Value Priorities and Consumer Behavior in a Transitional Economy: The Case of South Africa

We examine consumer value priorities in Africa's most important transitional economy, viz., The Republic of South Africa. To the best of our knowledge, this is the first extensive study of value priorities with a large, representative sample of consumers in a transitional economy. We study the structure of the value priorities, their antecedents, and their relations with optimum stimulation level, lifestyle interests, brand purchase behavior, and consumption of innovative products. A number of hypotheses concerning the effects of various value domains are developed, using Schwartz's (1992, 1994) value theory. Value priorities are measured with a new measurement instrument, the Portraits Questionnaire (Schwartz, Lehmann, and Roccas 1997). This instrument is specifically developed for use in generally less educated populations often found in less-advanced transitional economies. We find strong evidence on the validity of the structure of value priorities in South Africa and on the relation of the value priorities with other constructs. The results emphasize the importance of gender, age, and the ethnic cultural group or subculture to which the person belongs as antecedents of value priorities. Other relevant antecedents include household income, degree of urbanization, and being member of a religion or not. Systematic and predictable relations with optimum stimulation level are observed. Systematic effects of value priorities on lifestyle interests, brand switching behavior, and consumption of innovative financial products are also found. The results are generally consistent with our hypotheses. Little consumer research has been conducted in transitional economies, and even less with broad representative groups of consumers. That is unfortunate from a practical point of view as the economic importance of these countries is rapidly growing. Transitional economies are increasingly moving from a product(ion)-oriented focus to a market-oriented focus in which consumer desires become paramount. However, there is still a long way to go, one reason being that a consumer orientation is new to most transitional economies. In most transitional economies, the economic system was geared toward fulfilling the needs of the state and of a privileged minority of its population. The lack of knowledge and insight in consumer behavior in transitional economies is also unfortunate from an academic point of view. Transitional economies are undergoing rapid changes that are quite unique in history. This allows for a "natural experiment" in which the effects of radical changes in society on consumer behavior can be studied in a real world setting. Moreover, it is not at all clear that the concepts and theories developed for western countries are equally relevant and applicable to transitional economies. Cunningham and Green (1984, p. 9) argued that there is "a need for more fundamental research in international marketing in order to adapt established marketing concepts to the realities of the international marketing place." In similar vein, Monroe (1993) stated that: "In this age of globalization, we need to move beyond the relative security of our own backyards and investigate issues relative to consumption on an international basis." We attempt to contribute to recti@g this situation by studying value priorities of consumers in the most important African transitional economy, viz., the Republic of South Africa. South Africa entered this decade as the world's most isolated country; politically, economically, and socially. In the years since Mandela's election, the extensive web of international anti-Apartheid laws has been repealed and South Africa has become a full partner in the world economic and political system again. These external transitions hide the extent of internal change South Africa must undergo before the transition to a market-based economy can be said to be a true success. South Africa is essentially a two-tier society in that most Whites live and work in a modem economy while the majority of Black population often interact with that economy only superficially and experience a living standard comparable to the rest of Africa (United Nations 1996). These two worlds in which South Africans live are the legacy of an Apartheid state that effectively excluded 80% of the population from free economic and political participation. The ambitious reforms of the new South African government share a fundamental goal of using the full potential of South Africa's human capital to build a stable, free, and market-based economy. Economic reforms are beginning to spread ownership of companies more widely in an economy where 80% of Johannesburg Stock Exchange shares are owned by a handful of companies. Para-state companies in numerous industries are being privatized. There are clear parallels to the situation in Eastern Europe. In the former communist countries was also a clear distinction between the elite (i.e., Communist Party members) and the majority of the population. In Eastern Europe, economic and political freedom of the majority of the population was also severely restricted. Moreover, the concentration in South Africa of economic power in a few hands is in important respects similar to (pretransition) Eastern Europe. In this study, we will examine the value priorities of South African consumers, their antecedents, and their relevance for understanding key aspects of consumer behavior. Values underlie a large and important part of human cognition and behavior (Schwartz 1992). They transcend specific objects, in contrast to attitudes, which must be examined in relation to specific and carefully defined objects (Rokeach 1973). An examination of values provides both an overall picture of a central cognitive structure of the individual, as well as a means of linking central beliefs to specific attitudes. Values provide potentially powerful explanations of human behavior because they serve as standards of conduct, tend to be limited in number, universal across cultures, and temporally remarkably stable (Kamakura and Mazzon 1991, Rokeach 1973, Schwartz 1992). Consequently, it is not surprising that values have been found to be valuable in explaining a variety of attitudes and behaviors in the consumer context (see Burgess 1992, Homer and Kahle 1988, and Kamakura and Mazzon 1991 for overviews). In the following sections, we will first discuss the construct of personal values and its role in consumer behavior. Following a discussion of the research methodology, we present our empirical findings. We close with a discussion of the results, and provide suggestions for future research.