paradox (expressed by the famous Henry Ford quote) “If I had asked people what they wanted, they would have said faster horses” even though the faster horses eventually will kick them off. The quote is meant to highlight that real-time management is about understanding the underlying drivers of accelerating time and be able to navigate managerial practices accordingly. Those who are able to harness that may stand a better chance of creating lasting value with digital technologies for customers and business.
From 2003 to 2015, Hong Kong (HK) saw a more than five-fold increase in mainland Chinese tourist (MCT) arrivals. With a population of 7.3 million, HK residents had to share their limited living space with 59 million tourists, of whom 77% came from mainland China. The tension between HK residents and MCTs has increased substantially. The negative public opinion on MCTs reached its peak with a series of “anti-locust” protests in early 2014. Protesters staged satirical rallies to urge MCTs to go home. In 2015, HK saw the first decline (-2.97% compared to 2014) in over a decade in MCT arrivals. The ensuing Umbrella Movement has been regarded as a panoply of identity politics and civic passions, some of which was anti-China/Chinese.
In various popular tourism destinations around the world, anti-tourist sentiment has been expressed by residents whose lives have been inconvenienced to say the least. Over-tourism has become a popular discussion topic in the news and social media. Mainland Chinese outbound travelers have dominated the tourist arrival growth in many countries and become an important source market internationally. Along with the rapid increase in tourist numbers, reports of Chinese tourists’ lavish and sometimes unruly behaviors become the media headlines from time to time in many countries. The tourism research community has just begun to address all these unconventional phenomena. These events stimulated our curiosity in the host community’s stereotypes toward a dominant tourist group, aiming to develop counter-stereotype strategies through a comprehensive study of the generation, content, and consequence of tourist stereotypes.
This conceptual paper represents a first attempt to link attribution and stereotypes by identifying interactions between each step of the two cognitive processes, in the context of resident-tourist encounters. It pioneers in establishing conceptual links between a tourism phenomenon and the social psychology theoretical development, through a thorough literature review and the proposed conceptual framework of tourist stereotypes and resident attribution.
This paper also broadens the research paradigm of resident-tourist relationships. Attribution theory not only offers a special lens through which to peek the complex and dynamic resident-tourist relations, but also provides an opportunity to test a new framework through the integration of tourist stereotypes, thus leading tourism scholars toward greater theory development and testing. The comprehensive model proposed in this research can serve as a productive meta-theoretical framework – not only giving an account of existing knowledge in social psychology and tourism, but also generating fruitful research questions that can enhance our understanding. This comprehensive framework needs to be tested urgently using empirical data. The complex relationships among the variables in the model pointed out directions for future research and provided many potential opportunities.
In addition, attribution studies need to move out of the “social vacuum” psychological laboratory, entering the real and complicated social settings to be further developed. The complex and dynamic resident-tourist encounter settings could overcome the constraints imposed by laboratory experiments, and broaden the scope and depth of attributional research, to address the recognized deficiencies of attribution theory outlined in this paper.