The Relationship between Cultural Dimensions and Consumer Behavior: Empirical study from Service Sector in Pakistan

Abstract

This thesis investigates the relationship between Cultural Dimensions and consumer behavior in a multicultural developing country. This in-depth analysis is done using National Culture theory proposed by Hofstede and three selected consumer behavior variables namely: Customer Satisfaction, Loyalty and Switching. Moreover, the relationship is examined at individual level of analysis, between users of mobile phone and debit card services within the context of respondent’s regional subcultures. The study also takes into account socio demographic profile of respondents and attempts to understand differences in Cultural Dimensions and the consumer behavior. The study has identified few theoretical and methodological gaps that were addressed later. There is scanty literature in context of services marketing that takes into account the direct influence of Cultural Dimensions on the three selected consumer behavior variables. In available studies Customer Satisfaction, Switching and Loyalty are illustrated as the outcome of service quality commonly known as SERVQUAL but the direct effect of Cultural Dimensions on these three consumer behavior variables is missing. Another theoretical gap is lack of literature and academic research on individual consumer behavior in context of geographical and regional subcultures. This phenomenon is termed as ‘ecological fallacy’ in which the nations are treated as a homogenous group and are considered as representative of entire culture. In addition, we find abundant cross-cultural researches but systematic data on intra-cultural research that takes into account cultural heterogeneity is scarce. To address this issue we have used individuals as unit of analysis in context of their regional subcultures. Finally, drawing from existing literature and gaps identified, we develop a conceptual framework that hypothesizes the relationship between Hofested’s' Cultural Dimensions and the three specific consumer behavior variables. Anchoring on a post positivist philosophy a detailed quantitative investigation is conducted pertaining to the influence of Cultural Dimensions on Customer Satisfaction, Loyalty and Switching. A total of 3663 respondents completed the survey-based questionnaire from all across Pakistan. This study considers Pakistan as multicultural and heterogeneous society, therefore, subcultures of Pakistan have been discussed. The unit of analysis in this research is individual consumers and their behavior is studied in context of subcultures. In other words, consumer behavior is investigated within individual’s own social and ecological environment. The ecology here refers to regions to which individuals belong or reside and influences their habits and mindset. Through multiple regression technique the findings of the research reveals significant influence of Cultural Dimension on Customer Satisfaction, Loyalty and Switching. The findings also validate the Cultural Dimension score for Pakistan as tabulated by index score given by Hofstede, although significant differences have been observed in various instances at subcultural level. This study has made significant contributions at theoretical, methodological and managerial level. Theoretically, study offers an explanatory model that reveals Cultural Dimensions as predicting variable where the beta score of each construct was significant in explaining the three selected consumer behavior variables at individual level of analysis in context of regional subcultures. Methodologically, the thesis modifies the original constructs of measuring Cultural Dimensions proposed by Hofstede from organization behavior context to consumer behavior and offers unipolar constructs. This makes the scale more appropriate for individual level cultural orientation. In course of managerial contribution, the study proposes mosaic profiling of consumer based on resident strata of respondents and illustrates significant difference in mean scores of Cultural Dimensions and the three selected consumer behavior variables. Finally, we recognize the limitation of the study and set directions for future research.