1.6 The Effects of Agency on Consumption Choices

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From the course by The Chinese University of Hong Kong

Selling to Chinese Consumers

26 ratings

The Chinese University of Hong Kong

Selling to Chinese Consumers

26 ratings

Course 1 of 4 in the Specialization Doing Business in China

This course is designed to help learners sell their products, goods and services to Chinese consumers. To achieve this goal, the course will use evidence-based research in psychology, economics, legal studies and marketing to help learners understand the historical, economic and legal contexts of doing business in China and the behavioral characteristics of Chinese consumers. The course will cover topics in Chinese and global marketing, Chinese consumers, institutional and cultural influence on consumer motivation and behaviors in Chinese markets, and brand management in China.

From the lesson

The Chinese Consumption Market

China is a big consumption market. It is a distinctive consumption market because of its unique contextual and cultural factors. Why do Chinese consumers spend big money on luxury brands? What roles do historical, contextual and cultural factors play in influencing Chinese consumption habits? The current module seeks to answer these questions.

1.1 The Growth of the Middle Class and of China as a Country6:30

1.2 The Sociological and Economic Characteristics of Chinese Consumers4:25

1.3 An In-Depth Look at Why Chinese Consumers Like Luxury Brands3:51

1.4 The Effects of Lay Elitism on Consumption Choices4:22

1.5 Dialogue with Scholar: Professor Chi-yue Chiu10:53

1.6 The Effects of Agency on Consumption Choices6:23

1.7 Dialogue with Scholar: Professor Krishna Savani10:20

1.8 This Week's Recap1:23

1.9 Dialogue with Practitioner: Susanna Chiu20:19

Meet the Instructors

Prof. Letty Kwan
Assistant Professor
Department of Psychology

In the last lesson, you've learned about

how motivation can influence

consumer’s decision.

Specifically, you have learned

Mainland Chinese consumers’ craze for

luxury brands may be related to their

subscription to the belief in lay elitism.

In this lesson, we will discuss another

cultural factor, namely, the cultural

conception of agency, and its effects

on one’s choice for consumer goods.

As mentioned in the last lesson,

Mainland Chinese consumers don’t

necessarily choose according

to what they like.

Soon I will show you a video presentation

of a controlled experiment, which

demonstrates Chinese consumers may

make their choice not entirely based on

their own preferences.

Suppose you are presented with

a number of pens.

Most of them are of the same color

and one of them is of different color.

You can choose and take home

one of the pens for free.

Which pen would you choose?

When put in this situation, only 30%

of the Chinese participants in this

experiment chose the minority color pen.

More importantly, they did so not

because they liked the majority color pen

more. When we switched the majority color

to the minority color, the percentage of

participants choosing the minority color

pen remained approximately the same.

Let’s take a look at this clip now.

Choosing what we prefer is a widely

accepted notion in North American culture.

However, in Chinese culture, consumers

do not always choose what they like.

So, if Chinese do not always choose

according to what they prefer,

do they choose randomly?

If not, what is the basis for their choice?

Krishna Savani is a professor

at the Nanyang Business School

His research showed that the link

between consumer preference and choice

is not always strong.

That is, some people do not always choose

what they like most.

For example, in his study,

he found that for North Americans,

the link between preference and choice

is stronger. But for Indians, this link is

considerably weaker. Professor Savani

attributed this disparity to the

differences in the conception of agency

across the two cultures.

Models of agency are implicit frameworks

of ideas and practices about

“how to be a good person.”

Models of agency guide actions;

they reflect descriptive, prescriptive,

and normative understanding

of how and why people act.

Professor Savani believes that Asians

are more likely to endorse

the Model of Conjoint Agency,

while North Americans are more likely

to endorse the Disjoint Agency Model.

For people who subscribe to

the Disjoint Agency Model,

they believe that actions are freely chosen

according to personal preference, goals,

intentions, and motives.

People’s actions are independent from

those of others. As a consequence,

people’s actions are expressions of their

own individual preferences.

On the contrary,

people who subscribe to the Conjoint Agency

Model value social responsiveness.

They prefer actions that are responsive to

social obligations, situational demands,

social norms and role expectations.

Accordingly, their preferences, goals

and intentions are accountable to others.

Expression of preferences in action is not

emphasized in the Conjoint Agency Model.

The greater popularity of the Conjoint

Agency Model in Asian societies may

explain the greater inconsistency between

preference and choice there.

However, as shown in Professor Savani’s

more recent studies, many Americans know

that others may not like people who

selfishly think of their own personal

preferences only when they make choices.

Nonetheless, Asian consumers care more

about following others’ opinions

than do American consumers.

We can increase consumers’ social awareness

by reminding them of the social norms

or by making them feel that

they are being watched by others.

Socially aware Asian consumers are likely

to make choices solely based

on other’s preferences.

In contrast, socially aware American

consumers continue to make choices based on

their own personal preferences.

In this lesson, we demonstrated that the

culture can influence one’s belief about

agency. Conjoint Agency beliefs are more

prevalent in Chinese culture, and Chinese

consumers are less likely to make choices

based on their preferences primarily.

Asian consumers are more concerned

about other people’s expectations.

When they become more aware of the

presence of others, they are less likely

to make choices based on their own

personal preferences. When a product is

introduced to a new market, a common

practice is to assess the potential market

share by surveying consumers’

wants and preferences.

In China, this is also important,

but probably not sufficient.

To accurately project a product’s market

share in China, aside from measuring

consumers’ personal preferences,

you should also know how consumers expect

their significant others would view these

purchases. Do consumers think that

their choices are considered socially

appropriate by others?

Knowledge of personal preferences and

social perceptions are of equal importance

in predicting Chinese consumers’ choices.

In the next segment, you will watch

an interview with Professor Savani.

In the interview, he will talk about

how his research on preference and choice

helps to understand Chinese consumers.

Let’s watch the interview now.

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