Impact of Racial Diversity in Advertising on the Perception of Mass-Customized Products by Consumers

Although diversity is of great importance in many contexts and a legitimate goal in developing a more inclusive global world, the term itself seemingly has become a business buzzword in the late 2010s and early 2020s. There is an increasing pressure from stakeholders for more racial and ethnic diversity in teams, on corporate boards, in advertisements, and in many other dimensions of business. Consequently, it became almost mandatory for decision-makers at all management levels and business functions to designate and pursue diversity as an explicit goal. Against this broader background this chapter takes up a specific topic of diversity in marketing and examines the use of diverse portrayals in advertising, focusing on racial diversity. Specifically, it aims to demonstrate the impact of the visual presentation of different races, that is, different people of color, in product advertising on consumers’ perceived value of mass-customized products. Mass customization is a particularly interesting area for examining the impact of diversity and racial variation in advertisements, as this manufacturing strategy seeks to fulfill individual customer needs and preferences, which can vary widely. Data was collected through an online survey in which 559 Italian women evaluated one of four fictitious advertisements, which varied with regard to showing women of varied racial composition, for a customizable shampoo. The PERVAL scale was used to assess customers’ perceptions of the product’s value along functional, emotional, and social dimensions. Two single-item questions were used to assess customers’ willingness to customize and willingness to pay a higher price for the customized product. The results demonstrate that race has an impact on how a consumer perceives value only when there is no similarity effect from advertisements featuring different race models. The less similar the models to the customer are the less value the consumer perceives. In contrast, race does not appear to impact consumer willingness to customize or their willingness to pay a higher price for a customizable product.