By Nailya Ordabayeva, Daniel Fernandes, Kyuhong Han, and Jihye Jung
Political issues have become a significant part of consumers’ lives. From gun control to the climate crisis and #BlackLivesMatter, political issues dominate the headlines and divide opinions more than ever. Indeed, political polarization in opinions towards various issues (such as government regulation, immigration, and environmental protection) has been on the rise for decades, and it surpasses the gaps in opinions observed along gender, generational, and ethnic lines. It should therefore come as no surprise that political polarization is spilling outside the voting booth and impacting the marketplace. Indeed, most adult U.S. consumers self-identify as being either conservative or liberal (with few people in the middle), and the majority of consumers believe that companies should take a stand on social and political issues.
These trends are consequential for marketers because with the proliferation of social media, artificial intelligence, and data mining tools, identifying consumers’ political orientation is faster and more efficient than ever. Incorporating consumers’ political orientation into companies’ segmentation and marketing strategies, just like gender or income, can help companies anticipate and manage consumers’ and brands’ political activism as well as anticipate and leverage ideological differences in consumption across non-political domains.
Polarization drives consumer activism and consequences of brand activism
Political polarization drives consumer activism and the associated firm outcomes. First, Jost, Langer, and Singh (2017) show that consumers’ political ideology impacts their engagement in marketplace activism. Liberals liberals boycott (avoid buying) and buycott (buy) brands for political reasons more that conservatives, controlling for consumers’ demographic and regional (country) characteristics as well as religiosity. This is because liberals are more likely to question, challenge, and criticize existing institutions and authorities. In contrast, conservatives’ tendency to justify the existing system increases their desire to keep things how they are, and it leads them to complain less when dissatisfied and to boycott brands less frequently.
Further, Fernandes (2020) finds that conservatives and liberals engage in marketplace activism for different reasons. Indeed, extreme liberals are 25% more likely to have engaged in boycotts or buycotts in the past than extreme conservatives, who, in turn, are 150% more likely to have engaged in these behaviors than political moderates. Liberals boycott to protect individual rights and conditions, whereas conservatives boycott in rarer cases when they want to protect their inner circles. Therefore, liberals extend their concern for more permeable groups, including animals and even plants. In contrast, conservatives care more for protecting their ingroups, such as their family, extended relationships, affiliations, or country. To illustrate, liberals tend to boycott companies that harm minority groups, the environment or that have poor labor practices in underdeveloped countries, whereas conservatives boycott companies that move jobs to foreign countries or that intend to hire refugees. In case of Nike’s marketing campaign featuring Colin Kaepernick, liberals support the brand because they are more concerned about police brutality against people of color (consistent with their prioritization of fairness and care for others). In contrast, conservatives boycott the brand because they are more concerned about respect towards the American flag and the national anthem (consistent with their prioritization of group loyalty).
As increasing polarization is inspiring not only consumers, but also brands, to take a stand on social and political issues (as illustrated by Nike’s Kaepernick campaign), analysts increasingly question whether brand activism can ultimately help or hurt firms. On the one hand, the majority of marketers think it is inappropriate for their brand to speak up about politically-charged issues due to high reputational and financial risk. Bhagwat et al. (2020) show that investors also perceive such activities risky which leads corporate sociopolitical activism to lower firm value. On the other hand, the majority of consumers expect companies to use their influence by taking a stand on social and political issues in order to shape public opinion and policy. Hydock, Paharia, and Blair (2020) shed light on this debate by showing that taking sides on politically charged issues benefits some companies more than others. Across studies, consumers were 1.4 to 4.2 times more likely to choose a product by a small-market-share company (but 1.2 to 1.3 times less likely to choose a product by a large-market-share company) when the company engaged (vs. not) in political activism. Thus, small companies benefit from taking sides while big companies do not. This happens because political issues divide consumers into strong “for” and “against” camps (with few people in the middle), and companies with large market shares and extensive customer bases risk alienating more customers who disagree with their political stance than gaining those who agree with them. In contrast, companies with small market shares may increase their aggregate customer base by appealing to the sizable half of the market that agrees with them.
Implicit influence of political ideology on (non-political) consumption preferences
Beyond explicitly shaping consumer and market response to political issues, increasing polarization exerts an additional, implicit influence on consumer preferences across domains. This implicit influence materializes through the distinct consumption preferences of politically conservative and liberal consumers in various categories and contexts. Jung and Mittal (2020) provide an overview of the effects.
A common reason behind ideological differences in consumption behaviors stems from the diverging views that conservatives and liberals hold about inequality and the social hierarchy. Conservatives endorse inequality and the hierarchy that exists in society as a legitimate reflection of individual differences in effort and ability. In contrast, liberals view inequality and the hierarchy as illegitimate, since they believe that everyone works hard, but some attain higher economic positions through luck or connections. These distinct beliefs have tangible implications for conservatives’ and liberals’ product preferences as well as their tendency to seek financial risk.
To illustrate, hierarchy beliefs lead conservatives and liberals to use distinct products and brands to differentiate from others in the marketplace. Ordabayeva and Fernandes (2018) find that conservatives differentiate vertically through consumption of status-signaling and luxurious products, whereas liberals differentiate from others in lateral, non-hierarchical ways, through consumption of unique and personalized products. For example, in one study, participants were given an option to choose between mugs with distinct self-differentiating messages. Conservatives were 1.37 times more likely than liberals to choose a mug that signaled their vertical superiority (“Just Better”) over a mug that signaled horizontal uniqueness (“Just Different”). Another study examining real brand preference showed that conservatives were 1.21 times more likely than liberals to choose a gift card from a luxury brand (Ralph Lauren) over a gift card from a unique brand (Urban Outfitters).
Differences in hierarchy beliefs similarly impact conservatives’ and liberals’ trust in user design (i.e., products designed by fellow users rather than companies; Paharia and Swaminathan 2019). Liberals are more likely to purchase user-designed products because doing so feels hierarchy-busting and empowering, whereas conservatives are more likely to purchase company-designed products because they feel more reassured by company expertise and product quality. For example, in one study, researchers launched a Facebook campaign in a conservative-leaning (Guatemala) and a liberal-leaning country (Austria) for a website using an ad that described the website as either user-designed or company-designed. After controlling for various country-level differences, consumers in a conservative country were 56% more likely to click through to the website when it was designed by company experts (vs. other users), whereas consumers in a liberal country were 71% more likely to click through to the website when its idea was crowdsourced from other users (vs. company experts). Khan, Misra, and Singh (2013) show similar ideological differences in consumers’ preferences for products by well-known national versus lesser-known generic brands. For example, the authors’ analysis of scanner data from 1,860 stores across 6 years (2001-2006) concluded that the market share of national brands (vs. generic substitutes) were significantly higher in conservative (vs. liberal) geographic areas. Specifically, a one standard deviation increase in political conservatism led to an approximately 4% decrease in market share for generic brands. The difference was once again tracked back to conservatives’ (vs. liberals’) greater trust in the quality and certainty offered by well-known companies and brands.
In addition to buying products and supporting providers that reinforce or weaken the hierarchy, conservatives and liberals seek different degrees of financial risk to move up in the hierarchy. Specifically, Han et al. (2019) show that conservatives (but not liberals) are more likely to take financial risks and participate in risky ventures than when they have a higher belief in their ability to successfully complete tasks at hand (i.e., when they have high self-efficacy), because doing so has the potential to improve their position in the hierarchy. For example, in one of the studies, the authors find that conservatives were 1.1 times more likely to hold risky financial assets when they had high (vs. low) self-efficacy, whereas liberals’ likelihood to hold risky financial assets did not depend on their self-efficacy.
Notably, in addition to product preferences, political ideology also influences individuals’ reactions to consumption regulations. Irmak, Murdock, and Kanuri (2020) show that conservatives are more reactant than liberals against regulations of consumption across various domains including mobile phone use, e-cigarettes, and unhealthy food consumption, particularly when these restrictions are imposed by the government rather than non-governmental bodies. Hence, the source of a marketing or a policy message matters as it may shape message effectiveness among distinct ideological customer segments.
“Man is by nature a political animal,” wrote Aristotle echoing a phrase coined by prominent Greek statesman Pericles, “Just because you do not take an interest in politics does not mean that politics won’t take an interest in you.” These words could not be more relevant today. As the political landscape continues to shift boosting the salience and strength of consumers’ political ideologies, the (explicit and implicit) influence of politics on consumption behaviors and firm outcomes is poised to grow. Therefore, analyzing and utilizing consumers’ political ideologies in segmentation, targeting, positioning, and communication strategies may prove not only useful, but also necessary for firms seeking to survive and thrive in the increasingly politicized and polarized marketplace.
Nailya Ordabayeva is Associate Professor of Marketing at Carroll School of Management, Boston College.
Daniel Fernandes is Associate Professor of Marketing at Católica-Lisbon School of Business and Economics, Catholic University of Portugal.
Kyuhong Han is Assistant Professor of Marketing at the Kenan-Flagler Business School, University of North Carolina at Chapel Hill.
Jihye Jung is Assistant Professor of Marketing at the College of Business, University of Texas at San Antonio.
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